Wally Herger

Mr. HERGER

Mr. HERGER. Mr. Speaker, I rise today to join with my Ways and Means colleague Congressman Kleczka in introducing the Veterans American Dream Homeownership Assistance Act. This very worthy legislation will help veterans in five states, including California, to achieve their dream of home ownership. Five states--Wisconsin, California, Texas, Oregon, and Alaska--have a program in which the states issue tax-exempt bonds to finance home mortgage loans to veterans. Under a little-known provision in the 1984 tax bill, veterans living in those five states who began military service after 1976 are prohibited from receiving a state-financed veterans home mortgage. This means that our servicemen and servicewomen who served in Grenada, Panama, and the Gulf War cannot get veterans home mortgages from their own state government while veterans who served before that time are fully eligible. Are those who began serving their country after 1976 any less deserving than their predecessors? This arbitrary cutoff was created to raise revenue for the 1984 tax bill by limiting the use of tax-exempt bonds to finance state veterans mortgage programs. In 1984, there were very few veterans who entered service after 1976. Because of their small numbers, the affected veterans were unable to stop this unfair change in the law. But, fifteen years later, there are hundreds of thousands of veterans who have served our country honorably in that period and they are calling for a change in the law. The state veterans affairs departments believe that if this bill becomes law, they can help a great number of the post-1976 veterans purchase their own home. Our bill will simply eliminate the arbitrary cutoff that exists under current law. Under our proposal, former servicemen and servicewomen who served our country beginning in 1977 or any other year after that will be eligible to apply for a home mortgage loan provided by their state. This legislation does not increase federal discretionary spending one cent--it simply allows the states to help their veterans own a home regardless of when they served. Mr. Speaker, arbitrary rules in the tax code should not stop our states from helping all veterans who served our nation honorably. I urge my colleagues on both sides of the aisle to join with us in supporting this measure to assist those who have spent so much of their lives defending our freedom.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I rise in support of H.R. 3, the Economic Growth and Tax Relief Act of 2001. This legislation will provide real tax relief for American families at a time when it is urgently needed. Simply put, Americans are overtaxed considering that Americans today face a higher tax burden than they have at any other time since World War II. In fact, on average families today pay more in taxes than they spend on food, clothing and shelter combined. Once fully phased in, President Bush's plan will enable the typical family of four to keep at least $1,600 more of their own money. This is real help for families trying to make ends meet. $1,600 will pay the average mortgage for almost 2 months. This relief will pay for a year's tuition at a community college or the cost of gasoline for two cars for a year. In my home State of California, families will be able to use their tax refund to help cope with our State's high energy costs. Let us be clear. If we leave the tax surplus in Washington, it will be spent on bigger government. Americans have been overcharged, and it is time to give them their refund. The legislation before us is a critical first step in this process. I urge my colleagues to support this legislation.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I introduce the ``Cash Accounting for Small Business Act of 2001,'' a bill to simplify the tax code and provide relief for small businesses across the nation. I am pleased to be joined in this effort by my colleague on the Ways and Means Committee, Mr. Tanner, along with the chairman and ranking member of the Small Business Committee, Mr. Manzullo and Ms. Nydia Velazquez. One of the most complex and burdensome aspects of the Tax Code for many small businesses is also one of the most fundamental--their tax accounting method. While current tax law specifies a $5 million annual gross receipts test for the use of cash accounting, this test has often been misinterpreted by the IRS, especially for small businesses using inventory. Today we are introducing the ``Cash Accounting for Small Business Act of 2001,'' legislation to clarify tax accounting rules for small businesses. Our legislation will follow the recommendation of the IRS National Taxpayer Advocate in his 2000 report to Congress by further clarifying the $5 million threshold for use of the cash method of accounting. For small companies with average annual gross receipts below that level, they will be entitled to use the cash method. In addition, the bill will enable small businesses, particularly service providers below the $5 million threshold, to avoid the onerous inventory-accounting rules. As a result, small business owners will be able to save time and accounting costs and put them back into productive use. According to accountants, the use of accrual accounting can increase a small business' accounting costs by as much as 50 percent. For small firms struggling to get their businesses off the ground, that's valuable capital thrown down the drain to pay for unnecessary recordkeeping. The costs for failure to comply, however, can be quite high. A survey by the Padgett Business Services Foundation, for example, revealed that on the inventory accounting issue alone, a small business found by the IRS to be using the incorrect bookkeeping method can end up paying $2,000 to $14,000, with an average of $7,200 in taxes, interest, and penalties. Small business owners across the country have been clamoring for tax simplification. This legislation is a down payment on that goal. I urge all my colleagues to join me in this straight-forward effort to infuse some common sense into our overly complicated Tax Code. Small businesses contribute greatly to this country's economy, and they deserve a break from needless government-imposed compliance costs.