Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, this is an important bill. It has two features to it. First, it increases the tax-free death benefit payment provided to members of the Armed Services who are on active duty. The present exempt amount is $3,000. The bill increases that to $6,000. In 1991, during Desert Storm, this death benefit paid to the survivors was increased from $3,000 to $6,000, but the tax amount was not changed, so that the extra $3,000 has been subject to tax since that time. What this does, the bill will correct that oversight. The second feature, Mr. Speaker, is the bill will allow members of the uniformed services who are transferred to take advantage of the present-law capital gains tax relief on the sale of their home, the way all the rest of us can do. An individual is not subject to the first $250,000, or, for a couple, $500,000 on a joint return on the sale of a home if it has been lived in as a principal residence for 2 out of the last 5 years. Uniformed members are transferred around this country and overseas at someone else's choosing. This happens so many times that it is impossible for them to meet the 5-year rule. What this bill would do is suspend the running of the 5-year rule for a total of 5 years during the time they are assigned away from home. Furthermore, Mr. Speaker, although the provisions in this bill apply only to the military and uniformed service members, there are other citizens who work abroad for the government or foreign service officers, as well as employees of businesses, who have the same problem with the 5-year rule. At some point, not now, but at some point we need to consider their needs so that the rule is uniform. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Sam Johnson). (Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.)

Mr. HOUGHTON. Mr. Speaker, I yield 3 minutes to the gentleman from Mississippi (Mr. Pickering).

Mr. HOUGHTON. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Gekas).

Mr. HOUGHTON. Mr. Speaker, I yield 2 minutes to the gentleman from Virginia (Mr. Forbes).

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

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

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, I move to strike the last word. I may be missing something here, but I do not know what we are talking about. The fact is the country is running out of money because the economy is down and the military and terrorist, antiterrorist expenditures are up. We have to have more money. This is not unusual. It has happened before. It happened when my colleagues were in the majority. It is happening now. It happens in business. Someone sets out a plan, they like to feel the plan makes sense, but all of a sudden they get into different circumstances. Who could have forecast the drop in the economy? Who could have forecast the terrorists of 9/11? We could not. Things have got to change. Should the rule have been better? Probably. Could we have had a different tax reduction program? Probably. Should we have had an up- and-down vote on this? That is a question. Should this $750 billion be the figure? It might be, but that is not the fact. General George Catlett Marshall was my hero, and what he said was, ``There are 2 things in life you don't want to do. One is to get into the minute so you forget about the issue. Secondly, do not fight the problem. Find the solution.'' We are fighting the problem. We need the money. The country needs the money. It is the only thing to do. Let us increase this debt ceiling.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I would like to rise in support of H.R. 4626, and I would like to thank the gentleman from Illinois (Mr. Weller) for all the great work he has done and also thank the gentleman from California (Mr. Thomas) for his support and the whole broad parameter of encouraging work and supporting marriage. This is a very simple and a straightforward piece of legislation. It improves the Work and Opportunity Act. It reduces the marriage penalty for lower-middle income people, and this is it. There are lots of things I would have gone over, but the gentleman from Illinois (Mr. Weller) has described those very eloquently, and I will not try to duplicate his words. However, I would just like to mention several facts. First of all, this bill combines the work and opportunity and the welfare-to-work credit, and while it increases the welfare-to-work credit from 35 to 40 percent, for the first year, very, very important feature here, it would also extend this 40 percent credit into the second year for employers who retain the workers. Also, it would expand incentives for vocational rehabilitation. This is important. It would eliminate family income tests for ex- felons, which the gentleman from Illinois (Mr. Weller) mentioned, and the test is a really significant impediment to hiring ex-felons. Finally, the legislation would increase the age limitation for food stamps recipients from 25 to 30; and what this is going to do, it is going to assist many people, many men who should be taking advantage of the work opportunity tax credit, but where the current age limit prevents their eligibility. So, Mr. Speaker, let me say this legislation is a good piece of work. It will increase the opportunity for those who want to work and the need to save and leave welfare for steady, long-term employment. I appreciate my colleagues' understanding of this, and I appreciate the gentleman from Illinois' (Mr. Weller) leadership.

