THE ECONOMY -- (House of Representatives - December 07, 2005)
The SPEAKER pro tempore (Mr. McCaul). Under the Speaker's announced policy of January 4, 2005, the balance of the majority leader's hour is re-allocated to the gentlewoman from Tennessee (Mrs. Blackburn).
Mrs. BLACKBURN. Mr. Speaker, at this time, I would like to yield to the gentlewoman from North Carolina for a couple of minutes. She is going to talk with us about her time on the road this week with the President as the President visited in her area in North Carolina, and she had the opportunity to not only talk tax reforms with the President, but to listen to her constituents in North Carolina and to hear what was on their mind as they enjoyed that visit and as they had prepared for that visit. At this time, I yield to the gentlewoman from North Carolina (Ms. Foxx).
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Mrs. BLACKBURN. Mr. Speaker, I thank the gentlewoman from North Carolina and I thank her for taking the time this week to look at how workers continue educating themselves and preparing and participating in a changing economy, a changing job market.
I mentioned the diversity of experience that comes to this body and what goes into looking at these policies and how we remain competitive, what we need to do to be competitive and the decisions we make, how tax and government budgeting and spending affects the budget. The gentlewoman from North Carolina spent her time in education. Ms. Foxx came to us after working at post-secondary education and looking for avenues to best encourage individuals to become lifelong learners, to continue improving and honing those skills so that they were productive in the job market, and I thank her for her leadership.
I thank her for the time spent with the President and with the North Carolinians this weekend as they were able to showcase their facility and showcase what they are doing to be a leader in being competitive in a global economy.
At this time, I would like to recognize the gentleman from Texas (Mr. Hensarling) who has worked tirelessly not only on budgeting and not only on looking at how we budget, but looking at what happens with tax policy and the ramifications that that has throughout our economy, both for our large businesses, our small businesses and for our families. We appreciate the leadership that he has brought to the budgeting issue, looking at both sides of that ledger, your inflows and your outflows.
Mr. Speaker, I yield to the gentleman from Texas (Mr. Hensarling).
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Mrs. BLACKBURN. If the gentleman will yield, I want us to talk a little more about the deficit dropping, because that is one of the true benefits that we do see from this.
And individuals who are at home and watching and listening to this conversation that we are having tonight, they can go to the Treasury Department Web site, they can go to the Congressional Budget Office and they can pull up these figures so that they can see these are solid figures. These are not our numbers. This is not political spin. These are figures and facts. This is what has been reported.
We know that Federal tax revenues increased in fiscal year 2005 by $274 billion. We know that that is the reason this deficit is $138 billion lower than it had been estimated to be. Now, this is the reason that we are seeing such a change in what the deficit is. This is the reason we are seeing growth.
The gentleman mentioned the policies, the robust economy and what are some of the benefits that come from this. What happens with small business when there is more money left at the end of the month and they can get in there and say, you know, we want to do some things. Business investment. Reinvestment in the business that you own. That is up over 10 percent. It is up over 10 percent. That is men and women that believe in what they are doing.
Mr. PRICE of Georgia. If the gentlewoman will yield.
Mrs. BLACKBURN. I will gladly yield, yes.
Mr. PRICE of Georgia. Mr. Speaker, I appreciate the gentlewoman's pointing out the increase in tax revenue and the gentleman from Texas pointing that out, because it is lost on some folks.
It was not lost on President Kennedy, by the way, nor was it lost on President Reagan, who understood clearly that if you decrease tax rates for individuals and corporations, what happens is that the economy becomes vibrant. It becomes enthusiastic in its zeal. And what happens is that you increase tax revenue.
This is a chart that shows the tax revenue, total tax revenue for the Nation in 2003 of $1.78 trillion. And, remember, that is when the tax relief, the tax cuts went into effect. As the gentlewoman and the gentleman from Texas so clearly stated, now we have tax revenue of $2.14 trillion in 2005. And that is a done deal. That is fiscal year 2005. That year is over. That year is over.
