[Congressional Record Volume 147, Number 30 (Thursday, March 8, 2001)]
[House]
[Pages H761-H809]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ECONOMIC GROWTH AND TAX RELIEF ACT OF 2001

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 83, I call up 
the bill (H.R. 3) to amend the Internal Revenue Code of 1986 to reduce 
individual income tax rates, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 83, the bill is 
considered read for amendment.
  The text of H.R. 3 is as follows:

                                 H.R. 3

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Growth and Tax Relief Act of 2001''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Section 15 Not To Apply.--No amendment made by section 
     2 shall be treated as a change in a rate of tax for purposes 
     of section 15 of the Internal Revenue Code of 1986.

     SEC. 2. REDUCTION IN INCOME TAX RATES FOR INDIVIDUALS.

       (a) In General.--Section 1 is amended by adding at the end 
     the following new subsection:
       ``(i) Rate Reductions After 2000.--
       ``(1) New lowest rate bracket.--
       ``(A) In general.--In the case of taxable years beginning 
     after December 31, 2000--
       ``(i) the rate of tax under subsections (a), (b), (c), and 
     (d) on taxable income not over the initial bracket amount 
     shall be 12 percent (as modified by paragraph (2)), and
       ``(ii) the 15 percent rate of tax shall apply only to 
     taxable income over the initial bracket amount.
       ``(B) Initial bracket amount.--For purposes of this 
     subsection, the initial bracket amount is--
       ``(i) $12,000 in the case of subsection (a),
       ``(ii) $10,000 in the case of subsection (b), and
       ``(iii) \1/2\ the amount applicable under clause (i) in the 
     case of subsections (c) and (d).
       ``(C) Inflation adjustment.--In prescribing the tables 
     under subsection (f) which apply with respect to taxable 
     years beginning in calendar years after 2001--
       ``(i) the Secretary shall make no adjustment to the initial 
     bracket amount for any taxable year beginning before January 
     1, 2007,
       ``(ii) the cost-of-living adjustment used in making 
     adjustments to the initial bracket

[[Page H762]]

     amount for any taxable year beginning after December 31, 
     2006, shall be determined under subsection (f)(3) by 
     substituting `2005' for `1992' in subparagraph (B) thereof, 
     and
       ``(iii) such adjustment shall not apply to the amount 
     referred to in subparagraph (B)(iii).

     If any amount after adjustment under the preceding sentence 
     is not a multiple of $50, such amount shall be rounded to the 
     next lowest multiple of $50.
       ``(2) Reductions in rates after 2001.--In the case of 
     taxable years beginning in a calendar year after 2001, the 
     corresponding percentage specified for such calendar year in 
     the following table shall be substituted for the otherwise 
     applicable tax rate in the tables under subsections (a), (b), 
     (c), (d), and, to the extent applicable, (e).


------------------------------------------------------------------------
                                  The corresponding percentages shall be
                                       substituted for the following
 ``In the case of taxable years                percentages:
 beginning during calendar year: ---------------------------------------
                                    12%     28%     31%     36%    39.6%
------------------------------------------------------------------------
2002............................    12%     27%     30%     35%     38%
2003............................    11%     27%     29%     35%     37%
2004............................    11%     26%     28%     34%     36%
2005............................    11%     26%     27%     34%     35%
2006 and thereafter.............    10%     25%     25%     33%     33%
------------------------------------------------------------------------

       ``(3) Adjustment of tables.--The Secretary shall adjust the 
     tables prescribed under subsection (f) to carry out this 
     subsection.''
       (b) Repeal of Reduction of Refundable Tax Credits.--
       (1) Subsection (d) of section 24 is amended by striking 
     paragraph (2) and redesignating paragraph (3) as paragraph 
     (2).
       (2) Section 32 is amended by striking subsection (h).
       (c) Conforming Amendments.--
       (1) Subparagraph (B) of section 1(g)(7) is amended--
       (A) by striking ``15 percent'' in clause (ii)(II) and 
     inserting ``the first bracket percentage'', and
       (B) by adding at the end the following flush sentence:

     ``For purposes of clause (ii), the first bracket percentage 
     is the percentage applicable to the lowest income bracket in 
     the table under subsection (c).''
       (2) Section 1(h) is amended--
       (A) by striking ``28 percent'' both places it appears in 
     paragraphs (1)(A)(ii)(I) and (1)(B)(i) and inserting ``25 
     percent'', and
       (B) by striking paragraph (13).
       (3) Section 15 is amended by adding at the end the 
     following new subsection:
       ``(f) Rate Reductions Enacted by Economic Growth and Tax 
     Relief Act of 2001.--This section shall not apply to any 
     change in rates under subsection (i) of section 1 (relating 
     to rate reductions after 2000).''
       (4) Section 531 is amended by striking ``equal to'' and all 
     that follows and inserting ``equal to the product of the 
     highest rate of tax under section 1(c) and the accumulated 
     taxable income.''.
       (5) Section 541 of such Code is amended by striking ``equal 
     to'' and all that follows and inserting ``equal to the 
     product of the highest rate of tax under section 1(c) and the 
     undistributed personal holding company income.''.
       (6) Section 3402(p)(1)(B) is amended by striking ``7, 15, 
     28, or 31 percent'' and inserting ``7 percent, any percentage 
     applicable to any of the 3 lowest income brackets in the 
     table under section 1(c),''.
       (7) Section 3402(p)(2) is amended by striking ``equal to 15 
     percent of such payment'' and inserting ``equal to the 
     product of the lowest rate of tax under section 1(c) and such 
     payment.''.
       (8) Section 3402(q)(1) is amended by striking ``equal to 28 
     percent of such payment'' and inserting ``equal to the 
     product of the third to the lowest rate of tax under section 
     1(c) and such payment.''
       (9) Section 3402(r)(3) is amended by striking ``31 
     percent'' and inserting ``the third to the lowest rate of tax 
     under section 1(c)''.
       (10) Section 3406(a)(1) is amended by striking ``equal to 
     31 percent of such payment'' and inserting ``equal to the 
     product of the third to the lowest rate of tax under section 
     1(c) and such payment.''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2000.
       (2) Amendments to withholding provisions.--The amendments 
     made by paragraphs (6), (7), (8), (9), and (10) of subsection 
     (c) shall apply to amounts paid after the date of the 
     enactment of this Act.

  The SPEAKER pro tempore. The amendment printed in the bill is 
adopted.
  The text of H.R. 3, as amended, is as follows:

                                 H.R. 3

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Growth and Tax Relief Act of 2001''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Section 15 Not To Apply.--No amendment made by section 
     2 shall be treated as a change in a rate of tax for purposes 
     of section 15 of the Internal Revenue Code of 1986.

     SEC. 2. REDUCTION IN INCOME TAX RATES FOR INDIVIDUALS.

       (a) In General.--Section 1 is amended by adding at the end 
     the following new subsection:
       ``(i) Rate Reductions After 2000.--
       ``(1) New lowest rate bracket.--
       ``(A) In general.--In the case of taxable years beginning 
     after December 31, 2000--
       ``(i) the rate of tax under subsections (a), (b), (c), and 
     (d) on taxable income not over the initial bracket amount 
     shall be 12 percent (as modified by paragraph (2)), and
       ``(ii) the 15 percent rate of tax shall apply only to 
     taxable income over the initial bracket amount.
       ``(B) Initial bracket amount.--For purposes of this 
     subsection, the initial bracket amount is--
       ``(i) $12,000 in the case of subsection (a),
       ``(ii) $10,000 in the case of subsection (b), and
       ``(iii) \1/2\ the amount applicable under clause (i) in the 
     case of subsections (c) and (d).
       ``(C) Inflation adjustment.--In prescribing the tables 
     under subsection (f) which apply with respect to taxable 
     years beginning in calendar years after 2001--
       ``(i) the Secretary shall make no adjustment to the initial 
     bracket amount for any taxable year beginning before January 
     1, 2007,
       ``(ii) the cost-of-living adjustment used in making 
     adjustments to the initial bracket amount for any taxable 
     year beginning after December 31, 2006, shall be determined 
     under subsection (f)(3) by substituting `2005' for `1992' in 
     subparagraph (B) thereof, and
       ``(iii) such adjustment shall not apply to the amount 
     referred to in subparagraph (B)(iii).

     If any amount after adjustment under the preceding sentence 
     is not a multiple of $50, such amount shall be rounded to the 
     next lowest multiple of $50.
       ``(2) Reductions in rates after 2001.--In the case of 
     taxable years beginning in a calendar year after 2001, the 
     corresponding percentage specified for such calendar year in 
     the following table shall be substituted for the otherwise 
     applicable tax rate in the tables under subsections (a), (b), 
     (c), (d), and, to the extent applicable, (e).


------------------------------------------------------------------------
          ``In the case of      The corresponding percentages shall be
           taxable years     substituted for  the following percentages:
          beginning during  --------------------------------------------
           calendar year:      12%      28%      31%      36%     39.6%
------------------------------------------------------------------------
        2002...............    12%      27%      30%      35%      38%
        2003...............    11%      27%      29%      35%      37%
        2004...............    11%      26%      28%      34%      36%
        2005...............    11%      26%      27%      34%      35%
        2006 and thereafter    10%      25%      25%      33%      33%
------------------------------------------------------------------------

       ``(3) Adjustment of tables.--The Secretary shall adjust the 
     tables prescribed under subsection (f) to carry out this 
     subsection.''
       (b) Repeal of Reduction of Refundable Tax Credits.--
       (1) Subsection (d) of section 24 is amended by striking 
     paragraph (2) and redesignating paragraph (3) as paragraph 
     (2).
       (2) Section 32 is amended by striking subsection (h).
       (c) Conforming Amendments.--
       (1) Subparagraph (B) of section 1(g)(7) is amended--
       (A) by striking ``15 percent'' in clause (ii)(II) and 
     inserting ``the first bracket percentage'', and
       (B) by adding at the end the following flush sentence:

     ``For purposes of clause (ii), the first bracket percentage 
     is the percentage applicable to the lowest income bracket in 
     the table under subsection (c).''
       (2) Section 1(h) is amended--
       (A) by striking ``28 percent'' both places it appears in 
     paragraphs (1)(A)(ii)(I) and (1)(B)(i) and inserting ``25 
     percent'', and
       (B) by striking paragraph (13).
       (3) Section 15 is amended by adding at the end the 
     following new subsection:
       ``(f) Rate Reductions Enacted by Economic Growth and Tax 
     Relief Act of 2001.--This section shall not apply to any 
     change in rates under subsection (i) of section 1 (relating 
     to rate reductions after 2000).''
       (4) Section 531 is amended by striking ``equal to'' and all 
     that follows and inserting ``equal to the product of the 
     highest rate of tax under section 1(c) and the accumulated 
     taxable income.''.

[[Page H763]]

       (5) Section 541 is amended by striking ``equal to'' and all 
     that follows and inserting ``equal to the product of the 
     highest rate of tax under section 1(c) and the undistributed 
     personal holding company income.''.
       (6) Section 3402(p)(1)(B) is amended by striking ``7, 15, 
     28, or 31 percent'' and inserting ``7 percent, any percentage 
     applicable to any of the 3 lowest income brackets in the 
     table under section 1(c),''.
       (7) Section 3402(p)(2) is amended by striking ``equal to 15 
     percent of such payment'' and inserting ``equal to the 
     product of the lowest rate of tax under section 1(c) and such 
     payment''.
       (8) Section 3402(q)(1) is amended by striking ``equal to 28 
     percent of such payment'' and inserting ``equal to the 
     product of the third to the lowest rate of tax under section 
     1(c) and such payment''.
       (9) Section 3402(r)(3) is amended by striking ``31 
     percent'' and inserting ``the third to the lowest rate of tax 
     under section 1(c)''.
       (10) Section 3406(a)(1) is amended by striking ``equal to 
     31 percent of such payment'' and inserting ``equal to the 
     product of the third to the lowest rate of tax under section 
     1(c) and such payment''.
       (11) Section 13273 of the Revenue Reconciliation Act of 
     1993 is amended by striking ``28 percent'' and inserting 
     ``the third to the lowest rate of tax under section 1(c) of 
     the Internal Revenue Code of 1986''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2000.
       (2) Amendments to withholding provisions.--The amendments 
     made by paragraphs (6), (7), (8), (9), (10), and (11) of 
     subsection (c) shall apply to amounts paid after the 60th day 
     after the date of the enactment of this Act.

     SEC. 3. PROTECTION OF SOCIAL SECURITY AND MEDICARE.

       The amounts transferred to any trust fund under the Social 
     Security Act shall be determined as if this Act had not been 
     enacted.

  The SPEAKER pro tempore. After 1 hour of debate on the bill, as 
amended, it shall be in order to consider a further amendment printed 
in House Report 107-12, if offered by the gentleman from New York (Mr. 
Rangel) or his designee, which shall be considered read, and shall be 
debated for 60 minutes, equally divided and controlled by a proponent 
and an opponent.
  The gentleman from California (Mr. Thomas) and the gentleman from New 
York (Mr. Rangel) each will control 30 minutes of debate on the bill, 
as amended.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. and Mrs. America, help is on the way, H.R. 3. This bill is only 
seven pages long. How ironic. The usual complaint about congressional 
bills is that they are about as long as War and Peace or they weigh 
between 10 or 12 pounds. Seven pages. What is inside these seven pages?
  Before a Joint Session of Congress, President Bush asked Congress to 
make sure no hard-working income tax payer pays more than one-third of 
their income in taxes. It is here. It is in these seven pages.
  President Bush said he wanted immediate relief for small business. 
Seventeen million individual returns are actually small businesses. It 
is here. It is in these seven pages. Small businesses will have more 
money this year to pay workers, buy inventory or pay heating or 
lighting bills.
  President Bush said more low income workers should not have to pay 
any income tax. It is here in these seven pages. More than 4 million 
low-income workers are freed from their income tax burden. President 
Bush said the economy is faltering. In fact, a number of economists and 
all of the leading economic indicators say the economy is faltering.
  President Bush said every hard-working American taxpayer should have 
some of their money returned. It is here. It is in these seven pages. 
Money so these hard-working Americans can pay their bills with more of 
their own money.
  Mr. Speaker, today we offer the heart of President Bush's tax plan, 
lower taxes, permanently for all, H.R. 3. It is about time.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, I agree with the gentleman from California (Mr. Thomas), 
the chairman of the Committee on Ways and Means, it is only seven 
pages, but what is in those seven pages?
  This is not the tax bill that we hear the President talking about. 
This does not give relief to people who are married and suffer the 
marriage penalty. It does not take care of the estate tax. Who it takes 
care of politically are the top rollers in the United States.
  Mr. Speaker, 60 percent of the relief that is in this part of the 
bill and the other parts that they will bring in tomorrow will go to 
the top 10 percent of the people in America, 43 percent of it goes to 
the top 1 percent. Yet they do not even have a budget.
  They would have us to believe that they are working under last year's 
budget, and technically it is this year's budget. But one thing is 
clear that they waived all rules that would prevent them from having to 
say that there is a budget on the floor today.
  We do hope that those of us who are concerned about Social Security, 
about Medicare, about prescription drugs, about improving the quality 
of education, about making certain our farmers and those young men and 
women who serve in the military that they are protected. How would we 
ever know without a budget, but we can take a riverboat gamble that 
perhaps the CBO at one time is right and maybe the $5.6 trillion is 
going to be there, but all of this money that we will be saying that we 
are giving back to the people, we do not give them back their 
obligations for the $3.4 trillion of debt that we got in before because 
of reckless fiscal policy.
  What we had hoped is that we could have a budget of measure and be 
able to make decisions in a framework of what our responsibilities are, 
but, unfortunately, the other side believes that the faster they go, 
the better it is and so, therefore, we hope to slow down this train so 
the American people could take a good look at the fraud that is being 
perpetrated.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute the 
gentleman from Illinois (Mr. Weller), a member of the Committee on Ways 
and Means.
  (Mr. WELLER asked and was given permission to revise and extend 
remarks.)
  Mr. WELLER. Mr. Speaker, I rise to support this legislation. It is 
vitally important legislation. In representing the Chicago area, we are 
seeing tens of thousands of layoffs.
  I have families every day that tell me about their needs, their 
struggle to pay their high energy home heating bills. They are 
struggling to pay off their credit card bills. They are seeing their 
neighbors lose their jobs. And President Bush, as we know, inherited a 
weakening economy, and he is proposing that we move quickly to fix it 
and put some money back into the economy and protect jobs and help 
people pay off their bills.
  This legislation will provide real money for real people. I am 
pleased to point out and thank the leadership of the gentleman from 
California (Mr. Thomas). This tax relief is retroactive, which means it 
will be effective this year, giving taxpayers, every taxpayer who pays 
taxes, the opportunity to have some extra money. That is a fine point 
about this bill.
  It is not targeted so that people are excluded or divided. It means 
if you pay taxes this rate reduction benefits everyone. It provides 
real money for real people.
  Mr. Speaker, I would note for a married couple with two kids, a 
combined income of $75,000, a machinist and schoolteacher, it will 
provide $1,600 in tax relief once fully phased in, $400 this year.
  Mr. RANGEL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Michigan (Mr. Dingell).
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Speaker, I rise in opposition to this outrageous 
piece of legislation on which none of my Republican colleagues have the 
vaguest idea of what they are doing.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
California (Mr. Matsui), a senior member of the Committee on Ways and 
Means.
  Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding the time to me.
  Mr. Speaker, the whole basis of this Bush tax cut which ultimately 
will be $1.6 trillion, maybe $2 trillion or $3 trillion, when it is 
finished, no one knows

[[Page H764]]

what the total amount will be, the whole basis of this tax cut is based 
upon surplus projections over the next 10 years from the Congressional 
Surplus Budget Office that does estimates. In the document that said 
that we will have $5.6 trillion, the Congressional Budget Office also 
said that there is only a 50 percent probability that the 5-year 
projections will be correct, and they say in the 10-year projections 
they cannot even assess whether or not they will occur because they 
have no experience at it.
  If you take away the fact that these projections are kind of 
guesswork, like whether the weather, in fact, will have snow next week 
or last week, and maybe it did not, then if you take away that, the 
whole basis of this tax cut then becomes illusionary, and that means if 
it does not happen, we are going to have to cut health care benefits. 
We are not going to be able to get prescription drug treatment to our 
senior citizens.
  Mr. Speaker, I will guarantee that we will have to make significant 
cuts in Social Security, if, in fact, this tax cut occurs and these 
numbers do not come up, and we know these numbers are just based upon 
nothing but guesswork, and it is my hope that the Members will come to 
their senses and be very, very cautious, because the Democrats have a 
tax cut that basically is modest.
  It is about $600 billion, which is a lot of money, but at the same 
time that tax cut is well within a budget framework and obviously will 
stay within these guesswork numbers.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Arizona (Mr. Hayworth), a member of the Committee on 
Ways and Means.
  Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from California (Mr. 
Thomas), the chairman of the Committee on Ways and Means for yielding 
me the time.
  Mr. Speaker, I listened with great interest to my friend from 
California (Mr. Matsui) on the other side of the aisle acknowledging 
what we all know, none of us here have the gift of clairvoyance. 
Indeed, the other side did not have the gift of clairvoyance when they 
disregarded budget rules, waived budget rules and spent and spent and 
spent and spent more of your hard earned money.
  Now to hear my friends on the other side with this born-again 
devotion to passing a budget first, I simply say, Mr. Speaker, what 
about the family budget? What about your constituents working hard to 
make ends meet? What about your constituents sending up to 40 percent 
of their income in taxation to some form of government? What about your 
constituents paying more in for taxes than for food, clothing and 
shelter combined? What about your constituents who you have asked time 
and time and time again to sacrifice so that Washington can do more?
  Mr. Speaker, I would suggest that is exactly backwards. Washington 
should live within its means so that American families can have more in 
this year. For a married couple, an extra $400 this year, I know to big 
spenders it does not sound like much, but it helps pay down credit card 
debt. It helps buy new clothes for the kids or a new set of tires.
  In short, it is real money for real people, and it is money that 
belongs to the people, not to the government.
  Mr. Speaker, what we see here in this debate this afternoon is really 
a conflict in philosophy. Some folks here honestly believe Washington 
needs the people's money more than the people do. We respectfully 
submit that is exactly backwards.
  The American people need more of their hard earned money especially 
in these times of economic uncertainty, and joining together with the 
passage of H.R. 3 this afternoon, we take this important step.
  Mr. Speaker, I urge my colleagues to vote in the affirmative.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Washington (Mr. McDermott), a senior member of the Committee on Ways 
and Means.
  (Mr. McDERMOTT asked and was given permission to revise and extend 
his remarks.)
  Mr. McDERMOTT. Mr. Speaker, I am here to oppose any tax cut until we 
get a budget.
  Now, the last speaker, the gentleman from Arizona (Mr. Hayworth) said 
we do not need a budget. Let me tell you why we do. I sit on the Budget 
Committee, as well as on the Ways and Means Committee, and we had the 
wizard from Wisconsin appear before the Budget Committee.
  That was former Governor Thompson who is now head of HHS. He did not 
answer a single question that comes from the budget book ``A Blueprint 
For New Beginnings which the President sent to us and told us about.
  On page 15, this book says that Medicare is going to be $645 billion 
in the hole over the next 10 years. On page 51, the President says we 
will put $153 billion into Medicare. Now that is $400 billion that will 
not be there for Medicare.
  Better yet, the wizard says I am going to give you a prescription 
drug benefit. In that $153 billion they are sticking in, somewhere they 
are going to come up with $159 billion for the prescription drug 
benefit this House passed in the last session. Those numbers do not add 
up, and that is just one part of this budget.
  I was in Seattle the other day listening about whether I should come 
back from the earthquake which nobody predicted. The projections on 
earthquakes are kind of bad. They said there was going to be 2 feet of 
snow here, so I got on the plane in Seattle, and I arrived here and 
walked off and there were two flakes.
  Anybody who votes for this tax budget is reckless.
  I will not support a tax cut without a budget.


                     i. need budget first argument

  I went to the Budget Committee hearing yesterday where Secretary 
Thompson testified. He could not answer a single question about how we 
are going to meet our financial obligations for Medicare.
  The President allocates $153 billion to modernize Medicare--this 
includes a prescription drug benefit and his Immediate Helping Hand 
program. This ``modernization'' effort will not give the Medicare 
program the infusion of dollars it so desperately needs. This amount 
will not even be enough to fund a prescription drug benefit, let alone 
have any success in so-called modernization. Last year's House 
Republican plan alone carried a 10-year price tag of $159 billion. But 
according to many health care analysts, even this amount is inadequate.
  The administration puts Part A HI surplus into a $842 billion 
contingency fund. This fund must be the same ``one trillion additional 
reasons'' to which the President referred in his speech last week as to 
why we should feel comfortable with his budget.
  But the administration promises the HI fund will be used only for 
Medicare. So really, this fund is worth only about half of that amount.
  The administration combines Part A and B and tells us we are really 
in a deficit. Using the administration's own numbers, I asked the 
Secretary, how are we going to meet these obligations--is it through 
increasing the payroll tax, decreasing benefits, decreasing payments to 
providers? He could not answer the question.
  The program needs an infusion of money, but the Secretary does not 
know how to achieve that. Of course not--the administration is trying 
to ram a tax cut down our throats before considering the budget.
  Where is the allocation of money for the President's tax credit 
proposal to help the uninsured? I suppose that is one of the trillion 
reasons why I should feel comfortable with his budget.


                     ii. economic stimulus argument

  We are told that the reason that this tax bill was rushed through the 
Ways and Means Committee, and rushed to the floor is because our 
economy is in dire need of a tax cut. We must stimulate the economy--we 
are told. But this tax cut was proposed in 1999. It had nothing to do 
with the economy then. Furthermore, the principle reason CBO's budget 
projections show larger surpluses in their latest estimates is that CBO 
now believes the economy generally will be stronger over the next 10 
years than previously thought. This completely undermines the argument 
that a large, permanent, and growing tax cut is needed to help ward off 
the impending arrival of a weak economy.
  His tax cut will give $360 to families in the first year--this is a 
dollar a day. If you're lucky, you can buy a cup of coffee. How can we 
expect one dollar a day to stimulate the economy?
  Supporters claim that knowing your marginal rates will be increased 
will cause people to spend which will in turn stimulate the economy. 
All that will increase is their personal debt!
  Not to mention, this tax bill is dead-on-arrival in the Senate, where 
they will wait until after they've passed their budget.

[[Page H765]]

               iii. government spending is good argument

  There has been much focus on Chairman Greenspan's testimony and the 
peril of reaching zero debt. There is a misconception that government 
spending is a bad idea. Republicans ask--who needs the money more--the 
American people or Washington, DC. But this is a completely misleading 
question and not the choice with which we are faced.
  Government spending is money spent for the people--for the welfare of 
our citizens and includes social goods that individuals independently 
would not have otherwise purchased.
  Take for example the latest disaster in my district, in Seattle. We 
just experienced an earthquake registered at 6.8.--6.8 in India leveled 
buildings and caused massive loss of life--thousands of people. But in 
Seattle, we were extremely lucky. There was no loss of life.
  I was just there. I saw the extent of the damage with my own eyes. 
While there was an estimated $2 billion worth of damage, it could have 
easily been so much worse--had we not prepared.
  But we did prepare--with the help of a government program called 
Project Impact. Seattle was one of seven cities chosen for $1 million 
pilot programs in 1998. This forward-looking program linked community 
leaders to corporations interested in blunting the economic fallout 
from natural disasters.
  The government provides the initial seed money and suggestions to get 
various stakeholders involved and invested in prevention and investment 
efforts.
  Project Impact began with seven pilot communities and quickly became 
a nationwide initiative as more communities began to see the value in 
disaster planning. Today there are nearly 250 Project Impact 
communities as well as more than 2500 businesses that have joined 
Project Impact as partners.
  As I surveyed the damage myself, I said--``This initiative worked!''
  This is a prime example of government spending for the public good. 
But unfortunately, this administration wants to abolish it to save $25 
million, as they try and find the funds to pay for their $2 trillion 
tax cut.
  This is also a perfect example of why government spending is good, 
and why I will not vote for a tax cut before I know the budget.


               iv. tax cut is biased and unfair argument

  The tax cut proposal from President Bush is biased and unfair, giving 
disproportionately less money to working poor families.
  Bush supporters talk in terms of marginal tax rates and percentages, 
but not dollars. They will tell us that the poor receive a large 
reduction in marginal tax rates in order to help them obtain access to 
the middle class. But they do not tell us that one in three families 
receive no benefits.
  Twelve million families with children would not receive any tax cut. 
One-third of all children and more than one-half of black and Hispanic 
children live in excluded families. But 80% of these families have 
workers. In other words, they pay taxes, payroll taxes. They have 
contributed to the very surplus President Bush is trying to raid.
  Why shouldn't all Americans benefit from the economic growth and 
prosperity that has resulted in our surpluses?
  Yes, I believe in a lockbox for both Social Security and Medicare, 
but there are ways to give breaks to lower income families with no tax 
liabilities.
  If President Bush really wants to help hard-working individuals 
obtain access to the middle class, why does he reduce rates across only 
the first 25% of income within the 15% bracket income tax rates--to 
10%, while all other income amounts within all other tax brackets 
experience the rate reduction. Why am I not surprised?
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentlewoman from Washington (Ms. Dunn), a member of the Committee on 
Ways and Means.

                              {time}  1415

  Ms. DUNN. Mr. Speaker, there are two reasons for the tax relief bill 
that we are considering on the floor this afternoon. First, as the 
Federal Government continues to amass surpluses, we must share this 
reward with the people who produced it. The longer we delay providing 
tax relief, the less likely it will materialize. Because we know that 
it is a fundamental fact that, if that money stays in Washington, D.C., 
it will be spent.
  Under this bill alone, a typical family of four with an income of 
$55,000 a year would see a tax cut of nearly $400 this year; and under 
the entire bill, which we will be addressing later on, $2,000 once the 
plan is fully implemented.
  Second is, as the economy softens, tax relief will provide critical 
stimulus to prevent this country from going into a prolonged recession.
  Wait for the budget. Sure, we could do that. But H.R. 3 would 
increase family income. It will boost economic activity, and it will 
contribute to job growth. We need to get this tax relief moving now. 
Why wait?
  The critics and doomsayers claim that H.R. 3 is too large, it is 
reckless, it is unfair. I respectfully disagree on all counts. The 
bracket reduction represents 25 percent of the projected budget 
surplus. It is also fair. Under H.R. 3, every taxpayer will receive 
relief, every taxpayer. It targets no one in and no one out.
  Indeed, those in the lowest bracket will garner immediate benefit 
retroactive to the beginning of this year. Mr. Speaker, I urge my 
colleagues to support this bill.


                Announcement By The Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood). The Chair asks Members not to 
have signs posted when they are not standing at the podium. The Chair 
would prefer that when Members come to the podium, they can put their 
exhibit up, but not before beginning their remarks.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
New York (Mr. McNulty), the gentleman in the well who has the sign up 
there.
  Mr. McNULTY. Mr. Speaker, the American people have seen so many 
numbers recently. I know their eyes are glazing over. They do not know 
who to believe.
  This is going to be the simplest chart my colleagues are going to see 
in this debate today. I am going to use all the President's numbers. 
You will see no McNulty numbers no Rangel numbers, no Gephardt numbers; 
all the President's numbers.
  He says we are going to have a $5.6 trillion surplus in the next 10 
years. We think it is like a weather forecast. But let us assume it 
happens. We get the $5.6 trillion. He pledged at the podium behind me 
very recently that we were going to reduce the national debt by $2 
trillion. I like that. I support the President in that regard. That 
takes us down to $3.6 trillion.
  He also pledged to protect Social Security and Medicare. Every person 
I am looking at on this floor voted to do that with the lockbox 
legislation just a couple of weeks ago. That is $2.9 trillion. All his 
numbers. That takes us down to less than 1 trillion, 700 billion 
dollars.
  If one subtracts from that, not the 1.6, not the Rangel 2 trillion, 
not the Gephardt 2.2 trillion, just what we are doing today, just $900 
billion. And subtract that from what is left, you have a deficit of 
$200 billion. All the President's numbers. Even if this projection 
comes true.
  Mr. Speaker, we should not go back to the days of deficit spending. 
We owe more to our children and grandchildren than to drown them in a 
sea of red ink.
  I urge my colleagues to reject this proposal, to support the Rangel 
substitute.
  Mr. THOMAS. Mr. Speaker, those numbers are very bright, they are very 
bold, they are nicely drawn, they are absolutely wrong.
  Mr. Speaker, I yield 15 seconds to the gentleman from Louisiana (Mr. 
McCrery) on how wrong the numbers are.
  Mr. McCRERY. Mr. Speaker, the numbers of the gentleman from New York 
(Mr. McNulty) are incorrect. They are not the President's numbers. He 
double-counts $2 trillion of the $2.9 trillion of Social Security 
surplus.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Texas (Mr. Sam Johnson), a member of the Committee on 
Ways and Means.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, it is $363 billion over 5 
years. So when one is talking in bigger numbers like that, one is 
absolutely wrong.
  Do my colleagues know what? This is a great day for every American 
who pays taxes, because today we are going to give each and every 
American some of their own money back.
  Unlike the Democrats, Republicans know that the surplus is the 
people's money, not the government's money. It is a tax surplus. With a 
slowing economy and public confidence slipping, we have got to act now 
because our failure to act could just make matters worse. That is 
irresponsible.
  We do represent the people of the United States. That is why every 
Member of Congress should vote to approve

[[Page H766]]

this fair and responsible tax relief bill. It returns money to those 
who need it the most, low- and middle-income families. Do not deny them 
their own money. They worked hard to earn it, and we ought to work just 
as hard to give it back.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Speaker, I am one of the Blue Dog members on the 
Committee on Ways and Means, and I tell you, we want as large a tax cut 
as is responsible and consistent with protecting Social Security and 
Medicare and retiring the national debt, not to mention the needs of 
military, education and agriculture. The way you do that is you get a 
budget. I know of no prudent business person in this land who would 
make a critical operating decision in his company without a budget.
  And, you know, people are overtaxed. Let me give my colleagues one 
reason why. Look at the debt of this country. Every person in this 
country is responsible for $20,300 of debt. For a family of four, that 
is $82,000 worth of debt that they have on them.
  Retiring the debt is one of the priorities of the Blue Dogs. We think 
there is room to do both. But the way you do that and to make sure that 
you are in a position to do both is to have a budget first and then you 
get to where we want to go with the tax cut.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Minnesota (Mr. Ramstad), a member of the Committee on 
Ways and Means.
  Mr. RAMSTAD. Mr. Speaker, I thank the chairman for yielding me this 
time.
  Mr. Speaker, for the life of me, I cannot understand how those 
opposed to tax relief can make spending decisions based on projected 
revenues. You can spend the taxpayers' money based on projected 
revenues, but you cannot provide tax relief based on those same 
revenues?
  All we are talking about, Mr. Speaker, is returning 1 of 4 surplus 
dollars back to the taxpayers. It is their overpayments that are 
creating the surplus. It is the taxpayers' money, not the government's 
money.
  Let us put this into context. All we are talking about, those of us 
who support this much-needed tax relief, we are talking about returning 
6 percent of the $28 trillion in government revenues over the next 10 
years, 6 percent of $28 trillion in revenues. That is hardly a risky 
tax scheme or overgenerous to return 1 of 4 surplus dollars based on 
the same projections that you are spending money, that we are all 
spending money.
  Our economy needs the stimulus of a tax cut. Every day in Minnesota, 
my constituents are telling me sales are slow, orders are slow, 
inventories are up, consumer confidence is down. More layoffs.
  This tax relief will bring immediate relief to families who are 
pinched financially. It will lift consumer confidence and boost our 
sputtering economy. Our families need this tax relief, our overtaxed 
taxpayers deserve it, and economic growth in America depends on it.
  People want to pay off credit-card debt. They want to make car and 
mortgage payments, pay energy bills. That is why we need to get this 
tax relief to them, as the President says, as soon as possible.
  American people are paying the highest level of taxes in peacetime 
history. We need to return the surplus, the taxpayers' overpayments to 
them in the form of these marginal rate reductions. This tax cut will 
not threaten fiscal discipline, but it will mean real relief for 
American families and for our sinking economy. The taxpayers of America 
deserve this tax relief now.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, to the gentleman from 
Minnesota (Mr. Ramstad) and every single Member of this House who has 
talked about a surplus today, this is reality. I have challenged every 
one of you to say it is not true.
  Our Nation is 5 trillion 700 billion dollars in debt. What the 
gentleman from California (Mr. Thomas) will not tell us is that the 
people who benefit the most from this tax break are the same people who 
own this debt and the same people who are on the receiving end of $1 
billion a day from the taxpayers in interest payments. They benefit the 
most.
  What he will not tell us is that the people who benefit the most do 
not really care if we do not pay back the trillion dollars to Social 
Security, because they are not counting on that check. They do not need 
it. But the folks I represent do. They paid into that fund. We owe them 
a trillion bucks. I say we pay them back.
  What the gentleman from California (Mr. Thomas) will not tell us is 
that the folks who owe 228 billion to the Medicare Trust fund do not 
care if we do not pay it back, because they can afford private 
insurance. My folks cannot. They paid into this fund. I say let us pay 
it back. What the gentleman from California will not tell you is the 
folks who benefit the most on this tax bill do not care if we do not 
repay $165 million to military retirees because that is not what they 
are counting on to live. But the folks I represent did earn that money. 
I say let us pay them back.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from North 
Carolina (Mr. Coble).
  Mr. COBLE. Mr. Speaker, what have the Republicans done for Americans. 
We reformed welfare, reduced capital gains tax. We have removed the 
earnings cap that penalized working seniors. We tried to repeal the 
estate tax and the marriage penalty; President Clinton rejected those 
proposals, however.
  Mr. Speaker, today we say to American taxpayers, you earned it, you 
will get to keep more of it. Fairness and equity at work. Many of my 
Democrat colleagues, and I do not say this critically, promote a big, 
bloated Federal Government. Many of my Republican colleagues, 
conversely, encourage the maintenance of a small, lean Federal 
Government thereby freeing up more money for taxpayers. Yes, the debt 
has stopped being ignored. The debt will continue to be paid down 
gradually, but we are not turning a deaf ear or a blind eye to the 
American taxpayer who earned it in the first place. American taxpayers, 
this is a good day for you. This is a victory for you.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Maryland (Mr. Cardin).
  Mr. CARDIN. Mr. Speaker, there are many reasons to vote against this 
bill. First, the numbers do not add up. The bill is much more expensive 
than advertised. I hear my colleagues say that all taxpayers will 
benefit. We know unless we fix the alternative minimum tax, that is not 
true, the bill is going to cost more money. It is based upon 10-year 
projected surpluses. CBO has never been able to project a surplus 2 
years accurately let alone 10 years accurately. The surplus could be 
$2.5 trillion less than we are advertising.
  We know that the passage of this bill will make it much more 
difficult for us to deal with Social Security, Medicare, prescription 
drugs, paying down our national debt and investing in education.
  This bill violates our own budget rules. Section 303 of the Budget 
Act says we are supposed to have a budget before we bring up any 
revenue bill. The Committee on Rules waived that budget violation. 
Section 311 of the Budget Act says all tax bills have to be within the 
existing budget. This violates that budget rule.
  Then we are trying to work in a bipartisan way. I heard the President 
over and over again say let us work together. One would think the first 
thing we would want to do is work out a bipartisan budget instead of 
bringing forward piecemeal tax bills. This is not a good sign for us 
working together in a productive way. This bill is reckless. This bill 
is wrong, and I encourage my colleagues to vote against it.
  Mr. THOMAS. Mr. Speaker, I think a good sign to the American taxpayer 
would be voting tax relief.
  Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. 
Herger), a member of the Committee on Ways and Means.
  Mr. HERGER. Mr. Speaker, I rise in support of H.R. 3, the Economic 
Growth and Tax Relief Act of 2001. This legislation will provide real 
tax relief for American families at a time when it is urgently needed. 
Simply put, Americans are overtaxed considering

[[Page H767]]

that Americans today face a higher tax burden than they have at any 
other time since World War II. In fact, on average families today pay 
more in taxes than they spend on food, clothing and shelter combined.
  Once fully phased in, President Bush's plan will enable the typical 
family of four to keep at least $1,600 more of their own money. This is 
real help for families trying to make ends meet. $1,600 will pay the 
average mortgage for almost 2 months. This relief will pay for a year's 
tuition at a community college or the cost of gasoline for two cars for 
a year.
  In my home State of California, families will be able to use their 
tax refund to help cope with our State's high energy costs.
  Let us be clear. If we leave the tax surplus in Washington, it will 
be spent on bigger government. Americans have been overcharged, and it 
is time to give them their refund.

                              {time}  1430

  The legislation before us is a critical first step in this process. I 
urge my colleagues to support this legislation.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman 
from New York (Ms. Velazquez), the senior Democrat on the Committee on 
Small Business.
  Ms. VELAZQUEZ. Mr. Speaker, I rise today in strong opposition to the 
President's tax plan.
  My colleagues, we are here today to talk about tax cuts, but let us 
spend a little time examining how the President is going to pay for 
this tax cut. The President says his budget will increase access to 
capital and expand opportunities for small businesses throughout 
America. But let us be clear. This tax proposal is paid for on the 
backs of this Nation's small businesses.
  To pay for what we are voting on today, the President's budget tacks 
on exorbitant fees for SBA loans that increase the costs on small 
business owners by up to $2,400 for each loan and $7,000 over the life 
of the average loan. Ask any small business owner and they will tell 
you that ``fee'' is code word for ``tax.''
  But small businesses needing access to capital are not only the only 
ones being taxed. To add insult to injury, the President's budget 
proposal goes after those small businesses that have their businesses 
destroyed through a natural disaster. Many of the Members of this body 
have seen the effects of natural disasters. The assistance provided 
through disaster loans gives hope for small businesses. But the 
President's budget effectively kicks them when they are down by forcing 
them to pay an additional $7,000, making it impossible for them to ever 
rebuild their businesses.
  I ask and I urge the Members to vote ``no'' on this ill-conceived tax 
plan.
  Mr. THOMAS. Mr. Speaker, may I inquire about the time remaining on 
each side.
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from California 
(Mr. Thomas) has 17 minutes remaining, and the gentleman from New York 
(Mr. Rangel) has 18\1/2\ minutes remaining.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Wisconsin (Mr. Kleczka), a senior member of the Committee on Ways and 
Means.
  Mr. KLECZKA. Mr. Speaker, the question before the House today is not 
whether or not we should have a tax cut; the question is what size 
should a tax cut be.
  This meager little 7-page bill before us has a price tag of almost $1 
trillion. Well, that is fine, but I ask my colleagues, is the $1 
trillion here today? And the answer is no. That is a 10-year 
projection. So what we are in essence doing is committing money today 
that we think and hope and pray will come to Washington in the years 
2006, 2009, 2011.
  How many of my colleagues would plan a vacation based on a 10-year 
weather forecast? Would they reserve the hotel room? Would they buy the 
airplane ticket because they were told that on a particular week or day 
in the year 2009 it is going to be good weather? We would all think 
that is sheer nonsense. Well, my friends, that is what we are doing 
today.
  So the Democrats are saying, let us go slower, and if in the year 
2006 the surpluses, the projectors, the crystal ball is right, we will 
cut taxes again. We did this only 20 years ago. A similar Congress with 
a Republican President cut taxes. And what happened to the country? We 
ballooned the national debt from $1 trillion to almost $4 trillion. So 
what I see happening today is deja vu.
  We have not paid off the old national debt. In fact, I saw a friend 
of mine at the airport and he said, Jerry, vote to send my money. I 
want my money back. And, I said, I am going to do that. But, my friend, 
what should I do about your national debt, totaling $12,500?
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume to 
merely respond that someone once said that everyone talks about the 
weather, but no one can do anything about it. This is tax reduction. We 
can do something about it. We can vote aye on H.R. 3.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from Connecticut 
(Mrs. Johnson), a member of the committee.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for 
yielding me this time, and I rise in strong support of H.R. 3.
  The time is right. The time is now to give hard-working Americans 
substantial tax relief. It simply amazes me that Americans spend more 
in taxes than they spend on food, clothing, and housing combined. The 
tax burden on ordinary working people in today's America is higher than 
it has been at any time since World War II, and the average household 
pays two and a half times more in taxes than it paid in 1985. This is 
unacceptable. It is unfair. It is just plain outright wrong.
  Let us look at what is happening to those tax dollars that they are 
pouring into Washington. For one thing, they are building up a surplus 
faster than at any time in our history. Just yesterday, our Secretary 
of the Treasury said that right now, this month of March, our surplus 
is $75 billion. A year ago, in that economic year, at the same time, it 
was only $40 billion. So in spite of the leveling off of the economy, 
the surplus is growing more rapidly now than it was a year ago. The 
surplus dollars are our taxes. They are just the fruit of the hard 
labor of the American people.
  We can reduce the debt; pay it right down. We can spend on our 
priorities like education and health care; and, yes, we can and must 
reduce people's taxes. It is their money. They deserve a portion of it 
back, and they deserve that today.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Green).
  (Mr. GREEN of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. GREEN of Texas. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  Despite our President's promises to end the partisan tenor in 
Washington, our congressional Republicans continue to use the same old 
tactics. This does not match the procedure the President stated as his 
goal. For the last 2 days, Congress has debated two extremely divisive 
issues. Yesterday, after 1 hour, we undid job-safety standards we had 
been working on for 10 years; and today we are considering a tax bill 
that could wipe out the current surplus and our effort to reduce our $5 
trillion national debt.
  What is worse, we are doing this without a budget. We do not know 
what else we are doing with the people's money. We do not have any 
contingency funds. We are just racing around this process with the hope 
that when we are finished we will still have some money left over.
  We should have a budget in place before we start either spending or 
cutting revenue. We need to protect Medicare, Social Security, we need 
to pay down the debt, and we need to make sure there is money for our 
children's education, health care costs and energy bills. We can cut 
taxes, but we need to look at it responsibly, Mr. Speaker.
  I support a broad and even retroactive tax cut. I do not want our 
citizens too overburdened by a tax system any more than our Republican 
colleagues do, but we know the priorities of our citizens is not 
immediately to have a tax cut.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio 
(Mr. Portman), a valuable member of the Committee on Ways and Means.

