[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[Senate]
[Pages 23736-23737]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        REAGAN'S ECONOMIC POLICY

  Mr. ENSIGN. Mr. President, an interesting economic trend is sweeping 
through countries around the globe. It is one that started right here 
in the United States, and it would be wise for us to consider some of 
the amazing results that are being documented internationally.
  More than 25 years ago, Ronald Reagan took the helm of an economy 
that was tanking quickly and bringing American families down with it. 
The economy was shrinking; inflation was in double digits; more than 7 
million Americans were unemployed; and the prime interest rate was 
through the roof.
  Ronald Reagan fought for an aggressive plan to rein in non-defense 
government spending, provide tax relief, and eliminate unnecessary 
government regulation. There were many critics who argued that Reagan's 
plan would create greater inflation. They cried that tax relief would 
be paid for out of entitlements and leave the elderly and needy worse 
off. However, John F. Kennedy's assertion that a rising tide lifts all 
boats was true.
  As Reagan prepared to leave the presidency, spending was down, as 
were tax rates and inflation. Employment had climbed to record 
heights--there more jobs and better, higher paying jobs. Family income 
had been on the rise for 4 straight years. America's poor were able to 
climb out of poverty at the fastest rate in 10 years. It marked the 
longest economic peacetime expansion in history.
  In his farewell address to the nation in 1989, Reagan stated: Common 
sense told us that when you put a big tax on something, the people will 
produce less of it. So, we cut the people's tax rates, and the people 
produced more than ever before. The economy bloomed like a plant that 
had been cut back and could now grow quicker and stronger.
  Among the loudest critics of Reagan's philosophy of lower taxes and 
less government regulation were European countries that taxed high to 
offer more social services to their citizens.
  The tide has changed all right. Countries around the world, including 
those in Europe, are racing to cut their taxes. France, Spain, Italy, 
Sweden, Russia, Germany, Poland, Ireland, Austria, Slovakia, Hungary, 
Malaysia, New Zealand, Singapore, Taiwan, Vietnam, and Hong Kong.
  They are cutting business taxes or capital gains taxes or turning to 
a flat tax in the name of economic growth. A study of 86 countries last 
year by KPMG International showed that tax cuts attracted business 
investment with minimal loss of old revenue. And that loss was offset 
by new revenue from increased hiring and spending.
  Does that sound familiar? It is the economic plan that in the 1980s 
helped raise our Nation out of one of our worst

[[Page 23737]]

economic situations and reach new, undiscovered heights. But instead of 
maintaining a tried and true economic path, the party in power is 
proposing to do just the opposite and raise taxes. The rest of the 
world is competing to lower their tax rates the fastest in order to 
attract businesses, jobs, investment, and wealth. But here, in the 
United States, Democrats want to spend more than $1 billion of the 
Social Security surplus, increase the national debt by $2 trillion, and 
raise taxes by an estimated $900 billion--the largest tax hike ever. 
And their plans contain no proposals to cut or eliminate wasteful 
spending.
  In a Nation where we have always thrived when given the opportunity 
to grow, the Democrats' plan just doesn't make sense. We need to return 
to the principles of Ronald Reagan--we need to trust the American 
people with their hard-earned money. Let them keep more of it so that 
they can provide for their families, save and invest for their futures, 
and maybe even take a chance on a business they have been dreaming 
about.
  We also need to give businesses the tools to compete in this very 
global economy. When countries around the world are lowering their tax 
rates to attract businesses, it puts us in a difficult position. 
Companies flock to the best environment, so higher tax rates clearly 
put American businesses that want to grow here at a disadvantage. It 
also puts our workers at a disadvantage when competing against workers 
all over the world.
  Taxing, spending and stifling opportunity have never been the answers 
to our economic woes. Presently, our economy is healthy and strong 
because of tax relief that the Republican Congress provided.
  But that is the past. The question now becomes, what are we going to 
do today? The corporate income tax rate in America is the second 
highest in the industrialized world. Instead of looking at ways to 
raise taxes, I believe this Congress should be looking at ways to make 
us more competitive by lowering taxes. That is the big challenge that 
is before us today: to keep the economy strong, to provide better-
paying jobs to America. Do we raise taxes, or do we keep taxes low? Do 
we try to lower those taxes that are too high?
  I believe the answer is simple. It has been proven by history. It has 
been proven by John F. Kennedy and has been proven by Ronald Reagan and 
has been proven by George W. Bush. We need to take those lessons of 
history, learn from them, and expand our economic opportunities, the 
opportunities for jobs in America.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Missouri is 
recognized.

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