May 16, 1995 CONGRESSIONAL RECORD—HOUSE H 5061

What has this country come to?

Twelve years of past policies supporting

failed financial institutions and failed military

hardware systems and failed trickle-down economic theories has led us from the wealthiest

nation in the world to become potentially one

of the poorest—with no prospect for recovery

unless we stop some of the crazy changes

that are taking place.

So, are we going to finally get our fiscal

house in order? Balance the budget? Without

touching Social Security? And without cutting

a dime from defense spending?

Sound familiar?

It should. It is the 1982 Economic Reform

Act of 1995.

A massive tax cut for our wealthiest campaign contributors paid for by eliminating the

one tax break for the poor working stiff that

even George Bush thought was a fantastic

idea.

To sacrifice the earned income tax credit—

the only possible reason the father of two

could even consider taking a job at minimum

wage rather than going on welfare—is absolutely ludicrous.

As my friend from Ohio keeps saying—

beam me up.

Mr. CLAY. Mr. Speaker, I ask unaniGENERAL LEAVE

fmous consent that all Members have 5

legislative days within which to revise

and extend their remarks on the subject of this special order.

The SPEAKER pro tempore (Mr.

CAMP). Is there objection to the request

of the gentleman from Missouri?

THE BUDGET AND THE CONTRACT

There was no objection.

WITH AMERICA

fThe SPEAKER pro tempore. Under

the Speaker’s announced policy of May

12, 1995, the gentleman from California

[Mr. CUNNINGHAM] is recognized for 60

minutes as the designee of the majority leader.

Mr. CUNNINGHAM. Mr. Speaker, I

should be at a dinner tonight, but I

thought it more important to set the

record straight. First of all I heard tonight that Social Security was going to

be touched. Social Security is not

touched, neither in the budget nor in

the appropriation or the reconciliation

package.

We have heard the rhetoric about the

contract and how bad it was. But yet,

the American people have embraced

the Contract With America. And I have

also heard tonight that the tax cuts

are only for the wealthy.

Let me state the only way that we

can beat rhetoric and/or basic lies is

with facts, and I would like to present

some of those facts, Mr. Speaker. And

I will let you decide what is the truth

and what is not.

In our package we gave the family

tax credit for each child of $500. Is that

for the rich? We have families from all

walks of life with children. And the

basic argument is do you want those

dollars to go to the American people or

do you want those dollars to be spent

by the Government?

I would also ask you if an IRA for

$2,000, that each family can save for

their future, tax free, is for the rich?

No, it is not.

I would also ask you in our contract

we provide an IRA for a spouse, either

a mother or a father at home who was

not even working. You would be able to

set aside $4,000 each year for a child.

You can provide for a lot of education

after 17 or 18 years on an interest-free

loan.

b 1930

In our contract, we did away with the

marriage penalty, to encourage families to come together, that if you filed

jointly, that you have a tax incentive.

We encourage that. For too many years

we have penalized for people becoming

families and filing that way.

In the Clinton tax-and-spend package

in the early 1990’s, he increased the Social Security tax on senior citizens. We

have done away with that Social Security tax.

Capital gains reduction, Jack Kemp

in the Wall Street Journal and the

Union Tribune talks about retirement

accounts, and that each American,

whether you have a car or sell a home

or what, that is real income and that is

called capital gains. We took the fees

and the items in which someone retires, $60,000 to $750,000, and everything

that you own that you can pass on to

your children, and yet the Clinton

Democrats wanted to take that from

600 to 200,000 and then tax you at a very

high rate. That is a redistribution of

the wealth, Mr. Speaker.

The leadership’s reply, the liberal

leadership’s reply, is an attempt to ignite an ugly class warfare system, and

I repeat the facts, a $500 child break an

IRA in which you can save for the future tax free, an IRA for a spouse at

home tax free, savings, marriage penalty, reduction of Social Security tax.

Those are not taxes for the rich.

Seventy-eight percent of the Contract With America’s tax package goes

to those that earn $75,000 or less. That

is not the rich, Mr. Speaker.

Mr. Speaker, only 33 House Republicans voted for the George Bush tax

increase. Not a single Republican,

voted for the Clinton tax-and-spend

package. As a matter of fact, it was so

bad that they had to twist arms for 45

minutes and pass it by one vote when

they were in the majority, and we only

had 218 Members.

I look at what they have left us.

Look at where each child today will

owe $187,000 in tax liability. That is not

a future that I want to leave to my

children. We used to build a farm and

pass it on to our children. Today, we

are selling that farm and giving our

children a mortgage.

I look at what the President said

when he was going to have a $500 billion deficit reduction package. It was

rhetoric. If you read in the recent Wall

Street Journal, there was none, and

President Clinton and the promise that

he would reduce the deficit each year,

in the budget that he just gave us before Congress, that budget increases

the deficit by $300 billion a year. That

is wrong, and that is for each of the

next 5 years.

We take a look at the status of this

country, Medicare is starting to go

bankrupt this year. His own trustees’

report of the Medicare account, Alice

Rivlin, special adviser in the budget to

the President, has started that Medicare will go bankrupt, and yet the

other side of the aisle and the President are not engaging that issue, because there is a 1996 election.

The American people, Mr. Speaker,

expect leadership. They want the President to take on and save Medicare.

They want him to balance the budget,

and they want welfare reform. But yet

because of the 1996 election, there is no

leadership. America is looking for that

leadership, Mr. Speaker.

