Kenny Hulshof

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, we all have probably heard the favorite saying of the former Speaker of the U.S. House, Tip O'Neill, ``that all politics are local.'' Taking this quip to heart, the actions of William Markgraf, the Fire Chief of Columbia, Missouri, show that in this rapidly shrinking world, even strong international relations can be encouraged locally. Recently, Chief Markgraf informed me about a remarkable relationship that he has formed with another firefighter from Moers, Germany. The story begins about 12 years ago, when a volunteer firefighter named Michael Stroinski from Moers trained and worked with the Columbia Fire Department during their Spring Fire School. Moers, which is about 15 minutes outside of Dusseldorf, has a fire department that is largely composed of volunteers and serves nearly 125,000 people. For the last twelve years, Michael has returned nearly every year to Columbia, sometimes bringing as many as six of his company-mates from Germany with him to train, work and live with members of the Columbia Fire Department. In kind, Michael has repeatedly extended a similar invitation to Chief Markgraf and others from the C.F.D., who have gratefully accepted, resulting in a vibrant exchange program between Moers and Columbia firefighters. This July, Moers will be celebrating the 150th Anniversary of its central fire station and has invited members of the Columbia Fire Department to attend this celebration. For this reason, I would like to send my thanks and the thanks of those in this chamber to the people of Moers, Germany for the hospitality they have extended to my constituents. In addition, I would like to recognize Michael Stroinski, Captain of Moers Fire Station One, for his meritorious service to his city and the people of Columbia in the line of duty, as well as for his role in fostering a partnership and good relations between these two international communities. Mr. Speaker, it is my hope that this anniversary celebration will be as successful as the relationship formed between Columbia and Moers, and I wish Michael and the other German firefighters many safe returns to Columbia, Missouri.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, I thank the gentleman for yielding me this time, and, Mr. Speaker, a recent editorial in the Washington Post earlier this week denounced our actions today and the title of the editorial was Government by Bumper Sticker. And, of course, the editorial set out many of the same arguments we have heard from those on the other side. I guess if I were to think of a bumper sticker, it would be one I saw over the break of the Memorial Day recess. The bumper sticker on the back of this RV traveling the highways of Missouri said, I am spending my kids inheritance. Now, I will confess, I took a quick double take to make sure the occupants of that RV were not my own parents on a cross- country spending spree. But then I began to think about the gist of that sticker, and how it is that in some instances it is cheaper to dispose of family assets before death than passing it on to our descendants and making them sell off those family assets after death. I suppose our friends on the other side will say we should take some solace in the fact that at least predeath that they are enjoying the fruits of their labor rather than collecting those fruits, bringing them here to Washington and then letting 535 Members of the House and Senate decide how to spend the fruits of those labors. But I say, no. And with all due respect, and with high regard for my friend from New York and his substitute, I guess if I were to pick a bumper sticker for the substitute it would be Mend It, Don't End It. I would ask the gentleman and everybody that would say we should not have a complete repeal to justify for me the continuation of the inheritance tax. And I see my friend from Vermont would like to justify for us why he believes we should not do that, and I will let him do so on his time, but knowing his political ideology, I imagine it would be that we should redistribute wealth in this country. And I appreciate that, yet we already have a redistribution of wealth in this country through the progressive tax rates and the fact that we deny tax deductions and credits for those that are successful in this country. What has not been discussed here is the economic cost of compliance and avoidance of the tax. The fact is that the Joint Economic Committee says that in 1998, $23 billion were spent to avoid the tax. The same amount that we generated in revenue. My colleagues, it is time to be bold. And with all due respect to the substitute and the intent behind it, if I were again to pick out a bumper sticker that I support it would be ``It's Time to Give the Death Penalty to the Death Tax.'' Reject the substitute and vote in favor of H.R. 8.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, I appreciate the gentleman yielding very much and especially on this very timely topic, as we have this discussion tomorrow on get getting rid of the Federal death tax, this very punitive tax. I know the gentleman has been talking about a recent editorial, in fact I think in today's Wall Street Journal. I am mindful of an editorial that was written in yesterday's Washington Post in a similar vein that indicates that what we are about to do tomorrow is ``Government by Bumper Sticker,'' as the editorial says. I suspect that we are going to have during the course of this debate that mantra from those who oppose this idea that this is tax breaks for the wealthy. And yet, speaking of bumper stickers, the gentleman has been talking about friends near and dear to him back home in Colorado, but over the Memorial Day recess I had the opportunity to travel the highways of Missouri's 9th Congressional District, and I got behind this minivan vehicle that was pulling a camper trailer behind it; and the bumper sticker on the camper trailer said ``I'm spending my kids' inheritance.'' And, of course, this is kind of a whimsical thought. And first I had to make sure that was not my family that was traveling down the highway spending their kids' inheritance. I think it points up really a more serious issue; and that is, it really in some cases, and my colleague pointed out some very real-life examples, in some cases it is cheaper to sell off the family business pre-death rather than to experience first of all the personal tragedy of the loss of a loved one but then having to deal with the Internal Revenue Service at the moment of death. The best bumper sticker slogan that I can think of regarding this issue is as follows: ``The death of a family member should not be a taxable event.'' The point is, and I know that the editorials talk about and my colleague has spoken very eloquently and very passionately about the opponents of this repeal say, well, this is only going to help, as you my colleague mentioned, the Bill Gateses or the wealthy class but the wealthiest Americans. I think what gets lost in all of the debate is how many resources, how much money is spent, how much time and effort is spent in a way to avoid the death tax. There is not a lot of discussion about the amount of, again, resources committed to estate plans. Now, I have got many friends that are tax lawyers or accountants. But speaking of a real-life example, back home in Columbia, Missouri, which is my home, a family, the Eiffert family, Howard Eiffert started a lumber business, along with his wife Lucy; and they worked very hard during the course of their lifetimes; and their two sons, Brad and Greg, who now are the principals in that lumber business. And it has been successful. People around the mid-Missouri area recognize this lumber company. Howard is now enjoying retirement, and he is becoming more seasoned as a mature American. And yet the amount of money that the Eiffert family, particularly the two principals are spending, $35,000 a year on insurance premiums. And the sole purpose of purchasing that insurance policy is to have something in place so that when the inevitable mortality occurs that they will have proceeds from which they can then pay the Federal death tax. That is $35,000 a year of capital that they could be investing in their business, investing in their families, putting aside money for a college education, whatever, letting them have that decision. But instead they are making the choice to put 35 grand a year in an insurance policy because they know that, as they have done their estate planning, that they are going to be socked with the Federal death tax.

