First Goal: Reducing U.S. Debt Gingrich Says Budget Surpluses Also Should Be Used For Tax Cuts
House Speaker Newt Gingrich said Monday that any budget surplus produced this year should be used to reduce the national debt and to pay for the first of a series of annual across-the-board tax cuts.
Gingrich spoke before President Clinton’s declaration Monday that the budget he will send to Congress later this month will be balanced - a situation that has not occurred since 1969.
The speaker said it is important symbolically to return any surplus produced by the strong economy to taxpayers.
Gingrich told a breakfast meeting of the Cobb County Chamber of Commerce in Smyrna, Ga., that the anticipated budget surpluses also should be used to lower the national debt.
And he said his long-range goals for future surpluses are to eliminate the so-called “death penalty” - high inheritance taxes - and to reduce the capital gains tax.
“The surplus’ first goal should be to pay down the debt,” he said, especially on the trust funds for transportation and Social Security.
But he added that it is an important goal to “try to get to at least a small tax cut every year.” Even in the first year a surplus occurs, there should be an across-the-board cut achieved by increasing personal deductions or reducing tax rates, he told reporters after his speech.
“We should take a step in the right direction, even if it’s a small step,” Gingrich said. Such an approach to cutting taxes, he said, is preferable to tax cuts for specific groups as occurred in last year’s budget agreement.
Gingrich also said the drastically changed federal fiscal landscape should be used to gradually reduce all taxes, including local taxes, to no more than a fourth of an individual’s income.
“I would suggest that in peacetime, our goal should be that all three levels - state, local and federal governments - should not take more than 25 percent,” he said, adding that the average now is about 38 percent.
Gingrich also said he agrees with Clinton’s call to have Congress address the issue of changing the Social Security system before the end of the century. He proposed that Congress establish a commission, composed of members who represent three generations, to consider ways to buttress the Social Security system.
Gingrich also showed his penchant for tossing out ideas, declaring, for example, that bilingual education should be phased out and all school-children should be required to read in English by the fourth grade.
“When we allow children to stay trapped in bilingual programs where they do not learn English, we are destroying their economic future,” he said.
He also criticized the earned income tax credit, which goes to the working poor, saying it has a 21 percent error rate that costs the government $5.3 billion a year.
To fight drugs, Gingrich promised legislation this year that would give federal anti-drug officials new powers to seal off borders and go after drug dealers.
He declined to comment on reports that Clinton would propose allowing people ages 62 to 65 to buy their way into the Medicare system, to provide coverage between their early retirement and the time they become eligible.