To amend the Internal Revenue Code of 1986 to treat income received by partners for performing investment management services as ordinary income received for the performance of services.

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

Mr. Speaker, I rise in strong opposition to the bill before us today, just as I did the last time this bill was on the floor. It is not exactly the same, but basically it is a bill that would patch, so to speak, the AMT, and then increase other taxes to the same amount as the baseline says the patch costs.

Let me make one thing clear. Republicans are for patching the AMT, a 1-year patch on the AMT. We are for, in other words, freezing the AMT in place just as it is today or just as it was for the last tax year. Where we differ with the majority, at least so far, is over the question of whether we need to, quote, pay for the patch by raising other taxes. We have had this debate before on this floor. We know where this debate is headed.

The President's budget, by the way, includes a 1-year patch on the AMT without a pay-for. So that should be made clear to everyone, and that is what we have been proposing for quite some time. That is what the Senate passed by a rather large vote very recently. In fact, 88-5 I believe was the vote that the Senate passed a 1-year patch without tax increases. I applaud that action of the Senate. It does what the chairman of the Ways and Means Committee and I as the ranking member of the Ways and Means Committee, and the chairman and ranking member of the Senate Finance Committee wrote in a letter to the President several weeks ago saying that we promised to pass a 1-year patch on the AMT in a manner that the President would sign. The Senate bill represents that promise. This President has said he will sign that bill. The President has said he won't sign the bill that is before us today. In fact, the distinguished majority leader of the Senate is so intent on not paying for the AMT that he is refusing to send the bill to the House right now so as not to give the majority here another opportunity to load it up with doomed tax increases. Yet our friends on the majority are once again pulling on their helmets and fastening their chin straps, ready to run into the brick wall of using tax hikes to prevent other tax increases. The whole thing would be comical if the implications were not so serious.

In recent weeks, the Treasury Secretary, the Acting Commissioner of the IRS, and the chairman of the IRS oversight board have all written to Congress to urge prompt action on the AMT and warned that continued delay on the patch will result in delayed refunds, confusion, and higher costs to the Treasury. In a recent letter, Secretary Paulson cautioned that ``enactment of a patch in mid to late December could delay issuance of approximately $75 billion in refunds to taxpayers who are likely to file their returns before March 31, 2008. Millions of taxpayers filing returns after that date may also have their refunds delayed.'' Well, here we are now in mid-December and, unfortunately, the majority in the House continues to play a dangerous game of chicken with the American taxpayer and the clock is winding down.

When the House debated H.R. 3996 last month, Republicans argued against applying PAYGO to the AMT patch. We pointed out that if Congress has to increase taxes to prevent a tax increase, then the majority's baseline has baked in trillions of dollars of tax increases over the next decade as the 2001 and 2003 tax cuts reach their current expiration dates at the end of 2010.

The majority's logic seems to go like this: To prevent a tax increase, we must enact a tax increase. Either way it's a tax increase, unless you do as we're suggesting, which is to prevent the tax increase by just patching and freezing the AMT in place as we did last year and the year before.

The House Democrats' version of PAYGO forces Congress to decide whether we will let those tax increases take place or replace them with other tax hikes. But no matter how Congress chooses to raise taxes, if we follow that, we will face the largest tax increase in American history both in nominal and real terms. Moreover, in many ways PAYGO has shown itself to be a farce.

In January, when the new majority instituted PAYGO, the Congressional Budget Office estimated that revenues in fiscal year 2007 would total $2.542 trillion. Actual revenues for 2007 turned out to be $26 billion higher than that. Does the majority plan to return these excess receipts to the taxpayer? No. It's just soaked up by more spending.

Similarly, in January of 2007, the CBO estimated that revenues in fiscal

year 2008 would be $2.72 trillion but recently revised that figure upwards by just over $50 billion, almost exactly the same amount that this ``AMT'' costs. Does the majority plan to return this money to the taxpayers, or maybe even credit that against the higher revenues envisioned by the baseline? No. How about crediting it to the AMT patch? No. They are going to pay for it all over again.

As Monday's Wall Street Journal editorial points out, ``PAYGO has been nothing but a confidence game from the very start. PAYGO doesn't apply to domestic discretionary spending. It doesn't restrain spending increases under current law in entitlements like Medicare and Medicaid. Its main goals are to make tax cutting all but impossible while letting Democrats pretend to favor fiscal discipline. The 2003 tax cuts expire in 2010 and PAYGO will make them all but impossible to extend.''

The President and the Senate have made clear that they do not intend to raise taxes to prevent a tax increase. The bill we are considering today only further delays final resolution of this issue, increasing cost to the treasury and increasing confusion for taxpayers and the IRS. I urge defeat of this bill.

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

Mr. Speaker, I yield 1\1/2\ minutes to the distinguished gentleman from California (Mr. Herger), the ranking member of the Trade Subcommittee of the Ways and Means Committee.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Michigan (Mr. Camp), the ranking member of the Health Subcommittee of the Ways and Means Committee.

Mr. Speaker, at this time I yield 3 minutes to the distinguished gentleman from Wisconsin, a member of the Ways and Means Committee, Mr. Ryan.

Mr. Speaker, may I inquire as to the time remaining for each side.

Mr. Speaker, at this time I would yield 3 minutes to the distinguished gentleman from Texas (Mr. Brady), a member of the Ways and Means Committee.

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman from Virginia, a respected member of the Ways and Means Committee, Mr. Cantor.

