[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.
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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
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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
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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.
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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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