    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                                    MEMBER DAY

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON WAYS AND MEANS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 14, 2023

                                   __________

                              Serial No. 118-FC13

                                   __________

             Printed for the use of the Committee on Ways and Means

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    56-530                  WASHINGTON : 2024

    -----------------------------------------------------------------------------------

                          COMMITTEE ON WAYS AND MEANS

                        JASON SMITH, Missouri, Chairman

    VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
    ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
    MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
    DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
    DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
    BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
    JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
    DREW FERGUSON, Georgia               LINDA SANCHEZ, California
    RON ESTES, Kansas                    BRIAN HIGGINS, New York
    LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
    KEVIN HERN, Oklahoma                 SUZAN DelBENE, Washington
    CAROL MILLER, West Virginia          JUDY CHU, California
    GREG MURPHY, North Carolina          GWEN MOORE, Wisconsin
    DAVID KUSTOFF, Tennessee             DAN KILDEE, Michigan
    BRIAN FITZPATRICK, Pennsylvania      DON BEYER, Virginia
    GREG STEUBE, Florida                 DWIGHT EVANS, Pennsylvania
    CLAUDIA TENNEY, New York             BRAD SCHNEIDER, Illinois
    MICHELLE FISCHBACH, Minnesota        JIMMY PANETTA, California
    BLAKE MOORE, Utah
    MICHELLE STEEL, California
    BETH VAN DUYNE, Texas
    RANDY FEENSTRA, Iowa
    NICOLE MALLIOTAKIS, New York
    MIKE CAREY, Ohio
                           Mark Roman, Staff Director
                     Brandon Casey, Minority Chief Counsel

                             C  O  N  T  E  N  T  S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Hon. Adrian Smith, Nebraska, Chairman............................     1
    Hon. Mike Thompson, California, Ranking Member...................     2
    Advisory of September 14, 2023 announcing the hearing............     V

                                   WITNESSES
                                    Panel 1

    Hon. Mike Collins, Georgia.......................................     2
    Hon. Andy Barr, Kentucky.........................................     7
    Hon. Bill Johnson, Ohio..........................................    10
    Hon. Neal Dunn, Florida..........................................    13
    Hon. Anthony D'Esposito, New York................................    16

                                    Panel 2

    Hon. Zach Nunn, Iowa.............................................    19
    Hon. Chuck Edwards, North Carolina...............................    26
    Hon. Jenniffer Gonzalez-Colon, Puerto Rico.......................    31
    Hon. Burgess Owens, Utah.........................................    37
    Hon. Dan Meuser, Pennsylvania....................................    41

                                    Panel 3

    Hon. Doug LaMalfa, California....................................    47
    Hon. Julia Letlow, Louisiana.....................................    52
    Hon. Vicente Gonzalez, Texas.....................................    62
    Hon. Trent Kelly, Mississippi....................................    66
    Hon. Tony Gonzalez, Texas........................................    69

                                    Panel 4

    Hon. Bruce Westerman, Arkansas...................................    73
    Hon. GT Thompson, Pennsylvania...................................    84
    Hon. Buddy Carter, Georgia.......................................    91
    Hon. Victoria Spartz, Indiana....................................    99
    Hon. French Hill, Arkansas.......................................   104

                                    Panel 5

    Hon. Marilyn Strickland, Washington..............................   109
    H on. August Pfluger, Texas......................................   114
    Hon. Mike Waltz, Florida.........................................   118
    Hon. Maria Elvira Salazar, Florida...............................   122
    Hon. Mark Green, Tennessee.......................................   129
    Hon. Rudy Yakym, Indiana.........................................   135
    Hon. Salud Carbajal, California..................................   138
    Hon. Rob Wittman, Virginia.......................................   141
    Hon. John James, Michigan........................................   147
    Hon. Clay Higgins, Louisiana.....................................   155
    Hon. Matt Rosendale, Montana.....................................   159

                       PUBLIC SUBMISSIONS FOR THE RECORD

    Public Submissions...............................................   165
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                                   MEMBER DAY

                                  ----------

                          THURSDAY, SEPTEMBER 14, 2023

                      House of Representatives,
                                   Committee on Ways and Means,
                                                        Washington, DC.
        The committee met, pursuant to call, at 9:39 a.m. in Room
    1100, Longworth House Office Building, Hon. Jason T. Smith
    [chairman of the committee] presiding.
        Mr. SMITH of Nebraska [presiding]. The committee will come
    to order, and good morning. Thank you for gathering with us
    here this morning.
        The Ways and Means Committee has made it a priority to meet
    with Americans in their communities to learn about challenges
    as well as solutions that various folks think Congress should
    consider for the future. Already the committee has traveled
    more than 7,000 miles to hear directly from Americans who are
    affected by our policies: workers, families, farmers, ranchers,
    small business owners, just to name a few.
        We have heard about high food prices. We have heard about
    supply chains and the challenges that manufacturers face, small
    and large--the challenges small and large and manufacturers
    small and large. We have heard from real concerns coming from
    workers, families, farmers, and so many different perspectives.
        Earlier this year the committee approved a jobs package,
    the American Families and Jobs Act. And that is a direct answer
    to what we have heard from working Americans. It is the actual
    rescue plan for those who need relief from high prices created
    by Washington spending, and it gives small businesses a
    fighting chance to expand and make America more competitive
    with China.
        In just 2 years we will face a $3 trillion tax hike from
    the expiration of the Tax Cuts and Jobs Act. Families making
    under $500,000, the exact same folks that President Biden
    promised not to raise taxes on, will be hardest hit. We welcome
    ideas for avoiding this looming fiscal disaster for families
    and small businesses.
        I might remind folks that TCJA left the House on a
    permanent basis with permanent policy that didn't quite survive
    the policy--or the process, so we will have to address that
    moving forward.
        We have got a lot of challenges--China and their desire to
    undermine our economic activity here in America--and I am glad
    that we have various folks here today--members, colleagues--who
    are focusing on solutions.
        Mr. SMITH of Nebraska. So I will begin by recognizing Mr.
    Thompson, the ranking member for Ways and Means today.
        Mr. THOMPSON of California. Thank you, Mr. Chairman, and I
    want to thank all of our colleagues for being here today, both
    on the dais and at the witness table. This is an important
    chance for all of us to hear directly from our colleagues about
    their priorities.
        Our committee has an extremely wide mandate: taxes, trade,
    Medicare, Social Security, retirement, and other things. So, I
    look forward to hearing from all of you and the other members
    who are scheduled to come in throughout today's hearing.
        Mr. THOMPSON of California. And I yield back.
        Mr. SMITH of Nebraska. Thank you, Mr. Thompson.
        We will begin today in recognizing Mr. Collins from Georgia
    here to perhaps carry the family mantle. His father once served
    on the committee.
        We are glad you are here, Mr. Collins. Please begin.

        STATEMENT OF THE HON. MIKE COLLINS, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF GEORGIA

        Mr. COLLINS. Thank you, Chairman Smith, and thank you,
    Ranking Member Thompson.
        You know, earlier in the year, when I made the comment in
    that field hearing in Georgia that you all let me attend, and I
    said I feel like I need to be over there on the witness side
    more than over here, I didn't know you all were going to take
    that literally. Next time I see you, I am sitting over here.
    But that is all right.
        I want to talk to you about a bill that we have that is
    dealing with the aviation industry, or which is actually five
    percent of the GDP, 125 trillion in revenue is what they
    provide. And it is obvious, I think most of you probably fly in
    and out of D.C. and you realize that--the shortage and the
    aircraft delays and the flight delays. And we are addressing
    that shortage with what we call the Aviation Workforce Act,
    H.R. 1818.
        And why is that important? I mean, just because we have a
    shortage. Well, everybody knows the demand is up. More people
    are flying, more cargo is being moved around the country by
    air. And we have more pilots and aircraft mechanics today that
    are retiring faster than ever. And so we have to address that.
        And normally, recruitment keeps up with that. But it is
    not. And there is two main reasons for that that we see. One is
    military recruitment is down, and it has been down, and it will
    continue to be down because of the socialistic agenda and
    objectives that the military is pushing in their hiring and
    recruiting process. And the other problem that we see out there
    is just the barrier to entry, the cost problem that we have.
    You know, it costs $90,000 to $100,000 at least to go out there
    and get a commercial pilot certificate.
        So what we have done--as a matter of fact, I want to
    interject this--as a matter of fact, yesterday I spoke to the
    Chamber of Commerce. And when we got through speaking, the very
    first question they asked was, ``What are you all going to do
    about the pilot shortage and the problems that we are having
    with aircraft not being able to even function when we get to
    the airport?'' And so I was able to tell them about H.R. 1818,
    and how we were going to testify today in front of Ways and
    Means to see if there is an avenue to get this out.
        It is just a common-sense, simple bill that deals with the
    529 savings plan, which I am sure you all are well aware of.
    And all we are doing is taking and injecting into those degrees
    and certificates, now that trade schools are allowed to be in
    that part of that program, and just putting in there commercial
    airline pilot certificate and aviation aircraft mechanic
    certificates. That is all, and allowing people to use that
    money for their children to get that.
        As a matter of fact, one of the aviation schools contacted
    us here recently because they knew about it, and somehow
    parents are finding out about it. And they said they did a
    survey and over 50 percent of the people are already inquiring,
    ``Can I use my 529 plan to put this child and get this
    certificate?''
        So it is already out there, you all. We have 139
    cosponsors, very bipartisan. As a matter of fact, we have 8
    members of the House Ways and Means, or 19 percent of the
    committee, that are already cosponsors of this bill.
        So I encourage you, please take a hard look at it. We would
    love to have this bill passed out of the House Ways and Means,
    got on the floor. We have got somebody sitting in the Senate
    right now with it, ready to take this thing up and get this
    thing passed. It would be a good bill, not just for the House,
    it would be a good bill for America and for the American
    people.
        [The statement of Mr. Collins follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. COLLINS. And with that I yield back and I thank you for
    your time, Mr. Chairman.
        Mr. SMITH of Nebraska. Thank you, Mr. Collins. I appreciate
    your work on this issue. These workforce issues are certainly
    acute. The needs are so, so deep. And I appreciate your focus
    on this and focus on solutions.
        Next we will have Mr. Barr from Kentucky.
        You are recognized.

     STATEMENT OF THE HON. ANDY BARR, A REPRESENTATIVE IN CONGRESS
                   FROM THE COMMONWEALTH OF KENTUCKY

        Mr. BARR. Thank you, Chairman Smith and Ranking Member
    Thompson.
        I have the privilege and responsibility of representing
    central Kentucky in the Congress. And it may not surprise you
    all that I am going to talk about horses and bourbon, because
    that is what I represent, the horse industry, the thoroughbred
    horse industry, and the Kentucky whiskey industry. And Iowa
    corn goes into that bourbon.
        So let me first talk about horses. This is a $6 billion
    industry for our country. And we need to update some of our tax
    laws to continue to encourage that investment.
        So first, the Racehorse Cost Recovery Act is before this
    committee. The legislation makes permanent the modification of
    accelerated depreciation allowance for racehorses to allow a
    three-year recovery period for a racehorse. The default is
    seven years, but the useful life of that asset is three years,
    and we need to make that permanent law. That is before the
    committee. We would encourage you to look at that because that
    encourages investment in these very valuable racehorses, and it
    would encourage more investment that would, again, very much
    accelerate this dynamic industry.
        Also, the Racehorse Tax Parity Act would shorten the
    holding period for racehorses to be considered eligible for the
    long-term capital gains treatment. Oddly, if you realize a
    capital gain with a racehorse, you have to hold that asset for
    24 months, as opposed to the 12 months. This makes no sense. We
    need just to level the playing field on that asset class, make
    it a 12-month holding period in order to get that capital gains
    treatment.
        On bourbon, Mr. Thompson, Ranking Member Thompson, we are
    trying to replicate the wine industry. The bourbon tourism is
    exploding in Kentucky, just like Napa and Sonoma. We want to do
    what you have done, Mr. Ranking Member, and we want to continue
    to attract that kind of tourism to central Kentucky the way you
    have in Northern California.
        And so one of the ways to do that is to fix some of these
    tax problems with the bourbon industry. One is the Duty
    Drawback Clarification Act. This bill would clarify that all
    whiskey products are commercially interchangeable and eligible
    for the drawback program by creating a single, eight-digit
    harmonized tariff schedule for whiskeys. Under the current HTS,
    spirits categories such as whiskeys have several different HTS
    numbers at the eight-digit level.
        For example, Scotch whiskey and bourbon have their own HTS
    codes at the eight-digit level, meaning that these products are
    not commercially interchangeable for purposes of drawback. So
    when we import Scotch whiskey, that has a separate and
    different eight-digit code. We need to make sure that bourbon
    whiskey, a uniquely American spirit--again, a multi-billion
    dollar industry growing every day--has that interchangeability
    with our imported whiskeys. We can--when we can compete on a
    level playing field, Kentucky bourbon will definitely get into
    that market share in Europe and Asia. But we are punishing
    ourselves because we have this duty drawback disadvantage.
        And then finally, the rum cover over. So the rum cover over
    has expired, and the Virgin Islands and Puerto Rico's rum
    distilleries work in tandem with many of our U.S.-based spirits
    companies. The territories, as well as the companies, all rely
    on the cover over to meet their fiscal obligations. Making the
    cover over part of a tax package looking back to 2021 as well
    as forward would be the responsible course to cover. And if you
    want to help American spirits, American Kentucky bourbon,
    extending that rum cover over would be helpful not only to the
    territories, but also to the Commonwealth of Kentucky.
        I see I have about 45 seconds left, and let me just take
    that opportunity to encourage the committee to fix this R&D tax
    credit. We have got a lot of manufacturers in central Kentucky.
    We need to eliminate the five-year amortization requirement for
    R&D, and we need to continue expenditures in the taxable years
    in which they are occurred. That is going to make sure that we
    can compete with China in manufacturing.
        Also, I would also encourage you all to look at this
    Opportunity Zones Enhancement Act. The bill would create a tax
    exemption on interest income earned by taxpaying banks from
    loans extended to qualified businesses operating in opportunity
    zones. I know that you all have updated and provided some
    enhancement to the Opportunity Zones in the most recent tax
    package. From the position of the Financial Services Committee,
    taxpaying banks want that level playing field with credit
    unions. Give them a tax exemption to deploy private capital
    into these Opportunity Zones to help distressed areas.
        [The statement of Mr. Barr follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. BARR. And with that I will yield.
        Mr. SMITH of Nebraska. Mr. Kelly.
        Mr. KELLY of Pennsylvania. No, Andy, let's get together on
    that. You understand a lot of this stuff, and I think one of
    the difficulties when you get to Congress is you find out that
    people are making policy that have never been involved in the
    actual policy they are trying to make.
        When you talked about fine wines, Mike Thompson, right? He
    knows everything about it. When you are talking about banking,
    there is--I don't think there is enough depth of knowledge and
    experience, but there is the talent to understand what you
    want--what you are talking about. I would like to spend some
    time with you privately when you have an opportunity to do a
    little deeper dive on this so that I can understand it better.
    But I know you are on the right track.
        Mr. BARR. Thank you, Congressman Kelly. And yes, indeed. So
    when your credit unions come and talk to you, and your banks
    come and talk to you about the disparity in the tax treatment,
    this is a way to help level the playing field for banks,
    taxpaying banks. Give them an incentive to deploy private
    capital and not have to pay taxes on those loans, those--that
    private capital deployed to small businesses in Opportunity
    Zones. And this is the way to supercharge Opportunity Zones and
    also help those taxpaying banks.
        Mr. KELLY of Pennsylvania. Come to Erie, Pennsylvania. I
    will show you----
        Mr. BARR. Okay.
        Mr. KELLY of Pennsylvania. I will show you that whole thing
    in action. One of the most successful pieces that we did, of
    course, with the Opportunity Zones, that city and what they
    have done with the policy that we gave them that allowed them,
    through private investment, not taxpayer investment, to
    complete--they did a 180. A thing that was falling apart now is
    a place of beauty and a place where business is thriving.
        So come with me to Erie some time. You don't have to come
    in the summer. Well, wait. You better not come in the winter,
    unless you bring snowshoes with you. But we are on the right
    track. Thank you.
        Mr. BARR. Thank you.
        Mr. SMITH of Nebraska. Thank you. Thank you, Mr. Barr. You
    mentioned a variety of issues here, and I am--I appreciate your
    engagement, and look forward to working with you in the coming
    months.
        Next we have Mr. Johnson from Ohio, a member of one of the
    newer committees in the House, the Energy and Commerce
    Committee. [Laughter.]
        Mr. SMITH of Nebraska. Mr. Johnson, you are recognized.

        STATEMENT OF THE HON. BILL JOHNSON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF OHIO

        Mr. JOHNSON. Well, good morning, and thank you, Mr.
    Chairman, for giving me an opportunity to speak this morning. I
    come to you and the committee with a plea for help on behalf of
    the people of East Palestine.
        As many of you know, I represent the village of East
    Palestine, Ohio, the site of the train derailment and
    subsequent fire and chemical spill on February 3 of this year,
    which has completely upended the lives of the residents there
    through no fault of their own.
        I have spent a significant amount of time in East Palestine
    since the derailment. The national media, for the most part,
    has left and the story has faded from the national news. But
    that doesn't mean that the problems are solved. Far from it. I
    have continued to be there every chance I get, meeting with
    residents and small business owners. Later this month I will be
    hosting an Energy and Commerce Environment, Manufacturing, and
    Critical Materials Subcommittee field hearing in the village,
    where we will hear from the EPA officials, community leaders,
    and the railroad regarding what happened, the ongoing cleanup
    efforts, and actions being taken to address environmental and
    health concerns.
        As you would expect, many residents have taken a financial
    hit due to this disaster. We in Congress have an opportunity to
    play a meaningful role in helping them out. Back in March I
    introduced H.R. 1270, a bipartisan piece of legislation called
    the East Palestine Tax Relief Act. Cosponsored by two members
    of this committee, this bill ensures those that were thrust
    into this unfortunate situation will not have to pay taxes on
    any relief payments they have already rightfully received or
    will receive in the future relating to the accident. This
    includes direct payments from the railroad, any subsidiary
    insurer, or agent of Norfolk Southern, or any local, state, or
    Federal agency.
        I believe this is the right thing to do. I urge my
    colleagues to support the residents of East Palestine by
    holding a vote on H.R. 1270 in the coming weeks, and I thank
    the committee.
        [The statement of Mr. Johnson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. JOHNSON. I yield back.
        Mr. SMITH of Nebraska. Thank you, Mr. Johnson. Certainly,
    the issues that you raise are important, and always trying to
    have a good tax policy and responsive tax policy in mind.
        Mr. Thompson.
        Mr. THOMPSON of California. Thank you for testifying today.
    As you know, this is an issue of great interest to a number of
    us in the House and on this committee.
        I think in the next panel or one of the later panels, Mr.
    LaMalfa from up in Butte County is going to testify. He and I
    have legislation dealing specifically with folks who received
    payments and are being taxed on those payments, payments that
    don't even hold them harmless. And it is terrible. That
    particular bill, I was the lead author in the last Congress,
    and we passed it out of this committee, and it passed out of
    the House and went over to the Senate. And as you know, the--
    Senator McConnell said no to all tax bills in the final--in the
    eleventh hour.
        So hopefully, we will be able to put these together, we
    will be able to move--all these disaster bills, we will be able
    to move them over to the Senate and we will get more
    cooperation. Because like you, I have constituents that are
    really hurting. And it is not just in Ohio and California; it
    is in states across the country. And we have a responsibility
    to help those people.
        So thanks for being here.
        Mr. SMITH of Nebraska. Thank you. Thank you, Mr. Johnson,
    for your input today.
        Next we have Dr. Dunn. Dr. Dunn is here to share his
    insight.
        Please proceed.

