[Congressional Record Volume 147, Number 157 (Wednesday, November 14, 2001)]
[House]
[Pages H8168-H8174]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     ECONOMIC STIMULUS FOR AMERICA

  The SPEAKER pro tempore (Mr. Osborne). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Texas (Mr. Armey) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. ARMEY. Mr. Speaker, I want to appreciate you presiding over the 
body, the Chamber, today.
  Mr. Speaker, I was tempted to ask unanimous consent that the body 
agree with me that Oklahoma be number one, but I would not want to put 
you in a position of having to object from the chair.
  The SPEAKER pro tempore. Without objection.
  Mr. ARMEY. The Speaker is a gentleman for sure.
  Mr. Speaker, I am here today with some of my colleagues to talk about 
a serious subject, but let me begin by paying my respects to this great 
country. America is such a great country. We Americans are such 
hardworking people. We go to work, take care of our families, look 
after things in our community, we work hard, pay our bills, pay our 
taxes. Beyond that, maybe we save a little bit of something for our old 
age or our children's education or any number of dreams we might have.
  We go to the private capital markets and put that savings where it 
will be safe and where it will grow and hope that those sacrifices we 
make today will give us a better day. And all of that activity that we 
do in what one of my favorite economists, Alfred Marshall, called the 
ordinary business of life, all that we do has resulted in this great 
land building the greatest economy in the history of the world. The 
wonders of product from which Americans consume daily and routinely are 
just magnificent and frankly the envy of the world.
  But every economic system, every economy, every great Nation at a 
time can find a period of economic distress. We have a whole body of 
economic thought, financial analysis, study, by which we respond to a 
very simple question: If the economy falls on hard times and if in that 
period of time people are losing their jobs, production falls, 
investment falls off, the energy seems to be sapped from the economy, 
what by way of government policy can be done?
  There are basically two areas by which we can respond to this. It is 
called countercyclical monetary and fiscal policy. We can respond by 
monetary policy to try to expand the money supply and encourage growth 
for the economy. In that, Chairman Greenspan and the Federal Reserve 
Board have been more than thorough in their efforts along that line. We 
have brought, through their efforts, interest rates down to as low a 
level as possible. We in the Congress of the United States need to turn 
our eyes toward the Federal Reserve Board and say, ``Thank you, ladies 
and gentlemen, you have done so much, and we appreciate your effort.'' 
And at the same time we need to recognize that more can be done and in 
particular that more that can be done must come from us.
  For reasons that are not altogether clear to everyone, the American 
economy began to downturn sometime last year. I remember the downturn 
became clearly evident to us, to the point that now Vice President Dick 
Cheney as a candidate for that office spoke about it during that 
campaign season. I can remember how he was berated by his opposition 
for, as they said, talking down the economy, an unfortunate reaction in 
that while we had to have somebody who would say, ``Hey, there is 
serious trouble on the waters and we need to be ready to respond to 
it,'' we really did not as a Nation need others to say, ``Hush up, 
let's not recognize our problems.''
  So we went forward with that. And as the new administration took 
office, it took office with an understanding of this economic distress 
and a resolve to do something about it. And, of course, the 
President acted swiftly. I am proud to say this body worked hand in 
hand with the President as we passed earlier this year the one thing 
that we might do, that we could do, that we should have done and that 
we did do to stimulate the performance of the economy, which was to cut 
taxes. That tax reduction that we did in June of this past year has 
already showed up in the lives of most Americans. We have seen it by 
adjustments in our withholding taxes at work, we have seen it by the 
rebate of overtaxes from last year. And that may have been all that we 
needed to move this economy back to a good growth cycle where the jobs 
could have been not only sustained but in fact expanded.

  Then on September 11, with that horrible, heinous act that was 
perpetrated in this country by international terrorists and the Nation 
took a blow, one that broke your heart in so many ways, most of which 
we have responded to and most of the correction for which is well under 
way today as we see by events in Afghanistan, we committed this Nation 
to wiping out international terrorism, and this Nation is doing the 
job. Is it not marvelous, Mr. Speaker, the extent to which the 
Congress, from both sides of the aisle, cooperate with the President in 
this very important job of ridding the world of these villainous 
characters that would perpetrate such horrible acts?
  But another part of the blow that we took on that day was a blow to 
our economy, and that blow to that economy really sent us to some 
extent back. Make no mistake about it, the American economy is still 
the strongest economy in the world and we are still doing well, but it 
is not performing as it can be, as it should be, and people are losing 
their jobs. They look to us to do something about it. The President of 
the United States has, after mobilizing all the resources, asking for 
and receiving as much as $100 billion of new spending for these 
critical defense and security needs the Nation has, turned his 
attention to what else we could do and asked for us to give a pro-
growth, job-creating tax reduction to the American people. We studied 
on that, the White House studied on that, others in town studied on 
that, and there developed a, I might say, scholarly consensus that if 
in fact you were going to use reduction in taxes to stimulate the 
performance of the economy, put us back on a growth path and, indeed, 
in the final analysis create jobs so that your neighbors can go back to 
work, your sons and daughters can graduate next spring and find those 
jobs that you have been hoping for, that we would have to concentrate 
our efforts on the investment side of the tax ledger.
  Chairman Greenspan in one meeting that I attended said it, I thought 
so perfectly, when he said, every dollar's worth of tax money left in 
the hands of the American people for investment purposes will leverage 
to higher rates of growth than dollars left in consumer hands. And so, 
at the President's request, the House of Representatives created a tax 
bill that focused on investment, growth and jobs.
  Let me talk about a few of the things in that tax bill that are being 
frankly misunderstood and publicly maligned. One of the other points 
that was made by Chairman Greenspan is that we ought to take all the 
good ideas on tax reduction and line them up and do what is known in 
the discipline of economics and finance as a cost-benefit analysis to 
see which of these will give you the most growth result as a 
consequence of their implementation. That was done. And there was a 
consensus that again was articulated before us by the Chairman when he 
said, the first most necessary thing that we must do is put an end to 
the alternative minimum tax as applied to corporations.
  Why is that so important? First, we should understand that the 
alternative

