Congressional Record, Volume 146 Issue 93 (Tuesday, July 18, 2000)

[Congressional Record Volume 146, Number 93 (Tuesday, July 18, 2000)]
[House]
[Pages H6441-H6448]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

QUESTIONS REGARDING REPUBLICAN TAX BILLS

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from Texas (Mr. Edwards) is recognized
for 60 minutes as the designee of the minority leader.
Mr. EDWARDS. Mr. Speaker, one of the most important issues facing
Congress this year is how we should address the use of the surplus, the
projected surplus this year and in the years ahead. The purpose of
tonight's special order is to address three questions regarding the
Republican tax bills proposed as a response to the projected or
possible surplus.
The first question we want to address is, are the Republican tax
bills fiscally responsible? The second question we want to address is,
are the Republican tax cuts proposed in the House this year fair to
average working families? The third question we want to address is,
what major national priorities if any do the proposed and House-passed
Republican tax cuts crowd out, other high national priorities?
Mr. Speaker, let me say that over the last several months, I have
heard a lot of speeches about values. It is good that we discuss
values. Values are an important part of who we are as an American
Nation and as American individuals and families. But I would suggest
that as Members of the House, how we vote on the question of spending
the people's money says more about our values as Members of Congress
than all the political speeches in the world.
Let us go back to the first question we want to address this evening.
Are the Republican tax bills fiscally responsible? I would suggest the
answer to that question is no. First, let us look at the cost of those
tax cuts that have passed the House. Because of the strategy of
divvying up the pieces of the pie, a lot of Americans and Members of
Congress have not really put together those pieces to figure out what
the true total cost is of just the tax cuts proposed and passed in the
House this very year alone. The answer to that question is those total
$573 billion over 10 years.
Now, Mr. Speaker, if we include the additional interest cost as a
result of those tax cuts, the House has already passed a series of tax
cuts that almost total the total amount of the massive tax cut passed
in the House last year that the American people rejected overwhelmingly
as being irresponsible at a time when Americans felt we should pay down
the national debt.
Let me make several key points about the question of fiscal
responsibility. Some say that we ought to pass these massive tax cuts
because this is the people's money and they have earned it, they are
paying it, they should get it back. I would agree with that point.
There is some credence to that point except for one clear, undebatable
fact, the fact that we have a $5.6 trillion national debt. That is not
just some sort of vague number that most of us cannot relate to
because, in fact, the average family in America pays about $1,000 per
man, woman and child in interest payments on that national debt. That
interest payment, paid for by our taxes, does not educate one college
student, it does not help train one Army soldier, it just is paying off
the interest on past national debt.
So I would suggest it is fiscally irresponsible most clearly to pass
these massive tax cuts based on projected future possible surpluses
because we ought to be paying down the $5.6 trillion national debt that
is soaking away money from taxpayers and other high national
priorities.
The second point about fiscal responsibility I want to make is this:
all of these projections, including the most recent Congressional
Budget Office projections, are just that. They are projections. I often
hear from my colleagues, and I think it is good advice, we ought to run
the government like a business. We do not often do that. I would
suggest that if a business in any district in this country were to say,
we

[[Page H6442]]

project our revenues and profits over the next 10 years to be an extra
couple of trillion dollars, and therefore we ought to go out and spend
money right and left, give our stockholders dividends, give massive
salary increases to our employees and our executives based on nothing
more than hopeful projections for 10 years, I would suggest that
company would be bankrupt very, very quickly. Clearly, a business
cannot go out and say, These are our projected revenues for 10 years;
therefore, let's spend all that money, either in new spending programs
or in the tax cuts proposed and passed in the House by our Republican
colleagues.

I would like to ask whether there is any Member of this House that
would be willing to bet his or her net worth on any economist's
projection for the next 10 years. What we have learned is that the
projections over the last 10 months have been off to the tune of
possibly trillions of dollars; and to invest, to bet, to gamble our
children and grandchildren's future that economists' projections of
Federal tax revenues over the next 10 years are going to be exactly
correct is just that, it is a gamble and it is an unfair gamble at the
risk of our children and grandchildren's future.
Mrs. THURMAN. Will the gentleman yield?
Mr. EDWARDS. I am glad to yield to the gentlewoman from Florida who
has been a real leader on the Committee on Ways and Means in discussing
the tax issue this year in Congress.
Mrs. THURMAN. Focusing in on just that issue here for a moment, and I
hate to break your steam here because you are doing a great job.
Mr. EDWARDS. I appreciate the gentlewoman's involvement.
Mrs. THURMAN. We have also offered on this floor similarly to what we
offered and was passed on the CARA bill, which was the conservation
issue, that nothing would be spent until we could and made sure that
Social Security and Medicare were preserved. And any one of the other
instructions that we have offered since that on every issue except for
the tax issues, we cannot get that guarantee. Based on this assumption
that there will be a surplus, there could be a surplus, there might be
a surplus, and yes, it looks good for the country but we are still
working off of assumptions, it would seem to me that the pressure
should be put on Republicans to make sure that in fact we do guard
against those issues that we all feel are very important and, that is,
Medicare and Social Security. When those have been offered, they have
been turned down, particularly on the tax issue. I do not understand
that.
Mr. EDWARDS. Certainly no business would be able to make that kind of
hopeful projection and say we will commit our company's resources for
the next 10 years to a massive extent of expenditures or extra
dividends to stockholders based on perhaps a very optimistic
assumption, in fact what I think is an unrealistic assumption in this
case, about the Nation's economy over the next 10 years.
But I think the gentlewoman is correct. I do not recall one bill
coming out of the Committee on Ways and Means on which she serves that
has come to the floor that has said, now, these tax cuts are contingent
upon every assumption in these grandiose 10-year projections coming
true. The fact is the way they have passed these, we could have, for
example, an economic crisis, we could have a military crisis throughout
the world that could dampen a 10-year projection of a 2.7 percent
increase over the next 10 years in our economy, projecting no recession
for a longer period of time than has ever occurred in this country
without a recession. They do not have any qualifiers saying, we will
qualify those tax cuts based on what happens to the economy.

