Permanent Extension of 10-Percent Individual Tax Rate Bracket

PERMANENT EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET

Mr. HOYER. Mr. Speaker, will the gentleman yield?

Mr. SHAW. I yield to the gentleman from Maryland.

Mr. HOYER. Mr. Speaker, I think the gentleman certainly makes a point that we do not want to delegate to the executive branch. I think the gentleman makes a good point: We ought not to delegate.

Mr. SHAW. Mr. Speaker, I thank the gentleman. I should probably reclaim my time at this particular point.

Mr. HOYER. Of course, the gentleman knows something else is coming.

Mr. SHAW. I know the gentleman is setting me up.

Mr. HOYER. My good friend knows me well.

The fact of the matter is we have been debating for some time the way we can internally, Congress can control this spending, and reaching what the gentleman says is a good thing, a balanced budget. And that, of course, is doing what we did all through the 1990s: applying the pay-as-you-go provision to both revenues and taxes, which is the discipline that this body placed on itself so we did not have to rely on the executive branch.

Mr. SHAW. Mr. Speaker, reclaiming my time, I do not believe that the pay-go is looking towards the Office of Management and Budget as having to certify things before we do it.

Mr. HOYER. Absolutely, that is my point. And if the gentleman would support pay-as-you-go, perhaps we would not have to look to other ways to try to get to balance.

Mr. SHAW. Mr. Speaker, I can see both sides of pay-go, but I cannot see both sides of delegating legislative authority to the executive branch no matter who controls the executive branch.

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Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding me this time. I really could take 30 minutes to try to correct what the gentleman from Wisconsin has been saying.

First of all, he is a very bright young man. I like him. And it is your money, he says. Now, that is the mantra, and that mantra I have heard for 20-plus years. And, of course, it is your money. And by the way, it is my money, too. I pay more taxes effectively than the Vice President of the United States, who made almost 10 times as much as I make, but I am not poor-mouthing that. And, by the way, the gentleman talks about these large corporations. They do not really care what the rate is because, as we notice, I say to the gentleman, 60 percent of them do not pay any taxes because of their preference
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An aside that the Republican majority has made the Tax Code extraordinarily more complicated over the last 3½ years, extraordinarily more complicated over the last 3½ years, let me call to my friend, the gentleman from Wisconsin (Mr. Ryan), some facts.

A, Mr. Armey said you own this town. You have the President, you have the Senate, you have the House. Now, I have been here a lot longer than the gentleman from Wisconsin (Mr. Ryan).

He talks about debt. Under Ronald Reagan, we raised the debt level 17 times. Under George Bush, the first, in 4 years we raised the debt limit 10 times. Under this President, we have raised the debt limit by $1.5 trillion over 3 years. Over 8 years, under President Clinton we raised the debt limit five times for $1.58 trillion. The difference, however, is that under Ronald Reagan and George Bush, the first, we added about $2 trillion to the debt. Under this President, we have added about $1.5 trillion to the debt, and under Bill Clinton, over 8 years, less debt and net $79 billion worth of debt, not trillions, net. Why? Because for 4 years of the last 4 years of the Clinton administration we created surpluses.
Secondly, the gentleman and all the Republicans talk about it is spending that is the problem. The gentleman from Wisconsin (Mr. Ryan) says that spending is the problem. I would like to have the gentleman's attention because I know he is going to find these figures very edifying and interesting because he talked about spending, that is a legitimate issue to raise; and I want to call the gentleman's attention to the administration's budget numbers.

We have it from 1962 to today. Under Ronald Reagan's Presidency, a, we spent 22.5 percent of GDP on average, some years higher, some years a little lower, under Ronald Reagan, never below 21 percent. Let me remind my colleagues that not a penny was spent in America during Ronald Reagan's term of office without his signature, not one. We never overrode a veto. The Democrats never imposed spending that the President did not sign off, not once. So we understand nondefense discretionary spending was 3.4 percent under Ronald Reagan.

