Phil Crane

Mr. CRANE

Mr. CRANE. Mr. Chairman, I make a point of order that the language contained on page 76, lines 10 through 13, constitutes an unauthorized appropriation in violation of clause 2 of House rule XXI. Mr. Chairman, the language I have specified is an appropriation of $10 million for necessary expenses of the National Endowment for the Arts. Authorization in law for the National Endowment for the Arts expired in fiscal year 1993. Mr. Chairman, specifically, clause 2(a) of House rule XXI states, ``No appropriation shall be reported in a general appropriation bill for any expenditure not previously authorized by law.'' Mr. Chairman, since the National Endowment for the Arts is clearly not authorized in law, and the bill includes an appropriation of funds for this agency, I make a point of order that the language is in obvious violation of clause 2 of rule XXI.

Mr. CRANE. I do insist on my point of order, Mr. Chairman.

Mr. CRANE. Mr. Chairman, I rise for a point of order.

Mr. CRANE. Mr. Chairman, I respectfully like the approach of the gentleman from Illinois [Mr. Yates] to this issue, and I know he has fought valiantly through the years. But, as I indicated, these are the rules of the House; and as a result of that, I still adhere to the point of order that I made, Mr. Chairman.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield myself 30 seconds to respond to my colleague across the aisle. Show me any projection out over 10 years, whether it is Treasury, CBO, Joint Committee on Taxation, that is on target. What I said before, though, was the Joint Committee on Taxation at least is comprised of bipartisan membership in contrast to Treasury. Mr. Speaker, I reserve the balance of my time.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Let me reiterate one point that I made before. It has to do with indexation of the Tax Code. Indexation of the Tax Code was one of the most profound, fair, and proper things that we did in our Tax Code when we did it back in 1981. It eliminated that subtle, disguised means of steadily imposing increasing taxes on all working Americans unbeknown to them. It was a clever gimmick. Whoever thought it up, we have to give the guy credit because people did not seem to catch on to that for a generation. But indexation of capital gains is something that is essential to guarantee that we are not going to reverse what we are trying to do with this package, and that is to provide tax relief 5 years out. You reverse that and you vote for the elimination of indexing of capital gains, what you are calling for is an increase in taxes that you are trying to produce at that time. You want to start raising taxes again. Many of you, I am sure, were not here in 1980, but on the other hand I am sure you all have a vivid recollection of Jimmy Carter's last year, what the inflation rate was in that single year, 14.6-percent. It could happen again. That was a 14.6 percent increase in taxes on all Americans through this hidden, devious means of inflation of our currency. I would urge all of our colleagues to support and preserve and protect indexation of our entire Tax Code. Mr. Speaker, I yield back the balance of my time.

Mr. CRANE. Mr. Speaker, I yield 30 seconds to the gentleman from New Jersey [Mr. Saxton].

Mr. CRANE. Mr. Speaker, I yield myself 30 seconds. With respect to item 3(c) relating to graduate teaching assistance with respect to tuition waivers, it is expected that the conferees will clarify that no change in current law will apply to tuition remissions for graduate students. There was no intention on the part of the House to change the treatment of graduate students. Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey [Mr. Saxton].

Mr. CRANE. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, I would simply like to remind my distinguished colleague that it is the lack of discipline in this body and the body across the Chamber here, of the Capitol Building, that is responsible for that escalation of spending beyond control. We have increased taxes dramatically. In fact, just in the decade of the 1980's we doubled total revenues from $500 billion to $1 trillion, and yet our national debt combined to escalate astronomically because of the lack of discipline here. I would urge colleagues to keep that in mind. Mr. Speaker, I yield 3 minutes to our distinguished colleague, the gentleman from Michigan [Mr. Camp].