So what we see is a decrease in tax rates for individuals and corporations and an increase in tax revenue. And as has been so clearly stated, if we allow, if Congress allows the Democrat tax increase that they are planning on this week, if we allow that to occur, then what we will see is a decrease in revenue and a decrease in the vibrancy of the economy.
Mrs. BLACKBURN. If the gentleman will yield, let us talk about some of these provisions that are in the bill
that is going to be before us. Because we do not want the Democrat tax increase to take place, and that is why the leadership in this House is working to be certain that we pass our Tax Relief Extension Reconciliation Act. And if individuals are going to go on and look at this, it is House Resolution 4297. I think they would like to see some of the provisions that are in here.
The gentleman from Texas and I have worked long and hard on one provision which is in here, which is continued deductibility of State and local sales taxes from your Federal income tax filing. In my State of Tennessee that is something that is mighty important, because we are one of those great States that does not have a State income tax. We have fought hard in Tennessee to be sure that we stay income-tax free, and we are.
We want to continue this deduction. It is a deduction that we worked hard last year to get restored, and we thank another gentleman from Texas, Mr. Brady, for his incredible leadership on this issue, and we thank the leadership of the House for working so closely with us on it. But that sales tax deductibility is something we encourage everyone in this body, everyone who is in a State that does not have a State income tax to support this legislation tomorrow because it is so important to the individuals in our States. It is estimated that in Tennessee this is worth about $1 billion a year to the State of Tennessee.
Mr. PRICE of Georgia. If the gentlewoman will yield, I want to get this straight, because I think it is incredibly important for the American people to understand what is going to happen this week in the House.
As I heard the gentlewoman say, if an individual in this Chamber votes ``no'' on H.R. 4297, that means that they want to see the American people not be able to deduct sales tax, State and local sales tax?
Mrs. BLACKBURN. If the gentleman will yield, yes, for those of us in nonincome tax States that means that you are voting to take that deduction away from them.
Another one that you would be voting to take away is the above-the-line deduction for out-of-pocket teacher-classroom expenses. Extending that deduction for our Nation's teachers is included in this bill.
I have so many of my friends that I went through college with who are teachers, and many of them have been teaching for about 30 years now. This is something that is important to them, because they spend a lot of their out-of-pocket money buying little things, buying little things that are going to enrich the classroom day.
The above-the-line deduction for higher education expenses, as I was saying earlier, the research and development tax credit, now that is something that is so important to our companies in this country. When you talk about the BioShield projects, biotech developments in agricultural products, in pharmaceuticals, when you talk about technology and the needs that we have there for our Nation's first responders, for our military, all of that comes in research and development.
When you talk about looking at what businesses are investing in as they are working, our small business manufacturers, whose output is up for the first time in a couple of decades, they are investing in this research and development to build a better mousetrap.
Mr. Speaker, I yield to the gentleman from Texas for comment on this.
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Mrs. BLACKBURN. Mr. Speaker, the gentleman is exactly right because that is what it would be. At this time of year, coming in and voting a tax increase, voting a tax increase on our Nation's small businesses, voting a tax increase on our Nation's families. To us, that is unacceptable. We know that the rate of economic growth in this Nation, the jobs growth, has shown that the tax reforms that have been passed work and they yield results.
Another provision that is included in this bill is the welfare-to-work tax credit. As the gentleman from Texas was saying, individuals who may not have had a job are able to get a job because of the growth we are seeing in the small business sector. And the welfare-to-work tax credit for those businesses that are hiring individuals who have received public assistance for an extended period of time, that would go away. So then it becomes a tax increase on those businesses if they are no longer able to avail themselves of that.
The 15-year depreciation period for restaurants and for leasehold improvements for that industry, that is included in this bill. I know in so many of my towns in the 7th Congressional District in Tennessee, this is very important to these small businesses. They depend on this. They need this.
Mr. Speaker, I yield to the gentleman from Georgia.
