Phil Gramm

Mr. GRAMM

Mr. GRAMM. Let me respond very briefly and then I would yield to Senator Grams. Mr. President, let me first say that the amendment I have offered cuts spending by another $142 billion to make it possible for us to let families keep more of what they earn and to provide incentives for businesses to invest their own money in their own future and generate jobs. I hear our colleagues on the Democratic side of the aisle talking about difficult choices. I am not aware that a single one of them plans to make a single difficult choice, and these are difficult choices being made by Republicans. Their proposal is that if we make the difficult choices so that we balance the budget, if any benefit should accrue from that we allow Government to spend the benefits. Our proposal is that if we make the tough choices and benefits accrue as a result of those tough choices in lower interest rates and higher growth because we have balanced the budget, because the Government is not borrowing half of all the money that is loaned in America, we give that money back to the people who earned the money to begin with, the people who do the work, pay the taxes, and pull the wagon. So I do not think the distinction between the two visions for the future that we are debating here could be any clearer. I do not think the American people believe that the tax cuts adopted in the House of Representatives are unreasonable or unworkable. I do not think the American people think that the idea of letting families spend more of their own money by having Government spend less of it is an unrealistic or unworkable idea. In fact, it has worked in reverse for 40 years. The average family in 1950, with two children, sent $1 out of every $50 it earned to Washington. Today, it is sending $1 out of every $4. I am just proposing to take a very small step back in the right direction for a change. I yield 10 minutes to the distinguished Senator from Minnesota, Senator Grams.