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I introduce the ``Small Business Expensing Improvement Act of 2001,'' legislation to assist small businesses with the cost of new business investment. I am pleased to be joined in this effort by my colleague on the Ways and Means Committee, Mr. Tanner. Small businesses truly are the backbone of our economy, representing more than half of all jobs and economic output. We should not take small business vitality for granted, however. Rather, our tax laws should support small businesses in their role as the engines of innovation, growth, and job creation. The legislation we are introducing today will improve our tax laws to make it easier for small businesses to make the crucial investments in new equipment necessary for continued prosperity. Under Code Section 179, a small business is allowed to expense the first $24,000 in new business investment in a year. Our legislation will increase this amount to $35,000, beginning in 2001. Furthermore, our bill will index this amount to ensure that the value of this provision is not eroded over time. This legislation will also allow more small businesses to take advantage of expensing by increasing from $200,000 to $300,000 the total amount a business may invest in a year and qualify for Section 179. It is important to note that this amount has not been adjusted for inflation since its enacting into law in 1986. The ``Small Business Expensing Improvement Act'' also improves the small business expensing provision by following the recommendations of the IRS National Taxpayer Advocate in his 2000 Annual Report to Congress. Specifically, our legislation makes residential rental personal property and off-the-shelf computer software eligible for expensing under Section 179. Mr. Speaker, in times of economic uncertainty, we must do all we can to encourage new investment and job creation. The ``Small Business Expensing Improvement Act of 2001'' will help accomplish this worthy goal, and I urge my colleagues to join me in this effort.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I introduce the Farmer Tax Fairness Act, along with my Ways and Means Committee colleagues, Representatives Thurman, Dunn, and Foley, English, and Camp. This legislation will help ensure that farmers have access to tax benefits rightfully owed them. As those of us from agricultural areas understand, farmers' income often fluctuates from year to year based on unforeseen weather or market conditions. Income averaging allows farmers to ride out these unpredictable circumstances by spreading out their income over a period of years. A few years ago, we acted in a bipartisan manner to make income averaging a permanent provision of the tax code. Unfortunately, since that time, we have learned that, due to interaction with another tax code provision, the Alternative Minimum Tax (AMT), many of our nation's farmers have been unfairly denied the benefits of this important accounting tool. Our legislation directly addresses the concerns being raised by farmers using income averaging. Under the Farmer Tax Fairness Act, if a farmer's AMT liability is greater than taxes due under the income averaging calculation, that farmer would disregard the AMT and pay taxes according to the averaging calculation. As such, farmers will be able to take full advantage of income averaging as intended by Congress. This provision is a reasonable measure designed to ensure farmers are treated fairly when it comes time to file their taxes. I urge my colleagues to join me in promoting greater tax fairness for our nation's farmers.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today we have an opportunity to reiterate this body's clear and unmistakable commitment to protecting 100 percent of the Social Security and Medicare trust fund surpluses. Before this body considers tax relief, before we consider spending priorities, and before we engage in floor debate on even a single issue dealing with the Federal budget, we are here to put the protection of Social Security and Medicare first. Since the beginning of the Social Security programs, over $850 billion in Social Security and Medicare trust fund surpluses have been raided and spent on unrelated areas. Last year, House Democrats and Republicans joined together overwhelmingly to pass a lockbox very similar to the one we are considering today. Unfortunately, it was blocked from consideration by the Democrats in the other body. While we have come a long way in protecting the Social Security trust funds, protection of the trust fund surpluses is still not law. H.R. 2, the Social Security and Medicare Lockbox Act of 2001, amends the Congressional Budget Act of 1974 to create a point of order against any bill, joint resolution, amendment, motion or conference report if the enactment of such legislation would result in a raid of the Social Security or Medicare trust fund surpluses. This measure ensures that the trust fund surpluses can only be spent on providing retirement and health security, such as reforming Medicare to provide a prescription drug benefit or reforming Social Security to provide more options to younger taxpayers. Furthermore, as a result of not spending the trust fund surpluses, the public debt will be paid down by $2.9 trillion over the next 10 years. Our seniors deserve to know that Congress is putting their retirement and health security first. Among many others, this measure is supported by the United Seniors Association, the U.S. Chamber of Commerce, and Americans for Tax Reform. I encourage my colleagues to join me in supporting this critical measure.

