Floor Statements

I rise to provide clarifying remarks about the reporting requirements by the International Trade Commission, related to China's exchange rate regime. The intention is that Congress be provided with a report that will better inform us in the exercise of our policy-making responsibilities on these issues.

Section 8 calls for a study from the U.S. International Trade Commission within 12 months, regarding the trade and economic relations between the United States and the People's Republic of China. We want the ITC to look closely at the effect of China's economic policies on our trade with China, as well as other factors that affect U.S.-China trade, with a focus on key U.S. industries that compete with Chinese producers or service providers.

Among other things, we would like the ITC to examine the relationship of China's foreign exchange rate regime to its financial, trade, foreign investment, and industrial policies. We believe these policies are all interrelated and would like an explanation of how they operate and how they are related to one another. The ITC should discuss not only the regime of a fixed peg to the U.S. dollar that China has maintained in recent years, but China's recently announced revaluation and peg to a basket of currencies, as well as any further modifications in their foreign exchange rate regime.

The ITC should also describe the range of expert opinion concerning China's foreign exchange rate regime and U.S. and Chinese trade patterns and the U.S. economy in general. We expect the ITC to focus on the area of its expertise, i.e. trade issues, and leave questions related to appropriate currency policy to those institutions better suited to answer such questions, such as the U.S. Department of Treasury.

However, we want the Commission to provide additional analyses, to the extent feasible, that may help us better understand the nature of the relationship between the currency regime and U.S. China trade flows, particularly if the ITC thinks such analysis might help other institutions provide better analysis of broader policy questions. The ITC should certainly consult with the Department of the Treasury, the President's Council on Economic Advisors, and the Congressional Budget Office, all of which have performed economic analyses on currency matters.

Mr. Speaker, my colleague, Chairman Oxley, and I have discussed section 6 of my bill that requires the Department of the Treasury to provide a report on how Section 40 of the Bretton Woods Agreements Act ``can be better clarified administratively to provide for improved and more predictable evaluation.''

We share the understanding that the Bretton Woods Agreements Act implements the international agreements that established the International Monetary Fund (IMF) and the World Bank Group. As such, there is limited scope of action for the United States Government acting ``administratively'' to change how the IMF and the World Bank Group operate internally in order to achieve ``improved and more predictable evaluation.''

Therefore, to clarify this provision, our intent here is that any report prepared by the Treasury Department would respect these limits. It is also our understanding and intent that any report by the Treasury Department pursuant to this section should provide insight regarding how the Treasury Department and the United States Executive Directors to the IMF and the World Bank Group seek to promote U.S. exchange rate policies within those organizations.

I note that substantially similar language has been considered by the Secretary of the Treasury in the past and those limitations were respected. The Department of the Treasury currently provides some of this information to the United States Congress in other forms. We believe that a discussion of U.S. policy and actions within the IMF and the World Bank Group would be a helpful addition to the policy debate in the U.S. Congress. However, we are not requesting that the Treasury Department submit a report suggesting that the United States Government alone can work administratively to improve IMF and World Bank Group analysis and policy.

Madam Speaker, pursuant to House Resolution 387, I call up the bill (H.R. 3283) to enhance resources to enforce United States trade rights, and ask for its immediate consideration.

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

Madam Speaker, today the House has yet another opportunity to vote on a very important bill, which, in my view, takes the largest step towards strengthening our trade remedy laws in over 15 years.

Madam Speaker, this bill is a comprehensive approach toward eliminating many of the inequities that exist in our existing trade relationships, and particularly the U.S.-China bilateral trade relationship. This legislation would hold China accountable and create tough mechanisms to ensure compliance, providing tools for us to use to gain compliance, should China fail to do so, on its fundamental trade obligations.

Voting for this bill today, Madam Speaker, will send a strong signal to Beijing that Congress will not sit idly by while China's mercantilist trade policy injures U.S. employers and destroys jobs, particularly in our vital manufacturing sector. Voting for this bill today, Madam Speaker, will send a strong signal to China and to every country that this Congress will do what it takes to ensure that our trading partners fully abide by the rules and are not rewarded with unfettered access to our market when they are not prepared to make the tough choices that they are obligated to, to follow the rules.

Let me make it very clear, given the experience with this bill with the minority as this bill was brought up yesterday, it has to be clear, Madam

Speaker, that voting against this bill will send a dangerous signal that this Congress is willing to turn a blind eye to Chinese complacency, and we continue with the status quo which, ultimately, puts many of our most important parts of the economy at risk.

I believe this bill is strong, responsible, and comprehensive. This legislation would, among other things, close an existing loophole which bars the use of the countervailing duty law against nonmarket economies such as China. Right now a major tool in our arsenal is unavailable when dealing with Communist countries. To my mind, it is absurd that when we are able to determine that products come in from France, Japan, Brazil, or Taiwan containing subsidies, we can use the countervailing duty law to strip the benefits of those subsidies, but, by contrast, we cannot do so if we discover that China or Vietnam have subsidized products that are entering our market.

This is an absurd situation. It is one that is the result of a court decision from the 1980s, the so-called Georgetown case, and for years I have advocated that we close this loophole. This is the core of this bill and the single most important reform that we have included.

Second of all, this bill would establish a strong and external system to audit China on its compliance with trade obligations on important issues like intellectual property rights, market access, and transparency. What is more, this legislation would place Congress strongly on record as opposing attempts to use the WTO to water down our domestic trade law protections.

This legislation would require the Treasury Department to define currency manipulation and clarify legal protections against China, an important initiative and language that we have refined in light of the developments of a week ago in Chinese currency policy.

This legislation would also authorize increased funding for the United States Trade Representative to create more trade cops to improve enforcement of existing trade laws.

This legislation would also replace the current bonds that are used by new shippers and antidumping cases with cash deposits, and, over the next 3 years, in a sunset situation, would effectively close a loophole that particularly the Chinese have been using to avoid antidumping penalties in certain cases.

Finally, this legislation would authorize funding for the International Trade Commission to provide help in expediting its dealings with all trade issues.

This is a responsible, WTO-consistent initiative that I realize has been described by the other side as a fig leaf, a smoke screen, or something else. I must say, this is very much a mainstream initiative that is designed to show the strongest possible support in this Chamber for challenging China on its mercantilist trade policies.

I regret the vote of yesterday in which I think, in a very shortsighted fashion, many in the minority chose to put up a vote to slow us down here and, in the process, reduce the opportunity, if not eliminate the opportunity, for quick Senate action on this bill. I believe we should have voted yesterday to pass this bill. But the other side has one more opportunity to set the record right and make very clear that they are prepared to work with us to deal with the problem of China trade.

I believe that passage of this legislation is essential for the economic future of the next generation, for the future of good-paying jobs in places like my native northwestern Pennsylvania, where we make things for a living, and we need to get this policy right. That is why I strongly urge my colleagues to support and swiftly pass this important measure.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I yield myself 1\1/2\ minutes, first off, to invite my opponent, or my colleague, to actually read the bill.

