Geoff Davis

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Just as an aside, if the gentleman would yield, I am becoming a much bigger fan of the policies and rules of the U.S. Senate since November 8.

Mr. DAVIS of Kentucky. I thank the gentleman and point out that we in the Countdown Crew can be contacted at countdowncrew@mail.house.gov. The stories that we tell are about real people who are creating real jobs and live in the real world, and they understand the real effects of the policies that are generated here in Washington, that create value, that create a future, and those that create impediment and create barriers to growth. I think of my friend George Hammond who runs Hammond Automotive. He started in Covington, Kentucky, years ago, and he invested in his business the great benefits that have come from the tax cuts that were passed by the Republican Congress, allowing the American people to keep more of what they own, have benefited him and his employees and family. His business has grown. In fact, he opened a new outlet, a new store in Burlington, Kentucky, to reach even more people and to create even more jobs. It is like my friend Don Salyers who runs a river transport operation in Ashland, Kentucky, giving opportunity for creating more jobs and a future for that community that is in economic transition. This week we are going to vote for a tax incentive package that will help to keep the American economy strong by extending tax policies that we passed in prior Congresses. We owe it to our families and this Nation, to our working families, to small business owners, and ultimately to the health of the economy to allow people to keep more of what they earn. We need to do more that creates that future and creates taxpayers, instead of raising taxes. One thing that I would like to comment on here tonight is the extension of the work opportunity tax credit. Small business owners, especially those that have to take somebody and intensively train them to bring them into that workplace, into that small business to make them into a taxpayer need incentives and opportunities. For example, we have many people who have had some challenges in life, that may have lived life on the edge, may be going through a transition in life, and we want to give them that opportunity. But the way to do that is not to mandate that. The way to do that is not simply to set aside the taxpayers' dollars with no stewardship or oversight, but is to allow the market and the economy to work by providing accountability for those small business owners on the frontline, and also the opportunity and the incentive to make an investment. And what the work opportunity tax credit does is it incentivizes small business owners to hire higher-risk employees, and the goal again is creating taxpayers. What are some examples of this? Dealing with high-risk youth. My wife, Pat, and I worked with Youth on the Edge for over 20 years before I came to Congress. And the one thing that I can say is there are many young people that need a vision; they need a new start to overcome mistakes that were made earlier, some wrong assumptions they had about their environment, oftentimes the consequences of poor decisions that they made. On first blush, a business owner could be hard pressed to want to make that investment. But what this tax credit does is gives an offset to that business owner to make that investment, to reduce the risk, to give somebody a chance. That is the kind of framework, the kind of regulation that government should give that allows the market to work, to bring out the best in people, and ultimately strengthen our economy in the long term. You know, as I close tonight before yielding to the gentleman from Pennsylvania for his final words, our mission in the Countdown Crew is to do two things: first, it is to let the American people know that in 1,419 days, a $2,100 bill is going to arrive in the mail to basically every taxpayer in the United States when the tax cuts that have produced so much will be repealed automatically, when they sunset. We need to allow people to keep more of what they earn. We have seen the great benefits that come to the economy from that. The other thing that we do in the Countdown Crew is we want to highlight the positive impact of policies that allow people to control their own lives. The government doesn't create jobs; all it can do is create a framework and environment that either empowers people or restrains them and holds them back. And what we want to do is join with you and the Countdown Crew, and you can contact us at countdowncrew@mail.house.gov to get the American people's story here in the House of Representatives so that the Congress will know, and compel the Congress to act, to allow the small business owners who create the bulk of jobs in this country to keep more of what they earn, to invest it in their employees, to allow working families to keep more of what they earn and invest it in their employees; so that in 1,490 days we can continue creating opportunities rather than stopping something that has been a great benefit. With that, I will yield to the gentleman from Pennsylvania to close.

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Mr. Speaker, I rise today to honor the legacy of a brave young man from my district who recently lost his life fighting in Iraq. A resident of Ewing, Kentucky, Sergeant John Cooper lost his life in a roadside bomb attack just outside of Mosul. Sergeant Cooper was serving in Iraq with the Army's 2nd Squadron, 7th Cavalry, and was working on security operations in the area. I recently had the opportunity to meet with John Cooper's mother, friends and family. They relayed to me stories of a brave young man who answered the call to duty by joining the Army in 1995 after graduating from Fleming County High School. He served in Iraq from February of 2003 to February of 2004 before being stationed in Korea. In October 2006, he returned on a second tour. His mother, Janice Botkin, told me that her son was living out his life-long dream of serving in the military. She spoke to me of her son's bravery, his dedication and absolute belief in his mission, and by all accounts, Sergeant Cooper was a well-respected member and leader of his unit and his community. Today, as we celebrate the life and memory of this great soldier, my thoughts and prayers are with Sergeant John Cooper's family and friends. The entire Nation is deeply indebted to Sergeant Cooper. We thank him for his service, and we honor him for his ultimate sacrifice.

