K. Conaway

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I appreciate the gentleman sponsoring this hour again tonight. We tend to spend a lot of time trying to scare each other into actions one way or another. I am as guilty as everybody else. It is almost as if whoever of us can scare us the most wins the argument. The truth of the matter is, the policies in place now are helping the economy. We don't have this great economy because of the policy; we have this great economy because we have great men and women throughout the country willing to take risks and work hard, get up every morning to go to work and provide for their families and build this country. That is why it is there. What these policies have done is make their job less difficult. It is not easy. It is hard to make money. In the real world, it is a very difficult prospect to make money. So low tax rates and a consistent tax policy that people can count on help pave the way for that. It makes it less difficult for the hard-working men and women of this country to do what is being done, and that is to grow this economy, and by growing the economy, the tax receipts into this government have increased double digits for the last 2 years, and in all likelihood we may have a double digit increase again this year for a record collection. So that is doing it the right way. As this Congress begins to try to lead toward a different direction, toward a different policy that says bigger government, higher tax rates on these folks, it is my opinion that it will make it much more difficult for the entrepreneurs in this country to continue to do what they do. They will continue to do it in the face of an insurmountable odds, that is just their nature, but by this 1,446 days away, if that does happen the way we think it will, then the tasks of growing this economy, continuing to provide greater opportunities for most Americans, will be much, much more difficult than currently today.

Mr. CONAWAY. Let me just comment on that. Let me make one clarifying point. You said, we are 20 days into this issue. The 18th will be our 14th day. And the first tax increase will come within the first 2 weeks, on the 14th day.

Mr. CONAWAY. I only bring that up because of the emphasis on the first 100 hours. There seems to be some magic about those first 100 legislative hours. And I want to make sure that the record is straight on these numbers.

Mr. CONAWAY. This is on top of the unfunded mandate on small businesses that the minimum wage increase that was done last week will be.

Mr. CONAWAY. American Samoa, which the average rate there is $3.15 an hour. So apparently StarKist wants tuna that pack cheaply instead of good taste.

Mr. CONAWAY. Well, I thank the gentleman from Pennsylvania for letting me join tonight's conversation, and I wanted to speak directly to that tax rate increase vote that will happen on Thursday as a part of what I believe to be a very misguided attempt to punish a segment of our economy that quite frankly is doing a job that all of us want. It would be curious if I could ask all of our colleagues collectively in this House how many of them walked to Washington, D.C. from their home district; actually physically walked, or rode a bicycle from their district here, or horseback, maybe came on horseback or a horse-drawn carriage. Could we get anybody to raise their hand? Even the folks who live right across the river. Ms. Norton, I guess, could say she walks in. But I would say that every single one of our colleagues comes to Washington, D.C. and leaves and goes back to their home districts in a car or an airplane or a train, or some mode of transportation that uses at its core fossil fuels to get us back and forth. The bill on Thursday directly penalizes the folks who provide that resource that we all use every single day. It is hypocritical and two- faced of us to on the one hand say that, yes, we need to be independent of foreign crude oil and foreign natural gas, as our good colleague from Kentucky said, we are sending billions of dollars into the hands of countries and nations that in all likelihood are using some of that money to hurt us, to talk about getting away from that and at the same time, on the other hand, wanting to directly penalize those small producers and large producers in this country that provide the domestic crude oil and natural gas supplies. I have seen some data which shows that the small independent producers in this country in 2005 reinvested 617 percent of their profits back in the ground. Now, think about that: Not 50 percent of what they made, not 70 or 80, but 600-plus percent of what they made back in the ground. So what this legislation will do is take dollars away from them and bring them to Washington, D.C., and albeit they are going to try to sequester those dollars to be used somewhere else, I would argue every dollar we suck out of these producers is a dollar that doesn't go back in the ground or produce domestic crude now, which we need. I don't think anybody argues that we have a short-term problem and we have a long-term problem. The long-term problem with coal gasification and other things, nuclear, whatever they might be, those are long-term solutions. Nobody expects us to be able to put a very big dent in our energy needs in this country in the near term from anything but fossil fuels. And for goodness sakes, why would we begin on Thursday to lay in place the groundwork to penalize those very people who are producing domestic crude oil and domestic natural gas? It is wrongheaded. Now, it makes great drama to be able to beat up on the oil companies. In all fairness, I come from an oil and gas producing province, west Texas. I am very proud of the oil heritage and I am very proud of the supplies of oil and natural gas that those hardworking, risk-taking individuals have provided you and I in this country since Spindletop in Pennsylvania. So it is wrong headed by our Democrat colleagues to want to tax those individuals differently than we tax other manufacturers. The specific codes section, 199, that we are going to snatch the oil and gas producers out of and in effect increase their tax rates, was put in place in 2003 by a Congress that said we need to incent manufacturers in this country, jobs that stay in America. And we are going to do that by a combination of wages paid within the manufacturing environments in this country to affect the tax rate. The idea was to take the corporate rate from 35 percent down to between 32 and 33 percent on manufacturing activities in the United States. And the definition was written intentionally by the Congress to include oil and gas exploration as manufacturing. It also includes timber and other kinds of things that don't normally come to mind when you talk about manufacturing. But the incentives for 199 weren't put in place just for the oil companies. They were put in place for all manufacturers to incent people to produce in America, to produce jobs, to produce products that we can sell and export or use within this country. And now, on Thursday, we are going to have an opportunity to flush out where everybody stands. A lot of rhetoric in October about who is going to do what to whom and all those kinds of things, but Thursday will be our first chance for all of us to decide whether we are tax increasers, or we are against domestic oil and gas production in the near term and in the long term with this specific vote on the bill, H.R. 6, that will be up on Thursday. So I appreciate being able to pitch in on that subject, and I have some other thoughts later on in the evening, but I would yield back to either of my colleagues.

