[Congressional Record Volume 157, Number 162 (Wednesday, October 26, 2011)]
[House]
[Pages H7084-H7090]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PROVIDING FOR CONSIDERATION OF H.R. 2576, MODIFYING INCOME CALCULATION 
FOR HEALTH CARE PROGRAMS, AND PROVIDING FOR CONSIDERATION OF H.R. 674, 
               3% WITHHOLDING REPEAL AND JOB CREATION ACT

  Mr. SCOTT of South Carolina. Mr. Speaker, by direction of the 
Committee on Rules, I call up House Resolution 448 and ask for its 
immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 448

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the bill (H.R. 
     2576) to amend the Internal Revenue Code of 1986 to modify 
     the calculation of modified adjusted gross income for 
     purposes of determining eligibility for certain healthcare-
     related programs. All points of order against consideration 
     of the bill are waived. The bill shall be considered as read. 
     All points of order against provisions of the bill are 
     waived. The previous question shall be considered as ordered 
     on the bill to final passage without intervening motion 
     except: (1) one hour of debate equally divided and controlled 
     by the chair and ranking minority member of the Committee on 
     Ways and Means; and (2) one motion to recommit.
       Sec. 2.  Upon the adoption of this resolution it shall be 
     in order to consider in the House the bill (H.R. 674) to 
     amend the Internal Revenue Code of 1986 to repeal the 
     imposition of 3 percent withholding on certain payments made 
     to vendors by government entities. All points of order 
     against consideration of the bill are waived. The amendment 
     printed in the report of the Committee on Rules accompanying 
     this resolution 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 chair and ranking minority member of the Committee on 
     Ways and Means; and (2) one motion to recommit with or 
     without instructions.
       Sec. 3. (a) In the engrossment of H.R. 674, the Clerk 
     shall--
       (1) add the text of H.R. 2576, as passed by the House, as 
     new matter at the end of H.R. 674;
       (2) conform the title of H.R. 674 to reflect the addition 
     of the text of H.R. 2576, as passed by the House, to the 
     engrossment;
       (3) assign appropriate designations to provisions within 
     the engrossment; and
       (4) conform provisions for short titles within the 
     engrossment.
       (b) Upon the addition of the text of H.R. 2576, as passed 
     by the House, to the engrossment of H.R. 674, H.R. 2576 shall 
     be laid on the table.

                              {time}  1230

  The SPEAKER pro tempore. The gentleman from South Carolina is 
recognized for 1 hour.
  Mr. SCOTT of South Carolina. 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.


                             General Leave

  Mr. SCOTT of South Carolina. Mr. Speaker, I ask unanimous consent 
that all Members have 5 legislative days to revise and extend their 
remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from South Carolina?
  There was no objection.
  Mr. SCOTT of South Carolina. House Resolution 448 provides for a 
closed rule for the consideration of H.R. 674, a bill to amend the 
Internal Revenue Code of 1986 to repeal the imposition of 3 percent 
withholding on certain payments made to vendors by government entities, 
and H.R. 2576, to amend the Internal Revenue Code of 1986 to modify the 
calculation of modified adjusted gross income for purposes of 
determining the eligibility for certain health care-related programs.
  Mr. Speaker, I rise today in support of this rule and the underlying 
bills. What we have here is something very simple: a bill to save jobs 
in America and a way to pay for it through a simple technical fix in 
the Patient Protection and Affordable Care Act, which is supported by 
the President and many Democrats in this Chamber.
  H.R. 674, or what I call the Saving American Jobs Act, would repeal 
the 3 percent withholding requirement on government payments to 
businesses, both large and small. This is truly a bipartisan bill with 
more than 60 Democrats among the 269 cosponsors. Even the President 
supports changing the withholding tax. The tax is a job killer, plain 
and simple.
  Beginning January 1, 2013, government agencies at all levels--
Federal, State and local--will have to withhold 3 percent of their 
payments to businesses for goods and services. For many small 
businesses, this has the potential to completely wipe out their profit 
margins. At a time when we have a desperate need to create jobs and to 
create the environment for job creation, the withholding tax does the 
exact opposite. For many State and local governments, the 
implementation costs will be huge at a time when their budgets are 
already stretched thin.
  For example, in my home State of South Carolina, the State 
Comptroller estimates the implementation costs associated with this tax 
will take up 11.5 percent of its budget. This tax punishes all 
businesses for the sins of a few, automatically and wrongly assuming 
all job creators who do business with the Federal Government are 
somehow

[[Page H7085]]

