Republican Conference Bills

Press Release

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Mr. LATTA. Mr. Speaker, I would like to thank the gentlelady for yielding. This is a very important issue that we are talking about: jobs, small businesses, and how we can get this country moving. I rise tonight to discuss a bill that I have sponsored, H.R. 1763, which is the Responsible Reinvestment Act of 2009. But before I do, I would just like to make a couple of comments, as the gentlelady just said, about the uniqueness of my district.

I have the number one manufacturing district in the State of Ohio. I also have the number one agricultural district in the State of Ohio. And about 2 years of this time, according to the National Manufacturers Association, I had the ninth largest number of manufacturing jobs in the United States House of Representatives. But because of the recession that we've seen happen across the country, I have dropped to about 20th, which is totally unacceptable because last summer we had unemployment rates raging across our district and across the State and the country. Two of my counties had over 18 percent unemployment. I had four others over 16 percent. So we have to do something in this country to get this country moving.

It's kind of interesting. We talk about having a district that's number one in manufacturing and also a district that's number one in agriculture. So how did that work? Well, I have so many of my farmers that work full time off the farm, but they work full time on the farm. So like my relatives who also live in my district, you know, they're working a lot more than 40-hour weeks, and they are making sure that the American economy keeps moving, they are making sure that Americans are fed, but they are also making sure that we don't have to rely on foreign countries for our food, like we have to do when it comes to oil, relying on foreign countries for our needs.

So we need jobs. We need jobs that are created by the private sector. We don't need any government jobs that are really just make-work jobs out there. Small businesses continue to bear the burden of this economic slowdown, and they need relief to be able to survive and continue to remain in business. Currently, small businesses employ over half the private sector workers in America. To assist small business owners, I introduced the Responsible Reinvestment Act. Specifically, this bill focuses on the following areas that I believe will not only help small businesses grow throughout the country but also help put our neighbors back to work.

The bill does the following: a 20 percent tax cut for small business is equal to 20 percent of the total income of the business. It permanently repeals the estate tax, or the death tax. You know, we have to do something in this Congress because if we do not act by the end of this session, the death tax will revert to

where it was 10 years ago without any adjustment to inflation, and that will hit small businesses and farmers alike. So, again, this bill repeals the death tax; it increases the expensing for small businesses to $500,000; a full first-year expensing for farm and manufacturing equipment; and the full deductibility for the self-employment tax in relation to health premiums, which is extremely important for small businesses across this country.

The items in this bill will also be very beneficial to small business owners by freeing up capital for them to use to reinvest in their business. And through doing that, it will bring stability back to the communities in which they exist.

The future of our country depends on a proactive approach to creating viable solutions for small business owners to exceed and remain profitable. Small businesses are the lifeline and the heartbeat of our Nation's economy, as these are the companies that we rely on for products and services. As a Congress, we must absolutely stop passing legislation that contains massive spending and, instead, pass legislation like H.R. 1763 that will help small businesses rather than hurt them.

President Obama submitted his administration's fiscal year 2011 budget proposal with a record-breaking cost of $3.8 trillion. This budget proposal includes a $2 trillion tax increase over the next 10 years and projected record deficits. This proposal will double our Nation's debt in 5 years and triple it in 10 years from fiscal year 2008 levels.

The Congressional Budget Office has stated that under current spending levels, by 2020 American taxpayers will be paying $2 billion a day in interest on the national debt alone. And, again, let me reiterate that--$2 billion a day. I think we have to understand what this is going to do. It hasn't been all that long ago that we look back to the late seventies and early eighties when we had 21.5 percent interest rates in this country. And it wasn't very long ago I was talking with some small business owners in my district, and they said, Well, we even had problems getting a loan at over 26 percent interest.

Now, if the Federal Government is borrowing over $2 billion a day--and you know, when you are talking about that, you are looking at the Federal deficit or, I should say, the debt going to $20.3 trillion by the year 2020, and now the U.S. Treasury is coming out and saying that that could be at least $26 trillion, that $2 billion a day is going to be much higher, and businesses out there are going to have to do one thing--compete against government to borrow. That means the interest rates are going to skyrocket again, and how are we going to get small businesses moving again in this country?

