Wally Herger

Mr. HERGER

Mr. HERGER. Mr. Chairman, I rise in strong support of the Ose amendment, which ensures that the Federal Government makes good on its obligation to our rural communities. Lands owned by the Federal Government cannot be taxed by local governments. In some counties in Northern California, the congressional district I represent, the Federal Government owns up to 75 percent of the available land. In other areas of California, the State and Federal Government ownership reaches 90 percent. These counties already struggle to fund critically important public services, public education, law enforcement, search and rescue operations, waste disposal, and a variety of other public health and safety programs. Yet this bill proposes almost $1 billion per year for 15 years for even more Federal land acquisition, imposing even greater hardships on the citizens of these counties. Mr. Chairman, where does it stop? PILT is intended to compensate counties for this lost revenue, but each year it is desperately underfunded. Nationally, it receives only 41 cents on the dollar. H.R. 701 would provide only a portion of the total that is needed to fully fund the Federal commitment, and it would take even more land from the American citizens and the county tax rolls, further limiting their ability to meet their needs. This amendment seeks to correct that inequity by ensuring that the Federal Government fulfills its obligation before it takes even more away from the families of rural America. I urge the Members to support this Ose amendment.

Mr. HERGER

Mr. HERGER. Madam Chairman, I rise in strong support of this amendment, which will provide common sense protections and peace of mind to property owners affected by this bill. H.R. 701 enhances the Government's appetite for an ability to own and control even more of our country's land even while reducing the amount of private property individual Americans can own. Madam Chairman, where does it stop? The Federal Government already owns nearly one-third of the total land base in the United States. In the West, Government ownership is staggering. They control 54 percent of the land in 12 western States. In some counties in California, it is 90 percent. If they want more land, great, buy it in the East. The Government only owns 6 percent of the land east of the Mississippi. We are being reassured that this bill will not coerce the sale of private land because it has a willing seller requirement. The idea of a willing seller is a myth. The reality is that, with enough government pressure, a private landowner will become willing to sell as the rights to use his land are squeezed by burdensome Federal, State, and local government ordinances, policies, and laws. The Federal Government can and does regulate property owners into submission, making them willing sellers only after the value of their land has dramatically fallen and only after they have lost their ability to earn a living. Madam Chairman, H.R. 701 has grave consequences for private property ownership. I urge my colleagues to support the protections proposed in the Pombo amendment.

