[Congressional Record Volume 145, Number 110 (Friday, July 30, 1999)]
[House]
[Pages H6749-H6753]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE TAX BILL AND OUR TRADE RELATIONSHIP WITH THE PEOPLES' REPUBLIC OF
CHINA
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from California (Mr. Sherman) is
recognized for 60 minutes as the designee of the minority leader.
Thoughts for the People of Atlanta
Mr. SHERMAN. Madam Speaker, our hearts go out to the people of
Atlanta, especially the families of the dead and the wounded. For the
next few weeks, our hearts will be troubled by the constant questions:
Why? What could have been done? Frankly, I do not have any answers.
For this reason, I will ask Members to indulge me, because I came to
the House to speak about other subjects, even though, as much as we
would like to concentrate on the fiscal subjects that I would like to
address, our hearts will still be with the people of Atlanta.
Madam Speaker, I have come to the House rather hurriedly. I became
aware just a few minutes ago that I would be the designee of our side
to speak for 1 hour, so I will go through my notes in an effort to
comment on the tax bill that recently passed this House, and which I
hope will be radically changed by the conference committee before it is
resubmitted here.
Then, time permitting, I would like to talk about our trade
relationship with the People's Republic of China, because when the
House returns after the August break, we may be confronted with a major
decision to be made with regard to whether to grant permanent most-
favored-nation status or farm trade relations to the Peoples' Republic
of China.
Focusing first on the tax bill, I would like to focus on two things:
First, the content of the bill. So many speeches have been given on
this floor talking about the size of the bill, and I do want to address
that.
But there are many more differences between the Democratic position
and the Republican position than their bill is three and one-half times
the size of ours. Because when we look at the content of the Republican
tax bill and to whom it grants relief, then we will see major
differences in philosophy.
{time} 1515
Madam Speaker, I spent over 20 years as a CPA, as a tax attorney, and
as a tax court judge. I know tax fraud when I see it. The statements
made in support of the Republican tax bill rise to the level of tax
fraud.
We are told that we are giving people their money back. Yet, we take
money from working men and women and provide in this Republican tax
bill huge tax breaks to the rich and the special interests.
At least a dozen speakers have risen on this floor to claim that the
Republican tax bill eliminates the marriage penalty; and, yet, it
provides only minor relief. We are told that it provides tax cuts for
working families, but it gives only a few crumbs to those in the bottom
two-thirds of income in this country. It is a bill that we are told
provides for school construction; and, yet, it provides very little.
Likewise, with providing incentives for research.
Madam Speaker, Winston Churchill once remarked in talking about the
pilots who saved Britain from the Nazi bombers, ``never have so many
owed so much to so few.'' If we enact the Republican tax bill, then it
will be said of us as a people ``never have so many given so much to so
few'', because we are asked, as a people of over a quarter billion in
number, to give huge tax relief to the top 1 percent of our population.
I see that I am joined by the gentleman from Texas (Mr. Turner) who
would also like to talk about the tax bills that have recently passed
this House.
Madam Speaker, I yield to the gentleman from Texas (Mr. Turner).
Mr. TURNER. Madam Speaker, I want to join with the gentleman from
California (Mr. Sherman) on this hour of debate, this time that is set
aside at the end of the day, to talk about the issues facing us.
I would like to spend just a moment addressing the tax cut proposal
that was before the House in the last few days.
The Republican tax message is one cannot trust the Congress to act
responsibly with the surplus. They say get the money out of town before
it even arrives here yet. It is a little bit ironic to think their
theme is one cannot trust the Congress to manage the money wisely when,
in fact, the last time I checked, they were in the majority in this
House.
Their bill spends a trillion dollars, giving a $794 billion tax cut
that is based on a future guesstimate of a trillion dollar on-budget
surplus that is so far in the future that, if one looks at the tax cut
year by year over the next 10 years, the tax cut planned in that $794
billion for next year is only $5 billion, six-tenths of 1 percent of
the total tax cut.
The Federal Government, as my colleagues know, ran annual deficits
for 29 years straight and ran up a $5.6 trillion national debt. The
annual interest on that debt exceeds the annual spending, if one can
believe this, on all of national security.
The interest on the national debt takes 25 percent of all individual
income taxes collected by the Federal Government every year.
