[Congressional Record Volume 147, Number 25 (Wednesday, February 28, 2001)]
[House]
[Page H466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   FISCAL ISSUES RAISED BY PRESIDENT BUSH IN HIS ADDRESS TO CONGRESS

  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, I would like to address some of the fiscal 
issues raised by the President when he spoke in this Hall scarcely 12 
or 13 hours ago.
  First, we are told that a 4 percent increase in the budget for 
domestic programs is sufficient and represents a genuine increase in 
those programs. Keep in mind, Mr. Speaker, our population is growing 
faster than 1 percent a year. Inflation is greater than 3 percent. 
Accordingly, a 4 percent nominal increase in expenditure is actually a 
real cut in the benefits that can be provided by a government program.
  For example, Mr. Speaker, if our goal was to provide one pencil for 
every schoolchild in America, we would need to provide more than a 4 
percent increase in that budget, because the price of pencils is likely 
to go up over 3 percent, and the number of students is likely to 
increase by more than 1 percent.
  Mr. Speaker, we were told, I think correctly, that we cannot continue 
year after year to increase expenditure by 8 percent, even nominally by 
8 percent, but a 4 percent increase when not adjusted for population or 
inflation represents an actual cut.
  Mr. Speaker, we were given a tax cut proposal in which almost half of 
the benefits go to the richest 1 percent of Americans, those with the 
highest income, a group of individuals who have, on average, $900,000 
of income every year. Certainly we can do better in targeting the tax 
cut.
  We have been told that repealing the estate tax will not have an 
adverse impact on charity because, when people make charitable 
contributions, they are not influenced by the tax law but instead are 
influenced only by their desire to help the charity.
  Our President yesterday exploded that argument that has been made on 
this floor by many Republican Members when he stated that ``By allowing 
an income tax deduction for those who do not itemize, we will encourage 
as much as $14 billion of charitable giving.''
  So our President asks us to imagine a person of modest means putting 
$5 in the collection plate; that a person who does not even itemize 
their deductions somehow will be motivated to put more money in the 
collection plate if we change our tax law, but that an individual 
leaving $5 million to a university to have a building named after them 
will not be influenced by the repeal of the estate tax.
  Nothing could be further from the truth. Trust me, I was a tax 
professional for nearly 15 years. I never got asked, ``Should I put $5 
in the collection plate or $6? But I venture to say there are very few 
$5 million gifts that are not influenced by the estate and income tax 
law.
  Then we were asked by the President to imagine a waitress with two 
kids earning just $25,000, and we were told this was the reason we 
should adopt the President's tax cut. Keep in mind, his tax cut would 
increase her income by only 2 percent. That is as stingy as a 25-cent 
tip.
  But just to the point, that $25,000 waitress example was a carefully 
selected anomaly designed to disguise what the Bush tax proposal really 
does. Keep in mind, there are many waitresses who make only $20,000 a 
year, and under the President's proposal they get nothing, not even a 1 
cent insult tip left on the table.
  If we want to design a tax cut to benefit that image that was painted 
for us so cleverly yesterday of someone who is busing tables or waiting 
on tables making $25 $20,000, $25,000 and trying to support a couple of 
kids, we need to adopt a completely different approach to the tax cut.
  Mr. Speaker, we need estate tax relief, but we need estate tax relief 
that is designed not to gut the estate tax as a source of revenue, but 
rather, something that will make sure that the estate tax falls only on 
1 percent of the estates, meaning 99 percent of Americans would not 
have to worry about that tax.

                              {time}  1300

  That would still allow us to generate the vast majority of revenue 
that is generated by that tax, and then we could afford to provide real 
tax relief to waitresses making $25,000 or even $20,000.

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