Floor Statements

Mr. Speaker, I was absent for legislative business last week from June 2, 2003 through June 5, 2003 due to the birth of my son, Charles Wilson Ryan on Friday, May 30, 2003, As a result, I missed rollcall votes 227 through 248.

Had I been present, I would have voted ``yea'' on the following rollcall votes:

227, H. Res. 159, Expressing the Profound Sorrow on the Occasion of the Death of Irma Rangel;

228, H. Res. 195, Congratulating Sammy Sosa of the Chicago Cubs for hitting 500 Major League Home Runs;

229, H.R. 1465, Designating the facility of the United State Postal Service in Iron Station, North Carolina as the ``General Charles Gabriel Post Office'';

230, S. 222, the Zuni Indian Tribe Water Rights Settlement Act;

231, S. 273, the Grand Teton National Park Land Exchange Act;

234, H.J. Res. 4, Proposing an Amendment to the Constitution of the United States Authorizing the Congress to Prohibit the Physical Desecration of the Flag of the United States;

235, H. Res. 231, Supporting the Goals of Peace Officers Memorial Day;

236. H. Res. 257, Providing for Consideration of H.R. 760, The Partial-Birth Abortion Ban Act;

237, H. Con. Res. 177, Recognizing and commending the members of the U.S. Armed Forces, and the allies of the United States and their armed forces, who participate in Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq and the dedication of military families and countless others for their support;

238, H. Res. 201, expressing the sense of the House of Representatives that our Nation's businesses and business owners should be commended for their support of our troops and their families as they serve our country in many ways, especially in these days of increased engagement of our military around the world;

239, H.R. 1954, Armed Forces Naturalization Act;

242, H.R. 760, The Partial-Birth Abortion Ban Act;

243, H. Res. 256, Providing for the consideration of H.R. 1474, Check Clearing for the 21st Century Act;

244, H. Res. 258, On Ordering the Previous Question for the consideration of S. 222, Zuni Indian Tribe Water Rights and Settlement Act and S. 273, Grand Teton National Park Land Exchange Act;

245, H. Res. 258, On Agreeing to the Resolution for the consideration of S. 222, Zuni Indian Tribe Water Rights Settlement Act and S. 273, Grand Teton National Park Land Exchange Act;

246, H.R. 1474, Check Clearing for the 21st Century Act;

247, S. 222, Zuni Indian Tribe Water Rights Settlement Act;

248, S. 273, Grand Teton National Park Land Exchange Act.

Had I been present, I would have voted ``nay'' on the following rollcall votes:

232, S. 763, Birch Bayh Federal Building and United States Courthouse Designation Act;

233, Substitute Amendment offered by Mr. Watt to H.J. Res. 4, Proposing an Amendment to the Constitution of the United States Authorizing the Congress to Prohibit the Physical Desecration of the Flag of the United States;

240, Substitute Amendment offered by Mr. Greenwood to H.R. 760, Partial Birth Abortion Ban Act;

241, Motion to Recommit with Instructions to H.R. 760, Partial Birth Abortion Ban Act.

Mr. Speaker, I rise today to honor Bishop Lawrence L. Kirby of Racine, Wisconsin for the spiritual leadership that he has provided to the members of the St. Paul Missionary Baptist Church and the positive influence that he has had on Racine's African American community.

For the past 22 years, Bishop Kirby has served as the Senior Pastor at St. Paul's Missionary Baptist Church, the oldest African-American church in the State of Wisconsin. Under his leadership, St. Paul's has grown significantly, evolving into one of the largest and most influential churches in the State. A visionary leader, Bishop Kirby has implemented a series of progressive assistance and developmental programs that serve the needs of the entire community. He has also founded numerous faith-based community organizations and has been called to preach around the world, spreading a message of faith, tolerance and compassion.

Throughout his career, Bishop Kirby has remained steadfastly dedicated to helping others and he has not wavered in his commitment to his family, his church, his community and God. His generous actions have touched the lives of the less fortunate, filling their hearts with love and inspiring them to succeed. The citizens of Wisconsin's First Congressional District are fortunate to have been blessed with this wonderful, caring and compassionate man. I ask my colleagues to join me in honoring Bishop Lawrence L. Kirby for his efforts to make the world a better place in which to live.

Mr. Speaker, what we are hearing tonight are two different philosophies, two different emotions. Over here on this side of the aisle, we are hearing the emotions of fear, envy, and hate. Over here we are hearing the emotions of hope, growth, and prosperity. That is what this is about.

Their philosophy is, you cannot send more than enough to Washington because we can spend it better than you can. That is what we are hearing on this side of the aisle. What we believe is that you can better spend your money yourself. That is what works in this country. That is what freedom is all about.

What we are doing in this tax bill, and many people say this is such a huge tax cut, what we are doing in this tax bill is letting Americans keep more of their hard-earned money. We are cutting income tax rates across the board. We are cutting taxes on investment and businesses for job creation.

