Bill Bennett: “I recognize fully the level of revenue currently coming into the Federal Treasury is at a distressingly low historic…”

“I recognize fully the level of revenue currently coming into the Federal Treasury is at a distressingly low historic point. But I go back again to a comment that Chairman Greenspan once made to a group of us. He said to us: You can set the level of spending just about wherever you want. You can pass a law and be pretty sure spending will be where the law says it will be. You cannot set the level of income where you want. That is a function of the economy. If we look at the period which we all look back on with such great satisfaction--that is, the years in which we were in surplus--one of the major reasons we were in surplus was that the economy unexpectedly, according to the computers at CBO, produced far more revenue than CBO scored. This came as a result of the balanced budget agreement, the agreement entered into with the Republican Congress and the Democratic President after the 1996 election, an agreement that the Speaker of the House in 1995 tried to enforce with heavyhanded political methods and got himself in trouble in 1995. But after the election, the leadership of the Senate and the House and the leadership in the White House with President Clinton sat down and we got the balanced budget agreement, the balanced budget proposals, and in that process the Congress insisted, the President resisted but finally agreed to cut the capital gains tax rate.”