[Congressional Record Volume 153, Number 17 (Monday, January 29, 2007)]
[House]
[Pages H968-H975]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE DEMOCRATIC MAJORITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Conaway) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. CONAWAY. Mr. Speaker, we come to the House tonight to talk about 
a variety of things, most of which we will deal with taxes and the 
impact those taxes have on good, hardworking men and women across this 
country.
  But I did want to respond just a little bit to what the previous 
speaker bragged about. She went through a long litany of good things 
that happened this weekend, which I certainly agree with everyone's 
right to do what they did and to express themselves and to come to this 
Capitol and make those statements.
  She did leave out one minor issue, though, and that is that some of 
the antiwar protestors brought spray paint with them. And they came to 
this Capitol, this hallowed ground, the center of liberty for the 
world, which looks to this Capitol building for that; and those folks 
brought spray paint, and they painted the walls. They spray painted 
anarchy signs and anarchy slogans on the walls of this Capitol, which I 
think defacing public property under any circumstance ought to be 
wrong. That is wrong.
  What else is wrong is the fact that the Capitol Hill Police were told 
to allow that conduct to go on. And there were reports in one of the 
scandal rags today that the police's reaction to that was that they 
were disgusted. They were livid about the fact that they were forced to 
allow these anarchists to deface this public property, this building, 
which all of us serve in. Most of us serve very proudly here.
  So not all of the folks who came this weekend conducted themselves 
the way that they should have, and there was a problem with that. And, 
hopefully, we will learn what the responsibility of the Democratic 
leadership was, what their role was in overriding what the Capitol Hill 
Police's natural and normal reaction would have been. Where did that 
come from and who told them not to stop that? We hope that we get some 
answers to those questions over the next coming days, because it is a 
serious issue when people are allowed to deface this building.
  But let us talk about taxes. As our sign shows here, we are 1,433 
days away from a staggeringly large tax increase. The first year I 
think it will be $250 billion of taxes. In 2011, we will get an 
immediate bump. The Democrats simply have to do nothing.
  In the 109th Congress, Lou Dobbs and others accused us of being a 
``do-nothing Congress.'' Well, you can put that label on the coming tax 
increase, because the Democrats simply have to do nothing over the next 
4 years, and that is exactly what is going to happen.
  Built into the current law, the current Tax Code has a drop-dead date 
of December 31, 2010, in which the changes made to the estate tax will 
expire and the other provisions of the 2001/2003 tax reductions will 
also expire. So if the Democrats do nothing, then we are 1,433 days 
away from that major increase. We are only 11 days since the last tax 
increase by the Democrats. And that was on Thursday a week or so ago 
where they increased taxes on the oil and gas business in this country, 
and we have talked about that some as well.

                              {time}  2015

  We are going to have several speakers tonight, and the first one that 
we are going to yield time to is my good colleague, John Sullivan from 
Oklahoma.
  Mr. SULLIVAN. Mr. Speaker, I would like to thank my friend from Texas 
for doing this tonight, and also my friend, Congressman Shuster from 
Pennsylvania. This is a very important topic, talking about tax relief 
for America's working families, for America's small business people.
  You know, we have seen a great economy recently. It is roaring along. 
Unemployment benefits are at an all-time low. You know, gross domestic 
product is up. We are seeing record numbers in our economy right now. 
That is due in small part, or in large part, because of the tax relief 
measures instituted by President Bush.
  I do not think, you know, tax relief is the only answer to a robust 
economy

[[Page H969]]