Mr. HERGER

Mr. HERGER. Mr. Speaker, during consideration of the 1986 Tax Act, Congress made a decision that enabled certain Qualified Professional Service Corporations to retain use of the cash accounting method for tax purposes. I am introducing legislation today that is intended to ensure that companies currently eligible to use cash accounting are able to continue doing so. This is required due to state of the art changes in the type and delivery of those professional services required for developing and implementing the vital water, transportation, infrastructure, communications, and environmental projects upon which our citizens and our economy depend.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I am introducing legislation today, along with Mr. Matsui and Mrs. Johnson, to ensure that needless Treasury regulation does not add unnecessarily to the cost of housing. The need for this legislation is brought about because the Department of Treasury has issued proposed regulations to provide guidance on the definition of CIAC as enacted under the Small Business Job Protection Act of 1996. Despite the fact that Congress specifically removed language concerning ``customer services fees'' in its amendment in 1996, the Department added the language back into the proposed regulation specifying that such fees are not CIAC. They then defined the term very broadly to include service laterals, which traditionally and under the most common state law treatment would be considered CIAC. Because state regulators require all of the costs of new connections to be paid up front, these regulations will force water and sewerage utilities to collect the federal tax from homeowners, builders, and small municipalities. Because they collect it up front, the utility is forced to ``gross up'' the tax by collecting a tax on the tax on the tax, resulting in an over 55 percent effective tax rate. This bill will clarify that water and sewerage service laterals are included in the definition of contributions in aid of construction (CIAC). It clarifies current law by specifically stating that ``customer service fees'' are CIAC, but maintains current treatment of service charges for stopping and starting service (not CIAC). Because this is a clarification of current law, the effective date for the bill is as if included in the original legislation (Section 1613(a) of the Small Business Job Protection Act of 1996). Mr. Matsui and Mrs. Johnson along with many of our colleagues here in the chamber, worked hard over the course of a number of years to restore the pre-1986 Act tax treatment for water and sewage CIAC. In 1996, we succeeded in passing legislation. It was identical to pre-1986 law with three exceptions. Two of the changes were made in response to a Treasury Department request. The third removed the language dealing with ``service connection fees'' primarily because of potential confusion resulting from the ambiguity of the term. The sponsors of the legislation were concerned that the IRS would use this ambiguity to exclude a portion of what the state regulators consider CIAC. As part of our efforts, we developed a revenue raiser in cooperation with the industry to make up any revenue loss due to our legislation, including the three changes. This revenue raiser extended the life, and changed the method, for depreciating water utility property from 20- year accelerated to 25-year straight-line depreciation. As consequence of this sacrifice by the industry, our CIAC change made a net $274 million contribution toward deficit reduction. It is my belief that the final revenue estimate done by the Joint Committee on Taxation on the restoration of CIAC included all property treated as CIAC by the industry regulators including specifically service laterals. In an October 11, 1995 letter to Senator Grassley the Joint Committee on Taxation provided revenue estimates for the CIAC legislation. A footnote in this letter states, ``These estimates have been revisited to reflect more recent data.'' The industry had only recently supplied the committee with comprehensive data, which reflected total CIAC in the industry, including service laterals. In urge my colleagues to join with us in sponsoring this important legislation in order to keep the Department of Treasury from further burdening the American Homeowner.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I would like to outline the six points of the Republican budget plan and compare it a bit with the Democrat plan, or the plans they have had over the last 30 years when they were in power. Number one. Last year the House of Representatives passed a measure that I sponsored, the Social Security Lockbox, by an overwhelming 416 to 12 vote. This budget reinforces that effort by ensuring that Social Security dollars will not be spent on unrelated programs. It protects 100 percent of the Social Security. In this budget all of the $166 billion Social Security surplus is off limits to Clinton-Gore spending. This will be the second year in a row that Republicans have protected the Social Security surplus. Secondly, we are strengthening Medicare with prescription drugs. It sets aside $40 billion to help needy seniors to be able to afford their prescription drugs; and at the same time, it rejects the $18.2 billion Clinton-Gore Medicare cuts. The other side would like to cut Medicare. Point three. Our Federal public debt stands now at $3.6 trillion. This equates to $56,000 for the average family of four. This year, nearly $1,000 in taxes from every man, woman, and child in the United States will be used just to pay the interest on the debt. The Republican budget resolution leads our Nation on the path towards eliminating public debt by paying off $1 trillion over the next 5 years. Our budget discipline has already repaid $302 billion since 1998. Mr. Speaker, those are numbers; but paying off the public debt is not just about numbers, it is about people. It is about the future of our Nation. It is about children living in my northern California district and elsewhere in our Nation that are saddled by this debt unless we pay it off. This budget takes the bold step for ourselves and future generations by taking on the challenge to pay off this national public debt. The next point it promotes, point number four, is tax fairness for families. Farmers and seniors. This is not for fat cats, as the other side would have us believe. It provides for those in the House-passed marriage tax penalty provision who, on average, pay $1,400 extra just because they are married. It also provides for a small business tax relief and education and health care assistance amounting to $150 billion, and it rejects the $96 billion growth tax increase over the next 5 years in the Clinton- Gore budget. Number five. It restores American defense 6 percent more than last year for our overdeployed armed forces. The GOP defense budget provides $1 billion more than the Clinton-Gore plan. And finally, number six, it strengthens support for education and science, 9.4 percent more for elementary and secondary education, and IDEA increases of nearly $2 billion. Also, it fights cancer, AIDS, diabetes, and other diseases with $1 billion more for NIH, as well as $1 billion extra for basic research in biology, science, engineering, and math. Mr. Speaker, this is a good budget resolution; and I urge my colleagues to reject this motion to instruct.

