[Congressional Record Volume 146, Number 60 (Tuesday, May 16, 2000)]
[House]
[Pages H3159-H3165]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2200
              PERMANENT NORMAL TRADE RELATIONS WITH CHINA

  The SPEAKER pro tempore (Mr. Simpson). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Colorado (Mr. McInnis) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. McINNIS. Mr. Speaker, well, it is time for another evening chat. 
This evening I have three subjects which I think will be of some 
interest. I hope to be able to have time to address all three of them. 
But, in order, I am going to speak a little about the trade agreement.
  We have had much interesting discussion this evening about trade with 
China, the different issues, the economic issues, the political issues; 
and, so, I too will chime in on that, I think from a little bit of a 
different angle. But, nonetheless, I will spend a little time on that 
this evening.
  I would like to talk to you again about taxes. As you know, I think 
it is important that we distinguish out there the difference between 
the parties, the Republicans and the Democrats, when it comes to tax 
policy in this country.
  My discussion and comments this evening will not be talking about a 
tax cut today. It will be talking about a little historical tax 
management and which one of those parties really has the experience to 
manage our taxes.
  Then the third thing which I hope we get time for this evening is a 
fundamental issue to all of us, and that is education.
  Let me begin by talking about China. First of all, let us get the 
economic factors out of the way for the State of Colorado.
  My district is the Third District in the State of Colorado. It is 
representative of all of western Colorado and some of eastern Colorado. 
To give my colleagues an idea of the geographic size, it is larger than 
the State of Florida.
  We have lots of industry in Colorado. We have a lot of industry in 
business, primarily small business, in the Third Congressional 
District. We do have some of the world class ski resorts in the Third 
Congressional District. We have a lot of international tourists.
  In fact, the State of Colorado made a conscious decision some time 
ago to really try to make an effort at marketing on an international 
basis. We determined in Colorado that tourism is a good industry to 
have, that it is better than the smoke-stack industry that we had 
experienced in some years previous. So we wanted to get a mix. And now, 
as you know, Denver, Colorado, is one of the leading cities in the 
country with regards to high tech. And, of course, the Third 
Congressional District, the mountains of Colorado, is known throughout 
the world for the beautiful and majestic mountains and the views that 
we have and so on, and the ski areas that we do have.
  But China is a factor in the Colorado economy. I think to just get it 
out of the way, the economic numbers, because this evening we have 
heard economic numbers bantered back and forth, so at the beginning of 
my remarks here I will tell you that China is a very important trading 
partner for the State of Colorado. It is fourth, in fact, as far as the 
largest amount of exports to a foreign country for the State of 
Colorado.
  In Colorado our agricultural base, which is very, very important for 
Colorado, whether it is the cattlemen, whether it is the wheat growers, 
whether it is the corn growers, regardless, the agricultural base in 
the State of Colorado through their associations strongly support trade 
with China.
  These associations realize that 96 percent of the consumers reside 
outside the boundaries of the United States of America. Only within our 
boundaries do we have four percent of the consumers.
  Now, some people tonight that you heard preceding my comments will 
claim they run away from the word ``isolationist.'' They talk about 
pro-trade. They talk about pro-small business. They talk about 
international relations. And then they urge you to vote no on the China 
bill. When the real test steps up there, they are not pro-trade, they 
are isolationists.
  Now, in some cases, maybe isolation works. It has not worked for the 
United States of America. We thought for sure that we could make Cuba 
collapse to its knees by isolating that country. Several presidents ago 
or so, it did not work. Some day we are going to get capitalism into 
that country. But our choice of isolation is not going to work with 
China.
  We are not going to isolate China. How are we going to isolate them? 
We are not going to isolate them. Let us face the facts. And the facts 
in Colorado are economically, economically, it is a very, very 
important trading partner.
  In the areas that I represent, agriculture is very important. In the 
cities of Colorado, the largest cities, which I do not represent, high 
tech is very important.

  There are a lot of businesses from small to medium to large in 
Denver, Colorado, in Boulder, Colorado, in Colorado Springs and Ft. 
Collins throughout the cities on the front range that think that this 
China trade is very important for the State of Colorado and for the 
people of the State of Colorado.
  So I am not saying tonight in my remarks that will follow that we 
should disregard the economic factors of the State of Colorado. They 
are important. We should not ignore them. It should play an important 
factor for every congressman's decision when they make that final 
decision on whether or not to support trade with China.
  But what I want to focus about this evening in regards to China is 
more from a philosophy point of view, I guess, and that is to kind of 
relate to my colleagues here on the floor my personal experience in 
China.
  Many, many years ago I had the privilege of being selected as one of 
10 what they called young leaders in America from across the country to 
go and visit the country of Taiwan and to go and visit and spend time 
with their government and, after visiting Taiwan, to go ahead and go 
across the straits there and visit China and spend time with China's 
young leaders.
  This was a bipartisan group of people. There were five Democrats and 
five Republicans. And so, we went off on a trip to visit with the 
governments of these two different countries.
  In Taiwan it was very interesting to see what capitalism has done for 
that country. This is a country that has boomed when it allowed its 
people the opportunity to improve their life situation, to go and 
pursue their life dream of having their own business, of being able to 
make a better mouse trap, of having rewards for their hard work because 
they come up with a better mouse trap or they have a better invention 
or they figure out a more productive way to produce.
  Taiwan loved capitalism. Taiwan put its arms out and said, we want 
capitalism in our country. And compare to what has happened in Taiwan 
to any other country of its size, especially any other country of its 
size that is socialistic or communistic, compare Taiwan and the economy 
and the type of life-style and the freedoms and the freedom of 
expression and the art and the music and just, basically, the enjoyment 
of life in Taiwan, compare it to what you have in China. It is hardly a 
comparison. It is like between night and day.
  What is the answer? Is what brought capitalism to Taiwan isolationism 
by the greatest country in the world, the United States of America? Was 
it a conscious decision on behalf of the United States of America to 
ignore

