Episode 466 The Fall of BOB PACKWOOD (Part 1) Who Was Senator Bob Packwood ? (Special Series) Dole 8

Who was Bob Packwood? 

He was one of the leading Senators in Washington DC on tax and fiscal policy. The Chairman of the Senate Finance Committee and often acknowledged as the Senator with the greatest grasp on how the finances of the Federal Government actually worked. In this episode we look back at who Senator Bob Packwood of Oregon was on the eve of his 1992 reelection, which he would win handily, before disaster struck. 

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SPEAKER_08 2:03

Owners of the carriage works in Klamath Halls gave Senator Bob Pennackwood a look at their product today. The horse-drawn carriages here are hand-tooled and similarly like hot cakes. It's a new business to Klamath County. John and Barbara Evans means her own the works. Their market extends nationally and internationally. Penickwood says important unique items like to stimulate foreign trade. He says River Money and should hesitate to support restrictions on foreign imports.

SPEAKER_14 2:29

What you've seen here at the carry board is unique, but if we get into a protectionist battle, we say we're not going to buy anything overseas, and we're not going to sell anything overseas. These people could be out of business. And that's going to hurt members can make them hurt everybody. But we don't want to produce any unique amendment.

SPEAKER_08 2:51

Patrons.

SPEAKER_01 2:58

We've got something they don't have. This is something that they absolutely don't have, and they've got to come to us for it. Um we get everything made in time one, but time one came to us for horses and carriages. And I flew the horses over and the carriages to time one.

SPEAKER_08 3:14

These carriages to thousands of dollars.

SPEAKER_01 3:19

Evans says folks just want to get back to the simple life. Those old values mean something. And I think uh some of these people that have everything, they still don't have it, and they're still searching.

SPEAKER_08 3:31

The Evansizers also export horses. They say above all their business ventures place Klamath Falls on the map and bring revenue to the area. In Klamath Falls, Marty McNamara, Newswatch 12.

SPEAKER_09 3:45

Hi, everybody, this is Randall Wallace, your host for the Randall Wallace Presents Podcast, and this is our first episode in our look back at the fall of Bob Packwood. He was a United States Senator who was chairman of the Finance Committee, who was taken down by a sex scandal in 1995. He uh was one of Bob Dole's right-hand people. And to say that it you can't understate how important this was to Bob Dole's presidential campaign and Bob Dole's control and running of the Senate to lose a lieutenant of this stature. Um and so we're gonna spend a lot of time on this story and and introduce uh you too, Bob Packwood. We're also gonna do it for another reason, and that is uh we're gonna be introducing uh politically speaking, which was my column in the uh college newspaper at Lander University in Greenwood, South Carolina, uh, because this was the first time I was asked to do a guest column. I was already uh doing some reporting work for the newspaper because I had had switched from the history uh department, history and political science degrad, gotten that degree, and went back to get my mass communications uh degree in the brand new Mass Com department. We were the first group that went through uh that degree uh Atlander. And um and so I went over there to learn the newspaper, and it was a joy to do. I I I uh if I had had a career field other than politics to go into that I think I would have enjoyed, journalism would have been it. And uh, and and working for the student newspaper uh for two years, I was a staffer of the year at the end, um was something that I really enjoyed. And my college professor, Robert Stevenson, is still there um at Lander. Um still over that, over the the newspaper. So uh that that's kind of you know interesting. But uh by Packwood, I was asked because I was also the chairman of the College of Republicans to write about this and and defend him, and I did. Uh and I I I mentioned in my book that I thought I was wrong, at least in the uh the seriousness of the accusations uh concerning the women. Um you know that that looks uh appears to me to be a pretty overwhelming case, and I've thought that through the years since. Uh I do think that he was justified in some feelings that he had about the process. I do question also the length of time. Uh most of the uh almost all of the accusations were 25 years old, or um there was one in the last 12 years. Uh and I and as far as I I know, the the accusation concerning a minor uh never held up. Uh the accusations, too, that had to do with other corruption that you will hear them talk about as we uh as we unfold this had to do with him trying to help find his wife, his ex-wife, who's in the middle of getting a divorce, uh, a job. Uh uh they called it jobs for Georgie. And uh there was also about the diary tampering. I don't think those were serious charges. Uh and I never thought it. I agree with, I still believe that my uh op-ed at the time is right about that. Uh he asked people that he had known for many years to help her find a job that would be a fair day's work for fair days pay. Um I saw nothing in this when I was covering it, and I don't, when I look back on it now, that that looked improper, um, other than, you know, I mean, he was asking people that he'd known forever who happened to be lobbyists in D.C. for help. Uh and then the jury, the tampering with his diaries had to do with him taking a copy and changing uh parts of the diary that went to his lawyers when they were still fighting the uh the committee, the ethics committee about turning them over. And they went that this they had this legal case that went all the way to the Supreme Court before it was ruled that he had to turn the diaries over. When he did, he turned the originals, the copies, and the uh the the changed documentation. All of it went to the committee. So, you know, yeah, he changed it what he didn't want to go to his lawyer, but is it fair to uh to charge him in this um expulsion hearing with having tampered with his diaries when by the time you got them, you got them all. And and there was never any attempt not for you to have them all, other than the fact that he fought in court. Um so you're gonna hear all that as we as this unfolds. But this episode uh is going to be just an introduction to Bob Packwood. Um, and like I said, I have the most mixed emotions about him because I liked him a lot. Um I he was an extraordinarily effective senator, an extraordinarily bright one when it came to things like tax policy entitlements. Um he was a much more liberal Republican even than I am. He was the first person to write legislation uh to be pro-choice and pro um, you know, you know, and you know, pushing for abortion back years before Roe v. Wade, um, he we're gonna let you listen to him talk about um school prayer and his position uh that uh was not in favor of organized school prayer. So he was an unusual Republican, much more liberal than than uh than than what we see today. And uh women's groups, he'd been very, very a strong advocate for women, equal equal pay for equal work. He uh he voted against Clarence Thomas. Uh so you know uh he was pro-choice. I mean, uh on all these issues that you consider or thought of as women's issues that maybe more liberal women uh support, Bob Packwood was the Republican who was on their side. So his takedown was really amazing. And I I um, like I said, I struggle with it because I liked him and admired him, not so much all the policy positions he took because I didn't agree with a lot of them, um, but because he was so brilliant. And he could get on the Senate floor and talk about tax policy, and you'd be completely mesmerized listening to him. So we're gonna introduce him to you here. Um you know you've heard his voice throughout our series on Bob Dole. Uh he has an oral history that is the best oral history I have ever heard for as long as I've been doing this show, and as long as I've been listening to oral histories, which is a long time. Uh the one he did for Bob Dole is one of the most interesting, fascinating, and we're gonna let you hear it all. Um oral histories that I have ever heard. And uh and so I say all of that to introduce you to him, introduce you to this show. We're gonna look at Bob Packwood, his life and uh prior to this scandal before we get into uh the scandal that took him down in the 48 hours that I covered as a reporter, uh long distance, but for this college paper. And then we're gonna probably do a little special show about my journalism career too tacked on here, uh, because uh we're gonna introduce you these uh political speaking uh editorials that I wrote and uh and uh and we're gonna uh include them throughout the remainder of uh our of the period of time that it covers, which was from about November of 1995 to May of 1996, which was both the South Carolina primaries for the presidency and in the Senate. Uh and uh and and so I'm proud of them, and and we're gonna start telling them my story in this story. But let's start by going to the Oregon State House. They did an oral history with Bob P with Bob Pack with about 11 minutes, and it'll it'll introduce you to him. And like I said, it's fascinating to hear uh his life story, how he got into politics, his role in Oregon politics, and uh his stature as a United States Senator.