like we have right now, but it is certainly a piece of that puzzle. You 
know, other countries have used tax relief as an economic tool to get 
out of economic slow times. And America has done the same. It has been 
very important that we have done it.
  You mentioned too, Congressman Conaway, about the oil and gas tax. 
You know, oil and gas keeps this economy going. People do not realize, 
especially people from producing States how vital that is to our 
economy.
  There are so many byproducts from oil and gas. Taxing them is 
ridiculous. We need to spur domestic production here in the United 
States and become less reliant on foreign oil, not more reliant upon 
foreign oil.
  Taxing the people that produce that, which is really not only the 
large oil, Big Oil like the Democrats like to say, but small producers 
out there, independent producers, small mom and pop independent 
producers that produce 90 percent of the domestic oil and gas in this 
country. It is absolutely wrong.
  You know, people pay a lot in taxes. We pay too much in taxes. You 
know, government needs taxes for vital government services like the 
war, vital infrastructure needs. It is very have important that we have 
taxes for that. But I think that government has gotten too big, and we 
have taxed too much.
  If you think about it, if you look at your Federal tax, State tax, 
city tax, Congressman, we are taxed a lot. You get up in the morning, 
you take a shower, the alarm clock wakes you up, if it is an electric 
alarm clock, you pay taxes on electricity to get you up.
  If you take a shower, you pay taxes on the water, soap and shampoo. 
If you eat breakfast, you pay tax on the cereal you eat. You go to 
work, if you drive there, you pay the motor fuel tax, tire disposal 
fee, tag tax.
  You go to work, you have income tax or self-employment tax. You go 
home have dinner, taxed on that. And we are talking, Congressman 
Conaway, you can go home, kiss your wife, you are taxed on that too, 
that is not free either, you have got a marriage penalty tax too.
  So we pay a lot in taxes in this country. And, you know, the people 
that are counting on these things, if we allow the Democrats to raise 
taxes like they want to do, and in essence that is what they are doing 
if they do not continue these vital tax decreases, is they are hurting 
the American people, they are hurting small business.
  Now, 85 percent of the people that work in this economy right now are 
employed or work or own a small to medium-sized business. And those 
people, one of the things they talk about is providing health insurance 
to their employees, and they have been able to do it because of the tax 
relief, the money that they have saved because of that.
  And if their taxes go up, they are not only going to have to probably 
lay some people off, but they are not going to be able to provide the 
kind of health insurance that they want to provide for their employees. 
They have to make tough decisions right now, and it is wrong.
  I remember Congressman Shuster and I, we were in the back of the 
Chamber when we were first elected, and the Democrats were talking 
about tax cuts. And they said, Bill and I heard them say that some of 
them were in a group and they said, if we allow people to keep that 
money, they might not spend it the right way.
  Who are they to say that? It is their money. I mean, it is your 
money; it is not their money. The money that we take from, that we 
confiscate from taxpayers is not the politicians' money, it is not the 
Washington, DC people's money. It is the people's money, and they know 
best what to do with their own money.
  And what they are going to do, if you allow a family to keep more of 
what they earn, they are not going to go bury it in the yard; they can 
if they want. But they are probably going to go out and buy other 
things that are taxed. It is going to stimulate the economy. That is 
what taxes really do. There is a dynamic economic effect of tax relief.
  If you allow that money to bounce around the economy several times, 
it is going to find its way back to Washington anyway. But several 
people get to touch that dollar before it gets here. It spins around 
the economy. There is a dynamic economic effect to that. When you take 
money out of Washington, DC, it helps people, it helps the economy, it 
bounces around. It is going to find its way back anyway. And tax relief 
does work.
  Mr. CONAWAY. Mr. Speaker, the gentleman mentioned a couple of things 
that I would like to flush out. You mentioned the phrase ``Big Oil.'' 
It is used as a pejorative, of course. But under the Democrats' H.R. 6 
they passed 11 days ago, Big Oil is defined as any C corporation 
exploring for oil and gas, any C corp. That includes ExxonMobil, all 
the way down to the smallest C corp, and that is tax phrase, for those 
out there that might be listening. But it is any C corp that has now 
got a tax rate that went from 32 to 35 percent, if this H.R. 6 sees the 
light of day from the Senate, and with the President signing it. So Big 
Oil includes a lot of folks, hardworking men and women who try to make 
a living in the oil business.
  When I ran for Congress 3 years ago, I ran under the idea that being 
a CPA, being a business man, that that viewpoint was underrepresented 
in Congress. I did not have any empirical data to substantiate that, 
but it seemed to be the case. And once I got here, though, I had 
discovered that there are an awful lot of our colleagues who really do 
not understand how hard it is to make money, that finding a product 
that you can sell to somebody else, and having bought or built that 
product for less than what you sell it for, and all of those kinds of 
things that go into making money is hard to do.
  There are an awful lot of our colleagues who simply do not appreciate 
how hard that really is. So when they talk about tax increases or 
taking money away from hardworking folks, they do not understand the 
impact that that has.
  One of the other things you mentioned, and you and I share districts 
where oil and gas are a major piece of the business, is how rugged and 
resilient and self-reliant these oil and gas guys are. We hit them with 
a tax increase 11 days ago. One of the things we talked about in the 
lead up to the debate to try to convince our colleagues on our side of 
the aisle and the other side of the aisle that this was not really a 
good idea is this idea that if you reduce the amount of money that is 
going into increases in domestic production, then you will lower 
domestic production.
  I think everybody agrees on that we ought to be less dependent on 
foreign oil and foreign natural gas. That phrase rolls off every tongue 
in this Chamber. The truth of the matter is from where we are today to 
that point is a decade-long journey. And that decade-long journey is 
going to be driven with cars and trains and airplanes using fossil 
fuels.
  So to the extent that we can increase domestic production, it seems 
to me logical that that would reduce the amount of foreign crude that 
we would have to import. And while it is difficult to exactly 
understand what the impact will be on those oil and gas C corporations 
with this tax increase they got 11 days ago, logic will tell you, if 
you spend less money in the exploration for crude oil and natural gas 
domestically, you will get less of it. That is just the mechanics. I 
think that is a pretty easy thing to say.
  I appreciate my colleague coming here tonight from Oklahoma, sharing 
with us his thoughts on tax increases. I would now like to recognize my 
colleague from Pennsylvania who is actually the moving force behind 
these weekly hours. It is my pleasure this week to replacing him here 
in the well, but Bill Shuster from Pennsylvania has got some thoughts.
  Mr. SHUSTER. Mr. Speaker, I appreciate my colleague from Texas for 
taking control of the time. I have got a bad wheel, but I did not want 
to miss this. I think it is so important.
  I want to start off by just echoing your sentiments about what 
happened here in the capital this week. I mean, a bunch of anarchists, 
they pushed forward on the Capitol Police, as you said, and the Capitol 
Hill Police let them come through and deface the United States Capitol.
  And I heard that they were saying, that they were chanting it was 
their

[[Page H970]]