When we look at what has happened in this economy, when we look at the recession we are coming out of, when we look at all those things that hit this economy, the stock market, all the shenanigans at the corporate level, at the 9/11 problems, the terrorist attacks, we need growth in this economy. We need jobs in this economy. And when we see that investment in this economy has been declining for 8 consecutive years, we need to fix that. That is exactly what this tax bill does.

If anyone thinks that this tax cut is too big, this tax cut is a 1 percent tax cut. We are cutting taxes 1 percent of revenues. Out of a $28 trillion budget that we are going to spend over the next 10 years, we are simply cutting taxes $350 billion to try to move an economy that during this decade will kick off, at a standstill, $140 trillion in

output. We are trying to move it from a standstill to growing and giving our people jobs.

That is what this tax bill is all about, and it is rooted in the philosophy that people ought to be able to keep more of what they earn so they can be free to spend it as they see fit.

Mr. Speaker, I would like to engage the chairman of the Committee on Ways and Means in a colloquy. I would like to speak specifically about one provision in the bill before the House today regarding the double taxation of dividends.

As drafted, the bill applies a new 15 percent-5 percent rate structure to dividends paid by domestic corporations, while dividends paid by foreign corporations will be taxed at the new individual rates of 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and as much as 35 percent.

U.S. subsidiaries of foreign-based firms are a very important part of our economy and economic recovery. These companies employ 5.6 million workers right here in America. Furthermore, American taxpayers own approximately $1.8 trillion worth of foreign stocks. Approximately 900 non-U.S. companies are traded on U.S. stock changes.

Will the chairman correct this discrepancy as we move forward so as to ensure that the final bill passed by Congress reduces taxes on the dividends paid by both domestic and foreign-owned corporations and treats them equally?

I yield to the gentleman from California.

Mr. Speaker, reclaiming my time, I thank the chairman for engaging in this colloquy.

Parliamentary Inquiry

Mr. Speaker, millions of working Americans depend on mutual funds to invest and save for their future. Fund investors are overwhelmingly middle-income families and individuals who are investing for the long term and mutual funds provide an ideal way for smaller investors to invest in the U.S. economy. Easing the burden to invest and increasing the opportunities for these investors to put more into their portfolios is especially critical now given the nation's current economic health.

Because mutual funds are primarily used for long-term investments, many fund investors are understandably frustrated by a tax rule that forces them to pay tax on capital gains before they sell their shares in the fund. To further their long-term savings and investment goals, fund investors typically choose to have any capital gains distributions, which they would otherwise receive from the fund, automatically reinvested in the fund. Nevertheless, under current tax law, these fund investors are required to pay tax on such amounts even though they took no action to trigger those gains and their investment dollars remain in the fund. As widely reported in the press, fund investors find this tax rule inconsistent with both the long-term nature of their investment and their understanding of how investments are taxed.

This tax problem would be solved with my legislation by permitting fund investors to defer tax on mutual fund capital gain distributions that are automatically reinvested in the fund. These gains would be taxed when the investors sell their shares in the fund. Postponing the capital gains tax until the fund investor decides to sell his or her shares in the fund is consistent with the basic philosophy that a capital gains tax on an investment is not due until you sell the investment. This is the way an investor who holds stock directly is taxed.

Deferring capital gains tax on mutual fund investors until they sell their fund shares will promote savings by middle-income investors. Adoption of this approach will permit those savings to grow more rapidly and remain invested in America's economy as intended by the fund investors.

My bill will promote personal savings and investment in the national economy by changing tax rules to reflect the continuing nature of the shareholder's investment in the fund.

Mr. Speaker, I move that the House do now adjourn.

The motion was agreed to; accordingly (at 6 o'clock and 48 minutes p.m.), the House adjourned until tomorrow, Saturday, April 12, 2003, at 10 a.m.

Mr. Chairman, I thank the chairman for yielding me this time.

I want to introduce another point to this topic of debate, and that is, if we take a look at the fleet consistency of the different car manufacturers, the Big Three American auto manufacturers sell more SUVs and trucks than light cars, relative to the Japanese auto manufacturers, who sell more light, small cars relative to trucks and SUVs. What ends up happening is, this amendment will not serve to get more heavy trucks off the road. It will simply serve to shift market share from U.S. auto manufacturers to Japanese auto manufacturers, and the short time line will actually require the lines to go down.

So the line that makes the Tahoes and Suburbans in Janesville, Wisconsin, which is on a 5-year schedule, will have to go down to accommodate these changes. Meanwhile, Japanese acoumeters, like the Sequoias, will fill in and take that market share.

It will not take more cars off the road. It will change market share from U.S. auto manufacturers to Japanese auto manufacturers, and it will simply cost U.S. auto manufacturing jobs.

Mr. Chairman, I offer an amendment.