SPEAKER_15 11:44

I was pretty much raised in it. My dad was the House counsel for something called the Columbia Empire Industries, which was a broad-based employer group, and he was also their lobbyist. I mean he was the full-time house lawyer and then their lobbyist from 1927 to 1959. So I was raised with it. And uh my dad would some regularity have dinners at the house, which would be six to eight people, and it would include uh some press person that covers the legislature, and a couple lobbyists, and a couple legislators on occasion, uh the governor, uh quite often the mayor of Portland. And when I got to high school, my dad used to let me sit in on the dinners and listen. Probably uh no later than when I was sixteen, maybe seventeen, that I decided at that stage I would like to get into politics. I worked on Mark Hatfield's first campaign for the legislature. He was then Dean of Inn, and he was running for his first term in the Oregon House. And there was about two weeks to go to the election when I got to 11, so I worked on his campaign for two weeks. And then uh after that worked on his campaign for re-election two years later, and he and I remained uh close friends, and we were fraternity brothers. In those days, probably infinitely more important than now because Salem had no television at that time. There was only three or four radio stations, and of course the newspapers were dominant, but you had no way to get information to the voters the way you can now social media. The only way you're gonna get to them is rap on the door and say, Here would you please vote for Mark Hatfield. If you're talking about roughly 60,000 voters in a primary, about 32 or 3,000, you are lucky if they know your name. Let alone do they know what you stand for. You have principles, but you realize that 90% of the voters are never gonna hear you, they're not gonna come to a coffee, they're never gonna see you. And if some nice, friendly face raps on their door and says, Here, will you please vote for Bob Hackwood? That may be a determining factor in their mind. Usually hosted by women in their homes. And they call as many people as they can to come. And I stand at the door and meet them as they come in and whatnot. And we have two or three of our volunteers to circulate around and uh kind of give a warm feeling to it. I would then speak not long. Uh eight or ten minutes is long enough. And then we'd uh pass out a card, just a little three by five card. Would you be willing to help? Would you have a lawn sign? We picked up a lot of our lawn signs that way. Would you contribute money? We didn't get much that way. Would you have a bumper sticker? Oh, well, I guess so. And if they said that, we had one of the volunteers who would go out and put it on their car then. You don't want to give them the bumper sticker, you want to put it on then. All of these things are just elemental. So simple. You go around and you say, here's this real estate sign, this house for sale by Jones, this house for sale by Smith, this house for sale by Green. You'd be thinking, well, why not this house for packwood? The lawn signs were such a simple idea, although they were plywood signs bolted to a stake. I mean, these things were indestructible. And uh but you made them all by hand, they were silk screened. You made it one sign at a time, one sign at a time, one sign at a time. All our sign said was halfwood for a representative, and a f and a sign that is two feet by three feet, and with a big orange border painted around it. You couldn't miss it. In those days, the legislators had no offices. They did their work on the by at the desk. The secretary sat at the desk, and until a half an hour before you went into session, the doors were open. Anybody could come in, the lobbies would come in and talk to you. What did I learn about the legislative process? I probably was more experienced at it than other new candidates simply because I was raised in it. And I understood the formal process was you introduce a bill and it goes to committee, and if the committee votes to send it to the floor, it comes up to the floor and there's a vote, and that's how laws are made. That is not how laws are made. There are backroom deals, there are favors you'll do for some member because you like him, and another member you don't like, you won't do a favor for him. And it has really nothing to do with the merits, but again, I think it's the same thing with the PTAs. That kind of relationship. There was a strong camaraderie in those days because one, we were all on the floor, and the Republicans didn't sit on one side and the Democrats on the other. Everybody was mixed around. It's something I'd I'd grown up with. The discipline of preparing a speech, or the discipline of trying to convince people orally, it again it's simple. You go through your speech and you go through it and you go through it and you go through it and you go through it and say, What can I cut? What can I cut? What can I cut? And you finally know it so well that you can give away just a little note card so that you can concentrate on the audience and not on the speech. And most people when they get ready to make a comment on the they're reading it for the first time. After my election in 1962, the Oregonian wrote a length about what a stunning campaign it was. The major donors in the Republican Party retained me uh to go around the state and see if I can find candidates and train them to campaign in the same way that I had campaigned. So none of them that I picked had any experience in really in politics. But they were they were sensational candidates. But you know, again, I uh I hate to use the word teach because what I was teaching was so simple. I just hadn't thought about it before, but once I explained it, they make sense to me. And so then my first go-round we did very well, six out of the seven won, and we took control of the house. Every party wants to control the legislature. Every party is convinced that their views are better than the opposition's views. But this true life. Do you have a strong feeling about something and somebody has a different feeling? You're convinced that yours is better than theirs. So that's why you want to want to control it. Powell Apling had been Mark Hatfield's Multnomah County Republican chairman when Mark was elected governor in 1958. Mark was so impressed with him, unjustifiably impressed. He was a whale of a guy, that Mark appointed him Secretary of State. Mark had been Secretary of State. He's now governor and vacant, so he appoints Apling. And so when I started recruiting candidates, the donors realized that most people didn't know who I was outside of maybe my legislative district. And we needed somebody who had a great name that could be a figurehead in this. And uh, so I approached Hal. I suggested Hal. I approached him. He liked the idea, he said, you know, I remember what he said. He's referring to Ernie's swagger. He said, Let me sure I make sure I understand this. We've got Ernie's money, your brains, and my prestige. If I got it right in the City, I said that's a pretty good trying word. There would be a difference in the kind of candidate I'd be looking for in Ontario as opposed to Eugene. Rural areas are more conservative. And if I can find a candidate that more or less matches the philosophy of the area, that would be my my favorite. So I might I might find a conservative in Ontario that fits, and I might find a liberal in Eugene that fits both Republicans. But more important to me than that was are they going to be a good candidate? I don't want somebody that's perfectly in touch with the local people and can't campaign worth of at Tinker's Dam. So I would try to fit the candidate. One of the ones I thought was the most fit was a guy named Paul Hanneman from Pacific City, Achillamo County. And he was a Dory fisherman. And I thought, what better fits this area than a Dory fisherman from Pacific City? He was a great candidate, never run for anything in his life. Where did the idea come from to hold what is now called the Dorchester Conference? First, it's simple to find the name. We we're looking for some place to have it, and somebody says, What about the Dorchester House? Well, that is where the name comes from. The legislators, I think, were a little hesitant to come, they weren't sure what exactly. But deep down they thought they owed me one. I mean, they were in the majority because of me. If he wants to try this crazy thing, we ought to at least give it a shot. And of course they came. They loved the weekend, and the press absolutely thought it was the most important Republican meeting in the decade. After that, it was easy. Well, the second one uh Dorchester wasn't gonna be big enough, so we moved down to the Oregon uh up to Gearhart, the old Gearhart Hotel. And I thought, well, we didn't have any votes last year, we'll have committees this year. We'll have an agriculture committee, and we'll have a foreign affairs committee, and we'll have what not? We had about eleven committees. And all but one of the committees, I got legislators to chair, they really were uh into this, taking a strong part of it, which is a lot of the reason it was successful. If if your state leaders were taking positions and helping that that made everybody else feel good, the mistake I made is not 1965 in the Vietnam Wars, even if that's being not very popular, and 80% of the people that came on to be on the Foreign Relations Committee wanted to talk about Vietnam. What are we going to do? And I might have three people on the agriculture committee. So that format did work. Why should they be involved? Because the political process is going to determine how they're governed, it's going to determine how much money the state may put into education as opposed to highways, or vice versa. This affects them. And this is why they ought to be voting rather than the attitude, oh, plague on all of you. You're all corrupt. It doesn't matter if we elect Republicans or they're not going to vote. Doesn't make any difference. It does make a difference.