{time} 1900

To me, that is the kind of thinking that got us in the 1980s into
what is today a $5.6 trillion national debt.
Mrs. THURMAN. If the gentleman would yield, not looking at what
potential emergencies we could hit in this country. We have continued
to pass over the last couple of years emergency spending, which
continues to kind of eat into some of these surpluses as we know them.
Mr. Speaker, we do not know what emergencies might be ahead of us,
and we are not making any provisions for the kind of rainy day that
could potentially happen in this country.
Mr. EDWARDS. In fact, to comment on that, I thought one of the
shortfallings of the Republican tax bill last year, that the American
people so overwhelmingly rejected, was that it assumed there would be
no national emergency over 10 years.
I cannot recall in a 10-year period where we have gone without having
a tornado, without having a drought for our farmers and ranchers. In
fact, within days before the ink was dry on passing that legislation
through the House, the very same people who said there would not be
emergencies for 10 years, voted in favor of expending, I think, $10
billion to $15 billion, perhaps more in emergency spending just for
that one year. And yet their assumption assumed there would be no
emergency spending over 10 years.
Mrs. THURMAN. That is correct.
Mr. EDWARDS. I think what we are saying is this is an economic sand
castle built on a foundation of sand; and it would be much more prudent
in business and in government to be very cautious, whether it is new
spending programs or whether it is tax reductions, to not commit that
expenditure of dollars up front, not knowing whether 10 years of
projections would be true.
I would like to ask the Member, the gentlewoman from Florida (Mrs.
Thurman), if the gentlewoman recalls any major national economist
predicting that oil prices were going to double over the last several
months.
Mrs. THURMAN. No. No. And therein itself is a perfect issue as it
comes to the defense issue, because now we are wondering how we are
going to continue to keep things rolling and not have some kind of an
emergency on funding because of the gas price issue that we are dealing
with.
Mr. Greenspan and others have been before our committee several times
over the last couple of years and never once was it mentioned that we
potentially would have the prices of gas go up as they have. Hopefully,
they are coming down; but, in fact, they have gone up. No, it is a
serious problem.
Mr. EDWARDS. I think, Mr. Speaker, our point is that we live in an
uncertain world. We are not here to belittle economists and their role
in our society; but we are here to say that it is truly unrealistic,
and it is frankly disingenuous to suggest to the American people that
these economic projections are absolutely going to be correct.
Again, I would like to see which Member of this House, of either
party, would be willing to bet his or her family's net worth on the
assumption that these 10-year projections will be within 1 percent or
even 10 percent or 20 percent correct, and I came here in January of
1991. I know that not even the best predictions of our military
intelligence community could have predicted a few years earlier that
Saddam Hussein would invade the country of Kuwait. So the point is we
live in an uncertain world, and to pass certain massive tax cuts based
on an uncertain world with inexact, inexact science of economic 10-year
projections really is a prescription for returning to the old politics
of the 1980s for which our children and grandchildren will have to pay
a very significant price.
Mrs. THURMAN. Mr. Speaker, if the gentleman will continue to yield,
one of the things that does concern me in all of this, too, is the way
that somewhat it has been crafted. It is very easy to go home and say
we are only going to spend $55 billion on the marriage tax penalty, and
they think that is reasonable. Quite frankly, it sounds reasonable.
But then when we start looking at the 10-year projections; we are
talking about $248 billion. And the exact same thing happens with
estate tax or death tax. It starts off with a moderately low number,
and I can go home and I can say well, you know, this is only going to
cost us $28 billion over the next 5 years, but in the 10-year costs, it
is $105 billion; and that is when it goes into full effect. And then it
can be as high as $750 billion, which is by all accounts the surplus.
That gives us nothing for Medicare, nothing for shoring up Social
Security, nothing for debt reduction, and many of the assumptions that
we make to make this country continue to move ahead as it has been is
to buy down the debt so we can get rid of the interest payments so that
we have dollars available to us.

[[Page H6443]]

