Martin Frost

Mr. FROST

Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from Missouri (Mr. Gephardt), the Democratic leader. (Mr. GEPHARDT asked and was given permission to revise and extend his remarks.)

Mr. FROST. Mr. Speaker, I am not prepared at this point to yield back the balance of our time. The minority leader is en route to the chamber, and he obviously wants to take part in this debate, and he should be given that opportunity. I reserve the balance of my time.

Mr. FROST. Mr. Speaker, we have speakers, but they are not present on the floor at this moment, so I would ask the gentleman to proceed.

Mr. FROST

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I think it is vitally important that this matter be approached on a bipartisan and objective basis. The two people who are involved, the designated chair and the designated ranking minority member, clearly are fair-minded and will proceed in a reasonable and forthright manner. I would urge other Members on the other side of the aisle to give the gentleman from California (Mr. Cox) and the gentleman from Washington (Mr. Dicks) the opportunity to conduct a fair and bipartisan examination into these vital questions. We will support this resolution. We would urge that this investigation be done promptly and fairly and in a bipartisan manner. Mr. Speaker, I have concluded my remarks. I urge adoption of the resolution. Mr. Speaker, I yield back the balance of my time.

Mr. FROST

Mr. FROST. Mr. Speaker, I yield myself 1 minute. Mr. Speaker, I urged at the beginning of the consideration of this resolution that people on the other side not engage in any public hanging at this point. These are serious matters. They deserve to be debated. They deserve to be resolved by this Select Committee in a serious bipartisan manner. My colleague from the State of North Carolina, when she got up to speak, talked about a contribution to the President from a Chinese official. There was no contribution ever made to the President from a Chinese official. There was a contribution made to the Democratic National Committee, which the Democratic National Committee said it had no knowledge of and returned. Let us lower the rhetoric and let us go on to the policy questions involved in this matter. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Condit). (Mr. CONDIT asked and was given permission to revise and extend his remarks.)

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, we are here today to establish a Select Committee on U.S. National Security and Military/Commercial Concerns with the People's Republic of China. A variety of allegations about our relations with China have surfaced in the press in recent months. These include the illegal transfer of missile technology to China by an American company, a substantial campaign contribution to the Democratic National Committee from a Chinese military officer through an intermediary, and the question of the effect of the political contributions by the CEO of an American company which manufactures satellites launched on Chinese missiles. At this stage, these are allegations and not proven fact. The purpose of this Select Committee is to determine the facts to the extent that this is possible. There are some Members on the other side of the aisle who would presume that every allegation ever printed or ever aired by the media is true. To do so does injustice to our colleagues who will serve on this committee and to the individuals whose names have appeared in the American press. The Democratic National Committee denied that it ever knew any funds received by it came from a Chinese military official and returned the funds promptly. The Justice Department has an ongoing investigation into the question of the possible illegal transfer of missile technology by the Loral Corporation and has not yet reached a conclusion. Mr. Speaker, the entire practice of licensing the export of satellites, manufactured by several U.S. companies, to be launched on Chinese missiles was initiated in the Reagan administration and was implemented and continued during the Bush administration. I would like to make perfectly clear that this practice did not originate in the Clinton administration, although the manner in which sanctions waivers had been granted is a legitimate matter for investigation. Further, Mr. Speaker, the CEO of Loral, Bernard Schwartz, who has made substantial contributions to the Democratic party has denied that there was ever any quid pro quo for contributions for sanctions waivers involved. On all these matters, Mr. Speaker, we should not presume a conclusion before the Select Committee has been authorized, its members named, and before it ever meets. Clearly, there is a valid reason for the establishment of this committee. We need to get to the bottom of all these questions. Hopefully, it will be done in an objective and fair manner and will not become a partisan witch-hunt. Mr. Speaker, I am particularly concerned that the mandate of this Select Committee is very broad, and I intend to discuss this issue when we debate the resolution creating the Select Committee. I am concerned as well about some of the unilateral authorities that have been granted to the chairman of the Select Committee. But right now, we are considering the rule for debate on the resolution creating the Select Committee. I hope my colleagues on the other side of the aisle will refrain from engaging in a public hanging of anyone involved in this very important matter until such time as a Select Committee has met and made its findings and recommendations to the House. Mr. Speaker, while I support this closed rule, I note that my Republican colleagues chose not to allow for the consideration of a very sensible amendment relating to the funding of the Select Committee which was proposed by the gentleman from California (Mr. Condit). Consequently, it is my intention to oppose the previous question in order that I might be able to offer a substitute rule which would make the Condit amendment in order. That being said, Mr. Speaker, I have confidence that the designated chairman of this Select Committee, the gentleman from California (Mr. Cox), and his designated ranking member, the gentleman from Washington (Mr. Dicks), will conduct themselves and the proceedings of this Select Committee with the greatest degree of integrity and bipartisan spirit. They are both known as faithful to the principles of the political parties to which they belong, but more importantly, they are known for their fairness and their ability to work for the best interests of our great Nation. Mr. Speaker, as I have said, the Democratic members of the Committee on Rules, based on what has happened in the House during the past year and a half have a number of concerns about the provisions of H. Res. 463. I will address those concerns when we begin the debate on that resolution. Mr. Speaker, I reserve the balance of my time.

