[Congressional Record Volume 147, Number 20 (Tuesday, February 13, 2001)]
[House]
[Pages H303-H309]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             NIGHTSIDE CHAT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Colorado (Mr. McInnis) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. McINNIS. Mr. Speaker, I thought I would spend a little time this 
evening in another nightside chat. There are three areas I would like 
to address my colleagues about.
  First of all, we have heard a lot of news in the last couple of weeks 
about the pardon that former President Clinton granted to an individual 
named Marc Rich, and I thought tonight I would take time to clarify 
that with my colleagues because it appears that this pardon will go 
down as the most egregious, most offending pardon in the history of 
this country. Never in our study of American history have we seen a 
pardon that so flagrantly violated the principles of our Constitution 
and against which the citizens of this country expected a President to 
follow before he issued a pardon.
  When I go through this, I think you will be appalled, be stunned by 
the amount of money that traded hands, by where that money went, for 
example to the Clinton library, about the coordination and the 
coincidence of that money going to the Clinton library and the money 
going to close Clinton friends, and all of a sudden what would be a 
usual pattern of oversight on a pardon by the Department of Justice and 
other agencies was avoided, and then one of the world's most sought-
after fugitives all of a sudden, after bilking the American taxpayers, 
after trading with the enemy during a war, and then bilking the 
American taxpayers of hundreds of million of dollars when you consider 
the penalties, now can walk free on American soil. He will have more 
freedom as a result of this pardon from Clinton, more freedom than one 
of our constituents who walks

[[Page H304]]

into a Wal-Mart and steals a 50-cent candy bar.
  As every day goes by, we find out that there is more and more 
underneath the surface of the Marc Rich pardon.
  The second thing that I think is important to discuss this evening is 
the energy crisis in California. The State of California is very 
important to the economy of this Nation, but the State of California is 
going to have to stand up on its own two feet to help itself when it 
comes to this energy crisis. California is going to have to abandon the 
long-adopted concept in California ``not in my backyard, let somebody 
else build it and let me have the benefits.''
  I think we will have an interesting discussion this evening about the 
energy crisis in the State of California.
  Finally, we will take a look at the economy. I had the opportunity 
and the privilege today to listen to the Secretary of the Treasury. 
Over on the Senate side, Alan Greenspan spoke. Look, we have a lot of 
concerns about our economy; and every citizen in this country, every 
constituent of ours needs to worry about the future of this economy. A 
very critical part of that economy is, number one, the Federal interest 
rate and how the Feds deal with it; number two, how the President deals 
with it; and number three, how the Congress deals with it.
  Alan Greenspan lowered the rate by 1 percent last month. The 
President has stepped forward and said here is a tax cut proposal, and 
this evening I want to go into some of the details about that tax cut 
proposal because I think that is one arm of our strategy to keep this 
economy from collapsing on us. It is not near collapse right now, but 
it is headed toward a significant slow down. We have to be able to 
throw some water on this small fire before it becomes a bonfire. If it 
is left without attention, I assure you that fire will only grow.
  I think that President Bush has extended a very well-thought-out plan 
that will work in a very efficient manner through the tax cut, which 
will first of all reduce the debt that this country has incurred over 
years and years of some, in great part, mismanagement, as my colleagues 
know.
  But first of all let us go to the pardon of Marc Rich. Let me quote 
from the ``Wall Street Journal.'' ``This story,'' speaking about Marc 
Rich, ``This story will go down as an extraordinary feat in the annals 
of Washington lobbying, illustrating in a dramatic fashion how money 
begets access, access begets influence, and influence begets results.''
  Marc Rich and his partner, Mr. Green, were fugitives from American 
justice. Marc Rich was, I think, the sixth most sought-after fugitive 
in the world. Marc Rich bilked the American taxpayer, when you consider 
the penalties and interest, of hundreds of millions of dollars. It was 
Marc Rich when our American citizens were being held hostage in Iran, 
when we were trying to put a blockade around the country of Iran, when 
we were trying to go right to the heart of the economy of Iran to force 
them to release our hostages, i.e. stop the sale of oil with Iran, Marc 
Rich was trading with the enemy. A U.S. citizen who subsequently 
renounced his U.S. citizenship, Marc Rich was trading with Iran while 
Iran was holding American hostages; and this is the man that Clinton 
has given a pardon to.
  We are going to track about how that occurred. I think of some merit, 
I would like to read an article called ``The Clinton Indulgences'' from 
today's ``Washington Post,'' Tuesday, February 13.
  ``The more that is learned about some of the pardons former President 
Clinton granted on his final day of office, particularly the pardon of 
financier Marc Rich, the more it appears that they constituted a major 
abuse of power. We learned, for example, that the Rich pardon, if not 
facilitated, at least preceded by gifts of nearly a half a million 
dollars from Mr. Rich's former wife to the Clinton Presidential 
Foundation and Library Fund. Ms. Rich was also a major campaign 
contributor, not just to the President but to the President's wife in 
her Senatorial campaign.

