[Congressional Record (Bound Edition), Volume 153 (2007), Part 3]
[Extensions of Remarks]
[Pages 3437-3438]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INTRODUCTION OF BILL FOR COMMISSION ON UNFAIR TAX BREAKS AND SUBSIDIES

                                 ______
                                 

                            HON. MARK UDALL

                              of colorado

                    in the house of representatives

                      Wednesday, February 7, 2007

  Mr. UDALL of Colorado. Madam Speaker. I am today introducing another 
bill intended to help reduced waste and inequity in the Federal budget.
  There has been much discussion of individual spending items--
``earmarks''--requested by individual members. They are not all bad, 
but I agree that some need closer scrutiny. That's why I have 
introduced a bill, H.R. 595, the Stimulating Leadership in Cutting 
Expenditures, or ``SLICE'' Act, to give the President a 
constitutionally sound version of a line-item veto that can force 
Congress to reconsider individual spending items.
  But we need to recognize that earmarks are not the whole story. Much 
waste and inequity in the budget results not from 1-year spending 
items, but from ongoing tax breaks and subsidies that are built into 
the budget and will persist unless and until there are changes in 
relevant law.
  Like earmarks, not all tax breaks and subsidies are bad--in fact, I 
think many are good for our country and deserve to continue or even be 
expanded. One example would be the tax breaks and other provisions to 
promote renewable energy and to help Americans become more efficient in 
their use of energy. And there are other examples as well.
  But there is also an array of direct subsidies, tax breaks and 
indirect assistance created for the special benefit of a relatively 
small number of beneficiaries, sometimes at the expense of others.
  Too often, such provisions have persisted because of the phenomenon 
that once made it nearly impossible for Congress to close unneeded 
military bases--the cost of each one is relatively small in overall 
terms, but very important to a few States or Congressional Districts, 
with the result that the potential budgetary benefit of a reform is not 
great enough to overcome the strong opposition from its defenders.
  So, the bill I am introducing today would resolve this dilemma in the 
same way that an earlier Congress resolved the similar problem

[[Page 3438]]

of eliminating unneeded military bases. It would do that by 
establishing an independent, bipartisan, and expert commission to 
review special-interest tax breaks and subsidies to see which should be 
ended or revised.
  But this would not be just another commission to produce another 
report fated only to gather dust on congressional shelves. Instead, 
like the special commissions that have reviewed military bases, it 
would be key to a process that would require Congress not just to read 
the report but to vote on whether to adopt its recommendations.
  Here's how my bill would work:


                       bipartisan cuts commission

  The Commission on Unfair Tax Breaks and Subsidies, or ``CUTS 
Commission'', would consist of five members. Its chair would be a 
person named jointly by the Speaker and the Senate majority leader. The 
Speaker and the majority leader of the Senate would each pick one other 
member, and so would the minority leaders in each Chamber. Members 
would be chosen on the basis of their expertise and to represent a fair 
balance of views.
  The Commission's job would be to identify and evaluate payments, 
benefits, services, or tax breaks to see if they meet the test of a 
reasonable expectation that they will bring a return to the public at 
least equal to the value of the cost to the taxpayers.


                            Scope of Review

  The scope of this review would not include payments made to or tax 
breaks benefiting individuals, to state or local government or Indian 
tribes, or Native corporations organized under the Alaska Native Claims 
Settlement Act, or to nonprofit, tax-exempt organizations.
  It also would not cover support for research and development based on 
peer-reviewed or other open, competitive and merit-based procedures 
where the subject is in the public interest and the work is not likely 
to be done, or done with equal benefit to the public, by the private 
sector.
  Similarly, the review would not include payments or tax breaks 
primarily benefiting public health, safety or protection of the 
environment; the development and use of renewable energy; improved 
energy efficiency; or education.
  Finally, the Commission would not review matters of national 
security, including homeland security, compliance with trade agreements 
or treaties, or procurement contracts--and could not propose new 
programs or taxes or the termination of federal agencies.


                            Recommendations

  The Commission would have a year to complete its work. Within that 
time, it would first prepare a preliminary report for review by the 
Government Accountability Office, GAO, and then a final report to 
Congress.
  The Commission's report would specify which changes in subsidies the 
commission is recommending--and any recommendation supported by at 
least four of the five members of the Commission would be assured of 
prompt consideration by Congress.