Look at each child born in 1995 again;

$187,000? Do you want to leave that? We

are spending nearly $1 billion a day on

just the interest of the debt. What

could we do in this country with $365

billion a year? Think about the other

side of the aisle when they said we are

hurting children. We can do a lot in

education and law enforcement and the

real things that we need to do with $365

billion a year. That again is just the

interest, just the interest, and that interest is not going into U.S. banks, Mr.

Speaker. It is going into foreign countries that hold those notes and receive

American interest. That is wrong Mr.

Speaker.

I look in just a few years ago, take a

person that earns $20,000 a year. Let us

say during the year they intend $25,000,

and they have only made $20,000. Well,

if they do not pay off the $5,000, they

will have to pay the interest on that

$5,000, and if they do not pay it the following year and they also increase

sending to maybe $30,000 or $35,000 or

$40,000, then they have to pay the interest on that. In just a few short years,

they will owe $100,000, and they only

make $25,000. That is the status of our

Government, and that is the status quo

of the liberal leadership and class warfare, and that is why our contract and

the tax package is important, Mr.

Speaker.

They talk about cruelty to education. Today because of the Federal

Washington Bureaucracy, we only get

23 cents out of every dollar into the

classroom. We had the superintendent

of schools for DC schools clamoring because he has got 40-year-old classrooms. They want fiber-optics. They

want computers in the classrooms. But

where are the dollars going? What is

cruel is this organization, this bureaucracy, is eating up all of the dollars. We

want to block grant it and focus the

money down to where we need it in the

classroom. We need fiber-optics in

classrooms. We need those televisions.

But they are going to the Washington

bureaucrats.

Mr. Speaker, the American people

told me first when I was elected reduce
H 5062 CONGRESSIONAL RECORD—HOUSE May 16, 1995

Government spending. In 93 days we reduced spending by $277 billion. They

said give the taxes back, and again,

only 33 Republicans voted for the

George Bush package; zero voted for

Clinton’s tax package. But yet we gave

$189 billion back to the American people instead of letting the Government

have it and keep it. We think the people can spend it better than the Government and less wasteful.

And at the same time, the third

thing, Mr. Speaker, they said to do,

was we want to reduce the deficit. We

reduced the deficit by $91 billion, and

that was only in 93 days. It is our Contract With America that the figure

that we will arrive at in 2002 is a zero

budget, balanced budget, and that is

important.

The fourth thing they asked us to do,

Mr. Speaker, is work together. I have

heard the President and AL GORE and

Panetta and even Members on the

other side of the aisle say this was a

mean contract. It was ill-spirited. If

you look again, the only way to defeat

rhetoric is with actual facts. I would

like to submit for the RECORD the actual votes day by day, day by day on

every item in the contract. The average vote on each item was 300 votes,

Mr. Speaker, the most bipartisan Congress in the history of over 200 years of

Congress. Let me read just a couple:

Balanced budget, January 26, passed

300 to 132 votes, 72 Democrats; unfunded mandates passed 360 to 74, 130

Democrats voted with us; line-item

veto passed 294 to 134, 74 Democrats;

victims restitution, 201 Democrats

voted with us; criminal alien deportation, 163; regulatory reform and relief,

186 Democrats voted with the contract.

And here is an item; I will read just

those few. I would like to submit it,

Mr. Speaker, for the RECORD, the most

bipartisan Congress in over 200 years,

and that is important, I think, to the

American people. Mr. Speaker, I would

like to also submit for the RECORD, I

have an article here written by former

Member, former Secretary of HUD,

Jack Kemp, and the ex-Secretary

wrote,

More than 100 million Americans are investing often through mutual funds and pension and retirement accounts. Every time

you hear the phrase ‘‘institutional investor’’

on the news, think of the pension fund of the

Detroit or Buffalo auto worker of the retirement account of an older couple in Florida

and a member of the American Association

of Retired Persons, or the Fidelity Mutual

Fund holding a young Californian in entrepreneur savings, managing the hopes and

dreams and savings of pensions of America’s

huge middle class.

It is entitled ‘‘Capital Gains Fable

and Fact.’’ It goes through step by

step, and Alan Greenspan in his testimony stated that capital gains would

be one of the most significant indicators and founders of jobs in this country, and that is important.

Mr. Speaker, I include the article for

the RECORD at this point.

CAPITAL GAINS FABLE AND FACT

(By Jack Kemp)

Forget the rich for a moment (I’ll return

to them later), a capital gains tax cut is the

best thing Congress could do right now to

help the middle class, the poor, and indeed,

our nation’s economy. Let’s examine the

ways:

The Financial Markets aren’t a ‘‘playground of the rich.’’ In the last 20 to 25 years

the financial markets have become strong

middle-class institutions. Well more than 100

million Americans are invested, most often

through mutual funds and pension and retirement accounts. Every time you hear the

phrase ‘‘institutional investor’’ on the news,

think of the pension fund of a Detroit or Buffalo autoworker, the retirement account of

an older couple in Florida and a member of

the American Association of Retired Persons

or the Fidelity mutual fund holding of a

young California entrepreneur.

These ‘‘institutional investors’’ that so

dominate the markets these days are managing the hopes, dreams, savings and pensions

of America’s huge middle class. They may

not be directly subject to capital gains taxes,

but the value of their assets is determined by

the health of the markets. A cut in capital

gains taxes would be a boon for our financial

markets and for the middle class institutional funds, not to mention for the family

or retiree cashing in a retirement account to

purchase a home, pay for college or for family retirement needs.