                              {time}  1930

  The Rich pardon has been thoroughly denounced by almost everyone, 
except of course the lawyers who were paid by Mr. Rich to lobby for it. 
Leaving the article for a minute, that would be Mr. Quinn. Right down 
here, Mr. Quinn. So let me go through this again.
  The Rich pardon has been thoroughly denounced by almost everyone 
except the lawyers who were paid by Mr. Rich to lobby for it and 
various others to whose organizations Mr. Rich made contributions over 
the years. The denunciation has been thoroughly bipartisan. Mr. 
Clinton's only public response has been to say that he spent a lot of 
time on that case, and he thinks there are very good reasons for it. 
Once the facts are out, the public will understand, he said.
  What are those facts, if not that money talked and that Mr. Clinton 
may have benefited? He would do well to find a way to say and to 
explain the other questionable pardons on his list. This a classic 
Clinton case. The facts suggest that he first abused then wrapped 
himself protectively in a Presidential prerogative.
  The public has a legitimate interest in determining the extent of the 
abuse. The question is how to conduct the necessary inquiry without, at 
the same time, weakening the prerogative if only by undercutting the 
public sense of its legitimacy. Mr. Clinton could solve the problem by 
being forthcoming, providing an explanation of the questionable pardon 
and a full list of contributors to his foundation; but he will not, or 
so far has not.
  The issue is whether the public trust was violated. Enough valid 
questions should have been raised about some of those pardons to 
warrant a full accounting. Mr. Clinton should volunteer it and not 
force the country to extract from him.
  So I ask my colleagues to follow with me a little this evening as we 
go through some of these points and they can make their own decision of 
how legitimate this looked; about what kind of prerogative was abused 
in the granting of the pardon for Marc Rich. And keep in mind, as I 
said earlier in my comments, that Marc Rich will walk a freer man in 
the United States than will one of our constituents who might steal a 
50 cent candy bar from Kmart or Wal-Mart.
  Let us take a look at the pardon. Denise Rich. Who is Denise Rich? 
Denise Rich is a very, very wealthy individual in this country. She 
also happens to be the ex-wife of Marc Rich and, apparently, is on 
very, very good terms with her ex-husband. In addition, Denise Rich has 
refused to testify in front of a congressional committee, invoking the 
fifth amendment against self-incrimination.
  Denise Rich has given over $1 million in donations to the Democratic 
National Committee. I thought she gave $190,000 to the Clintons in 
gifts; but every day that goes by, this figure becomes more and more 
inaccurate. We now know, for example, that to the Clinton library this 
amount of money: $450,000 was given to the Clinton library by Denise 
Rich. We also know that Denise Rich said other friends who were 
solicited say Clinton fund-raisers pressed Denise Rich for a much 
greater amount, as much as $25 million for the library fund.
  A source familiar said that it is at this point $450,000, although a 
lawyer, Carol Elder Bruce, told committee staffers that Rich had 
contributed ``enormous'' amounts of money to the Arkansas foundation 
seeking to raise some $200 million to build the Clinton Presidential 
library.
  In addition to that, of course, on the gift registry, before the 
President's wife became a Senator, there was $7,800 in furniture she 
bought for one of their homes, $7,000 for furniture for another home, 
and the public saxophone to the President.
  Now, this goes back to that Wall Street statement, and let me read 
the Wall Street article again about this influence and money. Let me 
read the quote again. The story will go down as an extraordinary feat 
in the annals of Washington lobbying illustrating in a dramatic fashion 
how money begets access, access begets influence, and influence begets 
results. That is exactly what happens.
  Do my colleagues think, as Bill Clinton now says when he made the 
statement, that politics did not play a part in this? Oh, yes; right. I 
am sure that that is a very solid statement, considering the fact that 
a request was made

[[Page H305]]

to Denise Rich to donate $25 million to the Clinton library; that in 
fact she gave $450,000; that in fact she wrote a personal letter to the 
President asking the President to pardon Mr. Rich; that in fact Mr. 
Rich is one of the most sought-after fugitives in the history of this 
country and, until recently, until he got the pardon, but prior to 
President Clinton's acting, he was one of the most sought-after 
fugitives in the world.
  How interesting that this is one of those pardons, one of those 
suspicious pardons that goes around. Supposedly it is supposed to go to 
the Justice Department, to the Securities Exchange, and to the 
other parties involved for an assessment of whether or not that pardon 
should be granted. For example, Milken. Milken, by the way, refused a 
request to make a donation to the Clinton Presidential library; and as 
a result, well we do not know as a result, but he refused to do that 
and the consequences may have been that he did not get a pardon.