[[Page H8169]]

minimum tax says to a corporation, if you are having a bad year, sales 
are off, revenues are down, you don't have earnings but indeed have 
losses and would thereby under the normal Tax Code of this land be 
exempt of any tax liability, we are going to bring in a special 
punitive tax so that we can extract revenue from you even though you 
have no earnings from which to pay those revenues.
  This is an insane tax. This is a kick-them-while-they-are-down tax. 
This is a tax that says take away whatever they might have to perhaps 
get back on their feet as a business fallen on hard times and give it 
over to the government. Take away what you might have to put some of 
your employees back to work and give it over to the government. And he 
is so right. We must get rid of that. And in doing so, we have been 
advised by virtually everyone, rebate to these firms those liabilities 
they have already existing under this insane tax so that they in fact 
can recoup among themselves from the revenues they have acquired 
through their own sales because of the productive effort of their 
employees who had the good fortune of having a job in the good times so 
that they may have the revenues with which to actually make the 
investments that would put people back to work.
  This is being maligned in the discourse over tax policy in America 
today by the uninitiated and economically naive as some kind of a tax 
break for big corporations. Well, corporations do not pay taxes; people 
pay taxes. And the people that pay those taxes are the people who own 
the corporations. And the people who own the corporations are many 
times those same workers that had enough good fortune to have something 
called an IRA, a Keogh plan, a 401(k), some precious little area of 
savings where they had a chance to hold something of value in their 
lives and the owners of the corporation.
  And so those people that work hard, save their money, put it in 
whatever instrument they think is safe for their retirement years, get 
this special punitive tax and have that money taken away. We in the 
House understood the good common sense of leaving resources in the 
hands of investors and avoiding the practice in current law of kicking 
people while they are down and we put a repeal of the AMT in our bill.
  Another piece of advice we got from so many quarters was, let people 
expense some portion of their new inventory for some period of time. 
Why is that important? We are living in a high tech society. The 
driving engine indeed not only of the American economy but of the world 
economy is all of this modern computerized electronics. And it is 
exciting. There is a discovery, an invention a day. I always say every 
time there is another college dropout, there is a new electronic wonder 
coming before us. That means rapid obsolescence because the innovation, 
the creation, the invention is going on so fast. That means that if you 
are going to invest in these new wonders of productivity that make it 
possible for us to work smarter instead of harder and get more output 
per unit of input and keep more people working at higher wages, you 
have to be able to write some of that off early so that you have the 
time to recover them. And so we put that in, 30 percent tax write-off 
in the first year, as an incentive for people to invest in the wonders 
of American genius as invented and innovated in the world of work.
  Then we took a lesson that was taught to us, I thought, at least 
taught to me as a young economics student back in 1962 and 1963 by 
President John F. Kennedy, who is not one of our guys, he is one of 
their guys, speaking in partisan terms for just that very slight 
moment, Mr. Speaker, who said if you cut the tax rate that applies to 
people out there working, they have a desire to work harder. That is 
not a new notion. That notion was first taught to me in 1958 by Mike 
Berg, the chairman on the construction crew on which I worked when he 
said, ``We're not going to work overtime because the tax rate on my 
overtime is so high it's not worth my while to do it.''

                              {time}  1530

  It was worth my while to work overtime, because I was not making as 
much money as Mike and the marginal rate was lower on me and I got to 
keep more on what I got to earn. But the lesson was very clear, 
ingrained in my 18-year-old mind by the foreman of a construction crew 
that did not even have the benefit of a high school degree, that if in 
fact you tax people more for an extra hour's work, they are less 
willing to do that hour's work. And nobody in Washington got it, except 
John F. Kennedy, and all the professors in America applauded him for 
teaching it to them.
  So the lesson has been around a long time. So we did accelerate the 
reduction in the marginal tax rate that applies to individuals, so Mike 
Berg would work overtime, bless his heart, and the rest of us on the 
crew could do the same. That would be good, because we would work 
harder, we would work longer, we would earn more, we would spend more, 
and, as we spent more, somebody else would have a new job because they 
had to replace an inventory, and that is called economic growth.
  Now, these are some of the ideas that are just plain common sense, 
watching the world in which you live each and every day of your life 
work the way you work in it, and having enough sense seeing what is 
going on around you, that are being disparaged by some of the people in 
this debate.
  The House passed a good growth tax bill. It will put people back to 
work. In fact, the analysis tells us it will put as many as 170,000 
Americans back to work in its first year alone. That is not enough, but 
it is something.
  Now, the other body, Mr. Speaker, has decided that they know better 
than the President of the United States, they know better than the 
House of Representatives, they know better than John F. Kennedy, they 
know better, even indeed, than Mike Berg, bless his heart. They said 
no, we do not want to cut people's taxes. We do not want to do anything 
for people who are greedy, because people who want to keep their own 
money that they earn are greedy, especially if they are people that 
also saved for a large part of their life, bought stocks and made 
investments so they could be part owners in corporations. They are 
greedy. The other body, of course, being a righteous place, has no time 
for such folks as that.
  So, what did they do instead? They say let us put a bill together 
where instead of letting people keep their own money and take care of 
their own business for themselves, we will keep their money and spend 
it on those people that we perceive to be needy, not greedy.
  This little old graph we have here with all these cute icons here, 
which were generated, by the way, by Windows, shows you some of the 
people that they felt needed these special government programs. Apple 
producers, apricot producers, asparagus producers, producers of bell 
peppers. You have a special provision for business on meat. I do not 
know how PETA feels about that, but they are taking care of killing the 
Buffalo. Blueberries, cabbage, cantaloupe, cauliflower, cherries, corn, 
cucumbers, egg plants, flowers. Investment bankers, they have a bucket 
in there that says a special program for the unemployed should now be 
made available for investment bankers, bless their heart. Movie makers, 
onions, potatoes, strawberries, tuna fish. Charlie the tuna gets a 
spending program under the other body's bill. Tomatoes, peas and pears.
  I want to do a little bit of fundamental calculation here and say 
that blueberries, cabbage, cantaloupe and cauliflower do not add up to 
growth in jobs. They add up to special government spending programs to 
take that money that is earned by people who are making a living and 
give it over to other people. It will not stimulate the economy.
  They say well, spending will stimulate the economy. Let me remind 
you, we have already appropriated since the 11th of September $100 
billion of new government spending. That spending is for anti-terrorism 
and a lot of things, and it is important.
  What we need to do is one simple thing: Do we have the decency to 
respect the productive economic work genius of the American people and 
say to the American people, let us leave in your hands more of the 
money that you earned, so that you can rebuild your economy that 
supports us in Washington so well? That is the only decent question 
that can be asked in this circumstance.
  Not only is it a matter of decency, it is a matter of what will work. 
What