Mr. HERGER

Mr. HERGER. Mr. Chairman, as this first point shows, this Republican Congress has ended the 30-year, $655 billion raid on Social Security. As the next chart shows, regrettably, Congresses of the past raided Social Security to pay for unrelated Washington programs. This was wrong, and this Republican Congress has done something about it. Seniors deserve to have their Social Security protected. First, Congress adopted the Contract with America that led to the first balanced budget in more than 30 years. We moved from $200-plus billion deficits to surpluses by 1998. But we knew and the gentleman from Ohio (Chairman Kasich) and the Republican leadership and the American public knew that we could do more. With their support, the House passed, despite the opposition of the Clinton-Gore administration, legislation I sponsored, the Social Security lockbox, by an overwhelming 416-12 vote. As this next chart shows, last year President Clinton and Al Gore only agreed to set aside 62 percent of the Social Security surplus and proposed to spend the other 38 percent, or $52 billion, of Social Security on risky spending schemes. But we knew 62 percent was not good enough and refused to allow this reckless Social Security raid to continue. Even with the overwhelming endorsement of the Social Security lockbox vote, again this year the Clinton-Gore administration budget would have raided the Social Security Trust Fund by an additional $60 billion when the tax hikes and budget gimmicks were taken out. The budget resolution we are considering here today reinforces our Social Security lockbox for fiscal year 2001 and beyond. I urge my colleagues to support our seniors by protecting their Social Security benefits, vote for this Republican budget resolution.

Mr. HERGER

Mr. HERGER. Mr. Chairman, balanced budget security for America's future, a GOP plan. I would like to go down this, if I could, to outline the six points of the Republican plan. Number one, protects 100 percent of Social Security surplus. All of the $166 billion Social Security surplus is off limits to Clinton-Gore spending. This will be the second year in a row that Republicans will be protecting the Social Security surplus. Secondly, we strengthen Medicare with prescription drugs. It sets aside $40 billion to help needy seniors afford their prescription drugs, and it rejects the $18.2 billion Clinton-Gore Medicare cuts. Point three, it retires the public debt by 2013. It pays off more than $1 trillion of public debt over the next 5 years. Our budget has already repaid $302 billion since 1998. Our next point, it promotes tax fairness for families, farmers, and seniors. It provides for the House-passed marriage penalty an average of $1,400 per married couple and small business tax relief, education and health care assistance amounting to $150 billion, and it rejects the $96 billion gross tax increase over 5 years in the Clinton-Gore budget. Number five, it restores American defense, 6 percent more than last year's for overdeployed Armed Forces. The GOP defense budget provides $1 billion more than the Clinton-Gore plan. Finally, number six, it strengthens support for education and science, 9.4 percent for elementary and secondary education, IDEA increases of nearly $2 billion. It fights cancer, AIDS and diabetes and other diseases with $1 billion more for NIH, and also $1 billion for basic research into biology, science, engineering, and math. In addition, Mr. Chairman, our Federal public debt stands now at $3.6 trillion. This equates to $56,000 for the average family of four. This year nearly $1,000 in taxes from every man, woman, and child in the United States will be used just to pay the interest on the debt. The Republican budget resolution sends our Nation on the path towards eliminating public debt by paying off $1 trillion over the next 5 years. Paying off public debt makes good sense. It makes more money available in the private sector and saving and for investment in health.

