Benjamin Cardin

Mr. CARDIN

Mr. CARDIN. I thank the gentleman for yielding this time to me. Mr. Speaker, I urge my colleagues to reject this rule. It does not comply with what the Contract With America said, that we are going to have a open debate on tax issues. There is no opportunity for us to offer an amendment. It breaks the promise that we would have specific spending cuts before us before we would be asked to vote on a tax cut. What this bill attempts to do is to use a phony mechanism for saying that we have to pass a budget reconciliation before the tax cuts become effective. But after we do that, the tax cuts become permanent. I hope my colleagues will read the Balanced Budget and Emergency Deficit Control Act of 1985, because that is what we did in 1985 with the Gramm-Rudman proposal. By the way, that bill required us to have a balanced budget by fiscal year 1991. The tax cut in this bill is permanent. The spending cuts are 1 year, and they do not even give us anywhere near the amount of money. Let us do deficit reduction first.

Mr. CARDIN

Mr. CARDIN. Mr. Speaker, I do. Mr. Speaker, this is a very important ruling. It is the first one that the Chair has had to make on the new rule XXI that requires an extraordinary vote on a tax rate increase. The language, as I understand it, is when the Federal tax rate increase applies we need a three-fifths vote. If I understand the potential ruling of the Chair, if the Chair rules that this bill does not raise a rate and therefore does not need an extraordinary vote, what the Chair is saying is that legislation which subjects a larger percentage of a taxpayer's income to an existing tax rate would not be a tax rate increase under the provisions of rule XXI. That would mean that we could effectively raise tax rates in this country by just subjecting a larger amount of a person's income to the tax rate, thereby accomplishing the effect of a tax rate increase under the potential ruling of the Chair without raising the rate. I just really want to point that out to the Chair before he makes his ruling, because effectively if he rules against the gentleman from Virginia [Mr. Moran] rule XXI is meaningless. parliamentary inquiry

Mr. CARDIN. Mr. Chairman, I thank the gentleman for yielding me this time. I oppose this tax cut at this time. Yes, there are some good provisions in the tax cut proposal that help American families. I support some capital gains relief and AMT relief, but there are some very bad things in this bill as well, including the neutral cost recovery system, the raid on the Medicare trust fund, and the relief tilted toward the wealthiest Americans. But the fatal flaw in the tax bill before us is that we must make deficit reduction our first priority. Whatever tax cut we pass, we have to borrow money in order to give the taxes back to our constituents, and that borrowing of additional money will cost our constituents more money. The Republican bill that is before us will cost the American taxpayer an additional $17.7 billion in debt service over the next 5 years in order to pay for the $188 billion of tax relief. The net impact on the deficit will be an increase in the national debt of $206 billion over the next 5 years as a result of the bill that is before us. So let us look at the results during the first 100 days. If you take a look at the specific spending cuts that have been passed in the House so far and what is in the bill before us, if we assume that the welfare reform bill will pass the Senate without change, which is very unlikely, if we assume that the rescission bill will stay at $12 billion net savings, and that will not change, and that will hold during the entire 5 years, if you assume that the other provisions in this bill will be enacted, and if you take the specific tax cuts that are proposed in this bill, you find that what we are doing is increasing the deficit over this period of time. The spending cuts which are in blue are far less than the tax cuts. Let me just give you 2 illustrative years. In 1998 the tax cut will cost the Treasury $35.6 billion, the spending cuts $29.2 billion, a net increase in the debt of $6.4 billion. But go to the year 2002. See what happens when you get a little bit further out, because of the way the tax provisions are worded. The tax cut will cost $87.7 billion, the spending cuts are $51.5 billion, for a net, a net increase in the deficit in the year 2002 at $36.2 billion. We have a major deficit problem. CBO has projected the deficit by the blue columns that you see here; it is scheduled to increase if we do not take action on deficit reduction. If we pass just the bills that have been passed so far in this Congress, in this House, if that is what we do, we are going to find the deficit larger rather than smaller during this period of time. I do not think that is the record that we want to use. Many of these tax-cut provisions will get worse as time goes on. Let me just give you one example. The neutral cost recovery system that gives businesses extraordinary writeoffs raises $16 billion during the first 5 years, but costs $136 billion during the next 5 years when we do not score it, so we take advantage of revenue even though it is going to cost us billions of dollars and create a major problem for the future. The contingency will not work. It is a gimmick, a sham. There is no question about it. The tax cuts are permanent. The spending cuts are only 1 years. We can come back and change, and do not think we will not. Look at the history. Look at the Emergency Deficit and control Act of 1985; when that was passed, the deficit was $212 billion. In 1985 we were supposed to have a balanced budget. That was supposed to give us a balanced budget by the year 1991 with the sequestration, with enforcement. What was the deficit in 1991? It grew from $212 billion to $269 billion. We have the specific tax cuts. We do not have the specific spending cuts. That is why a bipartisan group today opposed this bill under the Concord coalition. That is why a group of business leaders told me yesterday to oppose this bill, do deficit reduction first. The best present we can give our children and the future generations and the businesses and the growth in our economy is to cut the deficit. Vote against this bill. Vote for deficit reduction. Vote for the future of our Nation.

