[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[House]
[Pages 4959-4982]
[From the U.S. Government Publishing Office, www.gpo.gov]




             FAIRNESS FOR FOSTER CARE FAMILIES ACT OF 2001

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 390, I call up 
from the Speaker's table the bill (H.R. 586) to amend the Internal 
Revenue Code of 1986 to provide that the exclusion from gross income 
for foster care payments shall also apply to payments by qualified 
placement agencies, and for other purposes, with a Senate amendment 
thereto, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The text of the Senate amendment is as follows:

       Senate amendment:
       Page 3, after line 19, insert:

     SEC. 3. ACCELERATION OF EFFECTIVE DATE FOR EXPANSION OF 
                   ADOPTION TAX CREDIT AND ADOPTION ASSISTANCE 
                   PROGRAMS.

       Subsection (g) of section 202 of the Economic Growth and 
     Tax Relief Reconciliation Act of 2001 is amended to read as 
     follows:
       ``(g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.''.


                      Motion Offered by Mr. Thomas

  Mr. THOMAS. Mr. Speaker, I offer a motion.
  The SPEAKER pro tempore. The Clerk will designate the motion.
  The text of the motion is as follows:

       Mr. Thomas moves that the House concur in the Senate 
     amendment with an amendment, as follows:
       In lieu of the matter proposed to be inserted by the 
     Senate, 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 Relief 
     Guarantee Act of 2002''.
       (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.

                 TITLE I--TAX REDUCTIONS MADE PERMANENT

Sec. 101. Tax reductions made permanent.
Sec. 102. Protection of social security and medicare.

          TITLE II--TAXPAYER PROTECTION AND IRS ACCOUNTABILITY

Sec. 201. Short title.

                   Subtitle A--Penalties and Interest

Sec. 211. Failure to pay estimated tax penalty converted to interest 
              charge on accumulated unpaid balance.
Sec. 212. Exclusion from gross income for interest on overpayments of 
              income tax by individuals.
Sec. 213. Abatement of interest.
Sec. 214. Deposits made to suspend running of interest on potential 
              underpayments.
Sec. 215. Expansion of interest netting for individuals.
Sec. 216. Waiver of certain penalties for first-time unintentional 
              minor errors.
Sec. 217. Frivolous tax submissions.
Sec. 218. Clarification of application of Federal tax deposit penalty.

             Subtitle B--Fairness of Collection Procedures

Sec. 221. Partial payment of tax liability in installment agreements.
Sec. 222. Extension of time for return of property.
Sec. 223. Individuals held harmless on wrongful levy, etc. on 
              individual retirement plan.
Sec. 224. Seven-day threshold on tolling of statute of limitations 
              during tax review.
Sec. 225. Study of liens and levies.

              Subtitle C--Efficiency of Tax Administration

Sec. 231. Revisions relating to termination of employment of Internal 
              Revenue Service employees for misconduct.
Sec. 232. Confirmation of authority of Tax Court to apply doctrine of 
              equitable recoupment.
Sec. 233. Jurisdiction of Tax Court over collection due process cases.
Sec. 234. Office of Chief Counsel review of offers in compromise.
Sec. 235. 15-day delay in due date for electronically filed individual 
              income tax returns.

               Subtitle D--Confidentiality and Disclosure

Sec. 241. Collection activities with respect to joint return 
              disclosable to either spouse based on oral request.
Sec. 242. Taxpayer representatives not subject to examination on sole 
              basis of representation of taxpayers.
Sec. 243. Disclosure in judicial or administrative tax proceedings of 
              return and return information of persons who are not 
              party to such proceedings.
Sec. 244. Prohibition of disclosure of taxpayer identification 
              information with respect to disclosure of accepted 
              offers-in-compromise.
Sec. 245. Compliance by contractors with confidentiality safeguards.
Sec. 246. Higher standards for requests for and consents to disclosure.
Sec. 247. Notice to taxpayer concerning administrative determination of 
              browsing; annual report.
Sec. 248. Expanded disclosure in emergency circumstances.
Sec. 249. Disclosure of taxpayer identity for tax refund purposes.

                       Subtitle E--Miscellaneous

Sec. 251. Clarification of definition of church tax inquiry.
Sec. 252. Expansion of declaratory judgment remedy to tax-exempt 
              organizations.
Sec. 253. Employee misconduct report to include summary of complaints 
              by category.
Sec. 254. Annual report on awards of costs and certain fees in 
              administrative and court proceedings.
Sec. 255. Annual report on abatement of penalties.
Sec. 256. Better means of communicating with taxpayers.
Sec. 257. Explanation of statute of limitations and consequences of 
              failure to file.
Sec. 258. Amendment to Treasury auction reforms.
Sec. 259. Enrolled agents.
Sec. 260. Financial management service fees.
Sec. 261. Capital gain treatment under section 631(b) to apply to 
              outright sales by land owner.
Sec. 262. Acceleration of effective date for expansion of adoption tax 
              credit and adoption assistance programs.

                Subtitle F--Low-Income Taxpayer Clinics

Sec. 271. Low-income taxpayer clinics.

                 TITLE I--TAX REDUCTIONS MADE PERMANENT

     SEC. 101. TAX REDUCTIONS MADE PERMANENT.

       Title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is hereby repealed.

     SEC. 102. PROTECTION OF SOCIAL SECURITY AND MEDICARE.

       The amounts transferred to any trust fund under the Social 
     Security Act shall be determined as if the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 had not been 
     enacted.

          TITLE II--TAXPAYER PROTECTION AND IRS ACCOUNTABILITY

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Taxpayer Protection and 
     IRS Accountability Act of 2002''.

                   Subtitle A--Penalties and Interest

     SEC. 211. FAILURE TO PAY ESTIMATED TAX PENALTY CONVERTED TO 
                   INTEREST CHARGE ON ACCUMULATED UNPAID BALANCE.

       (a) Penalty Moved to Interest Chapter of Code.--The 
     Internal Revenue Code of 1986 is amended by redesignating 
     section 6654 as section 6641 and by moving section 6641 (as 
     so redesignated) from part I of subchapter A of chapter 68 to 
     the end of subchapter E of chapter 67 (as added by subsection 
     (e)(1) of this section).
       (b) Penalty Converted to Interest Charge.--The heading and 
     subsections (a) and (b) of section 6641 (as so redesignated) 
     are amended to read as follows:

     ``SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY 
                   ESTIMATED INCOME TAX.

       ``(a) In General.--Interest shall be paid on any 
     underpayment of estimated tax by an individual for a taxable 
     year for each day of such underpayment. The amount of such 
     interest for any day shall be the product of the underpayment 
     rate established under subsection (b)(2) multiplied by the 
     amount of the underpayment.
       ``(b) Amount of Underpayment; Interest Rate.--For purposes 
     of subsection (a)--
       ``(1) Amount.--The amount of the underpayment on any day 
     shall be the excess of--
       ``(A) the sum of the required installments for the taxable 
     year the due dates for which are on or before such day, over
       ``(B) the sum of the amounts (if any) of estimated tax 
     payments made on or before such day on such required 
     installments.
       ``(2) Determination of interest rate.--
       ``(A) In general.--The underpayment rate with respect to 
     any day in an installment underpayment period shall be the 
     underpayment rate established under section 6621

[[Page 4960]]

     for the first day of the calendar quarter in which such 
     installment underpayment period begins.
       ``(B) Installment underpayment period.--For purposes of 
     subparagraph (A), the term `installment underpayment period' 
     means the period beginning on the day after the due date for 
     a required installment and ending on the due date for the 
     subsequent required installment (or in the case of the 4th 
     required installment, the 15th day of the 4th month following 
     the close of a taxable year).
       ``(C) Daily rate.--The rate determined under subparagraph 
     (A) shall be applied on a daily basis and shall be based on 
     the assumption of 365 days in a calendar year.
       ``(3) Termination of estimated tax interest.--No day after 
     the end of the installment underpayment period for the 4th 
     required installment specified in paragraph (2)(B) for a 
     taxable year shall be treated as a day of underpayment with 
     respect to such taxable year.''.
       (c) Increase in Safe Harbor Where Tax is Small.--
       (1) In general.--Clause (i) of section 6641(d)(1)(B) (as so 
     redesignated) is amended to read as follows:
       ``(i) the lesser of--

       ``(I) 90 percent of the tax shown on the return for the 
     taxable year (or, if no return is filed, 90 percent of the 
     tax for such year), or
       ``(II) the tax shown on the return for the taxable year 
     (or, if no return is filed, the tax for such year) reduced 
     (but not below zero) by $2,000, or''.

       (2) Conforming amendment.--Subsection (e) of section 6641 
     (as so redesignated) is amended by striking paragraph (1) and 
     redesignating paragraphs (2) and (3) as paragraphs (1) and 
     (2), respectively.
       (d) Conforming Amendments.--
       (1) Paragraphs (1) and (2) of subsection (e) (as 
     redesignated by subsection (c)(2)) and subsection (h) of 
     section 6641 (as so designated) are each amended by striking 
     ``addition to tax'' each place it occurs and inserting 
     ``interest''.
       (2) Section 167(g)(5)(D) is amended by striking ``6654'' 
     and inserting ``6641''.
       (3) Section 460(b)(1) is amended by striking ``6654'' and 
     inserting ``6641''.
       (4) Section 3510(b) is amended--
       (A) by striking ``section 6654'' in paragraph (1) and 
     inserting ``section 6641'';
       (B) by amending paragraph (2)(B) to read as follows:
       ``(B) no interest would be required to be paid (but for 
     this section) under 6641 for such taxable year by reason of 
     the $2,000 amount specified in section 
     6641(d)(1)(B)(i)(II).'';
       (C) by striking ``section 6654(d)(2)'' in paragraph (3) and 
     inserting ``section 6641(d)(2)''; and
       (D) by striking paragraph (4).
       (5) Section 6201(b)(1) is amended by striking ``6654'' and 
     inserting ``6641''.
       (6) Section 6601(h) is amended by striking ``6654'' and 
     inserting ``6641''.
       (7) Section 6621(b)(2)(B) is amended by striking ``addition 
     to tax under section 6654'' and inserting ``interest required 
     to be paid under section 6641''.
       (8) Section 6622(b) is amended--
       (A) by striking ``Penalty for'' in the heading; and
       (B) by striking ``addition to tax under section 6654 or 
     6655'' and inserting ``interest required to be paid under 
     section 6641 or addition to tax under section 6655''.
       (9) Section 6658(a) is amended--
       (A) by striking ``6654, or 6655'' and inserting ``or 6655, 
     and no interest shall be required to be paid under section 
     6641,''; and
       (B) by inserting ``or paying interest'' after ``the tax'' 
     in paragraph (2)(B)(ii).
       (10) Section 6665(b) is amended--
       (A) in the matter preceding paragraph (1) by striking ``, 
     6654,''; and
       (B) in paragraph (2) by striking ``6654 or''.
       (11) Section 7203 is amended by striking ``section 6654 or 
     6655'' and inserting ``section 6655 or interest required to 
     be paid under section 6641''.
       (e) Clerical Amendments.--
       (1) Chapter 67 is amended by inserting after subchapter D 
     the following:

  ``Subchapter E--Interest on Failure by Individual to Pay Estimated 
                               Income Tax

``Sec. 6641. Interest on failure by individual to pay estimated income 
              tax.''.

       (2) The table of subchapters for chapter 67 is amended by 
     adding at the end the following new items:

``Subchapter D. Notice requirements.
``Subchapter E. Interest on failure by individual to pay estimated 
              income tax.''.

       (3) The table of sections for part I of subchapter A of 
     chapter 68 is amended by striking the item relating to 
     section 6654.
       (f) Effective Date.--The amendments made by this section 
     shall apply to installment payments for taxable years 
     beginning after December 31, 2002.

     SEC. 212. EXCLUSION FROM GROSS INCOME FOR INTEREST ON 
                   OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by inserting after section 139 the following new 
     section:

     ``SEC. 139A. EXCLUSION FROM GROSS INCOME FOR INTEREST ON 
                   OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.

       ``(a) In General.--In the case of an individual, gross 
     income shall not include interest paid under section 6611 on 
     any overpayment of tax imposed by this subtitle.
       ``(b) Exception.--Subsection (a) shall not apply in the 
     case of a failure to claim items resulting in the overpayment 
     on the original return if the Secretary determines that the 
     principal purpose of such failure is to take advantage of 
     subsection (a).
       ``(c) Special Rule for Determining Modified Adjusted Gross 
     Income.--For purposes of this title, interest not included in 
     gross income under subsection (a) shall not be treated as 
     interest which is exempt from tax for purposes of sections 
     32(i)(2)(B) and 6012(d) or any computation in which interest 
     exempt from tax under this title is added to adjusted gross 
     income.''.
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 is amended by inserting after 
     the item relating to section 139 the following new item:

``Sec. 139A. Exclusion from gross income for interest on overpayments 
              of income tax by individuals.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to interest received in calendar years beginning 
     after the date of the enactment of this Act.

     SEC. 213. ABATEMENT OF INTEREST.

       (a) Abatement of Interest With Respect to Erroneous Refund 
     Check Without Regard to Size of Refund.--Paragraph (2) of 
     section 6404(e) is amended by striking ``unless--'' and all 
     that follows and inserting ``unless the taxpayer (or a 
     related party) has in any way caused such erroneous 
     refund.''.
       (b) Abatement of Interest to Extent Interest is 
     Attributable to Taxpayer Reliance on Written Statements of 
     the IRS.--Subsection (f) of section 6404 is amended--
       (1) in the subsection heading, by striking ``Penalty or 
     Addition'' and inserting ``Interest, Penalty, or Addition''; 
     and
       (2) in paragraph (1) and in subparagraph (B) of paragraph 
     (2), by striking ``penalty or addition'' and inserting 
     ``interest, penalty, or addition''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to interest accruing on or after the 
     date of the enactment of this Act.

     SEC. 214. DEPOSITS MADE TO SUSPEND RUNNING OF INTEREST ON 
                   POTENTIAL UNDERPAYMENTS.

       (a) In General.--Subchapter A of chapter 67 (relating to 
     interest on underpayments) is amended by adding at the end 
     the following new section:

     ``SEC. 6603. DEPOSITS MADE TO SUSPEND RUNNING OF INTEREST ON 
                   POTENTIAL UNDERPAYMENTS, ETC.

       ``(a) Authority To Make Deposits Other Than As Payment of 
     Tax.--A taxpayer may make a cash deposit with the Secretary 
     which may be used by the Secretary to pay any tax imposed 
     under subtitle A or B or chapter 41, 42, 43, or 44 which has 
     not been assessed at the time of the deposit. Such a deposit 
     shall be made in such manner as the Secretary shall 
     prescribe.
       ``(b) No Interest Imposed.--To the extent that such deposit 
     is used by the Secretary to pay tax, for purposes of section 
     6601 (relating to interest on underpayments), the tax shall 
     be treated as paid when the deposit is made.
       ``(c) Return of Deposit.--Except in a case where the 
     Secretary determines that collection of tax is in jeopardy, 
     the Secretary shall return to the taxpayer any amount of the 
     deposit (to the extent not used for a payment of tax) which 
     the taxpayer requests in writing.
       ``(d) Payment of Interest.--
       ``(1) In general.--For purposes of section 6611 (relating 
     to interest on overpayments), a deposit which is returned to 
     a taxpayer shall be treated as a payment of tax for any 
     period to the extent (and only to the extent) attributable to 
     a disputable tax for such period. Under regulations 
     prescribed by the Secretary, rules similar to the rules of 
     section 6611(b)(2) shall apply.
       ``(2) Disputable tax.--
       ``(A) In general.--For purposes of this section, the term 
     `disputable tax' means the amount of tax specified at the 
     time of the deposit as the taxpayer's reasonable estimate of 
     the maximum amount of any tax attributable to disputable 
     items.
       ``(B) Safe harbor based on 30-day letter.--In the case of a 
     taxpayer who has been issued a 30-day letter, the maximum 
     amount of tax under subparagraph (A) shall not be less than 
     the amount of the proposed deficiency specified in such 
     letter.
       ``(3) Other definitions.--For purposes of paragraph (2)--
       ``(A) Disputable item.--The term `disputable item' means 
     any item of income, gain, loss, deduction, or credit if the 
     taxpayer--
       ``(i) has a reasonable basis for its treatment of such 
     item, and
       ``(ii) reasonably believes that the Secretary also has a 
     reasonable basis for disallowing the taxpayer's treatment of 
     such item.
       ``(B) 30-day letter.--The term `30-day letter' means the 
     first letter of proposed deficiency which allows the taxpayer 
     an opportunity for administrative review in the Internal 
     Revenue Service Office of Appeals.

[[Page 4961]]

       ``(4) Rate of interest.--The rate of interest allowable 
     under this subsection shall be the Federal short-term rate 
     determined under section 6621(b), compounded daily.
       ``(e) Use of Deposits.--
       ``(1) Payment of tax.--Except as otherwise provided by the 
     taxpayer, deposits shall be treated as used for the payment 
     of tax in the order deposited.
       ``(B) Returns of deposits.--Deposits shall be treated as 
     returned to the taxpayer on a last-in, first-out basis.''.
       (b) Clerical Amendment.--The table of sections for 
     subchapter A of chapter 67 is amended by adding at the end 
     the following new item:

``Sec. 6603. Deposits made to suspend running of interest on potential 
              underpayments, etc.''.

       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to deposits made after the date of the enactment of 
     this Act.
       (2) Coordination with deposits made under revenue procedure 
     84-58.--In the case of an amount held by the Secretary of the 
     Treasury or his delegate on the date of the enactment of this 
     Act as a deposit in the nature of a cash bond deposit 
     pursuant to Revenue Procedure 84-58, the date that the 
     taxpayer identifies such amount as a deposit made pursuant to 
     section 6603 of the Internal Revenue Code (as added by this 
     Act) shall be treated as the date such amount is deposited 
     for purposes of such section 6603.

     SEC. 215. EXPANSION OF INTEREST NETTING FOR INDIVIDUALS.

       (a) In General.--Subsection (d) of section 6621 (relating 
     to elimination of interest on overlapping periods of tax 
     overpayments and underpayments) is amended by adding at the 
     end the following: ``Solely for purposes of the preceding 
     sentence, section 6611(e) shall not apply in the case of an 
     individual.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to interest accrued after December 31, 2002.

     SEC. 216. WAIVER OF CERTAIN PENALTIES FOR FIRST-TIME 
                   UNINTENTIONAL MINOR ERRORS.

       (a) In General.--Section 6651 (relating to failure to file 
     tax return or to pay tax) is amended by adding at the end the 
     following new subsection:
       ``(i) Treatment of First-Time Unintentional Minor Errors.--
       ``(1) In general.--In the case of a return of tax imposed 
     by subtitle A filed by an individual, the Secretary may waive 
     an addition to tax under subsection (a) if--
       ``(A) the individual has a history of compliance with the 
     requirements of this title,
       ``(B) it is shown that the failure is due to an 
     unintentional minor error,
       ``(C) the penalty would be grossly disproportionate to the 
     action or expense that would have been needed to avoid the 
     error, and imposing the penalty would be against equity and 
     good conscience,
       ``(D) waiving the penalty would promote compliance with the 
     requirements of this title and effective tax administration, 
     and
       ``(E) the taxpayer took all reasonable steps to remedy the 
     error promptly after discovering it.
       ``(2) Exceptions.--Paragraph (1) shall not apply if--
       ``(A) the Secretary has waived any addition to tax under 
     this subsection with respect to any prior failure by such 
     individual,
       ``(B) the failure is a mathematical or clerical error (as 
     defined in section 6213(g)(2)), or
       ``(C) the failure is the lack of a required signature.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on January 1, 2003.

     SEC. 217. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of Penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 7811 (relating to taxpayer assistance 
     orders),
       ``(II) section 6159 (relating to agreements for payment of 
     tax liability in installments), or
       ``(III) section 7122 (relating to compromises).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission promptly after such notice, the penalty imposed 
     under paragraph (1) shall not apply with respect to such 
     submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 218. CLARIFICATION OF APPLICATION OF FEDERAL TAX DEPOSIT 
                   PENALTY.

       Nothing in section 6656 of the Internal Revenue Code of 
     1986 shall be construed to permit the percentage specified in 
     subsection (b)(1)(A)(iii) thereof to apply other than in a 
     case where the failure is for more than 15 days.

             Subtitle B--Fairness of Collection Procedures

     SEC. 221. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALLMENT 
                   AGREEMENTS.

       (a) In General.--

[[Page 4962]]

       (1) Section 6159(a) (relating to authorization of 
     agreements) is amended--
       (A) by striking ``satisfy liability for payment of'' and 
     inserting ``make payment on'', and
       (B) by inserting ``full or partial'' after ``facilitate''.
       (2) Section 6159(c) (relating to Secretary required to 
     enter into installment agreements in certain cases) is 
     amended in the matter preceding paragraph (1) by inserting 
     ``full'' before ``payment''.
       (b) Requirement To Review Partial Payment Agreements Every 
     Two Years.--Section 6159 is amended by redesignating 
     subsections (d) and (e) as subsections (e) and (f), 
     respectively, and inserting after subsection (c) the 
     following new subsection:
       ``(d) Secretary Required To Review Installment Agreements 
     for Partial Collection Every Two Years.--In the case of an 
     agreement entered into by the Secretary under subsection (a) 
     for partial collection of a tax liability, the Secretary 
     shall review the agreement at least once every 2 years.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     of the enactment of this Act.

     SEC. 222. EXTENSION OF TIME FOR RETURN OF PROPERTY.