Mr. HOUGHTON

Mr. HOUGHTON. Madam Speaker, I move to suspend the rules and agree to the resolution (H. Res. 412) expressing regret and sympathy for the families of the 4 Canadian soldiers who lost their lives on April 17, 2002, in a friendly-fire incident in southern Afghanistan.

Mr. HOUGHTON. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks on House Resolution 412.

Mr. HOUGHTON. Madam Speaker, I yield myself such time as I may consume. I would like to talk a little bit informally, Madam Speaker, about the situation which has affected us all, and I know that the gentleman from California (Mr. Lantos) will be doing the same thing, and I am delighted to be associated with my friend, the gentleman from California (Mr. Lantos). As we all know, on April 17, four Canadian soldiers were killed and eight Canadian soldiers were wounded by an American bomb that was mistakenly dropped on a Canadian training exercise near Kandahar in Afghanistan. I would like to read the names of the Canadian soldiers who are from the Third Battalion, the Princess Pat's Canadian Light Infantry Battle Group. Before I read those names, I would like to just say that I grew up on stories of the Princess Pat's Regiment. It was a famous regiment. A great older friend of mine was in it in World War I and described some of the great battles that went on. So it is a very, very distinguished group. The names of the soldiers are Sergeant Marc D. Leger of Lancaster Ontario; Corporal Ainsworth Dyer of Montreal, Quebec; Private Richard A. Green of Edmonton, Alberta; and Private Nathan Smith of Tatamagouche, Nova Scotia. Now, as many of us know, these soldiers had been in Afghanistan since late January as part of Operation Apollo, which was Canada's military complement to the campaign against terrorism. The casualties were especially difficult for the Canadian people as well as ourselves not only because of the circumstances surrounding the incident but because these are the first Canadian soldiers killed since the Korean War. President Bush expressed his deepest sorrow and sympathy to the families and to the people of Canada both in a letter to Prime Minister Chretien and several times in public, and the Senate has also passed a similar resolution. There is an investigation underway to determine the exact circumstances of the incident in Afghanistan. This, sadly, will not bring the soldiers back, but it is something we want to know. And we are doing this really to let Canada understand that we are deeply sorry for their loss and we do not want anything to get in the way of our historical friendship and alliance. It is awfully difficult, because many times in pursuing a war or pursuing some sort of activity for the national good, you hurt your friends, you hurt yourself. And how do you say you are sorry? This is one of the ways of trying to express our sorrow and our association with people. Canada has always been there for us in times of trouble. For example, after September 11, I remember going down to New York City when Senator Jerry Grafstein organized 25,000 Canadians in New York to express their solidarity with the United States. It was a wonderful, moving time. The fire department and the police department of New York and Toronto, Mayor Guiliani, Prime Minister Chretien were there, and it was the type of thing that you would like to see of a friend. So this incident with the four Canadian soldiers makes it even more difficult for us. I always remember during those difficult days with the Iran hostages, the Canadians were always there with us; made heroic feats in trying to save some of the American citizens. In a week, some of us are going to go to Rhode Island and meet with the Canadians on our usual American-Canadian session where we exchange ideas and issues and problems and opportunities, and we will have a chance personally to be able to express, as some of us have already done on the phone, to our Canadian friends. But it just seemed to some of us that it was important that here in the well of the House, officially, to tell our Canadian friends how terribly, terribly sorry we are. What are we all striving for? What are we doing? What is our search for fairness and for decency and for peace? We are all trying to make a difference. Those people who died made the supreme difference, and we are just honored to know that they are citizens and their families are citizens of this great North American Continent, and we would like to express our condolences and our feelings to those families. Madam Speaker, I would now like to add my voice to the many others who have also expressed their sentiments. Madam Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Madam Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleague from Illinois, Mr. Weller, in introducing our bill, the ``Encouraging Work and Supporting Marriage Act of 2002'' to accelerate the marriage penalty relief for low- and middle-income families and to modify and simplify the Work Opportunity Tax Credit (WOTC) and the Welfare-To-Work Tax Credit (WtW). Last year's tax law eliminates the marriage penalty in the standard deduction by gradually increasing the standard deduction for married couples beginning in 2005. The proposal would accelerate this relief by increasing the standard deduction beginning in 2003. The proposal would benefit low- and middle-income families and would simplify tax filing by reducing the number of taxpayers who itemize. After a number of improvements