Mr. CARDIN

Mr. CARDIN. I thank the gentleman from New York [Mr. Rangel] for yielding me this time. Mr. Speaker, let me follow up on the point of the conference committee to provide help for the self-employed to extend the 25 percent. It is very important that we extend and provide for the 25 percent deduction for this year. The self-employed are at a disadvantage. They are 1.5 times more likely to be without insurance because of our current tax law. When we changed the tax law in 1986 to provide the self-employed this 25 percent deduction, we found that we got 400,000 more self-employed individuals insured. But I am disappointed we did not go further. Let me explain. The Republicans came to us early in this session and asked for our cooperation to extend for this year only the 25 percent and that we could move that quickly. We agreed. Along with the gentleman from Massachusetts [Mr. Neal], I introduced legislation that would expand the 25 percent starting next year to 80 percent, more comparable to what businesses are able to deduct on their insurance premiums. We were told that we could not consider that in this House. The Committee on Rules refused to make our amendment in order, even though we had a way to pay for it. We were told that we were only going to deal with the 25 percent. The bill goes over to the Senate and it is improved to 30 percent after this year, so a self-employed individual will be able to deduct 30 percent starting next year. That is good, but it is not enough. It should be comparable to what a company can deduct on their insurance. We never had the chance on this side to deal with that issue. I am amazed as to why we were not given that opportunity. The amendment that the gentleman from Massachusetts [Mr. Neal] and I sought to put in order was paid for and increased the amount that the self- employed could deduct starting next year to 80 percent. Although I will support this conference committee, I hope the chairman of the Committee on Ways and Means will revisit this issue so that we can provide for the self-employed fairness and comparability to those who work for companies.

Mr. CARDIN

Mr. CARDIN. Mr. Speaker, the Republicans claim that they will spend 4.5 percent more money on feeding children. They are outraged that we accuse them of cutting spending for kids. But they have a problem. Because they also say they will spend less on food for kids--$6.5 billion less over 5 years. They plan to use the $6.5 billion to pay for tax cuts. The Republicans say they are cutting bureaucrats, not food. But the entire annual cost to administer the Food and Nutrition Service is $146 million. At that rate, if we do not spend any money on bureaucrats, it will take 44 years to save $6.5 billion. So what should the American people believe? The Republicans tell our children they are not cutting their school lunches, but they are using these savings to cut taxes for the wealthy. I think the American people know what to believe.