Jobs. We live, as we are so often told, in a

competitive world economy. American workers can only compete with low-wage foreign

workers by being more productive, making it

beneficial for employers to hire them, even

at a higher wage. As any economist will tell

you, the most important element in increasing worker productivity is capital investment (economists call it the capital-to-labor

ratio). It was America’s huge investment in

new plant and equipment—and particularly

new technologies—during the 1980s that gave

American workers the productivity edge still

held over both Asian and European workers.

Yes, American workers are today the most

productive in the world, but the world keeps

changing, and our international competitors,

particularly in East Asia, have zero or very

low capital gains taxes. A capital gains tax

cut would enable huge new investments in

American capital formation and ensure the

productivity edge of the American work

force for decades to come.

Jobs. Through the 1980s, the American

economy added almost 20 million net new

jobs (since the tax increases of the early

1990s that rate has slowed significantly). Almost all that job increase came from small

and medium-size companies. In other words,

the Fortune 500 haven’t added one net new

job to the economy in the last 15 years.

Often these small, growing employers were

start-ups, perhaps a new high tech operation

in Silicon Valley, but even more likely a

‘‘Mom and Pop’’ operation providing a service to a local or regional market. Where did

these new, small companies get the capital

to open? Not from bank loans, but, often,

from the realization of capital gains—by

selling a house, or a previous small business,

or mutual fund shares, and reinvesting it.

Reinvesting, I would say in America’s economic future.

Jobs. You only create new jobs in a growing economy, and perhaps the most vital elements to growth, the kind of quantum

growth America saw in the 1980s, is entrepreneurial enterprise and development of

technologies in the productive economy. Unless you believe government invents and applies technology better than the private sector (if you do, I suggest a trip to the former

Soviet Union), what sense does it make for

governments to be confiscating as much as

30 percent to 40 percent of an entrepreneur’s

capital, which he or she could otherwise reinvest in a business? (That’s the 28 percent

federal level plus the high local capital gains

tax in states such as New York and California. If you count you inflation, as we must,

capital gains taxes can often exceed 100 percent of net profits.) How many businesses

have not been started, or have foundered, because they couldn’t clear that capital gains

hurdle? How many jobs have not been created?

Better jobs. According to the Herman Cain

of the National Restaurant Association, 60

percent of all restaurant owners and managers today started as entry-level waiters

and ‘‘hamburger flippers.’’ At some point,

they needed capital to invest in that new

restaurant, or to buy that new franchise. Upward mobility is what America is all about,

and the ability to access and accumulate

capital—an ability undermined by the capital gains tax—is the stairway by which people move up.

This brings us to beyond the issue of the

middle class and to the concerns of the lowincome people of our nation. Everything said

about jobs here goes more than double for

them. To escape the trap of poverty, the poor

need many things—better education and a

resurrection of family structures among

them. But essential to the mix are jobs, lots

of well-paying jobs in a growing economy

that provides opportunity up and down the

scale, particularly in urban America, for minority men and women to get access to capital and entrepreneurial opportunity.

A dramatic capital gains tax cut has now

passed the House and will come before the

Senate, and the rhetoric of class warfare has

never been so heated. But what may appear

as good politics for the ‘‘soak the rich’’

crowd, is bad economics for America. As a

nation, we must reject the notion of a divided America, with mutually antagonistic

classes in a zero-sum game, and see our nation as a whole, rising together and leaving

no one behind. Will a capital gains tax cut be

good for the rich. Of course. But a capital

gains cut is even more important for the

middle class and for the poor. To the U.S.

Senate, I say: Put aside the rhetoric of class

warfare, pass the capital gains tax cut now,

and give all of America a well-deserved

boost. Soon after, we can look forward to a

debate about a real flat, fair and simple postcard tax system for our nation as we prepare

to enter the exciting world of the 21st century.

I also heard the rhetoric that we will

be taking away the money from education. Mr. Speaker, when I went

through college, I grew up in a little

town of 2,113 people back in Shelbina,

MO. We went to the Shelbina Bank. It

was not a big bank, and my parents

cosigned a loan for me to go to college,

and they both worked, Mr. Speaker. We

paid back, my parents paid back most

of it so I could go to school. You know

something, the Government did not

pay the interest on that. It was a loan

between the bank and myself so that I

could go to college. I had to work. I

had to work in restaurants, and my

parents both worked to pay it off.

Today, the Government subsidizes

the students’ interest while they are

going to school, either 1, 2, 3, 4, or however many years. They pay that interest; they did not mind, but they are

doing it now. What we are asking students to do is we will provide a loan for
May 16, 1995 CONGRESSIONAL RECORD—HOUSE H 5063

a student who qualifies to go to college. That interest, you do not have to

pay it while you are a student. But

when you get a job, you will pay off

that loan. The most that it will cost is

about a buck, the size, the price, of a

Big Gulp amount at 7-Eleven. All of

those 1 dollars per day extra that a person would have to save and spend

amounts to $12.5 billion, Mr. Speaker,

$12.5 billion, and all we are asking the

student to do is take the responsibility, a world that you do not hear much

around this place, and pay off their

loan.

Let us look at a case, very high borrowing, 9-year graduate student, worst

case, student with 9 years of graduation, that borrowed a maximum

amount of loan for all 4 years of undergraduate enrollment. The above loan

shows that there is a savings to the

Government of $16,015. That will be

about $194 extra per month that that

student will pay. That is at a rate of 2

percent.