     STATEMENT OF THE HON. NEAL DUNN, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF FLORIDA

        Dr. DUNN. Thank you very much, Mr. Chairman and Ranking
    Member Thompson.
        As a member of the China Select Committee, it has become
    clear that strategic competition with China is one of the
    defining issues of the 118th Congress. Reducing American
    reliance on China is a shared policy goal of many across the
    bipartisan political spectrum, as well as many American
    companies.
        In July Mr. Auchincloss and I, joined by 64 Members of
    Congress, including every single member of the China Select
    Committee, sent a letter to this committee underscoring the
    necessity of legislation to facilitate the supply chain shifts
    out of China, specifically the renewal of the generalized
    system of preferences on tariffs.
        And thank you very much, Mr. Chairman, for your attention
    to this and your staff's attention to this letter.
        The GSP is one of America's oldest and largest trade
    agreements. It has been renewed by both Democrat and Republican
    administrations since 1974, 59 years we have never failed to
    renew this until 2020 when we failed on December 31, 2020. So
    it has lapsed for that long. The GSP boosts economic
    development by removing tariffs on non-sensitive goods from 119
    different developing countries, all of them putative friends of
    America. China is not a qualified country. But thanks to our
    gridlock, the GSP expired in 2020 and the last vote, I would
    note, on the GSP renewal was 400 to 2. So, I mean, this is a
    very popular bill.
        I am confident that GSP renewal legislation will be
    delivered under the Chairman--chair's leadership and--on Ways
    and Means Committee. And without it, billions of dollars in
    additional costs from current tariffs will be transferred to
    American companies and consumers. Right now American companies
    are forced to choose between hiking prices, absorbing the
    profit cuts, or finding cheaper places to manufacture, places
    like China. Our failure to renew this GSP moves international
    manufacturing to China.
        In addition, China exploits U.S. trade laws, gaming our de
    minimis system. With a tax and duty-free threshold for all
    imports set at $800, China plays trade games at our expense.
        I am proud to co-lead H.R. 4148, the Import Security and
    Fairness Act, with Mr. Blumenauer of this committee. This bill
    would have the effect of removing Russia and China from
    receiving de minimis benefits.
        Why do communist and authoritarian countries who seek to
    undermine the United States get a non-reciprocal trade subsidy
    at the same time some United States businesses and workers
    struggle to make ends meet in today's economy? The CCP and
    Russian exporters receive American charity that they do not
    deserve.
        I encourage my colleagues on this committee and throughout
    Congress to support the Import Security and Fairness Act, and
    please put an end to this. I am confident we can do that.
        [The statement of Dr. Dunn follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Dr. DUNN. And with that, Mr. Chairman, I yield back.
        Chairman SMITH [presiding]. Thank you, Mr. Dunn, for coming
    to our committee today.
        I am pleased to recognize Mr. D'Esposito from New York.
        Mr. D'Esposito, I appreciate your opportunity to come here
    and to talk about an issue I know that is extremely important
    to you.

     STATEMENT OF THE HON. ANTHONY D'ESPOSITO, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mr. D'ESPOSITO. Well, I appreciate you, Mr. Chairman.
        Good morning to not only Chairman Smith, but other members
    of the Committee on Ways and Means. Thank you for giving me and
    all of us the opportunity to speak here today, and to advocate
    for Congress to lift the current cap on the State and Local Tax
    deduction, also referred to as SALT.
        Mr. Chairman, I also appreciate your open-door policy to
    hear concerns of members from one end of this country to the
    other.
        My constituents from New York's 4th Congressional District
    sent me to Congress to provide meaningful tax relief to local
    families. And one way I plan to deliver that relief is by
    removing the current SALT cap. Americans are suffering from
    sky-high inflation, rising gas and grocery prices, and out-of-
    control spending from the Biden Administration. Removing the
    cap is one way House Republicans can provide Americans with
    financial support.
        I am proud to serve as the current vice chair of the House
    SALT Caucus, a bipartisan group of representatives determined
    to bring real relief to the districts we represent by lifting
    the $10,000 SALT cap currently in place for taxpayers filing
    their federal income returns.
        Since I came to Congress in January, I have advocated for
    the lifting of the cap. I joined my fellow Long Islanders,
    Congressman Andrew Garbarino and Congressman Nick LaLota, in
    sponsoring the amendment to the Fiscal Responsibility Act,
    which would have restored the SALT cap to pre-2017 levels for
    majority of Americans.
        I am also a proud cosponsor of the SALT Fairness and
    Deficit Reduction Act, which would significantly raise the SALT
    cap, and would require an annual inflation adjustment to the
    increased amount beginning after 2023 and extending to 2032,
    the period during which the limitation is in effect.
        New York House Republican members are working hard to
    deliver this needed relief not only for New Yorkers, but for
    all Americans, especially those in high-tax states. Raising the
    SALT cap will not just benefit high-income earners in New York,
    as many would want you to believe. In fact, a study conducted
    by the Government Finance Officers Association using IRS data
    found that nearly 40 percent of tax filers making between
    50,000 and $75,000 in 2015 claimed the deduction. That is
    nearly 7.6 million households in the United States of America.
        If House Republicans are serious about reducing the burden
    of President Biden's fiscal policies, then I urge all of my
    colleagues to join me in supporting a lift to the SALT cap.
        [The statement of Mr. D'Esposito follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. D'ESPOSITO. Chairman, I thank you again for letting me
    speak to the committee, and I yield back my time.
        Chairman SMITH. Representative, thank you for coming and
    sharing your opinion. The SALT issue is quite interesting, as
    it impacts areas of our nation much differently.
        I do want to highlight that your fellow colleague from New
    York, Ms. Malliotakis, has definitely--when we were marking up
    the American Families and Jobs Act, she was--she is, I believe,
    one of the members of your SALT Caucus, as well. She was a huge
    advocate, and shared a lot of very good points.
        So I appreciate you being here.
        Mr. D'ESPOSITO. I appreciate it, Chairman. Thank you for
    your time.
        Mr. NEAL. Mr. Chairman.
        Mr. HERN. Mr. Chairman.
        Mr. NEAL. Mr. Chairman.
        Chairman SMITH. Yes, Mr. Ranking Member.
        Mr. NEAL. I want to thank the gentleman for his informed
    comments on the SALT deduction. We have had that conversation
    here for a considerable period of time. The one thing that I
    think everybody has come to recognize, there is hardly an easy
    solution for the issue, although we crafted one at one time.
    And I hope that you will have a chance to weigh in with members
    of the committee.
        Mr. D'ESPOSITO. I appreciate that, Mr. Ranking Member.
        Mr. HERN. Mr. Chairman, Mr. Chairman, may I ask a question?
        Chairman SMITH. Mr. Hern.
        Mr. HERN. Congressman, colleague, has there been an update
    to that since 2015, on the impact of SALT on the American
    people?
        Mr. D'ESPOSITO. I believe there has. I don't have the
    numbers on me, but I am happy to get it to you.
        Mr. HERN. If you could get that, it would be great.
        Mr. D'ESPOSITO. Absolutely.
        Mr. HERN. If you could get it post-TCJA, that would be
    awesome.
        Mr. D'ESPOSITO. You got it.
        Mr. HERN. Thank you.
        Mr. THOMPSON of California. Mr. Chairman.
        Chairman SMITH. Mr. Thompson.
        Mr. THOMPSON of California. I too want to thank you for
    raising this issue. But as Mr. Neal said, we crafted a response
    to this that would help, and it was not the Democrats that put
    SALT removal on the books. So, I think you would be better
    served to take the partisan edge off of this issue. There are
    folks on both sides who are working hard to address this. Thank
    you.
        Mr. D'ESPOSITO. Well, I appreciate your comments, but I
    wasn't here when this was put into place. I came to office in
    January, and that is what I am going to focus on.
        Mr. THOMPSON of California. I realize that. But there is a
    history to this. I was here. I know that history.
        Mr. D'ESPOSITO. I have read the books, as well.
        Mr. D'ESPOSITO. Thank you.
        Mr. THOMPSON of California. It is better to take the
    partisan edge off trying to address this issue.
        Chairman SMITH. Mr. D'Esposito, thank you.
        Mr. D'ESPOSITO. Thank you, Mr. Chairman.
        Chairman SMITH. I want to thank the testimonies of all the
    individuals on the first panel, and you all are dismissed, and
    the clerk will please set up panel two.
        [Pause.]
        Mr. Nunn, I believe you are the first one up.
        [Pause.]
        I will now recognize Mr.--Representative Zach Nunn, the
    gentleman from Iowa. Mr. Nunn is a 6th generation Iowan, and
    served for 2 decades in the U.S. Air Force, and is currently in
    the Air Force Reserves.
        Mr. Nunn.

     STATEMENT OF THE HON. ZACH NUNN, A REPRESENTATIVE IN CONGRESS
                         FROM THE STATE OF IOWA

        Mr. NUNN. Well, Chairman Smith and members of the Ways and
    Means Committee, thank you incredibly for taking the time to
    hear from us, all members of this august body on both the
    Democrat and Republican side, to be able to fight for our
    communities back home.
        You, obviously, are tasked with one of the most challenging
    aspects of Washington, D.C. in making sure that our tax dollars
    are well-invested, and they are returned to our communities in
    a way that is both meaningful but helps to care for so many in
    our community.
        Mr. Chairman, I also want to commend you for your
    leadership on not just this committee, but, importantly, on
    making sure that wasteful spending in D.C. is put to a halt,
    ensuring that our families and small businesses can be
    successful and, like so many of you, that our farm families
    have the tools they need to succeed.
        As a father of six kids, we have brought on two foster
    children into our family. Recently, this year, we were able to
    adopt both Jayna and Aliya, two half-sisters that came to our
    family.
        I am privileged to co-chair the Congressional Caucus on
    Foster Youth. I have first-hand experience navigating this
    system, and have realized through painful experience how
    challenging it can be for so many families in our community.
        In April my wife, Kelly, and I brought these two young
    ladies into our family, and we have been blessed ever since.
    But it was a long and difficult road. This adoption opened our
    eyes to the challenges and shortcomings that exist within the
    system, despite great efforts by those trying to help this
    happen. And while we were fortunate to bring our daughters to
    their forever home, many never get that opportunity.
        Indeed, learning firsthand through the court experience, we
    saw grandmothers who tried to adopt their own grandchildren,
    but found the cost was just too high and too expensive,
    watching their own family be stuck in foster long-term. Agency
    attorney fees, as well as additional expenses, prevent far too
    many families in America today from being able to adopt a
    child. The average cost to adopt can go anywhere from a minimum
    of $8,000 up to $40,000 just to be able to provide a loving
    home. Oftentimes, grandparents, aunts, and uncles wanting to
    adopt their own biological grandchildren find it nearly
    impossible to access the financial assistance necessary to
    bring their grandchildren home. And this isn't even just
    amongst biological families, but people who want to do the
    right thing.
        To help with these high expenses, the Federal Adoption Tax
    Credit provides families with up to $14,890 per child. This
    qualified adoption expense includes everything from adoption
    fees, court fees, attorney fees, travel expenses, but, even
    more tangible, the mental health, the reunification, the cost
    of bringing a new child into a family, oftentimes with other
    children.
        However, as currently written, this credit benefits only
    those who have a high federal income liability, making it
    difficult for retirees, low-income, and middle-income families
    to adopt, let alone to be able to keep a foster child in their
    family.
        According to the U.S. Administration for Children and
    Families, there are over 400,000 children in foster care, and
    over 100,000 waiting for adoption right here in the United
    States. Of this, nearly half a million children do not have a
    home or a family, causing instability and inconsistency and
    lack of care. These numbers will continue to grow if families
    here in America can't afford to bring them into their home, and
    costs both the taxpayer and these families even more.
        And so that is why, Mr. Chairman, I have been proud to
    introduce H.R. 2510, the Fight for Families Act. This bill
    would amend the Internal Revenue Code of 1986 and make federal
    adoption tax credits permanent and fully refundable to families
    who adopt disadvantaged children. This includes children who
    cannot return to their parents' home, as well as children in
    which the state has determined that certain factors, such as
    their background, age, or medical condition, would prevent a
    family from adopting them without financial assistance.
        Mr. Chairman, I would like to submit to the committee for
    the record a graphic from the Congressional Research Service
    2020 Report on Adoption Tax Benefit.
        Chairman SMITH. So ordered.
        [The information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. NUNN. Thank you, sir.
        According to CRS, families with an annual adjusted growth
    rate of $100,000 and above receive roughly 66 percent of all
    Federal Adoption Tax Credit dollars, yet families with an AGI
    of 50,000 or under, those middle-income Americans, received
    just under two percent of all credit tax dollars. The majority
    of those receiving this credit can already afford to adopt.
        The Fight for Families Act incentivizes adoption for all
    families to ensure that the families of diverse backgrounds and
    kids have access to the Federal Adoption Tax Credit. This small
    change in our tax code will have a positive impact on making
    sure families are able to stay together in an extended
    biological sense, but also to make sure that more people have
    the opportunity to bring a child into their forever home.
        With that, I want to thank the committee today for their
    stellar leadership on all before us. And I urge my colleagues
    on both sides of the aisle to help more children find their
    forever home by supporting this fundamental bipartisan
    legislation.
        [The statement of Mr. Nunn follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. NUNN. I yield back my time, Mr. Chair.
        Chairman SMITH. Thank you, Mr. Nunn. I would like to
    highlight that there is a lot of interest on this committee in
    regards to looking at the refundability of Adoption Tax
    Credits. Our ranking member, Mr. Danny Davis, has a piece of
    legislation for all in regards to adoption tax credits. It is
    cosponsored by Republicans and Democrats on this committee. So
    there is a huge interest. Thank you for being here.
        But I believe Mr. Kelly has a question, as well.
        Mr. KELLY of Pennsylvania. Yes, Mr. Nunn, I want to thank
    you for bringing that forward.
        I have always believed so strongly in the pro-life issues,
    and I always hoped that the pro-choice people would choose
    life. I know there is times in people's lives when the
    opportunity to give birth is not in the right time at the right
    place. But if you can give people an option, if you can give
    people an option through adoption or foster care, I don't think
    there is any greater message that we can send to the world of
    who it is that we are. So thank you so much for doing that.
        And I don't want to get into a discussion about abortion
    because it becomes something that is a political football, just
    that the basics of my beliefs is that life should always be the
    first consideration. If we can give people the option, and we
    can incentivize that and help them to bear the burden of what
    it is that some people face, why don't we look that way? That
    would be an incredible opportunity for this nation to really
    shine a light on who it is that we are.
        So I really thank you for what you are doing, and I think
    all our members--well, sometimes we can't talk about it
    politically. I know in our hearts we know what is right. So
    thank you so much.
        And Chairman, thank you for allowing me to speak.
        Chairman SMITH. Anything for the chairman of the Tax
    Committee. This is important.
        So thank you, Mr. Nunn. We will now move on to recognize
    Representative Chuck Edwards, the gentleman from North
    Carolina.
        Mr. Edwards serves North Carolina's 11th Congressional
    District, and currently sits on the House Budget, T&I, and
    Oversight.
        And also, a late happy birthday. I know your birthday was
    yesterday. So please proceed, Mr. Edwards.

       STATEMENT OF THE HON. CHUCK EDWARDS, A REPRESENTATIVE IN
               CONGRESS FROM THE STATE OF NORTH CAROLINA

        Mr. EDWARDS. Thank you, Mr. Chairman, Ranking Member, and
    committee members. I really appreciate the opportunity that you
    are providing me and us to address a committee that we normally
    don't get an opportunity to have exposure with.
        I would like to take this opportunity to speak on a couple
    of issues that are important to the citizens of North
    Carolina's 11th Congressional District, and issues that I
    believe are critical for the workforce and the economy of our
    nation.
        Today I would like to bring to your attention an issue with
    unemployment law that has played a role in the $163 billion of
    unemployment fraud estimated by the Department of Labor since
    2020, and something that continues to plague business leaders
    in my district.
        In 2012 Congress established nationwide work search
    requirements for unemployment claimants. These requirements
    established the well-known mandate that a claimant must be
    available, able, and actively seeking work to be eligible for
    unemployment benefits. This provision has commonly been
    interpreted to mean a claimant must search for and accept work,
    but it leaves out the single most important part of a
    meaningful job search, and that is interviewing for the job.
        You see, many states conclude that if an unemployment
    claimant completes an application, that claimant has met the
    work search requirement. And if that claimant turns down work,
    they may no longer be eligible for unemployment benefits. But
    the fault in this process is if a claimant completes an
    application but does never appear or respond to a job interview
    request, they cannot be offered a job to accept or to turn
    down.
        I continue to hear from upset business owners who share
    their frustration with the constant scheduling of interviews,
    only for an applicant to not show up. For one business that I
    am aware in NC-11, and for one position alone, they had 30
    candidates apply and schedule an interview within a 60-day
    period, with only one candidate actually showing up to the
    interview. These no-call, no-show interviews are draining
    critical resources for small businesses, and are undoubtedly
    linked to the unprecedented unemployment fraud that we have
    seen over the last three years.
        Another employer in my district asks job applicants when
    they come in whether they would like an application or whether
    they would like a job. If they simply want to fulfill their
    weekly work search requirement, the claimant is given a yellow
    application, and the employer knows not to waste any time with
    that applicant. But if a claimant actually wants a job, they
    receive another color application so the employer knows to give
    them serious consideration for employment.
        It is time that we stand up for American small businesses
    and the integrity of our unemployment system. That is why I am
    working on a bill to finally codify showing up to an interview
    as a mandatory part of the job search while on unemployment,
    and to strengthen audit requirements so that we can better
    prevent ourselves against the further abuse of our unemployment
    system.
        As we approach the halfway point of the 118th Congress, I
    strongly encourage you to stand beside me for much-needed
    unemployment reforms to help more Americans experience the
    dignity of work, and to help employers find the workforce that
    they so desperately need.
        Lastly, I would be remiss not to take this opportunity to
    mention the importance of ensuring distressed census tracts,
    including brownfields and Superfund sites, be included in any
    extension of the Tax Cut and Jobs Opportunity Zone tax
    incentive, especially the rural Opportunity Zone tax incentive
    proposed in the recent American Families and Jobs Act tax
    package.
        Complex contamination footprints frequently leave
    brownfields and Superfund sites, like a particular property in
    my district, to sit undeveloped for decades. This vital
    inclusion of contaminated sites in any future Opportunity Zone
    programs will help to guarantee the tax incentive has the
    furthest reach possible and will achieve the goal of sparking
    economic development across all census tracts and rural
    communities that are in need.
        Thank you again for allowing me this opportunity to testify
    before you today.
        [The statement of Mr. Edwards follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. EDWARDS. And I yield the remainder of my time.
        Chairman SMITH. Thank you, Mr. Edwards.
        I am pleased to recognize Congresswoman Jenniffer Gonzalez-
    Colon, the gentlelady from Puerto Rico.
        Mrs. Gonzalez-Colon is the delegate from Puerto Rico, the
    first woman to do so. And she was previously the youngest
    member ever elected to serve in the Puerto Rico House of
    Representatives.
        So it is a pleasure to have you before our committee.

