[Congressional Record Volume 154, Number 106 (Wednesday, June 25, 2008)]
[House]
[Pages H6022-H6025]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 6275, ALTERNATIVE MINIMUM TAX
RELIEF ACT OF 2008
Mr. WELCH of Vermont. Mr. Speaker, by direction of the Committee on
Rules, I call up House Resolution 1297 and ask for its immediate
consideration.
The Clerk read the resolution, as follows:
H. Res. 1297
Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the bill (H.R.
6275) to amend the Internal Revenue Code of 1986 to provide
individuals temporary relief from the alternative minimum
tax, and for other purposes. All points of order against
consideration of the bill are waived except those arising
under clause 9 or 10 of rule XXI. The amendment in the nature
of a substitute recommended by the Committee on Ways and
Means now printed in the bill shall be considered as adopted.
The bill, as amended, shall be considered as read. All points
of order against provisions of the bill, as amended, are
waived. The previous question shall be considered as ordered
on the bill, as amended, to final passage without intervening
motion except: (1) one hour of debate equally divided and
controlled by the chairman and ranking minority member of the
Committee on Ways and Means; and (2) one motion to recommit
with or without instructions.
Sec. 2. During consideration of H.R. 6275 pursuant to this
resolution, notwithstanding the operation of the previous
question, the Chair may postpone further consideration of the
bill to such time as may be designated by the Speaker.
The SPEAKER pro tempore. The gentleman from Vermont is recognized for
1 hour.
Mr. WELCH of Vermont. Mr. Speaker, for the purpose of debate only, I
yield the customary 30 minutes to my friend, the gentleman from Texas
(Mr. Sessions). All time yielded during consideration of the rule is
for debate only.
General Leave
Mr. WELCH of Vermont. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and to insert extraneous materials into the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Vermont?
There was no objection.
Mr. WELCH of Vermont. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, H. Res. 1297 provides for consideration of H.R. 6275,
the Alternative Minimum Tax Relief Act of 2008, under a closed rule.
The rule provides for 1 hour of debate, controlled by the Committee on
Ways and Means.
As Americans know, the alternative minimum tax was enacted in 1969
with a very legitimate intent: to ensure fairness in our tax system by
avoiding the situation where very wealthy individuals don't pay taxes
and to close loopholes. It is in the same spirit of fairness that we
consider legislation today that will keep the middle class out of being
hit by the alternative minimum tax when it was never intended that they
would be caught up in its web and who have been because of inflation
and because of no adjustments in the Tax Code.
The Alternative Minimum Tax Relief Act of 2008 will provide, one, 25
million Americans with over $61 billion in tax relief. Two, it offers
property tax relief to homeowners and expands the child and adoption
credits to parents. Nearly 50,000 families in my own State of Vermont,
Mr. Speaker, will see tax relief from this legislation.
However, in order for the tax relief to be fair, we have to ensure
that the cost of the tax relief is not simply passed on, the credit
card debt, to our children, and we have already saddled the next
generation with $9 trillion in debt, costing us $1 billion a day in
interest payments, money that could be spent on other, much more
productive things. Enacting an AMT patch today when we don't pay for it
would simply shift that $62 billion burden from the middle class on to
their children and their grandchildren. What we fail to pay today they
will be forced to pay tomorrow with interest.
Furthermore, we do pay for this tax relief by improving the Tax Code.
With the bill's offsets, we are closing two very large tax loopholes,
one that has benefited very wealthy hedge fund managers at the expense
of middle class taxpayers, and let me talk about that first.
The ``carried-interest'' loophole. It is a preferential rate of
capital gains tax, a 15 percent rate that gets applied to income earned
by many people who do financial work.
{time} 1130
Right now, under current law, the income earned by many investment
fund managers at a private equity firm, and hedge funds, are taxed at
the lower capital gains tax rate. So you have this very unjustified
situation where some of these folks who are making, in some cases,
billions of dollars, pay a tax rate lower than the secretaries who work
in their firms, and they do this when they don't actually put their
capital at risk but manage the capital of others.
A second loophole that is closed in this bill stops major oil
companies from receiving what is called a special domestic production
subsidy through the Tax Code. As we all know, record gas prices, the
record cost of a barrel of oil is resulting in oil company profits that
are unparalleled in the history of this country, in some cases, as high
as $11 billion in a single 3-month period. So it's clear that those
companies are doing very well and that they do not need continued
taxpayer assistance.
I commend Chairman Rangel and Chairman Neal and the Committee on Ways
and Means for their excellent work on this legislation, and I encourage
my colleagues to support the rule and the underlying legislation.
