Robert Matsui

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I rise today to celebrate the 100th anniversary of the Sacramento Metropolitan Chamber of Commerce. On September 27, 1895 the city of Sacramento and State of California incorporated an organization called the Sacramento Chamber of Commerce. As the chamber grew in numbers, reach, area, and issues it subsequently changed its name to the Sacramento Metropolitan Chamber of Commerce to reflect its size as the largest business association in the area and its regionwide influence. The goal of the Sacramento Metropolitan Chamber of Commerce through the last century has been to enhance the development and growth of the business community in California and the Sacramento region. [[Page E 1852]] The Sacramento region has grown from an agriculture-based economy in 1895 to a highly diversified one that has a leadership role in the State and the Nation in high technology, entertainment, agriculture, trade, and more. The Sacramento region is a growing economic force in California, the capital of the eighth largest economic power in the world and a developing partner within the Pacific rim. Congratulations as the Sacramento Metropolitan Chamber of Commerce celebrates its centennial anniversary and recognizes 1995 as a year of reflecting on Sacramento's past and being part of the future.

Mr. MATSUI

Mr. MATSUI. I would like to thank the distinguished dean of the California delegation for yielding to me and also setting up this special order tonight on behalf of our dear colleague, the gentleman from California [Mr. Mineta], [[Page H 9573]] from San Jose, CA. I am only going to take a few moments. But I would like to just say on behalf of the people of the State of California, certainly my colleagues in the U.S. Congress and certainly the Asian-American community and people of color generally that we are losing in this institution in the next few weeks truly one of the champions and one of the leaders that, in my opinion, will go down in history as truly an outstanding legislator. When I decided to run for Congress in 1978, one of the first individuals that called me was Norm Mineta to offer his assistance, even though I was going to be engaged in a very, very difficult Democratic primary. I cannot tell you how much that moment meant to me when that phone call came in, and from that time on I have looked upon Norm Mineta as really not only a colleague and a dear friend but as a mentor, as somebody that I would look to in terms of a rule model for leadership, for values of what it is to be a legislator. I think that all of us, as a result of Norm's leaving this institution and going in the private sector, will miss him truly, dearly. As many know, he was born in 1931 in San Jose, CA. One of the great achievements, I believe, of this institution over the last 20 years was the passage of House bill 442, which was the bill to provide compensation to Americans of Japanese ancestry, a bill that Norm Mineta introduced and which Norm was really the singular most important leader in moving that legislation through this institution. Norm was 10 years old in 1942, 11 years old. He was a member of the Boy Scouts in San Jose, Cub Scouts in San Jose. His father was in the insurance business, and his mother and other brothers and sisters were living in San Jose. As I mentioned, he was born in San Jose, 11 years earlier, in 1931. In 1942, in April, Executive Order 9066 was passed, which asked that Americans, Americans of Japanese ancestry, be interned for the duration of World War II. As I said, Norm was 11 years old. No charges were filed against him, although he was an American citizen. No trial was had. But Norm was incarcerated, along with his parents, brothers and sisters, and 120,000 other Americans of Japanese ancestry for a period of 4 years. Some 40 years went by before Americans of Japanese ancestry were even able to talk about this, and one of the real problems that we had was the fact that to talk about the incarceration by your own Government raised the specter of disloyalty, and so it was something that we had a very difficult time discussing. It was better to hide it than to bring it out. I remember when I was in junior high school and we were discussing World War II, and one of my teachers, very well-intentioned, said to me, ``Bob, weren't you in one of those camps?'' I was a 6- month-old infant when I was interned, and I recall looking around my at my classmates, and I denied it, because it was easier to deny it than to explain why you were jailed by your own Government because that would raise the issue of whether or not you were loyal or not. Well Norm Mineta, when he came to Congress, decided that he was going to rectify that wrong, that injustice. Over the years, Norm introduced, as I mentioned, House bill 442, which would provide an apology by the U.S. Government to those surviving Americans of Japanese ancestry, 66,000 at the time, about a half of the 120,000, and also token compensation of $20,000 per surviving internee, and as everyone knows, on September 17, 1987, the 200th anniversary of the signing of the Constitution of the United States, and that date was picked by then Speaker Jim Wright after Norm Mineta requested that he pick that date, the House of Representatives, by an overwhelming majority, passed that legislation. It went to the Senate, and Senator Inouye, Senator Matsunaga, and a number of others were very instrumental in having that legislation passed, and then President Reagan, in August of 1988, signed that legislation. I have to say that if that were Norm's only feat, he would go down, in my opinion, and I think in the opinion of many, as a giant, a legislative giant, because in the middle of a period of austerity, to pass that kind of legislation, in my opinion, most people would have thought was impossible. Norm is now known only for those kinds of achievements. Norm, as many recall, was the chairman of the House Public Works and Environment Committee. He was the leader in moving the legislation, which later was known as ISTEA, a bill that provided sums of money to localities to build up and repair the infrastructure of this country, which, in my opinion, still in America is so sorely needed, but with Norm's leadership we were able to do this in a very, very important, environmentally secure way. I will not take any more time, I say to the gentleman from California [Mr. Brown], but I would like to just close by making one final observation, if I may. There is so much that one can say about my colleague, Norm Mineta, but I would like to just close by making this one final observation about him. I think that if one looks back at history 50 years from now and one looks at this period, one will find that the legislation that he led and sponsored to provide compensation to Americans of Japanese ancestry will go down in history as one of the most monumental legislative feats that has occurred in the last 25, maybe 30 or even 40 or 50 years. The reason I say this is because it is not often when a government can admit it is wrong. It is not often when a government is willing to say to its own citizens, ``We made a mistake, and we want to provide an apology and some minor token redress to you.'' I think what Norm's career in this institution and as a legislator represents is that one person, one person in this great country of ours, can indeed make a difference. I would just like to say to Norm and his wife, Danny, and his children, thank you for your dedication, your commitment, and your courage of being a legislator in this great country of ours.