Mr. Speaker, I say to the gentleman from Texas (Mr. Edwards) some say
we might look a little conspicuous up there that we might be against
tax relief to the American people. In 1997 we had a wonderful
bipartisan, huge fight, we had big fights on the floor, and I do not
even know that it got sent to the President, I think it got worked out
before it went to the President; but the fact of the matter is we all
voted. And my guess is that the gentleman voted for it, too; we did a
reduction in capital gains.
We gave student interest loans. We did the mortgage interest so that
anybody that had a home every 2 years would have no capital gains for a
$250,000 to a $500,000 home. I do not have a lot of those in my
district, but we said, look, we need to give back some of this. We need
to make sure, but the difference was we also gave through the earned
income tax credit a little bump, and we did some things that spread the
cost of these tax cuts to not only the wealthy, but to the middle and
to the poor.
If we are going to be fiscally responsible, and we have asked people
since the 1980s to help us dig ourselves out of this, the very least we
could be doing is giving back to the entire population and, in these
cases, is not limited.
Mr. EDWARDS. In fact, I hope we can speak in just a few moments about
the question of are the proposed Republican tax cuts in the House this
year fair to average working families; and maybe I can conclude on the
first question that we want to address tonight, and perhaps the
gentleman from North Dakota (Mr. Pomeroy) would want to respond and
discuss also the issue of the fiscal responsibility of this as well as
get us into the question of are the Republican tax cuts fair to average
working families or not.
I want to conclude by saying this: the 1997 tax reconciliation bill
not only had tax cuts that benefited a wide range of American families
of all income levels, but it also had spending cuts. Many of those tax
cuts were paid for. I have not seen pay-fors for the Republican tax
cuts that have passed the House this year. The pay-fors are a hope and
a wish, a hope and a wish that some economist who we do not know his or
her projection is going to be correct for the next 10 years. If they
are wrong, our grandchildren, our children are going to pay a dear
price.
Mrs. THURMAN. Is it not true that one of the ways that we have dug
ourselves out of this debt so we do have or at least get to have a
conversation about surpluses and debt reduction is because of the rules
of the House as pay-as-we-go, both on spending and on tax limitations?
I mean, it is a pay-as-we-go; and to the public that means that if we
decide we are going to do something, just kind of like in your own
family, if we are going to buy that car for your child who is going to
go off to college, then over here we have to limit what we are buying
over here, so that we can pay for it.
I mean, that is how I have always understood it. And, of course, I
was not here when all the pay-fors and as-fors came into contact, but
it certainly has been something that when we are doing fiscal
responsibility that if we really believe that that is how we got in the
position of being able to even talk about tax reduction that we did it
through fiscal responsibility.
Mr. POMEROY. Mr. Speaker, will the gentleman yield?
Mr. EDWARDS. I yield to the gentleman from North Dakota.
Mr. POMEROY. Mr. Speaker, I want to participate in this discussion
and commend both my colleagues for basically stepping back and looking
in a broader context at what has been taking place here on the floor
week in and week out. It really is a time to see if we cannot really
see the forest for the trees, because I think that we are right in the
middle of accumulating a record that is horribly irresponsible at a
time of such wonderful opportunity for the American people.
We have through dint of fiscal discipline in Congress, and the
wonderful innovation and hard work and productivity of the American
people, worked ourselves out of deficits that were threatening the
future of this country. We now stand with surpluses running and
projected in dollar amounts never seen before. We have the opportunity
at this point in our Nation's history to eliminate debt held by the
public.
I guess if there is one thing that any family would want to pass to
its children is better opportunities than they found them. I know that
was certainly my parents' burning commitment to us as children. By
golly, I feel the same thing about my little ones. How about
collectively we do that for the next generation to follow and leave
this country with no debt held by the public? As we move into
retirement, all of these baby boomers, we do not entirely know what is
going to happen, but we do know if the country does not have any debt
we are in a darn sight better position to deal with whatever may come
than we can carry on those trillions.
Mr. EDWARDS. If I can respond, I know the gentleman from North Dakota
(Mr. Pomeroy) has small children. I have a 3-year-old and a 4-year-old,
both sons. I can think of a few things that I would like to pass along
to them as one Member of this House and to say to their generation, we
are going to take a Nation that was $5 trillion to $6 trillion of
national debt and pass on to your generation a debt-free country.
When we talk about tax cuts today, it does not take a lot of courage
to take our grandchildren's credit card and with that credit card
charge multitrillion dollar-tax cuts, most of which will go to the
wealthiest families in America.
I have a problem with the child or grandchild of an average working
family having to take their credit card from their generation to give
Bill Gates a tax cut, as has passed the House this year. I think that
is unfair.
Going back to the comments of the gentlewoman from Florida (Mrs.
Thurman) minute ago, it is the pay-for philosophy and rules of the
Congress that have gotten out of this terrible hole where we are
mortgaging our children's futures of the 1980s before we came to the
House.
It is the free-lunch bunch mentality of tax cuts do not cost anybody
anything and let us not offset tax cuts with spending cuts. It is that
free-lunch bunch mentality that got us is in trouble in the 1980s. Just
as we are climbing out of that horrible hole, what a horrible mistake
for our children and grandchildren it would be to take that free-lunch
mentality and go back and add up the national debt, rather than pay off
the national debt.
Mr. POMEROY. Mr. Speaker, if the gentleman would yield, one thing
that surprises me about all of this is the American people have
evaluated the proposition of a gargantuan tax cut going primarily to
the wealthiest families and crowding out other priorities. They
rejected it. One year ago, just before heading off on that August
recess, we voted on this $700 billion-plus tax cut advanced by the
majority.
We were told they were going to go home and sell this to the American
people. And when the President vetoed it, the first thing we would do
in September is override that veto, and those who had voted against
that tax cut would be bludgeoned into supporting it by their outraged
constituents because it was going to be so popular. Guess what?
The American people took a look at it. They said that is
irresponsible. It is not fair. It is not the time, and it does not
reflect our priorities as a country. Forget about it. And that bill,
the only one I can remember every vetoed was not brought back for even
an override. In the 4 terms I served in Congress, I cannot remember an
instance where they did not at least even try, but this thing did not
work.
Mr. Speaker, 1 year later, what is the majority doing? It is pretty
crass really, taking it in bites, the whole package was rejected. So we
will pass it chapter at a time as a stand-alone bill. How dumb do they
think the American people are? I will tell my colleagues something. I
do not think they are dumb at all.
I think they are the same responsible folks that rejected that
gargantuan, irresponsible proposal of a year ago, and they will this
time when they see it in its full context.
Many of us might have had the situation of resisting the temptation
of a large piece of cake then nibbling our way through the pan as the
afternoon goes on. The effect is the same.
Mr. EDWARDS. Mr. Speaker, I have also learned, speaking of cake with
a 3-year-old and a 4-year-old at home, that if we give them the ice
cream first, they are very unlikely to eat the vegetables and the meat.

