Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - January 24, 2005)

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By Mrs. HUTCHISON:

S. 24. A bill to establish an emergency reserve fund to provide timely financial assistance in response to domestic disasters and emergencies; to the Committee on the Budget.

Mrs. HUTCHISON. Mr. President, over the past decade, Congress has approved over $46 billion in disaster relief and emergency spending. This is an average of $4.6 billion a year. The majority of this funding--$34 billion--has been provided through supplemental bills, not subject to the normal appropriations process.

Supporters of supplemental spending suggest it provides Congress flexibility to respond to emergencies and to priorities that did not receive the proper consideration during the budget cycle. While supplemental bills do offer flexibility, they are not always helpful for fiscal responsibility. Millions of dollars are put in emergency spending bills that should go through the regular budget process, adding more and more to the bottom line.

America is at a critical time--we must be prepared to address domestic emergencies without increasing the deficit or being forced to fund non-emergency projects in order to release necessary funds. Supplemental spending circumvents budgetary enforcement mechanisms and can lead lawmakers to under-fund programs in the regular appropriations process, because they know they ultimately can get what is needed through a supplemental.

Supplemental bills allocate funding for emergencies, and we have all witnessed, firsthand, how a natural disaster can impact a country severely. Merely because something is unforeseen does not mean we should not prepare. Congress needs to plan in a manner that is fiscally responsible and procedurally transparent.

Today, I offer a bill to create an emergency fund under the office of the Secretary of the Treasury, in an interest bearing account, containing 1.2 percent of the annual non-defense domestic spending, or roughly $4.6 billion. This will be America's rainy day fund--a savings account ready for almost any potential unforeseen domestic emergencies.

This account is not designed to eliminate the need for supplemental bills but rather lessen the need for them.

Last year, in supplemental spending alone, Congress spent $2.5 billion on disaster relief in America. Domestic discretionary supplemental bills enacted in response to natural disasters, such as hurricanes and earthquakes, rose steadily through the 1990s. Federal Emergency Management Agency, FEMA, was the second-largest recipient of supplemental spending during the 1990s. Supplemental appropriations for ``non-natural'' disasters such as the Los Angeles riots in 1992 and the Oklahoma City bombing in 1995 as well as the September 11 terrorist attack have also demanded quick and efficient funding. History is teaching us a lesson; while we do not know what the emergencies will be, we can feel certain there will be something to which we will need to respond.

Beyond the clear fiscal conservatism we need, I believe this rainy day fund would reduce the time it takes to respond to emergencies by giving Congress a more efficient, less political process. My bill would require the contingency fund to be expended before supplemental spending for domestic disasters can be pursued, with the exclusion of defense spending.

As we seek to be more fiscally responsible, our next step forward should be this account, from which the funds we draw upon are planned for and set aside through the normal appropriations process. Our current system regularly underfunds FEMA and other agencies for emergencies, and this should end.

As we prepare for the future, it is my goal that we save and prepare for the vital needs of our people should there be a domestic emergency. Recent events worldwide demand we be fiscally responsible and procedurally capable of this, our most important duty, the protection and safe-keeping of the American people.

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By Mrs. HUTCHISON (for herself, Mr. FRIST, Ms. CANTWELL, Mr. ENSIGN, Mr. ALEXANDER, and Mr. CORNYN):

S. 27. A bill to amend the Internal Revenue Code of 1986 to make permanent the deduction of State and local general sales taxes; to the Committee on Finance.

Mrs. HUTCHISON. Mr. President, I am pleased to introduce a bill to permanently correct an injustice in the tax code that has harmed citizens in many States of this great Nation.

State and local governments have various alternatives for raising revenue. Some levy income taxes, some use sales taxes, and others use a combination of the two. The citizens who pay State and local income taxes have been able to offset some of what they pay by receiving a deduction on their federal taxes. Before 1986, taxpayers also had the ability to deduct their sales taxes.

The philosophy behind these deductions is simple: people should not have to pay taxes on their taxes. The money that people must give to one level of government should not also be taxed by another level of government.

Unfortunately, citizens of some States were treated differently after 1986 when the deduction for State and local sales taxes was eliminated. This discriminated against those living in States, such as my home State of Texas, with no income taxes. It is important to remember the lack of an income tax does not mean citizens in these States do not pay State taxes; revenues are simply collected differently.

It is unfair to give citizens from some States a deduction for the revenue they provide their State and local governments, while not doing the same for citizens from other States. Federal tax law should not treat people differently on the basis of State residence and differing tax collection methods, and it should not provide an incentive for States to establish income taxes over sales taxes.

This discrepancy had a significant impact on Texas. According to the Texas Comptroller, the ability of taxpayers to deduct their sales taxes will lead to an additional $740 million staying in the hands of Texans each year, the creation of more than 16,500 new jobs, and the addition of $920 million in State economic activity.

Last year, we took an important step by reinstating a sales tax deduction. As a result, everyone now has the opportunity to deduct either their State and local income taxes or sales taxes. For the 55 million of us in the 7 States with a sales tax but no income tax, this means the tax code no longer discriminates against us. Unfortunately, the new deduction is only in effect for 2004 and 2005. We must act to prevent the inequity from returning.

The legislation I am offering today will fix this problem for good by making the State and local sales tax deduction permanent. This will permanently end the discrimination suffered by my fellow Texans and citizens of other States who do not have the option of an income tax deduction.

This legislation is about reestablishing equity to the tax code and defending the important principle of eliminating taxes on taxes. I hope my fellow Senators will support this effort.

I ask unanimous consent that the test of the bill be printed in the RECORD.

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By Mrs. HUTCHISON (for herself, Mr. BROWNBACK, Mr. CORNYN, Mr. BUNNING, Mr. BURNS, Mr. HAGEL, and Mr. ENSIGN):

S. 78. A bill to make permanent marriage penalty relief; to the Committee on Finance.

Ms. HUTCHISON. Mr. President I am pleased to introduce a bill to provide permanent tax relief from the marriage penalty--the most egregious, anti-family provision that has been in the tax code. One of my highest priorities in the U.S. Senate has been to relieve American taxpayers of this punitive burden.

Over the past four years we have made important strides to eliminate this unfair tax and provide marriage penalty relief by raising the standard deduction and enlarging the 15 percent tax bracket for married joint filers to twice that of single filers. Before these provisions were changed, 44 million married couples, including 2.4 million Texas families, paid an average penalty of $1,480.

Enacting marriage penalty relief has been a giant step for tax fairness, but it may be fleeting. Even as married couples use the money they now save to put food on the table and clothes on their children, a tax increase looms in the future. Since the 2001 tax relief bill was restricted, the marriage penalty provisions will only be in effect through 2010. In 2011, marriage will again be a taxable event and 43 percent of married couples will again pay more in taxes unless we act decisively.

Given the challenges many families face in making ends meet, we must make sure we do not backtrack on this important reform.

The benefits of marriage are well established, yet, without marriage penalty relief, the tax code provides a significant disincentive for people to walk down the aisle. Marriage is a fundamental institution in our society and should not be discouraged by the IRS. Children living in a married household are far less likely to live in poverty or to suffer from child abuse. Research indicates they are less likely to be depressed or have developmental problems. Scourges such as adolescent drug use are less common in married families, and married mothers are less likely to be victims of domestic violence.

We should celebrate marriage, not penalize it. The bill I am offering would make marriage penalty relief permanent, because we cannot be satisfied until couples never again must decide between love and money. Marriage should not be a taxable event.

I call on the Senate to finish the job we started to make marriage penalty relief permanent today.

Mr. President, I ask unanimous consent that a copy of the bill be printed in the RECORD.

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