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Mr. LATTA. I thank the lady for yielding back. Because again, you know, when you are looking at these staggering numbers--I'm sure Wyoming, like the State of Ohio, in our Constitution we have to balance our budget. I was a county commissioner for 6 years when I was first elected to public service. We went through the '91-'92 downturn at that time. And what did we have to do? Well, we had to cut back. We didn't just say we have to spend more. We had to cut.

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Mr. LATTA. Well, what we had to do was when we did our budget for the year, there are certain things in Ohio that the commissioners are responsible for. You looked at things. You thought, we have to budget for things like bad weather because you have to have more overtime.

One of the things that we always hoped we never have happen was a capital murder case because we know how much that would cost. We had to sit down with all of the other elected officials and say, We have to make cuts across the board and scale back. If we didn't, we were going to be in trouble. Again, our Constitution says you shall balance your budget.

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Mr. LATTA. Again, this is a problem we are facing. Instead of saying we are going to increase certain budgets by 12 percent over the year before, we have to go back maybe a budget before that and say that is where we need to start the cuts. One of the things that is happening with small businesses across the country, or large businesses, when I go across my district and when I have the opportunity, I try to go to as many factories and businesses as I can. And when I am talking to these individuals, I like to find out what is happening to them.

But they like to ask this one question: We have cut way back to keep our doors open; what have you done in the Federal Government to help along these lines?

I think one of the interesting trips I was in was at a factory in my district. I went into the plant and they had to scale back. They had to unfortunately cut employees. But at the same time they were in there saying we had to reduce the number of hours people were working. So maybe it was not 40-plus hours, but it was a 32-hour work week. Then they said we have to make sure that management does their share. They were cut 10-20 percent in their salary. And management was cleaning the restrooms in the factory to try to help do anything to scale back on costs that they would pay someone else to do.

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Mr. LATTA. Again, I think we would have heard it if something like that would have happened. But at this stage of the game, the Federal Government has a trump card some people think, and that we control the printing presses for putting out money. The big problem is we watch dollars being put out, but at the same time the United States Treasury is out there at an auction, and at that auction you have the Federal Reserve buying it, and all of a sudden we are monetizing our debt. We are moving one IOU from one pocket to the other. We are not accomplishing anything. We are not cutting anything. And we watch expenses keep rolling up.

The American people understand that what we do at home when we sit around our kitchen tables and you get out the family budget and say these are the things that we are going to have to pay for. It is the question of wants and needs. There is a big difference between what I want and what I absolutely need. I think the Federal Government has got to go to what is needed, and we are going to have to start scaling back immediately.

I am sure you have students and constituents who come here. When I had a group of students here today on the Capitol steps, and I look at these kids, juniors or seniors in high school, I look at what their future is for the next 10 years, and I don't care if it is $20.3 trillion in debt or $26 trillion in debt, according to the Treasury, we are in trouble.

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Mr. LATTA. I thank the gentlelady. I think what you are looking at is from the small business owners. They understand right off the bat that something has to be done. They understand that they have had to make deep, deep cuts.

Until recently, I served on the Budget Committee, and you are still a member. Sitting through those hearings with the Congressional Budget Office director or the Office of Management and Budget director or Secretary Geithner or when we heard from Mr. Bernanke, we heard the same thing: we are on an unsustainable growth of spending in this country. It has got to be stopped. They don't offer a solution, but it is a very simple solution: you don't spend what you don't have.

I was one of 19 grandkids on my maternal side. I will never forget my grandmother, the good German farm woman she was, she had a simple saying, that he who goes a borrowing goes a sorrowing. She pretty much made sure that all 19 of us understood that. Again, you don't spend what you don't have because we cannot spend our way out of this mess. If we are going to be doing that, all we are doing right now, and have been doing, is mortgaging the future of the next generation of Americans.

You know, the question when you talk to parents out there and say are your kids going to be better off than you are, most parents don't believe it. They think that their kids are going to have a harder time of it than they have, and that is a bad sign for America's future.

