Debating Republican Tax Policy in a Civil Manner
DEBATING REPUBLICAN TAX POLICY IN A CIVIL MANNER
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Mr. CLEAVER. Madam Speaker, I thank the gentlewoman.
Madam Speaker, I would like to associate myself with the comments of my colleague and friend, SHELLEY MOORE CAPITO from West Virginia. When I was elected, I sought to find those who were interested in and concerned about the uncivil manner in which the Members of the House communicated with one another and, of course, there were not a lot of people walking around with signs saying I would like to work on civility.
But I did read in some booklet that Shelley Moore Capito was one of those individuals interested in this issue of civility. So finding someone who shared my feelings that the people's House could and should do a lot better, we began to discuss what we felt would be an appropriate way to deal with this subject.
The truth of the matter is, that Mrs. Capito and I disagree on the issue of the tax cut, and we will debate that issue passionately in just a few minutes. But perhaps it would be important for me to say before we actually get into that subject that we have different backgrounds. We have different political affiliations. Our districts are vastly different. But we do passionately agree that there is a need to promote civility in the halls of Congress.
There are many, many days that I leave this House disgusted, not so much about a vote, as I am over what was said prior to the vote. I have heard all kinds of things fall from the lips of otherwise good and decent men, who were elected to represent a constituency here in this body. I have unfortunately heard, even at times religion used to hurl an attack at another member.
I agree with Mrs. Capito, it is not one party, the insults have fallen from the lips of people on both sides of the aisle, unfortunately. But I would like to just end my opening comments, Madam Speaker, by saying that some suggest that we are in a culture war.
If you accept the notion that we are somehow at war, then I think it is easy to accept the fact that whenever there is war, there is always collateral damage, and collateral deaths. And in the sense that we are having a cultural war, I would suggest that the collateral deaths or the damage is being done to the United States of America.
I am not sure that there are a lot of mothers and fathers watching this session tonight who, on a regular basis, summon their children to the television set to say to them, look, we want you to watch Congress in action and they will teach you how to get along with people when you disagree. I do not think that happens very often in this country and it is sad.
I yield to the gentlewoman
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Mr. CLEAVER. Please. Seniority. I think it would be good if we had, you know, we do not get in much free-wheeling debate on the House floor. So if you feel you want to move in on something, go ahead, and I will let you interrupt, and you can let me interrupt and we will go like that.
Let's talk about tax policy. In the United States Congress, since I have been here, we have passed two very meaningful tax bills. We have passed the Jobs and Growth Tax Relief Act in 2005, and we also passed the Economic Growth and Tax Relief Act.
We have to look at where we were, in my opinion. Where we were was we were post 9/11, we had a corporate scandal, we were in the beginnings or in the middle of a recession in our economy, and we were having difficulty pulling ourselves out for a lot of different reasons.
With the leadership of the President, we followed through in Congress to pass those two tax relief Acts. I think I would like to go to the numbers and talk about some of the things that I think are significant in terms of the numbers and how it has influenced Americans.
I always like to personalize everything to my State, so I have some State numbers as well. For instance, this year, who will gain tax relief? 111 million taxpayers will see their taxes decline by an average of $1,877. Significant numbers.
Five million total individuals and families will see income tax liabilities completely eliminated, because we moved the tax, the lowest tax bracket, down to 10 percent.
Forty-four million families with children will receive an average tax cut of $2,493. That is because we have moved down significantly the child tax credit. Fourteen million elderly individuals will receive an average of $2,000, and 25 million small business owners will save an average of $3,641.
So those are the numbers in terms of what could possibly be saving, average savings through the tax relief. But I think we need to look at where we are right now. We have an economy that is moving in excess of 3.5 percent in gross national product.
We have created, over the last several years, 1.85 million jobs over the last 12 months alone, and 5.4 million since August of 1993. What I think this translates to is more small business owners having more money to create jobs, to buy more equipment, which creates more jobs.
