[Congressional Record (Bound Edition), Volume 152 (2006), Part 4]
[House]
[Pages 5429-5434]
[From the U.S. Government Publishing Office, www.gpo.gov]




    MOTION TO INSTRUCT CONFEREES ON H.R. 4297, TAX RELIEF EXTENSION 
                       RECONCILIATION ACT OF 2005

  Mr. CARDIN. Mr. Speaker, I offer a motion to instruct.
  The SPEAKER pro tempore (Mr. Bishop of Utah). The Clerk will report 
the motion.
  The Clerk read as follows:

       Mr. Cardin of Maryland moves that the managers on the part 
     of the House at the conference on the disagreeing votes of 
     the two Houses on the Senate amendment to the bill H.R. 4297 
     be instructed--
       (1) to agree to the provisions of section 102 (relating to 
     credit for elective deferrals and ira contributions), and 
     section 108 (relating to extension and modification of 
     research credit), of the Senate amendment,
       (2) to agree to the provisions of section 106 of the Senate 
     amendment (relating to extension and increase in minimum tax 
     relief to individuals),
       (3) to recede from the provisions of the House bill that 
     extend the lower tax rate on dividends and capital gains that 
     would otherwise terminate at the close of 2008, and
       (4) to the maximum extent possible within the scope of 
     conference, to insist on a conference report which will 
     neither increase the Federal budget deficit nor increase the 
     amount of the debt subject to the public debt limit.

  The SPEAKER pro tempore. Pursuant to clause 7 of rule XXII, the 
gentleman from Maryland (Mr. Cardin) and the gentleman from 
Pennsylvania (Mr. English) each will control 30 minutes.
  The Chair recognizes the gentleman from Maryland.
  Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, people of this country are looking to our leadership for 
change. They want us to move in a different direction. They are tired 
of our spending money and going further into debt. They want to see us 
do something about the national debt and the deficit here in 
Washington. They want us to stop digging the hole deeper. They want to 
see a commitment to reduce the debt. They want to see tax fairness. 
They understand that the tax bills that we have passed in recent years 
provide average tax relief for those under $50,000 of $435 a year while 
those between $500,000 and $1 million enjoy $22,000 of tax relief. They 
want to see tax fairness.
  They want economic opportunity so this economy can grow. They know 
that the R&D tax credit that allows companies to invest in the future 
needs to be made permanent. And they certainly want to see more savings 
in America. They understand that we have a negative saving rate. We 
know that young people and people of modest income have a very 
difficult time putting any money away for their retirement savings and 
too many companies do not offer incentives for their employees. They 
want to make sure that we extend the saver's credit that allows them to 
put money away.
  Mr. Speaker, my motion to instruct the conferees on H.R. 4297 deals 
with these opportunities.
  When I noted this motion last night, I was not aware that the 
conference is close to an agreement, and I use that word reluctantly 
because, as I understand it, there has been no conference. It is 
basically the Republican members of the conference committee have been 
negotiating; and according to the most recent Congressional Daily, tax 
writers are within striking distance of a reconciliation deal.
  We have received a red alert from the Concord Coalition. The Concord 
Coalition, which is a nonpartisan body whose sole purpose is to try to 
bring some sense in this Congress in dealing with the deficit, says 
watch out. The deal that is being struck, ``instead of choosing among 
competing priorities,'' and I am quoting from the Concord Coalition, 
``identifying revenue offsets or otherwise scaling back the cost of the 
tax cuts to comply with the budget, Congress is considering gimmicks 
and legislative maneuvers to circumvent budget limits and increase the 
deficit even more than the budget already allows. Evading the limits in 
the budget resolution would make a bad budget worse.''
  I could not agree more with the Concord Coalition.
  So what does my motion do with the tax legislation that is in 
conference? It provides for four instructions to our conferees:
  First, it says to the maximum extent possible within the scope of 
conference, insist that a conference report will neither increase the 
Federal budget deficit nor increase the amount of debt subject to the 
debt limit. I would think that every Member of this body would endorse 
that instruction to our conferees.
  I was just listening to the debate on the budget resolution and heard 
how we need to rein in the deficit. Well, this is our opportunity to 
act on that intent. This motion makes it clear that we want to rein in 
the deficit and the debt to the maximum extent possible. The 2006 
budget had a deficit of $371 billion. The 2007 presented budget will 
increase the deficit by $423 billion, and I am not even counting the 
surpluses from Social Security that should not be counted in this.

