[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[House]
[Pages 10963-10969]
[From the U.S. Government Publishing Office, www.gpo.gov]




               THE REPUBLICANS' PROPOSED TAX CUT PACKAGE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from North Carolina (Mr. Price) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PRICE of North Carolina. Mr. Speaker, I come to the floor tonight 
with several of my colleagues to discuss our Republican friends' 
proposed tax cut package and the way it will affect the Federal budget 
and the American people.
  Mr. Speaker, President Bush has presided over the Nation's worst 
economic performance since the Great Depression and the worst fiscal 
reversal in all of American history. Since President Bush took office, 
we have lost more than 2.7 million private sector jobs, and real GDP 
has inched at only 1.5 percent annually, the worst record for any 
administration in over 50 years. The 10-year $5.6 trillion unified 
budget surplus projected when President Bush came into office is gone, 
totally gone. In its place the administration has proposed a budget 
with over $2 trillion in deficits over that same time period. That is a 
fiscal reversal approaching $8 trillion.
  These charts tell the story. Here we have the fiscal reversal 
illustrated going from a $5.6 trillion surplus 2 years ago projected 
until now looking at a $2 trillion deficit over the next 10 years. And 
this chart gives the picture on jobs. In the first 28 months of the 
Clinton administration, 6.8 million private sector jobs gained, 1993 
through April of 1995. In the first 28 months of the Bush 
administration, 2.7 million private sector jobs lost as of April of 
this year.
  Unfortunately, in the face of all this, in the face of the worst 
fiscal reversal in this Nation's history, the response of our 
Republican friends is to propose more and more of the same failed 
policies. Finding themselves in a hole, their message seems to be just 
keep digging. Mr. Speaker, Democrats believe that a stimulus plan 
should be based on three simple principles, principles that should be 
self-evident but that our Republican friends incredibly seem unable to 
grasp.
  First, a stimulus plan should be fair. It should put money back in 
the pockets of average Americans, boosting consumer demand and the 
business investment needed to meet it.
  Secondly, a stimulus plan should actually stimulate the economy. It 
should be fast-acting with its impact concentrated to provide an 
immediate jump-start to the economy. It should get the most bang for 
the buck by targeting consumers likely to spend and businesses likely 
to invest and hire new workers.
  Finally, a stimulus plan should be fiscally sound. It should be paid 
for. It should not pile up national debt. It should not contain 
gimmicks which disguise its true cost.
  Mr. Speaker, the Democratic plan that we will be debating tomorrow is 
organized around these three principles. The Republican plan fails to 
meet the standards by a country mile. It is not even close. Tomorrow 
the House is scheduled to debate the Republicans' $550 billion tax cut, 
every penny of it borrowed money, funded by increased government debt 
that will be passed on to our children and grandchildren.
  Tax cuts that actually stimulate the economy during a downturn make 
good sense. However, the Republican plan only puts in place 9 percent 
of its tax cuts this year, precisely when they are needed the most. The 
House Republican plan centers on tax cuts, on stock dividends and 
capital gains, both of which economists have rated as very ineffective 
in stimulating the economy. These proposals would benefit mainly upper-
income individuals who are much more likely to save such windfalls than 
would be low- and moderate-income families. Under the Republicans' 
proposal millionaires would receive approximately $139 billion in tax 
cuts through 2013. That is essentially the same amount of tax cuts that 
would be received by the entire bottom 89 percent of households 
combined.
  Mr. Speaker, it is simply irresponsible to be considering large 
upper-bracket tax cuts that will worsen the long-term deficit to the 
tune of $1.2 trillion over the next 10 years, to be doing this at a 
time when we should be paying down the national debt to prepare for the 
retirement of the baby boom generation, which after all begins in only 
5 years. Moreover the Republican plan is full of phony sunsets and 
other gimmicks that actually understate its true cost.
  By contrast House Democrats have proposed a stimulus package that is 
fast, fair acting, fiscally responsible, and paid for. It uses a proven 
approach to creating jobs and growing the economy, puts money directly 
into the hands of average Americans, the very people most likely to 
spend it, and it provides tax relief to businesses most likely to 
invest. It focuses on jump-starting the economy now at a fraction of 
the cost of the Republican tax cut proposal. It provides permanent tax 
cuts for most American families, including an immediate increase in the 
child tax credit, marriage penalty relief, the expansion of the 10 
percent tax bracket. The House Democratic plan also extends 
unemployment benefits for 26 weeks. It increases the level of benefits 
and provides temporary aid to States to broaden coverage to low-wage 
earners and part-time workers. These benefits would provide financial 
help to 5 million out-of-work Americans, and economists have rated that 
as one of the most effective stimuli that would we could apply.
  In contrast the Republican plan would allow the Federal Unemployment 
Benefits program to expire on May 31, leading to millions of families 
being denied this unemployment insurance to help tide them over.
  What about the States? As a result of a bad economy, States are 
facing the worst fiscal crisis since World War II. States across the 
country are cutting education and health programs and raising taxes, 
undermining jobs, undermining economic recovery. The Democratic jobs 
and growth plan in stark contrast to the Republican plan which has said 
to the States go elsewhere, the Democratic plan would provide $44 
billion in aid to States to minimize tax increases and service cuts and 
to prevent the job losses that would otherwise occur.
  The second chart compares the stimulative effect of the proposals I 
have been discussing. If we extend Federal unemployment benefits for 
every dollar we spend, the stimulative effect in the economy, the 
amount of economic activity generated, comes to $1.73, one of the most 
effective things we could do. If we support the States through Medicaid 
and education and homeland security funding, for every dollar we invest 
that way we get $1.24 in bang for the buck, also a good stimulative 
effect.
  The centerpiece for our Republican friends' dividend tax reduction, 9 
cents of impact for every dollar of revenue

