[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[HOU]
[Pages 4683-4690]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   MAKING PERMANENT THE BUSH TAX CUT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Illinois (Mr. Weller) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. WELLER. Mr. Speaker, this week we have an important vote in the 
House of Representatives, and my good friend from Virginia, the leader 
of the freshman class, our new Members, spoke so eloquently on this 
issue that is before us, and a group of us plan to kind of expound on 
this issue that is going to be before us this week.
  As President Bush noted this past weekend, the tax cut that the 
President led, initiated and our Congress passed and was signed into 
law in June expires in less than 10 years, and tonight we felt it was 
important to talk about the impact of a temporary tax cut because this 
week, on Thursday morning, the House of Representatives will begin 
debate on legislation which will make permanent what has become known 
as the Bush tax cut.
  Let us review a little bit of history here. Over the last 7 years 
that we have had a Republican majority in the Congress, we have been 
working to balance the budget and also to lower taxes for working 
families. Unfortunately the previous administration, the Clinton-Gore 
administration, vetoed time and time again our effort to lower taxes 
for working Americans.
  Fortunately, the voters of our Nation this past year and a half ago 
in November of the year 2000 elected a President who feels the same way 
the majority of this House does, that is, the taxes are too high, 
families are struggling, and of course, we need to find ways to bring 
fairness to the Tax Code.
  I was very proud of the President's leadership because he noted in 
January of last year, and January 2000 when he became President, that 
the economy was in a downturn. The President inherited a weakening 
economy and he says we have got this huge surplus, all this extra tax 
revenue that the Federal Government is collecting because taxes are too 
high and we are not spending it all, thanks to the fiscal 
responsibility of this House. So why do we not take a portion of that 
surplus, that extra tax revenue, and give it back to working families? 
Provide an across-the-board tax cut that helps every working family, 
bring about tax fairness by eliminating the marriage tax penalty, 
wiping out the death tax, increasing opportunities for retirement 
savings and saving for a college education?
  The President was successful. President Bush's leadership, with the 
leadership of the gentleman from Illinois (Mr. Hastert) and Committee 
on Ways and Means chairman, the gentleman from California (Mr. Thomas), 
this House led the effort to lower taxes, and in June of this past 
year, the President signed into law what has become known as the Bush 
tax cut. Unfortunately, because of the arcane rules of the Congress, 
the tax cut was temporary, which meant it had to expire in the year 
2011.
  When we think about that, when it expires, it is going to mean a big 
tax increase on millions of working families across this country. That 
is really what this vote is about on Thursday is whether or not we 
continue to keep taxes lower for working families, whether or not we 
continue to have tax fairness or do we bring back an unfair Tax Code 
that punishes married couples and takes away the family farm and family 
businesses and makes it harder to save for retirement or a college 
education, essentially imposing a tax increase on working Americans. 
That is what this vote is going to be this week.
  I would note that one of the arguments the President made when he 
talked about the need to cut taxes is that the President stated that we 
need to get the economy moving again, and if workers have a little 
extra spending money in their pockets, they are going to be able to 
meet the family needs, go to the grocery store, make some improvements 
to their home, fix the car, maybe have a family vacation the first time 
ever.
  The President said that if his tax cut was signed into law, the 
economy would get better, and frankly, it was working. Economists tell 
us that by Labor Day of this past year, Labor Day 2001, the economy was 
on the rebound and the Bush tax cut was the primary reason that the 
economy was on the

[[Page 4684]]

upswing. Of course, every one of us knows what occurred on September 11 
and the terrible tragedy of that attack on our Nation and its economic 
impact with almost 1 million Americans having lost their jobs.
  Well, the Bush tax cut is continuing to work and the economy is 
beginning, according to economists, to get on the rebound again, and 
tonight we want to talk about what was in the Bush tax cut.
  I would note, as I stated earlier, that the Bush tax cut did a number 
of good things to help working families. Provided for marginal rate 
reductions, reducing the tax rate for every American who pays taxes, 
creating a whole new tax rate structure. In fact, we created a new 
lower tax rate for the lowest income Americans, lowering their taxes 
from 15 percent to 10 percent, helping low income taxpayers.
  We also, of course, repealed the death tax, a tax which has 
historically taken a majority of the family business away from families 
who inherit the family business from the founder and that has caused so 
many businesses to go out of business, and some of my colleagues are 
going to talk about that.
  We doubled the child tax credit from $500 to $1,000, helping families 
with children better afford their children's needs.
  We increased retirement savings, increasing the amount one can 
contribute to their IRA from $2,000 to $5,000, what one can contribute 
to their 401(k) from $10,500 to $15,000, and for working moms and empty 
nesters, we allowed those over 50 to make up missed contributions to 
their IRA and 401(k), essentially what we call catch-up contributions.
  We helped families save for education, increasing education savings 
accounts from $500 to $2,000 a year, and allowing families to use that 
for expenses for elementary and secondary education, as well as for 
college.
  Those are good things. Also, because many families were stepping 
forward and volunteering to adopt children and give children a loving 
home, we increased the adoption tax credit to $10,000 for children with 
special needs, and of course, for those with nonspecial needs, we have 
it at $5,000, and we also increased the income level of families that 
can qualify from $75,000 to $150,000, and we also prevented the 
alternative minimum tax from interfering or taking away this tax relief 
for working families.
  Of course, part of the debate of who benefits from tax relief is who 
gets it, and there is always some who say, oh, we cannot cut taxes 
because those who pay taxes will get it. We should not help those who 
pay taxes because apparently they are rich. Well, let me note who it is 
that benefited from the Bush tax cut.
  Under the President's tax plan that was signed into law and this 
Congress supported on and that we are going to make permanent or vote 
to make permanent this week, over 100 million individuals and families 
pay lower taxes. Forty-three million married couples see their taxes 
reduced on average by more than $1,700 a year. Thirty-eight million 
families with children will receive an average tax cut of almost 
$1,500. Eleven million single moms with children will be able to keep 
on average $77 more to care for their children. Thirteen million 
seniors will see their taxes reduced on average by $920, and 3.9 
million taxpayers, including 3 million taxpayers with children, will 
have their taxpayer liability for the Federal tax burden completely 
eliminated.
  Think about that. Almost 4 million taxpayers under the Bush tax cut, 
those at the lower end of the economic area, pay no more taxes, thanks 
to the Bush tax cut.
  Small business owners and entrepreneurs will receive a big chunk of 
this tax relief. Whenever my colleagues argue about who is going to get 
the rate reduction and what that means, they have to recognize that the 
vast majority of small businesses, almost 80 percent, pay in the top 
rate, and we lowered their rate to 35 percent.