Mr. MATSUI

Mr. MATSUI. Mr. Chairman, will the gentleman yield?

Mr. MATSUI. Mr. Speaker, as I said in my comments, I supported the last two closings, including bases in my district. No one is suggesting the downsizing should not occur. It is the process that is extremely important in this particular effort.

Mr. MATSUI. Mr. Speaker, I would like to thank the gentleman from California [Mr. Fazio], but first of all, I would like to take a moment to first of all thank both the gentleman from California [Mr. Doolittle] and the gentleman from California [Mr. Pombo] for the hard work they did in trying to pursue our efforts to save McClellan Air Force Base. We had a very strong bipartisan effort in northern California an without their help, I do not believe we could have gotten as far as we did. Mr. Speaker, I would like to spend a few moments to talk about my colleague, the gentleman from California [Mr. Fazio], who is adjacent to me in Sacramento County. The gentleman from California [Mr. Fazio] and I have worked over the years to get $400 million of construction programs for McClellan in the last decade and a half. This is because the Air Force has suggested that we should do this to maintain McClellan as a viable, strong base of the five maintenance depots. Mr. Speaker, the gentleman, over the last 8 or 9 months in particular, did a tremendous job in doing whatever he could to save McClellan Air Force Base. I think the final recommendation, that is the privatization of this base, would not have occurred without his able assistance and his ability to put together this package in a coalition. So, Mr. Speaker, I say to the gentleman from California, on behalf of my constituents in the Fifth Congressional District, I want to thank him very much for his help, because I think we will be able to maintain a level of employment at that base now that will not create economic disruption. So I just want to pay my respects for the gentleman's efforts over the last 8 months to a year. Mr. Speaker, I would also like to acknowledge the President's activities in this. As you know, the Air Force, the Pentagon, and the President did not want to close McClellan Air Force Base. He wanted to basically keep the five logistic depots open and downsize all five of them for the purpose of future possible national international crises. Those are the five probably most important depots in the country. When these five depots are compared to the Army or the Navy, we always come out ahead, because we have become technologically the most proficient. Obviously, we have one of the best work forces in the entire Federal Government and, as a result of that, I believe the long- range plans of this administration, but particularly of the people that are running on a long-term basis the Pentagon, have felt if we ever went into interservicing, these bases should be the ones to preserve. As my colleagues know, the President attempted to save these bases for that future possibility. Unfortunately, the Commission, in its own wisdom, decided to close two bases, one in Texas and the McClellan Air Force Base in California. This was against the strenuous objection of the administration, the Pentagon, and the Air Force. I have to say that the reason I am going to vote in favor of this resolution, and against the recommendations [[Page H 8688]] of this Commission, is because originally this process was to be nonpolitical. It was to be an objective process. We have had two prior closings and we had two bases in my district that closed as a result of those two prior Commissions. Mr. Speaker, I voted to close those bases, even though there was a total of 10,000 employees, because I thought the process was fair and objective. But I have to tell my colleagues that this process was the most outrageous process around. Those Commissioners, not all of them, but many of them, had their own agenda. One who was a high-ranking Army official, for example, not only during his discussions showed significant bias, but he was actually outwardly favoring Army depots saying all his experience with the Army led him to believe that we should save these bases. That is not the way this process was supposed to work. In fact the irony of all of this is when Sacramento Army Depot in my district closed, we were able to get the last Commission to allow certain functions to be bid out and McClellan was one of the bidders, along with Tobyhanna and some other Army bases. Believe it or not, McClellan Air Force Base was the one that actually prevailed over the Army bases to get an Army contract. Now that contract is going to be going to an Army base, even though they were less efficient. So, Mr. Speaker, I am going to be voting for this resolution because I felt that the process was unfair. Mr. Speaker, in conclusion I would like to make one further observation. To the employees of Sacramento County who over the years have just done a tremendous job, I want to thank them for their efforts on behalf of the national defense of this country. We are going to do everything we can to make sure this privatization plan that the President and the gentleman from California [Mr. Fazio] put together will work. And I want to make an admonition. I am going to be one of the strongest proponents of privatization of depots in the future. And if, in fact, we are able to pursue this and make progress in this area, it is my opinion that those bases that were protected for political reasons, not for substantive reasons, and some were protected for substantive reasons, but those that were protected for political reasons will find that they are the most in jeopardy as we go into the 21st century.