Phil Gramm

Mr. GRAMM

Mr. GRAMM. This amendment is substantially more focused than the House tax bill.

Mr. GRAMM. Mr. President, in Ronald Reagan's own words, I want to take our Democrat colleagues down memory lane. They have such fond memories of what President Clinton has done, and I would like to tell the rest of the story. It is true that Bill Clinton was elected President. It is true that he came to Washington and proposed the largest tax increase in American history. It is true that not one Republican voted for that tax increase. It is true that it passed by one vote. It is true that the largest tax increase in American history now bears heavily on working Americans. Everything else they said is not true. Let me try to explain why. They quote people saying harsh things about the Clinton program. Let me tell you the rest of the program. The rest of the program was a massive stimulus program where the Clinton administration proposed spending $17 billion, in 1993 alone, on everything from ice skating rink warming huts in Connecticut to alpine slides in Puerto Rico. I had harsh things to say about it, and I am proud of that. I am very proud that Republicans, who were in the minority, killed that bill with a filibuster. Bill Clinton didn't just propose the largest tax increase in American history, he proposed having Government take over and run the health care system, collectivizing American medicine, forcing everybody into a Government-run health care collective, which was a giant HMO run by the Government. It would have meant Government taking over one-eighth of the American economy. I said it would be a disaster. I am proud that I helped lead the effort to kill it, and I am proud that it is dead where it belongs. That is the Clinton program. The point is, we were able to defeat every part of it, except the tax increase. Now, when the Republican majority showed up in Washington, DC, in January of 1995, they received this budget from President Clinton. On page 2 of this budget, President Clinton outlines what his budget was. It had a deficit for fiscal year 1995 of $192 billion, and then the next year $196 billion, $213 billion, $196 billion, $197 billion, and $194 billion. That was the Clinton budget. But we elected a Republican majority in Congress. What happened? With that Republican majority in Congress, we were not able to pass every bit of our Contract With America, but we reformed welfare, we cut spending, we stopped the runaway spending freight train of Bill Clinton. And under a Republican majority, while Clinton's deficits looked like this, the real deficit started to fall and turn into a surplus which is indicated on the chart. The question is, Who led, who followed, and who got out of the way? I believe that the Republican Congress led, the Democrats in Congress followed, and Bill Clinton got out of the way. So if we are going to tell the history of what happened in the Clinton era, let's not just remember his tax increase, let's remember his stimulus package, which we killed. The Democrat majority could not get 60 votes, and it died. Clinton was heartbroken, but it died. And we defeated the Clinton health care bill. It would have taken over one- eighth of the American economy, and Americans were so shocked at the Clinton program that they elected the first Republican majority since the 1950s. When we took over, things changed. With the same old Bill Clinton who was here in 1995, when the deficit was $200 billion, what changed was the Republican majority. I just say to the American people, give us a Republican President, and we will again control spending, and we will let working people have more of what they earn. Mr. President, I yield Senator Hagel 5 minutes off the amendment.

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

Mr. GRAMM. Mr. President, I send an amendment to the desk in the nature of a substitute for myself, for Senator Lott, Senator Nickles, Senator Mack, Senator Coverdell, Senator Craig, Senator McConnell, Senator Inhofe, Senator Hutchison, Senator Bunning, Senator Kyl, Senator Bob Smith of New Hampshire, Senator Allard, and Senator Hagel, and I ask for its immediate consideration.

Mr. GRAMM. I yield the Senator another 3 minutes.

