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[Congressional Record Volume 141, Number 79 (Friday, May 12, 1995)]
[House]
[Pages H4906-H4907]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                          COMMENTS ON THE DEBT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. Smith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, just some comments on the debt. 
You know, we have made a decision in the U.S. Congress to require that 
the Senate vote, that the House vote, that the President sign, any time 
that we increase the debt ceiling. Right now we have a debt ceiling of 
$4.9 trillion. That was done 2 years ago, when this administration came 
into office.
  Now, that is good, no more charts. That debt ceiling was increased 2 
years ago in 1993 to $4.9 trillion. Today--today our debt, subject to 
the limit, is $4.77 trillion. We are going to hit the cap of $4.9 
trillion in September or October. So this House is going to have to 
decide, do we want to vote to increase the debt limit again.
  Several of us, Congressman Chris Shays, myself, about 20 others, are 
saying look, if we are going to vote to increase the debt limit, should 
we not have something solid to get us on a glide path to assure that we 
are going to have a balanced budget sometime in the next 4 to 7 years? 
And I think the answer is yes.
  So I think we need to send a strong signal to the President of the 
United States, look, unless we are on that glide path, unless we have 
got a law, a reconciliation bill, a balanced budget amendment, or 
something that can somehow guarantee to the American people that we are 
not going to pick their pockets any more, we are not going to vote to 
increase the debt limit.
  So we are sending that message to the President. We are also sending 
a letter signed by about 25 of us to the majority leader in the Senate, 
to the Speaker of the U.S. House, saying look, do not plan on our vote 
to increase again the debt ceiling of the U.S. Government unless we 
have got the kind of firm, absolute, tough legislation signed by the 
President that helps make sure we are going to get there.
  Mr. KINGSTON. If the gentleman will yield, I want to ask you, because 
you are a distinguished member of the Committee on the Budget: Now, on 
the tax increase decrease, can we decrease taxes and balance the 
budget? Are we being hypocrites?
  Mr. SMITH of Michigan. The gentleman has as good an answer as I do, 
so I will let you complete the answer. My part of the answer would be 
that most economists that appeared before our Committee on the Budget 
agreed that increasing taxes is not the way to balance the budget if we 
want to stimulate job growth in this country. And as everybody knows, 
or should know, 2 years ago in 1993, what this Congress 
[[Page H4907]] did with the different majority is they increased taxes 
a record $252 billion over the 5 years of that budget.
  Our conference met and decided that if we wanted to stimulate job 
growth and savings and cap investment in this country, then we should 
offset that $252 billion tax increase with some kind of tax decrease. 
That is what we did. This tax decrease is totally paid for out of 
spending cuts and it is going to stimulate the economy.
  Mr. KINGSTON. Now, as I recall, one of your statistics was that 87 
percent of the people who benefit from the tax reduction make a 
combined income of $75,000 or less, 87 percent of the American people. 
Is that true?
  Mr. SMITH of Michigan. Yes, that is true. I wonder if this is not 
good. I mean, probably people do not understand, the other side, when 
they say this is tax cuts for the rich. But see, what they are saying 
is by taking a $500 tax credit per child, the person that is making the 
$50,000 or the $100,000 or the $150,000 is in a higher tax bracket, 
therefore that $500 tax credit is worth more, therefore these are tax 
credits for the rich.
  Everybody should understand where this rhetoric comes from when they 
say tax breaks for the rich. Some people say well, we are reducing the 
taxes that corporations pay because we are allowing them to deduct the 
cost of buying new machinery and equipment to put better tools in the 
hands of our workers to be more competitive.

                              {time}  1400

  You can call that tax breaks for the rich but what it is trying to do 
is encourage capital investment and job formation.
  Mr. KINGSTON. Is it not true that if the economic growth is 1 percent 
over the projected growth rate of 2.1 percent over the next 7 years, 
because of economic growth, we will reduce the deficit $640 billion 
because of increased revenues because businesses expand, they create 
jobs, more revenue comes into the Federal budget?
  Mr. SMITH of Michigan. You are such an excellent person to have a 
colloquy with because you know all the statistics and all the figures.
  Mr. KINGSTON. Is the gentleman suggesting some of these questions are 
staged? I am highly offended.
  Mr. SMITH of Michigan. It is interesting to note that when CBO comes 
up with their cost figures, when we have anything to stimulate the 
economy and job growth, they do not take that into consideration in 
deciding how much it is going to cost. So if it is a tax decrease, 
regardless of how business and industry and jobs react to that to bring 
in ultimately more revenues, they consider it flat. It is a nondynamic 
scoring.
  But you are so correct, if something we do encourages businesses to 
be a little more competitive and to allow them to expand, then it is 
going to bring in so much more revenues to totally offset everything 
and balance our budget much quicker.

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