[Congressional Record Volume 152, Number 56 (Wednesday, May 10, 2006)]
[House]
[Pages H2354-H2360]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WAIVING POINTS OF ORDER AGAINST CONFERENCE REPORT ON H.R. 4297, TAX
INCREASE PREVENTION AND RECONCILIATION ACT OF 2005
Mr. HASTINGS of Washington. Mr. Speaker, by direction of the
Committee on Rules, I call up House Resolution 805 and ask for its
immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 805
Resolved, That upon adoption of this resolution it shall
be in order to consider the conference report to accompany
the bill (H.R. 4297) to provide for reconciliation pursuant
to section 201(b) of the concurrent resolution on the budget
for fiscal year 2006. All points of order against the
conference report and against its consideration are waived.
The conference report shall be considered as read.
The SPEAKER pro tempore. The gentleman from Washington (Mr. Hastings)
is recognized for 1 hour.
Mr. HASTINGS of Washington. Mr. Speaker, for the purpose of debate
only, I yield the customary 30 minutes to the gentleman from Florida
(Mr. Hastings), pending which I yield myself such time as I may
consume. During consideration of this resolution, all time yielded is
for the purpose of debate only.
(Mr. HASTINGS of Washington asked and was given permission to revise
and extend his remarks.)
Mr. HASTINGS of Washington. Mr. Speaker, House Resolution 805 waives
all points of order against the conference report and against its
consideration. The resolution also provides that the conference report
shall be considered as read.
Mr. Speaker, in 2001, 2003 and 2004, Congress enacted responsible tax
relief to help create jobs, grow America's economy and allow workers,
families and small businesses to keep more of their hard-earned money
to save, invest and spend for their future. I believe individuals and
families are best able to make these decisions, not the Federal
Government.
These tax relief policies are clearly working, Mr. Speaker. Over the
last 5 years, tax relief has helped spur economic and job growth. The
economy has expanded for 18 consecutive quarters, reaching 4.8 percent
growth in the first quarter of this year alone, and the forecast for
continued growth is positive.
Since enacting tax relief, national unemployment has dropped over a
full
[[Page H2355]]
percentage point and is now down to 4.7 percent which is lower, Mr.
Speaker, than the average of the 1960s, the 1970s, the 1980s and the
1990s. We have experienced 31 consecutive months of job growth, and
during that time more than 5 million new jobs have been created.
The Department of the Treasury reported that Federal revenues for
fiscal year 2005 totaled $2.15 trillion, the highest level ever; and
the increase is 15 percent over last year, which amounts to over $320
billion this year alone. Homeownership is at nearly 70 percent, and the
stock market is soaring. Yesterday, the Dow Jones Industrial Average
surged within 85 points of its record high, which was reached in
January of 2000. A new all-time high could happen any day now.
It is clear that encouraging investment leads to significant job
growth which leads to a more prosperous America for America's working
families.
The Tax Increase Prevention and Reconciliation conference report
before us today protects families, small businesses and investors from
tax increases and provides taxpayers with additional certainty. This
certainty is vital to continued economic growth.
I would like to take this opportunity, Mr. Speaker, to highlight a
few provisions in the conference report that allow small businesses to
grow and hire more workers, encourage investment by extending capital
gains and dividend income tax relief, and continued relief for millions
of middle-income taxpayers from the alternative minimum tax.
Mr. Speaker, small businesses are the backbone of our economy,
employing over half of all private sector employees, paying 45 percent
of total U.S. private payroll, and generating 60 to 80 percent of net
new jobs annually over the last decade.
In 2003, Congress allowed small businesses to keep more of their
money through enhanced business expensing. It is vital that we extend
tax relief to small business in order for them to grow and hire more
workers. This conference report provides small businesses that tax
relief.
The alternative minimum tax was originally enacted to ensure that all
taxpayers, especially high-income taxpayers pay at least a minimum
amount of Federal taxes. However, the alternative minimum tax is not
indexed for inflation, and more and more middle-class families are
adversely affected by this tax.
In 2001, 1.8 million taxpayers were subject to the alternative
minimum tax. And it is estimated, over the next 5 years, 33 million, or
one-third of all taxpayers, will be subject to this tax.
This conference report will extend the alternative minimum tax
exemption levels through the end of 2006 and at a higher level than
2005. It also will allow taxpayers to claim nonrefundable personal tax
credits such as dependent care credit, the credit for the elderly and
disabled, and the credit for interest on certain home mortgages against
the alternative minimum tax. This will help families continue to
receive the full benefit of these tax credits.