[[Page H768]]

  Mr. PORTMAN. Mr. Speaker, I thank the chairman for yielding me this 
time, and I applaud him for this tax bill, which is a great tax relief 
effort; and I will be strongly supportive.
  I want to just respond briefly to what my colleague from Texas said. 
I have never seen any President, Republican or Democrat, reach out so 
much to the other side. I look at some of my Democrat colleagues over 
here, who have been down to the White House with me to meet with the 
President, and I know they have been down there without me too, so he 
has reached out. He has tried to bring Democrats and Republicans 
together, and he has put together, with the gentleman from California 
(Mr. Thomas) and the Committee on Ways and Means, a very responsible 
bill here.
  First of all, it fits within the budget. The President outlined the 
budget last week. We are protecting Social Security and Medicare as we 
never have before. For over 30 years, we raided that trust fund. We are 
not doing that. We are protecting Social Security and Medicare. We are 
paying down the debt in a way we never have before. We are paying down 
more debt in his budget than we ever have in the history of this 
country. In fact, we are going to pay down all the available debt. So I 
do not know what people are talking about in terms of the debt.
  After all that, we are going to have some spending increases in 
places like education and the military, and still there is room for tax 
relief for the hard-working American people who created every dime of 
this big surplus we have.
  People are overtaxed. We just heard earlier people spend more on 
taxes now than they do on food, shelter, and clothing combined. We have 
the highest tax burden since World War II. Taxpayers in Ohio need some 
relief. I know they do. And they ought to get it.
  Finally, I want to say that we need to do this for the economy, even 
if it did not fit in the budget so neatly, even if taxpayers were not 
so overburdened with taxation. Do any of us want to see us go into a 
recession? Every economist will tell us that tax relief is going to 
help the economy. It did when President John Kennedy passed tax relief, 
which incidentally was much larger than this tax relief. This is about 
half the size of John Kennedy's tax relief. When Ronald Reagan did it 
again in 1981, and incidentally it was a lot more than this tax relief, 
it was about three times higher than this tax relief, it helped the 
economy.
  We can disagree on the impact precisely, whether it will help a lot 
or a little; but we know it will help the economy. In Ohio, people are 
talking about layoffs. Around the country all the economic data is very 
troubling. We have to do this tax cut to give this economy a boost, to 
be sure we can keep the good jobs we have, and expand the economy and 
continue the prosperity this country has enjoyed over the last decade.
  Vote for this bill. It is good tax policy, it fits in the budget, 
people need it, and it is necessary for the economy.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may need to 
just advise my colleagues that the House rules say that the House has 
to have a budget, not the White House. That is the House of 
Representatives. And that we do not have.
  Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from Florida 
(Mrs. Thurman), a member of the Committee on Ways and Means.
  Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, America's families decide what they can spend based on 
their yearly income and not 10 years out. Should we in the people's 
House act differently? No. Congress has no idea how it will meet our 
national priorities, Medicare, prescription drugs, education, tax cuts 
and more, because we do not have our national family's budget planned.
  But the House is willing to jeopardize all of these priorities if the 
projections are wrong. If a family's projections are wrong, they must 
dig into their savings or take out loans. If our projections are wrong, 
then Congress will have to take out loans or use our savings, Social 
Security and Medicare.
  Quite frankly, I do not know about my colleagues, but I do not want 
to go back to the time when interest rates were 18 percent, when 
working families could not afford to buy homes, when unemployment was 
high and underemployment kept workers at low wages. I think it is time 
for prudence to guide us.
  I think we should first look at the country and give us a real honest 
and responsible budget with tax cuts, just like we did in 1997. I do 
not think that is too much to ask for.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Camp), a member of the committee.
  Mr. CAMP. Mr. Speaker, I thank the chairman for yielding me this 
time.
  Over the next 10 years, the Federal Government will collect more 
money than it needs to operate. Even after setting aside money to 
protect Social Security and Medicare, the government will collect much 
more than it needs. If that money is left in Washington, there is no 
doubt that it will be spent, when in all fairness it should be returned 
to the American people.
  Today, the average American family pays more in taxes than on food, 
clothing, and shelter combined. Every dollar that passes through the 
taxpayers' hands on its way to Washington is a dollar that could be 
saved for a child's education, used for necessary living expenses or 
household repairs. In my district in Michigan, I know these dollars 
could be used to help with the high cost of gasoline and heating fuel.
  High taxes are not only a tax on the ability to create wealth for 
working people, they are a tax on opportunity itself; the opportunity 
for Americans to determine their own destiny, make their own choices, 
and keep more of what they have worked so hard to earn. These values 
are the essence of democracy itself. It is the people's money. They 
worked hard for it, and they deserve it. They deserve a refund.
  Today, we have a great opportunity. It has been 20 years, since 
Ronald Reagan was a new President, to see any significant Federal tax 
relief. Let us vote to give the American people a refund.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Texas (Mr. Doggett), a member of the Committee on Ways and Means.

                              {time}  1445

  Mr. DOGGETT. Mr. Speaker, the notion that this tax bill will correct 
the economic slowdown is truly a fantasy. This proposal was concocted 
during last year's Republican campaign primaries. It was not developed 
during hard times, and it is certainly not designed for hard times. The 
only reason that its supporters seem preoccupied with the thought of 
recession is that they cannot sell this distorted tax cut any other 
way.
  This year, the daily benefit to the typical American family of this 
tax bill will be less than the cost of one good cup of coffee. That is 
pretty wimpy help when you get right down to it. And if your family 
does not want to share a cup of coffee, you can use your big tax 
savings to buy a can of beans every day. Or, down in Texas, black-eyed 
peas, with a few pennies to spare. And not just any beans, you can get 
Bush's Best black-eyed peas or beans. In fact, if they have got coupons 
at the grocery store, you can probably get a couple of cans of beans so 
everybody will have extra helpings every day as a result of this Bush's 
Beans tax cut.
  For the average American family, it is not $1,600. This year this is 
the Bush's Best Beans tax cut. And that is all that it amounts to. But 
while you get so very little immediate tax relief, over time, over 10 
years, the wealthiest Americans get a huge bonanza of benefits out of 
this bill. The disaster that will occur to Social Security and our 
children's educational opportunities is a very, very serious one, if we 
approve this bill without ensuring that it can fit within an overall 
balanced budget. I am for all the tax relief that fiscal sanity will 
permit, but even the Republican economists have made it clear that this 
Bush tax cut is not about the economy, it is about overpromising to the 
privileged at campaign time.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  I anxiously await creating a larger tax cut so the gentleman can add 
to the canned beans something he is quite familiar with, canned ham.
  Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman 
from Illinois (Mr. Crane), the senior member of the Committee on Ways 
and Means.

[[Page H769]]

  (Mr. CRANE asked and was given permission to revise and extend his 
remarks.)
  Mr. CRANE. Mr. Speaker, I rise in strong support of the Economic 
Growth and Tax Relief Act of 2001. When Governor Bush released his tax 
relief proposal during the campaign with tax reductions as its 
centerpiece, I knew we had the right program at the right time. I 
congratulate the gentleman from California (Mr. Thomas) for moving the 
rate reductions so quickly through the Committee on Ways and Means. I 
urge my colleagues to support it, and I urge the Senate to pass the 
same measure at the earliest possible occasion.
  I know many of our friends on the other side of the aisle are 
concerned that we have moved this bill so quickly. Some, like my friend 
the gentleman from New York (Mr. Rangel), have said we should wait 
until we have a budget resolution. I respectfully disagree. There is no 
question the surplus projections will permit the size of tax cut before 
us without endangering Social Security or Medicare and without 
endangering our other priorities, including debt reduction. The only 
information a budget resolution would provide us is how much additional 
tax relief the Congress can provide this year.
  I also believe it is imperative that we pass this bill without delay. 
We must act quickly to build credibility with the American people that 
this Congress will make good on the President's promise to cut taxes. 
We have experienced a high degree of gridlock in recent years. The 
American people are waiting to see if President Bush can work with the 
Congress to enact important legislation. Nowhere is this more true than 
with respect to tax relief. We have talked about major tax relief for 
many years, with little to show for it because of President Clinton's 
opposition. The American people, naturally enough, are skeptical that 
we will really give them the tax relief that President Bush has 
promised.
  With our economy struggling, timely tax relief is exactly the right 
complement to the interest rate cuts made by the Federal Reserve in 
recent weeks. But the real effect of these cuts is not that it puts 
cash in people's pockets today but that it promises to reduce their 
taxes tomorrow. It is the expectation of lower tax rates that alters 
decisions to invest and work today that increases economic activity 
today and tomorrow. Incentive effects like these, which are the real 
engine of a tax policy that strengthens the economy, are forward 
looking. But for these incentive effects to take hold, taxpayers must 
have some confidence that the tax cuts will be enacted. And that is why 
we must act so quickly, to build confidence in the minds of the 
taxpayers that we will enact the promised tax relief, so that they can 
build these lower tax rates into their plans, so that the economy will 
strengthen more rapidly.
  I urge my colleagues to support the bill.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
California (Ms. Pelosi), a member of the Committee on Appropriations.
  Ms. PELOSI. I thank the ranking member for yielding me this time.
  Mr. Speaker, today the Republican majority rises to a new level of 
recklessness and irresponsibility by proposing a tax cut which benefits 
the wealthiest Americans, giving 44 percent of this tax cut to the 
highest 1 percent of our country. And who pays for this gift to the 
richest Americans? America's working families. We all know that the 
biggest and best tax cut is low interest rates. Low interest rates on 
our home payments, car payments, mortgage payments, credit card 
payments. If we instead would pay down the debt instead of giving this 
gift to America's wealthiest, we would be able to enable America's 
working families to have the best tax cut of all.
  We do not have the surplus Members are talking about here. First of 
all, we are talking about a tax cut based on a budget we have not seen, 
on a surplus we cannot guarantee, at a time when we have unmet needs in 
our country. We have unmet needs in education, in prescription drug 
benefits. Why should our children and our seniors pay for this tax cut 
to the wealthiest? I urge our colleagues to vote no.
  Mr. THOMAS. Mr. Speaker, it is with great pleasure that I yield 2 
minutes to the gentleman from Pennsylvania (Mr. English), a member of 
the Committee on Ways and Means.
  Mr. ENGLISH. Mr. Speaker, I think the time has come for candor. We 
need to recognize that America is experiencing a slowdown. After we 
have seen the smoke clear from last year's election campaign, it became 
increasingly obvious that the economy was not doing as well as some had 
claimed. And in the manufacturing sector that makes up so much of the 
economy of my district, we are clearly experiencing a recession. We 
have an opportunity to move forward right now and change those 
dynamics. But the only way we can do it is by recognizing that in this 
background, we are imposing the heaviest tax burden in peacetime ever 
on the American economy, and we need to recognize that if we are going 
into a recession, the last thing on earth we want to do is run a huge 
surplus.
  Our tax bill would address that issue. Our tax bill would stimulate 
the economy, lower the tax burden and encourage growth, savings and 
investment.
  A recent study by the Heritage Foundation of H.R. 3 suggests that 
this bill would clearly increase economic growth, increase investment, 
increase savings, increase family income and over 5 years create 
500,000 new jobs. Now, our opponents are making phony procedural 
arguments against the bill and using strange numbers. But the fact is 
they want to spend the money. We want to give it back to the American 
public so it can stimulate the economy and get our economy back on a 
growth track. There is nothing more urgent facing this Congress than 
the right kind of economic policy. We should act swiftly to pass this 
tax cut and send the resources back to the economy.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Iowa 
(Mr. Boswell).
  (Mr. BOSWELL asked and was given permission to revise and extend his 
remarks.)
  Mr. BOSWELL. Mr. Speaker, I will recall again, if I could, for all of 
us that the President came up to Nemacolin here a few weeks ago and he 
shared with us and we appreciated it very, very much. We asked him 
there, can we see a budget? And he said yes. And that has come forth. 
None of us expect that to be a perfect document. We have the gentleman 
from Iowa (Mr. Nussle) and the gentleman from South Carolina (Mr. 
Spratt) to work on that. We would like to see what they will produce 
and come forward with.
  So I am wondering, is this a criticism, what we are doing without a 
budget, is this a criticism of the President's ability to lead or is 
this a criticism of the folks to follow? We have got our work to do. We 
have not done it. Common sense would tell us we would not expect to do 
this with a business or a family. We have heard those comments made 
several times. We would not go ahead and do something to our family and 
plan a vacation and not have kids to have their shoes for school or 
whatever. We would not do that. Let us not gamble on our future. We do 
not have to. We have got a better situation. We do not have to do that.
  A little bit ago, someone referred to 1981. We do not have the 
luxuries of 1981. We do not have a $1 trillion debt. We have got $5.7 
trillion. We ought to deal with it.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Wisconsin (Mr. Ryan), one of the newer members of the 
Committee on Ways and Means.
  Mr. RYAN of Wisconsin. Mr. Speaker, I thank the chairman for yielding 
me this time. I have been listening to this debate with a lot of 
wonder. I am a newer member to the committee and a newer Member to 
Congress. It is amazing to me the excuses we are hearing to further 
separate people from their own money. We hear that this tax cut is just 
too big, it is irresponsible, we cannot handle it. I refer Members to 
this chart which shows that this is six cents on the dollar, six cents 
on the dollar that every American taxpayer is sending to Washington 
over the next 10 years. $1.6 trillion out of $28 trillion.
  More importantly, what is this all about? People are overpaying their 
taxes. Everybody who pays income taxes are overpaying their income 
taxes. That is why we are trying to

[[Page H770]]

pass this now. I hear this bizarre excuse that the process is wrong, 
that we should do this bill in October, not in March. I encourage 
Members of Congress to take a look at this chart. This was the cover of 
Newsweek not too long ago: ``Laid Off, How Safe Is Your Job?'' In the 
First District of Wisconsin, we are losing jobs by the thousands. We do 
not have time to wait to give people money back in their paychecks. 
Energy costs, job rates, they are chewing up the paycheck of working 
Americans. We are trying the highest tax burden we have in the 
peacetime history of this Nation.
  It is time, it is more than time, that as people overpay their taxes, 
especially after we are paying off the debt and protecting Social 
Security and Medicare, as people continue to overpay their taxes, we 
give them some of their money back. That is what we are doing today. 
All of these excuses are other attempts to further separate people from 
their own money as they overpay their taxes, so, guess what, they can 
spend that money here in Washington.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I came here today to vote for an across-
the-board tax cut, but the tax cut that I support must be fair, it must 
be responsible, and it must ensure that this country pays down its 
national debt. Sadly, this tax bill does none of these things.
  When my constituents in southern Nevada sit down to figure out how 
much of their paychecks they can afford to spend, they know better than 
to spend money they do not have, or money that they need to pay their 
bills, or money that they might earn in the future. Unfortunately, this 
Congress has not learned these simple lessons. We are getting ready to 
pass a very large tax cut. How will this tax cut affect our education 
system, our seniors, our prescription medication plan, our veterans, 
our military? We do not know, because we have not got a budget yet.
  I want to pass a large tax cut but to do so without a budget, without 
protecting Social Security and Medicare, without paying off our 
national debt is irresponsible and inappropriate. We should be here 
voting on a bipartisan bill that fits our budget and helps American 
families. We are not. We are attempting to ram something through 
without hearings, without input, without reasoning.
  It is very disappointing, Mr. Speaker. I cannot condone this process, 
and I am not going to be a party to it.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from North 
Carolina (Mr. Price).
  Mr. PRICE of North Carolina. Mr. Speaker, like most Members of this 
body, I support tax relief. But today we are debating this bill in 
clear violation of the budget law which states, quote, the concurrent 
resolution on the budget must be adopted before budget-related 
legislation is considered.
  This body is in violation of sound budget procedure, and we are in 
violation of common sense. Who among us would dream of building a house 
without a blueprint? That is what we are being asked to do: to shout 
through a tax cut costing $1 trillion on the way to $2 trillion, 
benefiting mainly the richest 5 percent of taxpayers, before we have a 
budget resolution or a detailed budget proposal from the 
administration.
  With this tax bill, we would bet the store on shaky surplus 
projections, more than two-thirds of which are more than 5 years away. 
If you need any lessons on the unpredictability of projections and 
forecasts, just ask the school children in my district about the snow 
day they were promised last Monday!
  This bill would compromise our ability to pay off the national debt. 
And it would make it impossible to meet the obligations both parties 
have made without a high and unacceptable risk of deficit spending.
  This is a case of putting the cart before the horse if there ever was 
one. Vote no.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Maine 
(Mr. Allen).
  Mr. ALLEN. Mr. Speaker, Abraham Lincoln called on the better angels 
of our nature. President Franklin Roosevelt asked us to set fear aside. 
President Kennedy asked for sacrifices to enhance the common good. But 
the rallying cry of the Bush administration is, ``It's not the 
government's money, it's your money.'' That is a shriveled-up vision of 
what the American people care about. We are better than that. The 
American people want and deserve lower taxes, but not a cut so large 
that seniors still cannot afford their drugs, our kids are stuck in 
inadequate schools, and baby boomers lose benefits under Social 
Security and Medicare. This Republican tax cut is a clarion call for 
more spending on luxury goods by the wealthiest Americans.

                              {time}  1500

  To those seniors who cannot afford their prescription drugs, this 
bill says forget it, they are on their own. To those students, teachers 
and parents who know that our schools need full funding of special 
education, this bill says, forget it, they are not a high priority.
  To the baby-boom generation not far from Medicare and Social 
Security, this bill says forget any help from general revenues any time 
soon.
  Support the Democratic alternative.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am just a little bit confused now. I thought all we 
were giving was a can of beans and now we are depriving virtually every 
American of a significant portion of their share of the American pie. I 
just really wish my colleagues on the other side would get together on 
their side in terms of which argument it is going to be.
  Mr. RANGEL. Mr. Speaker, will the gentleman yield? It is as clear as 
it could be.
  Mr. THOMAS. If the gentleman wants to yield on his time I would be 
more than willing to do that.
  Mr. RANGEL. No, because I think it is very clear what we are doing. 
The gentleman is making it cloudy.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Kentucky (Mr. Lewis), a valued member of the committee.
  Mr. LEWIS of Kentucky. Mr. Speaker, in the true spirit of 
bipartisanship, I want to be as partisan as my colleagues across the 
aisle. There they go again. They say they want tax relief, but actions 
speak louder than words. Their history: Big spending, big taxes, big 
government, and they are fighting with all their heart, mind, soul and 
body to stop tax relief. That is the bottom line.
  The sad part about this is that the President offered a hand across 
the aisle in a true bipartisan spirit for their help to give the 
American people a refund on their money. What did he get in return? A 
partisan slap in the face.
  I think that beyond a shadow of a doubt what has been displayed here 
today with the Democratic dilatory tactics, the American people can see 
what the Democrats are all about. They have never seen a tax cut that 
they like. They have never seen a tax increase that they have not 
liked. They have never seen a big government spending bill that they 
would not vote for.
  Mr. Speaker, let us get the money, the tax money, out of Washington 
and in the pockets of the American people.
  Families need help, not Washington bureaucrats. If the Democrats 
refuse to help and Republicans have to do it alone, so be it.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Arkansas (Mr. Berry).
  Mr. BERRY. Mr. Speaker, I want to thank the distinguished ranking 
member, the gentleman from New York (Mr. Rangel), for yielding me this 
time.
  Mr. Speaker, I have to say if we get any more bipartisan than we are 
here today, it is going to be an absolute miracle. We will have to 
remove the center aisle.
  We favor tax cuts, but we do not favor a bigger debt. We are not in 
favor of running up the debt another $5.7 trillion. We are not in favor 
of our children having to pay off this debt. We are not in favor of not 
having a budget, not having a spending plan that will protect our 
children and protect Social Security and Medicare like both parties 
have over and over promised to do; provide an education for our 
children; do a better job for our national defense; take care of our 
farmers and our agricultural industry in this country and provide 
better infrastructure.

[[Page H771]]

  We all know we have to do that to be a successful Nation, and at the 
same time we can have these tax cuts but we need to have a budget 
first. This is absolutely ridiculous.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Meehan).
  Mr. MEEHAN. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me this time.
  Mr. Speaker, we have an historic opportunity to pay down the debt, 
cut taxes substantially for middle-class and working families, provide 
a Medicare prescription drug benefit for seniors and invest in the 
children of our country in education. Instead, we are snatching 
deficits from the jaws of surpluses.
  Families watching this debate across America have to be scratching 
their heads. When they consider making major financial commitments, 
they first sit down at their kitchen tables with a pad and a calculator 
and see if they can afford it. When they cannot afford to repay their 
debts, they pay down those debts before using the money to buy new 
goodies. But some in this body, I guess, know better than the American 
people, because today we are passing a trillion dollar tax cut in a 
budget vacuum, and we are making excuses about why we cannot pay down 
the debt. Only in this Congress do we strap on a blindfold before 
making major fiscal policy decisions.
  We can do better than this, and the American people know it. I urge a 
no vote on this bill.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Texas (Mr. Reyes).
  Mr. REYES. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me this time.
  Mr. Speaker, it has been said that those that refuse to learn from 
history are doomed to repeat their mistakes. I want to say that I 
support a fair, reasonable and affordable tax cut; but I cannot support 
this proposal because we have had no hearings; there is no budget; and 
there have been no opportunities for us to express our shortcomings 
with this proposal.
  I want to also illustrate that if we are using the Texas model, and 
this is where history comes in, and President Bush has said over and 
over again he is using the Texas model, I want to point out that a 
Democrat and a Republican State Senator have said the following: 
Senator Chris Harris, Republican, said, we made tax cuts because we 
thought we had this huge surplus. I might have voted a little 
differently on all of these tax cuts had I realized that we were only 
funding 23 months of these programs.
  A Democratic Senator said, we should have taken a harder look at the 
tax cuts. We did not look down the road and so now we find ourselves, 
as a result of these budget priorities, in a difficult hole.
  This is what has happened to Texas because of two enormous tax cuts 
that then-Governor Bush proposed.
  When he was asked about this on the campaign trail, then-Governor 
Bush said, I hope I am not here to deal with it.
  Well, guess what? Texas is dealing with this hole today, a deficit 
that is as red as my tie. It is important that we not repeat the 
mistakes of the past.
  I think it is more important that we realize that we must have a 
sensible, affordable tax cut proposal and not my way or the highway 
proposal.
  I hope we do not repeat history again.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Collins), a member of the Committee on Ways and Means.
  Mr. COLLINS. Mr. Speaker, for 8 long years I have waited to tell the 
people of Georgia that the President of the United States has sent a 
bill to Congress which will reduce the tax burden on every taxpayer in 
America. That day has come.
  Mr. Speaker, the previous administration was not only taxing 
Americans' wallets but they taxed their patience as well.
  We suffered through 8 years of either tax hikes or so-called targeted 
tax cuts which were awarded to selected Americans who met certain 
criteria, who agreed to jump through certain hoops.
  This Washington-knows-best type of tax policy is ending. Today we are 
considering across-the-board tax relief to all Americans, to all 
taxpayers, of every level so that they can keep more of their earnings 
and spend those earnings as they wish. They can save the money or they 
can spend it. It is their money so it should be their decision and not 
Washington's, Mr. Speaker.
  The same old, usual complaints from those who are pained to see this 
money escape from Washington unspent we are hearing over and over again 
today. They say tax relief is too expensive, but the President's tax 
relief amounts to only 6 percent of all Federal revenues over the next 
10 years.
  They say it is unfair, but what is fairer than returning the 
overpayment of taxation back to the people who paid the taxes in in the 
first place? What is fairer than including the tax relief as part of a 
plan which strengthens defense, improves education and sets aside 
payroll tax dollars for Medicare and Social Security? What is fairer to 
the future generations than passing this relief as part of a plan which 
will allow us to responsibly pay down the publicly held national debt?
  Eight years and coming, Mr. Speaker. Today is the day; now is the 
time to act. I urge a yes vote on this tax reduction bill.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan (Mr. Levin).
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Speaker, the President's tax plan is a gamble. It is a 
risky gamble. It is true, it is the public's money. The Bush plan is 
gambling with the public's money. It is gambling because there is no 
budget, and there is no clear indication what it would mean for 
education, for prescription drugs and others. It is a gamble because it 
would use 75 percent of the projected surplus, 75 percent, and leave 
little else for other things. That is only a projected surplus.
  We have learned in the past how risky those projections are.
  It is a gamble because 1 percent would receive over 40 percent, the 
highest 1 percent in income would receive over 40 percent of this tax 
cut, and they have their own money all ready for a gamble.
  Some gambled in 1981, and it resulted in the highest deficits in the 
history of the world. Our alternative is fiscally responsible. Let us 
pass it.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. Jefferson), a member of the Committee on Ways and Means.
  Mr. JEFFERSON. Mr. Speaker, I just saw a member of our Chamber of 
Commerce from back home who urged me to vote for this bill, and I told 
him it was incredulous to me how a man could fiscally ask that sort of 
question of me, because I reported to him that if he had had a great 
year at his business and could look down the road and see 4 or 5 other 
great years but had a big debt at the bank, what would he do about it? 
Would he send a dividend down to his shareholders or would he pay off 
his debt in advance?
  He had to admit he would pay his debt off because to do anything else 
would be irresponsible.
  This debate is uninformed by the claim that this is the people's 
money. Of course it is, as are all the taxes which are paid by the 
people. Does that mean we send all the taxes back to the people because 
it is their money? Of course, it does not. It means that the folks have 
entrusted us to make some fiscally responsible decisions about the 
expenditure of that money for their government. The money is here to 
support the government, support things that people cannot do by 
themselves that we do collectively. That is the whole idea behind it. 
We are making fiscally imprudent choices, unwise choices for the people 
now, and we are violating the trust of the public in sending back their 
money to them when we need to have our money spent on priorities that 
will meet the needs of the people back home.
  Mr. RANGEL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Rhode Island (Mr. Kennedy).
  (Mr. KENNEDY of Rhode Island asked and was given permission to revise 
and extend his remarks.)
  Mr. KENNEDY of Rhode Island. Mr. Speaker, I rise in strong opposition 
to this Reaganesque, trickle-down tax cut that will not spur the 
economy and will further deficits.
  We are debating here today more than what the IRS's next batch of 
forms will look like.

[[Page H772]]

 President Bush is proposing a major shift in our national priorities. 
The real debate here is over the sort of society we want to have, about 
the degree of responsibility we as a community are prepared to accept--
for each other, and for the future. The question of taxes is merely a 
vehicle for this larger question.
  I believe that the President's tax plan is a betrayal of the rhetoric 
he has used to cloak himself as a moderate. He claims that he is 
determined to leave no child behind, but he will leave millions behind 
if his plan becomes law. He talks about instilling a sense of 
responsibility, but proposes to saddle future generations with 
tremendous deficit. He touts help for working Americans while 
dramatically widening the income gap.
  This bill, and the tax plan of which it is a part, is bad for 
America. I understand the House leadership's desire to pass it as 
quickly as possible, before the American people take a close look.
  Because if they examine it, they will see that it rests on pie-in-
the-sky economic forecasts. No responsible family would commit itself 
to spending patterns based on guesses about its income in ten years, 
and neither should the government.
  They will realize that we have been here before, we have experimented 
with enormous tax cuts with disastrous consequences. The country cannot 
afford a return to the discredited supply-side, trickle-down economics 
of the 1980s.
  They will notice, as the Republicans wish they wouldn't, that the tax 
cuts are appallingly tilted to the wealthy. Our nation has rarely been 
as polarized between rich and poor as it is today, yet the Bush plan 
would direct 43 percent of the tax cuts to people earning more than 
$300,000 per year.
  And they will, I believe, agree that we have higher priorities as a 
nation than unfair, economically suspect tax cuts that will return the 
country to deficits and prevent investment in our people and our 
future.
  To put the choices that we face in context, I'd like to ask you to 
imagine you had a brother. Imagine your brother graduated from college 
and got a good job with a decent salary. But your brother has expensive 
taste. In the years that followed he lived high on the hog. HIs 
earnings weren't enough and he borrowed to keep that lifestyle going.
  At 35, your brother was pretty much maxed out on the credit cards, 
the mortgages, and the car loans. He was swamped with debt and spending 
nearly twenty percent of his income just on the interest.

  So your brother, bless his soul, changed his ways. He tightened his 
belt, reined in his extravagant taste. Over the next eight years, your 
brother was paying down his enormous credit card balances, slowly. 
Although he's a long way from paying off his debt, he's finally started 
bringing in more money than he's spending, by a little.
  Of course, his new approach was not without cost. He has been unable 
to put money away for his kids' education, or save for retirement, or 
pay for needed home repairs. But at least he's now in a position to do 
so in the future.
  And now imagine that your long, lost Aunt Millie has died and left 
him a big pile of dot-com stock options that vest in five to ten years. 
He calls you up, really excited. ``I'm back in the money!'' he says, 
imagining himself at the wheel of a Lexus, already plotting his new 
spending spree.
  How are you going to respond to your brother? He's 43 now. He's spent 
eight years digging himself out of the mountain of debt created during 
his youthful indiscretions. He has been unable to provide adequately 
for his children or invest for the future. But in those stock options, 
he sees a big glittering pot of gold--never mind that you never know 
what the stock market might do.
  So what will you tell him?
  I've belabored this little story enough, but it does illustrate the 
juncture at which our country stands. The choices we make tell a lot 
about our values. This country is your fictional brother, poised to 
head off to Vail. What will we say?
  The language of this debate is tax policy, but the substance of it 
runs much deeper. This debate is about priorities. It is about the sort 
of community we choose to make for ourselves. It is about our young 
children and our elderly parents, about the working poor and the 
uninsured, about creating an America we can be proud of.
  We live in a national community that allows forty-three percent of 
its children to grow up poor enough to qualify for free or reduced 
lunches. Forty million of our citizens go without health insurance. Our 
public education system frequently consigns children to classes of 
thirty or more in crumbling buildings, without textbooks, where 
everyone including the students knows they will not learn what they 
need to know to escape poverty.
  How can we possibly look at our society and conclude that addressing 
poverty and health insurance and education are less important than huge 
tax cuts? If we as a nation do reach that decision, what does it say 
about our American community? What does it say about us?
  This choice is real. President Bush and the majority may try to spin 
it otherwise, but there is not room for both massive tax cuts and plans 
to address needs like health care, education, and Social Security in 
any meaningful way.
  Underlying this new tax-cutting mania is the famous surplus. Let's 
look at that surplus. The Congressional Budget Office recently 
estimated the ten year surplus at five-point-six trillion dollars.
  But nobody, including the CBO, knows what will happen five or ten 
years in the future. If you want proof, just go back to some old CBO 
projections. Only five years ago, the CBO was predicting deficits as 
far as the eye could see. The estimate for fiscal 2000 alone was off by 
almost half a trillion dollars! And that was only four years later. The 
prediction made five years ago for a single year, 2006, differs by 
nearly a trillion dollars from the estimate made this year.
  As you can see, these numbers are not exactly rock solid. The 
estimated surplus is not money in the bank. In fact, more than 70% of 
the surplus that the President proposes to spend is projected in years 
six through ten. But if the CBO's five year projection is off by a 
half-trillion dollars again, there is no surplus.
  So point one is that we are playing with dot-com stock options here. 
We are as reckless as your zany brother if we spend trillions of 
dollars now on the assumption that the ephemeral surplus will 
materialize as predicted.
  It's also important to realize that more than half of the surplus 
predicted by the CBO belongs to the Social Security system and to 
Medicare. We shouldn't spend that money on tax cuts.
  And we need to be prepared for future growth. The CBO estimates and 
the Bush tax plan assume that spending will increase only at the rate 
of inflation. This assumption is unrealistic because the population 
keeps growing. Every year there are more cars on the road, more 
travelers in airports, more students in college, more children eligible 
for Head Start, more kids in our public schools. We need to increase 
spending just to keep up with the increasing demand on government 
services.
  The Bush tax plan ignores these considerations. Not only does it rely 
on untrustworthy numbers, it threatens to dip into Social Security and 
Medicare and it ignores the need for increased spending.
  And nobody in Washington is talking about the ripple effect that this 
will have at the state level. As federal taxes are cut, state and local 
taxes, which are often at least partially tied to the federal tax rate, 
are going to have to be increased to make up the difference. In 
addition, because the federal government will have to cut back even 
further on services, pressure will mount on the states to pick up the 
slack. In a small state like Rhode Island, that prospect is 
particularly ominous.
  So this bill and the Bush tax plan, first, rely on numbers nobody in 
their right mind would count on, and, second, spend even more than 
those numbers estimate to be available. If this sounds eerily familiar, 
that's because it is.
  Like your hypothetical brother, this country has spent the better 
part of two decades trying to put its financial house back in order 
after the massive Reagan tax cuts of 1981. We have watched more and 
more kids wind up in poverty, counted the steady increase in the number 
of uninsured Americans, seen schools deteriorate, pleaded poverty as 
students struggled to keep up with escalating college costs, buried our 
heads in the sand about Social Security and Medicare's coming 
demographic crisis--all in order to slowly, painfully, clean up the 
mess caused by the last giant tax cuts.
  But like your spendthrift brother, George W. Bush and the Republicans 
in Congress can't help themselves. The instant gratification of tax 
cuts overwhelms common sense borne of twenty years' experience.
  We are witnessing the restoration of Reaganomics. The Republicans 
were wrong in the early '80s when Ronald Reagan promised that the huge 
tax cuts would balance the budget by 1984. Instead, we had the biggest 
deficits in history, the accumulation of a 4 trillion dollar debt, and 
higher interest rates. They were wrong again in 1993 when they insisted 
that raising the rates on the wealthiest taxpayers to pay down the 
deficit would cause economic disaster. Bill Clinton and the Democrats 
passed that budget without a single Republican vote and it began the 
biggest economic boom our country has ever seen.
  For most people who lived through the last twenty years, supply-side 
economics has been thoroughly discredited. After the Reagan tax cut 
passed the House in 1981, short term interest rates shot up two full 
points in ninety days. The Dow fell 11 percent in the two months after 
the tax cuts became law. Within a year, four million Americans were out 
of

[[Page H773]]

work and the unemployment rate was in double digits.
  Even David Stockman, who orchestrated the Reagan tax cuts, admitted 
in his 1987 book that the ``fiscal wreckage'' of that time was the 
result of the ``basic assumptions and fiscal architecture of the Reagan 
Revolution itself.''
  It unfortunately appears, however, that George W. Bush missed the 
lesson about the folly of supply-side economics. Not only is he going 
back to the supply-side policies that brought on massive deficits, he 
is advertising this tax cut plan as tonic for the economy. But this is 
just old wine in a new bottle. Long before the warning flags went up 
about the slowdown of the economy, he was saying gargantuan tax cuts 
were needed.
  You can tell his plan is not intended to be an economic stimulus by 
its structure. If you wanted to help the economy now, you would put 
more money in the pockets of working class people, the people who are 
having trouble meeting their bills, as soon as possible. Not only are 
the Bush tax cuts mostly back-loaded, due to take effect six or more 
years down the road, but they are heavily tilted towards the wealthy. 
They are not economic medicine, they are economic poison.

  It is a question of priorities. Are we going to rely on numbers that 
nobody thinks are accurate and then squander the entire surplus that 
might or might not materialize? Are we going to gamble away your future 
in the hopes that the budgetary roulette wheel comes up black? Are we 
going to tell the children on Head Start wait lists, the seniors unable 
to afford prescription drugs, the families made homeless by the lack of 
affordable housing that they have to wait another twenty years? What 
sort of community do we want?
  And if we do cut taxes, we must ask for whom? Under the Bush tax 
plan, 43 percent of the tax savings would go to the wealthiest one 
percent of Americans. That means people earning more than $319,000 are 
receiving a huge windfall. What about working folks, the forty percent 
of our citizens who earn less than $25,000? They get a measly 4.3 
percent of the President's largesse.
  The President touts his big income tax rate cuts, but four out of 
five American workers pay more in payroll taxes than they do in income 
tax. In fact, most workers earning under $35,000 per year don't pay any 
income tax at all. Therefore, a typical family who could really benefit 
from a tax cut is left out. Even the Wall Street Journal, hardly the 
mouthpiece of the left, has written that the affluent stand the most to 
gain from the Bush tax cuts.
  Take a home health aide in Woonsocket, in my district, struggling to 
make ends meet on $13,600 per year or less. The President's helping 
hand to her is a tax cut totaling $42--I hope she doesn't spend it all 
in one place. I know it's not a lot, but that's all that's left after 
giving Bill Gates, Ross Perot, and the rest of the richest one percent 
their average $46,000 tax cut.
  Don't be misled by the $1,600 average tax cut that President Bush 
advertises. Remember, that includes the hundreds of thousands of 
dollars that the Bill Gateses of the world will save. You're not likely 
to see $1,600. Eighty-eight percent of taxpayers--or virtually every 
family making less than six figures--will receive less than that. In 
fact, a quarter of all taxpayers will see zero benefit from the Bush 
tax plan according to the Washington Post.
  Another pillar of the Bush tax plan is the elimination of the estate 
tax, or inheritance tax. This tax is currently paid only by the 
wealthiest two percent of families. If a couple's estate is worth less 
than $1.3 million, they pay no estate tax. In other words, one of the 
Republicans' highest priorities is $50 billion per year in tax relief 
for millionaires.
  By ending the estate tax, the President would be allowing the richest 
Americans to avoid paying any tax ever on over a third of their wealth, 
on average. Over half of the value of the average estate worth more 
than $10 million has never been taxed. A working, single mother here in 
Bristol has to pay tax on every dollar she earns, but the Republicans 
are proposing to let millionaires and billionaires go tax-free on a 
substantial portion of their earnings. Plus, eliminating the estate tax 
is likely to sharply curtail charitable giving, further hurting the 
poor. Some estimate that donations to charity could drop by 90 percent.

  Even provisions that could help working people if done right are 
skewed towards more affluent taxpayers. The Republican plan to 
eliminate the marriage penalty in the last Congress was structured in 
such a way that 89 percent of the benefits would go to those making 
more than $75,000 per year. The increase in the child tax credit the 
President proposes is nonrefundable, which means most working class 
families will not see the benefit of it.
  If you were serious about helping working people, why would you not 
make the child tax credit refundable? A credit against your income 
taxes isn't helpful if, like most working families earning less than 
$35,000, you don't pay income tax.
  Again, it's a question of choices. As MIT Economics Professor and New 
York Times columnist Paul Krugman has written recently, it is not class 
warfare to point out that the Bush tax cut disproportionately benefits 
the very, very affluent. It is, instead, a debate over priorities.
  George W. Bush ran like Bill Clinton but is already governing like 
Ronald Reagan. He talks a good game, but his actions belie his words. 
He trotted out working folks for photo ops, but if those appearances 
had anything to do with his tax plan, he should have been standing 
there with some of his wealthy friends who stand to gain twenty to 
sixty times the families brought in as props.
  The Republicans justify this reverse Robin Hood approach by saying 
that the affluent get the biggest share because they pay the most in 
taxes. Well I say that they also gained the most from this economic 
expansion. The wealthy have already received the upside of the economic 
growth. It's time that the working men and women who made this surplus 
possible saw some of the benefit.
  During the booming '90s, from 1988-89 to 1997-98, the poverty rate in 
Rhode Island increased by 3.9 percent. A far greater percentage of 
Rhode Island children qualify for free and reduced school lunches now 
than at the beginning of the '90s.
  In other words, the benefits of the expansion have gone predominantly 
to the wealthy.
  In fact, it wasn't until halfway through the expansion that regular 
working folks saw their incomes rise at all. And even today, the bottom 
twenty percent is still earning nearly nine percent less in real 
dollars than they did in 1979.
  And now the President is proposing to give 43 percent of a multi-
trillion dollar tax cut to people whose incomes average $900,000 per 
year. The income gap is already the widest it's been in decades. The 
wealth gap is even wider. I want to ask George Bush and the 
Republicans in Congress, how wide must that gap be before tax cuts are 
shared fairly?

  This discussion is not just about the arcane minutiae of the federal 
budget. This discussion is about people's lives. It is about asking 
ourselves what matters most. Are we the kind of people who will cause 
our children to go without, who will blithely blindfold ourselves to 
the needs of the future, to gratify our short-term wants?
  Before we pass any tax cuts, we first must take a long, national look 
in the mirror.
  I look at our society and I am not satisfied. I see a failing 
education system, skyrocketing rents, uninsured children, and critical 
shortages of quality childcare. I see a retirement system that we know 
for a fact will soon require large infusions of cash to maintain the 
status quo. I see millions and millions of our fellow citizens working 
160 hours more per year for less money than they earned a quarter of a 
century ago.
  I see an America with many needs more pressing than massive tax cuts 
for the wealthy.
  Medicare needs a prescription drug benefit. Students need help 
affording college. Children need day care and Head Start programs. Our 
schools need teachers and textbooks. Our workers need health insurance. 
Social Security needs reform. Families need affordable housing.
  A community, like a garden, requires tending. We are finally in a 
position to give our garden some of the water and sunshine so long 
denied. We have labored for years to put our fiscal house in order, so 
that we would be able to do things like responsibly reform Social 
Security before it's too late or help communities build new schools. We 
are in a position to invest for the future, but like a happy-go-lucky 
big spender, the very prospect of money is burning a hole in some 
politicians' pockets.
  Twenty years ago we closed our eyes to hopelessly optimistic economic 
predictions, and allowed an affable President to gamble our future on a 
dubious economic theory that promised us the moon. He told us we could 
afford to eat dessert before dinner, we could get big tax cuts and a 
balanced budget. We made some decisions about priorities that led to 
trillions of dollars in national debt, the biggest deficits in our 
nation's history, more poverty, and fewer federal investments in 
people. Are we going to make those decisions again?
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Hill).
  Mr. HILL. Mr. Speaker, my wife and I taught our three daughters to 
eat their dinner before they could have their desert. What this House 
is doing today is they are trying to have their dessert before they eat 
their dinner.
  Now, the way we eat our dinner here in Congress is we write a budget. 
We sit down and we decide what our priorities are going to be. We 
answer some difficult questions, like how do we balance tax cuts 
against paying down the national debt? How do we balance tax cuts 
against protecting Social Security and Medicare? How do we balance tax 
cuts against supporting the men and

[[Page H774]]

women in our Armed Forces, our farmers, and our veterans? That is what 
budgets are for.
  Mr. Speaker, we are going to get our dessert this year. We are going 
to have a tax cut this year, but we should eat our dinner first. We 
have to figure out how to fit this tax cut into a responsible budget 
framework. Let us pass the budget first, then cut taxes.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the problem is that the Federal Government has been 
eating the American taxpayers' dinner for too long. We would just like 
to give a little of it back.
  Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. 
Brady), a new member of the Committee on Ways and Means.
  Mr. BRADY of Texas. Mr. Speaker, the American people are a lot 
smarter than folks in Washington give them credit for. They know that 
tax cuts do not cause deficit spending; spending causes deficit 
spending.
  They understand that today they are footing the bill for a million 
dollar, two-hole outhouse, that is a million dollars for an outhouse 
the Parks Department recently built. They know that they are footing 
each year $2,000 a fish each year to help some salmon get back to their 
spawning ground. For $2,000, we could put each fish in a first class 
seat and fly them from the mouth of the river and back and still save 
money.

