David Dreier

Mr. DREIER

Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, James Madison regularly talked about the importance of individual liberty, and quite frankly, we have seen the reach of the Federal Government in this crisis that we are facing right now. The fact that the F-100 truck cannot be certified, the fact that the Disney-Cap City's merger cannot go through demonstrates how far- reaching the Federal Government is, and our goal of trying to reduce the size and scope is obviously a positive one. Mr. Speaker, I yield 4\1/2\ minutes to the gentleman from Sanibel, FL [Mr. Goss], my very good friend and the distinguished chairman of the Subcommittee on Legislative and Budget Process. (Mr. GOSS asked and was given permission to revise and extend his remarks.)

Mr. DREIER. Mr. Speaker, I yield such time as he may consume to the gentleman from Glens Falls, NY [Mr. Solomon], the chairman of the Committee on Rules.

Mr. DREIER. Mr. Speaker, this rule provides for taking from the Speaker's table H.R. 1643, with the Senate amendment, and consideration in the House of the motion printed in the Committee on Rules report accompanying this resolution. The Senate amendment and the motion in the committee report shall be considered as read, and all points of order against the motion are waived. The rule provides for 1 hour of general debate on the motion, equally divided by the chairman and ranking minority member of the Committee on Appropriations. The rule further provides that the previous question is considered as ordered on the motion to final adoption without intervening motion or demand for division of the question. Mr. Speaker, from the 1st day of the 104th Congress a year ago yesterday, the new majority in the House has maintained that balancing the Federal budget in 7 years is our top priority. To fail in this effort is to let down America's families, especially our Nation's children They are the ones that will pay the bill for continuing the tax, spend, and deficit policies that Washington insiders have maintained for decades. The bill just for interest payments on our debt is approaching $187,000 in lifetime tax payments per American child. That is why we must change the direction of this Government. Mr. Speaker, the President and Congress made a commitment on November 20 of last year to enact a 7-year balanced budget using honest economic assumptions. The balanced budget was to reform welfare and provide a tax cut that lets families keep more of the money they earn. The balanced budget was to provide an economic stimulus to finally get family incomes moving upward, something that the Clinton administration unfortunately has failed to do. Finally, the balanced budget was to increase spending on health care, education, and veterans, while maintaining a vibrant national defense. Mr. Speaker, the majority in this House made one major mistake in our efforts to reach a balanced budget agreement to save the future for our children. That mistake, Mr. Speaker, was believing the President of the United States. We believed the President when he said he would balance the budget in 5 years. We believed him when he said he would support a 7-year balanced budget. We even believed the President meant it when he signed the last continuing resolution saying that a 7-year balanced budget would be enacted by the 1st session of the 104th Congress. At this point, Mr. Speaker, it is clear that the President is very committed. He is committed to saving Washington, not to saving Medicare. He is committed to balancing his poll numbers, not to balancing the budget. He is so committed to business as usual that he was willing to see Federal workers thrown out on the street, rather that putting a balanced budget on the negotiating table. Mr. Speaker, one thing should be very clear at this point: Those of us committed to balancing the budget will not go along with business a usual. This Congress and this country are well into uncharted territory in this budget showdown because there is finally a majority in Congress that will say ``no'' to Washington's deficits and Washington's spending. We are not willing to just declare victory and draw up a phony budget that will result in the same type of debt and waste in 2002 that we have today. The President has refused to lead, choosing cheap political rhetoric over a balanced budget. Therefore, Congress has taken the lead. The President has refused to lead to find common ground on appropriations bills so that Federal workers can be paid. Therefore, we are leading with a bill to put Federal workers back on the job with pay through January 26. Mr. Speaker, we must be clear. This is not a business-as-usual continuing resolution. This bill will only fund targeted Federal programs which enjoy a bipartisan consensus of support. The bill funds some of those programs through March 15; others, through the end of the fiscal year. If the President would really like to satisfactorily see all Federal programs funded, he should offer his version of a 7-year balanced budget using honest numbers. Mr. Speaker, over the past several days, while negotiations have been going on, I have had a little time, because I have not been in the midst of those negotiations. I have been spending some of that time rereading the Federalist Papers. I am more committed than ever to the belief that the Congress does not work for the Government. The Congress is here to serve the American people. How would James Madison, Alexander Hamilton, and John Jay react to a Congress so beholden to Government programs that its primary duty was to ensure that Government is free to spend taxpayer money? Madison believed that the primary role of Congress was to serve the people by ensuring a just society that protects individual liberty. Our debt- ridden status quo Government is not living up to that mission. Mr. Speaker, our first duty is to deliver a balanced budget to America's children. The President was prepared to sacrifice Federal workers to maintain the bureaucracy that he values more than the people who serve in it. While we will balance the budget, we will do it without causing undue pain to Federal employees and those who receive necessary Federal services. Mr. Speaker, I urge my colleagues in a bipartisan way to support this rule, and I reserve the balance of my time.

