[Congressional Record Volume 148, Number 110 (Wednesday, September 4, 2002)]
[House]
[Pages H6022-H6028]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EDUCATION SAVINGS AND SCHOOL EXCELLENCE PERMANENCE ACT OF 2002
Mr. HULSHOF. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5203) to provide that the education savings incentives of
the Economic Growth and Tax Relief Reconciliation Act of 2001 shall be
permanent, and for other purposes, as amended.
The Clerk read as follows:
H.R. 5203
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Education Savings and School
Excellence Permanence Act of 2002''.
SEC. 2. EDUCATION SAVINGS INCENTIVES MADE PERMANENT.
Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by adding at the end
the following new subsection:
``(c) Exception.--Subsections (a) and (b) shall not apply
to the provisions of, and amendments made by, title IV.''.
SEC. 3. TAX-FREE EXPENDITURES FROM EDUCATION SAVINGS ACCOUNTS
FOR QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION EXPENSES AT HOME SCHOOLS.
(a) In General.--Clause (i) of section 530(b)(4)(A) of the
Internal Revenue Code of 1986 (defining qualified elementary
and secondary education expenses) is amended by striking ``or
religious'' and inserting ``religious, or home''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2002.
SEC. 4. CLARIFICATION RELATING TO EXCEPTION FROM ADDITIONAL
TAX ON CERTAIN DISTRIBUTIONS FROM QUALIFIED
TUITION PROGRAMS, ETC. ON ACCOUNT OF ATTENDANCE
AT MILITARY ACADEMY.
(a) In General.--Subparagraph (B) of section 530(d)(4) of
the Internal Revenue Code of 1986 (relating to exceptions
from additional tax for distributions not used for
educational purposes) is amended by striking ``or'' at the
end of clause (iii), by redesignating clause (iv) as clause
(v), and by inserting after clause (iii) the following new
clause:
``(iv) made on account of the attendance of the account
holder at the United States Military Academy, the United
States Naval Academy, the United States Air Force Academy,
the United States Coast Guard Academy, or the United States
Merchant Marine Academy, to the extent that the amount of the
payment or distribution does not exceed the costs of advanced
education (as defined in section 2005(a)(3) of title 10,
United States Code, as in effect on the date of the enactment
of this clause) attributable to such attendance, or''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2002.
SEC. 5. PROTECTION OF SOCIAL SECURITY AND MEDICARE.
The amounts transferred to any trust fund under the Social
Security Act shall be determined as if this Act had not been
enacted.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Hulshof) and the gentleman from Washington (Mr.
McDermott) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri (Mr. Hulshof).
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, it is back-to-school time. Indeed, as I look at the
clock above the Speaker's chair, in about 2 hours when we call for
votes, this Chamber will fill with our colleagues; and there will be
some of the same giddiness as kids going back to school. And the
inevitable question we ask one
[[Page H6023]]
another is what did you do on your summer break?
Certainly I think as we prepare for some very solemn events later
this week as well as next week and certainly recognizing the impact of
a year ago, I think a lot of attention has caused us to really forget
some of the important education initiatives that have passed and become
law. Specifically, this Congress began last year with a renewed
commitment to education. ``Leave no child behind'' has become a
familiar mantra. In fact that landmark legislation of leaving no child
behind is now the law of the land and really starts with the mindset
that a child, any child, can learn.
As President Bush stated, indeed as Governor of the State of Texas,
``The Federal Government must be humble enough to stay out of the day-
to-day operation of local schools, wise enough to give State and local
school districts more authority and freedom, and strong enough to
require results. We must make our schools worthy of all of our
children. Whatever their background, their cause is our cause. It must
not be lost.''
Thereupon we came together in a very bipartisan way and passed that
landmark legislation. But Congress did not stop there. Last summer in
the Economic Growth and Tax Relief Reconciliation Act, there were some
significant tax incentives to improve the affordability of education,
not just higher education but kindergarten through elementary school,
through secondary, essentially schoolchildren of all ages that would be
able to take advantage of through their parents or other mentors or
family members, opportunities of savings vehicles and incentives
through the Tax Code.
Yet, Mr. Speaker, as you know and as this body knows, a year ago when
we enacted the Economic Growth and Tax Relief Reconciliation Act,
because of some very technical, arcane procedural rules in the other
body, there was a sunset provision placed upon those tax incentives
relating to education. What this bill today, H.R. 5203, attempts to do
is to make permanent those positive savings vehicles, those tax
incentives that would help all parents across the country really focus
on their children's education.
Certainly, as we debated this a year ago, the idea is a simple one.
