Jim McCrery

Mr. McCRERY

Mr. McCRERY. Mr. Chairman, I thank the gentlewoman for yielding. First of all, let me explain so everybody understands, there is no limitation in the Norwood amendment for economic damages. In other words, a plan, a person, a patient who was injured by a health plan's actions can recover the full extent of his economic damages, all his medical bills, all his lost wages, future lost wages. That is not at issue. That is not limited under Norwood. What is limited under Norwood is what we call ``general damages,'' pain and suffering, mental anguish, things that cannot be quantified and punitive damages. Mr. Chairman, the Norwood amendment is the best thing that this House has before it today to solve the problem of HMO abuse, of patients not having real access to recovery under Federal law today. I agree that it is not sufficient. Federal law today is not sufficient to allow a patient to redress wrongs done by a health plan. But the Ganske-Dingell bill goes way too far. It really endangers the health care system as we know it. It will increase the costs of the health care system, and that is the last thing we need in this country. When we talk about damages and unlimited damages and we keep talking about the AMA, I will refer my colleagues to some testimony by the AMA. In 1996, Dr. Nancy Dickey, the then-Chair of the AMA board of trustees testified, ``Placing limits on punitive damage awards without simultaneously addressing noneconomic damages would lead to gaming of the system. If only punitive damages are capped, leaving noneconomic awards with no ceiling, plaintiffs' lawyers would simply change their complaints to plead greater economic damages.'' The Norwood amendment rightly takes account of that reality and does place a limitation on noneconomic damages as well as punitive damages. Mr. Chairman, the Norwood amendment seeks to give patients redress and yet not clog the courts, not open wide the gates of litigation. The Norwood amendment will allow patients to get that relief most quickly. They do not have to go through the courts. We provide for an expedited review by a panel of physicians and, after all, I think that is what everybody has been begging for is for doctors to make medical decisions. The Norwood amendment does that. It is the superior bill before us. Let us adopt that and do something for patients in this country.

Mr. McCRERY

Mr. McCRERY. Mr. Chairman, placing reasonable caps on medical malpractice will help us, as the gentleman from Louisiana pointed out (Mr. Tauzin), to fight health care inflation. In 1999, fully 13 percent of our gross domestic product went to health care expenses. That number will climb to almost 16 percent before this decade is over. At some point, this trend becomes unsustainable and some sort of national health care system in which politicians ration health care becomes inevitable. Our medical malpractice system is a drag on the health care system in many ways. Dollars spent on lawyers, enormous jury awards and settlements to avoid litigation are not being spent on patient care. Data from the insurance analyst A.M. Best show that injured claimants received less than one-third of total malpractice premiums in 1996, while attorneys' fees, the cost of expert witnesses and other court costs eat up more than half. The fear of being sued encourages defensive medicine, extra tests and procedures which may help insulate physicians from being sued, but do nothing for patients, other than add to their bills. The amendment before us strikes an appropriate balance. It permits States to enact their own medical malpractice laws, if they wish, but it does set a standard which will govern malpractice actions in States which have failed to enact their own reforms. Finally, it is critical to remember that nothing in this amendment denies injured plaintiffs from obtaining adequate redress, including compensation for 100 percent of their economic losses, their medical costs, their lost wages, future lost wages. Instead, though, this amendment places reasonable limits on noneconomic and punitive damages. As the American Medical Association noted in testimony in 1996, ``While these can be emotionally charged issues, the fact remains that the current tort system, driven as it is by the potential for unlimited attorneys' fees and unlimited compensation for intangible losses, is unable to resolve medical liability claims effectively and efficiently.'' ``Moreover, even with the cap of a quarter of a million dollars, the United States would be the most generous country in the world in compensating for noneconomic losses.'' This is a balanced amendment. It will do great good for our health care system in this country.

Mr. McCRERY

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

Mr. McCRERY. The gentleman knows that we are not. The gentleman, I think, means that we are spending some of the surplus attributable to the Social Security payroll tax, and we are not even doing that.

Mr. McCRERY. The gentleman does not mean to imply that we are spending Social Security money?