Mr. GRAMM. Madam President, I have offered an amendment which will reduce government spending from the level recommended in the Senate budget, that will include the heart of the tax cuts contained in the Contract With America, and that will, for all practical purposes, bring the budget which is now under consideration in the Senate into line with the budget that has already been adopted in the House. In short, if the amendment that I have offered is adopted, we can virtually guarantee that the tax cuts which Republicans across the land committed to in the 1994 elections will become the law of the land. I would like to outline what this debate is about. I would like to talk about the amendment. I would like to outline what the amendment does, and then I would like to talk about the issue that we are going to decide when we cast a vote on this amendment. In September of last year on the north plaza of the Capitol Building, Republican candidates for the U.S. Senate, in fact, every Republican challenger in the country that was running in an open seat or against a Democratic incumbent except one who could not be there on that occasion, gathered to issue to America, a statement that we called ``7 more in '94.'' I want to read the opening part of that statement, and then I want to refer to a couple of things in it. We said, ``We pledge to the American people that if they empower us as a majority in the U.S. Senate on November 8, 1994, we will dedicate ourselves to the adoption of these legislative priorities.'' Among those priorities, we had a tax exemption for children, we had the reestablishment of individual retirement accounts for families, we had the reduction of the capital gains tax rate, and the indexing of capital gains, and we pledged to repeal the earnings test under Social Security. One week later, as everyone in America now knows, Republican candidates for the House of Representatives gathered on the west front of the Capitol and presented their Contract With America which outlined two goals as it related to the budget. One goal was to balance the Federal budget, a commitment we also had made 1 week earlier on the northern approach to the Capitol; and also they outlined a comprehensive program to cut taxes, to let families keep more of what they earn, to provide incentives for people to work and to save and to invest. That was in September 1994. We all know that the American people on November 8 changed American Government in the most sweeping congressional election since 1932. We won a majority in both Houses of Congress. The House of Representatives, good to its word, not only made promises in the campaign but they fulfilled each and every one of those promises. They adopted a budget last week that balanced the Federal budget over a 7-year period and that mandated tax cuts as they had outlined in the Contract With America. Now, that brings the Senate to this point in the debate. Where we are today is that we have a budget before the Senate that fulfills half the fiscal commitments we made that September day. We have before the Senate a budget that over a 7-year-period limits the growth of Government spending to 3.3 percent a year, down from an average of about 5.5 percent a year growth over the previous 5 years, down from about 7.5 percent growth in Government spending since 1950. As a result of constraining the growth in Government spending, the budget that is before the Senate is a budget that will achieve balance over a 7-year-period. [[Page S7162]] I want to congratulate Senator Domenici. I want to congratulate my colleagues for having achieved half of the commitment that we made prior to the elections in 1994. My amendment today seeks to achieve the other half of those commitments. Now, what is the difference at this moment between the House budget and the Senate budget? Stated in its most simple terms, the budget that we are considering in the Senate spends $175 billion more on nondefense spending programs over the next 7 years than the budget which was adopted in the House. That is the first difference. Our budget spends a lot more money than the House budget spends, on nondefense expenditures. The second difference is that the budget in the Senate does not mandate a tax cut, whereas the budget in the House does. My amendment is a very simple amendment. What my amendment does is make two changes in spending. No. 1, it phases in the reductions in the growth of spending under Medicaid so that while Medicaid expenditures grow every year over the next 7 years, and while Medicaid grows faster than Government spending is growing, we slow down the rate of growth in Medicaid more quickly under the substitute which I have offered than under the budget that is currently pending before the Senate. Many people believe that those savings are not only achievable but desirable. The most significant change in spending that I have proposed in this amendment reduces nondefense discretionary spending below the level contained in the budget that is before the Senate, so that overall we are spending $142 billion less under my amendment than we are spending in the budget that is currently before the Senate. If we look at this chart, Mr. President, it shows basically what the amendment does to spending. The red line is a line that shows the growth of Government spending under the Domenici budget; that growth averages 3.3 percent a year. What my amendment does, by reducing the growth of discretionary spending, and by phasing in savings in Medicaid more quickly, rather than growing at 3.3 percent a year, Government spending would grow at approximately 3 percent a year. Government is still spending more each year than it spent the year before, but not spending as much as it would have spent had this amendment not been adopted. This amendment then provides for tax cuts for the American people. These tax cuts basically contain the following items: A $500 tax credit per child; cutting the capital gains tax rate by 50 percent and indexing it for inflation; estate tax relief for small business and small farms; faster depreciation through expensing for small business to encourage investment in small business in America; beginning the process of phasing out the so-called marriage penalty, this perverse provision in the Tax Code where if two people with incomes meet, fall in love, and decide to get married, they pay the Government as much as $4,500 a year--for the right to be married--in additional taxes; this amendment reestablishes individual retirement accounts for all Americans; it allows spouses working in the home to have an individual retirement account on exactly the same basis as if they worked outside the home; it allows the deduction with a credit for expenses in adopting a child; it raises the threshold for the earnings test under Social Security so that if senior citizens need to work to supplement their income, if they have the ability to work, they can do it without losing Social Security in the process; and finally, if someone takes care of an elderly person in their home, they are allowed a credit for part of those expenses. This, in essence, is the tax cut that is contained in the House budget and is the heart of the Contract With America. Now, let me take on the issues that are going to be raised. There are going to be some people who will say, ``Look, let us balance the budget before we talk about tax cuts.'' That is very easy to respond to. We are both balancing the budget. The Domenici budget balances the budget, certifies the savings, locks them in with enforcement mechanisms, and so does the amendment I have offered. In terms of balancing the budget, both amendments will balance the Federal budget. What my amendment does is spend less money, and by reducing spending by $142 billion over the next 7 years, my amendment makes it possible for us to adopt as part of the reconciliation process a tax cut, fulfill the commitment we made in the campaign, and to do something more: To begin the process of not only balancing the budget but changing who is doing the spending in America. The debate here is really between those who say we want the Government to spend $142 billion more, in the Senate, than Government spends in the House budget, and those who support my amendment and say let us have the Federal Government spend $142 billion less so families can spend more of their own money on their own children, so that businesses can invest more of their own money in their own businesses. I know there are those who will say this is a debate about how much money we spend on children, this