To amend the Internal Revenue Code of 1986 to permanently extend the marriage penalty relief provided under the Economic Growth and Tax Relief Reconciliation Act of 2001.

Mr. Speaker, pursuant to House Resolution 607, I call up the bill (H.R. 4181) to amend the Internal Revenue Code of 1986 to permanently extend the increased standard deduction, and the 15-percent individual income tax rate bracket expansion, for married taxpayers filing joint returns, and ask for its immediate consideration in the House.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today we have before us an issue that we have debated in the past, an issue which has earned bipartisan support. I want to thank you for the opportunity to bring H.R. 4181 to the House floor today. This legislation makes the marriage tax relief provisions of the Economic Growth and Tax Relief Reconciliation Act permanent. Currently there are 36 million American working families that benefit from the elimination of the marriage tax penalty. However, without H.R. 4181, this relief will be reduced next year and expire in 2010. Frankly what that means in simple terms, if this legislation fails to become law, 36 million married working couples will suffer higher taxes and see much of their marriage tax penalty return in the coming calendar year.

To make sure this does not happen, the gentleman from Pennsylvania (Mr. Gerlach) and I introduced H.R. 4181 last week. Overall, our efforts to eliminate the marriage tax penalty have taken more than 6 years. We have made great strides but we are not done yet. We are determined to bring this effort across the finish line and today's legislation achieves that goal.

The Economic Growth and Tax Relief Act, which President Bush signed into law on June 6, 2001, eliminates the marriage tax penalty in three steps. First, we double the standard deduction to twice that of singles. This helps families who do not itemize their income taxes. Additionally, it eliminates the marriage tax penalty for homeowners and others who itemize their taxes by widening the 15 percent tax bracket. Finally, it phases out the marriage penalty suffered by low-income couples when they utilize the earned income tax credit as a married couple.

Much of the relief which became law in 2001 was accelerated last year when President Bush signed a second piece of legislation called the Jobs and Growth Tax Act into law. The accelerated relief included in what some call the Bush tax cut expires at the end of this year. Unless this marriage tax relief is extended, 27 million married couples will face an average tax increase of $300 and over 30 million American working couples will face an average tax increase of more than $700 starting in 2011. The Joint Committee on Taxation, a bipartisan agency of this Congress, estimates that these same couples will pay nearly $105 billion in higher taxes over the next decade in marriage tax penalty unless we pass H.R. 4181, making marriage tax penalty relief permanent today.

Over the last several years, I have introduced my colleagues to some young couples from the district that I represent. One couple, Shad and Michelle Hallihan, was the first couple I shared. They are from Manhattan, Illinois, a married working couple, two schoolteachers. I explained how they suffered from the unfair marriage tax penalty. They benefited from the legislation that was signed into law by President Bush in 2001; they benefited even more in 2003; and we will protect them from the marriage tax penalty in this legislation we hope to send to the President this year.

Two years ago I introduced to my colleagues another couple from my district, Jose and Magdelene Castillo, of Joliet, Illinois. In 2002, they earned combined salaries of $82,000 a year. Jose made $57,000 in 2002 and Magdelene earned $25,000. They suffered the marriage tax penalty. They have two children, Eduardo and Carolina. As a result of the tax law changes that we passed and President Bush signed into law, their marriage tax penalty was reduced by $1,125 a year. This represented a 12 percent overall reduction in taxes for the Castillo family.

Imagine what this means for families like the Castillos, the Hallihans and other middle-income working Americans. With that $1,125, the Castillos could start saving for their children's college education. They could go back to school at Joliet Junior College and pay for a semester or two of college education. They could save for their retirement. They could put a small down payment on a car or a new home. The bottom line is $1,125 is real money for families like the Castillos.

Overall in the State of Illinois, which I have the privilege of representing, 1,544,000 couples today benefit from the marriage tax relief passed by this Congress and signed into law by President Bush. What Congress must do now is to make sure that American families can be confident that this much-deserved tax relief will not be taken away. They want to be sure that we are committed to fairness in the Tax Code by ensuring the marriage tax penalty is gone and will stay away. We must make marriage tax relief permanent for the 36 million American couples that benefit from the tax law changes that we passed into law last year and were signed into law by President Bush.

As unfair as the marriage tax penalty is, it seems even more unfair to consider telling couples like Shad and Michelle Hallihan of Manhattan, Illinois, or Jose and Magdelene Castillo of Joliet, Illinois, that in just a few short years the marriage tax penalty may return because Congress failed to extend and make permanent the elimination of the marriage tax penalty. Let us remember, this bill makes permanent the marriage tax penalty relief included in the Bush tax cut. We make permanent the elimination of the marriage tax penalty for those who use the earned income tax credit. We double the standard deduction for those who do not itemize to help provide those with marriage tax relief. And for many middle-class families who itemize, we eliminate the marriage tax penalty by permanently widening the 15 percent tax bracket so you can earn as a married couple twice that of a single person and stay in the 15 percent bracket.

Mr. Speaker, H.R. 4181 is a good bill. It encourages the values we hold most dear, marriage, family and hard work. My hope is this legislation will earn bipartisan support today. I think we can all agree that it is wrong to punish society's most basic institution, the center of every American family, and that is marriage. I encourage my colleagues to vote for H.R. 4181, making marriage tax relief a permanent part of our Tax Code, because it is the right thing to do, it is the fair thing to do for American families.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would note that this House will be considering in the next few weeks legislation for broad AMT relief. In fact, 11 million taxpaying families will benefit from the AMT relief that we will pass later on in the next few weeks.

Mr. Speaker, I yield 5 minutes to the gentleman from Pennsylvania (Mr. Gerlach), a distinguished leader in the effort to permanently eliminate the marriage tax penalty.

Mr. Speaker, as I prepare to yield to the gentleman from Illinois I would note that later during this debate we are going to be debating a Democratic alternative which, according to the Joint Committee on Taxation, raises taxes on individuals and small business by $207 billion. Think what that will mean to our economy.