                              {time}  2000

  Mr. Speaker, I have worked with many of my colleagues over the last 
several years to address something we call the marriage tax penalty. 
Often in debate I have asked that question, is it right, is it fair 
that under our Tax Code 28 million married working couples pay higher 
taxes just because they are married.
  Prior to the Bush tax cut, Americans saved money on taxes if they 
stayed single. Our Tax Code encouraged couples not to marry. We made a 
decision, and it was certainly a priority of House Republicans, to 
remove the penalty on marriage. I often introduced a couple from 
Joliet, Illinois, Shad and Michelle Hallihan, who in combined income 
make about $65,000. Their marriage tax penalty was $1,400 that they 
paid in higher taxes just because they got married.
  Under the Bush tax cut, their marriage tax penalty was eliminated. 
Now if the Bush tax cut is allowed to expire, Shad and Michelle 
Hallihan will once again pay higher taxes just because they are 
married. Their child, Ben, who is 2, they got married about the time we 
introduced the legislation, the child was about a year old by the time 
the Bush tax cut was signed into law. When the Bush tax cut expires, 
when Ben is 11 or 12, that is $1,400 less that Shad and Michelle 
Hallihan are going to have to be able to set into their education 
savings account.
  Let me give an example of another couple from Joliet, Illinois, Jose 
and Magdalene Castillo. They are both laborers in Joliet, Illinois. 
They have two children, Eduardo and Carolina. They suffer the marriage 
tax penalty as well. They make about $85,000 a year. Jose makes about 
$57,000 in his building trade construction-related job, and Magdalene 
makes about $25,000. With their combined income and the way the 
marriage tax penalty works for the Castillos is by being married, they 
file jointly. When you are single, you file as two singles. But when 
you marry, you file jointly, which means you combine your income. That 
usually pushes one into a higher tax bracket. For the Castillos, for 
Jose and Magdalene, they paid $1,100 in higher taxes just because they 
were married.
  Now, if our colleagues in this House of Representatives vote this 
week against making the Bush tax cut permanent, Jose and Magdalene 
Castillo are going to end up paying higher taxes once again when the 
Bush tax cut expires. I believe that is wrong, and I believe the 
majority of this House thinks it is wrong and unfair that if the Bush 
tax cut were to expire that couples like Jose and Magdalene Castillo 
and Shad and Michelle Hallihan would pay higher taxes just because they 
are married.
  We have two leaders that are here in the House that have been leaders 
on issues so important when it comes to helping working Americans. I 
would like to yield to the gentleman from Indiana (Mr. Kerns), who has 
been one of the leaders and one of my partners in eliminating the 
marriage tax penalty.
  Mr. KERNS. Mr. Speaker, I rise today in support of the legislation to 
make the elimination of the marriage tax permanent. One of my top 
priorities when I came to Congress was to eliminate the marriage tax 
penalty, a penalty that unfairly punishes hard-working men and women 
for entering into marriage, a fundamental institution of our Nation.
  I have worked closely with the gentleman from Illinois (Mr. Weller), 
who has been a leader of this Nation on this issue. I was a chief 
cosponsor of this bill to end the marriage tax penalty, and it has been 
moving forward steadily, but we do not have the job done yet. We 
succeeded in passing marriage tax relief; but after 10 years, the 
marriage tax penalty returns. Imagine that, our Federal Tax Code would 
once again punish married couples. That is why we are here today, to 
stand up for families, to call for the final end to this unfair penalty 
that singles out married couples. Simply put, the elimination of the 
marriage tax penalty helps families. This is legislation that will 
provide relief to nearly 43 million married couples. It will save the 
average married couple $2,720. If we do not make this elimination of 
the marriage tax penalty permanent, Congress will be raising taxes on 
families. We should allow families to keep more of their hard-earned 
dollars and to save and use

[[Page 4685]]

