[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[House]
[Pages 17213-17261]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     FINANCIAL FREEDOM ACT OF 1999

  The SPEAKER. The unfinished business is the further consideration of 
the bill (H.R. 2488) to amend the Internal Revenue Code of 1986 to 
reduce individual income tax rates, to provide marriage penalty relief, 
to reduce taxes on savings and investments, to provide estate and gift 
tax relief, to provide incentives for education savings and health 
care, and for other purposes.
  The Clerk read the title of the bill.
  The SPEAKER. When proceedings were postponed on legislative day of 
Wednesday, July 21, 1999, pursuant to section 2 of the House Resolution 
256, 1 hour of general debate remained on the bill.
  The gentleman from Texas (Mr. Archer) and the gentleman from New York 
(Mr. Rangel) each have 30 minutes remaining.
  The Chair recognizes the gentleman from Texas, (Mr. Archer).
  Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Washington (Ms. Dunn), a very highly regarded and respected member of 
the Committee on Ways and Means.
  Ms. DUNN. Mr. Speaker, I rise today to express my enthusiastic 
support for the Financial Freedom Act of 1999. This bill provides 
essential tax relief for every American who wants to secure a better 
future for himself or herself and for their children. No other 
provision, Mr. Speaker, is as historic in this bill as the elimination 
of the death tax.
  The freedom to obtain prosperity and to accumulate wealth is uniquely 
American; and when unfettered, it is a wonderful thing to behold. Yet, 
the current tax treatment of a person's life savings is so onerous and 
so burdensome that children are often forced to turn over half of their 
inheritance to the Federal Government. It is as wrong as it is tragic, 
and it dishonors the hard work of those who have passed on.
  Today, Mr. Speaker, less than half of all family-owned businesses 
survive the death of the founder, and only about 5 percent survive to 
the third generation. Under current law, it is cheaper for an 
individual to sell his or her business prior to death and pay the 
capital gains than pass it on to their children. This is indeed 
terrible public policy.
  As a result, Congress has tried over the years to provide targeted 
death tax relief to certain people. First, we adopted a unified credit 
to protect small estates from taxation. With the rising tide of small 
business growth and the proliferation of retirement annuities, however, 
many middle class families are being pushed above this exemption.
  Secondly, Congress, in 1997, adopted a family-owned business 
exemption in addition to provide additional relief to families and to 
small family farms. It was a good idea at the time, but this exemption 
has proven to be a real boondoggle. It is a boondoggle for attorneys 
who must be hired by families trying to navigate their way through the 
14-point eligibility test.
  I recently asked an estate planner who advises 200 family-owned 
businesses how many of his clients qualify for this new relief. His 
answer was 10 out of 200. On average, only about 3 percent of family-
owned farms can qualify under this provision. As much as we try, it is 
just impossible to duplicate in law the complex relationships that 
exist in families in the real world.

[[Page 17214]]

  It is time to be bold.
  The Financial Freedom Act offers the only true relief that will work 
to complete the elimination of the death tax. The death tax is not a 
tax on wealth, it is a tax on the accumulation of wealth. That is why 
it is supported by the Black Chamber of Commerce, who feel that they 
have 3 generations to put together a legacy to create their power base 
in this society, and the death tax is their enemy. It is supported by 
the Hispanic Chamber of Commerce and the National Indian Business 
Council. These groups understand the truly devastating impact that the 
death tax has on the pursuit of wealth and power in our society.
  Mr. Speaker, I urge my colleagues to support the Financial Freedom 
Act. It encourages savings, investment risk, and the creation of 
wealth. It is also time, Mr. Speaker, I believe, to honor our most 
fundamental values, not tax them.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Matsui), a senior member of the Committee on Ways and 
Means.
  Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York, the 
ranking member of the Committee on Ways and Means, for yielding me this 
time.
  Mr. Speaker, in January of 1995, after 1 year of taking over the 
House of Representatives, the Republicans took probably the most 
irresponsible act I have seen in my 21 years in Congress when they shut 
down the Federal Government for a period of about 2 weeks. We had the 
threat of perhaps Social Security checks being withheld, veterans' 
benefits being withheld.
  I have to say that as I stand here on the floor of the House today, 
the tax bill that they have before us and the vote that they will take 
in a few hours is the second most irresponsible act that they have had 
in the last 5\1/2\ years since they have taken control of this 
institution.
  If this bill ever became law, and God forbid if it did, we would be 
cutting veterans' benefits by some 25 percent over the next 10 years, 
we would be cutting education benefits by 25 percent over the next 10 
years, we would be cutting Social Security and Medicare, and the 
Republicans whom we will be hearing from during the course of this 
debate, they have a lockbox that preserves the Medicare surplus and the 
Social Security surplus.
  That will only maintain the status quo. You will still have a cash 
flow problem in the year 2013, 14 years from now. And by the year 2035, 
just a generation from now, the whole Social Security system, in fact, 
will go bankrupt. That will be the consequence of this legislation.
  The legislation also does one other thing, and we have not been able 
to get really a distribution table to find out exactly where the 
benefits will go, but we do know some things. Over the next 10 years, 
people making $300,000 and above, families making $300,000 and above 
will get about 50 percent of this tax cut. So we are going to take away 
from veterans, we are going to take away from education, and we are 
going to take away from Social Security recipients to give to the most 
wealthy Americans in this country.
  So the fact of the matter is that this bill again is second in the 
most irresponsible act that I have seen in my 21 years here, next to 
the closure of the Federal Government in 1995.
  Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the gentleman from Iowa 
(Mr. Nussle), another respected member of the Committee on Ways and 
Means.
  Mr. NUSSLE. Mr. Speaker, come on. I would say to my colleague from 
California, I mean people out there listening to this, it cannot be as 
bad or as good as anybody is saying.
  Cutting education benefits. Last night we heard from colleagues 
saying, this is really small. It has no impact on my district at all. 
In fact, somebody came to the floor and said, my constituents only get 
$1 a month. And now we have colleagues coming to the floor saying this 
is the most irresponsible, devastating legislation to ever meet the 
Congress of the United States. Education benefits will be cut; veterans 
thrown out on the street. My goodness, how can it be that good and that 
bad all in one bill?
  Well, let me suggest to my colleague that it is not that good or that 
bad, but it does come down to a fundamental principle that all of us 
have to come to grips with.
  Number one, whose money is this? Whose money are we talking about? It 
is not yours, and it is not mine. It is not the Democrats'. It is not 
the Republicans'. It is not the Committee on Ways and Means. It is not 
the House of Representatives. This is not the government's money. These 
people who work so hard in your district, in my district, to send that 
money to Washington, it is their money, number one.
  Number two, we are not giving the money back. We are saying, keep it. 
We are saying, we believe you are good people in a great Nation who 
make better decisions about your daily lives than the government can 
for you. And yes, we need some of those resources to operate the 
Federal Government, but when we take enough, when we take too much, we 
are going to allow you to keep it in the future, because we believe you 
spend that money more wisely.
  Number three, I would ask the people who are listening to this 
debate, and I ask the Speaker and my colleagues to just speak common 
sense, what would you do if you had a little bit of extra money. This 
is what we are proposing. This is what the bill does. Throwing veterans 
out in the street, cutting education. Come on. We heard Medicare; we 
heard all of that for so many years. Nobody out there believes that. 
Nobody out there believes that. This is a great country. We do not do 
that to people.
  What we do is we say some of the money ought to go back to people and 
just stay there, let them spend it, and the rest of it ought to go to 
debt relief. We have an opportunity to pay down the national debt, the 
first time since 1969 that any serious attempt at all will be made to 
pay down the national debt. Is it enough? No, I would like to pay down 
more.
  Is this enough tax relief? No. I would love for people to be able to 
keep a little bit more. But this is a responsible balance. One-third 
tax relief; two-thirds debt relief. I would ask the people that are 
listening, does that not make sense, to keep a little bit and pay down 
the debt.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Speaker, I thank the distinguished gentleman from New 
York for yielding me this time.
  I came here in 1981. We had a $749 billion tax cut on the floor, and 
the rhetoric I heard was the same. The people need to keep their money.

                              {time}  1115

  We do not need all the money. We need to downsize government. And so 
we passed a $749 billion tax cut and we quadrupled the debt on our 
children and on our grandchildren, because we did not pay our bills.
  Ronald Reagan and George Bush asked for more spending in those 12 
years than the Congress appropriated.
  My friend says that we want to have people keep the money. That would 
be very nice. But guess what? The trigger which does not affect the 
middle class, the trigger that does not affect the middle class is that 
trigger which says the capital gains tax, the estate tax, and the other 
taxes that go to our most wealthy citizens will not be affected if the 
debt goes up, because they are locked in. It is only the little guys 
who will be adversely affected if the debt goes up.
  Situation normal.
  The same old same old or, as Ronald Reagan said in that famous 
debate, here we go again; on the road to more and more debt, not saving 
Social Security, not making sure that Medicare is there for those in 
the future.
  I would say to my colleagues that debt that they talk about paying 
down is all Social Security. Why? Because the trillion dollars that 
they use for the debt relief is the on-budget operating surplus. No 
money for defense, no money to stabilize and keep secure our economy.
  Here we go again. We did it in 1981 and quadrupled our deficit. Let 
us not

[[Page 17215]]

do it again to our children and grandchildren.
  Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. English), another respected member of the Committee 
on Ways and Means.
  Mr. ENGLISH. Mr. Speaker, I thank the chairman, the gentleman from 
Texas (Mr. Archer), for the opportunity to speak and I congratulate him 
on his extraordinary tax bill that we bring to the floor today.
  The Financial Freedom Act of 1999 legislation is a huge step toward 
restoring the American dream for millions of American families, the 
rhetoric on the other side notwithstanding. What they do not get is 
that in a market economy, robust economic growth is the most important 
catalyst for social justice. A growing economy means greater 
opportunity for all and greater access for the American dream.
  The Financial Freedom Act will stimulate economic growth by rewarding 
savings and investment and reducing the tax burden on the American 
economy. It does this by reducing all, all, individual income tax 
rates, cutting the capital gains tax, allowing small business a larger 
write-off on investments to create jobs and repealing the AMT, the most 
anti-growth feature in the current Tax Code.
  Mr. Speaker, it would also benefit communities and industries that 
have been passed by in the current prosperity. It contains tax relief 
for family farms and tax relief for our beleaguered domestic steel 
industry. It also calls for the creation of new American renewal 
communities in some of our most distressed localities where investment 
in old neighborhoods and new firms would be greenlined under this bill 
and low-income residents would be given new incentives to save through 
family development accounts for the thrifty.
  Finally, the Financial Freedom Act of 1999, instead of cutting 
education funding, makes college more affordable by extending tax 
breaks on student loans, permitting private universities to offer tax-
deferred prepaid tuition plans and exempting the earnings of all 
college tuition plans from taxation. In doing so, it makes the dream of 
higher education more accessible for millions of students in the 
struggling middle class.
  Mr. Speaker, now that the House Republicans have set aside an 
unprecedented $1.9 trillion for Social Security and Medicare, programs 
that they looted like Visigoths when they were in the majority. We 
embark today on an effort to return some $790 billion to the American 
taxpayer, growing the economy, and creating individual opportunity in 
the process.
  This legislation is much needed and well-deserved tax relief for the 
American people. I urge all of my colleagues to set aside the empty 
partisan rhetoric and to vote in favor of this important legislation. 
Strike a blow for a growing economy. Strike a blow for the middle 
class. Vote for this legislation.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Neal), a distinguished member of the Committee on 
Ways and Means.
  Mr. NEAL of Massachusetts. Mr. Speaker, Members on both sides of the 
aisle have said that the tax bill reported by the Committee on Ways and 
Means is a bill that makes budget priorities clear. These Members are 
right. This is a debate about Social Security and Medicare and paying 
down the Federal budget debt.
  Our priority on the Democratic side is clear. It is saving Social 
Security first, fixing Medicare, and making sure the Federal deficits 
from the last era do not return under an unreasonable tax bill offered 
by the Republican Party.
  As we all know, the 1981 tax bill was the leading cause of deficits 
we incurred during the past 15 years, but the Republican slogan today 
is clear. Extremism in the pursuit of a tax cut is no vice.
  This priority is a reckless tax bill based upon uncertain economic 
projections and based on unlikely assumptions about Draconian cuts in 
the future of government spending: programs like law enforcement, farm 
aid, education, veterans programs, to name just a few. They almost 
could not even get this tax bill to the floor because the moderates in 
their own party are suspicious of where this legislation will take us.
  On the Democratic side, we are not saying we are against tax cuts. We 
are simply saying, fix Social Security and Medicare first. Leave enough 
of a reserve to pay down the Federal debt and then talk about a modest 
tax cut initiative aimed at working class Americans, not the wealthiest 
among us who are not even clamoring for a tax cut at this time.
  Social Security is the Nation's premier program. It is the greatest 
achievement legislatively of this century. It has been crucial to the 
way elderly Americans have lived during the last 60-plus years and we 
have a chance now to protect it. Reject this bill. It is irresponsible 
and reckless.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Kentucky (Mr. Lewis), another respected member of the Committee on Ways 
and Means.
  Mr. LEWIS of Kentucky. Mr. Speaker, today I think the question in 
this debate boils down to one thing: Who do we trust?
  I arrived here in 1994, at the end of the 40-year period of Democrat 
rule of this House of Representatives. They were running 200-plus 
billion dollar deficits and created a $5 trillion debt. Government was 
growing at an exponential rate. They were ready and willing to place 
upon this country a government program that would have taken us over 
the line, a government program called socialized medicine. There was 
not enough money for them to spend. They just kept taking it out of 
Social Security and Medicare, wherever they could get the money to 
create larger government all the time.
  To hear them talk about debt reduction is amusing. Talk about 
revisionist history. We listened to it last night.
  When I came here, I signed a contract, the Contract with America, 
that would balance the budget, that would cut taxes, that would reform 
welfare, that would reduce the size of government and allow people to 
keep more of their money. They fought it every inch of the way.
  Yes, there was a government shutdown. Know why? Because the President 
would not sign the Balanced Budget Act that he is so wonderfully 
willing to take credit for today.
  The question is, who do we trust?
  They did not get the title ``tax-and-spend'' liberals for nothing. I 
think it is a very appropriate title and it still sticks with them 
today.
  The question is who do we trust? It is like if we believe them, it 
would be like asking Jessie James to guard the bank vault for a little 
while. I do not think we want to do that. I do not think we want to go 
back to 40 years of tax-and-spend liberals.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Baltimore, Maryland (Mr. Cardin), a member of the committee.
  Mr. CARDIN. Mr. Speaker, I was listening to my friend. I believe in 
the Contract with America there was the provision that it is wrong for 
us to enact laws that apply to the private sector and do not apply to 
us. One of those laws is truth in advertising. If we are going to 
comply with that law, this bill should not be called the Financial 
Freedom Act of 1999. It should be called the Financial Irresponsibility 
Act of 1999.
  Let us talk about debt reduction. My Republican friends say they are 
using two out of every three dollars for debt reduction, assuming there 
is $3 trillion in surplus in the next 10 years. There is only $1 
trillion in surplus. The other $1.9 trillion is in Social Security and 
we all agree that needs to be lockboxed. However, the Republican bill 
spends it. We do not have it.
  Then they spend the $1 trillion before we even receive it. There is 
not a dime for deficit reduction in their proposals.
  Truth in advertising. They jeopardize our economy. Then they talk 
about the thousands of dollars on a per capita basis that my 
constituent is going to receive. Why do they not tell everybody that 
that is a 10-year cumulative

[[Page 17216]]

number? Their tax year of 10 percent does not become real this year; 
only 1 percent during the next 3 years. We have to wait for 9 years for 
half of that to come into effect. Truth in advertising. Tell the people 
what they are doing.
  The height of irresponsibility is what happens in the out-years. They 
advertise this to be $1 trillion with interest during the first 10 
years, but it balloons to another $3 trillion in the next 10 years, 
just as the baby boomers are reaching age for Medicare and Social 
Security. They cannot do this bill and Social Security and Medicare. It 
cannot be done. They spend the Social Security money. They spend the 
surplus money twice. That is irresponsible.
  Then the Speaker tells us there is a provision in this bill to deal 
with the earnings limit, giving our seniors hope they can earn more. 
That is not in this bill. Truth in advertising. I know we have a speech 
and debate clause that protects us for our truthfulness on the floor, 
but let us be honest with our constituents. We have a chance to do it 
in the motion to recommit. It speaks to the priorities that we should 
be talking about. Fifty percent for deficit reduction; 25 percent for 
tax relief; and 25 percent for the other priorities, Social Security, 
Medicare, and veterans benefits.
  Support the motion to recommit.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Speaker, I am a farmer from Michigan. 
There is a lot of hogwash and rhetoric being shoveled on this tax 
debate. So I challenge, Mr. Speaker, the American people to try to 
separate the hay from the chaff.
  I came into Congress in 1993. It was a Democratic majority at that 
time and what they and the President did first off was increase taxes 
by $280 billion over the 5 years of the budget. They used the, $280 
billion tax increase to grow government.
  Let me report what this tax bill we're discussing today does over 5 
years. It reduces taxes $156 billion and reduces the public debate $800 
billion.
  What happened in 1993 was a slow-down of the economy. Four and a half 
years ago, the Republicans took the majority. The first thing we did in 
this Congress was have a rescission bill that reduced expenditures. We 
have held the line on expenditures. The Democrats have been complaining 
that Republicans are too frugal, they are not spending enough money. I 
look at the bill of the gentleman from New York (Mr. Rangel) that he is 
going to offer as a substitute, and as it turns out it is a tax 
increase.
  It is consistent with what the President has suggested. The President 
has schemed in his budget that we have a tax increase of $100 billion 
and that we expand the spending of government by that $100 billion. If 
the papers are correct, the Democrat leader over in the Senate is 
suggesting that we use one-third of the surplus to have a tax cut; we 
use two-thirds to expand this government. That is the danger. Who 
believes if we do not get this money out of town and back in the 
pockets of the workers that earned it, Washington politicians are not 
going to spend it. Unlike the growing of crops on the farm, the growing 
of government is not good. I am very interested and concerned with 
paying down the debt. Republicans have been in the majority for 4\1/2\ 
years. In that time we have cut spending, stopped spending the Social 
Security Trust Fund money and balanced the budget. For most every year 
that the Democrats were in the majority prior to 1995, they spent the 
Social Security Trust Fund surplus on other government programs and 
increased the debt of this country to $5 trillion.
  In the first 5 years of this tax proposal we pay down the public debt 
by $900 billion; $900 billion. Also we are doing more. With the tax cut 
we now require that Washington reduce the debt. Now we have a trigger.
  I would say to the gentleman from Texas (Mr. Archer), I hope the 
conferees will proceed with dedication to make sure that this tax bill 
assures that we continue our effort to pay down the debt.

                              {time}  1130

  Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
Georgia (Mr. Lewis), a member of the Committee on Ways and Means.
  Mr. LEWIS of Georgia. Mr. Speaker, the Republican tax bill is a ``do-
nothing'' bill. It does nothing to protect Social Security, nothing to 
strengthen Medicare, nothing to reduce our national debt, and next to 
nothing to help working Americans.
  Mr. Darrell Stinchcomb is a fifth grade teacher in the Atlanta public 
school system. Darrell loves to teach and works hard to educate the 
next generation. In return, he earns $32,000 a year. Unfortunately, 
this Republican tax bill does almost nothing to help working Americans 
like Darrell. Under the Republican plan, Darrell would get a tax cut of 
just $20 a month, $240 a year. Yet a person earning $200,000 a year or 
more would get a tax break of over $9,000. $240 for working people like 
Darrell, $9,000 for the richest people in America. That is not right. 
That is not fair. That is not just. It is a shame and a disgrace.
  Most working Americans will receive little or nothing under the 
Republican tax bill. It does nothing, not one thing, to protect Social 
Security and Medicare. Nothing, but nothing, to reduce the national 
debt. A thousand for the rich, pocket change for working Americans. 
That is the Republican tax bill.
  Mr. Speaker, when I was growing up in rural Alabama, I was 
responsible for raising the chickens. The first lesson I learned was 
never, ever to count your chickens before they hatch. This Republican 
tax bill spends billions of dollars before we have it in the bank. It 
is a mistake. It is irresponsible. It is not the right thing to do.
  We finally have an opportunity to protect the future of Social 
Security and Medicare, not just for ourselves and our parents but for 
future generations. The Republican tax bill is a step in the wrong 
direction. It is a step backward. I urge my colleagues to defeat this 
irresponsible bill.
  Mr. ARCHER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Louisiana (Mr. McCrery), another respected member of the Committee on 
Ways and Means.
  Mr. McCRERY. Mr. Speaker, I rise today primarily to thank the 
Chairman of the Committee on Ways and Means, the gentleman from Texas 
(Mr. Archer), to thank him for having the wisdom and the courage to put 
together a tax bill that addresses not just the high-profile popular 
calls for tax relief that grab the headlines and provide us politicians 
with applause lines, but a tax bill that provides tax relief to the 
business community in the United States in a way that will result in 
greater availability of capital in this country for investment, more 
jobs being created here, and more jobs being saved here.
  This is not only a responsible tax cut, it is a needed tax cut if we 
want American companies to be competitive in the world marketplace in 
the next century.
  Look, remember 2 years ago, when we Republicans cut taxes? We were 
called irresponsible then by the same people in the opposition party 
that are today calling us irresponsible for offering this tax cut. 
Remember their words? ``You cannot cut taxes and balance the budget.'' 
How many times did I hear that? Well, obviously they were wrong then. 
We did cut taxes and balance the budget. And they are wrong today.
  Mr. Speaker, I thank the gentleman from Texas for putting together an 
excellent tax cut and for helping American companies and American 
workers.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. McNulty), a member of the committee.
  Mr. McNULTY. Mr. Speaker, I thank my leader for yielding me this 
time.
  My father and my grandfather, two great public servants, taught me 
that Harry Truman was one of the finest presidents in the history of 
our country, I think that that was because he was possessed of such 
wonderful common sense. As a matter of fact, he became known for saying 
``Let's look at the record.'' And, Mr. Speaker, I think that is what we 
ought to do today.

[[Page 17217]]

  In 1981, Ronald Reagan came to office and promised the Nation a 
balanced budget in 3 years. He never delivered on that promise. Not in 
3 years, not in 4 years, not in 8 years, not in 12 years of the Reagan 
and Bush administrations. As a matter of fact, the opposite occurred.
  Because of the huge tax cut which was implemented at the beginning of 
his term, we had larger and larger deficits throughout those years--
$200 billion, $300 billion, $400 billion. And, yes, we quadrupled the 
national debt. All of the debt, Mr. Speaker, of the United States of 
America from George Washington to Jimmy Carter amounted to less than $1 
trillion. And in the 12 years of the Reagan and Bush administrations 
that went to over $4 trillion. That is the record.
  In 1993, Bill Clinton came to office and he promised to reduce the 
budget deficits. He did a lot more than that, Mr. Speaker. He 
eliminated them. And now we are having this wonderful debate about what 
to do with the extra money. That is the record.
  We have a decision to make, Mr. Speaker. We can go with the policy of 
the 1980s, which gave us ever-increasing deficits and quadrupled the 
national debt, or we can do what I am going to do. I am going to stick 
with the winners--with Clinton and Gore and Gephardt and that man 
sitting right there, the gentleman from New York (Mr. Rangel). I am 
going to support their program of saving Social Security, saving 
Medicare, and reducing the national debt.
  Mr. Speaker, I urge my colleagues to reject this bill and to support 
the Rangel substitute.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Connecticut (Mr. Shays).
  Mr. SHAYS. Mr. Speaker, I thank the distinguished Chairman of the 
Committee on Ways and Means for yielding me this time.
  I have spent 12 years of my life in this place working with others to 
try to get our country's financial house in order and balance the 
Federal budget. And as hard as we worked, we really did not see much 
improvement until Republicans gained the majority in this House. When 
we gained the majority, we saw deficits projected of $100 billion, $200 
billion dollars, going out for years and years and years.
  Because of our efforts, we have reversed that. And now we have a 
budget surplus, projected over the next 10 years, of $3 trillion. Two 
trillion of those dollars we are setting aside for Social Security and 
Medicare, and we are going to pay down debt. One trillion is the true 
surplus outside the trust funds. And that is what we are debating.
  I am absolutely convinced my colleagues on the other side want to 
spend it. And I believe if we leave it on the table, it will be spent. 
Absolutely convinced of it. And then 10 years from now we will have a 
higher level of government spending and we will need to deal with 
incredible expenditures that will come in the future, and our baseline 
will be very, very high.
  Instead, we want to cut taxes. Not all of the $1 trillion. It may be, 
by the time we are done, $500 to $800 billion. They are tax cuts that 
help generate economic activity, and they are tax cuts that help 
families, and they are tax cuts that help education and allow us to 
deduct for health care. If we leave it on the table, it will be spent; 
and our spending base will be that much higher. If we return it in tax 
cuts and phase them in over time, I am absolutely convinced our economy 
will grow. But if, in the future, we find it does not, we do not have 
to implement the entire phase-in.
  This is very responsible, and I say this particularly to Republicans: 
this is the most important thing we can do to finish what we started.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Bentsen).
  Mr. BENTSEN. Mr. Speaker, I rise in strong opposition to the 
Republican leadership's tax bill. This is the wrong policy at the wrong 
time that will only add to the national debt at the expense of Social 
Security and Medicare. We are debating a trillion dollar tax cut that 
is going to grow to $3 trillion in 20 years on assumptions that may 
well not pan out.
  Nearly 20 years ago, then Senate Majority Leader Howard Baker of 
Tennessee called the Reagan tax cut a river boat gamble. I predict that 
like that gamble in 1981, this bill, too, if enacted, will result in 
increasing the national debt many times over.
  It is a shame that after spending years of crawling out of the 
supply-side hole the Republicans put us in back in 1981, they now want 
to dig a new ditch, and even deeper.
  What will this gamble cost in real terms? $3 trillion over 20 years. 
What will happen if the non-Social Security surpluses do not 
materialize? We will drive the Nation deeper into debt and jeopardize 
the future of Social Security, Medicare, and the American economy 
through rising inflation, higher interest rates, and a weak dollar.
  This is the wrong idea, it is a bad idea, and we ought to defeat this 
plan.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Levin).
  Mr. LEVIN. First, Mr. Speaker, the trigger. It is not a trigger; it 
is a shot in the dark at the last minute. Let me tell my colleagues 
why. It is not tied to the debt but to interest on the debt, gross 
interest, that can go up as trust funds increase.
  There also can be a perverse result. If there is a recession, there 
would be no tax cut. And then when we come out of a recession, a tax 
cut.
  It applies only to the income tax, not to the other tax reductions. 
So what it applies to is the least regressive. One-third goes to 1 
percent, another one-third goes to the 9 percent highest income earners 
in this country, and only one-third goes to 90 percent of taxpayers. It 
is already terrible enough in terms of its regressivity.
  One last thing. According to the CBO, the debt subject to the limit 
does not decline until 2006, and that assumes no tax cut. So if we look 
at this trigger, it may result in no income tax reduction across the 
board through the first 10 years. It just does not make any sense.
  Secondly, I want to show my colleagues this chart, the explosion in 
the second 10 years of a $3 trillion revenue loss. That is the same 
period when Social Security surpluses begin to fall, when Medicare runs 
out of money in 2015, when non-Social Security budget surpluses begin 
to fall.
  This is reckless, reckless, reckless. It sells out our ability to act 
on Social Security and Medicare for the long run. Vote a resounding 
``no'' on this bill and support the motion to recommit as well as the 
Rangel substitute bill.
  Mr. ARCHER. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Indiana (Mr. McIntosh) for the purpose of a colloquy.
  Mr. McINTOSH. Mr. Speaker, let me add before we begin the colloquy, 
that I, too, want to thank the gentleman from Texas (Mr. Archer) and 
the Committee on Ways and Means for bringing this bill to the floor. It 
has been said, and I agree, this is the most important piece of 
legislation that this Congress will pass. The gentleman has reached the 
soft underbelly of the tax-and-spend crowd by taking the revenues off 
the table and returning it to the American people, and I thank the 
gentleman for doing that.
  As the chairman knows, along with many others in our conference, the 
gentleman from Mississippi (Mr. Pickering) and I have been very 
interested in making sure that the tax bill before us includes as much 
relief as possible for those American taxpayers who are paying entirely 
too much in taxes solely because they are married.
  Mr. PICKERING. Mr. Speaker, will the gentleman yield?
  Mr. McINTOSH. I yield to the gentleman from Mississippi.
  Mr. PICKERING. Mr. Speaker, I, too, would hope that when the 
gentleman from Texas goes to conference on this bill, that he will make 
an effort to see the amount of money used to provide relief to these 
married taxpayers is significantly greater than the amount set forth in 
the House bill.
  I also want to join my colleague, Mr. Speaker, in thanking the 
gentleman

[[Page 17218]]

for his leadership on a great package of tax relief and thank him for 
his assurances on this issue as well.
  Mr. ARCHER. Mr. Speaker, will the gentleman yield?
  Mr. McINTOSH. I yield to the gentleman from Texas.
  Mr. ARCHER. Well, I would say to both of the gentlemen, Mr. Speaker, 
that they have exemplified great leadership on giving couples marriage 
penalty relief, and they can be assured that in the conference, with 
the concurrence of the Senate, the amount of money designated for 
marriage penalty relief will be above the level in the House bill.
  I think I also must add that a lot of credit goes to many, many other 
Members who have joined with these two gentlemen on this issue, 
particularly two members of the Committee on Ways and Means, the 
gentleman from Illinois (Mr. Weller) and the gentleman from California 
(Mr. Herger).

                              {time}  1145

  I think all of the country can be thankful for all of my colleagues.
  Separately, Mr. Speaker, I am including in the Record at this point 
an exchange of letters with the Committee on Education and the 
Workforce, and an explanation of my amendment to H.R. 2488 making the 
reductions in the across-the-board tax rate reductions contingent on 
the annual change in the government's interest expenses on the total 
U.S. debt.

                                  Committee on Ways and Means,

                                    Washington, DC, July 21, 1999.
     Hon. William F. Goodling,
     Chairman, Committee on Education and the Workforce, 
         Washington, DC.
       Dear Chairman Goodling: I write to confirm our mutual 
     understanding with respect to further consideration of H.R. 
     2488, the ``Financial Freedom Act of 1999.'' H.R. 2488 was 
     ordered favorably reported by the Committee on Ways and Means 
     on July 14, 1999. Title XII of H.R. 2488, as reported, 
     contains nearly 40 pension provisions in the tax code 
     designed to improve retirement security.
       As you know, on July 14, 1999, the Committee on Education 
     and the Workforce ordered favorably reported H.R. 1102, the 
     ``Comprehensive Retirement Security and Pension Reform Act.'' 
     The bill, as introduced, was referred to the Committee on 
     Ways and Means, and in addition, to the Committee on 
     Education and the Workforce, and the Committee on Government 
     Reform. Titles I-V of the bill, as reported, contain many of 
     the tax provisions included in H.R. 2488, and Title VI 
     contains comparison amendments to the Employee Retirement 
     Income Security Act (ERISA) approved by your Committee.
       In order to expedite consideration of H.R. 2488, you agreed 
     to refrain from asking the Rules Committee to make in order 
     an amendment to H.R. 2488 to include the provisions of Title 
     VI of H.R. 1102, as reported. This was based on the 
     understanding that I would continue to work with you to 
     include agreed upon pension provisions within the 
     jurisdiction of the Education Committee in the final 
     conference report on H.R. 2488, and that I would not object 
     to your request for conferees with respect to matters within 
     the jurisdiction of your Committee when a House-Senate 
     conference is convened on this legislation.
       Finally, I will include in the Record a copy of our 
     exchange of letters on this matter during floor 
     consideration. Thank you for your assistance and cooperation 
     in this matter. With best personal regards,
           Sincerely,
                                                      Bill Archer,
     Chairman.
                                  ____

                                        Committee on Education and


                                                the Workforce,

                                    Washington, DC, July 22, 1999.
     Hon. Bill Archer,
     Chairman, Committee on Ways and Means,
     Washington, DC.
       Dear Chairman Archer: Thank you for your letter and for 
     working with me regarding H.R. 2488, the Financial Freedom 
     Act. As you have correctly noted, Title XII of H.R. 2488, as 
     reported, contains numerous pension provisions designed to 
     improve retirement security. As you also know, on July 14, 
     1999, the Committee on Education and the Workforce ordered 
     favorably reported H.R. 1102, the ``Comprehensive Retirement 
     Security and Pension Reform Act.'' The bill, as introduced, 
     was referred to the Committee on Ways and Means, and in 
     addition, to the Committee on Education and the Workforce, 
     and the Committee on Government Reform. Titles I-V of the 
     bill, as reported by the Committee on Education and the 
     Workforce, contain many of the tax provisions included in 
     H.R. 2488, and Title VI contains amendments to the Employee 
     Retirement Income Security Act (ERISA).
       As you know, I intended to have Rules Committee make in 
     order the provisions in H.R. 1102, regarding ERISA; however, 
     in order to expedite consideration of H.R. 2488 and with the 
     understanding as outlined in your letter, I did not make such 
     a request. I appreciate your work with me to include those 
     pension provisions within the jurisdiction of the Committee 
     on Education and the Workforce in the final conference 
     agreement on H.R. 2488. I appreciate your support in my 
     request to the Speaker for the appointment of conferees from 
     my Committee with respect to matters within the jurisdiction 
     of my Committee when a conference with the Senate is convened 
     on this legislation.
       Thank you for agreeing to include this exchange of letters 
     in the Congressional Record during the House debate on H.R. 
     2488. Again, I thank you for working with me in developing 
     this legislation and I look forward to working with you on 
     these issues in the future.
           Sincerely,
                                                    Bill Goodling,
     Chairman.
                                  ____


              Explanation of Archer Amendment to H.R. 2488

       Reductions in Across-the-Board tax Rate Reductions 
     Contingent on Annual Change in Government's Interest Expenses 
     on the Total U.S. Debt:
       --The 1 percentage point tax reduction scheduled to take 
     effect in 2001 remains in place permanently.
       --Each year thereafter, the additional tax reduction 
     scheduled for a specific year is contingent on a reduction in 
     the government's total interest expenses for the preceding 
     year. Total interest expenses include interest payments on 
     all debt subject to the statutory limit. This means both debt 
     held by the public and trust fund debt.
       --Specifically, in order for a tax reduction to take effect 
     on January 1 of a specific year, the government's interest 
     expenses must not increase in the preceding year. The annual 
     change in the interest expense is measured on July 31 of the 
     preceding year.
       --If the interest expense increases, then the next 
     scheduled phase of tax reduction which would otherwise go 
     into effect does not take effect until the interest expense 
     requirement is met in a succeeding year. Preceding rate 
     reductions remain in place.
       --The provision terminates when the rate reduction reaches 
     10%.

  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Frost).
  Mr. FROST. Mr. Speaker, Republican leaders spent yesterday twisting 
the arms of their moderate and fiscally responsible Members to get them 
to vote for a tax bill that they have derided all week for its fiscal 
irresponsibility.
  The papers today report that the House leadership may well have 
forced them to risk Social Security, Medicare, and our economy on 
fiscally irresponsible, budget-busting tax breaks for the wealthiest 
that will cost us more than $3 trillion over the next 20 years.
  To do so, Republican leaders seemed to have taken the principle of 
budgetary smoke and mirrors to a height unseen since David Stockman 
invented the ``magic asterisk'' nearly 20 years ago. And in so doing, 
Republican leaders are not just risking Social Security, Medicare, and 
our economy, they are mounting an assault on the common sense of the 
American people.
  Mr. Speaker, in the dead of night yesterday and this morning, 
Republicans may have succeeded in fooling themselves, but the American 
people are smarter than that.
  Americans know perfectly well that if this risky Republican package 
of more than $3 trillion in tax breaks for the wealthiest becomes law, 
Republicans will be making it fiscally impossible to save Social 
Security and Medicare. Republicans will be making it fiscally 
impossible to pay down the debt and keep interest rates low and our 
economy growing and creating jobs. Republicans will be making it 
fiscally impossible to help America's senior citizens afford the high 
cost of prescription drugs.
  As one of our moderate Republican colleagues said of this tax bill a 
few days ago, ``The numbers just don't add up, and the projections 
don't have credibility.''
  Well, we all know and the American people know that they are no more 
credible today.
  Why would Republican leaders force through a package that takes such 
risks with our future? What does it say about the priorities of the 
Republican party?
  Quite clearly, Mr. Speaker, it says the Republican leaders are 
willing to risk Social Security, Medicare, and our

[[Page 17219]]

Nation's economy in order to provide red meat for their right wing 
extremists.
  Vote down this bill.
  The SPEAKER pro tempore (Mr. Thornberry). The gentleman from Texas 
(Mr. Archer) has 11\1/2\ minutes remaining. The gentleman from New York 
(Mr. Rangel) has 12 minutes remaining.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Horn).
  Mr. HORN. Mr. Speaker, I want to praise the gentleman from Texas (Mr. 
Archer) for what he has done in this bill.
  Americans deserve to keep more of their hard-earned money for which 
they work. I recall the woman who heard the President claim ``more 
jobs'' and she said, ``I can believe that, I have three of them.''
  Well, we are trying to straighten that out. We have dealth with the 
marriage tax, and 42 million Americans--are affected by that--including 
6 million senior citizens.
  I am concerned not only about the families and the marriage penalty 
tax. I am concerned about our grandchildren and, in my case, little 
Yoni. I want him to grow up where there is not very much national debt, 
and that is exactly what the gentleman from Texas (Chairman Archer) has 
provided.
  There is a $3.6 trillion national debt held by the public. Under this 
bill, the Financial Freedom Act of 1999, we are getting that down to 
$1.6 trillion. If my colleagues do not think that is progress, then 
they have a strange idea of progress. We are doing something for every 
single American that is affected and needs a job and works hard and 
does not find much to pay the bills.
  Vote for this legislation.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
South Carolina (Mr. Spratt).
  Mr. SPRATT. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, the ink is barely dry on the projections of the surplus, 
and already we have a bill on the floor committing it all to tax cuts.
  I think a big share of the surplus should go to tax cuts. But if this 
bill becomes law, it will shut out everything else. It will leave 
nothing to make Social Security and Medicare solvent, use none of the 
surplus to pay down our mountainous debt, reserve nothing for plus-ups 
in education or boost in medical research. Even defense gets shorted.
  Most of those backing this tax bill say that they are for an increase 
in defense spending, but they should read the resolution. The budget 
resolution underlying this bill makes room for our tax cuts of $778 
billion. It freezes defense from 2004 through 2009.
  So before we rush to judgment, bet the farm on these projections, we 
ought to ask just how solid are these surpluses.
  In less than a year, OMB and CBO have upped their 15-year estimates 
of the surplus by $2 trillion. Just yesterday, CBO issued a report 
warning, and these are their words, ``decision-makers to view these 
projections with considerable caution.''
  What they have done is what they have always done. They have assumed 
that current law will be carried out, that we will stick to the caps 
for the next 3 years, tight caps that were set several years ago in the 
PBA of 1997, even though my colleagues know and I know that we really 
circumvented them last year and we are not going to stay under them 
this year.
  If we make the simple assumption that we will simply track inflation 
with discretionary spending for the next 5 years, we take $590 billion 
out of this $996 billion surplus.
  If we then assume that emergency spending has to be factored into the 
estimates, and CBO and OMB do not do that because it is unpredictable, 
we knock another $90 billion off the surplus. And if we then adjust 
that for debt service, debt service they will have to pay because their 
debt deal is not paid down, the surplus is somewhere between $150 
billion and $300 billion, not $996 billion.
  We have another choice, a substitute that would cut taxes by $250 
billion. It is the right choice, a fiscally responsible choice. I urge 
its adoption in lieu of this bill.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Ehlers).
  Mr. EHLERS. Mr. Speaker, I thank the chairman for yielding me the 
time.
  In the latter half of this century, the profligate spending habits of 
the Congress and the Federal Government drove the total Federal debt 
from less than $250 billion to an astounding $5.5 trillion.
  But now, because recent Congresses have been able to impose some 
fiscal discipline on the Federal budget during this period of strong 
economic growth, we enjoy the good fortune of operating under a 
surplus.
  Simply stated, having a surplus means that we are extracting from the 
taxpayers more money than is required to fund the operation of the 
Federal Government. That means we must refund part of this surplus back 
to the taxpayers through a tax cut.
  But prudence also dictates that we use part of this surplus to pay 
down the debt that was irresponsibly run up by previous Congresses.
  I am grateful that the chairman has agreed to insert my debt 
reduction amendment into this bill. With my amendment in place, we will 
accomplish both of our goals, tax refunds and debt reduction.
  The language of my amendment sets this Congress on a course to reduce 
the amount of publicly held debt from $3.6 trillion in fiscal year 1999 
to $1.6 trillion in fiscal year 2009, a reduction of over 55 percent in 
10 years.
  As a result, the annual interest costs of this publicly held debt 
will drop from $230 billion this year to about $100 billion in 2009. 
That is a huge savings.
  Putting it in simpler terms, reducing the debt and interest this much 
will put $700 dollars more per year back in the pockets of each 
American taxpayer.
  While it took over half a century to run up this debt, we are 
committed to cutting it by more than half in the next decade.
  Surely, my colleagues on the other side of the aisle, some of them 
whom were here when their party presided over the accumulation of this 
debt, cannot protest with too much credibility that this rate of payoff 
is insufficient.
  I urge the Congress to vote for debt reduction and smaller interest 
payments. Vote for this bill.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from California (Mr. Becerra) a member of the Committee on 
Ways and Means.
  Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, first things first. First things first. Social Security, 
Medicare, the first chance in a long time to consider prescription drug 
coverage in Medicare, reducing the debt so our children in the future 
will not be paying $250 billion yearly just on interest on the size of 
the debt. Talk to any family in America. They will will explain that. 
They know it. They have a mortgage. They know how much they pay in 
interest every year to own that home.
  Why are we telling our children we are going to let them continue to 
pay for more than $250 billion per year not to retire the debt, the 
principal, but just to pay the interest on what we owe as a Federal 
Government?
  First things first. And then we can focus on providing middle-class 
America, working-class Americans, with a tax cut. And they deserve it, 
and they will get it. But first things first.
  What we are talking about today is nothing but numbers, guesses. I 
could flip a coin right now and ask my colleagues if it is heads or 
tails and they would have just as much luck knowing what it would be as 
what we would know about the future about the Federal budget. It is all 
projections.
  Six years ago, when I came into Congress, the outgoing President 
George Bush and his administration left us with projections saying that 
we would have $300 billion deficits for as far as the eye could see 
into the future.