evading full taxation. The last I checked, we should be encouraging 
people to follow the law, not penalizing them for doing so.
  The tax also treats all businesses the same regardless of their 
taxable incomes. In the construction industry, for example, where 
unemployment is currently at 13.5 percent, companies rarely have a 
pretax profit margin of more than 3 percent. Therefore, a 3 percent 
withholding tax would completely wipe out their profit margins. As a 
former small business owner myself, I can assure you this is not the 
kind of math that leads to job creation.
  This tax will also harm local governments that are already hurting 
for dollars by placing on them an unfunded mandate to collect a Federal 
tax. Again, as former chairman of the Charleston County Council, this 
is more math that just doesn't add up.
  With unemployment still at 9 percent, our job creators need capital 
to invest and long-term certainty in the Tax Code. Taking hard-earned 
dollars away from our job creators will only lead to higher prices, 
lower wages, and lost jobs.
  Once again, Mr. Speaker, I rise in support of this rule and the 
underlying legislation. I encourage my colleagues to vote ``yes'' on 
the rule and ``yes'' on the underlying bills, and I reserve the balance 
of my time.
  Mr. HASTINGS of Florida. I yield myself such time as I may consume.
  Mr. Speaker, I thank my friend for yielding the time, and I rise 
today in opposition to the combined rule for H.R. 674 and H.R. 2576.
  The underlying bill, H.R. 674, repeals the 3 percent withholding for 
taxes on payments to government contractors, and H.R. 2576 will make 
health care unaffordable for 500,000 Americans--that's not according to 
me but according to CBO--leaving them with no choice but to drop their 
coverage. This bill will also increase the costs or reduce the coverage 
for many more Americans, including individuals with severe 
disabilities.
  The pairing of these two bills is not, in my considered opinion, an 
appropriate use of our Nation's Tax Code, and in my opinion, does 
nothing to create jobs. It is part of the same old ``all or nothing'' 
majority strategy that led to the debt ceiling standoff earlier this 
year.
  The Republicans have taken a bipartisan idea--and it is bipartisan, 
as my good friend from South Carolina said--that would actually put 
money directly in the pockets of hardworking Americans and make its 
passage contingent on a bill that rehashes the health care reform 
debate from the last Congress. Once again, my colleagues have chosen to 
play politics with the lives of middle class and working poor 
Americans.
  The withholding requirement, itself, was passed in 2005 when 
President George W. Bush was in the White House and when Republicans 
had majorities in both the House and the Senate, but it was never 
implemented, and it has been put off a number of times.
  Today, there is broad support for repealing this Republican-created 
provision. H.R. 674 has, as my friend said, 269 bipartisan cosponsors. 
Since Republicans have now brought a bill to the floor that would 
repeal this requirement, it is clear that this measure should not be 
combined, as in this rule, with H.R. 2576.
  Getting rid of this provision will keep administrative costs down and 
assist American businesses during these challenging economic times. 
However, Republicans want to pay for the 3 percent bill by making it 
harder for retirees, the disabled, and poor to get access to health 
insurance. This is, yet again, an inappropriate use of our Tax Code.
  This bill is known as the MAGI bill, ``modified adjusted gross 
income.'' It repeals the provision in the Affordable Care Act that 
allows individuals and families to exclude nontaxable Social Security 
benefits from their incomes when determining their eligibility for 
health care benefits. This definition would also apply when qualifying 
for Medicaid and Federal subsidies to buy private insurance in the 
State-run exchanges. According to the Joint Committee on Taxation, the 
exclusion of nontaxable Social Security benefits is typical when 
applying income limitations to tax benefits.
  Regardless of the facts, my friends in the majority have decided to 
throw retirees and disabled individuals under the bus in order to 
offset a completely unrelated bill.

                              {time}  1240

  My friends on the other side of the aisle claim that this is about 
equity and fairness, but is it equitable for as many as 500,000 
Americans to lose all their health care coverage as a result of this 
measure? What are we saying to these individuals; sorry, 500,000 of you 
are out of luck? Is it fair to make health care less accessible to low- 
and middle-income individuals rather than close loopholes and cancel 
special tax deals for wealthy, wealthy oil companies?
  In contrast, the Democrats' substitute offered by Mr. Levin, the 
ranking member of the Ways and Means Committee, will make oil companies 
pay their fair share of taxes, thereby reducing the deficit by $5.3 
billion over 5 years and $12.8 billion over 10 years.
  It is clear that H.R. 2576 is not about equity at all. It's about 
forcing individual taxpayers to shoulder the burden of business tax 
provisions. H.R. 2576 will impose higher costs on retirees and persons 
with severe disabilities, shifting them out of Medicaid coverage or 
requiring that they contribute significantly more of their income for 
health insurance coverage through reduced tax credits.
  How do Republicans intend to offset the cost, such as increased trips 
to the emergency room? How do you offset that association with half a 
million Americans suddenly losing their health insurance coverage? The 
Tax Code should not be used to effectively reduce health care coverage 
and increase costs for those least able to afford it.
  Make no mistake, H.R. 2576 is yet another attempt by Republicans to 
undermine comprehensive health care reform. Last week, the Senate 
Republicans forced a vote on the 3 percent withholding repeal bill, but 
it too failed over unreasonable Republican demands.
  Where are the jobs? Instead of passing a jobs bill, Republicans are 
redefining the rules to make health care less accessible for a 
considerable number of Americans. These bills together are a new 
approach to cutting the deficit for Republicans. Until recently, they 
said that the only way to fix the deficit was to starve the beast, that 
is, spending cuts only. But with a bill like H.R. 2576 that takes away 
health care from hundreds of thousands of Americans, Republicans have 
decided that rather than starving the beast, it's better to feed the 
beast to our society's most vulnerable members.
  I reserve the balance of my time.
  Mr. SCOTT of South Carolina. Mr. Speaker, it's odd that as the 
American people continue to watch Congress asking for a bipartisan 
approach to what we do here, it's very odd for us to find ourselves in 
that position today saying to the American people, we are finally on 
the right page of a bipartisan approach. And as it relates to the whole 
undermining of the health care act, the President himself has released 
a statement, an administration policy statement, that simply says that 
he supports H.R. 2576.
  The fact of the matter is if we are going to find ways to save 
Medicaid and keep it available for the next generation, we must do 
things in a bipartisan approach that actually solve the problems 
without increasing the system necessarily.
  Mr. Speaker, I yield 5 minutes to the gentlelady from Tennessee, Mrs. 
Diane Black.
  Mrs. BLACK. I thank my colleague from South Carolina for yielding.
  I'd like to begin by stating that this legislation, H.R. 2576, is 
about fairness.
  When the news broke this summer that the Affordable Care Act 
contained a loophole that would allow middle-class Americans to receive 
Medicaid benefits, I, like many of my colleagues, was very concerned. 
The new income formula that determines eligibility for government 
subsidies health insurance, the modified adjusted gross income, or also 
known MAGI, deviated from all of the other Federal assistance programs, 
failing to include Social Security benefits as income.
  Under the health care law, a married couple with an annual income of 
over $60,000 could qualify to receive Medicaid benefits. Let me put it 
in more stark terms. Changing the income formula could result in 
individuals, whose incomes are up to 400 percent of the