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

Mr. Chairman, my amendment is fairly straightforward, but it may take me a second to explain. In the 1990 Clean Air Act, what we did in that law was, if an area went out of ozone nonattainment compliance, if an area was too dirty in the air, among the things that were required in that area were new cleaner blends of gasoline. So what occurred in the 1990 Clean Air Act was a new system of fuels whereby the local area that went out of compliance could adopt its own blend of fuels, and so where in 1990 we had three different blends of gasoline in America, we now have 14 different blends of gasoline each with three grades, giving us 45, essentially, different blends of gasoline.

What this map right here shows is all the different boutique fuel requirements across America, and what is interesting about this is they are not fungible with one another. So, for example, the gas we burn in the Milwaukee and Chicago region cannot be used in any other part of the country and we in that area cannot use other blends in our part of the country. So if we have a pipeline break, if we have a refinery fire or something happens to disrupt the refinery and pipeline system which is running at 98 percent capacity today, we have a huge shock or drop in the supply of that blend of gasoline, and consequently, we have sharp price spikes.

So looking at today's system, we could conceivably drive in from Green Bay, Wisconsin, just down to St. Louis, Illinois, fill the gas tank with four different blends of gasoline, northern or conventional gas in Green Bay, northern reformulated gas or ethanol in Kenosha, a southern reformulated gas in Illinois, and a different reformulated gas in St. Louis.

This is where we are today. This is because of all the areas that are out of compliance with the Clean Air Act.

But looking at what is to come tomorrow in the Clean Air Act is this: Right now, 136 counties in America are out of compliance with the Clean Air Act, and because of that, have to have a blend of reformulated gas. It is these other blends I just showed the Members, Mr. Chairman. But what is going to happen, when next year we move from the 1-hour ozone standard to the 8-hour nonattainment standard, is another 155 counties will be automatically out of attainment. They will have to have new blends of gasoline.

So if we look at the map here, the blue areas on my map are the current

nonattainment areas. The red areas on the map, which is most of the densely populated parts of America east of the Mississippi, will also go into nonattainment next year. And what this is going to cause is the proliferation of more boutique fuels. According to the nonpartisan Energy Information Association, this will bring our country from a boutique fuel system of 16 different boutique fuels to another 24 boutique fuels on top of that, giving us more than 100 different blends of gasoline.

So let me repeat that, Mr. Chairman. What we are going to, with the new 8-hour ozone attainment rules starting next year, is we are doubling the amount of areas in this country that will go out of attainment. We move from 16 different blends of gasoline to having another 24 different blends of gasoline on top of that system. That is where we are headed today.

It is an unsustainable position. And what happens is our supply of fuel gets tight. If the supply lines for any reason get disrupted, we have huge price spikes.

What my amendment does is very simple. It simply says for these new areas going into nonattainment, for the other areas who are already at nonattainment who want to change their gasoline, they now have a menu of two clean fuels that are preferred by Federal Government from which to choose, because, for now, what is going to happen when all these counties and all those States go into nonattainment, is up to them.

They are going to choose various different boutique fuels to meet their particular needs, and this proliferation of specific blends of gasoline will get out of control. We want to stop that from happening, and so we are simply offering a solution by having a Federal Government menu of two fuels for them to choose from before they try to go and have their other type of gasoline.

Mr. Chairman, we are going to have huge gasoline price spikes, as we have had in the upper Midwest lately, in the very near future if we do not fix this problem. The source of that problem is the proliferation of boutique gasoline fuels, and we have a solution in this amendment. It does not force the States to do it, it does not preempt States' rights. It simply says to the States, choose from this menu of clean fuels that the Federal Government offers before they want to go on their own and have a boutique fuel.

That is what this amendment does, Mr. Chairman.

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

Mr. Chairman, I yield myself 1 minute.

Mr. Chairman, I think there is a misunderstanding by the gentleman from New York (Mr. Engel).

Number one, a lot of people are saying we need to study this some more and that there is a study in this bill. We have had a very exhaustive study, last year by its EPA, followed up by numerous studies by the EIA, along with the study from the Federal Trade Commission; so we have had a lot of studies on this. All of them conclude with, we have to get our hands around this boutique fuel problem and consolidate the amount of boutique fuels.

Now, how the amendment works is this: The preference will not exacerbate the boutique fuel problem; it will simply streamline the boutique fuels, so that States and counties who now have this ozone attainment standard they have to meet will go to the federally preferred fuel blends, instead of to different kinds of blends that are boutique and that exacerbate this problem.

The State of New York will not be affected by this amendment.

Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Barton).

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I agree with the idea and the need to modify the revapor pressure levels. I do not think that in any way hurts the spirit or intent of this amendment.

The intent of this amendment is to first have States go to the preferred fuel and then have to prove that they cannot use that fuel and they have to go to some other kind of fuel, so that we bring them toward a preferred fuel. What that fuel is is clearly something we all should discuss, and there is not one great answer to that question.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, 6.8 and 7.8, those are from the EPA study conducted last year which recommended a three-fuel menu, 9.0 RVP, which is what we call conventional gas; 7.8 RVP, which is sort of a midlevel clean-burning gas that 20 percent of the country uses; and 6.8 RVP, which is reformulated gas. That is the revapor level equivalent of formulated gas. Those are recommended to us by the Environmental Protection Agency.