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

Mr. GRAMM. Mr. President, I have the highest admiration for the chairman of the Finance Committee. I am supportive of the tax cut he has crafted in committee. I intend to vote for it on final passage if this amendment fails. But I believe we need a clearer vision. I believe we need to define very precisely what we would like to use this tax cut to do, rather than running around trying to stick a nickel in everybody's pocket with a targeted program. I would prefer to have a tax cut that has clear themes and this is a very simple substitute because it consists of simply five things. So this is a tax cut that you can explain to every American, and it contains basic principles that I believe every American can understand and support. The first principle is we ought to have an across-the-board tax cut of 10 percent. Now, I know our Democrat colleagues are going to jump up and down and say, first of all, that 32 percent of American families pay no income taxes, and so if you have an across-the-board tax cut, they will not get a tax cut. And that is right. Tax cuts are for taxpayers. If you don't pay taxes and we have a tax cut, you don't get a tax cut. Most Americans don't get food stamps; most Americans don't get TANF; most Americans don't get Medicaid because they don't qualify for those programs. If you don't pay taxes, you don't qualify for a tax cut. Our Democrat colleagues are obviously going to jump up and down and say that Senator Rockefeller, who pays 10 times as much taxes as I do, with a 10-percent across-the-board tax cut, will get 10 times as big a tax cut. That is right, but he pays 10 times as much taxes. If you ask people in your church to take up money to build a new parsonage and it turned out you had taken up too much money, and you decided to give it back, isn't the logical way to give it back to simply take how much an individual gave and take the amount that you didn't need and give it back to them proportionately? So the point is, the first principle we believe in is there ought to be an across-the-board tax cut, so every American who pays income taxes will get a tax cut. Now, our Democratic colleagues have said they believe if you are rich, which means you are in the upper half of the income distribution--and they design that as roughly making somewhere around $50,000--you don't deserve a tax cut. In their proposal, you basically don't get one. I want to remind my colleagues that by excluding people who pay 99 percent of the income taxes in America, they are excluding from a tax cut 62 percent of all homeowners, 66 percent of all Americans between the ages of 45 and 64, 67 percent of all families who have children in their homes, 67 percent of all full- time workers, 68 percent of all Americans who have some college education, 69 percent of all married couples, and 80 percent of all two-wage earner families in America. Our Democrat colleagues love investment, but they hate investors. They love the benefits of capitalism, but they hate capitalists. An across-the-board tax cut gives everybody a tax cut, and if people pay a lot of taxes, they get a bigger tax cut--not proportionately, but they get the same tax cut. If that offends you, if you believe that somehow people who make over $50,000 a year are the enemies of the people and they ought to continue to be punished, you would want to be against this provision. The next thing this provision does is it eliminates the marriage penalty. Most Americans are not aware of that because our Tax Code is so perverted, if two young people, both of whom work, fall in love and get married, they, on average, pay the Federal Government $1,400 a year in taxes for the right to be married. My wife is worth $1,400, but the point is, she ought to get the money, not the Government. We eliminate the marriage penalty. Secondly, we have income splitting. Now, I know some of our Democrat colleagues are going to get up and say, well, look, if the husband earns all the money and the wife stays at home and raises the children, they ought not to get the correction for the marriage penalty. Well, we do income splitting. We have decided we don't want to inject the Tax Code in the decision about whether people work outside the home or not. My mama worked every day that I was a child, and she did it because she had to do it. My wife has worked every day that our children have been alive because she wanted to do it. I am not trying to distort the decision one way or another, or make a judgment. All I am saying is that people who stay at home and raise their children contribute to America. They make a big contribution. By allowing a couple, where only one of them works outside the home, to split their income and attribute half to each one of them--that is what the partnership of marriage is about--we are able to give them a substantial reduction in the penalty they pay for being married. The next provision is, we repeal the death tax, which is a certain kind of death penalty. I like the death penalty where we put murderers to death. I don't like the death penalty when working people die and we end up forcing their children to sell their business or their farm. All over America, people work a lifetime to build up a business or a farm, and then when they die, their children have to sell that business or sell that farm to give Government 55 cents out of every dollar they earned in a death tax. This provision repeals the death tax. Now, I know that our Democrat colleagues are going to get up and say, well, these are rich people. But I want to give you an example. When I first met a printer from Mexia named Dicky Flatt, I met him about 25 years ago. He was in business with his daddy, who worked on these old calculator machines that businesses use. His mama kept all the books, his wife basically was working in their stationery shop, and Dicky Flatt did the printing business. They had an old building in Mexia, and it was cracking right down the middle. They kept putting sand in the bottom and kept tar-papering over the top. They had one bathroom, and it didn't have a door on it; it had a curtain on it. So when you went in to use the bathroom, you pulled the curtain. Now, they worked hard in that business. So now Dicky Flatt has torn down that building. He has built a Morton building, a metal building, and he has a good size print shop and stationery shop. He sent his two sons to Texas A&M. They have come back and have gone into business with him. He works every day. He gets in at 6 and leaves about 8. He is there on Saturday until 6 o'clock. Whether you see him at the PTA, Boy Scouts, or the Presbyterian Church, try as he may, he never gets that blue ink off the ends of his fingers. Now, Dicky Flatt may be rich, for all I know. He doesn't live like a rich guy. When his brother died of cancer, he took over his school supply business with his wife. My basic point is that Dicky Flatt and Linda, his wife, have worked 6 days a week their whole lives. They built up this business. Every penny they put into it has been in after- tax dollars. How can it be right to force their two boys, who now work in that business, to sell that business when Dicky and his wife Linda die in order to give the Government 55 percent of it, in order to take the money from Dicky Flatt and give it to people who have been sitting on their fannies in Mexia, not working on Saturday, and in some cases, not working at all? I am sure we are going to hear that this is for rich people. I want to put a human face on it. When we revolted against King George, he wasn't doing things such as the death tax. This is an outrage. This is an assault on every value this country stands for, and I want to repeal it and repeal it outright. I want to index the capital gains tax. That is the fourth provision of this bill. I want to say that from this day forward, if you buy a house as an investment and the price doubles and you sell the house for twice as much as you paid for it, you haven't made any money, you simply kept up with inflation. But under current tax law, you have to pay the Federal Government a capital gains tax on the doubling of your house's price even though that new price will buy only the amount of goods you could have bought with the money for which you bought the house. So the next thing we do is index the capital gains tax for inflation. Finally, we eliminate not the last outrage in the Tax Code but it is a big outrage. If General Motors buys you health insurance, it is tax deductible for them, but if you buy it for yourself, it is not tax deductible. We eliminate that by saying that no matter who buys health insurance in America, the employer or the employee, a retiree or a worker, a homemaker or someone who is employed in the economy, that health insurance is tax deductible. It is a simple tax cut that you can put on one piece of paper. If you pay taxes, you are going to get a 10-percent reduction in income taxes out of this bill. It is easy to figure. If you pay $1,000 in income taxes, you are going to get $100. If you pay $10,000, you are going to get $1,000. If that breaks your heart, so be it. I think most people will like it. Second, we eliminate the marriage penalty and we allow income splitting. If you have one parent who stays at home, you are able to divide the income in half and have each of them claim half that income that belongs to them. This is endorsed by every family group in America because it is the right thing to do. We repeal the death tax outright over a 10-year period--no ifs, ands, or buts. If you live 10 more years, under this bill, and you build something with after-tax dollars, it belongs to your family forever. That is simple arithmetic. I think we can all understand it. We index the capital gains tax so that you never pay capital gains tax again on inflation. This is a big issue for every homeowner and for every investor in America. Finally, we provide full deductibility of health insurance. This is an equity issue. It is something that ought to be done. This is a tax cut you can understand. It represents what I believe is the vision of the party of which I am proud to be a member. I hope my colleagues will vote for this substitute. I believe it represents a dramatic improvement and simplification in the Tax Code. I reserve the remainder of my time.