Mr. HULSHOF. I think what needs to be mentioned, Mr. Speaker, is that under present law, certain estates are shielded from the Federal death tax and that exemption or that unified credit, to talk the terminology, presently is under $700,000. If you consider a family farm anywhere across the country but certainly in Missouri, let us say if you have a 400-acre farm and let us say for the purposes of this hypothetical, $1500 per acre, some places in Missouri that would be low, some places in Missouri perhaps high but I think on average if you say $1500 per acre average, for a 400-acre farm, right there you are talking about a $600,000 value just on land, not mentioning equipment that is needed to produce, not talking about the residence or the home. My friend from Colorado mentioned his constituent, having grown up and being born and grown up in the residence and worrying about being able to hang on to that asset. Life insurance proceeds, all of this becoming part of the estate that now is subject to the tax. Once that estate value is $1 more than the exemption, you are looking at about a 37 percent tax rate up to, as the gentleman says, over half, 55 percent and in some instances as high as 60 percent. The point I would like to make is this, and I hope tomorrow as we have this debate, I really would encourage or challenge anybody who opposes this to give me a good policy reason why we have an inheritance tax. Really what is the reason? Two weeks ago in this House we repealed the Spanish American War tax that was imposed 102 years ago in 1898, that, quote, temporary tax to fund the Spanish American War which now we finally repealed, the inheritance tax as we know it today, 1916 and really what is the policy reason? What is the justification? I can really only think of two. One is to punish the successful, which I do not think even our liberal friends would necessarily agree with that. The only other instance I can think of as far as justification for keeping the inheritance tax is redistribution of wealth. I think certainly under our present tax code and the progressive nature, there are many far better ways and certainly when we are talking about to, quote, raise revenue for the government, rather than this very unfair tax which I think punishes family farms, family businesses of whatever size, whether they are facing the tax or whether they are expending resources to avoid the tax along the course of one's lifetime, I think that tomorrow afternoon we will be gratified with a vote. I would hope and I know our friends down on the other end of Pennsylvania Avenue have issued some sort of a veto threat under the present bill, I would like to see as we get that vote tallied tomorrow, a two-thirds vote in this House. It is a bipartisan bill with 45 Democratic cosponsors, many Republicans, and so I urge my colleagues, Mr. Speaker, to vote in favor of this repeal, to do what is right, because again the death of a family member should not be a taxable event.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, the word courage is used to describe many things. President John F. Kennedy wrote the best selling book ``Profiles In Courage,'' and we in the House of Representatives are often asked to vote the courage of our convictions. Courage is often associated with our national war heroes. To a lesser degree, the word ``courage'' is used to describe athletes who persevere despite injury. Winston Churchill defined courage as the first human quality because it is the quality which guarantees all others. While Sir Winston did not know Laurie Spracklin-Noel, his words surely describe her. Laurie, a constituent, was recently diagnosed with stage-three cancer. As a wife, a mother of four, an OB/GYN nurse, an award winning actress and speaker, Laurie has shown her ability to succeed in many areas. At the same time, her most important accomplishment is yet to come. When this event happens Laurie will add the distinction of cancer survivor to her list! Laurie is determined to overcome her cancer through the combination of chemotherapy, the strong support of her family and friends in Moberly, Missouri, and her positive attitude and yes, her undaunted courage. In fact, Laurie has said, ``even if this cancer were in stage four, I'm going to beat it.'' While Laurie knows she is in the fight of her life, her attitude, disposition, and faith make this fight winnable. Napoleon said, ``Courage is like love; it must have hope to nourish it.'' Laurie is an inspiration to her family and community. They have hope that through her courageous efforts Laurie will win her battle. Mr. Speaker, the thoughts and prayers of my colleagues and I go out to Laurie and her family and we wish them well for the future.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, I appreciate my friend from New Mexico yielding and especially for taking the initiative to really focus on what I believe should be a national dialogue, and that is the education of our kids. I am not embarrassed to admit that I am a 5-month-old parent. And, of course, as a new parent, one's attention begins to focus maybe on different priorities. I know in our household we have, and we have begun to think about the education of our daughter Casey Elizabeth. Here in Washington, as my friend knows, too often I think we begin to focus on or define our Nation's educational success by how many dollars that we put toward public education. If that were the yardstick, then I think the Republicans here in the House deserve great credit. Since 1995, public funding education has been increased by 27 percent over those several years. But that is not how I think we should define educational success. To me, it is much simpler than that; that success is defined by how much our children learn. And, of course, I think key in that is trying to get parents to become more involved in the education of their kids. Now, as my colleague knows, as a mother, we cannot pass a law in this body that mandates parents' attendance at PTA meetings. Some wish maybe we could force that mandate on families, but that is not the role of the Government. But I think there are things that we can do. And as my friend has talked about, the bill that we have on the floor on Thursday this week, H.R. 7, I think is a key component. It is not the answer to all of our educational problems; but I think as far as parental control, we do provide some incentives, yes, through the Tax Code. Our idea of this bill is very simple. We think that the Federal tax should be eliminated if they are saving for education. As my colleague was pointing out just a few minutes ago, current law that this President signed into law, this education savings account, says that up to $500 a year can be contributed by a family member into an account. But as you also very ably pointed out that even if, let us say, over the course of the lifetime of your child, from the moment they were born every year until they go to college, the money they would have saved for college is about $15,000 and that is assuming compound interest at about 7\1/2\ percent. So I think first and foremost, we have to sort of take that limit off to really encourage parents to be saving even more for the education of their kids. To me, the perfect bill that the President should sign into law would be, number one, an elimination of the marriage penalty tax; and since most of that is about $1,400 more per couple, then that family with children can plug that money into an expanded education savings account. As you pointed out, the point is saving for higher education is important. And yes, perhaps the controversy in this bill as we are probably going to hear in less measured tones as we debate this bill in the next couple of days is, we think that elementary and secondary education expenses should qualify. If your first grader is having a tough time reading, why not use the proceeds of an education savings account to maybe purchase Hooked on Phonics to help bring your child up to the reading level that he or she should be in a particular grade. If you are having trouble with math, maybe a home computer or a computer program that might help a child learn math better, or maybe a foreign language. It could even be expenses like car pooling or transportation expenses. The beauty of an expanded savings account is, it is not the government saying how money should be spent. It is the parents. I think what a powerful ally that a parent can be working with a teacher in addressing the special needs of that particular child.

