Jim McDermott

Mr. McDERMOTT

Mr. McDERMOTT. If the gentleman from New York will yield, Mr. Chairman, would the gentleman from Washington just tell me which watershed that is? It is the mid-Columbia watershed?

Mr. McDERMOTT. So the gentleman thinks that it will go section by section through the entire Northwest and it will all be coordinated.

Mr. McDERMOTT. Mr. Chairman, if the gentleman from New York will yield, I wish that I had the belief that my colleague does in a system, because I saw what happened on the west side, and it did not happen. The fact that one area has done it in 5 years that we have been talking about, we have got to ask ourselves, where is Oregon? Where is the rest of Washington? Where is Montana? Where are all the other affected areas? They have had 5 years. They could see it coming down the track at them, and they have not done it. All these county commissioners who were going to get together, we have got one example on 72 million acres. We say, well, if we wait long enough, we will have it covered. Yes, we will, in about 25 years, after which we have had about 25 lawsuits. The problem with it is, if we do not start in a coordinated way at the start, we will never get it coordinated.

Mr. McDERMOTT. Mr. Chairman, I demand a recorded vote.

Mr. McDERMOTT

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

Mr. McDERMOTT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I rise in support of the Miller amendment. Not to get into a fight with the chairman or anyone else, but I think that, in other parts of this budget, we are taking out all the money for summer jobs in this country. We are looking at cities filled with kids where, on the one hand, we are not going to help them get a summer job, and, on the other hand, we are not willing to put some money to invest in recreational facilities so that they can be involved in organized activities that will keep them out of difficulty. We all know from our own childhood, if not from someplace else, that idle hands are the devil's workshop. I remember in the crime bill discussion, we had an awful lot of people out here jumping up and down saying that midnight basketball was not a good idea. But if we go by the places even in this city at night where there is a light and a hoop, we will see kids playing basketball. I think we would rather have them doing that than some of the other things they can think of doing. For us to take $2 million out of $80 million that is sitting somewhere being unused because we have a law that says we have to put the money in there, we made some kind of deal, but they never match it. I am up here because Seattle put in a grant for $250,000, and we know how to use it. We have got the matched money ready to go, but we would like access to this money. I think there are cities all over this country where, whether you like it or not, as we have devolved programs from the Federal level down to the State level, there are lots of States dealing with lots of things they did not use to deal with, so they are unwilling to take care of the needs of cities. If somebody does not take care of the needs of cities, we are going to be in serious trouble in this country. So I urge the adoption of this bill.

Mr. McDERMOTT. I yield to the gentleman from California.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, in 1986 the United States Congress authorized the creation of the National Marrow Donor Program to facilitate successful transplants of hematopoietic cells from volunteer unrelated donors as a form of life saving therapy for people of all racial and socioeconomic backgrounds. Today, the National Marrow Donor Program is composed of a nationwide network including 114 Donor Centers, 111 Transplant Centers and over 300 affiliated donor centers across the country. Today, bone marrow transplants are increasingly being used to treat a variety of diseases. Over 12,000 unrelated transplants were done worldwide in 1995, and the number is projected to grow at a rate of 20% a year. Bone marrow transplantation is a treatment that has come of age and is responsible for saving thousands of lives every year. In 1991 Admiral Zumwalt, Jr. created The Marrow Foundation to secure support from private sources for the work of the National Marrow Donor Program. The Foundation's goals are to help increase the size and diversity of the national Registry of donors; to assist people undergoing a transplantation financially as they search for a marrow match; and to support research to improve the understanding and outcome of unrelated marrow transplantation. This year information about the important work of The Marrow Foundation will be widely disseminated to all health professionals that need it, thanks to an educational grant made by Cell Therapeutics, Inc. (CTI), a Seattle-based biotechnology company. CTI has provided The Marrow Foundation with the grant to publish a quarterly newsletter ``Team Marrow.'' This newsletter will reach a network of over 300 affiliated donor centers, recruitment groups, and transplant and collection facilities, as well as more than 2,500 corporate, foundation and individual contributors who share in the commitment of making marrow transplantation accessible to every person who needs it. CTI, by virtue of its commitment to cancer research, understands all too well the horrendous side effects of a bone marrow transplant. CTI is devoted to bringing novel therapies to the market that will minimize the infections so frequently experienced by individuals undergoing bone marrow transplants. CTI is presently engaged in several clinical trials collaborations with various centers across the country. Earlier this month, at a celebration of The Marrow Foundation, Dr. James Bianco, CTI's founder, presented the educational grant to Admiral Zumwalt. Now, every transplant center and affiliated institution will have in hand the most current information about the national donor pool and what is being done to improve our capacity to match every person in need.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I offer a motion to recommit.

