Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, this is a very simple amendment. In 1993, the President argued that he did not raise income taxes on anyone who was not rich. On its face, that is not valid. As I demonstrated in the debate on the floor of the Senate, the 1994 IRS 1040 form and its explanation show that the 1993 tax increase raised income taxes on the Social Security benefits of people who make $34,000 or more, counting half of their Social Security benefit. It seems to me that by no stretch of the imagination can these people be called rich. What I do in the amendment is call on the President to work with us to come up with a way of repealing this tax and at the same time working together to protect Social Security and Medicare. This is an eminently reasonable amendment. I hope we will get a unanimous vote.

Mr. GRAMM. Mr. President, parliamentary inquiry. Does this amendment simply add to mine, or does it substitute for the language of my amendment?

Mr. GRAMM. Mr. President, I am simply going to offer my amendment as a second-degree amendment to all the other amendments that come up until we vote on it. Now, if the Senator would like to add his language to mine, I made it very clear in my sense-of-the-Senate resolution that we wanted to work with the President to repeal the Social Security tax in such a way as to protect Medicare. If he wants to add his amendment to mine, I will support it, we will adopt it, and that will be the end of it.

Mr. GRAMM. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. GRAMM. Mr. President, I can save the Senate time. This is the same amendment we had pending a moment ago. What the amendment says is that it was a mistake to impose a confiscatory tax on Social Security recipients that earn $34,000 a year when you count half of their Social Security benefits. It simply calls on the President to work with us to repeal that tax. We already had in the amendment the provision saying that it is the sense of the Senate that we do it in a way that would not adversely affect the Social Security trust fund or Medicare. The Senator from Nebraska added a sense of the Senate resolution saying that nothing we do should adversely affect Medicare. I do not strike that provision. In fact, I voted for it. But I want this Senate to go on record that it was a mistake to raise taxes on Social Security beneficiaries.

Mr. GRAMM. Mr. President, I ask for the yeas and nays.

Mr. GRAMM. Mr. President, I ask for the yeas and nays.

Mr. GRAMM

Mr. GRAMM. I am, Mr. President.

Mr. GRAMM. I would say, if the Senator would yield, it is their record. It was the 1993 tax increase. And let me predict, not having seen what taxes those are, I bet you all those taxes are supposedly on rich people, people that drive automobiles and trucks and people that work for a living, which by definition are rich people. In fact, anybody that is taxed is rich and anybody whose taxes you cut are rich.

Mr. GRAMM. What would they do with that money?

Mr. GRAMM. Well, I have not looked at the numbers. I would like to be educated on it. But as I look at them, we have a minimum of six amendments where the Democrats want to raise taxes and spend the money. And the number I looked at is that the tax increase was very substantial, over $180 billion total.

Mr. GRAMM. Sure.

