[Congressional Record Volume 142, Number 48 (Tuesday, April 16, 1996)]
[House]
[Page H3391]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               DISTRICT OF COLUMBIA ECONOMIC RECOVERY ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from the District of Columbia [Ms. Norton] is 
recognized during morning business for 5 minutes.
  Ms. NORTON. Mr. Speaker, as this body is aware, it has imposed a 
Control Board on the District of Columbia, which has become insolvent. 
The only reason there are not more cities in this category, of course, 
is because most cities have States. Nevertheless, New York, 
Philadelphia, and Cleveland, long before the District became insolvent, 
themselves became insolvent and had control boards.
  Control boards, of course, are necessary, because insolvent cities 
cannot borrow. One of the first things such cities need to do is to 
downsize their governments. That is exactly what is happening in the 
District of Columbia as I speak.
  The fact is, however, that every other city that has become insolvent 
had a dual strategy or they never would have become solvent. The State 
provided either some direct aid, as in the case of Philadelphia, or a 
takeover of functions and aid, as in the case of New York City.
  The District is a unique entity, and I have proposed a unique bill, 
the only alternative I can see, that provides any realistic way to 
counter the serious problems of the capital of the United States.
  The unique fact about this city, of course, to face first and 
foremost, is that it has no State to help it in any way. The Congress, 
which, of course, has an obligation to help it with a payment in lieu 
of taxes, because we cannot build on the best land in the District, has 
not raised the District's Federal payment in 5 years.
  Now, costs have gone up enormously in 5 years, so that means that the 
Federal payment is taking a loss every year that it is not raised. 
Congress, if anything, made it worse this year by shutting down the 
Government for a week and by delaying the full Federal payment for 6 
months, just digging the hole deeper.
  The Congress says the District cannot impose a commuter tax, even 
though 2 million people come in here using our facilities and walk out 
everyday without leaving a thin dime to support the city.
  If you look at no State to help us, no Federal payment increase in 5 
years, no commuter tax, you end up with no way out. It is the 
obligation of this body, that has constitutional responsibility for the 
capital of the United States and for every responsible person in this 
city, to think through how the recovery in fact is going to take place.
  Step one is in place. The District is going to reduce its work force 
by 10,000 people in the next 4 years. That is a 25-percent reduction in 
its own city government work force. I challenge any Member to show me 
any government that has had that kind of reduction in so short a period 
of time. Indeed, the District is halfway there, because of the 10,000 
positions that will go, it already has eliminated more than 5,000 of 
them. And yet this year, before half of the fiscal year was over, the 
District was down $100 million. You do not get out of insolvency that 
way.
  So yesterday on Tax Day, I introduced the District of Columbia 
Economic Recovery Act. It adopts the approach that Members on both 
sides of the aisle want the Congress to adopt, tax cuts for the 
District of Columbia, rather than direct aid; tax cuts in order to 
encourage middle income residents who live here now to remain, and 
others to come.
  In other words, the city would be able to support itself the old-
fashioned way, because there would be enough middle-income taxpayers to 
pay for what needs to be paid for. There would be a flat 15 percent 
rate that would have a progressive effect on the income scale, giving 
substantial Federal tax reductions to D.C. taxpayers.
  By the way, there is much to learn from my bill, I think, for the 
States. If you want to keep folks in New York, Newark, Chicago, and Los 
Angeles, perhaps the States should try reducing State income tax on 
taxpayers that remain in those cities, rather than allowing those 
cities to become what everybody knows they are becoming as I speak, and 
that is basket cases.
  You cannot afford to have the proud capital of your country become a 
basket case. You are going to pay one way or another. Let us pay for it 
by letting D.C. residents keep their own money. There also would be 
capital gains exemption for D.C. residents who invest in the District 
of Columbia.
  Yes, this is a unique remedy for a uniquely handicapped city. Read 
this morning's Washington Times editorial, ``A Serious Plan for What 
Ails the District.''

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