[House Report 107-43]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-43
======================================================================
PROPOSING A TAX LIMITATION AMENDMENT TO THE CONSTITUTION OF THE UNITED
STATES
_______
April 20, 2001.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.J. Res. 41]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
joint resolution (H.J. Res. 41) proposing a tax limitation
amendment to the Constitution of the United States, having
considered the same, reports favorably thereon with an
amendment and recommends that the joint resolution do pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
I. Application of the Amendment.....................................3
II. The ``de minimis'' Exception and Implementing Legislation........3
III. Prior Legislative Action.........................................4
IV. State Tax Limitation Laws........................................5
V. Supermajority Requirements and Taxation..........................5
VI. Standing to Sue Under the Tax Limitation Amendment...............7
VII. Differences Between the Tax Limitation Amendment and the House
Rule.............................................................8
Hearings......................................................... 8
Committee Consideration.......................................... 8
Vote of the Committee............................................ 8
Committee Oversight Findings..................................... 11
Performance Goals and Objectives................................. 11
New Budget Authority and Tax Expenditures........................ 11
Congressional Budget Office Cost Estimate........................ 11
Constitutional Authority Statement............................... 13
Section-by-Section Analysis...................................... 13
Markup Transcript................................................ 13
Dissenting Views................................................. 49
The amendment is as follows:
Amend the title so as to read:
Joint resolution proposing a tax limitation amendment to
the Constitution of the United States.
Purpose and Summary
H.J. Res. 41, introduced by Congressman Pete Sessions of
Texas, would require any legislative measure changing the
internal revenue laws that increases revenue by more than a de
minimis amount to receive the concurrence of two-thirds of the
Members of each House voting and present.\1\ Excluded from this
requirement would be any increase resulting from the lowering
of an effective rate of any tax. This supermajority requirement
could be waived when a declaration of war is in effect or when
the United States is engaged in a military conflict which
causes an imminent and serious threat to national security and
is so declared by a joint resolution, adopted by a majority of
the whole number of each House, which becomes law. Pursuant to
the Necessary and Proper Clause of article I, section 8 of the
Constitution, the Congress would have authority to enact
implementing legislation.
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\1\ The United States Constitution provides the Congress the power
to levy taxes. See U.S. Const., Art. I, Sec. 8, cl. 1 (``The Congress
shall have Power To lay and collect Taxes, Duties, Imposts and Excises.
. . .''); U.S. Const., Amend. XVI (``The Congress shall have power to
lay and collect taxes on incomes, from whatever source derived, without
apportionment among the several States, and without regard to any
census or enumeration.'').
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The Tax Limitation Amendment is intended to force Congress
to seriously consider alternatives to raising taxes when
attempting to manage the budget. The amendment does not
foreclose the possibility of raising taxes, closing loopholes,
or improving enforcement of existing internal revenue laws. It
simply requires a broad consensus before increasing taxes to
raise additional revenue by more than a de minimis amount.
Background and Need for the Legislation
According to the Congressional Budget Office, individual
income tax revenues increased last year by 14.2 percent--125
billion dollars, and overall revenues increased by 10.8
percent--197.7 billion dollars.\2\ With the exception of 1942,
the overall amount of these revenues is a higher percentage of
our Gross Domestic Product than at any other time in our
history. While this proposal would not provide immediate relief
for taxpayers, it will help direct the Federal Government to
reduce wasteful spending, to ferret out fraud, and to eliminate
ineffective programs before raising taxes. A supermajority vote
is already required for several important governmental
decisions.\3\
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\2\ Congressional Budget Office, The Budget and Economic Outlook:
Fiscal Years 2002-2011, pp. 144-45, January, 2001.
\3\ See U.S. Const., Art. I, Sec. 3, cl. 6 (Senate conviction
following impeachment trial); U.S. Const., Art. I, Sec. 5, cl. 2
(Expelling a Member of Congress); U.S. Const., Art. I, Sec. 7, cl. 2
(Overriding a Presidential veto); U.S. Const., Art. II, Sec. 1, cl. 3
(Required quorum for House to choose President); U.S. Const., Art. II,
Sec. 2, cl. 2 (Senate concurrence to treaties); U.S. Const., Art. V
(Proposing Constitutional Amendments); U.S. Const., Art. VII (State
ratification of Constitution); U.S. Const., Amend. XII (Required quorum
to choose President and Vice President); U.S. Const., Amend. XIV,
Sec. 3 (Removing disability for holding office); U.S. Const., Amend.
XXV, Sec. 4 (Determining Presidential disability).
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I. Application of the amendment
The supermajority requirement of H.J. Res. 41 would only
apply to changes to the internal revenue laws. Any bill,
resolution, or other legislative measure changing the internal
revenue laws would require a two-thirds vote, unless it was
determined that the bill's provisions, taken together, either
raised revenue by less than a de minimis amount, decreased
revenue by any amount, or were revenue neutral. In determining
whether a bill increased the internal revenue, any increase
resulting from the lowering of an effective rate of any tax
would be excluded.
Generally, the phrase ``internal revenue laws'' covers
taxes found in the Internal Revenue Code, such as income taxes
(personal and corporate), estate and gift taxes, employment
taxes, and excise taxes. The amendment would also cover future
revenue laws even if they were not placed into the Code.\4\ It
would not cover tariffs, user fees, voluntary payments, or
bills that do not change internal revenue laws, even if such
measures increase the internal revenue by more than a de
minimis amount.
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\4\ The Internal Revenue Code, title 26 of the United States Code,
is not explicitly referenced because Congress could avoid the
application of the amendment by passing tax legislation and putting it
elsewhere in the code or characterizing it in a different fashion.
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II. The ``de minimis'' exception and implementing legislation
The term de minimis is not new to Federal law. It appears
in approximately 80 statutes in the United States Code. An
April 7, 1997 letter to then-Judiciary Committee Chairman Henry
Hyde, from then-Ways and Means Committee Chairman Bill Archer
discussed the meaning of the de minimis standard and the
enactment of implementing legislation in connection with a bill
similar to H.J. Res. 41 introduced during the 105th Congress:
[T]he Constitutional amendment excepts from the \2/3\
requirement tax legislation that raises no more than a
de minimis amount of revenue. The amendment states that
Congress may ``reasonably provide'' how this exception
is applied. Details may be very important, but they do
not belong in the Constitution. Instead, Congress would
adopt legislation that implements the Constitutional
amendment by defining terms and fleshing out
procedures.
It is up to this or a future Congress to design this
``implementing legislation.'' However, it is my
understanding and intent that such legislation will
have the following characteristics:
Revenue would be measured over a period consistent
with current budget windows. For example, measuring the
net change in revenue over a 5 year period would be
appropriate.
Estimation would be made employing the usual revenue
estimating rules. As under the Budget Act, a committee
of jurisdiction or conference committee would, in
consultation with the Congressional Budget Office or
the Joint Committee on Taxation, determine the revenue
effect of a bill.
A bill would be considered to raise a de minimis
amount of revenue if it increased Federal tax revenues
by no more than 0.1 percent over 5 years.
For purposes of determining whether a bill raises
more than a de minimis amount of revenue, only tax
provisions (i.e., provisions modifying the internal
revenue laws) in the bill would be considered. Other
provisions that increase Federal revenues or receipts
(such as asset sales, tariffs, user fees, etc.) would
not be taken into account in determining the revenue
raised by the bill.\5\
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\5\ H.R. Rep. No. 105-50, 105th Cong., 1st Sess., at 4 (1997).
Although opponents of H.J. Res. 41 have argued that a
supermajority requirement would unduly burden Congress in
closing so-called tax loopholes, the de minimis standard would
actually permit a simple majority vote on certain measures that
seek to close tax loopholes. Should Congress adopt the
definition proposed by Chairman Archer, a simple majority vote
would suffice for passage where the tax provisions in the
measure, taken together, would not increase Federal tax
revenues by more than one-tenth of 1 percent of Federal
revenues over a 5-year period. Thus, so long as the revenue
effect of provisions that close tax loopholes is offset by
other provisions in the measure, such that the increase, if
any, in revenue is ``de minimis,'' a two-thirds vote will not
be required.
III. Prior legislative action
During the 104th Congress, on April 15, 1996, H.J. Res. 159
failed to receive the required two-thirds vote for
constitutional amendments by a vote of 241-157. That resolution
would have required any bill that levied a new tax or increased
the rate or base of any tax to receive a two-thirds majority of
the whole number of each House of Congress.
During the 105th Congress, the Committee on the Judiciary
conducted a markup of H.J. Res. 62 following a hearing
conducted by the Subcommittee on the Constitution. Eight
witnesses, including two Members of Congress, testified at the
March 18, 1997 Subcommittee hearing. On April 8, 1997, the
Committee ordered H.J. Res. 62 to be reported, as amended, by a
vote of 18-10. See H. Rept. 105-50, 105th Cong., 1st sess.
(1997). H.J. Res. 62, as amended, would have required, inter
alia, any legislative measure changing the internal revenue
laws to receive the concurrence of two-thirds of the Members of
each House voting and present, unless the measure did not
increase the internal revenue by more than a de minimis amount.
But on April 15, 1997, the bill failed by a vote of 233-190.
In 1998, H.J. Res. 111 was introduced and was subsequently
modified and deliberated pursuant to H. Res. 407, a rule for
its consideration. Pursuant to H. AMDT. 553, section 1 of H.J.
Res. 111 was amended to additionally state that ``[f]or the
purposes of determining any increase in the internal revenue
under this section, there shall be excluded any increase
resulting from the lowering of an effective rate of any tax.''
On April 22, 1998, H.J. Res. 111, as amended, failed by a vote
of 238-186.
During the 106th Congress, H.J. Res. 37 failed on April 15,
1999 by a vote of 229-199, and H.J. Res. 94 failed on April 12,
2000 by a vote of 234-192. The bills were identical to each
other and identical to H.J. Res. 111, 105th Congress, as
amended, except that the bills introduced during the 106th
Congress did not contain a section providing that Congress can
enact enabling legislation. However, pursuant to the Necessary
and Proper Clause of article I, section 8 of the Constitution,
Congress still has authority to enact enabling legislation.
H.J. Res. 41, introduced during the 107th Congress on March
22, 2001, is identical to the bills introduced during the 106th
Congress.
IV. State tax limitation laws
Currently, fourteen states have tax limitation provisions
for all, most, or some tax increases. Out of the fourteen
states with tax limitation provisions, eleven states require a
supermajority for any tax increase (supermajority required in
parentheses): Arizona (\2/3\); Arkansas (\3/4\); California
(\2/3\); Colorado (\2/3\); Delaware (\3/5\); Louisiana (\2/3\);
Mississippi (\3/5\); Nevada (\2/3\); Oklahoma (\3/4\); Oregon
(\3/5\); and South Dakota (\2/3\). Missouri requires a \2/3\
supermajority for most tax increases, Florida requires a \3/5\
supermajority for corporate income tax increases only, and
Michigan requires a \3/4\ supermajority for a certain type of
property tax increase.
Barry W. Poulson, Professor of Economics at the University
of Colorado, testified before the Constitution Subcommittee
during the 105th Congress that when tax limitation provisions
are incorporated into state constitutions, ``they are more
likely to constrain the growth of government'' than statutory
provisions.\6\ Daniel Mitchell, McKenna Senior Fellow in
Political Economy at the Heritage Foundation, who also
testified before the Subcommittee on the Constitution during
the 105th Congress, stated that empirical data from states
suggests that supermajority requirements are successful in
limiting the growth of government and in enabling a more rapid
pace of economic growth and job creation. States with
supermajority requirements have lower spending increases,
faster economic growth, more jobs, and a more tightly-
controlled tax burden than states without such requirements.\7\
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\6\ ``Proposing an Amendment to the Constitution with Respect to
Tax Limitations, 1997: Hearings on H.J. Res. 62 Before the Subcomm. On
the Constitution of the House Judiciary Committee,'' 105th Cong., 1st
sess. (written statement of Dr. Barry Poulson).
\7\ ``Proposing an Amendment to the Constitution with Respect to
Tax Limitations, 1997: Hearings on H.J. Res. 62 Before the Subcomm. On
the Constitution of the House Judiciary Committee,'' 105th Cong., 1st
sess. (written statement of Daniel Mitchell).
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V. Supermajority requirements and taxation
There is nothing undemocratic or unusual about
supermajority requirements in our system of representative
democracy. Supermajority voting requirements are routinely used
for legislative business in both the House and the Senate.
Since 1828, the House has allowed a two-thirds vote to suspend
rules and to pass legislation. Senate rules require a two-
thirds vote for suspension of the rules and for the fixing of
time for considering a subject. The Senate requires a three-
fifths vote of all Senators to end debate or to increase the
time available under cloture. Senate Budget procedures require
that three-fifths of the full Senate must agree to waive
balanced budget provisions or points of order to consider
amendments that would violate the budget approved by Congress.
Moreover, there are ten instances in which the Constitution
requires a supermajority vote. Seven of these were part of the
original Constitution and three were added through the
amendment process.\8\
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\8\ See supra note 3.
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Opponents of H.J. Res. 41 point to the fact that one of the
weaknesses that led to the demise of the Articles of
Confederation was that the Articles required a supermajority
vote to raise Federal revenue. It is true that the Framers of
the Constitution did not impose a supermajority voting
requirement to raise revenue. Their solution was far more
severe--an explicit constitutional restriction on direct
taxes.\9\
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\9\ See U.S. Const., Art. I, Sec. 9, cl. 4 (``No Capitation, or
other direct, tax shall be laid, unless in Proportion to the Census or
Enumeration herein before directed to be taken.'').
---------------------------------------------------------------------------
As explained by Alexander Hamilton in Federalist No. 21,
the taxing ability of the Federal Government was intentionally
limited:
It is a signal advantage of taxes on articles of
consumption [today called tariffs, sales and excise
taxes] that they contain in their own nature a security
against excess. They prescribe their own limit, which
cannot be exceeded without defeating the end proposed--
that is, an extension of the revenue. When applied to
this object, the saying is as just as it is witty that,
``in political arithmetic, two and two do not always
make four.'' If duties are too high, they lessen the
consumption, the collection is eluded; and the product
to the treasury is not so great as when they are
confined within proper and moderate bounds. This forms
a complete barrier against any material oppression of
the citizens by taxes of this class, and is itself a
natural limitation of the power of imposing them.\10\
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\10\ The Federalist No. 21 (Alexander Hamilton).
Lawrence Hunter, President of the Business Leadership
Council, testified before the Subcommittee on the Constitution
during the 104th Congress that the original design of the
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Constitution carefully balanced the powers to tax and spend:
In Madison's and Hamilton's original design, the
taxing and spending authority of the Federal Government
was hemmed in by the dual constraints of exclusive
reliance on indirect taxes (which ``prescribe their own
limit'') working side-by-side with the powerful
constraint on spending resulting from the limited
delegation of powers to the Federal Government. This
limited delegation of powers severely restricted the
objects and activities on which the Federal could spend
money. In other words, the original constitutional
design constrained both the means by which Congress
spent (taxation) and the ends on which Congress spent
(defined by a limited delegation of powers).\11\
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\11\ ``Amendment to the Constitution Requiring Two-thirds
Majorities for Bills Increasing Taxes, 1996: Hearings on H.J. Res. 159
Before the Subcomm. On the Constitution of the House Judiciary
Committee,'' 104th Cong., 2nd Sess. 75.
As ratified, the Constitution allowed no direct taxation of
the income of citizens. For three-quarters of our history, the
power of the Federal Government to tax was carefully
constrained by explicit constitutional restraints. It was not
until the early 1900's that the 16th amendment swept away the
Constitution's careful balance with respect to taxes. While in
the 1780's, the Federal Government may have had a problem
raising revenue, this is certainly no longer a problem today.
As recently as 1940, Federal taxes were only 6.7% of the Gross
Domestic Product. But according to the Congressional Budget
Office, by the year 2000, Federal taxes had exceeded 20% of the
GDP. Moreover, total Federal revenues exceeded $2 trillion as
of 2000 with over $1 trillion of the revenues derived from
individual income taxes.\12\
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\12\ Congressional Budget Office, The Budget and Economic Outlook:
Fiscal Years 2002-2011, pp. 144-45, January, 2001.
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Under our current system it is too easy to add to the
already onerous tax burden Congress has placed upon the
American people. The adoption of a supermajority provision will
force Congress to give careful consideration to proposals to
raise taxes and will require a broad consensus in order to do
so.
VI. Standing to sue under the tax limitation amendment
As a general matter, in order to file civil actions in
Federal court, plaintiffs must have standing. Plaintiffs must
demonstrate that they: (1) suffered an actual injury of the
type for which a court may grant relief; (2) by some action of
the defendant, and that; (3) the court will be able to redress
the injury.
Prudential considerations, not rooted in the Constitution,
also come into play. These rules require that (1) the defendant
violated the plaintiff's legal right, not someone else's; (2)
the plaintiff's injury is somehow differentiated from those of
all other people in the country; and (3) the injury is of the
type that the law or constitutional provision in question was
designed to protect. Ordinarily, a taxpayer has no standing to
sue the Federal Government for carrying out an arguably
unconstitutional program that allegedly wastes the public's
money. Most direct constitutional challenges to the exercise of
the government's spending power are beyond judicial reach. The
mere fact that the Federal Government did not act
constitutionally in exerting its spending power does not
provide a plaintiff with standing.