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Mr. LATTA. Well, when you look at these budget projections, you have to have people working. When we are looking at an unemployment rate of 9.7 percent in this country and a little under 11 percent unemployment in the State of Ohio, and we all know what is going to happen later this summer when all of those people who were hired to be census takers, working for the census are going to be back on unemployment, these numbers are going to go right back up because it kind of is a false data time that we are in right now when we are looking at these numbers.

Of course we saw what happened when the unemployment numbers came out and only 41,000 jobs had been created in the private sector, what Wall Street thought of that. They are looking at things are not going well for this economy.

I know you heard these same statements that were projections from the Congressional Budget Office director when he was before the Budget Committee. We are looking at probably 2014 or 2015 before we get back to, and I don't care if you want to say normal employment or normal unemployment in this country. The question is for areas that are hard hit like a lot of parts of Ohio and a lot of parts of the Midwest where manufacturing takes place, what are we going to do in our areas for the next 4 or 5 years with these high unemployment rates? Where are people going to go?

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Mr. LATTA. One of the things that we are talking about, those jobs, and it goes back years ago when I was a county commissioner. You wanted to make sure you had as broad a tax base as possible in your county or State or country. It is like a pyramid. You want as big a base on that as possible. But the thing we were worried about, what happens if? We were losing jobs and we had fewer and fewer people. All of a sudden that starts shifting that base, and pretty soon you have a very small tax base out there of individuals, and you have a lot of other people up on top. It doesn't work.

What we can't have in this country is killing the entrepreneurs. When you look at all of these different scenarios out there, the bills that have come before this Congress, and these are the same people that I talk to in my district. And again, when you are dealing with the largest manufacturing district in the State, 20th largest in the Nation, they are concerned. I hear all the time about the issues out there that will help bring them down, is about the best way to say it.

You know, we have the second highest corporate tax rate in the world. What are we doing about that here? When we talk about the health care costs, a lot of them are saying when they hit that certain magical number, when they get above it, they are asking why do I want to expand if I will be paying more. It won't work. Folks in business understand it. It gets to the point of economics 101 from your first year of college which is the law of diminishing returns. It is the more I work, the more I get taxed, and the less I have; why do it? People aren't going to do that. It is against human nature to do something like that.

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Mr. LATTA. We have to go across the board. If we are going to compete against our foreign competitors, and that is who is out there today. Because when we look at a lot of these regulations that are coming down on businesses, you look at the corporate tax rate and you look at what has happened here with health care, we have seen these numbers coming out today of what is going to happen on the health care side. They are saying you get to keep what you want; well, that is not going to happen for a lot of individuals.

When you look at the regulations, companies are saying we don't have to worry about that if we are someplace else. I have had companies that are located in a village or city, and when the EPA puts a mandate in for water or sewer, but the parent company is some place outside the State, and they are told if their rates go up to a certain amount and they are no longer profitable in their area, well that company is going to be moved. When you are looking at losing 300 jobs or 400 jobs or 600 jobs, that is totally unacceptable.

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Mr. LATTA. That happens all of the time, unfortunately. We have situations where we are competing. I know years ago when I was a county commissioner, we were competing against many other parts of the State of Ohio or maybe someplace in southern Michigan or eastern Indiana. In a short 20-year period, now we are competing with somebody 8,000, 12,000 miles away. If they are in a situation where they have lower labor cost, and if they have lower cost for their electricity or other fuel costs, and we are all for clean air and clean water, but if they are in certain areas where there is no concern for that, and we have heard under the cap-and-trade legislation, if we did everything that was asked for under this piece of legislation that passed out of the House, in 8 years there would be absolutely no difference in CO2 emissions. Why, because China and India would be making that amount up. But at the same time, we would have lost all of those jobs in this country. Those jobs would have moved someplace else.

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Mr. LATTA. I thank the lady for yielding.

This is the problem you run into. In my opinion, I truly believe that the United States has the greatest workforce in the world. We have the best trained workforce. We have the best educated workforce, but we just need to be put on an equal footing. And when companies understand that--you know, it's just like with that small entrepreneur.

If they toil day after day--I knew somebody that, to get their company started, they had a small bed that could roll up in their office. And his wife would come in and help work, and she slept on the couch. But, you know, they put hours and hours and hours into that business, first of all, to get it off the ground, to grow it, and then to make it successful.