right to. But they have no right to deface the United States Capitol. 
This belongs to all of the Americans. And nobody has a right to do what 
they had to. I really want to know, and I hope there is an 
investigation, there should be an investigation to find out why the 
Capitol Hill Police did not resist them, and you know the party that is 
in the majority needs to answer, needs to stand up and be held 
accountable, because they are in charge, they are the ones that are 
giving the instructions to the Capitol Hill Police.
  I want to know if the majority party said, we do not want you to 
confront them; let them do whatever they want to do. Because it is 
outrageous. And all Americans that are watching tonight, I do not know 
how widely it has been reported. I have heard a few reports. But, you 
know, it should have made top news that a group of anarchists spray 
painted their symbols on the Capitol. I heard the report was that there 
was no incident. Well, there should have been an incident. There should 
have been an extreme incident of resistance by the Capitol Hill Police 
to not allow someone to deface what I consider, this is the crown of 
America, this is the people's House and nobody should ever be allowed 
to do that. So I am outraged by it.
  Mr. CONAWAY. Mr. Speaker, my sense from being around for a little 
better than 2 years now is that the reaction that was forced upon the 
Capitol Hill Police went against their nature. Their nature is to 
protect, not only to protect you and I and any other law-abiding 
citizen on these grounds, which is their job, but to protect these 
grounds as well. So it is inconceivable to me that our Capitol Hill 
Police, whose natural, normal reaction would be to stand back and let 
those spray-painters have at it, at the walls of this Capitol building. 
They had to have gotten some instructions from somewhere. And given the 
comments reflected in the paper today, that is clearly the case. They 
were told to stand down and not protect this building as is their 
nature and their love.
  These folks love their job and do a great job at it. And so I agree 
with my colleague.
  Mr. SHUSTER. Mr. Speaker, some of them have given their lives up to 
protect this building and Members of Congress. I agree with you, I 
cannot imagine that they did not get orders to stand down from the 
highest level.
  Once again, the party in the majority runs this place. They need to 
be held accountable. They need to stand up and say what they did do, 
what they did not do. But in the future, if there are going to be, I am 
certain there will be, as there has been throughout our history, 
protests throughout the capital, and people have a right, absolutely 
have a right to protest, but they do not have a right to do it 
violently; they do not have a right to deface property that belongs to 
all of the taxpayers. So the questions need to be asked and we need to 
have answers from the majority party.
  Back again to why, the main reason we are here tonight, is to talk 
about the 1,433 days from now, if the majority, the Democrats in 
Congress, do not act over the next 4 years, or 1,433 days, we are going 
to see an over-$200 billion tax increase on Americans, on the American 
family, on small businesses.
  And that is going to significantly hurt this economy. And you just 
have to look at the facts. Over the last 4 years, 7.2 million jobs were 
created in this country because of those tax cuts. Just in December, 
167,000 jobs were created. The unemployment rate at 4.5 percent, the 
lowest average it has been in five decades.
  If we do not extend them, if we do not do what is responsible, then 
money, real dollars are going to come out of the American people's 
pocket. A family of four, making in the $40,000 range, they are going 
to see a tax increase of about $2,000.
  Now, to some in this body, $2,000 may not seem like a lot of money, 
but it is to a hardworking American family. $2,000 is a nice down 
payment on a new car, $2,000 will buy you a new washer and a dryer. 
$2,000 helps you put your son or daughter or yourself through college 
or to get educated or trained on something.
  So I hope that the American people that are watching tonight, whether 
you are Republican, you are a Democrat, there are lessons for us all 
through history, recent history, on why tax cuts work, why they are a 
good thing for the economy, why Americans should be allowed to keep 
their hard-earned dollars. You have to go back to the 1960s.
  President Kennedy, he cut taxes. What did he see? The economy came on 
strong. Revenues to the Federal Government increased dramatically. We 
saw that in 1980. And today we are seeing it at record levels. As the 
gentleman from Oklahoma pointed out, there are a lot of things in this 
economy that are happening because of those tax cuts, and we need to 
make sure that they continue.
  It is startling to me. Although, I watched and was obviously very 
keenly aware of what the Democrats were saying during the last 
campaign. And the first thing that they basically said, when you listen 
to the incoming chairman of the Ways and Means Committee, he basically 
told the American people that he did not see one of those tax cuts that 
really had merit and that everything was on the table. So the American 
people should not be surprised when they see these tax cuts.
  And just 11 days ago was the first Democratic tax increase. They 
changed the rules of the House to make it a simple majority. When we 
put it in place as the majority party, it had to be three-fifths of 
votes to increase taxes. They made it a simple majority, because they 
knew how difficult it is going to be to get a majority in this House to 
raise taxes on the American people.

                              {time}  2030

  So, once again, if we don't stand up and fight, and I hope my 
Democratic colleagues who aren't here tonight, the Blue Dogs who come 
down and talk about fiscal responsibilities, if they don't join with us 
to fight these tax cuts, they are going to take part in this huge tax 
increase that is going to occur on the American people. So I appreciate 
the gentleman tonight hosting this hour.
  Mr. CONAWAY. Let me make a comment if I could on something that you 
had said. You talked about what hardworking Americans do with the money 
that they earn and keep; and you went through a litany of things that 
they buy, washers and dryers, cars and all these kinds of stuff. If you 
think about it, though, everything that they bought is made by 
somebody; and that person made a living making whatever it is they 
made.
  Then there is also a good string of, for lack of a better phrase, 
middlemen in between that product being made and it being sold to the 
American consumer, which is the ultimate driver of this economy. You 
have got truck drivers and warehousemen and storage handlers and 
retailers and a long list of people who take that finished product from 
wherever it is made, even if it is made overseas, from wherever it is 
made, and they get it all the way to that retailer's shelf, where an 
American consumer takes that money that he or she earned themselves and 
they go buy that product.
  That starts the cycle all over again that has built a growing economy 
that is now in its fourth year of growth; and if you look at the CBO 
estimates that the Budget Committee will talk about tomorrow, that 
growth is expected to continue over the next 10 years.
  Now, 10 years is about as far as we project anything. And like I 
said, I am a CPA, and I have been dealing with projections for a long 
time. Quite frankly, years 5 on through 10 are just mathematical 
exercises. I mean, who knows whether or not those are going to be 
correct or not? The 2007 estimate is pretty good. The 2008 estimate is 
pretty good. But, beyond that, it gets a little fuzzy as to the 
accuracy of those projections. But, nonetheless, those projections show 
an improving economy.
  Not only that, but the Federal Reserve as well shows an improving 
economy; and that is because people are out buying things, furnishing 
homes, buying cars, all the kinds of things the American consumer does 
to continue to drive this economy.
  The Federal Government, the best thing we can do is get out of the 
way. And one of the best things we can get out of the way of are tax 
increases, and there is a big one coming.
  You know there is a phrase out there, if a violent jihadist threatens 
your life, you probably ought to take him serious. Well, I think the 
same thing applies to tax increases. If somebody

[[Page H971]]