SPEAKER_09 22:15

That's a little bit of the background of Bob Packwood, how he got started, got into politics, his role in Oregon, um and and and you know, the United States. Senate. Uh you know, he's a brilliant, brilliant man, and that's what you come away with when you listen to him talk. He had an amazing grasp of the issues. Going back to his first term, he was elected in his early thirties, uh in the night in 1968, uh, and I thought I would treat you uh a lecture, uh part of a lecture that he gave at ISU at at Iowa State University. He's talking about the 1973 election, he'll talk about Vietnam uh and and you know potential candidates for president and and uh uh uh you know what the situation is going on there. Uh and I think you will really come away from this uh with an interesting uh a grasp of just you know how knowledgeable uh Bob Packwood was across the board on different issues. And then we're gonna flip over to the Phil Donahue show where you're gonna get to see him in action in a debate with uh Senator Don Nichols of Oklahoma, and this is gonna be about prayer and schools. And uh and like I said, you'll come away from that. You might not agree with him, I didn't agree with him on the prayer school stuff, but uh you will admire his intellect.

SPEAKER_14 23:34

Comment on my position on the Vietnamese war. I voted for the Mansfield Amendment, I'll vote for it again. Want us out. I don't think I was smart enough to have realized uh ten years ago that we shouldn't have been there. I it's easy now to look back on retrospect and see how say how stupid we were. And uh I would have liked to think I would have had that wisdom, but I probably wouldn't. I I just hope that we have learned a lesson by the Vietnam War. That's that's about all I can say. Yeah. Then I'll take you. Do I think the Mansfield Amendment will pass the Senate? Mike's gonna offer it again to the military procurement deal, the same one he offered to the draft. Yeah, I think it'll pass the Senate. I think it'll go to the House and the House will get rid of it or water it down and it will come back in a conference report in a watered-down fashion. And then a conference report, you know, something passes the Senate in one fashion and it passes the house in the other, until you have conferees from uh the House and the Senate get together and try to harmonize the differences. But under the rules of both the House and the Senate, here's where the here's where the real problem comes. When the conference report comes back to be voted on, you can't amend it. You vote for it or against it. And so if the conferees water down or take out the Mansfield Amendment, you don't have a chance to put it back in on the floor. So you're stuck. Yes. What is Senator Hughes' uh future on the national political scene? Hard to tell. He is he is he honestly uh I served on the banking committee with him in our first year, and I serve on the Labor and Public Welfare Committee with him with him now, and he's one of the most unusual men I've ever met in politics. And I don't mean that derogatory, it's just uh uh unusual. He's uh he's a powerful, uh physically powerful, uh oratorically powerful man. Great uh convincing speaker. But I don't uh I don't know. I don't know what his future is. He's uh he's totally different from anybody I've ever seen in politics. And he might have the capacity uh that I talked about earlier. He might have the capacity I talked about earlier to be the the person that uh could inspire this nation. I can't tell. He's got that evangelical quality that uh most of us would like to have and lack. Yeah. Do I equate population with the environmental question? Has the president done enough, or is it or is in essence environment uh last year's issue like civil rights was in the early 60s or something like that? Well, I'm not I'm not rational about environment uh any more than I am about population. I do equate the two. And I don't equate it in the sense that we can't uh, you know, feed uh uh 300 million or four hundred million. I Iowa could feed half a billion people, I think, from uh the best I can tell by flying over it. It isn't a question of feeding and housing. I suppose we can do it. But uh from a standpoint of the few wildernesses we have left that we ought to protect and expand and we're overusing now, and from any kind of a keeping of a quality of life in this country that most of us might have been raised with and would like to pass on, we're not going to do it unless we limit population. As far as the president he has done, in my mind, more in the environment well, he's done certainly more for the environmental field than any other president's done before. That's not a fair statement because we didn't start from a very high base before. It hasn't been a concern in this country for more than five years. But I would put environment along with world peace and population on such a high scale on my priorities that in the allocation of federal budgets, even if I had to cut in a variety of other places, uh environment, the acquisition of parklands, uh the attempting to save green belts around cities before they're all concreted in, all of these would occupy such a high priority in my mind uh that I I cannot and honesty say the president has done everything that I would do or that I would like to do if I were in that situation. Let me go over here. What are the possibilities for the Republican Party becoming a majority party in the next two decades? Oh, I think about the same hundred to one odds that the president won't run. Are cutbacks and military expenditures likely? No. They're not. We've wrung out most of the money that we're going to wring out of the defense budget. If you take the three principal items of the defense budget, which is overseas uh for military aid, military construction, and the defense budget, in the last year of President Johnson it was uh $80 billion. This last year it was $76. About $76.5 billion. So it's actually down three and a half billion despite the inflation uh in the between the three year periods. And what we have done, first we've the way we've been able to do it is one cutting manpower. We have cut uh from 3.6 to 2.9 million people in the military. And so we've saved money there. We have put off much research and development, we have put off procurement of even basic weapons. We have we have stretched ourselves thin not only not only domestically in this country because of the Vietnam War, we have stretched ourselves thin militarily, trying to fight the Vietnam War and ha and giving up on any rational pursuit of a balanced military preparedness or procurement of of rational weapons. So we're stretched thin in that direction. Then if we're gonna move to the all-volunteer army, we are faced with even higher manpower costs in the military. And there's no we're not gonna have an all-volunteer army without, I think, a substantial increase in in military uh pay. So I think the military budget's probably as low last year as it's likely to get. Yes, and then I'll go over here. What do I think about the high cost of campaigns and running for office? One of the worst afflictions that this nation suffers. Uh it's bad enough running for Congress or the Senate, but we've reached the place now that there's no point in even thinking about running for the presidency unless you were either independently wealthy, or you have I mean, really substantially independently wealthy, or you have access to friends who are independently wealthy and are willing to finance your campaigns because in the primaries you've got no access to party funds. And it's gonna get ol it's just gonna get worse with more and more primaries. At least when you had four or five primaries and the rest of the states were convention states, the primaries might have been expensive, but the convention states were reasonable. Now with twenty-five or thirty primaries, and uh any candidate feeling he's gonna have to enter eight or nine or ten of them at a minimum, uh most of the candidates are just gonna be priced right out of the business. Uh and all of them are feeling this pinch now. Uh Birch Bay, uh uh Ed Muskie, they've had to cut their funds, even Scoop Jackson, with all of his connections with the with the military-industrial complex and wanting to run for the presidency, is feeling the pinch. Um I would I'm not satisfied. I voted for it. I'm not satisfied with the campaign limitation bill that Congress that the Senate passed this year, because I don't think it goes one-tenth far enough. But I'm not sure I know how to draw a bill that is constitutional that would work. And when I say this is constitutional, I'm not sure that the Supreme Court would say to a political candidate, realizing how uh how carefully the Supreme Court cherishes uh the right of political expression. I'm not sure they would say to you you can't spend fifty dollars on a radio advertisement, or you can't spend five hundred dollars on a fifteen-second television verb, or you can't spend five hundred thousand dollars on billboards. I don't think they're gonna set I don't think they're going to allow Congress to set a limitation that interferes with the right of free speech. Now, there is a way around this. If Congress has the courage Congress is the judge of the fitness of its own members. And if Congress among themselves were to determine among themselves that they would not seat anybody who in the process of his campaigning advertised or used direct mail, we could substantially reduce campaigning costs. But this is really calling upon Congress to look at each other squarely in the eye and say, look, fellas, for the good of all of us and for the good of everybody in this country, we've got to start enforcing this kind of a system on ourselves. And I don't think Congress is gonna do it. Yes. What do I think Congress will do about the Alaska Pipeline and what do I think about highway trust funds? I don't think Congress will do anything about the Alaska Pipeline. Uh I d I don't have enough personal knowledge about it really giving intelligent opinion. Uh but I don't think Congress will do anything. I think eventually the Department of the Interior will probably license it, although it may run through Canada uh rather than through Alaska totally. As far as highway trust funds, don't like them. I don't like trust funds generally, and I don't like highway trust funds doubly generally. And I just wish once I could have been back in the Oregon legislature this last session when they took the highway lobby by surprise, and uh they got a they got a million eight hundred thousand dollars out of the highway trust fund for the building of bicycle paths. And I thought that was a great stroke. And uh and uh I would have loved to have seen these hundreds of uh the bicycle lobby, as they call them, riding down to the Capitol building because it really took the highway lobby by surprise. You tell me when we've got to go. I'll stay here all night. I don't have to leave till 7 30. Go ahead. Well, all right, right. Let me go way in back first and then I'll come up here. Go ahead. I don't know. I'll go as far back as we start and work up. Who's way back there? Go ahead. I think it's getting time to quit. Listen, we're gonna continue on wherever we're going. All right. Thank you very much.