Do my colleagues not think that we could be disciplined enough just
to run one true budget surplus before we spend what we do not even have
yet? If a business had borrowed money from a bank to operate for 29
years straight and, for the first time in 29 years, it showed a small
profit, would the business declare a dividend to the stockholders; or
would it try to pay down that huge debt they had accumulated? I think
the answer is obvious.
Last week, the House had a historic opportunity to do what every
businessman or woman, every family in America would do when faced with
the choice of paying down debt or passing on that debt to our children,
our grandchildren.
By a margin of 9 votes, this House defeated a responsible Democratic
alternative that was designed to ensure that we had a reasonable tax
cut while preserving Social Security and Medicare. We even had on the
floor of the House a motion to recommit that provided that 50 percent
of the on-budget surplus would go to paying down the debt, 25 percent
for tax cuts, and 25 percent for priority spending needs, such as
Medicare and Social Security.
Every Democrat on the floor of this House voted for that responsible
alternative. Only one Republican joined us. All the remainder voted
against that alternative.
I ask, where have all the fiscal conservatives in the Republican
Party gone? Fiscal conservatives do not spend money that we do not even
have yet. Fiscal conservatives do not ignore the advice of the Federal
Reserve Chairman, Alan Greenspan, who has said over and over again
before committees in this House that the best use of the surplus is to
pay down debt.
Fiscal conservatives do not gamble with our economic security, our
health security, or our retirement security. Fiscal conservatives
understand that reducing the national debt lowers interest rates. For
example, a 2 percentage point reduction in interest rates on the
purchase of a $90,000 home means a savings of almost $1,500 a year in
mortgage payments for American families. That is $1,200 more than a
family with an income of $50,000 a year would get from the Republican
tax cut plan. That family, under their plan, only gets $300 a year.
Fiscal conservatives do not gamble with our economic security. They
understand that our health security, our retirement security, our
economic security is the important thing that must be preserved by the
Congress.
[[Page H6750]]
Finally, fiscal conservatives do not pass on debts to their children
and their grandchildren.
I believe we can have reasonable tax cuts over the next 10 years,
given to people who really need the relief: working families and small
business. These are the folks who have not yet fully participated in
the booming new economy. These are the folks who live in rural America,
the folks who live in the inner city.
In today's economy, tax cuts should not be aimed at Wall Street, but
they should be aimed at Main Street. But an equally important priority
for this Congress is to pay down that $5.6 trillion national debt, to
save Social Security, to save Medicare for our children.
Let us adopt a fiscally responsible tax reduction plan that shares
the on-budget surplus, 50 percent to debt reduction, 25 percent for tax
relief, and 25 percent to save Social Security and Medicare.
Mr. SHERMAN. Madam Speaker, the gentleman from Texas (Mr. Turner)
says it well. Since he has focused on the fiscal irresponsibility of
the Republican tax cut, I would like to echo some of the things he had
to say.
The most curious thing is that the Republican majority has come
before us and agreed on what the best policy would be. They have agreed
with Alan Greenspan that the best thing we could do is save the lion's
share of the surplus, adopt only small tax cuts, and pay off the
national debt. They admit that is the best economic policy. They admit
that that is what is best for America. Why will they not do it?
They come before us and say that America, the best Nation in the
world, cannot have the best economic policy, that we are congenitally
unable to use funds to pay down the debt; that if the money is not used
for tax cuts, it will be squandered and wasted.
Well, I think America is the best country, and it deserves a Congress
that will adopt the best economic policies. If the Republicans feel
that they are congenitally unable to be fiscally responsible, then the
least they could do is get out of the way, retire, and endorse the
Reform party candidate or the Independent candidate or even the
Democratic candidate from their district who will come here and do what
both sides of the aisle have agreed is the best policy for this
Congress; and that is to use the vast majority of the surplus to pay
down the national debt.
The gentleman from Texas illustrates it well when he talks about the
importance of fiscal responsibility. He talks about a $90,000 house.
Out in extremely expensive Los Angeles and Ventura Counties, we can
simply double those figures. Virtually every working family in my
district that owns a home would save double or triple if they could
reduce their interest rate by 1 or 2 percent as compared to the crumbs
of tax relief found at the edges of this Republican tax bill.
