Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. I would like to thank the gentleman from Wisconsin. I have a chart of my own I would like to show. I really like the way we are going at this, by talking a little bit about where we were, where we are and where we are going. I think the gentleman is absolutely right. I was home over the Fourth of July break. We were in about six parades, at a lot of community festivals, including Spam Jam, had a wonderful time in Austin, MN, on Saturday, but in talking to a lot of folks, there is a good deal of cynicism. On one hand I think they are very happy that they think that we are getting closer to a balanced budget, but they have had their hearts broken before. I want to show this chart, and I hope people can see this, because what it shows is a history. Benjamin Franklin said, ``I know no lamp by which to see the future than that of the past.'' The track record of Washington and the track record of Congress over the last 30 or 40 years has not been very good. What this chart shows is between 1975 and 1995, the red lines show how much Congress spent for every dollar that it took in. What it really translates to on average between those years of 1975 and 1995, for every dollar that Congress took in, they spent $1.22. That is the bad news and it is the truth. But if we look at the blue lines, that is since the gentleman and I came to Congress. We said that we are going to change the way Washington works, we are going to make the Federal Government go on a diet, we are going to eliminate wasteful Washington spending, and we are going to balance the people's books. I am happy to report that we are making real progress. If we look at these blue lines, there are two things that I think are good news. First of all, the amount that we spend in excess of what we take in is coming down dramatically, and frankly we are ahead of schedule. I think the gentleman may have another chart on that. But if we look at it since we came to Washington, the average is about $1.075 as opposed to $1.22 over the last 20 years. So we are making progress, but I think the American people have every reason to be cynical. But as Patrick Henry once said, ``The price of liberty is eternal vigilance.'' The real critical path is that we stay on this path as we go forward. The bad news is that if we had not made some serious changes in the way Washington works, if we had not been willing to make some changes both in entitlements and in domestic discretionary spending, the truth of the matter is we were going to absolutely consign our kids to a life of debt, dependency and despair and a lower standard of living. For the first time a growing number of Americans were saying that they believed that their kids would actually have a lower standard of living than they have enjoyed. That is just plain wrong. That is the essence of the American dream. The bad news is Congress had not done a very good job over the last 40 years. We have not done everything right. I certainly do not want to say that we have not made some pretty serious mistakes, but I think on balance we are heading in the right direction. We have eliminated something like 289 Federal programs, we have saved the taxpayers in excess of $50 billion, and thanks to that, there is more consumer confidence. It is not just consumers, but there is more confidence on Main Street and on Wall Street and in the business community. We are seeing more investment, we are seeing more jobs, and so we are taking in more revenue. The real name of the game, you cannot tax yourself to prosperity. What we need is economic growth. As a result of the growth that we have seen over the last couple of years, yes, the deficit is coming down dramatically, we are on the right path, we are ahead of goal, we are under budget and we have got to keep the pressure on to stay that way.