                              {time}  1645

  According to the Joint Tax Committee, the conference may very well 
bring out a report that could increase the deficit by another $80 
billion.
  Enough is enough. Let's make a commitment to America's future. Let's 
recognize how dangerous this deficit is to America's future. Let's 
understand that in order to pay our bills, we have to ask foreign 
governments to buy our bonds, governments that don't agree with our 
foreign policy, who buy our bonds not because it is a good investment, 
but because they want to make sure that the exchange rate between their 
currency and ours is favorable so they can send more products into 
America, taking more jobs away from America.
  Yes, this is a matter of national security, and that is why this 
motion speaks to this bill that could make the circumstances much 
worse. Let's tell our conferees not to do that.
  The second part of the motion to instruct deals with two very 
important tax credits that are scheduled to expire. One is the savers 
credit. The other deals with the R&D credit. I mention both of those 
because it is important that we deal with these two credits that are 
scheduled to expire.
  My motion tells us to take the longer period that the other body 
agreed to. Let's extend for 3 years the savers credit. I want to make 
it permanent. At least let's make it 3 years. The R&D that allows 
businesses to reinvest to create jobs, we should make it permanent. 
Let's make it at least 2 years.
  But, Mr. Speaker, let me tell you my fear. I would urge my colleagues 
to support this motion. Let me tell you my concern. The Concord 
Coalition is admonishing us that they believe that we will be keeping 
these politically popular tax cuts hostage to new legislation, that it 
won't even be in this legislation, in this conference. Instead, we are 
going to put it in another bill to make the deficit even greater.
  This should be our priority, extending these tax credits. This may be 
our last opportunity to speak to that. So I urge my colleagues who 
profess to support the savers credit and R&D credit to support this 
motion.
  This motion also deals with the Alternative Minimum Tax, to make it 
clear we need to extend the Alternative Minimum Tax. If we don't, 
taxpayers will soon be getting information from the IRS, instructions 
to let them know that their taxes for 2006 are going to be 
substantially higher than they are for 2005. For you see, Mr. Speaker, 
if we don't correct the alternative minimum tax, and let me remind you 
the bill that passed this body did not include that, if we don't 
include it at this stage, because this is the bill that is going to be 
on the way to the President, we are going to find in excess of 15 
million of our constituents across the country are going to wake up and 
find they now have tax liability they didn't expect, not because they 
are trying to avoid taxes, but because of action taken by us which 
increased liability for the Alternative Minimum Tax.
  So it is critically important. This is our last opportunity to say 
before the

[[Page 5430]]