threatens you with a tax increase, then I think you ought to take them 
serious. And we are 1,433 days away from a significant tax increase.
  I now want to go to my good colleague from Kentucky. Geoff and I are 
in the same class. The 109th Congress was our first time here. And 
Geoff has got a big family, which in and of itself contributes to the 
economy, we appreciate that, of your part of Kentucky as well the rest 
of the United States. So, Geoff, share with us tonight what your 
thoughts are on taxes and the American people working.
  Mr. DAVIS of Kentucky. Just as a former small business owner, one of 
the things that I would like to point out, that 88 percent of new job 
opportunities are created by small business owners. They are created by 
land developers, by construction companies, by small machining and 
tooling companies, small fabrication businesses, distribution 
businesses, professional services businesses, financial services. The 
glue that holds the institutions in our communities together, the 
framework of members of the National Federation of Independent 
Businesses, of our local Chambers of Commerce that serve that valuable 
function of communicating an agenda that focuses on growth, that 
strengthens our Nation for the long run.
  And I think that one of the things that I would like to highlight 
tonight, again, is this theme that when people voted in November, much 
perception nationally was focused on a view that national security 
situation was driven by emotion. But the reality is that in that 
election, short of making significant strategic changes in the 
leadership of this Congress, America voted to increase taxes on every 
working family in America by at least $2,000 a year.
  One of the things that I have told folks for many, many years is we 
don't need to raise taxes. We need to create taxpayers. Government does 
not create jobs, and government itself does not create wealth or a nest 
egg for families of America to build for the future. What government 
can do, however, is set a framework for achievement, a framework where 
people can pursue opportunity.
  The Constitution tells that the government is to provide for the 
common defense and to promote the general welfare. What are some of the 
ways that we can promote that general welfare? One of the key ways to 
promote the general welfare is to allow people to keep more of what 
they earn because they will invest it in a way that focuses on the 
needs of their family. They will invest it in immediate needs, in 
consumer goods that have a ripple effect of creating jobs. They will 
invest in future and retirement plans for themselves and set aside 
money to grow for college. All of this is fueling the economy, and 
keeping this in the private sector is very critical.
  Some of the things that the tax cuts did were allow people to keep 
more of what they earn. We eliminated the marriage penalty. We 
increased the child tax credit from $500 to $1,000. That meant, in the 
case of my family, nearly $3,000 that was left to reinvest in the lives 
of our children and their education to save for their future. It makes 
a very, very big difference. When we look at the marriage penalty, it 
put a significant impact on working families. And, again, I come back 
to the fact that the average family in America is facing a $2,000 per 
year income tax increase.
  But there is another side of this from a small business standpoint of 
job creation. I would like to highlight one man whose small business 
benefited in the manufacturing world, creating jobs in his community, 
impacted the local economy because of pro-growth policies that were 
continued in the last Congress, allowing not only individuals and 
families but also small business owners to keep more of what they earn, 
to be able to invest that, to write down debt and to prepare to compete 
in the future.
  We are a global economy. It is critical for us to be able to allow 
people to invest for the future. Remember, we don't need to raise 
taxes. We need to create taxpayers.
  Robert Prybutok of Newark, Delaware, owns a company called Polymer 
Technologies. Because of the tax cuts that were enacted, he was able to 
hire 10 new employees in 2003 and 2004. He had approximately 72 
employees in January of 2003 and now has about 90 employees.
  His business continues to grow and with it the need to buy new 
equipment. By utilizing the expensing provisions of the tax cuts, he 
was able to purchase two new pieces of equipment, increase his 
productivity, thus increasing the security of those jobs of his 
company; and it saved him about $125,000 that would have been lost in 
cost. This is money that can be invested in the future.
  Without the ability to expense his equipment, he would have been hard 
pressed to purchase that equipment in the first place. He needed to 
grow his business and pay the taxes that he owed.
  And I think the one thing that I keep in mind from my experience 
walking the shop floors of many, many businesses during the era of the 
Clinton administration where these breaks were not in place for 
America's manufacturing companies. People made decisions based on the 
structured Tax Code. They withheld making needed investment in 
competitive productivity improvements, needed investments in the 
professional education of their employees because they were uncertain 
of what the future held. Had the tax expensing provisions been in 
place, they could have made those investments more easily.
  And I think it is important to keep in mind that it allows a business 
to invest in the future to create more taxpayers. I think that this 
ability to expense equipment, this ability to make investments that are 
going to be job-creating investments, maybe a short-term deferral of 
tax payments to the Federal Government, actually will increase 
revenues.
  How have we seen that? We have seen it over and over again. As taxes 
are cut, more money goes into the investment economy, more jobs are 
created, more taxpayers are created, and tax revenues are an all-time 
high right now in the Federal Government.
  I think there are countless stories that we can share of successes on 
a small scale in small business which is really the opportunity to live 
the American dream. The vast majority of jobs in this country, nearly 
90 percent, 88 percent are created by small business owners. They are 
not created by large corporations.
  There is so much of a focus on the class warfare rhetoric that goes 
on in the Chamber that misses the point where the majority of the 
Americans work. And the majority of Americans work in small business. 
That is why we need to reduce the burden on those small businesses, 
create incentives so they can create jobs and create taxpayers to 
promote the future for their employees.
  With that, I would like to yield back to the gentleman from Texas to 
share more of his perspective on this matter.
  Mr. CONAWAY. I appreciate my colleague from Kentucky joining us 
tonight to have this conversation among the several of us.
  I served on the Chamber of Commerce board in Midland for a number of 
years, and one of the things that the chamber looks at is the impact 
that payroll has on a community. There is a difference of opinion among 
folks on the chambers as to what this number ought to be, but there is 
a guess as to how many times that payroll turns over in a community. In 
other words, when the payroll is made, it is spent on local goods and 
services, and that person then turns around and spends it on local 
goods and services, and the range is, for most economic development 
guys, is between four times to seven times. Depending on the number you 
want to brag on, it will be somewhere in that range.
  So the payroll that gets created that my colleague from Kentucky was 
talking about a while ago where these small businesses add employees 
turns over several times within the community and creates additional 
jobs, additional opportunities and additional prosperity for those 
folks.
  It is interesting, I had a conversation this afternoon with my staff, 
and we are all anxiously awaiting the continuing resolution from our 
colleagues on the other side of the aisle. Chairman Obey of the 
Appropriations Committee posted on his Web site this afternoon that 
they did in fact file the continuing resolution. And my staff called, 
and we went to the Web site. They said it was