[[Page 17220]]

  Now we are projecting a trillion-dollar surplus over the next 10 
years. Let me bring it down even closer. A year ago, we were told we 
would have an $80 billion deficit. Five months ago we were told it 
would be a $7 billion deficit. Today we are being told it is going to 
be a $14 billion surplus.
  How can numbers change so rapidly? It is because they are all 
projections. It is flipping a coin. In fact, it is more like going to 
Vegas. I could go to a crap table and probably do better with the odds 
there than with knowing what will happen in 10 years with the Federal 
Government.
  We are playing with people's money, and we should be prepared to give 
it back. But people will also want to be able to retire knowing that 
Social Security will be there for them, not just us but our kids. 
People want to know that for the first time we have a chance to tell 
the elderly it will not be a choice between food and medicine because 
we can get them predescription drug coverage that will do so. And we 
want to be able to tell our kids, I have three small children, I am 
going to be able to retire some of this Federal debt so they do not 
have to pay that interest and they can use it to go to college.
  Let us be serious. Do not pass this bill. We can do a tax cut but not 
like this.
  Mr. ARCHER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Florida (Mr. Foley) another member of the Committee on Ways and Means.
  Mr. FOLEY. Mr. Speaker, I rise in strong support of this bill.
  I heard a lot of people taking credit today for the miracles of a 
balanced budget. We will go ahead and give them credit for raising 
taxes in 1993. They said that is what led to a balanced budget. We will 
take credit for cutting spending, which we believe led to a balanced 
budget.
  But, my colleagues, we are here to talk about the future of the 
United States of America. For 40 years, this place was run on a 
bankrupt notion of spend and spend and spend. If I have to hear one 
more time on the House floor about the Ronald Reagan bill, I have just 
got to tell my colleagues, the Congress was controlled by the 
Democratic party in those years. No bill sponsored by the President can 
pass without a majority party lifting the bill to the floor.
  So, if memory serves me right, that bill was passed by a 
democratically controlled Congress. So let us, at least, talk about 
fairness, about the rules of engagement, and about what this means to 
the average family.
  I urge my colleagues to go home over the weekend and talk about the 
marriage penalty elimination in this bill. I urge them to talk about 
the estate tax relief for family farmers in many districts around 
America. I urge them to talk about the tax credit for health care and 
deductibility, prescription coverage that was offered by the gentleman 
from California (Mr. Thomas). I urge them to look at some of the 
notions of this bill and deny that they have practical application for 
every working family in America.
  Now, there are disagreements on debt. There are disagreements on the 
long-term application. There are disagreements on income. But, my 
colleagues, Congress meets every day, every year. We can solve those in 
the future, but let us not kill a good bill on the American public's 
table today.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Missouri (Ms. McCarthy).
  Ms. McCARTHY of Missouri. Mr. Speaker, I thank the gentleman from New 
York for yielding me the time and for his leadership.
  Mr. Speaker, I rise in opposition to H.R. 2488, the Financial Freedom 
Act of 1999.
  In my 12 years of working on tax policy as chairman of the House Ways 
and Means Committee in Missouri, I thought I had seen just about every 
kind of shenanigan tried. This fiscally irresponsible measure tops them 
all.

                              {time}  1200

  How do you keep a straight face and look the American people in the 
eye when you say you are going to use an anticipated $1 trillion 
surplus to reform Social Security and Medicare, then, without blinking, 
tell the taxpayers of this great Nation that you are going to give them 
nearly a trillion dollars in tax cuts, plus reduce the deficit, and you 
will accomplish all of these wondrous feats without cutting programs or 
jeopardizing our economy. I do not think the public will be fooled by a 
measure which defies logic.
  I urge my colleagues to vote for the Democratic substitute, to 
support the motion to recommit, and to cast a vote to reduce the debt, 
save Social Security and Medicare and our economy.
  Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume, 
simply to respond.
  Many, many times the speakers on the Democrat side of the aisle have 
used the term ``a $1 trillion tax cut.'' They know that is not true. 
They think if they say it long enough and hard enough, people will 
believe it. They know it is not true. The tax cut is $792 billion. It 
is not $1 trillion, but let them keep saying it, because it exposes the 
misinformation that is being presented to this Congress.
  Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Colorado 
(Mr. McInnis) another respected member of the Committee on Ways and 
Means.
  Mr. McINNIS. Mr. Speaker, why do you not call this game what you 
really mean it, finders keepers? That is what you think it is all 
about. Look at the credibility of the Democrats back here in 
Washington, D.C., not the working man and the working women that happen 
to be Democrats out in the country. You got your own special enclave 
right here in Washington, D.C. That is, you think you found that money.
  Well, Democrats, let me tell you something: You did not find it. It 
is those working men and those working women, outside the Beltway, who 
have provided this surplus. By gosh, they are entitled to have some of 
it back.
  Now, you would like the American people to believe you are credible 
when it comes to Federal waste and Federal spending. How many of you 
Democrats voted for a balanced budget? How many of you Democrats ever 
stood up here and cut some spending out of the wasteful programs? Yeah, 
not many raised their hand. Two out of the whole group raised their 
hands over there. That is the true story. They think it is finders 
keepers.
  We have a budget here that will save Social Security, save Medicare, 
reduce the Federal debt, increase military spending and increase 
education and guess what? That is five. One dollar out of six, one 
dollar out of six goes back to that working man and that working woman.
  It is time you Democrats in Washington, D.C. cared about the 
Democrats outside the Beltway and gave up your enclave of finders 
keepers.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Turner).
  Mr. TURNER. Mr. Speaker, the Republicans have really shown their hand 
in their late-night amendment to their blockbuster tax bill. They put a 
provision in that says that part of the tax cut will not take effect 
unless the debt goes down. The truth of the matter is the Republicans 
are not interested in reducing the national debt. Their amendment 
simply says if the national debt starts going up, we will not have that 
big blockbuster tax bill. We have a $5.6 trillion national debt. It is 
time to start paying it down.
  The Democratic substitute, the Blue Dog motion to recommit, will 
allow for paying down that national debt. The Republicans want to 
continue along the path of big budget deficits. We need to pay off that 
national debt. The party of fiscal responsibility in this debate is the 
Democratic Party. We want to pay off that national debt, and it is time 
that we realized that only by being fiscally conservative will we ever 
have a chance to do it.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. Vitter).
  Mr. VITTER. I thank the gentleman for yielding me this time.
  Mr. Speaker, I rise in strong support of this historic tax cut bill. 
These words are my first on the floor since being sworn in on June 8, 
and that is appropriate because this legislation in

[[Page 17221]]

so many ways is what I came to Congress to do.
  I do not just mean cutting taxes. I mean celebrating marriage and 
family by attacking the marriage penalty; honoring small family 
business by phasing out the death tax which is the death of so many 
small family businesses; encouraging economic growth through cuts in 
the capital gains tax. I mean being fiscally responsible by locking up 
Social Security tax revenues 100 percent and by demanding a reduction 
in the national debt before we trigger some of the tax cuts. But most 
of all, I mean increasing freedom by sending money and power back to 
the individual and the family.
  The President wants targeted tax cuts. That means even in the case of 
a tax cut, Washington decides how and where and when and why money is 
spent. What is most significant about this bill is that individuals and 
family decide and freedom is increased.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  There have been some concerns with people getting emotional because 
our side said that it is nearly a $1 trillion tax cut. I do not want my 
colleagues to get upset. It is not a $1 trillion tax cut. It is a 
Christmas tree. It is decorated with every cut that you can think of 
for Republican supporters. Ninety percent of the tax cut goes to the 
wealthiest Americans.
  But it is not as irresponsible as some people are saying. Why? 
Because you know the bill is not going anywhere. What you want is a 
veto from President Clinton. He becomes the scrooge, he becomes the 
person that has snatched away this beautiful Christmas present that you 
have outlined.
  The only thing the President and the Democrats want are to protect 
Social Security, to protect Medicare, to make certain that prescription 
drugs are protected and to bring down the Federal debt. And when you do 
those things, which we try to do in the substitute, which we try to do 
in the motion to recommit, that is the biggest tax cut of all. Bringing 
down interest on car purchases, on electric appliances, on the 
mortgage. That is what America wants.
  But when you tell me and get excited about it, that if you do not 
give the nearly $1 trillion to the taxpayers, then the politicians in 
Washington, I assume you mean the Congress, are going to spend it. 
Well, who is in charge of the spending committees? Who is in charge of 
the Congress? I know you have a question answering that yourself, but 
most people believe it is the Republican Party. So if you are saying, 
``For God's sake, let's get rid of the Clinton surplus before the 
Republican Congress just spends it,'' then say it, but I know you are 
not saying that. The reason you are not saying it is because your bill 
is, what we call in Harlem, a trip to nowhere. And what you intend to 
do is to have little pamphlets with all of the tax cuts on it to pass 
out at the polls and say what a mean person the President was because 
he vetoed it.
  If you want a tax cut, the only way to have one is to realize that 
there are Democrats in this House. I know it is rough keeping up with 
how many of us because we keep a-coming. But still what you should do 
is to recognize that and get together with the Democrats on the 
committee and get together with the President of the United States. Do 
not do what the President told you to do, but for God's sake do not try 
to do what the right wing of your party wants you to do. Learn how to 
do something which is very difficult for some of the Members on the 
other side even to say: Learn how to compromise. Learn how to be 
bipartisan. Learn how to work together. That is what the American 
people want. They do not want a fight. They do not want a food fight. 
And they do not want you to get this bill decorated and send it over to 
the White House so that we have got to have another fight when there is 
a veto.
  Let us start now to see what we can do to work together. And, yes, it 
is nearly $1 trillion. And if you are going to challenge that, I 
challenge you, bring a bill to the floor. God knows what else you have 
in the Committee on Rules. Bring something out so people can see really 
what you are doing. It changes from day to day. The last rumor was it 
was close to $1 trillion. I know you lost $72 billion on the way to the 
House floor, but we do not know where you are today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield 30 seconds to the gentleman from New 
York (Mr. Fossella).
  Mr. FOSSELLA. Mr. Speaker, I thank the gentleman for yielding me this 
time. I compliment the gentleman from Texas, because I believe this 
will be a lasting legacy of his, to argue for more freedom and more 
liberty for the American people.
  You are going to hear a lot of debate about how Washington wants to 
spend your money. But the reality is we are talking about a tax refund 
to the American people who work hard every single day.
  The debate is simple. Do we want more freedom and more liberty and 
more economic growth? Do we want to give a tax cut to every American 
who pays taxes? Or do you want to keep the money here in Washington to 
squander more and more of your money?
  The debate is simple. I urge a strong ``yes'' vote on this bill.
  Mr. ARCHER. Mr. Speaker, I yield 30 seconds to the gentleman from 
Wisconsin (Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Speaker, I am a newer Member of Congress 
here and I have been just coming into Washington for about 7 months, 
but I have heard it all now. We see here before us so many different 
Members of Congress coming up with so many different excuses, reasons 
and ways to keep the American people further separated from their own 
money. This is what it is coming down to, two philosophies.
  This is a beautiful celebration of democracy that we see here today. 
On one side we have Americans overpaying their taxes, so much so that 
we believe you should get some of your money back. Take a look at your 
paycheck and look how much is coming out every year. We think you 
should have your money back. The other Members of Congress on the other 
side of the aisle want to keep all of your money in Washington.
  Mr. RANGEL. Mr. Speaker, I yield the balance of my time to the 
majority leader of the Democratic Party, the gentleman from Missouri 
(Mr. Gephardt), who is trying desperately to bring about a bipartisan 
solution to this problem.
  Mr. GEPHARDT. Mr. Speaker and Members of the House, I urge Members to 
vote for the Democratic substitute, or for the Democratic motion to 
recommit which is very similar, and against this tax bill that is on 
the floor.
  I make basically three arguments for doing that.
  First, I think the Republican bill is risky. I think it is risky with 
regard to the most important accomplishment that we have had over these 
last 7 or 8 years, and that is the wonderful economy that we have 
painstakingly built from where we were in the early part of the 1990s.
  Let me just read you some facts. Let us remember where we were in 
1992. The deficit was $290 billion. We now have the largest surplus in 
our lifetime. Since 1992, 17.7 million new jobs were created under the 
economic program of this administration that we have been operating 
under. In 1992, the unemployment of the country was 7\1/2\ percent. Now 
it is 4\1/2\ percent, with the lowest inflation that we have had since 
1981.
  Now, we are risking if we pass this huge tax cut, and we are for tax 
cuts, we think the American people deserve tax cuts out of this 
surplus. The question is, how much? And what we are saying is, this tax 
cut the Republicans have brought to us today is way too large and risky 
and irresponsible.
  But do not take my word for it. Look at what over 50 economists, six 
Nobel laureates said yesterday, part of their statement:
  ``In contrast, a massive tax cut that encourages consumption would 
not be good economic policy.'' They said, ``Given the uncertainty of 
longtime budget projections, committing to a large tax cut would create 
significant risk to our economy and our budget.''

[[Page 17222]]

  Why would we want to do that? Why in God's name would we risk this 
tremendous achievement and risk keeping it going?
  Secondly, this large of a tax cut keeps us from saving two of our 
most important programs and achievements, Medicare and Social Security. 
The Democratic tax cut is conditioned--is conditioned--on a solvency 
statement by the trustees of Social Security and Medicare. The 
Republican tax cut is not.

                              {time}  1215

  The Republican tax cut does not allow us to even take care of 
Medicare and does not allow the money for solvency in Social Security.
  Why would we want to risk that?
  Thirdly, what do the tax cuts do?
  Our tax cut is targeted. We are worried about long-term care; we are 
worried about many of the problems in the economy with research and 
development. It is targeted to the things we really need.
  Their tax cut is all over the lot, and most of it goes to the top 10 
percent of earners in the country. It is not focused on the middle 
class. And worst of all, last night at midnight they made a change in 
their tax cut; and they now condition it, at least the part that goes 
to the middle class, on what happens with the deficit.
  What about capital gains? What about the estate tax? What about the 
corporate alternative minimum tax? That is not conditioned. Oh, we 
would not want to hurt the people at the top. The only conditioning, 
the only trigger, is on the people in the middle and the people at the 
bottom that might get some benefit from the tax cut.
  This is a disaster in terms of the middle class of this country. This 
is risky. It does not take care of Medicare and Social Security, and 
the only people our colleagues have really ensured will get a huge tax 
cut are the wealthiest of the wealthy. This is not the right thing for 
our country.
  Mr. Speaker, I urge Members to vote for the Democratic substitute, 
vote for the motion to recommit, vote against this risky, 
irresponsible, unfair tax cut. Let us not repeat the mistakes of the 
past.
  Mr. ARCHER. Mr. Speaker, to close on this segment of the debate I 
yield the balance of our time to the gentleman from Ohio (Mr. Kasich), 
the chairman of the Committee on the Budget.
  Mr. KASICH. Mr. Speaker, I want to thank my great friend, the 
gentleman from Texas (Mr. Archer), for his outstanding work, and I 
think that today we should not miss our purpose. We should not miss the 
purpose of the Republican Party and the conservative philosophy that 
calls for a limited government, that calls for a free market, free 
enterprise system that can only survive and prosper in a period of 
limited government, and I think we ought to recognize that it is our 
mission in this city to ship power, money and influence from this city 
back to the people today, Mr. Speaker, who sit in the gallery and who 
watch on television and who are pulling the wagon all across America.
  As my colleagues know, this is part of an overall plan. As all my 
colleagues know, we are trying to bring about more choice in education 
with scholarship programs for the disadvantaged, but our ultimate goal 
is to provide power to States to provide for school choice so that 
mothers and fathers are in charge and that power rests in families in 
America.
  In Medicare we want to provide a more personalized health care system 
for our seniors that offers more choice and more power and more free 
market that breaks down a government bureaucracy that runs health care 
from the top down and is disrupting the ability of people to get 
quality care at an affordable price.
  We want to create individual retirement accounts, the gentleman from 
Texas (Mr. Archer), myself, so many of us, where we want people to have 
the power to be able to plan for their retirement, not to pass that 
power on to a bureaucrat in a faraway city who does not understand our 
needs as we get older. We want to have the power back; we want the 
confidence or we have the confidence ourselves to know to plan for the 
future.
  And the tax cut. Do not miss the tax cut and what the message is. Oh, 
yes, it is about economics, about keeping this recovery going. We know 
how vital it is in addressing so many of our long-term entitlement 
needs. It provides more jobs. It gives us the incentives to grow, to 
keep our economy strong, the strongest in the world. But it is also 
about personal power because what we all know intuitively is the more 
money we have in our pockets the more power we have, the more we can do 
for our families, the more we can do for our communities, the more we 
can do to help those around us; and if we have more of this and 
government has less, then we can begin to run America from the bottom 
up.
  As my colleagues know, if Americans can have more choice in education 
and security in health care where they have more choice and more 
confidence, individual retirement accounts, and Social Security and 
more money in their pocket, then people have more power; and what we 
battle with America today is cynicism, a sense that we are up against 
the big institutions, that we are isolated from one another and that no 
matter what we do or what we say or who we vote for makes some 
difference in the outcome, and we worry about our children.
  So it is the purpose of our party and the conservative movement to 
restore power to people and with that power and freedom comes 
responsibility, and with that responsibility we can hook our hearts 
together again, we can unite America, we can renew America, we can 
restore the vigor that America represents. This tax cut is about 
individual power.
  If my colleagues want to run America from the top down, vote no. I 
respect people who feel that way. I think they are dead wrong. If my 
colleagues want to run America from our families and communities to the 
top and restore the spirit and the beauty and the vigor of this 
country, support this bill and march with the Republicans to build a 
stronger America in the next century.
  Mr. DAVIS of Florida. Mr. Speaker, I rise in strong opposition to 
H.R. 2488, the Financial Freedom Act of 1999 and in support of the 
Democratic alternative which will provide targeted tax relief but will 
ensure at the same time that we pay down our national debt and address 
the solvency of Social Security and Medicare first.
  The Republican tax package ignores the fiscal discipline which as 
brought the federal budget from record deficits into balance and 
projected surpluses in the coming years. By abandoning PAYGO rules and 
relying completely on projected surpluses as offsets, this package 
threatens to undo all of the gains we have made over the past six 
years. If in fact these surplus projections are not accurate, we will 
be faced with either massive cuts to keep the budget balanced or 
deficits reminiscent of the 1980's.
  Rather than passing this tax package, I believe we should be focusing 
first on the solvency of Social Security and Medicare. During this time 
of economic growth and positive budget forecasts, Congress should take 
strong steps to shore up these two vital programs. We have a narrow 
window of opportunity to prepare these programs for the demographic 
changes coming with the retirement of the baby boomers. If we squander 
this opportunity, future generations with look back on this Congress as 
one more concerned with short-term political pandering than long-term 
responsibilities.
  Furthermore, H.R. 2488 would consume virtually all of the projected 
on-budget surpluses and devote virtually none to debt retirement. 
Currently, the publicly held debt is roughly $3.7 trillion and our 
interest payments alone on that debt consume 11% of the overall federal 
budget. This debt and corresponding debt service crowd out private 
investment and put pressure on all of our national budget priorities. 
Since coming to Congress, I have strongly advocated devoting the lion's 
share of these surpluses to debt retirement. As Former Secretary of the 
Treasury Robert Rubin has pointed out, debt reduction creates a 
cyclical benefit of lower interest rates, greater economic growth, 
higher budget surpluses, and further debt reduction.
  In my view, retiring a significant portion of the federal debt is the 
most fiscally responsible course of action and will lead to tangible 
benefits for all Americans. Consider, for example, what would happen 
if, as Federal Reserve

[[Page 17223]]

Chairman Alan Greenspan has testified is likely, long-term interest 
rates were to drop another two points as a result of debt reduction. 
For citizens in my district of Hillsborough County, Florida with a 
$115,000 home, monthly mortgage payments would be reduced by $155. That 
is real savings and real money in the pockets of Americans.
  The Democratic alternative offered today will dedicate the vast 
majority of the surplus to debt retirement and still leave room for 
targeted tax cuts. This modest package of tax cuts includes marriage 
penalty relief, long-term care tax credits, accelerated deductibility 
of health insurance for the self-employed, and the restoration of an 
itemized deduction for state and local retail sales taxes, important 
for states such as Florida which have no state income tax. This 
alternative represents a balanced approach, making certain that we fix 
Social Security and Medicare first, dedicating most of the surplus to 
debt reduction thereby ensuring continued fiscal discipline and 
economic growth, and providing targeted tax relief for millions of 
Americans.
  Mr. Speaker, the decisions we make tonight will affect the next 
decade of public policy discussions. The choices are clear and stand in 
stark contrast to one another. We can, as the Republican leadership 
would like to do, enact massive tax cuts which explode in cost just as 
the baby boomers retire, dissipate all of the projected on-budget 
surplus, and run the risk that if the projections are wrong, as has 
been the case repeatedly in the past, Congress will be forced to slash 
federal spending or run budget deficits. Or, we can adopt a prudent 
approach which emphasizes our responsibility to future generations by 
addressing the solvency of Social Security and Medicare, paying down 
the publicly held debt and controlling the size of the tax cut until 
these projected surpluses become a reality. I urge all of my colleagues 
to vote against H.R. 2488 and adopt the Democratic alternative.
  Mr. CASTLE. Mr. Speaker, I strongly support tax relief for all 
Americans. I support and believe we will enact broad-based tax relief 
legislation this year. I have been actively involved in negotiations on 
the current tax relief legislation before the House, H.R. 2488, the 
Financial Freedom Act. During these negotiations, I have stressed three 
concerns. First, is the size of the proposed tax cut. Is it too large 
in relation to the total projected surplus? Second, is the need to 
reduce the federal debt. Does this legislation allow us to pay down the 
federal debt? Third, is fairness. Does the bill provide tax relief 
fairly to all taxpayers?
  First, the size of the tax bill is a serious issue. The bill would 
commit $792 billion of the projected $996 ten-year surplus to tax 
reduction. I am concerned that it is unwise to commit 80% of the 
projected ten-year budget surplus to one purpose. It leaves very little 
margin for error. The surplus will be $996 billion if the economy 
remains strong and if there are no other changes in tax or spending 
policy. If there are changes, interest payments on the debt will be 
larger and the surplus will be smaller. If we commit $972 billion to 
tax reductions, virtually all of the rest of the $996 surplus will be 
needed to pay higher interest costs on the debt. That leaves no room 
for unplanned, but very likely expenses like natural disasters and 
other emergencies. Over the past ten years, emergencies have averaged 
at least $8 billion per year. That pattern indicates likely future 
emergencies will reduce the projected surplus by at least $80 billion. 
This year, we have already spent $15 billion in emergency funds for 
Kosovo and domestic emergencies require additional emergency aid later 
this year. We need to factor these likely needs into our calculations. 
While Medicare is currently fundamentally sound, there are growing 
problems in the area of home health care, HMO's and rural and teaching 
hospitals. Correcting those problems may require additional funds. 
Finally, important programs like education, veterans and the 
environment must be adequately funded. We cannot assume that these 
programs will be unrealistically reduced when estimating the surplus.
  The cost of the current House tax bill also grows rapidly in the 
second ten years. Some estimates are that it could be almost $3 
trillion after 2009. That will occur just as the baby boom generation 
begins to retire and the Social Security surplus begins to decline. It 
is clearly unwise to risk the on-budget surplus at the same time Social 
Security and Medicare will be experiencing increased pressure to meet 
the needs of millions of new retirees.
  My second concern is the need for debt reduction. The federal debt is 
$5.6 trillion and requires 15 percent of the annual federal budget to 
service. If we do not take the opportunity to pay down this debt during 
strong economic times, then when will we? Tax relief is important, but 
it should be balanced with the need to begin to pay down at least some 
of the $5.6 trillion federal debt. Committing 80 percent of the 
projected surplus to tax reductions, simply does not allow enough of 
the surplus for debt reduction. I was pleased to be involved in the 
negotiations that produced the amendment to condition the phase in of 
the 10 percent across the board tax reduction on reducing interest 
payments on the debt. If we are not reducing the debt, up to $375 
billion of the tax reduction would be postponed. This is a positive 
addition to the bill, but it does not affect billions in tax relief to 
businesses which would go forward regardless of whether we are meeting 
our debt payment goals. I believe that more of the projected surplus 
should be reserved to pay down the debt. My constituents tell me that 
should be our top priority because they know everyone benefits from 
lower interest rates on their own debt, including credit card and 
mortgage rates. In fact, a one percent drop in interest rates saves 
Americans $200-$250 billion in mortgage costs. That is real middle 
class financial relief.
  My final concern is whether this is the most fair tax bill we could 
produce. The bill does contain broad-based tax relief and that is to be 
applauded, but I believe the bill drafted in the Senate is superior 
because it provides more tax relief for lower and middle income 
families, encourages saving and provides more relief from the marriage 
penalty. I believe the reduction in the 15 percent bracket benefits 
taxpayers of all incomes, particularly those of more moderate incomes, 
more fairly than the 10 percent across the board cut in the House bill.
  We can and should provide tax relief to all taxpayers, but in trying 
to balance tax relief with debt reduction, potential emergencies, other 
government programs, and the need to protect against a sudden drop in 
the economy, it is not necessary to include all the provisions in the 
House bill at this time. For example, Congress with my support, 
recently enacted significant capital gains and estate tax relief in 
1997. I think those provisions in the current bill could be scaled back 
as we try to provide more of the surplus for debt reduction and other 
needs.
  I proposed a broad-based tax relief alternative that would provide 
$514 billion in tax relief over ten years and reserve $482 billion of 
the projected surplus for debt reduction or other needs. My alternative 
included broad-based relief more targeted to middle and low income 
earners by reducing the 15 percent tax bracket to 14 percent. In 
addition, my plan reduced the marriage penalty, provided tax credits 
for child and dependent care. It provided more responsible estate tax 
relief, health care, pension, and small business tax relief. While the 
House was not permitted to vote on my alternative, I think this plan is 
more reflective of what can actually be enacted into law this year.
  I believe the tax alternatives proposed by House Democrats and the 
Administration are not adequate. We can provide more than $250 billion 
in tax relief to working Americans without jeopardizing other 
priorities. Clearly the President and Congressional Democrats will have 
to improve their proposals to achieve a true compromise.
  While I could not support the legislation before the House today, I 
look forward to working with all Members of Congress and the 
Administration to ultimately produce legislation to give every American 
significant tax relief.
  Mr. CROWLEY. Mr. Speaker, I rise to oppose the Trillion Dollar Tax 
Break and Deficit Act and to strongly support the Rangel substitute.
  A massive tax cut--nearly $900 billion--is totally irresponsible. It 
stands in the way of strengthening Medicare and Social Security, and 
threatens the progress we have made in eliminating the deficit and 
reducing the national debt. The Democratic substitute will leave plenty 
of room to shore-up social security and Medicare without bursting the 
budget. Additionally, tax cuts will be targeted more towards middle 
class families--the people who work hard to support themselves and 
their children--not the upper one percent of this country.
  How does this bill help our crumbling schools? How does this help 
replace the 10 schools in Community School District 24 which are heated 
by coal burning boilers? It is worth mentioning that Community School 
District 24 is the most overcrowded school district in the City of New 
York, operating at 119% capacity. This is projected to increase to 168% 
over the next ten years. How are education savings accounts going to 
help these public schools? As for arbitrage, it will only provide 
relief for those construction projects schools have already begun. It 
does nothing to address the needs to build new schools and modernize 
existing schools.
  The schools in my district need substantive school construction 
assistance NOW. The Rangel plan will provide $25 billion in interest

[[Page 17224]]

free school construction bonds to state and local government for public 
school construction and modernization projects. This will help 
alleviate the high tax burdens faced by middle class communities trying 
to finance construction on their schools. Additionally, it will provide 
a tax incentive to those who invest in the bonds, by giving them tax 
credits on the interest. And, most importantly, these bonds will be 
available to our school immediately!
  In closing, I ask you to envision one classroom in my district: One 
classroom, with fifty kindergarten students and two teachers and no 
plans to change in the future. I urge you to oppose the bill and vote 
for the Rangel substitute.
  Mr. STARK. Mr. Speaker, I rise in opposition to H.R. 2488, the 
Financial Freedom Act which has been brought to us for consideration by 
the Republican leadership. After the hard choices made in the 1993 tax 
bill to restore our nation's economic health after the debacle of 
``Reagonomics'', we are in better shape than in the last 15 years. Now 
Republicans want to pass a $3 trillion tax cut premised on budget cuts 
that will never materialize.
  This whole exercise is a hoax. The Republicans have created the 
illusion of paying back their wealthy supporters and corporate special 
interests in a bill that will never become law.
  Contrary to its title, this bill with its reckless spending of close 
to a trillion in the next decade and more than $2.8 trillion by the 
following decade, will rob our nation and future generations of any 
chance of financial freedom. By spending more than we have in real 
surpluses, we will restrict our ability to bolster our Social Security 
trust funds to accommodate changes in demographics and also to protect 
and improve Medicare.
  There is no financial freedom for the majority of seniors without 
Social Security. There is no financial freedom for seniors and their 
children saddled by prescription drug and long-term care expenses. Yet 
passing massive, unfunded tax cuts threatens the ability to bolster 
both Medicare and Social Security.
  There is no financial freedom for most families under this bill that 
allocates close to half of the total tax benefits to the richest one 
percent whose incomes exceed $301,000. The richest one percent would 
get an average tax cut of $54,000 a year. The bottom 60% of taxpayers--
those with incomes less than $38,200--would get an average cut of $174 
a year. The bill buys the rich quite a bit more financial freedom than 
the rest of us.
  This bill targets the benefits to the rich in the way they structure 
the 10% tax cut, and by the size of the capital gains cut and the 
virtual elimination of the estate taxes. Only the wealthiest 2% of 
estates even pay estate tax now because current law exemptions; there 
is no such thing as a ``death tax'' for most American taxpayers. This 
bill lets everybody out the door--Warren Buffet, Bill Gates, Malcolm 
Forbes--not just the small businessman and farmers in search of a 
relief to pass on a small business to their children.
  The average benefit of the capital gains cut for the top 1% of 
taxpayers is $8,319 while 80% of the taxpayers--those with incomes 
under $62,800--would get a cut of $17 or less from the capital gains 
reduction. Seventeen dollars a year doesn't buy much financial freedom 
for working family by any objective measure.
  There are also over $100 billion in corporate tax breaks including 
some for arms merchants, oil, gas and timber investors, and folks who 
can enjoy three martini lunches.
  Even the guise of providing relief for long-term care expense is just 
a tool to expand the market for insurance industry. The tax credit in 
the Republican package can only be used to buy insurance, not to pay 
long-term care expenses themselves.
  This bill just reinforces skepticism by voters that they won't get 
any tax relief because it will go to rich individuals and corporate 
freeloaders.
  I urge a no vote on H.R. 2488:
  The tax breaks are tilted toward the rich.
  This tax cut is too big for this country to bear before the surplus 
even materializes.
  A yes vote tonight is a reckless vote that gambles away funds needed 
to preserve Medicare and Social Security.
  A yes vote guarantees an increase in public debt.
  Mr. HOYER. Mr. Speaker, I rise now not only to oppose this fiscally 
irresponsible Republican tax plan, but to inject a little historical 
perspective into this debate.
  One of the first votes I cast as a member of this House was on 
President Reagan's ``Economic Recovery Tax Act of 1981.'' The heart of 
President Reagan's supply-side tax plan was a $749 billion tax cut over 
five years. Among other things, President Reagan's plan slashed 
individual income taxes across-the-board and allowed faster write-offs 
for capital investments.
  Those of us who were around here back in 1981 remember how President 
Reagan strode into office with this bold pledge: He said that a massive 
tax cut would fuel economic growth, thereby generating greater Federal 
revenues and resulting in a balanced Federal budget by 1984.
  Well, that's not exactly what happened, is it?
  The Laffer curve--named after supply-side economist Arthur Laffer, 
who had President Reagan's ear on tax policy--purported to show how tax 
cuts could lead to a balanced budget. But that turned out to be a cruel 
hoax on the American people.
  In 1980, President Carter's last year in office, the Federal budget 
deficit was $73.8 billion. Large, yes. But not insurmountable. Only 
five years later--after the massive tax cut of 1981--the Federal budget 
deficit had exploded to $212.3 billion.
  By 1990, the Federal deficit had ballooned to $220 billion. And in 
1992, President Bush's last year in office, the deficit had skyrocketed 
to $290 billion.
  Consider another important measure of national economic health--the 
national debt. In 1980, the public debt of the United States was $909 
billion. In the following 12 years of Republican administrations, the 
debt exploded to over 4 trillion dollars! And this happened even though 
Congress appropriated less money in these 12 years than Presidents 
Reagan and Bush voodoo economics, Mr. Speaker, voodoo economics. That's 
what former President Bush--not Steny Hoyer--called President Reagan's 
supply-side tax cut plan on the campaign trail in 1980. And President 
Bush was not alone when he offered that piercing two-word analysis.
  Former Senator Howard Baker called the supply-side tax cut scheme a 
``riverboat gamble.'' and President Reagan's own budget director, David 
Stockman, later confessed that he knew the administration could not cut 
taxes, provide a ``safety net'' for domestic programs and balance the 
budget because ``it defied arithmetic, wasn't true.''
  Only our fiscal discipline, our fiscal responsibility since 1993 has 
allowed us to erase these record budget deficits. And last year, we 
realized our first surplus--$70 billion--in 30 years.
  The record deficits of the 1980s caused our economy to plunge into 
crisis. And we responded. We passed a budget agreement in 1993--which I 
might add did not get one Republican vote--that cut the deficit by $496 
billion over five years.
  The 1993 budget agreement was designed to bring down an unemployment 
rate then running at 7.5 percent; bring down the 30-year interest rate 
then hovering at 8.2 percent; and bring down that $290 billion deficit. 
And it worked.
  In 1997, in more bipartisan fashion, we passed a balanced budget 
agreement that called for continued fiscal prudence in both 
discretionary and mandatory programs.
  And what do we have to show for our hard work--our fiscal 
discipline--over these last six years?
  Well, we now project a budget surplus of $100 billion in 1999.
  The national debt is $1.7 trillion lower than was projected in 1993.
  Interest rates are around 6 percent.
  The unemployment rate remains near 4.3 percent.
  We have the fastest real-wage growth in 25 years.
  Inflation--2.5 percent--is at its lowest rate in 32 years.
  Business investment has grown at 12.8 percent per year, the fastest 
growth since the Kennedy administration.
  And we have the highest rate of private home ownership--66 percent--
in history.
  What an incredible achievement. What an incredible record.
  And, now, we're going to throw it all away? With this irresponsible 
tax plan that threatens to explode the deficit, explode the national 
debt, drive up interest rates, and drive our healthy economy right off 
an economic cliff?
  That's not just ``egregious recklessness,'' as the Washington Post 
called it yesterday. That's voodoo economics. That's a riverboat gamble 
that we should not ask the American people to take.
  This Republican tax bill is so irresponsible that it even has many 
Republicans running for cover. It's no secret why.
  First, this tax plan threatens long-term growth, by producing record 
deficits again, and driving up interest rates. This, in turn, would 
lead to lower economic growth.
  While this tax plan purports to cut taxes by almost $800 billion, 
economists predict that it actually could cost us $3 trillion.
  Second, this tax plan threatens our ability to reduce the national 
debt--which is critical to

[[Page 17225]]

our continued economic vibrancy. Simply put, reducing the debt leads to 
lower interest rates and greater investment and economic growth.
  And let's not lose sight of this fact--paying down the debt is 
tantamount to a tax cut because each percentage point decline in 
interest rates means $200 to $250 billion less in mortgage costs paid 
by Americans over the next 10 years.
  Third, this irresponsible plan--which would eat the entire projected 
Federal budget surplus and then some--would eliminate our ability to 
strengthen Medicare and Social Security.
  Currently, Medicare is projected to be insolvent by 2015. I submit 
that if we fail to take this rare opportunity to ensure the long-term 
solvency of Medicare and Social Security, we deserve the harsh judgment 
of history.
  Finally, it should come as no surprise that in this Republican tax 
plan, the wealthiest 1 percent of taxpayers would receive one-third of 
the benefits.
  Now, you tell me, how does that look to a young couple making, say, 
$40,000 a year? You might as well just tell them: ``Sorry, you are not 
one of the chosen few. Wealthy Americans are getting a tax cut. But 
you, you're just getting higher interest rates making it more expensive 
to buy a car, buy a house, or send your kids to college.''
  Fairness, of course, is not the watchword when it comes to this tax 
plan. While the wealthy get a break, this plan would force cuts of $583 
billion in domestic spending programs on crime and education over the 
next 10 years. In addition, it would slash defense spending by $198 
billion over the same period.
  This from the party that claims President Clinton has ``hollowed 
out'' the military. That's not just disingenuous, it's not acceptable.
  Mr. Speaker, we have created the best economic times in a lifetime in 
the last six years.
  There are two paths we can take. One path calls on us to continue 
with the fiscal discipline that we imposed on the budgetary process in 
1993 and that has produced the economic boom we are enjoying today.
  The other is a risky and speculative path--voodoo economics, if you 
will--that we know all too well. It is littered with gigantic deficits, 
and an exploding debt that threatens to disrupt our strong economy.
  I urge my colleagues to choose the right path and vote for fiscal 
discipline and a strong economy, and against this irresponsible tax 
plan. Our economic security--indeed the security of future generations 
of Americans--depends on our choice.
  Let it not be said that we took the politically seductive course and 
shrank from our duty and responsibility to our country, future 
generations, and to our economy.
  Ms. SANCHEZ. Mr. Speaker, here we go again.
  Social Security is the primary retirement system for the majority of 
retired Americans. It provides benefits to 33 million Americans of all 
ages and keeps 12 million recipients out of poverty.
  The G.O.P. Social Security approach is really an unreliable response 
that supports the Wealthy Special Interests. Why does the G.O.P. want 
to undercut a sound economy with a tax scheme designed to benefit the 
few?
  We must protect Social Security. This means less debt, lower interest 
costs, rising living standards, more money made available for seniors' 
priorities, and more security for Social Security.
  Republican tax cuts mean higher deficits, higher interest rates, and 
lower economic growth.
  The Republican tax scheme would make it impossible to continue to pay 
down and eventually eliminate the national debt by 2015, as proposed by 
the President.
  My colleagues across the aisle would have us believe that they have 
efforts to shore up social security and pay down on the national debt. 
This is not so!
  Republicans want to engage tax cuts that bust the budget and threaten 
our long term economic growth. Their tax cut does not cut it!
  I urge my Republican colleagues to devote half of the budget surplus 
to debt reduction and to support a common sense budget plan that 
reflects the values most Americans consider important.
  Mr. KOLBE. Mr. Speaker, I strongly support the tax relief bill we 
have before us today. It is another down payment on our promise to 
bring tax relief to the American people. After we make sure we have 
repaid Social Security and Medicare, we must give the surplus back to 
those who are giving it to us. It's wrong, just plain wrong, to make 
the average family pay $5,307 more than the government needs over the 
next ten years.
  In my view, denying tax cuts for our people who work hard to earn a 
living for themselves and their families is unthinkable when government 
has a surplus. One letter I received from a group of organizations 
opposed to tax cuts said that they want past spending cuts restored and 
even increased for inflation. Further, they want to insure that future 
surpluses are used to fund more federal spending programs. I couldn't 
disagree more. The surplus belongs to the people who pay the taxes, and 
we should give it back to them.
  The tax relief provided in this bill is considerable.
  It has an across-the-board tax cut of 10 percent that will help all 
taxpayers.
  It reduces, even if it doesn't totally eliminate, the marriage 
penalty.
  It helps parents save to educate their children.
  It offers incentives to save for retirement and increases pension 
portability.
  It finally ends the death tax.
  It offers tax relief for medical expenses.
  Mr. Speaker, I have worked for years with my colleagues to end the 
death tax. I am especially pleased to see this phase out included in 
this bill. Southern Arizona has many family ranches and small 
businesses that are forced into liquidation by estate taxes. That's not 
fair. Increasing the exemption from these taxes is right.
  The Marriage Penalty is an onerous tax on families. More than 21 
million Americans pay more in taxes simply because they are married. We 
should encourage marriage--not tax it. While this bill doesn't take 
care of the bracket problem, it does eliminate the penalty in the 
standard deduction. The standard deduction for a married couple becomes 
exactly double the deductible for an individual. This means savings of 
$243 per couple each year.
  We all know how the cost of educating our children continues to 
skyrocket. This bill raises the ceiling on Education Savings Accounts 
from $500 to $2000/year. It permits these accounts to be used to pay 
for elementary and secondary education in addition to higher education.
  The bill ends the 60 month limitation on the student loan interest 
deduction. And there are changes to revenue bond rules to help school 
construction.
  I have spent much of my time in Congress working on a reliable 
retirement income for senior citizens. This bill increases contribution 
limits to 401(k) and other retirement plans; it increases portability 
of pensions for our new workplace reality in which a person no longer 
works for the same company during his/her entire work life. In short, 
it makes it easier to save for retirement.
  Medical expenses have become a huge item in our personal budgets. 
This bill offers relief in this area, too. It provides a 100% deduction 
for health insurance premiums for individuals who purchase health 
insurance. Long-term care insurance is extremely expensive. This bill 
helps by providing a 100% deduction for these premiums also. It expands 
the exemption for those who care for an elderly family member at home. 
And it expands Medical Savings Accounts.
  For those who are concerned that we need protection against the loss 
of revenue should we face a future economic downturn, I believe our 
trigger is an excellent protection. In any year when the total interest 
paid out on the public and private debt does not decrease from the 
previous year, then the incremental across-the-board tax cut doesn't 
kick in. This would protect us in a situation of rising interest rates 
or declining revenues and make sure we keep a balanced budget.
  The revenue for these tax cuts is not coming from the surplus in the 
Social Security Account. We have locked that away. Instead, this 
surplus is ``on budget'' and will not affect our efforts to reform 
Social Security.
  We need fundamental reform of the tax system. I think most in this 
body would agree with other taxpayers about this. The tax relief 
offered in this bill does simplify the tax code, but I recognize that 
it does not achieve the more complete reforms we all would like to see. 
The fact is we have not reached a national consensus as to how this 
reform should be accomplished, and I don't want to tempt fate by 
waiting for tax relief until we have this consensus. The temptation to 
spend more would be irresistible in this town.
  Mr. Speaker, I urge my colleagues to support the Financial Freedom 
Act of 1999. Let's return the surplus to the American Taxpayers.
  Mr. DINGELL. Mr. Speaker, as we debate this tax cut legislation there 
are a number of aspects of it requiring the attention of the public. 
The first causes the ghosts of Ponzi, Sam Insull and Phineas Barnum to 
hover over this chamber in smiling admiration.
  Is this a tax cut or is it not? The answer is no one knows for sure. 
The bill is tied to receipts and deficits, so in some years there may 
be a tax cut, in some years there may not. Indeed, if the national debt 
does not go down, there will be no tax cut.
  Now it is hard to speculate how this works, or whether there will be 
a tax cut, when, how,

