Congressional Record, Volume 150 Issue 67 (Thursday, May 13, 2004)

[Congressional Record Volume 150, Number 67 (Thursday, May 13, 2004)]
[House]
[Pages H2933-H2949]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PERMANENT EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET

Mr. RYAN of Wisconsin. Mr. Speaker, pursuant to House Resolution 637,
I call up the bill (H.R. 4275) to amend the Internal Revenue Code of
1986 to permanently extend the 10-percent individual income tax rate
bracket, and ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 637, the bill
is considered as having been read for amendment.
The text of H.R. 4275 is as follows:

H.R. 4275

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

SECTION 1. EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE
BRACKET.

(a) In General.--Clause (i) of section 1(i)(1)(B) of the
Internal Revenue Code of 1986 (relating to the initial
bracket amount) is amended to read as follows:
``(i) $14,000 in the case of subsection (a),''.
(b) Inflation Adjustment Beginning in 2004.--Section
1(i)(1)(C) of such Code (relating to inflation adjustment) is
amended to read as follows:
``(C) Inflation adjustment.--In prescribing the tables
under subsection (f) which apply with respect to taxable
years beginning in calendar years after 2003--
``(i) the cost-of-living adjustment used in making
adjustments to the initial bracket amount shall be determined
under subsection (f)(3) by substituting `2002' for `1992' in
subparagraph (B) thereof, and
``(ii) such adjustment shall not apply to the amount
referred to in subparagraph (B)(iii).

SEC. 2. REPEAL OF SUNSET.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall not apply to--
(1) paragraph (1) of section 1(i) of the Internal Revenue
Code of 1986, and
(2) the amendments made by paragraphs (1) and (7) of
section 101(c) of such Act.

The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall
be in order to consider the amendment printed in House Report 108-483,
if offered by the gentleman from New York (Mr. Rangel), or his
designee, which shall be considered read and shall be debatable for 1
hour, equally divided and controlled by the proponent and an opponent.
The gentleman from Wisconsin (Mr. Ryan) and the gentleman from New
York (Mr. Rangel) each will control 30 minutes of debate on the bill.
The Chair recognizes the gentleman from Wisconsin (Mr. Ryan).
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, today the House can make the 10-percent bracket
permanent for working Americans by passing this legislation, H.R. 4275.
The 10-percent bracket was created in the Economic Growth and Tax
Relief Reconciliation Act of 2001. It has provided substantial tax
relief for low-income workers by taxing the first $14,000 of married
couples and $7,000 for singles at a 10-percent rate instead of a 15-
percent rate. This tax relief was accelerated last year in last year's
Jobs and Growth Tax Relief Reconciliation Act. H.R. 4275 would make
this tax relief permanent.
If Congress fails to act to pass this legislation, Americans will see
their taxes increase starting next year. Without action, the size of
the 10-percent bracket will automatically shrink next year, so that
more income will be taxed at a higher rate. In fact, the 10-percent
bracket will vanish altogether after the year 2010 unless we act today
to make it permanent.

{time} 1100

If H.R. 4275 is not enacted, 73 million tax filers will see a tax
increase starting next year. The effect will be particularly acute
after 2010 when 123 million tax filers will see an average annual tax
increase of $500.
It is worth noting that more than 20 million of these returns are
low-income taxpayers and families who have all of their income taxed at
this lower 10 percent rate. The public deserves a solid, dependable Tax
Code that provides incentives and lets working people keep their money
for their own needs. The 10 percent bracket provides such an incentive,
one we can and should make permanent by passing this legislation.
Mr. Speaker, it is important that people know what taxes they are
going to face in the future. By having all of these uncertainties in
the Tax Code, not knowing whether you are going to be in the 10 percent
bracket next year, the 15 tax percent bracket next year, it makes it
difficult to budget for the future.
We are talking about the taxpayers who can least afford to have a big
tax increase going from 10 percent to 15 percent on their incomes next
year, let alone not having the knowledge of knowing whether or not this
is going to happen. It is very important, Mr. Speaker, that families
know what lies ahead, that businesses know what lies ahead, and let us
all remember that two-thirds of businesses in America file their taxes
as if they were individuals, not as corporations, but as pass-through
entities where they file on the individual rate. Making sure that small
businesses, which produce 70 percent of the jobs we have in this
country and low-income taxpayers know what lies ahead in the Tax Code
is very important to make sure that we sustain the economic recovery we
are now engaged in.
Mr. Speaker, largely because of the tax cuts that this bill enacted,
largely

[[Page H2934]]

because of the full implementation of the tax rate reductions that
occurred just this last July, our economy has taken off. Just since
last August, this economy, by the most conservative estimate, has
produced 1.1 million jobs. In fact, since January 1 of this year, this
economy, by this most conservative payroll estimate, has produced
881,000 jobs. This is no longer a jobless recovery; this is a recovery
that is producing good jobs.
Even the manufacturing sector, which is so near and dear to my heart
because it is such a big issue in Wisconsin, is producing jobs. The
reason we are producing jobs in this economy is because people get to
keep more of their own money to spend as they see fit. Businesses are
reinvesting, rehiring people. The economy is working, and we cannot
snuff out this economic recovery by yanking out the tax relief that was
so instrumental in getting us onto the path of growth that we are on
today. That is why I urge passage of this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. BECERRA. Mr. Speaker, I ask unanimous consent to claim the time
of the gentleman from New York (Mr. Rangel), the ranking member of the
Committee on Ways and Means, for the managing of the time on this side
of the aisle.
The SPEAKER pro tempore (Mr. Linder). Is there objection to the
request of the gentleman from California?
There was no objection.
Mr. BECERRA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we have before us another proposal which in this case I
think every single Member of Congress would like to step up to the
plate and say we need to do something like this. We have a tax system
where oftentimes folks who work very hard, those who are striving and
obtaining middle-class status, sometimes find they are paying more
taxes than people earning 10, 20, 100 times what they are. That seems
very unfair, and it is very unfair.
When we have a tax proposal which actually reduces taxes by starting
at the bottom, by taking the lowest tax rate and giving a tax break
there, you guarantee giving a tax cut to everyone, not just those who
are very wealthy, but those who are middle income and those who are of
modest income. If you start at the bottom tax bracket, everyone will
fall into that bracket, whether rich or poor.
So when we look at this particular proposal we have before us, H.R.
4275, from the onset we want to say, let us do something like this
because it helps all of America. And so we should be able to say let us
do this because it helps all of America. The difficulty is while we
should do something like this, this bill, H.R. 4275, does not help all
of America.
What is worse is if I can tell Members that those who are not helped
are those in the middle of America, Members would be most surprised.
Members would think perhaps it does not help everyone because we avoid
giving the very wealthy, who got tremendous tax relief from previous
tax bills that the President proposed, it would be unfair to pile on
top of the more than $130,000 in tax cuts they have received in the
last couple of years even additional sums; but that is not the case.
The folks who are losing here, and there are millions who would lose,
are folks who make between $50,000 and $100,000. In other words, the
one-fifth of America that most of us consider middle class is the group
of Americans that are going to suffer, millions of them. Within the
next 5 or so years, some 33 millions of those households that earn
between $55,000 and $100,000 are the households that are not going to
get to benefit from this particular tax cut proposal. As unfair as that
sounds, that is the reality.
There are ways to cure it, and on this side of the aisle there will
be a substitute proposal presented which ensures that every single
taxpaying family, including those between $50,000 and $100,000 would
qualify for the tax reduction in this particular proposal. It is a
simple amendment, it just needs to be paid for; and we have come up
with a way to pay for it which is not just fair but fiscally
responsible.
Mr. Speaker, we have a proposal here that on its face can be sold to
the American public, but in reality and in its implementation, not only
is it unfair because it leaves out a good portion of middle America, at
the same time it does nothing to cure what is going to haunt the rest
of America for many, many years, and that is this growing deficit that
we have in our Federal budget.
This year we are being told we will have a budget deficit exceeding
perhaps $400 billion. That is more than $1,000 for every man, woman,
and child in this country. Think of it as a birth tax. Any child born
today automatically is born with that family owing the Federal
Government as a result of President Bush's budget for this year over
$1,000 to the Federal Government, just on bearing that child.
This proposal, which will cost billions of dollars, and as I said, it
has no legitimate purpose behind it to help reduce the taxes for all
Americans, if we do the right thing, is not bad because you are
reducing taxes on one end, but if you are just raising them somewhere
else, you are not getting much of a benefit. We will have an
opportunity to get into this later.
I applaud the gentleman from Wisconsin (Mr. Ryan) for his efforts to
try to move this forward. I would hope at the end of the day we realize
we have not just an opportunity to reduce taxes for all Americans, but
we have a way to do it so that the implementation really will reach all
Americans, not just some; and we will do it in a fiscally responsible
way by paying for the costs of this, rather than add to the costs of
the national debt and the growing Federal deficit that we have today.
Mr. Speaker, I reserve the balance of my time.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, let me just mention very briefly, the gentleman who just
spoke is from California, and the taxpayers just in the State of
California who are now only paying that 10 percent bracket, there are
2,605,960 taxpayers in the State of California alone who would
experience a huge tax increase relative to their tax burden next year
if this legislation is not passed. In fact, there are over 12 million
taxpayers in California alone that would experience higher taxes next
year if this does not pass.
So each of us represents people who are struggling to make ends meet
who are at the bottom rung of the economic ladder who are staying just
afloat and paying taxes at that 10 percent bracket who are making
$16,000 or less as a couple. Those are the people that we want to help,
and we want them to get on the upper trajectory of prosperity. The last
thing we want to do is hit them with a big tax increase. If we fail to
pass this bill, that is exactly what will happen.
Mr. BECERRA. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, I do not disagree with some of what the gentleman just
said, but the gentleman has to read the whole book to understand, not
just look at certain chapters in the book. What the gentleman from
Wisconsin (Mr. Ryan) has excluded from his reading of the book is that
we have something approaching 13 million households in America today,
today, that by the time they file their taxes for next year will not
qualify for the benefits in this proposal. That is 13 million, and that
is because of the AMT, the alternative minimum tax.
Remember back in the 1970s, early 1980s when we heard stories of the
multibillion dollar corporations, the multimillionaires who at the end
of the day when they filed their taxes would pay zero in taxes where
the average American was having to give Uncle Sam some money?
Well, there was a law passed to make sure that everyone, not just
middle class, but even the super rich and megawealthy corporations paid
some taxes. That was the alternative minimum tax legislation. But we
have seen incomes creep up some, we have seen inflation creep up some;
and as a result, the alternative minimum tax has seen more people creep
up into its brackets and now qualify to have to pay taxes under the
alternative minimum tax.
There are 13 million households who next year when paying their taxes
will not benefit from this proposal because they will fall under the
AMT. And by 2010, in 5\1/2\ years, we will have 33 million households
that will have crept up

[[Page H2935]]

into the AMT world. Therefore, while they may get a tax break under
this proposal at first, when they have to switch over to do their
calculation for their taxes under the AMT, they will get nothing. This
bill does nothing to cure that. The Democratic substitute does.
We do not think it is fair to sell this as a tax cut for everyone
when, indeed, middle-class America is the one that is losing out the
most, and all at the expense of growing the size of the national debt.
Let us be fiscally responsible and let us be fair. We have a way to do
that. We would hope our colleagues on the other side of the aisle would
join in that effort.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 15 seconds.
Mr. Speaker, on May 5, 2004, the House voted 333-89 to extend the
exemption amounts for the AMT, to index them for inflation; and I think
the gentleman from California (Mr. Becerra) voted for the AMT relief
bill. We passed the bill, making sure that we can go study the problem
and figure out how to comprehensively fix it.
Mr. Speaker, I yield 4 minutes to the gentleman from Texas (Mr.
Sessions), a member of the Committee on Rules.
Mr. SESSIONS. Mr. Speaker, I thank the gentleman for not only
ensuring the success of this bill but also properly arguing the merits
of the 10-Percent Tax Bracket Permanent Extension bill, H.R. 4275.
Today we are on the floor to talk about part of what is a vision that
our President has and the Republican Party has for taxpayers in this
country. Before the year 2000, from 1986 to 2000, there was a 15
percent tax bracket, the lowest tax bracket for Americans in this
country.
President Bush challenged this Congress to do something better, to do
better for the middle class in this country and those wage earners in
the bottom tax brackets. I believe we responded in kind with the tax
cuts that we provided this President that he asked this Congress to do.
I think we did the right thing.
The fact of the matter is that under our own rules and regulations of
getting bills done, including working with the other body, we could not
make this permanent.

