Don Nickles

Mr. NICKLES

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

Mr. NICKLES. We are eliminating the 6.6-percent tax.

Mr. NICKLES. Mr. President, the question was asked, Is this a 10- percent tax? My colleague from New Jersey raised this as well. Originally, this was a 10-percent tax. I think the committee made adjustments and made it 6.6 percent. I happen to agree with him that even at 6.6 percent, the tax is too high. Also, Mr. President, I ask unanimous consent Senator Chafee be added as a cosponsor.

Mr. NICKLES. Mr. President, this amendment I send to the desk on behalf of myself, Senator Dole, Senator Roth, Senator Snowe, and Senator Chafee is an amendment that would eliminate section 7573, which would require States to collect an annual amount equal to a $25 application fee and 6.6 percent of collections for non-AFDC families, if they use child support enforcement services. I think this provision should not have been in the bill. I mentioned that [[Page S 16005]] during the Finance Committee hearings. I have worked with the majority leader, and, also, Senator Roth says this section should be stricken. That is what this amendment would do. The Governors strongly support this amendment. They do not think that they should be mandated to have the child support enforcement check fees in this bill. I agree.

Mr. NICKLES

Mr. NICKLES. Mr. President, I urge my colleagues to vote no on this motion, because the House had some provisions to allow some flexibility for physicians to conduct tests in their offices. Frankly, we are talking about some simple tests; in some cases, strep tests or blood tests. CLIA, the Clinical Laboratory Improvement Act, drives up the cost of doing a lot of these tests, in some cases makes it prohibitive to do it, so they have to send off the test to the bigger cities. That wastes time, it wastes money, it makes health care a lot more expensive and dangerous in many areas of the country.

Mr. NICKLES. Mr. President, pursuant to section 904(d) of the Budget Act, I move to waive the Budget Act for this provision if included in the conference report on this measure.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 2950

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

Mr. NICKLES. Mr. President, I thank my colleague from New Mexico. I join him in opposition to this amendment. Although I compliment the sponsors of the amendment for saying we should use an accurate CPI, they do not go as far as that that was proposed by a group of economists that said we should use from 0.7 percent even and maybe above 1 percent. Whatever the percent is, it should be accurate, and most estimates are that 0.5 percent, which would save something like $115 billion, is on the low side. So I compliment them for doing that. I rise in opposition to their proposal because they want to spend $245 billion more so we do not tax more. I would like to give taxpayers a break for $245 billion and reduce spending to pay for it. That is the difference between the two. I compliment them for a very significant element of this package and hope that ultimately we will use accurate CPI reflection in all of our cost-of-living adjustments.

Mr. NICKLES. One wears a bow tie.

Mr. NICKLES. Mr. President, I urge my colleagues to oppose this amendment. I just heard about it. I understand he says, well, we want to take away this advantage, IDC. Really, what my colleague is saying is, you should not be able to deduct ordinary out-of-pocket, nonrecoverable business expenses. That is ludicrous. It should not happen. He happens to be wrong on that issue. I think I heard my colleague say that he wanted to eliminate the 936 benefit that goes towards Puerto Rico. We do that in this bill. We do it in the bill over 7 years and over 6 years. There are two different ways you count that benefit. We phase it out over 6 or 7 years. I think it is a responsible provision. I guess he wants to do it immediately, but you have a lot of firms that have made investments. I think that would be very inappropriate. My colleague may call it corporate welfare, but again I think this committee has taken some very responsible action in allowing people to deduct their out-of-pocket, nonrecoverable business expenses as should be allowed and phasing out the tax benefit that was directed towards Puerto Rico. So I would urge the Senate to oppose my colleague's amendment.

Mr. NICKLES. Mr. President, I urge my colleagues to vote against this amendment. This amendment would build another entitlement program, another brandnew entitlement program into the Tax Code. According to the Joint Tax Committee, the Breaux amendment would increase outlays by $37 billion over 7 years. I urge my colleagues to vote no.