conference is likely to take action that the Alternative Minimum Tax is 
our priority.
  Then the fourth thing, Mr. Speaker, is that we have to make choices. 
We can't do everything. I was listening to the chairman of the Budget 
Committee tell us that we can't give everything to everybody that 
everybody wants. Well, I hope he will vote now in the first vote after 
his speech to carry that out. We can't do everything that everybody 
wants and still bring the budget deficit down.
  The capital gains and dividend provisions, they are not set to expire 
until 2008. Let me remind my colleagues of that. We have plenty of time 
to take that issue up. So my instruction includes holding off on that 
issue so that in fact we can bring in a conference that is in 
compliance not only with the letter, but the spirit of our commitment 
to deal with the budget deficit.
  Mr. Speaker, I urge my colleagues to support this motion. I believe 
this is what almost everyone in this body has been speaking about. Now 
let's see how they vote.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, it is a real privilege to appear opposite the gentleman 
from Maryland. I realize he is not seeking reelection this year and is 
aspiring to move up to a higher level. I may say at the outset it has 
been a privilege working with him on the Ways and Means Committee for 
the last 12 years. I have come to admire his talents, even when they 
are enlisted on behalf of something as weak as the instruction before 
us today. I look forward to debating the point.
  Mr. Speaker, we have a motion to instruct that has been put before 
this body that sends exactly the wrong message. It is a message that is 
essentially against economic growth and against job creation, and it 
would put Congress on record, on the brink of our success in a tax 
conference in favor of things that we have in the past voted against. 
This instruction in some areas is amorphous, and elsewhere is perverse, 
and in effect it is an instruction that leads us inevitably to a tax 
increase.
  Mr. Speaker, it is important for us to recognize that since 2003 our 
gross domestic product has seen its fastest growth in 20 years, 
averaging a robust 4.4 percent per quarter. This is extremely 
important, because as we have grown the economy at this clip, we have 
generated new revenues, new revenues that we had not anticipated in our 
budget, new revenues that have held down our deficits, new revenues 
that have created an opportunity for us to finance our social needs. 
And as we show restraint, as we do in the budget resolution we are 
voting on today, it holds forth the promise of our getting back to a 
balanced budget, something that the other party was never able to 
achieve when they were in the majority.
  This growth is important to note, because it is attributable in part 
to the reduced rates on capital gains and tax dividends.
  We have a pro-growth tax policy in place, which has allowed us to 
expand the tax base and generate revenues outside of the estimates in 
our budget. I would like to point out that ultimately the path to a 
balanced budget has to be through high growth rates and ultimately 
through the financial discipline that today's budget resolution will 
suggest. Yet, the motion to instruct conferees before us in effect puts 
off to a date in the future the opportunity to continue to extend the 
current tax rates on those pro-growth parts of our existing tax policy, 
with potentially perverse results.
  I would like to also point out, since we have heard so often and we 
have heard on the floor today that the tax policies we have in place 
only benefit the affluent, I would like to point out who in the real 
world has been receiving the reduced rates and therefore whose taxes 
will we will be raising if we fail to extend the current rate.
  Mr. Speaker, it is notable that 54 percent of those families 
receiving dividend income had incomes of less than $75,000 and they 
received an average of $1,400 in dividends. That is very significant 
for those families. Together, families with incomes under $100,000 have 
more than $20 billion in dividend income.
  In 2005, an estimated 10.3 million families in the 10 and 15 percent 
brackets will save on their taxes because of the 2003 law. So the 
rhetoric that this tax relief only benefits the wealthy is vacant 
ideological posturing.
  If we let these rates expire, it would be in effect a tax increase on 
many Americans, including a lot of middle-class Americans. Not only 
would the lapse of the reduced rates impose a tax increase, it would 
particularly discourage equity ownership among working families, among 
whom we have seen a stunning 91 percent increase in stock ownership. To 
turn back the clock on policies that have more American workers owning 
a stake in their future is simply the wrong thing to do today.
  Our side also strongly supports extension of the savers credit and 
the research credit, which is why both of these policies were extended 
in the House-passed bill. That is already in there. Unfortunately, 
almost every single member of the minority voted against extending 
those incentives when the House voted on the bill last December.
  I should further point out that our side also strongly supports 
extending relief from the AMT. In fact, I am a cochairman of the Zero 
AMT Caucus and I have been vigorously advocating repeal of the AMT 
since I came to Congress, an ugly tax legacy of the previous majority. 
The House has spoken on this issue, and it is worth noting that we 
voted overwhelmingly in December to extend AMT relief as a stand-alone 
bill. By moving this relief outside of reconciliation, we can shield 
millions of families from the AMT without having to raise taxes to do 
so.
  Mr. Speaker, this motion to instruct is asking for a tax increase on 
effectively the seed corn of the economy. It is asking us at a critical 
time to put a brake on economic growth when we need it most.
  If we are serious about maintaining the forward motion in our 
economy, I would suggest that we need to maintain our current tax 
policies and not undercut our efforts to maintain them. I am calling on 
the House to vote against this motion. It is the right thing to do.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDIN. Mr. Speaker, I yield myself 30 seconds just to correct 
the record from my friend from Pennsylvania.
  If AMT relief was a priority, you would have put it in budget 
reconciliation, because you know that is the only legislation that 
stands a chance of passage to the President. You have had 12 years to 
fix it and you have not. There is a statute of limitation on how long 
you can go back to when the Democrats were in control.
  In regards to the $1,400 you referred to for families under $75,000, 
I question your numbers. I will tell you, their share of the national 
debt as a result of your fiscally irresponsible policies will far 
exceed the $1,400 in tax relief.
  Mr. Speaker, I yield 7 minutes to the gentleman from Michigan (Mr. 
Levin), my colleague on the Ways and Means Committee.
  Mr. LEVIN. Mr. Speaker, I would say to Mr. English, if you are 
serious about the AMT, you would vote for this motion to instruct. You 
can join any caucus you want. It is what happens on the floor that 
matters.
  You talk about the path to the balanced budget. The Republican path 
to a balanced budget is more deficits, and your notion is more deficits 
will help growth and eventually we will grow out of the deficit. The 
trouble is, it isn't working.
  When you talk about growth figures, you don't mention that for the 
typical family in this country, there hasn't been an increase in 
income. Median income in this country has essentially been flat these 
last years.
  You say if you vote for the motion to instruct it leads to a tax 
increase. That makes no sense at all. The present provision lasts 
through 2008. What you are doing is extending it several years from 
now.

