Joe Knollenberg

Mr. KNOLLENBERG

Mr. KNOLLENBERG. Mr. Speaker, today I rise in strong support of the line-item veto which will effectively give the President the ability to strike out pork-barrel projects from otherwise good legislation. The line-item veto will end the ``Christmas Tree'' practice of tacking on pet projects to wholly unrelated legislation--burying the details away from the public's eye. Last year and in 1993 we saw this practice expand to an unprecedented level. The most flagrant abuse was after the city of Los Angeles was devastated by the earthquake. Congress eventually passed the emergency supplemental earthquake assistance bill, but not before slipping in $10 million for a train station in New York, $1.3 million for Hawaiian sugar cane mills, and $20 million to add employees to the FBI in West Virginia. This list of abuses goes on and on and the taxpayers are stuck with the bill and asked to pay more of their fair share. I don't think they would think that their share should include $1.1 million for a national pig research facility in Iowa or $35 million to eradicate screw worms in Mexico. Mr. Speaker, tacking on these types of pet projects has become a runaway train and the American taxpayers are getting taken for a ride toward economic disaster. Let us keep the train on the tracks. I urge all of my colleagues, on both sides of the aisle, to support this critical piece of legislation.

Mr. KNOLLENBERG

Mr. KNOLLENBERG. Mr. Speaker, I rise today, along with my colleague Mr. Kolbe, to introduce the Common Sense Welfare Reform Act of 1995. We believe this legislation could revolutionize the way we deliver social services to the Nation's poor. Over the course of the last 60 years, government, whether it be Federal, State, or local, has assumed almost complete responsibility over caring for the Nation's poor. Like it or not, our welfare delivery system has essentially become a government monopoly. And it exhibits all of the worst symptoms: It is woefully expensive; it is overly bureaucratic; it is preoccupied with process; and it is client- ignorant. Every year, it gobbles more of our tax dollars without any incentive to cut costs or streamline itself. The American welfare monopoly has also undercut the efforts of private organizations. It has made it nearly impossible for charities to place conditions on their aid, when prospective recipients can walk down to the local welfare office and pick up a government check, no strings attached. It has almost singlehandedly created what the Wall Street Journal's John Fund calls the I-gave-at-the-office syndrome. In fact, the portion of charitable giving in this country devoted to alleviating poverty has declined by a shocking one-third since 1960. So the question remains: How should we reform the welfare delivery system? Our bill, like many others, would consolidate dozens of overlapping, inefficient Federal programs and put that money into a State block grant. However, it also provides for a choice-in-welfare tax credit that would give individual citizens a voice in how this country fights poverty. Under our plan, every taxpaying American would be free to direct up to 10 percent of their Federal income taxes to a charitable organization in their community that is engaged in antipoverty efforts. Each time a taxpayer claimed this credit, the Federal Government would make a corresponding reduction in their State's block grant--thereby making it revenue neutral. The Federal Government already has a regulatory framework for overseeing nonprofit organizations, minimizing the need for additional bureaucracy. However, State governments often have a more active oversight program, so we would require that participating charities obtain State tax-exempt status as well. In addition, to ensure that tax credit contributions are reaching the people they're intended to serve, it would be necessary to establish guidelines for participating charitable organizations. For instance, charities would be prohibited from using the proceeds to engage in lobbying or litigation activities. We would also require that at least 70 percent of a participating charity's expenses be allocated directly to the poor. And charities would be required to expand tax credit- generated contributions within 1 year of receipt. To maintain the separation of church and state, religious organizations must have a subsidiary devoted to social welfare to be eligible. Organizations that have a religious component, but are primarily focused on social welfare--i.e., Salvation Army--would be eligible as well. Finally, to guard against possible fraud, taxpayers themselves would not be allowed to donate tax credit-funded contributions to charities in which they have a financial interest. Our funding mechanism is a revolving account within the Treasury Department that would hold the vast majority of the money the Federal Government intends to spend on poverty in the next fiscal year. Once Congress appropriated the money for this account, a small portion would be set aside to cover the cost of the tax credit, and the rest would be given to the States in block grant form. After April 15, any funds left in the tax credit set-aside would be given to States as a bonus. It is important to note that the tax credit/block grant funding mechanism will be separated at the State level. For instance, Michigan's total Federal grant would be determined by how many of its citizens gave to instate, qualified charitable organizations. This is to ensure that the effects of competition are always tangible. There are a few other provisions worth noting. First, we phase in the tax credit over a 5-year period to ensure that the transition to a public/private partnership is a gradual one. contribution above that level would be tax deductible as it is now. Similarly, contributions to other nonprofits would also retain their present deductibility. In closing, we believe that if our bill was enacted, we could at once reduce Federal spending and micromanagement, create competition among aid providers, reinvigorate a charitable sector whose tremendous capacity has been subverted by government intrusion, and finally begin to attack poverty in a truly meaningful and effective way.