[[Page 10964]]

lost. If what we are talking about is stimulating the economy, then 
this chart says it all.
  Finally, the Democratic plan would provide companies with a tax 
credit worth up to $2,400 for hiring somebody who has been out of work 
at least 6 months and includes $29 billion in tax incentives to 
generate investment and jobs now, such as allowing small businesses to 
expense up to $75,000 of the cost of new investments through 2004, 
triple the current limit. In other words, businesses would be 
encouraged to invest sooner rather than later, again fueling economic 
growth.
  Mr. Speaker, the bottom line is that the Democratic plan would create 
almost twice as many jobs as the Republican plan in the first year. Let 
me be specific. The Democratic plan would create 1.1 million jobs 
compared to the Republicans' 600,000 jobs. And the Democratic plan 
would achieve this at a fraction of the cost.
  Instead of saddling our children and grandchildren with a mounting 
national debt, I urge my colleagues to support the Democratic plan that 
will help revive the economy, promotes economic growth, offers tax 
relief to those who need it most, uses honest accounting, and is paid 
for.
  A number of Members are going to be speaking over this hour about the 
choices that we have tomorrow and about what we can do now, what we can 
do effectively to turn this economy around and to do that in a fiscally 
responsible way, and I yield to the gentleman from Virginia (Mr. 
Moran), a valued colleague from Virginia, a member of the Committee on 
the Budget who over the years has stood for fiscal integrity, fiscal 
responsibility.
  Mr. MORAN. Mr. Speaker, I thank the gentleman from North Carolina 
(Mr. Price), my very good friend and colleague, for yielding. I thank 
him for laying out the Democratic and the Republican plans tonight.
  These are going to be the subjects of the debate tomorrow, and it 
appears that we are going to have another party-line vote. My friend 
recalls another party-line vote that we had in 1993 when President 
Clinton proposed an economic growth strategy to get out of another Bush 
recession. We were told by our colleagues on the Republican side of the 
aisle that this was going to cause more unemployment, further 
recession, that we would never recover, that it was unfair.
  The fact is President Clinton did raise taxes. We are not talking 
about raising any taxes. President Clinton went ahead, raised taxes on 
the wealthiest people in this country. He balanced the budget. He made 
sure everything was paid for, that we did not have to borrow money from 
Social Security and Medicare to pay for tax cuts as of course this tax 
cut plan does. It borrows every penny out of Social Security and 
Medicare. But now that we look back on the effects of that economic 
growth strategy that was very consistent with the Democratic plan that 
the gentleman from North Carolina (Mr. Price) has laid out and that the 
Democrats are going to present tomorrow, it worked. It worked.
  During the 8 years of the Clinton administration, this country 
experienced the highest prosperity that any country in the history of 
civilization has ever experienced. Certainly this was the best extended 
economic boom that America could ever have realized. And, in fact, all 
those people, those people at the highest tax bracket, that was 39.6 
percent at that time, they took home more after-tax income than has 
ever been achieved in any economy in the history of this United States 
of America. The wealthiest made more wealth, more wealth than they have 
ever experienced. So it was not a confiscatory rate. What we did was to 
plow money back into investing in people and education and training, 
balancing the budget so the financial markets had confidence that there 
were not going to be high interest rates in the future, and it worked. 
It worked. And of course those who own the means of production, they 
benefitted the most.
  So now what are we going to do? As the gentleman from North Carolina 
(Mr. Price) has shared with us, we are doing just the opposite of the 
Clinton plan. We are consistent with what President Bush has already 
done, although so far the tax cuts that he has implemented have cost 
this economy 2.7 million jobs, but now we have a tax cut that is going 
to give the same amount of money to \1/10\ of 1 percent of the American 
people. The \1/10\ of the 1 percent of the very wealthiest Americans 
are going to get the same amount of money that the 90 percent of 
Americans who are earning less than $95,000 a year, which is pretty 
good but those are in the middle class. From $95,000 down, that is 90 
percent of the American people, they are going to get as much benefit 
as the top \1/10\ of 1 percent of the very wealthiest. Can that 
possibly be fair? It is not fair, and it is going to come back to haunt 
us. And this money that has to be borrowed from Social Security and 
Medicare that is going to come due, we are not going to have to pay it. 
Our kids are going to have to pay it. We have estimates now that the 
public debt of a child that is born today, by the time they are ready 
to enter high school, we are going to have $12 trillion of debt.

                              {time}  1930

  By the time they become a working adult, it is going to be much more 
than that; and they are going to be spending half of their income 
paying off debt that their parents' generation caused because of these 
tax cuts that are unpaid for. It is almost criminal.
  Also, in addition to being so unfair to subsequent generations of 
Americans, it is so duplicitous. Now, I know it seems like nickel and 
diming; but, gosh sakes, in order to get this plan that is going to be 
offered by the majority through, we get a whole lot of magic tricks in 
this.
  For example, you raise the child tax credit to $1,000, but for 3 
years; and then you bring it back down again so that it does not look 
as though it is as costly as it really is. You do the same thing with 
the marriage penalty.
  The American people ought to ask the proponents of this tax plan, do 
we get to keep these tax cuts? Are you going to give it on the one hand 
and take it away from the other? The fact is it is the latter. It is 
just like the last tax cut, to purport we could pay for it, they 
sunsetted it all in 2011. Now they come back, of course, and want to 
make all the tax cuts permanent.
  Mr. PRICE of North Carolina. Why on Earth would our Republican 
friends want to do such a thing? It clearly is something that they do 
not intend to stick by. They do not really intend for these tax cuts to 
expire. Why would they write such a bill?
  Mr. MORAN of Virginia. I suspect, I know it is a very good question, 
that they figure the American people are never going to catch on to 
what they are doing, to what the real cost of these tax cuts are, to 
the fact that the real cost of these tax cuts is $4.6 trillion over the 
next decade, if you include the interest on the debt that has to be 
borrowed and if you do what we know is going to have to be done, which 
is to make all these tax cuts permanent.
  No Congress is going to restore taxes, nor is it going to increase 
taxes. We know everybody wants to cut taxes, so they are not going to 
be reinstated. It is just like the ones passed in 2001. We know that, 
the Republicans know that, but the Republicans are assuming the 
American people are not going to catch on, and they can fit this in a 
budget resolution and purport to suggest that this is some kind of 
balanced budget. It is not. We have got deficits as far as the eye can 
see. Who is going to pay for them? Not us. We are going to be retired. 
It is our kids that are going to have to pay for them. Thousands of 
dollars a year they are going to be paying because of what we are about 
to do tomorrow.
  This is wrong. This country cannot afford it. What this country can 
afford is getting people back on their feet, getting money back to 
States where they can generate $1.73 for every dollar invested, instead 
of 9 cents generated by the President's proposal.
  We need to believe in America. We need to recognize what has worked 
in the past, what worked in the 90s, and what has not worked since 
President Bush took office. We have turned a $5.6