Mr. McDERMOTT. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. McDERMOTT. Yes, I am, Mr. Speaker.

Mr. McDERMOTT. Mr. Speaker, I support the bulk of what is in the Internal Revenue Service restructuring proposal that is before us, but I cannot support this legislation in its present form because of the Republican majority's insistence on including a major tax break for the well-to-do in a bill that is supposed to restructure the IRS. The Republican decision to reduce the capital gains holding period from 18 months to 12 months for the well-to-do in this legislation is a gross illustration of the Republican party's priorities. Given the likelihood that the House and Senate will not agree on anything else tax-related this year, and the fact that there is still no budget resolution in sight, it is probable that this is the last tax legislation that will pass the Congress and be signed into law. Even if the two Houses are to agree on tax legislation before November, there is no way they can pay for their extremist schemes without threatening Social Security by dipping into the budget surplus, a legislative action the President has said that he will veto. If we add that veto threat to the fact we have no budget, we are not going to see more tax legislation. So what are the Republicans' tax priorities? Elimination of the marriage tax penalty? That was in the Contract on America, but we are going to leave that by the side of the road again. An increase in child tax credit? No. An extension of the research and development tax credit? No. All the Republicans want to do when they have the chance is to guarantee a tax cut for America's wealthiest investors. Mr. Speaker, I disagree with this new-found philosophy that what is good for Goldman, Sachs is good for the country. While the Republicans are cutting taxes for the top 1 percent of this country, people averaging more than $600,000 a year, they are gutting important opportunities for America's youth in the Committee on Appropriations. So here we have the Republican agenda out in the open again for everyone to see. While they bow to the desires of America's elite, they are eliminating funding for summer youth and school-to-work employment programs. While they are boosting the personal profits for America's CEOs, they are eliminating the low-income Home Energy Assistance Program which makes sure that America's poor do not freeze to death in the winter. Mr. Speaker, I do not know where the rest of my colleagues will be next winter or next summer, but I hope they will be some place where they are enjoying themselves, because if they take away heating assistance for the poor and people die in the winter, if they take away summer jobs for students and work opportunities and we have disturbances and crime, they will be responsible, because all they wanted to do when they had a chance to make a difference was simply to give a tax break to the barons of Wall Street. This is bad tax legislation. It is the only piece. And we have had all of this talk about the fact that we are going to remove the marriage tax penalty. There will be no opportunity to do that because they cannot put together a budget resolution. If they cannot do that, we cannot have a reconciliation bill. They will have no way to get at any of the surplus. They will have to raise the taxes on tobacco or somewhere else to get the money to take away the tax penalty on marriage. Mr. Speaker, I think this shows where the priorities for the Republicans are. I support much of what is in the Internal Revenue Service (IRS) restructuring proposal now before Congress. The majority of issues which I raised in Committee and on the House Floor regarding the workability of this bill were fixed, thanks to the hard work of the conferees who improved upon both House and Senate versions. However, I cannot support this legislation in its present form because of the Republican majority's insistence on including a major tax break for the well-to-do in a bill that is supposed to restructure the IRS. The Republican Conferees last-minute addition to the IRS reform legislation that will reduce the capital gains holding period from 18 to 12 months will not reduce the complexity or the size of taxpayer headaches caused by last year's tax legislation. It will not even reduce the size of the taxpayers' capital gains Schedule D tax form by even 1 line. The change simply reduces taxes in a way that disproportionately benefits high-income taxpayers. tax inequity The Republican's decision to sneak this tax cut for the well-to-do into legislation to reform the IRS is gross illustration of the Republican party's priorities. Given the likelihood that the House and Senate will not agree on anything else tax-related this year and the fact that there still is no Budget Resolution in sight, it's probable that this is the last tax legislation that will pass Congress and be signed into law by the President. Even if the two Houses are to agree on tax legislation before November, there is no way they can pay for their extremist schemes without either threatening Social Security by dipping into the budget surplus legislative action that the President has vowed to veto. Add the veto reality into the tax equation and it makes it even more probable that this is the last tax bill to be signed into law this year. And what do the Republicans demand as their top tax priority? Elimination of the marriage tax penalty? No. An increase in the child tax credit? No. An extension of the Research and Development credit? No. All the Republicans want to do when they have the chance is to guarantee a tax cut for America's wealthiest investors. Well, Mr. Speaker, I disagree with this new-found philosophy that what's good for the partners of Goldmann-Sachs is good for the country. While the Republicans are cutting taxes for the top 1% of America's investors--folks averaging $600,000 a year or more--they are gutting important opportunities for America's youths in the Appropriations Committee. Just this week, the Republicans reported Appropriations legislation, that one member described as nothing less than ``taking from the hides of the weakest and most vulnerable in our society.'' So, here's the Republican agenda, out in the open for everyone to see. While they are bowing to the desires of America's wealthy elite, they are eliminating funding for summer youth and school-to-work employment programs. While they are boosting the personal profits for America's CEOs, they are eliminating the low-income home energy assistance program which makes sure that America's poor do not freeze to death in the winter. Now, I don't know where the rest of you will be next winter or next summer, but I hope, for your sake, that you are safely hobnobbing at your benefactor's off-shore vacation estates. Because if you take away heating assistance for the poor, and people die; and if you take away summer jobs for students, and there are civil disturbance and crime-- you will be responsible because all you wanted to do when you had a chance to make a difference was simply to give a tax break to the barons of Wall Street. tax simplicity The 1997 Taxpayer Relief Act created a confusing array of capital gains tax rates and added 35 new lines to taxpayers Schedule D tax form. There are potentially five different rates that can apply to the capital gains of an individual: 10 percent, 15 percent, 20 percent, 25 percent, and 28 percent. The 1997 Act also created two additional tax rate categories, one that will take effect for the 2001 taxable year and another that will take effect for the 2006 taxable year. The schedule required to implement that new policy will add significant additional complexity, and make the 1997 schedule look simple. In addition, increasingly large numbers of taxpayers will have to fill out the complex schedule twice, once for the regular tax and once for the minimum tax. Even with the Republican Conferee's change, the current capital gains tax schedules and underlying rules for taxation of capital gains remain unnecessarily complex, and will continue to impose on taxpayers (with more than four sales) the burden of spending, on average, 5 hours and 20 minutes preparing the schedules (two hours more than in 1994). For a party that says it wants to terminate the tax code, you'd think they could start by reducing taxpayer forms by a least 1 line. The worst aspect of current law is that its complexity falls hardest on low- and moderate income taxpayers who invest through mutual funds and real estate investment trust. Led by Representative Bill Coyne (D- PA), Ways and Means Democrats have a proposal (H.R. 3623) that would dramatically simplify the capital gains rules. Coyne's legislation, modified to be revenue neutral, would substitute a simple 38 percent exclusion for the confusing array of capital gain tax rates mandated by last year's Act. Such an exclusion has been scored by the House Joint Committee on Taxation as essentially revenue neutral--unlike the Republican plan to drain the Federal Treasury by an additional $2 billion. Like the Republican proposal, H.R. 3623 repeals the 18 month holding period requirement. It also goes a step further and would permit depreciation recapture gains on real estate so taxpayers can receive the full benefit of the capital gains tax reduction. Most importantly, H.R. 3623 simplifies the computation of capital gains taxes for all individual taxpayers by replacing the entire complex 35-line schedule with a single line that would require taxpayers to include 62 percent of their net long-term capital gains on the appropriate line of the tax return. Coyne's bill also would provide modest capital gains tax reductions for more than 97 percent of individual taxpayers. It potentially could impose modest tax increases on the approximately one and a half million wealthiest individuals in the country. This is not a bad price for its extraordinary simplicity, but may be the reason for some would-be tax code terminators opposition. The following chart illustrates the impact of the proposed simplification legislation: ---------------------------------------------------------------------------------------------------------------- Rate under current law Rate under