I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I want to thank my friend, the gentleman
from Vermont, for not only yielding me this time to discuss the
proposed rule for consideration of the alternative minimum tax, but I
want to thank him for his friendship in the committee and the
professional nature of the way he conducts himself.
Mr. Speaker, today we are going to debate a tax increase on America.
No surprise. The American public has gotten used to this. The tax-and-
spend Democrat Congress, the new Congress, the new way to run
Washington, D.C. has resulted in not only economic failures here in
this country the last 18 months but also higher gas prices, the
inability that we have to control the flow in energy that comes into
this country and has made us now more than ever to where we have to go
get our energy overseas, send our money overseas, and not be able to be
energy sufficient here in this country.
But now I find out that the excuse for raising taxes on Americans
today is that there's a loophole in the tax law--a loophole--and
unintended consequences. The bottom line is that it's the tax law, it
was therefore reasoned, and the opportunity for us to grow our economy
and build jobs and have job creation and to protect the American
consumer is why these were parts of the tax law. It is not unintended
consequences, it is not a loophole, it is the law, the tax law of the
United States that I am very proud of, and I am disappointed to see
that the Congress today will be debating new tax increases on the
American people.
So I rise in strong opposition to this closed rule, yet another
closed rule by this new majority that we have here, and to the
underlying legislation, which takes the baffling approach, once again,
of raising taxes on Americans and on the American economy during a
downturn of our economy, rather than taking a way to prevent a tax
increase on hardworking and unsuspecting middle class taxpayers, which
sets the stage for even more job-killing tax increases in the very near
future just to prevent the current low-tax policies that Republicans in
Congress worked so hard to pass and to support on behalf of American
taxpayers.
I think it's interesting, Mr. Speaker, that when Republicans bring
tax bills to the floor of the House of Representatives, we are able to
tout how many jobs our tax bill will create, how many jobs the economy
will create. I have never, ever heard of a Democrat tax-and-spend bill
that then touts how many jobs will be created, because they don't. They
kill jobs. They kill jobs in America every time we do what we are doing
today with the new Democrat majority to raise taxes on America.
[[Page H6023]]
Under the Democrats' flawed policy of pay-as-you-go logic used to
defend this legislation, in just 2 short years--when a number of
critically important tax policies like the $1,000 Republican tax credit
and the Republican lower tax rate on income and capital gains and
dividends are set to expire, that created job growth--the new Democrat
majority pay-as-you-go rules will require more than $3.5 trillion in
tax increases, and that is what they stand for today, increasing taxes
on the American people, killing jobs all across the country, and yet
they want to blame President Bush. Just incredible.
It makes no sense to me why we are hamstringing our economy and
saddling working families with higher taxes when revenues aren't the
problem. Washington is already collecting more taxes as a percentage of
GDP than the historical average over the last 40 years.
We don't have a revenue problem. We have a spending problem. What
Washington really has is a spending problem that this new Democrat
majority can't fix and can't solve because they are all about taxing
and spending. Federal spending is higher by nearly $530 billion more
than the Congressional Budget Office's 2000 projection for the year
2007. So going back to 2000, and they projected how much money we would
need to spend, we are $530 billion more this year, thanks to a new
Democrat majority, making increased spending the main reason why 99
percent of our Nation's worsened budget picture over the last 7 years
is occurring. We have got a downturn in the economy because we are
raising taxes and spending to support a bloated government.
Mr. Speaker, the American people have known for a long time that
Republican Members of Congress support an economically responsible
solution to solving the alternative minimum tax problem. Just contrast
this year's Republican budget proposal, which prevented expansion of
the AMT for the next 3 years and achieved full repeal in 2013, with the
Democrat budget. If you compare them, the Democrat budget, which jammed
a $70 billion tax increase into our economy to pay for simply a
temporary 1-year fix, and did nothing about AMT for the next 5 years
after that. A 1-year fix, raising taxes $70 billion, rather than fixing
the problem.
Mr. Speaker, taxpayers are already aware that last month, House
Republicans unanimously supported a clean AMT patch without tax
increases to prevent more than 25 million families--including 21
million families who didn't owe AMT in 2007--from paying an additional
$61.5 billion that's going to come due this next April, just like we
did in December of last year and just like we will continue to do if
Republicans once again become the majority party in Congress.
What taxpayers may not realize is that House Democrats used to be for
the same thing--at least that was until they won the majority. And with
it came the opportunity to salivate, to get all this money, and to
couple what used to be a bipartisan, commonsense tax prevention policy
with massive, unnecessary tax hikes that burden this country, and for
18 months we have seen the promise of higher taxes, and it's killing
our economy. As recently as last December, the House passed a ``clean''
AMT patch, without crippling the economy with tax increases, by an
overwhelming majority of 352-64.
