COUNTRY WHAT WE'RE ABOUT -- WHOSE SIDE WE'RE ON. IT IS A CLASS
           WARFARE AMENDMENT, AND IT SHOULD BE TROUNCED IN A VOTE. I YIELD
           THE FLOOR.
           

           THE PRESIDING OFFICER: WHO YIELDS TIME?

           MR. MOYNIHAN: MR. PRESIDENT?
           I YIELD TIME TO THE SENATOR FROM MICHIGAN.
           

           THE PRESIDING OFFICER: THE DISTINGUISHED SENATOR FROM MICHIGAN
           IS RECOGNIZED.
           

           MR. LEVIN: I THANK MY GOOD FRIEND FROM NEW YORK. I THANK THE
           CHAIR. THE TAX PROGRAM THAT IS IN THE AMENDMENT BEFORE THE
           SENATE IS UNFAIR TO MIDDLE-INCOME AMERICANS, IT IS ECONOMICALLY
           UNWISE AND IT'S BASED ON UNREALISTIC ASSUMPTIONS. THE
           UNFAIRNESS IN THE UNDERLYING BILL THAT IT WOULD AMEND IS
           PERHAPS BEST SHOWN IN THE FACT THAT ABT TWO-THIRDS OF ITS TAX
           BENEFITS GO TO THE UPPER ONE-FIFTH OF OUR PEOPLE. THE AMENDMENT
           MAKES THAT WORSE WORSE. IT MAKES AN UNFAIRNESS DOUBLING UNFAIR

           BECAUSE IT WOULD GIVE ALMOST 80% OF THE TAX BENEFITS TO THE
           UPPER ONE-FIFTH OF OUR INCOME PEOPLE. NOW, IN ADDITION TO BEING
           UNFAIR, IT'S ALSO ECONOMICALLY UNWISE BECAUSE IT JEOPARDIZES
           MEDICARE, IT FAILS TO STRENGTHEN SOCIAL SECURITY, IT RISKS
           HIGHER INTEREST RATES. AND JUST YESTERDAY ALAN GREENSPAN,
           TESTIFYING BEFORE THE BANKING COMMITTEE, SAID THAT "WE PROBABLY
           WOULD BE BETTER OFF HOLDING OFF ON A TAX CUT." "WE PROBABLY

           WOULD BE BETTER OFF HOLDING OFF ON A TAX CUT." WHY?
           BECAUSE OF THE UNCERTAINTY OF BUDGET SURPLUS PROJECTIONS AND
           ALSO BECAUSE YOU SHOULD NORMALLY RESERVE TAX CUTS FOR PERIODS
           OF ECONOMIC SLOWDOWN. AND THE IMPLICATION IN HIS WORDS HAS ALSO
           BEEN PRETTY CLEAR OVER THESE LAST FEW MONTHS, TWHAIS A LARGE
           TAX CUT WOULD CAUSE THE FED TO INCREASE INTEREST RATES. AND FOR
           THE AVERAGE MIDDLE-INCOME TAXPAYER, A RISE IN INTEREST RATES

           MEANS LARGER MORTGAGE PAYMENTS, LARGER LOAN AND CREDIT CARD
           PAYMENTS, LARGER PAYMENTS ON THAT AUTOMOBILE, AND THAT WOULD
           FAR OUTWEIGH THE SMALL SHARE OF THE BENEFITS FROM THE TAX CUT
           WHICH THAT AVERAGE TAXPAYER MIGHT RECEIVE. THE TAX PROGRAM
           THAT'S BEING OFFERED US TO IS ALSO BASED ON UNREALISTIC
           PROJECTIONS. NOW, PROJECTIONS ARE ALWAYS RISKY. WE'VE SEEN MANY
           FEDERAL BUDGET ESTIMATES, AND WE KNOW THAT AS QUICKLY AS THE
           SURPLUSES ARRANGES THEY COULD DISAPPEAR IN THOSE ESTIMATES. THE