I think this is sort of amusing. He criticizes us for dealing with the problem of double-counting, and yet the GAO conceded that this was a serious problem. Our bill has dealt with it directly, and this is an issue I have been involved in for years, and, honestly, our friends from the Committee on Ways and Means on the other side have not been.

Yes, our language encourages compliance with the WTO, but it is not self-executing, so I think that is actually a good thing.

He criticizes us for having a sunset on bonds. I thought the other side loved sunset provisions, particularly in the PATRIOT Act. We need to revisit this issue in a few years and see if it is having a negative impact.

We also, may I point out, do require the Treasury to revisit its current definition on currency manipulation, which, I would submit, is the principal problem with the application of the current law as it applies to currency manipulation.

Finally, we authorize funds, which is within the jurisdiction of our committee. Their bill does not authorize funds. In my view it is appropriate for us to specify through the authorization process how USTR is going to apply this money to new trade cops.

And, finally, may I point out, the gentleman claims that people in affected industries are opposing this legislation. Actually, this has been endorsed by the National Association of Manufacturers, the American Forest and Paper Association, the Forging Industry Association, the North American Die Casting Association, the Industrial Fasteners Institute, and the Vanadium Producers and Reclaimers Association.

The final point I would make is that when it comes to government procurement, we lifted Mr. Rangel's provisions. So I am not sure where their criticism is coming from.

Madam Speaker, I yield 2\1/2\ minutes to the gentleman from Arizona (Mr. Hayworth).

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

Madam Speaker, I yield 2 minutes to the gentlewoman from Pennsylvania (Ms. Hart).

Madam Speaker, I yield myself 45 seconds.

First of all, if I am guilty of hyperbole, that certainly was not my intent.

I would also like to point out there are some that share my view of the importance of this legislation. Endorsing this bill from the National Association of Manufacturers, John Engler, their president, wrote, This bill would give U.S. companies the ability to offset unfair subsidies that benefit many of their competitors in China and other nations. For the first time, it will give Americans the same trade rights guaranteed to others under the World Trade Organization rules.

For those who wonder why the other side voted en masse against this bill yesterday, in today's Hill, according to the spokesman for the Ways and Means Democrats, ``The minority's near unified opposition to the bill stemmed as much from its role in the CAFTA battle as from the strength of its content.''

Now that to me is cynicism, and I think puts it into context.

Madam Speaker, I yield 4 minutes to the gentleman from Florida (Mr. Shaw), the chairman of the Subcommittee on Trade of the Committee on Ways and Means.

Madam Speaker, how much time is remaining?

Madam Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Turner), a very distinguished Member of the House, who in a short period of time has become a real fighter for fair trade.

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

Madam Speaker, I yield myself 1\1/2\ minutes to clarify a few points raised by the gentleman from Maryland (Mr. Cardin) and the prior speaker.

First of all, this legislation does have a significant approach not only to dealing with some of the loopholes in the antidumping, as spoken for in the bond provision, but also dealing with the problem of subsidies, where we do not apply countervailing duties in cases where communist countries are found to be sending products into our market currently. I believe, as I will make clear in a colloquy in a few minutes, that this language does not create additional loopholes but, in fact, I think provides a real and substantial solution.

I would also point out that this legislation does do something meaningful on the currency issue by requiring the Treasury to revisit how they define currency. I will concede in the bill that was belatedly filed by the other side, when we had already announced our bill, there is a provision using a 301 to deal with currency. But I must tell you, Madam Speaker, that even that procedure has a potential loophole to allow an administration to wiggle out. So substantively, it is not clear to me there is a major difference.

I believe with the limited move forward that China has already evidenced, the time has come to give them an opportunity to indicate to us by action whether they are sincere or not. I think the currency language in our bill is adequate to allow that to happen.

Madam Speaker, I yield 3 minutes to the gentleman from Georgia (Mr. Gingrey), who in two terms in the House has already made clear he is a leader on trade issues and on economic issues.

Madam Speaker, I yield such time as he may consume to the gentleman from Utah (Mr. Bishop) in order to engage in a colloquy on some of the issues raised by this debate.

Mr. Speaker, will the gentleman yield?

No, and I thank the gentleman for raising this issue, Madam Speaker, because it has been raised during this debate. It is well understood that World Trade Organization agreements and WTO dispute settlement decisions are not self-executing, that is, they are not binding on the United States in and of themselves. Congress must enact any changes to U.S. law resulting from WTO agreements or WTO decisions.

If the gentleman will continue to yield, that is correct.

No, and I thank the gentleman. This provision does not force the Commerce Department to do anything inconsistent with U.S. law. Instead, it is designed to provide flexibility to Commerce in interpreting the law.

That is correct.

No. Agencies are presumed to act in good faith when implementing a statute in accordance with international obligations. There is no additional requirement.

Madam Speaker, I have no further requests for time, and I believe I have the right to close.

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

First of all, I would like to thank the chairman of the Committee on Ways and Means, the gentleman from California (Mr. Thomas), for giving us the opportunity to have a debate and have a vote on this bill at a time when I

think it is particularly important that this Congress go on record deliberately challenging China in many of its mercantilist trade policies.

As I sat down with the gentleman from California (Mr. Thomas), I worked closely with him to come up with a bill that would not be a panacea, would be a compromise, and would be a compromise that we could pass in the House by a wide margin and also pass in the United States Senate.

We have heard some sentiment from the other side of the aisle, and I think it is sincere, that wishes we could have gone further in this bill. I must say part of me also wishes to have gone further in this bill, but I believe this is a practical bill, but also a substantial bill that we can pass and can make a tangible start in strengthening our trade policy. That, I believe, makes it a very important bill in itself.

I congratulate the gentleman from Maryland (Mr. Cardin), whom I have worked with on so many trade issues, and I am sorry to be disagreeing with him on this bill. I believe on the face of it, this bill is substantial. It is strong, responsible, comprehensive, and it moves in the right direction. It closes a loophole dealing with countervailing duties, a loophole that has for years been out there, and Congress has lacked the will to take it on.

We would for the first time apply countervailing duties where we determine Communist countries like China are involved in subsidizing their products. This would add a major tool in our arsenal in dealing with these countries and making them play by the rules. To me it is absurd when we find a subsidized product coming in from France, Brazil, Japan or Taiwan, we can apply countervailing duties to strip them of the benefit of their subsidy, but we cannot do it with China or Vietnam.

This bill moves forward and with clear language, but without double counting, which was not our intent; deals with this issue in a direct and refined way.

This bill also would establish a strong auditing system to make sure that China is complying with the trade agreements for which we are already a party, and deal with their trade obligations on intellectual property rights, market access and transparency.

This legislation does include resolution language dealing with issues like the current rules negotiation on the WTO, but it also requires the Treasury Department to do more than a study. It requires the Treasury Department to revisit its current definition of currency manipulation so as to make the current laws already on the books against currency manipulation something other than a dead letter.

