Senator Dan Coats Introduces His "Families First" Bill

Text From Congressional Record:

Mr. GRAMS. Mr. President, I am pleased to join the distinguished Senators from Indiana and Idaho this morning, and a number of the other Senators who will be joining us later this morning, to talk about this very important issue--tax cuts--and to help continue the leadership on this most important issue.

I am proud to be a coauthor of this very important legislation, families first.

Mr. President, today we begin a debate that has been too long in coming. The American people are in desperate need of relief from their own Government, a Government that thinks it can spend our money better than we can spend our money. It has spent the last four decades just trying to prove that point.

In 1947, Americans paid just 22 percent of their personal income in the form of taxes--all taxes--to Federal, State, and local governments, including property taxes and the like.

Today, 40 years and hundreds of tax increases later, nearly 50 cents of every dollar earned by middle-class Americans goes to the Government to feed Government priorities. `We will solve all of our problems,' says Washington, `if you will just send us more of your money.' So we do, year after year. We have reached the point now where most families pay more tax dollars to the Federal Government than they spend for food, clothing, transportation, insurance, and recreation combined.

The 1993 Clinton tax bill did not help, either. As the largest tax increase in American history, it hit middle-class Americans right where it hurts the most--in their wallets.

Mr. President, the bottom line is taxes are just too high. The tax burden falls too heavily on the middle class. And, Mr. President, the result is that more and more Americans are being forced out of the working class and being forced into the welfare class.

But with their ballots last November, Americans called for tax relief. With the change in leadership in Washington, Congress is now finally in a position to deliver on that request.

Mr. President, we are taking the first step today with the introduction of the families first act--legislation calling for a $500 per child tax credit.

The $500 per child tax credit is relief for middle-class America.

And I would just like to show one of the few charts that we have out here this morning and talk about what this means.

In my home State of Minnesota, families first, if enacted, would provide nearly $500 million every year in tax relief to families across the State of Minnesota--$500 million into the pockets of families and individuals who will decide best on how to spend on those important needs such as food, clothing, shelter, education, or health care. They will make those decisions rather than some bureaucrat 1,100 miles away from Minnesota in Washington.

If you look at the home State of Senator Dan Coats in Indiana and what this would mean, it would mean for Indiana residents over $550 million a year in tax relief--$550 million every year. You add this total, and for all States it would be a $25 billion-a-year tax cut that would go into the pockets of families to decide how to spend. It would take that decisionmaking process out of Washington and put it down where it really belongs, and that is with the individuals who know best how to handle the problems that their families are facing.

As this chart clearly shows, our plan would return, as I said, $25 billion every year to families nationwide. And that includes from $418 million in Alabama every year to $61 million for the State of Wyoming residents. Again, $500 million a year would be dedicated to families in my home State of Minnesota.

Fully more than 90 percent of the tax relief would go to working Americans making annual salaries of $60,000 or less. So this is a plan that is targeted. More than 90 percent of the tax relief goes right to the individuals that have felt the burden the most over the last 30 years, and that is families making $60,000 or less.

Most importantly, our $500 per child tax credit would let 53 million working families keep more of their own hard-earned tax dollars. And $500 per child adds up to a lot more than just some pocket change.

I think, if you pick up the phone and ask many of the constituents in your districts if $500 or $1,000 for two children or $1,500 for three children would not make a big difference in their finances every year, for middle-income taxpayers, it may mean health insurance for their families where there was not any before, or maybe a better education for their children when before there were no other options. To lower income Americans, it may mean not having to pay any taxes at all.

Mr. President, there is widespread support also for the $500 per child tax credit among Americans in every income range, in every age bracket, among those with children and those without. These are the people who feel the pain every April 15 when they pay their taxes and who think it is time for the Government to feel a little bit of that pain instead.

But how can a government grappling with a $4.8 trillion national debt afford tax relief of any kind?

Well, the families first bill, which became the centerpiece of the budget plans offered last year by both Senate and House Republicans, pays for the tax credit by cutting Government spending. Every single dollar in tax relief is offset by another dollar in spending cuts.

I just want to refer again to the charts for the support that we have nationwide for a tax cut proposal. If you look at this one chart and you look at the different age groups, 18 to 25, 76 percent would approve of a tax cut. In the age group 26 to 40, 77 percent said, yes, let us have a tax cut. From 41 to 55, over 56 percent, and so on; 62 percent for 55 to 65; and, 65 and older, 58 percent said, yes, they would favor tax relief.

And if you look at income levels, people below $20,000, said, yes, they would like to have some more tax relief. And in all income groups it is either in the 60 or 70 percent range that say yes. So this is overwhelming support nationwide by every age group, every income group that really believes we are being taxed too much.

And by putting the Federal Government on a strict diet by capping the growth of Federal spending at 2 percent, we can balance the budget by the year 2002, including the tax cuts. Our bill proves that we can afford tax relief at the same time that we begin to restore some fiscal sanity to Washington.

During the debate ahead, we will hear calls to water down the $500 per child tax credit. We will be asked to means test it or to even lower the dollar amount. Some will want to limit the ages of the children eligible, or duck out on real relief by substituting an increase in the personal deduction. Some may oppose tax relief completely.

But that is not what the Americans were promised last year, or what the voters mandated in November. If we backtrack now, we will have to face an American public that is tired of being led on by politicians who promise one thing and then never deliver.

We have to hold firm on behalf of every American taxpayer and deliver the tax relief that we promised.

I want to commend our colleagues on the House Ways and Means Committee, who this week kept the covenant they made with the voters in the Contract With America and passed the $500 per-child tax credit. This was a victory for the taxpayers and a clear signal to the American people that they have not been forgotten by this Congress.

Mr. President, I am proud that Senator Coats and our Senate colleagues--what we call the 500 club--will be following up on the House's good work and fighting for the promises made in November: the promises of lower taxes, smaller government, stronger families.

Those are the principles embodied by the $500 tax credit--the principles that will once again put families first.

I would like to now yield some time to my good friend and colleague from Arizona.