Floor Statements

Madam Speaker, the current subprime housing crisis, coupled with volatile energy prices, rising costs in health care and looming tax increases, among others, have put our country on the dark path of economic slowdown. And although not yet a technical recession, it certainly feels like a recession in the communities that I represent in western Pennsylvania.

Clearly, America's hardworking families and employers are feeling the crunch from the slowing economy.

While there's a growing consensus in Washington that Congress needs to take action on a stimulus package to stave off further economic challenges, an agreement on how to proceed remains very elusive.

In addition to recently participating in a Joint Economic Committee hearing on the state of the economy, I've met with half a dozen respected economists, and I strongly believe that unless Congress acts swiftly on a stimulus package that will inject money into the American economy and incentivize job creation, middle class America will be forced to bear the brunt of our country's economic instability.

To be clear, now is not the time for politics as usual. We need to unite to enact sound stimulus legislation that, among other things, will benefit both wage earners and job creators, will encourage investment in good paying jobs, and will put more money back into the pockets of working families.

Now, how can Congress achieve these goals on a bipartisan basis? In my view, Madam Speaker, the single best way to help struggling employers in this climate, while providing a jumpstart to the economy, is to allow companies to quickly recapture the money they invest in capital.

Congress should step up to the plate today to create incentives for American employers to invest in new equipment, to revive bonus depreciation to boost employer's capital, and to work to enact common- sense policies that will curb the reach of the corporate alternative minimum tax at exactly the time when its reach is most devastating, during economic downturns.

At the same time, Congress must explore ways in which we can mitigate the impact of a sluggish economy on low and moderate income families that are now facing new and severe economic uncertainty.

By extending unemployment benefits, rolling the income tax on unemployment benefits back, and increasing the child tax credit and providing a significant tax rebate for middle-class families, Congress can ensure that every American has access to the financial resources they need to weather this pending economic storm.

While I've outlined a stimulus plan that will create an environment for job growth, reform how we tax American employers and improve UC benefits for the long-term unemployed, Congress must be vigilant in crafting a pro-growth plan that will not disturb the government's fiscal balance.

I believe frankly we need to avoid absurd PAYGO rhetoric which, coupled with a liberal budget requiring tax increases, now seems to be hobbling action on the other side of the aisle.

Over the past year, some of my friends on the other side of the aisle have insisted on a budget that would impose substantial tax increases on a struggling American economy.

These Herbert Hoover Democrats have used the labels of tax reform and revenue neutrality as a carnival mask to conceal a policy of higher taxes and higher spending, essentially placing a higher percentage of the American economy under government control, and this at a time when the economy is vulnerable, facing slower economic growth.

Instead of setting new priorities, the new majority has chosen to throw priority setting to the wind and have undermined the benefits of the very tax policies that have grown the economy and helped America's middle class.

At the time of economic hardship, when Americans are struggling to make ends meet, it would be inconceivable to place additional, unnecessary tax burdens on the backs of middle class America.

Madam Speaker, time is of the essence. Putting the economy back on a growth path must be a top priority for Washington. Congress must move on a bipartisan basis to enact a stimulus package that is swift, significant and effective.

We need to set aside sterile politics of class warfare and embrace strong pro-growth tax policies that will help benefit everyone by reinvigorating the American economy.

Madam Speaker, today I rise to recognize the accomplishments of the Fredonia American Legion Auxiliary. The members of this organization have loyally served the Fredonia area and its veteran community for many years and their good deeds deserve to be acknowledged.

All of the Legion's activities work toward its mission to improve the quality of life for Fredonia's veterans and their families.

To raise money for veteran family events, such as their annual Children's Christmas Party, the Legion has held various events throughout the year including a Chinese auction, craft show, bingo night and several basket raffles.

As part of their community service efforts, members collected donations to give to local needy families during the holiday season.

The Legion hosted an ``Americanism'' Essay Contest at local grade schools to promote patriotism among the country's youth. The winners included third-grader Olivea Wright from Oakview Elementary and sixth- grader Kelsey Greathouse from Commodore Perry Elementary.

On Veterans Day and Memorial Day, members held honorary services with special guest speakers to pay tribute to U.S. veterans in the Fredonia area.

From September 2006 to June 2007, the Fredonia American Legion donated an impressive $18,700 in coupons to 37 commissaries around the world.

The officers of the Legion include: Mary Ellen Flynn, President; Sandy Lurtz, 1st Vice President; Ruth Foust, 2nd Vice President; Dorthy Young, Secretary/Treasurer; Shirley Kirsch, Chaplain; Darlene Hoffman, Historian and Sergeant-at-Arms; Mary Jane Lockcock, Sergeant-at-Arms.

I hope my colleagues will join me at this time in recognizing the service of the Fredonia American Legion and in congratulating its efforts.

Thank goodness they are not going to have to wait a generation for a Democratic President.

This bill, Madam Speaker, is a good resolution to a political impasse and a good solution to the hindering cuts that impede our Nation's physicians and would impact on the health care of our young people and our seniors.

It makes a substantial adjustment for physicians who participate in the Medicare program, albeit only temporary. Although I would have liked to have seen a more permanent and comprehensive solution to a range of Medicare issues, we just couldn't wait and allow 10 percent cuts in payments to physicians to occur. I hope to work with my colleagues on both sides of the aisle on a more permanent solution in the upcoming year to this particularly thorny issue.

The legislation before us also endorses important issues that I have fought hard to be involved with and to make progress on, including extending the exceptions process for therapy caps and a revision of the policy structure for long-term care hospitals. Those are legacy issues that we are going to have to take up sooner rather than later.

I am glad we have a final resolution temporarily on SCHIP. Thank you. I urge a vote for the bill.

Madam Speaker, I'll keep my remarks brief and submit the bulk of my remarks for the Record where they contain economic analysis and no theology, so they may be out of place in this floor debate.