Alan Greenspan has also said that if

we balance the budget, interest rates

will go down as low as 2 to 4 percent.

Now, take 2 percent on a home, take 2

percent on a farm, I think, and I cannot remember the exact figures. I have

got it in my notes. But a $75,000 mortgage, I believe, at an 81⁄2 percent over a

30-year period, you will save about

$56,000 with a 2-percent reduction, and

Alan Greenspan said it could be even

more. $56,000 will go a long way to pay

for college students, for a house, for a

car, and whatever.

And so the myth about that we are

destroying college loans is just not

true, Mr. Speaker.

We spent in this Government over

the last 7 years $9.5 trillion. In balancing the budget, the Republicans are

going to spend $11.5 trillion. Let me repeat that, 9.5 to 11.5, but what we are

going to do is reduce the rate of growth

of Federal spending, because if we do

not, Mr. Speaker, America will become

a second-class economic country.

The soundness of the dollar abroad

will keep going down. Medicare will

fail. We will not balance the budget. It

will go out of control, and welfare reform and all the other reforms that we

have put together will go down the

tubes.

The coming debate is not just about

the budget. It is about the American

future, Mr. Speaker. It is about doing

the right thing. It is about an opportunity to create the potential for prosperity, for safety, for a better life for

virtually every American. It will take

hard, systematic work, and real

change. But it can be done, and it will

improve the lives of our children, of

our senior citizens, and every American.

What does it mean? People say, well,

that is just rhetoric. How do you do the

right thing? Mr. Speaker, let me go

through what those items are. First,

you have got to be truly compassionate

by replacing the welfare state with an

opportunity society. The Republican

Governors came to us and said there

are 366 welfare programs. They all have

people that work in them. They all

have facilities that have to be paid for.

They all have overhead. They have

rules and they have regulations. Different people qualify for those welfare

programs. They are all so intermeshed

that none of us, the Governors told us,

we cannot track on who is getting

what, and in many cases people are

qualifying and receiving and abusing

the system. So they asked us to block

grant it. Let them use the programs individual to their State.

Look at what Governor Weld has

done. Look at what Christie Frittman

has done. Look at what in Wisconsin

they have done with Tommy Thompson. Those are successes, Mr. Speaker,

and we want to give the States and

untie their lands to run the programs

where they can actually help people.

b 1945

Governor Weld actually reduced

taxes, reduced the welfare system, and

he has got the majority of his people

working. They are happier, they have

responsibility, and they love it, and

that is what we ought to free up the

people to do.

Second, restoring freedom by ending

the centralized bureaucratic

micromanagement from Washington,

DC. We need to return the power back

to the States. A tax increase and government control is the one most powerful measure in which this body operates. I say to my colleagues, If you

have the power and the control, you

control votes. We do not want Washington to have that kind of power. We

want to give it back to the States. We

want to give that power back to the

people, Mr. Speaker, because we feel

that government does work best closest to the people.

I say to my colleagues, Ask anybody

in your particular area. Ask them if

they know where the dollars should go

specifically better than the individuals

that are servicing that program. They

cannot.

Third, promoting prosperity, economic growth, take-home pay, by reducing taxes, reducing litigation and

regulations. Go to any city, ask any

Governor, ask any major, ask any official or any business person what they

would like to do better business and be

able to hire people. One is get rid of the

liability and the litigation problems,

the rules, and the regulations. We are

going through the Clean Water Act, as

we are right now, and reducing the tax

burden and the overhead.

Next, creating an opportunity for

every American by leading a transformation of an information age society. We double our knowledge, Mr.

Speaker, every year. It used to take

only 10 years ago 50 years to double

that knowledge. Look at the schools,

at what they need with the fiber optics

and the computers we talk about, the

libraries of high technology. We are

putting out in an information age an

enormous amount of information, but

there is no one out there to receive it.

We are understaffed. We are

undermanned. That is where the government has got real investment that

it can make in helping our students to

make sure they are up to speed. If we

do not prepare them for that, then Mr.

Speaker, the age gap and the gap between those that have good jobs and

those that do not will go.

I have a school in my district at

Scripp Ranch. That school has got fiber

optics. It has got a computer system. It

has got a system to where the children,

boys and girls, are swinging hammers

in a trade, learning a vocational trade.

They are building modular units, and

they are designing those modular units

on computers. On the other side of the

aisle, those students that are college

bound, the architecture and architecture design students are using those

computers. They are designing those

modular units. The students then sell

those modular units and buy new

equipment for the school, and guess

what, Mr. Speaker? In the summer the

unions in participation with public and

private are participating with small

business and private enterprise, and

they are hiring those students in the

summer, they are teaching them a vocational trade, and they are preparing

them for college, and we think that is

the way to go for our students in decreasing the bureaucratic rhetoric and

the bureaucrats here in Washington,

DC.

Next, create a safe financial future

for our children, our retirement years,

by balancing the budget, solving the

crisis of Medicare and Social Security.

And we have already talked about what

the options would be. It is our moral

responsibility. Look what happens if

we do not save Medicare. I ask my colleagues, ‘‘Can you imagine—I do not

use the term senior citizen, our chronologically gifted people can you imagine

our chronologically gifted folks—having to pay 300 percent more premiums

on Medicare?’’ That is cruelty. ‘‘Can

you imagine that in a welfare system,

having the system that we have today

that is cruelty, can you imagine not

balancing the budget and having our

children owe $187,000 in taxes the day

they’re born in 1995?’’ That is cruelty,

Mr. Speaker.