[[Page H6444]]

If we pass in effect a trillion dollar tax cut this year, we are not
going to see the House having the courage to pass a trillion dollars in
spending cuts to match that. So what we are going to do is we are going
to decrease their ability to pay down the national debt.
Let me point out when we do that, we are really increasing taxpayers
interests on the national debt. So I guess in conclusion to our first
question tonight, the Republican tax cut proposals that have passed the
House so far this year, are they fiscally responsible? I think the
answer is no.
They are based on uncertain, perhaps terribly false assumptions about
where the economy in the world will be over the next 10 years. They
ignore the fact that we already have a $5.6 trillion national debt.
Let me clarify. Nobody on this floor tonight is suggesting tax
increases. We just want to make our top priority paying down the
national debt, which is probably the best way to get a permanent tax
cut to the gentlewoman who sits on the Ways and Means Committee. The
best way to give a permanent tax cut to the American people is to pay
off the national debt.

{time} 1915

That would free up $200 billion a year. Now, to put that in
perspective, that $200 billion could be passed as a major tax cut, a
permanent tax cut. It could fund two-thirds of our national security
needs in America, over two-thirds, in fact, of our military budget.
College loans could be provided for students all across this country;
grants. All sorts of things could be done, including permanent tax cuts
with that.
So I think it is very clear to me, when we look at the facts, that
Republican tax proposals this year are fiscally irresponsible and
perhaps that should take us to the second question. That is, if we are
going to have tax cuts, whatever level they might be, a trillion
dollars or a billion dollars, should they not be fair to average
working families? I think that would be a good discussion to have, and
I would just start it by making one point and then yield to my
colleagues.
I did a little research on the 1999 tax bill that passed the House,
that ultimately the American people rejected so clearly that our
Republican colleagues did not even try to bring it up for a veto
override after they listened to the American people and their
constituents in August. I did a little research and I found out that a
working family at the lower end of the income scale, compared to the
richest 1 percent of families in America, would have to have been born
32 years before the signing of the Declaration of Independence to enjoy
the same tax benefits over all those 200-plus years that the wealthiest
1 percent of families got in year one.
Now, even with the miracles of modern medicine, I do not think the
average working family is going to live that long, the point being that
the tax cuts were skewed to help the wealthiest families in America. I
think the proposals this year reflect unfairness.
I yield to the gentleman from North Dakota (Mr. Pomeroy) to talk
about the distribution of the Republican tax cuts and then to the
gentlewoman from Florida (Mrs. Thurman) who is a member of the
Committee on Ways and Means that handles these tax measures.
Mr. POMEROY. Mr. Speaker, I think the gentleman's question really
cuts to the heart of it because, after all, we are for tax cuts in the
context of a plan that gets the debt eliminated, deals responsibly with
the other needs and priorities we have, but as we approach that tax cut
we want it to be one that reflects the broad cross-section of this
country, not just to go to the most affluent, perhaps the financial
base of the majority party but not the rank and file of all of our
districts.
The fact of the matter is is most people in this country do not make
$100,000 a year. In fact, on average, the bottom 60 percent income
levels earn less than $39,000. I think that this chart here, prepared
by the Citizens for Tax Justice, lays it out pretty clearly. Here is
the stake of the plans passed so far and in the pipeline by the
majority of the bottom 60 percent. The bottom 60 get 8.9 percent. Now,
the next 35 percent, those from $39,000 to $130,000, get a third of the
package, leaving almost two-thirds for the top five percent.
Why should two-thirds of the taxes go to the top 5 percent of the
people in this country?
Tax cuts ought to go to those who most need them, and obviously the
top 5 percent income levels in this country are not those that have the
toughest time with the family pocketbook issues, affordable health
care, saving for retirement, getting the children to college. So why
would we want to pass almost two-thirds of the tax cuts and send it to
them? I think there are folks that need it more and they ought to have
the high priority.
A Committee on Ways and Means analysis of the tax cuts passed so far
by the Committee on Ways and Means shows that about half, the lowest
half in terms of wage earners, would get on average about 100 bucks a
year; whereas, the top 20 percent would get 76 percent of the benefit
or more than $2,000 a year if one figures on equal dimension.
The top 10 percent gets 60 percent. The top 5 percent nearly half, as
reflected, and the top 1 percent 27 percent.
Now, those are different slightly, depending upon which tax bills
were figured into the measurement, but one thing is precisely
consistent, regardless of the tax measure the majority has advanced. It
is skewed to the most affluent in this country.
Now, believe me, the most affluent in this country play critical
roles in making our economy run, building our businesses. We honor
their participation in our economy but that does not mean they have the
hardest time with the fundamentals of making a go of it as a family,
and, therefore, should not be first in line to soak up most of the tax
relief we pass. Let us get the tax relief to our middle income families
who are having the toughest go of it, and I think those are the
distribution issues that are so troubling about the construction
of this tax plan. It is a huge tax cut plan that forgets about
eliminating the debt and other priorities we have as a country, and
then they do not even distribute it fairly. Far from the middle class
getting the benefit, this thing is skewed to the wealthiest people in
the land and they are not the ones most in need of this kind of tax
relief.