Mr. PRICE of Georgia. Mr. Speaker, I appreciate the gentlewoman pointing out some of the specific provisions of H.R. 4297 that we will be dealing with tomorrow.
I served in the Georgia State legislature, and we worked for years to try to get tax deductibility for teachers for their out-of-pocket expenses. I do not know a single teacher that does not spend some of their own money to kind of fill the hole, to provide some of those items in the classroom, especially in the elementary grades, that make so much more valuable the education that our children receive.
As I understand it, a no vote on H.R. 4297 means you do not want to allow for those deductions, you want to increase taxes on teachers if you vote against this bill? Is that accurate?
Mrs. BLACKBURN. The gentleman is accurate on that. Individuals that vote no on this tomorrow would be voting to increase that on our Nation's teachers. They would be voting no on State sales tax deductibility. They would be voting against that, for all of our constituents in Tennessee and Texas and Washington State and Wyoming and other States across the Nation that enjoy that sales tax deductibility.
Another one they would be voting no on is the savers' tax credit for low-income workers who contribute to retirement savings accounts. We talk about doing things that will assist those who are working and need a hand up and need a little bit of help. Focusing on that savers' tax credit, that is something we want to do and we want to see that continue.
The gentleman from Georgia is exactly right, that is something that is included in this bill, the provisions for our Nation's teachers.
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Mrs. BLACKBURN. Mr. Speaker, there are over 91 million Americans who own shares of stock in companies in this country, 91 million Americans who have invested in that capital creation process, invested in these companies. When we talk about capital gains and dividends, sometimes we think as you are saying, well, that is just somebody else. That does not apply to me. But for individuals that have 401(k)s and retirement plans, yes it does. What we are seeing is that 51 percent of our tax-paying senior citizens are claiming dividend income, and 47 percent of total dividend income earned in America is by senior citizens.
Mr. HENSARLING. Mr. Speaker, over half of Americans are invested in the stock market. They do have some form of dividend or capital gains and it is really their nest egg. Those are the 401(k) plans to help them in their retirement years. That is money that is put away for education for their children, and yet our Democrat colleagues on the other side of the aisle want to tax away that dream. They want to tax away that nest egg by passing a huge tax increase tomorrow. That is over half of Americans in just this one provision. Just this one provision would see a huge tax increase right before Christmas if we do not defeat this Democrat tax increase tomorrow.
Mrs. BLACKBURN. Mr. Speaker, the gentleman is precisely right on that. Again, the bill tomorrow is H.R. 4297. It is the Tax Relief Extension Reconciliation Act, and it is called the tax relief extension because these are reliefs that were passed in 2003. As we have continued to talk through the evening, these are the provisions that have really created this robust economy that we are seeing, 4.1 percent GDP growth just this last quarter. I think it is so important that we keep our focus there. This is a booming economy. This is a growing economy. We are seeing regularly that there is jobs creation that is taking place in our communities.
I love it when I am out in my community, and I know the gentleman from Texas has the same experience, and you are driving down the street and all of a sudden you see an entire group of new stores that are going in. Generally they are small businesses. You walk inside and there is an excitement and energy there that is just indescribable. There is so much of that happening in this Nation's small businesses.
As people have seen their rate of taxation reduced, they have had a little bit more income left with those businesses that they can go back in and reinvest in those businesses, or gather that capital together to start that business or start that small manufacturing plant. That is why we see the business reinvestment dollars up 10 percent. That is why we see jobs creation taking place, why we are seeing over 4 million jobs, 4.46 million jobs created since we started down this path of reforming taxes, reducing those taxes and freeing up free enterprise.
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Mrs. BLACKBURN. A couple of other provisions. Talking about your district and the way this bill tomorrow will affect your district, in this bill, H.R. 4297 tomorrow, there will be a technical correction in there that affects this Nation's songwriters, which of course, so many of them live in my district, and I do believe that they are definitely some of the most creative people and such an important part of our creative community.