We have a moral responsibility, and

we need the President to take the leadership in doing that. I say, ‘‘Don’t turn

away from it just because they’re 1996.

Go down in history as a leader not

being AWOL.’’ As a majority party, we

must lead a new dialog, not through

just dialog, but through change and

public opinion.

A great man, Franklin Delano Roosevelt, in 1936 said, ‘‘Our generation

has got a rendezvous with destiny.’’

Mr. Speaker, we have a rendezvous

with destiny. It can be one of a second

rate power, of an economic power

where our children are not safe in the

streets, where the current welfare system exists, or we cannot.
H 5064 CONGRESSIONAL RECORD—HOUSE May 16, 1995

Another great man that I heard spoken about tonight here, his name is

Ronald Reagan, and he said, ‘‘We have

every right to dream heroic dreams.

The crisis we are facing today requires

our best effort and our willingness to

believe in ourselves and to believe in

our capacity to perform great deeds, to

believe that together with God’s help

we can and will resolve the problems

which now confront us. After all, why

shouldn’t we believe that we are Americans?’’

President Ronald Reagan had a good

thought. It is our opportunity right

now, by creating an opportunity society, by decentralizing American government, by creating economic growth

and reestablishing American competitiveness and the American dream by

leading the transformation of the information age, and balancing the budget, reducing the financial crisis in Medicare and in Social Security. To embrace change on this historic scale we

must use an appropriate planning

model, a vision, the strategies, the

projects and the tactics, Mr. Speaker.

I would ask the gentleman from the

other side of the aisle and there are

many, Mr. Speaker. There are many of

the Democrats on the other side of the

aisle that embrace this. But I would

ask, I would beg on my knees, that the

Democratic leadership would get away

from the 1996 election and help us

achieve that vision.

What is our vision of the American

future, and what does it mean? Every

American is safe from violence and

drugs. That is a novel item. Every willing person will be integrated into a

world of work, prosperity and achievement, a healthy environment, and,

trust me, Medicare is not standing

alone by itself. If we are going to solve

that problem, we need health care reform. The President is correct about

that. We need the tort liability reform.

We need the paperwork reduction. We

need insurance grouping so more people can afford insurance. Most everyone has health care, Mr. Speaker. Not

everyone has insurance, and we can do

that and save the Medicare problem.

New technologies and approaches to

create the fullest possible participation

of every American with disabilities. I

have a father in my district, Mr.

Speaker. His son was paralyzed from

the neck down. He went to the Medicare system, and he has got a whole garage full of equipment that he cannot

use. He was so distraught that he started his own business on how to handle

disabled children, what equipment do

you use with sound activated doors,

with computer systems, where someone

cannot type, it can be sound activated,

and, Mr. Speaker, I would advise you to

use it because it is also spell-checked.

As you verbalize into the computer,

something all of us could use, not just

someone that cannot type.

A pro-entrepreneur, pro-science technology. Our biotech industry, our medical industries, are the future. We are

debating a wetlands and a Clean Water

Act. We have biotech companies that

are growing antipesticides out of DNA,

and guess what? When the rains come

and the DNA washes off the plant, it

does not violate our rivers, or lakes

and our oceans. We need to invest in

that, Mr. Speaker.

Job opportunities for every American, but, yes, with low taxes and a balanced budget amendment. All around

U.S. corporations are rethinking and

engineering. They are doing; they are

downsizing. But, as industry is

downsizing and reorganizing, Government is growing bigger, and bigger, and

bigger. That is why we have the current welfare state. That is why we are

only getting 23 cents out of every buck

down into the classroom, and we have

to have a vision, but, yes, we have to

listen, we have to learn, we have to

help, and we have to lead.

I will not go through the improvements again, but they are important,

and we have got to do that. The welfare

state has failed, Mr. Speaker. It has

failed the model of delivering goods,

services to help the American people.

It actually hurts the poor. I ask you,

and I would ask every American,

‘‘Look at the current welfare system,

the child abuse, the brutality, the

drugs, the crime ridden Federal

projects.’’ The culture of violence is increasing. It permeates our inner souls

in our inner cities. It denigrates our

civilization.

In our committee we heard case after

case of a welfare mother that has gotten off of welfare because she said,

‘‘Duke,’’ she actually said Mr. Chairman, ‘‘the welfare system is addictive.

It’s easier to stay off welfare.’’ But our

own laws prevent us from helping that

person. We take away her welfare

check if she goes to work or a portion

of it. She has to provide transportation

and clothes. She has to provide babysitting for her child and child care. And

then she says, ‘‘Well, I could actually

lose my health care also, so I’m going

to stay at home. A, I’m with my child,

I make more money, so why should I

get off?’’

Well, in the contract what we do is,

first of all, we go after the 34 billion,

the deadbeat dads, in some cases deadbeat mothers, to bring that balance to

those families. We also have where parents get together. We do not penalize

them for the first 2 years. We let them

get together. We do not take away that

welfare check. But, yes, one of them

has to work 30 hours a week, but yet

we are encouraging families to get together. That is more compassionate,

Mr. Speaker, than letting parents split

up and children go without fathers and

without mothers.