Mr. HERGER

Mr. HERGER. Mr. Speaker, small businesses are the backbone of our Nation's economy, creating jobs, economic growth, and innovation. The legislation before us today, the Small Business Tax Fairness Act, provides the tax reform necessary to ensure that small businesses will continue to prosper. For example, this legislation will help the self-employed afford health care by providing full deductibility of health insurance premiums. It will help small businesses acquire the tools they need to compete by increasing the amount small businesses can expense. This legislation also provides much needed assistance to families attempting to pass a business from one generation to the next by reducing the burdensome death tax. Furthermore, this legislation will help Americans save for their retirement by modernizing pension laws. Mr. Speaker, I am especially pleased that the legislation before us today includes a provision I authored, which will restore peace of mind to small business owners by allowing small businesses to once again make use of installment sales. This provision will correct an urgent situation whereby thousands of small business owners have seen the value of their businesses drop by 10 to 20 percent. Enactment of the Installment Tax Correction Act aspect of this legislation will mean real relief and fairness for those who have spent a lifetime building a business only to see a change in tax law threaten their retirement. I urge all my colleagues to support tax fairness by supporting this legislation.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I rise today to say that working seniors deserve a break, and it is time we gave it to them. I think most of us in this chamber agree that our Tax Code needs to be fairer. And in order for the Tax Code to be fairer, we must first eliminate the many ways that it unfairly punishes the American people. Our House took a first step on this front just a few weeks ago when we passed a bill that would give married couples relief from the marriage tax penalty. But just as it is unfair for couples to be penalized simply for being married, it is equally unfair for senior citizens to be penalized simply because they have jobs. Yet the Social Security earning limits is doing just that. Because of these earnings limits, senior citizens risk losing a large portion of their Social Security benefits if they decide to keep working past the age of 65 and they make more than the law allows. In essence, our government is telling senior citizens that they should not work. Instead, our government should encourage not discourage. I urge my colleagues to join me in voting to eliminate the Social Security earnings limit.

Mr. HERGER

Mr. HERGER. Mr. Speaker, what could be more fair than allowing seniors to continue working without losing Social Security benefits? Today we are voting on legislation to end the outdated Social Security earnings limit. Under this legislation, more than 800,000 seniors nationwide will have the opportunity to work without seeing their Social Security benefits reduced. Consider a senior in my district in northern California who is between the ages of 65 and 70 and who earns $20,000 a year to supplement their Social Security benefits. Under current law, this senior will lose $1,000 in Social Security benefits due to the earnings limit. At a time when our U.S. workforce needs the skills seniors have to offer, this disincentive to work makes absolutely no sense. Our seniors deserve the freedom to work without being penalized for it. This legislation before us today is based on the principles of fairness and freedom. Seniors should be treated fairly after paying into Social Security all their lives. They should have the freedom to work without worrying about losing their benefits. Mr. Speaker, it is important to note that this legislation is fiscally responsible. It does not affect the long-term solvency of the Social Security trust fund. I commend the President for supporting our position to end the outdated earnings limit. Mr. Speaker, let us give all our seniors the freedom and the fairness they deserve. I urge my colleagues to support this legislation.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I thank the gentleman for yielding time to me. Mr. Speaker, when a couple stands at the alter and says ``I do,'' they are not agreeing to higher taxes. On tax day, April 15, 25 million American couples, including 47,000 within my own district in northern California, will pay up to $1,400 more in taxes than they would if they were single. That is wrong, it is anti-marriage, and 85 percent of Americans say it should be fixed. What does $1,400 mean for married couples? Those couples could use that extra money for 4 months of a car payment, a year's worth of diapers, a computer for their children, or even a donation to their favorite charity. The IRS should not be allowed to continue taking this tax overpayment, instead of giving it back to its rightful owners, hard-working American families. No one should be opposing this. It is an issue that transcends party politics. I urge Members from across the aisle and the President to work with us to make marriage penalty relief a reality for families this year.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I am pleased today to join with my good friends and colleagues, Mr. Sweeney and Mr. Tanner, to announce the introduction of our bipartisan legislation--the Installment Tax Correction Act of 2000. It is no secret that small business is the engine driving our current economic success. America's small businesses provide the entrepreneurship and innovation to keep our economy moving forward. Unfortunately, many small business owners now face a tax burden which threatens to erode the value of their business and which has erected an unnecessary barrier to small business ownership. The legislation we are introducing today is necessary to correct a provision of the tax code which is imposing a serious burden on thousands of small businesses across America. Mr. Speaker, most small business owners have chosen to use the installment sales method when selling their business because bank financing is often not available. Under an installment sale, the buyer makes a down payment up front and pays for the rest of the business over a period of years. Such sales grant greater flexibility to both the buyer and seller and have enabled thousands of Americans, who would otherwise be unable to buy a business, the opportunity to make their dream of small business ownership a reality. Last year the President proposed, and Congress accepted as part of larger tax package, a provision to repeal the use of installment sales for certain taxpayers. This provision appeared to target larger businesses when they sold a particular asset or assets. Small business groups, Congress, and even the administration did not expect the serious effect this provision would have on small businesses across America. Unfortunately, the unintended consequences are now a reality and it is our job to fix the problem. Our legislation will do just that, by once again allowing businesses to make use of installment sales. Mr. Speaker, this is not a theoretical discussion. The burden being felt by small business owners across America is all too real. It is affecting taxpayers such as Harold and Mary Owens who own a small family business in my district in Redding, CA. They have built up their business through 12 years of hard work and are counting on the sale of this business to provide for their retirement. To pull the rug of retirement security out from under them at this time is simply wrong. And this is just one example out of the thousands of businesses each year which will see the value of their businesses eroded if our legislation is not enacted. I was hopeful that the President would propose a solution to this problem in his fiscal year 2001 budget, released just yesterday. While I am disappointed that the President's budget does not address this important issue, I remain hopeful that all of us--both Republican and Democrat--will work with the administration to fix this situation on behalf of our Nation's small businesses. I am pleased by the support our effort has received so far. The legislation we are introducing has more than 70 bipartisan cosponsors. Furthermore, a coalition of more than 50 groups--including the National Federation of Independent Business, the US Chamber of Commerce, the National Association of Realtors, and the National Taxpayers Union, among others--has made enactment of our legislation a top priority this year. Mr. Speaker, we owe it to small businessmen and women across America to have a tax code which treats them fairly. It is imperative that we pass the Installment Tax Correction Act this year, and I urge all my colleagues to join this worthy, bipartisan effort.