{time} 1115

We are here today to say to the American public, to say to taxpayers,
we need to make this permanent. This is about making the 10 percent tax
bracket permanent so that we do not have a tax increase to the 15
percent. The people who will gain and benefit most from this wonderful
action will be those people who are brand new, starting up in their
lives, perhaps, men and women who have a big dream. Perhaps they have
just come to this country. Perhaps they are young people who are
starting their families. We need to make sure that we do not overtax
them.
That is why the gentleman from Wisconsin is on the floor today. That
is why the gentleman from Wisconsin, representing the Committee on Ways
and Means and their great chairman, the gentleman from California, are
on the floor today, to say we think this message that our President,
George W. Bush began, that this Congress has agreed with, that the
American people needs, that the Republican Party is here asking for
again, is important. It is important that we have permanent extension,
that we say we are not going to fight this battle again, that those
taxpayers deserve a low tax rate. They need to pay in their fair share,
and we believe that fair share should be 10 percent.
I believe in what we are doing. I would ask for all my colleagues to
support H.R. 4275.
Mr. BECERRA. Mr. Speaker, I yield myself 1 minute to respond to
something my friend from Wisconsin mentioned, that last week we passed
legislation from this House that would take care of the Alternative
Minimum Tax problem. Again, that is one chapter in another book. What
he does not mention is the other chapters in the book say that that was
relief for 1 year. So all those millions of Americans, the 13 million
Americans of the 100 million Americans who are Tax filers would for 1
year, if that legislation takes effect, be saved. But in 2006, 2007,
2008, it jumps right back up.
What the gentleman does not say is that the reason we are in this fix
to begin with is because the other side of the aisle, as is proposed in
these bills, is not willing to put forth a permanent reduction right
away because of the cost. So we are coming back every year doing this
piecemeal because it seems to cost less, and the American public does
not realize what the ultimate cost of this is. But you can only fool
the American public so long.
Let us do things right, be fiscally responsible, and do it fairly. We
do not mind doing it. Let us just be fiscally responsible and fair
about it instead of cloaking this behind some device and some
statement.
Mr. Speaker, I yield 5\1/2\ minutes to the gentleman from Washington
(Mr. McDermott), a member of the committee.
Mr. McDERMOTT. Mr. Speaker, let us be honest about what is going on
out here today. It is Thursday. We are going home. They have got a
fund-raiser tonight. The Republicans wanted to hang around for that. We
have got to have something to put in the Saturday news that will kind
of blot out what is happening in Iraq. So let us get this tax bill out
here. We load up the cannon and we will get the rubber-stamp Congress
in here and they will go bam-bam, and whatever the President says. You
know, I think if the President said, I want the Republicans to come and
stand on their head in the aisles, they would be down here in droves.
This Congress is not thinking.
Mr. Speaker, I submit for printing in the Congressional Record an
article entitled ``All Quiet on the House Side'' from the Washington
Post of May 11. That article goes on to lay out what this Congress has
not done. Thirty-five of our people were killed in Iraq last week. Many
more were injured. People have seen these pictures of abuse. They have
been looking at it all. And what did the House do? Well, we named some
post offices. That seemed pretty important. Last week, the Nation
learned that the Federal debt reached an all-time high of $7.13
trillion. What did we do? Well, we said they could use the Capitol
grounds to have the soapbox derby. That was a very important way we
responded to that. Yesterday the Bush Department of Commerce announced
that our trade deficit and the amount of money that this Nation borrows
from foreigners to pay for our imports, from the Chinese to the Saudis,
hit an all-time high. We are in the debt of the Chinese and the Saudis.
Just do not ever forget that, because that is what we are doing. You
are paying your taxes so we can pay interest on debt that we borrowed
from the Saudis and the Chinese.
If you read some of the books around town, the President is probably
going to call the Prince of Saudi Arabia and ask him to produce some
more oil so we can lower the price. That is, if you believe Bob
Woodward's book. Secondly, the majority leader has dismissed the idea
of any kind of investigation. And, third, despite the record-high
budget and trade deficit, they come out here asking for more tax cuts
that will disproportionately help the wealthy.
When this passes today, there will be 225 Republicans or 300
Republicans, or whatever, I do not know how many, they will all be out
here going home with their press release under their arm saying, I
helped you. What they do not tell people is what this means in terms of
long-term debt. They are going to say, well, but this is for the middle
class. The amount of money that goes to the middle class is less than
goes to the people on the top of the pyramid. This is not a tax cut for
the middle class. It is really a tax cut for the people on the top, and
there was no way to exclude the middle class so they had to get a few
of the drippings off the edge of the table.
My colleagues remember that story about Lazarus the beggar who was
sitting on the floor, waiting for some crumbs to fall off the table.
That is the middle class of this country according to this President.
He ought to read that story about Lazarus. There is a real message
there that I think gets lost in this whole process.
In today's clips, you will also find a quote from our chairman,
excuse me, our ranking member for the moment, who said, ``We don't want
our grandkids to pay higher taxes tomorrow to pay for our tax cuts
today. So all we are saying is don't take credit for extending the tax
cuts on the one

[[Page H2936]]

hand while you're breaking your promise to balance the budget for your
children.''
Nobody looking at what is going on in the world today could possibly
say you know where you are going. You made these tax cuts in the first
place when you were going downhill 100 miles an hour and you said, oh,
if we cut the taxes, it will be all better. The proof is going to be in
the pudding on election day. The fact is that on election day, you are
going to find out whether all your hot air that you have blown into the
economy really turns out to be real or not.
In February, you created 21,000 jobs. We have got to remember that it
takes 250,000 jobs every month to keep up with the increase in
population in this country. If you do not create 250,000 jobs, you are
not even keeping up with the problem. They created 21,000 jobs. All
government jobs, by the way. Not a single private sector. Then they
came to March. This was their big winner, 308,000 jobs. Well, that is
about keeping up. Then the next month they came up with 280-something
thousand and, my goodness, they kept up one more month. But they have
done nothing about the 2.25 million jobs that they lost over the last 3
years. They have also produced the highest long-term unemployment rate
since the Second World War and they want to make another tax cut today.
There is an old country saying that some of the people probably know
about: When you find yourself in a hole, the first thing is, stop
digging. The Republicans believe that the faster you dig, the better
you are going to get out of the hole. We had to dig you out in 1993
under Mr. Clinton. We dug you out and you just went back to get your
shovel and start digging a hole again. Please stop digging.
Mr. Speaker, I include the following article from the Washington
Post:

[From the Washington Post, May 11, 2004]

All Quiet On the House Side

democrats say gop is evading debate

(By Charles Babington)

The week of April 26 was eventful and troubling for the
nation, yet curiously brief and serene for the House of
Representatives. Thirty-five U.S. servicemen were killed in
Iraq. CBS aired shocking photos of Americans abusing
prisoners near Baghdad. The federal debt reached an all-time
high, more than $7.13 trillion.
In the House, meanwhile, members returned to Washington on
Tuesday of that week for three quick, unanimous votes at
nightfall. They renamed a post office in Rhode Island,
honored the founder of the Lions Clubs, and supported ``the
goals and ideals of Financial Literacy Month.''
The next day, Wednesday, was a bit busier. After naming a
Miami courthouse for a dead judge, House members debated how
to extend the popular repeal of the tax code's ``marriage
penalty.'' The only real issue was whether to pass the
Democratic or Republican version. The GOP plan prevailed, 323
to 95.
After two days and one night of desultory activity--roughly
their average workweek this year--House members packed up and
rushed home to their districts. Despite the burgeoning
scandal over U.S. treatment of Iraqi prisoners and persistent
concerns about the economy and the deficit, the House has
been keeping bankers' hours.
The House's lean schedule is no accident. GOP leaders who
set the agenda and floor schedule say they achieved most of
their top priorities last year--including enactment of a
Medicare prescription drug bill and the third round of
President Bush's tax cuts--and are content to rest on their
laurels through the election. While other House priorities
are stuck in the Senate, House Republicans believe they have
the best of all worlds: They can take credit for the enacted
legislation and blame Senate Democrats for bottling up the
rest of their agenda.
``Last year we sent a lot of legislation to the Senate, and
we don't want to overload them,'' House Majority Leader Tom
DeLay (R-Tex) told reporters last week. ``They're already
overloaded. . . . We need to be here passing good
legislation, doing the people's work and not doing a bunch of
make-work.''
House Democrats see a more cynical motive. The GOP
majority, they say, wants a complacent Congress that will
raise few questions about the Bush administration, despite
the international uproar over the prison abuse scandal in
Iraq and recent damaging revelations about Bush's decision to
go to war.
``Given all the issues and problems the country faces, it's
scandalous that we're only coming in to work three days a
week, and even then most of the time we're renaming post
offices,'' said Rep. Chris Van Hollen (D-Md.). ``This is a
deliberate effort to keep Congress out of town, keep us from
asking questions.''
House Minority Leader Nancy Pelosi (D-Calif.) noted that
senators held three committee hearings on the prison abuses
before House leaders summoned Defense Secretary Donald H.
Rumsfeld to the Armed Services Committee last Friday--a day
that the Senate was meeting but the House was not. DeLay
dismissed the idea of a full-fledged congressional
investigation, which he likened to ``saying we need an
investigation every time there's police brutality on the
street.''
Pelosi complained: ``Americans are out of work. Our troops
are in danger in Iraq. Our reputation is in shreds throughout
the world. And we're leaving early afternoon on Thursday.''
She also said, ``The House of Representatives has
demonstrated that it is nothing more than a rubber stamp for
the administration.''
Stephen Hess, a senior fellow at the Brookings Institution,
contends that the House's anemic work schedule is symptomatic
of the larger problem of political gridlock. He said
lawmakers are ``probably realistic in saying, `We're not
spending much time here because we know that nothing would
get done.' '' He added, however, that ``if they stuck around
and talked to each other, maybe they could figure something
out.''
Last week's House action was typical in many ways. It
featured bitterly partisan arguments over the Iraq war, in
the House chamber and in dueling news conferences. But the
main bills approved were a resolution condemning the prison
abuses and a long-expected one-year extension of a provision
to protect millions of Americans from the alternative minimum
tax--a temporary measure that postpones difficult decisions
about a major looming problem.
The week of April 19 was similar. The House held three
votes Tuesday night, all unanimous and all renaming post
offices. On Wednesday, members quickly passed five bills
without debate, under ``suspension'' rules. The one drawing
the most opposition--14 nay votes--endorsed research and
development into ``green chemistry.''
Thursday was that week's busiest day, as Republicans and
Democrats vigorously debated a ``continuity of government''
bill, meant to ensure that Congress could function if many
lawmakers perished in a terrorist attack. The measure, which
passed 306 to 97, would require states to hold special
elections within 45 days if at least 100 House members were
killed. As usual, members had Monday, Friday and most of
Tuesday free of Washington-based duties.
Meanwhile, the U.S. military campaign in Iraq had one of
its bloodiest weeks ever. Shells killed 22 Iraqi prisoners
near Baghdad one day, and suicide bomb blasts killed 68
people in Basra--many of them children--the next. Violence in
the besieged city of Fallujah continued, and 14 U.S.
servicemen were killed during the week.
The week before that, the House was in recess, as it plans
to be the week of May 24, the week of June 28, the six weeks
starting July 26, and all of October, November and December.
John Feehery, spokesman for Speaker J. Dennis Hastert (R-
Ill.), defended the House's accomplishments and pace. ``Last
year we sent a lot of things over to the Senate, and
they're sitting in Tom Daschle's back pocket,'' he said,
referring to the Senate minority leader, from South
Dakota. Those bills include tort reform to curb medical
malpractice suits, energy legislation, and welfare
reauthorization.
This year, Feehery said, ``we've passed a lean budget'' for
fiscal 2005. ``We're working very hard to keep the
president's tax cuts in place. We're monitoring the situation
in Iraq'' and will appropriate extra funds as needed. House
committees, he said, ``have done a lot of oversight on the
Iraq war,'' primarily aimed at seeing that money is well
spent.
The House does not need showy inquiries in front of cameras
to fulfill its watchdog obligations, Feehery said. ``Our
oversight is not politically motivated, which probably
frustrates the Democrats,'' he said. ``It's motivated by
better governance.''
Rep. Rahm Emanuel (D-Ill.), a top adviser in the Clinton
White House, is unconvinced.
``We can name post offices,'' Emanuel said, ``or we can ask
the hard questions about the direction of our nation.''

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 2 minutes to
respond. There is a lot to respond to there, though. I do not know if I
have enough time to respond to all of what my friend from Washington
just said. I think that it would be good to have a little economic
refresher course here for some of the Members of Congress.
I just want to point out a couple of things. Number one, the soapbox
derby resolution was brought by the minority whip from the other side.
But, number two, I think the Member from Washington ignored a lot of
good things we just did in the last week here in Congress. Today we
have the association health plans bill on the floor, helping small
businesses, individuals, pool together to buy their health insurance in
collective nationwide buying pools to get down the cost of health
insurance. Yesterday we passed the FSA rollover to help bring down the
cost of health insurance and we passed medical liability reform to help
bring down the cost of health insurance.

[[Page H2937]]

So this Congress is obviously performing. I think he may have glossed
over a lot of the accomplishments. In fact, we have 87 very important,
substantive bills sitting over on the doorstep of the other body
waiting for action because we have outproduced and outperformed the
other body on legislation.
One final point is the unemployment rate that we are experiencing in
America today is lower than the average unemployment rate of the
nineties, the eighties, and the seventies; 1.1 million jobs have been
created, good jobs, not all good jobs but many good jobs since August.
This economy is pulling out of the recession it had experienced a year
ago. This economy is producing jobs. We still, yes, have a way to go;
but the point of the story is when you take a look at the fact that
just this year, in the last 10 months since last July, we have had
lower tax rates in America. Because of that, we actually have more
revenues coming into the Federal Government.
But to make the point clear, last year where we had higher tax rates
on the American taxpayer, we brought in less money to the Federal
Government. This year with lower tax rates, where we have more economic
activity, more people keeping what they earn and a lower tax rate, we
are actually bringing in more revenue to the Federal Government. We
believe the way to fixing our problems is jobs and by giving people a
chance to upgrade their life-styles and get jobs in the economy, we
will have more tax revenue, rather than increasing taxes and increasing
spending. That is not our philosophy.
Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida
(Mr. Shaw).
Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this
time. I took particular interest in listening to the gentleman from
Washington when he said how the Democrats in 1993 dug us out of a hole.
I would have to remind the gentleman that his party was running the
Congress for decades before that. There is not one dollar that this
government spends that is not directly appropriated or approved by this
House, right here, where revenue and spending bills must start and end.
So I would suggest that he take a lesson in constitutional law and
check his history when he starts doing this.
Then he says how they claim to have dug us out, with the largest tax
increase in history. That is the way we balanced the budget. That is a
fact of history. I think we should certainly take notice of that. As
the gentleman from Wisconsin correctly pointed out, these tax decreases
that we have on the books right now, one of which we are talking about
sunsetting now, that we want to erase the sunset on, has been the
economic stimulus that has been the engine that has led to this great
recovery. We were headed towards perhaps what would have been a very
deep recession and if it were not for the Bush tax cuts, we would have
bottomed out and still be struggling at the bottom of the hole that he
is referring to.
What have the tax decreases done? These tax cuts have given economic
stimulus that has increased employment in this country. The
unemployment rate has dropped tremendously, far beyond the
expectations, I think, of either political party. What has done this?
Economic growth has done this. To raise taxes or allow them to go up is
trying to say that a store that is charging too much for goods is going
to get more revenue by increasing the cost of its products. That does
not happen. You slow down sales. When we increase taxes, or allow them
to increase, economic growth is stifled. Unemployment goes up, economic
growth is slowed, and this is a fact of life. What we need to do is to
be sure that we do not go back to the lower rate at the 15 percent
level, that we get rid of the sunset provision and provide that this 10
percent bracket is going to remain in effect.
This is tremendously important. It affects so many millions of
taxpayers in my own State of Florida and it has a great economic effect
in all the congressional districts. I urge the passage of this
resolution.