           ESTIMATES OF BOTH THE CONGRESSIONAL BUDGET OFFICE AND THE
           OFFICE OF MANAGEMENT AND BUDGET HAVE FREQUENTLY BEEN FAR OFF
           THE MARK IN RECENT YEARS. AND THAT'S NOT THEIR FAULT. WE'VE GOT
           SOME BRIGHT ECONOMISTS IN THE C.B.O. AND THE O.M.B. BUT THEY
           HAVE A DIFFICULT TASK TO DO. FORECASTING THE PERFORMANCE OF THE
           ECONOMY, PARTICULARLY OVER THE COURSE OF SEVERAL YEARS, IS MORE
           ART THAN SCIENCE, AND THERE'S A LOT OF GUESSWORK IN IT. FOR
           INSTANCE, LAST AUGUST THE C.B.O. ESTIMATED THAT THE UNIFIED

           BUDGET SURPLUS FOR THE FISCAL YEAR 2000 WOULD BE $79 BILLION.
           BUT JUST FOUR MONTHS LATER, IN A JANUARY 1999 C.B.O. DOCUMENT,
           THE SURPLUS FOR FISCAL YEAR 2000 WAS ESTIMATED AT $130 BILLION.
           IN FOUR MONTHSS IT JUMPED FROM $79 BILLION ESTIMATE TO $130
           BILLION ESTIMATE. AND THE JULY ESTIMATE FOR FISCAL YEAR 2000
           NOW PROJECTED A $161 BILLION SURPLUS. SO, THERE'S BEEN A CHANGE

           OF OVER $100% IN THE PROJECTION OF THE SURPLUS IN LESS THAN A
           YEAR. IF MOST AMERICANS WERE CONFRONTED WITH SUCH UNCERTAINTY
           OVER THEIR OWN BUDGET SITUATION, THEY WOULD FOLLOW A CAUTIOUS
           COURSE, AND WE SHOULD, TOO. THE PROJECTIONS IN BOTH THE
           UNDERLYING PROPOSAL AND THE PENDING AMENDMENT TO IT ARE
           EXTREMELY RISKY BECAUSE THEY'RE BASED ON ASSUMPTIONS ABOUT

           DOMESTIC SPENDING LEVELS THAT ARE HIGHLY UNREALISTIC. THE
           ON-BUDGET SPLURX WIT REPUBLICANS NOW SAY WILL PAY FOR THE TAX
           CUT, IS RELIANT LARGELY ON MASSIVE CUTS IN DISCRETIONARY
           SPENDING. $595 BILLION OVER TEN YEARS. NOW, THAT IS A 23% CUT
           IN REAL TERMS -- FROM THE 1990 LEVEL -- 1999 LEVEL ADJUSTED FOR
           INFLATION. DO WE REALLY BELIEVE THAT WE WILL BE CUTTING

           DISCRETIONARY PROGRAMS BY 23% IN REAL TERMS?
           IS THAT WHAT WE'RE DOING NOW?
           AND IF A REALISTIC DEFENSE SPENDING LEVEL IS ADOPTED, EVEN THE
           PRESIDENT'S PROPOSAL, IF WE ASSUME JUST THAT, THE DOMESTIC
           SPENDING CUT WOULD GROW TO $775 BILLION OVER TEN YEARS, WHICH
           IS A 38% CUT IN REAL TERMS. NOW, WE'VE SEEN PROOF IN THE LAST

           FEW WEEKS THAT THESE LEVELS ARE UNREALISTIC. THE SO-CALLED
           SPENDING CAPS ARE ALREADY BEING EXCEEDED BY ATTACHING EMERGENCY
           SPENDING LABELS TO NEW FUNDING. WE'VE ALREADY HEARD FROM THE
           CHAIRMAN OF THE APPROPRIATIONS COMMITTEE THAT THESE LIMITS OR
           CAPS ARE GOING TO BE LIFTED IN ANY EVENT. THE HOUSE TENDS TO
           USE EMERGENCY SPENDING TO GET AROUND THE CAPS, AND APPARENTLY
           WE'RE GOING TO BE MORE FORTHRIGHT AND JUST LIFT THE CAPS. AND
           SO MOST PEOPLE IN CONGRESS ALREADY BELIEVE, WHETHER OR NOT THEY

