Phil Crane

Mr. CRANE

Mr. CRANE. Mr. Speaker, my distinguished colleague from the Committee on Ways and Means, Mr. Matsui, and I today are introducing legislation to prohibit the Department of Treasury from issuing any regulations dealing with hybrid transactions under subpart F of the Internal Revenue Code. The bill will further instruct the Secretary of the Treasury to conduct a study of the tax treatment of hybrid transactions and, after receiving input from the public, to submit the report to the House Committee on Ways and Means and the Senate Committee on Finance. The subpart F provisions found in the Code have a direct impact on the competitiveness of U.S. businesses in the global marketplace. Historically, Congress has moved carefully when making changes to those sections of the Code pertaining to international taxation. Unwarranted or injudicious action in these areas can have substantial impact on U.S. businesses operating abroad. With this in mind, I was very concerned when the Treasury Department issued Notice 98-11 earlier this year to restrict the use of hybrid transactions, which Treasury suggested were being used ``to circumvent the purposes of subpart F.'' Treasury's actions caused Mr. Matsui, me and many others to question the regulatory process Treasury intended to use to change the policy. Both Chairman Archer and Ranking Democrat Rangel wrote Treasury Secretary Rubin to express their concern over the policy Treasury was suggesting as well as the means by which it was implementing the change. Rather than asking Congress to consider possible changes, Treasury was, in effect, legislating by executive fiat. Following up the letters from Messrs. Archer and Rangel, Mr. Matsui and I joined 31 fellow members of the Ways and Means Committee in asking Treasury to withdraw the regulations in order for Congress to have an opportunity to review the issues. After receiving this input from Congress and the business community, Treasury did issue Notice 98-35, which withdrew Notice 98-11. However, the issue remains unresolved as Notice 98-35 still leaves Treasury with the option of issuing binding rules regarding hybrid transactions. And, although the rules will not be finalized before January 1, 2000, they will be effective for payments made on or after June 19, 1998. Because Treasury still retains this option to issue regulations and, in effect, legislate in this area, I believe Congress must act to protect its Constitutional prerogative. With regard to the policy, I am concerned that proposed changes to hybrid transactions would increase foreign taxes on U.S. companies operating abroad--thus putting U.S. companies at a competitive disadvantage with their foreign competitors. Congress just simplified some of the subpart F rules in the Taxpayer Relief Act of 1997, and these, or similar, proposed regulations would be inconsistent with recent Congressional action. Lastly, this policy raises the question as to why the U.S. Treasury Department is so concerned about helping to generate revenue for the coffers of other countries. I look forward to the study and input from the Department of Treasury on the issue of modifications to the subpart F provisions in the Code. Regardless of the merits of the proposed changes to the subpart F policy, we must not allow Treasury to move forward with regulations until Congress determines the appropriate course of action. The bill we introduce today will allow for that judicious process to go forward and I urge my colleagues to join with us in cosponsoring this bill.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I salute my good friend and long-time colleague and political neighbor, Sid Yates, as he comes to the end of a most remarkable career in the House of Representatives. It was an incredible fifty years ago that Sid first won his seat in Congress. I was a high school senior at the time, undecided about my future in the post World War II period. Over the years since, both Sid and I have worked hard together in support of numerous projects involving many issues for the betterment of Illinois citizens. And I must say that Chicagoans have long been appreciative of Sid's remarkable ability as Chairman of the Interior Subcommittee on Appropriations to bring to the Windy City large allocations of