Mr. DREIER. Mr. Speaker, for purposes of debate only, I yield the customary 30 minutes to the gentleman from South Boston, MA [Mr. Moakley], pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purposes of debate only. (Mr. DREIER asked and was given permission to revise and extend his remarks and to include extraneous material.)

Mr. DREIER. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 334 and ask for its immediate consideration.

Mr. DREIER

Mr. DREIER. Mr. Speaker, what an incredible irony, this budget crisis that we are facing and have been going through for the past several weeks. The irony is that we have found that devolution is working because this crisis has created an opportunity for it. We saw the President in his news conference the other night talk about the pain that will be created, has been created, with this Government shutdown, the Meals on Wheels Program in jeopardy, unemployment benefits not being paid, Medicare recipients not being reimbursed, Medicare providers not being reimbursed. Mr. Speaker, the fact of the matter is that was nothing more than a sky-is-falling speech that the President gave. This morning on National Public Radio a very interesting piece was provided in which they went around the country and talked in a number of States with those involved with the Meals on Wheels Program, Medicare providers, those who were dealing with the unemployment benefits issue, and State and local governments are in many instances, not all, but in many instances, picking up the responsibility there. So we have, in fact, got a tremendous opportunity to deal responsibly with this issue, and devolution is going to work.

Mr. DREIER

Mr. DREIER. Mr. Speaker, President Clinton can be rightly criticized for failing to keep his promise to negotiate a 7-year balanced budget using honest numbers. However, I applaud his willingness to support a capital gains tax cut because it will be critical to the success of any future agreement. The President's support for capital gains tax reduction is an acknowledgment of what every economist who studies the issue already knows: capital gains tax reduction is a win-win-win proposition. It will spur hundreds of billions of dollars of additional capital formation, create jobs, and promote economic expansion. It will bring immediate relief to small investors, small businesses, workers, retirees, and economically distressed communities. In addition, it will increase tax revenues to government treasuries. And the lower the rate, the greater the benefits. In deciding how to reduce the capital gains tax rate at the Federal level, I share the view of Federal Reserve Board Chairman Alan Greenspan, who said: ``It is easier to make the case to eliminate it entirely than it is to merely reduce the rate.'' That is why Representative Tauzin and I, on behalf of the Zero Capital Gains Tax Caucus, are today introducing H.R. 2861, the Tax Fairness, Economic Growth and Fiscal Responsibility Act. Effective January 1, 1996, it establishes a zero tax rate on any long-term capital gain recognized on the sale or exchange of any property. There are three major reasons why zero is the appropriate capital gains tax rate. First, it will eliminate the bias in the capital gains tax against lower- and middle-income taxpayers. The American dream is to work hard, buy a home, maybe build a small business, save for retirement, and eventually pass along something to children or grandchildren. In short, Americans strive to build a better future. Despite the political charge that the capital gains tax is a tax on the rich, it is actually a tax on those who seek the American dream. In looking at data on tax returns from 1991, William Beach, a tax analyst at the Heritage Foundation found that half of all capital gains were earned by households with incomes from other sources under $100,000. Of those, 27 percent of taxpayer households with capital gains contained taxpayers over the age of 65 or blind. These taxpayers, according to Beach, had an average income of $43,637. In explaining why lower and middle-income taxpayers will benefit most from capital gain tax reduction, Beach stated: When critics claim that capital gains go mainly to the wealthy, they mislead the public by including the gain when citing a person's income. In this way, a retiree living on a $12,000 Social Security check who realizes a $30,000 capital gain one year on the sale of his house is classified as a ``person with a $42,000 income who receives a capital gain.'' By this logic, of course, the only people who win $1 million lotteries are millionaires. The bottom line is that small business owners, middle-income families, and small investors are the least able to keep capital tied up and, therefore, pay the bulk of the capital gains tax revenue. The second major benefit of a zero capital gains tax is increased economic growth leading to new job creation and increased living standards. Had such a tax rate been implemented in 1994, it would by the year 2000 result in an additional GDP growth of $1.5 trillion, 1.1 million new private sector jobs, and an $1,884 increase in average annual wages for all workers. As Alan Reynolds of the Hudson Institute noted in testimony before the Senate Finance Committee last February: Once we abandon the quaint habit of defining capital gains as no different from a weekly paycheck, economics offers no other clear justification for taxing capital gains at all. No economist has ever dared to suggest that a capital gains tax does no damage to the economy. Completely eliminating the tax on capital gains might sound far- fetched, but its not a new an idea. Back in 1978, when stagflation forced creative thinking, Digital Resources Inc. [DRI] did a static Keynesian econometric analysis of a zero capital gains tax. DRI predicted that eliminating capital gains taxes would boost GNP by $200 billion, increase capital formation by $81 billion, and create 3 million new jobs. Just as important from a 1990's perspective, DRI predicted that a zero capital gains tax would increase net Government tax revenue by $38 billion over 5 years. Fortunately, we do not have to rely on economic forecasting models alone to observe the economic benefits of capital gains tax reduction. Our Federal system has permitted States to become ``laboratories of democracy'' in which creative and sometimes controversial public policy proposals can be implemented on a smaller and more manageable scale. Over the past few years, a number of these laboratories have tested the effects of capital gains tax rate reductions on statewide economic growth and revenue. The results of these experiments have been greater economic activity, stronger employment, and the generation of increased State tax revenues. Three States in particular that have recently experimented with capital gains tax rate reduction--Mississippi, South Carolina, and Wisconsin--have, in each case, seen an increase in economic growth, job creation, and State tax revenues. In May 1994, a fourth State, Colorado, reduced its capital gains tax rate to promote increased investment and economic activity. Befitting their role of ``laboratories of democracy,'' each State has reduced the cost of capital in different ways. Mississippi and Colorado completely eliminated State taxes on capital gains. It is reported that every $1 million in new investment in Mississippi