Mr. CONAWAY. Let me comment on what happens, or the mechanics of the exploration business in the domestic arena. I have got some statistics here that just are almost incomprehensible in their scope. E&P is an acronym or initials for exploration and production companies. Those are the folks that take the risk. They start by trying to find rock, underground, sometimes 2 and 3 miles deep, that has the potential for bearing oil and gas. And they do this through a variety of means, through seismic and geology, and sometimes just flat out guessing. But they do their best science at the project to try to determine where oil and gas might occur. Now it doesn't occur everywhere, unfortunately. But it does occur in certain spots. And it starts off with a geologist or a geophysicist or somebody who has an idea that this particular province or this particular area may produce oil and gas. So they spend some up front money trying to decide whether or not there is the potential for oil and gas being in place. They then will send out a land man to acquire the rights to drill in the acreage that they think is prospective. And this land man will go to the land owners and the mineral interest owners and others and he will try to lease this property, lease the mineral rights, lease the ability to drill for oil and gas from each and every one of those. And that can take a great deal of time. Again, more money invested, salaries and travel and other kinds of things trying to put the prospect together. Once they have got the right to drill in the area, then the operator, the person putting this thing together in all likelihood generally does not have the money to risk 100 percent of the well. As an example, we have got some, Barnett Shale Wells in Texas, that it is 4 to $6 million for dry hole costs, meaning you are going to risk 4 to $6 million before you know whether or not there is any oil and gas in that particular horizon. A lot of money at risk. So this operator will go to, let's keep this simple. He will go to three friends in the business and he will say I want you to take a quarter of this deal and I will take a quarter, you take a quarter and a good colleague Mr. Shuster will take a quarter, and let's go find somebody else to take that fourth of it. And together we will share this risk of drilling this prospect. So you put up a million and my good colleague from Kentucky takes petty cash for his million, and I squeeze my cookie jar for my kids, and I get my million together, and we go drill this well. Now, the drilling of the well involves hiring a drilling contractor, because the operator is not going to own any drilling equipment, so he goes out to a drilling contractor to hire the rig on a day rate basis or a footage basis or a turnkey basis, all these kinds of special terms, to actually drill the hole into the ground. And you have got all kinds of service companies that go along with it, pipe and mud and logging and all kinds of equipment and services go into trying to decide whether or not there is oil and natural gas in this rock. And then if there is you do the appropriate test, then you run pipe and you incur additional costs. The completion costs in our example, let's say that is another 2 million. So we have put up our 4 million. Now I have got to come back to you for the other $500,000 each in order to be able to complete the well and begin the process of producing that oil. And right now, all of this is sunk cost. There is no way to recover much of this cost. You can get a little bit of the pipe out of the ground, but most everything else is sunk. And so if we don't produce oil and gas from that well our investment is worthless. I mean, it is just flat out worthless.

Mr. CONAWAY. Gone. And much of the $2 million we spent completing the well will also be gone and there is no way to recover that. So the folks in this business are big time risk takers. Now, let me show you how big time they are. In the 5 years in between 1999 and 2005, I guess that will be 6 years, the smallest U.S. E&P companies reinvested 898 percent of their profits back in the ground. Now what that means is they took their profits, as well as borrowed a lot of money against the reserves that they found in the ground to reinvest in the oil business. All the way up to the super E&P companies, those are the large publicly traded companies that are in the exploration and production business. They have reinvested 247 percent of their profits back in the ground to find additional oil and natural gas reserves. The integrated, U.S. integrated oil companies, the very largest in our country, ExxonMobil, Chevron, Phillips, all these guys, 174 percent of their profits back in the ground. So, as we take dollars, whether in this tax increase that we are going to, however they come out of it, those are dollars that will not go back into the ground to find additional supply of domestic oil and natural gas. And each time we do that, it reduces the investment, it reduces all of the activities that are associated with that. And the bottom line is that we have a shortage of supply of crude oil and natural gas. And the law of supply and demand generally works in most businesses. It clearly works in this business. And if we have a shortage of, as we saw, as Katrina, shortages as a result of natural disasters and other things, you get a spike in prices. Well, we have got a systemic problem with crude oil and natural gas worldwide because, in addition to the supply not going up nearly as fast as the demand is going up, with China becoming an industrialized country and India becoming an industrialized country, the demand for crude oil worldwide has outstripped our ability to produce and increase the production in crude oil. That could be temporarily offset if we could drill in places like Iraq and Iran, where they have let their oil and gas industry languish for lack of investment and upgrading. But even then that would only be a short-term fix. So the impact that this tax rate increase will have on Thursday, if it turns out to be a law, is that there will be less searching for domestic crude oil and natural gas. And it seems counterproductive to me to talk, on the one hand, about reducing our reliance on foreign crude oil and natural gas, and then turn around and penalize and rein in the people who are trying to provide domestic crude oil and natural gas.