Mr. CARDIN

Mr. CARDIN. Mr. Speaker, I rise today to pay special tribute to the Signet Bank of Maryland on its 200th anniversary of serving the Baltimore community. Originally established as the Bank of Baltimore on Christmas Eve 1795 by the Maryland General Assembly, Signet Bank of Maryland is the direct descendant of that original bank. For two centuries, the Bank of Baltimore and its descendants have remained on the same site, at the heart and core of Baltimore. The bank has steered a steady and profitable course through the War of 1812, numerous financial panics of the 19th century, the Great Fire of Baltimore in 1904 and the Great Depression. In 1985, Union Trust Bancorp, a descendant of the original Bank of Baltimore, and Bank of Virginia Co. merged to create a $7 billion multibank institution. The name was changed to Signet Banking Corp. a year later. Presently, Signet Bank of Maryland is a full-service commercial bank with 87 locations throughout central Maryland, the Eastern Shore, and the Maryland suburbs of Washington DC. In offering specialized services for retail and commercial banking, international trade finance, trust, asset-based lending and leasing, cash management, real estate, insurance and consumer financing, Signet is an important contributor to the prosperity of Baltimore and Maryland. A subsidiary of Signet Banking Corp., which is approximately a $10 billion multibank holding company, Signet Bank of Maryland and its ancestors have been the financial home for many generations of Baltimoreans. Signet has shared in Maryland's rich history and there is little doubt that it will continue to be a major contributor to our community into the 21st century. I hope my colleagues will join me in extending congratulations to Signet Bank of Maryland in celebrating its 200-year history in Maryland.

Mr. CARDIN

Mr. CARDIN. Mr. Chairman, I want to thank my friend, the gentleman from Florida, for yielding me this time. Mr. Chairman, one of the reasons why the Democrats opposed the motion that allowed the committees to sit during this debate is we wanted people on the floor to hear the debate. Under the guise of a technical amendment, we have an amendment being brought to the floor that will be voted on that dramatically changes how the bill's savings can be used. The bill's savings should be used for deficit reduction. That is our highest priority. But this amendment will allow the moneys to be used for a tax cut. Now, why is that so significant? If you look at H.R. 4, the original bill that was with the Contract With America, that bill provided additional resources for job-training programs, did not produce anywhere near the savings that are in this bill, and that is what was produced by the Republicans. But now we have a different bill, a bill that brings out a lot of so- called savings, but not in order to reduce the deficit but in order to finance the tax cut. Well, my colleagues, we are going to have a chance in this debate to vote for a bill that will reduce the deficit. The substitute that will be offered by the gentleman from Georgia [Mr. Deal] not only will get people off of welfare and get them to work, unlike the Republican bill, by having tough requirements on the individuals to work and on the States to provide job opportunities, but with the Deal bill you will also have a chance, the only chance, to reduce the deficit. So, I urge my colleagues to listen to the debate. This is a critical amendment. If this amendment passes, the only hope that we have in reducing the deficit on the welfare bill will be the bill offered by the gentleman from Georgia [Mr. Deal] that I hope my colleagues will support.

Mr. CARDIN. Mr. Chairman, I yield myself the balance of my time. In closing, let me urge my colleagues to vote against this amendment. It discriminates against parents with young children. There is no enforcement in this bill or by this amendment or the work requirements. There is still a reward in the bill for failure of a State that just knocks people off the rolls and does not provide job opportunity. And, lastly, this amendment does nothing to cure the fact that this bill provides requirements on our States without any funding to take care of it. It is really a large unfunded mandate. I urge my colleagues to defeat the amendment.

Mr. CARDIN. Mr. Chairman, I yield 2 minutes to the gentlewoman from Texas [Ms. Jackson-Lee]. (Ms. JACKSON-LEE asked and was given permission to revise and extend her remarks.)

Mr. CARDIN. Mr. Chairman, I yield such time as she may consume to the gentlewoman from California, [Ms. Pelosi]. (Ms. PELOSI asked and was given permission to revise and extend her remarks.)

Mr. CARDIN. Mr. Chairman, I yield such time as he may consume to the gentleman from Utah [Mr. Orton]. (Mr. ORTON asked and was given permission to revise and extend his remarks.)

Mr. CARDIN. Mr. Chairman, I yield 7 minutes to the gentleman from Missouri [Mr. Clay] and ask unanimous consent that he be allowed to control that time.

Mr. CARDIN. Mr. Chairman, in order to extend debate, I move to strike the last word.

Mr. CARDIN. Mr. Chairman, on behalf of the gentleman from Florida [Mr. Gibbons] I yield 2 minutes to the gentlewoman from North Carolina [Mrs. Clayton].

Mr. CARDIN. Mr. Chairman, as the designee of the gentleman from Florida [Mr. Gibbons], and to extend debate, I move to strike the last word. Mr. Chairman, I yield 5 minutes to the gentleman from Tennessee [Mr. Ford].