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Crane), the ranking member of the Committee on Ways and Means.

Mr. Speaker, there are clear differences being outlined here today. Democrats are proposing a $270 billion tax increase, the Republicans are proposing a simple extension of existing marriage tax relief.

Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. English).

Mr. Speaker, I have a note that this House will be considering broad AMT relief in the next few weeks.

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Shaw), a senior member of the Committee on Ways and Means.

Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Murphy).

Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Brown).

Mr. Speaker, I yield 2 minutes to the gentlewoman from Michigan (Mrs. Miller).

Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Barrett).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, as we bring this debate to a close on this legislation, I really believe we need to bring it back into focus. We have had a lot of peripheral issues that have been thrown out there, and this is really what this legislation does. It is a simple extension of existing law, existing law that eliminates the marriage tax penalty for 36 million married working couples.

The example of a couple in the district that I represent who are those who face higher taxes if we fail to pass this legislation law is a couple by the name of Jose and Magdalena Castillo of Joliet, Illinois. They have a little boy and a little girl, Eduardo and Carolina. They are a hard working couple, and like 36 million married working couples, they could pay higher taxes unless this legislation becomes law.

In 2001 and 2003 we worked with President Bush and we succeeded in essentially wiping out the marriage tax penalty for 36 million low income and middle class married working couples. For the Castillo family of Joliet, Illinois, it meant $1,125. Think about that. In Joliet, Illinois, that is a couple semesters worth of tuition at the community college. It pays several months of daycare. It is a down payment on a home. It is money they can put in their retirement account or their education savings account to help their children.

The Castillos, like millions of married working couples, could face higher taxes. Now, it is estimated that if we fail to pass this legislation into law that next year millions of couples will receive a tax increase of about $300 million as a portion of that marriage tax penalty if reimposed. And then in 2010 if we fail to make permanent the elimination of the marriage tax penalty, they could see about a $1,000 increase in their taxes. And over that 10-year time, 36 million married working couples could receive about $100 billion in higher taxes, just because they are married, and that is what this is all about.

We hear a lot of rhetoric but this is pretty simple legislation. We are doing a simple extension of existing law that is due to sunset this year, and if we fail to extend it 36 million married working couples will suffer higher taxes just because they are married.

So I urge my colleagues to join with us. Let us work in a bipartisan fashion. Our efforts to eliminate the marriage tax penalty enjoyed bipartisan support. Let us focus on what this issue is, and that is bringing fairness to the Tax Code. So I ask my colleagues on both sides of the aisle to think of the Castillo family when they vote to make permanent today the elimination of the marriage tax penalty.

I urge a no vote on the substitute which contains a $207 billion tax increase on individuals and small business. I urge a no vote to reject that and I ask for an aye vote to make permanent the elimination of the marriage tax penalty. Who benefits? Thirty-six million hard working married couples where both the husband and wife are in the workforce. And it is just a common sense question. Why should they have to pay higher taxes just because they are married? We have made a commitment to eliminate the marriage tax penalty. Let us make it permanently eliminated so it never comes back.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise to claim the time in opposition, and I yield myself as much time as I may consume.

Mr. Speaker, let me begin by, of course, thanking my good friend the gentleman from New York (Mr. Rangel) for these thoughtful and friendly comments, and as we begin this debate on the substitute he is offering, and of course, my criticism that I will have of course is being made in friendly terms, as he knows.

Let me just explain why I urge my colleagues in the House to, in a bipartisan way, oppose the Rangel substitute to H.R. 4181.

As my good friend from New York noted, it includes a $207 billion tax increase on individuals, on families and particularly on small business. To summarize the Rangel substitute, it reverses the tax relief that benefits many families that was included in the Bush tax cuts of 2001 and 2003. It creates a new tax on families and small business, and it even makes the existing alternative minimum tax, something that we all despise, even more complicated.

The Rangel proposal, the Rangel alternative, creates a new tax on families and small business. The Joint Committee on Taxation estimates that the substitute authored by my friend from New York raises taxes by $207 billion by creating a new tax on a group that is defined as the rich, but if we look at the fine print of that definition, the vast majority of the so-called rich are people on Main Street, entrepreneurs and small business people, the people who employ a lot of workers in Morris, Illinois, where I live.

As I noted, it increases taxes on entrepreneurs and reverses the President's tax relief by raising the rate, and it makes the AMT even more complex. Although we share a bipartisan goal of fixing the AMT impacting the 2003 tax cut, we provided for AMT relief, and I expect in the next few weeks the House is going to vote on an extension of that which provides broad AMT relief for millions of families who would otherwise suffer the AMT.

I would note under the Rangel substitute the Tax Code is made even more complicated by requiring families, believe this or not, to do three sets of tax calculations. People have got to figure out their taxes three times to determine whether or not they avoid the AMT under my good friend's proposal.

Republicans are working to address the AMT and I would note the AMT, the alternative minimum tax, was made much worse in 1993 with what has been called the Clinton tax increase. No Republican supported what was then the biggest tax hike in the history of our Nation but most Democrats did, but the AMT was made much more complicated and actually of greater burden, targeted at middle class families. We are working to solve that burden, and this House will be voting on AMT relief sometime in the near future. We are working closely with the Bush administration towards that goal, and we believe that proposal will protect 11 million families who otherwise would pay the alternative minimum tax.

So I ask bipartisan opposition to my good friend's proposal, which again is a $207 billion tax increase on individuals and small business.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, as we continue to debate the Democrat proposal to raise taxes by $207 billion, I yield 2 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. Speaker, I yield myself such time as I may consume.

We are learning a new definition today, ``pay for,'' which means ``tax increase.'' Again, the Democrat substitutes proposes a $207 billion tax increase on individuals and small businesses, those who create jobs all across America.

Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Smith).

Mr. Speaker, I yield myself such time as I may consume to note that we continue to debate the Democrat proposal to raise taxes by $207 billion on individuals and small businesses.

Mr. Speaker, I yield 5 minutes to my good friend, the gentleman from Minnesota (Mr. Kennedy).