[[Page H7086]]

poverty level, receiving Medicaid. This is unacceptable. I very 
strongly believe that it is our duty to ensure that the very scarce 
Medicaid dollars and resources are there for those who are in the most 
need.
  Again, let me State that the Affordable Care Act's income formula for 
Medicaid, CHIP, and exchange subsidies deviated from the eligibility 
requirements for all other Federal assistance programs. Supplemental 
Security Income, Supplemental Nutrition Assistance Program, also known 
as food stamps, Temporary Assistance for Needy Families, and public 
housing all--all--include the entire Social Security benefit as income. 
My bill, H.R. 2576, would add Social Security benefits back into the 
equation, realigning Medicaid with all the other programs and stopping 
these improper payments before they occur.
  It is incorrect to assert that this legislation unfairly targets 
widows, survivors, and the disabled. This is equivalent to asserting 
that the public housing or the SNAP are unfairly targeted to widows, 
survivors, disabled simply because, when accounting for the resource 
programs, they consider the source of income.
  The health care law's deviation from the typical method of counting 
income results in taxpayer dollars being directed to individuals who do 
not meet the standard definition of low income. According to the 
current law, a couple who both earned Social Security benefits and have 
a total income of $22,065 would have a higher income than a couple 
earning $58,840 for the purpose of determining eligibility for the 
Federal subsidies in the exchange. This is totally unfair.
  When asked about the MAGI glitch, CMS actuary Richard Foster said, 
``I don't generally comment on the pros and cons of policy, but that 
just doesn't make sense.'' Foster said the situation keeps him up at 
night and has previously compared the MAGI formula to allowing middle-
class Americans to receive food stamps.
  Additionally, Richard Sorian, the HHS assistant secretary for Public 
Affairs, conceded that ``as a matter of law, some middle-income 
Americans may be receiving coverage through Medicaid, which is meant to 
serve only the neediest Americans.''
  Now, it is important to note that my legislation does not take away a 
benefit from anyone on the Medicaid rolls today. MAGI would not be in 
effect until 2014, so it's important that we bring Medicaid back into 
line with all of the other Federal assistance programs as soon as 
possible.
  Additionally, my legislation enjoys bipartisan support. In the 
Senate, HELP Committee Ranking Member Mike Enzi has a companion bill, 
and President Obama himself, as has already been noted, recognizes the 
problem. In his recent debt reduction plan, the President explicitly--
explicitly--proposes that the entire amount of Social Security benefits 
be included in the definition of income. And, as has already been 
stated, there was a statement of administration policy put out 
yesterday, and I want to read that to you:
  The administration supports H.R. 2576, which could change the 
calculation of modified adjusted gross income, as defined in section 
1401 of the Affordable Care Act, to include both taxable and nontaxable 
Social Security benefits.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. SCOTT of South Carolina. I yield the gentlelady an additional 30 
seconds.