The only thing worse than House Democrats' tax-and-spend flip-flops
on this issue is the fact that their comrades in the other body--
including Finance Chairman Max Baucus--have already recognized the
reality that at the end of this day, the AMT patch will not be paid
for, and that this cynical exercise meant to provide political cover is
in fact dead-on-arrival the moment it passes this House. But let it be
said: It's another opportunity for the new Democrat majority to show
how much they want tax increases to ruin our economy.
The cost of this political gamesmanship is really quite simple: the
exposure of millions of middle class taxpayers to an average tax
increase of $2,400, and the increased likelihood of a repeat of last
year's mismanaged process in which the late enactment of the patch
prevented the IRS from processing AMT-affected returns until about 4
weeks into the filing season. It was a disaster this year as a result
of the new majority.
What is worse, Mr. Speaker, is how the Democrat Congress proposed to
raise the additional $61 billion of additional taxes just to prevent
this tax increase. That's right. We are going to have a tax increase on
the tax increase on middle class families who were never intended to
pay this.
First, and rather unsurprisingly, this Democrat ``Drill-Nothing''
Congress helps repeal a tax deduction that helps American companies to
produce energy for American consumers, but they are going to take that
advantage away from consumers. It will only hurt energy exploration in
this country, and now what we are going to see is that the American
consumer will pay more at the pump.
While this proposal is laughable at best for everyone tuning in on C-
SPAN across America today, it is about par for the course for the
Democrat Party that also thinks that suing OPEC, not increasing the
supply of American energy, will help bring down prices for consumers.
Second, this bill increases taxes on entrepreneurs that create jobs
and improve failing companies, and raises the long-term capital gains
rate on them from 15 to 35 percent, or even higher. So the people that
are the ``goose that are laying the golden egg'' are once again
slaughtered by this new Democrat proposal.
Once again, I know that most people around this country watching this
debate understand that raising taxes on job creators reduces jobs and
hurts our economy. But don't worry. You can blame President Bush for
that, for the actions of this Congress.
Unfortunately, this proposal is not a surprise, coming from a
Democrat Congress that believes when real estate and credit markets are
at their weakest, that is the optimal time to raise taxes and send our
economy over the edge.
Finally, the bill goes back on America's word by increasing taxes on
transactions with treaty countries by mandating a new reporting
requirement on private companies so that the IRS can know directly how
much is being paid to merchants every year, including the Social
Security or tax identification numbers associated with those
transactions.
Mr. Speaker, I have got to hand it to the new Democrat majority.
Every single week, they find out a new way to assault the taxpayer,
every single week they find a way to raise taxes, to increase spending,
and more rules and regulations. They did it again this week.
Congratulations to the new Democrat majority.
Mr. Speaker, I strongly oppose this tax increase, and I will tell you
that I will continue to stand up on the side of taxpayers and middle
class Americans who say enough is enough.
I reserve the balance of my time.
Mr. WELCH of Vermont. Mr. Speaker, I am the last speaker on our side.
I will reserve the balance of my time until the gentleman from Texas
has an opportunity to close.
Mr. SESSIONS. I thank the gentleman.
Mr. Speaker, I will tell you--you've already heard me say it--this
massive tax increase, once again, not only on the economy, but on
Americans, could be done a different way. It could be solved. It could
be solved by following through on promises that were made by both
parties to do something about the AMT.
We've got to do something. We continue to see middle class Americans
caught in the crossfire. Today, we see it's not just a crossfire with
inability to solve the problem, it's partially solved for 1 year by
raising $61 billion worth of new tax increases on Americans that they
will have to pay this next April.
{time} 1145
Mr. Speaker, since taking control of Congress in 2007, this Democrat
Congress has totally neglected its responsibility to do anything
constructive to address the domestic supply issues that have created
skyrocketing gas, diesel and energy costs that American families are
facing today. As a matter of fact, gas rose 10 cents a gallon across
America just in the last few days.
So, today, I urge my colleagues once again to vote with me to defeat
the previous question so this House can finally consider real solutions
to the energy problems and the high costs that
[[Page H6024]]
we are facing. If the previous question is defeated, I will move to
amend the rule to allow for consideration of H.R. 5656, which would
repeal the ban on acquiring advanced alternative fuels, introduced by
my good friend Jeb Hensarling of Texas back in March, almost 3 full
months ago.
