Floor Statements

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

Mr. Speaker, I look forward to this discussion and disputing the central premise, I think, of the motion offered by the gentleman from Kansas, which seems to be that new spending is somehow equivalent to the American people with lowering the tax burden. I want to get into that in a little bit because these two ideas are not equivalent.

They are certainly not equivalent in terms of their impact on the economy. New spending is contrary to maximizing economic growth, while tax cuts reduce it.

Mr. Speaker, before I do that, I yield such time as he may consume to the gentleman from Iowa (Mr. Nussle), the distinguished chairman of the Committee on the Budget, for his thoughts on this.

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

Mr. Speaker, I want to respond to one of the points just made by the gentleman from California. This is pretty close to being a direct quote as I heard him say it, and it was pertaining to this deficit. I think what the gentleman said was it does not matter if it is a decrease in revenue, which is to say a tax cut, or an increase in spending; either way, we have to offset it.

I am here to say that that is just not right. It does matter. It makes a difference. It makes a big difference. I am going to finish my point, because I think it makes a big difference in terms of the economic growth of our economy, and that means the opportunity for Americans, and that means prosperity and ultimately the quality of life of the working people.

Look at the data that we have. After we passed a tax cut package, look at what has happened. We have had a 2-decade high point in terms of GDP growth. The economy grew at 6 percent in the second half of last year; it is growing very strongly this year. This is the best economic growth numbers we have had in 20 years. Housing starts are at a record high. Homeownership, a record high number of Americans own their own home today.

We have financial markets that have made huge gains, which generally have been a good predictor of economic growth. The manufacturing sector, which has undergone a very difficult time, has, by all accounts and all objective data, turned around, is showing growth, is actually hiring.

Speaking of hiring, we have strong new job growth now. We waited a long time, because we know that job growth is always the last part to come in during an economic recovery. But it really looks like the job growth is happening now. Whether you are looking at the household survey or whether you are looking at the payroll survey, the job growth is strong. In March, we had 308,000 new jobs, and on Friday we are going to get a number for April; and it looks like we are going to have another strong month for job growth.

What this means is we are approaching a period now of sustainable economic recovery. When new people are getting to work and being able to generate their own incomes, now the economy starts to be able to grow of its own. This has happened because we lowered the tax burden.

If we go and pass this provision that you guys are advocating, it almost certainly means a big tax increase, and I am very concerned that this would cut off this economic recovery we have under way, and that is the last thing we should be doing.

The problem that we have, we have got a problem here, no question about it. We have a deficit that is too big, there is no question about it. But the problem has come from years of excessive spending. It is not that we do not bring in enough revenue. In fact, as we all probably know, recent numbers suggest that revenue growth is growing and it is accelerating, which is not surprising, given the strong economy we have today, the strength that is developing; but it is spending that has been the problem.

Now when we offered a PAYGO provision that would require that we offset any new spending proposals, you guys all voted against it. You guys said no, no, we do not want to just offset spending.

The point I am trying to make here is that new spending and lowering the tax burden, and in fact maintaining existing tax law, because that is what we are talking about now, these are not equivalent.

I yield to the gentleman from California.

Mr. Speaker, reclaiming my time, the gentleman is not recognizing we have had a growth in revenue, despite lower tax rates. This is what happens when the economy grows strongly. And the most important thing here, it is very important that we get the deficit under control and reduce the debt, but the most important thing is we have a strong economy, and everybody who wants a job is able to get a job and that wages are rising and people are having more and more opportunities.

If we do that, and control spending, which we are trying to do which this budget, which, again, my colleagues on the other side of the aisle did not agree with, but it is a budget which for the first time I am aware of in a very long time, we took the nonsecurity parts of discretionary spending and decided to freeze it.

We said we are going to freeze this, because I think that is what you need to do to get this spending under control so we can get this deficit under control. I think we are heading in the right direction if we can have the discipline on the spending side.

We should not be advocating a provision, which the gentleman from Kansas is introducing, which almost guarantees a big tax increase right at the time when our economy seems to be recovering strongly.

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

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

Mr. Speaker, will the gentleman yield?

First of all, Mr. Speaker, I have introduced a budget that had lower spending and lower deficits even than the one that we passed, the Republican one. I do not know of any Democrat that voted for my alternative budget.

Mr. Speaker, we got just under half the Republican caucus on it, about 100, maybe 110.

Mr. Speaker, if the gentleman will yield, how did the gentleman from Texas (Mr. Stenholm) vote on it?

It increased it much less than your budget did. It got us back to a balance much sooner than your budget or any other budget, and you voted ``no.'' You voted ``no.''

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

A couple of points I would like to make. One, to follow up on some comments made by the gentleman from Maryland, first of all, history has proven time and time again when we have cut taxes, we have ended up with increasing revenue. The gentleman from Maryland cited the Reagan administration. The fact is, within a decade of the big Reagan tax cuts, revenue collected by the Federal Government, tax revenue had about doubled. The problem was that expenditures tripled, and this reinforces my point that the problem here is spending. The problem is not that we are undertaxed.

The second point that I want to make, the gentleman from Maryland was referring to declining revenues in the height of the economic slowdown. I do not think anybody disputes that if the economy is in a recession, when the economy is contracting, revenue decreases. That is true. That is what happens when you have, especially a combination of a contracting economy, and then you have the cost of a war, it is not surprising that you have a deficit under those circumstances.