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 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. I urge my colleagues to join with us in sponsoring this important legislation in order to ensure that American homeowners do not face further burdens.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I say to the chairman, as this is the last bill that will be considered by the House under his chairmanship, I want to thank him for helping to bring this important legislation to the floor and for all he has done to improve the Tax Code and make it fairer for all Americans. Our Nation owes him a great debt of gratitude. Mr. Speaker, earlier this year I was pleased to join with my colleagues from both sides of the aisle to introduce the legislation before us today, the Installment Tax Correction Act. This bill corrects a change in tax law which has had serious, unanticipated consequences for small business owners. Last year, Congress passed and the President signed a change in law to disallow the installment method by accrual basis taxpayers. An unexpected result of this new law has been to erect a serious barrier to small business ownership. Many small business sales across the country have been canceled, while others have simply been put on hold while waiting for Congress to act. Additionally, the value of some businesses has been reduced by as much as 10 or 20 percent. And perhaps most urgently, business owners who have sold their business under the new tax law now face a large unexpected tax burden. The time has come to correct this situation. This legislation, which is retroactive to the time of the tax change last December, will ensure that small business owners who find themselves facing a large tax burden as a result of an installment sale will receive tax relief before having to file their tax returns next year. This much needed measure will make certain that elderly small business owners waiting to finance their retirement through the sale of their business would not have to wait any longer. Mr. Speaker, most small business owners have chosen to use the installment sales method when selling their business because bank financing is often unavailable. 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. This chart clearly demonstrates the impact the new tax treatment is having on small business sales. Imagine a small business being sold for $100,000 with the buyer paying $10,000 each year over 10 years. Under the old rule, the seller would pay tax on the gain from the sale as he received the payments. In other words, he would be taxed on $10,000 each year. However, under the new rule, the seller is taxed on the entire $100,000 up front even though he has only received the initial $10,000 payment. We believe it is simply unfair to ask small business owners to pay tax on money they have not yet received. Our legislation will fix this problem by once again allowing business owners to pay the tax as they receive the payments. And because our legislation is retroactive to the time of the tax change last December, small business owners who have completed installment sale this year would no longer face an unexpected tax burden. Mr. Speaker, this is a serious problem. The National Federation of Independent Business estimates that as much as 200,000 small business sales each year could be adversely affected if we do not act. I believe we owe it to small businessmen and businesswomen to have a Tax Code which treats them fairly, and I look forward to our approval today of this very worthy legislation, thus ensuring that small business remains a path to prosperity for millions of Americans.