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, this is a pretty amazing debate. I was sitting over in my office listening to it, and I could not help but think that this is yet another assault on women. I am a physician also. In 1963, before there was abortion reform, before the Rowe v. Wade was decided in the Supreme Court, I was an intern in a hospital in New York State and stood next to the bed while two women died from back-alley abortions. We have come a long way since 1963. One of those women left six children orphaned, and the other one left eight. We said as a society, our Supreme Court said, women have a right to choose. Yet, this Congress, I understand, the Republican Party has a problem with women voters in this country. It is very clear. They assault them over and over again. As the last speaker, the gentlewoman from New York (Mrs. Maloney) talked about, 85 times in this session this issue has come up. It comes up on everything. It comes up on IMF funding. We will not fund the International Monetary Fund if somebody, somewhere, somehow is doing anything related to women's rights to choose. Military women cannot use their own money to take care of this problem in a military facility when they are assigned by this government to serve overseas. We say, if you want an abortion, I do not care what the Supreme Court says, we the Congress say you cannot have one in a military hospital, even if you pay with your own money. That is the kind of assault we have. Here today we have a new twist on it. I think the slippery slope of where we are going is really one to consider, because when we start standing out here and saying what is good science and what is bad science, and we choose this drug over that drug, what will be next in that list? Here we have the Food and Drug Administration says that this drug is safe. They have done the tests. They are waiting for a pharmaceutical manufacturer to step up and say we want to produce it in this country. That is the only thing that stands between this particular pharmaceutical being on the counter and not. What this bill does is put a threat out to the pharmaceutical industry, do not step up to produce this pharmaceutical, because if you do, you are going to get the wrath of a certain segment of this society. My view is that when we start to threaten people and do not want to listen to the science, we are going down a long slippery slope. I feel like I am in Tennessee in the middle of the Scopes trial where it is religion versus science. We have the FDA. We asked them to look at this, and they looked at it; and we say, well, we do not like the conclusion you came up with, so we will use a little technical way of preventing it ever being put on the counter. I heard the gentlewoman from Washington come out here and mix this whole thing up more with the drug overall, which is in the State of Washington in the State legislature. They evaluated this, and it is not pro-life. They looked at the issue and said ``We will give the pharmacy board the right to deal with that issue,'' and they do it. Anybody who wants, they can go to a pharmacy. If they follow a protocol and they fit the protocol under the supervision of a doctor, they can get the drug. They do not just hand it out to anybody that comes into the drug store. I went and called the pharmacy board in the State of Washington to find out what goes on. The fact is that what we are saying here is that we want women to use whatever antiquated way we have, not to have the best that science can produce. One of the fascinating things about the last 3\1/2\ years around here, the bigger part of the assault on women is that we put on welfare reform. We said we are going to throw people off welfare. What that has done, in at least three States there has been an increase in abortions. The very people who say they do not want abortion buy the mechanism of driving people off welfare and giving women no way to feed their kids; we are then leading to more abortions. They do not want to do it with a pill. They want to put them through surgery. I can understand why an obstetrician might want to do that if he was in the business of doing this. But I do not hear obstetricians who are in support of a woman's right to choose coming to this House and saying ``Do not give them a pill because I want to make money doing abortions.'' What I hear is that the pharmaceutical that is there will do it just as effectively.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, the Polycystic Kidney Research Foundation held a conference here on June 19-21. Four hundred patients, physicians, and researchers gathered to review the latest developments in research for a treatment and cure. Supporters visited members of the House and Senate to ask for a commitment to increased funding at the National Institutes of Health in research for this disease which affects 600,000 Americans. Polycystic Kidney Disease (PKD) is the most common life-threatening genetic disease and costs $1.5 billion yearly in Medicare funding. Scientists are hopeful that with increased funding in research the disease can be treated or cured within the next five years. Attached is an article which describes recent gains we've made in combatting PKD and how important continued research will be to finding a cure. I urge my colleagues to take the time to read this article and learn more about this terrible disease. [From Contemporary Dialysis & Nephrology, Sept. 1997] Genetic Breakthroughs Take Center Stage in Accelerating Polycystic Kidney Disease Drama (By Michael D. O'Neill) introduction ``I believe the future holds the prospect of fundamental breakthroughs that will allow us to develop treatments that will change the basic biology of polycystic kidney disease (PKD).'' This hopeful message was delivered by Josephine Briggs, MD, director of the Division of Kidney, Urologic, and Hematologic Diseases in the National Institutes of Health's National Institute of Diabetes and Digestive and Kidney Disease (NIDDK), in her luncheon address at the 8th Annual Conference on PKD, sponsored by the Polycystic Kidney Research (PKR) Foundation, in Nashville, TN. In 1982, Joseph H. Bruening and Jared J. Grantham, MD, founded the PKR Foundation to determine the cause, improve clinical treatment, and discover a cure for PKD. Today, the organization is the major funder of private PKD research grants and the disseminators of information about the disease worldwide to physicians, researchers, patients, and the general public. Briggs' optimism was based on a continuing series of dramatic discoveries related to the genetics and molecular biology of PKD. These discoveries have come at an ever- increasing pace following identification of the PKD1 and PKD2 genes in 1994-1995 and 1996, respectively, and have roughly paralleled an increasing rate of PKD-directed research funding by both the NIH and the PKR Foundation.