Mr. HERGER

Mr. HERGER. I thank my good friend, the gentleman from North Carolina (Mr. Jones). And, again, we are talking about allowing married couples to keep more of their own money. Many times some in Congress, some in government tend to think that these tax dollars belong to government, they belong to Washington; not true. Madam Speaker, these dollars belong to the people who earn them. And they want their dollars to be spent very wisely, but also they want priorities set. And certainly, as the gentleman has pointed out, what the government should not be doing is actually penalizing people for being married, penalizing them for having families. That is not what our country is about. And I appreciate very much the support of the gentleman from North Carolina, his long time support in helping to correct this inequity in our Tax Code.

Mr. HERGER. Mr. Speaker, I thank the gentleman from California (Mr. Ose) for his work on this, and I thank him for his articulate statements. I thank him very much for joining us. Mr. Speaker, this is really, I believe, what it is all about: Are we as Americans going to allow a tax that basically tells a young couple, a man and a woman who want to get married, that we are going to penalize them an average of $1,400 for just getting married? What are we telling them? Are we really encouraging them, to say if they are not married and they live together, they are not going to pay this? Is this the message we want to send them? It certainly is not. Mr. Speaker, tonight we have laid out the reasons why the marriage tax penalty must be reformed. This tax unfairly penalizes married couples, particularly those with low to average incomes. Providing marriage tax relief could result in up to $1,400 in savings per family currently affected by this tax. I say that this is something we need to do. Last year Congress passed marriage penalty relief. Regrettably, President Clinton chose to veto our tax relief bill. Mr. Speaker, we are offering it again. We will be hearing it in committee, marking it up, H.R. 6 tomorrow. We are urging President Clinton to do the right thing. Just last week the President indicated a willingness to work with Congress on the marriage tax penalty issue. Mr. Speaker, we welcome this commitment and look forward to working with the President on this issue, one that should go beyond party politics. It is an issue of common sense and fairness for American families, the backbone of this great Nation. If we can change our Tax Code to make their lives better, then it is our obligation to do so. Mr. Speaker, I want to thank all of my colleagues who joined me here tonight to express their commitment to passing the marriage penalty relief.

Mr. HERGER. I thank the gentleman from Pennsylvania. I think those are points that are very well taken. I thank him for his participation and his help with this this evening on this very important issue. I again yield to my good friend, the gentleman from California (Mr. Ose).