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

Mr. Speaker, several of the speakers on the majority side have said that this bill provides tax relief for 23 million middle-class taxpayers. That is simply not correct, at least not in the common sense of that term.

If you ask somebody on the street, a taxpayer, if you pay the same amount in taxes this year as you paid last year, is that tax relief? No. They're paying the same in taxes. That's all this bill does. Doesn't give them any relief. If you ask that person on the street, if you pay more in taxes this year than you paid last year, is that a tax increase? Yes. We're trying to prevent 23 million taxpayers from getting a tax increase. We're not giving them tax relief. We're preventing a tax increase.

So why on Earth, to prevent that tax increase, should we increase taxes on somebody else? It just doesn't make sense, Mr. Speaker.

Mr. Speaker, at this time, to further elucidate that point and others, I yield 2 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. Speaker, I yield myself so much time as I may consume.

Mr. Speaker, some of the Members of the majority who seem to be so sincere about not borrowing any more money are the same people that are voting for appropriations bills that exceed what we spent last year plus inflation. So they don't seem to be worried about borrowing more money to spend on goodness knows what. And they're not suggesting yet that we just wipe out all the deficit and thereby prevent any more borrowing by raising taxes totally to do away with the deficit. So we're just talking about a degree of

adding to the debt, little here, little there. If we do it by spending, it's okay. If we let a tax increase take place to get the deficit down, that's okay.

Well, I think that pretty well defines one of the differences between the two parties in this House. We don't want to increase taxes to balance the budget. We'd rather reduce spending. We'd rather hold the line on spending, nondefense discretionary at least and nonhomeland security discretionary. We don't want to solve the deficit by increasing taxes; whereas, the majority is content to raise spending to increase the debt, and then the only way they want to address the debt is to increase taxes.

That's a pretty clear demarcation, Mr. Speaker, of the philosophies of the two parties, and it's become quite apparent as this year has progressed.

Fortunately, the majority, which was then the minority, voted with us the last time we had a freestanding AMT patch, with no pay-for. The now-majority who was there then voted overwhelming with us to do exactly what we're suggesting we now do and what the other body has already passed.

Mr. Speaker, that's the clear resolution of this problem. I beg the majority, let's don't delay this anymore. Don't cost the taxpayers anymore. Don't make the IRS send another set of forms to the printer. Don't delay the refunds of millions, maybe as many as 50 million taxpayers. That wouldn't be right for our inaction.

So let's get this off the floor. I don't have any more speakers. Let's vote, get this done, and then we can get on to really solving the problem.

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

Mr. Speaker, I appreciate the gentleman from Oregon bringing up the fact that President Clinton vetoed the repeal of the AMT back in 1999 when we were in the majority. We did indeed repeal the AMT, only to have that vetoed by President Clinton.

However, the gentleman went on to say that for the last few years we did nothing and accepted all the revenues. That's simply not the case. We put a patch on the AMT every year, just like we're proposing to do this year. The President's budget does not assume the revenues from the AMT increase in this fiscal year. His budget proposes a 1-year patch with no pay-for.

I yield to the gentleman from Oregon.

Not for the year 2007, which is the object of the legislation before us.

Reclaiming my time, yes, this legislation deals with tax year 2007. If we do nothing, the AMT goes into effect for tax year 2007. The President's budget says for tax year 2007 there should be a patch, a freeze on the AMT so that it doesn't affect additional taxpayers, and he does not call for the revenues in his budget.

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

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

The gentleman on the Ways and Means Committee who just spoke claimed that I was being disingenuous. I'm sorry if my remarks were interpreted as being disingenuous. I don't mean to be. I was simply trying to stick to the substance of the legislation before us, which deals with the AMT as it applies to tax year 2007. And with respect to that tax year, the President's budget simply does not, as has been suggested by some Members on the other side, assume revenues from an increase in the AMT. It simply doesn't.

Now, the gentleman is correct, and I would love to debate this at the appropriate time, but the gentleman from

New Jersey is certainly correct that from 2008 to 2017, the President's budget does, indeed, assume revenues from an increase in the AMT. However, the President's budget also assumes making permanent the tax cuts of 2001 and 2003. So you have to weigh all that together, and when you do, you get a fairly level percent of GDP, around 18.5 percent of GDP, coming into the government in the form of revenues. Under the majority's PAYGO rules, if continued to be applied, and I hope they're not, we would see revenues as a percent of GDP rise by 2017 to 20.1 percent of GDP. So there's a big difference between the PAYGO rules of the majority and what the President has proposed.

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

Mr. Speaker, will the gentleman yield?

I thank the gentleman. The gentleman likewise is accurate in his remarks, very cleverly so.

Yes, sir, it is. But the fact is the most recent budget submitted by the President for this taxable year, 2007, does not, in fact, assume the revenues from an increase in the AMT.

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

Mr. Speaker, I offer a motion to recommit.

I am.

Mr. Speaker, I do not believe it is the intent of clause 10 of rule XXI to require tax increases to pay for preventing scheduled tax increases. That is precisely what we are debating on this point of order.

If the Chair determines that this motion violates rule XXI and the House sustains this ruling, then the House is endorsing more than $3 trillion of tax increases over the next 10 years.

PAYGO, as a budget enforcement law between 1990 and 2002, as the majority leader referred to, required automatic spending reductions across the government when budget targets were not met. Rule XXI, should it apply to this motion, is a very, very different PAYGO. It would prevent any Member from offering an amendment that prevents a tax increase without another tax increase. I would understand, and even strongly support, an interpretation of rule XXI that had the effect of requiring spending reductions to offset increases in spending.