Mr. KNOLLENBERG

Mr. KNOLLENBERG. Mr. Speaker, last night we heard President Clinton call for an increase in the minimum wage. Leon Panetta claims such an increase will ``keep people interested in work rather than in welfare.'' It must have been a busy week for the writers over at the White House. Not only did they have to write a State of the Union Address, but they had to rewrite basic economic theory as well. Last Wednesday, Mr. Carlos Bonilla, an economist at the Employment Policies Institute, testified before the Opportunities Committee. He argued that low wage jobs, not job training programs, provide the best means to break the cycle of dependency. He also warned that raising the minimum wage would deprive many welfare recipients of the opportunity to work their way off welfare. I urge my colleagues, who believe that raising the minimum wage rate will help the poor, to review Mr. Bonilla's testimony. The President's intentions may be good, but raising the minimum wage is bad policy. As the House begins to consider legislation that will move welfare recipients toward self-sufficiency let us not lift the bottom rung of the occupational ladder beyond their reach.

Mr. KNOLLENBERG

Mr. KNOLLENBERG. Mr. Speaker, the 10th amendment states that powers not delegated to the Federal Government will be reserved to the States and the people--not the other way around. However, the Federal Government has turned this amendment on its head by passing on to the States the costs of legislation it cannot afford. This costs States and taxpayers billions of dollars and countless hours in an effort to comply with extraneous regulation. The States are being forced to sacrifice their own programs and priorities in order to comply with Federal regulations. In my own State, we passed the Headlee amendment to the Michigan Constitution in 1978. This prevents the State from imposing mandates on local governments. This has worked to the advantage of the entire State; saving money and cutting burdensome regulation for local governments. The proposed Federal Unfunded Mandate Reform Act will allow greater flexibility for State and local governments, more accountability for Congress and savings for the American taxpayers. Mr. Speaker, if the Federal Government cannot pay for it, we should not force the costs on the States. It is time we take responsibility for our own actions.

Mr. KNOLLENBERG

Mr. KNOLLENBERG. Mr. Speaker, as we debate the reform of our Nation's welfare system, our deliberations must include a close examination of the federally mandated system of calculating rents paid by residents of America's public housing. The evidence is striking. The current system of establishing rents in public housing is set by bureaucrats in Washington. It provides no flexibility to provide incentives for residents to make a better wage or even find work. In most cases, if a resident of public housing obtains gainful employment, they end up with less disposable income than if they had stayed on welfare. That is right, less money by going to work. Is it any wonder we have generations of people who are addicted to the public dole? In the last Congress, this body passed a housing bill which included a provision which I sponsored, entitled the Rent Reform and Empowerment Act, which would reduce these disincentives through a system of income disallowances and ceiling rents. Unfortunately, it was killed in the other body. Mr. Speaker, today I am reintroducing this important legislation. It is time we applied a little common sense. And keep in mind it has been this Government that has imposed some of the highest tax rates on America's poor.