Mr. GRAMM. Mr. President, there is one thing you have to hand our Democratic colleagues, they are absolutely consistent on tax policy. They are always consistent, and they are consistently wrong. They have three rules on taxes, and they never, ever violate them: Rule No. 1 is that tax increases are always fair, they are always the right thing to do, and they are always supported. Rule No. 2 is that tax cuts are always unfair, they are always for the rich, just as only rich people are ever taxed by tax increases, and they are totally consistent in applying these two rules. If there were a rule No. 3, it would be ``see rules 1 and 2 above.'' What Senator Daschle is trying to do is stop us from voting on a tax cut, period. I remind my colleagues that this fund that we are setting up, this so-called reserve fund, provides a tax cut to working families, basically a $500 tax credit per child to working families who now have the highest tax burden in American history. When I was a boy 8 years old in 1950, the average family in America with two children was sending $1 out of every $50 it earned to Washington, DC. Today, the average family with two children is sending $1 out of every $4 it earns to Washington, DC, and what we are trying to do is to reduce the tax burden on working families, especially working families with children. Under our budget, we cannot give a tax cut larger than the spending cuts that we have written in the budget or we are violating our own budget and we are subject to a point of order. So we are not debating deficits here, we are basically debating whether or not we be allowed to cut spending and cut taxes on working families. The Democrats always take the view that tax increases are good and they are always on the rich. In 1993, when they imposed, without a single Republican vote, the largest tax increase in American history, their argument was, this is a tax on rich people. Nobody making less than $115,000 a year is going to pay this tax. Well, it turned out it had a gasoline tax in it. They tried to have a Btu tax equivalent to a gasoline tax of 7 cents a gallon. What they were able to pass was a 4.3-cents a gallon tax on gasoline. It did not go to build highways. It went to general fund of the Government to spend. They taxed working people who have to drive their cars and their trucks to work to give money to people who do not work. Secondly, they taxed Social Security benefits. The President proposed taxing anybody who was rich, by his definition, who made $25,000 a year. When people raised questions about it, he said: ``Well, you know, many of these people own their own homes, and if they had to rent the home you could count that as income, if they own their refrigerator and they rented that, if they got an insurance policy or a little savings account.'' So shamed were Democrats in Congress that they did raise the level at which you started taxing their Social Security benefits to $34,000 a year. By their definition, those are rich people. They were going to tax John Q. Astor, we were told. As it turned out, 80 percent of those taxes on this top 1 percent of income earners turned out to be Joe Brown and Son hardware store. But the one thing you have to admire the Democrats about, they are absolutely consistent. And that is, they always raise taxes. They always raise taxes. And they always say that only rich people pay taxes. They are also consistent in that they never support cutting taxes. What we are trying to do in this bill is to give a $500 tax credit for working families. That tax credit phases out as all deductions do, at high-income levels. The plain truth is, most American families never become truly economically successful until they are older and therefore almost by definition their children have grown up, gotten married, graduated from college. Mr. President, 75 percent of the tax cut we are talking about goes to families that make $75,000 or less. But following their basic rule that every tax increase is fair and every tax cut is unfair, they are against it. I just want to remind my colleagues before they vote on this, that under the Clinton budget, if it were implemented, we would have the highest tax burden in American history at the Federal level, 19.3 cents out of every $1 earned by every American on average will come to the Federal Government to be spent. What that means for working Americans is that for the first time in history, over 30 cents, in fact 30.4 cents, out of every $1 earned by every American family on average is not going to be spent by the people who earned it: it is going to be spent by their Government at the State, local, or Federal level. Our colleagues who object to cutting taxes for working families say, this is only fair. What they really believe but they do not want to tell us is, they believe Government can do a better job of spending money than working families can. They believe that a two-wage earner family where both the husband and the wife are out working hard, they are making about $50,000 a year, or $60,000 a year, when they combine their two incomes--we are trying to let them keep $1,000 more a year to invest in their own family and their own future. The Democrats are trying to use a parliamentary maneuver to prevent us from voting on that because they want to spend that money. They do not want working families to be able to spend it. This fits their principle. In the mid-1980's people discovered that in foreign policy the Democrats always blamed America first. What we are discovering in the 1990's is in domestic policy, they always tax America first. According to them, every tax is fair, every tax cut is unfair, every tax increase is paid for by rich people. Even if they are Social Security recipients making $25,000 a year, counting half of their Social Security, even if they are driving a pickup truck to work, Democrats think they are rich when it comes to raising their taxes. But when working families who are struggling every single day to make ends meet--and they are watching the Government squander their money-- when we try to let them keep $1,000 more a