       (a) Extension of Time for Return of Property Subject to 
     Levy.--Subsection (b) of section 6343 (relating to return of 
     property) is amended by striking ``9 months'' and inserting 
     ``2 years''.
       (b) Period of Limitation on Suits.--Subsection (c) of 
     section 6532 (relating to suits by persons other than 
     taxpayers) is amended--
       (1) in paragraph (1) by striking ``9 months'' and inserting 
     ``2 years'', and
       (2) in paragraph (2) by striking ``9-month'' and inserting 
     ``2-year''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) levies made after the date of the enactment of this 
     Act, and
       (2) levies made on or before such date if the 9-month 
     period has not expired under section 6343(b) of the Internal 
     Revenue Code of 1986 (without regard to this section) as of 
     such date.

     SEC. 223. INDIVIDUALS HELD HARMLESS ON WRONGFUL LEVY, ETC. ON 
                   INDIVIDUAL RETIREMENT PLAN.

       (a) In General.--Section 6343 (relating to authority to 
     release levy and return property) is amended by adding at the 
     end the following new subsection:
       ``(f) Individuals Held Harmless on Wrongful Levy, Etc. on 
     Individual Retirement Plan.--
       ``(1) In general.--If the Secretary determines that an 
     individual retirement plan has been levied upon in a case to 
     which subsection (b) or (d)(2)(A) applies, an amount equal to 
     the sum of--
       ``(A) the amount of money returned by the Secretary on 
     account of such levy, and
       ``(B) interest paid under subsection (c) on such amount of 
     money,
     may be deposited into an individual retirement plan (other 
     than an endowment contract) to which a rollover from the plan 
     levied upon is permitted.
       ``(2) Treatment as rollover.--The distribution on account 
     of the levy and any deposit under paragraph (1) with respect 
     to such distribution shall be treated for purposes of this 
     title as if such distribution and deposit were part of a 
     rollover described in section 408(d)(3)(A)(i); except that--
       ``(A) interest paid under subsection (c) shall be treated 
     as part of such distribution and as not includible in gross 
     income,
       ``(B) the 60-day requirement in such section shall be 
     treated as met if the deposit is made not later than the 60th 
     day after the day on which the individual receives an amount 
     under paragraph (1) from the Secretary, and
       ``(C) such deposit shall not be taken into account under 
     section 408(d)(3)(B).
       ``(3) Refund, etc., of income tax on levy.--If any amount 
     is includible in gross income for a taxable year by reason of 
     a levy referred to in paragraph (1) and any portion of such 
     amount is treated as a rollover under paragraph (2), any tax 
     imposed by chapter 1 on such portion shall not be assessed, 
     and if assessed shall be abated, and if collected shall be 
     credited or refunded as an overpayment made on the due date 
     for filing the return of tax for such taxable year.
       ``(4) Interest.--Notwithstanding subsection (d), interest 
     shall be allowed under subsection (c) in a case in which the 
     Secretary makes a determination described in subsection 
     (d)(2)(A) with respect to a levy upon an individual 
     retirement plan.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid under subsections (b), (c), and 
     (d)(2)(A) of section 6343 of the Internal Revenue Code of 
     1986 after December 31, 2002.

     SEC. 224. SEVEN-DAY THRESHOLD ON TOLLING OF STATUTE OF 
                   LIMITATIONS DURING TAX REVIEW.

       (a) In General.--Section 7811(d)(1) (relating to suspension 
     of running of period of limitation) is amended by inserting 
     after ``application,'' the following: ``but only if the date 
     of such decision is at least 7 days after the date of the 
     taxpayer's application''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to applications filed after the date of the 
     enactment of this Act.

     SEC. 225. STUDY OF LIENS AND LEVIES.

       The Secretary of the Treasury, or the Secretary's delegate, 
     shall conduct a study of the practices of the Internal 
     Revenue Service concerning liens and levies. The study shall 
     examine--
       (1) the declining use of liens and levies by the Internal 
     Revenue Service, and
       (2) the practicality of recording liens and levying against 
     property in cases in which the cost of such actions exceeds 
     the amount to be realized from such property.

     Not later than 1 year after the date of the enactment of this 
     Act, the Secretary shall submit such study to the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate.

              Subtitle C--Efficiency of Tax Administration

     SEC. 231. REVISIONS RELATING TO TERMINATION OF EMPLOYMENT OF 
                   INTERNAL REVENUE SERVICE EMPLOYEES FOR 
                   MISCONDUCT.

       (a) In General.--Subchapter A of chapter 80 (relating to 
     application of internal revenue laws) is amended by inserting 
     after section 7804 the following new section:

     ``SEC. 7804A. DISCIPLINARY ACTIONS FOR MISCONDUCT.

       ``(a) Disciplinary Actions.--
       ``(1) In general.--Subject to subsection (c), the 
     Commissioner shall take an action in accordance with the 
     guidelines established under paragraph (2) against any 
     employee of the Internal Revenue Service if there is a final 
     administrative or judicial determination that such employee 
     committed any act or omission described under subsection (b) 
     in the performance of the employee's official duties or where 
     a nexus to the employee's position exists.
       ``(2) Guidelines.--The Commissioner shall issue guidelines 
     for determining the appropriate level of discipline, up to 
     and including termination of employment, for committing any 
     act or omission described under subsection (b).
       ``(b) Acts or Omissions.--The acts or omissions described 
     under this subsection are--
       ``(1) willful failure to obtain the required approval 
     signatures on documents authorizing the seizure of a 
     taxpayer's home, personal belongings, or business assets;
       ``(2) willfully providing a false statement under oath with 
     respect to a material matter involving a taxpayer or taxpayer 
     representative;
       ``(3) with respect to a taxpayer or taxpayer 
     representative, the willful violation of--
       ``(A) any right under the Constitution of the United 
     States;
       ``(B) any civil right established under--
       ``(i) title VI or VII of the Civil Rights Act of 1964;
       ``(ii) title IX of the Education Amendments of 1972;
       ``(iii) the Age Discrimination in Employment Act of 1967;
       ``(iv) the Age Discrimination Act of 1975;
       ``(v) section 501 or 504 of the Rehabilitation Act of 1973; 
     or
       ``(vi) title I of the Americans with Disabilities Act of 
     1990; or
       ``(C) the Internal Revenue Service policy on unauthorized 
     inspection of returns or return information;
       ``(4) willfully falsifying or destroying documents to 
     conceal mistakes made by any employee with respect to a 
     matter involving a taxpayer or taxpayer representative;
       ``(5) assault or battery on a taxpayer or taxpayer 
     representative, but only if there is a criminal conviction, 
     or a final adverse judgment by a court in a civil case, with 
     respect to the assault or battery;
       ``(6) willful violations of this title, Department of the 
     Treasury regulations, or policies of the Internal Revenue 
     Service (including the Internal Revenue Manual) for the 
     purpose of retaliating against, or harassing, a taxpayer or 
     taxpayer representative;
       ``(7) willful misuse of the provisions of section 6103 for 
     the purpose of concealing information from a congressional 
     inquiry;
       ``(8) willful failure to file any return of tax required 
     under this title on or before the date prescribed therefor 
     (including any extensions) when a tax is due and owing, 
     unless such failure is due to reasonable cause and not due to 
     willful neglect;
       ``(9) willful understatement of Federal tax liability, 
     unless such understatement is due to reasonable cause and not 
     due to willful neglect; and
       ``(10) threatening to audit a taxpayer, or to take other 
     action under this title, for the purpose of extracting 
     personal gain or benefit.
       ``(c) Determinations of Commissioner.--
       ``(1) In general.--The Commissioner may take a personnel 
     action other than a disciplinary action provided for in the 
     guidelines under subsection (a)(2) for an act or omission 
     described under subsection (b).
       ``(2) Discretion.--The exercise of authority under 
     paragraph (1) shall be at the sole discretion of the 
     Commissioner and may not be delegated to any other officer. 
     The Commissioner, in his sole discretion, may establish a 
     procedure to determine if an individual should be referred to 
     the Commissioner for a determination by the Commissioner 
     under paragraph (1).
       ``(3) No appeal.--Notwithstanding any other provision of 
     law, any determination of

[[Page 4963]]

     the Commissioner under this subsection may not be reviewed in 
     any administrative or judicial proceeding. A finding that an 
     act or omission described under subsection (b) occurred may 
     be reviewed.
       ``(d) Definition.--For the purposes of the provisions 
     described in clauses (i), (ii), and (iv) of subsection 
     (b)(3)(B), references to a program or activity regarding 
     Federal financial assistance or an education program or 
     activity receiving Federal financial assistance shall include 
     any program or activity conducted by the Internal Revenue 
     Service for a taxpayer.
       ``(e) Annual Report.--The Commissioner shall submit to 
     Congress annually a report on disciplinary actions under this 
     section.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     80 is amended by inserting after the item relating to section 
     7804 the following new item:

``Sec. 7804A. Disciplinary actions for misconduct.''.

       (c) Repeal of Superseded Section.--Section 1203 of the 
     Internal Revenue Service Restructuring and Reform Act of 1998 
     (Public Law 105-206; 112 Stat. 720) is repealed.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 232. CONFIRMATION OF AUTHORITY OF TAX COURT TO APPLY 
                   DOCTRINE OF EQUITABLE RECOUPMENT.

       (a) Confirmation of Authority of Tax Court To Apply 
     Doctrine of Equitable Recoupment.--Subsection (b) of section 
     6214 (relating to jurisdiction over other years and quarters) 
     is amended by adding at the end the following new sentence: 
     ``Notwithstanding the preceding sentence, the Tax Court may 
     apply the doctrine of equitable recoupment to the same extent 
     that it is available in civil tax cases before the district 
     courts of the United States and the United States Court of 
     Federal Claims.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any action or proceeding in the Tax Court with 
     respect to which a decision has not become final (as 
     determined under section 7481 of the Internal Revenue Code of 
     1986) as of the date of the enactment of this Act.

     SEC. 233. JURISDICTION OF TAX COURT OVER COLLECTION DUE 
                   PROCESS CASES.

       (a) In General.--Section 6330(d)(1) (relating to judicial 
     review of determination) is amended to read as follows:
       ``(1) Judicial review of determination.--The person may, 
     within 30 days of a determination under this section, appeal 
     such determination to the Tax Court (and the Tax Court shall 
     have jurisdiction with respect to such matter).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to judicial appeals filed after the date of the 
     enactment of this Act.

     SEC. 234. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS IN 
                   COMPROMISE.

       (a) In General.--Section 7122(b) (relating to record) is 
     amended by striking ``Whenever a compromise'' and all that 
     follows through ``his delegate'' and inserting ``If the 
     Secretary determines that an opinion of the General Counsel 
     for the Department of the Treasury, or the Counsel's 
     delegate, is required with respect to a compromise, there 
     shall be placed on file in the office of the Secretary such 
     opinion''.
       (b) Conforming Amendments.--Section 7122(b) is amended by 
     striking the second and third sentences.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted or pending on 
     or after the date of the enactment of this Act.

     SEC. 235. 15-DAY DELAY IN DUE DATE FOR ELECTRONICALLY FILED 
                   INDIVIDUAL INCOME TAX RETURNS.

       (a) In General.--Section 6072 (relating to time for filing 
     income tax returns) is amended by adding at the end the 
     following new subsection:
       ``(f) Electronically Filed Returns of Individuals.--
       ``(1) In general.--Returns of an individual under section 
     6012 or 6013 (other than an individual to whom subsection (c) 
     applies) which are filed electronically--
       ``(A) in the case of returns filed on the basis of a 
     calendar year, shall be filed on or before the 30th day of 
     April following the close of the calendar year, and
       ``(B) in the case of returns filed on the basis of a fiscal 
     year, shall be filed on or before the last day of the 4th 
     month following the close of the fiscal year.
       ``(2) Electronic filing.--Paragraph (1) shall not apply to 
     any return unless--
       ``(A) such return is accepted by the Secretary, and
       ``(B) the balance due (if any) shown on such return is paid 
     electronically in a manner prescribed by the Secretary.
       ``(3) Special rules.--
       ``(A) Estimated tax.--If--
       ``(i) paragraph (1) applies to an individual for any 
     taxable year, and
       ``(ii) there is an overpayment of tax shown on the return 
     for such year which the individual allows against the 
     individual's obligation under section 6641,

     then, with respect to the amount so allowed, any reference in 
     section 6641 to the April 15 following such taxable year 
     shall be treated as a reference to April 30.
       ``(B) References to due date.--Paragraph (1) shall apply 
     solely for purposes of determining the due date for the 
     individual's obligation to file and pay tax and, except as 
     otherwise provided by the Secretary, shall be treated as an 
     extension of the due date for any other purpose under this 
     title.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

               Subtitle D--Confidentiality and Disclosure

     SEC. 241. COLLECTION ACTIVITIES WITH RESPECT TO JOINT RETURN 
                   DISCLOSABLE TO EITHER SPOUSE BASED ON ORAL 
                   REQUEST.

       (a) In General.--Paragraph (8) of section 6103(e) (relating 
     to disclosure of collection activities with respect to joint 
     return) is amended by striking ``in writing'' the first place 
     it appears.
       (b) Effective Date.--The amendment made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

     SEC. 242. TAXPAYER REPRESENTATIVES NOT SUBJECT TO EXAMINATION 
                   ON SOLE BASIS OF REPRESENTATION OF TAXPAYERS.

       (a) In General.--Subsection (h) of section 6103 (relating 
     to disclosure to certain Federal officers and employees for 
     purposes of tax administration, etc.) is amended by adding at 
     the end the following new paragraph:
       ``(7) Taxpayer representatives.--Notwithstanding paragraph 
     (1), the return of the representative of a taxpayer whose 
     return is being examined by an officer or employee of the 
     Department of the Treasury shall not be open to inspection by 
     such officer or employee on the sole basis of the 
     representative's relationship to the taxpayer unless a 
     supervisor of such officer or employee has approved the 
     inspection of the return of such representative on a basis 
     other than by reason of such relationship.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 243. DISCLOSURE IN JUDICIAL OR ADMINISTRATIVE TAX 
                   PROCEEDINGS OF RETURN AND RETURN INFORMATION OF 
                   PERSONS WHO ARE NOT PARTY TO SUCH PROCEEDINGS.

       (a) In General.--Paragraph (4) of section 6103(h) (relating 
     to disclosure to certain Federal officers and employees for 
     purposes of tax administration, etc.) is amended by adding at 
     the end the following new subparagraph:
       ``(B) Disclosure in judicial or administrative tax 
     proceedings of return and return information of persons not 
     party to such proceedings.--
       ``(i) Notice.--Return or return information of any person 
     who is not a party to a judicial or administrative proceeding 
     described in this paragraph shall not be disclosed under 
     clause (ii) or (iii) of subparagraph (A) until after the 
     Secretary makes a reasonable effort to give notice to such 
     person and an opportunity for such person to request the 
     deletion of matter from such return or return information, 
     including any of the items referred to in paragraphs (1) 
     through (7) of section 6110(c). Such notice shall include a 
     statement of the issue or issues the resolution of which is 
     the reason such return or return information is sought. In 
     the case of S corporations, partnerships, estates, and 
     trusts, such notice shall be made at the entity level.
       ``(ii) Disclosure limited to pertinent portion.--The only 
     portion of a return or return information described in clause 
     (i) which may be disclosed under subparagraph (A) is that 
     portion of such return or return information that directly 
     relates to the resolution of an issue in such proceeding.
       ``(iii) Exceptions.--Clause (i) shall not apply--

       ``(I) to any civil action under section 7407, 7408, or 
     7409,
       ``(II) to any ex parte proceeding for obtaining a search 
     warrant, order for entry on premises or safe deposit boxes, 
     or similar ex parte proceeding,
       ``(III) to disclosure of third party return information by 
     indictment or criminal information, or
       ``(IV) if the Attorney General or the Attorney General's 
     delegate determines that the application of such clause would 
     seriously impair a criminal tax investigation or 
     proceeding.''.

       (b) Conforming Amendments.--Paragraph (4) of section 
     6103(h) is amended by--
       (1) by striking ``proceedings.--A return'' and inserting 
     ``proceedings.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a return'';
       (2) by redesignating subparagraphs (A), (B), (C), and (D) 
     as clauses (i), (ii), (iii), and (iv), respectively; and
       (3) in the matter following clause (iv) (as so 
     redesignated), by striking ``subparagraph (A), (B), or (C)'' 
     and inserting ``clause (i), (ii), or (iii)'' and by moving 
     such matter 2 ems to the right.
       (c) Effective Date.--The amendments made by this section 
     shall apply to proceedings commenced after the date of the 
     enactment of this Act.

[[Page 4964]]

     SEC. 244. PROHIBITION OF DISCLOSURE OF TAXPAYER 
                   IDENTIFICATION INFORMATION WITH RESPECT TO 
                   DISCLOSURE OF ACCEPTED OFFERS-IN-COMPROMISE.

       (a) In General.--Paragraph (1) of section 6103(k) (relating 
     to disclosure of certain returns and return information for 
     tax administrative purposes) is amended by inserting ``(other 
     than the taxpayer's address and TIN)'' after ``Return 
     information''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures made after the date of the 
     enactment of this Act.

     SEC. 245. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY 
                   SAFEGUARDS.

       (a) In General.--Section 6103(p) (relating to State law 
     requirements) is amended by adding at the end the following 
     new paragraph:
       ``(9) Disclosure to contractors.--Notwithstanding any other 
     provision of this section, no return or return information 
     shall be disclosed by any officer or employee of any Federal 
     agency or State to any contractor of such agency or State 
     unless such agency or State--
       ``(A) has requirements in effect which require each 
     contractor of such agency or State which would have access to 
     returns or return information to provide safeguards (within 
     the meaning of paragraph (4)) to protect the confidentiality 
     of such returns or return information,
       ``(B) agrees to conduct an annual, on-site review (mid-
     point review in the case of contracts of less than 1 year in 
     duration) of each contractor to determine compliance with 
     such requirements,
       ``(C) submits the findings of the most recent review 
     conducted under subparagraph (B) to the Secretary as part of 
     the report required by paragraph (4)(E), and
       ``(D) certifies to the Secretary for the most recent annual 
     period that all contractors are in compliance with all such 
     requirements.

     The certification required by subparagraph (D) shall include 
     the name and address of each contractor, a description of the 
     contract of the contractor with the Federal agency or State, 
     and the duration of such contract.''.
       (b) Conforming Amendment.--Subparagraph (B) of section 
     6103(p)(8) is amended by inserting ``or paragraph (9)'' after 
     ``subparagraph (A)''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to disclosures made after December 31, 2002.
       (2) Certifications.--The first certification under section 
     6103(p)(9)(D) of the Internal Revenue Code of 1986, as added 
     by subsection (a), shall be made with respect to calendar 
     year 2003.

     SEC. 246. HIGHER STANDARDS FOR REQUESTS FOR AND CONSENTS TO 
                   DISCLOSURE.

       (a) In General.--Subsection (c) of section 6103 (relating 
     to disclosure of returns and return information to designee 
     of taxpayer) is amended by adding at the end the following 
     new paragraphs:
       ``(2) Requirements for valid requests and consents.--A 
     request for or consent to disclosure under paragraph (1) 
     shall only be valid for purposes of this section or sections 
     7213, 7213A, or 7431 if--
       ``(A) at the time of execution, such request or consent 
     designates a recipient of such disclosure and is dated, and
       ``(B) at the time such request or consent is submitted to 
     the Secretary, the submitter of such request or consent 
     certifies, under penalty of perjury, that such request or 
     consent complied with subparagraph (A).
       ``(3) Restrictions on persons obtaining information.--Any 
     person shall, as a condition for receiving return or return 
     information under paragraph (1)--
       ``(A) ensure that such return and return information is 
     kept confidential,
       ``(B) use such return and return information only for the 
     purpose for which it was requested, and
       ``(C) not disclose such return and return information 
     except to accomplish the purpose for which it was requested, 
     unless a separate consent from the taxpayer is obtained.
       ``(4) Requirements for form prescribed by secretary.--For 
     purposes of this subsection, the Secretary shall prescribe a 
     form for requests and consents which shall--
       ``(A) contain a warning, prominently displayed, informing 
     the taxpayer that the form should not be signed unless it is 
     completed,
       ``(B) state that if the taxpayer believes there is an 
     attempt to coerce him to sign an incomplete or blank form, 
     the taxpayer should report the matter to the Treasury 
     Inspector General for Tax Administration, and
       ``(C) contain the address and telephone number of the 
     Treasury Inspector General for Tax Administration.''.
       (b) Report.--Not later than 18 months after the date of the 
     enactment of this Act, the Treasury Inspector General for Tax 
     Administration shall submit a report to the Congress on 
     compliance with the designation and certification 
     requirements applicable to requests for or consent to 
     disclosure of returns and return information under section 
     6103(c) of the Internal Revenue Code of 1986, as amended by 
     subsection (a). Such report shall--
       (1) evaluate (on the basis of random sampling) whether--
       (A) the amendment made by subsection (a) is achieving the 
     purposes of this section;
       (B) requesters and submitters for such disclosure are 
     continuing to evade the purposes of this section and, if so, 
     how; and
       (C) the sanctions for violations of such requirements are 
     adequate; and
       (2) include such recommendations that the Treasury 
     Inspector General for Tax Administration considers necessary 
     or appropriate to better achieve the purposes of this 
     section.
       (c) Conforming Amendment.--Section 6103(c) is amended by 
     striking ``Taxpayer.--The Secretary'' and inserting 
     ``Taxpayer.--
       ``(1) In General.--The Secretary''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to requests and consents made after 3 months 
     after the date of the enactment of this Act.

     SEC. 247. NOTICE TO TAXPAYER CONCERNING ADMINISTRATIVE 
                   DETERMINATION OF BROWSING; ANNUAL REPORT.