[[Page 17226]]

or how much, because all the negotiations were done by the Republicans 
alone in closed meetings, and the printed version has not been 
available to analyze or discuss in proper legislative fashion. 
According to the sketchy reports I have been able to receive, it will 
possibly work something like this: After an initial 1 percent across 
the board tax cut, all further cuts will be conditioned on whether the 
total national debt (including that related to Social Security and most 
trust funds) goes down. Now I cannot tell anyone exactly what that 
means, but I believe I can be excused, because the Republicans have not 
said, and apparently they cannot either.
  So here we have a remarkable Republican tax cut, a here you see it, 
now you don't tax cut--maybe you get it, maybe you don't.
  Now, if this massive punitive tax cut really goes into effect, lets 
look at some of its most deficient aspects:
  The Republican tax bill would blow a three trillion dollar hole in 
the budget and threaten the vitality of Medicare and Social Security.
  The Republican tax scheme does nothing to extend the life of the 
Social Security and Medicare Trust Funds. It eats the entire surplus, 
leaving absolutely nothing to ensure the long-term solvency of Medicare 
or Social Security. It soaks up all of the money. It leaves nothing to 
protect or reform Medicare or Social Security. It also ensures that 
there will be no money left over to fund a Medicare prescription drug 
benefit.
  The Republican plan also spends all of the non-Social Security 
surpluses and leaves nothing for debt reduction. Rather than paying 
down a large portion of the national debt, the Republicans would be 
adding to it. When one includes the $141 billion of additional interest 
payments that are required to finance the tax cut, on-budget deficits 
are likely to appear.
  The bill will force education, veterans programs, federal health 
research, environmental programs, farm programs, our national defense 
and other vital programs to be slashed. The Republican tax bill will 
require an average 27 percent cut in all domestic spending programs by 
2009. To cite just one example, if the Majority sticks to their budget 
caps, $1.4 billion would be cut from veterans' health programs--which 
are already universally recognized as woefully under funded. In point 
of fact, our veterans programs are an outright disgrace and the 
Republican bill exacerbates the problem.
  The Republican scheme will also explode the deficit and threaten our 
growth over the long-term. Last year, for the first time in thirty 
years, the federal budget was in surplus. The Republican bill will 
reverse that course because it will cost as much as $3 trillion in the 
out-years. Although it is cleverly and carefully masked, the Republican 
bill explodes the deficit in the out years and will produce higher 
deficits, higher interest rates and cripple economic expansion. Rather 
than paying down the debt as proposed by the President, the Republican 
tax scheme adds to the debt.
  Finally, the plan put forth by the Republican leadership would only 
benefit the wealthiest Americans. According to Citizens for Tax 
Justice, the wealthiest one percent of taxpayers would receive 45 
percent of the benefits. Sixty-five percent of the total tax cut will 
benefit the top ten percent of taxpayers, those with incomes over 
$115,000. In aggregate, 90 percent of taxpayers will receive less than 
a third of the benefits included in this package. That is simply 
unfair, and Americans know it.
  Congress must use the surplus for Medicare and Social Security first. 
Then we can consider responsible tax proposals that sustain our growth 
and do not threaten our economic prosperity. The Democratic alternative 
is the responsible approach and I urge its adoption.
  In short, my Republican colleagues have crafted either one of the 
slyest now you see it, now you don't scams in the history of government 
or they have crafted one of the most irresponsible tax cuts ever 
designed to cripple government and to endanger essential programs like 
Medicare and Social Security.
  Moreover, they did it in a sneaky partisan way, totally disregarding 
traditional open legislative practices. No wonder the tax program here 
is so bad.
  It must be defeated and I urge a no vote.
  Ms. ROYBAL-ALLARD. Mr. Speaker, I rise in the strongest possible 
opposition to the Republican tax cut plan.
  This is a bad bill for a number of reasons:
  First, the $792 billion plus tax cut is fiscally irresponsible.
  To pay for this tax bill, Republicans would force drastic cuts in 
vital programs affecting health care, education, law enforcement, 
science and technology, the environment, agriculture and countless 
other programs.
  Moreover, when you deduct the promised increases for defense spending 
and set aside money to preserve Medicare and Social Security, no room 
is left for a tax cut of even half this size.
  Second, because many of the tax cuts included in this bill are phased 
in over time, the total future cost of this bill will be astronomical.
  While the projected cost of these cuts is $792 billion over the first 
ten years, the cost skyrockets to possibly more than $3 trillion in the 
second ten years, according to the Treasury Department.
  Finally, this huge tax cut does little to benefit middle and low 
income working families--those who need it the most.
  In fact, according to Citizens for Tax Justice, a taxpayer watchdog 
group, close to half of the tax benefits in this bill would go to the 
richest one percent of American taxpayers--people making over $300,000.
  While I support cutting taxes, we must make sure that these tax cuts 
benefit hard-working low- and middle-income families.
  The Democratic alternative recognizes that all American families need 
to share in our booming economy--not just the ultra-rich.
  Towards this goal, the Democrats' bill includes marriage penalty tax 
relief for all married couples who need it--the Republican bill does 
not.
  For example, low-income families experience a marriage tax penalty in 
relation to the Earned Income Tax Credit.
  The EITC is a highly effective program which benefits millions of 
working families by providing them with a small credit to help make 
ends meet.
  However, when individuals receiving the EITC marry, their benefit is 
often significantly reduced or taken away.
  The Democratic alternative revises the Earned Income Tax Credit to 
relieve this marriage tax penalty.
  This simple act of fairness is missing from the Republican bill.
  In short, the Republican proposal is fiscally irresponsible, will 
result in devastating cuts to critically needed programs, and ignores 
low-income and middle-income families as it dispenses its benefits to 
the wealthy.
  I urge my colleagues to support the modest, even-handed Democratic 
tax relief package, which recognizes our long-term commitment to 
Medicare, Social Security and the many priorities we need to address 
this year and next.
  I urge my colleagues to oppose this irresponsible Republican bill.
  Ms. SANCHEZ. Mr. Speaker, I rise because today the House will vote on 
a tax bill that has the opportunity to address one of the most pressing 
difficulties facing our schools: overcrowded and run-down facilities.
  Our schools are simply worn out and out of room. Conditions are so 
poor that we would have to spend $112 billion to make the basic repairs 
needed. One out of every four schools is holding more students than it 
was designed for. Enrollment is skyrocketing--48 million K-12 students 
will be attending our public schools by 2008.
  The House can do something about it. The Democratic version of H.R. 
2488 includes language expanding the opportunities for communities to 
raise school bonds to renovate existing school facilities and build new 
ones.
  School construction bonds are good for our communities. Local areas 
want to improve school facilities, but they need help. And new school 
and classroom construction means local jobs--lower unemployment, and 
working men and women taking home new paychecks.
  School construction bonds are good for taxpayers. Whether to invest 
in these bonds will be a decision that neighborhoods, towns and school 
districts make--not the federal government or the IRS.
  School construction bonds are good for schoolchildren. Right now our 
children attend schools with leaking roofs, inadequate wiring and 
chipping paint, crammed into storage closets, libraries and gyms for 
lack of classroom space. By neglecting to provide an environment 
appropriate for learning and teaching, we are sending our youth a 
message that their academic success is unimportant to us. This 
tragically shortchanges our students.
  The 106th Congress has the opportunity to pass meaningful school 
construction legislation. I urge my colleagues to vote for the 
Democratic alternative and help our communities earn the opportunity to 
expand and rebuild America's schools.
  Mr. HOLT. Mr. Speaker, I rise today in reluctant opposition to H.R. 
2488, the Financial Freedom Act of 1999. I had hoped to be able to vote 
today for responsible tax cut legislation that could return some money 
to the people who elected us. Unfortunately, legislation of that type 
is not on the floor.
  I support targeted tax cuts.
  I have joined together with Republicans on some of the very proposals 
contained in this package. I agree that we need to substantially modify 
the estate tax that penalizes small business people and family farms. I 
agree that

[[Page 17227]]

the tax code should not penalize marriage. I support tax credits for 
long-term health care and to help ease property taxes on citizens by 
helping communities with the costs of modernizing their schools. I 
support the research and development tax credit. And I support 
modernizing and simplifying the entire tax code.
  But the bill that the Ways and Means Committee has brought forward is 
a massive bill based on a breathtakingly irresponsible roll of the 
dice. It is a political document that promises massive tax cuts--nearly 
$792 billion in tax cuts--with money that we do not now have, and may 
never have if projected budget surpluses do not materialize.
  A large proportion of the predicted budget surpluses is based on the 
assumption that Congress, the President and our constituents will agree 
to deep cuts--cuts of almost 20 percent--in investments in education, 
health care, environmental cleanup, research, law enforcement and every 
other item of discretionary federal spending.
  Some cuts need to be made in government spending. But it is not 
realistic to assume that Congress will pass these deep reductions when 
it has already shown reluctance to pass cuts of even a fraction of this 
size during this year's appropriations process. And the bill assumes 
that our nation will never face emergencies like natural disasters, 
unexpected military operations or downturns in the economy.
  According to the Congressional Budget Office, this bill assumes $180 
billion in cuts below the baseline in discretionary spending over the 
next ten years. Those projected cuts and that spending of the projected 
budget surplus for large tax cuts jeopardizes our ability to protect 
Social Security and Medicare for future generations.
  Mr. Speaker, politicians make promises. But this bill sprinkles 
promises like fairy dust, with no thought to how those promises will be 
kept, or the consequences for our economy if they are not.
  No parent in my central New Jersey district bets their children's 
financial future on rosy scenarios and sunny, castle in the sky 
projections. They sit around the kitchen table and budget their bills, 
and their income and their anticipated expenses. And they make tough 
choices. The very least they can expect from us is the same type of 
honesty and responsibility when we make decisions that effect their 
families.
  Some here will try to make this a partisan issue. But the fact is 
that some Democrats would love to pass targeted tax cuts. And some 
Republicans, from the moderates who opposed this bill last night, to 
watchdog groups like the Concorde Coalition, have clearly stated how 
irresponsible they believe this bill is. Fifty economists, including 
six Nobel Prize Winners, have called this approach irresponsible. Even 
the Wall Street Journal--hardly a group of wild-eyed liberals--has been 
vocal in their criticism.
  It does not help that a large portion of this $792 billion bill is 
dedicated to special interest tax provisions. These expensive 
provisions don't go to families. They don't go to workers. And they 
don't go to seniors. They benefit mining interests--oil and gas 
producers--and large multinational corporations. These tax changes may 
or may not be good ones. We haven't had the chance to review them 
because they were inserted at the last minute. What we do know is that 
they are extremely expensive. And I don't think that any of my 
constituents think that giving away $300 billion in tax breaks to 
corporations without review is the way we ought to be making public 
policy.
  Mr. Speaker, people in New Jersey pay a lot in taxes. I want very 
badly to provide a responsible tax cut to these hardworking citizens. 
And I had hoped to be able to do that today. Frankly, the easy vote for 
me today would be to cast a yes vote on this package, and hope that 
someone--somewhere--at sometime further along in the legislative 
package says ``Wait a minute. This doesn't add up.''
  But I cannot.
  My constituents elected me to make judgments based on evidence, not 
ideology. And the evidence of this bill is that it has very real 
potential to throw our economy back in the financial ditch that 
Republicans and Democrats have labored for so long, and so hard, to 
climb out of.
  We can come together to pass a responsible bill. There are men and 
women on both sides of the aisle that want to see responsible tax 
relief. This legislation is not that. I urge my colleagues to vote no 
on H.R. 2488.
  Mrs. CAPPS. Mr. Speaker, I rise today in support of common-sense tax 
relief for American families and small businesses. I also rise in 
support of saving Medicare and Social Security, two programs critical 
to today's seniors and future generations.
  Unfortunately, the bill before the House today, H.R. 2488, is 
fiscally irresponsible. It would threaten our ability to ensure the 
long term solvency of Medicare and Social Security. It would also 
restrict our ability to pay down national debt and to make needed 
investments in national defense, education and environmental 
protection.
  By using the entire projected surplus for permanent tax cuts, this 
bill would leave no money for modernizing Medicare or reforming Social 
Security. This is simply unconscionable. Medicare is desperately in 
need of modernization--specifically, the lack of prescription drug 
coverage is a gaping hole in this critical safety net for seniors that 
must be fixed. and while Social Security is fiscally sound for the near 
future, the coming retirement of the baby boom generation will strain 
the system beyond its limit. We owe it to future generations to act now 
to reform these programs while there is still plenty of time to do so.
  H.R. 2488 would also keep us from paying down the $3.7 trillion 
national debt. Indeed, the Treasury Department estimates this bill 
would add over $150 billion in interest payments on that debt over the 
next 10 years. And the cost of the bill explodes over the second 10 
years--to $3 trillion--precisely at the time that our Social Security 
and Medicare rolls will be increasing with newly retired baby-boomers.
  The tax cut bill that I will be supporting today contains several 
important reforms that I have long supported, while allowing us to 
preserve Medicare and Social Security. This bill would fix the marriage 
penalty and ensure middle class families can take full advantage of the 
various per-child, education and child care tax credits. It would also 
increase the per-child tax credit by $250 for families with children 
under age five.
  The bill I support would help families by providing $25 billion in 
school construction bonds to modernize our overcrowded public schools 
and make employer-provided assistance tax free for undergraduate and 
graduate education. This measure would institute a $1,000 long term 
care credit and make health insurance fully deductible for the self-
employed beginning next year. And it would make permanent the R&D tax 
credit, so critical to ensuring future economic growth on the Central 
Coast, as well as credits to help move people from welfare to work.
  The bill would also provide some relief from estate taxes for all 
taxpayers. But I believe it should go further. The clear need for 
relief in this area is for small businesses and family farms like those 
on the Central Coast of California who are imperiled by the death of 
the head of the family. We must increase the exemption for businesses 
like these above the current $1.3 million. The high value of Central 
Coast land, for example, can make even a modest sized farm or ranch 
impossible to pass down without being subject to high estate taxes that 
can force the sale of the property. By increasing this exemption, we 
would keep family farms and businesses in the family and off the 
auction block.
  Finally, Mr. Speaker, I would like to express my profound 
disappointment in the partisan handling of this tax bill. I believe 
there is general agreement among the vast majority of Members that we 
can and should provide tax relief this year. But the House leadership 
has pursued a partisan course designed to make political points and not 
to pass meaningful legislation.
  The leadership knows H.R. 2488 will not become law. By seriously 
sitting down and negotiating a common sense tax bill we could easily 
pass legislation this summer and give families and businesses the tax 
relief they deserve. I hope that we can put the partisanship aside and 
work together on formulating real tax reform this year. Our 
constituents deserve nothing less.
  Ms. STABENOW. Mr. Speaker, I rise today to oppose the irresponsible 
Republican tax break proposal geared towards the wealthiest Americans, 
and support the Rangel Substitute. We have a truly historic opportunity 
in front of us. Today we can vote to build on the fiscal responsibility 
that has helped balance the federal budget by passing the Rangel 
Substitute, which will strengthen Social Security and Medicare while 
paying down the national debt and also provide a pro-family, pro-growth 
tax cut. Instead, the Republican majority will sacrifice this unique 
moment in order to give a tax windfall to the wealthiest Americans.
  Quite simply, the Republican proposal is unfair to the vast majority 
of taxpayers in my home state of Michigan as well as across the nation. 
According to the Joint Committee on Taxation, one out of every three 
families will receive NO tax relief at all under this bill. In 
addition, Citizens for Tax Justice estimate that families making 
between $38,000 and $63,000 will receive an average tax cut of $17, 
while families with annual incomes of $300,000 or more will get an 
average cut of $8,300.

[[Page 17228]]

  Of course, the decision to push this inequitable plan has opportunity 
costs. While giving tax breaks to the rich, the Republican legislation 
does nothing to extend the solvency of the Social Security and Medicare 
Trust Funds by even one day, and will not allow for Medicare reforms, 
such as a comprehensive prescription drug benefit and restoring cuts to 
critical services such as home health care, hospital reimbursements, 
and nursing homes.
  Mr. Speaker, if we do not strengthen Social Security and Medicare and 
pay down the national debt during good economic times, we never will. 
We must not squander this chance to put our fiscal house in order, but 
a vote for the Republican plan will do just that. The Rangel Substitute 
will accomplish the above goals while also extending tax relief to 
those that need it most--middle class families, small businesses, and 
family farmers. I urge my colleagues to vote for the Rangel Substitute 
and oppose the Republican measure.
  Mr. EVANS. Mr. Speaker, again, Congress is faced with a tax proposal 
that fails to address the needs of working Americans.
  Instead, my Republican colleagues have crafted legislation that 
reflects only the concerns of corporate ``Fat Cats'' and wealthy 
special interests.
  Mr. Speaker, tax breaks for the richest 10% of Americans does little 
to reaffirm working men and women's faith in their Government.
  After years of belt-tightening and fiscal discipline, we have been 
given a rare opportunity to lessen the burden on families struggling to 
make ends meet while preserving Social Security and Medicare. Yet 
today, we are debating an irresponsible, politically motivated, tax cut 
that does little for average citizens.
  Under the guise of returning government dollars to the pockets of 
Taxpayers, this proposal is a death knell for programs that reflect the 
values and priorities of working Americans--Education, the environment, 
proper care for our seniors and veterans.
  Today, I will vote for the Democratic substitute that pays down the 
national debt, shores up our Social Security and Medicare programs and 
provides tax breaks for working families. Our bill will sustain the 
growing economy and protect programs that help the majority of 
Americans, not just a wealthy few.
  Mr. HAYES. Mr. Speaker, last November the voters of our Nation 
returned to Congress a conservative majority to accomplish four things: 
Preserve Social Security and Medicare, provide every American child 
with the opportunity to receive a world-class education, strengthen our 
national defenses, and finally, return any tax overcharges where they 
belong--to the United States taxpayer.
  Today we have the opportunity to complete the fourth component of an 
agenda that reflects the priorities of America. Chairman Archer, the 
members of his committee and his staff are to be commended, as in the 
leadership of the majority party. Thanks to them, we have a chance to 
provide broad based tax relief for working Americans. The first real 
break they have had in almost 20 years. After all it's their money not 
the government's.
  In the last fiscal year, the federal government collected $1.8 
trillion, almost $80 billion more than it needs to operate. Recent 
budget projections indicate that the federal government will take in 
more than $3 trillion in surplus revenues over the next ten years--$3 
trillion, Mr. Speaker. I've got news for every member that opposes 
significant tax relief--the American people are paying too much money 
to the government. That money does not belong to politicians, it 
belongs to the people. And they know how best to spend it.
  There are those who say we must keep this money to preserve Social 
Security. Mr. Speaker, their remarks are not correct. The majority-
crafted Social Security Lock Box legislation, which this body passed a 
month ago, protects all of the Social Security Trust Fund from 
bureaucratic political spending. The truth of the matter is that those 
who want to keep the money here in Washington want to spend it on more 
government. They should be ashamed. Government is too big already. We 
have a significant portion of the population in this country struggling 
to make ends meet, and many Washington politicians don't trust them to 
spend their own money.
  Mr. Speaker, there are millions of Americans working 12 to 14 hours a 
day, every day, to secure a brighter future for their families. They 
are saving for that first home, for their children's college education 
and for their retirement. Let's take this historic opportunity to help 
them realize their dreams. Support this legislation and give the 
American people more of their money and the tax relief they deserve.
  Mrs. MINK of Hawaii. Mr. Speaker, I rise in opposition to H.R. 2488, 
a misguided, imprudent tax bill. The Financial Freedom Act is an 
irresponsible piece of legislation which reduces taxes for the rich, 
and jeopardizes vital programs which sustain the most vulnerable 
Americans. This tax cut will not help the American people. Instead, it 
will threaten Social Security, Medicare, and the quality of our 
children's education, while benefiting the most wealthy portion of 
society.
  Republicans want to spend $792 billion on an enormous tax break for 
the rich. Their plan is based on an uncertain assessment of America's 
financial future. They want to bet our future, our children's future, 
and our senior's security on the soundness of shaky predictions of 
potential surpluses. I cannot support such an extensive reduction in 
federal revenue when it endangers the strength of essential public 
programs for the benefit of the few.
  The Financial Freedom Act bill is designed to benefit only the rich. 
Republicans even modified the provisions late in the evening before 
this debate so that any tax break for the average middle-class family 
is conditional. The sponsors of this bill take a projected surplus, and 
instead of prudently paying down our national debt, reinstating 
drastically-cut funding for Veterans, education, or Social Security, 
they give it to the most affluent individuals in our society. They 
choose to provide benefits to America's wealthiest ten percent, instead 
of acting in the best interest of all citizens. This is unfair, 
dangerous fiscal policy.
  Mr. Speaker, my vote will be cast in favor of the solid, well-
balanced Democratic substitute plan offered by Mr. Rangel. This bill 
provides sound tax cuts to the average American citizen. Mr. Rangel's 
bill eliminates the marriage tax penalty by increasing the standard 
deduction for married couples. It accelerates the estate tax exclusion 
so that the estates of small business owners can safely pass to the 
next generation. It provides an increase in the child tax credit for 
children under five. It designates interest free funds to states and 
localities for school construction. It gives long-term care provider 
tax credits and accelerates the deductibility of health insurance 
purchased by those who are self-employed. All of these tax deductions 
help average, working American families. We can accomplish all of this 
benefit to American families, without jeopardizing the future of Social 
Security, without threatening Medicare's solvency, without selling out 
our children's education, and without deserting our nation's Veterans.
  Mr. LIPINSKI. Mr. Speaker, I rise today in opposition to the fiscally 
irresponsible tax cut bill we have before us today. More importantly, I 
strongly support this motion to recommit that instructs the Ways and 
Means Committee to reduce the size of the tax cut to one-quarter of the 
on-budget surplus and creates an account to lock up half of the on-
budget surplus for debt reduction.
  As a fiscal conservative who wants to lower interest rates and reduce 
the debt for future generations, I welcomed the renewed emphasis given 
to deficit and debt reduction when the Republicans took over Congress. 
Unfortunately, the majority party has lost track of the fiscal 
conservative roots and now wishes to spend almost of the projected 
surplus on tax cuts. I emphasize the word ``projected'' because the 
surplus has yet to materialize, and I think it is fiscally imprudent to 
spend money we do not yet have. As some of my like-minded Democratic 
colleagues have pointed out, budget projections for the next ten years 
have improved by nearly $2 trillion in the last twelve months, and the 
rosy projections could turn gloomy just as quickly.
  While my voting record shows that I generally support tax cuts, I 
believe this is not the proper time, place, or source of money for a 
tax cut of such magnitude. The Congressional Budget Office's projected 
$996 billion surplus in the next 10 years assumes that all of the 
surplus will be saved for debt reduction, thereby reducing the interest 
payments we have to make on our $5.6 trillion debt. However, if we 
spend any part of that surplus, additional payments for debt service 
would automatically be triggered. Therefore, the $792 billion tax cut 
we have before us today will actually have a price tag in the area of 
$940 billion. This leaves almost no money to lower the debt or to pay 
for vital programs that Americans hold dear.
  By only spending 25 percent of the surplus on tax cuts, we can still 
save a majority of the surplus for debt reduction, with some money 
going to domestic and defense programs, and some money in emergency 
reserve for Social Security and Medicare. However, I believe that any 
use of the surplus--whether it be for tax cuts, domestic programs, or 
Social Security--should be put off until we actually have a surplus. We 
would take great risks and send a bad message to future generations if 
we spend even one cent of an un-yet-realized surplus.
  So, Mr. Speaker, let's not be fiscally imprudent and rashly give to 
much of the surplus away in tax cuts. We should do what is right for 
the future of this country and vote for the motion to recommit.

[[Page 17229]]


  Mr. SANDLIN. Mr. Speaker, I rise in support of the Motion to 
Recommit.
  The republican tax bill is the definition of fiscal recklessness. It 
seeks to enact a tax cut that is based only on projected surpluses 
under ten and fifteen year estimates. Budget projections for the next 
ten years have improved by nearly $2 trillion in the last twelve 
months--they could go the other way just as quickly. If budget 
projections turn out to be wrong, the budget will return to deficits 
financed by borrowing from the Social Security surplus. Even the 
Congressional Budget Office--the source of budget projections upon 
which the Republicans' tax cuts are based--says these projections could 
vary as much as $100 billion a year. That's an extremely wide margin of 
error, wide enough to cause deep concerns among fiscal conservatives 
like me.
  Furthermore, even though Republicans are spending money they can't 
guarantee will exist, their tax plan still leaves no resources to meet 
important needs in education, agriculture, or defense, as well as 
funding for our veterans and other priorities. It is based on the 
assumption that discretionary spending will be cut by $595 billion 
below 1999 levels adjusted for inflation over the next ten years. This 
will require a cut in all discretionary programs of ten percent below 
current levels. Any increased spending in any area will require even 
deeper cuts in all other spending. The exploding costs of the tax bill 
will place an even greater squeeze on discretionary spending in later 
years.
  If these massive tax cuts are passed, education will suffer greatly. 
The Republican tax bill includes a change to the tax-exempt bond 
arbitrage rules that largely fails to meet the stated objective of 
modernizing schools, especially in rural areas. Under H.R. 2488, school 
districts would have four years to spend school construction bond 
proceeds rather than the two years currently permitted. According to 
Republicans, this would enable school districts to invest bond proceeds 
for a longer period and recognize greater arbitrage profits. The 
Republicans contend that their plan is universal, covering cities, 
suburbs, and farms.
  The truth is, many suburban and city school districts will receive no 
benefits from the Republican proposal. Schools with urgent needs, 
forced to teach children in trailers and dilapidated buildings, would 
not benefit from H.R. 2488. Their backlog of unmet needs means that 
they do not have the luxury of waiting four years before completing 
school construction. The Republican proposal also largely excludes some 
of our most needy school--those in rural areas. The provisions in the 
Republican tax bill may benefit a few large, wealthy school districts 
with the financial capacity to issue large bonds four years in advance 
of need, but it will not help rural districts.
  The bottom line is simple: this bill will only serve to hurt the 
American people by jeopardizing the stability of our economy and the 
prosperity of future generations for the instant gratification of tax 
cuts that are not only irresponsible, but dangerous. In reality the 
best tax cut we can give to all Americans is keeping interest rates low 
by paying down our debt. Reducing our national debt will provide a tax 
cut for millions of Americans because it will restrain interest rates, 
thereby saving them money on variable mortgages, new mortgages, auto 
loans, credit card payments, etc. Each percentage point increase in 
interest rates would mean an extra $200-$250 billion in mortgage costs 
to Americans. Paying down the national debt will protect future 
generations from an increasing tax burden to pay interest on the debt 
run up by current generations. More than 25% of individual income taxes 
go to paying interest on our national debt. Every dollar of lower debt 
saves MORE than one dollar in taxes for future generations.
  I urge you to act responsibly and conservatively--support the motion 
to recommit and secure a prosperous future by paying down the debt and 
saying no to fiscally reckless tax cuts.
  Mrs. McCARTHY of New York. Mr. Speaker, the Tax Bill presented on the 
House Floor today is extreme. It ignores the overwhelming need for 
Congress to address debt reduction and protect the long term health of 
Social Security and Medicare. Furthermore, this irresponsible tax 
proposal jeopardizes important priorities of mine, such as health care 
for our nation's veterans.
  I believe the overwhelming majority of this Congress wants to support 
a balanced and responsible tax cut. I know that my constituents on Long 
Island need tax relief. But the bill before us simply goes too far. The 
bill before us has been drafted to score political points. In order to 
demonstrate their support for a huge tax cut, the House leadership has 
sacrificed responsible economic policy.
  Several Members of the majority party have expressed their opposition 
to this irresponsible tax break because the huge cuts have been based 
on unproven estimates about the so-called budget surplus 15 years from 
now. The average American citizen certainly understands that using such 
projections is dangerous and irresponsible.
  Rather than trying to score political points, I believe we should be 
debating a tax cut that will meet the priorities of the majority of 
this Congress. Let's enact a more reasonable tax cut that will allow us 
to protect Social Security and Medicare, as well as improve healthcare 
for our veterans.
  Mr. Speaker, I will support tax cuts to help Long Island's families, 
businesses, seniors and veterans. However, the tax cuts contained in 
H.R. 2488 are dangerous and irresponsible and could jeopardize the 
economic security of my constituents. Therefore, I urge members to 
oppose H.R. 2488 and support more responsible and reasonable tax 
policy.
  Mr. VENTO. Mr. Speaker, I rise in opposition to this latest attempt 
to mortgage our children's future to enrich the richest one percent of 
our nation. Rather than financial freedom, this bill represents fiscal 
risk, irresponsibility, and unfairness. According to the independent 
research group, Citizens for Tax Justice, this tax scheme will give 
taxpayers earning more that $301,000 per year an annual bonus from 
Uncle Sam of $54,000. Taxpayers earning up to $38,000 will also benefit 
they receive an average annual tax cut of $101. That is truly generous 
of my Republican colleagues. With the passage of this bill, a small 
elite will get more in tax benefits than many working families in my 
family earn in an entire year. This plan gives a new meaning to Robin 
Hood--steal from the poor to give to the rich.
  In their rush to reward those they consider truly needy, the 
Republican Majority refuses to set aside even one dollar of the on-
budget surplus to extend the solvency of the Medicare Trust fund or the 
Social Security Trust Fund. $4,500 a month in new tax breaks for 
taxpayers earning more than $301,000 but not a penny for resolving the 
Medicare and Social Security programs. Mr. Chairman, it is time for a 
reality check.
  Frankly, this fiscal tax expenditure scheme, which is based on 
speculative projections, risks undercutting the solid economic growth 
of the U.S. and the global economy. This scheme threatens to blow a 
hole in the budget, stacking up dollar after dollar in deficit red ink 
with no chance to pay down the U.S. $5.6 trillion debt, while starving 
the defense and domestic programs to commitments significantly less 
than in 1999. Ironically, we cannot even meet the needs today and this 
tax scheme assumes $100 billion less over the next ten years. This 
action and projection assumes no emergency spending, no military needs, 
no natural disasters, no new investment in families and places the U.S. 
economy in a straight jacket. At its best, this measure is 
irresponsible, unneeded, unfair, unworkable and represents bad judgment 
and politics at its worst.
  I believe that it is possible for Congress to approve a targeted tax 
cut that will benefit working families. Such a tax cut could include 
fairness in the marriage penalty and incentives to help families to 
help themselves. Such a tax cut should be based on real economic 
projections and not be viewed through the rose colored glasses that the 
Republicans have used. Above all else, these tax cuts will not be 
achieved at the expense of Social Security and Medicare.
  In considering tax reform, Congress should not ignore the hidden tax 
imposed on American taxpayers--the tax on their time. Today, the tax 
code is too complex and takes far too much time for the average 
taxpayer to file a tax return. According to the Internal Revenue 
Service (IRS), it took the average taxpayer nearly 16 hours to prepare 
and file a typical tax return (Form 1040 and Schedules A and B). That 
is two days work spent on federal taxes.
  In 1996, to focus Congressional and public attention on tax reform 
and simplification and to cut the time that it takes to file taxes, I 
introduced H. Con. Res. 241, the ``10 for 60'' Resolution. My proposal 
directed Congress and the Administration to cut the time it takes to 
prepare taxes in half. As a first step, my proposal called for 10 
changes that would cut by 60 minutes the time it would take to do taxes 
in the next year. This proposal was intended to focus Congressional 
attention on the real problems with our tax system.
  This year, our colleague from Massachusetts, Richard Neal, has 
reintroduced the Individual Tax Simplification Act of 1999, H.R. 1420. 
This legislation, which I have cosponsored focuses on simplification 
for individual tax forms in a revenue neutral manner. H.R. 1420 would 
eliminate about 200 lines from tax forms, schedules and worksheets. 
This legislation should be viewed as the first down payment on real tax 
simplification and should be included in any tax legislation adopted 
this year.

[[Page 17230]]

  Mr. Speaker, I recognize that the current tax system is not perfect. 
Continued improvements can and must take place. Any tax reform package 
must be judged on specific criteria including the impact on budget, tax 
form simplification, equity for all taxpayers and sound public policy. 
As Congress considers tax reform, I will continue to advocate for those 
principles and support responsible legislation like the Democratic 
substitute amendment.
  The fundamental problem with the GOP tax measure is the risk to the 
economy, it doesn't add up and the recent changes just underline that 
mathematical error, subtract nearly a trillion dollars the entire on 
budget projected surplus the next ten years, than add back in the 
spending bills that the Republican majority vigorously advocate, such 
as the Pentagon appropriation, and you end up with a new added 
deficit--new debt as far as the eye can see and if its debt the next 
ten years the results explode on the next 20 years beyond reason. The 
prudent course of fiscal policy would be to meet our commitments to 
Social Security and Medicare, reasonably fund programs that we agree 
upon like investments in people, and pass a tax cut the Democrat tax 
measure that adds up not reliving the thrilling high deficit days and 
actions of the Reagan Era when the total debt quadrupled--vote for 
Rangel and vote against this political math foisted upon us by H.R. 
2488.
  Ms. BALDWIN. Mr. Speaker, I rise today in strong opposition to the 
$792 billion tax cut being considered in the House today. This 
legislation spends the entire projected budget surplus, leaving nothing 
to reduce the national debt or extend the solvency of Social Security 
and Medicare.
  For the first time in forty years, the federal government will 
achieve a budget surplus without relying on the surplus from the 
earmarked Social Security taxes. This achievement results from 
difficult budget decisions that have been made over the past decade. 
Today we are experiencing greater productivity, low inflation, low 
unemployment and broad based growth in real wages because we have 
focused on reducing deficits, paying down our debt, lowering interest 
rates and investing in our people. This legislation seeks to undermine 
the fiscal discipline that has created our current economy.
  Today's tax-cut legislation uses projected budget surpluses which may 
not materialize and could force further cuts in domestic discretionary 
spending. It is appalling that in this era of economic prosperity, 
instead of a congressional debate about needed long term investments to 
strengthen our domestic security, we are focusing on financing a tax 
give-away through budget cuts in programs that educate children, feed 
the hungry, provide health care and child care, and keep our drinking 
water safe.
  As a nation, we cannot continue to tolerate the fact that in America, 
43 million people have no health insurance. Sharing our nation's 
strength and good fortune through investments that work is far wiser 
and will pay for greater dividends than spiraling tax breaks for the 
most affluent Americans.
  Mr. CALVERT. Mr. Speaker, I rise today in support of the Financial 
Freedom Act of 1999. This is a common-sense piece of legislation which 
would provide broad based tax relief to individuals and families.
  For forty years, the Democrats had control of Congress and practiced 
their policy of, tax, tax, spend, spend. Now that Republicans have been 
in the majority for more than 4 years, we have balanced the budget, 
agreed to set aside all Social Security surplus funds for social 
Security and Medicare, and still have an excess of funds.
  Not surprisingly, the Democrats would prefer to keep these funds in 
Washington and create new and unneeded programs.
  The Democrats are acting as if they found a wallet full of money with 
no ID. They want to take the money and run with it. But this wallet 
does have an ID. It belongs to the American taxpayer. It is our moral 
obligation to return their money.
  Mr. Speaker we have these excess of funds because our economy is 
booming. And, the economy is booming because of the hard-work of the 
American people. Mr. Speaker, what has Congress contributed to the GDP? 
Nothing!
  We have no right to keep this money in Washington. We should return 
this money to the people who have worked long and hard for it.
  The Financial Freedom Act is a solid piece of legislation and I urge 
my colleagues to support it.
  Mr. COYNE. Mr. Speaker, I rise in opposition to H.R. 2488. I believe 
that this legislation will lead us back to another era of budget 
deficits.
  This bill is irresponsible because it relies upon uncertain 
projections. It is irresponsible because it relies upon unrealistic 
assumptions. It is irresponsible because it would cut taxes 
dramatically before Congress has taken the necessary steps to address 
the long-term solvency of Social Security and Medicare--not to mention 
the other challenges facing this country, challenges like providing 
education for our children, prescription drug benefits for our seniors, 
and affordable health insurance for all Americans. And it is 
irresponsible because it targets its tax relief to the wealthiest 
households in the country--the ones who have benefited most from the 
economic growth of the last 20 years--rather than to the hard-working 
families who have borne the burden of modernizing and streamlining our 
economy over the last two decades.
  This bill would be paid for with a trillion-dollar surplus that 
doesn't yet exist. At this point, it is just a budget projection. 
Anyone who has watched the federal government struggle to gets its 
deficits under control over the last 18 years knows that budget 
projections are notoriously inaccurate, and that slight changes in some 
of the assumptions can change the results significantly. The trillion 
dollar surplus we are expecting might never materialize if the economy 
suffers some kind of setback.
  Furthermore, an 800 billion dollar tax cut might even be the cause of 
such a setback. A tax cut now, when unemployment and inflation are both 
at record lows, could overheat the economy, bring back inflation, and 
trigger economic stagnation or even recession. Alternatively, it is 
conceivable that a huge tax cut could conceivably end the current 
period of economic growth simply by destroying public confidence in the 
federal government's willingness to exercise fiscal restraint.
  In addition, the trillion dollar surplus is based on the assumption 
that discretionary spending will stay below the existing budget caps 
until 2002 and then rise only with inflation. There is no trillion 
dollar surplus if discretionary spending is raised above the levels set 
by the current caps. But many of our colleagues, both Republicans and 
Democrats, have indicated that they believe that the current 
discretionary spending caps are unacceptably low and should be raised 
enough to allow adequate levels of spending on federal activities like 
law enforcement, medical research, and education. I share their 
concerns, and I firmly believe that discretionary spending should be 
increased to address such pressing domestic needs.
  Moreover, in considering the tax bill before us today, it is 
important to remember that even if the economic assumptions are correct 
and Congress chooses to limit discretionary spending sharply in order 
to pay for these tax cuts, the projected on-budget surpluses are only 
expected to last for 15 years. After 2015, Social Security, Medicare, 
and Medicaid costs are expected to produce massive budget deficits as 
the Baby Boom generation retires--deficts in the hundreds of billions 
of dollars each year. We cannot responsibly make large tax cuts today 
without first preparing for the massive financial challenge that awaits 
us in a few years.
  Such fiscal irresponsibility reflects a dramatic about-face from the 
progress we have made on the budget in recent years. I strongly believe 
that we must pursue fiscal policies that are conservative and cautious. 
That means that tax cuts should wait until after we've fixed Social 
Security and Medicare--and until the federal government has actually 
produced the surpluses necessary to pay for them.
  In addition, I believe that tax cuts should be balanced against other 
pressing national needs--like lifting children out of poverty, making 
prescription drugs affordable for our seniors, providing high-quality 
education to our children, and guaranteeing affordable health insurance 
to all Americans.
  And if we are going to cut taxes, I believe that we should cut the 
taxes of the working- and middle-class households who need and deserve 
tax relief the most, instead of cutting taxes disproportionately for 
the wealthy, as H.R. 2488 does.
  That is why I support the Democratic alternative tax cut proposal--
which provides significant but not profligate tax relief, conditions 
that tax relief upon action to make Social Security and Medicare 
solvent, and targets its tax relief to hard-working, middle-class 
American families who are struggling to make ends meet rather than 
those fortunate few who already have it pretty good.
  Like the bill introduced by Chairman Archer, the Democratic 
alternative raises the standard deduction for married couples filing 
jointly to eliminate the marriage penalty for many middle-class 
families--but it also reduces the marriage penalty on many working-
class couples by fixing the Earned Income Tax Credit.
  The Democratic alternative also increases the size of the existing 
Family Credit by $250