Mr. GRAMM. Mr. President, I yield 10 minutes to the distinguished Senator from Tennessee.

Mr. GRAMM. Will the Senator yield to correct a factual error? First of all, there is nothing wrong with the House tax bill.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank the chairman of the committee for yielding me so much time and for letting me speak last on our side as we begin the amendment process. We have heard some awfully strong language here. Our colleague from West Virginia begs us not to give Americans back some of this money that we have taken from them in taxes. We are projecting a $3 trillion surplus over the next 10 years. Nobody disputes that. We have before us a bill that would give about 25 cents out of every dollar of the projected surplus back to taxpayers. Our Democrat colleagues say: Please, don't do that. Our President is quoted in AP on July 25 as saying that our effort to give 25 cents out of every dollar of projected surplus over the next 10 years back to working people in tax cuts ``will imperil the future stability of the country.'' In fact, yesterday the President said it would hurt women's health care. Perhaps today it will be that it will bring back the bubonic plague. But it is clear that the President is against giving back 25 cents out of every dollar of surplus--out of every dollar we are taking in above what the Government needs. He thinks giving back 25 cents out of every dollar is too much. Our Vice President says that the tax cut before us is a ``huge, gigantic, risky tax scheme.'' This is very extreme language we are hearing. Let me try to explain why it is so shrill. It is shrill for two reasons, really. No. 1, giving people back their money so they can spend it themselves rather than Government spending it for them hardly seems extreme to the American people. With the projected surplus of $3 trillion, giving about one-fourth of it back in tax cuts hardly seems extreme. But the other reason the President and his supporters are so shrill is, the President is not telling the truth. Let me explain why. I have a chart here that has the cover page and one page of text of the analysis of what is called the Mid-Session Review. This is an analysis by the nonpartisan Congressional Budget Office that was just completed of the President's budget; that is, what he proposes we do with the surplus, what the budget adopted by the Congress proposes we do with the surplus; and then it compares the two. The important point being, this is not me talking, this is not Bill Clinton talking, this is the nonpartisan Congressional Budget Office talking. To listen to the President and to listen to our Democrat colleagues, you get the idea that this is a debate between cutting taxes and paying down debt. The problem is, that is not what the debate is about. This White House has turned misinformation into an art form. Here is the living proof of it. In the analysis of the Mid-Session Review that was just published by the Congressional Budget Office, the Congressional Budget Office basically has two findings. One, while the President had initially proposed spending some of the Social Security surplus, we have so shamed the administration that they now have agreed with us that the roughly $2 trillion of surplus caused by Social Security should be set aside to either pay down debt or to fix Social Security. It is interesting that we have voted many times on a lockbox procedure to require that that money not be spent, and we have been unable to get the support of the minority in making that the law of the land. But that is something that at least to this point we have agreed on. Where the disagreement is--and the Congressional Budget Office shows it very clearly--is, what do you do with the non-Social Security surplus? Basically, what the Congressional Budget Office finds, that the administration desperately does not want anybody to know, is that their answer is, spend it. They are not paying down any debt with the nondefense discretionary surplus. In fact, over a 10-year period they spend every penny of it. And they spend so much money in their budget that in 3 of the years they have to plunder the Social Security trust fund, basically, in contrast to what they have committed to do. In fact, the Congressional Budget Office concludes, in looking at their own budget--and, again, this is the nonpartisan CBO--that in total, the President, over the next 10 years, would spend $1.033 trillion of the non-Social Security surplus, which is a little more than the entire surplus. So when our colleagues are saying, don't give money back to taxpayers, pay down the debt, they are not talking about their program. The problem is, and the frustration is, if the President stood up and told the truth and said, don't give this money back to families, let me spend it, don't give this money back to working couples because they can't do as good a job spending it as the Federal Government could, then we could have a meaningful debate. But it is hard to have a meaningful debate because the administration basically is engaged in a concerted effort to mislead people. But numbers and facts are persistent things. The Congressional Budget Office concludes two things about the Clinton budget that are devastating. No. 1, it would spend an additional $1.033 trillion more than the budget we have adopted and the spending caps to which the President is committed. Secondly, and equally devastating, despite all this talk about buying down debt, with Chairman Roth's tax cut, the budget adopted by Congress, which includes this tax cut, still pays down the Federal debt $219 billion more than the President's budget. Why? Because Senator Roth's tax cut gives $792 billion back to working families. The President's budget spends $1.033 trillion. As a result, even after the tax cut, the Republican budget reduces debt held by the public by $219 billion more than the President's budget. So his rhetoric is great. His sound bites are flawless. But the point is, he is not telling the truth. The reality is, the President proposes to spend every penny of the discretionary surplus on Government programs and plunders Social Security for additional money in 3 out of the next 10 years. So the debate is not between reducing debt and cutting taxes. The debate is between letting Government spend the money or letting the taxpayer spend the taxpayer's own money. But in addition to that, the tax cut that is being called ``huge,'' ``vulgar,'' ``dangerous,'' by President Clinton and his supporters is actually substantially smaller than the massive spending spree the President would take us on with 81 programs. I ask you, how can it be more dangerous to start to cut taxes by $792 billion with a trillion-dollar surplus than it is to fund 81 programs and spend $1.033 trillion? Obviously, no one can argue that it is even equally dangerous. So what does the President do? He basically does not tell the truth. Point No. 2, let's talk about: Why a tax cut now? This chart really shows the highest 7 years in American history, in terms of the tax burden on working American families. The highest tax burden in American history by the Federal Government was in 1945 when Harry Truman was President. By the way, 38 cents out of every dollar earned in America is what we were spending on defense in 1945. That was the highest tax burden in American history. The second highest tax burden in American history is today. Under President Clinton, in the year 2000--which is the budget year we are considering--the Federal Government will take 20.6 cents out of every dollar earned by every American. That is the second highest Federal tax burden in American history. The third highest is under President Clinton in 1999. The fourth highest was under President Clinton in 1998. The fifth highest was under Franklin D. Roosevelt in 1944, when defense was 37 percent of the economy. The sixth highest was under Bill Clinton in 1997. Hence, why we have on this chart ``Cause of Record Taxes: War and Clinton.'' The seventh highest tax burden in American history was the day Ronald Reagan became President. What did we promptly do? We cut taxes by 25 percent. So we have never had, except under President Clinton, tax levels approaching the level we have today. Now, in terms of this ``dangerous'' tax cut, this is probably the most telling chart of all. The day Bill Clinton became President, the Federal Government was taking 17.8 cents out of every dollar earned by every American in Federal taxes. Today, we are near an all-time record of 20.6 cents out of every dollar earned by every American. Hence, since Bill Clinton has been President, with the 1993 tax increase as people have moved into higher tax brackets, the tax take on the American people has grown from 17.8 to 20.6 percent. Now, if we took every penny of the non-Social Security surplus, which is $1 trillion, under current services, actually, bigger if you take a spending freeze, but if we took every penny of that, and we are not proposing that here--we are talking about $792 billion, not over $1 trillion--but if we took the entire