Further, while I would not necessarily endorse it, I could understand a PAYGO interpretation that requires a spending cut or tax increase to offset any reduction in current tax rates, or an increase in any current tax deductions or credits; but that is not what we're dealing with here today, Mr. Speaker. Today, with my motion, we are simply maintaining the Federal Government's current take, so to speak, from the people.

Current individual tax rates and policies have largely been in place as they are since 2003 and have led to sustained increases in revenue to the Federal Government. In fact, the annualized increases over the last 3 years have been 14.6 percent, 11.7 percent and 6.7 percent.

Even if my motion passes and is eventually enacted, we will again see increased revenue, it is projected, to the Federal Government next year. Those who wish to apply PAYGO to my

motion, those who wish to object to my motion, are advocating very clearly that they want to lock in not only the largest revenue take in history, but also the largest tax increase in history. These tax increases will lead the government to collect more than 20 percent of GDP from its citizens by the end of the decade, and far higher in the years that follow. These tax increases will be of such a dramatic magnitude that they threaten to bring our economy to its knees and render it uncompetitive in the global marketplace.

The motion I have offered contains no new spending, no new tax cuts. Instead, it simply prevents a tax increase. That, I submit, is not what rule XXI was designed to prevent. And I urge the speaker to reject the point of order.

Since that was an awfully quick ruling, Mr. Speaker, I most respectfully do appeal the ruling of the Chair because this may be the only opportunity we have to veer from this tax increase interpretation so that we can clear a bill that the Senate will pass and the President will sign.

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.

Mr. Speaker, I yield myself so much time as I may consume.

Mr. Speaker, my good friend, the distinguished chairman of the Ways and Means Committee, Mr. Rangel, makes a number of points in support of the PAYGO rule, which forms the basis of the requirement in this bill to raise taxes on one set of taxpayers in order to prevent a tax increase on another set of taxpayers. I just want to talk about why this rule, I believe, has been treated in a way that nobody who ever came up with the idea of PAYGO meant for it to be treated.

If we were to go out on the street, Mr. Speaker, and pull aside an average person on the street and say, we're thinking about instituting in Congress a PAYGO rule. And what that means is, if we cut taxes somewhere, we have to pay for that by increasing taxes somewhere else or decreasing spending somewhere else.

Okay. That sounds reasonable.

Well, it also means that if we increase spending in some program, or if we create a new spending program, we either have to decrease spending somewhere else or raise taxes to pay for that increased spending.

Oh, well, yeah, that sounds reasonable.

But, then if you tell that person, and, oh, by the way, we're going to assume that we have more revenue next year, and that revenue is going to be produced by this set of taxpayers. They're not paying it now, but we're going to assume that next year they will pay it. And in order to relieve them of that assumption that they're going to pay for in taxes, we're going to increase taxes on this group of taxpayers over here. How's that sound?

The average person, Mr. Speaker, I would submit, would say that doesn't make much sense. And it doesn't make much sense. In fact, Mr. Speaker, it puts this House and this Congress in a fiscal straitjacket with respect to tax policy and fiscal policy.

Now, the chairman has said himself, this AMT thing is crazy. It was never meant to apply to middle-class taxpayers. It was a mistake. Well, why don't we just admit the mistake and get rid of it? If it was our mistake, let's correct the mistake by getting rid of it. We never meant to collect this level of revenues that are anticipated in the CBO baseline.

I don't want to talk about the CBO baseline because folks in America don't understand the CBO baseline. But that's the genesis of all this tax raising that the majority is about to undertake here. And we ought to stop it today. This is the first step.

I feel like the little boy in Holland sticking his thumb in the dike. If I'm not here today to stick my thumb in the dike and stop this bill from passing and expose the flaws of this PAYGO system, we're going to have a torrent, a flood of tax increases over the next 10 years.

In fact, the CBO, with the assistance of the Joint Tax Committee, has determined that if this PAYGO rule that governs this bill today stays in place, we're going to increase taxes on the American people over the next 10 years $3.5 trillion.

Mr. Speaker, that is the largest tax increase in either nominal terms or real terms in the history of this country. Now, is that what the Democratic majority wants for this country?

Do they want to take a chance on increasing taxes to that extent on the American people at a time when we have a housing crisis, when the dollar's value is dropping? I hope not.

Today is the day we expose this very flawed and dangerous PAYGO policy by defeating this bill today, Mr. Speaker.

Mr. Speaker, although I cannot support this bill, I strongly support extension of the AMT patch and most of the provisions of current law extended in this bill. Congress should protect the 19 million Americans who are at risk of paying the AMT this year. Congress should also extend individual and business tax incentives important to the Nation's economy.

Unfortunately, at its core, this bill is not about the AMT or extenders. It is about the elevation of form over substance and the decision of the Congress to bind itself to the mast of Paygo, wherever it may lead.

While there may be valid reasons to apply the principles of Paygo to spending changes, we think the calculus is far different in the case of tax policy.

As we amply documented during the Ways and Means mark-up of this bill, the majority's budget assumes that the Federal Government will generate revenue from allowing the AMT to continue to plague taxpayers and from allowing the 2001 and 2003 tax cuts to sunset. These budget assumptions will have the effect of raising taxes on the Americans people by $3.5 trillion over the next decade. Paygo forces Congress to decide whether to let those tax increases take place or replace them with other tax hikes.

