Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

3 Percent Witholding Repeal and Job Creation Act

Floor Speech

Location: Washington, DC


Mr. PAULSEN. I thank the gentleman for yielding.

Mr. Speaker, I also rise in favor of H.R. 674, a bill that will repeal this ill-conceived 3 percent withholding rule for all government contractors, including private hospitals that accept Medicare or Medicaid payments and those who provide even lunches for schools.

This is one area in which Republicans and Democrats are working together, as even President Obama singled out this provision as burdensome to our Nation's job creators. The President, in his jobs plan, he proposed delaying this rule. The very fact that this rule continues to be delayed and has not been implemented since being first created in 2005 just tells you how bad of an idea it truly is. But we shouldn't just delay it; we should eliminate it and repeal it immediately.

I've spoken with many small businesses in my district that will be negatively impacted by this law because the profit margin for many of these companies that have government contracts is right around 3 percent.

One Minnesota company, Valley Paving, says that withholding 3 percent, the new 3 percent withholding law would be catastrophic on their balance sheet, meaning that covering costs, paying bills, and just covering operating costs would be a challenge. And as they point out, during these hard economic times, withholding more money from our small businesses like themselves would be that they most likely would not be able to update their equipment, not grow as fast, and not be able to hire more people.

Mr. Speaker, this goes against everything that Washington should be doing, giving our employers certainty to create more jobs. This law needs to be repealed.

Another contractor in my district, Hardrives, Incorporated, pointed out the Federal Government does not need to be playing banker with our earned income.

This law may have sounded like a good idea on paper but, in practice, it will be disastrous. This is made evident by the cost of the program itself. Implementing it for the Department of Defense alone is estimated to cost about $17 billion over 5 years.

And here's the irony, Mr. Speaker. The program is forecast to bring in a little over $11 billion across the whole spectrum of government. So the program is going to cost more to implement than it will take in.

I strongly urge support of this commonsense approach and bipartisan approach on adopting this bill. The President supports the pay-for.

I thank the member of the Ways and Means Committee, Mr. Herger, and I ask for its support.


Skip to top

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.

Back to top