Mr. McCRERY. Mr. Speaker, we Republicans certainly welcome the ranking member of the Committee on Ways and Means and his colleagues to the cause of fiscal discipline. We did not see such rhetoric when we were spending the Social Security surplus when they were in control of the Congress. But now that we want to cut taxes for the American people, now that we want to have a sound energy policy, they are concerned. We welcome their concern and, in fact, we share their goal. But the fact is that at this point the Congress has not spent or cut taxes to the extent that we encroach upon the surpluses provided by the Social Security Trust Fund or the Medicare Trust Fund. We do not know what the picture will look like at the end of the year. The responsible thing for this House to do today is to pass this energy bill, which provides this country a sound energy policy for the future, and then as we get toward the end of the year, we see what the fiscal picture looks like, we can put it all together. But do not hold up this bill in the cause of fiscal discipline. Today, let us pass this bill and this rule.

Mr. McCRERY

Mr. McCRERY. Mr. Chairman, I thank the chairman for yielding me this time and for the role he played in putting this excellent package together. Mr. Chairman, first of all, let me just say that any speaker here on the floor today who says that this bill or any other bill that the Congress passes raids the Social Security trust fund is either intentionally misleading the public or is exhibiting a lack of understanding of the Social Security trust fund, the Medicare trust fund. The fact is that is not true, and I hope that we will get off of that. But with respect to the bill before us, Mr. Chairman, it is clear that our country continues to struggle with the fact that our domestic energy production does not meet our demand. The time is now for Congress to pass an energy policy that will address present needs and secure a stable supply of power for the future, and this bill accomplishes those goals. As chairman of the House Committee on Ways and Means Subcommittee on Select Revenue Measures, I had the opportunity to help find energy solutions through our Tax Code. My subcommittee held three hearings on the issue, giving us an opportunity to hear from the administration, Members of Congress, and many other interested parties. At our second hearing, I outlined several principles which should be adhered to in formulating a national energy tax policy. First and foremost, our complex problems require a balanced solution. We have heard that here today: we need balance. We have it in this bill, in the tax portion of the bill. Conservation, renewable, and alternative fuels, and expanded production of traditional fuels, such as oil and gas and coal, must all be part of the solution. The portion of the energy bill passed through the Committee on Ways and Means is faithful to that goal of a balanced solution. Conservation plays a key role, with expanded incentives for solar power, fuel cells and clean cars. Alternative fuels receive a boost, with new incentives to produce electricity from biomass and landfill gases. This legislation also encourages production through modifications to the existing section 29 program, which has been very successful in stimulating the production of oil and gas from tight sands and other difficult areas of production. At our hearings, the committee heard how bottlenecks in distribution were a significant problem. A stable supply of energy is only of use if we can get it to where it is needed when it is needed. Accordingly, the bill before us today helps utilities spin off their transmission assets to ensure they are used as efficiently as possible. In addition, we provide faster depreciation for oil refining properties and for gas distribution lines. Commonsense things to get the power to the people. Our energy tax policy should be sensitive to the environment also. Several provisions of the Ways and Means energy legislation reflect that. It assists refiners in coping with the cost of producing low- sulfur fuel. It reduces taxes on diesel water emulsions, which have substantially lowered emissions than traditional diesel fuel. And it helps cover the cost of installing new technologies which will dramatically reduce the emissions from coal-fired plans. For too long Congress has viewed energy policy as a dilemma: produce or conserve; the economy or the environment. We do not have to have it one way or the other. We can do both. This bill does that. Vote for it.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, reclaiming my time, that may be the interpretation of the gentleman from Georgia (Mr. Collins), but I really believe that Democrats are well intentioned. They really believe that the Federal Government ought to spend money for the benefit of people in this country.

Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, the minority leader has engaged in a tactic that is fairly common around here. It is the tactic of obfuscation. But no amount of obfuscation can get around the fact that the American people today are being taxed more than they have ever been taxed before in peacetime. In fact, as far as the research that I have been able to conduct can uncover, this is the highest rate of taxation for the American people except for one time in our history, which was during World War II. You cannot obfuscate that fact. We are paying more in taxes than we ever have. And what is the result of that high rate of taxation? We have a surplus. We are taking in more money than we need to run the government. So what are we going to do with that surplus? We are paying down debt as fast as we can. Regardless of all the rhetoric that you just heard, this House and the Senate passed a budget that accounts for this tax cut, that accounts for paying down $2.4 trillion in debt over the next 10 years, that accounts for a prescription drug benefit for seniors, that accounts for Medicare spending and Social Security spending. Shame on people who say that if we give the American people some of their money back, their hard-earned money, if we let them keep more of the money that they earned, that we are going to throw the elderly into the streets. Shame on them. That is just not the case, and they know it. For years in this House, years, decades, the Democratic majority passed budgets that not only did not pay down debt, it added to the debt. They spent money willy-nilly while raising taxes in a vain attempt to keep up with their spending habits. But in the last 6 years, the Republican majority, with spending restraint, has managed to balance the Federal budget and create a surplus. Now we would like to give the American people the rewards of those efforts, and I believe we are going to do it. It is the right thing to do. It is the right thing to do for the American people, it is the right thing to do for economic growth.