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I thank the gentleman for yielding time to me. Mr. Speaker, first of all, I would like to congratulate both the gentleman from Nebraska [Mr. Bereuter] and the gentleman from Indiana [Mr. Hamilton], the two cosponsors of this legislation, and certainly to the gentleman from Virginia [Mr. Wolf] and the gentlewoman from California [Ms. Pelosi], who actually worked very closely with both cosponsors to put together this legislation in a way I believe that all of us will be able to support; second, what I believe is important, to send a signal to the Chinese that is unified that truly represents the true feelings of this Nation. So I would like to thank them for making this debate very comfortable for all of us in this House of 435 Members. I would have to say, and I believe I will just reiterate what the gentleman from Nebraska [Mr. Bereuter] has said, that the United States-China relationship will probably be the most important relationship that the United States will have for the next 20 years. That is whether China is viewed by this country as our enemy, or whether this country views China as an ally, or perhaps something in between. China has 22 percent of the world population, 1.2 billion people. Their economic growth rate is over 10 percent per year, and probably will grow much greater than that. Lloyd Bentsen, before he left as Secretary of the Treasury, said that for the next 15 years China will be building an equivalent to 18 Santa Monica freeways per day, and that means the Japanese, the Europeans, and all other countries are moving into China now, trying to influence China's behavior. I have to say one of the experts that spoke on the rule perhaps has a little amnesia. President Clinton is basically following the policies of the Ford, Reagan, Bush, Carter, Nixon years in terms of our relations with the Chinese. That is because they all understood the permanence and importance of our relations with that country. Now, there is no question that what the Chinese have been doing over the past decade, now coming to light, is something that we all in this country abhor, and certainly we understand that there were certain universal principles that all major great nations must comply with. But the way to really do it is not to isolate the Chinese, but to engage the Chinese. That is what basically the Bereuter resolution does. It tells the Chinese that there are certain behaviors that we do not accept, but at the same time it attempts to normalize our relations with the Chinese. That is why this resolution, this bill, is so important for us, because ultimately it is the heirs of all of us in this room, the heirs of all of us in this country, that will benefit in terms of peace and understanding among nations and people of these nations, if in fact we can find some way with the United States, China, and other countries, to begin the normalization process with this Nation. Mr. Speaker, I urge support of this bill.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I am pleased to join my House colleague and fellow member of the Ways and Means Committee, Congressman Phil English, and my Senate colleagues, Senator Orrin Hatch and Senator Joe Lieberman, in their efforts to promote economic growth and job creation through capital gains incentives. Senators Hatch and Lieberman are introducing the Capital Formation Act of 1995. Hatch/Lieberman utilizes a two-tiered approach: broad capital gains relief and a second targeted capital gains provision. The House has already passed a broad-based capital gains provision earlier this year. The Matsui/English legislation is designed to be complimentary with the Hatch/Lieberman bill and with broad based capital gains passed by the House. Accordingly, it includes only the targeted capital gains provision. I have worked for many years to enact legislation which provides capital incentives for high-risk, high-growth firms. In 1993, I was able to work with Senator Bumpers to enact the Enterprise Capital Formation Act of 1993. Matsui/English is bipartisan legislation built on the 1993 legislation. It will be called the Enterprise Formation Act of 1995. Like the Hatch/Lieberman bill, the legislation will provide a 75-percent exclusion for capital gains resulting from direct investments in the stock of a small company--defined as $100 million or less in aggregate capitalization--if the stock is held for 5 years or more. Biotech and high technology companies are particularly dependent upon direct equity investments to fund research and to grow. A targeted capital gains incentive is crucial for encouraging investors, including venture capital investors, to purchase the stock of these companies, thus putting their capital at risk with a long-term speculative investment. These small venture backed companies create high-skilled jobs, grow to create more jobs--at an average rate of 88 percent annually--and are aggressive exporters. According to one survey, their export sales grew by 171 percent annually. Finally, these companies are R&D intensive which means they are essential in keeping American workers and products on the cutting edge of innovation.