If the gentleman will yield further, there are 45 different fuel blends in existence today. According to the EIA, Energy Information Agency, there will be 69 different fuel blends with the new 8-hour ozone attainment if we do not do something to reduce the number of these blends.

No, it still keeps the SIP process, the State Implementation Plan process. It simply says, we want you to go look at these blends. We prefer these blends. You can satisfy your SIP process with these blends, and if you cannot use these blends, you have to prove that you cannot use these blends and then prove that this will satisfy the Clean Air Act requirements, if you choose not to use these blends. These blends are already cleared under the Clean Air Act today.

Because we did not want to preempt States' rights, because we did not want to force each locality as to what blend they would use, we wanted to make it so that they can have an easier path towards satisfying their Clean Air Act requirements by going to these blends first, knowing that they will satisfy the Clean Air Act if they adopt these blends. By having more and more areas adopt these blends, they will be in more supply, they will be cheaper in place, and there will be a greater incentive to adopt these standard blends from this Federal menu. But if they, for some reason, cannot do it, then they can go through the SIP process to get around it.

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

Mr. Chairman, I yield 1 minute to the gentleman from Louisiana (Mr. Tauzin), the chairman of the Committee on Energy and Commerce.

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

Mr. Chairman, I just want to conclude by thanking the chairman for working with us. This is an issue that has plagued motorists in Wisconsin for a few years in a row. It is plaguing all motorists east of the Mississippi, and it is spreading to the rest of the country.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I will explain the chart so the gentleman from Washington can understand it. Even if he cannot see it, I will explain it all to him.

Mr. Speaker, I thank the gentleman for yielding time to me. Mr. Speaker, these are not sales tax charts, by the way, I say to the gentleman from Washington. Let me explain what these charts do in a second.

We are here to talk about tax reform. We are here to talk about, can we have a better way of raising revenue for the government without doing so much harm and damage to our economy, to the daily lives of individuals and to the businesses and job creation in this economy.

There is an issue that is also important, not only to mention the fact that our Tax Code consumes so many hours of preparation, wastes so many trees, and the fact that it is just so large; but it also inhibits our competitiveness globally. Where we work on the Committee on Ways and Means, we are experiencing this on a day-to-day basis.

But the point that I want to make here today, the reason we need to reform our Tax Code is not just to make it easier for people to keep more of the money they earn, but to make it simpler, to make our Tax Code less punitive.

Let us take it for a fact, the Tax Code punishes all the qualities that make America great. It penalizes us if we get married, it penalizes us if we want to have kids, it penalizes us if we have a small business, it penalizes us if we save, it penalizes us if we invest, it penalizes us the more we work and the more successful we become. These are things we should not be penalizing in this country; we should be rewarding those things in America.

Where it really is arrogant is in the fact that we are losing jobs to foreign trade every day in this country. When we look at our Tax Code, and this is what this chart goes to, if we look at the effective top central and local corporate rate, meaning how much do we tax businesses in this country, if we look at the entire industrialized world from Ireland on up to Japan and every other industrialized nation in the world, the United States has tax rates on business income that are higher than any other industrialized country in the world except for Japan. Japan is in their second decade of recession.

If we take a look at just the tax rates on capital, and what I mean when I say ``capital'', that is investment, that is plant and equipment, that is expansion of businesses, that is capital. When we take a look at the tax rates on capital such as the tax rates on dividends, that tax rate is the second highest in the world except for Japan, again, a country that is in its second decade of recession.

So when we sit here and tax capital, when we sit here and tax our businesses at not 20 percent, not 15 percent, but at an effective tax rate of over 35 percent in America, we are taxing jobs overseas.

More importantly, what is also harmful with our Tax Code is, unlike our industrial competitors, we tax our income on a worldwide basis. Not only do we have the second highest tax rates in the world, we tax all worldwide income made by U.S. companies at that higher

rate. If you are an American company making money in Ireland, a country with a corporate tax rate of 17 percent, you are going to end up paying that U.S. tax rate of 35 percent, whereas it will be much less for France or England.

Mr. Speaker, we are losing jobs because we tax our companies and businesses more than anybody else does. We tax them overseas. What happens? Foreign companies are taking over U.S. companies, pushing income and jobs overseas.

We need to lower our tax rates, we need to fix our Tax Code and make it more efficient so we can keep jobs here at home.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I would tell the gentleman, we have had hearings in the Committee on Ways and Means. We have had hearings in the Subcommittee on Select Revenue Measures on tax reform ideas.

Well, in the subcommittee we had a lot of hearings.

Mr. Speaker, I am today introducing legislation, along with my colleague Congressman Ben Cardin, that would allow charitable and educational organizations to make grants to fraternities, sororities, and other collegiate organizations to provide housing and student facilities to the same extent that tax-exempt colleges and universities may provide such facilities for students.

