May 4, 1995 CONGRESSIONAL RECORD— SENATE S6133 

This is the type of foolishness we are 

going to stop. We are all sensitive to 

the environment and we are sensitive 

to the need for some controls. But we 

are not going to allow Government to 

continue its heavyhanded treatment of 

its citizens, the people who are out 

there who are paying for all this fun we 

are having in Washington. 

So we have an agenda. Those of us 

who are the freshmen, the 11 freshmen—I am very pleased we are going to 

be driving this train, keeping it on 

track, keeping the focus, and not forgetting. Let me give assurances to everyone out there: We are not going to 

forget what the mandate was of November 8. 

I yield the floor now to my very close 

friend from the House, where I served 

with him and was elected with him, 

and now he is a leader in the U.S. Senate, the Senator from Arizona, Senator 

KYL. 

TAXATION, REGULATION, LITIGATION

Mr. KYL. Mr. President, during the 

campaign that the Senator from Oklahoma was just talking about that we 

just went through, I heard a phrase 

over and over again, ‘‘taxation, regulation, litigation,’’ the three problems in 

this country that we have to do something about. The Senator from Oklahoma has just spoken eloquently about 

the matter of regulation. This Congress 

is going to do a lot to reform the regulatory climate in this country, to bring 

some common sense back into it. 

The Judiciary Committee, on which I 

serve, just passed out a regulatory reform bill sponsored by the majority 

leader that is really going to get to the 

heart of some of the regulatory problems in our society today, bringing 

cost/benefit analysis and economic impact studies and risk assessments and 

peer review into the regulatory process, so you do not have the kind of 

noncommonsensical imposition of regulations such as those the Senator 

from Oklahoma was just talking about. 

Let me turn to the third item in that 

trilogy, the matter of litigation. We 

are debating today, and have been for 

almost 2 weeks now, legal liability reform. It is part of what the House of 

Representatives did, and it is part of 

what this Senate is committed to do as 

well, to reform our broken tort system. 

Some call it the litigation lottery. It 

produces a tort tax on all of America 

because we end up paying higher premiums for insurance, higher costs for 

products, and, frankly, we do not get 

the benefit of a lot of improvements 

that could be made in pharmaceuticals 

and in products and so on because the 

manufacturers are afraid to experiment 

with anything new because they may 

get sued, they may have to pay big 

damages, and their costs would go up. 

So what we are trying to do is reform 

that system so that all of America will 

benefit from improved technology, reduced insurance rates, reduced product 

costs, and, by the way, particularly for 

small businesses, not constantly suffering under the threat of being sued; 

also, of course, the physicians and the 

hospitals and other health care providers whose medical malpractice premiums have skyrocketed in recent 

years because of the possibility that 

somebody is going to sue them. They 

end up practicing defensive medicine, 

offering all kinds of services and tests 

that probably are not necessary but 

which they prescribe in order to make 

sure that nobody can say they did not 

do the absolute maximum that was 

necessary for the patient’s good. 

So these are parts of the problem we 

are addressing in litigation reform. I 

would like to just isolate one specific 

one that I will be talking about in 

about an hour and a half in the context 

of the bill we are debating today. I 

have laid down an amendment to correct a small, but I think important, 

part of the bill that is before us today. 

Many States—most States, I suspect—

have what are called alternative dispute resolution mechanisms, ways of 

resolving disputes short of going to 

trial. Trials are expensive. In the end, 

the people who win are the lawyers. So 

what we are trying to do is to get people not to always go to court but to try 

to resolve their differences short of 

going to court, and most States have 

those procedures. 

There is an error in the bill that is 

before us, section 103. It deals with alternative dispute resolution. It says 

when a State has alternative dispute 

resolution, the parties should use that. 

And that is fine. But then it says, if a 

defendant refuses to go forward when a 

plaintiff has made an offer in good 

faith and that defendant has refused 

the offer in good faith to go forward 

with the alternative dispute resolution, 

then you can assess attorney’s fees and 

costs against the defendant. But there 

is no such provision with regard to the 

plaintiff refusing to go forward in good 

faith. 

Mr. President, either we should not 

have a penalty for either party refusing 

to go forward or there should be the 

same penalty on both parties, whichever one of them refuses to go forward 

in good faith. But you cannot have a 

situation where one of the parties has 

the dagger hanging over his head and 

the other party with no downside for 

refusing to go forward in good faith. 

One way or the other that has to be 

fixed. 