  We know for some odd reason in the last few hours that this pardon 
for Marc Rich did not go through the customary channels; that it was 
handled in a highly unusual fashion. In fact, we have e-mails from one 
lawyer to another that says keep it secret; it would not be to our 
benefit to find out what we are asking from the President.
  We also know that the lawyer representing Marc Rich is a close friend 
and confidant of then-President Clinton. We also know that the attorney 
received hundreds of thousands of dollars, hundreds of thousands of 
dollars from Marc Rich to help Marc Rich get this pardon. We also know 
this attorney represented the President on other matters of the 
President.
  So let us start to put the combination together and see what we have. 
We have Denise Rich, who is lobbying very hard for the pardon for Marc 
Rich. She gives well over $1 million. We may find out more than that, 
much more than that, to the Democratic National Committee. She donates 
$450,000 that we know of so far, and we suspect there is a lot more. 
She was asked for $25 million. She helps furnish two Clinton homes, and 
she provides other gifts for the Clintons.
  Then we combine that with one of the Clintons' close confidants, who 
previously represented Bill Clinton, who has been paid hundreds and 
hundreds of thousands of dollars to represent Marc Rich. On top of 
that, we combine some of the organizations overseas that Marc Rich 
contributed to, charities and so on, who then sent letters, lobbying 
letters, to the President to grant this pardon for this fugitive, who 
as I have reminded my colleagues of before and I remind them again 
because it really leaves a bitter taste on my tongue, traded with the 
enemy.
  What does that all spell? Well, that all goes over to the Clintons. 
And look what happens. Here they go. In 65 counts they granted a 
pardon. Where is the fairness?
  It was interesting to hear the Democrats talk about this pardon. 
Every Democrat in these House Chambers that I have heard speak about 
it, every Democrat I have heard on national talk shows speak about it 
deplores what has occurred here. I am not saying every Democrat does, 
because I have not heard from all of my Democrat colleagues; but the 
ones I have heard from and the talk shows I have seen, they all deplore 
this. There is no way that this can be justified.
  What kind of message does this send out there; what kind of 
reputation? Why would the President do this and leave with this kind of 
reputation? I can tell my colleagues this, and I speak from the 
earnestness of my heart, the granting of this pardon, in my opinion, 
was a disgrace. There is no pardon like it to the best of our knowledge 
in the study of American history. We cannot find another pardon like 
this, that so clearly shows connections of money, monetary 
contributions being made to a Presidential library; the connections 
with close confidants of the President; that the pardon request 
bypasses the normal channels for reviews.
  And by the way, some of the best testimony I have heard on this came 
on this case from the former prosecutors, the U.S. attorneys who spoke 
the other day in front of the committee. One of the prosecuting 
attorneys, former U.S. Attorney, stated clearly that he voted twice for 
Bill Clinton as President. I wish my colleagues had heard that 
testimony. I felt that testimony was extraordinary. It was right on 
point.
  He broke down in significant detail, detail that is far and above any 
kind of explanation I could give this evening from the House floor. He 
broke down in significant detail and rebutted every possible point made 
by this attorney, Mr. Quinn, who was paid hundreds of thousands of 
dollars.
  This thing stinks. Now, that sounds like a strong word to use on the 
floor of the House of Representatives, but somebody needs to stand up 
on this floor, as I am doing right now and many of my colleagues have 
done in their own followings, and talk about just how wrong that is. 
This pardon should not have been granted.
  Let us move on to the next issue. There are two other issues I want 
to address this evening. One of them, of course, is the energy crisis 
that we have in the State of California.
  Now, a lot of us would like to say, California, if anybody had it 
coming, you had it coming. This is a State that has not allowed a power 
plant to be built in its State in the last 10 years. This is a State 
that today has 2 percent less capacity to produce power than they did 
11 years ago. In other words, in 1990 they had 2 percent more 
capability to produce power than they do today in 2001. They had more 
capability to produce power in 1990 than they did in 2001. But what 
happened to the demand in power during that 10-year period of time? 
What happened with demand? Demand went up 11 percent. So demand goes up 
and capability to provide it goes down.