as they choose. The government should not be in the business of 
discouraging marriage.
  For that same reason, the permanent repeal of the death tax is also 
sound public policy. People work hard all of their lives it save and 
pass along something for their families, perhaps a farm or a small 
business to their children and grandchildren. It is wrong for the 
Federal Government to punish those families for their hard work and 
success. While we took a step in the right direction of ending the 
Federal estate tax, it, too, like the marriage tax, returns after 10 
years. How can we expect the American people to plan for the future 
with the threat of the death tax returning after a few years looming 
overhead?
  We must continue to protect and preserve the family farm and small 
businesses by making repeal of the death tax permanent. Mr. Speaker, we 
must make the elimination of the marriage tax and the elimination of 
the death tax permanent. If we do not, Congress will be increasing 
taxes on families. Let us work toward a more family-friendly Federal 
Government. Let us have a more family-friendly Congress. Let us end 
these burdensome taxes once and for all.
  Mr. WELLER. Mr. Speaker, I thank the gentleman from Indiana (Mr. 
Kerns), who as a freshman has been a real leader in his efforts to 
eliminate the marriage tax penalty and working with President Bush and 
the gentleman from Illinois (Mr. Hastert) and ensuring that a key part 
of the Bush tax cut included what we consider to be the most unfair tax 
of all, and that is the tax on the institution of marriage, one of 
society's most basic institutions.
  Mr. Speaker, I yield to the gentleman from Missouri (Mr. Hulshof).
  Mr. HULSHOF. Mr. Speaker, what an appropriate time for us to really 
continue this debate that we began a year ago last spring when we, this 
body, voted in a bipartisan way to enact some significant tax relief.
  Mr. Speaker, yesterday was in fact tax day; and always there are 
jokes that sort of go around April 15. My favorite happens to be an old 
Farmer's Almanac saying if Patrick Henry thought taxation without 
representation was bad, he ought to see it with representation.
  As one of the members of the Committee on Ways and Means that insists 
on doing my own taxes, and I did not deny myself that enjoyment over 
the weekend, I was thinking what can we do to make the Tax Code simpler 
and fairer. As my seat mate on the Committee on Ways and Means, the 
gentleman from Illinois (Mr. Weller) has done so admirably, and over 
these months I feel as if I know quite well Shad and Michelle Hallihan 
because the gentleman tells their story so frequently on the House 
floor.
  As we set this debate up, Mr. Speaker, first of all, why is this vote 
necessary? Why is it that we are talking about permanence or the lack 
of permanence with what Congress did last summer? It is interesting to 
note, I think, that tax increases are always permanent. I think back, 
we had a debate recently about the Spanish-American war tax, a tax on 
luxury telephones back in 1898 to help pay for the war effort, and 
later the World War I effort. That tax still exists today.
  I think of the inheritance tax that was enacted back in 1916; it 
still exists today. It is a permanent tax. Even the tax increases of 
1993, I know the Democratic colleagues are proud to point out that tax 
increase passed without one single Republican vote; and a lot of those 
items called deficit reduction tax still exist today.
  So it is ironic when we are talking about tax increases; they are 
always permanent. And yet when it comes to tax decreases, that is 
letting Americans keep more of their hard-earned money, we have to go 
through yeomen effort to try to make those tax cuts permanent.
  I have had constituents who asked me why was this sunset placed on 
the bill. Well, there were procedural rules. When this tax relief 
measure made it to the other body, there were opponents to the bill 
which threatened to filibuster the bill and institute a lot of arcane 
budget rules unless this sunset were added. There is no public policy 
rationale behind this sunset. It was simply an effort to avoid a 
procedural roadblock in the United States Senate. I do not believe that 
American taxpayers should be held hostage to arcane Senate budget 
rules. From that policy perspective, I think it is important that we 
vote in favor of permanence.
  Mr. WELLER. Mr. Speaker, say that the Bush tax cut were to expire and 
the House and the Senate were to fail to pass legislation to make 
permanent the Bush tax cut, eliminating the marriage penalty, wiping 
out the death tax, across-the-board tax reductions, helping low-income 
families, creating a much lower tax bracket for low-income families, 
would you consider that a tax increase?
  Mr. HULSHOF. Mr. Speaker, there is no question about it. There was 
some discussion already that certain Senators were talking earlier in 
the year about suspending this year's tax relief and capturing those 
monies for additional spending. There was some discussion about whether 
suspending those tax cuts would in fact be a tax increase or not. 
Putting that aside, clearly on January 1, 2011, if Congress fails to 
act, we will see a significant income tax hike of billions of dollars 
on America's families, just as some of those that the gentleman 
mentioned in his congressional district.
  I know that the gentleman from Indiana (Mr. Kerns) earlier was 
talking about the death tax and marriage penalty relief, and I see my 
cosponsor of H.R. 2316, the gentleman from Wisconsin (Mr. Ryan), is 
here; and I look forward to hearing what he has to say.
  In today's Wall Street Journal there was an editorial in favor of 
permanence, and it was focusing on making the death tax repeal 
permanent. I absolutely agree with that, but I think the entire tax 
relief measure that we enacted in this Congress last year, all of those 
provisions, should be made permanent. Here is why:
  There are so many sole proprietors, small businesses in America, in 
fact, the majority of small businesses in America that actually pay the 
individual income tax rate. In other words, they did not pay the 
corporate income tax rate, but instead because they are sole 
proprietorships and partnerships, perhaps they are subchapter S 
corporations, they have the benefit of this individual income tax rate 
that they pay each April 15. As these income tax rates are reduced, and 
when they are fully phased in in 2006, small businesses are going to 
have additional resources for fostering economic growth and 
development. In other words, they capture that money that normally they 
would pay to the Federal Government, they get to reinvest it in their 
businesses which creates more jobs, provides additional spending power 
for those people who work for those small businesses. For then to say, 
to pull the rug out from underneath them on January 1, 2011, and say 
well, we know that you have enjoyed low tax rates of the last couple 
year, but on New Year's Day of 2011, these tax rates go back to the 
pre-2001 level, that is a significant income tax hike.
  It is for policy reasons that I think this body should act, and 
certainly I would call on all of those from both sides of the aisle 
that supported this bill a year ago. I think there were 28 Democrats 
who joined us in this bipartisan vote. If it was good policy then, it 
remains good policy now.
  Mr. WELLER. Mr. Speaker, reclaiming my time, I thank the gentleman 
from Missouri for his leadership and helping small businesses and 
agriculture. Seventy-nine percent of those who benefit from the rate 
reduction at the top bracket, as the gentleman pointed out, are self-
employed entrepreneurs and small business people. They are not rich 
people. These are folks down on Main Street.