Mr. HERGER. Well, I thank my good friend from California (Mr. Ose) for his comments. The gentleman from California was alluding to some of the comparisons of the two bills of President Clinton's and the House Republican bill, and I would just like to continue that, if I could, for a moment. The President's marriage penalty plan would give relief of $45 billion over 10 years. Our legislation would give relief of $182 billion, about four times more, in tax relief over those same 10 years. The President's plan doubles the standard deduction over 10 years. Our plan doubles the standard deduction by next year, within one year as opposed to 10. The President's plan does not expand the 15 percent income bracket. The Republican plan starts expanding 15 percent income bracket in 2003. The President's plan provides up to $210 in tax relief per couple per year. Our plan provides up to not $210 but $1,400 in tax relief per couple. The President's plan would help only nonitemizers. So those people who owned a home, who are itemizing, would not be affected by the tax relief. Our plan would help families who itemize deductions, homeowners and nonitemizers. The President's plan would help 9 million American couples. The Republican plan would help up to 28 million American couples. So, again, I think the comparison is there. I do want to commend the President for at least becoming involved, for recognizing that there is a problem. I just feel that the President's plan does not go nearly far enough. We need to erase this horrible tax on American couples, and we need to work to do it completely. At this time I would like to recognize again my friend, the gentleman from Pennsylvania (Mr. Peterson).

Mr. HERGER. I thank the gentleman from South Dakota (Mr. Thune). As the gentleman mentioned part way through his talk was that the marriage penalty is flat wrong. I think that really says it. It is wrong. It is something that should have been corrected long ago. We are encouraging the President and our colleagues on the other side of the aisle to work with us, it will be before the Committee on Ways and Means tomorrow, and to pass and to correct this. At this time I would like to introduce a good friend of mine, my neighbor from northern California, an adjoining congressional district, the gentleman from California (Mr. Ose).

Mr. HERGER. I thank the gentleman from Illinois (Mr. Weller) for leading a similar evening last night on this very important issue. But I believe it really shows just how important it is, how important it is to the leadership of this Congress, certainly to us as Republicans, that we do the right thing as far as families are concerned; and certainly this is where we, I believe, should be beginning and where we are beginning in this legislative year. I would like to yield again to my friend from South Dakota (Mr. Thune).

Mr. HERGER. I want to thank my friend from Pennsylvania (Mr. Peterson) for his comments. To think in this country, when we are taxed on virtually everything we do, to think that somehow the Government somehow has actually taxed this an average of $1,400 just to be married, is wrong; and we need to do the right thing. We need to correct that. I would like to now recognize an individual who has been very active on this issue, the gentleman from Illinois (Mr. Weller), who was very active the last couple of years and this year in leading the fight on correcting this. I yield to my good friend from Illinois.