It's been fascinating to listen to the lecture that we've heard about failure. The failure that is on display here is the failure of this majority to fix the AMT as they promised or even to patch it in a timely fashion.

We are voting today on a bill that we should have voted on 4 to 6 months ago and easily could have, and the blame here, if there is to be any blame, is on the other side for having passed a budget that was built on quicksand, that was balanced based on revenues from applying the AMT to 23 million mainly middle-class families. And every one of them that voted for it voted to do it.

They took PAYGO and they made a burlesque of it. What they have been doing up until this point is trying frantically to hold the AMT crisis that they created as a hostage in order to drive higher taxes. They've been using the AMT issue as a locomotive for a tax increase that is unnecessary and is inappropriate, particularly if, as the majority leader feels, the economy might be slowing down.

They have been single-minded in their approach to try to drive higher taxes. Today, we have an opportunity to protect the taxpayers without a tax increase. Let's take it.

Madam Speaker, since coming to Congress, I have been a vocal champion for repealing the Alternative Minimum Tax. The AMT is a horribly inefficient parallel tax system that was never intended to impact those it is, or soon will ensnare.

This Congress, like so many before it, I have introduced legislation to repeal the AMT.

In recent years, Congress has turned to enacting temporary relief--or a patch--to keep the AMT from reaching more and more taxpayers in the middle class. This is necessary because the AMT was never indexed for inflation.

This fact, in conjunction with the Democrats' distortion of pay-as- you-go budgeting has placed us in the situation we face today.

While I think it is fair to say that most people believe the AMT was a mistake and it should be addressed, the debate is over how it should be addressed and if, in fact, other taxpayers should pay more taxes in order to keep the AMT at bay.

In other words, does it make sense for the rule of the House to require Congress to find revenue through real tax increases in order to stop a tax increase from happening?

The Democratic majority says yes. I say that this premise is utterly absurd.

Only in Washington could some green-eye-shade type conjure up the idea that it is necessary to raise taxes on one group of Americans in order to prevent another group of Americans from paying more taxes.

Instead of focusing our energy on who should pay more taxes, as this majority has done, Congress should be focused on what kind of pro- growth, pro-innovation and pro-job tax policies to enact.

Sadly, Madam Speaker, this majority has failed in this regard, even at a time the economy is beginning to show signs of softening.

Even on the more narrow issue of ensuring 21 million new taxpayers aren't subject to the AMT next year, the majority has barely received a passing grade.

This is the latest in the year Congress has dealt with an AMT patch-- ever. Well, in this instance, tardiness as a severe consequence.

The Internal Revenue Service has said that the delay in enacting an AMT patch this year will result in massive confusion for taxpayers and lengthy delays for those expecting refunds this year.

And perhaps most disappointing of all is that when you dig deeper, the misguided banner of paygo which the majority holds up today is nothing more than a feeble attempt to mask their true intention with the AMT all along: to hold 23 million taxpayers hostage as they implement a protracted effort to permanently raise taxes in exchange for temporary tax relief.

They may say today that they are issuing an ``IOU'' to taxpayers that they intend to ``pay for'' this bill to prevent a tax increase. But, no American is fooled by these reindeer games. They know that all that means is that the House Democrats have just made a reservation to come to your house and raise your taxes.

I'm particularly pleased Republicans were able to call the majority out on this folly today in the name of the American taxpayer and economy. But, we must also insist that the majority's reservation is never honored.

I would like to thank the distinguished Member from Washington.

Mr. Speaker, unfortunately, I have to rise in strong opposition to this rule. I wouldn't normally speak out against a rule, but I think these are unique circumstances and they're highlighted by the comments of one of my colleagues on the other side of the aisle who accused Republicans of holding hostages. That's really an extraordinary statement under the circumstances.

After all, it was House Democrats who conspired to preserve the AMT in 1999. It's House Democrats who had talked broadly about repealing the AMT this year. It is House Democrats that passed a budget that used the revenue from applying the AMT to 23 million mostly middle-class taxpayers. And it is, after all, House Democrats who have come forward today with a placebo that doesn't do what they originally said that they were going to do.

I have offered before the Rules Committee and in the Ways and Means Committee an amendment that would have directly addressed the Democrats' promise. Yesterday, an amendment was offered in the Committee on Rules and dismissed out of hand that, by defeating today's rule, may yet be preserved to fulfill the promise of the Democrats to get rid of the AMT. My amendment would have sunset the AMT by a date certain. It would have fully repealed the individual alternative minimum tax. And any vote against this rule, Mr. Speaker, is a vote against an opportunity to ultimately and permanently eliminate the AMT.

The amendment is very simple. The AMT would be repealed and never seen again after 2018. That's far enough in the future that we should be able to plan around it.

As Congress continues to wrestle with the ridiculous notion of how to pay for eliminating a tax that we never intended, this amendment allows us to set a firm horizon on which the AMT will be eliminated and require that our budgets no longer be built on the quicksand of AMT revenue.

And the amendment is fully PAYGO compliant, so there's no reason not to have allowed this amendment to be debated if the majority is, in fact, serious about ensuring that the AMT is eliminated.

Unfortunately, the bottom line is that the majority, in fact, believes that they need the revenue, and they want to continue to do things like they do in today's bill, which is pass permanent tax increases in order to fund temporary tax relief. If the majority, in fact, believes that it will find a way to repeal the AMT before 2018, then this amendment should be allowable. Nothing in this amendment would prevent the Congress from taking up a plan to get rid of the AMT sooner than 2018.

What this amendment does do, though, is let the taxpayer know that the AMT will be history.

As I said, we missed the chance to do that in 1999 because of the position that the other side took. And this amendment would have given Members of this body an up-or-down vote on whether or not to support the repeal of the AMT.