                              {time}  2015

  They are real people that work hard, struggle to employ their 
neighbors and, of course, benefit when we lower the tax rate because, 
frankly, making permanent the Bush tax cut is also good for the 
economy.
  One thing I have heard time and time again from businesspeople and 
entrepreneurs and small businesspeople and

[[Page 4686]]

farmers is that when they know there is a provision in the Tax Code 
that affects them and it is permanent, they are more inclined to make 
long-term investment decisions. When the consequences are short-term, 
they are hesitant. So if we really want to get this economy moving 
again, it is one more reason to make permanent the Bush tax cut.
  We have been joined by the gentleman from Wisconsin (Mr. Ryan), a 
colleague of ours on the Committee on Ways and Means, someone who is 
one of the thinkers in the House when it comes to understanding policy 
and understanding also what it means for small business and for farmers 
and for working people in every community in America. I yield to the 
gentleman from Wisconsin.
  Mr. RYAN of Wisconsin. I thank the gentleman from Illinois for 
yielding. First before I contribute, I would like to thank the two of 
you gentlemen for your leadership on this issue. This is my first year 
on the Committee on Ways and Means. I have long known about the 
gentleman from Illinois' work on repealing the marriage penalty. He is 
the reason the marriage penalty is repealed in this legislation. He 
deserves the credit for that. And the gentleman from Missouri (Mr. 
Hulshof) who is my lead partner on this bill is the leading advocate 
for agriculture and tax policy and helping farmers, in Congress, I 
would add. I want to thank him for allowing me to join him in proposing 
this legislation and being his coauthor on this legislation to make 
this tax cut permanent.
  I have been watching the debate. It seems that you can wrap it up 
into four big issues. This tax bill, which we all worked very hard to 
pass, the President proposed, we worked on it in the Committee on Ways 
and Means, we passed it bipartisanly through the House, through the 
Senate and got it signed into law, this tax cut fixes four big 
inequities. It brings fairness to four major issues.
  As the gentleman from Illinois has championed, it brought fairness to 
the issue of the marriage penalty. It reduced and repealed the marriage 
tax penalty. But it did many other things. On the retirement end, we 
have a pension system that before this tax bill was written at a time 
in our pension laws, in our economy, when people did not change jobs 
that much. What we did in this bill was update our pension laws so 
people could move their pensions with them as they change jobs. We 
fixed a lot of the problems that have been experienced with the Tax 
Code in the new economy. They have been fixed in this bill.
  We increased the act for businesses to offer higher 401(k) matches to 
their employees. We increased the cap on 401(k)s. We increased the cap 
on IRAs from $2,000 to $5,000. That is another big problem, a big 
fairness issue that we restored in this bill. We also repealed the 
estate tax, a tax that has been the single greatest killer of the 
transfer of family farms and small businesses on to the next 
generation. And what we did in income tax rates, and as you gentlemen 
mentioned, almost 80 percent of the top rate bracket filers file as 
individuals, meaning the small businessmen and women of America are not 
corporations, they are not C corps, they do not file their taxes as 
large corporations, they file their taxes as subchapter S corps, as 
sole proprietorships. Therefore, they pay individual tax rates.
  What happens right now under the tax law, we are taxing small 
businesses at a rate higher than we tax the largest corporations. So 
the small business men and women of America on Main Street USA, in the 
barber shops, and all the small manufacturers, they were being taxed 
before this tax bill at nearly 40 percent, while we were taxing the 
largest corporations of America, IBM, General Motors, Chrysler at 35 
percent. This tax bill lowers that small business tax rate to the same 
tax rate as large corporations.
  Mr. WELLER. Let me ask the gentleman this question. Are you telling 
me that prior to the Bush tax cut, that self-employed people, 
entrepreneurs, small businesspeople actually paid at a higher tax rate 
than IBM or any other major corporations?
  Mr. RYAN of Wisconsin. That is exactly right. That is one of the 
injustices, one of the fairness issues we fixed in this tax bill. We 
finally lowered the small business tax rate to be equal with the 
corporate tax rate. Because before this tax cut, it was higher than 
that. Not only do we help Americans save for their retirement, not only 
do we repeal the estate tax in this bill, the single greatest killer of 
transfer of your business to the next generation, not only did we 
repeal the marriage penalty and not only did we lower the small 
business tax rate to that level of the large corporate tax rate, what 
we did was we helped people reinvest in their businesses, we helped 
people keep more of their own money.
  What is going to happen if this legislation to make this tax cut 
permanent does not pass is we will be imposing on January 1, 2011, the 
single largest tax increase in American history in any given year. We 
are going to impose on the American taxpayer a $125 billion tax 
increase that year.
  So, for example, if you are a small business owner or a family farmer 
and your estate is worth, they say, $3 million, there are a lot of 
small family farms in Wisconsin that are worth well more than $3 
million. They have a lot of assets locked up in combines, in land, in 
barns and other kinds of things. If you are a small business owner and 
you own some kind of small distribution business, you have some vans 
and trucks and a factory, $3 million can add up very quickly. If you 
died in the year 2010, you do not pay an estate tax. That is the 
correct way to do it, because you already paid taxes on all the money 
you earned while you were living. But if that person with the $3 
million estate dies on January 1, 2011, that person is going to have to 
pay $800,000 in estate tax. Just think of this. If you die in the year 
2010 when the estate tax is repealed, no tax. If you die the next year, 
$800,000.
  Mr. WELLER. I represent the south side of Chicago and the south 
suburbs, of course, an area that is going from farmland to subdivision 
in many cases. We have a lot of family farmers in the Frankfurt and 
Mokena area, in the Manhattan area in Will County, and they would like 
to stay in the farming business. But many of them have told me the 
story of when grandpa died, because the value of that land for 
development purposes, even though they wanted to keep it in the family 
farm, continue farming it, keep it in open space, because they like 
farming and it is a family business, because of the estate tax and the 
value of that land if they sold it to somebody who would develop it and 
build houses or put a factory there, turn it into an industrial park, 
they were forced to sell off a piece of grandpa's farm in order to pay 
the estate tax.
  So if you care about open space, about urban conservation, farmland 
and urban sprawl and frankly the environment, you should work for the 
elimination of the death tax. I know that was one of the arguments I 
heard many times from the farmers in my suburban area, if you care 
about the environment, about open space and the preservation of 
farmland, you want to eliminate the death tax.
  Mr. HULSHOF. I would like to amplify the point by my colleague from 
Wisconsin and coauthor of this bill to sunset the sunset. It is 
interesting that a New York Times columnist, as he was commenting on 
the work that we had done, and finally we were moving toward repeal of 
the death tax, but as the gentleman noted, for a single year, 2010, and 
this New York Times columnist dubbed what we had done, the ``throw 
momma from the train act,'' because the only way to take full advantage 
of the death tax repeal was to throw momma from the train in the year 
2010 because on January 1 of the next year, then here comes the death 
tax springing out of the grave, coming back to life.
  Mr. RYAN of Wisconsin. I appreciate that comment. That is what is so 
crazy about this arcane rule in the other body that was forced into 
this legislation that sunset this tax cut in the year 2011. If this 
legislation that we are now proposing does not pass, on the year 2011, 
the estate tax goes from zero