It is true that under the current iteration of Paygo, tax cuts could be ``paid for'' by spending cuts, but we have seen no appetite of the current majority for such as sensible approach. For bills both small and large, the Ways and Means Committee has become an ATM for other committees, spitting out tax increases of whatever shape or size is deemed necessary to meet the new majority's appetite for additional spending. Indeed, this House

has already passed over $100 billion in tax increases this year alone.

What Paygo has become, as embodied in this bill, is far more breathtaking. Here, it is being invoked as a reason for Congress to raise taxes in order to prevent a tax increase.

Let me say that again, the majority has created a rule under which Congress must raise taxes in order to prevent a tax increase. Let me give an example utilizing the context of this bill.

If Congress does not enact this legislation, Americans will pay about $70 billion more in taxes next year. If we pass this bill, Americans will pay about $70 billion more in taxes next year. What's wrong with this picture? Either way it's a tax increase.

And let us keep in mind that this bill imposes mostly permanent tax increases to pay for temporary tax cuts. Even if this bill passes, we will be back here again next year struggling to find another $70-plus billion in tax increases to ``rent'' one more year of expiring provisions.

Unfortunately, this is just a baby step. Under the next President, we seem likely to face large tax increases in order to ``prevent'' a tax increase on families with children, tax increases on marriage, marginal tax rate increases, or tax increases on estates. And that's before we are asked to enact other tax increases to pay for new tax incentives or new spending programs.

Raising taxes to prevent a tax increase shows the danger of turning a bumper sticker into a budget rule.

According to estimates the Congressional Budget Office and the Joint Tax Committee, Federal revenues in fiscal year 2007 totaled about 18.6 percent of our economy, well above the historical average of 18.2 percent.

The Joint Tax Committee estimates that over the next decade if we continue to operate in this Paygo straitjacket, revenues will reach 20.1 percent of GDP in 2017, a level seen only once since 1962. Think about it--this bill is the first step in endorsing what will be, in both nominal and real terms, the largest tax increase in the history of the United States.

We may well pass this bill today, but what happens next is anyone's guess. The Senate has given us strong and repeated signals that they intend to reject offsets to pay for an AMT patch and the administration has issued a veto threat. This all suggests we will spend more days debating this issue, even as the continued delay threatens to make the coming tax filing season chaotic.

As the Secretary of the Treasury warned us last month, ``enactment of a patch in mid-to-late December could delay issuance of approximately $75 billion in refunds to some 50 million taxpayers who are likely to file their returns before March 31, 2008.'' That would be on top of the confusion it will cause taxpayers and the added costs the Federal Government will pay to print new forms and provide assistance to perplexed taxpayers.

Simply put, we should stop this charade and recognize that we need to promptly pass a patch and extenders package that the Senate can pass and that the President can sign. If we fail to do so today, the cost of delay and inaction on the AMT patch will continue to mount.

I urge defeat of the bill so that the Ways and Means Committee can promptly put together a package that has a chance of making it to the President.

I reserve the balance of my time.

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished minority whip, Mr. Blunt of Missouri.

Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Herger), member of the Ways and Means Committee.

Mr. Speaker, I yield 2 minutes to the distinguished ranking member on the Health Subcommittee of the Ways and Means Committee, Mr. Camp.

Mr. Speaker, I yield 1 minute to the gentleman from Texas, the distinguished ranking member of the Social Security Subcommittee (Mr. Sam Johnson).

(Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the distinguished ranking member of the Select Revenue Measures Subcommittee, in which some of this bill was developed, Mr. English.

Mr. Speaker, at this time, I yield 2\1/2\ minutes to a distinguished member of the Ways and Means Committee, the gentleman from New York (Mr. Reynolds).

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

Mr. Speaker, I yield 2 minutes to the distinguished member of the Ways and Means Committee, Mr. Brady from Texas.

Mr. Speaker, may I inquire as to the time remaining for each side.

Mr. Speaker, I yield 2 minutes to the distinguished ranking member of the Budget Committee and a member of the Ways and Means Committee, Mr. Ryan from Wisconsin.

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

Mr. Speaker, the gentleman's enthusiasm for his point of view doesn't make his point of view correct. In fact, Republicans time and time again protected taxpayers, middle-class taxpayers, from the application of the AMT. That is why there's a patch in place today; that is why last year those 21 million taxpayers didn't pay the AMT. In 1999, I would tell the Speaker to inform the gentleman, the Republican Congress repealed the AMT and, unfortunately, President Clinton vetoed that repeal. So I would take issue

with the gentleman's characterization of the Republican Congress's actions with respect to this issue.

At this time, Mr. Speaker, I yield 2 minutes to the distinguished member of the Ways and Means Committee, the gentleman from Virginia (Mr. Cantor).

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

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

Mr. Speaker, I yield 1 minute to the gentleman from New Jersey (Mr. Garrett).

Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Campbell).

Mr. Speaker, I yield 1 minute to the gentleman from New York (Mr. Fossella).

Mr. Speaker, I yield myself 1 minute.

There has been a lot said here on the floor today and a lot of it is one person or one party's spin on the facts or on history. The distinguished majority leader put his spin on history. I would just like to point out to the House that for the last 6 years of the Clinton administration, which was bragged about so by the majority leader, there was a Republican-controlled Congress. Under the Constitution, the Congress controls the purse strings of the country and develops fiscal policy. And under our fiscal policy, we balanced the budget and created a surplus.