                              {time}  1250

  Mrs. BLACK. This commonsense bipartisan solution would bring Medicaid 
into line with all of the other Federal assistance programs and ensure 
that the program is there for those who are in the most need. That is 
very important. Furthermore, and I believe this cannot be emphasized 
enough, according to CBO and the Joint Tax Committee estimates, this 
bill could save taxpayers approximately $13 billion over 10 years. 
Considering our $14 trillion in national debt, closing this loophole as 
soon as possible is good policy on a number of levels.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 1\1/
2\ minutes to the distinguished gentleman from Pennsylvania (Mr. 
Altmire).
  Mr. ALTMIRE. I rise in support of this legislation, which is 
bipartisan and cosponsored by almost two-thirds of our colleagues in 
this Chamber. Earlier this year, Congress passed another bill with 
almost equal support when we repealed the burdensome 1099 requirement. 
Today, we are again working in a bipartisan way to make this 
commonsense change to the Tax Code that will provide much needed 
certainty to businesses around the country.
  I've heard from numerous small businesses in my district that if the 
3 percent withholding provision goes into effect as scheduled, firms 
that do business with the Federal, State, and local governments will 
face what amounts to a tax increase at this time when they can least 
afford it. Congress has previously voted to delay implementation of 
this provision, but we can do more to show businesses in western 
Pennsylvania and across the country that we are serious about helping 
them succeed.
  I urge my colleagues to join me in permanently repealing the 3 
percent withholding tax provision.
  Mr. SCOTT of South Carolina. Mr. Speaker, I yield 2 minutes to the 
gentleman from Pennsylvania, Mr. Mike Fitzpatrick.
  Mr. FITZPATRICK. I thank the gentleman for the time and also for his 
leadership in bringing both parties together around this idea that will 
create jobs in the United States. I rise in support of the rule today 
and in support of the underlying legislation.
  Throughout the past year, I have heard over and over again from small 
businesses, from women-owned businesses, from contracting businesses, 
hospitals and the like that this rule, which essentially amounts to a 
tax, will hinder business' ability to compete, grow, and thereby create 
jobs. This bill that's before the House today would right a wrong that 
unnecessarily punishes good actors, small businesses, and local 
governments who do business with the Federal Government in good faith. 
Small businesses, who often operate with the thinnest of margins, will 
be unnecessarily targeted in the Federal Government's zeal to capture 
more money. Small and medium-sized businesses are being looked to for 
our economic recovery. We cannot simultaneously ask American companies 
to begin hiring again while we withhold the capital that they require 
to grow.
  Additionally, while the 3 percent withholding bill was originally 
well-intentioned, implementation of this rule has been continuously 
delayed, most recently in the 2009 stimulus bill and again by the IRS 
in May of 2011. This is a clear indication of the widespread 
recognition that this provision is costly and harmful to our economy.
  So, Mr. Speaker, I cosponsored this underlying bill because it is 
bipartisan legislation that will be good for the economy and will help 
create certainty for job creators. The President has expressed support 
for this repeal. I urge swift action on the legislation in the Senate. 
I ask my colleagues to support the rule and the underlying bill.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 3 
minutes to my good friend, the distinguished gentleman from New Jersey 
(Mr. Andrews).
  (Mr. ANDREWS asked and was given permission to revise and extend his 
remarks.)
  Mr. ANDREWS. I thank my friend from Florida for yielding.
  As we meet this afternoon, 15 million Americans are unemployed. The 
President has a proposal to put people to work modernizing 35,000 
schools in America, but we're not voting on that bill.
  The President has a proposal that would avoid a $1,500 a year tax 
increase on middle class Americans January 1 if we don't act, but we're 
not voting on that bill.
  The President has ideas to help the real job creators, the small 
businesses of this country, get bank loans from the people they bailed 
out with their tax dollars in the TARP bill a couple of years ago, but 
we're not voting on that bill.
  Now, we are voting on a bill that we should support that says that 
businesses should not have to make an interest-free loan to the 
government when they do business with the government. I'm for that. But 
you do need to understand the way this bill is paid for.

[[Page H7087]]

This bill does have an offset, meaning it will not add to the deficit. 
I think we're all for that. But it's important to understand the way we 
make that decision. There were two options as to how we might take care 
of that offset. We said let's go to the industry that's had the most 
successful year in its history, the oil industry, and stop giving our 
tax dollars to the oil industry when they're making record profits. 
That idea is not up for a vote.
  What is up for a vote is a provision that may make some sense. It may 
make some sense. It essentially deals with the adjustment formula for 
benefits under the new health care law. But we're not really sure 
exactly how the proposal will operate. There is a risk that some 
deserving middle class people will pay higher health insurance premiums 
if this is not done in the right way.
  So understand this: The first way we could have paid for this bill 
would be to go to the oil industry and say you've had enough time at 
the public trough, you're making record profits, no. Or we could say 
let's roll the dice and let's try this experiment with the health 
premiums of middle class people. Guess who won?
  Now we thought it would be a good idea to at least put the two ideas 
up for a vote, but this rule doesn't do that. So the House will have to 
work its will today on the underlying bill. I'm going to vote for the 
underlying bill, but I'd really look forward to voting next week--and 
let me say one other thing. The plan for the House the rest of the year 
is to be here another 14 days between now and New Year's Day, and take 
the rest of the year off. A lot of Americans are going to have the rest 
of the year off, too--involuntarily, because they're out of work. Let's 
get to the business of creating an environment where small businesses 
create jobs for the people of this country. Let's put Americans back to 
work after we do this good business of today.
  Mr. SCOTT of South Carolina. Mr. Speaker, one of the things that is 
so important for us to recognize is the importance of living within our 
means and allowing our ability to control our spending to dictate what 
we are able to use, as opposed to having more tax increases as a way to 
fund the resource priorities of this Nation.
  I yield 3 minutes to the gentleman from Oklahoma, Mr. James Lankford.
  Mr. LANKFORD. Mr. Speaker, I rise in support of the rule and the 
underlying bill, H.R. 674, which repeals the 3 percent withholding 
requirements on State and local governments for goods and services. The 
3 percent withholding requirement is just another layer of burden and 
unfunded mandates on our States, cities, counties, and private 
entities.
  Withholding 3 percent of a contract at the start just in case sets a 
horrible precedent. When we find a bad actor in the contracting 
community, we should have aggressive prosecution, suspension, and 
debarment. But, we should not have a national policy that assumes every 
contractor in America is a tax cheat. It's a dreadful policy, and it's 
horrible economics.
  Let me break this down to what it will mean for communities in my 
State of Oklahoma. In Oklahoma City, it will cost between $75,000 and 
$250,000 to implement the initial financial system and all of the 
modifications to comply with these rules. After that, it's expected to 
cost at least $15,000 a year to maintain those modifications in the 
financial system.
  To ensure that Oklahoma City fully complies with these mandates to 
maintain the financial system, Oklahoma City estimates that they're 
going to have to hire two additional full-time employees. Now I 
understand that we're all about job creation here, but our job creation 
should focus on goods and services and taking care of people, not 
filling out even more Federal forms.
  In Edmond, Oklahoma, they're concerned as to how the 3 percent 
withholding requirement would eventually be passed along to the buyer, 
increasing the overall cost. Edmond's annual contractual services 
expenditures line is over $130 million this year. If the cost of these 
products and services are increased by 3 percent to cover the 
withholding costs, Edmond's expenditures could be raised by $4 million. 
Worse yet, that could mean contractors choosing not to bid on city and 
local projects, ultimately decreasing competition and increasing the 
cost.
  A contractor in the small town of Tecumseh, Oklahoma, told me that 
with a down economy, he only had a 2 percent profit margin last year. 
The 3 percent requirement would stifle his cash flow and would force 
him to increase his bids, which of course would be passed along to the 
taxpayer.
  Mr. Speaker, as we continue to find ways to kick-start our economy 
and encourage job growth in the private sector, I'm hopeful we can come 
to a bipartisan agreement to reduce the regulatory burden on State and 
local governments and encourage private sector growth. I'm sure it was 
well intentioned at the start, but it is time to eliminate this 
burdensome regulation.