We do increase funding, but we do it in the form of an authorization, and that is so important because that spells out how the U.S. Trade Representative can use the money, and it specifies that we are going to use that additional money for trade cops that are going to improve the enforcement of existing trade laws and the tracking of existing treaties, and that is essential if we are going to have a more balanced approach to that important trade relationship we have with China as well as with other countries.

This legislation would also close the current loophole dealing with antidumping cases in which some use bonds and then skip out on them in order to avoid paying their obligations. This is something I know the other side of the aisle agrees with because they included it in their last-minute legislation as well.

I was disappointed to hear my colleague on the other side of the aisle suggest that this is all reports and not action items. As is clear from a plain reading of the provisions of this bill, these are all action items, and they are all substantial, and they all move our trade policy substantially forward, a trade policy that, after all, we depend on energy in the executive to enforce, but ultimately Congress needs to inform, and it is our constitutional obligation to take an active role in shaping our trade policy.

With record trade deficits that are now exceeding 6 percent of GDP every year, we cannot go forward with the status quo, and this legislation is a substantial, modest, but achievable piece of legislation that will allow us to begin to deal with these problems in a much more direct and aggressive way.

I would hope that having listened to the debate, everyone in this Chamber would think carefully before doing what some in the minority did yesterday, and that is registering a vote against this legislation. This legislation was designed to be a consensus bill. It should not be wrapped up in any other debate, but I do not control the timing of that.

I believe it is fairly clear that our friends in Beijing will look at this debate, will look at how we respond to this legislation, and if we do not overwhelmingly pass this bill, they will conclude that we are not committed to dealing with these problems.

Mr. Speaker, I encourage all of my colleagues to vote for this bill and to send a clear message to our trading partners that we are not prepared to see the status quo go forward.

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

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

Mr. Speaker, I rise in opposition to the motion to recommit.

Mr. Speaker, I rise with mixed feelings because in a different setting, I might be very sympathetic to the argument the gentleman from Maryland (Mr. Cardin) is making. I have been involved myself in the fight to specifically challenge the Chinese on currency issues, but I am disappointed in the timing of this motion, particularly in view of China's recent and very modest actions to move forward on currency, and with the fact that in this context, this motion would function effectively as a poison pill that might very well kill the bill in the Senate.

On the substance, the motion from the other side of the aisle seeks to force the administration to bring a section 301 case against China based on its old currency peg to the dollar. It would also force the administration to use a very narrow and simplistic definition of currency manipulation in its foreign exchange reports.

My understanding is the USTR rightly rejected this petition twice in the past because it would hinder the efforts to change China's former currency regime. In fact, China's recent steps in moving in the direction of a float, however limited, have made it very clear that the timing on this provision is not good.

I would argue that my bill requires that the USTR instead report to Congress every 6 months on the degree to

which the new mechanism moves the currency closer to a market-based representation of its value and requires Treasury to reconsider how it currently defines currency manipulation.

The gentleman from Maryland (Mr. Cardin) might argue that in a sense all that this does is force the United States to bring a WTO case against China on grounds that China is manipulating its currency. However, the motion itself does not appear designed to force the United States to bring a WTO case. In fact, the motion's definition of currency manipulation clearly bears no relationship to the WTO rules.

Instead, this proposal from the other side of the aisle would force the United States to take unilateral action under section 301, which would potentially place us in violation of WTO rules. Section 301 mandates specific actions, including possibly trade retaliation if a foreign act or measure: one, violates or is inconsistent with a trade agreement such as the WTO agreements; or, two, is unjustifiable and burdens or restricts U.S. commerce.

These are separate grounds for taking mandatory action under section 301. The recommittal defines currency manipulation using a fabricated definition as ``unjustifiable.'' Thus, it appears that this initiative is really intended to force the United States to take action under the second prong of section 301, not the prong intended to be used where there are potential WTO violations.

The intent thus appears to be to force the U.S. to impose sanctions without a WTO finding of a breach, thus allowing China to shift the focus from China's currency policies to claims of U.S. breaches of the WTO. In the current context, in my view, that would not be helpful.

Accordingly, with great regret and acknowledging that my colleague from Maryland has been serious about moving forward in the area of currency reform and challenging the Chinese, I feel that his motion to recommit comes up short, and I would urge all of my colleagues to vote it down.

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

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

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

Mr. Speaker, the argument from the other side of the aisle that this issue is somehow tied to CAFTA, I think, is particularly striking and particularly odd because the underlying bill that we are considering today should be on the consent calendar; it should not be controversial with the bulk of people in this Congress who care about the American economy.

Mr. Speaker, today the House has the opportunity to vote on a bill that will take the largest step toward strengthening our trade remedy laws in over 15 years. This bill is a comprehensive approach towards eliminating many of the inequities that exist in our trading relationships, particularly our bilateral U.S.-China trade relationship. It holds China and others accountable and creates tough mechanisms to ensure compliance with trade agreements and provides tools for us to gain compliance should our trading partners, particularly China, fail to do so.

Voting for this bill today will send a strong signal to Beijing that Congress will not sit idly by while China's mercantilist trade policy injures U.S. employers and costs us jobs. Voting for this bill today will send a strong signal to China and every country that this Congress will do what it takes to ensure that our trading partners fully abide by the rules and are not rewarded with unfettered access to our market when they are not prepared to make the tough choices to follow the international rules.

It is clear that voting against this bill will send a very dangerous signal that this Congress is willing to turn a blind eye to Chinese complacency and we continue with the status quo of unfairness to our producers.

Mr. Speaker, this bill is a strong, responsible, and comprehensive initiative that would close an existing loophole that bars the use of the countervailing duty law against nonmarket economies such as China. Right now a major tool in our arsenal is unavailable in dealing with a nonmarket economy or communist countries. It is ridiculous that when we find subsidies in France, Japan, Brazil, or Taiwan, we can use countervailing duties to strip the benefits of those subsidies, but we cannot do so if we find the same subsidies in China or Vietnam.

This bill would establish a strong and external system to audit China's compliance with trade obligations on intellectual property rights, market access, and transparency; and it would place Congress strongly on the record as opposing attempts to use the WTO to water down domestic trade law protections.

It would require the Treasury Department to define currency manipulation and clarify legal protections against China and other countries that manipulate their currency. It would increase funding for the United States trade representative to create more trade cops to improve enforcement of existing trade laws.

By replacing current bonds that are used by new shippers in antidumping cases with cash deposits, we are dealing with one of the biggest loopholes.

Finally, it would authorize funding for the International Trade Commission.

Mr. Speaker, passage of this legislation is essential for the economic future of the next generation, for the future of good-paying jobs in places like northwestern Pennsylvania where we make things for a living. We need this legislation passed by a Congress willing to come together, to put aside its political differences, and certainly not vote down this legislation merely for political positioning on another trade agreement.

Mr. Speaker, I urge passage of this key legislation. This is the top trade vote of this year, and everyone will be counted on it.

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

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Shaw), the distinguished chairman of the Subcommittee on Trade.