is a debate about how much money we spend on education, housing, and nutrition. But this is not a debate about how much money we spend on children. It is not a debate about how much money is spent on nutrition or housing or education. It is a debate about who is going to do the spending. In the budget that is before us, the Government is going to continue to do the spending. In the amendment that I have offered, the family will do the spending. I know Government and I know the family and I know the difference. I believe if the American family is allowed to have a $500 tax credit per child so parents can spend more of their own money on their own children, on their own future, that they will do a better job in spending that money than the Federal Government is doing. In the House they propose eliminating public funding for public television. In the House, they propose eliminating the Federal Department of Education. And they give part of that money back to parents, to let parents decide how it is spent. I believe that is a clear choice and I want to be absolutely certain that people know that we can make that choice in this amendment. If you want families to spend more of their own money rather than having the Government spend it, you want to be for this amendment. Second, this amendment cuts the capital gains tax rate, provides incentives for investment, and I know there will be those in this debate who will say this helps rich people. ``If you cut the capital gains tax rate, rich people are going to exploit the situation because what they are going to do is mobilize their money; they are going to invest it; they will create jobs. But if they are successful, they will earn profits.'' Welcome to America. That is how our system works. If we want people to create jobs there has to be an incentive to do it. I do not understand people who love jobs but hate the people who create them. I do not understand how we can expect people to make investments and take risks, and yet somehow resent allowing them to benefit when they are successful from the investments they make and the risks they take. As I listen to all this talk about rich people versus poor people, it has started me thinking about my own life's experience. I have been blessed in having a lot of jobs in my life, especially when I was growing up. I worked as a peanut processor, I worked in a cabinet shop, I worked in a boat factory, in addition to all the jobs we all had working in a grocery store, throwing a newspaper. No poor person ever hired me in my life. Every job I ever got in my life, I got because somebody beat me to the bottom rung of the economic ladder, climbed up, saved his money, invested it wisely, and made it possible for someone like me to get my foot on the bottom rung of the economic ladder. What my amendment seeks to do, by cutting the capital gains tax rate and by providing incentives for people to work and to save and to invest, is to guarantee that tens of millions of additional young Americans will get an opportunity to put their foot on the bottom rung of the economic ladder and start climbing up themselves. By cutting discretionary spending we have the opportunity to cut programs where Government is subsidizing business [[Page S7163]] and, instead, cut the capital gains tax rate and provide investment incentives so that investment decisions are not made by the Government but where investment decisions are made in the private sector of the economy. Some people are going to say, ``Look, we ought to forget this $500 tax credit per child because it is not enough money to make any difference.'' For a two-child family, this $500 tax credit is going to mean that family is going to get to keep $1,000 more every year of what they earn to invest in their own children. That may not be much money in Washington, DC, but in Texas, where I am from, the ability of a family to spend $1,000 more of its own money on its own children is real money. The fact that that is not real money in Washington, DC, tells you something about the problems that we have in Washington, DC. I think these are changes we need to make. So here is the choice we are about. The choice is this. The House of Representatives has controlled Government spending, and using the words we use in Washington, cut Government spending. Even though spending grows every year in their budget, it just does not grow as fast as it would have grown had they not changed policies. But in the House, they spent roughly $175 billion less on nondefense spending than the budget that we are now considering in the Senate. My amendment simply cuts spending by roughly that amount and gives that money back to parents to invest in their own children, cuts the capital gains tax rate, encourages savings and investment by changing the tax code so that rather than the Government spending this $175 billion, it can be spent in the private sector, where families and businesses are making the decisions instead of the Government. This is not a debate about balancing the budget. Both budgets balance the budget. This is not a debate about spending money on children or investing in businesses. Both budgets do that. But it is a debate about who is going to do the spending. Under my amendment, families will do more spending and the Government will do less spending. Under my amendment, Government will make fewer investment decisions and private business will make more investment decisions. Not only do I believe this is good policy, I think it is important for two reasons. One is economic and one is political. Economically, I think the economy is beginning to soften. Economically, I think we are beginning to feel, now, the impact of the tax increase that was adopted 2 years ago. I think the impact is being felt on the American economy, and I think we are beginning to see troublesome signs in the economy. I think it is very important, as part of this budget, because we want it to work and we want to balance the budget, that we as part of this budget provide incentives for private investment. As Government does less, it is important that we give parents the ability to do more by letting them keep more of their own money. It is important, as Government does less, that we provide incentives for business to do more in creating jobs and growth and opportunity. I think that is especially true given that we are going to reform the welfare system and we are going to ask millions of people to get out of the welfare wagon and help the rest of us pull. Cutting the capital gains tax rate, providing incentives for investment and growth I think is a vital part of this. Finally, we had an election. We all see the results of that election. We have a Republican majority. We have 54 Republicans in the Senate. We have a Republican majority in the House for the first time in 40 years. We won that election based on commitments that we made to the American people, and in terms of the budget we committed to do two things. No. 1 to balance the Federal budget. That is a commitment on which we are clearly going to deliver. But we also committed to reduce spending further so that families can keep more of what they earn and so that businesses can make more investment decisions to create more jobs, more growth, more opportunity for our people. That is a commitment that we are not going to fulfill unless we adopt this amendment. Finally, before I yield the floor and allow the opposition to speak and begin to recognize our colleagues who are cosponsors to the amendment, let me say this. I know there are others who are talking about cutting a deal--compromising, coming up with a temporary tax cut. I think if we are going to change America, if we are going to change Government policy, we have to stop cutting deals in Washington, DC. We promised that we would do this in the election. As chairman of the Republican senatorial committee, I went all over the country and with Republican candidates everywhere committed to this program, and so did others of our colleagues on the Republican side of the aisle. Now we come down to the moment of truth. There are many who say, look, it was hard enough balancing the budget. This was excruciatingly painful. This was difficult. We do not want to go the final step to live up to what we committed in the election. I think that is a mistake. I think America will be richer and freer and happier if we do it. It is not only the right thing to do economically, it is the right thing to do because we committed to do it. I reserve the remainder of our time. Mr. FEINGOLD addressed the Chair.