Yet, we are told by a Republican majority that they cannot stop
themselves, that the Republican majority must be made up of self-
admitted spendaholics. Perhaps the undertow of their comment is the
Republican majority will not be a majority very soon. One way or
another, they are telling us that the Congress of next year and the
year after somehow will not be able to pursue a fiscally responsible
policy.
I am confident that, with gentlemen like the gentleman from Texas and
men and women on this side of the aisle exercising fiscal
responsibility, that we will be able to do what is politically
difficult but what we have shown ourselves capable of doing in the last
2 years; and that is to confine spending, to avoid tax cuts we cannot
afford, and to run a government surplus.
Think back. I know the gentleman from Texas and I came to Congress in
the same year, 1997. I served on the Committee on Budget, and we came
out with a plan adopted by this House. We said, by 2002, the budget
will be balanced. We could hear the laughter, the loud laughter from
the press galleries behind me. They were occupied at the time, with
people who giggled at the prospect that the 1997 budget agreement would
lead to a balanced budget by the year 2002. In fact, it lead to a
balanced budget in 1999, in fact, a significant surplus in 1999.
So this Congress has, in the last 2 years, shown it can be fiscally
responsible. Now we need a tax plan that is based on the best economic
policy, not one that assumes the people of this country cannot have a
Congress that is as good as they are. They know that the best use of
these funds is to pay down the debt.
Now, among the reasons it is the best use of funds is that it allows
us to stop paying interest on the debt. The Republican tax cut of over
$800 billion over the first 10 years, $3 trillion in the second 10
years, those figures just reflect the cost of the tax cut. We have to
add in the interest on the national debt that we will have to keep
paying because, under the Republican plan, we cannot pay down the debt.
That interest over the next 10 years will be on the order of another
$150 billion.
Imagine what we could do if we could pay off the debt, stop paying
interest on the debt, and have interest rates that reflect the fact
that Wall Street and Main Street know there is fiscally responsible
government here in Washington.
{time} 1530
Instead, we are asked to adopt a tax plan which will quickly erode
the tenuous faith Americans have that we have our fiscal house, in
order in this House.
I should point out both to those on our side of the aisle that have
thought of a number of government programs they think should be funded,
and to all of the little tax incentives and giveaways built into the
Republican plan and those people who voted for it, that fiscal
responsibility will do more for the poor than 50 great society
programs, and fiscal responsibility will do more for business than 50
special tax breaks. Because if we can take the Federal Government out
of the capital markets, then all of the money that is available for
investment, instead of being used to buy T-bills and T-bonds to finance
Federal spending, can be available for private investment. That means a
continuation of the economic expansion. It means people will find that
when they go to borrow money for a new car or a new home those funds
are available.
I can understand the desire to pass out tax breaks to wealthy
interests. I can certainly understand the desire to provide special
programs for those in need, but first and foremost we need to pay down
the national debt.
At this point, I would yield to the gentleman from Texas (Mr.
Turner).
Mr. TURNER. I thank the gentleman for yielding, and I would like to
engage the gentleman in a discussion regarding an issue that is often
overlooked in the discussion on what we should do with the projected
10-year estimated, or guesstimated, surplus.
I am told by sources that know a lot more about how the economy works
than I do that the current surplus estimate of $2.9 trillion over the
next 10 years, $1.9 of which is in Social Security, which I think we
have all agreed on both sides of the aisle we should not touch, but
that other $1 trillion that we are arguing over as to what is the best
use of it, is really a figure that is quite tenuous.
In fact, I am told that if we take four of the assumptions that were
used by the Congressional Budget Office to come up with that estimate
of $2.9 trillion and we adjust those four assumptions only very
slightly, the surplus would change from $2.9 billion over 10 years to a
deficit once again.
Those four factors that were mentioned are: if, instead of assuming
the employment rate that the CBO assumed, if employment simply ends up
being 1 percent less than they estimate, in other words, if the
unemployment rate is 1 percent greater than the CBO estimates, it has a
significant impact on the surplus.
If spending goes up over the next 10 years, Federal spending, with
inflation, rather than being down at the levels that we are struggling
to maintain that were set in the balanced budget act of 1997, then part
of that surplus will disappear.