This conference report extends reduced tax rates on capital gains and
dividend income for an additional 2 years. This extension will continue
to encourage investment by lowering the tax burden of 24 million
families, including 7 million seniors who depend on dividend income to
pay their bills.
{time} 1130
Mr. Speaker, the Tax Increase Prevention and Reconciliation Act
Conference Report before us today is part of a commitment we made to
taxpayers last year when Congress passed a responsible budget that
called for spending restraint, slowing the currently unsustainable
growth of automatic spending programs and extending tax relief to
families and small businesses.
However, let me be clear that this conference report is not our final
commitment to taxpayers. Last year, the House and Senate approved
extending additional tax provisions that are not part of this
conference report, including State sales tax deductibility for those
States that do not have an income tax.
I look forward to working with my colleagues to quickly bring a bill
to the floor that will extend this important provision as well as
others that have expired, such as tax incentives to enhance
affordability of higher education and spur innovation in our country
through research and development.
Mr. Speaker, I urge my colleagues to support House Resolution 805 and
the underlying conference report.
Mr. Speaker, I reserve the balance of my time.
Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I
may consume, and I thank my good friend and namesake from the State of
Washington for yielding me the time.
Mr. Speaker, I rise in strong opposition to this closed rule and the
underlying legislation. At the outset, Mr. Speaker, let me just say
that I truly do not question the motives of my Republican colleagues
who genuinely believe, in my judgment, that the legislation they might
pass later today will make for good public policy. I do not impugn
their motives or question their determination regarding this issue, but
I do quite frankly question their fiscal sanity.
It is my belief that cutting taxes to the tune of $70 billion at a
time of war and staggering human needs is, well, just financially crazy
for a governmental body.
Last week, we debated port security on the floor of this House, and I
heard many of my Republican colleagues say that we did not have the
money to inspect all incoming containers. Well, here apparently is some
extra money for that purpose.
We hear almost daily from the President that the so-called war on
terrorism costs a lot of money. In fact, we face emergency spending
bills on a near monthly basis in this place. Maybe instead of having
the Chinese bankroll us until they call in their chips we should use
some of the $70 billion that we are prepared now to give to the
wealthiest Americans.
Today's headlines in all three of the biggest papers in south Florida
that is represented by Republicans and Democrats, half and half alike,
those papers announced the need for more Federal dollars, not a
curtailing of services which this bill will ultimately mandate.
The Miami Herald front page says, ``Miami Dade 911 System
Experiencing Difficulties.'' Maybe they could use a few of these $70
billion to help upgrade critical emergency communications in the
Nation's eighth largest county.
Mr. DREIER. Mr. Speaker, will the gentleman yield?
Mr. HASTINGS of Florida. I yield to the gentleman from California.
Mr. DREIER. Mr. Speaker, I thank my friend for yielding and, Mr.
Speaker, I think my friend makes an extraordinarily good and important
point about the need to ensure that we have the resources that are
necessary to fight the global war on terror and to make sure that we
are able to meet all of these pressing demands that are there.
The point that I think needs to be made here, and I am going to make
it in my remarks in just a few minutes, but when the gentleman was
talking about it, it led me to come to my feet.
We have seen a surge in revenues to the Federal Treasury in the areas
that we are talking about here, in the area of both capital gains and
in dividends with that reduction that has taken place, and I know
conventional wisdom in the earliest part of this decade was that if we
cut taxes we would see a diminution in that flow of revenues, but
between 2002 and 2004 we have seen a 79 percent increase in the flow of
revenues to the Treasury because of the capital gains cut and a 35
percent increase because of the dividend cut.
So I think, though, my friend makes an excellent point about the need
to make sure we reduce the deficit and have the resources to meet the
pressing needs in the global war on terror and all, but the best way to
do that is to keep the economy growing, and that is exactly what this
package is doing.
I thank my friend for yielding.
Mr. HASTINGS of Florida. Mr. Speaker, I would respond to the chairman
simply by saying that you ignore the fact that the deficits are sky
high in this surge of revenue of which you speak, and the needs, I
might add, of those that are most vulnerable in our society have not
been reduced. The poor and the near poor are feeling the effects of us,
and what we are really
[[Page H2356]]
doing is we are taking care of the wealthiest people in our society. As
a matter of fact, we fall in that category. Those of us that make
$165,000 a year here, we are getting the benefit, and the people at the
bottom that we are going to cut the services to are getting hurt.
Mr. DREIER. Mr. Speaker, if the gentleman will further yield, just to
take each of the points my friend has mentioned, and I thank him for
yielding to me on this.