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Mr. Speaker, we would like to take some time this evening to continue the conversation that we began the first full week of Congress, talking about the impact of world view on policies that affect the creation of jobs, that affect families, working families, creating hope and creating opportunity for the future. As we have shared each week, we want to point out that though there were a variety of motivations in the most recent elections, one thing is clear that was not talked about by the American people, I don't think realized the full impact and the emotion of many of the votes that were taken, is that we are now 1,426 days away from one of the largest tax increases in American history. It has only been 18 days since the last time the Democratic Party voted unanimously to raise taxes in this Chamber. The reason that I bring this up is I go back to the last time there was a significant raising of taxes. In 1992, Bill Clinton was elected President of the United States. He promised to cut taxes on working families, and, in fact, came into office and decided that he needed to change his mind based on a different statistic and brought about what was the largest tax increase in American history. Now that was particularly interesting to me. I remember the night of that election, was not in politics, was working in business, and was getting ready at that time, had just started, my wife and I started a manufacturing consulting business to begin working with other companies, helping them with their business systems, helping them to improve productivity to compete in the international arena and helping them to create jobs and keep our jobs in the Midwestern United States in the Ohio Valley. I was informed by the Internal Revenue Service the next year that I was going to be allowed to invest in our government. And what it did was that investment took away money that was hard earned by all of the families that were working together with us. Over time what that would have added up to would not have been a fancy lifestyle, because we were focused very much on serving our community. What it would have added up to quite simply was more jobs. It would have been not only more jobs in our company where we would employ people to empower others to work together, but especially where we saw the impact of these regressive tax policies was in the damaging of the economy during the 1990s. The Clinton administration actually inherited the fruit of Ronald Reagan's vision. Ronald Reagan cut taxes. He sought to streamline regulation. He sought to empower people. It led to the longest period of sustained continuous growth in the history of this country. Mr. Clinton was able to inherit that. But Ronald Reagan was the author of that. The fruit of the policies of the Clinton administration were most felt in the late 1990s. They were felt as the Internet bubble burst, as we began to see increasing pressure from foreign competition, as we began to see jobs leave this country. We saw regulation increase, we saw taxes increase. Ultimately, all of that adds up to money coming from one place, and that is the pocketbook of the American taxpayer. I look back on companies that we went to serve over and over again. We heard about the increased tax burdens that were on the working families, that were on the middle managers, that were on the engineers. Out in the community, that translates into an increased burden on teachers and police officers, on people providing services, small business owners and the local community. It was something that was not often seen in the national press, but was felt very much in the Ohio Valley. It was felt in the Rust Belt; it was felt across the Northern Midwest. We saw that working in manufacturing, in the machine tool industry, where these taxes and regulations were difficult and created a tremendous burden. They did not create jobs, in fact, created quite the opposite. The cost of health care began going up. There was a cost of compliance with environmental regulations that went up. And all of that was ultimately passed to the American consumer. When George W. Bush was elected President, he wanted to carry on that vision of Ronald Reagan and so did the Republican Congress that had passed tax cuts through the late 1990s that had been vetoed by President Clinton. When President Bush came into office, he inherited a recession that was well under way. Combined with the 9/11 attacks, it was a devastating impact on the American economy. But the tax cuts that were enacted in 2001 and 2003 and that we extended each of the past 2 years had quite the opposite effect in time of war, in a time of national threat: seven million new jobs were created. More importantly than that, I think that the leadership in the Republican Party, the conservative vision, the Ronald Reagan vision for America, understood one thing, that by allowing people to keep more of what they had earned, they will spend it wisely. They will spend it in a way that will bring back more to them and build for their future and invest in their future. That is why we have constantly introduced legislation to allow people to keep more of what they earn. That is why last year we introduced the 401 Kids Bill, to allow parents, at the birth of their child, to set aside money for college that could be accrued year after year just like an IRA. That legislation has no hope in this Congress, because the chairman of the Ways and Means Committee has said that every one of the tax cuts that has created these record revenues will be repealed in 1,426 days. One thing that many of us did not understand before in this country, but I want to share with all of you tonight watching from home, is this: that in order for the Democratic Congress to bring about one of the largest tax increases in history, they simply have to do nothing. The compromise that was negotiated for the original tax cuts was that those taxes had a sunset and that many of the taxes, particularly small business taxes, education tax credits had to be extended from Congress to Congress, from year to year to reauthorize them. It is very clear from the candidates in the Democratic Party for Congress, over and over they are saying that taxes must be raised. The gentleman from North Carolina made a statement over the weekend that not only did taxes need to be raised, but we needed to have universal health care and dramatically encumber the cost of providing for health care for small businesses. Charles Rangel, the chairman of the Ways and Means Committee, said that he saw none of the tax cuts that were passed in 2001 and 2003 and that we had extended in previous Congresses to see any merit in being continued. What that means at the level of the working family, what that means for every family, for the vast majority of us in this Chamber tonight, and those who are watching at home, is this: you will have, if you are making between 30 and $60,000 a year, at a minimum a $2,098 tax increase, that will come automatically with no legislation. The reason for that is, in 1,426 days these taxes simply increase. And I think that we need to keep in mind one thing. The goal of government cannot be and is not to create jobs, because government cannot create jobs. It does not have free assets that can generate value that can build a nest egg for a working family. What we can do is create a framework to empower a framework that allows people to achieve, to pursue the American Dream, that allows them to go forth and to work, to create a vision for their own future, to build a future for their children and grandchildren, and to encourage their children that they can pursue one. That is why America is the number one destination for people from all over the world, because America is the land to begin again. I saw that with the grandparents of my wife, Pat, who came through Ellis Island. My children have been to Ellis Island to see the names of their great grandparents on the wall. They came to this country because they believed in their own way the streets were paved with gold, with opportunity, with a future that they could pursue by hard work, by savings, by serving others that they could make a difference. Within one generation of that, their children were educated. They had their children going through college, their children were out working in the economy. And they in two generations have created jobs. My wife was the first woman in the history of her family to graduate from college, and she pursued that opportunity and that vision. I have a daughter now who is getting ready to teach school, who is student teaching now. She is not going to face that same kind of opportunity because the tax policies, the economic policies toward working families in this country are about to regress in 1,426 days. I believe that our role must not be to raise taxes, to create additional burdens for small business, to create additional burdens for the creation of jobs, to create additional regulations. What we need to do is create taxpayers. And by cutting taxes, by allowing people to keep more of what they earn, a phenomenal thing has happened. The United States Government has had record revenue of taxes coming into the government. And the challenge is not the revenue coming in by so many new taxpayers by the millions of new jobs that are created. The real challenge is reducing government spending, addressing the validity of programs and whether they add value or not, and making sure that our bureaucracy is leaned up, flattened out and made more efficient to serve the taxpayer more effectively and allow those resources to go to the place where they are needed the most. My colleague joining me tonight who has been the leader of this Countdown Crew over the past 5 weeks is my friend from Pennsylvania, Bill Shuster, also coming out of the small business world like me, who understands what it is like to meet a payroll, understands what it is like to pay for health benefits, understands what it is like if we do not get up in the morning and go to work, there is no salary at the end of the month, and in order to make sure that we can make a difference for our family, we had to go to work and work hard. In that time, we both understood the impact of those tax increases on limiting our ability to provide for our children's future and also to have money in the economy that is going to create more jobs. With that I would like to yield to the gentleman from Pennsylvania.

Mr. DAVIS of Kentucky. Mr. Speaker, the gentleman was talking about the employment impact numbers, particularly when the tax cuts came in. I can remember working on a factory floor in Orleans, Indiana in the weeks immediately after 9/11, and the economic shock that hit the entire home products and office products industry, every segment of our economy, but in this particular town this factory was the largest employer in that area. And there was a great fear about what the economic impact was going to be over time. I was working in business, I was contemplating running for Congress at that time. And the one thing that we began to see as we entered 2002 in that work with that business was that the economy, even then, began creeping back because those tax incentives to working families, to individuals, to reinvest their money, to invest in the economy, to continue to save made a tremendous difference. In fact, that company continued to grow. It came out of that post-9/11 slump and continued to grow in a great way. And when you talk about 4\1/2\ percent unemployment, it is remarkable to me. I remember about the time that we graduated from college, right when Ronald Reagan was introducing his proposal that was said to be so radical and they were going to be ineffective, that even though we had unemployment that was approaching 10 percent at that time, they said that the best economy, 6 percent in this economy would be the very best you could do for full employment. And here we are at 4\1/2\ percent. But on top of that, we are at record manufacturing productivity levels in this history of this Nation. And I think it just further personifies the point that you are making.

Mr. DAVIS of Kentucky. I think it illustrates a universal principle too that if you, kind of like the verse in Ecclesiastes of casting your bread upon the waters and it will come back to you and by allowing a seed to be sown, to grow over time it will make a big difference. And the real difference, I think, that needs to be highlighted is this is a fight, a battle of world views, of seeing, really, the short term versus the long term. A lot of money can be taken into the Federal Government in a short term by raising taxes. But in the long term it could have a devastating effect. I think if the gentleman from North Carolina who is running for President had laid out what he actually did with his tax money or the money that he earned, the American people would probably have a somewhat different view of things. And when I see a super rich Senator, or a very, very wealthy liberal who in many cases inherited their money, making statements about wanting to raise taxes on the rich, what they don't talk about is the tremendous amount of money that they spend to create special investment trusts where they effectively don't pay taxes. And again, to your point, it comes back down onto working families. It comes back down onto teachers, onto police officers, small business owners, people working in retail, people in transportation, pilots, engineers, the folks who keep our economy moving forward. And to our point, leave it in people's own pockets, and they will make a difference. But I think it is especially important that the message gets sent, that our friends and neighbors are going to see that increase.