creates $2.2 million in economic growth and 120 new jobs. In 1989, South Carolina cut its capital gains tax rate from 7 percent to 4 percent. Since that time, the State has enjoyed stronger than average economic growth and job creation. Wisconsin has encouraged investment in that State by implementing a 60 percent exclusion of the value of any capital gain from taxation. The third major benefit of a zero capital gains tax rate is the promotion of fiscal responsibility. While the static forecasting model predicted a cumulative $490 billion revenue loss between 1994 and 2000 as a result of a zero capital gains tax rate, that estimate does not take into consideration additional income, payroll, and excise tax revenues from $1.65 trillion in added economic growth over the period. As a result of greater economic activity, a zero capital gains tax rate, had it been enacted effective in 1994, would actually produce a net increase of $25 billion in revenue to the Federal and State governments through the year 2000. Mr. Speaker, one would think that the combined benefits of tax fairness, economic growth, and increased Government revenues would be too much for Congress and the President to resist. Yet today, we continue to perpetuate an enormously damaging tax myth that virtually every other country with a significant economy has abandoned. Therefore, I urge my colleagues to join me in ending this antifairness, antigrowth, anti-American dream policy by cosponsoring H.R. 2861.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I want to take just a few moments, as we prepare to file a rule, which will be considered here on the floor tomorrow morning at 10 o'clock, to talk about a very important issue to me. I am privileged to represent one fifty-second of California. I am one of 52 members of the California congressional delegation, and I want to discuss the impact of our attempt to balance the budget on the largest State of the Union. It clearly would have an incredible impact. It seems to me that we need to look at what balancing the Federal budget would do to the State of California. If the Federal budget is balanced in 7 years, $140 billion in debt, California's share of the $1.2 trillion in additional Federal borrowing, would not burden our future. Each of California's 11 million children will not see their share of the Federal debt increased by $13,000 over the next 7 years. The balanced budget bonus of lower interest rates will create jobs, free local and State resources and increase the buying power of California families. Now, Alan Greenspan, the Chairman of the Federal Reserve Board, has stated on several occasions recently that the 2 percent drop that we have seen in interest rates is directly related to simply the discussion, the commitment and our quest for a balanced budget. Now, lower interest rates, and by the way, there is a direct line that can be drawn if one looks at election day 1994 downward, because this question for a balanced budget has led interest rates to drop further, and I am convinced that if we actually do put into place a balanced budget that we will see a further drop, and this has been predicted by many, of a percentage point or two. Lower interest rates will create over that 7-year period 497,000 new private sector jobs in California. The cost of borrowing by the State of California will be reduced by over $3 billion, resources that could be used to address real needs in California, which would provide a benefit of $262 in a State tax cut per household. Now, the point being that as interest rates drop, Mr. Speaker, we clearly would see a very beneficial impact in decreased interest burden paid by our State. The cost of borrowing by local governments within California will be reduced with the 12 largest cities in California seeing a savings of $1.38 billion alone, resources that, again, could be used for education, health care, and local law enforcement. The average California family that owns a home will save $4,757 per year through lower mortgage interest rates, freeing family income to provide for themselves a higher standard of living. A California student, with the average college loan in our State of California, would save $858 over the life of a 10-year student loan, if we were to bring about a balanced budget with those lower interest rates which would follow. California families will obviously pay less in Federal taxes. 6,138,000 California children live in families that are eligible for the $500 per child tax credit, if we put our package through. The Republican family tax relief will reduce the taxes of California families by $21.6 billion over the next 7 years, money that is earned by parents and can be spent by the family. Spending on priority social programs increases dramatically under our Balanced Budget Act. Total Federal spending in California would increase from $177 billion in fiscal year 1995 to $215 billion in 2002, an increase of 22 percent. Over the past 7 years, the Federal Government's spending in California was $1.11 trillion. Under the Republican balanced budget plan, total Federal spending in California will be $1.46 trillion, which is an increase of 31 percent. Social Security payments to Californians will increase $15.9 billion over the next 7 years under our balanced budget plan, and Federal welfare spending, and that means food stamps, child care, cash welfare, child protection, school nutrition, SSI, the earned income tax credit in California, that will increase by $40 billion over the next 7 years under our plan. Mr. Speaker, wasteful Washington mandates are lifted, giving flexibility to Sacramento and local governments to direct Federal and State resources to its highest priorities and to do this in the most efficient manner. Medicare payments to Californians, Mr. Speaker, will increase $9.2 billion over the next 7 years. Medicare spending per senior will increase from $4,800 to $7,100 per beneficiary by the year 2002. California seniors will also be given a choice in the health care plan that they receive, rather than having their health care coverage dictated by Washington politicians and bureaucrats. Mr. Speaker, Medicaid payments to California will increase by $3.4 billion over the next 7 years. The Federal Government would also reimburse to California hospitals swamped by illegal immigrants $1.6 billion of the cost of emergency health care services, which currently is a cost placed on California hospitals and the California taxpayers. Lifting Washington mandates, increasing the cost of health care and diverting resources to lesser priorities, including mandates to provide health care to illegal immigrants and drug addicts, must be lifted as part of any plan to restrain the growth of Federal Medicaid spending in order to continue to provide equal health care to Californians who are in need. Obviously, Mr. Speaker, in closing, it is very clear that moving ahead with our Balanced Budget Act would, in fact, dramatically increase by 22 percent overall the level of spending for California over the next 7 years. So, we have not seen these Draconian cuts which many people have labeled our Balanced Budget Act as, and, in fact, we need to move ahead as expeditiously as possible because it is clearly a win/win for the people of California.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I move that the House do now adjourn.