Mr. Speaker, as we debate the Democrat proposal to increase taxes on individuals, families and small business by $207 billion, I yield 2 minutes to the distinguished gentleman from Georgia (Mr. Burns).

Mr. Speaker, as we continue to debate the Democrat proposal to increase taxes by $207 billion on individuals, families and small business, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Gerlach), one of our leaders in the effort to permanently eliminate the marriage tax penalty.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Georgia (Mr. Kingston), a member of the House Republican leadership.

Mr. Speaker, I rise in strong opposition to my friend from New York's substitute proposal that he is offering, which, again, is a $207 billion tax increase on individuals, on families, and on small business.

The issue of the AMT has been raised today, and that is another issue which concerns all of us. But I would note that in 1993 when President Clinton called for a tax increase, the biggest tax increase in the history of our Nation, Democrats controlled the Congress, and at that time they increased taxes, increased the rates; but they failed to index it for inflation. That has created the problem that we are facing when it comes to the AMT.

In the next few weeks, this House will be taking up legislation, broad AMT reforms, which will help prevent 11 million of those families that my good friend from New York has identified as needing help. We will be voting on that sometime, very, very soon. But today we are talking about the marriage tax penalty.

Mr. Speaker, I would note in directing my attention directly to the Rangel substitute that it does several things. It reverses President Bush's tax relief, and that means higher taxes, as I said earlier; it creates new taxes on families, individuals, and small businesses; and it makes the alternative minimum tax even more complicated.

Again, under my good friend from New York's proposal, you would have to essentially figure out your taxes three times before you could determine what your tax would be under this proposal. The Tax Code would become much more complicated and taxes would go up $207 billion.

So I urge my colleagues to vote in opposition to the Rangel substitute. The gentleman from New York (Mr. Rangel) is a good friend of mine. We work together on a lot of things. But I disagree with him on the substitute that he has offered.

But let us talk about what the real issue is before the House today, and that is, do we want to eliminate the marriage tax penalty permanently? If we fail to do anything, the marriage tax penalty will come back for millions of American families.

I remember all the years we have talked about eliminating the marriage tax penalty. I have a couple that I used as an example, a young couple who I had met when they just got married, Shad and Michelle Hallihan.

When we were working early on to eliminate the marriage tax penalty, twice we passed legislation to eliminate and wipe out the marriage tax penalty, and unfortunately it fell victim to President Clinton's vetoes. He wanted to spend the money, rather than give it back to married couples; so he vetoed that bill.

In the case of Shad and Michelle, what really was the problem was they both work, they are both school teachers, so they have two incomes. Under the Tax Code in the old days, before President Bush's tax cut was put in place, they paid higher taxes. In fact, the average married couple at the time we introduced the original legislation to eliminate the marriage tax penalty paid about $1,400.

Well, after our legislation to eliminate the marriage tax penalty was vetoed twice by President Clinton, time marched on and the Hallihans had a son. In fact, that little boy is about ready to start grade school now. Over that little boy's lifetime, we have been working to eliminate the marriage tax penalty.

If you think about it, Will County, Illinois, where the Hallihans live, $1,400 for them is tuition at Joliet Junior Community College, several months of daycare at a local community college. So the Hallihans are a good example of a married couple with a young child who suffer the marriage tax penalty.

Well, this past year, with the help of President Bush, President Bush in 2001, President Bush in 2003, we were successful in enacting into law legislation that essentially wiped out the marriage tax penalty for 36 million married working couples.

Another example of a couple from the district I represent, Jose and Magdalena Castillo, Joliet, they are construction workers, they work in the construction field, they have two children, Carolina and Eduardo, and they work hard. But they suffered the marriage tax penalty too, and thanks to the legislation that the President signed into law, after it was twice vetoed by President Clinton, the Castillos have an extra $1,125 when their marriage tax penalty was eliminated.

Of course, they have two children. That $1,125 is money they could set aside in an education savings account, in a health savings account, to help with health care or college tuition needs. It is money they can use to put a down payment on a car. Or they could also put it in their individual retirement accounts for their later years some day when the kids are out of school, out of college, and they are empty-nesters and are ready to retire.

But the bottom line is that Shad and Michelle Hallihan and Jose and Magdalena Castillo represent the 36 million married working couples who will suffer higher taxes, unless we make permanent the elimination of the marriage tax penalty.

We do have two alternatives here. My good friend from New York has offered one in which the code word ``pay for'' is used. Just to explain congressional terms, pay for means tax increase. My friend's proposal has a $207 billion tax increase on families and individuals and small businesses, those who create jobs in America.

The Republican proposal, which I hope has bipartisan support, does not include a tax increase on families or small business. What we do is provide a simple extension of the existing marriage tax penalty relief that if we fail to pass into law would result in a tax increase on married couples, like Jose and Magdalena Castillo and Shad and Michelle Hallihan.

If we fail to extend this marriage tax relief, couples such as the Castillos would see a $300 marriage tax penalty reimposed, a portion of that previous penalty they had. If we fail to make it

permanent, 35 million couples like the Castillos would see a tax increase of more than $700 starting in 2011.

Overall, over the next decade, if we fail to extend and make permanent the elimination of the marriage tax penalty, married couples will pay nearly $105 billion in higher taxes.

This is what this is all about. It is a simple choice today. I urge my colleagues to do the right thing, and the right thing is to oppose a $207 billion tax increase on families and individuals and small business by voting ``no'' on the substitute of my good friend from New York (Mr. Rangel) and voting ``yes'' on H.R. 4181, legislation that makes permanent the elimination of the marriage tax penalty.

We do it in three ways. We extend the doubling of the standard deduction so that married couples can have a standard deduction twice that of singles that helps those who do not itemize. We also make permanent the widening of the 15 percent tax bracket so middle class married couples who are both in the work force make twice as much when they file jointly and stay in the 15 percent tax bracket as a single, and we also help the working poor, those who benefit from the earned income credit, a program that was created by Ronald Reagan to help the working poor make ends meet.