No child should be discriminated against because of the choice of where
he or she goes to school. Public schools, private schools, religious
schools, home schools, any child should have the advantage of these tax
incentives through parents or other mentors as far as educational
expenses.
We cannot in Congress, of course, set tuition rates. We cannot set
student fees. In my hometown of Columbia, Missouri, as college students
are coming back, they are lamenting the fact that they are facing an 8
percent tuition hike this year. There is nothing that not only this
legislative body but other State legislatures can do as far as the
rising cost of tuition. However, we have acted as far as making college
education and other educational expenses more affordable, education
more accessible. It is time to make those provisions in the Tax Code
permanent, those tax relief measures. This body has acted making the
entire Economic Tax Reconciliation Act of 2001 permanent. We have also
acted as a body to make those pension opportunities permanent, the
marriage penalty repeal permanent as well as the death tax repeal. We
believe it is time for Congress to make a renewed commitment to make
permanent the education tax incentives. Accordingly, I ask that H.R.
5203 be adopted.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may
consume.
It is nice to be back here on the first day of school to witness the
27th act of the Republican budget follies of 2001-2002. The gentleman
from Missouri talks very openly about the No Child Must Be Left Behind
bill, and we all clapped and patted ourselves on the back. It
authorized an increase in the budget of 15 percent for children and
education. But then there was the budget, the real honest-to-God
budget. That was 2.8 percent. Promising 15 percent and then giving them
2.8, right? And meanwhile come down here and shovel more money out the
back door in tax breaks.
You call it arcane reasoning. Well, we did not want to break the
budget. That is why you did not make it permanent in the first place.
If you had passed this thing in perpetuity, you would have broken the
budget, and it never would have passed the Senate. That is why you put
that sunset clause in.
But the fascinating thing is that the Bush budget that says it cares
about education in the public schools cuts 50 programs, including
civics and art and history education. It cuts school counselors and
technology for teachers. That is in the public schools. We do not want
to fund the public schools. We just want to figure out how to give
everybody a voucher, forever. We are going to boost the amount from
$500 a year to $2,000; and we are going to add that everybody now is
permanent. Higher education, high school, middle school, elementary
school, home school, everybody can take their money and go outside the
public school system. Yet 90 percent of the kids in this country go to
the public schools. So why is our focus not on putting money in the
public schools?
Even more interesting and the reason I started with this talk about
the budget, 2 years ago, a little less than 2 years ago, we came out
here and we said we have $5.6 trillion in surplus. And we could do
anything. We can give enormous tax breaks. We can do all these things.
But even the Republicans now have to admit that their own Congressional
Budget Office says that this year we are going to be $157 billion in
debt, in deficit. That is counting all the Social Security money. All
that money, all that talk about lockboxes and we are going to protect
Social Security. I can remember listening to hundreds of speeches from
the other side that would be saying today, ``You're raiding the Social
Security money.'' But suddenly we do not hear any of that. We have the
Congressional Budget Office say we are only going to be $157 billion in
debt. They do not point out that the biggest chunk of that is money
coming from Social Security.
Maybe next year it is going to get better. That would be right,
right? Well, it is only going to be $145 billion in deficit. Yet you
want to come out here and pass a bill that puts another $5 billion out
in perpetuity. You do not know what is happening in the stock market.
Everybody tells me it is getting better. The economy is coming back. It
is not coming back in the Northwest. We have got the highest
unemployment we have had in 15 years. So when people are saying, Oh,
well, let's give all these permanent tax breaks because it's coming
back, where is the proof of that? Who believes the Secretary of the
Treasury? We do not have a serious financial leader in this executive
branch. Nobody that the world believes. They go out and make speeches
and the market drops. So explain to me how you can continue to give
money away permanently.
The funny thing about this, of course, is it does not take effect for
8 years, right? Put it in today, people will forget about it; but it
will bite out there someplace down the road. It is a very clever
strategy. Put in the idea with the sunset, come back a year later and
say, well, we are only extending what we did last year. That is
deceptive. We are in financial difficulties in this country. We should
not be passing this kind of legislation at this point when we have not
done the education budget. We have not even done any of that yet for
the public schools, and you want to give people money to go to the
private schools.
Mr. CONYERS. Mr. Speaker, will the gentleman yield?
Mr. McDERMOTT. I yield to the gentleman from Michigan.
Mr. CONYERS. I thank the gentleman for yielding. I am impressed that
this measure is coming up at this point in time. Is there some reason
that we keep going over this? Has this subject been before the House of
Representatives before?
Mr. McDERMOTT. My impression is that we have done this at least twice
before. And the Senate always rejects it, because the emphasis should
be on public schools.