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, George Will, the eminent editorialist here in Washington D.C., was in Seattle recently, and he said that the majority party in the House of Representatives was tearing themselves apart because they could not deal with substance, they had become the party of gesture. Now, yesterday was the great day of gesture. The first gesture was, let us tear the Tax Code out by its roots. That was irresponsible. That was followed by a cynical gesture. That is, they could not pass even a commission on campaign reform. Now, there is some question about whether tobacco is dead. In my view, tobacco is not dead. We will see a cynical gesture out of the Speaker's office late in this session bringing to the floor a bill that says, ``Kids, you shouldn't smoke,'' and then there will be a lot of beating of chests and saying, we passed a bill against tobacco. The fact is that the money in this place has to be collected before even that cynical gesture will be brought to the floor. We need serious campaign reform. The Speaker ought to bring Shays-Meehan to the floor immediately.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I sat and listened to the gentleman from Oklahoma talk about his desire to rip the Tax Code out by its roots. By the analogy he used, he stood up here and told us what God did, and I suppose that if he did not like something in the world, he would also say that we should go back to the beginning when it was form and void and God created all the world again. He wants this country to go to a position where there is no Tax Code whatsoever. Now, when he points to all those books of rules and he admits that he himself participated in taking advantage of the Tax Code, he wants us to throw all that away. Well, first of all, in this country, three-quarters of the people in this country do not itemize their deductions. They do not use hardly a single page in that book of rules and regulations that he himself was a real advantage taker. The gentleman from Texas (Mr. Frost) asked him a question about whether or not he added these pages to the law last year. Now, if I had his Bible up here, it would be smaller than the number of pages which he voted to put into the Tax Code. Now, the people in his district and the people in this country ought to ask, are these people really serious? Are they serious? Last year they came out here and very proudly passed 800 pages of additions to the Tax Code and beat their breasts and said they made it better for every American. And this year they come in and say, last year what we did was stupid. We want to tear it all out and throw it away and start again. Now, you have to ask yourself, which person should you believe? The one that last year passed all 800 pages and was proud of every single thing that is in here? Or are they proud of they are now going to tear it out? Let me tell my colleagues what it means to ordinary Americans. If they take this bill and pass it and say in 3 years we are not going to have a Tax Code, how is an American going to buy a house or sell a house in this country when you do not know where the interest deduction that we all take advantage of when we buy a House, where will that be? Will that be included in this next Tax Code? Or will it not? I mean, the whole real estate industry in this country is based on the fact that we can take a deduction for the interest that we pay on our mortgages. What will that mean as to the value of our house? If you cannot take the deduction, does the value go up or does the value go down? How do you make a decision as Americans? This is the stupidest idea I have seen in 10 years.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, it is really hard to come down here and be serious about this kind of thing. No one likes to pay taxes, no one likes to have to sit down once a year and send money to the government to run it, but what we have today, in an effort to tap voter discontent by the Republicans, is a cheap campaign prop. This is a bumper strip we are doing today, that is why it is only about two sentences long. In order to take this seriously, we have to go back to a satirist who used to write for the Baltimore Sun by the name of H. L. Mencken. H. L. Mencken called the American public ``Boobis Americanus''. That is, they are all stupid. Now, in order for my colleagues to come with a bill like this, they have to think the American people are stupid; that they simply do not know what is going on. If we say to the American people that right now we spend $1,200,000,000 and we are going to wipe all that out and we are going to get it from somewhere else; now, where are they going to get it from? The moon? Or from somebody else? This sounds like a bill based on the Senator Long theory of, ``Don't tax you, don't tax me, tax that guy behind a tree.'' The American public knows there has to be a Tax Code if we are going to have the kinds of goods and services that we want in this country: Social Security, Medicare, highways, national defense. My colleagues are not going to get rid of the money. They simply are creating the illusion for people that they will come up with a Tax Code that will not tax them, it will tax somebody else. Well, how stupid do my colleagues think the American people really are? They know that their deduction for their interest on their house they get now. My colleagues are not guaranteeing them anything on their house. My colleagues are not guaranteeing that their employer can deduct paying for health care for them. The average employer today, if he spends $100 on health insurance, actually costs him $65. If we repeal the code, it costs $120. Now, I know my colleagues will say, oh, we are going to take care of that. Well, if my colleagues are going to take