                              {time}  1300

  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 3 
minutes to my friend and classmate from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. I appreciate the gentleman's courtesy.
  I am pleased that the House will deal with the repeal this week. I 
was honored to be the principal cosponsor with my good friend, Wally 
Herger, of the Ways and Means Committee and to have a bipartisan effort 
to move this legislation forward.
  I didn't vote for this bill in 2005, in the first place. And I have 
been working to fix it ever since the impact was revealed to us. Tax 
compliance is an important goal. We have somewhere in the neighborhood 
of $200 billion to $300 billion a year that is owed to the Federal 
Government to meet our obligations and reduce burdens on others that is 
not paid. But this bill is decidedly not the approach to take.
  My good friend, Congressman Hanna, a freshman Republican from upstate 
New York, has an excellent op-ed in today's Roll Call that outlines how 
onerous it is from his perspective of having been a small contractor.
  There are three points that I think ought to be made as we go 
forward. First of all, we got this bill because we didn't follow 
regular order in 2005. I don't think there was ever a hearing before 
our Ways and Means Committee that talked about this bill that allowed 
contractors and small businesses to be able to explain the impact. I am 
very pleased that I think Chairman Camp is committed to trying to 
follow regular order in this Congress, unlike what happened in 2005.
  The second point is that this reveals a flaw in the CBO calculation. 
I'm not faulting CBO. They're following their rules. But they assume 
that the Federal Government has the capacity to implement it. And they 
only count the revenues. Well, you don't have to go very far to 
understand that this wouldn't just be a burden on small business and it 
wouldn't just be a burden on State and local government. The cost of 
compliance for the Federal Government itself will, I guarantee you, be 
more than the amount of money that would be collected.
  Finally, I felt that we could do better in paying for it; but, 
frankly, I think the situation that we are in in the months ahead is 
that we're going to need to do both. We will be making the adjustment 
that is advanced by my friends from the Ways and Means Committee, and 
we will be approving the elements that are in the motion that the 
Democrats would do in terms of fixing an egregious tax loophole for oil 
companies that only serves to improve their bottom line and does 
nothing to increase oil supply, does nothing to lower prices. But I 
will try and move both of those forward.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HASTINGS of Florida. I yield the gentleman 1 additional minute.
  Mr. BLUMENAUER. I very much appreciate it. I get a little wound up on 
this. But we've been working on it for a long time.
  I want to conclude by saying that I hope we don't allow some 
strategic differences on the floor of the House between the two parties 
in terms of priorities. As I say, we will end up approving both these 
approaches because the scale of our deficit is such that we need to do 
it. The administration will support it, and both parties will 
ultimately get there. And I think the American public will support it.
  But we need to come together to make sure that this legislation that

[[Page H7088]]