[[Page H3160]]

Taiwan and say, look, the best way to break communism and make sure 
this new regime that went over to Taiwan is not going to practice 
communism, the best way to do that is isolate them?
  We did not isolate them. We embraced them. We said, try capitalism. 
It works. Throughout the history of the world, every time we have 
allowed an individual to make life better for themselves through their 
own labors, it works. Capitalism has proven itself over and over and 
over again.
  In China, they have been very successful at rejecting capitalism. 
They have been very successful at rejecting individual rights. They 
have been very successful in restricting the freedom of movement in 
their country.
  In China, the communists have been very successful in making sure 
that they cannot form political groups, that they cannot have the 
freedoms as these people hear about just 90 miles away in the country 
of Taiwan. China has made sure that it has oppressed its citizens, and 
it has made sure that it has defied the world.
  So what do we do about this communistic country, this country that is 
huge, huge and growing, by what, 20,000 or 30,000 people a day are born 
in China? We cannot ignore them. Come on, my colleagues that oppose 
even acknowledging that China is out there. We cannot ignore them. We 
cannot isolate them. Figure it out.
  Now, I went over to China and I had an opportunity to meet some of 
their young leaders. And I will tell you what really stood out for me 
when I was in China was how oppressive their government was, but what 
encouraged me were some of these young leaders seemed to be enchanted 
by the idea of freedom and enchanted by the idea of capitalism.
  I could really see an optimistic viewpoint in their mind that their 
mighty country, and they were proud of their country, that their 
country was beginning to, at least, acknowledge that outside of 
communism there might be an improvement called capitalism.
  I saw their signs of encouragement when I was in China. I went to a 
school. This school was for the very privileged in their society. In 
China that is the school teachers, the medical doctors, and the 
government leaders and their top business executives. So it was a 
private school.

  All of the children were beautifully dressed. And, of course, the 
Chinese children are beautiful children. I guess all children are 
beautiful. But, really, their dress and their outfits. But do you know 
what I noticed in their school what made me feel good that capitalism 
was getting its foot in the door in Communist China was the fact that 
on the walls of this school they had paintings of Goofy and Mickey 
Mouse.
  Now, some of my colleagues might chuckle at that. Well, what has that 
got to do with trade? Think about it. Through entertainment, through 
music, and through many other means, capitalism is beginning to seep 
into Communist China. It is beginning to get in there.
  Now, what amazed me the most about these young Chinese leaders is 
that a couple three months later, I then hosted those leaders in the 
United States for a period of about 3 days in the Colorado mountains. 
Now, they had already been to Washington, D.C., and they had seen this 
fine building. They had seen this fine body in action. They saw the 
majestic White House and our other beautiful monuments around here. 
They were impressed. They liked America.
  When they came to the mountains of Colorado, we did some things, we 
treated them. We gave them each a pair of Levi jeans. Back then that 
was a big deal. We took them on a roundup camp and sang cowboy songs 
around the fire. They loved it. But do you know what they enjoyed and 
they were most enthralled about during that time that I had them and 
they inform me it was the most interesting thing of their entire trip 
to the United States, which included San Francisco, which included 
Colorado, which included Washington D.C.? Do you know what amazed them 
the most? The grocery store.
  I took them to our grocery store, our local city market. They could 
not believe it. We spent 4 hours. I had allotted 25 minutes to go 
through the grocery store. They spent 4 hours in that grocery store in 
Glenwood Springs, Colorado. They went up and down those aisles. They 
could not believe it, all of these different choices of cereal.
  Where is your milk? This is all milk? Yogurt two percent. One percent 
sour cream. They could not believe it. And the eggs, dozens and dozens 
and dozens of eggs. We went to the cheese selection. They could not 
believe all the selections of cheese. And cereal. I mean, we literally 
opened a couple of boxes of cereal so they could taste the cereal. They 
were enthralled by an American grocery store.
  Then I had to convince them that that American grocery store was not 
for the exclusive or the wealthy people in our society. I am not sure 
they ever believed me that anybody in our community of Glenwood Springs 
or anybody that stopped in Glenwood Springs could go into that grocery 
store and that the prices that we were paying for items in proportion 
to what we made per month were minuscule in their terms. What a deal. 
How did it happen?
  And do you know, the rest of the time with those young leaders, do 
you know what we talked about? We did not talk about the indoctrination 
of communism. We did not talk about how you can stymie freedom of 
speech. We did not talk about how you can prevent the people from 
having music and art. We talked just the opposite.
  We talked about capitalism. We talked about freedom of expression. We 
talked about music. We talked about art. We talked about grocery 
stores. We talked about the fact you could own your own horses and your 
own cows and if you wanted to, you could sell them for a profit, if you 
were a good businessperson, you could make a good living at it. We 
talked and we talked and we talked.
  Now, this story goes on. They then went back to China. I could tell 
that these people, these young leaders, men and women, were inspired. 
They really felt an urge that their great country of China could move 
in a direction that would make it an even stronger country, that they 
could begin to get their senior leaders to open up their eyes just a 
little, not dramatic change, because dramatic changes takes time in 
China.

