[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[House]
[Pages 22431-22434]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     ECONOMIC STIMULUS FOR AMERICA

  The SPEAKER pro tempore (Mr. Osborne). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Texas (Mr. Armey) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. ARMEY. Mr. Speaker, I want to appreciate you presiding over the 
body, the Chamber, today.
  Mr. Speaker, I was tempted to ask unanimous consent that the body 
agree with me that Oklahoma be number one, but I would not want to put 
you in a position of having to object from the chair.
  The SPEAKER pro tempore. Without objection.
  Mr. ARMEY. The Speaker is a gentleman for sure.
  Mr. Speaker, I am here today with some of my colleagues to talk about 
a serious subject, but let me begin by paying my respects to this great 
country. America is such a great country. We Americans are such 
hardworking people. We go to work, take care of our families, look 
after things in our community, we work hard, pay our bills, pay our 
taxes. Beyond that, maybe we save a little bit of something for our old 
age or our children's education or any number of dreams we might have.
  We go to the private capital markets and put that savings where it 
will be safe and where it will grow and hope that those sacrifices we 
make today will give us a better day. And all of that activity that we 
do in what one of my favorite economists, Alfred Marshall, called the 
ordinary business of life, all that we do has resulted in this great 
land building the greatest economy in the history of the world. The 
wonders of product from which Americans consume daily and routinely are 
just magnificent and frankly the envy of the world.
  But every economic system, every economy, every great Nation at a 
time can find a period of economic distress. We have a whole body of 
economic thought, financial analysis, study, by which we respond to a 
very simple question: If the economy falls on hard times and if in that 
period of time people are losing their jobs, production falls, 
investment falls off, the energy seems to be sapped from the economy, 
what by way of government policy can be done?
  There are basically two areas by which we can respond to this. It is 
called countercyclical monetary and fiscal policy. We can respond by 
monetary policy to try to expand the money supply and encourage growth 
for the economy. In that, Chairman Greenspan and the Federal Reserve 
Board have been more than thorough in their efforts along that line. We 
have brought, through their efforts, interest rates down to as low a 
level as possible. We in the Congress of the United States need to turn 
our eyes toward the Federal Reserve Board and say, ``Thank you, ladies 
and gentlemen, you have done so much, and we appreciate your effort.'' 
And at the same time we need to recognize that more can be done and in 
particular that more that can be done must come from us.
  For reasons that are not altogether clear to everyone, the American 
economy began to downturn sometime last year. I remember the downturn 
became clearly evident to us, to the point that now Vice President Dick 
Cheney as a candidate for that office spoke about it during that 
campaign season. I can remember how he was berated by his opposition 
for, as they said, talking down the economy, an unfortunate reaction in 
that while we had to have somebody who would say, ``Hey, there is 
serious trouble on the waters and we need to be ready to respond to 
it,'' we really did not as a Nation need others to say, ``Hush up, 
let's not recognize our problems.''
  So we went forward with that. And as the new administration took 
office, it took office with an understanding of this economic distress 
and a resolve to do something about it. And, of course, the President 
acted swiftly. I am proud to say this body worked hand in hand with the 
President as we passed earlier this year the one thing that we might 
do, that we could do, that we should have done and that we did do to 
stimulate the performance of the economy, which was to cut taxes. That 
tax reduction that we did in June of this past year has already showed 
up in the lives of most Americans. We have seen it by adjustments in 
our withholding taxes at work, we have seen it by the rebate of 
overtaxes from last year. And that may have been all that we needed to 
move this economy back to a good growth cycle where the jobs could have 
been not only sustained but in fact expanded.
  Then on September 11, with that horrible, heinous act that was 
perpetrated in this country by international terrorists and the Nation 
took a blow, one that broke your heart in so many ways, most of which 
we have responded to and most of the correction for which is well under 
way today as we see by events in Afghanistan, we committed this Nation 
to wiping out international terrorism, and this Nation is doing the 
job. Is it not marvelous, Mr. Speaker, the extent to which the 
Congress, from both sides of the aisle, cooperate with the President in 
this very important job of ridding the world of these villainous 
characters that would perpetrate such horrible acts?
  But another part of the blow that we took on that day was a blow to 
our economy, and that blow to that economy really sent us to some 
extent