Mr. CONYERS. I want to thank the gentleman for his comments. I want
you to know that I think there will be more people here thinking about
the
[[Page H6024]]
wisdom of H.R. 5203 when it comes up for a vote today.
Mr. McDERMOTT. I hope they will all vote against it.
Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, I am pleased to yield 5 minutes to the
gentleman from Texas (Mr. Sam Johnson), another valued member of the
Committee on Ways and Means.
(Mr. SAM JOHNSON of Texas asked and was given permission to revise
and extend his remarks.)
{time} 1645
Mr. SAM JOHNSON of Texas. Mr. Speaker, I did not know we were going
to come in here and try to get into a political debate. As I recall
from the Committee on Education and the Workforce, we did not do any
cutting; we consolidated.
I do not think we have taken one red cent out of the Social Security
trust fund, and we do not intend to. I think that it is important for
the people to know that they can count on the future, that they can put
their money into a savings account and count on it to be there for
their kids to go to school, if that is what they desire to use it for.
Mr. Speaker, it is an honor for me to be here today to solve a
problem brought to my attention by a constituent. Great ideas do not
always start from inside the Beltway or from pundits or strategists.
They come from good Americans back home, like my friends Paul and
Jeanette Miesse of Plano. Their son, Kyle, attends Jasper High School
where he is in the tenth grade and participates in ROTC. Kyle is
considering applying to the Naval Academy. I want to help them make
that a reality.
Kyle's dad researched the 529 Education Savings Account. As you know,
529 savings plans, run by the States, allow parents and others to put
money aside for college to grow tax free, and, as long as the money is
spent on education, the money is spent tax free. These tax incentives
are an important way to encourage savings for higher education.
Current law provides penalty-free refunds from 529 plans for certain
situations, such as when the student receives a scholarship. The
problem with this is the definition of the word ``scholarship.'' It
excludes appointments to the United States service academies, such as
West Point, Annapolis, or my favorite, the Air Force Academy. Under the
Tax Code, these appointments are considered commissions in the military
and so are different from scholarships.
Hard-working students and athletes across America are rewarded with
scholarships to colleges and universities. Congress recognized the hard
work of these young people when we permitted their parents to receive
penalty-free rebates of their contributions to 529 plans. In addition
to academic and athletic scholarships, the IRS and Treasury have told
us if a student earns an ROTC scholarship, their plan can make penalty-
free rebates. It is only the United States military academy students
who are not eligible for this benefit.
Serving this country is a noble profession. Congress ought to
encourage, not discourage, young people to join our armed forces,
especially today, and the clarification we are making today will ensure
that all students who attend our United States military academies get
the same treatment under 529 plans as their peers.
Given that each Congressman is eligible to make appointments to the
United States service academies, I think all of us in Congress have a
direct interest in making sure we solve the problem. On average I
nominate about 40 students from the Third District of Texas to the
service academies.
I think when hard-working, patriotic young Americans are rewarded
with an appointment to a service academy, we should not turn around and
impose a 10 percent penalty on their parents who saved for their
children's education. We should provide the same penalty-free
withdrawals for the plebe, the middy and the cadet as we provide to
those who play sports, earn an academic scholarship or pay for school
through ROTC.
Again, I want to thank my constituents, Paul, Jeanette and Kyle
Miesse of Plano, who brought this issue to my attention.
To my knowledge, at no time during the consideration of this
legislation did we consider the issue of appointments to the service
academies. I believe the omission was simply an oversight, and I
encourage the passage of this bill that will permanently extend the
education tax breaks included in the tax law we enacted last year.
I do not see how anybody can vote against helping parents send their
kids to school and help make it permanent. I want to thank the chairman
for including in this bill that clarification. It is people like this
in our own districts that make a difference.
Mr. McDERMOTT. Mr. Speaker, I yield 3 minutes to the gentlewoman from
California (Ms. Woolsey).
(Ms. WOOLSEY asked and was given permission to revise and extend her
remarks.)
Ms. WOOLSEY. Mr. Speaker, H.R. 2503 has one fatal flaw, and it must
keep every Member of this Congress and in this body, every Member that
supports public education, from voting for it.
H.R. 5203 takes much-needed Federal funds away from public schools
and gives that money to wealthy families to pay for private schools.
While private schools and religious schools and military schools are an
important part of the education mix in this country, they must not be
funded with Federal dollars.
Yet this is exactly what H.R. 5203 does. It makes the tax breaks for
families who use education savings accounts to pay for private schools
a permanent benefit. Families who can afford to put part of their
income into education savings accounts more often than not are the same
families who can afford to pay for private schools. We must not, we
cannot, and we should not be using precious Federal dollars to
subsidize children who come from wealthy families so that they can go
to private schools and take that money away from our public school
system.
