[Congressional Record Volume 141, Number 169 (Monday, October 30, 1995)]
[House]
[Pages H11382-H11383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         RESTORING EARNED INCOME TAX CREDIT TO ORIGINAL INTENT

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from California [Mr. Kim] is recognized during 
morning business for 5 minutes.
  Mr. KIM. Mr. Speaker, today I want to talk about the so-called EITC, 
[earned income tax credit]. I hope that my folks from California are 
listening to me this morning.
  I did not know anything about EITC until I joined Congress. I was 
busy running my own business, trying to support my family. I did not 
know what the EITC is. I know welfare. I know food stamps. I know a 
little bit about Medicare and Medicaid, but EITC, what does it do? That 
is what I would like to talk about this morning.
  Before I do, last week, this House passed the 1996 budget 
reconciliation bill. The bill was historic. It contains the spending 
cuts necessary to balance the budget by the year 2002, 7 years. 

[[Page H 11383]]
During this process, we have been hearing all kinds of 
misrepresentation, all kinds of distortion, sometimes flatout lies. Let 
me give some examples.
  They say we are cutting Medicare, when we are actually allowing 
Medicare spending to grow by $80 billion a year.
  They say we are cutting Medicaid, when we are actually allowing 
Medicaid spending to grow by $30 billion a year.
  They say we are cutting school lunches, when our plan increases 
spending on school lunches by over $1 billion over the next 5 years.
  What we are trying to do is slow down the growth of out-of-control 
spending. We have been spending and spending, and it has become out of 
control.
  But the biggest distortion, the biggest misrepresentation, is on the 
EITC. Let me talk about it this morning for a couple of minutes.
  What is the EITC? It was passed back in 1975. It is called earned 
income tax credit.
  What does it do? Well, the Government tries to help those people who 
work but do not earn enough money to support their families, children. 
Therefore, the Government helps them.
  If you make less than $26,000 a year, with kids, then the Government 
will match up to 36 percent of a person's income with a tax credit. In 
other words, as I said earlier, if you work full time but you cannot 
support your family, then Government supports you.
  How many people know about this EITC? I bet not that many.
  What is wrong with this program? Nothing. I think it is an excellent 
idea. I would rather see that we help the people who work every day 
than just give free handouts to folks who are not working. The free 
Government handouts, why would anyone try to work?
  It is an excellent program. We support it. Republicans support it. 
Democrats support it. I think it is a pretty good idea.
  What is wrong with it? The program has gone out of control. It is way 
out of control. Why? Because we keep adding more and more provisions, 
adding some other language, trying to add more people in it, gradually 
expanding it and expanding it. This EITC program, as a result, becomes 
out of control.

                              {time}  1245

  The original intent was to help those folks who have a family, 
children. But what happened? Now, anybody, even though you do not have 
a family, can get EITC credit. Look at this chart in here. It used to 
be sort of flat, about this time. About that time, we changed the laws 
so that anybody can claim, even if you are single, even if you do not 
have any family.
  It went up. It has gone up a thousand percent. The cost has gone up a 
thousand percent. The cost has gone up a thousand percent in the last 
10 years, totally out of control. That is what is wrong with it. It is 
not the program itself. It just has gone out of control.
  Why? Because waste and fraud in EITC had grown faster than the 
program itself. This is really a shame. IRS says that 1 million EITC 
recipients are illegally receiving this. One million people should not 
receive a penny of it. GAO says 40 percent of EITC recipients are 
illegally receiving more money than they deserve, more money, more than 
they are entitled to. That is what is wrong with this. That is why it 
has gone up a thousand percent.
  The waste and fraud in the program has gotten so bad that IRS lately 
had to stop issuing electronic tax refunds because of EITC fraud 
schemes.
  Mr. Speaker, I will continue tomorrow.

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