  We need to talk a little about that. Clearly, California provides to 
the United States about one-sixth of our economy. It is huge. I need to 
correct that statement. California, if it were a country, would be the 
sixth most powerful country in the world from an economic point of 
view. We cannot allow California to just go down the drain. We cannot 
ignore our neighbor to the west and just say that their problem ought 
to just be their problem and we are going to walk away from it.
  Unfortunately, the political leaders of the State of California have 
pulled every State in the Union into this mess. Unfortunately, many of 
our constituents out there, whether they live in the State of Colorado, 
New Mexico or wherever, they are going to get pulled into this as a 
ratepayer. In the State of Colorado, for example, Excel Energy, what 
used to be our public service company, has sold energy to the State of 
California, some of it under what I consider an illegitimate order by 
the previous administration forcing it to sell power to a customer, 
number one, under a Wartime Powers Act, which we are not engaged in 
that type of threat right now; but they were concerned, so they used 
the excuse that it may affect the bases in California. So they ordered 
our utility in Colorado, for example, to sell energy to the State of 
California with no assurance that the State of California could pay for 
that.
  This means that prices will go up for the ratepayers in Colorado to 
cover this loss to the State of California, while the ratepayers in the 
State of California enjoy a freeze on their rates put in by their 
political leaders. And that is not all. Take a look at some of the 
other things. The city of Denver. Now, I just have to say that part of 
this is gross negligence on behalf of the city of Denver. They invested 
$32 million, and the citizens of the city of Denver ought to be aware 
of this. The city management team invested $32 million after, not 
before, after they had received warning that these power companies in 
California may not be able to pay and in fact in all probability could 
not pay them back.

                              {time}  1945

  So part of that is gross negligence on the part of the city of 
Denver. But this is to point out that this is not isolated to the 
ratepayers and the taxpayers in the State of California, this spreads 
across the Nation.
  How do we get there? How did California get there? Well, it is 
Economics 101. We have in our system of economics a capitalist type of 
system. We have what we call the private marketplace. And it is really 
fairly simple. We have the private marketplace.
  Now, on the private marketplace, we have a seller and a buyer. Now, I 
know that this sounds kind of fundamental.

[[Page H306]]

 But as my colleagues walk through this with me, they will understand 
where I am going with this.
  Now, the buyer over here knows exactly what they are looking for. The 
seller is trying to meet this demand. The seller wants to sell to the 
buyer at a mutually-agreed price. That price is negotiated. Every one 
of us goes through those transactions. We started out selling a piece 
of bubble gum when we were young. That is what we call a bargain, an 
agreement, a consent, an acceptance.
  So we have got the seller and the buyer. Now, the seller tries to 
determine what it is he or she can provide to the buyer and at what 
cost. The buyer, of course, knows what they want.
  Well, then we have the next transaction, which is the closure of the 
agreement. Let us call it consumption. On the consumption part of it, 
the money that comes from the consumption, the buyer gets the service 
of the product and the seller gets some type of compensation, generally 
cash.
  Now, what does the seller do with the cash? This is very important. 
One, what the seller has to do with the cash is it has to make a 
profit. If the seller cannot make a profit, the seller will not be in 
business and the buyer will not get what they need. It is to the 
buyer's interest to have the seller in business as much as it is to the 
seller's interest to have the buyer in business or in the marketplace.
  So what happens is the seller has to have a profit. Now, what happens 
with the profit in the system balances out. The seller has a cost to 
the product. So they have got the product, in this case, electricity. 
They have got the cost. The seller did not get the product, the 
electricity, free of charge. The seller had to either buy the power or 
generate the power. So it has a cost involved.
  So, in order to pay for the power, the seller has to recover from the 
buyer at least that amount of money to cover cost. That is called 
``break even.'' But if the seller wants to be able to continue to sell 
this power in the future, especially if the buyer demands more and more 
from the seller, then the seller has got to reinvest in its ability to 
produce what the buyer desires. And that is one of the important 
aspects of profit.
  The seller also has to have willing investors in the seller, which 
means that there has to be some type of enticement to bring people in 
the marketplace to invest in the capital structure of the seller.
  Well, this all begins to work well. And, by the way, and I heard this 
in California, nobody deserves to make a profit on selling basic power 
to the American people, that there should not be a product out there 
where there are excess profits being made.
  Well, what happens when excess profit comes into the marketplace? Do 
the bright political leaders have to go in and take over the 
marketplace? No. The marketplace self-corrects.
  Let us look at an example. Let us say we have a hamburger stand in 
our community and that hamburger stand sells a hamburger for 50 cents 
and the cost of the product is 5 cents. So the hamburger stand makes 45 
cents. And then pretty soon the hamburger stand finds out there are a 
lot more customers that want those hamburgers, so they raise the price 
to a dollar, then pretty soon they raise the price to $2. Then pretty 
soon they cannot buy a hamburger except at this place for $5 and the 
cost for making a hamburger, everybody knows, is five cents.
  What is going to happen in the private marketplace? They are going to 
have competition. Somebody else is going to come in and say, wait a 
minute, Joe over there is selling his hamburgers for $5 apiece. He is 
taking advantage of the public. His profits are excessive. I can go in 
and sell a hamburger for $2 apiece and I still make a handsome product. 
I make enough money to reinvest into the capital that I have to make 
that hamburger, so I am going to go into competition. I am going to go 
into competition with Joe and I am going to force him to lower the 
price from $5 to $2; and if he does not, I am going to force him out of 
business. That is the private marketplace working. That is not what 
happened in California.
  What has happened in California, in my opinion, is their State-
elected leaders, including State legislators and including the Governor 
of California, do not have enough gumption to stand up to the consumers 
in California and say a couple of things.