                              {time}  2215

  But it is change, nonetheless, towards capitalism, away from 
communism.
  The last time I ever saw most of them was as they got on that plane. 
They smiled, they did not want to leave America, in one sense; but in 
the other sense they could not wait to leave America and get to China, 
because they wanted to talk to their friends and neighbors about what 
America had, what America had that China did not have and what America 
had that China should have. That is why they were anxious to get out of 
this country.
  Well, not too many years later, in fact, just a couple short years, 
Tiananmen Square occurred, where the government forced down, executed, 
and, to the best of my knowledge, some of those good friends that I had 
met were executed as a result of Tiananmen Square. I was very, very 
bitter. To this day I remain bitter about the way these young people 
were prosecuted, persecuted and executed by the Chinese government.
  It is a tough hump to overcome. These kids, and they were young men 
and women, they had a lot of promise. They had a lot to take to their 
country. They did not stay in the United States. They did not want to 
be Americans. They wanted to go home to their homeland of China and 
improve the conditions and bring things like small business and 
capitalism and music and art, open up the world. They never got that 
opportunity, because the government made sure that they were, as I 
said, prosecuted, persecuted and executed.
  Well, I, for a long time, took the position that the best thing we 
should do is cut all our ties to China, stop dealing with China. Those 
SOBs, they killed these people, and you cannot deal with China except 
through a military takeover at some point, or at least build up your 
military strength so you never ever have to have China push your own 
citizens around, and I was convinced that the best thing to do was 
isolate China.
  But I guess with time you begin to think about, is that really 
working? In

[[Page H3161]]

the meantime, what we saw was we saw the Iron Curtain collapse. We saw 
the Reagan Cold War be successful without the firing of one missile. 
And as I began to study what broke Russia, what brought Russia to its 
knees, was it the fact that we isolated them? Was it the fact of our 
military machine?
  Well, both of those factors played into it, and there are other 
factors I will talk about. First of all, was it the fact we isolated 
them? We did isolate Russia in some areas, and we should isolate China 
in some areas, and that is transfer of military secrets.
  As you know, the Russians had a very successful spy operation, 
unfortunately, a couple of traitors in America, U.S. citizens that 
became traitors. But, nonetheless, we restricted them. We did not allow 
swapping of even semi-sensitive equipment to Russia. And that is 
appropriate with China. We should be very, very restrictive about 
military hardware or civilian hardware that can be converted to 
military use. We should be restrictive and isolationists in regard to 
that. If we were not, you could see the proliferation of nuclear 
weapons going on throughout the world. We have to keep that stuff close 
to our chest. I am not sure anyone in this room disagrees with that. 
But when you take a look, did we isolate Russia as a whole, the answer 
is no. Capitalism began to creep into Russia. That is what happened.
  Now, what about the military? Was it our military might that brought 
down the Russian empire? The answer to that is no. What our military 
might did, and, by the way, I think every American citizen should be 
thankful for Ronald Reagan. He stood up to a lot of heat when he called 
Russia the evil empire. He stood up to a lot of heat when he had our 
military build up in this country. A lot of people said he was a war 
monger. Some called him Rambo. Now you do not hear much from those 
people, because, you know what? Ronald Reagan was right. You need to 
have a strong military. You need to have the first military in line of 
every military in the world.
  But the military itself did not bring down Russia. What brought down 
Russia is the heart, the people's heart. Those people in Russia said, 
you know, there is something better, beyond that wall. There is 
something better on the other side of the ocean. There is something 
better about America. What is America doing that they have such good 
lifestyles?
  What is America? The teenagers in Russia were saying look at the 
teenagers in America. They have this great music. They have these 
radios. Back then they had these Walkmans. What are they doing in 
America that we should do in Russia to improve our lifestyle?
  Our military strength, make no mistake about it, our military 
strength kept Russia from attacking us. Our military strength was a 
critical element in bringing Russia down to its knees. But the 
overriding factor that brought Russia to its knees or that the Russian 
people wanted was freedom. They wanted a taste of life that was a lot 
sweeter. They wanted the freedom of expression. They wanted the freedom 
of religion. They wanted a lot of freedoms that had been denied to 
them. And little by little, through Radio Free Europe, remember, that 
is how we got in there. Today we are going to get in China through the 
Internet.