           ACKNOWLEDGE THIS PUBLICLY OR NOT -- MOST OF US REALLY BELIEVE
           THAT THE CAPS ARE SIMPLY NOT GOING TO HOLD. AND SO WE ALREADY
           HAVE STRONG EVIDENCE THAT THE BASIS OF THE SURPLUS PROJECTION
           IS N REALISTIC OR CREDIBLE. THE PROPOSAL BEFORE US IS GOING TO
           TAKE THE ECONOMY BACKWARDS, JUST AS WE'RE CLIMBING OUT OF A
           DEFICIT DITCH. IN 1992, THE DEFICIT IN THE FEDERAL BUDGET WAS
           $290 BILLION BILLION. WE'VE MADE REMARKABLE PROGRESS, WHICH HAS

           BROUGHT US NOW TO THE THRESHOLD OF SURPLUSES. IT CAME IN LARGE
           PART BECAUSE OF A DEFICIT-REDUCTION PACKAGE WHICH PRESIDENT
           CLINTON PRESENTED IN 1993 AND WHICH WE PASSED BY A MARGIN OF
           ONE VOTE. WE SHOULD NOT NOW BY PASSING A TAX BILL LIKE THE ONE
           BEFORE US HEAD DOWN THE ROAD TOWARDS NEW FUTURE DEFICITS. THE
           ALTERNATIVE THAT DEMOCRATS OFFERED YESTERDAY WAS FAR
           
           BETTER -- BY ALL THREE TFTS: THE TEST OF FAIRNESS, THE TEST OF

           PRUDENCE, THE TEST OF CREDIBLE. BUT BY THOSE SAME THREE TESTS,
           MR. PRESIDENT, WE SHOULD HOLD OFF ON ANY TAX CUT. WE SHOULD
           HOLD OFF ON ANY TAX CUT, PERIOD. FIRST, WE SHOULD SEE IF THE
           SURPLUS IS REAL BEFORE WE ADOPT TAX CUTS. SECOND, IF THE
           SURPLUSS ARE REAL, WE SHOULD PAY DOWN THE NATIONAL DEBT FASTER
           AND, THIRD, WE SHOULD SAVE TAX CUTS FOR A TIME OF ECONOMIC
           SLOWDOWN. THE ARGUMENT IS MADE THAT THIS IS THE TAXPAYERS'

           MONEY. IT IS. BUT THE ECONOMY IS THE AMERICAN TAXPAYERS' TOO.
           THE ECONOMY BELONGS TO THE AMERICAN TAXPAYER. SOCIAL SECURITY
           BELONGS TO THE AMERICAN PEOPLE, JUST LIKE THIS MONEY BELONGS TO
           THE AMERICAN PEOPLE. THE SURPLUS BELONGS TO THE AMERICAN
           PEOPLE, SO DOES THE MEDICARE PROGRAM BELONG TO THE AMERICAN
           PEOPLE. OUR EDUCATION PROGRAM, HELPING PEOPLE THROUGH COLLEGE,
           BELONGS TO THE AMERICAN PEOPLE, JUST LIKE THE SURPLUS DOES.
           THESE ARE TAXPAYERS' DOLLARS. THERE CAN BE NO DISPUTE ABOUT

           THAT. BUT THE VETERANS' PROGRAM IS THE AMERICAN PEOPLE'S
           PROGRAM. WHEN WE CUT VETERANS' HEALTH CARE, WE ARE CUTTING INTO
           SOMETHING THAT THE AMERICAN PEOPLE WANT. IT IS THEIR PROGRAM,
           JUST LIKE THIS SURPLUS, JUST LIKE THE TAXES ARE THE AMERICAN
           PEOPLE'S. AND THE AMERICAN PEOPLE ARE SPEAKING LOUDLY -- AT
           LEAST TO ME, AT LEAST IN MY OFFICE, AT LEAST TO ME WHEN I GO
           BACK HOME TO MICHIGAN EVERY WEEKEND AND TALK TO THE AMERICAN
           PEOPLE PEOPLE. WHAT THEY'RE TELLING ME IS PAY DOWN THE DEBT.