The final point I want to make, to suggest that this provision does not amount to the equivalent of a tax increase I think is just factually wrong. We all know that we have provisions in the current tax law that are expiring very soon; and if we do not allow those to become permanent, then we have a big tax increase coming. And if this provision were to be adopted and become binding on Congress, then it is almost assured that we are going to have a significant tax increase.

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

Mr. Speaker, if I could just respond to that.

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

The point I was making about the increase in revenue, and the gentleman from Maryland was disputing this, I think, my point is if you look at the last 6 months of this year, if you look back from October of 2003 through March of 2004 and you compare the same 6-month period to the year before, you will discover that we brought in more revenue to the Federal Treasury in this most recent 6-month period than we did in the last 6-month period. That is the point that the gentleman from Iowa (Chairman Nussle) and I have been making.

Revenue coming into the Federal Government is, in fact, growing, and it is at an accelerating pace; and I strongly suspect that the next quarter is going to show an increase over the corresponding quarter from the previous year. That is precisely because of the strong economic growth.

I yield to the gentleman from Maryland.

Mr. Speaker, reclaiming my time, what happened was that immediately after that tax increase in 1993, economic growth was quite slow for some period of time; and then it accelerated, despite the tax increases.

But my point is, and I do not think the gentleman is disputing me now, that over the last 6 months we have had a revenue growth compared to the same 6-month period a year before, and all evidence and all trends suggest that this is going to continue. And what I think it demonstrates is, once again, lowering marginal tax rates and encouraging strong economic growth more than offsets the reduction in revenue that comes from the nominal loss that comes from the rates themselves.

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

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

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

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

Mr. Speaker, I just want to make sure everybody is very clear as we have this discussion that if this proposed provision were to become binding, the net effect is almost certainly a very, very major tax increase. All we are talking about is, what I want to do here is let us make sure we can maintain existing tax law.

What the gentleman from Kansas (Mr. Moore) is proposing is that under existing law, unfortunately, taxes are scheduled to go up. If we prevent that by making sure we maintain the existing rate structure, the existing tax law, we would have to come up with these huge offsets, which we certainly are not going to get the votes over there to do that with spending cuts, so we would have to raise taxes somewhere else.

So the net effect is a huge tax increase. What are some of the things that are scheduled to expire, some of the problems that we would have if this were adopted? Well, we would find we would get the marriage penalty coming back in full force. We get the child tax credit that would be diminished dramatically. The increase in the size of the 10 percent bracket, that goes away. Small business expensing which has probably contributed significantly to this economic turn around. That goes away. Small businesses cannot expense items the way they can under current law.

I think it is a bad idea when we have all the evidence suggesting we are well into a substantial and probably a sustainable economic recovery, why we would suddenly ratchet back up the taxes in the face of that and the fact that this has been a very successful tax policy, very successful in terms of turning this economy around and now in terms of getting people back to work, why we would want to undo all of that with a measure like this makes no sense to me.

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

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

Mr. Speaker, I just want to go back to this point because this is a very important point. We have created an environment, created a tax environment in which the economy can grow more rapidly and it is growing more rapidly. We have both CBO projections and the House budget resolution both forecast Federal receipts at $35 billion more this year than last year, despite the fact that we cut taxes last year; and now the monthly Treasury data that is coming in this year shows, and I do not think anybody is disputing this, that, in fact, we probably low- balled that. The revenue was coming in at an even faster clip than the amount by which we thought it would exceed last year.

So the fact is we have got a deficit that is too big. We all acknowledge that. It is getting smaller. The revenue is coming in faster because the economy is growing. And if we get spending under control, we can solve this problem. But the right way to do it is not to raise taxes.

I know the gentleman from Kansas (Mr. Moore) does not like the characterization of this. But the fact is we have got provisions in law that will result in a tax increase if we do not do something about it, and what your provision would do would prevent us from solving that problem that results in a tax increase.

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

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I have been the first one to say that excessive spending is a bipartisan problem.

With a tax increase. That is not a good solution.

Mr. Speaker, will the gentleman yield?

First of all, I think the gentleman will acknowledge that Republicans have not short-changed our troops; that we have advocated and passed legislation that would provide the necessary resources; and we had a budget resolution that took the non-security portions of our budget and we froze that. We said, these areas that are not critical to American security should grow at zero.

Now, most if not all Members on the gentleman's side of the aisle, thought that that was somehow unreasonable, because we did not grow spending. So I do not think you can accuse us at this point of not dealing with this problem.

Mr. Speaker, if the gentleman would yield me some time.

Mr. Speaker, if not, I yield myself such time as I may consume.

Mr. Speaker, I yield to the gentleman from Texas.

Reclaiming my time, we are getting a little bit far afield from the discussion.

We are getting a bit far afield.

I think one of the fundamental areas of disagreement that we have is the idea that my colleagues who offered the proposal, equate new spending with new tax relief, including maintaining existing tax law.

I yield to the gentleman from Texas.

Reclaiming my time, but the mechanism by which you choose to make that decision is precisely this, it is to say that we have to treat, even maintaining existing tax law, as though it were equivalent to launching a new spending program because you want to impose the exact same mechanism on both those activities as though they are equivalent. And my point is they are not equivalent.