[[Page H972]]

filed. And me and my staff did. Of course, nothing is there.
  So my staff called over there and asked and they got kind of a 
runaround. So I said, well, I will just call. So I called, and I said, 
hi, this is Congressman Mike Conaway, and I would like to see a copy of 
the continuing resolution that has been filed.
  And the lady said, well, it has not been filed.
  I said, well, I am looking at a Web site for the Appropriations 
Committee, and it says they have filed.
  She said, well, I know. I am not sure why that is up there, but.
  I said, well, am I getting the runaround here? Is it really up there 
or not?
  She said, no, that is a mistake. It hasn't been filed.
  So, anyway, we are all awaiting the continuing resolution.
  In the meantime, we are all trying to guess at what might happen. And 
over at the Social Security Administration they are concerned about 
furloughing employees because the continuing resolution that they 
thought might be in place will fund them at lower levels than they have 
been expecting and so that they are going to have to lay off employees.
  Mr. DAVIS of Kentucky. Will the gentleman yield on that point for a 
moment?
  Not only does it affect employees in the Social Security 
Administration who process checks for our senior citizens, it also 
affects our ability to fight against Islamic radicalism, fight against 
terrorist groups.
  I flew in today with members of the FBI Southern Ohio office out of 
Cincinnati coming in for some business here in Washington, and they 
shared their concern over the lack of a continuing resolution. Was the 
money going to be there to fund their operations? And, right now, one 
of the things that our national security apparatus, because of this 
Democratic Congress, is having to cut positions, not just a few 
positions but nearly 3,000 positions because of the lack of funds to do 
their job which we had provided for them.
  When we talk about the issues related to bringing this continuing 
resolution, there was a clear statement that was made about the desire 
to work harder. Well, last week, 2 days, we were done by 2 p.m. This 
week, I am reading the schedule, and it says, tomorrow, Tuesday, we 
will be out around 2 p.m. Wednesday, no rule yet on the continuing 
resolution, but likely we will be out at 2 p.m.
  I don't know how many nights we worked long, long hours in this 
Chamber, long, long hours in committee to get the people's work done. 
And now we have Federal law enforcement.
  I got a call today from an aviation unit in the Army that is now very 
concerned about its receipt of dollars. And we are inside the 48-hour 
window, have no language on what this bill is. They are limiting debate 
to 2 hours, which I think is a very powerful statement of the direction 
in which they choose to take legislation, that not only did we have a 
tax increase 11 days ago but spending is going to be without 
accountability.
  I intend to vote against this resolution if this resolution will not 
disclose the information that is necessary for us to do our job. 
Because, ultimately, they are going to create some real problems 
leading up to the foundation for this tax increase in 1,433 days.
  Mr. CONAWAY. And my good colleague has added to the list of folks 
that are going to be impacted by this reduced cash flow to these 
agencies. Think about that for a second. That is what we are talking 
about, over at the Social Security Administration, at the FBI and other 
places that Geoff has talked about. It simply reduced cash flow to 
those agencies; and, because there is a reduction in cash flow, they 
are reducing mission, they are laying people off, they are doing less 
service. The Social Security folks won't have as many people to service 
all those callers out there.
  That is exactly what happens in small businesses when we reduce their 
cash flow by tax increases. Because money that would otherwise go into 
making payrolls and paying benefits and adding folks to the payrolls is 
now coming into these Federal Government's coffers being spent in ways 
that, for the most part, I suspect they are good, but there is an awful 
lot of waste in there. And, clearly, our taxpayers out there can spend 
their own dollars better than we can on their behalf.

                              {time}  2045

  Now, subsequent to my conversation with my staffer, we have gotten a 
rumor. And again in the minority we get to whine all the time. It is 
just going to be our job over the next 2 years, just to be very good 
whiners. It is not in our nature, it is very unlike us to do it, so we 
will probably do it very poorly. But we don't know what is going on 
over there. It has been days and days and days. These folks knew they 
had the reins of this thing starting January 4; they knew that on 
November 8. And we have had now over 2 months that they knew that this 
was going to be the circumstance, that they were going to be dealing 
with the continuing resolution, and we have no resolution to the 
continuing resolution. And I am sure there are good reasons on their 
side of the aisle for why they have not been able to make these 
decisions, but surely these decisions are not going to involve some of 
the draconian nonsense that many of our agencies are worried about, and 
they are worried about it because they don't have the facts. Most folks 
deal real well with facts. What we don't deal well with is uncertainty, 
innuendoes, and rumors.
  So I would encourage our folks on the other side of the aisle to get 
that CR done if you are going to do it. If not, then let's start 
bringing appropriations bills to the floor. There is nothing wrong with 
that. That is a nice way to do it. We should be legitimately criticized 
because we didn't get it done under our watch, but that same criticism 
now applies to the folks in charge. It doesn't matter, just get on or 
off the pot, as they say. Bring a CR to the floor, show us what it is; 
if you are hiding stuff, give us a second to try to find that out. Or 
let's go at it from the appropriations standpoint and bring those to 
the floor one at a time, as we should have.
  Mr. SHUSTER. Would the gentleman yield for a second?
  Mr. CONAWAY. Sure.
  Mr. SHUSTER. I don't know if this is accurate or not, but I have 
heard people talking that the CR is going to come to the floor and it 
is going to look like an omnibus bill. And you know, an omnibus is like 
a Christmas tree; they hang everything on it that they want to get 
through. But that is the rumors that are swirling around here, that it 
is not just going to be just a CR, it is going to be an omnibus. And 
that is going to be bad for spending, and they are not living up to 
their word.
  Mr. CONAWAY. I have also heard they are going to wipe out all the 
earmarks. It will be their definition of an earmark, and it will be 
interesting to see which earmarks really get zeroed out and which ones 
don't and how they parse that definition between the two in order to 
keep the ones they want and peel out the ones that they think are 
wasteful spending, and it will be interesting where those earmarks 
impact and which districts are the ones that really get peeled out.
  Mr. SHUSTER. Kind of like their definition of openness.
  Mr. CONAWAY. Exactly. And transparency.
  Mr. SHUSTER. Openness and participatory, and transparency. And here 
we have passed several bills, and having gone through the committee 
nobody has seen them until they show up on the floor.
  Mr. CONAWAY. It is not likely that this continuing resolution will go 
through committee either. It is just going to get dropped on us like a 
laser-guided bomb, rushed straight to the floor, not going to go 
through committee, not going to have the openness and the transparency 
and the 48 hours and all the kinds of things that our good colleagues 
on the other side of the aisle promised in October.
  Promises in October are hard to keep in January, and we are seeing 
it, and we will continue to try to point that out without seeming as 
whiny as it sounds, I suspect, to my colleagues and my constituents in 
west Texas. But that is going to be part of our role over the next 2 
years, is to be the loyal opposition, to try to do so in a respectful 
manner as we point out promises made and promises broken by folks on 
the other side of the aisle.