{time} 1130

Mr. BECERRA. Mr. Speaker, I yield 4 minutes to the gentleman from
Massachusetts (Mr. Neal), a member of the Committee on Ways and Means.
Mr. NEAL of Massachusetts. Mr. Speaker, I want to thank the gentleman
from California (Mr. Becerra) for yielding me this time.
Mr. Speaker, before I speak specifically to the issue here, let me
offer an opinion just briefly based upon what the gentleman from
Florida just said. We have got to pay for this war in Iraq. There ought
to be some truth to what we do here. After this election, regardless of
who is selected as the next President, it is going to cost another $100
billion at least. That will be pushed off until after the election. So
last year it was $60 billion. Earlier this year it was $87 billion. Now
as part of the rollout, it is $25 billion. We all know that number is
too low. $1 billion a week for Iraq and now more than $1 billion a
month for Afghanistan. 135,000 troops in Iraq. They need equipment. We
are going to have to increase that base at some point.
The answer here is this: we are going to fight two wars with three
tax cuts, and the markets are reflecting it. I appreciate the analogy
that was drawn by the gentleman about raising prices, but we are
engaged in two wars across the ocean. The Republican Party in American
history used to take fiscal prudence as the cornerstone of their
existence. Today they take the position that we can cut taxes time and
again because at some point we are not going to have to pay.
We are going to have to pay for these two wars, and rather than
taking the response that we have in this institution week after week of
just simply saying we are going to have another tax cut, there ought to
be some truth to what it is that we attempt to do here.
In addition, it is an honor to be on the Committee on Ways and Means
in this institution. It is really an honor. Why can these bills not
come to the committee to be vetted the way they are supposed to be? Why
are these bills brought to the floor around one of the prestigious
committees in the Congress? I ask the appropriators who are watching in
their offices now what they would do if legislation was brought to the
floor that had not been vetted in their subcommittees or that had not
been brought to the floor and discussed in the full committee before
being brought to the floor in this institution for a vote. They would
reject it. They would be up in arms.
In addition, the other phenomenon that we have witnessed here, Mr.
Speaker, which is equally troubling, is that Members who do not even
belong to the committee are now brought to the floor for this
instantaneous solution to help them through the election cycle. That is
not the way that committee is supposed to be run. The people on both
sides are well regarded by other Members of this institution, and yet
we move right around the process.
The substitute bills that have been offered by the Democratic
minority in this House have been fiscally responsible. We would ask
that these opportunities be put in place for us to discuss these bills
in the committee where they are supposed to be discussed. That is what
the Committee on Ways and Means does. And yet they are brought to the
floor so that we can get ourselves through the next election cycle. It
is an ill considered way to bring legislation to this floor, but most
importantly, given the financial realities of Iraq and Afghanistan, it
is irresponsible to do what we are doing now week after week.
I would remind people even with this legislation that is on the floor
today, very simply, one third of the people through the clawback
provisions of the Alternative Minimum Tax will not see any tax relief
despite what they are saying today. We have got to deal with that
alternative minimum tax issue; and the tax cuts they put in place week
after week now, without a lot of thought incidentally, do not speak to
the heart of the issue of Alternative Minimum Tax. It costs $600
billion to fix. Let us fix that and give middle-income taxpayers the
relief that they need.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the
gentleman from South Carolina (Mr. Barrett).
Mr. BARRETT of South Carolina. Mr. Speaker, I thank the gentleman
from Wisconsin for yielding me this time.
We are going to do something good today. One of the speakers earlier
said

[[Page H2938]]

the House had not been doing anything. We are going to do something
today.
Mr. Speaker, I rise today in full support of H.R. 4275, which
preserves the 10 percent tax bracket. The tax cuts proposed by
President Bush and passed in the Congress in 2001 created a new tax
bracket at a low 10 percent rate to help lower the burden on working
Americans. Because of this tax relief, the first $14,000 of taxable
income is now taxed at 10 percent instead of 15 percent, a significant
savings to the American worker.
If Congress fails to act, the 10 percent bracket will shrink by
$2,000 next year and will completely disappear by 2011, resulting in 22
million low-income workers being pushed to a higher tax bracket, and 73
million working people paying higher taxes as early as next year.
The Joint Committee on Taxation estimates that H.R. 4275 will provide
$218 billion in tax relief over 10 years and will save the average
taxpayer more than $2,400 during the next decade.
Mr. Speaker, the bottom line is very simple. If Congress fails to
pass this legislation today, we are raising taxes on low-income, hard-
working people. That just does not make common sense. I know in South
Carolina they know that they can spend their money better than we can.
Let us give them back their money. Let us allow them to spend it. And I
urge my colleagues to vote in favor of H.R. 4275.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the
gentleman from Wisconsin (Mr. Green).
Mr. GREEN of Wisconsin. I thank the gentleman for yielding me this
time.
Mr. Speaker, this legislation is about one thing, allowing hard-
working Americans to keep more of what they earn. It is not
complicated. As the previous speaker noted, this bill provides a lower
rate on the first $7,000 on taxable income for single filers and the
first $14,000 earned by joint filers. That affects nearly every
American. It is an enormous benefit to low- and middle-income
taxpayers. In my State alone, the 10 percent bracket has helped over
one million people.
In this institution, Mr. Speaker, we hear time and time again about
how we need to provide tax relief for all Americans, not just the
wealthiest; for all working families, not just corporate CEOs. This is
it. This is our chance. By passing this bill, we will help keep lower
taxes for millions of working families, families who are saving for
school, families who are looking to buy a home, families who are
planning for their retirement, families who are looking just to make
ends meet. Today we give them a chance. We work to lift their lives. We
work to allow them to keep more of what they earn. We allow them a
greater chance at the American dream. That is what it is all about. So
when we hear the other side say time and time again that the Republican
Party is only concerned about the wealthiest, today is the test. Today
is the chance that we have to help all working Americans, all working
families. We allow them to keep more of what they earn. Let us see who
stands up for hard-working families, and let us see who does not.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the
gentlewoman from Tennessee (Mrs. Blackburn).
Mrs. BLACKBURN. Mr. Speaker, I thank my colleague for yielding me
this time, who is truly a leader in this House on the issue of tax
relief for hard-working Americans.
We are talking taxes today and this week. And because the Republicans
are the majority here, we are talking tax relief, not tax increases;
and the taxpayers need to be thinking about that. If the Democrats were
running the show, we would be talking tax and spend and higher taxes.
Republicans believe that the taxpayers ought to be keeping more of
those hard-earned dollars. And we face a lot of opposition to that here
in Washington. Too many times we have got liberals who would rather
spend their money for them, and then they want to take the credit for
it. It was President Bush and the Republican Congress who enacted
historic tax relief that is fueling tremendous job growth in this
country. We have created over 1 million jobs since last August; and
there were a lot of naysayers that said it will never happen, it will
never happen. One million jobs since August.
H.R. 4275 is a critical piece of legislation for 24 million lower-
income Americans. If we do not pass this, their taxes are going to
increase by 50 percent. We do not believe government is why America is
strong. We think it is because of the people. It is Americans that make
this country great, Americans that are making economic choices for
themselves and their families, not having a government program taking
away their checkbook. That is the Republican philosophy. We have led on
this issue, and we are continuing to work to lower personal income tax
brackets.
Time and again the American people are choosing to send Republicans
to Washington because they want tax relief. I have said it in the past.
Democrats only talk about tax relief in election years. Republicans
talk about tax relief every year.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2\3/4\ minutes to the
esteemed gentleman from Illinois (Mr. Crane), a high-ranking member of
the Committee on Ways and Means.
Mr. CRANE. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, in 2001 we passed the first Bush tax cut, which I am
proud to say created the new 10 percent tax bracket. Before this
legislation was passed, the lowest tax rate was 15 percent; and without
immediate legislative action, 73 million hard-working American
taxpayers, including 22 million low-income taxpayers, will see their
taxes increase next year. In 2004 the 10 percent rate applies to the
first $7,000 of tax-paying citizens' taxable income for single
taxpayers and $14,000 for joint filers. However, beginning in 2005
through 2007, the 10 percent tax rate will shrink and apply only to the
first $6,000 in taxable income for single filers and $12,000 for joint
filers. In 2011 the 10 percent bracket will disappear all together. We
cannot allow any of this to happen.
The legislation before us today maintains the size of the 10 percent
bracket at $7,000 for singles and $14,000 for married couples. H.R.
4275 also makes permanent the 10 percent tax bracket and indexes the
income limits for inflation. Once enacted, it will save the average
American taxpayer more than $2,400 over the next 10 years. Who will
benefit from this? 73 million American taxpayers, including 22 million
low-income taxpayers, small business owners and their employees, hard-
working Americans who through no fault of their own are about to be hit
with a tax increase.
Mr. Speaker, a vote against this legislation is a vote to increase
taxes on those who can least afford it.
I commend the gentleman from Texas (Mr. Sessions) for his leadership
role in ensuring that this does not occur, and I urge my colleagues on
both sides of the aisle to support this legislation, the passage of
which will be of great benefit to our citizens.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the
gentleman from South Carolina (Mr. Brown).
Mr. BROWN of South Carolina. Mr. Speaker, I thank the gentleman for
yielding me this time.
Mr. Speaker, I rise today in strong support of H.R. 4275 because I
know how important this bill is to our recovering economy to nearly 73
million of America's hard-working families. This Congress must act now
to extend and to make permanent the 10 percent tax bracket.
Last year, the President signed the Jobs and Growth Tax Act into law.
Our ailing economy needed bold and decisive action; and this plan was
precisely that, the right recipe at the right time. Since the law went
into effect last June, the economy has expanded at an average quarterly
rate of 5.5 percent.
This bill accelerated the reduction of individual tax rates and
allowed for the expansion of the 10 percent bracket, which grows the
paychecks of all Americans. An increase in disposable income, or simply
put, more money in the pockets of all Americans, has contributed to a
growth in consumer spending. This is critical to my district in South
Carolina because it helps tourists from all over America visit our
coastal areas and spend money to enjoy our attractions and Southern
hospitality. And this is happening all over America.
Benefits of the Jobs and Growth Tax Act are long term as well. In
addition

[[Page H2939]]

to the short-term boost from the passage of this bill, making all of
the tax cuts permanent will lead to a significant increase in
investments, job creation, and wages paid to workers. In fact, more
than 1.1 million jobs have been created nationwide since last August.
For all of these reasons, I cannot overestimate how important it is for
Congress to permanently provide the tax relief that the 10 percent
bracket affords.
I thank the gentleman from Texas (Mr. Sessions) for taking the lead
on this critical piece of legislature and the House leadership for
continuing to make permanent tax relief a priority for this Congress.
With the economy finally starting to rebound, now is not the time to
raise taxes on the American people. I am proud that we have made great
progress in this area, but I realize we have much work left to do.
I urge all of my colleagues to support H.R. 4275 and to continue to
fight for hard-working American taxpayers.