[[Page 22432]]

back. Make no mistake about it, the American economy is still the 
strongest economy in the world and we are still doing well, but it is 
not performing as it can be, as it should be, and people are losing 
their jobs. They look to us to do something about it. The President of 
the United States has, after mobilizing all the resources, asking for 
and receiving as much as $100 billion of new spending for these 
critical defense and security needs the Nation has, turned his 
attention to what else we could do and asked for us to give a pro-
growth, job-creating tax reduction to the American people. We studied 
on that, the White House studied on that, others in town studied on 
that, and there developed a, I might say, scholarly consensus that if 
in fact you were going to use reduction in taxes to stimulate the 
performance of the economy, put us back on a growth path and, indeed, 
in the final analysis create jobs so that your neighbors can go back to 
work, your sons and daughters can graduate next spring and find those 
jobs that you have been hoping for, that we would have to concentrate 
our efforts on the investment side of the tax ledger.
  Chairman Greenspan in one meeting that I attended said it, I thought 
so perfectly, when he said, every dollar's worth of tax money left in 
the hands of the American people for investment purposes will leverage 
to higher rates of growth than dollars left in consumer hands. And so, 
at the President's request, the House of Representatives created a tax 
bill that focused on investment, growth and jobs.
  Let me talk about a few of the things in that tax bill that are being 
frankly misunderstood and publicly maligned. One of the other points 
that was made by Chairman Greenspan is that we ought to take all the 
good ideas on tax reduction and line them up and do what is known in 
the discipline of economics and finance as a cost-benefit analysis to 
see which of these will give you the most growth result as a 
consequence of their implementation. That was done. And there was a 
consensus that again was articulated before us by the Chairman when he 
said, the first most necessary thing that we must do is put an end to 
the alternative minimum tax as applied to corporations.
  Why is that so important? First, we should understand that the 
alternative minimum tax says to a corporation, if you are having a bad 
year, sales are off, revenues are down, you don't have earnings but 
indeed have losses and would thereby under the normal Tax Code of this 
land be exempt of any tax liability, we are going to bring in a special 
punitive tax so that we can extract revenue from you even though you 
have no earnings from which to pay those revenues.
  This is an insane tax. This is a kick-them-while-they-are-down tax. 
This is a tax that says take away whatever they might have to perhaps 
get back on their feet as a business fallen on hard times and give it 
over to the government. Take away what you might have to put some of 
your employees back to work and give it over to the government. And he 
is so right. We must get rid of that. And in doing so, we have been 
advised by virtually everyone, rebate to these firms those liabilities 
they have already existing under this insane tax so that they in fact 
can recoup among themselves from the revenues they have acquired 
through their own sales because of the productive effort of their 
employees who had the good fortune of having a job in the good times so 
that they may have the revenues with which to actually make the 
investments that would put people back to work.
  This is being maligned in the discourse over tax policy in America 
today by the uninitiated and economically naive as some kind of a tax 
break for big corporations. Well, corporations do not pay taxes; people 
pay taxes. And the people that pay those taxes are the people who own 
the corporations. And the people who own the corporations are many 
times those same workers that had enough good fortune to have something 
called an IRA, a Keogh plan, a 401(k), some precious little area of 
savings where they had a chance to hold something of value in their 
lives and the owners of the corporation.
  And so those people that work hard, save their money, put it in 
whatever instrument they think is safe for their retirement years, get 
this special punitive tax and have that money taken away. We in the 
House understood the good common sense of leaving resources in the 
hands of investors and avoiding the practice in current law of kicking 
people while they are down and we put a repeal of the AMT in our bill.
  Another piece of advice we got from so many quarters was, let people 
expense some portion of their new inventory for some period of time. 
Why is that important? We are living in a high tech society. The 
driving engine indeed not only of the American economy but of the world 
economy is all of this modern computerized electronics. And it is 
exciting. There is a discovery, an invention a day. I always say every 
time there is another college dropout, there is a new electronic wonder 
coming before us. That means rapid obsolescence because the innovation, 
the creation, the invention is going on so fast. That means that if you 
are going to invest in these new wonders of productivity that make it 
possible for us to work smarter instead of harder and get more output 
per unit of input and keep more people working at higher wages, you 
have to be able to write some of that off early so that you have the 
time to recover them. And so we put that in, 30 percent tax write-off 
in the first year, as an incentive for people to invest in the wonders 
of American genius as invented and innovated in the world of work.
  Then we took a lesson that was taught to us, I thought, at least 
taught to me as a young economics student back in 1962 and 1963 by 
President John F. Kennedy, who is not one of our guys, he is one of 
their guys, speaking in partisan terms for just that very slight 
moment, Mr. Speaker, who said if you cut the tax rate that applies to 
people out there working, they have a desire to work harder. That is 
not a new notion. That notion was first taught to me in 1958 by Mike 
Berg, the chairman on the construction crew on which I worked when he 
said, ``We're not going to work overtime because the tax rate on my 
overtime is so high it's not worth my while to do it.''