over the past few years, the WOTC and WtW programs are being well received in providing employment, with training, for our disadvantaged. We believe the WOTC and WtW programs have been very important in helping individuals become employed and make the transition from welfare to work. Such training can be costly, and the credits provide an incentive to employers to hire the disadvantaged and provide the needed training, while offsetting costs associated with the latter effort. However, the job is not over. These individuals are usually the first ones to suffer when we see economic conditions such as we have experienced the past year. The current WOTC provides employers with a graduated tax credit of 25 percent of the first $6,000 in wages for eligible individuals working between 120 hours and 399 hours and a 40 percent tax credit on the first $6,000 in wages for those working over 400 hours. The WtW tax credit is targeted toward long-term welfare recipients--providing a 35 percent tax credit on the first $10,000 in wages during the first year of employment and a 50 percent credit on the first $10,000 for those who stay on the job a second year. The proposal would make the following changes: (1) combine the two credits and establish WtW as a separate targeted group, (2) repeal the requirement that a qualified ex-felon be a member of an economically disadvantaged family for purposes of eligibility for the tax credit (a time-consuming requirement that discourages hiring from this group), (3) increase the age limit for qualified food stamp recipients by five years (from 18-24 to 18-29), and (4) standardize the definition of wages as ``cash wages'' paid by employer to a member of the targeted group. The present-law WOTC rules for calculating the credit would be retained for the eight categories currently eligible for the work opportunity tax credit. In the case of long-term family assistance recipients, i.e. the ninth targeted group, the credit would equal 40 percent (25 percent for employment of less than 400 hours) of qualified first-year wages. Therefore the maximum credit would be $4,000 (40 percent of $10,000) with respect to long-term family assistance recipients. In the second year, the maximum credit would be 40 percent of the first $10,000 of qualified second-year wages for the long-term family assistance recipients. The net effect of the change would increase the WtW credit by frontloading the benefits, thus increasing an employer's incentive to hire long-term Temporary Assistance for Needy Families (TANF) recipients. All of the provisions would be effective for wages paid or incurred for qualified individuals who begin work for an employer after December 31, 2002. We believe these changes will bring tax relief to low- and middle- income families by accelerating the elimination of the marriage penalty, as well as strengthening the WOTC program, which has become a major factor in helping individuals become employed and make the transition from welfare to work. We urge our colleagues to support this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am going to support this resolution. There is no question about it. We have to support Israel, irrespective of what party is in charge. The people of Israel are our friends. In these horrible and dangerous times, we just cannot turn our back on them. They have to know we are there for them. Having said that, I must admit that I think the timing of this resolution leaves a lot to be desired. Here we are at a point of high tension. Both Israelis and the Palestinians are wounded and desperate and looking to us for leadership. Secretary Powell has come back from his trip and Prince Abdullah has made his suggestions. As we sit here, the quartet, the U.S.-U.N., U.N.-EU, and the Russian Federation are hammering out some sort of resolution in the White House. We must support Israel, but we must not turn our back against those on the other side, and they should know that, because our objective, primarily, has got to be peace.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, this is a bill that never should have happened. If it had not been for quirks in the Senate language, this all would have been put to bed when we settled the tax reduction issue last year. Now, look, this bill is not perfect. I have questions about the amount of money, I have questions about the timing, I have questions about the estate tax. But basically it is moving us in the right direction. I ask the question, what is wrong with reducing taxes? When I was in business, many times we made money, and sometimes we did not make money. But every so often you would say to your employees, gentlemen, ladies, you have hung with us a long time. We have not given you an increase. Many times we have had to have layoffs. But we are going to give you back some of that money which now we are generating. I think that is a good idea, and that is what this thing is all about. I strongly support this bill.