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I have appreciated listening to some of the discussion on the other side of the aisle, notwithstanding the fact I think they misunderstand what the real source of the problem is. There was an interesting article that Milton Friedman recently wrote in the Wall Street Journal where he was pointing out the parallels in terms of average per capita income in this country versus that of Hong Kong, tiny little Hong Kong with 6 million people and the United States with 260 million and all the resources we have available here. In that article, he pointed out that, to be sure, our average annual income rates exceed those of Hong Kong. But if Hong Kong continues to function as it has, that is going to end in about 2 more years because of the astronomical growth there. The main distinction he made in his article was that their average per capita or payment of taxes, rather, as a percentage of GDP is 15 percent; ours averages 50 percent already in this country, and we are long overdue for significant tax relief, and put that money to work. In addition to that, another distressing thing is to hear some of the figures quoted on the other side of the aisle coming from the Department of Treasury. Treasury is unbiased in making its submissions? We have the Joint Committee on Taxation, which is a nonpartisan organization that did the analysis of the economic impact of the tax figures that we were working with in committee, and the Joint Committee on Taxation showed that in contrast to what the Democrats were touting at the time we passed the bill out of committee that our tax bill would give 93 percent of the tax relief to people making under $100,000 a year, and roughly 72 percent of that tax relief goes to people making under $75,000 a year. And by contrast, the figures that our distinguished ranking minority member held up representing what their proposal would do, it only gave 70 percent of that relief to people making under $100,000 a year, and that was based on Treasury figures, biased figures, if my colleagues will. I submit to my colleagues the Joint Committee on Taxation is a better reference source for making an analysis of these things. Let me touch upon one other issue though, and that has to do with the objections we have heard from the administration and from some of our colleagues on the other side of the aisle about indexation, preserving indexation that is provided now for capital gains. I fought for indexation of the Tax Code for over 25 years in this body, and I did not originate the idea, I got it from Milton Friedman, the distinguished economic scholar who formerly taught at the University of Chicago. And as Friedman explained back there a generation ago, absent indexation, what we are doing is permitting the Government to raise taxes in a subtle and undetectable way, and they do that by destroying the integrity of this piece of paper. They say up here this note is legal tender, good for all debts, public and private. If we have a steady erosion of the integrity of that piece of paper, what we are experiencing over time is a progressive tax increase. And in 1981, mercifully we got incorporated in that monumental Tax Reform Act of that time, indexation of most of our Code so that people did not keep getting ratcheted into higher brackets with no improvement in their earning power, but rather the destruction of the integrity in the purchasing power of that piece of paper. Now I tell my colleagues some people are extremely sensitive about this issue, and those are people that trace their roots in German history back to that period when their government totally destroyed the integrity of those pieces of paper over there. When I taught history back 30 years ago, I used to have in my wallet a 50 mark note that was printed in Germany in 1914, about that size, fine quality paper, fine engraving, the ratio was about 4 to 1. And then I showed those kids a little piece of paper that size, printed just 9 years later. They did not even bother to print it on both sides. It was a 500 million mark note, and no German would have bent over to pick one of those out of the gutter. Mr. Speaker, they had totally destroyed the integrity of their currency, and in the process they taxed their people out of existence, wiped out all of their savings, all of their investments, all their insurance, everything, and we all know the history that followed: that man with a charismatic appeal coming down the pike on his white horse, promising hope and salvation. Mr. Speaker, we cannot blame the Germans in that state of desperation for falling for that appeal, but the fact of the matter is even though he was featured on the cover of Time magazine in the mid-1930's as Man of the Year--and why? Because he had restored a sound currency, he built the autobahn and he put them all in VW's. We all know the rest of that story. Mr. Speaker, I am telling my colleagues that indexation of that Tax Code is the only way we can protect individual citizens against this very clever, but very insidious means of imposing increased taxes on individuals without them realizing it. Keep in mind that in 1970 President Nixon took us off the gold standard, and he did because the world price of gold had at that point jumped to about $45 an ounce, and this piece of paper was redeemable still at $35 an ounce. One could turn their paper in and get gold in return. Gold today is $350 an ounce, and that is a commentary on the insidious erosion of the integrity of this piece of paper that has gone on as a result of inflation through the years, a hidden tax, if my colleagues will, and that is why it is absolutely essential that we preserve indexation of capital gains that is long overdue so that those people who were doing the things we were all counseled to do as kids, and that is to not blow it all at the end of the week on instant gratification, put something away for that proverbial rainy day. Do that, and get hammered repeatedly under our stupid absurd Tax Code, but this is especially true with investments that are made in the capital gains that are realized. So if we want to enjoy a reduction in capital gains taxes, than guarantee that it stays in place, and we guarantee it stays in place by indexing that into the future. Mr. Speaker, I yield 3 minutes to our colleague, the gentleman from Louisiana [Mr. McCrery].