Under H.J. Res. 41, an increase in taxes does not
automatically trigger a two-thirds vote. The proposed
constitutional amendment does not create a legal right to have
taxes raised only where there is a two-thirds vote. Therefore,
a taxpayer would not have standing to sue merely because his
tax burden was increased. The amendment requires Congress to
determine ``at the time of adoption, in a reasonable manner
prescribed by law'' whether the tax provisions in the
legislation, taken as a whole, increase the internal revenue by
more than a de minimis amount. Thus, a bill raising some taxes
and lowering others, would not necessarily trigger a two-thirds
vote. A court would be extremely reluctant to substitute its
own judgment on the revenue effects of a particular piece of
legislation for that of the Congress. Under current
interpretations of ``standing'' rules, it is highly unlikely
that a court would allow a taxpayer to challenge Congress'
determination that a bill raised revenue by less than a de
minimis amount.\13\
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\13\ The strongest case for standing would be made where Congress
failed to determine whether a bill changing the internal revenue laws
increased the internal revenue by more than a de minimis amount. Even
here, however, it is not entirely clear under the ``standing'' doctrine
that a plaintiff whose taxes had been raised under such a scenario
would have standing to sue.
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VII. Differences between the tax limitation amendment and the House
rule
The House rule for the 104th Congress required a three-
fifths vote for any bill ``carrying a Federal income tax rate
increase.'' The rule was waived several times during the 104th
Congress. At the beginning of the 105th Congress, the House
rule was changed. Now, rule XXI, cl. 5(c) requires a three-
fifths vote for any bill that ``amends subsection (a), (b),
(c), (d), or (e) of section 1, or to section 11(b) or 55(b), of
the Internal Revenue Code of 1986, that imposes a new
percentage as a rate of tax and thereby increases the amount of
tax imposed by any such section.'' (Emphasis added).\14\ The
House rule, then, applies to amendments to certain sections of
the Internal Revenue Code that increase tax rates even if the
bill, taken as a whole, would reduce revenues.
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\14\ Section (1)(a) covers the tax rate for married individuals
filing joint returns and surviving spouses. Section (1)(b) covers heads
of household. Section (1)(c) covers unmarried individuals. Section
(1)(d) covers married individuals filing separate returns. Section (e)
covers estates and trusts. Section 11(b) covers the amount of tax on
corporations. Section 55(b) covers the tentative minimum tax.
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In contrast, H.J. Res. 41 would not require a two-thirds
vote for a bill that changed the tax rates if the tax
provisions of the bill, taken together, either raised revenue
by less than a de minimis amount, decreased revenue by any
amount, or were revenue neutral. H.J. Res. 41 would undoubtedly
make it more difficult for Congress to raise taxes, but it
would still provide Congress with the flexibility to cut taxes,
to close so-called tax loopholes, and to make revenue neutral
changes to the tax laws.
Hearings
Because similar tax limitation amendments to the United
States Constitution have been considered by the Congress, the
Committee on the Judiciary did not hold hearings on H.J. Res.
41. H.J. Res. 41 is identical to tax limitation amendments that
were considered in the 106th Congress, and the Subcommittee on
the Constitution conducted a full day of hearings on a similar
tax limitation amendment in the 105th Congress.
Committee Consideration
On April 4, 2001, the full Committee met in open session
and ordered favorably reported the joint resolution H.J. Res.
41, by a vote of 17 ayes to 9 nays, a quorum being present.
Vote of the Committee
1. Two amendments offered en bloc by Ms. Jackson Lee would
have: (1) excluded any bill, resolution or other legislative
measure that imposes an environmental tax, fee, charge or
assessment from requiring a two-thirds majority vote; and (2)
excluded any bill, resolution, or other legislative measure
necessary to preserve the solvency of the Federal Old Age and
Survivors Insurance Trust Fund or the Federal Disability Trust
Fund, or any successor funds from requiring a two-thirds
majority vote. The amendments were defeated by voice vote.
2. Amendment offered by Mr. Watt, which would have required
a two-thirds majority vote for any bill, resolution, or other
legislative measure determined to decrease the internal revenue
by more than a de minimis amount, was defeated by voice vote.
3. Amendment offered by Mr. Nadler, which would have
excluded any bill, resolution, or other legislative measure
designed to improve enforcement of the internal revenue laws
from requiring a two-thirds majority vote, was defeated by
voice vote.
4. Amendment offered by Mr. Frank, which would have
excluded any bill, resolution, or other legislative measure
necessary to preserve the solvency of the Federal Old Age and
Survivors Insurance Trust Fund from requiring a two-thirds
majority vote, was defeated 8 ayes to 16 nays.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................ .............. .............. ..............
Mr. Gekas....................................................... .............. X ..............
Mr. Coble....................................................... .............. X ..............
Mr. Smith (Texas)............................................... .............. X ..............
Mr. Gallegly.................................................... .............. X ..............
Mr. Goodlatte................................................... .............. .............. ..............
Mr. Chabot...................................................... .............. X ..............
Mr. Barr........................................................ .............. .............. ..............
Mr. Jenkins..................................................... .............. X ..............
Mr. Hutchinson.................................................. .............. X ..............
Mr. Cannon...................................................... .............. X ..............
Mr. Graham...................................................... .............. X ..............
Mr. Bachus...................................................... .............. .............. ..............
Mr. Scarborough................................................. .............. X ..............
Mr. Hostettler.................................................. .............. X ..............
Mr. Green....................................................... .............. X ..............
Mr. Keller...................................................... .............. .............. ..............
Mr. Issa........................................................ .............. X ..............
Ms. Hart........................................................ .............. X ..............
Mr. Flake....................................................... .............. X ..............
Mr. Conyers..................................................... X .............. ..............
Mr. Frank....................................................... X .............. ..............
Mr. Berman...................................................... .............. .............. ..............
Mr. Boucher..................................................... .............. .............. ..............
Mr. Nadler...................................................... X .............. ..............
Mr. Scott....................................................... X .............. ..............
Mr. Watt........................................................ X .............. ..............
Ms. Lofgren..................................................... .............. .............. ..............
Ms. Jackson Lee................................................. .............. .............. ..............
Ms. Waters...................................................... .............. .............. ..............
Mr. Meehan...................................................... X .............. ..............
Mr. Delahunt.................................................... .............. .............. ..............
Mr. Wexler...................................................... .............. .............. ..............
Ms. Baldwin..................................................... X .............. ..............
Mr. Weiner...................................................... X .............. ..............
Mr. Schiff...................................................... .............. .............. ..............
Mr. Sensenbrenner, Chairman..................................... .............. X ..............
-----------------------------------------------
Total....................................................... 8 16 ..............
----------------------------------------------------------------------------------------------------------------
5. Amendment offered by Mr. Watt, which would have limited
judicial review to legislative compliance, was defeated 9 ayes
to 16 nays.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................ .............. .............. ..............
Mr. Gekas....................................................... .............. X ..............
Mr. Coble....................................................... .............. X ..............
Mr. Smith (Texas)............................................... .............. X ..............
Mr. Gallegly.................................................... .............. X ..............
Mr. Goodlatte................................................... .............. .............. ..............
Mr. Chabot...................................................... .............. X ..............
Mr. Barr........................................................ .............. .............. ..............
Mr. Jenkins..................................................... .............. X ..............
Mr. Hutchinson.................................................. .............. X ..............
Mr. Cannon...................................................... .............. X ..............
Mr. Graham...................................................... .............. X ..............
Mr. Bachus...................................................... .............. .............. ..............
Mr. Scarborough................................................. .............. X ..............
Mr. Hostettler.................................................. .............. .............. ..............
Mr. Green....................................................... .............. X ..............
Mr. Keller...................................................... .............. X ..............
Mr. Issa........................................................ .............. X ..............
Ms. Hart........................................................ .............. X ..............
Mr. Flake....................................................... .............. X ..............
Mr. Conyers..................................................... X .............. ..............
Mr. Frank....................................................... X .............. ..............
Mr. Berman...................................................... .............. .............. ..............
Mr. Boucher..................................................... .............. .............. ..............
Mr. Nadler...................................................... X .............. ..............
Mr. Scott....................................................... X .............. ..............
Mr. Watt........................................................ X .............. ..............
Ms. Lofgren..................................................... .............. .............. ..............
Ms. Jackson Lee................................................. .............. .............. ..............
Ms. Waters...................................................... X .............. ..............
Mr. Meehan...................................................... X .............. ..............
Mr. Delahunt.................................................... .............. .............. ..............
Mr. Wexler...................................................... .............. .............. ..............
Ms. Baldwin..................................................... X .............. ..............
Mr. Weiner...................................................... X .............. ..............
Mr. Schiff...................................................... .............. .............. ..............
Mr. Sensenbrenner, Chairman..................................... .............. X ..............
-----------------------------------------------
Total....................................................... 9 16 ..............
----------------------------------------------------------------------------------------------------------------
6. Amendment offered by Mr. Nadler, which would have
excluded any bill, resolution, or other legislative measure
repealing any industry-specific exemptions, deductions, or
credits, was defeated by voice vote.
7. Motion by Mr. Sensenbrenner to favorably report the
joint resolution H.J. Res 41 was agreed to, 17 ayes and 9 nays.
ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................ .............. .............. ..............
Mr. Gekas....................................................... X .............. ..............
Mr. Coble....................................................... X .............. ..............
Mr. Smith (Texas)............................................... X .............. ..............
Mr. Gallegly.................................................... X .............. ..............
Mr. Goodlatte................................................... .............. .............. ..............
Mr. Chabot...................................................... X .............. ..............
Mr. Barr........................................................ X .............. ..............
Mr. Jenkins..................................................... X .............. ..............
Mr. Hutchinson.................................................. X .............. ..............
Mr. Cannon...................................................... X .............. ..............
Mr. Graham...................................................... X .............. ..............
Mr. Bachus...................................................... .............. .............. ..............
Mr. Scarborough................................................. X .............. ..............
Mr. Hostettler.................................................. .............. .............. ..............
Mr. Green....................................................... X .............. ..............
Mr. Keller...................................................... X .............. ..............
Mr. Issa........................................................ X .............. ..............
Ms. Hart........................................................ X .............. ..............
Mr. Flake....................................................... X .............. ..............
Mr. Conyers..................................................... .............. X ..............
Mr. Frank....................................................... .............. X ..............
Mr. Berman...................................................... .............. .............. ..............
Mr. Boucher..................................................... .............. .............. ..............
Mr. Nadler...................................................... .............. X ..............
Mr. Scott....................................................... .............. X ..............
Mr. Watt........................................................ .............. X ..............
Ms. Lofgren..................................................... .............. .............. ..............
Ms. Jackson Lee................................................. .............. .............. ..............
Ms. Waters...................................................... .............. .............. ..............
Mr. Meehan...................................................... .............. X ..............
Mr. Delahunt.................................................... .............. .............. ..............
Mr. Wexler...................................................... .............. .............. ..............
Ms. Baldwin..................................................... .............. X ..............
Mr. Weiner...................................................... .............. X ..............
Mr. Schiff...................................................... .............. X ..............
Mr. Sensenbrenner, Chairman..................................... X .............. ..............
-----------------------------------------------
Total....................................................... 17 9 ..............
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Performance Goals and Objectives
H.J. Res. 41 does not authorize funding. Therefore, clause
3(c) of House Rule XIII is inapplicable.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of House Rule XIII is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the joint resolution, H.J.Res.41, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 13, 2001.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.J. Res. 41, a joint
resolution proposing an amendment to the Constitution of the
United States with respect to tax limitations.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are John R.
Righter (for Federal costs), who can be reached at 226-2860,
and Shelley Finlayson (for the state and local impact), who can
be reached at 225-3220.
Sincerely,
Dan L. Crippen, Director.
Enclosure
cc:
Honorable John Conyers Jr.
Ranking Member
H.J. Res. 41--A joint resolution proposing an amendment to the
Constitution of the United States with respect to tax
limitations.
H.J. Res. 41 would propose amending the Constitution to
require that any change to the nation's internal revenue laws
pass both houses of Congress by a two-thirds vote. Current law
requires that such measures pass by a simple majority. The
amendment would except instances where it is determined the
change in law would increase taxes by not more than a minimal
amount. For the amendment to become effective, the legislatures
of three-fourths of the states would be required to ratify it
within 7 years of enactment.
By itself, this resolution would have no impact on the
Federal budget. If the proposed amendment to the Constitution
is approved by the states, then it would be more difficult for
future Congresses to pass legislation increasing revenues
through changes to the internal revenue code. Because enactment
of H.J. Res. 41 would not affect direct spending or receipts,
pay-as-you-go procedures would not apply.
H.J. Res 41 contains no private-sector or intergovernmental
mandates as defined in the Unfunded Mandates Reform Act, and
would impose no costs on state, local, or tribal governments.
In order to become part of the Constitution, three-fourths of
the state legislatures would have to ratify the resolution
within 7 years of its submission to the states by the Congress.
However, no state is required to take action on the resolution,
either to reject it or to approve it.
The CBO staff contacts for this estimate are John R.
Righter (for Federal costs), who can be reached at 226-2860,
and Shelley Finlayson (for the state and local impact), who can
be reached at 225-3220. This estimate was approved by Peter H.
Fontaine, Deputy Assistant Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article V of the Constitution, which
provides that the Congress has the authority to propose
amendments to the Constitution.
Section-by-Section Analysis and Discussion
Section 1. This section requires any legislative measure
changing the internal revenue laws to receive the concurrence
of two-thirds of the Members of each House voting and present,
unless the legislative measure is determined not to increase
the internal revenue by more than a de minimis amount. The bill
provides that for the purposes of determining any increase in
the internal revenue, there shall be excluded any increase
resulting from the lowering of an effective rate of any tax. In
addition, section 1 provides that on any vote for which the
concurrence of two-thirds is required under the bill, there
shall be a roll-call vote of the Members of each House.
Section 2. This section provides that the Congress may
waive the bill's requirements under two circumstances: (1) when
a declaration of war is in effect; and (2) when the United
States is engaged in military conflict which causes an imminent
and serious threat to national security and is so declared by a
joint resolution, adopted by a majority of the whole number of
each House, which becomes law. But section 2 provides that any
increase in the internal revenue enacted under such a waiver
shall be effective for no more than 2 years.
Markup Transcript
BUSINESS MEETING
WEDNESDAY, APRIL 4, 2001
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The committee met, pursuant to notice, at 10:00 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner [chairman of the committee] presiding.
Next, pursuant to notice, I now call up the bill H.J. Res.
41 proposing an amendment to the Constitution of the United
States with respect to tax limitations for purpose of markup
and move its favorable recommendation to the House.
[H.J. Res. 41 follows:]
Chairman Sensenbrenner. Without objection, the bill will be
considered as read and open for amendment at any point.
The Chair strikes the last word and recognizes himself for
5 minutes.
H.J. Res. 41, introduced by Congressman Pete Sessions, is
known as the Tax Limitation Amendment. This legislation would
establish a constitutional amendment requiring a two-thirds
majority vote by Congress for any bill that increases the
internal revenue by more than a de minimis amount. However,
this amendment would not require a two-thirds vote for every
tax increase. For example, a bill that both lowered and
increased taxes, if it were revenue-neutral, would not be
subject to the two-thirds vote requirement, nor would a bill
intended to raise revenue by reducing taxes.
In addition, the two-thirds majority requirement would be
waived when a declaration of war is in effect or when both
houses pass a resolution which becomes law stating that the
United States is engaged in a military conflict which causes an
imminent and serious threat to national security.
Currently, 14 States have adopted tax limitation
amendments. According to statistics provided by the Bureau of
Economic Analysis, these States have benefitted from greater
rates of increased employment, greater economic growth,
decreased government spending, and decreased rates of tax
growth.
Although similar amendments have been unsuccessfully
considered by the House over the past few years, the need for
tax reform has never been greater. According to the CBO, with
the exception of 1942, the overall amount of individual income
tax revenues is a higher percentage of our gross domestic
product than in any other time in our history, and today, we're
not combatting either fascism or communism.
The bottom line is that taxes today are too high. Federal,
state and local taxes consume about 40 percent of the income of
the average family. That's more than the average family spends
on food, clothing and shelter combined.
As Congress debates meaningful tax relief for the American
people, today is an important time to recognize that Congress'
voracious appetite for spending still endures. That's why I
think it's more important than ever for this committee and this
Congress to reconsider and support the measure that will make
it more difficult for Congress to raise taxes in the future.
Inevitably, there will come a time when Congress wishes to
spend more and will not have budget surpluses to reply upon.
There will be many inside the Washington Beltway who argue that
in order for Congress to spend more, we will need to take more
from the hard-working citizens in places like Madison,
Wisconsin; Detroit, Michigan; Los Angeles, California; Houston,
Texas; Murrysville, Pennsylvania; Egan, South Carolina, and
every other area, large and small, across our great nation.
However, I believe that this is the wrong approach and there is
another way to meet our nation's priority, and that's by
tightening our belt and reducing wasteful spending, ferreting
out fraud, and eliminating ineffective programs. Raising taxes
should be a last-ditch option and should occur only after
careful consideration with broad consensus.
Although a constitutional amendment is a big step, I
believe our history of tax hikes illustrates that this is an
important step that will bring needed discipline to Congress
and relief to the American people.
I urge the passage of this resolution and yield back the
balance of my time.
For what purpose does the gentleman from New York seek
recognition?
Mr. Nadler. For an opening statement.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes to strike the last word.
Mr. Nadler. Thank you, Mr. Chairman.
I regard it as very unfortunate that this committee is
wasting its time with this old chestnut when we're not, for
example, looking into the questions of electoral reform or the
question that the President has put before us of faith-based
initiatives as the minority has requested. These are real
issues that are currently before us. We know that this
amendment is not going to pass, it has gone nowhere in the
last, what, four congresses, but if we're going to waste the
time, we're going to waste the time.
Let me talk to the merits, or rather demerits, of this
bill. The bill is profoundly--or the constitutional amendment
is profoundly anti-democratic. Profoundly anti-democratic. The
Congress represents the American people and ought to be able to
act on any subject by--except amending the Constitution, by
majority vote. If the people want the taxes lowered, Congress
should do that by majority vote. If the people want the taxes
raised, Congress should do that by majority vote. If the
present political consensus today is that taxes should be
lowered, so be it, but by what right do we hamstring our
successors 20 or 30 or 40 or 100 years from now who may face
circumstances where they judge and the American people by 55 or
60 percent judge that taxes should be raised? We don't know
what the circumstances are going to be and it's not for us to
make that determination. Our successors, elected by the
American people in the future, should make these
determinations.
