[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.
____________________