January 27, 1998

Our agenda: Increase family income through elimination of the marriage tax penalty, payroll tax cuts, and/or expanding the 15% tax bracket. Make the IRS more accountable and consider eliminating it completely. Finance Committee hearings will yield a responsible, comprehensive bill that will end IRS's abusive practices. Lay the groundwork for a fundamental reform of our tax code, working toward a code that is simpler, fairer and flatter, and looking at other options that don't penalize savings. Protect our children's heritage by assuring that when we reach a budget surplus it is not spent on unnecessary programs but to pay off the debt and cut taxes. It's America's money, not Washington's.

America needs a tax code that does not penalize marriage, hard work, or savings, and we need an IRS that does not victimize honest taxpayers.

• Government's income has been growing: income to the Federal Government reached its highest level since World War II last year, as a percentage of GDP -- 19.8%. This level has been approached only twice since World War II: in 1969 resulting from the Vietnam war, and in 1981 because of inflation arising from the Carter administration. Total federal revenues will reach 19.9% of GDP this year.
• But, family income has been shrinking. The typical American family's total tax burden (federal, state, local) is 38% -- more than a third -- of the family income. Taxes consume one-third of everything America produces annually (32% of GDP in the third quarter of 1997). See Chart
• While government income increased nearly 1,000% in the past 30 years, family incomes have risen only half that much (492%). See Graph
• We need to pay our debts: when we reach a surplus (and we're not there yet) we should not spend the money, but use it to pay down the $5.5 trillion debt and cut taxes. Yet Clinton wants to spend more -- just as he outlined tonight and just as he called for five years ago. We can and must pay for new spending priorities by cutting current Washington spending, not family income.
• We need a tax code that is simpler and fairer: Our tax code is out of control with 17,000 pages of rules and regulations requiring 480 different types of forms, and enforced by some 102,000 agents. We need to overhaul this tax code. In 1986, Congress and the President worked to simplify the tax code by creating just two brackets, 15% and 28%. Now, we have five brackets with the top rate at nearly 40%.
• We need an IRS we can trust: A recent poll revealed 42% of Americans who had some contact with the IRS felt they were treated unfairly. Congress has already uncovered shocking practices by the IRS, stories of real people who spent years fighting tax bills that they did not owe, losing their savings, and even their homes and businesses in the process. Republicans will end this abuse of power with tough legislation that will go to the President for his signature this year.

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Let Parents and Teachers, Not Washington, DC, Reform Education

Our agenda: Train teachers to teach reading and increase parental involvement. Allow schools to provide periodic testing for teachers and merit pay for teachers who excel. Provide tax-free savings accounts for parents to pay for their child's educational costs. Give block grants to states for use in the classroom, not for bureaucratic overhead. Allow schools to retire incompetent teachers hiding behind their tenures. Give low-income children freedom to attend a school where they don't fear for their lives. Free up federal funds to weed out the few students who terrorize and harm classmates and teachers. Encourage growth of high-quality charter schools by providing access to a wide range of funding sources.

We can do a better job assuring our children are well-educated by cutting the federal strings on education money and allowing parents and teachers to use it as they see fit.

• Our education bureaucracy wastes precious dollars: There are 788 federal education programs, 181 within the Department of Education, 121 of which apply solely to K-12 education. These in turn are run by 39 overlapping bureaucracies that siphon off money that should go straight to the classroom.
• Our children are ill-prepared: Too many high school graduates are not adequately prepared to meet the challenges of college or the workplace:
• 43 % of high school seniors scored below the basic level in science last year.
• 29 % of all college freshmen must take at least one remedial course (usually in mathematics).
• 68 % of employers say that high school graduates are not adequately prepared to succeed in the workplace, and 52 % of college professors reported that the students they teach lack the skills necessary to succeed in college.
• Standardized test scores have been dropping over the last three decades: Compared to the 1966-67 school year, Scholastic Assessment Test (SAT) math and verbal scores for 1997 show that student achievement is going in the wrong direction. Verbal scores on the SAT are nearly 40 points lower in 1997 than in 1967, falling from an average score of 466 to 428. SAT math scores are 10 points lower in 1997 than in 1967, falling from an average score of 492 to 482.
• Too many schools are unsafe: Each year, 3 million crimes occur on or near school grounds. No wonder students skip or even drop out of school in fear for their safety.
• One in every nine students -- and one out of every three in high-crime areas -- said they had cut class or stayed away from school to avoid being beaten or shot, and one in every eight students -- and two in every five in high-crime areas -- carries a weapon to school for protection.
• Parents and Teachers Can Improve Learning in the Classroom: Let's give the money back to the schools with only string attached -- use the money for the classroom, not bureaucratic overhead. Let's allow local districts to set up periodic testing and merit pay programs for teachers, and assure bad teachers don't have a life-long guarantee to a job they're not doing well.