Perhaps this is a true indication of the majority's intent to take this tax monster, harness it, and put it to work to allow with PAYGO rules that every year we churn the Tax Code to raise taxes ever higher. I think the AMT has got to go and that's why I'm offering this amendment if allowed.

I urge the defeat of the rule.

I thank the gentleman.

As chairman of the Zero AMT Caucus, I rise to strongly oppose this wrongheaded measure, which instead of offering a prescription for tax relief or tax reform, which they promised at the beginning of the year, it is a placebo that imposes a permanent tax increase in exchange for the false promise of temporary tax relief.

This legislation, as the other side has said, is all about hostages and brinkmanship. Their budget was built on the quicksand of AMT revenues that assumed the revenue from taxing 23 million people under the AMT. Now we have to raise taxes to protect them. They are using this crisis as a locomotive to drive higher taxes.

But those aren't the only hostages, Mr. Speaker. Other taxpayers are being held hostage to delay. Already, this is the longest Congress has gone into the year without dealing with the AMT's reach ever. The IRS and Treasury have indicated that this delay will, at best, cause massive chaos and confusion in the upcoming filing season, but at worst, it is the likely scenario, since this bill was put forward dead on arrival with the Senate and the House, 50 million taxpayers could find their refunds delayed by many weeks.

But that isn't the only hostage. The extenders are being held hostage. Everyone who utilizes the extender deductions on State and local taxes, the tuition deduction, expenses for school teachers, combat pay under the EITC, mortgage bonds for veterans, companies that use the R&D tax credit or certain charitable contributions, these extenders are going to be delayed if it is tied to this dead-on-arrival bill.

Mr. Speaker, this bill does nothing to deal with what they said was their top priority, which is reforming or getting rid of the AMT. It's bad tax policy. It's a large tax increase no matter how they dress it up. And it's a tax increase coming at a time of economic slowdown. Just say ``no.''

Mr. Speaker, I rise tonight to talk about an issue that has been close to my heart since I came to Congress. Clearly, the current tax code is far too complicated. It is riddled with obvious inequities. Its structure punishes savings and investment, which reduces economic and job growth and burdens domestic industries struggling to remain competitive in today's global market.

Although the U.S. Treasury Department has called for international tax reform and has advocated policies to advance U.S. competitiveness, increase national savings, and reduce our trade barriers, this Congress has failed to offer a substantive response.

Recently, we in the Ways and Means Committee have received a proposal that presents itself as tax reform but is, in fact, as you are going to hear later tonight, a Rube Goldberg device to raise taxes. In this context, it is important to consider other alternatives, and tonight I would like to discuss my own tax proposal which encompasses all of these concerns and would attract a broad cross-section of working Americans.

My proposal, the Simplified USA Tax, puts the right incentives in place to grow our economy and to create new jobs. The Simplified USA Tax has three key components:

One, it simplifies the tax code by a factor of about 75 percent; two, it takes the taxes off of savings to promote thrift and address a national dearth of savings; and, three, it makes America significantly more competitive, thereby creating and preserving better jobs within our borders.

The simplified U.S.A. tax starts out with just three simple low rates, 15 percent at the bottom, 25 percent in the middle, and 30 percent at the top.

Through a payroll tax credit to all wage earners, SUSAT effectively lowers the income tax rates to the 7 and 17 percent range for nearly all Americans.

Under my proposal, and this is one significant departure from some tax reform blueprints, everyone would get a deduction for mortgage interest on their home. In addition, the SUSAT proposal allows charitable donations and tuition deductions.

To further ensure that the new Tax Code would be progressive, my proposal also permits all families to take a generous family credit, and qualifying families to take an additional refundable work credit. These two credits simplify and improve the current child credit and earned income tax credit.

I believe the Tax Code must also give Americans a fair opportunity to save part of their earnings. By taking the taxes off of savings, we will increase the savings rate and ultimately reduce the cost of capital.

My proposal encourages savings by allowing everyone to contribute to an unlimited Roth IRA. It also repeals the individual and corporate alternative minimum tax, Federal death and gift taxes.

Mr. Speaker, as you can see, the individual tax system, under my proposal, is designed to be simple. The tax return will be short, only a page or two for most people; but, more importantly, the tax return will be comprehensible.

My proposal also contains a new and better way of taxing corporations and other businesses that will allow them to compete and win in global markets in a way that exports American-made products, not American jobs.

All businesses are taxed alike under our proposal at an 8 percent rate on the first $150,000 of profit, and a 12 percent on all amounts above that small business level. All businesses will be allowed a credit for the 7.65 percent payroll tax they pay under the current law.

One of the most pro-growth elements in SUSAT is that all costs for plant equipment and inventory in the United States will be expensed in the year of purchase. This is important because investment in state-of- the-art equipment is critical to manufacturing in a global economy.

The other key component of SUSAT which will make American business more competitive is that it will be border-adjustable. In other words, SUSAT would end the perverse practice unique among our trading partners of taxing our own exports. All export sales income is exempt and all profits earned abroad can be brought back home for reinvestment in America without penalty.

Because of a 12 percent import adjustment, all companies that produce abroad and sell back in the U.S. markets will be required to bear the same tax burden as companies that both produce and sell in the U.S. This policy would finally take away the bias in favor of imports built into our current tax structure, which, in my view, contributes dramatically to our trade deficit, which, in my view, continues to rise at record-breaking levels.

Mr. Speaker, I thank the gentleman. I have been listening this evening to the presentations of the last two speakers and I am struck by how, with powerful presentations, I think with a logic which is difficult to challenge, and with oration rhetoric they have laid out the challenge facing American workers with a tax bill, with a tax initiative coming from the majority that is going to raise taxes on working families, driven by a budget by the majority that took revenues from applying the AMT to 23 million taxpayers and now is requiring the majority to look willy-nilly for ways of bridging that tax gap, we now come to the mother of all tax hikes, which has been rolled out in our committee, presented as a tax reform, but ultimately I think is an albatross that would be a dead drag on the American economy.