[[Page 10965]]

trillion surplus into trillions of dollars of debt, and it is mounting 
every year.
  I know my colleagues are here, and they want to share their views as 
well; but I appreciate the gentleman yielding.
  Mr. PRICE of North Carolina. Before we yield to our colleague from 
Washington State, let me just commend the gentleman for a powerful 
statement and also for reminding us of a little bit of history, not too 
ancient history, but history that goes back to 1993 and a night on this 
House floor that many of us will never forget, where without a single 
Republican vote we passed a far-reaching plan to move the budget toward 
balance; and in fact from every year from then forward, until this 
President took office, every year for 8 years the deficit came down.
  Mr. MORAN of Virginia. We had the strongest economy.
  Mr. PRICE of North Carolina. The strongest economy and the most 
sustained recovery. We even reached the point where we were running a 
surplus, not just a Social Security surplus, but a surplus in the 
general fund of this government. We retired $400 billion worth of the 
national debt. But our Republican friends might not be convinced by 
that historical lesson. It does not reflect very well on them.
  So let me just ask the gentleman, look back to some previous 
Republican administrations. Is it not true that in 1982, when the 
Nation went into a recession and President Reagan had pushed through 
some tax cuts and the deficits were mounting, that with Senator Robert 
Dole's leadership some of those tax cuts were rescinded and some 
spending was cut? The Congress and the President found themselves in a 
hole, and they quit digging. They at least quit digging. They did not 
make the problem worse. To some extent they halted the deterioration of 
our fiscal situation.
  Then think about the first President Bush. I am sure you remember 
that battle. President Bush said ``read my lips'' and had gotten 
himself locked into a situation. But when the economy declined, when 
the fiscal situation deteriorated, he had the courage and the 
statesmanship to work with Democrats across the aisle and to put a 5-
year budget plan in place. So the first President Bush, when he found 
himself in a hole, he quit digging.
  So if our Republican friends do not find the 1993 episode 
instructive, then maybe they will find those earlier episodes 
instructive. Then the question comes back, why is it that this White 
House seems to feel none of that restraint? Why is it that this 
Republican leadership seems to feel none of that concern, but is 
perfectly willing, finding themselves in a deep and dangerous fiscal 
hole, to propose that we should just keep digging?
  Mr. MORAN of Virginia. That is the operable phrase, my friend. If you 
are in a hole, and we are in a very deep deficit hole, you ought to 
stop digging. In 2001 we were told that the tax cuts of $1.3 trillion 
were going to revive the economy. They did nothing like that. What they 
did was to cause more unemployment and the financial markets to lose 
confidence in the future, and it has hurt States and localities 
terribly.
  I suspect, though, that the answer to the gentleman's question, why 
has this President Bush acted so differently than his father, is that 
he recognizes that although his father did the right thing in 1990, set 
this country on the course of a balanced budget, and really it was 
President Clinton acting consistently with that 1990 legislation in 
1993, but the first President Bush deserves a lot of credit. But I 
suspect the people in the White House now feel that may have been why 
he lost the presidency.
  But that ought not be the criteria. The criteria ought to be whether 
your years in service to this country have produced a better America, 
not only for your family and my family and the whole American family, 
but, most importantly, for future generations of America. That is what 
we are looking for. We are looking for that long-sighted economic 
policy that has worked in the past.
  I thank the gentleman for his thoughtful, historical perspective; and 
I yield back to the gentleman so he may call on other colleagues.
  Mr. PRICE of North Carolina. I thank the gentleman.
  I turn to our colleague, the gentleman from the State of Washington 
(Mr. McDermott), a member of the Committee on Ways and Means and a long 
time member of the Committee on the Budget.
  Mr. McDERMOTT. Mr. Speaker, I was coming downstairs from the 
Committee on Rules where I was up there making a presentation as they 
prepare for our consideration of this bill tomorrow. It was never so 
clear to me as it was sitting there that we are in a one-party 
government here, where the President and the House and the Senate are 
all from one party, and they are going to have a discussion down here 
tomorrow on their proposal. But what I really am fearful of is that the 
proposal the gentleman is putting out here tonight will not be allowed 
into the discussion tomorrow, except in a very abbreviated form. I 
think that is unfortunate, because I think the American people ought to 
have a chance to choose between alternatives. That is what this 
government is about.
  Will Rogers one time said people would rather have fair taxes than 
lower taxes. The fact is we do not have fair taxes. The proposal that 
is coming down here tomorrow is one that 80 percent of the benefit goes 
to people above $90,000 a year in income. Now, I do not think they need 
a tax break. The effect of this bill tomorrow would be to give a 
$105,000 tax break to people making $1 million, while people who are 
making $40,000 will get $325.
  Now, that is not a fair tax structure, and it basically says the only 
people who know what to do with their money are people who are rich. If 
you give it to the people down there making $40,000, they will not know 
what to do with it. They will squander it away on something, I do not 
know what; but if we give it to the rich people, suddenly things will 
be stimulated.
  The problem with that theory is that the Commerce Department, Mr. 
Bush's Commerce Department, has come out and said that industry in this 
country is operating at 75 percent of capacity. There is plenty of 
capacity right now. There is no need for further investment in 
capacity. What you need is people with money in their hands to buy 
things.
  Now, the bill that I proposed, the amendment I proposed upstairs, is 
a proposal that would give a tax holiday on the first $20,000 of your 
payroll taxes. Everybody pays payroll taxes. Not everybody pays income 
tax, because if you are down low enough, you do not. But if you are 
down low or high up, you pay payroll taxes for Social Security and for 
Medicare.
  If you gave a tax holiday on $20,000 of income, everybody in this 
country, every working person in this country, would get somewhere 
between $1,400 or $1,500 in rebates. That means that 94 percent of the 
money would go to people below $75,000 in income, and it goes all the 
way to the bottom. Everybody gets it. In my view, that is a fair tax 
cut, if you are going to have one.
  I really think the idea of a tax cut in the first place is a bad one. 
Sitting on the Committee on Ways and Means, I have watched these tax 
cuts go whistling through there one after another, and we go deeper in 
debt.
  I was looking at what is going on in the States. California is $34 
billion in the hole; New York is $12 billion; Texas is $10 billion; 
Washington State, my State, is $2.4 billion. The National Conference of 
State Legislatures reports that 41 States have accumulated almost $84 
billion worth of deficit in this year, and what we are doing at the 
national level is looking out on those States and all the mess that is 
out there and saying, tough luck, you are on your own.
  Now, that is a major philosophical debate that goes on in this House, 
what responsibility does the Federal Government have and what 
responsibility does the State have, and this administration has been 
pushing off on to the States all the responsibility for education, 
health care, the environment, whatever; and the States are being 
destroyed.
  The Missouri Governor, the new Governor, is going around turning off 
every