Mr. HULSHOF. If the gentlewoman will yield on that point, not just businesses and corporations but not-for-profits would also be allowed under this expanded savings account to provide a contribution as you have suggested, perhaps for that low-income child. It could be a church who might establish on behalf of a parishioner an expanded education savings account to really provide an incentive for that child to continue to go on. One of the arguments that I hear and probably that we will hear more over the course of the debate on this bill is that allowing, and again we are talking about the interest buildup or the earnings, first of all these are after-tax dollars going into an education savings account and then the power of compound interest being used to create additional earnings, we are talking about allowing those earnings to accumulate tax-free if used for a qualified education expense. Now, one of the arguments against elementary and secondary education expenses is that only the affluent, or we are taking money away from public education. I think as my friend from New Mexico has the chart right next to her, it speaks volumes. The reductions that we would see in Federal education spending would be zero. No money would be diverted away from public education. In fact, the official scorekeeper that we work under, the Congressional Budget Office along with the Committee on Joint Taxation, says that we will have additional resources committed to the education of our kids coming from the private sector, that is, coming from families that we do not see now. In fact, they tell us some of these numbers. Fourteen million families would benefit from this expanded savings account, and about 11 million of those families have kids going to public school. So, in other words, we are committing even additional resources from the private sector, from the families for education expenses at the elementary and secondary education level. The other point I would make, current law restricts education savings accounts to be used just for public college, obviously a worthy goal, higher education, but that means education savings accounts are useless in addressing problems that are being experienced in elementary school or in high school. And so while you may try to get to college, it might be that if we could have parents working with teachers as allies in the lower grades, then children will be more prepared to enter college. So I think it is a little bit of a myth as far as the argument on the other side that somehow we are taking money out of the Federal education system. Just the contrary. We are committing more private funds, that is, private savings funds committed to the education of our kids, both primarily in public education and yes, perhaps private education or even home schooling. The idea is simple. We do not think any child should be discriminated against based on where he or she chooses to attend school.