Mr. CARDIN

Mr. CARDIN. Mr. Speaker, I thank my friend from West Virginia for yielding time to me. Mr. Speaker, I would urge my colleagues to vote against the motion offered by the distinguished majority leader. It is important for Members to be on the floor as we discuss this most important bill on welfare reform. Let me just give my colleagues one reason. I have listened to my friends on the other side of the aisle talk about the underlying bill as a bill that requires work. I think we need to talk about this. I think that Members need to understand what is in the Republican bill. As I understand it, a person can be on welfare for 2 years, receive cash assistance and not work at all. As I understand, a person can be on cash assistance for 5 years in a State as long as they are complying with a work-related requirement as defined by the State, a work activity. And then there is no sanction against the States if they do not do that. As I understand the bill, there is no requirement on the States to provide any work opportunity for people that are receiving cash assistance. So I do not understand the Republican's statement that this bill requires work. And I think it is important that my colleagues be on the floor of the House, as we talk about this issue and other issues on welfare reform. It is only by that type of debate that we will understand what we are doing in welfare reform. And if we want to get a better bill, it is important for Members to be here on the floor as we debate these important issues. Please vote against the majority leader's motion.

Mr. CARDIN

Mr. CARDIN. I thank the ranking member for yielding this time to me. Mr. Chairman, both Democrats and Republicans want to end the welfare system as we know it today. Both Democrats and Republicans understand the need to enact new legislation. But there is a major difference on how the Democrats and Republicans want to proceed on ending our current welfare system. The Democrats want to require work, to get people off of welfare, to work. The Republicans reward States for doing nothing. The requirements on the States under the Republican bill states that they are successful if they get a person off welfare even if that person does not become employed, even if that person becomes a ward of local government. The Republican bill rewards the States. The Republican bill is weak on work. The Democrat bill is tough on work. Both Democrats and Republicans establish national standards the States must meet in order to participate. Make no mistake about it. It may be a block grant, but the States still have requirements they must meet. The Republican bill micromanages the plans of the States by requiring the States to meet certain tests as they relate to teenage moms, how the States handle family caps. The Democrats establish national standards on work. It requires the individual able-bodied person to work. It requires the States to have programs so that people can work. The Republican bill does not provide the resources to the local governments. Even though H.R. 5 did, there was a change made. The Republicans all of a sudden needed some money for a tax cut. So they cut the program even though they know it is needed. The Democratic bill provides the resources so the States can provide the programs to get people back to work. That is, day care, health care benefits so that welfare people can work. The Republican bill dumps the problems on local governments. We have a clear choice. The Republican bill gets people off of welfare, the Democratic bill gets people off of welfare. The Republican bill gets the people off welfare to nowhere; the Democratic bill gets people off welfare to work. We are going to have a chance to come together, Democrats and Republicans, during this debate. It is called the Deal substitute, sponsored by the gentleman from Georgia [Mr. Deal]. It is an opportunity for us all to come together on a bill that is tough on work, gets people off of welfare but gets them to work, rather than becoming a ward of our local governments. I urge my colleagues to support the bill that will be offered by the gentleman from Georgia, Congressman Deal.

Mr. CARDIN

Mr. CARDIN. Mr. Chairman, I support the Brewster amendment, but I want to make it clear it does not correct the irresponsibility in the provisions of the Contract With America on deficit reduction, because of the way that the proposal for the tax cut will be coming to the floor, and there is still going to be pressure on programs on our most vulnerable in order to finance a tax cut for the most wealthy. In the next 5 years all of us hope we will be doing a lot more than deficit reduction that would be in this lockbox. If we do not cut $188 billion more, which is that the tax cut will take out of the Treasury, if we do not get $188 billion despite the fact we might have some money in the lockbox, the deficit will continue to grow. So this lockbox will not protect us from making sure that our programs that affect our children that we are cutting, that those dollars will, the fact, go to reducing the deficit if we do not address how we are going to finance the $188 billion. This tax cut goes to the most wealthy.