[[Page 10966]]

third light bulb. He put out a memo for the State of Missouri. 
Connecticut is laying off prosecutors in the court system. In Kentucky 
they are laying off prison guards. Nebraska just put 25,000 women and 
children off the Medicaid program. In Michigan they are considering a 
proposal to put advertising on the sides of police cars so they can 
make money, making them rolling billboards. That is where these States 
are. Ohio has taken 50,000 off of health coverage and Colorado is 
cutting out the senior citizen benefits on property taxes for 120,000 
seniors in Colorado.
  Now, I could go on with that list, and it does not make any 
difference what State you are talking about. And we at this level are 
saying what we are going to do with the money we have is we are going 
to give it to those people at the top. They are the only ones who know 
what to do. They are going to save us. And we are not giving money out 
to the States and the counties, with all the problems at the State 
level or dealing with the problems in our own system, or preparing for 
all the people who are going to come on to Medicare and Social Security 
in 2008 or 2009 or 2010. We are not preparing for that at all.

                              {time}  1945

  Today, we are giving it all away. And then we are saying, gee, Social 
Security does not work anymore, Medicare does not work anymore. We have 
to put that responsibility on people.
  Next Friday, a week from today, we will be dismantling the Medicare 
system in the same way. That is the system that this party has put in 
order and they are going to keep doing it one week at a time, and we 
are seeing it, and we will not have any money to respond to that 
because we have given it all away.
  Now, we have a choice tomorrow. We could say no to the President's 
way and the Committee on Ways and Means chairman's way. The chairman 
said upstairs that the Congress is kind of like a poker game where 
everybody sits down at the table and at the end of the night the same 
amount of money is there, but different people have it. And what I am 
saying, my answer to that is yes, that is true, and I think that 
ordinary working people ought to get it and the Democratic proposal is 
an attempt to do that. But the leadership of this House is going to 
bring in a bill tomorrow that will make it increasingly unfair in this 
country.
  I congratulate my colleagues from North Carolina and Virginia and 
Connecticut for coming down here and letting the people know that the 
Democrats do have a proposal, because they will control the rule 
tomorrow in such a way it will look like we did not even have any 
ideas. We do have ideas, but they are not consistent with giving it all 
to the people on the top.
  Mr. Speaker, the American people are sitting there, after dinner, at 
the dinner table and you think to yourself, does somebody who makes $1 
million really need a $105,000 tax break? I mean just ask yourself. And 
then you think about the people in your neighborhood who are scraping 
to pay their drug benefits and do the things that they have to do for 
themselves. My mother just bought a hearing aid. She is 93. Hearing 
aids cost $800 if you can get a cheap one. They are not covered by 
Medicare. So if you do not have kids who can help you, you do not get a 
hearing aid.
  I mean, do we really need to give all of this money to the people on 
the top? Where is the fairness in that?
  I think the gentleman from North Carolina (Mr. Price) should be 
congratulated for his effort tonight to give the people an 
understanding of what is going on. It is unfair.
  Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman and I 
particularly appreciate his focus on the plight of the States. My 
colleagues may recall that the governors were in town a few weeks ago, 
Democratic and Republican governors who went to the White House, I 
understand, and talked about the ways that in a temporary way there 
could be some help for the States and, as we said earlier, help for the 
States is one of the best ways to stimulate the economy. It gives good 
bang for the buck. They suggested such obvious ideas as a little better 
cost-sharing on Medicare temporarily to tide them over. What kind of 
reception did they get down there, Republican and Democratic governors 
alike?
  Mr. McDERMOTT. They basically were stiffed.
  Mr. PRICE of North Carolina. Stiff-armed, I understand.
  Mr. McDERMOTT. Mr. Speaker, I do not think the American people 
understand, and the gentleman is down in Chapel Hill and he knows the 
pressure that is on the hospitals; it is the same in Chicago or 
Richmond or Seattle or New York or anywhere. What we are saying to 
those counties, to those cities, to those States, we are not going to 
help you. You are on your own. The President made no provision.
  Mr. PRICE of North Carolina. What about our Republican colleagues in 
the House? They are supposedly in closer touch with these local 
communities. Does their bill contain one dime of help for the States?
  Mr. McDERMOTT. No, not a single dime.
  Mr. PRICE of North Carolina. And the Democratic plan, $44 billion, it 
is temporary, it stimulates the economy, it helps bail the States out. 
It will help avoid counterproductive things at the State level, cutting 
back services, raising taxes. What good is it going to do to cut taxes 
here if they have to be reimposed at the State level?
  Mr. McDERMOTT. Mr. Speaker, I think the long-term effects of not 
dealing with the social problems in this society are more costly in the 
end than if you put the money up front. If you do not feed people and 
take care of them and give them preventive health care, you pay much 
more at the far end when they are seriously ill and then you spend 
thousands and thousands of dollars that would not have been necessary 
if you had dealt with it in the early stages. It is so cost 
ineffective.
  We talk about history. I do not know where the people went who were 
here on the other side when I came here. They used to talk about 
deficits being terrible and bad, and they have all disappeared. I mean 
I sat on the Committee on Ways and Means and the Treasury Secretary, 
Mr. Snow, came before us and said, deficits are not bad. I could not 
believe what is going on. We are going to spend so much money financing 
that debt. And the gentleman and I, we will not do it. It will be our 
kids. That is not fair.
  Mr. PRICE of North Carolina. Mr. Speaker, there is nobody within our 
hearing tonight who could not think of better public and private uses 
for that than throwing it down the rat hole of $300 billion, $400 
billion of interest on the debt each year. I thank the gentleman for 
his contribution.
  Mr. Speaker, I am pleased now to recognize our colleague from 
Virginia, another colleague from Virginia (Mr. Scott), a member of the 
Committee on the Budget and a much respected Member of this body who 
has made himself an expert on budget affairs, and we appreciate him 
having his usual array of charts tonight to illustrate the situation we 
are facing.
  Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman from North 
Carolina for his distinguished leadership on this budget issue. It is a 
very difficult issue and the gentleman has provided excellent 
leadership, and we thank him for that service.
  The gentleman is right, I like to use charts, because we have heard a 
lot of descriptions, we have heard a lot of adjectives and projections. 
Let us just look at the numbers. This chart shows the numbers over the 
past few years of what the deficit has been, starting with Presidents 
Johnson, Nixon, Ford, Carter, great deficits under Presidents Reagan 
and the first Bush. And we have heard comments about the 1993 vote when 
President Clinton came in, without a Republican vote in the entire 
House or Senate, very close votes, 218 to 216 in the House, 50-50 with 
Vice president Gore breaking the tie in the Senate. And, as a direct 
result of that, along with economic growth, every year was better than 
the one before until we went into a surplus. Social Security and the 
lockbox, Medicare in a lockbox and a $100 billion surplus after that.
  The Republicans will say that after 2 years of the Clinton 
administration,

[[Page 10967]]