trillion and gave it back in tax cuts, 10 years from now, when that tax cut is fully implemented, taxes would still be 18.8 percent of the economy, and taxes would still be substantially above where they were the day Bill Clinton became President. So when he is calling this tax cut ``dangerous and huge,'' it is a tax cut that would not get us back, in terms of tax burden, to where we were the day Bill Clinton became President. It would still mean the tax burden during the Clinton administration, even with this tax cut, would have grown by more than in any modern Presidency. Let me address the idea that this is a huge, dangerous tax cut. It is very interesting how people make up these things and nobody goes and looks it up. But let me give you some figures. We are projecting next year, the first year of this tax cut, that revenues are going to be $1.9 trillion. We are going to collect that much in taxes. This tax cut next year is a whopping $4 billion. So out of $1.905 trillion of taxes we are going to collect, this would give $4 billion back. That is .21 percent. Now, that is the ``huge, dangerous'' tax cut about which we are talking. It is implemented over a 10-year period. But over that entire period, what is being called a ``dangerous'' tax cut would reduce taxes on the American people by 3.48 percent. So it is less than a 3.5-percent reduction in taxes, far less than President Clinton would increase government spending, I remind my colleagues, and somehow that is ``dangerous.'' Well, it is dangerous if you are Bill Clinton, because if we give this money back to the American people, he can't spend it. There are 81 programs he would like to have that he won't get. What the President should be asking, rather than misleading people, is: Here are my 81 programs. This is what I am going to do for you. I love you and this is what we are going to do for you. And we ought to be forced to say: We are going to give you this tax cut, and we are going to let you decide how to spend it. The people could look at the President's 81 programs and look at our tax cut and they can say, ``I would rather President Clinton do it,'' or ``I would rather do it myself.'' That is the legitimate debate we ought to be having. But we are not having it because the White House continues to mislead the American public. Let me make a few other points. Our colleagues keep talking about tax cuts for the rich. I have noticed there is a code here: Any tax cut is for the rich. Any tax increase is a tax on the rich. So when the Democrats pushed through the largest tax increase in American history when they last had a majority, in 1993, that was a tax on the rich. Remember? Well, it raised taxes on gasoline for everybody. Do only rich people drive cars and trucks? I don't think so. It defined as ``rich'' anybody who made $25,000 a year or more because that is the tax it put on Social Security. Now, I don't know about some of the States that people may represent, but where I am from, $25,000 a year is not rich. But to our Democrat colleagues, obviously, since the Clinton tax increase was a tax on the rich, $25,000 in income made you rich. According to them, our tax cut is for rich people. They get very excited about the fact that they have discovered when you cut taxes, people who don't pay income taxes don't get tax cuts. In fact, they will point out, I am sure a hundred times here, that 32 percent of American families pay no income taxes, which I personally think is an outrage. I think everybody ought to pay something. But 32 percent of American families pay no income taxes, and their obvious question is: Well, under your tax cut, 32 percent of families don't get a tax cut; how can that be fair? Let me explain why it is fair. These taxpayers don't get food stamps, the great majority of them. They don't get Medicaid. And unless they are elderly, they don't get Medicare. They don't qualify for those programs. Our point is that tax cuts are for taxpayers. When we are cutting taxes, if you don't pay income taxes, you should not expect to get a tax cut. Some of our colleagues would like you to believe the Roth package benefits the rich relative to the poor. Well, the plain truth is that the Roth package makes the tax system more progressive, not less progressive. Now, it is true that when you cut taxes, people who pay taxes get to keep more; people who don't pay taxes don't get a tax cut. But our colleagues have basically discovered that, over the years, we have made the tax code more and more and more progressive. In fact, today, the top 50 percent of income earners in America pay 99 percent of the income taxes. So is anybody surprised that, when the top 50 percent pay 99 percent of the income taxes, that when you cut income taxes, the top 50 percent tend to get more tax cuts? In fact, our colleagues like to rant and rave about across-the-board tax cuts by saying, well, a 10-percent tax cut means that Senator Rockefeller, who pays at least 10 times as much in taxes as I do, would get 10 times as big a tax cut. I am not offended by that. If he pays 10 times as much, and we have an across-the-board cut, he would get 10 times as big a tax cut. Let me run over these figures real quickly so people understand. The top 1 percent of income earners in America earn 16 percent of all the income earned, but they pay 32.3 percent of all the taxes. The top 5 percent earn 30.4 percent of all the income earned, but they pay 50.8 percent of the taxes. The top 10 percent earn 41.6 percent of the income earned, but they pay 62.4 percent of the taxes. Should anybody be shocked when you cut taxes, when the upper 50 percent of American income earners pay 99 percent of the taxes, and they are going to get most of the tax cut? Only our Democrat colleagues and the President would be outraged about that. Our view is that tax cuts are for taxpayers. Who is rich? I decided to look at this top 50 percent of income earners and basically ask: Who are these rich people who the Democrats think should not get a tax cut? Let me go down who they are. They are the 50 percent of people who pay roughly 99 percent of the income taxes. They are 62 percent of all homeowners in America. They are 66 percent of all people between the age of 45 and 64. They are 67 percent of all full-time workers in America. They are 68 percent of all workers who went to college. They are 69 percent of all married couples. And they are 80 percent of all two-earner households in America. These are the people who the Democrats tell us are unworthy and should get no tax cut--that these are rich people and they deserve no tax cut. They pay 99 percent of the income taxes, but they deserve no tax cut. Let me tell you what the code is. The Democrats are always for a tax increase, and the tax increase, no matter who it is imposed on, is always a tax on the rich. They are always against the tax cut, and the tax cut always goes to the rich, and that is basically the code. When you break through the code, the code is they are for tax increases. They are not for tax cuts because they believe the Government can do a better job of spending your money than you can. The final two points: We often hear from our colleagues that this is the worst tax cut since the Reagan tax cut of 1981. This is the worst tax since the Reagan tax cut. Do we want to do it again? Let me remind my colleagues the day Ronald Reagan became President, an average family in America making $50,000 a year was paying $12,626 in Federal income taxes. They were paying 25 cents out of every dollar they earned. Thanks to Ronald Reagan, today they are paying $6,242, or 12.5 percent. The Democrats think that was terrible. This is the worst tax cut since Ronald Reagan. They must have liked the tax burden under Jimmy Carter. They must have liked the 21-percent interest rates under Jimmy Carter. They must have liked the 13 percent inflation rate under Jimmy Carter. But we had sense enough to end that policy and let working people keep more of what they earn. Final point: Alan Greenspan's statements have become similar to the Bible--nobody reads them very closely, and everybody quotes them. They quote him on both sides of the argument. I would like to let him speak for himself. I would like to do it in the context of what the President has proposed. Alan Greenspan said: If you find that as a consequence of those surpluses they tend to be spent, then I would be more in the camp of cutting taxes, because the least desirable is using those surpluses for expanding outlays. When the President is proposing increasing spending by $1 trillion over the next 10 years, don't we find ourselves in a position where the surplus is being spent? The answer is obviously, yes. It is being spent just as fast as it can be spent. Then Alan Greenspan is in favor of giving part of it back--in this case a very conservative amount, 25 cents out of every dollar we have in surplus. I think we should do it. I think it is the responsible thing to do. I believe we will do it. If this is taking us back to the terrible days of lowering the tax burden, I am ready to go back.

