[Congressional Record Volume 143, Number 89 (Monday, June 23, 1997)]
[Extensions of Remarks]
[Page E1300]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                        AN OPTION WORTH WATCHING

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                           HON. NEWT GINGRICH

                               of georgia

                    in the house of representatives

                         Monday, June 23, 1997

  Mr. GINGRICH. Mr. Speaker, the gentleman from Texas, the Ways and 
Means Chairman, Mr. Archer, has developed a tax relief plan to help 
restore our Nation's Capital, the District of Columbia. I enter into 
the Congressional Record an editorial from the Washington Post which, 
recognizing that a tax incentive plan is the sole solution to the 
troubles of the District, still concludes that it is an option ``worth 
watching.''

               [From the Washington Post, June 11, 1997]

                   Mr. Archer's Plan for the District

       House Ways and Means Committee Chairman Bill Archer's tax 
     incentive plan for the District has encouraged a chorus of 
     carping from city officials who predict that the measure 
     won't stem the middle-class exodus to the suburbs. Perhaps to 
     their surprise, Rep. Archer agrees. ``The single biggest 
     thing that the District of Columbia needs to do,'' he told a 
     press conference at the bill's unveiling, ``is to create an 
     environment that is healthy for people to live and to work 
     and to educate their children. * * * There are no changes in 
     the tax code that are going to be enough to accomplish 
     that.''
       Rep. Archer's appraisal was both candid and realistic. The 
     District's tax code isn't the chief reason more than 50,000 
     residents have fled the city in the 1990s alone. A host of 
     problems--including poor schools, crime, broken city services 
     and abysmal local leadership--are responsible. The District's 
     survival will depend less on tax cuts than on a wide variety 
     of policies and actions that directly address those ills. 
     Fixing the school system, imposing financial accountability 
     and management reforms in the government, improving public 
     safety and adopting the president's plan to take over some 
     burdensome state-level responsibilities and costs will go a 
     long way toward creating a stable and livable city.
       Tax cuts, whether they benefit the majority of residents or 
     are focused on the city's poorest neighborhoods, aren't going 
     to provide the city with a sustainable revenue base. Yet to 
     dismiss the GOP tax-break proposals out of hand may be 
     shortsighted and self-defeating too.
       Businesses are leaving town, and the city is having trouble 
     attracting new firms. Much the same applies to middle-income 
     residents. Rep. Archer believes tax relief could become a 
     magnet for residents and businesses in certain economically 
     depressed areas of the city such as Anacostia, Mount Pleasant 
     and Chinatown. Whether tax breaks would keep and attract new 
     residents or spur investment and job creation in the 
     District's struggling areas is an open and untested question 
     in this city. At $325 million in tax relief spread out over 
     five years and targeted on about 80,000 of the city's 554,000 
     residents, it's an expensive gesture, if not gamble.
       Control board chairman Andrew Brimmer believes the plan's 
     economic impact would be ``slight.'' House Speaker Newt 
     Gingrich, on the other hand, reportedly views the D.C. tax 
     package as a ``demonstration project that Republican free-
     market solutions are the best way to solve the problems of 
     our nation's inner cities.'' It's an experiment worth 
     watching.

     

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