Mr. GRAMM. Madam President, I ask unanimous consent further reading be dispensed with.

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

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

Mr. GRAMM. I will not yield.

Mr. GRAMM. Mr. President, I yield 2 minutes to the senior Senator from Arizona.

Mr. GRAMM. No, I am going to be the final speaker. I intend to use my last 4 minutes.

Mr. GRAMM. I guess one of the things that is always frustrating about political debate is that it is so seldom that we will really talk about the issues that are involved. So we have drifted far afield from those issues. I would like to go back and try to set them all in perspective. I am going to reserve my final moments to conclude the debate, and I will allow the Democrats to speak until their time has expired. First of all, this is not a debate about balancing the budget versus cutting taxes. I am not proposing to cut taxes, except to the degree that spending is being cut beyond the level contained in the budget resolution. I am proposing, if we look at this chart, very simply to do this: The red line here starts off with the Federal Government spending roughly $1.5 trillion this year. It shows how much the Government can spend over the next 7 years and still balance the unified budget of the United States of America. What I am proposing is to cut spending below that level so that rather than the Federal Government investing in the education of our children, families can invest in the education of our children; only the families will know the names of the children they are investing in. Only the families will have a stake directly in those children. My proposal is to cut Government spending on things like Government subsidies to business, so we can cut the capital gains tax rate, so that we can provide incentives for investment decisions to be made by people who are going to benefit or lose in those investment decisions, so that the marketplace, based on competition and efficiency, can make investment decisions. With regard to the debate about the income level of the people paying the taxes, the point is if we give a $500 tax credit per child in America, if someone is not paying $500 worth of taxes, they do not get the tax credit. But then what we are trying to do is to deal with a problem that in 1950, the average family with two children was sending 1 out of every $50 it earned to Washington for the Congress to spend; today the average family in America with two children is sending $1 out of every $4 to Washington for the Congress to spend. I want to let families spend more of their own money on their own children for their own future. That is what this debate is about. If we ask people if they want to balance the budget or cut taxes, they say balance the budget. I agree. If we ask do I want my children to be healthy or do I want them to go to college, I want them to be healthy. When their health is secured, I then want them to go to college. I do not have only one objective for my children. We have set out a budget that balances the budget. What I am proposing to do is to cut Government spending further, eliminate the Federal Department of Education, reduce subsidies to business and cut taxes by that amount so that families can invest more of their own money rather than having Government spend their money for them, and cut the capital gains tax rate and let businesses invest their money as they see fit, rather than us subsidizing businesses to invest money where we would like it to be invested. That is what this debate is about. I reserve the balance of my time.

Mr. GRAMM. I would not object.

Mr. GRAMM. Mr. President, I know it breaks the hearts of our colleagues, but in this amendment, I am proposing cutting Government spending, their precious programs, so that families can spend their own money on their own children on their own future, and invest in their own businesses. If that violates common sense, I think it says there is a difference between common sense in Washington, DC, and on the floor of the U.S. Senate as compared to common sense around every kitchen table in the kitchen of every working family in America. I yield 8 minutes to the Senator from Indiana, Senator Coats.