Mr. EDWARDS. Mr. Speaker, I would like to yield to the gentlewoman
from Florida (Mrs. Thurman).
Mrs. THURMAN. Mr. Speaker, this number has escaped me. How many
people do we have or how many families do we have in this country? Does
anybody know? About?
Mr. EDWARDS. Three hundred million total population; about 270
million or so citizens.
Mrs. THURMAN. Mr. Speaker, if the gentleman will yield then, I found
this very interesting. Working off the numbers of the gentleman from
North Dakota (Mr. Pomeroy), and I love this guy because he is so good
at numbers, I mean he just knows this stuff, but one of the numbers
that stuck with me was that if one thinks about the 270 million people,
that top 1 percent that we have talked about or top even 5 percent is
only about, ready, 1.2 million families; 1.2 million, out of 270
million or say even out of half of that being 135 million people.
Right? They get the 27.5 percent of the total tax.
The bottom 20 percent, which gets about 8.9 percent or whatever, is
22.4 million families. So one can just see, we can talk real numbers
here with real people about what is happening; but I have to say, the
number that got me, the number that absolute blew me away when we were
doing the markup on the estate tax and all of us, and including in the
Democratic substitute, were willing to raise those thresholds to $2
million or $4 million, somewhere around there, because just like we
find out these numbers we also know how many people would actually be
the beneficiaries of the estate tax, this blew me away.
Fully implemented, if we took the numbers today of how many people
would be included, now remember this was between $500 billion to $700
billion, not million but billion, almost the surplus numbers, ready,
and the gentleman from North Dakota (Mr. Pomeroy) may have a city in
his State that is only this big, 43,000 people, and that is it, get to
share $500 billion; 43,000.
If we do not have that money when the time rolls around, talk about
that credit card, who do they think they are

[[Page H6445]]

going to get to make up that money? Do they think they will go back to
those 43,000 people to make up that $500 billion to $700 billion? I do
not think so, and that just puts more burden on us.
Is not that an outrageous number? I mean, I do not know, but if the
gentleman from North Dakota (Mr. Pomeroy) would help me here, how many
of those people are even in the State of North Dakota?
Mr. POMEROY. Let us talk about the estate tax provision because I do
think it is one where clearly the multi-multimillionaires are the
largest beneficiaries.
I noted with interest the debate. I represent a farmer's State. I
arguably represent more production acres than any other Member of the
House of Representatives, and when they are talking about the farmer's
need for this estate tax relief and the small business owner's need for
this estate tax relief, I paid close attention because those are the
folks I speak for. Well, we came up with a proposal that would have
allowed $4 million on a unified credit in estate tax relief, and I was
wondering, is this sufficient?
I got a USDA figure. Ninety-nine percent of the farms in this country
have a net worth of $3 million and below. We took it up to $4 million.
So this business about this being a farmer-driven issue, this being a
small business driven issue, that is fiction, that is bait and switch.
They will hold out the farmer, they will hold out the small business
owner. Believe me, repeal of the estate tax is not about them at all.
It is about the wealthiest few in this country, and if we direct our
tax relief there, look, if we had unlimited resources, I would say
fine, fine; but if we give it there, then we darn sure make sure that
middle income families do not get the relief that they need.
The people at the very top earning levels of our country do not have
the month-to-month pinch in their cash flow that creates nearly the
compelling need for the tax cuts that our working families as they
struggle to pay for their college tuition for their children, as they
struggle to get access to health care, as they struggle to put some
money aside for retirement. Those are real needs for real Americans,
and if we give it to the wealthiest few we do not have it for them.
Mr. EDWARDS. In fact, as I look at the Republican-passed estate tax,
and I supported the Democratic alternative that was much more fiscally
responsible and helped most farmers, ranchers and small businesses, but
I look at the Republican estate tax plan, it is essentially this, that
the majority party in this House is saying we can afford to spend $500
billion over the next 10 years.

Guess what? Ninety-eight out of every 100 Americans will not get one
dime of that. So, Mr. Speaker, what I would say to the American people
is that next time they go into a room of 100 people, think about the
estate tax. Look around them. Five hundred billion dollars is going to
be spent throughout the country, but of the 100 people in that room
only 2 will get a single dime out of that.
The single mother working hard trying to, as a waitress, find a way
to pay for child care and put her children through school, the $30,000
a year working family, the average working family in America that goes
to work and works hard, sometimes two parents trying to save money for
their children's education and a little bit for their retirement and
pay their utility bills, they do not get a dime out of the estate tax;
but the richest 329 families in America will get over a billion dollars
a year in tax benefits out of this.
So it is just amazing to me, at a time when this House has not found
a way to get all of our Army soldiers off of food stamps, we can all of
a sudden say but, however, we cannot afford to get our Army soldiers
off of food stamps but we can pass a $500 billion tax cut over a 10-
year period where over 100 percent of the benefits go to 2 percent of
the wealthiest families.
I am not here to attack wealthy families. I respect and admire them.
I am not here to raise their taxes. In fact, they had their taxes cut
significantly just a few years ago when we reduced the capital gains
tax. In fact, the reality is that some of the wealthiest families in
America pay less on their income than the poor average working family.
The waitress that works 30, 40, 50 hours a week, the two-income family
that makes $40,000, $50,000 a year, they pay more income tax because
their tax rates are in the 30 percent range. The billionaire who makes
most of his or her money off of capital gains on stock investments are
paying 18 percent. So the wealthiest have already gotten a tax cut, and
that was passed for reasons to encourage investment in this country.
Now we are adding on top of that; one hundred percent of the benefit
going to 2 percent of Americans.
Again, I would remind the American people that means 98 out of every
next 100 people we see will not get one dime, but I can say what those
working families will get. They will get an extra $11.5 billion
interest payment on the national debt because of that tax break for
Bill Gates and Ted Turner and the richest families in America. They
will get $11.5 billion increase in interest payments that they will
have to help contribute and pay for, their children and grandchildren
will have to pay for. So the working folks not only do not get a dime
of the estate tax as proposed by the Republicans, they are actually
having to pay for it. That is simply unfair, and that is what this part
of our debate is about, are the Republican tax proposals fair?

