Can I first say a couple of things? I want to first thank Congressman Meek and yourself, my dear friend Congressman Delahunt. We started out in Congress 9\1/2\ years ago. We are delighted to welcome this very bright young man who is now a…
Can I first say a couple of things? I want to first thank Congressman Meek and yourself, my dear friend Congressman Delahunt. We started out in Congress 9\1/2\ years ago. We are delighted to welcome this very bright young man who is now a veteran Congressman.
I represent, I suppose, the 50-somethings. I know, Bill, you are probably still 30-something. But I have been watching you young people, and Ms. Wasserman Schultz and others, and I have always been jumping up at my television saying, gee, I wish I had the time to add my voice. Well, something happened yesterday, gentlemen, and Mr. Speaker, that so outraged me that I had to come to the floor to speak about it.
Actually, it was this past week. We had the commissioner of the IRS, Mr. Everson, before us. He announced that he was going to, according to the President's policy, in order to collect some taxes that were acknowledged to be due by the taxpayers, the IRS is now going to hire private collection firms to collect the taxes of United States citizens.
It gets worse. Private tax collecting firms collecting taxes due by United States citizens to the IRS are going to charge up to 25 percent commission. A 25 percent commission. So for every dollar they collect from the taxpayer, they are going to keep 25 cents.
Now, what is interesting is, I asked certain questions and I discovered that a Federal employee in the Internal Revenue Service who collects taxes, their overhead is about 5 cents on the dollar. Five cents on the dollar. The private collection agencies are going to get 25 cents on the dollar.
So I asked the Commissioner of the Internal Revenue Service, I said, Mr. Commissioner, why are you giving away taxpayer money? Federal employees to collect taxes costs 5 cents on the dollar, you are giving 25 cents on the dollar to a private firm to collect these taxes. Why are you giving away 20 cents of our money?
He said, Well, you know, the President doesn't like big government and so we are going to privatize it, in essence he was saying. We are going to give it to the private sector so we do not have it on our books that we are paying people to collect taxes.
I said, Wait a minute, the bottom line is you are wasting money, am I correct, sir?
And he said, Yes, we are.
I said, Wouldn't it make sense, Mr. Commissioner of the IRS, and by the way, we have been carrying hundreds of billions of dollars of receivables from taxpayers who didn't pay their taxes on our books for decades. So if we hired some Federal employees to add to the IRS to collect taxes, they would have plenty of work for their whole career. Isn't this a waste of money, Mr. Commissioner?
And he said, Yes.
I said, Isn't there one other element that you find frightening, to have a private company handling the private details of a taxpayers' basic and most important financial documents? Doesn't that concern you, sir?
He said, Yes, actually it does, and he pointed to some effort in New Jersey where they tried to do it and it was rife with some corruption and he was concerned about it and they were going to take steps.
I said you are worried about corruption and you are worried about the violation of the citizens' privacy by hiring these private tax collection firms, and you are going to lose 20 cents on the dollar because it costs 25 cents for these firms versus 5 cents for the IRS employee and you are wasting tens of millions of taxpayer money, and he had no answer.
I got another one today.
It was an honest answer, and I thanked him for that. He said that it was wasteful, and he said that is the budget that the President gave me.
My subcommittee had a hearing today and we had the Secretary of the Treasury in front of us, Mr. Snow. I said Mr. Secretary, a lot of people say that tax cuts that go to the richest people in the country, people making over a million dollars a year, but if you added up all of the tax cuts, people say that we get money back from the tax cuts and it fills up the government coffers far beyond what we cut in terms of taxes to the rich.
Another honest answer, he said, Congressman Rothman, for every dollar we cut in taxes, we only get back to the Federal treasury about 30 or 40 cents. For every dollar we cut in taxes, we only get back 30 or 40 cents.
I said, Wait a minute, what about the supply side notion and all this talk about the economic growth generating revenues?
He said, Well, that is the consensus of opinion, that for every dollar of taxes cut, we only get back 30 or 40 cents.
I said, Wait a minute, we are losing money every time we do a tax cut and then you tell veterans in this budget, the Bush budget, veterans have to pay more for their health care and poor people have to pay more for their prescription drugs. A family who wants to send their child to college has to pay another $2,000 or $3,000 a year. There is money for nothing but tax cuts.
He said, Oh, by the way, that deficit that we have, the largest deficit in the history of the United States, the one we have today under this Republican majority and this President, one-third of the deficit said Treasury Secretary Snow today, one-third of the deficit is directly related to the tax cuts.
Here is another interesting statistic. By the way, working people need tax cuts. They need incentives to save and incentives to work even harder than they already do, if that is possible.
But people who make over $400,000 a year, people who make over $400,000 a year, God bless them, this is a fact that we in America have to deal with in order to decide is the Republican majority and is the President or are each of them making the right policy judgments. People make tax cuts for people making over $400,000 a year.
This year if you add up just those tax cuts, it will be a greater sum than all that we spend on homeland security. And yet the majority and this administration says we can only afford to inspect 5 percent of the containers coming into America, even though in Hong Kong they inspect 100 percent of the containers. This is the priority of this administration.