year to invest in their own children and their own families, somehow that is unfair, somehow suddenly they are rich. In truth, for the Democrats, anybody that works for a living is rich. Well, I think working families can do a better job. That is why I think it is absolutely imperative that we defeat this parliamentary maneuver and that we have an opportunity to vote on cutting taxes for working families. I think they deserve the tax cut. I intend to vote for it. I yield the floor. Mr. BOND addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, I am making a modest proposal that the President and the Congress should work together to go back and fix a problem in the 1993 budget whereby the Democrats, while continuing to say that no American making less than $115,000 a year was going to pay more income taxes as a result of the 1993 Clinton tax increases, raised taxes on Social Security benefits, and the President tried to impose that tax on individuals making $25,000 or more. We ended up in Congress seeing it adopted on a straight party-line vote--I am proud to say every Republican voted against it--and taxes were increased on Social Security benefits for any individual who has earnings of $34,000, or more. I want to first note that we are already moving toward repealing the gasoline tax that was contained in the 1993 Clinton budget. It is my belief that we will break the logjam perhaps this week and allow a vote on repealing that gasoline tax. I think we will have at least 75 Members of the Senate vote to repeal it. Gasoline prices have risen dramatically over the past few weeks, and this is the only way we can immediately lower the cost of gasoline to the American consumer. It is important to note that, in 1993, for first time in the history of this country we had a permanent gasoline tax increase that was not dedicated to road building. Historically the gasoline tax has been a discriminatory tax. It taxes people who live in rural areas more than those who live in urban areas. It taxes people who live in the West more than it taxes those who live in the East, and the same is true for those living in the South relative to those in the North. Overall, it hurts most those people who have to drive their cars and their trucks to work. To try to deal with the discriminatory nature of the gasoline tax, historically we have not used it--at least since we established the highway trust fund--as a permanent revenue source for general Government. Instead, we have used gasoline taxes to build highways. The argument has been that when people pay the tax, it is essentially a user fee that goes to build roads. The people who pay the most, because they drive the most, are the biggest beneficiaries of road maintenance and road improvement. We are well on our way, I hope and believe, to repealing the unfair gasoline tax in part because it was the first time a permanent gasoline tax went to the general revenue and not to road building. As a result of this first even change in the way we handle gasoline taxes, since 1993 we have been taxing, in the words of our colleague from Missouri, people who have to drive to work for a living in order to subsidize people who do not work. So I think we are well on our way to fixing the first problem with the 1993 tax increase proposed by President Clinton. I am proposing today a sense-of-the-Senate resolution that will begin moving us toward fixing the second problem: the very heavy tax that was imposed on Social Security benefits. First of all, I want to dispel this notion, which is still embodied in the political rhetoric of the President and of the Members of Congress who voted for this tax increase, that the tax increase in 1993 did not raise income taxes on people who made modest incomes. In fact, their standard line is nobody earning less than $115,000 a year paid more income tax. I want to begin dispelling this notion by looking at the 1994 1040 formats and instructions that were mailed to over 100 million households in the country. I think that when we look at this tax form we can immediately see that the people who make the argument that ``nobody's income tax was raised if they made less than $115,000 a year'' are not leveling with the American people. The way we can do this is first by looking at page 7. This is section 1 and it says ``Before you fill in form 1040, here is what is new for 1994.'' As you read down the first column, you see Social Security benefits, and it says, ``If your income, including one-half of your Social Security benefits, is over $34,000, if single--over $44,000, if married filing jointly--more of your benefits may be taxable. See the instructions for lines 20(a) and 20(b) on page 18 for details.'' When you look at the actual 1040 tax form--which will be the same this year as well--if you look at line 20(a) you see you have to enter the level of your Social Security benefits, the amount that is taxable is added to your income and, therefore, your income taxes go up. Let me tell you why I think this tax needs to be repealed. First of all, what we are beginning to do with means testing entitlements and with this confiscatory tax on Social Security benefits, is basically to divide America neatly into two groups: one group of people which pays for programs and the other group which benefits from these programs but largely does not pay for them. When we have reached the point that we are imposing a confiscatory tax on Social Security benefits for people who earn $34,000 a year, what we are really saying to working Americans is, ``If you say save for your retirement, if you build up a private retirement fund, if you build up an annuity, if you save your money, and if you use the ability you had during your working lifetime to provide for your retirement, we are going to come in and take a substantial part of your Social Security benefits away from you. But, if you do not provide for your future, if you do not save, and if you do not build up your retirement, then you are not going to lose your Social Security benefits.'' What we are in fact doing is we are encouraging Americans not to