Mr. GRAMM. Mr. President, if we go back and forth----

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank our dear colleague from New Mexico for yielding. I want to make a couple of points about the President and his budget and his lack of leadership. I will only make a few points, because the President has decided to make himself irrelevant to the number one issue in the Congress by submitting a budget that over the next 5 years has the deficit explode up to almost $300 billion a year. Now, everybody has to understand that represents a total lack of leadership. Now, let me begin by talking about the President's budget 2 years ago. It was a budget that raised taxes by $252 billion, taxed Social Security benefits on Social Security families that were earning over $30,000 a year, taxed gasoline, imposed a massive tax on small business. Yet what happened to the deficit? It went up. The deficit is rising. If we went back and took away Bill Clinton's tax increase and took away the spending increases that have occurred since he has become President, the deficit would be lower today if there had been no tax increase and no spending increase. So it is true that Republicans voted against the Clinton budget because it raised taxes, and raised spending more than it raised taxes. I think it is also important, since many people are going to talk about defense--we won the cold war. We tore down the Berlin Wall. We liberated Eastern Europe. We changed the world through the leadership of Ronald Reagan. But if every penny of defense savings since 1985 had gone to deficit reduction instead of being spent, we would have a balanced budget today. So not only have we spent every penny of massive increases in taxes, but Congress and the President have spent every penny of defense savings since we won the cold war. Finally, in terms of Medicare, I will tell you one thing about our Democratic colleagues and that is they are willing to take an issue where they have no standing and cloak themselves in righteousness on it. When the President proposed a 1,300 page bill to have the Government take over and run the health care system, to reinvent the greatest health care system in the history of the world in the image of the post office, the one part of the American health care system that he chose to exclude from health care reform was Medicare. Now the Democrats tell us, look, you cannot possibly do what a bipartisan commission tells you that you have to do to prevent Medicare from going broke without having the Government take over and run the whole health care system. And yet, when they proposed that the Government take over and run the health care system, they exempted Medicare. So I am afraid their words simply do not have the ring of truth in them. What has happened to the Federal budget? If we went back to 1950 and we looked at the growth of Government's budget relative to the growth of the budget of the average family in America we see a very, very clear picture. Government's budget at the Federal level has grown 2\1/ 2\ times as fast on average as the budget of the average family in America since 1950. Let me convert that into something I think people will understand. If you went back to 1950 and you had the Federal Government's budget grow at the rate that the family budget has grown in America, our Government today would be one-third its size. If the family budget, beginning in 1950, had grown as fast as the Government budget has grown, the average working family in America would be earning $128,000 a year today. Now, I think if you ask most people if they would rather have that America or the one we have now, I think most Americans would prefer to have that America. But what the President is proposing, what our Democratic colleagues are proposing, is more of the same. The President is so committed to preserving the Government he knows and loves, programs which he has a political and emotional attachment to, that it does not matter that in the last 40 years those programs have failed. It does not matter that people on welfare are poorer, more dependent, and less happy today than they were in 1965. The President's answer is more spending on welfare. It does not matter that Medicare is going broke and a bipartisan commission, appointed by President Clinton, says that by the year 2002, we will not be able to pay the bills because the average retired couple is going to end up having expenses of over $110,000 more over their lifetime than we have in the system to pay for their benefits. The President says not to worry about it; 2002? I guess President Clinton figures he will be out of office and the roof will fall on somebody else's head. This budget worries about it. How do we deal with deficits? Basically, what the budget that is being offered on the floor of the Senate does is limit the growth of Government spending to 3.3 percent a year. In fact, if you look at this red line I have on my chart here, that is what Government spending in total looks like under the Domenici budget, the budget that the Democrats are here attacking, saying the world is coming to an end if we adopt this budget. Government spending grows every single day under the Domenici budget. It grows by 3.3 percent a year. And I submit there are a lot of working families in America who are not going to see their incomes grow by 3.3 percent a year. By limiting the growth of Government spending to 3.3 percent a year, we can balance the budget over the next 7 years. Now, we have some people who say that is enough; that is as hard a job as we can do. I believe we can do better. I believe we should limit the growth of Federal spending to about 3 percent a year so we can do what the House has done, balance the Federal budget and cut spending further so we can let working families keep more of what they earn, and so we can provide incentives for job creation and economic growth. Our people need less Government and more freedom. They need the opportunity to spend more of their own money on their own children. We need incentives for job creation. We can do that by adopting a budget which balances the budget but which cuts spending further so we can let people make investments. I hope on Tuesday to give Members an opportunity to both balance the budget and to cut spending further so we can let people keep more of what they earn.

Mr. GRAMM

Mr. GRAMM. Mr. President, Texas Secretary of State, the Honorable Antonio O. Garza, Jr., has forwarded to me a copy of a resolution passed by the Texas Legislature on March 9, 1995 and signed by Governor George Bush. The resolution petitions the U.S. Congress to propose to the States an amendment to the Constitution of the United States which protects the American flag from willful desecration. I supported the passage of such an amendment in 1990 when the Senate debated the issue and have cosponsored the most recent proposal to ban the desecration of our flag. Secretary Garza has requested that I place in the Record the text of the resolution adopted by the Texas Legislature. Because of the importance that I place on this issue, I am requesting unanimous consent that the text of the resolution and the text of a letter from Secretary of State Garza be printed in the Record in order that my colleagues have an opportunity to read for themselves this important expression of the collective will of the people of my State.