By the way, I asked Secretary Snow, I said, because he was very proud that perhaps tax cuts helped get us out of the recession that was very shallow. I said, Mr. Secretary, the recession is long over. It has been over for 3 years
or more. So why do we continue to give tax cuts to the wealthiest people in the country, accounting for a third of our deficit and when we tell working people and veterans and school kids we do not have money for you, in fact we are going to cut your budgets and keep those tax cuts.
Mr. Speaker, if the gentleman would yield, not only is the gentleman absolutely correct that this is what this President and the Republican majority have done for 5\1/2\ years, they want to make this policy permanent. They want to make it permanent. Permanent tax cuts for individuals making over a million dollars a year. Permanent tax cuts for people making over $400,000 a year, the sum of which is greater than all we spend on homeland security, and they want to make it permanent. If we vote against it, you know what they say, there they go again, the Democrats want to raise taxes. We do not want to raise taxes, we want sensible fiscal policy that does not give us the biggest deficit in the history of the United States and does not give the people making millions of dollars a year a million dollar tax cut.
Yes, of course.
Will the gentleman yield? I have a statistic you won't believe. I happen to serve on the House Appropriations Committee.
And we were only inspecting 5 percent of the containers. That was the Republican majority's policy. They were in charge. They made the rule. The majority rules, and they won.
We said in the House Appropriations Committee, we said to our colleagues, our Republican friends, if we cut $5,000 from the 80 or $100,000 tax cut, 80 or $100,000 tax cut, depending how much money these folks make, if we just take 5,000 from the 80,000 we are sending them, we could triple the number of containers we inspect from 5 percent to 15 percent.
And do you know what every single one of my Republican colleague on the House Appropriations Committee did? They voted against it.
And I went to them and I said hey, man, what are you doing? I have nothing against people who are worth a fortune. This isn't class warfare. Do you want to give it to them, or do you want to spend it on inspecting our containers coming into the port? And they said, we are story, Steve. This was the President's directive.
Yes.
By the way, the incomes of the people who were going to have their tax cut reduced by 5,000 were only individuals whose annual income was $1 million or more. And we said, can we take 5,000 from the 80 or 100 or 150,000 they are going to get in tax cuts, take 5,000 to increase our port inspection of our containers. And every Republican said no. Mr. Speaker, that is the priority of this Republican majority and this President.
Will the gentleman yield?
You know, some people will say, oh, there the Democrats go again, class warfare. There they go again, class warfare. Nonsense. We love rich people. We love poor people. We love middle class people. We love Americans. This is about the choices that America is going to make with their tax dollars.
What should we do with the tax dollars that people send to Washington? Should we give them, by the way, the recession is over. We are in the start of the fourth year of the war in Iraq. We are still paying for Katrina and Hurricane Rita.
With all of these problems and the recession over 3 years ago, is this the time not only to continue these tax cuts that benefit the wealthiest people making over $400,000 a year, millions of dollars a year? Or should we, in fact, pay off some of the debt, spend down the deficit, pay for college for kids.
And remember this, not only has this been the policy that has put us in the largest deficit in the history of the country, the Republican majority and the President want to make this policy permanent. They want to make their tax cuts for the rich permanent.
They will claim we are against wealthy people. Class warfare. Nonsense. We want the money that we send to Washington spent wisely and not given away.
Will the gentleman yield?
It is important for people to understand that this majority came in saying that we needed to balance the budget and that is why the American people should elect a Republican majority. When I was the mayor of my hometown 25 years ago, a little city in New Jersey, we had to balance the budget every year. And we did. We left them with a surplus, but at least balance the budget. And they said, well, let us make a constitutional amendment. And we said, Why are you amending the Constitution? You are in the majority. Balance the budget. You have the majority. Balance the budget.
So in terms of third-party validation, Mr. Speaker, the American people know that the Republican Party has been in power, in the majority, in the House and the Senate for about 5\1/2\ years, with President Bush as our President for 5\1/2\ years. And we have the greatest deficits in history. We are projected to have deficits for the next 15, 20 years with no end in sight, with budget cuts to education, health care, veterans, college loans, the environment, clean air, clean water. Cut, cut, cut, cut everything, except tax cuts for the wealthiest. And, again, I do not want to harp on that because tax cuts for the working people are important. But is this the time to continue that policy ad infinitum and make them permanent? I do not think so.
That is a good idea.
May I just remind the Speaker that today Secretary of the Treasury John Snow said in his testimony before our subcommittee of the House Appropriations Committee that the tax cuts of this majority and President Bush account for one-third of the deficit, and that every dollar that is cut for the wealthiest folks in tax cuts, we don't get back more than a dollar in revenue. We lose. For every tax dollar we cut, we only get back 30 to 40 cents. We lose 60 to 70 cents for every tax dollar we cut.
Whether that is a good thing or bad thing, the American people can decide. But in a time of war, the biggest deficits in our history, is that what we want to be doing with our money, and should we be making those tax cuts permanent?