Mr. NICKLES. Mr. President, one, let me just tell my colleague from New Jersey, and other colleagues, there is no tax increase for individuals making less than $30,000. That claim has been refuted by the Joint Tax Committee. It is totally false, and people making that claim should really be ashamed of themselves. Mr. President, I am going to put in the Record the facts. The facts are, the earned income tax credit grows even under our proposal. It grows. The maximum benefit that anybody can receive today is $3,100. It grows next year to $3,200. And in 7 years it grows to $3,888. It is an increase. This is a program that is a cash outlay program. Eighty-five percent of this program is Uncle Sam writing checks, not reducing liability, but writing checks. And it is the most fraudulent program we have in Government today. GAO said 30 to 40 percent of it was in fraud and in error. It needs to be reformed. That is what we do. This program should be reformed. These proposals that we have made, I think, are the right things to do for American families. Mr. President, I ask unanimous consent that the table be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Will the Senator yield me---- I ask unanimous consent, Mr. President, to have printed in the Record several charts and other material.

Mr. NICKLES. It would be correct if we had the composition in the body that would vote for a balanced budget. But I will tell my colleagues, we cannot balance the budget unless or until we are willing to contain the growth of the entire budget. And we have already had votes to say, ``Oh, let's don't reduce the rate of growth in Medicare. Oh, we're cutting $270 billion in Medicare.'' The facts are, in Medicare, this year we are spending $178 billion in Medicare, and in the year 2002 we are going to spend $286 billion in Medicare. That is a significant increase. It is a 7 percent increase over that entire period of time, 7 percent per year. ``Don't cut Medicaid, for crying out loud. No. Medicaid is too sensitive.'' They forget to tell people Medicaid in the last 4 years has grown as much as 28, 29, 13, and 8 percent. Make that in 5 years then 9 percent. Medicaid has exploded in costs. Many States have figured out ways to dump their liability on the Federal Government. It used to be a 50-50 share for most States. Now they are figuring out ways to make it 70 percent Federal Government, 30 percent State. We are trying to reform that and curtail that growth. Mr. President, I think it is awfully important we balance the budget, and I compliment my colleagues for the proposal we have before us today. I yield the floor.

Mr. NICKLES. I ask for an additional 2 minutes.