This legislation would reduce the price of gasoline by allowing the
Federal Government to procure advanced alternative fuels derived from
diverse sources like oil shale, tar sands and coal-to-liquid
technology--in other words, marketplace answers--just by allowing the
government to do that.
Section 526 of the Energy Independence and Security Act of 2007,
which this Democrat Congress passed, places artificial and unnecessary
restraints on the Department of Defense in getting its fuel from
friendly sources, like coal-to-liquid, oil shale and tar sands
resources that are all abundant in the United States and Canada.
Needless to say, it raises grave national and economic security
concerns.
Mr. Speaker, this new Democrat Congress wants us to spend hundreds of
billions of dollars to go build another Dubai. They want consumers in
this country to pay higher costs. By doing so, it is a national
security issue. We must do something. Adding alternatives to the supply
chain is what is important.
Mr. Speaker, Canada currently is the largest U.S. oil supplier. It
sent 1.8 million barrels per day of crude oil and 500,000 barrels per
day of refined products to the United States in 2006. According to the
Canadian Government, about half of the Canadian crude is derived from
oil sands, with the oil sands production forecast to reach about 3
million barrels a day in 2015. Section 526, passed by this Democrat
House, choked this flow of fuel from one of our Nation's most reliable
allies and economic partners, and it increased our military's reliance
on fuels from unfriendly and unstable governments around the world.
Mr. Speaker, I ask unanimous consent to have the text of that
amendment and the extraneous material inserted into the Record prior to
the vote on the previous question.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. SESSIONS. Mr. Speaker, I urge my colleagues to vote for our
military, for energy independence for Americans, and to help American
consumers in this time of need and to support our economy by increasing
the amount of oil we import and produce from friendly and reliable
sources like Canada and from our own American, buy-American proven
resources, these advanced alternative fuels, by voting to defeat the
previous question.
Mr. Speaker, I yield back the balance of my time.
Mr. WELCH of Vermont. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, my friend from Texas characterizes a bill that will
provide tax relief to 25 million Americans as a tax increase, and it is
just flat out wrong. There are 25 million Americans. These are folks
who earn between $40,000, $50,000, $60,000 a year, who, if we do not
pass this legislation, will find themselves essentially being the
target of legislation that was intended in 1969 to have millionaires
pay their fair share.
We are talking about soldiers returning from Iraq and Afghanistan who
get a job as a police officer or as a carpenter. We are talking about
some our school teachers all across the country. We are talking about
sanitation workers who are struggling hard on $40,000 or $50,000 a
year, oftentimes with two people in that family who are working,
raising three or four kids. We are saying in this legislation that we
are going to protect you, because we know you need to have that money
to pay your bills.
We also have to level with the American people. This is going to be
$61 billion in tax relief for those incredibly hard-working Americans
who are getting clobbered by these $4-plus gas prices. They can't fill
up their tank. They have got cars or SUVs or trucks that they have to
drive, and they don't have the money to get something that is a little
bit more fuel efficient. A lot of them have long commutes. This
legislation is going to give them the opportunity to keep a little bit
more money in their pocket so they can make it from one end of the week
to the other and can pay their bills.
Now, the question is for this Congress, do we pay for it, or do we
put it on the credit card? As to what my friend from Texas is
characterizing as a tax increase, let me go through it, because I think
Americans have a commitment to fairness, and I think Americans know a
very commonsense proposition, and that is we have all got to bear the
burden. We all have to pay our share of the load.
There are two very glaring situations in the Tax Code, and attention
should be paid to them, and it is overdue. One is this hedge fund
exemption, where folks who make an awful lot of money pay at a capital
gains rate. What is unfair about it? If you are a financial advisor, if
you or I ask someone to help us figure how to invest our money, we pay
them a fee, and of whatever earnings they get, they pay a regular tax
rate just like any other American. Whatever that rate is--15, 20, 35
percent--that is what they pay.
If you are a hedge fund executive and you make billions, because of
this provision in the Tax Code, which I am calling a loophole, they get
to pay at a 15 percent rate. That is costing the treasury billions of
dollars, and it is also a glaring unfairness, because you literally
have a situation where the hedge fund manager who is doing the same
work as another financial advisor down the street pays one rate, 15
percent, while the other person doing the same work, working just as
hard but who is perhaps making less money, pays 35 percent.
You also have this bizarre situation where the person making this
immense amount of money pays a much lower tax rate than the secretary,
than the back office help in that very same firm. I think most
Americans see a basic fairness, and let's have the income tax rate
apply to earned income. That is what this provision does.
