Mr. Speaker, I first want to thank the gentleman from Oklahoma (Mr. Cole), my good friend, for yielding me the customary 30 minutes, and I yield myself such time as I may consume. Mr. Speaker, today…
Mr. Speaker, I first want to thank the gentleman from Oklahoma (Mr. Cole), my good friend, for yielding me the customary 30 minutes, and I yield myself such time as I may consume.
Mr. Speaker, today we are breaking a record yet again for the most closed Congress ever. The majority has broken their own record for the most closed Congress in history. Again and again, they have wasted time, money, and energy on legislative proposals designed to distract us from the problems at hand. And that certainly is true today.
The American people are hoping that Congress will create jobs, expand educational opportunities, and support working families, but instead, we insist on spending millions of dollars on investigating made-up scandals and adding billions and billions to the deficit.
Today we have one rule for two bills: first, the bonus depreciation bill, and, second, the Financial Services Appropriations bill, two bills with nothing in common except to highlight the majority's insistence of choosing policy over people.
Now, H.R. 4718 would make bonus depreciation permanent. This is a policy that maybe you have never heard of, but it is a policy that used to be bipartisan and still would be on a 1- or 2-year basis, like the Senate has proposed. It is designed as a temporary measure, and I emphasize ``temporary'' because if it isn't temporary, it is not effective.
Bonus depreciation gives businesses an extra large immediate tax deduction for a portion of the cost of investments in equipment. Instead of spending more of the deduction over future years, it incentivizes purchasing equipment now in order to provide an immediate boost to the economy, instead of in the future when the incentive may not be available.
And that is how it has always temporarily worked. But if we make it permanent, then the taxpayers are simply subsidizing the cost of the equipment that businesses would need to purchase anyway.
My good friend from Oklahoma (Mr. Cole), who is as good a businessman as he is a Congressman--and that is saying a lot--said yesterday that in 2003, his small business went out and bought $100,000 worth of computers specifically because he could take advantage of the bonus depreciation, which was in place and was a very smart thing for him to have done. And that is exactly how bonus depreciation is supposed to work.
Mr. Cole knew computers would be cheaper at that time than in a year or two, when the tax credit would have expired. So he spent the money on equipment. And that surely helped the economy, and I am sure it created some jobs.
But why would Mr. Cole buy the computers immediately if he knew the tax credit would be there forever? He wouldn't, I don't believe. We will talk about that later.
This tool was put in place between 2002 and 2005, at 30 percent and then at 50 percent. It was reenacted in 2008 and then extended four times, often as part of a larger stimulus package, most recently at 50 percent. That expired at the end of 2013.
Now, when enacted as a temporary measure, there has been bipartisan support. However, the bill we have before us intends to make it permanent, completely negating the purpose of the bonus depreciation as a temporary measure.
The nonpartisan Congressional Research Service looked into the change, and they said, ``Its temporary nature is critical to its effectiveness'' and that bonus depreciation ``was enacted for a specific, short-term purpose.''
Mr. Speaker, I would like to now insert the Congressional Research Service's report, ``Bonus Depreciation: Economic and Budgetary Issues,'' from March 24, 2014, into the Record.
[From Congressional Research Service,
Mar. 24, 2014]
Bonus Depreciation: Economic and Budgetary Issues
(By Jane G. Gravelle, Senior Specialist in Economic Policy)
Summary
The Tax Extenders Act of 2013 (S. 1859), which would extend
expiring tax provisions for a year, includes bonus
depreciation. The temporary provisions enacted in the past
for only a year or two and extended multiple times are
generally referred to collectively as the ``extenders.'' One
reason advanced for these temporary provisions is that time
is needed to evaluate them. Most of these provisions,
however, have been extended multiple times, and some suggest
that these provisions are actually permanent but are extended
a year or two at a time because permanent provisions would
significantly increase the costs in the budget horizon.
Historically, bonus depreciation has not been a traditional
``extender.''