{time} 1145

Mr. BECERRA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, as I said before, there is the kernel of a very good
idea in this legislation, and I believe that both sides have tried to
extract the good idea from the proposal before us today. The difficulty
is, as you ask any farmer, it takes time and it takes money and it
takes a lot of sweat to have anything grow.
No one in America should believe that we can pass legislation that
will cost more than $200 billion and not have it take some sweat and
some cost for America. Money does not grow on trees. There is a cost
involved. It is a worthwhile idea, because this is a tax cut that
everyone can agree to, because it starts from the bottom and everyone
would get it, if you corrected the AMT, which, unfortunately, this
legislation does not do.
So while there is the kernel of a good idea, it is destroyed by the
reluctance or the unwillingness to do what is right, and that is to
take care of the 33 million Americans by 2010, in 5\1/2\ years, who
will fall into the Alternative Minimum Tax and will see any savings
from this particular tax cut washed out when they have to file their
taxes using the Alternative Minimum Tax.
Secondly, when you are facing mounting deficits, the largest this
country has ever seen, and you are starting to now see the consequences
of it, you have to reflect back on the term used in the late 90s, early
2000, when we talked about this ``irrational exuberance'' of the stock
market, where you kept seeing the stock market just rise and rise and
rise, and people could not make sense of it. But everyone kept buying
and buying and buying, because that is where we were headed.
All of a sudden the floor dropped out from under us, and people paid
the price. Talk to the employees from Enron, who saw their company go
bankrupt and saw their entire pension savings washed away not only
because of Enron's corruption, but because of the drop in the stock
market.
That irrational exuberance is now driving much of what we have seen
on the floor this year. A quick example: this year alone in this House
we have passed out, and I will say to all of America, I did not vote
for these measures, not because I did not want to, but because I did
not think it would be fiscally responsible, we passed marriage penalty
tax relief, a kernel of a good idea, unpaid for, over $100 billion; the
extension that my colleague from Wisconsin mentioned of AMT relief for
1 year only that will cost close to $18 billion to make sure those
Americans don't fall into the AMT. Good, but only 1 year.
Three, a flexible spending plan that was on the floor yesterday for
debate, which is, again, a good idea, to allow Americans who have
health care costs to be able to have a pot of money that they can
extend over to the next year if they did not use it up. A great idea.
Cost, close to $10 billion, unpaid for.
Extension of the 10 percent tax bracket that we are debating today,
about $220 billion, unpaid for.
The child tax credit extension done a few weeks back, again a good
idea for families that have children. $161 billion, unpaid for.
Total, more than $500 billion this year alone in unpaid-for tax cuts,
most of which have a good idea behind them. To add to the $400 billion-
plus deficit for this year alone, which adds to, as you heard my
colleague from Massachusetts mention earlier, the more than $3 trillion
debt that the Nation owes as a whole.
Irrational exuberance? Take a look at today's paper, business
section: ``U.S. trade deficit grows unchecked. $47 billion gap in the
month of March.''
We are on track to have a more than $500 billion trade deficit with
other countries. We are going to owe, at the end of this year, just for
this year, to foreign interests, more than $500 billion. What they are
going to do with those securities they get, that promissory note from
us in its place, we do not know. If they dump it all of a sudden, we
are in real trouble.
What else should we know? Gasoline prices. Gasoline prices a year ago
were 50 cents less per gallon. If you are the average American, that
means it has added about $50 a month in your gasoline bill. That is
about $600 a year more in gasoline this year you will be paying.
On top of everything I have said before, the $400 billion-plus
deficit for this year, that adds more than $1,000 for every man, woman
and child. I will call it the birth tax. The $50 a month that you pay,
call it a $600 birth tax, because if you have a child, let us put the
debt on that child for the gasoline; and on top of that, there is $500
billion more that this House just passed, and, by the way, the Senate
has not done it, because they know better, that would be added.
Before you know it, you have got to conclude that this is irrational
exuberance. Let us get real. Great ideas. Every single time these
proposals have come up, the Democratic alternative has said okay, good
ideas; but let us pay for them where we can. Where we cannot, let us
pare them down, because we cannot continue to sell the American public
a bill of goods.
Someone will pay for this. Good ideas. We would all love to be there.
If we had real discussions in committee, we could have hashed this out
and come up with a bipartisan bill. But we bypass the committee
process. Again, America does not know that. We are coming to the floor
without having discussed this in committee. That is okay. That is the
way it is going to work. We will live with that. But do not let the
American public believe you can do this stuff and pluck it off trees
and pay for it.
Let us do it the right way. Let us be fiscally responsible. Let us be
fair. Make sure that those from the President's previous tax cuts of a
couple of years ago, who received $130,000 in benefits if you were a
millionaire in tax cuts, pay their fair share. If a guy in Iraq, one of
our soldiers, a man or woman, can sacrifice a little bit, and probably
not take advantage of any of these benefits, then certainly those folks
who are the millionaires, who are taking home the lion's share of all
of these tax cuts, can sacrifice a bit to help us pay.
That is what we do. We have a proposal that would say take the one-
fifth of 1 percent wealthiest to help pay for this, for all Americans.
We think you can do it. Sure, it hits millionaires; but it helps
middle-class Americans. It is fiscally responsible, fair, and something
that would get a bipartisan vote that could get signed by the
President.
Mr. Speaker, we are going, I guess, to continue to do this in the
House and not watch the Senate do any of this whatsoever; and we are
going to end again this year without having given people what they keep
thinking we are going to give them, and that is what I think damages
this institution overall as a whole.
Let us move forward in a bipartisan fashion. We can do it, because
there is a kernel of a good idea in these proposals. But we can be
fiscally responsible and fair at the same time.
Mr. Speaker, I yield back the balance of my time.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, since we are going into the debate on the substitute, I
will not take too long to close, although I think some of what the
gentleman from California just said bears some responding to.
I think this debate has done a pretty good job of showing those who
are viewing it the differences, the differences between the two parties
here

[[Page H2940]]

on the floor, the differences between the two approaches to fiscal
responsibility, between two philosophies.
What you just heard the gentleman from California say is we have
recklessly cut taxes by $500 billion over the next decade. It is
important to put that in context.
Mr. Speaker, this Federal Government will spend about $2.7 trillion
this year. Off the top of my head, we will be spending, with taxes
coming in, about $29 trillion over that 10-year period. So we are
proposing to allow the American taxpayer to keep about $500 billion out
of that $29 trillion of their money we are about to spend.
It kind of comes down to this, Mr. Speaker, two points. Number one,
we believe the best way to get ahold of our fiscal problems, to reduce
our deficit, is to hold the line on spending and cut spending and grow
the economy. The budget resolution we brought to the floor just a month
or so ago was a resolution that froze spending and actually reduced
spending in critical areas so we can get a handle on our Nation's
finances. The other side did not vote for that budget agreement.
We also need to recognize the fact that when you cut taxes, economic
growth occurs from that. One of the great stories being told right now,
the success that we see in the data from this new economic recovery
that is producing all these jobs, is the fact that this year, with the
lower tax rates we are paying, we are getting more revenues coming in
to the Federal Government.
What we see is that when you cut taxes on entrepreneurs, when you cut
taxes on families, when you cut taxes on investors, they engage in more
economic activity, they create jobs, and people go from being
unemployed and collecting unemployment to going and working and paying
taxes. That is what is happening today. That is a recipe for success.
We do not want to squelch this economic recovery. We do not want to
raise taxes on people. We want to keep taxes low, watch our spending
and reduce spending, and help people get work, so when they go to work
they can provide for their families, and, yes, pay taxes, so that we
can get the revenues we need to reduce and eliminate our deficit. That
is the approach we are advocating.
What is the other side's approach? What is the substitute they are
about to bring to the table? More tax increases. Okay, you can cut
taxes to these people over here on the right hand, but we have to raise
taxes to these people on the left. Net tax increases.
It is a fundamental difference in philosophy. Whereas they believe we
have to keep taxes high and higher, that the emphasis should not be on
spending, but we should raise more taxes, we believe the emphasis
should always be on recognizing the fact that the taxes that this
country collects is not our money, but the money of the American
person, the man and woman in the marketplace, who is working hard to
provide for their family, who is creating jobs, who is sweating and
working every single day. It is their money, not ours.
So we do not believe philosophically, that is the root of what we
believe in, that we should just cavalierly take more and more and more
money out of a person's paycheck, out of their wallet. We believe they
should keep more of what they earn.
What is so great about that philosophy is it is also good economic
policy, and we are seeing that. We are actually getting more revenues
because of lower taxes. How about that? And the good news is, this can
be bipartisan. When John Kennedy did this, it worked. When Ronald
Reagan did this, it worked. This has been done by Republicans and
Democrats coming together in the past. When Reagan did it, it was
because of good Democrats working with Jack Kemp and Bill Roth in the
Congress to reduce tax rates on the American families. What happened?
Economic growth was encouraged, tax rates went down and revenues went
up.
This does work. It is working right now. What we are seeing in this
debate is a difference in philosophies.
Mr. Speaker, I want to conclude by saying one thing. If a Member of
Congress comes to the floor today and votes against this bill, they are
voting to increase taxes on 23 million low-income workers. They are
voting to increase taxes on 23 million low-income workers by one-third,
to raise their taxes by one-third. They are also voting to increase
taxes on 80 million taxpayers across the country.
It is a very clear vote. If you vote for this bill, you preserve
these tax cuts. If you vote against this bill, you are going to raise
taxes on 23 million low-income earners, the least of whom among us
should be facing this kind of a tax increase.
Mr. BLUMENAUER. Mr. Speaker, last week, Federal Reserve Chairman Alan
Greenspan delivered a warning that ``the free lunch has still to be
invented.'' He was referring to the soaring Federal budget deficits
that are adding hundreds of billions of dollars to our $7 trillion
debt. These budget deficits are threatening economic growth and
increasing interest rates in the short-run, and risk the solvency of
Social Security and Medicare in the long-run. This bill is not a free
lunch. In fact, it will cost $218 billion over the next 10 years.
Instead of passing legislation with any degree of fiscal
responsibility, the Republican leadership is passing the buck,
trillions of them, onto our children and grandchildren. Middle-class
tax cuts are important in addressing tax fairness, of which our current
system is increasingly in dire need of help. The Democratic substitute,
which I support, provides middle-class tax relief and protects against
the egregious impact of the Alternative Minimum Tax, without adding to
the Federal budget deficit and burdening future generations.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I stand against H.R. 4275,
which would permanently extend the 10-percent individual income tax
rate bracket. I stand against this measure not because it reduces
taxes, but because it continues the use of irresponsible fiscal
policies. A tax that is made permanent today with no clear and
effective offsets will leave this Nation in trouble for the future.
Our Nation faces a staggering deficit with record low revenues coming
in to the Federal Government. These conditions have left significant
needs for education, health care, fire and police protection, and many
other services. The deficit this year is expected to exceed last year's
record deficit by at least $60 billion and to total at least $2
trillion over the coming decade. America simply cannot afford more
unpaid-for tax cuts.
Given this situation, we must act now to protect our Nation's public
investments and long-term economic future. By failing to offset its
$218 billion cost, H.R. 4275 would further drain Federal coffers of
revenue needed to meet our Nation's shared priorities. Moreover,
increasing already large deficits will undermine long-term economic
growth and diminish the quality of life for future generations of
Americans who will face higher interest rates and who will have to bear
the burden of the debt incurred today.
At this uncertain time of continuing unknown costs of war in Iraq and
its aftermath, and with an aging population about to strain Social
Security and Medicare resources, it is reckless to enact permanent
unpaid-for tax cuts. Our Nation faces a long-term gap between revenues
and obligations, and soon Congress and the American people will have to
make hard decisions about how to meet our competing priorities. Given
this reality, we should not make permanent changes to the tax code that
will further reduce revenues for decades to come.
I want to reiterate that the most disturbing aspect of irresponsible
fiscal policies are the soaring deficits that will result from these
policies. This administration has tried to say that deficits don't
matter; we know that is simply not true. History has proven that
chronic deficits threaten our economic strength by crowding out private
investment, driving up interest rates, and slowing economic growth.
Indeed foreign investment in the United States has dried up because
foreign investors have no confidence in the Bush economic agenda. This
Administration's irresponsible budget policies have turned a surplus
into a large deficit that is choking off growth in the American
economy.
President Bush likes to say his policies are geared towards tax cuts
for all Americans. In fact the average American won't receive a
substantial tax cut, but will instead be hit with a tax hike in the
form of an evergrowing deficit. A large deficit means taxpayers have to
shoulder the costs of paying the interest on this new national debt.
The end result will be a debt tax on the great majority of Americans.
This will be a tax on lower- and middle-class Americans; it will be a
tax on our heroic war veterans; it will be a tax on the elderly and,
most unfortunately, it will be a tax on our children. The truly sad
part of these policies is that, while they are bad for America today,
they are even worse for future generations of American taxpayers.
Mr. STARK. Mr. Speaker, I rise today to oppose H.R. 4275, the
reckless Republican bill permanently extending the 10 percent
individual income tax bracket, and in support of

[[Page H2941]]