But for years, when a songwriter wants to sell their catalog, which is their life's work, it is like selling that small business that Eddie has and that so many of our constituents have, then they have been taxed at ordinary income tax and had to pay self-employment. This is their retirement. This is their nest egg they have pulled together. And a correction that we will make tomorrow will affect so many of those songwriters that are in Memphis and Nashville and down in Austin and in those areas because it will allow those catalogs to be sold and those individuals to pay a capital gains tax like other small business owners, there again, leaving more money and more of that nest egg for them as they retire and as they are seniors, and allowing them to look at how they do things better, how they grow those small businesses. I yield to the gentleman from Texas.
Mr. HENSARLING. And it is just so important that everybody realize this connection between preserving tax relief, preventing a tax increase and preserving our jobs. Again, over 4 million new jobs created in this economy since we passed tax relief. Why would we want to go back? Why would we want to take that tax relief away and pass a huge tax increase, because that affects real people all across America.
Let me give you another example. I talked earlier about the fact that we are enjoying the highest rate of homeownership in the history of the United States of America. I mean, home ownership, part and parcel of the American Dream. Well, somebody has to go out and help renovate those homes and build new homes. And one of those gentleman is in my congressional district back in Texas, a gentleman by the name of Gil Travers of Travers and Company. He is a home builder. Prior to us passing the economic growth legislation with the tax relief, he had just a handful of workers; but once we passed the tax relief, he had to hire extra workers. He hired a lady named Jan, who was unemployed, to help him clean up some of his job sites. She got so busy that she had to hire two people who were unemployed to help her clean up the job site, a gentleman by the name of Calvin and another lady by the name of Christy, all because of tax relief.
And yet this week the Democrats want to raise taxes on Travers and Company Home Builders. They want to jeopardize the pay checks of Jan and Calvin and Christy and replace them with welfare checks, and they call that compassion.
Mrs. BLACKBURN. Talking about our homes and construction and home sales. In October, home sales reached 7.1 units in October. And the thing that is so interesting is that is just off the historic high of home sales which was in June of this year when there were 7.3 units that were built or were sold. So whether it is new homes being built, whether it is existing homes, the home sales, how amazing that we are seeing home sales reaching such high numbers in both the new construction and the existing home sales category. And I yield back to the gentleman from Texas.
Mr. HENSARLING. Well, again, it illustrates just how valuable the tax relief has been to our economy. We have spoken this evening at length about over 4 million new jobs. Four million new jobs in the future that have been created. Four million new paychecks. That is what compassion is all about. Compassion is not measured by the number of welfare checks that are printed in Washington. It is measured by the number of paychecks that are printed all over the United States of America.
Our GDP growth, 2 1/2 years straight where each and every quarter of economic growth has been over 3 percent. We have consumer spending that is advancing, advanced 4.2 percent during the third quarter. Retail sales are up. Real disposable income for our working families is up since we passed the tax relief package in our economic growth legislation. And manufacturing, which has faced many, many challenges in recent years, manufacturing production is continuing to expand. We have increases in productivity, and the list goes on and on and on. And all of this is threatened if we permit the Democrats to offer their Christmas gift to the American people, a huge tax increase; and that is why it is so vital, so vital tomorrow that we do not allow that to happen.
Mrs. BLACKBURN. I thank the gentleman from Texas, and I thank him so much for being here to talk with us tonight about why this is important legislation and why it is important that we stop a tax increase on the American people. And we have talked about so many of these issues tonight.
Mr. Speaker, this economy is booming. Inflation is low. Unemployment is near historic lows. We saw that 4.1 percent growth with the quarter that ended in September of 2005. And I think it is important to realize that this just did not happen. It did not just happen. And I know that my constituents certainly remember the recession the President confronted when he took office, and they remember the impact that September 11 had on our economy. We did not bury our heads in the sand when that happened. We rolled up our sleeves. We got to work. We passed tax reforms and tax relief, and tomorrow is our opportunity to extend that.
Mr. Speaker, I encourage all Members of this body to join us in supporting H.R. 4297 tomorrow.