Mr. GRAMM

Mr. GRAMM. They were from all over America. In fact, I saw a lot of them from Arkansas.

Mr. GRAMM. It varied, depending on whether it was individual money or whether it was----

Mr. GRAMM. No. It varied on whether it came out of your checking account or out of the checking account of your company or your organization. You hold similar events every year, but, because the American people no longer support your agenda, your attendance is falling off. Ours is rising. But I do not feel sorry for you.

Mr. GRAMM. I certainly would. The Legal Services Corp., the Corporation for Public Broadcasting, the broad-based coalition of people who are riding in the wagon as opposed to the people who are pulling the wagon in America. Our objective is to try to put the Government on a budget, so we can let working people keep more of what they earn, so that we can have decisions made not by Washington but by American families. See, we have this idea that Democrats rejected about 40 years ago, and that is families can do a better job of spending their own money than you do for them. Now that sounds alien in Washington, DC, but in Little Rock, AR, people are beginning to think maybe that is the way we ought to do things.

Mr. GRAMM. Let me first respond by saying, I appreciate your generosity in suggesting that I might have put on such a grand fundraiser. In fact, I am no longer chairman of the Republican Senatorial Committee. I did attend. We had a lot of people there from all over America.

Mr. GRAMM. Clearly, many of them were there. They came to the event. Each individual group represents a special interest. But let me tell you the difference. What we told them we were going to do there is put the Federal Government on a budget. We were not promising to give anything away last night. We were promising to stand up for the vital interests of this Nation and, remarkably--maybe it is not true in your party, but in my party when you stand up and fight for America, there are people that are for you. I am proud of the fact, as my colleague, I am sure, knows, that in the last election cycle, when I was chairman, the average contribution to the Democratic Senatorial Committee was 10 times as large as the average contribution to the Republican Senatorial Committee because we have grassroots support. And, given the President's veto, given the President's veto of our effort to control spending, I can see why we have grassroots support and the Democratic Party does not.

Mr. GRAMM. I have to go to a hearing on Legal Services, to let them know the bad news.

Mr. GRAMM. I might. I would like to hear it first.

Mr. GRAMM

Mr. GRAMM. Mr. President, President Clinton announced today that he is going to veto the rescission package. President Clinton is going to veto our effort to reduce Government spending by $16 billion. President Clinton, who continues to talk about deficits, is going to veto a bill that cuts more spending than any rescission bill in the history of this country. Why is he going to do that? He is going to do it because he is committed politically to the special interest groups who stand to lose from our putting the Federal Government on a budget like everybody else. I think Bill Clinton should start representing the public interest and not the special interests that support the Democratic Party. I think it is outrageous, when we are running a $175 billion deficit, when the deficit is heading toward $350 billion, and the President, to defend things the way they are in Washington, DC, is going to veto a bill that cuts 16 billion dollars' worth of Government spending. The President should sign the rescission bill. He should join our effort to put the Federal Government on a budget like everybody else. Ultimately, we have to make a decision. Are we going to change the Government in order to bring back the American dream, put the Federal Government on a budget, let families keep more of what they earn, or are we going to continue to support business as usual in Washington, DC? When Bill Clinton vetoes a $16 billion cut in Government spending to protect a few pet programs, he is putting the political interests of his administration and his party in front of the interests of the people of America. I do not think the American people are going to like it; I think they are going to react negatively to it; and I think they should. President Clinton can stop us on the rescission bill. He can get Democrats to vote and sustain his veto. I think it is important that we pass the bill, that we challenge him, and that we try to override this outrageous veto. But for next year, beginning in October, we are going to be writing the appropriations bills, and so the President is not going to have the ability to veto bills unless he wants to shut down Federal departments. I think we are fast coming to the moment of truth. Are we serious about dealing with Government spending? Are we serious about putting the Government on a budget like everybody else? Or are we committed to the same old special interest groups that have dominated American Government for 40 years? By vetoing an effort to reduce Government spending to protect special interest programs, President Clinton is saying he is willing to protect business as usual in Washington. I think this is something that we have to fight because I think we are down to the basic principle on which the American people cast their votes in 1994, and I think they expect us to stand up, speak out, and fight for putting the Federal Government on a budget like everybody else. I yield the floor. Mr. PRYOR addressed the Chair.