[[Page 4687]]

to 55 percent. The education IRAs go from a $2,000 limit back down to 
$500. The IRAs, individual retirement accounts, go from a $5,000 per 
year limit back down to $2,000. 401(k)s go back from $15,000 per year 
down to $10,500. The marriage tax penalty comes back to haunt us. All 
of those things that we will have been accustomed to over the decade, 
all of those tax inequities, marriage tax penalty, estate tax, taxing 
small businesses at a higher rate than corporations, all will come back 
in that one year to sock it to the American economy. That is one thing 
that I think we need to bear in mind.
  What is this going to do to our economy? I hear it from so many small 
business members and entrepreneurs and farmers in my district, that 
they say, we cannot plan appropriately for the future. There is so much 
hesitancy built into the marketplace all across America because they do 
not know as small business men and women whether they can bank on the 
fact that these tax laws are going to be made permanent. So they 
withhold that investment. They do not take that extra risk. The bank 
will not give them credit because they do not know what is going to 
happen in the future with respect to tax law. So we see a hesitancy 
built into the marketplace. That means less risk, less job creation, 
less economic growth.
  Mr. HULSHOF. As we have already begun to debate this and as 
representatives of the media have begun to inquire about the bill being 
on the floor this week, and one question that I think we have to 
continue to answer this week as we move forward the bill's 
consideration on Thursday is why are we taking up the bill now? If we 
are talking about something, the sunset actually not taking effect 
until January 1 of 2011, why consider the bill now?
  I think the gentleman has, in part, answered the question, because if 
you are a small businessperson, certainty in the Tax Code is 
appropriate as you make long-term decisions about your own business. 
Moreover, especially the death tax. You cannot legitimately plan or 
have an estate plan based upon the uncertainty of the death tax being 
gone today and back tomorrow. And so that certainty is necessary. I 
would say to those green eyeshade wearers in this body, I do not mean 
to denigrate because there are fiscal considerations to this as well, 
but I was informed by one of the media representatives today that the 
Senate majority leader said that a vote on permanence would be fiscally 
irresponsible. And so I want to answer with certain budget numbers, 
that this is fiscally responsible. If we were to enact permanence to 
the tax cut of a year ago, the revenue impact would be $374 billion 
over the next 10 years. The amount, the most recent projection by the 
Congressional Budget Office, that is, our bookkeepers for the House, 
propose that over that same period of time, we will be taking in a 
surplus of $2.332 trillion. And so this really, as far as the 
fiscalness of what we are taking up, is appropriate.
  I think, again, the worst thing we could do is allow these tax items, 
the many tax relief measures that we have been talking about, to 
somehow allow them to be what we know in parlance to be called 
extenders, that is, just as they are getting ready to expire, maybe 
giving another 2 or 3-year extension of that tax cut. Again, I think 
that just breeds a lot of uncertainty.
  And so from a policy perspective, I think it is so vitally important 
that we enact this permanence.
  Getting away from the numbers, if the gentleman would permit me just 
another minute or so, I do not have a photograph, but a family that has 
actually been portrayed, I think, in USA Today and some other national 
publications is the Eiffert family. Howard Eiffert, the constituent, is 
from Columbia, Missouri. Howard Eiffert began a lumber business back 
about 37 years ago. He has two sons now, Brad and Greg. Brad and Greg 
Eiffert are running the lumber business. It is a fairly small business. 
It employs about 32 people. Yet they are so concerned about the estate 
tax or the death tax that they have reported that annually they 
contribute between $30,000 and $35,000 a year to purchase an insurance 
policy on the life of Howard Eiffert, the founder of this company, in 
the event that he were to meet his demise in that year and that 
insurance policy then would pay the Federal Government this estate tax 
bill.
  Brad and Greg, who now run this company, have expressed to me so many 
times, and very passionately, think of what that business could do with 
another 30 to $35,000 a year. It could be a well-paying job for another 
employee every year. It could be maybe another piece of equipment. It 
could be adding on to their warehouse where they keep the lumber and 
their inventory. It could be a lot of things. But unless we make the 
death tax permanent, unless we take this entire tax cut of a year ago 
and make that tax cut permanent, there is going to be this continued 
uncertainty, which is a drain on our small businesses across the 
country. That is why I hope for a good vote this week.