Mr. SHERMAN. The gentleman is talking about a budget plan to try to
keep all Federal expenditures at the same nominal levels without
increasing them for inflation. I think we should note that the Speaker
has said again and again that we would pass all the appropriations
bills before the August break. But the Republican majority has shown
that they cannot meet those limited spending objectives. That is why
they are sending us home without passing the appropriations bills
[[Page H6751]]
and that they have now had to define the census as an unforeseen
emergency and fund it outside of the budget caps.
Under those circumstances, does the gentleman think there is a
significant risk the expenditures that will be voted over the next 10
years will exceed the no-increase-for-inflation straight line that the
Republicans have used in their budget estimates?
Mr. TURNER. Well, it would seem to me very likely that that would be
the result. And I, too, share the gentleman's concern with the double
set of books that the Republican majority has begun to keep over the
last couple of weeks just to try to show that they can stay within the
budget caps of the 1997 Balanced Budget Act.
As we all know, if we declare something around here as an emergency,
we do not have to count it against the caps. But one thing to keep in
mind: every time somebody stands up and says, I want to declare this
spending an emergency, they are taking it right out of the Social
Security Trust Fund.
And the truth of the matter is, if we have things like the census
declared an emergency, I think we are committing fraud with regard to
the way we keep the Federal books. I mean the census is required in the
United States Constitution. We do it every 10 years. And to stand up
and say, well, we have to appropriate the money to do the census and
call it emergency spending so it will not be counted against the budget
caps is disingenuous, in my opinion.
As I mentioned, if we alter four factors in the Congressional Budget
Office assumptions about the $2.9 trillion surplus, it disappears. I
mentioned two of them a minute ago.
If unemployment is simply 1 percent higher than they estimated over
the next 10 years; if spending goes up with inflation rather than at
the artificially low estimates that we have under the current estimate;
if the gross domestic product, a fancy word that I am not sure I
completely understand, simply grows at seven-tenths of 1 percent less
than the Congressional Budget Office estimates; and, finally, if
Medicare spending simply goes up at the same average annual rate that
it has gone up since 1972; if all four of those things happen to turn
out to be true, there is once again a deficit. There is no $2.9 billion
surplus; there is a deficit over the next 10 years.
I think it is often overlooked in this debate, as we argue about what
to do with the surplus, that the threshold question should be will
there really be a surplus. I hope there is, and I hope the economy
stays strong; but to gamble our economic security, our health care
security, the security of Social Security, all on an estimate that may
turn out to be completely wrong is the height of fiscal
irresponsibility.
Mr. SHERMAN. I would echo what the gentleman has to say.
If we are in a position where perhaps we will have an extra trillion
dollars in general funds, not to mention the necessary buildup in
Social Security, as the gentleman pointed out, this $2.9 trillion
surplus, $1.9 trillion of the surplus, is just building up funds that
we are going to need when people the gentleman's age and my age are
going to retire, so that only $1 trillion of the estimated surplus is
in the general fund, the one funded by regular taxes for regular
expenditures.
If we are in a situation where we do not know whether that surplus is
going to come in as projected, then we have two choices: we can adopt a
plan where we say we hope it will come in and if it does, we will pay
down the debt; or we can say, we hope it will come in, but we are going
to spend it before it comes in. But the method that is most likely to
lead to higher unemployment, the method that is most likely to lead to
a decline in the growth of our gross domestic product is to adopt a
fiscally irresponsible plan and then watch the markets respond, watch
interest rates creep up, watch investment decline, watch unemployment
go up.
So to act as if the surplus is certain is the best way to put it at
risk. And that is another reason why the Republican plan is so fiscally
irresponsible.
Let me now focus on the content of the tax cut, because even if we
did not believe in fiscal responsibility, even if we thought we should
have an $800 billion tax cut exploding up to $3 trillion in the second
10 years, is this the right kind of cut to have?
Let us look at the content. First, the Republicans promised to deal
with the marriage penalty; and yet, and this is an interesting quote,
the Family Research Council expressed its disappointment at the paltry
marriage penalty relief found in the Republican tax bill. James Dobson,
a man who has not ever offered to give me an award, I doubt he has
offered to give the gentleman from Texas an award, went on radio to
express his profound disappointment at the paltry marriage penalty
relief in the Republican tax bill.