First, if you look at this issue of the deficit, I do not know if my
friend is aware of the fact that we last month saw a monthly budget
surplus in the months of December and January, we actually saw a
monthly budget surplus, more money coming in than was going out for
that month. That is even though we have to deal with the war on terror,
the war in Iraq, because of Hurricane Katrina and those very important
needs which my friend has addressed so well.
Obviously, meeting the needs of those who are less fortunate is
something that is important. I would argue that those in the upper
income brackets are paying more, and it is not just my argument. It is
actually the facts, and this was pointed out in an op-ed piece the
other day.
Americans who are earning in excess of $200,000 a year saw nearly
twice, actually more than twice, the amount in tax payments than all
other Americans earning less than that, meaning that their payments to
the Federal Government, even though they got this tax cut, they were
paying more in taxes because of the economic growth that we have seen.
Actually, it was nearly 20 percent, and so what has happened is the
rich are paying more in tax payments to the Federal Government, and so
they are not the great beneficiary of this.
Yes, they are encouraging more investment, but we have seen an
increase in the Federal revenues.
Mr. HASTINGS of Florida. Mr. Speaker, reclaiming my time, I have been
very generous in yielding, and I hope at some point in the future you
will do likewise.
Mr. DREIER. Absolutely.
Mr. HASTINGS of Florida. Mr. Speaker, I hear you, but what you ignore
is the fact that when President Bush took office we had a surplus in
this Nation and now we have deficits. I mean, we cannot keep swiping
the Chinese, Japanese, Saudi Arabian card to pay for the war. You
cannot have guns and butter, and I think we have proved that more times
than one in this Nation.
Insofar as your argument about the wealthiest paying more taxes, let
me just give you today's Washington Post and the analysis that they put
forward and just use as a ``for example'' someone making $40,000 to
$50,000. Their average tax savings under this particular measure will
be $46. That amounts to just a little bit more than a tank of gas if
you ain't driving an SUV, but someone who makes $500,000 to $1 million
gets $41,000. The persons, Jane Lunch Bucket and Joe Lunch Bucket, who
are in the category of $20,000 to $30,000 get $9. They cannot even buy
3 gallons of gasoline.
The Palm Beach Post front page reads today, ``Farm Workers Still
Waiting on FEMA Aid,'' and I know that all too well from the calls in
my office every day. So maybe some of my constituents in Bell Glade and
Pahokee and Clewiston and South Bay and Canal Point might like to see a
slice of this $70 billion kickback we are giving to the most well off
in this country.
In the South Florida Sun-Sentinel, a large newspaper where Clay Shaw
and Debbie Wasserman Schultz and I represent that area, are reports on
a theft at a homeless shelter which led to $3,000 worth of spoiled
food. So while we give roughly $42,000 tax cuts for those in the
country making more than $1 million, a footnote right there: People
making $1 million have not been flooding our offices with calls saying
give me some more money. They are willing to share. But what we have
gotten into is an argument here that seems to make it sound like we do
not like rich people. All of us wish we were rich people, but what we
are saying is that rich people have the same responsibility as all of
us do in sharing and caring about the least of us in this society.
People in south Florida and throughout this country are going to go
hungry tonight while we go about our business here allegedly fixing
their problem.
My Republican friends have and will continue to argue all today that
these irresponsible tax cuts establish a strong economy and are
necessary to continue this myth of growth. That is just plain old
hocus-pocus, and the money that you talk about is funny money, phony
money, because the deficit absorbs it any way you look at it
economically.
Mr. Speaker, I beg to differ. Facts can be stubborn things, but I
think we ought to discuss them anyway. Since this President began to
work with this rubber-stamp Congress, 1 million more Americans are
unemployed today than there were in January 2001.
Last night, I said to the chairman, if this economy is so good, why
is it I feel so broke, and I make $165,000 a year, like every other
Member of the House of Representatives, and am barely able to have
minimum discretionary income.
5.4 million more Americans live in poverty today than they did 6
years ago, and 6 million more Americans are without health insurance.
Some 45 million Americans in all are uninsured.
And these are things we should be proud of? These are signs of a
strong economy? Where is the shame? Better yet, where is the decency to
those that are the least among us in this society?
How dare we absorb resources to our wealthy selves and cut spending
when people here and all over the world expect better of the United
States of America.
Some of the same money could be used to take care of the impoverished
conditions and the significant number of people that have been pushed
into lower than middle class or you could argue intent to eliminate the
middle class in this country.
Mr. Speaker, I recognize that others want to speak on this critical
issue so I will not go on longer right now. I think, however, that the
distinguished Senator in the other body, Ms. Snowe from Maine, summed
it up perfectly yesterday when criticizing this bill. After reflecting
on the fact that the preponderance of the benefits of this bill go to
upper income people, Senator Snowe said simply, ``It's a question of
priorities.''