First, I said, ‘‘Why don’t we have a 

penalty for both parties?’’ One objection was we should not be dictating at 

the Federal level what the States 

should do. Whatever people advertise 

there in the State, let that be. Then I 

say fine. My amendment simply strikes 

the penalty that is in the bill at the 

Federal level so that whatever the 

State law is the State law is. In effect, 

my amendment would return this alternative dispute resolution mechanism to the States to be enforced however the State law enforces it. Of 

course, in every State, if there is a penalty, the penalty applies equally to the 

defendant or the plaintiff, whichever 

one is refusing to go forward unreasonably. 

So, Mr. President, I think this is 

something I will be talking about a little bit later but something my colleagues will want to fix. Our whole justice system is about fairness. The reason we are willing to put our lives and 

our fortunes into the hands of one person, a judge or 12 people on a jury, is 

because we have faith that the system 

is fair. One of the reasons we are talking about litigation reform today is because a lot of people do not think it is 

fair. It would be the height of unfairness to have a penalty apply to one 

side, the defendant, but not have that 

same penalty apply to the plaintiff for 

doing the same thing—for refusing to 

go forward to resolve the dispute alternative to a trial. 

So my amendment will simply make 

it the same for both plaintiffs and defendants and reinstate State law as the 

guiding principle. 

I will be talking about this a little 

bit later. I think it goes back to the 

whole notion we have to reform. We 

have to do things fairly, and, if we do 

things fairly in our society today, if 

people think they are getting a fair 

break regarding regulation, as the Senator from Oklahoma talked about, regarding taxation and regarding litigation, then people gladly shoulder the 

burdens inherent in supporting the 

Government and society at large. But 

when they do not think they are getting a fair shake—that is, when they 

begin to say this whole thing has to be 

changed—it has to be reformed. 

Fortunately, at least the Senate Republicans who were just elected in the 

last election are here speaking every 

week about these kind of reforms. I 

think we are making a difference, Mr. 

President. 

I know my colleague from Minnesota 

is here and wishes to continue the debate. 

I yield the floor. 

Mr. GRAMS addressed the Chair. 

The PRESIDING OFFICER. The Senator from Minnesota [Mr. GRAMS] is 

recognized. 

f 

ONE HUNDRED DAYS OF REFORM 

FOR A NEW CENTURY OF RESPONSIBLE GOVERNMENT 

Mr. GRAMS. Mr. President, I am glad 

to have the opportunity to join with 

my fellow freshmen today to speak on 

the topic this week, ‘‘100 Days of Reform for a New Century of Responsible 

Government.’’

Having just returned from a series of 

townhall meetings in my home State of 

Minnesota, however, it would be more 

appropriate to refer to it as moving 

forward with the people’s agenda. 

Over the Easter recess, I held town 

meetings in five cities, traveling over 

1,000 miles, talking with hundreds of 

people across the State of Minnesota. 

And the mandate they delivered last 

November is more focused than ever—

fix things in Washington. 

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S6134 CONGRESSIONAL RECORD— SENATE May 4, 1995 

From Austin, MN to Brainerd, their 

message focused on our $4.8 trillion 

debt. 

The folks I talked with agree something needs to be done now. They have 

waited long enough. 

They are not content to have a Government running deficits of hundreds 

of billions of dollars each year for as 

far as the eye can see. They are understandably frustrated by decades of 

Washington doublespeak when it comes 

to making the tough choices necessary 

to balance the budget. 

And most importantly, they are concerned for their children and grandchildren who will be forced to finance 

the Government’s spending spree. 

Because of that massive $4.8 trillion 

debt, by the time every child born after 

1992 enters the work force, they will 

face a Federal, State, and local tax 

rate between 84 and 94 percent. 

Think about it. If Washington keeps 

doing what it is doing, spending dollars 

it does not have and passing along the 

bills, every child born after 1992 will 

spend their whole life working just to 

pay off a Federal spending spree that 

they never even asked for. 

Fortunately, my constituents had an 

opportunity to voice their concerns 

during my townhall meetings in Minnesota, and today, I want to share what 

they had to say. 

I brought with me some of the charts 

that I took around the State with me 

in these town meetings to try to point 

out some of the problems that I think 

we are facing. This first chart we were 

talking about is Federal taxes as a 

share of the median family income. 

FEDERAL TAXES AS A SHARE OF MEDIAN FAMILY

INCOME

The percentage of income paid to the 

Federal Government in direct taxes 

went from 3 percent in 1948 to 24.5 percent in 1992. 