the Democratic substitute that provides real, fiscally sound relief for
middle-class families who deserve it most.
Expanding and extending the 10 percent tax bracket is a great benefit
to many low-income Americans. But, let's not forget that this bill also
benefits the wealthy who get more of their income taxed at a lower rate
as well.
Low- and middle-income Americans deserve this tax break. But, the
Republicans are unwilling to pay for it, leaving a $200 billion hole in
lost revenue. Even worse, when this proposal is added to the other tax
bills that have recently passed or are being proposed, the price tag is
over $500 billion in new debt thrown on the backs of our children and
grandchildren.
The Republican plan is also flatly unfair to a lot of taxpayers
because it refuses to spread benefits out equally. Just last week, the
Republicans passed a one-year patch for the Alternative Minimum Tax
(AMT) that helps the wealthy but fails to protect lower-income families
while driving the country further into debt. Unfortunately, the
Republicans' bill today does not apply to anyone who pays the AMT,
which means a full one-third of all taxpayers cannot benefit from this
tax cut at all. Some deal if you ask me.
In contrast, the Democratic substitute is fair, fiscally responsible
and a whole lot better for most American families. Our bill extends the
10 percent bracket expansion, but it does so while requiring that
Congress find a responsible way to pay for this change to the tax code
in order to make it permanent. To finance the immediate costs of this
change, the substitute requires the wealthiest Americans--those earning
over $1,000,000 annually--to give back a small portion of the huge Bush
tax cuts. Finally, the substitute applies this tax cut equally to all
taxpayers by ensuring even those paying the AMT get the benefits of the
expanded 10 percent bracket.
I urge my colleagues to vote against the unfair, fiscally
irresponsible Republican proposal and support the Democratic
substitute, which provides equal relief for all taxpayers without
burdening our children and grandchildren with billions of dollars in
new debt.
Mr. KIND. Mr. Speaker, I strongly support providing tax relief to
middle-income Americans by extending the 10 percent tax bracket
expansion that is scheduled to expire next year.
Without action, the current amount of income subject to the 10
percent tax bracket will decrease by $1,000 for individual filers and
$2,000 for couples as required under the 2003 tax cut package. While
the majority of the 2003 tax proposal that passed the House was
fiscally irresponsible and designed to benefit only the wealthiest of
Americans, its provision expanding the 10 percent tax bracket to
benefit more middle-income taxpayers had bipartisan agreement. The
legislation before us today and the substitute offered by Congressman
Tanner will permanently extend the current income levels failing under
the 10 percent tax bracket.
As we extend the 10 percent tax bracket expansion, we need to act in
a fiscally responsible manner. It is unfair to Americans today, and
especially the next generation, to delude ourselves by thinking the
record budget deficits facing our Nation, estimated by the White House
at over $500 billion this year alone, will simply go away.
As a member of the House Budget Committee, I supported a budget
resolution that would have extended the 10 percent tax bracket
expansion while still reducing the deficit. This approach requires
tough choices, prioritization, and a bipartisan commitment to helping
working families. With the House-Senate conference committee still
negotiating the budget resolution for fiscal year 2005, I remain
hopeful that we will be able to provide Americans continued tax relief
today without raising the debt burden on our children's generation.
The substitute offered today by Representative Tanner is a more
responsible bill that will provide relief to millions of families while
not increasing the budget deficit. By adding a rate adjustment of 1.9
percentage points of the tax cuts for households making over $1
million, the Tanner substitute provides a reasonable offset to benefit
more American families without burdening our children with added debt
that they will have to pay off. Further the Tanner substitute also
completely protects against these tax cuts being taken back by the
Alternative Minimum Tax, and provides incentive to address mounting
Federal deficits by making permanency of this tax provision contingent
on a balanced budget in 2014. This is a superior approach, helps more
Americans, and ensures most middle income taxpayers will not have to
worry about a tax increase related to the 10 percent bracket in the
near future.
Mr. Speaker, it is important that we act today to ensure average-
income Americans will not unfairly jump into a higher tax bracket in
2005. However, I believe we can and must provide this relief in a
fiscally responsible manner that will not burden future generations of
Americans. Just as it was true last week when we passed legislation
permanently repealing the marriage penalty tax, our work is far from
over in helping working families face the challenge of today's economy.
We must come together in a bipartisan manner to craft a fiscally
responsible budget resolution.
Mr. RUPPERSBERGER. Mr. Speaker, I rise in opposition of this
amendment today. I agree extending the 10 percent tax bracket is
necessary and lawmakers should pass legislation to make it permanent.
Substantively, I agree with this.
I disagree, however, with the impact this bill will have on our
already dire fiscal reality. We need to have responsible fiscal
management in this country--beginning with a sound and comprehensive
budget. All bills that follow should incorporate the same fiscal
responsibility, whether that bill cuts taxes or authorizes spending.
This bill has a $218 billion price tag, which will have to be
borrowed on top of the $280 billion we have already borrowed this year.
I am extremely concerned about our levels of borrowing, most of which
comes from foreign governments.
The Treasury Department states that major foreign holdings of U.S.
Treasury securities equal $1.6 trillion. Mainland China and Hong Kong
alone hold $206 billion of U.S. debt. Japan has $607 billion in
holdings. With China's purchases of U.S. government securities
exploding by more than 105 percent since January 2001, it is clear that
foreign investments in the U.S. are financing our budget deficits. That
means foreign investors, not U.S. residents, will be the beneficiaries
of the interest paid by us, our children and our grandchildren.
The Washington Post recently quoted a former official of the People's
Bank of China as saying, ``The U.S. dollar is now at the mercy of Asian
governments.'' This is simply wrong and we need to stop it now. If we
do not, future generations will be burdened with higher taxes and
greater debt. They will have to pay off the structural deficits and
interest costs we are accumulating today.
The only way to stop this now is to stop deficit spending. That is
why I supported the substitute bill that would have provided tax relief
that was paid for and did not add to our historical $7.1 trillion
Federal debt.
Mr. FRELINGHUYSEN. Mr. Speaker, today I rise in support of H.R. 4275,
which will permanently create a low 10-percent rate to reduce the tax
burden on 73 million working Americans.
The fact of the matter is if Congress does not act this year,
taxpayers will feel the burden of a significant tax increase.
The creation of the 10-percent tax bracket in 2001 has boosted the
take-home pay for more than 733,000 working New Jerseyans. This
legislation puts a halt to expiration of the 10-percent tax bracket and
more importantly prevents 24 million low-income workers from being
pushed into a higher tax bracket, and ultimately being forced to pay
more in taxes.
In 2001, tax relief legislation passed by Congress and signed into
law by President Bush created a new tax bracket at a low 10-percent
rate. Because of this significant tax relief, the $14,000 of taxable
income for couples and $7,000 for singles tax filers is taxed as 10
percent instead of 15 percent.
Without enactment of this legislation, in 2005, the 10-percent
bracket will shrink by $2,000 for couples and $1,000 for singles and
will ultimately disappear in 2011.
That is why I urge my colleagues to join me in supporting H.R. 4275
and to continue building on our ongoing efforts to provide tax relief
for all hard working Americans.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mr. Linder). All time for debate on the bill
has expired.

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

Mr. TANNER. Mr. Speaker, I offer an amendment in the nature of a
substitute.
The SPEAKER pro tempore. The Clerk will designate the amendment in
the nature of a substitute.
The text of the amendment in the nature of a substitute is as
follows:

Amendment in the nature of a substitute offered by Mr.
Tanner:
Strike all after the enacting clause and insert the
following:

SECTION 1. EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE
BRACKET.

[[Page H2942]]

amount shall be determined under subsection (f)(3) by
substituting `2002' for `1992' in subparagraph (B) thereof,
and
``(ii) such adjustment shall not apply to the amount
referred to in subparagraph (B)(iii).

If any amount after adjustment under the preceding sentence
is not a multiple of $50, such amount shall be rounded to the
next lowest multiple of $50.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
(d) Repeal of Sunset.--Title IX of the Economic Growth and
Tax Relief Reconciliation Act of 2001 shall not apply to--
(1) paragraph (1) of section 1(i) of the Internal Revenue
Code of 1986, and
(2) the amendments made by paragraphs (1) and (7) of
section 101(c) of such Act.

SEC. 2. BENEFITS OF ACT NOT DENIED BY REASON OF ALTERNATIVE
MINIMUM TAX.

(a) Minimum Tax.--The amount of the minimum tax imposed by
section 55 of the Internal Revenue Code of 1986 shall be
determined as if section 1 of this Act had not been enacted.
(b) Credits.--In applying section 26(a)(1) of such Code,
the amount referred to in subparagraph (B) thereof shall be
reduced (but not below zero) by the amount of the reduction
in the taxpayer's regular tax liability by reason of section
1 of this Act.

SEC. 3. BENEFITS EXTENSION NOT TO INCREASE FEDERAL BUDGET
DEFICIT.

(a) In General.--Section 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
subsection:
``(j) Additional Tax on High Income Taxpayers.--In the case
of taxable years beginning in calendar year 2005, 2006, 2007,
2008, 2009, or 2010, the amount determined under subsection
(a), (b), (c), or (d), as the case may be, shall be increased
by 1.9 percent of so much of adjusted gross income as exceeds
$1,000,000 in the case of individuals to whom subsection (a)
applies ($500,000 in any other case).''
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2004.

SEC. 4. REQUIREMENT THAT CONGRESS BALANCE BUDGET.

(a) In General.--Notwithstanding the provisions of section
1 of this Act and any other provision of law, title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001
shall take effect in the form as originally enacted unless
Congress meets the requirements of subsection (b).
(b) Requirements.--Congress meets the requirements of this
subsection if--
(1) before September 1, 2010, Congress has enacted
comprehensive Federal budget legislation, and
(2) the Director of the Office of Management and Budget
certifies in September of 2010 that such legislation--
(A) will result in a balanced Federal budget by fiscal year
2014, determined by taking into account the costs of the
foregoing provisions of this Act and without taking into
account the receipts and disbursements of the Social Security
and Medicare Trust Funds, and
(B) will permit the general fund of the Treasury to repay
amounts previously borrowed from the Social Security and
Medicare Trust Funds without requiring large foreign central
bank purchases.

The SPEAKER pro tempore. Pursuant to House Resolution 637, the
gentleman from Tennessee (Mr. Tanner) and a Member opposed each will
control 30 minutes.
The Chair recognizes the gentleman from Tennessee (Mr. Tanner).
Mr. TANNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the Democratic substitute recognizes the good public
policy behind extending the 10 percent bracket. We believe that. But we
also believe, unlike the majority, that it is irresponsible to do so by
borrowing another $218 billion.
Let me talk a minute about why we say that. I do not believe that
people in this country know exactly how fast the balance sheet of our
Nation is deteriorating. I do not believe people in this country have
focused on or realize what has happened over the last 36 months or so.
I am going to try to lay that out today in this debate.
Mr. Speaker, we now owe collectively, all 290 million of us, over $7
trillion. We have borrowed an additional $280 billion so far this year.
The majority approach is to borrow another $218 billion today with the
passage of this bill.
The gentleman just said if you do not vote for this bill, you are
going to raise taxes on 23 million people. If you do vote for the bill,
you are going to raise taxes on 290 million people, because every
American in this land is responsible for the mortgages that have been
placed on our country over the last 36 months.

{time} 1200

Mr. Speaker, it is heartbreaking to see the financial integrity of
our country compromised like it has been. I would just like to know how
far we are willing to go to sign the names of these young people that
are sitting around here on this board today with a green light as a
mortgage, a further mortgage on our country. I want the people of this
country to realize that right now we owe collectively, in hard money,
about $4 trillion. Foreign interests now own 37 percent of that debt.
Mainland China alone holds over $200 billion. It is now the second
largest buyer of our debt, exceeded only by the Japanese, who hold over
$600 billion.
Secretary Snow was before the Committee on Ways and Means some time
ago and I asked him the question, how do you characterize interest? He
said, it is an obligation of this country. It must be paid. It must be
paid off the top.
Mr. Speaker, when we are borrowing this kind of money and it is being
financed by foreign interests, right now, we have awakened to suddenly
realize that the biggest foreign aid package in this Congress is
interest checks that we are sending to foreign countries. Not only are
we doing that, but we are leveraging our country to people who may not
see eye to eye with us on how the world ought to be.
Anyway, getting back to Mr. Snow, I asked him, what about interest?
He said, it has to be paid. It has to be paid off the top. I said, it
has to be paid first. He said, let me just say this: As a percentage of
GDP, gross domestic product, this is not out of line historically.
The problem that he did not tell us is, when it was this far out of
line before, it was Americans that were buying the bills, notes, and
bonds. It was not the Saudis, the Japanese, the Chinese. We can go down
the line. I have the list here.
How much we owe right now: Japan, $607 billion; China, $145 billion;
plus Hong Kong, another 60 billion; so over $200 billion. The U.K.,
$137 billion; Taiwan, $50 billion; Germany, $45 billion; OPEC, OPEC,
$43 billion; Switzerland, $41 billion; Korea, $37 billion; Mexico, $32
billion; Luxembourg, $26 billion; Canada, $25 billion; Singapore, and
the list goes on and on.
This Congress and this administration is hocking our country to
foreign investors.
Let me say that again, because I do not think people realize and
understand what is happening here. Since 2002, the debt ceiling has had
to be raised $450 billion. In July of 2002, a $980 billion increase the
last Fourth of July, that is $1.4 trillion so far. Do my colleagues
know what that means? That means every day since George Bush took
office, when we have had a one-party government, White House, Senate
and House, the Republicans have borrowed $1.1 billion a day, every day.
Now, we, all of us, have to pay interest on that, and anybody who is
within the sound of my voice under 50 years of age ought to be so
concerned about this that they would write or call or do something.
Because we are literally squandering the wealth of this country by not
paying for tax cuts and increasing spending on the war, and mentioning
the war, the only people being asked to sacrifice anything right now
are the men and women in uniform and their families. None of the rest
of us are being asked to sacrifice anything to defeat the war on
terrorism. In fact, we are told to take a tax cut if you are my age,
and if things get bad enough, go shopping. This is the Alice in
Wonderland that is going on here.
This bill is a good idea, but it is just a symptom of a far greater
problem, and that is the breathtaking, breathtaking fiscal
irresponsibility that is going on here in this town.
Mr. Speaker, I reserve the balance of my time.
Mr. RYAN of Wisconsin. Mr. Speaker, I rise in opposition to the
substitute
The SPEAKER pro tempore (Mr. Simpson). The gentleman from Wisconsin
(Mr. Ryan) is recognized for 30 minutes.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 4 minutes to the
gentleman from Florida (Mr. Shaw).
Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this
time.
I want to point out something in the substitute which I am not sure
has really been brought to the attention or brought to rise here in
this particular