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I would like to support the pension improvements in this legislation, and I want to talk briefly about three issues. First of all, payroll taxes on stock options: for over 30 years, since 1971, the IRS has taken the position that employee purchases of company stock and stock options do not give rise to employment tax obligations. Now the IRS is totally reversing its position, and employees I am sure will consider this a tax increase. What this bill does is to preserve that 30-year policy which we have been operating under for so many years. In addition to higher taxes, several adverse consequences, I feel, are likely to flow from the failure to address the problem. First of all, employee stock purchases will be depressed, reversing the trend in recent years toward greater ownership. Also, because employment taxes are higher until an employee reaches the maximum Social Security wage base of approximately $85,000, the change will also tend to harm those earning below the maximum wage base more than those earning above it. For the same reason, it is going to become more expensive for companies to award stock options to the average worker because employers will bear half the burden of employment taxes. By enacting this legislation, we will preserve existing laws on the incentive stock options. Secondly, some outside the process have criticized other aspects of the bill for creating loopholes. I do not believe that. Democrats have joined Republicans in calling these loopholes reform. I hope they are reforms. What this does is fix mechanical rules that produce irrational results. The simplification provision that is now criticized merely directs the Department of Treasury and Department of Labor to develop simplified annual reporting requirements for businesses with fewer than 25 employees. I have a feeling that the Democratic substitute, although well intentioned, is likely to have the unintended consequence of sharply restricting the availability of the 401(k) plans. Right now the 401(k) plans are a critical part of the structure of incentives for individual savings that we have built into our tax codes. These incentives can only be offered to employees if employers participate. The Enron fraud has taught us the need for diversification to protect a workers' plan. This substitute would impose tough conditions on plan administrators that the best-run companies will have to reevaluate their decision to offer these tax-favored saving plans. They are all voluntary. I do not believe this is what was intended by this particular legislation. Mr. Speaker, I support the pension improvement plan. I support the security plan, H.R. 3762.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing the ``Fairness, Simplification and Competitiveness for American Business Act of 2002''. It would address a number of tax issues facing U.S. multi-national corporations and provide a way to comply with a ruling of the World Trade Organization that our present tax law provides a prohibited export subsidy to these companies. Much has been made about multinational corporations avoiding U.S. corporate income taxes by all sorts of arrangements, including use of offshore entities, re-incorporations/inversions, agreements to avoid loss of foreign tax credits, earnings stripping, sales/leasebacks of assets, etc. There is nothing inherently illegal in what is being done. Does it go to the edge? Probably. I believe much of this activity is motivated by our outmoded international tax laws. We have known for some time that the laws are far behind and out of sync with our trade policy. In fact, our international tax policy seems to promote consequences that may be contrary to the national interest. Ours is a terribly complex system of worldwide taxation, with exceptions for deferral of taxes on certain income earned abroad, and a foreign tax credit system that attempts to minimize double taxation. At the same time, we have tried to alleviate the disadvantage to our multinationals by such provisions as the Domestic International Sales Corporation, replaced by the Foreign Sales Corporation, then replaced by the Extraterritorial Income Exclusion Act of 2000. All of these provisions were aimed at leveling the field for U.S. multinationals, as contrasted to foreign multinationals. The latter typically operate under territorial and value added tax systems that provide tax relief for exporters. The FSC and ETI provisions have been estimated to reduce U.S. tax revenues by over $4 billion annually. The ETI system was enacted after the U.S. lost its appeal of the WTO ruling that the FSC was a prohibited export trade subsidy. A case was brought on the new ETI, and it too was held to be an export trade subsidy. Again, the U.S. lost on appeal. So what do we do now? The bill introduced would do two things. It would provide a number of international tax fairness and simplification changes to the Internal Revenue Code. The bill would include all of the provisions of a bill introduced on March 20, 2002, H.R. 4047, as well as provisions to improve the interest allocation rules and provide a permanent subpart F exception for ``active financing'' income (the current exception expires for tax years beginning after December 31, 2006). In addition, the bill would repeal the ETI. These changes would be effective January 1, 2003). The goal is to promote fairness, simplification and competitiveness in the U.S. international tax provisions to benefit U.S. multinational corporations, and to pay for those changes with the revenue generated from repeal of the ETI provisions. I believe this approach would result in a number of benefits. It would settle the WTO dispute, provide benefits in our present system to the U.S. multinationals, and would not preclude future changes to our entire corporate system, if that is the desire of Congress. I would welcome my colleagues' support of this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Madam Speaker, I am delighted to be able to talk about this bill very briefly. I know there is a contentious issue on 527. I do not think that it is a serious one. Members can have their own opinions, but I think there are enough safeguards to make it accountable. I want to talk about some of the other important features. The bill allows the IRS to waive unfair penalties. The bill allows taxpayers more time to contest levies. The bill allows the IRS to forgive interest when a taxpayer receives an erroneous refund. The bill also makes several reforms on the 10 deadly sins. There is even an 11th deadly sin now. Madam Speaker, this bill is pro-taxpayer and promotes commonsense solutions to some of the more frustrating issues that we are dealing with. I hope my colleagues support the bill.