That being the case, we should look at the Democratic bill, the bill
that costs less than a third of the Republican bill's cost. But
somehow, with less than one-third the tax cut, the Democrats provide
more marriage penalty relief than the Republican bill.
Let us look at the issue of school construction. We have seen the
need to reduce class size around this country. We need our kids to get
the best possible education. Well, if we are going to have smaller
class sizes, then we need more classrooms. Both sides of the aisle have
recognized that the Federal Government, through the tax code, should
try to make it easier for local school districts to finance school
construction. But in their bill, that is three times as expensive as
the Democratic bill the Republicans provide only one-third of the help
to local school districts. Three times as expensive but only one-third
the help.
And what kind of help do they provide local school districts? What
they do is change the arbitrage rules. Well, what does that mean? It
means that this is the only help they provide schools. This is the
help. They tell every school district in the country, look, go issue
tax-free bonds. Borrow the money at a low interest rate, and then for 4
years take that borrowed money, borrowed at a low interest rate, do not
use it to build schools yet, but go play the market. Go invest it the
way Orange County did right before Orange County went bankrupt.
The only help they provide local school districts is to give them a
free plane ticket to Las Vegas and to invite them to put the school
bond money on the crap table. And they say they will allow school
districts to do this and that is how we will help school construction.
How do the Democrats help school construction? We simply provide
three times more the Federal help, and we do it by saying the Federal
Government will pay the interest on the school bonds. No risks, no
arbitrage, no invitation to local schools to sell bonds today and to go
into the stock market and the bond market and buy derivatives and hope
they can make a profit. Just real help by paying the interest on the
bonds.
{time} 1545
The Democratic bill, about 30 percent the size of the Republican
bill, makes the R&D tax credit permanent. But the Republican bill turns
its back on high-tech industry and says we will give them the R&D
credit for a few more years and then we will turn it off.
The Democratic bill provides for education, saying that employers can
provide for education for their employees without the employees being
taxed, whether it is graduate school education or whether it is
undergraduate education or technical education.
Yet, in a bill that costs more than three times as much, the
Republicans cannot find room to allow for employee education.
Well, what do they spend their money on, $800 billion in the first 10
years, $3 trillion in the next 10 years? How is it all spent? Not for
married families. Not for school construction. And not for ordinary
working families in this country.
Because, in fact, they provide over 50 percent of the tax relief to
the top one percent of Americans' income and to giant corporations.
Now, in many of the speeches on this floor, the numbers stated are
not quite as sharp as the ones I related. And that is because the other
speakers on this floor have tended to ignore the corporate tax
provisions.
But if we look at how much goes to the top one percent in income, 45
percent of the benefits plus roughly 10 percent of the benefits going
to giant corporations, we will see why there is so little room in the
Republican tax bill to help education or to help marriage or to help
working families.
[[Page H6752]]
Let us talk a little bit about the breaks that they give giant
corporations. They provide a special provision dealing with the
interest allocation rules for multinational corporations.
Well, what does that all mean? What it means is they provide $24.8
billion in tax relief to those corporations that take their shareholder
money and invest it in factories overseas, shut down their domestic
production, invest equity capital overseas, and share in a $25 billion
tax reduction.
That provision will not create jobs in America. It may create a few
extremely poorly paid jobs overseas. But it is not just $25 billion in
the first 10 years. It is one of those exploding tax cuts that grows to
nearly $50 billion in the second 10 years.
Furthermore, the new Democratic coalition put forward the idea that
we eliminate the estate tax for all but the one percent of the richest
families in America and that we do it in a way so that the families do
not have to prepare long estate planning documents, none of the bypass
trusts, none of the trust tax returns, none of the complication of the
lives of widows and widowers that has become standard among upper
middle-class seniors. Just complete relief on the first $2 million.
But that is not good enough for the Republican majority. They forget
the derivation of the word ``millionaire,'' someone who inherits a
million dollars.
So they come here and they say, well, if they inherit a million
dollars, there should be no tax. I agree. Inherit $2 million there
should be no tax. I agree. And then they say if they inherit a billion
dollars, if they happen to be the lucky unborn son or daughter of Bill
Gates and they inherit $10 billion, they want no tax.
That is why their package is so expensive but they cannot provide
relief to married families and they cannot help school construction.