SPEAKER_06 34:59

I think kids ought to be able to pray in school. I'm tired of all this argument. What's what's the problem? So it's a public school. You say a few prayers, and uh the kids doesn't want to pray, just stands there. What's the demise? This is not against which is far too liberal. You're against prayers public school? I support permanence public school. Guess who we've got for you? Meet two men who have been at the center of this thing, having uh the privilege to reside or preside or sit in the most exclusive club in the world. That's what they call it. It's probably true, too. It's called the United States Senate. I'm pleased to present a proud Republican from the state of Oregon who opposes school prayer. Senator Bob Peckwood here with his colleague from the Senate, the gentleman from Oklahoma, youngest man ever to be elected to the United States Senate. At the age of 31, he was uh entitled to enter that august body. He's Senator Don Nichols, Mr. Nichols of Oklahoma, Mr. Peckwood of Oregon. You're welcome, Mr. Calwood.

SPEAKER_13 36:17

Okay. Who wants to go first? Give him your briefest speech, Senator. You can pray in schools now. You what? You can pray in schools now.

SPEAKER_14 36:25

There is no law, there's no prohibition on anybody, not my son or daughter, not your kids, not Don's, from praying in school today. And I don't think the cut the court, the Supreme Court could stop you from praying. So we don't need any amendment.

SPEAKER_06 36:42

Phil, I don't want to insult the intelligence of this audience. But just in case you just woke up from a nap. He uh the senator means if you've got a tough math test, you close your eyes and you say, Please God help me with this thing.

SPEAKER_13 36:55

He or you or you go to a cafeteria and you say grace before a meal. I mean, uh you'll see students doing that now.

SPEAKER_02 37:01

Yeah. Senator Nichols. Well, I I would say that you right now the the law is is what the Supreme Court has said is that you cannot pray out loud. And that's really very clear. The Supreme Court has said no. If you say, and you mentioned the cafeteria, the Supreme Court took that specific issue and said that, you know, if if the kindergarteners want to say, uh, dear God, thank you for this food, if they say that out loud, then that is unconstitutional. No, no, no. I think that's that's unreasonable. But that's exactly what they said.

SPEAKER_13 37:33

What the court said is that the teacher can't lead all of you in saying grace. But if you want to say grace, you can. As long as you say silent. No, no. No, no. What you cannot do is disturb the educational activities. You can't be going about the classroom speaking in tongues and and and just and disturbing the class.

SPEAKER_06 37:53

But Phil, I'll give you an example. I know what the I bet you I know the example you're gonna give. What's what's to prevent me from sitting in the classroom in the cafeteria and saying Bless is so learning these things, and then she said, There's the about to receive, and then she says, pretty soon the whole cafeteria would say, Amen. Uh that would be a violation, I think, is your point of the uh ruling that the United States Supreme Court has to do.

SPEAKER_02 38:14

The Supreme Court basically said this on on the grace before meals. Some of the children would say, Thank you, God. Um God is great, God is good, thank you for this food. They said you can't say that. Unbelievable.

SPEAKER_06 38:27

You really think that's awful, huh? That's exactly what they did say. Senator, uh, and we have in God we trust in our money, and what's going on here? It looks like an inconsistency. Uh, you know, you do paint a picture of a rather absurd decision. But Senator, doesn't your position fail to appreciate the reason for all this effort? I mean, I don't think Senator Peckwood has not served how many terms are you? What are you in your third term? Third term. So he's coming up 16, uh, he's gonna serve 18 years at the very least. So he didn't get this job because the people of Oregon are some sort of wacko people who who uh send who send rare uh radicals to Congress. He and others who uh support the decision feel that the preservation of the separation ensures the freedom of religion. It makes sure that no rabbi, no minister, no priest, no ayatollah is going to tell your kid what to vote.

SPEAKER_11 39:22

That's the whole point.

SPEAKER_02 39:26

Well, the amendment, the amendment, Phil, that we were trying to pass, and my belief is that we don't really need an amendment if the courts would just interpret the Constitution correctly. Because the Constitution says that Congress shall pass no law providing for the establishment of religion or prohibiting the free exercise thereof.

SPEAKER_06 39:42

I got it for you, Senator. I won't interrupt you, but let's show it to him, Ronnie. Here's the first amendment about which you speak, uh, Senator. Uh there it is. All right. Now you wanted to make what points, Senator.

SPEAKER_02 39:51

Well, basically, what the court, if you look, the monitor says make no law respecting the establishment of religion or prohibiting the free exercise thereof. And the net effect of the court rulings throughout the 60s has been to prohibit the free exercise of religion. They say you can't say prayer out loud in school. They say that you can't say the ten commandments. Can't post the ten commandments. You can't have a voluntary meeting before school. They are prohibiting the free exercise of religion. And if they would interpret the whole amendment as it's written, we wouldn't need a constitutional amendment.

SPEAKER_14 40:22

I'm still going to quarrel with you about your saying grace out loud. The court, the United States Supreme Court, has not passed on your saying grace individually, you yourself, over your meal in the cafeteria at noon.

SPEAKER_13 40:33

What they have said is that the teacher can't say, here's the grace we're all going to say now. Children, bow your heads and repeat after me and say a particular grace. So how do you feel about a moment of silence?

SPEAKER_06 40:43

About which, incidentally, the Supreme Court has agreed to rule. Well And you have a moment of silence where the teacher at the beginning of every day stands or whenever and says, Let's be silent for a moment. Some of you may wish to pray, some of you may wish to say nothing, to do nothing, some of you say. Is that a violation of the First Amendment? You don't want to have a moment of silence. Because you're what? Who's hurt by a moment of silence? You know what worries me? You know what worries me during that moment of silence? You know, some of these evangelicals are. I mean, have you met some of these people? I mean, oh Jesus, you are our savior. They'll get it in. They're gonna get it in. Because they talk to God every day. I don't wish to make fun, and it would be very wrong to make fun of the very profound closeness that many Protestant evangelicals as well as Catholic evangelicals feel about their relationship with God is a most profound experience. But once if you have enough people who are talking daily to God, they are going to give themselves permission to impose their sense of the word with a capital W on their kids.