{time} 1930

Mrs. THURMAN. Mr. Speaker, I actually was at a function on Friday
night for the Key Training Center, which is for children with mental
retardation, and I have to tell my colleagues something. I went to a
friend of mine who I know is a Republican and is an accountant. I said
to him, and I will not mention his name, but I said, tell me what you
think about this. I mean I wanted to make sure that I had a clear
understanding, because I do have farmers, as the gentleman from North
Dakota does, and the gentleman from Texas (Mr. Edwards); although I do
not believe that the gentleman from Texas (Mr. Green) has farmers in
his district, and he said, Karen, I do estate planning. He said, they
know how to make sure that they are not paying this money. They know
how to make sure that that is going to be passed on.
Yes, there are a few out there; I think the farmers and the small
businesses that we have talked about that have some assets that are
based on land and some equipment and some things that are not
necessarily done through a paper shuffle, they have some issues, which
is why the democratic substitute looked at it and we said, we need to
take care of this. Or, in fact, why we raised it and voted for less
than 3 years ago in 1997. I mean we raised the estate tax, we did that
too, and it was signed by the President in a bipartisan way.
So I think that when I talked to this guy and he said, Karen, I think
you are right on this. Actually, Karen, I know you are right on this.
Because we all need to have that gratification, knowing that we are
doing the right thing and we go to the professionals out there, we talk
to the people in our district. We find out those people that deal on
these issues, and they are coming back saying exactly the same thing,
that some of these numbers and some of this conversation that we have
had with other folks is, in fact, true, that this is not necessary at
this time; that there are bigger issues that this country faces than to
just give a few people in this country that are already able to send
their kids to college, that are already able to buy a home, that are
already able to put money aside for their pensions, that already have
advantages that many of the other folks do not have. We are talking
about people that are making anywhere between $50,000 to $60,000, and
they are not getting but maybe, at best, $19 to $185 out of a tax bill.
Mr. EDWARDS. Mr. Speaker, reclaiming my time, I would say to working
businesses, small businesses and farmers and ranchers, if your
business, your ranch, your farm are worth $4 million or less, the
democratic estate bill will actually help you more quickly than the
Republican bill.
Mr. POMEROY. Mr. Speaker, if the gentleman will yield, that is a very
important point. We got help for them next year up to $4 million. We
took the lead just 3 years ago, as was mentioned by the gentlewoman
from Florida (Mrs. Thurman), to move it up to $2.6 million

[[Page H6446]]