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to. toxic harm

Mr. GRAMM

Mr. GRAMM. Mr. President, this week and next week, we are going to come down to the moment of truth on two issues. One issue has to do with putting the Federal Government on a budget like everybody else. The other issue has to do with fulfilling the Contract With America to let working people keep more of what they earn. I would like to briefly address both of these subjects. In the 1994 election, in one of the most remarkable political occurrences in the postwar period, House Republicans did something that is very unusual in the political process and that is they set out in plain English what they promised America they would do if the American people gave them a majority in the House of Representatives for the first time in 40 years. I would add that while many people have forgotten it, Republican candidates for the Senate put out a joint statement where virtually every Republican challenger for the U.S. Senate in the country came to Washington and released a ``Seven More In '94'' document, where we outlined seven things we would do if the American people gave us a majority. Two of those promised items had to do with balancing the budget and with letting working people keep more of what they earned. The House of Representatives has done something even more remarkable than making all these promises--they have actually done it. The House of Representatives has adopted the Contract With America. They have adopted 90 percent of the things they promised to simply vote on. And at the best universities in the land, you would grade that as an ``A.'' We are now down to the moment of truth in the U.S. Senate and that moment of truth basically has to do with whether or not we are going to pass the Contract With America and whether we can make the tough decisions necessary in order to do that. To balance the Federal budget over a 7-year period and at the same time to accommodate the tax cut contained in the Contract With America will require us, over a 7-year period, to limit the growth in Federal spending to approximately 3 percent a year. Over the last 40 years, Federal spending has grown at 2\1/2\ times the growth of family budgets in America. Over the last 40 years, the Federal Government has increased its spending 2\1/2\ times as fast as the average family in America has been able to increase its spending. Now what would America look like if those trends had been reversed? Well, if the average family in America had seen its budget grow as fast as the Government has grown for the last 40 years, and the Government's budget had grown only as fast as the family budget has grown over the last 40 years, the average family in America today would be earning $128,000 a year and the Government would be approximately one-third its current size. I ask my colleagues, if you could choose between the America where the governments budget grew faster or an America where the family's budget grew faster--put me down as one who would favor having the average family in America make $128,000 a year and have the Federal Government one-third its size. Here is our dilemma. We have some of our colleagues who say, ``I did not sign any Contract With America. That was the House of Representatives.'' As I am fond of saying in our private meetings, that is a subtlety that is lost on the American people. They do not see this contract as having been a contract between just the House and the American people. They see it as a Republican contract. And, quite frankly, it is a Republican contract. It embodies everything that our party claims to stand for. But what I think is important for the Senate is not just that Republican candidates signed the contract, not just that every House Republican incumbent who signed the contract was reelected but I think what is significant to us is that the American people signed that contract when they gave us a majority in both Houses of Congress for the first time in 40 years. The question that we are going to have to answer in the next 3 weeks is, are we willing to limit the growth of Government spending to 2\1/2\ percent a year so that we can, over a 7-year period, balance the Federal budget and so that we can let working families keep more of what they earn? I believe that we can and I believe that we should. I think there are many Republicans in the Senate who sort of have a problem, in that they have one foot firmly implanted in the dramatic changes in Government policy that we promised the American people in 1994, and they have the other foot firmly implanted in the status quo. And, as those two things have moved further apart, we have had the predictable result. I think it is time for us to choose. I believe in the next 3 weeks we are going to basically decide whether or not we meant it in November of 1994 when we told the American people that we were going to dramatically change the way Government does its business. I think the American people are convinced that we can limit the growth of Government spending to 2\1/2\ percent a year so that we can let families and businesses spend more of what they earn. I know if the President were here, he would say this is a debate about how much money we are spending on our children; or how much money we are spending on education; or how much money we are spending on housing or nutrition. But that is not what the debate is about. Everybody in America wants to spend money on children, housing, education, and nutrition. The debate we are about to have is not how much money is going to be spent on those things, but who is going to do the spending. Bill Clinton and the Democrats want Government to go on doing the spending. They want Government spending to continue to grow 2\1/2\ times as fast as the family budget grows. I want to put the Federal Government on a diet. I want to slow down the rate of growth in Government spending so that we can let working families keep more of their own money to invest in their own children, in their own businesses, and in their own future. the