                              {time}  1530

  It was worth my while to work overtime, because I was not making as 
much money as Mike and the marginal rate was lower on me and I got to 
keep more on what I got to earn. But the lesson was very clear, 
ingrained in my 18-year-old mind by the foreman of a construction crew 
that did not even have the benefit of a high school degree, that if in 
fact you tax people more for an extra hour's work, they are less 
willing to do that hour's work. And nobody in Washington got it, except 
John F. Kennedy, and all the professors in America applauded him for 
teaching it to them.
  So the lesson has been around a long time. So we did accelerate the 
reduction in the marginal tax rate that applies to individuals, so Mike 
Berg would work overtime, bless his heart, and the rest of us on the 
crew could do the same. That would be good, because we would work 
harder, we would work longer, we would earn more, we would spend more, 
and, as we spent more, somebody else would have a new job because they 
had to replace an inventory, and that is called economic growth.
  Now, these are some of the ideas that are just plain common sense, 
watching the world in which you live each and every day of your life 
work the way you work in it, and having enough sense seeing what is 
going on around you, that are being disparaged by some of the people in 
this debate.
  The House passed a good growth tax bill. It will put people back to 
work. In fact, the analysis tells us it will put as many as 170,000 
Americans back to work in its first year alone. That is not enough, but 
it is something.
  Now, the other body, Mr. Speaker, has decided that they know better 
than the President of the United States, they know better than the 
House of Representatives, they know better than John F. Kennedy, they 
know better, even indeed, than Mike Berg, bless his heart. They said 
no, we do not want

[[Page 22433]]