care of it, why do they not put a proposal out here to simply say that they are going to wipe out the code and come back some day, some uncertain time? The gentleman from California (Mr. Stark) raised another issue which my colleagues really are not thinking about. The Republicans are creating chaos in this country, in the business community planning. No businessman can plan 3 years out. The problem with us is we plan 2 years out. Business plans 5, 10, 20. They want chaos. This is a bad piece of legislation. Seeking to tap into voter discontent about the complexity of the tax code, the Republican leadership today is disregarding the major issues confronting our nation in order to turn the House Floor into a cheap campaign prop. So while this bunch wastes your tax dollars by ranting, raving and campaigning about how they want to ``rip the tax code up by its roots''--without having any idea what tax system they want to replace it with--I am going to talk about what impact this rhetoric will have on real people. In particular, what this extremist legislation will mean to the ability of Americans to purchase affordable health care. Before I begin, it is important to note that the same people in the Republican majority currently peddling this ``scrap the code'' rhetoric, just last fall voted to add hundreds of new pages to the tax code and a myriad of new complex tax computations. Because of last year's tax law, this bunch added 35 new lines alone to taxpayers capital gains tax forms. So, keep that in mind that when you hear this bunch talk about tax simplicity--they are the ones who 6 months ago made the tax system a whole lot more complex. Most disturbing in their ``scrap the code'' rhetoric is the proposal to establish a rhetorically pleasing, yet critically flawed ``flat tax.'' This plan is often criticized because of its substantial revenue losses, its unfair redistribution of the tax burden, and its elimination of subsidies for home ownership. This push for the flat tax may help Republicans at the polls, but for the millions of American workers who need affordable health insurance, the flat tax is disastrous. While not necessarily ``news'' to the 42 million uninsured and the 29 million more who are underinsured in this country, there is no question that the group of workers and early retirees who will get hurt by the flat tax are the same ones who are currently being threatened by rising health costs in this country. A recent study by the National Coalition for Health Care found that between 1985 and 1997, the cost of health care doubled and it is expected to double again in the next decade. Next year alone, health premiums are estimated to rise between 5 and 10 percent--a rate at least twice that of the increase in benefits and wages. The number of uninsured in this country will exceed 42 million next year and by 2005, it is estimated that one in five Americans under the age of 65 will be without health insurance. The impact passage of the flat tax will have on worker's health insurance would be devastating. Under current law, there are substantial income tax incentives for employer-provided health benefits, with additional tax-benefits available to the self-employed who purchase health insurance. Employer-provided health benefits are exempt from income tax, Social Security, and Medicare employment taxes. For example, under the current system, the after-tax cost to an employer that provides $100 in health benefits to their employees is $65. Yet, the flat-tax plan destroys this health insurance incentive by increasing the employer's after-tax cost to $120. Under the flat tax's domestic business tax, amounts paid for non-cash fringe benefits, such as health care, are not deductible. As a result, the plan would impose an onerous tax penalty on employers providing health benefits. This legislation goes a step further by including a new tax on tax-exempt charitable organizations and Federal, State, and local governments equal to 20 percent of the amount paid for health benefits for their workers. Health benefits to retired workers will also decline. Many companies have large and burdensome liabilities for retiree health benefits and in recent years, those same companies have tried to limit benefits. The likely response from employers to the flat tax's tax penalties will be a significant reduction in health care benefits available to its current, future, and retired workers. Just last year, MIT economist James Poterba warned that ending the tax preference for employers who provide health insurance would cause the number of American families without health insurance to increase by 20 percent! In fact, such a decline in employer-provided health benefits should not surprise anyone familiar with the history of the flat tax. When the Kemp Commission first proposed adoption of the flat tax, even the Health Insurance Association of America--the same group that spent millions of dollars to kill expansion of health care coverage in 1994 and is on the verge of spending millions more to kill managed care safeguards--warned ``one of the unintended consequences of eliminating the exclusion for health insurance premiums is likely to be a rapid increase in the number of people without private health insurance coverage.'' If you want to terminate the tax code, it is vital that you understand the ramifications of each remedy. There's no question that ripping away crucial tax incentives will increase the cost of health care in this country. I find it amazing that instead of finding ways to improve the quality, affordability, and availably of health insurance, the Majority is using its control of Congress to make America's health care problems worse. Before you jump on the ``scrap the code'' bandwagon, think, for a second, abut what this legislation will mean to the affordability of health car for America's workers, their families, and their employers. Unfortunately, it's clear form this debate that all this bunch is interested in doing is devaluing the legislative process of our democracy in order to create a simplistic bumper-sticker slogan in time for November's elections.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I was unavoidably delayed at the White House and missed rollcall vote number 216 regarding House Resolution 462. Had I been present, I would have voted ``no.''