[[Page H8170]]

will work. Do we want to put people back to work in America, or do we 
want to give people a greater opportunity to be more dependent upon the 
Federal Government? That is what this debate is about, and we should 
make no mistake about it.
  I have got to tell you, Mr. Speaker, I love America. I even, on most 
occasions, like our government. But my momma did not raise me to be 
dependent upon the Federal Government. She raised me to get a job, go 
to work, pay my taxes, take care of my family, save some of my money to 
help build a business that enables somebody else to go to work, so by 
their productive efforts sometime in the future I can enjoy my 
retirement from the savings I have. That is who we are in this country. 
We are not a nation of people who believes they are supported by the 
government. We are a nation of people who know that it is by our 
sacrifice that we support the government.

  One of the areas in which we could do that, and should have done so 
even in the House and will do so in a more complete way someplace in 
the future, is to put a permanent end to this awful injustice called 
the death tax. We have with us today, Mr. Speaker, a champion of 
justice in this regard, the gentlewoman from Washington (Ms. Dunn), who 
believes that if you work hard all your life and you build something of 
value to your life's work and you come to the end of your days, you 
ought to be able to leave that to your children instead of the 
government. Bless her heart.
  Furthermore, in the practical side of things, she understands that if 
you are free to leave the fruit of your life's labor to your children, 
rather than the government, you are going to work harder, produce a 
little more, build a bigger business and create greater job 
opportunities for a lot of people. She is the champion of this.
  I see we have the gentlewoman from Washington (Ms. Dunn) here. If the 
gentlewoman would like to contribute to this discourse, we would 
certainly like to hear from her on this.
  I yield to the gentlewoman from Washington.
  Ms. DUNN. Mr. Speaker, I thank the Majority Leader very much. I want 
to thank the Majority Leader, the gentleman from Texas (Mr. Armey), for 
organizing this public explanation of the stimulus package. I think it 
is terribly important that we get the message out to people all over 
the country that there is a difference, and it should not be surprising 
that there is a difference in the way this body and the Republicans 
versus the Senate and their Democrats approach stimulating the economy.
  If you look at it very carefully and you review the approach, as the 
gentleman from Texas has done, it is very clear the debate we are 
having today is a debate about private sector growth versus growth in 
government spending. That is what this really is about.
  I think the House bill is a very balanced bill. I think it is a 
responsible bill. It is a bill that is balanced between assistance for 
people who are out there earning in the job market and business tax 
cuts that will generate economic growth, and do that through creating 
new jobs or keeping jobs that are currently in the economy and are 
currently threatened by our lagging economy.
  The business tax cuts have been demonized, as the gentleman from 
Texas said, by the opposition. They have been called giveaways to 
wealthy corporations. In reality, the expensing and depreciation 
provisions actually give companies a greater incentive to invest, and 
we believe that private investment is the linchpin for economic growth. 
That is why we have focused our time and attention on this and 
developed a plan that produces some very, very serious incentives for 
investment.
  The corporate AMT repeal has drawn a whole lot of criticism from our 
opponents. It actually rids our Tax Code of a very unnecessary-now 
layer of taxation that ties up needed cash. In 1987, roughly 15,000 
companies paid the AMT, or the Alternative Minimum Tax. Fifteen years 
later, 30,000 companies are caught up in this very complicated tax 
regime.
  The exemptions which earlier provided an incentive for corporations 
not to pay taxes to avoid paying regular income taxes now are gone, and 
there is no reason to keep this AMT, because it just forces a company 
to calculate taxes in two different ways. It takes their time, it takes 
their money, it takes their manpower that they should be focusing on 
other things that will make their companies successful. That is why the 
nonpartisan Joint Committee on Taxation has identified the repeal of 
the corporate AMT as a way to make the Tax Code more equitable and more 
efficient and, of course, simpler.
  Worst of all, as the economy continues to slow down, companies will 
be caught up in this very complicated calculation, and that is the last 
thing that we should be doing today, especially for small businesses 
and especially during a potential recession period. We should not be 
punishing our companies with complicated, expensive, unnecessary 
paperwork.
  The House bill also directs personal tax relief to hard-working, 
middle-class Americans. We have reduced the 28 percent tax rate to 25 
percent immediately, immediately, and that means that a family with 
$55,000 in earnings could save several hundred dollars in taxes every 
year from now on. This is money that can be used to pay for clothes or 
buy braces for children or make a car payment or buy a new washer or 
dryer or buy children's tennis shoes to prepare for school in the fall. 
In my own home State of Washington, 660,000 taxpayers will benefit from 
this reduction in the marginal rate from 28 percent to 25 percent.

