Date: 1998-10-12
Speaker: BOB SCHAFFER (republican)
Chamber: H
State: Colorado

Mr. Speaker. last week the Treasury Department announced that the Federal budget is in surplus for the first time since 1969. Only 2 short years ago the President had submitted a budget with $200 billion deficits as far as the eye can see. as many will recall. What happened? There are a lot of Americans who do not care much who gets the credit for the current fine state of our economy. and then tend to take the President at his word when he takes the credit for the budget surplus we have at least achieved. But it is important to understand how we got here so that we may continue on the path of sound economic policy in the future. When the country was faced with large. chronic deficits at the beginning of the 1990s. Congress faced a choice. To cut the deficit. lawmakers essentially had two choices. cut spending or raise taxes. President Clinton and his liberal allies in Congress naturally chose to raise taxes. Congress at the time was still under the control of the Democrat party. and so President Clinton was able to pass the largest tax increase in American history. Republicans. on the other hand. wanted to reduce the deficit by cutting spending. Republicans believe that government is too big. in fact. way too big. They believe that Washington wastes too much of the taxpayers money. One would think that this is an obvious point. After all. even the President himself said. in his 1996 State of the Union address. that the era of big government is over. If only that were true. We can see now that this declaration was nothing more than words. Big government is alive and well. in fact. bigger than ever. In fact. the Democrats have come back with still more ways to increase the size and power of the government every year since. While we can say that government is not quite as big as it would be if the Republicans had not taken control of Congress in 1995. the truth is that government continues to grow. Any attempts to cut government. no matter how wasteful and counterproductive the program. the liberals will immediately attack them as extremist or meanspirited. It has never occurred to them that it is perhaps meanspirited on the part of politicians to have so little respect for the working mans labor that Washington takes between onefourth and onethird.of the middle class familys paycheck just to pay off Uncle Sam. So that leaves us with the question. how did we go from $200 billion deficits as far as the eye can see only 21 years ago to the budget surplus we now enjoy. It is true that there have been some reductions in spending. but almost all of them have come out of one place that it should not have come out of. the Pentagon. Defense spending is now dangerously low. and our military forces are not what they used to be. but liberals. in their boundless faith in human nature. ignore history and simply do not believe in the fundamental precept of peace through strength. As for other spending. Republicans did manage to limit the number of new spending initiatives by President Clinton and the Democrats over the past few years. But the primary reason why the budget is in surplus today is because revenues are way. way up. Liberals will point to the Presidents 1993 tax increase as the reason revenues are up. hoping that we will not examine the budget tables to see if in fact it is true. Revenues are up primarily from the number of people who are taking advantage of low tax rates on capital gains. the part of the economy that is the lifeblood of a dynamic. growing economy. President Reagan cut the tax on capital gains and the Republicans cut it again just last year. Savers. investors. entrepreneurs. and other job creators have taken advantage of that. The economy is benefiting from jobs. Jobs are being created and revenues have soared. That has been the primary reason why the budget is now in surplus. when it was deep in red only a few years ago. I would invite any of my Democrat colleagues who dispute these findings to come forward and show me otherwise. Perhaps the liberals have access to another set of government documents with a different set of statistics. but if they use the same Treasury figures that I do. they will have to admit that the Reagan tax cuts and the Republican tax cuts are the most significant reason behind our current economic boom. With all due credit to Alan Greenspan. chairman of the Federal Reserve. for his outstanding stewardship of monetary policy. we should mostly thank President Reagan for turning around an economy that was in the ditch. We are still benefiting from his decision to make the United States a lowtax. lowregulation economy. and thus able to compete in the world better than any other. The Republicans forced President Clinton to renounce his own budget with $200 billion deficits as far as the eye can see. We are grateful that he at least accepted the need for the government to balance the budget and put its financial house in order. We would like to encourage him to continue on this path. Especially if he accepts the view that Washington can still afford to cut spending. cut taxes. and make good on its promise that the end of big government is over.