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a bill, the ``International Tax Simplification and Fairness for American Competitiveness Act of 2002.'' The world economy continues the process of globalizing at a pace unforeseen a few years ago. Our trade laws and practices as well as our commitment to the World Trade Organization have encouraged the expansion of U.S. business interests abroad. However, our tax policy lags far behind and seems out of sync with our trade policy. In fact, our international tax policy seems to promote consequences that may be contrary to the national interest. The United States is the largest trading nation in the world. In 2000, the value of our exports and imports of goods and services was about $2.5 trillion, or 25% of our GDP. Although the U.S. is not as dominant in the world markets as in the past, foreign earnings from 1990-1997 represented a greater percentage (17.7%) of all U.S. corporate net income than 40 years ago (7.5%). So our economy is becoming more trade dependent than ever. We confront an economy in which U.S. multinationals face far greater competition in global markets. At the same time, U.S. companies depend more than ever on these markets for a much larger share of profits and sales. In light of these circumstances, the effects of tax policy on the competitiveness of U.S. companies operating abroad is of greater consequence today than ever before. As we continue to discuss fundamental reform of our tax system. I believe it imperative to address the area of international taxation. In an Internal Revenue Code that is a monument to complexity, there is no area that contains as many difficult and complicated rules as international taxation. Further, it cannot be stressed enough as to the importance of continued discussion between the Congress and Treasury to simplify and make fair our international tax laws. The Treasury's publicly expressed intent to work with Congress this year to pursue meaningful simplification is very encouraging. The Joint Committee on Taxation issued a simplification report last year containing many simplification proposals. Some relating to the international tax area have been included in the bill. No one is under any illusion that the measure being introduced removes all complexity or breaks bold new conceptual ground. It is also recognized that the enactment of the bill in its entirety is not likely. It is a list of options from which to choose for an appropriate Ways and Means Committee tax bill. I believe, however, that the enactment of any portion of this legislation would be a significant step in the right direction. Likewise, there are cost implications to enactment. There may well be trade-offs in this regard as we pursue other changes in the tax and trade areas. Lastly, the bill attempts to avoid rifle shot provisions or to create situations for abuse. The bill is subject to an ongoing review to make sure these situations do not exist. The legislation would enhance the ability of the United States to continue as the preeminent economic force in the world. If our economy is to continue to create jobs for its citizens, we must ensure that the foreign provisions of or our income tax law do not stand in the way. There are many aspects of the current system that should be reformed and greatly improved. These reforms would significantly lower the cost of capital, the cost of administration, and therefore the cost of doing business for U.S.-based firms. This bill addresses a number of such problems, including significant anomalies and provisions whose administrative effects burden both the taxpayers and the government. The focus of the legislation is to make the international area more rational. In general, the bill seeks in modest but important ways to: (1) simplify this overly complex area, especially in subpart F of the Code and the foreign tax credit mechanisms; (2) encourage exports; and (3) enhance U.S. competitiveness in other industrialized countries. In summary, the law as now constituted frustrates the legitimate goals and objectives of U.S. businesses and erects artificial and unnecessary barriers to U.S. competitiveness. Neither the largest U.S.- based multinational companies nor the Internal Revenue Service is in a position to administer and interpret the mind-numbing complexity of many of the foreign provisions. Why not then move toward creating a set of international tax rules that taxpayers can understand and the government can administer? I believe the proposed changes in this bill represent a creditable package and a further step toward reform in the international tax area and urge your support.