Now, today we may think the political philosophy of the
majority of the country may be that taxes should be lowered.
Fine. But who knows what the story will be 50 years from now or
100 years from now?
What this bill says is that one-third of the Congress
members at any point in the future can--one-third plus one can
thwart the will of almost two-thirds of the American people as
represented in Congress. That's exactly the opposite way of
where our democratic government ought to go.
Secondly, it sets up a one-way ratchet situation. Let's
assume that we decide that taxes ought to be lowered and we
estimate that by lowering it in a certain way, that will cut
$100 billion of revenue. It turns out the estimate was wrong;
it cuts $150 billion of revenue. Most people want to say, no,
no, no, we intended a $100 billion tax cut. Oh, but you can't
correct it because the majority vote can only go down, the
majority vote can't go up, you need a two-thirds vote. It
should be the same, it should be majority to go up or down, it
should be two-thirds to go up or down if we want to be anti-
democratic. We set up a one-way ratchet because we prefer
cutting taxes, and certainly all of us prefer cutting to
increasing taxes, and that's--but that's for the American
people to decide at elections.
Thirdly, the way the bill is written, any revenue measure,
any bill amending the Internal Revenue Code that is
determined--needs a two-thirds vote unless it is determined not
to increase the internal revenue by more than a de minimis
amount. So if we find that people are cheating and we decide to
put in better enforcement mechanisms, that would bring in more
revenue, no, no, you can't do that except by a two-thirds vote
because that would increase the internal revenue, we should let
the cheats get away.
If we find that some huge corporation has found a loophole
that nobody intended and that lets them pay no tax at all? Oh,
you can't correct that loophole without a two-thirds vote
because that's increasing the internal revenue.
And if we decide that we ought to--well, that's sufficient.
You can't change enforcement, you can't close loopholes, and we
thwart the will of the American people.
This is a profoundly anti-democratic amendment, it seeks to
enact into law the political philosophy at a given moment--of
some people at a given moment in history, and that is wrong to
bind our successors.
If the American people by a majority want to raise taxes,
they ought to be able to do it; to lower taxes, they ought to
be able to do it; and we have no business telling our
successors 50 or 100 years from now what they can and cannot do
except in terms of violating the Bill of Rights because of our
political opinions or prejudices.
This is a profoundly unwise amendment and it's a waste of
our time. I hope the committee will get on to dealing with
contemporary issues soon.
Thank you, Mr. Chairman.
The Chair will declare a recess for us to go and vote.
Please come back promptly, because after the rule on the estate
tax repeal is voted on, we're supposed to have three or four
votes in a row on motions held over from yesterday and it would
be nice if we didn't have to come back after lunch.
The committee is in recess.
[Recess.]
[Staff Note: Intervening Business.]
Chairman Sensenbrenner. The committee will be in order.
Let the Chair say that we've got about an hour to be able
to consider this joint resolution. The Chair really would like
to avoid coming back after lunch, but we have to get this out
today because leadership has scheduled it for the first week
after the recess.
For what purpose does the gentleman from Michigan seek
recognition?
Mr. Conyers. I ask unanimous consent to add my statement to
the record, and I would like to point out, after Mr. Nadler has
made his profound analysis about how anti-democratic this is, I
would like to point out that this is very, very much a
Republican amendment, and I ask unanimous consent to add my
statement to the record.
Chairman Sensenbrenner. Without objection, and without
objection, we will change the small ``d'' in Mr. Nadler's
speech to a large ``D.''
[The statement of Mr. Conyers follows:]
Prepared Statement of Hon. John Conyers, Jr., a Representative in
Congress from the State of Michigan
I am opposed to this amendment because it is bad for our democracy
and bad for our tax policy.
By requiring a two-thirds majority to adopt certain legislation,
the amendment undercuts majority rule and diminishes the vote of every
Member of the Congress. The framers wisely rejected requiring a
supermajority for basic government functions, and James Madison argued
that under a supermajority requirement, ``the fundamental principle of
free government would be reversed. It would no longer be the majority
that would rule; the power would be transferred to the minority.''
In addition, the amendment would permanently enshrine some $450
billion of special corporate tax favors into the Constitution, nearly
three times as much as all means tested entitlement programs combined.
It would be next to impossible to change the law to require foreign
corporations to pay their fair share of taxes on income earned in this
country, or to repeal loopholes which encourage United States companies
to relocate overseas. In fact, under this amendment it would take more
votes to close a tax loophole engineered by a powerful interest group
than to cut Social Security, Medicare, and education programs.
The amendment would also make major deficit-reduction measures much
harder to pass when they are needed. Five of the six major deficit-
reduction acts that were enacted since 1982 included a combination of
revenue increases and program cuts. President Reagan signed three of
these measures into law, and Presidents George H.W. Bush and Clinton
signed one each. None of the five measures received a two-thirds
majority in both houses, so had the proposed constitutional amendment
been in effect during this period, substantial budget deficits would
still be with us today.
Finally, I would remind the Members that this amendment is the
height of hypocrisy. Three Congresses ago, the Majority changed the
House Rules so they could not increase tax rates without a three-fifths
vote. But on six separate occasions since then the Majority ignored or
waived their own House Rule. If the supermajority requirement didn't
work as a House rule, why in the world would it work any better as a
constitutional amendment?
It's time the Majority got serious about the business of governing
this country. A super-majority requirement has been rejected each of
the last five years. Voting on this purely symbolic gesture one more
time won't change anything. It's unworkable. We need to consider real
solutions to our problems, not end majority rule as we know it.
Chairman Sensenbrenner. For what purpose does the gentleman
from Ohio seek recognition?
Mr. Chabot. For the purpose of making an opening statement.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Chabot. Thank you, Mr. Chairman.
The overall amount of money taken in taxes in this country
is simply too high, and that adds to the difficulties many
families face in making ends meet.
Congress should reduce the tax burden on all Americans, but
at the very least, we must act to protect hard-working families
from future increased taxation. By making it more difficult to
raise taxes, H.J. Res. 41 will do just that. H.J. Res. 41 would
require Congress to focus on options other than raising taxes
to manage the Federal budget, helping to impose fiscal
discipline and to constrain the growth of government. This
legislation would not foreclose the possibility of raising
taxes under any circumstances; rather, a supermajority is
required to achieve that goal.
This is definitely very useful legislation. Currently 14
States have tax limitation provisions for all, must or some tax
purposes. The Tax Limitation Amendment will cover personal and
corporate income taxes, estate and gift taxes, employment
taxes, and excise taxes. The amendment would not apply to
tariffs or user fees or voluntary payments or bills that do not
change the internal revenue laws even if they have revenue
implications.
For purposes of determining whether a bill raises more than
a de minimis amount of revenue, only tax provisions in the bill
would be considered. Legislation that is roughly revenue
neutral would not be subject to a two-thirds vote. For example,
a bill that closed a tax loophole would not require a two-
thirds vote if it created less than a de minimis increase in
revenue or was accompanied by a tax cut.
The amendment states that a determination must be made at
the time of the adoption of legislation as to whether it raises
the internal revenue by more than a de minimis amount. In order
to implement the amendment, Congress will need to adopt
legislation defining terms and flushing out the necessary
procedures.
Assuming ratification by the requisite number of States
will not occur by the end of this Congress, it will be up to a
future Congress to design this implementing legislation once
the amendment has taken effect.
As I have observed many times before, Mr. Chairman, we need
this amendment to help stem the tax-and-spend policies that too
often rule Washington. Much of what goes on in this town
involves the taking and spending of other people's money.
Average Americans now have to spend most of their time working
just to cover their tax burden and hopefully have enough left
over to maintain a reasonable standard of living for themselves
and their families.
In the 1950's, the Federal Government, for example, took
about 5 percent of the average American family's money, and
that was after fighting World War II and the Korean War; yet,
since then, in peacetime with a generally strong economy, that
figure has increased five-fold. Today, the Federal Government
takes about a quarter of what we earn, and I'm not sure anyone
here would even suggest that the Government has gotten 500
percent better.
Since '92 alone, the Federal Government has raised taxes at
the gas pump, on working seniors receiving Social Security, on
mom-and-pop small businesses, et cetera; yet, the average
family's real after-tax income has not really increased over
the years. At best, working families are just treading water,
and the Government keeps trying to soak them in order to fund
more and more often wasteful Government programs.
The House is now initiating meaningful change by reducing
income tax rates, providing marriage tax penalty relief,
doubling the child tax credit, and today getting rid of the
onerous death tax, but these are precarious victories that can
too easily be reversed by future congresses and future
administrations.
The solution has always been smaller, more efficient
government, and this amendment would force the Congress to make
responsible budget choices first instead of enacting knee-jerk
policies that drain the wallets of average Americans at every
turn; therefore, I encourage my colleagues to support this
important amendment to the Constitution.
I yield back the balance of my time.
Chairman Sensenbrenner. Can we get to amendments? Are there
amendments?
For what purpose does the gentleman from North Carolina
seek recognition?
Mr. Watt. I was trying to strike the last word, Mr.
Chairman, if the Chairman doesn't mind.
Chairman Sensenbrenner. If the gentleman insists on
striking the last word, the gentleman is recognized for 5
minutes.
Mr. Watt. Thank you, Mr. Chairman, and I'm the first to
concede that the members of the committee who have been here
before can just turn off their microphones or close their ears
because they have heard this speech or some variation of it
before, and so I'm going to primarily direct this to the new
members of the committee. The older members can go back and
just replay this speech because I have given it, some variation
of it, several times.
The thing that probably amazes me more than anything else
about my conservative colleagues in this Congress since I have
been here is two things. Number one, they say that they are
conservative, and number two, their egos are big enough to
think that what they can do to the Constitution is more
valuable than 200 or more years of experience, and that George
Washington and the folks who drafted this Constitution must
have been stupid.
I found that out primarily in the 104th Congress when the
Gingrich revolution came in. It was in that Congress that 118
proposed constitutional amendments were introduced, the bulk of
which were by the conservatives who were claiming that they
were conservative yet trying to amend the most conservative
document that we have ever had and trying to change in dramatic
ways the principles that we had founded our government on. In
that Congress, four of those constitutional amendments were
actually voted on on the House floor.
In the 105th Congress, 86 constitutional amendments were
introduced and six of those were actually voted on on the House
floor. This is at a time when the conservatives were telling me
that they were in control of the schedule. These same
conservatives, who I think are really revolutionaries rather
than conservatives--I think you've lost sight of what a
conservative is.
In last Congress, 52 proposed constitutional amendments
were introduced and three were voted on on the House floor.
So I just think you all have some notion that being a
conservative has something to do with amending the
Constitution. I actually was taught just the opposite of that,
and so I really--I really have some serious concerns with your
underlying proposition there that, number one, amending the
Constitution is a conservative step, and number two, that
people like Sessions in Idaho and people in this Congress are a
lot brighter than the people who drafted the Constitution
originally.
Chairman Sensenbrenner. Would the gentleman yield?
Mr. Watt. Beyond that----
Chairman Sensenbrenner. Would the gentleman yield?
Mr. Watt. --let me just--I'm happy to yield to the
gentleman. I just want to make one other point and then I'm
going to quit and I'll yield all the rest of my time to you.
The other practical problem, in addition to the one that
Mr. Nadler alluded to about this being just absolutely
undemocratic and upsetting the whole balance that was
contemplated in a democratic society, is the practical problem
that was illustrated to me yesterday when a constituent called
me and said, well, you can cut these taxes because if the
projections that we have are wrong, then you can just pass
something to reverse it. And I said, well, that I assure you is
a lot more difficult than cutting taxes in the first place. But
now you are trying to make it inordinately more difficult. If
these projections that all of us know have a large margin of
error are, in fact, in error, then at some point, we're going
to have to come back and hopefully do something about that. I'm
sure some of you will say you're conservatives and--and that
that just means tightening the belt and reducing spending, but
I think you are--you are unbalancing the democratic----
Chairman Sensenbrenner. The gentleman's time has expired.
Mr. Watt. --playing field. I ask unanimous consent for 30
seconds, and I'll yield it to--or a minute or whatever the
Chairman needs, and I'll yield----
Chairman Sensenbrenner. I'll hold my fire. The gentleman
has expired.
The gentleman from Massachusetts.
Mr. Frank. Thank you, Mr. Chairman. I don't think----
Chairman Sensenbrenner. Five minutes.
Mr. Frank. I don't think they are going to be dilatory
amendments, but as I've looked at the amendments, they really
go to specifics, and I think it would be wrong for me to try to
make my general comments under that rubric because we are
talking about a very fundamental proposal--a proposal of a very
fundamental shift in American--the government, essentially to
lessen the people's role here.
It's interesting that conservatives apparently believe that
if we go by normal majority procedures, they won't do well, so
they want to change the rules. I found something very
interesting in my political career. Whichever side complains
that the other side is demogaging or politicizing the issue is
the side that recognizes it's in the political minority, I mean
for a while. That is, both sides have tended to complain from
time to time that people are politicizing an issue. Horror is
that 535 politicians would politicize an issue. People who
don't want issues politicized should never entrust them to 535
elected officials.
But what we now have is a permanent effort in this regard
by the conservatives. They clearly are disappointed by the
American people who have been insufficiently willing to oppose
tax increases from time to time.
Now, I think there have been some important tax increases
that wouldn't have gone through. I did notice the gentleman
from Ohio listed as one of these unfortunate tax increases the
gasoline tax increase of 1993. I have also noticed that now
that the Republican party has the President, both houses of
Congress, and certainly a sympathetic ear at the Supreme Court,
or 10 sympathetic ears at the Supreme Court, this terrible
gasoline tax, about which we heard so much, isn't going to be
changed. I haven't seen the proposal to cut the gasoline tax.
You're in power, you have the President, you have both houses
of Congress, you're passing all kinds of tax bills. Has that
terrible gasoline tax increase of 1993 grown on you? Have you
suddenly found merit in it that you never found before? That
would not have passed.
Apparently the majority now is happy that it passed because
certainly the Republicans could, if they wanted to, do away
with the gasoline tax increase of 1993, and it seems to me now
that they apparently have decided that it was a good thing that
that got through by one vote.
I remember--I was here during Ronald Reagan. I remember a
couple of tax increases Ronald Reagan asked us to vote for.
Ronald Reagan in 1982, with the leadership of then Senator
Dole, pushed through a tax increase to partially undo the tax
cut of 1981.
Now, I didn't vote for that at the time. I thought that
particular Republican tax increase was not well constructed,
but the Reagan people thought it was very important to the
economy. My recollection is that if you had your two-thirds in
there, Ronald Reagan wouldn't have gotten that tax increase.
And then came 1983 when Ronald Reagan and Tip O'Neill
collaborated to raise Social Security taxes, and people who
talk about the need of people who are on Social Security to pay
taxes on their Social Security. The first piece of that, the
taxation of 50 percent of people's Social Security benefits if
they are making more than $25,000 a year, that was enacted by
the Congress at the request of Ronald Reagan with the support
of Tip O'Neill and Bob Dole. I don't think it got two-thirds. I
didn't vote for that one, either. I didn't think that was well
done, it put off the cost-of-living increase. So I think the
Republican party is being a little shortsighted because they
are forgetting that at times when they were in power, they were
for tax increases.
And then, of course, George Bush's lips would never have
moved if he needed two-thirds to move them. George Bush's lips
were moved by a majority in 1990, not by two-thirds, and
again--and so what I'm struck by is the repudiation of the Bush
and Reagan tax cuts here. As I said, Ronald Reagan pushed
through a couple of tax increases, not tax cuts, but tax
increases. I'm not talking about the '86 one, I'm talking about
the '82 and the '83 tax increases. And I don't know, is this
kind of some compensatory thing? You'll name things for Ronald
Reagan on the one hand, but on the other hand, you'll change
the Constitution to make it impossible to do the things that he
did?
I mean, I have always read that the Republicans thought
that one of their advantages--one of their benefits that they
gave the country was that they saved Social Security. Well,
they saved it in part by a tax increase, and this, of course,
would have made it impossible. But the fundamental point is
that it's just not democratic, it's not majority rule.
Now, there are elements in our Constitution that already
prevent majority rule, specifically the two States--two
senators per State, and that was because of the political
bargain they made. But apparently what the conservatives are
now saying is, if we play by what we've always considered to be
the fair rules--majority wins--and we count the majority of the
votes, if we count the majority of people elected, if we count
the majority of people elected in the United States House of
Representatives, we'll lose a few, and we don't want to do
that, and so therefore we are going to change the Constitution
to say you can't raise taxes; we're not going to change the
Constitution to say you can't protect Social Security or that
you can't protect Medicare; we're not even going to change the
Constitution to say you need two-thirds to go to war; we're
talking about changing the Constitution to favor a particular
ideology that----
Chairman Sensenbrenner. The gentleman's time has expired.
Are there amendments?
For what purpose does the gentlewoman from Texas, Ms.
Jackson Lee, seek recognition?
Ms. Jackson Lee. Thank you, Mr. Chairman. I have two
amendments at the desk, Amendments 1 and 2, that I would
appreciate taking en bloc.
Chairman Sensenbrenner. Without objection, the amendments
will be considered en bloc. The Clerk will report the
amendments.
[Amendments 1 and 2 to H.J. Res. 41 offered by Ms. Jackson
Lee follow:]
AMENDMENT 1--Amendment to H.J. Res. 41
Offered by Ms. Jackson Lee of Texas
Add at the end the following:
SECTION. The requirements of this article do not apply to any bill,
resolution, or other legislative measure that imposes an environmental
tax, fee, charge, or assessment.
AMENDMENT 2--Amendment to H.J. Res. 41
Offered by Ms. Jackson Lee of Texas
Add at the end the following:
SECTION. The requirements of this article do not apply to any bill,
resolution, or other legislative measure necessary to preserve the
solvency of the Federal Old Age and Survivors Insurance Trust Fund or
the Federal Disability Trust Fund, or any successor funds.