  Number one, look, we cannot have it both ways. We cannot say anymore 
``not in my backyard,'' but I want power to my house when I want 
electricity.
  It was interesting, I read a Wall Street Journal article the other 
day that talked about Cisco Systems, Cisco Corporation. Many of my 
colleagues are investors or have constituents who own shares of stock 
and know about how Cisco did not want to power a plant. Even though 
they are a large consumer of power, they did not want to power a plant 
and they objected to a power plant being built near their facility 
because it partially obstructed their view of the ocean.
  Do they know what? Face reality. We need power and all of us take 
advantage of power. Tonight, here in Washington, D.C., the outside 
temperature is probably in the low 40s, maybe under 40 degrees. But the 
temperature in these Chambers is probably 70 degrees. We have plenty of 
lights. We all know that. We need our power.
  But the citizens of California need to understand that the other 
States of this Union, while we are colleagues, we are neighbors, we are 
fellow States, we cannot carry their weight for them. They need to 
agree to build some power plants out there. They need to agree to some 
reasonable access for grids to transfer that power from place to place.
  They need to agree that, in order to build power plants, they 
themselves, the ratepayers out there, are going to have to invest.
  Years ago somebody should have had enough guts to stand up to the 
political establishment in California and say to them, look, you cannot 
go into a so-called deregulation, in other words, enter the private 
marketplace, but go out to the consumer, the buyer, and go out to that 
buyer and say, no matter what the cost to the seller, no matter what it 
costs the seller, they are always going to get the same price. Here is 
the price cap, $55 dollars per megawatt hour.
  That is exactly what happened. California several years ago decided 
to ``deregulate'' their power production. And in order to deregulate, 
they decided to enter into the free marketplace; and in entering the 
free marketplace, they only made one mistake, and that mistake was they 
only partially entered the free marketplace. They did not want to upset 
their voters in the State of California. They did not want to be frank 
with their constituents and say, look, we are either in or out. If they 
are going to get into the marketplace, they have got to be willing to 
pay the marketplace so that the seller can reinvest to continue to 
generate, in this case, electricity.
  No, California did not do that. California went to the citizens of 
California and said, hey, we have got something that defies the private 
marketplace. We have got something that never in the history of 
capitalism, never in the history of a free economy has it worked. But 
we in California have figured it out. We do not have to build any more 
power plants in our State, or we can make it so tough or miserable on 
them that nobody will want to build a power plant in California. We 
will go ahead and let the sellers in some of these power companies in 
California walk away or have some time to make a profit, we will let 
them sell the power producers, the generation facilities to out-of-
state providers, and to the buyer we are going to give the sweetest 
deal of all. To our consumers of electricity in California, we are 
going to freeze the price. In fact, not only are we going to freeze the 
price just as an act of goodwill, we are going to reduce the price 10 
percent.
  That is exactly what the elected officials in California did. We will 
reduce the price 10 percent, buyer; and, guess what, use all of the 
power you want because in the future, the price that you are going to 
have to pay is frozen.
  Well, what happened to it? Well, it led to a shipwreck. I will tell 
my colleagues what happened. The seller agreed, those power companies 
in California agreed because they made a lot of money on this 
transaction. The buyer agreed because it was a sweet deal. The 
consumers in California were persuaded by the politicians that, in 
effect, at some point they were going to get something for nothing, 
that they

[[Page H307]]

could use all the power they wanted, they could waste power regardless 
of what they did, power would always be sold with a cap on it, they 
could not raise the power.
  Then they made a mistake. They brought in a third party, power 
generation. They sold the generation facility to out-of-state producers 
and they expected these power generators to always come back to the 
State of California and say, California, because you are such a nice 
pal, we are going to go ahead and sell you electricity for just a 
little tiny bit more than what it cost us to produce it, not for what 
the marketplace would bring us, but for a little over what it could 
cost us to produce it.