           PROTECT SOCIAL SECURITY, PROTECT MEDICARE. DO WHAT YOU NEED TO
           DO TO INVEST IN EDUCATION. DON'T CUT VETERANS' PROGRAMS. BUT WE
           DON'T NEED THIS TAX CUT THAT'S BEING PROPOSED AT THIS TIME, NOT
           JUST BECAUSE IT IS UNFAIR TO MIDDLE-INCOME AMERICANS, WHICH IT
           IS -- SINCE MOST OF THE BENEFITS GO TO THE UPPER FIFTH -- BUT
           WE DON'T NEED THE TAX CUT BECAUSE WE WANT DEBT REDUCTION, REAL
           DEBT REDUCTION. THAT'S WHAT THEY'RE TELLING US. THAT'S WHAT THE
           AMERICAN PEOPLE, WHO PRODUCED THIS SURPLUS, WHO SINDSZ THE TAX

           MONEY, ARE TELLING US. AND THEY'RE SENDING US LOUDLY, NOT JUST
           IN PUBLIC OPINION POMS -- IN THE MAIL THAT WE OPEN UP, IN THE
           PHONE DHAULS WE GERXT AND IN THE PERSONAL PLEAS THAT WE GET
           WHEN WE GO HOME. AND THAT IS EXACTLY WHAT WE SHOULD DO, IS TO
           HOLD OFF ON ANY TAX CUT AND REDUCE THE DEBT WITH THE MONEY THAT
           OTHERWISE WOULD GO TO THAT TAX CUT -- AGAIN P NOT JUST BECAUSE
           IT IS UNFAIR, WHICH IT IS, BUT BECAUSE IT IS UNWISE AND

           IMPRUDENT. MR. PRESIDENT, I YIELD THE FLOOR.
           

           THE PRESIDING OFFICER: THE SENATOR FROM TEXAS.
           

           MR. GRAMM: MR. PRESIDENT, IT'S MY UNDERSTANDING THAT THE
           DEMOCRAT SIDE OF THE AISLE HAS COMPLETED THEIR RUN OF SPEAKERS
           SPEAKERS. THEY HAVE A LITTLE TIME LEFT. I HAVE A LITTLE BIT
           MORE, BUT IT WOULD BE MY INTENTION, IF IT SUITS EVERYBODY ELSE,
           TO GO AHEAD AND TRY TO ANSWER ALL THESE POINTS THAT HAVE BEEN
           MADE AND TRY TO DEVIATE FROM MY BACKGROUND AS A SCHOOLTEACHER
           IN DOING IT AND NOT TAKE ALL DAY. AND THEN GO AHEAD AND YIELD
           BACK MY TIME, IF THEY WOULD YIELD BACK THEIRS. AND THEN WE'LL
           SET MY VOTE ASIDE, LET SENATOR KENNEDY OFFER HIS AMENDMENT, AND

           THEN THAT WILL SUIT EVERYBODY ON TIME. THE ONLY THING I WANT TO
           BE SURE OF IS THAT I WOULD, SINCE I WANT TO BE SURE I GET TO
           ANSWER EVERY POINT THAT'S BEEN MADE, I'D LIKE TO BE THE LAST
           SPEAKER ON MY SUBSTITUTE. SO IF THAT WORKS WITH EVERYBODY, I'M
           HAPPY ABOUT IT. IF NOT, WE CAN DO IT ANOTHER WAY.
           

           MR. MOYNIHAN: WELL, MR. PRESIDENT?
           THE SENATOR'S PROPOSAL IS ENTIRELY AGREEABLE. I CANNOT,
           HOWEVER, LET PASS THE NOTION THAT TEXAS MAYBE THE ONLY STATE IN
           THE UNION WHERE A FORMER PROFESSOR OF ECONOMICS REFERS TO
           HIMSELF AS A SOMETIMES SCHOOLTEACHER. BUT THAT'S THE WAY IT IS.
           I LOOK FORWARD TO HEARING ALL OF THESE POINTS FROM HIM.
           

           MR. REID: WOULD THE SENATOR FROM NEW YORK YIELD FOR A QUESTION?
           
           

           MR. MOYNIHAN: SURE. ROOD REID COULD YOU GIVE US AN STATEMENT AS
           TO WHEN YOU MIGHT COMPLETE YOUR STATEMENT ON THIS AMENDMENT.
           

           MR. GRAMM: HOW MUCH TIME DO I HAVE?
           
           

           THE PRESIDING OFFICER: 18 1/2 MINUTES.
           