One, the new spending, leads to lower economic growth, lower productivity, fewer opportunities for American workers; and the other, maintaining this lower tax burden that we managed to pass in recent years, leads to stronger economic growth, more jobs, higher wages, and we are seeing it in the numbers. We are seeing that this economy has turned around. We are seeing the strength of this economy. We are seeing it producing new jobs. And, in fact, as the gentleman has acknowledged in recent months, we are even seeing a growth in revenue to the Federal Government. It is true.

It has not yet reached the level that it was at before the recession and before the war and before September 11. It will get there. It may take a little bit longer but the fact is revenue to the Federal government is growing. It is growing at an accelerating pace. But, frankly, that is not my highest priority in life. My highest priority, and what I think it should be here is, are we creating an environment where we create the maximum opportunity for Americans, the most job opportunities, the greatest chance for new businesses to flourish.

I know that is what the gentleman from Texas (Mr. Stenholm) would like to see accomplished. I think we differ about how to get there. But I strongly believe that making it essentially impossible to maintain the existing tax law and instead having a higher tax regime does not get us there.

I yield to the gentleman from Texas.

They have to be offset with equal tax increases or spending cuts; is that correct?

Do you think that there are the votes anywhere in this Chamber to have spending cuts when the Democrats in this Chamber would not vote for a Republican budget?

Reclaiming my time, I would be thrilled if you and your colleagues would vote with us on this budget resolution that freezes non-security spending, that just says let us hold it at last year's level because we really cannot afford more than that. But we never got the votes to do that.

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

May I ask a question of the gentleman from Kansas. Does the gentleman have any additional speakers?

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

I would just make one additional point, and that is the point that has been made for us at our committee by CBO Director Crippin, and I think this is a very important one. When we look at how best to get our deficit under control, he makes the observation that a one-tenth of 1 percent increase in GDP growth accounts for about an additional quarter of a trillion dollars, $250 billion, in additional Federal revenue over a 10-year period. This is why economic growth is so important.

The real reason it is mostly important is for the benefits that accrue to the American people who produce this growth; but if we want to figure out how do we get our budget house in order here, a strong economy gets us there. One-tenth of 1 percent, going from 4 percent growth to 4.1 percent growth, just that small difference amounts to an extra quarter of a trillion dollars in Federal revenue. If we can maximize economic growth and have some discipline on the spending side, we get this budget back to balance. We are moving in that direction,

and I think that is a direction we should stay in.

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

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

We have had a spirited debate here this afternoon about this, and I would simply close by reminding my colleagues that if we were to pass the provision that is proposed here, it would certainly result in very, very large tax increases in this year, next year, the following years of a very huge magnitude; and I am gravely concerned that the result of that would be to, at a minimum, diminish the growth of our economy and quite possibly even turn us down into an economic downturn, back from whence we came.

We are on the right path. The economy is growing. It is growing strongly. It is actually growing at a nearly record pace. We have job growth that has kicked in in a very impressive way, and that is the most important part of this; and that is really manifesting itself in recent months, likely to continue, likely to generate a self-sustaining momentum for the economy.

This is exactly what we should be trying to work for. It is the tax cut package that helped us get here. We have now seen so much economic growth that, as my colleagues on the other side have acknowledged, even in recent months and recent quarters, revenue collected by the Federal Government is growing. It is accelerating. That means if we stick to the budget resolution that we passed with votes on this side of the aisle alone, where we put a freeze on nonsecurity discretionary spending, if we maintain that spending discipline, while we continue to have the strong economic growth, we will, in fact, see a dramatic reduction in this deficit. That is what we should be working towards, maintaining the tax law, keeping the tax burden as low as we possibly can on the American people, with some spending restraint.

Again, we proposed that we freeze this nonsecurity spending, unfortunately. My colleagues on the other side would not go along with that freeze. That is the kind of discipline that will get our budget in order.

What we need to do is reject this proposal today, vote ``no'' on the motion of the gentleman from Kansas, and stick to some discipline on the spending side.

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

Mr. Chairman, I would like to congratulate my colleague, the gentleman from Texas, for introducing an outstanding budget and for his hard work in making a point, in producing a budget that really goes a long way towards achieving the fiscal discipline that we need here.

It seems to me the goal of the Federal budget ought to be primarily to create an environment in which we allow the American people to maximize their prosperity, to maximize their opportunity, to maximize their chance to realize the American dream.

If the American people could actually individually vote on this today, I think this is the budget that would win because the American people know that our taxes are too high to achieve the maximum level of prosperity that our country is capable of, and they know that here in Washington we spend too much money. We have for years, and it has been accelerating in recent years; and so this is the budget that addresses those two issues best.

It cuts spending a little tiny bit. That is all, one small part of the total government spending. We actually propose in this Republican Study Committee budget a 1 percent cut, one penny out of every dollar in the nondefense, nonhomeland security discretionary spending area. We think that there is at least that much waste and fraud and abuse and unnecessary and duplicative programs, and so we are saying, how about one penny out of every dollar in just this category?

What else did this budget do? It says that the existing tax law ought to be permanent, that we should not, at a time when we are just kicking in a strong economic recovery, we should not raise taxes.

This is a budget that shrinks the deficit, holds spending growth to a modest level and lowers taxes. I urge my colleagues to support it.

Mr. Chairman, I would like to thank my colleague, the gentlewoman from New York (Mrs. Kelly), as well as my colleague, the gentleman from Massachusetts (Mr. Frank) for kindly yielding time.