Mr. GUTKNECHT. If the gentleman would yield, let me go back to a couple of points, because again we understand why the American people are cynical. They should be cynical. But let us just talk about a couple of numbers, and I think you were the first one to really discover this, and in fact I think we should also point out that I think all of your charts have been verified by the Congressional Budget Office. I mean you did not make these numbers up. Those are the actual numbers, and the Congressional Budget Office is the nonpartisan, bipartisan group which is in effect the official scorekeeper for Congress. So when we talk about budget numbers, when we talk about limiting the growth of Federal spending to 3.2 percent, that is what the Congressional Budget Office says. And more importantly, another point that is many times demagogued is that we are making these huge cuts. The truth of the matter is Federal spending is still growing at faster than the inflation rate. And what we said, I know when I first ran I said we could balance the budget if we would simply limit the growth of Federal spending to slightly more than the inflation rate, and still allow for those legitimate needs of the people who depend on the Federal Government and our legitimate needs for national defense and so forth. We can do all that and make room for a modest amount of tax relief for working families, and that is exactly what we are doing. But you are the first one to really discover how much a difference we have actually made because, as you recall, back in 1995 we said that in fiscal year 1997, which we are in right now, this Congress would spend $1,624 billion. Well that, you know, is what we said 2 years ago, and that was legitimate, and I think those were honest numbers. The truth of the matter is this Congress is going to spend $1,622 billion. We are actually going to spend less money in this fiscal year than we said we were going to spend 2 years ago. Now I would ask my colleagues and anyone else who may be watching this special order to ask themselves when is the last time that Congress actually spent less than it said it was going to spend. I cannot remember a time in my lifetime when that has actually happened. You also mentioned something else that I think we need to really emphasize because I think the American people understand this, and frankly I had a very interesting meeting yesterday in my office with a gentleman who is very closely affiliated not only with our welfare system but with many people who are on the system, and I do not want to disclose his name because some of the things he said were very, very intriguing. And I think the American people have been way out in front of this whole welfare reform debate for a long time because they know that if you encourage people to become dependent, unfortunately what you do is you make people even more dependent, and the tragedy of our welfare system has not been that it has cost too much money, although that certainly has been a by-product. The real tragedy of the welfare system that we have in this country was that it destroyed peoples' initiative and it destroyed families, it undermined work and it undermined personal responsibility. Well, the good news about not only our budget but our welfare reform plan which requires work, requires personal responsibility, encourages families to stay together; well, the President went on the radio the other day, and he said by his own admission there are over a million families that are no longer dependent on the welfare system in America today. That is an enormous victory, and I do not care if the President takes credit, I do not care if the Republican Congress takes credit, and I really think the American people should take credit. But that is an enormous victory, and again it is not about saving money, it is about saving people and it is about saving families and it is about saving children from one more generation of dependency and despair.

Mr. GUTKNECHT. It was rosy scenarios.

Mr. GUTKNECHT. Not even the IRS says this. Only the Treasury Department uses this convoluted system called imputed income. Frankly, I have to say, and I think I am a fairly well educated person, I was in politics before I came here, I had never heard the term ``imputed income'' before I came to Congress. It is worse than just the $30,000 example. What they have done is taken a family at $44,000, they have assumed they could rent their house for $1,000 a year, which adds $12,000 to that income, brings them up to $36,000, and then they assume someone in that income bracket would probably have at least a $20,000 capital gain. So they take someone who has approximately the median family income in the United States, and all of a sudden they have imputed them into the wealthy category, making more than $75,000 a year. It is one of the most convoluted, crazy things I have ever heard in my life, and yet only here in Washington can a crazy idea like that have any credence.

Mr. GUTKNECHT. We actually had some Members of this Congress come before the House not too long ago and say, in effect, with those numbers, that our tax cut was targeted at the rich.

Mr. GUTKNECHT. Yes, colleagues of ours from States the gentleman would recognize.

Mr. GUTKNECHT. The IRS does not use that. Frankly, in all of this discussion, and the gentleman from Wisconsin [Mr. Neumann] and I were talking, earlier, frankly, what we need to do is get, and I think the Senate Finance Committee already has an electronic work sheet on a web site and we hope to have it on a web site very, very soon, and we will have work sheets available, and perhaps by the next time we have a special order we can have a chart made up so average American families can calculate for themselves; do not take my word for it, do not take the Treasury Department's word for it, calculate it for yourself. I will give a classic example. The same story. I came home a couple of weeks ago, there was a family going to a garage sale, they had three kids. That is $1,500 more they would have to spend. Those kids, when they go to college, it can be up to $1,500. Do not take our word for it. We ought to have a work sheet, whether it is on a web site so people who have access could do that, or an actual written work sheet so people can calculate their own tax. It is not what it might be worth to somebody else, but what is it worth to the average family in the gentleman's district? To the average family in my district it is worth over $1,000 a year.

Mr. GUTKNECHT. That was the original 7-year plan.