  Well, they did not want to play that game, these power generators. 
They were in the marketplace. In other words, what will the market 
bear? They charged what the market would bear.
  California, in the meantime, goes on this binge of not allowing power 
plants in its State. I would love to have the opportunity to debate the 
Governor of the State of California. Mr. Governor, I plead upon you to 
stand up to the ratepayers in the State of California and say, look, we 
got a problem here. We have got to bring more power plants on-line. And 
I think, by the way, the Governor is edging that way. But more 
important than that, you have got to be frank with your ratepayers. You 
have got to be straightforward and say to them, look, if we are going 
to have investment, we have got to have profit.
  Now, I think instead what the answer of many elected officials in the 
State of California is going to be, let the Government take over. Let 
us let the Government be the power supplier in California. Let us let 
the Government run this operation.
  Take a look. Without exception, take a look at any point in history. 
What happens when we allow the Government to enter into the private 
marketplace and run business? Government cannot do it. Look at what we 
do with the Federal Government, my colleagues. Take a look at how 
efficiently the Social Security system is run. Take a look at how 
efficiently Medicare is run. I mean, we have huge inefficiencies.
  Why? Why are the inefficiencies higher at the Government level than 
they are in the private marketplace? Because the Government does not 
have competition. In the private marketplace, efficiencies come as a 
result of the market because they have got competition.
  Remember the hamburger guy I was talking about? That guy or gal 
decided to come in and he or she cannot sell those hamburgers for $5 
for very long because they have got competition that will come in and 
sell it for $2.
  I say to some of my colleagues from California, do not let your 
constituents buy off on the proposition that they are going to be able 
to get power at a capped price. Do not let them buy off on the 
proposition that they are not going to have to pay for an increase.
  Let me talk about what I think is the solution for the State of 
California and a big part of it. Number one, in California and across 
this country, we have got to conserve. And conservation really is 
pretty easy.
  My wife and I, for example, in our home in Colorado, we live high in 
the Rocky Mountains, in our home, except for the area that we are 
working in, the area we are working in we leave at 70 or 72 degrees. 
The rest of the house is at 55 degrees.
  In California, they have got to begin to conserve. They cannot 
conserve when they cap the price that the user is going to pay.
  Let me give my colleagues an example. Colleagues, if any one of you 
ever rented a place from a landlord and the landlord agreed to pay all 
of the utilities, and by the way, that does not happen very often 
except for the Government, what incentive would you have to shut off 
the air conditioning during the summer or reduce the heat during the 
winter if the landlord paid the bill regardless of the usage you had on 
the air-conditioning or the heat? There is no incentive to conserve.
  California has got to take this price cap off.

                              {time}  2000

  California has got to say to the electrical users in its own State, 
and I know politically it is not popular to do, but it is going to take 
some courage and some guts to stand up to the consumers in California. 
And frankly I think a lot of consumers will agree with this, Look, we 
have got to put a price. The more you use or if you are going to waste 
it, there is going to be a price to pay. We cannot cap it at $55, 
especially when the marketplace out there is selling it at $1,000, and 
that is what happened at points during this energy crisis.
  So conservation is issue number one. All of us can conserve energy. I 
feel an obligation to conserve it in Colorado. And for gosh sakes in 
California you need to be led by your State political leaders to 
conserve.
  The second thing that you have got to do in California is you have 
got to build production facilities. You have to provide for generation. 
The days of looking to your neighbors to the east and saying, well, put 
the power plants in Oregon or put the hydropower plants over in Arizona 
or let Colorado put the power generation plants in their State. We do 
not want power generation plants because it has an impact on the 
environment.
  It does have an impact on the environment. You have got to balance 
that out. Having lights in here this evening, having 70 degrees on the 
House floor, it has an impact on the environment. We are using energy 
to provide this. But, California, you are going to have to carry a fair 
share of that. Or if you want to depend on out-of-State suppliers, then 
you are going to be subject to the price variations of the market. And 
if the market knows that you do not have the capability to provide your 
own power, the market will be very punishing to you. The market has its 
own checks and balances. You cannot defy through political movement the 
marketplace or the punishment of the marketplace for ignoring the basic 
concepts of supply and demand. It will not work. You have tried it and 
it has been a disaster.
  You have hit a brick wall in California. The elected officials in 
California need to stand up and understand the private marketplace, 
stand up and conserve and take that price cap off so that you have got 
some kind of incentive to build generation. And for gosh sakes, I urge 
the electrical users in California, do not buy into this dream that the 
government of the State of California can run an electrical system more 
efficiently than the private marketplace. Oh, temporarily it will be 
like that 10 percent discount you got when they first deregulated. They 
will make it sound as sweet as roses, sugar, and honey. But down the 
road, you will pay the price because the government cannot operate an 
electrical facility with efficiency.
  Let me move on very briefly about the next subject that I think is 
critical and we are going to hear a lot about and that is the tax plan 
from President Bush. I think it is very, very critical that we put in 
place a tax cut.
  I think our first priority, colleagues, has to be to reduce the debt. 
So the argument here on the Bush tax cut is not about reduction of the 
debt. I think most of my colleagues out here agree that we need to 
reduce the debt. The argument is the structure of how we go about it. 
Now, frankly some of the people opposed to this, i.e., the left wing of 
the Democratic Party, the more liberal element, and I say this with due 
respect, the liberal philosophy appears to be, keep the money in 
Washington.
  I will tell you any time you keep money within reach of these 
Chambers, it is in high danger of being spent or dedicated to a new 
spending program. Do not kid yourself. Money sitting in Washington, 
D.C. is like setting a piece of pie in front of somebody that has not 
eaten for a long time. It is going to get eaten up very quickly. It is 
going to be committed.
  If you want to reduce that debt, put that money back in the pockets 
of the people that made it. That is exactly what President Bush is 
focusing on. That theory is a theory that has been proved time and time 
and time again. Give the money not to the government to reinvest 
because, remember, the government does not create capital. The 
government transfers capital. Those men and women out there, working 
away, they are the ones that create capital. All the government does is 
reach into their pockets and transfer their hard-earned money to 
Washington, D.C.