There are so many problems with the majority's mother of all tax hikes that, frankly, Mr. Speaker, I sincerely doubt that one hour would allow us to do justice to all of them.

So tonight I'd like to focus my remarks on how working families in districts like mine are, as a result of the bill, potentially going to be facing one whopping marriage penalty, see a reduction on the value of deductions for things like mortgage interest and State and local taxes. In addition, if they have got kids, they better be prepared to hang on to their wallet because it's going to take the revenue from dropping the child tax credit to $500 from $1,000, and raising the 10 percent bracket to 15 percent. I'd also like to talk about how this bill will make America less competitive and cost America jobs, particularly in the manufacturing sector.

Now, Mr. Speaker, beginning in 2001, the Republican majority at the time took steps to neutralize the marriage penalty. We were successful in reducing this unfair penalty on marriage and families in the Tax Code. Yet, in the mother of all tax hikes bill, the Democrat majority is proposing to resuscitate the marriage penalty and bring it roaring back to life.

The MATH bill sets income thresholds for a newly designed surtax. But instead of setting the income threshold for married couples at twice the level of income as the threshold for single filers, the majority creates a gargantuan marriage penalty. In fact, the threshold for married couples is only 33 percent higher than the one established for single filers. This creates a 66 percent marriage penalty for taxpayers affected by this new surtax.

This is one way in which the MATH bill moves our Tax Code clearly in the wrong direction. The very same surtax is at the heart of the new marriage tax penalty and is also going to diminish the value of deductions that can be claimed in the filing of taxes. These deductions include the mortgage interest deduction and the deductions for charitable contributions. Under the bill, the deduction for State and local taxes would also be diminished in value.

How exactly are the Democrats going to erode the value of these deductions, and that is another shell game, Mr. Speaker. Because they would implement this surtax based on adjusted gross income instead of taxable income, the surtax is applied before you're able to make any deductions.

While that may sound like something that only green-eye-shade types can decipher, it's going to be hard not to understand the next time you end up tallying your taxes. The end result is simple: less money in the pocket of working families all across America.

So to recap so far, the Democrats have put forward a bill that socks it to married couples in the form of a brand new mammoth marriage penalty and that decreases the value of any deductions that are available to the claimant, including the standard deduction. What else could they possibly dream up to tax the American family? How about the tax on families with kids? That, Mr. Speaker, is the next station this train wreck of a tax bill heads to.

A magnifico in the Democrat Party in the House earlier this year called the alternative minimum tax the parent penalty. I guess that was a poll-tested term. In fact, it was during his national radio address on the AMT when the following was said, and I quote: ``While Republicans were passing multiple tax cuts for the very wealthy over the last 6 years, the Bush administration and the Republican Congress seemed to have forgotten about the middle-class families.'' The new Democratic Congress has made cutting the AMT, the parent penalty, our top priority for tax reform.

Curiously, the Democratic budget and the MATH bill don't fix this so- called parent penalty. Instead, it forces the taxman to drop the hammer on working families by increasing taxes on those the Democrats claim to want to help. To understand how the Democrats are now increasing taxes on middle-class parents, we have to go back to 1997 when the Democrats claimed Republicans were focused on cutting taxes for the wealthy. The Republican majority created the child tax credit in 1997, and then increased the credit from $500 to $1,000. It was limited at the top. It was capped in the families by income that would be eligible for it.

Also, the Republican majority lowered the bottom tax bracket to 10 percent from 15 percent. Those are working families at the bottom end of the economic ladder who benefit from that. Yet the Democrats in their budget want the child tax credit to revert to $500 and those in the lowest tax bracket to pay 15 percent instead of 10 percent.

So using the current level of tax and value of the credit and then comparing it to the tax rates imposed on middle-class families in the MATH bill, just how do parents fare? The answer may surprise you, given all the Democratic rhetoric flying around the Capitol in recent years. Let's look at an example to see what is really going on.

Peter and Kelly of Waterford, Pennsylvania, are a married couple with two children and have an adjusted gross income of $45,000 in 2011. They have four exemptions totaling $14,800, plus $13,000 worth of deductions for their charitable contributions, mortgage interest and State taxes. Under the current tax system, Peter and Kelly would have a negative tax liability of $275 and would get a check from the taxman. Under the MATH bill proposed by the Democrats, however, Peter and Kelly would owe the taxman over $1,500.

How can that possibly be? After all the Democrats said they wanted to help working families like Peter and Kelly. The fact is that the Democrats are playing fast and loose with their rhetoric and are now playing the game of three-card monte with this family. They say they are removing something called a parent penalty, but by assuming the expiration of the 10 percent tax credit and the child credit declining to $500, the tax bill doesn't lie. This is a big tax increase and in some respects a different standard of living for these parents.

That is why it is so important to talk about just how bad this bill is. With all the information in hand, taxpayers won't be fooled by the Democrats' smoke and mirrors. The only ones foolish enough to believe the claims about this bill, I believe, are my colleagues themselves on the other side of the aisle.

If that wasn't enough, Mr. Speaker, the majority proposes to vault U.S. individual tax rates to among the highest in the entire developed world. When the surtax included in the MATH bill is combined with the take-the-money-and-run revenue grab of repealing the 2001 and 2003 tax cuts, the majority would leave the top tax rate at more than 44 percent. Of all the members of the Organization for Economic Cooperation and Development, that is the club of the developed world, only five would have higher top marginal tax rates in 2011. This is a staggering increase on the top rate.