SPEAKER_02 42:07

What we have right now is that the courts are basically saying, Well, you cannot, you cannot, we are prohibiting vocal prayer in school. So they are establishing basically a secularistic or a type of, well, we're just gonna keep God, we're not gonna mention God, at least in a reverent way. I think you'll hear God's name mentioned a lot in school, but maybe sometimes in vain and not so much. It's true.

SPEAKER_06 42:29

Right after a math test.

SPEAKER_02 42:31

When the grades come out. That's true. But see, the the courts, in an effort to, quote, maybe uh make sure that we're not establishing a religion, have done, they are prohibiting, in other words, they are prohibiting the exercise of religion. You can't say vocal prayer out loud in school, or we're not gonna allow you to post the Ten Commandments. They are prohibiting the teacher leading it.

SPEAKER_14 42:56

And I can give you a classic example in Oregon. I think many of the people watching this show have seen the national networks carry a show about the Rosh Nish, which is uh an Indian cult that has taken over the town of Antelope, Oregon. They have elected all of their members to the school board, they conduct the school, they're hiring their teachers, and everybody in the town that was there before the Rashnish come have taken their children out of the school and they're sending them to a neighboring school district because they don't like the religious indoctrination of the Rosh Nish. Is that what you want in your public schools?

SPEAKER_13 43:26

Whatever sect happens to be in control, whatever cult happens to be in control gets to have its prayer. Yeah.

SPEAKER_02 43:31

Well, the the real thing, though, we don't want to have the federal government coming in and saying, well, just to make sure this doesn't happen, we're gonna prohibit prayer anywhere in public school. Vocal prayer, you can't do it because something like that may happen.

SPEAKER_06 43:44

The decision, the decision by the court is an attempt to ensure that the federal government will never do that.

SPEAKER_02 43:50

So the no, the the what the decision of the court, they are prohibiting any exercise of vocal prayer, period. So it's in other words, we have in the same First Amendment, and you showed the whole First Amendment, and it also protects freedom of the press and freedom of speech. There's violations. There may be some other violations, as Bob mentioned in a particular area, but we don't go out to ensure that a violation of freedom of press, because some press slanders you or me or Bob or something, we don't just go out and say, Well, no more will we allow uh pretty press. And that's basically what they've done. We said we will not allow uh vocal prayer in school, they've thrown it out. Nationwide. We don't need a national prohibition against criminal.

SPEAKER_13 44:28

But the way the way we are safest in this country. Thomas will give you chats just a moment.

SPEAKER_14 44:33

Our liberties are better protected in this country with several hundred religions and several thousand voices, all talking as they want, and all privately praying as they want.

SPEAKER_13 44:41

But the danger comes when you try to have some compelled conformity to one view, and it happens to be the majority view that you have in that.

SPEAKER_06 44:52

Let's just get this straight now. As we tape, here's the chronology. As you know, the Senate failed to pass an attempt to establish a constitutional amendment that would have allowed the cer the selection by some Democrats.

SPEAKER_02 45:08

It would have allowed voluntary vocal prayer. It wouldn't mandate it, it would allow it. But somebody would have to select the prayer that was going to be said. That's not correct. Somebody has to select it. Well, we in the federal level would not be getting involved. Fine.

SPEAKER_06 45:20

I mean I believe you. But who somebody's got to. So um but here's the point. Here, here's the point. First of all, I don't know where you this group came from, but uh believe me, it's the last time you're getting interested. You do not, I am impressed with the number of people who oppose uh prayer in public school because the the the all the polls show that this is popular. And if you don't believe that, check the check, this does not mean it's right, it is, but it is nevertheless popular. Fifty-six members of the United States Senate voted in favor of the um proposal to, however, you want to state this, read aloud some kind of prayer that would presumably be selected by either the teacher or the student or something. Voted for it. It did not pass because uh the constitutional amendments two-thirds of the body to pass. All right, now that's over. Now the Supreme Court has agreed to hear a case which uh in Alabama, in which an appellate court struck down a moment of silence in a public school. Now the Supreme Court, which just a couple of weeks ago approved the nativity scene in Pawtucket, Rhode Island. Your Supreme Court is going Christian, friend. It really looks that way. Speaking of that, where have the Jews been on this issue? I mean, if I were Jewish, I'd be out there with a sign because they're gonna have my kid in a nativity scene praying to the Savior. And and the Jews have been, with some exceptions, including a very interesting article written up for the New York Times Output page last week, they've been rather silent about that.

SPEAKER_14 46:58

Are they afraid to be appearing to be against the they're not they're not silent, at least on the school of prayer issue. They're they're very strongly opposed to most of the organizations that are predominantly Jewish have testified against it, spoken against, but it is not just Jewish. The Methodists, the Presbyterians, the Episcopalian churches, all against it, the Church of the Brethren against it, the Unitarians against it.

SPEAKER_13 47:19

This is not a Christian Jewish debate or a Christian versus non-Christian debate.

SPEAKER_06 47:25

But when you start allowing prayer and you start permitting nativity scenes in public malls, the number, the largest number, the largest group victimized, I think, by this, this is my opinion, would be the Jews. All non-Christians, I think, are subject to the to being exploited by this kind of popular reasoning that we have now. But Jews, especially because they there's there's such a good many of them here, and they have every right to have their culture expressed as freely in public as the Christians do. So let's get out the Hanukkah candles. I sure would be.

SPEAKER_02 47:58

Well, let's let's for again, we basically were trying to just keep the federal government totally neutral. We're trying to say you have the opportunity to pray or to not pray. And now, if you're gonna ask the question about, you know, whether the the Jewish religion or the Jewish people would be offended by this and so on, if if you want to talk about establishment, people say, wait a minute, if we allow voluntary vocal prayer in school, that's establishment religion, that's not true. Maybe if you have a Jewish group, they want to have a Jewish prayer. And a lot of prayers may be very appealing to both the Judeo-Christian ethic that we have in this country. Or you could have, you know, if you're gonna carry that analogy further, maybe we shouldn't have a federal holiday of Christmas. How far do you think that will go?

SPEAKER_14 48:42

You know, I I'm intrigued though when when Don when he talks. Uh he talks as if all Christian prayers are identical. Anybody who's ever looked at the Book of Common Prayer in the Anglican Church and compared it with other doctrines or other Christian churches, even within the Protestant sects, you you don't have a uniform Christian creed in in the in the sense of when it's good. Well, you bet it's good. But that's why I don't want to pick out a particular one or a particular teacher, and that teacher, be it a man or a woman, says, here is what we are going to say for the year. We're gonna read from the we're gonna read from the book I approve, or the creed I approve. And for those of you who don't like it, you little children, second and third graders, you can go out in the hallway or in the cloakroom or or something like that while we do this. How many kids are gonna do that? Yeah.

SPEAKER_02 49:27

Well, Phil, how how far are we willing to go? You know, when we sing God bless America, that's really a prayer. And are we gonna say that we can't sing God Bless America? You're gonna take Can God We Trust off our money? Can't afford it.

