July 20,1999

Committee Begins Examination of Chairman's Tax Cut Proposal

WASHINGTON -- The Senate Finance Committee met today to review Chairman William V. Roth's $792 billion, ten-year tax cut proposal. Roth delivered the following opening statement:

"Good morning. We're here today largely because of an unexpected windfall of revenues. In trying to balance the budget in 1997, Congress miscalculated the revenues that would be generated by the economy. Now, we need to make an adjustment and return the surplus to the American taxpayer.

"This mark is a refund of excess taxes. It is the Taxpayer Refund Act of 1999. It's simple purpose is to return to individuals and families the revenues that Congress had anticipated it would need, but that are now not needed to meet the requirements for which they were originally intended.

"And frankly, it's only appropriate that these revenue are returned. The level of federal taxation is at a record post World War II high. Overbearing liabilities and inequities in the tax code burden middle class individuals and families -- folks who are concerned about retirement, education, and affordable health care.

"Today we can begin to address these liabilities and inequities.

"The Senate has instructed this committee to reduce revenues up to $792 billion over 10 years. In fashioning that legislation I have asked each member of this committee to provide his views. Moreover, I have received a great deal of advice from other members, both in writing and in countless discussions.

"This mark is the product of that input. In drafting it, I have purposefully omitted several of my personal preferences, such as a 10% across-the-board rate cut -- which I sponsored -- in order to reduce, as much as possible, the controversial content of the refund the American taxpayer deserves.

"What we have produced in this mark is a combination of many tax reforms which members of this committee -- on both sides of the aisle -- have long hoped to achieve but could not because they were too expensive. For example, members on both sides of the aisle have long complained about the unfairness of the marriage penalty and the impact of estate taxes.

"We all agree that Americans do not save enough for their retirement. We likewise agree that Americans need help coping with their education expenses and the high cost of health care. And Members of this committee know what many do not; and that is, while we have legislated benefits for the American taxpayer such as the child credit and the HOPE scholarship, those benefits will not be enjoyed, as intended, unless we fix the alternative minimum tax.

"Today we have an opportunity to get all this done. And we should. Many of my colleagues are concerned that the refund in my mark is too large. To those who are concerned about discretionary spending, let me say that it is my understanding that both the Majority Leader as well as the Minority Leader continue to assert that the Senate will abide by the discretionary spending caps. Moreover, it should be noted, if those leaders change their minds, that the mark spends $10 billion less than allowed in fiscal year 2000.

"To those who are concerned about Medicare reform, making adjustments to the Balanced Budget Act of 1997 for Medicare, and providing a prescription drug benefit, let me say that we will dedicate the same energy of this committee to those purposes that you now see on the tax bill. When we return after the August recess, this committee's primary objective will be to achieve Medicare reform, with a prescription drug benefit, on a bipartisan basis. Contrary to what some have surmised, we will not be working then on a tax bill. Reconciliation allows us only one opportunity. That opportunity is now.

"If the tax bill is signed into law, there is up to $204 billion that could be used for Medicare reform and a prescription drug benefit. On Thursday we will hold our 9th and final Medicare reform hearing in order to receive the testimony of the Secretary of HHS. Yesterday, I wrote to each Member of the committee to solicit his views on this most important subject. Again, I look forward to receiving these recommendations.

"In short, there is no need to force a choice between cutting taxes and reforming Medicare. We can do both. And we can begin today."