Mr. DREIER

Mr. DREIER. If the gentleman would yield, I think we as Republicans made a mistake. The mistake that we made was in believing that when on November 20, 1995, just about 6 weeks ago when this agreement was signed, we believed that the President would come forward and, in fact, offer this balanced budget with the honest numbers, the Congressional Budget Office scoring. Our mistake was in believing that, because tragically it has not happened. That is what has created this high level of frustration.

Mr. DREIER. My friend is absolutely right that there has been very clear confusion on this issue because we saw in November, on the 20th of November, a commitment made by the President that he would come forth with a balanced budget that would use what we describe as honest numbers in Washington lingo. It is the Congressional Budget Office scoring, and he said when he stood behind where my friend is in his first State of the Union Message on February 17, 1993 that he believed the most honest numbers and responsible scoring procedure was to utilize the Congressional Budget Office, and tragically, while that indication was made when it was signed by the President November 20, and we have failed to receive that balanced budget, it has understandably created a high level of frustration, not only for those who serve in the Congress, but for those Federal workers who have been furloughed and the American people who have been anticipating a response.

Mr. DREIER. Mr. Speaker, I would like to inquire, it was not in a DeSoto dealership, since I know that my friend drove around his district in a DeSoto automobile in the last campaign.

Mr. DREIER

Mr. DREIER. Absolutely. I thank my friend from West Sacramento for yielding. I would simply like to, in behalf of the California congressional delegation represented here on the floor by the gentleman from California [Mr. Riggs] and the gentleman from California [Mr. Kim] and others, and most especially my colleague, the gentlewoman from California [Mrs. Seastrand], would like to inquire of the majority leader what we could anticipate as far as comprehensive immigration reform legislation. Many of us in California have been insistent that we move this as quickly as possible, and other States, we have people like the gentleman from Florida [Mr. Foley] here and others, and I suspect the gentleman from Florida [Mr. Goss] over my shoulder and others who are hoping very much that we will move as quickly as possible--maybe even the gentleman from New York [Mr. Solomon], the chairman of the Rules Committee, and any other names shouted out to me I am happy to repeat-- but I would like to inquire of the distinguished majority leader what we can anticipate as far as scheduling for the comprehensive immigration reform legislation.