But if you put the roadblocks in front of these people, you know, some folks aren't going to be as steadfast as they were, and they are going to say, You know what? It's just not worth it. Why kill myself? And I think that, again, it's the spirit of entrepreneurism in this country that makes this country work.

It's like when I talk to these kids on the Capitol steps. You know, why did a lot of our relatives ever get on--some people's relatives came on the Mayflower. Most of ours came on the Poorflower. And when people got off that boat, and my relatives came down by barge on the Ohio River, and they came up the canal system, and they cleared the land, and they started farming in Putnam County in Ohio. They had a desire. They wanted land. They wanted to grow that land. They wanted to make sure that they had something not only for themselves but for their kids. They wanted a future. And I think that's what we are losing track of in this body and in this Congress, that what's happened is that it's no longer about the future, but too many are thinking, ``It's about me.'' And the problem with ``me'' is we are not growing it. And we have to grow the ``we'' and the ``us'' to make this country successful.

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Mr. LATTA. Well, you have touched on something when you are talking about the death tax, the estate tax. And, you know, when you are talking about something going from having zero death tax this year, which won't ever happen because, you know, there will be a retroactive clause put in somewhere saying that they are never going to let people off the hook, and they are going to say anybody that passed away this year, somehow they will try to bring them back up, and I am sure the lawsuits will begin.

But you are right about a couple things right off the bat. You know, family businesses, family farms, I know it's difficult for some folks when you are only looking at a very small percentage of about less than 2 percent of Americans now that make their livelihoods from the farm. And when you go to your local county

fairs and you go to look at these implements and the costs, and when you are talking about a $425,000 combine with one head, or you are looking at a couple hundred thousand dollars for a tractor, and you start adding all these pieces of machinery up. People say, well, if you have got a couple million dollars you are rich. Well, most farmers that I know are land rich and cash poor.

And what happens in a lot of cases or a small business, what do they have to do? Well, number one, okay, they have to start doing estate planning early on. And I am an attorney by trade. But when you start talking about that we have to tell the American people they have to expend millions and billions of dollars when it comes to estate planning or doing the taxes every year, we should simplify this. But, also, we shouldn't be taking what they have worked hard for. And when people are out there thinking, Is it going to be worth it in the end?

Because this will be--you know, if we get to a point in this country, people are going to say, You know what? If the government's going to take it in the end and I can't pass it on, what are they going to do? Either, A, I am not going to work that hard, or, B, I am just going to spend it. And if they spend it, what's going to be the result of that? They are going to say, Government, you take care of me now. I am not going to worry about my livelihood or I am not going to worry about down the road when it's time for me to retire. Just have the government take care of me. And that's not going to work.

So, you know, we have got to keep this entrepreneurship. We have got to make sure that people in this country have the ability and the thought that they can succeed. You know, a lot of people sometimes are jealous of people that come here as new immigrants to this country, but the thing that they know is they come to this country like a lot of our ancestors did. They want to make something of themselves. They want to make something of their future. They want to have something for their kids. But when you kill that entrepreneurial spirit, that's when the beginning of the end becomes.

And you know, it's kind of interesting. There used to be a saying years ago before the fall of the Soviet Union that the people pretended to work and the government pretended to pay them. And we never want to have that happen in this country, where people get to the thought that there is this hopelessness, that there is no reason to do it. We want to make sure that the people have the ability in this country to get ahead.

And I yield to the lady.

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Mr. LATTA. Thank you very much for yielding, and again, you go back to the Responsibility Investment Act again, you were talking about cutting taxes here and what we can do to really get things moving. Again, if you get rid of and make permanent the repeal of the death tax, well, what happens? People are going to say, now I can invest that money back into the business instead of going out saying, how am I going to try to soften the blow when the taxes finally come, you know, through buying insurance or, you know, going to multiple years of tax planning on how you're going to get this thing done?

And I'm sure everybody this year is going crazy with the thought that the death tax comes screaming back at the $1 million level at the end of this year, and you have a lot of folks with their A and their B trusts already funded where they're supposed to be, and they're going to say, now what am I supposed to do? So it's right back doing what? You know, it's not just the money that people invest, it is also the time. If you think how much time is invested by businesses to try to figure out how they have to cope with all these taxes and regulations out there, I think that that's one of the important things out there.