Mr. CONAWAY. If the gentleman would yield. One of the things that it was a bit counterintuitive in west Texas, there was no bumper sticker. The old business has gone through a series of booms and busts that, I suspect are typical in most businesses, but they are pretty dramatic in the oil business. In 1986 there was a bust. In the early 1990s there was a bust. Late 1990s there was a bust. In the early 1990s, when the price of crude oil dropped, there was this bumper sticker that said Dear Lord, give us one more boom and we promise not to screw it up. And then we had the real dramatic bust in 1998-1999 where the price of crude went to 10 bucks a barrel for sweet crude, and even less than that for sour crude. Things were really grim. Thousands and thousands of jobs pushed out of the oil business. And so when the prices began to rise, in the early 2000s, and when they began to push past 40 and 50 bucks a barrel and into those ranges there was a real lag in the up tick in activity. Most folks would have said, what do you think the drilling, the number of drilling rigs working in the United States would be if the price of crude oil was 45 bucks a barrel? And when it was at that point, 2002 and 2003 and 2004, most folks would have said, the number of drilling rigs operating in the United States would have been much, much higher than it really was. And the reason for that was there was a real cautiousness on the part of these exploration and production companies as to whether or not that price would really hold, were they going to get a drop in price. So there was a real cautious reinvestment in the business that was going on during that time frame because, quite frankly, the pros in the oil business weren't sure it was going to last. Now, we have been in these prices for a lengthy time now and you are seeing the kinds of drilling rig rates and activities in the domestic production that ought to be happening when you have got prices at this level. So it is a wonderful industry. It provides great jobs. Those jobs provide benefits, and it is a wonderful experience. Most of those jobs are ``living wages,'' is that phrase that is bandied around from time to time. And to penalize them directly on Thursday is wrongheaded and extreme.

Mr. CONAWAY. Looking at the tax cuts for 2001 and 2003, it might be helpful to get into the Record what one of the impacts has been from those, from that tax policy being in place. I may be the only guy in Congress who drags this out once a month, but once a month the Treasury Department publishes a statement of the cash receipts and cash disbursements for the United States Government. It makes for some interesting reading. For the first quarter of fiscal 2007, which was last year's, October, November, December of 2006, the Federal Government's deficit for those 3 months was $119 billion. That is a lot of money. For the equivalent period this year, for the first 3 months, fiscal year 2007, which we have just finished in December, the deficit is $80 billion, so a $40 billion improvement over last year. Why is that? Mostly because tax receipts and government receipts are significantly higher again this year for that quarter than they were last year. Last year was a double-digit increase. The year before that was a double- digit increase in tax receipts. This year we have collected year-to-date from income taxes from individuals, $251 billion, versus $230 billion last year. This year, corporate income taxes are up the first quarter, almost $99 billion versus $81 billion. That has happened because this economy continues to grow. More people are working now than have ever worked. When those folks worked, they paid taxes. That doesn't count the Social Security taxes and all the other excise taxes that come into this Federal Government, but the truth of the matter is this economy is working and working well. Let me brag real quickly on taxes, which might surprise you that I would brag on taxes. In 2003 when our legislature, which meets every other year, came into session, they were facing a $10 billion deficit. The comptroller was projecting the State revenues over the next 2 years, 2003-2004, would be $10 billion short of what the spending was going to be. The Texas legislature dealt with that and that legislature, the senate and the house and the Governor did a great job with it. The legislature that went into session a week ago today in Texas, for this year's biennial, is facing a $15 billion surplus, pretty dramatic turnaround in 4 years. The reason for that is this economy is continuing to jet along and to boom, no matter what the naysayers are talking about. All the angst that is in the American public, when you look at facts, every criterion you look at, this economy is better that it used to be, better than it was this time last year. So the change that was talked about that happened on November 7, I don't think the change, as you said earlier, was to change this economy, to drive people out of work, to reduce homeownership, to increase tax rates on those who do have jobs. I didn't sense anybody campaigning for that. I certainly didn't have any folks in my district come up to me and tell me that is what they wanted to have happen as a result of this change on November 7. I appreciate the gentleman letting me get those facts into the record.