Mr. GUTKNECHT. If both Members will yield for a second, the gentleman from Wisconsin [Mr. Neumann] and I both serve on the Committee on the Budget. We actually have gotten the CBO and others to run some numbers. If our economic growth rate remains even close to the level it is at, in fact, it could drop dramatically from what the economic growth rate has been for the last year, we will balance the budget on our current path not in the year 2002, not in the year 2001. I believe, and I think the gentleman from Wisconsin [Mr. Neumann] will probably agree with me, we are going to balance the budget by the year 2000. Frankly, it may even be 1999. I want to come back to one of the points you made. You said this is not just about numbers. We talk about 12.3 percent and 174 billion. It flies past most Americans like a Nolan Ryan fast ball. It is about people, but more important, I think what we are doing really is all about preserving the American dream for our kids. What kind of a country are we going to give to our kids? That is why it is important that we talk a lot tonight about the National Debt Repayment Act. You have spent an awful lot of time on this. You have an awful lot of cosponsors. That is where we are really headed in the future. That is why it is important. I wonder if you would share about the National Debt Repayment Act.

Mr. GUTKNECHT. Mr. Speaker, I just want to talk a little bit about the National Debt Repayment Act. A lot of people I think are going to look at this and some of our critics on the other side of the aisle will say this cannot happen. I want to remind them, these are the same Members who said we cannot balance the budget, we cannot reform welfare, we cannot reform Medicare, we cannot reform the Medicaid system. We cannot do all of that and balance the budget and provide tax relief. And yet we are proving that it can be done. And what the National Debt Repayment Act shows is that by again just limiting the growth modestly of Federal spending, and I think I am correct in this, Federal spending under the National Debt Repayment Act will still continue to increase. We are not talking about pulling the rug out from senior citizens and people who need legitimate services from the Federal Government. Spending will still go up.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I am joined tonight by my colleague, the gentleman from Tennessee [Mr. Wamp] who came here with me in 1994, in the class of the 104th Congress. We are going to talk tonight a little bit about where we were, where we are, and where we are going. We want to talk about what has happened here in this last week because this is a very happy day. It is a happy day, I think, for this Congress. I think it is a very happy day for this country, and most importantly, I think it is a wonderful day for our children, because through this week we have passed for the first time in a generation a balanced budget plan that will in fact balance the people's books. We have also passed the first tax relief in 16 years that is targeted for middle-class American families. This has been a very, very good week for America's children and for America's families. I think to really understand how much has happened in the last 3 years here in Washington, I think we have to go back and look at what was happening for the last 40 years. I believe that for the last 40 years Washington had it wrong. For 40 years Washington thought that Washington knew best that bigger bureaucracies could solve social problems. So for 40 years, spending here at the Federal level increased at nearly double the inflation rate, taxes went up faster than family incomes, the debt ballooned and social problems got worse. Washington had it wrong. Washington waged a war on poverty. Washington spent over $5 trillion in that war, and if you take a walk through any burned-out inner city, you will see the victims that that war has brought us. Ask yourself, who won the war on poverty? I believe that Washington had it wrong. Washington overtaxed those who worked hard and played by the rules, and they squandered much of it on top-heavy programs that did little but breed more dependency. When I was growing up, I think when the gentleman from Tennessee [Mr. Wamp] was growing up, we are both baby boomers. I was born in 1951. Most people do not remember who spoke at their college commencement, but I do. When I graduated from college, the speaker was the director of the United States Census. And he told us that there were more kids born in 1951 than any other single year. We are the peak of the baby boomers. So when I came to Washington, it was with a special responsibility because my parents are still living. They are on Social Security. They are on Medicare. I obviously feel that I have a very strong responsibility to them. But I also have three children. One of them is already in college and, hopefully, the other two will go on to some form of postsecondary education. So I also understand we have a moral responsibility to our children as well. Things have changed a lot though since I was growing up. When I was a kid growing up, and I would assume this is true for the gentleman from Tennessee [Mr. Wamp] as well, the largest single payment that my parents made, and my folks were able to raise me and two brothers on one paycheck. That was really the norm back in the 1950s. Part of the reason they could do that was that the largest single payment that they made every month was the house payment. Now the largest payment that most families, the average family makes is to the government. As a matter of fact, the Taxpayers Union says that the typical American family with a median income in the United States today spends more for taxes, when you factor in the sales tax, the income taxes at both the State and Federal level, property taxes and all the other hidden taxes that people pay, the average American family pays more for taxes than they do for food, clothing and shelter combined. So for 40 years Washington had it wrong. I want to yield to my colleague from Tennessee [Mr. Wamp] and perhaps talk a little bit about what things were like and part of the reason that he decided to ``wamp'' Congress.