build up their private retirement because, if they do, we will then come in and take their benefits away from them. This is a part of a larger movement toward what is called means testing in all areas of American government. Basically the approach today is to say, if you earn a benefit and pay for it, great, but unless you meet an income test, even though you paid for the benefit, you do not get it. My view is that it would be wiser to divide earned benefits from unearned benefits. Under this system, if someone has earned a benefit by paying for it, they ought to get it, but if they are getting something they have not earned, then their eligibility should be judged based on their income. I believe that of all the provisions in the President's 1993 tax bill, the Social Security portion was probably the most unfair--even the President tried to hide what he was doing. If you will remember in the debate and all of the materials that were presented by the administration, what they tried to do was to argue that, well, if your mother has $34,000 of income, she is actually much richer because she probably owns her own home, and, if she moved out and lived in a tent, she could rent her house and you could count that as her income; or if she owns a refrigerator, if she sold it or rented it, she could earn income on it; or even if she has insurance--these were all considered sources of income. According to the administration, for the first time in American history that I am aware of, in 1993, the Democrats talked about imputed income, and it seems to me that what the Democrats were trying to do was trying to hide the fact that they were taxing Social Security benefits--the President wanted to tax individuals making $25,000 or more; Congress adopted a tax on those earning $34,000 or more. What I am doing in this amendment is very simple. First, I am noting the fact that income taxes were raised--you can see that right here on the 1040 form. There is no doubt about it; this Social Security tax is not some separate tax, it is part of your income tax. As every senior citizen know--you take half your Social Security benefits, you add it to your outside income, and then you pay taxes on it. What I want to do is to call on the President to join the Congress in order to come up with a proposal to repeal this unfair tax, and to offset it by cutting spending elsewhere. I am not in this amendment saying ``do it my way,'' I am saying let us work with the President on a bipartisan basis, and let us do it in such a way that it does not damage either Social Security or Medicare. I remind my colleagues that none of this tax went into the Social Security trust fund. In fact, permanent law was changed to put the money in general revenue in order to subsidize cost overruns in Medicare. What we need to do is to work with the President to try to come up with a way to repeal this unfair tax. I think this is a tax that should have never been adopted. I remind my colleagues that the President said in 1994 he raised taxes too much. I think the gasoline tax was one of those taxes, I think Social Security is another of those taxes, and I think it is very important that this tax be repealed. One final point, I see several of my other colleagues are here, but I want to reiterate a point that I made the other day. Something is wrong in these debates when the people who want to raise taxes always argue that every tax increase is only on rich people. This was the argument made in 1993, but subsequently, we have discovered that everybody pays gasoline taxes. As our colleague from Missouri in the best line of the debate said, the Government is taxing people who are driving to work for a living and giving the money to people who do not work. We now find that the Government is taxing Social Security benefits on people who earn $34,000 a year, but in the continuing rhetoric of those who constantly want to raise taxes, in 1993 we were supposedly only raising taxes on the rich. We have in the budget before us sufficient funding to give a $500 tax credit per child for every working family in America. As we all know, that credit starts to phase out for families who earn higher incomes. No one disputes the fact that 75 percent of the benefits go to people who make less than $75,000 a year--in most families by the time they are making substantial amounts of money their children are already grown, so it is not surprising that the well off do not qualify. However, have you noticed that the same people who were arguing a gasoline tax is only a tax on the rich, and who argued that a Social Security tax on incomes over $34,000 a year was only a tax on the rich, are now claiming that a $500 tax credit per child is a tax cut for the rich? When you go back and look at the rhetoric, those who want to raise taxes always claim to be taxing rich people, and whenever anybody else proposes cutting taxes, they are accused of wanting to cut the taxes of only rich people. It is as if these taxers believe that everybody who works for a living is rich. It is as if they believe only rich people pay taxes. The reality, of course, is that in terms of the overall revenues of the country, there are not very many rich people. We could take the total income of all of the supposedly rich, and still not fund the Government for the month. Where the real revenues come from is middle and upper middle-income working families. What I want to do in my amendment is to have the Congress go on record as saying the 1993 tax hike on Social Security was a mistake, and have the Congress join together with the President to work out a bipartisan proposal so that we can repeal this Social Security tax. This tax is unfair, it discourages people from providing for their retirement, it punishes those who saved and sacrificed during their working life, and it takes benefits away from them relative to people who have not saved. That clearly is not good public policy. It clearly is not right. I hope we pass this amendment unanimously, and I urge my colleagues to vote for it tomorrow. I yield the floor. Mr. BROWN addressed the Chair.