we're working on this week does not fall victim to crossed signals on 
the other side of the Capitol. We need to work with the other body. We 
need to send a strong signal here to make sure that this mistake from 
2005 is corrected now and spares unnecessary hardship for our business 
community and also for State and local government and, indeed, for the 
Federal Government itself.
  Mr. SCOTT of South Carolina. Mr. Speaker, I yield 1 minute to the 
gentleman from Illinois, Mr. Randy Hultgren.
  Mr. HULTGREN. I want to thank my colleague from South Carolina.
  Mr. Speaker, I rise today in support of both the bills under this 
rule and, in particular, H.R. 674, repealing the 3 percent withholding 
tax on government contracts.
  It may have seemed like a good idea at the time, but now we clearly 
see that it is a mandate that drains precious resources from America's 
job creators--small businesses. The profit margin for many businesses 
affected by the proposal is often less than the 3 percent mandate. The 
withholding tax will create substantial cash flow problems and drain 
capital from many businesses that could otherwise be used to invest and 
grow or hire more workers.
  Mr. Speaker, I join with many business owners, State and local 
governments, and educational institutions in supporting H.R. 674, to 
repeal this tax, and provide a meaningful step towards instilling 
certainty in job creators in getting this economy moving on the right 
track.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 2 
minutes to the distinguished gentleman from Massachusetts (Mr. 
Keating).
  Mr. KEATING. Mr. Speaker, I hope the previous question is defeated so 
I can offer an amendment, along with my colleagues Mr. Levin and Mr. 
Bishop, to really correct something that, frankly, is outrageous. It's 
not only outrageous, but it is exhibit A of what's wrong with this 
Congress.
  The underlying bill to do away with the 3 percent withholding, I've 
met with my local business people, had discussions, and this is a great 
opportunity for bipartisan efforts to help create some jobs and help 
small businesses go forward. We're actually in agreement with something 
that's going to do all those things; and I'm proud to support that, and 
I'm proud to reach across the aisle and support that.
  But I have got to tell you, you just can't mess things up more than 
you're messing things up here, because the offset that was taken by the 
majority party is a tax on people that have Social Security and 
Medicaid. Why are you doing that when you're trying to get people some 
economic benefits through businesses, and really an effort that we both 
should be applauded for working together on.
  The amendment that I'm going to offer is going to correct that. It's 
going to correct it in a way that makes perfect sense and is exhibit A 
about what can be right about this Congress. We're going to take away 
that oil subsidy that in the next several years is going to amount to 
$43.6 billion in a windfall to our richest, most profitable companies 
that don't need it. Incidentally, 93 percent of that windfall goes to 
preferred stock buy-backs and CEO remuneration that is not necessary.
  So we have something we agree on. We have something that's going to 
be a benefit and that's going to create jobs and help small businesses. 
Now, we can go one of two ways in terms of paying for that.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HASTINGS of Florida. I yield the gentleman an additional 30 
seconds.
  Mr. KEATING. We can have an additional tax on the Medicaid and Social 
Security recipients, or we can continue to reward the CEOs and Big Oil. 
That's not a tough choice.
  So I hope that the previous question is defeated so we can offer 
something that makes sense. It's time for this Congress to get it 
right. We have a chance to do it, and I hope we will.
  Mr. SCOTT of South Carolina. I would just encourage my friends on the 
left who want to raise taxes, raise taxes if you can, but the bottom 
line is that raising revenues does not make you more responsible, does 
not make you use the revenues that you currently have more responsibly. 
So the notion of raising taxes to use that as a fix to this situation 
is inconsistent with the reality and is part of the alternate universe 
that we ought not be a part of.
  Mr. Speaker, I yield 1 minute to the gentleman from Illinois, Mr. 
Donald Manzullo.
  Mr. MANZULLO. I rise in support of the rule and the underlying bill.
  Instead of going after tax delinquents, the law punishes everyone for 
the failings of a few. When I chaired the Small Business Committee 
several years ago, I saw a lot of harm and injuries taking place to 
small business people. This is a tough one. H.R. 674 would repeal that.
  The 3 percent withholding rule disproportionately hurts small 
businesses. I met with several electrical contractors in my office 
recently, and the first thing on their minds and their hearts was the 
fact that this should be repealed because it simply does not make 
sense.
  The bill would repeal the onerous law to the benefit of farmers and 
others who sell goods and services to the government at all levels, but 
also it repeals an unfunded mandate imposed upon State and local 
governments that requires them to be the tax collectors for the IRS. 
This bill would free up precious financial resources so businesses have 
the flexibility to hire more workers to complete the task at hand. I 
urge my colleagues to support this bipartisan bill.

                              {time}  1310

  Mr. HASTINGS of Florida. Mr. Speaker, I would advise my good friend 
from South Carolina that I am the last speaker. If he has other 
speakers, then I will reserve my time.
  Mr. SCOTT of South Carolina. We have one more speaker.
  Mr. HASTINGS of Florida. I reserve the balance of my time.
  Mr. SCOTT of South Carolina. Mr. Speaker, I yield 1 minute to the 
gentleman from Florida, Mr. Dennis Ross.
  Mr. ROSS of Florida. I thank the gentleman for yielding.
  Mr. Speaker, I rise in support of the rule and the underlying bill.
  Now more than ever, regulatory and tax reform are needed. The 3 
percent contractor withholding requirement is yet another onerous 
regulatory tax policy that will hinder small business' ability to 
survive and hire new employees. The 10.6 percent unemployment in my 
home State of Florida cannot handle another government job-killing 
regulation.
  Repealing this legislation will ensure America's small businesses are 
not assessed another regulatory cost that will either be passed on to 
consumers in cost or will force another small business to shut its 
doors.
  The 3 percent withholding requirement was originally intended to make 
sure contractors paid taxes. In reality, it is simply a one-size-fits-
all government approach to a problem filled with unintended 
consequences.
  One of the most tragic consequences could be the cost to our seniors. 
Ninety-five percent of Medicare physicians will be affected by this 
withholding tax. Our seniors should not suffer because our Tax Code is 
too confusing, too burdensome, and too big.
  Mr. Speaker, this regulation shows why we need a Tax Code that is 
flatter and smaller and why we need Medicare reform with fewer scare 
tactics and more choices.
  Mr. HASTINGS of Florida. I yield myself the balance of my time.
  Mr. Speaker, President Obama, as has been cited, along with many of 
our colleagues, supports changing the definition of ``modified adjusted 
gross income.'' But like on other occasions, I have disagreed with this 
President on matters, and in this instance I do. There are many in the 
institution who have a different view. But there is no reason why a 
bill reducing access to health care for millions of Americans has to be 
tied to a bill that will put money back into the pockets of middle 
class and working poor Americans.
  My colleagues on the other side of the aisle made a conscious 
decision to make it harder for Americans to pay their medical bills. 
Now, they could have just as easily tied this bill to one that reduces 
oil and gas subsidies. But listen, I just spoke to a group of students, 
about 15 or 20 of them from American University, and I put the question 
to them regarding this rule,

