[Congressional Record Volume 143, Number 101 (Wednesday, July 16, 1997)]
[House]
[Pages H5382-H5383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




REPUBLICANS ON THE SIDE OF THE WEALTHY WHILE DEMOCRATS ARE FIGHTING FOR 
                         MIDDLE-CLASS FAMILIES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Connecticut [Ms. DeLauro] is recognized for 5 minutes.
  Ms. DeLAURO. Mr. Speaker, yesterday Speaker Gingrich stood in the 
well of this House and he invited, as my colleagues just did, the 
American people to visit the House Republican web site, calculate their 
estimated tax savings under the Republican plan. So I thought let us 
see how the average working taxpaying mother with two kids would fare 
under the Republican plan.
  So I entered in an income of approximately $25,000. I received an 
error message saying that they could not calculate her savings. Perhaps 
that is because this family would get a big fat zero, no tax break at 
all under the Republican tax plan.
  Then I entered in the data for someone making $1 million a year, half 
of that in capital gains. The Republican calculator had no problem 
figuring out their tax break, $40,000.
  That is right, a millionaire gets $40,000 back, and the average 
working taxpaying mother gets nothing, gets zero.
  The Washington Post editorial this morning hit it right on the nose, 
and I quote: ``The Republicans have written a tax bill tilted heavily 
toward the better off.''
  If anything, this was an understatement. The Post labels their 
editorial, and I quote again, ``Tax Trash,'' which perfectly describes 
the Republican tax bill. In fact, there are so many bad things in this 
bill it is hard to know where to begin.
  But let me tell you the story of three young people which drives home 
the point of how unfair this Republican tax proposal really is.
  Today I received a visit from three students: Anthony Dugdale, Scott 
Saul and Lori Brooks. They are all graduate students at Yale University 
in my hometown of New Haven. These young people took the train all 
night from Connecticut for the express purpose of protesting the fact 
that in this bill the Republicans actually raised taxes on graduate 
students in this country, and they brought with them the signatures of 
600 other graduate students protesting this provision in the Republican 
tax plan.

[[Page H5383]]

  These students are rightly outraged that Republicans are planning to 
reward their hard work as research assistants and teaching assistants 
by raising their taxes on the grants and the tuition waivers that they 
receive. These young people, if you heard them speak today, are 
committed to education, they are committed to working in their 
community, they are committed to a teaching profession. Under the 
present tax program a student receiving a $10,000 cash stipend for 
being a teaching assistant and a $20,000 tuition waiver would only be 
taxed on a stipend. If the student pays 15 percent of his or her 
stipend in taxes, $8,500 remains for living expenses. Under the 
Republican plan, the stipend and tuition waiver will be taxed; that has 
not happened in the past, leaving the student with only $5500 to live 
on. This is a $3,000 or a 35 percent cut in the student's net income.
  Mr. Speaker, these are youngsters from working middle class families 
trying to make their way and to be able to get a higher education. 
Calling waivers and grants financial incentives, which is what the 
Republicans are calling these waivers, this equates these young people 
with what they are getting in terms of a higher education tax relief 
with company cars and other perks given to the top corporate executives 
in this country. In reality, taxing grants and tuition waivers will 
penalize America's future educators and public servants.
  I will tell you that these young people and their families are being 
squeezed in order that my Republican colleagues can provide a tax break 
to the richest corporations in this country, the Exxons, the Boeings. 
They would repeal the alternative minimum tax. That is the rate at 
which the richest corporations pay taxes in this country. They will 
repeal their tax obligation or scale it back, therefore providing up to 
$22 billion in a tax break, and they would, in fact, raise the taxes on 
graduate students in this country.
  Mr. Speaker, it is unfair, and it is wrong, and it should be 
defeated.
  Mr. Speaker, I include for the Record the Post editorial.

                               Tax Trash

       The Republicans have written a tax bill tilted heavily 
     toward the better-off. The Democrats, led by the president, 
     have rightly called them on it. No matter that in agreeing to 
     the budget deal earlier this year, they were paving the way 
     for what they now deplore; they have the Republicans on the 
     defensive.
       The Republicans in turn have adopted a new technique. 
     Rather than argue as they might have done in the past about 
     the virtues of the bill, they engage in distortion. It used 
     to be otherwise on taxes. The question of who would benefit 
     from a bill--who would be the first-order beneficiaries--
     would be left to the professionals. They would put together 
     so-called distribution tables according to fairly well-
     accepted principles. Then the politicians would argue about 
     the fairness of the bill, or lack of it, from an established 
     base. Defenders of a bill such as this might say it was 
     necessary to encourage savings and investment and thereby 
     stimulate economic growth, or that it would have the useful 
     effect of limiting governmental growth in that if the 
     government had fewer revenues it would be less disposed to 
     spend. Or they might make the political argument, faint 
     echoes of which are still heard, that those who were charging 
     unfairness were indulging in the somehow seamy politics of 
     envy and class warfare.
       All fair enough, but now the argument is in a different 
     place. The people who wrote this bill aren't defending its 
     distributional consequences; they're denying them. The plain 
     facts are that the bill over time would not just mainly 
     benefit the better-off but would cost the government revenues 
     it can't afford; the bill is carefully written in such a way 
     as to make the revenue loss look small at first. Then it 
     soars. It's not just the Treasury (and thereby the 
     administration) that says so, using accepted methods and 
     conventions of analysis. The Congressional Research Service 
     and the vast majority of other analysts do so as well. 
     Congress's Joint Committee on Taxation says otherwise. The 
     JCT was once the great redoubt of integrity in such matters. 
     It has been converted into a political parrot.
       Everyone understands that this is a backloaded bill. Its 
     short-term effects are not reflective of its likely long-term 
     consequences. It will take 10 years or more for its main 
     provisions to begin to have their full effect. The JCT staff 
     nonetheless persists, at the behest of its masters, in 
     putting out five-year estimates whose principal function is 
     to distort that effect. It violates its own proud tradition 
     in doing so. It uses illusory accounting to make the capital 
     gains and other tax cuts in the bill appear for a time to be 
     tax increases.
       There is always some gamesmanship surrounding tax bills. 
     Inflated claims are made. One side will tell you that the 
     entire economic future depends on passing a certain 
     provision, and the other will tell you that the same future 
     depends on defeating it. But there used to be a basis of 
     trust underlying the debate as well. You could be confident 
     that at a certain level you were being told the truth about 
     the consequences of a bill. In their trashing of the 
     estimating process in order to justify a tax policy that 
     doesn't deserve to survive, the Republicans have destroyed 
     that trust. That may be the worst consequence of this 
     legislation, which already was awful enough.

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