     STATEMENT OF THE HON. JENNIFFER GONZALEZ-COLON, A DELEGATE IN
               CONGRESS FROM THE TERRITORY OF PUERTO RICO

        Mrs. GONZALEZ-COLON. Thank you, Mr. Chairman, and thank
    you, all members of this committee, for having us today, and
    for the opportunity to discuss how this committee can have an
    important impact in economic growth and development of the
    island.
        Early this year I reintroduced H.R. 3146, a bipartisan,
    bicameral legislation that will modify the amount of money
    transferred to Puerto Rico and the U.S. Virgin Islands from the
    excise taxes collected on rum that is produced in or imported
    into the rest of the United States from the two U.S.
    territories.
        Puerto Rico's rum industry is one of the major drivers of
    our economy, producing more than 70 percent of the rum that is
    consumed in the United States and 80 percent of the rum that is
    consumed around the world. It results in more than $330 million
    for Puerto Rico every year, which has been vital to supporting
    critical services including health care, education, public
    safety, and environmental, and other conservation initiatives.
        Traditionally, excise tax collections on imported rum have
    been transferred to Puerto Rico and the U.S. Virgin Islands at
    the rate of $13.25 per proof gallon. However, only $10.50 per
    proof gallon is on the permanent law, which--the remaining
    $2.75 per proof gallon, requiring periodic reauthorization by
    Congress, a practice that has been taking place for the last
    100 years.
        My legislation makes permanent the $13.25 per proof gallon
    to be covered by law, eliminating uncertainty that both
    territories have experienced, including funding cliffs on
    several occasions, and ensuring resources continue reaching our
    communities and enhancing our long-term sustainable economic
    growth.
        This legislation will also require that a portion of the
    funds be transferred to the Conservation Trust on the island.
        Congress last extended the rum cover over for 5 years as
    part of the Bipartisan Budget Act of 2018, which expired in
    December 2021. As such, I ask you consider attaching my bill to
    the forthcoming disaster relief legislation or any base bill.
        As the Congressional Task Force on Economic Growth in
    Puerto Rico made clear in this recommendation to Congress, and
    I quote, ``Failure to extend the provision will cause harm to
    Puerto Rico's fiscal condition at a time when it is already in
    peril.''
        Another bill is H.R. 376, the Puerto Rico Film, Television,
    and Theater Production Act. The IRS incorrectly considers
    Puerto Rico as a foreign jurisdiction for purposes of federal
    incentives available to producers of films, television shows,
    and theater performances, making this incentive unavailable for
    works produced by American taxpayers in Puerto Rico.
        Another bill is H.R. 4026 that will make available in
    territories certain tax credits and deductions for the expenses
    incurred in complying with the Americans with Disabilities Act.
    That law allows a deduction for expenses incurred in removing
    barriers and making alterations to make businesses, facilities
    more accessible to people with disabilities, and for the
    elderly.
        To help businesses comply with these requirements, current
    laws allow small businesses to take credit on federal income
    tax return if they incur it for removing architectural
    communication, physical, or transportation barriers that
    prevent a business from being accessible or usable by people
    with disabilities. Although the ADA is applicable in the
    territories, all these credits and deductions are not available
    to the territories, as well. H.R. 4026 seeks to address this
    situation and improve the quality of independent life of people
    with disabilities in the territories by making the credits and
    deductions available to taxpayers in the territories.
        I will be submitting an addendum to this writing that
    includes some of other bills such as H.R. 378, which will make
    all Puerto Rico eligible for Opportunity Zones, and H.R. 447,
    which will incentivize domestic medical manufacturing in
    economically distressed areas across our nation, which is a
    bipartisan and bicameral bill.
        I will close by marking an open invitation to the committee
    to come to Puerto Rico to examine the impact of all this
    legislation under your jurisdiction, and hear directly from
    residents and stakeholders about this.
        [The statement of Mrs. Gonzalez-Colon follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mrs. GONZALEZ-COLON. Thank you, and I yield back.
        Chairman SMITH. Congresswoman, thank you for your testimony
    before our committee. Thank you for your hard work, dedication,
    and advocacy for the good folks of Puerto Rico.
        I now recognize Representative Burgess Owens, the gentleman
    from Utah. Mr. Owens is a former NFL draft pick, and was a
    Super Bowl champion for my team's rival, the Oakland Raiders.
    He is founder of Second Chance for Youth, a non-profit
    dedicated to helping troubled and incarcerated youth.
        Mr. Owens.

       STATEMENT OF THE HON. BURGESS OWENS, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF UTAH

        Mr. OWENS. Thank you so much, Chairman Smith, Ranking
    Member Neal, and members of the committee. Thank you for the
    opportunity to testify today. I am here today to support
    legislation which is in the jurisdiction of both this committee
    and the Committee on Education and Workforce on which I serve.
    I appreciate the time provided so I can be heard on this bill.
        I am here today to support H.R. 531, Educational Choice for
    Children's Act, or ECCA, which I introduced along with
    Congressman Adrian Smith of Nebraska. I first introduced this
    bill in the 117th Congress with our late colleague and friend,
    Jackie Walorski. Jackie was a joyful champion of policies to
    ensure every child had the resources and education they needed
    to succeed. This bill will be a fitting tribute to her legacy.
        As the child of two educators, I was raised in a family who
    believed strongly in the gift of education, its power to create
    greater socioeconomic mobility by offering parents and students
    more educational options to increase the opportunities to
    succeed, to empower the generations to come, to make their
    American dream a reality.
        Our bill is based on popular state-level policies which has
    been proven to work, like the Children First Education Fund in
    my home state, and is designed to address the critics of direct
    government funding of scholarships. Because ECCA provides a
    refundable tax credit to support scholarships, it diverts no
    existing funding away from public school systems. It can be
    compared to other existing tax programs such as Low-Income
    Housing Tax Credit and New Market Tax Credit.
        In order to ensure that no governmental participation in
    rewarding scholarships for attendance at religious schools,
    ECCA tax credits and scholarships are directed through
    independent scholarship granting organizations, or SGOs. These
    SGOs will both allocate the non-refundable credits to donors,
    and select families to receive the scholarships.
        To ensure students in all parts of the country, not just
    cities and suburbs, can participate, SGOs may also offer
    assistance to supplemental educational assistance and supplies
    for families in need, not merely school's tuition.
        Ignorant and free can never be, to paraphrase, speaks to
    the understanding of our founders of the imperative nature of
    education. The right to life, liberty, and pursuit of happiness
    summarizes our nation's mission statement and the visions of a
    Heavenly Father that puts value on every life, regardless of
    race, creed, color, or zip code. It is time for us to look for
    innovative ways to ensure that every child has access to our
    nation's promise, regardless of zip code, income status, color,
    or creed.
        Unfortunately, for too many and for far too long, our
    children have been denied these rights. In a 2017 report out of
    the state of California, 75 percent of the black boys in the
    state of California could not pass standard reading and writing
    tests. In Baltimore, across 23 schools, 0 percent of students
    showed proficiency in math. In Memphis, Tennessee this year, 75
    percent of third graders were not proficient in reading. Only
    one percent was held back.
        Not being able to read, write, think, or to believe in our
    country that thrives on success, hard work, merit, risk,
    failure, and second chances makes the pursuit of life, liberty,
    and the pursuit of happiness impossible. We are fighting today
    for the heart and soul of our nation. We cannot accept that
    intellectual and educational failure of our own children is the
    norm.
        This legislation gives a win-win in this approach, an all-
    in in this process, a win for the parents and particularly the
    poor minorities, to see their child reach their potential; a
    win for educational communities to allow competition and
    meritocracy, incentivizing innovation increasing value; a win
    for the caring citizen donors with tax write-offs; and a win
    for our most precious product, our children, to become happy,
    visionary, and productive citizens for our communities and our
    country.
        I look forward to working with our colleagues on both sides
    of the aisle to give these options of H.R. 351 to parents and
    children throughout our country. Thank you.
        [The statement of Mr. Owens follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. OWENS. And I yield back.
        Chairman SMITH. Thank you.
        I would like to recognize the gentleman from Nebraska, Mr.
    Smith.
        Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
        Just briefly, thank you, Mr. Owens, for your work on this
    bill. Obviously, I am a little biased, as well, in favor of the
    legislation. But thank you for emphasizing students, the
    achievement of students and the empowerment of families.
        And in so many communities around the country, I have been
    pleased to see the engagement from stakeholders around the
    country, namely students who are gathering, who are telling us
    themselves, with their families, what the needs are. And I am
    glad that we are able to work together on these solutions.
        Mr. OWENS. Thank you. I appreciate it.
        Chairman SMITH. Mr. Owens, education freedom is an
    important priority for this committee. And we, over the next
    couple of months, will be having hearings in regards to this,
    and hopefully your legislation will be a part of that. So thank
    you for being here today.
        Mr. OWENS. Thank you, Chairman. I appreciate it.
        Dr. FERGUSON. Mr. Chairman.
        Chairman SMITH. Yes, Mr. Ferguson.
        Dr. FERGUSON. Thank you.
        Mr. Owens, thank you for bringing this forward. I think
    what we have seen over the past couple of years is that parents
    want a say in their children's education, okay? And that is
    going to take a lot of different forms. And this bill provides
    some options that parents don't currently have right now.
        I think it is important to do this, because when you tell
    parents that they aren't in charge of their children's
    education it sends the wrong signal, okay? And it just flies in
    the face of the things that we love the most, which are our
    children. And so I applaud you for bringing this forward.
        You know, I am glad to hear the chairman say that, as we
    will make this a priority and move forward, that we hope that
    this will be part of that. It certainly seems like something
    that we can get behind and support.
        So thank you for bringing it forward, Mr. Chairman. Thank
    you for your consideration of it.
        Chairman SMITH. Thank you, Mr. Ferguson.
        Mr. OWENS. Thank you.
        Chairman SMITH. I now will recognize Representative Dan
    Meuser, the gentleman from Pennsylvania.
        Mr. Meuser is the former secretary of revenue in
    Pennsylvania. So he knows the responsibility of tax collection.
        So I am pleased to have you before the Ways and Means
    Committee.

    STATEMENT OF THE HON. DAN MEUSER, A REPRESENTATIVE IN CONGRESS
                 FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. MEUSER. Thank you, Chairman. Thank you very, very much.
    And I also want to thank the Ranking Member Neal and all
    members of the House Ways and Means Committee for giving me
    this opportunity to testify here.
        I would like to discuss my bill, the USA Batteries Act,
    H.R. 1594, which would repeal a recently imposed tax on
    domestic manufacturers, which, of course, hurts good-paying
    American jobs and provides an unfair advantage to, frankly,
    cheap imports from countries with very weak environmental and
    labor laws.
        The United States is the world leader currently in lead
    battery manufacturing. Unfortunately, the recent change to tax
    policy has given foreign manufacturers of such lead batteries
    an unfair advantage. As part of the Infrastructure Investment
    and Jobs Act, a Superfund tax was levied on 42 chemicals,
    including lead oxide, sulfuric acid, and antimony, which are
    the primary inputs for lead batteries. These excise taxes,
    which had not existed for more than 25 years, suddenly returned
    at twice the previously enacted level alongside the Superfund
    chemical tax, which has forced American-led battery
    manufacturers to pay significantly higher prices for raw
    materials than foreign competitors.
        Mr. Chairman, this is squeezing domestic manufacturers,
    which, of course, forces Americans to buy from countries that,
    frankly, have very questionable labor laws.
        Additionally, these manufacturers are also faced with
    unprecedented economic pressures that I don't need to list
    here, supply chain disruptions and workforce challenges.
        Lead batteries are used in everything from vehicles,
    telecommunications, defense, energy generation, and the list
    goes on.
        The battery industry is composed of many small businesses,
    employing 38,000 Americans across 38 states, with an annual
    economic output of $33 billion. Pennsylvania's 9th
    Congressional District that I represent is home to two leaders
    in lead battery--in the lead battery industry, East Penn and
    EnerSys, which, combined, employs more than 20,000 in my
    district in Pennsylvania. So battery manufacturers, as well,
    can be found across the country in Missouri, Tennessee, and
    Washington.
        Lead batteries are a sustainable, perhaps even renewable
    energy source, as 99 percent of lead batteries are recycled for
    use in new batteries or other products. These batteries also
    provide 60 percent of the rechargeable battery market, and are
    often used in a variety of green applications.
        So we must take steps to ensure that the U.S. battery
    manufacturers have a fair playing field compared to foreign
    manufacturers that are mainly located in China. Currently,
    China accounts for 45 percent of the world's total production
    capacity of lead batteries, and 75 percent of the world's total
    production of lithium ion batteries. Placing burdens on
    American battery manufacturers puts us at a distinct
    disadvantage with our foreign counterparts, obviously, causing
    the U.S. to cede ground in yet another important industry.
        To correct this disparity, I respectfully ask the Ways and
    Means Committee to advance the USA Batteries Act, which would
    simply eliminate the Superfund chemical tax on lead oxide,
    antimony, and sulfuric acid, the main inputs in lead batteries.
    This would make the raw materials and batteries more affordable
    for American manufacturers, doing away with the unfair
    advantage, as stated, for foreign counterparts.
        In addition to my USA Batteries Act, I would be remiss if I
    did not mention the need to restore full R&D tax credit. In
    2021 alone, the U.S. battery industry invested $113 million in
    R&D to pursue the next generation of battery technologies. I
    was glad to see the restoration of the full R&D tax credit,
    including the Ways and Means-passed Build It in America Act,
    and encourage my colleagues to continue efforts to restore this
    important provision for small businesses.
        Additionally, bonus depreciation is set to decrease 20
    percent annually through 2027, as you are well-aware. And as
    you also know, we need to act soon because private-sector
    innovation, especially within the small business economy, is at
    stake, and could be hamstrung if we--if they are not able to
    fully invest in R&D.
        So I want to thank you very much for this opportunity to
    testify, and I would certainly be happy to answer any
    questions.
        [The statement of Mr. Meuser follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. MEUSER. Thank you, Mr. Chairman.
        Chairman SMITH. Thank you, Mr. Meuser. We appreciate your
    testimony in regards to a lot of the tax priorities that we are
    trying to hopefully get past the finish line before the end of
    the year.
        But I appreciate all the members of this panel. We will now
    dismiss it and then move to panel three.
        [Pause.]
        Mr. THOMPSON of California. Mr. Chairman, would it be in
    order to move to approve Mr. LaMalfa bill by acclamation?
    [Laughter.]
        Chairman SMITH. You know, it is a priority, but I don't
    think that would be in order at this moment.
        Mr. THOMPSON of California. All right.
        Chairman SMITH. We will now proceed, with that note, to Mr.
    LaMalfa.
        You see that you have some friends on both sides up here.
        But Mr. LaMalfa, he manages his family-owned farming
    business in Northern California, and is a former member of
    the--and he is leaving. [Laughter.]
        Mr. THOMPSON of California. He heard nothing that we said
    about him.
        [Pause.]
        Chairman SMITH. He is a former member of the California
    State Assembly.
        And you can proceed when you are ready.

        STATEMENT OF THE HON. DOUG LaMALFA, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. LaMALFA. Thank you, sir. I was just at a family farm
    conversation that was going on as I was coming up here, so my
    paperwork was in a different spot.
        So thank you, Mr. Chairman, Ranking Member, and our
    committee members. I really appreciate the opportunity to sit
    down with you and talk about the many priorities that we all
    have here today, and I know that the committee has an intense
    scope of work to take on. So I do appreciate this time you have
    allotted for us here.
        So I want to talk to you about a really important piece of
    legislation for not just myself, but for my neighboring
    colleagues and others around the country that have added on
    from the initial bill that I introduced with my colleague, Mr.
    Thompson. And it really boils down to H.R. 4970, that we are
    entitled to Protect Innocent Victims of Taxation After Fire
    Act. It has been drafted to halt the imminent taxation of
    disaster aid for wildfire victims and survivors of which we
    have had so many cases of this in northern California, in my
    district and Mr. Thompson's district, and some of our other
    neighbors, as well, in the West.
        So we have these amazing folks that I get to represent,
    these resilient survivors of multiple wildfires across Northern
    California. From 2015 to 2018 these fires were sparked, in some
    cases, by electrical transmission lines that have destroyed
    nearly 30,000 structures, injured hundreds of residents, and
    killed more than 130 of our constituents.
        In the aftermath, survivors received disaster assistance
    from FEMA. So many on this committee probably know under the
    Internal Revenue Code of IRS, Section 139, this assistance is
    tax free. In fact, the tax code offers a multitude of
    additional forms of tax relief to disaster for victims,
    including Section 121 for excluding property losses, Section
    165 for deducting casualty losses, Section 1033 for deferring
    involuntary conversions, Section 213 for deducting personal
    medical care costs. Those are a few, but I think you can see
    that the current established intent of the U.S. tax policy is
    to exclude disaster losses from taxation.
        So I bring up these other sections because survivors of the
    fires from 2015 to 2018 I mentioned earlier were also
    recipients of disaster aid payments from a special settlement
    trust created in 2020 when the power utility who caused these
    wildfires ultimately went bankrupt. Now, unlike disaster aid
    from FEMA, payments from this settlement are interpreted by IRS
    to be fully taxable as income. Fire victims will be taxed on
    these awards they have received from the utility is the way--is
    the direction things are going to go here.
        And on top of that, the real insult to the injury, I guess,
    would be, despite court-approved lawyers receiving 20--between
    25 and 33 percent of each payment of these awards, the
    recipients will pay the amount on the lawyers' income on this.
    They will pay the full amount on the lawyers' portion of the
    income. Unbelievable. Can you imagine what that is like for the
    fire victims?
        So even then, the effects of this do not stop at the--they
    do not end at the taxation component. If the disaster aid is
    registered as income, survivors could also face a significant
    loss of federal benefits. Supplemental security income, SNAP
    benefits, WIC benefits could all be almost eliminated in nearly
    these cases if they are interpreted as that their income is too
    high to now receive these.
        Health care subsidies would be dramatically reduced for
    those on the lower-income scale. And believe me, many of these
    folks living in this area, these fire victims, are not on the
    high-income scale. They are in homes that they could afford to
    live in that are, you know, 50 years old or 70 years old that--
    they are going to have a hard time, very hard time replacing,
    especially since many of them were under-insured for modern
    building costs.
        So veterans' benefits could be--especially on co-pays for
    prescriptions, those could be curtailed. If there was a
    possibility of seeking federal student loan, they will have to
    some--they will have to look somewhere else.
        So if this disaster aid is treated as income, the federal
    government's entire social safety net will bail out on these
    survivors, again, many of them who are on the low-income scale.
        So it is not just exclusive to northern California with my
    district and my neighbor's districts there. It has happened
    again in both Colorado and in Oregon. Protection offered by
    H.R. 4970 extends the guaranteed relief and ease of mind to
    wildfire survivors anywhere in the U.S.: California, Colorado,
    Oregon, New Mexico, Utah, Arizona, Texas, and even now Hawaii.
        So it is a pretty simple piece of legislation. These
    payments, though not coming from FEMA, are disaster aid.
    Survivors don't have the resources to navigate our tax code.
    They deserve the simple, singular tax exclusion given to all
    other forms of disaster aid.
        Notably, the bill includes a no double benefit clause,
    which will allow survivors with the resources or knowledge
    necessary to use existing tax benefits to do so.
        Now, I do want to put a timeline on this is that IRS did a
    good and helpful thing in that many of my counties in
    California that have suffered disaster, the people in those
    particular counties were designated by the IRS delayed their
    filing from April 15th until October 15th this year. So there
    are many folks that are awaiting the legislation here, hoping
    that this could be complete before they have to decide upon
    filing October 15.
        Are they going to have to include this benefit as income,
    or will it be non-taxable? So if they don't include it and it
    ends up remaining taxable, then they are going to have
    penalties and interest and all that. And if they do pay it,
    then they will have to wait for a possible refund of that if it
    turns out to be a non-taxable event. So either way, you got
    folks who are really caught in the lurch on this thing with
    deciding.
        I appreciate that the IRS did indeed move that time back to
    October 15, but it would be really, really helpful for folks to
    be able to have this decided by October 15 in some fashion or
    another, so this committee listening to this today is very
    important to me, very important to those constituents.
        [The statement of Mr. LaMalfa follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. LaMALFA. And with that, I will yield there. So thank
    you, Mr. Chairman.
        Chairman SMITH. We are glad to have you here.
        Mr. Thompson from California.
        Mr. THOMPSON of California. Thank you, Mr. Chairman.
        Mr. LaMalfa, thank you for bringing your priority bill
    before our committee. And as you know, I share in this with
    you.
        This committee and the House passed this bill in the last
    Congress. It was my bill then, and now with the majority change
    it is your bill this time. We worked well together on that last
    time. And as I mentioned, it is a priority for both of us this
    time. And I have talked to the chairman, the ranking member,
    and I think you have tremendous support on this committee.
        This is a tragedy that has been multiplied for thousands of
    constituents of ours and other districts across our great
    country. The idea that you would lose a loved one, you would
    lose your business, you would lose your house, and then you get
    a settlement that doesn't even pay to make you whole, and then
    they tax you for that, it is absolutely outrageous. And we owe
    it to every American to address this.
        So thanks for bringing it before us, and I will keep
    pushing on the committee. And I know you will, too.
        And thank you, Mr. Chairman, for your commitment to work on
    this.
        Mr. LaMALFA. Thank you so much, Mr. Thompson. It has been a
    real pleasure to work with you on this.
        And as you know, we have 85 deceased people in the Paradise
    Camp Fire. And now, as we take on the situation with the
    horrible tragedy we have in Lahaina here, that I hope we can
    get this rectified for whatever the effects will be.
        So thank you so much, committee members, Mr. Chairman. I
    appreciate it.
        Chairman SMITH. Thank you, Mr. LaMalfa. I do know Mr.
    Thompson and also Mr. Steube definitely care about the disaster
    tax relief, and it is something that we hope to get resolved
    before the end of the year.
        I now recognize Dr. Julia Letlow, the gentlelady from
    Louisiana. Ms. Letlow is the first woman to represent Louisiana
    in the House in 30 years, and is the former director of
    education and public safety at Tulane University School of
    Medicine.
        Ms. Letlow.