The culture of violence. The

nonworking, nonproductive part of our

society is a big factor in the deficit

that we face each year. The human

cost of the welfare state; poor Americans are trapped in unsafe housing,

they are saddled with the rules that

are antiwork, antifamily, and

antiproperty. They are forced to have

their children attend some public

school monopolies, and I would ask any

American to visit the D.C. schools.

They are trying their best. I listened to

the superintendent, but yet they need

that investment into education, and

the gentleman was right. We need to

invest in education, but we also need to

let the States have the power to wield

their wealth and give the money to

them in the block grants so that they

can direct the money, not have Washington.

In the name of compassion we have

funded a system that is cruel and destroys families. We need to change

that. Welfare spending now exceeds,

and listen to this, Mr. Speaker, welfare

spending exceeds $305 billion per year,

a total of $5 trillion since 1965, $305 billion a year in welfare, and look at what

it has got us today, a failed state. But

yet many of my colleagues on the

other side of the aisle would just have

us dump more money into those 366

programs to say, well, we need it for

the children. Well, I would say to you,

Mr. Speaker, it is cruel to keep the

current welfare system. The $305 billion is three times the amount needed

to raise all poor Americans above the

poverty line, and that is in 1 year. We

can just give the poor Americans

money, and it would do more, except it

would keep them on the welfare state

and not encourage them to work.

Since 1965, the juvenile arrest rate

for violent crimes has tripled, Mr.

Speaker, and I think most Americans

would agree it is the condition of what

we gave them the welfare state as it

exists today. Look at the Federal housing projects. You have heard the

Speaker of the House state that no civilization can survive with 12-year-olds

having babies, 15-year-olds killing each

other, 17-year-olds dying of AIDS and

18-year-olds receiving diplomas that

they cannot read. In this information

age we are looking at taking right in

the Library of Congress and putting it

on CD Rom for about $45 million, and it

would be expediential to reprint all of

those books.

b 2000

And we are going to do that. But that

also requires that American children

can read and soak in some of that information. Furthermore, no civilization can survive with parents and

grandparents cheating their children

by refusing to balance the budget and

live within their means.

The welfare state cheats the poor.

The unbalanced budget cheats every

child. The legacy we are leaving our

children is moral and physically bankrupt, Mr. Speaker. But yet there are

some on the other side of the aisle that

would have us say, we are cutting, we

are cutting.

Again I would like to state, in the

last 7 years we spent $9.5 trillion. In

the next 7 years we are going to plan to

spend $11.5 trillion. That is a reduction

to plan to spend $11.5 trillion. That is a

reduction in the growth.
May 16, 1995 CONGRESSIONAL RECORD—HOUSE H 5065

Transforming the welfare state into

an opportunity society for the poor requires a shift from caretaking to caring; welfare reform that emphasizes

work, family and opportunity, volunteerism and spiritual renewal; renewing the basic values of American

civilization, tax incentives for work,

not to stay on welfare; investment and

entrepreneurship.

Look at what enterpreneurship—I

watched a movie on TV late last night.

It was called A Woman, I believe, A

Woman of Means. I cannot remember

the name of the movie, but it was basically about a woman that started off

very, very poor. She had a child out of

wedlock. She worked in the mills. She

worked hour after hour and saved. She

saved every penny, and finally she

went up and bought a little store. She

even made jellies. She made linens. She

bought and opened up a little bigger

store, and pretty soon she bought the

store next to her. She worked night

and day, and pretty soon that gentlewoman became a multimillionaire.

Many of which on the other side of

the aisle would call the rich. But yet

this woman had taken her life and

worked and scraped and saved and done

everything, employed thousands of people; but yet the Clinton administration

would tax her. They would put OSHA

on her back, put rules and regulations

which would cause her to lay off people. We cannot continue to do that, Mr.

Speaker, because growth is a very important factor in balancing the budget.

Reestablishing property ownership

and full citizenship for the poor, look

at Jack Kemp’s original HOPE and

HOME programs that many on both

sides of the aisle embrace. Learning to

focus on education, government protection of the poor against violence and

drugs.

The second strategic improvement is

restoring freedom by ending the centralized bureaucratic

micromanagement by the Government

in Washington. We only get 25 or 23

cents out of every buck into education.

That is the wrong way to go.

The general rule for decisionmaking

for local problems, local government is

generally better than the national government, and the private sector is generally better than local government.

Limit the State bureaucracies, and we

should be trying to attempt to get as

much money as we can down to the

local level.

Mr. Speaker, the third strategic improvement is promoting economic

growth and jobs and prosperity. Alan

Greenspan said, if we balance the budget, and I quote, ‘‘you cannot imagine

the wonderful things that will happen.’’ The soundness of the dollar in

America and abroad will be enhanced.

Interest rates will go down by 2 percent. We will create millions of jobs.

So there is an important factor in

growth, but yet those that would tell

you to balance the budget, capital

gains are only for the rich. I ask you,

Mr. Speaker, look at it logically and I

think you will find another axiom.

The American economy needs to

grow within increasingly competitive

world markets, to increase revenues so

that the Federal Government budget

can be balanced without raising the

taxes. The more people you have working, the less taxes you have to pay

from everybody, and the less taxes you

have to put on business, and the more

people they can hire, and the more people that can pay taxes. It is called macroeconomics, Mr. Speaker. To pay for

the Social Security and Medicare in

the 21st century, that is important

also, Mr. Speaker.

At 1 percent less rate of growth, the

current projection, what does it mean?

Social Security goes into a deficit 13

years sooner by just a 1 percent less

growth. At a 1 percent more growth,

the Federal tax revenues are $716 billion greater, by just 1 percent. That is

a great amount of money, Mr. Speaker,

by any means.

