Jim McCrery

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I rise today in support of H.R. 5798, a bill to further the success of the national chimpanzee sanctuary system established by the 2000 Chimpanzee Health, Improvement, Maintenance and Protection Act. Chimpanzees are very similar to humans, not only in anatomy and physiology, but also in their behavior, emotional needs, and cognitive abilities. Chimps have served as medical research models for decades, and humans have reaped the benefits, including lifesaving vaccines and medical therapies. But with new technologies and changing research goals, hundreds of chimpanzees are no longer needed for research. Responding to the urgent need for long-term chimpanzee care, the Congress passed the CHIMP Act in 2000 to create a Federal chimpanzee sanctuary system. My constituents were awarded the first contract and now operate Chimp Haven in Keithville, LA. They are currently caring for 89 retired research chimpanzees and anticipate the addition of 111 new chimpanzees over time. The cost of letting the chimpanzees live in the natural environment at Chimp Haven is half of the cost of keeping them in the laboratory--providing a tremendous savings of taxpayers' dollars. In addition, Chimp Haven is responsible for matching 25 percent of the Federal funding they receive each year. But a provision inserted in the 2000 law is making private fundraising difficult for Chimp Haven because it leaves open the possibility that the retired chimpanzees can be recalled into Federal research if the need were to arise. In making changes to this bill, we will return to the original intent of the CHIMP Act--to provide permanent retirement to chimpanzees who have served Americans in medical research.

Mr. McCRERY

Mr. McCRERY. Madam Speaker, it is a pleasure to be on the floor today to support this resolution, and I thank the chairman and ranking member of the committee for bringing this to the floor today. The resolution actually encourages the Congress to support the goals and ideals of National High School Seniors Voter Registration Day. This is a program that was actually started in my hometown of Shreveport, Louisiana, back in 1996; and the results have been indeed noteworthy. Just this year, for example, in the class of 2006, the high school graduating class of 2006, nearly 50 percent of the graduating class registered to vote in Shreveport this year. That is far above what you will find in most cities and towns that don't have a program similar to this in effect. The goals and ideals of the High School Seniors Voter Registration Day are contained in the program's mission statement; and simply, the program's mission is to register to vote high school seniors and students of voting age on the first Tuesday in May. And also, to encourage students to make a lifelong commitment to civic participation in all areas of society by educating them about the importance of voting. That's the mission. Certainly I would hope this Congress today by its vote here in the House and I hope later in the other body would support the goals and ideals of this program. Certainly we can think of no better message to send to young people in this country that civic participation is important, in fact critical to the progress of this Nation and perhaps, some would say, to the survival of this Nation. So I am pleased to be able to present this resolution today endorsing a program that sprang up in my hometown and now has spread across the State of Louisiana and we hope will spread across the Nation. I urge its adoption.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, on rollcall No. 486 I was unavoidably detained. Had I been present, I would have voted ``yea.''

Mr. McCRERY

Mr. McCRERY. I yield to the gentleman from Washington.

Mr. McCRERY. Mr. Speaker, I thank the chairman of the Ways and Means Committee for yielding. I just want to say to the point that some are making about States that have no tip credit law and have a higher minimum wage, if in fact a State wishes to continue to have a higher minimum wage, all they have to do in response to passage of this bill is to pass any kind of tip credit. It can be a minimal tip credit, and then they can fully restore the minimum wage that that State wishes its employees to have. So it is not that complicated. It is not that difficult as some Members have suggested.

Mr. McCRERY. Mr. Speaker, reclaiming my time, it is a legitimate issue the gentleman brought up, but I would hope he would agree that freely elected representatives in his State, or any other State, whether Republican or Democrat, should in fact be able to express the will of the people who elect them, whether they are Republicans or Democrats; and if in his State they want to, whoever they are, Republicans or Democrats, want to go back to the minimum wage they had prior to the passage of this bill, they may. This bill in no way prohibits that. So the gentleman's complaint about this bill could easily be taken care of, the same way his State originally enhanced the minimum wage in Washington. That is the only point I wanted to make.

Mr. McCRERY

Mr. McCRERY. Madam Speaker, I continue to reserve the balance of my time.

