Conference Report on H.R. 1308, Working Families Tax Relief Act of 2004

CONFERENCE REPORT ON H.R. 1308, WORKING FAMILIES TAX RELIEF ACT OF 2004 -- (House of Representatives - September 23, 2004)

Mr. REYNOLDS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 794 and ask for its immediate consideration.

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Mr. HOLT. Mr. Speaker, I rise today to express my concern about H.R. 1308. The bill before the House today extends many of the tax cuts and tax credits that have wide margins of bipartisan support here in Congress. This includes a 5-year extension of the existing $1,000 family tax credit, marriage penalty relief, and an increase in the size of the 10 percent bracket. This bill also would provide for a 1-year extension of the current Alternative Minimum Tax exemption for married couples. I support all of these credits and extensions for individuals.

There are other good provisions contained within this bill. For example, the bill extends the tax credit for electric vehicles, extends deductions for clean-fuel vehicles, and extends the Research and Development tax credit extension-which I strongly believe should be made. These targeted tax credits would help to make our air cleaner and help our nation's innovative industries achieve advances in both applied and basic research.

However, the total cost of all of this is $146 billion over 10 years and it is paid for with borrowed money. In other words it's money we do not have. What this means is that we are paying for this with money taken out of Social Security and Medicare Trust Fund.

It is disappointing that the Republican majority in this House is not willing to offset the cost of these broadly supported tax benefits. Failure to offset their cost now only means that we will borrow the money necessary and our children and grandchildren will pay for them later.

The Republican majority in this House seems capable only of passing tax reductions, not dealing with the consequences of its irresponsible fiscal policy. We could have paid for this conference report quite easily by taking back a portion of the recent tax reductions enjoyed by couples who earn more than $1 million per year--$500,000 for single individuals. Had we done that, we could have passed this tax cut and still given those at the top of the income ladder a tax cut.

Mr. Speaker, governing is about making choices. Our constituents all across America sent us to Congress to make the tough decisions. They did not send us here so we can pass those decisions on to our children, and they certainly did not send us here to pass the cost of our decisions on to our children.

Mr. Speaker, today the national debt is the largest in history. Americans now collectively owe more than $7 trillion. That is more than $25,000 for every man, woman, and child. Yet rather than paying down this debt and getting our fiscal house in order, this bill would add an additional $146 billion to the debt.

Americans cannot run their own household budgets like this, and Congress is letting them down by its failure to manage money responsibly.

The national debt is not just paper. That debt is owned by other countries. Due to the failed fiscal management of the majority, Americans currently owe about $4 trillion to foreign countries. We owe Japan $607 billion; China-including Hong Kong--$205 billion; the U.K. $137 billion; Taiwan, $50 billion; Germany, $45 billion; OPEC countries, $43 billion; Switzerland, $41 billion; Korea, $37 billion; Mexico, $32 billion; Luxembourg, $26 billion; Canada, $25 billion-the list goes on and on.

More tax cuts without offsets will not only jeopardize critical public services now, but they will also hurt Americans well into the future. Massive deficits crowd out investments in education, healthcare and homeland security. These deep deficits result in increased interest rates that make it expensive for all Americans to buy homes, pay back loans, and raise capital for small businesses.

I believe Chairman Greenspan's comments are appropriate: "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." Just this week, the Federal Reserve raised interest rates. This is proof positive that it already considers that deficit out of control.

Mr. Speaker, there has never been, and there never will be, a nation in the world that has been strong, free, and bankrupt. We need to restore fiscal sanity in our decision making process. We need to make the hard choices that our constituents sent us here to make. And most of all we need to protect the Social Security and Medicare Trust Fund, not spend them and send the check to future generations.

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