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, as we passed the six month mark since September 11th, I was reminded of one of the more exuberant showings of support from one of our nation's strongest allies. Our good neighbor to the north, Canada. On September 11, 2001, Canadians shared the pain brought on by the events of that morning. Many Canadians wondered what they could do. Our good friend, Canadian Senator Jerry Grafstein, Co-Chair of our U.S.- Canada Interparliamentary Group, was one of the first to contact me to express his condolences and to commiserate. He, like everyone, wanted to know what he could do to help. Then, following Mayor Giuliani's speech at the United Nations where he invited the world to come to New York to help get things back to normal, Jerry and many of his friends decided that the best thing they could do would be to organize a weekend for Canadians to visit New York en masse, contribute to the economy of New York, and physically show their support. Almost immediately, Jerry, his wife Carole, and a handful of outstanding volunteers from the Toronto area went to work. Publishers of the leading newspapers in Toronto ran full-page ads. TV and radio quickly followed suit. Canadian stars in sports and entertainment rallied to create several ads in support of the venture, each taping 30-60 second spots at no cost. Even movie theater owners offered to run the ads when the Harry Potter movie opened in cinemas across Canada. Other businesses made in-kind and monetary donations to the effort including Air Canada, who made discount air fares to New York available from across Canada. New Yorkers also made generous donations to the effort. The Roseland Ballroom was made available at a very nominal rate and venue insurance was donated. Owners of the large screens in Times Square offered to run the ads for free to attract the thousands of Canadians living in New York to the event. Mayor Giuliani issued a proclamation declaring December 1, 2001, ``Canada Loves New York Day'' in New York City. President Bush also sent a message commending the volunteers for their efforts. It was thought that three to four thousand Canadians would attend the rally on December 1st. It is estimated that over 26,000 people actually did attend. Many of them didn't even get near the Roseland Ballroom, but no one complained. It was a tremendous event--one that I will not soon forget. So, Mr. Speaker, I just wanted to thank Senator Grafstein and all of the volunteers who worked tirelessly to make that effort a tremendous success. It is another in a long list of reasons as to why the United States and Canada are the closest of allies.

Mr. HOUGHTON

Mr. HOUGHTON. Madam Speaker, first of all, I would like to thank the gentleman from California (Mr. Thomas) for all the work he has done, and I thank the gentleman from California (Mr. Matsui); but the chairman of the committee has been extraordinary in hanging with this program and trying to get something we could vote on. Look, there are lots of different things, and I will not go through the litany in terms of unemployment provisions and in terms of helping small businesses, because the thing I would like to do is just say thank the gentleman to the gentleman on behalf of New York, on behalf of the liberty zone, on behalf of all those people who need your help. And that is the only thing I have to say today.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise today along with many of my fellow colleagues to urge the President to implement a strong, effective remedy for the U.S. steel industry as a result of the ITC's recent Section 201 investigation, even if I speak from a somewhat different perspective than many of these colleagues. While I am well aware of the importance of a stable domestic steel industry to the financial security and national defense of this country, I do not represent a district with an extensive steel industry presence that has been devastated by the recent steel crisis. However, I do have a steel specialty company that closed last year, laying off many individuals. The plant was recently purchased by a new owner and is in the process of reopening. In addition, I have many constituents in the district with steel-related jobs that have been hurt by the steel imports. In New York State, the number of employees in the New York steel industry dropped by 27 percent from January 1998 to July 2001. I also represent thousands of hard-working Americans who want to know that America's trade laws are going to be enforced if their own livelihoods ever come under a similar attack. That is why I stand before you today. I applaud the President for his recognition that the domestic steel industry is in the midst of a crisis and for initiating a Section 201 investigation. That investigation has culminated in a unanimous agreement at the ITC that the U.S. steel industry has been significantly injured by the unfair trade practices of foreign producers and nations. Our laws now put the ball back in the President's court and call on the Administration to implement a remedy that will give the domestic industry a real opportunity to recover from years of unfair trade and to compete in today's ever-changing marketplace. This remedy must come in the form of strong, tariff-based relief. An effective tariff-based remedy would help return steel prices to their normal pre-crisis levels and allow American steel companies to make the necessary investments to remain viable and competitive