[[Page H308]]

  Frankly as you know as a result of this surplus, you have had a lot 
more money than we need transferred out of a worker's pocket to 
Washington, D.C. You have got a lot of people that did not have to earn 
that money that have great ideas on how to spend your money. They want 
it kept in Washington. This new program, this new program, more for 
this program.
  President Bush has it right. We have got an economy that faces a heck 
of a challenge. We have got an economy that threatens millions and 
millions of jobs. We have got an economy that just in the last month we 
have seen tens and tens of thousands of people lose their jobs.
  We have got to come up with a recovery plan. The recovery plan is not 
to keep that surplus in Washington, D.C. for more spending. That 
recovery plan is to get that money quickly back out to the people who 
earned it. Get that money back out to the people who made it. That is 
how you create capital. And when you create capital, you create more 
taxable transactions. And when you create more taxable transactions, 
you reduce the Federal debt.
  Today in the Committee on Ways and Means, I sat and listened to the 
Secretary of Treasury and heard a questioner imply that a tax cut was 
going to add to the national debt. A tax cut if appropriately put into 
place will reduce the national debt. Because you are putting money out 
and it creates capital out there in the free marketplace.
  I also heard out there today about how this is a rich man's tax cut. 
Let us take a look at some hard facts here very briefly. This is who 
pays Federal income taxes. By the way, as you can tell, this is my 
homemade chart, colleagues, so forgive me for it but I think you can 
get the basics of it.
  All taxpayers, of course, pay 100 percent. All taxpayers pay 100 
percent of the taxes. The top 1 percent of the taxpayers in the country 
pay 34 percent of the taxes. The top 5 percent pay 53 percent of taxes. 
The top 10 percent of taxpayers in the country pay 65 percent of the 
taxes. Right down here, the top 50 percent, half of the taxpayers in 
this country, pay 95 percent of the taxes. The bottom 50 percent pay 
less than 4 percent of the taxes. I will go ahead and leave this up so 
you can take a look at it.
  The bottom half pays less than 4 percent of the taxes. So if you are 
going to have an impact, if you are going to put dollars back out 
there, number one, the principle of a tax cut should go to people who 
pay taxes. Bush's plan is not a welfare plan. President Bush's plan is 
to go to the people who pay taxes, every taxpayer out there, regardless 
of their wealth and reduce marginal rates, get those dollars out here 
where they are going to work. Get those dollars out into that 
community. Get it out there where it is going to be reinvested under 
President Bush's income tax cut.
  Under President Bush's income tax cut, there are several key issues. 
One in five tax-paying families with children will no longer pay any 
income tax at all. So out of every five families out there that are 
paying income taxes today, out of every five, they are paying taxes 
today, one of them after this program will no longer have to pay those 
taxes. By the way, all five of them will have their taxes reduced. A 
family of four who make $35,000 a year will pay no Federal income taxes 
under this plan. So if you have got constituents out there, colleagues, 
who have a family of four, mom and dad, boy and girl, and they are 
making $35,000 a year, under President Bush's plan they will no longer 
pay Federal income taxes.
  What do you think happens to that money, colleagues? They do not go 
take the money that they are no longer transferring to Washington, D.C. 
and bury it in the ground. They go out and use that money. They either 
put it into savings or they go put it as a down payment or they go buy 
a washer or a dryer. That money begins to circulate in the environment 
that creates capital, that also creates taxable transactions, that also 
helps reduce the Federal debt.
  Let me go on. A family of four making $50,000 a year, so if you have 
mom and dad and boy and girl, and they are making $50,000 a year, their 
taxes will be reduced by 50 percent. A 50 percent tax cut. A reduction 
of $1,600. And a family of four who makes $75,000 a year will receive a 
25 percent tax cut.
  On top of that, there are some other important issues that are being 
reduced and addressed by President Bush's tax plan. Let me start with 
one that hits me right in the heart and hits a lot of American families 
out there. And that is the elimination of the death tax.
  Death should not be a taxable event in a country like the United 
States of America. Our forefathers never intended for a family to be 
taxed because of the tragedy of a death. What happened and where that 
tax was created was around the early 1900s as a tool to punish the 
Rockefellers and the Carnegies and so on and so forth, the Morgan 
Stanleys, those are the people they wanted to penalize, so it was put 
in purely as a penalty, as a punitive measure by the government, 
completely contrary to the philosophy of our government, that is, those 
who work hard should be able to save something for future generations.
  What the Bush plan does is over an 8-year period of time, it 
eliminates that death tax. It actually goes out and says, wait a 
minute, the government is going the wrong way. What President Bush says 
the government should be doing is encouraging family business to go 
from one generation to the next generation.
  President Bush says we should not have a government that discourages 
business and family farms and family ranches from going from one 
generation to the next generation. This should be a government that 
encourages it. This should be a government that goes out there and says 
death is not a taxable event. President Bush does not believe that 
death should be a taxable event. This deserves the support of everybody 
in here.
  Now, I hear some people say, well, all it does is support the 
wealthy. I am so sick of hearing that. You know something, if you go 
out there and you work hard and you save a few bucks, all of a sudden, 
some of my colleagues in here call you rich and for some reason despite 
the fact you worked for it, despite the fact you did something that 
brought that to you, you do not deserve it or somebody else who did not 
work quite as hard, who did not come up with a better mousetrap should 
have it from you. This tax plan is what we need for a recovery in our 
economy.
  I will tell you what else President Bush does in this tax plan. And 
finally, finally, we have got somebody that will talk about the death 
tax and say death is not a taxable event. And finally we have got a 
President who incorporates within his tax cut plan an elimination, or a 
significant downsizing of the marriage penalty. Do you think that our 
forefathers ever imagined that this government would go to the point in 
time where it would tax a family for a marriage? Do you think that they 
thought that this government would go so far as to say, ``We'll tax you 
when you marry, and we'll tax you when you die"? That is where the 
government is.
  Finally, we have got a President who is standing up to this and 
saying, look, every taxpayer deserves a tax cut. Death is not a taxable 
event. Marriage is not a taxable event. We have also got a President 
who has proposed a tax cut that is not aimed at business. This is not 
aimed at big business. This is aimed at individual taxpayers, 
regardless, every taxpayer in America, every taxpayer in America will 
benefit from this tax cut because it cuts the marginal rates. President 
Bush in his tax cut, he does not go out and pick a special, heavily 
lobbied organization or group or business to get the tax cut at the 
expense of every other taxpayer. He does not do that. President Bush 
goes out there and puts together a plan that benefits every taxpayer. 
That is what is beautiful about this tax plan. This country needs a 
significant tax cut.
  The danger of a tax cut is if you do not do enough, then it will not 
help reduce the national debt. It will not work. It will not help give 
a jump-start to that economy. By the way, the tax cut alone will not 
jump-start the economy. It takes a combination of strategies. One of 
the strategies is you have got to have the Fed lower the interest rate 
and that strategy has been put into place. And I believe that Greenspan 
will lower those rates again within the very near future. Strategy 
number one, arm number one.
  Arm number two, strategy number two, put a tax cut into place that 
has