Mr. DREIER. I thank my friend for that understanding, and I thank my California colleague for yielding.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank the gentleman for yielding me this time. I would like to at this very festive time of year extend congratulations to him for his fine leadership on our committee. I rise in strong support of this rule and the conference report. We all know that back in 1992, when Bill Clinton was a candidate for President of the United States, he used a term which has been widely stated here in the Congress and throughout the country and the media. His statement was that we would end welfare as we know it. Those were the President's words, and he made that very strong commitment that he would pursue it. Unfortunately, if you look back at the work of the 103d Congress, we failed to do it. We are here today trying to help the President keep the commitment that he made when he was a candidate. I have said it on a lot of legislation. This is another very clear example of an item that needs to be addressed. Let us talk about the important benefits of this conference report. One of the most onerous burdens that has been placed on the States has been the mandates, the mandates which have said to State governments that they are required to provide a wide range of things. Now, take my State of California, for example; under the provisions of the present law, we see the Federal Government tell the States that they have to expand State dollars, their own State dollars, to continue to provide welfare to those who are flagrantly abusing drugs and alcohol. We feel very strongly that the States should have the flexibility to make a determination as to how they are going to expend those dollars. Roughly $475 million in my State of California has gone to those abusers of alcohol and drugs, not to say that we are not compassionate, not concerned about them, but to continue that flow of cash to those people who are engaging in that kind of abuse is obviously a terrible misuse of those taxpayer dollars. Where should those dollars go? They obviously should go to the women and the children, the impoverished who are struggling, not to those who are out there abusing drugs. This legislation allows the States the opportunity to make a determination as to how they will best use those dollars. That flexibility is key. It is very important. We all know that the 535 of us who serve in the United States Congress do not have a corner on compassion. We have seen the creativity for welfare reform emanate from States, like mine of California under Governor Wilson, Massachusetts, where Governor William Weld has done a phenomenal job, as the gentleman from Massachusetts [Mr. Moakley] has pointed out. On the issue of welfare reform, look at Governor Tommy Thompson of Wisconsin, John Engler of Michigan. That is where the creativity has come from, and that is why it is key that we eliminate the mandates that are imposed, and that is exactly what this legislation does. There is a very important other item that tragically this President has failed to address, but it is one that he has indicated that he would address, as we look at this issue of welfare reform. It has to do with the problem of illegal immigration, a very serious problem in California, and we found most recently in a wide range of other States from concern that has come forward from Members from around the country. Let me take just a moment, Mr. Speaker, to look at the record that this President has had on the issue of illegal immigration. He opposed Proposition 187, strongly opposed that legislation. Two weeks ago he vetoed legislation that would have provided $3.5 billion to keep open the California hospitals that have been swamped by illegal immigrants. Just this week he vetoed funding to put 1,000 new INS guards on the border and provide over $280 million to California prisons swelled by illegal immigrant felons. If he vetoes this bill, Mr. Speaker, he will ensure that illegal immigrants continue to qualify for Federal and State welfare programs. It is a very sad record on the issue of illegal immigration. He has an opportunity, by signing this bill, to end welfare as we know it and, in fact, reverse his record on the issue of illegal immigration. I urge support of this rule, and I urge support of this conference report so that we can, in fact, end welfare as we know it.

Mr. DREIER