                              {time}  2030

  Mr. RYAN of Wisconsin. I want to point out also the score the 
gentleman mentioned, the revenue cost that is assumed by the 
Congressional Budget Office. What is interesting about that score is 
not so much that it is $374 billion out of a surplus of $2.3 trillion. 
It is that that is the most dour and pessimistic, conservative score 
anybody could come up with, because that score assumes that people will 
not change their behavior when their taxes are cut.
  That score denies the assumption that if we lock in permanency we are 
going to unleash a lot of investment out there. When we lock in 
certainty to the small American businessman and businesswoman and 
entrepreneur, that, yes, this tax law is permanent and now you can move 
on with certainty to expand your job and invest, that we are going to 
get positive economic growth out of that, I believe that the economic 
positive benefits we are going to get out of this bill will more than 
make up for a lot of the revenue costs we are assuming.
  They assume no one makes a change if their taxes are changed. They 
assume no positive economic growth is derived from a lowering of 
marginal income tax rates or repeal of the estate tax. They just assume 
it is a loss of revenue to the government.
  So even though we now can point out that the loss of revenue 
according to our budget keepers is minuscule in comparison to the size 
of the surplus over the decade, they do not point out all of those 
positive economic benefits, the jobs that will be created, the 
investment that will be unleashed, by making certainty in this tax 
bill.
  Mr. WELLER. Reclaiming my time, again I want to commend the gentleman 
from Missouri (Mr. Hulshof) and the gentleman from Wisconsin (Mr. Ryan) 
for their leadership on making permanent what we call the Bush tax cut 
and what the real impact is on families.
  When we think about it, voting against permanency is a tax increase. 
It is a tax increase on millions of Americans. The Bush tax cut 
actually provides help for 100 million Americans who benefited from the 
Bush tax cuts: across-the-board rate reductions, which helped everyone 
who pays taxes; elimination of the marriage tax penalty; elimination of 
the death tax; doubling the child tax credit; increased opportunity for 
retirement savings and saving for education.
  If you vote against making it permanent, you are really voting to put 
the marriage tax penalty back on Jose and Magdalene Castillo, or Shad 
and Michelle Hallihan and 28 million other married working couples 
across America who pay higher taxes, or the hundreds of thousands of 
small businesses and family farms that are in jeopardy of moving on to 
the next generation because of the death tax; and if we fail to make 
permanent the elimination of the death tax, we put it back in place, 
jeopardizing the future of the family farm and the family business.
  If you care about retirement savings, well, if you vote against 
making permanent the Bush tax cut, you better save every dime that you 
are capable of doing right now, because in 2011 you will go back to 
$500, versus the $2,000

[[Page 4688]]