Mr. GRAMM. Mr. President, I think there are a lot of ways you can argue this point. The Byrd rule, as the distinguished Senator from Montana argued, is to try to protect us from provisions that have not been debated, provisions that have not been considered in committee, but provisions that show up in a reconciliation bill where we have rules that are distinctly different from the Senate rules, principally, that you have limited debate for 20 hours and that, therefore, you can't filibuster it and, therefore, you don't have to have 60 votes to pass it. I am a supporter of the Byrd rule. I think it is a good rule, and I think it is a rule aimed at exactly the kind of offense that the Senator from Montana is talking about; that is, issues that have not been widely debated, issues that have not been considered in committee, and issues that have not had a full airing of public opinion. But can anybody argue that any one of those points applies to this tax bill? Does anybody here believe this tax bill has not had a full airing of public opinion? The President, daily, issues some new statement. Yesterday, it was going to be the end of health care for women in America if we cut taxes. For all I know, by this afternoon there could be a new coming of the bubonic plague if we cut taxes. Daily, the Vice President comments on it. We have had a running debate now for weeks on this issue. We held extensive hearings in the Finance Committee on the issue. We held a markup. We have had extensive debate. Nobody in America has any doubt as to what we are doing in this bill. So my point is that all the reasons we have the Byrd rule, all the reasons that were adequately explained by the Senator from Montana, are good reasons to strike provisions from a reconciliation bill. And that is, if the provisions have not been widely discussed, if the public is not generally aware of them, if there have not been committee hearings and a markup on them, you don't want to give them the special privilege of being in a reconciliation bill. But surely I don't have to make a lengthy argument to convince people that none of those points apply here. It is true that our Democrat colleagues, using this technicality, can force us to sunset this tax cut in 10 years. They can do it. And in doing so, we have the tax cut for 10 years. Nobody believes the Congress or the American people will just allow them to fall off the end of the Earth in 10 years. It is not the complete undoing of our tax cut if this point of order should be sustained. I don't know that it would be of great practical importance. But I simply say that on an issue that is the No. 1 issue in the country, on an issue that has been extensively debated, on an issue where we held hearings and a markup, on an issue where every American knows the subject is being debated--it is referred to on a minute-by-minute basis on most of the major outlets for news in America--there is no logic to sustaining this point of order. I really see this as creating instability in the Tax Code. It wasn't our intention to raise a similar point of order against the Democrats' bill. Basically, it seems to me they have a right to propose a permanent tax cut. We could have raised a point of order against such a tax cut if it had been proposed. We would not have done it--basically believing they ought to have a chance to say to the Nation what their vision is. We know their vision. They want to spend this money and they don't want to give it back. It is perfectly legitimate; I just don't agree with it. I hope our Democrat colleagues will not take this technicality as an opportunity to create a Tax Code that is in effect for 10 years and, at the end of 10 years, it goes away. I think it is unstable. I think it is an irresponsible way of doing it. I don't object. The minority has the right to do this. If we can't get 60 votes, they have every right under the rule to do it. It doesn't undo our tax cut. It is not the end of the world. It certainly makes what we are doing still of great importance. I argue to those who have not hardened their hearts to a tax cut to allow us to have a permanent tax cut. If you are not for it, vote against it. We are willing to let you offer a permanent tax cut. So that is really the issue. The Byrd rule technically applies to this provision, but the logic of it does not apply. Therefore, I argue that we should waive the point of order, and that is going to take 60 votes. There are 55 Republicans, so if every Republican voted to waive it, we would have to get five Democrats. My argument is, if you are against the tax cut, great; it is perfectly legitimate to be against it. But don't use a technicality to try to undermine a legitimate proposal, which has been debated extensively, which is known to virtually everybody who hasn't been hiding under a rock for the last 6 months; don't use a provision of law that is really aimed at preventing extraneous material from getting into the bill to undermine basically, at least today and tomorrow, and I think for a long time, the No. 1 issue in the country. I hope our Democrat colleagues who are not just hell-bent against a tax cut will vote to waive this point of order so we don't have the absurdity of adopting a tax cut and have it temporary and have it end in 10 years. Hopefully, we are going to have an opportunity to improve this during 10 years. I am still for it if it is sunset in 10 years. But I don't think this is good policy, and I urge my colleagues to rise above the politics of the moment and vote for good policy. I reserve the remainder of our time.