Mr. GRAMM. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. GRAMM

Mr. GRAMM. Will the Senator yield me 10 minutes?

Mr. GRAMM. Home health care.

Mr. GRAMM. How they went about hiding it is, first, they said that really they are not talking about people earning $25,000 because these are older people who own their own homes. So we are going to impute, for the first time ever, income, and it became part of a concept of American budgeting. So if your mother owns her own home, the President would say, ``Well, look, if she had to rent that home she would have had to pay $400 a month or $500 a month. So we are not really taxing her at $25,000 because we are not taxing the imputed value of her home.'' Or she owns a lawn mower, or she owns a car, or she owns a dishwasher; if she rented those things, it would be imputed income. Actually, she is rich. She is making $25,000 a year, but she is rich because she may own a dishwasher, she may own a car. She worked a lifetime. She owns her own home. If you imputed the value of all of those things, her income would be higher. The Congress rightfully rejected that. But our Democratic colleagues imposed the tax on anybody making $34,000 a year or more who gets any Social Security. They said, this is not an income tax. But I want to show you that it is. This chart is a page from the advisory that was put out to go with your 1040 form in 1994, the year after the tax increase went into effect. People get a notice from the IRS that they are getting ready to be taxed again, then later get a form telling them how to fill it out, and then they get the tax form. Let me read for you what the IRS said when they sent income tax forms to 120 million Americans. Here is what they said: Social Security benefits. If your income, including one- half of your Social Security benefits, is over $34,000 if single (over $44,000 if married, filing jointly), more of your benefits may be taxable. See the instructions for lines 20(a) and 20(b). Let me show you on the 1040 form. This is income taxes. Look down here at line 20(a) which I have blown up. What line 20(a) says is, ``Social Security benefits.'' In other words, you put your Social Security benefits right there and then you pay an income tax on them. So do you know how the Democrats argue that they were taxing rich people? Basically, they argued if you make $25,000 or more, you are rich, and if you own a dishwasher or if you own your own home or you own your own car, you are richer than you think, because if you had to rent all of those things, it would cost you money. We are trying to cut taxes on working families. The only tax cut in our budget this year is the $500-per-child tax credit. That would mean that if you have two children, you are going to pay $1,000 less in income taxes. You are going to be able to invest that money in your own children, your own family, your own future. We know that most people who are rich or who are upper-middle income really only start making money once their children are grown. So we are not shocked to hear that 75 percent of the benefits of this $500 tax credit goes to families that make less than $75,000 a year. But do our colleagues say, ``Well, we are against cutting taxes for working families because we believe Government can do a better job spending their money than they can do for themselves''? No. They say this is a tax cut for the rich. When they tax people who make $25,000 a year, they say they are rich. So, in one sense, they are consistent. But let me remind you what they are consistent about. They are consistent in saying that every tax is a tax on the rich and that every tax is fair. Another example which disproves this is the gasoline tax. President Clinton tried to implement a so-called Btu tax that would have raised the price of gasoline 7 cents a gallon. What he got was 4.3 cents. I am glad every Republican voted against it. I am proud of it. This was the first permanent gasoline tax that went to general revenue, and not toward build highways. Historically, the gas tax has gone to highways because to do otherwise makes it a discriminatory tax. If you live in Texas, the odds are you spend almost twice as much on gas than if you live in New York. If you live in a rural area where you have to drive great distances to get to work, you spend more on gasoline. If you live in the West, you spend more. If you live in the East, you spend less. If you live in the South, you spend more. If you live in the North, you spend less. The way we have dealt with the inequity is that we have used the gasoline taxes to build highways. So if you pay more, you get more. But President Clinton took the 4.3-cent-a-gallon tax on gasoline and spent it on his social programs. So we took money away from people driving their car and their truck to work to give money to people who do not work. Is that taxing the rich? No. It is taxing working people. We are trying to repeal the tax--the Democrats say it is a great idea. The problem is, this is the 21st day that we have tried to offer an amendment to repeal that 4.3-cent-a-gallon tax and, to this day, we have not gotten a vote. So, the principle I want people to understand is: whenever the Democrats raise taxes, whether they tax people who make $34,000 a year or whether they tax gasoline, they always claim to be taxing rich people. Whenever we try to cut taxes, therefore, they say we are cutting taxes for rich people. The plain truth is, God did not make enough rich people to make the Democrats's claims hold true. As these tax burdens, year after year after year, have gone up, what we have discovered is, if you are going to take 19.3 percent out of every dollar earned in America, you are going to have to take it from the people who earn that money. That is basically middle-income or upper-middle-income families and that is what the Democrats have consistently done. One very final point--and I do not want to get into the sparring contests with our colleagues about what is phony and what is not phony, but to stand up here and say that President Clinton's budget is in balance with a straight face neglects the fact that when the Congressional Budget Office Director, Dr. June O'Neill, was before the Finance Committee and she was asked, ``Is the Clinton budget in balance,'' here is what she said: ``CBO estimates that the basic policy proposals in the President's budget would lower the deficit substantially below the Congressional Budget Office baseline projections, but the deficit would still total $84 billion 7 years from now.'' So how does the President close that gap? He closes that gap with a little piece of fine print where, in essence, he says, if for some reason the budget is not in balance, take back the tax cut. Tax America first. Spend first, tax first. Always tax. Never give the tax back. This is the Clinton prescription that we are talking about here. In the end, we are talking about competing visions. What kind of vision do we have for our country? The vision of Bill Clinton, the vision of our Democratic colleagues, is one of more Government, more social spending than ever in history, less defense than ever in the postwar period, and the highest tax burden in American history. That is their vision. Our vision is different. You can be for it. You can be against it. But our vision is a vision of more freedom and opportunity. We want to control spending. We want to let working families keep more of what they earn. We think families can spend their money better than the Government. That is the choice. The Democrats believe Government can do it better. We believe that families can do it better. It is a choice the American people need to make. We are going to make part of that choice here on the Clinton budget. The question is, do we want to commit ourselves to a future of more taxing and more spending? I think the answer is no. I yield the floor. Mr. DOMENICI addressed the Chair.