The Clerk. Amendment to H.J. Res. 41 offered by Ms. Jackson
Lee, Amendment 1 and Amendment 2. Add at the end the following:
Section: The requirements of this article do not apply to any
bill, resolution, or other legislative measure that imposes an
environmental tax, fee, charge or assessment.
Chairman Sensenbrenner. Without objection, the amendments
are considered as read and the gentlewoman from Texas is----
Mr. Lee. Mr. Chairman?
Chairman Sensenbrenner. Yes?
Mr. Lee. Are we doing them one at a time or en bloc?
Chairman Sensenbrenner. En bloc.
Mr. Lee. So she should read the second one, too.
Chairman Sensenbrenner. Okay. The Clerk will continue
reading. The objection is heard.
The Clerk. Amendment 2. At the end--at the end, the
following: Section: The requirements of this article do not
apply to any bill, resolution, or other legislative measure
necessary to preserve the solvency of the Federal Old Age and
Survivors Insurance Trust Fund or the Federal disability trust
fund or any successor funds.
Ms. Jackson Lee. Thank you.
Chairman Sensenbrenner. The gentlewoman is recognized for 5
minutes.
Ms. Jackson Lee. Thank you, Mr. Chairman.
Let me raise a general perspective of opposition to the
legislation and speak then to my amendments, and that is, of
course, the diminishing impact that this has on the individual
votes of members of the United States House of Representatives,
in particular noted as the People's House.
I would say to you, Mr. Chairman, factually that it is well
known that our taxes in America are less than many of our
European neighbors, as well as our debt and deficit, which we
appreciate, and so I would offer to say that a constitutional
amendment, which we have certainly voted on in many instances
before and it has not passed, really should answer dire
circumstances, and the question is, do we have dire
circumstances to warrant diminishing my vote or any other vote
of any other member of the United States House?
The first amendment speaks to our priorities and our
values. I would offer to say that this amendment eliminates the
provision on the impact of an environmental tax, fee, charge,
or assessment that would cause us to be able, if you will, to
support a super fund and compensation for health damages and
dealing with the public safety and environmental programs which
are so very vital to this country, particularly, for example,
as we move through this tragic repeal of the arsenic quality in
water. There may be instances once this works its will through
Congress that we would want to compensate some of our citizens
for the intake of arsenic; But in particular, a recent example,
of course, was the hazardous oil spill of the Exxon Valdez
where it was necessary to use Federal funds to clean it up.
I would simply say to my colleagues that we're doing great
damage and great danger by preventing--putting these particular
funds in jeopardy.
Amendment Number 2 goes to the issue of dealing with the
preservation of the solvency of the Federal Old Age and
Survivors Insurance Fund of the disability--or the disability
trust fund or any successor funds.
I think, again, I go to the point of whether or not these
are dire circumstances that require a constitutional amendment
that, in fact, extinguishes the rights of my constituents to
protect Social Security. I would hope that we would, in fact,
support this amendment to shore up Social Security and Medicare
and not allow a two-thirds provision, if passed, to interfere
with the responsibilities that we have for Medicare and Social
Security and its solvency. This constitutional amendment would
do great damage, and I would ask my colleague to support both
amendments.
Chairman Sensenbrenner. Does the gentlewoman yield back?
Ms. Jackson Lee. I yield back.
Chairman Sensenbrenner. For what purpose does the gentleman
from Ohio seek recognition?
Mr. Chabot. Mr. Chairman, I rise to oppose the amendments,
both.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Chabot. Thank you, Mr. Chairman. I will be relatively
brief.
Our position would be that there is no reason to make the
exceptions which are called for in these two amendments. We
agree that we clearly should protect the environment, we agree
that we should protect Social Security and Medicare, but the
purpose of this constitutional amendment is simply to make it
more difficult to raise taxes. There is no reason to believe
that these amendments would add anything to the amendment, and
for that reason, we oppose it.
Chairman Sensenbrenner. Would the gentleman yield?
Mr. Chabot. I'll be happy to yield to the Chairman.
Chairman Sensenbrenner. I would just point out that both
the Social Security amendments of 1983 and the Super Fund law
were passed by over two-thirds margins in the House of
Representatives and the Senate. So even if this amendment were
in place, the revenue that the gentlewoman from Texas is
talking about would have been there and the tax increase would
have been collected on the American people.
I thank the gentleman for yielding.
Mr. Chabot. Thank you. And I yield back the balance of my
time.
Chairman Sensenbrenner. The question----
Mr. Scott. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Virginia, Mr.
Scott.
Mr. Scott. Strike the last word on the amendment.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Mr. Chairman, I would, in response to the
gentleman from Ohio, just point out that it would just be more
difficult to improve Social Security. But let me just say that,
Mr. Chairman, this constitutional amendment will not affect
spending; it only affects paying for the spending. You can
increase spending and enact new programs with the simple
majority. To pay for those programs under this amendment, under
the bill, would--to pay for it would require two-thirds.
Now, as the gentleman from North Carolina has suggested,
this year, we have not had any hearings, there has been no
subcommittee mark, and I think that's deliberate because the
more we actually consider this, the worse the bill looks.
For example, two-thirds required to increase revenue by
more than a de minimis amount. If we had had a hearing, we
might have had to listen to Jim Miller again, a high-ranking
Reagan appointee, who said that de minimis was an unworkable
standard; or listen to several witnesses pontificate about the
exact meaning of ``increase the internal revenue''; or hear
about Section 2 that suggests that if we're engaged in a
military conflict and pass a joint resolution which becomes
law, does that mean it becomes law without the President's
signature, the President can't veto the bill?; or hear what
happens when there's a dispute. The Speaker of the House says
the bill passes; somebody says no, you needed two-thirds; you
didn't get two-thirds. Who is going to resolve that dispute?
Maybe if we had a hearing, Mr. Chairman, we would have to
hear senior citizens explain that in a budget crunch, you can
cut Social Security with a simple majority, but it takes a two-
thirds vote to close corporate loopholes.
We might even hear about the half-trillion dollars every
year we spend in tax expenditures and, in fact, if you are
passing a bill with just transient support, you don't know
whether it's going to be there next year, but you've got the
majority this year, you might pass an appropriation in the form
of a tax expenditure rather than a straight appropriations
because it would take two-thirds vote the following year to
reverse that tax expenditure.
We might have to hear, as the gentleman from New York, Mr.
Nadler, pointed out, that if you make a mistake and you drain
the--and a tax bill drains--tax cut drains the budget a lot
more than you thought it would, it would take two-thirds vote
to correct that mistake.
If we had a hearing, we might consider, is this amendment--
is these amendments considered--we might consider the impact
that it would have on the environment, might have to consider
the impact it has on Social Security or our ability to provide
a prescription drug benefit under Medicare.
But since we haven't had a hearing, we just have to go
through the charade and try the best we can with amendments
without the hearings, without the subcommittee mark, and do the
best we can.
I think these amendments are very meritorious and I would
hope that we would adopt these amendments.
Mr. Nadler. Mr. Chairman?
Chairman Sensenbrenner. For what purpose does the gentleman
from New York seek recognition?
Mr. Nadler. To strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Nadler. Thank you.
I just want to expand on what the gentleman from Virginia
was saying. This is an amendment to the United States
Constitution we're considering. We haven't had a subcommittee
hearing, we haven't had a committee hearing, we haven't had any
hearings, maybe because we're afraid of what we'll hear at
those hearings or maybe because we know this is a joke and
nobody takes it seriously.
Look at the absences on both sides of the aisle on this
committee, look at the crowd out here, look at the legions of
the press. Everybody knows this is a press release and not a
serious consideration of a constitutional amendment.
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Nadler. No, I won't, not on this point. Yes, I'll
yield. Yes, I'll yield.
Chairman Sensenbrenner. Okay. Let me say that it is only as
a result of the Chair's insistence that the regular order be
followed that we are here today, because the leadership said
this bill is coming up the week after we get back----
Mr. Nadler. Reclaiming my----
Chairman Sensenbrenner.--and if we don't have a markup, it
will be brought directly to the floor.
Mr. Nadler. Reclaiming my time. This----
Chairman Sensenbrenner. Please give the Chair a little
credit where credit is due.
Mr. Nadler. I will give the Chair the credit. I will just
point out that what that simply emphasizes is how much of a
joke the leadership of this House thinks this is. The present
leadership of this House, the Speaker, whoever else made that
threat to the Chairman of the committee, obviously doesn't
consider this seriously as a constitutional amendment if
they're willing to dispense with any committee consideration,
so we have no subcommittee consideration, no hearings, a
markup, but it's coming up. Why next week? It's got to be done
before April 15th, that's when the press release is due because
that's the day people have to file their income taxes.
Now, this would be tragic if there were a snowball's chance
in hell that this bill would survive on the floor of the House.
We know that's not going to happen, we know it's not going to
pass the House or the Senate by a two-thirds vote, thank God,
but we have to go through this charade nonetheless because we
must have the press release.
Frankly, I will express again what I said in my opening
statement. I hope that this committee can get down to business
and deal with serious concerns that we haven't had hearings on
such as the President's proposal for faith-based initiatives. I
see that Mr. Watts and--J.C. Watts and others are introducing a
bill; we ought to be taking a look at that. This is part of our
responsibility. I won't characterize the bill or the whole
initiative--I have my questions about it--but the fact is it
certainly implicates serious questions about the First
Amendment, the Bill of Rights, which are the province of this
committee, and we're not doing anything about this but wasting
our time on charades and press releases such as this bill.
Now, I urge the adoption of Ms. Watts--of Ms. Jackson Lee's
amendments and the amendments that I will introduce as
mitigating the damage of the press release.
Thank you, Mr. Chairman.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. For what purpose does the gentleman
from Massachusetts seek recognition?
Mr. Frank. To strike the requisite number of words.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Frank. Thank you, Mr. Chairman.
First I want to credit you for throwing yourself however
temporarily in the way of this locomotive. I realize that it's
got to pass over you or through you. But I appreciate your
honesty in telling us that it was the desire of the Republican
leadership to bring the bill to the floor whether or not there
was committee consideration.
I do remember that the previous chairman was less unhappy
about that because his feeling always was that the less he had
to do with this distortion of the American Constitution, the
better he liked it.
I have a particular concern with regard to the Social
Security trust fund. This talks about the gentlewoman's
amendment, exempting from this two-thirds requirement a bill
necessary to preserve the solvency of the Federal Old Age and
Survivors Insurance Trust Fund.
Now, doing that is not controversial. How you correct it
could be controversial, and let me give you one specific
proposal that would be made very difficult, even more
difficult, if this were to pass.
One of the single most egregiously unfair thing in the
Federal tax code is the fact that the payroll tax cuts off at
about $75,000. As a single Member of Congress, my salary is
about 145,000; I have no dependents. I pay less in dollars, not
percent, I pay less in dollars in Social Security tax for the
Social Security system, not Medicare, than a married couple,
each of whom makes $40,000 a year and has a couple of
dependents, because between them, they are taxed on the full
$80,000 they earn, each being--earning $40,000.
Now, I think that's egregiously unfair, and one of the
proposals that many of us have had is to change that by
increasing the level at which payroll taxes are no longer
applied. We do know that payroll taxes are partly returned to
you, but they partly are a system of helping other people,
disability people--people with disabilities, et cetera.
A proposal to take the cap off the Social Security payroll
tax and make it more progressive with the funds from that
devoted to the Survivors Insurance--Old Age and Survivors
Insurance Trust Fund would be affected by this amendment. So
anyone who has supported the idea of making the Social Security
payroll tax less regressive, an idea the current Republican
leadership ignores but I think has a lot of appeal, would find
that two-thirds would be required to do that; that is, if you
wanted to increase the level at which you impose the taxes and
put that money into the Social Security trust fund--now, we're
told we need to look into Social Security and make it more
secure. One reasonable way to do it would be--even if we wanted
to go to $100,000 or $125,000 or perhaps we might want to
exempt the first $25,000 of income and then add; in other
words, give a break to people at the low end----
Mr. Issa. Mr. Chairman, point of order.
Chairman Sensenbrenner. The gentleman will state his point
of order.
Mr. Issa. I truly hate to interrupt, but we've all called
to end this debate as quickly as possible. Could I ask that the
gentleman stick to germane subjects related to this, the bill
before us?
Mr. Frank. Mr. Chairman, if I may be heard on that----
Chairman Sensenbrenner. The gentleman from Massachusetts
will confine his remarks to the amendment before the committee.
Mr. Frank. That's what I was doing, Mr. Chairman. The
amendment before the committee----
Chairman Sensenbrenner. You may proceed.
Mr. Frank. Apparently the gentleman is so eager to get the
debate over with that he decided not to pay any attention to
it. That is his prerogative, but making false points of order--
and I assume, Mr. Chairman, that the time consumed by that
point of order does not come out of my time since it was not
under my control and I didn't yield, as I may not control a
point of order.
But in fact, let me read to the gentleman what he
apparently did not read. ``The requirements of this article''--
this is part of the gentlewoman's amendment--``do not apply to
any legislative measure necessary to preserve the solvency of
the Federal Old Age and Survivors Insurance Trust Fund.''
This would require you to a two--to take a two-thirds vote
to protect the Social Security system as it now is pending. The
gentlewoman says, no, we'll exempt measures for the Social
Security system. I am speaking very directly to the amendment
of the gentlewoman from Texas.
If we decided to protect the Social Security system by
making that tax revenue system less regressive and cover some
of the taxes on revenues--on incomes above $75,000, your
amendment would require two-thirds.
I think a bill that would both make it less regressive,
give relief to people making 30- and 40- and 50- and 60,000 a
year, particular two-income couples in that category, and
increase the total revenue by removing the cap or raising the
cap, would be one of the best things we could do. I regret that
we aren't doing it now, I regret that neither party has done it
before.
The amendment, without the amendment of the gentlewoman
from Texas, would say that requires two-thirds, and I say it
would be terribly wrong for us to require a two-thirds vote to
say that we were going to increase the level at which Social
Security taxes could be levied for the purposes of both making
it less regressive and putting some of that money into the
Social Security system.
So while it pains the gentleman from California, it pains
me more that we would make such a reasonable measure require a
two-thirds vote.
Chairman Sensenbrenner. The gentleman's time has expired.
For what purpose does the gentleman from California seek
recognition?
Mr. Issa. Just a short answer----
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Issa. For the gentleman from Massachusetts, I truly
appreciate your speaking to the issue of a tax or some other
example, but speaking on the merits of that tax and going into
what we should do and how we should do it and so on in my
opinion clearly was beyond the scope of this.
In an effort to move this along expeditiously but not
adversely fast, I come from a state where I feel mandated to
support a move towards a two-thirds majority to raise the taxes
of the people of California. The Constitution of the State of
California requires a two-thirds majority with rare exceptions
to raise the taxes of the people of California.
So unlike the gentleman from Massachusetts who sees a
simple majority as appropriate, I believe that all of us in the
spirit of the Constitution and the will of the people of
California are obligated to attempt to give the people of
California as to their Federal dollars the same protection they
have as to their state dollars.
Mr. Frank. Would the gentleman yield?
Mr. Issa. Yes, I will.
Mr. Frank. I would just like to say to the gentleman that
his conception of the germaneness rule is extraordinarily
shaky. The fact is that when a constitutional amendment would
make it harder to do a particular thing, discussing the
desirability of that particular thing and giving an example of
what would be involved is, in fact, very much in order, and I
am sorry that the gentleman didn't like what I said, but he's
going to have to be more inventive in trying to shut me up in
the future.
Mr. Weiner. Will the gentleman from California yield?
Mr. Issa. Just a moment.
Mr. Weiner. Sure.
Mr. Issa. I certainly, Mr. Frank, appreciate that. As you
know, I'm a freshman learning the ropes and was only
questioning whether it was germane. I will learn as time goes
on, presumably from----
Mr. Frank. If the gentleman would yield, if the gentleman
would yield, in the interest of his learning the ropes, the way
to ask a question about whether something is germane is to ask
a parliamentary inquiry. Making a point of order is not asking
a question; it is making a statement and, in this case, an
incorrect one.
Mr. Issa. Thank you.
Mr. Weiner. Will the gentleman yield?
I am curious, given that California is the experience that
you base your view on, is there a two-thirds requirement to
make expenditures?
Mr. Issa. Yes, there is.
Mr. Weiner. So it is a--would you support having a two-
thirds majority here in Congress for expenditures to be made,
and if so--I mean, wouldn't that be consistent since it's two-
halves of the same equation? I yield back.
Mr. Issa. Yes, I think that's a wonderful idea. Are you
offering it as an amendment to this particular bill?
Mr. Weiner. Why not four-fifths?
Chairman Sensenbrenner. That would be non-germane.
Mr. Issa. Thank you, Mr. Chairman. I yield back the
remainder of my time.
Mr. Scott. Mr. Chairman?
Chairman Sensenbrenner. For what purpose does the gentleman
from Virginia seek recognition?
Mr. Scott. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Mr. Chairman, the point that the gentleman from
New York has made is exactly the problem with this
constitutional amendment in its present form. You can increase
spending with a simple majority, but it takes two-thirds to pay
for it. In California, if you have two-thirds support for a--if
you have support for--if you want to pass a budget, you need
two-thirds of the vote. That would give--the same people who
support it can pay for it. This bills says you can support it
with a simple majority and you're just left with deficit
spending, which is what we're trying to get away from.
California--it's the same two-thirds both ways, and that is
not what's in this bill. That's why this is so important.
Chairman Sensenbrenner. For what purpose does the gentleman
from North Carolina seek recognition?
Mr. Watt. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. Mr. Chairman, I won't take 5 minutes.
I confess to being in a real quandary here, because if we
were seriously legislating, I would agree with your side that
both of Ms. Jackson Lee's amendments really don't make any
sense. They don't make any sense because the underlying bill
doesn't make any sense, however.