[[Page H309]]

some significance. It has got to be large enough to have some kind of 
impact on the economy. That is what has to happen. You put those two 
strategies in there and you have got one other one you have got to 
think about, and that is our responsibility on this House floor.

                              {time}  2015

  You have got to control Federal spending. You have got to control 
spending. If you control spending, you reduce taxes and you lower the 
interest rate; that is the kind of formula that makes a very, very 
potent medicine to fight this slowdown that we are now facing.
  So I am asking all of my colleagues, look, put partisan politics 
aside. Stand with the President. President Bush needs our support. 
President Bush has been willing to take the lead on this. We ought to 
stand up in unison; and we ought to help the President, because if we 
do not, this economy could continue to spiral in a downward fashion. We 
have time to save the economy, we have time to correct this downturn, 
but if we do not work with the kind of strategy that I think is now 
being deployed, one, by Greenspan, two, by the President, and, three, 
by us to control Federal spending, then, frankly, we are going to get 
what we ask for.
  So, in conclusion this evening, let me recap the three topics.
  Number one, the Mark Rich pardon. If you look at your history books, 
it will go down in history as one of the most disgraceful pardons in 
the history of this country, the most disgraceful pardon in the history 
of this country. Take a look at it. Watch it with interest.
  Number two, the energy crisis in California. California, you are 
going to have to build generation in your own backyard. You are going 
to have to conserve. You are going to have to lift your price cap. And, 
for gosh sakes, Californians, do not let the government run your 
electrical distribution facility and entire electrical enterprise. It 
may sound sweet today; but for a short-term benefit, you will have a 
very, very long-term cost.
  Number three, I urge my colleagues and the citizens and their 
constituents, urge your constituents to take a careful look at what the 
President has proposed. It does eliminate the death tax, it does reduce 
the marriage penalty, it does put tax dollars back to every taxpayer in 
this country, individual taxpayers in this country; and that is exactly 
the kind of formula we need, if we can deliver our part, and that is to 
control Federal spending.

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