Mr. HERGER

Mr. HERGER. Mr. Speaker, our efforts to reduce public debt and protect the Social Security and Medicare Trust Funds are being held hostage by the Clinton-Gore administration. It has been 36 days since Congress proposed locking away Social Security and Medicare surpluses and dedicating 90 percent of the total surplus to paying off the public debt; and still no response from President Clinton and Vice President Al Gore. There is a good reason they have not responded. They want to overspend. President Clinton has threatened to veto seven appropriations bills because he claims they do not spend enough. Vice President Gore's budget proposal spends the entire surplus and raids the Social Security Trust Fund. The President and Vice President should put debt reduction and protection of Social Security and Medicare ahead of spending and support the 90-10 debt reduction plan proposed by the Republican Congress.

Mr. HERGER

Mr. HERGER. Mr. Speaker, 29 days ago, this Congress sent President Clinton and Vice President Al Gore a proposal to lock away 100 percent of the Social Security and Medicare surpluses and dedicate at least 90 percent of the total budget surplus for debt reduction. Mr. Speaker, 29 days and still no word from the Clinton-Gore administration. There will be an estimated $268 billion surplus this fiscal year. Our question is simple: Should it be used to pay off our national public debt and protect Social Security and Medicare, or should it be spent on more government spending? Republicans are for using the surplus to pay off the public national debt and protecting Social Security. Mr. Speaker, I urge the President and the Vice President Gore to join us and put debt reduction and our seniors ahead of spending and agree to our 90-10 debt reduction proposal.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today is day 23 of the debt reduction held hostage by the Clinton-Gore administration. It has been 23 days since Congress proposed to lock away 100 percent of the Social Security and Medicare surpluses and dedicate at least 90 percent of the total budget surplus for debt reduction, but still no answer from the Clinton-Gore administration. There will be an estimated $268 billion surplus this fiscal year alone. Our question is simple: Should it be used to pay off our public debt, or should it be spent on ongoing Federal programs? Republicans are for using the surplus to pay off public debt. Where do President Clinton and Vice President Gore stand? Mr. Speaker, I urge the President and the Vice President to put debt reduction ahead of spending and agree to our 90-10 debt reduction proposal.