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I am proud to take this opportunity to call to the attention of the House of Representatives the retirement of one of the most distinguished business and civic leaders in my home town of Sacramento, Mr. Albert M. Dreyfuss. For nearly 50 years, Al has made Sacramento a better place to live, both through his landmark building designs and through his service to the community. As an architect, I can think of no one who has made a greater impact on the Sacramento area than Al. From our airport, to our leading hotels, to some of the finest, most modern office buildings that grace our skyline, Al has been a true innovator in creating facilities that have made our city more attractive, and our businesses more efficient. As a community leader, Al has taken his abilities as an architect and literally donated them to our community's governments and civic organizations. He was a founding member of the Capitol Area Plan Committee in 1959, and served as its chairman from 1959 to 1967. Under Al's leadership, CAP led our region through some important transitions as Sacramento grew into a major metropolitan area. But he also made sure that, as Sacramento developed, it did so responsibly while preserving its rich historical heritage. Mr. Speaker, as Al undoubtedly is aware, I, at one time, aspired to be an architect. When I look at all Al has accomplished in his career, I cannot help but wonder what would be left for me to achieve as an aspiring architect, had I followed that path. As he leaves the firm he that will never be forgotten.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I rise today to pay tribute to Lt. Col. Todd E. Blose for exceptionally meritorious service from July 1993 to May 1995, while serving as the last commander of the Sacramento Depot Activity. The closure of the Sacramento Army Depot has been an unparalleled success and has become a standard of excellence held up at the highest levels of the Army and Department of Defense. In all aspects of the closure, environmental cleanup, transfer of missions and equipment, transition of real property, and reuse of the facilities, the Sacramento Depot Activity family has led the way with resourcefulness, innovation, and dedication. Lieutenant Colonel Blose has been the leader of this process, collaborating with a very diverse group of individuals and agencies at the local, State, and Federal levels. Closure of the base was completed 2 years ahead of the original base closure schedule saving over $10 million in fiscal year 1994, $7 million in fiscal year 1995 and $1.5 million in caretaker funds in fiscal year 1996 and fiscal year 1997. This accelerated closure could not have been accomplished without the impressive support received from the civilian employees who were, in fact, losing their jobs through the closure. Lieutenant Colonel Blose convinced the employees that he would work hard on their behalf and gained their promise of dedicated service to support the closure process. He carried through on his promise and was able, through extensive and aggressive outplacement efforts, to place all but 161 of the original 994 employees on board when he arrived. These 161 have continued to receive support and 10 have received subsequent job placements. Lieutenant Colonel Blose led the efforts to complete the necessary environmental documentation for closure, have the appropriate agencies review the findings, and gain their approval. Many real estate and environmental proceeding actions and negotiations had to take place concurrently so that all required documents were in place by the target closure date on March 3, 1995. There were numerous challenges encountered during the past 2 years, none more difficult than completing the radiation surveys at the depot and gaining delicensing approval. Lieutenant Colonel Blose's knowledge of radiation issues and his skill in teamwork and persuasion were vital in coercing reluctant bureaucracies to expedite their efforts on the depot's behalf and to maintain the proper balance of cost versus risk. Lieutenant Colonel Blose also played a key role in establishing and cochairing the Restoration Advisory Board, which reviewed and ultimately supported the cleanup process. He also provided valuable input and counsel to the city of Sacramento Army Depot Reuse Commission. The resulting reuse plan laid the groundwork for attracting Packard Bell Electronics to the depot site, completely replacing the former depot work force and providing the basis for the city's $7.2 million payment to the Army for the property in 2005. In his command tour at Sacramento Depot Activity, Lieutenant Colonel Blose set a tone of professionalism, teamwork, and compassion. He challenged his staff and employees to perform extraordinary efforts and they responded with an accelerated closure which is being cited as the national model for base closure, environmental cleanup, and reuse. I ask my colleagues to join me in saluting Lieutenant Colonel Blose's exceptional leadership performance, which is a credit to himself, the Tooele Army Depot Complex, the Industrial Operations Command, and the U.S. Army.