A strong public education system is the only way we can prepare all
of our children for the high wage, high skilled jobs that will ensure
America's place in the world market. A strong public school system is
also how we prevent dependency on welfare here at home.
Public education is the backbone of our country. It is why we are a
great Nation. We cannot afford to give money to private schools when we
do not have the will and we do not have the budget to fully fund our
Nation's public education system.
We cannot invest in private education when we do not meet our Federal
obligation to IDEA, the Individuals With Disabilities Education Act.
But when we do have a budget that truly leaves no child behind, I will
support a measure like this. Until then, vote against H.R. 5203 because
it weakens public education and it must be defeated.
Mr. HULSHOF. Mr. Speaker, I yield myself 90 seconds.
Mr. Speaker, I want to commend the other side for waiting until at
least the second speaker to bring up the mantra ``tax breaks for the
wealthy.'' What I would like to do is refute that comment specifically
from the last speaker.
As this body knows, we have yet to reach the appropriation for public
education. The Labor, Health, Education appropriations bill is yet to
come. That is the funding mechanism for public schools.
I would take issue with my friend from Washington State who declared
that somehow there are cuts in public education. Since 1995, this body
has increased funding for public education by nearly 30 percent, and I
dare say I question how additional funds in public education is
perceived to be a cut.
Specifically, to the point raised by the last speaker, 70 percent of
the tax savings just from education savings accounts go to families
with children in public schools making less than $75,000 a year. Let me
repeat that statement: 70 percent of the benefits of education savings
accounts go to public school children whose parents make a combined
income of less than $75,000. There are 14 million families whose
children benefit from just the education savings account vehicle.
Almost 11 million of those are children who attend public schools.
So I think that clearly the issue of funding of public education is
something this body will consider later in
[[Page H6025]]
the appropriations process, and I certainly take issue with the
comments of the last speaker.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Becerra).
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, in response to my friend and colleague's mention of this
debate, I think we all have to make clear something about this debate
right here and now: It is not those of us on this side of the aisle who
brought this legislation forward, and it is not that we wish to
constantly raise the point that these are tax measures that have tax
cuts, that help principally wealthy individuals. That is the fact of
this measure, that it will cost some $3 billion per year.
But it is as if Congress learned nothing from the Enron, the Global
Crossing, the Arthur Andersen, the WorldCom financial scandals that let
so many fat cats become even fatter, that now we have a bill that would
again benefit the wealthiest Americans at the expense of the majority
of middle-class Americans.
Really, at the end of this, if you take a look at this bill, this is
an attempt to sneak vouchers through the back door for private schools
again, at the expense of the 90 percent of our kids who are attending
public schools.
But the worst part, as you heard the gentlewoman from California
mention beforehand, was that this is fiscally irresponsible. We are
already running a deficit this year, when we were told by the Bush
administration last year we would have a $165 billion surplus for this
year. Yet we are in deficit. Now we want to take $3 billion per year
once this is permanently extended and spend it to help mostly wealthy
families who will take advantage of these tax breaks.
That does not seem right, especially when you think that the
President's own budget called for a cut of all funding for dropout
prevention programs in our schools throughout the Nation, especially
when you consider the fact that the President is unwilling and this
House is unwilling to let us have before this body a debate on school
construction monies so that our school districts throughout the Nation
which are overcrowded could have the money to build the schools for all
our kids, not just those that are wealthy.
Why not do school construction measures like that which is
cosponsored by the gentlewoman from Connecticut (Mrs. Johnson) and the
gentleman from New York (Mr. Rangel) and a number of us that would say
spend less than $1 billion per year to help school districts, leverage
that into $25 billion over the next 10 years to help build schools,
rather than give away $3 billion per year to mostly wealthy Americans.
That is what this debate is about. It is about being fiscally
responsible. All of us want to stand for our kids to have a fund to go
to school. I have two of my three already in school, public school, and
I want to make sure that they have the resources, along with every
child that is in the classroom with them, to do the right thing and
learn the right way. But this will help no one. In fact, it does not
help anyone for the next 10 years.
For those reasons, we should vote against this and do something
meaningful for our children and our schools throughout the Nation. I
urge my colleagues to vote against this measure.
Mr. HULSHOF. Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, certainly we need more incentives to
recruit and retain the best public school teachers possible. The many
who currently are underpaid and overworked need additional incentives.
We need incentives to help our children prepare to achieve their full
potential. Children confronted with schools that are in disrepair or
have inadequate technology and other equipment are deprived of an
educational environment where they can strive and thrive.
As a product myself of the Austin public schools and the father of
two children who are successful graduates of the Austin public schools,
one now a teacher herself in public schools and the other a physician,
I welcome a debate on incentives to improve our schools.