Mr. CONAWAY. If you look at those numbers, we have had tax receipt increases here, but they have come in the right way. They have come in the way where you have had more people paying and all those kinds of things. I am hopeful that the budget that does come forward understands that we have got a spending problem and not a revenue problem. If you are in business, as you did in the car business, and my good friend did in his small businesses, and you are looking at deficits, you rarely have the option of raising revenues when you are in business. Yes, you have got to put more emphasis in sales; you have to do all those kinds of things. But the way you are most assured of being able to deal with your deficit is to cut your expenditures. That is where most responsible businessmen go at first when they are in circumstances where they need to eliminate a deficit. There is more emphasis on the cutting of spending and trimming back on expenditures and then try to do what you can with revenues. It is only in this arena where revenues can magically appear by the signing of a pen without a great deal of hard work to go in and do that.

Mr. CONAWAY. One thing that does happen to you, when you raise the prices of your goods, your competitor across the street, who may not be in the same financial circumstances, keeps his or her price the same. Wouldn't it be interesting if we had some alternative to government, where the folks said, which one of you folks can do the government the best and raising prices in that arena would be much more difficult than we have today, where all it takes is 218 of us on this side and 51 on the other side to make that happen as opposed to hard work and sweat and labor that is usually required for folks to make money in the private sector.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, from the rhetoric we have heard in this House today, it is clear that somebody is going to be negotiating on behalf of Medicare. For my money, I will trust the private enterprise employee who works for that prescription drug plan who is negotiating with the drug companies to get the lowest price in order to be able to lower premiums to the Medicare beneficiary that is going to be paying those premiums. That system is working. That is one side of the negotiation. If H.R. 4 passes today, we will substitute for that free market negotiator a career bureaucrat who keeps their job no matter what happens with respect to the price of drugs. H.R. 4 is a flawed solution to a problem that doesn't exist. I urge my colleagues to vote against it.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I wish to revise and extend my remarks with regard to the vote on H.R. 1--Implementing the 9/11 Commission Recommendations Act of 2007. While I certainly support the goal of this legislation and believe it to be imperative that Congress continue to work with the Administration to ensure the safety and security of our Nation, I could not in good conscience vote in favor of the measure as it was presented. I agree there is still work to be done and it would benefit this Congress to discuss the continued implementation of the recommendations of the 9/11 Commission; however, I believe H.R. 1 contained some critical flaws that prevent it from being a solution to the security dilemmas that we face today. First and foremost, I believe this legislation is fiscally irresponsible. Not only does it create new government spending without providing any offsets, it essentially provides a blank check for these unfunded mandates by authorizing ``such sums as may be necessary'' for an unspecified number of years. Providing effective and common sense security measures is essential; however we cannot do so at the expense of fiscal responsibility and subject our Nation to higher government spending and a greater Federal deficit. Beyond being fiscally irresponsible, I had concerns about the manner in which this legislation was considered. Decisions on matters as grave and enduring as the security and safety of this Nation should not be undertaken hastily or impulsively and should not subvert the normal legislative process. This legislation was not afforded the opportunity to traverse the regular order and be debated on, amended, or considered during the committee process. Further, as no amendments were allowed, it cannot be said that the proposal received a fair and open debate. Further, the 9/11 Commission Recommendations Act contains a provision expressing the Sense of Congress that the Proliferation Security Initiative (PSI) should be authorized by the United Nations. I believe it presents a dangerous situation to allow the UN control over such an important program which restricts the transfer of banned weapons and technology, given that the UN membership includes some of the nations responsible for the violations that PSI seeks to prevent. Finally, I am opposed to the provision that extends collective bargaining guarantees to the employees of the Transportation Security Administration (TSA). It is important to remember this is an idea that was explored during the creation of the TSA as the Homeland Security Act of 2002 was considered and at that time, it was determined it was not in the best interest of the organization and its mission. Unionizing TSA employees would tie the hands of the agency and disallow it the flexibility to deploy its workforce and change the nature of employees' work and locations in response to national emergencies. Again, I want to emphasize for the record that I recognize the critical and serious nature of the business of protecting and securing our Nation and its citizens. However, as previously explained, I could not in good conscience vote for legislation that I do not believe to be an effective or responsible means in which to address these important Issues.