Mr. McCRERY. Madam Speaker, the gentlewoman from South Dakota said step one should be something, and I would submit to the gentlewoman that the energy bill we passed was a much better approach than step one. It was step one, two, three, four and five. We don't need to do just one thing. We need to do a number of things to increase supply in this country, to reduce demand, and to wean ourselves from dependence on foreign oil. The energy bill that we passed just recently does that. It will take some time. But we addressed in that bill her step one, our step one, as she characterized it, and several other steps. In our bill we did include some provisions that would encourage more exploration and production in this country of oil and gas, but we also included provisions that would increase our refining capacity for gasoline that is part of the supply problem. Her party has chosen for their own reasons, over the last number of years, to consistently block measures, other measures designed to increase production in this country. The gentleman from Indiana earlier spoke of some of those. Our bill encouraged increased production, not as robustly as we would have liked to. We would have liked to have included exploration of ANWR, for example. We would have liked to have included greater exploration and production of offshore capacity in this country that we know we have. But we did address that step one, our step one, as she characterized it. But we also included provisions encouraging conservation of fuels. That is an important element of getting this supply-and-demand situation under control. We did also include about $3 billion in that bill for renewable fuels. So we took a multifaceted approach in our energy bill that we did pass and got signed by the President, to address this very vexing problem of supply and demand of the primary energy source for this country. Whether we like it or not, oil and gas is going to be the primary energy source for this country for a long time. Yes, we should pursue renewable fuels. Yes, we should pursue research into fuels that we can use other than oil and gas, but that is going to take time. We all know that. So in the meantime, we ought to be doing those things, but also encouraging an increase in the supply here in this country of oil and gas. We have tried to do that. This bill, as I stated earlier, would exacerbate the problem of supply. It would exacerbate the pressure on prices at the pump. A $4.3 billion tax increase on oil is not going to lower the price at the pump. If anything, it is going to increase prices at the pump when you raise taxes on the supply. That is what this motion to instruct would have us do, $4.3 billion retroactive tax increase. This accounting provision that is the subject of this provision of the opposing party is used by every corporation that has inventory, not just the oil and gas industry; every corporation that has inventory in any industry uses this accounting system. Last in, first out, LIFO accounting system. This provision proposed today on the floor by the Democrats would say the oil and gas industry would be the exception. They would be the only industry that could not use this standard accounting system. Is that fair? I don't think so. If you think that is a commonsense way to do the accounting of inventory, let us apply it to all industries in this country. We don't hear the Democrats proposing that. Why? Because they know it would not make much sense from an accounting standpoint. If you apply this provision to the oil and gas industry, it amounts to a retroactive huge tax increase on that industry at the very time that we need to be lowering their costs, not raising their costs. The other provision that we haven't talked about too much this evening applies to foreign tax credit rules. They are calling it a loophole. Well, what this so-called loophole does for the oil and gas industry, that also applies to other industries across America, reduces the level of double taxation of profits of our American companies gained overseas with their overseas operations. Is it right for an American company who is doing business, say, in Europe, to pay the tax in Germany and then have to turn around and pay tax on the very same income here in the United States? Surely, surely we don't think that is fair. Surely, we don't think that puts our domestic corporations in an equitable position vis-a-vis their world competitors. Surely, we must realize that if we double-tax American companies' income derived from overseas operations, we are putting them at a disadvantage in the world market. We are guaranteeing they are going to lose market share to foreign companies. Should that be the policy of this Congress? I certainly hope not, but that is what this one provision and the gentleman's motion to instruct would accomplish. Now, getting back to dividends and capital gains, the IRS preliminary data from 2004, which is the first year we have since the passage of a lower dividend rate, shows us that dividends paid by corporations in 2004 over 2003 increased by 30 percent. That should be proof positive that the change in the law we made produced the desired result. Corporations started paying more out in dividends. That has salutary effects not only for the senior citizens that Mr. Herger talked about earlier who depend on dividend income in their retirement, it also has a salutary effect on corporate management, corporate accountability. These are very sound tax policy provisions that this Congress wisely enacted a couple of years ago, and we certainly should extend them 2 more years to give certainty to those corporate planners who are trying to plan their corporation's ability to raise money and to distribute or allocate their profits to their shareholders. Madam Speaker, I would submit that this motion to instruct should be defeated for a number of reasons, and would hope that the House would soundly reject this tomorrow when we have a chance to vote on it. Madam Speaker, I yield back the balance of my time.

Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, the Democratic motion to instruct conferees is, I believe, ill thought out in terms of energy policy, in terms of tax policy, and certainly in terms of the cost to the average American. In addition, Mr. Speaker, the motion to instruct conferees includes a number of provisions that many believe are critical to a meaningful tax reconciliation bill. In such a case when a Member tries to tie the hands of conferees on this many provisions, this Member believes that it is certainly ill advised in general. As far as the specifics of the motion to instruct, Mr. Speaker, I said that I thought it was ill advised in terms of energy policy. Right now my constituents are concerned about the price of gasoline at the pump. Now, we all know there are lots of reasons for the price of gasoline going up. We all should know that among those reasons and probably the principal reason is the law of supply and demand. If supply stays the same and demand goes up, generally speaking the price goes up. If supply goes down and demand stays the same, price goes up. If supply goes down and demand goes up, the price goes up even further. Certainly, with the effects of Hurricanes Katrina and Rita, with increased demand from China, India and other developing nations around the world, we can see that there is indeed less supply and more demand. Now, also I think a commonly held and commonly believed law of economics is if you tax something, you get less of it, well, that is what this motion to instruct would have our conferees do. We are going to tax oil more, and if you tax oil more, you are going to get less of it. That exacerbates the problems that we are experiencing right now with the price of gasoline. If you tax the supply more, you are going to get less supply, but you are not going to do anything on the demand side. So that would make things worse at the pump, not better. Mr. Speaker, on the issue of the capital gains and dividend tax, we believe that those two provisions are principal reasons that our economy has continued to grow over the last several years, that several million jobs have been created in this country over the last several years. In fact, the stock market has reached its highest point in 6 years partly because we believe in these two very important provisions. These provisions on capital gains and dividends allow corporations to make sound decisions, to plan their decisions on the allocation of their profits to shareholders, and we know that those decisions, having been made on that basis of cash, are transparent. We don't have to worry about accounting games. We don't have to worry about corporate fraud. It is cash. We know it. If they give a dividend, we know they have got the cash. This provision encourages corporations to do that. So not only is it good tax policy, it is good policy in terms of transparency of corporate activity. It is good tax policy also because it lessens the double taxation of corporate profits. Right now when corporations make a profit, they pay the corporate income tax rate on those profits. Then when they send some of those profits back to shareholders in the form of dividends, the shareholders have to pay tax on the dividends. So that income, that corporate income, is taxed twice. At least by lowering the rate of taxation on those dividends, we have lessened the double taxation of corporate income, and that, I would submit, is good tax policy and should be continued. As far as my friend from Washington's characterization of capital gains and dividends being for the super rich, well, the data just does not bear out that characterization. The Joint Committee on Taxation data show nearly 60 percent of Americans receiving capital gain or dividend incomes have incomes of $100,000 or less. That is not super rich. One in five taxpayers, 20 percent of taxpayers with capital gains, and one in four, 25 percent of taxpayers with dividends, have incomes below $50,000 a year. That certainly is not the super rich. So, Mr. Speaker, I would submit that the gentleman's motion to instruct conferees should be soundly defeated. Give our conferees the flexibility to deal with our Senate colleagues and produce a meaningful tax reconciliation bill. Mr. Speaker, I reserve the balance of my time.

Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Herger), a distinguished member of the Committee on Ways and Means.

Mr. McCRERY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on the subject of the motion under consideration.

Mr. McCRERY. Madam Speaker, I continue to reserve the balance of my time.

Mr. McCRERY. Mr. Speaker, I yield 4 minutes to the gentleman from Indiana (Mr. Burton).

Mr. McCRERY

Mr. McCRERY. Madam Speaker, I thank the gentleman for yielding. Madam Speaker, I, too, want to thank the gentleman from Louisiana, my colleague on the Ways and Means Committee, the chairman of the Ways and Means Committee, the ranking member and the staff who have worked so hard to help us provide incentives for businesses to come back and reinvest in the devastated areas along our gulf coast. The gentleman from Louisiana and Members of the House should know that members of the other body have placed a document prepared by the Joint Committee on Taxation in the Congressional Record that explains the legislative intent with respect to H.R. 4440, as amended. The Joint Committee will also make this explanation public. This document expresses our understanding of the bill now before us, and it will be a useful reference in understanding the legislation.

Mr. McCRERY. Madam Speaker, I ask unanimous consent to take from the Speaker's table the bill (H.R. 4440) to amend the Internal Revenue Code of 1986 to provide tax benefits for the Gulf Opportunity Zone and certain areas affected by Hurricanes Rita and Wilma, and for other purposes, with a Senate amendment thereto, and concur in the Senate amendment.