  A further huge simplification of the Tax Code takes place through the 
reduction in the capital gains tax, eliminating that 5 year holding 
period that has complicated the Tax Code down to a holding period of 1 
year. It allows almost everybody to be able to pay capital gains at the 
rate of 18 percent. It is 2 percent, but it is a lot of dollars if you 
are thinking about selling your house. I think it will unlock assets 
that might have been held before to wait for a lower capital gains. 
This bill includes that.
  The House bill also addresses the needs of unemployed workers. In my 
part of the Nation, this is terribly important. We are losing up to 
30,000 jobs at the Boeing Corporation alone. Another 900 at the 
Nordstrom Corporation. We know that these people want to work, and we 
know that their most pressing needs are in the short-term. So our bill, 
very much unlike the Senate bill, does not create another health care 
entitlement program, but it directs dollars in the form of block grants 
to the governors of the states all over the Nation, and eventually to 
the workers themselves, the flexibility to face their specific needs. 
So they can cover those health care premiums and they can cover the 
retraining that is necessary if somebody has lost a job.
  Washington State, wracked by recent layoffs, will receive about $256 
million out of this grant that will aid unemployed workers through 
retraining programs and health care coverage.
  In comparison, the Senate bill is a road map to bigger government. 
The Senate bill is a road map to greater spending. We have already 
spent since September 11 $100 billion to increase spending and to give 
help to New York City and to other parts of our Nation. We know that is 
very important. The Senate bill is more spending, and we do not need 
additional spending.
  What will providing tax exempt bonds for Amtrak do to benefit our 
economy in the short-term, which is the goal of this stimulus package? 
What about the host of emergency agricultural subsidies? The narrow tax 
benefits that are aimed at bison ranchers and citrus growers, they are 
not what the President had in mind when he outlined his approach to the 
stimulus.
  The Senate bill's greatest failure is it really does, when you get 
down to the bottom line, leave out the average taxpayer. There is not 
one single American income tax payer that will receive a benefit from 
the Senate bill. That is terribly important. It is just the contrary of 
what we try to do in our immediate stimulus by putting dollars back 
into the pockets of the folks who earned these dollars.
  Compare this to the House bill. For example, simply from that 
reduction in the 28 percent tax rate to 25 percent, 25 million 
Americans will be immediately benefited by a decrease in their 
withholding taxes.
  By any objective measure, Mr. Speaker, the House bill will stimulate

[[Page H8171]]

growth in the private sector. I do hope that the Senate will realize 
that the best way to increase consumer spending is to put more money in 
the pockets of working Americans, not into new government programs.

