The Democratic Congressional Agenda
Eleven-term Rep. Martin Frost (D-Tex.) is chairman of the House Democratic Caucus, which is positioning to try to take back the House in the 2000 elections. The parties have been doing battle over how to spend the budget surplus, culminating before Congress's August recess with a fight over a $792 billion Republican tax plan.
How successful will the Democrats be in pushing their agenda during the next session of the 106th Congress? Frost answered your questions about the tax plan and the Democratic congressional agenda live online Tuesday, Aug. 17. The transcript follows:
washingtonpost.com: Good morning, Rep. Frost, and welcome. You were on the road this week with House Minority Leader Richard Gephardt, talking about Medicare. Can you tell us what people were saying?
Rep. Martin Frost: Rep. Gephardt is going to be in Dallas later on this morning, and I will be appearing with him. I made a number of appearances in my district last week, talking about Medicare. My constituents are saying that we should dedicate the bulk of the budget surplus to paying down the national debt and shoring up Medicare, including a prescription drug benefit. They're less interested in a big tax cut than paying down that debt and supporting Medicare.
Clinton, Ill.: There is supposed to be a projected $3 trillion budget surplus in 10 years. The Republicans have elected to have 2/3 of the projected surplus in a Social Security "lock box." My question is what is wrong with giving the American people most of the remaining 1/3 of the projected budget surplus back in the form of tax cuts such as the $792 billion that the Republican-led Congress has proposed?
Rep. Martin Frost: First of all, these are projections over the next 10 years, and we don't know that the full amount of the surplus is going to be there. We should be conservative in how we approach this. Secondly, the people that I represent want the bulk of the $1 trillion surplus that's not part of Social Security to pay down the national debt. Part of that surplus could be used as a tax cut later on, but the bulk of it should be used to pay down the national debt and shoring up Medicare.
San Antonio, Tex.: Why do you continue to support penalizing married couples with a marriage tax?
My father passed away a few years back, and we lost a big piece of what he worked so hard for all his life to give to his family to inheritance tax. Why won't you give us a break on something that has been taxed over and over again?
Why won't you give us OUR money back?
Reduce capital gains and I could make more investments and secure my own future without the government's help!
Rep. Martin Frost: First of all, we have voted to gradually increase the exemption on the inheritance tax in 1997 that's being phased in over a period of years. We also voted in 1997 to reduce the capital gains tax we've already done some of the things that you've asked. And we should further take action this year to eliminate the marriage penalty from the tax code that's something we all agree on. But you don't need a $792 billion tax cut to eliminate the marriage penalty from the tax code. In fact, the substitute plan offered by [Democratic] Rep. Rangel did have a provision dealing with the marriage penalty.
Washington, D.C.: Last week, [Rep.] Rob Portman said he expected budget negotiations to continue between Republicans and the White House after Congress returns from recess. Do you think we could be heading for another government shutdown if talks don't progress?
Rep. Martin Frost: I think that it is certainly possible that there will be a government shutdown, though no one wants that to happen. But I think it could happen. I think we ought to do everything we can to avoid that.
washingtonpost.com: Can you explain some of the specifics of congressional Democrats' ideas on taxes and why the White House is fighting so hard against the $792 billion GOP plan?
Rep. Martin Frost: First, the Rangel plan would reduce taxes by $250 billion rather than $792 billion, and we just feel that's a reasonable amount and the rest of the surplus should be used to pay down the national debt and shore up Medicare. We feel it's a more reasonable approach. The Democratic plan includes a significant provision on the marriage penalty, and it also includes a tax credit for senior citizens, helping them pay for the cost of longterm nursing home care. There's also a provision for the issuance of bonds to help local school districts repair and replace old school buildings. The main thing is that it would only use a portion of the surplus rather than the whole surplus for tax relief.
Silver Spring, Md.: The CBO indicates that the tax cut plan, which is tied to debt reduction will reduce the debt by $200 billion more than the presidents plan. The $792 billion cut is only 5 billion next year and 195 billion in the first five years. Why is this fiscally irresponsible? Also the tax cuts expire in 2009 unlike the presidents new spending which goes on forever. Why is the Democratic plan better?