                              {time}  1515

  Common sense says the best way to pay down the debt and to keep these 
surpluses going is to keep our economy strong, and that is what this 
tax relief bill is about.
  We are facing recession, and we are working hard to stay out of it; 
but we know if a recession occurs, that 3 million American families 
will lose their jobs. That is 3 million families that are going to have 
a lot of hurt.
  Now, maybe we cannot save all of those jobs, but we can surely save 
some of them; and there is a good chance we can save a lot of them, and 
we ought to do our very best to do that. I know there is a lot of 
pressure on my Democratic friends to not go along with the President, 
to not work with him; there is a lot of bitterness from the past 
election. But those who will be laid off are not Republicans or 
Democrats, and the small businesses and their employees are not 
Republicans or Democrats, they are Americans. I would ask them to work 
with us to try to save this economy.
  Mr. RANGEL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Texas (Mr. Sandlin) to close debate.
  Mr. SANDLIN. Mr. Speaker, Herbert Hoover said, ``Blessed are the 
young for they shall inherit the national debt.''
  We do not need another Herbert Hoover. Americans deserve tax cuts. We 
can afford tax cuts. We support tax cuts. But it is irresponsible to 
consider a tax bill before we have a budget. Not only is that course 
irresponsible, it is contrary to the law. The Congressional Budget 
Impoundment Control Act of 1974 says that a budget must be enacted 
before consideration of a tax bill. Congress makes laws and expects the 
public to follow the laws. We should do no less in the United States 
Congress.
  Finally, make no mistake about it: across-the-board seems to indicate 
that everyone will share. That is a serious misnomer. Most people 
believe that they will share. The truth is under the Republican plan, 
across-the-board means 44.3 percent of the relief goes to the richest 1 
percent of the people, and that is just not fair.
  Mr. Speaker, I encourage my friends watching in Texas to look at 
their friends to the left and look at their friends to the right, 
behind them and in front of them. They have not seen one person who 
benefits by this plan. Not one person in Texas. We tried this trickle-
down before. Trickle-down dried up at the Red River. Mr. Bush, Senior, 
knew what to call it. He called it voodoo economics. Here we go again.
  Mr. THOMAS. Mr. Speaker, I yield myself the remainder of the time. I 
tell my friend, he probably ought not to use Herbert Hoover as an 
example. That President raised taxes and plunged us into the 
Depression. We are here cutting taxes.
  Mr. Speaker, talk is cheap. We hear talk about the weather, we hear 
excuses about process, we see props like cans of beans. Please, why is 
it so hard for the folks on the other side to say yes? Yes to returning 
a little bit of the tax surplus to those who paid it: hard-working 
Americans. Every taxpayer gets exactly the same tax reduction; no 
matter what my Democratic colleagues say, it is true. It is in these 
seven little pages. It is here. Every American this year gets the same 
reduction.
  Just say yes on H.R. 3 and relieve your pain.
  Mr. BLUMENAUER. Mr. Speaker, the beginning of this Congress has been 
dominated by discussions of President Bush's massive tax cut proposal--
a proposal which, after accounting for the true costs to government, is 
likely to cost close to $2.6 trillion rather than $1.6 trillion over 
the next 10 years.
  It is also the most important issue that we'll face over the next six 
months. Not only will it dominate the news; whether and how much to 
reduce government revenue will also frame every policy debate in 
Congress. The decision will determine our ability to honor our health 
care commitments, protect our environment, educate our children, defend 
our country, or keep our economy strong.
  For many in Washington, cutting taxes has become the popular mantra. 
Gone is concern for the 1997 Balanced Budget Agreement, which 
instituted spending caps to help reduce our national deficit. Now, 
however, Congressional leaders are winking and nodding at those 
unrealistic restrictions and empty past promises, hoping the American 
press and public won't notice.
  Since coming to Congress in 1996, I have based my fiscal policies and 
budget decisions on five principles--principles that continue to guide 
my responses to the current tax cut proposals:
  1. Tax reductions need to be fair. Every Oregonian should be 
positively affected by these tax reductions, not just a selected few. 
The Bush proposal ignores the largest burden for most Americans: 
payroll taxes. Hardworking families who need help the most should have 
their burden reduced as much as those who are the most well off. 
Approximately 146,000 Oregon families are left out.
  2. We must honor our promise to fund Social Security and Medicare. 
These obligations are not diminishing over time; in fact, they are 
growing larger each year, as the baby boom generation retires and 
requires increased medical assistance.
  3. We need to pay down our $6 trillion national debt. This single act 
is the most effective way to lower government spending--and reduce the 
long-term interest costs for American families and business.
  4. We must avoid future funding shortfalls. The robust economy of the 
past few years has lured many states-Kansas, North Carolina, and 
President Bush's own state of Texas, among others--into cutting taxes 
and fees, only to find themselves struggling to fund basic services.
  5. We need to honor the commitments we've made to provide health care 
for our seniors, education for our children, and a cleaner environment.
  Time and again, my constituents tell me that honoring these 
obligations and commitments takes precedence over reduction in taxes.
  Ms. LOFGREN. Mr. Speaker, I have received a lot of advice from my 
constituents about H.R. 3, President Bush's tax cut proposal. Mostly my 
constituents have told me not to vote for this plan, although some have 
urged support. I have listened carefully and read every letter and 
email. I've thought about what people back home have told me. I take 
very seriously my responsibility to act prudently in this matter.
  I have heard President Bush and other proponents of H.R. 3 say that 
the surplus ``belongs to the people'' and that ``the people have 
overpaid'' and ``the people deserve a refund.'' Well what about the 
accumulated national debt? That doesn't belong to some other group of 
people. What that phrase overlooks is that the accumulated national 
debt, over 4 trillion dollars, is also ``the people's national debt.'' 
That debt needs to be paid, and if it is paid, it will be paid off with 
``the people's money''.
  In listening to my constituents, as well as economic experts, I have 
focused on several elements.
  First, there is concern among many that a softening of the economy 
could be countered with a tax reduction that would stimulate consumer 
spending and help counter recessionary trends. I think it is important 
to underscore that the American economy is not in a recession, but it 
is also clear that softening has occurred. In addition to providing 
relief to taxpayers who want and need it, I agree that a tax reduction 
effort might well have a salutary impact.
  To maximize this benefit, the tax cut should be quick, should be 
directed towards those who will spend it but must also avoid deficit 
spending. H.R. 3 falls short in these requirements.

[[Page H775]]

  Second, if we enact a tax reduction plan we must exercise care to 
insure that we avoid returning to the days of deficit spending, a 
phenomenon we have only recently escaped.
  I have focused on the need for fiscal responsibility for the 22 years 
I have served in public office. As a member of the Board of Trustees of 
the San Jose-Evergreen Community College District in the late 1970's, I 
was part of the coalition that reduced administrative costs by more 
than 25%--and put the money into the classrooms. As a member of the 
Santa Clara County Board of Supervisors in the 1980's, I was part of 
the Board majority that cut spending dramatically and balanced the 
county's budget. This earned the county its excellent bond rating and 
saved taxpayers money on interest.
  As a Member of Congress since 1995, 1 have supported policies that 
have helped this country to balance its operating budget and to begin 
to pay down the national debt. I'm proud of that and I believe that 
fiscal responsibility is good for America. Why? Deficit spending eats 
up revenue in interest rates. It leads to inflation, which eats up the 
budgets of families. In fact, some observers have predicted that if the 
Bush tax reduction plan results in a return to deficit spending, that 
most families will end up spending more on increased interest rates 
than they will see in a reduction of tax liability through the plan.
  Finally, we need to make sure that a tax reduction plan, of an amount 
that is consistent with a balanced budget and deficit reduction, is 
constructed in a manner that advances the American principles of 
fairness and equity.
  The Bush plan falls short. It postpones too much of the benefit to 
later years, defeating the effort to stimulate immediate economic 
activity. It directs 43% of the tax reduction benefit to those whose 
annual incomes are over $900,000 a year. I have nothing against those 
with incomes over $900,000 a year. In fact, I think it's terrific that 
we have a country where so many are able to prosper and to grow 
incomes. However, directing so much of the benefit to this income 
bracket is not the best way to stimulate economic activity nor is it 
perceived as equitable by the American people. People who have middle 
class incomes are having a harder go of it than those who have met with 
extraordinary financial success. Finally, there is geographic 
discrimination in this bill.

  Because the economy of Silicon Valley has been so extraordinarily 
successful and because people have worked so hard and productively, 
median incomes are high. This is a wonderful thing. However, costs are 
also high in Silicon Valley. Families with incomes that would seem 
extraordinary in other parts of the country struggle with the costs of 
housing and childcare in Santa Clara County.
  Because of the shortcomings in H.R. 3 to deal with the alternative 
minimum tax, many of my constituents will be denied the benefit of 
provisions of the bill that will help other middle class people. Let me 
give just one example: the increased child deduction is a good thing 
and something I support. Unfortunately, this promised benefit will be 
denied to my constituents whose annual income is $87,800 a year--just 
about the median 'income for the county under this bill. That's not 
fair and it's geographic discrimination.
  I believe that it is wise to enact a tax cut, but I think President 
Bush's plan is not balanced and will damage America. There is broad 
consensus in this Congress that a major overhaul of the estate tax, 
correction of the so-called ``marriage penalty tax'' and increases in 
child deductions should be made. Nobody likes taxes, and many of us 
would like to see further reductions. But reductions have to be in 
harrnony with debt reduction as well as realistic forecasts of 
spending. Many of my constituents have told me that they would prefer 
higher investments in energy research, education and transportation 
than this proposed tax cut.
  That is one of the reasons why it is a terrible mistake (as well as 
violative of the rules of the House of Representatives) to take action 
on this proposed tax bill before we have even discussed, let alone 
adopted, our budget.
  Unfortunately, the manner in which this tax plan has been handled by 
the Republican leadership of the House has precluded the possibility of 
give and take, compromise and a sound consensus bill that would serve 
America well.

         Center on Budget and Policy Priorities, March 2, 2001


     NEW JOINT TAX COMMITTEE ESTIMATES RAISE COST OF BUSH TAX PLAN

     Cost now well over $2 trillion
       New Joint Tax Committee cost estimates of several elements 
     of the Bush tax plan, which were released March 1 in 
     conjunction with House Ways and Means Committee action, show 
     that the cost of the Bush tax cuts is mounting. The Joint Tax 
     Committee estimates find that the cost of the plan's income 
     tax rate reductions exceeds the cost listed in the 
     Administration's budget.
       The Joint Tax Committee estimates also show that the rate 
     reduction in the Bush plan would raise the number of 
     taxpayers subject to the Alternative Minimum Tax to a 
     stunning 36 million by 2011--or about one of every three 
     taxpayers. The Joint Committee found that enactment of the 
     proposed rate reductions would increase the cost of fixing 
     the problems in the AMT by nearly $300 billion over 10 years.
       The budget the Administration issued on February 28 shows 
     that the tax cut would consume $2.0 trillion in projected 
     surpluses. The Administration's estimates show the tax cuts 
     would lose a little more than $1.6 trillion in revenue over 
     10 years and would raise the cost of interest payments on the 
     national debt by nearly $400 billion, for a total cost of 
     $2.0 trillion.
       The cost estimate the Joint Tax Committee released March 1 
     shows that the Bush proposal to reduce the 28 percent, 31 
     percent, 36 percent, and 39.6 percent tax rates would cost 
     $59 billion more over 10 years than the Administration's 
     budget estimates.
       The Joint Tax Committee also provided a cost estimate for 
     the Bush proposal that would create a new 10 percent tax 
     bracket; the estimate includes the effects of the Ways and 
     Means Committee action to accelerate the phase-in of this 
     provision. Primarily because of the faster phase-in, the cost 
     of this provision is $67 billion higher than the cost listed 
     for this provision in the Administration's budget.
       This additional $126 billion in tax reductions, shown by 
     the Joint Tax estimates, results in additional interest costs 
     of $54 billion. This brings the overall added cost to $180 
     billion, raising the cost of the tax cut from $2.0 
     trillion to $2.2 trillion.
       Further increases in cost may occur when the Joint Tax 
     Committee issues its estimates for the cost of other 
     components of the Bush tax plan. A comparison of the estimate 
     of the cost of the Bush plan that the Joint Tax Committee 
     issued last May to the estimates in the Administration's 
     budget suggests the Joint Committee's forthcoming estimate of 
     other aspects of the plan also is likely to exceed the 
     Administration's figures.
     The Joint Tax Committee's shocking AMT estimates
       Another new analysis the Joint Tax Committee released in 
     conjunction with the Ways and Means Committee action finds 
     that the rate reductions the Committee approved would result 
     in 15 million additional taxpayers becoming subject to the 
     Alternative Minimum Tax by 2011. To prevent the Bush tax cut 
     from subjecting these additional 15 million taxpayers to the 
     AMT would require changes in the AMT that, according to the 
     JCT analysis, would cost $292 billion over the next ten 
     years.
       Since the Bush plan fails to address this problem, this 
     nearly $300 billion in added cost is not included in the 
     Administration's estimate of its plan. But this cost 
     eventually will have to be paid; neither party will stand by 
     and allow one of every three taxpayers to be hit with the 
     complexities (and increased tax burdens) of the AMT. The Bush 
     plan thus ultimately entails a cost of an additional nearly 
     $300 billion, plus added interest costs. This raises to more 
     than $2.5 trillion over ten years the likely amount of 
     projected surpluses that ultimately will be consumed if the 
     Bush plan becomes law.
       The Alternative Minimum Tax was intended to prevent high-
     income taxpayers from using a combination of tax breaks that 
     would eliminate most or all of an individual's income tax 
     liability. Taxpayers must pay the larger of either their 
     normal income tax bill or the income tax they would owe under 
     the AMT.
       Because of flaws in the AMT's design, growing numbers of 
     taxpayers will become subject to the AMT unless the problems 
     in the AMT are addressed. According to the new Joint Tax 
     Committee analysis, the number of taxpayers subject to the 
     AMT is expected to rise under current law from 1.5 million 
     taxpayers in 2001 to 20.7 million in 2011.
       The income tax rate cuts in the Bush plan, as reflected in 
     H.R. 3 (the legislation the Ways and Means Committee approved 
     March 1), would further increase the number of people subject 
     to the AMT, because the income taxes these people would owe 
     under the regular income tax would now be lower than what 
     they would owe under the AMT. The Joint Tax Committee 
     estimates show that under the Ways and Means bill, the number 
     of taxpayers affected by the AMT would rise to 35.7 million 
     in 2011. In other words, the bill would result in an 
     additional 15 million taxpayers being thrown into the AMT 
     (i.e., 15 million taxpayers on top of the filers who would 
     become subject to the AMT under current law). Under the Ways 
     and Means bill, approximately one-third of all people who 
     would pay income taxes would be subject to the AMT by 2011.
       The Joint Tax Committee estimates find it would cost $292 
     billion over ten years just to keep these additional 15 
     million taxpayers from becoming subject to the AMT as a 
     result of the Bush tax-rate reductions. This estimate does 
     not reflect the cost of addressing the underlying problems in 
     the AMT that, if not fixed, will push the number of taxpayers 
     subject to the alternative tax from 1.5 million to nearly 21 
     million by 2011 even in the absence of the Bush tax cuts. 
     Fixing this underlying problem will entail additional costs 
     beyond the $292 billion.

[[Page H776]]

     
                                  ____
       Center on Budget and Policy Priorities, February 26, 2001


    IS A LARGE TAX CUT NEEDED TO FORESTALL AN EXPLOSION IN SPENDING?

       Some supporters of a large tax cut this year, such as the 
     tax cut the Bush Administration has proposed, argue that a 
     large tax cut is needed to prevent an explosion of federal 
     spending. They state that the Congressional Budget Office has 
     determined that action by Congress and the last 
     Administration in the final half of 2000 increased federal 
     spending by $561 billion over the next ten years. A $1.6 
     trillion tax cut is needed, this argument goes, or else 
     further spending explosions will occur. There are several 
     problems, however, with the use of these figures to make the 
     case that a spending explosion has begun.
     How much did spending increase last year?
       CBO has reported that actions taken in the last session of 
     Congress increased CBO's estimate of baseline spending on 
     government programs by $434 billion over the next ten years. 
     Since this $434 billion will be used for program expenditures 
     rather than for paying down debt, CBO has estimated that 
     interest payments on the debt will be $118 billion higher. 
     The figure of ``$600 billion in new spending'' that some 
     policymakers have cited as a reason for a large tax cut is 
     reached by adding the $118 billion in interest payments to 
     the $434 billion in projected increased spending, also adding 
     (inappropriately) $9 billion in increased interest costs that 
     CBO says will result from some modest tax cuts enacted last 
     year, and rounding the resulting $561 billion figure up to 
     $600 billion.
       It may be noted that $368 billion of the $434 billion in 
     projected increases in program spending--or 85 percent of the 
     increases in program spending--consist of increases in 
     discretionary spending. The remaining $66 billion includes 
     $28 billion in increased entitlement spending for health care 
     for military retirees, a net of $20 billion in increased 
     Medicare spending as a result of scaling back some Medicare 
     savings provisions enacted in 1997, and $18 billion in 
     increases in spending for other entitlement programs.
     Should all of these costs be considered as spending 
         increases?
       Upon closer examination, a question arises as to whether 
     this $368 billion in discretionary spending should all be 
     regarded as a spending increase. Whether, and to what extent, 
     it constitutes a spending increase depends on the baseline 
     against which the new discretionary spending levels are 
     measured.
       No adjustment for population growth
       The baseline that CBO employs assumes the maintenance of 
     discretionary spending at its level for the preceding fiscal 
     year, adjusted only for inflation. Since the U.S. population 
     increases each year but the CBO baseline contains no 
     adjustment for population growth, the CBO baseline 
     essentially assumes a decline each year in the purchasing 
     power of discretionary programs on a per-person basis. Under 
     the CBO baseline, simply keeping discretionary spending 
     constant in real per capita terms (i.e., keeping it at the 
     same level in its ability to provide goods and services per 
     U.S. resident) is counted as a significant spending increase.
       A number of analysts have argued over the years that a more 
     appropriate baseline for discretionary spending would be one 
     that adjusted for both inflation and population growth. 
     Robert Reischauer, the former CBO director who now heads the 
     Urban Institute, argued (unsuccessfully) when CBO was first 
     etablished that the discretionary spending baseline should 
     account for population growth as well as inflation. In 
     addition, President Bush himself stated on a number of 
     occasions during the presidential campaign that the right way 
     to measure changes in spending in Texas during his tenure as 
     governor was by comparing the actual spending that occurred 
     to what spending would have been if it had kept pace with 
     both inflation and population growth. Were the same approach 
     used here, the magnitude of the increase in discretionary 
     spending that policymakers approved last year would be 
     significantly smaller.
       Spending as a share of the economy to hit half-century low
       Furthermore, when measured as a share of the Gross Domestic 
     Product, federal spending declined this year, despite the 
     spending actions the last session of Congress took. The new 
     CBO report on the budget shows that between fiscal year 2000 
     and fiscal year 2001, federal spending will drop from 18.2 
     percent of GDP to 18.0 percent. The 18.0 percent level for 
     fiscal year 2001 is the lowest level since 1966. The CBO 
     report also projects that federal spending will decline 
     further to 15.1 percent of GDP by 2011, which would be the 
     lowest level since 1951.
       In addition, CBO projects that discretionary spending will 
     remain constant at 6.3 percent of GDP between 2000 and 2001, 
     which is the lowest level ever recorded. (These data go back 
     to 1962.) Under the CBO projections--which include the much-
     touted ``explosion'' of spending--discretionary spending will 
     decline to 5.1 percent of GDP by 2011, a level that would be 
     the lowest by far in at least half a century.
       One wouldn't know from the claims of a spending explosion 
     that federal spending is at its lowest level as a share of 
     GDP in 35 years or that by 2011, it would--under the baseline 
     that includes the $561 billion in added spending reach its 
     lowest share as a percentage of GDP since 1951.
     Defense constituted nearly one-third of spending increase
       A fact not often mentioned by those decrying the ``spending 
     explosion'' is that the spending added in the last session of 
     Congress was disproportionately directed toward defense 
     spending. Defense spending increases accounted for nearly 
     one-third--31 percent--of the $434 billion in spending 
     increases over ten years. Defense spending accounts for 18 
     percent of the federal budget, exclusive of interest 
     payments, so defense's share of the spending increase was 
     nearly twice its share of the budget.
       CBO has estimated that as a result of action in the last 
     session of Congress, defense discretionary spending in the 
     baseline will be $106 billion higher over the next 10 years, 
     while entitlement spending for military health will be $28 
     billion higher. This $134 billion total accounts for 31 
     percent of the $434 billion projected increase in program 
     spending before the increased interest payments are added.
     Conclusion
       Proponents of a large tax cut frequently speak of revenues 
     as being at or near their highest level as a share of GDP 
     since World War II. In discussing trends in federal 
     expenditures, however, tax-cut proponents typically eschew 
     use of a standard that measures federal spending as a share 
     of GDP. They measure trends in discretionary spending against 
     a baseline that assumes reductions in such spending on a real 
     per-capita basis and counts spending levels that keep 
     discretionary spending constant in purchasing power per 
     person as constituting spending increases. These definitions 
     of what constitutes a spending increase underlie arguments 
     that a spending explosion has taken place, arguments that 
     overlook the reality that federal spending is at its lowest 
     level in decades as a share of the economy.
                                  ____


     Center on Budget and Policy Priorities, Revised March 1, 2001


      THE ADMINISTRATION'S BUDGET RESERVE: DO THE NUMBERS ADD UP?

        (By Robert Greenstein, Richard Kogan, and Joel Friedman)

       The budget is said to contain a $842 billion reserve. 
     Closer examination, however, indicates that the numbers 
     underlying the reserve do not add up.
       1. Medicare: The budget fails to set to the side the 
     surpluses in the Medicare Hospital Insurance trust fund and 
     creates a fiction that Medicare has no surpluses and is in 
     deficit. Tables in the budget show that OMB actually projects 
     that the Medicare Hospital Insurance trust will run a $526 
     billion surplus over the next 10 years. The Medicare HI 
     surplus, which policymakers of both parties have voted to set 
     to the side and not to use to finance tax cuts or other 
     programs, amounts to more than half of the so-called 
     ``reserve.''
       In the budget, the administration tries to make this 
     surplus disappear through a clever but misleading budget 
     display. Medicare Hospital Insurance (Part A) is financed by 
     payroll taxes and, to a small degree, by a portion of the 
     income taxes that are collected from the taxation of a 
     portion of the Social Security benefits of higher-income 
     beneficiaries. Medicare Hospital Insurance has its own trust 
     fund. The physician's services part of Medicare (Part B) is 
     funded separately and, unlike Part A, was never intended to 
     be self-financing. One-fourth of its financing of Medicare 
     Part B comes from monthly premiums that beneficiaries pay, 
     but the other three-fourths comes from general revenues. This 
     is how Medicare was designed.
       The administration takes the unprecedented step of adding 
     the total costs of Medicare Parts A and B and then comparing 
     them to Medicare revenues just froom payroll taxes and 
     premiums. Since three-quarters of Medicare Part B is intended 
     to be funded by general revenue, the effect is to make it 
     look like Medicare's costs exceed Medicare's income. The 
     administration then pronounces the Medicare HI surplus as 
     meaningless and claims that Medicare is in deficit so it has 
     no surpluses to save. This serves the politically convenient 
     purpose of helping to justify what otherwise would seem 
     politically unjustifiable--failing to set aside the Medicare 
     HI trust fund surplus and instead using it to fund other 
     items.
       Using this device to claim that Medicare is in deficit is 
     not justifiable. By this logic, all programs funded by 
     general revenues--including the Pentagon, the military 
     pension Program, and the education and health research 
     programs that the administration proposes to expand--are in 
     deficit and thus in need of reform, as is everything in the 
     budget not specifically financed by an earmarked tax.
       By camouflaging the Medicare HI trust fund surplus and 
     artificially making it ``disappear,'' the Administration can 
     turn around and add the $526 billion Medicare HI surplus to 
     the surplus in the rest of government to make it appear as 
     though all of these funds are available to finance the tax 
     cut and other programs. Through this maneuver, the 
     Administration is able to make it look as though there is 
     more room in the budget for its tax cut and to hide the 
     troubling trade-offs the large tax cut creates for the rest 
     of the budget. Ironically, one of those troubling trade-offs 
     is that if the tax cut is enacted, there will be less money 
     available for an adequate Medicare drug benefit and for an 
     infusion of more general revenue into Medicare as part of 
     a Medicare reform package that restores long-term solvency 
     to the program.

[[Page H777]]

       Once the Medicare HI surpluses are set to the side, only 
     $316 billion of the Administration's $842 billion reserve 
     remains.
       2. Inevitable Costs that are Left Out. The budget leaves 
     out a number of inevitable costs. These include:
       Continuing current payments to farmers, at a cost of about 
     $100 billion over 10 years (Table S-11 shows spending for 
     agricultural programs plummeting from $26.1 billion in 2001 
     to $14.9 billion in 2003 and smaller amounts in subsequent 
     years, because of the administration's failure to include the 
     virtually inevitable costs of continuing these farm 
     payments);
       Fixing a well-known problem in the Alternative Minimum Tax 
     so it does not subject millions of middle-class families to 
     the AMT, which entails a cost of approximately $300 billion 
     over 10 years if the Bush tax cut is passed; and
       Extending the expiring tax credits for 10 years (the budget 
     shows the cost of extending most of these credits for only 
     one year), which adds about another $25 billion.
       The more-than-$400 billion in costs just mentioned would 
     also generate additional costs for interest payments on the 
     debt. This would bring these costs to more than $500 billion, 
     which exceeds the $316 billion left in the reserve when the 
     Medicare HI trust fund surplus is set to the side.
       3. Additional Costs the Administration has not specified. 
     The administration's ``helping hand'' prescription drug 
     proposal is supposed to be only a first step; it is limited 
     to low-income seniors. As a candidate, President Bush said 
     this would then be broadened into a drug benefit for other 
     seniors as well. The budget does not include resources that 
     could accommodate a significant drug benefit for middle-
     income seniors.
       The budget also does not include funds for a national 
     missile defense or other defense spending increases that are 
     likely to emerge from the Administration's defense review.
     Conclusion
       The ``reserve'' is a convenient way to avoid providing 
     specifics in a number of areas. It obscures the fact that 
     rather than creating a reserve for unforeseen contingencies, 
     the budget lacks sufficient funds to avoid a return to 
     deficits outside the Social Security and Medicare HI trust 
     funds, unless large cuts in domestic programs--cuts that the 
     Administration does not identify at this time--are enacted.

     Center on Budget and Policy Priorities, Revised March 1, 2001


     THE ADMINISTRATION'S BUDGET: GAPS BETWEEN RHETORIC AND REALITY

        (By Robert Greenstein, Richard Kogan, and Joel Friedman)

       Initial analysis of the Administration's budget suggests 
     substantial differences in key areas between the realities 
     that underlie this budget and the comforting rhetoric 
     surrounding it:
       1. The supposed $842 billion contingency reserve is 
     essentially an illusion.
       First, the reserve is inflated by more than $500 billion 
     through a misleading presentation that camouflages the 
     surpluses in the Medicare Hospital Insurance trust fund, 
     which both houses of Congress voted by nearly unanimous votes 
     last year to set aside and not to use for tax cuts or other 
     programs. The budget artificially makes the Medicare HI 
     surpluses ``disappear'' in order to make the surpluses 
     available for tax cuts and other initiatives appear to be 
     larger than they actually are.
       Second, the ``extra'' funds that constitute the reserve are 
     generated by failing to include in the budget various costs 
     that will inevitably occur, such as the costs of maintaining 
     current payments to farmers, fixing the Alternative Minimum 
     Tax so it doesn't hit millions of middle-class taxpayers, and 
     extending a number of expiring tax credits for the full 10 
     years. The ``extra funds'' also are generated by the lack of 
     inclusion in the budget of the costs of some key initiatives 
     the President promised in the campaign and plans to pursue, 
     such as a national missile defense.
       Third, the math underlying the reserve assumes that a 
     prescription drug benefit and Medicare reform can be 
     accomplished for $153 billion over 10 years. This amount is 
     far below what any drug benefit that provides even modest 
     help to middle-income seniors will cost and ignores the fact 
     that restoring long-term solvency will require large 
     additional sums to be devoted to Medicare from general 
     revenues, even if controversial changes like those in the 
     Breaux-Frist or Breaux-Thomas packages are enacted. (The 
     Breaux-Frist and Breaux-Thomas packages would close only a 
     modest share of the long-term funding gap in the Medicare 
     Hospital Insurance trust fund. The need for additional 
     general fund revenues can be avoided only if Medicare payroll 
     taxes are raised significantly, an approach the 
     Administration clearly does not favor.)
       Fourth, any use of the reserve for purposes other than debt 
     reduction--i.e., for AMT relief, Medicare reform, farmers, 
     extra defense costs, or the like--will generate extra 
     interest costs that also must fit within the reserve.
       Fifth, the existence of the reserve also rests upon an 
     assumption contained in the budget that cuts of several 
     hundred billion dollars will be needed over the next 10 years 
     in non-defense discretionary programs outside education, 
     health research, and a few other favored areas. Such cuts 
     will be very difficult to secure political support for, 
     especially in a period of surpluses. They are unlikely to 
     occur.
       When realistic accounting is done, the reserve disappears 
     and a budget hole emerges. If this budget hole is not filled, 
     the budget will entail a return of deficits outside Social 
     Security and Medicare (and of the use of Social Security and 
     Medicare surpluses to fund other programs). In other words, 
     since the reserve is inadequate to cover the likely claims 
     against it, deficits outside of Social Security and Medicare 
     Hospital Insurance trust funds are likely to return unless 
     still larger cuts in domestic programs can be achieved.
       The reserve turns out, upon close inspection, to be a 
     clever accounting device that obscures more than it 
     illuminates and cloaks the budget trade-offs the 
     Administration's large tax cut creates. By failing to 
     disclose the costs of a number of items and distorting 
     Medicare financing, the budget essentially ``hides the ball'' 
     and prevents policymakers and the public from seeing the 
     trade-offs the tax cut entails. (The reserve is discussed in 
     more detail in our accompanying piece, ``The Administration's 
     Budget Reserve: Do the Numbers Add Up?.'')
       2. A careful reading of the tables in the budget reveals 
     that the budget math depends upon significant, unspecified 
     reductions in non-entitlement programs. Table S-4 shows that 
     the budget proposes cuts of $12.1 billion in fiscal year 2002 
     in discretionary programs outside defense, education, health 
     research, and a few other favored areas. Table S-4 also shows 
     a reduction of $8.4 billion in FY 2002 appropriations below 
     the FY 2001 level for one-time items and earmarked items. 
     Reductions of this magnitude in earmarked and one-time items 
     are unlikely--each year's appropriations bills have new 
     earmarks and one-time items. The probable result would be 
     reductions greater than $12.1 billion next year in 
     discretionary programs outside the favored areas. Another 
     table (S-6) provides data showing that fiscal year 2002 
     funding for discretionary programs in an array of departments 
     and agencies would be cut below a ``freeze'' level--that is, 
     below the FY2001 level even without an adjustment for 
     inflation. Among the agencies in which overall funding for 
     discretionary programs would be cut below a freeze level are 
     the Departments of Agriculture, Commerce, Energy, Interior, 
     Justice, and Labor, and the Environmental Protection Agency.
       The budget also shows that the Administration's education, 
     defense, health research, and other discretionary initiatives 
     would add $260 billion over 10 years, without counting 
     national missile defense, while total discretionary spending 
     would rise just $30 billion over 10 years. This means non-
     defense discretionary spending outside education, health 
     research, and a small number of other favored areas would 
     have to be reduced $230 billion below the current year's 
     level, adjusted for inflation. These cuts are left 
     unspecified. And when the Administration eventually proposes 
     increases for national missile defense and other defense 
     spending increases, the size of the reductions needed in 
     other discretionary areas could grow several hundred 
     billion dollars larger--or, more realistically, constitute 
     another claim against an already oversubscribed 
     ``reserve.''
       Also of note, Table S-7 shows that the Administration is 
     proposing new caps on total discretionary spending, to be set 
     approximately at this year's level adjusted for inflation. 
     Table S-12 purports to show how much each area of the budget 
     would receive under the caps. But the figures in Table S-12 
     are illusory; a footnote to the table shows that the defense 
     numbers in the table do not include any of the defense 
     spending increases the Administration will propose in the 
     future. Providing more money for national missile defense and 
     other defense programs, as the administration is expected to 
     do, will mean that other departments need to be cut to lower 
     levels than the levels shown in the table, in order for total 
     discretionary spending to fit within the caps the 
     Administration has proposed.
       What emerges is that the Administration is using the 
     ``reserve''--along with the lack of specificity regarding 
     what it will seek for national missile defense and various 
     other defense spending increases and what specific cuts it 
     ultimately will propose in an array of domestic discretionary 
     programs--to camouflage the trade-offs and tough choices its 
     tax cut entails. Indeed, the strategy may be to show the 
     defense increases--along with some of the proposed cuts--in 
     the budget released a year from now, after the tax cut has 
     been enacted.
       3. Another point that emerges from the budget is that the 
     Administration's tax cut costs at least $2.0 trillion. Table 
     S-2 shows the tax cut will lose $1.62 trillion in revenue. It 
     also shows increased interest payments on the debt of $417 
     billion. The overwhelming bulk of this $417 billion in added 
     interest costs results from the tax cut. (The $417 billion 
     reflects the added interest costs due to $1.62 trillion in 
     tax cuts and $173 billion in net spending increases.) Since 
     about $375 billion of the $417 billion in interest costs 
     results from the tax cut, that brings the overall cost of the 
     tax cut to $2.0 trillion. This $2 trillion cost does not 
     include added costs from fixing problems in the Alternative 
     Minimum Tax or from accelerating some of the tax cuts, which 
     the President has said he favors.
       4. The budget pays down less debt than it could. The 
     Administration's claim that $2 trillion is the maximum amount 
     of debt that can be paid down over 10 years rests on an

[[Page H778]]

     assertion that there is $1.2 trillion of publicly held debt 
     that cannot be paid down in this period. This figure is 
     disputed by other experts. CBO has estimated that the amount 
     of debt left outstanding at the end of ten years would be 
     about $800 billion if the Treasury simply continues its 
     existing policy of buying back some marketable debt before it 
     matures. In recent testimony, Federal Reserve Chairman Alan 
     Greenspan used a figure of $750 billion (plus some modest 
     amounts of debt the Fed may or may not need to hold on to). 
     Gary Gensler, the former Treasury Undersecretary who managed 
     the Treasury's debt operations, concludes in a new analysis 
     that the amount of debt outstanding in 2011 could be reduced 
     as low as $400 billion to $500 billion. The Administration's 
     figure is conveniently above these other estimates.
       5. Finally, in some areas, the Administration's press 
     releases and the President's address to Congress risk 
     creating misleading impressions. For example, the President 
     said last night that his budget would increase spending on 
     Social Security, Medicare, and other entitlements by $81 
     billion in 2002. In fact, $68 billion of this increase 
     represents no change in the operation, eligibility, or 
     generosity of these programs; this $68 billion simply 
     reflects costs that will automatically occur under current 
     law as a result of the annual Social Security cost-of-living 
     adjustment, increases in health care costs charged by medical 
     providers, and an increase in the number of elderly 
     beneficiaries. The true increase that the President is 
     proposing in 2002 in these programs is $13 billion, about one 
     percent of the cost of these programs, which would largely go 
     for the ``helping hand'' prescription drug proposal.
                                  ____


         Center on Budget and Policy Priorities, March 2, 2001


 IN BUSH BUDGET, TAX CUTS FOR TOP ONE PERCENT ARE LARGER THAN HEALTH, 
             EDUCATION, AND ALL OTHER INITIATIVES COMBINED

       In the Presidential campaign, Vice President Gore contended 
     that then-Governor Bush would provide more in tax cuts to the 
     top one percent of taxpayers than he would provide for all of 
     the initiatives he proposed. Mr. Bush replied that this was 
     untrue. Both campaigns provided numbers to support their 
     cases. In so doing, both campaigns engaged in some distortion 
     of the numbers (as explained in the box on page 2), with Gore 
     overstating and Bush understating the tax reductions that 
     would go to the top one percent.
       A new analysis, based on the Bush budget document issued 
     February 28 and free of the distortions of both campaigns, 
     finds the top one percent would get at least $555 billion in 
     tax cuts over the next decade under the Bush plan. All 
     initiatives in the budget--including a prescription drug 
     proposal for seniors, increases in education, health 
     research, defense, and other areas--would total less than 
     $500 billion. (As explained below, these figures are based on 
     a methodology that favors the president.) Thus, the tax cuts 
     that would go to the one percent of taxpayers with the 
     highest incomes--a group whose incomes have soared in recent 
     years and have risen much more rapidly than the incomes of 
     the rest of the population--would exceed the new resources 
     proposed for all other national priorities combined.
     Methodology
       According to the Bush budget, the President is proposing 
     tax cuts that would lose $1.62 trillion in revenue over the 
     next ten years. This total includes both those tax cuts 
     President Bush unveiled in the campaign that are often 
     thought of as ``the Bush tax cut'' and about 20 other, mostly 
     small, tax reduction proposals. Virtually all analyses of the 
     proportion of the proposed tax cut that would go to the top 
     one percent of taxpayers have examined the proposals in ``the 
     Bush tax cut'' and not the additional, smaller proposals. In 
     analyzing the amount of tax reductions that the top one 
     percent would receive in the next ten years, we include only 
     the tax proposals in ``the Bush tax cut'' and exclude the 
     other Bush tax reductions. This understates the amount of tax 
     cuts that would go to the top one percent.
       The Bush budget shows a total of $1.494 trillion in tax 
     cuts over ten years from the tax provisions in the ``Bush tax 
     cut'' (see Table S-9 of the budget). This figure appears to 
     understate the size of the tax cuts; on March 1, the Joint 
     Tax Committee informed Congress that the income tax rate 
     reductions in the Bush plan would cost $59 billion--or 12 
     percent--more over ten years than the Administration's budget 
     estimates. Earlier Joint Tax Committee estimates suggest the 
     Committee is likely to raise the price tag on other 
     provisions of the tax cut as well. In this analysis, we use 
     the Administration's estimates, which are lower than the 
     Joint Committee's, because a Joint Committee estimate on 
     the cost of the full Bush tax cut is not yet available.
       We divide the administration's estimate of the cost of the 
     tax cut into three categories: what the administration 
     estimates the individual income tax reductions will cost; 
     what it estimates the estate tax changes will cost; and what 
     it estimates its corporate tax reductions (which are 
     relatively small) will cost.
       We multiply the income tax reductions by the percentage of 
     the Bush income tax cuts that Citizens for Tax Justice has 
     estimated would go to the top one percent of taxpayers. The 
     CTJ estimate comes from the well-respected Institute for 
     Taxation and Economic Policy model, which CTJ uses. In the 
     past, CTJ estimates of the distribution of proposed income 
     tax cuts among different income groups have been similar to 
     those that the career staff at the Treasury Department has 
     produced.
       For estate tax repeal, we multiply the administration's 
     estimate of the amount of tax reductions that this proposal 
     would generate over the next ten years by the Treasury's own 
     estimate of the proportion of the estate tax that the top one 
     percent of taxpayers pay. Treasury issued a major study of 
     this issue in September 1999 and since then has used the 
     study's findings on this matter in analyzing how different 
     income groups would be affected by tax proposals that include 
     changes in the estate tax.
       For the modest corporate tax changes in the Bush plan, we 
     use the Treasury estimate (from the same September 1999 
     study) of the proportion of corporate taxes that are borne by 
     the top one percent of taxpayers. The results on the 
     corporate tax changes are essentially the same regardless of 
     whether one uses the CTJ results from the ITEP model or the 
     Treasury estimate.
       The result is an estimate that $555 billion in tax cuts 
     over the next ten years would go to the top one percent of 
     taxpayers. This estimate understates the actual amount 
     because, as noted, it excludes some tax reductions contained 
     in the administration's budget and uses the 
     administration's estimates for the cost of tax cut 
     provisions that the Joint Tax Committee says carry a 
     higher price tag.
     The initiatives
       The amounts the administration is proposing for initiatives 
     in its budget are set forth in the tables at the back of the 
     budget the administration issued on February 28.
       The budget proposes $153 billion over ten years for 
     Medicare, principally for a drug benefit (Table S-1).
       The budget proposes $260 billion over ten years in 
     discretionary spending increases in education, defense, 
     health research, and seven other areas (Table S-5). The 
     budget also proposes $230 billion offsetting savings from 
     unspecified reductions in discretionary programs. In this 
     analysis, we count the $260 billion in proposed increases 
     without netting out the proposed decreases.
       The budget contains $2 billion in mandatory spending 
     initiatives outside Medicare. The budget also contains $20 
     billion in savings in mandatory programs. We count the $2 
     billion without subtracting the reductions.
       This produces a total of $415 billion in spending 
     initiatives. This is well below the $555 billion in tax 
     reductions the top one percent of taxpayers would receive.
       The administration may argue that the proposal it has 
     included in the budget for health insurance tax credits 
     should be considered more like a program initiative than a 
     tax cut. According to the Office of Management and Budget, 
     the budget includes $70 billion to $80 billion for this 
     purpose, consisting of $50 billion to $60 billion in tax 
     reductions and $20 billion in refundable tax credits to 
     taxpayers with no remaining income tax liability. Including 
     the $70 billion to $80 billion cost of this proposal brings 
     the initiatives to $485 billion to $495 billion, still well 
     below the tax reductions the top one percent of taxpayers 
     would secure.
       Finally, the budget also includes $63 billion to $73 
     billion for approximately 20 other tax incentives. Some of 
     these appear to be proposals that would primarily benefit 
     higher-income taxpayers; other of these proposals would not 
     have that effect. The administration has not yet provided 
     information that breaks out the cost of each of these tax 
     proposals. An appropriate accounting would count these as tax 
     reductions, a portion of which would go to the top one 
     percent of taxpayers. Even if we assume that the bulk of 
     these tax preferences should be treated as initiatives, like 
     the health tax credit, the total for initiatives in the 
     budget still would not exceed what the top one percent would 
     receive through tax cuts.
                                  ____


         Center on Budget and Policy Priorities, March 5, 2001


           IS THE HOUSE TAX BILL NEEDED TO AVERT A RECESSION?