[[Page H7089]]

explaining to them some of the dynamics of the institution. I put the 
question to them: What would seem more sensible to you. Would it be 
that 500,000 people should and may lose their coverage under a measure, 
or that the oil companies and gas companies--and I added GE--that those 
kinds of companies that cause these kinds of matters not to have to 
come into play at this time in our institution?
  Now Democrats--Sander Levin, my good friend from Michigan, the 
ranking member--introduced a substitute that would eliminate oil and 
gas subsidies in order to repeal the withholding requirement while 
still allowing Americans to keep their health care coverage. Yet they 
wouldn't waive the rules for that, as they've done a number of times, 
my Republican friends, for their own amendments, proving once again 
that the rules are only sacred when oil and gas and big business 
profits are at stake.
  Mr. Speaker, if we defeat the previous question, an amendment will be 
offered to the rule to let Mr. Levin of Michigan or Mr. Bishop of New 
York or Mr. Keating of Massachusetts offer the amendment we tried to 
have made in order in the Rules Committee yesterday. As we've said, the 
amendment will roll back special tax loopholes for immensely profitable 
big oil companies. Is there anybody that doubts that?
  And I'd like to hear from these oil company representatives. They're 
entitled. They're not a person, as some have said; they're a 
corporation. And they don't have, I guess, a conscience because their 
bottom line is to make a profit. Well, they've made a lot of it, and 
all we're asking them to do in this case and others--and I'll be back 
down here another time asking them--to share some of it with the 
American people and not cause the pressing down to our States, the 
pressing down to our counties and municipalities, and causing people 
who are disabled--and, indeed, some will lose their insurance because 
of this.
  And maybe some of these persons have never had a disabled person. But 
I had a mother that was disabled for the last 2 years of her life, 30 
years previous to that being almost bedridden, and I know what 
disability is, as I'm sure some of my friends do here. Had I not been 
alive, she would have died many years earlier because she had no 
ability to provide for herself, yet Shell Oil and Exxon and GE and all 
these people do. And they're right about their profitmaking, but 
they're wrong about not being able to share it with the people.
  Mr. Speaker, I ask unanimous consent to insert the text of the 
amendment in the Record along with extraneous material immediately 
prior to the vote on the previous question.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. HASTINGS of Florida. Mr. Speaker, I urge my colleagues to vote 
``no'' and defeat the previous question, I urge a ``no'' vote on the 
rule, and I yield back the balance of my time.
  Mr. SCOTT of South Carolina. Mr. Speaker, we find ourselves at a 
place where we should have been at for many, many months, and that is 
working in a bipartisan way to save American jobs.
  Mr. Speaker, it is amazing that we have this opportunity to have the 
President's support with those of us on the right, to have the Democrat 
leadership joining us, 269 cosponsors on this legislation that simply 
says to the job creators: We believe in you.
  Mr. Speaker, today we have a very simple vote. We can remove an 
impediment to job creation from the backs of small businesses with no 
overall increase in government spending. That should be our vote today.
  I encourage all of my colleagues to support the rule and the 
underlying bill.
  Mr. McGOVERN. Mr. Speaker, here we go again. Another day in the House 
of Representatives, another day without a jobs bill. As a Red Sox fan, 
I'm not prone to quoting Yogi Berra--but this is deja vu all over 
again.
  This Tea Party-run Republican House is not only breaking House rules 
to move a bipartisan bill--something they said they would never do--but 
they are breaking these rules to protect big oil while taking 
healthcare away from low-income Americans.
  Talk about hitting the trifecta.
  Let's start with the rule. We have one rule for two bills, one bill 
repealing the 3% withholding requirement and another bill offsetting 
the costs of the first bill. Why have two bills come up under one rule? 
The only reason is because the Republicans want to shut down debate and 
limit the motion to recommit. That's why the rule combines these two 
bills into one bill after they are approved on their own.
  This is just one more example of this Republican leadership's 
continual streak of broken promises.
  If this weren't bad enough, this rule waives all points of order--
including the Budget Act. Why is this necessary? Well, that's because 
the 3% withholding bill violates the Budget Act twice.
  The sad truth is that the Chairman of the Subcommittee on Health, the 
gentleman from California Mr. Herger, didn't even know that his bill 
violated the Budget Act when he testified before the Rules Committee 
yesterday.
  Chairman Dreier, of course, tried to explain these violations but he 
was misinformed when he said the only reason for these violations was 
because the Senate did not pass a budget resolution. To correct the 
record, that's only one of the violations. The other violation is 
because this bill violates the House-passed budget resolution. I'm not 
one to defend the Ryan budget, but I'd like to think that the 
Republicans wouldn't use one bill to contradict legislation they passed 
earlier this year.
  And the Republican offset for the 3% withholding bill is a bad one--
it tightens Medicaid and health insurance exchange subsidy eligibility 
requirements. In other words, it prevents low-income individuals and 
families from being eligible for Medicaid, an egregious act during 
normal times but especially heartless in this difficult economy.
  Talk about turning a deaf ear to people who are struggling to make 
ends meet.
  Now, Democrats offered an amendment to replace the bad Republican 
offset by eliminating subsidies to big oil and gas companies. BP, for 
example, reported profits of $4.9 billion in the third quarter of this 
year even though their production decreased by 12 percent over that 
period. They made more money with less oil and we--the American 
people--still provide lucrative subsidies to them.