By way of background, taxpayers may generally deduct contributions to non-profit educational organizations (i.e., educational organizations described in section 501(c)(3) of the Internal Revenue Code (``Code'')) such as colleges or universities. These colleges and universities may expend their funds (including donated funds) on student facilities such as dormitories, dining halls, study areas, libraries, computers, laundry facilities, physical fitness facilities, and social or recreational areas without jeopardizing their tax-exempt status.

State and private colleges and universities do not, and cannot, provide all of the housing and related student facilities necessary for their student bodies. Collegiate organizations such as fraternities, sororities, and other student associations (e.g., Muslim Students Association, Fellowship of Christian Athletes, and Hillel) fill a large part of the collegiate housing gap. Fraternities and sororities alone provide housing for more than 250,000 students each year. These student associations take on significant financial burdens in order to provide student housing without cost to affiliated colleges and universities.

Fraternities, sororities, and student associations provide collegiate housing through tax-exempt organizations, but their exemption comes under Code section 501(c)(7), with the result that direct contributions to these organizations are not deductible. However, educational organizations established to benefit these fraternities, sororities, and other student associations may qualify under Code section 501(c)(3) to receive deductible contributions.

The current IRS position is that it will not give a tax-exemption ruling to these educational organizations unless they limit student facility grants to those that are solely for educational use (with exceptions for minor social or recreational use). According to this IRS position, a fraternity foundation, for example, may make grants to a fraternity for the construction (or for annual operating expenses) in a fraternity house of a library, study area, computer area, or instructional area. The fraternity foundation may also make grants, for computers, computer desks, and chairs, if similar to what is provided by the specific college with which the fraternity is associated, and for internet wiring, if the specific college also provides internet wiring. However, the IRS says that fraternity foundations may not make student facility grants for the construction or operation of sleeping quarters, dining areas, laundry facilities, or dedicated social or recreational areas (such as physical fitness facilities or equipment), or hallways or rooms used for both educational and other purposes.

Under the current IRS position, a charitable organization could not make a grant to a section 501(c)(7) collegiate housing organization (or to an affiliated section 501(c)(2) or (c)(7) organization) to provide fire safety upgrades unless those upgrades were limited to areas that are solely for educational use. However, fire safety upgrades will not provide necessary protection unless they are made throughout an entire building. It has been estimated that just the cost of installing sprinklers in fraternity and sorority housing is over $300 million nationwide.

There is no policy reason for distinguishing between the types of student facilities that may be provided by a tax-exempt college and those that may be provided by another tax-exempt charitable or educational organization to a collegiate organization for the benefit of individuals who are full-time college students. The current IRS position, which we believe is an incorrect interpretation of the law, puts collegiate organizations at a significant disadvantage in obtaining the funds necessary to provide or maintain housing and infrastructure, including the funds necessary to provide fire safety upgrades.

I believe that clarifying that tax-exempt charitable or educational organizations may make collegiate housing and infrastructure grants will encourage private sector contributions to address student housing needs, thus relieving a burden that would otherwise fall on financially strapped colleges and universities. Accordingly, this bill provides that charitable and educational organizations may make grants to collegiate housing organizations (including affiliate organizations holding title to property) for the construction or operation of collegiate housing and infrastructure facilities that are of the type tax-exempt colleges are permitted to provide for their students, including, but not limited to, sleeping quarters, fire safety equipment and upgrades, dining areas, social and recreational areas, study areas, libraries, and computers and related furniture and wiring.

I urge our colleagues to support this worthy legislation.

I am, Mr. Chairman.

Mr. Chairman, I yield 2 minutes to the gentleman from Georgia (Mr. Isakson).

Mr. Chairman, I yield myself 15 seconds.

This is the period of debate where the Joint Economic Committee takes over to discuss the Humphrey-Hawkins period of debate, which is supposed to be about monetary policy. I see from my colleague, the last speaker, we are going to move beyond monetary policy, I guess. So in that spirit, I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

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

Mr. Chairman, I yield myself 10 seconds.

Mr. Chairman, we do not know how much the war is going to cost. The war just got started, and it is not over yet. When we know how long it will have lasted, then we will know how much it will have cost. Then we will be able to budget for it.

Mr. Chairman, I yield 3 minutes to the gentleman from Indiana (Mr. Pence).

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

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

I would just like to point out that veterans spending has increased in this majority budget. Discretionary veterans spending goes up by $1.6 billion, and mandatory spending goes up by $2.3 billion, about a $4 billion increase in veterans spending.

Mr. Chairman, I yield 2 minutes to the gentleman from Georgia (Mr. Kingston).

Mr. Chairman, I yield 2 minutes to distinguished gentleman from Florida (Mr. Putnam).

Mr. Chairman, I am not sure how to respond to all that other than just to say I yield 1 minute to the gentleman from Ohio (Mr. Turner).

We have enough speakers to fill up the time. Would the gentleman like us to catch up?

Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. Chairman, I yield 1 minute to the gentleman from Maryland (Mr. Gilchrest).