Then when President Bush came into office, he inherited a recession, a short-lived recession, admittedly, but still a recession. And then we had 9/11 which was a shock to the economy and then we had war. Every time in this Nation's history that we have had either a recession or a war, we have had a deficit. This time is no different. But, under our policies, we are producing this year 18.6 percent of GDP for Federal revenues and that is above the historic average. Why do we need more, Mr. Speaker? This bill would add to that. We don't need to.

Mr. Speaker, to close the debate for our side, I recognize for the remaining time the gentleman from Ohio (Mr. Boehner), the distinguished minority leader.

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.

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

Today's bill, Mr. Speaker, represents a clear difference between the two parties in the House when it comes to tax policy. Republicans believe that Congress should not raise taxes on one group of taxpayers in order to prevent a tax increase on another set of taxpayers. To say that another way, we don't believe we ought to have to raise taxes to preserve something that's already in the Tax Code.

Now, we are certainly for continuing to patch the alternative minimum tax. That's been the practice for the last several years. The President, in his budget for the last several years, has had an AMT patch in his budget without increasing taxes on somebody else. So we are certainly for that. But we are not for imposing a tax increase in a like amount on another set of taxpayers. That just doesn't make sense to us.

Without this patch, another 21 million families would come under the AMT, and their average tax increase would be about $2,400 per taxpayer. So we certainly want to prevent that. But in 2007, we had the patch in place; so we did not collect the AMT revenue from those 21 million taxpayers. And yet we collected, last year, in revenues to the Federal Government, about 18.7, 18.8 percent of gross domestic product. The historic average of revenues coming into the Federal Government for the last 40 years has been about 18.3 percent of GDP. So last year with the AMT patch in place, those 21 million taxpayers protected from the AMT, we brought in substantially more in revenues to the Federal Government than we have historically.

So why, then, should we be so intent on increasing taxes to prevent those 21 million taxpayers from paying $2,400 apiece more in taxes in 2008? The only explanation is somebody just wants to get more revenue into the Federal Government. Now, they may say, well, we want to do that because the deficit is really high and we want to get the deficit down. Well, I wonder, if we took a poll across America, how many Americans would say, ``Yes, I want to get the deficit down and I want to do it by raising taxes'' and how many Americans would say, ``Yes, I want to get the deficit down, but I want to do it by controlling spending''? My guess is more Americans would say, ``I want to get the deficit down by controlling spending.'' But the PAYGO rules that are in effect, while they give us the opportunity to reduce spending to ``pay for'' all of these things, not once have we seen a cut in spending being offered by the majority to pay for any of these items. It's always a tax increase.

So, yes, if you want to get the deficit down to zero, you can do it by increasing taxes, and under the PAYGO baseline, if we were to follow it, we would continue to increase the take of the Federal Government from American taxpayers until at the end of a 10-year window we'd be taking in 20.5 percent of GDP, an historic high, or pretty close to an historic high, and certainly only a couple times in our Nation's history have we even approached that level of revenues coming into the Federal Government.

Now, I think it's a legitimate question as to what is the appropriate level of GDP that we should bring in to the Federal Government, and Chairman Rangel alluded to that in his statement by saying that, I believe he said, the President hasn't offered a tax reform plan. That's true, I guess, he hasn't. But you know what? Under the Constitution, the President can't even introduce a bill, much less pass one. That's the job of the Congress.

So if we want to do tax reform, which I think is appropriate, we ought to have this discussion about what is the appropriate level of revenue that we should bring in? What is the appropriate take of the Federal Government of everything that Americans make? Is it 18.3 percent, the historic average? Is it 18.7 percent, what we took in last year? Or is it 20.5 percent? I don't know what the magic number is, but that's a legitimate debate, and we ought to have that debate in the context of writing a new tax system for the United States that is more modern, more efficient, and more competitive. So I hope that the chairman will, in his constitutional prerogative as the chairman of the Ways and Means Committee, undertake that task, have that debate, so that we can solve this problem once and for all of the AMT, the complexity of the code, and the continuing diminution of competitiveness that we enjoy with our tax system, vis-a-vis our competitors around the world.

This bill employs some pay-fors, some tax increases, that I believe would be onerous and would add to the lack of competitiveness in our Tax Code. For example, there is a provision that would, for the first time, ignore tax treaties that we have entered into in good faith with other countries around the world and would impose upon companies doing business, foreign companies doing business, through a United States subsidiary in this country, creating jobs in this country, a 30 percent tax, despite the fact that we have a tax treaty that says that company would get a deduction for that income and would not have to pay that 30 percent tax because they'd be paying taxes in the country where we have a tax treaty.

Now, yes, they say, well, but the ultimate parent is somewhere where there's not a tax treaty, but that still violates the spirit of the tax treaty that we have with the country where the immediate parent of the United States subsidiary resides. That change in our Tax Code would discourage at the margin that capital from coming to this country, being invested in this country, and creating jobs in this country.

Those companies that I'm talking about employ a substantial number of Americans; 5.3 million Americans are employed by those kinds of companies. Do we want to jeopardize those jobs? And 19 percent of all United States exports, helping us a little bit to get the balance of trade going our way, 19 percent of all exports come from companies like that. And just last year they reinvested nearly $71 billion back into their United States operations. That's capital, that's investment that we should want here and not discourage through tax changes like the one in this bill.

So, Mr. Speaker, I would say to the Members of this body that we ought to reject the majority's offering that they put forward today to save 21 million taxpayers from coming under the AMT because they would impose a like amount of tax increase on another set of taxpayers. Let's not increase taxes on any set of taxpayers, certainly not in this fragile economy.