Mr. HERGER

Mr. HERGER. Mr. Speaker, it has been 22 days since the Congress proposed to lock away 100 percent of the social security and Medicare surpluses and dedicate at least 90 percent of the total budget surplus for public debt reduction. It has been 22 days that the Clinton-Gore administration has refused to answer our calls for debt reduction. There will be an estimated $268 billion surplus this fiscal year. Our question he simple: Should it be used to pay off the public debt, or should it be spent on ongoing Washington programs? Republicans are for using the surplus to pay off the debt. Where do President Clinton and Vice President Gore stand? Our children and grandchildren deserve better than to inherit mountains of debt. Mr. Speaker, I urge the President and Vice President to put debt reduction ahead of spending and agree to our 90-10 percent proposal.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I thank my good friend, the gentleman from Pennsylvania (Mr. Peterson), for leading us in this special hour today talking about the challenges that we have in rural America, and particularly the challenges that have been brought about and magnified because of, regrettably, some of the misguided policies of the Clinton- Gore administration. Let me begin by just giving a little background on the district that I am blessed and honored to represent in northeastern California. It is some 36,000 square miles, almost 20 percent of the land area of the State of California on the Nevada-Oregon border, just directly north of Lake Tahoe; north of Sacramento. There are some parts or all of 11 national forests within this area: Mount Shasta, Mount Lassen, the Trinity Alps. Again, some of the most beautiful mountain terrain and beautiful forests anyplace in the world are located in this area that I represent. Yet we see a tragedy taking place, a tragedy that began taking place because, I am afraid, of an ignorance within the United States, and certainly with this administration, on what is happening in our national forests. For example, about the turn of the century and beginning in a major way around 1930, we began eliminating forest fires from our western forests. And of course our forests in the West are very different than those on the East Coast because it rains all summer long here. Fire is not something that people really understand that much on the East Coast. But on the West Coast we are basically a desert in the summertime. We have lightning strikes, and fire has historically been a natural phenomenon. It would be considered a positive phenomenon as well. But what happened, again in early 1900s, as people began living in these forest areas, they began preventing all forest fires. Then what happened is that our forests began to become much denser than they were historically. As a matter of fact, the Forest Service has estimated that since 1928, our forests in the West are anywhere from two to four times denser than they were historically because, again, we have prevented the natural fires that would burn along and thin out the forests, burn out the smaller trees, and then we would have larger trees which would get larger. As a matter of fact, it was estimated that prior to the arrival of Europeans, there were approximately 25 large trees per acre in our forests. Today, we literally have hundreds of trees per acre. Now, what happens today? Today, we see when we have a fire, either by lightning strike or accidental fire, we see what they call a catastrophic fire, where the fire begins in the brush area, it moves up and becomes what is referred to as a fire ladder, where it moves up into the smaller trees and then up into the very crowns of the big trees, which historically have lived for hundreds of years, and now we see the entire forest burn. We actually see where these fires get so hot, so intense, that the soil itself, the minerals within, are singed for two to three inches and nothing can grow for several years later. A catastrophic fire. Now, what is the Clinton-Gore administration doing about it? Well, regrettably, not only are we not going in, as has been suggested by many, that we go in and begin thinning out our forests; that we begin removing this brush and thinning it out and restoring it more to its historic level so that we can again have the more normal restorative fires. By the way, the Native Americans, we know, would set fires. Again, it was a positive thing. But not today. We have seen this year one of the worst fire seasons ever. The Government Accounting Office has estimated that there is some 39 million acres of national forest within the interior West that are at high risk of catastrophic fire. They also mention in this same report that it has been estimated that there is a window of only 10 to 25 years that is available for taking effective action before there is widespread, long-term damage from large-scale fires. That is a direct quote from the GAO report. Again, what do we see happening? Nothing. We see nothing happening. This administration is following what some within the, regrettably, the extreme environmental community are dictating. For example, the Sierra Club came out 2 years ago in their public policy stating not a single tree should be removed from the Federal forest, not even a dead or dying tree. And, again, we see insect infestations. This is a normal thing to happen, and it is something that unless we go in and take out these diseased trees when it is first starting, we will see healthy trees and an entire forest destroyed. Not even a single tree, even if it is dead and dying, can be removed so as to remove this incredible catastrophic fire hazard, according to some within the extreme environmental community. Regrettably, and the real tragedy is, that it seems very likely that were the Vice President, Mr. Gore, to become the President, he would continue this same policy that we have seen now for 7\1/2\ years into the next administration, the next 4 years; and we would see more trees burning. How many trees have we seen burn? Well, last year some 5.6 million acres burned across the United States. This year it is already, as of the first of September, 6.8 million acres have burned. The cost of this has been $626 million that has been spent; not to restore our forests to their historic level, but just to fight these catastrophic fires. And I might mention that the biggest fire was in New Mexico. And, guess what. The Federal Government set this fire itself. This is what they called ``a prescribed burn.'' Well, prescribed burn might have been great if we were a Native American back in the 1800s when there were only 25 trees per acre. But now, when we have a prescribed burn and we have these fire ladders, we can see what happens. Again, this was a tragedy in New Mexico, with hundreds of homes being burned and many hundreds of homes more threatening to be burned; people's lives being destroyed. In my own district of Lewiston, a town last year, we had 120 homes burn. The entire community of Lewiston, it was in the national news for several weeks, was threatened to be burned. That was also a prescribed burn. Again, I want to mention that prescribed burns might be fine if we have gone in and restored these forests as they should, but not certainly as we see them today. Is there something we can do? Yes. We passed legislation just this last year, legislation which I authored. I did not write it, but I authored it here. It was called the Quincy Library Plan. The reason it was called Quincy Library is because environmentalists and wood products people and elected officials and community leaders from within the community of Quincy in northern California, a small town of about 1,200, got together and they thought, well, the only place they would not yell at each other was in the library. So it was called the Quincy Library Plan. They came up with a plan using the latest scientific data, along with all the current laws, put it all together in a plan specific for their forest. They came up with this plan, it was voted out of this House virtually unanimously, passed out of the Senate virtually unanimously, and the President signed it. This administration refuses to implement it. We have already been 1 year into it, and this plan has not been implemented. It was a 5-year pilot program, and they are eating up the time. This plan, by the way, does not cost taxpayers money. It brings in $3 of revenue for every $1 that is spent. Maybe this would help some of the 43 mills that were closed in my district alone in my 10 rural counties, not because we are short of trees, but because of Federal legislation that would not allow us to go in and thin out. Again, there is a tragedy happening in our national forests and to our environment. No spotted owls can live where a catastrophic fire has taken place. We need to do something different. I am very pleased with Governor George W. Bush and his intent to work with us on this. I thank the gentleman from Pennsylvania for yielding to me.