they took over. That is true, and they offered the same kind of tax 
cuts that President Bush has signed, but President Clinton vetoed that 
bill. They threatened to close down the government. He vetoed it again. 
They closed down the government. He vetoed the bill again, and 
continued vetoing their irresponsible tax cuts year after year as the 
budget situation got better and better each year. Under his leadership, 
he had enough Democrats in the House and the Senate to sustain those 
vetoes and control the budget situation year after year, each year 
being better than the last.
  When President Bush came in, he signed those irresponsible tax cuts 
and we see what happens. Actually, this chart, as bad as it looks, 
needs to be updated. We have not gotten the more recent numbers; it may 
in fact be off the chart.
  People ask, well, if things are this bad, where is the Democratic 
plan? Well, the Democratic plan is in green. That is our plan; this is 
their plan.
  Now, how did we get in this mess? We got in this mess with tax cuts 
and we have asked, well, who got the tax cuts? And you have heard the 
adjectives. Let us look at the graph. The bottom 20 percent, the next 
20 percent, the middle 20 percent, the fourth 20 percent, and the top 
20 percent, blue is the 2001 tax cut, green is the proposed 2003 tax 
cut. The same pattern.
  Now, there is a line that is hard to see right at about the 50 
percent mark. The top 1 percent get 50 percent of the tax cut that we 
enacted in 2001. So we have a budget mess. We got there with tax cuts 
to the wealthy, and we were told that the reason we needed to do that, 
the reason we needed to mess up the budget to give tax cuts to the 
wealthy was to create jobs.
  Let us look at the jobs per administration, the second Truman 
administration, the Eisenhower administration, first and second, 
Kennedy, Johnson, Johnson, all of the administrations over the years, 
the job creation record, George W. Bush, President Bush, the worst job 
creation record since the Truman administration, a loss of over 2.5 
million jobs.
  Now, we are told that, well, what do you expect after September 11? 
Let us point out that this chart includes the Korean War. It includes 
the Vietnam War. It includes the whole Cold War, the first Persian Gulf 
War, hostages taken in Iran, it includes all of that, and still the 
worst in over 50 years.
  So how bad does it have to get before we acknowledge that it did not 
work?
  What did we get? We got debt. If we left the budget alone, we would 
have paid off the national debt by 2008. The projection in May of 2001, 
right after this administration came in, virtually no debt held by the 
public. Instead, in 2008 we are going to have almost $5 trillion in 
debt.
  With debt, we get interest on the national debt. Let us look at the 
interest. The interest on the national debt, because the debt was going 
to zero, was going to zero, interest on the national debt. Instead, 
this red line is the interest on the national debt that we have to pay. 
And the difference as we go, the billions of dollars in additional debt 
by 2010, $1.6 trillion wasted in additional interest on the national 
debt that we would not have had to pay.
  Now, let us put these numbers in perspective. The green is the 
interest on the national debt that we were going to pay going down to 
zero. Red is the interest on the national debt that we are going to 
pay. Blue is the defense budget. To show how much interest on the 
national debt we are going to end up paying and put it in perspective, 
instead of zero we are going to be spending almost as much interest on 
the national debt as we are spending on national defense.
  Now, let us make it personal. Take the interest on the national debt, 
divided by the population, multiplied by 4, what is a family of four's 
portion of the national debt? Right now it is about $4,500 every year, 
interest on the national debt going to zero. By 2013, because we have 
messed up the budget, interest on the national debt, a family of four's 
portion of interest on the national debt, $8,500 and growing. That 