Unfortunately, this is not that debate. This debate has little to do
with public education and everything to do with political theater. We
have soaring deficits as a result of the fiscal mismanagement of this
country.
{time} 1700
And the solution that is offered today is to dig the hole just a
little deeper by providing even more tax breaks to favor those at the
top and adding that to the huge deficits that we already have.
While the President some time ago adopted the slogan of the
Children's Defense Fund: ``Leave no child behind,'' unfortunately, his
budget this year leaves quite a few children behind. He committed to a
15 percent increase in federal education funding to address these very
real needs in our public educational system, and instead he has
proposed less than 3 percent.
We do not need to wait for the appropriations bill to know that the
President's budget leaves too many children behind across this country,
and instead of addressing that today, what is proposed in this bill is
that we make permanent a provision referred to as the ``Coverdell
Savings Account.'' But, in fact, this is not a savings provision, it is
a looting provision. It provides tax breaks equivalent to vouchers for
private schools. That is what this all about, just another way to
voucherize and separate and divide our public education so that we help
a handful of children and we leave all the rest to suffer without the
incentives and the support that we need to genuinely leave no child
behind.
Mr. Speaker, undermining public education undermines America. And in
a democracy where the government is only as good as the people, a
poorly educated populace threatens our way of life. Only an educated,
informed citizenry can hold their leaders accountable, can hold their
Members of Congress accountable, when they offer expensive, election-
year giveaways like this bill to a select few at the expense of
millions of children across this country.
Mr. HULSHOF. Mr. Speaker, I yield myself 1\1/2\ minutes to respond to
the gentleman from Texas.
Under existing law that the President signed last June, here is who
can contribute into a Coverdell education account. By the way, this is
mirrored on the premise of the Roth IRA; that is, that one contributes
monies into a savings account and then the interest that builds up, the
power of compound interest, as Einstein talked about, as that interest
builds up, it is tax-free if used in a Roth IRA, for instance, for
retirement expenses and in the Coverdell account for education
expenses.
Here is who can contribute to an education account: anyone. Parents,
teachers, mentors, small business owners, corporations, charities,
foundations, labor unions, concerned citizens, church groups, anybody
can designate funds to go into an education account for any child.
Now, I would say to the gentleman, in fact, this is new resources,
incentives that would not be committed to education but for the fact
that we put them in the Tax Code and provide this tax incentive. This
year alone, this year alone, 3.5 billion more private dollars are being
allocated specifically to educating our kids just this year.
The other point I would make is simply, everyone keeps talking about
the budget picture. Again, keep in mind that there is absolutely no
budget impact, or a minimal budget impact, making this permanent until
the year 2010 and 2011.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Levin).
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, I would have thought maybe this break for
August would have given the Republican majority here some pause, but
no, I guess they are going to plunge further into this reckless fiscal
irresponsibility. They never answer our statement about what they are
doing to the budget deficit. New facts do not seem to matter. They just
go on as if it does not matter what happened in August,
[[Page H6026]]
or was it September, when the CBO said, oh, the deficit is going to
reach $157 billion, and if Social Security taxes were not counted, we
would be $315 billion into red ink. So what is our colleagues' response
to all of this sea of red ink? Pour more red ink. Make the sea even
more bloody worse, I guess.
But that does not make any sense. They are making something permanent
in the eleventh year, they are doing that now, with this fiscal
situation facing America.
Mr. Speaker, we know it is not going to pass the Senate. It will not
happen. So why are our colleagues attempting this? It is a political
ploy that I guess our colleagues think Americans will not see through.
But it is clear to me that the American public knows red ink when they
see it, and when they see the Republicans dipping into Social Security
taxes, they know they are doing it, and they know that this is another
indication of their playing reckless with the Social Security system of
America. So it is terrible policy to do this in view of the red ink,
and I think it is really bad politics.
So I urge my colleagues to vote ``no'' on this. Whatever the merits
are of the bill, we do not need to add to the red ink today in the
future when we are already drowning in this sea of red ink. It is
hurting this economy. Vote no.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume
to directly respond to the question posed by the gentleman from
Michigan (Mr. Levin).
The amount that H.R. 5203 would add to the budget deficit this year:
zero. The amount that H.R. 5203 would add to the budget deficit of next
year: zero. The amount that H.R. 5203 would add to the budget deficit
in the next 6, 7 years: zero. In fact, I would say to the gentleman, as
he cites the Congressional Budget Office, that when the budget impact
of H.R. 5203 hits in the year 2011 to the tune of $2.3 billion, CBO
projects that we will be back in the black to the tune of $3.2 billion.