[[Page 17231]]

for each child less than 5 years old, and it uses tax credits to 
leverage private investment in poor communities, in improving the 
environment, and in school construction and modernization. The 
Democratic bill provides tax relief to small and family-owned 
businesses by increasing the existing section 179 expending provision, 
and by accelerating the expansion of the estate tax exclusion. And the 
Democratic tax cut simplifies multi-employer pension programs that 
cover millions of working Americans.
  The Republican tax plan, by contrast, disproportionately benefits the 
wealthiest Americans. It would phase out the estate tax, which 
currently only affects the richest 2 percent. It would lower taxes on 
capital gains income, most of which goes to the most affluent 
Americans. And even the centerpiece of the Republican tax cut, the 10 
percent across the board rate reduction, would disproportionately 
benefit the rich.
  The most important difference between the Democratic Republication 
bills, however, is the fact that the tax cuts in the Democratic 
alternative are contingent upon action on Social Security and Medicare. 
The majority of the tax cuts in the bill would not take effect until 
after the solvency of the Social Security and Medicare Programs is 
ensured. The tax cuts that would be enacted immediately--the sections 
of the bill making certain existing tax provisions permanent--would be 
offset with the revenue-raising provisions identified in Chairman 
Archer's bill.
  I believe that the more modest size and the contingency provisions of 
the Democratic alternative tax cut bill make it a much more responsible 
tax relief bill than H.R. 2488.
  Finally, Mr. Speaker, the Democratic tax cut alternative targets tax 
relief to the working- and middle-class families who are struggling to 
make ends meet. Those are the people who deserve tax relief the most. 
The Democratic bill, unlike the Republican bill, would eliminate the 
marriage penalty for low-income families. The Democratic alternative, 
unlike the Republican bill, would provide targeted assistance to 
working families for education, health care, long-term care, and child 
care. And the Democratic bill would provide estate tax relief to family 
farms and small businesses without, like the Republican bill, exempting 
the super-rich from all estate taxes. In short, while the Democratic 
tax cut alternative would not cut taxes as much as the Republican bill, 
it would cut taxes for many working families more than would the 
Republican bill.
  Consequently, on the grounds of fiscal restraint, responsibility, and 
fairness, I urge my colleagues to join me in rejecting this unwise 
legislation and supporting the Democratic alternative.
  Mr. BALLENGER. Mr. Speaker, today, I want to go on record in favor of 
``The Financial Freedom Act of 1999,'' a tax relief package which is a 
consequence of our strong economy and the successful 1997 Balanced 
Budget Agreement. You will recall that this historic budget deal put us 
on the glide path to a balanced federal budget which we now expect to 
attain in the current fiscal year--much sooner than we promised the 
American people. This fact presents us with an opportunity--and an 
obligation to our constituents--to do the right thing with our nation's 
fiscal affairs.
  I applaud the House leadership and the Ways and Means Committee, ably 
chaired by our colleague from Texas, Representative Bill Archer, for 
their commitment to bringing to the floor for a vote ``The Financial 
Freedom Act.'' Equally important, I embrace the commitment we have made 
to spend two out of every three dollars of the expected federal budget 
surplus for retirement security--let me stress this important fact, 
Congressional Republicans have promised to protect Social Security and 
Medicare for our nation's seniors before we give tax cuts. We're 
keeping that promise by locking away surplus funds from retirement 
security programs. We have pledged to return surplus dollars generated 
from excessive federal income taxes--this is the message of ``The 
Financial Freedom Act of 1999.''
  In addition to the relief for American taxpayers and their families 
in general, I want to take a minute to endorse the important changes in 
the tax code contained in ``The Financial Freedom Act'' to enhance 
retirement savings. For two years, I have advocated a sensible change 
to our tax laws related to employee stock ownership plans, or ESOPs. 
Specifically, the Ways and Means Committee included in the base bill a 
provision that would permit an employee participating in an ESOP to 
reinvest cash dividends paid on his or her stock for more company stock 
and permit the corporate payor of the dividends to take a tax deduction 
equal in value to the dividends.
  Current law permits the corporate payor of dividends on ESOP stock to 
take a deduction if the employee receives the dividends in cash, or if 
the employer uses the dividends to pay debt incurred to acquire the 
stock for the ESOP. So, oddly, current law does not permit the employee 
to voluntarily reinvest the dividends in more company stock. While 
there is a convoluted way to almost accomplish the same result (i.e., a 
tax deduction for reinvested ESOP dividends), it involves getting an 
IRS letter ruling, is limited in its applicability and causes 
administrative headaches in trying to coordinate the reinvested 
dividends with 401(k) elective deferrals.
  The confusion and needless regulatory burden of current law motivated 
me to introduce the very provision included in the Committee's bill in 
May 1997, in H.R. 1592, and to reintroduce this provision again this 
year as Section 2 of my bill, The ESOP Promotion Act of 1999 (H.R. 
2124).
  This provision is estimated to provide a new $200 million plus 
incentive for the expansion of stock ownership by employees.
  Let the record show that Chairman
Archer's mark recommended the change in law, and that this action by 
the Chairman was the very first time, may I repeat, the very first time 
in the near 25 year history of ESOPs that the House Ways and Means 
Committee Chairman's mark contained a positive expansion of ESOP law. 
May I compliment the Chair and my majority colleagues because for most 
of the 25 years of ESOP legislative history, the Committee was 
controlled by the other party and it seemed that every time we turned 
around someone was trying to take away from ESOPs and employee 
ownership. It seems that up until 1995 all we ESOP and employee 
ownership advocates ever did was fight anti-ESOP ideas that were 
originating in the Committee. I am proud to see under the leadership of 
Chairman Archer that view of ESOPs and employee ownership change, as 
evidenced by the expansion of the deduction of dividends paid on ESOP 
stock that is included in this bill.
  And that motivates me to note that when the Clinton Administration 
put forth its tax recommendations for fiscal year 2000, once again we 
had a proposal to limit ESOPs, to take away a tax incentive for 
employee ownership. The Administration basically proposed to repeal the 
1997 incentive for Subchapter S corporations to have ESOPs, and 
proposed a retroactive, unfathomable system of taxation for S 
corporations with ESOPs. As a Member who since 1990 has introduced 
legislation to allow S corporations to sponsor ESOPs, I am pleased that 
the Committee rejected this anti-ESOP Administration proposal. The S 
corporation ESOP reform finally became law in 1996 and was perfected in 
1997.
  So, you can understand my concern when I saw earlier this year the 
Administration basically trying to unravel a piece of legislation in 
which I have had such a long-standing interest.
  I do take note that the pending tax legislation in the other body, 
which perfected the S corporation ESOP law in 1997, has a provision to 
ensure that the 1997 law is not used by film-flam operators to create 
tax-favored S corporation ESOPs that are not really spreading equity 
ownership among employees of a bona fide business operation. Having a 
great interest in this area, I would hope that the Committee, and those 
who go to conference with the other body on the ``Financial Freedom 
Act,'' would take a serious look that the anti-abuse provision in the 
other body's bill. Based on my knowledge of that anti-abuse proposal, 
it would resolve any unintended consequences of our 1996 and 1997 laws 
to ensure employees of S corporations can participate in ownership 
through an ESOP.
  Again, I am pleased to see in the bill before us today the positive 
leadership taken by Chairman Archer and the majority of the Committee 
for ESOPs and employee ownership.
  Mr. PHELPS. Mr. Speaker, I rise today in opposition to the massive 
and risky tax cut measure before us today. I urge my colleagues to 
support Representative Tanner's motion to recommit the bill to 
Committee, where it can be improved. Should that motion fail, we must 
reject this irresponsible bill.
  The Leadership's bill eagerly spends a surplus that may never 
materialize. It commits almost the entire non-Social Security surplus 
to tax cuts, ignoring other critical needs like reducing our $5.6 
trillion national debt. It jeopardizes funding for education, veterans' 
benefits, agriculture and other basic programs which will have to 
endure huge cuts over the next ten years if these tax provisions are 
enacted. It spends hundreds of billions of dollars that I had hoped we 
would use instead to reform and strengthen Medicare and provide a 
prescription drug benefit, making it extremely unlikely that Medicare 
solvency can be ensured without slashing benefits or increasing costs 
for our senior citizens.
  The bill also directs two-thirds of its tax cut benefits to the 
wealthiest 10% of Americans,

[[Page 17232]]

and close to half of the cuts would benefit the richest 1% of taxpayers 
with incomes exceeding $300,000. And although the price tag attached to 
this bill is staggering enough, it pales in comparison to the costs 
that will result once all of its provisions are in full effect a decade 
from now. From 2010 to 2019, this tax package would cost the Treasury 
$2.8 trillion--several times the initial cost of the bill, and a burden 
that cannot possibly be borne while maintaining adequate funding for 
domestic programs and continuing to pay down our debt.
  Like many of my colleagues, I support certain provisions in the 
Leaderships bill, including in particular the phase-out of the estate 
tax and the elimination of the marriage penalty. In fact, I am a co-
sponsor of stand-alone bills that would accomplish both of these goals. 
But I simply cannot ignore this reckless and dangerous use of a budget 
surplus that should be divided among several, equally important needs, 
rather than snatched up before it even exists and lavished on the 
wealthiest Americans at the expense of programs that benefit our 
working families and elderly.
  Due to some of these same concerns, I will also vote against the 
Democratic substitute. Although this alternative is a more responsible 
and targeted approach, it still makes the dangerous assumption that a 
large surplus is guaranteed for the next ten years and beyond. If this 
does not prove to be the case, we will all suffer when our debt 
continues to spiral out of control, funding is no longer available for 
some of the most basic federal programs, and the solvency of Social 
Security and Medicare becomes a goal that is no longer in reach.
  The ``yea'' vote I cast today will be for Representative Tanner's 
motion to recommit this bill to the Ways and Means Committee. The 
motion mirrors the fundamental principles of the Blue Dog budget that 
I, along with a majority of Democrats and 26 Republicans, supported 
earlier in the year. This motion changes none of the specific 
provisions in the majority's bill. Instead, it simply requires the 
Committee to reduce the overall tax cut to one-quarter of the on-budget 
surplus and to create a Debt Reduction Account to ensure that half of 
the on-budget surplus is preserved for reducing our debt. Altering the 
bill in this way would ensure that when there is a surplus, there will 
also be a generous tax cut. But it will also allow us to be secure in 
the knowledge that our debt will continue to be reduced and that our 
children and grandchildren will not have to shoulder the burden of our 
recklessness.
  I consider myself extremely fortunate to have entered Congress at a 
time when the tough choices made by my colleagues and predecessors who 
balanced the budget in 1997 are beginning to yield tangible results. I 
now consider it my duty to maintain the fiscal responsibility that led 
us to this point and ensure that we do not recreate massive deficits 
like the ones we've just escaped from. We all want to reward hard-
working American families by returning some of their tax dollars, but I 
cannot in good conscience do this at the expense of our future fiscal 
health. Therefore, Mr. Speaker, I will support the motion to recommit 
because I believe Americans deserve a responsible tax cut when we are 
sure we have the money to pay for it. But I will vote against H.R. 2488 
because I also believe Americans deserve a balanced federal budget, a 
solvent Medicare and Social Security system, and the knowledge that the 
programs and services they depend on today will still be there 
tomorrow.
  Mr. STARK. Mr. Speaker, I opposed the Republican tax bill in 
Committee and I oppose it today because it will force, in the near 
future, massive, destructive cuts in Medicare, and it prevents us from 
improving Medicare with a modest prescription drug benefit.
  By reducing the tax cut by about 40%, we can extend the life of the 
Medicare Trust Fund well into the retirement of the Baby Boom 
generation, from 2015 to 2027. We can also make Medicare a modern 
health care program by covering pharmaceuticals which reduce the need 
for hospitalizations and which provide quality, preventive care.
  If we don't use these resources to extend the life of Medicare, but 
instead pass this tax cut, we are voting for future massive cuts in 
benefits to seniors and the disabled, or for massive, crippling cuts to 
hospitals, nursing homes, and home health agencies--or for a massive 
future tax increase at a time when the economy may not be able to 
handle such an increase.
  The choice seems obvious: save resources for Medicare today, or face 
impossible choices in the future.
  When we know with absolute certainty that Medicare will need major 
new resources in the near future, do we want to give away revenues in a 
tax cut, largely to the rich, that could prevent this future crisis?
  Workers per Medicare Beneficiary will fall from 1998's 3.9 to 2.3 
workers per beneficiary in 2030. We must make it easier now for those 
fewer workers of the year 2030 to pay taxes to support retirees and the 
disabled. That means dedicating revenues now (by retiring debt).
  Other options for extending the life of the Hospital Trust Fund are 
unacceptable. The Medicare Hospital Trust Fund runs out of money in 
2015. ``To bring the HI program into actuarial balance, over just the 
next 25 years under the Trustees' intermediate assumptions, would 
require either that outlays be further reduced by 11% or that income 
[payroll taxes] be increased by 12 percent.''
  By voting not to save 15% of the surplus to HI, thus extending the 
Trust Fund to 2027, Members are in effect voting for additional major 
hospital cuts or future tax increases.
  Republican Members of Ways and Means have sponsored or cosponsored 
many Medicare spending bills that will cost tens of billions over the 
next 10 years. If they don't support saving some money for Medicare, 
supporting these Medicare bills isn't real--it is hypocrisy. Mr. Foley 
is on 9 bills including a major hospital outpatient payment relief 
bill. Mr. Hayworth has 4, Mr. Watkins has gone to bat for the 
chiropractors and would spend billions more. Mr. McInnis would spend 
billions more. Mr. Ramstad is supporting 6 bills that would spend 
billions, Mr. English 11, Mr. Camp 6, and Mr. Nussle, leader of the 
rural caucus, has 7 spending bills that would cost billions. You all 
are basically saying you don't really want to do any of those spending 
bills or those bills to undo the BBA, you just want tax cuts.
  Can't shift more costs to seniors and disabled. Medicare is already 
one of the lowest retiree benefit plans in the industrialized world and 
worth less than the value of the average private insurance/employer 
plan. (That's why we need to add a prescription drug benefit.) Costs 
are already being shifted to seniors because of that Balanced Budget 
Act. We can't shift more.
  Mr. CRANE. Mr. Speaker, I rise in strong support of H.R. 2488, the 
Financial Freedom Act of 1999. I would like to commend our Ways and 
Means Committee Chairman Bill Archer for this fine product of his hard 
labors.
  Thanks to the fiscal discipline of the Republican majority in 
Congress, we have a budget surplus for the first time in a generation. 
That surplus money belongs to the American taxpayers, and we are 
returning it to them in the form of tax relief.
  While some of my Democrat colleagues are suggesting this is not the 
time for tax cuts, I would tell them that I disagree. More money is 
going to the government, as a share of the total economy, than at any 
point since World War II. Americans are spending more on their federal, 
state and local taxes than they spend even on food, shelter and 
clothing combined. Taxpayers need a break and that's what this 
Republican tax cut bill will give them.
  According to the Congressional Budget Office, we expect to see $996 
billion--nearly one trillion dollars--in budget surpluses after we set 
aside Social Security and Medicare surpluses. While some are suggesting 
that we put more aside for debt reduction or ``other needs'', I know 
from my long experience in Washington that if you leave money lying 
around this town, someone will find a way to spend it. I believe we 
should return it to the American taxpayers.
  The Financial Freedom Act provides tax relief for all Americans. It 
starts off with a 10 percent across-the-board individual tax rate cut. 
In addition, the bill provides marriage penalty relief, pension reform 
as well as incentives for savings and to make health care and long-term 
care more affordable. The bill also includes ideas that I have worked 
for years to advance--reductions in the capital gains tax and the 
abolition of the estate, or what I call the ``death'', tax. H.R. 2488 
will also make tax time less complicated as it eventually abolishes the 
alternative minimum tax on individuals and businesses.
  I am particularly grateful that some items that I had been working on 
were included in this bill. For example, the bill will lower the 
capital gains tax on qualified settlement funds used to pay the 
beneficiaries of class action law suits, such as the one established 
for those suffering from asbestos-related illnesses. H.R. 2488 also 
allows life insurance companies to file a consolidated tax return with 
an affiliated group of non-life insurance companies. This will go a 
long way to the financial modernization goals this body has supported. 
I have also been able to include a provision to encourage more foreign 
investment in U.S. mutual funds by removing the U.S. tax code as a 
penalty to investors from overseas.
  While there are some provisions I hoped to have included in this 
bill, I look forward to the continuation of the process so that I may 
have an opportunity to address those other issues.

[[Page 17233]]

  I urge my colleagues to support this bill so that we can get about 
the work of providing much-needed tax relief to the American people.
  The SPEAKER pro tempore (Mr. Thornberry). All time for general debate 
has expired.


     Amendment In The Nature Of A Substitute Offered by Mr. Rangel

  Mr. RANGEL. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  The SPEAKER pro tempore. The Clerk will designate the amendment in 
the nature of a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Part B amendment in the nature of a substitute offered by 
     Mr. Rangel:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Reduction Act of 1999''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--

Sec. 1. Short title; etc.
Sec. 2. Tax reductions contingent on social security and medicare 
              solvency certifications.

                    TITLE I--TAX RELIEF FOR FAMILIES

Sec. 101. Marriage penalty relief.
Sec. 102. Nonrefundable personal credits fully allowed against regular 
              tax liability and minimum tax liability.
Sec. 103. Increase in child tax credit.
Sec. 104. Deduction of State and local general sales taxes in lieu of 
              State and local income taxes.

                   TITLE II--INCENTIVES FOR EDUCATION

Sec. 201. Expansion of incentives for public schools.
Sec. 202. Extension of exclusion for employer-provided educational 
              assistance; exclusion to apply to assistance for graduate 
              education.

        TITLE III--INCENTIVES FOR HEALTH CARE AND LONG-TERM CARE

Sec. 301. Long-term care tax credit.
Sec. 302. Deduction for 100 percent of health insurance costs of self-
              employed individuals.

      TITLE IV--PERMANENT EXTENSION OF CERTAIN EXPIRING PROVISIONS

Sec. 401. Research credit.
Sec. 402. Work opportunity and welfare-to-work credits.
Sec. 403. Subpart F exemption for active financing income.
Sec. 404. Expensing of environmental remediation costs.

               TITLE V--COMMUNITY DEVELOPMENT INITIATIVES

Sec. 501. Increase in State ceiling on low-income housing credit.
Sec. 502. New markets tax credit.
Sec. 503. Credit to holders of Better America Bonds.

                  TITLE VI--SMALL BUSINESS INCENTIVES

Sec. 601. Acceleration of $1,000,000 estate tax exclusion.
Sec. 602. Increase in expense treatment for small businesses.

                     TITLE VII--PENSION PROVISIONS

Sec. 701. Treatment of multiemployer plans under section 415.
Sec. 702. Actuarial reduction only for benefits beginning before age 62 
              in case of benefits under multiemployer plans.

                      TITLE VIII--REVENUE OFFSETS

Sec. 801. Returns relating to cancellations of indebtedness by 
              organizations lending money.
Sec. 802. Extension of Internal Revenue Service user fees.
Sec. 803. Limitations on welfare benefit funds of 10 or more employer 
              plans.
Sec. 804. Increase in elective withholding rate for nonperiodic 
              distributions from deferred compensation plans.
Sec. 805. Controlled entities ineligible for REIT status.
Sec. 806. Treatment of gain from constructive ownership transactions.
Sec. 807. Transfer of excess defined benefit plan assets for retiree 
              health benefits.
Sec. 808. Modification of installment method and repeal of installment 
              method for accrual method taxpayers.
Sec. 809. Limitation on use of nonaccrual experience method of 
              accounting.
Sec. 810. Exclusion of like-kind exchange property from nonrecognition 
              treatment on the sale of a principal residence.
Sec. 811. Disallowance of noneconomic tax attributes.

     TITLE IX--NATIONAL COMMISSION ON TAX REFORM AND SIMPLIFICATION

Sec. 901. Establishment.
Sec. 902. Functions.
Sec. 903. Administration.
Sec. 904. General.

     SEC. 2. TAX REDUCTIONS CONTINGENT ON SOCIAL SECURITY AND 
                   MEDICARE SOLVENCY CERTIFICATIONS.

       (a) In General.--Notwithstanding any other provision of 
     this Act, no provision of this Act (or amendment made 
     thereby) shall take effect until there is--
       (1) a social security certification,
       (2) a Medicare certification, and
       (3) a balanced budget certification.
       (b) Extension of Expiring Provisions and Revenue Offsets 
     Not Affected.--
       (1) In general.--Except as provided in paragraph (2), 
     sections 102, 202, title IV, and title VIII shall take effect 
     without regard to the provisions of subsection (a).
       (2) Only 2-year extension of certain provisions if no 
     solvency and budget determinations.--
       (A) In general.--If, as of January 1, 2002, all of the 
     certifications under subsection (a) have not been made--
       (i) section 26 of the Internal Revenue Code of 1986 shall 
     be applied to taxable years beginning during the suspension 
     period without regard to the amendment made by section 102,
       (ii) section 127 of such Code shall not apply with respect 
     to courses beginning during the suspension period,
       (iii) sections 41 and 198 of such Code shall not apply to 
     amounts paid or incurred during the suspension period,
       (iv) sections 51 and 51A of such Code shall not apply to 
     individuals who begin work for the employer during the 
     suspension period, and
       (v) sections 953(e) and 954(h) of such Code shall not apply 
     to taxable years beginning during the suspension period.
       (B) Suspension period.--For purposes of subparagraph (A), 
     the suspension period is the period beginning on January 1, 
     2002, and ending on the earliest date that all of the 
     certifications under subsection (a) have been made.
       (c) Definitions.--For purposes of this subsection--
       (1) Social security solvency certification.--The term 
     ``social security solvency certification'' means a 
     certification by the Board of Trustees of the Social Security 
     Trust Funds that the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund 
     are in actuarial balance for the 75-year period utilized in 
     the most recent annual report of such Board of Trustees 
     pursuant to section 201(c)(2) of the Social Security Act (42 
     U.S.C. 401(c)(2)).
       (2) Medicare solvency certification.--For purposes of this 
     subsection, the term ``Medicare solvency certification'' 
     means a certification by the Board of Trustees of the Federal 
     Hospital Insurance Trust Fund that such Trust Fund is in 
     actuarial balance until the year 2027.
       (3) Balanced budget certification.--There is a balanced 
     budget certification if the Director of the Office of 
     Management and Budget certifies that the tax reductions made 
     by this Act will not create an on-budget deficit for any 
     fiscal year in the period 2000 through 2009 after taking into 
     account non-Social-Security deficit amounts necessary for the 
     certifications under paragraphs (1) and (2).

                    TITLE I--TAX RELIEF FOR FAMILIES

     SEC. 101. MARRIAGE PENALTY RELIEF.

       (a) Standard Deduction.--
       (1) In general.--Paragraph (2) of section 63(c) (relating 
     to standard deduction) is amended--
       (A) by striking ``$5,000'' in subparagraph (A) and 
     inserting ``twice the dollar amount in effect under 
     subparagraph (C) for the taxable year'',
       (B) by adding ``or'' at the end of subparagraph (B),
       (C) by striking ``in the case of'' and all that follows in 
     subparagraph (C) and inserting ``in any other case.'', and
       (D) by striking subparagraph (D).
       (2) Technical amendments.--
       (A) Subparagraph (B) of section 1(f)(6) is amended by 
     striking ``(other than with'' and all that follows through 
     ``shall be applied'' and inserting ``(other than with respect 
     to sections 63(c)(4) and 151(d)(4)(A)) shall be applied''.
       (B) Paragraph (4) of section 63(c) is amended by adding at 
     the end the following flush sentence:

     ``The preceding sentence shall not apply to the amount 
     referred to in paragraph (2)(A).''.
       (b) Earned Income Credit.--Subsection (a) of section 32 
     (relating to credit for earned income) is amended by adding 
     at the end the following new paragraph:
       ``(3) Reduction of marriage penalty.--
       ``(A) In general.--In the case of a joint return, the 
     phaseout amount under this section shall be such amount 
     (determined without regard to this paragraph) increased by 
     $2,500 ($2,000 in the case of taxable years beginning during 
     2000).
       ``(B) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2001, the $2,500 
     amount contained in subparagraph (A) shall be increased by an 
     amount equal to the product of--

[[Page 17234]]

       ``(i) such dollar amount, and
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2000' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any increase determined under the preceding sentence is 
     not a multiple of $50, such increase shall be rounded to the 
     next lowest multiple of $50.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
       (d) Phasein of Increase in Basic Standard Deduction.--In 
     the case of taxable years beginning during 2000--
       (1) there shall be taken into account under subparagraph 
     (A) section 63(c)(2) of the Internal Revenue Code of 1986 
     only one-half of the increase which would (but for this 
     subsection) apply, and
       (2) the basic standard deduction for a married individual 
     filing a separate return shall be one-half of the amount 
     applicable under such subparagraph.

     SEC. 102. NONREFUNDABLE PERSONAL CREDITS FULLY ALLOWED 
                   AGAINST REGULAR TAX LIABILITY AND MINIMUM TAX 
                   LIABILITY.

       (a) In General.--Subsection (a) of section 26 (relating to 
     limitation based on amount of tax) is amended to read as 
     follows:
       ``(a) Limitation Based on Amount of Tax.--The aggregate 
     amount of credits allowed by this subpart for the taxable 
     year shall not exceed the sum of--
       ``(1) the taxpayer's regular tax liability for the taxable 
     year, and
       ``(2) the tax imposed for the taxable year by section 
     55(a).''.
       (b) Child Credit.--Subsection (d) of section 24 is amended 
     by striking paragraph (2) and by redesignating paragraph (3) 
     as paragraph (2).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 103. INCREASE IN CHILD TAX CREDIT.

       (a) In General.--Subsection (a) of section 24 (relating to 
     child tax credit), as amended by section 301, is amended by 
     adding at the end the following new sentence:

     ``In the case of a qualifying child who has not attained age 
     5 as of the close of the calendar year in which the taxable 
     year of the taxpayer begins, paragraph (1) shall be applied 
     by substituting `$750' for `$500'.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 104. DEDUCTION OF STATE AND LOCAL GENERAL SALES TAXES IN 
                   LIEU OF STATE AND LOCAL INCOME TAXES.

       (a) In General.--Subsection (b) of section 164 is amended 
     by adding at the end thereof the following new paragraph:
       ``(5) General sales taxes.--For purposes of subsection 
     (a)--
       ``(A) Election to deduct state and local sales taxes in 
     lieu of state and local income taxes.--
       ``(i) In general.--At the election of the taxpayer for the 
     taxable year, subsection (a) shall be applied--

       ``(I) without regard to the reference to State and local 
     income taxes,
       ``(II) as if State and local general sales taxes were 
     referred to in a paragraph thereof, and
       ``(III) without regard to the last sentence.

       ``(B) Definition of general sales tax.--The term `general 
     sales tax' means a tax imposed at one rate in respect of the 
     sale at retail of a broad range of classes of items.
       ``(C) Special rules for food, etc.--In the case of items of 
     food, clothing, medical supplies, and motor vehicles--
       ``(i) the fact that the tax does not apply in respect of 
     some or all of such items shall not be taken into account in 
     determining whether the tax applies in respect of a broad 
     range of classes of items, and
       ``(ii) the fact that the rate of tax applicable in respect 
     of some or all of such items is lower than the general rate 
     of tax shall not be taken into account in determining whether 
     the tax is imposed at one rate.
       ``(D) Items taxed at different rates.--Except in the case 
     of a lower rate of tax applicable in respect of an item 
     described in subparagraph (C), no deduction shall be allowed 
     under this paragraph for any general sales tax imposed in 
     respect of an item at a rate other than the general rate of 
     tax.
       ``(E) Compensating use taxes.--A compensating use tax in 
     respect of an item shall be treated as a general sales tax. 
     For purposes of the preceding sentence, the term 
     `compensating use tax' means, in respect of any item, a tax 
     which--
       ``(i) is imposed on the use, storage, or consumption of 
     such item, and
       ``(ii) is complementary to a general sales tax, but only if 
     a deduction is allowable under this paragraph in respect of 
     items sold at retail in the taxing jurisdiction which are 
     similar to such item.
       ``(F) Special rule for motor vehicles.--In the case of 
     motor vehicles, if the rate of tax exceeds the general rate, 
     such excess shall be disregarded and the general rate shall 
     be treated as the rate of tax.
       ``(G) Separately stated general sales taxes.--If the amount 
     of any general sales tax is separately stated, then, to the 
     extent that the amount so stated is paid by the consumer 
     (otherwise than in connection with the consumer's trade or 
     business) to his seller, such amount shall be treated as a 
     tax imposed on, and paid by, such consumer.
       ``(H) Amount of deduction to be determined under tables.--
       ``(i) In general.--The amount of the deduction allowed by 
     this paragraph shall be determined under tables prescribed by 
     the Secretary.
       ``(ii) Requirements for tables.--The tables prescribed 
     under clause (i) shall reflect the provisions of this 
     paragraph and shall be based on the average consumption by 
     taxpayers on a State-by-State basis, as determined by the 
     Secretary, taking into account filing status, number of 
     dependents, adjusted gross income, and rates of State and 
     local general sales taxation.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

                   TITLE II--INCENTIVES FOR EDUCATION

     SEC. 201. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

       (a) In General.--Chapter 1 is amended by adding at the end 
     the following new subchapter:

         ``Subchapter X--Public School Modernization Provisions

``Part I. Credit to holders of qualified public school modernization 
              bonds.
``Part II. Qualified school construction bonds.
``Part III. Incentives for education zones.

 ``PART I--CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL MODERNIZATION 
                                 BONDS

``Sec. 1400F. Credit to holders of qualified public school 
              modernization bonds.

     ``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
                   MODERNIZATION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified public school modernization bond on a 
     credit allowance date of such bond which occurs during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for such taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to credit allowance dates during such year 
     on which the taxpayer holds such bond.

       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified public school modernization bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified public school modernization bond is 
     the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of issuance of the issue) on outstanding 
     long-term corporate debt obligations (determined under 
     regulations prescribed by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Qualified Public School Modernization Bond; Credit 
     Allowance Date.--For purposes of this section--
       ``(1) Qualified public school modernization bond.--The term 
     `qualified public school modernization bond' means--
       ``(A) a qualified zone academy bond, and
       ``(B) a qualified school construction bond.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(e) Other Definitions.--For purposes of this subchapter--

[[Page 17235]]

       ``(1) Local educational agency.--The term `local 
     educational agency' has the meaning given to such term by 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965. Such term includes the local educational agency that 
     serves the District of Columbia but does not include any 
     other State agency.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Public school facility.--The term `public school 
     facility' shall not include--
       ``(A) any stadium or other facility primarily used for 
     athletic contests or exhibitions or other events for which 
     admission is charged to the general public, or
       ``(B) any facility which is not owned by a State or local 
     government or any agency or instrumentality of a State or 
     local government.
       ``(f) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(g) Bonds Held by Regulated Investment Companies.--If any 
     qualified public school modernization bond is held by a 
     regulated investment company, the credit determined under 
     subsection (a) shall be allowed to shareholders of such 
     company under procedures prescribed by the Secretary.
       ``(h) Credits May be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified public school 
     modernization bond and the entitlement to the credit under 
     this section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person who on the credit allowance date holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified public school modernization bond as if 
     it were a stripped bond and to the credit under this section 
     as if it were a stripped coupon.
       ``(i) Treatment for Estimated Tax Purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a qualified 
     public school modernization bonds on a credit allowance date 
     shall be treated as if it were a payment of estimated tax 
     made by the taxpayer on such date.
       ``(j) Credit May Be Transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(k) Reporting.--Issuers of qualified public school 
     modernization bonds shall submit reports similar to the 
     reports required under section 149(e).
       ``(l) Termination.--This section shall not apply to any 
     bond issued after September 30, 2004.

             ``PART II--QUALIFIED SCHOOL CONSTRUCTION BONDS

``Sec. 1400G. Qualified school construction bonds.

     ``SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION BONDS.

       ``(a) Qualified School Construction Bond.--For purposes of 
     this subchapter, the term `qualified school construction 
     bond' means any bond issued as part of an issue if--
       ``(1) 95 percent or more of the proceeds of such issue are 
     to be used for the construction, rehabilitation, or repair of 
     a public school facility or for the acquisition of land on 
     which such a facility is to be constructed with part of the 
     proceeds of such issue,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such school is located,
       ``(3) the issuer designates such bond for purposes of this 
     section, and
       ``(4) the term of each bond which is part of such issue 
     does not exceed 15 years.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) by 
     any issuer shall not exceed the sum of--
       ``(1) the limitation amount allocated under subsection (d) 
     for such calendar year to such issuer, and
       ``(2) if such issuer is a large local educational agency 
     (as defined in subsection (e)(4)) or is issuing on behalf of 
     such an agency, the limitation amount allocated under 
     subsection (e) for such calendar year to such agency.
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified school construction bond 
     limitation for each calendar year. Such limitation is--
       ``(1) $11,000,000,000 for 2000,
       ``(2) $11,000,000,000 for 2001, and
       ``(3) except as provided in subsection (f), zero after 
     2001.
       ``(d) Half of Limitation Allocated Among States.--
       ``(1) In general.--One-half of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     among the States under paragraph (2) by the Secretary. The 
     limitation amount allocated to a State under the preceding 
     sentence shall be allocated by the State to issuers within 
     such State and such allocations may be made only if there is 
     an approved State application.
       ``(2) Allocation formula.--The amount to be allocated under 
     paragraph (1) for any calendar year shall be allocated among 
     the States in proportion to the respective amounts each such 
     State received for Basic Grants under subpart 2 of part A of 
     title I of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 6331 et seq.) for the most recent fiscal year 
     ending before such calendar year. For purposes of the 
     preceding sentence, Basic Grants attributable to large local 
     educational agencies (as defined in subsection (e)) shall be 
     disregarded.
       ``(3) Minimum allocations to states.--
       ``(A) In general.--The Secretary shall adjust the 
     allocations under this subsection for any calendar year for 
     each State to the extent necessary to ensure that the sum 
     of--
       ``(i) the amount allocated to such State under this 
     subsection for such year, and
       ``(ii) the aggregate amounts allocated under subsection (e) 
     to large local educational agencies in such State for such 
     year,
     is not less than an amount equal to such State's minimum 
     percentage of the amount to be allocated under paragraph (1) 
     for the calendar year.
       ``(B) Minimum percentage.--A State's minimum percentage for 
     any calendar year is the minimum percentage described in 
     section 1124(d) of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6334(d)) for such State for the most 
     recent fiscal year ending before such calendar year.
       ``(4) Allocations to certain possessions.--The amount to be 
     allocated under paragraph (1) to any possession of the United 
     States other than Puerto Rico shall be the amount which would 
     have been allocated if all allocations under paragraph (1) 
     were made on the basis of respective populations of 
     individuals below the poverty line (as defined by the Office 
     of Management and Budget). In making other allocations, the 
     amount to be allocated under paragraph (1) shall be reduced 
     by the aggregate amount allocated under this paragraph to 
     possessions of the United States.
       ``(5) Allocations for indian schools.--In addition to the 
     amounts otherwise allocated under this subsection, 
     $200,000,000 for calendar year 2000, and $200,000,000 for 
     calendar year 2001, shall be allocated by the Secretary of 
     the Interior for purposes of the construction, 
     rehabilitation, and repair of schools funded by the Bureau of 
     Indian Affairs. In the case of amounts allocated under the 
     preceding sentence, Indian tribal governments (as defined in 
     section 7871) shall be treated as qualified issuers for 
     purposes of this subchapter.
       ``(6) Approved state application.--For purposes of 
     paragraph (1), the term `approved State application' means an 
     application which is approved by the Secretary of Education 
     and which includes--
       ``(A) the results of a recent publicly-available survey 
     (undertaken by the State with the involvement of local 
     education officials, members of the public, and experts in 
     school construction and management) of such State's needs for 
     public school facilities, including descriptions of--
       ``(i) health and safety problems at such facilities,
       ``(ii) the capacity of public schools in the State to house 
     projected enrollments, and
       ``(iii) the extent to which the public schools in the State 
     offer the physical infrastructure needed to provide a high-
     quality education to all students, and
       ``(B) a description of how the State will allocate to local 
     educational agencies, or otherwise use, its allocation under 
     this subsection to address the needs identified under 
     subparagraph (A), including a description of how it will--
       ``(i) give highest priority to localities with the greatest 
     needs, as demonstrated by inadequate school facilities 
     coupled with a low level of resources to meet those needs,
       ``(ii) use its allocation under this subsection to assist 
     localities that lack the fiscal capacity to issue bonds on 
     their own, and
       ``(iii) ensure that its allocation under this subsection is 
     used only to supplement, and not supplant, the amount of 
     school construction, rehabilitation, and repair in the State 
     that would have occurred in the absence of such allocation.

     Any allocation under paragraph (1) by a State shall be 
     binding if such State reasonably determined that the 
     allocation was in accordance with the plan approved under 
     this paragraph.
       ``(e) Half of Limitation Allocated Among Largest School 
     Districts.--
       ``(1) In general.--One-half of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     under paragraph (2) by the Secretary among local educational 
     agencies which are large local educational agencies for such 
     year. No qualified school construction bond may be issued by 
     reason of an allocation to a large local educational agency 
     under the preceding sentence unless such agency has an 
     approved local application.

[[Page 17236]]

       ``(2) Allocation formula.--The amount to be allocated under 
     paragraph (1) for any calendar year shall be allocated among 
     large local educational agencies in proportion to the 
     respective amounts each such agency received for Basic Grants 
     under subpart 2 of part A of title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
     the most recent fiscal year ending before such calendar year.
       ``(3) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local educational 
     agency for any calendar year may be reallocated by such 
     agency to the State in which such agency is located for such 
     calendar year. Any amount reallocated to a State under the 
     preceding sentence may be allocated as provided in subsection 
     (d)(1).
       ``(4) Large local educational agency.--For purposes of this 
     section, the term `large local educational agency' means, 
     with respect to a calendar year, any local educational agency 
     if such agency is--
       ``(A) among the 100 local educational agencies with the 
     largest numbers of children aged 5 through 17 from families 
     living below the poverty level, as determined by the 
     Secretary using the most recent data available from the 
     Department of Commerce that are satisfactory to the 
     Secretary, or
       ``(B) 1 of not more than 25 local educational agencies 
     (other than those described in subparagraph (A)) that the 
     Secretary of Education determines (based on the most recent 
     data available satisfactory to the Secretary) are in 
     particular need of assistance, based on a low level of 
     resources for school construction, a high level of enrollment 
     growth, or such other factors as the Secretary deems 
     appropriate.
       ``(5) Approved local application.--For purposes of 
     paragraph (1), the term `approved local application' means an 
     application which is approved by the Secretary of Education 
     and which includes--
       ``(A) the results of a recent publicly-available survey 
     (undertaken by the local educational agency or the State with 
     the involvement of school officials, members of the public, 
     and experts in school construction and management) of such 
     agency's needs for public school facilities, including 
     descriptions of--
       ``(i) the overall condition of the local educational 
     agency's school facilities, including health and safety 
     problems,
       ``(ii) the capacity of the agency's schools to house 
     projected enrollments, and
       ``(iii) the extent to which the agency's schools offer the 
     physical infrastructure needed to provide a high-quality 
     education to all students,
       ``(B) a description of how the local educational agency 
     will use its allocation under this subsection to address the 
     needs identified under subparagraph (A), and
       ``(C) a description of how the local educational agency 
     will ensure that its allocation under this subsection is used 
     only to supplement, and not supplant, the amount of school 
     construction, rehabilitation, or repair in the locality that 
     would have occurred in the absence of such allocation.

     A rule similar to the rule of the last sentence of subsection 
     (d)(6) shall apply for purposes of this paragraph.
       ``(f) Carryover of Unused Limitation.--If for any calendar 
     year--
       ``(1) the amount allocated under subsection (d) to any 
     State, exceeds
       ``(2) the amount of bonds issued during such year which are 
     designated under subsection (a) pursuant to such allocation,

     the limitation amount under such subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess. A similar rule shall apply to the 
     amounts allocated under subsection (d)(5) or (e).
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--A bond shall not be treated as failing 
     to meet the requirement of subsection (a)(1) solely by reason 
     of the fact that the proceeds of the issue of which such bond 
     is a part are invested for a temporary period (but not more 
     than 36 months) until such proceeds are needed for the 
     purpose for which such issue was issued.
       ``(2) Binding commitment requirement.--Paragraph (1) shall 
     apply to an issue only if, as of the date of issuance, there 
     is a reasonable expectation that--
       ``(A) at least 10 percent of the proceeds of the issue will 
     be spent within the 6-month period beginning on such date for 
     the purpose for which such issue was issued, and
       ``(B) the remaining proceeds of the issue will be spent 
     with due diligence for such purpose.
       ``(3) Earnings on proceeds.--Any earnings on proceeds 
     during the temporary period shall be treated as proceeds of 
     the issue for purposes of applying subsection (a)(1) and 
     paragraph (1) of this subsection.