Indeed, it is, Mr. Speaker. We should prioritize those Americans who
have the greatest needs, not those who have the greatest wealth, and
when I hear the rest of what my colleagues are going to say, they are
going to say all the things we are going to do before we get out of
here and go have our death grip fight in November about we are going to
fix it for the poor. In the meantime, some more poor just got poorer
and some more rich just got richer.
Mr. Speaker, I reserve the balance of my time,
Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield as
much time as he may consume to the gentleman from California (Mr.
Dreier), the distinguished chairman of the Rules Committee.
(Mr. DREIER asked and was given permission to revise and extend his
remarks.)
Mr. DREIER. Mr. Speaker, I have to say that my friend in his opening
remarks said that he did not question our motives, and I appreciate the
fact he did not question our motives. He basically said he thought we
were insane. He questioned our sanity. I understand that means slightly
insane, but the fact is my friends on the other side of the aisle, Mr.
Speaker, appear to be fearless in the face of the facts because the
facts clearly are that no matter how you try to obfuscate it we are
enjoying tremendous economic growth because of the tax cuts.
I am a proud Republican. I am a proud Republican, and by virtue of
being a Republican I was born to cut taxes. I am proud of the fact that
I was born to cut taxes because I believe that not only should people
be able to keep more of their own hard-earned money, but I believe that
cutting taxes is what generates the kind of economic growth that will
allow us to deal with the extraordinarily pressing problems that my
friend from Fort Lauderdale mentioned.
{time} 1145
It is clear we want to do everything we can to help the underclass,
the poor,
[[Page H2357]]
those struggling to get onto the first rung of the economic ladder.
There is no doubt about that. I do not believe we do anything at all to
help those who are struggling by trying to penalize the job creators.
The founder of my party, Abraham Lincoln, said it best, although I
guess he didn't actually say it, but he is always credited with saying
that you can't pull up the wage earner by pulling down the wage payer.
So the standard old argument of class warfare, us versus them, is a
tired, worn and failed argument. I believe we need to do everything we
can to again look at the facts. The facts are that the first quarter of
this year saw a 4.8 percent gross domestic product growth. Virtually
unprecedented, very strong, bold, dynamic growth. We are going to see
the Federal Reserve have a 250 basis point increase in interest rates.
Why? Because they are making sure we do not go into inflation. I am not
a proponent of seeing the 16th consecutive increase in rates, but the
fact is we do have a growing economy.
As we look at those who are struggling to get onto the first rung of
the economic ladder, it is very important to note that they are
individuals who frankly are enjoying a higher standard of living than
has been the case in the past.
Last night in the Rules Committee, Mr. Hastings and I engaged in a
discussion on homeownership and the savings rate. We know it is
regularly discussed that Americans are not huge savers. We do not have
as high a savings rate as some other countries do, but when you look at
the level of homeownership in this country, the highest level of
minority homeownership that this Nation has ever seen, in excess of 50
percent of those in the minority community own their homes. On a
nationwide basis, it is nearly 70 percent of the American people own
their own homes. That is forced savings. As people pay down their
mortgages, they are seeing their asset, their savings increased.
Obviously as we see the increase in value of property, we are also
seeing those savings increased. So that is taking place today.
And to the argument, Mr. Speaker, of this lack of revenues to the
Treasury, as I said to my friend just a few minutes ago, during the
month of April we actually saw a budget surplus. We saw a budget
surplus for the month of April that has come about because of the
economic growth that was put into place through these tax cuts.
Now we want to encourage investment. We hear Republicans and
Democrats alike talk about the need to encourage investment. Frankly,
one of the reasons that this measure is so critically important is that
we look at the problem of uncertainty out there.
The reduction of the rate on capital gains and dividends to 15
percent is, if we do nothing, set to expire in 2008. What does that
mean? It means there will be a tax increase that clearly will slow the
economy if we do nothing. So what is it that we have found by making
sure that we keep that rate low and extending it for at least 2 years?
I and a majority of this House would like to make it permanent.
Unfortunately, because of rules in the other body, we have not been
able to make it permanent. But we need to make it permanent and at
least extend it for these 2 years. Why? So the job creators out there
can plan and save for the future, so they can make long-term
investments that will create more jobs and opportunities for the
American worker.
Mr. Speaker, if you look at what has happened, again we have seen an
increase in the flow of revenues to the Treasury because of what it is
that we have done here.
My friend raised concern about middle income Americans. That is one
of the reasons that we addressed the so-called alternative minimum tax.