        STATEMENT OF THE HON. JULIA LETLOW, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF LOUISIANA

        Ms. LETLOW. Thank you, Mr. Chairman, for having me, and
    Ranking Member. It is an honor to be here with you all.
        I usually don't speak extemporaneously at things like this,
    but I just wanted to come and try to share my heart and the
    heart of my constituents.
        I serve 24--we call them parishes in Louisiana instead of
    counties, and that is a lot of geography to get to. And I have
    to share with you that wherever I go, wherever small town I am
    in, I hear about this complaint more than anything else, and it
    is the windfall elimination provision and the government
    pension offset.
        And so what I have learned in my brief tenure here, a
    little over three years, is that sometimes we can implement
    things with the most wonderful intentions at heart, but
    sometimes those lead to unintended consequences that we never
    saw coming. And so I would like to share with you some of the
    stories that I hear from my constituents. And these are public
    servants, and it affects 17 states across this country. But in
    Louisiana alone it is close to three million people.
        So when you think about public servants, I think about my
    teachers who are teaching our children, I think about our
    firefighters or police officers. They are not bringing home
    huge salaries, so you can imagine their retirement pension is
    not this huge number. These are not wealthy executives coming
    to me, sharing their heart with me. These are people like
    Kevin, who is a firefighter for his whole career. And you can
    imagine, so this penalty has been in place for as long as I
    have been alive, a little over 40 years.
        So he comes to me. He was making close to 20 to $30,000 a
    year annually for his salary. So he did the right thing for his
    family. He sought supplemental income. He went to the private
    sector and also worked, and put in 40 quarters, paid into
    Social Security the whole time. And so then he goes to retire,
    and goes to collect his benefits from Social Security, and
    finds that they have been slashed by 60 percent. These are our
    public servants.
        I would also like to share with you a handwritten letter
    that I received from Carla from Bunkie, Louisiana. She also
    included a picture of her husband that she lost at 60 years old
    to cancer. Now, this hit home to me, because I am also a widow.
    And when you are widowed, the first thing that comes to your
    mind is how am I going to support my family?
        And so, because Carla chose in her life to be a teacher in
    the public school system, she gave of her time to teach our
    children. Simply because of that, she was not eligible to
    receive two-thirds of her survivor benefits from her husband's
    death through Social Security. Two-thirds. Carla would have
    done better by just staying at home and not serving our
    children.
        I can't tell you--that is 2 of the 40,000 Louisianans and
    the 52,000 alone--those are all the stories that I hear of
    every day. And so I just want to share them with you. I can
    share countless others.
        But I also want to work with you to try to find a solution.
    I know that something that we implemented over 40 years ago,
    that when we put our brilliant minds together, that we can come
    up with a solution to fix this for the people that are
    suffering, truly. And so I will do anything, please just let me
    know. But you all have the means and the and the wherewithal to
    fix this for my constituents and for countless others.
        And I know it doesn't affect every state, but Americans are
    hurting. And that is--I believe they send us to Congress to fix
    problems just like this. And so thank you for giving me the
    time to share my heart and share the heart of countless other
    Louisianans.
        And if I may transition to one other thing, I also want to
    plug this amazing bill, the Educational Choice for Children Act
    from Adrian Smith and Burgess Owens. I am so excited about this
    bill. It is the next step for the parents' bill of rights
    because it encourages school choice for our parents and gives
    that tax credit. So I also wanted to plug that coming from--
    higher education is my background, and I don't understand why--
    in higher ed we attach money to the student, why are we not
    doing that for elementary education? So I also wanted to plug
    that.
        I forgot to mention too that I also wanted to plug H.R. 82.
    It goes back to WEP and GPO. So we finally just got 291
    cosponsors to that bill. So I am hopeful that maybe you will
    bring it up in this committee. Congressman Garret Graves and
    Congresswoman Abigail Spanberger are leading that charge. I
    know my constituents and I would be so grateful if you would
    also consider H.R. 82.
        [The statement of Ms. Letlow follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. LETLOW. With that, I yield back, Mr. Chairman. Thank
    you.
        Chairman SMITH. Thank you, Dr. Letlow. I received a text
    message from Congressman Graves telling me of the 290th
    cosponsor, so you are at 291.
        Ms. LETLOW. Yes, sir.
        Chairman SMITH. You are updating me more than he is.
        I would love to recognize the ranking member, Mr. Neal.
        Mr. Neal. Well, I hope the chairman is going to take up the
    gentlelady's suggestion on this legislation. We have worked on
    this for a long time.
        You really did a good job. It is complicated.
        Ms. LETLOW. I know.
        Mr. NEAL. I mean, it is really complicated.
        Ms. LETLOW. Yes, sir.
        Mr. NEAL. It is important to recognize that many of the
    employees that you have described who are caught in this web--
    --
        Ms. LETLOW. Right.
        Mr. NEAL [continuing]. Previously, they and their
    sponsoring organizations opted for that provision of not paying
    into the Social Security trust fund----
        Ms. LETLOW. Right.
        Mr. NEAL [continuing]. Only to discover at a later stage of
    life, as you have accurately described----
        Ms. LETLOW. Right.
        Mr. NEAL [continuing]. That all of a sudden, they are
    paying into it.
        Ms. LETLOW. Right.
        Mr. NEAL. So, I think it is fair to say that there are some
    of us who have earned a Ph.D. on this very issue because we
    have gone at it for so long.
        Ms. LETLOW. That is right.
        Mr. NEAL. Mr. Brady and I were really close about seven
    years ago. I thought we had a solution up until the very
    morning of the vote on the House floor on a Friday, when he
    came to me and said, ``Look, Rich, I think I have got to pull
    this down today. I think it might get defeated on the House
    floor.''
        Ms. LETLOW. Right.
        Mr. NEAL. Mr. Larson has done great work----
        Ms. LETLOW. Sure.
        Mr. NEAL [continuing]. On this issue. It is a geographic
    issue, rather than a philosophic issue.
        Ms. LETLOW. Right.
        Mr. NEAL. And Mr. Gonzalez is shaking his head because he
    is from Texas. [Laughter.]
        Mr. NEAL. Mr. Higgins, Mr. Larson, myself, the chairman,
    California, it is a substantial issue, and we would like to
    address it.
        Part of it is the complexity of what has happened in the
    congressional scoring system.
        Ms. LETLOW. Right.
        Mr. NEAL. My colleagues on the other side, it would be
    hard, I think, to get them to vote for something that called
    for a tax increase down the road. And on our side, scoring,
    now, these are both esoteric terms--scoring on our side
    conceivably could be used as the argument that somehow we were
    in favor of a cut in Social Security. And therein lies the
    dilemma.
        Ms. LETLOW. Right.
        Mr. NEAL. So we have gone back and forth on this for a long
    time. Your perspective is very helpful. We want a solution. It
    is likely to be something a bit different than what you have
    described. And at different intervals Mr. Pascrell has been a
    terrific advocate on this issue, but there is pretty broad
    bipartisan support based on geography for finding a solution.
        And I hope that maybe some of us could put philosophy to
    the side and try to address this, because in both instances
    that I previously described these are changes that would occur
    75 years from now, according to the congressional scoring. But
    I think that the enmity that exists in the institution today
    gets in the way of what could be a pretty good policy solution.
        Massachusetts is part of the challenge here. We want to be
    helpful. I have filed legislation that Mr. Brady at least
    quietly supported. He filed legislation that I quietly
    supported. The problem was trying to get somebody to publicly
    support it. But we do want a solution, and I invite you to
    participate with us.
        Ms. LETLOW. Absolutely.
        Mr. NEAL. And I think it would call for all of us to sort
    of, as it relates to the prospects of increases or cuts, kind
    of lower our voices and try to find a solution.
        We have had the Social Security actuaries in, which might
    be a good thing for the committee to do again, so that we can
    really drill down on what the solution would be. We also
    thought that at one juncture that we had a solution from the
    Social Security actuaries, where there would be no cuts and
    there would be no tax increases.
        Ms. LETLOW. Right.
        Mr. NEAL. So I invited the gentlelady, who did a really
    good job, and I understand the extemporaneous manner in which
    you offered it, because it was really well done. We know the
    problem, and the solution should not be that elusive. So, I
    thank you.
        Ms. LETLOW. Thank you, Ranking Member.
        Chairman SMITH. I thank the ranking member. I would have to
    agree with almost everything you just said. So that is a good
    place for us to be.
        But I also agree that no American should be penalized
    because of their public service or participation, and so a
    Social Security replacement program.
        So, Dr. Letlow, we appreciate you being before us, and it
    is something that this committee is determined to figure out.
    So thank you.
        Ms. LETLOW. Thank you for your hard work. I appreciate your
    time.
        Dr. FERGUSON. Mr. Chairman.
        Chairman SMITH. Mr. Ferguson, yes.
        Dr. FERGUSON. May I make a comment on this?
        Chairman SMITH. You should, you are the chair of Social
    Security.
        Dr. FERGUSON. And I am sure my colleague, Mr. Larson, may
    want to weigh in on this, as well. And----
        Mr. LARSON. Oh, yes.
        Dr. FERGUSON. Dr. Letlow--it is nice to call you that--this
    is a complex issue. And for--there are two major issues that I
    see here that somehow or another we have got to navigate.
        The first one the ranking member touched on, which was the
    ridiculous scoring rules that we have put in place for
    ourselves that really prohibit intellectually honest
    conversations from occurring because things get labeled
    something that they are not. And I think, from--if we could do
    one thing that would absolutely change the way that this place
    worked and help our country, it would be to change the budget
    process and the rules that we operate by. It is the most broken
    process in America, hands down. That is over there.
        The one thing that I would say is that when we look at
    this, we can't just address this issue in a vacuum. It has to
    be addressed within the context of all of Social Security. And
    so, you know, I hope, you know, as we move forward, that we get
    the chance to talk about this in the totality of really saving,
    you know, the most valued program in America right now.
        The real challenge that we have is, as you know, is that we
    keep running out of not only time but money to solve these
    issues. We just simply--you know, if you look at it, if you
    look at our national debt right now, you look at our spending,
    all of those things, the--you know, the constrained revenue
    coming in and with relation to Social Security, we have got to
    look at this in the context of the whole program.
        So I agree with the chairman that it is not fair to
    penalize our fellow Americans, but we don't want to penalize
    all Americans by just addressing this. We want to do it in the
    context of the entire Social Security system.
        With that, Mr. Chairman, I yield back.
        Chairman SMITH. Mr. Larson.
        Mr. LARSON. Thank you, Mr. Chairman.
        Thank you, Representative. I so appreciate your compassion
    and your enthusiasm to fix this problem. It probably might
    surprise you to know that Congress has not enhanced Social
    Security in more than 52 years. In fact, Richard Nixon was the
    president the last time the United States Congress enhanced the
    program.
        Now, this is something that can't be done through executive
    order, or otherwise President Biden, who has called for the
    direct repeal of both GPO and WEP, this would be done. And it
    is not anything that can be adjudicated by the Supreme Court.
    It is Congress's responsibility. And imagine, how do you
    explain to the people in Louisiana that, yes, we just didn't
    vote on it.
        Now, in--I believe in your district, what, you have
    something like 160,000 Social Security recipients? So if you
    look at 160,000 people who have not seen their benefits
    enhanced in 52 years, and they turn to you, and then, when you
    look at some of the other issues--most notably unfairly, as you
    so well articulated--about that spouse, an inability to receive
    what her husband paid into the program--these are earned
    benefits that people paid for. These are not entitlements,
    these are earned benefits. And it is Congress's responsibility
    to vote on it. What an incredible thing to ask Members of the
    United States Congress to do, to actually vote. If you got a
    better idea, put it out there. This is what we are all about.
        This is the best economic--Social Security is the best
    economic development program that we have. Imagine getting a 2
    percent increase in Social Security for everyone in your
    district, something that hasn't been done in 52 years. Some
    will say, well, in 1983 we changed it. Oh, yes, we did. In 1983
    we made it more solvent, but we did so by raising the age,
    which cut benefits. So if people are living longer, does it
    make any sense to cut their benefits so that they have less to
    live on?
        And here we have this economic development plan, where
    every congressional district is advantaged by it. Imagine all
    the recipients in your district just on repeal of WEP and GPO.
    But also, there are five million fellow Americans who worked
    all their lives, paid into the system, get below poverty level
    checks while we are talking about giving out checks to
    billionaires, tax deductions to billionaires. And your
    neighbors and mine, the people we go to church with, family
    members get zip.
        Your bill is well welcome. All of these things need to be
    paid for, and they should be. The President has proposed we
    lift the tax, the cap on people making over 400,000. Wow. They
    would then be paying at the same rate that people who are
    making 30 or 50,000 are paying. But imagine that. Now, how much
    is that? How many Americans does that mean that would impact?
    Six-tenths of one percent. And yet Congress has not voted.
        This is a simple matter. You don't want to hurt the trust
    fund for everybody else, which is why states that aren't
    operating under this penalty, that is where they are coming
    from. You are going to decrease benefits to my people. So we
    need to come together. You have got the right approach and the
    passion. I hope you will look at Social Security 2100 and
    reform Social Security so that all recipients--this isn't about
    Democrats or Republicans or unaffiliates. And across the board
    80 percent Democratic, 70 percent unaffiliated, 68 percent
    Republicans enthusiastically support enhancing benefits.
    Because you know what? Social Security has never missed a
    payment. We don't have to go back to 1929. All we have to do is
    go back to 2008, 2009 to understand when people saw their
    401(k) become a 101(k). Social Security never missed a payment,
    not a pension, not a spouse, not a dependent, or a disability
    payment.
        Thank you for your support. I hope you will take a look at
    our bill. But more importantly, I hope Congress will vote.
        Sam Johnson on this committee, all he asked for was a vote
    on his bill and he couldn't get it, either. We need to vote in
    Congress. We can't turn into the Senate that doesn't--that
    routinely turns down over 400-plus bills that the House passes,
    or doesn't take up any legislation.
        Thank you again. You deserve to be commended.
        Chairman SMITH. Thank you, Mr. Larson. We would never want
    to turn into the United States Senate by any means. [Laughter.]
        Chairman SMITH. Dr. Letlow, thank you again for being with
    us.
        I now recognize Representative Vincente Gonzalez, the
    gentleman from South Texas. Mr. Gonzalez is a lifelong resident
    of South Texas and a member of the House Financial Services
    Committee. He is also the chairman of the Congressional Oil and
    Gas Caucus.
        Please proceed.

      STATEMENT OF THE HON. VICENTE GONZALEZ, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. VICENTE GONZALEZ of Texas. Thank you. Thank you, Mr.
    Chairman and Ranking Member, for holding today's member
    hearing. It is very important, and it is great to hear from
    other members that have similar issues.
        I appreciate the opportunity to speak before the committee
    on legislation that Congressman Carey of Ohio and I recently
    introduced, H.R. 5073, the Promoting Domestic Energy Production
    Act. This bipartisan piece of legislation would fix a provision
    within the Inflation Reduction Act's new book minimum tax to
    allow intangible drilling and development costs, or IDCs, to be
    considered when computing adjusted financial statement income.
        It may sound complicated, but it is really very simple.
    IDCs have been included in the U.S. tax code since its
    inception, due to the recognition that oil exploration and the
    development of wells are capital intensive and have significant
    risks involved.
        The domestic oil and gas industry requires continuous
    financing of labor, equipment, and the advancement of
    technologies. For example, when an operator drills a well,
    about 85 percent of the costs are intangible, with the largest
    share consisting of labor. IDCs allow for independent U.S. oil
    and gas companies to recover costs which will be reinvested in
    their next operation. Tax deductions for IDCs are not subsidies
    for oil and gas companies or anyone else, as some may believe.
        Let me be clear. IDCs do not reduce total tax paid over the
    lifetime of the operation. In fact, they allow for oil and gas
    companies to recover their intangible costs more quickly,
    thereby freeing up funds to reinvest in development, which
    helps create more American jobs.
        There is a long history of bipartisanship support for IDCs
    as important tax tools to encourage domestic energy production.
    We need to remember that energy security is American security.
    We cannot have what happened to Europe recently and is
    happening now ever happen to us here. Even as we continue to
    transition to cleaner and cleaner energy, we must be reliant on
    our own production, rather than foreign sources. And that means
    ensuring our domestic oil and gas production does not dwindle.
        Our country must be ready to face the energy challenges of
    the next few decades. And as President Biden himself
    acknowledged during his State of the Union recently, we are
    still going to need oil and gas for a while. That is some
    common sense. And this common sense bill promotes our nation's
    domestic energy production or capabilities, something many of
    us have called for in the wake of Russia's unprovoked invasion
    of Ukraine. This legislation ensures we keep and create
    American jobs, lower energy prices, and decrease our dependance
    on foreign energy.
        We aren't asking for a handout for the energy industry. We
    are asking for the energy sector to receive the same treatment
    as other capital-intensive industries. Not doing so puts
    American energy at a global disadvantage. Energy independence
    is a foundation of a strong nation and economy, impacting
    almost everything we do, making the issues of oil and gas
    industry face a matter of national security.
        I urge my colleagues on both sides of the aisle to
    cosponsor H.R. 5073, the Promoting Domestic Energy Production
    Act, to ensure domestic energy production can continue to
    nurture America to lead the world.
        [The statement of Mr. Vicente Gonzalez of Texas follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. VICENTE GONZALEZ of Texas. Thank you, and I yield back.
        Chairman SMITH. Mr. Gonzalez, thank you for being here. I
    appreciate the work that you have been doing with Congressman
    Carey of our committee, as well, and it was a pleasure to have
    your testimony.
        I now recognize Representative Trent Kelly, the gentleman
    from Mississippi. Mr. Kelly currently serves as assistant
    adjutant general for the Mississippi Army National Guard. He
    has received two Bronze Stars, among many other awards in his
    service.
        And it is a pleasure to have you before the best committee
    in Congress.
        Mr. KELLY of Mississippi. I think you have to be tough; I
    am surrounded by Gonzalezes from Texas. [Laughter.]

    STATEMENT OF THE HON. TRENT KELLY, A REPRESENTATIVE IN CONGRESS
                     FROM THE STATE OF MISSISSIPPI

        Mr. KELLY of Mississippi. Thank you, Chairman Smith and
    Ranking Member Neal, for the opportunity to speak in support of
    my bill, H.R. 1755, the Uzbekistan Normalized Trade Act.
        My bill would remove Uzbekistan from title 4 of the Trade
    Act of 1974--more specifically, the Jackson-Vanik amendment--
    and in turn, grant Uzbekistan permanent normalized trade
    relations with the United States.
        Originally, the Jackson-Vanik amendment was a provision
    regarding Jewish immigrants fleeing from the USSR. Because the
    Soviet Union no longer exists, the Jackson-Vanik amendment is
    outdated and needs to be updated. This provision has become a
    roadblock in furthering our relationship with Uzbekistan and,
    unfortunately, has devolved into a point of leverage to gain
    concessions.
        Uzbekistan has made meaningful constitutional reforms
    regarding women's rights and free market access, which have
    encouraged foreign investment in Uzbekistan. Militarily,
    Uzbekistan has assisted the United States in withdrawing from
    Afghanistan, and has a robust state partnership with the
    Mississippi National Guard.
        Building a strong political and economic partnership with
    the budding democratic government in Uzbekistan is key to the
    United States as the United States seeks to counter Russian and
    Chinese influence in the region. Uzbekistan is a regional
    leader in the region. While our adversary is preoccupied with
    his conflict in Ukraine, this is an opportunity for the United
    States to further deepen our relationship with the former
    Soviet bloc country.
        This bill would help further the domestic and international
    interests of both countries. Uzbekistan has made significant
    strides to implement strong, robust, diplomatic, and economic
    relations with the United States. As a matter of fact, I am
    meeting with Senator Safoyev, one of their chairmen in their
    Senate, immediately following this meeting. I would be remiss
    to point out that Mr. Gonzalez from Texas, the Democrat that
    was sitting to my right, is the co-chair of the Uzbekistan
    Caucus with me, and has visited, and several members of this
    committee have visited Uzbekistan with me.
        Thank you, Mr. Chairman and Ranking Member Neal, for time
    to speak today. And I urge the committee to consider H.R. 1755
    in its markup.
        [The statement of Mr. Kelly of Mississippi follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Thank you, Mr. Kelly. We appreciate you
    joining us.
        I now recognize Representative Tony Gonzales, the gentleman
    from the great state of Texas. Mr. Gonzales was a cryptologist
    in the United States Navy for 20 years, and with deployments
    across the Middle East and Asia. He currently sits on the
    Appropriations Committee and the Homeland Security Committee.
        Thank you for being with us, Tony.