on a unified credit. We now propose taking it to $4 million, and next
year a lot more relief than we see under the majority bill.
Mr. Speaker, we see the majority bill really is not about helping
farmers or small businesses. It is geared to the wealthiest families in
this country, and that is why the long, slow phase-in so that they can
get the super-rich involved in the package.
Mr. EDWARDS. Mr. Speaker, as I yield to the gentleman from Texas (Mr.
Green), I would just summarize my comments on this fairness question in
this way: I think Democrats feel that we do not have to give Bill Gates
and Ted Turner and Steve Forbes a massive multi-billion dollar tax cut
to protect the family farmer in Lomita, Texas or Gatesville, Texas or
the small businessperson in Texas.
Mr. Speaker, I would like to yield to my colleague from Houston (Mr.
Green), who is a key member of the Committee on Commerce.
Mr. GREEN of Texas. Mr. Speaker, first I would like to thank the
gentleman for organizing this Special Order tonight on the issues of
the tax cuts. I just came in to talk about the fairness and what we are
not funding, because I think that is important. But my colleagues in
North Dakota and Florida and the two of us from Texas, we recognize
what is important, that we are considering a budget and a marriage tax
penalty and an estate tax proposal that only benefits the wealthiest of
Americans and does nothing to help the working folks in my district. I
have to admit, we do not have any farmers in urban Houston, but we do
grow our backyard gardens, we have tomato plants and peppers, but with
this heat, they are all dead now.
But I think the graph and the distribution that our colleague from
North Dakota has, and I have the smaller version of it, shows almost 60
percent of the marriage tax penalty benefits and the estate tax will go
to those percentage of 130,000 or more, the top 5 percent of the income
brackets. That is what that shows. I think it is frustrating.
We want the opportunity to show the American people that we can work
together on a bipartisan basis and agree on a tax resolution and a
budget that is fair.
The gentleman mentioned the democratic alternative on the estate tax.
Mr. Speaker, $2 million per person in Texas, $4 million because it is a
community property State, although I know it affects every other State
now, is not that huge tax cut for the wealthy, it will benefit the
small business people, a machine shop owner in Houston who may be on a
third generation who has built up his machine shop to where it may be
substantially beneficial, or the rancher or farmer in west Texas or
North Dakota, $2 million is a lot of money individually. We wish we
could get to that point.
My concern about the Republican plan, and the gentleman has mentioned
it, if we do this, we will see higher interest rates and force huge
deficits, go back to those deficits, and we will see these tax
increases in the future on our children and our grandchildren.
So before we hastily rush into these bills, we need to make sure that
we realize that there are certain programs that we have to do and talk
about what we may not be funding. But all of us are for tax cuts,
Democrats and Republicans, who just need to be reasonable. I think the
difference, though, is that we are concerned about making sure we have
money to pay the service personnel, the defense of our country, to save
Social Security, modernize Medicare, pay down our national debt, as the
gentleman mentioned, how important that is for our own tax rates, for
people who are going out and buying cars or mortgaging a house, or even
that small businessperson going out on the market and saying hey, I
need an inventory loan.
By paying down the national debt, we are lowering our taxes.
Educating our children, making sure that businessperson has qualified
employees that will come in. Educating our children is not free. It is
expensive, it costs local and State dollars, but it also requires
Federal resources to help so we can bridge that gap on what local and
State resources cannot do.
So I have met lots of my constituents over the last few months, and
the number one concern I think is insolvency of Social Security and a
prescription drug benefit for our seniors. We need to make sure that we
balance that. We can have reasonable tax cuts and yet still make sure
that we support those programs, the defense of our country, Medicare
prescriptions, and Medicare itself, and the education of our children,
that will not be a balanced budget-buster, like what we will see if all
of these are passed, and thank goodness the President will veto them.
Mr. Speaker, I cannot help but mention one project, because my
colleague from Waco knows the Port of Houston project. We have critical
projects all over the country. With the gentleman's help, we have been
able to make sure the Port of Houston project is on line to be
completed in the time frame. That is not free, but it will pay down the
line, it will pay in customs duties, it will pay in local taxes that we
will ultimately pay back. There are times we are going to have to say
no, we cannot do these infrastructure projects that will ultimately pay
more than if we give these huge tax cuts now.
So I want to thank the gentleman for his effort on the Port of
Houston project and also thank him for tonight, in making sure that we
have the opportunity to give our side of it and say, we are for tax
cuts, we are for reasonable ones that also take care of Medicare,
Social Security, infrastructure and education for our children, and
paying down the national debt.
Mr. EDWARDS. Mr. Speaker, reclaiming my time, I want to thank the
gentleman for his comments. He summarized some very key points.
For our debate tonight, I think the first question we wanted to raise
was, are these, in effect, trillion dollar proposed tax cuts fiscally
responsible? The answer is no. The second question is, are they fair to
average working families? The facts are they clearly are not. The third
point I think perhaps we could get into and mix with the debate of the
fairness of the tax cuts is, if we were to have this $500 billion, or
even the proposed $1 trillion in tax dollars to spend over the next 10
years, should they all go to these particular tax cuts or should they
perhaps be balanced between tax cuts, paying down the debt and
supporting some other major national priorities?
I think we ought to continue this discussion with about 12 minutes
that we have left in this hour of debate on the crucial issue of how
are we going to reflect our values as a Congress in the way we spend
the projected surplus. I would like to get into the issue of not only
the fairness of the tax cuts, continue that debate, but also talk about
how perhaps this massive size of tax cuts, bigger in sum total than
last year's proposed cuts projected by the American people, how do
these proposed tax cuts cut out other high national priorities? Unless,
of course, you are part of the free lunch bunch, in which case you can
cut taxes, have massive increases in defense spending, adequately fund
domestic needs and pay down the national debt. But I hope we grew
beyond that free lunch bunch mentality that got us into a massive
national debt position in the 1980s.
I yield to my to the gentleman from North Dakota (Mr. Pomeroy).
Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding. What
can we not do? What priorities have been crowded out if we pass the
revenue plans secured to the wealthiest in this country of the
majority?
Well, let us start with one that was considered last week in the
Committee on Ways and Means and was deemed to be too expensive by the
chairman of the committee, the very chairman that has supported
virtually every one of these tax cuts, including the unlimited estate
tax relief that we have been talking about.
The proposal that he believes we cannot afford is one that would help
middle income families save for retirement.
Mr. Speaker, we have one-third of the people in this country with no
retirement savings whatsoever. And of the IRA-eligible, where the
$50,000 and below household can contribute to that and deduct that
contribution, only 4 percent of all eligible households are using that
IRA. We need to go back to the drawing board and recognize that we have
to have a more meaningful tax incentive to help people with their
savings challenge.
There is no better savings incentive than a match on a contribution.
As

[[Page H6447]]

Federal employees, one puts money in the Thrift Savings Plan, and then
the employer, the Federal Government matches that contribution. We
could pass a tax cut that matched by a tax credit to the tune of 50
percent that contribution to savings. That proposal was considered. It
was voted down, virtually on party lines. It will be considered on the
floor of the House this week.
Mr. EDWARDS. Mr. Speaker, reclaiming my time, I want to be sure I am
clear. The same House leadership that said we could afford to give Bill
Gates a massive tax cut this year, said that we cannot afford to
provide tax incentives for middle and lower income working families to
save for their retirement; is that correct?
Mr. POMEROY. Mr. Speaker, that is precisely the sorry circumstance
that this issue presents. They said we could not afford it. We could
not afford to take a family making $30,000 trying to save for
retirement, we could not give them a tax cut. So that if they get
$2,000 into an IRA, we give them a tax credit of $1,000, representing
essentially a 50 percent match on their contribution. There is no
better savings incentive than an employer match through this tax cut to
middle income families. We could essentially give them an Uncle Sam
match, helping them save for retirement. They said we could not afford
it.
I cannot think of anything more important than helping middle income
families save for retirement. That is what ought to be the priority. We
need to help people save for their later years before we get around to
aiding Bill Gates with his estate dilemma.
Mr. EDWARDS. Mr. Speaker, I appreciate the gentleman's comment. The
question is, if we have a certain amount of tax cuts to provide, who
are we going to give them to? I think the American people ought to ask,
whose side is Congress on? Are we going to be on the side of the
working folks that are struggling or the wealthiest one-tenth of 1
percent of Americans who have already gotten a substantial tax cut over
the last several years?
I again yield to the gentlewoman from Florida (Mrs. Thurman).