I think we also have individuals who have more discretion over their own dollars. They can say what they want to buy, when they want to buy it because they have fewer Federal taxes to pay. I think that empowers them to consume more goods, which then translates to more business to more jobs.
So I see it as an engine that is moving in the right direction. I believe that the tax relief package and the tax cuts that we passed are a large part of that.
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Mr. CLEAVER. If the gentlewoman will yield. First of all, I agree with your numbers. The job gain during this administration from 2003 to the present does bring the total jobs to 5.4 million. My disagreement with the numbers is that the numbers do not include 2.7 million jobs lost prior to the growth period.
And so if you subtract the 2.7 million jobs that were lost, you actually will have a 2.7 million jobs increase instead of 5.4 million. And I have my own chart. And I do not quarrel with your numbers. But I have taken the numbers in a different direction.
In 2005 dollars, income in 2005 dollars, this chart
reflects the tax savings for Americans. And if an individual earned between $10,000 and $20,000 annually, their tax savings will be $2.
$20,000 to $30,000, $9. $16 if you are between $30,000 and $40,000. If you earned $75,000 to $100,000 your tax savings is $403. And it goes on up, $500,000 to a million your tax would be $4,499.
And the point I want to make here is that the people who earn the most get a huge tax cut, and people who do not earn much at all end up at the bottom in terms of the tax cuts. And so all of America cannot celebrate the tax cuts because all Americans are not getting a tax cut that will have any kind of impact in their day-to-day lives.
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Mr. CLEAVER. I would not support giving any additional tax cuts to people who are already paying virtually no taxes. The earned income tax credit, I think, adequately, appropriately and significantly deals with the people who are at the very lowest end of the income level in this country. And they are paying virtually no taxes.
However, I do think that the tax cuts are inevitably going to be disproportionate because of the disproportionate income. But the problem that I am having with that, in addition to the fact that they are not as equitable as I think we could design them, we are the only Nation in the history of the planet that I can find out that actually moved for a tax cut during a time of war.
Generally during a time of war, we ask the people of the Nation, particularly our Nation, to make sacrifices. And so we are making significant spending a part of our day-to-day living in this country with a conflict going in Afghanistan, a conflict going in Iraq, and who knows what will happen with all of the troubles now in the Palestinian territories as well as in Lebanon.
So I think that we missed a rare but a very, very key opportunity to challenge the people of our country to make sacrifices during this particular time. And one of the sacrifices I think we should have pushed on the American public is that we cannot have tax cuts at a time of war.
Because we are borrowing all of the money. Most Americans probably do not realize this, we are borrowing all of the money we are spending to fight the war in Iraq and Afghanistan.
When people in the country read that we are considering supplemental budgets, they probably do not realize that when we say we are just approving a supplemental budget, it means that we are going out to sell our paper, we are going to out the market the full faith and credit of the United States. We are borrowing money from the U.K., from China, from Japan, and particularly, the Pacific rim countries that are exploding with growth.
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Mr. CLEAVER. If the gentlewoman would yield, and I want to talk about the increase in tax revenues, but I want to make sure before we leave this subject, this particular area, that one-tenth of 1 percent of Americans, this one-tenth of 1 percent who earn $1 million per year or more will receive 43 percent of the tax cut, while everyday Americans, men and women who earn $50,000 or less, will get 2 percent of the tax break. They will receive a $10 yearly tax cut, or enough to buy barely $3 worth of gasoline. And so the people in the lower end, as I said earlier, are hurt.
But with regard to the tax revenues that are surprising Democrats and Republicans alike, I would like to just quote Bruce Bartlett, who was an economist with President Reagan and also with the first President Bush. And he said, ``I do not see how President Bush's tax cuts can be given any credit for the booming economy. All we have seen is the upturn we get after every recession. In other words,'' he says, ``without any tax cut at all, we would be pretty much in the same place economically.'' And then Bernanke, the new Fed chief, said, ``I think it is unusual for a tax cut to completely offset revenue loss.'' And I agree certainly with former Reserve Chairman Alan Greenspan who said that tax cuts should be made in the context of a PAYGO resolution, which I support very strongly, and I know there are Republicans who support the PAYGO resolution as well.