Mr. MATSUI

Mr. MATSUI. Mr. Chairman, I thank the gentleman from Florida, the ranking member of the Ways and Means Committee, for yielding me this time. I think what both the gentleman from Florida and the gentleman from Michigan said was absolutely correct. I was here in 1981, and I would implore the Members of this House and this body to pick up the book by David Stockman, the Director of the Office of Management and Budget for President Reagan. David Stockman, when he left the Office of Management and Budget wrote a book called ``The Triumph of Politics,'' and he said in that book essentially that they knew that they would not achieve a balanced budget by 1984, 3 years after they passed this massive tax cut; and, you know, Ronald Reagan said we are going to have a tax cut, we are going to increase defense and cut spending and balance the budget in 36 months. That was smoke and mirrors, and everyone now admits it was smoke and mirrors, and we are playing the same smoke and mirrors game again. There is no way in 7 years we are going to achieve a balanced budget from a $350 billion annual deficit today and give tax cuts in excess of $188 billion, and that is what we are talking about, $188 billion over the next 5 years; and over the next 10 years, even with the Republicans' own actuarial studies, it will cost $640 billion over the next decade. There is no way you are going to be able to achieve that result the same time. The reason the Republicans feel comfortable and the reason this is probably going to pass today is they know the United States is not going to accept it because it is so extreme. Even Senator Packwood said this is nonsense, they are not going to accept this. And so they have nothing to worry about, they are playing a little figment of imagination on the American public, and they are going to be able to go back home and say they passed these wonderful tax cuts that they know will never become law. Let me tell my colleagues, talking about this being paid for, they have $188 billion over 5 years. We do not even pay for it over 5 years. One of the first things is they have $10.5 billion in spending cuts on pensions. They could not even pass pension reduction out of their committee. That is why that bill did not come to the floor. The committee that has jurisdiction over this issue could not get a majority vote to pass it out. So that is a figment. There is $10 billion that they should subtract; they are unwilling to do that. Then the $100 billion that they have of the $188, what happened there is the gentleman from Ohio [Mr. Kasich] the chairman of the Budget Committee, says he has got some illustrative cuts. Illustrative cuts. They are not in place yet. These are illustrative budget cuts he is talking about. We will not see those maybe until the fall and who knows, let us see how courageous they will be in the fall of this year when they are going to have to cut over the next decade 100 billion dollars' worth of spending. That is the issue. And you know this is not a middle-class tax cut. I tell you, this is unbelievable, to consider this a middle- class tax cut. We have Treasury Department numbers here. A family that makes between $30,000 and $50,000 a year, a family that makes between $30,000 and $50,000 a year under this proposal will get about a buck and one-half a day, about $560 a year. On the other hand, on the other hand, and listen to this, those that make over $200,000 a year, the middle class, will get $11,266 a year as a tax cut under this proposal. That is not a tax cut for working families, that is not a tax cut for middle-class families. And what is really frightening I think to the average citizen when they find this, if in fact this ever becomes law, is if we had huge deficits as a result of this misguided decision today, you will see interest rates go up, and what would you rather have, a $560 a year or buck-and-a-half a day tax break or would you rather have lower interest rates so you can buy a home or maybe your child can buy a home? That is where your savings is, but interest rates will go up. I guarantee interest rates will go up if this ever becomes law. But they know it will not become law. This is a little figment we are playing on the American public, but the reality is we should vote this down just to show we in this Congress, the House of Representatives have discipline, unlike what we are seeing on the other side of the aisle. I urge a ``no'' vote on this particular bill.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I rise today to pay tribute to two young pilots who recently gave their lives in a mission of mercy. Anthony Warner Shanks, 36, and Vincent Randall Breding, 31, were shuttling two Orange County doctors to Mexico March 3, 1995, when their plane went down in a rugged area of Camp Pendleton Marine Corps Base in San Diego County. Irvine ear, nose and throat specialists were to fix cleft palates, remove facial tumors, and serve a poor population with little or no access to medical care. The flight was one of 21 headed to the Sinaloa region on a monthly mission sponsored by the Orange County-based Liga International. Anthony Shanks was born in Vallejo, CA, in 1958 and moved 1 year later to Sacramento. He attended John F. Kennedy High School and after graduating, secured a job with the city of Sacramento, rising to the position of park supervisor. While employed with the city of Sacramento, Mr. Shanks attended college for 2 years and in 1990, he achieved a major goal when he received his pilot's license. In addition to these pursuits, Mr. Shanks was an aspiring musician and had been part of a USO tour to Alaska, performing for U.S. troops in 1978. Vincent Breding--Randy--was born in Panorama City, CA, in 1963. Upon graduating from Monroe High School, he attended the University of Southern California, Northridge, earning honors and a degree in business administration. Mr. Breding settled with his new wife in Sacramento in 1990 and was employed with Sacramento County as an auditor/appraiser. He obtained his private pilot licensee in high school. Since that time, he earned enough hours to become an instructor and even purchased his own aircraft to assist in obtaining his hours and instructing flight students. He was only hours away from reaching his goal of obtaining his airline transport pilot license, which would have fulfilled his dream of becoming a pilot for a major airline. Both Mr. Shanks and Mr. Breding were model men, offering their services to their community and to people in places they had never before visited. Apart from the mission which claimed their lives, Mr. Shanks had volunteered as a pilot for the Yolo County Aero Squad and Mr. Breding had flown aerial surveillance for the Yolo County Sheriff's Department and recently went diving to help bring up a downed plane in Lake Berryessa. Both men leave behind families who will forever remember them as compassionate and selfless individuals. Mr. Shanks is survived by his wife Kathy, and a son, Anthony. Mr. Breding leaves a wife, Denise, and a son, Erik. Both men will also be missed by parents, family members, friends, and colleagues. Mr. Speaker, I ask that my colleagues join me in paying tribute to these fine young men. Their dedication to their fellow man is an inspiration and I extend on behalf of my colleagues, warm condolences to each of their loving families.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, will the gentleman yield?