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, we are headed down the same road we were in 1995: Cut services for the elderly and the poor and give tax breaks to the rich. Let me take one specific. When we went into the Committee on the Budget we said, give us the specifics. They would not. But if we look in the budget document they put out, there is $10 billion in cuts in Medicare. Now, we start talking about that. There is $12 billion cuts in Medicaid. That is $22 billion of the $100 billion in tax cuts coming right out of health care. That is out of the same place that we took $115 billion last year in Medicare and untold billions also out of Medicaid. So they are going right back to the same well. Now they got nervous about that and last night about 9:30 or 10 o'clock up in the Committee on Rules they said, oh, my goodness, we better get this Medicare stuff out of here. Let us shift it all over into Medicaid or unspecified health care cuts. What are the unspecified health care cuts? The children's plan we put in last year, $16 billion, most of it has not been spent yet, and they are now going to cut $10 billion out of the children's program that they will be on the campaign trail in about three months saying, ``We did this great program for children.'' Meanwhile they are going to gut it with this particular proposal. Why are they getting this money? Well, it is for the marriage tax penalty. I offered that amendment in the Committee on Ways and Means and in the Committee on the Budget and in the Committee on Rules, and every single one of those committees, every single Republican Member voted against it last year. I guess maybe a miracle has occurred or an epiphany, I do not know what it is. The problem is, mine was a little tax cut for families below $50,000 who really need the benefit. But if you are going to use $100 billion in a tax cut for a marriage penalty, it is going to people above $50,000, most of it above. It is a bad, bad budget.