                          (By Peter R. Orszag)

       On March 1, the House Ways and Means Committee passed the 
     Economic Growth and Tax Relief Act of 2001, which reduces 
     income tax rates roughly in line with the Bush 
     administration's tax cut proposal. (The Ways and Means 
     legislation includes one change from the Bush budget: It 
     would create an interim 12 percent bracket this year, 
     accelerating a small part of the income tax cut.)
       Many advocates of the tax cut, including members of the 
     Bush administration, have argued that it will help to spur 
     the economy out of its current period of sluggish growth and 
     avoid a possible recession. Most economists are dubious of 
     this argument. Even Treasury Secretary Paul O'Neill stated in 
     his confirmation hearings that ``I'm not going to make a huge 
     case that this is the investment we need to make sure we 
     don't go into a recession.''
       The argument that the proposed tax cut is necessary to 
     avoid a recession overlooks several key factors.
     The tax cut is backloaded and does not provide much stimulus 
         in short run
       The tax plan the Ways and Means Committee has passed would 
     do little to lift the economy in the short run because its 
     tax cuts are backloaded. Indeed, only 0.5 percent (or $1 out 
     of every $200) of the cost of the legislation between 2001 
     and 2011 would occur in

[[Page H779]]

     2001. Less than 5 percent of the total cost occurs before 
     2003, by which time economic conditions are very likely to be 
     different than today. Fundamentally, such backloading is 
     inconsistent with spurring the economy in the short run: The 
     tax cuts would do little to boost families' spending power 
     immediately and therefore do little to spur the economy in 
     the months ahead.
       Another perspective on the size of the tax cut in 2001 is 
     that it amounts to just 0.05 percent (or roughly $1 out of 
     every $2,000) of Gross Domestic Product for the year, as 
     estimated by CBO. This reduction is too small to have much 
     macroeconomic impact in the short run.
       As Alan Auerbach, a leading tax economist at the University 
     of California, Berkeley, recently noted, the Bush tax package 
     ``was never designed to be a stimulus package, and it can't 
     be made into a stimulus package unless you throw it away and 
     start over. It has no effect in the short run.'' The Ways and 
     Means Committee did not throw out the Bush tax proposal and 
     start over; the legislation it passed was not designed to be, 
     and is not, an effective stimulus package.
       The reason that the Bush tax cut is not designed to 
     stimulate the economy in the short run is not only that it is 
     backloaded but also that it is heavily tilted toward high-
     income earners. When fully in effect, the Bush tax cut would 
     deliver nearly 40 percent of its benefits (including its 
     estate tax reductions) to the top one percent of the 
     population. This substantially exceeds the share of federal 
     taxes this group pays. (The top one percent pays 24 percent 
     of all federal taxes.) Moreover, the share of the tax cuts 
     the top one percent of the population would receive when the 
     Bush proposal 5 is fully in effect is greater than the share 
     the bottom 80 percent of the population would receive. The 
     distribution of tax benefits is significant because higher-
     income families are more likely to save some portion of their 
     tax cut than are lower- and middle-income families.' If the 
     objective is to spur the economy, the Bush tax cut is not 
     well-designed for the task. Putting more money back in the 
     hands of lower- and middle-income families would provide a 
     greater ``bang for the buck.''
     Tax cuts are not an effective tool for managing the economy
       Whatever the design of the tax cut, a large majority of 
     economists believe tax cuts are simply not an effective tool 
     for managing the macro-economy. In many cases, such tax cuts 
     take effect after the economy has already started to recover. 
     Even if the Ways and Means Committee legislation were 
     enacted, families would likely not receive any additional 
     cash until the second half of the year. By then, as 
     William McDonough, the President of the Federal Reserve 
     Bank of New York, was recently quoted as saying, the 
     economy is expected to be ``quite strong'' even in the 
     absence of a tax cut. As discussed below, CBO similarly 
     projects a strong, fairly prompt return to solid economic 
     growth rates without a tax cut.
       Most economists believe that monetary policy is more 
     effective than fiscal policy in managing short-term problems 
     in the economy. Alan Greenspan noted in testimony on January 
     25, ``Lately there has been much discussion of cutting taxes 
     to confront the evident pronounced weakening in recent 
     economic performance. Such tax initiatives, however, 
     historically have proved difficult to implement in the time 
     frame in which recessions have developed and ended.''
       In most cases, the Federal Reserve can provide as much or 
     more stimulus than Congress by increasing the money supply, 
     which reduces interest rates. A tax cut is usually 
     unnecessary, given the ability of the Federal Reserve to 
     reduce interest rates and to act quickly. Paul Krugman, a 
     well-known economist at Princeton, recently wrote, ``almost 
     all economists now agree with the position that monetary 
     policy, not fiscal policy, is the tool of choice for fighting 
     recessions.''
     It is far from clear that a recession looms
       The seriousness of the economic slowdown remains uncertain. 
     CBO projects that while economic growth will slow in 2001, 
     the economy will avoid a recession, with GDP rising by 2.4 
     percent, after adjusting for inflation. CBO also projects 
     that the economy will then rebound and grow at a solid rate 
     of 3.4 percent in 2002 and a rate of 3.1 percent throughout 
     the rest of the coming 10-year period. CBO forecasts that the 
     economy will avoid a recession, rebound from its current, 
     slower rate of growth, and enjoy a higher subsequent growth 
     rate, without a tax cut.
       The Federal Reserve itself, in its February 13 monetary 
     policy report to Congress, also predicted a return to 
     stronger growth later this year in the absence of any fiscal 
     policy changes. As the report stated, ``Although the economy 
     appears likely to be sluggish over the near term, the members 
     of the Board of Governors and the Reserve Bank presidents 
     expect stronger conditions to emerge as the year progresses. 
     For 2001 overall, the central tendency of their forecasts 
     of real GDP growth is 2 percent to 2\1/2\ percent, 
     measured as the change from the fourth quarter of 2000 to 
     the fourth quarter of 2001.''
       Private-sector forecasters similarly are doubtful the 
     economy will enter a recession. The Economist magazine's most 
     recent poll of private-sector forecasters suggests an average 
     projected growth rate of 1.8 percent in 2001. The average 
     growth forecast for 2001 among the forecasters included in 
     the latest Blue Chip Economic Indicators, published February 
     12, is 2.1 percent. While these rates of growth are lower 
     than those of recent years, they indicate that most 
     forecasters do not believe a recession will occur. The 
     unofficial definition of a recession is two consecutive 
     quarters of negative growth (that is, the economy contracts 
     rather than continuing to grow).'' Only five percent of the 
     forecasters included in the Blue Chip report believed the 
     economy is in a recession. Moreover, the average Blue Chip 
     forecast is for a strong rebound from the current growth 
     slowdown, with a growth rate of 3.5 percent in 2002.
       This uncertainty regarding whether the economy is in, or 
     will enter, a recession provides another motivation for 
     leaving macroeconomic management to the Federal Reserve: the 
     Federal Reserve is better equipped to monitor the economic 
     situation as it evolves than Congress is.
     Conclusion
       The Ways and Means tax cut is not well designed to address 
     a possible economic slowdown since it is backloaded. The tax 
     cut in 2001 is too small to be of much macroeconomic benefit 
     in the short run and is also unlikely to be passed in time to 
     address the current sluggishness in the economy. Most 
     economists believe that with the exception of a significant 
     recession, macroeconomic fluctuations such as a decline in 
     the growth rate should be addressed primarily by the Federal 
     Reserve.
                                  ____


         Center on Budget and Policy Priorities, March 6, 2001


  IN MANY STATES, ONE-THIRD TO ONE-HALF OF FAMILIES WOULD NOT BENEFIT 
                           FROM BUSH TAX PLAN

           (By Nick Johnson, Allen Dupree, and Isaac Shapiro)

     A substantial number of families in every State would not 
         benefit from tax plan
       A substantial portion of families with children in each of 
     the 50 states and the District of Columbia would receive no 
     assistance from President Bush's tax plan submitted to 
     Congress in early February. In some states, as high a portion 
     as one in two children live in families that would receive no 
     assistance under the provisions of the plan. In every state, 
     the number of families that would not benefit from the plan 
     is substantial.
       Nationwide, an estimated 12.2 million low- and moderate-
     income families with children--31.5 percent of all families 
     with children--would not receive any tax reduction from the 
     Bush proposal. Approximately 24.1 million children--33.5 
     percent of all children--live in the excluded families. The 
     vast majority of the excluded families include workers.
       These families are distributed somewhat unevenly across the 
     states. Among the states where high percentages of families 
     and children would not benefit from the plan are Arizona, 
     Arkansas, California, Georgia, Louisiana, Mississippi, 
     Montana, New Mexico, North Dakota, Texas, and West Virginia, 
     plus the District of Columbia. In each of those states, about 
     40 percent to 50 percent of all children live in the excluded 
     families. In California alone, 1.7 million families with 3.7 
     million children would not benefit from the tax cut. Even in 
     the states with the smallest proportion of low- and moderate-
     income families--such as Colorado, Connecticut, Maryland, 
     Minnesota and Wisconsin--about one in five families would not 
     benefit from the tax cut.
       This analysis investigates these figures in more detail and 
     examines the reason that so many families and children do not 
     benefit--the families have incomes too low to owe federal 
     income taxes. The Bush plan reduces only income taxes and 
     taxes on large estates. This leads to a discussion of whether 
     families that do not owe income taxes should benefit from a 
     large tax-cut proposal and the extent to which they owe taxes 
     other than income taxes, most notably the payroll tax. The 
     large majority of the excluded families do pay payroll taxes 
     and other federal taxes, plus substantial amounts of state 
     and local taxes, and can have significant overall tax bills. 
     Among all American families, three of every four pay more in 
     federal payroll taxes than in income taxes.

                    FAMILIES AND CHILDREN THAT WOULD NOT BENEFIT FROM BUSH TAX PLAN, BY STATE
----------------------------------------------------------------------------------------------------------------
                                                                               Percent                  Percent
                             State                                Number of       of       Number of       of
                                                                  families     families    children     children
----------------------------------------------------------------------------------------------------------------
New Mexico....................................................       117,000         47       278,000         52
District of Columbia..........................................        25,000         43        54,000         48
Mississippi...................................................       194,000         42       339,000         45
West Virginia.................................................        99,000         42       161,000         45
Louisiana.....................................................       270,000         41       496,000         44
Arizona.......................................................       278,000         41       565,000         41
Tennessee.....................................................       298,000         39       528,000         38
Montana.......................................................        50,000         38        98,000         41
Texas.........................................................     1,167,000         38     2,256,000         41
Georgia.......................................................       431,000         38       859,000         41
Arkansas......................................................       140,000         37       276,000         40
New York......................................................       922,000         36     1,865,000         39
Alabama.......................................................       227,000         36       436,000         38
North Dakota..................................................        30,000         36        61,000         40
California....................................................     1,742,000         35     3,744,000         40
Kentucky......................................................       198,000         35       326,000         35
Hawaii........................................................        58,000         34       108,000         33
South Carolina................................................       190,000         34       338,000         37
Idaho.........................................................        62,000         33       138,000         40
North Carolina................................................       349,000         33       644,000         34
Florida.......................................................       630,000         33     1,213,000         35
Oklahoma......................................................       144,000         32       282,000         35
Oregon........................................................       146,000         31       291,000         33
Wyoming.......................................................        22,000         30        43,000         33
Missouri......................................................       236,000         30       435,000         30
Kansas........................................................       107,000         29       201,000         30
Delaware......................................................        32,000         29        70,000         34
Ohio..........................................................       460,000         29       887,000         30
Maine.........................................................        49,000         29        90,000         29
Nebraska......................................................        63,000         28       132,000         29
Massachusetts.................................................       224,000         28       471,000         31
Illinois......................................................       482,000         28       985,000         30
Michigan......................................................       396,000         28       807,000         28
Nevada........................................................        76,000         27       172,000         29
Vermont.......................................................        23,000         27        43,000         28

[[Page H780]]

 
South Dakota..................................................        27,000         27        50,000         27
Iowa..........................................................       107,000         26       201,000         28
Pennsylvania..................................................       413,000         26       835,000         29
Virginia......................................................       242,000         25       439,000         26
Washington....................................................       203,000         25       391,000         28
Rhode Island..................................................        34,000         25        68,000         26
Indiana.......................................................       208,000         25       390,000         26
Alaska........................................................        25,000         24        50,000         25
New Jersey....................................................       247,000         23       486,000         24
Utah..........................................................        78,000         23       171,000         24
New Hampshire.................................................        41,000         23        83,000         23
Maryland......................................................       136,000         21       255,000         21
Minnesota.....................................................       134,000         20       297,000         22
Wisconsin.....................................................       157,000         20       316,000         20
Connecticut...................................................        86,000         19       191,000         21
Colorado......................................................       106,000         18       233,000         20
                                                               -------------------------------------------------
      U.S. Total..............................................    12,182,000         31    24,148,000        34
----------------------------------------------------------------------------------------------------------------
Source: Center on Budget and Policy Priorities tabulations from U.S. Census, Current Population Survey.

     Who would be excluded?
       We examined the latest data from the U.S. Census Bureau to 
     estimate the number of families and children under 18 who 
     would receive no assistance from the Bush tax plan. To ensure 
     accurate estimates at the state level, we used data for the 
     three years from 1997 to 1999; our analysis estimates the 
     effects of the plan as if it were in full effect in those 
     years. Using data for three years rather than data collected 
     within a single year enlarges the sample size, thus 
     increasing precision.
       The table on page 2 shows how many of these families live 
     in each state and in the District of Columbia. The figures 
     indicate that throughout the country, there would be 
     substantial numbers of children left out of the plan. In some 
     states, extremely high numbers of children and families would 
     receive no benefit.
       An estimated 3.7 million children in California, 2.3 
     million children in Texas, 1.9 million children in New York, 
     and 1.2 million children in Florida, along with their 
     families, would receive no benefit from the tax proposal. In 
     each of another eight states--Arizona, Georgia, Illinois, 
     Michigan, North Carolina, Ohio, Pennsylvania, and Tennessee--
     the families of half a million children, or more, would fail 
     to gain from the tax cut plan.
       In less populous states, the numbers of children and 
     families that would not benefit from the plan are smaller but 
     still substantial. Even in the least populous states, such as 
     Alaska, Vermont and Wyoming, tens of thousands of families 
     with children would not benefit.
       Approximately 52 percent of children in New Mexico live in 
     families that would not benefit under the tax proposal. Other 
     states where approximately 40 percent to 50 percent of 
     children live in families that would not benefit include 
     Alabama, Arizona, Arkansas, California, Georgia, Idaho, 
     Louisiana, Mississippi, Montana, New York, North Dakota, 
     Tennessee, Texas, and West Virginia, plus the District of 
     Columbia. Not surprisingly, because the families that would 
     be excluded under the Bush plan are those with incomes below 
     the poverty line or modestly above it, these states tend to 
     have relatively high levels of child poverty.
       By contrast, families in wealthier states are least likely 
     to be excluded from the Bush plan. Even in relatively low-
     poverty states, like Colorado, Connecticut, Maryland, 
     Minnesota and Wisconsin, 18 percent to 22 percent of 
     children and families would not benefit from the plan.
       The finding that about one in three families nationwide 
     does not benefit from the tax plan is consistent with the 
     findings of independent analyses of who is left out of the 
     Bush plan that have been conducted by researchers at the 
     Brookings Institution, the Urban Institute, and the Institute 
     on Taxation and Economic Policy. All three sets of analyses 
     indicate that among all families with children, nearly one in 
     three would not receive any assistance from the 
     Administration's proposal.
       Even the Bush proposal to double the child tax credit--the 
     feature of the President's tax plan that one might expect to 
     provide the most assistance to children in low- and moderate-
     income families--would be of little or no help to most of 
     these children. This proposal would provide the largest tax 
     reductions to families with incomes above $110,000 and confer 
     a much larger share of its benefits on upper-income families 
     than on low- and middle-income families.
       Under the Bush plan, the maximum child credit would be 
     raised from $500 per child to $1,000 in 2006.
       All families with two children in the $110,000 to $250,000 
     range, however, would receive an increase in their child tax 
     credit of more than $500 per child. For most of these 
     affluent taxpayers, the child credit would rise from zero 
     under current law to $1,000 per child under the 
     Administration's plan. This is because the Bush proposal 
     extends the child tax credit to many families with high 
     incomes who currently receive no credit at all. (This outcome 
     results from two provisions of the Bush plan. The plan both 
     increases the point at which the child credit begins to phase 
     out and slows the rate at which it phases out. Under current 
     law, the credit for a married family with two children phases 
     out between $110,000 and $130,000. Under the Bush plan, when 
     fully in effect starting in 2006, the credit for such a 
     family would phase out between $200,000 and $300,000. 
     Families between $130,000 and $300,000 thus would be made 
     newly eligible for the credit.)
       By contrast, the Bush plan does not extend the credit to 
     any low- and moderate-income families who currently receive 
     nothing from the credit. Under the plan, increased coverage 
     for high-income families with children is not accompanied by 
     increased coverage for low-income families.
     Why don't families benefit?
       During 2000, Bush campaign officials touted their tax-cut 
     plan as benefitting lower-income taxpayers substantially in 
     two key ways--by doubling the child credit to $ 1,000 per 
     child and by establishing a new 10 percent tax-rate bracket. 
     Some married families also would benefit from the plan's two-
     earner deduction. None of these features, however, affect a 
     family that owes no income taxes under current law.
       A large portion of families with children fall into this 
     category. As a result of the combination of the standard 
     deduction (or itemized deductions if a family itemizes), the 
     personal exemption, and existing credits such as the child 
     tax credit, these families do not owe federal income taxes. 
     (As described below in more detail, these families can pay 
     substantial amounts in other taxes, such as payroll and 
     excise taxes, even after the Earned Income Tax Credit is 
     taken into account.)
       The level at which families now begin to pay federal income 
     taxes is well above the poverty line. For example, in 2001, a 
     two-parent family of four does not begin to owe income tax--
     and thus does not begin to benefit from the Bush plan--until 
     its income reaches $25,870, some 44 percent above the poverty 
     line of $17,950. Families with incomes below the poverty line 
     would receive no assistance from the tax cut, nor would many 
     families with incomes modestly above the poverty line.
       The framers of the Bush plan could have assisted low-income 
     working families by improving the Earned Income Tax Credit, 
     which provides tax relief and supplements wages for low- and 
     moderate-income working families. Alternatively, the Bush 
     plan could have expanded the dependent care tax credit--a 
     credit that can offset a family's child care costs--and made 
     it available to the low-income working families who now are 
     denied access to this credit because it is not ``refundable'' 
     (that is, it cannot exceed the income taxes a family 
     otherwise owes). Or, the plan could have increased the now-
     limited degree to which the child tax credit is refundable 
     and can be used to offset taxes other than income taxes. The 
     plan takes none of these steps.
     Which families should benefit?
       Since the reason that millions of families and their 
     children would not benefit from the Bush plan is that they do 
     not owe federal income taxes, some have argued that it is 
     appropriate they not benefit. ``Tax relief should go to those 
     who pay taxes'' is the short-hand version of this 
     argument. This line of reasoning is not persuasive for 
     several reasons.
       1. A significant number of these families owe federal taxes 
     other than federal income taxes, often paying significant 
     amounts. For most families, the biggest federal tax burden by 
     far is the payroll tax, not the income tax. Data from the 
     Congressional Budget Office show that in 1999, three-fourths 
     of all U.S. families paid more in federal payroll taxes than 
     in federal income taxes. (This comparison includes both 
     employee and employer shares of the payroll tax; most 
     economists concur that the employer's share of the payroll 
     tax is passed along to workers in the form of lower wages.) 
     Among the bottom fifth of households, 99 percent pay more in 
     payroll than income taxes. Low-income families also pay 
     federal excise taxes and state and local taxes, which are 
     discussed further on the next page. While the Earned Income 
     Tax Credit offsets these taxes for many working poor 
     families, many families with incomes modestly above the 
     poverty line who would not benefit from the Bush plan are net 
     taxpayers.
       Consider two types of families earning $25,000 a year in 
     2001, an income level President Bush has used in some of his 
     speeches, including his first radio address to the nation 
     about his tax package. In this radio address, the President 
     used the hypothetical example of a waitress who is a single-
     mother with two children and earns $25,000 a year and 
     indicated her family would be a prime beneficiary of the tax 
     cut. The figures suggest otherwise.
       A single mother with two children and income of $25,000 
     would pay $3,825 in payroll taxes (again, counting both the 
     employee and employer share) and lesser amounts in gasoline 
     and other excise taxes. The family pays various state taxes 
     as well. The family would receive an Earned Income Tax Credit 
     of $1,500, well under half of its payroll taxes.
       As a result, even if just payroll taxes and the EITC are 
     considered, the family's net federal tax bill would be 
     $2,325. Nonetheless, this family might receive no tax cut 
     under the Bush plan. If this single-mother waitress pays at 
     least $170 a month in child care costs so she can work and 
     support her family--an amount that represents a rather modest 
     expenditure for child care--she would receive no tax cut 
     under the Bush plan despite having a significant net tax 
     burden. (The amount of child care costs affects the 
     calculation due to the interaction between the dependent care 
     credit and the child credit. If she had no child care costs, 
     she would qualify for no dependent care credit and would

[[Page H781]]

     receive a modest income tax cut, though it would be far below 
     what she owes in payroll taxes.)
       A two-parent family of four with income of $25,000 would 
     not receive a tax cut under the Bush plan, whether or not the 
     family has child care costs. For such families as well, their 
     payroll taxes exceed their EITC by $2,325.
       2. Low and moderate-income families in every state pay 
     state and local taxes, often paying a larger percentage of 
     income in such taxes than higher-income families. Families 
     with incomes below or near the poverty line bear substantial 
     state and local tax burdens. These taxes commonly include 
     sales taxes, excise taxes on such items as gasoline, property 
     taxes (passed on by landlords to tenants in the form of 
     increased rent), various tax-like fees, and sometimes state 
     or locality-specific taxes such as local taxes on wages. In 
     addition, many states have income taxes that tax families at 
     much lower income levels than the federal tax does. The 
     Institute on Taxation and Economic Policy estimates that 
     state and local taxes altogether equal anywhere from eight 
     percent to 17 percent of the income of an average low-income 
     married couple, depending on the state. Furthermore, these 
     burdens are inequitably distributed; in almost every state, 
     lower-income families pay a larger share of their incomes in 
     state and local taxes than higher income families.
       Although some states have taken steps to reduce the burden 
     of taxes on low-income families in recent years, they are 
     limited in their ability to do so. States that for many years 
     have levied the sales, excise and property taxes that are 
     most burdensome on the poor cannot simply eliminate those 
     taxes without dramatic effects on state budgets. In addition, 
     it is cumbersome for states to target relief to poor families 
     that are burdened by these taxes. For example, the sales tax 
     is collected by merchants from consumers without regard to 
     their income level, and property taxes are passed through 
     from property owners to renters as part of a rent payment. 
     Moreover, states with higher levels of poverty often have the 
     least fiscal resources with which to pay for tax relief 
     for low-income families.
       These state and local taxes that poor families pay often 
     help finance federally required services or joint federal-
     state programs. For instance, state contributions to Medicaid 
     typically are financed in whole or in part by general fund 
     taxes such as state sales taxes and excise taxes. Similarly, 
     state contributions to federal highway construction often are 
     financed by gasoline and other motor vehicle taxes. In part 
     because these and other federal programs rely on state and 
     local taxes, it can be appropriate for the federal government 
     to administer tax relief that helps offset the burden of 
     those taxes.
       3. An additional income boost would further the objective 
     of helping working families lift themselves out of poverty. A 
     key theme of welfare reform has been to prod, assist, and 
     enable families to work their way out of poverty. The 
     principle of helping families work their way out of poverty 
     has gained support across the political spectrum. This 
     principle is important for married families and single-parent 
     families, and there is considerable evidence that welfare 
     reform--in combination with a strong economy, low 
     unemployment rates, and the EITC--has significantly increased 
     employment rates among single mothers. Providing increased 
     assistance to the working poor through the tax system could 
     further the goal of ``making work pay.''
       Such assistance is particularly important since much of the 
     recent gain in the earnings of the working poor has been 
     offset by declines in other supports. For example, from 1995 
     to 1999 the poorest 40 percent of families headed by a single 
     mother experienced an average increase in earnings of about 
     $2,300. After accounting for their decrease in means-tested 
     benefits and increases in taxes, their net incomes rose only 
     $292. (Both changes are adjusted for inflation.)
       In addition, a study the Manpower Demonstration Research 
     Corporation recently released finds that improving income--
     and not just employment--is important if the lives of 
     children in poor families are to improve. The MDRC report 
     examined five studies covering 11 different welfare reform 
     programs. The report's central finding was that increased 
     employment among the parents in a family did not by itself 
     significantly improve their children's lives. It was only in 
     programs where the parents experienced increased employment 
     and increased income that there were positive effects--such 
     as higher school achievement--for their elementary school-
     aged children.
       4. The Bush approach fails to reduce the high marginal tax 
     rates that many low-income families face. Throughout the 
     campaign and early into the new Presidency, President Bush 
     and his advisors have cited the need to reduce the high 
     marginal tax rates that many low-income working families face 
     as one of their tax plan's principal goals. They have 
     observed that a significant fraction of each additional 
     dollar these families earn is lost as a result of increased 
     income and payroll taxes and the phasing out of the EITC. Yet 
     a large number of low-income families that confront some of 
     the highest marginal tax rates of any families in the nation 
     would not have their rates reduced at all by the Bush plan
       Analysts across the ideological spectrum have long 
     recognized that the working families who gain the least from 
     each additional dollar earned are those with incomes between 
     about $13,000 and $20,000. For each additional dollar these 
     families earn, they lose up to 21 cents in the EITC, 7.65 
     cents in payroll taxes (15.3 cents if the employer's share of 
     the payroll tax is counted), and 24 cents to 36 cents if they 
     receive food stamp benefits. They lose additional amounts if 
     they receive housing assistance or a state child care subsidy 
     on a sliding fee scale, or if they are subject to state 
     income taxes. Their marginal tax rates are well above 50 
     percent. The Bush plan does not reduce these rates.
       Ways to reduce marginal tax rates for such families are 
     available and not especially expensive. One approach is to 
     raise the income level at which the EITC begins to phase down 
     as earnings rise and/or reduce the rate at which the EITC 
     phases down. Bipartisan legislation that Senators 
     Rockefeller, Jeffords, and Breaux introduced last year 
     follows such a course, as does another proposal made by Rep. 
     Ben Cardin. Another way to lower marginal rates would be to 
     expand substantially the existing, very limited refundable 
     component of the child credit.
       5. The rewards from the surplus should be spread throughout 
     the population. The Bush tax plan would take most or all of 
     the surplus that is projected to occur over the next ten 
     years outside Social Security and Medicare. Democratic 
     leaders have proposed substantially smaller but still 
     significant tax cuts. If tax cuts are to be provided as one 
     of the principal uses of the surplus, as seems likely, it is 
     appropriate to dedicate some portion of those tax cuts to 
     people with the most pressing needs, such as low-income 
     families with children.
  Mr. CASTLE. Mr. Speaker, I rise today in strong support of H.R. 3, 
``The Economic Growth and Tax Relief Act of 2001.'' This $958 billion 
proposal to reduce income tax rates over the next ten years represents 
the center piece of President George W. Bush's tax plan for the 
American people. It also represents a very fair form of tax relief 
because it does not give tax relief to special interests. Instead, it 
gives money back to every American who paid more in income taxes than 
is necessary to operate the Federal government. All working Americans 
of every income level deserve to have some of their tax dollars 
returned to them. I congratulate President Bush for his leadership 
putting tax relief for every American ahead of special interest groups. 
This proposal demonstrates his commitment to changing the culture in 
Washington, D.C.
  The rate reductions in this bill would cut rates for taxpayers from 
15% to 10% on the first $12,000 a couple earns; 15% for income from 
$12,000 to $45,200; from 28% or 31% to 25% for income from $45,200 to 
$109,250; and from 36% or 39.6% to 33% for income above $109,250. In 
addition, the plan adjusts the Alternative Minimum Tax to protect 
taxpayers from being penalized for claiming the child tax credits they 
are promised under the tax code.
  In recent months, there has been much discussion about the fairness 
of tax cuts. When one looks beyond the rhetoric of class warfare, there 
is strong evidence that President Bush's tax cut proposal is truly 
fair. When the tax cut is fully implemented, families earning less than 
$18,000 [the bottom quintile (0%-20%) of income earners in this 
country] will see their after-tax income rise 1.1%. With the Earned 
Income Tax Credit program they receive an income tax credit without 
paying federal income taxes. It is also important to keep in mind that 
we will continue to fund an important array of federal programs that 
provide assistance to low-income Americans. More than $3.7 trillion in 
federal funds will be spent over the next ten years on programs that 
are intended to help low-income Americans. We must help low-income 
Americans and we will continue to do so.
  Mr. Speaker, taxpayers in my state of Delaware are large contributors 
to the Federal Government. Delawareans receive only 84 cents in return 
for every tax dollar they pay to the federal government. I am proud 
that I come from a successful and well-run state. However, when their 
federal taxes will help create a true budget surplus of $2.7 trillion, 
it is proper for Delawareans to ask for some share back so they can use 
their hard-earned money to help their families and keep their local 
communities strong. According to one estimate, the rate reduction in 
this bill could return $3.8 billion to Delawareans as a whole. These 
funds will be invested in ways to create jobs and keep Delaware's 
economy strong and growing--helping all families.

  The tax relief under this plan is intended to help lower income 
Americans. Families earning less than $35,000 [income earners 
representing second quintile (21%-40%)] currently pay 0.5% of all 
federal income taxes. Under President Bush's rate reduction plan, their 
after tax income would rise 1.5%. In fact, if the President's child tax 
credit is enacted in addition to this rate cut, a married couple with 
two children living on one income, will pay no income taxes on the 
first $39,000 they earn.
  Will the highest income taxpayers continue to pay their fair share? 
Yes, and a larger percentage of federal taxes as well. Taxpayers at the 
top 10% of income levels, these families

[[Page H782]]

earning more than $140,000 currently pay 61.3% of all federal income 
taxes. This is up from 57.3% in 1988. The reason is that in 1990 the 
top income tax rate was raised from 28% to 31%. Then, in 1993, it was 
raised again to 39.6%. The justification cited at that time was that 
these funds were needed to reduce the federal budget deficits. Those 
deficit spending days are gone and taxpaying families that shouldered 
the extra burden for the last decade also deserve some tax relief. 
Instead of returning the top income tax rate to 28%, President Bush's 
plan reduces it to 33%. Upper income taxpayers will continue to pay the 
largest portion of federal taxes, but they will receive some tax 
relief.
  Apart from the question of fairness, is the question of the overall 
size of the tax cut and the soundness of the assumptions upon which the 
surplus projections rest. $958 billion over the next 10 years falls 
within the range of tax cuts that both Republicans and Democrats 
believe is reasonable within the projected $2.7 trillion surplus. 
However, 10-year surplus projections are inherently uncertain. One only 
needs to look at projections from a few years ago that predicted budget 
deficits. I support additional steps to ensure we achieve the predicted 
surpluses and continue to reduce the national debt.
  One safeguard that should be considered is a trigger on the phase in 
of future tax cuts and new spending. Like Federal Reserve Chairman Alan 
Greenspan, I support adding a trigger that would delay the phasing in 
of these tax rate reductions if the surplus does not materialize as 
projected and the national debt is not reduced. Contrary to some 
interest groups' political spin, a trigger does not raise taxes. I also 
note that Chairman Greenspan's support for tax cuts is conditioned upon 
this surplus materializing. He still believes that debt reduction is 
the first priority. I agree with his views that debt reduction, used as 
a tool to decrease the interest many Americans pay on credit care debt, 
home mortgages, and education loans, is the best way to bring financial 
relief to our country and spur economic growth.
  Mr. Speaker, even though this initial tax relief legislation does not 
contain a trigger, I still support its passage for three reasons. 
First, I recognize that this is the beginning of the 2001 tax debate, 
not the end. There will be other opportunities to improve the final 
budget and tax legislation and I look forward to that discussion with 
you. Second, the Federal Government has a spending problem. In budget 
negotiations with the previous Administration, there was a serious lack 
of fiscal control in both parties. Spending increases far exceeded the 
rate of inflation. If this were sustained, there would not be room in 
the surplus for a tax cut or debt relief. Third, triggers on tax cuts 
represent only half the story. Those who have listened carefully to 
Chairman Greenspan note that he supports both a trigger on tax cuts and 
on long-term spending. During the upcoming budget debate, there will be 
opportunity to discuss the value of a trigger on both spending and tax 
cuts. I believe Americans need to hear both sides of this story.
  Mr. Speaker, again, I am proud to support ``The Economic Growth and 
Tax Relief Act.'' It meets the tests of fairness by providing 
meaningful relief to all income levels. It is fair and brings relief to 
my state of Delaware. Its size is compatible with debt reduction goals. 
Finally, it sends the proper message to Washington, D.C. that broad-
based tax relief is more important than ever-increasing levels of 
government spending. I will continue to work to ensure that the 
ultimate tax relief and budget legislation is fair to all Americans, 
protects the surplus and pays down the debt. I look forward to this 
effort.
  Mr. UDALL of Colorado. Mr. Speaker, I regret that I cannot support 
this bill--but I am convinced that to vote for it today would be a 
serious mistake.
  In fact, we should not even be considering the bill today. We have 
not yet even begun consideration of an overall budget resolution, let 
alone reached an agreement with the Senate on a budget framework.
  We have not had a chance to weigh how this bill or any other bills to 
reduce taxes would affect other important priorities, including 
continued progress in reducing the publicly-held debt, strengthening 
Social Security and Medicare, and investing in our schools, our 
communities, and our country.
  We do not yet have a complete budget proposal from the President, but 
already we can see he is proposing to make room for his tax bill by 
cuts in other areas, including important research and development 
programs. And the bill before us today is only the first installment on 
the President's plan.
  That is why the law says, and what is provided for by the House's own 
rules. But that is not what we are doing--we are waiving the rules, so 
that we can rush to pass this bill before we have a chance to consider 
how--or whether--it would fit with every other part of the budget.
  It may be politically important for the new Bush Administration to 
rush this process, but it is not a responsible way to make budgetary 
decisions that may have profound consequences for future generations of 
Americans. That is the way the budget process is supposed to work. That 
is not the way any family in America would go about making a budget, 
and it is not how we should go about doing our jobs either.
  That is why I voted against the resolution to waive the normal rules 
and bring the bill to the floor today.
  But since the Republican leadership insisted on going forward, 
regardless of the normal rules and common prudence, we should have at 
least proceeded more cautiously and with a better focus.
  That is why I voted for the Democratic substitute--because it was the 
more prudent alternative.
  Mr. Speaker, Colorado is an arid state. If you come to visit us in 
the summer you will find it is sunny almost every day. We like it that 
way, and do so our summer visitors. But that means we have to be 
careful about water. We watch the snowpack carefully, and we work to 
conserve water so we will be prepared for a dry season. We know how 
hard it is to accurately forecast the weather, and how risky it would 
be to drain our reservoirs prematurely because of a long-range forecast 
of surplus water in coming years.

  And, Mr. Speaker, it is just as risky to rely too much on long-range 
forecasts of future budget surpluses--as the Republican bill does.
  The Democratic alternative took a more cautious approach. The 
Democratic alternative would have lowered taxes for everybody, by 
lowering from 15 percent to 12 percent the tax on the first $10,000 for 
a single taxpayer, the first $18,000 for heads of households, and the 
first $20,000 for married couples filing jointly. It also would have 
addressed the ``marriage penalty'' by allowing married couples filing 
jointly twice the standard deduction used by single filers. And it 
would have adjusted the alternative minimum tax (AMT) to assure that 
all taxpayers who pay income taxes would receive the benefit of its 
reduction in rates and that everyone eligible for the Earned Income Tax 
Credit and the child credit would receive the full benefit of those 
provisions of the law.
  But it would not have gone as far as the Republican bill to slow 
reduction of the publicly-held debt. It would not have gone as far to 
reduce our ability to strengthen Social Security and Medicare. I would 
not have bet as much on a 10-year forecast of good economic weather. In 
short, the Democratic alternative would have provided real tax relief 
for millions of Americans, without the same risks to the economy as the 
Republican bill.
  It is very important that we continue on the path of fiscal 
responsibility and pay down the public debt, which will mean lower 
interest rates, lower mortgages, and lower student loan payments. That 
is first-class tax relief.
  Today, my first choice would have been for us to first debate an 
overall budget resolution under normal rules, so that we could 
carefully frame real, substantial tax reductions in the full context of 
the debt and other important priorities. My second choice was to 
support the Democratic alternative.
  The Republican leadership rejected both those courses and have left 
me only with the choice of an irresponsible vote or a vote against this 
bill.
  That means I have no responsible choice except to vote no, and hope. 
I hope that the Senate will take a more cautious, responsible course 
than the Republican leadership here in the House. And I hope that the 
result will be a sounder, more balanced bill that all of us can and 
should support.
  Mr. SANDLIN. Mr. Speaker, I want to take a moment to talk about 
today's vote on tax cuts and in so doing lay out what I believe is a 
responsible and balanced approach to fiscal policy. We have heard a 
great deal from the Republican Leadership and the Bush Administration 
about the importance of passing massive tax cuts now. Last week, the 
President came to this chamber to make his case for tax relief and I 
must say I found myself agreeing with a great deal of what he said. I 
support tax fairness for America's working families. We need tax relief 
and I support lower taxes--including complete repeal of the Federal 
Estate Tax and elimination of the Marriage Penalty.
  It is, however, because of my desire to enact significant tax relief 
coupled with the fact that I am interested in working with President 
Bush on the items in his agenda, that I am so disappointed in how the 
Republican Leadership has chosen to proceed. To pass any massive tax 
cut without first setting a budget framework is simply irresponsible 
and does not set a positive tone. Debating, voting, and passing a 
budget resolution that balances the priorities of Congress and the 
President is not an argument about process or rules. Rather, it is the 
foundation from which all subsequent debates between Congress and the 
White House follow. To act on a tax proposal before enacting, let alone 
debating, a budget framework severly restricts Congress's ability to 
address other priorities, particularly strengthening

[[Page H783]]

Social Security and Medicare and paying off the national debt.
  The submission of a budget blueprint by President Bush setting out 
how he proposes to balance priorities within an overall budget is an 
important first step. Congress should take the next step of adopting a 
budget resolution that balances the President's priorities with those 
of Members of Congress in both parties. The large projected surpluses 
by the Congressional Budget Office (CBO) are as tempting to squander on 
new spending programs as on passing a massive tax cut. We must remember 
that it was not that long ago official forecasts predicted crushing 
budget deficits, which would make today's debate over the size of a tax 
cut seem reckless. A budget resolution, therefore, puts Congress on 
record to adhere to set spending levels. Rushing ahead with tax cut 
legislation before we have reached an agreement on a fiscally 
responsible budget framework that honestly balances all of the tax and 
spending priorities of both parties would be irresponsible and could 
have severe negative consequences for the budget and the economy.
  A bipartisan budget is imperative because the budget sets the tone 
and tenor for the year, the Congress, and this administration. 
President Bush has spoken often of the need to change the tone in 
Washington and his early actions demonstrate a commitment to 
bipartisanship. As a member of the Blue Dog Coalition, a group of 
Members who support enacting a fiscally responsible budget plan, we 
have asked the President to insist that Congress consider a budget 
resolution before tax cuts. I am disappointed that to date all we have 
gotten from the White House is a budget outline, short on specific 
budget figures. Silence from the White House has lead us to where we 
are today--voting on a massive tax cut before anyone fully understands 
how such a measure impacts the budget. By putting the cart before the 
horse and passing a tax cut before a budget is in place, the President 
has squandered an opportunity to capitalize on the goodwill of his 
first few months in office.
  Although I am disappointed by the handling of today's debate by the 
House leadership, I still believe that Congress can work together to 
pass significant tax relief. I ask my colleagues on the other side of 
the aisle to stop playing politics with tax cuts. The American people 
deserve tax relief; however, they expect Congress not to abandon the 
sound fiscal policies and risk a return to deficits. We can provide 
affordable tax cuts, strengthen Social Security and Medicare, and pay 
off the national debt, but we must be careful not to squander this 
momentous opportunity through irresponsible fiscal policy.
  Mr. HOLT. Mr. Speaker, I strongly support the alternative tax cut 
package put forth by Congressman Rangel and oppose the package by the 
President and the majority in the House.
  People in New Jersey pay too much in taxes. That's why I have been 
one of the few Democrats in Congress who has been willing to cross 
party lines to vote for eliminating the estate tax, to vote for 
eliminating the marriage penalty, to vote for cutting taxes for small 
businesses, and to vote for cutting taxes for senior citizens. It's why 
I have pushed for tax breaks that will help local communities keep 
their property taxes low by helping with the costs of school 
construction. And it's why I have consistently supported making 
permanent job-producing tax credits like the Research and Development 
Tax Credit.
  The Rangel tax cut proposal deserves our support. It cuts the tax 
rates for hard pressed New Jerseyans, adjusts the Alternative Minimum 
Tax, and expands the child tax credit for families with kids. It 
undertakes all of these tax cuts in a responsible way while protecting 
Social Security and Medicare, paying down our debt, and saving part of 
the budget surplus in the event of a ``rainy day.''
  H.R. 3, the bill the majority has brought before us today, is simply 
too large, too irresponsible and based on projections that are just too 
uncertain.
  The authors of this bill have rushed it to the floor without knowing 
what the rest of the budget holds. And they are basing their bill on 
financial projections that may or may not materialize. High tech 
forecasters can't predict the weather two days away as we have been 
reminded when forecasts earlier this week called for a historically 
large snowfall in New Jersey that never materialized. But supporters of 
H.R. 3 are betting that we can accurately predict the financial weather 
a decade from now. It is worth noting that economic projections that 
were made just three years ago have proven to be trillions of dollars 
off the mark. One can only guess how accurate these ten-year 
projections might be.
  Parents in my central New Jersey district don't bet their children's 
financial future on rosy scenarios, and castle-in-the sky projections. 
They sit around the kitchen table and budget their bills, their income 
and their anticipated expenses. They make tough choices. They don't 
squander a lot of money to buy a lavish vacation home, counting on a 
raise the breadwinner hopes to get in future years, without first 
figuring out how to pay the medical bills, send their children to 
college and save for retirement. They expect from us the same type of 
honesty and responsibility when we make budget decisions that affect 
their families.
  When this proposed tax cut is combined with the other elements of 
President Bush's entire tax plan, it costs well over $2 trillion, after 
adding in interest on the debt and other hidden costs. The entire 
available surplus is just $2.7 trillion. Spending that much of the 
surplus--that is, the projected surplus--is simply irresponsible. It 
leaves no room for the other important priorities that our nation 
faces. And it is a recipe for huge budget deficits.
  My constituents elected me to make decisions based on evidence, not 
partisan ideology. And the evidence is that this bill is all too likely 
to throw our economy into the same financial ditch that President 
Bush's Secretary of Treasury, Paul O'Neill, admits President Reagan's 
1981 tax cut put the country in. Republicans and Democrats alike have 
labored long and so hard to pull us out of that ditch. Let's not repeat 
the mistakes of the past.
  This plan is also unfair. It gives 45% of the tax benefits to the top 
1%--those with an average income of $1.1 million--and fails to give a 
single dime to more than 12 million low- and middle-income families 
with 24 million children. We can do better than that.
  By arriving at a tax cut in a responsible way and making sure that we 
can continue to pay down the national debt, we can generate confidence 
among investors and consumers, ensure lower interest rates, and put 
more money in the pockets of almost all Americans than they would get 
from the proposed tax cut.
  Together, I know that we could come together to pass a responsible 
tax cut for Americans. But this bill is not responsible, and it has not 
been crafted in the bipartisan, civil way that President Bush has asked 
us to behave.
  Let me also say that, like most Americans, I have been greatly 
encouraged by President Bush's promise to change the tone in Washington 
by ending the excessive partisan warfare in this city. It pains me to 
see that pledge undercut at the very beginning of the President's term. 
The Administration and the Leadership should not rush through on a 
partisan basis legislation embodying the President's top priority, 
without consulting with Democrats. They should work together with me 
and others in the minority who support tax cuts to craft a bipartisan, 
responsible tax cut.
  I urge my colleagues to support the Rangel tax cut and oppose H.R. 3.
  Mr. CUNNINGHAM. Mr. Speaker, I rise today in support of H.R. 3, the 
Economic Growth and Tax Relief Act of 2001. The plan that we are 
considering today reduces to 12% the current 15% tax rate on the first 
$12,000 of taxable income for couples ($6,000 for singles) to get money 
in the hands of those who need it most. The new rate is applied 
retroactively to January 1, 2001. This plan also consolidates by 2006 
the current 5-rate tax structure (15%, 28%, 31%, 36% and 39.6%) into 
four new rates (10%, 15%, 25%, and 33%). This legislation is an 
important first step in returning tax overpayments to the American 
people.
  The American people are working harder than ever, and they are 
spending forty percent of their income in federal, state, and local 
taxes. I think that it is unconscionable that families are paying more 
in taxes, than for food, clothing, and shelter combined, and that four 
months of every year, taxpayers are working to pay the federal 
government. The Congressional Budget Office (CBO) has estimated that 
over the next ten years, Washington will collect a $5.6 trillion tax 
surplus. Taxpayers are sending us more than we need--and there is no 
doubt in my mind that if we don't return it, that money will be spent. 
It is time to return that money and let the American people spend their 
own money to meet their own needs.
  When we return this tax surplus to American families, they will see 
more than just the benefit of a refund check. I am concerned that our 
economy is slowing down--consumer confidence, capital investment and 
growth are down, while layoffs, energy prices and anxieties are up. We 
need to give the economy a boost, and any credible economist can tell 
you that tax cuts will do that. So not only will the American people 
get their overpayment back, but they will also reap the benefit of a 
rejuvenated economy that will enhance their prosperity.
  I look forward to working with President Bush and my colleagues in 
the House and Senate to build on this important first step to return 
the tax surplus to the American people. I rise today in support of H.R. 
3, and also to voice my support for President Bush's other tax refund 
initiatives which include doubling the child tax credit, reducing the 
marriage penalty, eliminating the death tax, expanding the charitable 
tax deduction, and making the research and development tax credit 
permanent.