I wouldn't want to write these provisions into the
Constitution of the United States any more than I would want to
write the underlying bill into the Constitution of the United
States. So I'm in this quandary about whether we are seriously
legislating and looking at something that the Judiciary
Committee is supposed to take seriously or whether we're just
engaging in the politics of whatever this is that the
leadership has told us to engage in. And I'm--I'm going to try
to continue to be serious about what I think our role ought to
be, and in that spirit, I'm going to vote against Ms. Jackson
Lee's amendments.
I do have two amendments that I think are serious that I
hope will be considered in that same light, and I will yield
back the balance of my time.
Chairman Sensenbrenner. The question is on the amendments
en bloc offered by the gentlewoman from Texas, Ms. Jackson Lee.
Those in favor will signify by saying aye.
Opposed, no.
The no's appear to have it, the no's have it and the
amendments are not agreed to.
Are there further amendments?
The gentleman from North Carolina, Mr. Watt, for what
purpose do you seek recognition?
Mr. Watt. Mr. Chairman, I have an amendment at the desk,
Watt 02.
Chairman Sensenbrenner. The Clerk will report the
amendment.
[The amendment Watt 02 to H.J. Res. 41 offered by Mr. Watt
follows:]
AMENDMENT WATT 02--Amendment to H.J. Res. 41
Offered by Mr. Watt of North Carolina
Page 2, line 17, after the word ``increase'' insert ``or
decrease''.
The Clerk. Amendment to H.J. Res. 41 41 offered by Mr. Watt
of North Carolina. Page 2, line 17----
Mr. Watt. I ask unanimous consent the amendment be
considered as read.
Chairman Sensenbrenner. Without objection, so ordered, and
the gentleman is recognized for 5 minutes.
Mr. Watt. Thank you, Mr. Chairman, and I'll be very brief.
I don't think this requires any elaborate explanation.
I think if this bill makes any sense and--it should work
both ways. I don't think it makes any sense, so I'm going to
vote against it even if you pass this amendment, but if it is
to create some equity and to do something that is beneficial to
our country, then I think it ought to work both ways.
I yield back the balance of my time.
Mr. Chabot. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Ohio, Mr.
Chabot.
Mr. Chabot. Mr. Chairman, I move to oppose the amendment.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Chabot. Thank you, Mr. Chairman. I'll be very brief.
Mr. Chairman, the whole purpose of this bill is to make it
more difficult for Congress to raise taxes, and if Congress is
able to decrease taxes on the American people, more power to
us. Let's not make it any tougher.
I yield back the balance of my time.
Chairman Sensenbrenner. The question is on the amendment
offered by the gentleman from North Carolina, Mr. Watt.
Those in favor will signify by saying aye.
Opposed, no.
The no's appear to have it, the no's have it and the
amendment is not agreed to.
For what purpose does the gentleman from New York, Mr.
Nadler, seek recognition?
Mr. Nadler. Mr. Chairman, I have two amendments. I would
like to ask that Amendment Number 1--I have two amendments at
the desk. Will you read Number 1----
Chairman Sensenbrenner. The Clerk will report Nadler Number
1.
[The Amendment Number 1 to H.J. Res. 41 offered by Mr.
Nadler follows:]
AMENDMENT 1--Amendment to H.J. Res. 41
Offered by Mr. Nadler of New York
Add at the end the following:
SECTION. The requirements of this article do not apply to any bill,
resolution, or other legislative measure designed to improve
enforcement of the internal revenue laws.
The Clerk. Amendment to H.J. Res. 41 offered by Mr. Nadler.
At the end, the following: Section. The requirements of this
article do not apply to any bill, resolution or other
legislative measure designed to improve enforcement of the
internal revenue laws.
Mr. Nadler. Thank you.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Nadler. Thank you, Mr. Chairman. I will be very brief
on this. This is a very straightforward amendment that simply
exempts from the super majority requirement any law that,
although it would obviously increase revenues, would do so only
by improving law enforcement.
Surely we should not be required to obtain a two-thirds
vote to improve the enforcement of the existing law. That would
turn this constitutional amendment into a criminal's protection
act, and I'm sure that Mr. Chabot does not want that and will
support this amendment. We cannot mean that. I assume that if
enforcing the existing law stops people from--if we find a
better way to enforce the existing law, the existing tax rates,
the existing tax code, that stops someone from cheating and
stealing money from the American people, that shouldn't require
a two-thirds vote. There should not be a presumption in favor
of criminals.
So anticipating Mr. Chabot's support, I--I urge the
adoption of this amendment.
Chairman Sensenbrenner. Does the gentleman yield back the
balance of his time?
Mr. Nadler. I do.
Mr. Chabot. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Ohio, Mr.
Chabot.
Mr. Chabot. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Chabot. Thank you, Mr. Chairman. I'm very--it's
unfortunate that I'm going to have to let the gentleman from
New York down, but I do not support his amendment. I know he's
shocked, but the provisions of H.J. Res. 41 which allow for an
increase in revenue by no more than a ``de minimis'' amount
would cover the kind of situation that this amendment is
intended to address, and in addition a bill intended to improve
tax law enforcement would in all likelihood have a broad
consensus, and for that reason, we oppose the amendment.
Mr. Nadler. Would the gentleman yield for a question?
Mr. Chabot. I'll be happy to yield.
Mr. Nadler. If there were a very small thief, then this
amendment would be unnecessary because a ``de minimis''
increase in revenue would not trigger the amendment. But if
there were a large previously successful thief or thieves, then
it might be just ``de minimis'' amendment--``de minimis''
revenues if we discovered how a bunch of people or a very large
corporation is cheating. So we would need this amendment, would
we not?
Mr. Chabot. Reclaiming my time, we clearly believe that a
``de minimis'' amount would cover this. If you want to discuss
Mark Rich and other cases, we could get into that, but not
wanting to do that, we continue to oppose the amendment and
we'll yield back the balance of our time.
Mr. Scott. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Virginia, Mr.
Scott.
Mr. Scott. Mr. Chairman, this----
Chairman Sensenbrenner. Five minutes.
Mr. Scott.--invites a discussion again on what is ``de
minimis''. If you had widespread Medicare fraud, a new
enforcement technique might well reap billions of dollars in
internal revenue.
My question to the gentleman from Ohio would be what is
``de minimis'' so we would know what kinds of enforcement
mechanisms would qualify and which would not.
Mr. Chabot. Will the gentleman yield?
Mr. Scott. I'll yield.
Mr. Chabot. I thank the gentleman for yielding. In a
previous Congress, Chairman Archer of the Ways & Means
Committee had suggested that it be 1 percent or, excuse me,
one-tenth of 1 percent over a 5-year period. That was their
definition of ``de minimis''. But we would ultimately have to
see how the courts interpreted this down the road or future
congresses under a follow-up.
I yield back the balance.
Mr. Weiner Mr. Chairman?
Mr. Scott. Reclaiming my time----
Chairman Sensenbrenner. The time belongs to the gentleman
from Virginia.
Mr. Scott. Mr. Chairman, my offhand calculation would mean
that would be tens of billions of dollars in tax revenue would
constitute ``de minimis''--billions--at least billions of
dollars and over a 10-year period tens of billions of dollars
would constitute a ``de minimis'' amount under that
calculation. And I would yield to the gentleman to see if
that's right.
Mr. Chabot. Again, I thank the gentleman for yielding.
It's impossible to put an exact figure on that at this
time. ``de minimis'' is terminology that's used in other pieces
of legislation; there's all kinds of verbiage that are
contained in bills which have to be subsequently defined and
this perhaps will ultimately be one of those.
Mr. Scott. Reclaiming my time, then I guess the courts or
the speaker will decide what is ``de minimis'' in the eyes of
the beholder, I would suppose.
I yield back the balance of my time.
Chairman Sensenbrenner. The question is on----
Mr. Weiner. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from New York, Mr.
Weiner.
Mr. Weiner. I would move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Weiner. I am ultimately puzzled by why we should have
any amendments to something that clearly doesn't have support
in this House and clearly isn't going to be passed and amend
any Constitution, and also the desire to kind of keep us on
some intellectual even keel here.
Can I ask--I mean, this is an amendment that--the
amendments that have been considered all, I think, point up
some fundamental problems, but from the way I read the
constitutional amendment that we're considering today, if we
have a budget resolution that's offered on the floor that
triples the number of IRS enforcement agents, it would trigger
this bill and we would have a legislative and a constitutional
fight over the future of the budget because it increases the
number of agents.
We would have--if we had an omnibus banking bill that had
tougher enforcement of the money laundering laws----
Mr. Chabot. Will the gentleman yield?
Mr. Weiner. Certainly.
Mr. Chabot. This particular--I thank the gentleman for
yielding. This particular legislation only kicks in if we're
talking about internal revenue issues, internal revenue laws.
It wouldn't apply to additional personnel or any of the other
items that the gentleman is raising.
And I again thank the gentleman for yielding.
Mr. Weiner. Well, reclaiming my time, you know, it is--you
know, perhaps internal revenue laws is something that is a term
of art that is defined elsewhere in the statute that maybe I--
or certainly not--it's certainly not defined clearly enough in
the Constitution to obviate any change in the budget as
impacting our internal revenue. I mean, the fact of the matter
is, if you, you know, if you think that we have difficult
time--I mean, and you've said it, and to give the gentleman
from Ohio credit, he made it very clear that his objective is
to make some things more difficult to do. So when it was asked,
well, should we make expenditures more difficult, well, maybe
we should in some cases. When answering Mr. Nadler, said, well,
there will be broad consensus on that, so that will be able to
pass, we don't want to make that kind of thing more difficult.
The fact of the matter is, the way I look at it, if we ever
do an omnibus appropriation, if we ever do an omnibus banking
bill, if we ever do an omnibus budget bill, we are then going
to have a constitutional question about the--about ``de
minimis'', and with that, I'd like to ask a question.
Is there any other place in the Constitution that the words
``de minimis'' appear?
Mr. Chabot. If the gentleman would yield, we appreciate
that. I believe there are and we can point that out in a moment
here.
Mr. Weiner. Do you have any case law that perhaps would
give us some guidance, just so I know if ``de minimis'' is 2
percent or 8 percent or 9 percent?
Mr. Chabot. We would be happy to provide that information
to the gentleman; we just don't have the time at this point.
Mr. Frank. Would the gentleman yield?
Mr. Weiner. Certainly.
Mr. Frank. I would only point out, though, that if we did
do this amendment and we included the word ``de minimis'' and
we were subsequently to adopt an amendment requiring that
English be the official language, I assume that would
automatically previously amend the insertion of those Latin
words ``de minimis.''
Mr. Weiner. I yield back my time.
Chairman Sensenbrenner. The question is on the amendment
offered by the gentleman from New York, Mr. Nadler.
Those in favor will say aye.
Opposed, no.
The no's appear to have it----
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. The no's appear to have it, the
no's have it and the amendment is not agreed to.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. For what purpose does the gentleman
from Massachusetts, Mr. Frank----
Mr. Frank. Mr. Chairman, I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Frank. Mr. Chairman, I ask unanimous consent it be
considered as read. I'll explain it briefly.
Chairman Sensenbrenner. Without objection. The gentleman is
recognized for 5 minutes.
[The Amendment to H.J. Res. 41 offered by Mr. Frank
follows:]
Amendment to H.J. Res. 41
Offered by Mr. Frank of Massachusetts
Add at the end the following:
SECTION. The requirements of this article do not apply to any bill,
resolution, or other legislative measure necessary to preserve the
solvency of the Federal Old Age and Survivors Insurance Trust Fund.
Mr. Frank. This is a truncated version of the en bloc
amendment offered by the gentlewoman from Texas. It does not
include the environmental fee part. It says only that
legislation aimed at protecting the solvency of the Federal Old
Age and Survivors Insurance Trust Fund would not be subject to
the rules.
I think we've debated it sufficiently. I'm ready to go it a
rollcall, Mr. Chairman.
Chairman Sensenbrenner. Okay. The question is on the
amendment offered by the gentleman from Massachusetts, Mr.
Frank. rollcall will be ordered.
All those in favor of the Frank amendment will signify by
saying aye.
Opposed, no.
The Clerk will call the roll.
The Clerk. Mr. Hyde?
[No response.]
The Clerk. Mr. Gekas?
Mr. Gekas. No.
The Clerk. Mr. Gekas, no. Mr. Coble?
Mr. Coble. No.
The Clerk. Mr. Coble, no. Mr. Smith?
Mr. Smith. No.
The Clerk. Mr. Smith, no. Mr. Gallegly?
Mr. Gallegly. No.
The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
[No response.]
The Clerk. Mr. Chabot?
Mr. Chabot. No.
The Clerk. Mr. Chabot, no. Mr. Barr?
[No response.]
The Clerk. Mr. Jenkins?
[No response.]
The Clerk. Mr. Hutchinson?
Mr. Hutchinson. No.
The Clerk. Mr. Hutchinson, no. Mr. Cannon?
Mr. Cannon. No.
The Clerk. Mr. Cannon, no. Mr. Graham?
[No response.]
The Clerk. Mr. Bachus?
[No response.]
The Clerk. Mr. Scarborough?
Mr. Scarborough. No.
The Clerk. Mr. Scarborough, no. Mr. Hostettler?
Mr. Hostettler. No.
The Clerk. Mr. Hostettler, no. Mr. Green?
Mr. Green. No.
The Clerk. Mr. Green, no. Mr. Keller?
[No response.]
The Clerk. Mr. Issa?
Mr. Issa. No.
The Clerk. Mr. Issa, no. Ms. Hart?
Ms. Hart. No.
The Clerk. Ms. Hart, no. Mr. Flake?
Mr. Flake. No.
The Clerk. Mr. Flake, no. Mr. Conyers?
Mr. Conyers. Aye.
The Clerk. Mr. Conyers, aye. Mr. Frank?
Mr. Frank. Aye.
The Clerk. Mr. Frank, aye. Mr. Berman?
[No response.]
The Clerk. Mr. Boucher?
[No response.]
The Clerk. Mr. Nadler?
Mr. Nadler. Aye.
The Clerk. Mr. Nadler, aye. Mr. Scott?
Mr. Scott. Aye.
The Clerk. Mr. Scott, aye. Mr. Watt?
Mr. Watt. Aye.
The Clerk. Mr. Watt, aye. Ms. Lofgren?
[No response.]
The Clerk. Ms. Jackson Lee?
[No response.]
The Clerk. Ms. Waters?
[No response.]
The Clerk. Mr. Meehan?
Mr. Meehan. Aye.
The Clerk. Mr. Meehan, aye. Mr. Delahunt?
[No response.]
The Clerk. Mr. Wexler?
[No response.]
The Clerk. Ms. Baldwin?
Ms. Baldwin. Aye.
The Clerk. Ms. Baldwin, aye. Mr. Weiner?
Mr. Weiner. Aye.
The Clerk. Mr. Weiner, aye. Mr. Schiff?
[No response.]
Chairman Sensenbrenner. No.
The Clerk. No.
Chairman Sensenbrenner. Are there additional members in the
room who desire to record or change their vote?
The gentleman from South Carolina.
Mr. Graham. No.
Chairman Sensenbrenner. The gentleman from Tennessee.
Mr. Jenkins. No.
Chairman Sensenbrenner. Anybody else?
If not, the Clerk will report.
The Clerk. Mr. Chairman, there are 8 ayes and 16 nays.
Chairman Sensenbrenner. And the amendment is not agreed to.
Are there further amendments?
The gentleman from North Carolina, Mr. Watt.
Mr. Watt. Mr. Chairman, I have an amendment at the desk.
Chairman Sensenbrenner. The Clerk will report the
amendment.
[The Amendment Watt 01 to H.J. Res. 41 offered by Mr. Watt
follows:]
AMENDMENT WATT 01--Amendment to H.J. Res. 41
Offered by Mr. Watt of North Carolina
Page 3, after line 15, insert the following:
``SECTION 3. This article shall not be construed as to give the
Judicial Branch any authority except to declare whether the Legislative
Branch is in compliance herewith.''
The Clerk. Amendment to H.J. Res. 41----
Mr. Watt. I ask unanimous consent the amendment be
considered as read.
Chairman Sensenbrenner. Without objection, so ordered, and
the gentleman is recognized for 5 minutes.
Mr. Watt. Thank you, Mr. Chairman.
I really think this proposed constitutional amendment puts
us in a real separation of powers quandary which I'm trying to
address and I'm trying to address it in the spirit of trying to
do what I think is our responsibility in this committee.
This whole discussion about what is ``de minimis'' and what
is not ``de minimis'' will get you to a point that it will
actually be the United States Supreme Court who will decide
what is ``de minimis'' and what is not ``de minimis''.
If we are going to do this with any degree of integrity, I
think we've got to retain that responsibility here in our body,
in the--in the legislative body and not give that authority
over to the judicial branch.
So the impact of this amendment would be to say to the
Supreme Court, yes, you can--if we pass something and it
doesn't comply with this constitutional provision, yes, you can
declare it, what we have done, unconstitutional, but you can't
rewrite the bill to impose your own values on that because
that's a legislative judgment. And the effect of this amendment
would be to limit the judicial branch's authority to a
declaration--in effect a declaratory judgment of whether what
we had done complies with the statute or doesn't comply with
the statute, or complies with this constitutional amendment or
doesn't comply with the constitutional amendment, then the
legislative branch could come back and redo it until we get it
right, but the last thing I think we want to do is to give the
courts the right to make these decisions for us.
So I'm offering this. I mean, I--again, I'm having the same
problem I've had throughout this process. Are we serious about
this or--and doing what we have as a responsibility as a
judiciary committee and to other Members of the Congress who
are not going to look at this this closely, or are we engaged
in a political charade here? And I hope that you all will
understand that this is basic to our constitutional
prerogatives as a legislative body, and I hope that you will
support the amendment.
I yield back the balance of my time.
Chairman Sensenbrenner. The gentleman's time has expired.
The gentleman from Ohio, Mr. Chabot.
Mr. Chabot. Thank you, Mr. Chairman.