means the first $8,500, you get nothing, except pay for what has 
already been spent.
  Now, the next chart shows how challenging a situation we have gotten 
ourselves into because this is the Social Security chart. Right now, we 
are not even balancing the budget, spending the Social Security 
surplus. We are not balancing the budget. But in 2017, because the baby 
boomers are retiring, we are having a deficit, almost $1 trillion, 
running up to about $1 trillion over the next 30 years. If we cannot 
balance the budget with a Social Security surplus and we are spending 
the surplus, what are we going to be doing out here when we have a $300 
billion deficit, divided by 300 million people in America, $1,000 a 
piece, will be $300 billion, that is $1,000 for every man, woman, and 
child, for Social Security deficit, you end up with the interest on the 
national debt deficit. How bad does it have to get?
  There is one more thing I want to mention. That is, I told my 
colleagues about the chart where 1 percent gets half of the tax cut. 
Instead of the tax cut for the upper 1 percent, if we had allocated 
that into a trust fund for Social Security, we could pay Social 
Security for the next 75 years without any diminution in benefits. 
Seventy-five years for the tax cut that the top 1 percent got.
  Mr. Speaker, we cannot afford another tax cut. We need to go back to 
the green, the Democratic plan. What we are doing, what we have done to 
the budget is obscene. What we are doing to the budget is just 
unconscionable.
  Mr. PRICE of North Carolina. Mr. Speaker, if I could just ask the 
gentleman to underscore what he just said. Are you saying that the 
amount that it would take to make Social Security whole for the next 75 
years is less than the amount of this Republican tax cut?
  Mr. SCOTT of Virginia. Mr. Speaker, it is less than what the top 1 
percent got in 2001.
  Mr. LARSON of Connecticut. Mr. Speaker, will the gentleman yield?
  Mr. PRICE of North Carolina. Yes.
  Mr. LARSON of Connecticut. Mr. Speaker, I am very intrigued by the 
gentleman's charts, and it seems to me, based on the number of speakers 
that we have had in this hour that we have been given; my question is, 
Mr. Stockton used to say that what we have to do in order to get rid of 
these social programs that the Democrats have put forward like Social 
Security, Medicare, and Medicaid, is starve the beast.

                              {time}  2000

  Is this not the method that is now being used? We have just heard the 
gentleman from Washington State talk about what is going to happen next 
week with respect to Medicare. We saw a budget atrocity last week. And 
now we are talking about taxes, a tax cut tomorrow that basically 
leaves us, as your charts amplify, with no money to provide for these 
much-needed and highly successful and highly valued programs that have 
helped all of our citizens.
  Mr. SCOTT of Virginia. You cannot get to balance through spending 
cuts. As I indicated, the entire defense budget is about $400 billion. 
We are 500 billion and counting, slightly offset because we are 
spending $150 billion on Medicare and Social Security surplus that is 
coming in. But this is out of budget. The onbudget part of the budget, 
what is coming in and going out outside of Social Security and Medicare 
is $500 billion. The entire defense budget. Everything we spend outside 
of Social Security, Medicare, and defense and pensions, everything is 
about $800 billion. Everything. Foreign aid, FBI, prisons, NASA, 
everything, education, roads, everything. It is about 800. If you cut 
the government in half, you could not balance it as bad as it has 
gotten.
  Mr. LARSON of Connecticut. So this is incredible when you think that 
this seems to be all part of a design, a design that is geared to in 
fact deny people over time the ability to respond to needs that we 
know, as your charts illustrate, with the baby boomers retiring, that 
are funds that are going to be necessitated, less the programs per the 
design of starving the beast, the beast in this case being social 
programs.

[[Page 10968]]