Mr. DAVIS of Kentucky. I think that is a good point. The whole PAYGO budget system really is more smoke and mirrors than it is reality, because I think the thing, again, the American people were not told by the media and certainly weren't told during the run-up to the election that they exempted their existing programs from that. They say there has to be a spending cut or a tax increase to offset any other increases in spending in other programs. But there were loopholes that were left for them to increase spending. But I think the real thing that we have got to look at here is the impact on American families that will come from the tax increases that are coming if Congress does not act. And this is not a Democrat or Republican issue. This is an American issue, this is an economic security issue. And I would just like to recap. Nationwide, a family of four making $65,000, which is the midpoint income for all families in the United States, will see their taxes go up over $2,000 if nothing is done by Congress. Married couples with an average income like this family I just mentioned would experience a 12 percent tax penalty just for being married. For focusing on the values of family, the strength of the family, there is going to be a tax penalty reinstated upon them. I think that is simply unacceptable that that would take place. More importantly, the cost of raising children has gone up. We certainly know that. We have six children. We have one in college, one who is on deck to go to college, another one who is going to be in college shortly behind the first two. These children are working hard. They have jobs. They are contributing now to the economy and the community and they are taxpayers. And they understand firsthand the impact of these policies. But our family, for the cost that we have in raising our children, making sure they are not a burden on society, making sure that we are providing for all of their needs, appreciated the $1,000 tax credit that was provided by the Republican Congress in 2001, and what we are going to see is that is going to be reduced by $500. A family with four children will see a $2,000 increase just on their tax bill because they have children. They will see an additional 12 percent penalty because they are married. This flies in the face of the kind of empowerment and freedom and opportunity that families need. We need to have policies that encourage families, that encourage moms and dads to stay together. I think every child deserves to have a mom and dad. I grew up without a dad. I know what that is like, to be alone, to have my mom working sometimes two jobs to make sure that our needs were met. I remember going to work when I was 16. And the first time I saw, wondering what those taxes were, all that money that had come out of my pay then. One of the things that were done, and I entered that as a minimum wage worker. One of the things that was done, again, by a very progressive focus, conservatives in Congress, was to create a 10 percent tax bracket. We took millions of people at the lower end of the economy off the tax rolls for a simple reason, to make sure that they could keep more of what they earn. And it is important that we keep in mind the impact on families of every one of these decisions. I wish that everybody in Congress had been in business in some capacity where they created jobs, where they had to make a payroll, where they had to generate opportunity for others, where they had to personally make sure that health benefits were paid. And I think what they would experience is a very different perspective when it is your name that is on the bottom line having to produce that revenue to provide for those benefits. And I remember times that those of us in our little company family would go without a paycheck or take reduced pay simply to make sure that we got those benefits paid. And regressive policies that increase taxes discourage people from doing what I think is the right thing and taking care of their employees. Tax increases and health care are very much this way. We saw in Kentucky, in my State, or in the commonwealth, a very devastating approach to health care that had a huge rise in cost by driving 45 of 47 carriers out. It was a program very similar to what Hillary Clinton wanted to see passed back in 1993. And what was the impact of that? Was there an increase in the quality of health care provided by small business owners? No, it was a significant decrease. It was a significant driving of people out of health care and into other means of provision for that care. Why was that? Because the incentives mostly punished the small businesses. We need to allow small businesses to band together to get the same low rates that big businesses do. But in that vein I want to keep in mind what the impact is. We saw businesses that provided for their employees, that provided for basic benefits either give their employees a cash subsidy because they wanted to get out of the business altogether or they simply had to cut benefits because costs were going up so much. And there are many hidden taxes in this process that have a tremendous impact over the long term. Payroll tax is another issue. There is a lot of talk about Social Security right now. The system needs to be reformed. I think if we sit down and do the numbers and we see that the increase is at three to three and a half times the rate of inflation for Medicare and Social Security that down the road we are going to have a significant problem. But we are not talking in this Congress now about reforms in the system. What is the novel solution that is being provided? Raise taxes. That would be, in fact, the largest single payroll tax increase in history, to take the cap off the Social Security taxes. And who gets hurt? It is not the super-rich. It is not the billionaires who are calling for tax increases because they don't really pay taxes the way you and I do. It is going to be those folks who are in the middle who bear the burden of this economy who are going to bear that burden as well. And I think that the impact of millions of jobs is simply unacceptable. It has a ripple effect throughout the economy and a regressive effect. Just keep in mind, as we talk about competition with China, people see the Chinese economy as this great juggernaut; but one point that I would like to make in particular when we look at the increases, in less than 3 years the U.S. has added economic output by over $3.2 trillion of additional economic output. That number of our increase in economic output is bigger than the entire economy of China. That is a staggering statistic when we think about that, the economic engine that we have. And it would be a grave error to put additional burdens on the families who are the producers, who create the value in that economic engine, that would hurt the generation that comes behind us. Would the gentleman from Pennsylvania have some other perspectives?

Mr. DAVIS of Kentucky. Relating to your point, if I may reclaim my time for a moment, the welfare to work tax credits that have been extended progressively every year are a perfect example of that by giving incentive to a small business owner, considering that 88 percent of all new jobs are created by small business owners, but to give them a direct tax incentive to take that risk, to invest in an individual, to teach them and train them to give them a job, it proves your point.