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Tennessee. It has been a great a hour. It has gone very fast. I would just like to close by saying this, this is an important first step. This was a very important week for American families, because we are beginning to restore accountability to government. We are starting to encourage more personal responsibility. We are sending more of the authority, the responsibility, and the resources back to neighborhoods and communities, and most importantly, to families. As I said earlier, for 40 years Washington had it wrong. Washington thought that Washington knew best. For 40 years both the bureaucracy and the debt ballooned, and what happened? Our social problems got worse. The real answers to most of our social problems cannot be found here in Washington. They are with our families. That is what this week was about. That is what our budget is about. That is what our tax plan is about. Our families in America are winning now, and with their help, we are going to keep them winning.

Mr. GUTKNECHT. Reclaiming my time, Mr. Speaker, I did want to talk just briefly, and we ought to spend a couple of minutes talking about the tax bill we passed today. I think there has been, just as we had a little bit of disinformation about Medicare, we have heard a little bit of disinformation about the tax plan. I just want to say, and these are from the Committee on the Budget, the Committee on Ways and Means, I am sorry, but they have all been confirmed by the Joint Committee on Taxation. I would hope that whether people live in Minnesota or in Tennessee, wherever they are, that they would get the facts. I think the facts speak for themselves. The bulk of the tax relief that is in this package, in fact, I think it is very accurate to say that 75 percent of the tax relief that we passed today is targeted at families that earn less than $75,000. Despite all the disinformation that has been spread, I think families can figure that out for themselves. I would like to tell the story, I was going home last week. I was driving into our neighborhood and there was a garage sale. There was a family getting out of a rather beat-up car. They were going up to this garage sale. They had three kids that were able to walk and then there was one chubber that was about maybe 8 or 9 months old that was permanently attached to mom's hip, you know that type. I thought about our tax relief package in this budget. I really thought, you know, this is what this is all about, because by balancing the budget we are preserving the American dream for those kids, and by passing this tax relief package we are going to provide real tax relief to families like that, millions of families like that. This tax relief package will benefit 41 million children in this country, and $500 times those four kids is $2,000. That may not seem like a lot of money to some of the folks in Washington, some of the well-paid lobbyists who hang around these halls, but $2,000 to the typical family with four kids, that is a lot of money. Take that family at $40,000 with three kids, and that is $1,500 plus the educational benefits, so this is a great package for American families. I am proud of it. It is not exactly the plan I would have written, maybe not the plan the gentleman would have written, but it is a great plan for America's families.