In 7 years the difference between the

high and the low economic growth productions means a $1.2 billion swing in

the size of the Federal budget and the

deficit.

Let me give you a classic example.

High growth rates can be achieved and

sustained on following the right policies, just as good health comes from

good nutrition and exercise. Example:

Japan, through the years of 1975 and

1993, 18 years without a recession, a 4.2

percent annual growth rate. And remember what we said, just a 1 percent

interest growth rate would mean billions of dollars for the budget.

Yet we take a look at the United

States, compared from 1973 through

1993, three recessions we have gone

through in the United States during

that period, a 2.6 percent instead of

over a 4 percent annual growth rate,

and it only gave us a 1 percent annual

personal income increase.

Imagine if America had matched the

Japanese in economic growth rate over

that period of time. The real GDP

would have been 1.8 trillion greater.

Per capita income would have been, listen to this, Mr. Speaker, $8,955 per

worker greater for just matching what

the Japanese did.

Greater American competitiveness

and increased economic growth requires a tax code that favors work, not

Big Government, savings on investment, less litigation, less regulation

and redtape, lean and effective bureaucracies, lifetime learning, entrepreneurial culture, sensible government investments in infrastructure,

government research and development

leading to corporate product development and marketing.

The fourth strategic improvement is

leading the transformation to an information age. The speaker holds up a

tube, a vacuum tube, a tube that you

will fly home with if you are flying this

weekend with the FAA. The United

States is the largest producer of the

vacuum tube. But yet government, by

buying a computer chip, is worth a million vacuum tubes. And yet we need to

step into the future and do that. But

we are not. We have not been able to do

that. Just think about the hundreds of

thousands of dollars by switching to a

computer chip instead of a vacuum

tube in our government.

Over the last 15 years, the Ford

Motor Co. has transformed itself

through new technologies and new culture to qualify and through productivity. Today Ford produces the same

number of cars, two and one half times

the quality, with one half the work

force. Consider what government could

do if it could match that same standard. We could send half of us home, half

of the staff home. I think many of the

American people would support that,

Mr. Speaker.

New breakthroughs do not fit into

the traditional role of government. It

is too hard to change, too long.

Let me tell you about a program and

a change. We plan on merging or doing

away with the Department of Education, eliminating HUD, eliminating

the Department of Energy and eliminating the Department of Commerce.

Eliminating the Department of Education is $4 billion every year that we

could save. Eliminating HUD is $15 billion. Eliminating the Department of

Energy is $20 billion. They say, how

can you give a tax break and give the

money back to the American people?

I heard Russia mentioned today and

that we are spending too much money

on defense. We gave the former Soviet

Union a billion dollars to dismantle nuclear weapons. We gave them another

$4 to $5 billion in nation building, Mr.

Speaker. Last year Russia built five

Typhoon nuclear class submarines, the

Red October type class submarines.

They built a Mig–35 which is superior

to our F–15 and F–14 fighters. They

have an AA–10 missile which is superior to our AMRAAM. They have a torpedo, an underweter torpedo that will

go over 100 miles per hour. Yet we are

giving them money so that they can

fight a war in another country.

We need to invest at home, Mr.

Speaker, and not send the money

abroad. We need to increase our own

economic model in this country, create

the jobs, balance the budget, solve the

Medicare system, and work so that the

babyboomers will have a retirement to

look to.

Debt consumes America. Again, we

are paying nearing nearly a billion dollars a day on just the interest.

The Clinton administration knows

the crisis is coming. Social Security

will face a cash deficit by the year 2013.

The unified deficit will increase unless

taxes are raised or benefits reduced,

and it comes even earlier in 1999: Clinton’s OMB Director Alice Rivlin on 10/

94. But yet the President fails to provide a solution.

I ask the President to engage. Give

us your plan to balance the budget, put

away the 1996 elections. Give us your

plan to save Medicare instead of the

1996 elections.
H 5066 CONGRESSIONAL RECORD—HOUSE May 16, 1995

The Clinton debt numbers actually

underestimate the problem because

they fail to account for four additional

powerful factors, Mr. Speaker. The taxpayers’ burden is paying interest on

the debt, the cost of higher interest

rates caused by the Federal Government’s borrowing, the imminent financial crisis in Medicare, if it is not

saved, and the soon-retiring

babyboomers and their effect on the

Social Security trust fund.

Every citizen will have to pay a lot

more in taxes and interest on the debt

unless we solve the problem. Over the

next 11 years, we will pay as much in

taxes just to pay the interest on the

debt as the entire debt that has ever

existed.

The following Americans will pay a

lot on interest to the debt which builds

up over a time in their lives. Let us

take Sally, in 1995, $187,150. Our spending today saddles our children with

debt tomorrow. That is not a legacy

that I wish to leave my children.

In 1997 we will pay more for the interest on the debt than we will pay for

all of national defense. That is sad, Mr.

Speaker, and that is on the interest.

That is not on the principal. It does

not go into our banks. It goes to foreign interests and foreign subsidies

used against us in economic warfare

such as Japan, such as China, such as

Russia.

Budget deficits raise interest rates

and cost everyone additional money.

What a balanced budget will mean, I

quote Federal Reserve chairman Alan

Greenspan; I think real incomes and

purchasing power of the real incomes

will significantly improve what they

look for in their children and they are

doing better, and they will do better.