The alternative minimum tax, because it was not indexed, is a tax that
has not just hit the rich, but has hit middle income wage earners. That
is exactly why we will be providing relief to millions and millions of
middle income workers in this country with the AMT provisions included
in this bill.
I think it is also important for us to note that there are some real
specifics we can point to that we have seen by virtue of these tax cuts
that were put into place.
In the early part of this decade, time and time again we heard our
friends on the other side of the aisle say if you cut taxes the economy
is going to go right into the tank and we will see the deficit go sky
high when in fact the opposite has been the case in both instances.
Between 2002 and 2004 we were able to see a 79 percent increase.
Mr. HASTINGS of Florida. Mr. Speaker, will the gentleman yield?
Mr. DREIER. I yield to the gentleman from Florida.
Mr. HASTINGS of Florida. When you speak of the middle class, what is
the income of the middle class?
Mr. DREIER. The income of the middle class, that is people earning
$40,000 to $70,000 a year.
Mr. HASTINGS of Florida. If the chairman will continue to yield, in
the calculations under the AMT as he proposes they will get between $9
and $14. That person in the middle class, how in the world is that
helping them?
Mr. DREIER. Mr. Speaker, I thank the gentleman for his question. It
is very clear that we are providing relief to middle income wage
earners who would get no relief at all under the AMT provisions that
our colleagues were very supportive of putting into effect in the past.
We are providing relief because we are seeing their standard of
living increase. Obviously we have a lot of problems. Gasoline prices,
we want to do everything we can to help us attain self-sufficiency by
increasing refinery capacity, dealing with boutique fuels and other
problems that are out there. But we have seen the standard of living
for the American people improve dramatically because of these tax cuts.
As I was saying, we have seen a 79 percent increase in the flow of
revenues to the Federal Treasury between 2002 and 2004 because of
reducing that top rate on capital gains to 15 percent. Similarly, from
the dividend tax relief we have seen a 35 percent increase.
Again, I would harken back to the arguments that were made in the
early part of this decade when President Bush came forward and this
Republican supported the notion of reducing taxes to increase economic
growth, and the argument that was made was it would ruin us.
We know we have tremendous costs out there. We have costs like
dealing with the war, and thank God we are seeing this week under Mr.
Malicki's government a new cabinet go into place in Iraq. We are seeing
progress there.
Similarly, if you look at the fact that we have tremendous costs
related to Hurricane Katrina, unanticipated. We do have
responsibilities there. And yes, as my friend from Fort Lauderdale
said, it is essential that we do all we can to provide assistance to
those who are truly in need and to help them get onto the economic
ladder. That is why when you have a 4.7 percent unemployment rate,
virtually full employment in this country, we are doing all that we can
to find more opportunities, and that is what this measure is all about,
and generating the kind of growth that will allow us to have the
resources to meet these very pressing needs is essential as well.
If you don't vote for this bill, you are voting for a tax increase,
you are voting for a tax increase on those middle income wage earners
who are getting relief from AMT and on the job creators out there who
are successful.
So I believe we have a win/win. I hope very much we will see
Democrats join with Republicans to keep our economy growing, help us
meet the pressing needs that are out there, and make sure we can have
the kind of success for which the United States of America is known.
Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I
may consume and remind the chairman just one thing: I think everybody
in America knows the difference between $9 and $42,000, and under the
AMT provision, persons making $40,000-$50,000 get $9. Under the AMT
provisions, people making between $500,000 and $1 million get $42,000.
That is not rocket science. That is real money that is not going to
middle class people.
Mr. Speaker, I yield 5 minutes to the gentlewoman from New York (Ms.
Slaughter), the ranking member of the Rules Committee, who can talk
about industrial circumstances in her district.
Ms. SLAUGHTER. Mr. Speaker, let me first say something about the
rising standard of living in America. We have
[[Page H2358]]
lost over a million manufacturing jobs that were paying good wages with
good futures, and many people employed in those jobs, lucky enough to
find a second job, found on average they are making $9,000 less a year,
plus little or no benefits.
There is no way in the world that can ever translate out to other
than a falling of the standard of living in America. Sure, it is better
for the guy who retired from Exxon with $400 million, but we are not in
that class in Rochester.
Mr. Speaker, leadership is about choices. When this Republican
leadership allows a bill to be debated on this House floor, they are in
effect telling the American people that this is the most important
challenge we face in America today. Why? Because they have chosen this
over everything else.
I can tell you with certainty that if Democrats controlled the agenda
in the House we would make different choices. Instead of passing yet
another tax cut bill that benefits millionaires, billionaires and giant
corporations, Democrats would be voting to raise the minimum wage. We
would be leading the way to fix our broken health care system, or
creating a comprehensive, consumer friendly energy policy.