Mr. GRAMM. It seems to me it goes beyond that because there is already a lot of cynicism in budgeting--probably because the numbers are so big and we are doing it over multiple years. But to simply take home health care, the fastest growing part of Medicare and say we are going to help Medicare by taking it out of the Medicare expenditure accounting but we are not paying for it in any other way, we are just simply taking it out of accounting, that creates a level of cynicism which I think reaches a new level. It would be like if the Senator went to the doctor and the doctor says: You are in great shape except you have liver cancer. I cannot cure that but let me tell you, I can work on the rest of your body. You can go on an exercise program, you lose a little weight; you can quit smoking----

Mr. GRAMM. No, but you would not just do all this other stuff until you died. No doctor in the world would do that. Instead he would say: Look, we have got to do something about this cancer. We have got to do it right now. All I am saying is, and I am not giving us the Academy Award for solving the Medicare problem, but we are trying to solve the problem for at least a generation. The President, however, is simply saying: Look, it is not going to happen until after the election. After the election, maybe we can raise the payroll tax. I think this is something we ought to do something about now.

Mr. GRAMM. If I may just conclude with this point. I have always believed that not addressing this problem before the election means sometime later we will be looking at a massive increase in the payroll tax. I believe that next year or the year after, if we do not address this problem now, we are going to be here on the floor of the Senate debating a 20- or 30-percent increase in the payroll tax, and all because the President was unwilling to do anything about these exploding costs.

Mr. GRAMM. Will the Senator yield?

Mr. GRAMM. I want to note one other thing. I do not want to get into a big discussion on Medicare but one of the clearly irresponsible actions that ought to be denounced on a bipartisan basis is what the President has done with his nursing home provision. One of the things the President's budget does in order to make Medicare look less insolvent is to take the nursing home component, which costs $55 billion over 7 years and which is now being paid for out of part A, out of Medicare. But he is not putting it anywhere, and, as if by magic, he assumes that somewhere this $55 billion is going to appear. The final issue I would like to talk about is the issue of taxing and spending. Let me start by talking about taxes. It never ceases to amaze me that we have something underway here in Washington that the public is beginning to understand, but has not quite come to fully appreciate, and it is very much like the defense realization that occurred in the 1980's. By the early part of the 1980's, the American people understood that, in foreign policy, the Democrats had a basic approach of blame- America-first. Whatever happened, according to the Democrats, it was our fault. If there were troubles in the world, the Democrats said it was because of our greed and our imperialism. But finally, in the 1980's, the American people began to disregard these claims because they realized that this was just the knee-jerk approach of the Democrats. I want to talk about taxes from this point of view and the point I want to make is this: To the Democrats, every tax increase is fair, and no matter how unfair it may actually be, they define it as being fair and go to incredible lengths to convince people it is fair. The second point I want to make is that, according to the Democrats, every tax cut is unfair, no matter who it goes to and no matter who it affects. By definition, the Democrats say every tax cut is unfair. And after a tax is increased and it actually turns out to be unfair, only then do the Democrats say it is unfair--yet they propose to correct it by raising taxes again. Let me give you an example. In 1993, we heard on the floor of the Senate--and the President to this day says, ``We only taxed rich people.'' Let me take a couple of examples that I think reveal the errors of this statement. The President proposed in his budget in 1993, in his largest tax increase in American history, to raise taxes on people who earned Social Security benefits. He raised taxes on people who made $25,000 or more, but how did he go about hiding it?

Mr. GRAMM. That is right.

Mr. GRAMM. I am happy to yield.