My good colleague from Texas said that somehow this proposal would not help this returning Iraqi war veteran and, with all due respect, she is wrong because under our legislation we make permanent the earned income credit which my friend says that she qualifies for. So she benefits as well.

The bottom line is low income and middle class married couples benefit in a significant way when we make permanent the elimination of the marriage tax penalty. Again, my good friend is offering a tax increase of $207 billion. It is a bad idea at this time. We need to keep the economy moving forward. Let us help families by permanently eliminating the marriage tax penalty.

Mr. Speaker, I urge an aye vote, an aye vote on H.R. 4181, and a no vote on the Rangel substitute.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, I yield myself as much time as I may consume, and I thank the gentlewoman from North Carolina for yielding me the customary 30 minutes.

Mr. Speaker, marriage penalty tax relief is a good thing, not paying for it is a bad thing. All of us in this Chamber support tax fairness for married couples. But the question is, who supports tax fairness for future generations?

The deficit in this country continues to skyrocket, and what is disturbing to me is that there do not seem to be very many people on the other side of the aisle that care very much about that fact. We have to give President Clinton and his administration credit because, during the Clinton administration, this country experienced the first budget surpluses since the 1960s. Democrats and Republicans, working in a bipartisan way, delivered balanced budgets and extended the solvency of Social Security and Medicare well into the 21st century, but then the Bush administration moved into the White House, and fiscal responsibility went out of fashion.

Over the course of three major tax cuts, essentially handouts to the wealthiest Americans and corporations in this country, the $5.6 trillion surplus became a $2.9 trillion deficit, a stunning $8.5 trillion reversal.

Mr. Speaker, the Republican leadership claimed they were providing middle-class tax relief, but the truth is that the vast majority of these tax cuts went to the wealthiest individuals and corporations in this country. They claimed that these tax cuts would stimulate the economy and create jobs, but the truth is that this country has lost more than 2 million jobs since the President took office. They claim that this country could afford these tax cuts; but the truth is, they have squandered the Clinton surplus and actually hidden the long-term costs of these tax cuts by pretending that they will expire in 2010.

Mr. Speaker, the American people, I believe, can separate the rhetoric from reality. Over the next 4 weeks, starting today, this House will consider legislation to extend various provisions of the 2001 and 2003 tax cuts. Mind you, we will consider these bills without a budget resolution, the framework for all Federal spending for the upcoming fiscal year; and we will consider them years before many of them actually expire.

Today's offering is a bill to extend marriage penalty tax relief beyond 2010. I fully support extending tax relief for married couples, but this bill that the Republican leadership has drafted has the same problem as their previous bills. It is not paid for. Well, I should say actually it will be paid for some day, but not by this Congress. Just like in 2001 and 2003, the Republicans pass the cost of their tax cuts to our children and to our grandchildren. In essence, they are raising taxes on future generations. Mr. Speaker, that is not fair and that is not right.

Democrats, I think, have a better plan to extend marriage penalty relief. The Democratic substitute improves this legislation with three simple, commonsense provisions.

First, the Democrats extend the earned income tax credit for low- and middle-income married couples; and the Democratic bill speeds up the EITC marriage penalty relief included in the 2001 tax cut bill, ensuring that low- and middle-income married couples are not penalized by this unfair tax.

Second, Democrats exempt any marriage penalty relief from the alternative minimum tax. Unfortunately, over half of the marriage penalty relief is taken away from married couples by the Federal Government because of the alternative minimum tax. The Republican bill fails to fix this unfair taxation, and many married couples will find that the government is taxing the very relief promised them by the Republican leadership. We will not see that in the Republican press releases today.

Third, Mr. Speaker, the Democrats provide an offset. Unlike the Republican bill, Democrats actually pay for this tax relief. Democrats do not believe we should be passing the burden of paying for these tax cuts onto future generations.

Mr. Speaker, every day American families must make tough choices with their hard-earned money. They budget for groceries and housing, transportation, education and child care. They spend sensibly within their means.

Congress could learn a lot from the average American family. Congress should live within its means as well.

It is very simple. If you are going to spend, you should pay for it. For the life of me, I cannot understand why the other side of the aisle is ignoring that important lesson.

We have an opportunity here today to work together and provide meaningful marriage penalty relief to married couples, regardless of income; and we can do this in a way that we pay for it.

So I would urge my friends on the other side of the aisle to join us today. Support the Rangel-Matsui Democratic substitute. Show the American people that this Congress can actually act in a fiscally responsible manner, that it does indeed care about the deficit and the fiscal health of this Nation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume to respond to my colleague, the gentlewoman from North Carolina, who I have great respect for.

We serve together on the Committee on Rules, and I did not think we had much of a philosophical difference because I have admired a lot of the comments that she has made over the last several months about the importance of this Congress being fiscally responsible. The gentlewoman actually heads the Republican's Study Group which represents a lot of the more conservative Members of this Chamber, but I read a quote that she had made that appeared in Congress Daily on January 22 that I actually agree with. She says, ``I support making tax cuts permanent, but we have to pay for them.''

I think the only kind of difference that we seem to have on this debate, which I did not think we did based on this quote, was that we want tax relief and we want it paid for.

My colleague from New York says that we always want to say but, but, but. Well, it is not that we want to say ``but.'' I think most Americans want us to be fiscally responsible, and the fact of the matter is we are faced with the largest deficits in the history of our country. That used to be a concern on the other side of the aisle. It does not seem to be a concern anymore, and we are also faced with record job losses. I mean, 2.6 million jobs have been lost under this administration.

I am concerned by the fact that we cannot seem to get a highway bill to the President's desk. The gentleman from New York is on the Committee on Transportation and Infrastructure. He knows full well that if we passed a transportation bill, we would create a lot of jobs by investing in our infrastructure and investing in our highways.