We will later offer a motion to recommit that corrects the error, that strips the bill of the pay-fors, and it would allow this body to vote on a clean AMT patch to save those 21 million taxpayers from the increased tax burden but not increase taxes on somebody else.

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

Mr. Speaker, I have a motion to recommit at the desk.

I am opposed to the bill in its current form.

Thank you, Mr. Speaker.

The majority's use of PAYGO has really twisted the logic of this bumper-sticker-turned-budget-tool into a pretzel. In the last 2 weeks, when PAYGO stood in the way of more government spending, it was ignored or openly waived. But, today, the majority insists on new permanent tax increases in exchange for a 1-year extension of needed tax relief. That is not a good deal for anybody--a permanent tax increase to pay for a temporary tax relief.

The motion that we have before us would save us from that fate. It would remove the tax increases in the bill, including the particularly misguided higher taxes on energy production that would discourage production here at home, that would further increase our energy insecurity, that would reduce our energy supplies, and that would increase prices.

Is that what we want to do? Do we want to increase the price of gasoline? That is what the effect of this would be. This is a tax increase on oil and gas companies--the companies that produce the oil, the gasoline that we buy. Do we think that, if we increase taxes on them, they are just going to absorb that? Of course not. They will pass it through to the consumer, which will mean higher gasoline prices.

This is a terribly misguided part of this bill. The motion to recommit would get rid of that ill-advised tax increase. So we get rid of all the pay-fors in the bill. That's the first thing that the motion to recommit does.

The second thing we do is we do provide some relief in this bill from high gasoline prices to volunteers who use their vehicles to help charities carry out their work. A lot of charities are telling us that they are losing volunteers because of the high price of gasoline.

Now, the IRS has some authority to modify the tax deduction that people can get from using gasoline in certain situations. So the IRS did, this week in fact, implement a midyear increase in the standard mileage deduction rates, increasing to 58\1/2\ cents the allowable deduction for expenses incurred in operating a vehicle while carrying on a trade or business, and raising to 27 cents per mile the deduction for gasoline costs associated with transportation primarily for and essential to receiving medical care and for travel while moving.

But the IRS could not raise the deduction that can be claimed by individuals who use their car for charitable purposes, such as for delivering Meals on Wheels. That has to be done legislatively. So our motion to recommit would do just that. We would set the allowable deduction for gasoline expenses for charitable purposes at the same rate for medical care and for travel while moving, 27 cents per mile.

Meals on Wheels is one of those charities that has told us that they are losing volunteers because of gas prices. Nearly half indicated that increases in gas prices had forced them to eliminate meal delivery routes or to consolidate their meal services.

Mr. Speaker, these high gasoline prices are, in fact, having a very deleterious effect on charities and on Meals on Wheels in particular. I won't go into some of the details that we have been given by Meals on Wheels about the state of some of our seniors, but needless to say, it's not a pretty picture.

So this would give those charities some relief, Mr. Speaker, and it would allow them, we think, to get some of those volunteers back in active service to relieve some of these problems that we have.

So, Mr. Speaker, our motion to recommit does two things. It takes out the tax increases in this bill, leaving in place the AMT patch to give tax relief to those taxpayers who would otherwise be subjected to a $2,400-apiece increase in taxes, and number two, it increases the deduction, the mileage deduction, for vehicle use for charitable purposes.

Mr. Speaker, I urge its adoption.

Mr. Speaker, on that I demand the yeas and nays.

I thank the gentleman for yielding.

Mr. Speaker, this debate must be somewhat confusing for the American public. First of all, almost every one of us stands and says that we want the alternative minimum tax fixed. We want it fixed because of the presumption of the alternative minimum tax, which I support and which I will not vote to repeal unless we pay for it. I want you to know that I speak as the father of three daughters, as the grandfather of three grandchildren, and as the great-grandfather of one great-granddaughter. I have listened to this debate. I am going to speak about this debate, and I am going to refer to history. My friend Mr. Ryan knows what I am going to say because I have said it before, but I believe the American people need to know this.

Let me place it in context. I have served in this body for 26 years. During that time, Republican Presidents have served for 18 of those years. A Democratic President, President Clinton, served for 8 of those years. During the Presidencies of President Reagan, President George Bush and the present President Bush, we have accumulated deficits in America of $4.1 trillion of deficit spending.

Now, there is only one person in America who can stop spending in its tracks. Just one. Not me, not anybody on this floor. We need 217 other people to do that with us. But one person can stop spending in its tracks. And in the 26 years that I have been in the Congress of the United States, no President has had a veto of a spending bill

that spent too much overridden. Not one.

This President has vetoed no spending bills under Republican Congresses. Not one. No matter how much they spent. And, by the way, ladies and gentlemen of this House, they spent at twice the rate of growth that the Democrats under President Clinton spent.

Now, Republicans were in charge of Congress, but they were in charge of everything during the first 6 years of this century. Everything. House, Senate, Presidency.

My friend made the observation that neither side had done too well. I would suggest my side has done a lot better. Because under my side in those 8 years of the Clinton administration, we had a $62.9 billion net surplus after 8 years, and we didn't have to raise the national debt one time in the last 4 years after we got the deficits created under the Reagan administration and the first Bush administration down, from a $292 billion operating deficit when we took over to surpluses during the last 4 years, and a straight line of reduction every one of the first 4 years of the Clinton administration.