                              {time}  1545

  I hope that we can bring to conference two strong bills so that the 
result will stimulate this lagging economy and stimulate it immediately 
to help all Americans help us get back on our feet.
  Mr. ARMEY. Mr. Speaker, I think one of the points that the 
gentlewoman from Washington made that we ought to really focus on is 
that in the House-passed bill, we accelerate to this moment a reduction 
in taxes from 28 to 25 percent for those hard-working, middle-income 
Americans who pay those taxes. And in that bill passed by the other 
body, there is not one penny's worth of tax reduction to anyone who 
pays income taxes in America. Quite frankly, that misses the mark of 
fairness and it misses the mark of inspiration or encouragement to more 
work. I thank the gentlewoman.
  We also have with us today another member of the committee; the 
Committee on Ways and Means is obviously very proud of their work 
because we have them well represented here. Mr. Speaker, I yield to the 
gentleman from Florida (Mr. Foley), one of the really effective people 
on that committee that has worked so hard on this tax bill, and I 
believe the gentleman from Florida too is very pleased with what we 
have done and what might come of the House bill for job opportunities 
in America.
  Mr. FOLEY. Mr. Speaker, let me thank the majority leader for his 
comments and for his bringing us together to discuss this important 
bill on the floor. I asked the gentleman's staff whether I would get 3 
credit hours for the wind-up there, because I think it is important. I 
want to let everyone know I did not graduate from college. I started a 
little family business when I was 20 years old. I was in my second year 
of community college. I started a small restaurant and then pursued my 
entrepreneurial dreams of having my own business.
  It is interesting when this bill is being described, and obviously, 
some on the other side of the aisle, some in the other Chamber, zero in 
on one or two issues and they try and create this impression that the 
bill that is passed by the House Committee on Ways and Means and then 
adopted by the floor is exclusively about one simple provision. If we 
can obfuscate the truth and create dust or clutter or create an element 
of doubt in the mind of the taxpayer or the person reading the 
newspaper, then maybe we have been successful in distorting the fine 
product that is before us today.
  I do not think one needs a degree from college to understand what it 
is like in the real world earning money, for providing for family, 
paying bills on time, and it certainly does not take an economic genius 
to realize people are hurting now and the economy is suffering. It was 
suffering before September 11, it became more dramatic after September 
11.
  I do not understand about the other side of the aisle's argument, and 
I think it largely was the reason that a certain gentleman from 
Tennessee failed to make it to the White House, is that they actually 
punish people under their approach for success.
  Now, follow me, if you will. The other side of the aisle spends a lot 
of time on education. We need good education. We need to give more 
money for education. And then when you are educated and successful, 
they then turn the argument around and say, but excuse me, we are going 
to raise your taxes. We are going to take more money from you. We are 
going to crimp your lifestyle by taking money out of your wallet and 
transferring it to some program that we deem important, we, the 
potentate, the Federal Government, telling you how to use your money, 
you all do not get a say in it. We just take it from you and deploy it.
  Now, when they are criticizing the bill, I do not hear them speaking 
of important issues that were important to the gentleman from New York 
(Mr. Rangel) like the work opportunity tax credit, the welfare to work 
tax credit. Hardly sounds like tax cuts for the rich. We work on 
domestic energy sources, including wind production, biomass, things 
that will stimulate and remove our dependency on foreign oil. They do 
not talk about that. They do not talk about qualified zone academy 
bonds. They did not talk about a number of the things that are in this 
bill that provide real stimulus.
  We talk about capital gains. Yes, capital gains to some sound like a 
buzzword for rich people. Forty-eight percent of the American public is 
now investing in equities. Maybe something as simple as buying your 
first share of stock or maybe adding to your portfolio to secure a more 
meaningful retirement. But by allowing you under your bill to keep more 
of your money and manage your resources more wisely, we create the 
economic stimulus for the economy to weather this rather difficult 
period.
  Now, we can bay at the moon and we can single out corporations; in 
fact, let me raise this other point that I think is important, because 
there was some conversation about tax benefits to corporations, and I 
think the gentleman from Texas (Mr. Armey) raised the point 
very brilliantly. But where are the people from Detroit, the Members of 
Congress? Because the people that are apparently benefiting under this 
bill, those corporations that employ a large number of workers in 
America, Ford and GM and some of the names they mentioned in hysteria, 
they were here defending them in other debates on energy consumption, 
on SUV vehicles; they were saying, if we did this provision we would 
hurt Detroit. They are not here on the aisle or talking or conversing 
with us or trying to pass this bill that may help the workers at Ford, 
not the corporate chieftains at Ford but the workers.

  So I commend this bill and I thank the majority leader for giving us 
the chance to verbalize and to suggest to the other side, rather than 
focusing your ill intentions on one specific provision of the bill, 
read the bill. Read the benefits. Look at the constituents who will 
benefit.
  I draw that one more suggestion, that if you look at work opportunity 
tax credits, welfare to work tax credits, these do not seem like 
unusual proposals. These seem like hard-hitting proposals that help 
average Americans who are struggling today. This bill accomplishes it.
  Mr. Speaker, I commend the gentleman for bringing us together, and I 
look forward to other debates from Members of Congress.
  Mr. ARMEY. Mr. Speaker, I thank the gentleman from Florida for his 
remarks. Let me make an observation based on his concluding remarks. 
These are not unusual, strange, or new proposals. These are exactly the 
proposals that were applauded across this land in 1962 when first 
proposed by then President John F. Kennedy. They worked in 1962. The 
only thing that was different is by 1962, we had never enacted anything 
in our Tax Code that was as inane as the alternative minimum tax. So if 
we want to look at it this way, we can say this is trying to get us 
where Kennedy got us to in 1962, and I have to say, looking at some of 
the leaders in the other body, I do not understand what their beef was 
that they were applauding in 1962.
  We now have, Mr. Speaker, one of my favorite Texans, the gentleman 
from Texas (Mr. Sessions), my neighbor, a distinguished member of the 
Committee on Rules, a hard-working, saving sort of fellow who 
understands what it is like to meet a payroll from the working end. I 
appreciate the opportunity to yield some time to the gentleman from 
Texas (Mr. Sessions).
  Mr. SESSIONS. Mr. Speaker, I appreciate the gentleman yielding, my 
friend, the majority leader, who just a matter of a few years ago was 
Professor or Dr. Dick Armey, the Professor of Economics at North Texas 
University in Denton.
  Mr. Speaker, what we are talking about here is a stimulation package, 
a stimulus package that would give the American people back more of 
their hard-earned money, and what has been talked about here today is 
the Democrat plan versus the Republican plan. The plan that our 
colleagues on the other side of the aisle have presented is one whereby 
this government would spend more money on pork. The gentleman had the 
pork that was on the board.
  Our plan, as Republicans, is really quite simple. What we want to do 
is we

[[Page H8172]]

want to, instead of having the government spend money to stimulate the 
economy, we would like to give people back, taxpayers, their hard-
earned money.
  Today I would like to spend just a few minutes to show the 
differences in a comparison of what the two bills do when we talk about 
giving more take-home pay to the American public, the people who get up 
and go to work every single day, as I did when I was in the private 
sector for 16 years, and never missed a day of work. I loved it. I love 
serving this body, and I try and give the same vigor and vitality to 
this body, just like many hard-working people in their jobs give to 
their companies so that they can take care of their families.