So if we want to get serious about controlling this deficit, I think we need to show a little fiscal responsibility here on the House floor.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume and say to the gentleman from New York that my favorite four letter word as well is ``jobs,'' and I am, quite frankly, very worried about the fact that under this administration and under their economic policies we have lost 2.6 million jobs.

I want to make sure that our economy moves in a different direction. I guess I also believe that one of the ways to help continue to move us in a different direction is to get our fiscal house in order and to reverse this trend that we are now pursuing, which is one of record deficits.

Going deeper into debt, in the long run, is going to undercut our economy and undercut our ability to grow jobs. What we are simply saying here is that, yes, we believe in marriage penalty tax relief; but we think it should be paid for. I do not think that should be controversial. That seems consistent with a lot of statements made by the other side of the aisle over the many years I have heard speeches being given on this floor.

What we are doing today is not paid for. What we are doing today, in the end, is going to bring us further into debt; and I think that we can do this better. We should be able to come together in a bipartisan way and get this right. I think that is what the American people would expect.

Mr. Speaker, I yield 15 seconds to my distinguished colleague, the gentleman from New York (Mr. Boehlert).

Mr. Speaker, I yield myself such time as I may consume and again thank the gentleman for his

remarks; but this is not an excuse. This is very serious.

We are now faced with the biggest deficit in the history of this country; and every single Member, Republican and Democrat, liberal and conservative, should be worried about it because we are passing this on to our kids and our grandkids. That is no joking matter. That is serious.

I believe if we do not reverse this trend, we will undercut our ability to grow jobs. So I want tax relief, but I also want us to be fiscally responsible and pay for it. That is consistent with the statement of my colleague from North Carolina, who I have great admiration for. I just wish when we say these things, we would actually fight to make them a reality on this House floor.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Again, Mr. Speaker, I would urge my colleagues on both sides of the aisle to support the Democratic substitute that the gentleman from New York (Mr. Rangel) and the gentleman from California (Mr. Matsui) will offer. I think it is a responsible way to approach this issue because it supports marriage penalty tax relief, but it pays for it.

The gentlewoman from North Carolina mentioned that their budget resolution urges that we pay for additional spending programs. I am all for pay-as-you-go rules, but I think they should also apply to tax cuts. I think it is the responsible thing to do.

I think all of us here would like to go home to our districts and talk about all the tax relief that we can provide our American families; but I think without specifying how we are going to pay for it, it is really irresponsible. It is a nice press release. It is a nice kind of public relations item. But if we do not pay for it, what we are really doing is we are passing the burdens on to future generations, to our children, our grandchildren, and our great grandchildren.

My grandfather used to say to me that you cannot have dessert without first having your spinach, and I think that that is a good lesson for us to apply to how we do business on the House floor. It is nice to get up here and talk about tax cuts and tax cuts and tax cuts, but it would be better to do so in the context that we pay for them. I think that is what the American people expect. That is what American families have to do. They pay as they go. They have to live within their means, and I think that same lesson should apply here.

So having said that, Mr. Speaker, we have no objection to the rule, but I would urge my colleagues very strongly to do the responsible thing and to support the Rangel-Matsui Democratic substitute.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I think that this bill was summed up perfectly by my friend the gentleman from Illinois when he said that this bill was introduced last week. So the bill was introduced last week and now it is on the floor this week, a complicated tax bill? I think the oldest committee in the Congress, the Committee on Ways and Means, would have had an opportunity to digest the details of this legislation, but this must be some new mechanism that we have developed here whereby on a very important tax matter the legislation is introduced last week and it is on the floor today for discussion without incidentally having gone through the committee, which for people like myself happen to believe that this is the basis of the Congress, sending legislation through the committee so it might be vetted properly and there might be an opportunity for people to examine the details of the legislation before it is brought to the floor.

Let me speak specifically to the tax cut mania that we are hearing in this institution. What is striking about this proposal, Mr. Speaker, is that, I want to remind people, we have 130,000 troops in Iraq who are serving with honor and distinction every single day. We have 12,000 more troops in Afghanistan who likewise are serving this country admirably day in and day out. So here is the strategy in the modern Congress.

We are simultaneously fighting two wars with three tax cuts.

One of the things that I am most proud of during my time on the Committee on Ways and Means is that we

were able to put together the details that balanced the budget of the United States for the first time, I believe, in about 3\1/2\ decades, and then we projected surpluses where we may well have had the opportunity to repair Social Security, to repair Medicare, to spend some money on education and to have done the things that we all desire in terms of improving our environment. But the strategy afoot today in the modern Congress is you introduce the bill last week, and then you bring it to the floor for a debate without even going through the committee process. So two wars, three tax cuts, $500 billion in deficit, and there is no vetting of this process in front of our committees?

Let me speak specifically, if I can, to the proposal of the gentleman from Illinois (Mr. Weller). Let me tell the gentleman, I know people like the Hallihans. Here is the problem with this proposal: What we give to them with this hand, the alternative minimum tax takes away with the other hand. For a family who already has discovered a couple of weeks ago how ferocious the alternative minimum tax can be, they are going to discover that with the headlines of marriage penalty relief that there is a take-back provision.

So we are going to give them the benefit today of what we deem to be or call marriage penalty relief, and, guess what, Mr. Speaker? The Hallihans are about to discover that if they are a married couple with two children who make $72,000 a year, they are not going to get any relief in this proposal because of the alternative minimum tax.

Now, I along with others have been talking about the problem of the alternative minimum tax for the last few years around here. I said recently seldom have I ever been part of any issue in the 16 years in which I have had the honor to serve here where people said to me, keep up the good work, we appreciate what you are doing on both sides of the aisle, and then we do not do anything about it.

So let me go back to the Hallihans for a second, because I expect that they are going to know about alternative minimum tax very quickly. If they have two children and they take the standard deduction with income of $72,000 a year, let me repeat, they are not going to get any tax relief with this proposal. Part of the problem is AMT, and part of the problem happens to be the President's tax cut proposals.