  Back in the Cold War days we got in through Radio Free Europe. They 
turned on these radios, and no matter how hard, no matter how 
decisively the Russian leaders tried to shut down Radio Free Europe or 
shut down those signals, those Russian people still had radios hidden. 
They would pull them out at night and listen to the Americans on Radio 
Free Europe talk about how good things are and how capitalism can work 
in your country too, that we are not asking you Russians to become 
Americans; we are asking you Russians to enjoy the freedoms that 
Russians deserve.
  It was through that kind of effort that capitalism began to sneak in. 
American music and American music plays a very important part. You may 
say ``that is somewhat exaggerated, Scott.'' It really does play an 
important part.
  As I travel throughout the world, which I have done fairly 
extensively, almost everywhere I go it is American music being played, 
and you know the young people that listen to this music, they have good 
impressions of America. That is where this good music comes from. It 
worked the same way in Russia. You begin to see American music. You 
begin to see American products in the wealthier class. The ruling class 
in Russia had the use of these products, but the common man out there, 
they noticed them and they wanted them too.
  Then pretty soon the operation of the government control began to 
collapse in Russia, and, what do you know, the Russian empire fell. 
Whoever thought that the Berlin Wall, that they would live to see the 
falling of the Berlin Wall? I never imagined it. But that was a 
remarkable event in our history.
  Well, I think we can apply the same type of standards, and I think we 
ought to look from the same historical point of view as to China.
  Now, what about this trade with China? What do we accomplish? Should 
we do it? As one of the previous speakers, who loves to talk about 
corporate America and big corporate this and big corporate that, I 
mean, you know, it sounds like a broken record. Forget talking about 
big corporate America. Talk about the small businesses.
  Talk about, and I wish my colleague were here, talk about the farms 
and ranches in Colorado. Talk about the corn growers or the wheat 
growers. Talk about the people that produce chicken eggs. Talk about 
our dairy farms. There is a lot of people out there we ought to talk 
about that are not big corporations in America, that are not oppressive 
business entities in America, that are not out to squash the freedoms 
of American citizens.
  There are a lot of people that work very hard. In fact, they probably 
work a lot harder than we, and we work hard on this floor, and they 
work harder than we do in their small business.
  Trade means something to them. With the advent of the Internet, you 
cannot be an isolationist. Some of your colleagues, when you hear from 
other colleagues and they say, ``Well, look, I am for free trade. I 
think we should be in on the international business, but, boy, I am 
sure opposed to NAFTA, and I am sure opposed to China trade. By gosh, I 
am opposed to any trade like this.''
  Come on, you cannot have it both ways. And which way works? Sit down 
with your colleague, my friends, and say hey, show me the historical 
basis of where isolationism works, number one, and, number two, tell me 
how you are going to isolate China. How are you going to do it? You 
cannot. Isolationism does not work, and you are not going to isolate 
China.
  Now, I have some pretty resentful feelings towards China. I expressed 
those to you tonight. I lost my friends at Tiananmen Square, so I do 
have a deep resentment towards the way that those leaders, the leaders 
at that point in time, treated their young people, and I think that 
China does have very oppressive human rights, and I think China's 
communism is not long for lasting. I think in the next 20 years it will 
break, just like Russia's did. I know I am no fan of China. But it is 
because of that very fact that I am not a fan of China, that I still 
contain within my heart some bitter resentment towards the Chinese 
government, it is because of those reasons that I think we should do 
exactly the opposite of what my colleagues who preceded me talked 
about.
  I do not think we should isolate China at all. I think the worst 
nightmare of the Chinese leaders, their worst nightmare, is that their 
people will begin to get a taste of American music, of American art, of 
American enterprise, of American freedom of speech, of American freedom 
of religion.
  You know what? That is what those Chinese leaders fear the most. They 
love it when primarily my Democratic friends stand up here and say 
isolation or no trade with China. They love you to talk like that, 
because they know they are too big for you to be any kind of threat at 
all to them through isolationism. They know you are not going to 
isolate them. They would just as soon you not try to get freedom in to 
their people.

  My Democratic colleagues, they would just as soon you stand up here 
and act like this, the ones that oppose this trade. ``My gosh, we 
cannot do this and that with China.''

[[Page H3162]]

  You know, you are taking exactly the wrong track, in my opinion. If 
you want to break China to its knees, and I want to do that, you begin 
to put free enterprise into that country. And how do you get free 
enterprise into that country? You get American products over there. You 
open up trade with this country.
  Now, remember, it is in fact true the EU and a number of other 
trading entities in this world would love for the United States not to 
trade with China, because 99 percent of the products that we trade with 
China are nonmilitary products. So let us take the military issue out 
right away. That 1 percent of military products, let us not trade it. I 
agree with you, let us isolate ourselves on the trading of any military 
hardware. I do not object to that at all. I do not think we ought to 
give China one bullet. If they have to buy it from the Europeans, let 
them buy it from the Europeans.
  But, that said, the other 99 percent of consumer goods, where is your 
objection? Do you realize that when the Chinese people get to begin to 
enjoy American products, whether it is a coffee maker, whether it is a 
disk player, whether it is the clothes, whether it is just a writing 
pen, I mean, whether it is a pair of skis, I mean, all of these 
different things, do you realize what happens when a person who has 
never tasted freedom gets to feel American enterprise? It is like 
tasting hot apple pie for the first time. You want a second bite. It 
sticks with you. You like that cinnamon flavor.
  That is exactly what is going to happen with China. And then you know 
what happens? First they begin to get the taste of American products. 
They want more. And then they begin to want more. More products? Oh, 
yes, more products.
  But what, more importantly, do they want? They begin to say, you 
know, we want more freedom of movement in this country. In America they 
can get in their car and they can travel clear across the country. They 
are not stopped at the borders. They are not searched at the borders. 
They can go. Why cannot we do that in China?
  In America they can voice their opinion. In America they have got 
this freedom of religion. That is what begins to seep into this 
country. If you want to bring China around, do not ignore them, do not 
isolate them. Let us go in there and improve the situation. Let us go 
in there and look at it from a constructive point of view.
  Now, I have heard some of my colleagues talk about, well, we could be 
at nuclear war with China. China, we will be at war with China within 
the next 10 to 15 years. Well, I do not downplay your remarks, not at 
all. I do not downplay your remarks one bit.

