Providing for Consideration of HR 2576, Modifying Income Calculation for Health Care Programs, and Providing for Consideration of HR 674, Withholding Repeal and Job Creation Act

Floor Speech

Mr. LANKFORD. Mr. Speaker, I rise in support of the rule and the underlying bill, H.R. 674, which repeals the 3 percent withholding requirements on State and local governments for goods and services. The 3 percent withholding requirement is just another layer of burden and unfunded mandates on our States, cities, counties, and private entities.

Withholding 3 percent of a contract at the start just in case sets a horrible precedent. When we find a bad actor in the contracting community, we should have aggressive prosecution, suspension, and debarment. But, we should not have a national policy that assumes every contractor in America is a tax cheat. It's a dreadful policy, and it's horrible economics.

Let me break this down to what it will mean for communities in my State of Oklahoma. In Oklahoma City, it will cost between $75,000 and $250,000 to implement the initial financial system and all of the modifications to comply with these rules. After that, it's expected to cost at least $15,000 a year to maintain those modifications in the financial system.

To ensure that Oklahoma City fully complies with these mandates to maintain the financial system, Oklahoma City estimates that they're going to have to hire two additional full-time employees. Now I understand that we're all about job creation here, but our job creation should focus on goods and services and taking care of people, not filling out even more Federal forms.

In Edmond, Oklahoma, they're concerned as to how the 3 percent withholding requirement would eventually be passed along to the buyer, increasing the overall cost. Edmond's annual contractual services expenditures line is over $130 million this year. If the cost of these products and services are increased by 3 percent to cover the withholding costs, Edmond's expenditures could be raised by $4 million. Worse yet, that could mean contractors choosing not to bid on city and local projects, ultimately decreasing competition and increasing the cost.

A contractor in the small town of Tecumseh, Oklahoma, told me that with a down economy, he only had a 2 percent profit margin last year. The 3 percent requirement would stifle his cash flow and would force him to increase his bids, which of course would be passed along to the taxpayer.

Mr. Speaker, as we continue to find ways to kick-start our economy and encourage job growth in the private sector, I'm hopeful we can come to a bipartisan agreement to reduce the regulatory burden on State and local governments and encourage private sector growth. I'm sure it was well intentioned at the start, but it is time to eliminate this burdensome regulation.

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