Mr. CARDIN

Mr. CARDIN. Mr. Chairman, although I shall support the amendment to H.R. 1075, offered by Mr. Cox, which will add a noneconomic cap in medical malpractice awards, I do so with major reservations. The $250,000 cap is too low. My State of Maryland which originally enacted a $350,000 cap on noneconomic damages has increased that cap to $500,000. Such an amount is far more reasonable. I also resent the fact that the amendment is being considered without any opportunity for me to submit an amendment to the Cox amendment, No. 12, to raise the cap or for me to submit a separate amendment regarding this subject. My vote in favor of the Cox amendment should be interpreted only to support the inclusion of a cap. I trust the cap will be adequately adjusted by the Senate or in conference.

Mr. CARDIN

Mr. CARDIN. Mr. Chairman, there is no question that the securities litigation system can be improved. Too often, class actions are filed which result in each investor receiving a check for an insubstantial amount such as 50 cents while the attorney who filed the case reaps inordinace fees. Changes to our securities laws must encourage innovation and investment, while at the same time deter white-collar crime and ensure the integrity of the financial markets. It must target frivolous lawsuits and other problems in the litigation process without impairing the ability of defrauded investors to sue. While I support reasonable reforms, time has demonstrated that taxpayers and honest business people can suffer greatly from fraud and improper behavior. Although I supported final passage of H.R. 1058, there were some provisions--were too extreme. I voted in favor of the Securities Litigation Reform Act in order to show support for reform and to push the process forward. However, if the bill returns to the House, in the same form as it is presently drafted, I would find it difficult to support this legislation. My concerns regarding H.R. 1058 include: Elimination of recklessness as a cause of action in securities fraud cases, enhanced pleading requirements which force plaintiffs to establish, before the discovery process occurs, that the defendant acted with the intent to deceive or defraud, requirement for class plaintiff to post a bond covering the legal fees and expenses of the defendants should the class plaintiffs not prevail and severe limitation of cases based on a fraud on the market. Mr. Chairman, we must create reforms which control outrageous securities litigation without hurting investors. I am hopeful that a good compromise bill can be reached in conference with the Senate and that the House of Representatives will have an opportunity to vote on a bill that is reasonable but strong security litigation reform.

Mr. CARDIN

Mr. CARDIN. Mr. Speaker, I rise today to pay tribute to Rosalie and George Eikenberg, who were just named first runner-up of the Knights of Columbus' International Family of the Year Program. The Eikenbergs live in Elkridge, MD and their dedication and commitment to their community and their family are truly inspiring. George Eikenberg worked for American Can Co. for 30 years and the Oles Envelope Co. for 10 years. Rosalie is the cafeteria manager at Thunder Hill Elementary School. They had two natural children and adopted four others. From 1962 to 1985, they opened up their family to care for 42 foster care children, some of whom stayed for long periods of time. In addition to their commitment to their children and foster children, the Eikenbergs have both volunteered their time to make their community a better place to live. In addition to Knights of Columbus and is a member of the board of directors at Mt. St. Joseph High School. He has served as an adult advisor for the CYO, and coached basketball and little league. Rosalie has been equally busy. She is the former president of the mother's club at St. Augustine's School, served on their parish council, and so did George, was president of the PTA at Waterloo Middle School and was chairman of the Title I Program at Elkridge Elementary School and St. Augustine's School. Rosalie and George Eikenberg are an inspiring example to all of us that we can always find the time if we want to make our community a better place. I hope my colleagues will join me in extending congratulations and best wishes to a family that truly is a ``Family of the Year.''

Mr. CARDIN

Mr. CARDIN. Mr. Chairman, I move to strike the last word. Mr. Chairman, I wonder whether the subcommittee chairman would respond to a colloquy.

Mr. CARDIN. I yield to the gentleman from California.

Mr. CARDIN. Mr. Chairman, I am concerned that attorneys representing the Federal Government or any of its entities or instrumentalities in Federal courts not be held to a different standard under rule XI(c) than other attorneys. Is it the intention of the subcommittee chairman that the sanctions in rule XI(c) for filing frivolous claims be applied with equal force?

Mr. CARDIN. I thank the subcommittee chairman, Mr. Chairman. amendment offered by mr. hoke