By REP. MAC COLLINS
3rd District U.S. Congress

It is surprising to me that the issue of returning taxpayer overpayments has become a partisan issue in Washington, D.C.

This tax bill was designed to strengthen and save Social Security and Medicare, while at the same time providing tax cuts to the Americans who pay a historically high percentage of their paychecks to Uncle Sam. The tax cuts, in turn, were designed to encourage savings, help create jobs, and to assist workers and their families. It does this by addressing important tax and debt issues being lost to the public in the heat of partisan wrangling.

The House Ways and Means Committee, on which I serve, wrote this tax bill guided by the advice of Alan Greenspan, chairman of the Federal Reserve. Mr. Greenspan knows that more than two out of three dollars of the “surplus” are taxes paid for Social Security and Medicare, so he urged Congress to put all of those payments into the two trust funds.

That is what we have done. Some, but not all, of the remaining “surplus” is earmarked, again following Mr. Greenspan's advice, for gradually implemented tax cuts, and lower capital gains taxes. We also restrained spending per his advice. Additionally, the tax cuts were designed with a failsafe to freeze the rate reduction if government revenues decline and threaten the balanced budget.

This package makes sense because it deals with one of the fundamental issues affecting this country — the national debt. The national debt lurks in the background of every discussion on Social Security and Medicare solvency. Do we deal with it by spending, or by saving? It is obvious what President Clinton and the Democratic Party believes should be done: spend. They talk savings, but remember the laundry list of spending plans laid out by the president in the last State of the Union address?

Look at the Democrats' recent plans to add more entitlements to Medicare before the program is fully stabilized, and you'll know where things are headed. Alan Greenspan knows this, and told the House Ways and Means Committee: “My first priority, if I were given such a priority, is to let the surpluses run... my second priority is, if you find as a consequence of those surpluses, they tend to be spent, then I would be more in the camp of cutting taxes, because the least desirable is using those surpluses for expanding outlays.”

He re-iterated it in Wednesday's testimony before senators. The spin that he is slamming the Republican tax cuts is not accurate. Why did Mr. Greenspan take that position? It is because the national debt will put on weight if we do not restrain spending.

A lot of people don't realize that our national debt has two parts. The first part is government debt, which is mainly held in trust funds supported by special payroll or excise taxes. Social Security and Medicare are the best-known trust funds, but there are others, such as the Highway Trust Fund, which were expected to be off-limits.

The other part of the national debt is public debt held by citizens, non-citizens, corporations and foreign governments. If we actually restrain spending under a balanced budget, the money still entering Social Security and Medicare will, strangely enough, increase the government part of the national debt. That is because these funds are required by law to invest in government debt — Treasury Bills. If we hold fast to the balanced budget, the public side of the equation will decline by the same rate that the government, or trust fund side, increases.

If the rate of increase and decrease does not balance, it means we are still spending some of the money that should go into the trust funds. That's not right. The dilemma we face is that Washington's bureaucrats perceive there is “excess” money available, they want to spend it, and there is not enough bipartisan discipline in this town to stop them. That will increase the national debt and endanger Social Security and Medicare even as they cope with the demographic strains of an aging population.

In less than 30 years, there will be only two workers supporting each retiree. What should we do? Some may argue we should keep the money for national debt reduction, but keep it out of the hands of the politicians; that is a vain hope. The two realistic choices are to either spend the money to create new entitlements, or return the money to the people who earned it through tax relief. Since spending the money guarantees a growing national debt, a less secure future for America and increased financial burdens on taxpayers, I opt to trust Americans to invest, save, or spend their money as they see fit.

I hope that President Clinton sees it that way and reconsiders his threat to veto.

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