[[Page H784]]

  Mrs. CAPPS. Mr. Speaker, today I voted to cut taxes for all 
Americans. And I voted in support of fiscal responsibility.
  I believe we need to cut taxes and have voted to do so repeatedly 
during my short time in Congress. At a minimum, we should lower overall 
tax rates, fix the marriage penalty, and reform the estate tax laws.
  But tax cuts must be done in the context of an overall budget 
framework that will allow us to meet other pressing priorities. And we 
must remember that much of this surplus is still only a projection--
it's not money in the bank.
  We must continue paying down the $3.4 trillion national debt. Our 
progress in debt reduction has kept interest rates down and allowed 
families to pay less for their homes and cars. We must also ensure the 
long-term solvency of Social Security and Medicare, provide 
prescription drug coverage for our seniors, improve education and 
protect our environment.
  The proposal I voted for today will allow us to do all these things, 
while providing tax cuts for all taxpayers.
  I fear that the tax cut bill being pushed by the House leadership and 
President Bush is too big and won't allow us to accomplish these other 
important goals. I also fear that it could open the door to a new era 
of runaway deficits that would cripple our economy. And I am 
disappointed that the House leadership has chosen to bring tax cuts to 
a vote before we have a budget in place.
  The prosperity we have enjoyed over the last decade has produced the 
record surpluses we have today and are projecting for the future. Let's 
take advantage of this moment and give American families the tax relief 
they deserve. But let's not squander this opportunity by passing 
irresponsible tax cuts that our families, and our nation, can ill 
afford.
  Mr. CHAMBLISS. Mr. Speaker, our government is too big and spends too 
much money. Americans are over taxed and being asked to pay too much to 
the federal government. Tax relief is about freedom. Freedom for 
American families to save, spend or invest as they see fit. Tax relief 
is about returning dollars and decisions back home to families in 
Georgia and across the country.
  Americans will send $5.6 trillion more to Washington over the next 
ten years than is needed to run the federal government. Some of these 
funds will be locked away to ensure that Social Security and Medicare 
are strengthened. Some of these funds will go toward reducing the 
national debt. And some of these funds will be spent on important 
priorities such as education, prescription drugs, and strengthen our 
military. But the rest of the federal budget surplus should be returned 
to the American people in the form of tax relief. Working Americans 
deserve relief now.
  We worked hard over the past few years to enact tax relief for 
American people but were stymied by the previous president. President 
Bush has shown leadership in putting forward a plan that helps relieve 
the tax burden on working families, and I am pleased that we now have 
an opportunity to provide a refund to those people who work hard 
everyday to make the greatest country in the world productive.
  The President's plan is balanced and fair; it reduces inequities in 
the tax code while at the same time providing for long term economic 
growth. This bill today will give tax relief to all taxpayers and 
return decision making power to families who know best how to spend 
their money.
  I urge my colleagues to join me in supporting this bill because it is 
simple and fair and will provide powerful incentives to save and 
invest.
  Mr. GILMAN. Mr. Speaker, I rise today in strong support of H.R. 3, 
the Economic Growth and Tax Relief Act of 2001.
  H.R. 3 represents the first vote on a key component of the new 
President's campaign agenda; tax relief for American families. This 
legislation begins this process by providing for across-the-board 
reductions in the marginal rates of the Federal income tax.
  Under H.R. 3, the current 15 percent rate would be reduced to 12 
percent on the first $12,000 for couples and the first $6,000 for 
single filers. This provision would be applied retroactively to the 
beginning of 2001.
  The bill further reduces and makes adjustments to rate brackets over 
the next five years, so that by 2006, the current five brackets (15 
percent, 28 percent, 31 percent, 36 percent and 39.6 percent) would be 
replaced by four lower brackets set at 10 percent, 15 percent, 25 
percent and 33 percent respectively.
  Mr. Speaker, this House passed a number of important tax reduction 
bills over the past two years, only to see them fall victim to 
presidential vetoes. We are now in a position to break this pattern and 
offer real tax relief for hard working American families. It is 
refreshing to know that we now have a partner in the White House who is 
willing to work with us in achieving this goal, rather than dredging up 
the tired old class warfare excuses not to enact real reductions.
  This change in political climate could not have come at a better 
time. After years of sustaining high levels of growth, the economy took 
a sharp downturn in the 4th quarter of last year. While it does not 
appear that it has slipped into recession, this possibility cannot yet 
be discounted. Given this, as well as the fact that the long-term 
budget surplus estimates continue to exceed expectations, it makes 
sense to use a tax cut to help boost our economy.
  I have always strongly supported the premise that everyone who pays 
income taxes should benefit from an income tax cut. Therefore, I 
believe that this legislation to reduce the marginal rates across-the-
board is appropriate. The higher rates were sharply raised in 1993 to 
help reduce the budget deficit. Since then, this increase accomplished 
what it set out to do. At the time there was no reason to believe that 
those tax increases were intended to be permanent. Given our current 
growing surplus, it is inappropriate not to repeal them.
  This point cannot be overstated. Our Nation is currently enjoying a 
budget surplus, above and beyond the surplus provided by the Social 
Security Trust Fund. Over the next ten years this surplus is expected 
to substantially increase.
  For those who cite the inaccuracies of long term projections as a 
reason to oppose tax cuts, it bears noting that the Congressional 
Budget Office is using very conservative numbers for economic growth 
assumptions in formulating these projections. The rate of economic 
growth has exceeded similar projections over the past five years, and 
should it continue to do so in the future, the size of the surplus will 
only grow.
  Moreover, the last five years have shown that the Congressional 
Budget Office (C.B.O.) has consistently underestimated the level of 
economic growth and the size of the surplus. My colleagues may remember 
that the budget was not supposed to initially go into a surplus until 
2002. The changeover actually occurred in 1999, three years early.
  Yet, despite the President's assurances to the contrary, there are 
those on the other side of the aisle who charge that this tax cut is 
risky and reckless. Yet history has shown the minority's definition, 
and the numbers behind it, have shifted dramatically. In 1999, they 
charged that any tax cut over $250 billion was reckless. During last 
year's campaign, the Democratic candidate stated that any cut over $500 
billion was risky. Now, less than four months later, the minority is 
willing to cut taxes by $900 billion, far more than the risky tax bill 
this House passed in the First Session of the 106th Congress.
  Finally, it bears mentioning that whenever taxes have been cut, be it 
marginal rates or capital gains, tax receipts have subsequently grown. 
This has occurred despite the alarmist predictions of the opponents of 
tax cut reductions. If history is any guide, tax receipts will increase 
after this bill becomes law. When tax receipts increase, so does the 
surplus.
  Accordingly, I urge my colleagues to support this tax reduction 
legislation.
  Mr. HINOJOSA. Mr. Speaker, I am here today because I am greatly 
disturbed by the irresponsibility being displayed by the Republican 
Leadership in Congress today.
  I cannot believe that the rules of Congress and the People have been 
violated once again, and now--we are going to vote on a tax cut before 
we pass a budget.
  No family or business would make a decision that would have a major 
impact on their finances for the next ten years without first sitting 
down and working out a budget to figure out what they can afford. We 
owe it to the citizens of America to apply that same common sense 
principle to the Nation's budget and its security.
  I am further outraged that the plan the Republicans have offered 
gives the lions share, 43 percent, of the peoples surplus to the 
wealthiest one percent and ignores the majority of the hard working 
Americans who greatly contributed to the creation of the surplus.
  This outright robbery is further perpetuated when one realizes that 
most Americans will not be impacted by the tax cut, especially not the 
$25,000 a year waitress that the President speaks of with such 
conviction.
  For this reason, I ask you to pass a measure that utilizes common 
sense and provides for all American families and American workers. This 
can only be done by passing the Rangel Amendment, an amendment that 
takes care of our families and our future.
  The Rangel measure that cuts taxes responsibly and for everyone by 
increasing the earned income tax credit and helping our married 
families get tax relief.
  Let there be no mistake; today we stand at a crossroad with two 
paths:

       The first gives the surplus to the wealth for expanded 
     purchases of luxury items. The second gives Americans the 
     extra funds needed to live a better life. If a decision is to 
     be made today, I hope we make the right one.
  Mr, KNOLLENBERG. Mr. Speaker, passing H.R. 3, the Economic Growth and 
Tax Relief Act of 2001 is simply the right thing to do.

[[Page H785]]

  Whenever the federal government collects taxes, it takes money away 
from hard-working American people. The government isn't entitled to 
that money. It's the people's money and the government takes it away. 
We, as Members of Congress, have a responsibility to ensure the 
government doesn't take away any more than it needs.
  Over the next ten years the federal government is expected to run a 
surplus of approximately five and a half trillion dollars. In other 
words, the federal government will be taking away from the American 
people five and a half trillion dollars more than it needs to pay its 
bills.
  This is simply wrong. people need their money to pay their bills, put 
food on their tables, send their children to college, plan for their 
retirement, and meet all of the other challenges they face every day.
  Under the President's plan, we will send a mere 30 percent of that 
tax overpayment back to the people who work hard to earn their money. 
Not the entire tax surplus, just 30 percent of it. And the legislation 
we're debating today is even less than that--roughly 17 percent.
  Mr. Speaker, passing this bill is not only the right thing to do; we 
have a fundamental responsibility to do it for the people we represent.
  This bill will increase fairness in the tax code, allow every 
American income tax payer to keep more of their own money, and provide 
support to our economy at a critical time.
  I urge all Members to do the right thing tonight and vote in favor of 
this legislation.
  Mr. ALLEN. I rise in opposition to this excessive, unfair Republican 
tax cut that will block our best opportunity to improve our education 
and health care systems for years to come.
  Abraham Lincoln lifted America's spirits by calling on ``the better 
angels of our nature.''
  President Franklin Roosevelt inspired a nation to set fear aside. 
President Kennedy and others asked for sacrifices to enhance the common 
good.
  But the rallying cry of the Bush Administration is different: ``It's 
not the government's money. It's your money.''
  What a shriveled up vision of what the American people care about! We 
are better than that.
  This tax cut is a clarion call for more spending on luxury goods by 
the wealthiest Americans.
  Those earning over $300,000 per year can buy a Lexus every year with 
this tax cut. Those earning about $35,000 would have difficulty getting 
a muffler.
  This tax cut slams the door on spending for the common good.
  To those seniors who cannot afford their prescription drugs, this 
bills says forget it, you're on your own.
  To those students, teachers and parents who know that our schools 
need full funding of special education, this bill says forget it, 
you're not a high priority.
  To the baby boom generation not that far from Medicare and Social 
Security, this bill says forget any help from general revenues any time 
soon.
  The Democratic alternative is half this size and is fair to middle 
income Americans.
  A tax cut half this size would allow us to put the medicines they 
need in the hands of our seniors.
  A tax cut half this size leaves room to fully fund 40 percent of the 
special education mandate we imposed on the states.
  A tax cut half this size leaves room to shore up Social Security and 
Medicare instead of privatizing both for the benefit of insurance 
companies and brokerage firms.
  The American people want and deserve lower taxes, but not a cut so 
large that seniors still cannot afford their drugs, our kids are stuck 
in inadequate schools, and baby boomers lose confidence in Social 
Security and Medicare.
  I urge my colleagues to reject this bill.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I rise today in strong 
support of H.R. 3, the Economic Growth and Tax Relief Act of 2001.
  The U.S. economy is currently experiencing a slowdown. In order to 
fend off a further downturn or recession, it is imperative that 
Congress act quickly to breath life back into the economy. By reducing 
income tax brackets retroactively to the beginning of this year, H.R. 3 
provides immediate tax relief by decreasing withholding rates. This 
will result in an infusion of cash into the economy--up to $360 for a 
married couple in 2001--that our economy urgently needs. Some say that 
it is reckless to bring a tax relief bill to the floor of this body 
before we have adopted a budget resolution. I disagree. Rather, I 
commend Chairman Thomas for recognizing the fact that undue delay would 
deaden the positive, restorative effects that lowering marginal rates 
would bring. Furthermore, this being a bicameral legislature, we must 
wait for the other body to do their part on this bill. It is even more 
imperative, then, that we spur them on by doing our work expeditiously. 
Before a final conference report comes before us, we will have the 
benefit of a budget resolution. But if we wait for the final budget 
resolution before we begin the process, the tax cut could lost its 
stimulative effect on the economy. We have a choice: Either take the 
necessary steps to return our country to the positive growth, or bring 
the danger of recession ever closer through indecision and delay.
  H.R. 3, is only the first step in bringing tax relief to the American 
people. There are other areas of the tax code that Congress must fully 
address--the marriage penalty, the alternative minimum tax, higher 
savings levels for Individual Retirement Accounts, and the death tax; 
however, those must wait for a later date. Our focus now must be on 
keeping the economy healthy, keeping Americans working, keeping small 
businesses open, and ushering more and more people into the middle 
class through the prosperity that has blessed this country in recent 
years. Across-the-board cuts affect withholding rates now and give an 
immediate stimulus to the economy.
  Finally, reducing marginal tax rates is an issue of fairness. I 
believe that is simply wrong that the government currently takes away 
up to 40 percent of an individual's income--and much more when other 
taxes are taken into account. We must encourage enterprise. We must 
encourage savings. Our policies must reflect the oft-touted belief in 
the American Dream that through hard work and sacrifice one might build 
a better life--not become the object of higher government tolls and the 
subject of vilification merely because of success. I have heard from 
many of my constituents who would be positively affected by the relief 
this bill would bring. They are not the ``idle rich.'' They are 
individuals and couples who have mortgages to pay. They are parents 
trying to pay for their children's educations. They are making car 
payments. They are the people who tirelessly serve our federal 
government. They are the entrepreneurs whose small businesses are at 
the core of the high-tech revolution that has fueled our economy's 
growth over the past several years. I can assure you that they do not 
live lives of ease as has so often been portrayed by opponents of this 
plan. They deserve to get a small portion of the money that they have 
overpaid to the government back. It was their hard work and sacrifice 
that rescued the government from the massive debt it had accumulated 
over years of bloated excess. Now that they need a helping hand, we 
must not abandon them. I urge my colleagues to support this bill.
  Ms. PELOSI. Mr. Speaker, as a Member of the Appropriations Committee, 
I am particularly concerned about the impact of the Bush tax cut on the 
overall federal budget. We must not sacrifice investments in education, 
infrastructure and health, which make our economy stronger, in order to 
provide excessive tax cuts.
  In 1981, President Reagan passed a major tax cut, increased defense 
spending drastically, and supported cuts in investments in the American 
people. His policy marked the beginning of the worst economic downturn 
since the Great Depression and quadrupled the national debt.
  Over the last eight years, the Clinton Administration has eliminated 
the budget deficit but we still have a $3.5 trillion national debt. 
Interest payments on the debt alone cost the United States more than 
$200 billion a year. A lower national debt means lower interest rates, 
lower mortgage payments, lower car payments, lower credit card 
payments, and more jobs. Paying down the national debt will put the 
U.S. government in the best possible position to meet the Social 
Security and Medicare needs of future generations, when the retirement 
of the ``Baby Boom'' generation places a significant strain on the 
federal budget.
  Nearly $3 trillion of the $5.6 trillion projected surplus is supposed 
to be dedicated to Social Security and Medicare. Are the Republicans 
going to take those funds from seniors to pay for their tax cut? 
Increased debt service, farm payments, extending expiring tax credits, 
and emergency defense and non-defense spending will also need to be 
accounted for in a responsible budget.
  Unfortunately, the Republican majority has jammed this tax cut 
through before we even have a budget resolution. Therefore, we are 
forced to have this debate without any budgetary framework. However, we 
do know that of the nearly $2 trillion of the surplus that remains 
after we protect Social Security and Medicare, funding a tax cut must 
compete with providing a prescription drug benefit for seniors and the 
modernization of our schools, two of the top priorities of the American 
people. Do we want to underwrite an unaffordable tax cut at the expense 
of our children's education and our seniors' and veterans' health?
  I urge my colleagues to oppose the Bush tax rate plan.
  Mr. COSTELLO. Mr. Speaker, I rise in opposition to the $1.6 trillion 
tax cut package proposed by President Bush as well as the Democratic 
substitute that will be voted upon today with the Bush tax cut plan.

[[Page H786]]

  I believe that the Congress can and should pass legislation giving 
tax relief to the American people. That is why last year I voted to 
eliminate the death-inheritance tax and the marriage penalty. 
Unfortunately, President Clinton vetoed both bills. However, when these 
bills come back before the Congress in this session, I will vote to 
again eliminate the inheritance tax and the marriage tax penalty.
  The Congress can and should give tax relief to the American people 
after President Bush lays out his spending plan to the Congress and the 
American people and after we put a mechanism in place to adjust the 
plan if revenue projections prove to be wrong.
  Most of us remember the 1981 tax cut proposed by President Ronald 
Reagan and approved by the Congress cutting taxes for the American 
people with the promise that the tax cut would help the economy and 
balance the federal budget within three years. Then candidate George 
Herbert Walker Bush called the Reagan plan voodoo economics. Republican 
Senator Howard Baker called the Reagan plan a river boat gamble. 
Unfortunately for the American people, George Herbert Walker Bush and 
Senator Baker were right.
  In fact, taxes were cut but spending continued to increase and the 
American people saw two decades of huge budget deficits and saw the 
national debt explode to $5.7 trillion. President Reagan and the 
Congress were successful in cutting taxes but not holding down 
spending.
  Last week, former Chairman of the House Ways and means Committee 
Republican Bill Archer said that if anyone believes that we will have a 
surplus eight or ten years from now with this tax cut plan is 
``hallucinating''. Others have questioned the ability of this President 
and this Congress to control spending. They fear a repeat of the Reagan 
years with taxes being cut and spending continuing to increase 
resulting in a return to the days of huge deficits that will hurt 
interest rates and the economy.
  Today I intend to vote against the Bush tax cut plan as well as the 
Democratic substitute. I believe that we should force the President to 
lay out his spending plan so that we can see how the President intends 
to fund critical programs important to the American people like Social 
Security, Medicare/Medicaid, national defense and other important 
programs. After the President lays out his budget to the Congress and 
the American people then we should bring a tax relief package before 
the Congress that is realistic and that has a mechanism that directly 
ties tax cuts to controlled spending and the amount of revenue that 
will come to the federal treasury each year.
  Mr. Speaker, today we should reject both the Bush tax plan and the 
Democratic substitute and come back to pass a bill that gives tax 
relief to the American people later this spring after the President 
lays out his detailed budget to the American people.
  Ms. SOLIS. Mr. Speaker, I rise today in adamant opposition of H.R. 3, 
the Economic Growth and Tax Relief Act which was proposed by President 
Bush.
  In the past few months, the Bush Administration has desperately tried 
to convince the American public that their planned tax cuts are fair, 
that their tax cuts rightfully return money to those who have paid the 
most, that their tax cuts will help spur our economy.
  Evidently, the Bush Administration's attempts have failed. In a Los 
Angeles Times poll released today, the majority of Americans support 
the alternative Democratic tax bill--and for good reason. The public is 
not gullible. No matter how you skew the numbers, no one can deny that 
the richest Americans stand to gain the most from this plan, while 
virtually no money will be returned to the working poor.
  In addition, the public understands that our projected budget surplus 
is not stable; we need to pay down our deficit and not repeat the 
disastrous tax policies of the 1980's which plunged us further into 
debt. President Bush wants us to risk slashing funds for Social 
Security, housing, health care, environmental protection and a slew of 
other vital programs for the sake of making the rich even richer. How 
can these cuts possibly better our society?
  Under President Bush's proposal, the richest one percent of the U.S. 
population will receive more in tax cuts than the bottom 80 percent of 
the population combined. This high-income group pays 20% of all federal 
taxes, yet they would receive at least 36% of the tax cuts under the 
Bush plan. That means that the amount in tax cuts that these 
individuals would get back would be nearly double the share of federal 
taxes that they pay.
  On the other hand, the bottom 40 percent of tax filers, a group that 
makes up a significant population in my district, will only get four 
percent in tax cuts--an average of about $115. Moreover, 12 million low 
and moderate income families will get absolutely nothing in return--
that is almost one-third of all families in the United States and 
includes 24 million children.
  Among African-American and Hispanic children, the percentage rises to 
over 50% who will not see one penny of the Bush tax cut. Even the much 
hyped increase in the child tax credit from $500 to $1,000 would not 
assist those who need it the most. How can President Bush justify 
increasing the income required for families to qualify for this child 
tax credit to $200,000, rather than expanding the Earned Income Tax 
Credit for those struggling families who can barely feed their 
children?
  This tax plan grossly neglects the needs of honest, hard working 
citizens whose toil and sweat are the source of America's greatness. 
Where is the support for the seniors and veterans of my district who 
helped create the surplus that we are squandering today? This plan 
proposes an estate and gift tax repeal--a tax which, according to some 
figures, would go to only the top 5% of the country's population! Yet, 
our seniors and veterans, who dedicated their youth to the growth of 
our nation's wealth and security, will receive no specific tax cut 
whatsoever. They will have to be content with insufficient assistance 
from federal programs that are in danger of being cut due to President 
Bush's exorbitant tax reductions.
  The bottom line is that the Republican tax plan is bad policy. 
President Bush's proposal does nothing but deplete our hard earned 
surplus for the benefit of those who need it the least. I vehemently 
urge my colleagues to act responsibly and block this disastrous measure 
from becoming law.
  Mr. OTTER. Mr. Speaker, I rise today to voice my strong support for 
H.R. 3, the ``Economic Growth and Tax Relief Act of 2001.'' This bill 
will ease the terrible yoke of federal taxation that is crushing the 
people of Idaho and the rest of the United States. I am proud of 
President Bush for proposing this bill, proud of our House leadership 
for bringing it to the floor so quickly, and proud to say that I will 
vote for it.
  This bill takes the common sense view that taxpayers deserve their 
money. The people of Idaho can better prioritize what to do with their 
hard earned money than bureaucrats in Washington, D.C. Passing this 
bill says that we trust the people in the states. We trust hardworking 
people. They are smart enough to make the money. Aren't they smart 
enough to spend it?
  By reducing the number of tax rates and the rate of taxation this 
bill will lower our record high tax burden. Right now America pays more 
of its GDP in taxes than it ever has in peacetime. Currently Americans 
are paying Uncle Sam more in taxes than they spend on food, clothing, 
housing, and energy costs combined. This legislation provides a fair, 
needed refund of tax overpayments to all Americans. It is a great first 
step.
  It is a first step, but not the only step. Farmers and small 
businessmen in my state are looking forward to repealing the estate 
tax. Without estate tax repeal the money we return to the American 
people today will only be stolen from their heirs. Our farmers and 
small businessmen are already suffering from drought, electricity 
shortages and record low commodity prices. The least we can do is say 
``If you are successful, your children can inherit what you worked 
for.''
  The people of Idaho are waiting for us to pass lower, fairer taxes to 
help them in their time of need. The people of America are waiting for 
us to pass lower, fairer taxes to get the economy moving again. Let's 
vote for the Economic Growth and Tax Relief Act and give the people 
what they want.
  Ms. KILPATRICK. Mr. Speaker, today I rise in strong opposition to the 
tax proposal submitted by President Bush. I do so for many reasons, 
none of which are founded on the ``myth'' so blatantly pushed by the 
President, that the Democrats are engaged in class warfare.
  We are not here to engage in warfare between the rich and the not-so-
rich. We are here today to preserve those things which most of us here 
in Congress have fought so hard to promote over the course of the past 
8 years. We are here to maintain the fiscal discipline that has given 
us unprecedented prosperity in good times. We are here to maintain the 
fiscal discipline necessary to insure that in uncertain times, the 
nation does not slip into recession.
  Today we should be mindful of the state of the nation back in 1992. 
Just a little more than 8 years ago we saw an economy that was 
faltering. Unemployment peaked at nearly 7%, as layoffs spread 
throughout the land. Consumer confidence was low. In the political 
arena fingers were pointed in all directions. President George H.W. 
Bush's administration blamed the voodoo economics of the previous 
Reagan era. Democrats agreed. The Republican faithful argued that the 
excesses of the Democrat Congress resulted in the sharp economic 
downturn.
  In this context, former President Bush chose to do what he believed 
was the responsible thing. He chose to raise taxes--and he suffered the 
consequences. He suffered the scorn of his political opponents, but 
more importantly, he suffered the scorn of the majority of the 
Republican establishment. Although he was trying to do the responsible 
thing and

[[Page H787]]

mitigate the increasing federal deficit, he violated the cardinal rule 
for which Republicans claim to stand. He violated that often repeated 
Republican refrain, that ``God created Republicans to cut taxes''--not 
increase them.
  Well today we stand before the American people because President 
George W. Bush faces a choice similar to the one his father made: 
whether to do the responsible thing, or to do what history has so 
vividly illustrated is the wrong thing to do. I am sure his father's 
experience resonated prominently in his decision to forward this tax 
proposal we consider today. His father made a tough choice to increase 
taxes. Former President Bush chose to counter the policies of his 
predecessor, Ronald Reagan, whose history I am sure also resonates 
prominently in President Bush's decisions today.
  After all, President Reagan drastically cut taxes during the 1980's 
and he is revered by the Republican establishment. Republicans loved 
his execution of Republican ideals and credit him with the restoration 
of hope and optimism to the American people. Most importantly, however, 
in the Reagan lesson, is the fact that he was reelected for a second 
term.
  Today, I stand here to remind the American people of the cost of Mr. 
Reagan's policies. I come from the city of Detroit. I represent a 
population that was devastated in many ways by the policies of the 
Reagan administration. I watched as services critical to my city's 
youth were cut. No longer were funds made available for successful 
after school programs. Budgets for parks and recreation stagnated, 
leaving few alternatives for youth activity. The loss of these benefits 
soon led to the feelings of despair and desperation. Drugs plagued the 
inner city and the introduction of crack cocaine into our neighborhoods 
devastated the community. Today the City of Detroit is still digging 
out from the plague of crack-cocaine in the 1980s.
  I point this out to say there are consequences to this tax-proposal--
both in economic, and most importantly, in human terms. Sure I am for a 
tax cut. I am not, however, for irresponsibility.
  I ask the American People to reflect on what we consider here today. 
Today, there are projected surpluses of approximately $5.6 trillion. Of 
this amount, $2.5 trillion in attributable to the Social Security Trust 
Fund and $.4 trillion or $400 billion is attributable to the Medicare 
Trust Fund, leaving the Non-Social Security, Non-Medicare Surplus at 
$2.7 trillion.
  President Bush has proposed a tax-cut across all income brackets. The 
cost of which is $1 trillion dollars not including other tax proposals 
he plans to introduce. If we include these other proposals, the tax cut 
could cost anywhere from $1.6 trillion to upwards of $2 trillion.
  Additionally, the Joint Committee on Taxation, a bipartisan committee 
on taxation, recently released estimates that show that the true cost 
of President Bush's Proposal exceeds the cost listed in the 
Administration's Budget. Their study also shows that the cost of 
remedying the problems associated with the Alternative Minimum Tax 
would increase to $300 billion over 10 years under the Bush proposal. 
This would raise the cost of the Bush tax cuts to nearly $2.5 trillion 
over the next ten years. This would mean that only $200 billion dollars 
of the surplus would remain for other national priorities.
  In order to put this in perspective, I would like to point out that 
the cost of the proposed national missile defense system is estimated 
to be nearly $30.2 billion. Improving the lives of our military 
personnel is estimated to cost nearly $100 billion. We do not know the 
cost of privatizing a portion of Social Security, or other increases in 
spending promised by President Bush during the campaign. And even after 
we address these concerns this bill does not even consider the cost of 
reforming Medicare, the cost of a prescription drug benefit (estimated 
at nearly $200 billion) or the cost of addressing this nation's 
education needs.
  I would also like the American people to ask themselves a question. 
Would you in your own personal finances write checks based on money 
that you did not have in your account? I would bet that most Americans 
would never be so careless with their expenses and the expenses of 
their families. So how can we today afford to be so careless with 
surpluses that are not yet in treasury accounts?
  Nor would you spend money for a vacation, or new car, without looking 
at how such an expenditure would affect the rest of your budget. You 
would not go out and buy a car knowing that the payment may prevent you 
from being able to pay your rent or mortgage. Yet here, we will not 
have the opportunity to debate the full budget in Congress prior to 
voting on this tax bill. Forget about the fact that by law (the 
Congressional Budget Act) Congress must pass a budget before it passes 
tax breaks.
  We were told that the President's priority was education. You would 
think that as a body, we would consider education legislation first. 
Today we see the true priorities of the administration and the 
leadership of this Congress. President Bush and the Republican 
leadership tell the American people that they care about education, yet 
they war willing to pass a tax cut that may jeopardize that very 
priority. Don't be surprised if we later learn that in order to 
accommodate today's tax cut, we must make sacrifices in education and 
other national priorities.
  I do not stand here today to criticize without offering a credible 
alternative. Moreover, I would like the public to know that there are a 
number of alternative proposals from both Democrats and Republicans. 
However the leadership, through the rules committee, has limited the 
consideration of many of these proposals--this all in the so called 
spirit of transparency and bipartisanship.
  Do not be led to believe that Democrats do not believe in tax relief. 
There is an alternative Democrat tax-cut proposal. The Democrat 
proposal is a simple budget plan that directs \1/3\ of the Non 
Medicare, Non-Social Security surplus towards a tax cut, \1/3\ toward 
our national priorities like education and a prescription drug benefit 
and \1/3\ of the surplus to paying down the national debt. This tax cut 
is responsible in its scope and addresses the other priorities 
expressed by the American people. More importantly, the Democratic 
alternative would provide tax relief where tax relief is needed most--
to the working families of this country.
  Ms. BALDWIN. Mr. Speaker, I rise today in strong opposition to H.R. 
3, the Economic Growth and Tax Relief Act. This $958 billion tax cut, 
which is part of a larger $1.6 trillion tax cut package, does not focus 
relief on those who need our help the most.
  I support responsible tax cuts for working families, which is why I 
am voting for the substitute being offered on the floor today. The 
substitute offers marriage penalty tax relief, and provides larger 
refunds to low and middle-income families with children.
  Two weeks ago I held listening sessions across the Second District of 
Wisconsin. I heard from many who are struggling to pay their bills. 
Some showed me their prescription drug receipts as evidence for the 
increasing costs they must pay. Others told me about the tremendous 
increases in their home heating bills, which have jumped dramatically 
due to the recent increases in the price of natural gas and other 
energy sources.
  Many of the families I heard from during my listening tour do not 
make enough money to benefit substantially from this tax cut plan. Some 
have incomes so low they do not owe federal income taxes. Those 
families would receive nothing from the tax cut proposed in H.R. 3. 
Other middle income families will receive very small tax cuts that pale 
in comparison to their increased expenses.
  In addition to the fact that many middle and lower income families 
would not benefit substantially from this legislation, the magnitude of 
this tax cut would limit resources that could go to programs to address 
their very real needs. I believe a tax cut this large puts at jeopardy 
the funds needed to add a Medicare prescription drug benefit. This 
means that the seniors I represent will not see adequate relief in 
addressing their health care needs. If this tax cut is passed, the Low 
Income Heating and Energy Assistance Program (LIHEAP) could face a 
freeze on its level of funding, or even worse, a cut. This would be 
devastating for people with low incomes in my district who are 
confronting enormous heating bills during this frigid Wisconsin winter.
  Today's tax-cut legislation does not address the needs of families 
struggling to pay their increasing bills every month. Those who 
genuinely need relief will not receive the real fruits of this 
legislation. We must place a higher priority on a tax cut that provides 
relief to those who need it most. We must pass a responsible tax cut 
that does not jeopardize the fiscal health of this nation.
  Mr. STARK. Mr. Speaker, I vehemently oppose President Bush's tax cut 
plan and encourage my colleagues to do the same.
  I did not support the bill in the Ways and Means Committee markup 
because the House has not adopted a budget; the tax cut is one piece of 
a larger tax plan that imperils Social Security and Medicare; the bill 
leaves no room for more deserving priorities like a Medicare 
prescription drug benefit for seniors and better education for our 
children; and it provides far greater tax breaks to wealthy Americans--
like members of Congress--than it does to the vast majority of working 
families.
  A prudent family who has just experienced an increase in their annual 
salary would not run out to buy a yacht before they figure out how much 
debt they have on their credit cards, whether or not they're saving 
enough for the kids' college education, and if their retirement savings 
plan is in order. Likewise, Congress is acting irresponsibly by not 
setting spending priorities before blowing all our forecasted resources 
on a massive--not requested--tax cut.
  President Bush did not send Congress a budget proposal. He sent 
Congress a blueprint for disaster dressed up in partisan rhetoric. The 
Bush ``budget'' is merely the rationale for

[[Page H788]]

a bloated tax cut. There are also some $20 billion in domestic spending 
cuts for next year alone that the President has yet to detail in his 
budget. These cuts could result in fewer cops on the street, less 
relief for over-crowded schools, less research and development for 
alternative energy, and reductions in federal emergency assistance.
  Nor, does the President take into account all of the obligations that 
Congress is required to calculate when we devise a real budget. 
Congress is forced to account for an increase in population and 
therefore an increase in spending programs. Congress must account for 
additional interest on the debt when the debt isn't paid down and 
instead spent on a $2.5 trillion tax cut. Congress must account for the 
annual tax extenders that are renewed every single year. However, this 
Administration seems to think itself immune from taking into account 
these real costs to the federal government. This Congress isn't 
remotely ready to debate--much less vote on--a nearly $1 trillion tax 
cut which is only the smaller portion of an eventual $2.5 trillion tax 
cut.

  President Bush is attempting to persuade the American public that his 
number one priority is education and that he also wants to protect 
Medicare and provide a new prescription drug benefit in the program. 
This is a blatant attempt to mislead America's seniors and parents 
alike.
  The $2.4 billion in education spending increases pales in comparison 
to the $2.6 trillion cut the President plans to give primarily to the 
wealthiest Americans. The Administration's budget blueprint calls for a 
12% increase in education spending. But once again, this figure is 
completely misleading. Bush calculates $2.1 billion in funds that 
Congress already provided for 2002 appropriations and already 
designated for specific education programs. You can't truthfully count 
these funds twice.
  Likewise, the President is double-counting on Medicare and Social 
Security. His rhetoric states that he's protecting the Medicare and 
Social Security trust funds. In fact, his budget raids both trust 
funds--that Congress has consistently voted to put into a ``lock box'' 
to be used only to extend the solvency of Medicare and Social 
Security--as a resource to fund the wrong-headed priorities of his 
budget.
  Because of the overwhelming size of the tax cut he's proposing, he 
also fails to provide the necessary resources to create a Medicare 
prescription drug benefit. Make no bones about it--the funds don't 
exist in President Bush's budget to provide seniors with an adequate 
and affordable Medicare prescription drug benefit. And, his use of the 
Trust Fund to finance other parts of his budget could imperil the 
program's future.
  Finally, the President attempts to sell his tax package to the 
American people by advertising it as an economic stimulus. The problem 
with this misleading advertisement is that the entire tax plan isn't 
fully phased in until 2006. Most economists agree that most of the tax 
relief that has been promised by the President won't take effect until 
the economy has recovered.
  I want my constituents to know the real substance of what I am about 
to vote on. This rate reduction tax bill is a small part of a larger 
problem. There is no real budget in place that spells out the realities 
of our spending priorities. The bill before us today sets up the 
federal government for increasing deficits. The tax benefits of this 
bill--which are wrongly directed to disproportionately assist the 
wealthy--arrive too late to provide any real stimulus for the economy. 
This will then force Congress to make drastic cuts to the programs that 
low and middle-income workers rely on like Medicare, Social Security 
and quality public education. It is unfair to leave our children with 
the burden of our federal debt so that the GOP can give away trillions 
of dollars to America's wealthiest taxpayers. I urge my colleagues to 
vote no on H.R. 3.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in strong opposition to the 
Bush Tax cut plan and in support of the Rangel Democratic Substitute 
because H.R. 3 is misguided and just plain wrong. The Democratic 
proposal, however, would provide immediate and fair tax relief, while 
not threatening the surplus that so many of us worked hard to make 
possible.
  Instead of following the law which requires that a budget be passed 
before tax cuts, the Republican Leadership has decided to ignore the 
law and rush to the floor a tax cut proposal which if it is adopted, 
will preclude us addressing some of the critical needs of the people of 
this country.
  By the President's own admission, this tax cut is designed to make 
sure there is no money for spending; meaning they would take this 
unprecedented surplus and unique opportunity to secure our future and 
do good for those who need it most, and give it away to those who need 
it least.
  Regardless of what my friends on the other side of the aisle say, Mr. 
Speaker, independent organizations report that an estimated 12.2 
million low and moderate income families with children--31.5 percent of 
all families with children--the majority of them headed by hard working 
adults, would not receive any tax reduction at all.
  That means primarily African Americans and other people of color. We 
won't benefit from the tax cut, that is clear. But what is the 
President talking about when he says he wants to cut government 
spending?
  Today, with the sure passage of the Bush tax cut, the House begins 
the first step in dismantling all of our hard work and the progress 
that we have made in education, health care, housing, economic 
opportunity and the many other needs of our constituents.
  He is in essence, talking about leaving many Americans, especially 
Black and Hispanic behind.
  He is talking about inadequate spending for education, the issue 
Americans care about most. But others will talk about that.
  He is talking about closing the doors of economic opportunity. For 
example, he proposes no New Markets initiative, a program that would be 
the first ever by SBA to actually provide the venture capital needed in 
our communities so that our constituents can open a business, create 
jobs, and pull our communities out of economic distress.
  The Bush tax cut will also mean that 45 million Americans will 
continue to be without health insurance, and that HMO's will continue 
to make profits by denying care. It also means that over 25 million 
seniors will still be denied prescription drug coverage, and that 
Americans living in the territories and others living in the states 
will be denied access to health care because Medicaid will be cut so 
that those who are in the top 10% of incomes in this country can get 
more.
  Mr. Speaker, we applaud the almost $3 billion increase for research, 
but African Americans, Latino Americans, native Americans, and Asian 
and Pacific Islanders need health care now.
  I need not remind you, my colleagues, that health care is a right not 
a privilege--not for some, but for all.
  We have the resources today to right many of the negative commissions 
and omissions of the past. On behalf of the people of this country, we 
must insist that President Bush and the leadership of this Congress not 
to squander our wealth, but invest it in the people of this nation 
instead.
  Today portends not to be America's finest hour. But there is still an 
opportunity to help her live up to her legacy by passing the Democratic 
Substitute.
  Under the Democratic Substitute, a new 12% tax bracket would be 
created, giving an across the board rate cut for all Americans and 
overwhelmingly benefit middle income taxpayers. Additionally, and most 
importantly, the Democratic alternative will give those working 
families who only pay payroll and federal excise taxes a refund through 
expansion of the Earned Income Tax Credit.
  Finally, the Democratic alternative would provide families with 
children who earn less than $65,000 within most cases larger tax breaks 
than under the Bush proposal.
  My colleagues we must tell the President and the Congress: ``No tax 
cut until our Seniors are secure, our children have access to a quality 
public school education, and until everyone--everyone--has access to 
quality health care.''
  Mr. BALLENGER. Mr. Speaker, President George W. Bush and the 
Republican Congress understand that we can achieve our budget 
objectives while providing this long overdue tax relief--while, 
simultaneously, protecting Social Security, Medicare and retiring the 
public debt. My constituents share this vision, and have written the 
following to me in support of our efforts:
  ``The bottom line is, we are a low to moderate income working class 
family with a college age daughter. We pay huge amounts of income tax 
in comparison to our net worth and earnings, and we do not qualify for 
any assistance. $1,600 is a lot of money to us. Let us keep more.''
  ``Two of our children are in college while the other two are still at 
home. My husband and I both work. I prepare the payroll at my job and 
see how much is withheld from every paycheck. The American people 
already pay too much in taxes.''
  ``We are not in the top half or the bottom--we are caught in the 
middle. We get no extra help, nor do we want any, but we pay one-third 
of our income in taxes. Please help.''
  ``Please remember Mr. Ballenger, it's our money.''
  ``As a mother of three, I feel this package would greatly help our 
family and allow my husband and myself to better provide for our 
children.''
  ``As a Navy retiree and the father of two school age children, I 
would greatly benefit from this refund of my `overpayment' of taxes.''
  ``It really does not matter to me if Bill Gates gets a big enough tax 
refund to buy himself a whole fleet of Lexus cars, my only concern is 
what I'm going to do with my tax refund.''

[[Page H789]]

  ``Please hold the Democrats accountable for their distortions about 
the Reagan-era tax cuts--remind them of the late 70's under a Democrat 
president and the inflation of that time.''
  My colleagues, let's vote for H.R. 3, the first installment in our 
tax relief agenda.
  Mr. STUPAK. Mr. Speaker, unfortunately I am not able to vote on this 
issue because of a prior family commitment. With all that has happened 
to my family in the past nine months, this was a commitment I vowed to 
keep!
  In our current times of economic surplus, and in light of Federal 
Reserve Chairman Greenspan's recent statements, I am in favor of tax 
cuts and believe that we need to use this opportunity to return money 
to hard-working Americans. Furthermore, with some signs of an economic 
slowdown, I hope that we can examine ways that a tax cut can act 
quickly to boost the economy. However, I cannot support President 
Bush's tax cut plan; it is simply too expensive and too speculative, 
will jeopardize vital programs such as Social Security and Medicare and 
will prevent us from taking aggressive action to reduce our nation's 
outstanding debt.
  President Bush's $1.6 trillion tax cut package will actually cost 
more than $2 trillion when other hidden costs are taken into account, 
such as the costs of making it retroactive and additional interest 
costs of the national debt. This is simply too expensive. It leaves no 
room to ensure the future solvency of Social Security and Medicare, to 
reduce the debt and to account for future budgetary needs, such as our 
children's education or a prescription drug benefit for our nation's 
seniors.
  I believe we must plan responsibly. Our first priorities must be to 
use the surpluses to protect Social Security and Medicare and pay down 
our national debt. In addition, we must leave room for the budgetary 
needs that inevitably occur, be they unforeseen needs for emergency 
relief, or because of an increase contained in the budget that 
President Bush has indicated he will propose. It is important to note 
that while Republicans in the House are rushing to vote on this issue, 
the Senate has indicated that it will hold off on any tax cut votes 
until the President's full budget is set forth. As any business or 
family would do, Congress needs to know its budget before determining 
how much it can afford to spend on a tax cut. The President has not yet 
offered Congress a complete budget to review. When he does so, we can 
rationally study this issue.
  Furthermore, the current projected surplus is just that, a 
projection, and we cannot recklessly spend it, even with the best 
intentions. I would not plan my own family's budget that way, and I 
will certainly not invest the nation's future that way. As Chairman 
Greenspan said, ``We need to resist those policies that could readily 
resurrect the deficits of the past and the fiscal imbalances that 
followed in their wake.''
  With responsible planning, I believe that we can promote the 
priorities of paying down the national debt, protecting our seniors' 
retirement and health security, and enacting tax cuts. I want to work 
in a bi-partisan manner with the president and members of both parties 
on Capitol Hill to pass a sensible budget that includes tax relief for 
America's working families. Unfortunately, this is not the approach 
being taken by the President and the Republican leadership; therefore, 
I oppose this package.
  Mr. BEREUTER. Mr. Speaker, this Member rises today in support of H.R. 
3, the Economic Growth and Tax Relief Act of 2001, a bold and fair tax 
relief plan that will reduce the inequities of the current tax code and 
help ensure that America remains prosperous. This measure will reduce 
taxes for everyone who pays income taxes, and it will encourage 
enterprise by lowering marginal tax rates.
  This Member would also like to thank the gentleman from California 
(Representative Bill Thomas) the Chairman of the Ways and Means 
Committee for his efforts in bringing H.R. 3 to the House Floor as it 
provides tax relief to all hardworking taxpayers. However, this Member 
must lament the fact that, in what appears to be a partisan decision, 
none of the Minority Members of the Committee were willing to support 
refunding these surplus tax dollars back to the people who paid the 
taxes--our constituents.
  This Member strongly believes that some considerable portions of the 
Federal budget surplus should be returned to the American taxpayer, 
especially to middle income Americans. And, this Member also believes 
it is symbolically and financially important to use part of the surplus 
to at least make significant reductions in the national debt. 
Therefore, this Member is pleased to support the President's common 
sense plan that funds our nation's top priorities, pays down our 
national debt and gives tax relief to every taxpayer. Over-charged 
taxpayers deserve some of their own money back. It is interesting to 
note that in the first four months of fiscal year 2001, the surplus 
generated $74 billion. Clearly, the American people are being taxed too 
much.
  In fact, Federal taxes are at the highest peacetime rate in history. 
Americans currently pay more in taxes than they spend on food, clothing 
and housing combined. This year, it will take most Americans more than 
four months of paychecks to pay their tax burden.
  This Member is supportive of this tax cut because George W. Bush is 
President and we have a Republican Congress to check truly excessive 
levels of Federal spending. The legislation will help strengthen our 
economy, create jobs, and put money back in the pockets of those who 
earned it and need it most.
  The measure provides immediate tax relief by reducing the current 15 
percent tax rate on the first $12,000 of taxable income for couples 
($6,000 for singles). A new 12 percent rate would apply retroactively 
to the beginning of 2001 and also for 2002. The rate would be reduced 
even further to 10 percent as follows; 11 percent in 2003 through 2005 
and 10 percent in 2006. The reduction in the 15 percent bracket alone 
provides a tax reduction of up to $360 for couples in 2001 ($180 for 
singles), increasing to as much as $600 for couples in 2006 ($300 for 
singles).