       STATEMENT OF THE HON. TONY GONZALES, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. TONY GONZALES of Texas. Thank you, Chairman Smith and
    Ranking Member Neal, for leading this committee and letting me
    testify today. I appreciate the opportunity to share my passion
    for helping foster youth.
        When I was five years old, my mother and I left an abusive
    home in the middle of the night, and we spent time in a
    battered women's shelter. Today, thankfully, my mother lives
    with me and she helps Angel and I raise our six children.
        My wife, Angel, has a similar story. She was a foster child
    herself, and makes it a point to try to find ways to fix the
    foster care system in a manner that brings everyone together.
        Unfortunately, my story does not have the same happy ending
    for thousands of children in foster care today. Not only are
    foster care standards far from what they should be; thousands
    of children in foster care have gone missing from state foster
    care systems and cannot be located.
        As a member of the Congressional Foster Youth Caucus, I
    believe there are ways to address this issue and ensure that
    our nation's foster youth receive the care they deserve. This
    is why I introduced the Find and Protect Foster Youth Act,
    which would help remove obstacles in identifying and responding
    to children who go missing while in foster care, which are also
    known as runaways.
        The issue is that the data on runaways is often inaccurate
    and, in some cases, preliminarily closed. Long-term data
    analysis suggests the runaways episodes are actually much
    higher than what is shown on record. Currently, state and
    tribal governments are not required to include plans for
    locating any child missing from foster care, nor are they
    required to report those findings.
        The Find and Protect Foster Youth Act addresses this issue
    by requiring the Department of Health and Human Services to
    find obstacles in identifying and responding to missing
    children in the existing foster care system. The bill seeks to
    accomplish this by requiring an evaluation of states' protocols
    to determine the location of the missing foster youth; a report
    to Congress on the results of that evaluation; and screenings
    for children who return to foster care to determine if the
    children were victims of sex trafficking during their absence.
        This is only a start, and much more has to be done. But I
    am grateful for the opportunity that you are giving a voice to
    so many that feel voiceless. Thank you, Chairman.
        [The statement of Mr. Tony Gonzales of Texas follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. TONY GONZALES of Texas. And I yield back.
        Chairman SMITH. The ranking member.
        Mr. NEAL. I want to thank the gentleman for bringing that
    issue to our attention, and the considerate manner in which you
    delivered it.
        One of the great stories of Congress is how people got
    here, and what their backgrounds are, and how they were raised,
    which, in most instances, inform our decisions. So I have a
    very similar story to the one that the gentleman offered. And
    while not wanting to make everybody familiar with it, many
    people know of it, much dependent on Social Security survivor
    benefits. Grandmothers and aunts were all involved in the
    raising of myself and others.
        But as you have described it, there are extraordinary
    challenges that confront people every single day. But I am
    pleased that you were able to bring your own experience and
    tell your own story because, in the end, that is what helps
    move Congress in the right direction. So I thank the gentleman.
        Chairman SMITH. Mr. Schweikert.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Tony, one quick question. So this is basically on tracking
    foster youth that just have disappeared from the rolls, or--you
    know, and my wife and I have gone through the process of
    getting certified in our time trying to adopt kids.
        But some of the issues around it are much bigger, you know,
    these--you know, our incentive on family reunification that
    often is not actually the best thing for the child. Do you
    think this, or should we try to do something more global?
        Mr. TONY GONZALES of Texas. Yes, this is a start. Thank you
    for that question.
        And what we are seeing is some states track runaways. So
    let's say someone is in the foster care system and they run
    away, which is more common than people realize. And then, when
    they come back, there is nothing that tracks that they were
    ever gone from the system. Some states do it, some states
    don't. So it essentially goes, ``While you were gone, what
    happened to you, why did you leave''----
        Mr. SCHWEIKERT. So Tony, you are looking for a
    standardization.
        Mr. TONY GONZALES of Texas. A standardization----
        Mr. SCHWEIKERT. Okay.
        Mr. TONY GONZALES of Texas [continuing]. That identifies
    why they left. In some cases, maybe the foster care--the foster
    home that they left wasn't the right setting, or just--and what
    happened when you were gone?
        You know, it is--usually, they are homeless or they are in
    a very vulnerable situation. So it tracks that to identify how
    do we prevent foster children from running away, and then, when
    they do come back, how do we give them the services they need
    if they did experience any trauma while they were gone.
        Mr. SCHWEIKERT. All right. Thank you, Tony. I know in
    Arizona we still have a real shortage of families willing to do
    this. So we want to make sure you do it in a way where you are
    continuing to get people willing to take kids into their home
    and go through the certification process.
        So I yield back.
        Chairman SMITH. Mr. Gonzales, thank you for your testimony.
    Your bill draws attention to an important topic focused on
    protecting our foster youth. That is our responsibility. We
    need to get the job done. So thank you for being here.
        Mr. TONY GONZALES of Texas. Thank you, Chairman.
        Chairman SMITH. Thank you for--all, for your testimonies.
    We will now move to panel number four.
        [Pause.]
        I now recognize Representative Bruce Westerman. He is the
    chairman of the House Natural Resources, was a four-year walk-
    on football player at some university in Arkansas, and a member
    of the Arkansas General Assembly, and is an engineer and
    forester by trade.
        It is a pleasure to have you in the people's committee.

      STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ARKANSAS

        Mr. WESTERMAN. Thank you. Thank you, Chairman Smith and
    Ranking Member Neal, and it is an honor to be here.
        And Go Hogs. You caught me off guard a little bit with that
    opening.
        It is great to be able to participate and have this
    opportunity to visit with my friends in this important Ways and
    Means Committee Members Day hearing, and I appreciate you doing
    the hearing.
        As you know, one effort that I have been proud to lead is
    the Trillion Trees Act. It is a bipartisan proposal that seeks
    to establish the United States as a global leader in the One
    Trillion Trees Initiative.
        This bill is--does a lot more than just plant trees. It is
    about planting trees, or afforestation. It is also about taking
    care of the existing forests that we have to make them vibrant
    and healthy. And it is also about using wood products to store
    more carbon.
        And one way to think of that is wood is kind of like a
    battery for carbon. Photosynthesis is the oldest, most
    efficient, most effective way of taking carbon out of the
    atmosphere. Teddy Roosevelt called trees the ``lungs of the
    Earth.'' Through photosynthesis, trees pull in carbon dioxide,
    they store the carbon in the wood, and they exhale the oxygen
    back for us to breathe.
        And the interesting thing is, as we are in this beautiful
    hearing room, we got all this nice wooden dais and furniture in
    here, 50 percent of this wood was atmospheric carbon at one
    point in time. It was atmospheric carbon that a tree pulled in,
    converted it into hydrocarbons, stored it in the wood. And as
    long as this wood is here, this carbon is stored here.
        Now, these trees were sustainably harvested, hopefully.
    Where this timber was cut, a new tree grew back and it is out
    there storing carbon today in that same space. So it is very
    important that we keep forested lands, and that we are able to
    utilize the ability of the land to perform photosynthesis
    through plants and store the carbon.
        But it is also important that we utilize wood products,
    kind of like a battery. You know, we talk about carbon capture
    and sequestration. Well, nothing captures carbon and sequesters
    it better than wood. Some of our oldest structures in the world
    are actually wooden structures.
        The other part that is such--so fascinating about Trillion
    Trees is there was a study done a few years ago that said that
    if we planted a trillion trees globally, we would sequester 205
    gigatons of carbon. That is an amount equivalent to two-thirds
    of all the carbon emitted by man since the beginning of the
    Industrial Revolution.
        Now, people will argue that number and say, well, that is
    too high, or that is too low. But the fact is it is larger
    scale than anything else that anybody has talked about, and it
    is something that is readily available that we should be
    working on.
        Now, for all the tree folks out there, there is about three
    trillion trees in the world. Scientists tell us there have been
    as many as 7 trillion trees, and we have about 300 billion here
    in the United States. So we can't plant a trillion trees in the
    United States, but we can certainly do our part to plant more
    trees and to take care of the forest that we have, and that
    leads me to the reason I am here at the Ways and Means
    Committee.
        I have been working with Representative Ferguson, who comes
    from a tree state, the great State of Georgia, and they get it.
    They are in Georgia. They know, just like we do in Arkansas,
    that we harvest a lot of trees, but we grow more, we are
    growing more trees than we are harvesting. So the amount of
    wood in Arkansas and Georgia and other states is increasing
    every year.
        And the greatest threat to deforestation is development.
    So--and to prevent--or to keep forests forested, we need to
    have markets for those products. And that is why we are
    proposing that we don't create a new tax credit, we just make
    products like mass timber available for existing tax credits,
    such as those under Section 45(l) and under Section 179(d).
        Wood is not only a great storer of carbon, it also is a
    great insulator. And when you make mass timber, it is really
    thick panels that creates a very high insulation value envelope
    for a building. So that is the reason I am here.
        [The statement of Mr. Westerman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. WESTERMAN. I am out of time and would be glad to answer
    any questions.
        Chairman SMITH. Mr. Ferguson.
        Dr. FERGUSON. Thank you, Mr. Chairman.
        Mr. Westerman, thank you for being here today. As you
    pointed out, we have got an excellent opportunity in front of
    us to do something really good for the environment and really
    good for our economy simultaneously. And when you look at the
    ability of Americans to innovate and to create, one of the
    things that we can lead the world on is mass timber, and using
    that to help with, as you mentioned, the sustainability of our
    forest, making sure that we have markets for, you know, for the
    end user.
        But we are facing some real challenges related to housing
    availability right now. Using mass timber in the residential
    area looks like it could provide some solutions to that because
    you can build houses more quickly and more affordably doing
    this as this industry continues to grow and ramp up. So many
    times I think mass timber is viewed as building 10-story
    skyscrapers. We need to open up these markets for individual
    consumers in the home section and also the very small
    commercial, where concrete and steel aren't the primary choice
    for building.
        You bring up something that is very important, and I think
    it should be talked about one more time. One of the biggest
    challenges that we have with energy usage is the inefficiency
    of homes because of poor insulation. And if you can build homes
    using mass timber that have a greater--that are--that have a
    greater R value, you wind up saving a significant amount of
    energy in our baseline load and our baseline capacity in the
    energy that we are going to need for a lot of other stuff.
        So I am excited about the possibility of making this
    product available through the existing tax credit system with
    the changes that you have recommended, and look forward to, as
    we move forward, to supporting this effort in the committee.
        With that, Mr. Chairman, I yield back.
        Chairman SMITH. Thank you. Mr. Kelly is recognized.
        Mr. KELLY of Pennsylvania. Thank you, Mr. Chairman. So you
    are sitting beside another guy who knows about timber.
        When we talk about Pennsylvania, people say, oh, yes, you
    guys, big steel state. No, no, that is not the biggest product
    we have. They say, oh, yes, yes, you guys are into coal and
    natural gas. I say, well, yes, that is part of the deal.
        It is timber, especially--I think, GT, I am right. I think
    it is the--black cherry is one of the valued timbers that we
    have. But again, the management of this valuable resource.
        And Bruce, I really appreciate when you talked about the
    contribution again to our environment. You all teaching us
    about something we have absolutely no idea about is incredible.
    I am so glad you are on the committee, and that you are here
    serving in the Congress, because I don't know of anybody who
    ever served here before that had the profession that you are
    already in.
        So I know when Freddie Keller wasn't able to run--Fred
    Keller is another guy that was all--it was all about timber, it
    was all about wood. And really, just hanging around with him,
    and we would talk about it, I was amazed by what I didn't know.
    So--and I know GT feels the same way about it, because we have
    talked about it many times.
        And thank you. Thank you for being here, and thank you for
    bringing it up and bringing it to our attention. Thank you.
        Chairman SMITH. Ms. Malliotakis.
        Ms. MALLIOTAKIS. Thank you. I just want to thank the
    sponsor for this legislation. I am a proud cosponsor of this
    bill. I think it is a practical, common-sense, cost-effective
    solution, carbon sequestration.
        And also, as my colleague said, it can help the economy, as
    well. And so it is a win-win, and I think that it really makes
    sense for us to move this bill forward.
        And I just appreciate the gentleman's time.
        Chairman SMITH. Thank you, Chairman Westerman. We
    appreciate your time in our committee.
        Mr. WESTERMAN. Thank you, Chairman Smith.
        Chairman SMITH. I now recognize Chairman GT Thompson, the
    gentleman from Pennsylvania.
        Mr. Thompson is the proud, proud chairman of our House
    Agriculture Committee.
        It is great to have you here.

    STATEMENT OF THE HON. GT THOMPSON, A REPRESENTATIVE IN CONGRESS
                 FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. THOMPSON of Pennsylvania. Well, Chairman Smith, thank
    you so much, Ranking Member Neal, and members of the House
    Committee on Ways and Means. Good morning, and thank you for
    providing the opportunity to share my priorities for the 118th
    Congress.
        And after spending nearly three decades as a therapist,
    rehabilitation services manager, and a licensed nursing home
    administrator prior to coming to Congress, I have seen
    firsthand the importance of access to quality health care in
    rural communities.
        Today I would like to discuss a couple pieces of
    legislation before this committee that removes some of these
    obstacles and increases access, affordability, and quality of
    care for patients across the country.
        The first, H.R. 4315, the Medicare Orthotics and
    Prosthetics Patient Centered Care Act, which would strengthen
    Medicare for beneficiaries who use orthotics and prosthesis by
    reducing waste, fraud, and abuse within the Medicare program,
    and expanding access to these critical devices.
        Medicare currently reimburses the drop shipment of custom
    orthotics and prosthetics directly to a Medicare beneficiary's
    home without any clinical guidance, training, or intervention
    from a provider or supplier. This leads to rampant waste,
    fraud, and abuse within Medicare as dropship devices may not
    fit a patient's needs, do not work as advertised, may not be
    able to be operated without professional guidance. And quite
    frankly, with ill-fitting devices it can cause ulcerations and
    further expensive medical complications.
        Now, this legislation prohibits the drop shipment of all
    prosthetic limbs and custom fabricated or custom-filled
    orthotics, potentially saving Medicare billions of dollars, and
    ensuring that these beneficiaries have appropriate access to a
    health care practitioner to provide the necessary guidance.
        H.R. 4315 also expands access to replacement orthosis for
    Medicare beneficiaries. Currently, Medicare does not generally
    cover the replacement of a custom-fitted or custom-fabricated
    orthotic within the reasonable use lifetime of the orthotic.
    This forces beneficiaries to wait a long period of time before
    being eligible for replacements, and undeniably delaying access
    to medically necessary care.
        This bill would also allow Medicare to reimburse for a
    replacement orthotic device if the current orthotic device is
    broken or a new one is medically required.
        Finally, H.R. 4315 implements a zero-cost regulatory fix to
    allow certified or licensed orthotists or prosthetists to
    provide off-the-shelf orthotics directly to Medicare
    beneficiaries by exempting them from competitive bidding. Under
    the present system, orthotists and prosthetists without a
    competitive bidding license are required to send patients in
    need of an off-the-shelf orthosis to a colleague that has a
    competitive bidding license, adding an unnecessary barrier to
    care. This change brings orthotics and prosthetics in line with
    other providers like physical and occupational therapists and
    physicians.
        Also, the Centers for Medicare and Medicaid Services also
    exempt those individuals from the competitive bidding process.
    So it is a precedent within the industry.
        I respectfully urge the committee to provide for
    consideration of the Medicare Orthotics and Prosthetics Patient
    Care Centered Act to reduce waste in Medicare and increase
    access to these devices for patients across the country.
        Now I would also like to turn to an issue impacting access
    to care for thousands of Medicare beneficiaries. As you may
    know, current Medicare law requires that patients have an
    inpatient stay of at least three days in order for Medicare to
    pay for prescribed care at a skilled nursing facility. There is
    a mounting concern and evidence that too many Medicare
    beneficiaries and their families are being saddled with
    insurmountable surprise, out-of-pocket costs for stays at
    skilled nursing facilities because hospitals are caring for
    these patients under outpatient observation status.
        This billing technicality has significant repercussions for
    beneficiaries who are left facing either enormous unexpected
    post-hospital bills, or avoiding the care and treatment their
    doctors have recommended. We saw the temporary waiver of the
    three-day rule during the COVID-19 pandemic, and now it is time
    to take it a step further.
        H.R. 5138, Improving Access to Medicare Coverage Act, is a
    bipartisan legislation that ensures Medicare covers this
    doctor-recommended post-acute care by counting the time spent
    under observation status towards the requisite three-day
    hospital stay for the coverage of skilled nursing care.
        I certainly respectfully request that the committee give
    full and fair consideration to H.R. 5138, and I have included
    in my written comments that have been submitted some additional
    priorities under the jurisdiction of this esteemed committee.
        Thank you for the opportunity to be able to be here and
    participate in your Member Day.
        [The statement of Mr. Thompson of Pennsylvania follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Thank you, Chairman Thompson, for your
    presence.
        I am pleased to now recognize Representative Buddy Carter,
    the gentleman from Georgia. Mr. Carter is a pharmacist by
    trade, and ran a pharmacy for over 30-plus years before coming
    to Congress.
        We are pleased to have you before us.

        STATEMENT OF THE HON. BUDDY CARTER, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF GEORGIA

        Mr. CARTER. Thank you. I started when I was 10, so that
    explains that.
        Anyway, Mr. Chairman, thank you for allowing me to testify
    today at this Member Day hearing so that I can discuss before
    the committee some pieces of legislation that I am leading and
    I believe are important.
        Mr. Chairman, I would like to discuss my bipartisan bill,
    the Protecting Patients against PBM Abuses Act that will
    protect patients and pharmacies from harmful PBM practices that
    are making health care inaccessible and unaffordable for
    millions of America.
        First, before I begin, I would like to put into context how
    powerful PBMs are. Three PBMs control eighty percent of all
    prescriptions processed in the U.S. They own or are owned by
    insurers and have vertically consolidated their businesses to
    own everything and everyone between themselves and the patients
    including doctors, pharmacies, group purchasing organizations,
    and more. Yet PBMs do nothing more than process claims. They
    are just paper pushers, I like to say. They bring no value to
    the health care system whatsoever.
        It is time for Congress to do its duty and stop these PBMs
    from gaming the system, and return the dollars they profit back
    to patients. That is why I urge the Committee to support the
    Protecting Patients Against PBM Abuses Act.
        PBMs currently get compensated by charging fees calculated
    as a percentage of the cost of the medicine. This incentivizes
    PBMs to push the price of medicines higher by blackmailing for
    formulary access, or they choose higher-priced medicines to put
    on their formulary. When PBMs have incentives to follow
    medicines with a higher list price, it can lead to higher costs
    for patients who face cost sharing and deductibles and co-
    insurance that is typically based on list price.
        The Wall Street Journal recently reported that across the
    selection of so-called specialty generic drugs, Cigna and CVS
    prices were at least 24 times higher, on average, than roughly
    what the medicines manufacturers charge. This can also mean
    patients have fewer and higher choices when PBMs disfavor
    generic or lower-priced brand competitors.
        Delaying action on this any longer results in increased
    costs for patients. This is about patients. It is about patient
    cost.
        If we can de-link administrative fees paid to PBMs from the
    price of medicines, this proposal will help to correct those
    misaligned incentives and bring relief to patients in the
    pharmacy counter.
        Representative Lisa Blunt Rochester and I are proposing
    this bipartisan bill that will help patients afford their
    medicine and protect them from harmful PBM practices.
        Another critical part of this bill is that it prohibits
    PBMs from reimbursing non-affiliated pharmacies at a rate less
    than they reimburse their own pharmacies. I think all of you
    are familiar with what I am talking about, so I am going to
    move on.
        I understand that this committee has not advanced the
    Protecting Patients Against PBM Abuses Act, but I would like to
    work with this committee to ensure that it is ready for
    consideration in a future markup.
        Another piece of legislation I would like the committee to
    consider is H.R. 655, the Disaster Reforestation Act. As those
    on the committee may be aware, Georgia is our nation's number-
    one forestry state. This industry is important, providing
    thousands of jobs. Unfortunately, our nation's family forest
    landowners face threats on multiple fronts. As we have seen
    recently, natural disasters and fires constantly pose dangers
    to significant investments they make in maintaining forest
    land.
        The Disaster Reforestation Act would amend the tax code to
    allow forest owners to deduct the full market value of their
    timber prior to the loss caused by the federally declared
    natural disaster as long as they replant. We don't want them
    becoming condos, we want them to replant and keep our forests
    in place.
        I would also like to express support for the Help
    Independent Track Succeed Act, or the HITS Act. The HITS Act
    would allow independent artists and songwriters to fully
    expense the cost of making new music on their taxes. This is
    similar to how qualified film and television production
    expenses are allowed to be expensed, which we have seen thrive
    in states like mine.
        I would also like to mention something very important to
    me, and that is the Fair Tax. The Fair Tax is incredibly
    popular. This is because the American people are completely
    dissatisfied with the current tax code. It is a convoluted,
    absurd system that punishes hard work. As a result, some 85
    percent of Americans are frustrated by the complexity of our
    tax code.
        H.R. 25, the Fair Tax, will eliminate the Federal income,
    payroll, and estate and gift taxes, replacing them with a
    revenue-neutral national 23 percent--not 30 percent, 23
    percent--consumption tax, consumption tax. You decide on what
    you are going to pay. This is a good and great proposal that I
    hope that you will look at, this committee will look at.
        Thank you, Mr. Chairman. I appreciate your attention to
    these matters. They are all important.
        [The statement of Mr. Carter follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. CARTER. And I yield back.
        Chairman SMITH. Representative Carter, it is a pleasure to
    have you here. With your long priorities of legislation in our
    committee, it appears you probably are serving on the wrong
    committee.
        Mr. CARTER. Mr. Chairman, I take offense to that. I serve
    on the A committee, that is Energy and Commerce, the most
    diverse and oldest committee in Congress. But I have a great
    deal of respect for the Ways and Means Committee because of
    your consideration of these bills that I brought before this
    committee today. I cannot tell you the admiration I have for
    this committee. [Laughter.]
        Thank you all.
        Chairman SMITH. I would have to----
        Mr. CARTER. Thank you, thank you.
        Chairman SMITH. I would have to say, Representative, you
    are under oath, and lying under oath is not acceptable in this
    committee. [Laughter.]
        So thank you. Thank you, Mr. Carter.
        I now recognize Representative Victoria Spartz, the
    gentlelady from Indiana. Mrs. Spartz is a great example of the
    American dream.
        And it is a pleasure to serve with you in Congress. And I
    know that you have spent a lot of time as an accountant, and a
    real estate broker, and an adjunct professor before you came
    here. Thanks for being before our committee.

