Contract With America Reduced Welfare, Taxes


by Dan Adams
On Jan. 15, I attended a meeting in Scottsdale where Dennis Hastert, the speaker of the U.S. House of Representatives, spoke as a guest of our Congressman, J.D. Hayworth.

Speaker Hastert's talk was relatively brief, but pretty well covered the salient points since the Republican Party gained control of the House of Representatives in 1994.

He pointed out that they had generally followed the script of the "Contract with America" and that the major results have been:

1. Welfare reform: The house had to pass Welfare legislation three times before President Clinton would sign it, and then he took credit for it. Regardless of who gets the credit, 5.5 million people have gone back to work since the bill was signed.

2. Taxes have been cut since the 1993 tax increase: The present thrust is to remove the marriage penalty, where two married people, who both work, pay more than two single people with the same total income.

3. Balanced budget: Speaker Hastert is realistic enough, and modest enough, to give the American people credit for the current balanced budget. It is not the result of President Clinton's action, nor of Congress. In my opinion, he is absolutely right about that.

According to speaker Hastert, the next major objective of the Republican leadership is to sequester the current Social Security surplus so that it cannot be used for government operating costs.

As things have been working, the Social Security surplus has gone into general funds. Then when the surplus comes to an end, in say 2012, the government would have to issue bonds to pay Social Security to the entitled recipients. The accumulated interest on the bonds means that over time, it will cost $3 to pay $1 in benefits.

By keeping the current surplus out of the general funds, Congress has reduced the national debt $350 billion over the last few years.

On the subject of federal involvement in education, speaker Hastert pointed out that the federal government provides about 7 percent of the total K-12 education budget, but causes about 50 percent of the paper work required of the local schools. The objective of the Republican leadership is to reduce the bureaucratic influence of the federal government on the schools systems, and send whatever funds are to go to the schools directly to them.

Speaker Hastert closed with a story I have heard him tell before, and it chills me each time I hear it.

When President Clinton was first elected he appointed Hillary Clinton and Ira Magaziner to head a task force to develop a National Health Care plan. The Republican leadership in Congress appointed Rep. Hastert to be the representative to the task force. (He wanted) the inclusion of a significant trial of medical savings accounts. Mrs. Clinton told speaker Hastert in no uncertain terms that his proposal was a non-starter.

Rep. Hastert asked "Why?"

Mrs. Clinton said she had two objections.

First, that American parents could not be trusted. That, if they were given or allowed to keep tax-free money for health purposes they would likely not spend it on their children. They would use it to purchase other items and would not have health care money when it was needed.

Second, that to the degree that the parents did use the money wisely, it would be invested in the private sector, and that the private sector would not use the money as wisely as the government would.

To me, this is big-government thinking of the most dangerous kind.

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