Certainly I rise in strong support of this amendment. I want to congratulate the gentlewoman from New York (Mrs. Kelly) for her leadership on this issue for a number of years.

This amendment simply is going to help small businesses. It is going to help small banks. It is going to help promote a rational allocation of resources and a free economy. It makes a lot of sense. In fact, it is hard to believe we ever passed a law that said it

ought to be illegal to pay interest on deposits, any kind of deposits. But that is the fact. It is on the books. And I am hoping that today we take a big step in the direction of repealing this ban.

This amendment itself really reflects the confluence of two separate bills, one that I had introduced, one that the gentlewoman from New York (Mrs. Kelly) had introduced. And together they really simply amount to a commonsense reduction of long-outdated, unnecessary regulations.

Again, the people that are most harmed by the current regulation are the people operating small businesses, the people who have modest accounts, the people who have not got sophisticated Treasury operations to circumvent the regulations, and the people who therefore really need this help.

It will help small businesses do a host of things that they could do with a little more resources, whether it is hiring another employee, whether it is buying some more equipment, defraying other costs, it just makes a lot of sense.

I should observe that the Federal Reserve and the Treasury Department both fully support this legislation for a variety of reasons, not the least of which it will make banking services less expensive, more directly responsive to customers' needs, and basically every industry group that has looked at this legislation supports it as well, from the U.S. Chamber of Commerce, the NFIB, America's Community Bankers, to the Association for Financial Professionals. Pretty much there is a broad consensus that this is just a commonsense thing to do.

So I, again, would like to thank the gentleman from Massachusetts (Mr. Frank) for his cooperation, the gentlewoman from New York (Mrs. Kelly) for her years of service on this issue. I urge my colleagues to adopt this amendment.

Mr. Chairman, I offer an amendment.

Mr. Chairman, it seems to me we have had considerable debate about the substance of this bill today, and there is substantial evidence that the mandatory source status that is enjoyed by FPI is a policy that is harmful to a variety of American industries and workers, including the furniture manufacturers and the garment-makers in my district. The core objective of this bill is to eliminate the status, the FPI status as a mandatory source supplier and, thereby, require the FPI to compete for Federal contracts rather than have the opportunity to simply claim them. I am a cosponsor of this bill, and I applaud this effort and I support the bill.

What my amendment would do would further define the FPI's role in competing with private sector small businesses. Specifically, my amendment would prohibit the FPI from bidding on any contracts that are intended to be exclusively set aside for small business concerns.

This Congress and many Congresses before us have established, for a variety of reasons, that a certain percentage of Federal Government procurements should be made through small businesses, and we call those small businesses set-asides. The whole idea has always been to ensure that small businesses, mom-and-pops, local people struggling, in all of our districts and in all of our communities, to get a business off the ground and to employ some people, that they get a shot at some of the business that their tax dollars pay for.

It seems abundantly obvious to me that the Federal Prison Industry does not in any way qualify as a small business nor fit the descriptions that most of us have in mind when we think about small businesses. With $500 billion in annual sales, with 20,000 employees, with this network within the Federal penitentiaries in America, that is not what we mean when we talk about small business. It was never the intent of Congress that the Federal Prison Industry should be able to compete for the contracts that are intended to be set aside for small businesses.

Yet, last year, when we repealed the mandatory source status for the FPI with respect to DOD procurements, unfortunately, regulations were promulgated that specifically allowed the Federal Prison Industry to compete for small business set-asides within DOD. My amendment would correct this error with respect to DOD, but it also would apply to the other Federal agencies, and it is based on a simple premise: that small business set-asides should in fact be for small businesses, not for the FPI. It is tough enough for small businesses to compete against large businesses. I do not think they should have to compete against the Federal Prison Industry. This is a good bill.

I yield to the gentleman from Wisconsin.

Mr. Chairman, reclaiming my time, I appreciate the support of the Chairman. I appreciate the support of the author of the bill. I urge my colleagues to support the amendment and the underlying bill.

Mr. Speaker, I would like to commend the gentleman from Ohio for introducing this legislation and for his leadership on this, and I want to thank God today that we will finally pass, and send to a President who will sign it, a bill banning a barbaric, brutal procedure for killing unborn babies.

It seems to me having a legal ban on partial-birth abortion just strikes me as a minimal sort of threshold level indication of human decency for our society. To take an unborn baby, induce a partial delivery, kill the baby, then pull it out and discard it, demonstrates such a wanton contempt for human life, it really should be chilling for all of us.

This bill establishes what I see as at least a minimal level of respect for human life; but, frankly, we have got a long way to go. I would like to address the Roe v. Wade decision which has come up repeatedly. I think we just need to speak candidly about this decision, Mr. Speaker.

The fact is it is a terrible decision that has resulted in the deaths of millions of unborn babies. But even if the immorality of the decision does not move someone, I would think the contempt for the Constitution that it demonstrates ought to. Because let us face it, you can read the Constitution. It is written in English, and it is very clear. The Constitution does not guarantee a right to have abortions. A few Supreme Court Justices on the other hand, decided that they would rather be legislators than Justices and so they invented this right. They wrote it in a decision. And unfortunately, as unaccountable legislators, it is now the law of the land. But that is what it is. It is a terrible misreading of the Constitution.

I commend the conferees for striking the reaffirmation of Roe v. Wade from the bill that was passed in the other body. I commend them for bringing this bill to the floor today, and I urge my colleagues to support the rule and to support this conference report.