Rep. Martin Frost: Well, first, we don't know that the surplus is really going to exist for the full 10 years, and the Republicans are spending money that may not actually be there. And the largest part of their tax cuts are in the second half of the package the second five years. We hope the surplus will be there at that time, but they're rolling the dice they're locking us in to tax cuts with a surplus that may not be there. So it's risky.
Also, the Republican plan dramatically tilts the tax cuts toward higher-income taxpayers. Under the analysis that's been prepared by an independent organization Citizens for Tax Justice shows that people with an average income of $18,300 would get $11 a month in tax relief, and people with an average income of $30,000 would get $26 a month in tax relief. People with $49,00 would get $47 a month. People in the top income brackets would get dramatically more. People with $173,000 income would get $373 a month in tax breaks. The top 1 percent of taxpayers in this country would average a tax cut of $45,835 on a yearly basis. And the lowest 20 percent of taxpayers would get $25 a year; people in the next 20 percent would get $136 a year, and people in the next 20 percent would get $311. You can see how tilted this is toward the very top, whether you view it on a monthly basis or a yearly basis. Not only does this tax cut make little sense in terms of the economy and paying down the debt, it also makes very little sense in terms of equity who gets the tax cut.
Washington, D.C.: What does the House Democratic Caucus do in coordination with the DNC for the campaign?
Rep. Martin Frost: The Democratic Congressional Campaign Committee works in connection with the Democratic National Committee. The Democratic Caucus is the organization of all the Democrats in the House, and it works on issues. The DCCC, which I used to chair, works directly on campaigns. Rep. Patrick Kennedy is the current chair of the DCCC.
St. Mary's City, Maryland: What do you see as the prospects for the Democrats regaining control of the House ... especially retaining the seats we took in 1998 like District 12 (Rush Holt) in New Jersey?
Rep. Martin Frost: I think we have a very good chance of taking the House back, for a variety of reasons. First of all, in this election, there will be more Republican open seats than there are Democratic open seats -- seats with no incumbent. That will give us an opportunity to pick up seats in various parts of the country where we may have lost seats in previous years. This is a reversal of the trend in both 1994 and 1996, when you had more Democratic open seats than Republican open seats.
Secondly, the Republican Party in the House is driven by the far right wing, and I think that as a result has taken positions that are out of sync with the vast majority of the American public. We did gain seats in the last two elections -- nine in 1996 and five in 1998, so the momentum is clearly on our side.
Arlington, Va.: I'm very much opposed to this giant tax cut package. But I'm VERY interested in seeing the marriage penalty eliminated. I'm curious, though, why a Democrat-controlled Congress allowed the penalty to stay in place for so many years.
Rep. Martin Frost: The Republicans have controlled the Congress for the last five years and they haven't done anything about it either. It does need to be changed, and Democrats have that change in our package.
Fairfax, Va.: Although I don't 'enjoy' paying taxes, the hours and hours it takes to figure out all of the forms and paperwork to me is even worse than sending in the check. If you have anything out of the ordinary, using the new easy form doesn't work. All of the laws, all of the new provisions every year gosh its enough to make your head swim. For us non-math-economic majors, can you all do something so that the process is not as bad as the payment? It's not that I'm such a big fan of a flat tax, but it would certainly make calculations easier.
Rep. Martin Frost: We need to continue trying to figure out how to make it easier to comply. I've supported some reforms that would change the way capital gains are reported. Personally found the capital gains part of last year's form was very confusing. We clearly need to simplify that portion of the law as well as others.
Mt. Rainier Md.: Alan Greenspan has been warning that a large tax reduction may overheat an already warm economy and kill the goose laying the golden eggs an economy making a lot of us much better off. Is even the Dem's plan too much too soon?
Rep. Martin Frost: I just think our approach is a reasonable approach. I agree with Chairman Greenspan that we should be cautious. We certainly don't want to do anything that's going to cause interest rates to go up. Democrats and President Clinton have worked closely with Chairman Greenspan during the last six years, which is one of the reasons the economy is as strong as it is. I don't think we should ignore his advice.
washingtonpost.com: That was our last question for Rep. Martin Frost. Thanks to Rep. Frost and to everyone who participated. We'll continue the discussion on taxes and the Democratic congressional agenda with Rep. Ben Cardin (D-Md.) on Monday, Aug. 23 at 3 p.m. EDT. Come back and join us.
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