Also, in the year 2012, when there is a budget impact from our bill
today of another $3.2 billion, CBO projects another $522 billion of
surplus.
The other point I would like to make, especially to the gentleman
from Michigan, is this: we are trying to make permanent one of the
provisions that he sponsored. H.R. 1438 provides taxpayer assistance,
employer-provided assistance to permanently extend exclusion for the
cost of undergraduate courses and graduate level courses. That is a
bill that was coauthored by the gentleman from Michigan. It happens
that of the $5.5 billion in those outyears, that $2.2 billion of those
$5 billion are making permanent the bill that the gentleman has indeed
introduced here.
Mr. SAM JOHNSON of Texas. Mr. Speaker, will the gentleman yield?
Mr. HULSHOF. I yield to the gentleman from Texas.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I would also like to point out
that the gentleman keeps talking about deficits. I recall when I first
got into this Congress they were huge, and it was a Democrat controlled
Congress at that time.
Right now, I believe we are at war. We are spending money on
defending this United States, the freedoms that we represent and the
freedom all over the world. We are working to put in place a homeland
defense. I will tell my colleagues right now, if it costs money to
protect America and protect our freedoms, I do not think any of us
should stop it.
Mr. HULSHOF. Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan (Mr. Levin).
Mr. LEVIN. Mr. Speaker, the gentleman from Missouri has very much
shaped the issue. I favored those provisions, but within a circle of
fiscal responsibility, and the gentleman is being fiscally
irresponsible. The figures the gentleman read are figures that show how
much the surplus is outside of Social Security taxes. Read that to the
public for year 3, 4, 5, 6, 7, 8, 9 and 10. When we exclude Social
Security, we are in deficit every year with a projected surplus of $4.2
billion only in year 11, and those figures are always off. My
colleagues are playing loosely with Social Security monies.
So whatever the merits of a bill might be, do not just throw Social
Security to the winds like my colleagues are doing it. Why are they
doing it now in terms of 2011? My colleagues think it is good politics.
It is lousy policy and poor politics.
Mr. McDERMOTT. Mr. Speaker, I yield myself the balance of the time.
What is fascinating about this whole thing, as I started out by
saying, it is more of the budget follies. Now my colleagues come out
here and they say, oh, but they are now telling us at CBO that it is
really going to be good in the future. That is what my colleagues said
last year. Last year they said, $5.6 trillion in the bank. We can count
on it. And they spent it all. And they are now in the hole. I do not
know, it is as though they have an addiction. They cannot stop
spending. Yet if they are going to spend, why do they not spend to fix
up the schools of this country? If they care about public education,
why not use that money for fixing up public schools? No. We are going
to give it to people so that they can leave the public school system.
We are going to use the public money so that people can leave it and go
find a better school and somehow their kids are going to do better.
Now, the real myth here is that this helps ordinary people. Ordinary
people living paycheck to paycheck do not have money to put aside in an
educational fund. So we are right away talking about people at the top.
If we look at who is losing their jobs today, it is pretty scary,
whether it is in WorldCom or Enron or any one of the dot-coms or at the
Boeing Company or any of these other places. These people do not have
the kind of money to put into an educational account. This is a tax
break for people at the top who have 5 or 6 grand laying around and
say, well, I can put 2 grand into this educational thing and Charlie
can use it when he goes to college or when he goes to the private
school next year.
My Republican colleagues also defined this so loosely that yes, some
of the money does go to people on the bottom. You can buy driver's
education with it, you can buy Internet access for your kid, you can
buy anything you want; as long as you call it an educational expense,
it can come out of this money. The reason there are surprises in here,
like my friend from Texas says, we never had any hearings. That is why
we do not know what is in the bill.
Mr. HULSHOF. Mr. Speaker, I yield myself the remaining time to close,
as we have no further speakers.
I would say to the gentleman and others, my friends, and I consider
them my friends, many of whom are on the committee, I certainly hope
that this interest in fiscal discipline remains as we really grapple
with these appropriations bills, the challenge that remains ahead of us
over the next weeks.
Mr. Speaker, the idea is that we want to encourage families to put
aside money for their children's education expenses. It was good policy
a year ago. It is not good politics, it is just good policy to help
those children achieve the American dream. Everybody has talked about
their children. My daughter, who is almost 3, one on the way in
December, and as we think of providing the best education possible for
all of our children, is it not prudent to put aside that money at the
earliest possible time, certainly as we see the cost of tuition
continue to go up?
If Congress fails to act, Mr. Speaker, here are the provisions that
we will lose come January 1 of 2011. Instead of the annual contribution
limit to an education account being $2,000 a year, it would revert to
$500. Instead of expanding these education account benefits to all kids
who go to any type of school, we would be simply focused on those of
college education and forgetting about those educational expenses for
special needs kids or educational expenses for those in kindergarten
through elementary school and secondary education.