       (a) Notice to Taxpayer.--Subsection (e) of section 7431 
     (relating to notification of unlawful inspection and 
     disclosure) is amended by adding at the end the following: 
     ``The Secretary shall also notify such taxpayer if the 
     Treasury Inspector General for Tax Administration determines 
     that such taxpayer's return or return information was 
     inspected or disclosed in violation of any of the provisions 
     specified in paragraph (1), (2), or (3).''.
       (b) Reports.--Subsection (p) of section 6103 (relating to 
     procedure and recordkeeping), as amended by section 245, is 
     further amended by adding at the end the following new 
     paragraph:
       ``(10) Report on unauthorized disclosure and inspection.--
     As part of the report required by paragraph (3)(C) for each 
     calendar year, the Secretary shall furnish information 
     regarding the unauthorized disclosure and inspection of 
     returns and return information, including the number, status, 
     and results of--
       ``(A) administrative investigations,
       ``(B) civil lawsuits brought under section 7431 (including 
     the amounts for which such lawsuits were settled and the 
     amounts of damages awarded), and
       ``(C) criminal prosecutions.''.
       (c) Effective Date.--
       (1) Notice.--The amendment made by subsection (a) shall 
     apply to determinations made after the date of the enactment 
     of this Act.
       (2) Reports.--The amendment made by subsection (b) shall 
     apply to calendar years ending after the date of the 
     enactment of this Act.

     SEC. 248. EXPANDED DISCLOSURE IN EMERGENCY CIRCUMSTANCES.

       (a) In General.--Section 6103(i)(3)(B) (relating to danger 
     of death or physical injury) is amended by striking ``or 
     State'' and inserting ``, State, or local''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 249. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX REFUND 
                   PURPOSES.

       (a) In General.--Paragraph (1) of section 6103(m) (relating 
     to disclosure of taxpayer identity information) is amended by 
     striking ``and other media'' and by inserting ``, other 
     media, and through any other means of mass communication,''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

                       Subtitle E--Miscellaneous

     SEC. 251. CLARIFICATION OF DEFINITION OF CHURCH TAX INQUIRY.

       Subsection (i) of section 7611 (relating to section not to 
     apply to criminal investigations, etc.) is amended by 
     striking ``or'' at the end of paragraph (4), by striking the 
     period at the end of paragraph (5) and inserting ``, or'', 
     and by inserting after paragraph (5) the following:
       ``(6) information provided by the Secretary related to the 
     standards for exemption from tax under this title and the 
     requirements under this title relating to unrelated business 
     taxable income.''.

     SEC. 252. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-
                   EXEMPT ORGANIZATIONS.

       (a) In General.--Paragraph (1) of section 7428(a) (relating 
     to creation of remedy) is amended--
       (1) in subparagraph (B) by inserting after ``509(a))'' the 
     following: ``or as a private operating foundation (as defined 
     in section 4942(j)(3))''; and
       (2) by amending subparagraph (C) to read as follows:
       ``(C) with respect to the initial qualification or 
     continuing qualification of an organization as an 
     organization described in section 501(c) (other than 
     paragraph (3)) which is exempt from tax under section 501(a), 
     or''.
       (b) Court Jurisdiction.--Subsection (a) of section 7428 is 
     amended in the material following paragraph (2) by striking 
     ``United States Tax Court, the United States Claims Court, or 
     the district court of the United States for the District of 
     Columbia'' and inserting the following: ``United States Tax 
     Court (in the case of any such determination or failure) or 
     the United States Claims Court or the district court of the 
     United States for the District of Columbia (in the case of a 
     determination or failure with respect to an

[[Page 4965]]

     issue referred to in subparagraph (A) or (B) of paragraph 
     (1)),''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to pleadings filed with respect to determinations 
     (or requests for determinations) made after the date of the 
     enactment of this Act.

     SEC. 253. EMPLOYEE MISCONDUCT REPORT TO INCLUDE SUMMARY OF 
                   COMPLAINTS BY CATEGORY.

       (a) In General.--Clause (ii) of section 7803(d)(2)(A) is 
     amended by inserting before the semicolon at the end the 
     following: ``, including a summary (by category) of the 10 
     most common complaints made and the number of such common 
     complaints''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to reporting periods ending after 
     the date of the enactment of this Act.

     SEC. 254. ANNUAL REPORT ON AWARDS OF COSTS AND CERTAIN FEES 
                   IN ADMINISTRATIVE AND COURT PROCEEDINGS.

       Not later than 3 months after the close of each Federal 
     fiscal year after fiscal year 2001, the Treasury Inspector 
     General for Tax Administration shall submit a report to 
     Congress which specifies for such year--
       (1) the number of payments made by the United States 
     pursuant to section 7430 of the Internal Revenue Code of 1986 
     (relating to awarding of costs and certain fees);
       (2) the amount of each such payment;
       (3) an analysis of any administrative issue giving rise to 
     such payments; and
       (4) changes (if any) which will be implemented as a result 
     of such analysis and other changes (if any) recommended by 
     the Treasury Inspector General for Tax Administration as a 
     result of such analysis.

     SEC. 255. ANNUAL REPORT ON ABATEMENT OF PENALTIES.

       Not later than 6 months after the close of each Federal 
     fiscal year after fiscal year 2001, the Treasury Inspector 
     General for Tax Administration shall submit a report to 
     Congress on abatements of penalties under the Internal 
     Revenue Code of 1986 during such year, including information 
     on the reasons and criteria for such abatements.

     SEC. 256. BETTER MEANS OF COMMUNICATING WITH TAXPAYERS.

       Not later than 18 months after the date of the enactment of 
     this Act, the Treasury Inspector General for Tax 
     Administration shall submit a report to Congress evaluating 
     whether technological advances, such as e-mail and facsimile 
     transmission, permit the use of alternative means for the 
     Internal Revenue Service to communicate with taxpayers.

     SEC. 257. EXPLANATION OF STATUTE OF LIMITATIONS AND 
                   CONSEQUENCES OF FAILURE TO FILE.

       The Secretary of the Treasury or the Secretary's delegate 
     shall, as soon as practicable but not later than 180 days 
     after the date of the enactment of this Act, revise the 
     statement required by section 6227 of the Omnibus Taxpayer 
     Bill of Rights (Internal Revenue Service Publication No. 1), 
     and any instructions booklet accompanying a general income 
     tax return form for taxable years beginning after 2001 
     (including forms 1040, 1040A, 1040EZ, and any similar or 
     successor forms relating thereto), to provide for an 
     explanation of--
       (1) the limitations imposed by section 6511 of the Internal 
     Revenue Code of 1986 on credits and refunds; and
       (2) the consequences under such section 6511 of the failure 
     to file a return of tax.

     SEC. 258. AMENDMENT TO TREASURY AUCTION REFORMS.

       (a) In General.--Clause (i) of section 202(c)(4)(B) of the 
     Government Securities Act Amendments of 1993 (31 U.S.C. 3121 
     note) is amended by inserting before the semicolon ``(or, if 
     earlier, at the time the Secretary releases the minutes of 
     the meeting in accordance with paragraph (2))''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to meetings held after the date of the enactment 
     of this Act.

     SEC. 259. ENROLLED AGENTS.

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

     ``SEC. 7527. ENROLLED AGENTS.

       ``(a) In General.--The Secretary may prescribe such 
     regulations as may be necessary to regulate the conduct of 
     enrolled agents in regards to their practice before the 
     Internal Revenue Service.
       ``(b) Use of Credentials.--Any enrolled agents properly 
     licensed to practice as required under rules promulgated 
     under section (a) herein shall be allowed to use the 
     credentials or designation as `enrolled agent', `EA', or 
     `E.A.'.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     77 is amended by adding at the end the following new item:

``Sec. 7525. Enrolled agents.''.

       (c) Prior Regulations.--Nothing in the amendments made by 
     this section shall be construed to have any effect on part 10 
     of title 31, Code of Federal Regulations, or any other 
     Federal rule or regulation issued before the date of the 
     enactment of this Act.

     SEC. 260. FINANCIAL MANAGEMENT SERVICE FEES.

       Notwithstanding any other provision of law, the Financial 
     Management Service may charge the Internal Revenue Service, 
     and the Internal Revenue Service may pay the Financial 
     Management Service, a fee sufficient to cover the full cost 
     of implementing a continuous levy program under subsection 
     (h) of section 6331 of the Internal Revenue Code of 1986. Any 
     such fee shall be based on actual levies made and shall be 
     collected by the Financial Management Service by the 
     retention of a portion of amounts collected by levy pursuant 
     to that subsection. Amounts received by the Financial 
     Management Service as fees under that subsection shall be 
     deposited into the account of the Department of the Treasury 
     under section 3711(g)(7) of title 31, United States Code, and 
     shall be collected and accounted for in accordance with the 
     provisions of that section. The amount credited against the 
     taxpayer's liability on account of the continuous levy shall 
     be the amount levied, without reduction for the amount paid 
     to the Financial Management Service as a fee.

     SEC. 261. CAPITAL GAIN TREATMENT UNDER SECTION 631(B) TO 
                   APPLY TO OUTRIGHT SALES BY LAND OWNER.

       (a) In General.--The first sentence of section 631(b) 
     (relating to disposal of timber with a retained economic 
     interest) is amended by striking ``retains an economic 
     interest in such timber'' and inserting ``either retains an 
     economic interest in such timber or makes an outright sale of 
     such timber''.
       (b) Conforming Amendment.--The third sentence of section 
     631(b) is amended by striking ``The date of disposal'' and 
     inserting ``In the case of disposal of timber with a retained 
     economic interest, the date of disposal''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after the date of the enactment of this 
     Act.

     SEC. 262. ACCELERATION OF EFFECTIVE DATE FOR EXPANSION OF 
                   ADOPTION TAX CREDIT AND ADOPTION ASSISTANCE 
                   PROGRAMS.

       (a) In General.--Subsection (g) of section 202 of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 is 
     amended to read as follows:
       ``(g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.''.
       (b) Technical Corrections.--Paragraph (3) of section 411(c) 
     of the Job Creation and Worker Assistance Act of 2002 is 
     amended to read as follows:
       ``(3) Effective date.--The amendments made by this 
     subsection shall apply to taxable years beginning after 
     December 31, 2001.''.

                Subtitle F--Low-Income Taxpayer Clinics

     SEC. 271. LOW-INCOME TAXPAYER CLINICS.

       (a) Limitation on Amount of Grants.--Paragraph (1) of 
     section 7526(c) (relating to special rules and limitations) 
     is amended by striking ``$6,000,000 per year'' and inserting 
     ``$9,000,000 for 2002, $12,000,000 for 2003, and $15,000,000 
     for each year thereafter''.
       (b) Limitation on Use of Clinics for Tax Return 
     Preparation.--Subparagraph (A) of section 7526(b)(1) is 
     amended by adding at the end the following flush language:
     ``The term does not include a clinic that provides routine 
     tax return preparation. The preceding sentence shall not 
     apply to return preparation in connection with a controversy 
     with the Internal Revenue Service.''.
       (c) Promotion of Clinics.--Section 7526(c) is amended by 
     adding at the end the following new paragraph:
       ``(7) Promotion of clinics.--The Secretary is authorized to 
     promote the benefits of and encourage the use of low-income 
     taxpayer clinics through the use of mass communications, 
     referrals, and other means.''.
       Amend the title so as to read: ``A bill to amend the 
     Internal Revenue Code of 1986 to make permanent the tax 
     reductions enacted by the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 and to protect taxpayers and 
     ensure accountability of the Internal Revenue Service.''

  The SPEAKER pro tempore. Pursuant to House Resolution 390, the 
gentleman from California (Mr. Thomas) and the gentleman from New York 
(Mr. Rangel) each will control 30 minutes.
  The Chair recognizes the gentleman from California (Mr. Thomas).

                              {time}  1300

  Mr. THOMAS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Louisiana (Mr. McCrery).
  Mr. McCRERY. Mr. Speaker, I rise in support of the motion and of 
making permanent the tax cuts enacted last year.
  To me, the key consideration is ensuring the level of federal revenue 
is sufficient to meet the needs of the government without imposing an 
unsupportable burden on the governed.
  Over the last 40 years, federal government revenues have averaged 
about 18.2 percent of our gross domestic product. Some might argue that 
this was too low to meet pressing needs. Others believe it is so high 
as to stifle economic growth. But the fact is that while revenues 
fluctuated somewhat, they were usually within 1 percent of that 40-year 
average.

[[Page 4966]]

That has changed in the last 4 years, as federal revenues as a share of 
GDP rose to exceed 20 percent.
  In January, the Congressional Budget Office confirmed that even with 
the passage of the 2001 tax cuts, federal revenues will continue to be 
close to 20 percent of GDP in every year of the 10-year budget window.
  That is contrary to claims that the phased-in nature of the tax cut 
will starve Washington of revenue in the second half of this decade. 
The truth is that between 2006 and 2011, federal revenues as a share of 
GDP will actually increase.
  In fact, only three times between the end of World War II and 2001, a 
span of more than five decades, did federal revenues consume a larger 
share of our national income than they will in 2011. And those years 
were 1998, 1999, and 2000.
  The real question is whether, over the long-term, allowing the tax 
cuts to sunset will increase federal revenues to an unsupportable 
level.
  A recent analysis by the General Accounting Office found that if the 
tax cuts are made permanent and discretionary spending grows as fast as 
the economy, federal revenues as a share of GDP will remain just under 
19 percent for the next 50 years, still higher than historical levels. 
If the sunset is allowed to occur, the GAO concluded revenues will rise 
to 20.5 percent of national income every year through the end of their 
75-year forecast period.
  Looking back 70 years--a period which includes the Great Depression, 
the New Deal, World War II, the Korean War, the Great Society, the 
Vietnam War, and the oil embargo of the 1970s--federal revenues have 
never exceed 20.5 percent of GDP for 2 consecutive years.
  Mr. Speaker, I remain concerned about the drag on our economy which 
results from having taxpayers send almost one in every five dollars of 
our national income to Washington. We should certainly not allow the 
2001 tax cuts to sunset, thereby further driving up the federal 
government's take from the national income to historically high and 
potentially unsupportable levels.
  Mr. Speaker, I urge passage of this measure.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we are going to engage in a debate about whether or not 
the tax bill that was enacted into law last year does not end 10 years 
from now, but, rather, is open-ended. We are going to hear a series of 
statements which, frankly, will become very baffling to many people in 
this debate trying to follow what it is that Members of Congress are 
saying. I will try to provide a firm set of measuring tools as we get 
into this debate.
  Number one, no matter how many times it is going to be said that we 
are invading, raiding, doing anything with the Social Security trust 
fund, that statement is not true.
  We will hear a number of dollar amounts thrown around. I guess $700 
billion is a lot of money. I cannot comprehend it from a personal 
revenue point of view. $1 trillion is a lot of money. The economy is 
currently producing at about $10 trillion a year. It is very, very 
difficult for most people, and I would say, frankly, for this Member 
and most Members of Congress, to really put those dollar amounts in 
some kind of context, so let me give you a little bit of a measurement 
as you listen to this debate and as dollar amounts are thrown around 
and the dire consequences given of actually letting the American people 
permanently keep a little bit more of their own money.
  If you would take a look at what this economy is going to produce 
over the next 10 years by the best estimates and call that $1,000, what 
we are talking about doing here on a permanent basis is about $2.30. 
Or, to put it in a yearly basis, if every year of that 10-year $1,000 
economy is $100, we are talking about this year's discussion being 23 
cents.
  Now, you are going to hear that it will reduce the Republic to 
rubble, deny every senior their Social Security check, deny Medicare, 
cause diaper rash and every other problem under the sun if, on the 
economy being $100, we decide to utilize 23 cents to allow people to 
make decisions on their own, which, frankly from a philosophical point 
of view is a good guideline between Democrats and Republicans, because 
we believe the best guarantee to have a surplus 10 years from now is to 
give people their own money, to allow them to make decisions, to 
invest, to grow, to be entrepreneurial, and we will have a bigger pie 
in which more revenue comes in.
  Listen carefully to the Democrat plan. They will say, ``We think it 
is a good idea to have a tax cut if and when we think it is a good idea 
to have a tax cut.'' I think you will find those 10 years will come and 
go, and their belief is hanging on to it here in Washington guarantees 
a better economy. In other words, they do not trust you.
  We believe you should have more of your own money back. They were 
willing to do it because they were forced to do it on a temporary 
basis, and in no way do they want to make it permanent. That is what 
this debate is all about.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we have a lot of smart people in this world that cannot 
even determine what the economy is going to look like next week, so it 
is really extraordinary that we have someone that can give us a 
forecast of what it looks like in the next 20 years.
  Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from California 
(Mr. Matsui), an outstanding member of the Committee on Ways and Means.
  Mr. MATSUI. Mr. Speaker, I thank the ranking member of the Committee 
on Ways and Means for yielding me time.
  Mr. Speaker, this bill will not give anybody a diaper rash. It has 
nothing to do with diaper rashes and things of that nature. What we saw 
was that in January of 2001, we were projecting a $5.6 trillion 
surplus. That surplus is almost all gone now because we passed a tax 
cut of $1.3 trillion last year, and now we are going to pass a $4 
trillion tax cut over the next 20 years. $5.5 trillion in tax cuts.
  What is interesting about this tax cut, it will not give baby rashes, 
but those people whose tax returns show an average of $500,000 a year, 
let me repeat that, $500,000 a year, will get 60 percent of that $5.5 
trillion surplus. To put it another way, if your tax return shows over 
$1 million a year, you are going to get 40 percent of this $5.5 
trillion tax cut.
  This is payroll tax money. The people on the elevators, running the 
elevators, waitresses in restaurants, this is their money that they 
think is going into the Social Security trust account, and instead it 
is going to go to pay for tax cuts for those earning $1 million a year 
or $500,000 a year.
  I have to say that in addition to that, this is going to put a 
massive drain on the Social Security trust fund. It will not give baby 
rashes, but it is going to do major damage to senior citizens 
throughout the United States. $5.5 trillion.
  Forty million new Americans are going to go on the Social Security 
system in the next 20 years while this tax cut is going through, and we 
are going to see, if this tax cut goes through, $5.5 trillion, a 30 
percent reduction, a 30 percent reduction in the average American 
Social Security benefits.
  That is what this is really all about. It is an issue, frankly, of 
values, what this country stands for. We want to make sure that we have 
clean air, we want to make sure we have education for our children, we 
want to make sure that we give our senior citizens the life they are 
entitled to in their retirement age.
  Mr. RANGEL. Mr. Speaker will the gentleman yield?
  Mr. MATSUI. I yield to the gentleman from New York.
  Mr. RANGEL. Mr. Speaker, I would like to ask some questions of the 
gentleman, because he has made some pretty bold statements out here.
  Did not the Republican leadership promise that they would not invade 
the Social Security trust fund? Did they not put this in a lock box? 
What is the gentleman's response to that?
  Mr. MATSUI. Mr. Speaker, reclaiming my time, I would say to the 
gentleman from New York that over the last 4 years, we had seven votes 
that the Republican leadership put to the floor of the House saying we 
were not going to invade the Social Security trust accounts.