for education savings accounts, or $2,000 versus $5,000 for your IRA. 
Those are tax increases.
  Some are going to argue that we should not make it permanent because 
they want to spend the money. They think it is better that we collect 
that money and reimpose those taxes and collect that money and spend it 
here in Washington, because Washington can better spend the folks back 
home's hard-earned dollars better than they can.
  I was so proud of the leadership of President Bush, and I was so 
proud of the leadership of Speaker Hastert and the Republican majority 
in this House and moving through the Bush tax cut, because, similar to 
the Kennedy and Reagan tax cuts, this tax cut is meaningful. One 
hundred million Americans benefit.
  Again, let me share those statistics of who benefits from the Bush 
tax cut and our efforts to make it permanent. Again, 100 million 
individuals and families pay lower taxes because of the Bush tax cut. 
If we fail to make it permanent, their taxes go up.
  Forty-three million married couples see their taxes reduced on 
average by more than $1,700 a year. If you vote against making the Bush 
tax cut term permanent, you are reimposing a marriage tax penalties on 
Jose and Magdalene Castillo, who right now save about $1,125 a year 
because of marriage tax penalty relief.
  Thirty-eight million families a year with children, Jose and 
Magdalene are an example here with Eduardo and Carolina, they benefit 
from the child tax credit as well. If you fail to make the Bush tax cut 
permanent, you take that away from them and raise their taxes on their 
kids. That is wrong.
  I have a note that 13 million senior citizens have seen their taxes 
reduced under the Bush tax cut on average by $920, and 3.9 million 
taxpayers, including 3 million taxpayers with children, had their tax 
liability to the Federal Government completely, completely wiped out.
  Mr. RYAN of Wisconsin. If the gentleman will yield on that point, 
what was that number again?
  Mr. WELLER. Three million families with children no longer pay 
Federal income taxes because of the Bush tax cut.
  Mr. RYAN of Wisconsin. Under the Bush tax cut, over 3 million 
families are being taken off the Federal income tax roles and would be 
put back on, they would have new taxes reimposed back on them, if this 
tax bill is not made permanent?
  Mr. WELLER. Reclaiming my time, the gentleman from Wisconsin is 
absolutely right. Three million families with children would be placed 
back on the tax rolls, and 3.9 million taxpayers would be placed back 
on the tax rolls.
  Mr. RYAN of Wisconsin. Three million families hit with a new tax in 
the year 2011.
  Mr. WELLER. Yes. The gentleman from Wisconsin is absolutely correct. 
If you think about it, who are those families? Who are those 
individuals? They are low-income Americans. The biggest beneficiaries 
of the Bush tax cut, what we passed this past year, were low-income 
families, because low-income families saw the biggest portion of their 
taxes wiped out. If you think about it, 3 million Americans with 
children who previously had paid taxes no longer pay Federal taxes. 
That is total simplification of their taxes. They no longer have to pay 
taxes.
  What happens to the money that would have come to Washington? They 
can spend it back home in Janesville, Wisconsin, and Morris, Illinois, 
and Columbia, Missouri, fine communities, where there are hard-working 
people who can better spend their hard-earned dollars better than we 
can for them and take care of their families' needs, and maybe buy some 
new clothes for the kids to go to school, or make an addition on to the 
family house, build an extra bedroom for the children. They have all 
been bunking together, and they are getting older and they want to put 
an addition on the house. So they can afford to do it with the Bush tax 
cut. But if you vote against permanency, you are reimposing that and 
hurting those 3.9 million families who no longer pay taxes because of 
the Bush tax cut.
  I would like to ask the gentleman from Missouri, and be happy to 
yield, you have also been one of the leaders on retirement savings. Of 
course, the Bush tax cut built upon a lot of the work done by our 
colleague, the gentleman from Ohio (Mr. Portman), and many others who 
have worked so hard to increase the opportunity for small businesses to 
offer additional retirement savings opportunities for their workers, 
and also for individuals to be able to set aside money in their IRAs.
  I would be happy to yield to the gentleman to explain that portion of 
the Bush tax cut.
  Mr. HULSHOF. I appreciate the gentleman yielding.
  What is interesting about our Tax Code is it really does punish those 
who wish to save and invest. There are so many other nations that have 
a higher savings rate than the United States of America because we have 
built into our code, in fact, I am so familiar again with my 1040, 
having just spent so much time with it, line 8 of your 1040 says what 
was your interest income, put that here, because we are going to tax 
it. A lot of nations do not do that.
  So we have tried in various ways to help American families, 
especially as they look way down the road at retirement. We have a 
vexing problem ahead of us as far as the baby boomers retiring and the 
future solvency of Social Security. That is an issue for another day.
  But what we have done over the course of Congress, since 1997, as the 
gentleman recalls the significant tax relief that we passed back in 
1997, that was actually signed into law by then President Clinton, we 
created some additional savings vehicles and tried to expand the 
opportunities for families to put money aside in 401(k) plans, or, as 
the gentleman knows, really a pet issue of mine, to help parents save 
for their childrens' education. Back in 1997, the idea was created of 
an education savings accounts. Now we have the ability, because of last 
summer's tax cut, the Bush tax cut, as the gentleman has referred to 
it, we have now given more flexibility to families to put money, or 
even neighbors or churches or businesses, to put money into a family's 
education account in the name of their child.
  It used to be pretty strict as to what that education account could 
be used for. Now we have some flexibility. Not only can you contribute 
more money into it, up to $2,000 a year, but it is not just for those 
students, those children who go to public college. It could be used for 
any educational expense for any child. It could be K through 12. It 
could be a tutor at school if you are having trouble with 4th grade 
math. It could be a computer program, it could be a foreign language 
skill or some help in that regard. It can be anything to help educate 
our kids.
  So this was a tremendous change, a positive change. We called it the 
Coverdell account in honor of the late Senator from Georgia who had 
first created this idea back in 1997 of putting aside money and letting 
the interest that is built up be tax free.
  I hesitate to think, I shudder to think, that if we do not make this 
tax cut permanent, that that flexibility is gone, the ability to 
contribute money into that education account, up to $2,000 a year, is 
gone.
  So the number of positive tax changes that we have helped create, in 
a bipartisan way, friends across the aisle have helped vote for it, 
worked for some of these items, those items would be no longer in the 
Tax Code. That positive tax relief would be obliterated if this House 
and Congress do not act to make the tax cut permanent.
  Mr. WELLER. Reclaiming my time, again, I salute the gentleman from 
Missouri for his leadership in helping expand education savings 
accounts. I think of thousands of families in the district that I 
represent, the South Side of Chicago and the south suburbs, who now 
have the opportunity, thanks to your leadership, to be able to set 
aside money for elementary and secondary education, schools of their 
choice, or else for other expenses affecting their child's education.
  In the past it was only for college and you could only set aside 
$500; but

[[Page 4689]]

under the gentleman's leadership, you can set aside up to $2,000. Think 
about that. When a child turns 18, if you could only set aside $500, 
that is $9,000. Well, we all know what college costs today, and that 
would not go very far at a year's tuition at most universities across 
this country.
  But thanks to the gentleman's leadership, now they would be able to 
set aside $2,000 a year and potentially have up to $36,000 that they 
could save and set aside for college, if they do not spend any of that 
for elementary or secondary education.
  So I commend the gentleman for his leadership. That means a lot to 
the people of the south suburbs, towns in Joliet and elsewhere.
  We have been joined by my other seatmate on the Committee on Ways and 
Means, a classmate of mine. I remember when the gentleman from Arizona 
(Mr. Hayworth) and I were elected to Congress. Of course, we were 
working on the Contract with America, and a key part of the Contract 
with America was lowering taxes for families. Of course, part of 
Contract with America was eliminating the marriage tax penalty, 
creating a new adoption tax credit, creating a new child tax credit.
  Thanks to the leadership of many, and particularly the gentleman from 
Arizona, we created that new adoption tax credit. Of course, we expand 
it in the Bush tax cut and make it bigger. And we created the child tax 
credit as part of the Contract with America, and we have doubled that 
under the Bush tax cut. If we fail to make it permanent, we lose it. It 
is taken away.
  I would be happy to yield to the gentleman from Arizona (Mr. 
Hayworth).
  Mr. HAYWORTH. Mr. Speaker, I thank my colleague from Illinois, Mr. 
Speaker; and I thank my other colleagues the Committee on Ways and 
Means, the gentleman from Missouri and the gentleman from Wisconsin, 
for joining us this evening.
  In listening to my friend from Missouri speak about the different 
opportunities, I was struck by really two themes running through his 
discourse. One is the notion of flexibility and freedom, and the other 
a basic philosophy that we really need to change, and we have played a 
great role in changing it, and that is the notion that people should 
not be punished for succeeding; that they should have the possibilities 
economically to deal with whatever challenges confront them in life.
  My friend from Missouri talked about educational tax credits, and 
certainly our heart goes out not only to those who are planning for 
college, but children with special needs, the opportunity to help 
parents of a Down's Syndrome child, provide educational opportunities 
through the Tax Code to enhance their options and flexibility, not to 
wait upon the largesse of government, but to utilize their own money 
for their own legitimate interests and their own timetable.
  That is really what it comes down to, to transfer money, power and 
influence out of the hands of a bureaucracy, an impersonal bureaucracy 
in Washington, D.C. and understand that the money utilized does not 
belong to the Federal Government.
  I look and I see my friend from Arizona serving tonight as Speaker 
pro tem. Last night we were at the State Capital in Phoenix discussing 
the realization that the money people gave voluntarily April 15 is 
their money.