SPEAKER_09 50:00

Um, you know, whether he's debating or talking, um, and you just you just come away with it, I think, whether you like his positions or not, um, admiring that he's one of the smartest men, and that's what you'll hear people talk about his role as a finance chairman on the finance committee, that he was one of the few senators who knew the budget and entitlement programs and uh all of that across the board, backwards, forwards, and and that he was the most uh influential and impressive member of that committee. And the only person that really could hang with him was Bob Dole and um and I would say Patrick Moynihan. And he has a major role in that position on the Finance Committee in 1986 when the Tax Reform Act of 1986 came out. This is one of the biggest uh uh tax reform um uh moments uh that happened uh in his time there and it was a major um effort uh uh to to bring revenue in because they were running big b big deficits at the time um during the part of the last part of the uh of the eighties of the Reagan era. And uh um you'll hear Bob Packwood on a show for Price Waterhouse here. We've got a segment of this um where Senator Packwood and Congressman Don Dan Rastinkowski. Now he is another big player that you've heard talk about here because he was the chairman of Ways and Means in the House and was um a powerful figure who eventually got in trouble and got indicted um himself in the 1990s. Uh and so uh but this is kind of an impressive back and forth between uh uh Bob Packwood, Don Dan Raskinkowski, the folks from Price Waterhouse asking them questions about how this tax uh uh reform in 1986, the law that had passed at this point, how it was going to affect business uh across the country. And uh it is in-depth and it is fascinating. And like I said, he was one of these people who could get on the Senate floor and make this kind of conversation fascinating. And Don Ras Dan Raskinkowski uh he's no slouch here either. This is a really interesting discussion. Uh huh. And I hope that it gives you, and our whole show this time has given you uh um a sense of what an important figure Bob Packwood was and is, because he's still living, and how intelligent he is. Uh, and what a loss to Bob Dole this is gonna be as we go through the part where this story unfolds. But here is Bob Packwood and Don and Dan Rastinkowski with Price Waterhouse answering questions about the 1986 tax reform efforts.

SPEAKER_14 52:52

Why do you put so much effort in the tax reform? Because the president's just still favored the written and the privilege and then fair besides that tax reform is good for you. Because we're gonna tax the corporation tax.

SPEAKER_04 53:50

We are very pleased to have with us today to begin our presentation the chairman of the two congressional tax writing committees that produced the Tax Reform Act of 1986. They will be answering questions about the bill and any changes that they might anticipate to the federal tax law in the near future. Representative Dan Rostinkowski, Chairman of the Ways and Means Committee, is a Democrat from Chicago who was first elected to Congress in 1959. He served as Chief Deputy Whip from 1977 until 1981 when he became chairman of the House Tax Writing Panel. Senator Bob Packwood chairs the Senate Finance Committee. He's a Republican from Oregon and was first elected to the Senate in 1969. He became chairman of the Finance Committee in 1985 after having served four years as chairman of the Senate Commerce Committee. Both of these chairmen have expertly guided their committees, often in the face of much adversity. Each has literally snatched this bill out of the jaws of defeat on more than one occasion, and they finally produced the most extensive rewrite of our tax laws in more than 30 years. Our first question will go to Chairman Rostinkowski. Good morning, Mr. Chairman. Good morning. Thank you very much for being with us this morning. It's nice to join you. I know that our uh teleconference audience would be uh very much interested in your assessment of the timetable for house action on this bill.

SPEAKER_05 55:22

Well, uh what we'd like to do is file a report, and the only reason that it hasn't been done yet is because of the technical language. I think what uh what we're interested in is getting language in place so that we aren't going to have that large technical correction bill next year. But I'd like to see uh a report filed uh no later than Thursday of this week and possibly take the bill up on the floor of the House of Representatives uh on Tuesday or Wednesday of next week. Uh we uh had anticipated doing it this week, but uh it's the technical language I think that's uh that's holding us up and it's justifiable. I I I really would like to see uh the legislative uh uh documentarians put the put language in the bill so that we aren't going to see uh a revisitation.

SPEAKER_04 56:09

Senator Packwood, welcome to you, to our company. Thank you. Nice to have you with us. Uh let me uh say that we've heard an awful lot of conversation that there is some opposition uh to the bill in your chamber, especially from some of your Republican colleagues. I think our teleconference guests would like very much to know whether you anticipate that will affect the timing of Senate action.

SPEAKER_14 56:29

Only in the sense that it may take us two or three days instead of one day on the floor. There will not be a filibuster, but there may be uh eight or ten senators that want to speak for any place from one to three hours apiece. And at the end of it, we'll vote. We'll take it up two or three days after the House finishes with it, and I would imagine after two or three days of debate, we'll pass it.

SPEAKER_04 56:49

All right. It sounds from what you're both saying, then, that the legislative uh aspects of the bill should conclude perhaps by the end of September. And as I understand it, it takes another ten days or two weeks to roll this bill up to the White House to the President's desk. And therefore, uh would it be fair to say that our uh guests could anticipate that the uh bill would be signed sometime in the middle of October. That gets a fair guess.

SPEAKER_05 57:12

I'd like to see it done a little earlier, that for other reasons. But I'd be satisfied with uh with October, uh the middle of October.

SPEAKER_14 57:19

I think what the chairman is saying is he and I both might like to go to a signing ceremony in the White House, but we can't if we're back home campaigning.

SPEAKER_04 57:26

Chairman Rostinkowski, I've already alluded to the fact that the legislative process has uh, shall we say, been a rocky one. Could you uh share with our audience uh some of the highlights and uh perhaps lowlights of this process uh in the House?

SPEAKER_05 57:40

Well, Dominic, uh, I don't know of any legislation that has had more wakes uh than than this particular bill. I might uh hasten to add, however, that it never had a funeral. Uh there were times in the committee in the markup that uh that I think that I was in a valley. Uh a banking provision that set us back that was even more generous than present law, that after about two weeks uh uh two ten days of consideration and press pressure, uh we changed that. I think um losing the rule on the floor was uh was a very low point. But uh the confidence that that I feel uh in the legislative process uh developed, uh the fact that uh members responded positively, uh the fact that the president uh showed up activated. Uh I think uh that's the reason uh that I'm most proud of what we've done because we've we saw a problem out there and people were becoming frustrated with their government. We've responded. Um the uh the highlight naturally was when we passed the bill in the House. Uh the low point naturally was when we lost the rule originally. Surely. But uh I I think that uh in the long run, uh when we're down at the White House, I hope uh sometime in October uh that uh that we'll have restored confidence in the legislative product uh by the people of the United States. That that I feel is what I'm more concerned with than anything else.

SPEAKER_04 59:23

Senator Packwood, how about the high high points and uh low points on the Senate side?

SPEAKER_14 59:27

I didn't have to go through quite uh the low points that the chairman did on the House side, because once they had passed a bill, and of course, and until they passed a bill, we couldn't pass one. Once the House had passed one, I was confident we would have a bill of some kind. Because every time a president has asked for a tax reform bill, he has got a tax reform bill. It may not be what he thought, but he's gotten a bill. So had we not passed the bill we passed, we probably would have passed a pretty good corporate and individual minimum tax bill. We would have had some reforms in it, we would have gone to conference with the House and reached a bill. So I I never had to be faced with a situation of would we have no bill? I suppose the the riskiest point came when we were not doing very well on the bill we were working on. And I went to lunch with my chief counsel, and we just we just sort of rolled the dice and said, let's go for broke. Let's see if we can draft a bill that is simply an extraordinary leapfrog of everything else we've been talking about. Put that bill before the committee on a Thursday, and 12 days later it passes. When you consider all of the labor and pain that has gone into this bill and the days and months of hearings, uh to in 12 days go from a radical bill to a 20 to nothing vote in the finance committee was was obviously a high point. Certainly.

SPEAKER_12 1:00:44

Bobby? Um Chairman Rostinkowski and Chairman Packwood, uh welcome. It's certainly a distinct pleasure to be here with you on this panel today. Uh, my congratulations are to both of you for the magnificent job you did in guiding your respective panels on the major successes you had in your tax writing committees. Also, the major accomplishment that you had in the tax conference, bringing that bill that forth that you have so far. I must say that Mark and I both have a little regrets about not being with you and sharing that opportunity. But I must say, at the same time, both of us have something else telling us that through the hectic pace that you have had, um, being on the sidelines wasn't all too bad through various of those moments. Um Chairman Rostinkowski, would you tell us uh which provisions in the tax reform package you're particularly proud of? Are there any areas in current law where you had hoped for change or were unable to sway other members of the administration?