Mr. DAVIS of Kentucky. Mr. Speaker, reclaiming my time, I would like to close by a sharing a little bit of a story I think that brings some of this into perspective. You heard us share earlier that 88 percent of all new jobs created in this country are created by small businesses, companies that employ less than 500 employees, and those small businesses are started by men and women who have vision, that want to take risks, that are willing to step out. Congressman Shuster and I know that feeling of taking that step. That is a scary thing when you are going to make it on your own and not try to depend on a large corporation, suddenly realizing that you can create that value, create that future, and that others will follow and join with you and that you can begin to perpetuate it and grow. And the great industries, the great technologies that have come in this country, the great opportunities that have been created have been by those entrepreneurs who have gone out and made that difference. See, our key must be to create taxpayers, not raise taxes. Our goal is very simple in government. We want to provide policies and we must provide policies that empower people, that don't restrain them or constrain them from achieving their fullest potential. And I shared earlier one thing I think that is very, very important. We have a kind of have-it-now view in society of what is in the 24-hour news cycle, what is the impact going to be of this decision in the next 24 hours or in the next three months or one year on Wall Street. But those whom we are competing with internationally right now think in terms of generations. They think in a 20- or 30- or 40-year window, what the impact of their policies will be on their children or their grandchildren. If we step back and we take the vision of our Founders or even the vision of some of our leaders in the community, we will prove the fact that those who are forward thinking, who want to see into the future and invest accordingly and make that difference to create opportunity, they are the ones who will be successful. And one of the stories that comes to mind, I am going to end it with a small business, but it began over 20 years ago in Kenton County, Kentucky, in the city of Covington. Covington basically laid in the shadow of Cincinnati. There was residential development up in the hills, but once the great flood levee, as one of the great entrepreneurs in that region shared with me, when the flood levee went up after World War II, much of the business began to leave, the riverfront literally died and the tremendous amount of river commerce. As the decades went by, small businesses began to leave. There was a movement out to the suburbs. Then Interstate 75 came through. Even more business was diverted from downtown and the economy became weaker and weaker. There were less good jobs there, less jobs for the payroll tax base to support community services. As we entered the 1980s and the Reagan tax cuts were beginning to take hold, some interesting things happened. Some business people, some developers, community leaders, had a vision that they could reform the way the city looked, they could change the image of northern Kentucky. It included many people from all different backgrounds. But they agreed on one thing, that they were going to change the direction of their city. They were not going to depend on outside government to do it. They were going to do it themselves, by investing their time and their talent and their treasure in that vision. What began to change was, first of all, a significant change in image. And then a few years ago, the mayor, my friend Butch Callery, who is a Democrat, and I want to say this for our friends at home, for my conservative Republican friends, Butch is a real Democrat, but he is a Democrat who cares deeply about his city, and we worked together, any way we can help with development and growth. He went from being on the city commission into the position of mayor, leading with this vision of economic development. And he saw two things to do that were very critical. He has developed and empowered a new arts district, where we have artists and artisans who are coming literally from around the Nation to bring their businesses, their galleries and outlets into Covington, Kentucky. The city fathers, 50 years ago it would not have looked anything like it is starting to look right now in development. It is an awesome thing to see happen. But the second thing, and to me the even more exciting thing, is the broad public-private partnership that he has forged, working with the chamber of commerce, working with the State, working with other elected officials and working with the business community and working with the educational community. Getting the proper incentives and then joining with northern Kentucky University and Gateway Technical Community College, he worked to create a project called the Madison E-Zone, an enterprise zone for high technology businesses where there were going to be special opportunities to work together, to network together. And right there, in the urban heart of Covington, they laid this in. The vision is very simple. We want to get the synergy of high technology education. Northern Kentucky University started a School for Informatics. Instead of simply bringing an academic in, though there are many, many competent academics out there, when we deal with high technology, when we deal with information technology, electrical engineering, it is good to have somebody coming from industry, and they brought a man named Bob Farrell, a tremendously successful information technology entrepreneur, to come in and begin running that School for Informatics. They have a School for Entrepreneurship that is also tied into the same venue. Finally, these incentives, working with the local businesses, have created a new knowledge base. That is how Silicon Valley got started in the community around Stanford University. We may is not have Stanford University here. We are starting in a new way with a new vision. But like my colleague to my south, Hal Rogers, likes to say, we are going to have ``Silicone Holler'' in Kentucky, because we are going to create those technology jobs, and we are not going to see our young people have to leave the State, because now new businesses are not only coming, but they are small businesses, and what is so exciting is they are new businesses that are starting by Kentuckians who have grown up in Kentucky who are educated here and they are creating a future here. One of those companies is Tier 1 Software. It started out when two of the partners, Kevin Moore and Norm Desmarais, reached out. They took that chance. They took that big step to start their business. They began seeking opportunity to do software development, implement the applications that they developed, begin to build that business, beginning to create additional jobs, working alongside the School for Informatics. They began doing work with the Department of Defense. Again, what they are working on is knowledge preservation. My point in bringing this up, it all started note just 2 years ago or 4 years ago, it began with that long-term vision, with an application of policy from the Federal Government to make a difference in development. Here is the challenge. Even these businessmen are inheritors of Ronald Reagan's legacy. When these tax increase Goss into effect in 1,426 days, businesses like Tier 1, companies with startup potential to create jobs in my State for my citizens and my constituents so they don't have to leave are going to go away because of the burdens that will be restored. A regressive burden will be restored with payroll taxes, with income taxes. And also the inability to depreciate or write off investments for hardware, as Congressman Shuster mentioned earlier, are going to go away, and it is going to put a tremendous burden on the economy and our region. I want to see it flourish. I want to see us continue to grow and change and transform and create more taxpayers in the future. That is why progressive tax policy reduces the rates, allows people to keep more of what they earn, and, in the end of the day, we don't burden them unnecessarily. We empower them and free them to build a future for their children.

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Mr. Speaker, I rise today to express my opposition to the Democrats' omnibus spending bill. The text of this legislation that would spend more than $463.5 billion in taxpayer dollars was first distributed to the minority less than 48 hours ago and will be debated for only one hour. In October the Democrats promised the American people increased transparency and accountability, but apparently, these promises are hard to keep in January. While there are billions of dollars being spent without oversight or accountability, the omnibus also includes a provision that will alter the formula for distributing Section 8 housing funds. The current formula bases funding on an average of funding levels for May, June and July of 2004 with adjustments for inflation. The altered formula contained in the omnibus bill will base funding levels on the previous twelve months funding, accounting for inflation. The formula change will cut significant amounts of funding for more than half of our nation's public housing authorities. The formula change would result in a decrease in funding for three of the four major public housing authorities in my District. The Covington Housing Authority would lose $197,321, the Ashland Public Housing Authority would lose $75,578, and the Maysville Housing Authority would see a loss of $71,274, which is 23.4 percent of its operating budget. These housing authorities provide critical services to my constituents and an unexpected funding cut like this will only worsen the already poorly funded public housing system. Changing the formula for Section 8 is a topic that deserves debate, but the formula included in the Democrats' omnibus spending bill has yet to see the light of day in either the House Financial Services Committee or, until now, on the House floor. Changing the formula midway through the year without debate or discussion is an unwise move and would wreak havoc on our public housing system. Contrary to claims made by Democratic leaders, it has been discovered that this bill contains numerous hidden earmarks that Democrats apparently hoped to ram through the House without debate. It is in the interest of the American people that we ask our colleagues across the aisle what else is buried in the 135 pages of this bill that will harm real people in our districts without ever having been debated in this House?

