[Congressional Record Volume 144, Number 81 (Friday, June 19, 1998)]
[Extensions of Remarks]
[Pages E1178-E1179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               INTRODUCTION OF THE TAXPAYER'S DEFENSE ACT

                                 ______
                                 

                          HON. GEORGE W. GEKAS

                            of pennsylvania

                    in the house of representatives

                         Friday, June 19, 1998

  Mr. GEKAS. Mr. Speaker, today I join with Mr. Hayworth and 52 of our 
colleagues to introduce the Taxpayer's Defense Act. This bill simply 
provides that no federal agency may establish or raise a tax without 
the approval of Congress.
  One of the principles on which the United States was founded was that 
there should be no taxation without representation.
  In the Second Treatise of Government, John Locke said, ``[f]f any one 
shall claim a power to lay and levy taxes on the people, . . . without 
. . . consent of the people, he thereby . . . subverts the end of 
government.'' Consent, according to Locke, could only be given by a 
majority of the people, ``either by themselves or their representatives 
chosen by them.'' The Boston Tea Party celebrated Americans' opposition 
to taxation without representation. And the Declaration of Independence 
listed, among the despotic acts of King George, hie ``imposing Taxes on 
us without our Consent.'' First among the powers that the Constitution 
gave to the Congress, our new government's representative branch, was 
the power to levy taxes.
  The logic of having only Congress establish federal taxes is clear: 
only Congress considers and weighs every economic and social issue that 
rises to national importance. While any faction, agency, or sub-agency 
of the government may view its own priorities as paramount, only 
Congress can decide which goals are of the importance to merit spending 
taxpayer dollars. Only Congress can determine the level at which 
taxpayer dollars should be spent.
  The American ban on taxation without representation has not been 
seriously challenged

[[Page E1179]]

during our nation's history. The modern era of restricted federal 
budgets, however, threatens to erode the essential principle of ``no 
taxation without representation.'' In ways that are often subtle or 
hidden, federal agencies are taking on--or receiving from Congress--the 
power to tax. They may tax by adding extra charges onto legitimate fees 
charged for services they provide. They may tax by requiring businesses 
to take on affirmative obligations (as opposed to complying with 
proscriptions on behavior that harms the public) as a condition of 
operating. Administrative taxes pass the costs of government progrms on 
to American consumers in the form of higher prices. These secret taxes 
tend to be deeply regressive and they add inefficiencies to the 
economy. The take money from everyone without helping anyone.
  The worst example of administrative taxation is the Federal 
Communications Commission's Universal Service Tax. ``Universal 
service'' is the idea that everyone should have access to affordable 
telecommunications services. It originated at the beginning of the 
century when the nation was still being strung with telephone wires. 
The Telecommunications Act of 1996 included provisions that allowed the 
FCC to extend universal service, ensuring that telecommunications are 
available to all areas of the country and to institutions that benefit 
the community, like schools, libraries, and rural health care 
facilities.
  Most importantly, the Act gave the FCC the power to decide the level 
of ``contributions''--taxes--that long-distance providers would have to 
pay to support universal service. The FCC now determines how much can 
be collected in taxes to subsidize a variety of ``universal service'' 
spending programs. It charges long-distance providers, who pass the 
costs on to consumers in the form of higher telephone bills. In the 
first half of 1998, the tax was $625 million, and the Clinton 
Administration's budget projects it will rise to $10 billion per year. 
Mr. Speaker, this administrative tax is already out of control.
  The FCC's provisions for universal service have many flaws. Among 
them are three ``administrative corporations'' set up by the FCC. The 
General Accounting Office has determined that the establishment of 
these corporations was illegal. The head of one of these corporations 
was, until recently, paid $200,000 dollars per year--as much as the 
President of the United States. And reports are already coming in about 
sweetheart deals between government contractors and their State 
government friends, who have access to huge amounts of easy universal 
service money.
  The FCC has been contumacious to the will of Congress in implementing 
the Universal Service Tax. Chairman Bliley has assiduously pursued the 
FCC's missteps and misdeeds, as have I. In the Commercial and 
Administrative Law Subcommittee, I chaired a hearing on administrative 
taxation, focusing particularly on the Universal Service Tax, on 
February 26, 1998, at which I raised several issues and concerns. The 
FCC's response to my concerns, and those of many other Members, has 
been anemic at best.
  This can only happen because the FCC collects taxpayer dollars at 
levels it sets without approval from Congress or the people. The FCC 
can defy Congress and the people because it has the power to levy taxes 
on its own. It can ignore Congress without threatening its generous 
spending programs, which cost Americans millions and millions of 
dollars. Mr. Speaker, some people thought the tax-and-spend liberals 
had left Washington. Not so.
  Washington interest groups who want to feed at this federal trough 
are already geared up to accuse the Republican Congress of cutting 
funding for education and health care if any attempt is made to rein in 
the FCC. They will cynically frame the issue as a matter of federal 
entitlements for sympathetic causes and groups.
  But the most sympathetic group is the American taxpayer, whose money 
is being taken, laundered through the Washington bureaucracy, and 
returned (in dramatically reduced amounts) for purposes set by 
unelected Washington poohbahs. This is why we must require the FCC, and 
all agencies, to get the approval of Congress before setting future tax 
rates.
  Should tax dollars be used for federal universal service programs? In 
what amounts? Or should Americans spend what they earn on their own, 
locally determined priorities? Requiring Congress to review any 
administrative taxes would answer this question.
  My bill would create a new subchapter within the Congressional Review 
Act for mandatory review of certain agency rules. Any rule that 
establishes or raises a tax would have to be submitted to Congress and 
receive the approval of Congress before it could take effect. In 
essence, the Act would disable agencies from establishing or raising 
taxes, but allow them to formulate proposals for Congress to consider, 
under existing rulemaking procedures. It is a version of a bill 
introduced and ably advocated for by Mr. Hayworth. He joins me today as 
a leading cosponsor of this bill.
  Once submitted to Congress, a taxing regulation would be introduced 
(by request) in each House of Congress by the Majority Leader. The rule 
would then be subject to expedited procedures, allowing a prompt 
decision on whether or not it should take effect. The rule would take 
effect once a bill approving it was passed by both Houses of Congress 
and signed by the President. If the rule were approved, the agency 
would retain power to reverse the regulation, lower the amount of the 
tax, or take any otherwise legal actions with respect to the rule.
  Mr. Speaker, the cry of ``no taxation without representation'' has 
gone up in the land before, and today we are hearing it again. Congress 
must not allow a federal agency comprised of unelected bureaucrats to 
determine the amount of taxes hardworking Americans must pay. While 
preserving needed flexibility, the Taxpayer's Defense Act will allow 
Congress alone to determine the purposes to which precious tax dollars 
will be put.

                          ____________________