Mr. Speaker, I thank the gentleman from Arizona for yielding but also for organizing this special order.

I think this is extremely important. Others have said it more eloquently than I will. I think the fundamental reality here is we have an opportunity as well as a responsibility to win the peace just as we won the war, and the President's proposal is about winning the peace. The $20.3 billion that will go towards rebuilding Iraq is about one winning the peace in Iraq. It is about helping the Iraqi people build a viable society that will not be a threat to its neighbors and to us anymore.

The President's determined that this money is needed soon after the decades during which Saddam Hussein's tyranny and the wars that he has brought on the Iraqi people has made this need urgent, and I hope we will all fully support this President's request.

I do, however, want to introduce an idea that I think is perfectly consistent with funding this request, and that is an idea that goes to the heart of what we ought to be doing here in Congress, and I think that is establishing our priorities, funding our priorities, and tightening our belts and living with some fiscal discipline throughout our budgeting process.

Today just happens to mark the first day of a new fiscal year for the Federal Government, and, unfortunately, it is a fiscal year in which we are going to undoubtedly run a several hundred billion dollar deficit. Given that situation, I think it is all the more important that we exercise the fiscal discipline and identify the priorities that we need to.

This is a priority. So I have proposed, together with our colleague, the gentleman from Texas (Mr. Hensarling), that we fund this, and we fund this fully but, at the same time, over the next several years, we find offsetting spending reductions in other foreign aid proposals, programs, areas that are not as high a priority, frankly, as rebuilding Iraq; and we reduce that spending by an amount that will, over time, add up to the amount we are spending in Iraq so that at the end of the day, the American taxpayer is not paying any additional net new sum of money to do this vital function. I think it is about priorities.

There are a number of areas that I would not suggest that we reduce funding in our foreign aid budget. For instance, our aid to Israel and Egypt is fundamental and very important. For other reasons, diplomatic and embassy security. There are a number of programs we should not touch. But frankly, if we were to trim by about 15 percent a year for the next 4 years, the next 5 years, I correct myself, for the next 5 years, we could fully offset this critical $20.3 billion expenditure that we need to make for our own security and for the security of our troops in Iraq and for the sake of the security of that region.

So I appreciate the opportunity to speak tonight. Again, I am very supportive of the President's request, but I would urge my colleagues to join me in an effort to find the appropriate offsets over the next several years so that this vital priority gets funded and some less important foreign aid programs wait until we have the resources to do it.

Mr. Chairman, I want to thank and congratulate my friend from Virginia because I think this is one of the most important amendments we will debate this entire year. This is a tremendous opportunity for us to give a little bit of freedom to the people who clearly need it the most.

The fact is the Washington, D.C. public school system is not up to par. We know that. The Washington, D.C. school system spends more money per student than almost any other school district in America. Test scores are routinely towards the lower end of the spectrum of test scores across America. We all know this. In fact, we, my colleagues, affluent people in this community, we know it and we act accordingly; because in disproportionate number, what we do is we send our kids to the private schools. Democrats, Republicans, Congressmen and Congresswomen, Senators, administration officials, we send our kids to the private schools. Why do we do that? Because they are better schools and because we can afford it and because we want to give our kids the best possible opportunity in life.

And how dare we deny that same opportunity to people who just do not have the same level of income that we have? How dare we deny these kids the one chance they are ever going to have in life to build the best, most solid educational foundation they can to create the opportunities that they deserve for their futures? I say we dare not deny them this opportunity. Give these kids in the D.C. school system, give them hope, give them a chance and do it by giving their parents a choice.

I urge my colleagues to support this amendment.

Mr. Speaker, I offer an amendment.

Mr. Speaker, I yield myself 3 minutes.

Mr. Speaker, let me start by saying we do need to fund FEMA properly; but we also need to offset it, as we often have done in the past, and that is what this amendment proposes to do.

I want to follow up on the comments of my chairman, the chairman of the Committee on the Budget, who was exactly right about how we got to this point. I would like to explain that a little bit and make sure that my colleagues understand that for fiscal year 2003 the President requested $1.8 billion for FEMA disaster relief. This is routine annual spending in anticipation of the fact that we know we will have disasters in America.

In October of 2002, the House Committee on Appropriations approved $1.8 billion in committee. In January of this year, the Senate passed an omnibus with only $800 million, $1 billion below the President's level.

In January of 2003, the White House issued a statement of administration policy pointing out that this underfunding of FEMA by $1 billion would cause a problem and we would need to go back and address this. But despite that, despite the fact that everybody knew that we were intentionally and consciously underfunding FEMA by about $1 billion, we passed an omnibus at the lower level, $1 billion below the House Committee on Appropriations level, $1 billion below the President's request.

And what happened to the $1 billion? As the chairman of the Committee on the Budget correctly observed, it was used so we could spend more money in other areas and still pretend we were living within the overall discretionary level that we had all sort of agreed upon.

Well, the fact is, this emergency is an emergency that we have created by virtue of the fact that we chose not to fund this one category, and we all knew that low-balling FEMA would not stand. So now, predictably, we are all back to back-fill the hole that we dug for ourselves in February.

As I said before, FEMA needs the money. That is not the issue about this amendment. What we are simply saying is we ought to offset this so that we do not have just a net increase in the total amount of spending. We are just trying to stick to the budget that we agreed to.