Mr. CRANE

Mr. CRANE. Mr. Speaker, I thank the gentleman for yielding me this time, and I will try to compress a lot in 1 minute. One of the things that struck my mind is there was $10 million provided for of continued funding for NEA, and with their 20 percent overhead costs, that leaves $8 million for distribution. That $8 million for distribution I think we can probably raise out of the pockets at least of those colleagues here who are such staunch supporters of the NEA. One of the things that concerns me about it is the maldistribution of NEA funds. The majority of those funds go to D.C., New York, and L.A. My district is significantly larger than D.C. in population. We got $5,000. But Washington, DC, got double what my whole State of Illinois got. It is a good old boy network. It is time to terminate that and depend upon the voluntary contributions totaling $9.5 billion a year out of the pockets voluntarily of citizens.

Mr. CRANE

Mr. CRANE. Mr. Speaker, on rollcall No. 235, on agreeing to the Rohrabacher amendment, had I been present, I would have voted ``aye.''

Mr. CRANE

Mr. CRANE. Mr. Chairman, I rise in enthusiastic support of this bill to provide long-overdue tax relief to the American people. I have heard criticisms of this bill primarily from liberals who are playing the old tired game of class warfare. I find their arguments-- that this tax relief is unfairly targeted to the rich--rather ridiculous. These class warfare antagonists are from the same crowd who in 1993 rammed through the largest tax increase in the history of our Republic. It is no wonder that they are resisting the attempt by House Republicans to allow Americans to keep more of their own money, rather than sending it to Washington's bureaucrats. The liberal misinformation campaign about this tax package is so out of touch with reality that they are alienating their overtaxed rank and file constituents. The fact of the matter is that the vast majority of the tax relief in this bill is provided for individuals, not corporations. More specifically, over 71 percent of the tax relief in this bill will go to those who earn between $20,000 and $75,000 a year. I do not know what some of my liberal colleagues consider the rich, but a family earning $40,000 a year with two children living in Palatine, IL, a city in my district, is far from rich. Let me put this in another perspective. It has been 16 years since American taxpayers have had a significant tax cut from Washington. President Clinton signed the largest tax increase in history in 1993 and when vetoed a major tax cut bill, the Balanced Budget Act, in 1995. All the while, middle-income families have shouldered the largest tax burden than at any other time in our history. A family at the median income level budgets over half of their annual income to pay for government at all levels. Tax relief for them is long overdue. I am pleased to see a number of items in this bill that I have been working on for some time. For example, I have promoted legislation to increase the value of the tax exemption for children and other dependents. The $500-per-child tax credit will give parents this tax relief I have sought for so long. In addition, I have pushed for capital gains tax relief, provided in this bill, which is so valuable to home and small business owners. I also support the relief in this bill from the estate or death tax which has been particularly devastating on family farms and small businesses. I would rather abolish the capital gains and death taxes, but I believe this bill makes significant improvements in both areas. While the bulk of this bill provides tax cuts to individuals, employers also receive some much-needed tax relief. And let me make it clear that tax relief for businesses is about job creation, competitiveness in world markets, and more money in the pockets of American workers. Although the Constitution protects its citizens from double jeopardy in criminal cases, the Tax Code offers no similar protection. The alternative-minimum-tax [AMT] forces businesses into double jeopardy with two different sets of tax rules, the regular corporate schedule and the AMT schedule. If, after following the complex rules and regulations in the corporate tax code, the company does not owe enough taxes, they must start all over with the AMT code, with its own rules and regulations. The compliance costs, in addition to the tax burden, has hurt the competitiveness of U.S. businesses against foreign businesses. This translates into lost jobs and lower wages for American workers. H.R. 2014 provides some much-needed relief from the burdens of the AMT. If I had any criticism of this bill, it is that it does not provide as much tax relief as the American people deserve. I also appreciate the view of those who suggest that this bill does not provide for Tax Code simplification. I, too, am disappointed on both of these counts, but given the current political situation in Washington, we must deal with a President who, despite his rhetoric, is not interested in providing large-scale tax relief or reform to our country. Given these constraints, I believe that Chairman Bill Archer of our Committee on Ways and Means did an admirable job in constructing this tax bill. I urge my colleagues to support H.R. 2014 and I look forward to moving ahead and meeting with members of the other body to put the finishing touches on tax relief for Americans. I only hope that the President will see fit to sign this bill into law.