      STATEMENT OF THE HON. VICTORIA SPARTZ, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF INDIANA

        Mrs. SPARTZ. Thank you. Thank you so much, Mr. Chairman.
        Unfortunately, as a CPA who knows numbers, I see too many
    problems here. But I do appreciate your willingness to look at
    very, very important issues that are really not very sexy
    issues that you go on TV and talk about it, but important issue
    for every American where we have a huge problem. It is health
    care. It is an issue with competition and value in health care.
        One of seven Americans is in debt collection due to medical
    debt. We have one-third of our spending where we have over 30
    trillion of debt and running 1.5 trillion shortfalls, and we
    are going to be double within 10 years, and one-third of it
    related to health care.
        Federal government created this problem. It is not a
    problem created by lack of competition or a monopoly problem, a
    natural monopoly. That is a monopoly created by perverse
    incentives and barriers of entries that were created by Federal
    Government. So now Congress has to resolve this problem to the
    American people if we want the American people to have
    innovative solutions that are going to improve their lives and
    going to improve our situation with that. And it is going to
    save some funds like Medicare that are going bankrupt.
        We can talk about all of this, you know, appropriations. We
    can talk about reconciling our debt. We will never reconcile
    this debt without dealing with health care. And we will not be
    able to solve it just providing more choices, because if you
    have a couple oligopolies on the market, the choices will be
    very limited. There is not going to be competition.
        So I appreciate you willing to look at this issue. I also
    appreciate that we had Speaker McCarthy last year put a Healthy
    Future Task Force, and I actually served on the Subcommittee on
    Affordability. And we looked at some solutions, and
    specifically looked at one area. There are a lot of aspects of
    health care, but one area, over 50 to 60 percent of all spend
    is related to hospitals and doctors, 50 percent. So we can talk
    about which is important, talk about drugs, pharmaceutical. We
    have to have more competition there.
        That is roughly five, 10 percent majority-related we are
    not willing to talk. And it is a tough conversation, because we
    have very tough special interest groups, love it. They are
    building Taj Mahals, have billions on Wall Street, and paid
    billions to their executives. And I am not against them making
    money. But the problem is we are subsidizing it by taxpayers
    and bankrupting the country. It is unacceptable.
        And our debt and spending is a national security issue. And
    it is irresponsible for us, you know, to pass it on to future
    generations. I know it wasn't created by just this Congress. I
    completely understand every Congress punted this issue. But we
    are reaching a point where we cannot do it any longer. So I
    appreciate this Congress being willing to do it. I truly do.
        So I will put a package together with several bills. There
    are three of the bills, you know, in front of your committee.
    And I will briefly say what they do and why they are important.
    So I look at the areas where can we eliminate some of the, you
    know, distortions that we created as a government. So I have
    three of the bills.
        You know, one of them, H.R. 2862, Empowering Patient Choice
    of Medical Care Act, where we have so much politics, where
    bureaucrats and government decide which services should be
    performed inpatient, which outpatient. Each administration
    comes and starts mingling, and then it is all politics. We
    should let doctors and competition decide. People have
    liability, they know better what is better for you, and where
    services need to be performed. And politicians and bureaucrats
    sitting in D.C. do not know that better.
        Another bill is Preventing Hospital Overbilling of Medicare
    Act. What hospitals are doing right now, they purchase
    practices and they were able, for the same doctor practice that
    they purchase, to overbill and bill facilities fees with--
    actually, it is not allowed. It is defrauding, really, Medicaid
    of billions of dollars, over 100 billion over--and this fund is
    going bankrupt within 5 years. It is irresponsible. We need to
    save Medicare to seniors that we promised. So we have to stop
    allowing these practices. And I think this is what is dealing
    with that.
        And the third bill is dealing with non-profit hospitals,
    so-called tax-exempt entity. We need to tighten the standards.
    I mean, actually, President Obama tried to do it unsuccessfully
    in the Affordable Care Act. And I still say, you know, this
    entity is not paying taxes, not local, not state. You know,
    they are not providing any charity care, no property taxes, and
    provide less charity care, you know, than, actually, some for-
    profit entity. So at least we need to tighten and define the
    standard how you can be qualified for that because, I mean, the
    next business I am going to have is going to be non-profit
    because you don't pay taxes and don't provide value. I think
    IRS wants it, and this committee needs to look at that, even--
    want to even give them status. So it is actually tighten that
    standard a little bit. And it says something needs to be--
    because that is a Congress decision. It needs to happen.
        I appreciate your consideration. I would really appreciate
    your support of these bills. Thank you.
        [The statement of Mrs. Spartz follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Congresswoman, thank you for being here.
    Thank you for your passion on some very important issues to our
    country and our country's finances.
        I now recognize Representative French Hill from Arkansas.
    Mr. Hill is the vice chairman of the House Financial Services
    Committee, and also serves on the Foreign Affairs and
    Intelligence Committee, and my neighbor to the south.
        It is great to have you.

    STATEMENT OF THE HON. FRENCH HILL, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF ARKANSAS

        Mr. HILL. Mr. Chairman, thank you for the time and the
    invitation to have a Member Day. We are grateful to the
    leadership of this committee for letting us come and advocate
    for our ideas for this important committee.
        I would like to talk today about the Social Security
    Disability Insurance Return to Work Act that I intend to
    introduce shortly. This is legislation that I have introduced
    in the past four congresses, along with my fellow Arkansan,
    Senator Tom Cotton, to strengthen the SSDI program and keep it
    solvent for current and future generations.
        SSDI is critical to a state like Arkansas, where more than
    130,000 Arkansans receive benefits under this program. That is
    about 7.5 percent of our state's population relying on this
    important program.
        But nationally, the number of recipients receiving SSDI
    payments has also grown dramatically from 1970, 2.7 million
    Americans, to now 8.8 million Americans in 2022. Over that same
    period spending on SSDI has grown from $3 billion to over $143
    billion annually, meaning that the monthly payment recipients
    are receiving has nearly doubled, even when accounting for
    inflation.
        My bill aims to strengthen SSDI and ensure that the program
    remains viable to support future generations for citizens that
    truly require these services. In 2021, fewer than 66,000 total
    beneficiaries left the program because they had found gainful
    employment that disqualified them from receiving any additional
    benefits. That, Mr. Chairman, is just 0.7 percent of the 8.8
    million SSDI recipients.
        Each American has the capacity to contribute productively
    to their community and our economy. We must work with both
    employers and employees to encourage capable beneficiaries to
    leave the program and return to the workforce. This is like the
    private sector's approach on short-term versus long-term
    disability that private companies offer their own employees.
    SSDI should be crafted to reflect both short-term and long-term
    approaches to assistance. Those who do regain their
    independence and experience have more fulfillment in their
    lives, improved health, and better economics.
        My bill is straightforward. It creates classifications to
    assess a beneficiary's need to continue receiving benefits and
    measures continued increases, continuing disability assessments
    along the way, notifying recipients about the Ticket to Work
    Program when they first receive their benefits and then every
    six months afterwards.
        It also proposes to amend the Work Opportunity Tax Credit
    Program to include qualified SSDI beneficiaries.
        By creating reasonable timelines for those expected to
    improve, incentivizing them to return to the workforce, SSDI
    can continue to serve as a temporary reprieve for those with
    work-prohibited disabilities, allow beneficiaries to earn more
    income, and facilitate a return to the workforce for millions
    of Americans, something that we desperately need across our 50
    states.
        I am committed to protecting SSDI for those who remain
    unable to work, and supporting those who show improvement as
    they strive for greater freedom and opportunity for their
    families, themselves, and their careers.
        With Congress finally demonstrating some modest commitment
    to ending perpetual huge budget deficits, this body will be
    forced to make thoughtful looks at how we spend taxpayer
    dollars, evaluate what programs are working and worth that
    investment, and thinking about new critical safety nets that
    can be improved and operate much more effectively for our
    citizens. Congress has long abdicated its oversight
    responsibility for Social Security and the Social Security
    Disability Program. This must change.
        I hope this committee will consider changes to the SSDI
    program as we consider ways to improve the impact of the
    Federal Government's contributions, and fulfill the promises
    that we have made to our country's most vulnerable citizens.
        I thank the Chair. I thank the ranking member and the
    members of the committee, and it is really a great service that
    we do in Congress, where we have members off committee be
    hosted by our colleagues and have a Member Day, and I want to
    thank you, Mr. Chairman, for doing that, and it is an honor to
    serve with you.
        [The statement of Mr. Hill follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. HILL. I yield back.
        Chairman SMITH. Representative, it is a pleasure for you to
    be here. We have had a lot of conversations. I have had
    personal conversations with your own governor in Arkansas in
    regards to SSDI, and your Social Security administrator has
    actually even came up here and talked with us. And we are
    hopeful to have a subcommittee hearing very shortly in regards
    to a lot of your items that you are referring to.
        Mr. Schweikert.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        And Victoria, if there is ever a chance you could send one
    of your staffers over, we would love to do a whiteboard with
    them.
        And French, I know of a company that has been trying to
    work with the SSDI population in regards to job placement. Will
    your legislation actually help sort of facilitate that type of
    connectivity of available populations to jobs?
        Mr. HILL. It certainly would because it engages, Mr.
    Schweikert, that population of people who could self-identify
    that they would be willing to go back to work under certain
    conditions. And I think the tax credit idea is helpful with
    that.
        Also knowing that they are not penalized if they want to
    make that effort, and connecting them back to work. And it is
    my philosophy I have had that in private business we have
    short-term disability programs that are typically paid for by
    the company, they are no cost to the employee, and then you buy
    at a very modest premium long-term disability. But we don't
    take that approach to the----
        Mr. SCHWEIKERT. But you have talked about this for a while.
    But it is both the combination, okay, here is an incentive for
    the employer to take this population, but the other thing is
    the actual mechanism to connect the employee to an employer
    with whatever their issues are, because work is very different
    today than it was 30 years ago.
        Mr. HILL. Right.
        Mr. SCHWEIKERT. So----
        Mr. HILL. Well, I will say in conclusion, look, I have met
    with the Federal Social Security offices in Arkansas. I
    certainly know the director of the state's program that the
    chairman referenced. And there is tremendous frustration by our
    own federal employees in this program. I encourage every
    member, go interview your Social Security office somewhere in
    one of your counties in your district and ask them, do they
    think this program is helping people who truly need it, or has
    it just opened up to a payment for people who know how to work
    the system?
        Mr. SCHWEIKERT. Mr. Chairman, there was a trivia point a
    couple of years ago in a hearing in here that there was, like,
    three or four counties in the United States that actually had
    more people receiving this benefit than actually working. And I
    need to go dig that back up.
        French, thank you.
        Mr. Chairman, thank you.
        Mr. HILL. I am grateful to the chairman. I yield back.
        Chairman SMITH. Thank you, Representative.
        You are all now dismissed from the panel, and we will move
    to panel number five.
        [Pause.]
        Perfect. I now recognize Representative Marilyn Strickland,
    the gentlelady from Washington State.

     STATEMENT OF THE HON. MARILYN STRICKLAND, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF WASHINGTON

        Ms. STRICKLAND. Thank you, Chairman Smith and Ranking
    Member Neal, for having us here today for Member Day.
        First, I would like to recognize and thank this committee's
    important oversight of paid family and medical leave. Back home
    in Washington State, we have paid leave, and new parents have
    the peace of mind knowing that they can care for their newborns
    at a very critical period of their life without having to worry
    about missing a paycheck.
        We can also take time to care for family members with
    serious health conditions. Washingtonians with temporary
    serious health conditions can use the state's program to
    continue to pay their bills while they heal.
        For our military service members, our state program lets
    them spend time with a family member who is soon to be deployed
    overseas, or is just returning from overseas deployment.
        Paid leave is a great relief to families in my home state,
    and it would be a great relief to families across the entire
    nation. That is why, from day one, I have been a cosponsor of
    Congresswoman DeLauro's Family Act, H.R. 3481, which will
    provide paid family and medical leave at the national level.
        Military deployments, surgeries, newborns, these are
    stressful times. And the Family Act is our opportunity to
    relieve some of that stress and give our constituents security,
    the security of knowing that they can be with their spouse who
    just got back from an overseas deployment. It is okay to get
    that procedure they have been holding off on because they will
    not miss out on a paycheck.
        Mr. Chairman, I respectfully request that you advance this
    very important issue.
        Another way we can provide peace of mind and security to
    our constituents is by empowering them to make their own health
    care decisions. That includes making reproductive health care
    safe, affordable, and available to those who want it. But it
    also includes making sure that kidney patients and all who need
    dialysis can get it how and where they need to.
        As a strong advocate for kidney health, I am proud to be
    working with Chairman Smith and Representative Carol Miller on
    the Improving Access to Home Dialysis Act. This bill will
    provide for reimbursement through Medicare for in-home
    assistance, and produce recommendations for improving access to
    home dialysis for communities of color. Many patients who need
    dialysis lack access to reliable transportation, resulting in
    missed treatments and worse health outcomes. By empowering
    patients to get dialysis where they choose, our communities
    will be healthier and safer.
        I want to thank Chairman Smith and Rep. Miller for their
    partnership, and I thank former Representative Bobby Rush for
    his leadership on this very critical issue.
        And then lastly, I ask that you consider H.R. 2788, the
    American Investment in Manufacturing Act, or the AIM Act, to
    bring needed tax relief to small businesses. American
    manufacturers need help, and they cannot afford to wait.
        Prior to 2022, businesses could deduct 30 percent of
    Earnings Before Interest, Tax, Depreciation, and Amortization,
    known as EBITDA. And that was not only a national standard, but
    it is an international standard. American businesses relied on
    this deduction to pay off loans and continue to invest in
    themselves and their employees. This will help them increase
    manufacturing capacity and be competitive on the global market.
    The businesses now will be unable to deduct depreciation and
    amortization at the worst possible time. With supply chain
    shortages, higher material costs, and higher rates for loans,
    there are now barriers to expanding capital-reliant
    manufacturing.
        The AIM Act, led by Representatives Adrian Smith and Joe
    Morelle, will make it easier for capital-intensive companies,
    especially manufacturing, to finance growth. As you know, the
    manufacturing economy is crucial to growing our domestic
    workforce, enhancing our competition, and ensuring future
    economic growth across the entire country.
        President Biden and his Administration are committed to
    returning manufacturing jobs back here to America, to our home.
    This bill aligns with these goals by allowing American
    manufacturers to onshore even more manufacturing jobs, and
    supporting the over 450,000 Americans employed in
    manufacturing. This bill could mean the difference between
    leading or falling behind in the global marketplace.
        The AIM bill has bipartisan support and, Mr. Chairman, I
    respectfully ask that you advance this legislation.
        [The statement of Ms. Strickland follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. STRICKLAND. Thank you very much for your time today,
    and I yield back.
        Chairman SMITH. Thank you, Representative, for being here.
        Mr. Schneider.
        Mr. SCHNEIDER. I just want to say thank you for taking the
    time to come and present your thoughts. It is very much
    appreciated.
        Ms. STRICKLAND. Thank you.
        Chairman SMITH. We will now recognize Representative August
    Pfluger, the gentleman from the great State of Texas. Mr.
    Pfluger is a graduate of the Air Force Academy, and spent 20
    years as a decorated fighter pilot.
        It is great to have you before the best committee in
    Congress.

       STATEMENT OF THE HON. AUGUST PFLUGER, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. PFLUGER. Thank you, Chairman. Thank you, Ranking
    Member. That might be debatable, but for today, during the
    purposes of this discussion, absolutely. No, thank you for
    providing the Members the opportunity to share our priorities
    for this Congress.
        I am proud to represent the world's largest secure supply
    of energy, the Permian Basin. It accounts for over 40 percent
    of all crude oil production and almost 20 percent of natural
    gas production, and the region is absolutely the epicenter of
    our domestic energy production and a geostrategic tool for
    national security.
        Last Congress, some lawmakers pushed to remove essential
    provisions for energy producers like Intangible Drilling Costs,
    IDCs, which are a crucial tool for weathering a volatile and
    unpredictable industry. The ability of independent oil and gas
    exploration and production companies to deduct IDCs in the same
    way other businesses deduct business expenses is absolutely
    crucial, and key to a company's ability to lower the cost of
    capital for domestic production activity.
        The Inflation Reduction Act imposes a book minimum tax on
    American companies, but companies are still able to reduce
    their taxable income by the amount of depreciation deductions
    they have--they are already receiving through traditional
    corporate income tax. However, the oil and gas industry who
    utilize IDCs, is treated punitively by the corporate
    alternative minimum tax. This is just one of the many issues
    that the corporate alternative minimum tax poses for energy
    producers specifically in the oil and gas industry.
        IDCs are not loopholes, they are not credits, they are not
    subsidies. In fact, the expensing of IDCs allows companies to
    recoup such costs as labor, equipment, rentals, pad
    preparation, and other expenditures for which there is no
    salvage value. In fact, over 80 percent of IDCs are associated
    with labor costs.
        Our nation's tax code is designed to levy taxes on net
    profits, not dollars used for ordinary and necessary costs or
    capital expenditures. The elimination of the current expensing
    of IDCs would drastically increase the cost associated with
    these high-risk and high-cost projects, and would result in
    less domestic production of our own energy, jeopardizing our
    nation's economic and national security.
        Unfortunately, there are many punitive policies that this
    body must address. And thank you, by the way, Chairman, for
    doing that work.
        For decades, millions of retired public servants, including
    police officers, firefighters, and teachers, have had their
    Social Security checks unfairly docked because of an antiquated
    formula. Every month retired public servants risk their
    benefits being reduced due to a windfall elimination provision.
    At a time when so many are already struggling to keep up with
    inflation, this money goes a long way.
        And our public servants deserve better. Those who have
    spent decades paying into Social Security should not be treated
    differently because they made a decision to serve their
    community.
        I am proud to support Jodey Arrington's legislation, H.R.
    5342, to update Social Security's formula to fully compensate
    our teachers, firefighters, and police officers for the time
    they worked in the private sector and the taxes they paid into
    the system. And I urge the committee to take action on this
    bipartisan legislation.
        Lastly, it is imperative that our Congress and the Ways and
    Means Committee work to advance trade policies that prioritize
    American agribusinesses. Due to the previous Administration's
    commitment to freer and fairer trade agreements, we made
    significant market improvements, and it is imperative we
    continue to ensure American agricultural exporters, and many
    other sectors of our economy receive the full benefit of the
    improved trade deals with vigilant enforcement.
        Additionally, we must be in constant pursuit of new global
    markets for our farmers and ranchers. With worldwide demand for
    food on the rise, we must ensure that there is no better--that
    there is no one better equipped to lead the charge of feeding a
    hungry world than American producers.
        For several years, American business owners, farmers,
    ranchers, and energy producers have faced the threat of having
    the tax code weaponized against them and being left behind in
    the global marketplace. It is important that we work to bolster
    American competitiveness domestically and internationally, and
    I look forward to working with you.
        The last thing I will say is thank you to this committee
    for helping out with a tax policy, the death tax policy, by
    increasing those provisions. And I know that we are coming up
    against, in the next year or so, that law again, the
    supercharged death tax. And any changes to step-up in basis
    will be detrimental not only to agricultural producers, to
    families, but to Main Street businesses, and especially to the
    energy industry.
        Chairman, I appreciate the work that you have done.
    Everything that I have talked about here today I believe is a
    national security issue. The production of our own energy, the
    production of our own food, the ability for families to--that
    know how to do agriculture business to be able to continue to
    do that is so vital. We cannot be dependent on our adversaries
    for energy and for food. And this committee absolutely stands
    in the gap to protect our domestic production.
        [The statement of Mr. Pfluger follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. PFLUGER. With that, thank you for allowing me to speak
    to you. I yield back.
        Chairman SMITH. Thank you, Congressman. Our priority on
    this committee is to make sure that our country is secure when
    it comes to our energy, our food, and our health care. We
    cannot be reliant on countries, especially the ones who love to
    burn our flags. So we appreciate you being here.
        I now recognize Representative Mike Waltz from the great
    State of Florida. Mike is the first Green Beret to be ever
    elected to Congress. He has been awarded four Bronze Stars, and
    was a White House and Pentagon advisor in the Bush
    Administration.
        It is a pleasure to serve with you. Thank you for being
    here.