           MR. GRAMM: I WILL BE THROUGH BEFORE THAT. BUT IF SENATOR
           KENNEDY WANTED TO START MAKE HIS WAY OVER HERE... MR.
           PRESIDENT, WE'RE ABOUT TO WRAP UP THE DEBATE ON THIS AMENDMENT.
           AND I THINK SOMETIMES WE -- IT'S EASY TO GET CARRIED AWAY AND
           GET IN THE BUSINESS OF TRYING TO LOOK AT PEOPLE'S MOTIVES. AND
           I'D LIKE IN MY CONCLUDING COMMENTS TO TRY TO SET THIS WHOLE
           THING INERTECHIVE. -- THIS WHOLE THING IN PERSPECTIVE. I WONDER

           IF OUR DEMOCRAT COLLEAGUES DON'T DISCOVER EVERY WINCE IN A
           WHILE HOW PROGRESSIVE -- AND THAT'S A TERM THAT WAS MADE UP BY
           THE PEOPLE WHO WANTED THE TAX CODE TO BE HIGHLY SKEWED -- WHERE
           HIGHER INCOME PEOPLE PAY THE GREAT PREPONDERANCE OF TAXES IN
           AMERICA. WE'RE TODAY TALKING ABOUT CUTTING INCOME TAXES. OUR
           DEAR COLLEAGUE FROM MINNESOTA POINTS OUT THAT IF YOU MAKE LESS
           THAN $30,000, YOU'RE GOING TO GET LESS THAN $100 OF INCOME TAX

           CUTS IN THIS BILL. BUT WHAT OUR COLLEAGUE FAILS TO RECOGNIZE IS
           THAT 50% OF AMERICANS PAY ONLY 4.3% OF INCOME TAXES. 32% OF
           AMERICAN FAMILIES PAY NO INCOME TAXES WHATSOEVER. SO I KNOW IT
           MAKES FOR A GOOD SOUND BITE TO SAY, 32% OF AMERICANS WILL GET
           NO INCOME TAX CUT IF YOU CUT TAXES ACROWS THE BOARD BY 10%, BUT
           THEY DON'T GET A TAX CUT BECAUSE THEY DON'T PAY INCOME TAXES.

           TAX CUTS ARE FOR TAXPAYERS. THE PEOPLE WHO WILL GET A TAX CUT
           UNDER THIS BILL GET NO FOOD STAMPS. IS THAT AN OUTRAGE?
           THE PEOPLE WHO WILL GET A TAX CUT UNDER THIS BILL DO NOT
           QUALIFY FOR MEDICAID?
           IS THAT AN OUTRAGE THAT THEY DON'T QUALIFIED -- QUALIFY FOR
           MEDICAID?
           PEOPLE WHO WILL GET A TAX CUT UNDER THIS DO NOT QUALIFY FOR AID TO DEPENDENT CHILDREN?
           IS ANYBODY OUTRAINELED ABOUT THAT STPHIM NOT. BECAUSE AFDC,

           FOOD STAMPS, MEDICAID ARE NOT FOR EVERYBODY. THEY'RE FOR POOR
           PEOPLE. TAX CUTS ARE FOR TAXPAYERS. SO WHEN OUR COLLEAGUES
           STAND UP AND SAY, THE TOP ONE-QUARTER OF THE TAXPAYERS IN
           AMERICA WILL GET 60% OF THE TAX CUT UNDER THIS BILL, DON'T
           FORGET THAT THE TOP 25% OF INCOME EARNERS IN AMERICA TODAY PAY
           81.3% OF ALL THE TAXES. WHY WOULD ANYBODY BE SHOCKED THAT A

           GROUP OF PEOPLE THAT PAY 81.3% OF THE TAXES MIGHT GET 60% OF
           THE TAX CUT?
           IN FACT, WHAT -- OUR DEAR COLLEAGUE FROM MICHIGAN WAS POINTING
           OUT IS THAT THE ROTH BILL IS, FROM THE POINT OF VIEW OF THE
           EXISTING TAX CODE, PUTTING A HEAVIER BURDEN ON HIGHER INCOME
           PEOPLE. MY AMENDMENT DOESN'T DO THAT. NOW, SOME OF OUR
           COLLEAGUES THE OTHER DAY SAID -- OR A FEW MINUTES AGO,
           SUGGESTED THAT I WAS OFFERING THE HOUSE BILL.
{END: 1999/07/29 TIME: 13-00 , Thu.  106TH SENATE, FIRST SESSION}