Mr. Chairman, I yield 1 minute to the gentleman from Indiana (Mr. Chocola).

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

Mr. Chairman, I would like to point out, the veterans budget increases in this budget. The discretionary budget increases by 6 percent; the mandatory budget increases by 7 percent. We increase veterans spending in this budget.

Mr. Chairman, I yield 2 minutes to the gentlewoman from Tennessee (Mrs. Blackburn).

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

Mr. Chairman, the purpose of this hour of debate is dedicated to the Joint Economic Committee to talk about the economy, so I would like to spend a few moments to do just that.

Our economy is in trouble. Just in the last month of February, we lost 308,000 jobs. That is one of the sharpest drops in recent history. The unemployment rate at this time stands at 5.8 percent. While this is relatively low by historical standards, it is high by recent history. Unemployment was only 4 percent as recently as the year 2000.

Mr. Chairman, there are three parts of our economy by definition, consumption, investment and government spending. Consumption is relatively high in this country: retail sales, new refinancings on homes, car purchasing. It is why our economy grew at 2.75 percentage points last year. Government spending, even though you would not hear it from the other side, is at an all-time high. Investment on the other hand, Mr. Chairman, has declined in this economy. In fact, investment spending in this economy has declined for eight consecutive quarters, for 2 years.

What are we going to do about it? That is an important question, and that is a question that is addressed and answered in this budget.

Mr. Chairman, there are two schools of thought here in Washington. One school of thought we are seeing on the other side of the aisle is that we just need to spend more money, and that way we will grow the economy. Let me review that for a moment here with this chart, and let me explain why more government spending does not create jobs.

Number one, to spend a dollar the government first must tax or borrow that dollar from an individual or business. Second, that individual or business now has 1 less dollar to spend or invest. Third, the government then spends that dollar. But, fourth, there is no net effect in economic activity. Government spending goes up by a buck, personal private spending goes down by a buck.

What is the alternative vision to that, Mr. Chairman? The alternative vision is to create jobs and promote economic growth by reducing taxes. How does that happen? How does this work? Number one, the higher taxes are, the less incentive there is to work or invest. It is an economic principle that economists from the left and the right agree upon. For example, an individual will invest more money when their after-tax income on each dollar invested is 80 cents than they would likely invest if their after-tax income is 50 cents. Put another way, if half of your money goes to taxes, you have less of an incentive to work and invest. If more of your money goes into your own pocket, you have a higher incentive effect to work and invest. More investment means more capital to expand, create businesses and to grow jobs. So new and expanded businesses means new jobs. That is why the net effect of reducing taxes in this budget will create jobs.

What kind of tax cuts are we talking about? How many new jobs are we looking at? To give you a quick preview of what Americans are looking at in the President's economic growth package, in the economic growth package that is accommodated in this budget, it is basically this. Under the President's proposal to speed up tax relief, 92 million American taxpayers would receive, on average, tax cuts of over $1,000 in this year alone. Forty-six million married couples would receive an average tax cut of $1,716. Thirty-four million families with children would benefit from an average tax cut of $1,473. Six million single women with children would receive an average tax cut of $541. Thirteen million elderly taxpayers would receive an average tax cut of $1,384. Twenty-three million small business owners would receive tax cuts averaging $2,042. For example, a typical family of four with two income earners earning a combined $39,000 in income would receive a total of $1,100 in tax relief and would wipe out their Federal tax liability.

Mr. Chairman, how many jobs is this going to create? This is something that has been a topic of discussion for quite a while this year, and there are a lot of estimates on this point. According to conservative estimates by the Council of Economic Advisers, this plan will generate 2.1 million jobs over the next 3 years. According to other estimates, like the Business Roundtable, they put that figure at about 3 million new jobs at the end of the year. Macroeconomic Policy Advisers from St. Louis estimates that this economic growth package would increase new jobs, create brand new jobs, to the tune of 2 million new jobs by the end of 2004.

This is what it is all about, Mr. Chairman. The reason we went into deficit is because people went from working and paying taxes to getting laid off and collecting unemployment. Sixty-eight percent of the loss of the surplus that occurred last year alone occurred because of this. We realize more spending is necessary to fight the war on terrorism, to win the war in Iraq, but we also realize that if we can get people back to work, the most moral economic policy is getting a person a job. It is becoming good economic policy, it is good fiscal policy, because if a person has a job, they are paying taxes, and they are bringing more money to the Federal Government.

An issue that often comes around when we are talking about the tax bill is dividends. I would like to shed some light on why we are trying to repeal the double taxation of dividends. It is no secret if you go around this country and talk to manufacturers, talk to farmers, talk to small business men and women, that we are in global competition, that we are under pressure from trade from China, from Mexico, from other areas. One area where our Nation is so uncompetitive is in the area of taxes. When you take a look at how dividends are taxed, it is done basically like this. First a company makes money, and then it pays taxes on that money. Then if it wants to share its earnings with its owners, its shareholders, it passes that on to its shareholders in the form of a dividend. But in this country, that dividend gets taxed again. And so we have double taxation on dividends, which actually looks at about 60 to 70 percent of every dollar moving through our economy.