Mr. MATSUI. That this body should calm down.

Mr. MATSUI. Pardon me?

Mr. MATSUI. Do not yield.

Mr. MATSUI. Mr. Speaker, will the gentleman yield?

Mr. MATSUI. Mr. Speaker, if the gentleman will continue to yield, you indicated they might have been confused. I do not think they were confused at all. Let me say this, the language that I read in that document was a House offer. That was not incorporated in the conference report document itself. However, I will say this, I read the transcript last night, the entire transcript of the conference last night, to the gentleman from Tennessee. And that language that I recited was in fact adopted but it was not incorporated in the conference report document itself. Both Senator Packwood and the gentleman from Texas, Mr. Archer, agreed to that language, including that date that was incorporated in that agreement.

Mr. MATSUI. Mr. Speaker, I do not believe the Democratic members of Committee on Rules were confused at all.

Mr. MATSUI. Mr. Speaker, I thank the gentleman. gentleman from Nebraska makes the statement that this is a shell game, that this has nothing to do with the main issue, that is, the deductibility of insurance premiums. This has a lot to do with it. If we would have left this provision in the legislation, we could have gotten 35 percent for the average American small business instead of 25 percent or 30 percent. We could have gotten more deductibility on this thing if we would have followed the other body, Senator Dole, Senator Daschle, and all the Republican Senators who supported this legislation. It is extreme in this body here that we would actually try to throw this provision out, what we did in the House-Senate conference, because the Republican leadership did not want it. For those of you who do not know what this is, an American citizen who earned his wealth here could renounce his citizenship and not pay taxes. He will go to a small Caribbean country that has no taxes and then what he will end up doing is avoiding taxation. That means all other Americans, those wage earners, will have to pay more taxes. I might just mention one other thing which is very interesting about this. After this was passed in the Senate, last week my office got a contact. It got a contact from a New York lobbyist, and this New York lobbyist gave me a document. The document says these are seven talking points we can use in order to make an argument to eliminate this provision. He talks about this will destroy Jackson-Vanik. That is ridiculous. But he said this will destroy Jackson-Vanik. He said this is a human rights issue. Justin Dart's family can leave the United States, renounce his citizenship, to avoid U.S. taxes. That is a human rights issue? That is ridiculous. Then the real outrageous provision in this document here is that on the second page that this lobbyist gave me, he cites Soviet law. Comparing what Senator Dole, Senator Bradley, and Senator Daschle wanted to do on the Senate side to the Soviet Union and their immigration policies is outrageous. It is unpatriotic. Those that make that argument owe the Members of Congress an apology. They owe Senator Dole and Senator Bradley and Senator Daschle an apology.