Not only is the size of the Republican tax bill fiscally
irresponsible, but the content is the most extremely regressive that I
have ever seen.
I notice that one of my other colleagues has come to the floor and
requested that I yield to her.
Mr. Speaker, I yield to the gentlewoman from North Carolina (Mrs.
Clayton).
Mrs. CLAYTON. Mr. Speaker, I thank the gentleman very much for
yielding. I appreciate that so much.
I had the pleasure of observing the discussion of the gentleman from
California (Mr. Sherman) and the same topic he was talking about was
very much on my mind and in my heart.
I appreciate the gentleman taking the leadership and getting this
time and explaining so vividly not only the unreasonableness but the
contradiction of this big, huge tax bill provision that we just passed
in the House last week and how that is in contradiction of the
principle that both sides say that they want to do.
They say, and we agree, the Democrats and Republicans agree, that we
want to protect Social Security, we want to reform Medicare, and we
also agree we want to pay down the debt.
Well, we cannot spend the monies twice. The great surplus that we are
so blessed to have in this country is not there to be spent time and
over and over again. So they either do these things that they say they
want to do or they indeed give this big tax bill.
I just want to thank my colleague for explaining this. With his
background as a CPA, he can put these details in such a vivid way that
people begin to understand the reasonableness.
I, too, want to reduce taxes. I think it needs to be targeted. It
needs to be targeted for those families that are having health care
problems long-term, those who are having problems in terms of needs of
educating their kids and day-care.
Also, I think we do need some relief on inheritance tax. We raised it
last time, and we need to raise it again. And raising it to $2 million
is reasonable and moving in the right direction. But the tax cut needs
to be targeted and it certainly needs to be affordable and we need to
balance that.
So I have come to the floor to participate in this discussion to say
that there are priorities for spending and there are priorities for tax
reduction that should be consistent with us giving everybody an
opportunity in America.
We just should not give a tax break for the one-third or the richest
one-fifth or give tax breaks to the one-third all over. We should make
sure those are well-crafted, targeted tax relief.
More importantly, we should be able to afford it. Mr. Greenspan said
over and over again, yes, he does not object to a tax cut. But it
should be not in this environment when it is being proposed in an
environment where we do not even have the surplus realized yet. The
surplus that they are talking about is based on a projection for it to
happen.
Actually, my colleague and I served on the Committee on the Budget
and he and I know that the surplus that we are talking about for this
year, by and large, is as a result of people paying their payroll
taxes, going into the Social Security. So if we give this big tax
break, guess what happens? We cannot spend it twice.
When we go on those great emergencies, guess what happens when we
take things off of budget? It indeed comes from the surplus.
So I just want to commend the gentleman for bringing a very factual,
reasonable discussion. This is not a rhetorical discussion. This is a
factual, reasonable discussion how insane this tax cut is, how
unreasonable it is, how in contradiction we put these principles,
saying on the one side, Americans, we want to protect Social Security,
we want to reform Medicare, we want to pay down the debt but, at the
same time and in the same breath, we are going to give almost $800
billion.
Yes, we need a tax cut. But we need it to be targeted and we need it
to be affordable. We also have spending priorities. Our education of
our kids. Our senior citizens are without drug prescription
opportunity. There are millions of senior citizens having to debate
whether they can afford to pay for their prescription or whether they
can pay for the rent or buy food. These are the basic problems they
have.
For those of us who now have the opportunity to be looking at the
surplus, we ought to be balancing our priorities to make sure that all
Americans are prosperous in this economy.
Again, I want to thank my colleague for yielding to me. I appreciate
it so very much.
Mr. SHERMAN. Mr. Speaker, reclaiming my time, I thank the gentlewoman
from North Carolina (Mrs. Clayton) for coming to the floor and for
joining with us here.
I share her belief that we need tax cuts. But if we can keep this
economic expansion going for another 5 years, first that will do far
more for everybody's pocketbook than any tax cut. But second, we will
then be able to talk about more tax cuts.
If we screw it up, if we adopt tax cuts that force interest rates up
because we are fiscally irresponsible, then, first, people will suffer
far more from an economic downturn and, second, we will be back here
dealing with deficits.