  Mr. SCOTT of Virginia. You cannot create a chart like this by 
accident. Eight consecutive years, each year better than the last; 
under the present administration, each year worse than the last and no 
help in sight. You do not do that by accident.
  Mr. PRICE of North Carolina. I wonder if the gentleman from Virginia 
(Mr. Scott) would put the chart back up giving the distribution of who 
benefits from these tax cuts, because on the talk shows these days you 
sometimes hear it said, well, of course, the tax cuts are mainly going 
to benefit the wealthy because they are the ones that pay the taxes. As 
a matter of fact, is it not true that this tax cut compounds the 
advantage of the wealthy? It does not just mirror their advantage.
  For example, if you look just at millionaires, millionaires in this 
country pay 19 percent of the income taxes, but what percent of this 
tax cut do you think they get? Twenty-seven percent. They get 27 
percent of the tax cut; they pay 19 percent of the taxes. So it just 
does not wash to say, well, they are paying more taxes, so naturally 
they get a better tax cut.
  The fact is this is a grossly unfair tax cut, and it targets those in 
the upper brackets. That is not fair, but it also does not do what 
needs to be done in terms of turning this economy around.
  Mr. SCOTT of Virginia. Mr. Speaker, this chart shows that the top one 
percent get half the tax cut that we enacted in 2001. The people in the 
lower brackets who are more likely to spend the money and stimulate the 
economy, you can hardly see the lines that they get. The top 20 percent 
get the lion's share of the tax cut and virtually nothing on down. All 
of the studies show if you give money to those who are most likely to 
spend it, you will stimulate the economy.
  Mr. PRICE of North Carolina. I thank the gentleman for a very fine 
presentation.
  I yield to the gentleman from Connecticut (Mr. Larson).
  Mr. LARSON of Connecticut. Mr. Speaker, again noting the chart there, 
I just want to point out that certainly it is true that most 
individuals are happy to get any form of a tax cut from their 
government. That is an indisputable truth. People like to receive a tax 
cut. When I go home to my district and talk to people about a tax cut, 
they are generally enthused, even if it is a modest amount. But when 
you explain to them the ramification of this tax cut, the enormity of 
the tax cut, the extended amount of time, and then what will have to be 
sacrificed in order to achieve that goal, it is an entirely different 
story.
  People back in my district in Connecticut have a lot of common sense. 
They understand that you cannot have it all. We cannot possibly 
prosecute the war in Afghanistan, the war against terror, the war 
against Iraq and not sacrifice. And yet seemingly with both our budget 
proposals and now our tax cuts we are asking people to sacrifice. The 
people we are asking to sacrifice are the veterans, the elderly in need 
of prescription drugs, the towns and States as have been enumerated 
here today that desperately need town aid so they will not have to 
raise local taxes or cut programs and close schools, the communities 
that need school construction funds, the amount of money that will not 
be available for special education, that we will continue to underfund 
that program, a Federal commitment. We have enough money to provide a 
tax cut for the wealthiest 1 percent, but not enough to take care of 
those in the shadows of life, those in the dawn of life, and those in 
the twilight of life as Hubert Humphrey would so eloquently talk about.
  So tomorrow we are seeing a philosophical debate on the direction and 
focus of this Nation. And what the Nation stands for in a time of 
sacrifice when men and women are truly sacrificing their lives overseas 
to defend our vital freedoms for what? When they come home and face the 
devastating deficits and the problematic concerns that that will raise 
for each and every one of their children as we project these deficits 
out into the future.
  This is an outrage. We do not have the megaphone here. We cannot even 
get a small voice because of how our Committee on Rules allocates time 
for people to come to the floor. I commend the gentleman from North 
Carolina (Mr. Price), always able to articulate in a very intelligent 
manner the disparity that exists here and providing the intellectual 
underpinnings hopefully so the other voices in America besides the 
right wing and talk radio get the message out here to the American 
public what is absolutely happening to them.
  People understand you cannot have it all. What the Democratic 
proposal demonstrates is that knowing that and knowing that we are 
going to have to sacrifice, should we not make sure that there is money 
there for prescription drugs, for school construction, for Social 
Security, for Medicare, Medicaid. Our hospitals are crying to us 
because of the needs that they have to take care of the population that 
comes to our urban and rural hospitals on a daily basis. I thank the 
gentleman for his strong voice here on the floor.
  Mr. PRICE of North Carolina. Mr. Speaker, the gentleman is absolutely 
right. As to the pressing nature of these needs, many of them carry out 
of the State level at the time that our States are flat on their back 
fiscally, and our Republican friends are offering no help in that 
regard whatsoever.
  The gentleman talks about tax cuts. And we know people would rather 
pay less taxes than more. We are all pleased when we can offer tax 
cuts; but it does matter what kind of tax cuts.
  Mr. LARSON of Connecticut. Ask them if they would like to see a 
veteran get his benefits. Would they forego a tax cut to see veterans 
get their benefits? These are the questions the American public needs 
to ask themselves. Would you forego the tax cut so your parents could 
have prescription drugs? Would you forego a tax cut so you did not have 
to raise local property taxes and actually provide school construction 
or lessen the burden that school districts have to pay because of 
special education? Would you be willing to forego that tax cut if we 
were reinvesting in our infrastructure and providing jobs for people? 
That is what the Democratic proposal is all about.
  Mr. PRICE of North Carolina. Sure and that is what we need to face. 
If you are going to have tax cuts then, for goodness sake, have the 
honesty and the integrity to pay for those tax cuts so it is not coming 
out of the hide of the most vulnerable among us.
  There are some tax cuts in the Democratic proposal, but they are 
aimed at the broad middle class in this country. They were designed to 
stimulate the economy and they are paid for. And in all three of those 
respects they contrast with these upper-bracket tax cuts which our 
Republican friends are trying to peddle as an economic stimulus when I 
do not know any economist who is going to tell you you get much bang 
for the buck from cutting the tax on dividends for goodness sake. The 
estimate I have heard is 9 cents on the dollar. That is not a very good 
return.
  Mr. LARSON of Connecticut. The gentleman is absolutely right. I could 
not agree more with him. To quote our leader as she often says, ``These 
are both fair and fast-acting and fiscally responsible.''
  That is the alternative that is being presented tomorrow. It is up to 
us to get back to our districts and talk to people. I have held town 
hearings on these issues which I think are vitally important so that 
average citizens get to speak up.
  They get it when they see the choice. Tomorrow is going to be an 
orchestrated event whereby a proposal will be jammed down the 
minority's throat with maybe an hour of debate on an issue that is this 
important to the American citizens.
  We owe it, Democrat and Republican alike, to go back to our districts 
and say during this time of national crisis as we are fighting 
terrorism, ask them plainly and clearly, would you forego a tax cut so 
that you get prescription drugs for the people that need them? So that 
the veterans can get their benefits? So that school buildings could be 
paid for and technologically upgraded? So that the special education 
students would get their fair share of money, lessening the burdens on 
our local communities and States?