[[Page 5431]]

  Why does Mr. Cardin come here again? How many times have we raised 
this issue? The main reason we bring this is because you distort the 
facts when you make your arguments. Pure distortion. That was true the 
last time we debated this.
  I read the New York Times article of just this last Wednesday that 
picks up the pure distortions by the Republicans. I think you have 
repeated them again. Essentially what was said last time in defense of 
your position was this: ``Nearly 60 percent of the taxpayers with 
incomes less than $100,000 had income from capital gains and 
dividends.'' The New York Times story goes on to say, ``IRS data show 
that among the 90 percent of all taxpayers who made less than $100,000, 
dividend tax reductions benefited just one in seven and capital gains 
reductions one in 20.'' So you either get your distortions out of thin 
air or from some other source.
  You try to say that this is a matter of a tax benefit mostly from the 
non-wealthy. I just want to read again from the New York Times article, 
and this traces the 2003 investment income cuts.

                              {time}  1700

  The investing income cuts. And here is what happened: The average tax 
cut for people making less than $50,000 was $10. For people making 50 
to $100,000, the average tax cut--this is again in investment income--
was $68. For the family $100,000 to $200,000, the average tax cut was 
$268. For someone making $200,000 to $500,000, $1,489. For those 
$500,000 to $1 million, $5,491. For those making $1 million to $10 
million, $25,450. And, again, in contrast to $10 for less than $50,000 
and $68 for $50,000 to 100,000. On those who are making $10 million or 
more, the average cut is $497,463.
  The conclusion in this article, I think not refuted, is that the top 
one-tenth of 1 percent of taxpayers got 43 percent of the benefit. And 
you have the gall to come here and talk about these two tax cuts or 
decreases benefiting the majority of the American people. That is not 
true.
  Now, another myth that you perpetuated is that more people will 
really benefit from this change in investment income taxation than if 
we act on AMT. Mr. Cardin has talked about this, we have talked about 
this before, we have heard your mythology in the Ways and Means 
committee from the very beginning. There are going to be 17 million 
people or more affected by the AMT if we do not act compared to several 
million now. And you throw your lot in with the millionaires instead of 
people who are in middle income situations. That is whom you are 
benefiting, basically.
  So that is why we come forth here. You distort the record. We want to 
tell the truth to the American people. Whose side are the Republicans 
on? It is the millionaires. I think it is fine if people make a million 
bucks, but they do not need a tax cut. What is needed is some actual 
civility and sanity when it comes to the deep deficits here, and also 
some honesty with the American taxpayer, and not helping a very few and 
hurting the very many. That is what you are doing.
  That is why Mr. Cardin is coming forth once again, once again, and we 
are putting you to the test. If you vote wrong today, expect to hear 
from the American people tomorrow and tomorrow and in November.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I reserve the balance of my 
time.
  Mr. CARDIN. Mr. Speaker, I yield myself 1 minute to emphasize a point 
that Mr. Levin made.
  There is no question that the overwhelming amount of relief provided 
by the tax cuts from 2001 and 2003 go to the highest income people. 
That is not tax fairness. There is modest relief that goes to middle 
income families, very modest relief. Every dollar and more of that will 
be eaten up by these increased debts and deficits. The interest costs 
alone, the share of the National debt all will make whatever relief is 
provided in here meaningless. And when you take a look at the impact 
that the deficits are having on our economy and you look at how middle 
income families are struggling in order to meet their needs, in order 
to be able to afford the increase in college education and energy costs 
and health care costs, they are falling further and further behind.
  So for the sake of middle income families, I would urge my colleagues 
to support this motion in the conference to bring back a responsible 
product.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I reserve the balance of my 
time.
  Mr. CARDIN. Mr. Speaker, I yield 5 minutes to the gentleman from New 
Jersey (Mr. Rothman), a distinguished member of the Appropriations 
Committee who is known for his commitment to tax fairness and fiscal 
responsibility.
  Mr. ROTHMAN. Mr. Speaker, what are the priorities of the Democratic 
Party? And what are the priorities of the Republican majority, the 
Republican majority who have been in power in the House and the Senate 
for 5\1/2\ years with a Republican President for 5\1/2\ years, with 
their policies, leading to a greater and greater difference, disparity 
in incomes between the very rich and the middle class and the working 
poor and the poor, and the greatest deficit in the history of the 
United States. That is the result of the priorities and policies of the 
Republican majority. That is a fact. I believe they are the wrong 
priorities, and they put us continuous on the wrong track, but that 
will be up to the voters in November to change.
  But what about the comments you hear about these tax cuts that are 
spurring the economy in unprecedented revenues? Hogwash. Hogwash. The 
Secretary of Treasury, John Snow, from the Bush administration came 
before our committee this week and said, Secretary of the Treasury 
under President Bush said, these tax cuts are responsible for one-third 
of this deficit. They are responsible for one-third of this deficit, 
the greatest deficit in the history of the United States. That is what 
these tax cuts have caused.
  He said, by the way, for every dollar in tax cuts we give, we do not 
get back more money than we gave out in tax cuts. We get 30 to 40 cents 
for every dollar in tax cuts which means we lose in the Treasury 60 to 
70 cents on every dollar we give out. We only get back 30 to 40 cents.
  Well, if we could afford that I suppose it would be great to give 
people back more money. Then the question is who should get the tax 
cuts? People on the Republican side of the aisle say boldly, everybody 
should get a tax cut. Well, I do not know about you but in a time of 
war, in a time when we have natural disasters like Hurricane Rita and 
Hurricane Katrina, when people are working harder and not making any 
more money, they have growing health care bills and are worried about 
their retirement, they are having their college tuition costs increased 
by the Republican majority, veterans are paying more than ever because 
the majority says they do not have the money, they do not have the 
money, they say, even to inspect more than 5 percent of the containers 
coming into America, then say we do not have the money.
  Hong Kong inspects 100 percent of the containers. What are they doing 
with the money? They are giving it to the very richest people in the 
country, and they say it boldly. Yes, we are doing that. Everybody 
should have a tax cut. Well, you know these same folks have been 
getting the benefit of trillions of dollars of tax cuts since President 
Bush took office.
  The recession has been over for 3 years. Do they still need the money 
when we have the biggest deficit in history? And you tell veterans and 
college kids and seniors, we do not have the money for your program, or 
parents with kids who have disabilities, we do not have money for your 
program? They say, well, there they go again, those Democrats, class 
warfare. Hogwash.
  We have to make a decision about what to do with our tax dollars. 
Should we spend it on people who need it, the middle class, by getting 
rid of this Alternative Minimum Tax. The Republican majority says no, 
we do not have