I move to oppose the amendment.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Chabot. Thank you, Mr. Chairman.
Congress--and I'll be brief--Congress would have the
authority to enforce and implement H.J. Res. 41 by appropriate
legislation, and it's unlikely that persons would have standing
in Federal court to challenge decisions made by Congress
pursuant to H.J. Res. 41. So the amendment is unnecessary, and
in addition, it's also inappropriate to restrict the power of
the judicial branch in this manner. We should not put in the
Constitution the manner in which courts must interpret a
constitutional amendment, and therefore we oppose the
gentleman's----
Mr. Watt. Would the gentleman yield?
Mr. Chabot. I would be happy to yield.
Mr. Watt. The last time I checked, every American citizen
had the right to raise a constitutional objection, and
certainly somebody who refused to pay their taxes has the right
to raise it.
I just--I don't understand what it is you're saying. What
you're saying is former Chairman Archer can make this decision,
Justice Rehnquist can make it, we don't care in this body
what--what definition of ``de minimis'' is and what----
Mr. Chabot. Reclaiming my time----
Mr. Watt.--I mean, because we're not even going to try to
do our legislative responsibility.
Mr. Chabot. Reclaiming my time, the courts oftentimes
determine whether or not a person has standing; and in the vast
majority of cases, the courts determine they don't have
standing.
I yield back the balance of my time.
Chairman Sensenbrenner. The question is on the Watt
amendment. Those in favor----
Mr. Weiner. Mr. Chairman? May I be heard on the Watt
amendment brief--I won't take the full 5 minutes.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Weiner. First of all, I--with all due deference to the
chairman of the subcommittee, the issue of standing in a
constitutional matter, if you are a United States citizen, it's
under the laws of the Constitution, you have standing.
Furthermore, this is an act of Congress that affects all
Americans, so you have standing if you are affected by the act
of Congress. So the impact will be every single time we have a
bill that has any impact or maybe no impact, it will--once we
pass it, any American can go into court and say, wait a minute,
this violated my constitutional right, that I have a
constitutional right as an American citizen to make sure that
my Congress acts according to the Constitution, so I am
questioning the ``de minimis'', whether it's ``de minimis'' or
not.
And I can tell you this is not an--well, this whole
argument is a little bit abstract, but it's not an abstract
discussion. There are groups in this town who believe that
taxes should be much lower, so they are going to come in with
every--every time we have a bill and go to court. Now, it might
not reach the Supreme Court every time, and it might, you know,
it might be handled quickly. ``de minimis'' is only 2 percent;
do we have a precedent; now this is--2 percent is ``de
minimis''; 9 percent is not ``de minimis''. But the idea of
standing is an absurd one.
I think what the amendment seeks to do is to say that when
we legislate here, you know, on some level, there are broad
constitutional prescriptions on things that we can do and very
often our laws wind up before--before bodies that have to
interpret its constitutionality.
I think what the author of the amendment is seeking to do
is making sure that every single legislative action does not
automatically result in a constitutional question. That is what
the effect of this constitutional amendment will be if--if pigs
fly and it passes. But I think that the idea that you--that the
courts will have to determine who has standing on a
constitutional question misunderstands the effect--the net
effect of this amendment.
Chairman Sensenbrenner. The question is on the amendment
offered by the gentleman from North Carolina, Mr. Watt.
Those in favor will signify by saying aye.
Opposed, no.
The no's appear to have it----
Mr. Watt. I ask for a recorded vote.
Chairman Sensenbrenner. A rollcall is ordered. Those in
favor of the Watt amendment will, after your names are called,
answer aye; those opposed, no; and the Clerk will call the
roll.
The Clerk. Mr. Hyde?
[No response.]
The Clerk. Mr. Gekas?
Mr. Gekas. No.
The Clerk. Mr. Gekas, no. Mr. Coble?
[No response.]
The Clerk. Mr. Smith?
Mr. Smith. No.
The Clerk. Mr. Smith, no. Mr. Gallegly?
Mr. Gallegly. No.
The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
[No response.]
The Clerk. Mr. Chabot?
Mr. Chabot. No.
The Clerk. Mr. Chabot, no. Mr. Barr?
[No response.]
The Clerk. Mr. Jenkins?
[No response.]
The Clerk. Mr. Hutchinson?
Mr. Hutchinson. No.
The Clerk. Mr. Hutchinson, no. Mr. Cannon?
[No response.]
The Clerk. Mr. Graham?
[No response.]
The Clerk. Mr. Bachus?
[No response.]
The Clerk. Mr. Scarborough?
Mr. Scarborough. No.
The Clerk. Mr. Scarborough, no. Mr. Hostettler?
[No response.]
The Clerk. Mr. Green?
Mr. Green. No.
The Clerk. Mr. Green, no. Mr. Keller?
Mr. Keller. No.
The Clerk. Mr. Keller, No. Mr. Issa?
Mr. Issa. No.
The Clerk. Mr. Issa, no. Ms. Hart?
Ms. Hart. No.
The Clerk. Ms. Hart, no. Mr. Flake?
Mr. Flake. No.
The Clerk. Mr. Flake, no. Mr. Conyers?
Mr. Conyers. Aye.
The Clerk. Mr. Conyers, aye. Mr. Frank?
[No response.]
The Clerk. Mr. Berman?
[No response.]
The Clerk. Mr. Boucher?
[No response.]
The Clerk. Mr. Nadler?
Mr. Nadler. Aye.
The Clerk. Mr. Nadler, aye. Mr. Scott?
Mr. Scott. Aye.
The Clerk. Mr. Scott, aye. Mr. Watt?
Mr. Watt. Aye.
The Clerk. Mr. Watt, aye. Ms. Lofgren?
[No response.]
The Clerk. Ms. Jackson Lee?
[No response.]
The Clerk. Ms. Waters?
Ms. Waters. Aye.
The Clerk. Ms. Waters, aye. Mr. Meehan?
Mr. Meehan. Aye.
The Clerk. Mr. Meehan, aye. Mr. Delahunt?
[No response.]
The Clerk. Mr. Wexler?
[No response.]
The Clerk. Ms. Baldwin?
Ms. Baldwin. Aye.
The Clerk. Ms. Baldwin, aye. Mr. Weiner?
Mr. Weiner. Aye.
The Clerk. Mr. Weiner, aye. Mr. Schiff?
[No response.]
The Clerk. Mr. Chairman?
Chairman Sensenbrenner. No.
The Clerk. Mr. Chairman----
Chairman Sensenbrenner. Are there additional members in the
chamber who wish to cast or change their vote?
The gentleman from North Carolina.
Mr. Coble. No.
The Clerk. Mr. Coble, no.
Chairman Sensenbrenner. The gentleman from Tennessee.
Mr. Jenkins. No.
Chairman Sensenbrenner. The gentleman from South Carolina.
Mr. Graham. No.
Chairman Sensenbrenner. The gentleman from Utah.
Mr. Cannon. No.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Massachusetts.
Mr. Frank. Aye.
Chairman Sensenbrenner. Is there anybody else who desires
to cast or change their vote?
If not, the Clerk will report.
The Clerk. Mr. Chairman, there are 9 ayes and 16 nays.
Chairman Sensenbrenner. And the amendment is not agreed to.
Are there further amendments?
The gentleman from New York, Mr. Nadler.
Mr. Nadler. Thank you. Mr. Chairman, I earlier said I had
two amendments. I would ask the Clerk to report the second
Nadler amendment.
[The Amendment Number 2 to H.J. Res. 41 offered by Mr.
Nadler follows:]
AMENDMENT 2--Amendment to H.J. Res. 41
Offered by Mr. Nadler of New York
Add at the end the following:
SECTION. The requirements of this article do not apply to any bill,
resolution, or other legislative measure repealing any industry-
specific exemptions, deductions, or credits.
Chairman Sensenbrenner. The Clerk will report.
The Clerk. Amendment to H.J. Res. 41 offered by Mr. Nadler.
Chairman Sensenbrenner. Without objection, the amendment is
considered as read and the gentleman from New York is
recognized for 5 minutes.
Mr. Nadler. Thank you.
Mr. Chairman, this bill is designed or will have the effect
of benefiting the wealthy and powerful at the expense of the
average American family and the poor.
This constitutional amendment makes it difficult to close
unfair tax loopholes that benefit the powerful corporations and
wealthiest Americans, requiring a two-thirds super majority to
do so. For example, the amendment makes it difficult to curb
the corporate welfare that our former colleague, Mr. Kasich,
was always talking about, and to cut unproductive tax
expenditures that grant subsidies to powerful special
interests. Yet, according to a recent editorial in the
Washington Post, quote, ``When the baby boomers begin to
retire, the country will be in an era of fiscal strain.'' To
avoid destructive deficits, there will have to be tax increases
and/or spending cuts. By making it harder to increase taxes,
this amendment would compound the pressure on the major social
spending programs--Social Security and Medicare.
I think Congress has been rightly criticized for busting
the Federal budget with billions of dollars in special interest
corporate welfare. We should not be making it harder to cleanse
the Tax Code of these outrages.
Think of the tax break we could give our constituents if
the special favors--or the--or the money we could have for
prescription drugs for Medicare or for Social Security and
Medicare in the future if the special favors for the oil
industry or corporate agriculture or companies that move
American jobs overseas were removed from the Tax Code. Perhaps
these reforms will have to wait until we pass genuine and
effective campaign finance reform--perhaps I should say if we
pass genuine and effective campaign finance reform. The powers
that be seem intent on--in this house, at least--seem intent on
preserving the money machine, so perhaps my concerns on this
front are moot.
Today, for example, we are doing another big favor for the
wealthiest Americans on the floor. So be it. The rule around
here seems to be dance with the one that brung you, so let the
dance continue. I am, however, concerned that when the time
comes to clean up this mess, a constitutional amendment of this
sort will make it impossible to repair the damage.
For those smug enough to believe the need will never arise,
I would point to just two instances in our recent experience.
First was President Bush's now infamous ``No new taxes'' pledge
in the heat of a campaign. It was a foolish promise. No serious
person believed it, especially in light of Ronald Reagan's
eight budget-busting years. His decision to break that
promise----
Mr. Conyers. Would the gentleman yield? Would the gentleman
yield? Could he submit his statement, have a vote, and then a
final vote before----
Mr. Nadler. Maybe we should--okay.
Mr. Conyers. Thank you.
Chairman Sensenbrenner. Without objection, the gentleman's
statement will appear in the record.
[The statement of Mr. Nadler follows:]
Prepared Statement of Hon. Jerrold Nadler, a Representative in Congress
from the State of New York
H.J.Res 41 is designed to benefit the wealthy and powerful at the
expense of the average American family and the poor. This
constitutional amendment makes it difficult to close unfair tax
loopholes that benefit the powerful corporations and wealthiest
Americans, requiring a two-thirds supermajority to do so. For example,
the amendment makes it difficult to curb ``corporate welfare'' and cut
unproductive tax expenditures that grant subsidies to powerful special
interests. Yet, according to a recent editorial in the Washington Post,
``when the baby boomers begin to retire . . . the country will be in an
era of fiscal strain. To avoid destructive deficits, there will have to
be tax increases and/or spending cuts. By making it harder to increase
taxes, this amendment would compound the pressure on the major spending
programs: Social Security, Medicare.'' I think Congress has been
rightly criticized for busting the federal budget with billions of
dollars in special interest corporate welfare. We should not be making
it harder to cleanse the Tax Code of these outrages.
Think of the tax break we could give our constituents if the
special favors for the oil industry or corporate agriculture or
companies that move American jobs overseas were removed from the Tax
Code. Perhaps these reforms will have to wait until we pass genuine and
effective campaign finance reform. Perhaps I should say if we pass
genuine and effective campaign finance reform. The powers that be seem
intent on preserving the money machine, so perhaps my concerns on this
front are moot.
Today, for example, we are doing another big favor for the
wealthiest Americans. So be it. The rule around this place is ``dance
with the one that brung ya,'' so let the dance continue. I am, however,
concerned that when the time comes to clean up this mess, a
constitutional amendment of this sort will make it impossible to repair
the damage.
For those smug enough to believe that the need will never arise, I
would point to just two instances in our recent experience.
First, was President Bush's now infamous ``no new taxes'' pledge in
the heat of a campaign. It was a foolish promise, no serious person
believed it, especially in light of Ronald Reagan's eight budget-
busting years. His decision to break that promise, although politically
costly, was correct. It helped restore fiscal stability. Our ability to
achieve the substantial surpluses we are now enjoying would have been
made far more difficult if we had not acted so responsibly when we did.
This amendment would have made President Bush's courageous change in
course virtually impossible.
Second is the experience of the Great State of Texas under the
stewardship of Governor Bush. His excessive tax cuts have resulted in
huge deficits in Texas. He now means to do for the nation what he has
done for the Lone Star State. He may be able to pass this boondoggle by
a slim majority. What a disaster it would be for the nation if, after a
second bout of Republican fiscal irresponsibility, Congress would have
its hand tied, and be unable to repair the damage after George W.
leaves town a second time before the consequences strike.
I am not proposing in my amendment that we reject this ill-
considered rule altogether. At this time, all I am asking is that our
ability to go back through the Code and remove only the most egregious,
industry, or company, specific loopholes not be eliminated. Cleaning up
corruption should not be held hostage to a supermajority rule. I do not
think it is too much to ask that we be allowed to have the ability to
do so when cooler heads prevail.
Chairman Sensenbrenner. The question is on the Nadler
amendment.
Those in favor will say aye.
Opposed, no.
The no's appear to have it, the no's have it.
The question----
Mr. Nadler. Can we have a rollcall on this, Mr. Chairman?
Chairman Sensenbrenner. If the gentleman demands a
rollcall, we will recess the committee until one o'clock----
Mr. Nadler. No, never mind, then.
Chairman Sensenbrenner. The no's have it.
The question is now on the motion to report the joint
resolution H.J. Res. 41 favorably. The Chair will order a
rollcall. Those in favor will signify by saying aye, those
opposed no, and the Clerk will call the roll.
The Clerk. Mr. Hyde?
[No response.]
The Clerk. Mr. Gekas?
Mr. Gekas. Aye.
The Clerk. Mr. Gekas, aye. Mr. Coble?
Mr. Coble. Aye.
The Clerk. Mr. Coble, aye. Mr. Smith?
Mr. Smith. Aye.
The Clerk. Mr. Smith, aye. Mr. Gallegly?
Mr. Gallegly. Aye.
The Clerk. Mr. Gallegly, aye. Mr. Goodlatte?
[No response.]
The Clerk. Mr. Chabot?
Mr. Chabot. Aye.
The Clerk. Mr. Chabot, aye. Mr. Barr?
Mr. Barr. Aye.
The Clerk. Mr. Barr, aye. Mr. Jenkins?
[No response.]
The Clerk. Mr. Hutchinson?
Mr. Hutchinson. Aye.
The Clerk. Mr. Hutchinson, aye. Mr. Cannon?
Mr. Cannon. Aye.
The Clerk. Mr. Cannon, aye. Mr. Graham?
Mr. Graham. Aye.
The Clerk. Mr. Graham, aye. Mr. Bachus?
[No response.]
The Clerk. Mr. Scarborough?
Mr. Scarborough. Aye.
The Clerk. Mr. Scarborough, aye. Mr. Hostettler?
[No response.]
The Clerk. Mr. Green?
Mr. Green. Aye.
The Clerk. Mr. Green, aye. Mr. Keller?
Mr. Keller. Aye.
The Clerk. Mr. Keller, aye. Mr. Issa?
Mr. Issa. Aye.
The Clerk. Mr. Issa, aye. Ms. Hart?
[No response.]
The Clerk. Mr. Flake?
Ms. Hart?
Ms. Hart. Aye.
The Clerk. Ms. Hart, aye. Mr. Flake.
Mr. Flake. Aye.
The Clerk. Mr. Flake, aye. Mr. Conyers?
Mr. Conyers. No.
The Clerk. Mr. Conyers, no. Mr. Frank?
Mr. Frank. No.
The Clerk. Mr. Frank, no. Mr. Berman?
[No response.]
The Clerk. Mr. Boucher?
[No response.]
The Clerk. Mr. Nadler?
Mr. Nadler. No.
The Clerk. Mr. Nadler, no. Mr. Scott?
Mr. Scott. No.
The Clerk. Mr. Scott, no. Mr. Watt?
Mr. Watt. No.
The Clerk. Mr. Watt, no. Ms. Lofgren?
[No response.]
The Clerk. Ms. Jackson Lee?
[No response.]
The Clerk. Ms. Waters?
[No response.]
The Clerk. Mr. Meehan?
Mr. Meehan. No.
The Clerk. Mr. Meehan, no. Mr. Delahunt?
[No response.]
The Clerk. Mr. Wexler?
[No response.]
The Clerk. Ms. Baldwin?
Ms. Baldwin. No.
The Clerk. Ms. Baldwin, no. Mr. Weiner?
Mr. Weiner. No.
The Clerk. Mr. Weiner, no. Mr. Schiff?
Mr. Schiff. No.
The Clerk. Mr. Schiff, no. Mr. Chairman?
Chairman Sensenbrenner. Aye.
The Clerk. Mr. Chairman, aye.
Chairman Sensenbrenner. Are there additional members in the
chamber who wish to change or record their vote?
The gentleman from Tennessee.
Mr. Jenkins. Aye.
The Clerk. Mr. Jenkins, aye.
Chairman Sensenbrenner. Anybody else?
If not, the Clerk will report.
The Clerk. Mr. Chairman, there are 17 ayes and 9 nays.
Chairman Sensenbrenner. And the motion to report favorably
is agreed to. Without objection, the title of the joint
resolution is amended with the amendment before all members.
Without objection, the Chairman is authorized to move to go to
conference pursuant to House rules. Also without objection, the
staff is directed to make any technical and conforming changes
and all members will be given 2 days as provided by House
rules, which means in this case April 20th, in which to submit
additional dissenting supplemental or minority views.