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, the gentleman from Texas raised this issue, but there was only one offer made. It was made by the House. I have a copy of the House offer on 831. The House offer does not have this provision in it, so it had to emanate from the House. You took it out. That is what happened. You took it out. I read the transcript of the conference report, and it basically said you took it out. The gentleman would not agree, but you took it out.

Mr. MATSUI. Mr. Speaker, I would like to thank the distinguished gentleman from New York for this time. You know, I am still a little puzzled because I do not know how we are relating this issue to the issue of the Soviet Jews emigrating out of the Soviet Union during the 1970's. We are talking about, as Mr. Rangel said, people that make or have assets in excess of $5 to $10 million. In fact, before this even kicks in, one has to have at least $1.2 million worth of capital gains. And so I do not know how we are talking. It is somewhat outrageous because here we are talking about Soviet Jews who are being denied the right to leave the Soviet Union during the height of the cold war. And we are talking about 25 families, like the Dart family, the Campbell Soup family, who do not go to a country where there is more freedom than the United States. They go to the Bahamas because they want to avoid taxes. So I do not know how we can possibly equate this. It is just not a rational discussion. I might also further say, you know, we do have to get this issue of the self-employed deduction on health insurance done. We should have done that earlier this year, but we are doing it now. But I would suggest what we should do is work today, tonight, Friday. We are off Friday. We are not in session Friday. Why do we not work today, tonight, and Friday and get this issue done? And, frankly, what we could do, which is astonishing, but just as Senator Dole and Senator Daschle have said in their letter they sent to Mr. Moynihan, Mr. Gibbons, and Mr. Archer of March 24 of this year, what we could do is use some of these revenues that we can gain from this expatriate issue and increase the amount of deduction for the self-employed. Right now, they are going to get 25 percent for this last year. They are going to get 30 percent in the future years. Why do we not make it 30 percent now and 35 or maybe 40 percent in the future? We can give them a bigger bang for the buck if we just take care of this little thing. Why are we protecting these 24 people that I consider disloyal for wanting to leave the United States for only tax purposes? I might say, this issue is not an issue that we just talked about and brought up in the last week or 2 or 3 weeks or a month. This issue has been going on. Steve Shay, a lot of you know him that works on the tax writing committee, Steve Shay, the Assistant Secretary of Treasury under Ronald Reagan in the mid-1980's, said that he was working on this issue because he knew that it was going to be a problem in the future because a lot of tax attorneys, New York and elsewhere, were finding the opportunity now to find a way to avoid taxation. This is a recent phenomena over the last 6 or 7 years. That is why we have not done it in the past. But Steve Shay brought this to the attention of a lot of people. Forbes Magazine last year wrote a major piece on the number of people that are taking advantage of this. Forbes Magazine is not a liberal magazine. It is a very, very business-oriented magazine. They said, this is outrageous; they are taking advantage of the Tax Code. I might also point out, and I am going to do this again because people really have to understand this, I received talking points from New York lawyers who refused to tell me who they are representing. By the way, they refused to tell me who they are representing. New York lawyers who said these are talking points. They gave me seven talking points to use to support dropping this provision from the conference. And he says, this will destroy Jackson-Vanik. He said that this is a human rights issue. These are the seven points on this document. And then he had the nerve when I turned the page to talk about Soviet citizenship, equating this provision with Soviet citizenship. I just have to say that that is kind of overstepping a bound. There is an issue of patriotism. Anybody that compares the United States with the former Soviet Union, that to me is outrageous. And any thought of that in this country on the floor of the House is unpatriotic. Frankly, we should use the revenues, the $3.6 billion that we are talking about, the $3.6 billion over the next 10 years, to give these self-employed people that are paying their own insurance a little bigger bang. Instead of giving them 25, let us give them 35 or 40 percent. And let me just conclude by making one last observation. This is not a human rights issue. I received a letter from a professor at law at Harvard University, the Bemis Professor of Law, Professor Vagts, who said this has to be taken care of. It is not a human rights issue. It has no relation to Jackson-Vanik. This is an issue where people are avoiding taxation. This is an issue where people are cheating the American public and using it in a way that they are being unpatriotic in getting rid of their citizenship. This is an outrageous situation that has to be dealt with immediately.