things that all Americans believe we should spend money on. It is a debate about who ought to do the spending. Bill Clinton and the Democrats want the Government to do the spending. We want the family to do the spending. We know the Government, and we know the family. And we know the difference. Since we are investing in the future of America, I want to invest the future of America in our families and not in our Government. I know that there is a lot of anguish in the Senate, even on our side of the aisle. But I think it is time to choose. I wanted my colleagues to know that I am for a budget that does two things: No. 1, over a 7- year period, limit the growth of Federal spending to about 3 percent a year so we can balance the budget in 7 years and let our colleagues do something that no current Member of the Senate, save two, has ever done before; that is, vote for a real honest-to-God balanced budget. We literally have the power, by having a 7-year binding budget, to let Members of the Senate vote to stop talking about balancing the budget and to start doing it. Second, in addition to the controls on spending necessary to balance the budget, I want to limit the growth of spending not to 3 percent a year, but to 2\1/2\ percent a year so that we can let families keep more of what they earn, so that we can cut the capital gains tax rate, so that we can eliminate the marriage penalty, so that we can let families have a $500 tax credit per child, so that, rather than having our Government spend our money for us, we can let working people spend their own money on their own children and on their own future. As we look at this in perspective, let me give you three numbers. In 1950, the average family in America with two little children sent $1 out of every $50 it earned to Washington, DC, and thought it was too much. And it probably was. Today, that family is sending $1 out of every $4 it earns to Washington, DC, and if the Congress did not meet again for the next 20 years some people would applaud that prospect, but only because they do not understand our problems. If Congress did not meet again for the next 20 years and we did not start a single new program nor repeal any existing program, to pay for the Government that we have already committed to is going to require that in 20 years $1 out of every $3 earned by the average family in America with two children come to Washington, DC, to pay for the Government. We are going to have to institute dramatic changes in spending simply to keep things the way they are. If we are to let working families keep more of what they earn, we are going to have to institute a dramatic change in Government policy. Mr. President, I am in favor of a dramatic change in Government policy. If our Budget Committee does not offer and adopt a budget that balances the budget and that provides for tax cuts for families and for job creation, I intend to offer a substitute for that budget. I think we have to stop cutting deals with America's future. I think we have to stand up and tell the American people we meant it in November 1994 when we said you give us a Republican majority in both Houses of Congress and we will change the policy of American Government. I think we are now down to a moment of truth. Are we going to fulfill the commitment we made in that election, or are we basically going to defend the status quo? The status quo means less opportunity, future jobs, and an America that is not the America that I want my children and my grandchildren to have. I am ready to change the status quo. I am ready to cut the growth in Government spending, not just to balance the budget, but to cut taxes. And what I want my colleagues to know today is I want to work with the Budget Committee, I want to work with our leadership. I am hopeful that we can put together as a party position a budget that balances the budget over a 7-year period and that mandates tax cuts contained in the contract. But, if our leadership is not ready to bring that budget forward, if they cannot muster the courage to control Government spending to make it possible, I will muster that courage, and will offer a substitute and give my colleagues the opportunity to join me, and to join America in that process. Finally, let me say, Mr. President, I simply want to remind my colleagues that the Contract With America was in fact signed by House Members, but there are two additional points. First, it was not distinctly different from the ``Seven More in '94'' contract that our candidates agreed to here on the north front of the Capitol. Second, the important part of that contract is not the fact that the House signed it. The important part of that contract is that America signed it. The important part of that contract is it was the document that defined what the 1994 election was all about. The question now, the question that will be before us for the next 3 weeks is, Did we simply want to be for dramatic changes in Government at election time, or are we willing to put our votes where our mouth is? Are we really more wedded to funding for programs such as public television, or are we more wedded to letting working people keep more of what they earn? Do we really believe that Government knows best and that we need not only a $1.6 trillion Federal budget but that we need it to grow by 7.5 percent a year while the family budget is growing at less than half that rate? I think that is the decision. I think the answer of every Republican in the Senate ought to be clear. And that answer ought to be we can change the status quo, we can limit the growth of Government spending, we can terminate programs, and we can and will not only balance the budget but let working families keep more of what they earn to invest in their own children, in their own businesses and their own future, and that we ought to cut taxes on American business to provide incentives for people to work, save, and invest. That is what I am for. I believe that is what America is for. I thank the Chair. I yield the floor. Mr. WELLSTONE addressed the Chair.