Today, Democrats would be passing legislation that would ensure a
degree of accountability, transparency, integrity and competence in
this government, all of which have been missing far too long.
But today, for this leadership, none of these issues which affect the
lives of hardworking Americans are as important as providing even more
tax cuts for the super-rich, and indeed their record of failure on each
of these items I have mentioned is a telling indicator of where their
priorities really lie.
There is a widely used saying in the business world that I think is
particularly salient this morning. It says the definition of insanity
is doing the same thing over and over again and each time expecting a
different result.
We have been down this road before and all one needs to do is look
around to see exactly where it has taken us. For years this leadership
has passed bills that have raised our deficits and increased our
staggering debt. And while they give away big tax breaks for the
wealthiest corporations in the world and provide more obscene tax
relief for the wealthiest 1 percent of Americans, and the rest of
America gets left behind holding the check, my friends on the other
side will no doubt tell you that this will provide needed tax cuts for
the working class and middle class, too. Isn't that what they always
say?
But the facts, as usual, tell us a different story. Under this
legislation the middle income households receive an average cut of $20,
which is less than half a tank of gas.
According to the Brookings Institute which gives figures we use very
often here, while 0.02 percent of the households, those with incomes
over a million, would receive an average tax cut of $42,000, the bill
represents a classic example of what economists call trickle-down
economics. By cutting capital gains and dividend taxes and reducing the
revenue that the Federal Government receives and redirecting it to the
coffers of big business and the super-wealthy, the majority tells us
they are going to spur investment and create more jobs.
They told us the same thing in the 1980s, too, and it didn't work.
Instead of investing that money in our economy, corporations and the
super-rich sent our tax dollars overseas, along with our jobs. We ended
up with out-of-control deficits and the largest debt in American
history, superseded only by the debt we have today.
Ironically, the very man who originally labeled trickle-down theory
as ``voodoo economics,'' our current President's father, lost his own
Presidency because of the stagnating economy and staggering debt that
became the legacy of trickle-down economics in the 1980s.
So why would they be proposing that failed policy once again? Today's
Washington Post may have the answer. It described what has truly
befallen this majority: a ``bankruptcy of ideas.''
With Republicans, it is the same story again and again no matter the
results. What they have given us, Mr. Speaker, is a commitment to a
legacy of failure. The only difference is today the American people's
eyes are wide open.
Mr. HASTINGS of Washington. Mr. Speaker, I yield such time as he may
consume to the gentleman from California (Mr. Dreier), the chairman of
the Rules Committee.
Mr. DREIER. Mr. Speaker, my friend from Pasco understands this very
well, and he has done a great job of providing leadership on these
economic growth issues.
Mr. Speaker, my friend from Rochester and my friend from Fort
Lauderdale are two people for whom I have the highest regard. I really
do. I enjoy working with them on the Rules Committee, and I just had
the thrill of participating in the Canada-U.S. Interparliamentary
Conference with my friend from Rochester, dealing with areas of concern
as it relates to our neighbor to the north.
But I have to say, as I listen to the arguments that are being
propounded by both of my friends from the other side of the aisle, they
represent little more than what I describe as the ideological baggage
of the past.
{time} 1200
Now, my friend from Rochester has just talked about the 1980s. It is
true that we saw a tremendous increase in spending during the 1980s, a
lot of increased spending in the area of national defense. And we saw
the demise of the Soviet Union. The Cold War came to an end.
During the 1980s, Mr. Speaker, because of the 1981 Economic Recovery
Tax Act, I think I am the only Member on the floor now who was here at
that time, and I am very proud to have voted for that. We put into
place across-the-board tax rate reductions, marginal rate reductions.
And Mr. Speaker, what happened? We saw a doubling of the flow of
revenues to the Federal Treasury during the 1980s.
People continue to try and rewrite the history of the 1980s, somehow
implying that we saw the U.S. economy go right into the tank. We saw a
surge in economic growth and a doubling in that flow of revenues to the
Treasury. And so I think that this notion of class warfare, us versus
them, is a tired, old, failed one.
Now, my friend just referred to the tax reduction that an American
who is earning $40,000 will get juxtaposed to someone who is earning
hundreds of thousands of dollars a year, who will get a $41,000 tax
reduction. And he referred to the fact that someone will earn $40,000
and get a very small tax cut, and that person in the upper bracket will
get a $41,000 tax cut.
I mean, I would ask my friend, does he advocate that the person
earning $40,000 a year get a $41,000 tax cut?