Mr. GUTKNECHT. Mr. Speaker, I would say to the gentleman I generally agree with what he has said, although I would phrase it somewhat differently. I think in the book of Ecclesiastes it talks about there is a time for everything, a time for war and a time for peace. In politics there is a time for confrontation. There are clearly some times when you have to draw a line in the sand and say, beyond this point there is simply is no retreat. Perhaps we engaged in too much confrontation during the last Congress. But on the other hand, there is also a time for cooperation. I know some of my supporters, as the gentleman has back in Tennessee, really, they kind of like the politics of confrontation. Clearly they see it sometimes as a spectator sport. But in the end we have to do what is best for America. We have to do what is best for American kids and what is best for American seniors. So in some respects, if the gentleman and I were to sit down and write a budget agreement, probably it would not look exactly like the one we voted on this week. The same is true with the tax bill. If I could have written the tax bill, it probably would have been significantly different than the one I was proud to vote for today. In the end, this is about getting 218 votes here in the House, 51 votes in the Senate, and getting the President to sign it. I think the great news is that after going through some of the politics of confrontation, which in my opinion were important because they began to lay the foundations for where we are today, I honestly do not believe that we would have a budget agreement as good as the one we have, had we not been willing to demonstrate in the last Congress that we were willing to stand and fight. I think we would not have had as good a Medicare reform plan as we have today if we had not been willing to demonstrate that we were willing to fight for the principles we believed in. On the other hand, we had to make some compromises. We could not completely ignore some of the President's priorities. There will be more money in education which I think generally, though, when people begin to analyze it, I think they are going to like some of the stuff that is going to be done for education. I know education, whether we are in Tennessee or Minnesota or wherever, is a very high priority with the American people. So yes, it is a compromise. It is cooperation. We are trying to work together, because we understand that the greater good is what is really good for the American people.

Mr. GUTKNECHT. Absolutely.

Mr. GUTKNECHT. Mr. Speaker, it is not just the markets, it is consumer confidence. I think there was a report out yesterday that consumer confidence is about at a record all-time high. The American people in Washington for the first time say what they mean, mean what they say and do everything within their power to actually get it done. I want to talk a little bit about this chart, because I mentioned it earlier. If the gentleman can see the red bars, going back to our 7- year balanced budget plan, which unfortunately the President vetoed and only parts of it actually became law, but thanks to the hard work of the folks on the Committee on Appropriations where they cut about $50 billion in wasteful spending and we also began the process of reforming and controlling the growth of entitlements, but this was our plan over 7 years. Those are the red bars of what the deficits would be. The blue bars are where we actually are. And again, it points out, we said we would have a budget deficit in fiscal year 1997 of $174 billion. It is really going to be something more like $70 billion. Because of slower economic growth projected for next year, it does take a slight move up, but frankly, I think if we are anywhere close, and this goes back to another point that we both made, that if we talk to economists, if we talk to regular folks and we asked them what do they think will happen to the economy if everybody believes that Congress is going to balance the books, No.1; and No.2, if we allow them to keep and spend and save more of their money, do they think the economy will slow down, or do they think it will remain strong? Virtually everyone that I have talked to from some of the top economists to some of the top business people to just regular folks at the barber shop, they believe that if we allow people to keep more of their own money and if we are serious about balancing the budget, real interest rates are going to come down and real economic growth is going to remain strong. So that is why I believe, and I am not an incurable optimist, but I think I can back this up and time will prove me right, that if we actually can get this budget plan signed into law and begin the process of allowing families to keep and spend and invest more of their own money, I think we are going to have a strong economy, not just for the next year, but probably well into the next century.

Mr. GUTKNECHT. Mr. Speaker, it would be balanced today if we had started in 1995.