Mr. CRANE

Mr. CRANE. Mr. Speaker, on rollcall No. 236, on final passage of H.R. 1119, had I been present, I would have voted ``aye.''

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Nebraska [Mr. Bereuter]. (Mr. BEREUTER asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield 2 minutes to the gentlewoman from Kentucky [Mrs. Northup].

Mr. CRANE. Mr. Speaker, I yield 1 minute to our distinguished colleague, the gentleman from Illinois [Mr. Ewing].

Mr. CRANE. Mr. Speaker, pursuant to the order of yesterday, I call up the joint resolution (H.J. Res. 79) disapproving the extension of nondiscriminatory treatment--most-favored-nation treatment--to the products of the People's Republic of China, and ask for its immediate consideration in the House.

Mr. CRANE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous matter on House Joint Resolution 79.

Mr. CRANE. Mr. Speaker, I ask unanimous consent to yield one-half of my time to the gentleman from California [Mr. Matsui] in opposition to the resolution, and I further ask that he be permitted to yield blocks of time.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in opposition to House Joint Resolution 79 because revoking China's MFN trade status would have the effect of severing trade relations between our two countries. My firm belief is that the free exchange of commerce and ideas offers the best hope we have to project the light of freedom into Communist China. In deciding whether to continue MFN trade treatment for China, we must keep two objectives firmly in mind: First, improving the well- being of the Chinese people; and, Second, protecting the U.S. national interests with respect to a country that possesses one-fifth of the world's population and exploding economic growth. This year we have the added responsibility of ensuring that United States policy does not undermine the transition of Hong Kong from British to Chinese sovereignty. All would agree some of the world's most flagrant abuses of human rights and violations of religious and political freedom occur in China. My message today is simple. Change is not coming quickly to this huge nation, but historic advancements are being made. For 20 years after the Communists seized power in 1949, China was largely isolated. This was the era of the Great Leap Forward, when 35 million died of starvation and the Cultural Revolution, which saw hundreds of thousands of Chinese killed in political purges and forced internal exile. Since the economic opening of China by Deng Xiaoping in 1980, living conditions in China have improved vastly. To give some perspective, in 1980, 260 million of China's 1.2 billion people lived in absolute poverty. In 1993 that figure was reduced by about 40 or over 40 percent to $160 million. Chinese citizens can now seek out their own jobs, move around the country, and discuss political matters, as long as they do not directly challenge the Government. Focusing on freedom of worship for a moment, the virulently antireligious policies of the 1960's and 1970's have given way to a society that is open in large measure to the Christian message. Concerned that a few United States Christian organizations are actively advocating the revocation of MFN, a huge coalition of Christian missionaries and evangelical groups with years of experience actually serving in China have sent a powerful message to Congress. Their view is that by severing trade relations in China, it would result in a backlash against the Christian ministry in China, seriously harming their ability to reach the Chinese people. Many would say today that preserving most-favored-nation status puts profit ahead of principle. This viewpoint contradicts what can be observed in the relationship between economic development and the expansion of democracy. Taiwan, South Korea, Singapore, and Hong Kong, to name a few Asian tigers, experienced economic success and rising living standards after opening their economies to international trade. In these countries, the elimination of severe poverty and the emergence of a middle class came well ahead of democratic political reform. President Lee Teng-Hui of Taiwan has said: Vigorous economic development leads to independent thinking. People hope to be able to fully satisfy their free will and see their rights fully protected. And then demand ensues for political reform . . . the model of our quiet revolution will eventually take hold on the Chinese mainland. Clearly China is a special case, but expanding United States commercial relations with China