[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.

                          ____________________