Some will counter that this increase is only fair because it is directed at only the wealthiest individuals in our country. But those critics would be dead wrong. They would fail to recognize that this crushingly high tax rate will affect small business owners and farmers who report business income through the individual tax code and will cripple the engine of opportunity, job growth and innovation that makes our economy strong. This is the most dynamic part of our economy.

In fact, the Heritage Foundation has estimated that this bill, in conjunction with the repeal of the 2001 and 2003 tax policies, would have the effect of eliminating the entire economic output of my hometown of Erie, Pennsylvania, seven times over each year beginning in 2011.

All year, Democrats have been blindly and steadfastly hanging on to the misguided theory that taxpayers are worse off as a result of the 2001 and 2003 tax relief. Their theory is that because those taxpayers got a tax cut, they were more likely to go into AMT status and therefore be subject to a higher tax bill from Washington.

Not everything in their theory is completely inaccurate. Yes, as a result of the 2001 and 2003 tax relief, more taxpayers were subject to the AMT, and the reason is simple: you are subject to the AMT if your liability under it is higher than your liability under the regular tax. The part they have wrong is that those taxpayers are worse off as a result of now being in the AMT. In fact, they are not worse off than they were, because without the 2001 and 2003 tax policies, they would have paid the same or higher taxes than they do now, even in the AMT.

Where this story gets interesting, however, is that the Democrats' own logic is now turned against them and exposes a major flaw in their bill, the mother of all tax hikes. The stakes are high and job creation hangs in the balance. Unfortunately, the mother of all tax hikes will dole out one serious beating, particularly on small manufacturers, on innovators, on entrepreneurs, and ultimately on job creation.

To understand why, let's borrow the Democrats' own theory, namely, that if rates are lowered, more taxpayers will be subject to the AMT. Only this time, under the mother of all tax hikes, the taxpayers are getting thrown into the AMT as employers.

The individual AMT is not the only monster lurking in the Tax Code. Similar to the individual AMT, the corporate AMT is a horribly inefficient and counterproductive parallel tax system, a source of complexity. The Democrats' bill will, by virtue of modestly lowering the corporate income tax rate, have the effect of increasing the number of corporate AMT taxpayers.

What do the Democrats do to head off this problem, which they decried as a fundamental unfairness when the Bush tax cuts did the same things for individuals? Not a thing. Nothing at all. Nada.

Why is this more important, you may ask? Won't they be better off than they would have been absent the tax cut? While it may be true that corporate taxpayers thrust into the corporate AMT as a result of the mother of all tax hikes may not pay more tax overall, the corporate AMT has built in disincentives to capital investment and job growth.

In short, the corporate AMT, especially for capital-intensive industries, such as the ones in my district, manufacturing, forces employers to choose between investing in their tax bill or investing in job creation. I, for one, have long advocated for a Tax Code that embraces incentives to create jobs, as opposed to a policy that is a dead drag on the economy.

In addition, by lowering rates but not dealing with the corporate AMT at the same time, the mother of all tax hikes will further entrench employers already in the AMT. This will make it even harder for those taxpayers to get out of the AMT.

The practical consequence of this is that existing corporate AMT taxpayers, being forced to stay in the AMT longer, or even indefinitely, will not be able to use the AMT credits that they have accumulated.

These credits are given so a corporate AMT taxpayer will be able to offset future tax liability as a way to make sure that the AMT is not a permanent tax increase. But unless the taxpayer can ultimately leave the AMT, the reality is, in effect, it is a permanent tax increase. In other words, by increasing the strength of the AMT's hold on taxpayers, it will likely translate into a permanent tax increase for some employers that find it difficult to get out of the AMT, and many of these are tax sensitive.

This is absolutely the wrong direction for Congress to take. Instead of entrenching the corporate AMT in the Tax Code, we should be repealing it outright. The corporate AMT turns incentives enacted by Congress to spur new investment and create jobs into liabilities. This includes research and development activity and the purchase of new equipment.

Because more firms are subject to the AMT during economic downturns, the AMT increases taxes during recessions and decreases them during relatively prosperous periods. This artificially accentuates natural market cycles and unnecessarily destabilizes the economy.

The end result is job loss and employers being forced into protracted fears of stagnation when it comes to investment in ingenuity. Not only does the mother of all tax hikes fail miserably to deliver on its promise of middle-class tax relief, but it also makes an intense effort to put those middle-class taxpayers out of work.

This is a bad initiative. It is one borne of ideology rather than practical experience. It is a bad tax policy, and we know from past experience that an old saw of Daniel Webster's holds true: The power to tax is the power to destroy.

If we allow these higher taxes to go into place, it will have a negative impact on our economy, on many of our working families, on many families that we have sought to support through judicious use of the Tax Code.

Mr. Speaker, I think it would be a terrible mistake if, without a fight, we allowed this Democrat tax bill to go into law masquerading as tax reform, but basically dramatically increasing the amount of our national wealth that is confiscated.

I am prepared to join this fight. I am delighted to join the gentleman from Texas and others. I believe there will be a clear philosophical difference laid out before this Congress between those who want to reform the Tax Code through simplification, putting in place the right incentives and pro-growth economic policies, and those who want to game the Tax Code and generate more revenue at whatever economic cost and shift more and more of the burden down to the middle class. This is a fight worth having, and I am proud to join the gentleman from Texas to be part of it.

That's correct. What we are seeing is a vehicle being called ``tax reform'' being used as a locomotive to drive higher taxes, higher revenues, and higher spending levels. This is an attempt in the name of fiscal responsibility to take more from the American economy, more from American working families, more from the public at the expense of the private economy.

That is precisely correct. That is something that I think needs to get out to the American people before we have this debate.

And what is particularly perverse about it, to respond to the gentleman, is we are talking here about permanent tax increases, to provide temporary protection to other taxpayers. Ultimately they have created a series of PAYGO rules that allow them to go in each year, hold certain taxpayers harmless, but at the expense of permanent increases in revenue into the foreseeable future.