               ``PART III--INCENTIVES FOR EDUCATION ZONES

``Sec. 1400H. Qualified zone academy bonds.
``Sec. 1400I. Corporate contributions to specialized training centers.

     ``SEC. 1400H. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bond.--For purposes of this 
     subchapter--
       ``(1) In general.--The term `qualified zone academy bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for a qualified purpose with respect to a 
     qualified zone academy established by a local educational 
     agency,
       ``(B) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located,
       ``(C) the issuer--
       ``(i) designates such bond for purposes of this section,
       ``(ii) certifies that it has written assurances that the 
     private business contribution requirement of paragraph (2) 
     will be met with respect to such academy, and
       ``(iii) certifies that it has the written approval of the 
     local educational agency for such bond issuance, and
       ``(D) the term of each bond which is part of such issue 
     does not exceed 15 years.

     Rules similar to the rules of section 1400G(g) shall apply 
     for purposes of paragraph (1).
       ``(2) Private business contribution requirement.--
       ``(A) In general.--For purposes of paragraph (1), the 
     private business contribution requirement of this paragraph 
     is met with respect to any issue if the local educational 
     agency that established the qualified zone academy has 
     written commitments from private entities to make qualified 
     contributions having a present value (as of the date of 
     issuance of the issue) of not less than 10 percent of the 
     proceeds of the issue.
       ``(B) Qualified contributions.--For purposes of 
     subparagraph (A), the term `qualified contribution' means any 
     contribution (of a type and quality acceptable to the local 
     educational agency) of--
       ``(i) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(ii) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(iii) services of employees as volunteer mentors,
       ``(iv) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(v) any other property or service specified by the local 
     educational agency.
       ``(3) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of a local educational agency to provide 
     education or training below the postsecondary level if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the local 
     educational agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the local educational 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(4) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) constructing, rehabilitating, or repairing the public 
     school facility in which the academy is established,
       ``(B) acquiring the land on which such facility is to be 
     constructed with part of the proceeds of such issue,
       ``(C) providing equipment for use at such academy,
       ``(D) developing course materials for education to be 
     provided at such academy, and
       ``(E) training teachers and other school personnel in such 
     academy.
       ``(b) Limitations on Amount of Bonds Designated.--
       ``(1) In general.--There is a national zone academy bond 
     limitation for each calendar year. Such limitation is--
       ``(A) $400,000,000 for 1998,
       ``(B) $400,000,000 for 1999,
       ``(C) $1,000,000,000 for 2000,
       ``(D) $1,400,000,000 for 2001, and
       ``(E) except as provided in paragraph (3), zero after 2001.
       ``(2) Allocation of limitation.--
       ``(A) Allocation among states.--
       ``(i) 1998 and 1999 limitations.--The national zone academy 
     bond limitations for calendar years 1998 and 1999 shall be 
     allocated by the Secretary among the States on the basis of 
     their respective populations of individuals below the poverty 
     line (as defined by the Office of Management and Budget).

[[Page 17237]]

       ``(ii) Limitation after 1999.--The national zone academy 
     bond limitation for any calendar year after 1999 shall be 
     allocated by the Secretary among the States in the manner 
     prescribed by section 1400G(d); except that in making the 
     allocation under this clause, the Secretary shall take into 
     account--

       ``(I) Basic Grants attributable to large local educational 
     agencies (as defined in section 1400G(e)).
       ``(II) the national zone academy bond limitation.

       ``(B) Allocation to local educational agencies.--The 
     limitation amount allocated to a State under subparagraph (A) 
     shall be allocated by the State education agency to qualified 
     zone academies within such State.
       ``(C) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     subparagraph (B) for such calendar year.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the limitation amount under this subsection for any 
     State, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (a) (or the corresponding 
     provisions of prior law) with respect to qualified zone 
     academies within such State,

     the limitation amount under this subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess.

     ``SEC. 1400I. CORPORATE CONTRIBUTIONS TO SPECIALIZED TRAINING 
                   CENTERS.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a corporation, the specialized training center credit 
     determined under this section is an amount equal to 50 
     percent of the amount of the designated qualified 
     contributions made by the taxpayer during the taxable year to 
     a specialized training center.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Specialized training center.--The term `specialized 
     training center' means any qualified zone academy (as defined 
     in section 1400H(a)(3))--
       ``(A) which is located in an empowerment zone or enterprise 
     community, or
       ``(B) which is located in proximity to such a zone or 
     community and a significant number of the students attending 
     such academy have their principal place of abode in such zone 
     or community.
       ``(2) Designated qualified contributions.--The term 
     `designated qualified contribution' means any contribution--
       ``(A) which is made pursuant to an agreement under which 
     the taxpayer participates in the design of the academic 
     program of the specialized training center, and
       ``(B) which is designated under subsection (c).
       ``(c) Designation of Contributions.--
       ``(1) Limitation on amount designated.--The maximum amount 
     of contributions made which may be designated under this 
     subsection with respect to all specialized training centers 
     located an empowerment zone or enterprise community shall not 
     exceed--
       ``(A) $8,000,000 in the case of an empowerment zone, and
       ``(B) $2,000,000 in the case of an enterprise community.
       ``(2) Designations.--Designations under this subsection 
     shall be made (in consultation with the local educational 
     agency) by the local government agency responsible for 
     implementing the strategic plan described in section 
     1391(f)(2) for the empowerment zone or enterprise community.
       ``(d) Value of Contributions.--The amount of any designated 
     qualified contribution which may be taken into account under 
     this section shall be--
       ``(1) the amount of such contribution which would be 
     allowed as a deduction under section 170 without regard to 
     section 280C(d), or
       ``(2) in the case of a contribution of services performed 
     on the premises of a specialized training center by an 
     employee of the taxpayer, the amount of wages (as defined in 
     section 3306(b) but without regard to any dollar limitation 
     contained in such section) paid by the taxpayer for such 
     services.''
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(8) Reporting of credit on qualified public school 
     modernization bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 1400F(f) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 
     1400F(d)(2)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''
       (c) Conforming Amendments Related to Credit for Corporate 
     Contributions to Specialized Training Centers.--
       (1) Denial of double benefit.--Section 280C is amended by 
     adding at the end the following new subsection:
       ``(d) Credit for Corporate Contributions to Specialized 
     Training Centers.--No deduction shall be allowed for that 
     portion of the designated qualified contributions (as defined 
     in section 1400I(b)) made during the taxable year which is 
     equal to the credit determined for the taxable year under 
     section 1400I(a). Paragraph (3) of subsection (b) shall apply 
     for purposes of this subsection.''
       (2) Credit to be part of general business credit.--
       (A) Section 38(b) is amended--
       (i) by striking ``plus'' at the end of paragraph (11),
       (ii) by striking the period at the end of paragraph (12) 
     and inserting ``, plus'', and
       (iii) by adding at the end the following new paragraph:
       ``(13) in the case of a corporation, the specialized 
     training center credit determined under section 1400I(a).''
       (B) Subsection (d) of section 39 (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following new paragraph:
       ``(9) No carryback of section 1400i credit before january 
     1, 2000.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit determined 
     under section 1400I may be carried back to a taxable year 
     beginning before January 1, 2000.''.
       (d) Other Conforming Amendments.--
       (1) Subchapter U of chapter 1 is amended by striking part 
     IV, by redesignating part V as part IV, and by redesignating 
     section 1397F as section 1397E.
       (2) The table of subchapters for chapter 1 is amended by 
     adding at the end the following new item:

``Subchapter X. Public school modernization provisions.''

       (3) The table of parts of subchapter U of chapter 1 is 
     amended by striking the last 2 items and inserting the 
     following item:

``Part IV. Regulations.''

       (e) Application of Certain Labor Standards on Construction 
     Projects Financed Under Public School Modernization 
     Program.--Section 439 of the General Education Provisions Act 
     (relating to labor standards) is amended--
       (1) by inserting ``(a)'' before ``All laborers and 
     mechanics'', and
       (2) by adding at the end the following:
       ``(b)(1) For purposes of this section, the term `applicable 
     program' also includes the qualified zone academy bond 
     provisions enacted by section 226 of the Taxpayer Relief Act 
     of 1997 and the program established by section 2 of the 
     Public School Modernization Act of 1999.
       ``(2) A State or local government participating in a 
     program described in paragraph (1) shall--
       ``(A) in the awarding of contracts, give priority to 
     contractors with substantial numbers of employees residing in 
     the local education area to be served by the school being 
     constructed; and
       ``(B) include in the construction contract for such school 
     a requirement that the contractor give priority in hiring new 
     workers to individuals residing in such local education area.
       ``(3) In the case of a program described in paragraph (1), 
     nothing in this subsection or subsection (a) shall be 
     construed to deny any tax credit allowed under such program. 
     If amounts are required to be withheld from contractors to 
     pay wages to which workers are entitled, such amounts shall 
     be treated as expended for construction purposes in 
     determining whether the requirements of such program are 
     met.''.
       (f) Employment and Training Activities Relating to 
     Construction or Reconstruction of Public School Facilities.--
       (1) In general.--Section 134 of the Workforce Investment 
     Act of 1998 (29 U.S.C. 2864) is amended by adding at the end 
     the following:
       ``(f) Local Employment and Training Activities Relating to 
     Construction or Reconstruction of Public School Facilities.--
       ``(1) In general.--In order to provide training services 
     related to construction or reconstruction of public school 
     facilities receiving funding assistance under an applicable 
     program, each State shall establish a specialized program of 
     training meeting the following requirements:
       ``(A) The specialized program provides training for jobs in 
     the construction industry.
       ``(B) The program is designed to provide trained workers 
     for projects for the construction or reconstruction of public 
     school facilities receiving funding assistance under an 
     applicable program.
       ``(C) The program is designed to ensure that skilled 
     workers (residing in the area to be served by the school 
     facilities) will be available for the construction or 
     reconstruction work.
       ``(2) Coordination.--The specialized program established 
     under paragraph (1) shall

[[Page 17238]]

     be integrated with other activities under this Act, with the 
     activities carried out under the National Apprenticeship Act 
     of 1937 by the State Apprenticeship Council or through the 
     Bureau of Apprenticeship and Training in the Department of 
     Labor, as appropriate, and with activities carried out under 
     the Carl D. Perkins Vocational and Technical Education Act of 
     1998. Nothing in this subsection shall be construed to 
     require services duplicative of those referred to in the 
     preceding sentence.
       ``(3) Applicable program.--In this subsection, the term 
     `applicable program' has the meaning given the term in 
     section 439(b) of the General Education Provisions Act 
     (relating to labor standards).''.
       (2) State plan.--Section 112(b)(17)(A) of the Workforce 
     Investment Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is 
     amended--
       (A) in clause (iii), by striking ``and'' at the end;
       (B) by redesignating clause (iv) as clause (v); and
       (C) by inserting after clause (iii) the following:
       ``(iv) how the State will establish and carry out a 
     specialized program of training under section 134(f); and''.
       (g) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to obligations issued after December 31, 1999.
       (2) Credit for corporate contributions to specialized 
     training centers.--Section 1400I of the Internal Revenue Code 
     of 1986 (as added by this section) shall apply to taxable 
     years beginning after December 31, 1999.
       (3) Repeal of restriction on zone academy bond holders.--In 
     the case of bonds to which section 1397E of the Internal 
     Revenue Code of 1986 (as in effect before the date of the 
     enactment of this Act) applies, the limitation of such 
     section to eligible taxpayers (as defined in subsection 
     (d)(6) of such section) shall not apply after the date of the 
     enactment of this Act.
       (4) Application of labor standards; training program.--The 
     amendments made by subsections (e) and (f) shall take effect 
     on the date of the enactment of this Act.

     SEC. 202. EXTENSION OF EXCLUSION FOR EMPLOYER-PROVIDED 
                   EDUCATIONAL ASSISTANCE; EXCLUSION TO APPLY TO 
                   ASSISTANCE FOR GRADUATE EDUCATION.

       (a) Permanent Extension.--Subsection (d) of section 127 is 
     hereby repealed.
       (b) Exclusion To Apply to Graduate Students.--The last 
     sentence of section 127(c)(1) is amended by striking 
     ``hobbies'' and all that follows and inserting ``hobbies.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to courses beginning after May 31, 2000.

        TITLE III--INCENTIVES FOR HEALTH CARE AND LONG-TERM CARE

     SEC. 301. LONG-TERM CARE TAX CREDIT.

       (a) Allowance of Credit.--
       (1) In general.--Section 24(a) (relating to allowance of 
     child tax credit) is amended to read as follows:
       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) $500 multiplied by the number of qualifying children 
     of the taxpayer, plus
       ``(2) $1,000 multiplied by the number of applicable 
     individuals with respect to whom the taxpayer is an eligible 
     caregiver for the taxable year.''
       (2) Additional credit for taxpayer with 3 or more separate 
     credit amounts.--So much of section 24(d) as precedes 
     paragraph (1)(A) thereof is amended to read as follows:
       ``(d) Additional Credit for Taxpayers With 3 or More 
     Separate Credit Amounts.--
       ``(1) In general.--If the sum of the number of qualifying 
     children of the taxpayer and the number of applicable 
     individuals with respect to which the taxpayer is an eligible 
     caregiver is 3 or more for any taxable year, the aggregate 
     credits allowed under subpart C shall be increased by the 
     lesser of--''.
       (3) Conforming amendments.--
       (A) The heading for section 32(n) is amended by striking 
     ``Child'' and inserting ``Family Care''.
       (B) The heading for section 24 is amended to read as 
     follows:

     ``SEC. 24. FAMILY CARE CREDIT.''

       (C) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 24 and inserting the following new item:

``Sec. 24. Family care credit.''.

       (b) Definitions.--Section 24(c) (defining qualifying child) 
     is amended to read as follows:
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualifying child.--
       ``(A) In general.--The term `qualifying child' means any 
     individual if--
       ``(i) the taxpayer is allowed a deduction under section 151 
     with respect to such individual for the taxable year,
       ``(ii) such individual has not attained the age of 17 as of 
     the close of the calendar year in which the taxable year of 
     the taxpayer begins, and
       ``(iii) such individual bears a relationship to the 
     taxpayer described in section 32(c)(3)(B).
       ``(B) Exception for certain noncitizens.--The term 
     `qualifying child' shall not include any individual who would 
     not be a dependent if the first sentence of section 152(b)(3) 
     were applied without regard to all that follows `resident of 
     the United States'.
       ``(2) Applicable individual.--
       ``(A) In general.--The term `applicable individual' means, 
     with respect to any taxable year, any individual who has been 
     certified, before the due date for filing the return of tax 
     for the taxable year (without extensions), by a physician (as 
     defined in section 1861(r)(1) of the Social Security Act) as 
     being an individual with long-term care needs described in 
     subparagraph (B) for a period--
       ``(i) which is at least 180 consecutive days, and
       ``(ii) a portion of which occurs within the taxable year.

     Such term shall not include any individual otherwise meeting 
     the requirements of the preceding sentence unless within the 
     39\1/2\ month period ending on such due date (or such other 
     period as the Secretary prescribes) a physician (as so 
     defined) has certified that such individual meets such 
     requirements.
       ``(B) Individuals with long-term care needs.--An individual 
     is described in this subparagraph if the individual meets any 
     of the following requirements:
       ``(i) The individual is at least 6 years of age and--

       ``(I) is unable to perform (without substantial assistance 
     from another individual) at least 3 activities of daily 
     living (as defined in section 7702B(c)(2)(B)) due to a loss 
     of functional capacity, or
       ``(II) requires substantial supervision to protect such 
     individual from threats to health and safety due to severe 
     cognitive impairment and is unable to perform at least 1 
     activity of daily living (as so defined) or to the extent 
     provided in regulations prescribed by the Secretary (in 
     consultation with the Secretary of Health and Human 
     Services), is unable to engage in age appropriate activities.

       ``(ii) The individual is at least 2 but not 6 years of age 
     and is unable due to a loss of functional capacity to perform 
     (without substantial assistance from another individual) at 
     least 2 of the following activities: eating, transferring, or 
     mobility.
       ``(iii) The individual is under 2 years of age and requires 
     specific durable medical equipment by reason of a severe 
     health condition or requires a skilled practitioner trained 
     to address the individual's condition to be available if the 
     individual's parents or guardians are absent.
       ``(3) Eligible caregiver.--
       ``(A) In general.--A taxpayer shall be treated as an 
     eligible caregiver for any taxable year with respect to the 
     following individuals:
       ``(i) The taxpayer.
       ``(ii) The taxpayer's spouse.
       ``(iii) An individual with respect to whom the taxpayer is 
     allowed a deduction under section 151 for the taxable year.
       ``(iv) An individual who would be described in clause (iii) 
     for the taxable year if section 151(c)(1)(A) were applied by 
     substituting for the exemption amount an amount equal to the 
     sum of the exemption amount the standard deduction under 
     section 63(c)(2)(C), and any additional standard deduction 
     under section 63(c)(3) which would be applicable to the 
     individual if clause (iii) applied.
       ``(v) An individual who would be described in clause (iii) 
     for the taxable year if--

       ``(I) the requirements of clause (iv) are met with respect 
     to the individual, and
       ``(II) the requirements of subparagraph (B) are met with 
     respect to the individual in lieu of the support test of 
     section 152(a).

       ``(B) Residency test.--The requirements of this 
     subparagraph are met if an individual has as his principal 
     place of abode the home of the taxpayer and--
       ``(i) in the case of an individual who is an ancestor or 
     descendant of the taxpayer or the taxpayer's spouse, is a 
     member of the taxpayer's household for over half the taxable 
     year, or
       ``(ii) in the case of any other individual, is a member of 
     the taxpayer's household for the entire taxable year.
       ``(C) Special rules where more than 1 eligible caregiver.--
       ``(i) In general.--If more than 1 individual is an eligible 
     caregiver with respect to the same applicable individual for 
     taxable years ending with or within the same calendar year, a 
     taxpayer shall be treated as the eligible caregiver if each 
     such individual (other than the taxpayer) files a written 
     declaration (in such form and manner as the Secretary may 
     prescribe) that such individual will not claim such 
     applicable individual for the credit under this section.
       ``(ii) No agreement.--If each individual required under 
     clause (i) to file a written declaration under clause (i) 
     does not do so, the individual with the highest modified 
     adjusted gross income (as defined in section 32(c)(5)) shall 
     be treated as the eligible caregiver.
       ``(iii) Married individuals filing separately.--In the case 
     of married individuals filing separately, the determination 
     under this subparagraph as to whether the husband or wife is 
     the eligible caregiver shall be made

[[Page 17239]]

     under the rules of clause (ii) (whether or not one of them 
     has filed a written declaration under clause (i)).''.
       (c) Identification Requirements.--
       (1) In general.--Section 24(e) is amended by adding at the 
     end the following new sentence: ``No credit shall be allowed 
     under this section to a taxpayer with respect to any 
     applicable individual unless the taxpayer includes the name 
     and taxpayer identification number of such individual, and 
     the identification number of the physician certifying such 
     individual, on the return of tax for the taxable year.''.
       (2) Assessment.--Section 6213(g)(2)(I) is amended--
       (A) by inserting ``or physician identification'' after 
     ``correct TIN'', and
       (B) by striking ``child'' and inserting ``family care''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 302. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS 
                   OF SELF-EMPLOYED INDIVIDUALS.

       (a) In General.--Paragraph (1) of section 162(l) is amended 
     to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to 100 percent of the amount paid during the 
     taxable year for insurance which constitutes medical care for 
     the taxpayer, his spouse, and dependents.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
      TITLE IV--PERMANENT EXTENSION OF CERTAIN EXPIRING PROVISIONS

     SEC. 401. RESEARCH CREDIT.

       (a) Permanent Extension.--
       (1) In general.--Section 41 is amended by striking 
     subsection (h).
       (2) Conforming amendment.--Paragraph (1) of section 45C(b) 
     is amended by striking subparagraph (D).
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after June 30, 1999.
       (b) Increase in Percentages Under Alternative Incremental 
     Credit.--
       (1) In general.--Subparagraph (A) of section 41(c)(4) is 
     amended--
       (A) by striking ``1.65 percent'' and inserting ``2.65 
     percent'',
       (B) by striking ``2.2 percent'' and inserting ``3.2 
     percent'', and
       (C) by striking ``2.75 percent'' and inserting ``3.75 
     percent''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after June 30, 1999.

     SEC. 402. WORK OPPORTUNITY AND WELFARE-TO-WORK CREDITS.

       (a) Work Opportunity Credit.--Subsection (c) of section 51 
     is amended by striking paragraph (4).
       (b) Welfare-to-Work Credit.--Section 51A is amended by 
     striking subsection (f).
       (c) Effective Date.--The amendments made by this section 
     shall apply to individuals who begin work for the employer 
     after June 30, 1999.

     SEC. 403. SUBPART F EXEMPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Section 953(e) is amended by 
     striking paragraph (10) and by redesignating paragraph (11) 
     as paragraph (10).
       (b) Foreign Personal Holding Company Income.--Section 
     954(h) is amended by striking paragraph (9).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 404. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       Section 198 is amended by striking subsection (h).
               TITLE V--COMMUNITY DEVELOPMENT INITIATIVES

     SEC. 501. INCREASE IN STATE CEILING ON LOW-INCOME HOUSING 
                   CREDIT.

       (a) In General.--Clause (i) of section 42(h)(3)(C) is 
     amended by striking ``$1.25'' and inserting ``$1.75''.
       (b) Adjustment of State Ceiling for Increases in Cost-of-
     Living.--Paragraph (3) of section 42(h) (relating to housing 
     credit dollar amount for agencies) is amended by adding at 
     the end the following new subparagraph:
       ``(H) Cost-of-living adjustment.--
       ``(i) In general.--In the case of a calendar year after 
     2000, the dollar amount contained in subparagraph (C)(i) 
     shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 1999' for `calendar year 1992' in subparagraph 
     (B) thereof.

       ``(ii) Rounding.--If any increase under clause (i) is not a 
     multiple of 5 cents, such increase shall be rounded to the 
     next lowest multiple of 5 cents.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to calendar years after 1999.

     SEC. 502. NEW MARKETS TAX CREDIT.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business-related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45D. NEW MARKETS TAX CREDIT.

       ``(a) Allowance of Credit.--
       ``(1) In general.--For purposes of section 38, in the case 
     of a taxpayer who holds a qualified equity investment on a 
     credit allowance date of such investment which occurs during 
     the taxable year, the new markets tax credit determined under 
     this section for such taxable year is an amount equal to 6 
     percent of the amount paid to the qualified community 
     development entity for such investment at its original issue.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means, with respect to any qualified equity 
     investment--
       ``(A) the date on which such investment is initially made, 
     and
       ``(B) each of the 4 anniversary dates of such date 
     thereafter.
       ``(b) Qualified Equity Investment.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified equity investment' 
     means any equity investment in a qualified community 
     development entity if--
       ``(A) such investment is acquired by the taxpayer at its 
     original issue (directly or through an underwriter) solely in 
     exchange for cash,
       ``(B) substantially all of such cash is used by the 
     qualified community development entity to make qualified low-
     income community investments, and
       ``(C) such investment is designated for purposes of this 
     section by the qualified community development entity.

     Such term shall not include any equity investment issued by a 
     qualified community development entity more than 5 years 
     after the date that such entity receives an allocation under 
     subsection (f). Any allocation not used within such 5-year 
     period may be reallocated by the Secretary under subsection 
     (f).
       ``(2) Limitation.--The maximum amount of equity investments 
     issued by a qualified community development entity which may 
     be designated under paragraph (1)(C) by such entity shall not 
     exceed the portion of the limitation amount allocated under 
     subsection (f) to such entity.
       ``(3) Safe harbor for determining use of cash.--The 
     requirement of paragraph (1)(B) shall be treated as met if at 
     least 85 percent of the aggregate gross assets of the 
     qualified community development entity are invested in 
     qualified low-income community investments.
       ``(4) Treatment of subsequent purchasers.--The term 
     `qualified equity investment' includes any equity investment 
     which would (but for paragraph (1)(A)) be a qualified equity 
     investment in the hands of the taxpayer if such investment 
     was a qualified equity investment in the hands of a prior 
     holder.
       ``(5) Redemptions.--A rule similar to the rule of section 
     1202(c)(3) shall apply for purposes of this subsection.
       ``(6) Equity investment.--The term `equity investment' 
     means--
       ``(A) any stock in a qualified community development entity 
     which is a corporation, and
       ``(B) any capital interest in a qualified community 
     development entity which is a partnership.
       ``(c) Qualified Community Development Entity.--For purposes 
     of this section--
       ``(1) In general.--The term `qualified community 
     development entity' means any domestic corporation or 
     partnership if--
       ``(A) the primary mission of the entity is serving, or 
     providing investment capital for, low-income communities or 
     low-income persons,
       ``(B) the entity maintains accountability to residents of 
     low-income communities through representation on governing or 
     advisory boards or otherwise, and
       ``(C) the entity is certified by the Secretary for purposes 
     of this section as being a qualified community development 
     entity.
       ``(2) Special rules for certain organizations.--The 
     requirements of paragraph (1) shall be treated as met by--
       ``(A) any specialized small business investment company (as 
     defined in section 1044(c)(3)), and
       ``(B) any community development financial institution (as 
     defined in section 103 of the Community Development Banking 
     and Financial Institutions Act of 1994 (12 U.S.C. 4702)).
       ``(d) Qualified Low-Income Community Investments.--For 
     purposes of this section--
       ``(1) In general.--The term `qualified low-income community 
     investment' means--
       ``(A) any equity investment in, or loan to, any qualified 
     active low-income community business,
       ``(B) the purchase from another community development 
     entity of any loan made by such entity which is a qualified 
     low-income community investment if the amount received by 
     such other entity from such purchase is used by such other 
     entity to make qualified low-income community investments,
       ``(C) financial counseling and other services specified in 
     regulations prescribed by the Secretary to businesses located 
     in, and residents of, low-income communities, and
       ``(D) any equity investment in, or loan to, any qualified 
     community development entity if substantially all of the 
     investment or

[[Page 17240]]

     loan is used by such entity to make qualified low-income 
     community investments described in subparagraphs (A), (B), 
     and (C).
       ``(2) Qualified active low-income community business.--
       ``(A) In general.--For purposes of paragraph (1), the term 
     `qualified active low-income community business' means, with 
     respect to any taxable year, any corporation or partnership 
     if for such year--
       ``(i) at least 50 percent of the total gross income of such 
     entity is derived from the active conduct of a qualified 
     business within any low-income community,
       ``(ii) a substantial portion of the use of the tangible 
     property of such entity (whether owned or leased) is within 
     any low-income community,
       ``(iii) a substantial portion of the services performed for 
     such entity by its employees are performed in any low-income 
     community,
       ``(iv) less than 5 percent of the average of the aggregate 
     unadjusted bases of the property of such entity is 
     attributable to collectibles (as defined in section 
     408(m)(2)) other than collectibles that are held primarily 
     for sale to customers in the ordinary course of such 
     business, and
       ``(v) less than 5 percent of the average of the aggregate 
     unadjusted bases of the property of such entity is 
     attributable to nonqualified financial property (as defined 
     in section 1397B(e)).
       ``(B) Proprietorship.--Such term shall include any business 
     carried on by an individual as a proprietor if such business 
     would meet the requirements of subparagraph (A) were it 
     incorporated.
       ``(C) Portions of business may be qualified active low-
     income community business.--The term `qualified active low-
     income community business' includes any trades or businesses 
     which would qualify as a qualified active low-income 
     community business if such trades or businesses were 
     separately incorporated.
       ``(3) Qualified business.--For purposes of this subsection, 
     the term `qualified business' has the meaning given to such 
     term by section 1397B(d); except that--
       ``(A) in lieu of applying paragraph (2)(B) thereof, the 
     rental to others of real property located in any low-income 
     community shall be treated as a qualified business if there 
     are substantial improvements located on such property,
       ``(B) paragraph (3) thereof shall not apply, and
       ``(C) such term shall not include any business if a 
     significant portion of the equity interests in such business 
     are held by any person who holds a significant portion of the 
     equity investments in the community development entity.
       ``(e) Low-Income Community.--For purposes of this section--
       ``(1) In general.--The term `low-income community' means 
     any population census tract if--
       ``(A) the poverty rate for such tract is at least 20 
     percent, or
       ``(B)(i) in the case of a tract not located within a 
     metropolitan area, the median family income for such tract 
     does not exceed 80 percent of statewide median family income, 
     or
       ``(ii) in the case of a tract located within a metropolitan 
     area, the median family income for such tract does not exceed 
     80 percent of the greater of statewide median family income 
     or the metropolitan area median family income.
       ``(2) Areas not within census tracts.--In the case of an 
     area which is not tracted for population census tracts, the 
     equivalent county divisions (as defined by the Bureau of the 
     Census for purposes of defining poverty areas) shall be used 
     for purposes of determining poverty rates and median family 
     income.
       ``(f) National Limitation on Amount of Investments 
     Designated.--
       ``(1) In general.--There is a new markets tax credit 
     limitation of $1,200,000,000 for each of calendar years 2000 
     through 2004.
       ``(2) Allocation of limitation.--The limitation under 
     paragraph (1) shall be allocated by the Secretary among 
     qualified community development entities selected by the 
     Secretary. In making allocations under the preceding 
     sentence, the Secretary shall give priority to entities with 
     records of having successfully provided capital or technical 
     assistance to disadvantaged businesses or communities.
       ``(3) Carryover of unused limitation.--If the new markets 
     tax credit limitation for any calendar year exceeds the 
     aggregate amount allocated under paragraph (2) for such year, 
     such limitation for the succeeding calendar year shall be 
     increased by the amount of such excess.
       ``(g) Recapture of Credit In Certain Cases.--
       ``(1) In general.--If, at any time during the 5-year period 
     beginning on the date of the original issue of a qualified 
     equity investment in a qualified community development 
     entity, there is a recapture event with respect to such 
     investment, then the tax imposed by this chapter for the 
     taxable year in which such event occurs shall be increased by 
     the credit recapture amount.
       ``(2) Credit recapture amount.--For purposes of paragraph 
     (1), the credit recapture amount is an amount equal to the 
     sum of--
       ``(A) the aggregate decrease in the credits allowed to the 
     taxpayer under section 38 for all prior taxable years which 
     would have resulted if no credit had been determined under 
     this section with respect to such investment, plus
       ``(B) interest at the overpayment rate established under 
     section 6611 on the amount determined under subparagraph (A) 
     for each prior taxable year for the period beginning on the 
     due date for filing the return for the prior taxable year 
     involved.

     No deduction shall be allowed under this chapter for interest 
     described in subparagraph (B).
       ``(3) Recapture event.--For purposes of paragraph (1), 
     there is a recapture event with respect to an equity 
     investment in a qualified community development entity if--
       ``(A) such entity ceases to be a qualified community 
     development entity,
       ``(B) the proceeds of the investment cease to be used as 
     required of subsection (b)(1)(B), or
       ``(C) such investment is redeemed by such entity.
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under this chapter or for purposes of section 55.
       ``(h) Basis Reduction.--The basis of any qualified equity 
     investment shall be reduced by the amount of any credit 
     determined under this section with respect to such 
     investment.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out this section, 
     including regulations--
       ``(1) which limit the credit for investments which are 
     directly or indirectly subsidized by other Federal benefits 
     (including the credit under section 42 and the exclusion from 
     gross income under section 103),
       ``(2) which prevent the abuse of the provisions of this 
     section through the use of related parties,
       ``(3) which impose appropriate reporting requirements,
       ``(4) which apply the provisions of this section to newly 
     formed entities.''
       (b) Credit Made Part of General Business Credit.--
       (1) In general.--Subsection (b) of section 38 is amended by 
     striking ``plus'' at the end of paragraph (12), by striking 
     the period at the end of paragraph (13) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(14) the new markets tax credit determined under section 
     45D(a).''
       (2) Limitation on carryback.--Subsection (d) of section 39 
     is amended by adding at the end the following new paragraph:
       ``(10) No carryback of new markets tax credit before 
     january 1, 2000.--No portion of the unused business credit 
     for any taxable year which is attributable to the credit 
     under section 45D may be carried back to a taxable year 
     ending before January 1, 2000.''
       (c) Deduction for Unused Credit.--Subsection (c) of section 
     196 is amended by striking ``and'' at the end of paragraph 
     (7), by striking the period at the end of paragraph (8) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(9) the new markets tax credit determined under section 
     45D(a).''
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following new item:

``Sec. 45D. New markets tax credit.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to investments made after December 31, 1999.

     SEC. 503. CREDIT TO HOLDERS OF BETTER AMERICA BONDS.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

     ``SEC. 30B. CREDIT TO HOLDERS OF BETTER AMERICA BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a Better America Bond on a credit allowance date of 
     such bond which occurs during the taxable year, there shall 
     be allowed as a credit against the tax imposed by this 
     chapter for such taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a Better America Bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any Better America Bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.

[[Page 17241]]

       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of issuance of the issue) on outstanding 
     long-term corporate debt obligations (determined under 
     regulations prescribed by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Better America Bond.--For purposes of this section--
       ``(1) In general.--The term `Better America Bond' means any 
     bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for any qualified purpose,
       ``(B) the bond is issued by a State or local government 
     within the jurisdiction of which the qualified purpose of the 
     issue is to be carried out,
       ``(C) the issuer designates such bond for purposes of this 
     section,
       ``(D) the term of each bond which is part of such issue 
     does not exceed 15 years,
       ``(E) the requirements of section 147(f) are met with 
     respect to such issue, and
       ``(F) except in the case of the proceeds of such issue 
     which are to be used for the qualified purpose described in 
     paragraph (2)(A)(iv), the payment of the principal of such 
     issue is secured by taxes of general applicability imposed by 
     a general purpose governmental unit.
       ``(2) Qualified purpose.--
       ``(A) In general.--The term `qualified purpose' means any 
     of the following:
       ``(i) The acquisition of land for use as open space, 
     wetlands, public parks, or greenways, and the provision of 
     visitor facilities (such as campgrounds and hiking or biking 
     trails) for land so used, but only if--

       ``(I) such land and facilities are to be owned by the 
     issuer or a qualified owner, and
       ``(II) the initial owner of such land and facilities 
     records pursuant to State law a qualified restrictive 
     covenant with respect to such land and facilities.

       ``(ii) The remediation of land acquired under clause (i) 
     (or other publicly owned land) to enhance water quality by--

       ``(I) restoring hydrology or planting trees or other 
     vegetation,
       ``(II) undertaking reasonable measures to control erosion,
       ``(III) restoring wetlands, or
       ``(IV) remediating conditions caused by the prior disposal 
     of toxic or other waste.

       ``(iii) The acquisition by the issuer or any qualified 
     owner of any restriction on privately owned open land which 
     prevents commercial development and any substantial change in 
     the use or character of the land if such restriction would, 
     if contributed by the owner of the open land to a qualified 
     organization (as defined in section 170(h)(3)), be a 
     qualified conservation contribution (as defined in section 
     170(h)).
       ``(iv) The environmental assessment and remediation of real 
     property owned by any State or local government if--

       ``(I) such property was acquired by such government as a 
     result of being abandoned by the prior owner, and
       ``(II) such property is located in an area at or on which 
     there has been a release (or threat of release) or disposal 
     of any hazardous substance (as defined in section 198).

       ``(B) Remediation of national priorities listed sites not 
     qualified purpose.--Subparagraph (A)(ii) shall not apply to 
     remediation of any site which is on, or proposed for, the 
     national priorities list under section 105(a)(8)(B) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980.
       ``(C) Qualified owner.--For purposes of this paragraph, the 
     term `qualified owner' means any organization described in 
     section 501(c)(3) whose exempt purpose includes environmental 
     protection.
       ``(D) Qualified restrictive covenant.--For purposes of 
     subparagraph (A)(i)(II), the term `qualified restrictive 
     covenant' means, with respect to land or facilities, any 
     covenant which prohibits the person who owns such land or 
     facilities at the end of the term of the bond from selling or 
     otherwise permitting a use of such land or facilities which 
     is not described in subparagraph (A) unless--
       ``(i) a reasonable period is allowed for a qualified owner 
     to purchase such land or facilities,
       ``(ii) the purchase price is not greater than the price 
     originally paid in conjunction with the expenditure of bond 
     proceeds, and
       ``(iii) the purchaser records pursuant to State law a 
     covenant with respect to the purchased land and facilities 
     which protects in perpetuity the use of such land and 
     facilities for a use described in subparagraph (A).
       ``(3) Public availability requirement, etc.--
       ``(A) In general.--The term `Better America Bond' shall not 
     include any bond which is part of an issue if--
       ``(i) any portion of the proceeds of the issue are to be 
     used for any private business use (as defined in section 
     141(b)(6)), or
       ``(ii) the payment of the principal of, or the interest on, 
     any portion of such proceeds is (under the terms of such 
     issue or any underlying arrangement) directly or indirectly 
     secured or to be derived as described in subparagraph (A) or 
     (B) of section 141(b)(2).
       ``(B) Exception.--Subparagraph (A) shall not apply to 
     proceeds used for a qualified purpose described in paragraph 
     (2)(A)(iv).
       ``(d) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds issued during any calendar year which may be designated 
     under subsection (c)(1) by any issuer shall not exceed the 
     limitation amount allocated under paragraph (3) for such 
     calendar year to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national Better America Bond limitation for each 
     calendar year. Such limitation is--
       ``(A) $1,900,000,000 for each of calendar years 2000, 2001, 
     2002, 2003, and 2004, and
       ``(B) except as provided in paragraph (4), zero after 2004.
       ``(3) Allocation of limitation among states and local 
     governments.--
       ``(A) In general.--The national Better America Bond 
     limitation for any calendar year shall be allocated by the 
     EPA Administrator to States and local governments having 
     approved applications. As part of the competitive application 
     process, the Environmental Protection Agency should, when 
     possible, allocate such limitation on a per capita basis.
       ``(B) Approved application.--For purposes of subparagraph 
     (A), the term `approved application' means an application 
     which is approved by the EPA Administrator and includes such 
     information as the EPA Administrator shall specify.
       ``(4) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the amount allocated under paragraph (4) to any State 
     or local government, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (c)(1) pursuant to such 
     allocation,
     the limitation amount under paragraph (3) for such State or 
     local government for the following calendar year shall be 
     increased by the amount of such excess.
       ``(e) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(f) Other Definitions.--For purposes of this section--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.''.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia, any possession of the United States, and any Indian 
     tribal government (within the meaning of section 7871).
       ``(4) Local government.--The term `local government' 
     means--
       ``(A) any county, city, town, township, parish, village, or 
     other general purpose political subdivision of a State, and
       ``(B) any combination of political subdivisions described 
     in subparagraph (A) recognized by the EPA Administrator.
       ``(5) EPA administrator.--The term `EPA Administrator' 
     means the Administrator of the Environmental Protection 
     Agency.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (e)) and the amount so included shall be treated as interest 
     income.
       ``(h) Special Rules Relating to Arbitrage.--
       ``(1) In general.--A bond shall not be treated as failing 
     to meet the requirements of subsection (c)(1) solely by 
     reason of the fact that the proceeds of the issue of which 
     such bond is a part are invested for a temporary period (but 
     not more than 36 months) until such proceeds are needed for 
     the purpose for which such issue was issued.
       ``(2) Reasonable expectation and binding commitment 
     requirements.--Paragraph (1) shall apply to an issue only if, 
     as of the date of issuance--
       ``(A) the issuer reasonably expects that--
       ``(i) at least 95 percent of the proceeds of the issue will 
     be spent for a qualified purpose within the 3-year period 
     beginning on such date, and

[[Page 17242]]

       ``(ii) property financed with such proceeds will be used 
     for qualified purposes for at least 15 years after being so 
     financed,
       ``(B) there is a binding commitment with a third party to 
     spend at least 10 percent of the proceeds of the issue for 
     qualified purposes within the 6-month period beginning on 
     such date, and
       ``(C) the issuer reasonably expects that the remaining 
     proceeds of the issue will be spent with due diligence for 
     qualified purposes.
       ``(3) Earnings on proceeds.--Any earnings on proceeds 
     during the temporary period shall be treated as proceeds of 
     the issue for purposes of applying subsection (c)(1) and 
     paragraph (1) of this subsection.
       ``(i) Denial of Deduction for Environmental Remediation 
     Expenditures.--Expenditures financed by any Better America 
     Bond shall not be allowed as a deduction under section 198.
       ``(j) Other Special Rules.--
       ``(1) Bonds held by regulated investment companies.--If any 
     Better America Bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(2) Credits may be stripped.--Under regulations 
     prescribed by the Secretary--
       ``(A) In general.--There may be a separation (including at 
     issuance) of the ownership of a Better America Bond and the 
     entitlement to the credit under this section with respect to 
     such bond. In case of any such separation, the credit under 
     this section shall be allowed to the person who on the credit 
     allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(B) Certain rules to apply.--In the case of a separation 
     described in subparagraph (A), the rules of section 1286 
     shall apply to the Better America Bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.
       ``(3) Treatment for estimated tax purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a Better 
     America Bond on a credit allowance date shall be treated as 
     if it were a payment of estimated tax made by the taxpayer on 
     such date.
       ``(4) Credit may be transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(5) Reporting.--Issuers of Better America Bonds shall 
     submit reports similar to the reports required under section 
     149(e).
       ``(k) Recapture of Portion of Credit Where Cessation of 
     Qualified Use.--
       ``(1) In general.--If any bond which when issued purported 
     to be a Better America Bond ceases to meet the requirements 
     of subsection (c), the issuer shall pay to the United States 
     (at the time required by the Secretary) an amount equal to 
     the aggregate of the credits allowable under this section 
     (determined without regard to subsection (e)) for taxable 
     years ending during the calendar year in which such cessation 
     occurs and the 2 preceding calendar years.
       ``(2) Failure to pay.--If the issuer fails to timely pay 
     the amount required by paragraph (1) with respect to any 
     issue, the tax imposed by this chapter on each holder of any 
     bond which is part of such issue shall be increased (for the 
     taxable year of the holder in which such cessation occurs) by 
     the aggregate decrease in the credits allowed under this 
     section to such holder for taxable years beginning in such 3 
     calendar years which would have resulted solely from denying 
     any credit under this section with respect to such issue for 
     such taxable years.
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (2) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     paragraph (2) shall not be treated as a tax imposed by this 
     chapter for purposes of determining--
       ``(i) the amount of any credit allowable under this part, 
     or
       ``(ii) the amount of the tax imposed by section 55.
       ``(l) Termination.--This section shall not apply to any 
     bond issued after December 31, 2004.''
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(8) Reporting of credit on better america bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 30B(g) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 30B(f)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''
       (c) Conforming Amendment.--The table of sections for 
     subpart B of part IV of subchapter A of chapter 1 is amended 
     by adding at the end the following new item:

``Sec. 30B. Credit to holders of Better America Bonds.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 1999.
       (e) Guidelines for Applications.--Not later than January 1, 
     2000, guidelines specifying the criteria to be used in 
     approving applications under section 30B(d)(3) of the 
     Internal Revenue Code of 1986 (as added by this Act) shall be 
     developed and published by the Administrator of the 
     Environmental Protection Agency in the Federal Register.
                  TITLE VI--SMALL BUSINESS INCENTIVES

     SEC. 601. ACCELERATION OF $1,000,000 ESTATE TAX EXCLUSION.

