The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“PMA VICTORY” mentioning the U.S. Dept. of Commerce was published in the Senate section on pages S15767-S15770 on Oct. 26, 1995.
The publication is reproduced in full below:
PMA VICTORY
Mr. PRESSLER. Mr. President, I rise today to declare victory for rural community and small city electric ratepayers. I am pleased that both the House and the Senate budget reconciliation bills do not contain any language requiring a sale of the Southeastern, Southwestern or Western Power Marketing Administrations--collectively known as the PMAs. As I have stated on this floor many times before, this is a critical issue to my fellow South Dakotans.
As my colleagues know, during Senate consideration of the Budget Resolution earlier this year, my colleague from Montana, Senator Baucus, and I offered an amendment that expressed the Senate's opposition to the sale of the Southwestern, Southeastern and Western Area Power Administrations. The Senate voted overwhelmingly against a motion to table that amendment.
The balanced budget reconciliation bill now before us reflects the wishes of the Senate. The PMAs represent a government program that works. They provide affordable power to rural communities and small cities and still manage to turn a profit for the Federal Government.
As I have said again and again, sale of the PMAs would have a devastating effect on South Dakota citizens in rural communities and small cities--and on people across the country.
Public power serves many functions in South Dakota. As a sparsely populated State, utilities are faced with the challenge of how to get affordable electricity for those who live in small cities and rural communities where there are less than two people per mile of transmission line. Public power provides the solution.
Public power, purchased through the Western Area Power Administration, known as WAPA, costs South Dakotans an average of 2.5 cents less than the market rate. This lower cost is essential to encourage economic development in small cities and towns. It allows revenue to be reinvested in additional transmission lines, and better service. The availability of hydropower from the Missouri River to rural cooperatives and municipalities has helped to stabilize power rates. With 7,758 miles of transmission lines in the Pick-Sloan region, WAPA can serve 133,100 South Dakotans--without charging them an arm and a leg.
Public power has brought more than electricity to South Dakota. For example, Missouri Basin Municipal Power Agency, based in Sioux Falls, has embarked on a program offering incentives for planting trees. The goal is to plant at least one tree for each 112,500 meters in the Agency's membership territory.
Public power also brings new jobs to the communities it serves. In part due to the low cost of power from East River Electric, there are now three injection molding plants based in Madison, SD.
East River Electric also is involved in other economic development activities. It provides classes to help the community attract new businesses, and offers grants for feasibility studies associated with economic development projects. South Dakota clearly has benefitted from the work of Jeff Nelson, the general manager of the East River Electric Power Cooperative.
Public power is a South Dakota success story. It is a source of innovation, development, and community pride. I am sure the same is true in other small cities and rural communities across America. That is why I fought against proposals to sell WAPA and two other power marketing administrations. The proposal to sell the PMAs was a budgetary smoke-and-mirrors effort to disguise a backdoor tax on rural and small city Americans.
In fact, a PMA sale would force South Dakotans--and public power consumers everywhere--to cover for the rest of America. Why? Because the sale of the PMAs could result in rate increases totaling more than
$47 million.
Some argued that the sale of the PMAs would generate revenue for the Federal Government. Would it? Let us look at the facts.
PMAs still owe almost $15 billion in principal. Also, more than $9 billion in interest already has been paid to the Federal Government. By selling the PMAs, the government would forfeit future interest earning on the outstanding loans.
In fact, the Congressional Budget Office [CBO] recently released its scoring of a House proposal to sell the Southeastern Power Administration [SEPA]. The proposal, approved by the House Transportation and Natural Resources Committees, limited the sale only to actual power generation and the right to market the power.
CBO scored the House proposal to sell SEPA at zero--showing that the sale would cause no gain or loss to the Treasury. In other words, CBO certified what I have said all along--that a PMA sale would not generate net revenue.
In addition, CBO estimated that the proposal to sell SEPA would cause rates to increase up to 75 percent in some areas. CBO noted that the supposed rate ``cap'' included in the House proposal would do nothing to protect 95 percent of the rural electric cooperatives or municipal utilities that buy power from SEPA from significant rate increases. This proves what South Dakotans have known all along--selling the PMAs would rob rural ratepayers and destroy a vital community resource.