Bonus depreciation allows half of equipment investment to
be deducted immediately rather than depreciated over a period
of time. Bonus depreciation was enacted for a specific,
short-term purpose: to provide an economic stimulus during
the recession. Most stimulus provisions have expired. Bonus
depreciation has been in place six years (2008-2013),
contrasted with an earlier use of bonus depreciation in place
for three years. Is bonus depreciation temporary or
permanent? The analysis of bonus depreciation differs for a
temporary stimulus provision, compared to a permanent
provision that can affect the size and allocation of the
capital stock.
A temporary investment subsidy was expected to be more
effective than a permanent one for short-term stimulus,
encouraging firms to invest while the benefit was in place.
Its temporary nature is critical to its effectiveness. Yet,
research suggests that bonus depreciation was not very
effective, and probably less effective than the tax cuts or
spending increases that have now lapsed.
If bonus depreciation is made permanent, it increases
accelerated depreciation for equipment, contributing to
lower, and in some cases more negative, effective tax rates.
In contrast, prominent tax reform proposals would reduce
accelerated depreciation. Making bonus depreciation a
permanent provision would significantly increase its
budgetary cost.
Compared to a statutory corporate tax rate of 35%, bonus
depreciation lowers the effective tax rate for equipment from
an estimated 26% rate to a 15% rate. Buildings are taxed
approximately at the statutory rate. Total tax rates would be
slightly higher because of stockholder taxes. Because nominal
interest is deducted, however, effective tax rates with debt
finance can be negative. For equity assets taxed at an
effective rate of 35%, the effective tax rate on debt-
financed investment is a negative 5%. The rate on equipment
without bonus depreciation is minus 19%; with bonus
depreciation it is minus 37%.
If bonus depreciation is permanent, estimates of U.S.
effective tax rates reflecting concerns that the U.S. rate is
higher than that of other countries overstate the effective
U.S. corporate tax rate; U.S. effective tax rates on
equipment would be significantly lower than the OECD average.
Moving to permanent bonus depreciation is inconsistent with
tax reform proposals made by the Wyden-Coats bill, the Senate
Finance Committee Staff discussion draft, and Chairman Camp's
proposal. All of these proposals would reduce the current
accelerated depreciation for equipment.
The usual extenders cost a fraction of the cost of
permanent provisions in a 10-year budget window, but bonus
depreciation is a smaller fraction because it is a timing
provision. A one-year extension costs $5 billion for FY2014-
FY2024, less than 2% of the cost of $263 billion for a
permanent provision.
What the majority is fond of saying is that this bill would bring in $10 billion in revenue. And I heard it over and over again at the Rules Committee last night, that we are going to have $10 billion in revenue. But what they fail to say is that over 10 years, it is going to cost us $287 billion, nearly $300 billion, which could buy us a lot of high-speed rail, a lot of bridge infrastructure, a lot of highway work. But what we are now doing is a permanent subsidy to make tax cuts to every business that wants to buy equipment.
Now, the nonpartisan Joint Committee on Taxation scored this at $287 billion over 10 years. We are not making that up. The majority is cobbling together a piecemeal approach, and it will not work. We would love to have tax reform, we cry out for tax reform, but this isn't it.
To cap it all off, this is another closed rule. And let me say what that means. Even if a Member wanted to offer an amendment to pay for the nearly $300 billion cost of this bill--which is the rules under which we operate, you know, PAYGO--they wouldn't be allowed.
There are so many better things to spend that $300 billion on, the things that we really need in this country. But the closed rule ensures that it would stifle the debate and hijack the process. And, more than that, we know the Senate will not take this up.
So, once again, we are doing a bill that might make some people feel good but not if they think about it a little bit. Because even the businesses who are going to be prospering from the tax decrease are going to be responsible for the loss of $300 billion.
So with the second bill, which is H.R. 5016, the Financial Services Appropriations, the majority is cherry-picking which agencies to fund and which to strangle for purely political purposes. They will continue chasing down the all-but-defunct IRS conspiracy rabbit, getting funding for the IRS but making it so that $2 billion worth of the tax revenue will not be collected because they have cut the budget of the IRS so much. So add that $2 billion to the $300 billion that we are voting on today for depreciation, and add that onto the deficit, too, since it is not paid for.