[[Page H2943]]

debate, and that is on the fourth page of the substitute. I will read
starting at line 3: ``Congress meets the requirements of this
subsection,'' and that it is talking about the deduction, ``if before
September 1, 2010, Congress has enacted comprehensive Federal budget
legislation; and, 2, the Director of the Office of Management and
Budget certifies in September of 2010 that such legislation will result
in a balanced Federal budget by fiscal year 2014, determined by taking
into account the cost of the foregoing provisions of this Act and
without taking into account the receipts and disbursements of the
Social Security and Medicare Trust Funds.''
And then B, ``will permit the general fund of the Treasury to repay
amounts previously borrowed from Social Security and Medicare Trust
Funds without requiring large Federal foreign Central Bank purchases.''
Now, I am not sure exactly what they are getting to on this, but if
they think that the Congress is going to have to pay back all of the
money that it has borrowed from Social Security and put cash into that
particular fund, in other words, by putting cash in the Social Security
fund in place of the Treasury bills, I do not know where in the world
they think they are going to get that much money. And they also are
going to have to change the law regarding Social Security, because
Social Security is required to pay that cash into the general fund and
to replace it with Treasury bills, and this particular legislation does
not change that provision.
But most of all, and I think the most damaging thing here which this
Congress should be very jealously protecting, and that is the
legislative authority under the Constitution given to this particular
body. If this bill were passed, and if Members vote for this bill, they
are saying the Office of Management and Budget is going to be the
crossing guard that is going to prevent legislation going forward
unless they say it is fine and they can certify that the budget is
going to be balanced.
A balanced budget is a good thing, but delegating legislative
authority to unelected officials, bureaucrats within the Federal
Government, is a huge mistake, and it is something that we should do in
a bipartisan way, and that is jealously guard what our responsibility
is under the Constitution. I do not know of any other place that we
have delegated such authority.
Mr. HOYER. Mr. Speaker, will the gentleman yield?
Mr. SHAW. I yield to the gentleman from Maryland.
Mr. HOYER. Mr. Speaker, I think the gentleman certainly makes a point
that we do not want to delegate to the executive branch. I think the
gentleman makes a good point: We ought not to delegate.
Mr. SHAW. Mr. Speaker, I thank the gentleman. I should probably
reclaim my time at this particular point.
Mr. HOYER. Of course, the gentleman knows something else is coming.
Mr. SHAW. I know the gentleman is setting me up.
Mr. HOYER. My good friend knows me well.
The fact of the matter is we have been debating for some time the way
we can internally, Congress can control this spending, and reaching
what the gentleman says is a good thing, a balanced budget. And that,
of course, is doing what we did all through the 1990s: applying the
pay-as-you-go provision to both revenues and taxes, which is the
discipline that this body placed on itself so we did not have to rely
on the executive branch.
Mr. SHAW. Mr. Speaker, reclaiming my time, I do not believe that the
pay-go is looking towards the Office of Management and Budget as having
to certify things before we do it.
Mr. HOYER. Absolutely, that is my point. And if the gentleman would
support pay-as-you-go, perhaps we would not have to look to other ways
to try to get to balance.
Mr. SHAW. Mr. Speaker, I can see both sides of pay-go, but I cannot
see both sides of delegating legislative authority to the executive
branch no matter who controls the executive branch.
Mr. TANNER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Becerra).
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me 1
minute.
The gentleman from Tennessee called it Alice in Wonderland. I, a few
minutes ago, called it irrational exuberance. And when we look at the
bottom-line facts, not what projections are, because, by the way, 3
years ago it was projected that we would have a $5.6 trillion surplus,
not deficits. When we look at the bottom-line facts, we are in some
real trouble. Interest rates, which is really the determiner of whether
or not Americans have more money in their pocket or not, have gone up
in the last 2 months alone about a point, 1 percentage rate.
What does that mean? Well, if you have a mortgage of about $200,000,
30-year rate, fixed, not flexible and not one that goes up and down,
you are probably going to pay about, on that $200,000 mortgage, you are
going to pay about $120 more per month now. That means at the end of
the year, you are some $1,500 more out of pocket, and over the life of
that 30-year loan, about $43,000. That is the cost of seeing an economy
that is not fiscally righting.
Finally, one last point. That same business section page that said,
``U.S. trade deficit grows unchecked'' has an interesting story at the
bottom part: ``MCI awards $8.1 million severance.'' A gentleman who
worked for 7 months for MCI WorldCom, which was in bankruptcy, was paid
$8.1 million plus $400,000 more for vacation and so forth, severance,
paid for 7 months work at the same time they are planning to announce
that they are planning to trim their workforce by 12,000 people.
Irrational exuberance.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, let me just bring three points up in respect to this
substitute. Number one, my colleague from Florida sort of outlined the
convoluted pay-for in this bill which will render this tax cut
temporary, not permanent, by giving the decision whether or not to keep
this tax cut permanent to some accountants at the Office of Management
and Budget, to in 2010 speculate what is going to happen in 2014 to
make sure that the tax cut becomes permanent. This is another way of
saying this is a temporary tax cut, meaning they are going to increase
this 10 percent bracket again.
The second point I think is important to make, they try to pay for
their substitute with a tax increase. Now, what they will tell us is it
is a tax increase on rich people, individuals making over 500 grand,
couples making over $1 million. What they will not tell us, Mr.
Speaker, is that half of those filers are small businesses. Half of
those people are subchapter S corporations, partnerships, small
businesses.
Mr. Speaker, small businesses create 70 percent of our jobs. Before
the tax cuts that just passed last July, in this country we were taxing
small businesses at a higher tax rate than we taxed the largest
corporations of America. We finally now are in a fair, level playing
field where we tax small businesses at the same tax rate that we tax
large corporations. But they want to undo that.
They want small businesses, small mom-and-pop businesses who bring in
revenues of $1 million or more, who maybe have 2 employees, 10
employees, 50 employees, to pay a higher tax rate than IBM, than Exxon,
than Global Crossing, or WorldCom. That is wrong. I think that is
unjust and unfair, yet they want to return to the days of taxing small
businesses at higher tax rates than large corporations.
The third point is the way that they structure their Alternative
Minimum Tax relief. Now, this is an issue where I think and hope we can
get good bipartisanship support to fix this problem. We hear from both
sides of the aisle that AMT is a problem and we have to fix it. Just
last week we passed a bill to make sure that no new people fell into
the trap of the AMT while we figure out at the Treasury Department and
here in Congress how to really fix this mess, and I hope that we really
do have bipartisan support to fix this mess.
But the way they structure it in this bill means that taxpayers are
going to have to calculate their taxes three times in order to navigate
their way out of the Alternative Minimum Tax. The Alternative Minimum
Tax brings a lot of complexity to the Tax Code for taxpayers. This
substitute makes it

[[Page H2944]]

more complex, more difficult to comply with. That is not the right
direction, so I urge a no vote on this substitute.
Mr. Speaker, I reserve the balance of my time.
Mr. TANNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, before I yield to the gentleman from Maryland (Mr.
Hoyer), I would like to say as far as the delegation to OMB, that was
done under pay-go, it is a way of scoring, and if we do not have any
other, I guess, arguments against the merits of the bill, they bring up
procedural matters. I understand that.
I would also like to say, with the rate adjustment that we have in
our bill, only 165,000 returns out of 32.8 million small business
returns would be affected. That is less than one-half of 1 percent.
Mr. Speaker, I yield 7 minutes to the gentleman from Maryland (Mr.
Hoyer), the minority whip.
Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding me this
time. I really could take 30 minutes to try to correct what the
gentleman from Wisconsin has been saying.
First of all, he is a very bright young man. I like him. And it is
your money, he says. Now, that is the mantra, and that mantra I have
heard for 20-plus years. And, of course, it is your money. And by the
way, it is my money, too. I pay more taxes effectively than the Vice
President of the United States, who made almost 10 times as much as I
make, but I am not poor-mouthing that. And, by the way, the gentleman
talks about these large corporations. They do not really care what the
rate is because, as we notice, I say to the gentleman, 60 percent of
them do not pay any taxes because of their preference items.

{time} 1215

An aside that the Republican majority has made the Tax Code
extraordinarily more complicated over the last 3\1/2\ years,
extraordinarily more complicated over the last 3\1/2\ years, let me
call to my friend, the gentleman from Wisconsin (Mr. Ryan), some facts.
A, Mr. Armey said you own this town. You have the President, you have
the Senate, you have the House. Now, I have been here a lot longer than
the gentleman from Wisconsin (Mr. Ryan).
He talks about debt. Under Ronald Reagan, we raised the debt level 17
times. Under George Bush, the first, in 4 years we raised the debt
limit 10 times. Under this President, we have raised the debt limit by
$1.5 trillion over 3 years. Over 8 years, under President Clinton we
raised the debt limit five times for $1.58 trillion. The difference,
however, is that under Ronald Reagan and George Bush, the first, we
added about $2 trillion to the debt. Under this President, we have
added about $1.5 trillion to the debt, and under Bill Clinton, over 8
years, less debt and net $79 billion worth of debt, not trillions, net.
Why? Because for 4 years of the last 4 years of the Clinton
administration we created surpluses.
Secondly, the gentleman and all the Republicans talk about it is
spending that is the problem. The gentleman from Wisconsin (Mr. Ryan)
says that spending is the problem. I would like to have the gentleman's
attention because I know he is going to find these figures very
edifying and interesting because he talked about spending, that is a
legitimate issue to raise; and I want to call the gentleman's attention
to the administration's budget numbers.
We have it from 1962 to today. Under Ronald Reagan's Presidency, a,
we spent 22.5 percent of GDP on average, some years higher, some years
a little lower, under Ronald Reagan, never below 21 percent. Let me
remind my colleagues that not a penny was spent in America during
Ronald Reagan's term of office without his signature, not one. We never
overrode a veto. The Democrats never imposed spending that the
President did not sign off, not once. So we understand nondefense
discretionary spending was 3.4 percent under Ronald Reagan.
Under George Bush, the first, it was 21.9 percent of GDP. Again, he
never had a bill veto overridden stopping spending. He signed every
nickel of that expenditure, 3.3 percent on nondefense discretionary
spending.
Under George Bush, the second, we have done 19.85, almost 20 percent,
and 3.5 percent, Dick Armey, they control this town, 3.5 percent of
that was on nondefense discretionary spending. I will tell my friend
from Wisconsin this fact is going to amaze him. We spent less GDP under
Clinton for 8 years and we spent less on discretionary spending, less
on discretionary spending, and I heard the gentlewoman from Tennessee
about an hour ago saying we have created 1 million jobs since last
August. We created 23 million jobs in 8 years or about 4 million a year
on average under Bill Clinton.
So, when we are talking about the facts, we ought to know the facts
because the facts belie what the gentleman from Wisconsin is proposing.
That is why we are here, because we believe my colleagues' policy is
not only fiscally wrong but it is also immoral. My friends on the
Republican side want to create the impression that they are the only
ones who support this 10 percent bracket. They are not. We want to make
it permanent, but we do not want to impose a tax.
He talked about various people who are going to get tax increases.
Under their bill, 290 million Americans are going to get a tax
increase, but guess what. They will not get it immediately. We are
going to delay it a little bit, not only past the next election but
maybe past a couple of elections after that. Why? Because interest
rates are going to go up, taxes are going to go up to pay the interest
on this debt that my colleagues are creating, over $200 billion of
additional debt in this bill alone.
That is all we are saying. We are for this policy. We are for keeping
this 10 percent bracket. We want to assist those at the bottom rungs in
our society, build themselves up, grow their families, have a better
opportunity to pay for the education of their children and their
mortgage payments and buy their cars and have a better quality of life.
We want that, but we do not want to give them a bill for it 10 years
from now that says guess what, you have got a big interest that you
have got to pay.
I would urge my colleagues to look at the facts. Look at what we did
under a piece of legislation passed in 1993, one passed in 1990 and,
yes, one passed in a bipartisan way in 1997, which led to the creation
of surpluses.
Let me close by this, and I do not have as much time as I would like,
but Chairman Greenspan said just the other day, who is not a Democrat,
``Our fiscal prospects are, in my judgment, a significant obstacle to
long-term stability because the budget deficit is not readily subject
to correction by market forces that stabilize other imbalances. The
free lunch has still to be invented.''
Vote for this substitute. My colleagues will vote for the policy and
responsible fiscal policy at the same time.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 30 seconds.
I will not go through tit for tat on all of that. Only to say that
now that our Chairman Greenspan was invoked, he also said in that same
speech that the first thing we should do is make these tax cuts
permanent because they really help achieve the economic recovery we
have underway right now.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Missouri (Mr. Blunt), the majority whip.
Mr. BLUNT. Mr. Speaker, I thank the gentleman for yielding me the
time, and I am pleased to follow my good friend, the gentleman from
Maryland (Mr. Hoyer), to the floor to debate this issue. I am
predicting that when we get to the vote on the bill that the gentleman
from Wisconsin (Mr. Ryan) has been talking about on the floor today
that the vote will be overwhelming.
I heard the word ``immoral'' used as it related to this proposal. I
did not quite understand that; but however my colleagues want to
characterize this proposal, in the final vote today, I think that the
vote will be overwhelming, and we will make this 10 percent bracket a
permanent part of the Tax Code.
It is an important addition to the Tax Code. I personally am of the
view that we make a mistake when we eliminate people totally from tax
responsibility, and we should look for ways not to eliminate people
from the tax rolls, but to make that tax burden