Why? Because we Democrats believe in spend and pay. You simply believe in spend and borrow. You believe that it is a politically wise policy to pursue that ``don't tax the voters, tax the children.'' Tax the children. Delay the ramifications of spending until tomorrow and tomorrow and tomorrow, when the children will have to pay the bill, because, after all, they are not voting.

I have heard a lot of wringing of hands about PAYGO. I know you are all waiting to hear me read a quote, so I will read it to you. ``With the other body unable to pass even a budget this year,'' that was referring to a Republican Senate, by the way, ``we were obviously unable to reach an agreement on legislation to extend PAYGO and other budget rules. It is my hope that this can be done next year as part of a normal budget process. I would close by reminding our colleagues and Members that the PAYGO rule contributed to taming of deficits over the past seven years, and it is my hope that a successor to PAYGO can be developed and coupled with caps on discretionary appropriations.'' That quote, of course, comes from Jim Nussle.

As a matter of fact, President Bush's administration also said that they were for PAYGO, until they found out that PAYGO applied to cutting revenues. And because they didn't want to stop buying, I say to my friends on the Republican side of the aisle, and you knew that you would be constrained in buying if PAYGO applied to your tax cuts, which I supported for the middle-class but not for the skewing of taxes that I saw in your proposals, that you would have to stop spending, because you couldn't pay for it. So you jettisoned PAYGO, a premise that was overwhelmingly adopted by Republicans and I voted for in the 1997 Budget Act, because I believe in balancing our budget.

I have served in legislative bodies for almost 40 years, and I have found people who like to vote for spending but don't like to vote for paying. It takes no courage whatsoever, I tell my friends, to take my credit card out of my pocket and put it in there, sign the little slip and think I will never have to pay for it, because, by the way, I will be dead and gone by then and my children will have to pay the debt. That has been referred to by Mr. Portman as an immoral policy, Rob Portman, the former Director of the OMB, a former member of the Ways and Means Committee.

Mr. Speaker, I rise in very, very strong support in favor of this tax cut for millions of Americans. Will there be an offset? There will be. And, as I said, I will not vote to fix the AMT unless we pay for it. Because if we fix the AMT without paying for it, what we will say to people like Steny Hoyer and every Member of this House, maybe we have a conflict of interest, because every Member of this House is going to be affected by this if we don't repeal the AMT, for those of us at this income level.

So maybe we have a conflict of interest. Maybe we want to save ourselves a little money, but we don't want to pay for it, because raising revenues takes political courage. There is no courage whatsoever in plunging our country into debt, spending and not paying. It is, as Rob Portman said, an immoral policy, lacking in courage and lacking in fiscal responsibility.

My friends, we need to pass this bill and give millions of Americans a tax cut and ensure that millions of Americans will not get a tax increase. PAYGO is a policy that demands responsibility.

Many of you voted for the bankruptcy bill, as I did. I was criticized by some because we thought that individuals ought to exercise fiscal responsibility in the managing of their finances. I think corporately as a government we ought to do the same.

Mr. Speaker, let no one be mistaken. This is precisely what this legislation offered by Chairman Rangel was designed to do, give a tax cut to millions of Americans and preclude millions of Americans from paying more, and asking other Americans to pay their fair share so those at the bottom of the rung don't have to pay more to defend our country, to educate our children, to keep our families healthy.

Mr. Speaker, this tax cut will provide 30 million homeowners with property tax relief. It will help 12 million children by expanding the child tax credit. It will help 4.5 million families better afford college with tuition deductions. It will save 3.4 million teachers money with deductions for classroom expenses.

My wife was a teacher. She died 10\1/2\ years ago. She was one of the best people that I have ever met in my life, if not the best. Every year, we would spend a couple of hundred dollars, and we could afford it, maybe even a little more than that, to make sure that her kids in her classroom had things that they needed but were not provided. We are going to give teachers a tax cut to do that. Our children will be served and our teachers will be served.

In short, this bill will extend tax credits and deductions that will benefit a wide array of Americans and the American economy. And, yes, this legislation helps to restore tax fairness and once again demonstrates that this Democratic majority is committed to fiscal responsibility.

Let me restate that figure: 18 years of Republican Presidents, $4.1 trillion of deficit spending. Under Bill Clinton, 8 years, $62.9 billion net surplus. No indebtedness. No indebtedness in the last 4 years.

We are now over $9 trillion in debt. This administration has gone from $5.7 trillion to over $9 trillion. Republicans were in control of everything, and spending escalated at twice the rate it did when Bill Clinton was President.

My friends, this bill is a fair bill. This bill is responsible. This bill gives tax cuts to millions of Americans and asks some few Americans to pay their fair share. Vote for this bill. It is good for America, it is good for our people, it is the right, and as Rob Portman said, the moral thing to do.

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

I rise in support of the AMT Relief Act of 2007. We are here again in an effort to protect 23 million American taxpayers from higher taxes on April 15. Almost 19 million of those taxpayers have never paid AMT before, and some indeed have not even heard of AMT. With this bill, we can ensure that it stays that way.

My district alone will see an increase from 7,300 families hit by AMT to 67,000 people hit by AMT. We have individuals across this country, including Maggie Rauh from my district who is a CPA and who testified that her family income is at $75,000. She takes the standard deduction. They have three children. She is going to pay AMT. That family trip to Disneyland next year is on hold.

Joel Campbell of Loudoun County, Virginia told the committee that his family had to choose between saving more for retirement or paying for college. Higher taxes because of AMT are forcing middle- and upper middle-income families to make these difficult choices.