Mr. NICKLES. Mr. President, I wish to thank my colleague from Michigan. I compliment him on his leadership. I just mention that many of the allegations and statements that are made are certainly not taking a look at the overall big picture. I wish to help students, too. I understand that there may be a leadership amendment that is going to make some modifications in the proposals that are being discussed. I think I will wait for the discussions on the specifics until that amendment is offered. It will be accommodating some of the concerns that have been raised because I think all of us--I happen to have four kids, two of whom are in higher education right now. That costs a little money. But I will tell you the best news we could give my kids that are going to college is to balance the budget. We only have one proposal before us to balance the budget. That is the proposal that the Republicans have put forth that will give us a balanced budget. I remember going to a town meeting not too long ago and somebody who was about 23 years old raised their hand and said: Senator, will I ever see a balanced budget in my lifetime? They were just as serious as they could possibly be. Later today, or maybe tomorrow, we are going to be voting on a balanced budget. But there is only one. President Clinton does not have a balanced budget. We do. When you think of somebody going to college and talking about college loans, what a heck of a deal it is right now that they inherit such enormous national debt. Let us at least stop it. The only proposal that we have before us to stop it is our proposal to balance the budget. Now, we may make some modifications in the proposal to alleviate some of the concerns that have been raised specifically dealing with student loans. So again I will leave that alone for the time being. Let us talk about what we are doing for all American families. I heard my colleague say, well, this is $10 billion. We are giving American families $140 billion of tax cuts. If they have children, they get a tax cut under our proposal, $500 per child. If you have four children, that is $2,000. That is pretty significant. And families get to decide if they want to use that money for education, for transportation, or for other things. Families make that decision. I think that is important. I also want to talk about the benefit of a balanced budget for the average American family. If you have a $100,000 mortgage--it seems like that is a large amount but that is not that unheard of today--you will have savings--it is estimated by independent sources that by having a balanced budget you will have a 2-percent interest rate reduction, maybe as high as a 2.7- percent reduction on a $100,000 mortgage. That boils down to savings of over $2,000 per year, actually $2,162 per year. Also, if you have a student loan, let us say an $11,000 student loan, that is $216 in savings just in the fact that interest rates have come down. If you have a car loan of, say, $15,000, you have savings of $180. Those total savings of $2,500 per year if we are able to bring interest rates down by balancing the budget. So I think students have a real interest in seeing us balance the budget. I also want to talk about some of the misstatements that have been made. Are families better off at different income levels? Because I heard some people say some lower-income families are getting a tax increase. That is totally false, totally, completely false. And so again I wish to look at what happens to families under this proposal. Families that make, say, $5,000, they do not pay any income tax. They pay zero income tax. Right now they get an earned income credit of $1,800. They get it under present law. That is what they are going to get under our proposal. What about families making $10,000? They still do not pay any income tax. They get a $3,110 EIC. Next year they are going to get an increase that goes to $3,200. What about families that make $15,000? Right now, they get a check from Uncle Sam of $2,300. They do not write Uncle Sam a check. They still pay zero income tax and next year they are going to get a bigger check, $2,488. So that is an increase. That is an improvement. What about families that make $20,000? Well, they get an EIC of $832. With two children, they are presently paying zero tax. Next year, they are going to get from us, EIC goes up to $1,429. You might say, why? Well, the tax credit reduces their tax deduction so they get a higher EIC. What about a family that, say, makes $30,000. You have a lot of families making $30,000 that are sending kids to school. Right now, they are writing Uncle Sam a check for $929. Under our proposal, they will receive an EIC of $171 and pay no income tax. That is over a $1,000 improvement for that family. And actually every family beyond here will receive over a $1,000 improvement. Right now, if they are writing checks for $2,000, they will write a check for $900. That is over a $1,000 improvement. A $40,000 family would write a check to Uncle Sam right now with two children, $3,500. Under our proposal, they will write a check for $2,400. Again, they save $1,100. They save in the child credit. They also save from the reduction in the marriage penalty. A family making $50,000 would write a check for $5,000. Under our proposal, they will write a check for $3,900. They will get a $1,100 savings. They can use that money for education. Our whole propose is targeted at families, and families can decide how to spend that money. And people with children are concerned about education. We are going to let them keep their money so they can decide how it should be spent. I think that is awfully important. We have heard a lot of rhetoric that bothers me because it is not factual. Lower-income groups are going to have their taxes raised. Not true. In many cases they are alluding to earned income credits, and so on. Those grow. I happen to be pretty familiar with them. I am going to put them in the Record. Maybe everybody can be familiar with them. These credits are growing every year. We give taxpayers a tax cut if they have children and they want their children to go to school. It is interesting; after the debate we had last night, somebody called my office about 11 o'clock and said: I am kind of embarrassed because my daughter, who is going to school, going to college received an earned income credit of $300. He said the reason why I am embarrassed is because I am a millionaire. But in present law they qualify. Does that make sense? I said, well, why would your daughter qualify? Well, she forgot to tell them that I gave her $18,000 to support her college education. But under present law she can qualify if she does not report that income. Now, we try to tighten down on EIC, so we report other income and say that income should be counted. Right now with EIC, you qualify under the program if you make less than $26,000. Under our proposal we allow that to grow to $29,000. Some people say that is a Draconian change because the administration wants you to qualify for EIC if you make $34,600. That may be the majority of people in Alabama; that may be the majority of people in Michigan, maybe in Oklahoma. There are a lot of people in our State that make less than $34,000. So we curb the growth. Right now you can qualify if you have income less than $26,000. We allow that to grow under our proposal to $29,000. But the administration wants it to grow to $34,000. I had a millionaire call me last night and say, ``My daughter received a benefit that I don't think she should have. I think you're right. I think a lot of people are receiving this benefit that shouldn't. Let's try to target our assistance to those people who really need the help.'' That is what we are trying to do, target our assistance. Some 70 percent of this package is directed at American families that make less than $75,000 per year. Those are the families that are sending their kids to school. So let us be responsive. Let us be helpful. And let us make some of the changes that are necessary to make our economy grow. At the same time, let us balance the budget. I am really excited about the opportunity to balance the budget. I am bothered by the fact that the President of the United States had a press conference yesterday and he said, ``Look how great we are doing. The deficit has come down 3 years in a row. We are making real progress.'' What he forgot to show is what happens in the future. According to the Congressional Budget Office, his deficit grows. He talks about $164 billion in 1995, and it is less than it was the year before. I think that is great. I do not think he is entirely responsible for that. But what happens in the outyears? Well, the Congressional Budget Office says that it will be $210 billion in the year 2002. He forgot to tell everybody the deficit is going to go from $164 billion to $210 billion and over $200 billion almost every year, according to the Congressional Budget Office. That is not acceptable. There is a change. Some of us are very, very sincere. We mean it. We want to balance the budget. Some of us voted for a constitutional amendment to make us balance the budget, and we failed. We lacked one vote in the Senate. But we also said we should do it whether this amendment passes or not. Many people on the other side of the aisle said, ``We should pass a balanced budget. We don't need a constitutional amendment to make us do it.'' And if we had the right composition in this body, they would be correct.