Mr. HERGER

Mr. HERGER. Madam Speaker, I thank the gentleman from Texas (Mr. Armey), our majority leader, very much for leading this very informative hour on programs that are so very important to our Nation, to our seniors, to our American taxpayers. Madam Speaker, I would like just to comment some on that. I have had the great privilege this last 8 years of serving on the Committee on the Budget, and I have seen over the last 6 years during the time that we have had the Republican Congress accomplishing some tasks that many thought we could never do, i.e., the first balanced budget in 60 years. Something which, by the way, President Clinton and the Vice President, Al Gore, vetoed not once or twice, but three times. Also, something we thought we would never see was welfare reform. And, again, even though Ronald Reagan once said that, ``There is no limit to what you can accomplish as long as you don't care who takes the credit''; well, our Republican Congress, we were able to reform welfare. It has been reduced by more than 50 percent on the average in the 50 States. Those are individuals who are now out working being productive. Again, the President vetoed this twice, not once, but twice, and then I know he and the Vice President were out taking credit for it. Again, it does not matter who gets the credit, but it happened, and it happened under the watch of this Republican Congress. What have we done balancing the budget? Welfare reform? We have seen that we have been able for again for the first time in some 40 years to begin paying down the national public debt. As a matter of fact, up to this point, we paid it down by $350 billion. And in this next year, we are down, that is over the last 3 years, for another $240 billion paying down the public debt; that debt which rests on the shoulders of our children and our grandchildren, money that past Congresses have spent more than what we had. Mr. Speaker, I would like the gentleman from Texas (Mr. Armey), the majority leader, and those who are watching look on this chart that I have here, what it does, it compares Vice President Al Gore's budget and proposal, spending proposals, that he has and compares it with Governor George W. Bush's. Now, this chart was prepared and the statistics were put out by the National Taxpayer Union Foundation, and it shows that right now the on- budget surplus for the next 10 years is projected to be $2.1 trillion. It is interesting to look at Vice President Gore, who is running for President, his spending, his expenditures add up to $2.8 trillion. Mr. Speaker, I might mention Governor Bush's spending adds up to $766 billion, his spending proposals. Well, the difference from what is projected as surplus over the next 10 years and what Vice President Gore would spend would put us in some $638 billion deficit again. In other words, under his administration, we would again return to deficit spending. And where does that come from? The gentleman from Texas (Mr. Armey), the majority leader, knows of the legislation which I authored and which passed this last year. We, as Republicans, put a lock box on not spending the Social Security money that had not been spent yet. And we passed that overwhelmingly out of this House, 416-12 this year, and that had been spent since 1935, all that money, and it amounts to several hundred billion dollars a year, but we had been spending that which was a surplus spending on ongoing programs. This year we passed an additional lockbox on the Medicare. Now, where would this $638 billion come from what Gore would spend? Well, it would come, Mr. Speaker, come from the Social Security money that should be going to pay our seniors. Is that right? No, it is not. Can we afford, this country, to turn around and go back into the direction that we were going for years here where we spend on promises to everyone that may be well meaning, but spending money that we do not have? I think the answer is clearly no. Mr. Speaker, of course, here in about another month and a half we are going to have an election that will determine whether the American public is going to go back to the failed policies of tax and spend that we have had in the past, or whether or not we are going to continue the direction that this Republican Congress has led us in in the last 6 years moving towards again fiscal responsibility. Again, I thank the gentleman from Texas, the majority leader for this time.