funds for many important projects. Literally he has been able to win billions for the city and for Illinois in projects such as the Chicago Shoreline Project, the Navy Pier Restoration Project, the Indiana Dunes Land Acquisition Project, the Chicago Cultural Center--in addition to many specific public works projects of importance to Chicago. Moreover, as one of this country's earliest environmentalists, Sid Yates will be remembered fondly by many across the land as the prime mover in the creation of many national parks, as well as in the preservation of wildernesses, scenic rivers, seashore and lakeshore projects, for all Americans to enjoy. Each one of these projects stands as a testimony to Sid's long dedication to keep America beautiful. These are just some of the accomplishments of my good friend who has represented the Ninth District of Illinois so ably and for so many years. His record has continually won him the admiration of his Congressional colleagues, who will surely miss him in the years ahead. Because we were of different political parties, Sid and I have not always, of course, concurred on all the issues. Over the years, we have particularly had disagreement regarding the NEA. However, all of our exchanges of opinions on the floor have always been marked by cordiality and comity. Indeed I have always enjoyed our debates in the House chamber. I rise with my fellow Illinois delegation members to salute Sidney Yates for his incomparable half-century of dedication and accomplishment in the halls of Congress--a most admirable record which should well serve as a model for new members as they arrive and take up their tasks in this hallowed House. We hope he will find time on occasion to grace the House floor with this presence, so that those of us who remain may be reminded that his many past examples of collegiality and hard work should still remain important to this body.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I am especially pleased to join with my colleagues in honoring our long-time fellow member and comrade-in-arms, Joe McDade. It was with genuine regret that we heard Joe had decided to call a halt to his long and distinguished career in this legislative body. His leadership in hundreds of floor debates over these thirty-five years has left its mark on a great deal of the legislation that has passed into law. His work in the Appropriations Committee over that time has won him the admiration and gratitude of both Republicans and Democrats, and members on both sides of the aisle have often found themselves endebted to Joe McDade's highly effective legislative skills. A great many of us in this body have found him to be receptive to our needs and hardworking and dedicated in his efforts to see that important bills were successfully legislated. He has clearly served the constituents of the 10th Congressional District of Pennsylvania with particular distinction, and in their gratitude for his leadership, they have returned him to the House time and again for a truly remarkable three and a half decades. In all of his dealings with his colleagues, Joe's genial manner and Irish good humor has won him the warm friendship of members in both parties. May he be rewarded in his retirement with further challenging interests, insights and projects. Perhaps we can look forward to his producing a book or two, giving us his perspective on what has really happened on the Hill during this last turbulent one-third of a century, and offering some advice to all of us in our search for better and more effective legislation. Joe's departure will clearly leave a void in this Congress, and we hope he will make a point of returning to visit the floor on many occasions so that his mere presence will remind us again that collegiality and hard work continue to be all important in this body. Joe McDade, I rise with your fellow members in saluting you for your thirty-five years of real accomplishment and dedication in the service of your fellow Americans. You will remain an inspiration for those who will follow in your footsteps from the great state of Pennsylvania! We are more than confident you will find many more congenial friendships and rewarding opportunities throughout the coming salad days of your retirement. You will be missed! God bless!