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Just as a former small business owner, one of the things that I would like to point out, that 88 percent of new job opportunities are created by small business owners. They are created by land developers, by construction companies, by small machining and tooling companies, small fabrication businesses, distribution businesses, professional services businesses, financial services. The glue that holds the institutions in our communities together, the framework of members of the National Federation of Independent Businesses, of our local Chambers of Commerce that serve that valuable function of communicating an agenda that focuses on growth, that strengthens our Nation for the long run. And I think that one of the things that I would like to highlight tonight, again, is this theme that when people voted in November, much perception nationally was focused on a view that national security situation was driven by emotion. But the reality is that in that election, short of making significant strategic changes in the leadership of this Congress, America voted to increase taxes on every working family in America by at least $2,000 a year. One of the things that I have told folks for many, many years is we don't need to raise taxes. We need to create taxpayers. Government does not create jobs, and government itself does not create wealth or a nest egg for families of America to build for the future. What government can do, however, is set a framework for achievement, a framework where people can pursue opportunity. The Constitution tells that the government is to provide for the common defense and to promote the general welfare. What are some of the ways that we can promote that general welfare? One of the key ways to promote the general welfare is to allow people to keep more of what they earn because they will invest it in a way that focuses on the needs of their family. They will invest it in immediate needs, in consumer goods that have a ripple effect of creating jobs. They will invest in future and retirement plans for themselves and set aside money to grow for college. All of this is fueling the economy, and keeping this in the private sector is very critical. Some of the things that the tax cuts did were allow people to keep more of what they earn. We eliminated the marriage penalty. We increased the child tax credit from $500 to $1,000. That meant, in the case of my family, nearly $3,000 that was left to reinvest in the lives of our children and their education to save for their future. It makes a very, very big difference. When we look at the marriage penalty, it put a significant impact on working families. And, again, I come back to the fact that the average family in America is facing a $2,000 per year income tax increase. But there is another side of this from a small business standpoint of job creation. I would like to highlight one man whose small business benefited in the manufacturing world, creating jobs in his community, impacted the local economy because of pro-growth policies that were continued in the last Congress, allowing not only individuals and families but also small business owners to keep more of what they earn, to be able to invest that, to write down debt and to prepare to compete in the future. We are a global economy. It is critical for us to be able to allow people to invest for the future. Remember, we don't need to raise taxes. We need to create taxpayers. Robert Prybutok of Newark, Delaware, owns a company called Polymer Technologies. Because of the tax cuts that were enacted, he was able to hire 10 new employees in 2003 and 2004. He had approximately 72 employees in January of 2003 and now has about 90 employees. His business continues to grow and with it the need to buy new equipment. By utilizing the expensing provisions of the tax cuts, he was able to purchase two new pieces of equipment, increase his productivity, thus increasing the security of those jobs of his company; and it saved him about $125,000 that would have been lost in cost. This is money that can be invested in the future. Without the ability to expense his equipment, he would have been hard pressed to purchase that equipment in the first place. He needed to grow his business and pay the taxes that he owed. And I think the one thing that I keep in mind from my experience walking the shop floors of many, many businesses during the era of the Clinton administration where these breaks were not in place for America's manufacturing companies. People made decisions based on the structured Tax Code. They withheld making needed investment in competitive productivity improvements, needed investments in the professional education of their employees because they were uncertain of what the future held. Had the tax expensing provisions been in place, they could have made those investments more easily. And I think it is important to keep in mind that it allows a business to invest in the future to create more taxpayers. I think that this ability to expense equipment, this ability to make investments that are going to be job-creating investments, maybe a short-term deferral of tax payments to the Federal Government, actually will increase revenues. How have we seen that? We have seen it over and over again. As taxes are cut, more money goes into the investment economy, more jobs are created, more taxpayers are created, and tax revenues are an all-time high right now in the Federal Government. I think there are countless stories that we can share of successes on a small scale in small business which is really the opportunity to live the American dream. The vast majority of jobs in this country, nearly 90 percent, 88 percent are created by small business owners. They are not created by large corporations. There is so much of a focus on the class warfare rhetoric that goes on in the Chamber that misses the point where the majority of the Americans work. And the majority of Americans work in small business. That is why we need to reduce the burden on those small businesses, create incentives so they can create jobs and create taxpayers to promote the future for their employees. With that, I would like to yield back to the gentleman from Texas to share more of his perspective on this matter.

Mr. DAVIS of Kentucky. Will the gentleman yield on that point for a moment? Not only does it affect employees in the Social Security Administration who process checks for our senior citizens, it also affects our ability to fight against Islamic radicalism, fight against terrorist groups. I flew in today with members of the FBI Southern Ohio office out of Cincinnati coming in for some business here in Washington, and they shared their concern over the lack of a continuing resolution. Was the money going to be there to fund their operations? And, right now, one of the things that our national security apparatus, because of this Democratic Congress, is having to cut positions, not just a few positions but nearly 3,000 positions because of the lack of funds to do their job which we had provided for them. When we talk about the issues related to bringing this continuing resolution, there was a clear statement that was made about the desire to work harder. Well, last week, 2 days, we were done by 2 p.m. This week, I am reading the schedule, and it says, tomorrow, Tuesday, we will be out around 2 p.m. Wednesday, no rule yet on the continuing resolution, but likely we will be out at 2 p.m. I don't know how many nights we worked long, long hours in this Chamber, long, long hours in committee to get the people's work done. And now we have Federal law enforcement. I got a call today from an aviation unit in the Army that is now very concerned about its receipt of dollars. And we are inside the 48-hour window, have no language on what this bill is. They are limiting debate to 2 hours, which I think is a very powerful statement of the direction in which they choose to take legislation, that not only did we have a tax increase 11 days ago but spending is going to be without accountability. I intend to vote against this resolution if this resolution will not disclose the information that is necessary for us to do our job. Because, ultimately, they are going to create some real problems leading up to the foundation for this tax increase in 1,433 days.

Mr. DAVIS of Kentucky. One of the things that I would like to share as we come back to this issue of tax policy, again, I come back to my time walking the shop floor, and for me the one thing, you hear a lot of stories and a lot of perspectives, but for me it always came back to show me the numbers. Let's take a look at the truth, what reality is, and be able to make our decisions from there. Here is the truth about the impact on creating jobs for working families, good jobs, jobs where there would be opportunities for health care, to fund their children's education, looking to the future. In less than 3 years, because of this policy of allowing people and allowing and incentivizing small businesses to keep more of what they have earned, the U.S. economy has grown by $2.2 trillion. Let's put that in perspective for a moment. That is larger than the entire Chinese economy. That is the growth of the United States. There is a lot of concern about international trade in this global economy. Just in 3 years, our increase in economic growth is bigger than the size of the entire economy of our largest international competitor. It is much larger than the total economic size of India, Mexico, Ireland, and Belgium. And I think the issue here at the end of the day is being able to allow people to keep more of what they earned, to create taxpayers, not raise taxes, because the proof is in the numbers. The proof is in changing opportunities. Yes, we are going through a time of economic adjustment, but at the same time record job creation as our economy adapts to the 21st century to compete effectively, and that is the future that our kids are going to have.

Mr. DAVIS of Kentucky. When you talk about creating strong families, I comment on our good friends and neighbors back in Kentucky, Mike and Vonna Drake. They typify Americans living that dream of being able to pursue their own opportunity. Mike works as a pilot; Vonna is a nurse. Their children are friends with my family. I have watched their kids grow up through the years. These policies that seem so arcane, reading about them in the news or some of the shrill rhetoric that we hear during political campaigns, have a real impact on their flexibility and ability to invest in their children's future, let alone decisions that they might make regarding their futures and careers. In 1,443 days, my neighbors are going to have a $2,000 tax increase. They have two children. The $500 per child tax credit that was increased to $1,000, recognizing the cost of raising a family, the cost of investment in all of the needs of our children, and not simply food and clothing, but education and activities to grow them and develop character and to strengthen them for the future. That will revert by $500 per child. Now they will have an additional $1,000 just on that alone. Because they are married, they attend church, they are committed to their faith, they are a great example of a family in our neighborhood and community, just based on the fact that they chose the course to get married, their taxes are going to be increased or they are going to have a tax penalty of 12 percent. To your point, we need to encourage policies that will empower and strengthen families and will create taxpayers, and that will pass on that work ethnic to the next generation that made the Drakes a successful, value-adding American family. Not only do they serve their community now in their church, Vonna serves as a nurse, Mike is an aviator in the Army. He went in out of high school, got himself educated and pursued a professional career in aviation. He is a valuable member of our community. And we need thousands and thousands of families across our districts because they are the ones who bear the burden. They are the ones who make the investment, as President Clinton likes to say. And I think of all of the dollars lost by investing in areas where it was going to create no future and create no value. At the end of the day, unless we bring about fundamental changes in accountability, in 1,443 days this economy is going to be hurt. My friends and neighbors are going to be hurt. Small business job creation opportunities are going to be hurt because of keeping people from having that opportunity to invest and to build a future for themselves.