to cut people's taxes. We do not want to do anything for people who are 
greedy, because people who want to keep their own money that they earn 
are greedy, especially if they are people that also saved for a large 
part of their life, bought stocks and made investments so they could be 
part owners in corporations. They are greedy. The other body, of 
course, being a righteous place, has no time for such folks as that.
  So, what did they do instead? They say let us put a bill together 
where instead of letting people keep their own money and take care of 
their own business for themselves, we will keep their money and spend 
it on those people that we perceive to be needy, not greedy.
  This little old graph we have here with all these cute icons here, 
which were generated, by the way, by Windows, shows you some of the 
people that they felt needed these special government programs. Apple 
producers, apricot producers, asparagus producers, producers of bell 
peppers. You have a special provision for business on meat. I do not 
know how PETA feels about that, but they are taking care of killing the 
Buffalo. Blueberries, cabbage, cantaloupe, cauliflower, cherries, corn, 
cucumbers, egg plants, flowers. Investment bankers, they have a bucket 
in there that says a special program for the unemployed should now be 
made available for investment bankers, bless their heart. Movie makers, 
onions, potatoes, strawberries, tuna fish. Charlie the tuna gets a 
spending program under the other body's bill. Tomatoes, peas and pears.
  I want to do a little bit of fundamental calculation here and say 
that blueberries, cabbage, cantaloupe and cauliflower do not add up to 
growth in jobs. They add up to special government spending programs to 
take that money that is earned by people who are making a living and 
give it over to other people. It will not stimulate the economy.
  They say well, spending will stimulate the economy. Let me remind 
you, we have already appropriated since the 11th of September $100 
billion of new government spending. That spending is for anti-terrorism 
and a lot of things, and it is important.
  What we need to do is one simple thing: Do we have the decency to 
respect the productive economic work genius of the American people and 
say to the American people, let us leave in your hands more of the 
money that you earned, so that you can rebuild your economy that 
supports us in Washington so well? That is the only decent question 
that can be asked in this circumstance.
  Not only is it a matter of decency, it is a matter of what will work. 
What will work. Do we want to put people back to work in America, or do 
we want to give people a greater opportunity to be more dependent upon 
the Federal Government? That is what this debate is about, and we 
should make no mistake about it.
  I have got to tell you, Mr. Speaker, I love America. I even, on most 
occasions, like our government. But my momma did not raise me to be 
dependent upon the Federal Government. She raised me to get a job, go 
to work, pay my taxes, take care of my family, save some of my money to 
help build a business that enables somebody else to go to work, so by 
their productive efforts sometime in the future I can enjoy my 
retirement from the savings I have. That is who we are in this country. 
We are not a nation of people who believes they are supported by the 
government. We are a nation of people who know that it is by our 
sacrifice that we support the government.
  One of the areas in which we could do that, and should have done so 
even in the House and will do so in a more complete way someplace in 
the future, is to put a permanent end to this awful injustice called 
the death tax. We have with us today, Mr. Speaker, a champion of 
justice in this regard, the gentlewoman from Washington (Ms. Dunn), who 
believes that if you work hard all your life and you build something of 
value to your life's work and you come to the end of your days, you 
ought to be able to leave that to your children instead of the 
government. Bless her heart.
  Furthermore, in the practical side of things, she understands that if 
you are free to leave the fruit of your life's labor to your children, 
rather than the government, you are going to work harder, produce a 
little more, build a bigger business and create greater job 
opportunities for a lot of people. She is the champion of this.
  I see we have the gentlewoman from Washington (Ms. Dunn) here. If the 
gentlewoman would like to contribute to this discourse, we would 
certainly like to hear from her on this.
  I yield to the gentlewoman from Washington.
  Ms. DUNN. Mr. Speaker, I thank the Majority Leader very much. I want 
to thank the Majority Leader, the gentleman from Texas (Mr. Armey), for 
organizing this public explanation of the stimulus package. I think it 
is terribly important that we get the message out to people all over 
the country that there is a difference, and it should not be surprising 
that there is a difference in the way this body and the Republicans 
versus the Senate and their Democrats approach stimulating the economy.
  If you look at it very carefully and you review the approach, as the 
gentleman from Texas has done, it is very clear the debate we are 
having today is a debate about private sector growth versus growth in 
government spending. That is what this really is about.
  I think the House bill is a very balanced bill. I think it is a 
responsible bill. It is a bill that is balanced between assistance for 
people who are out there earning in the job market and business tax 
cuts that will generate economic growth, and do that through creating 
new jobs or keeping jobs that are currently in the economy and are 
currently threatened by our lagging economy.
  The business tax cuts have been demonized, as the gentleman from 
Texas said, by the opposition. They have been called giveaways to 
wealthy corporations. In reality, the expensing and depreciation 
provisions actually give companies a greater incentive to invest, and 
we believe that private investment is the linchpin for economic growth. 
That is why we have focused our time and attention on this and 
developed a plan that produces some very, very serious incentives for 
investment.
  The corporate AMT repeal has drawn a whole lot of criticism from our 
opponents. It actually rids our Tax Code of a very unnecessary-now 
layer of taxation that ties up needed cash. In 1987, roughly 15,000 
companies paid the AMT, or the Alternative Minimum Tax. Fifteen years 
later, 30,000 companies are caught up in this very complicated tax 
regime.
  The exemptions which earlier provided an incentive for corporations 
not to pay taxes to avoid paying regular income taxes now are gone, and 
there is no reason to keep this AMT, because it just forces a company 
to calculate taxes in two different ways. It takes their time, it takes 
their money, it takes their manpower that they should be focusing on 
other things that will make their companies successful. That is why the 
nonpartisan Joint Committee on Taxation has identified the repeal of 
the corporate AMT as a way to make the Tax Code more equitable and more 
efficient and, of course, simpler.
  Worst of all, as the economy continues to slow down, companies will 
be caught up in this very complicated calculation, and that is the last 
thing that we should be doing today, especially for small businesses 
and especially during a potential recession period. We should not be 
punishing our companies with complicated, expensive, unnecessary 
paperwork.
  The House bill also directs personal tax relief to hard-working, 
middle-class Americans. We have reduced the 28 percent tax rate to 25 
percent immediately, immediately, and that means that a family with 
$55,000 in earnings could save several hundred dollars in taxes every 
year from now on. This is money that can be used to pay for clothes or 
buy braces for children or make a car payment or buy a new washer or 
dryer or buy children's tennis shoes to prepare for school in the