Mr. DREIER. Mr. Speaker, clearly, the vanguard of economic revitalization in this country has been the high-technology industry and the cutting edge biotechnology industry. Unfortunately, if we look at the State of California, where we have gained tremendous jobs from exports, this legislation is designed to expand that rather than jeopardize it. We have seen very, very strong statements made by those industries from the Silicon Valley that have been victimized by this; Hewlett Packard, Sun Microsystems, Intel, Apple Computer. A wide range of companies have been impacted, and we need to realize that job creation is very important, but there is also the compassionate side to this. I wonder how much research is not being done in the area of AIDS and cancer because of the threat of these kinds of lawsuits. When Speaker Gingrich established his task force on California, passage of the legislation authored by the gentleman from California, [Mr. Cox] was among our very top priorities, and we hope very much that in a bipartisan way, in a bipartisan way, we will be able to come together and successfully override this veto so that we, as a Congress, can send the very important signal to the largest State in the Union that we are committed to job creation, economic growth and the very important research to meet some of our most important societal needs.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank my friend from Glens Falls, the distinguished chairman of the Committee on Rules, for yielding me this time. Mr. Speaker, I rise to strong support of this rule, believing that we should, in fact, keep out promises. That is really what this comes down to, very simply and basically, Mr. Speaker. We made a commitment on September 27, 1994, that we would move ahead with the Contract With America. Within that plan, we called for balancing the Federal budget. We all read the newspaper. We watch television. We know that there is a very low level of support right now for Republicans in the U.S. Congress. But guess what? To a Member, we have found on our side of the aisle a very strong commitment to the promise that was made. That commitment is to balance the Federal budget within 7 years. Mr. Speaker, I have been criticized for this in the past. I am going to say it again. I want to help Bill Clinton become a better President. The gentleman from New York [Mr. Solomon] has ridden me for saying that, and several others have. Do my colleagues know why I want to make Bill Clinton a better President? Because he is our Commander in Chief and we only have one President at a time. I believe that we can make him a better President by helping him keep the promises that he made back in 1992 when he was a candidate. He said that he would balance the budget within 5 years. Just a few months after he won that election, he stood right here, as the gentleman from New York [Mr. Solomon] has said, and he said on February 17, 1993, in his state of the union message, that he wanted us to use the reliable Congressional Budget Office scoring procedure. Mr. Speaker, he has also said time and time again that he wants to reduce the size and scope of Government. He does not want to make cuts in Medicare and Medicaid. Mr. Speaker, we are doing every single one of those things. But unfortunately, unfortunately, the President is going down the road toward further deficit spending. He is claiming that we are cutting Medicare and Medicaid when, in fact, we all know we are bringing about a 63-percent increase in the level of spending for Medicare over the next 7 years and we are dramatically increasing Medicaid and allowing the States to have the opportunity to establish their priorities. Unfortunately, as we look at where we are headed, the President's plan calls for deficits as far as the eye can see, and as the gentleman from New York said, $87 billion in the year 2002. Mr. Speaker, one of the things that has not been talked about much as been the fact that we are putting into place an economic growth package here. The gentleman from Massachusetts [Mr. Moakley], my pal from south Boston, talked about tax breaks for the rich, when in fact he knows, and even President Clinton acknowledges, that if we were to reduce the top rate on capital gains we could stimulate economic growth. Mr. Speaker, we also know that an overwhelming majority of the benefits for reducing the top rate on capital gains goes toward working Americans. Many of the people who are categorized as rich have a low level of income the year before they take their appreciated asset; that small business, or their home, and realize it. And the year after, they are also making $30,000 or $40,000 a year. But the 1 year they look at this asset, they are categorized as the rich, when in fact they are working Americans who have simply been aspiring to attain the American dream: The success of a business, owning a home, and the chance to pass on to their children and grandchildren some of the benefits of their very hard work. Mr. Speaker, if we were to reduce the top rate on capital gains, it is not a drain on the Treasury. Every single time in the history of this country that we have seen the top rate on capital gains reduced, we have seen economic growth and, yes, an increase in the flow of revenues to the Federal Treasury. In fact, if we were to have a 15 percent rate on capital gains, we would, over a 7-year period, see an increase of $200 billion in revenues to the Federal Treasury. This is a very balanced package. We should support this rule, and move forward and, in fact, defeat the President's budget. We all know that it is smoke and mirrors and it is really an abrogation of the responsibility the President was given when he was elected in 1992.