Mr. CRANE

Mr. CRANE. Mr. Speaker, I rise in support of the Taxpayer Relief Act of 1998. I am particularly proud of the fact that this tax cut measure is the first in our new era of surpluses in the federal budget. I have advocated that we in Congress use the budget surplus for debt reduction and tax relief, but not for more spending. The Taxpayer Relief Act of 1998 and the accompanying Save Social Security Act do just that. While protecting the budget surplus from Washington's big spenders, we are using 10 percent of the surplus for valuable tax cuts now while reserving 90 percent to committing to the protection of Social Security for the future. While I would have preferred more tax relief for Americans, this modest bill packs a great deal of punch. For example, the bill centers on a proposal which begins our attack on the marriage tax penalty by increasing the standard deduction for married couples. America's seniors will also see benefits as this bill raises the Social Security earnings limit. Our military personnel will benefit from a provision which makes it easier for them to sell their home when they are forced to move in the course of their service to our country. This tax bill includes several proposals that I have advocated for years and that small businesses have been yearning for--including the ability for the self-employed to deduct 100 percent of their health insurance. The estate or death tax relief from last year's tax cut bill will be accelerated so that family-owned businesses can take advantage of this relief starting next year. The Taxpayer Relief Act begins the process of simplifying the tax code. By providing the marriage penalty relief, an exclusion from taxes on small amounts of interest and dividend income and by adjusting the alternative minimum tax rules, millions of Americans will have a much easier time filing their taxes. As Chairman of the Ways and Means Trade Subcommittee, I want to make particular mention of the extension of the Generalized System of Preferences or GSP made possible in this bill. GSP is a valuable program that assists developing countries with trade rather than foreign aid--a concept I heartily endorse. In contrast to the Republican plan of utilizing the budget surplus for debt reduction, tax relief and preserving Social Security, the Democrats want to spend the budget surplus now and postpone tax cuts for an indefinite time. The Democrat plan would prevent tax relief to married couples, small businesses and America's seniors. Their cries as protectors of the Social Security trust funds should ring hollow in light of their decades of fiscal irresponsibility when they controlled the House as the majority. I urge my colleagues to reject the Democrat plan. I commend Chairman Archer on his efforts in crafting this bill, look forward to providing more tax relief to Americans next year and urge my colleagues to support H.R. 4579.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. One more quote: ``As we enter the 21st century, the global economy requires us to seek opportunity, not just at home but in all of the markets of the world. We must shape this global economy, not shrink from it.'' That again is President William Clinton in this Chamber in January of this year. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Virginia (Mr. Davis).

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume to remind our distinguished ranking minority member that there was obviously something substantive in this bill when he voted for it in committee. I am sorry that the gentleman changed his position with the passage of time, because we need that kind of important bipartisan support. Mr. Speaker, I yield 2 minutes to our distinguished colleague, the gentleman from Minnesota (Mr. Ramstad).

Mr. CRANE. Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Shaw), our distinguished colleague on the Committee on Ways and Means.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I would simply like to remind all of the colleagues in this Chamber that the gentlewoman's concern about that escalation of our imports is not an invalid one. As we all know, yesterday we vastly increased the import of skilled labor because we lack labor in this country to meet all of the job requests. Mr. Speaker, I yield 1\1/2\ minutes to the 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 distinguished gentleman from Ohio (Mr. Portman).

Mr. CRANE. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, I have another quote for everyone that, interestingly enough, is germane to our current situation in the Florida Keys. ``And I think we should say to all the people we are trying to represent here that preparing for a far-off storm that may reach our shores is far wiser than ignoring the thunder until the clouds are just overhead.'' That was a reference to some of the economic problems with our trading partners in Asia, and again part of the State of the Union message by President Clinton in this body in January of this year. Mr. Speaker, I yield 2 minutes to the distinguished gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I would remind our colleagues that job relocation has always been a component of trade. Because of NAFTA, the Department of Labor estimated that we did lose 125,000 jobs, but only 10,000 of those people took advantage of the NAFTA retraining benefits. That was over the span of three years. We create more than 125,000 jobs every two weeks. We have been, primarily because of the advancement of free trade. Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Michigan (Mr. Camp). (Mr. CAMP asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. One more quote, Mr. Speaker, to our distinguished colleagues across the aisle. ``In the last 5 years we have led the way in opening new markets with 240 trade agreements that remove foreign barriers to products bearing the proud stamp, `Made in the U.S.A.,' Mr. Traficant. Today record high exports account for fully one-third of our economic growth. I want to keep them going, because that is the way to keep America growing and to advance a safer, more stable world.'' President William Clinton in this Chamber in January of this year. Mr. Speaker, I yield 2 minutes to the gentlewoman from Connecticut (Mrs. Johnson), our distinguished colleague on the Committee on Ways and Means.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, in response to our distinguished minority leader on the Subcommittee on Trade, I would remind him that there are important contents in the Archer amendment to H.R. 2621. They deal not just with agriculture. There is one, for example, that insists that the President, with respect to any trade agreement implemented under trade authorities procedures, submit to Congress a report describing the extent to which the parties to that trade agreement have in effect laws governing exploitative child labor. There is a new provision on agriculture, a special 301 procedure for identifying in a report trade barriers and countries that deny fair and equitable market access, and that impose unjustified sanitary and phytosanitary standards against U.S. agricultural products. One month after the report is issued, USTR would be required to identify priority foreign countries against which it would initiate section 301 unfair trade practice investigations, resulting in possible trade sanctions against the offending country. It also requires that the President establish a task force to review conditions along the U.S.-Mexico border relating to housing, labor, the environment, and other relevant issues. Mr. Speaker, I would remind my colleagues on the other side of the aisle of a statement that was made in this Chamber back in January. ``We all know in every way in life change is not always easy, but we have to decide whether we are going to try to hold it back and hide from it or reap its benefits. Remember the big picture here. While we have been entering into hundreds of new trade agreements, we have been creating millions of new jobs. So this year we will forge new partnerships with Latin America, Asia, and Europe, and we should pass the new African Trade Act. It has bipartisan support. I also renew my request for the fast track negotiating authority necessary to open more new markets and create more new jobs, which every president has had for two decades.'' That was President Clinton in his State of the Union message here. Mr. Speaker, I yield 2 minutes to our distinguished colleague, the gentleman from Texas (Mr. Delay).