Madam Speaker, I yield 1 minute to the gentleman from Arizona (Mr. Hayworth), a distinguished member of the Committee on Ways and Means.

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

Madam Speaker, I yield myself 30 seconds.

First of all, the last speaker appears to have read the other party's bill, not ours. The Democrats' bill is actually weaker than our bill because it ignores a recommendation by the GAO to authorize the Commerce Department to use third-country information in countervailing duty cases against China consistent with China's WTO accession commitment. Without this provision, the countervailing duty provision would be difficult to use and could be subject to endless court challenges. They have simply misread this legislation and done it in an egregious way.

Madam Speaker, I yield 1 minute to the gentlewoman from Connecticut (Mrs. Johnson), a distinguished member of the Committee on Ways and Means.

Madam Speaker, I yield 1 minute to the gentleman from Indiana (Mr. Chocola), a distinguished member of the Committee on Ways and Means and an authentic advocate of fair trade.

Madam Speaker, I yield 1 minute to the gentleman from New York (Mr. Reynolds), a distinguished advocate of fair trade and a member of the Subcommittee on Trade.

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

Madam Speaker, I yield 1 minute to gentlewoman from Pennsylvania (Ms. Hart), a distinguished member of the Committee on Ways and Means and a member of the executive committee of the Congressional Steel Caucus.

Madam Speaker, I yield 1 minute to the distinguished gentleman from Michigan (Mr. Rogers), one of the key players in developing this legislation.

Madam Speaker, I yield 1 minute to the distinguished gentleman from South Carolina (Mr. Barrett), another strong advocate of fair trade for American workers and American farmers.

Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Murphy), a very distinguished advocate of fair trade.

Madam Speaker, is my understanding correct that the gentleman has only himself as the remaining speaker with 4 minutes?

Madam Speaker, I yield 1 minute to the gentleman from Indiana (Mr. Souder), a very distinguished member of the Steel Caucus, an advocate of the cause of fair trade.

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

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

Madam Speaker, I would like, in this closing minute, to cut through the fog of process arguments and weird Alice in Wonderland illusions to linkage to other trade agreements. This is important legislation, and it is important in itself, and it deals directly with key problems that we are having in our trade relations, particularly with China.

This legislation closes loopholes, not creates loopholes. It allows us, for the first time, to apply countervailing duties to nonmarket economies. That is a good thing. I realize our friends on the other side of the aisle never engaged on the SOS bill, the underlying core of this bill, nor cosponsored it. I realize that they have been behind the curve on this.

We have to move today and put this on the calendar today so that we can move quickly to send a message to China that we are going to close the loopholes, that we are going to audit their compliance with their trade obligations, that we are going to oppose the WTO watering down our domestic trade relations; and we are determined to put more money into trade so that we can enforce these agreements.

If you care about China, if you care about trade, vote for this bill and avoid the petty partisan politics.

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

Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the subject of H.R. 3283, the bill just considered.

Mr. Speaker, it has struck me as I have listened to the debate here that there are many myths propagated about CAFTA, the proposed free trade agreement between the Dominican Republic, Central American nations and the United States.

One is that we are somehow dropping all of our tariffs across the board. With very few exceptions, the products which CAFTA countries export to the United States have actually entered duty-free for 20 years. By contrast, products that the U.S. has exported to CAFTA countries face steep tariffs.

Currently the CAFTA countries apply an average tariff on U.S. industrial goods ranging from 4.1 percent in Nicaragua to 7.8 percent in the Dominican Republic.

What we are doing here is creating a two-way street for trade between the United States and CAFTA countries. This is a big trade issue for Pennsylvania because merchandise exports to CAFTA countries totaled $353 million from Pennsylvania in 2004, the ninth largest among the 50 States. And Pennsylvania's exports to the CAFTA region have grown 21 percent between 2000 and 2004.

I sympathize with the concerns that have been raised by CAFTA critics, but if we look at the details I think this is an agreement that we can afford to pass.

Mr. Chairman, I thank the gentleman for yielding to me.

Mr. Chairman, I, along with the gentleman from Connecticut (Mr. Simmons) and the gentleman from Washington (Mr. Baird), was considering proposing an amendment to restore funds for the Community Service Block Grant program. Earlier this year, 121 of my colleagues and I sent a letter to the chairman and to the ranking member respectfully requesting that adequate funding be provided for the CSBG program. Recognizing the challenges that the chairman faced, we were disappointed that the bill provided 50 percent less funding than the previous year.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, the chairman is absolutely right. We do not intend to diminish attention and concern for other programs within this measure, which we recognize represents a very tight balancing act. However, I would like to bring to the attention of my colleagues in the House the ramifications of cutting this vital program.

CSBG ensures that America's low-income families and communities have access to quality programs that help meet their local needs. If this cut were to take place, current and future services would be eliminated or disrupted for about 6.5 million low-income individuals and 3 million families, including almost 2 million children.

As the chairman knows, CSBG supplies the core funding for more than 1,100 grantees, primarily Community Action Agencies nationwide. A cut in funding would put many important services provided by these agencies at risk. This includes domestic violence services, food banks, health and dental clinics, entrepreneurship skills and financing, asset development, job development and skills training, and youth training. And the list goes on.

I would like to use an example of one such organization in my district, the Greater Erie Community Action Committee, or GECAC. This cut would considerably limit GECAC's ability to provide tailor-made services and initiatives that help vulnerable families in Erie, Pennsylvania. An important facet of CSBG is the flexibility that allows GECAC to deliver community-designed responses to our unique needs.

Mr. Chairman, the bottom line is that we have seen great progress for many of America's poorer families as a result of this program. CSBG has provided invaluable assistance to our neediest families and gives individuals the necessary tools to help them get back on their feet.

Mr. Chairman, if the gentleman will further yield, I thank the gentleman for the opportunity to discuss this important issue this afternoon.

Mr. Speaker, I would like to recognize John Werkmeister of Meadville, Pennsylvania, as an exceptional history teacher and role model. Mr. Werkmeister has been named one of eight national finalists for the Richard T. Farrell Teacher of Merit Award. This national award is presented every year to an educator who develops and uses innovative and creative teaching methods to enhance students' interest in history. As a teacher at Cambridge Springs High School in Cambridge Springs, Pennsylvania, he has shown exemplary commitment to making history education engaging and exciting, while involving his students in the National History Day Program.

National History Day is a yearlong program in which students explore historical topics related to an annual theme. Participants qualify for national competition after competing in several local and state competitions. In preparing his students for the program, Mr. Werkmeister's work ethic and research skills provided students with the tools necessary to be successful in competition.

Mr. Speaker, I find it heartening that there are educators in this country who devote so much time and effort to shaping the minds of our young people. It is with great pleasure that I recognize Mr. Werkmeister for his dedication to educating the potential leaders of tomorrow.

Mr. Speaker, today the House will undoubtedly vote down this resolution and signal strong support for remaining in the World Trade Organization. This is the right decision to make.

