[Congressional Record Volume 141, Number 170 (Tuesday, October 31, 1995)]
[House]
[Page H11462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE EARNED INCOME TAX CREDIT

  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, yesterday I was not able to complete my 
statement, and after that I had numerous phone calls and letters asking 
me to complete. Why? Because the American people deserve to know about 
the EITC, earned income tax credit.
  Many people do not know. I did not know until I joined Congress. This 
perhaps is the most severe attack, calling it mean spirited cutting, 
putting all of the poor people out in the cold.
  I would like to tell you, the American people, what is really 
happening on this EITC. First of all, what is EITC? That was 
established back in 1975. Originally the intent was good, to try to 
help those people who actually are working, those people who are 
working, but they do not earn enough to support their families. What we 
are trying to do is Government subsidize them, give them a credit. They 
call it a negative income tax. They call it subsidy to the working 
poor. Excellent idea. Nobody is complaining. I think it is a good idea.
  The Republicans are putting it, and the Democrats are putting it. 
What happened then?
  If you make less than $26,000 with kids, then Government again gives 
you a little subsidy. Now, what happened is this program became out of 
control. Look at what happened here.
  When this started in 1975, it only cost the Government $1.2 billion. 
Then about 10 years later it cost about $2.5 billion. But since then, 
we, Congress, keep changing the law to be expanding, it raised income 
level, and the eligibility has kept changing. Now you do not have to 
have a family. Anybody can receive this EITC credit without having any 
family. Even a single person can do it.
  From then on, look what happened. Costs have gone up, gone up 1,000 
percent, from $2.5 to $25 billion, absolutely out of control. This is 
what is happening now.
  Why do we not recognize this serious problem? I do not know. 
Colleagues have been dominating, controlling our Congress 40 years. Why 
did they not address this problem previously? A bureaucrat, can they 
not see it? It is out of control, a 1,000-percent increase. Why do they 
not come up with some idea to control this thing? We did, in the budget 
reconciliation package.
  Let me tell you what we are proposing to do. We said, ``By golly, we 
cannot let this go.'' If you do not think so, costs have gone up to $36 
billion. What we are trying to do is control cost, bring it down a 
little bit, down to $31 billion, from $36 billion to $31 billion, 
trying to control this out-of-control spending speed. Now, what is 
wrong with that? You call that a deep cut? I mean, gutting it? Call 
that a mean spirited cut? All we are trying to do is trying to control 
this out-of-control spending.
  Why is it? Because there is a lot of waste and fraud going on. 
According to a report, it said more than 1 million people are receiving 
the EITC illegally, and GAO study says 40 percent of EITC recipients 
are illegally receiving more money than they deserve.

                              {time}  0930

  The waste and fraud is totally out of control. That is what we are 
trying to control.
  What we proposed on this reconciliation package is as follows: No. 1, 
we are going to stop giving those folks money if they do not have any 
children to support. We are going back to our original intent, just 
folks who have children. What is wrong with that?
  Second, we are going to eliminate waste and fraud. We are going to 
make it tough for them to apply for the EITC credit. They have to have 
proof. Those two combinations alone can save $5 billion, easily. By 
doing it, we can balance the budget within 7 years.
  Now, what does that mean, balancing the budget in 7 years? According 
to the Wharton Business School, they predict if we balance the budget, 
the interest will go down by 4 percent. All right. Even if interest 
rates fall by even 1 percent, the family who currently has a $100,000 
mortgage at 8 percent would save $30,000. Can you imagine if we balance 
the budget, if you own a House with a mortgage of $100,000 at an 8-
percent interest rate, you can save $30,000? Further they say GNP will 
go up 28 percent, creating 20 million additional jobs. That is what we 
are doing. Mr. Speaker, come on, we are not trying to put those people 
out in the cold.

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