Mr. HERGER. I thank my good friend, the gentleman from South Dakota (Mr. Thune), for his comments on this very important issue. Mr. Speaker, I yield to the gentleman from Pennsylvania. Mr. PETERSON of Pennsylvanbia It is a pleasure to join the gentleman from California this evening to talk about something that is kind of incredible when we really stop and think about it. The old wise philosophers always say, if you want less of something, tax it. Well, we have taxed marriage, holy union between man and wife; and we have taxed it hard. Unfortunately in America we have less of it. It seems pretty incredible when a country like the USA has a tax policy that would suggest to young people who are struggling economically that it would be a great cost saving to live together without getting married, rather than to marry. I think it is pretty basically fundamental that we ought to have a tax code that does not discourage people from living in marriage, which is what really this country was all about. It is interesting when the President stood here just a few nights ago. He sort of supported it a little bit. He has opposed it, but I think he is beginning to maybe, what they say, feel the heat, because 80 percent of Americans support doing away with the marriage tax penalty. The President did not really come clean; he did not really support it wholeheartedly, but he at least supported the concept. Now, from my memory, he is willing to support this for the poorest of Americans, and I support that. And he is probably saying he does not want to support it for the richest of Americans. But the proposal that the President is talking about would not support it for middle America. We really need to look at America's tax code. It is the middle Americans who really pay the taxes. Most poor people in this country pay little or no federal or State income tax because they are indexed out of it. But it is the middle Americans who do not earn a lot of money, who do not have a lot of resources, who do not have a lot of wealth but who are raising families, raising children, maintaining a home, preparing for their college costs for their children. The people who make this country strong, the heart and soul of America, middle America, are the ones that would be left out of the President's marriage penalty tax help. He says it is just for the rich, but that is not really true. I do not know what he qualifies as rich. But the President's plan would not really truly solve the marriage penalty for most working Americans. I believe that if the American public really understood how much extra they were paying over being married and maybe their neighbors who do not marry and live together, how much less they are paying, they would be totally outraged. But, of course, we do not get to compare pay stubs and tax forms with each other. But the numbers are pretty significant, anywhere from $1,200, I heard as high as $1,900 per couple, in additional taxes just because you are married. That makes no public policy sense. It certainly is not an incentive to support holy matrimony and marriage, but it certainly sends the wrong message I think to young people in this country. I get a little tired of those who always talk about every tax cut is for the rich. We all know that the rich do not pay nearly as many taxes, because there are lots of ways they can avoid paying taxes. One is to invest their money in municipal bonds and things that are not taxable, and we do not tax those because we want people to have incentives to invest in governmental organizations' financial needs. But the people who really pay and pay and pay are the working middle class. Representative Herger's proposal will really get at helping those who are the middle-class wage earners of this country, who struggle to pay the grocery bill, who struggle to pay their heating bill, who struggle to pay the insurance bill, who struggle to set a little bit of money aside for the college education for their children because the system does not give them free grants. Because they are middle-class wage earners, they do not get the grants to send their children to college free. They have to save. So life sometimes gets a little meager in the middle class, when you stop and think about having to provide the education for your youth. You do not get any handouts or any help. You pay for it all yourself. So those are the people that are also paying this marriage penalty. I believe the President will sign a good bill. I do not think he will be clapping his hands. I do not think he and Al Gore believe in this, but I think he knows that 80 percent of the American public do; and I am pleased that we have for the first time the marriage penalty where the American public can just hear that simple discussion. It is simple, not very complex. For the first time they can hear the simple discussion here in Congress about the unfairness of the marriage penalty and how we want to eliminate it, not just a little bit of it, but eliminate it, so that whether you are two individuals living together or whether you are two individuals married, you will pay the same tax rate. That is only fair, and that is what America is about, fairness. So I congratulate my friend from California for his long-time leadership on this issue. It is so basically simple, so basically fair, that finally I believe we can make it happen. I am an optimist. There are those that think the President will not want to cooperate; but, you know, he has a pragmatic side that I admire. When Congress wins a public discussion, on welfare it took him two or three times. They had to pass it, and I was not here then, two or three times before he felt the heat from the public, because the public wanted welfare reform. I think if we make the case real well, as the general public learns about this issue in detail and how much they are paying more, I think the general public, whether they are Republican, whether they are Democrat, whether they are independent, no matter what party they are from, they will be for the marriage penalty being done away with, because it is just not right.

Mr. HERGER. I thank my dear colleague, the gentleman from North Carolina (Mr. Jones), very much for joining us this evening. Madam Speaker, I yield to the gentleman from South Dakota, my good friend, (Mr. Thune).

Mr. HERGER. The average penalty for these 25 million couples is $1,400. So we are talking in the vicinity of $1,400 that these working families, married couples, would be able to keep of their own money, that other people, if they were working independently and were not married, a man and a woman who were not previously married, would not be paying that would be paying the very moment that they get married an average of $1,400 a year.

Mr. HERGER. That is correct. Twenty-five million married couples, that is 50 million people, plus their families, their children would be assisted, if the President works with us. And, again, he has some legislation of his own, it only gives one quarter as much relief as our legislation that we will be introducing and be hearing in the Committee on Ways and Means tomorrow. But it is encouraging that at least he is becoming involved. And I would hope that all of our listeners in America would contact the President and urge him to support our legislation, our Republican bill, which is really bipartisan, that goes four times further to correcting this very serious inequity.

Mr. HERGER. Yes, I yield to the gentleman from North Carolina.