And for people who are watching us, what Alan Greenspan is saying is that, yes, tax cuts can be healthy, but the government must become a disciplined body and that they must pay as they go, that we cannot afford to just become ravenous in our spending to the point where we push our country into a very, very dangerous place economically. We are $8.4 trillion in debt, and we have raised the debt ceiling repeatedly to the point now where it is over $9 trillion. And the problem with that constant raising of the debt ceiling is that we are borrowing our children and our grandchildren into significant trouble down the road.
And $1 trillion is very interesting. Most people have difficulty with 1 trillion, and I do, too. However, $1 trillion would equal essentially if a person spent $1 million a day from the time they were born until they were 75 years old, $1 trillion. We are $8.4 trillion in debt. And with that kind of debt, we can ill afford to subtract dollars out of the Federal budget that would generally be coming from tax dollars while we are taking money out, not only with the debt, but with the interest payments, which I will speak to a bit later.
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Mr. CLEAVER. I agree with you that we are taxed heavily in this country, all the way from these Chambers, this Chamber all the way to city halls around the country. But I do believe in tax cuts, and I think that we would be wise or certainly we would have been wise to have some tax credits to the corporations who engage in a certain amount of research and development. I think if the tax credits can be linked to research and development, then we know that those dollars are going to recirculate, they are going to come back into the budget.
I also think that we ought to give tax credits, that the one we had has expired, for parents who are sending their children to college, they ought to get tax credits. We are going to be locked into a very, very tough competitive battle with India, with China, with Japan, and even with Taiwan; and so we have got to educate as many children as possible, and we have got to make it easy for parents to pay for that college.
But the reason we won't be able to do that, and this is another thing that should cause us to reconsider the tax cuts, is the interest payments on the debt. Now, the interest payments are obligatory, and it is right now the third largest expenditure in the United States Federal budget; and that is very, very dangerous. We can cut Veterans Affairs, we can cut homeland security, we can cut education; but we can't cut net interest because the interest on the debt is obligatory. And it doesn't matter what else happens economically in this country. We have got to pay at least the interest on the debt because the Chinese, the European market will not have an understanding that we are not paying this interest.
And I also think that is extremely dangerous, because we are borrowing money from countries that in all likelihood we are going to have some difficulty with. We are even borrowing money, $50 billion so far, from OPEC.
And how does this fit in with the tax cut? Well, the problem is that we are continuing to borrow money, taking money out of the budget with the tax cut, and the interest is rising. And the interest payments do in fact have a very, very direct impact on taxes. And we would obviously be able to lower taxes if we were able to lower the interest rate.
We have become a debtor nation, and that is not healthy. We owe everybody around the world, and in fact we will end up borrowing $36 million during this 1-hour debate, $36 million during this one hour of debate. And when we are borrowing that kind of money and then giving tax cuts that will not come into the Federal coffers, it seems to me we are working against ourselves.
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Mrs. CAPITO. Your solution that you are advocating would be to raise the taxes from where they are right now to pay and meet this obligation. Is that basically correct?
Mr. CLEAVER. No. I think we eliminate the tax cuts, which would allow us to begin to retire our debt. And if we just eliminate the tax cuts, and I will have to fumble through my papers to find out the exact amount of money that we would bring back into the Treasury, but it would be so significant that it could essentially put us in good stead with regard not only to our debt but the interest we are paying, or not only the interest but the debt we have.
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Mr. CLEAVER. That would be true, but we cannot do everything that we need to do and give the tax cuts. I mean, I think we have to keep in mind the growing cost of the war against terror, and we do not even budget for it. Most of the Americans will probably find it amazing that we do not even budget for the war, and the supplemental budget, of course, is supposed to be for unexpected costs. We did not even budget for the rebuilding of the gulf coast region. All of that finds its way into the supplemental budget, and I am saying that we are borrowing money that we might not have to borrow if we had it in the Treasury, and we would have it in the Treasury if we had not given it in tax cuts.