[[Page 22434]]

fall. In my own home State of Washington, 660,000 taxpayers will 
benefit from this reduction in the marginal rate from 28 percent to 25 
percent.
  A further huge simplification of the Tax Code takes place through the 
reduction in the capital gains tax, eliminating that 5 year holding 
period that has complicated the Tax Code down to a holding period of 1 
year. It allows almost everybody to be able to pay capital gains at the 
rate of 18 percent. It is 2 percent, but it is a lot of dollars if you 
are thinking about selling your house. I think it will unlock assets 
that might have been held before to wait for a lower capital gains. 
This bill includes that.
  The House bill also addresses the needs of unemployed workers. In my 
part of the Nation, this is terribly important. We are losing up to 
30,000 jobs at the Boeing Corporation alone. Another 900 at the 
Nordstrom Corporation. We know that these people want to work, and we 
know that their most pressing needs are in the short-term. So our bill, 
very much unlike the Senate bill, does not create another health care 
entitlement program, but it directs dollars in the form of block grants 
to the governors of the states all over the Nation, and eventually to 
the workers themselves, the flexibility to face their specific needs. 
So they can cover those health care premiums and they can cover the 
retraining that is necessary if somebody has lost a job.
  Washington State, wracked by recent layoffs, will receive about $256 
million out of this grant that will aid unemployed workers through 
retraining programs and health care coverage.
  In comparison, the Senate bill is a road map to bigger government. 
The Senate bill is a road map to greater spending. We have already 
spent since September 11 $100 billion to increase spending and to give 
help to New York City and to other parts of our Nation. We know that is 
very important. The Senate bill is more spending, and we do not need 
additional spending.
  What will providing tax exempt bonds for Amtrak do to benefit our 
economy in the short-term, which is the goal of this stimulus package? 
What about the host of emergency agricultural subsidies? The narrow tax 
benefits that are aimed at bison ranchers and citrus growers, they are 
not what the President had in mind when he outlined his approach to the 
stimulus.
  The Senate bill's greatest failure is it really does, when you get 
down to the bottom line, leave out the average taxpayer. There is not 
one single American income tax payer that will receive a benefit from 
the Senate bill. That is terribly important. It is just the contrary of 
what we try to do in our immediate stimulus by putting dollars back 
into the pockets of the folks who earned these dollars.
  Compare this to the House bill. For example, simply from that 
reduction in the 28 percent tax rate to 25 percent, 25 million 
Americans will be immediately benefited by a decrease in their 
withholding taxes.
  By any objective measure, Mr. Speaker, the House bill will stimulate 
growth in the private sector. I do hope that the Senate will realize 
that the best way to increase consumer spending is to put more money in 
the pockets of working Americans, not into new government programs.


             CONGRESSIONAL RECORD 

                United States
                 of America

This ``bullet'' symbol identifies statements or insertions 
which are not spoken by a member of the Senate on the floor.



November 14, 2001
                                                       November 14, 2001