So what this amendment does is it says let us take this $984 million and let us offset it with an across-the-board reduction in all discretionary spending programs except defense, homeland security, and veterans programs. That adds up to about five one-hundredths of 1 percent of the total spending for 2003, about three-tenths of 1 percent of the spending in the categories in which we are going to make this tiny cut. It is about 29 cents out of every $100 dollars.

Now, some people will say, well, even that is too much to cut, especially since there are only 2 months left in the fiscal year. So we have gone on to say, okay, we'll leave it to the discretion of the President to decide whether we cannot find that amount of waste, 29 cents out of $100 is too hard to find; and if that is the case, he has all of 2004 to offset any individual accounts he so chooses.

It strikes me, Mr. Speaker, as a very reasonable and very doable amendment. Over the next 2 months, agencies would be asked to come up with 29 cents out of every $100. And if they cannot, they get another 12 months to do it. We have a history of offsetting non-defense supplementals; and I believe with a deficit of $455 billion, here is a way to reduce that deficit. It is what we ought to do.

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

Mr. Speaker, I would remind my colleagues that we have 14 months to find these offsets, not just 2.

Mr. Speaker, I yield 2 minutes to the gentleman from Iowa (Mr. Nussle), the chairman of the Committee on the Budget.

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

Mr. Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Pence) and remind my colleagues that we have enacted across-the-board spending cuts in 3 of the last 4 fiscal years.

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

Mr. Speaker, I yield 1 minute to the gentleman from Iowa (Mr. Nussle), the chairman of the Committee on the Budget.

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

I would just remind my colleagues on the Committee on Appropriations that in addition to the Committee on the Budget, I offered an alternative budget that actually would significantly restrain the growth of mandatory spending. Very specifically, I frequently vote against many mandatory spending programs as well.

But what we are here today to try to do is not cut a dime out of FEMA. What we want to do is just say, let us offset this. It is 29 cents out of $100. It is not for two months, it is over 14 months, and any single individual line item, if the President thinks it is unreasonable to try to find 29 cents out of the $100 because there are only two months left, and no doubt there are many categories in which that would be difficult, there are another whole 12 months, all of fiscal year 2004, to find those offsets.

This is not that hard. Any family can find 29 cents out of $100 in their family budget. Any business can do likewise. We have an obligation to do the same thing for our taxpayers, especially at a time when we are running the kind of deficits that we are.

So, Mr. Speaker, I urge my colleagues to adopt this amendment, and when this amendment succeeds, which I hope it will, and I am sure every Blue Dog is going to vote for it, because I hear them all the time talking about how upset they are about the deficit; well, here is an absolute, straightforward way to reduce the deficits. I am looking forward to a lot of votes from that side of the aisle. I am looking forward to the passage of my amendment, and then passage of the underlying supplemental.

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

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

The yeas and nays are ordered.

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

Let me start by saying, I do not mind when pharmaceutical companies make profits. In fact, I want them to make profits because it is evidence that they are providing a product that people value and people need. I am also one of the most vehemently opposed, amongst all Members of Congress, there is nobody more vehemently opposed to price controls than me. And I have nothing but criticism for countries overseas that fix their prices and intentionally set artificially low prices on drugs or anything else for that matter.

The main reason that I support this rule and I support this bill is because this is the only way I can think of that we can begin the process of tearing down the artificial prices around the rest of the world that are forcing Americans to subsidize drug consumption all over the world. This is what we need to do in order to get to more normal market prices everywhere in the world.

If we pass this legislation and American consumers start to go to other countries and buy drugs at those artificially low levels, pharmaceutical companies will have no choice but to confront those countries and threaten to either withdraw from those countries entirely or have those governments raise their prices to normal market levels. That is what they will do.

Now, if a foreign country refuses the deal and says, go ahead and leave and we will make a knock-off product ourselves, then we have to use every vehicle available to us to enforce the intellectual property rights that are inherent in our patents laws and prevent them from going in every multilateral and bilateral forum that we have. That is an obligation that we have.

Now, I wish I could wave a wand and make these price controls go away so that everyone in the world is paying their fair share of the cost of prescription drugs, but I cannot do that. And as

the world-famous and brilliant economist Art Laffer said, and he supports this bill, by the way, he made the point that trade barriers have never made a problem better.

Well, that is the case here today as well. The status quo is unacceptable. We need to take whatever measures we can to start to dismantle this very artificial construction of prices that are extremely unfair and unequal all around the world. I think this bill is the best chance to do that. I urge my colleagues to support the rule and support the underlying bill.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I ask unanimous consent that the amendment be modified in the form at the desk.

Mr. Chairman, I yield myself 3\1/2\ minutes.

Mr. Chairman, I think all of us in this Chamber have been faced with the painful visits in our offices from constituents who come to us with a heartrending story of a member of their family, often a child, who is suffering from a terrible and debilitating disease, perhaps a fatal disease, perhaps a disease for which there is no cure; and they come to us asking for some help, asking for resources to provide for the research that might find a cure. And nobody has heard more of these heartrending and compelling stories than the distinguished chairman of this committee. I know he has devoted enormous amounts of time and effort to making sure the resources are there to help to try to find cures where it is possible.

I think we have all embraced the idea of significant increases in funding for NIH, I have, and I think that is a bipartisan agreement. And we are all proud that we have doubled funding for NIH over 5 years. But what this amendment is about is trying to find a little bit more hope for a few more families. My amendment does not cut a dime of funding for NIH. What it does do is it would require the NIH to reprogram the money that is going to a few grants which we think are just much less worthy of taxpayer funding than the kind of research the NIH is generally doing to cure these devastating diseases.