                              {time}  2230

  In fact, I think the Chinese are a serious enough military threat 
that we need to get on the ball over here and we need to do two things. 
One, we need to not allow our President to go overseas and agree with 
the Russian Government to cut our nuclear arsenal below the red line, 
which is the line that our military experts say is the minimum we need 
to sustain the safety of American citizens in a conflict. We need to 
have a military that is second to none and is by a factor of many much 
more efficient and much more devastating than the Chinese military.
  We need to be prepared, if China were ever to move, to defend 
ourselves and to protect American citizens. So I do not downplay the 
military threat at all. I think the United States must be fully 
prepared militarily to take on China or anybody else in this world that 
possess or exercises a threat against American citizens or our allies.
  I think while we do that, we must, as we did in Russia, 
simultaneously get the word of free enterprise and get capitalism into 
China. Remember with Russia we had the nuclear missiles. We put nuclear 
missiles on the European continent. We shored up NATO but while we were 
doing all of this, we still had Radio Free Europe working. We still had 
Radio Free Europe. We kept plugging away. We kept trying to get 
American enterprise in, get American products in behind those Russian 
borders. It began to seep, it began to crack, and finally it did crack.
  With China, Mr. Speaker, instead of saying, well, we are going to be 
at war with them in 10 to 15 years so let us ignore them, I say 
different. I say we should approach China, to the extent that we can, 
and get the taste of freedom to those Chinese citizens because that is 
one thing the Chinese Government leaders cannot take away from their 
citizens. Once they get the taste of freedom, it will be just like the 
Russian empire. Once they get that taste of freedom, no matter how 
harsh a leader you are, no matter what you do, that freedom will spread 
like a strawberry patch. It will grow and it will survive the winter 
and it will grow the next summer and it will survive the winter and it 
will grow the next summer and it will grow and grow and grow, and that 
is what will bring China down.
  I hope my colleagues this evening who for the sake of politics are 
saying that they oppose trade with China, listen to my remarks. Here is 
a person who has a very bitter taste about what China did to his own 
friends. Here is a person who in his initial years of reaction to China 
took an isolationist policy, but here is a person who after having 
studied the Cuban and Russian model has decided the best way to do it 
is continue to build the strongest military known in the world's 
history but at the same time getting that taste of freedom inside the 
borders of China.


                             Tax Management

  Mr. McINNIS. Well, we have discussed China to the extent that I am 
going to this evening, but let us move on to a new subject. I notice 
lately we have obviously in this country, Mr. Speaker, we have a 
presidential election going this year, very important election. There 
has been a lot of, I think, play on words or tricks through the use of 
semantics about, geez, the Republicans want tax cuts; that is all the 
Republicans want are tax cuts, and we, the Democrats, we want to keep 
the money, trust us, we want to keep the money and use it to help shore 
up Social Security. Well, I want to talk a little more about taxes and 
tax management, because taxes are an important factor.
  I am not advocating that today we go out and produce a massive tax 
cut for the American citizens. There are some specific taxes that I am 
going to talk about that are punitive, that are punishing, that are 
unfair, like the death tax, which the Democrats continue to push and 
push and this administration not only pushes the death tax but this 
administration attempts to increase the death tax $9.5 billion in the 
budget they gave us this year.
  There is a marriage penalty which when we brought up in front of the 
Democrats, although they had 40 years to do something about it, there 
is that marriage penalty when we finally got it up here for a vote many 
of them voted for it. Now we see the Democratic administration opposing 
it.
  It may never be signed. It is unfair. This is a country where we 
ought to encourage people to be married. We want to encourage families. 
We do not want our young people to be taxed just because of the fact 
they are married, and taxed at an unproportionate rate.
  There are those kind of taxes that I think we have an inherent duty, 
as Congressmen, we have a fiduciary duty to our constituents, to be 
fair to them. The death tax is not fair. It should not be there. It is 
nothing but a transfer of wealth.
  We are not a socialistic society. We do not, in our society, say go 
to the wealthy or now in our country go to even the lower middle class 
or the middle class, capture their assets and give them to the people. 
We are not a society that says go to the people that work and take away 
from them the fruits of their labor and give it to the people who do 
not work. That is socialism, and that death tax is darn close to a 
defining foundation of socialism and it ought to be eliminated.
  What I think we should talk about is tax management. Now as we all 
know, Mr. Speaker, those on the Democratic side had control of this 
House for 40 years. I think it is very interesting, when we have heard 
the proposals for Social Security, when those who believe that Social 
Security, the people who are on it deserve more, the people who will be 
on it some day deserve an opportunity to enjoy the taste of American 
enterprise by having personal investment accounts, I find it 
interesting that the people who managed it, the Democrats, for 40 years 
and got it into the deep hole that it was in now