  Furthermore, in accordance with President Bush's income tax rate 
reductions, H.R. 3 reduces other income tax rates and consolidates rate 
brackets. By 2006, the present-law structure of five income tax rates 
(15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent) would 
be reduced to four rates of 10 percent, 15 percent, 25 percent and 33 
percent. No American will pay over one-third of his or her income in 
income taxes.
  This Member supports the reduction in the tax rates provided in H.R. 
3 because the bill reduces taxes for all Americans who pay income 
taxes, spurs economic and job growth for all Americans and provides an 
average of $1,600 in tax relief for the average American family (family 
of four) phased-in over a 5-year period. The $1,600 amount represents 
the average mortgage payment for almost two months, one year's tuition 
cost at most community colleges, and the average gasoline costs for two 
cars for one year.
  The legislation will also begin to address the growing problem of the 
alternative minimum tax by repealing the current-law provisions that 
offset the refundable child credit and the earned income credit by the 
amount of the alternative minimum tax. In addition, it should be 
remembered that this is only the first element of the Bush tax plan--
additional tax relief is in sight for married couples and others that 
will benefit from more targeted tax cuts.
  According to the non-partisan Joint Committee on Taxation, savings to 
taxpayers over ten years would be $958 billion under the provisions of 
H.R. 3.
  In closing, Mr. Speaker, this Member would like to express his 
appreciation to our President, George W. Bush, for his willingness to 
steadfastly ``demand a refund'' for the American taxpayer. This Member 
urges his colleagues to support H.R. 3 as an important step toward tax 
relief for all Americans.
  Mr. COYNE. Mr. Speaker, I rise in opposition to this legislation. I 
oppose this bill because it is irresponsibly large. I also oppose this 
legislation because it does not provide enough of its tax relief to 
working- and middle-class households. And I oppose it because we 
shouldn't pass a major tax bill before we pass a budget.
  In my opinion, Congress shouldn't pass a major tax cut until we see 
how it affects the rest of the Federal budget. We received an outline 
of the President's budget plan only last week, but even this outline 
has caused me great concern. This document raised as many questions as 
it answered.
  Normally, Congress doesn't take up a tax bill until after it has 
passed its annual budget resolution. The whole point of the process 
laid out under the Budget Act of 1974 was to avoid making decisions 
about major tax and spending proposals piecemeal--but, rather, to make 
major decisions about taxes and spending as part of the annual budget 
process. I strongly believe that abandoning this process is a recipe 
for disaster. It could well undermine future efforts to address 
pressing national problems like paying down the national debt, keeping 
Social Security solvent, creating a Medicare prescription drug benefit, 
improving education, fighting crime, and preserving our environment.
  I am concerned that if we pass the tax cuts that the President is 
proposing, we might not have enough money left to pay down the national 
debt, keep Social Security and Medicare solvent, and pay for important 
Federal priorities like education and health care--especially because 
the surpluses that he is counting on to pay for his tax cut don't 
exist. They are only estimates that may or may not materialize over the 
next 10 years.

  However, I understand that the Majority in the House will approve 
this bill later today. Consequently, I will do what I can to limit the 
damage that I believe that this bill would do. I will support the 
Democratic substitute, which would lose less revenue than the mark--and

[[Page H790]]

which would result in more of the tax relief provided by the bill to 
low-income taxpayers, the people who need help the most. The Democratic 
alternative reduces the lowest tax bracket from 15 percent to 12 
percent. It also contains $60 billion in Alternative Minimum Tax relief 
and contains $60 billion in tax relief for American working families 
through expansion of the earned income tax credit.
  To those of my colleagues who argue that the earned income tax credit 
is too vulnerable to error, fraud, and abuse, I would only observe that 
it is remarkable that they have not expressed the same concern about 
the much higher error, fraud, and abuse rate for small businesses and 
sole proprietorships--which has been reliably estimated at 40 percent. 
That apparent inconsistency suggests to me that the disagreement over 
expanding the EITC really is a disagreement over who needs tax relief 
the most--and that is a debate I feel confident about winning.
  To sum up, Mr. Speaker, I don't think that we should be considering 
this bill today. We shouldn't mark up major tax legislation until after 
we finish work on the budget resolution. But since the majority intends 
to ram this bill through the House this afternoon, I will do what I can 
to ensure that most of the tax relief this provides will go to the 
hard-pressed middle-class families that Governor Bush talked so much 
about during the recent Presidential campaign.
  I urge my colleagues to support the Democratic substitute.
  Mr. CROWLEY. Mr. Speaker, I rise in strong opposition to the Bush 
Republican tax cut. I oppose this misguided plan to provide tax cuts to 
a select few while leaving working New Yorkers holding the bag.
  Though, unlike the rhetoric you have heard on the other side of the 
aisle--Democrats, like myself, support cutting taxes--they are too high 
and stifling.
  I am a strong believer in tax cuts--as a married man with two infants 
at home, I personally know how devastating the marriage penalty tax 
is--and I have voted in the past to eliminate this onerous tax.
  I have worked with my colleagues in both parties to eliminate the 
regressive tax on talking that levies a tax on every phone call you 
make.
  And as the representative of a middle and working class district 
comprised of a diverse swath of neighborhoods in Queens and the Bronx, 
NY, I know how punitive the estate tax is on the Mom and Pop 
enterprises that dot my district.
  Estate taxes are too high and they must come down.
  I spoke out just yesterday in the Committee on Financial Services for 
legislation that would lower the tax burden on the investing public via 
taxes levied on individuals' 401(k) plans, mutual funds and retirement 
accounts.
  So for people to claim that I, or the majority of my colleagues, are 
opposed to any form of tax relief is ludicrous and out right wrong. I 
am for tax cuts--but responsible tax cuts.
  In 1993, without one single Republican vote, Congress passed an 
austere plan for cutting spending, raising taxes on a targeted few 
wealthy individuals and injecting real fiscal discipline into our 
economy.
  The other side cried that this bill would be the death knell of the 
American economy--but the facts bear them wrong, again. In fact, our 
nation then began to see annual budget surpluses instead of deficits, 
deficits created mostly by fiscal irresponsibility of the Reagan and 
Bush White Houses.
  Now, thanks to the fiscal discipline of the Democratic Party, we are 
in a situation where we have experienced several years of back to back 
annual budget surpluses with more surpluses predicted into the future.
  I am proud to prove the pundits wrong and stand before you today and 
say the Democrats are the party of fiscal responsibility while the 
Republican majority has become the party of fiscal irresponsibility.
  We have seen a decade of incredible economic growth and expansion. 
The virtual elimination of inflation and the smallest interest rates in 
a generation.
  Unemployment went from 8 percent under the last President Bush in 
1992, down to 7 percent, then 6 percent, then 5 percent and then 4 
percent and then a historically low 3.9 percent--unheard of.
  All the while, real incomes rose--again, something not seen during 
the Reagan and Bush Administrations. Home ownership skyrocketed and 
consumer confidence was sky-high. but Americans didn't just spend, they 
invested, and the stock market exploded.
  Coincidence--I think not. It was a careful economic plan worked on by 
the Democrats in Congress--the Republicans continually refused to work 
with us--and the White House as well as the Federal Reserve Bank.
  Democrats cut spending and erased the deficit--all the while the 
percentage of income sent to the Federal government in the form of 
income taxes continued to decline. Now, we want to throw the gains of 
the most prosperous decade in American history out the door to pass a 
backward tax cut plan that will primarily benefit the wealthy.
  Even President Bush himself says a large share of the tax cut 
benefits will go to the rich--finally something we can all agree on.
  We are basing economic forecasts for the next 10 years on data that 
is as reliable as weather reports. A year ago, the Government estimated 
our Nation's 10-year surpluses at a little over three trillion 
dollars--now they ``revised'' it to over $5 trillion--Guess they forgot 
to carry a one. Or, instead of being a mathematical goof, these 10 year 
projections are very flawed. Everyone from Alan Greenspan to the CBO 
agrees on this point.
  No family could budget itself like this, no company would dare give 
away bonuses based for the next 10 years under the guise of favorable 
10-year projections.
  But that's the way the Republicans like to think when it comes to our 
future--they are gambling with Social Security and Medicare. This Bush 
Republican plan represents fiscal irresponsibility at its worst.
  In fact, the President and the Republican Congress refuse to even 
consider an idea of providing triggers in their tax plan in case these 
projected surpluses do not happen. Triggers on these tax cuts are the 
only sensible option to prevent us from returning to the staggering 
Reagan-Bush deficits of the near past.
  But instead, the Republicans want the go-go parties of the 1980's to 
continue whereby we spend all of our children's inheritance and leave 
them with the bill--that stinks both economically and morally, and that 
is why I oppose this foolish and reckless tax cut.
  Congress and the President should work together, with guidance from 
the Fed, to address our Nation's fiscal concerns. I believe the 
economic priorities of the last Administration and of the Democrats in 
Congress are the right ones.
  The expected Federal surplus is the people's money--it is not the 
government's money. Therefore, these funds should be used to benefit 
the people.
  That is why I support a budget strategy commonly referred to as \1/
3\, \1/3\, \1/3\--where our country would use \1/3\ of the surplus for 
tax cuts; \1/3\ for debt reduction; and \1/3\ for increased spending.
  I believe one-third of our surplus should be returned to the American 
people in the form of a tax cut. Not one like the President supports 
which would reward almost $1 trillion of his $2 trillion plan to the 
richest one percent of Americans--but a fair tax plan.
  I support and have voted for the elimination of the marriage 
penalty--something that will not occur even if Congress passed the 
President's plan exactly as written. Using just one-third of our 
surplus will allow for the elimination of this onerous tax. Also we can 
provide families and small businesses estate tax relief.
  Another \1/3\ of our surplus must be used to pay down our national 
debt. I have two young children, I do not want them and millions of 
other children to inherit a multi-Trillion dollar debt because I would 
not provide any fiscal discipline.
  That is morally and economically wrong. The past 8 years America has 
borne witness to the wonders debt relief and deficit elimination will 
have on our Nation's overall economy and growth rates--this is 
undisputed, regardless of what some of my Republican colleagues insist.
  If a family ran its budget like the Republicans want America to run 
its budget, they'd be in bankruptcy court, losing everything they 
worked for--and this will happen to our Nation if we pass these 
economically foolish tax cuts. We cannot let this happen.
  The other third of the surplus should be used to provide for our 
Nation's critical investments, such as providing a prescription drug 
benefit under Medicare or shoring up Social Security or providing a 
well deserved pay raise to the hard working men and women of the U.S. 
military.
  In my own district I know of too many people who ration their own 
medications because they cannot pay for their doses.
  A also support increased public investments in our nation's crumbling 
schools. I released a study several weeks ago showing 97 percent of the 
school children in my district studying in overcrowded and antiquated 
classrooms.
  I believe our children should be introduced to the Internet and 
computers at a young age. It is universally noted that the Internet 
economy has sparked much of our Nation's boom over the last decade, and 
this high technology has greatly improved our Nation's economic output 
and productivity levels, a reason why inflation has been virtually 
nonexistent.
  Congress can and should provide tax relief, but we should not abandon 
our basic values, like Medicare or Social Security, or risk the 
reemergence of ballooning deficits to achieve this goal.
  Democrats have a plan to accomplish this goal. This Republican bill 
will not accomplish this goal.
  We need an economic policy for all of America--not just the richest 
of America.

[[Page H791]]

  Mr. SERRANO. Mr. Speaker, I rise in vehement opposition to H.R. 3, 
the so-called ``Economic Growth and Tax Relief Act of 2001''.
  There is no need to rush into the tax issue today. Indeed, it is 
foolish to move forward with any bill cutting taxes until we can put it 
in the context of the entire budget. For that reason, I will not 
support the Democratic substitute either at this time.
  Before we cut taxes, we need to know how much we will need to spend 
to meet national needs--education, which is top priority of the 
American people, Social Security and Medicare, including a prescription 
drug benefit, universal access to health care, a cleaner environment, 
more effective law enforcement, a robust foreign policy, and all the 
necessary activities of the Federal Government.
  We need to decide how we will respond to the American Society of 
Civil Engineers' 2001 Report Card for America's Infrastructure, issued 
today, which gives our public works a grade of D+ and estimates that we 
will need to invest $1.3 Trillion over five years in our roads, 
bridges, aviation system, schools, water, waste, and energy systems.
  We need to reach agreement on paying down the Federal debt to prepare 
for the pending retirement of the Baby Boom generation, which will 
place enormous strains on the Federal budget and the national economy.
  Just as important, because we know that the Bush tax plan will cost 
far more than the $1.6 Trillion he claims, and that his budget won't 
add up without cuts (or deficits), we need to understand what areas of 
the Federal budget President Bush proposes to cut to make his numbers 
work. And that's assuming the ten-year surplus projections come true, 
which is a very risky assumption.
  Apart from the timing and the lack of a budgetary context, the 
substance of H.R. 3 is not worthy of support.
  The Bush tax proposals, those in this bill and those yet to come, are 
unfairly skewed away from the neediest families. The wealthiest 1 
percent of the income distribution, with incomes averaging $900,000, 
pay about 21 percent of federal taxes but would receive 43 percent of 
the benefits, an average tax cut of $46,000.
  Many working families, including those who pay more in payroll taxes 
than in income taxes, would get nothing. On Tuesday, the Center on 
Budget and Policy Priorities released a study which indicates that if 
Congress approves the Bush tax plan, an estimated 12.2 million low- and 
middle-income families, with 24.1 million children, would not receive 
any tax reduction at all.
  Mr. Speaker, I represent the South Bronx in New York. There are many 
people in my district who work two or more jobs just to make ends meet. 
Just think what these families could do with some extra money. They, 
and low- and moderate-income families like them, need and deserve tax 
relief as much as anyone, and they are likely to put any money they get 
from tax relief into the local economy.
  The Republicans keep saying the rich deserve the biggest tax breaks 
because they pay the most taxes. But don't forget, the rich pay the 
most taxes because they have the most money.
  Don't get me wrong, Mr. Speaker. I believe Americans should get a tax 
cut, but I also believe a tax cut package should be reasonably sized, 
fairly distributed, and achievable within a budget that addresses 
national needs, especially education.
  I urge my colleagues to vote against HR 3.
  Mr. SHAYS. Mr. Speaker, I rise in strong support of the tax reduction 
legislation before the House.
  We've heard a number of our colleagues come to the floor today to 
brand this tax cut as irresponsible. Let me state nothing could be 
further from the truth.
  We need to put this legislation in perspective, not simply in terms 
of the enormous surplus projections for the next 10 years, but also in 
terms of federal revenue and spending over that same period.
  Consider the following: over the next decade, the U.S. Government is 
anticipated to collect $28 trillion in taxes. We are asking that $1.6 
trillion be returned to the American people.
  Of the $28 trillion in revenue, total federal spending is already 
expected to be $22.3 trillion over the next 10 years, unless, of 
course, Congress finds new ways to spend taxpayers' money.
  When we compare the $1.6 trillion tax package to our other 
commitments over the next 10 years this tax cut seems rather modest. We 
anticipate spending $3.6 trillion for our military; $4.2 trillion for 
discretionary non-defense programs; $5.8 trillion for Social Security; 
$3.0 trillion for Medicare; and $2.1 trillion for Medicaid.
  We've heard today, like a broken record, that this is a tax cut for 
the rich.
  The reality is this is a tax cut for those who pay taxes. If you pay 
taxes, you will receive a tax cut. In fact, 6 million of the lowest 
income earners will be taken off the income tax rolls by this 
legislation. They will pay no income tax.
  Some of my colleagues don't want you to know that the top 5 percent 
of taxpayers pay more than 50 percent of personal income taxes, and the 
top 50 percent of taxpayers pay more than 95.8 percent. That's a very 
progressive tax system, and if the president's tax package is enacted, 
the tax code will become even more progressive.
  A married couple who both work making $55,000 with two children would 
receive a $1,930 tax cut. Yet a similar household making an additional 
$20,000 would receive only $120.
  Mr. Speaker, the bottom line for me remains this: if we don't return 
some of the $5.6 trillion in tax surplus that the U.S. Treasury is 
estimated to collect over the next 10 years, it will be spent and the 
growth in the size of government will increase.
  I am convinced the natural tendency to spend more money will only 
worsen with annual surpluses rolling in every year.
  The President's proposal is very consistent with my long-standing 
efforts to limit the growth of government, cut wasteful federal 
spending and move power, money and influence out of Washington and back 
to local communities where it belongs.
  I am pleased to support this bill, and urge my colleagues to do the 
same.
  Mr. LaFALCE. Mr. Speaker, I rise today in strong support of fiscal 
responsibility. Unfortunately, the bill before us today is not fiscally 
responsible, and it is also not fair. It is unfair because it will 
exclude millions of working families from receiving any tax relief. In 
my state of New York alone, one in three families will get nothing from 
this bill. Nearly 1 million families and 1.9 million children in New 
York will receive absolutely no benefit from this tax cut. And these 
are the poorest of our working families, those who pay substantial 
payroll and other federal taxes but have no income tax liability.
  The bill before us today delivers fully 44 percent of its benefits to 
the wealthiest 1 percent of Americans. It is the first and largest 
installment of the President's $2 trillion tax cut plan--a plan whose 
tax cuts for the wealthiest 1 percent would cost more than all of the 
President's new spending initiatives combined; and a plan that would 
force us to raid the Social Security and Medicare Trust Funds. The 
Republican Leadership has chosen to introduce the most expensive 
element of the President's plan first; it is also the component that 
(with the exception of the repeal of the estate tax) most favors the 
wealthiest Americans, which seems to reflect their priorities.
  In short, Mr. Speaker, this bill and the overall Bush tax plan have 
three glaring problems, any one of which should cause us to reject them 
resoundingly.
  First, it is the wrong kind of tax cut, providing the lion's share of 
benefits to the wealthiest Americans. It does nothing for the most 
vulnerable taxpayers who need the most help, while providing 
substantial help to the wealthy who need it least.
  Second, it is much too expensive and will crowd out important federal 
spending priorities, many of which the President himself claims to 
support. It will also derail our efforts to eliminate the national 
debt, which poll after poll shows is a clear priority for the American 
people.
  Finally, we are putting the cart before the horse in considering this 
tax cut today, prior to laying out a budget for the year.


                       the wrong kind of tax cut

  Promoters of this tax cut have a peculiar notion of fairness. They 
believe it is fair that the wealthiest 1 percent of Americans get 44 
percent of the benefits from this tax cut. In the old days, they might 
have argued that these benefits would ultimately trickle down to the 
rest of America through dramatic surges in economic growth. In 1981, we 
were asked to suspend disbelief and watch as a tax windfall for the 
wealthy would supposedly bring dramatic benefits to even the poorest 
Americans. Of course, these benefits never trickled down and we learned 
an important, if obvious, lesson: a tax windfall for the wealthy is 
nothing more than a tax windfall for the wealthy.
  Now, the Republicans are trying a different tack, arguing that the 
wealthy face the highest burden from taxes, so they deserve the lion's 
share of a tax cut. But this just isn't true. After-tax income for the 
wealthiest 1 percent of Americans grew by a whopping $171,000 (or 40 
percent) per family over the past decade, while after-tax income for 
the bottom 90 percent of families grew by just $1,241 (or 5 percent) 
per family. In light of this growing disparity in after-tax income, it 
should be obvious who is feeling the real burden of taxes today, and it 
is not the very wealthy. Yet, working families will get little or no 
relief from this tax bill. Again, 1 in 3 families in my state will get 
zero benefit from this bill or the President's overall tax plan. And 
these are the very families who need the help the most--the working 
poor and lower middle class. The conclusion from these numbers is 
unassailable: this tax

[[Page H792]]

cut will further widen the gap between the very wealthy and the rest of 
America. What definition of tax fairness could possibly apply to this 
bill?


   this tax cut will crowd out spending and debt reduction priorities

  In his address before Congress last week, President Bush repeatedly 
assured us that his massive tax cut plan could easily be paid for by 
what was ``left over'' after meeting spending and debt reduction 
obligations. Now his own sketchy budget proposal shows that nothing 
could be further from the truth. As many of us have been warning for 
weeks now, the President's tax plan, and today's bill, will come at the 
expense of federal budget priorities and debt reduction.
  The President's budget director said we would have to look long and 
hard to find any cuts in the budget proposal. It took me less than 30 
seconds: a 20% cut at the Federal Emergency Management Agency, a 17% 
cut at the Environmental Protection Agency, a 15% cut at the Department 
of Transportation, and so on. In fact, the President's so-called 
``budget blueprint'' is nothing more than a tax cut masquerading as a 
budget. And today's vote for the biggest piece of this tax cut is 
effectively a vote to slash federal programs, raid the Social Security 
and Medicare trust funds, and reverse progress toward eliminating the 
national debt.
  Among the many program cuts in the President's budget, I find two 
areas particularly egregious. President Bush would dramatically cut the 
budgets of the Department of Housing and Urban Development and the 
Small Business Administration. I have played a lead role in the 
oversight of these two agencies during the past decade, and I can 
attest to the tremendously important work they do in serving American 
families and small businesses.
  Yet, at a time when our affordable housing needs are growing, the 
proposed HUD budget would cut housing funding by $2.2 billion in real 
terms. Included in these cuts is the elimination of the Drug 
Elimination Program for public housing, as well as a $700 million cut 
in the public housing Capital Fund, a critical source of funds for 
upgrades and repairs to ensure that low income and senior citizens' 
housing remains safe and accessible.
  The budget of the Small Business Administration would be decimated 
under the Bush plan, with cuts totaling over 46% next year. The 
President proposes to sustain the Small Business Development Centers 
program and the General Business Loan and Small Business Investment 
Company programs by raising fees or introducing new fees charged to 
small businesses. He is effectively proposing to impose new taxes on 
America's small business in order to finance his tax windfall for the 
very wealthy--in short, a windfall for Wall Street paid for on the 
backs of America's Main Streets. Worse yet, he proposes to completely 
eliminate key elements of the New Markets Initiative, which is 
successfully realizing the untapped productive potential of America's 
under-served communities.
  I am also concerned about our ability to meet critical infrastructure 
needs in light of this expensive tax cut. According to the American 
Society of Civil Engineers, the United States must spend a staggering 
$1.3 trillion over the next 5 years to meet our infrastructure needs. 
Much of the burden of that spending will fall on the federal 
government, and we must be prepared for it. Infrastructure investments 
are desperately needed to ensure that the water we drink is clean, that 
the roads and bridges we drive on are safe, that we can accommodate 
increased air traffic and alleviate airport congestion, and that we can 
continue to clean up our environment.
  In the City of Buffalo, alone, the critical need to fix crumbling 
schools will likely cost $1 billion over the next decade. Multiply this 
amount by the countless number of other cities, large and small, that 
face similar school repair needs. The needs are substantial and real, 
and we will not be able to meet them if we pass this bill.
  Finally, there are substantial human needs, which continue to go 
unaddressed by the federal government. 45 million Americans continue to 
go without any form of health insurance. And none of 39 million senior 
citizens on Medicare receive any prescription drug benefit from that 
program, at a time when drugs offer great hope for healthier and longer 
lives. Again, we simply will not be able to meet these needs if we pass 
this bill and follow the President's path for tax cuts.
  In short, in passing this bill, we are incapacitating and 
emasculating the federal government's ability to meet all of these 
pressing needs. And we are re-digging the deficit ditch, after spending 
a long and difficult 18 years extricating ourselves from it.


              This Tax Cut Puts the Cart Before the Horse

  Poll after poll indicates that the American people do not support a 
massive tax cut that would jeopardize federal spending priorities and 
debt reduction. Congressional Republicans know this, which is why they 
are now rushing to put the cart before the horse, by passing the 
President's tax plan before we even know what our budget will be for 
the year. Mr. Speaker, we tried this approach before, and it was a 
disaster. In 1981, President Reagan assured us that we could first pass 
a massive tax cut and then meet federal spending priorities, all the 
while keeping the federal deficit in check. In reality, the 1981 tax 
cut plunged us into a decade of mounting debt, while putting the 
squeeze on important federal programs.
  This experience should have taught us that we cannot rely on magic 
asterisks and vague promises to meet federal budget priorities. It is 
critical that we consider tax cuts after we give serious consideration 
to a detailed budget for the year. In adopting the Republicans' plan, 
we would be turning the President's message on its head--he told us 
that tax cuts would be paid for by what was ``left over'' after budget 
priorities and debt reduction goals were met. But today, we are, in 
fact, moving headlong into a fiscal plan that will pay for all of the 
federal government's spending obligations, as well as debt reduction, 
out of what is left over from a massive tax cut.
  Mr. BENTSEN. Mr. Speaker, I rise in strong opposition to H.R. 3, the 
first installment of President Bush's proposed tax cut package.
  Having voted for tax cuts many times, I support an income tax rate 
cut, but not outside a sensible budget framework. By rushing H.R. 3 to 
the floor even before we've adopted next year's budget, the Republican 
Leadership has abandoned even the semblance of fiscal prudence. Mr. 
Speaker, I cannot support a tax cut of this magnitude before we have 
had an opportunity to engage in a full and fair debate on the competing 
budgetary priorities, including those of the President. The Republican 
Leadership has rushed the $1 trillion tax cut to the floor before 
deciding how much will go to debt reduction, funding the President's 
own spending increases, and reforming Social Security and Medicare. 
This is a classic case of putting the cart before the horse.
  In all the euphoria over the projected budget surplus of $5.6 
trillion over ten-year projection, released by the Congressional Budget 
Office, we run the risk of failing to continue the fiscal restraint 
which has brought us to this point today. In just eight years, the baby 
boomers begin retiring and place unprecedented stresses on Social 
Security and Medicare. All the major economic forecasters, including 
CBO, OMB, GAO, as well as independent analysts, agree that the long-
term budget picture shows deficits returning in due course and 
ultimately rising to unsustainable levels. The Republican Leadership is 
today throwing fiscal responsibility to the wind for short-term 
political gain and are denying the lessons of the past about relying on 
speculative economic and political assumptions.
  I also think it is irresponsible to structure a tax cut against the 
entire on ten-year surplus projections, the bulk of which are projected 
to materialize after 2006. History has taught us that it is far easier 
to enact additional tax cuts in future years of economic projections 
hold up or improve, while it is far more difficult to enact tax 
increases or budget cuts in the future if the projections go 
unrealized. CBO itself acknowledges that current projections may 
substantially overstate projected surpluses and has concluded that 
``the estimated surpluses could be off in one direction or the other, 
on average, by about $52 billion in 2001, $120 billion in 2002, and 
$412 billion in 2006.'' While there is significant doubt about whether 
surpluses will be realized, the coming retirement of the baby 
generation is a certainty for which we must plan.
  I also have serious reservations about some of the contortions in the 
President's Budget Blueprint. The Administration plans to dedicate $2 
trillion of the surplus, attributable to Social Security Trust Fund, to 
debt reduction and reserve the remaining $600 billion of Trust Fund 
receipts for Social Security privatization.
  Futhermore, the President's Budget assumes dramatic spending 
increases in some accounts with unrealistic spending cuts in others. In 
recent days, the Administration has reversed itself on some of its 
proposed cuts and the Republican Chairman of the Senate Budget 
Committee has called into question the President's discretionary budget 
assumptions. Finally, in recent days of hearings before the Budget 
Committee, we have learned that the President's proposed ``contingency 
fund,'' which is supposed to offset additional spending, tax cuts or 
unrealized surpluses, is actually not $842 billion, but less than $200 
billion, once you subtract the projected Medicare Trust Fund balance 
and add the increased cost of the H.R. 3 over the President's estimate.
  Thus, Mr. Speaker, I must oppose H.R. 3. This House is moving too 
fast to gain political advantage before determining how we can meet our 
longterm obligations, including paying down the debt.
  Mr. McGOVERN. Mr. Speaker, I rise today in strong opposition to H.R. 
3, the Economic Growth and Tax Relief Act of 2001. While I strongly 
support giving money back to hard-

[[Page H793]]

working Americans and to the families that need a tax cut, this is not 
the right way to do it.
  While current economic projections show that we might see a 
significant budget surplus, the projections are just that--projections. 
We must be very cautious with these forecasts because the money we 
spend today--on tax cuts or on necessary programs--will be directly 
drawn from the projected surplus. Before Congress and the new 
Administration begin spending this surplus, we must take steps to 
ensure that our economy does not return to the budget deficits of the 
1980s and early 1990s.
  There are several reasons I am opposed to and will vote against H.R. 
3.
  First and foremost, this tax cut does not provide the necessary 
relief to the people who need it most. Instead of providing tax relief 
to middle-income families and working Americans, this bill benefits the 
most affluent of Americans. The top one percent of the income 
distribution would receive 43 percent of the tax benefits. This means 
that people whose incomes average over $900,000 per year would receive 
an average annual tax cut of $46,000! Yet many moderate- and low-income 
families will receive little or no benefit.
  For example, while the top one percent of income earners receive tax 
breaks, an estimated 224,000 low and moderate income families in 
Massachusetts will not benefit from this plan. 28 percent of families 
living in Massachusetts will not benefit from this tax cut because 
their incomes are too low to owe federal income taxes.
  Second, the U.S. House of Representatives is considering this tax cut 
without having considered or approved a budget. Instead of crafting and 
debating a budget for the next fiscal year, the majority party has 
rushed this tax bill for a vote at the expense of other priorities. The 
budget is the framework for all spending in the next fiscal year, 
including tax policy. Without a budget, we are endangering important 
priorities like education, health care, public safety, environmental 
protection, Social Security and Medicare.
  This tax cut is nothing more than a replay of Reaganomics--the rich 
will get the tax cut, promises will be made that the money the rich 
receive will trickle down to the rest of us, and the nation will return 
to deficit spending.
  Instead, we should move forward with a blueprint that has provided us 
with record surplus projections and has allowed us to consider such 
vital programs as a prescription drug benefit. We must protect and 
extend the Social Security and Medicare Trust Funds. We must continue 
to pay down the debt. As we pay down the debt, the surplus will 
continue to grow and we will be better able to pay for the priorities 
that are vital to all Americans.
  We must not ignore our responsibilities to all Americans by providing 
tax breaks to just a few. I urge a no vote on H.R. 3.


     Amendment in the Nature of a Substitute Offered by Mr. Rangel

  Mr. RANGEL. Mr. Speaker, I offer an amendment in the nature of a 
substitute on behalf of myself, the gentleman from North Dakota (Mr. 
Pomeroy); the gentleman from Rhode Island (Mr. Langevin); the gentleman 
from California (Mr. Honda); the gentlewoman from California (Mrs. 
Davis); the gentleman from Oklahoma (Mr. Carson); and the gentleman 
from Missouri (Mr. Gephardt), the Democratic leader.
  The SPEAKER pro tempore. The Clerk will designate the amendment in 
the nature of a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:
  Amendment in the nature of a substitute offered by Mr. Rangel:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Reduction Act of 2001''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Section 15 Not To Apply.--No amendment made by this Act 
     shall be treated as a change in a rate of tax for purposes of 
     section 15 of the Internal Revenue Code of 1986.

  TITLE I--INDIVIDUAL INCOME TAX RATE REDUCTIONS; EXPANSION OF EARNED 
                        INCOME CREDIT ASSISTANCE

     SEC. 101. INDIVIDUAL INCOME TAX RATE REDUCTIONS.

       (a) In General.--Section 1 is amended by adding at the end 
     the following new subsection:
       ``(i) 12 Percent Rate Bracket.--
       ``(1) In general.--In the case of taxable years beginning 
     after December 31, 2000--
       ``(A) the rate of tax under subsections (a), (b), (c), and 
     (d) on taxable income not over the initial bracket amount 
     shall be 12 percent, and
       ``(B) the 15 percent rate of tax shall apply only to 
     taxable income over the initial bracket amount.
       ``(2) Initial bracket amount.--For purposes of this 
     subsection--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the initial bracket amount is--
       ``(i) $20,000 in the case of subsection (a),
       ``(ii) 80 percent of the dollar amount in clause (i) in the 
     case of subsection (b), and
       ``(iii) 50 percent of the dollar amount in clause (i) in 
     the case of subsections (c) and (d).
       ``(B) Phasein.--The initial bracket amount is--
       ``(i) \1/4\ the amount otherwise applicable under 
     subparagraph (A) in the case of taxable years beginning 
     during 2001, and
       ``(ii) \1/2\ such amount otherwise applicable under 
     subparagraph (A) in the case of taxable years beginning 
     during 2002.
       ``(3) Inflation adjustment.--
       ``(A) In general.--In the case of any taxable year 
     beginning in a calendar year after 2003, the $20,000 amount 
     under paragraph (2)(A)(i) shall be increased by an amount 
     equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     subsection (f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2002' 
     for `calendar year 1992' in subparagraph (B) thereof.
       ``(B) Rounding rules.--If any amount after adjustment under 
     subparagraph (A) is not a multiple of $50, such amount shall 
     be rounded to the next lowest multiple of $50.
       ``(4) Adjustment of tables.--The Secretary shall adjust the 
     tables prescribed under subsection (f) to carry out this 
     subsection.''
       (b) Adjustment in Computation of Alternative Minimum Tax.--
     Paragraph (2) of section 55(a) is amended to read as follows:
       ``(2) the sum of--
       ``(A) the regular tax for the taxable year, plus
       ``(B) in the case of an individual, 3 percent of so much of 
     the individual's taxable income for the taxable year as is 
     taxed at 12 percent.''
       (c) Repeal of Reduction of Refundable Tax credits.--
       (1) Subsection (d) of section 24 is amended by striking 
     paragraph (2) and redesignating paragraph (3) as paragraph 
     (2).
       (2) Section 32 is amended by striking subsection (h).
       (d) Conforming Amendment.--Subclause (II) of section 
     1(g)(7)(B)(ii) is amended by striking ``15 percent'' and 
     inserting ``12 percent''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
       (f) Protection of Social Security and Medicare.--The 
     amounts transferred to any trust fund under the Social 
     Security Act shall be determined as if this Act had not been 
     enacted.

     SEC. 102. MODIFICATIONS TO EARNED INCOME TAX CREDIT.

       (a) Increases in Percentages and Amounts Used to Determine 
     Credit; Marriage Penalty Relief.--
       (1) In general.--Subsection (b) of section 32 is amended to 
     read as follows:
       ``(b) Percentages and Amounts.--
       ``(1) Percentages.--The credit percentage, the initial 
     phaseout percentage, and the final phaseout percentage shall 
     be determined as follows:



 
                                               The initial    The final
 ``In the case of an eligible    The credit     phaseout      phaseout
       individual with:          percentage    percentage    percentage
                                     is:           is:           is:
 
1 qualifying child............       34           15.98         18.98
2 or more qualifying children.       40           21.06         24.06
No qualifying children........      7.65          7.65          7.65
 

       
       ``(2) Amounts.--
       ``(A) In general.--The earned income amount and the initial 
     phaseout amount shall be determined as follows:



 
                                                          The initial
   ``In the case of an eligible     The earned income   phaseout amount
         individual with:              amount is:             is:
 
1 qualifying child...............        $8,140             $13,470
2 or more qualifying children....        $10,820            $13,470
No qualifying children...........        $4,900             $6,130.
 

       
     In the case of a joint return where there is at least 1 
     qualifying child, the initial phaseout amount shall be $2,500 
     greater than the amount otherwise applicable under the 
     preceding sentence.
       ``(B) Final phaseout amount.--The final phaseout amount is 
     $26,000 ($28,500 in the case of a joint return).''
       (2) Modification of computation of phaseout.--Paragraph (2) 
     of section 32(a) is amended to read as follows:
       ``(2) Phaseout of credit.--The amount of the credit 
     allowable to a taxpayer under

[[Page H794]]

     paragraph (1) for any taxable year shall be reduced (but not 
     below zero) by the sum of--
       ``(A) the initial phaseout percentage of so much of the 
     total income (or, if greater, the earned income) of the 
     taxpayer for the taxable year as exceeds the initial phaseout 
     amount but does not exceed the final phaseout amount, plus
       ``(B) the final phaseout percentage of so much of the total 
     income (or, if greater, the earned income) of the taxpayer 
     for the taxable year as exceeds the final phaseout amount.''
       (3) Total income.--Paragraph (5) of section 32(c) is 
     amended to read as follows:
       ``(5) Total income.--The term `total income' means adjusted 
     gross income determined without regard to--
       ``(A) the deductions referred to in paragraphs (6), (7), 
     (9), (10), (15), (16), and (17) of section 62(a),
       ``(B) the deduction allowed by section 162(l), and
       ``(C) the deduction allowed by section 164(f).''
       (4) Conforming amendments.--
       (A) Subsection (j) of section 32 is amended to read as 
     follows:
       ``(j) Inflation Adjustment.--
       ``(1) In general.--In the case of any taxable year 
     beginning after 2002, each of the dollar amounts in 
     subsection (b)(2) shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3), for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph (B) thereof.
       ``(2) Rounding.--If any dollar amount, after being 
     increased under paragraph (1), is not a multiple of $10, such 
     dollar amount shall be rounded to the nearest multiple of 
     $10.''
       (B) Subparagraph (C) of section 32(c)(1) is amended by 
     striking ``modified adjusted gross income'' and inserting 
     ``total income''.
       (C) Paragraph (2) of section 32(f) is amended to read as 
     follows:
       ``(2) Requirements for tables.--
       ``(A) In general.--The provisions of subsection (a)(1) and 
     the provisions of subsection (a)(2) shall be reflected in 
     separate tables prescribed under paragraph (1).
       ``(B) Subsection (a)(1) table.--The tables prescribed under 
     paragraph (1) to reflect the provisions of subsection (a)(1) 
     shall have income brackets of not greater than $50 each for 
     earned income between $0 and the earned income amount.
       ``(C) Subsection (a)(2) table.--The tables prescribed under 
     paragraph (1) to reflect the provisions of subsection (a)(2) 
     shall have income brackets of not greater than $50 each for 
     total income (or, if greater, the earned income) above the 
     initial phaseout threshold.''
       (b) Repeal of Denial of Credit Where Investment Income.--
     Section 32 is amended by striking subsection (i).
       (c) Earned Income To Include Only Amounts Includible in 
     Gross Income.--
       (1) In general.--Section 32(c)(2)(A)(i) (defining earned 
     income) is amended by inserting ``, but only if such amounts 
     are includible in gross income for the taxable year'' after 
     ``other employee compensation''.
       (2) Conforming amendment.--Section 32(c)(2)(B) is amended 
     by striking ``and'' at the end of clause (iv), by striking 
     the period at the end of clause (v) and inserting ``, and'', 
     and by adding at the end the following new clause:
     ``(vi) the requirement under subparagraph (A)(i) that an 
     amount be includible in gross income shall not apply if such 
     amount is exempt from tax under section 7873 or is derived 
     directly from restricted and allotted land under the Act of 
     February 8, 1887 (commonly known as the Indian General 
     Allotment Act) (25 U.S.C. 331 et seq.) or from land held 
     under Acts or treaties containing an exception provision 
     similar to the Indian General Allotment Act.''
       (d) Modification of Joint Return Requirement.--Subsection 
     (d) of section 32 is amended to read as follows:
       ``(d) Married Individuals.--
       ``(1) In general.--If the taxpayer is married at the close 
     of the taxable year, the credit shall be allowed under 
     subsection (a) only if the taxpayer and his spouse file a 
     joint return for the taxable year.
       ``(2) Marital status.--For purposes of paragraph (1), an 
     individual legally separated from his spouse under a decree 
     of divorce or of separate maintenance shall not be considered 
     as married.
       ``(3) Certain married individuals living apart.--For 
     purposes of paragraph (1), if--
       ``(A) an individual --
       ``(i) is married and files a separate return, and
       ``(ii) has a qualifying child who is a son, daughter, 
     stepson, or stepdaughter of such individual, and
       ``(B) during the last 6 months of such taxable year, such 
     individual and such individual's spouse do not have the same 
     principal place of abode,
     such individual shall not be considered as married.''
       (e) Expansion of Mathematical Error Authority.--Paragraph 
     (2) of section 6213(g) is amended by striking ``and'' at the 
     end of subparagraph (K), by striking the period at the end of 
     subparagraph (L) and inserting ``, and'', and by inserting 
     after subparagraph (L) the following new subparagraph:
       ``(M) the entry on the return claiming the credit under 
     section 32 with respect to a child if, according to the 
     Federal Case Registry of Child Support Orders established 
     under section 453(h) of the Social Security Act, the taxpayer 
     is a noncustodial parent of such child.''
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

                   TITLE II--MARRIAGE PENALTY RELIEF

     SEC. 201. MARRIAGE PENALTY RELIEF.