I am going to go back to what I said at the beginning. How can we be fighting two wars with three tax cuts? That is what we ought to be discussing and deliberating here. We passed $87 billion for the war in Iraq, that on top of $60 billion, and everybody in this institution knows that after the election we are going to need more money for the Iraq war and the Afghanistan war.

Where are we going to go to get it? I do not know any businessman or businesswoman in America that could hope to run their company the way that we are undertaking tax cut legislation in the modern Congress.

Then on top of that, we stand at the microphones and tell people, you are going to get relief under this proposal, and more relief under this provision. Then they get their tax bill; and they discover not only is there not any more relief, but, because of alternative minimum tax, they are going to pay more.

There are two issues that we should all be able to agree on in this Congress: tax simplification, there ought to be an appetite here for getting it done; and the second part of this issue, we should be fixing permanently the alternative minimum tax. That is what we should be doing.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Tennessee (Mr. Tanner), who was elected on the same day as I was. I would point out he is a member of the Committee on Ways and Means, which generally is in a position to take up these sorts of issues.

Mr. Speaker, there are 10 million people, married households who are going to get no benefits from this proposal; 3 million more are only going to get part of the benefits. That means we are denying 13 million married households a benefit that is being promised to them today because of alternative minimum tax.

Mr. Speaker, I yield 4 minutes to the gentleman from New York (Mr. Hinchey).

Mr. Speaker, it certainly is a contrast between the two parties. To suggest that this is not about paying for Iraq and Afghanistan is ridiculous. Of course it is. We are borrowing the money to pay for Iraq and Afghanistan: $87 billion. Of course this is entirely relevant.

Also, I do not believe that the Committee on Ways and Means brought this issue up. Maybe I was not there that day.

Mr. Speaker, I yield 6 minutes to the gentleman from Michigan (Mr. Levin), a member of the Committee on Ways and Means.

(Mr. LEVIN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentlewoman from Michigan (Mrs. Miller) earlier spoke of the need for tax relief, and other speakers on the other side have offered different proposals suggesting that we should proceed down this road of tax cuts regardless of whether or not we are going to need this money for Iraq and for Afghanistan.

Now, let me go back to the point that I raised earlier in this debate, and I hope people are listening. Without batting an eye in this institution, we borrowed $87.5 billion for the war in Iraq. Now, the only reason we did not hear the real cost of the war in Iraq is because people would have reacted very differently. Everybody in this institution today, the people that are watching, the people that are here as guests, they know you are going to need more money for Iraq and Afghanistan. Tens of billions of dollars more will be needed for Iraq and Afghanistan.

For years Democrats were accused of being the party of fiscal irresponsibility even though we set the Nation on the right course in the mid-nineties with record surpluses, record economic growth, unparalleled prosperity, and we demonstrated you could balance the

budget and still fix Social Security and Medicare.

Today we are, and I want people to listen to this carefully, we are borrowing the money for this tax proposal before us today, borrowing the money and sending the bill to our children. We are fighting two wars. For the first time in our history we are having tax cuts at the same time that we are fighting two wars. We watch the red ink everywhere, $500 billion this year in deficit, and the answer here is let us add more to it.

The President comes forward with a proposal to finance the war in Iraq, which I voted for because I thought those soldiers needed the best equipment and best supplies we could provide them with, but we borrowed the money to do it. And the answer today is, let us borrow money for tax cuts to pay for these proposals. And then people like myself who have been talking about alternative minimum tax for years here were told, well, do not worry because we are just going to do this in a couple of weeks. We are going to fix the alternative minimum tax in a couple of weeks.

The alternative minimum tax problem is going to cost $500 billion to $600 billion to fix. We will not fix it in 2 or 3 weeks here. Everybody knows it. We will have the tax cut of the week in an effort to massage the numbers.

Let me give you another specific quick example of what we seek. The AMT problem reaches in to more families based upon the more kids you have. So the families who take the standard deduction and have four kids with incomes of $64,000, they are not getting any benefit from this proposal today because what they are offering them on one hand, they are taking away on the other. So they suggest we will give you marriage penalty relief, and then the IRS is going to say, aha, take those deductions for those children, take the HOPE credit, and let us tell you what is going to come of it.

What is going to come of it is you are bumped into alternative minimum tax and you will be hit with a bigger bill than you originally would have had.

Now, let me offer some of my political DNA on this issue as a Democrat. I have proposed getting rid, outright, of alternative minimum tax. Just repealing it. That would force this institution and the other body to speak specifically to the issue of the tax cuts that we have seen here, reckless disregard for the future of this Nation's financial security. We are going to need that money for the international commitment that we have made in Iraq and Afghanistan and in the war on terror.

We will need to fix Social Security. We will need to fix Medicare for generations to come. That is not irresponsible to have used those surpluses during the Clinton-Rubin years to pay for the basic requests of the American people.

This is not an issue that is 20 years off. The baby boomers begin to retire in 2011. We are going to need the resources for that. And to the question that was referenced earlier, the suggestion that we are proposing a $206 billion tax increase, we are going to need $300 billion for the war in Iraq.

I will remind this body, General Shinseki said, You need tens of thousands of more troops. He got fired for his wisdom. Lawrence Lindsey, by the way, the architect of the President's economic policies, said 200- to $300 million. He got fired because he had the audacity to suggest the truth to our respective bodies.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank the gentleman for yielding me time.

I too am concerned about the total lack of process around here and what we are supposed to be doing. My concerns really do not go to the substance of the bill or the policies, but the total lack of process and the fact that we do not even have a budget by which we can gauge what our priorities ought to be.

I am going to talk about something here as a business person, that I am looking forward to this tax cut a week over the next several weeks, because I think it is going to give us a wonderful opportunity to explain to the American people what is going on in this town.

Generally speaking, when you are in business, you have a budget. You try to decide what you are going to spend money for and what you are going to do. We do not have that, so we come with these ad hoc tax bills, and the mantra seems to be that a tax cut generates money; it does not cost money. In fact, the majority party tries to apply PAYGO rules only on the spending side and not to the tax side. It is called a balance sheet. It is not a liability sheet; it is a balance sheet. You have to have both.