So we all agree that AMT should not be affecting these working families, but we cannot agree on how to do it. And that is the point: Everybody agrees that it has got to be fixed. The Republicans propose to borrow $50 billion; we intend to proceed with paying for this issue. When I hear the argument that we should forget about it because it was never intended to hit middle-income people, as Mr. Rangel noted, I would like to try that on my creditors.

The Republicans believe that we should not offset this tax increase for middle-income people. Indeed, the President's budgets for the last few years have all counted on this revenue, and he projects next year precisely the same thing.

We made a pledge earlier this year to the American taxpayer that we would do no harm to the Federal budget. So if we lower tax revenues, we have to make up for that loss and not add to the deficit. That PAYGO pledge is difficult and painful, but most sensible.

The bill that we bring before the House today is a smaller package than before. The expiring provisions and the carried interest revenue raisers are gone. In the face of opposition to our offsets, we cannot retain this package because of the expiring tax provisions. It is my hope that we can turn to these provisions again in the near future and perhaps, if necessary, make them retroactive, indeed.

This bill provides that offshore hedge fund managers not enjoy unlimited deferral from any taxation on their compensation. We have all seen the news reports of these hedge fund people deferring hundreds of millions of dollars in compensation offshore because of a tax loophole. This bill closes that loophole, and it gives tax relief to 23 million families.

The bill also provides that a corporate tax shelter abuser be subject to new rules requiring economic substance in transactions. Let me interpret. It has to be for real. By cracking down on tax shelter abusers, we are able to provide tax relief to the families of 13 million children in minimum wage households who get little or no refundable child tax credits.

The bill is simple. The bill is straightforward. Despite some opposition, we are going to persevere in our path to responsible tax cuts. Ecclesiastes teaches us that the race is not always to the swift nor the battle to the strong. That does not affect our conviction here that we intend to persevere on the right path. We stand by our pledge to the American taxpayer and hope to convince others to join our battle today.

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

Mr. Speaker, let me clarify what the gentleman just said. He came the same day that I did. He is one of the better Members to serve here, and I personally and professionally am going to miss him.

Let me clear up what he just said. He said let's borrow the money to pay for this issue. We are saying let's pay the bill now.

Mr. Speaker, with that, I would like to introduce the Speaker of the House of Representatives for a long 1 minute.

Mr. Speaker, there are only two ways to respond: Either you borrow the money or you ask people who are hiding money in offshore accounts to pay for it, and that is what we are doing. People who are hiding money in island communities are being asked to give tax relief to 23 million people.

And with that, I yield to the gentleman from Michigan (Mr. Levin), the chairman of the Trade Subcommittee of Ways and Means.

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

Mr. Speaker, we cannot predicate our actions in the House of Representatives on the basis of what the President might or might not do. Article I of the Constitution mentions Congress as the first branch of government for good reason, to keep a check on the executive, not vice versa.

Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Becerra).

Mr. Speaker, what my friend, Mr. Ryan, just said, he's really a good guy here. He simply said that our priority was a bit confused. Our priority is clear. Cut taxes for 23 million Americans and close an offshore account.

With that, I would like to yield 2 minutes to the gentleman from Texas (Mr. Doggett).

Mr. Speaker, I need to quickly correct the record. In 1969 when the alternative minimum tax was put in place, it was not a Democratic scheme. The vote was 389-2 in this House of Representatives.

With that, I would like to yield 1 minute to the gentleman from Georgia (Mr. Scott).

Mr. Speaker, without this bill passing, there are 74,000 people in Mr. Cantor's district that will pay alternative minimum tax next year.

With that, I would like to yield 2 minutes to the gentleman from California (Mr. Thompson).

Mr. Speaker, one of the reasons I like Mr. McCrery is because I think he's one of the smartest guys that serves here in this institution, and let me just say this.

I agree with what he said. If you stop 23 million people from getting a tax increase, that is tax relief. There are 33,000 people tonight in Mr. Hensarling's district that are going to pay alternative minimum tax if we don't pass this legislation.

Mr. Speaker, with that, I yield 2 minutes to the gentleman from North Dakota (Mr. Pomeroy).

Mr. Speaker, I thank the gentleman for clarifying the issue of why we should borrow the money. With that, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Speaker, might I inquire as to how much time remains on each side?

With that, I would like to yield 2 minutes to the gentleman from New Jersey, who has been a longtime advocate of repealing the AMT, Mr. Pascrell.

Mr. Speaker, I would like at this time to yield 1 minute to the gentlewoman from Nevada (Ms. Berkley).

Mr. Speaker, I would like to yield 1 minute to the gentlewoman from Pennsylvania (Ms. Schwartz).

Mr. Speaker, I would like to recognize the gentleman from New York (Mr. Crowley) for 1 minute.

Mr. Speaker, I yield for the purpose of making a unanimous consent request to the gentlewoman from New York (Mrs. Maloney).

(Mrs. MALONEY of New York asked and was given permission to revise and extend her remarks.)

I would like to call upon at this time the majority leader of the House of Representatives, my friend, Mr. Hoyer, to close the debate on our side.

Mr. Speaker, I would ask unanimous consent that all Members have 5 days in which to revise and extend their remarks.

Mr. Speaker, I make a point of order that the motion to recommit violates clause 10 of rule XXI because the provisions of the measure have the net effect of increasing the deficit over the requisite time period. The cost of 1 year of AMT relief is $50 billion, and the motion contains no provisions to pay for that relief.

Mr. Speaker, I insist on my point of order.

Mr. Speaker, I move to table the motion to appeal.