Mr. NICKLES

Mr. NICKLES. Mr. President, how much remains on this amendment?

Mr. NICKLES. Mr. President, I would like to answer my colleague from New Jersey. He said, ``What about a family that makes $28,000.'' Under current law they have a great big earned income tax credit of $116. But, look out, they pay income taxes of $1,665. Under our proposal they are going to get a $1,000 tax cut. Under the proposal of the Senator from New Jersey, they get $165. My figures calculate they come out better by $835, under our proposal. And that is only dealing with the tax credit for children. It does not include the fact we are reducing the marriage penalty, so that gives them another $100, I will just tell my colleague from Massachusetts said you did not calculate the fact that you are offsetting payroll taxes. My friend is wrong.

Mr. NICKLES. He will not yield.

Mr. NICKLES. Mr. President, a couple of statements were made that the Republicans do not know that the EIC is used to offset payroll costs. That is wrong. This program not only offsets income taxes and payroll taxes, in most cases it offsets them and gives a check back. In looking at incomes of less than $15,000--my colleague from New Jersey is right--in most cases, income tax liability is zero. But this not only offsets income tax, but it also offsets the so-called FICA, or payroll taxes. Does it offset what an individual pays? That is 7.65 percent of their payroll. Yes, but it also offsets what the employer pays. That is 15.3 percent. So not only does it offset all payroll taxes, but it offsets it them by 233 percent. This is a program that is writing out checks. This is a program, Mr. President, that will cost $23 billion this year, $3 billion of it offsetting taxes, and $20 billion were cash payments--Uncle Sam writing checks. This cash outlay program now exceeds the cost of Aid for Families with Dependent Children, a program that costs $18 billion. This program costs $20 billion. Families making $25,000 pay income taxes. For families that are paying income taxes, we give a tax cut. If they have children, we give $500 per child. That is pretty easy to figure. You have two children. That is $1,000. If they have four, that is $2,000. So our tax cut is very family friendly and very positive. I want to mention some of the reforms that we make on EITC because they are long overdue, and they are part of our overall budget plan. We do have a budget. We have a budget that is balanced. President Clinton's budget is not balanced. We had a vote on it, thanks to my colleague from Pennsylvania. His budget is not balanced. We use the Congressional Budget Office for estimating purposes. He said he was going to use the Congressional Budget Office, and they say at the end of 7 years his budget has a deficit of $210 billion. At the 7 years, our budget has a $13 billion surplus. We will have a balanced budget. President Clinton does not have one, certainly not by using the Congressional Budget Office. My colleagues on the Democrat side do not have one. They disowned the President's budget. They do not have their own budget. It is nonexistent.

Mr. NICKLES. That is correct.

Mr. NICKLES. The Senator is exactly right.

Mr. NICKLES. I appreciate the statement.

Mr. NICKLES. I say to my colleague that I have the floor.