Mr. FROST. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, I would ask the gentleman who just spoke, does the name Warren Harding mean anything to him? Does the name Grant mean anything to him? Does the name Nixon mean anything to him? He made the blanket statement that this is the most scandal-ridden administration in the history of the Republic. I think the gentleman needs to consult some history books. Mr. Speaker, this vote on ordering the previous question is not merely a procedural vote. A vote against ordering the previous question is a vote against the Republican majority and a vote to allow the opposition, at least for the moment, to offer an alternative plan. It is a vote about what the House should be debating. The vote on the previous question on a rule does have substantive policy implications. It is one of the only available tools for those who oppose the Republican majority's agenda to offer an alternative plan. Mr. Speaker, I include for the Record the amendment by the gentleman from California (Mr. Condit).

Mr. FROST

Mr. FROST. I yield to the gentleman from Oklahoma.

Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio (Mr. Traficant). (Mr. TRAFICANT asked and was given permission to revise and extend his remarks.)

Mr. FROST. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Stark).

Mr. FROST. I thank the gentleman. Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott), a distinguished member of the Committee on Ways and Means. (Mr. McDERMOTT asked and was given permission to revise and extend his remarks.)

Mr. FROST. But he voted for it anyway.

Mr. FROST. Was he concerned at the time that he voted for the legislation about the amount of pages that were being added to the code?

Mr. FROST. 400. Did the gentleman vote for the legislation that added those pages?

Mr. FROST. Mr. Speaker, I ask that my colleagues vote no on the previous question so that we can take up actual tax reform. Mr. Speaker, I yield back the balance of my time.

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I hate to engage in elementary civics lessons, but I think it is important that we understand, and particularly people outside this Chamber understand, how the Congress of the United States works. The Republicans are in the majority. They control what bills come to the floor through the Committee on Rules that I serve on, and they also control what bills are reported out of the Committee on Ways and Means on which the gentleman from New York (Mr. Rangel) serves. They are in the majority. If they want to change the Tax Code as the majority party, they have the ability to report a bill out of the Committee on Ways and Means changing the code. Whether it is the flat tax, whether it is the value-added tax really does not make any difference. They are in control. They can bring a bill to the floor. Mr. Speaker, they lack the courage of their own convictions. They will not bring a bill to the floor. Why will they not bring a bill to the floor? I do not know. Maybe they have a disagreement inside their own caucus, maybe some of these ideas are a little bit crazy, maybe they do not have enough votes to pass anything. I do not know why they do not bring a bill to the floor. They are in charge; they have the votes. If they want to reform the Tax Code, bring a bill for this House to vote on. What do they do? They risk financial chaos in this country by tearing down the current code which admittedly has a lot of problems and needs to be fixed and not offer a single alternative to the current code. If they really want tax reform, bring a bill to this floor and have us vote on it. Mr. Speaker, I urge Members to vote no on the previous question. If the previous question is defeated, I will offer a substitute to the rule that will allow for a responsible debate on real tax reform for the Tax Code, not simply election year grandstanding. The rule I will offer will make in order the Armey flat tax proposal as base text. It will also make in order 2 substitutes to that bill, the Gephardt simplified tax bill and the Tauzin sales tax legislation. Members will have the opportunity to vote up or down on all of these proposals. The substitute that passes and receives the most votes will be the one that is considered as adopted. Mr. Speaker, if we are serious about reforming or replacing the current Tax Code, let us not fool around with meaningless and irresponsible legislation that could jeopardize our economy and our government. Let us take action on real legislation that addresses the issue, not frivolous legislation that does nothing except provide a handy campaign slogan. Mr. Speaker, I ask unanimous consent to insert the text of my substitute rule and extraneous materials at this point in the Record.