                              {time}  2045

  They give to the Federal Government ``voluntarily.'' When we allow 
people to have more of their own money to save, spend, and invest as 
they see fit, things work better for them, and government actually 
works better.
  The other thing that my colleagues have talked about tonight is the 
bipartisan nature of this historically. Think back to recent history. 
Four decades ago it was Jack Kennedy who said, let us reduce the 
marginal tax rates; in his words, ``a rising tide lifts all boats.'' 
Two decades ago it was President Ronald Reagan who suggested the same 
thing, and then just last year, working with our current President, 
George W. Bush, we were able to again enact marginal rate reductions.
  Now, here is something, and this is one of the things I lament in the 
way Washington works. Given the arcana of the budget and the way we 
predict things here, it is very Washington-centric. We take a look at 
what is called a static model. We fail to take into account growth in 
revenues to the Federal Government. It is a historical fact that under 
Jack Kennedy and under Ronald Reagan, when we reduced the tax rates, 
revenues actually increased to the Federal Government.
  The gentleman from Arizona in the Chair tonight made the point last 
night at the State capital. And, we recall this as members of the 
Committee on Ways and Means in 1997 when we, through cheerful 
persistence, persuaded a reluctant President to join us in a reduction 
in the top rate of capital gains taxation, especially for primary 
residences that cost less than $600,000, and what that meant to housing 
starts and new home sales and just a change in the real estate market.
  But it was very interesting; the gentleman from Arizona, the Speaker 
pro tempore tonight, made the point that the forecasters, the 
estimators said that that capital gains rate reduction was going to 
cost the Federal Government. Yet, the reality is in terms of revenue 
accrued, it has been a triple-digit winner. Revenue has been produced. 
Why? Because it is a simple notion, regardless of party affiliation. 
The simple fact that the budgeteers do not want to recognize is this: 
reduction in tax rates leads to economic activity, leads to job 
creation, especially when we reduce the capital gains rate, leads to 
capital formation and the use of capital, putting it to work. When we 
do that in an economy, a people prosper. Indeed, one magazine in town 
asked our friends on the left if they were really concerned about 
revenues to the government, perhaps they should join us in asking for 
tax reductions because overall revenues increase, based on economic 
activity.
  So it is simple self-interest, not selfishness, but a chance just as 
President Kennedy said in the 1960s, that a rising tide lifts all the 
boats, and as President Reagan said in the 1980s, that people can save, 
spend, and invest their money as they see fit, rather than keeping 
Washington in charge, or as President Bush said in Iowa yesterday: 
expand the recovery, take the lesson that we learned in the economic 
downturn, and even in the wake of the dark days, in the aftermath of 9-
11 and the uncertainty we confronted then, and move to make the 
marginal tax relief and the other provisions that my colleagues have 
discussed tonight, Mr. Speaker, move to make that permanent so that we 
can continue to grow this economy and people will have the freedom and 
the flexibility to choose what is right for them, and they will not 
wait upon government programs for improvement, with educational 
opportunities, especially for those children with special needs, with 
the purchase of a home, with the starting of a business, with the 
raising of a family; indeed, every facet of American life, give people 
the freedom to recognize the money belongs to them.
  Mr. Speaker, we made substantive changes in the Tax Code and it is a 
start, but we need to follow the call of our Commander in Chief who 
asks now that we finish the job, that we make these rate reductions 
permanent, so that the economic renaissance and the rebuilding and the 
restoration of our economic conditions toward greatness can continue. I 
thank the gentleman.
  Mr. WELLER. Mr. Speaker, I would be happy to yield some additional 
time to the gentleman from Arizona, and I would like to ask the 
gentleman from Arizona a question. We have been noting in our 
conversation here about the 100 million Americans who benefit from what 
we call the Bush tax cut and that, of course, is the fact that there 
are 3 million Americans who, under the Bush tax cut, no longer pay 
Federal taxes, low-income families. Of course, if we fail to make it 
permanent, those low-income families are taxed once again, and that 79 
percent of those who benefit from the top rate reduction are small 
business entrepreneurs. I am happy to yield the remaining time to the 
gentleman from Arizona.

[[Page 4690]]


  Mr. HAYWORTH. Mr. Speaker, one fact which we should remember and 
which should give every Member of this House pause, if we fail to make 
these tax cuts permanent, then a decade hence, we will see the largest 
tax increase in American history eclipsing what we saw in 1993 under 
former President Clinton.
  Mr. WELLER. Mr. Speaker, in closing, again, we have a very important 
vote on Thursday. Thursday morning this House of Representatives is 
going to cast a vote on whether or not to make what we call the Bush 
tax cut permanent. A vote against permanency is a vote for the biggest 
tax increase in the history of our Nation, or do we continue to help 
those 100 million Americans who benefit from the Bush tax cut who see 
their rates reduced, 3 million Americans who no longer pay taxes, 
couples such as Jose and Magdalene Castillo who will no longer pay the 
marriage tax penalty, but if the tax cut expires, they will once again, 
because people like the Castillos from Joliette, Illinois will once 
again pay the marriage tax penalty. Let us make it permanent. Let us do 
the right thing. Let us prevent the world's largest tax increase.

                          ____________________