What I think they fail to understand is that a tax cut today with borrowed money is a tax increase tomorrow, and it is called interest. We are now paying over $300 billion a year in interest on the national debt. If that was all that we had to worry about, maybe we could figure out a way to pay that back with inflated dollars or in some way do something to get us out of this hole, if that is all we had to worry about.

I remember when Secretary Snow came before the committee and I asked him about interest. He said, oh, yes, it is an obligation that must be paid. I said, yes, it must be paid off the top. Everyone who has borrowed money knows about interest, and this bill today on the floor adds another $100 billion of unpaid-for tax consequences that we will have to begin paying interest on as we borrow it. Again, if that was as far as it went, maybe we could somehow justify that, if we had a budget, which we do not.

But Secretary Snow, getting back to him, when I asked him about interest, he said, yes, it is, but this is nothing to worry about, because the United States economy is so large and this is such a small percentage of GDP that the borrowings we are incurring today, we can handle them.

What he did not say was that back when we did have a percentage of GDP of borrowings this big, it was the American people who were funding the deficit, who were buying the IOUs of the Treasury. That is not true today. I want to tell the American people that this is a national security issue, and I hope I can explain why to them.

Last year we had a budget deficit here in this town of over $370 billion. Over 70 percent of that debt was purchased by foreign interests. Let me say that again: foreign interests are financing the deficit borrowing that this Congress is doing.

I just want to know, how far are we willing to go to mortgage our financial future to foreign interests? According to the Treasury Department, major foreign holdings of U.S. Treasury securities now total over $1.6 trillion. Over 34 percent of the money, hard currency, that we owe, is held by foreign interests. China alone holds over $200 billion. The Japanese hold over $600 billion. Furthermore, the Central Bank in Beijing has increased their holdings of United States debt by over 100 percent since 2001.

You would be amazed at what is going on here. We are borrowing money to cut taxes, indicating that in tomorrow's day, our citizens will have a tax increase because they must pay interest on what we are unwilling to either cut or unwilling to raise money for our needs, particularly those soldiers, sailors and Marines in Iraq.

We cannot even extend to them $100,000 worth of life insurance because they say they do not have the money, and here they are going to spend $100 billion, borrowing 70 percent of it from people around the world. As I say, I do not have any problem with the substance, but this is the wrong way to do it.

Let me just give an example. The Caribbean Banking Centers, we owe them $74 billion; Taiwan, over $50 billion; OPEC, who is raising prices, cutting production of oil, while gasoline in this country is $2 a gallon, OPEC owns over $43 billion worth of our debt. Korea, $37 billion; Singapore, $22 billion; Italy, $15 billion; Brazil, $15 billion; Thailand, $14 billion. We are putting our country in hock all over the world with this deficit spending that is going on, and sooner or later, let me tell my colleagues this: sooner or later those countries are going to say to the American Treasury we do not want any more debt, we are not going to buy at a relatively low rate of interest your paper any longer.

Do my colleagues know what is going to happen then? Interest rates are going to go up, because we are going to have to hike the interest rates that we are willing to pay for borrowed money so somebody somewhere will buy it. Again, that will directly result in a tax increase on the American people and particularly these young people.

We all are witnessing a generational mugging, because my generation is sending young men and young women to Iraq to fight a war, we are borrowing the money, taking a tax cut, my generation is taking a tax cut to borrow the money from foreign interests and giving them the bill when they get home, some without an arm, some without a leg. What is there to be proud of about what we are doing here? That is exactly what is happening.

Thankfully, the Wall Street Journal finally picked up on this national security argument I have been making for 7 or 8 months, about how crazy it is, foolhardy it is, and how dangerous it is to continue to borrow money from foreign interests. They said, ``Some would argue,'' in this Wall Street Journal article, ``that foreign countries would never sell off U.S. debt. However, economic history shows a number of times when countries have subordinated their economic interests to political goals and clout.''

Some day, I do not know when, in the future, China, Japan, any of these other countries that I read, the Caribbean Banking Centers, OPEC, you name it, some day they are going to say we do not see the world as the United States does, and we are going to either threaten to dump this debt or we are going to sell off, in which case it will have a direct effect on the markets of this country.

Thankfully, Wall Street is beginning to wake up to this national security issue of being held hostage and in hock financially to foreign interests who may or may not see the world as we do in the future.

I think again that there is no way to overemphasize how dangerous this course of action is. This bill is just one little symptom of a far greater problem that we have in this country and in this Congress, and that is the absolute unwillingness to ask the American people to sacrifice anything in the event of war. We are at war in Afghanistan, at war against terrorists, at war in Iraq, and nobody in this country is asked to do anything except the men and women in uniform, the Reservists and the Guardsmen who are fighting. Nobody else has been asked to do anything except take a tax cut, and when they see the terrorists flare up we are advised by the administration to go shopping.

This is really a sad day. This bill is a symptom of a far greater problem, and

I look forward to laying out how much we owe to foreign interests and what it means to this country if they ever decide to change their mind about whether or not they will buy our paper.

Mr. Speaker, as bad as the gentleman from Texas (Mr. Stenholm) talked about the gigantic size of the debt, that is not the worst part of it. A tax cut today with borrowed money is a tax increase tomorrow in the form of interest on the debt. One cannot have it both ways.

If that is not bad enough, that is still not the worst of it. The worst of it is this: This country ran up a $370-plus billion deficit last year. You know who financed it? Seventy percent of it was financed by foreign interests. Beijing, the Central Bank of China, has increased their holdings of American paper 105 percent since 2001. Now the Asians own almost $1 trillion worth of our paper. Every dime you borrow, 70 percent of it is being bought by Saudi Arabia, OPEC, Caribbean nations. I have got the list of people we are in hock to all around the world.

