[Congressional Record (Bound Edition), Volume 153 (2007), Part 2]
[House]
[Pages 1754-1755]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              NO NEW TAXES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Indiana (Mr. Pence) is recognized for 5 minutes.
  Mr. PENCE. Mr. Speaker, I rise today to speak about an issue that is 
not so much on our agenda in these first 100 hours, but I believe it 
will encompass much of our focus during the course of the 110th 
Congress. It has to do with the how and why that we will achieve 
fundamental entitlement reform.
  President Bush and many leaders in the new majority in the House and 
Senate have spoken of the priority of reforming Social Security and 
dealing with the extraordinary unfunded obligations of our mandates in 
future years. The President, to his credit, 2 years ago raised the 
prospect of fundamental Social Security reform. But the American people 
rejected the President's call.
  And I rise today to speak about what I believe the parameters of that 
debate should be from the perspective of a conservative in the minority 
who believes in the principles of limited government.
  Mr. Speaker, I believe that the American people did not reject the 
Social Security reform or the personal retirement accounts that the 
President advanced. I think they rejected the entire

[[Page 1755]]

debate and how it unfolded. I think they rejected the notion that the 
predominant goal of Social Security reform was to make the numbers add 
up or, in the language of the wonks, to achieve solvency in Social 
Security. Such a yardstick expresses no opinion on how to fix an 
increasingly bankrupt system, and I believe that as a result it 
invariably blesses benefit cuts or tax increases as a result.
  And while President Bush has spoken to his opposition to tax 
increases, Treasury Secretary Hank Paulson has repeatedly said, in 
conversations with Members of the House and Senate, that ``everything 
is on the table,'' raising the specter of the possibility of raising 
taxes to achieve Social Security reform. And even the President's own 
Press Secretary, when asked directly whether the White House was ruling 
out a tax increase to achieve Social Security reform with this newly 
minted Democrat majority in Congress, the Press Secretary said, ``No, 
I'm not.''
  I believe, Mr. Speaker, this is all code for a willingness within the 
Bush administration to consider raising taxes in exchange for achieving 
Social Security reform. Such a tax increase would likely come from 
lifting or eliminating the cap on the amount of salary and wages 
subject to the payroll tax. The current income that is subject to the 
payroll tax is $94,200.
  But raising payroll taxes, I would offer, would prove devastating to 
working Americans, small businesses and the economy as a whole and, 
worse, if we eliminated the cap on income subject to payroll taxes for 
Social Security, would only add a brief 7 years to Social Security's 
financial solvency.
  According to the Heritage Foundation, eliminating the cap will 
increase taxes by $484 billion over the first 5 years. This 12.4 
percentage point marginal tax rate increase would hit middle income 
families struggling to make ends meet, pay for college and save for 
retirement, and much of the increase would be borne by the 3 million 
small business owners who pay both the employer and employee portion of 
the tax hike. These entrepreneurs are the driving force of our economy, 
Mr. Speaker. And as a result, a tax increase of this nature would 
result in a 2 to 3 percent reduction in economic growth, causing 
massive layoffs across the country. And, again, eliminating the cap on 
income subjected to Social Security payroll tax would only extend the 
life of Social Security for 7 years.
  Now, there are many, even on my side of the aisle, that are flirting 
with the notion of raising taxes. But, Mr. Speaker, we have been down 
this road before. It was 1990, when I was a candidate for Congress, 
when another President Bush teamed up with a Democrat majority in 
Congress and headed to Andrews Air Force Base all in the name of 
entitlement reform and deficit reduction, brought the American people 
the promise of reform in the future, and the largest tax increase in 
American history.
  We must not go down the road of compromise again. I think the 
administration needs to be clear that any Social Security compromise 
must reject tax increases of any kind. That means no increase in the 
payroll tax rate and no change in the cap apart from the current 
indexing that happens under the law.
  I would say, respectfully, to my colleagues and to the President of 
the United States, we should say to our good friends in the new 
majority, ``Read our lips. No new taxes.''
  It is imperative that we bring reforms like personal savings accounts 
to this new deal program. I think it is imperative that we make the new 
deal a better deal for younger Americans, but raising taxes on small 
business owners and family farmers in the manner of lifting the cap or 
raising the rate is an idea whose time should never come.

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