Date: 1982-08-19
Speaker: PHILIP M. CRANE (republican)
Chamber: H

Mr. Speaker. I rise in opposition to the tax bill. Winston Churchill once stated that taxing your way to prosperity is like standing in a bucket and trying to lift yourself up by the handle. Our constituents understand that we cannot tax our way to prosperity. This bill is being foisted upon the Nation as a measure that will stimulate economic recovery. It will not. Let me list my objections to the bill. H.R. 4961. in order: First. it is unconstitutional legislation. Article I. section 7 is explicit about the exclusive House responsibillty for initiating money bills: AU bills raising revenue shall originate In the House * * * . (emphasis added). In this instance. the Senate took a miscellaneous tariff bill reported out of the House that reduced revenues. struck everything after the enacting clause and then proceeded to draft one of the largest tax raising bills in history. Counsel for the Ways and Means Committee in the House described this action as unprecedented. troublesome. and possibly an invitation to court challenges. I. in fact. have filed a complaint. along with 18 colleagues9 Democrats. 9 Republicanscharging the principal parties involved in this action with a violation of the Constitution. Second. It is the wrong economic medicine. Neither liberal Keynesians nor conservative free enterprisers believe it Is sound economics to levy massive tax increases during an economic downturn. Such action is a recrudescence of the economic decislonmaking that guided President Hoovers advisers early in the Great Depression. It was the wrong policy then. it is the wrong policy now. Third. it rests upon faulty economic assumptions. The President has been told this will pull down interest rates and thus lead to an economic upturn with increased employment. I cannot. offhand. recall any time that massive tax increases led to a lowering of interest rates. Moreover. with the dramatic decline in the prime rate that has taken place this past monthand that at a time when the outcome of this tax battle was still very much in doubtit would appear that the administration changed its game plan just as it was beginning to work according to the expectations of Its proponents. Further. the President was told. as a condition for getting his support for this tax Increase. that he would get a $3 reduction in spending for every $1 in tax increases. The assumptions about future spending. upon which this formula was concocted. havebeen effectively disposed of in the Wall Street Journal editorial. August 13. 1982. entitled "The Budget Scam." The savings allegedly to be made are simply reductions from theoretical projections about future expenditures. The bottom line of the editorial Is that* "* * .* Congress clearly has no Intention of curtailing Federal spending." The truth is. as Congressman KEMP noted In a U.S. News & World Report interview. August 23. 1982. the President will be lucky to get a $0.25 reduction In spending for each $1 increase in taxes. The President can control spending without taxes through a generous exercise of his veto power. 146 votes in this body and a veto is a maJority. Fourth. It is. for -the most part. unwise tax legislation. Some forms of taxation. while soaking up more revenue from the private sector. nevertheless have some beneficial conse. Quences. For exampleand I am not recommending thisif one raised all of the anticipated revenue under this bill from one sourceauch as a tax on imported oilIt would: First. stimulate increased exploration and discovery at home. second. it would increase the worlds oil supply thus pressuring prices downward. third. it would accelerate the goal of independence from unreliable and unstable sources. and fourth. it would cause increased con-. servation because of higher prices. By contrast. the current tax bill attacks savings and investment as well as reducing corporate earnings. Moreover. it has counterproductive features. such as the assault upon waiters. waitresses. bartenders. and the owners of eating and drinking establishments that can only be viewed as harassment along with additional paperwork. And the reduction of the medical deduction. while affecting everyone equally. affects those lowest on the economic ladder most. Fifth. it sends confusing signals to the public. The administration. last year. committed us to a policy of reduced Government spending and tax cuts. That policy has been overwhelmingly endorsed by the American people. And the President achieved great successes in attacking the most serious economic problems he inherited from the Carter years. Inflation was reduced from a high in 198(1 of almost 14 percent to less than 5 percent. The prime rate in 1980. almost reached 22 percent and it Is now down to 14 percent. The rate of growth of Federal spending has been slowed. notwithstanding the objections of Speaker ONam.T over budget reductions recommended by President Reagan. But Augu8t 19. 1982 CO at the same time these gains were recorded. unemployment rose from 8 million people to 10 million people. The excesses of the past could not prevent this. Nor could the economic situation be reversed overnight. But now the assessment of our enduring economic problems by the tax and spend crowdwhich conveniently overlooks the enormous progress President Reagan has made since taking office just a year and a half agowould seem to be confirmed by what is interpreted as an abandonment of the Presidents initiatives of last year. The President has told us he is not abandoning his program and I believe him. But he has modified it enough to satisfy critics who never supported his program. The result is too many citizens do not know what to believe. Eightyseven percent of the 15.000 respondents to my July questionnaires indicated their support of President Reagans economic recovery program calling for reduced spending and lower taxes. I share their commitment to that program. For that reason. I will vote against the current tax bill. In a meeting with the President 2 weeks ago. I Indicated my enduring commitment to President Reagans program of last year. But I also told him that I was not elected to Congress to raise taxes. At a time when the Government is consuming the largest portion of the labors of our people in historyincluding World War III cannot in good conscience support legislation that will aggravate that problem. The creative talent and industry of the American people has rewarded them with a standard of living unequaled in history. That reward was not produced by a benevolent government embarked on policies of redistributing income. Nor was it produced by preserving the offices of elected officials who have appealed for votes with costly programs designed to reward special interest groups. The answer to our existing problems remains unchanged: It is President Reagans policies of budget and tax reduction. In a letter President Reagan sent to supporters on April 16 of this year. he stated: We must adhere to these reductions in federal spending and taxes over the next several years to finally bring down inflation and high interest rates. In an elaboration of his program before the Los Angeles County Board of Supervisors on March 3 of this year. President Reagan said: Bear in mind. they [deficits] would not be significantly reduced. if at all. by raising taxes. which is the common element in most of the curbthedeficit proposals that are being bandied about.... President Reagan was right. the policies he initiated are still right and for these reasons we must defeat this conference report. This battle will not easily be won..-but we must persevere. "If not now. when? If not us. who?"