In the 5 years between 1948 and 1953, 

Federal taxes rose from 3 to 9 percent 

of gross income. 

You have to remember this is coming 

out of World War II where we had to go 

into debt to help finance. Only 3 percent at that time was going to the Federal taxes. 

In the 8 years between 1972 and 1980, 

the average family saw their tax bill 

rise from 16 percent of their annual income to 23.5 percent of their income. 

The rise of the Social Security payroll tax and the erosion of the personal 

exemption have been the largest contributors to the reduction of posttax 

income for families. 

It is no wonder middle class families 

are finding it difficult to buy a house, 

put their kids through college, or put 

money aside for their retirement. 

AVERAGE INCOME FAMILIES WOULD BE TAXED

$10,060 LESS PER YEAR

Let us look at chart No. 2, the average income families would be taxed 

$10,060 less per year. 

According to the U.S. Bureau of the 

Census, the total pretax income for a 

family of four in 1992 was $47,787. After 

taxes, this same family’s income fell to 

$36,915. 

Under the 1948 tax rates, the median 

income family of four would pay only 

$812 in taxes to the Federal Government, leaving the family with an after 

tax income of $46,975 when adjusted to 

1992 dollar amounts. 

In 1992, a family of four, with the median income of $47,787, paid $10,060 

more in direct taxes to the Federal 

Government than the same family 

would have if tax rates had remained 

at 1948 levels. 

To put that into everyday terms, the 

median price of a single-family home 

purchased in 1992 was $103,700. The average annual mortgage payment was 

$7,380. 

The annual family income lost to increasing Federal tax burdens exceeds 

the average annual mortgage payments 

for an average home by 36 percent. 

What could you do if you could keep 

another $10,060 in your pockets? You 

could provide for the things your family needs without turning to the Federal Government and asking for more 

subsidies and more help. The dollars 

would remain in your pocket. 

TWO-EARNER MEDIAN INCOME—1994

The next chart that I was able to 

talk with Minnesotans about is the 1994 

two-earner median income chart. 

A median household with two breadwinners spends about $2 out of every $5 

it earns on taxes; 40 percent of everything you bring in goes to State, Federal, and local taxes. The average family spends more money on Federal, 

State, and local taxes than it spends on 

food, clothing, housing, and medical 

care combined. This does not include 

sales tax or your Social Security, the 

FICA tax. That brings it up to nearly 

49.6 percent of everything an average 

family makes in this country which 

goes to pay for government. 

Why are Federal taxes so high today? 

After all, did Ronald Reagan not pass a 

massive income tax cut in 1981? Yes, 

Reagan did sign a 25-percent income 

tax rate cut for all Americans in 1981. 

However, there have been six major tax 

increases since—1982, 1983, 1987, 1988, 

1990, and 1993. These have nullified the 

Reagan tax cuts. 

In the early 19th century, Chief Justice John Marshall wrote in the Supreme Court case, McCulloch versus 

Maryland: ‘‘The power to tax involves 

the power to destroy.’’

Today, this statement still rings 

true. Taxes are destroying the income 

of American families, leaving only 60 

percent of what it earns to spend on 

life’s necessities and joys. 

In 1966 the median income family of 

four will work until May 30 to pay 

their share of Federal, State, and local 

taxes—98 days. 

In 1948, the average family of four 

worked only 8 days to pay their share 

of Federal taxes. 

Had Congress adopted the Republican 

alternative budget for fiscal year 1995, 

roughly 35 million families could have 

deducted $500 per year from their tax 

bill per child next April 15. For the average family of four, that extra $1,000 

would be handy. 

SOURCES OF GOVERNMENT SPENDING FISCAL

YEAR 1995

The budget is composed of two principal fund groups, Federal funds and 

trust funds. This is how the bills are 

paid in Washington. 

Federal funds carry out the general 

purposes of government, whereas trust 

funds, such as Social Security and 

Medicare, are designated by law and financed by specially allocated collections. 

In 1994, trust fund surpluses totaled 

$95 billion. Under current law, the sum 

of the trust fund surplus and Federal 

fund deficit equals the unified deficit, 

which is commonly referred to as simply the deficit. 

Merging these trust funds—this is 

what we collect in tax receipts from 

your income tax, the 1040 business 

taxes, and others—the trust funds 

bring in $511 billion and pay for Social 

Security payments, and others. But 

last year there was a $107 billion surplus in that trust fund which the Government also borrowed along with the 

green part of this chart, $192.5 billion. 

