Date: 1982-08-19
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

I thank the Senator from Louisiana. Mr. President. the conference committee has worked long and hard to make the tax bill more fair to working Americans and to the elderly. Unfortunately. the conference did not eliminate the most unfair provisions. This tax bill still means that the average taxpayer must pay more in medical expenses. before he can deduct them from his taxes. This tax bill still triples the tax on telephones. And together. these two provisions will add more than $7 billion to our taxes over 3 years. The conference bill still increases the cost of medical treatment for the elderly. striking hard at those who most need medical attention and those who can least afford it. Senate Democrats offered a plan to stop the tax increases and spending cuts aimed at working Americans. small business people. the elderly. and small farmers. We would have spared middle class taxpayers new telephone taxes. new cigarette taxes. new unemployment taxes and cuts in their medial and casualty loss deductions. We would have saved American middle rlass nearly $25 billion in increased taxes and medical bills by delaying the full 1983 tax cuts for those who make more than $78.000 a year. and partially delaying that final cut for those making between $46.500 and $78.000. Those making $46.500 and under. annually. would still get the full 10 percent cut in July 1983 under the fairness amendment offered by Mr. BRADLEY. myself. and other Senators. Had that amendment been adopted I would have supported the bills passage. Mr. President. less then 8 percent of American taxpayers make more than $46.500 a year and only 1 percent of our taxpayers make more than $78.000 a year. To protect these very privileged individuals. this administration decided to impose nearly $25 billion in tax increases and health care cuts on the rest of the taxpayers. This tax bill has been supported with great vigor by the administration. The tax increase is being fought for by the same President who addressed a joint session of Congress in this years state of the Union. saying: I will seek no tax increases this year. and I have no intention of retreating from our basic program of tax relief ... I will stand by my word. I would like to take this administration at its word. but I cannot. This administration has flipflopped. It has broken its promise not to raise taxes. and it is opposing the will of the American public. as demonstrated in todays Washington Post/ABC poll that found the people against this tax increase 54 to 37 percent. We have heard the President say that this bill is necessary to balance the budget and to bring on economic recovery. But this is a far different story than the one he told us during the state of the Union. Then. he said: Raising taxes wont balance the budget. it will encourage more Government spending and less private investment. Raising taxes will slow economic growth. reduce production. and destroy future jobs. . . . So. I will not ask you to try to balance the budget on the backs of the American taxpayers. Well. I agreed with the President in January. and unlike him. I am still against tax increases parading as a path to recovery and low deficits. Lasting reductions in Federal deficits can only come in the wake of strong economic growth and full employment. I have introduced a bill to bring deficits down and promote economic growth by reducing the level of interest rates to their traditional levels above the rate of inflation. This bill is cosponsored by 33 of our colleagues and is gaining recogniti6n and support on both sides of the Capitol. We must never forget that high interest rates are a direct cause of high deficits and that by lowering interest rates we can lower our deficits. This is true in two ways. First. high interest rates depress the economy. increase unemployment. and thereby cause both lowered tax revenues and higher spending for unemployment benefits. It has been conservatively estimated that each additional percentage point of unemployment adds $25 billion to the deficit. This. the 2.4 percentage points that the unemployment rate has climbed during the Reagan Presidencyfrom 7.4 to 9.8 percenthas increased our defict by $70 to $75 billionabout twothirds of what the administration projects it to be in fiscal year 1983. Second. high interest rates significantly increase the interest we must pay on our national debt. In fact. interest on the national debt is the fastest growing element of the Federal budgetfaster growing. for example. than either defense spending or social security. Ten years ago. interest payments took up 6 cents of every dollar spent by the Federal Government. For 1983 those interest payments will have more than doubled. to 13 cents out of every Federal dollar. Clearly. to lower interest rates would directly and dramatically lower our Governments annual deficits. We all want a balanced budget. and lower interest rates would be a vital first step. Mr. President. we cannot accept the premise that the only answer for inflation is recession. This is not an .ither/ or choice. We have had economic growth without inflation in this country. and we can have