[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[House]
[Pages H5493-H5494]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE TRUTH IS IN THE NUMBERS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 21, 1997, the gentleman from Florida [Mr. Stearns] is 
recognized during morning hour debates for 5 minutes.
  Mr. STEARNS. Madam Speaker, I will bet most Americans would be 
surprised to realize that they are rich. To accomplish this amazing 
feat, the Clinton administration has formulated a new exercise in 
wordspeak that simply defines a significant portion of all Americans as 
rich. But, frankly, most Americans probably do not feel rich. Most 
probably rely on two incomes, have a couple of children, a lot of bills 
to pay and, in fact, feel very far from being rich.
  But, more than anything else, Madam Speaker, they deserve a tax break 
today. Well, why should the White House have any interest in inventing 
a new measurement of wealth? Well, it is actually quite simple. In 
order for the administration to score political points at the expense 
of hard-working middle-class Americans, they must create millions of 
wealthy taxpayers where none exist.
  For decades, American taxpayers have paid taxes based upon the 
adjusted gross income, the AGI. The AGI is a rather simple and 
straightforward calculation of earnings. It is at the bottom of the 
first page of everyone's tax return.
  Perhaps the AGI is too simple for the White House, for they have 
worked diligently over the recent past to prejudice the AGI and with it 
the tax package that the President initiated. They have done everything 
in their power to modify and create a new formula to

[[Page H5494]]

calculate the supposed wealth of American taxpayers today.
  Here is how it works. Instead of using the adjusted gross income in 
tax computations, the administration uses a complicated formula known 
as the Family Economic Income, or FEI, which adds to one's income the 
fringe benefits they receive every year: Keogh deductions, most 
nontaxable cash transfer payments, the buildup of the IRA, your 
pension.
  Here is the real catch. The FEI even adds something known as imputed 
rental income, or what a family would earn if they were to rent out 
their home. What? Yes. If you had to rent out your home, that is part 
of your family income.
  To say the least, this is an unusual and rather inaccurate definition 
of a family's income. To say the most, the administration is engaging 
in political gamesmanship, designed solely to demagog an issue that 
otherwise only serves to assist middle-income Americans.
  Madam Speaker, put simply, by employing the imputed income 
calculation, the administration is able to considerably overstate 
income levels for most households today, making middle-class taxpayers 
appear to be much richer than they themselves would ever, ever 
recognize.
  For example, employing the administration's new income formula, 1.7 
million union members, 2.4 million teachers, 8.1 million government 
workers, and 4.2 million mechanics, repairmen, and construction workers 
are now considered rich by the administration and therefore are 
undeserving of a tax break.
  The problem is that the Clinton administration chooses to employ this 
odd income calculation to change the idea of who is wealthy. They are 
working hard to mislead the public and turn a positive situation into a 
negative political game.
  The bottom line is this: The Republican tax plan accurately targets 
America's middle-income class. In fact, 76 percent of the relief 
provided in the Republican plan will go to those Americans who make 
less than $75,000 a year. Although the President has worked hard to 
distort this fact, it remains difficult for anyone to argue that these 
Americans are rich and that they are undeserving of a tax break.
  Madam Speaker, the Republican Congress has passed real tax relief for 
all middle-class taxpayers at every stage of their lives, from child 
tax credits to estate tax reform. We are doing the right thing.
  Meanwhile, the President is trying to change the debate with this new 
``imputed rental income formula.'' But the truth is in the numbers; and 
no amount of imagined, imputed income will turn hard-working middle-
class Americans into what the President calls the evil rich.
  Middle-class Americans deserve a tax break today. The Republican 
Congress wants to give that to them. For the millions of Americans who 
do not consider themselves rich, for the two-earner families who 
struggle to provide a nice home and a good education for their 
children, for all the middle-class Americans, I implore the President 
today to put politics aside, stop the distortions, join the Republican 
Congress in providing some much-needed and much-deserved tax relief to 
middle-class Americans.

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