Mr. President, I am pleased that with strong bipartisan support, we fought successfully to prove the worth of public power. We demonstrated how necessary it is to the lives of rural and small city Americans. I am proud of the people of South Dakota who have stated their message loud and clear--through thousands of postcards, letters, and phone calls. South Dakotans such as Ron Holsteen, Bob Martin, and Jeff Nelson have been leaders in their opposition to the proposed PMA sale and I again congratulate them and commend their hard work. They and their counterparts are the true heroes in this victorious battle.
Public power is a solid investment for the Nation. Public power is one of the great success stories of South Dakota. There is no question: For now, we have won the war for the continued existence of public power. This is a victory for all Americans who reside in small cities and rural communities.
The PRESIDING OFFICER. Who yields time?
Would the Senator from New Mexico suggest the absence of a quorum?
Mr. DOMENICI. I suggest the absence of a quorum.
The PRESIDING OFFICER. I thank the Senator.
The absence of a quorum has been suggested. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DOMENICI. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. Mr. President, I yield 2 minutes to Senator Kyl off the bill.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. Thank you, Mr. President. If there is a single vote on which the American people will judge the success or the failure of this Congress, if there is a single vote this session that will change the course of American history, it will be the vote on the Balanced Budget Reconciliation Act, which is before us today.
This single vote will determine whether we finally face up to the grim reality of a national debt that is $4.9 trillion and growing daily, a debt that now amounts to $18,500 for every man, woman and child in this country, or whether we continue the spending spree that we have been on for the last 20 years at the expense of our children and grandchildren.
This single vote is more important than the votes on the balanced budget amendment and the line-item veto. Those are the tools that will help us balance the budget and keep it there. This bill actually balances the budget.
This single vote will determine whether we keep the promises we made to the American people last fall that we would balance the budget and provide badly needed tax relief or whether it is business as usual: Promises out the door as soon as it is time to make the final decisions, the difficult decisions.
I believe that this Congress, the new majority and the American people who sent us here last year believe that it is different. We have spoken, we have worked, we have voted for the fiscal restraint for years but never had the votes in the Congress to prevail. This time is different. We finally have the chance and the numbers to prove what we say is what we mean: That Government is too big, that it costs too much, that it intrudes too far into the lives of our people and that, finally, we are willing to do something about it.
Mr. President, this is the most crucial vote that we will cast, and I am assuming that the majority of this body will support this Balanced Budget Reconciliation Act and put this country on the right course for the next century.
I believe this Congress--the new majority that the American people sent here last year--is different. We have spoken, we have worked, we have voted for fiscal restraint for years, but have never had the votes in Congress to prevail. This time is different. We finally have the chance, and the numbers, to prove that we mean what we say--that government is too big, it costs too much, and it intrudes too far into the lives of our people--and that we are willing to do something about it.
Former Education Secretary Bill Bennett probably said it best in testimony before the Budget Committee earlier this year. He said:
We have created a nanny state that takes too much from us in order to do too much for us. This has created inefficiency, sapped individual responsibility, and intruded on personal liberty.
Mr. President, it is time to change course.
Fourteen years ago, President Reagan embarked on a similar mission to curb Federal spending, cut taxes, and reduce regulation. He succeeded in cutting taxes--and that launched the longest peacetime economic expansion in our Nation's history. And, I will talk about that a little more later.
Yes, deficits soared. But that was not because of the tax cuts. It was because the majority in Congress at the time did not have the courage or the will to limit Federal spending.
In the budget we have before us, spending growth is limited to about 3 percent a year. Had Congress been able to exercise the same restraint beginning in fiscal year 1982--the first year President Reagan had full control of the budget--the budget would not only have balanced in fiscal year 1989, there would actually have been a $73.5 billion surplus. Instead, Congress let spending grow by about twice that rate. Spending skyrocketed from $745.8 billion in fiscal year 1982 to $1.1 trillion by fiscal year 1989.
So even as revenues grew dramatically--from $617.8 billion in fiscal year 1982 to $990.7 billion in fiscal year 1989--the deficit soared because spending grew faster. A 60.4-percent increase in revenues was not enough for the spendthrift majority in Congress.