  Time after time, the Rules Committee has blocked my amendment ending 
the subsidy--siding with big oil and defending their subsidy--using 
procedural excuses.
  It's funny how the Republicans waive the rules when it's convenient 
for their agenda but they refuse to apply that same standard to all 
bills. In this case, Republicans waive all points of order against the 
underlying bills but cite germaneness and cut-go as reasons why they're 
not making the Democratic substitute in order.
  The truth is Republicans are hiding behind this flimsy excuse to 
protect big oil.
  To my Republican friends, let me set the record straight. You're 
making in order a non-germane bill to pay for the repeal of the 3 
percent withholding bill--a bill that violates the Budget Act--but 
you're saying an amendment ending subsidies for oil companies making 
billions of dollars each month can't be made in order because it's not 
germane?
  You're making in order a bill that violates the rules of the House--
and you're protecting this bill from these points of order--but you 
won't do the same for our proposal?
  It's truly outrageous that you're making two bills in order and using 
the rule to combine these two bills into one; that you're going out of 
your way to make in order your non-germane bill and you're not doing 
the same for our bill.
  It's truly outrageous that you're more interested in rationing 
healthcare for those who need it instead of ending subsidies for oil 
companies who continue to rake in billions of dollars of profits each 
quarter; and that you're hiding behind procedural excuses in order to 
get your way.
  Mr. Speaker, this is a process even Tom DeLay would marvel at.
  The following is a list of the instances when the Republicans have 
waived germaneness (Clause 7 of Rule XVI) and both cut-go and 
germaneness (Clause 10 of Rule XXI).

    Republicans' Waivers of Cutgo and Germaneness This Year So Far:


            Cutgo waivers--clause 10 of rule XXI (3 times):

  H.R. 3079 (H. Res. 425)--Panama trade bill
  S. 627 (H. Res. 375)--Budget Control Act of 2011
  S. 365 (H. Res. 384)--Budget Control Act of 2011


          Germaneness waivers--clause 7 of rule XVI (9 times):

  H.R. 839 (H. Res. 170)--HAMP Termination Act of 2011 (canceled a 
program to help homeowners modify their loans)
  H.R. 861 (H. Res. 170)--NSP Termination Act (canceled a program to 
redevelop abandoned and foreclosed homes and residential properties)
  H.R. 910 (H. Res. 203)--Energy Tax Prevention Act of 2011 (taking 
away EPA's authority to regulate greenhouse gases)
  H.R. 1315 (H. Res. 358)--Consumer Financial Protection Safety and 
Soundness Improvement Act of 2011 (weakened the Consumer Financial 
Protection Bureau)

[[Page H7090]]

  Senate amendment to H.R. 2608 (H. Res. 405)--CR I11Senate amendment 
to H.R. 2608 (H. Res. 412)--CR
  H.R. 658 (H. Res. 189)--FAA reauthorization
  H.R. 754 (H. Res. 264)--Intel Authorization
  H.R. 1892 (H. Res. 392)--Intel Authorization
  Vote no on the previous question, reject this rule, and reject the 
pay-for that violates the Budget Act and cuts healthcare for low-income 
families.
  The material previously referred to by Mr. Hastings of Florida is as 
follows:

     An Amendment to H. Res. 448 Offered By Mr. Hastings of Florida

       (1) In the first section of the resolution, strike ``the 
     previous question'' and all that follows and insert the 
     following:
       The previous question shall be considered as ordered on the 
     bill and on any amendment thereto to final passage without 
     intervening motion except: (1) one hour of debate equally 
     divided and controlled by the chair and ranking minority 
     member of the Committee on Ways and Means; (2) the amendment 
     printed in section 4, if offered by Representative Levin of 
     Michigan, or Representative Bishop of New York, or 
     Representative Keating of Massachusetts, which shall be in 
     order without intervention of any point of order, shall be 
     considered as read, and shall be separately debatable for 30 
     minutes equally divided and controlled by the proponent and 
     an opponent; and (3) one motion to recommit with or without 
     instructions.
       (2) At the end of the resolution, add the following:
       Sec. 4. The amendment referred to in the first section of 
     this resolution is as follows:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. REPEAL OF IMPOSITION OF 3 PERCENT WITHHOLDING ON 
                   CERTAIN PAYMENTS MADE TO VENDORS BY GOVERNMENT 
                   ENTITIES.

       (a) In General.--Section 3402 of the Internal Revenue Code 
     of 1986 is amended by striking subsection (t).
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2011.

     SEC. 2. DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
                   PRODUCTION ACTIVITIES NOT ALLOWED WITH RESPECT 
                   TO OIL AND GAS ACTIVITIES OF MAJOR INTEGRATED 
                   OIL COMPANIES.

       (a) In General.--Subparagraph (A) of section 199(d)(9) of 
     the Internal Revenue Code of 1986 is amended by inserting 
     ``(9 percent in the case of any major integrated oil company 
     (as defined in section 167(h)(5)))'' after ``3 percent''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (The information contained herein was provided by the 
     Republican Minority on multiple occasions throughout the 
     110th and 111th Congresses.)

        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 Republican 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.
       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 Republican 
     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 Republican 
     Leadership Manual on the Legislative Process in the United 
     States House of Representatives, (6th edition, page 135). 
     Here's how the Republicans describe the previous question 
     vote in their own manual: ``Although it is generally not 
     possible to amend the rule because the majority Member 
     controlling the time will not yield for the purpose of 
     offering an amendment, the same result may be achieved by 
     voting down the previous question on the rule. . . . When the 
     motion for the previous question is defeated, control of the 
     time passes to the Member who led the opposition to ordering 
     the previous question. That Member, because he then controls 
     the time, may offer an amendment to the rule, or yield for 
     the purpose of amendment.''
       In 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 Republican 
     majority's agenda and allows those with alternative views the 
     opportunity to offer an alternative plan.

  Mr. SCOTT of South Carolina. 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. 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.

                          ____________________