Mr. HERGER. That is right; he only spends one-third of the surplus, the rest is for paying down the debt further and for perhaps some tax relief and some other good things.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I rise in strong support of this measure. This bill increases IRA contribution limits from $2,000 to $5,000, making it easier for Americans to save. This measure also includes two provisions I introduced, the Social Security lockbox, which passed the House last year by a 416-to-12 vote, and the Medicare lockbox, which I introduced in March and passed the House this June by a 420-to-2 vote. Mr. Speaker, for the first time, these lockboxes will protect 100 percent of trust fund surpluses from spending on other unrelated government programs. Ending the raid on the Social Security and Medicare trust funds is the right thing to do. This legislation also creates another lockbox in which $42 billion additional surplus dollars will be held only for debt reduction. All in all, this legislation will use 90 percent, or $240 billion to pay down public debt this year alone. Never in the history of our Nation has a Congress paid down this much public debt in a single year. Today, we made debt reduction the priority, not the afterthought. This bill is the epitome of sound fiscal policy. For individual Americans, we increase opportunities to save; for the government's part, we protect the Social Security and Medicare trust funds for the first time from raids and still pay down $240 billion in public debt. This bill is a win-win for fiscal responsibility, a win-win for our children, a win-win for our seniors, and a win-win for the best interests of the United States. I urge my colleagues to vote for this measure.

Mr. HERGER

Mr. HERGER. Madam Speaker, I yield 30 seconds to the gentleman from Michigan (Mr. Smith), a member of the Committee on the Budget.

Mr. HERGER. Madam Speaker, I yield myself such time as I may consume. Again what is important, I think history is important, what did happen, what are the actual facts. Again as we see on this chart here, for 40 years, the Congress where the Constitution sets up that the Congress, the House of Representatives specifically under Democrat control, or under anyone's control sets up a budget. They are the ones who author spending bills. It is interesting that there is reference to tax reduction or tax fairness as though somehow that is wrong. My good friend from Texas, just to respond to that, I do not think it is wrong to correct and have tax fairness for a young married couple who is married who has several children and yet they are penalized an average of $1,400 just by the fact that they are married. I also do not think it is wrong that farmers and small businessmen in the gentleman from Texas' district as well as my rural area in northern California who work hard all their lives, who would like to leave their families, their children their farms and small businesses, they do not get anything out of it, they are dead, but that they have to sell their small farms and their small businesses simply to pay the taxes. I do not think that is wrong. That is our priority. Madam Speaker, I reserve the balance of my time.

Mr. HERGER. Madam Speaker, I yield myself such time as I may consume. If the gentleman would leave his map up, I think that is a very good prop. I would like to refer to it myself. There are only certain numbers I think that really count. That is the results that we are doing. If we look again over the 40 years that the gentleman's party was in control, the Democrats, we spent more than we brought in each of those 40 years. The fact is that for the last 4 years, we have actually not had 2 and $300 billion deficits. Let me just read. During 1998, the Republican Congress had a balanced budget, the first one in 30 years, paid down $51 billion. In 1999, we had a balanced budget plus we paid down $87 billion. This year, the year 2000, we had a balanced budget and we paid down $224 billion. We are projecting that for next year, 2001, and that is the only budget we have control over as the gentleman from Tennessee knows, the only budget we have control over is the one we are in right now, we are projecting a $240 billion paydown of the public debt, 90 percent of the entire surplus, not after we finish spending but before we begin spending we want to dedicate. Madam Speaker, I yield 3 minutes to the gentleman from California (Mr. Royce).