Mrs. CLAYTON. Mr. Speaker, if the gentleman would yield further, I
just want to share with my colleague, I am from rural America; and we
in America are very blessed that we are having a sustained economy. But
there are many of us in rural America and in the inner cities that are
not prospering as much as anybody else.
That is not to say we should not celebrate our prosperity. We do. But
I want my colleagues to know, as we celebrate this, all of us are not
eating from the same plate and the same meal and all the nutrition.
Some of us are having difficulty in finding money for our schools and
rural areas. Farmers are suffering.
So my colleague makes the right point. We would take this kind of in
the wrong direction if we give too much of a tax break and then require
us to raise taxes even greater. That certainly would be a travesty, and
we should not do that.
Mr. SHERMAN. Mr. Speaker, it will take a few more years of this
economic expansion for it to be felt in those places that it has not
yet been felt.
My largest county, I represent a part of Los Angeles County, was
lagging behind the rest of California; and only in the last couple of
years has the economic expansion really has been felt in Los Angeles
county. I hope very much that it is beginning to be felt in your part
of North Carolina.
There is nothing more important than keeping this economy growing.
Mr. TURNER. Mr. Speaker, will the gentleman yield?
[[Page H6753]]
Mr. SHERMAN. I yield to the gentleman from Texas.
Mr. TURNER. Mr. Speaker, I want to join with the gentlewoman from
North Carolina (Mrs. Clayton).
I come from east Texas. The area that I represent is still operating
off the old economy. The new economy had not made it there yet. And the
old economy is not doing so well in rural America and inner city
America.
That is why I feel so strongly, as my colleague does, about Congress
making the right choices with regard to how we handle our Federal
spending, our tax cuts.
As Democrats, we believe in tax cuts and we believe in tax cuts that
are aimed at the people that really need them. I think it is important
for us in trying to engage in this dialogue with the American people
for them to understand that we want to see taxes go down just as much
as anyone else in this body. But we want it to happen in a way that is
good for the sustained, long-term growth of this country; and paying
down the debt is a part of that, and we need to make that a priority.
I want to thank the gentleman from California (Mr. Sherman) for
leading in this hour. It has been very informative to hear an
individual with his background in accounting and finance talk about the
details of the tax proposals that have been before this House in the
last 10 days. I commend him for his leadership on these issues.
I know the gentlewoman from North Carolina (Mrs. Clayton) joins me as
we all try to move forward together and try to accomplish things that
will bring us a better future for all of our children and our
grandchildren.
Mr. SHERMAN. Mr. Speaker, I have a few more examples and facts I want
to quickly get into the Record. I promised I would wrap up just a few
minutes after 4. We could, obviously, continue for another hour.
But let me first just make sure this Record reflects the analysis of
citizens for tax justice. I mentioned it earlier that 45 percent of the
benefits in the Republican package go to the top one percent of
American families.
These families, on average, will save $54,000. These families
typically have incomes of over three-quarters of a million dollars a
year already.
So the decision on who should benefit from this tax bill is as
severely mistaken as the analysis that led to the unreasonable and
fiscally irresponsible size of the tax bill.
{time} 1600
Finally, for those who listened to the debates just before the tax
bill was adopted, from time to time a Member of the majority would
stand up and say, after a Democrat had spoken, do you realize the
family in your State on average will save $3,000 or $3,500 under the
tax bill?
It sounded like a big number. Let me make sure that that is
corrected. Yes, indeed, the, quote, average person in my State would
save $3,500. That is over a 10-year period. So that is $350 a year. But
that is the average person. Not the median but the mean.
Let me just explain the difference. If you have got Al Checci, the
gentleman, you may remember, who owns about half of Northwest Airlines,
spent a lot of money in my State running for governor. If Al saves $10
million on his taxes and then we have got 1,000 families in another
part of my district saving $10 on their taxes, well, that all averages
up to a much higher number. The average simply looks at the huge amount
of the tax break and divides it by the number of families. But the mean
is when you look at the typical average family, what do they get. And
typically under this tax bill, they get about 30 cents a day.
For God's sake, let us not risk America's current and tenuous
prosperity, let us not risk this economic expansion on the joy that a
few will get in giving tax breaks to a very few Americans, and
certainly let us not risk this economic recovery and economic expansion
on 30 cents a day of tax cuts for the average American family.
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