{time} 1715
My friend, the gentleman from Texas (Mr. Sam Johnson), talked about
section 529 plans. The reason we need to make these tax incentives
permanent is as we invest into a prepaid tuition plan or section 529
plan, the thrust of that is that those withdrawals that we make in
those years that those kids, I say to the gentleman from California
(Mr. Becerra), that are not college age yet, when they reach college
age, if we fail to act, those distributions out of
[[Page H6027]]
those section 529 plans are going to be taxable and not tax-free. That
is certainly a good policy reason why we need to act today to make
these incentives long-term.
Prepaid tuition plans. Again, as the gentleman from Michigan talked
about, he has been a champion of tax-free employer-provided education
assistance, not just for graduate education but for undergraduate
education, again, trying to provide and enlist as many opportunities
for individuals in this country of all ages to better themselves
through more education.
And certainly the student-interest loan deduction, again, if we fail
to act, we will once again put limits on the amount of interest that
can be deducted on those burdensome student loans if we fail to act.
Again, Mr. Speaker, it has been an interesting debate. I would just
simply say that if it was good policy as we debated this and voted on
it as the House and the President signed it into law 1 year ago, it
remains good policy today. We need to provide permanent relief to
families who want to help their children achieve the American dream.
Mr. Kind. Mr. Speaker, I rise today in support of making education
more affordable and accessible to our nation's students. HR 5203,
however, does not actually benefit the majority of students and
families.
Education savings accounts were established in 1997 as a tool for
families to save money over a period of years for their children's
higher education. Congress recognized the growing cost of college and
the increasing difficulty families face trying to pay for college, and
created these accounts to encourage early savings. Last year's tax cut
legislation increased the contribution limit for education savings
accounts from $500 to $2,000 and expanded the definition of qualified
education expenses that can be paid from an education savings accounts
to include elementary and secondary school expenses for public,
private, or religious schools.
While I support making education more affordable, HR 5203 will allow
parents to use these statutorily created education savings accounts--
tax free--for almost ANY aspect they consider relevant to their child's
education, at any school from kindergarten through college.
If parents feel they need a new sport utility vehicle to drive their
kids to school; That is OK.
If they need a new microwave oven to prepare breakfast for their kids
before school; That is OK.
If I want to use these funds, tax free, to pay my older son Johnny to
tutor my younger son Matthew on the ABCs; That is OK.
Mr. Speaker, these examples seem silly for good reason; this bill
does nothing to help families or to teach children. We need to focus
our national attention on helping needy families, fixing ailing public
schools, and leveraging community investment to help parents, teachers
and administrators meet the important educational challenges they face
in serving the vast majority of our children. In addition, we need to
fully fund the No Child Left Behind Act (NCLB) passed last year.
Our Public schools currently serve approximately 90 percent of
students in grades K-12 and face record-breaking enrollments. The NCLB
gave parents the choice to transfer their kids from a failing public
school to non-failing public school. Recent reports show, however, that
very few students are actually able to benefit from this because our
schools cannot accommodate any additional children. We should act
smarter to devote scarce federal dollars to ensure that all our
children receive the education they deserve.
Finally, the bill is fiscally irresponsible. Last year's tax cut bill
halted our progress in reducing the national debt. Virtually all the
projected surpluses that were used to justify last year's bill have now
disappeared. Furthermore, enactment of the bill being considered today
would further increase the budget deficit that already is occurring as
a result of last year's bill.
I hope my colleagues will join me in opposing the underlying bill.
This is not the time to be considering a tax cut that our country
cannot afford when there is no assurance that the money will truly
benefit all families equally.
Mr. NUSSLE. Mr. Speaker, education is the foundation Iowans need to
compete in an ever-changing complicated world. As Iowans have returned
to classrooms for the new school year, we should act to make our
commitment to education access clear.
Last year, the Congress approved and the President signed into law
the Economic Growth and Tax Relief Reconciliation Act of 2001. This
important new law contained significant tax relief to improve the
affordability of education from kindergarten through college.
Unfortunately, due to arcane rules in the Senate, these education
provisions will expire after December 31, 2010. Failing to act would
mean that Americans would lose $5.5 billion in tax relief on New Year's
Day, 2011.