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

Mr. McCRERY. Mr. Speaker, reclaiming my time, I thank the gentleman for his remarks. Mr. Speaker, let me conclude by pointing out that the minority leader in closing on the Democrat substitute twice mentioned that the Republican underlying bill, the underlying tax cut, is a tax cut for the wealthy special interests. Did Members hear that? The wealthy special interests. Guess who the underlying bill benefits? Guess who this tax cut that the Republican majority is attempting to past today benefits? It benefits everybody in this country who pays income taxes. That is your special interest. That is your wealthy special interest. If you pay income taxes, I guess you are a wealthy special interest. So be it; we are going to cut your taxes.

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

Mr. McCRERY. Mr. Speaker, I rise in strong support of H.R. 1836 which continues this body's efforts to quickly enact meaningful tax relief. While I understand that this bill mainly represents a vehicle to get us to conference with the Senate, I am particularly pleased that the House's reconciliation bill focuses on the most important component of the President's tax cut, a reduction in marginal tax rates. With almost $960 billion in tax relief, this legislation provides a solid base for addition of other important tax cuts during negotiations with the Senate. As we work to reach agreement with our friends on the other body, however, I urge the retention of these rate cuts. First, unlike the tax policy of the prior administration, marginal rate cuts do not discriminate. They do not favor only individuals engaging in activities deemed worthy. They do not use IRS agents as social engineers. Under these marginal rate cuts, if one pays income taxes, one gets a tax cut. It is that simple. Second, bold marginal rate cuts can help prevent a further slide in our economy. During testimony before the Committee on Ways and Means earlier this year, noted economist Martin Feldstein explained that, ``a large tax cut coming at this time will help to assure a stronger short- term recovery from the current economic slowdown.'' He went on to say that, while adjusting the tax rates cannot eliminate the business cycle, a tax cut now would be useful, as the increase in after-tax incomes and expectations that such increases will continue in the future will boost confidence as well as spending power. Increasing the short-term effect by starting the tax cuts at the beginning of the year would reinforce this favorable effect.'' Simply put, the sooner we pass rate reductions, the more likely they are to help address concerns about the softening economy. Arthur Laffer, who advised former President Reagan, said it quite simply, ``George W. Bush's tax cut proposal will benefit the American economy in the near term by bringing the current slowdown to a quick end. In the long run, it could increase the economy's growth rate. Pro-growth tax policies do wonders for the economy.'' Cutting marginal tax rates encourages individuals to work harder and to take risks. For the small businesses who pay taxes on the individual schedule, these tax cuts will make it possible for them to expend the capital necessary for them to continue to grow. Recent research by Robert Carroll and other economists found tax rate reductions had a significant influence on small business growth and that reducing the top marginal rate down to 33 percent would result in approximately 10 percent higher revenues for those small businesses in the top tax bracket. In another paper, the group found that boosting small businesses' after-tax income by that much would increase their likelihood of adding more employees. A dynamic analysis of the United States economy done by the Heritage Foundation estimated the rate reductions contained in this legislation would increase the family of four's after-tax budget by $2,624, leading to an increase in consumption while also driving up our anemically-low national savings rate. In short, Mr. Speaker, let our economy grow. Let us pass this tax bill out of the House today, get into conference with the Senate, give our economy a boost, and get us back on the path to economic growth.

Mr. McCRERY. Mr. Speaker, I rise in opposition to the amendment.

Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I commend the minority on bringing forward a tax cut to this body. It is not an exercise that they are particularly accustomed to, but I commend them for getting a substitute together to cut taxes for the American people. Mr. Speaker, I believe that not only the base bill that is before us, H.R. 1836, which is an across-the-board rate cut for the American people, as well as the other tax vehicles, the tax cut provisions that we have passed through this House that will be part of the conference between the House and the Senate, those items being the marriage penalty relief, the increase in the child tax credit, estate tax relief, the Portman-Cardin bill on IRAs and 401(k)s, savings vehicles, will provide the kind of stimulus for savings and investment that we need in this country; whereas the substitute that is offered by the minority, as good as it is, will not do that. Their bill is more narrowly targeted, to say the least. It will not provide incentives for small businesses or entrepreneurs to increase investment in their businesses, to create more jobs, and to give the economy the kind of kick that we need to continue economic growth in the future. While I commend the minority for bringing forth a tax cut to this body today in the form of their substitute, I would urge the Members of this House to vote against the substitute and for the underlying bill. Mr. Speaker, I yield 2 minutes to the gentleman from Iowa (Mr. Nussle), a distinguished member of the Committee on Ways and Means.

Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, with all due respect to the gentleman from Washington, I would hope that he would tell his constituent who asked that question, would he be better off with both higher energy prices and higher taxes, surely not. Surely he realizes that one way we can help that constituent is to cut his taxes, to give him more of his own money to use to meet those high energy bills. The gentleman should know that the President appointed long ago a task force to come back with recommendations on energy policy, which this country has lacked for a decade and we are very sorely in need of having. So this President is trying to respond to the energy needs of this country, and we expect that report, in fact, tomorrow from the President. Mr. Speaker, I hope that we can tell the constituent of the gentleman from Washington (Mr. Inslee) that help is on the way, not only on the energy front but certainly on the tax front, as we have demonstrated by our votes here in this House to cut taxes. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam Johnson), a member of the Committee on Ways and Means.

Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the gentlewoman from Washington (Ms. Dunn), a member of the Committee on Ways and Means.

Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Kingston).

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, today I am introducing a bill that would eliminate a provision of the tax code which hinders the global competitiveness of the U.S. leasing industry. The leasing industry is important to the U.S. role in the global economy. Our manufacturers use leasing as a means to finance exports of their goods, and many have leasing subsidiaries that arrange for such financing. Many U.S. financial companies also arrange lease financing as one of their core services. The activities of these companies support U.S. jobs and investment. Enacted in 1984, the depreciation rules governing tax-exempt use property (referred to as the ``Pickle rules'') operate to place U.S. companies at a competitive disadvantage in overseas markets. Because of the adverse impact of the Pickle rules on cost recovery, U.S. lessors are unable in many cases to offer U.S.-manufactured equipment to overseas customers on terms that are competitive with those offered by their foreign competitors. Many European countries, for example, provide far more favorable depreciation rules for home-country lessors leasing equipment manufactured in the home country. There is no compelling tax policy rationale for maintaining the Pickle rules as they apply to export leases. The Pickle rules were enacted in part to address situations where the economic benefit of accelerated depreciation and the investment tax credit were indirectly transferred to foreign entities not subject to U.S. tax through reduced rentals under a lease. That rationale no longer applies. The investment tax credit was repealed in 1986, and property used outside the United States generally is no longer eligible for accelerated depreciation. The present-law requirement that property leased to foreign entities or persons be depreciated over 125 percent of the lease term simply operates as an impediment to U.S. participation in global leasing markets. The global leasing markets have expanded dramatically since 1984. The competitive pressures on U.S. businesses from their foreign counterparts also have increased dramatically. Repealing the Pickle rules as they apply to U.S. exports will strengthen the competitiveness of the U.S. leasing industry and promote U.S. jobs and investment. I am pleased my friend and colleague from California, Mr. Matsui, is introducing similar legislation and look forward to working with him and others to unshackle the leasing industry from these outdated constraints.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, today I am pleased to introduce a bill on behalf of myself, Mr. Neal of Massachusetts, and 24 of our colleagues from the Ways and Means Committee. Current law contains a temporary active financial services provision in Subpart F. This provision makes sure that active business income of a U.S. financial services company operating overseas is not subjected to U.S. tax until that income is distributed to the U.S. parent. If this temporary provision were allowed to expire at the end of 2001, American financial services companies would be placed on an unequal footing with their foreign competitors. Our legislation would make the active financial services provision permanent, securing international parity for our financial services industry and providing it with treatment comparable to that afforded other segments of the U.S. economy. This legislation is important not only to U.S. financial services companies but also to the U.S. businesses that they service internationally. As just one example, U.S. banks and finance companies support the international sales growth of U.S. manufacturers and distributors. Additionally, Mr. Speaker, because U.S. employees provide support services for the overseas operations of our financial services companies, this legislation will also enhance the creation and preservation of U.S. jobs that depend on these international operations. The growth of American finance and credit companies, banks, securities firms, and insurance companies is impaired by the uncertainty of an ``on-again, off-again'' practice of annual extensions of the active financial services provision. Making this provision a permanent part of the law will allow our financial services companies to make long-term plans for their continued international growth. Without this legislation, American financial services companies will be deprived of the certainty that their foreign-based competitors enjoy when operating outside of their home countries. Mr. Speaker, this legislation will ensure U.S. tax policy does not hamper the ability of our financial services companies to compete in the international marketplace. The permanent extension of the active financial services provision is particularly important today, if the U.S. financial services industry is to continue as a global leader in international markets. The highly competitive and global nature of many of the businesses that will benefit from this legislation highlights the need to ensure greater parity between U.S. tax laws and those of most other industrialized nations. Any disparity enhances the ability of foreign competitors to engage in a wider range of financial activities than U.S. companies. In closing, making this provision a permanent part of the law would provide for an equitable and stable international tax regime for the U.S. financial services industry. We hope that this legislation will receive every possible consideration.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, the numbers of the gentleman from New York (Mr. McNulty) are incorrect. They are not the President's numbers. He double-counts $2 trillion of the $2.9 trillion of Social Security surplus.