Mr. HASTINGS of Florida. Mr. Speaker, will the gentleman yield?
Mr. DREIER. I yield to the gentleman from Florida.
Mr. HASTINGS of Florida. Absolutely not.
Mr. DREIER. The point that I am making, Mr. Speaker, is the fact that
if you look at someone who is paying taxes, you look at what their tax
liability is, and again I get to the point that we raise that we have
seen the American people who are earning in excess of $200,000 a year,
Mr. Speaker, having a tax payment to the Federal Treasury that is twice
that of all other taxpayers, twice that of all other taxpayers, the
rate of growth of that.
And so I think that we need to realize it is the job creators who pay
taxes and it is the job creators who, with tax relief, will be able to
create more opportunity in this country to make sure that those who are
less fortunate, those about whom my friend from Ft. Lauderdale and I
are concerned.
And to somehow imply that there is not concern on this side of the
aisle for those who are trying to have opportunity in this country is a
preposterous argument. We care even more, I would argue, because we are
the ones who are guaranteeing everything possible to provide them with
opportunity will be met.
And so I say, Mr. Speaker, that we are in a position where this
measure is going to allow investors to plan and save. It will provide a
little certainty. And we need to remember that more than half of the
American people, 91 million Americans, are today members of the
investment class. One of the things we need to note is that many people
who are earning $40-, $50-,
[[Page H2359]]
$60,000 a year, in fact, the income for the median shareholder in this
country is $65,000 a year, not considered to be very rich, but they
will be the beneficiaries of keeping this capital gains rate and the
dividend rate at 15 percent.
And so that is why, Mr. Speaker, I believe that this is a measure
which is going to be beneficial all the way across the board.
Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I
may consume, in large measure to respond to the distinguished chairman
from California, who is my friend.
The arguments that Chairman Dreier makes, among other things, are
that Ms. Slaughter's and my arguments are tired in the sense that from
an ideological point of view, we somehow or another don't understand
the dynamics of wage payers providing for wage earners.
Mr. Speaker, we don't have the time to go into every nuance of
persons who make a lot of money. But a lot of people that make a lot of
money that are going to benefit from this tax don't hire anybody
because they don't own any businesses. They have been legatees. Some of
them were born rich, and all they have ever had to do is invest. But
some people were born poor and have never had an opportunity to get out
of that.
In essence, I believe that most Americans are willing to share.
Evidence the fact that until very recently, we have been the greatest
givers to charity, not the government, but individuals, and that is
small and large contributors to charity. We know that there are great
moral standards in this country, and among them is the fact that we, as
a community, care about each other.
But you cannot convince me that you have been good economic stewards
of the revenue that has come into this country. And, Mr. Chairman, you
can't have it both ways.
If, as some would argue, the distinguished late President Ronald
Reagan's economic policies were successful, and they were successful,
those, in part, would argue because of a reduction in taxes, and at
that particular time, you argue everything that happened, and you
somehow skip over the success of the 1990s, I question whether or not
you are mindful that during that period of time taxes were increased.
I was here, you were here when Marjorie Margolis Mezvinsky walked
down this aisle in tears and cast her vote and didn't come back here.
But the economy in this country took off, and we had a dynamic surplus
when Bill Clinton went out of office.
Now, I don't know how you account for the trickle down of Ronald
Reagan and then the fact that there was the gap that you don't allow
for. But I am asking you to, at the very least, allow for the success
during the Clinton administration that nobody can deny. And you can't
deny that when you came into power with this President, we had a
surplus, and today we have deficits as far as the eye can see.
The American public will eventually understand that we are going to
pay for this stuff. And you know where President Bush is going to be?
He is going to be back at his ranch. He is going to be doing good
things for America as a civilian in 2009 when the baby boomers hit and
all of this stuff hits the fan.
Just one more thing. This chart reflects, and I ask you to refute it
if you can, Mr. Chairman, that income in dollars, 2005, the average tax
saving for people making 10,000 to 20,000 is $2; 20,000 to 30,000, $9;
30,000 to 40,000, $16; 40,000 to 50,000, $46; 75,000 to 100,000; $403.
100,000 to 200,000, $1,388; $1 million, $41,977.
Now, millionaires have a right to have all the money that they can.
But if you ask them, I believe that they want to share it with the
poor. I believe they want to see that other 50 percent who do not have
affordable housing have affordable housing. I think they want to help
to cure the problems of AIDS. I don't think that they want to see
people pushed out into the streets in nursing homes. I don't think that
they want to see the suffering that is going on in the insufferable
triumvirate of inadequate jobs, inadequate education and inadequate
housing.