Knowing the importance of providing affordable education for Iowa's
students of all ages, I introduced the Education Affordability Act,
H.R. 5189, in July of this year. My legislation would repeal the sunset
provisions and make permanent provisions eliminating the 60-month limit
on the deductibility of student loan interest payments, increasing
income limits for student loan interest deduction, and providing tax-
free employer-provided education assistance. I am pleased that the
legislation we are considering today incorporates the provisions of my
bill. In addition to the provisions of my legislation, H.R. 5203 would
also make permanent the increase in the annual contribution limit to an
Education Savings Account (ESA); expansion of ESA benefits to qualified
expenses at public, private and religious schools; tax-free withdrawals
from 529 plans for qualified higher education expenses; and pre-paid
tuition programs at private institutions of higher education.
By putting more money into the hands of taxpayers so they can make
their own decisions about education, I believe this legislation helps
Iowans provide their families with the best possible futures.
Mr. STARK. Mr. Speaker, I rise today in opposition to H.R. 5203, the
so-called Education Affordability Act.
This education bill is a cynical, backdoor attempt to create a
voucher program. it drains our public schools of needed resources so
Republicans can give tax breaks to the 10% of families who send their
children to private schools. What about the other 90% of American
families whose kids attend public schools? This bill does nothing to
address their concerns.
We ought to be down here today making sure our public schools have
the resources they need. We ought to be finding ways to fully fund last
year's ``Leave No Child Left Behind'' law.
Our public schools have critical needs that Republicans want to
ignore. We ought to be making funding available for local schools to
hire more quality teachers and reduce class sizes. We ought to be
providing money to modernize our schools and renovate outdated and
unsafe facilities. More than $300 billion is needed for school
construction alone. That $300 billion cannot be met without significant
help from the Federal Government. But, it will be hard to keep students
from attending classes in trailers or dilapidated school buildings if
Republicans pass this bill.
If concern for public schools isn't reason enough to vote down this
legislation, then consider its effect on our budget. Today's bill takes
the fiscally irresponsible step of making part of last year's trillion-
dollar tax cut permanent. This will only balloon our rapidly expanding
budget deficit.
We ought to be more sensible. We ought to stand up for real
priorities and the qualify of public schools. I urge my colleagues to
take a stand for public education and vote no on H.R. 5203.
Mr. ETHERIDGE. Mr. Speaker, I rise today in opposition to H.R. 5203,
the latest in a long series of Republican bills to provide vouchers for
private schools at the expense of our public schools. Specifically,
this bill would make permanent the so-called Coverdell ESA tax breaks
in last year's disastrous tax bill.
As the former Superintendent of my state's public schools, I have
been proud to lead many successful efforts here in the U.S. House to
defeat private school vouchers. I am particularly proud that in my
freshman term in this office, I took to the floor to defeat then-
Republican Speaker Newt Gingrich on his private school voucher bill. I
can assure my colleagues that I will be here to lead the charge against
private school vouchers as long as the people of North Carolina
continue to send me to Congress to serve them.
Vouchers are a bad idea because they drain needed public resources
away from our public schools, where more than 90 percent of the
children in this country are educated, in favor of private schools that
have no accountability to the American taxpayers. Rather than siphoning
funds from the public schools, we need to invest more in initiatives
like school construction, teacher training, class size reduction,
tutoring and in other proven methods to raise academic achievement.
Rather than make permanent the enormous tax bill that has blown the
surplus and ruined the economy, we should pass legislation to get
Americans working again.
Let me state that there are some provisions of this bill that I do
support. For example, I strongly support tax relief for employer-
provided education and training benefits. I also strongly support
expanded tax deductibility of college student loan interest. Both these
meritorious provisions do not change the fact that this is a
fundamentally flawed bill.
This bill is bad education policy. This bill is bad tax policy. This
bill is bad budget policy. I urge my colleagues to join me in voting it
down.
[[Page H6028]]
Mr. CARDIN. Mr. Speaker, regrettably, I cannot support this bill
because of the budget implications it would create. The Bush
Administration has failed to produce a budget proposal that is fiscally
responsible, it has failed to protect the Social Security surplus, and
this bill will dip even further into that surplus. We cannot raid the
Social Security surplus to reward private schools while we are in the
middle of a budget crunch and a public school funding crunch.
There are two measures in H.R. 5203 that I do support. We should
extend Section 529 savings accounts so that hard-working parents can
attempt to keep pace with rapidly rising higher education costs and
give their children the opportunity to go to college by creating
education savings accounts. We should also allow parents of military
academy students with scholarships to withdraw Section 529 funds
without penalty. We must give students who are attending our military
academies the same treatment as students with other scholarships. I
hope that we can enact a good budget bill that includes these important
provisions.
Mr. HULSHOF. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Culberson). The question is on the
motion offered by the gentleman from Missouri (Mr. Hulshof) that the
House suspend the rules and pass the bill, H.R. 5203, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. McDERMOTT. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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