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[Congressional Record Volume 141, Number 81 (Tuesday, May 16, 1995)]
[House]
[Pages H5061-H5066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                THE BUDGET AND THE CONTRACT WITH AMERICA

  The 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.

                              {time}  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 
[[Page H5062]] 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 low-income 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 
[[Page H5063]] 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 8\1/2\ 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.
                              {time}  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.
  [[Page H5064]] 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.
                              {time}  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.
  [[Page H5065]] 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.
  [[Page H5066]] 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.

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