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Mr. Speaker, I thank the gentleman from Pennsylvania. One of the things I do want to share is I appreciate his leadership on this critical issue that often gets lost in much of the noise that we hear in politics of the moment. As you and I have shared before, what happened on election day, unbeknownst to the vast majority of Americans, is that with the change in majority, every working family in the United States of America voted themselves, or what was voted for was a tax increase of over $2,000 a year for families making between $30,000 and $50,000 a year. We have been in the business world and worked out there creating jobs, and we understand the issues relating to health care. In fact, when we look at the bigger picture from the standpoint of job creation, I think about my oldest daughter who is in her third year of college and has started her practicum now as an education major. She is working 2 days a week in a local high school in our home county teaching. Where is the revenue going to come from to pay for her health insurance, to provide for her future as she teaches students in the generation coming behind? Ultimately, it is going to be job creation and economic growth that comes from policies that will stimulate that and focus on making our economy more competitive for the long term. One of the things that I think you have emphasized is that the government is the best steward of money. The American people should be able to keep more of their own money, and we have proven time and time again, by allowing people to keep more of their own money and creating taxpayers instead of raising taxes, we actually get more revenue into the Federal Government. One of the things I would like to read into the record tonight which is very important for some of these policy discussions was an editorial in the Wall Street Journal regarding surging revenues, and I think it is important to note when we create taxpayers and don't raise taxes, government will have the revenue that is necessary to function. There is a fundamental world view difference between the parties on the role of government. Liberal Democrats believe the government needs to be paternalistic in telling us how to run our lives to make these decisions. The reality is that by allowing people to keep more of their own money, which is a bedrock Republican principle, we will make sure that people can make the decision on the spot, they understand the impact of that. I look back at the time when I started my business. I look back on the decisions we had to make, and we understood everything in terms of the cost that we had, the obligations that we had to our employees, the commitments that we made to each other to keep that money, moving forward to keep us employed to strengthen the business. At the same time, that was when President Clinton in 1993, our first full year in business, allowed us to make an investment in the government that dramatically increased the taxes not for me and the company, but for every member of our team. I think about all of those literally hundreds of thousands of dollars over the following decade. Had those been allowed to stay there, that would not have been simply revenue that the government lost, it would have been more employees, more people who would have been out there generating revenue and creating jobs and helping to keep our economy strong. This editorial that appeared in the Wall Street Journal on January 17 highlights this and talks about the surging of revenues. What we need to do from the standpoint of Congress is to empower people, not to constrain them. It says, ``The myth persists in some media circles that the Federal budget deficiency is surging or ballooning or something terrible, all of which is served up as ammunition for those in Congress who want a tax increase.'' As an aside, I make a parenthetical statement and say we are now a little over 1,400 days away from a very, very large tax increase that will happen unless Congress takes action. ``At the risk of being drummed out of the guild, we thought you'd rather have the real story. ``The deficit has in fact declined by some $165 billion over the last 2 fiscal years, and according to the most recent data has continued to fall in the first quarter of fiscal 2007. The latest Treasury estimates for January show that tax receipts in December were $18 billion higher than a year earlier, helping to boost the budget surplus for the month to $40 billion, up from $11 billion a year ago. December is typically a good month for revenues due to year-end tax payments. ``Meanwhile, for the first 3 months of fiscal 2007 through December, revenues climbed 8.1 percent, building on double-digit revenue increases in the previous 2 years. Corporate income taxes were up a remarkable 22.2 percent in the first fiscal quarter, showing that the government continues to grab a nice chunk of rising business profits that so many of our politicians like to deplore. Individual income taxes rose 8.8 percent, thanks to strong wage and salary growth. Much of this revenue comes from `the rich,' believe it or not. ``In the most surprising budget news, Federal spending was nearly flat in the first fiscal quarter. This was despite a 22.1 percent increase in Medicare spending due largely to the new prescription drug benefit, and a 10.7 percent increase in defense spending. Those increases were offset by lower spending for flood insurance and disaster assistance compared with the peaks of post-Katrina payments a year ago. So the first quarter deficit was $85 billion, down sharply from $119 billion a year earlier. ``All in all, despite huge outlays for wars in Iraq and Afghanistan, the Nation's fiscal picture is brightening. We hate to ruin the press corps's day with such cheerful news, but there it is.'' That article shows clearly this contrast between the perception that is created with the politics of fear, the politics of class warfare, and what I would like to call the politics of reality and truth. The one thing that we need to remember is the ultimate key to the economic success to our children and their children in the future is not going to be big government, it is not going to be large solutions and increases in taxes, taking away that extra benefit that working families have, but it is going to be allowing them to keep more of their own money. I think it is critical that we do this. It is critical to funding many of the programs that we do, be it defense, be it education, ultimately comes from somebody who has a job who is not a government employee, somebody out there in the economy creating a job to make that difference and provide that revenue by adding that value that funds all of the critical infrastructure. Our goal must be to create taxpayers, not raise new taxes. And I think the one thing that we see, and it is one thing that I appreciate my colleague from Pennsylvania taking great leadership on this issue, is to shine a light of truth onto the fact that the Democrats are going to raise taxes. They are committed to that. We are a little over 1,400 days away from that taking place if Congress does not act, and it is critical that we act to preserve this one thing that has generated so much revenue for the government that allows us to bring the deficit down and control spending and ultimately provide a future for our children.

Mr. DAVIS of Kentucky. And I would add one point on that. We have 10 times that number of folks in my district in Kentucky. I think there is a bit of a double standard on Samoa, too. Though they would be given the vote on the ability to raise taxes, they were denied the fairness on the minimum wage that the Speaker had programmed in for a large company in her district to ensure there would be a double standard. I think one of the things that is important to understand from somebody who worked in manufacturing after my military life is, and I have talked to many workers in the energy industry in my own district, they are dismayed, regardless of their party, be they Republican, Democrat, union, nonunion, to find out that this legislation that the Democrats passed last week, I would say forced through without regular order and debate, without discussing the impact on working families, to find that the energy industry is not manufacturing.

Mr. DAVIS of Kentucky. To the gentleman from Texas' point, my constituents, who are members of the International Boilermakers, from a bipartisan standpoint, we have a positive and proactive relationship with our boilermakers and our professional trades in the Fourth District of Kentucky. But it is my boilermakers, my pipe fitters, my millwrights and steelworkers, ironworkers, my operating engineers, my Teamsters, anybody who is affiliated in the energy industry is no longer considered in manufacturing. What that means for the average working family is a hidden tax increase, because the tax credits that would go for training and professional development, that would relate to a provision of health care, nearly 80 percent of manufacturing employees are covered with full health benefits. In my company we covered every single family with health benefits. The economic incentives are now removed, and it is no different than treating those in our critical bedrock base industry that drives not only manufacturing, drives the automotive industry, drives utilities, drives the transportation infrastructure of this Nation, is now being told they are not manufacturing, they are not value added. Somehow they are a nemesis. Again, I come back to the fact of this issue of class-warfare politics. Who gets affected by the tax increases that are buried in that bill? It is not a simple issue of trying to say these are tax breaks for some nebulous, super-rich oil executives. Here is what happens: The entire supply chain is affected. This does not hurt the large international global energy producers, the international oil companies. Who does it hurt? It hurts our wildcatters for natural gas, our small natural gas producers, our small oil producers, the investors. It hurts the supply chain of manufacturing and fabrication industry that supports the oil industry. Outside of any refinery, one will find a very large base of welding, fabrication, machine tool operations, toolmaking, maintenance. Then we have around that circle there the provision of parts, the supply chain of manufacturers' representatives for components that come into the industry. And then who else is affected by that? It is the small business owner. It is the distributor of gasoline and oil and energy products. It is the parts manufacturer for vehicles. It is the convenience store operator who is affected by that. And ultimately all of these people who I have mentioned so far in the chain are taxpayers. They are contributing to the public welfare and public infrastructure. Who is going to be lost when we lose those taxpayers because we eliminate those jobs by what seems to be a good thing on the surface but is very hurtful? We are eliminating funding, in effect, that provides for law enforcement, provides money for education, and provides money to deal with transportation and infrastructure, that funds the operation of government. And ultimately it is a regressive issue and it comes back it your fundamental point: When we leave money in the hands of taxpayers, they will invest it, they will save it, or they will spend it in such a way that we create taxpayers and we don't need to raise taxes, and I think the numbers bear that out.