[[Page H3163]]

are saying to the American people, my gosh, the Republicans have come 
up with a good idea; run from it, people, run from it.
  How dare any of us think of something different to do with Social 
Security. How dare any of us talk about a person actually having some 
choice in their Social Security dollars. Trust us. For 40 years we ran 
the Social Security and we ran it into the hole, but do not change. My 
gosh, our historical basis, 40 years of lousy rotten management and 
now, by gosh, the Republicans are proposing a tax change or a change in 
the management of Social Security. Well, it is the same thing with 
taxes. Take a look at what has happened to tax management since the 
Republicans took control.
  Now, I generally do not like to get too partisan in my remarks on the 
House Floor but this floor is designed for partisan debate, and there 
is a clear distinction between the Republican Party and the Democratic 
Party when it comes to tax management. In my opinion, the Democrats 
manage taxes in every way possible to get the maximum tax dollar 
transferred from the local and State government to the central 
government or to the Federal Government in Washington, D.C.
  Now when we took control, when the Republicans took control, take a 
look within those 6 years what has happened with tax policy. I will 
give an example. This could have happened in any of the 40 years that 
the Democrats controlled your taxes. It took the Republicans to make 
this tax change, to manage these taxes.
  What did we do? The Republican Party, through our leadership, 
realized that the one property that most people in this country dream 
of, that really is the largest asset in most of the homes of this 
country, in most of the families of this country, is the family home. 
Yet we found out that the family home, under the tax management of the 
Democrats the last 40 years, that the sale of this property, the sale 
of the family's largest asset was being penalized. It was being heavily 
taxed. So we proposed a new idea, and, of course, we had the typical 
the sky is going to fall, just like we hear on Social Security. Do not 
try anything new on Social Security. Stick with us. We have had 40 
years of rotten management. Stick with us, trust us, count on us.

  The same thing with this tax, but fortunately we have the majority, 
and the Republicans looked at what individuals and couples pay for 
their home. Now let me say what the old law was. The old law said that 
if someone sold their home for a profit, in other words if they bought 
a house for $1 and they sold that house for $2, they then had to buy a 
house of equal or greater value to what they sold the last one. So they 
bought it for $1. They sold it for $2. To avoid being taxed on the $1 
of net profit they made, they had to buy a home that had a value of at 
least $2. They had to do it within an 18-month period of time or they 
paid a very steep tax on the fact that they were able to sell the 
family's biggest asset at a profit.
  Now there was one exception to that. If one was 55 years old, they 
got a once-in-a-lifetime exemption of, I think, $125,000 or $150,000. 
We changed that. We believe that the family home is an asset that most 
families try and build up equity. A lot of families build up equity in 
their home that they intend to use for their retirement. A lot of 
families build up equity in their home that they hope to be able to 
pass on to the next generation. Why penalize the families on their 
home? And therein is where the Republicans differed with the Democrats 
on tax management.
  So what did we do? Here is what we proposed, here is what became law. 
Again, let us look, before the Republican tax bill, an individual, this 
individual bought a house for $100,000, sold the House for $350,000. 
The profit was $250,000. The tax, the income that would be taxed is 
$250,000. Now that is an individual.
  Let us take a couple, an example of a couple. Let us say a couple 
bought a home for $200,000. Let us say that they sold the home for 
$700,000. So obviously their profit is $500,000. They paid taxes on 
$500,000. We changed that. Here is what we did, and every one of my 
colleagues that owns a home ought to pay attention because every 
homeowner in America gets a tax break if they make a net profit on the 
sale of their home; every American. For most Americans, Mr. Speaker, it 
will be the most significant tax break they have gotten in their life. 
It is significant.
  We went and said, all right, up to an amount of $250,000 we are going 
to charge zero taxes. That is for an individual. So if an individual 
buys a home for $100,000, sells the home for $350,000, giving us a 
profit of $250,000, the taxes are zero. Remember back here under the 
Democrat leadership for 40 years, $250,000 profit, $250,000 that would 
be taxed. Our $250,000 now, in law, our bill on the Republican side, 
the tax is zero. The American people get to, Mr. Speaker, put those 
dollars in their pocket.
  Now, what happens to those dollars? Number one, they do not come to 
Washington, D.C. for redistribution. They stay in their community. They 
either go buy another house or they buy some additional property or 
they buy a new car or they put it in a savings account in a bank that 
turns around and loans it to somebody who wants to buy a new car. That 
is money staying in the community. That is money that is staying in the 
family.
  Under the Democrat management of these tax dollars that money went to 
the bureaucracy in Washington, D.C. for redistribution. Under the 
Republican policy, that money stays in the taxpayer's pocket.
  For a couple, most homes in America are owned by a couple, we gave 
that a $500,000 exemption. So here the couple buys a home for $200,000. 
They sell the home for $700,000. They make $500,000. Under the 
Democrats, they pay taxes on $500,000. Under the Republicans, they pay 
taxes of zero, zero.
  Now, whenever one hears the Republicans talk about tax management, 
they hear some of the Democratic leadership talk about, oh my gosh, if 
we cut taxes we are going to cut education. Why education? Because they 
have been out there with their polls, and the polls say, look, if you 
want to scare somebody tell them they are not going to get the 
education for their kids. Who would not get scared? We all want a good 
education.
  We heard the same kind of the sky is falling in when we did this tax 
management policy. Mr. Speaker, have any of you who have owned a home, 
who have enjoyed this tax management, have any of you out there seen a 
school close or one school in your county, in your city, in your State 
or anywhere in this country, one school get one less dollar because we 
let the American family put these dollars back into their pockets 
instead of transferring them to Washington?