Now, I want to say that the economic stimulus, the administration's tax cuts in 2003 had particularly low bang for the buck. The moderate economic growth has not been disbursed, as I said two or three times a night, to most American families. After accounting for inflation, the typical American family's income has decreased every year of the Bush presidency for a total reduction of $1,700. Now, that is when you factor in the inflation. It has dropped to $1,700.
The GDP growth in the first quarter this year was, as you said, a strong 5.6 annual rate, but most forecasts, including the economists in the White House, see the growth moderating to around 3 percent over the next few quarters. So, whether you take the economists who lean on the Democratic side or on the Republican side, the truth of the matter is they all agree that things will moderate shortly to around 3 percent in the next few quarters.
So I do not argue with the facts, and we all ought to be happy there is some life injected into the economy right now. I just do not think that we ought to come to the conclusion that it is long lasting, number one; and number two, I think that it would be wrong to assume that all is well in this government so we can give the people a tax cut back because it lulls them into believing that we have no problems.
I want to say that we do have some major problems, some major economic problems, not the least of which is the growing debt that is eating away at us. I thought this was interesting. If we pay $1 per second, it would take us 284,000 years to pay off our debt. 284,000 years to pay off our debt if we paid $1 per second, and that is scary.
The other numbers, if we laid dollar bills side by side all around the globe, we would be able to go around the globe 34,196 times with dollar bills reflecting the debt we have, and we cannot afford to give tax cuts, fight the wars, handle the many issues that come before us at the same time. We just cannot do it.
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Mr. CLEAVER. My final argument is, and I think this is a very, very good example or illustration of the disparity between the recipients of the best ends of the tax cut.
Lee Raymond, who was the retiring CEO of ExxonMobil, owns 7.7 million shares of their stock. Now, at the current dividend rate, he would generate, if he sold his stock today, $10 million. On top of that, he will have a $2.5 million tax cut. I think when we see that kind of disparity it has to pull at us that something is dreadfully wrong.
Now, I am not upset with Mr. Raymond. I do not even know him. He may be a nice person. He may want to tithe to the church I pastored, but what I am concerned about
is the fact that his total retirement package came close to $400 million, including his 7.7 million shares of stock. That is far more than one human being needs to earn, and I think that people who are earning $34,000, $45,000 a year are going to look at a $2.5 million tax cut for this gentleman and wonder about themselves.
My final point that I have continued to make, as my uncle says sometimes I make the argument poorly, but it is that we cannot do everything. We cannot do everything. We cannot fight a war, $87 billion a year; we cannot fund all of the programs that people lobby you and me every day to fund; and we have used up every single nickel of the Social Security surplus. That is devastating, and we have got to come to grips with pay as we go, like all other Americans. If they want a refrigerator, they try to wait and pay for it.
But what we have done is has been to demonstrate that to the people of the United States that the amount of credit they have, credit debt does not matter. In 2004, we saw the average credit card debt for Americans rise by 63 percent. Now, Asians save on an average of about 20 percent. The savings rate, Mr. Speaker, for the United States, this is embarrassing, is minus zero. We go on the other side. We are not saving any money at all.
So the country looks at us, the Congress of the United States, we are spending wildly, and they have joined in. Because the American public is not saving, the government cannot borrow domestically. We are borrowing some domestically, but when we get ready for the heavy lifting, we are travelling around borrowing money from Caribbean Nations.
I think that reeling in the tax cuts will allow us to address some of those other problems and reduce the amount of borrowing.
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Mr. CLEAVER. I thank the gentlewoman. I actually have read George Washington's book on civility. RUSS CARNAHAN, my colleague from Missouri who is from St. Louis, gave me that book shortly after we arrived because I was talking all the time with many of the freshman Members about the issue, and so he very kindly gave me that book.