that again. but only if we pursue balanced. sensible policies that will lower interest rates. This brings forward another serious problem with the tax bill before us. There have been many claims that the conference report before us contains provisions making additional unemployment benefits available to every State. Some have used that as a reason to support the bill. including the President himself in his televised message. Mr. President. there is no doubt that we have a terrible. tragic. unacceptable unemployment situation in this Nation. There also is no doubt that we must provide unemployment benefits for a longer period of time than current law allows in those States with the highest rate of unemployment. Last May I introduced legislation to do just that. The conference report before us claims to do much for the unemployed. but for the great majority of States it is guilty of deceptive advertising. Before the conference began. Mr. President. the Senate voted 84 to 13 to request that the conferees address two major unemployment insurance issues: First. they were asked to remedy provisions in existing law that are causing States with high unemployment to lose eligibility for the existing second tier of benefits-"extended benefits." Second. they were asked to provide a third tier of "supplemental benefits" to last no less than 10 weeks nor more than 13 weeks. The conference committee simply ignored the first of these two requests. As a result. by the end of December. the second tierextended benefits for 13 weekswill cease to be available in all but seven or eight States. My own State of West Virginia may well lose eligibility for these 13 weeks of benefits in December or thereafter. even if total unemployment there remains high. The conferees did establish a supplemental benefits program. but its duration ranges only from 6 to 10 weeks. depending on the States unemployment rate. The net result. Mr. President. is that by the time December arrives. only seven or eight States will be .eligible for more than 36 weeks of unemployment benefitswhereas 38 States have been eligible for 39 weeks at some point in the current quarter. For at least 30 States. that is a reduction in duration of benefitsnot the increase the Senate unequivocally said it believed is necessary. Yet. another major flaw in the bills unemployment isurance provisions is the fact the 6 to 10 weeks of supplemental benefits it establishes will expire on March 31 of next yearno matter how high the unemployment rate is in the Nation or in any individual State. After that point. only five or six States will be eligible for more than 26 weeks of benefits. Mr. President. the unemployment insurance provisions of the conference report are a thin. watery salve being applied to a gaping wound. They are completely insufficient. They are unacceptable. I do not believe this Congresseither the House or Senatewill settle for these provisions as the sum and substance of our efforts to help the 10.8 million unemployed persons In this Nation and their families. Without question. these provisions give absolutely no incentive or reason to vote for this conference report. For the reasons I have stated I am against the tax increases in this bill aimed at our working men and women. I oppose this bill reluctantly. because I think there are some important loophole closings here. but they do not outweigh the unfairness of imposing new taxes on working Americans to spare those better able to afford a delay in new tax cuts. We have heard that this tax bill is not the largest tax bill in peacetime history. We have heard that it is hardly any tax increase at all. In fact. we are almost led to believe that this tax bill is devoid of tax Increases. Doubling the tax on cigarettes from 8 cents to 16 cents is certainly a tax increase. Tripling the tax on telephones is certainly a tax increase. Raising the tax on airplane tickets by 60 percent and adding a 5 percent tax on airfreight. and a $3 tax on all international travelers. are certainly tax increases. Small businessmen are having their taxes increased on unemployment insurance. When we raise the minimum medical expenses a family must suffer before any deductions can be taken from 3 to 5 percent. that is certainly a tax increase. It is a tax increase when we raise the minimum casualty loss a family must endure before deductions are available from $100 to 10 percent of their income. Let us not kid ourselves. or the American people on this. This bill raises taxes. This bill raises taxes on middle class and lower class working men and women. small business people. the elderly. and the veterans. and it raises them on the theory that new taxes will help us balance the budget and escape from a recession. It is a faulty theory. and I reject it. I do not believe that this bill is entirely bad. I do not believe that people should ever escape paying their fair share of taxes. nor do I believe that businesses should be faced with negative tax rates when they are making healthy profits. But the unfair aspects of this bill. in my judgment outweigh the small progress made against outrageous loopholes. I will vote against this bill. I yield back the remainder of my time.