It is the right decision to make because the WTO, and its predecessor, the GATT, have served as a catalyst to reduce both tariff and non-tariff barriers for U.S. exports. Since the formation of the GATT, average tariffs in industrialized countries have gone down from 40 to less than 4 percent; since the creation of the WTO in 1994, U.S. exports have increased by $300 billion. Of course, the WTO has also served as a useful forum to breakdown barriers to U.S. agricultural exports where bilateral negotiations could not.

While I will vote against this resolution today, it is not without any reservation. Mr. Speaker, I believe the resolution on the floor today provides the ideal time to pause and reflect on the shortcomings of the current WTO system and on ways both the Congress and the Administration can make changes to the WTO structure so that it works better and rebuilds confidence in the system among our constituencies.

I find the lack of any serious effort to reform the current WTO culture and structure to fix the flaws with the unsatisfactory. There are a host of problems with the WTO, and the number of problems is only growing.

The WTO completely lacks any degree of transparency; hearings are closed to the public and public transcripts are not released. Where, in a very limited manner, WTO rules permit limited transparency by allowing the assistance and resources of private parties who

are supportive of the U.S. government position, the Administration has chosen not to utilize this allowance.

Transparency is not the only problem contributing to the WTO's failure to move rules-based trade forward globally, but it is the central factor allowing the WTO and its bureaucrats to escape the scrutiny which would quickly eradicate other abuses in Geneva. Through the lack of transparency, the WTO dispute settlement and Appellate bodies are emboldened to disregard the proper standard of review in disputes involving trade laws, for example. In this way, past WTO panels have issued rogue decisions against the U.S. with no basis or standing in the context of previously negotiated Agreements. This rampant judicial activism is rapidly undermining the support for the

Mr. Speaker, I rise today to recognize and honor the life of Maurice Horwitz. Born and raised in Pennsylvania's 3rd Congressional District, Maurice was a man of honor who brought both wisdom and leadership to the city of Butler. A 1930 graduate of the Wharton School of Business at the University of Pennsylvania, Maurice went on to become the president of his family's business, Keystone Pipe and Supply, where he displayed an unwavering commitment to innovation and industry. Under his direction, the

company flourished, becoming one of the largest international distributors of specialty tubular products.

In addition to his strong business ethics, Maurice was known for his generosity in his private life. He had earned a reputation of having a commitment of giving both time and resources to improve the quality of life for his family and his neighbors. He was the embodiment of a renaissance man: a constant learner, a collector, accomplished tennis player, scholar of art history, and a man of culture who sought to bring the joys of the fine arts to the Butler community. He was also known for his devotion to many charitable causes. Maurice served as a director for the Butler County Memorial Hospital, worked with the United Way, and the Butler YMCA. In addition, he served as president and chairman of the board of Irene State Community Mental Health Center, and was chairman of the Tri-State District of the United Jewish Appeal.

The life of Maurice Horwitz serves as a role model for us all to follow. He embodied the word service in its finest sense through his kindness, hard work and generosity and will greatly be missed by all.

Mr. Speaker, I hope my colleagues will join me in commemorating the life of Maurice Horwitz.

Mr. Speaker, I rise today to recognize the one-hundredth anniversary of Rogers Brothers Corporation. Having a history filled with many innovative achievements, it is my hope to see this company continue on a path of growth and prosperity.

Located in Albion, Pennsylvania, in Pennsylvania's 3rd Congressional District, Rogers Brothers Corporation was founded by Charles, Louis and Hugh Rogers. They started out fabricating steel for bridges. In 1914, they built their first trailer for commercial use. The production of trailers would go on to become their hallmark. The business of trailer production grew with the continued development of the roadway system and World War I. During World War II, Rogers developed special ``tank retriever'' trailers for the federal government, earning the Army-Navy ``E'' Award for excellence in production. They also built a special trailer which was used in the Manhattan Project. Following the war, commercial trailers were further developed with the creation of the innovative Power Lift Detachable Gooseneck. Under the leadership of Betty Rogers Kulyk, and her husband John Kulyk, the company further developed their trailers, creating new and innovative designs for their customers.

Throughout their century in business, Rogers has overcome many challenging obstacles, including fires, the Great Depression, labor disputes, and a devastating tornado. However, the company has endured the test of time. In addition, it has remained a family-owned and operated business, a trait that makes them unique in the trailer industry. Today, Rogers trailers can be seen in all 50 states and in 65 countries around the world. The company enjoys an outstanding reputation among their customers, a 100,000 square foot facility, and a quality, all-American made product. Now solidly in its third generation, under the leadership of Lawrence and Mark Kulyk, the company looks to expand their customer and product base, and stay the course for the long haul.

America was founded on the principles of hard work and innovation. The very greatness of this Nation is tied to the entrepreneurial spirit of our people. The creativity and innovation of small business, such as Rogers, help to create the very pillars of our economy. Their many achievements and unwavering commitment to excellence in quality production is an outstanding tribute to the very ideals that we hold dear.

Mr. Speaker, I hope my colleagues will join me in congratulating the Kulyk Family and all of the hard working men and women at Rogers Brothers Corporation on their 100th annIversary.

Mr. Speaker, at a time when reform is being encouraged from both inside and outside the Arab and Muslim worlds, Morocco has been quietly getting the job done. The April 12th edition of The Wall Street Journal Europe contains an insightful and balanced article on the progress that has been made--as well as the continuing challenges--in Morocco. Reform is a long and oftentimes difficult process, but both the government and the people of Morocco have made a decision about where their future lies. I commend this article to the attention of my colleagues.

[From the Wall Street Journal Europe, Apr. 12, 2005]

Maghrebian Nights

(By Brian M. Carney)

Casablanca, Morocco.--There really is a Rick's Cafe in

Casablanca. It was opened a year ago by an American

expatriate named Kathy Kriger, who decided to stay on after a

stint here as a trade attache for the U.S. Commerce

Department.

Ali Kettani, the man sitting across from me at Rick's, is

also a returnee. Although born and raised in Morocco, he'd

spent the best part of the last 15 years in Paris and New

York as a banker. ``Before the previous king died,'' Mr.

Kettani says, ``I would have sworn that I would never have

come back to Morocco.'' But here he is, moving back and forth

between the U.S. and Morocco to raise American money for a

planned $35 million Moroccan private-equity fund, which he

says is the first of its kind.

Mr. Kettani's renewed enthusiasm for his country is not

unusual in this, the country that claims to be America's

oldest ally. (Morocco signed a friendship treaty with the

U.S. in 1787 that has been in force ever since.) In February,

a bilateral free-trade agreement went into effect between the

U.S. and Morocco, lowering 95 percent of tariffs between the

two countries to zero and phasing out the rest over the next

several years. A so-called ``association agreement'' with the

EU is likewise gradually lowering trade barriers between

Europe and Morocco. Businessmen in the country hope to

capitalize on this privileged access to the two largest

economies in the world by trading with both.