Mr. HULSHOF. In addition, and that is so critically important, what a popular idea that is in place in your State and in other States as far as prepaid State tuition plans, to be used again as a tool focusing on higher education. Here are a couple of other perhaps noncontroversial measures in H.R. 7 that I think deserve some mention in addition to the prepaid tuition plans, ending that taxation on both public and private plans. We also help those that are saddled with heavy student loans. How many of us in this body perhaps have used student loans to invest in ourselves in education to maybe go on to higher education or to postgraduate studies. What we do to try to give some relief to those under that heavy burden of student loans is that we continue, we expand the student deduction, the loan interest deduction under current law, we expand that, allow more time for that deduction to be made possible. In addition, there is a lot of discussion about school construction. Interestingly as we debated this bill in our committee, in the Committee on Ways and Means last week, we had a representative from the U.S. Treasury, obviously from the administration, and I pointed out in a document that was printed in 1996 that the statement of the administration was they believed the construction of schools is a local initiative. Yet I guess over the course of the last couple of years, we have suddenly changed or at least the White House has changed into thinking that suddenly school construction and modernization should be a Federal initiative. Without getting into the merits of whether it is a State, and I happen to think it is a State and local initiative, in fact in my home county, Boone County, Missouri in the Ninth Congressional District on the April ballot, we will be going to the polls to decide a bond issue as it appropriately should be done at the local level. But what we also do is provide in this bill relief from some of the complicated rules called bond arbitrage rules that both States and localities use when they make that decision, when they go to the local voters and decide whether to renovate or to build or modernize their school structures, we provide some relief for them. That is also in this bill. Finally, we encourage the private sector to donate computers to schools. And so we have that provision in H.R. 7, as well. Probably not as controversial as some of the other things we have discussed. As a final point, and I see we have got one of our other classmates here, then I will yield to the two of you. You mentioned the policy, and I want to talk about the policy, about using the Tax Code for certain incentives. Let me tell you why I think that it is just good policy generally to encourage savings. Right now, and for those, Mr. Speaker, that may be wrestling with their 1040 forms and maybe have C- SPAN on in the background, if you look at your 1040 form on line 8A and line 8B, you plug into, as far as part of your taxable income, your adjusted gross income, any interest you may have earned, whether on a certificate of deposit, whether it is on a savings account, the old traditional savings account or any dividends you receive, you have to add that obviously to your taxable income according to current law and Uncle Sam wants his share. There is no wonder that we are the lowest savings Nation among industrialized countries. We have already precedent in existing law. We encourage people to put aside money after tax dollars for their retirement, with the Roth IRA, a very popular idea. That is, one puts aside one's after-tax dollars, it accumulates interest or earnings, and then it is not taxed when used for retirement. We had a provision that we sent to the President called the SAFE Act that would shield about the first $500 of interest or dividend income again, to help the small or moderate investor, not the Wall Street types that make a living at investment, but really trying to help middle-class families. Along that line, this education savings account, I think, falls right in that good tax policy, and that is trying to provide this incentive to encourage people, especially families, to plug away more money, whether it is putting nickels and dimes or a monthly set-aside from their paycheck into an education savings account for their child or children. Again, what could be more of a worthy exercise than to invest in your own children's future, not rely upon the Federal Government? Again, I commend the gentlewoman for bringing this issue to the attention of the full House. I look forward to the debate. I hope we can have the debate on policy; and I hope the rhetoric does not get too harsh or hot, although that may be asking for a lot; but nonetheless, I urge, Mr. Speaker, my colleagues to support H.R. 7 when it gets to the floor. I thank my friend for yielding me time this evening.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, due to the birth of my daughter Casey Elizabeth Hulshof, I was not present for rollcall votes 550 through 564. Had I been present, I would have voted ``yea'' on rollcall vote 550, ``yea'' on rollcall vote 551, ``yea'' on rollcall vote 552, ``yea'' on rollcall vote 553, ``yea'' on rollcall vote 554, ``yea'' on rollcall vote 555, ``yea'' on rollcall vote 556, ``yea'' on rollcall vote 557, ``nay'' on rollcall vote 558, ``no'' on rollcall vote 559, ``aye'' on rollcall vote 560, ``yea'' on rollcall vote 561, ``yea'' on rollcall vote 562 and ``yea'' on rollcall vote 563.