[[Page H973]]

  Does my colleague from Kentucky have some other thoughts?
  Mr. DAVIS of Kentucky. One of the things that I would like to share 
as we come back to this issue of tax policy, again, I come back to my 
time walking the shop floor, and for me the one thing, you hear a lot 
of stories and a lot of perspectives, but for me it always came back to 
show me the numbers. Let's take a look at the truth, what reality is, 
and be able to make our decisions from there. Here is the truth about 
the impact on creating jobs for working families, good jobs, jobs where 
there would be opportunities for health care, to fund their children's 
education, looking to the future.
  In less than 3 years, because of this policy of allowing people and 
allowing and incentivizing small businesses to keep more of what they 
have earned, the U.S. economy has grown by $2.2 trillion. Let's put 
that in perspective for a moment. That is larger than the entire 
Chinese economy. That is the growth of the United States.
  There is a lot of concern about international trade in this global 
economy. Just in 3 years, our increase in economic growth is bigger 
than the size of the entire economy of our largest international 
competitor. It is much larger than the total economic size of India, 
Mexico, Ireland, and Belgium. And I think the issue here at the end of 
the day is being able to allow people to keep more of what they earned, 
to create taxpayers, not raise taxes, because the proof is in the 
numbers. The proof is in changing opportunities. Yes, we are going 
through a time of economic adjustment, but at the same time record job 
creation as our economy adapts to the 21st century to compete 
effectively, and that is the future that our kids are going to have.
  Mr. CONAWAY. I thank you.
  Let's go to another colleague of ours from Georgia. Dr. Phil Gingrey 
is an OB/GYN doctor, a provider of professional services for most of 
his career. And while all of us have great respect for physicians, at 
their core they run small businesses and maybe big businesses. But at 
its core the practice of medicine has to be a business, because he and 
his colleagues have to make money, they have to be able to pay their 
payrolls, they have to be able to buy the supplies for their offices, 
and all of those employees and provide benefits and all the things that 
they do. So in addition to providing I suspect outstanding professional 
care over a long, long period of time, and maybe he will share with us 
the number of babies he helped deliver, he is also a businessman. And 
in my book, that is a good two hats that he has worn over these years. 
So let's hear tonight from Dr. Gingrey.
  Mr. GINGREY. I thank my colleague from Texas for yielding, and I am 
proud to be here tonight with the Countdown Crew to talk about an issue 
which typically you would think or you hear said many times that our 
physician colleagues across this country are not real good business men 
and women. But as my colleague, the CPA from Texas, just pointed out, 
they better darn well become good business men and women.
  Mr. CONAWAY. If the gentleman would yield for a second. I suspect 
that comment is made about their other business decisions. Running 
their practices, they are great business persons; but maybe in the oil 
business, they may not be as good.
  Mr. GINGREY. I appreciate the carve-out, but it probably specifically 
applies to the gentleman, the peach from Georgia.
  But in any regard, the main point that I would like to make, and 
maybe my colleagues, the gentleman from Kentucky and my good friend 
from the Keystone State Mr. Shuster from Pennsylvania, have already 
mentioned this, but if Congress takes no action, and that is what the 
Countdown Crew is talking about in these 1,433 days leading up to 
January 1, I think, 2011. But in 2007, in fact I think this has already 
occurred, but we can do something about it because tax day, April 15, 
is, thank goodness, 3 months away. But taxpayers in States with no 
income tax will not be allowed to deduct their sales taxes from Federal 
income tax if we don't make a change. And we are talking about 
Representative Conaway's great State of Texas, a highly populated 
State. We are talking about the great State of Florida. We are talking 
about Tennessee and other States. And this is significant, because 
citizens in those States pay no income tax, no State income tax, but 
pay huge sales tax to fund their State government, and that will go 
away if we don't do something about it.
  In 2007, I think the gentleman from Kentucky mentioned this, the 
exemption for the alternative minimum tax will decrease from the 
current $42,500 to $33,750 for a single filer, and from $62,500 to 
$45,000 for a married couple.
  In 2009, Mr. Speaker, my colleagues, the standard deduction for 
couples as a percentage of the standard deduction for a single 
individual decreases from 200 percent to 174 percent, further 
discouraging couples from entering into the great sacrament of 
matrimony.
  And in 2010, the section 179, Small Business Expensing Cap, will 
decrease from $100,000 to $25,000.
  I heard my colleague from Kentucky, Representative Davis, talk about 
this just a minute ago; and he made the comment that most of the jobs 
in this country, and that would include those 7 million new jobs that 
have occurred since 2003, in fact more new jobs than the European Union 
and Japan combined, most of those 7 million new jobs are created by 
small business men and women. And this section 179 which allows them to 
write off $100,000 in the first year for capital improvement, buying a 
new piece of equipment, indeed, expanding the size of their operation 
so they can hire new people, if it goes down t $25,000, you are going 
to see, just like a stand-alone increase in the minimum wage, you are 
going to see jobs lost, and all of a sudden that 7 million number is 
going to start trickling down.