To put it another way, Mr. Chairman, we tax dividend income higher than any other industrialized country in the world except for Japan. Looking at this chart here, which shows us basically a list of all the industrialized countries in the world, the United States of America taxes dividend income more than any other country except for Japan. I would not want to be Japan because they are entering their second decade of recession right now.

What is accomplished by repealing the double taxation on dividends? Who benefits? This is a discussion that we have heard a lot. Mostly who benefits by repealing the double taxation on dividends are senior citizens. Half of all Americans who receive dividend income are senior citizens, and half of all seniors in America receive dividends. But more than just that. The people who own stocks, half of all households in America own shares in the stock market. People who have pension plans, people who have 401(k) plans, people who have IRAs will benefit from this because by repealing the double tax on dividends, you are increasing the after-tax rate of return on investment. What that means is you are increasing the value of all equities in the stock market. This is why economists from all over the spectrum, liberal and conservative, are telling us that if we repeal the double tax on dividends, we will increase the value of the stock market by anywhere from 7 to 20 percent. Imagine that, a 20 percent increase in the value of stock markets.

Mr. Chairman, we all heard the stories about seniors who have seen their savings portfolio wiped out by the losses in the stock market that have occurred over the last year or two. We have seen the stories where pensioners, where people getting close to retirement have seen their retirement go away to the point they have to go back to work or work longer than they had

planned. If we can do something that would actually improve the value of people's pension funds, IRAs, the stock market, that would be a good thing, I would think.

And so, Mr. Chairman, that is why it is important to do this kind of economic policy. If we repeal the double tax on dividends, not only will we help senior citizens, not only will we help revive the stock market, not only will we help get people their jobs back and grow the economy, but we will also help restore good corporate governance to our Nation's corporations.

One of the reasons why the stock market declined so much in this past year is because of all that corporate malfeasance that occurred. One of the reasons why we have bad decisionmaking in America's boardrooms is because in our Tax Code is an incentive to actually grow your corporation through borrowing, through debt financing, rather than honestly through equity growth. What I mean when I say that is we give companies a tax break if they borrow and borrow and borrow to grow their companies. And when we go into tough times, like a recession, what happens is these companies go bankrupt. That is one of the reasons why WorldCom, Global Crossing and all of these companies went bankrupt. But if we give companies an incentive to share the wealth with their shareholders, to grow their companies honestly through equity, we can strike a blow for good corporate governance.

For many reasons, this is why this economic growth plan makes sense. The most important reason, Mr. Chairman, why we are trying to pass this budget is, number one, protect our priorities, win the war on terrorism, win the war in Iraq, and get people their jobs back. The best way to get this economy growing is to let people keep more of what they earn and allow businesses to keep more of what they make.

One of the other great provisions in this tax bill is the fact that we lower the small business tax rate down to the level of large corporations. What we do not see that is being offered later in the budgets that are the alternative budgets, the Blue Dog budget, the Spratt budget, is that they raise taxes. They actually raise taxes on small businesses. What we are doing here is recognizing the fact that today, this very day, we are taxing small businesses at a higher tax rate than we tax large corporations in America. And so what we are simply trying to do is lower the tax rates on small businesses, not below the tax rate that large corporations pay, but down to the tax rate that large corporations pay.

I urge a ``yes'' vote on this budget, Mr. Chairman.

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

Mr. Speaker, today, together with my colleagues on the Ways and Means Committee, Mr Jefferson of Louisiana, Mr. Shaw of Florida, Mr. Lewis of Georgia, Mr. English of Pennsylvania, Mr. Tanner of Tennessee, Mr. Foley of Florida, Mr. Cantor of Virginia, as well as Mr. Ney of Ohio, Mr. Green of Wisconsin and Mr. Hayes of North Carolina, Mr. Radanovich of California I am introducing legislation that will extend the mortgage interest tax deduction to include mortgage insurance premiums, government and private. This is an important piece of legislation because making mortgage insurance payments tax-deductible will boost homeownership for lower-income, minority and veteran borrowers that typically need mortgage insurance to purchase a home.

It is widely recognized that homeownership helps create stable and safe communities. Thus, the expansion of homeownership has been a longstanding goal of the Federal Government. The Bush Administration announced a goal of 5.5 million new homeowners by the year 2010. To achieve that goal, groups that have typically been unable to purchase homes--young people, low-income, members of minority groups--must be able to participate in the housing market.

Government and private mortgage insurance programs help first-time, low-income and veteran borrowers afford to purchase a home. The VA, FHA, RHA and PMI programs allow buyers to make a down payment of 3 percent or less of the appraised value. Mortgage insurance is a critical factor in allowing middle-income families and minorities to become homeowners. In Wisconsin, approximately 149,000 families held mortgages with either FHA or private mortgage insurance at the end of 2002. Insured mortgages covered nearly 18 percent of home loans originated in Wisconsin in 2001. Insurance, however, covered about 30 percent of the mortgage loans made to Hispanic borrowers in Wisconsin and 28 percent of the loans made to African American borrowers.