What they are doing is setting up a system that can be gamed that will permit them to go forward and raise taxes each year without calling it a tax increase where they are trying to avoid the label. I think that is particularly perverse because what it assumes, even as Republicans for years when they were in power each year tried to look for ways of cutting taxes, it seems like the Democrats have set up a PAYGO system by which they will be able to go in each year and justify tax increases.

They may call some of it loophole closing, but it is higher taxes, and they are going to be looking for more and more creative ways for generating more revenue for years to come, particularly as the cost of patching under their rules, the cost of patching the AMT each year grows higher.

I think the time has come to put together budgets where the math is accurate, where the math isn't based on phantom revenues, where the math doesn't assume the phaseout of taxes every year, and where the math is not based on applying new taxes to whole new classes of taxpayers, particularly a tax that was intended for the wealthy but increasingly is being targeted to the middle class. I think we need to take this opportunity to make a departure from past practice.

As the gentleman knows, when we were in the Ways and Means Committee marking up the unfortunate patch bill that is being brought to the floor tomorrow, I put forward an amendment that was defeated by the majority that was consistent with their budget rules, that would have eliminated the AMT by a date certain. This is something absolutely consistent with their budget practices. They claim to want to get rid of the AMT. But when they had a chance to actually get rid of the alternative minimum tax, they voted us down on straight party lines. This would not have done violence to any of their budget calculations. It would not have required them to adjust their current budget. It would have just required them to acknowledge that they have to stop using the AMT in the outyears to plump up their revenues because they are not entitled to that revenue. Congress never intended to apply this tax, the AMT, to middle-class taxpayers. And the fact that the majority party is so addicted to its revenue that they are not willing to just say no I think tells the entire tale.

I thank the gentleman.

I thank the gentleman for yielding.

I must tell you, Mr. Speaker, I have seen this FTA evolve and I have watched it, representing as I do an area of the country where we have seen both the positives and the negatives of globalization and of trade, and I watched this FTA fully prepared to be skeptical.

Mr. Speaker, I am very pleased today to rise in strong support of this free trade agreement on the strength of the fact that it clearly will further advance America's economic as well as political and foreign policy interests.

As you know, Mr. Speaker, since 1991 our country's commercial partnership with Peru has been driven by unilateral preferences extended to Peru under the Andean Trade Preference Act. Over the past 16 years, Peru clearly has demonstrated its commitment to that agreement in both terms of political and institutional resources. After making significant strides in shifting away from production and shipment of illegal drugs, Peru has become a proven ally and has established itself as a steadfast partner in combating narcotics trafficking, countering regional terror groups, and helping to supply America's energy needs. Approval of this trade agreement will be a critical signal to the Peruvian people and not only help to promote closer ties but to open the door to a new era of trade for our country.

We recognize that the Peruvian economy is roughly the size of the State of Louisiana that the distinguished ranking member represents. It is roughly the size of Louisiana as of 2005. While Peru is not an enormous market, it is still a significant opportunity for U.S. exports.

In 2006, 98 percent of Peruvian exports entered the United States duty-free under the Andean trade pact. The U.S.-Peru Trade Promotion Agreement levels the playing field by moving beyond one-way preferences to full partnership and reciprocal commitments under which U.S. exports also benefit from duty-free treatment. Under this agreement, 80 percent of U.S. exports would become duty-free from day one and other tariffs on exports would be phased out.

The International Trade Commission has estimated that U.S. exports to Peru will grow by $1.1 billion, or more than double the estimated growth of imports from Peru. Additionally, the ITC estimates that the big winners in the U.S. economy will be value-added products, especially in the machinery and equipment sector. The largest import gains from Peru, the ITC estimates, will be inputs, such as basic metals as gold and copper.

In addition to being economically complementary, this agreement will provide substantial new opportunities for American farmers' agricultural exports, break down barriers facing U.S. service providers, and strengthen protections for workers. In fact, the U.S.- Peru Trade Promotion Agreement marks a significant milestone with its inclusion of the most advanced labor obligations of any bilateral or regional trade agreement.

Specifically, this trade pact will require Peru to adopt and maintain fundamental labor rights, as stated in the International Labor Organization Declaration Principles and Rights at Work. This includes freedom of association, collective bargaining rights, the abolition of child labor, among others. Mr. Speaker, these standards are an enforceable part of the agreement, and that is in itself a seminal reform.

Mr. Speaker, there are additional components that I think make this FTA particularly compelling, including enforceable environmental standards. This is a high standard agreement that furthers the commercial and foreign interests of the United States of America.

What this is not, and I emphasize this to my constituents, this is not another NAFTA. This is not a threat to our manufacturing base. I think this is precisely the kind of agreement that many of us have argued for for years.

Isn't it time, if we want a stronger trade policy, that we take ``yes'' for an answer? If we embrace this free trade agreement, we have an opportunity to use it as a model for future trade agreements, and that in turn will strengthen the hand and level the playing field for American companies and American workers.

For all of my colleagues who share that goal, please vote for this FTA. Please send that message.

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

Madam Speaker, we cannot express enough the tremendous debt of gratitude we owe the brave men and women who defend our freedoms every day. It is with great honor that I join my colleagues on the House floor today and

help lead the debate on H.R. 3997, the Heroes Earnings Assistance and Relief Tax Act. This legislation is more than a simple cleanup of some of the disincentives, distortions and oversights that have disadvantaged our active duty military and veterans in the Tax Code.

This legislation is significant because it sends a clear message that even as many of our best and brightest are currently in harm's way in theaters where they are facing hostile fire, this Congress is prepared to work on a bipartisan basis to consider every option and every opportunity to improve the lives of their families and their predecessors.