This completes the business before the committee and the
committee stands adjourned.
[Whereupon, at 11:52 a.m., the committee was adjourned.]
Dissenting Views
The problems with H.J. Res. 41, like past versions of the
constitutional amendment,\1\ are myriad and obvious: most
fundamentally, it undercuts the very principle our nation was
founded upon--majority rule. By requiring a supermajority to
pass certain legislation, the amendment would diminish the vote
of every Member of the House and Senate, nullifying the seminal
democratic concept of ``one person, one vote.''
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\1\ Every year during tax season beginning in 1996, the Majority
proposes a constitutional amendment to require a two-thirds vote in the
House and Senate for any legislation that increases revenues. In 2000,
H.J. Res. 94 was taken straight to the floor and failed by a vote of
234-192. In 1999, H.J. Res. 37 was taken straight to the floor and
failed by a vote of 229-199. In 1998, H.J. Res. 111 was taken straight
to the floor and failed by a vote of 238-186. In 1997, H.J. Res. 62
passed the Committee by a vote of 18-10 but failed in the full House by
a vote of 233-190. In 1996, H.J. Res. 159 was taken straight to the
floor and failed by a vote of 243-177.
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Moreover, the amendment would make it nearly impossible to
eliminate corporate tax welfare or even to increase tax
enforcement against foreign corporations. Furthermore, the
amendment could make it difficult to maintain a balanced budget
or to develop a responsible plan to restore Medicare or Social
Security to long-term financial solvency. Such an amendment
would endanger the reauthorization of excise taxes and related
fees that support important programs such as Superfund, highway
construction, and air safety. Also, the amendment is vague in
that there is no definition of ``internal revenue laws'' or
``de minimis amount.'' It is for these reasons that groups
concerned about good government and budget policy, such as
Common Cause,\2\ The Concord Coalition,\3\ Center on Budget and
Policy Priorities,\4\ Citizens for Tax Justice,\5\ the AFL-
CIO,\6\ and AFSCME,\7\ oppose the type of tax limitation
constitutional amendment that the Majority is pursuing. For
these and the reasons set forth below, we dissent from H.J.
Res. 41.
---------------------------------------------------------------------------
\2\ Letter from Scott Harshberger, President, Common Cause, to
Representatives, U.S. Congress (Apr. 4, 2001) [hereinafter Common Cause
Letter].
\3\ Letter from Robert L. Bixby, Executive Director, The Concord
Coalition, to Representatives, U.S. Congress (Apr. 2, 2001)
[hereinafter Concord Coalition Letter].
\4\ Robert Greenstein, Center on Budget and Policy Priorities, The
Constitutional Amendment to Require a Two-Thirds Supermajority to Raise
Taxes (Apr. 10, 2001) [hereinafter Greenstein Report].
\5\ Letter from Robert S. McIntyre, Director, Citizens for Tax
Justice, to Representatives, U.S. Congress (Apr. 11, 2000) [hereinafter
CTJ Letter].
\6\ Letter from Peggy Taylor, Dep't of Legislation, AFL-CIO, to
Representatives, U.S. Congress (Apr. 11, 2000) [hereinafter AFL-CIO
Letter].
\7\ Letter from Charles M. Loveless, Director of Legislation,
AFSCME, to Representatives, U.S. Congress (Apr. 10, 2000) [hereinafter
AFSCME Letter].
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I. The Amendment Disregards the Constitutional Principle of Majority
Rule
The framers of the Constitution wisely rejected the
principle of requiring a supermajority for basic government
functions.\8\ James Madison vehemently argued against
supermajorities, stating that, under such a requirement, ``the
fundamental principle of free government would be reversed. It
would be no longer the majority that would rule: the power
would be transferred to the minority.'' \9\
---------------------------------------------------------------------------
\8\ It is significant to note that, because of population patterns,
Senators representing some 7.3% of the population could prevent a bill
from obtaining a two-thirds majority. See U.S. Census Bureau, U.S.
Dep't of Commerce, 1996 Population Estimates (Dec. 30, 1996) (Press
Release CB-96-244).
\9\ The Federalist Paper No. 58, at 393 (James Madison) (The
Belknap Press of Harvard University, 1961); see also Common Cause
Letter at 1. At a Constitution Subcommittee hearing during the 104th
Congress, Rep. Henry J. Hyde (R-IL), Chair of the House Committee on
the Judiciary, echoed this concern:
I am troubled by the concept of divesting a Member of the
full import or his or her vote. You are diluting the vote
of Members by requiring a supermajority of them to do
something as basic to government as acquire the revenue to
run government. It is a diminution. It is a disparagement.
It is a reduction of the impact, the import, of one man,
---------------------------------------------------------------------------
one vote.
Proposing An Amendment to the Constitution of the United States to
Require Two-Thirds Majorities for Bills Increasing Taxes: Hearing on
H.J. Res. 159 Before the Subcomm. on the Constitution of the House
Comm. on the Judiciary, 104th Cong., 2d Sess. 107 (1996).
Adopting a supermajority tax requirement would repeat the
very mistakes made in the 1780's under the Articles of
Confederation, which required a vote of nine of the thirteen
States to raise revenue. It is because this system worked so
poorly that the founding fathers sought to fashion a national
government that could operate through majority rule.\10\
---------------------------------------------------------------------------
\10\ Proposing An Amendment to the Constitution with Respect to Tax
Limitations on H. J. Res. 62 Before the Subcomm. on the Constitution of
the House Comm. on the Judiciary, 105th Cong. 1st Sess. (1997)
[hereinafter 1997 Judiciary Committee Hearing] (statement of Robert
Greenstein, Executive Director, Center on Budget and Policy
Priorities).
---------------------------------------------------------------------------
Supporters of a tax limitation amendment have sought to
justify the departure from majority rule by pointing to other
provisions in the Constitution that require a two-thirds vote,
such as approving a treaty or obtaining a conviction in a
congressional impeachment trial.\11\ This argument, however,
overlooks the fact that none of these supermajority
requirements pertains to the day-to-day operations of the
government--limiting such congressional authority is an
invitation to gridlock.
---------------------------------------------------------------------------
\11\ There are eleven matters for which a supermajority vote is
required under the Constitution: Art. I, Sec. 2, cl. 2 (ratification of
a treaty); Art. I, Sec. 3, cl. 6 (conviction in impeachment trials);
Art. I, Sec. 5, cl. 2 (expulsion of a Member of Congress); Art. 1,
Sec. 7, cl. 2 (override a Presidential veto); Art. II, Sec. 1, cl. 3
(quorum of two-thirds of the States to elect the President); Art. II,
Sec. 2, cl. 2 (consent to a treaty); Art. V (proposing constitutional
amendments); Art VII (State ratification of the original Constitution);
amendment XII (quorum of two-thirds of the States to elect the
President and the Vice President); amendment XIV, Sec. 3 (to remove
disability); and amendment XXV, Sec. 4 (removal of President for
disability).
---------------------------------------------------------------------------
Supporters of the measure also claim that, because fourteen
States have adopted some form of a supermajority vote
requirement for tax increases, the Federal Government also
should have one. This argument bears little relation to the
current debate. First, it is inappropriate to compare a State's
revenue needs with the more comprehensive obligations of the
Federal Government (such as economic policy and disaster
assistance). In addition, many of the State requirements apply
to particular types of taxes and do not apply to all or even
the principal means of raising State tax revenue. For example,
Florida's supermajority requirement applies only to corporate
income taxes; exempt from the requirement is the sales tax on
the purchase of goods--the primary source of the State's
revenues.\12\
---------------------------------------------------------------------------
\12\ See 26 Fla. Stat. Ann. V. Sec. 1(e) (West 1970). As Rep. Bobby
Scott (D-VA) noted during the Committee's markup debate, California
acts simultaneously on taxes and spending cuts through the annual
budget process, which considerably diminishes the supermajority's
impact on tax increases because both spending increases and tax
increases are subject to the same supermajority requirement. It is also
important to note that total tax receipts collected by the Federal,
State, and local governments (as a percentage of gross domestic
product) in the United States (30.8% in 2000)--is lower than almost all
of the other major industrialized countries (Japan: 30.5%; Germany:
45.6%; France: 49.8%; Italy: 45.9%; United Kingdom: 40.3%; Canada:
42.5%). See Gregg A. Esenwein, Congressional Research Service, U.S.
Library of Congress, The U.S. Fiscal Position Compared to Selected
Industrial Nations, (CRS Report RL30560, May 19, 2000). Moreover,
Federal tax revenue, as a percentage of gross domestic product, was 20%
in 1999 and has remained near that level since 1960. See Gregg A.
Esenwein, Congressional Research Service, U.S. Library of Congress,
Recent Trends in the Federal Tax Burden (CRS Report RS20059, Mar. 27,
2000).
---------------------------------------------------------------------------
In addition, arguments by proponents that seven States that
have had a supermajority tax requirement \13\ have enjoyed more
rapid economic growth also are misleading.\14\ A study by the
Center on Budget and Policy Priorities found that such analysis
was ``simplistic'' and ``flawed.'' \15\ This study found that,
by some measures, supermajority States had lower economic
growth and more tax increases than other States.\16\ For
example, between 1979 and 1989, four of the seven States had
lower than average economic growth as measured by State gross
domestic product; five of the seven States experienced lower
than average growth when measured by changes in per capita
income; and six of the seven States had higher than average
increases in State and local revenues as a percentage of
residents' income.\17\ Obviously, there are many factors that
impact State growth other than supermajority tax requirements,
including a State's educational system and the skill of its
workforce.
---------------------------------------------------------------------------
\13\ Arkansas, California, Delaware, Florida, Louisiana,
Mississippi, and South Dakota.
\14\ See 1997 Judiciary Committee Hearing (statement of Daniel J.
Mitchell, The Heritage Foundation).
\15\ Iris J. Lav & Nicholas Johnson, Center on Budget and Policy
Priorities, Do States with Supermajorities Have Smaller Tax Increases
or Faster Economic Growth than Other States? (Apr. 10, 1997).
\16\ Id. at 1.
\17\ Id. at 1-2.
---------------------------------------------------------------------------
II. The Amendment Would Make it Difficult to Close Tax Loopholes
In addition, H.J. Res. 41 will make it nearly impossible to
eliminate tax loopholes, thereby locking in the current tax
system at the time of ratification. As Dean Samuel Thompson,
one of the nation's leading tax law authorities, observed at a
1997 House Judiciary Subcommittee hearing on the proposal:
The core problem with this proposed Constitutional
amendment is that it would give special interest groups
the upper hand in the tax legislative process. Once a
group of taxpayers receives either a planned or
unplanned tax benefit with a simple majority vote of
both Houses of Congress, the group will then be able to
preserve the tax benefit with just a 34% vote of one
House of Congress.\18\
---------------------------------------------------------------------------
\18\ 1997 Judiciary Committee Hearing (statement of Samuel
Thompson, Dean, University of Miami School of Law).
The potential revenue loss to the Treasury Department from
such loopholes is staggering. A Congressional Budget Office
study found that over half of the corporate subsidies the
Federal Government provides are delivered through ``tax
expenditures.'' \19\ Such expenditures were estimated to cost
the Federal Government $455 billion in fiscal year 1996 alone--
triple the deficit at the time, and a full two-and-one-half
times as much as all means-tested entitlement programs
combined.\20\
---------------------------------------------------------------------------
\19\ Congressional Budget Office, Congress of the United States,
Federal Financial Support of Business (July 1995). ``Tax expenditures''
are provisions of the tax code that selectively reduce the tax
liability of particular individuals or businesses. See also Office of
Management and Budget, Analytical Perspectives: Budget of the U.S.
Government for Fiscal Year 2002 61 (Apr. 9, 2001).
\20\ Citizens for Tax Justice, The Hidden Entitlements (May 1996).
According to Internal Revenue Service documents, drastic staff
reductions have prevented it from pursuing individuals whose failure to
pay taxes cost the Federal Government approximately $2.5 billion in
2000. David Cay Johnston, A Smaller IRS Gives up on Billions in Back
Taxes, N.Y. Times, Apr. 13, 2001, at A1; see also The Cost of Ignoring
Tax Evasion, N.Y. Times, Apr. 16, 2001. Those documents show that,
since 1992, IRS audits have fallen by two-thirds because the agency's
staff has fallen from 115,000 to 97,000 in 8 years.
---------------------------------------------------------------------------
In this regard, a 2001 study by the Institute on Taxation
and Economic Policy shows that corporate tax breaks permitted
at least forty-one companies to pay less than zero dollars in
taxes in at least 1 year between 1996 and 1998--these companies
actually got tax rebates totaling $3.2 billion from the Federal
Government.\21\ Eleven of these companies actually had negative
Federal tax rates every year from 1996 to 1998.\22\ Not
surprisingly, the industry enjoying the lowest tax rates during
this 3-year period was the oil industry.\23\
---------------------------------------------------------------------------
\21\ Institute on Taxation and Economic Policy, Corporate Income
Taxes in the 1990's 2 (2001) [hereinafter ITEP Report]. For example,
Lyondell Chemical had 1998 profits of $80 million, but its tax was
negative $44 million (tax rate of negative 55%); Texaco had 1998
profits of $182 million, but its tax was negative $67.7 million (tax
rate of negative 37.2%); and Chevron had 1998 profits of $708 million,
but its tax was negative $186.8 million (tax rate of negative 26.4%).
\22\ Id. For example, Goodyear's average tax rate for the years
1996 to 1998 was negative 9.9%, Texaco's was negative 8.8%, and Ryder's
was negative 6.2%.
\23\ Id. at 4.
---------------------------------------------------------------------------
Furthermore, these loopholes affect State governments as
well as the Federal Government. The same study by the Institute
on Taxation and Economic Policy states that:
The loopholes that reduce Federal corporate income
taxes cut State corporate income taxes, too, since
State corporate tax systems generally take Federal
taxable income as their starting point in computing
taxable corporate profits. . . . It's a mathematical
truism that low and declining State revenues from
corporate income taxes means higher State taxes on
other State taxpayers or diminished State and local
public services.\24\
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\24\ Id. at 11.
In addition, the tax limitation amendment would make it
exceedingly difficult to make foreign corporations pay their
fare share of taxes on income earned in this country. Congress
would even be limited from changing the law to increase
penalties against foreign multinationals who avoid U.S. taxes
by claiming that profits earned in the United States were
realized in offshore tax havens. Estimates of the costs of such
tax dodges are also significant; a 1992 Internal Revenue
Service study estimated that foreign corporations misreported
information on their tax returns at a cost of $30 billion per
year.\25\
---------------------------------------------------------------------------
\25\ The IRS also found that on average, foreign companies report
only 40% of what comparable American companies reported in taxes. See
Department of the Treasury's Report on Issues Related to the compliance
with U.S. Tax Laws By Foreign Firms Operating in the United States:
Hearing Before the Subcomm. on Oversight of the House Ways and Means
Comm. 102d Cong., 2d Sess. 7 (1992) [hereinafter 1992 Ways and Means
Committee Hearing] (statement of Rep. Pickle, Chairman, Subcommittee on
Oversight).
---------------------------------------------------------------------------
The problem is particularly acute in the automobile and electronics
industries. For example, of foreign automotive company tax returns
reviewed in a congressional study, 28% showed no taxes due, even though
these firms reported sales of nearly $27 billion. One foreign auto
company had $3.4 billion in sales over 2 years and paid no taxes. Of
the foreign electronics companies reviewed in the study, 40% paid no
U.S. income tax whatsoever, though they reported sales of almost $30
billion. One electronics firm sold $2.4 billion of products over 8
years and paid no taxes. Another company had sales of more than $9.4
billion in the United States and paid $156 in taxes. Id.
Furthermore, adoption of H.J. Res. 41 would make it even
more onerous than it already is to repeal or limit statutorily-
permitted foreign tax credits or deferrals of taxes on
unrepatriated foreign profits.\26\ Estimates regarding how much
the deferral provision costs U.S. taxpayers easily reach into
the billions.\27\ Congress's Joint Committee on Taxation
predicted that the loophole would cost $800 million in 2001,
while the Treasury Department found the total to be $1.4
billion.\28\ Furthermore, a Congressional Budget Office
forecast expects taxpayers to lose $3.8 billion per year by
2011, while the publication Tax Notes estimated the loss to be
$10 billion per year.\29\
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\26\ The foreign tax credit allows U.S.-based multinational
corporations to reduce their taxes in this country by one dollar for
every dollar of taxes they pay overseas. 26 U.S.C. Sec. Sec. 27, 33.
This favorable treatment contrasts sharply with the treatment of nearly
every other business expense--whether it be wages or taxes paid to
State or local governments here in the United States. The foreign
deferral provision, vehemently opposed by the Clinton Treasury
Department, allows U.S. corporations to pay no income taxes on the
profits of their foreign subsidiaries unless and until such profits are
remitted to the U.S. parent. 26 U.S.C. Sec. Sec. 11(d), 882, 901, 951.
If profits are never paid as dividends to the parent, taxes never
become due in the United States, amounting to an interest-free loan
from U.S. taxpayers.
\27\ Sam Loewenberg, Business Eyes Tax Break on Foreign Profit,
Legal Times, Feb. 26, 2001, at 1.
\28\ Id.
\29\ Id.
---------------------------------------------------------------------------
Not only do these loopholes cost individual taxpayers
desperately-needed funds--they cost our workers jobs.\30\ While
in the past U.S. companies have laid off workers in the United
States to cut costs, they have hired additional workers
overseas to take advantage of tax provisions requiring the
payment of taxes on foreign profits only if those profits are
repatriated to the United States.