Mr. DAVIS of Kentucky. If the gentleman would yield on one point to emphasize this. Again, I come back to the issue of the politics of fear versus the politics of hope and a practical and truthful vision of what the future is. Again, I come back to my real-world experience in manufacturing, which wasn't as a Democrat or a Republican, it was simply as an operations person. The average manufacturing company in this country, gross profit is about 7 percent per year if they are successful. That is an important thing to understand, if they are successful. The oil companies who right now are achieving record profits and are being portrayed as these great robber barons, and I am going to come back to my district here in just a minute, are making slightly over 8 percent gross profit. So they are 1 percent higher than the average manufacturing company in terms of truthful and real numbers versus the hype, versus the rhetoric and the emotion. Who actually gets hurt by this foolish bill that was passed last week on a motion without regular order? Democratic friends of mine shared privately they are extremely upset about the fact of adverse economic impact that it had on their districts. I can tell you the impact on our district. One of our larger employers in the Fourth District of Kentucky, the Marathon refinery, which has many, many first- and second-tier vendors that do work with them, this was a huge tax increase on their ability to refine and produce oil that directly affects our transportation industry. Their largest customer in Kentucky is the worldwide air hub of United Parcel Service, a great job creator in the Louisville area. It is one of the largest employers in the Commonwealth of Kentucky, really in the tristate area. So what was done by this seemingly well-meaning issue to support energy independence has actually hurt a local job-producing entity and affected the entire supply chain. And I think the one thing that to me the reality is not the hype, not the emotion, not the class warfare, but it is the old comment: Do the numbers. What are the real numbers? What is the impact? A job-creating manufacturing entity, a job-creating technology entity will have a 3-1 multiplier for its community on average. That is the convenience stores, the retail outlets, the personal service companies. It is the other types of businesses that supports the public infrastructure, law enforcement, education, transportation and public works.

Mr. DAVIS of Kentucky. The property tax base that pays for the schools. In my home county, which has got a growing and thriving manufacturing industry, that payback is 7-1. One of the reasons we have some of the top schools in the Commonwealth of Kentucky is the fact that we have a tremendously powerful economic engine that ironically is directly affected by energy prices and access. One of the issues in this so-called bill, which was really a tax increase. Calling it energy independence is not only disingenuous, and maybe that points back to the discussion which took place earlier this evening in the House, but it really misrepresents the entire reality of what is happening. Barack Obama from Illinois, someone that would not be considered a strong conservative by the standards of human events, but is a very committed Senator, and Jim Bunning, who is the junior Senator from Kentucky, cosponsored a bipartisan bill for energy independence that focused on an alternative source which is one we really have; instead of building lots of windmills and solar generators in the colder areas, was to use the resource that we have. And coal is environmentally friendly, it is a proven technology, and he was attacked from the left from environmental groups that strongly supported this bill that hurts jobs for being bad on environmental issues because he would support this very thing that he sees the facts on that would create a second industrial revolution in this country. And it all comes back to the reality of what the role of government would be here in the long run, missing the truth that we need to allow people, those who create the jobs, to keep more of their own money, to allow working families to keep more of their own money to invest.

Mr. DAVIS of Kentucky. I think one thing to put into perspective is the real question, what I like to do is come back to the facts and the numbers. There is a lot of talk about, again, the politics of fear, the politics of class warfare, who actually will be rewarded or hurt by these tax cuts or tax increases. Here is the reality in a practical sense. The tax cuts that have been put in place have created record revenues for government because of job creation. Millions of people were taken off of the tax rolls all together. The floor for tax payments was pushed upward. The 10 percent tax bracket was created for those who are just starting out, those who are just in transition, so their burden would not be unduly high. All of that goes away. What are some other things that go away? One of the things that I think is kind of interesting, as somebody who is the grandson of a teacher, the husband of a teacher and the father of a soon-to-be-certified teacher, how does it impact education? Well, let us look at this. We passed an extension in the last Congress, carrying on above-the- line deduction for higher education expenses. The provision allows taxpayers to deduct up to $4,000 depending upon their income for higher education expenses to improve their lives in lieu of claiming the hope or lifetime learning tax credits. The deduction can be claimed by all individual taxpayers regardless of whether they itemize and use specific deductions or do not itemize, and it is extended for 2 years through 2007. The incoming chairman of the Ways and Means Committee put this, along with an entire bushel basket of tax incentives for working families, for people to improve their lives, and that goes away. For teachers, we passed an above-the-line deduction that became law for teacher classroom expenses. I remember when I was a young officer in the Army and my wife was teaching school. She paid for a tremendous amount of classroom expenses out of her own pocket because she cared about her students and wanted to invest. What is the response of the Republican Congress to that was to give them the incentive to invest and to know that that will not be a personal penalty for them to make that investment in their children, to make that investment in their future. It is a provision that allows teachers to deduct up to $250 of out-of-pocket costs incurred to purchase books, supplies and other classroom equipment. It is available to all individual taxpayers, regardless of whether they itemize their deductions or not. This provision was extended for 2 years through 2007. That is in that bushel basket of things that go away when we enact these tax policies, these tax cuts that ultimately will be in full force in 1,440 days. As a former small business owner who helped companies to create jobs in the manufacturing industry and operations, we dealt with many entry- level people. People would come in with difficult tasks or in transition. We passed a welfare-to-work tax credit that would incent small business owners and employers to create jobs, to give people a leg up, to give them an opportunity to create value, to become a taxpayer, not a burden on the system, to create a future for their children. Employers can claim that welfare-to-work tax credit if they hire individuals who receive public assistance to help them move from a receiver to a giver. The maximum credit is $3,500 during an employee's first year and $5,000 during the second year. That incentive for small business owners goes away with this. All of these small things, these numbers that are hidden from the American people out of this politics of fear get lost in this whole issue, and ultimately, we need to allow people to keep more of what they earn to create that future. I appreciate your leadership on this issue greatly.

Mr. DAVIS of Kentucky. Heard that before.