[[Page 4967]]

  Mr. RANGEL. If the gentleman will yield further, what did they do?
  Mr. MATSUI. Mr. Speaker, they have raided the Social Security trust 
account. They are going to take $5.5 trillion out if this tax cut goes 
through, and it is going to have a 30 percent reduction in benefits for 
the average Social Security recipient.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I repeat my statement: There will be no trust fund 
monies spent from Social Security.
  To underscore that, it is my pleasure to yield 2 minutes to the 
gentleman from Florida (Mr. Shaw), the chairman of the Subcommittee on 
Social Security.
  Prior to that, I ask unanimous consent to yield the balance of my 
time to the gentleman from Missouri (Mr. Hulshof), and that he be 
allowed to control said time.
  The SPEAKER pro tempore (Mr. Simpson). Is there objection to the 
request of the gentleman from California?
  There was no objection.
  Mr. SHAW. Mr. Speaker, I have a prepared statement that I will make 
part of the Record, and therefore I want to direct my statements to 
really the incredible statement that I just heard on the floor by the 
ranking member on the Subcommittee on Social Security and the ranking 
member of the Committee on Ways and Means.
  Mr. Speaker, I would say to my friends, no one is raiding the Social 
Security trust fund. By law you cannot. The only thing in the trust 
fund is Treasury Bills. Is anybody saying we are taking Treasury Bills 
out of the Social Security trust fund? Of course not.
  Let us get a basic knowledge here of honesty and really look into how 
this system works. The FICA taxes that are paid, which, incidentally, 
are not being cut, so I do not know where that argument came from, that 
came really out of left field, goes into the Social Security trust 
fund. It goes out by way of payment of benefits. What is not used is a 
surplus, which then goes into the general fund and is replaced with 
Treasury Bills inside the trust fund.
  Now, how in the world do you raid the Social Security trust fund? By 
law you cannot. You cannot and never have. When the Democrats were 
spending all of the surplus and deficit spending, they did not go into 
the trust fund, because you cannot. You cannot go into the trust fund.
  I also heard the incredible statement made just a few moments ago 
that this is going to lower benefits by 30 percent. Do you know where 
that figure comes from? If this Congress does nothing, nothing, to 
reform the Social Security system in this country by forward funding 
it. That is what the Democrats are talking about. They are not going to 
have enough money beginning after somewhere in about 25 or 30 years, 
and they will be faced with a situation, the country will be faced with 
a situation, of not being able to maintain the amount of benefits that 
we have.
  My colleagues on the other side of the aisle continue to mislead 
American workers and seniors. They claim the Social Security trust 
funds are being raided to pay for needed tax relief--in spite of the 
facts.
  Such myths are intended only to scare seniors, use Social Security as 
a political jackhammer, and divert attention from the fact that the 
Democratic leadership has no plan for strengthening Social Security. 
They are not acting responsibly.
  Everybody here knows the Social Security trust funds have no dollars 
to ``raid.'' Social Security works the way it always has: surplus 
payroll taxes are credited to the trust funds as interest bearing 
Treasury bills--that's the law. It is legally impossible to use those 
Treasury IOUs for anything else other than paying benefits or 
administering the Social Security program.
  In the name of Social Security, Democrats opposed to making the tax 
cuts permanent are for tax hikes. Yet, saddling hard-working taxpayers 
with higher taxes does nothing to stop the enormous cash-flow deficits 
Social Security faces due to the aging of our nation. If nothing is 
done, Americans will soon face the additional tax burden of supporting 
Social Security. While doing nothing appears to be the Democrat 
solution, it certainly isn't ours.
  Moreover, the numbers just don't add up. The cost of Social 
Security's annual cash-flow deficits will continue to grow, well beyond 
over-inflated cost estimates of extending tax relief.
  And everyone knows adding more government IOUs to the trust fund 
doesn't do a single thing for Social Security. Because at the end of 
the day, the Treasury still needs to find the cash to pay those debts.
  Making the tax cuts permanent will help the economy grow by hundreds 
of billions of dollars in the near future, making debt reduction 
easier, sustaining productivity growth and improving our ability to 
address the needs of the retiring baby-boom. Letting the tax cuts 
expire, on the other hand, will cause tax hikes on taxpayers, dampen 
economic growth, and erode retirement security. For example, a 35 year 
old would set aside over $160,000 less in their IRA at age 65 if the 
tax cut is not make permanent.
  Rather than talking about how to pass the buck onto future 
generations, let's have a full and honest debate about how to keep the 
pledge both Republicans and Democrats made last December. In a vote of 
415-5 we pledged to save Social Security without cutting benefits, 
without raising taxes, or ignoring the special needs of women and 
minorities.
  This debate should start with the Democrats' offering their plan to 
save Social Security. Are they for massive, growing, and never-ending 
general revenue transfers that still leave an unsustainable program? 
Are they for Uncle Sam sitting in the corporate boardrooms of America 
by allowing government investing of the trust funds or making millions 
of workers pay more payroll taxes without giving them credit toward 
their benefits, as called for by Mr. DeFazio--who has my sincere 
respect for committing his plan to legislation. Where are his Democrat 
colleagues?
  America's seniors, workers, and their families are counting on us to 
provide leadership to strengthen Social Security. If we neglect this 
duty, if we play political games using Social Security as a pawn, it is 
our kids and grandkids that will pay the price of our shortsightedness.
  Mr. RANGEL. Mr. Speaker, so our side will be able to respond to that 
question, I yield 2\1/2\ minutes to the gentleman from South Carolina 
(Mr. Spratt), the ranking member on the Committee on the Budget, who 
has provided an outstanding service to the Congress and the country.
  Mr. SPRATT. Mr. Speaker, the critical vote came first. It was the 
vote to bypass the budget and do away with the rules that have served 
us well for the last 10 years. They moved the budget out of deep 
deficit into big surpluses. Now, with those rules out of the way, this 
tax bill can work its will, which is just what the gentleman said, it 
is to raid Social Security.
  If you do not believe me, look at the President's own budget. The 
President's budget calls for $675 billion in tax cuts on top of the 
$1.3 trillion passed last June. Among other things, it calls for this 
repeal of the sunset provision. As a result, look at the President's 
own budget. It wipes out what it is left of any surplus, it spends the 
entire Medicare surplus, consumes it completely, and spends two-thirds 
of the Social Security surplus, by the President's own accounting.
  Last month, when our Republican colleagues in the House brought out 
their budget resolution, it provided for none of those tax cuts. Not 
any of them. It did not make any mention of repeal of the so-called 
sunset in last year's tax bill. Why was that? Because they knew if they 
factored into their budget these tax cuts, it would drive the bottom 
line through the floor. It would put the budget in deficit for as far 
as the eye could see. They would be spending virtually all of Social 
Security, the Social Security surplus, and all of the Medicare surplus.
  Now, one month later, they bring up a tax cut that they could not 
accommodate in their budget resolution, did not want to put in the 
context of a budget resolution, because that would have shown what it 
did to Social Security, what it did to Medicare. They bring it up ad 
hoc, all by itself, a blatant violation of the budget process rules.
  Consider this: Last year, the Secretary of the Treasury told us that 
we would not need to raise the ceiling on the amount of national debt 
we can incur for at least 8 years. That was his testimony. Yesterday 
the Secretary of the Treasury sent us his third letter saying that the 
ceiling on the national

[[Page 4968]]

debt needs to be raised, and raised now, by $750 billion. Why is that? 
Because we are spending the Social Security trust account, we are 
spending the Medicare trust account, and not using them to pay down the 
debt of the United States.
  So what is the response of our Republican leaders in the House? It is 
not to raise the debt ceiling. Their response is to reduce taxes by 
another $500 billion between now and 2012, $4 trillion between 2012 and 
2022. This will wipe out what is left of Social Security and all of the 
surplus that builds up between now and 2012.
  Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would just say in response to the gentleman that the 
only budget this House has considered this year does, in fact, include 
room to make these tax cuts permanent. In fact, the most recent numbers 
from our official scorekeepers, the Congressional Budget Office, as 
well as the Joint Tax Committee, tell us this extension would take from 
the Treasury $374 billion over 10 years. At the same time, we would 
accumulate surpluses of $2.3 trillion.
  Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. 
Houghton), a member of the Committee on Ways and Means.
  Mr. HOUGHTON. Mr. Speaker, this is a bill that never should have 
happened. If it had not been for quirks in the Senate language, this 
all would have been put to bed when we settled the tax reduction issue 
last year.
  Now, look, this bill is not perfect. I have questions about the 
amount of money, I have questions about the timing, I have questions 
about the estate tax. But basically it is moving us in the right 
direction.
  I ask the question, what is wrong with reducing taxes? When I was in 
business, many times we made money, and sometimes we did not make 
money. But every so often you would say to your employees, gentlemen, 
ladies, you have hung with us a long time. We have not given you an 
increase. Many times we have had to have layoffs.

                              {time}  1315

  But we are going to give you back some of that money which now we are 
generating. I think that is a good idea, and that is what this thing is 
all about.
  I strongly support this bill.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Lewis), my distinguished friend and member of the 
committee.
  Mr. LEWIS of Georgia. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  Mr. SPRATT. Mr. Speaker, will the gentleman yield?
  Mr. LEWIS of Georgia. I yield to the gentleman from South Carolina.
  Mr. SPRATT. Mr. Speaker, I simply want to point out that the budget 
resolution brought to the floor by the House Republicans last month 
provided only $77 billion in tax cuts over the next 5 years. The 
President is calling for $675 billion in tax cuts over the next 10 
years, and the repeal of this repealer will take at least $400 to $500 
billion. Their budget resolution did not provide for this tax cut.
  Mr. LEWIS of Georgia. Mr. Speaker, I rise in strong opposition to 
H.R. 586. This tax cut bill is not the way to go. It does not provide 
real relief for all Americans. It is just plain, downright 
irresponsible.
  I ask my Republican colleagues to reconsider their priorities.
  Mr. Speaker, if we make the Republican tax cut permanent, we risk 
stealing, taking, really raiding the Social Security trust fund by more 
than $4 trillion. We risk gambling the future of the Medicare trust 
fund. We jeopardize funding for education and a prescription drug 
benefit for our seniors.
  This tax cut bill breaks the promise that we made to the American 
people to use their tax dollars wisely. A huge windfall for the 
wealthy, pocket change for working Americans. We should be taking care 
of the basic needs of all of our people, not rushing to pass a tax cut 
bill that puts us deeper and deeper in debt.
  Today we have a choice, a choice between a permanent tax cut bill 
that benefits a few, or Social Security and Medicare security that 
benefit all Americans. I urge my colleagues to make the right choice, 
the moral choice, the good choice. Vote against this bill.
  Mr. HULSHOF. Mr. Speaker, what is irresponsible is forcing upon the 
American families and American businesses a tax increase if Congress 
does nothing.
  Mr. Speaker, I am happy to yield 2 minutes to the gentleman from 
Texas (Mr. Sam Johnson).
  Mr. SAM JOHNSON of Texas. Mr. Speaker, it is morally irresponsible 
not to pass this. Mr. Speaker, I want to thank the gentleman from 
California (Mr. Thomas), the chairman of the Committee on Ways and 
Means, for bringing this bill to the floor. We have to make the tax 
cuts we enacted last year permanent. Hard-working Americans and the 
Texans who live in my congressional district were downright angry when 
they heard that their taxes would increase in 10 years. They think we 
have lost our minds in Washington. Mr. Speaker, I think they are right.
  Just think about it for a moment. We decided to repeal the worst 
parts of the marriage penalty. We all hope and expect marriages to 
last. Why would anyone object to the marriage penalty relief becoming 
permanent? If they do, they must be in a fight with their spouse.
  Why would anyone object to $1,000 child tax credit being permanent? 
How can somebody be against giving parents the extra money they need to 
raise their children? If my colleagues are against it, I guess they 
just do not like children.
  On another issue, this Congress took important steps to help 
Americans save for their own retirement by increasing the amount people 
can contribute to an IRA to $5,000. How can anyone argue against this? 
If my colleagues do, it means my colleagues are addicted to government 
spending and against personal savings. The only reason for arguing 
against these important changes is if my colleagues love big government 
and do not like people making their own choices and keeping their own 
money.
  Mr. Speaker, we need to pass this for the good of America.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Maryland (Mr. Hoyer), a leader in this Congress.
  Mr. HOYER. Mr. Speaker, the gentleman from Texas said they must have 
been out of their minds. Of course it was his side of the aisle that 
included this provision. Remember that, I say to the gentleman, and 
tell them that.
  Mr. Speaker, we are here today for one reason and one reason only: to 
indulge the GOP in its pavlovian policy prescription for every 
occasion: tax cuts. The GOP sold its tax cuts last year by telling the 
American people they were overcharged. Democrats fought for and are 
still for affordable tax relief. But we knew the projected surplus 
might never materialize, and we were right.
  Mr. Speaker, $5.6 trillion the President said we had; he came down to 
us now and says we have $.6 trillion. The President's own budget says 
the tax cut was the single biggest factor in erasing our surplus. So is 
the GOP here to say they made a mistake, to say, let us stop the raid 
on Social Security and Medicare? Of course not.
  With deficits projected every year for the next 10 years and an 
unchecked raid on Social Security and Medicare, the GOP proposes a bill 
that would deplete an estimated $7 trillion from the Social Security 
and Medicare trust funds.
  I asked Secretary O'Neill that yesterday, whether $4 trillion to $7 
trillion was the accurate figure, and he said he thought it probably 
was. Just as the baby boomers become of age, to take Social Security, 
we are doing this to them.
  Mr. Speaker, I urge my colleagues to reject this demagogic, reckless, 
irresponsible piece of legislation.
  Mr. HULSHOF. Mr. Speaker, it is my privilege to yield 2 minutes to 
the gentlewoman from Washington (Ms. Dunn), a Member who has, more than 
any other Member, fought to eliminate the Federal death tax.

[[Page 4969]]

  Ms. DUNN. Mr. Speaker, I stand in strong support of the Tax Relief 
Guarantee Act, and I do so on behalf of families and small businesses 
all over this great country of ours.
  Last year we passed a landmark tax relief bill that reduced income 
taxes for all Americans, the first across-the-board rate cut since the 
second world war. Now it is time to finish the job.
  We have to strip away the sunset provision or else taxpayers will 
face a decade of uncertainty. Many economists, including Federal 
Reserve Chairman Alan Greenspan, have declared that it is very 
important for Congress to act clearly and unequivocally in this area, 
because taxpayers need certainty.
  Consider the perverse case of the death tax. As the law now stands, 
the death tax will be repealed on December 31, 2009; and it will return 
on January 1, 2011, at pre-2001 rates, 55 percent, on estates over 
$675,000. We are in essence telling people that they have one calendar 
year to die, or else their heirs will pay that punishing 55 percent tax 
rate. Without permanence, no small business owner or family farmer can 
assume the death tax is gone forever. They have to continue to spend 
money on expensive life insurance policies and costly estate plans.
  A study of women-owned businesses recently found that small 
businesswomen spend, on average, $1,000 a month paying to provide for 
the death tax. This is money that they could use to hire workers or to 
buy new equipment or to provide health care for their employees. It is 
important, Mr. Speaker, to understand that the lack of permanence has 
real consequences. It is also important to acknowledge that if we do 
not support permanence, then we are implicitly supporting a tax 
increase on January 1, 2011.
  We have an opportunity to correct a mistake, a legacy of the other 
body. I think, Mr. Speaker, we ought to seize this moment, fulfill the 
promise we made, and the President made, to Americans last spring. Let 
us make these tax cuts permanent.
  Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
Wisconsin (Mr. Kleczka), a member of the Committee on Ways and Means.


                     Request for Motion to Adjourn

  Mr. KLECZKA. Mr. Speaker, I move that the House, upon conclusion of 
today's business, adjourn until noon, January 1, 2011.
  The SPEAKER pro tempore (Mr. Simpson). That motion is not in order at 
this time.
  Mr. KLECZKA. Well, Mr. Speaker, if it was in order, it would give 
some rationale to the bill before the House.
  The tax bill, as passed by my colleagues to my left, provided for the 
sunset. And the gentlewoman from Washington State just stood up and 
said, my friends, here is what happens. If you die in 2011, you are 
going to pay an inheritance tax. And if you die in 2009, you will not. 
Well, whoever drafted such a nutty bill?
  It was they who did so, and it was they who passed it. And it was 
signed by the President in June of last year. So now a few months later 
to come back and say, my God, the sky is falling, we are hearing from 
people who know they are going to die in 2011, and they want it changed 
now. And I have not heard from any constituent who knows they are going 
to die in 2011.
  But I say to my colleagues that we have some other things to talk 
about before we restore the permanency to this tax cut. Why are we 
doing it? I think I know why.
  In November there is going to be a congressional election, and right 
now, the poll numbers are showing them guys think they are in trouble. 
And if, in fact, the Democrats take back the House, which I think we 
will, that bill might not come up. And the new chairman of the 
committee, the gentleman from New York (Mr. Rangel), might see to it 
that it does not come up right away, because he and I and many other 
Democrats are concerned about providing for a drug benefit for the 
Medicare program. That is going to cost some money. We are told by the 
Secretary of the Treasury that by June of this year, we have to 
increase the national debt for all Americans to $6.5 trillion. How can 
we do that if we make permanent a tax cut which is questionable to 
begin with?
  But remember the debate last year. We were awash in a surplus. We 
were just swimming in greenbacks here in Congress, so they had a tax 
bill that gave the bulk of it back; and this year's budget is back in a 
deficit. Let us take care of the needs of the people; let us get out of 
deficit before we do something foolhardy, and if I get that call from a 
constituent who is going to die in 2011, I want to know how he or she 
knows that.
  Mr. HULSHOF. Mr. Speaker, I yield 3 seconds to the gentleman from 
California (Mr. Thomas), the chairman of the Committee on Ways and 
Means.
  Mr. THOMAS. Mr. Speaker, just so we stay on this planet in terms of 
our rhetoric, six times between March and May, this House passed tax 
reduction bills. Every one of them was permanent, including on April 4, 
H.R. 8, which repealed the death or estate tax. That was permanent. It 
was the United States Senate, and please stop me when I have violated 
any rule in talking about the other body, that produced this document 
which was the only time the House voted not to make the tax cuts 
permanent, and that was a bill generated through a conference. This 
House voted to make it permanent, and we are trying to do it again.
  Mr. KLECZKA. Mr. Speaker, will the gentleman yield? The fact is he 
voted for the conference committee report.
  Mr. HULSHOF. Regular order, Mr. Speaker.
  Would the Chair be kind enough to advise each side as to how much 
time remains.
  The SPEAKER pro tempore. The gentleman from Missouri (Mr. Hulshof) 
has 18 minutes remaining; the gentleman from New York (Mr. Rangel) has 
18\1/4\ minutes remaining.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume 
just to respond to my distinguished chairman, since it appears as 
though the dog has eaten his homework.
  This bill was signed into law by a Republican President after passing 
a Republican House of Representatives and passing a Republican Senate 
that had had a compromise that excluded all Democrats.

                              {time}  1330

  Mr. Speaker, I yield 2 minutes to the distinguished gentlewoman from 
Florida (Mrs. Thurman), an outstanding Member of Congress and of the 
committee.
  Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I just think this is the wrong bill at the wrong time 
for hardworking taxpayers who work hard to make ends meet today and 
retire comfortably tomorrow.
  Working Americans get little from this bill. They already have 
received 70 percent of the tax cut that Congress passed last year: the 
10 percent rate, increased child care credit, education incentives, and 
higher pension contribution limits.
  So what does this bill do for middle America? First, it will bring 
even more working Americans under the alternative minimum tax. By 2012, 
39 million taxpayers, about one in three, will face AMT liability. This 
bill gives a promise with one hand and takes away the promised tax cut 
with the other.
  This bill increases the deficit by $374 billion over the next 10 
years. Every dollar of that added deficit comes from the Social 
Security trust funds. That is $374 billion that cannot be used to 
reduce the national debt and interest on that debt.
  If interest payments were not so large, we would have a chance to 
deal with our other priorities: Social Security, a Medicare 
prescription drug program, education, or our veterans' programs.
  Speaking of veterans, the cost of this bill will be more than three 
times as large as the VA budget. Think about it: Every Member has heard 
from local veterans who know, as we all know, that the VA budget needs 
to be increased, especially for health care. We all have heard of 
veterans who cannot get appointments because VA hospitals and clinics 
do not have the resources.
  Most of us have supported an increase in the VA budget in recent

[[Page 4970]]

years. Yet, today we debate giving away future VA increases, and then 
some.
  In addition, this bill will reduce revenue by $4 trillion in the 
period after 2012. People born in 1946 will be 66 years old that year, 
retired and using Medicare. Will Medicare be there for them? It may not 
if we continue to provide unnecessary tax cuts and eat up the trust 
funds.
  Mr. Speaker, this is the wrong bill at the wrong time, and it is 
wrong for us to leave this increased debt for our children and 
grandchildren.
  Mr. HULSHOF. Mr. Speaker, it is my honor to yield 2 minutes to the 
gentleman from Illinois (Mr. Weller), a valued member of the Committee 
on Ways and Means who has fought to eliminate the marriage penalty.
  Mr. WELLER. Mr. Speaker, I thank the gentleman from Missouri for his 
leadership, and he and the gentleman from Wisconsin (Mr. Ryan) for 
their leadership on this permanency legislation, and my chairman for 
making this a priority, as well.
  Often a question in debate on this floor is who is helped and who is 
hurt by the legislation that is on the floor. If Members vote no on 
making the Bush tax cut permanent, we will label it the Bush tax cut, 
100 million Americans benefit from the Bush tax cut. So if Members vote 
no, they are voting to raise taxes on 100 million Americans.
  I would note that there are 3.9 million Americans who do not pay 
taxes because of the Bush tax cut, 3 million Americans with children do 
not pay taxes because of the Bush tax cut. If Members vote no and the 
Bush tax cut expires, those 3.9 million low-income taxpayers will once 
again have to pay taxes. They are the ones who are hurt.
  Let us take a moment to talk about the marriage tax penalty. Under 
the Bush tax cut, we eliminated the marriage tax penalty. There are 43 
million Americans who paid on average about $1,700 more prior to the 
Bush tax cut just because they were married. They combined their 
incomes, filed jointly, and they were pushed into a higher tax bracket; 
43 million couples, $1,700. We eliminated that with the Bush tax cut.
  It is always important, I think, to put a human face on who also 
benefits when we eliminate the marriage tax penalty. Let me introduce a 
family from Joliet, Illinois, Jose and Magdalene Castillo, their son 
Eduardo, and their daughter, Carolina. They suffered the marriage tax 
penalty prior to the Bush tax cut, but because of the commitment of the 
Republican majority in the House, we eliminated the marriage tax 
penalty for two hardworking laborers from Joliet, Illinois, who paid on 
average about $1,125 more because of the marriage tax penalty. The Bush 
tax cut eliminated the marriage tax penalty.
  So the question is, today, are we going to vote to reimpose the 
marriage tax penalty on Jose and Magdalene Castillo, or are we going to 
protect them? That is what is always interesting.
  My Democratic friends will argue passionately for permanent spending 
increases, they will argue passionately for permanent tax increases, 
but they always oppose making a tax cut permanent.
  Let us vote yes. Let us do the right thing. Let us help people like 
Jose and Magdalene Castillo of Joliet, Illinois.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Dakota (Mr. Pomeroy), a member of the Committee on Ways and 
Means.
  Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  We look back to that brief period of time when Republicans and 
Democrats alike came to this floor to pledge that they would protect 
Social Security revenues and pledge to protect that lockbox, and 
actually compete with one another in terms of who could best protect 
those Social Security dollars.
  How differently things are right now. The majority never came to this 
floor and said, all bets are off. We are going to grab the Social 
Security cash to fund the government because we are going to cut the 
rest of the revenues of this country, but that is exactly what is at 
stake. They are shortchanging the Social Security revenues that we will 
need to fund the Social Security program by passing this measure. In 
doing that, they are leaving a much bigger burden for our children.
  None of the families I represent are preparing for their retirement 
costs by just doing no planning at all, spending freely, and relying 
entirely on the children, their children, to carry the day. Why should 
we then, as a country, steer our national budget in a way that blows 
the revenues now and relies upon our children to make up the 
difference?
  There will never be a retirement switch demographically quite like 
the baby-boomers moving into retirement. The first will turn 65 in the 
year 2011. What in the world can we be thinking about to propose 
devastating the Federal budget at the very time the boomers are fully 
drawing Social Security, fully drawing Medicare?
  The only thing that can explain this is this is the baby-boomers' 
last great self-indulgent act: Blow the revenue now, leave the kids to 
pick up the slack. That is not how our families function and that is 
not, as a nation, how we should function.
  Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would say to the gentleman that I am confident that 
there are family farmers and small businesses in North Dakota that are 
trying to plan to pass those businesses on to their next generation, 
and yet cannot because of the sunset, which we are trying to repeal.
  Mr. Speaker, especially on the pension issue, no one has been a 
better champion on our side of the aisle than the gentleman from Ohio.
  Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from 
Ohio (Mr. Portman).
  Mr. PORTMAN. Mr. Speaker, I thank my colleague for yielding time to 
me, and I want to congratulate the gentleman from Wisconsin (Mr. Ryan) 
and the gentleman from Missouri (Mr. Hulshof) for bringing this bill to 
the floor. All we are doing is reaffirming what this House did last 
spring.
  I suppose it is going to be tough for some of my colleagues on the 
other side of the aisle who did not join some of their colleagues, 
because it was a bipartisan vote last spring, to change their vote and 
now support tax relief. But they ought to think about it, for a couple 
of reasons.
  First, what do we know since last spring? We know these tax cuts were 
extremely important in keeping us out of a deep recession, and now 
helping this economy to grow. Economists right, left, and center, 
including the chairman of the Federal Reserve, have said that: low 
inflation, low interest rates, lower taxes.
  So if they are interested in getting us back into a surplus position 
so we can take care of the needs of our seniors through Social Security 
and Medicare, I would think they would want to think again about maybe 
supporting this tax relief.
  Second, even though we have passed a good bill out of the House, the 
Senate put this 10-year limit on it. That does not make any sense. Why 
would we want to have tax relief only last for 10 years? We cannot 
plan. The whole idea with taxes is to be able to plan. Otherwise, we 
have a huge cost to the economy, to people, to businesses. Not being 
able to plan means incredibly increased costs and incredible new 
complexity.
  Think about it. If somebody is trying to plan what they are going to 
do, their accountants and planners are going to say, well, in the ninth 
year this thing ends and in the tenth year it starts up again, so we 
really cannot give you any advice about planning, so you have to plan 
for both. That is a terrible inefficiency in the economy.
  I would hope my colleagues would think about that. I will just give 
one example.
  The gentleman from Missouri (Mr. Hulshof) mentioned the retirement 
security provisions. They were very popular on a bipartisan basis 
because they make a lot of sense. They simplify the plans so the small 
businesses can get into them. They let people take the plan from job to 
job. They let people save more for their retirement. This year, people 
can save 50 percent more for their IRA, in their 401(k). If you are 
over 50, you can save even more.