To my colleagues who say this is no time for a tax cut, let me tell you that the middle-class tax cut in our budget does not come at the expense of a balanced budget, but as a result of one. It is the dividend that the American people receive from the downsizing of government: the $200 million reduction in the congressional budget; the phasing out of the Commerce Department; welfare reform; and the consolidation and elimination of other programs to name a few.
In fact, the Congressional Budget Office has certified that our budget meets its deficit reduction target; will help the economy; and, as a result, will produce a $170 billion economic dividend. We can and should return this dividend to the people. The $170 billion, combined with $21 billion from the repeal of corporate welfare, and billions of dollars in other savings--none of which comes from Medicare--allows us to pay for the tax cut and balance the budget. That is certified by the CBO, the agency President Clinton praised as the most accurate forecaster of budget numbers.
My colleagues, taxes are a problem, but it is not because they are too low; they are too high. Go out and talk to people in your States. Listen to them. The typical family now pays over 40 percent of its income in Federal, State, and local taxes. That is more than it spends on food, clothing, and shelter combined. Americans are working more than 3 hours of every 8-hour workday just to pay taxes to various levels of government.
Back in 1948, the typical family paid only about 3 percent of its income to the Federal Government in taxes. The budget balanced that year. In fact, the entire Federal budget amounted to only $29.8 billion--about what we will pay this year for 43 days' worth of interest on the national debt.
Mr. President, the American people are not undertaxed. They are overtaxed. They need relief. When politicians say we cannot afford a tax cut now, it is because they do not want to give up the money that is available for them--for the politicians--to spend. Well, what about hard-working families? What about what they can afford?
These are people struggling every day to get the kids to school, go to work, and pay their bills. To the family with two kids earning
$20,000 a year, a $500 per child tax credit means a lot.
The Heritage Foundation recently estimated that 344,152 taxpayers in Arizona--more than 28 million taxpayers nationwide--are eligible for the $500 per child tax credit. Heritage estimated that 47,552 taxpayers in Arizona--3.5 million nationwide--would see their entire income tax liability eliminated as a result of the $500 per child tax credit. Those taxpayers are not wealthy, yet they are the ones who benefit most significantly from the Senate tax cuts.
In fact, 83 percent of the tax reductions in this bill will go to those with annual incomes under $100,000, and 70 percent will go to those with incomes under $75,000.
The bill includes a capital gains tax cut. A recent study by the Cato Institute found that the capital gains cut will benefit poor and working-class Americans most. The study found that the tax reduction would unlock hundreds of billions of dollars in unrealized capital gains, thus promoting investment in new technologies and entrepreneurial ventures. It would ``expand economic opportunities for working-class Americans by encouraging capital formation, new business creation, and investment in capital-starved areas, particularly inner cities, and lead to the creation of more than half a million new jobs and increase wages by the year 2000.''
People across America are frustrated. They are struggling day in and day out to make ends meet, while they watch the Federal Government squander their hard-earned tax dollars on everything from farm subsidies to pork-barrel highway projects, helium reserves, and welfare for lobbyists. President Clinton even wants us to pay ``volunteers'' to do their work--pay ``volunteers'' in the AmeriCorps program more than the average American earns in a year.
People in homes across the country are struggling with an oppressive tax burden while Congress and the President argue about who is rich, and about how much ``we'' can afford to give up in tax revenue. My colleagues, it is the American people--not government--that needs help, and this bill takes a small, but meaningful, step in that direction.
This bill is not radical or draconian. In fact, the tax cuts will total $245 billion over 7 years--just 2 percent of the total amount that the Federal Government will collect over that period. It is modest, and if the American people knew we were having such a battle over just 2 percent, they would be stunned.
Throughout the debate over the next few days, we will hear a lot about tax cuts for the rich. Whenever politicians start to object to tax bills because they do not tax the ``rich'' enough, or they provide too much relief for the ``rich,'' middle America better hold onto its wallet. As I pointed out before, more than 70 percent of the benefit of this cut goes to those with annual incomes of less than $75,000, so we are not talking about the super rich at all.