Alan Greenspan stated that most

Americans feel that their children will

do worse than they have in their

present lifetimes. That is a sad commentary, Mr. Speaker.

I feel that we are doing the most important things that we have ever done

in our lives. When we are only getting

small amounts of dollars to the problems that we have, when this nation is

headed for economic ruin and a second

rate country economically and we are

going to lose our health care systems,

we have got to do something about it.

I feel proud to be able to take part in

that. I ask my colleagues on the other

side of the aisle, put away the rhetoric,

put away the information that is coming out and join us and embrace it. We

want to save this country for our children, because, again, if we do not, they

are going to owe far more than we

could ever pay: not a legacy that we

want to leave for our children.

Mr. Speaker, I am going to close in

just a second. I am going to basically

state that in the future of this House

and working with the Senate, with

both sides of the aisle, whether we receive a balanced budget amendment or

not, we are going to balance the budget

in 2002.

The gentleman from Ohio [Mr. KASICH] of the Committee on the Budget

has taken every single Member’s information into account in our conference.

The COLA’s for retirements are back

in. The items, the common goal and

the common thread when it comes

down to it, in the year 2002 we will

have a balanced budget in this country,

and what a great thing that will mean,

Mr. Speaker.

fb 2015

THE FEDERAL BUDGET

The SPEAKER pro tempore (Mr.

CAMP). Under the Speaker’s announced

policy of May 12, 1995, the gentlewoman

from Texas [Ms. JACKSON-LEE] is recognized for 60 minutes as the designee of

the minority leader.

Ms. JACKSON-LEE. Mr. Speaker, I

rise today to clarify a budget process

that has been caught up in much controversy and debate. I heard a colleague today at an earlier presentation

suggest that we might do well to engage in dialog and turn ourselves away

from this whole idea of debate and

speak to the issues that I believe the

American people can understand. Coming from the 18th District in Texas, the

fourth largest city in the Nation, Houston, I am going to use as a backdrop to

this discussion this evening as a reminder where our State already finds

itself under the present rescissions bill

that is yet to come back to the House

but already evidences that our State

will lose some $1.1 billion in needs of

family nutrition, aid to dependent children, school nutrition, and Medicaid,

that takes care of the many needs of

our children and our senior citizens.

Interestingly, there is a sharp divide

in the vision and the focus of this Nation. For in the debate and the discourse that we have heard, we have

been told that the deficit will break

the very backs of this country. Yet we

find when we analyze the deficit and

compare it to the GNP in this Nation

compared with other western civilization nations, we have the smallest percentage of deficit of any other country.

This does not mean that we do not

face up to our responsibilities and

begin to confront the hard issues of

deficit reduction. As a new Member of

Congress, I have made that commitment because I have come from that

kind of history. For local governments

do not carry deficits from one fiscal

year to the next. We know the hard response of being able to pay as you go.

I do want to clarify, however, that

many of the local and State governments have a luxury that this country

does not, and, that is, that they separate out their operating budget from

the budget that deals with capital improvements, a consideration that I

have raised as a possible direction for

this Nation to take, ongoing debt versus immediate debt.

In any event as we begin to dialog

about this deficit reduction and this

budget resolution, which has been

characterized as a resolution to solve

the budget deficit by the year 2002.

Juxtaposed to that representation is

the inquiry of where the Democrats’

budget proposal might be.

To clarify, it is the responsibility of

the majority party in this House, of

course, to present a budget. Certainly

that was to have been done by April 15

and, of course, we did not receive such

a resolution until last week. Not only

did we not receive it until last week,

about the second week in May, but we

now are to address this resolution and

find a common bond and resolution in

a matter of less than 48 hours. This will

be debated on the House floor tomorrow, Wednesday, and voted on before

the end of this week. There will be

Democratic proposals. There will be

amendments that will be offered. And

so the responsibility that is charged to

those of us who are Democrats is being

upheld. It is unfortunate that the tone

of the debate is suggesting that one’s

responsibility has not been taken care

of.

But the sharp divide over which direction this Nation should go causes

me to rise this evening to say that

clearly the Republican Party needed to

take a couple of more months in order

to strike a more effective chord of bipartisanship that would help to approach the deficit reduction that we all

would like to have but, as well, create

a vision of opportunity and challenge

and success for this Nation.

Interestingly enough as we were

being cajoled into thinking that life

was all right in the late 1920’s and the

early 1930’s under the leadership of the

Republican Party as we moved into the

deep recesses of depression, many people would have thought of a variety of

ways to increase productivity and to

get this country out of the depths of

depression. It, however, took a creative

Government under the leadership of

Franklin Delano Roosevelt to both answer the question of debt but as well

answer the question of productivity.

This country today is crying out for

productivity. It is crying out for a need

of jobs, for the engine to run corporate

America to produce jobs, for the domestic energy industry to be refueled

and retooled. It is crying out for those

who would seek to bridge themselves

out of dependence into independence an

opportunity to do so. This budget does

not speak to that. In fact, it undermines that.

While their proposal would provide

for a balanced budget by the year 2002,

it would abolish several vital Cabinet

departments. Low and moderate income Americans and particularly children would be impacted. According to

the new Washington Post/ABC News

poll, if we are to be pundits of polls, my

opinions are apparently shared by a

majority of Americans. Sixty percent

of poll respondents oppose abolishing

the Education and Energy Departments and 56 percent oppose shutting

down the Commerce Department,

which, by the way, has been a most