Again, in a piece of legislation that I have on the Responsibility Investment Act, again, repealing that death tax, we're talking about what we can do on the small business side. You know, if we're doing a 20 percent cut for small businesses and 20 percent tax cut for businesses, that's going to allow those businesses to take up to a 20 percent deduction equal to their income. And it's regardless of whether they're paying corporate or personal income tax.

So those are things we have to do to try to make sure that we get businesses back moving in this country again, and again, we just can't expect folks out there to say, you know what, I'm going to work like a dog 24 hours a day, 7 days a week for X number of years to try to get this off the ground and then have to watch it all be taken away from me.

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Mr. LATTA. I thank the gentlelady for yielding and a couple of your earlier points, you know, you were talking about pay here in Washington. I've got a bill that hasn't had any hearings, and what that bill says is that there are no COLAs anymore for Congress. If you think you deserve a pay raise, then you should introduce a piece of legislation saying that, and what this bill would do is say no more COLAs, period. We wouldn't have a 1-year freeze or a 2-year freeze; this bill would say no more COLAs.

Again, going back to what you said on that interest on that debt, and I mentioned a little bit earlier about going back to the early 1980s, with that 21.5 percent interest rate that people experienced. I was first starting to practice law that year, and I'll never forget, we had to do land contracts. And what a land contract, of course, is, say you want to buy my house, well, you couldn't go to the bank and get a loan because you couldn't borrow any money. So I would have to, as the owner of the home, would sell you the house. We would have a contract that you pay me the principal and interest over about a 3-year period of time, and hopefully, at the end of that 3 years, then you would find a bank that you could go out to and get a loan from.

We don't want to see this go back, like I said, to where we had 21.5 percent interest. We don't want to go back to have some businesses out there at over 26 percent. When the Federal Government is out there, as you said, you know, if they have to start raising the interest rates to make it more profitable or for either the country--of course, right now, we know $3.7 trillion of our debt is owned by foreign countries, and you know, we're only seeing that only grow, where they will control more of our public debt than anybody else.

So it's important that we get this under control because we cannot have interest rates that high into future. Businesses will stagnate. Businesses will not have the ability to go out and borrow money. And that's what we're going to be looking at. We'll be staring that in the face in a very short period of time, and what we need to make sure is that businesses can go down to that local bank on the corner, that people can go down to that bank on the corner and draw money and also loan money from that bank because, again, if we're in a situation that we were, you know, having learned that a lifetime ago already, not too many years, but back in a situation that we would be in where we were before, we can't compete.

And something else I guess we're kind of forgetting, when you look back on some of these statistics, maybe 10, 20, or 30 years ago, the United States was pretty much at the top of the heap. We could make some odd, dumb mistakes along the line, but we could correct them pretty quick because we controlled about everything. Not anymore. When you're looking where the Chinese want to be in the next 10 to 15 years and where other global competitors are, we're not going to be there. So that's why the United States and this Congress cannot misstep at any time, from now or into the future, because our future, not only for this generation but the generations to follow, are at stake.

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Mr. LATTA. I would just like to conclude on a statement that was made as you talk about Americans getting re-involved.

Again, when I speak to the students on our steps here at the United States Capitol, I can't think of a better place to tell kids what they have to do. But one of the interesting things, especially when I have seniors in high school and I say, how many of you are registered to vote, I remember one day we had about 100 students out there, and I probably had maybe 20 percent of the kids sheepishly start trying to raise their hands. They were going to put them down and I said, wait a minute, leave your hands up. I said, I want everyone to look at who has their hands up because they're going to be making the decisions for you. I said, if you want to participate in this great experiment, you have got to be registered, you have got to be involved.

It kind of goes back to what Benjamin Franklin said. It was reported when he left the Constitutional Convention--it was very contentious--a lot of people think it was just fine and dandy. They showed up in Philadelphia starting in May of 1787 and they wrote this great document. But it was hard-pressed, hard work, and they got it done. And when Franklin left, a woman asked him as he left, she said, Mr. Franklin, what have you given us? And he said, ``A republic if you can keep it.''

I yield back.

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