Mr. CONAWAY

Mr. CONAWAY. Let me add one point to what you just said. The bill we passed this evening to make the world quote, unquote, a safer place, which I voted against, one, in my view, of the fatal flaws to that is we don't know how much that costs. There were open- ended blank check authorizations in that bill for so much money and for such time as is needed. So the first rattle out of the box, the first substantive piece of legislation that the other side proposed and put forward had these open-ended spending issues in there. You know, the cost is not necessarily always the determinative factor, but I grew up in a world where I had to ask what things cost, and I suspect most folks do. I factor that into a cost benefit analysis that we all make every single day. It is one of those fatal flaws to the very first piece of legislation that our colleagues on the other side put forward today, of substance. The rules we did last week, that is one thing. But today's piece, couldn't score it from CBO. They don't have a clue what we authorized in terms of new spending, new programs, new dollars that we have to take away from good hardworking Americans. I appreciate the time.

Mr. CONAWAY. Let me just add a little bit to what my good friend is talking about. In 2011, the portion of your estate that is not taxable drops back to $1 million. You know, $1 million sounds like a lot of money, and it is, don't get me wrong. I had a staffer the other day who made the comment that $12 million wasn't much money. And I said, ``Well, who has got a checkbook?'' So one of them got out a personal check, and I said, ``Tear a deposit slip out of that checkbook.'' So they tore it out, and I handed it to the staffer, and I said, ``Put $12 million on that deposit slip.'' And they said, ``Well, it won't fit.'' I said, ``Okay, well, $12 million is a lot.'' One million dollars is a lot of money. But in today's environment, with property values having gone to what they are, it doesn't take a super successful individual to get at that $1 million and much above that when you add in their house and life insurance and those kinds of things. So when the other side talks about the death tax, they typically throw out Warren Buffett or Bill Gates or these other bazillionaires as examples why we need to redistribute that wealth. The truth of the matter is this tax hits smalltown America. I was at dinner tonight with an individual who had some property west of Fort Worth, west of Aledo, actually, maybe in your district, that 4 or 5 years ago was selling for $750 an acre. And because of the growth in population, growth of Aledo and other areas, now that land is $46,000 an acre, and so that family has suddenly gone into a pretty good sizeable estate. Now, it is their money. They took the risk of owning that property. They took the risk of trying to make a living off that property, paying the property taxes year after year after year on that property, and now the Federal Government in January 1, 2011, becomes a 55 percent partner in that deal. This is the one tax that I think is just fundamentally wrong. We are always going to have taxes collected in some way or another. We have got to find the minimum amount of money needed to fund the Federal Government, and that has got to be taxes. But the death tax ought to be one that we wean ourselves from and get away from it because it is fundamentally flawed. It is unfair, and it is really one that hurts small America, and it has generational ripple effects. You and I both have constituents who tell us time and again they are paying for their own property a second and third time because when grand-dad died, they had to borrow money to pay it off. They just got that paid off, and then their dad died and passed it down, they had to borrow money to pay the estate taxes, and now they have got it paid off. So that cycle is just flat out fundamentally unfair.

Mr. CONAWAY. Let me just, on your point, most business, every business, has to decide what they are going to charge for their product or their service. It is one of those key decisions every business manager has to make. Because if they set their prices too high, they will not sell enough units. Obviously if they set it too low, they will not make as much money as they should. So most times the businesses decide to lower that price in order to get volume up, in order to sell more. The Federal Government doesn't exactly do that; but the truth of the matter is, if we do raise taxes, you will get a short-term blip; tell people, until that begins to act, in effect a fine on doing well, and having a negative impact on the economy. Businesses have to make that decision, and I think the Federal Government ought to be in that same mind-set as well.

Mr. CONAWAY. Let me mention one other tax that is out there; we will talk about the national sales tax on another night. But the alternative minimum tax is another tax that we in the Republican majority basically kicked the can down the road a year at a time; this Congress under the Democratic leadership will have to do the same thing because it is a tax increase that is on the horizon that requires Congress to do something or the tax comes in. We were unable to put a permanent fix in place, and full or fair disclosure. I actually had to pay the alternative minimum tax this year, and it ticked me off.

Mr. CONAWAY. Yes, and that number grows. So in addition to these taxes expiring on their own, the fix on the alternative minimum tax has got to be removed and/or a permanent fix put in place, which will be quite daunting for anyone to get done, particularly in a Congress, which my sense is they would rather increase taxes than deal with the tough decisions of cutting spending.

Mr. CONAWAY. I thank my colleague for doing this hour tonight. And if I really want to put the colleagues in the House to sleep, we can talk about Internal Revenue Code sections and those kind of things. I will have you dozing off quickly.