I think neither of us are likely to change our opinions on the tax cuts, and I think that people who watch, particularly Members of Congress, hopefully realize that talk does not have to be toxic, and in many instances, that is what has happened on this floor. The more convinced we are that our position is sound and moral and ethical and right, the less hostility we need to speak of it.
To give you an example, Ghandi and Martin Luther King, Junior, both believed so deeply in what they were doing and the moral world coming to their side that they were so civil that they were willing to be beaten and to even go to jail. They did not respond in kind to the things that were done, and so on this floor, if we believe deeply in what we are saying, that is even more reason to be civil.
When I was elected to this body, and my father and my sisters and my wife and our 4 children and nieces and nephews all came to Washington, I was very excited over the fact that I was elected to this body. Only 18,000 people in the history of this republic have been able to sit in this Chamber and debate, and we are the only office in the United States that must be elected. You can ascend to the presidency without being elected; you can ascend to the vice presidency; you can ascend to the Senate, to governors, to lieutenant governor, to the to the U.S. Senate and so forth. We have to be elected here.
If a vacancy occurs, nobody can appoint anyone. We have to be elected. That means that this is a special body. There is nothing like it.
And so I assumed when I came here I would join the likes of James G. Blaine and Cordell Hull, who came to this floor and demonstrated a wizardry of words. Once upon a time, the level of debate and oration in Congress was the envy of the world. We had the example of the silver-tongued spellbinders like Daniel Webster and John Quincy Adams and Henry Clay. And the amazing thing that many Members of this body may not know is that Henry Clay was in the United States Senate, but became so enamored with the debate in the House, that he did something that people would never even think about doing today. He left the United States Senate to become a Member of the House of Representatives, to stand in that well to debate the great topics facing the Nation.
That is one of the things I thought about when I came to this body. Henry Clay was known as the great compromiser, not as the great bomb thrower, but the great compromiser. He is remembered in history because he knew how to work with people on all sides, a compromiser. And somehow we have to come to the conclusion if we want to be remembered, maybe, just maybe we can be remembered better for our ability to work with one another.
We had a situation when I first came here with 25 jobs being lost in Kansas City, and some people told me that I needed to go to war. We were going to lose it anyway, so I needed to go to war with a Republican, FRANK WOLF. It didn't sound right to me. So I did something that was completely stupid. I called FRANK WOLF on the phone, went to his office, we met, we talked about the issue, and he said, Cleaver, you're right.
Twenty-five jobs were saved because I refused to go to war with someone just because he was a member of the other party. And I am convinced that much more could be accomplished here if we worked together.
I have heard this story more than once. Barry Goldwater and Lyndon Johnson are about to launch their Presidential races. Barry Goldwater calls the White House and made a request that would be laughed at today. He asked that he be allowed to ride around the country with LBJ on Air Force 1 and they would stop at various cities and debate the issues. That is the kind of leadership that we need now in this Congress.
I believe a part of the reason that the tone in this Chamber has plummeted so low is because the volume is too loud, literally. Too frequently Members fail to extend the courtesy of attentive and respectful listening to other Members when they speak on the floor. Too frequently volume is so loud in this Chamber with disrespectful and discourteous conversations that Members end up shouting to be heard, and that only contributes to the incivility here in the House.
Let me conclude by saying that as we were thinking about this debate, I looked at everything I could look at, and one of the things that surfaced was that civility derives from the Latin word civitas, which means city, especially in the sense of civic community. Civitas is the same word from which civilization comes, the age-old assumption behind civility is that life in the city has to be civilizing. People could not live in a city without civility. And I believe that we cannot and should not dare to walk into the people's House without a strong and irreversible commitment to civility.
I would like to thank the gentlewoman from West Virginia for this opportunity. I hope that next month we will have other Members of this body joining us for a discussion on something that we feel very passionate about, and will probably not convince the other side, but I think the public will benefit by the debate.
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