                 Legislative Action on Recommendations

  Under the bill, recommendations with that high degree of bipartisan 
support on the commission would have to be introduced as bills, and 
each committee to which they were referred would have a 20-day deadline 
to reporting them.
  A committee could consider only amendments that would terminate or 
reduce an inequitable subsidy, except that the tax-writing committees 
could offset revenue increases with broad-based tax cuts, they could 
not use limited tax breaks of the kind that would have been subject to 
a line-item veto under the Line-Item Veto Act of 1996. If a committee 
failed to meet the deadline for reporting, it would be discharged.
  Bills reported from committees would go to the Rules Committees of 
each Chamber. If more than one bill is reported, Rules would 
consolidate them into one measure which would go to the floor. After 5 
days, excepting weekends and holidays, a motion to proceed to its 
consideration would be privileged and not debatable and, if adopted, 
the bill would be considered under procedures limiting the time for 
debate. Similar procedures would apply to conference reports after each 
Chamber had acted.
  In short, Congress could not ignore consensus recommendations by the 
Commission. It would have to debate them and then vote on whether to 
adopt them.


                         Potential for Savings

  It is not possible to say exactly how much this bill will save the 
taxpayers--that depends on what the Commission might recommend and how 
many of their recommendations Congress would approve. I have seen 
estimates that the kinds of subsidies and tax breaks covered by this 
bill could be costing tens of billions of dollars annually just in 
terms of special-interest spending programs, not to mention special tax 
breaks--such as provisions to suspend the tariffs on certain items--
many of which are of particular benefit to just one or a few companies. 
So, I think the potential is considerable.


                       Equity and Accountability

  And as important as the savings that could come from enactment of my 
bill is the increased budget equity and congressional accountability 
that it would promote. Special-interest subsidies, whether through 
spending or tax breaks, are great for the beneficiaries but they aren't 
always great for the taxpayers and they often are harmful to competing 
companies or other entities that don't get the benefit of the 
subsidies.
  So, trimming or eliminating that kind of subsidies could save money 
and would remove inequities--and requiring those of us in Congress to 
stand up and be counted on whether to trim or eliminate some of them 
would increase our accountability to the taxpayers, to those hurt by 
the subsidies, and to the American people.
  For these reasons, Madam Speaker, I think this bill deserves the 
support of our colleagues. For their benefit, here is an outline of its 
major provisions.

  Outline of Commission on Unfair Tax Breaks and Subsidies (``CUTS'') 
                                  Bill

       Commission--5 members: chair appointed jointly by House 
     Speaker and Senate Majority Leader, plus one each appointed 
     by House Speaker, Senate Majority Leader, and House and 
     Senate Minority Leaders. Members to be chosen on basis of 
     expertise and to reflect diverse views. No Federal employees 
     on the commission, but agencies can detail people to provide 
     technical expertise.
       Duration--Commission would have one year to complete its 
     review and report to Congress.
       Scope of Review--Commission would review payments, 
     benefits, services, and tax breaks provided to companies, 
     joint ventures, associations, etc. but not to individuals, 
     state or local governments, Indian tribes and Alaska Native 
     Corporations, or tax-exempt nonprofits. Review would not 
     cover support for research and development based on open, 
     merit-based competition if it is consistent with public 
     interest and federal agency purposes and private sector 
     cannot reasonably be expected to do it as well. Also outside 
     scope of review: matters involving public health or safety or 
     the environment; development or use of renewable energy; 
     greater energy efficiency; national security (including 
     homeland security); or education. Review also would not 
     involve matters needed to comply with international trade or 
     treaty obligations or federal procurement contracts.
       Report--Commission's preliminary report would be reviewed 
     by GAO; final report would go to Congress with 
     recommendations for changing or eliminating subsidies covered 
     by commission's review. Any recommendation backed by at least 
     4 commission members would have to be introduced as 
     legislation.
       Action by Congress--Committees would be limited in amending 
     bills to adopt recommendations by at least 4 of the 5 
     commission members and would have to report them for floor 
     action with time limits on debate. So, Congress would have to 
     act on those recommendations.

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