Mr. HULSHOF

Mr. HULSHOF. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida (Mr. Shaw), the Chairman of the Subcommittee on Social Security who has been championing this issue through our subcommittee. (Mr. SHAW asked and was given permission to revise and extend his remarks.)

Mr. HULSHOF. Mr. Speaker, I ask unanimous consent that each side will have an additional 5 minutes for a total of 10 minutes to be added to the entirety of the debate.

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from Minnesota (Mr. Ramstad), cochair of the Disability Caucus. (Mr. RAMSTAD asked and was given permission to revise and extend his remarks.)

Mr. HULSHOF. Mr. Speaker, I yield myself 30 seconds. I am disappointed, Mr. Speaker, that the gentleman from Ohio who just spoke would take such a negative tone. This really was an effort to reach bipartisan consensus. In fact, I would point out to the gentleman that in the last Congress, by a vote of 410-to-1, we passed a Ticket to Work piece of legislation and made vast improvements to that bill, and that is the bill that is in front of the House today. I would regrettably urge the gentleman to support the bill. Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Cunningham).

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. English).

Mr. HULSHOF. Mr. Speaker, if the gentleman from California will indulge me, we have a handful of 1-minute speakers, and at this time I yield 1 minute to the gentleman from Arizona (Mr. Hayworth), my good friend.

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from Florida (Mr. Foley), another champion on the Committee on Ways and Means.

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Herger), another member of the Committee on Ways and Means.

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from Kansas (Mr. Moran), my good friend and classmate. (Mr. MORAN of Kansas asked and was given permission to revise and extend his remarks.)

Mr. HULSHOF. Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from Maryland (Mrs. Morella). (Mrs. MORELLA asked and was given permission to revise and extend her remarks.)

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from New Hampshire (Mr. Bass).

Mr. HULSHOF. Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Weller), another member of the Committee on Ways and Means, and my seat mate. (Mr. WELLER asked and was given permission to revise and extend his remarks.)

Mr. HULSHOF. Mr. Speaker, I am happy to yield 1 minute to the gentlewoman from New Mexico (Mrs. Wilson), another classmate of mine.

Mr. HULSHOF. Mr. Speaker, I am happy to yield 1 minute to the gentlewoman from Connecticut (Mrs. Johnson), another tireless advocate for this bill, and a trusted Committee on Ways and Means member.

Mr. HULSHOF. Mr. Speaker, I am happy to yield 1 minute to the gentleman from Connecticut (Mr. Shays).

Mr. HULSHOF. May I inquire, Mr. Speaker, of the time remaining.