Mr. GRAMM

Mr. GRAMM. Mr. President, today I am joined by Senators Lott and McConnell in introducing the New Workers for Economic Growth Act, which will increase the number of H-1B temporary work visas used by U.S. companies to recruit and hire foreign workers with very specialized skills, particularly in high technology fields. In addition, the legislation eliminates the reduction in Social Security benefits now imposed on individuals aged 65 through 69 who continue to work and whose earnings exceed $15,500 annually. This bill will ensure that the U.S. economic expansion will not be impeded by a lack of skilled workers. With record low unemployment, many U.S. companies have been forced to slow their expansion, or cancel projects, and may be forced to move their operations overseas because of an inability to find qualified individuals to fill job vacancies. We will achieve our full economic potential only if we ensure that high-technology companies can find and hire the people whose unique qualifications and specialized skills are critical to America's future success. Last year, the Congress increased temporarily the number of annual H- 1B visas from 65,000 to 115,000 for Fiscal Years 1999 and 2000, and to 107,500 in 2001. The number of H-1B visas is scheduled to drop back to 65,000 for Fiscal Year 2002 and subsequent years. The New Workers for Economic Growth Act will increase the H-1B visa cap to 200,000 for Fiscal Years 2000, 2001 and 2002. By the end of that period, we will have the data we need to make an informed decision on the number of such visas required beyond 2002. The bill retains the language of current law which protects qualified U.S. workers from being displaced by H-1B visa holders. According to a recent study by the American Electronics Association (AEA), Texas has the fastest growing high technology industry in the country and is second only to California in the number of high technology workers. This legislation will ensure that these companies have access to highly skilled, specialized workers, in order that such businesses can continue to grow and prosper, and in doing so, create jobs and opportunity for U.S. workers. Additionally, our bill expands work opportunities for America's retired senior citizens by removing the financial penalty which is now imposed on those who choose to continue to work while receiving Social Security and whose wages exceed specified levels. The Social Security earnings test robs senior citizens of their money, their dignity, and their right to work, and it robs our Nation of their talent and wisdom. I believe that this legislation represents a fair and effective way to address a critical need in our Nation's economy, and I hope my colleagues will quickly approve this important proposal.