---------------------------------------------------------------------------
\30\ See AFL-CIO Letter. Since 1979, we have lost almost 3 million
manufacturing jobs in this country. See Bureau of Labor Statistics,
U.S. Dep't of Labor, Current Employment Statistics Program (Apr. 4,
1997). During the economic downturn of the mid-1990's, we lost 26,000
manufacturing jobs per month--the equivalent of shutting down one
Fortune 500 company every 30 days. Id. At the same time, the number of
overseas jobs with U.S.-based manufacturing companies skyrocketed. For
example, there are nearly 40,000 foreign workers working for U.S.
corporations in Singapore alone. The Wall Street Journal has reported
in the past that nearly half of the export jobs in China are linked to
U.S.- and other multinational-based companies. See Joseph Kahn,
Foreigners Help Build China's Trade Surplus, Wall St. J., Apr. 7, 1997,
at A1.
---------------------------------------------------------------------------
In rejecting these arguments, the Majority has attempted to
argue that, under a tax limitation amendment, a two-thirds
majority would not necessarily be required if the elimination
of the loophole was linked to other tax cuts so that the
overall bill was revenue neutral.\31\ Although it is not
entirely clear the amendment would operate in such a
fashion,\32\ even if it did, this interpretation would prevent
using the funds raised from the elimination of such loopholes
for any reason other than providing for tax cuts. For example,
such revenues could not be used for debt reduction, disaster
assistance, education, Medicare, or Social Security. There is
simply no legitimate policy reason to link a bill raising taxes
on foreign corporations or eliminating abusive loopholes with
any additional Federal tax changes.\33\
---------------------------------------------------------------------------
\31\ H.R. Rep. No. 50, 105th Cong., 1st Sess. 7-8 (1997) (House
Committee on the Judiciary report on H.J. Res. 62).
\32\ 1997 Judiciary Committee Hearing (``It is not clear from the
text of H.J. Res. 62 [a prior tax limitation amendment] whether . . .
it would only apply to a bill that leads on an over-all basis to an
increase in tax.'') (statement of Dean Thompson).
\33\ Markup of H.J. Res. 41, House Comm. on the Judiciary, 107th
Cong., 1st Sess. (2001) [hereinafter H.J. Res. 41 Markup].
Unfortunately, the Majority rejected by voice vote an amendment offered
by Rep. Jerrold Nadler (D-NY) to exclude from the supermajority
requirement any measures that closed corporate tax loopholes. The
amendment added at the end of the resolution the following: ``The
requirements of this article do not apply to any bill, resolution, or
other legislative measure repealing or reducing any industry-specific
exemptions, deductions, or credits.''
---------------------------------------------------------------------------
Incredibly, under the Majority's proposal, even measures
that raised revenue by improving tax enforcement would require
a two-thirds majority vote.\34\ As a result, new anti-fraud
provisions or even a program of stepped-up enforcement against
foreign multinationals who avoid U.S. taxes would be subject to
a supermajority requirement.
---------------------------------------------------------------------------
\34\ Rep. Nadler offered an amendment that would have exempted from
the provisions of the tax limitation amendment any measures designed to
improve revenue enforcement, but the Majority rejected it on a voice
vote. Id. The amendment added at the end of the resolution the
following: ``The requirements of this article do not apply to any bill,
resolution, or other legislative measure designed to improve
enforcement of the internal revenue laws.''
---------------------------------------------------------------------------
III. The Amendment Could Lead to Large Cuts in Social Security and
Medicare and a Return to Deficit Spending
In addition, H.J. Res. 41 could lead to large reductions in
Social Security and Medicare benefits. As the Washington Post
previously noted:
When the baby boomers begin to retire not that many
years from now, the country will be in an era of
constant fiscal strain. To avoid destructive deficits,
there will have to be tax increases and/or spending
cuts. By making it harder to increase taxes, the
amendment would compound the pressure on the major
spending programs: Social Security, Medicare, Medicaid
and the rest. Is that what Congress really wants to do?
The pressure on those programs is great enough as it
is.\35\
---------------------------------------------------------------------------
\35\ Show Vote on Tax Day, Wash. Post, Apr. 9, 1997, at A20
(editorial).
Democratic Members offered an amendment to ensure that
measures designed to secure the financial solvency of Social
Security would not be subject to the supermajority requirement,
but the Majority defeated it on a party-line vote of 8-16.\36\
---------------------------------------------------------------------------
\36\ H.J. Res. 41 Markup. Rep. Barney Frank (D-MA) offered an
amendment that added at the end of the resolution the following: ``The
requirements of this article do not apply to any bill, resolution, or
other legislative measure necessary to preserve the solvency of the
Federal Old Age and Survivors Insurance Trust Fund.''
---------------------------------------------------------------------------
Also, the proposed tax limitation would rule out measures
to raise Medicare premiums for higher income individuals' as
well as modest measures to shore up Social Security and
Medicare.\37\ For example, if Congress attempted to make Social
Security payroll taxes more progressive, such as by imposing
higher tax rates on higher-income individuals, there would be
an increase in the revenue laws and the supermajority
requirement would be triggered.\38\ Indeed, when the Republican
budget reconciliation bill reached the House floor in the fall
of 1995, it became clear that its proposed increase in Medicare
premiums for those at higher income levels constituted a tax
increase.
---------------------------------------------------------------------------
\37\ Unfortunately, the tax burden in recent years has fallen
mainly on income and Medicare and Social Security payroll taxes. ITEP
Report at 10 (``In fiscal years 1997-99, personal income tax payments
grew by 28 percent and Social Security and Medicare payroll taxes on
wages grew by 22 percent. But corporate income tax payments went up by
a total of only 8 percent over the 3 years, and actually fell from
fiscal 1998 to fiscal 1999.'').
\38\ Payroll taxes for Social Security are capped for the year 2001
to the first $80,400 of income and are imposed on all taxpayers at the
same rate. David Koitz, U.S. Library of Congress, Congressional
Research Service Report: Social Security and Medicare Premiums--A Fact
Sheet (CRS Report 94-28 EPW, Jan. 4, 2001). The effect of this is that
lower-income taxpayers pay a higher percentage of their salaries for
Social Security.
---------------------------------------------------------------------------
Similarly, legislation expanding Social Security to include
State and local government employees--which the Advisory
Council for Social Security has proposed--would result in a
revenue increase and would therefore be subject to the two-
thirds requirement.\39\
---------------------------------------------------------------------------
\39\ See Greenstein Report.
---------------------------------------------------------------------------
Another dangerous byproduct of H.J. Res. 41 could be a
return to deficit spending. As the Center on Budget and Policy
Priorities testified:
The amendment would make it virtually impossible to
amass the two-thirds majority required to pass large
deficit reduction packages that include both reductions
in Federal programs and measures to raise revenue. As a
result, the amendment would erect serious new barriers
to long-term deficit reduction.\40\
---------------------------------------------------------------------------
\40\ 1997 Judiciary Committee Hearing (statement of Robert
Greenstein). Between 1982 and 1993, five pieces of legislation that
raise significant revenue were enacted. The Tax Equity and Fiscal
Responsibility Act of 1982, passed the House by a vote of 226-207. The
1987 Social Security rescue plan was passed by a vote of 282-148. The
Omnibus Budget Reconciliation Act of 1987, a product of bipartisan
negotiations that contained both spending cuts and revenue increases,
passed by a vote of 237-181, and the Omnibus Budget Reconciliation Act
of 1993 passed by a slender vote of 218-216.
It is for these reasons that the nation's perhaps most
credible advocate of deficit reduction--the bipartisan Concord
Coalition--strongly opposes a supermajority tax requirement. In
its view, ``enactment of [a tax limitation] constitutional
amendment would unduly complicate the budget process. . . . No
area of the budget--on either the spending or the revenue
side--should receive preferential treatment such as requiring
supermajority votes.'' \41\
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\41\ Concord Coalition Letter at 1.
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IV. The Amendment Will Endanger Excise Taxes that Fund Public Safety
and Environmental Programs.
Another problem with this tax limitation amendment is that
there are many important public safety programs funded by
excise taxes whose extension would be subject to a
supermajority vote. Many such excise taxes are dedicated to
purposes such as transportation trust funds, Superfund, and
compensation for health damages.\42\ H.J. Res. 41 would apply
to excise taxes on alcohol, tobacco, and pensions, as well as a
variety of environmental taxes.\43\
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\42\ See James V. Saturo & Louis Alan Talley, U.S. Library of
Congress, Congressional Research Service Report: Tax Limitations
Proposals--An Assessment of the Issues and Options Together With the
Major Tax Acts, Votes, and Revenue Effects (CRS Report 97-372 E, March
20, 1997); see also 1997 Judiciary Committee Hearing (statement of Rep.
Charles Rangel (D-NY), Ranking Member, House Comm. on Ways and Means).
\43\ See generally 26 U.S.C. Chapters 31-47, 51-54.
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Former White House Counsel Lloyd Cutler explained the
difficulties a supermajority tax requirement could cause in the
context of extending such taxes:
Today a simple majority of the Senate and House could
restore the [expired airline ticket tax]. . . . But
under the proposed amendment, it would take 67 of the
100 senators and 290 of the 435 congressmen to restore
this tax which, having expired on December 31, 1995,
would clearly be a ``new'' tax covered by the
amendment.\44\
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\44\ A Proposed Constitutional Amendment To Require A Two-Thirds
Vote to Increase Taxes: Hearing on S.J. Res. 49 Before the Subcomm. on
the Constitution, Federalism and Property Rights of the Sen. Comm. on
the Judiciary, 104th Cong., 2d Sess. (1996) (statement of Lloyd
Cutler).
In an effort to carve-out at least one important program
from the onerous supermajority requirement, Democratic Members
offered an amendment that would have excluded from the
supermajority requirement any measures that imposed
environmental taxes; again, the Majority rejected it.\45\
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\45\ H.J. Res. 41 Markup. Rep. Jackson Lee offered an amendment
that added at the end of the resolution the following: ``The
requirements of this article do not apply to any bill, resolution, or
other legislative measure that imposes an environmental tax, fee,
charge, or assessment.'' The amendment was defeated on a voice vote.
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V. The Amendment is Vague and Could Transfer Significant Authority to
the Courts
H.J. Res. 41 will present a variety of new and complex
interpretational difficulties. Most notably, there is no
definition of the term ``internal revenue laws,'' a new term of
art with no legislative antecedent.\46\ For example, although
proponents of similar proposals have contended in the past that
there is a clear distinction between ``taxes'' (which they
believe are ``internal revenue'') and ``user fees'' (which they
believe are not ``internal revenue''),\47\ this is a
distinction without any meaningful difference in practice. As
Richard Darman, Director of the White House Office of
Management and Budget under President Reagan, acknowledged,
``[i]f it looks like a duck and walks like a duck and quacks
like duck, it is a duck, [and] euphemisms like user fees will
not fool the public.'' \48\
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\46\ Proponents' arguments that the courts can resolve the meaning
of such open-ended terms in the same way they have ``equal protection''
and ``due process'' also miss the point. The courts are the most
appropriate body to protect such individual rights and liberties from
government excesses in these areas. On the other hand, judging the
policy value of tax legislation is an inherently political judgment and
should not involve the judiciary.
\47\ H.R. Rep. No. 50 at 3.
\48\ See Hearing on Nomination of Richard Darman to be the Director
of the Office of Management and Budget Before the Senate Comm. on
Governmental Affairs, 101st Cong., 1st Sess. (1989). The amendment's
authors allowed for a loophole of potentially massive dimensions when
they stated that efforts to adjust the Consumer Price Index--which
would reduce indexing for tax brackets--would not constitute a change
in ``internal revenue.'' (Transcript at 39 (``under the [revised]
language [reducing the CPI] would not [require a two-thirds vote],
because that would not be a change to the internal revenue laws.'')
Under this interpretation, legislation such as that offered by Sen.
William Roth (R-DE), Chair of the Senate Finance Committee, reducing
CPI adjustments by 1.1% per year--and which Congressional Budget Office
estimated would increase income taxes by $22.8 billion per year in 2002
and more than double that by 2006--would not constitute an increase in
``internal revenue.'' See S. 2, 105th Cong., 1st Sess. (1997).
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Another definitional problem arises from the fact that it
is unclear how and when the so-called ``de minimis'' increase
is to be measured, particularly in the context of a $1.5
trillion annual budget.\49\ Would we look at a one, five, or
10-year budget window? What if a bill resulted in increased
revenues in years one and two, but lower revenues thereafter?
It is also unclear when the revenue impact is to be assessed--
based on estimates prior to the bill's effective date, or
subsequent determinations calculated many years out. Further,
if a tax bill was found retroactively to be unconstitutional,
the tax refund issues could present insurmountable logistical
and budget problems.\50\
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\49\ See, e.g., Concord Coalition Letter at 1.
\50\ Jim Miller, Director of the White House Office of Management
and Budget under President Reagan, testifying on behalf of the Citizens
for a Sound Economy, stated that the ``de minimis'' requirement should
be taken out. See 1997 Judiciary Committee Hearing.
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All of these ambiguities point to one of the most serious
problems inherent in H.J. Res. 41: uncertainty regarding the
branch of government vested with responsibility for interpeting
and enforcing the amendment's requirements. If H.J. Res. 41 is
read to authorize judicial interpretation and enforcement,
courts would be drawn into fundamental policy disputes best
left to the Congress; \51\ on the other hand, if judicial
enforcement is unavailable, those seeking redress for
improperly-imposed tax increases would be left without a
meaningful remedy, undermining the public's faith in the
Constitution. Moreover, it is doubtful the public would approve
of Congress selecting an unelected official, such as the head
of the Congressional Budget Office, to police these matters.
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\51\ In the event judicial review is invoked, the proposed tax
limitation amendment would raise difficult questions concerning
standing. For example, it would be unclear whether a taxpayer whose
taxes were raised would be able to show sufficient harm to constitute a
``case or controversy'' or whether it would be necessary for a Member
or a whole House of Congress to bring the legal challenge. See Balanced
Budget Constitutional Amendment: Hearing before the Subcomm. on the
Const. of the House Comm. on the Judiciary, 104th Cong., 1st Sess. 229
(1995) (statement of Walter Dellinger, Asst. Attorney General, Office
of Legal Counsel, U.S. Dep't of Justice). To avoid these complications,
Rep. Melvin L. Watt (D-NC) offered an amendment to ensure the courts
did not get involved in this political question. The amendment stated:
``This article shall not be construed as to give the Judicial Branch
any authority except to declare whether the Legislative Branch is in
compliance herewith.'' The Majority rejected it on a party-line vote of
9-16.
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VI. The Majority Frequently Has Waived Its Own House Rules Requiring a
Supermajority Vote to Increase Taxes
The unworkability of H.J. Res. 41 is illustrated by the
fact that the Majority frequently has ignored its own House
rule preventing tax rate increases from taking effect unless
approved by three-fifths of the House.\52\ In the 104th
Congress, the Majority ignored or waived this three-fifths
requirements for tax increases on six separate occasions.\53\
As Rep. Charles Stenholm (D-TX) wrote in the Washington Post:
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\52\ House rule XXI 5(c), 104th Cong., 1st Sess. (1995).
\53\ On April 5, 1995, during the consideration of H.R. 1215, the
Contract with America Tax Relief Act, the House Parliamentarian ruled
that the new House rule did not apply to the bill even though H.R. 1215
would have repealed the current 50% exclusion for capital gains from
sales of certain small business stock. The net effect of H.R. 1215 was
to increase the maximum rate of tax on those gains from 14% (50%
inclusion times 28% top rate) to 19.8%. All seem willing to concede now
that the ruling was erroneous. Even Speaker Newt Gingrich (R-GA) in a
June 27, 1995 letter, responding to an inquiry by Reps. Jim Gibbons (R-
NV), Joe Moakley (D-MA), and Richard Gephardt (D-MO), conceded that the
ruling did not seem ``either satisfactory or overly compelling.''
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On October 26, 1995, the Republicans waived the House rule for
consideration of H.R. 2491, the FY 1996 budget reconciliation bill and
its conference report. The bill contained several tax rate increases.
On October 19, 1995, the Republicans waived the House rule for
consideration of H.R. 2425, the Medicare Preservation bill (which would
have imposed additional taxes on withdrawals from MedicarePlus Medical
Savings Accounts and premium increases on high-income Medicare
beneficiaries).
On March 28, 1996, the Republicans waived the House rule for
consideration of H.R. 3103, the Health Coverage Availability and
Affordability bill (imposing additional taxes on withdrawals from
Medical Savings Accounts).
On May 22, 1996, the Republicans waived the House rule for
consideration of the Small Business Protection Act.
On July 31, 1996, the House rule was waived for the Personal
Responsibility and Work Opportunity Reconciliation Act of 1995
(possible increases in the earned income tax credit program).
[T]he final blow to any hope that the vote [on the
supermajority tax requirement] might be for real comes
from the dismal adherence Republicans have made to
their own internal House rule requiring a three-fifths
vote to raise taxes. After much fanfare during the
organization of the 104th Congress, the House
leadership has waived its own effort to restrain itself
in every potential instance except one.\54\
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\54\ Charles Stenholm, An Amendment Without a Prayer, Wash. Post,
Apr. 15, 1996, at A21.
In an attempt to avoid these problems, at the beginning of
the 105th Congress, the House rule was significantly narrowed
to limit its application to increases in particular tax rates
specified under the Internal Revenue Code, rather than tax rate
increases generally.\55\ Such experiences highlight the
unworkability of setting forth special procedural rules
concerning tax laws and tax rates and these problems would be
greatly compounded in a constitutional context.
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\55\ House rule XXI 5(c), 105th Cong., 1st Sess. (1997).
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CONCLUSION
Few measures demonstrate the Majority's inability to
understand issues of real importance to the American people
like this tax limitation amendment. Year after year, this
amendment is brought to the House floor, and year after year it
fails. In the meantime, there has been no congressional action
on real issues that affect real people, such as a patients'
bill of rights, prescription drug benefits for seniors, or a
minimum wage increase. For these reasons, we respectfully
dissent.
John Conyers, Jr.
Barney Frank.
Howard L. Berman.
Jerrold Nadler.
Robert C. Scott.
Zoe Lofgren.
Sheila Jackson Lee.
Maxine Waters.
William D. Delahunt.
Tammy Baldwin.
Anthony D. Weiner.