In addition, as the majority crisscrosses the country touting states' rights, they have also put forward legislation that obstructs, once again, the District of Columbia's home rule by restricting funding for constitutionally protected medical care. The majority insists on ensuring that women are second-class citizens, and they continue to chip away at our constitutional rights.
Furthermore, this bill continues to prevent multi-State policies under the Affordable Care Act from providing coverage for abortions under the Federal Employees Health Benefits program, except in the most desperate of circumstances.
We need to say over and over again that, of the women in this country who are using birth control, 58 percent--more than half of them--are using it for medical reasons. And they are being deprived. Mr. Speaker, 58 percent of the women in this country who are using prescription contraception are using it because they have medical issues, and it is expensive. But we will not let them get any help because we simply don't believe in providing health care for women.
Government workers deserve the same benefits and the same access to comprehensive health care as those in the private sector enjoy. It is, in fact, dangerous for the majority to target abortion care and require its exclusion from health insurance plans that include other important and necessary reproductive health services. Women expect and deserve the best health care and coverage that fits their needs.
And let's remember that 58 percent of the women who use oral contraceptives use them for medical purposes, not just for birth control.
I would like to be able to say that women should expect their government to be able to put their health and safety above election- year politics, but this is what we have come to expect here. Women deserve better. But I am afraid in the House, women's rights, again, continue to be undermined. Time and again, we have prioritized in this House--some of us--politics over people.
Let me mention the veterans, for example. Listen to this. This is really important to know. While those veterans who have served and sacrificed for our country are waiting months in line for medical care, the House majority will spend more money investigating and trying to debunk a nonexistent Benghazi scandal than helping our veterans get the care they need. That is right. The committee investigating Benghazi has a much larger budget than the Veterans' Affairs Committee. If that is not a political statement, I don't know what is.
And I need to point out that just yesterday, transcripts from the Armed Services Committee about Benghazi proved that everything that could have been done was done.
And I know that when I last did the rule on the floor on the special Benghazi committee that I received a call from the mother of one of the Navy SEALs that died, saying that she really wished the Congress would stop dragging their family back through that horror. They know what happened.
Instead of working on the real problems--and we have got them--they are finding time to sue the President for doing his job, to hold vote after vote to repeal ObamaCare. And let's remember the shutdown of the government that took $24 billion in that short time out of this economy.
So we come here to make things better. And with these actions and with this behavior, we make things worse.
I urge my colleagues to vote ``no'' on the rule, and I reserve the balance of my time.
Mr. Speaker, I am pleased to yield 2 minutes to the gentlewoman from the District of Columbia (Ms. Norton).
I yield the gentlewoman an additional 2 minutes.
May I inquire if my friend has any more requests for time?
We are going to call for the previous question, Mr. Speaker, and if we defeat the previous question, I am going to offer an amendment to the rule to bring up the legislation that would treat wildfires like similar major natural disasters and ensure that money intended for managing public lands is actually used for that purpose.
It is time to make commonsense changes in the Federal wildfire budget.
Mr. Speaker, to discuss our proposal on wildfires, I am pleased to yield 2 minutes to the gentleman from Oregon (Mr. DeFazio), the distinguished ranking member of the Committee on Natural Resources.
Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from California (Mr. Peters).
Mr. Speaker, if my colleague is prepared to close, I will close.
I yield myself the balance of my time.
Mr. Speaker, the majority continues to choose politics over people, create problems instead of solving them, and insist on silencing debate in the Chamber. It is time to consider the real problems facing the country, and with summer comes the destructive fire season that affects so many of my colleagues' districts.
I urge my colleagues to defeat the previous question and move to consider the Wildfire Disaster Funding Act to make the commonsense changes in the Federal wildfire budget.
Mr. Speaker, I ask unanimous consent to insert the text of the amendment in the Record along with extraneous material immediately prior to the vote on the previous question.
Mr. Speaker, I urge my colleagues to vote ``no'' and defeat the previous question, and vote ``no'' on the underlying bill.
I yield back the balance of my time.
Mr. Speaker, on that I demand the yeas and nays.