Mr. GUTKNECHT. Mr. Speaker, I think the gentleman has raised a number of good points. There is some tremendously good news. I, frankly, am not surprised at skepticism, because we have had Gramm-Rudman, we have had lots of budget deals, and lots of times what Congress would do is they would say, well, if you would just let us raise taxes a little bit more, then we would balance the budget. Well, what happened? They raised the taxes, they never cut the spending, and the budget deficit continued to grow. So there is a good deal of skepticism. Sometimes we need a report card. If we think we are going to get to Chicago, once in a while we have to say, are we headed in the right direction? Let me just share with the gentleman, and I think the gentleman probably knows this, but some of our Members do not. In our 1995 budget resolution we said that we would spend $1,624 billion in fiscal year 1997, that is the fiscal year we are in right now. We said we would spend $1,624 billion. The good news is that we are only going to spend $1,622 billion. So we are actually going to spend less in that fiscal year than we said we would spend 2 years ago. That is good news. But I think the news gets even better. Because the economy has been a lot stronger than you or I or any of the economists, the President, the GAO, the CBO, and all the other people who keep score, the economy has been a lot stronger. More people have confidence now in America, they have confidence in the economy, they are out buying homes and cars and investing in new production, and so forth. So we have actually taken in about $100 billion more in revenue than we expected to take in. At the same time, we have actually spent less than we said we were going to spend. So I think that is great news. I want to show this chart for the benefit of the gentleman and others who may be watching in their offices. But this is another example how the winds of change are really beginning to blow through Washington. The wind is actually changing, the direction is changing, that battleship is turning, because since 1975 to 1995, for 20 years, every year, if we take an average, these red lines is how much more the Congress spent than it took in. If we average it all out, and it varied from $1.09 to $1.35, but for every dollar the Congress took in, it spent an average of $1.21. I am happy to report that since we came here, that we have a new Committee on Appropriations, a new Committee on the Budget, and a new Committee on Ways and Means chair, that since we came to Congress, I would say to the gentleman, that that average has dropped to $1.08. With this budget agreement it ultimately will reach 99 cents. If we can get to that 99 cent level, and this is where the plan of the gentleman from Wisconsin [Mr. Neumann] comes in, that is when we not only balance the budget on a year-to-year basis, but we begin to pay down some of that debt. I think we ought to set, in terms of a goal of generational fairness, that our generation, the baby boomers, while we are protecting Social Security, while we are protecting Medicare we are going to pay off that debt so that we can leave our kids a debt-free future. I think that is a future that is worth fighting for. That is the way we can guarantee that the next generation and the generation after that will have their shot at the American dream. Mr. Speaker, as I said earlier, for 40 years I think Washington had it wrong. They thought that they could spend their way to prosperity, and that is the reason that we are spending as much for interest on the national debt as we do for national security and some of the other things that the gentleman talked about. So we have to change that. But it is changing. The good news is that we are spending less than we expected to spend, we are taking in more revenue than we expected to take in. Frankly, I have some of the number crunchers for the Committee on the Budget and I serve on the Committee on the Budget with the gentleman from Wisconsin [Mr. Neumann] and the gentleman from Ohio [Mr. Kasich] and a lot of other good folks. I had them run the numbers and I said, what if the economy slows down a little bit. One of the myths is that this budget agreement is based on rosy economic scenarios. Right now the economy is growing at about 3.8 percent per year. Our budget agreement assumes that that growth rate is going to drop to 2.1 percent. Frankly, I think it is going to keep going on a much faster rate. So I asked the Committee on the Budget if they would just run some numbers and tell me what would happen if yes, the economic growth rate slowed, but it slowed to more of the average where it has been for the last 15 to 20 years, which is about a 3.2 percent growth rate. If we do that, the interesting thing is that: First, the budget balances in the year 2000, and by the year 2002 we will have a surplus of over $200 billion in the Treasury. No one knows what is going to happen next year or 5 years from now. I think the gentleman's recommendations for some kind of enforcement provisions is a very good one and we ought to give it very careful consideration. Mr. Speaker, I think the good news is we are keeping our promise, we are ahead of schedule, we are under budget, we are doing what we said we are going to do, and I think the American people understand that. I would like to yield back to the gentleman and maybe we can talk a little more about making government more accountable and encouraging more personal responsibility and what else is happening with the budget.