[[Page 4971]]

  This is great stuff. Do we want this to expire in 9 years? This does 
not make any sense. Let us not pull out the rug from the American 
people. Let us support this permanence.
  Mr. RANGEL. I yield myself such time as I may consume, Mr. Speaker.
  Sir, this stupid 10-year limitation was passed by the Republican 
Senate, came back here, and was passed by the House, the Republicans, 
and went to our President and he signed it. So I would tell the 
gentleman to be careful what he calls stupid when he voted for it.
  Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. 
Doggett), a distinguished member of the Committee on Ways and Means.
  Mr. DOGGETT. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, Many people have said that 9-11 changed everything for 
this country. It certainly did for President Bush and his budget. He is 
now urging this Congress to increase the size of Federal spending by 22 
percent for this coming year, over what it was in 1999.
  This is the largest increase in Federal spending over that period of 
time than any comparable time since another Texan named Lyndon Johnson 
was President. Somehow 9-11 has changed nothing in what is always the 
predominant theme of the House Republican leadership and their agenda: 
convincing voters that they can have something for nothing. They are 
out to convince folks that every year they can pay less and less. Even 
if we have new, essential security requirements and other government 
needs, they will just continue to ``borrow and spend''--their 
traditional policy.
  The Republicans that were once known as the ``party of fiscal 
responsibility'' are now known as the ``party of shifting 
responsibility'', letting tomorrow's children pay for today's needs.
  It was not long ago that the Republicans were bringing the debt clock 
out here to the House floor to show us the impact of the national debt. 
It kept going up. It reminded me of that old ad about a watch: ``It 
takes a licking and it keeps on ticking.'' Well, it is ticking now as a 
result of the licking that it is taking with this economy and with the 
increased spending being proposed.
  If there was a problem with the ``guns-and-butter'' budget of the 
sixties, imagine the extent of the problem we are going to have with 
what is essentially a ``guns-and-caviar'' approach: unlimited defense 
spending and tax cuts for the caviar set. At the very time this takes 
effect, many Americans who are baby boomers are going to be retiring. 
They will need their Social Security. They will need their Medicare. 
They will have other needs of an aging population even as we have fewer 
workers to finance those needs. Yet, they propose more debt instead of 
more responsibility.
  Reject the fiscal folly: reject this ``gimmick for the gullible.''
  Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
  I would remind the gentleman from Texas, Mr. Speaker, that Social 
Security and Medicare are funded with payroll taxes, not income taxes.
  Mr. Speaker, it is my privilege to yield 2 minutes to the gentleman 
from Arizona (Mr. Hayworth), another valued member of the Committee on 
Ways and Means.
  Mr. HAYWORTH. Mr. Speaker, I thank my colleague from Missouri for 
yielding time to me.
  I listened with great interest to my friend, the gentleman from Texas 
(Mr. Doggett). Mr. Speaker, it is something to see a change in 
political parties. It is something when we stop and realize that the 
standardbearer of the once proud Democratic Party said the only thing 
we have to fear is fear itself, and now, sadly, from the modern 
Democratic Party, the only thing they have to offer is fear itself.
  Courage and commitment should be bipartisan, or really should be 
nonpartisan. Indeed, if we take a look at history over the last 40 
years, it was first a Democratic President, John F. Kennedy, who said 
we should reduce marginal tax rates because a rising tide lifts all the 
boats. Ronald Reagan followed with a similar philosophy in 1980, as did 
George W. Bush last year.
  And guess what? Revenues to the government long-term actually 
increased because people have more of their money to save, spend, and 
invest.
  My friends on the left have been here really captive to a debate of 
process. What we should talk about, Mr. Speaker, is a debate based on 
principles and priorities involving real people.
  This is the real consequence if Members vote no today on permanency 
for tax cuts: A single mother, hear me, not the caviar crew, not the 
Cadillac set, a single mother will end up paying an additional $963 of 
her hard-earned money in higher taxes if they say no to making the tax 
cut permanent.
  Now, I know we have been talking about millions and trillions and 
billions, but a thousand dollars is important in the family budget. Do 
Members really, Mr. Speaker, want to see taxes raised on working 
Americans? And yet, that is the net effect if Members do not join with 
us in a bipartisan, nay, in a nonpartisan fashion, and vote to enact 
permanent tax cuts. Vote yes.

                              {time}  1345

  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Neal), a member of the Committee on Ways and Means.
  Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from 
New York (Mr. Rangel) very much for yielding me the time.
  The previous speaker from Ohio said we are asked to reconfirm what we 
had done last spring. That is astounding in light of the fact that we 
are also asked since 9-11 to spend $4 billion more on defense, $38 
billion more on homeland security, and protect tax cuts. For him to say 
that we are only doing what we did last spring, as though nothing 
happened on 9-11, just do what we did last spring, is astounding.
  Here we are on the heels of the annual tax filing season to once 
again to say to the American people we appreciate your contributions 
for military defense, for homeland security, for health care for 
elderly and the poor and our veterans, and to also argue on behalf of 
fiscal discipline. Last year, Congress learned quickly these cuts in 
tax would lead to big deficits. Trillions of dollars in surplus 
overnight vanished, and the American taxpayer wondered what happened to 
that money.
  The Republican amendment today is fraudulent and everybody knows it. 
They are playing a game of three card monty. When they are in charge, 
they will always draw the tax cut card, but when the average middle-
income taxpayer is involved, they will find simply they are going to 
pay the bill. No matter how many times they play, middle-income 
taxpayers will get stuck with alternative minimum tax, and this bill 
does nothing about it.
  The Bush administration indicated that because of the alternative 
minimum tax we will see a massive increase in the number of affected 
families reaching 39 million by 2012, a full one-third of taxpayers 
with a liability. At the beginning of this week, Mr. Speaker, 
Republican leaders and the Treasury Department held press conferences 
to talk about how badly the current Tax Code needs to be simplified; 
and by the end of this week, we are voting to eliminate any possibility 
of getting it done, and we are being pushed into further debt.
  We heard speeches years ago against fiscal discipline. One leader in 
the Republican Party said we are having a fiscal Armageddon. Another 
one said what a disaster. We had 8 years of unparalleled economic 
prosperity before this Administration. Vote against this fraudulent 
measure and for fiscal integrity.
  Mr. HULSHOF. Mr. Speaker, may I inquire as to the time remaining on 
each side.
  The SPEAKER pro tempore (Mr. Simpson). The gentleman from Missouri 
(Mr. Hulshof) has 11\3/4\ minutes remaining, and the gentleman from New 
York (Mr. Rangel) has 9\1/4\ minutes remaining.
  Mr. HULSHOF. Mr. Speaker, it is my honor to yield 2 minutes to the 
gentleman from Texas (Mr. DeLay), the majority whip.
  Mr. DeLAY. Mr. Speaker, I thank the gentleman from Missouri for 
yielding me the time.

[[Page 4972]]

  Mr. Speaker, I think it says it all when the gentleman from Texas 
previous to me said that tax cuts are a spending program. Only 
Democrats would think that tax cuts, leaving money in people's pocket, 
is a spending program.
  Well, Mr. Speaker, a vote against this bill is a decision to bury the 
middle class beneath a wave of new taxes at the end of the decade; and 
if the Democrats vote no today, they are inflicting a rash of higher 
taxes on the American family.
  They will slice the child care tax credit in half. It falls from 
$1,000 down to $500 without permanent tax relief.
  They will revive the discriminatory marriage penalty that punishes 
families with a greater burden.
  They will resuscitate the hated death tax that has been stalking 
American farmers and small businesswomen all these years.
  They will weaken the retirement security of millions of Americans by 
slashing the level of contributions to 401(k) plans by more than a 
third, and they are dropping IRA contributions from $5,000 down to a 
paltry $2,000.
  Democrats who vote ``no'' are really saying yes to the largest 
single-day tax increase in American history. That is the wrong message 
for American families. It heaps uncertainty on farmers and small 
businesses, and it sows doubt and uncertainty about our commitment to 
fiscal discipline and the prospects for limited government. That is the 
wrong path.
  We need to reject this tax hike by making the President's tax cuts 
permanent; and if we do, average Americans will reap a number of 
powerful economic benefits. Married couples will send $1,700 less to 
the IRS. Families with kids will pay $1,500 less in taxes. Single moms 
will keep more than $700, and our senior citizens will see almost 
$1,000 in additional savings in their tax.
  All of these steps are positive in their own right; but taken 
altogether, they will send a powerful economic signal that will 
encourage growth and job creation and, yes, provide more revenues to 
the government. So in this way, we will prove to the American people 
that we believe they should keep more of the hard-earned money that 
they earned.
  That is the right message for America. It is what the President wants 
and I ask our Members to vote ``yes.''
  Mr. RANGEL. Mr. Speaker, I yield myself 1\1/2\ minutes to then yield 
to the gentleman from Texas (Mr. DeLay), the majority leader, to ask a 
couple of questions here since he was in charge of this bill and did 
not make it permanent before. I would like to yield time to him. No one 
else is responding. I would like to yield 30 seconds to him.
  Mr. DeLAY. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Texas.
  Mr. DeLAY. Mr. Speaker, I will take the 30 seconds, and I appreciate 
the 30 seconds; but I am not the leader. I am the whip.
  Mr. RANGEL. Mr. Speaker, the gentleman is the leader. He is the 
leader.
  Now, did not the Republican-controlled other body put in this 10-year 
limitation?
  Mr. DeLAY. Mr. Speaker, only in response to the Byrd rule. That is 
the rule. If the gentleman is going to yield, let me answer the 
question.
  Mr. RANGEL. The answer is yes.
  Mr. DeLAY. Mr. Speaker, no. Would the gentleman yield so I can 
answer?
  Mr. RANGEL. Then the answer is no. Is it yes or no, did they do it?
  The SPEAKER pro tempore. The gentleman from New York controls time.
  Mr. DeLAY. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Texas.
  Mr. DeLAY. Mr. Speaker, we opposed that because it was a response to 
a silly rule over in the Senate called the Byrd rule that does not 
allow us to make taxes permanent, yes.
  Mr. RANGEL. Mr. Speaker, now did not this silly rule that the silly 
Republicans have on the other side--


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. The gentleman will suspend momentarily. 
Members are reminded not to characterize members of the Senate or 
Senate rules.
  Mr. RANGEL. Mr. Speaker, would the gentleman withdraw calling the 
Republicans silly on the other side of the aisle because it is against 
the House rules?
  Having said that, whatever it was that came over, did not the 
Republicans have a conference that excluded Democrats where you 
accepted it?
  Mr. DeLAY. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Texas.
  Mr. DeLAY. Mr. Speaker, absolutely not. We did not exclude anybody 
from any of the process; and the gentleman may characterize it as that, 
but we passed a good tax cut for the American people the best way we 
could with the Democrat opposition that we faced.
  Mr. RANGEL. The answers are terrific. Did you not vote for a bill 
that included this silly amendment?
  Mr. DeLAY. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Texas.
  Mr. DeLAY. Mr. Speaker, I voted for the bill because it was the only 
way we could get tax cuts for American families with the Democrat 
opposition that we faced.
  Mr. RANGEL. Mr. Speaker, did not the President of the United States 
sign the bill with this silly amendment that came from the Republican-
controlled Senate?
  Mr. DeLAY. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Texas.
  Mr. DeLAY. Mr. Speaker, certainly the President signed the only tax 
cut we could get for the American family in the face of the Democrat 
opposition that we faced.
  Mr. RANGEL. Mr. Speaker, so I would just like to know where all this 
silliness came from and where it emanated and where it finally 
concluded. I thank the gentleman for his responses.
  Mr. Speaker, I yield \1/2\ minute to the gentleman from California 
(Mr. Becerra), a member of the committee.
  Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Let me make sure we have this straight. The bill that we have before 
us is to correct something that our friends on the Republican side did 
a year ago when we passed the tax bill that cost about $1.3 trillion, 
but when we cost it out a lot more than that because they did not want 
to show the American people how much it really would cost. Now we are 
seeing.
  In the decade from 2012 forward for those 10 years, it is about 
another $4 trillion. What does that translate to, because $4 trillion 
is something none of us will ever see. Come 2010, my colleagues can 
expect that the top 1 percent of Americans, the richest Americans, will 
get about an average of $53,000 in a tax cut; and 60 percent of 
Americans will average about $347 in 2010 from that tax cut.
  What does that mean? Well, somehow we have to pay for it. How do we 
pay for it? We take every single cent out of the Medicare trust fund. 
We take every single cent out of the Social Security trust fund, and 
all that surplus money, and we spend it to pay for this tax cut.
  How do we do that? We did it back in the 80s. We did it with this. It 
made very good use of this card. It was one of those we cannot pay now, 
but we will pay later. And who pays? I have got three daughters. They 
will be paying this credit card. Who else pays? If someone has some 
kids, that is who will be paying.
  Why are we doing this? We should be the stewards of the people's 
money. We are in the people's House, and it is our responsibility to be 
responsible stewards of the people's money which they put into Social 
Security, which they put into Medicare. And what are we doing? At a 
time when we know we are already in deficit, we are going to go further 
into it.
  This is not the thing to do. Do what any American house would do, and 
that is, be responsible with their money, plan for the future for their 
kids and retirement. Let us not pass this bill.
  Mr. HULSHOF. Mr. Speaker, it is my privilege to yield 2 minutes to 
the gentleman from Texas (Mr. Armey), the majority leader of the House.

[[Page 4973]]

  Mr. ARMEY. Mr. Speaker, I thank the gentleman from Missouri for 
yielding me the time.
  Mr. Speaker, it is such a privilege and such a pleasure to be here 
today. The President of the United States is George W. Bush, achieved 
his reduction in taxes for the American working man and woman earlier 
in his Presidency than any President that I can ever remember. It was a 
good thing what we were able to accomplish with the President, and to 
do it so early was particularly rewarding.
  There was a hitch in the process when we tried to bring that bill 
through because of an arcane rule of the Senate, the other body, 
requiring a vote of 60 Senators for permanent tax reduction; and 
because we could not acquire 60 votes for permanent tax reduction, we 
were forced to accept a 10-year sunset on the Tax Code.
  Today, we are here to address that and to renew our commitment to the 
American people. So for those young couples that got married and are 
enjoying the fact that they are not receiving today prejudice in the 
Tax Code for their act of marriage, we are here to say you do not want 
to have to sunset your marriage or suffer perverse tax penalties in 10 
years. We want to make it permanent in your life, till death do you 
part. Permanent surcease from prejudice in the Tax Code.
  For those people that worked hard all their life and said I want to 
struggle and build and create something and when my days on this Earth 
are over leave it to my children that I love so much, we want to say 
for the rest of your life, not just for the next 10 years. You do not 
have to time your death in accordance with the rules of the other body, 
and so on down the line.
  So we are asking all our colleagues, do the same rational thing. Vote 
for permanent tax relief, a Tax Code that prevails on the American 
people today that it be permanent.
  In addition to that, we are doing a good thing for those families 
that reach out and adopt children. We are giving them a special 
consideration in the Tax Code and a special dispensation, some relief 
from the burden of taxation as they bring those precious babies into 
their homes and make a home for them. A good thing to do.
  Finally Mr. Speaker, pursuant to a study that I asked for from GAO 
just the last week revealed 2 million American taxpayers, half of whom 
had the benefit of professional tax preparation, and were still so 
intimidated by the rules of the Tax Code and the enforcement procedures 
of the IRS that they did not take fully all of their tax deductions, to 
the tune of $1 million in tax overpayment. We are in this bill again 
addressing the question of our rights to due process, fair decent 
treatment under the Tax Code.
  Three good things we do with this bill. I thank the committee. It is 
not often that we can come to the floor of the House and with one vote 
do three good things for the American people. I hope all my colleagues, 
especially those on the other side of the aisle who so often miss these 
opportunities, will today avail themselves of the opportunity, do the 
right thing, three good things for one vote.
  You will never get a bargain like that often in our life. Take the 
opportunity today. You will feel better for it.
  Mr. RANGEL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, I include for the Record this 
statement of the public debt that shows that our Nation's debt has 
increased by $232,291,656,313.85 since the passage of this measure 12 
months ago. Our Nation now has a record $6 trillion debt for which we 
squander $1 billion a day on interest.

              Simple Truths About the Budget and the Debt


 Updated Through March, 2002 Monthly Statement of the Public Debt and 
               February, 2002 Monthly Treasury Statement

       The Federal debt is still growing. At the close of business 
     on March 31, 2002, the total public debt was 
     $6,006,031,606,265.38, or $6.006 trillion. The public debt 
     increased by $232 billion in the twelve months since March 
     31, 2002.
       Of the $6 trillion debt, $2.55 trillion is owed to various 
     federal trust funds. These funds were collected and earmarked 
     for specific purposes, but all their surpluses have been 
     borrowed and spent in exchange for government securities.
       There is no surplus except in trust funds. Through five 
     months of Fiscal Year 2002, federal trust funds accumulated a 
     total of $82.2 billion in surpluses, while non-trust fund 
     accounts ran a deficit of $156.6 billion. For Fiscal Year 
     2001, which ended in September, trust funds had $224 billion 
     in surpluses. Outside the trust funds, the federal government 
     ran a deficit of $97 billion.
       The trust fund surpluses are obligated for future benefits. 
     Most of the surplus funds are collected for Social Security, 
     Medicare, military retirement, federal employee retirement, 
     and unemployment benefits to save and invest to pay future 
     obligations.
       We spend a billion dollars per day on interest. In the 
     first five months of Fiscal Year 2002, the Treasury spent 
     $150.4 billion on interests in 151 days. Over the same 
     period, military spending totaled $129.9 billion, $20.5 
     billion less than interest costs. Medicare spending totaled 
     $101.4 billion, $49 billion less than interest costs.
       In Fiscal Year 2001, the Treasury spent $359.5 billion on 
     interest on the debt, an average of almost one billion 
     dollars per day. In the same twelve months, military spending 
     totaled $291 billion, $68.5 billion less than gross interest. 
     Medicare spending totaled $241.4 billion, $118 billion less 
     than gross interest.


                    Debt Increase in past 12 months

       Total Public Debt Outstanding March 31, 2002; 
     $6,006,031,606,265.38. Total Public Debt Outstanding March 
     31, 2001: $5,773,739,949,951.53. Increase in Public Debt 
     Outstanding in 12 months: $232,291,656,313.85.

                        DEBT OWED TO TRUST FUNDS
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Owed to All Government Accounts.....  $2.546 trillion
Total Owed to Social Security Trust Funds.  $1.24 trillion
Old-Age and Survivors Insurance...........  $1.097 trillion
Disability Insurance......................  $144.7 billion
Total Owed to Medicare Trust Funds........  $257.0 billion
Hospital Insurance (Part A)...............  $214.2 billion
Supplementary Medical Insurance (Part B)..  $42.8 billion
Military Retirement.......................  $156.0 billion
Civil Service Retirement and Disability...  $529.8 billion
Unemployment Trust Fund...................  $75.9 billion
------------------------------------------------------------------------
Source: Monthly Statement of the Public Debt, March 2002.