  Our Economic Security and Recovery Act is known as H.R. 3090. If we 
look at H.R. 3090, it will increase by an average of $708 the 
disposable income of a family each year over the next 4 years as 
compared to $176 by the competing plan offered by the Democrats. That 
is $708 more take-home pay on average for a family of 4 compared to 
$176.
  Secondly, a recent survey showed that 90 percent of consumers have 
delayed making major purchases. They have quit buying things as a 
result of the economic circumstance that we have here. What we are 
going to do is put more dollars in people's hands where they can have 
not only the ability to make this decision to buy more, but that they 
can get it done quickly. We are not going to wait. We are going to give 
it to the American public now.
  The number of Americans claiming unemployment insurance benefits rose 
to an 18-year high of almost 3.7 million, which is an increase over the 
previous year of $1.5 million. While the Democrats focus really solely 
on the unemployment benefits, we as Republicans want to ensure that 
they get their jobs back. This is about job creation and job growth. 
H.R. 3090, as has been predicted, would produce twice the number of 
jobs that the Senate proposal would do. Also, we want to make sure that 
we make it easier for investment, people to invest in this country, 
which will produce jobs. H.R. 3090 will increase investment by $9.5 
billion each year as compared to just $1.2 billion each year under the 
Senate plan.
  But we sometimes have to dig deeper. We have to look at the facts of 
the case, and the facts of the case that produce this money back to 
people comes from us offering a rebate to people. The people who got 
the $300 checks this year represented a lot of Americans and they 
needed that money, but there were a lot of Americans that only got $150 
rather than the $300. The Republican plan, the economic stimulus plan 
gives money back to the middle class workers of this country, and that 
is going to provide $13 billion over 10 years where people will get 
this money back.
  Secondly, we are going to reduce the tax burden on people, on 
Americans who get up and go to work every day. We are going to change 
those in the 28 percent tax bracket today to effective immediately this 
tax year, to the 25 percent tax bracket. One might say, boy, you are 
helping out some middle class people, yes, but how much money? $53.6 
billion over 10 years. That is what Republicans are trying to do. We 
are trying to take this package and instead of having government 
spending to stimulate the economy, we are trying to make sure that 
people who work for a living have more take-home pay, to where they can 
make decisions about how they want their money spent, how they can make 
decisions about the things that are important to them and their 
families and give them back the power.
  The fact of the matter is this: money equals power. And if you have 
the money, you have the power. In this instance, one party wants the 
money in Washington so they have the power, and in the same 
circumstance, another party, the Republican Party, wants to give money 
back to people, because we believe the middle class of this country, 
the people who work for the money, deserve to get it back.
  I applaud the gentleman from Texas, our majority leader (Mr. Armey), 
not only for being the catalyst of today's presentation, but him 
embodying the things which I believe in of what this economic stimulus 
package is about.

                              {time}  1600

  I am proud to call him my friend, and I am very pleased to 
participate today. I want to thank the majority leader for the time.
  Mr. ARMEY. I thank the gentleman from Texas.
  Mr. Speaker, I should point out that the tax provisions for 
individuals described by the gentleman from Texas, when found in the 
House bill, represent some portion of or virtually 100 percent of the 
bill that goes to tax reduction incentives for growth through 
consumption and investment.
  The tax provisions he cited in the other body's bill represent only 
30 percent of the total package, and 70 percent of the total package go 
on spending programs, programs we are talking about here.
  We are really blessed, Mr. Speaker, to have somebody from the great 
State of Nebraska here, most notably the gentleman from Omaha, Nebraska 
(Mr. Terry), because Omaha is one of the great meat processing centers 
of this great Nation.
  I am guessing that perhaps, Mr. Speaker, the gentleman from Omaha can 
help us wrestle with one of the detailed questions in the other body's 
proposal. They have a special proposal for buffalo meat, processing, 
growing, and slaughtering buffalo.
  There is also on the Great Plains of America a special hybrid animal 
called a beefalo, which is a crossbreed between a cow and a buffalo. 
The question we are asking, and where we are puzzled in terms of the 
fine-tuning of this other body's package, is if we give a subsidy for 
buffalo meat, do we only give, then, half a subsidy for beefalo meat?
  These are the kinds of details that have to be worked out when we are 
trying to spread the pork around. We have to make sure that we cover 
the buffalo and beefalo, and do so equitably. We have to work and help 
that. So I am very proud to have the gentleman from Omaha here to help 
me wrestle with these detailed questions that are left unanswered by 
the other body.
  Mr. Speaker, I yield to the gentleman from Nebraska (Mr. Terry).
  Mr. TERRY. Mr. Speaker, I do appreciate that, I say to the majority 
leader and recovering professor of economics from north Texas. The 
great majority leader teases me about my past as a lawyer.
  But not only are there such complications as the beefalo, and whether 
or not those that raise the mixed breeds of buffalo and cattle would be 
entitled to a 50 percent subsidy, but considering that the Colorado 
Buffalos are the next team on our schedule and standing in our way of a 
national championship, I doubt there would be any Nebraskans that would 
tolerate congressional support of buffalos to any degree.
  Mr. ARMEY. I have no doubt that the Speaker would agree with the 
gentleman, Mr. Speaker.
  Mr. TERRY. Yes, Mr. Speaker. But this is a very serious matter, even 
though we jest about such silly things in the Senate bill, and how 
their philosophy is to focus on these individual pork projects, as 
opposed to the stimulus package we have laid out for the people of 
America.
  Shortly before we voted on this stimulus package in the House, Mr. 
Speaker, and shortly before our mail was stopped by anthrax threats, I 
received a letter from a mother in Omaha. As the father of three young 
boys, when I get letters from young mothers, they are particularly 
touching, but this one even more so, because she talked about how her 
husband, the breadwinner of this family, the one who puts the food on 
the table for her children in their small household, had just been laid 
off. It was really a heart-wrenching story.
  Frankly, Omaha is better off. Our unemployment rate has gone up 
significantly, but it is better than most communities around the 
Nation. Yet, this is still very real about people losing their jobs. At 
this point in time we read almost weekly reports of consumer confidence 
being way off, manufacturing and trade sales are weakest. We got some 
good news with the auto industry because of some zero percent financing 
in attempts to sell new cars.
  I really believe that this is the time, now is the time for us in 
Congress to not be timid but to do what it takes to stimulate the 
economy, because we are talking about people's jobs. We must stand 
resolute, I say to the gentleman