       (a) Standard Deduction.--
       (1) In general.--Paragraph (2) of section 63(c) (relating 
     to standard deduction) is amended--
       (A) by striking ``$5,000'' in subparagraph (A) and 
     inserting ``twice the dollar amount in effect under 
     subparagraph (C) for the taxable year'',
       (B) by adding ``or'' at the end of subparagraph (B),
       (C) by striking ``in the case of'' and all that follows in 
     subparagraph (C) and inserting ``in any other case.'', and
       (D) by striking subparagraph (D).
       (2) Increase allowed as deduction in determining minimum 
     tax.--Subparagraph (E) of section 56(b)(1) is amended by 
     adding at the end the following new sentence: ``The preceding 
     sentence shall not apply to so much of the standard deduction 
     under subparagraph (A) of section 63(c)(2) as exceeds the 
     amount which would be such deduction but for the amendment 
     made by section 201(a)(1) of the Tax Reduction Act of 2001.
       (3) Technical amendments.--
       (A) Subparagraph (B) of section 1(f)(6) is amended by 
     striking ``(other than with'' and all that follows through 
     ``shall be applied'' and inserting ``(other than with respect 
     to sections 63(c)(4) and 151(d)(4)(A)) shall be applied''.
       (B) Paragraph (4) of section 63(c) is amended by adding at 
     the end the following flush sentence:
     ``The preceding sentence shall not apply to the amount 
     referred to in paragraph (2)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
  The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution 
83, the gentleman from New York (Mr. Rangel) and a Member opposed each 
will control 30 minutes.
  Mr. THOMAS. Mr. Speaker, I do rise, along with the entire Republican 
leadership and every Republican member of the Committee on Ways and 
Means and the vast majority of Republicans in opposition to the 
substitute.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
claims the time in opposition.
  The Chair recognizes the gentleman from New York (Mr. Rangel).
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume. I 
would note that the gentleman from California (Mr. Thomas) did not 
mention the Republican President that I assume is still trying to be 
bipartisan.
  Mr. Speaker, as we have said, we all would like to have a tax cut. 
Some of us believe that it should be responsible; all of us hope that 
it would be bipartisan. We want it to be fair, we want it to be honest, 
we do not want the hidden costs, as we see with the major bill that is 
on this floor today.
  We think that it is unfair that 44 percent of the tax bill that is 
before us would go to 1 percent of the taxpayers, and those other 
people who make over $373,000 each year. What we have done is created a 
new 12 percent rate bracket for the first $20,000 of taxable income; 
and truly, all people would enjoy some type of tax relief.
  But another issue which I hope will be discussed during the debate is 
that Republicans like to say, if you do not pay income taxes, do not 
expect an income tax return. Well, for 80 percent of the hard-working 
people that pay payroll taxes, they think it is a tax on their income. 
They work hard every day, and they do not get any relief under this 
bill. So we do not tinker and stop the flow of the money to Social 
Security or to Medicare, but we do create in our substitute an 
expansion of the earned income tax credit, so that we would provide a 
cushion for these hard-working people. The Republican bill does not 
deal with the marriage penalty. What we do is create a double standard 
deduction that is twice the standard deduction that would be available 
to the single people.
  I admit that we are concerned about the people that are in high-
income States too, because under the Republican bill, the deductibility 
of local and State taxes will be prevented by a mechanism that is 
referred to as the alternative minimum tax. We raised this to the 
chairman, but the Republicans obviously say ``manana,'' or tomorrow, 
they will take care of it. They will take care of the estate taxes, 
they will take care of the marriage penalty, they will take care of the 
deficit that might result as a result of their bill.

[[Page H795]]

  So I am hoping that at this time we would reject the Republican bill 
that is before us. It is not bipartisan; it has not been discussed with 
us. We think that this substitute is fiscally responsible; we think it 
is fair; we think it is honest; and, unlike H.R. 3, we think that it 
warrants the support of Republicans and Democrats, and we urge our 
colleagues to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Again, I guess I am just a little bit confused. I thought that what 
we heard for the last hour was how quickly Republicans were moving, and 
that we just should not really move this quickly on a tax cut. I 
thought I just heard my friend and colleague from New York now indicate 
that we are not moving in this tax bill on the marriage penalty, on the 
death tax, on child credit, on alleviating the alternative minimum tax; 
and they just wonder if we are ever going to move.
  I would tell the gentleman that, just as the President in the joint 
session in the well said that he wanted immediate tax relief for all 
Americans, which we are providing today, he also mentioned that we 
should have a child credit increase; that we should fix the marriage 
penalty; that we should eliminate the death tax. And we are going to do 
all of those.
  I look forward to working with my colleague as we go forward in 
putting those tax packages together. It is March, and I do apologize to 
the gentleman because we do not have all of those other portions of the 
President's plan in front of us today, but I know that we will work 
diligently in committee; and before this month is out, very likely, we 
will be able to present the rest of the President's package.
  So I do take the admonition about moving quickly for the other parts 
of the package, and I look forward to the gentleman working with us. 
Today is not the day, however; and today is to pass the heart of the 
President's program, and that is the rate reductions, the lowering of 
the fundamental structure of taxes for all income tax payers. That is 
what H.R. 3 does, and that is why we support the bill rather than this 
quickly conceived, hastily thrown together substitute.
  Mr. RANGEL. Mr. Speaker, would the distinguished and articulate 
chairman of the Committee on Ways and Means yield?
  Mr. THOMAS. Mr. Speaker, I would certainly yield to the gentleman 
from New York on his time.
  Mr. RANGEL. Well, the gentleman is not yielding then. That is 
parliamentary. It is impossible for him to do that. Has the gentleman 
from California no sense of how this House is supposed to operate? How 
can the gentleman yield to me on my time? I asked the gentleman to 
yield. That is unfair.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from New York (Mr. Houghton), a valued member of the 
Committee on Ways and Means, and a gentleman who understands the rules.
  Mr. HOUGHTON. Mr. Speaker, I wish this were a little more evenly 
balanced in terms of a bipartisan approach, but evidently we are 
dealing with things which have been triggered by the White House, and 
we have to follow that route.
  Look, there are certain things about the Republican bill that I do 
not particularly like. It is a very uncertain future. Who knows what is 
going to happen in 10 years? Also, there are some things in terms of 
child credits and in terms of a whole variety of things such as 
alternative minimum taxes that maybe should be considered, but there 
are certain things we do know. We know we are dealing with a huge 
surplus, a gargantuan surplus; and irrespective of what happens here in 
terms of the economy, we have a lot of area to play with. And it seems 
to me that what we want to do is to stretch and give as much as 
possible back to the people, where this money came from.
  I used to be in business, and if one said to the stockholders and the 
employers in the business, look, we have been losing money for 30 
years, which is exactly what the Federal Government has done, and now 
we are beginning to make a little bit, and what we want to do is to 
thank you for holding with us and we want to give you a dividend 
increase, we want to give you a salary increase; we are going to pay 
back our debts, but we are not going to pay them back all at once 
without taking care of you, we are going to do it in a balanced way. It 
seems to me that this is the whole premise of the Republican budget, 
and I support it.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Stark), a senior member of the Committee on Ways and 
Means.
  Mr. STARK. Mr. Speaker, I am so happy to follow my distinguished 
colleagues on the other side of the aisle from California and from New 
York. The gentleman who preceded me is arguably somewhat more wealthy 
than I am, and I think I would just like to explain in terms he and I 
can understand.
  Mr. THOMAS. Mr. Speaker, will the gentleman yield briefly?
  Mr. STARK. No.
  Mr. THOMAS. Mr. Speaker, I do not believe there is any argument.
  Mr. STARK. Regular order, Mr. Speaker.
  It is pretty clear, because I talked to my colleagues a few months 
ago about why I did not intend to support removing the inheritance tax 
to make my children even richer than they will be, and so I am here 
today to explain to my colleagues in the simplest terms about what 
greed has done.
  I know the gentleman from New York (Mr. Houghton) will do far better 
than I will on this, but my accountant tells me that under the 
Republican plan, I will save $28,253.82. Under the Democratic 
alternative as proposed by our distinguished ranking member and the 
Democrats, I would save $737, a difference of $27,500.
  My father-in-law is a retired teamster in San Marino, California. He 
has had a small business. He and people under $44,000 a year will 
receive $316 under the Bush plan, $289 under ours, a $25 difference. 
The $27,500 that my Republican colleagues are giving to Members of 
Congress is going to us instead of paying for a drug benefit for 
seniors. That is what is the issue today. The Republicans would destroy 
Medicare and Social Security by giving the money to the gentleman from 
New York (Mr. Houghton) and to me who arguably do not need it and deny 
decent benefits to the seniors in this country. It is clear.
  Mr. THOMAS. Mr. Speaker, as someone who clearly does not have that 
dilemma in front of him, I yield 2 minutes to the gentleman from 
Oklahoma (Mr. Watkins), a valued member of the Committee on Ways and 
Means.
  Mr. WATKINS. Mr. Speaker, I have a great deal of respect for the 
gentleman from New York (Mr. Rangel). I support this bill because I 
truly believe we must stimulate the economy.

                              {time}  1530

  When you have Alan Greenspan, Chairman of the Federal Reserve, 
lowering the interest rates twice in January, and the economic 
indicators have been down. They need to be stimulated in order for us 
to build jobs and build the economy. We must not let the economy go 
into a tailspin.
  There are a lot of people that like to point out that it does not go 
far enough. I agree there. And let me say to the gentleman from New 
York (Mr. Rangel), if he does not believe in tax reduction, let me have 
the gentleman's capital gains tax reductions that the gentleman has 
with the empowerment zones.
  Let me also have the gentleman's tax credits that the gentleman has 
in Harlem and also the accelerated depreciation, and if the gentleman 
gives me all of those, I will back off because I know tax reduction 
works.
  The gentleman from New York (Mr. Rangel), my good friend, knows it 
works, because that is the only hope to stimulate that economy in 
Harlem. Just like I have high hopes that I can get industry into the 
lower income rural economic depressed areas of Oklahoma where we have 
had out-migration. We have lost our population. We have had welfare, 
low per capita income.
  The tax reductions do work, because we have to have the economic 
opportunities to stimulate jobs. Some people like to point back and say 
look at Ronald Reagan's time. That was totally a different time 20 
years ago.
  If my colleagues remember, that budget was built by David Stockman 
with inflated figures. Does the gentleman remember that? They were out

[[Page H796]]

of bounds. We did not have a balanced budget.
  Today we have a balanced budget. In fact, we are paying down debt. We 
do not have a huge military buildup like we had back at that time 
either. Circumstances are a lot different.
  Let me say I stand in support of this tax bill and let us send part 
of this surplus back to our taxpayers.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Texas (Ms. Eddie Bernice Johnson), the chairwoman of the Congressional 
Black Caucus.
  (Ms. EDDIE BERNICE JOHNSON of Texas asked and was given permission to 
revise and extend her remarks.)
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I thank the 
gentleman from New York (Mr. Rangel) for yielding the time to me.
  The Congressional Black Caucus supports the Democratic alternative to 
the Bush tax plan, because it really is better. However, the 
Congressional Black Caucus believes that before we do any tax cut, we 
do need a budget plan.
  I just heard the gentleman, a friend, talk about wanting to stimulate 
jobs. The last administration stimulated 22 million jobs. We are not in 
a crisis for a tax break.
  The Democratic plan calls for a $900 billion tax cut that is fiscally 
responsible and fair to the average American. The Democratic plan 
contains a new 12 percent bottom bracket that would cut taxes on all 
individuals up to $300 and to all couples $600 annually, not just the 
top 1 percent.
  The plan contains a married penalty relief for couples who use the 
standard deduction and for the tax relief for married couples who 
utilized the earned income tax credit.
  Mr. Speaker, the Congressional Black Caucus supports the Democratic 
alternative to the Bush tax plan, because it is better. However, the 
Congressional Black Caucus believes that before we do any tax cut we 
need to have a budget plan.
  The Democratic plan calls for a $900 billion tax cut that is fiscally 
responsible and fair to average Americans.
  The Democratic plan contains: a new 12 percent bottom bracket that 
would cut taxes on all individuals up to $300 and to all couples up to 
$600 annually; the plan also contains marriage penalty relief for 
couples who use the standard deduction and further tax relief to 
married couples who utilize the earned income tax credit; and the plan 
includes estate tax relief that would eliminate this tax for over two-
thirds of all estates that are currently subject to this tax.
  The Democratic plan protects Social Security and Medicare. It 
reserves one-third of the projected $2.7 billion surplus so that we can 
meet our obligations to the Baby Boomers when they start to retire in 
2008.
  This Democratic plan leaves enough money for investment priorities 
that even the administration has said they support, such as improving 
education and providing a real prescription drug benefit for senior 
citizens.
  The Democratic tax cut also lets us pay down the debt rapidly by 
setting aside one-third of the projected surplus for debt reduction. 
Every American benefits from this because everyone will at some point 
want to own a home, or buy a new car. Paying down the debt ensures that 
interest rates on loans will stay low, meaning lower monthly mortgage 
and car payments.
  The slowdown in the economy does require a tax cut to ensure that a 
full scale recession does not occur.
  Tax cuts should be fair to the average American family. The 
President's plan is not. The Citizens for Tax Justice organization 
performed independent analysis that found that the President's plan 
provides an average $46,000 tax cut to the top 1 percent of taxpayers 
while leaving only an average tax cut of $227 for the lowest 60 percent 
of working families.
  The President's plan is also fiscally irresponsible. It raids the 
surplus, threatens Social Security and Medicare, and leaves no room for 
important investments like education and health care.
  The President's plan threatens economic prosperity by reversing all 
the progress that was made during the last administration. It will 
plunge the country back into deficit spending just like President 
Reagan's tax cuts of the 1980s.
  The President's plan even threatens Medicare and Social Security 
because it leaves no room for error if the economy does not grow as 
quickly as current projections.
  Mr. Speaker, we need a budget plan before voting on any tax cuts. 
However, the Democratic alternative is the better tax approach.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from California 
(Mr. Thomas), the chairman of the Committee on Ways and Means, for 
yielding the time to me and for his strong leadership in bringing this 
bill to the floor.
  Mr. Speaker, I rise in opposition to the Democratic substitute and in 
support of H.R. 3, the Economic Growth and Tax Relief Act. This is very 
simple, what we are about here. This is money that was earned by the 
American people. They have paid it.
  The government is taking in far more, far more than we are spending, 
and it is appropriate to give it back. It is a lot like if someone 
baked a batch of cookies and put them all out on a plate on the table 
at one time, watch and see what happens to it. In most families, they 
are going to go just like that. That is why we have to give this money 
back to the taxpayers, and we need to do it in a responsible way, 
because if we leave that money here, that plate of cookies right here, 
they are going to spend it.
  It is entirely appropriate that instead of doing that, we provide for 
a reduction in statutory tax rates under the individual income tax. A 
vital step towards reducing the complexity of our tax process is 
reducing taxes in general. Instead of squandering the surplus on 
wasteful government spending, the Bush administration and Congress are 
working to ensure that government provides tax relief to all Americans.
  Mr. Speaker, by reducing the current five tax brackets into four and 
making the new 12 percent rate retroactive, Washington will return hard 
earned dollars to those who earned it, the American citizens. This bill 
allows people to make choices on how to best spend their money.
  The government should not be making that decision for them. This is 
the heart, the heart of President Bush's tax plan, and I urge my 
colleagues to support this bill.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Missouri (Ms. McCarthy).
  (Ms. McCARTHY of Missouri asked and was given permission to revise 
and extend her remarks.)
  Ms. McCARTHY of Missouri. Mr. Speaker, I thank the gentleman from New 
York (Mr. Rangel) for yielding me the time.
  Mr. Speaker, I rise in opposition to the Republican tax cut plan, 
H.R. 3, and in support of the Democratic substitute. I support tax cuts 
for all Americans. Under the President's plan, many of American working 
families would still be left behind.
  The President's tax plan provides each of the wealthiest 1 percent of 
the taxpayers $46,000 in relief with the lowest 60 percent of working 
families getting a tax cut of just $227, or less than a dollar a day. 
This plan leaves working families and children behind.
  Mr. Speaker, 30 percent of Missouri's families will be left behind, a 
third of Missouri's children will be left behind. I support a tax plan 
that focuses its relief on workers and families with children. This is 
fairness.
  I support a budget that protects Social Security and Medicare and 
continues to reduce the national debt. This is fiscal responsibility. 
Supporting a tax cut of such magnitude as the President's will leave us 
unable to meet the needs of the economy of the American people and 
especially the educational needs of our children.
  It is not a fair plan nor a responsible fiscal policy, and I urge my 
colleagues to vote no on H.R. 3 and support the Democratic alternative.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentleman from Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman from 
California (Mr. Thomas), chairman of the Committee on Ways and Means, 
for yielding the time to me.
  Mr. Speaker, the most important reason to have a tax cut is to get 
some of this money out of town. It has been mentioned that spending is 
the danger.
  There are a lot of problems in this country. There are a lot of 
problems in the world, and it is easy for politicians to say let us 
spend a little more of that available money.
  Let me just give my colleagues a quick example, Mr. Speaker, in the 
last one, if we would have stuck to the caps that we set on ourselves 
for 1997, the baseline for the next 10 years would be

[[Page H797]]

$1.7 trillion less spending than the baseline that exists because of 
our expanded spending.
  The danger is more and more spending from this body, and it has been 
said many times how many people believe that if you leave it on this 
political counter in Washington most of it is going to be spent for an 
expanded government; that is the worst thing we can do for the future 
of the economy.
  It is the worst thing we can do for the liability that our kids are 
going to have to bail us out of. Let us get some of the money out of 
town. Let us be fiscally responsible and start setting priorities.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it amazes me the lack of confidence that these 
Republicans have in their leadership as relates to spending, but they 
know best.
  Mr. Speaker, I yield 1 minute to the gentlewoman from California (Ms. 
Lee), who served in the State Finance Committee before she came to the 
Congress.
  (Ms. LEE asked and was given permission to revise and extend her 
remarks, and include extraneous material.)
  Ms. LEE. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me the time.
  Mr. Speaker, I rise today to oppose the Bush tax cut plan, which 
discriminates against millions of families with children, especially 
minority families.
  According to the Center for Budget and Policy Priorities, 55 percent 
of African American families and 56 percent of Latino families, 
including 12 million children, would not receive 1 penny of tax relief 
under the Bush tax plan.
  Let me read you a quote from a full page ad in the West Coast edition 
of the New York Times that ran last week. It says your proposed $1.6 
trillion tax cut inadvertently puts our children at risk.
  Now this ad, this full page ad, was taken out by a multi-ethnic 
coalition of 38 church, community and small business associations in 
California, including the California Hispanic Chamber of Commerce, the 
California Black Chamber of Commerce, and the National Council of Asian 
American Business Associations.
  President Bush states that he wants to unify the Nation, but his tax 
plan is not a unifying plan. It leaves out many minority families. 
Instead of huge tax breaks, we should spend any surplus on education, 
on housing, Social Security and paying off the debt.
  Mr. Speaker, I submit the following ad I mentioned in my remarks for 
the Record:

                [From the New York Times, Mar. 1, 2001]

   Open Letter to the President--We Support Your Pro-Child Inaugural 
               Address: Please Create A Pro-Child Tax Cut

       ``And whatever our views of [poverty's] cause, we can agree 
     that children at risk are not at fault. Abandonment and abuse 
     are not acts of God, they are failures of love.'' (Inaugural 
     Address, Jan. 2001)

       Dear President Bush: Your eloquent and compassionate 
     Inaugural Address will long be remembered if your tax 
     policies follow the pro-children theme of this address.
       Your proposed 1.6 trillion-dollar tax cut inadvertently 
     puts our children at risk. By its sheer size and focus on the 
     wealthiest one percent of families (average income of one 
     million dollars) it jeopardizes the children-at-risk theme of 
     your compassionate educational and health care projects.
       Over half (56%) of all Latino and African American children 
     live in families that will receive no tax cuts.
       Only one in 25 children live in families that will receive 
     any significant benefits, and virtually all of these families 
     can presently fully provide for all their children's needs 
     and wishes.


 protect our most precious resource: a $1,200 annual tax rebate for a 
                             family of four

       Consistent with the compassionate theme of your Inaugural 
     Address we support an annual $300 per person tax rebate for 
     all U.S. residents, including senior citizens. A family of 
     four would receive $1,200 a year.
       Over 95% of children and their families would receive more 
     under this proposal than under your proposal. And, only the 
     top one percent of families (average income of one 
     million dollars) would receive significantly less from the 
     pro-child proposal than from your proposal. Your proposal 
     gives these families $63,000 a year in tax cuts in the 
     first year and close to a million dollars over a ten year 
     period.
       Even the typical senior citizen would benefit. Under your 
     proposal a widow earning $20,000 would get a rebate of just 
     $60. Under the $300 per person proposal, she would receive 
     five times as much.
       And, the typical family earning under $80,000 would receive 
     $233 more per year under this proposal than from your tax cut 
     proposal.
       Unlike your proposal, the $1,200 per family of four 
     proposal will not jeopardize social security, Medicare, 
     military spending, or environmental protection, since it will 
     cost fewer than 90 billion dollars a year and can be adjusted 
     upward or downward depending on the size of our national 
     surplus.
       This $1,200 rebate will directly and immediately stimulate 
     the economy and work in tandem with Federal Reserve Chairman 
     Greenspan's interest rate cuts. It will do so because it can 
     be provided immediately and 95% of the beneficiaries will use 
     it for domestic spending such as health care, food, clothing 
     and housing. In contrast, a tax cut for the super-rich will 
     either not be spent or expended largely on foreign luxury 
     goods such as Ferraris.
       Mr. President, do not forget our children! Do not put our 
     most precious resource at risk! Let their families, not the 
     super-rich determine their future.

       ``African Americans fully understand the distinction 
     between complex tax cuts for the super rich and a sweeping 
     and simple across-the-board cut that equally benefits every 
     American, including the humble and hardworking factory, 
     hospital and restaurant workers of America.'' (Reverend J. 
     Alfred Smith, Jr., co-pastor, Allen Temple Baptist Church)

       ``Latinos future success is largely dependent upon tax 
     policies that promote and protect our most precious resource, 
     our children.'' (Raul Medrano, Chairman, California Hispanic 
     Chamber of Commerce)

     Reverned Mark Whitlock, First AME Church, Los Angeles; Raul 
     Medrano, California Hispanic Chamber of Commerce; Aubry 
     Stone, California Black Chamber of Commerce; Gelly Borromeo, 
     National Council of Asian American Business Associations; 
     George Dean, Greater Phoenix Area Urban League; Reverend J. 
     Alfred Smith, Jr., Allen Temple Baptist Church; Jorge 
     Corralejo, Latin Business Association; Angelina Casillas-
     Corona, Hermandad Mexicana Nacional; Leo Avila, American GI 
     Forum; Mary Ann Mitchell, National Black Business Council; 
     Stanley H. Hall, Bay Area Urban League; Darlene Mar, Council 
     of Asian American Business Association; Reverend Stephen 
     McGlover, Black Business Association; Ben Benavidez, Mexican 
     American Political Association; George Bivins, Black Business 
     Association of Los Angeles; Lisa Yuchengco, Asian Pacific 
     Publishers Association; Gayle Orr-Smith, San Francisco 
     Business and Professional Women; Calvin Louie, CAABA; Ray 
     Uzeta, Chicano Federation of San Diego; Manuel Pena, Orange 
     County Minority Business Council; Arabella Martinez, Spanish 
     Speaking Unity Council; John Gamboa, The Greenlining 
     Institute.

 Prepared by The Greenlining Institute, A multi-ethnic coalition of 38 
church, community, and small business associations, 785 Market Street, 
                      3rd Floor, San Francisco, CA

  Mr. THOMAS. Mr. Speaker, I yield myself 45 seconds.
  Mr. Speaker, I believe that pretty well clears the air in terms of 
what some folks want to do with other people's money.
  I believe that the point of the gentlewoman from California (Ms. Lee) 
was that there are a number of Americans who do not pay income taxes. 
This is a reduction, a permanent reduction in the income tax rate. More 
than 60 million women income tax payers will be benefitted. More than 
16 million African American income tax payers will be benefitted. More 
than 15 million Hispanic American income taxpayers will be benefitted.
  Those African Americans, Hispanics and women who will be benefitted 
are income taxpayers. The concern of the gentlewoman about those who do 
not pay income taxes was addressed by the President when he talked 
about needed reform in Social Security.
  We will be doing that, and we will be doing it soon.
  Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to the 
gentleman from California (Mr. Cox), chairman of the Republican Policy 
Committee.
  Mr. COX. Mr. Speaker, I thank the gentleman from California (Mr. 
Thomas), the distinguished chairman of the Committee on Ways and Means.
  Mr. Speaker, the gentleman could not have said it better. Higher tax 
rates do not produce jobs. Lower tax rates do.
  High tax rates do not help single moms. Lower tax rates do.
  High tax rates do not help our kids and our families. Lower tax rates 
do.
  Mr. Speaker, today, for the first time in 20 years, we had on this 
floor a bill that will provide across the board tax rate relief for 
every working American, everyone. And, of course, the greatest 
percentage relief goes to the lowest end of the income scale.
  The last time we did this was the Economic Recovery Tax Act of 1981. 
That was the catalyst for the staggering economic growth of the 1980s,

[[Page H798]]

the 1990s, the growth that we are still enjoying today. By reducing tax 
rates, we found during the decade of the 1980s that income tax revenues 
to the government more than doubles.
  The problem was, of course, congressional spending at that time which 
more than doubled, but now a fiscally responsible Congress is prepared 
to keep a lid on spending.
  I do expect that we will live within the 4 percent growth in 
discretionary spending that President Bush has laid out for us.
  Mr. Speaker, what better time for a tax rate reduction than when we 
are enjoying record surpluses, something we were not blessed with back 
in the 1980s. Since the 1981 tax rate reduction, the American people 
have suffered eight tax hikes, so that today the tax burden on the 
American people and the tax burden as a share of this largest economy 
in our history is, in fact, the greatest in American history, eclipsing 
even the tax burden of World War II, when we were facing a death 
struggle with Nazi Germany and imperial Japan.
  The need is clear. It is time to reduce tax rates which are placing a 
burden on our economy right now, which is the greatest since the 
largest war in the history of man.
  Mr. Speaker, $2,000 that the average family of four will save because 
of this bill will go a long way towards setting this economy back on 
the path of economic growth and prosperity for every American.
  Mr. Speaker, I want to thank the gentleman from California (Mr. 
Thomas), chairman of the Committee on Ways and Means, for his 
leadership in bringing this bill to the floor and commend this bill to 
my colleagues who I know will vote in its support.
  Mr. RANGEL. Mr. Speaker I yield 1\1/2\ minutes to the distinguished 
gentleman from Massachusetts (Mr. Neal), a member of the Committee on 
Ways and Means.
  Mr. NEAL of Massachusetts. Mr. Speaker, what we are essentially being 
asked to do today is this, to vote on what economic conditions are 
going to be like in 10 years. The gentleman from New York (Mr. 
Houghton) had it right on target when he suggested that.
  Let me take my colleagues back 10 years. What we were told that we 
had to replicate in America 10 years ago were simply Japanese 
management practices. If every businessman and businesswomen in America 
simply did what the Japanese did, we would be in great shape, and the 
prosperity would be just around the corner.
  Who among us would argue that today? We were told we were going to 
have deficits for the next 25 years. Who would argue that today?

                              {time}  1545

  We were told by Paul Kennedy at Yale with his popular book 10 years 
ago that America's best days were behind; and it was widely read and on 
the best seller list forever. Who would argue that today? But yet we 
are being asked to do precisely that by projecting what economic 
conditions will be like a decade from now.
  Then we are being told we better do this today so we can stimulate 
the economy. The Senate is not going to take this up until spring or 
summer, but we are told it has got to be done today. Minimal debate. 
Shove it through. Ram it down the minority's throat.
  Let me tell my colleagues what we are going to do with AMT. We are 
going to make the matter even worse today. Currently, there are 1.5 
million taxpayers who are caught in the AMT net. Under current law, 
that increases to 20 million in 2011, some with incomes as low as 
$50,000. Because of the bill that we have before us today, 15 million 
more people are about to pay AMT over the next 10 years. The problem, 
cost, $292 billion.
  Reject this sham today. We will offer a tax cut here. A reasonable 
tax cut targeted to middle-income Americans is where we should be 
headed.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the distinguished 
gentleman from Georgia (Mr. Lewis), a member of the Committee on Ways 
and Means.
  Mr. LEWIS of Georgia. Mr. Speaker, I thank the gentleman from New 
York (Mr. Rangel) for yielding me this time.
  Mr. Speaker, I rise today in support of the Democratic substitute. 
The Republican bill is not the way to go. It is going to take the 
country down the wrong road.
  This whole thing is unbelievable. It is unreal. In my 15 years in 
Congress, I have never seen such a thing. We are now debating the first 
part of a $2 trillion tax bill, and we are doing it before we have a 
budget. $2 trillion is a lot of money, especially when it is based on 
an unreliable 10-year forecast. There are no assurances. There are no 
guarantees.
  What if we are wrong? What if the surplus does not happen? The 
administration, the Republicans, somebody, somebody is not telling the 
whole story. They need to be honest with the American people, honest 
about the true cost of the bill, honest about what will happen if the 
surplus does not materialize, honest about what will happen to Social 
Security, to Medicare and other priorities. It is time to tell the 
truth, the whole truth, nothing but the truth.
  The Republicans are playing with the numbers. It is deceptive. It is 
a sham. It is a shame. We should be paying down the debt, saving Social 
Security and Medicare, taking care of the basic human needs of all of 
our people.
  The Republican bill is not right for America. It is not fair, and it 
is not just. I urge all of my colleagues to vote against it and vote 
for the Democrat substitute.
  Mr. THOMAS. Mr. Speaker, it is my real pleasure to yield 2\1/2\ 
minutes to the gentleman from Louisiana (Mr. McCrery), a very valuable 
member of the Committee on Ways and Means.
  Mr. McCRERY. Mr. Speaker, I want to talk about debt, because we have 
heard from a lot of folks on the other side of the aisle that they are 
concerned about debt. They are concerned that this tax cut is too big; 
and because it is too big, we will not be able to pay down the debt 
that is going to be a burden on our children and grandchildren.
  Well, I am glad they are concerned about the debt. It is about time. 
But the fact is that we have been paying down debt. The best way to 
gauge the level of debt held by the public is to compute that debt as a 
percentage of our national income, our Gross Domestic Product.
  The Congressional Budget Office baseline, which assumes no tax cut, 
some spending increases and everything else going to debt reduction, 
tells us the debt in 2006, just 5 years from now, will be 9.4 percent 
of our national income, the lowest level since 1917.
  Using that same baseline, but assuming we pass the President's $1.6 
trillion tax cut, the publicly held debt in 2006 will be about 14 
percent of our national income, again, the lowest our debt will have 
been since 1917.
  Now, let us say that we give the President his $1.6 trillion tax cut 
and we spend the rest of the surplus except for that that is 
attributable to Social Security and Medicare. Well, the publicly held 
debt in 2006 would be 15.1 percent of GDP, the lowest level since 1917.
  Well, let us say we will use only the Social Security surplus to buy 
down the publicly held debt. In 2006, it would be 16.6 percent of GDP, 
except for 1 year, 1929, the lowest level since 1917.
  But in his address to Congress just last week, President Bush said he 
would like for us to pay down only $2 trillion of debt over the next 10 
years. Well, where would that leave us? It would leave the debt at 21.5 
percent of GDP, and that would be the lowest level since 1930. And that 
is counting the President's tax cut plus increased spending for 
education, the military, health research, and Medicare.
  We have been paying down the debt. Even with the tax cut and 
increased spending over the next 5 years, our debt will be lower than 
it has been since 1930. Since 1930, we have lived through the great 
depression, World War II, the Korean conflict, the Vietnam war, the 
boom times of the 1980s and the 1990s, and it will be the lowest since 
any of that occurred.
  We can afford a tax cut and pay down the debt. Let us do it.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Roemer).
  (Mr. ROEMER asked and was given permission to revise and extend his 
remarks.)
  Mr. ROEMER. Mr. Speaker, about 2 weeks ago, our President stood right

[[Page H799]]

here and gave a very eloquent and moving address to the country, 
painting a canvas with a brush of statistics about two Americas, an 
American with surpluses and promise and hope, an America with too many 
deficits and failing schools.
  So the question before this body today is: What do we do with those 
surpluses if they show up? Well Alan Greenspan has said urge caution on 
tax cuts, both on spending and on tax cuts. Let us make sure that we do 
not either spend our way back into deficits or tax our way back into 
deficits.
  Secondly, this should be a fair process. According to the accounting 
firm of Deloitte & Touche, a millionaire with grown children gets a 
$47,000 tax break. A middle-class family with two children earning 
$55,000 gets $1,900. Let us work in a bipartisan way to get a real tax 
cut that we can afford that does not challenge our debt and paying down 
that debt and is fair to all Americans.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Washington (Mr. Baird).
  Mr. BAIRD. Mr. Speaker, I rise today with mixed feelings about the 
President's tax bill. Make no mistake, I am in favor of cutting taxes; 
and I support making our Federal tax code more fair. In fact, I have 
written legislation to reinstate sales tax deductibility. I support 
elimination of the marriage penalty and reform of estate taxes.
  While it is important that we provide a tax cut, that tax cut must be 
passed within the context of a balanced budget. We must pay down the 
national debt. We must honor our commitment to Social Security and 
Medicare, and we must make important investments in education, health 
and defense. Those priorities must not be sacrificed in the name of a 
tax cut.
  Under the President's plan, vital programs will have to be cut back, 
and let me give you a couple of examples: The Federal Emergency 
Management Agency and the Small Business Administration are right now 
in my district in Washington State helping people recover from a 
terrible, devastating earthquake. We must not cut programs to FEMA, to 
SBA and other critical investments. How many small businesses will not 
get support if we pass this excessively large tax cut. I support tax 
cuts, but the President's plan does not do the job the proper way. 
Support the Democratic alternative.
  Mr. Speaker, I rise today with mixed feelings about the President's 
tax relief bill. Make no mistake--I am in favor of cutting taxes and I 
support making our federal tax code more fair.
  I not only favor tax cuts and tax fairness, I have written 
legislation that will reinstate the sales tax deduction for citizens of 
states that do not have an income tax. I support relief for those 
penalized by the marriage tax. I support estate tax relief. I support 
tax cuts that will benefit each and every American. However, we in 
Congress have a duty to have an honest, thoughtful debate on the 
consequences of a tax cut as large as the one we are considering today, 
and that has not happened.
  While it's important that we provide a tax cut, I feel strongly that 
such tax relief must be passed within the context of a balanced 
budget--we must be able to pay down the national debt, we must be able 
to honor and strengthen our commitment to Social Security and Medicare, 
and we must be able to make important investments in education, health, 
conservation, and defense. These priorities cannot be sacrificed.
  I also believe it is unwise for the House to pass a large tax cut 
before we pass a budget. It just doesn't make sense to talk about 
spending trillions of dollars on a tax cut before we have established a 
budget that takes into account both spending and revenues. No small 
business could operate that way; no family could sustain that kind of 
spending--and we in Congress shouldn't do it either.
  As I said before, I support eliminating the marriage tax. I support 
changing the estate tax system. I want to restore fairness to the tax 
code by restoring the sales tax deduction.
  But the bill before us makes none of those changes. And worse, I am 
afraid that passage of this bill will cause serious hardships for 
residents of my home state.
  Under the President's plan, the Commerce Department, the 
Transportation Department, the Corps of Engineers and the Small 
Business Administration will all have to be cut back--some 
drastically--to pay for this tax bill.
  The Federal Emergency Management Agency (FEMA), which was sent into 
action just last week in my district following a devastating 
earthquake, is one of those agencies slated for a number of deep cuts. 
Let me tell you, we cannot afford to strip down agencies like FEMA, 
because if your home or business is wiped out in an earthquake, I don't 
care how big a tax cut you get, you're going to need agencies like FEMA 
and SBA to be there to help you rebuild your neighborhood and to 
rebuild your life.
  How many small businesses won't get the SBA loan they need to stay in 
business? How many construction projects will the Corps of Engineers 
have to defer or abandon because they don't have adequate funding to 
move forward? How many roads and bridges will fall into disrepair 
because we could not fund transportation projects?
  For these reasons, although I support fair and reasonable tax cuts 
that would stimulate the economy, I must oppose the tax bill before us 
today.
  Mr. Speaker, when we make a rush to judgment, we can place vital 
programs at-risk. When we spend $1.6 trillion or more without a budget 
to show us the impact of that spending, we place our nation's future at 
risk.
  Vote no on this bill today and let's bring up a tax relief bill that 
we can all stand behind.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Ohio 
(Mr. Kucinich), who is the Chair of the Progressive Caucus in the 
House.
  Mr. KUCINICH. Mr. Speaker, we can be for tax relief, but it makes 
sense to see the budget first. The government should not spend money 
that it does not have and should not give away money it might need. I 
know there are some people with great resources who do not need public 
education, Social Security, Medicare, or prescription drug benefit. 
Some do not need these programs because they can take care of 
themselves.
  Mr. Speaker, why give away 43 percent of the tax cuts to the top 1 
percent when we may need that money for education, Social Security and 
Medicare needed by most Americans. Basic American fairness requires 
that we should give the most to the many. Under our alternative, 
millions of waitresses, mechanics, nurses, home health aides, teachers 
and factory workers would get about $300. Families would get between 
$600 and $800.
  Mr. Speaker, that proud eagle above our heads spreads its wings to 
protect the entire Nation. It is not some bird to be plucked and 
stuffed and eaten by a few.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
North Dakota (Mr. Pomeroy), a new, but valuable member of the Committee 
on Ways and Means.
  Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  The Rangel substitute represents a better way to proceed on getting 
tax relief to the American people, in sharp contrast to the majority 
bill which we know is step one of a series of measures committing all 
of the general fund surplus based on an optimistic revenue forecast 
stretching out 10 years. The Rangel bill is responsible; it fits within 
a framework that commits nearly a trillion dollars of the projected 
surplus to tax relief, but also recognizes there are other budget 
priorities like paying down the debt.
  The majority bill backs off of debt retirement. It poses the prospect 
that we might dissipate the surplus now and leave the national debt 
behind for our children to take care of. The Rangel substitute focuses 
tax relief on middle-income families, and as a result, does a better 
job of giving them relief than the majority bill. It also gets relief 
to the millions of Americans who pay payroll taxes but earn at levels 
so modest they do not have income tax liability. They get nothing under 
the majority bill; they get relief under the Rangel substitute.
  Mr. Speaker, a final strength of the Rangel substitute is that unlike 
the majority bill, it fully protects the Social Security and Medicare 
trust funds. Folks think the money they pay in payroll taxes and Social 
Security and Medicare ought to be used exclusively for those purposes, 
but only the Rangel substitute makes that so.
  It is time for tax relief, and the Rangel substitute is the right way 
to do it.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Shaw), a very valuable member of the Committee on Ways and 
Means.
  Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I have been sitting on the floor for the last few minutes, and I 
heard one Member say we cannot predict with absolute certainty what the 
economy is going to be, what revenue is going to be, what spending is 
going to be 10 years from now, and then from that

[[Page H800]]

come to a conclusion that the American people do not need a tax 
reduction.
  If we are waiting for absolute certainty in our projections, the 
American people will never get anything back, but then what disturbs me 
most is a comment that was just made on the floor a few moments ago 
when one Member said the government should not give away money it may 
need. The government may not give away money it may need.
  Mr. Speaker, this is the taxpayers' money. It is not the government's 
money. When the government has enough to operate and to pay down the 
debt and to act in a responsible way for the foreseeable future, it is 
our obligation to let the American taxpayers keep more of what they 
earn.
  There are things that we do know with certainty. We do know that 
Federal taxes are at the highest level ever since peacetime. Americans 
work for more than 4 months just to pay their taxes. We know that with 
certainty. The typical American family pays more than 38 percent of its 
income in total taxes. We know that. On top of that, households are 
facing higher energy prices. My colleagues from the Northeast know 
that. The price of oil has doubled over the last 18 months. 
Manufacturing activity is at its lowest level since the 1990 recession. 
We know that. These are things we know and these are things that we 
have to operate on.
  The Congress is not going away. We are going to be back year after 
year after year. The miracle of our democracy is that we are able to 
adjust to the times. We are able to adjust to current circumstances. We 
are able to adjust to our economy. Let us pass this tax bill. It is the 
taxpayers' money, it is not the government's money.