  It has been mentioned that the child tax credit will decrease from 
$1,000 to $500.
  And listen to this, my colleagues: on marginal rates, if this has not 
already been mentioned, and even if it has, it probably deserves 
repeating, the 35 percent bracket will increase to 39.6 percent; the 33 
percent bracket, 36 percent; 28 percent bracket, 31 percent; 25 
percent, up to 28 percent; and, worst of all is the 10 percent bracket 
will increase to 15 percent. And not to mention capital gains going 
back up to 20 percent. Dividends, again, double taxation on dividend. 
All of these things are going to really hurt this economy.
  And while maybe under our majority leadership there are a lot of 
areas in which we could have done better, I truly believe, and I think 
my colleagues here tonight would agree, we could hardly have done 
better than the 2001 and 2003 tax cut package, many of which I just 
enumerated, including finally trying to get rid of the double taxation 
of the death tax, the estate tax. This is what Republicans have done. 
This is what this President has done. And this has resulted in 7 
million new jobs.
  Instead of an estimated cost to the revenue of $1.3 trillion over 10 
years because you made these cuts, guess what: within 2 years we have 
run the revenue, I think, and my colleague from Texas knows these 
numbers better than I do, but something like $275 billion more revenue 
because of the tax cuts.
  I have said this a number of times on this floor, and maybe the folks 
at home watching on C-SPAN know this, but in 1960 Democratic President 
Kennedy cut taxes, revenue went up drastically; in 1980, President 
Reagan, Republican President, did the same thing and the revenue went 
up. And of course that is the case that we have here today.
  Unemployment rate across the country, 4.6 percent. In my State, where 
we have actually, Mr. Speaker and my colleagues, we have actually lost 
a lot of jobs here recently because both General Motors and Ford have 
shut down plants that have been in Georgia for a long time, but our 
unemployment rate is just barely above 5.1 percent, and we are growing 
jobs in other areas, small businesses primarily as I said earlier.
  So to be here tonight to talk about this, talk with the Countdown 
Crew why this is so critical, because we know the Democratic majority 
has already said it. But this issue of PAYGO that they have put in the 
rules package, it is an absolute farce. It doesn't even look like the 
PAYGO provision that the then-ranking member on the Budget Committee, 
Mr. Spratt from South Carolina, that what he proposed was that there 
would be no point of order waiver allowed; and yet in this

[[Page H974]]

new rules package that they proffered in the first week of the 110th, 
they allow that. So that at any point if PAYGO is violated, then they 
can simply in their Rules Committee waive that point of order. Or if 
they don't want to appear hypocritical and they don't waive the point 
of order, then whatever is done on the Senate side and comes back as a 
conference committee, they waive all points of order. So to have a 
really meaningful PAYGO provision, then it needs to have the force of 
law.
  And I will conclude by pointing out the double standard here. What 
the Democrats would consider a tax cut and the expiration of these tax 
cuts as something that has to be offset, but they would not consider 
the extension of a program that expires, that has a sunset. Let's say 
as an example, and I think this is a great program and I hope we 
continue it and maybe even make it better, but as an example of the 
hypocrisy of PAYGO, take something like the SCHIP program which was 
authorized 10 years ago and we spend about $5 billion a year on that 
program. It is scheduled to sunset in June, I think, of 2007, this 
year. And I am sure it will be reauthorized, but that additional 
spending will be outside of PAYGO rules.
  But yet when we have these tax cuts that expire, if we, the 
Republican minority now, want to continue those great tax cuts for the 
reasons that the Countdown Crew has enumerated here tonight, then that 
would be considered a new tax cut and would have to be offset. It is so 
hypocritical, Mr. Speaker, my colleagues. I think it needs to be said 
over and over again, and I want to come become and join my colleagues 
as often as we can to talk about this, because American people need to 
understand.
  With that, I yield back to my colleague.
  Mr. CONAWAY. I thank my colleague.
  Let me make three points really quick and then we will go to closing 
comments because we have about 12 minutes left. But you mentioned the 
sales tax deduction. Just to help our many colleagues that have joined 
us tonight to listen to this great debate in the Chamber with us, let 
me explain to them what the impact is.
  It is a matter of equity, because States that have income taxes, 
those income taxes that you pay in the State reduce your for Federal 
tax purposes. So you get to deduct those State income taxes.

                              {time}  2100

  So you get to deduct those State income taxes. States without an 
income tax, unless we put this provision back in, those taxpayers in 
effect subsidize the rest of the United States' taxpayers because there 
are inequitable circumstances. So being able to deduct sales taxes 
means that the taxpayers in Texas are on a more equal footing with 
taxpayers in States that have an income tax.
  You mentioned the marriage penalty being a detriment to getting 
married. I don't know if that is the case. I do know there is a 
calculable tax toll for making the decision to get married. That may 
not dissuade couples from getting married, but it might. There is a tax 
toll, and all of us agree that strong families are the core of the 
institution that is America. And to the extent we discourage strong 
families, shame on us.
  Finally on the 179, by dropping that deduction from $100,000 to 
$25,000, what happens there is the only businesses that pay money are 
businesses making money. You have to have taxable income in order to 
make money. If we have reduced the deduction by $75,000, the company 
has to pay tax, and let's assume a 35 percent tax rate, on that 
$75,000. So you take the $75,000 in profit, less the $26,500 that you 
pay in taxes and that net, $48,000, is all they have got left to pay 
dividends or reinvest in their business as opposed to the $26,250 that 
they could have reinvested in the equipment. So these are meaningful 
hits and meaningful tax policy that we ought to continue.
  I yield to Mr. Davis.
  Mr. DAVIS of Kentucky. When you talk about creating strong families, 
I comment on our good friends and neighbors back in Kentucky, Mike and 
Vonna Drake. They typify Americans living that dream of being able to 
pursue their own opportunity. Mike works as a pilot; Vonna is a nurse. 
Their children are friends with my family. I have watched their kids 
grow up through the years.
  These policies that seem so arcane, reading about them in the news or 
some of the shrill rhetoric that we hear during political campaigns, 
have a real impact on their flexibility and ability to invest in their 
children's future, let alone decisions that they might make regarding 
their futures and careers.
  In 1,443 days, my neighbors are going to have a $2,000 tax increase. 
They have two children. The $500 per child tax credit that was 
increased to $1,000, recognizing the cost of raising a family, the cost 
of investment in all of the needs of our children, and not simply food 
and clothing, but education and activities to grow them and develop 
character and to strengthen them for the future. That will revert by 
$500 per child.
  Now they will have an additional $1,000 just on that alone. Because 
they are married, they attend church, they are committed to their 
faith, they are a great example of a family in our neighborhood and 
community, just based on the fact that they chose the course to get 
married, their taxes are going to be increased or they are going to 
have a tax penalty of 12 percent.
  To your point, we need to encourage policies that will empower and 
strengthen families and will create taxpayers, and that will pass on 
that work ethnic to the next generation that made the Drakes a 
successful, value-adding American family. Not only do they serve their 
community now in their church, Vonna serves as a nurse, Mike is an 
aviator in the Army. He went in out of high school, got himself 
educated and pursued a professional career in aviation. He is a 
valuable member of our community.
  And we need thousands and thousands of families across our districts 
because they are the ones who bear the burden. They are the ones who 
make the investment, as President Clinton likes to say. And I think of 
all of the dollars lost by investing in areas where it was going to 
create no future and create no value.
  At the end of the day, unless we bring about fundamental changes in 
accountability, in 1,443 days this economy is going to be hurt. My 
friends and neighbors are going to be hurt. Small business job creation 
opportunities are going to be hurt because of keeping people from 
having that opportunity to invest and to build a future for themselves.
  Mr. CONAWAY. I thank the gentleman from Kentucky, and I turn to the 
gentleman from Pennsylvania for some closing words.
  Mr. SHUSTER. Mr. Speaker, I would like to relate two stories that I 
came across concerning these tax cuts.
  Jim Tracy from Shelbyville, Tennessee, who is the owner of a small 
insurance agency, he said because of the tax cuts, he was able to use 
the $7,200 that he would have otherwise spent on taxes, and he bought 
seven new computers for his business and he hired a fourth employee. 
That is just one of many.
  There is another story here. Kenneth Leupp of Archbold Refuse Service 
in Archbold, Ohio, he says, ``The tax cuts, changes in depreciation 
schedules and increases in dollar amount we can expense off are very 
welcome changes. We have made purchases we wouldn't have made under the 
old laws. We've saved money on taxes, increased efficiency, lowered 
maintenance costs, and helped stimulate the economy.''
  Those are just two of thousands and thousands of experiences out 
there because of these tax cuts. Our purpose here tonight, although I 
may be repeating myself, I know that people watching C-SPAN tune in and 
out, but I just want to remind them that in 1,443 days, it is the 
countdown to the Democratic tax increase. All they have to do is run 
the clock out. They don't even have to act on them.
  So on January 1, 2011, there will be a $200 billion tax increase to 
the American people. The death tax will expire, capitol gains tax, tax 
on dividends will expire in January of 2009. A record number of 
Americans are invested in the stock market with mutual funds and 
retirement funds. The child tax credit will be cut in half over the 
next couple of years. The marriage penalty will be back in place, and 
low-income