Mr. GUTKNECHT. We will get back to that. Mr. Speaker, we were just beginning to speak about how the winds of change have begun to sweep through Washington. I have got a chart up here I am going to talk about in a minute, about how really graphically I think it shows how things are changing here in Washington. But I think the first indication that things were changing in Washington was the debate we had when we first came here about welfare. For 40 years the answer to poverty and welfare in this country was to build bigger bureaucracies, to take more money away from working families and redistribute it through a complicated welfare system that was created and run here in Washington. The bureaucracy got bigger, and we actually saw an increase in poverty. The real tragedy of the welfare system was not that it cost too much money. The tragedy is that it created too much dependency. Once again we could see the examples, we could see the victims all around us. I think the American people, as is so often the case, were way out in front of us and they said: You have got to change this system. It is just wrong. What we are doing is creating dependency. We are creating more illegitimacy. We are creating less hope. And as you said earlier, when you reach that point where you have no hope, I think that is saddest indictment of all. So some of us said we have got to reform this welfare system, and that Washington does not necessarily know best. There were States like Wisconsin and Michigan and other great States led by great governors that said: Let us run welfare, send more of the resources and decision-making back to our States, let us supply some of our thinking and creative tough love, and we can go a long ways towards reforming this system and reducing the amount of dependency and perhaps encourage more personal responsibility. That is exactly what we did, and the results are overwhelming. I do not know if my colleague even knows this, but since we were elected to Congress, there are over one million families that are no longer dependent on the welfare system. As I say, that is terrific news, not just because it saves money but, more importantly, because it is going to save people and it is going to save families and it is saving children from one more generation of dependency. At first, when we first started talking about welfare reform, it was called radical and it would not work and it would hurt people. But ultimately, I think as John Adams used to say, ``facts are stubborn things.'' We ultimately prevailed in that debate. We got the President to sign that welfare reform. I was very heartened to learn that even the New Republic, which is by its own admission a liberal magazine, now acknowledges that they were wrong and that the welfare reform that we passed really is working. With a little nudge, as many as 60 percent of the people who were on welfare before can be nudged onto payrolls and off the welfare rolls. I would like to yield to the gentleman from Tennessee [Mr. Wamp] to talk a little bit about what is happening in his State and around the country, and some of his observations on welfare and poverty and dependency and personal responsibility.

Mr. GUTKNECHT

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

Mr. GUTKNECHT

Mr. GUTKNECHT. Here in Washington, DC.

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman. In closing I would just like to thank the gentleman from Florida [Mr. Weldon] for joining me tonight, but I also want to say that this is an important first step. This is not the end of the road, this is an important step. But it is about restoring accountability to Government, it is about encouraging more personal responsibility, and it is about sending more of the authority back to communities, neighborhoods, and to families. For 40 years, Washington had it wrong. For 40 years they thought Washington knew best and for 40 years, both the bureaucracy and the debt ballooned. Well, now that is changing. Families are winning, and with their help, we will keep winning this fight.

Mr. GUTKNECHT. Now it is 16 percent.