What I would like to say about this 

green and what came out of the trust 

fund is money that we are borrowing 

from our children. We are taking this 

out of their future accounts to supply 

the dollars we need today in order to 

deficit spend, and the trust fund receipts in general revenues will total 

over $1.2 trillion or 81.5 percent of the 

Federal spending. 

Unfortunately, this sum does not 

even begin to cover the Government’s 

expenditures. The Government again 

will borrow from our children this $192 

billion. 

On the next chart, in real terms, a 

family of five making about $45,000 

would have 10 percent of its Federal 

tax burden reduced through the $500 

per child tax credit. This chart shows 

where many argue this is a tax credit 

for the rich. They talk about the 

$200,000 a year income. In real terms, 

families making under $75,000 a year 

would get 86 percent of the tax credit 

on $500 per child. 

If you make under $100,000, about 95 

percent of the families making under 

$100,000 would receive a tax credit. 

In the next chart, the White House 

and congressional Democrats argue 

that a $500 per child tax credit is unnecessary because they expanded the 

earned income tax credit in the 1993 

bill. But this claim ignores the difference between a wage subsidy and a 

tax cut. 

The EITC is a wage supplement for 

working families with children with incomes up to $26,000 per year. It is intended to offset the Social Security tax 

burden on these families and to increase their wages through a cash subsidy. 

A family of four earning $14,000 a 

year—slightly below the official poverty level—will pay no income taxes 

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May 4, 1995 CONGRESSIONAL RECORD— SENATE S6135 

but will bear a Social Security tax burden of roughly $2,140. Now, this family 

is then eligible to receive some $2,400 

from the earned income tax credit, 

nearly $260 more than its entire tax 

burden. 

A family earning $28,000 a year—and 

not eligible for the earned income tax 

credit—would have 57 percent of its income tax bill and 17 percent of its total 

Federal tax bill erased by the $500 per 

child tax credit. 

This is an important part of tax relief to these families that do not qualify but still make under $35,000 a year. 

Family tax relief, I believe, should 

not be means tested. Every working 

family in this country is overtaxed, 

thus every working family, regardless 

of income, should be eligible for a $500 

per child tax credit. The Tax Code 

should not penalize children simply because of their parents’ income. 

Now, along with family tax relief, the 

Minnesotans with whom I met during 

the past recess are demanding a balanced Federal budget with or without a 

balanced budget amendment. And if 

that means putting the Federal Government on a strict low-fat diet, then 

so be it. 

One thing I heard over and over again 

during my town meetings, from Minnesotans who pay their own bills and 

balance their own budget, is that if 

they can do it, then the Federal Government can do it as well. 

One thing is very clear: The budget 

can be balanced, and we can do it without gutting the vital programs on 

which millions of Americans depend. 

We will do it by containing the growth 

of Government while continuing to 

meet the needs of America’s families, 

children, and senior citizens. 

By streamlining Federal bureaucracy 

and sending the money back to the 

State governments in the form of block 

grants, Minnesotans know that they 

will have more power, not less power, 

more resources, not fewer, and new and 

better opportunities. 

I have every confidence that the people of Minnesota can direct those resources and provide for those in need 

better than Washington bureaucrats 

could ever hope to do. 

That is my motivation as we move 

forward during these next 100 days, and 

it is my hope that every Senator remembers the messages that they have 

heard over the recess and join in the effort to enact what we call the people’s 

agenda. 

We need to restrict or restrain the 

growth of spending in the Federal Government, but we also need tax relief for 

Minnesota families and for the Nation’s families. We cannot have one 

without the other. I hope very strongly 

that as we move forward in these next 

100 days we will be able to provide 

some of this long sought tax relief for 

middle-class American families. 

I thank the Chair. I would now like 

to turn the floor over to my colleague, 

the Senator from Missouri [Mr. 

ASHCROFT]. 

Mr. ASHCROFT addressed the Chair. 

The PRESIDING OFFICER (Mr. 

FAIRCLOTH). The Senator from Missouri. 

The first half hour of time which was 

reserved has expired, so the Senator 

has up to 5 minutes. 