[[Page 5432]]

the money to get rid of the Alternative Minimum Tax that affects 
primarily the middle class. They say they do not have the money. They 
did not put it in the budget.
  What they did put in their budget were huge tax cuts for people 
making over $500,000, $1 million, $10 million, up to the sky. Forty-
five percent of the tax cuts under their bill here, 45 percent of the 
revenues go to people with incomes of $1 million a year. Is that the 
country you want to live in where we allow the Republican majority to 
give our money to the rich and tell everybody else go jump in the lake, 
pull yourselves up by your boot straps, but the rich should get the 
money?
  There is a difference, Mr. Speaker, between the Democratic Party, who 
says let's fix that Alternative Minimum Tax that hurts the middle 
class. Let's spend the money on that, not tax cuts for the very rich.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, how much time do I have 
remaining?
  The SPEAKER pro tempore (Mr. Kuhl of New York). The gentleman from 
Pennsylvania (Mr. English) has 23-\1/2\ minutes remaining.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 5 minutes to the 
distinguished gentleman from Michigan (Mr. McCotter).
  Mr. McCOTTER. Mr. Speaker, I assure you I will not use the balance of 
that time.
  Just to point out something that is a continual pet peeve of mine, I 
am not on Ways and Means and I am not on Appropriations but it seems to 
me that if you are going to give money to someone it comes through the 
appropriations process, not through taxation.
  Government spends what it takes while people spend what they make. In 
the final analysis, to provide tax relief to the American people is not 
an act of giving them anything from the government's largess. What it 
results in is an act on the part of the government to refrain from 
taking people's hard-earned money in the first place.
  Now, as to the rhetorical question that was asked, if I may turn it 
into an actual query that was put to us, I would prefer to live in an 
America where I know that if I work very hard and I follow the law and 
I want to work and improve my quality of life for myself, my children, 
and my community and country, is that the fruits of my labor will not 
be taken from me by the government. And that attempts to make sure that 
the fruits of my labor are left in my pocket are not considered a 
giveaway by the Federal Government. Because the fact is it is the 
confiscation of private property, the act of taxation. The only thing 
that does to render it criminal is the fact that we have the consent of 
the governed. In a duly elected country, if the consent of the governed 
is through their elected representatives not to take that money in the 
first place, it is not a giveaway.
  Mr. CARDIN. Mr. Speaker, I yield 3 minutes to the gentleman from New 
Jersey (Mr. Rothman).
  Mr. ROTHMAN. Mr. Speaker, I just want to respond to the gentleman. 
Maybe it is a question of religious values, but I thought every major 
religion in the world said that those with extreme wealth should not be 
living high on the hog while everybody else is suffering. I thought 
that that is what every major religion talked about.
  If I am correct in my American history, the income tax does not say 
``give the money to the rich and they do not have to pay any more than 
the poor.''
  Our income tax system is a progressive system under the American 
belief that if you are incredibly wealthy you should be paying a little 
more in taxes, not only in dollar amount but in percentage of your 
taxes. That has been our tax policy in this country since there was an 
income tax at the beginning of the 20th century.