Mr. CONAWAY. Exactly, something that most everybody understands. When I came to Congress, actually, my first race was against my good colleague, Randy Neugebauer. He and I campaigned against each other and, quite frankly, campaigned the way Republicans ought to campaign against each other, and that is why you should vote for me, and he stuck to why you should vote for him. And one of the reasons that I thought folks should vote for me was that I thought the small business mind set or experiences were underrepresented in Congress. Now, I hadn't done any empirical research. I just made that up. It sounded good. I thought, from having watched the way things going on out here, I just thought it was the case. But Randy won the first one. He was a small business guy. He won that first race, and then I was fortunate enough to win a race, and we now serve together. And I suspect he has found, like I did, that that was a lot truer than I had even thought about; that there really is a real lack of appreciation of how hard it is to make a buck. Not to denigrate anybody's path to this place, but I think folks who have worked in the real business world, who have, as you said, met payrolls and been responsible for both sides of a budget; it is easy to budget if you are in government and all you are worried about is how much you spent because you know that you can collect it from somebody. You have got a sheriff someplace that will go collect it if need be. We have got a big gun that we will point at folks and take that money away from them. But in business, you have got to worry about both sides. You have got to figure out how to do some service or put together some product that you can sell to somebody else for a profit. And then you have got to hold your costs down and all those kinds of things, all those decisions that go into that. I had 32-plus years in business as a CPA. I had a, from a variety of clients, from really big clients to really small mom-and-pop shops. We have got a colleague that is going to talk in a little bit that is a doctor. One of the closest things that I had to being a doctor-like experience and telling somebody they have had a terminal illness was each year when I would have to go to my dad, who ran a small business in the oil field service company, and tell him what his taxes were going to be. I dreaded that like the plague because it was my fault. I was his accountant. And even though the Congress and the Internal Revenue Code were done by Congress and implemented by the Internal Revenue Service, I was the bad guy. I had to go tell my dad that he owed more money in taxes than he really wanted to pay. And he would constantly say, well, how do I not pay those taxes? How do I get out of doing that? I heard an interesting phrase the other day that fines are a tax on criminal activity; taxes are fines on successful activities. Every time we spend a buck in here, and we spend a lot of bucks, $2.7 trillion, I try to not lose sight how hard it is for us to, for whoever that taxpayer out there that we collected that buck from, how hard it was for them to make that money. I live in West Texas where oil and gas is a big deal. And part of my background is working as a rough neck on drilling companies for drilling rigs. And when we spend money, I think about that rough neck working morning tower for a drilling company. In the winter, it is cold and miserable and wet and nasty, and in the summer time, it is hot and dry and miserable. Hard work. I am talking labor. Now we sometimes refer to what we do in this body as work. But folks, this is not work. This is a job. This is something we do. Work is when you are outside doing physical labor. And I have done some of that, and I went to college so I didn't have to keep doing that. But I think about how hard that person works to earn the money that we then take taxes away from him to help do whatever it is we do. Most of what we do appears important. Some of what we do is not important, and we shouldn't do it. And that is where we ought to be about the process of reducing the amount of money that we take away from people and spend. But I keep thinking about that guy working morning tower and how hard it is for him to earn a dollar so that we can take $0.20 of it or $0.50 of it, whatever it is we decide to take in our infinite wisdom from him as a result of his or her hard work. We will hear over the next 2 years as we talk about this stealth tax increase that is coming, that is either the capital gains rate going up or the various family-friendly things that we did in 2001, 2003, or the death tax that comes roaring back in 2011; we will hear the Democrats talk about, ``well, we are going to fix it for the little guy. We are going to not raise taxes on the small taxpayer and all those kinds of folks.'' That is a class warfare issue that I think is unworthy of us. As we begin to kind of differentiate between good folks who make money and bad folks who make money based on the amount of money they make, I think it is unworthy of us. Let's try to not do that because successful people are the ones who invest. They are the ones who create businesses. They are the ones that make money that can provide jobs. The times that I have had to go look for a job, it has been very few, but the times I have gone to look for a job, I have not gone to somebody that was losing money to ask for a job. Only the Federal Government can lose money and still hire new people. Every small business out there, every medium-size business, most big businesses quit hiring people if they are not making money. Only in the Federal Government do we have the luxury of continuing to hire folks when in fact we are in a deficit spending that we have been on in the last several years. In an attempt to, well, before I start that, I spent 2 years on the Budget Committee and listened to some of our good colleagues on the other side talk, day after day in those hearings about their proposals for PAYGO, their proposals for reducing the deficit, all those kinds of things. Every single one of those conversations, either overtly or as a sub plot to those conversations, was a tax increase. It wasn't about spending less money, because at the same time they were talking about reducing the deficit, they would propose billions of dollars of additional spending within the budget that we were trying to pass. So the idea that we can only fix the deficit by raising taxes is misplaced. We don't have a tax revenue problem in this Federal Government. We collected a record amount of