makes Chinese citizens less dependent on the central government for their livelihoods and in a better position to strive for freedom. As wealth is distributed throughout Chinese society, so is political power, away from the central government. Americans doing business in China have contributed to prosperity and at the same time they are continually able to transfer the values and ideals of freedom and democracy through direct contacts. While preserving MFN trade status for China offers hope for improving the welfare of the Chinese people, it is also squarely in the United States national interest. With a fifth of the world's population, China's emergence as a global power early in the next century is a development of immense historical significance. Sharing borders with more countries, 14 to be exact, than any other country in the world, a peaceful China will be key to preserving stability in the Asia-Pacific region. In order to protect national security interests into the next century, the United States must develop a policy that encourages China to be a friend and a valued trading partner, rather than an adversary isolated by comprehensive economic sanctions. Confronting China by revoking MFN would be interpreted by the Chinese leadership as an act of aggression. This would further strengthen the hand of those in China who oppose further reform, prompting behavior we seek to avoid. If House Joint Resolution 79 were enacted into law, relations with the Government of China would deteriorate to the point that virtually all United States influence for the good would be lost. United States businesses which need a presence in China to support a successful Asian strategy would withdraw. Mirror trade sanctions would threaten the paychecks of 180,000 U.S. workers whose jobs are directly dependent on exports to China. Our foreign competitors in Japan and Europe would move briskly into the void created by this bill. The alternative strategy which I support is to maintain trade relations and preserve a basis upon which to negotiate improvements in our relationship with China. Ambassador Barshefsky's successful resolution of the section 301 case against China for failing to protect United States intellectual property rights illustrates the value of preserving normal trade relations. Armed with the authority to raise tariffs in a selective, calibrated manner, Ambassador Barshefsky threatened $2 billion in targeted trade sanctions directly tied to specific, well substantiated violations. The result was an agreement by the Chinese Government to shut down 32 pirate plants and a commitment to undertake expanded enforcement drives in regions where violations of United States intellectual property rights are known to be the highest. Finally, the unanimous view of leaders in Hong Kong, from Governor Chris Patten to the respected activist and chairman of the Hong Kong Democratic Party, Martin Lee, is that any reversal in China's MFN status would strike a devastating blow to the territory. In 1996, over 56 percent of China's exports to the United States and 49 percent of United States exports to China passed through Hong Kong. Denying MFN to China would threaten 70,000 jobs in Hong Kong. At this extraordinarily delicate time, the people of Hong Kong deserve our steady and strong support for renewing China's MFN status. Mr. Speaker, we should continue to participate in the dramatic and historic change that is taking place in China, so we can help shape it in our favor and in a way that supports our allies in Hong Kong and Taiwan in their struggle to preserve freedom. The Reverend Billy Graham, whose son Ned labors as a missionary in China, wrote last week: I am in favor of doing all we can to strengthen our relationship with China and its people. China is rapidly becoming one of the dominant economic and political powers of the world, and I believe it is better to keep China as a friend than to treat it as an adversary. I urge my colleagues to vote ``no'' on House Joint Resolution 79. Mr. Speaker, I reserve the balance of my time

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the gentleman from Texas [Mr. DeLay], our distinguished whip.

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington [Ms. Dunn], our distinguished colleague on the Committee on Ways and Means.

Mr. CRANE. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania [Mr. Pitts]. (Mr. PITTS asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Texas [Mr. Archer], the distinguished chairman of the Committee on Ways and Means.