Mr. DREIER

Mr. DREIER. Mr. Speaker, it is a great privilege and honor for me to once again welcome clearly one of the most brilliant, capable, and principled individuals who has ever served in the U.S. Congress. I believe that as we look at the outcome of this very historic election, which saw Tom Campbell win by a 23-point margin, it demonstrated the fact that we have the people on our side when it comes to our goal of balancing the Federal budget and ensuring that we are not going to pass on to future generations the responsibility of paying for Washington's profligate spending pattern which has gone on for over four decades. It seems to me, Mr. Speaker, that as we welcome Tom Campbell, we should underscore the fact that his commitment to a balanced budget was key to his victory; and it is a great privilege for me, as the dean of our delegation Mr. Moorhead did, to underscore the fact that we now for the first time in many, many, many decades, have a Republican majority from the State of California.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank my friend from Fort Lauderdale, FL [Mr. Shaw], for yielding me this time. Mr. Speaker, the Congress shall have the power to borrow money on the credit of the United States. Those 16 words are article I, section 8, of the U.S. Constitution. So often around here we debate the interpretation of different provisions within the Constitution. Nothing could be clearer than that. The congressionally established debt ceiling is at $4.9 trillion. Approximately a quarter of it is held in the form of nonmarketable government securities in Federal trust funds. The debt in these trust funds has always been counted under the statutory debt limit. Now, Congress has given the Secretary of the Treasury authority to temporarily turn nonmarketable securities and the two Civil Service retirement funds into Federal IOU's during a short-term--and I underscore short-term--debt limit impasse. The borrowing authority formerly occupied by those securities can then be used to sell marketable securities. Now, Secretary Rubin used this authority in mid-November to effectively raise the Federal debt limit by, as we all know, $61 billion. Now, the Secretary of the Treasury does not, does not have unlimited authority to tap trust funds. Past Treasury Secretaries have consistently held that this type of investment can be done only to the extent necessary to pay the benefits owed by those trust funds during the period when there is a debt limit impasse. Secretary Rubin has already pushed the envelope by declaring an impasse of 1 year to generate $61 billion. That will provide borrowing authority through mid-February. The administration must come to a debt limit agreement with the Congress by then. To go beyond mid-February, Mr. Speaker, the administration would have to actively divest trust funds beyond the level needed to pay benefits. There is no precedent, absolutely no precedent, for active divestment, and it is almost certainly illegal. This action would essentially repeal the debt limit law, opening up $1.1 trillion of new borrowing without congressional authority, clearly violating article I, section 8. Should the administration be willing to take this type of legally questionable action, we in the Congress have the responsibility to respond. This is a very balanced, fair measure that we have; I hope we can proceed with it. While the Treasury Secretary should have the flexibility needed to avoid a Federal default, pay interest to Federal bondholders, and pay benefits to retirees during a short-term debt ceiling impasse, he does not have the authority to nullify the power of Congress to control the borrowing of money and set the Federal debt limit. While we hope that this is not the intent of the administration, if it is, Congress will respond accordingly, and that is why we are here.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I yield 2 minutes and 30 seconds to the gentleman from Newport Beach, CA [Mr. Cox] to close on our side.