Mr. GRAMM

Mr. GRAMM. Mr. President, today I am joined by Senators Lott and McConnell in introducing the New Workers for Economic Growth Act, which will increase the number of H-1B temporary work visas used by U.S. companies to recruit and hire foreign workers with very specialized skills, particularly in high technology fields. In addition, the legislation eliminates the reduction in Social Security benefits now imposed on individuals aged 65 through 69 who continue to work and whose earnings exceed $15,500 annually. This bill will ensure that the U.S. economic expansion will not be impeded by a lack of skilled workers. With record low unemployment, many U.S. companies have been forced to slow their expansion, or cancel projects, and may be forced to move their operations overseas because of an inability to find qualified individuals to fill job vacancies. We will achieve our full economic potential only if we ensure that high-technology companies can find and hire the people whose unique qualifications and specialized skills are critical to America's future success. Last year, the Congress increased temporarily the number of annual H- 1B visas from 65,000 to 115,000 for Fiscal Years 1999 and 2000, and to 107,500 in 2001. The number of H-1B visas is scheduled to drop back to 65,000 for Fiscal Year 2002 and subsequent years. The New Workers for Economic Growth Act will increase the H-1B visa cap to 200,000 for Fiscal Years 2000, 2001 and 2002. By the end of that period, we will have the data we need to make an informed decision on the number of such visas required beyond 2002. The bill retains the language of current law which protects qualified U.S. workers from being displaced by H-1B visa holders. According to a recent study by the American Electronics Association (AEA), Texas has the fastest growing high technology industry in the country and is second only to California in the number of high technology workers. This legislation will ensure that these companies have access to highly skilled, specialized workers, in order that such businesses can continue to grow and prosper, and in doing so, create jobs and opportunity for U.S. workers. Additionally, our bill expands work opportunities for America's retired senior citizens by removing the financial penalty which is now imposed on those who choose to continue to work while receiving Social Security and whose wages exceed specified levels. The Social Security earnings test robs senior citizens of their money, their dignity, and their right to work, and it robs our Nation of their talent and wisdom. I believe that this legislation represents a fair and effective way to address a critical need in our Nation's economy, and I hope my colleagues will quickly approve this important proposal.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me make a point that I think goes right to the heart of the statement by the President that something is extreme about our fairly modest tax cut. I have a chart here that I wish every American could see and understand. It shows the percentage of the economy that was coming to Government the day Bill Clinton became President. The day Bill Clinton became President, the Government was collecting in taxes 17.8 cents out of every dollar earned by every American. As you will recall, in 1993, we had a very big tax increase, and with the growth in the economy, the Government is now taking in 20.6 percent of every dollar earned by every American. If we took the entire surplus-- not the $794 billion being proposed by Republicans, but the whole $1.33 trillion, or whatever it is--if we took the whole surplus, which we are not proposing to do, and gave it back in a tax cut, 10 years from now, when it was fully implemented, the Federal Government would still be taking 18.8 percent of every dollar earned in taxes, which is substantially more than it was the day Bill Clinton became President. So what Bill Clinton is calling a ``dangerous, huge tax cut'' is actually a relatively modest tax reduction as compared to the tax increase and revenue growth that has occurred in the 6\1/2\ years that Bill Clinton has been President, even if we cut taxes by the amount of the entire surplus, which we are not proposing to do. But even if we did, the tax burden would still be higher than it was the day Bill Clinton became President. That is a point I think people need to understand.

Mr. GRAMM. You are using Social Security.

Mr. GRAMM. Will the Senator yield before he gets into his closing remarks?

Mr. GRAMM. Mr. President, I want to say a few words about taxes. I want to deviate from my background in schoolteaching to be brief because I have to run over for a 2:30 meeting on the banking bill and I want to hear a little bit of what the Senator from New Mexico has to say before I leave. We are beginning a debate that is a very proper and important debate. I am frustrated in this debate because, in trying to discuss this issue with the White House, we have a concerted effort on their part to try to confuse the issue and mislead the American people as to what the choices are. I want to direct my comments to the choice we face. Basically, we have the great and good fortune of having two things that have occurred at the same time. No. 1, beginning in the mid-1980s we started the process of gaining control over spending. It was not a dramatic change in policy, but over the years we have seen a gradual slowdown in the rate of growth in Government spending, beginning in the mid-1980s. In the early 1990s we started to see an explosion of productivity as modern technology became incorporated in the workplace in America, and the result has been rapid economic growth and, with that economic growth, a growth in Federal revenues. We therefore have a situation which anyone would dream of having during their period of service in public life, and that is, we have a very large budget surplus. Initially, the President proposed spending part of the surplus that comes from Social Security. I am proud to say that Senator Domenici, I, and others rejected that, and finally the President reached an agreement with us, in the best spirit of bipartisanship, that we were not going to spend the Social Security trust fund. We are trying to lock that into law in the so-called Social Security lockbox. We have an agreement with the President on the principle. We have not reached an agreement with the President and with the minority party in the Senate on exactly how to lock it up, but we are working on that. The debate we are beginning today is a debate about what to do with the surplus that comes from the general budget that does not come from Social Security, and, try as they may at the White House to confuse the issue and to mislead the public, there really are two stark choices being presented to the American people. The first choice is presented by the President and his administration. In regard to what is called the President's mid-session review, the Congressional Budget Office, which is the nonpartisan budget arm of the Congress, reviewed both the Republican budget and the budget submitted by the President. They concluded that the President's budget proposes $1.033 trillion worth of new Government spending on approximately 81 new programs, above and beyond increases for inflation. That $1.033 trillion of new spending that the President's budget has proposed is so big that it not only uses up, for all practical purposes, the non-Social Security surplus, but in 3 of the next 10 years it will require plundering the Social Security trust fund or running an outright non-Social Security deficit because the level of spending is too big. As an alternative, Republicans have proposed that out of the $1 trillion non-Social Security surplus, we give $792 billion back to the working people of America who sent the money to Washington to begin with and that we keep $200 billion plus to meet the basic needs of the country and to meet uncertainties we might face. That is a pretty clear choice. The President's budget says spend $1.033 trillion on new Government programs. That is how they would use the non-Social Security surplus. Our proposal says, take about 80 percent of it and give it back to working people in broad tax cuts and keep 20 percent of it to meet critical needs and to deal with contingencies. If that were the debate we were having, Republicans might be winning the debate, we might be losing the debate, but we would be having a meaningful debate. The problem is, the administration continues to mislead the American public and basically to claim they are not proposing to spend this money. While proposing $1 trillion of new spending, they say that, by giving less than $800 billion back to the public in tax cuts, in the words of the President, we ``imperil the future stability of the country.'' This is quoting the President at a fundraiser, naturally, in Colorado, that by giving this $800 billion back in tax cuts, we ``imperil the future stability of the country.'' Yet to spend $1.033 trillion on new programs, the President would do wonderful things for the country. If the President were honest enough to stand up and say, Don't let Senator Domenici, don't let Senator Lott, don't let Senator Gramm give this money back to working people, let me spend it, I would have no objections to the debate. But I have to say that it begins to grate on a person when day after day after day this administration says things that are verifiably false with a level of dishonesty in public debate that is without precedent in the history of this country. No administration in debate on public policy has ever been as dishonest as this administration is. When you look at the actual numbers in their budget and then listen to what they are saying, it is as if we are talking about two totally separate budgets.

