[Congressional Record Volume 146, Number 143 (Thursday, November 2, 2000)]
[House]
[Pages H11789-H11790]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     GOVERNOR GEORGE W. BUSH'S FALSE STATEMENTS ABOUT HIS TAX PLAN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, we should not pretend that we are working 
here toward a final solution. We all know we are coming back after the 
election. The people who know this best are the Republican Senate 
leadership. They have all gone home, so why are we pretending we are 
going to cut a deal without the Senate leadership?
  This country needs an election so that the people can tell us that we 
need more Federal investment in education, that we need a prescription 
drug benefit that is part of Medicare, and that we need an increase in 
the minimum wage.
  I trust next Tuesday that message will be heard here in Washington 
loud and clear.
  Mr. Speaker, one thing that could prevent us from hearing that 
message is a misconstruction of the Governor of Texas' tax plan, 
because there are two false statements that have been made by the 
Governor about his own plan. I trust that he has not made these 
statements deliberately, but simply because

[[Page H11790]]

he has not read and studied his own tax plan, and that these are 
innocent, though major, mistakes.
  The first is that the Governor of Texas tells us that under his plan, 
every American who pays taxes will get tax relief. He has said this 
over a dozen times, and it is false a dozen times. In fact, under his 
tax plan, 15 million American families who pay Federal taxes will get 
not one penny of tax relief.
  Of course, over $700 billion of tax relief over 10 years will go to 
the wealthiest 1 percent of Americans, but not one penny will go to 15 
million American families who work every day, who pay taxes to the 
Federal government in the form of FICA taxes taken from their wages, 
and who work at the lowest-paying jobs in our society.
  The second false statement made by the Governor in both the second 
and third debates was that his plan provided only $223 billion over 10 
years of tax relief to the wealthiest 1 percent of Americans. He was 
off. It is really closer to $700 billion of tax relief, because in 
stating the degree of tax relief that he provides to the wealthiest 1 
percent, he simply forgot that his plan involves the repeal of the 
estate tax, which will eventually cost this country $50 billion a year, 
or $500 billion over the 10 years that is our traditional measure of 
the effect of tax proposals.
  That is why it is true that the Governor's tax plan will provide more 
to the wealthiest 1 percent of Americans than he proposes to provide to 
strengthen our military, improve our education, improve Medicare, and 
provide for our health care system, or improve our health care system, 
combined.
  Mr. Speaker, I now want to address the need for school construction, 
which is also a tax issue, because the tradition in this country is 
that the Federal government provides help for those school districts 
that have old schools that have need for new schools because of growth, 
or that need schools with smaller classrooms to provide for smaller 
class sizes, and therefore need more classrooms.
  The tradition is that we do that through the Tax Code by allowing 
school districts to issue tax-exempt bonds. We on the Democratic side 
have urged that $25 billion of urgently-needed capital be provided to 
these school districts, not in the form of tax-exempt bonds but in the 
form of tax credit bonds, which will be even better for the school 
districts because they will not have to pay even reduced interest, they 
will pay no interest at all. The Federal Government will pick up the 
tab.
  In fact, though, the tax bill that left this House provided only half 
of the $25 billion of tax credit bonds that these school districts 
need. But that tax bill did address another problem. That problem 
appears to be that the subspecialist tax lawyers who specialize in tax-
exempt bonds feel their job is too boring. I could not agree with them 
more.
  I myself am a tax nerd of long standing, but even I, after many years 
of reading the tax regulations, had but one solace, and that is, at 
least my job was not as boring as those of my brethren who 
subspecialized in tax-exempt school bonds.
  Now these bond counsel want something exciting, and they have 
persuaded this House to supposedly help school districts by changing 
the arbitrage rules so that school districts will be encouraged not to 
use school bond money to build schools, but to delay that for up to 4 
years, and to take that money on an exciting trip to Wall Street. Mr. 
Speaker, school bonds should be used to build a school on Elm Street, 
not a skyscraper on Wall Street.
  But the main component of the tax bill that this House passed 
designed to help school districts is one that does not provide them 
with tax credits, does not cut their interest costs, does not provide 
capital to build schools, but instead, encourages those school 
districts to gamble with the school bond money.
  Mr. Speaker, that is how Orange County, California, went bankrupt. 
That is no help to school districts at all. We need to take back that 
bill and provide a full $25 billion of tax credit bonds so schools can 
be built around the country.

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