    STATEMENT OF THE HON. MIKE WALTZ, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF FLORIDA

        Mr. WALTZ. Thank you, Chairman Smith. Thank you, Ranking
    Member Neal. Thank you for the opportunity to testify today in
    support of my two bills under your committee's jurisdiction.
        The first is H.R. 1568, the Moving Americans Privacy
    Protection Act. This bill is bipartisan and it is bicameral,
    and it would require U.S. Customs and Border Patrol, CBP, to
    remove Personally Identifiable Information, PII, including
    Social Security numbers and including passport numbers, from
    cargo manifests before public disclosure. The legislation
    passed the Senate under unanimous consent this March.
        Currently, in kind of the current environment, CBP requires
    manifest sheets which include PII in order to disclose and
    document the cargo of incoming vessels for obvious customs and
    security purposes. The original intent of the requirement was
    to increase competition, facilitate better public analysis of
    import trends, allow port authorities and transportation
    companies to more easily identify potential customers and
    changes in the industry.
        However, in recent years the PII of relocating
    individuals--importantly, Mr. Chairman, including military
    members who are moving from overseas--their PII, their Social
    Security numbers, their passport numbers are being released
    publicly. That has resulted in identity theft, credit card
    fraud, and makes collection by our adversaries, from terrorist
    organizations to foreign intelligence organizations, easy. They
    literally just have to log into CBP's website and collect the
    PII of not just our military members, but any American who is
    identified on these manifests.
        So, I mean, I think the fix here is obvious and necessary.
    And all we are asking is that that PII be stripped before
    public disclosure for all of the reasons listed.
        So this bill is supported by the American Trucking
    Association, the International Association of Movers, the
    Military Officers Association of America, and the National
    Association of Realtors, among others. And I ask for the
    committee's support.
        The second bill, H.R. 529, is Extending the Limits of U.S.
    Customs and Waters Act to extend the customs waters territory
    of the United States from 12 to 24 nautical miles from the
    baseline from the coastline of the United States. This bill is
    also bipartisan, it is also bicameral, and it would update
    several existing laws and extend the U.S.'s contiguous zone
    from a 12 nautical mile limit of the U.S. customs and waters to
    24 nautical miles.
        And by extending CBP's jurisdiction to the nearshore
    waters, it would double its area of operation, and it would
    align CBP's maritime operations offshore with what the Coast
    Guard already has and with what NOAA already has. So Coast
    Guard and NOAA adopted these extensions several years ago; CBP
    did not. This bill would rectify that mistake.
        And with modern technology, just as an aside, the
    performance and speed of maritime vessels, particularly those
    fast boats and others used by illegal or illicit smugglers, is
    exceeding the abilities of our law enforcement, particularly
    when they are restricted only to 12 miles. So by extending
    these waters out to 24, it aligns all of our law enforcement
    entities and it gives CBP double the amount of time to
    interdict illicit drugs, human trafficking, fentanyl, all of
    those illicit activities that are happening at our close line.
        And I will just conclude with this, Mr. Chairman and
    Ranking Member. You know, we talk a lot about--and rightly so--
    about our 2,000 miles of southern border. Our coastline in the
    United States is 95,000 miles. Right now, just in the
    Caribbean, the--between the Navy, the Coast Guard, and Customs
    and Border Patrol, they are only able to interdict 10 percent
    of what they identify on radar. So 90 percent of what they
    identify on radar as illicit activities gets through. And this
    would be helpful to rectify that.
        [The statement of Mr. Waltz follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. WALTZ. I ask for your support in marking this up, and I
    thank you for your time today.
        Chairman SMITH. Thank you, Congressman. I appreciate all of
    your really important pieces of legislation, and hopefully we
    can get something done.
        So I now recognize Representative Maria Salazar, the
    gentlelady from Florida. Ms. Salazar is the daughter of Cuban
    exiles, a five-time Emmy Award journalist, and is the only
    U.S.-Spanish language journalist to have ever interviewed Fidel
    Castro.
        It is a pleasure to have you before our committee.

    STATEMENT OF THE HON. MARIA ELVIRA SALAZAR, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF FLORIDA

        Ms. SALAZAR. Thank you, Mr. Chairman--it is my pleasure to
    be here--and for allowing me to participate in this very
    important hearing.
        Trading has always been one of the strongest competitive
    advantages of our country because of the size of our economy
    and the dynamism of our marketplace. We foster capitalism, we
    embrace democracy, and we export our moral values. But
    unfortunately, at this hour we are not the only ticket in the
    hemisphere; we have watched China aggressively enter both
    established and emerging markets. We, the United States, were
    motivated to trade for profits with the Chinese because their
    communists are motivated to acquire power. We have seen their
    tactics, offering low-quality goods, utilizing slave labor, and
    destroying the environment.
        Let me tell you, in the last 20 years they have secured a
    very robust presence in Latin America through a Trojan Horse
    strategy that has become the number-one trading power in the
    region. I am going to repeat it to you. Did you hear me? Our
    hemisphere is being invaded by China, and they are now the
    number-one trading power in the region.
        Twenty years ago they traded twelve billion dollars. Twenty
    years later, last year, they hit four hundred and fifty billion
    dollars. That is a 3,000 percent increase, a 3,000 percent
    increase. Right now, China has free trade agreements with
    Chile, Costa Rica, Ecuador, Peru, and another one with Uruguay
    is on the way.
        South America, specifically in South America, they have
    surpassed the United States as the top trading partner. We are
    talking about the Chinese are the top trading partners in South
    America. Ten years from now, China's trade with Latin America
    will be seven hundred billion dollars. That is trade, not
    loans.
        In the last 20 years, China has lent almost 150 billion to
    the region. And of course, not only that, they are lending
    money, but they are helping our enemies: Cuba, Venezuela and
    Nicaragua. Twenty-one Latin American countries have signed into
    China's nefarious Belt and Road Initiative. Today they control
    key ports in Peru, railroads in Argentina, airports in
    Honduras, dams in Ecuador, and critical rare earth materials in
    Bolivia. This is a major security risk for the United States.
        Needless to say, they are bad actors with bad intentions.
    We are the opposite.
        But I have good news, and that is the reason why I am here
    today. It is called the Americas Act. And what does it do? It
    puts the United States of America back on top. It sends the
    message to every Latin American country that I have visited
    personally as a news reporter, ``If you play by the rules, if
    you fight political corruption, and if you reduce your
    dependance on China, you will join''--you, meaning Latin
    American country--``you will join what is called the gold
    standard of international trade called USMCA. Mexico has it.
    Canada has it. You could have it, too.''
        I am honored to have worked with the creator of this
    monumental legislation, Senator Bill Cassidy. Our intention is
    to unleash unprecedented prosperity throughout the region, and
    the bill has five pillars.
        Trade and partnership. You, Latin American country, will
    have the opportunity to join the United States, Mexico, and
    Canada in a free trade agreement with all its benefits, and
    have access to $60 billion in investment capital from the
    United States.
        Near-shoring and Reshoring. The bill creates a program to
    help American industries relocate from China, either back to
    the United States or to any other country in our hemisphere.
    There will be loans, grants, and tax incentives to help
    companies move back home.
        Number three, strategic investment. Those $60 billion that
    I just mentioned will create an unbreakable supply chain from
    Patagonia in Argentina to Alaska in the United States to make
    sure we are not dependent on China any longer. Let's suppose we
    get another COVID. God permit it will not happen, but we will
    have antibiotics. We will not have to be dependent on the
    Chinese.
        In addition, we will get cheap, affordable energy coming
    from our hemisphere partners, whether it will be Guyana or
    Ecuador or Texas, it doesn't matter. It is in our hemisphere.
        Transparency and rule of law, number four. For our
    neighbors we will make it easy to do business with you in a
    clean, transparent, non-corrupt way. In other words, the
    American way. To give confidence to the American business
    sector that you can invest and it will be secured, you invest
    in Latin America. In other words, accountability will be
    guaranteed.
        And finally, we are going to be promoting American values.
    We are going to establish the American University of the
    Americas to promote United States values and increase
    educational opportunities to Latin America.
        If we employ this framework, we will win the trade war in
    our backyard. But if, on the contrary, we sit back, we will
    watch Mandarin replace English, and English will not be spoken
    in Latin America any longer.
        Finally, with this legislation, Senator Cassidy, myself,
    and the United States Congress will be sending a very clear
    message to our neighbors in the hemisphere: We want to work
    with you as much as you want to work with us.
        Hispanics, Latin Americans prefer the Americans over the
    Russians or the Chinese any day of the year. Now it is up to
    Latin Americans to behave accordingly so they can be part of
    the club of the top economic players.
        I look forward to work with you, Mr. Chairman, in making
    this legislation a reality, and being able to stop the
    situation we have on the border because we need to keep those
    Latin American boys and girls home.
        [The statement of Ms. Salazar follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. SALAZAR. I thank you very much for the opportunity, and
    yield back.
        Chairman SMITH. Thank you, Congresswoman, for being here
    today. It is a priority of this hemisphere in regards to
    trading partners. That is why my very first congressional
    delegation that I led as chairman was to Mexico, Ecuador, and
    Guyana, because it is extremely important for our presence and
    to continue to grow.
        Your numbers that you gave in regards to China increasing
    3,000 percent is unacceptable, and we have to do something as a
    Congress to address that. So thank you for being here.
        Ms. SALAZAR. And I do want to say that Latin Americans
    would do business with the Americans at any time, any place
    over the Chinese and the Russians, and I know it very well.
        And I thank you for the opportunity to put this together.
        Chairman SMITH. Thank you. I now recognize Representative--
    or chairman--Mark Green from Tennessee for being before us. He
    is the great chairman of our House Homeland Security.
        And pleased to have you.

    STATEMENT OF THE HON. MARK GREEN, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF TENNESSEE

        Mr. GREEN. Thank you, Chairman Smith, and it is great to
    see you in the chair. I recall us rehearsing the night before.
    Those were fond memories.
        And thank you, Ranking Member Neal, for this opportunity to
    testify to the committee about my bills addressing the
    concerning conditions of our rural health care systems.
        I know that many of you have heard the same sobering
    stories from constituents, physicians, hospitals,
    administrators, and parents. Our rural hospitals are entering a
    financial and workforce crisis. As an emergency care physician
    and the former CEO of an emergency department management and
    staffing company, I know firsthand how desperate the situation
    has become, and it has only gotten worse in the recent years.
        My home state of Tennessee is greatly impacted by rural
    hospital closures and limited access to emergency medicine.
    According to U.S. News and World Report, Tennessee has seen
    more hospital closures than any other state besides Texas. In
    fact, the Tennessee Hospital Association estimates that as many
    as 45 percent of Tennessee's hospitals are at risk for closure.
        This is an impending disaster, not just for the loss of
    care in those communities, but also the loss of jobs. Often the
    hospitals are the largest employer in their communities.
        In order to combat this worrying trend, I have introduced
    three pieces of legislation as part of my broader rural health
    care initiative.
        Firstly, let's start with H.R. 1128, the Rural Health Care
    Access Act, which is endorsed by the National Rural Health
    Association and the National Association of Rural Health
    Clinics. This bill targets rural hospital closures by expanding
    the Federal definition of critical access hospitals. According
    to the American Hospital Association, over 130 rural hospitals
    across the country closed their doors from 2010 to 2021. And
    according to a GAO report from December 2020, the median
    distance of travel rural patients drive to receive care
    increased by 20 miles, adding an ever-expanding barrier to
    essential inpatient and emergency care.
        The Rural Health Care Access Act repeals the 35-mile rule
    arbitrarily selected, I might add, that prevents many rural
    hospitals from receiving a critical access hospital designation
    if they are less than 35 miles away from another hospital. This
    bill does not change any other requirement for hospitals to
    receive critical access designation. The 35-mile rule is the
    only change we are making to federal law.
        Hospitals that wish to receive this designation will still
    have to be designated as rural, only provide acute care, and
    primarily host patients for less than 96 hours. These critical
    access hospitals receive cost-based reimbursement from
    Medicare, greater flexibility for staffing and service
    requirements, and access to a variety of grant opportunities.
        This bill will help reduce the financial vulnerability of
    these rural critical hospitals, which often provide essential
    medical services in rural communities like the ones that I
    represent.
        My second piece of legislation is specific--targets a
    specific issue in hospital systems: emergency departments. H.R.
    1129, the Rural ER Access Act, would repeal Federal regulation
    that prohibits freestanding emergency departments from
    operating more than 35 miles from a hospital.
        This 35-mile rule--again, arbitrarily selected--was
    instituted in the 1990s to monitor the safety of ER patients.
    HHS was concerned that if ERs opened too far from a self-
    standing hospital, then emergency patients would not have other
    medical options, should the self-standing ER department fail in
    its mission to treat and triage. However, speaking as an ER
    physician who practiced medicine in rural areas across the
    nation, I know how advanced our medical technology is today,
    and I know how desperate some situations are. This antiquated
    rule is now hindering patient access, rather than saving
    patient lives.
        By eliminating this mileage requirement, freestanding ERs
    would be able to provide frontline emergency care to rural
    communities that most desperately need it. During an emergency,
    these facilities can provide a crucial safety net, especially
    in rural communities where the nearest hospital is many miles
    away.
        Furthermore, keeping an ER, should a hospital have to
    close, keeps jobs in a community.
        We also need to address the workforce burnout amongst
    medical providers by enacting H.R. 5213, the Reducing Medical
    Unnecessary Delays in Care Act. This legislation is endorsed by
    the Medical Group Management Association and the American
    Academy of Family Physicians, and it seeks to unburden our
    doctors from the bureaucratic red tape that is prior
    authorization.
        According to the Medical Group Management Association, 72
    percent of medical groups report that clinicians assigned to
    complete their peer-to-peer reviews by the plans are not from a
    relevant specialty to the treatment or disease in question,
    resulting in dangerous delays and flat-out denials.
        In order to combat this worrying trend and reduce
    unnecessary delays in care, this bill would reform the practice
    of prior authorization in Medicare and Medicare Advantage. If
    my legislation becomes law, only board-certified physicians in
    the relevant specialty would be the ones making the important
    decisions about care.
        Specifically, it would also direct Medicare, Medicare
    Advantage, and Medicare Part D plans to comply with
    requirements and restrictions, and must be based on medical
    necessity and written clinical criteria.
        And I am going to break from my script for just a second to
    say this. When a physician reaches out to a health insurance or
    Medicare for permission to do a procedure that it wants to do
    for its patient, they are oftentimes talking to someone who has
    no medical license, no care, and that individual makes the
    medical decision to take something off the table that the
    physician can use to heal that particular disease process. That
    is a medical decision.
        If there are five ways to heal something, and the insurer
    or the Medicare-Medicaid patient--or administrators take three
    of those away, that is a medical decision. And what this bill
    does is it says a physician that normally treats that type of
    disease should be the one making the decision at Medicare and
    Medicaid.
        With all these bills--what all these bills do is aim to
    restore our rural health system and save our doctors from
    needless paperwork. With this committee's help, I am excited to
    get our medical system back on track.
        And finally, Mr. Chairman--and I know I have gone a little
    long--as a representative of Music City, I want to mention the
    Help Independent Tracks Succeed Act, HITS Act, which I have
    cosponsored the past three congresses, and is so crucial for
    independent creators in Nashville who author and produce the
    hits we know and love.
        This bill makes much-needed reforms to the tax code to
    ensure these creators receive the same treatment that other
    creative industries already get. I hope the committee can mark
    up this legislation in the near future.
        [The statement of Mr. Green follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. GREEN. Thank you, and I yield back.
        Chairman SMITH. Thank you, Chairman. This past Monday I
    spent a whole day traveling throughout my congressional
    district in just listening sessions, roundtable after
    roundtable in health care. And rural health care, access to
    health care, is my top priority. And I love your common-sense
    pieces of legislation in eliminating arbitrary caps for
    critical access hospitals and freestanding clinics. It doesn't
    make sense that a bureaucrat was able to just make sure that
    those were implemented.
        Whenever I look at the Boot Hill of Missouri and I see that
    a hospital closed in Kennett, but it could not be a critical
    access hospital because another hospital just in another county
    was less than 35 miles, it has huge impacts, and I hope Members
    of Congress will wake up and do something right.
        But thank you for being here.
        With that we will go to the next panel, panel number six.
        [Pause.]
        Thank you all. I now recognize Mr. Rudy Yakym, the
    gentleman from Indiana. Mr. Yakym is a fourth-generation
    Hoosier who filled a seat that was previously held by a dear
    friend of this committee, Mrs. Jackie Walorski. She let us know
    what she thought about Hoosier country all the time.
        So it is a pleasure to have you here.

    STATEMENT OF THE HON. RUDY YAKYM, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF INDIANA

        Mr. YAKYM. Thank you, Mr. Chairman. I appreciate the
    opportunity that you and Ranking Member Neal are providing
    those of us not on the Ways and Means Committee to present the
    priorities of our constituents.
        I am proud to represent the hard-working Hoosiers of
    Indiana's 2nd district. We are home to a dynamic economy,
    including some of America's top manufacturers, medical
    innovators, farmers and ranchers, and so much more. They all
    have a stake in our country's policies pertaining to tax,
    trade, health care, and economic opportunity.
        Many of the members of this committee knew my predecessor,
    Jackie Walorski, a cherished and respected Ways and Means
    member who was taken from us all too soon. And if you knew
    Jackie, many of the priorities that I will be highlighting will
    sound very familiar.
        The 2nd District is the epicenter of the recreational
    vehicle industry. About 85 percent of RVs on the road come from
    Elkhart County and the surrounding area inside my district.
    That is why one of my top priorities is the passage of my bill,
    H.R. 3624, the Travel Trailer and Camper Tax Parity Act.
        The exemption of floorplan financing from interest
    deductibility changes in the Tax Cuts and Jobs Act solved an
    issue for many car and equipment dealerships across the
    country. However, it inadvertently left out non-motorized,
    towable RVs, which are about 88 percent of RVs sold. This has
    forced RV dealers to maintain two separate sets of books, one
    for motorized and the other for non-motorized RVs. H.R. 3624
    would correct this unintended consequence, and allow dealers to
    focus less on unnecessary paperwork and more on selling RVs to
    Americans looking to explore the natural beauty of our great
    nation.
        Another priority is the reauthorization of the Generalized
    System of Preferences, or GSP program. As you might imagine, an
    RV has a unique and complex supply chain. The industry buys
    American whenever it can, but there are certain things that it
    simply can't. Luan wood is an example of this. It is a tropical
    wood found almost exclusively in southeast Asia. Luan is water
    resistant and lightweight, which makes it ideal for the lining
    of an RV. It outperforms the other types of plywood on the
    market, providing superior durability and fuel economy.
        Luan entered duty-free under GSP starting in 2019. However,
    since the program expired at the end of 2020, RV manufacturers
    resumed paying over $1 million a month in unnecessary tariffs.
    I support a long-term extension of GSP to help RV manufacturers
    in my district, as well as other companies seeking to diversify
    their supply chains away from China.
        A third priority is Mr. LaHood and Ms. DelBene's bill, H.R.
    3238, the Affordable Housing Credit Improvement Act. Inflation,
    supply chain disruptions, and rising interest rates have made
    it more and more difficult to find affordable housing. I am a
    proud cosponsor of the LaHood-DelBene bill because it would
    enhance a proven tool that has successfully encouraged private
    investment in affordable housing.
        Finally, across my district I hear about the need for tax
    certainty. I hope we can work toward permanent, stable tax
    policy to give families a certainty to plan their finances, and
    businesses and farmers the certainty to plan investments.
        [The statement of Mr. Yakym follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Mr. YAKYM. Thank you again for the opportunity to testify,
    and I yield back.
        Chairman SMITH. Thank you, Mr. Yakym. We appreciate you
    being here and pushing priorities that your predecessor had
    fought for for a long time.
        So I now recognize Representative Carbajal, the gentleman
    from California. Mr. Carbajal sits on the Committee of Armed
    Services, T&I, Agriculture. And T&I is where he serves as the
    ranking member of the Coast Guard and Maritime Transportation
    Committee.
        So thank you for being here.