Mr. HERGER. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I have just a couple of comments. I want to thank my good friend the gentleman from Texas (Mr. Stenholm) and the Blue Dogs. The very positive budget resolutions that they have put out over the years, I believe, have been very helpful. Again, I want to thank the gentleman. I have worked with him for a number of years on the Committee on the Budget. The problem, however, is that at least the vast majority of their party has not gone along with that. As we look at during the years that Democrats were in control, not only were we not reducing the debt, we were increasing it, as a matter of fact increasing it by $200 billion and $300 billion a year, which, by the way, did not count what was going into Social Security, so it was probably almost double that, for almost 40 years off and on. So we see again that, while the words are good, and I want to thank the gentleman and there is no doubt that his intention was very good, that was not what was being followed. Madam Speaker, I yield 4\1/2\ minutes to the gentleman from Kentucky (Mr. Fletcher) who has been very active on the Committee on the Budget working with us on our side on crafting this legislation.

Mr. HERGER. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, just a quick comment, if I could, on my good friend from Washington's comments. It is interesting that during the 40 years that his party held control of the House there was not any debt being paid down. As a matter of fact, we had $200 billion and $300 billion deficits during those years. As a matter of fact, the last year that they controlled both Houses and the presidency, not only did we not have tax fairness, we were paying the highest taxes in our Nation's history except for World War II. We actually had the highest tax increase during 1993, the last year that his party was in control. So now the gentleman is right, we did try to bring about some tax fairness; to the 25 million married couples who pay an average of $1,400 a year more, just because they are married, a marriage penalty. We also tried to help those with small businesses and farms who would like to not have their farms and small businesses sold when they pass away just to pay the taxes. So, yes, we have worked for tax fairness, and I find it tragic that your party and your President have chosen to veto and not pass that legislation. Madam Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Armey), our majority leader.

Mr. HERGER. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 5173.

Mr. HERGER. Madam Speaker, on that I demand the yeas and nays.

Mr. HERGER. Madam Speaker, I yield myself such time as I may consume. I commend my good friend, the gentleman from Kentucky (Mr. Fletcher), for his tireless efforts in the area of debt reduction. Madam Speaker, last year, the House overwhelmingly passed, 416 to 12, legislation I introduced, the Social Security lock-box. In March of this year, I introduced the Medicare lock-box, and in June, the House passed it, 420 to 2, to lock away Medicare surpluses. Both lock-boxes, however, have six times been stopped from coming to the floor in the other body by their Democrat leadership and the Clinton-Gore administration. Today, we try again and add to the Social Security and Medicare lock-boxes a third lock-box to be used only for paying down the national public debt. Rather than paying down national debt with only what remains, after all of the spending is done, this measure sets aside surpluses. No longer will paying down the debt be an afterthought. It instead becomes the priority. This legislation accomplishes three major goals. First, it again stops the raid on Social Security by locking up the entire Social Security Trust Fund surplus. Second, it protects seniors that rely on Medicare by setting aside 100 percent of the Medicare surplus. Third, the debt lock-box would take an additional $42 billion off the spending table and use it to pay down public debt. All in all, 90 percent of the total surplus, or $240 billion, will be used to pay down debt. I suspect my friend from the other side of the aisle will attempt to paint this bill as anything other than a real effort to pay off public debt. However, the real question is very simple: In the aftermath of 40 years of excessive spending, are we going to make our children and grandchildren foot the bill? Do our children not deserve to grow up unhampered by the burden of untold debt incurred by previous generations? Members of this House are either for protecting Social Security and Medicare and paying down the public debt, or they are not. This legislation combines our historic protection of the Social Security and Medicare trust funds with our unprecedented commitment to debt reduction, thus keeping us on track to eliminating the public debt completely by year 2012, or before. This bill is a win-win for our children, a win-win for fiscal discipline, and a win-win for our seniors. I urge my colleagues to support the Debt Relief Lock-box Reconciliation Act. Madam Speaker, I reserve the balance of my time.

Mr. HERGER. Madam Speaker, I yield back the balance of my time.