{time} 1945

Mrs. THURMAN. In my former life I was a math teacher, so we could
play a little game here, if Members would like to. I think it would be
very advantageous, because I think it can show really significantly
that we are not against tax cuts, and that we have offered to the other
side to negotiate and participate in these issues, but the question is
as to how it is going to happen.
Let me say to the gentleman from North Dakota (Mr. Pomeroy), we had
the marriage tax penalty on the floor here today, $182 billion, the
alternative is $90 billion, somewhere around there, that would have
really taken away the tax penalty for marriage, okay?
If my numbers are right and we did this tax credit that the gentleman
is talking about for folks, $30,000, $40,000.
Mr. POMEROY. All the way up to $80,000 on the Committee on Ways and
Means bill.
Mrs. THURMAN. If I remember correctly, the number that was given as
kind of the estimate without being scored was about $50 billion. So if
I take 50 from 184 that leaves me 134, so I still now have $44 billion.
I could pay for this pension part, and I still have $44 billion to kind
of work with here. Because if I really just want to take care of the
marriage tax penalty, I only really need $90 billion.
So what is the next issue? Well, we could only squeeze out of this
surplus $50 billion, or I am sorry, $40 billion for prescription drugs.
Right? That is it. We are going to send it to those HMOs that are
pulling out of all of our districts. We are going to give subsidies to
insurance companies who do not even want to give a drug bill. Correct?
So if we took that $44 billion and transferred it over to the $40
billion that we already have, we could potentially get to a
negotiation. That is just the marriage tax. That is compromise. That is
looking at numbers. That is understanding that we can do both. We do
not have to just do one.
All we have said to them, and have reached over there and said is,
give us a chance to talk about this. But no, we come to this floor just
before convention time, just before everybody wants to go home and talk
about these tax cuts. The fact of the matter is, we could do it for a
lot of people.
So I now have $90 billion in marriage tax, I now have $88 billion for
the prescription drug, and we have another $50 billion to help people
have security in their paychecks when they retire, and we have not even
talked about the estate tax. But there is a compromise.
Mr. EDWARDS. Mr. Speaker, I want to thank the gentlewoman for making
the point, which is our third question tonight. That is, does the
Republican proposal for tax cuts this year, does that actually crowd
out other major national priorities?
I think the answer to that question is yes, just as the answer to our
other question, are their proposed tax cuts irresponsible fiscally and
are they unfair to average working families, is yes.
Let me talk as a member of the Committee on Appropriations about the
values reflected by the choices made in this House, because it is not a
free lunch. As they have proposed their massive tax cuts, they have
proposed to tighten the belts of a few folks as we try to enhance Bill
Gates' and Ted Turner's and Steve Forbes' substantial wealth.
Let us look at who has been asked to tighten their belts.
First, Republicans on my Committee on Appropriations suggest a 60
percent cut in the Legal Services Corporation. So while we come to this
House floor and put our hands over our hearts and say pledge of
allegiance to the flag every day when we are in session, and finish
with ``liberty and justice for all,'' we are giving some liberty
enhancing the wealth of Bill Gates, but we are denying justice for the
lower-income woman who has been the victim of abuse by her husband, who
walked out and left her trying to support her children. They wanted to
cut the Legal Services Corporation.
In the Subcommittee on Energy and Water Development in the Committee
on Appropriations on which I serve, we had to make an arbitrary
decision of no new flood construction projects anywhere in the country.
If one's community is at risk for massive flooding, because of these
massive proposed tax cuts, we cannot offer that community a national
responsibility, and that is to prevent flood damage and perhaps even
injury and death in the community.
They proposed that we kill the President's program to bring in
100,000 new teachers, so we can have qualified teachers and smaller
classrooms throughout America. That went out the window because of the
cost of these massive tax cuts.
For example, the estate tax, 100 percent of the benefits go to only 2
percent of American families.
We have had to cut back on the President's proposal for school
modernization, to bring our public elementary schools up to safe
standards that local communities would require for safety for people of
any age, much less children. We have reduced funding for basic science
research.
As someone who cares deeply, along with Members of the Republican and
Democratic Caucus in this House, cares deeply about our national
defense and our men and women serving in uniform, this House, which
originates or has the responsibility for originating spending bills,
could not find the money to get soldiers and airmen and Marines off of
food stamps, but we could give Bill Gates a tax cut.
It goes on and on and on. One in 13 seniors throughout America,
including in my district, have to make a decision sometime during this
year whether to adequately purchase food or their prescription drugs
their doctors say they need for health. Yet the Republican leadership
says, no, we can afford these tax cuts for the wealthiest 2 percent of
families, but we cannot afford that expensive old Democratic
prescription Medicare drug program that is going to help seniors not
have to choose between eating properly or taking their medicine
properly.
So my point is that it is not a free lunch. These proposed tax cuts
not only are fiscally irresponsible, they are not only skewed to the
wealthiest Americans and not average working families, they end up
costing average working families. They are also crowding out our
opportunity with today's budget surplus, our opportunity to help folks
like senior citizens who need help with prescription drugs.

[[Page H6448]]

Their proposals crowd out our ability to protect the solvency of the
social security and Medicare trust fund.
So there is a tremendous cost for these proposals. I think when the
American people recognize the cost of these so-called free lunch tax
cuts for the wealthiest Americans, I think they are going to be
outraged by it.
Mr. POMEROY. If the gentleman will yield further, Mr. Speaker, for my
final participation tonight in the special order, and I still commend
the gentleman for hosting it, as we look at this in context we can only
conclude that the totality of what they are doing is not responsible,
does not pay down the debt as its first priority, and depends upon 10-
year projections. Who knows whether we are going to hit those
projections or not?
It is not fair and is hopelessly skewed to the wealthiest families,
leaving the rest getting pennies while the wealthiest few come out like
bandits under this proposal.
Finally, it crowds out doing what we ought to do for middle American
families.
Mr. EDWARDS. Mr. Speaker, I thank the gentleman from North Dakota
(Mr. Pomeroy) and the gentlewoman from Florida (Mrs. Thurman) for their
participation on this vital national issue.

____________________