Under George Bush, the first, it was 21.9 percent of GDP. Again, he never had a bill veto overridden stopping spending. He signed every nickel of that expenditure, 3.3 percent on nondefense discretionary spending.

Under George Bush, the second, we have done 19.85, almost 20 percent, and 3.5 percent, Dick Armey, they control this town, 3.5 percent of that was on nondefense discretionary spending. I will tell my friend from Wisconsin this fact is going to amaze him. We spent less GDP under Clinton for 8 years and we spent less on discretionary spending, less on discretionary spending, and I heard the gentlewoman from Tennessee about an hour ago saying we have created 1 million jobs since last August. We created 23 million jobs in 8 years or about 4 million a year on average under Bill Clinton.

So, when we are talking about the facts, we ought to know the facts because the facts belie what the gentleman from Wisconsin is proposing. That is why we are here, because we believe my colleagues' policy is not only fiscally wrong but it is also immoral. My friends on the Republican side want to create the impression that they are the only ones who support this 10 percent bracket. They are not. We want to make it permanent, but we do not want to impose a tax.

He talked about various people who are going to get tax increases. Under their bill, 290 million Americans are going to get a tax increase, but guess what. They will not get it immediately. We are going to delay it a little bit, not only past the next election but maybe past a couple of elections after that. Why? Because interest rates are going to go up, taxes are going to go up to pay the interest on this debt that my colleagues are creating, over $200 billion of additional debt in this bill alone.
That is all we are saying. We are for this policy. We are for keeping this 10 percent bracket. We want to assist those at the bottom rungs in our society, build themselves up, grow their families, have a better opportunity to pay for the education of their children and their mortgage payments and buy their cars and have a better quality of life. We want that, but we do not want to give them a bill for it 10 years from now that says guess what, you have got a big interest that you have got to pay.
I would urge my colleagues to look at the facts. Look at what we did under a piece of legislation passed in 1993, one passed in 1990 and, yes, one passed in a bipartisan way in 1997, which led to the creation of surpluses.

Let me close by this, and I do not have as much time as I would like, but Chairman Greenspan said just the other day, who is not a Democrat, "Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances. The free lunch has still to be invented."

Vote for this substitute. My colleagues will vote for the policy and responsible fiscal policy at the same time.

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Mr. HOYER. Mr. Speaker, will the gentleman yield?

Mr. BLUNT. I yield to the gentleman from Maryland.

Mr. HOYER. Mr. Speaker, because I understand what the gentleman is saying, I think it is important to note that every working person in America pays taxes. We call it FICA tax, and 50 percent of Americans pay more FICA tax than they do, but we are using, as the gentleman knows, part of their taxes because there is a surplus in the Social Security account for general expenditures. So in that sense, the overwhelming majority of employees are paying.

Mr. BLUNT. Mr. Speaker, people who are working pay into those funds, that is a good point; and I am pleased that my friend made it.

At the same time, it does not minimize my point that those people who only pay into the Social Security fund do not have the same stake in the income tax system and how it works than people who do not. I am glad to see us making it more possible for people to have a smaller tax burden at the lower levels of people who pay taxes in the country. I think that is a good thing.

I think the 10 percent bracket and making this 10 percent bracket a permanent part of the tax structure is not only what we should do but what the House will vote to do today. I would like to see that happen on the other side of the building as well, and we will encourage that by sending this legislation over.

The 10 percent bracket in the substitute does have conditions still in it and because of those conditions is not as permanent as the proposal that we have before us in the main bill. Because of this 10 percent bracket, if we did away with the 10 percent bracket, 73 million working Americans would pay higher taxes next year than they paid this year because we would not have the 10 percent bracket available then next year. Seventy-three million Americans would pay higher taxes because of that.

Unless the House acts, 22 million lower-income workers would be pushed from the 10 percent bracket into the 15 percent bracket. We do not want to see that happen.

This is an important step in the right direction. I urge my colleagues not only to defeat the substitute, which does not accept the permanency of this important addition to our tax policies, but to vote for the bill.