revenues for the Federal Government in fiscal year 2006, up double digits from the collection record in 2005, which was up double digits from the collections in 2004. We have got a spending problem. And I have got some, a couple of proposals that I want to talk about which may not be exactly on point with what Mr. Shuster wants to talk about tonight. But one of them is a ``no new programs'' agenda. This was a rule to the House rules that, you know, I hate to whine like the rest of us, but we had no input in the House rules. But I introduced a House rule the other day that said, if you are going to propose a new program of some sort, then, as a part of that enacting legislation, you actually have to eliminate another program of equal or greater spending; the idea being that if we have come up with the newest great new idea, that I ought to find somewhere else in the Federal activities that there is a program that is less important than my new one. The idea being is, if I can't find something that is less important than my new program, then what I am effectively telling the taxpayers of this country is this new program is the least important thing the Federal Government could do. And for goodness sake, why would we do that? And so the idea is to help us begin to set priorities. Talk is cheap, and we all, both sides, talk about setting priorities and all those kinds of things. But this would help put some teeth in the idea of forcing Congress to make choices between two good things. I am not talking about good and bad. Anybody can make those decisions. But we have got to make choices between two good things a lot of times as to where we spend our money. Families do that. Businesses do that. And all of us have to do that, except at the Federal Government level. So in an attempt to help us learn how to set priorities, this ``no new programs'' would be a small step in that direction. The other thing that I have done and I have actually got two of the Blue Dogs to cosponsor, original cosponsors on my savings and appropriations concept. If we come in here, and our experiences so far with the Democrats is that the rule under which we debate things that we are passing has not provided us opportunities to amend them. I mean, it is a closed rule. We did it to them; they are doing it to us. That is just kind of the way it works. But on appropriation bills, those are the one opportunity that we have where the Rules Committee is not in between us and what needs to get done. And with all due deference to my former member of the Rules Committee, this is an opportunity for those of us on the floor to suggest changes in the appropriations process that we think are appropriate. Under the current scheme, if we amend an appropriations bill to reduce the spending in that bill, common sense would say that that money doesn't get spent. That is not how this system works. That money goes back to the committee and is spent somewhere else. So while we are able to get an amendment that the 218 of us would agree that spending shouldn't occur, it gets spent somewhere else. So what this law would say is that when that happens, if we are able to overrun the appropriators, and the appropriators legitimately hate this idea, but if we are able to get 218 of us, whether it is, in our case now, it has got to have some Democrats now to help us out, but we are able to reduce an appropriations bill by some amount, that that will actually reduce the 302A and 302B allocations and all of that machination that goes on so that we would actually not spend that money. It would reduce the deficit or increase a surplus, if we ever got to that particular place. I have got a couple of Democrats who have agreed to cosponsor, so I am encouraged by that, that we can, in fact, begin to work on the spending side of what we have got going on here. I want to again thank Mr. Shuster for having this out here tonight. When Congress saw fit to increase the section 179, throwing a little code at you, section 179 deduction for businesses or small business deduction where you can immediately expense up to $100,000 of business property that you put in service, that was a huge boon to small businesses. It allowed them to immediately write off the cost of having to put new equipment into service, and as Mr. Neugebauer has already said, when his plumber friend bought a new truck, he had to have somebody drive that truck. In all likelihood there was a swamper on that truck so he put two more people to work. That happened thousands of times across this great country. It was part of that impetus, part of this push to get us out of this recession that we were in 2001, 2002 and 2003, that single piece was a great part of what helped do that. That was directly positive for small businesses, and it is one of those that we continue to extend, but will go away unless this Congress acts to keep renewing it. One final story. In talking with folks about the death tax back in the district, I tell them that probably the most dangerous week for anyone who has assets and beneficiaries is the week between Christmas of 2010 and New Year's Day. Here is why: If you have got assets that you have worked hard for your life, but you got beneficiaries, you are going to get those assets when you die, if you are still breathing on January 1 of 2011, then those beneficiaries immediately have a 55 percent partner called the Federal Government. My advice to those folks is to go ahead and have Christmas with your family, but then you probably ought to make yourself real scarce unless, if the current law stays in place where the death tax goes completely away in 2010, and the Federal Government has no claim on your assets when you die, to January 1 of 2011, when the Federal Government gets a 55 percent claim on those assets. So those of you who have assets, if we aren't able to get the laws changed and effect that, you probably ought to make yourself pretty scarce around your beneficiaries post-Christmas and January 1. Good luck with that. I would like to thank my good colleague, Mr. Shuster, for having this hour tonight, sponsoring it. I hope to participate with you in the future.