[[Page H975]]

taxpayers will go from a 10 percent tax bracket to a 15 percent tax 
bracket if we don't act.
  The American people need to be aware of this. And in less than 4 
years, if they don't communicate to their Members of Congress that they 
want to see these tax cuts extended, their voices need to be heard.
  Mr. CONAWAY. I thank the gentleman from Pennsylvania who is the 
chairman of the Countdown Crew where we come in weekly and talk about 
tax policy.
  There is nothing magical about tax policy. There is nothing sacred 
about it. There are various terms and provisions. We ought to be about 
trying to find an efficient tax collection scheme that allows for 
voluntary compliance, a scheme that is easy to comply with and costs 
the least amount of money possible to comply with, but raises the 
minimum amount of money needed to fund the Federal Government.
  The policy we have in place is incredibly complicated. I am a CPA, 
and I have spent 32-plus years in business, both complying with the tax 
law and trying to help other folks comply with the tax law. It is 
unnecessarily complicated, but it is the one we have got. The 
provisions we have, as has been mentioned tonight, the current rate on 
capital gains tax, the current rate on interest, the 179 deduction, the 
various marginal tax rates, all of those, while there is nothing cast 
in concrete or stone about that, nevertheless if you look at the 
results we have had since they were implemented in 2001 and 2003, this 
economy has grown with those tax policies in place.

  Could the economy have grown with other tax policies in place? 
Certainly, but that would be a guess as to whether or not that 
happened. The truth is we know these were in place and we know what 
happened with respect to the economy since they have been in place, 
since they brought us out of the recession of 2000-2001.
  Geoff mentioned his taxpayer that he talks about. The guy I think 
about when we talk about raising taxes is a fellow working morning tour 
for a drilling rig company, probably the derrick man. He probably has 
the most exciting job on a drilling rig. Most drilling rigs of any 
substance have 15 to 30-foot substructure from the ground to the floor 
of the rig, and then they have a mast on top of that of something in 
excess of 100 feet. And the derrick man's job is to stand at about 90-
plus feet above the substructure, so he is 120 feet in the air, and 
works. It is hard work. It is physically demanding and dangerous work. 
He is making good money. He works 8 hours and if he is lucky some weeks 
he gets overtime.
  That is how he feeds his, and I say ``he,'' most of them are men, 
that is how he feeds his family. When we talk about raising taxes on 
individuals, I don't think about Bill Gates or Warren Buffett. I think 
about that guy working morning tour, for example, for Parker Drilling, 
or Patterson Drilling which is based in Snyder, Texas, who comes to 
work at 11 at night and works until 7 in the morning, and gets in a car 
with the other four guys on the crew and they drive home and he sleeps 
during the day. That is how he feeds his family. That work is 7 days a 
week for the most part. It is a hard job.
  That is who I think about when we talk about raising taxes.
  So we will be coming back here again next week on the first night 
back to highlight again. We will have peeled off another 7 days that we 
have before the automatic tax increase. We have a good colleague who 
gets all over us about mandatory spending. Well, this is a mandatory 
tax increase headed our direction, as our colleague from Pennsylvania 
said, if we simply run out the clock.
  It will have been 18 days at that point in time since the last tax 
increase. We are not aware of any tax increases on the floor this week. 
But hang onto your wallet. Given the way so far our colleagues have run 
the shop, you don't get a lot of heads up on this stuff. It just comes 
to the floor. They could have something up their sleeve as part of the 
CR that would raise taxes and do all kinds of things. And I don't want 
to taunt them, but again not going through committee and doing regular 
order leads to the kind of blindsided unexpectedness where that can 
happen.
  It has been 11 days since the first tax increase, and others are on 
the way.
  I want to thank my colleagues from Pennsylvania, Georgia and 
Kentucky, and also from Oklahoma, for helping us out tonight.

                          ____________________