       STATEMENT OF THE HON. SALUD CARBAJAL, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. CARBAJAL. Thank you, Chairman Smith and members of the
    committee. I am here today to encourage your committee to
    consider and pass a bipartisan bill that I wrote with my
    colleague, Republican colleague Lori Chavez-DeRemer from
    Oregon, as well as small business owners on the central coast
    of California.
        I am sure there are many people here today that will claim
    that their bills are simple and straightforward. But our bill,
    the Child Care Investment Act, really is. We are just trying to
    make sure that the Federal child care tax incentives already in
    our tax code are actually working.
        We already have a current tax credit set up to help
    businesses offer child care as an incentive when hiring and
    retaining workers. We just want to update it and expand the
    ways they can provide that child care. Yes, we already have a
    tax structure set up for families to save for child care tax-
    free. This legislation updates the cap on the child care FSAs,
    which in this case are called Dependent Care Assistance Plans,
    to keep up the current cost of care.
        Keep in mind, these caps have not been updated since the
    1980s, and we already have tax credits to help working families
    who may be struggling to cover child care expenses. We just
    want to make sure this tax credit is updated and keeping up
    with inflation.
        The Child Care Investment Act has the support of multiple
    different Chambers of Commerce from my district, as well as the
    First Five Years Fund, the Bipartisan Policy Center, and the
    Early Care and Education Consortium. And it is my understanding
    the U.S. Chamber of Commerce is also supportive of these types
    of policies. And did I mention it is bipartisan?
        Child care, without a doubt, is a pressing economic issue.
    It keeps families out of the workforce if they can't find the
    care they need. It prevents businesses from hiring, expanding,
    or operating at the levels they want if they cannot find the
    workers they need. As this committee considers updating our tax
    code to support our small businesses and working families, I
    hope you will consider including this common-sense, bipartisan
    bill.
        [The statement of Mr. Carbajal follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. CARBAJAL. Thank you so much, Mr. Chair. I yield back.
        Chairman SMITH. Thank you, Representative. I appreciate
    your attendance today in regards to this piece of legislation.
        Providing for working-class families is a huge priority of
    mine as chairman. And I look forward to looking into more of
    this legislation.
        Mr. CARBAJAL. Thank you.
        Chairman SMITH. Mr. Wittman, it is a pleasure to have you
    before the House Ways and Means Committee.
        Mr. Wittman is the gentleman from Virginia. He is a member
    of the House Natural Resources Committee, the Select Committee
    on China, and the Armed Services Committee.
        It is a pleasure to have you.

    STATEMENT OF THE HON. ROB WITTMAN, A REPRESENTATIVE IN CONGRESS
                   FROM THE COMMONWEALTH OF VIRGINIA

        Dr. WITTMAN. Mr. Chairman, thank you, and thank you so much
    to the committee for allowing me to speak today on H.R. 1477,
    the Freedom to Invest in Tomorrow's Workforce Act.
        We see the world around us today, and we know we have to
    have a strong, well-rounded, and properly skilled workforce in
    order to make sure we are successful in what has become a
    global competition. In this increasingly technical world where
    we have to digitize things, and where we know that advanced
    skills are critical, it is vital that we have workforce
    development opportunities for folks to be able to develop those
    skills. We know, if they are going to have those well-paying
    jobs, we know if they are going to be able to support their
    families, we know if they are going to add to economic growth
    in their communities they have to have these skills.
        If we look at America's workforce today, we see that, of
    the jobs in the future, 60 percent of those jobs will not
    require a two or four-year degree, but they will require post-
    secondary education. Much of that education is very
    specialized.
        Another element we have to remember, too, is that we think
    sometimes, I think, disparagingly on that additional training
    that is needed post-high school or post-secondary education. We
    look at it and go, oh, that is only hundreds of dollars here or
    there. That is not a big difference.
        Mr. Chairman, for an individual or a family that is working
    on a fixed income, hundreds of dollars might as well be
    thousands of dollars. It denies them the opportunity that they
    need to get the skills and education that allow them to
    advance. We want them to have those opportunities.
        If you look at the statistics, let's take the Virginia
    Department of Labor Statistics from 2021. We saw that 72
    percent of Virginians surveyed said that they were interested
    in completing training that would enhance their job-related
    skills. Despite the decline of what is being offered now by
    employers--employers are offering much fewer opportunities to
    get that advanced education necessary to advance your skill
    set--it is clear that the American people want options in order
    to pursue this additional training, and that is the main reason
    why I introduced the Freedom to Invest in Tomorrow's Workforce
    Act.
        This education--or excuse me, this legislation--makes
    certification and credentialing programs eligible for 529
    savings account use. So it is not just now, under this bill,
    limited to two and four-year degrees, it would be for any post-
    secondary education.
        It would also include things like not just tuition, but
    also exam costs, supply costs related to workforce training.
    Many times when you are, let's say, go to a welding course, you
    need to bring certain tools and supplies with you. This allows
    those accounts to be used for more than just two and four-year
    degrees.
        Under the Freedom to Invest in Tomorrow's workforce Act,
    too, the credentialing and certification programs that would be
    eligible are also ones that are certified. They are certified
    under the Workforce Innovation and Opportunity Act and
    accredited by the National Commission on Certifying Agencies,
    the American National Standards Institute, or ones that are
    identified by the Department of Labor regulations or
    guidelines, and these will be deemed as eligible uses.
        So it puts specific limitations on it. I know folks have
    said, well, you have to worry about some programs just being
    there to take students' money. No, this is going to assure that
    these are credentialed programs that provide value, provide
    education that results in a certification or credential that is
    necessary in a field in order for somebody to get enhanced job
    opportunities. This distinction, I think, really reduces the
    uncertainty for 529 savings account users and for regulators so
    we know that, if it is eligible, parents don't have to worry
    about, ``are their dollars going to a use that is going to
    provide value for their child?''
        Mr. Chairman, I am really committed to the success and
    development of our workforce, and I believe that this will do
    an incredible amount to be able to do that.
        There is a group called Tomorrow's Workforce Coalition. It
    is over 500 different organizations. They are in full support
    of this bill. We have approaching 70 cosponsors for the bill.
    This is really, I think, gaining traction because people look
    at this and go, yes, why can't we use those 529 savings
    accounts, the dollars that parents set aside tax free?
        Mr. Chairman, as I talk to parents across not just
    Virginia, but across the nation, I ask them by a show of hands.
    I said, ``When you begin saving for your child,'' which most of
    the time is when they are in middle school, ``how many of you
    know where your child is going to be in their process of
    selecting post-secondary education when you start saving?'' Not
    a single hand in the room goes up. But they want to make sure
    that those dollars that they save and have the tax advantage to
    can be used for anything that their child wants to pursue, even
    if they are not sure what it is early on, and that it may not
    be a two or four-year degree program.
        So I would urge strongly the committee to reflect upon
    where the needs are of our workforce, where the desires are of
    our working families, of our parents, of industry, of folks
    that say, ``This is what we need for a workforce, this is what
    parents want to have an opportunity for their children.'' This
    is what we need to do to make sure those resources are
    available to assure that our families continue to have those
    opportunities, and our workforce grows with those skills.
        So I would urge the committee to seriously consider H.R.
    1477, the Freedom to Invest in Tomorrow's Workforce Act, and
    should consider any changes to the 529 savings account as part
    of a process that will result in more opportunities for
    individuals and for our workforce in the future.
        [The statement of Mr. Wittman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Dr. WITTMAN. So, Mr. Chairman, thanks again. Thanks for the
    opportunity, and thanks for the consideration.
        Chairman SMITH. Congressman, thank you. Thank you for being
    here. I am a strong believer that there are many different
    educational paths for Americans to take, and we need to make
    sure that our tax code does not incentivize one path more than
    the other. They all should be treated the same. So I appreciate
    your testimony today.
        It is good to now recognize Representative John James to
    the House Ways and Means Committee. Representative James is
    from Michigan, graduated from the United States Military
    Academy, and served eight years in the Army, participating in
    multiple tours of duty in Operation Iraqi Freedom, and is an
    Apache pilot.
        We are glad you are here.
        [Pause.]
        I think your microphone is off. Just got to push the
    button.
        Mr. JAMES. A rookie mistake. Thank you, Mr. Chairman.

    STATEMENT OF THE HON. JOHN JAMES, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF MICHIGAN

        Mr. JAMES. Mr. Chairman, there is a hopelessness crisis in
    this country. Americans feel like everything is broken, nothing
    is working for them. That is why a recent polling shows 74
    percent of Americans feel like we are heading in the wrong
    direction.
        I am in my district and I talk to families who are deeply
    disenchanted with the government. They wonder if anyone is
    working for them. They wonder if anybody cares. Well, I know we
    care. And Mr. Chairman, I echo your sentiments that there
    should be many pathways to prosperity, particularly through
    education. And I am here to urge support in those sentiments of
    H.R. 531, Educational Choice for Children Act, and my bill,
    H.R. 4520, Reignite Hope Act.
        First, education. We must put our children first, not
    teachers' unions, not D.C. politicians, our children. I want
    all schools to be successful, Mr. Chairman: public schools,
    private schools, charter schools, home schools, vocational
    schools. I truly believe that where parents have choice,
    children have a chance.
        Parents deserve to send their children where they will be
    safest and most successful, where they will have outcomes that
    are not determined by their zip code. Because we all in this
    body, in our Republican majority, believe that a quality
    education is a basic civil right. So regardless of our
    political stripes, party stripes, party ideology, one thing is
    clear: school choice goes the farthest in addressing this
    hopelessness epidemic, and it ranks high among Americans,
    especially American parents.
        In fact, a recent study found that school choice has
    support of 80 percent of Republicans, 60 percent of Democrats,
    and 69 percent of independents. I don't know a single parent
    out there who doesn't want more choice when it comes to their
    child's education. For this reason, I am proud to sit here
    today and voice my strong support for H.R. 531.
        H.R. 531 isn't just a bill, it is a game changer for
    millions of children around the country, many of whom have no
    other option. In fact, we have seen the impact of choice at the
    state level, with 25 states greenlighting similar programs to
    provide families with more choice, not less. Not only is this
    bill common sense, it is a no brainer. It is also good policy.
    It is the right thing to do. And it is about time that Congress
    and the President get on board with the desires of the parents
    of this nation.
        When this bill was brought to my attention, I was excited
    to cosponsor for several reasons. This bill checks all the
    boxes.
        For starters, the Educational Choice for Children Act has
    garnered more support than any other school choice bill
    introduced in Congress ever.
        Second, this bill doesn't require any new spending. I
    repeat, no new spending. There is something that we need to do
    more of here in Washington.
        Third, this bill doesn't increase the size or scope of
    government.
        Lastly, it tells the Department of Education to take a
    hike, empowering students and their parents, where it should
    be, at the lowest level in this nation. And it is about time.
        The choice is clear. Congress can do nothing, leaving
    millions of families and their children behind, or we can come
    together to put our families and students first, not special
    interests, and vote to send this bill to the President's desk.
    Families deserve a choice, and our students deserve a fighting
    chance. Anything less is unacceptable, un-American.
        I urge my colleagues to support not only H.R. 531,
    Educational Choice for Children Act, but also my bill which is
    the Reignite Hope Act.
        The Reignite Hope Act, H.R. 4520, endeavors to increase
    child tax credit to 3,500 for each child ages zero to five, and
    4,500 to each child ages six to 17. This is to help both
    parents who are struggling to make ends meet during these
    inflationary times, and also help care workers to be able to
    afford to do the most important job in the world: to look after
    our children.
        It also provides a $3,500 tax credit for incentivizing the
    hiring of critical needs employees, helping boosting sectors of
    the economy desperate for workers: nurses, caregivers, public
    safety officers. That is right, the police officers,
    firefighters, EMS who put their lives on the line, and our
    caregivers who look after the mentally infirm, our children,
    and also our elderly would be getting a boost.
        Tax credits target areas in the greatest need in our
    Opportunity Zones all across the country, but specifically in
    my county, which has 17 of these zones in six communities:
    Clinton Township, Eastpointe, Mount Clemens, Roseville,
    Sterling Heights, and Warren, making this a district focus and
    an America first policy.
        Mr. Chairman, I appreciate the time to speak with you here
    today, and I urge the support of my colleagues on these two
    bills.
        [The statement of Mr. James follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. JAMES. Mr. Chairman, I yield back.
        Chairman SMITH. Thank you, Congressman, for being here.
        We do plan over the next couple of months to have a hearing
    in regards to education freedom, which is extremely important
    for all Americans. And so I think you will be happy where we
    are leading with that.
        Mr. JAMES. Thank you, Mr. Chairman.
        Chairman SMITH. I now recognize the Representative Clay
    Higgins, the gentleman from Louisiana. Mr. Higgins is an Army
    veteran and law enforcement officer serving on the House
    Homeland Security Committee and Oversight and Accountability
    Committees.
        It is great to have you with us, Mr. Higgins.

        STATEMENT OF THE HON. CLAY HIGGINS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF LOUISIANA

        Mr. HIGGINS. Mr. Chairman, thank you for taking your
    personal time to allow members to speak before your committee
    on our individual bills. We recognize it is incredibly time-
    consuming, and requires great dedication from you. So thank you
    for giving me a chance to speak for a minute.
        There is an appropriate role, Mr. Chairman, for regulatory
    enforcement and authority reflective of that enforcement within
    the federal government. But there is a requirement to balance
    the rights of our individual citizens across the country and
    every sovereign state to feel safe and secure in their
    properties, their business, their residence, et cetera. They
    should not feel threatened by their federal government.
        So my bill, H.R. 4416, called the No Funds for Armed
    Regulators Act of 2023, was born of my own interactions with
    constituents that, to my horror, I discovered once I came to
    Congress seven years ago this is a far too regular theme, where
    regulators from--especially from the IRS, the DoL, and the EPA
    will roll into a private business or, in many cases, a farm in
    an unmarked police car. It is unexpected, an unannounced visit.
        This farmer sees this car coming up the long gravel
    driveway, recognizes maybe it is a police car, but what are
    they doing here? And two unknown agents get out, and they are
    armed, and they have quite an attitude in most cases, my
    investigation has revealed, and they are there to enforce this
    regulation or that regulation. And that individual American at
    that time is fearful and intimidated, and it is an unnecessary
    intrusion into their lives and oppression of the sanctity of
    their business and their home in the interest of enforcing a
    regulation.
        So a regulator has every right to perform within the
    parameters of the law to do his job. He doesn't have to be
    armed. That is a bridge too far for these armed agents from the
    IRS, EPA, DoL rolling into a private American's life,
    frightening that American, scaring that family. It is uncalled
    for. It is literally the most extreme weaponization of the
    federal government against American people.
        If a regulator thinks he has a problem with American
    citizens, he can call local law enforcement. It used to happen
    all the time, all the time. If a regulator was going onto land,
    wasn't exactly sure how to get there, maybe long gravel roads,
    et cetera, especially in agricultural areas, they would call
    the sheriff's office. The sheriff's office would send a deputy
    and escort them out there. No problem. That family, that farmer
    knows that sheriff, recognizes that car. That is his sheriff,
    that is his deputy. That is much more of a peaceful engagement.
        But things have changed over the last several years, and it
    is the responsibility of Congress to fix it. So quite simply,
    my bill would disarm these armed regulators that do have a job
    to do. But just like your city code enforcement or your county
    code enforcement, could you imagine your city code enforcement
    having a report that say the gate on the fence around your pool
    was off the hinges? So can you imagine an armed team showing up
    at your home, rolling into your backyard to observe your broken
    gate and giving you a citation? That is the kind of regulatory
    enforcement we are dealing with that we have to put the brakes
    on.
        My bill would spend less money from the federal government
    and help to restore the sanctity and individual rights and
    freedoms of individual Americans across the country. I urge
    broad bipartisan support to this bill. It should pass Congress.
    It is the right thing to do. And I am prayerful that my
    colleagues will support the bill.
        [The statement of Mr. Higgins follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. HIGGINS. Thank you, Mr. Chairman, for allowing me to
    speak.
        Chairman SMITH. Mr. Higgins, thanks for your testimony.
        A few years ago I was visiting a business in our
    congressional district, and I will never forget that after we
    toured the business we went into the office. And all of a
    sudden, two regulators walked in while I was there, armed with
    their badges. And the faces on those business owners that I saw
    when they walked in, fearful of what was going on, and they
    happened to be with Revenue. So I have seen it firsthand of how
    it can displace a regular propane distributor minding their own
    business, and it wasn't even there for them.
        So thank you. Thank you for your testimony, and thank you
    for this legislation.
        I am pleased to recognize Mr. Matt Rosendale from the great
    State of Montana. Matt was a member of the Montana House and
    Montana Senate.
        And I think you served as majority leader when you were
    there, and also as the auditor of Montana before you came to
    Congress. So it is a pleasure to have you in the House Ways and
    Means Committee.

       STATEMENT OF THE HON. MATT ROSENDALE, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF MONTANA

        Mr. ROSENDALE. It is a pleasure to be here for my maiden
    voyage before you, Chairman Smith. I appreciate it.
        And very similar to my colleague from Louisiana, I too have
    a piece of legislation that I would like to introduce that
    describes and tries to eliminate the ability for our regulators
    to be armed.
        My bill would prohibit President Biden's weaponized
    Internal Revenue Service from using taxpayers' dollars to
    purchase firearms for the agents. Recently, 20 IRS agents with
    full body armor and ARs conducted a raid at the Highwood Creek
    Outfitters in Great Falls, Montana. Not the ATF, the IRS. There
    was one ATF agent in attendance with them, but there were 20
    IRS agents.
        I am convinced that this was done not only to intimidate
    the owner of that facility, but they were completely armed and
    outfitted with body armor and took possession of his property
    for the day. This was to intimidate the customer base that he
    had long established in the City of Great Falls for many years,
    so that they could say, you better not mess with the IRS or
    this can happen to you as well. Very concerning to myself, and
    to the entire community, and to the residents of Montana.
        Biden's IRS has no business intimidating hardworking
    Montanans. Why Does the IRS Need Guns Act would require that
    the IRS transfer all firearms and ammunition in the agency's
    possession to the General Services Administration within 120
    days. From there, firearms and the ammunition can be auctioned
    off to federal firearms licensees, with the proceeds being used
    to reduce the out-of-control federal deficit that we all are
    trying to address right now.
        Additionally, my legislation would shift the IRS Criminal
    Investigations Division within the Justice Department.
        The Biden-controlled IRS spent over $5 million on weaponry
    and tactical gear in 2021, and just last year began advertising
    job postings which listed, and I quote, ``carry a firearm and
    be willing to use deadly force'' as a major duty. This should
    scare every United States citizen.
        The American people are dealing with rising prices and a
    wide-open border. They do not deserve to be threatened or
    harassed by overzealous armed taxmen.
        [The statement of Mr. Rosendale follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. ROSENDALE. Thank you, Mr. Chairman, and I yield back.
        Chairman SMITH. Thank you all very much. I want to thank my
    colleagues for being here today.
        As I have said previously, the Ways and Means Committee
    does not traditionally allow for non-committee members to
    participate in the committee's process, and I wanted to change
    that. I wanted to make sure we heard from the Members'
    priorities throughout our entire conference, and today has been
    very beneficial to me, as being chairman, to hearing directly
    your passion and why you care about the issues that we have
    before you. And hopefully, we can get some things done.
        Please be advised that members have two weeks to submit
    written questions to be answered later in writing. Those
    questions and your answers will be made part of the formal
    hearing record.
        With that, the committee stands adjourned.
        [Whereupon, at 1:01 p.m., the committee was adjourned.]

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