Mr. ASHCROFT. Mr. President, I 

would ask unanimous consent that I 

can speak as if in morning business for 

up to 10 minutes. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

NATIONAL DAY OF PRAYER 

Mr. ASHCROFT. Mr. President, I 

would like to take this opportunity to 

extend my appreciation to citizens all 

across America who are recognizing 

the observation of the National Day of 

Prayer. It is a time during which the 

people of America pray for this country 

and pray for those of us who have the 

responsibility to lead, not just at the 

national level, but at the local level as 

well. So in city halls across America, 

in State capitals, and here in the Nation’s Capital, individuals are seeking 

to invoke the presence of God upon the 

deliberations of the Government, and 

upon the Nation as a whole. 

I am especially grateful for this fitting activity and for the fact that as a 

nation we occasionally stop to remember the Almighty. In particular, I am 

pleased to express appreciation on behalf of myself and many others to Shirley Dobson who is leading the National 

Day of Prayer this year. 

As our Nation heals from the wounds 

inflicted upon us by the Oklahoma City 

tragedy, and as we continue to confront daily the tragedies of death and 

violence that seem to plague our land, 

it is fitting we would call upon God to 

give thanks for the blessings we have 

enjoyed. 

The Old Testament book of Chronicles provides a worthwhile guide to 

our times. It says: ‘‘If my people, which 

are called by my name, shall humble 

themselves and pray and seek my face 

and turn from their wicked ways, then 

will I hear from Heaven and will forgive their sin and will heal their land.’’

Mr. President, I do not think there is a 

more noble aspiration than the desire 

of America to be a land of healing. 

Our Nation has embodied this attitude of humility and reverence before 

God from the very earliest days of its 

existence. During the Constitutional 

Convention, Benjamin Franklin rose to 

say: ‘‘If a sparrow cannot fall to the 

ground without his notice, is it probable that an empire can rise without 

his aid?’’

There is little question but that we 

owe a debt of gratitude to Almighty 

God for the blessings he has continued 

to bestow upon us. As George Washington prayed: ‘‘Almighty God; we 

make our earnest prayer that Thou 

wilt * * * most graciously be pleased to 

dispose us all to do justice, to love 

mercy, and to demean ourselves with 

* * * charity, humility and a pacific 

temper of mind.’’

I believe those are the kinds of sentiments we all ought to be expressing 

today. I pray God’s blessing upon this 

land, and I thank those who are assembling across the country to remember 

our need for guidance. 

f 

A BALANCED BUDGET 

Mr. ASHCROFT. Mr. President, I 

want to address the issue of a balanced 

budget, but I want to start by talking 

about the shifting balance of FederalState power. Last week, in United 

States versus Lopez, the Supreme 

Court held that a 1990 Federal statute 

did not ‘‘substantially affect’’ interstate commerce. While the decision did 

not overturn any precedents, it marked 

a sharp departure from the modern 

Court’s expansive view of congressional 

power to regulate commerce. By limiting Congress’ ability to use the commerce clause to legislate social policy, 

the Court highlighted the benefits of 

the Federal system envisioned by the 

Framers, and outlined in the Constitution. Moreover, they acknowledged 

what the American people have recognized for quite some time: That a Congress with the power to do everything 

for you, also has the power to take everything from you. 

In the Senate, we have just begun to 

discuss spending priorities for the coming fiscal year. When the budget resolution comes before this Chamber, our 

actions will help shape the ongoing debate over State power within the Federal system. 

The question we must ask is not 

what power the Federal Government 

ought to have, but what powers have 

been extended by the people. We must 

be ever mindful of the fact that the 

powers conferred upon the Federal 

Government by the Constitution have 

proscribed limits. Clearly, a National 

Government that has a debt of $4.9 trillion—that is over $18,000 for every man, 

woman, and child—has forgotten this 

fact. 

Mr. President, if efforts are not made 

to limit spending, the Federal Government will no longer be able to fulfill its 

most basic constitutional obligations. 

In just 17 years, spending on entitlement and the national debt will consume all tax revenues; Medicare will be 

bankrupt in just 6 years; and in FY 

1997, we will pay more in interest payments on the national debt than we 

will spend on national defense. 

Last November, the American people 

spoke with a clarity and an intensity 

seldom heard in American government. 

What was their message? Return to us 

the ability to control our own lives, 

our own future, our own destinies. This 

was not some radical, foreign concept, 

it was the message of the founding—

the message embodied in the capstone 

of the Bill of Rights, the 10th amendment, which reads: ‘‘The powers not 

delegated to the United States by the 

Constitution, nor prohibited by it to 

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