Mr. CRANE. Mr. Speaker, I yield three minutes to the distinguished gentleman from Oregon (Mr. Smith).

Mr. CRANE. Mr. Speaker, I yield 1 minute to our distinguished colleague, the gentleman from California (Mr. Calvert).

Mr. CRANE. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from California (Mr. Dreier).

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would say to my colleague that in my lifetime as a child before World War II, I was child labor at the farm. We got paid 10 cents an hour, worked 10 hours a day to make a dollar, six days a week, and we were ecstatic. We had no indoor plumbing and had no electricity either. But we made a tremendous transition upward nationwide from that time. That was in the State of Indiana, I might remind the gentleman too. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Michigan (Mr. Upton).

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to pass on another quote two to our colleagues this evening. ``I think we should seek to advance worker and environmental standards around the world. I have made it abundantly clear that it should be part of our trade agenda. But we cannot influence other countries' decisions if we send them a message that we are backing away from trade with them.'' Again, President Clinton in January of this year in this chamber. Mr. Speaker, I yield one minute to the gentleman from Washington (Mr. Nethercutt).

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to remind my colleague, again, the gentleman from I think it is Poland, Ohio (Mr. Traficant), I would like to remind him that we have been at full employment for now 3 years in a row, and that the fastest growing component of our national economy has been trade. It has been the most productive. That is what we are putting at risk when we contemplate terminating international trade agreements. I would remind my colleague also that the Constitution says that on trade issues we are the ultimate judge. Under fast track, we are still the ultimate judge. We make the input all along the way, we look at the final product, and then we vote it up or down, so it is exclusively within our jurisdiction. I would urge the gentleman to reconsider his misguided policy. Mr. Speaker, I yield 2 minutes to my distinguished colleague, the gentleman from Arizona (Mr. Kolbe)

Mr. CRANE. Mr. Speaker, I ask unanimous consent for an additional 5 minutes for a special bipartisan purpose.

Mr. CRANE. I thank the gentlewoman. Mr. Speaker, I yield 1 minute to our distinguished colleague, the gentleman from Maryland (Mr. Bartlett). (Mr. BARTLETT of Maryland asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Kansas (Mr. Ryun).

Mr. CRANE. That is correct.

Mr. CRANE. Mr. Speaker, I yield 2 minutes to our distinguished colleague, the gentleman from Nebraska (Mr. Barrett).

Mr. CRANE. Mr. Speaker, I yield a minute and a half to our distinguished colleague, the gentleman from Minnesota (Mr. Gutknecht).