Mr. DAVIS of Kentucky

Mr. DAVIS of Kentucky. Mr. Speaker, we both had the opportunities to pursue the American Dream, to start our own businesses and create jobs. I look back on the last time there was a large increase was in the administration that came in in 1993 that passed one of the largest tax increases in American history. What that meant to our business was less jobs, money that could have been reinvested and employed more people. The one thing we need to understand is that people know how to spend their money better than government does, to keep it in their local communities, to stimulate that local economy. And the tremendous increases in taxes just went to further Federal spending. I think the thing that we have seen by policies that allowed people to keep more of their own money is we don't raise taxes, we create more taxpayers. One of the things that is lost in much of the political noise that has gone on over the course of the last year is that revenues from income taxes have been at the highest point in American history because the most jobs have been created by allowing people to keep more of their own money. But in the aftermath of the last election, what most folks don't realize is that the average working-class family making between $30,000 and $50,000 a year has voted themselves a tax increase of over $2,000 that will take place in 1,446 days unless Congress acts as a majority. I invite members of the Blue Dog Coalition, those that are fiscal conservatives, to join together with us to ensure that those tax cuts stay in place. I have my son, Geoffrey, sitting behind me tonight who is 8 years old. I ask myself what kind of a country will he have. Will he have the opportunity to pursue that American Dream, to create jobs, to create a future and pursue his desire? That is what this is all about ultimately, providing personal freedom and discretion with their income to make a difference. We cut taxes in every walk of life. We encouraged families by eliminating the marriage penalty and we doubled the child tax credit so families with a large number of children would not be penalized, but made sure that they could make an investment in their children. We lowered tax rates for all Americans. We removed 10.6 million low-income earners from the tax rolls. To say that these tax cuts were simply for the rich was a myth because the person who benefited was the working family and small business owner who could put their dollars to work in their community to build a nest egg for themselves and ultimately to build a future. And what did it do on average? It returned $1,670 to the average taxpayer who took that money and spent it on personal needs or invested it, building a future for their children and their children's children. One thing that I found interesting when the resolution on tomorrow's energy vote came in, and I think we come from areas that are strong in manufacturing in Pennsylvania, Ohio, Kentucky, and Illinois. Energy security is one of the most important things that we are facing in the future of this Nation. We talk about it and we talk about initiatives that are going to create jobs coming from folks who have been in business. At the end of the day, what are we seeing, not only a tax increase in 1,446 days, but a tax increase on the American energy consumer that is coming by taxing domestic energy producers and pushing more business to Middle Eastern oil producers. I have some comments on some legislation that we have been working on, but I yield back for your comments on this.

Mr. DAVIS of Kentucky. Well, I think we need to put in real terms what is going to happen in 1,446 days, and that is a $2,096 tax increase for every working family in America. What does that translate into? For me, that translates into one semester of college tuition for my 21-year-old, who started student teaching this week. She is in her third year at Northern Kentucky University. And what does it hold for my son's future? What kind of opportunity is he going to have by restricting that annuity that could grow and remain strong in the future? If we look at it in the bigger sense and talk about energy security in this tax that is coming, that is going to hit people in their bottom line, in the pocketbook and at the pump, one of the things we got to experience working together on the Armed Services Committee, we see much of the money that America sends to foreign oil producers is sent to unstable parts of the world. It is sent to areas like the Arabian Gulf that are a hotbed of extremism and instability. We see what is happening in Venezuela right now, with a socialist dictator who has risen to power and threatening to nationalize the oil reserves and fundamentally to cut off America's gasoline supply. Fifteen percent of our gasoline comes from that part of the world. The one thing that I want to comment on, from that standpoint, is we need to reduce our dependency on foreign oil, to keep more of our dollars here. And there are tremendous initiatives and opportunities that we have today that we could do to address this issue in many ways. One of the things we have done in the Ohio Valley is to take advantage of the coal-to-liquid technology. It is a proven technology. South Africa produces 25 percent of their transportation fuel from coal. That is why we have introduced the Coal to Liquids Fuel Promotion Act of 2006. It is a bipartisan bill that I introduced with Nick Rahall. He and I share the largest inland port in the United States, where the majority of America's coal is transited outward. Pennsylvania produces a tremendous amount of coal. Think what we could do by decentralizing energy production, creating jobs here, and literally, as our floor leader, the majority leader in the Kentucky statehouse says, we could have another industrial revolution in the heartland of this country, creating millions of jobs, converting coal to liquids in an environmentally friendly manner, reducing our foreign oil dependency, stimulating jobs here, and giving our youth a future. And replicate that also with biomass, biodiesel, ethanol, and many other types of products. And I yield to the gentleman from Pennsylvania to follow on.

Mr. DAVIS of Kentucky. I just think one thing the gentleman from Texas brought up is very important for us to realize, and that is manufacturing jobs are the best benefit providing jobs we have for working families in this Nation. Eighty-four percent of manufacturing jobs provide full benefits, health care, retirement, opportunity for the future, and that sense of security. What this tax increase is going to do by addressing domestic oil producers is not simply a strike at a mythological big oil company. The international oil producers are not going to be affected by this. They simply have to step back and let the law of supply and demand take over. Who is going to be affected? The local oil producers, the wildcatters, those small investors in Kentucky, West Virginia, Texas, Pennsylvania, Illinois, and other States throughout the heartland that create jobs. In addition to that, dollars for research and development are going to be disincented. With a tax credit is the opportunity to reinvest that, to find new sources of oil, and more importantly develop new technologies that can bring it forward in a low-cost way and create more jobs. But it is not just the small producers. It will be the distribution chain. Those small refiners, like our Catlettsburg Refinery, which creates hundreds of jobs in northeast Kentucky and affects thousands of jobs in the local economy, will be adversely affected by this. It will impair their ability to grow and it will hurt the future for people there. Down the supply chain, the distributors of gasoline and petroleum products. And, again, it is not Big Oil. It is the local convenience store owner, the person who drives that replenishment truck going to the gas stations. It is the lawn care business that might be in somebody's neighborhood or the individual who is taking parts to the manufacturing company. It is going to be the person who distributes milk and food products. It will put a cost burden on every single consumer in this country. Not only will there be a tax increase, but there will be inflation as a direct result of this. Ultimately, it comes down to our consumers. Because if our farmers and manufacturers are all going to be burdened with this, ultimately it will pass to us. And what sounds good in reality is a big, big mistake, because it is taking money out of the economy, and it will send it elsewhere and will keep it away from incentives that will create jobs. We need to make investments in energy, in natural gas, and in oil. Natural gas is critical for our manufacturing economy. But the Democrats in Congress overwhelmingly voted repeatedly in the 109th Congress. Congressmen Conaway and Shuster and I saw this, where in fact one Member was chased down into our Cloakroom to change his vote after Hurricane Katrina against expansion of refinery capacity. We need to make sure that we have natural gas on the Outer Continental Shelf and we use the resources that we have here, like the Alaska National Wildlife Refuge, in an environmental friendly way to make sure that our economy, our future, is put first, so that children like the young man sitting behind me here can have a job and a future when they grow up. But what we see is this tax increase now and the tax increase in 1,446 days, and I yield back.

Mr. DAVIS of Kentucky. If the gentleman would yield. One thing I would like to point out, just having come from an entrepreneurial business background like you. The idea of working 100 hours would normally translate into about 3 days or 4 days worth of work, possibly 5 if you had really to get something done, if the product had to get out the door at the end of the month, if the system had to be implemented, if the equipment had been to be rigged and installed. And I think what we have here was somewhat misleading to the American people who expected 100 hours in the last Congress would have been accomplished in a very short period of time. But I think we are taking a more comfortable pace, doing 100 hours 2 hours at a time. Instead of having votes ending at midnight or 1 in the morning we are getting done at 3 in the afternoon now.