``The future of Morocco,'' said Ali Belhaj, a businessman

and opposition politician, ``is in services, logistics,

tourism and agriculture.'' Agriculture is already a

substantial chunk of the Moroccan economy, but in the future

Mr. Belhaj sees Morocco selling more and more farm products

to the U.S. and Europe, thanks to its privileged trade status

and low costs. As for services, he offers an example. ``The

biggest dental-implant company in Paris is Moroccan. You go

to the dentist in Paris, he takes a mold of your teeth and

ships it to Casablanca, where the implants are made and

shipped back to Paris. We can turn around dental implants in

48 hours.'' For Mr. Belhaj, proximity and good relations with

the West are the foundations of Morocco's economic future.

Morocco is a potential bridge between the West and the Arab

world in more than just economic ways. At a time when U.S.

President George W. Bush's Greater Middle East project is

viewed by many in both Europe and the Arab world as a

``neoconservative'' pipe dream, Morocco stands out as a

country furiously trying to show that Arab ways and a

Western, modernizing orientation are not incompatible.

Morocco is a nigh-absolute monarchy, but one whose king has

been steadily if gradually ceding power to an elected

Parliament. The elections in 2002 are generally viewed, both

within Morocco and among Western NGOs such as Freedom House,

as the first free and fair ones in the country's 1,300-year

history. And this year, the Parliament is expected to pass

and the king is expected to ratify a law strengthening the

role of parties in the country's politics. For Ali Belhaj, a

businessman who is trying to found a center-right party

dubbed Alliance of Liberties, it is a vital step toward

democracy. ``We have 26 parties that get nearly all of

their funding from the state,'' Mr. Belhaj says. ``The

annual budget for the parties? $1 million. How can you

build a democracy like that?'' Even so, he allows that he

sees ``the beginnings of democracy in Morocco,'' and would

like to see the Parliament strengthened.

But in terms of civil rights and freedom of the press, the

country has made some real strides, enshrining habeas corpus

and the presumption of innocence in law in the last few

years. The Parliament is working on a bill to decriminalize

libel, meaning disgruntled politicians would no longer be

able to lock up journalists for writing things the ruling

class would rather not see in print.

In Rabat, the country's capital, I spoke to Ahmed Abbadi,

the director of Islamic affairs in the Ministry of Religion,

about the role of religion in a modernizing Morocco. Last

year, Morocco passed a reform of its so-called Family Law.

The new law grants women equal status in the family, with

equal rights to divorce their husbands, an equal say in

family governance and the right to marry without the consent

of a male relative.

There were Islamist elements who had opposed some of these

reforms on religious grounds; I asked Mr. Abbadi what the

government's response had been on a religious level. ``We are

concerned with finalities,'' he said. ``When you are

concerned with finalities, you do not get bogged down with

the literal words.'' He continued: ``There is a saying in

Islam: `Wherever is the interest of the whole, there is

sharia.' '' So bearing in mind the interest of the whole, he

said, ``We must determine how to implement the general

principles of sharia law in a way that is appropriate to our

time.'' In short, the Ministry of Religion determined that

the Family Law, giving women broadly equal rights in the

family context, was consonant with Morocco's official

interpretation of Islam. It's a dose of historical relativism

that's badly needed in much of the Arab world.

What about Abu Musab al-Zarqawi's claims ahead of the Iraqi

elections that democracy was unIslamic? ``He does not have

the skills, the knowledge or the class to talk about

democracy,'' was Mr. Abbadi's response, delivered with just a

touch of condescension. And, speaking of Saudi Arabia's

fundamentalist brand of Islam, he observed: ``When you have a

simple society,'' you wind up with a ``simple, superficial''

interpretation of Islam--``like the `Bedouin Islam' in Saudi

Arabia.''

All of which sounded pretty encouraging. So, did Mr. Abbadi

see Morocco's flavor of Islam as a model for the rest of the

Arab world--a modern, forward-looking alternative to

Wahhabist fundamentalism? He didn't want to go that far, but

in the end he allowed, ``We believe--humbly--that Morocco

could be a model'' for others, although they had no

inclination to actively export their interpretation.

Morocco is democratizing, liberalizing and modernizing on

several fronts. Is it a model for the Arab world? I repeated

the question to Bob Holley, a former American diplomat who is

now consulting for the Moroccan government in Washington, and

who facilitated a number of my meetings in Morocco. ``It's a

great sales pitch--Morocco as model for the greater Middle

East,'' Mr. Holley noted. But in the end, given its

historical, cultural and ethnic particularities, ``I think

Morocco's utility as a model is limited,'' he admitted.

Mr. Holley may be right, and in any case Morocco's progress

is far from perfect or uniform. After the May 16, 2003,

suicide bombings in Casablanca, the police rounded up some

2,000 people, a reaction that for some in Morocco harkened

back to the bad old days when the government was empowered to

imprison anyone it deemed a threat to the public order. (That

law, known in the country as Art. 35, has been repealed.)

But model Arab democracy or not, Morocco is nevertheless

showing what is possible within an Arab monarchy that looks

west and north, rather than only east or inward. Back at

Rick's Cafe, our table-mate, Dr. Bouthayna Iraqui-Houssaini,

who owns a medical-supply company here in Casablanca, offers

her own appraisal. ``Not everything is good, but it is all

changing. People believe life is getting better,'' she said.

And that's not a bad beginning.

Madam Chairman, at a time of record-high energy prices, the growth of the economy is at risk, and it is critical that Congress take the necessary steps to put in place a comprehensive energy policy.

The bill before us, frankly, is more limited in scope than I would prefer. It is not as ambitious as I would like in creating market incentives to overhaul the energy side of our economy; but, nevertheless, support of this bill is a critical first step for Congress to move forward to meet the critical goal of an effective national energy policy.

Its passage will set us on the right path by encouraging the creation of new technologies, by promoting renewable energy sources, by modernizing and expanding our energy infrastructure, including our power energy infrastructure, and encouraging conservation.

I believe we need to move forward on this bill. It is long overdue and has been a priority of Congress since this President came into office. The time has come for us to pass an energy bill.

Unfortunately, we have seen the vacancy of the debate today, the fact that we are not seeing an alternative being offered by the other side. We have heard about new ideas from them, but all we have been offered is warmed-over rhetoric, and there is no technology available to us that could ever make good use of that.

Please pass this legislation. It is long overdue. The time has come for us to put in place a national energy policy.

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

It is a real privilege to rise tonight to take on the role of discussing the statutorily required Humphrey-Hawkins side of this debate; that is, to consider how this budget fits into the overall economic policy of the United States.

We have heard so far a very engaging debate, and may I say, the chairman of the Committee on the Budget has done an extraordinary job of defending the details of this budget. He has been powerful and persuasive and intelligent and, I think, has made a compelling case. The argument that we are going to make in the next hour has to do more with how this fits into the overall economic priorities of the United States. This in my view is perhaps one of the most important reasons for passing this budget, because as we look at where America is today, as we look at the economic challenges we are facing, it is clear that we need to have a strong and responsible fiscal policy that encourages economic growth, that controls spending, and by controlling spending brings down our deficit over time, reassures capital markets and sends the message that the American economy continues to be the safest place in the world to invest. If we continue on the path directed by this budget resolution, we have an opportunity, I think, to lay the groundwork for an unprecedented expansion and to create opportunity and economic growth in the American economy that is so badly needed in many of our communities, including many parts of my district.