       (a) Estate Tax Credit.--
       (1) Subsection (a) of section 2010 (relating to unified 
     credit against estate tax) is amended by striking ``the 
     applicable credit amount'' and inserting ``$345,800''.
       (2) Paragraph (2) of section 2001(c) is amended by striking 
     ``$10,000,000'' and all that follows and inserting 
     ``$10,000,000. The amount of the increase under the preceding 
     sentence shall not exceed $705,000.''
       (3)(A) Subparagraph (A) of section 2057(a)(3) is amended by 
     striking `` the applicable exclusion amount under section 
     2010 shall be $625,000'' and inserting ``the credit under 
     section 2010 shall be $202,050''.
       (B) Subparagraph (B) of section 2057(a)(3) is amended to 
     read as follows:
       ``(B) Increase in unified credit if deduction is less than 
     $675,000.--If the deduction allowed by this section is less 
     than $675,000, the amount of the credit under section 2010 
     shall be equal to the lesser of $345,800 or the tentative tax 
     which would be determined under the rate schedule set forth 
     in section 2001(c) if the amount with respect to which such 
     tentative tax is computed were equal to the sum of--
       ``(i) the excess of $675,000 over the amount of the 
     deduction allowed, and
       ``(ii) $625,000.''
       (4) Subparagraph (A) of section 2102(c)(3) is amended by 
     striking ``the applicable credit amount in effect under 
     section 2010(c) for the calendar year which includes the date 
     of death'' and inserting ``$345,800''.
       (5) Paragraph (1) of section 6018(a) is amended by striking 
     ``the applicable exclusion amount in effect under section 
     2010(c) for the calendar year which includes the date of 
     death'' and inserting ``$1,000,000''.
       (6)(A) Subparagraph (A) of section 6601(j)(2) is amended to 
     read as follows:
       ``(A) $345,800, or''.
       (B) Paragraph (3) of section 6601(j) is amended--
       (i) by striking ``$1,000,000'' each place it occurs and 
     inserting ``$345,800'', and
       (ii) by striking ``$10,000'' each place it appears and 
     inserting ``$1,000''.
       (b) Unified Gift Tax Credit.--Paragraph (1) of section 
     2505(a) is amended to read as follows:
       ``(1) $345,800, reduced by''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 1999.

     SEC. 602. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.

       (a) In General.--Paragraph (1) of section 179(b) (relating 
     to dollar limitation) is amended to read as follows:
       ``(1) Dollar limitation.--The aggregate cost which may be 
     taken into account under subsection (a) for any taxable year 
     shall not exceed $30,000.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
                     TITLE VII--PENSION PROVISIONS

     SEC. 701. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

       (a) Compensation Limit.--Paragraph (11) of section 415(b) 
     (relating to limitation for defined benefit plans) is amended 
     to read as follows:
       ``(11) Special limitation rule for governmental and 
     multiemployer plans.--In the case of a governmental plan (as 
     defined in section 414(d)) or a multiemployer plan (as 
     defined in section 414(f)), subparagraph (B) of paragraph (1) 
     shall not apply.''.
       (b) Exemption for Survivor and Disability Benefits.--
     Subparagraph (I) of section 415(b)(2) (relating to limitation 
     for defined benefit plans) is amended--
       (1) by inserting ``or a multiemployer plan (as defined in 
     section 414(f))'' after ``section 414(d))'' in clause (i),
       (2) by inserting ``or multiemployer plan'' after 
     ``governmental plan'' in clause (ii), and
       (3) by inserting ``and multiemployer'' after 
     ``governmental'' in the heading.
       (c) Combining and Aggregation of Plans.--
       (1) Combining of plans.--Subsection (f) of section 415 
     (relating to combining of plans) is amended by adding at the 
     end the following:

[[Page 17243]]

       ``(3) Exception for multiemployer plans.--Notwithstanding 
     paragraph (1) and subsection (g), a multiemployer plan (as 
     defined in section 414(f)) shall not be combined or 
     aggregated with any other plan maintained by an employer for 
     purposes of applying the limitations established in this 
     section, except that such plan shall be combined or 
     aggregated with another plan which is not such a 
     multiemployer plan solely for purposes of determining whether 
     such other plan meets the requirements of subsection 
     (b)(1)(A).''.
       (2) Conforming amendment for aggregation of plans.--
     Subsection (g) of section 415 (relating to aggregation of 
     plans) is amended by striking ``The Secretary'' and inserting 
     ``Except as provided in subsection (f)(3), the Secretary''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 1999.

     SEC. 702. ACTUARIAL REDUCTION ONLY FOR BENEFITS BEGINNING 
                   BEFORE AGE 62 IN CASE OF BENEFITS UNDER 
                   MULTIEMPLOYER PLANS.

       (A) In General.--Subparagraph (F) of section 415(b)(2) is 
     amended to read as follows:
       ``(F) Multiemployer plans and plans maintained by 
     governments and tax exempt organizations.--
       ``(i) In general.--In the case of a governmental plan 
     (within the meaning of section 414(d)), a plan maintained by 
     an organization (other than a governmental unit) exempt from 
     tax under this subtitle, a multiemployer plan (as defined in 
     section 414(f)), or a qualified merchant marine plan--

       ``(I) subparagraph (C) shall be applied by substituting 
     `age 62' for `social security retirement age' each place it 
     appears, and as if the last sentence thereof read as follows: 
     `The reduction under this subparagraph shall not reduce the 
     limitation of paragraph (1)(A) below (i) $75,000 if the 
     benefit begins at or after age 55, or (ii) if the benefit 
     begins before age 55, the equivalent of the $75,000 
     limitation for age 55.', and
       ``(II) subparagraph (D) shall be applied by substituting 
     `age 65' for `social security retirement age' each place it 
     appears.

       ``(ii) Special rule for multiemployer plans.--In the case 
     of a multiemployer plan (as so defined), the $75,000 amount 
     referred to in clause (i)(I) shall in no event be less than 
     the amount equal to 80 percent of the dollar limit under 
     paragraph (1)(A).
       ``(iii) Definitions.--For purposes of this subparagraph--

       ``(I) Qualified merchant marine plan.--The term `qualified 
     merchant marine plan' means a plan in existence on January 1, 
     1986, the participants in which are merchant marine officers 
     holding licenses issued by the Secretary of Transportation 
     under title 46, United States Code.
       ``(II) Exempt organization plan covering 50 percent of its 
     employees.--A plan shall be treated as a plan maintained by 
     an organization (other than a governmental unit) exempt from 
     tax under this subtitle if at least 50 percent of the 
     employees benefiting under the plan are employees of an 
     organization (other than a governmental unit) exempt from tax 
     under this subtitle. If less than 50 percent of the employees 
     benefiting under a plan are employees of an organization 
     (other than a governmental unit) exempt from tax under this 
     subtitle, the plan shall be treated as a plan maintained by 
     an organization (other than a governmental unit) exempt from 
     tax under this subtitle only with respect to employees of 
     such an organization.''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to years beginning after December 31, 1999.
                      TITLE VIII--REVENUE OFFSETS

     SEC. 801. RETURNS RELATING TO CANCELLATIONS OF INDEBTEDNESS 
                   BY ORGANIZATIONS LENDING MONEY.

       (a) In General.--Paragraph (2) of section 6050P(c) 
     (relating to definitions and special rules) is amended by 
     striking ``and'' at the end of subparagraph (B), by striking 
     the period at the end of subparagraph (C) and inserting ``, 
     and'', and by inserting after subparagraph (C) the following 
     new subparagraph:
       ``(D) any organization a significant trade or business of 
     which is the lending of money.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to discharges of indebtedness after December 31, 
     1999.

     SEC. 802. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

       (a) In General.--Chapter 77 (relating to miscellaneous 
     provisions) is amended by adding at the end the following new 
     section:

     ``SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.

       ``(a) General Rule.--The Secretary shall establish a 
     program requiring the payment of user fees for--
       ``(1) requests to the Internal Revenue Service for ruling 
     letters, opinion letters, and determination letters, and
       ``(2) other similar requests.
       ``(b) Program Criteria.--
       ``(1) In general.--The fees charged under the program 
     required by subsection (a)--
       ``(A) shall vary according to categories (or subcategories) 
     established by the Secretary,
       ``(B) shall be determined after taking into account the 
     average time for (and difficulty of) complying with requests 
     in each category (and subcategory), and
       ``(C) shall be payable in advance.
       ``(2) Exemptions, etc.--The Secretary shall provide for 
     such exemptions (and reduced fees) under such program as the 
     Secretary determines to be appropriate.
       ``(3) Average fee requirement.--The average fee charged 
     under the program required by subsection (a) shall not be 
     less than the amount determined under the following table:

``Category                                                  Average Fee
  Employee plan ruling and opinion............................$250 ....

  Exempt organization ruling..................................$350 ....

  Employee plan determination.................................$300 ....

  Exempt organization determination...........................$275 ....

  Chief counsel ruling........................................$200.....

       ``(c) Termination.--No fee shall be imposed under this 
     section with respect to requests made after September 30, 
     2009.''
       (b) Conforming Amendments.--
       (1) The table of sections for chapter 77 is amended by 
     adding at the end the following new item:

``Sec. 7527. Internal Revenue Service user fees.''

       (2) Section 10511 of the Revenue Act of 1987 is repealed.
       (c) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

     SEC. 803. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10 OR MORE 
                   EMPLOYER PLANS.

       (a) Benefits to Which Exception Applies.--Section 
     419A(f)(6)(A) (relating to exception for 10 or more employer 
     plans) is amended to read as follows:
       ``(A) In general.--This subpart shall not apply to a 
     welfare benefit fund which is part of a 10 or more employer 
     plan if the only benefits provided through the fund are 1 or 
     more of the following:
       ``(i) Medical benefits.
       ``(ii) Disability benefits.
       ``(iii) Group term life insurance benefits which do not 
     provide for any cash surrender value or other money that can 
     be paid, assigned, borrowed, or pledged for collateral for a 
     loan.

     The preceding sentence shall not apply to any plan which 
     maintains experience-rating arrangements with respect to 
     individual employers.''
       (b) Limitation on Use of Amounts for Other Purposes.--
     Section 4976(b) (defining disqualified benefit) is amended by 
     adding at the end the following new paragraph:
       ``(5) Special rule for 10 or more employer plans exempted 
     from prefunding limits.--For purposes of paragraph (1)(C), 
     if--
       ``(A) subpart D of part I of subchapter D of chapter 1 does 
     not apply by reason of section 419A(f)(6) to contributions to 
     provide 1 or more welfare benefits through a welfare benefit 
     fund under a 10 or more employer plan, and
       ``(B) any portion of the welfare benefit fund attributable 
     to such contributions is used for a purpose other than that 
     for which the contributions were made,

     then such portion shall be treated as reverting to the 
     benefit of the employers maintaining the fund.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions paid or accrued after June 9, 
     1999, in taxable years ending after such date.

     SEC. 804. INCREASE IN ELECTIVE WITHHOLDING RATE FOR 
                   NONPERIODIC DISTRIBUTIONS FROM DEFERRED 
                   COMPENSATION PLANS.

       (a) In General.--Section 3405(b)(1) (relating to 
     withholding) is amended by striking `10 percent' and 
     inserting `15 percent'.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions after December 31, 1999.

     SEC. 805. CONTROLLED ENTITIES INELIGIBLE FOR REIT STATUS.

       (a) In General.--Subsection (a) of section 856 (relating to 
     definition of real estate investment trust) is amended by 
     striking ``and'' at the end of paragraph (6), by 
     redesignating paragraph (7) as paragraph (8), and by 
     inserting after paragraph (6) the following new paragraph:
       ``(7) which is not a controlled entity (as defined in 
     subsection (l)); and''.
       (b) Controlled Entity.--Section 856 is amended by adding at 
     the end the following new subsection:
       ``(l) Controlled Entity.--
       ``(1) In general.--For purposes of subsection (a)(7), an 
     entity is a controlled entity if, at any time during the 
     taxable year, one person (other than a qualified entity)--
       ``(A) in the case of a corporation, owns stock--
       ``(i) possessing at least 50 percent of the total voting 
     power of the stock of such corporation, or
       ``(ii) having a value equal to at least 50 percent of the 
     total value of the stock of such corporation, or
       ``(B) in the case of a trust, owns beneficial interests in 
     the trust which would meet the requirements of subparagraph 
     (A) if such interests were stock.

[[Page 17244]]

       ``(2) Qualified entity.--For purposes of paragraph (1), the 
     term `qualified entity' means--
       ``(A) any real estate investment trust, and
       ``(B) any partnership in which one real estate investment 
     trust owns at least 50 percent of the capital and profits 
     interests in the partnership.
       ``(3) Attribution rules.--For purposes of this paragraphs 
     (1) and (2)--
       ``(A) In general.--Rules similar to the rules of 
     subsections (d)(5) and (h)(3) shall apply.
       ``(B) Stapled entities.--A group of entities which are 
     stapled entities (as defined in section 269B(c)(2)) shall be 
     treated as 1 person.
       ``(4) Exception for certain new reits.--
       ``(A) In general.--The term `controlled entity' shall not 
     include an incubator REIT.
       ``(B) Incubator reit.--A corporation shall be treated as an 
     incubator REIT for any taxable year during the eligibility 
     period if it meets all the following requirements for such 
     year:
       ``(i) The corporation elects to be treated as an incubator 
     REIT.
       ``(ii) The corporation has only voting common stock 
     outstanding.
       ``(iii) Not more than 50 percent of the corporation's real 
     estate assets consist of mortgages.
       ``(iv) From not later than the beginning of the last half 
     of the second taxable year, at least 10 percent of the 
     corporation's capital is provided by lenders or equity 
     investors who are unrelated to the corporation's largest 
     shareholder.
       ``(v) The directors of the corporation adopt a resolution 
     setting forth an intent to engage in a going public 
     transaction.

     No election may be made with respect to any REIT if an 
     election under this subsection was in effect for any 
     predecessor of such REIT.
       ``(C) Eligibility period.--The eligibility period (for 
     which an incubator REIT election can be made) begins with the 
     REIT's second taxable year and ends at the close of the 
     REIT's third taxable year, but, subject to the following 
     rules, it may be extended for an additional 2 taxable years 
     if the REIT so elects:
       ``(i) A REIT cannot elect to extend the eligibility period 
     unless it agrees that, if it does not engage in a going 
     public transaction by the end of the extended eligibility 
     period, it shall pay Federal income taxes for the 2 years of 
     the extended eligibility period as if it had not made an 
     incubator REIT election and had ceased to qualify as a REIT 
     for those 2 taxable years.
       ``(ii) In the event the corporation ceases to be treated as 
     a REIT by operation of clause (i), the corporation shall file 
     any appropriate amended returns reflecting the change in 
     status within 3 months of the close of the extended 
     eligibility period. Interest would be payable but, unless 
     there was a finding under subparagraph (D), no substantial 
     underpayment penalties shall be imposed. The corporation 
     shall, at the same time, also notify its shareholders and any 
     other persons whose tax position is, or may reasonably be 
     expected to be, affected by the change in status so they also 
     may file any appropriate amended returns to conform their tax 
     treatment consistent with the corporation's loss of REIT 
     status. The Secretary shall provide appropriate regulations 
     setting forth transferee liability and other provisions to 
     ensure collection of tax and the proper administration of 
     this provision.
       ``(iii) Clause (i) and (ii) shall not apply if the 
     corporation allows its incubator REIT status to lapse at the 
     end of the initial 2-year eligibility period without engaging 
     in a going public transaction, provided the corporation 
     satisfies the requirements of the closely-held test 
     commencing with its fourth taxable year. In such a case, the 
     corporation's directors may still be liable for the penalties 
     described in subparagraph (D) during the eligibility period.
       ``(D) Special penalties.--If the Secretary determines that 
     an incubator REIT election was filed for a principal purpose 
     other than as part of a reasonable plan to undertake a going 
     public transaction, an excise tax of $20,000 would be imposed 
     on each of the corporation's directors for each taxable year 
     for which an election was in effect.
       ``(E) Going public transaction.--For purposes of this 
     paragraph, a going public transaction means--
       ``(i) a public offering of shares of the stock of the 
     incubator REIT;
       ``(ii) a transaction, or series of transactions, that 
     results in the stock of the incubator REIT being regularly 
     traded on an established securities market and that results 
     in at least 50 percent of such stock being held by 
     shareholders who are unrelated to persons who held such stock 
     before it began to be so regularly traded; or
       ``(iii) any transaction resulting in ownership of the REIT 
     by 200 or more persons (excluding the largest single 
     shareholder) who in the aggregate own at least 50 percent of 
     the stock of the REIT.

     For the purposes of this subparagraph, the rules of paragraph 
     (3) shall apply in determining the ownership of stock.
       ``(F) Definitions.--The term `established securities 
     market' shall have the meaning set forth in the regulations 
     under section 897.''
       (c) Conforming Amendment.--Paragraph (2) of section 856(h) 
     is amended by striking ``and (6)'' each place it appears and 
     inserting ``, (6), and (7)''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after July 12, 1999.
       (2) Exception for existing controlled entities.--The 
     amendments made by this section shall not apply to any entity 
     which is a controlled entity (as defined in section 856(l) of 
     the Internal Revenue Code of 1986, as added by this section) 
     as of July 12, 1999, which is a real estate investment trust 
     for the taxable year which includes such date, and which has 
     significant business assets or activities as of such date.

     SEC. 806. TREATMENT OF GAIN FROM CONSTRUCTIVE OWNERSHIP 
                   TRANSACTIONS.

       (a) In General.--Part IV of subchapter P of chapter 1 
     (relating to special rules for determining capital gains and 
     losses) is amended by inserting after section 1259 the 
     following new section:

     ``SEC. 1260. GAINS FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

       ``(a) In General.--If the taxpayer has gain from a 
     constructive ownership transaction with respect to any 
     financial asset and such gain would (without regard to this 
     section) be treated as a long-term capital gain--
       ``(1) such gain shall be treated as ordinary income to the 
     extent that such gain exceeds the net underlying long-term 
     capital gain, and
       ``(2) to the extent such gain is treated as a long-term 
     capital gain after the application of paragraph (1), the 
     determination of the capital gain rate (or rates) applicable 
     to such gain under section 1(h) shall be determined on the 
     basis of the respective rate (or rates) that would have been 
     applicable to the net underlying long-term capital gain.
       ``(b) Interest Charge on Deferral of Gain Recognition.--
       ``(1) In general.--If any gain is treated as ordinary 
     income for any taxable year by reason of subsection (a)(1), 
     the tax imposed by this chapter for such taxable year shall 
     be increased by the amount of interest determined under 
     paragraph (2) with respect to each prior taxable year during 
     any portion of which the constructive ownership transaction 
     was open. Any amount payable under this paragraph shall be 
     taken into account in computing the amount of any deduction 
     allowable to the taxpayer for interest paid or accrued during 
     such taxable year.
       ``(2) Amount of interest.--The amount of interest 
     determined under this paragraph with respect to a prior 
     taxable year is the amount of interest which would have been 
     imposed under section 6601 on the underpayment of tax for 
     such year which would have resulted if the gain (which is 
     treated as ordinary income by reason of subsection (a)(1)) 
     had been included in gross income in the taxable years in 
     which it accrued (determined by treating the income as 
     accruing at a constant rate equal to the applicable Federal 
     rate as in effect on the day the transaction closed). The 
     period during which such interest shall accrue shall end on 
     the due date (without extensions) for the return of tax 
     imposed by this chapter for the taxable year in which such 
     transaction closed.
       ``(3) Applicable federal rate.--For purposes of paragraph 
     (2), the applicable Federal rate is the applicable Federal 
     rate determined under 1274(d) (compounded semiannually) which 
     would apply to a debt instrument with a term equal to the 
     period the transaction was open.
       ``(4) No credits against increase in tax.--Any increase in 
     tax under paragraph (1) shall not be treated as tax imposed 
     by this chapter for purposes of determining--
       ``(A) the amount of any credit allowable under this 
     chapter, or
       ``(B) the amount of the tax imposed by section 55.
       ``(c) Financial Asset.--For purposes of this section--
       ``(1) In general.--The term `financial asset' means--
       ``(A) any equity interest in any pass-thru entity, and
       ``(B) to the extent provided in regulations--
       ``(i) any debt instrument, and
       ``(ii) any stock in a corporation which is not a pass-thru 
     entity.
       ``(2) Pass-thru entity.--For purposes of paragraph (1), the 
     term `pass-thru entity' means--
       ``(A) a regulated investment company,
       ``(B) a real estate investment trust,
       ``(C) an S corporation,
       ``(D) a partnership,
       ``(E) a trust,
       ``(F) a common trust fund,
       ``(G) a passive foreign investment company (as defined in 
     section 1297),
       ``(H) a foreign personal holding company, and
       ``(I) a foreign investment company (as defined in section 
     1246(b)).
       ``(d) Constructive Ownership Transaction.--For purposes of 
     this section--
       ``(1) In general.--The taxpayer shall be treated as having 
     entered into a constructive ownership transaction with 
     respect to any financial asset if the taxpayer--

[[Page 17245]]

       ``(A) holds a long position under a notional principal 
     contract with respect to the financial asset,
       ``(B) enters into a forward or futures contract to acquire 
     the financial asset,
       ``(C) is the holder of a call option, and is the grantor of 
     a put option, with respect to the financial asset and such 
     options have substantially equal strike prices and 
     substantially contemporaneous maturity dates, or
       ``(D) to the extent provided in regulations prescribed by 
     the Secretary, enters into 1 or more other transactions (or 
     acquires 1 or more positions) that have substantially the 
     same effect as a transaction described in any of the 
     preceding subparagraphs.
       ``(2) Exception for positions which are marked to market.--
     This section shall not apply to any constructive ownership 
     transaction if all of the positions which are part of such 
     transaction are marked to market under any provision of this 
     title or the regulations thereunder.
       ``(3) Long position under notional principal contract.--A 
     person shall be treated as holding a long position under a 
     notional principal contract with respect to any financial 
     asset if such person--
       ``(A) has the right to be paid (or receive credit for) all 
     or substantially all of the investment yield (including 
     appreciation) on such financial asset for a specified period, 
     and
       ``(B) is obligated to reimburse (or provide credit for) all 
     or substantially all of any decline in the value of such 
     financial asset.
       ``(4) Forward contract.--The term `forward contract' means 
     any contract to acquire in the future (or provide or receive 
     credit for the future value of) any financial asset.
       ``(e) Net Underlying Long-Term Capital Gain.--For purposes 
     of this section, in the case of any constructive ownership 
     transaction with respect to any financial asset, the term 
     `net underlying long-term capital gain' means the aggregate 
     net capital gain that the taxpayer would have had if--
       ``(1) the financial asset had been acquired for fair market 
     value on the date such transaction was opened and sold for 
     fair market value on the date such transaction was closed, 
     and
       ``(2) only gains and losses that would have resulted from 
     the deemed ownership under paragraph (1) were taken into 
     account.

     The amount of the net underlying long-term capital gain with 
     respect to any financial asset shall be treated as zero 
     unless the amount thereof is established by clear and 
     convincing evidence.
       ``(f) Special Rule Where Taxpayer Takes Delivery.--Except 
     as provided in regulations prescribed by the Secretary, if a 
     constructive ownership transaction is closed by reason of 
     taking delivery, this section shall be applied as if the 
     taxpayer had sold all the contracts, options, or other 
     positions which are part of such transaction for fair market 
     value on the closing date. The amount of gain recognized 
     under the preceding sentence shall not exceed the amount of 
     gain treated as ordinary income under subsection (a). Proper 
     adjustments shall be made in the amount of any gain or loss 
     subsequently realized for gain recognized and treated as 
     ordinary income under this subsection.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations--
       ``(1) to permit taxpayers to mark to market constructive 
     ownership transactions in lieu of applying this section, and
       ``(2) to exclude certain forward contracts which do not 
     convey substantially all of the economic return with respect 
     to a financial asset.''
       (b) Clerical Amendment.--The table of sections for part IV 
     of subchapter P of chapter 1 is amended by adding at the end 
     the following new item:

``Sec. 1260. Gains from constructive ownership transactions.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after July 11, 1999.

     SEC. 807. TRANSFER OF EXCESS DEFINED BENEFIT PLAN ASSETS FOR 
                   RETIREE HEALTH BENEFITS.

       (a) Extension.--Paragraph (5) of section 420(b) (relating 
     to expiration) is amended by striking ``in any taxable year 
     beginning after December 31, 2000'' and inserting ``made 
     after September 30, 2009''.
       (b) Application of Minimum Cost Requirements.--
       (1) In general.--Paragraph (3) of section 420(c) is amended 
     to read as follows:
       ``(3) Minimum cost requirements.--
       ``(A) In general.--The requirements of this paragraph are 
     met if each group health plan or arrangement under which 
     applicable health benefits are provided provides that the 
     applicable employer cost for each taxable year during the 
     cost maintenance period shall not be less than the higher of 
     the applicable employer costs for each of the 2 taxable years 
     immediately preceding the taxable year of the qualified 
     transfer.
       ``(B) Applicable employer cost.--For purposes of this 
     paragraph, the term `applicable employer cost' means, with 
     respect to any taxable year, the amount determined by 
     dividing--
       ``(i) the qualified current retiree health liabilities of 
     the employer for such taxable year determined--

       ``(I) without regard to any reduction under subsection 
     (e)(1)(B), and
       ``(II) in the case of a taxable year in which there was no 
     qualified transfer, in the same manner as if there had been 
     such a transfer at the end of the taxable year, by

       ``(ii) the number of individuals to whom coverage for 
     applicable health benefits was provided during such taxable 
     year.
       ``(C) Election to compute cost separately.--An employer may 
     elect to have this paragraph applied separately with respect 
     to individuals eligible for benefits under title XVIII of the 
     Social Security Act at any time during the taxable year and 
     with respect to individuals not so eligible.
       ``(D) Cost maintenance period.--For purposes of this 
     paragraph, the term `cost maintenance period' means the 
     period of 5 taxable years beginning with the taxable year in 
     which the qualified transfer occurs. If a taxable year is in 
     2 or more overlapping cost maintenance periods, this 
     paragraph shall be applied by taking into account the highest 
     applicable employer cost required to be provided under 
     subparagraph (A) for such taxable year.''
       (2) Conforming amendments.--
       (A) Clause (iii) of section 420(b)(1)(C) is amended by 
     striking ``benefits'' and inserting ``cost''.
       (B) Subparagraph (D) of section 420(e)(1) is amended by 
     striking ``and shall not be subject to the minimum benefit 
     requirements of subsection (c)(3)'' and inserting ``or in 
     calculating applicable employer cost under subsection 
     (c)(3)(B)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to qualified transfers occurring after the date 
     of the enactment of this Act.

     SEC. 808. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF 
                   INSTALLMENT METHOD FOR ACCRUAL METHOD 
                   TAXPAYERS.

       (a) Repeal of Installment Method for Accrual Basis 
     Taxpayers.--
       (1) In general.--Subsection (a) of section 453 (relating to 
     installment method) is amended to read as follows:
       ``(a) Use of Installment Method.--
       ``(1) In general.--Except as otherwise provided in this 
     section, income from an installment sale shall be taken into 
     account for purposes of this title under the installment 
     method.
       ``(2) Accrual method taxpayer.--The installment method 
     shall not apply to income from an installment sale if such 
     income would be reported under an accrual method of 
     accounting without regard to this section. The preceding 
     sentence shall not apply to a disposition described in 
     subparagraph (A) or (B) of subsection (l)(2).''
       (2) Conforming amendments.--Sections 453(d)(1), 453(i)(1), 
     and 453(k) are each amended by striking ``(a)'' each place it 
     appears and inserting ``(a)(1)''.
       (b) Modification of Pledge Rules.--Paragraph (4) of section 
     453A(d) (relating to pledges, etc., of installment 
     obligations) is amended by adding at the end the following: 
     ``A payment shall be treated as directly secured by an 
     interest in an installment obligation to the extent an 
     arrangement allows the taxpayer to satisfy all or a portion 
     of the indebtedness with the installment obligation.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales or other dispositions occurring on or 
     after the date of the enactment of this Act.

     SEC. 809. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD 
                   OF ACCOUNTING.

       (a) In General.--Section 448(d)(5) (relating to special 
     rule for services) is amended--
       (1) by inserting ``in fields described in paragraph 
     (2)(A)'' after ``services by such person'', and
       (2) by inserting ``certain personal'' before ``services'' 
     in the heading.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Change in method of accounting.--In the case of any 
     taxpayer required by the amendments made by this section to 
     change its method of accounting for its first taxable year 
     ending after the date of the enactment of this Act--
       (A) such change shall be treated as initiated by the 
     taxpayer,
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
       (C) the net amount of the adjustments required to be taken 
     into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 shall be taken into account 
     over a period (not greater than 4 taxable years) beginning 
     with such first taxable year.

     SEC. 810. EXCLUSION OF LIKE-KIND EXCHANGE PROPERTY FROM 
                   NONRECOGNITION TREATMENT ON THE SALE OF A 
                   PRINCIPAL RESIDENCE.

       (a) In General.--Subsection (d) of section 121 (relating to 
     the exclusion of gain from the sale of a principal residence) 
     is amended by adding at the end the following new paragraph:

[[Page 17246]]

       ``(9) Like-kind exchanges.--Subsection (a) shall not apply 
     to any sale or exchange of a residence if such residence was 
     acquired by the taxpayer during the 5-year period ending on 
     the date of such sale or exchange in an exchange in which any 
     amount of gain was not recognized under section 1031.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to any sale or exchange of a principal residence 
     after the date of the enactment of this Act.

     SEC. 811. DISALLOWANCE OF NONECONOMIC TAX ATTRIBUTES.

       (a) In General.--Section 7701 is amended by redesignating 
     subsection (m) as subsection (n) and by inserting after 
     subsection (l) the following new subsection:
       ``(m) Disallowance of Noneconomic Tax Attributes.--
       ``(1) In general.--In determining liability for any tax 
     under subtitle A, noneconomic tax attributes shall not be 
     allowed.
       ``(2) Noneconomic tax attribute.--For purposes of this 
     subsection, a noneconomic tax attribute is any deduction, 
     loss, or credit claimed to result from any transaction 
     unless--
       ``(A) the transaction changes in a meaningful way (apart 
     from Federal income tax consequences) the taxpayer's economic 
     position, and
       ``(B)(i) the present value of the reasonably expected 
     potential income from the transaction (and the taxpayer's 
     risk of loss from the transaction) are substantial in 
     relationship to the present value of the tax benefits 
     claimed, or
       ``(ii) in the case of a transaction which is in substance 
     the borrowing of money or the acquisition of financial 
     capital, the deductions claimed with respect to the 
     transaction for any period are not significantly in excess of 
     the economic return for such period realized by the person 
     lending the money or providing the financial capital.
       ``(3) Presumption of noneconomic tax attributes.--For 
     purposes of paragraph (2), the following factors shall give 
     rise to a presumption that a transaction fails to meet the 
     requirements of paragraph (2):
       ``(A) The fact that the payments, liabilities, or assets 
     that purport to create a loss (or other benefit) for tax 
     purposes are not reflected to any meaningful extent on the 
     taxpayer's books and records for financial reporting 
     purposes.
       ``(B) The fact that the transaction results in an 
     allocation of income or gain to a tax-indifferent party which 
     is substantially in excess of such party's economic income or 
     gain from the transaction.
       ``(4) Treatment of built-in loss.--The determination of 
     whether a transaction results in the realization of a built-
     in loss shall be made under subtitle A as if this subsection 
     had not been enacted. For purposes of the preceding sentence, 
     the term `built-in loss' means any loss or deduction to the 
     extent that such loss or deduction had economically been 
     incurred before such transaction is entered into and to the 
     extent that the loss or deduction was economically borne by 
     the taxpayer.
       ``(5) Definition and special rules.--For purposes of this 
     subsection--
       ``(A) Tax-indifferent party.--The term `tax-indifferent 
     party' means any person or entity exempt from tax under 
     subtitle A. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if, by reason of such 
     person's method of accounting, the items taken into account 
     with respect to the transaction have no substantial impact on 
     such person's liability under subtitle A.
       ``(B) Series of related transaction.--A transaction which 
     is part of a series of related transactions shall be treated 
     as meeting the requirements of paragraph (2) only if--
       ``(i) such transaction meets such requirements without 
     regard to the other transactions, and
       ``(ii) such transactions, if treated as 1 transaction, 
     would meet such requirements.
     A similar rule shall apply to a multiple step transaction 
     with each step being treated as a separate related 
     transaction.
       ``(C) Normal business transactions.--In the case of a 
     transaction which is an integral part of a taxpayer's trade 
     or business and which is entered into in the normal course of 
     such trade or business, the determination of the potential 
     income from such transaction shall be made by taking into 
     account its relationship to the overall trade or business of 
     the taxpayer.
       ``(D) Treatment of fees.--In determining whether there is 
     risk of loss from a transaction (and the amount thereof), 
     potential loss of fees and other transaction expenses shall 
     be disregarded.
       ``(E) Treatment of economic return enhancements.--The 
     following shall be treated as economic returns and not tax 
     benefits:
       ``(i) The credit under section 29 (relating to credit for 
     producing fuel from a nonconventional source).
       ``(ii) The credit under section 42 (relating to low-income 
     housing credit).
       ``(iii) The credit under section 45 (relating to 
     electricity produced from certain renewable resources).
       ``(iv) The credit under section 1397E (relating to credit 
     to holders of qualified zone academy bonds) or any similar 
     program hereafter enacted.
       ``(v) Any other tax benefit specified in regulations.
       ``(F) Exceptions for nonbusiness transactions.--
       ``(i) Individuals.--In the case of an individual, this 
     subsection shall only apply to transactions entered into in 
     connection with a trade or business or activity engaged in 
     for profit.
       ``(ii) Charitable transfers.--This subsection shall not 
     apply in determining the amount allowable as a deduction 
     under section 170, 545(b)(2), 556(b)(2), or 642(c).
       ``(6) Economic substance doctrine, etc., not affected.--The 
     provisions of this subsection shall not be construed as 
     altering or supplanting any rule of law referred to in 
     section 6662(i)(2)(B) and the requirements of this subsection 
     shall be construed as being in addition to any such rule of 
     law.''
       (b) Increase in Substantial Underpayment Penalty With 
     Respect to Disallowed Noneconomic Tax Attributes.--Section 
     6662 (relating to imposition of accuracy-related penalty) is 
     amended by adding at the end the following new subsection:
       ``(i) Increase in Penalty in Case of Disallowed Noneconomic 
     Tax Attributes.--
       ``(1) In general.--In the case of the portion of the 
     underpayment to which this subsection applies--
       ``(A) subsection (a) shall be applied with respect to such 
     portion by substituting `40 percent' for `20 percent', and
       ``(B) subsection (d)(2)(B) and section 6664(c) shall not 
     apply.
       ``(2) Underpayments to which subsection applies.--This 
     subsection shall apply to an underpayment to which this 
     section applies by reason of paragraph (1) or (2) of 
     subsection (b) to the extent that such underpayment is 
     attributable to--
       ``(A) the disallowance of any noneconomic tax attribute 
     (determined under section 7701(m)), or
       ``(B) the disallowance of any other benefit--
       ``(i) because of a lack of economic substance or business 
     purpose for the transaction giving rise to the claimed 
     benefit,
       ``(ii) because the form of the transaction did not reflect 
     its substance, or
       ``(iii) because of any other similar rule of law.
       ``(3) Increase in penalty not to apply if compliance with 
     disclosure requirements.--Paragraph (1)(A) shall not apply if 
     the taxpayer--
       ``(A) discloses to the Secretary within 30 days after the 
     closing of the transaction appropriate documents describing 
     the transaction, and
       ``(B) files with the taxpayer's return of tax imposed by 
     subtitle A--
       ``(i) a statement verifying that such disclosure has been 
     made,
       ``(ii) a detailed description of the facts, assumptions of 
     facts, and factual conclusions with respect to the business 
     or economic purposes or objectives of the transaction that 
     are relied upon to support the manner in which it is reported 
     on the return,
       ``(iii) a description of the due diligence performed to 
     ascertain the accuracy of such facts, assumptions, and 
     factual conclusions,
       ``(iv)(I) a statement (signed by the senior financial 
     officer of the corporation under penalty of perjury) that the 
     facts, assumptions, or factual conclusions relied upon in 
     reporting the transaction are true and correct as of the date 
     the return is filed, to the best of such officer's knowledge 
     and belief, and
       ``(II) if the actual facts varied materially from the 
     facts, assumptions, or factual conclusions relied upon, a 
     statement describing such variances,
       ``(v) copies of any written material provided in connection 
     with the offer of the transaction to the taxpayer by a third 
     party,
       ``(vi) a full description of any express or implied 
     agreement or arrangement with any advisor, or with any 
     offeror, that the fee payable to such person would be 
     contingent or subject to possible reimbursement, and
       ``(vii) a full description of any express or implied 
     warranty from any person with respect to the anticipated tax 
     results from the transaction.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act.
     TITLE IX--NATIONAL COMMISSION ON TAX REFORM AND SIMPLIFICATION

     SEC. 901. ESTABLISHMENT.

       (a) In General.--There is established the National 
     Commission on Tax Reform and Simplification. The Commission 
     shall be composed of 15 members appointed or designated by 
     the President and selected as follows:
       (1) 5 members selected by the President from among officers 
     or employees of the Executive Branch, private citizens of the 
     United States, or both. Not more than 3 of the members 
     selected by the President shall be members of the same 
     political party;
       (2) 5 members selected by the Majority Leader of the Senate 
     from among members of the Senate, private citizens of the 
     United States, or both. Not more than 3 of the members 
     selected by the Majority Leader shall be members of the same 
     political party;
       (3) 5 members selected by the Speaker of the House of 
     Representatives from among

[[Page 17247]]

     members of the House, private citizens of the United States, 
     or both. Not more than 3 of the members selected by the 
     Speaker shall be members of the same political party.
       (b) Chairman.--The President shall designate a Chairman 
     from among the members of the Commission.

     SEC. 902. FUNCTIONS.

       (a) In General.--The Commission shall review the Internal 
     Revenue Code of 1986, identify provisions of such Code which 
     are unnecessarily complex and may be simplified, and make 
     appropriate recommendations to the Secretary of the Treasury, 
     the President, and to Congress.
       (b) Report.--The Commission shall make its report to the 
     President not later than 1 year after the date of the 
     enactment of this Act.

     SEC. 903. ADMINISTRATION.

       (a) Information From Executive Agencies.--The heads of 
     Executive agencies shall, to the extent permitted by law, 
     provide the Commission such information as it may require for 
     the purpose of carrying out its functions.
       (b) Pay.--Members of the Commission shall serve without any 
     additional compensation for their work on the Commission. 
     However, members appointed from among private citizens of the 
     United States may be allowed travel expenses, including per 
     diem in lieu of subsistence, as authorized by law for persons 
     serving intermittently in the government service (5 U.S.C. 
     5701-5707), to the extent funds are available therefor.
       (c) Staff.--The Commission shall have a staff headed by an 
     Executive Director. Any expenses of the Commission shall be 
     paid from such funds as may be available to the Secretary of 
     the Treasury.

     SEC. 904. GENERAL.