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to ask the gentleman who was in the well a question. I did not want to intrude on his time but I would like to ask him a question if I may. The gentleman in the well pursued a very distinguished career as a professional athlete prior to being elected to Congress. Many professional athletes as a part of their salary negotiations come up with deferred compensation. I would ask the gentleman if in, during his career, if part of his compensation was deferred compensation that will be paid out in a future year.

Mr. FROST. I would only ask the gentleman one other question. He talked about 100 pages being added to the code last year.

Mr. FROST. I would ask the gentleman why he participated in all those tax shelters. Was this on the advice of counsel? Was this on the advice of his agent? He is a grown man and could make those kind of decisions of course in terms of how he conducted his own affairs.

Mr. FROST. Mr. Speaker, I reserve the balance of my time.

Mr. FROST. I just asked my distinguished colleague who apparently received a considerable tax advantage in his contract negotiations during his professional career, which he certainly was entitled to do, whether he is prepared when we have the absence of a code to forgo all the tax advantages that he secured during his playing years.

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, one of our previous speakers, the gentleman from California (Mr. Stark) characterized this legislation as silly. It would be one thing if this were just silly. What the Republicans are proposing is dangerous. What they want to do is they want to end the code and have nothing in its place. If that were to pass and become law, and I do not believe it will become law, but if it were to pass and become law to eliminate the code, with nothing in its place, there will not be a person in this country who will be able to purchase a home and rely on any type of mortgage deduction, there will not be a city or a county that will be able to issue a bond to build a school or build a highway. This is not just silly, this is dangerous. What the Republicans are suggesting is an enormous dice roll that could lead us to become a third-world banana republic with no Tax Code, with no structure in place, simply because they want to make a rhetorical point. What we do here on this floor is serious business. We are not here playing games. With this bill, the Republicans, who do not have the courage to bring a proposal to the floor, a reform proposal, are saying to the American public they do not care if this economy crashes and burns. If they cared about the economy of the United States, they would do the right thing, they would bring forward a reform proposal and say, here is what we stand for. Here is what we want. Vote it up or down. But they lack the courage to do that. What they want to do is say, let us risk no one being able to get a home mortgage, let us risk not a single municipality in this country being able to issue a municipal bond, so that they could say, oh, we did something; we abolished the Tax Code. There are a lot of changes that need to be made in our Tax Code. Everybody understands that. And we have a proposal that we are prepared to offer. I would advise my colleague on the other side that the speaker that we had been anticipating has come on the floor, so that I will need to yield some time to him. And then I will have to reclaim my time because I have one point I have to make before I close. Mr. Speaker, I yield 5 minutes to the gentleman from New York (Mr. Rangel), the ranking Democrat on the Committee on Ways and Means. (Mr. RANGEL asked and was given permission to revise and extend his remarks.)