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I thank the ranking member, and I appreciate the opportunity to talk. I was just trying to clarify a couple of things on the package to make sure that we understand what it is we are actually doing to ourselves. I spent 2 years on the Budget Committee, and it was a very informative time. I sat through hours and hours of conversation by my colleagues on the other side of the aisle touting the virtues of PAYGO and that they thought this would solve the problems of the world, knowing all along that their version of PAYGO that they talked about was, in fact, a stealth tax increase, given the current Code that we have in place with respect to the taxes on capital gains and dividends, as an example, and the death tax that will come back in full force in 2011 unless we actually do something to it. So as we consider this PAYGO concept, I would like for the American people to know that the devil is in the details, as with everything that we, in fact, do. When I campaigned, when most of my colleagues campaigned, none of us campaigned on increasing deficits. We all campaigned, on both sides of the aisle, on reduced spending, on smaller government, all those kinds of things that both sides are saying during this debate today. But I am not sure this PAYGO version will, in fact, do that. Also the point we were trying to check right now, I believe in addition to the rules included in this rule is a change in the Rules Committee itself to allow for votes in the Rules Committee to be not reported out in the rule. So the Democrat-controlled Rules Committee can waive this PAYGO rule and we won't know which of the members actually voted to do that because of the way this rule is. It is interesting yesterday that the word ``transparent'' was used often by the folks on the other side of the aisle, and yet one of the areas in which transparency seems to have been reduced is with respect to the rule that is included in here with respect to the Rules Committee. So with respect to PAYGO, I want my colleagues and others to know that this is a stealth tax increase that is being foisted upon our economy.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I thank the chairman. In an attempt to adhere to his admonition that brief is better, I will add my voice of support for this bill. I represent a rural district in Texas. It is 36,500 square miles. It is 14 percent of the land mass of Texas, and so we have a lot of opportunities for takings from various entities. I support this bill because most landowners, most developers, simply want answers. ``Yes'' or ``no'' is better than ``wait until tomorrow.'' Once you get hung up in this regulatory nightmare of waivers and permits and permits and waivers and that body and this body, just knowing the truth and what the ultimate answer is would be better. This law defines that Federal courts have to begin hearing a case once a final answer has been given under a permit or a waiver, and allows access to the court so that the property owner will then be able to get an answer that they can live with. I support this bill. I encourage my colleagues to also support this bill to protect private property rights and give landowners and other property owners their day in Federal court.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I rise tonight to speak in recognition of the accomplishments of Rufus Johnson of Kerrville, Texas. Of African- American and Cherokee descent, Mr. Johnson was born in Maryland in May 1911 and faced adversity at a very early age. Having lost his mother when he was 4 years old, he never allowed any situation to dictate his path. After his mother passed away, Mr. Johnson was sent to live with his aunt and uncle in Pennsylvania. As a boy in Pennsylvania, he was forbidden to swim in the city pool. This cost him his much coveted Boy Scouts of America Eagle rank because he could not earn the swimming merit badge. Mr. Johnson never forgot this missed opportunity, and ironically, it was this missed opportunity that led him on his path to historical significance. Among his many life achievements, Mr. Johnson worked in the White House of President Franklin Delano Roosevelt, served in the U.S. Army during World War II, and became a successful attorney. Immediately after enrolling at Howard University in Washington, DC, he joined the Reserve Officers' Training Corps, took swimming lessons and became a certified lifeguard. Mr. Johnson's certification won him a job as the White House Pool Lifeguard during FDR's Presidency. Having earned the respect and admiration of FDR, Mr. Johnson became his butler as well, a position that often including lifting the President from his chair. Mr. Johnson recalls with great respect the pride and independence of President Roosevelt. Mr. Johnson earned a place in White House history when a bowl of soup on a tray he was carrying tipped over and spilled on the President's lap. According to Mr. Johnson, it was Roosevelt who intentionally, but secretly, tipped the tray and caused the bowl to land on himself during a meeting. Mr. Johnson said FDR continued the conversation without pause and earned the respect of his adversary sitting at the dinner table with him. When First Lady Roosevelt learned that Mr. Johnson was preparing to take the bar exam, she had a desk set up in the White House to allow him to study for 2 hours every day. In October 1942, he was called to active duty as a captain in the 92nd Infantry Division of African-American soldiers. Mr. Johnson earned the admiration and respect of all who served with him and was awarded the Bronze Star, the Purple Heart, and the Combat Infantry Badge and received a special regimental citation for bravery. He was called to duty and served again during the Korean war, where he attained the rank of lieutenant colonel. After his service in the military, Mr. Johnson set up a law practice in California and also performed pro bono work. He argued successfully before the California Supreme Court in defense of the First Amendment rights of American Indians. He won the decision and it still stands today. Mr. Johnson relocated to Kerrville in 1994 where he still resides with his step-daughter, Yvonne Smith. He turned 95 last May, and the Texas State Legislature and the White House paid tribute to him on his birthday. Tonight I pay tribute to Rufus Johnson for his years of service to our Nation. He is a respected member of his community, and he has a life-story that deserves to be remembered.

Mr. CONAWAY

Mr. CONAWAY. Mr. Speaker, I ask unanimous consent that in the engrossment of the bill, H.R. 6166, the Clerk be authorized to correct section numbers, punctuation, cross-references, and the table of contents, and to make such other technical and conforming changes as may be necessary to reflect the actions of the House in amending the bill, and that the Clerk be authorized to make additional technical corrections.