Mr. HERGER. Madam Speaker, our tax system is unfair, for many reasons. It punishes those who invest, those who succeed in business, even those who die. But one tax provision which seems particularly unfair is the marriage tax penalty. This tax penalty occurs when a married couple pays more in taxes by filing jointly than they would if each spouse could file as a single person. For example, an individual earning $25,500 would be taxed at 15 percent, while a married couple with incomes of $25,000 each has a portion of their income taxed at 28 percent. In addition, while two single taxpayers receive a standard deduction of $6,950 apiece, for a total of $13,900, a married couple only receives a standard deduction of $12,500. Madam Speaker, that is simply unfair. When a couple says, ``I do,'' they are not agreeing to higher taxes. When a couple gets married, they receive a number of nice presents, China, silverware, linens, appliances. But guess what they get from the IRS? A bill for an average of $1,400 in taxes. Last year, 28 million Americans were subjected to this unfair, higher tax. For most families $1,400 means a down payment on a house or a car, tuition for in-state college, several months' worth of quality child care, or a home computer to help their children with their schoolwork. Madam speaker, it makes common sense to end the unfair marriage tax penalty. That is why the House of Representatives is making marriage tax reform our first order of business this year. Tomorrow the Committee on Ways and Means, a committee on which I serve, will consider a bill to provide married couples with relief from the marriage tax penalty. This bill increases the standard deduction for married couples to twice that of singles, beginning next year. It also provides up to $1,400 in relief to couples who itemize their taxes. I am pleased that the gentleman from Illinois (Mr. Hastert) and the gentleman from Texas (Mr. Archer), chairman of the Committee on Ways and Means, have made the commitment to consider this important legislation as one of the first orders of business this year. Madam Speaker, we have an opportunity this year to do the right thing for middle-class families. We can give them more control over their own hard-earned money. We have a chance to help working women and lower- income couples with children who are unfairly affected by the marriage tax penalty. We have an opportunity to allow common sense to prevail and to provide relief from the marriage tax penalty. I would also like to take this moment to thank the gentleman from Illinois (Mr. Weller) for his leadership on ending the marriage tax penalty. He has truly been dedicated to correcting this tax policy and to easing the tax burden for married couples. Madam Speaker, a few details on what the marriage tax penalty would do. Our bill provides $182.3 billion in tax relief over 10 years for more than 50 million Americans. President Clinton, who vetoed the marriage penalty last year, recently proposed a smaller marriage penalty proposal that provides only $45 billion in relief over 10 years. Our plan, the Republican plan, provides working couples with four times more marriage penalty tax relief than the President has proposed. But I do want to thank the President for recognizing this as a problem and becoming involved in this very important issue. Our current Tax Code punishes working couples by pushing them into higher tax brackets. The marriage penalty taxes the income of the second wage earner, usually his wife, at a much higher rate than if she were taxed only as an individual. Twenty-five million families pay an average of $1,400 marriage penalty according to the Congressional Budget Office. The number of dual earner couples has risen sharply since 1970 and is continuing to rise. By acting now, we will keep even more working couples from being punished in the future. Marriage penalty relief is middle class tax relief. Middle-income families are hit the hardest by this penalty. Most married penalties occur when the higher earning spouses makes between $20,000 and $75,000. By allowing working couples to keep more of their own money each year, our plan, the Republicans', are helping American families make their dreams come true. They can use the money to buy a family computer, make needed improvements in their home, or put toward their children's education. Again, our marriage penalty relief bill that we are introducing tomorrow, February 2, is $182 billion in tax relief over 10 years. It doubles the standard deduction by the year 2001. It starts expanding 15 percent income brackets in the year 2003. It provides up to $1,400 in tax relief per couple. It would help families who itemize deductions, homeowners and nonitemizers alike. It would help up to 28 million American couples. Madam Speaker, tonight we have laid out the reasons why the marriage tax penalty must be reformed. This tax unfairly penalizes married couples, particularly those with low to average incomes. Providing marriage tax relief could result in up to $1,400 in savings for families currently affected by this tax. I say this is something we need to do. Last year, Congress passed marriage penalty relief. Regrettably, the President chose to veto this relief bill. This year we are giving the President another opportunity. It is encouraging that he does have his own plan available. And I am encouraged that this year we will be successful in passing needed marriage penalty relief. Madam Speaker, I yield to my good friend, the gentleman from North Carolina (Mr. Jones).