                              {time}  1715

  So we know as Americans, as good moral people, Mr. Speaker, that this 
is the right thing to do. You do not give your money to the people who 
need it the least.
  Now, they say they earned it and you are not giving them back their 
money. However you want to describe it, how much money do we get in 
from those taxes? We get in enough money to still have the largest 
deficit, not pay for education costs and veterans costs and other 
costs, unless we say to those who got trillions of tax cuts since 2001, 
you know, you are making over $500,000 a year, you have got tens of 
thousands, maybe hundreds of thousands, of dollars in tax cuts since 
2001, perhaps during this time of war; perhaps during the time of the 
greatest deficit in the history of the United States, we are going to 
say this year, let's give the money or take your taxes and use that 
money to help the middle class by getting rid of the alternative 
minimum tax.
  Mr. Speaker, I said this before. I will say it again, it is worth 
repeating. There is a difference between the Democrats and the 
Republican majority. The Democrat minority, hopefully to be the 
majority after November, we believe the money that is collected in 
taxes should be spent wisely, prioritized to meet the needs of our 
country, the middle class, the working class, to give incentives to 
people to work.
  If you are making $1 million, $10 million, you are going to have to 
pay your fair share, and you can afford to allow your taxes to be used 
to help the middle class. Your kids are going to have plenty to eat. 
Your kids are going to college, and you will drive your Rolls Royce and 
get it filled up every week with gasoline. That is the difference, not 
class warfare.
  What do we do with our money? Give it to the rich or give it to the 
middle class who are the heart and soul and lifeblood of this economy 
and this country?
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 2 more minutes to 
the gentleman from Michigan (Mr. McCotter) in order to steer the 
discussion away from religion and back toward economic literacy.
  Mr. McCOTTER. Mr. Speaker, I thank you; and before I steer on to that 
path, I would refer the distinguished gentleman to Pope Benedict XVI's 
encyclical because it shows where the government is involved in 
taxation for the purposes of, quote, unquote, leveling, which is trying 
to discern what is the proper level of material equality in a free 
society, that the compulsory act of government of taking that money 
from people and then expending it on someone's behalf vicariously is 
certainly not tantamount to the moral good in a virtuous society that 
is achieved by the individual donating that money directly to charity 
and engaging in the life of their community to help their fellow 
citizens who are less fortunate.
  But I am sorry, I will not continue to go down that path.
  It is also interesting, the gentleman talks about not wanting to have 
class warfare or class envy at the very time he engages in it. I find 
that disingenuous, and I will not do the same.
  At the end of the day, what I would like, I think, to help frame my 
debate is, what level of taxation is enough? What level is enough? What 
is optimum for your particular, I assume hypothetical, level of 
material equality in this country that would be dictated by the 
government's confiscatory tax policies and arbitrary policies in 
appropriation? I want to know what that level is. I want to know the 
level then would be attained. If I am going to ask people to give their 
private property to government, I have to show them the end of the 
line. I have to show them how high it is going to and I have to show 
them what the concomitant benefit to this country is going to be. I 
never seem to hear that. For purposes of clarity, I would be 
interested, what is your ultimate goal?
  I also would like to add, just as personal disclaimer, as someone who 
is middle class, as someone who pays the AMT, who gets notes from their 
accountant asking if there is anyone who he knows, i.e., me, what can 
they do about the AMT, I would like to see it gone, and I would also 
like to see the taxpayers not pitted against each other if we do not 
have our choice.
  I suppose the final analysis, and I will close on this, is that the 
Republican Party believes that a free people, a free, virtuous people, 
which we are in

[[Page 5433]]

