May 3, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 941

to in subsection (b) the functions of the Administrator relating to administering activities conducted by the Small Business Administration in the region of the United States

located generally along the border between

the United States and Mexico.

RECOGNITION OF NATIONAL WEEK

OF THE CHILD

f

HON. CHARLES E. SCHUMER OF NEW YORK

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. SCHUMER. Mr. Speaker, one of the

pleasures of serving in this body is the opportunity we occasionally get to recognize truly

outstanding citizens of this country. Today I

am especially pleased to recognize a group of

citizens that are essential to the vitality of this

country but are often overlooked, our children.

I am happy to announce that the week of April

24, 1995, has been designated National Week

of the Child.

As a father of two daughters, I know first

hand the joys of raising children. My legislative

successes pale in comparison to the rigors

and joy of helping my children learn to take

their first steps and learn to read. Sadly, I

must pause to reflect on the tragedy in Oklahoma City as children lost their lives in an act

of senseless violence. I am reminded that our

children need to be protected as well as nurtured in this uncertain world.

This week we recognize that to do right by

our children we must make sure that opportunities are available to all children to receive a

good education, pursue any career, and to

lend this Nation to greatness. Every child in

America deserves to realize his or her full potential. They must be able to live and study

without worrying about the basic necessities

like food and shelter that many of us take for

granted.

By declaring this week as the ‘‘Week of the

Child,’’ we are making it clear that we understand the need to dedicate ourselves to developing this country’s most precious resource—

our children.

TRIBUTE TO JUSTIN C. GORDON

fHON. PAUL E. GILLMOR OF OHIO

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. GILLMOR. Mr. Speaker, I would like to

take this opportunity to recognize an exceptional young man from my district who has recently accepted his appointment as a member

of the Class of 1999 at the U.S. Military Academy.

Justin C. Gordon will soon graduate Keystone High School after 4 years of outstanding

academic achievement as well as extracurricular involvement. While in high school

Justin has distinguished himself as a leader

among his peers. He is an outstanding student

and patriot.

Mr. Speaker, one of the most important responsibilities of Members of Congress is to

identify outstanding young men and women

and to nominate them for admission to the

U.S. service academies. While at the Academy, they will be the beneficiaries of one of

the finest educations available, so that in the

future, they might be entrusted with the very

security of our Nation.

I am confident that Justin Gordon has both

the ability and the desire to meet this challenge. I ask my colleagues to join me in congratulating him for his accomplishments to

date and to wish him the best of luck as he

begins his career in service to our country.

DEFICIT REDUCTION

fHON. LEE H. HAMILTON OF INDIANA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. HAMILTON. Mr. Speaker, I would like to

insert my Washington Report for Wednesday,

April 12, 1995 into the CONGRESSIONAL

RECORD.

A PRIORITY ON DEFICIT REDUCTION

The House recently considered two bills to

reduce taxes, a leadership bill and a minority

party bill. I opposed both. My view is that

before Congress cuts taxes it should reduce

the deficit. The United States is currently

$4.8 trillion dollars in debt. It makes no

sense to borrow even more money to pay for

a tax cut. We must reduce the deficit. I favor

tax cuts, and would like to vote for them,

but I believe our top priority should be cutting spending and balancing the budget.

THE TAX BILLS

Without doubt, the tax cut bills are attractive. Over five years the minority party bill

would cut $32 billion in taxes with, among

other things, tax deductions for higher education expenses and an expansion of Individual Retirement Accounts (IRAs). It would attempt to offset these tax cuts with a promise

to save $25 billion in discretionary spending

over the next five years, with another $7 billion in savings from other measures, including eliminating the tax break for wealthy

Americans who renounce their citizenship.

The leadership bill would instead cut taxes

by $189 billion over five years, and another

$452 billion in the following five years. Tax

reductions include a cut in capital gains

taxes, expanded IRAs, elimination of the

minimum tax on corporations and a tax refund of up to $500 per child for families making up to $250,000. This bill also makes a

promise to cut discretionary spending—by

$100 billion over five years. Additional cuts

assume $62 billion in savings from welfare

block grants, $10 billion from Medicare, and

other cuts for a total of $187 billion. This bill

passed the House.

NO SPECIFIC CUTS

The tax cuts in both of these bills are specific, but most of the spending cuts are unspecified and little more than promises to

avoid increasing spending in the future.

These bills cut taxes now, and their proponents promise to cut spending later. That

is what they said in 1981 when the national

debt was less than $1 trillion. Today it is approaching $5 trillion and steadily increasing

at the rate of $1 trillion per presidential

term. Experience shows that spending cuts

should come first.

NUMBER GAMES

I am concerned about how the Housepassed bill is designed to reduce federal revenues by $189 billion in the first five years and

then $452 billion in the next five years. This

approach is used because House budget rules

require offsetting spending cuts only in the

first five years. The bill is 21⁄2 times more

costly in the second five years, but it does

not include even a promise to reduce spending in those later years. These manipulative

procedures are one reason we need to put

spending cut money in the bank before we

cut taxes.

TAX BURDEN

I agree with my constituents who say that

taxes are too high. Federal, state, and local

taxes consume a larger share of the average

family’s expenses than housing, food, clothing, and medical costs combined. High taxes

discourage economic growth and savings.

However, the national debt is a greater drag

on the economy. One-seventh of every tax

dollar pays interest on the national debt.

Government borrowing drives up interest

rates, increasing the cost of mortgage payments, student loans, and car payments. Deficit reduction is a huge tax cut for our children.

I understand the popular appeal of tax

cuts, but have been pleased to note that a

majority of Americans say they prefer balancing the budget to cutting taxes. The

American people have their priorities exactly right. Proponents of tax cuts say Congress can cut spending enough to provide

both. They argue that a tax cut leads to sufficient revenue growth to balance the budget. Recent economic history should make us

extremely dubious of those arguments.

DISTRIBUTION

While there is much debate over how much

the tax bill benefits the wealthy, and the

statistics can be quite confusing, all agree

that the great bulk of tax benefits would go

to those who are better-off. The tax bill accelerates the widening gap between the rich

and everyone else. When coupled with the recent spending cuts tilted sharply against the

working poor, the result is an unfair transfer

of resources from the needy to the rich. The

U.S. Treasury estimates that half of the tax

breaks would go to families making more

than $100,000 per year—the top 10% of all taxpayers, and just 5% of Ninth District residents. Overall, the average family in the

Ninth District would receive less than $300 a

year from this bill, while families making

over $100,000 a year would receive an average

of $4,300.

ECONOMIC GROWTH

This bill also creates many new tax shelters that distort investment decisions and

make the economy less efficient. Many provisions simply tell investors to put their

money where they could get the biggest tax

break. Leading business economists tell us

that is a formula for economic stagnation.

Sensible tax policy would encourage investors to put their money where it could

produce valuable goods and services.

I support capital gains cuts that are focused on increasing long-term investment.

But the structure of the capital gains tax

cuts in the bill makes no distinction between

long-term investment and short-term speculation, and the bill repeals the current small

business investment credit. The tax rate for

long-term small business investment increases under the bill from 14% to 19.8% to

pay for a bigger cut for large corporations.

This bill would reduce the national savings

rate.

I also question the need for a short-term

economic boost. The country is in the middle

of one of the most successful periods of economic growth in its history. The economy

has grown so swiftly that the Federal Reserve has raised interest rates 7 times to

keep inflation in check. Surely stimulating

more rapid growth would result in either

more interest rate hikes or increased inflation. My view is that deficit reduction will

be more effective at increasing long-term investment and economic growth.