                              {time}  2245

  No. What we see is a record surplus in Washington, D.C. This is good 
tax policy. This is the kind of tax policy that differentiates between 
the Republicans and the Democrats.
  Let us talk about some other tax policy. Again, keep in mind, here is 
another difference. I talked about it earlier, but it is important to 
re-note. With death taxes, Mr. Speaker, we know there is a difference 
in the parties in this. The administration, the Democratic Party in 
general, not everyone, but in general, supports these death taxes.
  They think it is appropriate to go out to somebody who has worked all 
of their life, paid taxes on their property, in some cases paid taxes 
one or two or three times, and the instant they die, send in the 
governments, get in there and raid their pockets. It is called the 
death tax.
  There is a significant difference. The Republicans want to get rid of 
it. We want to eliminate the death tax. It is not fair. It is punitive. 
It is on property that has already been taxed. It has already been 
taxed.
  Let us talk about the other tax that we managed to get rid of, a 
little more successful than we have been with eliminating the death 
tax. Do Members know what happened? Democrats, as soon as we put this 
in front of them, they voted for it. For 40 years they had an 
opportunity to get rid of it and they never even brought it to the 
floor. Once we got it to the floor, this thing went out with unanimous 
support. Everybody voted for it. Everybody went back to their districts 
and talked about, hey, look what we are doing for the seniors. Look how 
good we have been to the seniors.
  Let us talk about what that does. What the tax on the seniors did, as

[[Page H3164]]

many know, we have one particular paragraph, beneficiaries, we know 
this, aged 65 to 69, full retirement age, could only earn up to 
$17,000. After that, that is all they could make.
  We have an employee shortage. We have a lot of senior citizens who 
may be senior citizens as classified by age, but they are good workers. 
They want to be in the marketplace. They want to go to work every day. 
They are productive.
  The philosophy, frankly, of the Democratic Party through their tax 
management policy, and again, we are talking business, here, and I am 
not trying to be partisan, but let us talk business, because there is a 
difference in management. The management that they had frankly was that 
the $17,000, it should be limited. Once earnings go over that $17,000, 
they should lose $1 of social security benefit for every $3 they make 
in the marketplace.
  Was that fair? We said no. We did not think so. Do Members know what 
the Republican policy management was? Do Members know what the 
Republicans said about this tax? Here is what we do with it, take away 
the tax that we are putting on senior citizens who want to work.
  I appreciate the fact that all my colleagues on the Democratic side 
voted for it. But I also question the fact, where has it been for 40 
years? How in God's Earth could they justify doing that kind of tax? 
How do they justify a death tax? How could they justify a tax on 
marriage penalties, penalizing somebody who is married?
  Let me mention another tax that helped our economy. In fact, if we 
talk to a lot of economists, these economists will tell us that one of 
the most significant factors in the healthy economy we have today is 
that when we took control, the Republican tax management philosophy was 
take capital gains, which was then 28 percent, and drop it, drop 
capital gains, which is exactly what we did. We took it down to 20 
percent.
  Now, we heard from the other side, of course, the sky is going to 
fall down, schools are going to close, we are not going to get our 
highways, and that this is the wrong time to give money back to the 
American citizens, even though there is a huge surplus.
  Do Members know what happened? A funny thing happened. In the last 
several years, hundreds and hundreds of thousands of American citizens 
began to buy mutual funds. Hundreds and hundreds of thousands of 
American citizens began to invest. They begin to recognize that, hey, 
this is an opportunity. This is a good economy.
  Do Members know what? Capital gains all of a sudden, and that is what 
we call this, capital gains taxation, all of a sudden the meaning of 
capital gains grabbed a lot of people's attention. When we dropped it 
from 28 percent to 20 percent, we had an explosive, an explosive 
economic growth.
  That 8 percent may not sound like much, but wait until one is a 
middle-income person or lower-income person and sells some stock and 
realizes 8 percent of it, gets a tax break of 8 percent.
  Did they close any schools as a result of dropping capital gains from 
28 percent to 20? No. In fact, what happened was the money to the 
Treasury went up like this.  We saw more movement in the capital 
markets. We saw capital being created. Now we had more dollars than we 
ever had for schools. Now we had more dollars than we ever had for 
highways. Now we had more dollars for a lot of different needs that we 
have in this country.