SPEAKER_05 1:01:38

Well, Bobby, uh, let me just allude first to the fact that you weren't among us. Uh I learned a lot about the Capitol at four or five o'clock in the morning as I was walking around the Capitol with Bob Packwood discussing the bill. But what I'm the proudest of, uh I think taking six six and a half million people off the rolls and uh and allowing those people to understand that in their in at least that instance it's simple. Uh when you're writing uh uh provisions and legislation uh that are as uh as difficult as we uh have written, I don't think you can say it's simple. But the fact that uh that we've taken the poor off the rolls and the fact that the bill is fair, people will not, when they're filling out their income tax, be paying for their neighbor's loophole. If uh if that is the accomplishment of this legislation. If business is going to make its decision on business practices as to how they can avoid paying taxes, I think that's the legislator's dream. Fairness. Uh simplicity where you can get it. But uh a contribution to the government as opposed to avoidance of paying taxes, that is an accomplishment. And I think that uh, you know, if there's going to be a mark against my name, that is where I'd like to see it marked.

SPEAKER_12 1:03:04

Certainly is. You sure can be proud of that. Chairman Packwood, do you have a list of provisions of which you are particularly proud?

SPEAKER_14 1:03:10

It's interesting, Bob. Uh Dan and I would have the same provisions. I would look at uh the low rates, which we both strove for and achieved. I would look at what we call the passive income limitations, and that's where people were avoiding paying taxes. And most of the people watching this show know what we mean by passive. You were writing off passive losses against active income and getting your taxes down to zero. Legally, I mean, people weren't cheating. That's gone. And henceforth, people are going to invest for the purpose of making money, not for the purpose of tax losses. And I think that has to be good for the economy. And then lastly, the corporate and individual minimum tax, because if there's any problem that Dan and I have faced over and over when we go to our constituents, it's a question or a statement sort of like this. Well, I don't mind paying my share, but why don't they pay something? And this bill will ensure that they will pay something.

SPEAKER_10 1:04:04

Chairman Rosankowski, Chairman Packwood, welcome. As a veteran of the tax writing committees, uh, I know that there are many that are going to take credit for some of the popular features of this bill. Uh I think that uh it's never been clear in any bill I've seen that the lion's share of the credit belongs right here with you too, and I congratulate you. Uh now for my question. Uh there has been some concern that this bill may have an adverse effect on an already troubled economy. Do either of you uh have any comments with respect to those concerns?

SPEAKER_05 1:04:36

Well, I don't know that this legislation will should accept the blame or the credit for what's going to happen in the economy. Uh I I believe basically that uh it's going to change a lifestyle for us. There's no question about that. Uh and I I I would assume that uh there could be uh a downturn slightly. In the long run, however, I think it's been attested to by some of our more respected economists that in the long run it's going to have a great uh favorable impact. But there are other problems that are going to contribute to what's going to happen in the economic future of this country. Uh I'd like to think, however, that uh if we are ever going to come back to to revisit the code, and that's the last thing I want to do, uh that at least it'll be on a fairer basis. At least when when we review uh the code in the future, uh everybody will be have an equal footing and be on a level playing field. Chairman Packlin.

SPEAKER_14 1:05:42

It was suggested that perhaps when the bill was done, conference was done, we should have hearings first and have some of the leading economists of the country come and testify as to whether the bill would help or hurt the economy. Well, first, most of them had written about it one way or the other, and you could catch their comments in the paper. It wouldn't have made any difference if we'd had hearings. We would have had 30 economists and they would have split roughly 50-50 that it's gonna help or it's gonna hurt the economy. Come back again. The bill is fair. I don't run across many economists who say it's unfair as to whether or not some of the relatively abrupt changes we are making in the investment tax credit, relatively abrupt in the passive loss provisions, are gonna cause some dislocation? They are. Is it gonna cause a downturn? I don't know. But I'll come back again to what I said a little earlier. If henceforth people are going to invest for the purpose of making money, they're going to be a little more cautious about their investment than if they are buying a syndicated share of a racing greyhound or a llama or a cattle feeding operation for the purpose of tax losses. And that I think will be good for the economy.

SPEAKER_05 1:06:46

Well, if if I could just comment on what the Senator Packard has said, uh you know the most impressive uh testimony that we took uh in the Ways and Means Committee in the very beginning of this long journey, it was from the business community that was saying give us an opportunity to make a judgment about how to invest our money based on good business practices as opposed to avoiding paying taxes. And I think that's significant. And and I honestly believe that that effect will will be felt by people generally. You're gonna have people with more money in their pocket and more willing to spend it. And I think that in itself is uh a a proud uh legislative accomplishment.

SPEAKER_14 1:07:23

Well, and it's intriguing, Dan. Uh Dan and I and Secretary Baker had a press conference earlier this morning. We are today approaching five hundred businesses or trade associations that have endorsed this bill as it's coming out of conference. And it is a pretty broad cross-section, including some very capital-intensive industries of American business. And the bulk of them, now there are a few that don't like it, but the bulk of them are saying we like the shot. We like the lower corporate rates, we're willing to trade off the loss of the investment tax credit for those lower corporate rates. You just don't tamper with it now. You leave it the way it is for five or six or seven years, and let us get used to it, but uh the bulk of business supports it.

SPEAKER_12 1:08:02

The points that each of you have made with respect to the significant changes in the tax bill are quite accurate and they do have far-ranging effects. However, certain critics of tax process have argued that this legislation could begin unraveling as early as next year. Are there any circumstances under which you might reconsider some of these tax reform proposals in the future? Chairman Packard?

SPEAKER_14 1:08:23

I don't I don't think for the foreseeable future, Bob, and you've been around the process long enough, I'm not going to predict beyond five years who knows will be president, who knows will be in Congress. But neither uh Chairman Roskinkowski or I have any desire to come back and make major changes. Now, do you mean will there be some technical drafting errors despite the care? There probably will. And we will probably have a technical correction act, but I think he and I are at one on this. We mean technical, and nothing more than that. No significant substantive change.

SPEAKER_05 1:08:55

Well, I uh and I agree with uh with what Bob Pack would have said. Uh I would have to be convinced that the bill uh in itself uh was entirely responsible for changes uh or for downturn. If that were true, I'm sure that uh that we'd move to correct that. But boy, uh it'll take a lot of convincing for me to revisit this legislation. And Bobby, most businesses and i in the conversations that I've had and the questions that I've taken, people want certainty. And that is really, I think, what we're gonna try to give them in this legislation. Certainty over a period of years.

SPEAKER_03 1:09:39

Well, um, as one who labored uh in the vineyards of uh Treasury One and uh and uh the president's proposal, um uh I do want to add my thanks to both of you for what you've done. I uh I uh, as you know, had to ride herd on a lot of those uh uh tax shelter schemes out there that uh I hope now we're beginning to see the end of it. But let me shift gears with you just a little bit this morning. Chairman Rosikowski, you uh have consistently argued that spending cuts alone uh aren't going to solve the uh deficit problems of the country. You've been an advocate of raising taxes uh if it becomes necessary to bring these deficits under control. As a matter of fact, at a recent conference on consumption taxes, you were quoted as saying that that you would oppose a broad-based federal consumption tax, and you think instead that additional revenue could ease the federal deficit ought to come from uh higher progressive rates on income and not by a low regressive tax on need. So let me pose this in two questions. First, uh do you anticipate that Congress is really going to raise these new tax rates in the near future? And uh then when or under what circumstances uh would you envision that your committee would really take such action?

