A huge annual federal deficit, burgeoning welfare roles, an increasing tax burden and an unaccountable federal education bureaucracy were among the challenges that faced Nevada Republican Jim Gibbons as a freshman Congressman in 1996.
"Today, I'm able to tell people that we've finally got the ship of state headed away from the ice field," Gibbons told members of the Carson City Area Chamber of Commerce Wednesday morning.
"But it takes time to turn that ship. We're starting to do that," Gibbons said. He also pointed out a few more political icebergs on the horizon.
The federal government's annual deficit was running $300 billion in 1995, he said. In 1998, the budget was in the black for the first time since 1969, with a $50 billion surplus. The 1999 surplus was $80 billion and 2000's is expected to reach $130 billion, he said.
"It's projected that, over the next 10 years, the cumulative surplus will be $3.6 trillion," Gibbons said.
"With such a surplus, it's clear you're paying too much in taxes."
Gibbons said two tax cuts are already approved - a gradual reduction of the capital gains tax to nothing, with a reduction from 28 percent to 20 percent already in effect, and the doubling of the inheritance tax exemption to $1.2 million.
He said he wants to see the inheritance or "death" tax eliminated, because it forces the sale of family farms and family-owned small businesses upon the death of proprietors to pay the 55 percent tax. Gibbons said the "marriage penalty" could be eliminated from the federal tax structure within the next year.
Gibbons said 16 million welfare recipients have been trained and obtained jobs through a federally mandated system of investment and time limits.
The next major area to experience a forced reduction could be the government education bureaucracy, he indicated.
"We passed the Education Flexibility Act, which mandates that 95 percent of your education tax dollars be spent in the classroom, not on administration or bureaucracy," Gibbons said. He said some education programs had spent 40 percent to 60 percent of their funding before money reached the classroom level.
"The only way to get accountability for our education dollars is to give that responsibility back to the states, the school boards and the parents. We're doing that," Gibbons said. "We're showing that we believe in schools and communities. Now you have to show us with improved test scores."
Gibbons said other issues he expects to face include:
-- Significant changes in the federal tax structure, with a modified flat income tax possibly eliminating the need for the Internal Revenue Service.
-- Increasing the investment in the nation's military, which is losing experienced personnel and suffering from short funds. Gibbons said nine of the Navy's 15 jets permanently stationed at Fallon Naval Air Station cannot fly because of parts shortages.
-- Working to establish a national ballistic missile defense system. He said the nation has no defense against missile attacks, which could come from terrorists just miles off-shore as well as from launches by hostile countries.
-- Health care system reform. "The federal Health Care Finance Administration is rapidly transforming itself into the IRS. It has issued standards that neither doctors nor insurance companies can comply with," Gibbons said. He added that the higher costs Americans pay for prescription drugs need to be corrected.