        (a) Authority of Secretary of Treasury.--Notwithstanding 
     any Executive Order, the responsibilities of the President 
     under the Federal Advisory Committee Act, as amended, except 
     that of reporting annually to the Congress, which are 
     applicable to the Commission, shall be performed by the 
     Secretary of the Treasury in accordance with the guidelines 
     and procedures established by the Administrator of General 
     Services.
       (b) Termination.--The Commission shall terminate 30 days 
     after submitting its report.

  The Speaker pro tempore. Pursuant to House Resolution 256, the 
gentleman from New York (Mr. Rangel) and a Member opposed each will 
control 30 minutes.
  The Chair recognizes the gentleman from New York (Mr. Rangel).
  Mr. RANGEL. Mr. Speaker, I yield myself as much time as I may 
consume.
  Mr. Speaker, as I have said, the major thing that should be before us 
at a time like this when we have unexpected revenues is to fix the roof 
while the sun is shining, and the repairs that have to be made is in 
our Social Security system and our Medicare system and to provide some 
relief for our aged who are dependent on prescription drugs. We really 
believe that we should do more in reducing the Federal debt, and at the 
same time the President has suggested that we do have a $250 billion 
tax cut. We have tried to include many things that would help and have 
it targeted to be of assistance to the American people rather than just 
to target it for close to a trillion dollars to the wealthiest 
Americans.
  Mr. Speaker, we also support having even more details to a tax cut in 
the motion to recommit which could be done later once we make that 
commitment. But no matter what we do, no effect comes into being until 
it is certified that we did what we were supposed to do, and that is to 
make certain that the Social Security system and Medicare is solvent 
and we reduce the Federal debt. I reserve the balance of my time.
  The SPEAKER pro tempore. Does the gentleman from Texas (Mr. Archer) 
wish to control the time in opposition?
  Mr. ARCHER. I do, Mr. Speaker.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Texas (Mr. Archer).
  Mr. ARCHER. Mr. Speaker, I yield such time as we may consume to the 
gentlewoman from New Jersey (Mrs. Roukema).
  Mrs. ROUKEMA. Mr. Speaker, I had hoped to be here a little earlier 
for the general debate, and I do appreciate this time for colloquy, but 
in a sense it is a good time in view of what ranking member Rangel has 
just, and one of the reasons I was delayed, the reason I was delayed 
was that I was at a Committee on Banking and Financial Services hearing 
with the Federal Reserve Board Chairman Greenspan giving his Humphry 
Hawkins report, and in the course my questioning I asked him 
specifically about the provision on the trigger that is related to the 
debt reduction, and I just want the chairman to know and this body to 
know that the Federal Reserve Board chairman agrees. The trigger is a 
very good idea.
  So I want people to understand that, but I am concerned about the 
inferences here, whether it is with respect to what we Republicans 
agreed to yesterday on that trigger and forestalling the across-the-
board tax cut or whether it is the general discussion here. But it 
seems to be a compelling need to play politics with this as though we 
are spending the Social Security Trust Fund, and that is the nature of 
the colloquy that I want to have.
  Mr. Speaker, it is certainly my understanding that the Social 
Security Trust Fund and the lockbox that we have put in place under 
H.R. 2488, this bill, does not either with the trigger mechanism or any 
other provision of this bill in any way violate the fact that those 
moneys are being set aside for both Social Security and Medicare, and 
that it no way inhibits or prohibits in any way the fact that we are 
going to pursue in other legislation ways to protect Social Security 
and secure the Medicare provisions.
  Is that correct? That is certainly my understanding.
  Mr. ARCHER. Mr. Speaker, will the gentlewoman yield?
  Mrs. ROUKEMA. I yield to the gentleman from Texas.
  Mr. ARCHER. Mr. Speaker, the gentlewoman is correct. Nothing in this 
tax bill before us today would in any way have an adverse effect on our 
efforts to strengthen Medicare or save Social Security. The debt 
reduction provision will be helpful in our efforts to pursue the course 
that we have set through the Safe Deposit Act and through other efforts 
which have resulted in a huge surplus projected for the government for 
the years ahead. We submitted for the Record an explanation of the debt 
reduction provision, and I refer the gentlewoman to that for a detailed 
explanation.
  Mrs. ROUKEMA. And that includes, Mr. Speaker, the provision that we 
have with the, as the gentleman said, the debt reduction and the 
triggering mechanism.
  Mr. ARCHER. The gentlewoman is absolutely correct.
  Mrs. ROUKEMA. I do thank the gentleman. That is certainly what our 
understanding was when we negotiated this agreement, and I think it is 
a fiscally sound one and a realistic one, and I am certainly glad that 
we now have the Federal Reserve Board Chairman's approval of the 
triggering mechanism.
  Mr. ARCHER. Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Connecticut (Ms. DeLauro).
  Ms. DeLAURO. Mr. Speaker, I thank the gentleman and rise in support 
of the Democratic substitute and in opposition to the Republican 
proposal which is an irresponsible tax giveaway. It jeopardizes 
Medicare and Social Security and in fact the health of our economy at 
the expense of the middle class. It reflects the upside-down values of 
this Republican-led Congress and does not reflect the values of 
American families.
  When it comes to the budget, our money is where our values are. I 
support targeted tax cuts for middle class families, tax cuts for 
education, a per-child tax cut, small business tax cuts, those that 
make sense and that we can afford, but not a Republican tax giveaway 
where 65 percent of the benefit goes to the wealthiest 10 percent of 
Americans.
  This trillion dollar Republican tax giveaway is paid for by cutting 
programs that assist veterans, children and seniors. It is shameful, 
and America is better than this.
  Let us not betray our values, values that say in America every child 
will have the opportunity to succeed in school and in life, values that 
say we will meet the needs of our veterans who put their lives on the 
line to protect our freedoms, values that say we will take care of our 
parents and grandparents in their old age.
  Vote for the Democratic substitute and for the values of this 
country.

[[Page 17248]]


  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
Kentucky (Mr. Fletcher).

                              {time}  1230

  Mr. FLETCHER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I certainly appreciate his long-standing efforts to secure the 
financial security of families, and I believe this bill does just that.
  Mr. Speaker, the President wanted to save only 62 percent for Social 
Security. We put 100 percent in it, locked it up for Social Security 
and Medicare so that we can make sure we provide for that. We also 
increased our spending on military, education, and still able to return 
money to the American people in overpayment because of the on-budget 
surplus.
  I saw this cartoon in my local newspaper the other day and I think it 
really expresses the difference in attitude. It shows here a thief in 
the night holding up an innocent young couple saying, ``I know how to 
spend your money better than you do,'' and that is exactly the way the 
minority side feels. They know how to spend money better than American 
families do.
  Mr. RANGEL. Mr. Speaker, will the gentleman yield?
  Mr. FLETCHER. You take the money; you are not going to take my time.
  Mr. RANGEL. Mr. Speaker, I would ask that the gentleman put the 
cartoon over here so we can see it too. We cannot see it.
  Mr. FLETCHER. Mr. Speaker, I reclaim my time. We will be glad to show 
the gentleman.
  I am surprised. I also have a list of the folks who voted to increase 
how much money they take home, over $4,000 a year. Last night those 
same people stood up here and said no, we do not want the American, 
average American, to take just a little over $5,000 home over 10 years. 
We want to keep it. We will take ours, but we do not want you to have 
yours. So I think it shows the hypocrisy there.
  I stand to support this bill and what the chairman has done. I 
encourage my colleagues to vote for the bill and not for the 
substitute.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Tennessee (Mr. Tanner), a member of the Committee on Ways and Means.
  Mr. TANNER. Mr. Speaker, I came here this morning hoping that I could 
have voted for a tax bill that was reasonable. All of the rhetoric we 
have heard this morning, basically dealing with the surplus, is about a 
projection. It is not about a fact. In fact, 6 months ago, part of the 
money we are talking about spending today was not even here. It was 
created by rewriting the projection of what is going to happen.
  This is fact. This has happened. These are the deficits that we ran 
during the 1980s and 1990s, resulting in this national debt that we, 
the American people and our kids and grandkids owe. That is not a 
projection, this is not a guess, it is not a hope, it is not a wing and 
a prayer, it is a fact.
  In a few minutes we are going to have a motion to recommit. All of 
us, the President, the Republicans, the Democrats have agreed to take 
the Social Security money surplus off the table. The motion to commit 
in a few minutes is going to focus only on this trillion dollar 
surplus, on-budget surplus, having nothing to do with Social Security 
surpluses, that we have in front of us that we have been spending over 
and over again this morning.
  I want my colleagues to listen to it, because what it says is, let us 
not only put 100 percent of the Social Security money aside for future 
generations, but let us take half of this money we are talking about 
spending today and put it to our children, to their future financial 
obligations. Everybody in here knows, if they are honest with 
themselves, that simply by taking the Social Security surplus and 
paying that on the publicly-held debt, we do not lessen the financial 
obligation of the next generation by one red cent. It is $5.6 trillion 
then; it is $5.6 trillion now, and it is $5.6 trillion tomorrow.
  By simply doing that, we do not do anything. The motion to recommit 
is the only way to pay down the debt.
  Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Florida (Mr. Shaw), a respected Member of the Committee on Ways and 
Means and the Chairman of the Subcommittee on Social Security.
  Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, during the debate on the tax cut bill, a common refrain 
was echoed last night, and we are seeing it again today, and that is 
saying that we will be cutting taxes somehow and it will hurt Social 
Security and Medicare.
  Mr. Speaker, I say to my colleagues, it is simply not true. Do not 
believe this scare tactic. The House, including 95 percent of the 
Democrats, have already overwhelmingly approved H.R. 1259, which is the 
Social Security lockbox. This bill locks away $1.9 trillion in Social 
Security surpluses over the next decade. Those surpluses are to be used 
and can only be used solely to pay down the debt or to save Social 
Security and Medicare.
  Fortunately, as established by the Social Security guarantee plan, 
the gentleman from Texas (Mr. Archer) and I have crafted the Social 
Security surpluses, and we have proved that the Social Security 
surpluses are more than enough to save Social Security, leaving 
hundreds of billions of dollars to save Medicare and to pay down the 
debt.
  I cannot help but be struck by the irony that those claiming Social 
Security surpluses are not enough to save Social Security do not even 
have their own plan to save Social Security. Where is the plan? Where 
is the plan to save Social Security for all time? There is the Archer-
Shaw plan. Where is the Democrat plan? How much does it cost? Tax cut 
opponents have no answers to this, and I find the silence in this hall 
today deafening. Where is the plan? Is it any surprise that we are now 
trying to scare our seniors?
  Well, I am going to say, this time, it is not going to work. In fact, 
this bill that we have before us today augments efforts to save Social 
Security and Medicare through needed pension reforms, savings and 
investment incentives, and health care tax relief, enhanced savings and 
stronger employer pensions, which will ensure the retirement security 
so that it will remain stable to support the baby boomers as they 
approach retirement.
  Plus, we have now added a provision which says, if we do not pay down 
the debt, then we do not cut the taxes for that year. I think Mr. 
Greenspan, just this morning, made reference to that in his testimony 
in a very positive manner. How much stronger of a commitment to paying 
down debt can we get.
  The tax cut is financed 100 percent with non-Social Security 
surpluses. Let me repeat that, 100 percent of non-Social Security 
surpluses, which represents the overpayment of taxes by the American 
family. We should refund them and get on with the hard work of saving 
Social Security and Medicare.
  Fortunately, for that purpose, we can use the Social Security 
surpluses already saved in the lockbox which are more than enough to 
save Social Security and Medicare. We can pay down the debt, cut taxes 
and save Social Security and Medicare, and this tax bill proves it.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Tennessee (Mr. Clement).
  Mr. CLEMENT. Mr. Speaker, I rise today in strong support of the 
Democratic substitute. I want to congratulate the gentleman from New 
York (Mr. Rangel) for being such a strong leader in bringing about tax 
fairness in this Democratic package.
  This particular issue I am talking about is one that the Republicans 
could have made part of their package. They refused. Democrats said 
they wanted this to be a part of their package, and this has to do with 
the fundamental fairness not only for Tennessee, but for 7 other of our 
States.
  In 1986, the State and local sales tax deduction was eliminated from 
the Tax Code and created a fundamental inequity between States that 
have an income tax and those that do not. Taxpayers living in States 
that have an income tax can deduct their State taxes, but those living 
in 7 States without an income tax do not have a deduction. So

[[Page 17249]]

they end up paying more in taxes to the Federal Government.
  In 1997, the average Tennessean paid $927 in State taxes. We can 
deduct that in the future if we will vote for the Democratic 
substitute, and we need to do that to bring about tax fairness.
  Mr. Speaker, I rise in strong support of the Democratic substitute 
and, in particular, of restoring the sales tax deduction to the federal 
income tax code.
  The problems with the Republican tax proposal are almost too numerous 
to mention. They want to spend $792 billion over the next ten years, 
almost the entire projected on-budget surplus, on a tax cut whose main 
beneficaries will be those at the top of the income scale. According to 
the Treasury Department, 65 percent of the tax relief would go the 
wealthiest 10 percent of taxpayers. In addition to not providing tax 
relief to those who most need it, the Republican plan puts the future 
of Social Security and Medicare in jeopardy. They leave none of the 
projected surpluses available for Medicare reform, meaning that Social 
Security and Medicare will have to compete for the Social Security 
Trust Fund. In fact, these tax cuts would explode just about the time 
the baby boomers are going to need these essential programs. And 
perhaps the most serious consequences of this ill-conceived and 
irresponsible tax scheme is that rather than paying off the national 
debt, the Republicans would return us to an era of deficits by spending 
all of an estimated surplus that may very well never materialize 
because it is based on drastic and unrealistic cuts in discretionary 
programs.
  The Democratic substitute is a moderate approach that provides tax 
relief to those who most need it while also allowing us to adequately 
fund important discretionary programs such as Head Start, the National 
Institutes of Health, and veteran's health care, ensure the long-term 
solvency of both Social Security and Medicare, and pay off the national 
debt. This amendment contains many important provisions that will 
provide relief to middle-class families, such as elimination of the 
marriage penalty, relief from the estate tax, an increase in the family 
child tax credit, funds for public school construction and 
modernization, and a tax credit for long-term care providers. It also 
permanently extends the research credit, the welfare-to-work credit, 
and the brownsfields tax incentive.
  Perhaps the most important provision of this amendment for the 
citizens of Tennessee is the restoration of the sales tax deduction 
from the federal income tax. In 1986, the state and local sales tax 
deduction was eliminated from the federal tax code in an effort to 
expand the tax base. While well-intentioned, the elimination of the 
sales tax deduction created a fundamental inequity between states that 
have adopted an income tax and those that have not. That's because, 
under the current tax code, taxpayers living in states that have an 
income tax can deduct their state taxes from their federal tax bill. 
However, those living in states without an income tax, such as Texas, 
Florida, Washington, Tennessee, South Dakota, Nevada, and Wyoming, 
don't have an equivalent deduction. As a result, they end up paying 
significantly more in taxes to the federal government than a taxpayer 
with an identical profile in a different state.
  In 1997, the citizens of Tennessee paid an average of $927 in state 
and local sales taxes, but could not deduct one dollar of it from their 
federal income tax returns. So, basically, Tennesseans are being forced 
to pay taxes on their taxes. My colleagues, this is just not right. In 
fact, Tennessee Lieutenant Governor John Wilder is exploring options 
for filing a class action lawsuit against the federal government 
asserting that the citizens of Tennessee are being discriminated 
against simply because they live in a state that has chosen not to 
enact a state income tax.
  Mr. Speaker, I submit to you that the federal government should treat 
all taxpayers equally, regardless of the system of taxation their state 
employs.
  This provision of the Democratic substitute would allow taxpayers to 
deduct either their state income tax or state and local sales taxes 
from their federal income tax returns. Those living in states that have 
an income tax would still be able to take an income tax deduction as 
they are today. However, residents of states that do not have an income 
tax would be provided with the opportunity to take a similar deduction.
  I also believe we should remove the incentive toward a state income 
tax from the federal tax code. Regardless of your views on income 
taxes, sales taxes or some alternate tax structures, I'm sure my 
colleagues on both sides of the aisle would agree that states should 
have the right to decide for themselves how they want to collect their 
revenues without interference from the federal government.
  In closing, I would like to thank the distinguished ranking member of 
the Ways and Means Committee, Mr. Rangel, for his support of this 
important provisions, which my friend, Congressman Brian Baird, and I 
have been working so hard to enact. We have an opportunity to restore 
fairness and equity to the tax code in this Congress without making the 
tax code more complex and without abandoning our fiscal discipline.
  We say we want a fair tax structure. We say we want tax reform. We 
say we want to give our citizens power over their own lives. We say we 
want to allow states to make their own decisions. Let's take this 
chance to do something and not just say something about tax equity.
  I urge my colleagues to support the substitute amendment and 
reinstate the sales tax deduction.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Collins), another Member of the Committee on Ways and 
Means.
  Mr. COLLINS. Mr. Speaker, I thank the Chairman for yielding me this 
time.
  Mr. Speaker, several months ago, Congress passed the most important 
legislation we will pass in the 106th Congress: the budget resolution. 
It is a blueprint of our agenda. The policies we will implement to 
strengthen national defense, return local control and excellence to 
education, and protect Social Security. The Financial Freedom Act 
contains the revenue provisions of that blueprint.
  The chairman of the Federal Reserve, Alan Greenspan, has been 
mentioned several times during this debate. Earlier this year, he did 
appear before the Committee on Ways and Means. He suggested that the 
best thing that we can do is let the surpluses grow. That is exactly 
what we are doing. The budget resolution sets aside 100 percent of the 
payroll taxes and all of the surplus accruing in the Social Security 
Trust Fund to ensure long-term solvency, and the lockbox legislation 
ensures that growth.
  The second thing Chairman Greenspan recommended in order to maintain 
strong economic growth in this country was to further reduce the 
capital gains tax rate. He also said we should reduce marginal income 
tax rates. Doing so reverses actions taken by the President and the 
previous majority in Congress in 1993 when they increased the number of 
income tax brackets from 3 to 5. The Financial Freedom Act accepts 
Chairman Greenspan's advice by reducing marginal rates so that we will 
increase savings and investment and create more jobs.
  The Chairman offered a third piece of advice, which is also in the 
budget resolution: no new Federal spending. That is not to say that we 
should not reprioritize or even create a new program, if needed. But no 
overall increases in spending. The budget resolution follows that 
advice.
  Chairman Greenspan's advice is good common sense that will continue 
economic growth and preserve the low interest rates that we enjoy today 
which have benefited every family and every working person across this 
country.
  Mr. Speaker, as a part of the overall blueprint, this tax bill is 
good common sense tax policy, and I strongly urge its passage.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
California (Ms. Woolsey).
  Ms. WOOLSEY. Mr. Speaker, the Republican Party's risky tax plan is a 
threat to our economy, and it is a failure from the start. These are 
the same folks who told the country in 1993 that the Democratic budget 
would destroy the economy, so they did not vote for it. Not one of 
them. They did not vote for a budget that has resulted in the best 
economy in decades.
  Now, they have a tax plan to undo the good works that we did in 1993; 
a plan that lavishes cuts on the most wealthy 1 percent of the Nation, 
but does not pay down our national debt and does not secure our Social 
Security nor Medicare.
  This bad bill gives the top 10 percent of taxpayers two-thirds of the 
tax benefit. This is outrageous. So again, we must ask, who is taking 
care of our children? Who is taking care of our retirees? Who is taking 
care of our veterans? Because we know who is taking care of 
millionaires and billionaires.

[[Page 17250]]

  Mr. Speaker, vote for the Democratic tax bill substitute; vote for 
American values.
  Mr. ARCHER. Mr. Speaker, I yield 4 minutes to the gentleman from 
California (Mr. Thomas), another respected member of the Committee on 
Ways and Means.
  Mr. THOMAS. Mr. Speaker, this truly is a sad day for America. The 
once great Democratic Party is reduced to: ``We can't.'' However, there 
is hope, because the new Republican majority is showing how ``we can.''
  The Democratic leader had a quote which said, ``A massive tax cut 
that encourages consumption would not be good economic policy.'' Well, 
we happen to agree with that quote. As a matter of fact, the Republican 
tax program is the most massive incentive for saving and investment in 
the history of the country.
  Our tax plan targets savings and investments for individuals, for 
small business, for international corporations, for farmers, for 
families. It is the sum and substance of the Republican philosophy: You 
do for yourself what you can do. Only then should government step in.
  The Democratic leader said that ``the Democrats' tax plan was 
conditioned on saving Social Security and Medicare.'' You heard the 
chairman of the Subcommittee, Mr. Shaw, on Social Security and the 
chairman of the full committee, Mr. Archer, have a plan certified by 
the trustees of the Social Security system that our Social Security 
plan saves Social Security for all time. All we have to do is pass it.
  The President has talked about a Medicare program. The Congressional 
Budget Office has now analyzed the meager information that has been 
given by the administration to the Congressional Budget Office. We know 
at least this, surprise: The President understated his prescription 
drug program by $50 billion.

                              {time}  1245

  The President overstated his savings to the Medicare system by about 
$16 billion. Remember, it was the Republican majority, after every 
opportunity was available to the Democrats since 1965, but it was only 
after the Republicans became the majority that we added the preventive 
and wellness care package that was absolutely essential to Medicare, 
increased mammography tests, prostate cancer detection and treatment, 
diabetes detection and treatment, osteoporosis exams, critical in 
senior women. Those were only added after Republicans became the 
majority.
  Republicans have a provision for deductibility of prescription drugs 
in this tax package, tied to the requirement that we improve and 
preserve Medicare, conditioned on real behavior, exactly the same thing 
for the across-the-board tax cut tied to the performance of the economy 
in improving our debt. We reward performance.
  The Democrat leader concluded his speech by saying, ``Do not repeat 
the mistakes of the past.'' Well, the Democrats were the majority in 
this House for 40 years. I can assure the Democrat leader we are not 
going to repeat the mistakes of the past. We are not going to do what 
they used to do with various tax bills. There is no smoke and those are 
no mirrors in our bill. Today, sadly the party of that minority leader 
says we can't. Today, the Republicans say, we can. We can save Social 
Security. We can improve and preserve Medicare. We can give some of the 
taxpayers' hard-earned money back, but most importantly, we can build 
the economy. Today's Republicans say we can for today's Americans and 
most importantly for tomorrow's as well.
  This is an exciting day for America, an exciting day for the House of 
Representatives. We can.
  Mr. RANGEL Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, when the Republicans talk about sensitivity and caring, 
they are certainly far more effective when they bring those cartoons to 
the floor.
  Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. 
Doggett), a member of the Committee on Ways and Means.
  Mr. DOGGETT. Mr. Speaker, indeed it is amazing today that Republicans 
who tell us we ``cannot'' when it comes to affording prescriptions for 
seniors, we ``cannot'' when it comes to holding managed health care 
insurers accountable; but they now tell us we ``can'' have what is 
really the ``Financial Freedom from Reality Act,'' a near trillion 
dollar tax cut where they choose party loyalty over fiscal sanity. 
Instead of tax fairness for the middle class, they propose to 
jeopardize our long-term prosperity, Medicare and Social Security.
  This is a House that has done so very well at doing so very little 
this year. Of course the Republican leadership had to engage in 
desperation tactics on this bill. They are desperate for anything that 
would mask their many failures and continued refusal to schedule 
meaningful action on the major issues that truly concern American 
families.
  There is no $3 trillion surplus. $2 trillion is committed to assure 
the solvency of Social Security for the coming decades. The other $1 
trillion is based on false assumptions that are as unreliable as a 10-
year weather forecast.
  Further, they forget the advice of Federal Reserve Chairman Alan 
Greenspan, who when asked about their 10 percent across-the-board tax 
rate cut said he rejected it; he flatly rejected it in favor of 
building up the surplus to pay down the debt.
  There is one other matter, and that is the matter of tax fairness, 
because I think most Americans are willing to pay their fair share, but 
they resent the high rollers cheating and gaming the system while 
honest taxpayers have to make up the difference. We must help law 
enforcement close loopholes, eliminate sham transactions, and stop tax 
shelter hustlers.
  These tax shelter hustlers even commanded the attention of Forbes 
Magazine, known as ``the capitalist tool,'' because they do a 
disservice to this country and the practice of accounting. Republicans 
say closing tax loopholes for their corporate shelter buddies is a tax 
increase. We say it is an opportunity to provide more tax relief to 
middle-class Americans. We say these tax-and-borrow Republicans are 
trying to borrow more money to give more tax breaks to those special 
interests, who are cheating and gaming the system.
  We have the courage to take on the special interests. They have 
demonstrated once again they are here to serve the special interests.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio 
(Mr. Portman), another respected member of the Committee on Ways and 
Means. The committee is a lot bigger than it used to be, Mr. Speaker.
  Mr. PORTMAN. Mr. Speaker, since the previous speaker brought up Alan 
Greenspan, let me just say what Alan Greenspan said before our 
committee in testimony in January of this year. He said, and I quote, 
``If we have to get rid of the surpluses, I would far prefer reducing 
taxes than increasing spending, and indeed, I do not think it is a 
close call,'' end quote.
  Mr. Speaker, I want to commend the gentleman from Texas (Chairman 
Archer) for putting together what I think is a balanced, thoughtful 
approach to give at least some of the money back to the hard-working 
taxpayers that created the $3 trillion surplus in the Federal 
Government's treasuries that is projected to happen over the next 10 
years.
  We have heard a lot today about across-the-board tax relief that is 
going to help every single family in America. We have heard about 
eliminating the marriage penalty; but let me mention a couple of other 
great provisions in the Archer bill, such as reforming unfair tax rules 
like the interest allocation rules that are driving U.S. companies and 
jobs out of this country.
  Let me mention something else that is very important, which is the 
most comprehensive pension reforms in over a generation. That is in the 
Archer bill. It is going to give millions of Americans the ability to 
prepare for their own retirement, save more for their own retirement.
  At a time when 60 million Americans, Mr. Speaker, do not have a 
pension in

[[Page 17251]]

this country, we expand 401(k) opportunities; we expand the traditional 
defined benefit plans; we make pensions more portable so workers can 
take their pensions from job to job. We allow a catch-up provision to 
let people save even more, people who are over 50, primarily focused on 
working moms so they can save more again for their own retirement.
  We have heard a lot today from the other side. It is getting kind of 
tiresome, about tax cuts for the rich. Seventy-seven percent of pension 
participants make less than 50,000 bucks a year. When we strengthen our 
pension system, we are helping the Americans who need it the most.
  Though it has been a bipartisan effort from day one, unbelievably 
these pension reform provisions are not in the Democrat substitute that 
we are talking about right now. I do not know what to say about that, 
except I can say that Republicans are committed to strengthening 
pensions, and I hope we can pass this legislation to do it. It is just 
another example of why the Archer bill is not an irresponsible but it 
is a responsible, balanced approach to tax relief.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Michigan (Ms. Rivers).
  Ms. RIVERS. Mr. Speaker, I will not be voting for any of the 
proposals that we are going to be considering today. Why? Because they 
all spend money we do not yet have. If one follows the headlines of the 
last few weeks, they will find the surplus repeatedly being referred to 
as ephemeral, shaky, a castle in the sky, a mirage, an illusion. Why?
  Well, according to the Washington Post in their article, The Surplus 
Illusion, the reason is to make the numbers come out even when they 
passed the Balanced Budget Act in 1997, Congress agreed to cut in the 
future, without ever specifying how, a large category of Federal 
spending that would have to be cut by 22 percent in real terms, 20 
percent in real terms.
  As I read this and thought about it, it seemed familiar to me 
somehow. So I went back through my books, and I found what I was 
looking for. I found a quote that said, ``there was not a hint, not one 
scintilla, about what this fabulous giving actually meant, that tens of 
millions of Social Security recipients, students, farmers, government 
pensioners and other beneficiaries of Federal largesse watching that 
night received no warning that their benefits would have to be deeply 
and suddenly slashed in order to keep the budget equation whole.''
  1981 all over again. Do not repeat the past mistakes.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Florida (Mrs. Fowler), a member of the Republican leadership.
  Mrs. FOWLER. Mr. Speaker, this debate today comes down to a very 
simple question: Whose money is it? Some here are arguing details, but 
in reality it all comes down to whether one thinks this is the 
government's money or the American people's money. To me, that is an 
easy answer, and my constituents tell me every time that I talk to them 
it is the American people's money.
  When Republicans took the reigns of Congress in 1995, we made a 
solemn promise to the American people to return our government to a 
government of the people, by the people, and for the people. The only 
way to accomplish this is to return to the American people control over 
their lives and over their money.
  That is why we committed to not only locking away 100 percent of what 
Americans pay into Social Security and Medicare for only Social 
Security and Medicare, but also returning money to hard-working 
Americans and at the same time we will pay off $2 trillion in public 
debt, more than twice what we offer in tax relief.
  This bill returns dollars and decisions home. I urge support of the 
bill.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Washington (Mr. Baird).
  Mr. BAIRD. Mr. Speaker, I was watching TV last night as the debate 
occurred, and I did that because I wanted to ask myself how would the 
American people decide if they were watching this debate? And I can 
say, if someone lives in certain States, the decision should be 
absolutely clear. If someone lives in Washington, lives in Tennessee, 
Florida, Texas, Nevada, South Dakota, or Wyoming, the choice is clear: 
they will vote for the Democratic substitute.
  The reason is this: the Republican tax bill sells taxpayers in those 
States out. It sells them out so they can give tax breaks to other 
people but it forces those in Washington, in Tennessee, in Florida, in 
South Dakota, and Wyoming, it forces them to pay higher taxes because 
the Republicans refuse to let them deduct their sales tax, which should 
be their right, which the Republicans took away in 1986.
  If people care about tax fairness, which the Democrats do, and we 
talked to the Republicans, we went before the Committee on Ways and 
Means and we asked them, restore tax fairness for these States; let 
people deduct either their sales tax or their income tax. And the 
Republican Party refused. The Democrats put it in their substitute. The 
Democratic bill respects the rights of those people, and it is the 
right bill to support.
  Mr. ARCHER. Mr. Speaker, may I inquire as to how much time is 
remaining on each side?
  The SPEAKER pro tempore (Mr. Thornberry). The gentleman from Texas 
(Mr. Archer) has 14 minutes remaining. The gentleman from New York (Mr. 
Rangel) has 19 minutes remaining.
  Mr. ARCHER. Mr. Speaker, I yield 4 minutes to the gentleman from 
Texas (Mr. DeLay), the respected whip of the House of Representatives, 
and my neighbor in Texas.
  Mr. DeLAY. Mr. Speaker, this is a proud day for me, particularly to 
watch one of my heroes, the gentleman from Texas (Mr. Archer), who is 
Chairman of the Committee on Ways and Means, to bring such a great bill 
to this floor, that shines on his ability and his strong, strong 
advocacy that the American family should keep more of the hard-earned 
money that they make.
  It is just really a pleasure to be on the floor with the chairman and 
we greatly appreciate him bringing this bill.
  Mr. Speaker, I rise today in strong opposition to this substitute tax 
amendment. The average American family needs tax relief, not a tax 
increase. Overall, this substitute raises taxes. They are so 
unaccustomed to cutting taxes that the do-nothing Democrats cannot even 
write a tax bill that cuts only taxes, they have to raise taxes.
  The Joint Committee on Taxation has determined that this do-nothing 
Democrat amendment would actually increase taxes by $4 million. 
Amazing. This tax burden means that working Americans are forced to 
spend more time at work and less time with their families just to pay 
the government tab.
  Typically, the average American family today pays more in taxes per 
year than it spends on food, clothing and shelter combined, combined. 
That is flatly outrageous; and we want to change it, because the 
Republicans think that the government should do more with less. 
Republicans think that American families need relief from overtaxation, 
but typically our opponents kick and scream and charge that it is 
irresponsible to return money to those who earned it in the first 
place. They want to spend the American families' money.
  I think we should look back at the past a little bit to recall how 
responsible the Democrats were when they were in the majority.
  Today, Republicans are proposing tax cuts, but when the Democrats 
were in the majority, we had nothing but tax increases. Today, 
Republicans have forced a balanced budget; but when the Democrats were 
in the majority, we had nothing but deficits as far as the eye could 
see.

                              {time}  1300

  Today, Republicans are locking up every dime of Social Security taxes 
in a lockbox. But when the Democrats

[[Page 17252]]

were in the majority, every cent of those Social Security taxes were 
spent every year on new big-government programs.
  Simply put: The claim that the Democrats can be fiscally responsible 
just does not correspond to the reality of history, and the American 
people know it.
  Today, the do-nothing Democrats are offering a plan that has some 
very narrow and some very targeted tax cuts, but even these are 
contingent on special reforms on Social Security and Medicare, reforms 
which they have not even presented a plan for. Their alleged tax cuts 
will never happen because they tie them to legislation that they know 
does not and will not exist.
  The Democrats are big-government addicts. They just cannot break the 
old habit of tax and spend. Overall, their tax plan raises taxes, 
raises taxes, while the Republican plan gives money back to every, 
every, American family. The time has come to say enough is enough, 
America. Americans deserve tax relief, and we are going to start giving 
it to them today.
  Mr. Speaker, even when they try to come up with a tax cut bill, the 
Democrats end up raising taxes. I urge all of my colleagues to vote 
against this substitute.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I was just waiting for somebody to point out that there are revenue 
raisers in our bill. I did not think it would be the distinguished 
majority whip. He says that we raise $4 million. Oh no, $4 billion is 
the figure that he is looking for.
  And how did we do it? We did it by closing the Republican loophole 
for those corporate tax shelters that we are talking about. And we will 
do it again and again and again. We are not in business to protect 
those people who abuse the system.
  Oh, I know, one day, someday, the Republicans want to pull the Code 
up by the roots. Well, the Republicans have been in the majority for 5 
years, and instead of pulling up the Code by the roots, they fertilize 
it by these tax shelters.
  Mr. Speaker, I yield 1 minute to the gentleman from New Jersey (Mr. 
Pascrell).
  Mr. PASCRELL. Mr. Speaker, I thank my colleague for yielding me this 
time.
  After 6.5 years of putting our fiscal house in order, the Republican 
leadership has put forth a tax package that returns us to the days of 
irresponsible tax schemes and ballooning deficits. This leadership tax 
bill fails our seniors, fails our students, our military, our veterans, 
and our hard-working middle-income families.
  Sixty-five percent of the tax relief, so-called, goes to the top 10 
percent of the taxpayers, and over half goes to the top 5 percent. The 
Congressional Budget Office, whose numbers are always touted by the 
other side, says their plan even spends more than non-Social Security 
surpluses, $24 billion more.
  The Republican lockbox for Social Security has Jesse James as the 
security guard. In contrast, the Rangel substitute strengthens Social 
Security and Medicare, contains $250 billion in tax cuts aimed at those 
who need the help, including child tax credits, marriage tax relief, 
long-term care for the elderly and school construction funding.
  It is an interesting fact of life that when this tax cut they talk 
about really balloons is when the baby boomers are going to be eligible 
for Social Security. Who is going to pay for this tax cut?
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Maine 
(Mr. Allen).
  Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, this Republican tax cut plan is a bonanza for the rich 
and privileged. The GOP rationalizes this giveaway by saying that 
government spending is inherently evil. What they are really saying is 
the middle class in this country are on their own. They have a lot of 
explaining to do to the American people if these tax cuts ever take 
effect.
  The majority whip here said Democrats support big-government 
programs. Well, one of those big-government programs is Head Start, and 
their plan will cut 400,000 kids out of the Head Start program in the 
next 10 years. One of those programs is the Veterans Administration 
health care for our veterans, and they will cut 1.5 million veterans 
out of health care that they are getting now. One of those plans is 
Medicare. One of them is Social Security. And this plan does absolutely 
nothing to preserve and protect Social Security and Medicare.
  They will have to explain to the American people why, with the best 
chance in a generation, they do nothing to pay down the national debt. 
Mr. Speaker, this reckless tax break must be defeated and the 
Democratic substitute passed.
  Mr. ARCHER. Mr. Speaker, may I again inquire how much time is 
remaining?
  The SPEAKER pro tempore (Mr. Thornberry). The gentleman from Texas 
(Mr. Archer) has 10 minutes remaining, and the gentleman from New York 
(Mr. Rangel) has 16 minutes remaining.
  Mr. ARCHER. Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, we know where the money for this tax cut is 
coming from. More than two-thirds of this tax cut has been transferred 
from programs that were put on a starvation diet by the 1997 Balanced 
Budget Act, which included hospital cuts, cuts to home health care and 
visiting nurses, and cuts in Medicare benefits.
  The Republican moderates who are going to vote for this bill know it 
is a bad bill. They know it is bad for the country. But they are going 
to vote for it anyway, with their eyes wide shut. Today, we are 
learning what the real definition of a Republican moderate is. It is an 
extremist who feels guilty about it.
  This bill is a backloaded, budget-busting, billionaire bonanza. Yes, 
we have a surplus, but if we vote for this tax cut, we will be plunging 
the United States Congress into a deep moral deficit.
  We owe this money to people on Medicare, we owe it to people on 
Social Security, we owe it to people on home health care, we do not owe 
this money to the wealthiest 1 percent in our country.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Rhode 
Island (Mr. Weygand).
  Mr. WEYGAND. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise in support of the Democratic substitute we have 
crafted together.
  Mr. Speaker, here on the Democratic side and on the other side we 
will hear a lot of rhetoric about the complexity, the smoke and 
mirrors, and it will go back and forth. But true to what the bill is 
all about, the underlying bill, 1 percent of the people in my district 
are going to receive a $30,000 tax cut, and those people in my district 
who make less than $37,000 a year are going to get less than $500 a 
year.
  Let us talk about real people. Paul and Jane Smith are 70 and 66 
years old. They both retired 4 years ago but are back working, working 
part-time to pay for prescription drugs after open-heart surgery. These 
are real people who will not benefit from the Republican tax cut. These 
are real people that pay $8,300 a year in prescription drug coverage 
that they do not have in Medicare or in their health care. The 
Democratic substitute would go to reforming Medicare to give them some 
benefit.
  The choice is clear: Do we on this floor today vote for the rich and 
famous or for the real Americans throughout this country who need a tax 
break? Vote for the Democratic alternative.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from North 
Carolina (Mr. Price).
  Mr. PRICE of North Carolina. Mr. Speaker, ``Katy bar the door. Spend 
every cent before you put a penny in your pocket.''
  This Republican tax bill is the height of fiscal irresponsibility and 
economic

[[Page 17253]]

folly. I am proud to support the carefully crafted Democratic 
substitute, balanced among the goals of debt reduction, Social Security 
and Medicare solvency, and meeting our pressing defense and domestic 
obligations. It contains a prudent, affordable tax relief package 
targeted to the hard-pressed families and communities that need it 
most, and it gives us the flexibility to ride out the storm if these 
sunny projections do not pan out. It will let us sustain our economic 
health and keep our fiscal House in order.
  Now, why would anyone want to oppose an $800 billion tax cut? Well, 
let me give my colleagues a few reasons, and I will go until my time 
runs out and put the rest in the Record. 
  Reason number one. It bets the store on the accuracy of 10-year 
surplus projections. It seems the party of ``rosy scenarios'' has 
learned nothing.
  Two. It contains not one dime for extending the solvency of Medicare.
  Three. It foregoes hundreds of billions of dollars in debt reduction 
and interest savings.
  Four. It almost certainly will lead to higher inflation and higher 
interest rates, thus canceling out the supposed benefits of lower 
taxes.
  Five. It leaves no room in the budget for the investment we must make 
in military pay and readiness, in health care for our veterans, in 
building highways and transit, in health and other critical research, 
and in improving public education. We are already struggling to meet 
these obligations and the Republican bill would leave us unable to even 
adjust present expenditures for inflation.
  Six. According to the Treasury Department, it concentrates two-thirds 
of its benefits on the wealthiest ten percent of our population. 
Citizens for Tax Justice estimates that the tax windfall to the 
wealthiest one percent would equal the benefits to the lower 90 
percent.
  Seven. It locks in a tax cut that gives us limited flexibility if 
these projections are wrong. It could force us to divert the Social 
Security surplus. It would almost surely spell fiscal ruin in the 
second ten years when its cost would balloon to almost $3 trillion.
  Eight is actually multiple choice. Choice A is for those who believe 
the trigger, which cancels the across the board cut if the projections 
are wrong, is on the level. This will create year-to-year uncertainty 
in the tax code. Taxpayers won't know even what the tax rate is until 
the final budget figures are published by the Treasury. Choice B is for 
those who think the trigger is a fig leaf for Republican moderates to 
hide behind in order to fold their principles once again to the 
conservative wing of their party. Passing such an artifice, such a sham 
as a part of a tax bill is beneath this House.
  Mr. Speaker, I urge my colleagues to vote for the Rangel substitute.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Dooley).
  Mr. DOOLEY of California. Mr. Speaker, I rise in support of the 
Democratic substitute as well as the Democratic motion to recommit, and 
I support these alternatives to the risky Republican proposal because 
they embrace the philosophy and values that are important to American 
families.
  First and foremost, they are fiscally responsible. For the last 30 
years we have a history of running annual deficits. I am very proud 
that this year we have turned the corner and we are actually running a 
surplus. And I am also very proud that over the next 10 years, we can 
project to run a $1 trillion surplus. But the American families, as 
well as those of us in Congress, should know well that it is not 
responsible, after 30 years of running a deficit, with 1 year of a 
surplus under our belt, and without having any money put in the bank, 
that we would embark upon a risky path of a $1 trillion tax cut.
  It is a risky proposition that we would take this path before we have 
even begun to pay down any of the national debt that we have developed 
over the last 30 years. It is a risky proposal to go down this path 
before we have protected Medicare and Social Security.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from New 
York (Mr. Meeks).
  Mr. MEEKS of New York. Mr. Speaker, I thank the gentleman for 
yielding me this time, and I rise today in support of the Democratic 
substitute sponsored by the gentleman from New York (Mr. Rangel), and I 
commend him for the fine work he has done in crafting this substitute, 
for once again it highlights the difference between Democrats and 
Republicans. Democrats ``big tent''; Republicans ``small tent.''
  The Republicans' small tent fails to extend Social Security solvency 
and strengthen Medicare. The Republican tax cut, the small tent 
Republican tax cut, will require $23 billion in borrowing from the 
Social Security Trust Fund over the next 10 years. The Republican small 
tent would give 65 percent of the total tax cuts to the rich.
  The Democratic big tent thinks about those middle income Americans. 
The Democratic big tent thinks about the marriage penalty. The 
Democratic big tent thinks about the earned-income tax credit. The 
Democratic big tent thinks about how we can make our poor have a chance 
in this society so that they too can succeed.
  One thing we do know for sure; that in the Republican small tent this 
bill is so bad that if the moderates in the Republicans' small tent 
were left on their own, they too would vote for this bill.
  Vote in support of the gentleman from New York (Mr. Rangel) and the 
Democratic substitute.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Oregon (Ms. Hooley).
  Ms. HOOLEY of Oregon. Mr. Speaker, as an active and ardent proponent 
of meaningful and fair tax relief, I rise in support of the framework 
provided by the substitute amendment. This substitute bill best 
reflects the amount of tax relief that Congress can responsibly provide 
at this time without negatively impacting the economy. It is the only 
proposal allowing consideration that provides the majority of people 
the most tax relief.
  I am personally disappointed that my calls for greater death tax 
relief for family farmers and small business owners have not been 
adequately addressed, and I will continue to advocate for those. But I 
want a measure that gives real relief to all people; that will not 
bankrupt Social Security and Medicare; that pays down the debt and 
still fits within the confines of a solid budget projection.
  Fiscal discipline and common sense both tell us that we must provide 
targeted tax relief that helps families and fuels the economy engine, 
our economic engine of our Nation. I call again on the leadership to 
work with all Members to move forward to a tax cut bill that the 
majority of Congress can support. Please support the Rangel amendment.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Florida (Ms. Brown).