Mr. MATSUI

Mr. MATSUI. Apparently our staff is currently trying to reach the gentleman's side to further discuss it. I do not believe there is a problem, but at least we need to review it. I say to the gentleman, ``You have to excuse us.''

Mr. MATSUI. Reserving the right to object, Mr. Speaker, this has apparently not been cleared. Will the gentleman be kind enough to withdraw this until minority staff members have an opportunity to review it?

Mr. MATSUI

Mr. MATSUI. Mr. Speaker, I thank the gentleman from Florida [Mr. Gibbons] for yielding the time. You know, at a time when we are trying to deal with the issue of the deductibility of the self-insured insurance premium, we are paying for it because we want to close a loophole, and that loophole is the FCC loophole which gives preference to minorities, and we all know the Viacom case, the case in which if it went through would cost the taxpayers of America up to $600 million. The reason we have moved quickly on the FCC and the Viacom issue is because we did not want people to take advantage of the Tax Code, because one individual, Frank Washington from California, was basically a front for the TCI Corp. which was buying the assets of Viacom, and so if we are willing to take on Viacom, if we are willing to take on the FCC regulations, because it is unfair, because we know that it is being abused, the tax system is being abused, how could we possibly, how could we possibly not take on these people that are American citizens who leave the United States, only renounce their citizenship only because they want a tax break, they want to avoid taxation? And as the gentleman from Florida [Mr. Gibbons] has said, we have calculated over the next 10 years the Federal Government will lose $3.6 billion if in fact this loophole is not taken care of. And, second, even more critically, if this loophole is not taken care of, you are going to see more and more American citizens renounce their American citizenship. It could be up to $10 billion or $12 billion over the next 10 years. The reason for it is because they are going to recognize, they are going to find out that this is a basically abusive tax proposal that they can take advantage of, and so as more and more people find out about it, they are going to take advantage of it. That is why we have to close this loophole in this particular conference. I know if you want to make changes in it and clean it up a little bit, we can do that. The conference will have 4 or 5 days in which they can work. We have got the Treasury Department, we have the fine minds of the majority and minority to make sure this proposal will work. I think what people have to understand is American citizens are renouncing their citizenship not because they want to go to another country because they find the country is a better country to live in, but because they do not pay more of it in fact they do this. Bear in mind, these people do not have to leave the United States physically. They can still stay in this country. They just will not be American citizens. They can stay in this country for up to 120 days a year. This is an abusive approach. These people are taking, as the gentleman from Florida [Mr. Gibbons] says, we know the Dart family that have done it. We know a lot of families that have done it. I have to tell you in terms of what the gentleman from Ohio has said, other countries have done it but not quite as abusive as we have. We have a list of about 10 countries that have current similar laws, Germany, the Netherlands, Denmark, Sweden, Norway, Finland, France, Philippines, Canada, and Germany, for example, will withhold 25 percent of one's assets if a person has been a resident of Germany for more than 10 years. This is much more stringent than the proposal that is being proposed in this conference. We have other countries like Norway who will deem a tax period for over 5 years even though that person has not been a citizen for 5 years; he will have been deemed to be a citizen for 5 years; he will have been deemed to be a citizen of Finland for tax purposes. Our proposal is much less stringent than Finland's. These 10 countries have proposals that are very, very stringent. I would further add that both Senator Daschle, the minority leader of the Senate, and Senator Dole, the majority leader of the Senate, have said keep this provision in, keep this provision in because when we go to the conference, we may want to use this money not only for deficit reduction but maybe for giving the small-business owner, instead of 25 or 30 percent, maybe give them up to 40 percent in terms of a deduction. Why not do that? Why not give some of these small businesses a larger deduction on their health insurance deduction instead of allowing these tax cheaters who leave the country, renounce their citizenship, the right to avoid U.S. taxes? And so I might just conclude by making one final observation in my time. As the gentleman from Florida [Mr. Gibbons] says, we are talking about $3.6 billion, or $1.4 billion over the next 4 years, and we are only talking about 12 to 25 citizens on average per year, and this just indicates exactly the amount of money that these people are trying to avoid in taxes. This is the proposal that must be taken out and put in this conference. This is a proposal that must become law at the same time we go after Viacom and others who attempt to abuse the tax system.

Mr. MATSUI. I yield to the gentleman from Texas.