The $2.3 billion tax package which was reported out of the House Ways and Means Committee last week will bolster tax and Social Security benefits for military servicemembers, veterans and volunteers. This important measure will allow our active military men and women to benefit from the earned income tax credit by allowing them to pair their nontaxable combat pay with their earned income.

H.R. 3997 will ease the financial burden of losing a loved one by allowing survivors to put military death benefits into Roth IRAs without limitations. Furthermore, this legislation will ensure military Reservists will have the opportunity to make penalty-free withdrawals from their retirement plans, including 401(k) and IRA accounts. If deployed, these men and women will be able to provide the financial footing their families may depend on during their absence.

I am also pleased that the majority, in bringing this bill to the floor today, included in it an amendment I offered and withdrew in committee. I appreciate the bipartisan support displayed on this critical issue. Specifically, my provision will expand Social Security income benefits to our aged, disabled and blind veterans.

Under current law, the Social Security Administration counts annuities paid by State governments to veterans who are blind, disabled or aged as earned income. As a result, veterans in certain States like Pennsylvania, which provides paralyzed vets with an $1,800-per-year annuity, may be denied Federal benefits or receive a lower amount than veterans in States that do not provide such annuities. H.R. 3997 will correct this inequity in the law and ensure that annuities awarded by States to vets with certain disabilities are disregarded when determining SSI benefits.

Madam Speaker, the dedication and bravery made by American soldiers have allowed us to exercise our everyday freedoms. Many have made the ultimate sacrifice, and it is our duty in Congress to make sure that veterans rights and interests are protected and served. As many of us prepare for this upcoming Veterans Day, this legislation reaches our Chamber at the proper time and includes the right incentives to help our men and women in uniform. Overall, this legislation is a bundle of commonsense changes to help those who have contributed to the defense of our country and the protection of our freedoms. I am proud to be a supporter of this initiative, and I retain the balance of my time.

Madam Speaker, at this point, I would like to yield 2 minutes to a leader on our committee, the distinguished gentleman from Illinois (Mr. Weller).

Madam Speaker, it is now my privilege to yield 2 minutes to another member of our committee and a strong advocate of the cause of veterans, the gentleman from Texas (Mr. Brady).

Madam Speaker, may I inquire how much time is remaining on both sides.

Madam Speaker, at this point, it would be my honor to yield 4 minutes to a leader in our committee who made a seminal contribution to the SSI component of this legislation, the gentleman from New York (Mr. Reynolds).

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

Madam Speaker, it is now my privilege to yield 3 minutes to the gentleman from North Carolina (Mr. Jones), a strong advocate of the cause of veterans.

Madam Speaker, it is now my privilege to yield 4 minutes to the distinguished gentleman from Kansas (Mr. Moran), a true advocate of the veterans, as well as all of the military facilities in his district.

Madam Speaker, I reserve the balance of my time.

Mr. Speaker, may I inquire of the other gentleman, does he have just one more speaker?

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

In conclusion, I believe the case has been made compellingly that this legislation consists of many components, but they have been developed within the Ways and Means Committee as a benefit for our veterans and our active duty military.

I don't believe there is a great controversy here. What I do believe is there is a lesson. When Republicans and Democrats work together on a bipartisan basis, when they put aside political posturing, when they put aside ideological poses, when they insist on procedural fairness, then I think we can find common ground to move forward on things that are genuinely important.

I want to particularly credit the chairman of our committee, Mr. Rangel, and the gentleman from Massachusetts, the chairman of our Select Revenue Subcommittee, for having moved this legislation forward and having set a very high standard. And I would like to take credit for the fact that there has been substantial Republican participation in the development of this bill.

This bill, I think, is important to move forward now, but not only for what it consists of, but for what it symbolizes, and that is what this Chamber can achieve when both parties work together.

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

General Leave

Madam Speaker, on rollcall No. 1032, the Motion to Recommit with Instructions on H.R. 2262, the Hardrock Mining and Reclamation Act of 2007. I was delayed due to a meeting with constituents.

Had I been present, I would have voted ``yes.''

Mr. Speaker, as the United States enters a new era of trade liberalization, where foreign competition and an evolving international market challenge the historic preeminence of America's manufacturing base, Congress must be vigilant in upholding its commitment to working people and update the safety-net programs that were created to help America's families stay afloat during challenging and troubling economic times.

As the growing global economy continues to reduce barriers to trade, domestic employers are forced to respond to new opportunities and challenges alike. The Trade Adjustment Assistance programs collectively assist in the transition involved in overcoming these challenges.

Today, Mr. Speaker, the House passed landmark legislation to extend these critical safety-net programs to American workers and employers who have suffered from foreign trade. The reauthorization of these programs represents an opportunity for significant reform and enhancement and will serve as one of the milestones that can be a foundation for strengthening U.S. trade policy.

Since 1975, over 3 million American workers have been certified for assistance under the TAA for Workers program, and more than 2 million workers have directly received assistance. In the last 10 years, the TAA for Firms program has saved more than 60,000 jobs. In my district in western Pennsylvania, more than 20 companies have gone through the program and, as a result, have been able to save and even create new jobs for local workers.

Clearly, the TAA programs as a group have an impressive record of success. And the bill that we voted on today, although not designed exactly as I would have preferred, is a strong step forward in strengthening these programs so that they are more efficient, more robust, more flexible and more user friendly.

H.R. 3920 would move to overhaul and reauthorize the TAA for Workers, Firms and Farmers programs for an additional 5 years, through 2012. Importantly, the measure would speed the delivery of benefits by establishing an automatic industry certification system for workers negatively impacted by trade.

As you know, Mr. Speaker, the TAA certification process has been a bureaucratic nightmare of red tape that has plagued the program for a long time. H.R. 3920 would replace the current sluggish and Byzantine system which requires the Department of Labor to individually approve the petitions for assistance for these workers. The establishment of an automatic industry certification alone will be a dramatic improvement on current law.