Mr. McCRERY. Madam Speaker, will the gentleman yield?

Mr. McCRERY

Mr. McCRERY. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on H.R. 4440.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, it is a curious application of tax benefits that have been left out of the minority substitute. Let me just go over a few of those because I think you will agree with me that it is curious which ones are left out. The savers credit for low income families. My friends on the other side of the aisle continually stand up for low income families and to their credit, why on earth would they leave out a strong incentive for low income families to save? They do. They leave out the savers credit. And that goes only to lower income families in this country. Generally, those on the other side of the aisle harp about the--I will not say evils, but the excess profits, some of the bad things that big business does in this country, and yet they leave out the tax benefit for small businesses in this country, something known as section 179, expensing to help small businesspeople cope with the costs of keeping their businesses up to date, modernizing their businesses so that they can compete, so they can compete in the market place, sometimes with those big bad businesses. They leave that out. Tax benefits for cleaning up brownfield sites. Brownfield sites are dirty sites, polluted sites where business has gone away. There is pollution there. They are usually the champions of the environment, cleaning up the environment. But they leave out that tax benefit to encourage cleaning up these dirty polluted sites. Very curious. Now, certainly there are a couple that they leave out that I can understand. They leave out an extension of the active finance section of subpart F. That is a lot of big words. What that means is this particular tax provisional allows companies in this country who conduct financial operations to compete on a level playing field with their competitors overseas. That is what this does that they leave out of their bill. It allows American companies to compete effectively with companies overseas. They leave that out. But then they, as I said, they do not particularly like big business. The one that gave them the most glee, of course, by leaving it out was capital gains and dividends. You have heard all the rhetoric, and I am sure you are confused about who benefits from these. The Joint Tax Committee, the committee that is vested with crunching the numbers in this Congress, has produced these statistics: For the capital gains tax, one in five Americans who claims capital gains on his tax return has income below $50,000. Fifty-eight percent of those who claim capital gains on their tax return have incomes below $100,000. Somewhat different from the statistics you have heard from the other side. Dividends are even better. One in four, 25 percent of Americans who have dividend income have incomes below $50,000; 59 percent have incomes below $100,000. Nearly 60 percent of Americans who claim either capital gains or dividend income have incomes of $100,000 or less. That is basically middle class. Another thing that the minority sometimes likes to do, I think, is tax. They like taxes, and they want to increase taxes; and when they can double tax, boy, that is a real joy. That is what dividends do. That income has already been taxed once at the corporate level. They want to tax it again at the individual level as high a rate as possible. So those are the things they leave out of this bill, Mr. Speaker; and I hope we will reject the substitute.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4388) to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes, as amended.

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

Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume. The bill before us at this time is a bill that takes several expiring provisions of the Tax Code that were not eligible for inclusion in the tax reconciliation bill because of the rules of reconciliation and packages them in this legislation that we hope to pass out of the House today. Briefly, Mr. Speaker, those provisions include treating combat pay as earned income under the Earned Income Credit. Currently, combat pay can be used to figure the earned income credit of our soldiers in combat. The special rule that allows that would expire this year. This provision in the bill would extend that special rule by 1 year. Also, an extension of the transfer of the rum excise taxes to the Virgin Islands and Puerto Rico is included in this bill. Also, Mr. Speaker, there is a provision in current law that expires at the end of this year which gives the IRS the authority to use income generated by an undercover operation to pay ongoing expenses on that operation. Again, that authority would be extended by 1 year in this bill. Also there is authority in the bill for the IRS to disclose certain tax information to other Federal and State authorities. Finally, Mr. Speaker, a provision in this bill would allow Puerto Rico and businesses in Puerto Rico to claim the manufacturing deduction that was part of legislation previously passed by this House. That summarizes the provisions of this bill. Mr. Speaker, I reserve the balance of my time.

Mr. McCRERY. Mr. Speaker, I yield such time as he may consume to the gentleman from Florida (Mr. Shaw), the chairman of the Trade Subcommittee of the Committee on Ways and Means.

Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the gentleman from Arizona (Mr. Hayworth), a respected member of the Committee on Ways and Means. (Mr. HAYWORTH asked and was given permission to revise and extend his remarks.)

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4440) to amend the Internal Revenue Code of 1986 to provide tax benefits for the Gulf Opportunity Zone and certain areas affected by Hurricanes Rita and Wilma, and for other purposes.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill, H.R. 4440.