[[Page H2945]]

for all Americans as small as we possibly can. It is better you value
what you pay for. We have all been part of that talking about how we
are going to eliminate people totally from the tax rolls. This really
allows more people to pay taxes, but to pay at a lower level.
When we reach the point in this country when we have more people who
do not pay taxes than people who do pay taxes, and we are pretty close
to that number right now, we really begin to change the debate on
taxing and spending policies because not even a majority are paying
taxes. I think it is a good idea to have this smaller bracket, to have
it a permanent part of the introduction of the Tax Code. I would not
even mind to see if we had a bracket just a little bit smaller than
this one eventually, and so I do hope we make it permanent there.
Mr. HOYER. Mr. Speaker, will the gentleman yield?
Mr. BLUNT. I yield to the gentleman from Maryland.
Mr. HOYER. Mr. Speaker, because I understand what the gentleman is
saying, I think it is important to note that every working person in
America pays taxes. We call it FICA tax, and 50 percent of Americans
pay more FICA tax than they do, but we are using, as the gentleman
knows, part of their taxes because there is a surplus in the Social
Security account for general expenditures. So in that sense, the
overwhelming majority of employees are paying.
Mr. BLUNT. Mr. Speaker, people who are working pay into those funds,
that is a good point; and I am pleased that my friend made it.
At the same time, it does not minimize my point that those people who
only pay into the Social Security fund do not have the same stake in
the income tax system and how it works than people who do not. I am
glad to see us making it more possible for people to have a smaller tax
burden at the lower levels of people who pay taxes in the country. I
think that is a good thing.
I think the 10 percent bracket and making this 10 percent bracket a
permanent part of the tax structure is not only what we should do but
what the House will vote to do today. I would like to see that happen
on the other side of the building as well, and we will encourage that
by sending this legislation over.
The 10 percent bracket in the substitute does have conditions still
in it and because of those conditions is not as permanent as the
proposal that we have before us in the main bill. Because of this 10
percent bracket, if we did away with the 10 percent bracket, 73 million
working Americans would pay higher taxes next year than they paid this
year because we would not have the 10 percent bracket available then
next year. Seventy-three million Americans would pay higher taxes
because of that.
Unless the House acts, 22 million lower-income workers would be
pushed from the 10 percent bracket into the 15 percent bracket. We do
not want to see that happen.
This is an important step in the right direction. I urge my
colleagues not only to defeat the substitute, which does not accept the
permanency of this important addition to our tax policies, but to vote
for the bill.
Mr. TANNER. Mr. Speaker, before I yield to the gentleman from Texas,
I would just like to say it does make it permanent, but there are
conditions.
Mr. Speaker, I yield 5 minutes to the gentleman from Texas (Mr.
Stenholm), my friend.
Mr. STENHOLM. Mr. Speaker, I thank my friend for yielding me the
time, and this debate is not about whether we should provide tax relief
to middle-class families. Every Member of this body supports that
general principle.
The debate, though, is whether we should do so with borrowed money on
top of the $7.1 trillion that we already owe. I personally do not
believe we should pay for tax cuts by borrowing money against our
children's future. That is why I support the Tanner substitute, which
will extend the 10 percent tax bracket without increasing the deficit.
This debate today is really about PAYGO, and I appreciate the fact
the majority side does not want to go back to pay-as-you-go. They have
made that very, very clear; and I am sorry that the majority whip left
the floor because I was a little disappointed in some of what he was
saying last week when we had a little change of vote by a few folks on
the pay-as-you-go, and it was inferred to the majority side, those who
have been voting with us on pay-as-you-go, that this bill and the same
one we will vote on in a few minutes or later today on pay-as-you-go
was different than that that was paid in 1997.
It is not different, and in fact, today once again the majority will
make it very clear that they do not wish to go to pay-as-you-go
government, that they are perfectly willing to borrow any amount of
money, any amount of money in order to continue to implement their
economic game plan, which I will submit is not working, and it will
only take a year or two before it will be proven, when we will see the
largest tax increases in the history of our country being implemented,
called the debt tax because we cannot borrow $8 trillion and not have
somebody pay for it; and 4 percent interest on $8 trillion is $320
billion, and a 1 percent increase in any 1 year will increase the debt
tax by $80 billion.
My colleagues can keep wishing that away and they can keep coming up
with red herrings like the three reasons why my colleagues should
oppose this, and my good friend who has been here for the same 25 years
I have been from Florida brings up OMB. He knows that that is standard
language that we use, they use, constantly use. It has always been used
that way.
Let us assume for just a moment he is right and you will come back
and say, no, that is not right. I would share with the gentleman
talking about AMT relief, I believe we can find a way to have
bipartisan cooperation to fix that. We can have bipartisan agreement on
how to fix the OMB and delegating our authority from this body.
What it seems we cannot fix, though, is pay-as-you-go. There seems to
be some reluctance in this body. It used to be my colleagues voted with
me on this issue. In fact, it took Democrats to pass it because there
were not enough Republicans when all of them were voting for pay-as-
you-go to pass anything, and some of us were voting with my colleagues
or they with us, and we got it done. What was the result? A balanced
budget for our country, and all of the sudden that balanced budget is
gone out the window.
The Tanner substitute says we are not opposed to cutting taxes.

{time} 1230

We are not increasing taxes with this amendment. That is a red
herring, and folks on this side know better than to stand on this floor
and say that it is.
What the underlying bill that everybody is going to vote for
theoretically, I wish they were not, I wish they would vote for the
substitute because it is a better bill. It does exactly what we want
done. The only thing it does not do is borrow another $50 billion. Now,
I think we have an obligation to ensure that future generations will be
able to meet our commitments to Social Security and Medicare before we
lock in reductions on revenue. My friends on the other side do not
believe that anymore, and that is fine. That is a legitimate political
position, and you are taking it over and over and over again. Fine.
Just assume the responsibility for that.
The Tanner substitute tells the President and the Congress we have to
start making some tough choices. You bring up a tax cut a week. You
make these statements, send out these press releases, et cetera. That
is wonderful. But the baby boomers are out there. They are about to
begin retiring, reaching age 62 in 2008. And to lock in the lack of
revenue to cover the obligations for them is not a good decision in my
book.
Let me remind everyone, we are fighting a war, a war that has already
cost us $150 billion and is costing another $4 billion a month, and we
come to this body and we argue about how much we are going to reduce
the amount of money that we have available to see that the troops gets
the material, the protection, the armaments that they need to fight the
war. We argue about how we are going to reduce that amount of money and
shortchange them.
This is an amazing place, Mr. Speaker. Amazing how individuals can
vote one way 4 or 5 years ago and vote another way today and explain it
both

[[Page H2946]]

ways. But that is exactly what the majority, all of the majority that
were here in 1997, are doing. And by opposing the Tanner substitute,
you are really opposing pay as you go.
I urge a vote for the Tanner substitute, and I will be one of those
opposing borrowing another $50 billion without applying pay as you go.
Mr. TANNER. Mr. Speaker, I yield myself such time as I may consume.
What this debate is all about is the financial balance sheet of our
country. As I said in my opening statement, this bill is just a symptom
of a far greater problem.
I really, honestly do not believe the people of this country realize
when bills like this are passed, unpaid for, all of those green lights
that go up there are in effect putting a $218 billion, in this case,
mortgage, another mortgage on our country in all of their names;
because these Members who are going to vote for it are not going to pay
it, and I think that is wrong.
But it goes beyond that. It is now a national security matter, as I
discussed earlier. When one realizes that 70 percent of the deficit,
$370 billion deficit last year, was financed by foreign interests, they
are gaining leverage every day on this country.
My grandfather told me one time, he said, John, it is easier to
foreclose a man's house than it is to shoot your way in the front door.
Now, you think about that. China is not always going to see the world
the same as we do. Neither are the Japanese. Neither are any of these
other countries around the world, because they have their own interests
that they must see to. And when we are depending on foreign interests
to finance record deficits, we are acting irresponsibly when it comes
to the national security of this country. I firmly believe that. That
is number one.
Number two, again, I do not think people understand that since
President Bush took office, and we have had virtually a one-party
government in this country, they have borrowed $1.1 billion every day.
Now, if one were running a private enterprise like that, the
stockholders would fire them, or they would be in Chapter 11
bankruptcy. The only difference is, with government, we can continue to
borrow on the good faith and credit of the American economy.
But let me get back to this foreign thing, because I think that
really is something that people can understand. Did you realize that a
former official of the People's Bank of China, the country's central
bank in Beijing, and now an economist in Hong Kong was recently quoted
in the Washington Post as saying the U.S. dollar is now at the mercy of
Asian governments? In the London Financial Times I read where Europe is
incredibly worried about the fiscal irresponsibility of our country.
I just did some figuring. Just so far this year we have already
written interest checks of over $100 billion, just in the first 7
months. That is $14 billion in interest a month this year. Said another
way, we are spending $475 million a day on interest, every day. Since
we started this debate a while ago, we have since spent $20 million in
the last hour on interest. That is $330,000 a minute or $5,550 a second
that we are spending on interest for which this country gets no health
care, no education, no military, no anything that will enable private
enterprise to grow, flourish and create jobs.
They say, well, you know, if we can just keep cutting taxes, the
economy is going to grow. Under that theory, if you abolished all
taxes, the country would be filthy rich. Somebody has to pay at some
point a minimum level of taxes to buy aircraft carriers, to buy tanks,
to buy body armor. I think the gentleman from Texas (Mr. Stenholm) said
the free lunch is still being invented, and one cannot continue to
reduce revenue, increase spending, borrow it all, and not expect to see
a financial Armageddon down the line. How far down the line, I do not
know. I know this: It is much closer today than it was when I got here
16 years ago.
And I know this: that the Chinese particularly will not continue to
buy our paper at a relatively low rate of return to hold their yen,
their currency, artificially low so they can kill us on the trade
deficit. I know that that will not continue forever. And I know that
sometime in the future, whether it is OPEC, Asia, or whomever, they are
not going to view the world the same way we do. And by our actions here
today, and again this is just a symptom of a far greater problem, by
our utter refusal to ask Americans to either cut back or to pay for
what we are getting, we are putting this country in real, clear and
present danger with this foreign holding business.
I do not know how else to put it. I must tell you, this is not going
to go away, and it is going to get worse with every passing day because
we are now paying interest on interest. There is not a reputable
economist that I know that does not say that our country is now in a
structural deficit. This is not cyclical, where we have a recession. We
are now in a structural deficit. The budget they presented, is $500
billion in the red this year, and they say, well, we are going to cut
that in half in 5 years. But they borrow another trillion dollars under
their game plan, which is the best they can do. At 5 percent, another
trillion dollars is a tax increase on 290 million people of $50 billion
a year every year.
Now, that is just on 1 trillion. They have already run through that,
and now almost at $1.5 trillion at $1.1 billion a day. This is
financial madness. And so when my friends complain about spending, the
Republicans have controlled the House for the last 9\1/2\ years. The
Democrats have not spent one thin dime. We do not have the votes to
spend any money. We cannot spend any money, we do not control anything,
the Committee on Appropriations, nothing. So when my colleagues talk
about spending, I suggest they look in the mirror. You guys are the
ones spending all the money. We do not have the votes.
So I just tell you, Mr. Speaker, our country is engaged in a death
spiral financially. If we were in an airplane, unless we did something
different, we are going to hit the ground. We cannot continue to do
this. This bill may be good intentioned, but this substitute says,
look, we have to pay for it. We have asked the top .02 percent of the
people in this country to help us do that. I do not think that is too
much to ask.
I had a friend who had an eighth-grade education. He was an old World
War II guy who went out on his own and he made it big. I asked him one
time, I said, John, what do you want to do in your life? He said I have
two goals, two financial goals. I said, what are they? He said, the
first one is I want to owe the bank $5 million. I said, that is crazy,
man. He said, no, it is not, because if they will let me have $5
million, that means they think I have got 10. And he said, the other
thing I want to do is I want to pay $1 million a year in income tax,
because that means I made 3. And if this country allowed me, with an
eighth-grade education to make $3 million a year, you bet I will be
glad to pay a million for that privilege of living in this great land
that I have known and I want to leave to my children.
What we are doing now is doing violence to what that man was willing
to do coming out of World War II with an eighth-grade education. I just
beg and implore people to think about this and let us see if we cannot
work somehow together. I know you are going to mortgage the country for
another $218 billion in a minute, but surely we can do better than
this. This is an outrage to the future of this country and it is an
outrage to those who came before us.
Mr. Speaker, I yield back the balance of my time.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume to close.
Well, where to begin? Well, we have seen a lot of revisionist history
practiced on the floor today during this debate. I think it is
important to look at what this country has faced in the last few years.
What happened to this country? Well, in 2001 the President was sworn
into office and we were going into a recession. What we found on
September 11 of 2001 was that we were on the precipice of going into a
recession. It looked inevitable that we were going to have a recession,
but maybe we were going to pull out of it. But 9/11 put us into that
recession.
We went into a recession where our revenues to this country dive-
bombed. But what happened after that? Then we

[[Page H2947]]

found some people were crooked in the boardrooms of America, and we had
corporate scandal after corporate scandal after corporate scandal. And
what happened? We went deeper into recession and our revenues
plummeted. Because we saw that Americans' faith in the corporations of
America, because of the Enron scandal, the Global Crossing scandal, and
the WorldCom scandal, shook the foundation of our enterprise system.
What happened also at that time? Well, Mr. Speaker, we were engaged
in war in response to 9/11. We had to spend more money because we had a
war in Afghanistan, we had a Department of Homeland Security to try to
make ourselves harder targets to hit, to play better defense in the war
on terrorism. That costs money. The fundamental and first
responsibility of the Federal Government is to protect the safety and
security of the American people. In post 9/11 government, that means we
had to spend more money on security.
So, yes, spending went up. Spending went up, I would argue, for a
very important reason. And, you know what? Revenues went down. They
went down because we went into a recession, we got deeper into a
recession with 9/11, and we got still lower revenues and a worse
recession because of these corporate scandals.
But the great story in all of this, Mr. Speaker, is the incredible
resiliency of the American worker, of the American citizen, of the
American economy. The American economy is rebounding from all of that.
Most times in America you get hit with one of these calamities, a war,
an act of terrorism, or a recession, but they happened all at the same
time in this country. And what is so wonderful about this is how well
we have responded to it.
Now, yes, spending went up, the debt obviously went up, and revenues
went down. But the good story in all of this, Mr. Speaker, is that in
large part because of the tax cuts that passed, that helped ignite this
economic recovery, and we are working and growing ourselves out of
this. Now, we have many problems that clearly need solving. We are
still involved in a war and we see that on other TV sets every day. We
still have a lot of people who need work. But it is a wonderful thing
that more than a million people found work since last August. It is
even better that about 300,000 people found work last month.