Mr. GRAMM

Mr. GRAMM. I do not believe I will. It is something that should be looked at. I remind our colleague from Nevada that our effort today is not to change the rules of the Senate but to put the rules back where they were before we overrode the Chair on the endangered species provision to an appropriations bill, now several years ago. Senator Byrd has raised a critically important issue. Too much work is done in conference. Anyone who has ever chaired a conference--and I am relatively new at it as a new committee chairman--immediately discovers that the only rule of the conference is you have to get a majority of the members to sign the conference report. Other than that, for all practical purposes, there are no rules. This should be looked at, but I am not ready today to change the rules of the Senate. I am ready to go back and undo a mistake that we made some 4 or 5 years ago. I will be willing to look at this. I will be willing to study it, to participate in a discussion about it. We ought to hold hearings on it and look at it, but I am not ready to overturn the rules of the Senate today.

Mr. GRAMM. Yes.

Mr. GRAMM. Mr. President, he can make it on my time.

Mr. GRAMM. I had intended to use less than that. The Senator can get any amount of time he wants.

Mr. GRAMM. We are always kind to the Senator from West Virginia for two reasons: One, we love him; and, two, we know that we had best not be unkind to him because we know he is smart and tough.

Mr. GRAMM. I will be happy to yield very briefly.

Mr. GRAMM. Mr. President, Senator Domenici and I are here to talk about the tax cut, but I cannot listen to our dear colleague from West Virginia without giving a little bit of response. First of all, I agree with virtually everything the Senator from West Virginia has said. I do believe we tread on our institution and we potentially reduce its ability to preserve our freedom and our Republic when we engage in partisan politics. I agree with virtually every word Senator Byrd said. We all know we have used the appropriations process to offer amendments that were not part of any national agenda, that did not represent any real debate on behalf of causes, but in many cases both parties have engaged in the kind of politics where the minority--and that minority changes sides from time to time. I hope that will not occur in the future, but knowing institutions as I do, I am sure it will. What happens is, too often, the minority delays the work of the majority, and then at the time for electioneering accuses the majority of not getting its work done. If we ought to preserve this great institution and all we love about it and all it stands for for America, one of the things we have to do is to prevent partisan abuse of the system. When we voted to overturn the Chair now several years ago, I was very reluctant to overturn the Chair. I found myself in a position of having a colleague who had offered an amendment with which I strongly agreed and who also was in a position where it was critically important to her to see the Chair overturned. I knew no good could come out of it. I thought it would be easier to fix than it has turned out to be. I intend to vote to fix it today. I do not believe we ought to be legislating on appropriations bills. The distinguished Senator from West Virginia is correct in that it has become so easy for the authorization process to be disrupted that we have virtually trivialized authorizations. Authorization committees often go an entire term without having any kind of authorization bill passed. Legislation builds up, we end up putting it on appropriations bills, and in doing so, we also hurt the institution. I have heard every word our colleague from West Virginia has said. I believe we do need to set a threshold for offering legislation on an appropriations bill. It can be overcome with 51 votes. But every Member has to know that when they do that, when they overrule the Chair, they open that avenue for anyone else to do it in the future. In doing so, we take down a small shield which I think is as big as it needs to be, because there are times when the minority deserves the right to speak, and if they feel strongly enough about it and they can convince a majority to do it, they have a right to do it. I intend to vote today to put rule XVI back into place. I do not intend to be in any hurry to see it pulled down again because it is a very good and important barrier.

Mr. GRAMM. Mr. President, I yield myself 20 minutes.