this country, will take care of those who are less fortunate and will 
also ensure that the civil society we live in endures.
  I believe that the minority party believes that they can best 
determine how to control your life, conduct your affairs, and reach 
some hypothetical abstraction of equality which does not exist.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, if I might inquire of the 
gentleman on the other side if he has no more speakers, I am prepared, 
since I believe he has the power to close, I am prepared to make a 
closing presentation, and I will yield myself accordingly such time as 
I may consume.
  Mr. Speaker, there are obviously a couple of things on the record 
that need to be corrected.
  One of the earlier speakers made a comment about it being hogwash, I 
think was his elegant term, that the pro-growth policies that this 
majority put in the Tax Code have helped the economy, have helped 
economic growth in this country which has achieved record rates, have 
allowed us to generate new revenue that in turn would bring down the 
deficit, and yet, in the contrary position, Chairman Greenspan just a 
few months ago, when he was still in office, testified before our Joint 
Economic Committee and made very clear that the tax policies of this 
majority, particularly as they apply to the more dynamic side of the 
Tax Code, have been successful in generating economic growth and have 
been successful in helping the economy. It is precisely about 
maintaining these tax policies and not doing a tax increase that we 
consider this motion to instruct.
  I think this motion to instruct would be perverse. It has been 
challenged here whether this motion to instruct, in fact, represents a 
tax increase. It is curious that some in Washington still argue that 
when you have put rates into place and the market has adjusted for 
them, that if you allow those rates to lapse, somehow that is not a tax 
increase. Only in Washington is that kind of fantasy engaged in.
  What is fairly clear is the tax policies that are our majority and 
our majority's budget resolution attempt to preserve are tax policies 
that have been beneficial to the economy, and the alternative is 
clearly a tax increase.
  Let us consider the AMT for a moment, and I think this is very 
important.
  To listen to the other side talk about the need to deal with AMT 
relief through this budget reconciliation overlooks the fact that the 
House passed an AMT bill by a margin of 414-4 a few months ago. At that 
point, clearly an overwhelming majority, over 400 Members of this body, 
felt that passing a bill specifically to deal with the AMT was the 
right way to go.
  So when we had another Member on the other side suggest that it was 
essential for someone to vote for this instruction if they are serious 
about dealing with the AMT is absurd. The House has already dealt with 
the AMT and in a manner that I think is appropriate.
  It is appropriate for our tax conference to be in a position to deal 
with other issues, including extending existing tax policies.
  Now, the gentleman from Maryland pointed out at the beginning of his 
remarks that the current tax rates are going to be in place until the 
year 2008 on capital gains and on dividend income, and that is, quote, 
unquote, plenty of time. I would suggest to the gentleman that the 
markets may disagree with him. The markets are assuming that we are 
going to extend current rates, and certainly in the past we have never 
scheduled a tax increase in these areas in advance and telegraphed the 
punch. I would suggest that markets might respond to this in a very 
strange way; and by adopting this motion to instruct conferees, in 
fact, I would suggest it would send exactly the wrong message at a time 
like this to the markets.
  Some might argue that going back to the old higher rates, raising 
taxes in that manner, might generate revenue; and yet we have heard 
testimony before the Ways and Means in recent years that suggests that 
the revenue-maximizing rate in capital gains, according to one expert, 
might be between 20 percent and 15 percent, but in the next order of 
probability might be between 15 percent and 10 percent.
  I would suggest, since the gentleman from New Jersey raised the 
question of morality, there is not really a coherent morality in 
setting tax rates in a particular area that are above the level at 
which they will generate the most revenue. I think that the current 
rates on capital gains clearly have been beneficial, and it is not 
clear that we are going to generate additional revenue if, as the 
gentleman on the other side would like to do, we increase those rates.
  We have generated revenue that was not captured in our calculations 
by lowering these rates. Our experience with raising capital gains 
rates over the years is that the revenue that was supposed to occur 
rarely does, and that suggests to us that perhaps the 15 percent rate 
might be an ideal place to generate the most revenue, not that there is 
ever really a compelling argument for setting a rate at the revenue-
maximizing rate.
  I think there are also some things that we ought to consider about 
some of the figures that were thrown out here. I, in my initial 
remarks, pointed out some of the clear benefits to the middle class 
that have accrued from the current tax policies, and the gentleman on 
the other side of the aisle challenged that and trotted out some 
figures.
  I should simply point out for the record that the joint committee has 
given us different figures, and the other gentleman's argument I found 
to be a saturnalia of static analysis. So I think that those who are 
following this debate can listen and make up their own minds. I think 
that clearly the current tax policies are justified on the facts, and 
the other side has not really offered a coherent position for adopting 
a new tax policy.
  My feeling is that workers who have taxable assets, who have seen the 
value of those taxable assets which they are holding toward retirement 
increase because of the growth, increase because the market has gone 
up, may I suggest that they have seen a real benefit from our tax 
policies, one that is not captured in the static analysis used on the 
other side, but one which is important and is a real measure of wealth 
and is a real measure of their satisfaction.
  I was intrigued by some of the rhetoric on the other side in which, 
on one hand, a speaker called for us to use civility and then accused 
us of siding with millionaires. That is an unusual approach to 
civility, but I would suggest to the speaker that by supporting the 
current tax policies and supporting the growth that so clearly is their 
result, we are siding with entrepreneurs. We are siding with workers 
who depend on small businesses and the people who run them to create 
the jobs that they need. We are siding with the capitalist economy that 
has created more wealth and more opportunity in this country than 
anywhere else in the world. We are siding with the dynamic side of our 
economy and that part of our economy that we think offers the promise 
of new opportunities throughout America.
  I believe that we have a great opportunity in this tax conference to 
move forward and to continue this House's policy of supporting pro-
growth tax policies. I certainly hope that the House tonight makes very 
clear that we continue to support those policies; and on the eve of 
this tax conference, I hope that we come together to send a clear 
message by rejecting this instruction.
  I think there is a clear philosophical difference here. We believe in 
growth. We believe in expanding opportunity. We believe that the 
capitalist economy can create those opportunities. We believe that 
American workers and American companies, where given the opportunity 
and where the Tax Code and the taxman does not get in their way, can 
compete anywhere in the world.
  Mr. Speaker, with that I call on my colleagues to reject this 
instruction, perhaps well-meaning, but poorly conceived and clearly a 
tax increase at the wrong time and at the wrong place.
  Mr. Speaker, I yield back the balance of my time.