Remember in 1990 when Congress was supposedly going to soak the rich with a luxury tax on expensive cars, boats, jewelry, and furs? Well, it was not the rich who ultimately got soaked. The sale of yachts fell by 73 percent, and boatyards died. Sales of Cadillacs declined 17 percent. The rich simply avoided the tax by not buying the yacht or the Cadillac, and it was the guy on the line who ultimately paid the luxury tax--paid with his job. Congress had to repeal it.
In 1993, President Clinton called on the American people to pay higher taxes--he called it making a ``contribution'' to the Government. But it was the average woman on her way to work who found that she had to pay a higher price for gasoline to get there. It was the senior citizen making as little as $34,000 per year who found out he was among the ``rich'' President Clinton had in mind; he ended up paying higher taxes on his Social Security.
Now President Clinton says he made a mistake in 1993--that he raised taxes too much. I agree that he made a mistake, but if I recall correctly, he sent up a budget asking for $359 billion in new taxes--
$100 billion more than he eventually got. It turned out that there was no support in Congress for a tax increase of that magnitude, even among members of his own party. He ultimately had to settle for a tax increase of ``only'' $258 billion--still the largest in history.
Yes, President Clinton did raise taxes too much, and we have the chance in this bill to undo some of the damage. Not only have people been taxed too much, but they have lost jobs as well. A constituent of mine, Tom Ford from Tucson, AZ, contacted me recently about what the Clinton tax increase has done to him.
Mr. Ford makes a living as a special effects specialist for the motion picture industry. He lost one job on a film called ``China Spur,'' which was to have starred Willie Nelson, Ernest Borgnine, and Heather Locklear. The film was canceled when the Clinton tax increase took effect because the investor found he did not have enough money to take a risk on the film.
Tom Ford worked on another movie, ``Waiting to Exhale,'' with Whitney Houston. Again, taxes hurt the little guy. The project went forward, but corners were cut. Salary and hours were reduced. Whitney Houston got her full asking price, and paid all her taxes, as did Gregory Hines and Angela Bassett who also starred in the film. But the guys behind the scene--people like Mr. Ford--were forced to work for less. It was they who bore the brunt of the tighter budget that resulted from higher taxes.
What does that mean? Wealthier taxpayers like Whitney Houston do not get hurt. She has a great deal of talent, and will continue to command a good wage no matter what taxes are levied. But others are not so fortunate. When Mr. Ford does not work, or works fewer hours or for less money, he cannot buy the extra equipment he needs for filmmaking. And this, in turn, means someone who produces the equipment is also put out of a job. He cannot buy the new pick-up truck he needs for his business. The Ford dealer in Tucson loses a sale, and the factory worker in Detroit sees her job threatened because sales fall off.
Mr. Ford pointed out the irony in a letter to me. He said, ``the only good thing is that with a lower income brought on by higher taxes, I am now paying less in taxes to the government.'' But that is not what is supposed to happen according to the big taxers.
If you listen to the other side in this debate, you will hear that higher tax rates are supposed to bring in more revenue for the Government. But that is not what Tom Ford's experience demonstrates. High tax rates cost jobs and ultimately reduce revenues that might otherwise accrue to the federal Treasury.
That is the experience of the 1980's. Tax revenues increased from
$517 billion in fiscal year 1980 to $1.03 trillion by fiscal year 1990. They nearly doubled. And that is despite the fact that the top income tax rate fell from 70 percent to 28 percent. The share of total Federal income taxes paid by the top 10 percent of taxpayers, ranked by adjusted gross income, rose from just under 50 percent in 1980 to more than 57 percent by 1988. During a period in which their marginal rate fell by 60 percent, the wealthy paid almost 19 percent more in dollar terms in Federal taxes. That is because the tax base expanded as people worked more, invested more, and took money out of tax shelters and put it into taxable investments instead.
Just as the local department store does not lose money when it holds a weekend sale--volume more than makes up for a reduction in price--the government does not lose revenue when it reduces tax rates. Just the opposite occurs. With businesses expanding, more people working, and more investments being made, tax revenues will increase.
The opposite occurs when tax rates are increased. People change their behavior to avoid the higher tax. After the tax increases of 1990 and 1993, income tax collections actually declined from 8.6 percent of gross domestic product [GDP] to 8.2 percent of GDP in 1994.