SPEAKER_05 1:10:59

Well, I don't anticipate us raising the rates. Uh I uh it that was in response to uh what I thought was an avalanche of uh favored opinion on on consumption tax. Uh I I just think that uh uh uh the rate structure is more progressive if you're going to tax, uh if you're going to uh increase taxes. Uh I also couple that with uh my friend Ronald Reagan down at the White House. Uh I'd like to, if he's going to support such increases, I'd be glad to to join in the effort. Uh and I and I'm consistent in that. But we've got a deficit problem in this country, and we're going to have to address that sooner or later. Uh I'd like to uh to sh shake a few timbers down at 1600 Pennsylvania Avenue and have them become aware of the fact that we've got a problem. Uh we just cannot continue to cut uh programs. Uh uh what we're all concerned about right now is sequestration, whether or not the Congress is going to be sequestered. And uh I've gotten some indications from the leadership uh in the House of Representatives that I should be looking at some excise taxes. Well, I'm going to do that because I'm a team player, and if if if the if the Congress, uh both the House and the Senate, think that that's necessary, I'm certainly not gonna stop it. But uh I don't I don't envision going back to the rate structure for a long time into the future. Uh however, I do feel that uh we raise rates or we raise taxes in the excise area at the people's peril, because for legislators, that's the easiest tax to increase in the world.

SPEAKER_03 1:12:34

Chairman Packwood, in a recent meeting with a business group, you stated that the uh proposed tax rate would not be raised in the foreseeable future. And uh in fact, you think that we ought to leave this code just about uh the way it is, including those rates, uh, for a long enough period of time so that people can get used to it, they can invest under it, they can uh begin to see how it works. So let me pose a couple of questions to you. Do you think Congress uh will be adding a new taxing system, such as a consumption tax of some sort? Uh and if not, how do you see Congress uh dealing with the deficits?

SPEAKER_14 1:13:10

Separate uh the immediate from the foreseeable future. The immediate is the Graham Rudman totals right now, and can we get down below the hundred and fifty-four billion so there's no sequester? I think we will do that this year with no significant tax increase or revenue enhancements. There there may be some kind of cigarette tax or gasoline tax or something like that, but nothing major this year. And next year, I think if we have to have significant revenues, and the president says significant revenues, we will do it not by raising the rates, but by again broadening the base and eliminating more deductions and more exclusions and raising the revenue that way rather than raising the rates. Very good. Thank you, Mark.

SPEAKER_10 1:13:54

Chairman Roskowski, the emphasis on tax reform during uh the 99th Congress has forced the tax writing committees to put aside a number of other issues, uh including superfund taxes, and as you alluded to, some of the excise taxes. Uh what tax changes do you think uh might be in store for us for the rest of this year or the start of next year?

SPEAKER_05 1:14:15

Well, it all depends, Mark, on uh on just how serious we want to be about deficit reduction. Uh I'm uh conducting uh uh hearing tomorrow uh and possible markup on where we're going to go with respect to uh the increases in in the tax area. Gasoline taxes are certainly high on the agenda because it's it's something I think that most members feed you can raise $6.3 billion, which is what I'm s w what which is suggested to me by the budget committee that I have to raise. Uh I think that uh you know all the uh all the the luxury taxes are there available to for uh another hit. Uh uh presently I have a uh a measure before the Rules Committee on Cigarette Taxes, which of course uh is not necessary because we did raise $11 billion in the Tax Reform Act. But it all depends on how uh leadership, both in the House and Senate, want to play that. Uh do they want to use that uh and and fly in the face of a president that said, I want revenue neutrality in this legislation? I'm for it. I I I would like to divorce the two of them, because I think that that was a commitment we made to the American people, and I joined in that commitment. And therefore, I'd like to see us uh uh keep the reform bill separate and apart and neutral. If, however, we're going to have to uh avoid sequestration and and revenues have to be uh increased, there are the various, you know, round up the usual suspects, uh cigarette taxes, gasoline tax. Uh and I I I I'm going to lay that before my committee tomorrow and see just exactly what uh what the response is going to be.

SPEAKER_10 1:15:50

We know, uh, Mr. Chairman, when we were there, uh it used to be a little easier job for both of you when Bracket Creep would uh pick up some money and you could give the people a tax cut. Uh now I think it's uh a much more difficult uh uh job to hold. Uh Senator Packwood, uh what tax legislation do you expect to move forward in the hundredth uh Congress?

SPEAKER_14 1:16:11

I don't Mark foresee any significant new tax legislation. As I say, if we need extra revenues, I think it would be broadening the base uh by including within the tax base some things that have been left out, both personal and corporate. But the two big issues I see coming next year, if we don't meet them this year, one is trade legislation, and I cannot tell whether we're gonna get a bill that the Senate, the House, and the President can agree upon. But if not, that's gonna be a Donnybrook next year. And the other is Medicare because the Social Security trustees are indicating that Medicare is gonna turn into the red, and we're either gonna have to find some way to contain costs or increase revenues or some combination of the two, and if we put it off and put it off, uh the problem will get worse rather than better.

SPEAKER_03 1:16:56

Uh let me pose something for the for for both of you that's kind of near and dear to my heart, as you might recognize. Uh we've had a lot of complexities added to the code in the 1982 and the 1984 acts, and uh there's even more pressure uh gonna come on the IRS from from this new legislation. Now we've got Graham Rudman Hollings and all of these other problems uh uh along with trying to deal with the deficits. Uh, do you really see uh adding significant personnel to the audit and the collection uh uh and the taxpayer service functions of internal revenue uh uh uh that uh that will uh deal with the whole problem of the decline in compliance, because uh if we're not gonna deal with that and the compliance continues to go down, the self-assessment system simply doesn't uh produce what it should.

SPEAKER_14 1:17:48

I've got a trust fund for Dan that will take care of this. The answer is yes, and I'll bet you the chairman will answer yes, also, that you're gonna see more money appropriated for the IRS, you're gonna see more agents. Some of the IRS have said that at least some of their compliance problems are gonna be somewhat alleviated by getting rid of the distinction between capital gains and regular income. That, from an enforcement standpoint, will make it easier. But I'll wager you will see both the House and the Senate rather significantly increase the IRS budget through the appropriation process for compliance.

SPEAKER_05 1:18:21

Good. Well, I think uh uh the bill in itself, uh Rascal, will give uh will give a psychological boost to the voluntary system. Uh as I said earlier, we're responding to people that have been frustrated and disappointed. Uh I I do, however, and you knew when you were uh uh in the commission, I always supported uh more revenues, uh more employees. It was just the appropriations process. Thank you for that. But I but I do think that uh that you're going to see uh people continue on the voluntary basis to uh to make their contributions on April 15th. And I think the fact that we've done and we've got two rates and it's simpler for them, I think you're gonna see that. But but as far as compliance is concerned, I've uh no uh hesitation about increasing uh the amount of uh service uh uh service employees. Great. Thank you.

SPEAKER_04 1:19:16

That should warm the heart of a former Commissioner of Internal Revenue, shouldn't it? Chairman Packwood, Chairman Rostinkowski, we uh really appreciate very much that you uh spent this time with us this morning. Uh, on behalf of uh what I now hear are 20,000 people uh in our audience this morning. I know they appreciate the insights that uh you've given us, uh, and we appreciate uh your sharing your thoughts. Thanks to be here, Dominic. We certainly uh wish you well in the uh final steps of this uh uh process and on your way to some uh uh historic uh action in the tax process, the tax legislation. Thank you. Thank you so much for being with us. Thank you.