  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the gentleman from 
Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)

                              {time}  1400

  Mr. INSLEE. Mr. Speaker, the Arthur Andersen accountants are really 
confused today. For the last several weeks, they have been listening to 
the Republican Party trooping in front of the television cameras and 
calling them irresponsible, reckless and fiscally negligent. The 
Republican leadership then comes to the floor today and proposes a bill 
that will blow a trillion dollar hole in Social Security below the 
water line, ensure deficits for decades; and they call the Arthur 
Andersen accountants irresponsible?
  Mr. Speaker, the Republican leadership is on a course to do to Social 
Security and Medicare and fiscal responsibility what Ken Lay and Arthur 
Andersen did with Enron. We ought to reject it.
  Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in brief response, I would remind the gentleman, as I 
know the gentleman was not here during part of the debate, that the 10-
year cost for the tax cut that is being considered is $374 billion, and 
the most recent Congressional Budget Office numbers project a $2.3 
trillion surplus over that period of time.
  Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. 
Foley).
  Mr. FOLEY. Mr. Speaker, I am humored somewhat by the debate today. 
There seems to be a lot of hand wringing and shock and outrage over the 
deficit. It reminds me of a cross between the pit bull and a collie: It 
rips a person's arm off, and then it runs for help.
  What we have heard from the other side, 40 years of managing this 
process, of running up untold debt, placing it on the back of 
taxpayers, watching Social Security become insolvent, and all of a 
sudden we hear all of this outrage. When we have debates on 
appropriations, I do not hear the same kind of a conservative approach 
from the other side of the aisle in holding down spending.
  April 15 just passed. I am hopeful that everybody on both sides of 
the aisle concluded their tax return. If Members are so outraged with 
the tax

[[Page 4974]]

cut, they could have easily used the old numbers from the old charts. 
When we handed out the $500 or $600 checks to individuals, $300 checks, 
I did not see this rush of Members from the other side of the aisle 
coming to hand their checks back to the Treasury.
  The American hard-working taxpayers, police officers, teachers, 
nurses, doctors, lawyers, janitors, have benefited from this tax policy 
that we have initiated. Americans are getting to spend more money on 
their kids. People are talking about buying a new washer-dryer, or get 
to go on vacation. The appetite for spending in this process is 
unbelievable. If they hold up numbers of debt, let us talk about how it 
originated. Let us talk about the spending. Let us bring that into the 
debate. We cannot talk about doing it as the American family would do, 
because if we used that analogy, the neighbors would be being robbed by 
us because we would have encouraged them to take something that is not 
theirs, use it for someone else, and call it fairness.
  This bill on the floor today gives every American a chance to project 
over their time how they will deal with their finances. It is certain, 
it is important, and it is fair.
  Mr. RANGEL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Vermont (Mr. Sanders).
  Mr. SANDERS. Mr. Speaker, I rise in opposition to this bill. We 
should not be borrowing trillions from Social Security to give huge tax 
breaks to the wealthiest 1 percent, and then have inadequate funding 
for education, prescription drugs, and veterans' needs.
  Mr. Speaker, it may make sense to some people to borrow trillions of 
dollars from Social Security in order to give tax breaks to 
millionaires. It may make sense to some to raise the $6 trillion dollar 
National debt for our kids and grand kids, and increase the deficit--
and then have inadequate funding for education, veterans' needs, 
prescription drugs, environmental protection, and other important 
social needs.
  It does not make sense to me and poll after poll shows that it does 
not make sense to the American people.
  Let's be honest. This bill has nothing to do with good social policy. 
It has everything to do with rewarding the rich folks who have 
contributed hundreds of millions to the Republican Party. Thirty eight 
percent of the benefits in this proposal would go to the richest one 
percent--people who have a minimum income of $375,000 a year.
  Tax breaks for millionaires, inadequate funding for veterans, the 
elderly, the kids. That's what this bill is about. It is an outrage. 
Let's vote ``no.''
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. Jefferson).
  Mr. JEFFERSON. Mr. Speaker, making this $1.35 trillion tax cut 
permanent is bad policy, bad for the economy, bad for the American 
people, and it is bad timing. This bill is not about tax cuts, it is 
priorities. Not Democratic or Republican priorities, but the priorities 
of the American people. Members favor tax cuts. The American taxpayers 
favor tax cuts, but our job in Congress is to enact sensible and 
affordable tax cuts. We should repeal the AMT because it is a stealth 
tax increase on millions of unsuspecting Americans. Many of us believe 
we should enact business tax cuts like depreciation reform to stimulate 
the economy.
  Mr. Speaker, in good conscience, how can we support legislation that 
robs Congress of the resources today that we all know are needed to 
keep our promises to the American people.
  Just last year, a $5 trillion surplus made everything seem possible. 
But even with then, with that rosy scenario, Congress knew it could not 
see clear to afford permanent tax cuts. That is why it sunset them in 
the first place. What has changed in a year? Everything, and none of it 
argues for making tax cuts permanent.
  Mr. Speaker, if we pass these tax cuts, we are making a big mistake. 
It is plain wrong for our economy and for the American people. It is 
terrible timing. Oppose this legislation.
  Mr. HULSHOF. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman 
from Wisconsin (Mr. Ryan), and I am reminded that in America, 
pessimists are seldom prophets, and the gentleman is an optimist, and a 
cosponsor of this bill.
  Mr. RYAN of Wisconsin. Mr. Speaker, I would like to thank the 
gentleman for his leadership on this issue. The reason we introduced 
this bill, to reverse this arcane Senate rule that caused this problem, 
was to give the American taxpayer certainty so they know how to plan 
for the future, and to strike a blow for fairness and justice.
  This issue, contrary to what we are hearing from the Democrats, is 
not an attempt to get another tax cut. We are not raising taxes, we are 
not cutting taxes, we are trying to keep taxes steady. If we do not 
pass this repeal of the sunset, we are raising taxes. Specifically, a 
family of 4 earning $36,268 will have their taxes raised in 2011 by 
$2,035; a family of 4 earning $46,756 will have their taxes go up in 1 
year by $3,856; a family of 4 earning almost $85,000 will see a tax 
bill on January 1, 2011, of $8,000.
  Mr. Speaker, I do not think Members realize the magnitude of the 
moment that is coming if we do not repeal this sunset. What will happen 
from New Year's Eve to New Year's Day, December 31, 2010, to January 1, 
2011, will be this: The IRA contribution limit from New Year's Eve to 
New Year's Day will go from $5,000 down to $2,000; on New Year's Eve to 
New Year's Day that year, the education IRA will go from $2,000 down to 
$500; on New Year's Eve to New Year's Day in that year, the 401(k) 
limit plans will be cut from a $15,000 cap to $10,500. Every 401(k) 
plan in America will have to be cut by a third on that day in 2011.
  Mr. Speaker, the death tax on December 31, 2010, will be zero 
percent; the next day it will be 55 percent beginning on estates over 
$675,000.
  Income taxes: Small businesses right now pay a higher income tax rate 
than the largest corporations of America. Their taxes will be 35 
percent on New Year's Eve; the next day, 39.6 percent, larger than the 
taxes paid by IBM or Chrysler or any large operation.
  The child tax credit will go from $1,000 down to $500, and the 
marriage tax penalty will come back to haunt us. That is what awaits us 
on New Year's Day, January 1, 2011, if we do not repeal this arcane 
Senate rule sunset. This is a major tax increase if we do not act 
today.
  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the gentleman from 
Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, it was nonsense last June when President 
Bush and the Republicans argued that we could have a $1.5 trillion tax 
cuts and not raid Social Security and Medicare and Medicaid. It is 
nonsense on stilts after September 11, after the deficits, after all 
that has happened, that they now want to permanently extend those tax 
breaks for the wealthiest 2 percent because they are now going to 
permanently raid Medicare, permanently raid Social Security, 
permanently raid Medicaid, which provides nursing home care for every 
person in America with Alzheimer's. This is a shameful day in the 
history of this country when such a vote can be taken.
  Mr. HULSHOF. Mr. Speaker, I yield 2 minutes to the gentleman from 
Oklahoma (Mr. Watts).
  Mr. WATTS of Oklahoma. Mr. Speaker, I think we have to understand 
when proceeding in this debate, there is a difference in philosophies 
that is driving this debate. One, the Democrats believe in creating 
more taxes; Republicans believe in creating more taxpayers.
  When we give Americans more money to spend, to put food on the table, 
to help pay the car insurance, that is good for jobs. It is good for 
the economy, and it is good for creating more taxpayers. Let us look at 
the bottom line and forget all of the goop that we have heard over the 
last 2 hours.
  The bottom line is that the Democrat leaders' plan for married 
couples is to raise taxes by reinstating the marriage tax penalty in 
2001. The President's bipartisan plan that got 28 Democratic votes in 
the House will give couples $1,700 more per year to spend on themselves 
and their kids. The bottom line for families with kids, raise taxes by

[[Page 4975]]

the Democrats, repealing the President's child tax credit in 2011. The 
bipartisan plan that the President proposed that we passed, cuts taxes 
by $1,500 for families every year.
  The Democrats' plan for singles, the leadership's plan says in 1993 
they raised taxes on Social Security. The President's bipartisan plan, 
we give seniors $920 more to spend for themselves.
  The bottom line on education IRA, Democrat leaders' plan, raise taxes 
by reinstating tax on contributions to education IRA over $500. The 
President's bipartisan plan, that got 28 votes of Democrats in the 
House, it eliminates taxes on contributions up to $2,000. That is a 
good thing for people saving for their children's education.
  The bottom line on child care, the Democrat leaders' plan raises 
taxes by $770 for single moms in 2011. The President's plan, the 
bipartisan plan that got 28 Democrat votes, cuts taxes by $770 for 
single moms.
  The bottom line for low income families, the Democrat leaders' plan 
raises taxes for 3.9 million low-income families. The President's 
bipartisan plan eliminates 3.9 million people. Give Americans a fiscal 
break. Vote for the President's plan to eliminate higher taxes on the 
American people.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
California (Ms. Pelosi), the minority whip.
  Ms. PELOSI. Mr. Speaker, I rise in opposition to the Republican raid 
on Social Security that is being made on the floor of the House today. 
If we support Social Security as we know it today, which are benefits 
for America's retiring citizens, Members must vote no on this plan to 
make these tax breaks permanent.
  Earlier today our body had the opportunity to vote for a resolution 
put forth by the gentleman from Illinois (Mr. Phelps). It said that 
these tax cuts could go forward and be made permanent if the 
Congressional Budget Office certified that no Social Security funds 
will be used to cover them. Every Republican voted against that. Every 
Democrat voted for it. One has to wonder where all of the Republican 
deficit hawks have gone. It seems that they have become an endangered 
species.
  I think it is very, very important to note that the only way to 
reconcile what the Republicans are doing is that they want the surplus 
to be reduced, and they want to change Social Security. They want to 
exact the huge cuts in benefits that President Bush's commission calls 
for that. That is the only way it would add up. I urge my colleagues to 
vote no.

                              {time}  1415

  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the gentleman from New 
York (Mr. Crowley).
  Mr. CROWLEY. Mr. Speaker, bananaramma, Rubik's Cube, leg warmers, 
``Miami Vice,'' and a tax cut for the rich.
  The Republican Party wants to go back to the future to 1981 and 
President Reagan's voodoo economics. And who is directing this remake? 
The House Republicans and this administration.
  In just 1 year, this tax cut we have seen has virtually raided all of 
the Social Security and Medicare trust funds to provide for huge tax 
cuts to wealthy oilmen and other millionaires throughout this country. 
At the same time we have seen that Congress can no longer protect 
Social Security and the Medicare trust funds from bankruptcy because we 
need to pay for this Republican tax scheme somehow.
  I ask the American people to stay home and not buy a ticket to this 
show. It is a flop and it is a sham.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from New 
Jersey (Mr. Menendez), an outstanding leader of our party.
  Mr. MENENDEZ. Mr. Speaker, I thank the gentleman for yielding time.
  The Bush tax cut is really a tax increase on seniors and on lower- 
and middle-income Americans because, for the wealthiest 1 percent to 
get a huge tax cut today, working Americans and retirees are going to 
end up paying back the debt tomorrow. It is like the Republicans giving 
a huge credit line increase to the wealthiest 1 percent who then rack 
up astronomical credit card bills, with working families and cash-
strapped retirees being stuck paying the tab at a later date. That is 
not smart. That is not fair. That is not fiscally responsible.
  We Democrats want a tax cut, but we want a tax cut that benefits 
working families and that does not bust the budget or raid Social 
Security to pay for it. The fact is after 8 years of fiscal 
responsibility and economic growth under a Democratic administration, 
it took Republicans less than 1 year to bring us back into long-term 
deficit spending. Making that reality permanent is not a good idea.
  Let us defeat this tax on retirees and working families and defeat 
this unwise raid of Social Security.
  Mr. RANGEL. Mr. Speaker, I yield the balance of my time to close this 
argument on behalf of the minority and the American people to the 
gentleman from Missouri (Mr. Gephardt), our minority leader.
  Mr. GEPHARDT. Mr. Speaker, I urge Members to vote for the motion to 
recommit and, if that fails, against this legislation.
  Last year, the Republicans passed their economic plan. Due to their 
plan, we lost $4 trillion in surplus in about 15 months. We lost the 
opportunity for long-term economic growth. We lost the chance to 
promote opportunity in people's lives. And, most importantly, we lost 
the chance to pay down the debt and be ready to stabilize and take care 
of Social Security for the baby boomers.
  But, worst of all, the plan was dishonest. When you presented the 
plan, you could have gone ahead and not had a sunset in the plan and 
made the tax cut go out into the future, which is what you are trying 
to do today. I believe you did that because you wanted to mislead the 
American people and the Congress on what was actually happening.
  You had another chance when you presented your budget a few weeks ago 
to say that the tax cut should not have a sunset, that it should go out 
into the future. Once again, you did not do it. You did not do it 
because we are already back into the Social Security trust funds 
spending those dollars for current revenue needs. We are already back 
into the Social Security trust fund spending those dollars for current 
needs.
  We passed in this House five times a lockbox that said we would never 
spend the Social Security funds. Majority Whip DeLay vowed the people's 
hard-earned money would be saved so they can enjoy their well-deserved 
retirement. Majority Leader Armey vowed that the House is not going to 
go back to raiding Social Security and Medicare. In 2001, Chairman 
Nussle vowed that this Congress will protect 100 percent of the trust 
funds. Period. No speculation. No supposition. No projections.
  I think that everybody here probably voted at least once for the 
lockbox. Well, if you vote for this bill today, you are throwing the 
lockbox on the ground, breaking it open and taking all the money out of 
it finally.
  This is the definitive vote in this Congress on whether you want the 
economic plan to be permanent or whether you want to save Social 
Security, stabilize Social Security and ensure that it will always be 
there for every citizen.
  In truth, the bill that we ought to have in front of us today is not 
this bill. The bill we ought to have in front of us is how to make 
certain that Social Security will not be privatized, that it will not 
be raided, that it will always be there for everybody in the future. 
The Republicans have a plan of privatization. We think it leads to cuts 
in benefits and raising the retirement age. You do not want to bring it 
up this year because you do not want it to be an issue in the election. 
But mark my words, it is going to be an issue in the election, and the 
issue is, who is for Social Security and who is against it? Who is for 
saving Social Security and who is for reducing it? Who is for making it 
stable and who is for tearing it apart? The lockbox is broken open. 
This is the definitive vote of this Congress, not on taxes. That has 
been decided. The issue is, what is going to happen to Social Security?

[[Page 4976]]

  I urge Members to vote ``no'' against this bill. Vote for the motion 
to recommit. Save Social Security and Medicare.


                        Parliamentary Inquiries

  Mr. THOMAS. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore (Mr. Simpson). The gentleman will state it.
  Mr. THOMAS. Was the minority leader's statement accurate? Is there a 
vote on the motion to recommit?
  The SPEAKER pro tempore. A motion to recommit is not in order.
  Mr. THOMAS. There will be no motion to recommit. The minority 
leader's statement was inaccurate.
  Mr. RANGEL. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. RANGEL. Is it true that the Republicans crafted a rule that 
denied us the motion to recommit?
  The SPEAKER pro tempore. Pursuant to the rule, the previous question 
is ordered to final adoption of the motion without intervening motion. 
There is no opportunity under the rule for a member to offer a motion 
to recommit.
  Mr. RANGEL. I thank the Chair.
  Mr. HULSHOF. Mr. Speaker, to conclude the debate on our side, it is 
my honor and privilege to yield the balance of my time to the gentleman 
from Illinois (Mr. Hastert), the Speaker of the House.
  Mr. HASTERT. Mr. Speaker, we hear a lot of rhetoric at times like 
this when we talk about taxes, when we talk about Social Security, when 
we talk about our future. But we need to also talk about promises and 
commitments that we make to people. The fact is, every dollar in a 
trust fund of Social Security is tied in that trust fund. And every 
promise we make not to cut benefits and not to raise taxes on Social 
Security is a commitment that we have made. It is there. It is there 
for a long time.
  The real issue that we are talking about today is a commitment that 
this House made to cut taxes of American working people and to keep a 
strong economy and trying to make commitments so this economy will 
work.
  I have heard a lot of rhetoric. Some try to bring class warfare into 
this whole issue. That is not the right thing to do, in my opinion. But 
let us set the record straight. On September 30 of this year, less than 
6 months ago, we paid down $450 billion in public debt. This Congress 
said, ``We are going to do it.'' This Congress did exactly that.
  We also said that we think American working people ought to have a 
fair tax break. We said that if you are a married couple, it is not 
common sense, it is not fair to be taxed $1,400 more if you are married 
than if you are single. Are we going to say, we are going to do that 
now, now you see it, now you don't? Nine years from now that is going 
to disappear and you are going to be taxed more just because you are 
married rather than being single?
  We also made a commitment that if you are raising a family, if you 
have four children, you are going to get a $1,000 tax credit instead of 
a $500 tax credit. That is important. You are buying shoes and paying 
tuition, putting gas in the car to get kids back and forth to school 
and to practice and those types of things. That is important to an 
American family, an American family that punches a clock every day, an 
American family that brings a paycheck home every other week. Are we 
going to say that 9 years from now we are going to raid, we are going 
to do away with, we are going to take that $4,000 deduction, that tax 
credit that that family gets? Is that fair? Does that make common 
sense? No.
  We know that we have this limit because we have to deal with the 
other body. It is their rules, and they did not have 60 votes to change 
it. So we live with that. But we do not have to live with it forever. 
We do not have to tie the American people down to a now-you-see-it-and-
now-you-don't promise.
  What about the family that spent their whole life building a small 
business, not taking vacations so that you put a little extra money and 
capital into that business so you can build it up, and you want to pass 
it on to your kids and your grandkids? If you do it and that thing 
slides down, if you do it 9 years from now, you can pass that on to the 
next generation; but if it is 10 years from now, you will not be able 
to do it. The Federal Government will come in and confiscate 52 percent 
of that business.
  Mr. Speaker, we are talking about common sense. If this tax break 
that we passed is good for the American people, it is good for 
families, it is good for small business, it is good for American 
farmers. If it is good today and good tomorrow and next year, it ought 
to be good 10 years from now. It is a promise. It is a commitment we 
made to the American people. We need to live up to that commitment. We 
will do that. Pass this legislation this afternoon.
  Mr. KIND. Mr. Speaker, last year we passed a budget that boasted a 
ten-year unified surplus totaling $5.6 trillion. The leadership claimed 
that an expensive tax cut plan and other costly initiatives were 
eminently affordable and would leave enough of the budget surplus to 
eliminate most or all of the national debt. Thus Congress passed a tax 
cut costing $1.3 trillion. Unfortunately, since then, most of that 
surplus has disappeared, due to the war on terrorism, homeland 
security, the economic downturn in the economy, and most significantly, 
the large tax cut. The Congressional Budget Office (CBO) recently 
projected that the budget surplus decreased this year by $4 trillion.
  Now, the leadership wants to make the $1.3 trillion tax cut, due to 
expire in 2010, permanent. This extension will cost over $4 trillion 
and will severely undermine the Social Security and Medicare trust 
funds just as 77 million baby boomers begin to retire. In fact, it will 
spend the entire Medicare surplus and 93 percent of the Social Security 
surplus in the next five years. Given the current forecasts, it appears 
that permanent tax cuts mean permanent deficits.
  Furthermore, the House passed legislation five times vowing that 
every single dollar of the Social Security and Medicare trust fund 
would be saved. And be put into a ``lockbox''. Now they are going back 
on their word, and spending the very money that people who are working 
now are counting on for their retirement security. Rather than shoring 
up Social Security and Medicare, the leadership intends to pay for this 
tax cut extension with the payroll taxes, which will raise interest 
rates and return us to deficit spending for the next ten years.
  After decades of deficit spending, it is our responsibility to reduce 
the debt future generations will inherit. We must give them the 
capability and flexibility to meet whatever problems or needs they 
face. I cannot, in good faith, support legislation that will put our 
country further into deficit spending, with a tax cut that will benefit 
only the wealthiest one percent of taxpayers.
  Tax relief, however, is a bipartisan issue. My colleagues on both 
sides of the aisle recognize the need for tax relief, but making the 
$1.3 trillion tax cut percent is not the result of bipartisanship. The 
tax cut passed last year has already derailed the opportunity we had to 
reduce our large national debt and prepare for our future obligations 
to our aging population and children's futures. Making the tax cut 
permanent will only further exasperate our nation's poor fiscal health.
  Mr. Speaker, now is not the time for the House Leadership to pursue 
its own individual agenda to score political points in an election 
year. This is purely a symbolic vote timed as millions of Americans 
filed their income tax returns.
  Mr. Speaker, I urge my colleagues to oppose this fiscally 
irresponsible tax cut. We must shore up Social Security and Medicare 
and reduce the national debt before passing such an expensive tax cut 
that we cannot afford. I did not come to Congress to saddles my two 
boys with a debt burden they did not create.
  Mr. ETHERIDGE. Mr. Speaker, I rise in strong opposition to H.R. 586, 
the so-called Tax Relief Guarantee Act.
  Mr. Speaker, I have supported responsible, common sense tax relief 
for hardworking Americans in the past, and I will continue to do so. 
Unfortunately, this irresponsible legislation mortgages the fiscal 
future of America.
  The House Republican Leadership is proposing to make permanent the 
parts of the 2001 tax cuts that most benefit the wealthiest Americans 
while leaving behind millions of middle-income families and putting the 
future of Social Security in jeopardy. The cost of the first two years 
of this legislation is nearly $400 billion and the cost in the second 
ten years--when the baby boomers will be retiring and relying on their 
Social Security benefits--will exceed $4 trillion. If the tax cut is 
made permanent, every single penny of the cost over the