[[Page H8173]]

from Texas (Mr. Armey), the majority leader, and all of my colleagues 
here in Congress, and to focus our stimulus package on job creation and 
retention of those jobs. It is called capital investments.
  It is not trying to find a specific industry from one's particular 
area that we want to just help out, or because somebody we know raises 
buffalo. We have to think much broader and deeper than that.
  One of the things that I am proud about our stimulus package is that 
it creates 160,000 jobs over the next year, and as much as 220,000 jobs 
by 2004. So at a time when we are receiving letters from mothers 
worried about the loss of their bread, we are passing a 
stimulus package that can create and retain jobs. I am rather proud of 
that. The average family of four could see an increase in their take-
home pay, what they use to put that bread and butter on the table, of 
about $940.

  As the gentleman has said and as the gentleman from Texas (Mr. 
Sessions) has said, the rapid reduction of the 28 percent income tax 
rate to 25 percent, and making that so it is good now, that reduction 
now, that is huge for those individual filers. That is money in their 
pockets. That is real.
  I want to talk particularly, in the few minutes left that I have 
here, about two tax matters in particular that I think are important to 
stimulating the economy and reversing the economic trend.
  The first is to encourage increased productivity through the release 
of assets by reducing capital gains taxes. I really strongly believe 
that this should be a key pillar component of our stimulus package, and 
it is not. As I understand, that has been stripped out of the Senate 
version.
  Now, hopefully there can be enough economists in this world who can 
stimulate them to put it back in, but it is just absurd to me that that 
has been stripped out.
  Capital gains tax relief, as the gentleman mentioned in his speech, 
encourages the investment that will, I believe, revitalize American 
businesses.
  According to the congressional Joint Economic Committee, and I want 
to read this so I get it straight for the Record here, and the Joint 
Economic Committee is bipartisan, nonbipartisan, it says, ``A capital 
gains tax reduction would help promote economic growth, benefit 
taxpayers across the income spectrum, and mitigate the unfair effects 
of taxing inflation-generated gains.''
  Savings and investment drive the companies that drive the job market. 
American business will use the injection of additional investment 
capital from a reduction in capital gains to create business 
opportunities, to streamline their businesses and become more effective 
and powerful, to continue the research and development efforts, and, 
again, to improve productivity. With the expansion that increased 
investment creates, companies can increase their capacities to produce. 
That means more jobs. That means more jobs.
  It just baffles me how people cannot grasp that simple thing. I am 
not on the Committee on Ways and Means or a tax professor or economic 
professor, but that is just a simple premise of business, as the 
gentleman from Florida (Mr. Foley) had pointed out.
  I hear the arguments, and again it just bothers me, that we are 
giving to the rich and we should be paying off the debt, or that it 
could destabilize the stock market, which are really bogus arguments, 
when we think them through.
  First of all, that it could destabilize the market, we are 
transferring one asset: There is a buyer, there is a seller. How that 
is destabilizing is beyond me when it is just a simple transfer of 
assets. Yet, when we think about a change of ownership in capital, what 
occurs? A taxable event. The gentlewoman from Washington pointed this 
out, and it is just an important thing that we need to not lose sight 
of.
  There are a lot of businesses, there are a lot of individuals, that 
are holding onto their assets right now, Mr. Majority leader, because 
they do not want to sell because of the punitive current nature of our 
capital gains tax. They expect and want a capital gains reduction, and 
they are waiting for Congress to act.
  There will be a swirl of activity when we reduce that. But until we 
reduce it and create that swirl, they are going to continue to hold on. 
What we need to tell people, and somehow inform the press, is that when 
there is that swirl of activity, we have a taxable event and actually 
increase the dollars that can come out. It is a win-win situation, and 
the people that hold those assets win because their assets are worth 
more because we are not taking more of their money, but yet it creates 
the event.
  Would the gentleman expand on that, as an economics professor?
  Mr. ARMEY. I want to thank the gentleman, Mr. Speaker. Actually, the 
great insight was given on this by a famous economist named Frederic 
Bastiat 200 years ago when he made the point that the poor man makes 
his living off the rich man's assets, particularly his capital assets.
  The gentleman from Nebraska (Mr. Terry) I think at this point perhaps 
might want to agree with me that we should bring in the distinguished 
gentleman from Wisconsin (Mr. Ryan), who is looking at my board of 
icons here and seeing nothing for cheese, and is being somewhat 
disgruntled with the other body for leaving cheese off.
  If I may say very quickly before I yield to the gentleman from 
Wisconsin, as I said, these icons were all generated by Windows 98, one 
of the great softwares in America.
  We could not find an icon to represent chicken manure, but I did not 
want to let the hour pass without making the point that we should not 
be disappointed in our colleagues on the other side of the building. 
There are in fact special provisions for, get this, processing chicken 
manure as a way to generate electricity, as their idea of how to 
resolve our current energy crisis. They are comprehensive in their 
folly, and we should not leave anything out, nor fail to comment.