In addition, the bipartisan measure would extend eligibility to service workers, such as engineers, boost health care benefits, and improve wage insurance programs. In fact, many of these provisions rather closely mirror legislation that I introduced early this year, H.R. 910, the American Competitiveness and Adjustment Act.

As cochair of the TAA Coalition, I have long advocated for the strengthening and streamlining of these critical safety-net programs, and I am proud to have been a part of today's House action, which has been years in the making.

By expanding and clarifying benefits, cutting through mountains of red tape and channeling the right resources toward retraining, H.R. 3920 represents the most important restructuring of TAA since the program's inception. In my view, the Congress has a fundamental obligation to American employers and workers to devote the time necessary to make significant improvements to the program this year.

I look forward to working with my colleagues to advance these commonsense improvements to vastly accelerate and enhance the opportunities afforded workers displaced by trade, as well as augment the competitiveness of American employers before they are forced to furlough workers.

TAA has proven to be a lifeline for American workers displaced by trade. It has prevented thousands of American companies from surrendering to the often increased pressure of the international marketplace, despite their innate ability to compete on a level playing field and to succeed in doing so.

House passage of this bill clears the first hurdle in helping to make TAA better for the future.

Mr. Speaker, I urge the Senate to act swiftly on this critical issue. American workers, employers and indeed our economy cannot wait.

Madam Speaker, on rollcall No. 1010 on H.R. 3224, 1011 on H. Res. 573, and 1012 on H. Res. 747, I was detained due to traffic and was not able to vote.

Had I been present, I would have voted ``yea'' on all 3.

Mr. Speaker, I thank the gentleman for yielding to me and certifying in the process that I am PAYGO compliant, something that will come as a source of great relief to my wife, among others.

Mr. Speaker, I rise in strong opposition to the rule before us today. Very simply, it puts protecting deadbeat taxpayers ahead of shielding unsuspecting citizens from additional taxes and penalties resulting from the majority's inaction on the AMT.

Yesterday, I offered an amendment in the nature of a substitute to the underlying bill. My amendment would have addressed the severe consequences to middle-class taxpayers come next April as a result of the majority's inaction on the alternative minimum tax. As has been noted here, this amendment was fully compliant with PAYGO rules of the House, but it was dismissed out of hand by the majority. As a result, I am here today to strongly urge my colleagues to defeat the previous question on the rule so it can be amended to incorporate consideration of the English substitute.

The fact remains that the clock is ticking, and without a minimum amount of effort by this majority in Congress, millions of taxpayers will not only be socked with an unsuspected bill from the tax man in the form of the AMT, they will also be slapped with punitive penalties by the IRS for not withholding enough as AMT taxpayers.

My amendment would have created a safe harbor for those taxpayers and not penalized them for something that they did not know they would be subjected to; and, frankly, something they never should have been subject to in the first place.

Let's put this in more concrete terms, Mr. Speaker. There are now less than 30 legislative days left in this Congress. So far a bill has yet to be introduced by the majority to spare 23 million American taxpayers from unintentionally being subject to the alternative minimum tax.

Now, after having 10 months of the year to deal with this impending explosion of increased taxes on working families, the majority has done absolutely nothing.

This is the longest period of time the AMT has been pushed aside, and it is incomprehensible that we're not addressing the fallout from this inaction today, even as forms are being prepared to send out to taxpayers.

Working families should not have to pay the price for the majority's inaction on the AMT. In fact, Mr. Speaker, they can't afford to.

I oppose this rule because it embraces the misplaced priorities of the majority to chase phantasms rather than deliver real and meaningful legislation to spare working families from a huge tax increase that was never intended for them.

My substitute would strike the repeal of the private debt collection program and put in place a safe harbor for unsuspecting taxpayers about to be clobbered by the AMT and then again by penalties. Otherwise, my substitute would leave the bill unchanged.

Mr. Speaker, we have to come to grips with the fact that we have to address the AMT. We must do it now. I urge my colleagues to defeat the previous question and bring a rule to the floor that addresses the immediate and pressing needs of working families in this country.

Mr. Speaker, I thank the gentleman for the opportunity to speak on a bill that he has spent an extraordinary amount of time on and is most timely.

The bill before us today is really a question of bringing fairness to the Tax Code. At its heart it puts those taxpayers that have been placed in the tough situation of declining property values and perhaps even foreclosure in

a better position to be able to stay in their homes.

Under current law, a homeowner must pay taxes at ordinary income rates on the fictitious income never realized by the homeowner when a lender forgives part of the debt owed on a mortgage. It is simply unfair that when lenders do the right thing and try to work to keep working families in their homes during tough times, that the taxman then comes and presents that family with a bill on money that they never saw.

The kicker, Mr. Speaker, is that were the homeowner to realize a gain on selling their home, the situation is a very different matter. In that instance, the seller of the home would be only required to pay tax, and at the capital gains rate versus the income tax rate on the amount above an exclusion. Yet, for the homeowner facing a short sale or participating in a debt forgiveness proposal in order to keep them in their home, no such help is extended through the Tax Code.

This bill provides a major step toward helping taxpayers, our constituents, facing this difficult situation. And, Mr. Speaker, it does it while maintaining tight controls to ensure that this change will not be abused by those looking to game the system.

In short, given the situation facing so many of our constituents in this uncertain housing and credit market, this is a needed change for working families and for our economy as a whole.

In States such as Pennsylvania, where delinquency rates are climbing by the quarter, this will serve to keep people in their homes. Homeownership is a major part of the equation when it comes to building savings and ownership in our society, and we shouldn't permit our Tax Code to unnecessarily stand in the way of enabling working families to participate in the ownership society.

I urge my colleagues to make this bill law as soon as possible.