[[Page 4977]]

coming decade will come out of the Social Security and Medicare trust 
funds.
  Mr. Speaker, the unfortunate reality of our situation is that we have 
witnessed--in just one year--the most dramatic fiscal reversal in the 
history of our nation. The projected surpluses are gone. Following 
eight straight years of fiscal responsibility, the Republican 
Leadership has decided to throw fiscal discipline out the window. 
Making the tax permanent will take our nation further down the road of 
fiscal denial.
  Mr. Speaker, making the tax cut permanent will hurt my home state of 
North Carolina. In North Carolina, we are already facing a $1 billion 
budget shortfall this year. If North Carolina adopts changes to make 
its tax law consistent with changes made by the Bush tax cut, it would 
cost the state $258 million next year. That money will have to be 
replaced by higher taxes or reduced services. Mr. Speaker, states all 
across the nation are facing the same budget crunch. It is clear that 
we can ill-afford to make the tax cut permanent when all of our home 
states are hurting so badly.
  Mr. Speaker, today's debate reminds me of a statement by my friend 
Gene Sperling, the former economic advisor to the President. Mr. 
Sperling said that the American Government these days reminds him of a 
family with 14-year old triplets who are all heading to Ivy League 
schools. The family will be fine for five or six years,but maybe in 
trouble down the road. But instead of saving their money for the future 
and paying down their debt, this family decides to buy a yacht and take 
a trip around the world. Making this tax cut permanent does the exact 
same thing with our nation's fiscal future. Mr. Speaker, let's not be 
the family that buys the yacht. Let's be the family that saves wisely 
to ensure our continued fiscal health. I urge my colleagues to join me 
in opposing H.R. 586.
  Mr. BEREUTER. Mr. Speaker, as stated on the record many times, this 
Member continues his strong opposition to the total elimination of the 
estate tax on the super-rich. The reasons for this opposition to this 
terrible idea have been publicly explained on numerous occasions, 
including statements in the Congressional Record.
  This Member has every expectation that this legislation in total is 
going nowhere in the other body. Furthermore, this Member has every 
reasonable assurance, in this unpredictable place, that there will be a 
straight up-and-down vote specifically on the elimination of the 
inheritance tax. At that time, this Member will most assuredly vote 
``no'' and do everything in his power to defeat the total repeal of the 
inheritance tax for the wealthiest Americans.
  However, this Member is strongly in favor of substantially raising 
the estate tax exemption level and reducing the rate of taxation on all 
levels of taxable estates and introduced legislation, H.R. 42, to this 
effect. This Member believes that the only way to ensure that his 
Nebraska and all American small business, farm and ranch families 
benefit from estate tax reform is to dramatically and immediately 
increase the Federal inheritance tax exemption level, such as provided 
in H.R. 42.
  This Member's bill (H.R. 42) would provide immediate, essential 
Federal estate tax relief by immediately increasing the Federal estate 
tax exclusion to $10 million effective upon enactment. (With some 
estate planning, a married couple could double the value of this 
exclusion to $20 million. As a comparison, under the current law for 
year 2001, the estate tax exclusion is only $675,000.) In addition, 
H.R. 42 would adjust this $10 million exclusion for inflation 
thereafter. The legislation would decrease the highest Federal estate 
tax rate from 55% to 39.6% effective upon enactment, as 39.6% is 
currently the highest Federal income tax rate. Under the bill, the 
value of an estate over $10 million would be taxed at the 39.6% rate. 
Under current law, the 55% estate tax bracket begins for estates over 
$3 million. Finally, H.R. 42 would continue to apply the stepped-up 
capital gains basis to the estate, which is provided in current law. In 
fact, this Member would be willing to raise the estate tax exclusion 
level to $15 million.
  Since this Member believes that H.R. 42 or similar legislation is the 
only way to provide true estate tax reduction for our nation's small 
business, farm and ranch families, this Member must use this 
opportunity to reiterate the following reasons for his opposition to 
the total elimination of the Federal estate tax. First, to totally 
eliminate the estate tax on billionaires and mega-millionaires would be 
very much contrary to the national interest. Second, the elimination of 
the estate tax also would have a very negative impact upon the 
continuance of very large charitable contributions for colleges and 
universities and other worthy institutions in our country. Finally, and 
fortunately, this Member believes it will never be eliminated in the 
year 2010.
  At this point it should be noted that under the previously enacted 
estate tax legislation (e.g., the Economic Growth and Tax Relief 
Reconciliation Act), beginning in 2011, the ``stepped-up basis'' is 
eliminated (with two exceptions) such that the value of inherited 
assets would be ``carried-over'' from the deceased. Therefore, the 
Economic Growth and Tax Relief Reconciliation Act could result in 
unfortunate tax consequences for some heirs as the heirs would have to 
pay capital gains taxes on any increase in the value of the property 
from the time the asset was acquired by the deceased until it was sold 
by the heirs--resulting in a higher capital gain and larger tax 
liability for the heirs than under the current ``stepped-up'' basis 
law. Unfortunately, the bill before us today (H.R. 586) apparently 
would also make the stepped-up basis elimination permanent resulting in 
a continuation of the problems just noted by this Member--higher 
capital gains and larger tax liability for heirs.
  In closing, Mr. Speaker, while this Member is strongly supportive of 
provisions in this bill making most of the earlier tax cuts permanent, 
he cannot in good conscience support the total elimination of the 
inheritance tax.
  Mr. CRENSHAW. Mr. Speaker, last year this Congress passed the 
Economic Growth and Tax Relief Reconciliation Act of 2001, which 
reduced tax rates on individuals, married couples and estates. When the 
House considered this legislation, it was our intent to permanently 
enact these cuts. In an effort to circumvent a Senate procedural 
roadblock, the House compromised with ``the other body'' and our 
conferees settled on the legislation with an expiration after 10 years. 
It is now time to revisit the intent of the peoples' House and make 
this relief permanent.
  Unless these cuts are made permanent, the American people will face 
the largest single tax increase in history when the cuts expire on 
January 1, 2011. On that date, the Marriage penalty will return--
penalizing millions of married couples who file their taxes jointly. 
The child tax credit will be cut in half. The Death Tax will be 
reinstated--undermining estate planning for family owned farms and 
small businesses. Estates that would have no tax liability on December 
31, 2010 could experience a 55 percent tax liability on January 1, 
2011. Furthersome without a permanent fix, Americans will experience a 
major shift in their ability to save for retirement. Contribution 
limits for IRA's will drop from $5,000 to $2,000. Contributions to 401k 
plans will be cut by one-third from $15,000 to $10,000 annually. 
Parents saving for college will only be able to set aside 40 percent of 
what they could save the day before in their children's education 
savings accounts.
  Congress needs to finish the job we started of promoting long-term 
economic growth by making these cuts permanent. Without it, economic 
growth, job creation and individual taxpayers' ability to save will be 
thwarted.
  I am proud to have supported legislation that is allowing Florida's 
First Coast families to keep more of their hard earned money. For many 
families, the advance payments that were sent out last year as part of 
the relief package arrived just in time to pay for school clothes and 
school supplies. Family expenses like these are not one-time-expenses 
however, Mr. Speaker. We need to look down the road to make sure that 
the family with a child currently in elementary school is not hit with 
an increased tax burden just as they are getting ready to pay that 
first tuition bill. Mr. Speaker, we need to let those planning their 
retirement know that they will be able to contribute to their 
retirement accounts at current or higher levels in the future without 
the fear of more of their income being diverted to pay for an increase 
in income tax rates instead of supporting them in their golden years.
  We should never underestimate the good that can be accomplished when 
families are able to keep more of their money and make spending 
decisions based on their needs. Let's do what is right for the American 
economy and America's families and make the tax relief contained in the 
Economic Growth and Tax Relief Reconciliation Act of 2001 permanent.
  Mr. STARK. Mr. Speaker, I rise in strong opposition to H.R. 586, an 
irresponsible bill to extend the Bush tax cuts beyond 2010. At a time 
when Social Security is threatened, our seniors can't buy drugs, our 
children attend crumbling schools, and our environment is under attack, 
the Republicans can think of nothing better to do than extend their 
enormous tax cuts into perpetuity. This is a disgrace. And it's a sad 
day for America.
  The Bush tax cut that passed last year has already thrown our 
economic stability into disarray. Prior to enactment of the tax cut, 
our Nation enjoyed a record $5.6 trillion surplus. With that money, we 
could have saved Social Security, provided a prescription drug benefit 
for our seniors, strengthened our children's

[[Page 4978]]

education, and protected the environment. Now, $4 trillion of that 
surplus is gone, and the rest is fading fast.
  Who in their right mind would vote for this bill? The people in my 
district certainly wouldn't, and neither would most American families. 
If a family knows that one spouse is going to be laid off and that they 
will soon lose a substantial portion of their income, they don't go buy 
a Ferrari on credit! As we watch our Nation's resources disappear 
because of the current tax cut, why do the Republicans want to throw 
the rest away?
  My greatest concern today is for the people who will needlessly 
suffer because of the carelessness and recklessness of this sorry bill. 
Our Nation made a promise to its citizens that we would not abandon 
them as they grew older. Making these tax cuts permanent would 
eliminate the money needed in 2010 and beyond to ensure that we keep 
this promise to our seniors--through the Social Security and Medicare 
programs--and fulfill our bipartisan promise to enact a Medicare 
prescription drug benefit.
  The simple, unmistakable fact is that Republicans don't care about 
Social Security or Medicare. They never have and they never will. They 
care about their corporate contributors. And they care about the 
wealthy. The rest of America, however, gets nothing but the cold 
shoulder.
  If the fact that this bill endangers our seniors wasn't bad enough, 
look at what it does to our children. The President and his Republican 
allies supported passage of the ``No Child Left Behind Act'' education 
bill last year. But this year, they have failed to provide funding to 
actually make those education reforms possible. As usual, the 
Republicans want to appear like they care about the important issues of 
working families, but they have no interest in actually funding them. 
This budget cuts last year's education bill by $90 million and calls 
for termination of forty educational programs. This forces my 
constituents to ask a very logical question: why can Republicans find 
enough money for tax cuts, but can't find enough money for our kids?
  Again, the budget surplus has shrunk by $4 trillion in one year. 
Extending the tax cuts will cost $400 billion over just two years, in 
2011 and 2012. Analysts estimate that the 10 years after that, the tax 
cuts will cost more than $4 trillion! The Center on Budget and Policy 
Priorities estimates that the size of the tax cut is more than twice as 
large as the Social Security financing gap. To make matters worse, 
these reckless tax cuts will go into effect when the baby boom 
generation starts to retire, Medicare faces a funding shortfall, and 
prescription drug prices undoubtedly will be higher than ever.
  I urge my colleagues to stop and think about what an additional tax 
cut today will mean for our families--especially our seniors and 
children.
  Republicans cut taxes for sport, but this is no game. This bill 
affects the lives of every American, the very people who have elected 
us to look out for them and to represent their interests here. Today's 
bill does nothing to help America. I urge a No vote.
  Ms. DeLAURO. Mr. Speaker, when Congress considered the president's 
tax proposal last spring, we had budget surpluses as far as the eye 
could see. Back then the Republicans argued that we could have it all, 
that the surpluses were so large we could strengthen Social Security 
and Medicare, make necessary investments in education and health and 
still have enough left over to pass their tax cut, half of which 
benefited the wealthiest one-percent of Americans.
  Well, to put it simply: they were wrong. Since that time, the economy 
has slowed to a halt, layoffs have soared and $4 trillion of the 
surpluses have evaporated, the quickest turnaround in our history. The 
president's own numbers show that the tax cut is the main culprit, 
accounting for almost half of the disappearance of the surplus. And the 
Republican budget is already draining the Social Security Trust Fund.
  So what is the Republicans' solution? They propose to make the tax 
cut permanent which will cost $4 trillion in the decade after 2012. 
That is $4 trillion gone at precisely the same time we will need the 
funds to shore up Social Security and preserve Medicare. At a time when 
we have serious budgetary challenges before us, we should be meeting 
the priorities of the American people, not giving away the farm. Making 
the tax cut permanent for the wealthiest 1 percent alone will total an 
amount one-and-a-half times the entire Department of Education budget. 
We should be investing in our kids, not giving away their future.
  Mr. Speaker, it is not fair, it not responsible and it is terrible 
policy. I urge my colleagues to reject this bill and leave this money 
in the Social Security Trust Fund where it belongs.
  Mr. CRANE. Mr. Speaker, I rise in strong support of H.R. 586, the Tax 
Relief Guarantee Act of 2002. While I support the bill in its entirety, 
I am particularly enthusiastic as regards to the chairman's amendment 
to this legislation.
  Last year we passed historic tax reform legislation. I am proud to 
have supported it in the House and I am very pleased that, on June 7, 
2001 President Bush signed the largest tax reduction in 20 years into 
law. The measure reduced the ``marriage penalty,'' starting in 2005; it 
doubled the child tax credit by 2010; it repealed the death tax in 2010 
after cutting the top rate from 55 percent to 45 percent; and it 
increased annual contribution limits on individual retirement accounts 
(IRAs) and other retirement accounts. The measure also temporarily 
increased the income limits exempting taxpayers from the alternative 
minimum tax. This provision is in effect for 2001 through 2003.
  The President's tax relief plan was eminently fair. It cut taxes for 
every taxpayer. No one was targeted in and no one was targeted out. It 
provided enormous tax relief to lower-income taxpayers and will take 
millions off the tax rolls altogether. It left the tax system even more 
progressive than previous law. Unfortunately, as enacted, all of the 
measure's provisions will be repealed on December 31, 2010. That's 
right, Mr. Speaker, January 1, 2011, the tax code will revert back to 
the provisions that were in effect before President Bush's tax relief 
legislation was signed into law. For example, beginning January 1, 
2011, taxpayers in the lowest bracket (currently 10 percent) will see 
their tax burden increase by 50 percent when the lowest bracket reverts 
back to 15 percent. When that happens, we will have the single largest 
tax increase in the history of our country. This could result in one of 
the largest tax increases in American history, one that could also 
destabilize long-term economic growth. A family of four with an income 
of $47,000 in 2002 would face a tax hike of $1,928 in 2011--a 100 
percent tax increase! Mr. Speaker, that is unacceptable.
  So we are left in a situation whereby the marriage penalty tax, the 
death tax, and higher marginal rates will all rear their ugly heads 
come 2011 unless we take action to eliminate them permanently. In the 
words of Speaker Hastert, ``How can a family make plans to pass on the 
family farm or small business if there is no death tax on Dec. 31, 
2010, and there is a death tax on Jan. 1, 2011?'' How indeed, Mr. 
Speaker?
  This legislation also includes a package of taxpayer rights 
provisions, which I support. The bill also moves up--from 2003 to 
2002--the effective date of the special needs adoption tax credit 
provided in last year's legislation.
  Mr. Speaker, this bill is not perfect. There is even more that we can 
do to ease the burdens placed on American taxpayers. For example, I 
believe we must eliminate the individual alternative minimum tax. This 
tax was never sound policy, but it is rapidly becoming an onerous and 
grossly inappropriate levy. Unfortunately, this legislation does extend 
exemptions to this individual alternative minimum tax that will expire 
in 2003. I would also like to see additional disincentives to 
charitable giving removed, such as is provided for in my bill to remove 
charitable contributions from those itemized deductions that are 
subject to an income cap.
  Mr. Speaker, I will continue to fight for these and other tax 
reductions. In the meantime, I would like to commend Chairman Thomas 
and the Rules Committee for crafting such a fine amendment. I urge my 
colleagues to vote in favor of the amendment, and in favor on final 
passage.
  Mr. EVANS. Mr. Speaker, making last years tax cut permanent endangers 
our ability to fund many of our shared priorities and is fiscally 
irresponsible.
  I joined many of my fellow colleagues in opposing last year's tax cut 
because we knew it would cause a budget deficit and fleece Social 
Security. And we were right. Now we are being asked to make these 
extravagant tax cuts permanent. Many of my colleagues whom used to 
preach fiscal responsibility in this house, now blindly vote to 
bankrupt our government further and burden our children with a mountain 
of debt. These tax cuts were the wrong remedy for an ailing economy and 
now making them part of our fiscal sustenance is just bad medicine. We 
all know these tax cuts grossly benefit the rich. We had an opportunity 
to pass a Democratic alternative which would have greatly increased the 
tax relief for working families. Instead we chose to steal from our 
senior citizens by robbing from Social Security and dumping off more 
debt on our children. And today the Republican leadership asks us to 
continue on this reckless fiscal path.
  When I was first elected, I told my constituents I would fight for 
our common interests

[[Page 4979]]