Even if you disregard the dynamic effect of the tax cuts proposed in the budget before us today, tax revenues are projected to increase substantially. They will increase from $1.35 trillion in fiscal year 1995 to $1.85 trillion in fiscal year 2002. That is $500 billion--half a trillion--more money than we are collecting today.
Mr. President, how much is enough? Can the Government not get by with an extra 35 percent worth of revenue--an extra half-a-trillion dollars--to spend? How much more is needed?
Now there is a lot of talk about the spending cuts in this package; that they are too deep or that one group or another is being singled out. The fact is, most programs are not being cut at all. Medicare spending, for example, will rise from $178 billion this year to $274 billion 7 years from now. In other words, we will be spending 50 percent more in 7 years than we spend today. The average Medicare benefit will go from about $4,800 per person today to $6,700 in the year 2002. That is not a cut. Let us be honest. It is not a cut.
Student loan volume will grow from $24 billion in 1995 to $36 billion in 2002--another 50-percent increase. Be honest: a 50-percent increase is not a cut.
It is the logic that defines a spending increase as a cut that has gotten us into this predicament. It is like giving someone a 50-percent raise and having that person quit because he thinks his employer cut his salary. Let us be honest. An increase is not a cut.
Let us make no mistake about what these deficits mean. When mom, dad, grandma, and grandpa want more from the government than they are willing to pay for in taxes today--that is a budget deficit--we are all handing the bill, dollar for dollar--plus interest--to our sons and daughters, and their children yet to come.
Most people agree that the Federal Government should maintain a social safety net to provide individuals with the hand up that they need to escape hard financial times. No one here is proposing that we eliminate that helping hand. But, we have got to find a way to provide a safety net without leaving future generations with a legacy of debt and despair.
My grandson was born just 5 months ago and already owns a share of the national debt that is $18,500 and rising. He can expect to pay
$187,000 in taxes during his lifetime just to pay the increase on the national debt. What will be left of his income to care for his children? How will the Government care for the needy of tomorrow when every dollar of individual income tax revenue is devoted to interest on the national debt?
Mr. President, a balanced Federal budget offers hope. Yes, it will require that Congress prioritize spending so that the most important programs are not jeopardized. And wasteful programs will have to be eliminated. Some of the luxuries will have to be postponed to another day. A balanced budget will require heavy lifting, but it offers hope and opportunity.
The Congressional Budget Office predicts that a balanced budget would facilitate a reduction in long-term real interest rates of between 1 and 2 percent. That means that more Americans will have the chance to live the American dream--to own their own home. A 2-percent reduction on a typical 30-year $80,000 mortgage would save homeowners $107 a month. That is $1,284 a year, or over $38,000 over the life of the mortgage.
A 2-percent reduction in interest rates on a typical $15,000 car loan would save buyers $676.
The savings would accrue on student loans, and credit cards, and loans to businesses that want to expand and create new jobs. Reducing interest rates is probably one of the most important things we can do to help people across this country.
This bill includes incentives to help people buy insurance coverage for long-term health care, and to save in medical savings accounts. It includes a tax credit for adoption expenses, and estate tax reform so that families are not forced to sell their small businesses just to pay estate taxes to the Government.
This budget represents a break from business as usual. We are finally making the tough choices the American people sent us here to make. We are keeping our promises--for a change.
Will some people be unhappy with the bill? Of course. It is always easier to hand out money other people earned than it is to say ``no.'' Will some say they have been singled out? Of course. But if you look at the myriad of interests that say they have been singled out, you see that no one has been singled out at all.
This is a historic debate, the most important vote many of us will ever cast. Let us not miss this opportunity or another one might not arise until it is too late for our country. Vote for the Balanced Budget Reconciliation Act.
Mr. DOMENICI. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded and that I be allowed to speak for 2 minutes as in morning business, not to take away from the time on either side.
Mr. DOMENICI addressed the Chair.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, just so everyone will understand, we cannot be doing this because we are very, very close on getting to the amendments we have agreed to. In this instance, for 2 additional minutes, I will not object, just so Senators on our side know we are not going to be able to do any more of this until we get on the amendment. At this time, I will not object.
The PRESIDING OFFICER. Without objection, the order for the quorum call is rescinded. The Senator from Texas is recognized as in morning business.
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