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, this bill, of course, takes the cake. My Republican colleagues want to scrap the Tax Code lock, stock and barrel but are proposing nothing to take its place. Does this demonstrate a commitment to the responsibilities of governance? I think not, Mr. Speaker. This proposal, coming just 5 months before an election, is nothing more than a gimmick. I know it, you know it, Mr. Speaker, and the American people know it. Mr. Speaker, I have spoken with a number of prominent businessmen in my Congressional District in Texas about the idea of scrapping the Tax Code. And, quite frankly, Mr. Speaker, many of these individuals are Republicans themselves and hold no fondness for the current code. But, Mr. Speaker, to a person they have told me that scrapping the code without a substantial proposal ready to take its place is folly. Not just folly, Mr. Speaker, such an idea is dangerous. Certainty and predictability are absolutely critical to sound business decisions, and the idea that we are going to do away with our existing tax structure without holding a single hearing on what might come next will do little to engender confidence in the business community. What are we saying to America's businessmen and women? And it is not just business that worries about this idea. What about the countless individual taxpayers who make any number of decisions each year based on what might be the tax implications for them? Who will want to buy a home not knowing if there is a mortgage deduction? The National Association of Realtors said, ``Eliminating the current code without having a workable alternative in place would be disastrous for America's homeowners.'' We can only guess about the chaos this legislation will create in the housing market. Not knowing if mortgage interest and property taxes will be deductible certainly has the potential to create wild fluctuations in home prices, in response to rumors and speculation about what might or might not happen to the new tax system. Mr. Speaker, 75 percent of the families in this country who claim the mortgage interest deduction have incomes of less than $75,000. What are we saying to them? What are we saying to all the industries who depend upon the housing market for their livelihood? Without a replacement for the Tax Code on the books, Americans planning their retirement will not know what to do about investments for the future. Are KEOGH plans, or IRAs, or Roth IRAs going to be available, if and when the Congress gets around to implementing a new system of taxation? What will happen to money in their company pension plan? And, of course, do we really believe that Congress is going to be capable of passing a new tax plan when Congress cannot even pass a budget on time? Corporations will delay investments in new plants and equipment if they do not know what will happen to cost recovery rules. Schools and hospitals that depend upon tax exempt bonds to finance construction and maintenance will be in limbo. Who in 1998 will want to buy a tax exempt bond if the exemption is scheduled to end in the year 2002? And who knows what will happen next? States and localities will have a harder time coming up with capital, because investors thinking of buying municipal bonds will not know what will happen to their money. What then are we saying to everyone in the United States? I will tell my colleagues what we are saying, Mr. Speaker. We will be saying that the Republican Congress is willing to play a reckless game of chicken with the lives of real Americans because they will not otherwise take up real tax reform. The Republican majority is willing to promise reform without offering a clue of where they might be heading. This is bad business, Mr. Speaker. If the Republican majority really wants to reform the code, then let us do it and let us do it now. There are plenty of interesting proposals that have been tossed around for years, so let us bring them up, debate and vote. I would like to offer the Republican majority the opportunity to vote; to vote against ordering the previous question and to allow me to offer a substitute to the rule. My substitute would allow the House to consider the flat tax advocated by the gentleman from Texas (Mr. Armey), my colleague; the value added tax advocated by the gentleman from Louisiana (Mr. Tauzin); and the tax reform package proposed by the Democrat leader, the gentleman from Missouri (Mr. Gephardt). Those are three very interesting proposals that the House should consider if we want to force the issue of reforming the Tax Code. Mr. Speaker, I urge my colleagues to vote ``no'' on the previous question. If we do not prevail there, and a majority of the House decides instead to bring up this reckless proposal, I would urge my colleagues to oppose it. The Republican leadership, in an effort to retain its majority, has brought us a dangerous bit of election year posturing that does not deserve to pass. Mr. Speaker, I reserve the balance of my time.

Mr. FROST. Is the gentleman prepared to forgo the tax advantages that he negotiated as a part of his contract when he was a professional athlete if we wind up having no code? If we are sunsetted and we have no code, then he would lose all the advantages that he negotiated during his playing career and presumably would have to realize that as current income in one year.