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Families, Not Government, Should Make Child Care Decisions

Our agenda: Reduce the tax burden on families so they can make the choices that are best for them. Allow parents to choose the sort of flexible work days that government employees have, so they get flexibility without losing pay. Or let them choose to take compensatory time off in lieu of pay. Give stay-at-home parents a break, too. One option is to allow couples to split their net income so each is taxed separately, resulting in a substantially lower tax liability in many cases; another is to extend child care tax credits to stay-at-home parents. Boost take-home pay by increasing the personal exemption for families with children. Give older Americans a financial incentive to provide child care. Already 16% of preschoolers (that's 1.7 million children) with working moms are cared for by their grandparents. Provide tax incentives for small businesses (America's largest employer) to provide on-site care. Restore the home-office deduction for parents who work out of the home. More than half of all small businesses began in the home, and more than half of those were begun by women.

Parents--whether they work in or out of the home--need more choices, not fewer, when it comes to caring for their children, including the option of more flexible work arrangements. What they don't need is government interfering with what they know is best for their families.

• The President's emphasis on day care institutions is misplaced: According to the Census Bureau, only 29 percent of preschoolers (under age 5) whose moms work attend organized day care centers.
• Many children with a working mom are cared for at home: Nearly half (43 percent) of working moms rely on their husbands or a relative to watch the children. Of preschoolers with working moms:
• 18 % are cared for by their fathers;
• 16 % are cared for by their grandparents; and
• 9 % are cared for by another relative.
• And millions of children are cared for by moms who choose to stay home: 48 % (9.4 million) of preschoolers are cared for by their own mothers. (Heritage Foundation, January 23, 1998)
• It's wrong to offer a tax break only to "working" moms: All moms work, whether in or out of the home. Yet, not one dollar of the expanded child care tax credit President Clinton is proposing can go to stay-at-home moms: both spouses must be in the workforce to be eligible.
• Clinton's tax break also won't help families who rely on relatives for child care: Under the child tax credit that Clinton wants to triple, those parents who attempt to claim the credit not only would be required to pay a relative for looking after a child, but likely would be designated an "employer" and required to withhold and pay the Social Security payroll tax, Medicare tax, and federal unemployment tax.
• A Federal takeover of child care? Parents don't need further federal intrusion into child care; 96% of parents find care they deem satisfactory, and the Department of Health and Human Services reports child care is witnessing "a strong commitment to quality" on the state level. So, why do we want to impose unnecessary federal standards which, as a 1989 study published in Ohio State University's journal Theory Into Practice, could increase child care costs by 80 percent without any guarantee that children in day care will be any safer than they are today?

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Let's Get Serious About Fighting Drugs and Crime

Our agenda: Raise the penalties for trafficking in powder cocaine. Reform the juvenile justice system to help ensure that juveniles who commit serious, adult crimes will be punished as adults. Ensure that anyone who carries a gun during a crime gets a mandatory prison term. Give the "drug czar" additional authority to wage a successful war against drugs.

Republicans are going to continue our fight against crime. The days of blaming victims and apologizing for criminals are over. We insist on safe schools and safe streets.