                              {time}  1315

  Ms. BROWN of Florida. Mr. Speaker, the Republicans practice what I 
call reverse Robin Hood, robbing from the poor and working people to 
give a tax break to the rich. I think this is illustrated in this 
Forbes Magazine headline.
  But today I want to talk about an issue that is very important to the 
people of my great State of Florida. Since the elimination of the sales 
tax deduction in 1986, the hard-working taxpayers in my State have been 
treated unfairly by the Tax Code. Because our State does not have an 
income tax, our residents are unable to deduct the same amount as 
taxpayers with identical income and financial profiles of other States 
and, therefore, pay a disproportionate share of Federal taxes.
  The language in this bill would simply allow taxpayers to deduct 
either their State income tax or sales tax using standard tables to 
determine their average sales tax deduction.
  The Rangel substitute is the only opportunity the residents of the 
State of Florida have to achieve tax fairness. I urge my colleagues to 
support the Rangel amendment.
  Mr. ARCHER. Mr. Speaker, I yield myself 1 minute.
  Mr. Speaker, throughout this entire debate, one thing is very, very 
clear. The Democrats again are fighting ferociously to keep the money 
of the workers of this country in Washington.
  It is nothing new. They will use every, every argument that has no 
connection to this tax reduction. If they

[[Page 17254]]

say it long enough, maybe they can make it stick. But there is a 
genuine difference between us that is very clear. The Democrats believe 
they know best how to spend money by spending it with Government. We 
believe the people know best how to spend their own money.
  What this debate is really all about is downsizing the power of 
Washington and upsizing the power of people. This could not have been 
made more clear when the President spoke in Buffalo the day after his 
State of the Union address, and he said to the people, assembled there 
I believe in a hockey arena, We could give you back part of this 
surplus. That would be an option. But if we did, how would we know that 
you spend it right?
  There is the difference, Mr. Speaker.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Stenholm) someone who made a great contribution to our 
substitute and to the motion to recommit.
  Mr. STENHOLM. Mr. Speaker, I agree that this is a defining debate and 
a debate about priorities.
  The question is are we going to stop the generational mugging of our 
children and grandchildren? Are we going to give them a stronger or a 
weaker America?
  Our priorities today we believe, in support of the recommittal that 
the gentleman from Tennessee (Mr. Tanner) will give in a moment, should 
be pay down the national debt really, using non-Social Security 
surpluses to do it, deal with Social Security and Medicare.
  Contrary to what the gentleman from Florida (Mr. Shaw) said a moment 
ago, there are Democrats who have proposed a Social Security fix. And 
contrary to what the gentleman from Florida (Mr. Shaw) and the 
gentleman from Texas (Mr. Archer) do in theirs, we do not use the same 
$1 trillion in proposed or projected surpluses to do it.
  And let me correct, $792 billion in the tax cut. But the gentleman 
from Texas (Mr. Archer) conveniently forgets the $140 billion we are 
going to have to pay in interest on that debt.
  The Republican bill does not reduce the burden on future generations, 
and that is what I am most concerned about. Simply using the Social 
Security surplus to reduce debt held by the public does not reduce the 
total national debt, it just shifts the debt from one part of the 
ledger to another.
  In fact, under the bill as proposed today, the debt in this country 
will go from $5.6 trillion to over $5.8 trillion over the next 5 years 
under the plan in which we are debating. And no one can contradict me 
on that because that is in their bill. The bill leaves no room to 
address other needs.
  I completely accept the gentleman from Texas (Mr. Archer) the 
chairman of the committee. He is very sincere. And I mean no 
disrespect. He is perfectly willing to cut 27 percent from agriculture 
over the next 5 years. He is perfectly willing to spend less on defense 
than the President has proposed. He is perfectly willing to spend less 
on rural hospitals and allow rural hospitals all over to close. He is 
perfectly willing to do that, and I understand that. And there are a 
few others, but I do not think a majority are.
  I voted for the tax cuts in 1921. We based that decision on 
projections on the promise we would cut spending. The result was $3 
trillion more in debt. We cannot afford to take another risky river 
boat gamble on projections. We cannot afford to take 10- and 15-year 
projections and spend that money like it is real money I do not 
believe.
  The motion to recommit will provide an opportunity to go back and 
have a bipartisan budget approach. Let me remind our colleagues today, 
the motion to recommit is based on the Blue Dog budget that was 
supported by a majority of Democrats and 29 Republicans. Members on 
both sides of the aisle that said that they agree with the approach of 
paying down our national debt, dealing with Social Security and 
Medicare, and then dealing with tax cuts.
  Voting for the recommittal would allow us to go back and work to put 
together a fiscally responsible bipartisan budget that is based on 
these principles. I hope my colleagues who once voted for this will 
again seriously consider, because that is the way we can responsibly 
deal with our children and grandchildren.
  This tax bill, if we vote for the majority approach, will explode the 
national dealt in the second 10 years. At precisely the time we have to 
come up with a Social Security fix, this bill will increase the 
national debt by $4\1/2\ trillion. It is irresponsible. It needs to be 
defeated. Vote for the motion to recommit.
  Mr. ARCHER. Mr. Speaker, I yield 4 minutes to the gentleman from 
Illinois (Mr. Hastert) the Speaker of the House of Representatives.
  Mr. HASTERT. Mr. Speaker, I thank the chairman for yielding me the 
time.
  Mr. Speaker, I rise in support of the Financial Freedom Act and in 
opposition to the Rangel substitute.
  This substitute clears up any confusion on where our friends, the 
Democrats, stand on tax relief.
  According to the Congressional Budget Office, the Democrat substitute 
actually increases taxes by $4 billion. We have the largest surplus in 
history. The Democrat substitute raises taxes by $4 billion.
  Now, we have to give our friends on the other side of the aisle 
credit. They remain committed to larger Government and bigger spending. 
What we have here is a basic difference in philosophy, a philosophical 
difference.
  We can do what the Democrats want. They want to spend more of the 
surplus, including a portion of the Social Security surplus, on more 
Washington bureaucratic programs. They believe that more Washington 
spending is responsible.
  The President has said that giving this money back to American people 
is risky because he does not know how the American people will spend 
their own money. I think the President is wrong. It is not risky to 
give the American people back the very money that they have earned.
  We have a better plan. First we lock away the Social Security surplus 
so it could be spent only on retirement security. Over 10 years, we put 
$2 away for retirement security for every $1 of tax relief. But over 5 
years, the first 5 years, we put away $800 billion in debt relief and 
$156 billion in tax relief, almost a six-to-one ratio in debt relief.
  Second, we allow Government to grow slowly. In fact, the Government 
will increase its spending by more than $300 billion in the next 10 
years under this plan.
  This means we can keep funding programs that are important to the 
American people while we work to cut wasteful Washington spending.
  Finally, we give some surplus back to the American people by 
targeting unfair tax parts of our Tax Code.
  We think it is unfair to tax marriage, so we reduce the marriage 
penalty. And where did the marriage penalty come from? It came from tax 
writers on this side of the aisle over the last 30 years. It is time to 
change that.
  We believe it is unfair to tax people when they die, so we phase out 
the death tax so that family farms and small family businesses can move 
from generation to generation.
  We believe it is unfair to tax people who want to save for their 
children's education, so we include education savings accounts in this 
bill.
  My colleagues, we believe it is unfair to tax people at the highest 
rate since the great world war of World War II. We include a 10-percent 
across-the-board tax cut that phases in over 10 years.
  Our tax relief proposal is responsible and it is balanced, and it 
will keep the budget balanced. It will keep the economy growing, and it 
will return power back to the American people.
  Today the House has a simple choice. We can give some of the surplus 
back to the people, as we advocate, or we can return to the tax-and-
spend policies of our friends on the Democratic side of the aisle.
  I urge my colleagues to make the right choice. Vote against the 
Democrat substitute. Vote for responsible tax relief. And vote to give 
some of the money back to the American people that go to work every day 
and punch a time clock and commute to work and earn that money.

[[Page 17255]]


  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the reason the Republicans think that they know what is 
in the Rangel substitute is because we gave it to the Committee on 
Rules and we did not change it in the middle of the night. So they have 
had an opportunity to read it and they read parts of it as they will.
  Oh, no, we are talking about a $250-billion tax cut. But we are 
talking about it being contingent on the certification that we repair 
Medicare and Social Security.
  Now, if what the majority is saying that they do not intend to do 
anything with Medicare and do not intend to do anything for Social 
Security, the one thing that we did, not that we trust them that much, 
is to assure that the provisions for research and development and job 
opportunities be continued and we knew we had to pay for those. And 
where did we find the money to pay for them?
  We went to Forbes Magazine. We went to the General Office of 
Accounting and found out who was violating the corporate laws and we 
got the corporate shelters people that have been hustling off of this 
IRS code that they are trying to pull up by the roots and we raised the 
$4 billion by closing those loopholes.
  I tell my colleagues this: Even if they did nothing, we would still 
go back to trying honest, equitable tax code and not give away money to 
people who do not deserve it.
  Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. 
Obey).
  Mr. OBEY. Mr. Speaker, there are four problems with the bill before 
us.
  First of all, it does nothing really to strengthen Social Security. 
It does nothing to strengthen Medicare. Two- thirds of the benefits go 
to the richest 10 percent of people in this society, and they are paid 
for by surpluses that are predicted but will not materialize because 
they assume that, in the end, this Congress will cut education and 
health care and veterans and environment by over 20 percent in real 
terms and that this Congress will not restore badly needed funds to 
Medicare and to home health care.
  If that is not a public lie, it is at least a huge public fib.
  I was here in 1981. I saw this Congress whoop through the budget 
then, making the same kind of promises it is making today about 
surpluses as far as the eye can see.
  Instead of that, what that package did was dig us into the biggest 
deficit hole in history. It has taken us 18 years to dig out those 
deficits. And now what does this bill do? It gives us a chance to do it 
all over again.
  You have institutional amnesia. Vote against the bill and for the 
Rangel substitute.

                              {time}  1330

  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. John).
  Mr. JOHN. Mr. Speaker, since last night and all during the day today, 
we have heard a lot of rhetoric and a lot of numbers being tossed 
around; who could one-up the other.
  But what the real question here is, what the real question that we 
are embarking on today is about our debt and our obligations. Those are 
two words that you and I in our business, in our household we deal with 
every day. The interest that we pay on our debt is 17 percent of our 
budget. $5.9 trillion.
  The best gift that I could give financially to my two twin sons Hayes 
and Harrison is to pay down that debt. We pay $280 billion in interest 
on that debt. That is our debt. Our obligation is Social Security and 
Medicare. Those programs have been good, they are going to be here. 
This is our opportunity to do it.
  The Blue Dog budget that we have talked about so often does those two 
things and provides 25 percent of the surplus for targeted tax cuts. 
That is the common sense way to go about handling the surplus. That is 
the way we should proceed tonight.
  Vote for the motion to recommit.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Illinois (Mr. Davis).
  Mr. DAVIS of Illinois. Mr. Speaker, I rise in support of the Rangel 
substitute and in opposition to the Republican Robin Hood in reverse, 
take from the poor give to the rich, Marie Antoinette-inspired bill.
  Mr. Speaker, the Republican plan is an instrument of destruction. Not 
only does it cut taxes for the wealthy but it cuts the heart out of 
poor people who need LIHEAP, senior citizens who need Medicare to help 
pay for their prescription drugs, babies who need milk, mothers and 
children who need food, communities that need policemen to cut crime.
  These cuts are not good for America and will cause our people and our 
communities to bleed. I have been told, Mr. Speaker, in the community 
where I live, when you cut, cut, cut, somebody is going to bleed, and 
the blood of the American people will be on the hands of those who held 
the knife.
  I will not cut the heart out of the people. Vote for the Rangel 
substitute.
  Mr. RANGEL. Mr. Speaker, I yield myself the balance of my time.
  The Republicans have been very creative and political in putting 
together their document. But before they even put it together, Chairman 
Greenspan said, the best thing that you can do for this great 
democracy, this great republic, this great economy, is to reduce the 
debt.
  Now, you have come up with this cockamamie do not cut back the taxes 
unless the interest rates are dropping. Mr. Greenspan says do not help 
him.
  For God's sake get rid of this. You know it is going to be vetoed. 
Let us try to create a climate today where Republicans and Democrats 
can work together, where we can go to the President and negotiate 
something within a quarter of a trillion dollar tax cut, where we can 
reduce the Federal debt.
  But the most important thing is that you and I can go home and let 
the American people know that we fulfilled our commitment to the 
generation that is coming with Social Security and with Medicare.
  Now, we know you do not like these programs, but we know that the 
American people want you to support it. So forget your pride, forget 
the fact that these are Democratic proposals, and let us try to work 
together as a United States Congress and not like Republicans and not 
like Democrats.
  Mr. ARCHER. Mr. Speaker, to close the debate on our side, I yield the 
balance of my time to the gentleman from Texas (Mr. Armey).
  Mr. ARMEY. Mr. Speaker, the great privilege that we have as a 
generation of Americans is that we have the opportunity to be the 
bridge between two great generations of Americans. We begin by honoring 
our mothers and our fathers, that generation of Americans that saved 
the world for freedom and democracy, and we provide a bridge from there 
heroism to our own children, those bright, young, creative engines of 
prosperity that are turning prosperity into our lives as a result of 
that freedom they have.
  I want to take a moment and thank my colleagues from my party in this 
body. I want to thank the Speaker for his leadership. I want to thank 
the gentleman from Texas (Mr. Archer) for his stewardship.
  Despite the fact that we have understood all through this year and it 
has been made clear on the front page of the Washington Post that the 
Democrats have had a strategy, ``We will do nothing for either of these 
two generations, we forgo any input into policy, we want these issues 
for politics,'' we have soldiered on.
  We have worked hard, we have had great debates between ourselves on 
these issues, and I am proud of the debates we have had. In none of 
these debates did we have people say, ``What's in it for me?'' The 
question is, how can we best serve our children's future as we honor 
our mother and our father?
  In doing that we have listened to our children. It has been our 
children, that great generation of workers and entrepreneurs, that have 
said, ``Take care of retirement security and Medicare security.''
  We have had our hands reached out across the aisle. We have reached 
down the avenue to the White House. We have said, ``Let's pull together 
a plan,

[[Page 17256]]

a long-term plan for Social Security and Medicare stability.'' We have 
been met with silence. When the President has tried to reach back, he 
has been met with chagrin from the Democrats in the House who said, 
``No, no, this is our political issue. We cannot be trifling with 
policy.'' So again we go alone.
  Our first step has been to honor these children by locking away, over 
the next 10 years, $2 trillion of their payroll taxes for retirement 
security and Medicare. That will pay down debt, and we will continue to 
work and hope that the do-nothing Democrats will reform their ways, get 
over their politics, get over themselves and come to work for this 
great generation of young people who are saying, ``Honor our grandma 
and grandpa, fix these systems, make it sound, do your duty.''
  Can we not get beyond our politics? No, they would rather argue and 
quarrel.
  Now, the gentleman from New York (Mr. Rangel) says, ``Oh, you 
Republicans, you're sneakier than me.'' Well, that is a generous thing 
to say. But I have to tell you, Mr. Speaker, I will not read the record 
of this debate as it comes from the Democrats in this debate because I 
have a longstanding personal tradition of not reading fiction.
  It is enough to quarrel. We should have differences of opinion. But 
this is the people's body and here we ought to put politics aside and 
deal with policy.
  They say we are irresponsible. They say we are reckless. That is not 
what the distinguished Senator from Nebraska, Senator Kerrey, war hero, 
has said. He said just yesterday, ``Cutting $800 billion when you have 
got $3 trillion coming in is hardly an outrageous, irresponsible 
move.'' Cutting $800 billion over the next 10 years when, over the next 
10 years, there will be $23 trillion, Mr. and Mrs. America, of your 
hard-earned earnings to come to this great Nation is hardly an 
irresponsible or outrageous move. No, indeed, it is a respectful move. 
It is your money. You earned it. You should not pay more than we need. 
And we should not need more than we do. And we should give it back and 
let you keep it.
  That is what they are fighting here. They are saying, ``Don't take 
that money and leave it in the hands that earns it. Give it to us.'' 
The President said, this President that raised taxes just a few years 
ago, ``We could cut your taxes and hope that you spend it wisely, but 
we don't want to take that chance.''
  Well, if you think you know better how to spend for me and my family, 
let me ask you, when was the last time you got your wife the right 
Christmas present? No, we will do better for ourselves, thank you. 
Leave our money in our pockets.
  ``We need big government programs,'' they say, more big government 
programs. Where is the service? They cannot even tell you what they are 
doing, they themselves.
  The President raised taxes and just a few weeks ago, the gentleman 
from Missouri (Mr. Gephardt), the minority leader, said, ``I'd be proud 
to raise taxes.'' Just a few days ago, he said, ``I think we ought to 
have a $200 billion tax reduction,'' and we thought they were going to 
offer one, but last night, not me, not the Speaker, not the chairman of 
the Committee on Ways and Means but the Congressional Budget Office 
evaluated their tax package, that they ask us to vote on right now.
  The gentleman from New York may say, ``I disagree that your package 
represents exactly what you say it represents,'' but he has always 
conceded it represents a tax cut, albeit he argues for only the rich, 
but he has never quarreled with the fact that we are offering here a 
reduction in the taxes of the hardworking men and women of America.
  Do not ask us to set that aside. Do not ask us to vote instead for 
that real tax reduction with which you disagree, the fiction of your 
substitute, which is judged by the Congressional Budget Office to be, 
no, not a tax reduction but a tax increase of $4 billion.
  When the gentleman from Missouri (Mr. Gephardt) said, on one hand, 
``I'd be proud to raise taxes'' and, on the other hand, ``I'm ready to 
lower taxes,'' I wondered whom was in fact the minority leader. Now, I 
know. The real minority leader is the one that brings to this floor to 
be voted on before the American people, on this day, as a substitute to 
our tax reduction, a $4 billion tax increase to add to the $23 trillion 
the government is already going to take from your children and my 
children.
  Let us vote that tax increase down and vote for our tax decrease. Let 
our children have a better job, more take-home pay, a happier, more 
well-educated family. And when our children die, let them give to our 
grandchildren all the fruits of their labor, none of which should be 
stolen from our grandchildren in the form of a death tax.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise to strongly support 
this amendment.
  The Trillion Dollar Tax Break and Deficit Act of 1999 is 
irresponsible legislation that reeks of political posturing. The bill 
relies on projections of future surpluses that America may never see. 
This bill would exacerbate the ills of our economy and would only 
extend the rich-poor gap that already plagues our country. This 
substitute would remedy many of the problems found in the original 
bill. This amendment recognizes that we should target those who need 
the most help, not those who are the most wealthy.
  Among the many reasons that I enthusiastically support this amendment 
is the fact that it incorporates many important community development 
initiatives such as an increase in the low-income housing tax credit 
program and the new markets tax credit proposed by the President to 
revitalize depressed areas. The City of Houston and I have worked too 
hard to provide quality low-income housing to the 18th District. To 
undermine that with a haphazard tax bill is unacceptable. For the sake 
of our citizens, we must vote in favor of this amendment.
  This amendment also accelerates the $1 million estate tax exclusion 
and 100 percent deductibility for the health insurance costs of the 
self-employed, as well as an increase in the costs which small 
businesses can expense rather than capitalize.
  It is important that we recognize the needs of small businesses. 
Almost four million Texans work in businesses with less than 500 
employees, generating a total payroll of about $100 billion a year. 
This sector of business is growing. From 1992 to 1996, small businesses 
have added 162,201 new jobs. In 1998, Texas businesses with less than 
100 employees employed 42.4 percent of the Texas, non-farm workforce 
(up from 40.6 percent in 1996). Small and medium businesses account for 
more than 67 percent of the Texas workforce. These viable businesses 
need our support, and this substitute can provide it.
  Also important is the fact that this amendment strongly supports the 
family. The substitute includes modifications to the minimum tax to 
ensure that middle income families receive the full benefit of the per-
child family credit, the education credit, dependent care credit, and 
other nonrefundable credits. The amendment also provides tax relief for 
families with children under age 5 for purposes of assisting these 
families in meeting costs of child care, health care, and other 
expenses. The relief would arrive in the form of a $250 increase in the 
per-child family credit. In addition, the substitute would provide tax 
relief to families residing in States that use retail sales taxes 
rather than income taxes to fund their State government.
  The family unit is sacred, and we want to do everything within our 
power to ensure the stability and financial viability of the family. 
This amendment is an improvement over the original bill because the 
original bill relies upon an across the board ten percent cut to help 
American families. Such thinking is naive. Low-income families would 
only see a tax cut of about $100. In comparison, the highest one 
percent of taxpayers would see a tax cut of $20,000. This situation is 
unacceptable, and we must vote for this amendment to remedy the 
problems existing in the original bill.
  Finally, it pleases me to see that the amendment recognizes the need 
for school modernization. This substitute includes a school 
construction and modernization initiative that would provide $25 
billion in free-or-interest-cost funds for public school construction 
and modernization costs. Many of our public schools are in desperate 
need of repair and renovation. Our children are our future, and they 
deserve only the best facilities.
  Finally, I appreciate this amendment because it treats the taxpayers 
in my home State of Texas fairly. Since the elimination of the tax 
deduction in 1986, taxpayers in Texas, a State that does not have an 
income tax, were forced to deduct less than taxpayers with identical 
profiles in States that do have an income tax.

[[Page 17257]]

The amendment contains a provision that will remedy this inequity--the 
original bill fails to include such a provision. The substitute is 
based on H.R. 1433, a bill that I co-sponsored, that represented a 
bipartisan effort that would provide taxpayers with the option of 
deduction of either state and local income taxes or state and local 
sales taxes.
  Because of the many important and necessary improvements that this 
amendment provides, I urge my colleagues to vote for this substitute.
  Mr. BARCIA. Mr. Speaker, I share many of my colleagues concerns about 
the heavy tax burden imposed on the hardworking men and women in this 
country. So, it is with great regret that I rise in opposition to the 
bill before us today. While it contains the essence of many tax 
reductions that I personally support and which are long over due, I am 
deeply concerned about ensuring the solvency of the Social Security and 
Medicare programs. I am very pleased, however, to support the 
alternative measure, which will also provide necessary tax relief, but 
will protect the future of Social Security and Medicare.
  Each weekend when I am home in my district, I hear from my 
constitutents that we must shore up the Social Security and Medicare 
programs. Since 1965 the Medicare program has provided universal health 
insurance coverage to our nation's seniors. The program's future is in 
jeopardy and while I also support tax relief, I strongly believe that 
we must address the solvency of this program, as well as Social 
Security, for future generations.
  It is estimated that by 2034, the Social Security Trust Fund will be 
depleted. It is essential that we utilize the budget surplus to help 
secure the future of the program. By exercising appropriate fiscal 
discipline, Social Security revenues will not be needed to fund 
discretionary programs and we will be able to preserve and protect 
Social Security without reducing benefits or shortening retirement.
  The marriage penalty tax is one of the single biggest items of 
interest to the hard-working men and women of our nation. Under the 
current federal income tax system, married couples pay more income tax 
than they would if they were single. Instead of eliminating that 
penalty for all, the bill before us today only reduces by a marginal 
amount the penalty for less than half of the taxpayers who are 
affecting by it. I cannot go home in good conscience and tell my 
constituents that we ``voted to eliminate the marriage penalty tax'' 
when this bill does not, in fact, achieve that goal.
  I firmly believe that we should reduce and eliminate capital gains 
taxes. I believe that it is immoral to force the break up of family 
farms and small businesses through the imposition of the estate tax. I 
also believe that we should not leave's debt to be paid for by 
tommorrow's generations. They will have enough problems of their own 
without being saddled with ours.
  The Democratic alternative which I am supporting today provides a 
more generous relief in the marriage penalty tax. It provides an 
increase in the family tax credit for young children. It provides tax 
credits for individuals with long term care needs. It accelerates the 
100% deductibility of health insurance premiums paid by self-employed 
individuals, including farmers and small businessmen. It accelerates 
the increase in estate tax exclusions, and increases the expensing 
options for small businesses. It does all of this while providing for 
the solvency of Social Security and Medicare.
  Mr. Speaker, while the tax reduction package may not go as far as 
many of us would like to go, it is responsible. It is paid for. And, it 
is based upon reasonable economic projections.
  I urge the adoption of the substitute and the rejection of the 
Committee's bill.
  Mr. UDALL of New Mexico. Mr. Speaker, as I travel around my 
Congressional District, the people of Northern New Mexico make it very 
clear what they expect from Congress.
  Whether I am in Santa Fe or Farmington, Espanola or Clovis, my 
constituents tell me that they want Congress to protect Social Security 
and Medicare, to strengthen education, to expand access to health care, 
and to fight for our veterans.
  That is why, Mr. Speaker, I rise today against the irresponsible tax 
proposal offered by the majority, and in support of the Democratic 
substitute. The trillion dollar risky Republican tax plan benefits the 
wealthy while jeopardizing everything my constituents have asked us to 
fight for.
  Mr. Speaker, the majority's proposal is based on risky economic 
assumptions, that we just don't know to be true. If the current budget 
projections are wrong, this proposal will send us back to the days of 
exploding deficits, high inflation rates, and uncertainty over the 
future of Social Security and Medicare.
  My party has offered a proposal to save Social Security and Medicare, 
and offer targeted tax cuts to those families that need it the most. 
Mr. Speaker, Northern New Mexico families want this Congress to pass a 
budget that protects Social Security, Medicare, education and health 
care.
  Northern New Mexico families want and deserve tax relief--but it 
should be done in an honest and responsible manner. The Democratic 
substitute does that, Mr. Speaker, through targeted tax credits and 
giving support to local communities in the areas of education, health 
care, and economic development.
  I urge my colleagues to vote with me to protect the interests of hard 
working American families and support the Democratic substitute.
  Ms. ESHOO. Mr. Speaker, I rise in favor of the Democratic substitute 
and in opposition to H.R. 2488, the fiscally irresponsible Republican 
tax bill of 1999. I support the Democratic substitute because it does 
three things.
  First, I believe that the ultimate tax cut are low interest rates for 
the American people. We will achieve this by paying down our national 
debt. Second, it secures Social Security and Medicare and third it 
provides targeted tax cuts that invest in our people and our economy.
  One of the tax cuts is making the Research & Development tax credit 
permanent. This tax credit has been critical to our nation's stunning 
economic growth, but it is not permanent and recently expired once 
again. Because of its start-stop nature, companies are unable to rely 
on the full benefits that the R&D tax credit provides.
  Imagine if the home mortgage deduction was temporary. Homeowners 
would live in uncertainty, and the housing industry would be in chaos.
  It's time to make the R&D tax credit permanent. The Democratic 
substitute makes it permanent; the Republican plan does not.
  The Republican plan is irresponsible. It will promote huge budget 
deficits, more national debt and weaken the American economy. It will 
set up a generational mugging.
  I urge members to vote for the Democratic substitute. We can't go 
back--we must go forward.
  The SPEAKER pro tempore (Mr. Thornberry). All time for general debate 
has expired.
  Pursuant to House Resolution 256, the previous question is ordered on 
the bill, as amended, and on the further amendment by the gentleman 
from New York (Mr. Rangel).
  The question is on the amendment in the nature of a substitute 
offered by the gentleman from New York (Mr. Rangel).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. RANGEL. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 173, 
noes 258, not voting 3, as follows:

                             [Roll No. 331]

                               AYES--173

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barcia
     Becerra
     Bentsen
     Berkley
     Berman
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Coyne
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeGette
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Forbes
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E.B.
     Jones (OH)
     Kaptur
     Kildee
     Kilpatrick
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush

[[Page 17258]]


     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Serrano
     Sherman
     Slaughter
     Smith (WA)
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--258

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Borski
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Costello
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeFazio
     Delahunt
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kanjorski
     Kasich
     Kelly
     Kind (WI)
     King (NY)
     Kingston
     Klink
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Mascara
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Miller, George
     Moran (KS)
     Morella
     Murtha
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Olver
     Ose
     Oxley
     Packard
     Paul
     Pease
     Peterson (MN)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Reynolds
     Riley
     Rivers
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Scott
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Traficant
     Upton
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--3

     Kennedy
     McDermott
     Peterson (PA)

                              {time}  1405

  Messrs. SHADEGG, SHOWS, MASCARA, RAHALL, CHABOT, CRAMER, PHELPS and 
OLVER changed their vote from ``aye'' to ``no.''
  Ms. DeGETTE, Mrs. MEEK of Florida and Mr. BALDACCI changed their vote 
from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                Motion to Recommit Offered by Mr. Tanner

  Mr. TANNER. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. TANNER. In its present form, I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Mr. Tanner moves that the bill, H.R. 2488, be recommitted 
     to the Committee on Ways and Means with instructions to 
     promptly report the same back to the House with an 
     amendment--
       (1) which provides a net 10-year tax reduction of not more 
     than 25 percent of the currently projected non-Social 
     Security surpluses, and
       (2) which provides that the effectiveness of each tax 
     reduction contained therein is contingent on a certification 
     by the Director of the Office of Management and Budget that--
       (a) 100 percent of the Social Security Trust Fund surpluses 
     and 50 percent of the non-Social Security surpluses are 
     dedicated to reducing the amount of the publicly-held 
     national debt,
       (b) there are protections (comparable to those applicable 
     to the Social Security Trust Fund surpluses) that assure that 
     100 percent of the Social Security Trust Fund surpluses and 
     50 percent of non-Social Security surpluses are used to 
     reduce the amount of publicly-held national debt, and
       (c) 100 percent of the Social Security Trust Fund surpluses 
     and 50 percent of the non-Social Security surpluses shall not 
     be available for any purposes other than reducing publicly-
     held national debt.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Tennessee (Mr. Tanner) is recognized for 5 minutes in support of his 
motion.
  Mr. TANNER. Mr. Speaker, earlier today in the debate there was some 
conversation about what Chairman Greenspan would or would not do. Just 
a few minutes ago, I am told, he testified in response to a question 
about this tax cut bill that quote, ``I remain where I was the time I 
appeared before you and the time before that. The reduction that occurs 
in the Federal debt as a consequence of reducing the debt is an 
extraordinarily effective tool for a good economy; it moved interest 
rates lower, the cost of capital is lower, it led to expansion of 
economic growth. Therefore, as I said before, we must let the surplus 
run. If I was asked what our first priority should be, it would be to 
let the surplus run and reduce the Federal debt.''
  Mr. Speaker, during the debate today, we have really come a long way. 
The President, the Republicans, the Democrats, the Congress, the 
Senate, even, we have come a long way; but this debate today is about 
what to do with the $792 billion that is involved in this tax cut. It 
is us versus our children and grandchildren.
  And why do I say us? It is because we, particularly those of us over 
40, have benefited from the consumption on borrowed money over the last 
25 or 30 years, but it is our children and grandchildren that have the 
most to lose today.
  I did not sleep particularly well last night, and in my fitfulness I 
envisioned that I was part of the majority and voted for this 
Republican bill. I was proud of this vote, and I went home to back-
slapping at the civic clubs and standing ovations at the political 
rallies. People told me how proud they were of me, and I really felt 
great about myself.
  But then this theme changed and I found myself at a grade school back 
home, a young fellow with a cowlick came up and said, Mr. Congressman, 
you are an important guy, you take good care of us and our country. My 
classmates and I appreciate Congress and the President agreeing not to 
spend the Social Security Trust Fund anymore. We hope you can live up 
to that. Mr. Congressman, I know we don't have a lobbyist, we don't 
have a PAC, we can't even vote.
  All we have, Mr. Congressman, is you and your fellow Members to look 
out for us. We know you grown-ups work hard and need a tax cut and we 
want you to have one. But sir, could I ask you, would you just split 
the surplus with us? Would you just give us half? We know our future is 
tied to the amount of debt America owes and the interest we know we 
will have to pay during our adult years on that debt. Would you just 
split this $792 billion surplus with us?
  I said, No, kid. I need 80 to 90 percent of it. You are right, I am 
important. I have the power to take it for myself. I can take the money 
and run. Look, kid, life is not fair, and the sooner you learn that, 
the better.
  And then, Mr. Speaker, I woke up. I was not quite so proud of my 
vote. I was not even proud about anything I had done. He did not have a 
lobbyist, he did not have a PAC, he could not

[[Page 17259]]

vote. All he and his friends have is us, Congress people.
  Well, little buddy, you might not have a lobbyist or PAC, or you 
cannot vote, but you are just as important part of the American family 
as any adult in this country. So when we say, let us give it back to 
the people, little buddy, you are one of the people and one of the most 
important, because you are our big future. Split with you, you ask? I 
am proud to split it with you. It is the least I can do. That is why we 
offer this motion to recommit.
  Give them half of this $792 billion. Pay it on the debt. That little 
boy and our kids' future may well depend on it.

                              {time}  1415

  The SPEAKER pro tempore (Mr. Thornberry). Does the gentleman from 
Oklahoma (Mr. Watts) seek to claim the time in opposition to the 
motion?
  Mr. WATTS of Oklahoma. Yes, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman from Oklahoma (Mr. Watts) is 
recognized for 5 minutes.
  Mr. WATTS of Oklahoma. Mr. Speaker, I would say to my friend, the 
gentleman from Tennessee (Mr. Tanner), rather than giving half of that 
$790 billion, Republicans, we propose to put $800 billion in debt 
relief over the next 5 years.
  Mr. Speaker, when the gentleman from Illinois (Mr. Hastert) became 
Speaker of the House, he said that we would give the American people 
tax relief; we would send education dollars back home; said we would 
take every dollar of Social Security and set it aside for Social 
Security retirement, and he said we would strengthen our national 
defense.
  I have been baffled over the last 12 hours, as I have listened to the 
debate that I have heard here on the floor, because one would not think 
that the Republicans, that we do any of that stuff. One would think 
that it was just horrible all the things that I have heard over the 
last 12 hours in this debate.
  Mr. Speaker, once and for all, let me share with the American people 
what our tax relief and our tax fairness package does. We are going to 
give the American people over the next 10 years, we are going to give 
them about $792 billion in tax relief and in tax fairness, and in this 
tax relief package and in this tax fairness package, we are going to 
eliminate the marriage tax penalty. We do not think it is fair that 
people have to pay more money if they are a married couple than they do 
if they are two individuals. We don't think that is fair.
  We are going to eliminate death taxes. We believe it is unfair that 
people have to face the undertaker and the IRS in the same week. That 
is unfair.
  Mr. Speaker, we have heard over the last 12 hours that eliminating 
the death tax, it is helping the rich.
  Well, Mr. Speaker, let us say that I am a millionaire and I am worth 
a million dollars. If I die and I choose to leave my family farm or my 
small business to my kids and my grandkids, it is not benefiting me. I 
am dead. I get nothing out of that. It is for my kids and for my 
grandkids.
  We do that. We take care of that.
  Mr. Speaker, we say we want to cut taxes 10 percent across the board 
over the next 10 years. Mr. Speaker, we said for every two dollars that 
we set aside for Social Security retirement, we are going to put one 
dollar in for tax relief. I think that is fair.
  This is about people. We have been talking about numbers and we have 
heard all kind of numbers over the last 12 hours. Mr. Speaker, this is 
not about numbers. It is about people, the folks back home, my half a 
million or so constituents. They get up every morning wondering how are 
we going to find money to buy school clothes for the kids? How are we 
going to find money to buy new tires for the car? The washer and dryer 
went out last week. How are we going to find money to pay for the new 
washer and dryer that we need.
  This is about people. It is about families. It is about working moms 
working from paycheck to paycheck to make ends meet. It is about 
working families working from paycheck to paycheck to make ends meet; 
giving them more of their money to free up their time, not having to 
work but so they can spend it with their kids and with their grandkids. 
That is what this is about, securing the future for our families, for 
our children, for our farmers.
  That is what it is about, helping them to pursue the hopes, the 
dreams and the ambitions, the goodness. That is what it is about.
  We have heard a lot of babble over the last 12 hours. I have listened 
to some of the debate, and from time to time I would hear things that I 
would feel like saying, give me a physical break. $800 billion we are 
paying down on the national debt. We are securing the Social Security 
trust fund.
  The President said here about a year ago, 8 months ago, he said let 
us take 62 percent of the surplus and set it aside for Social Security.
  We created the lockbox. We said when that FICA fellow, and everyone 
will see it on their paycheck, when that FICA fellow takes money out of 
the paycheck, we are going to force him to do with it what he says he 
is going to do with it. Save it in the lockbox for retirement.
  Mr. Speaker, we have a great opportunity, a great opportunity, in the 
next few minutes, to do a lot for our families, for working moms, 
working dads, for small businesspeople, for farmers. I beg my 
colleagues not to blow it.
  I oppose this motion to recommit. I urge a no vote, and vote yes on 
final passage.
  Mr. NEAL of Massachusetts. Mr. Speaker, I strongly support the motion 
to recommit offered by the Blue Dog Democrats. It makes common sense to 
save half the budget surplus for deficit reduction, and it is hard for 
me to believe that this would be controversial.
  I understand a sense of Congress resolution in favor of debt 
reduction has now been added to Chairman Archer's bill. That clarifies 
the issue. You can either vote for the motion to recommit to actually 
accomplish debt reduction, or you can vote to say you are for debt 
reduction without taking any action to do it.
  Mark my words, the Republican tax bill will plunge us back into 
deficit spending before its is fully implemented. According to the 
Congressional Budget Office, if you assume that appropriations bills 
will increase by the rate of inflation, and there is no emergency 
spending for 10 years, then its $996 billion surplus shrinks to $247 
billion. The difference, if the Republican tax bill passes, will be 
deficit spending.
  And its $3 trillion cost of the Republican tax bill when fully 
implemented during the second ten years will plunge us off a deficit 
cliff just as surely as lemmings heading to the sea.
  This motion to recommit is the last opportunity to turn away from the 
cliff. I hop my colleagues will use their common sense, and vote for 
this motion to recommit.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. TANNER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 211, 
noes 220, not voting 3, as follows:

                             [Roll No. 332]

                               AYES--211

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Forbes
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gonzalez
     Goode
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur

[[Page 17260]]


     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pickett
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--220

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Cox
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Petri
     Pickering
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--3

     Kennedy
     McDermott
     Peterson (PA)

                              {time}  1438

  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Thornberry). The question is on the 
passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. CARDIN. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 223, 
noes 208, not voting 3, as follows:

                             [Roll No. 333]

                               AYES--223

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Crane
     Cubin
     Cunningham
     Danner
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Petri
     Pickering
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--208

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Clay
     Clayton
     Clement
     Clyburn
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Forbes
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pickett
     Pomeroy
     Price (NC)
     Quinn
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)

[[Page 17261]]


     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--3

     Kennedy
     McDermott
     Peterson (PA)

                              {time}  1455

  So the bill was passed.
  The result of the vote was announced as above recorded
  The title of the bill was amended so as to read:

       ``A bill to provide for reconciliation pursuant to sections 
     105 and 211 of the concurrent resolution on the budget for 
     fiscal year 2000.''.

  A motion to reconsider was laid on the table.

                          ____________________