[[Page 10969]]

  It is great to pat yourself on the back here and say you gave a tax 
cut, but our tax cuts here become their tax increases back home with a 
suffering burden that none of our States and municipalities can afford 
at this time.
  Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman.
  Before we run out of time, I want to turn to one of our most 
passionate and effective advocates in the House, the gentlewoman from 
Ohio (Ms. Kaptur).
  Ms. KAPTUR. Mr. Speaker, I would like to thank the gentleman from 
North Carolina (Mr. Price) for organizing this stellar Special Order 
this evening on the important question of economic stimulus and 
recovery for our people and join with all of my able colleagues, the 
gentleman from Virginia (Mr. Scott), the gentleman from Connecticut 
(Mr. Larson), and others this evening.
  I just wanted to mention jobs, J-O-B-S; and the Republican tax cut 
bill is a job killer. There is plenty of evidence that this plan is 
merely a repeat of what happened in 2001 in this Congress, in the first 
Bush tax bill that came before us where now we have lost 3 million more 
jobs across this country.
  It is also a debt-accumulator bill. This tax bill is not going to 
balance the budget. It is going to increase the deficit. I always 
thought Republicans were budget balancers. That is what Republicans 
used to be. They are not that anymore. And I just wanted to point out 
back in 1981 when Congressman Dick Cheney was a Member of this House, I 
came here 2 years later in the midst of the worst recession America had 
faced since the Great Depression. July 29, 1981, when Mr. Cheney 
chaired the Republican Policy Committee here, a bill was passed that 
they called the 1981 tax cut bill. And in the following 2 years, 
millions of Americans were thrown on to unemployment lines; and I 
became part of a class to try to restore economic integrity to this 
country. It took us almost 20 years until Bill Clinton became President 
of the United States. And in 1993, 1996, we began to restore those 
surpluses that the gentleman from Virginia (Mr. Scott) referenced.
  In 2001 under the first Bush plan, the gentleman from California (Mr. 
Thomas) said here, ``By moving quickly our hope is to have both 
monetary and fiscal policy pull this economy out of its nose dive.''
  And again, now, we have another job-killer bill. We had a job-killer 
bill in 1981. We had a job-killer bill in 2001, and now we will have 
another job-killer bill brought up on this floor tomorrow. It seems to 
me that one thing Democrats stand for is full employment and good jobs. 
We should reject this bill tomorrow. It is a repeat of the same old 
hash they gave us back in 1981 and they gave us in 2001. We should not 
be snookered for the third time.
  Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentlewoman, 
and I want to thank all of my colleagues who were part of this Special 
Order tonight.
  Often we have very heated debates in this House and we have a good 
bit of rhetoric filling the air; sometimes there may even be an 
exaggeration or two. But I must say with respect to this bill tomorrow 
and with respect to our fiscal situation, we are not exaggerating. We 
are not exaggerating the danger we face. We are not exaggerating the 
unprecedented character of the risks that are being taken with our 
fiscal future by this administration and by the leadership of this 
House.

                              {time}  2015

  We are not exaggerating the differences between the parties.
  There is a simple three-point test that any proposal ought to be able 
to pass: Is it effective? Does it stimulate the economy? Is it broad 
based and fair? Is it fiscally responsible? The two plans before us 
tomorrow could not be more opposed or more different in the way those 
basic questions are answered.
  So I thank all of my colleagues for helping us line this out tonight 
and address our colleagues about this critical debate. It is not an 
exaggeration to say that our fiscal future is on the line, and I 
appreciate all those who have helped point that out so forcefully this 
evening.
  Mr. HINOJOSA. Mr. Speaker, I rise today to discuss the tax proposal 
the House Ways and Means Committee approved on a party-line vote of 24-
15 last Tuesday. I believe that what the committee reported to the 
House floor is flawed, misguided and will harm our American economy now 
and for generations to come.
  I agree with Ways and Means Committee Chairman Thomas's assertion 
during the committee's consideration of the tax bill that, ``Congress 
must take bold steps to spur economic expansion, create more jobs for 
workers, better opportunities for families and bigger paychecks for all 
Americans.'' I agree with that. But, I strongly disagree with the ways 
and means by which he intends to accomplish these goals.
  Mr. Thomas's bill focuses tax relief on the wealthiest 1 percent of 
the population by providing tax cuts mainly on stock dividends and 
capital gains. Many economists have rated this proposal as very 
ineffective in stimulating the economy. It would be more appropriate to 
provide an immediate increase in the child tax credit, marriage penalty 
relief and the expansion of the 10-percent tax bracket.
  With deficits soaring, the last thing our government should be doing 
is proposing major tax cuts that do not spur economic growth. Our 
government would be borrowing to finance the revenue losses associated 
with the tax cuts for years to come. Furthermore, Chairman Thomas's 
proposal fails to include support for state and local governments. It 
crowds out Federal investment in education, training, infrastructure, 
and research and development to pay for their tax cuts for the wealthy.
  Next year, the GOP tax plan gives tax cuts totaling approximately $44 
billion to those making over $374,000 a year, while their budget 
provides $9.7 billion less than the amount promised in the No Child 
Left Behind Act for educating our children.
  The Thomas plan also allows the extended unemployment benefits 
program to expire May 31, 2003, leading to millions of families being 
denied needed unemployment insurance.
  Not only would extending benefits help the families of nearly 5 
million out-of-work Americans pay their bills, it would also 
efficiently jumpstart the economy by putting money into the pockets of 
consumers who will spend it.
  I urge my colleagues to defeat this plan when it comes to the floor 
of the House.
  Mr. PRICE of North Carolina. Mr. Speaker, I yield back the balance of 
my time.

                          ____________________