There is no question, Mr. Chairman, that the challenges we are facing today are substantial, the deficit is a serious problem and the proposed remedy contained in this budget resolution involves some very strong medicine and, for many individual Members of the House, some very, very difficult policy decisions. We need to pass this resolution because the broad parameters of spending that are the real budget resolution, the blueprint that is the substance of this budget resolution is precisely the vehicle we need to move in the right direction to make sure that we control spending and create the opportunity to continue the economic expansion which is only now just beginning.

Over the past few years, America has gone through a challenging time economically. Nowhere is that more evident than in my district, but at the same time there are very encouraging signs. We know that we have been running a deficit. We know we have been running a deficit because, first of all, understandably, we have been in the throes of a recession and we have never run a surplus during a recession. Second of all, we have never run a surplus in wartime. And even as we have been undergoing a very difficult episode, a combination of a slowdown which

began during the last administration coupled with the substantial damage to our economy that occurred in the wake of 9/11, at the same time we have had to take on a war on terrorism that was not of our choosing. The combination of these two factors, the loss of revenue because of the slowdown of the economy and at the same time the challenge of meeting the war on terrorism have been a substantial drain on our resources. Yet our underlying economy continues to be sound and clearly we have a path that we can pursue that brings us back toward a balanced budget and providing the kind of policy in place that will continue to meet the needs of America.

This budget resolution is precisely what we need. We recognize that an uncontrolled deficit can put pressure on interest rates, increasing the cost of borrowing and putting the brakes on economic growth and investment. Without economic growth, we are not going to be able to generate the revenue to get back to a balanced budget. We also recognize that a lax fiscal policy could further weaken the U.S. dollar in global markets and undermine its standing as the reserve currency of the world economic system. This has been one of the core advantages that America has retained relative to our global competition. That is why the decision we make with this budget is going to be so very, very important.

This budget is a blueprint for injecting spending restraint while encouraging economic growth and stability. Its adoption will signal to the financial markets that a fiscally conservative Congress once more is prepared to sally forth to make difficult decisions necessary to control the Federal deficit and maintain our economy on a growth path. This budget vehicle provides fiscal discipline that will strengthen investor confidence in the renascent economy and act as a powerful tonic to continue on the path of economic growth. It provides for controlling spending without raising taxes, which is precisely the formula that has worked for us and can continue to work for us.

Mr. Chairman, we recognize that we need to maintain a pro-growth tax policy. That is essential to move America toward a balanced budget. This budget resolution allows us to continue and make permanent the successful tax policies that have allowed us to grow the economy. What it does in a nutshell is it cuts the deficit in half over a 5-year period. Perhaps more importantly, Mr. Chairman, it shrinks over time the national debt relative to the economy. That is the burden on the national economy that the capital markets understand. If we have a national debt that is growing relative to the economy, it will roil capital markets over time if it grows excessively. But what matters to the economy is not the absolute size of the debt, it is the size of the debt relative to the economy.

If we can continue to grow the economy and grow the economy faster than the national debt, then that will be a source of confidence and a source of growth in the economy. Mr. Chairman, that is precisely what this budget resolution does in a sound, responsible way. It maintains a strong commitment to economic growth and pro-growth tax policy by controlling discretionary and mandatory spending.

Mr. Chairman, I will have further remarks in support of this resolution.

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

Mr. Chairman, I yield 7 minutes to the distinguished gentleman from Texas (Mr. Paul), a fellow member of the Joint Economic Committee.

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

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

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

I am particularly grateful for the opportunity to be here to make this presentation as required under law by Humphrey-Hawkins because I think it is very important perhaps that the record be set straight.

Any Member of the House who is serious about controlling the deficit, about maintaining the forward movement in the economy, growing jobs, and the social justice that could only come through economic growth should be prepared to strongly support this budget resolution.

Mr. Chairman, a couple of points I think need to be made in response to the interesting presentations that were made on the other side.

First of all, on the issue of jobs. We have heard the criticism that our friends on the other side of the aisle try to blame President Bush for an economic slowdown that he inherited from the Clinton administration that was exacerbated by 9/11. The truth is economic policies that have been adopted by this Congress, working with the administration, have been successful in helping the U.S. economy rebound from the recession into a sustained expansion, with strong growth in the gross domestic product and payroll jobs.

Despite all of the problems that this President inherited, the tax relief policies of the past 4 years that our friends on the other side of the aisle are striving to sabotage have helped to restore economic growth and job creation.

During 2004, real GDP grew 4.4 percent, the strongest annual performance in 5 years, one of the strongest growth performances of the past 20 years, belying the glooming forecast we have heard on the other side.

Private forecasters' projections for real GDP growth for this year are being revised upward. Growth for 2005 is expected to be at a 3.7 percent robust rate. More Americans, Mr. Chairman, are working today than at anytime in our Nation's history, and employment is at a record level of more than 140 million. The unemployment rate in February was 5.4 percent, lower than the averages for each of the last three decades. Payroll employment rose by 2.2 million jobs during 2004. It is up by more than 3 million jobs since May of 2003. Last month, we saw employment gains of 262,000 jobs, more than a quarter of a million new jobs in the month of February alone. This suggests that there is clearly forward motion in the economy.

Mr. Chairman, let us compare that to some of our trading partners. Those who last year invoked the Great Depression in describing recent economic conditions have been, after all, often favoring policies that would increase government intervention in the economy. Yet some of those countries where those sorts of policies are applied are not doing as well as we are.

Economic growth in Europe is generally slower than that of the United States. The unemployment rate in Europe is much higher than in the U.S. In January of 2005, Europe had an unemployment rate of 8.8 percent, substantially higher than our U.S. level of 5.4 percent.

The fact is, by following on a path of high growth and low taxes, we are moving the economy in the right direction, and ultimately, if we are prepared to put in place fiscal policies that restrain the deficit, that will allow us to grow the economy in the right direction.

I have heard a couple of extraordinary claims on the floor of the House that we are facing a record debt. I suppose that is true if we look at this in a purely static, green eyeshade perspective, but what really matters with the national debt, as I said before, is its size relative to the economy. The fact remains the national debt today is significantly lower, relative to the economy, than it was in the early 1990s when their party controlled Congress and controlled the reins of spending.

We have heard about record deficits, but here again we propose in our budget resolution to cut the deficits in half relative to the size of the economy. That will send the right message to global markets.

We have heard a little bit tonight about the trade deficit, and I must say that is something where I have some sympathy with the critics. Our trade deficit is much too high, but those who are making these claims tonight perhaps should be questioning whether they supported the Clinton-era trade policies that this administration inherited and put us firmly on the path to large trade deficits.