  So not making an association between his favorite football team and 
chicken manure, I would love to yield to the gentleman from Wisconsin 
(Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Speaker, I, on behalf of the Green Bay 
Packers, will not take offense at that. I thank the majority leader, 
and unfortunately, I can understand we cannot be perfect in yielding.
  I think there is an interesting comment that was in an editorial 
recently quoting an old Forest Gump line. That comment is, ``Stimulus 
is as stimulus does. It is not a stimulus package if it does not 
stimulate the economy.''
  We can take a look at the two different approaches that are being 
taken right now, because we now see what the Senate has to offer. I am 
pleased that they have an alternative in place. That is important. For 
this place to work, we have to get ideas on the table, we have to push 
legislation, and then we have to get them through and onto the 
President's desk.
  But we have two different ideas here. In the Senate, we have an idea. 
It is an old idea, an idea that has been around a long, long time ago. 
Some call it Keynesian economics. I think we have a lot of new converts 
to that school of thought.
  Their idea is to spend more money: spending, spending to try and get 
our economy back on its feet. But I would argue, Mr. Majority leader 
and Mr. Speaker, that spending more money is not going to fix our 
economy. If we thought that spending more money on top of the two plus 
trillion budget today would get us out of recession, it would have 
already worked, because right now we are spending more than we ever 
have in the history of the Federal Government. We are spending more in 
the Federal Government than the rate of inflation, about two to three 
times the rate of inflation. We have already spent over $100 billion in 
emergency spending since the beginning of the year, and in the wake of 
this terrorist tragedy.
  So spending more money here in Washington, artificially keeping taxes 
high, is not the answer. But when we look at the recessions of the 
past, when we take a look at all of the jobs that have been lost, we 
look at what has worked and what has not worked, that is what we did in 
the House side.
  When we look at the past when we cut taxes on capital, when we made 
it easier to invest in America and invest in jobs, when we lowered the 
tax on risk, the tax on capital, guess what: We

[[Page H8174]]

had more investment and we had more jobs.
  There are not a lot of things that Congress really can do to grow the 
economy. We have the Federal Reserve and monetary policy, we have the 
Congress and fiscal policy. There is one thing that we can get wrong 
and there is one thing that we can get right.
  The thing that we can get wrong is that we can spend, spend, spend 
and raise that baseline of spending, and dig ourselves deeper into debt 
for the future, so that we send our children and their grandchildren an 
even larger bill in the form of greater debt.
  But the one thing that we can get right in fiscal policy here in 
Congress is that we can look at who creates jobs in this country, how 
jobs are created, and what can we do to make it easier to create jobs. 
When we look at that, we see that there are a lot of taxes that are 
levied on capital, a lot of taxes that are levied on investment.
  When we look at this recession, like other recessions it started with 
a big drop in investment, a 72 percent decline in venture capital. 
Venture capital a year ago was about $35 billion. Today it is $8 
billion. That is the seed corn that starts every small business.
  When we see the small businesses dying on the vine all over the 
place, small businesses closing their doors, huge layoffs at our 
largest employers across the country, we see a huge decline in 
investment in those companies, in those businesses.
  The one thing that we can control is we can make investment cheaper, 
we can make risk-taking less risky, by reducing the price on those 
investments, the price on risk. That means reducing the tax on those 
things by making it easier through the Tax Code, by lowering the bias 
against saving, the bias against investment, by making it easier for 
businesses to reinvest in their corporations, by making it easier for 
the market to take risks, to take capital risks, to invest in new 
ideas.
  That way we can create jobs. Every time we have cut the capital gains 
tax, every time we have accelerated depreciation, every time we have 
cut marginal income tax rates across-the-board in this last century, 
every time we have done that we have created more jobs. We have 
improved the growth of the economy.

                              {time}  1615

  And we duly increased revenue coming into the Federal Government in 
those sources. So we see that there is a big difference here. On the 
one side we are focused on one thing and one thing only, jobs; getting 
people back to work, making sure that they are working.
  On the other body's side, they want to spend more money here in 
Washington, and that is the difference. And the problem with that kind 
of thinking is, the problem with the idea that we need to have more 
rebates and more spending is that we are going to get consumers to all 
of the sudden spend more money. Consumers are not going to spend more 
money if they do not have jobs, if they are losing more jobs.
  So I think what we have to be in the House is really admirable. We 
need to build on this; and we have to learn the lessons of the past, 
and, that is, simply spending more money in Washington is not going to 
get people back to work. But making it easier for Americans, for small, 
medium and large businesses to invest in their people, in their 
companies, making it easier to create jobs, that is what we can do. And 
we can help here in Congress to make it easier to create jobs. That is 
what we are trying to do.
  Mr. Speaker, I thank the majority leader.
  Mr. ARMEY. Mr. Speaker, if I could make a couple of concluding 
observations. First of all, I want to thank everybody participating.
  Mr. Speaker, the difference between the two propositions that are 
advanced in the House, already passed the House and that which they are 
working in the Senate, in the other body they are saying, let us show 
you what we can do for our friends with your money. What the House said 
was, let us see what you can do for yourselves if you keep your money.
  I think we have addressed America in the appropriate way. And finally 
it is said, Mr. Speaker, that a recession is when your neighbor is out 
of a job. A depression is when you are out of a job. Well, everyone in 
this legislative body on both sides of the building have neighbors out 
of jobs. We are the only ones of their neighbors that they can say, if 
you do your job right, I am get my job back. They have a right to 
expect that of us. And we have an obligation to understand, if we do 
our job wrong and they do not get their job back, we will have a 
depression.

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