[House Report 108-496]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-496

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PROVIDING FOR CONSIDERATION OF H.R. 4359, CHILD CREDIT PRESERVATION AND 
                         EXPANSION ACT OF 2004

                                _______
                                

May 17, 2004.--Referred to the House Calendar and ordered to be printed

                                _______
                                

Ms. Pryce of Ohio, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 644]

    The Committee on Rules, having had under consideration 
House Resolution 644, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    Tthe resolution provides for the consideration of H.R. 
4359, the Child Credit Preservation and Expansion Act of 2004, 
under a modified closed rule. The rule provides one hour of 
debate in the House equally divided and controlled by the 
chairman and ranking minority member of the Committee on Ways 
and Means.
    The rule provides for consideration of the amendment in the 
nature of a substitute printed in this report, if offered by 
Representative Rangel of New York or his designee, which shall 
be considered as read, and shall be separately debatable for 
one hour equally divided and controlled by the proponent and an 
opponent. The rule waives all points of order against the 
amendment printed in this report.
    Finally, the rule provides one motion to recommit with or 
without instructions

                   SUMMARY OF AMENDMENT MADE IN ORDER

    (Summary derived from information provided by the amendment 
sponsor.)
    Rangel: Amendment in the Nature of a Substitute. Extends 
the $1,000 child tax credit and includes the two low-income 
benefits just as contained in H.R. 4359. Does not increase 
income limits on credit. Repeals current inflation adjustment, 
which increases the threshold at which low-income taxpayers 
become eligible and implements new inflation adjustment to the 
$1,000 per child credit. Includes a temporary rate adjustment 
(through 2010) that applies to incomes over $1 million 
($500,000 for single taxpayers). The rate adjustment would be 
2.75% for incomes over that level. Conditions the repeal of the 
subset on Congress meeting certain budgetary goals. Congress 
would be required to enact budget legislation that balances the 
budget by FY 2014 (without using Social Security and Medicare 
trust funds).

                    TEXT OF AMENDMENT MADE IN ORDER

  Strike all after the enacting clause and insert the 
following:

SECTION 1. INCREASE IN AND EXPANSION OF CHILD TAX CREDIT.

  (a) In General.--Subsection (a) of section 24 of the Internal 
Revenue Code of 1986 (relating to child tax credit) is amended 
to read as follows:
  ``(a) Allowance of Credit.--There shall be allowed as a 
credit against the tax imposed by this chapter for the taxable 
year with respect to each qualifying child of the taxpayer an 
amount equal to $1,000.''.
  (b) Adjustment of Credit Amount for Inflation.--Section 24 of 
such Code is amended by adding at the end the following new 
subsection:
  ``(g) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 2005, the $1,000 amount 
contained in subsection (a) shall be increased by an amount 
equal to--
          ``(1) such dollar amount, multiplied by
          ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the 
        taxable year begins,
determined by substituting `calendar year 2004' for `calendar 
year 1992' in subparagraph (B) thereof. Any increase determined 
under the preceding sentence shall be rounded to the nearest 
multiple of $50.''.
  (c) Restoration of $10,000 Threshold for Refundable Portion 
of Credit.--Subsection (d) of section 24 of such Code is 
amended by striking paragraph (3).
  (d) Acceleration of Increase in Refundable Portion of 
Credit.--Clause (i) of section 24(d)(1)(B) of such Code is 
amended by striking ``(10 percent in the case of taxable years 
beginning before January 1, 2005)''.
  (e) Combat Pay Taken Into Account in Determining Refundable 
Portion of Credit.--Paragraph (1) of section 24(d) of such Code 
is amended by adding at the end the following new sentence: 
``For purposes of subparagraph (B), any amount excluded from 
gross income by reason of section 112 shall be treated as 
earned income which is taken into account in computing taxable 
income for the taxable year.''.
  (f) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2003.
  (g) Repeal of Sunset.--Title IX of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 shall not apply to the 
provisions of, and amendments made by, sections 201 and 203 of 
such Act.

SEC. 2. BENEFITS EXTENSION NOT TO INCREASE FEDERAL BUDGET DEFICIT.

  (a) In General.--Section 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection:
  ``(j) Additional Tax on High Income Taxpayers.--In the case 
of taxable years beginning in calendar year 2005, 2006, 2007, 
2008, 2009, or 2010, the amount determined under subsection 
(a), (b), (c), or (d), as the case may be, shall be increased 
by 2.75 percent of so much of adjusted gross income as exceeds 
$1,000,000 in the case of individuals to whom subsection (a) 
applies ($500,000 in any other case).''
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 3. REQUIREMENT THAT CONGRESS BALANCE THE BUDGET WITHOUT USING THE 
                    MEDICARE AND SOCIAL SECURITY TRUST FUNDS.

  (a) In General.--Notwithstanding the provisions of section 1 
of this Act and any other provision of law, title IX of the 
Economic Growth and Tax Relief Reconciliation Act of 2001 shall 
take effect in the form as originally enacted unless Congress 
meets the requirements of subsection (b).
  (b) Requirements.--Congress meets the requirements of this 
subsection if--
          (1) before September 1, 2010, Congress has enacted 
        comprehensive Federal budget legislation, and
          (2) the Director of the Office of Management and 
        Budget certifies in September of 2010 that such 
        legislation--
                  (A) will result in a balanced Federal budget 
                by fiscal year 2014, determined by taking in to 
                account the costs of the foregoing provisions 
                of this Act and without taking into account the 
                receipts and disbursements of the Social 
                Security and Medicare Trust Funds, and
                  (B) will substantially reduce the United 
                States Government's reliance on Foreign central 
                bank purchases of its debt obligations.

                                  
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