In 2001, nationwide, mortgage insurance covered 57 percent of mortgage purchase loans made to African American and Hispanic borrowers and 54 percent of the loans to borrowers with incomes below the median income. The people who use mortgage insurance are policemen, firemen, teachers, and veterans who live in every community throughout the country. Twelve million American families presently use mortgage insurance.

Presently these borrowers cannot deduct the cost of their mortgage insurance payments for Federal tax purposes. If mortgage insurance payments were made deductible, the cost of homeownership would be further reduced for these borrowers, enabling new buyers to get into a home that they might not have been able to afford or to purchase a more valuable home. It is estimated that 300,000 more homeowners per year would result from making these payments tax-deductible.

Extending the tax deduction for home mortgage interest payments to mortgage insurance payments will significantly contribute to making the American dream of owning a home come true for many more of our citizens. Mr. Speaker, I urge my colleagues to support this important legislation and join me in working towards its enactment this year.

Mr. Speaker, today I rise in recognition of the 50th anniversary of Cub Scout Pack 596 from St. Alphonsus Parish in Greendale, Wisconsin. For the past five decades, the leaders, and members of Cub Scout Pack 596 have made invaluable contributions to their community, to Wisconsin, and to our country.

Since 1930, the Cub Scout have helped young boys learn new skills and civic responsibility. Character development, good citizenship, and personal achievement are among the ten purposes of cub scouting. Other goal include spiritual growth, family understanding, respectful relationships, sportsmanship and fitness, friendly service, and fun and adventure. Cub scouts earn merit badges in recognition for physical fitness and talent-building activities. As a former cub scout, I believe that the values I was taught as a member--respect for nature, for other people, and for ourselves--have helped to shape who I am today.

Pack 596 makes a difference in their community every year through programs such as Scouting for Food. In this program, scouts leave empty bags at homes in their neighborhood for the families to fill. The scouts then return the following weekend to take the food-filled bags to the local food pantry. Pack 596 also participates in a toy drive for needy children every Christmas. These boys have consistently worked to make the world a better place and steadfastly honored their motto to do their best.

Mr. Speaker, Cub Scout Pack 596 has served as a model for all cub scout packs for 50 years. They have set a high standard for cub scouts everywhere through their commitment to God and country and their dedication to helping develop the future leaders of our Nation.

Mr. Speaker, I come to the floor today with my colleagues Congressman Jerry Weller, Congressman Jerry Kleczka, Congressman Tom Petri, Congressman Mark Green, and Congresswoman Tammy Baldwin, to introduce the Former Insurance Agents Tax Equity Act of 2003, a bill designed to correct a minor oversight in the Taxpayer Relief Act of 1997. This legislation will help ensure that certain retired insurance agents are not unfairly subjected to self-employment tax. It will bring consistency and fairness to the tax treatment of similarly situated former insurance agents.

Under current law, a small number of agents are forced to pay self- employment taxes on their retirement payments, while their peers at other insurance companies do not. This is because a change in the Taxpayers Relief Act of 1997 (TRA) was drafted in a way that unintentionally excluded a small group of agents.

In the TRA, Congress enacted a provision designed to clarify that certain termination payments received by valued, long-term former insurance agents should be exempt from self-employment tax. Unfortunately, the changes in 1997 provided clarification for most agents, but not others, as a result of how certain insurance companies structure their agent agreements.

As enacted, the 1997 provision provides that payments to a retired agent are exempt from self-employment tax when the agent's eligibility is tied to length of service, but not when the actual amounts of the payments are tied to the agent's length of service. Simply put, this is a distinction without a difference. There is no reason to provide different tax treatment for arrangements that are so similar just because the sum of an agent's termination payment is determined by varying the amount of compensation rather than the term of compensation.

Hard-working agents whose payments are tied to their length of service deserve the same fair treatment accorded to their counterparts at other insurance companies. Both types of contract seek to satisfy the same goal of rewarding loyal, long-time agents with more generous retirement payments. All of these payments, of course, continue to be subjected to income taxes.

The Former Insurance Agents Tax Equity Act of 2003 would simply strike language in the Internal Revenue Code that prevents companies from using a former agent's length of service in determining the amount of termination payment the agent will receive. In doing so, this bill fulfills Congress' intentions with the TRA and provides equitable tax treatment for all former agents. In addition, the budget implications are minor since only a very small number of agents are affected. This provision enjoys the support of thousands of insurance agents around the country, as well as the National Association of Life Underwriters, the Coalition of Exclusive Agents, and the National Association of Independent Insurers.

In the interest of ensuring that termination payments to former insurance agents are

treated fairly and consistently under our tax laws, I hope that you will join me in supporting the Former Insurance Agents Tax Equity Act of 2003.