Now, one of these is a research project that the gentleman from Indiana is going to discuss, but I want to mention the four that my amendment would specifically exclude and forbid further funding from. These are projects, grants that are under way now and have already been funded by the NIH in the past, and we would, with this amendment, shut off further funding for.

One of them is a study on the sexual habits of older men. A second is a study on San Francisco's Asian prostitutes and masseuses. A third one is a study on mood arousal and sexual risk-taking. And let me just share with my colleagues a highly sanitized and abbreviated summary of their grant application. If I actually read the whole thing, I suspect I would be admonished for the language I would be using on the House floor, so I will read just a little summary.

This is a proposal, which says: ``In a series of laboratory studies, mood and sexual arousal will be induced and then their individual and combined effects on sexual risk-taking will be examined.'' Those are not my words. Those are the words of the applicant for the grants.

There is another study on American Indian transgender research. The proposal, which is based on the proposition that American Indian and Alaskan native lesbian, gay, bisexual, transgender, and too-spirited individuals are a drastically understudied and underserved group.

Mr. Chairman, I ask my colleagues, who thinks this stuff up? And, worse, who decides to actually fund these sorts of things? Well, unfortunately, the NIH has done so. These are the exceptions, and not the rule. This is not a general criticism of the NIH. But the point is these are not applications that are worthy of taxpayer funds.

And let me make the point that there is nobody here that I know of that is saying we should ban this sort of research. If they want to do this sort of research, we need to fund this privately and not with taxpayer dollars. I simply want to make the point that there are so many far more important, very real diseases that are affecting real people; and that is what this kind of money could be used for, would be used for.

We leave it to the NIH to decide how to reprogram this. And as for those who suggest that we should not interfere with the process by which the NIH decides how to allocate their funds, let me strongly disagree. We have an affirmative obligation in this Congress, as the body that controls the pursestrings of the Federal Government, to supervise and provide oversight. And when a bureaucracy is making mistakes, we have an obligation to come here and correct that. That is all we are saying.

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

Mr. Chairman, I yield 3 minutes to the gentleman from Indiana (Mr. Chocola), the cosponsor of this amendment.

Mr. Chairman, may I inquire as to who closes in this process.

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Arizona (Mr. Flake).

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

Let me say, we can read the entire application, and the projects do not sound any more compelling or any more convincing. The point is this is about priorities. There are just so many devastating diseases that are killing people every day in this country. There are many where the NIH is responsible for tremendous progress being made on so many fronts. I think we have an obligation to do as much as we can for those priorities.

Studying Asian prostitution in San Francisco massage parlors and the study of mood swings on sexual arousal does not strike me as deserving the same kind of priority as curing cancer in small children and so many other devastating diseases. That is what I think this is about.

As for the peer review process, as a general matter I completely agree with the peer review process, but I do not think that absolves us completely of our obligation to have some oversight on these issues and decide whether or not in some cases this peer review process runs amok.

That is what I think this debate is all about: Do we draw the line anywhere ever, or do we not. I think we do, I think we should on these specific grants, and I urge my colleagues to vote to adopt this amendment.

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

Mr. Chairman, I demand a recorded vote.

Offered By: Mr. Toomey

Amendment No. 11: At the end of the bill, insert after the

last section (preceding the short title) the following

section:

Offered By: Mr. Toomey

Amendment No. 7: At the end of the bill, insert after the

last section (preceding the short title) the following

section:

Mr. Speaker, today I would like to share my Report from Pennsylvania for my colleagues and the American people.

All across Pennsylvania's 15th Congressional District there are some amazing people who do good things to make our communities a better place. These are individuals of all ages who truly make a difference and help others.

I like to call these individuals Lehigh Valley Heroes for their good deeds and efforts.

Today, I would like to recognize Bethlehem Catholic High School Head Wrestling Coach Tony lasiello as a Lehigh Valley Hero. He is working hard to make a difference in his community.

Tony has built a remarkable record during his 38 years at Bethlehem Catholic High School. From 1966 to 2003, Tony has amassed an overall record of 408-228-3. He has coached 11 state champions, which ranks seventh in the state. The state champions he coached in 1979 achieved that feat through an undefeated, 18-0, record. He coached five straight PCIAA Catholic State Team Championships from 1968 through 1972. He has coached 29 Catholic PCIAA State Championships and 11 PIAA State Champions. Two of his wrestlers won NCAA championships.

Tony also has been president of the District XI Wrestling Coaches Association for the past 22 years, and served 4 years on the board of the National Wrestling Coaches Association. He served as a PIAA referee for 20 years and an EIWA College official.

Given his very active participation in our community, and his work in helping shape young men into responsible adults, Tony lasiello is a Lehigh Valley Hero in my book.

Mr. Speaker, this concludes my Report from Pennsylvania.

Mr. Speaker, I rise to offer congratulations to the confectioners at Just Born, Incorporated, as they celebrate the 50th anniversary of one of their most recognized and celebrated products, not to mention my daughter's favorite, Marshmallow Peeps.

Just Born, with their Peeps, is a great American manufacturing success story. Over a billion Peeps are produced each year by Just Born's 400-plus employees. Their candies are exported to over 30 countries, making them available to over 1.5 billion people worldwide.