in the future. It would also stimulate foreign governments and steel producers to make the difficult decisions that U.S. producers have already made-- to bring stability and balance to the global steel market. In order to be effective, this remedy must meet certain criteria. The first key to an effective tariff-based remedy is that it must be substantial in order to ensure that import prices return to market- based levels. To that end, the domestic industry has determined that a 40 percent tariff rate on flat-rolled products is warranted. In the Section 201 investigation, two of the ITC Commissioners fully agreed with this determination. An effective remedy also must be comprehensive and must be imposed for a substantial period of time. Applying a consistent tariff-based remedy across all flat steel products is the only fair way to impose relief, and the only way to ensure that foreign producers don't simply shift their excess production to other areas. Further, in order for a remedy to have any real effect on the domestic and global marketplace, it must be enforced for at least four years. This will allow the domestic industry to make the necessary adjustments to import competition, and the President to achieve his objective of repairing the global steel trading system. In endorsing the use of an effective, tariff-based remedy, I strongly urge the President to steer clear of quota-based relief. Such a remedy would further distort the global marketplace by providing an artificial incentive for foreign producers to ship substantial amounts of low- priced steel into our borders as quickly as possible in order to ``get in under the quota.'' The last thing U.S. producers need at this time is another uncontrolled flood of under-priced steel. The Administration has promised on a number of occasions to be tough on unfair trade, and now is the time to live up to that promise. The President must implement this effective tariff-based relief in order to demonstrate to foreign producers and governments that the Administration is serious about addressing not just the problem of foreign excess steel capacity, but also the problem of unfair trade practices in general. Our laws are consistent with international law and designed to ensure that our industries have somewhere to turn for relief when they fall victim to unfair trade. These laws are only effective to the extent they are enforced, and their enforcement is a duty that we owe to the American people.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, thank the gentleman for yielding me time. We are going to be talking at cross purposes here as we come from different bases. We have different philosophies. We have set in concrete certain impressions that we got. I will state how I come out on this thing. I think we have three issues. First of all, the economy is still in trouble. Secondly, people need unemployment insurance, an extension of that; and, thirdly, we have a hole right in the City of New York and we have got to fill it. Now what is not clear is how we go about fixing these things. Members can say the alternative minimum tax is a boondoggle and it does not help economic recovery. But I could say it does. But the important thing is we get investment and people back to work. Now, that is a difficult situation. When times are good, we do not do anything. When times are bad, there is the point when the government has to step in. And frankly, something has to be done. And I do not know whether it will be resolved here or whether it will be resolved in conference. But something has to be done by the United States Government to try to put a little juice and a little impetus back into the economic recovery. If not, we are just going to be languishing and waiting. Secondly, as far as up employment insurance, I do not think there is any question about it. I think we ought to do it. I do not think there is any argument on it. As far as the Liberty Zone in New York, the only thing I can comment on there is time is of the importance there. There are a lot of people making decisions about where they will reestablish themselves, what buildings they will go into, and we have 20 million square feet that was destroyed down there. Maybe some of the head offices of the larger financial firms will stay there, but what about the support staff? Time is terribly, terribly important.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, I will make this brief. I am opposed to this amendment. I am for the Shays-Meehan approach, and I will tell you for three reasons. First of all, we have a financial crisis in this country augmented by Enron and Arthur Andersen. Somehow we have got to get the credibility in the system back again. Frankly, I think the Shays-Meehan approach will help us in a political way, not just in an economic way. Secondly, I remember when I first got interested in Republican politics, when Ronald Reagan came in. There was no soft money. We did not use that then. There was no necessity for it. It worked perfectly under the old rules. I think we ought to go back to those rules. The third reason is this: When I was in business, we never, never, never used soft money, and I know that a lot of people came to us and said we were unpatriotic, we were not supporting the different parties. Crazy. Wrong. What we did is we marshaled our plants and our sales offices and our laboratories and got people out, raised the money, got them involved. I am for Shays-Meehan.