[[Page 5434]]



                              {time}  1730

  Mr. CARDIN. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, let me make it very clear. I offered this amendment not 
as a Democrat, and I don't ask you to vote for it because you are a 
Democrat or a Republican. I offer it as an American who is concerned 
about the debt of this Nation. I want to see this Nation change 
direction. I don't think we are heading in the right direction on our 
economic policies. I think this debt is very dangerous and I want to 
change direction.
  Let me also just say to my friend from Pennsylvania, words have 
consequences, so please be careful obviously the words we use in this 
body. We have a responsibility. It is wrong to say that this motion 
increases taxes. You are using that because we don't extend in our 
motion a tax provision that will expire in 2008. Well, Mr. English, I 
could say that you are raising taxes by voting against it because you 
are only extending the R&D credit to 2007, where that is even shorter 
than 2008. And I would acknowledge to you that would be a wrong thing 
for me to say. So please be careful with the language you use. You know 
that this motion does not increase taxes whatsoever.
  A question was asked: What is the appropriate level of taxation? 
Well, this motion asks: What is the appropriate level of debt? Is 
anyone going to be concerned about the bottom line debt of our Nation? 
Isn't there a limit? Now it is $8.9 trillion. Whether we lose revenues 
through taxes or spend it through the appropriation process, it costs 
the people of this Nation the same burden to their economy.
  No, I am not happy about the economic progress that we have had over 
the last 5 years. I am not happy about our trade deficit of $720 
billion. I am not happy about how many jobs we have exported to other 
countries. You look at the loss of jobs in America, good jobs, and you 
look at the job creation, and it is not equal. This has been the worst 
performance of any administration in modern times as far as the growth 
of good jobs here in America. So, no, I am not happy about our economic 
performance.
  But what I do ask my colleagues to do is look at this motion that is 
before you. Read it. It says that we don't want to increase the debt. I 
would hope all my colleagues would agree with that. It says we want to 
extend the R&D and the saver's credit to the maximum extent possible. I 
would think, using my friend from Pennsylvania's argument, that voting 
against that you are voting for a tax increase. And I don't believe you 
are, but I just point out the illogic of that argument.
  And then it says, yes, we have to make choices, and the Alternative 
Minimum Tax should be our top priority. Why? Because that expires this 
year. If we don't correct it in 2006, our constituents are going to 
have to be paying the Alternative Minimum Tax. And you can keep on 
saying you will pass legislation to do it, but you know if it is not in 
the budget reconciliation, if it is not protected by a point of order, 
we are not going to get it done. We know that. That is why we are 
saying let's put it in the bill that is going to make it to the 
President's desk that is going to be signed into law. Let's not play 
games with this. Let's do what is right for the people of this Nation.
  So if you read this motion to instruct, you are going to find that if 
you are for reducing the debt, if you are for the saver's credit, if 
you are for the research and development credit, and if you really want 
to provide Alternative Minimum Tax relief, and then lastly, if you want 
to avoid a calamity that may in fact be happening if the reports are 
correct about what is happening in the tax conference, where it is even 
going to be worse than what we thought, that we are going to be using 
gimmicks and accounting procedures in order to say that we fit within 
the budget reconciliation when in fact we don't. I have been told one 
of the provisions is the RSAs, the retirement savings accounts, which 
is going to count money as had, even though we are going to lose 
revenue in the long term.
  That is not what we should be doing here. Let's act responsibly. 
Let's act in the best interest of all the people in our community. 
Let's not just vote one way or the other because you are told that that 
is the partisan thing to do. Let's do what is right for this country. 
Let's speak out about this deficit. Let's speak to the priorities that 
should be in our Tax Code.
  This is our opportunity to do it, and I urge my colleagues to support 
the motion.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Conaway). Without objection, the 
previous question is ordered on the motion to instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from Maryland (Mr. Cardin).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CARDIN. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

                          ____________________