Newt Gingrich outlined a bold plan for dealing with the federal debt and lowering taxes in a remarkably visionary speech 14 years ago while the Georgia Republican was serving as speaker of the House.
Gingrich spoke at a meeting of the Cobb County Chamber of Commerce in Marietta, Ga., on Jan. 5, 1998, the same day President Bill Clinton announced that the budget he would send to Congress would be balanced.
Gingrich said it was important to return any surplus produced by the strong economy to taxpayers in the form of across-the-board tax cuts, with the goal of having Americans pay a maximum of 25 percent of income in federal, state and local government taxes.
“We passed welfare reform, we've passed a balanced budget plan, we passed tax cuts, we passed a program to save Medicare for a decade without raising taxes,” Gingrich said in remarks recorded by the Federal News Service, a private transcription service.
“Now we are at a magic moment where if we are willing to take on the dialogue and say, all right, let's have an honest conversation: Should America be formed around ‘We the people,’ or should America be formed around ‘We the government’?
“Can we in fact take the ideas that are transforming productivity in the private sector and transform productivity in government? Can we set priorities? Can we rethink programs? And could we set these four goals: A drug-free safe America for our children, the best system of learning in the world at all ages, a retirement program that is better and safer for everyone, and not having the government take more than 25 percent of our income from any American?”
It would take 10 or 12 years to achieve those goals, Gingrich said, “but if we focused and got those four done, we'd leave our children and grandchildren a safer, healthier and more prosperous America. And I think that's a conversation worth having.”
The speaker was asked about the budget surplus likely that year and what to do with it.
“The surplus's first goal should be to pay down the debt, in particular to pay down the debt to take care of the trust funds,” Gingrich responded.
“We can pay off the transportation trust fund, and we could gradually begin to monetize the Social Security trust funds so we could have a safe Social Security system as we develop a more modern personal system for our children and grandchildren. That can be taken care of.
“I would like to see us as a goal to try to get to at least a small tax cut every year. And my reason is twofold. First I believe if you cut taxes a little bit every year over a generation, you'll get down to the 25 percent level, and I think that's the right level. I would argue that should be the goal of the state and local level, too. So we have got to find some model that says the Fed is going to shrink X amount, the state and local are going to have their burden shrink Y amount, but we are all going to get to a total combined burden of the three of us of no more than 25 percent.”
He said the average at the time was about 38 percent.
“My second reason is real simple: You have a $1,600,000,000,000 government. Basically what those who are opposed to tax cuts are saying is: ‘Let's waste another $5 billion on the earned income credit next year, because we don't have the nerve to solve it.’ ‘Let's waste another couple of billion dollars in food stamps, because we don't have the nerve to solve it.’ ‘Let's not look at every single department and make them downsize their bureaucracy, because we don't have the energy and discipline to do it.’ So rather than give you a tax cut we are going to throw the money away in Washington.
“So I would argue, as we did in our original contract, we were for a balanced budget with lower taxes with a less expensive government.”
Newt’s speech came four years after then Minority Whip Gingrich played a major role in promulgating the Contract with America, which detailed what Republicans would seek to accomplish if they gained control of the House. That year the GOP did become the majority party in the House for the first time in 40 years.
In his 1998 speech Gingrich also said one of his long-range goals was to eliminate the so-called death tax — high inheritance taxes — and to reduce the capital gains tax.
He said bilingual education should be phased out and all schoolchildren should be required to read in English by the 4th grade.
And he called on Congress to establish a commission with members representing three generations to consider ways to buttress the Social Security system.
He added: “Everywhere in America lie people who make long-term decisions and have long-term discussions, except in politics and government. I would like to propose that we have an adult discussion, as a country, about where we are going and how we are going to get there.”
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