Mr. DREIER. Mr. Speaker, I would like to inquire of my friend from Dayton if he has any remaining speakers.

Mr. DREIER. Mr. Speaker, I yield 3 minutes to the gentleman from Appleton, WI, my friend [Mr. Roth], who, I would note, as the debate on the rule for this very important conference report rapidly comes to a close, is the chairman of the Trade and Tourism Caucus, where he understands the importance of job creation.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I yield the customary 30 minutes to my good friend, the gentleman from Dayton, OH [Mr. Hall], pending which I yield myself such time as I may consume. All time yielded is for purposes of debate only. (Mr. DREIER asked and was given permission to revise and extend his remarks and include extraneous material.)

Mr. DREIER. Mr. Speaker, by direction of the Committee on Rules, I called up House Resolution 290 and ask for its immediate consideration.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank my friend for yielding, and I would like to remind him that this is, in fact, the debate on the rule. Now, having said that, let me say that I believe this is an extraordinarily good conference report. It goes a long way towards dealing with the goals that the American people set forth in the election of November 1994. We have heard people on the other side of the aisle talking about the opportunity and the future of children in this country. This bill, that has been put into place here by the great chairman of the subcommittee, the gentleman from Kentucky [Mr. Rogers], has, I believe, made a major step towards reducing our deficit, in that it is $700 million below the level of last year. Mr. Speaker, I believe that as we look at that kind of fiscal responsibility, it is very, very important to face the fact that an appropriations bill is actually reducing the level of spending and, at the same time, meeting very important priorities. One of the most important, from my perspective, is the fact that the Federal Government heretofore has not stood up and acknowledged its responsibility for a very important problem, that being illegal immigration. This bill alone deals with two of the three very important prongs that we have been using in legislation over the past several months to address the problem of illegal immigration, and by that I am talking about reimbursement to the States for the incarceration of those who have entered this country illegally. And, also, it is very important for us to realize that toughening up our border patrol is key. There is $300 million in this bill that will go directly, directly towards hiring an additional 1,000 border patrol officers so that we will be able to again have the Federal Government acknowledging its responsibility. The other very important part of that issue is not in this bill, but it is part of our Republican agenda here, and we are, frankly, doing it in a bipartisan way, and that is eliminating the mandates that have been imposed on the States to deal with issues like that. So I want to congratulate the gentleman from Kentucky [Mr. Rogers] for the superb job that he has done on this very difficult bill, for meeting those priorities, and, at the same time, reducing the level of expenditures. I also want to congratulate my friend, the gentleman from Sanibel, FL [Mr. Goss] for reminding me this is, in fact, the debate on the rule. It is a good bill, and I hope we can vote for it and then move on to the conference report.