Mr. McCRERY. Mr. Speaker, I want to talk about debt, because we have heard from a lot of folks on the other side of the aisle that they are concerned about debt. They are concerned that this tax cut is too big; and because it is too big, we will not be able to pay down the debt that is going to be a burden on our children and grandchildren. Well, I am glad they are concerned about the debt. It is about time. But the fact is that we have been paying down debt. The best way to gauge the level of debt held by the public is to compute that debt as a percentage of our national income, our Gross Domestic Product. The Congressional Budget Office baseline, which assumes no tax cut, some spending increases and everything else going to debt reduction, tells us the debt in 2006, just 5 years from now, will be 9.4 percent of our national income, the lowest level since 1917. Using that same baseline, but assuming we pass the President's $1.6 trillion tax cut, the publicly held debt in 2006 will be about 14 percent of our national income, again, the lowest our debt will have been since 1917. Now, let us say that we give the President his $1.6 trillion tax cut and we spend the rest of the surplus except for that that is attributable to Social Security and Medicare. Well, the publicly held debt in 2006 would be 15.1 percent of GDP, the lowest level since 1917. Well, let us say we will use only the Social Security surplus to buy down the publicly held debt. In 2006, it would be 16.6 percent of GDP, except for 1 year, 1929, the lowest level since 1917. But in his address to Congress just last week, President Bush said he would like for us to pay down only $2 trillion of debt over the next 10 years. Well, where would that leave us? It would leave the debt at 21.5 percent of GDP, and that would be the lowest level since 1930. And that is counting the President's tax cut plus increased spending for education, the military, health research, and Medicare. We have been paying down the debt. Even with the tax cut and increased spending over the next 5 years, our debt will be lower than it has been since 1930. Since 1930, we have lived through the great depression, World War II, the Korean conflict, the Vietnam war, the boom times of the 1980s and the 1990s, and it will be the lowest since any of that occurred. We can afford a tax cut and pay down the debt. Let us do it.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, then as a natural consequence, we are going to get higher reimbursement for the Medicare+Choice plans. That is an interaction that is unavoidable in this plan. I am glad that the gentleman is not suggesting that we do not give higher reimbursement rates to our hospitals and other providers.

Mr. McCRERY. I yield to the gentleman from New Jersey.

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me the time, and I will be glad to yield to my friend from New Jersey. Mr. Speaker, the gentleman is right, there are interactions with the increased payments that we make to hospitals. Because, as the gentleman knows, in figuring the payment rate for the Medicare+Choice plans, it is the fee-for-service rate in that region that has an impact on the reimbursement rate for the Medicare+Choice program. That is true. But certainly the gentleman would not suggest that we not raise the payments to the hospitals and the other providers that we are doing in this bill, would he?