                              {time}  1600

  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Sherman).
  Mr. SHERMAN. Mr. Speaker, before we pass a series of tax cuts 
totaling over $2 trillion, we need to know what we can afford. The 
Republican plan is based on unreliable projections, no budget 
resolution, no administration budget.
  Mr. Speaker, this is what a budget for the Federal Government looks 
like; yet what we have been given by the administration is this. 
Scarcely more than a long political pamphlet. In fact, it is skimpy 
compared to the budget of the State of Rhode Island. Mr. Speaker, 
perhaps the fuzziest of fuzzy math is to provide no numbers at all.
  My colleagues, the President stood where the Speaker stands now and 
asked us to think of a struggling unmarried waitress with two kids. Yet 
most waitresses, raising two children, get nothing under the 
President's plan. Not even a one cent insult tip is left on the table. 
The Democratic substitute provides such waitresses with $539 and leaves 
$1.5 trillion more to pay off the national debt by 2008.
  Let us stand up for Social Security, Medicare, and fiscal 
responsibility, and vote for the Democratic substitute.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Vermont (Mr. Sanders).
  Mr. SANDERS. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, the Republican proposal is grossly unfair and grossly 
irresponsible. At a time when millions of middle-class families are 
struggling to keep their heads above water, the Republican proposal 
provides 43 percent of the tax breaks to the wealthiest 1 percent, the 
people who need it the least, and 12 percent of the benefits to the 
bottom 60 percent of the people who need it the most.
  Equally important, by providing a huge $1.6 trillion tax break, there 
will not be money available in future years to help us in Social 
Security, Medicare, Medicaid, veterans needs, and education. Can we 
afford a tax cut? Yes. It should be smaller than the President's, and 
it should be geared to the middle class and not the wealthy. Support 
the Rangel substitute.
  Mr. THOMAS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Missouri (Mr. Hulshof), a very valuable member of the Committee on Ways 
and Means.
  (Mr. HULSHOF asked and was given permission to revise and extend his 
remarks.)
  Mr. HULSHOF. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, in a few moments, I expect my colleague from Missouri, 
the Democratic leader, will be coming to the well of the House and 
closing on the Democratic alternative. I find it noteworthy that over 
the last 4 years we have had 12 occasions to debate a substantive tax 
relief measure, and these are the Congressional Records from those 
debates. I note that my colleague from Missouri, who is likely to join 
us in a few moments, has spoken in opposition on each and every 
occasion save one. My good friend from Missouri has never met a tax cut 
that he did not spike.
  I go back to the Taxpayer Relief Act of 1997, and we were in the 
midst of deficits. As we were debating as a body whether to create an 
education savings account, cutting the capital gains tax rates, putting 
into place the Roth IRA, here are the statements from my good friend 
from Missouri. Let me say this, and I am quoting from the Record, ``I 
am a tax reformer. I believe we ought to get less deductions and 
exemptions and special treatment. I think we need to get lower rates 
for everybody.'' Amen, I say, Mr. Speaker. Vote for H.R. 3. This is 
across-the-board relief, where the greatest reductions are going to 
those who pay in the lower income tax brackets.
  Let us fast-forward a year to 1998, as we were considering the 
Taxpayer Relief Act of 1998. On that occasion the gentleman from 
Missouri argued against the bill primarily because of his concern about 
raiding the Social Security Trust Fund. Again I go to the Record: ``I 
am from Missouri. We have a saying in Missouri. Show me. Show me the 
trust fund.'' Well, we took that comment to heart as well. I think that 
everyone in this Chamber recognizes that this Republican majority has 
locked away every penny of the Social Security and Medicare trust funds 
and payroll taxes. What we are talking about in this tax relief measure 
today is the overpayment of income tax surpluses.
  If the Chair would permit me one final example. As we were debating a 
year ago the tax relief measure, again I think the gentleman from 
Missouri, with his usual rhetorical flourish, came before us and cried 
foul about the Republican plan for tax relief, talking about needing to 
pay down the debt and pointing out that a family of four earning 
$50,000 a year would only receive a refund of about $250. Once again, 
we have taken those constructive comments to heart. We are making 
unprecedented progress on paying down the national debt. And when the 
President's tax plan is fully phased in, that working family of four 
making $50,000 a year, that the gentleman from Missouri defended so 
vigorously, they will see their tax bill reduced by $1,600 annually.
  I suppose through these congressional pages the arguments against tax 
relief are myriad and numerous. And I suppose my colleagues could 
conjure up any number of reasons to vote ``no.'' Here is a compelling 
reason to vote ``yes'': it is not the government's money. On behalf of 
hard-working American taxpayers, I join with our President in asking 
for a refund, urging my colleagues to vote ``no'' on the Democratic 
alternative and ``yes'' on H.R. 3.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Minnesota (Mr. Luther).
  Mr. LUTHER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, Americans deserve to know the truth about the Federal 
budget, and they need to know that the surplus money, loosely being 
talked about, does not exist. In fact, what is occurring today are 
budget projections. That is what is being talked about.
  As my colleagues can see from this chart, this shows the surplus 
projections from the nonpartisan Congressional Budget Office, that the 
current projection could easily be nearly $.5 trillion off in just 5 
years. We have a tremendous opportunity here today. Let us not make the 
mistakes of the past, but rather let us use common sense and develop a 
national budget before we begin to allocate future projections for the 
next 10 years.
  Let us change the way Washington operates today. Let us function like

[[Page H801]]

real families in the real world. Real families would not risk the 
future of this country with deficit financing like what was done in 
this country by this Congress just a few years ago.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Maryland (Mr. Hoyer), a distinguished member of our delegation here.
  Mr. HOYER. Mr. Speaker, welcome to the Great River Boat Gamble of 
2001. Today our Republican friends are urging the American people to 
take a luxurious vacation into the tax cut casino. But let us remember, 
we have not even written our budget yet and do not have any idea 
whether or not we can afford it.
  Everyone agrees that we ought to have a tax cut, and in 1997 I voted 
for that bill to which the gentleman referred. We need tax relief. It 
is clear from this fiscally irresponsible bill, however, that the GOP 
has not learned a thing from the mistakes of the past.
  Twenty years ago, President Reagan assured America we could have it 
all, a huge tax cut, a major defense buildup, and a balanced Federal 
budget, which he guaranteed us in August of 1981 when he signed the tax 
cut. He said it would be balanced by October 1, 1983. We had about a 
$100 billion deficit that year alone.
  George Bush, our current President's father, said that was voodoo 
economics. He was right. It is the taxpayers' money; and, my friends, 
the debt is also the taxpayers. Let us be responsible. Let us vote for 
the Democratic alternative. Let us make sense for America.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Bonior), our distinguished minority whip, under the very 
restrictive time that we have.
  Mr. BONIOR. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, many of us here have served through a number of 
administrations. We have seen how each President has had his own 
agenda. But they all understood one thing, and that is that they could 
not ask Congress to make decisions about taxes unless they had a 
budget. It is a matter of fiscal responsibility. Yet this White House 
has decided that that rule does not apply to them.
  Democrats, as we have heard, want to cut taxes. But what is the White 
House response when we point out the President's scheme will cost over 
$2 trillion, or when we ask how they are going to pay for improving 
Social Security or education or Medicare, or when we ask how we are 
supposed to pay down the debt? Trust us, they say. They say trust us, 
the money is going to be there. Well, if I can paraphrase former 
President Reagan: it is good to trust, but it is better to verify.
  It took years to pull ourselves out of the financial hole created by 
the last two Republican Presidents, and now this one is proposing that 
America jump right back into it. And for what, a tax cut that gives the 
richest 1 percent of Americans 43 percent of the breaks, while a 
waitress, who has maybe a couple of kids and is making $22,000 a year, 
gets nothing at all?
  We can provide families with the tax cuts they have earned and still 
strengthen Social Security and modernize Medicare and provide for 
education and prescription drug care. That is what our substitute does. 
Our plan is backed by real numbers, not by empty promises. And unlike 
the President's scheme, it will not break the back, it will not burn up 
the surplus and plunge America deeper into debt. This country has been 
down that road before, Mr. Speaker. Why would we ever want to go back 
down that path?
  I urge my colleagues to vote ``yes'' for the substitute by the 
gentleman from New York, and, if it fails, to vote ``no'' on final 
passage.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes and 10 seconds to the 
gentleman from Texas (Mr. DeLay), the majority whip.
  Mr. DeLAY. Mr. Speaker, I have to say, that the Democrat leadership 
has no credibility when it comes to fiscal responsibility. They are the 
ones that were in charge and who drove up the debt.
  They point to Reaganomics as the reason for the debt going up, but 
what they do not point out is that because of the Reagan tax cuts 
revenues went up twice, two times as much. The problem was that the 
Democrat-controlled House drove spending up three times as much. It is 
spending, stupid. It is spending that creates the deficit. It is 
spending.
  And now, Mr. Speaker, the Democrat substitute amendment is a paltry 
half measure that falls far short of the important tax relief that the 
American taxpayers deserve and should demand from this Congress. But 
there is more at stake here than the simple math of reducing the unfair 
tax burden on the American people, and that is that taxes are simply 
too high.
  Clearly, whenever the Federal Government runs a surplus, taxes are, 
by definition, too high. But our opponents would have us believe that a 
budget surplus only proves that the Federal Government is not spending 
enough. And listening to the debate this afternoon, we have been warned 
in a hundred different ways that the sky is going to fall if we simply 
allow the taxpaying American public to keep more of what they earn.
  Let us just sweep aside all those empty arguments, because this 
debate raises a fundamental question: Will we let the Federal 
Government spend first and then stick the taxpayers with the bill? They 
want to spend the tax surplus; we want to let America keep it. Will we 
let the American people determine how high their taxes should be and 
then require the Congress to live within its means? That is how it 
works for every American family. That is how America runs its small 
businesses, and that is how the Federal Government should keep its 
books. Only in Washington do we spend the taxpayers' hard-earned money 
first and ask questions later.
  Our opponents argue that we cannot offer tax relief because the 
budget for the next fiscal year has not been completed. But we have a 
surplus this year, and we want to help American families this year. We 
can do it, we should do it, and we will do it by allowing every 
American taxpayer to keep more of what they earn.
  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the gentleman from 
Maryland (Mr. Hoyer) to correct the record.
  Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, the majority whip has the same tired bogus argument. Let 
me remind my Republican friends that from 1981 to 1987 the Senate was a 
Republican United States Senate. Let me remind my friends, if they have 
forgotten, that Ronald Reagan was President of the United States. Let 
me remind my colleagues further that not one bill was vetoed by Ronald 
Reagan and had his veto overridden to spend more money. Not one.
  So get rid of this bogus argument as to who upped the debt of this 
Nation.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
California (Mr. Becerra), a valued member of the Committee on Ways and 
Means.

                              {time}  1615

  Mr. BECERRA. I thank the ranking member for yielding me this time.
  Mr. Speaker, we need a plan to cut taxes that will be responsible, 
that will be fair and will invest in our future. We would not be 
allowed to buy a house anywhere in America if we could not prove that 
we could pay that mortgage on that home. Yet today Congress is telling 
America, we can buy a house, we do not have to tell you where the 
budget is, nor do we have to tell you how in the next 10 years we will 
get the money. We just have projections and we will assume we will have 
the money. Now, if that is considered responsible, then you will see 
how we get back to those deficits that we had for years and years and 
years.
  We finally have a surplus. Let us stick with those surpluses that we 
have and not get back into deficit spending. Is it fair? One in three 
California families with children will not get anything out of this 
Bush tax plan. Does it invest in our future? Well, there will not be 
enough money to strengthen Social Security and Medicare. There will not 
be enough money to invest in education. There will not be enough money 
to promote economic growth in our neighborhood and certainly there will 
not be the money to pay down the national debt which will be now 
hoisted on our children in the future who will have to pay for our sins 
and for our work if we pass this bill.

[[Page H802]]

  Let us be fair, let us be responsible, and let us invest in our 
future. Let us vote for the Democratic substitute and bring down the 
Bush tax plan.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to 
the gentleman from Oklahoma (Mr. Watts), the Conference chairman.
  Mr. WATTS of Oklahoma. Mr. Speaker, I would encourage everyone to 
take off their Republican and Democrat caps here and just consider 
something. We tax the American people from the time they wake up until 
the time they go to bed.
  When you get up in the morning and you go take a shower, you get 
taxed on the water. When you go and eat your breakfast, you get taxed 
on your food. When you go and put your clothes on, you get taxed on 
your clothes. When you get in your car and go to work and buy fuel, you 
get taxed on your fuel. When you go to work and punch the clock you get 
taxed on your income. When you come home in the evening, turn on the TV 
and you watch Fox News Network or Fox Sports Network or CNN or ESPN, 
you get taxed on your cable. And then you go and you fall to your knees 
at night, you pray to the true and living God, thank him for the day 
you have had, then you get off your knees, kiss your bride good night 
and you think that is free, but it is not. You get taxed. You have a 
marriage tax. Then if you say I am going to get out of all this and 
die, we still get you. We tax death. It is unfair.
  The American people are overtaxed. What we are saying in this $1.6 
trillion tax relief package, let us take six pennies that comes into 
Washington over the next 10 years and give it back to the taxpayers, 
give it back to the people that pay the bills in Washington and pay the 
bills at home. And then we are going to take 94 cents and put more 
money in education, build national defense, take care of Social 
Security, pay down the debt, which we have done over the last 3 years. 
When the Democrats were in control, I will remind my friends that for 
35 years they paid not one dime on the national debt. They spent the 
Social Security surplus. We protected that.
  What is so bad about giving people some of the money back to help 
them buy groceries, pay the utility bills, help buy the kids school 
clothes, help pay for the car insurance? What is bad about that? What 
is bad about eliminating all of the marriage tax, to say we should not 
penalize people simply for saying ``I do.'' That is wrong. We should 
not penalize small businesspeople and people who own farms and pay 
taxes on them every year and then when they die, the government gets 55 
percent of the farm. Why would we be supportive of that? What is bad 
about allowing people who have kids to not write off $500 per child, 
but $1,000 per child? What is bad about that? I do not understand this.
  There are two philosophies here in play. One says we want to keep the 
money in Washington and spend it on Washington programs to create power 
for ourselves. There is another philosophy that says we want to take 
six pennies of every dollar that comes into the system and give it back 
to the American people. Vote no on this substitute and yes on final 
passage.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Rhode 
Island (Mr. Langevin).
  (Mr. LANGEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LANGEVIN. Mr. Speaker, I rise today in strong opposition to H.R. 
3 because it flies in the face of the disciplined approach to spending, 
commitment to paying down the national debt and responsible tax relief 
that I have always advocated.
  In my home State of Rhode Island, the Republican plan will leave out 
an estimated 34,000 families and their 68,000 children because they do 
not have Federal income tax liability. A full 25 percent of Rhode 
Island's families with children would not see a cent under H.R. 3.
  That is why I have cosponsored and will vote today for the Democratic 
substitute. I support a tax package that provides relief to everyone 
who pays Federal income or payroll taxes. This plan is fiscally 
responsible and offers immediate and fair relief for middle- and low-
income families. What is more, the Rangel substitute will leave enough 
room for us to make substantial progress in paying down the national 
debt, a goal which should inform every aspect of our budget policy.
  Therefore, I urge my colleagues to support the Democratic substitute 
and vote against the underlying bill.
  Mr. Speaker, I rise today in strong opposition to H.R. 3, the 
Economic Growth and Tax Relief Act, because it flies in the face of the 
disciplined approach to spending, commitment to paying down the 
national debt, and responsible tax relief that I have advocated since I 
entered public service 15 years ago. Instead, as a co-sponsor of the 
Democratic substitute, I support a tax package that would give relief 
to those who need and deserve it the most.
  As rosy as the budget surplus projections look now, it is important 
to remember that they are in fact only that: projections. We cannot 
assume that these projections guarantee a decade or more of windfall 
revenues, and such a rash conclusion could lead to our debt spiraling 
further out of control. A simple trigger mechanism would halt the 
implementation of tax cuts if the surplus does not materialize. This 
precaution would safeguard our budget against inaccurate projections, 
but H.R. 3 fails to include such commonsense protection.
  I would also remind my colleagues that Congress is required to pass a 
budget resolution at the beginning of each year precisely because 
Members need to know what funding levels are feasible for a broad range 
of critical federal programs. Otherwise, Congress risks spending money 
the government does not have, which is exactly what will occur with the 
passage of H.R. 3.
  Let us not forget that just recently we struggled with annual 
deficits of up to $290 billion, a national debt of $5.6 trillion, and 
interest-only payments on that debt of $300 billion annually. Put into 
perspective, those interest payments represented more than we were 
spending on Medicare, and almost as much as our entire national defense 
budget.
  Retiring the national debt is a paramount concern that should inform 
every aspect of our budget policy. I want to be secure in the knowledge 
that our debt will continue to be reduced and our children and 
grandchildren will not have to shoulder the burden of our recklessness. 
In addition, paying down the debt will result in one of the best tax 
cuts we can provide to America's working families. Reduction and 
elimination of the debt will ensure low interest rates and a sound 
long-term economic future for the nation.
  We all want to reward hard-working families by returning some of 
their tax dollars, but this cannot come at the expense of our nation's 
future fiscal well-being, nor should we adopt an approach that is so 
disproportionately skewed toward the wealthy. I have strong 
reservations about the size of the across-the-board tax cut included in 
H.R. 3 and the inadequate number of taxpayers who would benefit from 
it. Under this measure, an estimated 34,000 families with children, 
68,000 children to be exact, in my home state of Rhode Island would not 
benefit from the proposed rate cut because they do not have federal 
income tax liability. In other words, 25 percent of Rhode Island 
families with children would not see a cent of the Republican tax cut!
  While they would see no benefit from an income tax cut, these 
struggling families would still be required to pay the same payroll tax 
as wealthier Rhode Islanders, which is a significantly higher 
percentage of their income. For most families, the largest federal tax 
burden is their payroll tax, not the income tax. Furthermore, all 
families must pay state and local taxes--again, low-income families pay 
a considerably larger percentage of their income in such taxes than 
wealthier families. That is why H.R. 3 is not a tax cut for all but 
rather the few. And that is why I cannot support this bill in its 
current form.
  Instead, I am cosponsoring the Democratic substitute with the Ranking 
Member of the Ways and Means Committee, because it is fiscally 
responsible and offers immediate and fair tax relief for middle- and 
lower-income families. This measure would create a new 12 percent tax 
bracket, give all Americans an across-the-board tax cut, and give those 
working families who pay only payroll and federal excise taxes a refund 
through expansion of the Earned Income Tax Credit. It also provides 
marriage tax penalty relief by doubling the standard deduction for 
married couples and leaves room in the budget for consideration of 
estate tax relief in the future. Most important of all, under our 
alternative, families with children who earn less than $65,000 will 
receive equal or larger tax breaks than under the Administration's 
proposal.
  I ask my colleagues to consider all of our nation's needs. Without a 
doubt, taxpayers deserve relief. But they also deserve a strengthened 
Social Security system, a Medicare program that covers necessary 
prescription drugs, a military that is equipped to protect our nation, 
a quality health care system that is affordable and accessible to every 
family, and a world-class educational system that prepares our children 
for the 21st century. These needs

[[Page H803]]

are great and they must not be ignored. Because--at the end of the 
day--I refuse to look into the eyes of our elderly, our children, our 
soldiers and our working families and tell them that I traded their 
futures for those of the wealthy.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Florida (Ms. Brown).
  Ms. BROWN of Florida. Mr. Speaker, here we go again, another round of 
voodoo economics and another huge tax cut for the rich. I encourage my 
colleagues to consider the terrible situation in my home State of 
Florida, where massive tax breaks for the rich have come at the expense 
of much needed services for the poor.
  Yesterday, Florida Governor Bush called for even more tax breaks for 
the rich while continuing to neglect some of the most pressing issues 
facing Florida residents. The Bush tax cuts are like the Reagan cuts 
that devastated our economy with huge debts, skyrocketing unemployment 
and high interest rates. We have been down that road before and it took 
us 20 years to crawl out of that mess.
  I would like to remind my Republican colleagues that the American 
people did not support the Bush plan. We would not be in this mess if 
the coup had not taken place in Florida. There is no mandate for the 
Bush plan. He did not win the election. And the majority of the people 
did not vote for this irresponsible action of this Congress.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from South 
Carolina (Mr. Spratt), the ranking Democrat on the Committee on the 
Budget.
  (Mr. SPRATT asked and was given permission to revise and extend his 
remarks.)
  Mr. SPRATT. Mr. Speaker, in 1 minute this chart says it all. These 
are the reasons we cannot support this tax bill. It starts with the 
surplus, a blue sky surplus estimated at $5.6 trillion. We then back 
out what everybody agrees we should back out, the surplus in Social 
Security, the surplus in Medicare. That gives us an available surplus 
of $2.527 trillion. And what is the cost of this tax cut? When we add 
debt service, associated debt service, and when we also add the cost of 
extenders we know will be provided and the cost of fixing the AMT, it 
is $2.3 trillion. That leaves $207 billion to cover other priorities 
and Social Security. It leaves no room for error, no room for other 
priorities, no room for Social Security and Medicare.
  That is why we are offering a much more moderate substitute that is 
balanced and will provide for all of these things, including tax 
reduction.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 3 minutes to the 
gentleman from Texas (Mr. Armey), the majority leader.
  Mr. ARMEY. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I want to thank the gentleman from California for his 
leadership as well.
  Mr. Speaker, I have to say I chuckle at what I am hearing here today. 
Actually I am amazed. I am hearing all these reasons why we should not 
give people tax relief. Have we ever before heard so many reasons for 
not doing the right thing?
  ``It's too big.'' ``It's too soon.'' ``What's the rush?'' ``It's too 
risky.'' ``People don't want it.'' ``We can't afford it.'' ``You've got 
the cart before the horse.''
  Beam me up, Mr. Speaker.
  This bill, Mr. Speaker, is the least we can do.
  The American people are paying the highest taxes in peacetime 
history. Families pay more in taxes than they do on food, clothing and 
shelter combined. We have had 15 years of tax rate increases and 
retroactive tax hikes. Americans now work 1 hour and 57 minutes out of 
each working day just to pay taxes to Washington. The American people 
are working hard. They produced these huge tax surpluses. They have 
earned some relief. They now deserve something, this year.
  Mr. Speaker, this tax relief is the least we can do.
  Mr. Speaker, the American people are nervous. They see the economy 
slowing, they see their neighbors losing their jobs, they see their 
401(k)s and their mutual funds shrinking, while their energy bills 
double, triple and even, in California, quadruple. Their credit card 
debts are going up. They expect us to do something.
  Mr. Speaker, this tax relief is the least we can do.
  Over the next 10 years, taxpayers will be overcharged by a staggering 
$5.6 trillion. Even after paying down the payable debt, and funding all 
our priorities, Washington will still be awash in cash surpluses. If we 
do not get that money out of town, it will either be spent or it will 
be used to start buying into the private economy. Either way, the 
government will grow and personal freedom will suffer, unless we get 
our fiscal house in order now. We need to get that money out of 
Washington and in the pockets of the American people, and we need to do 
this as soon as possible.
  And, Mr. Speaker, this tax relief is the least we can do.
  Eight years ago, President Clinton raised taxes, retroactively. Two 
years ago, he vetoed $792 billion worth of tax reduction that would 
have stimulated this economy and would have helped to avoid the current 
malaise. He later vetoed marriage tax relief. He vetoed death tax 
relief. He even vetoed the repeal of the Spanish-American War telephone 
tax. And last year some in the House Democrat leadership actually 
opposed our bill to promote retirement savings, a bill that passed with 
over 400 votes. Obviously the Beltway liberal elites just do not want 
tax relief. They have delayed and obstructed long enough. The time for 
action, Mr. Speaker, is now.
  And, Mr. Speaker, this tax relief is the least we can do.
  But it is not all we should do. This is just the beginning. We are 
going to do a lot more. We are going to eliminate the unfair marriage 
penalty tax. We are going to eliminate the immoral death tax. We are 
going to promote retirement savings. We are going to help people afford 
health insurance. And as we fight for fairness, we should not be bound 
by some artificial number. We should do what is right for the American 
people. Because, Mr. Speaker, it is their money. They earned it. They 
produced it. It is theirs.
  And this tax relief, Mr. Speaker, is the least we can do.
  Mr. Speaker, some people here are saying, ``Enough already.'' Let me 
tell you, there is a whole lot more to come.
  Mr. RANGEL. Mr. Speaker, I yield the balance of my time to the 
gentleman from Missouri (Mr. Gephardt), a voice of reason, the minority 
leader of the Democratic Party.
  (Mr. GEPHARDT asked and was given permission to revise and extend his 
remarks.)
  Mr. GEPHARDT. Mr. Speaker, I rise to ask Members to vote against the 
tax bill offered by the Committee on Ways and Means and to vote for the 
substitute offered by the gentleman from New York (Mr. Rangel). I 
arrive at that position for a number of reasons.
  First, I think that it is wrong to be taking up a tax bill without a 
budget. In fact, without even spending a moment deciding what the 
budget will say. By assigning 900 and some odd billion dollars to a tax 
cut that this bill encompasses, we are making decisions that will make 
it difficult, or different at least, to make other decisions that we 
might want to make in the budget, how much debt we are going to pay 
down, how much we are going to assign to defense or education or health 
care or all the other functions that are in the budget.

                              {time}  1630

  So the cart is in front of the horse, and we should be waiting for 
this tax bill until we have considered the budget.
  A second reason that I urge Members to look at the Democratic 
alternative is because the forecasts that are the premise of the 
context for this tax cut bill so often are wrong. In fact, CBO recently 
said that they are always wrong. Now, sometimes they are better than we 
thought they were going to be; sometimes they are worse.
  The other day the weather forecasters said we were going to have a 
big snowstorm in the Northeast. A lot of us listened to that forecast. 
People decided not to fly. Flights were cancelled. Airports were 
closed. People stayed home from work. People went and got shovels and 
bought water and flour and bread. Then it did not snow. When it did not 
snow, none of us were surprised because often weather forecasts are 
wrong.

[[Page H804]]

  We are taking an action today, if we vote for this bill, that really 
leaves us less alternatives in case the forecasts are wrong. Why would 
we want to do that?
  The third argument I would make is that the thing we have to keep 
most on our mind is what action can we take that will best help the 
economy, that will make the economy go forward?
  I had lunch the other day with a very wealthy individual, and he said 
why are you doing this big tax cut?
  I used a lot of the arguments that my friends on the other side of 
the aisle make, and that I believe and we all believe, and that is we 
have a big surplus and we ought to give taxpayer money back to 
taxpayers. That is the right thing to do. That will help the economy.
  He said, yes, a tax cut of a reasonable size will be helpful to 
people, but he said remember the most helpful thing to all of us is 
keeping the economy working. Then he said, think about this: 1 percent 
off interest rates would pick up for an average family of four about 
$1,500 a year savings in car payments and house payments. If we add 
that to a reasonable tax cut, he said, maybe $800 a year, we are going 
to wind up putting more money in those people's pockets than by the 
larger tax cut that would probably keep interest rates up.
  We have to keep in our mind that the goal here is to keep the economy 
moving, to keep unemployment down, to keep growth up, and one of the 
best ways to do that is to keep interest rates down.
  So I argue today, think about what this does to the economy and to 
ordinary families in this country who pay interest rates every month.
  Another reason that I think we need to reconsider this tax cut and to 
go for the smaller alternative is because it allows us to take care of 
other alternatives in the budget.
  The President has talked very dramatically about what he wants to do 
in education. Query: Will we have the funds to do what he wants to do, 
what we want to do, in education? Will we be able to take care of 
Medicare and Social Security?
  Ken Conrad, the other day, made a very important statement. He said 
we could make a mistake on a tax cut in 1981 but we did not have $4 
trillion in debt at the time and we did not have the baby boomers come 
into the Social Security fund 9 years from now. We all voted 2 weeks 
ago to put Medicare in a lockbox. The budget the President sent that 
encompasses the tax bill, part of which is on the floor today, invades 
the Medicare Trust Fund. The lockbox has already been picked if we vote 
for this kind of a tax bill.
  Do we really want to do that? I do not think so.
  Then there is the issue of fairness. If we are going to deliver tax 
relief, let us deliver it to the people who most need it. We have 12 
million families in this country with 24 million children who will not 
get one red cent out of the Republican tax cut. They pay payroll taxes. 
They do not pay a lot of income taxes. Our tax bill, on the other hand, 
delivers real help to them.
  Finally, let me simply say this: President Bush came just a few days 
ago to this Chamber. He came to Washington just a few weeks ago to be 
inaugurated, and he said he wants to be the uniter and not the divider. 
He said he wants to change the culture in this town; he wants to 
compromise; he wants to work with all parties and all people to put 
together compromise, bipartisan solutions to our problems. His rhetoric 
has been welcome. The American people want us to work together in the 
middle to get things done, but I must say with all due respect that 
this tax-cut bill, coming without a budget, is another my-way-or-the-
highway approach to legislating in this Congress.
  The President, my friends on the other side of the aisle, could 
easily sit down with the Democrats on the Committee on Ways and Means, 
and we could reach an honest compromise on taxes.
  Everybody in this Chamber is for tax cuts. It is a question of how 
much they cost and to whom they go. Surely in the spirit of real 
compromise, we could come together and find an answer to this question 
that would get 400 votes on this floor today. We could do that. I 
believe that with all my heart.
  So I say to my friends on the other side of the aisle, let us stop 
this approach to legislating. We are going to have a bipartisan retreat 
this weekend and we go in the spirit of trying to find bipartisan 
answers, but we cannot just be bipartisan in West Virginia. We have to 
be bipartisan in this building, and we have to work together and do the 
hard work of finding those compromises that we can both live with. We 
should have a tax bill on this floor today that gets over 400 votes. 
The American people would appreciate it, and I believe that it is what 
the American people told us they want us to do in the election of 
November. Vote against this bill. Vote for the Democratic alternative. 
Let us do better the next time.
  Mr. THOMAS. Mr. Speaker, I yield the remainder of the time to the 
gentleman from Illinois (Mr. Hastert), the leader of the House of 
Representatives, the Speaker of the House, who has decided with his 
leadership that there does not need to be another time.
  Mr. HASTERT. Mr. Speaker, I rise today in support of the Economic 
Growth and Tax Relief Act of 2001. The name of this legislation is 
significant for two reasons. First, this bill promotes economic growth 
by returning money to the private sector, alias the American taxpayer.
  Who among us can say that the economy does not need a little 
encouragement? Consumer confidence is down. Energy prices are up. 
Economic growth is stagnant. The economy needs a boost, and this tax 
relief will provide that boost.
  It will give consumers more money to pay off credit card bills. It 
will give families more resources to pay off high energy bills, and it 
will give parents more money to pay for education expenses.
  It will give the private sector more money so it can grow more.
  Second, this tax bill gives taxpayers some relief also. Mr. Speaker, 
taxpayers need some relief. They need relief from the highest tax 
burden put on taxpayers since the end of the second world war.
  Many of these tax incentives were put on taxpayers to help balance 
the budget. Well, the budget is balanced. In fact, we now have the 
largest tax surplus in our Nation's history. That means the American 
people are paying too much in taxes, giving too much of their money to 
the government and not enough money to their families. Now is the time 
to give taxpayers some relief.
  I have heard criticism on this floor from some of our friends on the 
other side of the aisle and it is based on that we do not have the 
process right. Well, let me say, when we talk about process and we look 
at giving people a retroactive tax cut this year, I remember this 
year's budget, we passed it last year. We set aside 90 percent of that 
surplus, non-Social Security Medicare surplus, 90 percent of it, to pay 
down the debt. We took 10 percent of it to give people a tax break. 
Well, we passed tax relief out of this House and out of the Senate and 
we sent it down to the other end of Pennsylvania avenue, and President 
Clinton vetoed that.
  We have $8 billion set aside in this year's budget to give people a 
retroactive tax break. We ought to do it. It is there. We owe it to the 
American people. It is the right thing to do.
  I have heard that the argument is based on process and not on 
substance. Well, we need to look at substance. I know that many of my 
colleagues really want to be for tax relief, but for political reasons 
they are now opposed to it. Tax relief goes to the heart of what this 
country is all about. There are three things that can be done with a 
surplus. Some of it we need to spend. We are going to spend some money 
on education and defense and the needs of our people across this 
country. We are going to take some of that money, and as of September 
30 of this year we will pay down $600 billion in public debt. We need 
to do that, but we need to take a fraction of that surplus and we need 
to give it back to the American people so that they have it in their 
pocket, so that they can make decisions how they are going to spend 
that money for their families and their future and education and the 
needs of their debt, their credit card debt.
  I do not think we ought to let politics get in the way of taking care 
of the needs of the American people.
  I remember in 1996 standing in this Chamber. In 1996, we were able to 
pass

[[Page H805]]

one of the first tax relief bills in a long time, almost over a decade. 
As we finished the business of the day and we went into special orders, 
I stood over there underneath the balcony and one of my colleagues who 
happened to be from Illinois on the other side of the aisle stood up 
and he was giving a very, very impassioned speech why we should not 
have tax relief for the American people; that we had a lot of 
responsibilities; we need to spend that money.
  He made a statement and said, the American government cannot afford 
to give this money back to the American people. There was a fellow that 
stood right up there in that gallery and he came to the front of the 
gallery and said, ``What do you mean? It is our money.''
  Well, Mr. Speaker, the guards came up and dragged that guy out and we 
never heard from him again; but I will say something, that that 
gentleman was right, it is their money. It is the money of the American 
taxpayers. They deserve some of it back. When we pay too much to Uncle 
Sam, he ought to give some back. Do not let politics get in the way of 
economic growth. Vote for this common sense tax bill. Vote for a 
growing economy and tax relief for the American people.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in opposition of H.R. 3 
which provides for only one amendment of this major piece of 
legislation. The Republican Leadership has simply pushed this 
legislation to the floor with irresponsible tax proposals that will 
exceed $2 trillion. I must oppose this legislation which 
disproportionately and overwhelmingly benefits the wealthiest 
Americans.
  Mr. Speaker, these tax cuts would go to one percent of taxpayers with 
the highest incomes--a group whose incomes have soared in recent years 
and have risen much more rapidly than the incomes of the rest of the 
population--and would exceed the new resources proposed for all other 
national priorities combined.
  The bill reduces federal revenues by $958.2 billion over 10 years, 
and represents the first installment of President Bush's proposed $1.62 
trillion tax cut plan, accounting for 60 percent of the total cost of 
the president's proposal. If enacted, Mr. Speaker, it would effect the 
first reduction in federal income tax rates since 1981.
  H.R. 3 reduces and restructures federal income tax rates by 
consolidating, over a period ending in 2006, the five current rates of 
15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent into 
four rates--10 percent, 15 percent, 25 percent and 33 percent. The net 
effect of these changes, however, would have a number of adverse 
consequences for Americans.
  For example, a third to one-half of children in many states live in 
families that would not receive any tax reduction from the President's 
tax proposal, according to a new analysis from the Center on Budget and 
Policy Priorities. In 12 states plus the District of Columbia, at least 
40 percent of children live in such families. The analysis uses Census 
Bureau data to estimate, on a state-by-state basis, the number of 
families' whose incomes are too low for them to owe federal income 
taxes. The large majority of these families, however, work and pay 
payroll taxes and other taxes unaffected by President Bush's proposal. 
H.R. 3 reduces only income taxes and taxes on large estates.
  This legislation simply is inadequate because substantial numbers of 
children in every state would not benefit from the President's plan. 
Some states would have especially high numbers of unaffected children. 
These states include my state of Texas (2.3 million children 
unaffected), California (3.7 million), New York (1.9 million), and 
Florida (1.2 million). In each of another eight states--Arizona, 
Georgia, Illinois, Michigan, North Carolina, Ohio, Pennsylvania, and 
Tennessee--families with at least half a million children would gain 
nothing from H.R. 3, the proposed tax plan.
  Nationwide, an estimated 12.2 million low--and moderate income 
families with children--31.5 percent of all families with children--
would not receive any tax reduction from the Bush proposal. This 
funding is consistent with independent analyses conducted by the 
researchers from the Brookings Institution, the Urban Institute, and 
the Institute on Taxation and Economic Policy. The vast majority of the 
excluded families include workers.
  The tax plan under consideration would squander all of the funds 
necessary for critical investments in the future. We cannot afford to 
forgo a surplus that needs to be used for education, prescription 
drugs, and ensuring the solvency of Social Security and Medicare.
  For these reasons, I look forward to supporting the Democratic 
Substitute that provides immediate and fair tax relief for middle 
income families and is also fiscally responsible. A new 12 percent tax 
bracket would be created, thereby giving an across-the board rate cut 
for all Americans--but one which will overwhelmingly benefit middle 
income taxpayers.
  The tax plan numbers contained in H.R. 3 just do not add up, and the 
surplus estimates that have been used are completely unreliable. 
Accordingly, I want to urge my colleagues to oppose H.R. 3 and support 
the Democratic Substitute that will be offered.
  Mr. HONDA. Mr. Speaker, the Majority today is shortchanging middle 
and lower income families by giving $688 billion to the wealthiest 1 
percent of Americans. Imagine if we gave $688 billion to the poorest 
individuals in our nation? Why does this budget seem any less extreme? 
Our budget surplus is money that belongs to the American people. Let us 
also remember that the deficits and damage that will be caused by this 
plan will belong to all of us as well.
  Budgets are about choices. American families make these important 
choices everyday as they plan for the future. On behalf of the American 
people I urge my colleagues to think about our budget as families think 
about theirs--as if the lives of your children depended upon it. 
Imagine if you had not saved for your retirement, that you owed money 
on your credit cards and you could not afford health insurance and then 
you came into some extra money that could pay off most of these 
obligations. Would you spend the money on a new sports car or secure 
your family's future by living up to your obligations? Fiscal 
discipline and common sense tell us that we must take care of these 
important obligations to secure the future of this great nation--we 
have no greater obligation to the families of the United States of 
America. For their sake, I urge all of you not to buy the sports car by 
voting for the majority plan and instead meet your obligations by 
voting for the prudent and balanced alternative.
  The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution 
83, the previous question is ordered on the bill, as amended, and on 
the amendment in the nature of a substitute by the gentleman from New 
York (Mr. Rangel).
  The question is on the amendment in the nature of a substitute by the 
gentleman from New York (Mr. Rangel).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. RANGEL. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The Chair will reduce to a minimum of 5 minutes the period of time 
within which a vote by electronic device, if ordered, will be taken on 
any question incidental to questions on adopting the amendment.
  The vote was taken by electronic device, and there were--yeas 155, 
nays 273, not voting 5, as follows:

                             [Roll No. 42]

                               YEAS--155

     Abercrombie
     Allen
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Berkley
     Berman
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Boswell
     Boucher
     Boyd
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Condit
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Moran (VA)
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Scott
     Sherman
     Slaughter
     Smith (WA)
     Solis
     Spratt
     Stark
     Strickland
     Tierney
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Watt (NC)

[[Page H806]]


     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NAYS--273

     Aderholt
     Akin
     Andrews
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bentsen
     Bereuter
     Berry
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Borski
     Brady (PA)
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Clyburn
     Coble
     Collins
     Combest
     Conyers
     Cooksey
     Costello
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doggett
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Fattah
     Ferguson
     Flake
     Fletcher
     Foley
     Ford
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jackson (IL)
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lee
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCrery
     McDermott
     McHugh
     McInnis
     McKeon
     Meeks (NY)
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moore
     Moran (KS)
     Morella
     Murtha
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pastor
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanchez
     Sandlin
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Schiff
     Schrock
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Simmons
     Simpson
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tiberi
     Toomey
     Towns
     Traficant
     Upton
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--5

     Ackerman
     Lewis (CA)
     Shows
     Skelton
     Stupak

                              {time}  1707

  Messrs. MILLER of Florida, SIMMONS, TIBERI, NUSSLE, SERRANO, MEEKS of 
New York, and CONYERS changed their vote from ``yea'' to ``nay.''
  Ms. ROYBAL-ALLARD and Mr. ORTIZ changed their vote from ``nay'' to 
``yea.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.


               Motion to Reconsider Offered by Mr. Berry

  Mr. BERRY. Mr. Speaker, I move to reconsider the vote whereby the 
amendment in the nature of a substitute was rejected.


                 Motion to Table Offered by Mr. Thomas

  Mr. THOMAS. Mr. Speaker, I move to lay the motion to reconsider on 
the table.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the motion 
to table offered by the gentleman from California (Mr. Thomas).
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BERRY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 228, 
nays 197, not voting 8, as follows:

                             [Roll No. 43]

                               YEAS--228

     Aderholt
     Akin
     Bachus
     Baker
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Moore
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--197

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Mollohan
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Sisisky
     Slaughter
     Smith (WA)
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

[[Page H807]]



                             NOT VOTING--8

     Ackerman
     Armey
     Ballenger
     Lewis (CA)
     Sessions
     Shows
     Skelton
     Stupak

                              {time}  1716

  So the motion to table was agreed to.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the 
engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered By Mr. Stenholm

  Mr. STENHOLM. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore (Mr. LaHood). Is the gentleman opposed to the 
bill?
  Mr. STENHOLM. I most certainly am in its current form, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Stenholm moves to recommit the bill H.R. 3 to the 
     Committee on Ways and Means with instructions not to report 
     the same back to the House before April 15, 2001 (the date 
     set forth in section 300 of the Congressional Budget Act of 
     1974 as the date that Congress completes action on the 
     concurrent resolution on the budget) unless Congress has 
     completed action on the concurrent resolution on the budget 
     for fiscal year 2002 before that date.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Stenholm) is recognized for 5 minutes on his motion to 
recommit.
  Mr. STENHOLM. Mr. Speaker, this motion to recommit is very 
straightforward. It simply requires that we do what the law requires us 
to do, what any family or small business has to do, put in place a 
budget before we make decisions that will affect our Nation's finances 
for the next decade and beyond.
  This debate is not about whether we should cut taxes. Everyone in 
this body agrees that the American people deserve tax relief. The Blue 
Dogs have repeatedly called for the largest tax cut we can afford that 
fits within the context of a fiscally responsible long-term budget 
framework.
  Within an honest and responsible budget, we can eliminate the 
marriage penalty, provide estate tax relief for small businesses, 
family farmers and ranchers, and provide tax relief for every family 
across the Nation.
  I wanted to provide tax relief through cuts in income taxes, but I 
also want to provide for cuts in our taxes for our children and 
grandchildren by eliminating the debt burden we have placed on them and 
leaving them with Social Security and Medicare programs that are 
financially sound.
  But the folks I represent at home told me that their top priority for 
the surplus is paying down our national debt and strengthening Social 
Security and Medicare. They understand that the best tax cut we can 
give them is lower interest rates on their credit cards, car loans and 
mortgages by paying down the debt.
  Last week, the President came to this very Chamber and spoke to us 
about his plans for our Nation's budget. I found myself in substantial 
agreement with most of what he had to say. I support many of the goals 
he outlined in his speech, including debt reduction, strengthening 
Social Security and Medicare, and tax relief for all Americans. I 
particularly appreciated his call for cooperation and civility.
  Those of us in the Blue Dog Coalition have expressed our desire to 
work with the President, and we have given him our pledge to be honest 
brokers in dealing with the issues before this Nation.
  I deeply regret that this bill is being rushed to a vote under a 
process that contradicts the spirit of bipartisanship that the 
President spoke about so eloquently last week.
  Many of us spent many years working extremely hard in and casting 
many tough votes to eliminate the deficit and put us in the position to 
pay down the debt. I for one do not wish to squander the opportunity 
and return to the era when deficit spending placed a tremendous drag on 
our economy and ran up 5 trillion 700 billion dollars of national debt 
that is still with us today.
  The budget blueprint the President submitted last week is the first 
step of the budget process. Now, those of us who were elected to 
represent our constituents in Congress have a responsibility and an 
obligation to thoroughly examine the details of the President's budget 
and have a full debate on the overall priorities as part of the regular 
congressional budget process before we vote on any individual elements 
of the plan.
  The President's plan is an important voice in this process, but it is 
not the only voice. There are a lot of questions about how the 
priorities the President identified in his budget will add up without 
borrowing from the Social Security and Medicare Trust funds.
  Likewise, many questions have been raised about what his budget means 
for other priorities, such as debt reduction, protecting Social 
Security and Medicare and deal with the needs in the areas of defense, 
education, health care prescription drugs, agriculture, and energy 
policy.
  Some of us are concerned about enacting a tax cut based on projected 
surpluses, especially since over 70 percent of the projected surpluses 
will not even materialize until 2007 and beyond.
  USA Today reported that the President's budget would slow down the 
path of debt reduction by almost $600 billion over the next several 
years.
  Our insistence that Congress act on a budget resolution before voting 
on tax or spending legislation is not an argument about process or 
arcane budget rules; rather, it is about acting responsibly to balance 
priorities important to our constituents. Before we enact a tax cut, 
the American people deserve to know what the tax cut means for other 
priorities that are important to them.
  I was one of the Democrats who supported President Reagan in 1981 
when Congress passed a large tax cut before agreeing on the spending 
cuts to pay for the tax cut. The result was $4 trillion in national 
debt increase and increased spending of $600 billion in the 1980s alone 
on interest.
  We cannot afford to repeat the mistake of rushing to cut taxes before 
considering how they will fit within a fiscally responsible budget. I 
lived through that experience where we allowed ourselves to believe 
words that sounded too good to be true. It pains me to think that we 
have learned nothing from our mistakes.
  No family would make a major financial decision such as buying a new 
home without first sitting down and working out a budget to figure out 
whether they will be able to afford the mortgage and still meet 
household expenses and leave flexibility to deal with family 
emergencies in the future. We owe it to our constituents to follow that 
common sense approach to the Nation's budget by agreeing on a budget.
  Mr. Speaker, Americans have become cynical of government because they 
are tired of politicians telling them one thing and doing another. By 
putting a budget in place first, Congress can ensure that it maintains 
fiscal discipline.
  The SPEAKER pro tempore. Is the gentleman from California (Mr. 
Thomas) opposed to the motion to recommit?
  Mr. THOMAS. I am, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
is recognized for 5 minutes in opposition to the motion to recommit.
  Mr. THOMAS. Mr. Speaker, as is the tradition on major pieces of 
legislation, we had the minority leader close on H.R. 3, and we had the 
Speaker be the final speaker. I hope Members were listening to what 
both the minority leader and the Speaker had to say. One of the phrases 
that struck my ear from the minority leader was as far as taxes are 
concerned, it appears that it is going to be my way or the highway.
  Mr. Speaker, one of the difficulties we have with that is that when 
you look at this motion to recommit, it really seems that the line 
ought to be as far as permanent rate reduction is concerned, no way.
  Let us look at the motion to recommit. It says that we have to send 
it back to committee and wait until the budget for fiscal year 2002 is 
completed.
  Now I know that my colleagues on the other side of the aisle had 
trouble with a 7-page bill. It is 7 pages. But actually you only had to 
get to page 2. You only had to get to page 2. Look at line 17 on page 
2, what does it say. On page 2, line 17 as far as rate reductions, it 
says, ``In case of taxable years beginning after December 31, 2000.'' 
Let us

[[Page H808]]

see. If it is after December 31, 2000, that means 2001.
  What you heard the Speaker of the House say in the well is that we 
are currently in fiscal year 2001. If you are concerned about paying 
down the debt, then God bless you if you voted for the budget in 2001, 
because by the end of this fiscal year we will have paid down an 
additional $650 billion on the debt.
  If you are so worried about the Medicare lockbox and the Social 
Security lockbox, if you voted for the 2001 budget, you voted for the 
Medicare lockbox, and you voted for the Social Security lockbox. So 
guess what, if you want permanent rate reduction now, all you have to 
do is vote down this motion to recommit.
  Vote H.R. 3. We have a budget in place. It is called this year's 
budget because if Members ever looked at the bill, it would have told 
them it starts now if they vote yes. Vote down the motion to recommit. 
Reduce taxes now, vote yes.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. STENHOLM. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to a minimum of 5 minutes the period of time within which a 
vote by electronic device, if ordered, will be taken on the question of 
passage.
  The vote was taken by electronic device, and there were--ayes 204, 
noes 221, not voting 8, as follows:

                             [Roll No. 44]

                               AYES--204

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Sisisky
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--221

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cooksey
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--8

     Ackerman
     Ballenger
     Bishop
     Kaptur
     Lewis (CA)
     Shows
     Skelton
     Stupak

                              {time}  1746

  Mr. LATHAM changed his vote from ``aye'' to ``no.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the passage 
of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. THOMAS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 230, 
nays 198, not voting 5, as follows:

                             [Roll No. 45]

                               YEAS--230

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Bishop
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Clement
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McIntyre
     McKeon
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley

[[Page H809]]


     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Scarborough
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--198

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Sisisky
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--5

     Ackerman
     Ballenger
     Shows
     Skelton
     Stupak

                              {time}  1754

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________