Innovation and dedicated employees have really been the source of the success of this company. Just Born was founded in 1923 in New York City by Samuel Born, a Russian immigrant. The company moved to Bethlehem, Pennsylvania, in 1932 and under the leadership of Bob Born, Samuel's son, Just Born acquired a candy company in 1953 which manufactured by hand a small line of 3-D marshmallow products. The innovative Bob Born mechanized the process of making Peeps and dramatically increased the quantity of Peeps manufactured each year. Peeps once took 27 hours to make, they now take 6 minutes.

It is this innovative, entrepreneurial spirit, and great workers that make American manufacturers the best in the world, and Just Born continues to lead the way among confectioners. If we do our part here in Congress to lessen government regulations, to expand trade opportunities and to lower taxes to encourage economic growth, we will see more success stories like Just Born, Inc.

Mr. Speaker, I congratulate Just Born and 3 generations of Lehigh Valley employees for sweetening America.

Mr. Speaker, I thank the gentleman from Alabama (Mr. Bachus) and appreciate all his help on this legislation as well as the time he has yielded to me. I would also like to thank (Mr. Kanjorski), an original cosponsor of my bill, which is part of this one, as well as the gentlewoman from New York (Mrs. Kelly) for her work.

Mr. Speaker, I yield to the gentleman from Iowa, with whom I actually have a disagreement on this particular issue, but I have enormous respect for his opinion and would like to give him an opportunity to rebut a point made earlier.

Mr. Speaker, reclaiming the balance of my time, I would just say that I appreciate the thoughtful remarks of the gentleman from Iowa but respectfully disagree, and I think that the merits of this bill are really quite strong.

In fact, the combination of the bill that I introduced, H.R. 859, and the bill that the gentlewoman from New York (Mrs. Kelly) introduced, H.R. 758, really are a modernizing effort here. It is going to help small businesses and their employees. It is going to help small banks and their employees and their customers. It is pro-free market legislation. It is bipartisan. It is really a commonsense repeal.

Frankly, it was hard for me to believe when I first discovered that we have a law in the United States of America that says it is illegal for a bank to pay interest on a business checking account. I thought that was the business banks were in, as a matter of fact. But in fact it is hard to repeal a bad law in this country, and we have had this one on the books for about 70 years. Its repeal is long overdue. Today is our chance to do what we can do in the House to abolish this bill.

Now, if it goes into effect and is signed into law, the actual repeal happens 2 years from now. I would prefer it happen sooner than that, but this is the compromise that was arrived at. So that is certainly better than continuing with the legislation. But I would like to be precise about the net effect of this. Because it is not precisely that businesses will now start earning interest which heretofore they have not. In fact, what happens now is that banks have found these cumbersome and very inefficient ways to circumvent this prohibition. So they pay the economic equivalent of most of the interest that a business would earn, but because of the expense of administering these bureaucratic programs, the businesses do not get the full value of the deposits they have.

At the end of the day, we should not force banks and their customers to go through a lot of expensive and inefficient and economically unproductive hurdles to avoid a regulation that has no merit in the first place. So that is why we are here, to repeal this.

Mr. Speaker, I thank everybody who has been involved in supporting this legislation, and I urge my colleagues to vote ``yes.''

H.R. 758 contains a provision, section 7, entitled Rule of Construction, regarding escrow accounts maintained for purposes of settling real estate transactions. This provision is similar to section 7 of H.R. 1009, the Business Checking Freedom Act of 2002, a bill I sponsored that the House passed last year. Section 7 of H.R. 758 makes clear that the current legal treatment of certain services and benefits provided by banks in lieu of interest in connection with such escrow accounts remains the same. There are some minor changes to this section from section 7 of H.R. 1009, which clarify that the provision does not prohibit or require the payment of interest on such accounts and that it does not affect State laws regrading the payment of interest on escrow accounts. I understand the latter is intended to ensure that State laws governing mortgage servicing escrow accounts for the monthly collection and payment of taxes and insurance are maintained. In brief, section 7 does not alter the current legal definition of interest or the legal treatment of real estate settlement escrow transactions.

Under section 7, current Federal legal standards, including regulatory interpretations, regarding the definition of interest on deposits will continue to stand. For example, the Federal Reserve's Regulation Q currently provides that services and benefits can be given by banks in lieu of interest to depositors and that the provision or the receipt of such services and benefits does not constitute interest. This has been the Federal Reserve's consistent

regulatory and interpretive view for decades. For example, a Federal Reserve staff opinion in 1978 stated that the ``absorption or reduction'' of banking service changes did not constitute the payment of interest (Fed. Res. Bd. Staff Op., October 27, 1978), a view also reflected in a 1964 Fed. interpretative letter (1964 Fed. Res. Interp., July 17, 1964). Under these regulatory principles, title companies and agents receive bank services, such as free printed checks, overnight float and safe deposit and night depository facilities, armored car services, as well as low-interest loans, that help defray their cost of maintaining real estate settlement escrows, ultimately lowering the cost of these services to the public. Such accounts often times last only a few days, the time necessary for settlement payments and other disbursements to be made after the closing of a real estate transaction.

In our Nation's highly developed financial system, Federal banking law and regulations have operated to facilitate the smooth and efficient flow of real estate transactions and promoted American homeownership. I am optimistic that these services will continue to be provided in the current efficient manner when H.R. 758 becomes law.