Mr. GUTKNECHT. Mr. Speaker, I was just going to say that I was smiling because when my colleague was talking, it reminded me of talking about taxes and spending and balancing the budget and what we need to do in terms of tax relief. There is a farmer I was talking about balancing the budget with, an old farmer in my district one day. And he said: You know, he said, the problem is not that we do not send enough money into Washington. He said the problem is Congress spends it faster than we can send it in. And if we stop and think about it, he encapsulated the big part of the problem we have had for the last 40 years. In fact, some would say, well, you know, we just need to raise taxes. Well, if tax increases had been the solution to our deficit problems, I submit that we would have had a huge surplus already. I know when we first started this debate when we offered the Contract With America, there were people who said, well, you cannot balance the budget and provide tax relief; I mean that cannot be done. And you certainly cannot do it while you are saving the Medicare system. And what we are proving, I think, today and tomorrow is, yes, you can. If you hold government more accountable, if you limit the growth in entitlement programs, if you actually make some targeted cuts in domestic discretionary spending, if you hold government more accountable and you return more responsibility back to families and people and communities and States, you can balance the budget, you can save Medicare and you can reduce the tax burden on American families. And that is the good news, and as I say, and as you indicated, this plan is not perfect. We hope as we go forward that there will be more room for tax relief. We would hope that ultimately we would adopt language similar to that the gentleman from Wisconsin [Mr. Neumann] is talking about, in terms of as we go forward, if we are correct that if we reduce taxes, if we allow people to keep and spend and invest more of their own money that the economy will be stronger, which will mean more jobs, which will mean more tax revenue. Actually, I have some numbers, I had the budget office run these numbers for me. Right now the economy is growing at about 3.8 percent. We do not assume that that is going to happen. Some people said early on, we balanced the budget by rosy economic scenarios. Actually, we assume under this budget plan that economic growth is going to drop off the table, that it is going to drop from 3.8 percent this year down to 2.1 percent next year. I do not think most economists, I do not think most Members of this body believe that is going to happen. I think what is going to happen is the economy might slow slightly to something like 1.3 percent. If that happens, though, if the economy just goes to what would be more of a historic average in terms of economic growth for the next 5 years, and I think with the tax relief, with the balanced budget plan, I think with lower interest rates, I think it is very believable that we will have at least 3.1 percent growth rate. If that happens, in the year 2001, we will have a $28 billion surplus, and in the year 2002, we will have a $120 billion surplus. Now, what should we do with that surplus? Well, our colleague from Wisconsin says, and I think it is a good idea, we ought to take two- thirds of that and apply it to some of the trust funds, the Social Security trust fund, the highway trust fund, some of the other trust funds which Congress has been borrowing from over the years and we ought to take some of that and provide additional tax relief. The gentleman has talked about lowering the capital gains tax even more, doing more work in terms of the death tax, doing more work for families, but that frees up even more opportunities so that hopefully we can grow the economy even faster so that more of the people who are currently trapped in the welfare state can find jobs, can get off the welfare rolls and get to payrolls and that really ought to be our goal. In fact, talking about welfare and how this all ties together, I thought it took a lot of courage recently for the New Republic, which is by its own admission a liberal magazine, came out recently and said, we were wrong. When they said that our welfare reform plan would not work, they said they were wrong. Now they have come to the conclusion that 6 out of 10 people that were on welfare a few years ago really should be off welfare. As we go forward, as the economy grows and as we get more educational opportunities to some of those people, I think we are going to open up the American dream to a much larger group of people, to people who for a generation have thought that the American dream was not for them. So if we really love those people, we have to help them find their way off the welfare rolls and on to payrolls. Because I have said this, and I really believe it, that a job is more than the way one earns one's living, a job helps to define your very life. I think people who are jobless tend to think of themselves as being valueless. So we need to help those people, we need to give them the encouragement, and sometimes we have to give them a little nudge to get them out on their own and instead of being dependent, becoming independent. So this is about reinforcing those values of faith, family, work, thrift. and personal responsibility. We do not have all the answers, but as I say, and I think the American people understand, as was reflected in the poll the gentleman mentioned earlier, I think the American people understand that we are now moving in the right direction, that Congress said it is doing what it said it was going to do, and most importantly, it is doing what they have wanted Congress to do for many, many years.

Mr. GUTKNECHT. And if I could, the real tragedy, it seems to me, is that in many respects well intentioned government programs have made the breakdown of the family even worse, and again I think the American people are way out in front of us on this. I think they know that. I do not think they have to read that. I also want to indicate before we leave the story of Marvin Olasky, I have read his work, too. I have had a chance to meet with him several times, a remarkable human being, and his story is a terribly powerful story. And I would say this for the benefit of Members or those who may be watching: I am just about out, but I have a very abbreviated version of that. And I would make it available to Members who would like the story of Marvin Olasky and the Tragedy of American Compassion and the history of how we really dealt with poverty in America and what de Tocqueville meant when he said that America's greatness was in her goodness and that, if we ever fail to be good, we will fail to be great; and goodness was not about more and bigger government programs. Goodness was about what you did in your community and your neighborhood, what you did in terms of volunteering and sharing with those who were really down and out. The interesting thing too about the whole welfare debate and discussion is that there are some very good examples of programs that do work, but those are not the models unfortunately which Washington decides to model in most cases. The Mormon church has a very good welfare system for members of their church. The Salvation Army is far more efficient than any State in the Federal welfare system in terms of helping people. And the real goal is not just to feed people, not just to feed people in terms of their bodily needs, but to feed their soul as well; and if that is not a component, the results and the evidence is overwhelming that it is not particularly successful. I yield back to you.