We have also heard from the other side that they are concerned that there is not enough room in this budget to deal with the problem of the AMT. As cochairman of the Zero AMT Caucus, I have to be sympathetic with their raising the issue, but the fact remains eliminating the AMT is only going to

be possible as part of fundamental tax reform. This budget put lays in place, creates the groundwork for us to go forward later this year and take a look at fundamental tax reform.

We also, notwithstanding this budget, have every opportunity to move forward later this year and consider the issue of Social Security solvency. I believe that the President is right to raise this issue. Anyone who has studied this issue carefully has to concede that for the long-term health of the Social Security system we have a choice of either going forward with a laissez-faire approach that has long been advocated on the other side and ultimately have to see truly draconian cuts as a result, or if we act now we can put in place reforms that will allow us to preserve existing benefits, also provide a solid retirement for the next generation and do so by improving the rate of return within the Social Security system. Nothing in this budget resolution is inconsistent with that initiative.

I am very, very pleased to address the concerns raised by the gentleman from New York about the supposed monolithic government in the Congress that has worked with a Republican administration to do some things that the gentleman finds distasteful. The fact is our economic policies and our economic challenges today are at least partially the result of the gridlock that existed before the last election in which the Senate was at least not able to move forward on key issues like a stimulus bill, like an energy bill, like tort reform, that directly speak to our economic health because of the gridlock implicit in the rules that gave the minority a veto over many of these provisions. Monolithic government is not the issue. The issue here is whether we can move forward and get to a balanced budget ultimately. Our resolution clearly is the one strongest able to do that.

We continue to grow the economy without raising taxes, which clearly is the agenda on the other side, raising taxes that would slam the brakes on economic growth.

At the same time, it is obvious from the laundry list we have heard tonight if the other side were in the majority we would be contemplating a saturnalia of new spending. I can think of a lot of things that I would love to spend money on in the Federal budget, but the fact remains we need to set tough priorities if we are going to get back to a balanced budget. Our spending resolution does just that.

What we provide is low taxes, controlling Federal spending and ultimately the prospect of falling deficits and low debt and ultimately the right economic direction for this country, a true blueprint for economic growth, expansion and opportunity.

With that, I urge all of my colleagues to support the Republican budget resolution. Regardless of any concern about any particular program, we need to move forward with the broad outline of spending that this resolution fairly lays out and put it in place so that we are able to get to a balanced budget over time as we reassure capital markets that we are truly committed to controlling spending without raising taxes.

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

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5365) to treat certain arrangements maintained by the YMCA Retirement Fund as church plans for the purposes of certain provisions of the Internal Revenue Code of 1986, and for other purposes.

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

Mr. Speaker, I rise today to support H.R. 5365, legislation that I had the privilege to introduce along with the gentleman from North Dakota (Mr. Pomeroy). The gentleman from North Dakota and I have been working together for a number of years to make this important clarification, and I appreciate his dedication and leadership on this issue. I also want to thank the gentleman from California (Chairman Thomas) and the Committee on Ways and Means for their invaluable assistance in bringing this bill to the floor today.

Mr. Speaker, this bill is designed to ensure that thousands of pension plan participants and retirees from the YMCA can continue to count on their benefits. It addresses a concern about the technical status of the YMCA pension plan as a church plan, a type of pension plan offered by churches or associations of churches which brings with it a special set of rules and regulations under the Tax Code. While the Y pension plan was founded as and historically has been treated as a church plan, the IRS has on occasion puckishly called its status into question. This bill ensures that its status remains a church plan and that the plan may continue to operate as has been for over 80 years with clear congressional intent.

The YMCA pension plan is a significant and important component of the compensation package offered all YMCA employees, most of whom are paid modestly. Every full-time employee of local YMCAs is required to participate to help ensure better retirement security for all of these employees. The YMCA pension plan is important to the YMCA employees and retirees in my district in Pennsylvania, as it is to those plan participants in most likely each and every congressional district across the country.

This legislation has a vital impact on more than 3,000 families in Pennsylvania and over 80,000 participants nationwide because it offers them financial and retirement security for their long service on behalf of our Nation's YMCAs, one of our most important organizations operating within communities throughout this country. I am pleased that we are moving forward with this bill today to preserve the status quo, and I encourage all of my colleagues to actively support this bill.

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

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

I will submit the exchange of letters between the gentleman from California (Chairman Thomas) and the gentleman from Ohio (Chairman Boehner) relating to the jurisdiction of this bill for the Record.

Committee on Education and the Workforce, House of

Representatives,

Washington, DC, November 19, 2004.

Hon. William M. Thomas,

Chairman, Committee on Ways and Means,

Washington, DC.

Dear Chairman Thomas: I am writing to confirm our mutual

understanding with respect to consideration of H.R. 5365, to

treat certain arrangements maintained by the

YMCA Retirement Fund as church plans for the purposes of

certain provisions of the Internal Revenue Code of 1986,

which was referred to the Committee on Ways and Means and in

addition the Committee on Education and the Workforce. The

bill would impact the Employee Retirement Income Security Act

(ERISA) as it applies to certain pension plans within the

jurisdiction of the Committee on Education and the Workforce.

I do not intend to delay consideration of H.R. 5365, nor

will I object to the scheduling of this bill for

consideration in the House of Representatives. However, I do

so only with the understanding that this procedural route

should not be construed to prejudice the Committee on

Education and the Workforce's jurisdictional interest and

prerogatives on these provisions or any other similar

legislation and will not be considered as precedent for

consideration of matters of jurisdictional interest to my

Committee in the future. Furthermore, should these or similar

provisions be considered in a conference with the Senate, I

would expect Members of the Committee on Education and the

Workforce be appointed to the conference committee on those

provisions.

Finally, I would ask that you include a copy of our

exchange of letters in the Congressional Record on this bill.

If you have questions regarding this matter, please do not

hesitate to call me. I thank you for your consideration.

Sincerely,

John A. Boehner,

Chairman.

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

I also want to salute the gentleman from North Dakota, who is a valuable ally particularly in dealing with an issue like this that is in a sense relatively straightforward, but deals with the technicalities of the tax law. He has been a great resource to us and to the committee, and it is a privilege for me to be co-sponsoring this legislation with him.

Mr. Speaker, I think that if we look at the history of the YMCA in America, we see the premier faith-based organization that has been providing services to people throughout our communities and providing services that have had an enormous cumulative social impact on America.

One of the essential components to the YMCA and how it operates is its ability to offer this pension program to its employees. The YMCA does not operate on a broad profit margin. So to be able to offer this program with its tax status is critical to the Y's ability to attract the kind of people who are willing to dedicate themselves to the community. And this I believe is a very important piece of legislation to maintain the status quo, to allow the Y to continue to offer not only an excellent pension to its participants and to all of its hard- working employees but also to continue to be able to offer the quality of services in communities throughout America.

Mr. Speaker, it is a privilege for me to urge my colleagues to gather together on a bipartisan basis to approve this bill.

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