  That is important. That is important tax management. Education, for 
example, and I cannot find anybody that disagrees with this, is one of 
the highest priorities our Nation should have. We should fund it. I 
think funding it is in part a responsibility of good tax management.
  Members will see in this upcoming election, on their side they are 
going to try and say, my gosh, do not let the Republicans cut taxes. To 
be fair to those voters out there, colleagues, I think we all need to 
talk about the kind of taxes that we want to cut.
  I think to be fair out there, they need to say, you know, the 
Republican leadership wants to do away with the death tax. What do you 
think about it, people? Is it fair to tax you all your life for 
property you have earned and made through the American system, and then 
on your death, tax you, take it away from you, force your family to 
sell it and transfer it to somebody else, to the bureaucracy in 
Washington, DC?
  When we talk about tax cuts by the Republicans and our tax management 
policy, ask them if it is so wrong to eliminate the marriage penalty. 
In our country where we penalize people for being married, what is so 
wrong with eliminating that? When they talk about the tax policy that 
the Republicans have, ask how many homeowners who sold their homes 
would, rather than have paid taxes on those in some cases tens and tens 
and tens of thousands of dollars, would rather have paid taxes and had 
a lot more faith in sending that money to Washington, DC than being 
allowed to save that money and use it in their own community?
  That is the kind of tax policy we are talking about. It is the same 
thing with social security. As we go, they go out to condemn us on 
social security because of the fact that for the first time in 40 years 
we have somebody willing to stand up and take the lead. We have 
somebody strong enough that says, I will take some bumps and bruises, 
but we have to change the course. We have to continue to give security 
to the people on social security, and we have to give promise to the 
people who some day will be on social security.
  What is wrong with that? They ought to talk about that, talk about 
the 40 years of management that preceded these tax reductions, these 
tax management policies. They ought to talk about the 40 years of 
management with social security.
  My point here this evening is this: All of us, Republicans and 
Democrats, have a fiduciary responsibility to help fund this government 
in an efficient and productive fashion. That means that we must deploy 
good management tactics.
  There are times where we may have to have some type of tax 
adjustment. Do not run away from it. There are times when we have to 
have a change in the management of social security. Do not run away 
from it. The best way for us to protect social security for the people 
today, and every Republican plan I have seen out there gives absolute 
protection to the people on it today, and frankly, protection from my 
generation, but it gives promise for the generation behind us. Do not 
run away from it, analyze it, take a look at it.
  I wish they would have analyzed the marriage tax penalty years ago, 
and what they were doing to seniors who wanted to go out into the 
marketplace and earn a living. They penalized them for it. I wish they 
would analyze what they are doing to American families, small 
businesses, farms, ranchers, with the death tax.
  I wish they would analyze some of those things. If they do, they are 
going to say, look, folks, we cannot give all of the money back, but we 
can manage some of it. When we manage our taxes, everybody wins. That 
money stays in the community. It still helps the Federal government. 
When we keep money in the community, if we want to talk about helping 
education, keep that money in the local community. That is where we 
help education.
  Mr. Speaker, let me move off the taxes and just kind of wrap up my 
final comments with some points I think that are important on 
education.
  I am very excited about education this year. I have seen in Colorado 
what we are doing with education for the first time I think in 12 
years. The Governor of the State of Colorado, Governor Bill Owens, has 
fully, and his legislature, have fully funded education in Colorado.
  We have a new program, the Governors' educational reform program, 
that was kind of like Reagan when he caught holy heck for his defense 
program, and Governor Owens has gotten some grief on his education 
reform. Five years from now or 10 years from now we are going to look 
back at Governor Owens' reform package and say, you know, he was right. 
He did a good job.
  I am excited about education at the Federal level. I am beginning to 
see that the American people are beginning to focus more and more on 
the student in the classroom and less and less on the bureaucracy that 
is built above that student.

  I think the American people are beginning more and more to realize 
that we need to bring discipline back to the schoolroom; that 
discipline is a necessary tool to teach our young people.

[[Page H3165]]

  I think the American people, and it excites me, are beginning to say 
about our schools, you know, uniforms may not be a bad idea. Let us 
bring uniforms to our schools. Philadelphia, I think, is the most 
recent one to try it. They caught some heat.
  Somebody said, well, it takes away our freedom of expression, but it 
introduces a form of discipline back in the classroom. I am excited 
about these things. Had we not had the debates we have had on this 
floor and the debates that have been held in our 50 States, probably in 
every school district in this country, our product of education would 
not have improved.
  It needs to improve. This country has got to have education that is 
second to none. But just like the taxes, we need management. That is 
why the Republican leadership has spoken so strongly about discipline 
in the classroom, about uniforms in schools, about fully funding 
schools, like they have done, like the Republicans did in Colorado.
  Why do I keep saying Republicans? Obviously, I am a Republican. I am 
proud of what we are doing. At one time many years ago I was not so 
confident that the Republicans were giving education the attention it 
needs. Now I am concerned that the Democrats are hanging onto the old 
ways, the ways that have been proven inefficient, instead of letting us 
put reforms in these schools that will bring back the basics, math, 
English, school discipline, the reading.
  But as a team, I think we can improve education. I am willing to work 
with them as a team. I think it is an exciting year. I think the next 3 
or 4 years will be even more exciting for education.
  Mr. Speaker, in final conclusion, let me say to my colleagues, they 
should not disassociate themselves or disqualify themselves from 
talking about tax management. We need to manage those taxes. We have 
been very successful. Do not run away from trade with China. That may 
be the very way we break China and bring them around to the freedom of 
America.
  Finally, stick with us on our education agenda. We have an agenda 
that will improve that product to the student in the classroom, that 
student that will be the next leader of America.

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