{time} 1245

Mr. Speaker, we still have challenges, and that is why we are seeing
what is coming to the floor this week, all of these pieces of
legislation to try and get this economy back on its feet, to get people
their jobs back.
One of the things we are focusing on just this week and the next 7
weeks in the House of Representatives is to do things to make it so we
are more competitive in the global economy. We look at what it takes to
get jobs in this economy. How do we bring the lagging manufacturing
sector back on its feet? When we look at the problems facing the
competitiveness of the American company, we look at the problems facing
the competitiveness of the American worker, taxes, number one; health
care costs, number two; regulatory costs; litigation costs with
lawsuits; and energy costs.
What is this Congress doing? Well, we had a comprehensive energy
policy brought through the House of Representatives to bring down the
cost of energy and make us less dependent on foreign sources of energy;
filibustered in the other body. Regulatory reform, we are bringing a
whole week's worth of legislation down to the floor in a matter of days
to work on reducing the cost of regulations. Tort reform, we have
passed tort reform bill after tort reform bill after tort reform bill.
Class action reform, medical liability reform, all being filibustered
in the other body.
What are we doing about taxes? This is an area where this Congress
has produced because we have been able to get these bills passed
through the other body and signed into law by the President. So we see
this recovery under way.
One of the areas where this recovery has really rebound is in small
businesses. As I mentioned earlier, small businesses create 70 percent
of the jobs we have in America. Small manufacturers in America today
pay higher taxes than our competitors overseas, especially China and
India. We have to make our small manufacturers more competitive.
What this substitute does is it takes away the very policy that is
igniting this economic recovery. It puts taxes on small businesses.
More importantly, if we fail to pass this underlying legislation, it
will put higher taxes on low-income workers. I mentioned earlier that
over half of all taxpayers hit by the surtax in the Tanner substitute
are small businesses. I misspoke. Seventy-five percent of all taxpayers
hit by this surtax report small business income, sole proprietorships,
partnerships, men and women in America who are putting their own
capital at risk to start a small business, to hire people and bring
them back to work. That is the engine of economic growth that is
fueling this recovery.
Why on Earth we want to hit these people, the creators of jobs in
America, with a new high tax to try to pay for a temporary tax cut
which we are making permanent in the base bill is beyond me.
Now, it is important that Members note the differences in philosophy
here. By raising taxes, as a vote against this bill will do, takes the
pressure off the need to reduce spending. If we always go for the old
answer of let us just raise taxes, let us allow taxes to go back up,
raise taxes on small businesses, that will bring in more revenue to the
government, possibly. Possibly.
But what it for sure will do is take pressure off the Congress and
our Federal Government to cut spending. We want to cut spending. I
think the gentleman from Tennessee (Mr. Tanner) was right when he said
we could have done a better job over the last 8 to 9 years in cutting
spending. I very much agree with that. I think we can do a better job;
but what is also important to say, which was left out, over these 8 or
9 years, in passing the spending bills we have passed in this Congress,
they have always done so by defeating higher spending increases that
have been proposed time after time from the other side of the aisle.
So, Mr. Speaker, what this is about is ensuring the recovery
continues, making sure that 23 million low-income Americans and 73
million taxpayers do not see a big tax increase next year. What this is
about is making sure that the pressure is put on Congress in the right
way, not raising taxes, but keeping taxes low and cutting spending.
That is the emphasis that is placed in this bill. That is what we are
voting for here.
I urge my colleagues to vote ``no'' against the Tanner tax increase
substitute and vote ``yes'' for the base bill so that 23 million low-
income Americans can see this tax relief in reality for the rest of
their lives and so that the rest can make sure they are not going to
wake up next year with a big tax increase.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I am deeply disturbed by the
fact that once again this body is forced to engage in a debate on the
merits of a truly irresponsible fiscal policy. No doubt that this
debate will go back and forth between those who will demand tax cuts
and those who will be against them, but one fact is undisputable, if we
adopt H.R. 4275 in its original form then our national deficit will
grown even larger. Maybe the Members on the other side of the aisle can
live with an enormous national deficit that grows larger by the day,
but I surely cannot.
This is why I am in full support of the Rangel Substitute which
offers a responsible way to extend the 10-percent individual income tax
rate bracket. Under the Rangel Substitute, these middle-class tax cuts
actually benefit the middle class. I know it might shock my colleagues
on the other side of the aisle that there could be tax cuts that might
actually help Americans who are not in the top 1 percent of income
earners. I'm sure we will hear the argument that the richest of
Americans need tax cuts because they are the ones who will invest back
in America, but I have yet to see the logic come to fruition. What I
see is a deficit that is expected to exceed last year's record deficit
by at least $60 billion--and to total at least $2 trillion over the
coming decade--and yet here we are again on the floor of this
legislative body on the verge of passing even more tax cuts that have
no offset. H.R. 4275 in its original form will add another $218 billion
that will have to be paid for by future generations. I'm sure the
millionaires of today will enjoy their additional tax cuts, I'm sure
they'll spend their savings wisely, but meanwhile their good fortune is
coming at the expense of a future generation of Americans, many of

[[Page H2948]]

whom are not even born yet. The good fortune that American millionaires
enjoy today will be a burden on those yet unborn Americans in the form
of exponentially higher taxes and higher interest rates. This phantom
menace that will burden future Americans can truly be called a ``birth
tax.'' My colleagues from the other side of the aisle can talk for days
about the unfairness of higher taxes for today's millionaires, but all
the talking in the world can not change the fact that this
irresponsible tax policy is most unfair to those Americans who don't
yet even have a voice to make their opposition known.
There is no doubt that the proponents of H.R. 4275 will make the
argument that this legislation will put more money back in the pockets
of hard working Americans, but the truth is far from their tired
rhetoric. The truth of H.R. 4275 in its original form is that it
excludes far more average Americans than it actually helps. This
proposed legislation denies the tax cut to any household on the
Alternative Minimum Tax (AMT). There will be 33 million households by
2010 that will be on the AMT, those 33 million households make up one-
third of all taxpayers and they would receive absolutely no benefit
from this proposal. By 2010, almost half of AMT taxpayers would be
households in the $50,000 to $100,000 gross income range. Now I ask,
does this sound like legislation that truly benefits America's middle
class? Too many average Americans are not seeing a benefit; instead
they are being fed a steady diet of misinformation and irresponsible
policies. The Rangel substitute addresses all these loopholes that
allows so many Americans to fall through the cracks and not receive
real tax relief.
The Rangel Substitute is the only legislation currently on the floor
that offers the full and true version of the 10-percent bracket and it
does so while still being fiscally responsible. Plain and simple, the
Rangel Substitute is the only legislation that will actually help
middle-class Americans as the sponsors of H.R. 4275 purport to do. I am
certain my colleagues from the other side of the aisle will vote
against the Rangel Substitute because God forbid that Americans who are
millionaires might get a few thousand dollars less in tax cuts in order
to help other Americans who actually need a tax cut. That's where the
crux of this debate on taxes is, Republicans will talk endlessly on the
need for tax cuts that benefit the richest Americans and the richest
businesses, but I can not argue against that more strenuously. Lower
and middle-class Americans need a tax cut, America's small businesses
need and deserve a tax cut. The truly sad fact is that we can provide
this relief to Americans who need it and we can do it without
handcuffing future generations with a large national deficit, but the
majority party in this body refuses to accept that solution. The Rangel
Substitute puts money back in the pockets of middle-class Americans by
making a minute adjustment to the tax rate for households that earn
over $1 million a year. This rate adjustment leaves these millionaire
households with annual tax cuts which will still well exceed $100,000
per year. How much more money do millionaires need? Meanwhile, lower
and middle class Americans are struggling to both make a living and
have savings for the future, maybe to buy a home or to send their
children to college. This gross inequity in our current tax structure
between millionaires and average Americans is just appalling. I urge
all my colleagues to vote for the Rangel Substitute and I appeal to the
Members on the other side of the aisle, that if you really care for
average Americans as you say you do, then the only sensible option you
have is to vote the Rangel Substitute. Extending tax relief for middle-
class Americans is an admirable goal, but creating irresponsible
legislation like H.R. 4275 is not.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mr. Simpson). All time for debate on the
amendment has expired.
Pursuant to House Resolution 637, the previous question is ordered on
the bill and on the amendment offered by the gentleman from Tennessee
(Mr. Tanner).
The question is on the amendment in the nature of a substitute
offered by the gentleman from Tennessee (Mr. Tanner).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. TANNER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 190,
nays 227, not voting 16, as follows:

[Roll No. 169]

YEAS--190

Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Case
Clay
Clyburn
Conyers
Cooper
Costello
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley (CA)
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Ford
Frank (MA)
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Grijalva
Gutierrez
Harman
Hastings (FL)
Hefley
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lipinski
Lofgren
Lowey
Lucas (KY)
Lynch
Maloney
Markey
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Moore
Moran (VA)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Schakowsky
Schiff
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn

NAYS--227

Aderholt
Akin
Alexander
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Carson (OK)
Carter
Castle
Chabot
Chandler
Chocola
Coble
Cole
Collins
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
DeLay
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hensarling
Herger
Hobson
Hoekstra
Hooley (OR)
Hostettler
Houghton
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Kanjorski
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
Marshall
Matheson
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Mollohan
Moran (KS)
Murphy
Murtha
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Sandlin
Saxton
Schrock
Sensenbrenner
Sessions
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Upton
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (FL)

[[Page H2949]]

NOT VOTING--16

Blunt
Capito
Deal (GA)
DeMint
Filner
Goss
Hulshof
Israel
Lewis (GA)
Majette
Quinn
Reyes
Scott (GA)
Shadegg
Tauzin
Young (AK)

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are
advised that 2 minutes remain in this vote.

{time} 1312

Mr. FARR and Mr. PAYNE changed their vote from ``nay'' to ``yea.''
So the amendment in the nature of a substitute was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. FILNER. Mr. Speaker, on rollcall No. 169, I was attending to
official business in my congressional district, and I missed the vote.
Had I been present, I would have voted ``aye.''
Stated against:
Mr. GOSS. Mr. Speaker, on rollcall No. 169, Tanner amendment in
nature of substitute, had I been present, I would have voted ``no.''
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

Recorded Vote

Mr. RYAN of Wisconsin. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage will be followed by a 5-minute vote on the
motion to instruct conferees on Senate Concurrent Resolution 95.
The vote was taken by electronic device, and there were--ayes 344,
noes 76, not voting 13, as follows:

[Roll No. 170]

AYES--344

Ackerman
Aderholt
Akin
Alexander
Allen
Baca
Bachus
Baird
Baker
Baldwin
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bell
Bereuter
Berkley
Berman
Biggert
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Boyd
Bradley (NH)
Brady (TX)
Brown (OH)
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Capuano
Cardin
Cardoza
Carson (OK)
Carter
Case
Castle
Chabot
Chandler
Chocola
Clay
Clyburn
Coble
Cole
Collins
Costello
Cox
Cramer
Crane
Crenshaw
Crowley
Cubin
Culberson
Cunningham
Davis (AL)
Davis (CA)
Davis (TN)
Davis, Jo Ann
Davis, Tom
DeFazio
Delahunt
DeLauro
DeLay
Deutsch
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Farr
Feeney
Ferguson
Flake
Foley
Forbes
Ford
Fossella
Franks (AZ)
Frelinghuysen
Frost
Gallegly
Garrett (NJ)
Gephardt
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall
Harman
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Honda
Hooley (OR)
Hostettler
Hunter
Hyde
Isakson
Issa
Istook
Jackson-Lee (TX)
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kildee
Kilpatrick
Kind
King (IA)
King (NY)
Kingston
Kirk
Kleczka
Kline
Knollenberg
Kolbe
LaHood
Lampson
Langevin
Lantos
Larson (CT)
Latham
LaTourette
Leach
Levin
Lewis (CA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Lynch
Maloney
Manzullo
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum
McCotter
McCrery
McHugh
McInnis
McIntyre
McKeon
McNulty
Meehan
Meek (FL)
Meeks (NY)
Mica
Michaud
Millender-McDonald
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Miller, George
Moore
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nadler
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Oxley
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Putnam
Radanovich
Rahall
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Royce
Rush
Ryan (OH)
Ryan (WI)
Ryun (KS)
Sabo
Sanders
Sandlin
Saxton
Schiff
Schrock
Sensenbrenner
Sessions
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Snyder
Souder
Spratt
Stearns
Strickland
Stupak
Sullivan
Sweeney
Tancredo
Tauscher
Taylor (NC)
Terry
Thomas
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Udall (CO)
Udall (NM)
Upton
Van Hollen
Vitter
Walden (OR)
Walsh
Wamp
Weiner
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Wynn
Young (AK)
Young (FL)

NOES--76

Abercrombie
Andrews
Ballance
Becerra
Berry
Blumenauer
Brady (PA)
Capps
Carson (IN)
Conyers
Cooper
Cummings
Davis (FL)
Davis (IL)
DeGette
Dicks
Dingell
Doggett
Doyle
Emanuel
Fattah
Frank (MA)
Grijalva
Hastings (FL)
Hill
Hinchey
Holt
Houghton
Hoyer
Inslee
Jackson (IL)
Jefferson
Kanjorski
Kucinich
Larsen (WA)
Lee
McCarthy (MO)
McDermott
McGovern
Menendez
Mollohan
Murtha
Napolitano
Neal (MA)
Pallone
Pascrell
Pastor
Payne
Pelosi
Rangel
Roybal-Allard
Ruppersberger
Sanchez, Linda T.
Sanchez, Loretta
Schakowsky
Scott (VA)
Serrano
Sherman
Smith (WA)
Solis
Stark
Stenholm
Tanner
Taylor (MS)
Thompson (CA)
Tierney
Towns
Turner (TX)
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Wexler
Woolsey

NOT VOTING--13

Deal (GA)
DeMint
Filner
Goss
Hulshof
Israel
Lewis (GA)
Majette
Quinn
Reyes
Scott (GA)
Shadegg
Tauzin

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are
advised that 2 minutes remain in this vote.

{time} 1330

Ms. WATERS, Ms. LINDA T. SANCHEZ of California, Ms. McCARTHY of
Missouri, and Mr. CUMMINGS changed their vote from ``aye'' to ``no.''
Mr. RUSH and Mr. WELLER changed their vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. GOSS. Mr. Speaker, on rollcall No. 170, final passage of H.R.
4275, had I been present, I would have voted ``aye.''
Mr. FILNER. Mr. Speaker, on rollcall No. 170, I was attending to
official business in my congressional district, and I missed the vote.
Had I been present, I would have voted ``aye.''

____________________