• Americans say crime and drugs are most important issues facing the country: Just last month, 16% of Americans said crime and violence were the nation's most important problem, and 12% said drugs were; no other issue was of such importance.
• The crime clock is ticking: A murder is reported to the police every 21 minutes, a rape every 5 minutes, a robbery every 48 seconds and a serious assault every 28 seconds. An auto theft is reported every 20 seconds, a burglary every 11 seconds, and a simple theft every 4 seconds.
• Getting guns out of the hands of crooks: Republicans are going to continue their efforts to crack down on crime. The Senate already has passed Senator Helms's bill (S. 191) to ensure that anyone who carries a gun during the commission of a crime gets an additional five years in prison; if the gun goes off, he gets an additional ten years. For the second offense, a convicted felon will get 25 years tacked on.
• The link between drugs and crime: 16% of federal prisoners, 30% of state prisoners, and 27% of local prisoners were under the influence of an illegal drug when they committed the crime that put them behind bars; 10% of federal prisoners, 17% of state prisoners, and 13% of local prisoners have committed a crime to get money to pay for their drugs.
• Additional authority to attack drugs and drug-related crime: Republicans are going to pass a bill (H.R. 2610) to reauthorize the Office of National Drug Control Policy. That bill gives the office additional, constitutional authority to fight the war against drugs, and it requires a long-term national strategy combined with a method for measuring success or failure.
• Juvenile crime rate is alarming: Juveniles have been committing more --and more serious-- crimes in recent decades. From 1988 to 1994, juvenile arrests for violent crimes increased 50%. From 1984 to 1994, the number of juveniles committing homicide tripled. From 1985 to 1994, 50% of the increase in robberies was attributable to juveniles.
• Reforming juvenile justice: Republicans are going to pass Senator Hatch's bill (S. 10) to reform the juvenile justice system by helping ensure that juveniles who commit serious, adult crimes (e.g., murder and rape) will be punished as adults. Also, the bill fights gang crime by beefing up federal law to permit federal prosecution of persons committing two or more gang-related crimes (e.g., drug dealing, witness intimidation, and drive-by shooting) and requiring a 10-year mandatory minimum penalty and forfeiture of assets for those convicted. The bill aids state and local anti-crime programs by providing additional federal resources to prosecute, incarcerate, and treat juvenile criminals; fund effective prevention efforts; and maintain, improve, and distribute juvenile criminal records. The bill attacks the connection between teen drug abuse and teen crime by helping the states to test for drug abuse if teens are arrested.
• Kids and drugs: Drugs are sweeping through American schools like an epidemic. By the end of 12th grade, 54% of American kids have used an illegal drug: 14% have used LSD, 9% have used cocaine, and 50% have used marijuana. 90% of 12th graders say it is "easy" to get marijuana, and 43% say it is "easy" to get cocaine.
• Getting tough with cocaine dealers: Republicans are going to pass Senator Abraham's bill (S. 260) to raise the penalties for trafficking in powder cocaine. Currently, trafficking in crack cocaine carries a stiffer penalty. The GOP is going to reduce the disparity in a way that does not give a break to crack dealers. (In contrast, the Administration sought to lower the penalty for dealing in crack.)
• Youthful drug use has grown steadily since 1992: The prestigious "Monitoring the Future" study of drug use by teenagers began in 1975. It has shown that drug use among 12th graders peaked in 1981 and then fell every year until it "bottomed-out" in 1992 when 40.7% of 12th graders said they had used an illegal drug sometime during their lifetime. Tragically, illegal drug use began climbing after 1992 and has grown steadily ever since. In the most recent survey (1997), 54.3% of 12th graders had used an illegal drug sometime during their lifetime -- an increase of one-third in the five years since 1992! This reversal is outlined in the chart below. Republicans are going to help ensure that the influential institutions of American life -- including influential persons in American government -- do not send the wrong signals to America's kids about the dangers of drugs.

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Additional Agenda Items

The President should join us in enacting the National Missile Defense Act that will deploy a national missile defense system to defend all 50 states from a limited ballistic missile attack. Vote to override the President's indefensible veto of the Partial Birth Abortion Ban Act. Enact efforts to reduce teen smoking. Assure more Americans get health care coverage by making private insurance more affordable through changes in the tax code and through medical malpractice reform.

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The Republican Congress: Building on Past Successes

Republicans look forward to the opportunities of the coming year. Our agenda is ambitious yet achievable, and it builds on the significant accomplishments that have been made since Republicans took control of Congress following the elections of 1994. Let's remember where we were, and how far we've come with the help of a Republican Congress:

• We balanced the budget and cut taxes on hardworking families: Republicans promised to balance the budget and cut taxes -- and we kept that promise every year since Republicans regained control of Congress. The Republican budget that was passed last year will balance in 2001, and we intend to make the changes to balance it sooner.
• The Republican budget cut taxes by $265 billion (over 10 years), giving tax relief to all Americans, including a $500-per-child tax credit.
• President Clinton never proposed a balanced budget until Republicans took control of Congress in 1995. He raised taxes $242 billion in 1993, despite promising to cut them when he campaigned for the job in 1992. And, had his government-run health care plan passed in 1994, taxes would have increased another $290 billion (over 10 years).
• Clinton never proposed any tax cut until he sought reelection in 1996 -- even that was erased by tax increases in the same plan. Clinton vetoed a tax cut in 1995 -- the first major cut since President Reagan was in office. Yet, in October 1995, President Clinton admitted that he "raised taxes too much."
• Republicans saved Medicare, by averting its bankruptcy in 2001 and extending its life to 2010.
• Republicans reformed welfare despite two Clinton vetoes. Some states' caseloads have dropped 50%.
• Republicans reformed our neglected foster care system, assuring easier and more timely adoption of children in the foster care system, and ensuring that children's health and safety needs come first.
• Economic upturn preceded this President: The current economic prosperity began in March of 1991 -- long before this president came into office -- and it has continued because of sound monetary policy from the Fed and market confidence in the prospect of fiscal discipline and pro-growth tax cuts under a Republican-led Congress. The Dow-Jones Industrial Average was 3301 at the end of 1992, just before Clinton took office. It was 3834 at the end of 1994, just before Republicans reclaimed Congress. Today it is 7700.