The second question is on the oil company exemption, and I am using
the word ``loophole.'' What is a ``loophole''? I think, commonly, you
know it when you see it. What a ``loophole'' is in this case is giving
taxpayer benefit to very successful companies that do very well in what
they do--explore for oil, sell it. We are taking money from the
taxpayers of America to give it to major American and foreign oil
companies. These are mature industries that are making hundreds of
billions of dollars, and they don't need taxpayer help.
So this legislation provides 25 million Americans with tax relief,
and it is the folks who need it. It asks other Americans, the hedge
fund executives, to pay at the income tax rate, and it has oil
companies foregoing what has been an incredibly good deal--tax credits
that they get at the expense of the American taxpayer.
I urge a ``yes'' vote on the previous question and on the rule.
The material previously referred to by Mr. Sessions is as follows:
Amendment to H. Res. 1297 Offered by Mr. Sessions of Texas
At the end of the resolution, add the following:
Sec. 3. Immediately upon the adoption of this resolution
the House shall, without intervention of any point of order,
consider in the House the bill (H.R. 5656) to repeal a
requirement with respect to the procurement and acquisition
of alternative fuels. All points of order against the bill
are waived. The bill shall be considered as read. The
previous question shall be considered as ordered on the bill
and any amendment thereto to final passage without
intervening motion except: (1) one hour of debate on the bill
equally divided and controlled by the chairman and ranking
member of the Committee on House Oversight and Government
Reform; and (2) an amendment in the nature of a substitute if
offered by Representative Waxman, which shall be considered
as read and shall be separately debatable for 40 minutes
equally divided and controlled by the proponent and an
opponent; and (3) one motion to recommit with or without
instructions.
____
(The information contained herein was provided by
Democratic Minority on multiple occasions throughout the
109th Congress)
The Vote on the Previous Question: What It Really Means
This vote, the vote on whether to order the previous
question on a special rule, is not merely a procedural vote.
A vote against ordering the previous question is a vote
against the Democratic majority agenda and a vote to allow
the opposition, at least for the moment, to offer an
alternative plan. It is a vote about what the House should be
debating.
[[Page H6025]]
Mr. Clarence Cannon's Precedents of the House of
Representatives, (VI, 308-311) describes the vote on the
previous question on the rule as ``a motion to direct or
control the consideration of the subject before the House
being made by the Member in charge.'' To defeat the previous
question is to give the opposition a chance to decide the
subject before the House. Cannon cites the Speaker's ruling
of January 13, 1920, to the effect that ``the refusal of the
House to sustain the demand for the previous question passes
the control of the resolution to the opposition'' in order to
offer an amendment. On March 15, 1909, a member of the
majority party offered a rule resolution. The House defeated
the previous question and a member of the opposition rose to
a parliamentary inquiry, asking who was entitled to
recognition. Speaker Joseph G. Cannon (R-Illinois) said:
``The previous question having been refused, the gentleman
from New York, Mr. Fitzgerald, who had asked the gentleman to
yield to him for an amendment, is entitled to the first
recognition.''
Because the vote today may look bad for the Democratic
majority they will say ``the vote on the previous question is
simply a vote on whether to proceed to an immediate vote on
adopting the resolution . . . [and] has no substantive
legislative or policy implications whatsoever.'' But that is
not what they have always said. Listen to the definition of
the previous question used in the Floor Procedures Manual
published by the Rules Committee in the 109th Congress, (page
56). Here's how the Rules Committee described the rule using
information form Congressional Quarterly's ``American
Congressional Dictionary'': ``If the previous question is
defeated, control of debate shifts to the leading opposition
member (usually the minority Floor Manager) who then manages
an hour of debate and may offer a germane amendment to the
pending business.''
Deschler's Procedure in the U.S. House of Representatives,
the subchapter titled ``Amending Special Rules'' states: ``a
refusal to order the previous question on such a rule [a
special rule reported from the Committee on Rules] opens the
resolution to amendment and further debate.'' (Chapter 21,
section 21.2) Section 21.3 continues: Upon rejection of the
motion for the previous question on a resolution reported
from the Committee on Rules, control shifts to the Member
leading the opposition to the previous question, who may
offer a proper amendment or motion and who controls the time
for debate thereon.''
Clearly, the vote on the previous question on a rule does
have substantive policy implications. It is one of the only
available tools for those who oppose the Democratic
majority's agenda and allows those with alternative views the
opportunity to offer an alternative plan.
Mr. WELCH of Vermont. Mr. Speaker, I yield back the balance of my
time, and I move the previous question on the resolution.
The SPEAKER pro tempore. The question is on ordering the previous
question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. SESSIONS. 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.
____________________