Sooner or later, I am telling you, sooner or later, you keep on doing this and this bill, nobody disagrees with the substance of it, you just will not pay for it. Sooner or later when they do not see the world as we see it, we are going to be in deep trouble. They will have control of the financial markets. They will have control of Wall Street because all they will have to do is call the amount of paper that they hold and we are in trouble.

I would say this bill is just a symptom of a far greater, more serious problem that is every bit as important to this country as any national security matter that I know of.

Mr. Speaker, I thank the gentleman for yielding me the time, and I yield myself such time as I may consume.

Mr. Speaker, the difficulty with this debate is that there is a big monster in the closet that people do not want to discuss, and that is the growing national deficit, which is going to make it impossible for us to ever do the type of investments in our education, in our housing, health care for seniors and others that we need to do. It certainly will stop us from doing things the right way in places like Afghanistan, Iraq, around the world where the United States must stand up to defend the rights of others and protect Americans, and certainly we are not doing the right thing for at least some 13 million Americans under this particular bill when it comes to the so-called marriage penalty relief because they will

get a benefit, because what is not being said, because of that big monster in the closet is that a lot of these folks, 10 million directly, outright, will lose any type of relief from this legislation because they will fall into another tax category.

So my colleagues take care of what is called the marriage penalty, but they dump them into what is called the alternative minimum tax, such that if a family makes about 72,000 in a year and has two kids and, in filling out the tax form does the standard deductions, that family thinks all of the sudden it may get some relief out of the marriage penalty legislation, like what we have today, will finally get nothing, and that is the reality for 10 million families in America.

For another 3 million families, they will get less than what this bill promises, and the big monster in that closet is going to come out because if we have a $521 billion deficit for this current year and over a $7 trillion national debt collectively, which amounts to more than 24,000 for each man, woman and child in this country that each and every one of us owes and sooner or later will pay, either through higher taxes or reduced services in education, health care, housing, national defense, then we are going to see the real consequences come.

So this debate should be about doing marriage penalty relief responsibly at a time of deficits. This should be about doing marriage penalty relief responsibly at a time when we are asking men and women to sacrifice their lives every single day in places like Afghanistan and Iraq, and this should be a debate about doing this responsibly and in a bipartisan fashion so that we could craft legislation that would take care of the 13 million American families that are going to be deceived and believe that they are going to get something from this and get either nothing or very little whatsoever, at a cost of over $100 billion.

So, Mr. Speaker, there could be bipartisanship here. We should move forward in taking care of marriage penalty for any family under the Tax Code, and for that reason I would hope that Members would consider voting for this substitute because it goes in that direction.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer), the Democratic whip.

Mr. Speaker, I yield myself such time as I may consume to mention that the last time I looked the majority party is in control of both the House and the Senate and controls any spending bills that come out of this Congress. Of course, they first are sent over to us by the White House, meaning the President as well. So in terms of who controls the spending and who is splurging, the minority party would love to have control of both the House and White House, but at this stage that is in the hands of the majority party, so the gentleman should take his concerns directly to his leadership of his party.

Mr. Speaker, I yield 3 minutes to the gentleman from New York (Mr. Israel).

Mr. Speaker, I yield 3 minutes to the gentleman from Ohio (Mr. Ryan).

Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Bishop).

Mr. Speaker, I yield 2 minutes to the gentlewoman from Ohio (Mrs. Jones), a member of the Committee on Ways and Means.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, everyone who has spoken today on both sides of the aisle supports tax relief for married couples. In fact, I know of no one who is going to come here and say to you they are prepared to vote against marriage penalty relief for married couples in this country.

But at a time when we are facing as a result of policies in this government the largest deficit in the Nation's history, some $521 billion, and at a time when there is a double whammy of having to fight a war in Iraq and Afghanistan with no sense of when we are going to have an opportunity to bring our troops home and at what cost, we have to move on legislation like this in a responsible fashion.

This legislation will cost over $100 billion. We do not have $100 billion to pull out of the Federal Treasury's pocket to pay for this bill. That means the deficit of the Nation will increase that much more.

As I mentioned at the inception of this debate, we have a $7 trillion-plus national debt. I guess you could continue spending, the credit card looks good, but at some point we have to pay. And if we are not going to pay, that means our children will pay.

At a time when we are this year, as a result of the administration's request, underfunding the President's own No Child Left Behind Act for education some $8 billion to $10 billion, at a time when we are underfunding the IDEA legislation, which is for special education needs of our kids throughout this country, by more than $2 billion this year, at a time when we are failing to help 44 million Americans have access to health insurance, at a time when we see men and women every day sacrificing their life in places like Afghanistan and Iraq for us, here we are talking about giving $100 billion in tax cuts, when we are not willing to pay for them.

The Democrat substitute simply says, let us give that tax relief, but let us pay for it. We do so by taking the top one-fifth of 1 percent of the richest Americans in this country, one-fifth of 1 percent, and saying to them, you are going to get about $136,000 in tax cuts from the 2001 and 2003 tax bills that were passed. Take $100,000 instead of $136,000. That will help us take care of the millions of families, tens of millions of families that will otherwise face this marriage tax penalty.

Sacrifice a little bit the way the young men or women in Afghanistan are doing today or Iraq are doing today, or the working family making $40,000 or $50,000 is doing today. You will still get $100,000. That is more in relative terms and in absolute terms in the tax cut than any other income group in America.

One-fifth of 1 percent of the richest families in America would help cover the cost. That way we do not add another $100 billion to the national debt. Cannot do that? I guess that is considered responsible.

Some of us believe we owe it to the people of this country to spend, but spend responsibly; to enact legislation, but do it responsibly. That is what I think the Democratic substitute does.

It simply says, let us not try to hoodwink you, let us not do tax policy in the back room with a big black monster back there you cannot see. Let us do it so people can understand transparently, clearly. Big print, not fine print, is what we are trying to say.

Let us give marriage tax relief to all families, but do it responsibly without adding to the debt that will have to be paid by the children of the people that will receive some of that relief. Do not take it from Peter to give it to Paul. Let us do it the right way.

I urge my colleagues to vote for the Democratic substitute.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.