and priorities. I promised our seniors that I would protect Social 
Security and support a prescription drug benefit. I promised our 
veterans there would be money for their health care. I promised our 
soldiers and sailors a well deserved pay raise. And I promised our 
young people that I would expand their educational opportunities and 
not rack up more debt. I am still fighting for them, and making these 
tax cuts permanent makes it even harder to meet these priorities. 
While, the Republican Congress is running the government's budget on a 
credit card spending plan, I am explaining to my constituents why their 
government cannot pay the bills.
  Mr. Speaker, I urge my colleagues to vote down making permanent these 
fiscally irresponsible tax cuts. Let us consider our children, our 
working families, and our senior citizens before increasing the 
national debt, raiding Social Security, and cutting the taxes of the 
very wealthy.
  Mr. GILMAN. Mr. Speaker, I rise today in strong support of H.R. 586, 
the Tax Relief Guarantee Act of 2002. I urge my colleagues to support 
this important measure.
  H.R. 586 was an important measure that made significant changes to 
the penalty and interest sections of the Internal Revenue Code and 
strengthened taxpayer protections against unfair IRS collection 
practices and procedures. The full House passed it by voice vote in May 
2001, and was subsequently approved by the Senate.
  When the other body attached an amendment to H.R. 586 to advance the 
effective date of the adoption credit provision by one year, it 
necessitated additional approval from the House. The Rules Committee 
then approved further amending the bill to make the tax cut provisions 
passed by Congress last year permanent.
  In the landmark tax relief legislation passed last year, the various 
provisions were set to be phased in over the following 10 years. 
However, all of these various tax reduction provisions, including the 
repeal of the death tax, marriage penalty relief, the lowering of 
marginal rates, and the creation of the new 10 percent tax bracket, are 
set to sunset after 2010.
  This legislation will repeal those sunset provisions, outlined in 
Title IX of H.R. 1836, making the important tax relief passed last year 
permanent. By doing this, H.R. 586 will demonstrate to the American 
people that Congress was serious about enacting tax cuts, and that last 
year's action was not a mere short-term phenomenon. The American people 
deserve to know that the tax relief they enjoyed last year, especially 
the extra money from the $600 rebates, will be around for years to 
come, and will not arbitrarily disappear after 2010. This bill will 
accomplish this objective, and is deserving of our support.
  Mr. SANDLIN. Mr. Speaker, it is time to honor the commitment we made 
to American families when we passed the tax cuts last year. It is time 
to help family farmers and family business owners plan for their 
retirement. It is time to pass legislation that makes those tax cuts 
permanent.
  Since my election to Congress in 1996, I have consistently supported 
efforts to eliminate the federal estate tax. Over the years, as I have 
visited with folks all over my district in northeast Texas, I have 
heard horror stories from families who were forced to sell all or part 
of their family business or farm just to pay the estate taxes--which 
reduced their inheritances by over 55 percent. I found that only about 
30 percent of family businesses make it beyond one generation, and only 
13 percent make it to the third generation. That simply isn't what 
America is about.
  Farmers, especially, struggle every day to just get by. Farmers were 
left out in the cold during the economic boon of the late 1990's and 
suffered as others were acquiring riches. Eliminating the estate tax is 
one way to help farmers pass along their limited savings to their 
children, and their children's children. Not only does this punitive 
tax cause financial problems for families, some of whom are forced to 
sell property that has been in the family for generations or businesses 
built over a lifetime, but local economies are also hurt when jobs are 
lost and businesses close. Clearly, the social and economic costs of 
the estate tax far outweigh the revenue it provides for the federal 
government.
  Last year, I supported efforts to eliminate the federal estate tax, 
voting for legislation that phased-out the estate tax over 10 years. 
Unfortunately, the final version of the tax bill would not fully 
eliminate the estate tax until 2010 and then would re-establish the 
estate tax in 2011. The tax cut needs to be made permanent now so that 
American families can make long-term plans when planning for retirement 
and planning to pass their assets on to their children.
  The tax cut legislation also contained many other important 
provisions that together have helped mitigate the recession by pumping 
nearly $40 billion into the economy. Among the other important 
provisions are the phase-out of the marriage tax penalty--which removed 
the disincentive to marriage contained in the U.S. tax code. Making the 
tax cuts permanent means that American couples can count on their taxes 
being lower--rather than facing a big increase in their taxes in 2011.
  Like many of my colleagues, I am concerned about Social Security and 
making sure that it continues to provide our nation's seniors with 
income security. When I first voted for the tax cuts in 2001, I was 
assured that there was plenty of money to pay for the tax cuts without 
tapping into either the Social Security or Medicare trust funds. Since 
that time, the economic conditions in our country have changed. 
However, it appears that by 2011 and 2012, even under revised 
estimates, there should still be plenty of money to pay for extending 
the tax cuts.
  I would have preferred that my Republican colleagues would have 
allowed a vote on an important amendment to this legislation that would 
have made the tax cuts permanent while ensuring that the Social 
Security and Medicare trust funds were protected. As I mentioned last 
year, when I supported the original tax cut legislation, I would have 
preferred that the tax cuts include a trigger allowing delay of the tax 
cuts in times of national emergencies.
  This legislation also contains some important provisions, commonly 
referred to as the Taxpayers' Bill of Rights. These provisions make a 
number of changes to Internal Revenue Service (IRS) practices and 
procedures including debt collection practices, penalties for overdue 
taxes, privacy of taxpayer information and IRS employee conduct. These 
are common sense provisions that will make the IRS work better for 
American taxpayers while balancing enforcement with customer service.
  I believe that this legislation is both important and good policy. 
Today's vote simply changes tax law beginning in 2011. It does nothing 
to change taxes today. I urge my colleagues to support making the tax 
cuts permanent and to honor the commitment we made last year to 
America's families.
  Mr. UDALL of Colorado. Mr. Speaker, I cannot support this 
proposition. I think everyone in the chamber knows what is going on 
today. We all know why the Republican leadership has brought this bill 
forward. They are more interested in trying to score some political 
points than in trying to work in a bipartisan way to address the budget 
and the economy. I do not think that the supporters of this proposal 
expect it to become law this year. So, it might be said that there is 
no reason not to vote for it. But that would not be the responsible 
thing to do. A vote for this would be a vote for the underlying tax 
legislation in the form that it passed the House last year. I voted 
against that bill because it was based on economic projections that 
were very doubtful then--and that now have been shown to have been 
wildly over-optimistic.
  When that bill was passed, the economic weather seemed bright--we did 
not yet know that we already were in recession--and the sponsors of the 
bill claimed that we could rely on that to continue not just for a 
matter of months but for a full decade. Now, considering the dramatic 
change in economic conditions and the need for increased resources to 
fight terrorism and for homeland defense, it would seem reasonable to 
review the legislation to see if it needs adjusting. But instead, the 
supporters of the legislation are calling on us to say that nothing has 
changed and that we should permanently lock into place all of its 
provisions.
  I am not opposed to cutting taxes. I have supported--and still 
support--a substantial reduction in income taxes and the elimination of 
the ``marriage penalty.'' I have supported--and still support--
increasing the child credit and making it refundable so that it will 
benefit more lower-income families. And I have supported--and still 
support--reforming, but not repealing, the estate tax. But the 
affordability of last year's tax bill depended on uncertain projections 
of continuing budget surpluses that now may inspire nostalgia but are 
otherwise meaningless. As I said last year, the tax bill was a 
riverboat gamble. It put at risk our economic stability, the future of 
Medicare and Social Security, and our ability to make needed 
investments in health and education. For me, the stakes were too high 
and the odds were too long, and I had to vote against it.
  Those same considerations still apply. I agree with the Concord 
Coalition that we should not ``compound the problem by making the 
entire package permanent,'' and so I cannot vote for this proposal.
  Mr. ENGLISH. Mr. Speaker, we have the unique opportunity before us to 
help American

[[Page 4980]]

families. In my district, the average working family of four makes 
about $36,000 a year. Failing to make these tax cuts permanent, 
effectively is a vote for significantly increasing the taxes of working 
Americans.
  By making the tax cuts passed by the House almost a year ago 
permanent, Americans will not face a $2,000 increase in their taxes in 
2011. If these tax cuts were allowed to sunset, we would again be 
taxing those saving for higher education--putting it out of reach for 
many middle-class Americans. It has always struck me as odd that the 
federal government taxes balances in prepaid tuition programs which in 
my mind defeats the whole purpose of these valuable programs. Failing 
to enact this legislation would reinstate taxes on this valuable tool 
used by middle-class Americans to pay for their children's higher 
education. And make no mistake--this is a tax on middle class 
Americans. In Pennsylvania, families with an annual income of less than 
$35,000 purchased 62 percent of the prepaid tuition contracts sold in 
1996. Refusing to make this tax cut permanent will also cost families 
up to $20,000 a year as the contributions to education savings accounts 
shrink from $2,000 to $500 in 2011.
  But beyond that college graduates--many of whom have substantial 
debt--would be restricted on claiming a tax deduction for their 
borrowing. They would again be limited to 60 months for deducting their 
student loan interest, but the expiration of this tax provision goes 
one step further. The income limits would regress to the 2001 limit 
meaning the $100,000 caps for single taxpayers would drop to $40,000 
while $150,000 for joint returns would drop to $60,000. $40,000 in 2002 
barely pays for most college educations. I can only imagine what this 
equates to in 2011 dollars.
  College is no longer simply for the wealthy. More and more parents 
and children realize college is a prerequisite for attaining their 
dreams. Make no mistake, the debt loads are prohibitive. Congress 
recognized this and took the appropriate steps to help these students 
achieve their goals. By not providing permanency to these tax cuts, 
Congress would deal a severe blow to those who recognize that an 
education is an investment in the future. We should not further punish 
struggling families and college grads by reinstating taxes, which are 
the tools they depend on to make college more affordable.
  Mr. JEFF MILLER of Florida. Mr. Speaker, we are considering this 
legislation today because this is the right course for America and the 
right course for our economic future.
  Mr. Speaker, my colleagues across the aisle will continue to use 
scare tactics to say that by voting for this bill you are voting to 
strip seniors of their Social Security. We all know that this is simply 
not true. The fact of the matter is that there will be no reduction in 
Social Security or Medicare benefits as a result of the tax cut. Those 
are promises made and promises that will be honored. We owe it to our 
seniors to be honest about how Social Security works, similar to a 
bank, who takes in a depositor's money, credits the amount to the 
depositor's account, and then loans it out. In effect, what they are 
saying is that we are taking Treasury bills out of the trust fund to 
hand out as tax cuts. This is a ridiculous assertion. Social Security 
reform is a worthy discussion, but it is one for another day.
  At the same time, many will argue that we are burdening our children 
with huge debt by voting for this measure. I could not disagree more 
strongly. We constantly hear from our ``tax and spend'' friends that 
our tax cuts need to be at a level ``that we can afford.'' That is 
precisely the problem. Our government has become too large and is 
asking too much of the American people, to the point where it depresses 
economic growth. We must realize that our federal budget has gotten out 
of control and that Washington does not always know how best to spend 
the taxpayers' money.
  Since the passage of last year's tax bill I have heard from many 
constituents that have benefited from the measure. The simple fact is 
that the federal government has long overcharged the American public, 
and now is the time to permanently change this disturbing trend. We 
cannot, and we should not, forgo this opportunity.
  Mr. Speaker, my constituents sent me here to work for less taxes, 
less government and more personal freedom. For the sake of all hard-
working Americans, let's make these tax cuts permanent. I rise in 
support of this important legislation.
  Mr. BLUMENAUER. Mr. Speaker, one of the most disturbing trends for 
governance in America is the tendency to have short-term political 
expediency regarding budget, tax, and fiscal affairs trump responsible 
long-term policy. State and federal statutes and initiatives have been 
passed, which allow politicians and the public to feel good in the 
short term, give the illusion of solving problems, but setting up in 
the long term a fiscal train wreck.
  We have seen in state after state where tax cuts in the 1990s were 
joined by formulas for education and corrections that basically put the 
services in a form of autopilot. Money went automatically to certain 
forms of education expenditure while corrections systems were mandated 
to incarcerate more people for longer periods of time. These ``focus 
group'' driven policy initiatives, many ratified by voters without a 
careful analysis of the consequences, effectively painted states and 
the federal government into a corner. Everybody appears or at least 
acts like they are powerless. In the short term, given a conflicting 
set of legislative and voter approved initiatives, a good argument can 
be made that they are. While policies and politics are sorted out, 
basic services suffer and public frustration grows.
  On the federal level, we are in the midst of unraveling solid 
progress of the last decade to reign in federal spending and to impose 
some degree of fiscal discipline. While I didn't agree with all of the 
initiatives, and in fact voted against some as a Member of Congress, we 
were headed along a path that gave us choices to either restore 
draconian cuts or make other adjustments to help meet legitimate needs 
of our citizens.
  One year ago, the projected 10-year budget surplus was $5.6 trillion 
and elimination of the public debt was projected by 2010. Now, with 
record increases in Defense spending and the impacts of last year's 
recession well analyzed, the Republican leadership is attempting to 
make permanent tax cuts that will destroy any semblance of fiscal 
sanity. To fund a tax cut that delivers 44 percent of the benefits to 
the wealthiest 1 percent, the Republican budget invades the Social 
Security Trust Fund for a total of $1.5 trillion over the next ten 
years and $4.0 trillion in the following decade. The absurdity of the 
Republican leadership's fiscal policy would have a devastating effect 
on the federal government's ability to fulfill its commitments, such as 
Social Security and Medicare, and respond to unexpected events, like 
war and recession, for decades to come.
  The raid on Social Security and Medicare surpluses is not the only 
problem. The education of our children, the traffic congestion in our 
cities, and concerns about our drinking water and air quality are a few 
of the greatest challenges facing our communities. To put the size of 
the Republican leadership's tax cut and domestic priorities in 
perspective, when fully effective the tax cut will be--four times the 
budget for the entire Department of Education--more than three times as 
large as the Department of Transportation; and--twenty-four times the 
size of the Environmental Protection Agency.
  This week's series of votes marks a culmination of the worst 
instincts of the political process on the federal level and the 
abrogation of our federal responsibilities. A year ago I voted against 
a tax cut that was based on faulty logic at a time when our economy was 
softening and when we had not kept commitments we said had priority. 
Our Medicare system is sadly out of date with modern medical realities 
and faces three serious threats: (1) It doesn't meet the needs of 
seniors today who rely on ever increasing amounts of expensive drug 
therapy; (2) It artificially reduces costs by squeezing providers with 
a reimbursement rate for doctors and hospitals that are dramatically 
below the actual cost of service; (3) The long term stability of the 
Medicare program is jeopardized, while costs of this jerry-rigged 
system are going to explode at precisely the time there will be more 
pressures for Social Security funding.
  The consensus of people I meet in Oregon and around the country is 
that these policies are irresponsible. We ought to allow the majority 
in the House and Senate--both Republicans and Democrats--to work 
together to solve these problems. We ought not to have empty partisan 
maneuvering that is a calculated to further erode political trust and 
public confidence. This charade has only destructive results. It will 
further inflame partisan tensions, polarize people, and make it harder 
to do what responsible members of Congress and most of the public know 
needs to happen--put our fiscal house in order.
  Were it to actually be enacted into law it would further tighten our 
fiscal straightjacket, making it harder to fulfill responsibilities and 
promises, while creating artificial crises that will haunt us for years 
to come. This isn't just shameless political posturing before an 
election. It is evidence of a political process that is rapidly losing 
its capacity to respond in a thoughtful, dignified, and public-spirited 
fashion.
  Mr. DINGELL. Mr. Speaker, yet again I stand here perplexed by the 
actions of my Republican colleagues. Will they never cease to

[[Page 4981]]

amaze me? Perhaps one day I will realize that there are no lengths my 
colleagues on the other side of the aisle won't go to in order to help 
their fat cat buddies.
  I would note that the wealthiest one percent of the population will 
receive half of the benefits from this extension. The wealthiest one 
percent! I ask you, Mr. Speaker, do the wealthiest one percent of our 
population need our help? I think not.
  Based on the most recent CBO estimates, permanently extending last 
year's ridiculous tax cuts will increase the deficit by another $374 
billion through 2012.
  Mr. Speaker, just over a year ago, I stood in this very spot and 
urged my colleagues to vote against the Republicans' ill conceived tax 
scheme. Here we are, one year later and already back in deficit 
spending. Because of these absurd tax cuts and the Republican budget, 
we are taking $1.5 trillion out of the Social Security Trust Fund over 
the next 10 years.
  Mr. Speaker, the most simple laws of math dictate that we cannot 
carry out our priorities, Democratic or Republican, with this scheme. 
It is critical that we pass a Medicare prescription drug benefit and 
address the dramatically rising cost of Social Security as the baby 
boomers retire. Where will we get the money? How will we pay for 
homeland security and the President's war on terrorism? How does the 
President intend to fund his star wars program or increase the defense 
budget? How will the landmark education reform the President has 
advocated by carried out without any funding?
  Making this tax cut permanent will raise the 10 year cost of last 
year's tax bill to $2 trillion. Can we afford it? The answer, Mr. 
Speaker, is no.
  George Santayana, whose writings and wisdom I have found to serve 
those in politics, said: Those who cannot remember the past are 
condemned to repeat it. It is clear, Mr. Speaker, that my Republican 
colleagues have a very short memory.
  Not only do I strongly urge my colleagues to reject this bill, I 
would also ask that they join me in cosponsoring a bill introduced by 
my good friend from Massachusetts, Representative Frank. His bill, H.R. 
2935, would repeal the reduction in the top income tax rate. This would 
add about $100 billion to federal revenue over the next 10 years. All 
of this money would go into the Social Security and Medicare Trust 
Funds, where it is needed.
  Mr. PASTOR. Mr. Speaker, I rise today to oppose this legislation to 
extend last year's tax cut beyond 2010. Passage of this bill will only 
serve to further erode the Social Security Trust Fund and leave those 
who will be retiring in the next decade wondering if promises made will 
be kept.
  Almost a year ago, we passed an unfair tax cut which gave the top one 
percent of income earners almost 40 percent of the tax benefits. It was 
not right then, it is not right now, and it will not be right in 2011, 
when this legislation takes effect.
  The world changed on September 11. We are now fighting a war on 
terrorism which I strongly support. We now must provide additional 
funds for homeland security. I support this also.
  But within the last ten months, since the $1.35 trillion tax cut was 
passed, we have gone from a projected surplus of $5.6 trillion to 
deficit spending. Forty percent of the disappearing surplus, the 
greatest chunk, is attributed to the tax cut. I supported a tax cut, 
but not this one which did nothing, in my view, to stimulate the 
economy. It only served to make the wealthier among us better off. In 
my view, it would be unwise to make it permanent.
  Instead, I believe it would be more prudent to address the issues 
that many of my constituency are talking to me about every weekend when 
I am home in Arizona. Seniors are worried about where they will find 
the money to pay for their prescription drugs. Parents are trying to 
find the best schools for their children; schools that are not 
overcrowded, and that are not in disrepair, and that have the most 
modern equipment and qualified teachers. Young adults are searching for 
ways to afford college and they need Pell Grants and other means of 
financial support. While it appears the economy is on its way to 
recovering, unemployment continues to rise and people want to know that 
there are training opportunities out there if they don't have a job or 
if they should lose the one they do have. With the tremendous growth in 
Arizona, people are worried about affordable housing.
  These are the issues that are important to most Americans.
  Mr. Speaker, we all support tax cuts. We all believe that Americans 
should keep more of their hard earned money. But we also know that 
there are many needs out there is our country.
  I regret that I will not able to support this extension of last 
year's tax cut. Nor will I be able to support any further tax cuts that 
are being considered. New tax cuts or the extension of this tax cut 
means we will continue to raid Social Security and further neglect the 
people who are not among the top income earners in this country.
  I urge my colleagues to reject this unfair, unwise, and unjust 
legislation.
  Mr. COYNE. Mr. Speaker, I rise in opposition to this misguided 
legislation.
  Last year the House, against my opposition, passed a massive tax cut. 
That legislation will reduce federal revenues by more than a trillion 
dollars. If the additional interest costs of this tax cut are added in, 
the total change in the federal government's financial standing comes 
close to two trillion dollars. I should add that many of the provisions 
in last year's tax cut bill were phased in gradually, so that the total 
annual impact of the bill would not be felt for nearly a decade. The 
provisions in the legislation enacted last year would expire after ten 
years--but if we make those provisions permanent, as the bill currently 
under consideration would do, recent estimates indicate that in the 
decade after 2012, they will reduce federal resources by four trillion 
dollars.
  As I said last year during House consideration, of the tax cut bill, 
``the revenue loss to the federal government will explode after the 
year 2001--just when millions of Baby Boomers retire, the cost of 
Social Security and Medicare will explode.'' Given the current 
challenges that face Social Security and Medicare, it seemed to me 
then--and it seems to me now--that we ought to spent the coming decade 
preparing for the anticipated increased future demands that will be 
placed on Social Security and Medicare by paying down some of our $5 
trillion national debt. Instead, Republicans in Congress cut taxes 
dramatically and produced budget deficits for the foreseeable future.
  It is a shame that we squandered the opportunity last year to invest 
in our nation's future. It is a disgrace that today our Republican 
colleagues propose to dig the hole deeper. I urge my colleagues to do 
the sensible thing and pursue a conservative, fiscally responsible 
federal budget policy.
  I will oppose this misguided legislation, and I urge my colleagues to 
do the same.
  Mr. McDERMOTT. Mr. Speaker, here comes the train again. Last month, 
my Republican colleagues passed a fiscally irresponsible budget that 
called for spending hundreds of billions of dollars from the Social 
Security Trust Fund on tax cuts for the wealthy.
  Mr. Speaker, we gambled with tax cuts last year, we gambled again 
last month, and here we are today, rolling the dice one more time.
  In 1999, 2000, and 2001, Republicans in this chamber voted seven 
times to fully protect the Social Security Trust Fund. George W. Bush 
echoed the theme on the campaign trail and during the Presidential 
debates--he wanted to put those reserves in a ``lock-box'' to prevent 
it from being used to pay for tax cuts or additional spending. Even the 
beloved Speaker of the House stated, ``We are going to wall off the 
Social Security Trust Funds . . . We are not going to dip into that at 
all.'' Remember when you said that, Mr. Speaker?
  Now it appears that the government will raid the Social Security 
surplus for as far as the eye can see. And extending the tax cuts 
permanently would only worsen the deteriorating fiscal outlook.
  Mr. Speaker, this bill amounts to an intergenerational mugging. Our 
children will pay for the debt we incur today. The 75-year cost of 
making the tax cuts permanent would be more than twice as great as the 
entire shortfall projected in the Social Security Trust Fund.
  Furthermore, this bill, and you won't hear the Republicans mention 
this during the debate, will also cost the U.S. Treasury $4 trillion 
during the decade after 2012--just when the Baby Boomers are retiring 
in earnest and both the Social Security and Medicare systems are coming 
under mounting financial strain. If the congressional Republicans 
continue to sacrifice the safety of Social Security and Medicare, for 
the sake of tax cuts for the wealthy, America will be a country where 
the rich stay healthy and the sick stay poor. If we simply look at the 
budget forecast, it is clear that permanent tax cuts mean permanent 
deficits.
  Mr. Speaker, these tax cuts are so heavily skewed to benefit the 
wealthy that the richest one-percent of taxpayers would receive tax 
breaks that equal one and one half times the entire budget of the 
Department of Education. If we completely repeal the estate tax, in 
particular, we'll be essentially creating intergenerational gated 
communities. Our capitalist friend, Adam Smith, said, ``A power to 
dispose of estates for ever is manifestly absurd. The earth and the 
fullness of it belongs to every generation, and the preceding one can 
have no right to bind it up from posterity.

[[Page 4982]]

  Mr. Speaker, this chamber sometimes seems like the House of Lords, 
because it attempts to do everything in its power to protect the 
pseudo-aristocracy. Mr. Speaker, we need this bill about as much as we 
need a runaway train. I urge my colleagues to oppose this campaign sop, 
disguised in the form of H.R. 586.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 390, the previous question is ordered.
  The question is on the motion offered by the gentleman from 
California (Mr. Thomas).
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. HULSHOF. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 229, 
noes 198, not voting 8, as follows:

                             [Roll No. 103]

                               AYES--229

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McIntyre
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Roemer
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Sandlin
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stump
     Sullivan
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NOES--198

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--8

     Clement
     Delahunt
     Hastings (FL)
     Jones (OH)
     Oberstar
     Rogers (KY)
     Roukema
     Traficant

                              {time}  1450

  Ms. WOOLSEY, Mr. ACKERMAN, and Mr. OWENS changed their vote from 
``aye'' to ``no.''
  So the motion was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. OBERSTAR. Mr. Speaker, this afternoon I greatly enjoyed the 
opportunity to visit with high school students from Becker, Minnesota 
who are participating in the Close-Up program. As a result of our 
visit, I was unable to record my vote during the consideration of the 
misguided tax legislation that will undermine Social Security.
  Had I been present, I would have voted ``no'' on rollcall 103, for I 
strongly opposed last year's irresponsible tax bill, and I certainly do 
not support making these tax law changes permanent. If enacted, this 
fiscally reckless plan would spend $400 billion on tax cuts for the 
wealthy, every penny of which comes directly out of Social Security.

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