There may be this big boom on Wall Street, but on Main Street, there
is hell to pay.
Mr. DREIER. Mr. Speaker, will the gentleman yield?
Mr. HASTINGS of Florida. I yield to the gentleman from California.
Mr. DREIER. I thank my friend for yielding. And my friend has made
several very important points, Mr. Speaker. And let me just go back to
his earlier argument about the Clinton years.
The gentleman is absolutely right. We saw a surge in economic growth
during the Clinton Presidency. It was economic growth that actually
began before he became President. Virtually every economist has
acknowledged that economic growth.
Mr. HASTINGS of Florida. Reclaiming my time to ask a question. Are
you saying that those tax cuts didn't help this country?
Mr. DREIER. The tax cuts, yes. The tax increases did not help the
country.
Mr. HASTINGS of Florida. And are you saying that those tax increases
that you voted against and I voted for did not cause this economy to
boom?
If we use that argument, my mom used to say something to me that was
really interesting. She said, All you all do is go up there and say
that the other people did it if it is bad, and if it is good, you did
it.
If you use the doctrine of relating back, then if Bush didn't cause
the deficit and Clinton didn't cause the surplus, and former President
Bush didn't cause anything, and Reagan caused the economy to take off,
by that standard, George Washington did it. My goodness gracious, man.
The 1990s were real.
Mr. DREIER. If the gentleman would yield, I was just building my
argument to talk about the great policies of President Clinton.
Mr. HASTINGS of Florida. I yield to the chairman.
Mr. DREIER. I thank my friend for yielding.
And, Mr. Speaker, what I was arguing is the fact that the economic
growth that we saw during the 1990s began before Bill Clinton became
President. Virtually every economist has acknowledged that.
Now, in 1993, we saw the largest tax increase at that time in our
Nation's history. It was put into place, and I voted against it. I
said, I am a Republican and I was born to cut taxes. I am proud of the
fact that I voted against that tax increase.
I will never forget, late one night, Bill Clinton, in giving a speech
to business leaders in Houston, Texas, said that he believed that that
tax increase in 1993 was too much. He said he raised taxes too much. He
later regretted that. He said that his mother told him he shouldn't,
when he was tired, give a speech like that.
But the fact is I believe the truth came out in that speech that he
delivered in 1994. I don't remember exactly when it was. But the tax
increase went into effect in 1993.
Then we need to look at what happened in the 1990s. A year after the
largest tax increase was put into place by President Clinton, what
happened? For the first time in four decades the body that, according
to article I, section 7, of the U.S. Constitution has the
responsibility for taxing and spending changed hands. And what
happened? In 1994, we won our majority, 12 years ago. And we
immediately began our quest to cut taxes.
Mr. HASTINGS of Florida. Reclaiming my time, Mr. Chairman.
Mr. DREIER. It was a joint effort with President Clinton is what I am
saying.
Mr. HASTINGS of Florida. A joint effort speaking well for divided
government, and the precursor to what is coming in November when
doubtless we have divided government again.
Mr. DREIER. God forbid.
Mr. HASTINGS of Florida. And we have secured the deficit that you
created, or maybe it was George Washington.
Mr. Speaker, I yield back the balance of my time.
Mr. HASTINGS of Washington. Mr. Speaker, this has been an absolutely
fascinating exchange between my friend from Florida and the
distinguished chairman of the Rules Committee, and I have been enjoying
it. This is exactly, I think, what our Founders thought the House
should be is a time to debate great ideas and come to conclusions and
so forth.
Let me make a few points here that were made and just kind of,
hopefully, put things into perspective.
I think this rule that will support the underlying bill is a very
good rule. I
[[Page H2360]]
think the underlying bill is a very good rule.
My friend from Florida talked several times about the deficit. I am
concerned about the deficit too. But I think you have to put this into
some sort of a historical perspective. Right after the war, Second
World War, the percentage of the deficit as it related to GDP was
extremely high. I think it was well in excess of 10 or maybe even 15
percent.
This year, according to CBO, the deficit as a percentage of GDP is
2.6 percent. To put that into perspective, during the 1980s it was in
excess of 5 percent before the economy started to grow.
If we maintain this policy, and we certainly have a responsibility in
this body to control the spending, not only discretionary spending, but
mandatory spending, which we did last year in our budget resolution,
and which we want to do again this year with our budget resolution, if
we stay the course on that, the percentage of debt, as opposed to GDP,
will be down to less than 2 percent. I think that is a trend in the
right direction.
Mr. Speaker, I think this, as I mentioned, is a good rule. The
underlying bill is a good rule.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore (Mr. Conaway). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HASTINGS of Florida. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
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