Mr. McDERMOTT

Mr. McDERMOTT. Madam Speaker, if you listen to this debate, you would think that if you oppose this amendment, you are against religion. Nothing could be further from the truth. Many of us who are believers or have a belief do not wear it on our shirt. My belief is that if it ain't broke, we don't need to fix it. This amendment fixes something that isn't broke. The thing that is most disturbing about it is this. If you look around the world, at Northern Ireland, the Middle East, South Asia, the Azerbaijanis and the Armenians, all of those are religious-based conflicts. We have managed to avoid that in this country. We have always had a party of fear. There was a party of fear called the Know-Nothings, which was really the base of the Republican Party in the 1850s. They did not like Catholics and they did not like anybody who did not speak English. So they did not like Germans and they did not like Irish immigrants. That is the nature of this debate. There is an exhibit opening in the Library of Congress today about the issue of religion in this country. My belief is we ought to pay attention to Ignacius who said, ``Give me a boy to the age of 6. After that, you can have him.'' You choose the prayer in his schools, you affect his life.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, as I listen to this debate, I think we are back into debate like we just finished on the prayer amendment. The question is: Does the President of the United States condone what happened in Tiananmen Square? Is anybody seriously asserting that the President of the United States condones what happened there? The answer is absolutely not. He has spoken about it over and over again. I would respect the matters of this resolution if they would put in it what they really want, which is that the President should not go. To say to the President of the United States, look, Bill, when you get over there, tell them where you are going to land and where you want to meet them and what door you want to go into, the Great Hall of the People. Just send over a letter to the Chinese Government and say, I am not coming in the front door, I want to come in around back through the alley. That is so ridiculous as to make the Chinese either laugh or be angry, one way or the other. It is their country. They decide how every official delegation comes to China. I traveled with the President on his South American trip and his African trip. People in Brazil and Argentina were distressed by the amount of intrusion we made about how the President comes into a country. For us to stand here on the floor and seriously say he should not go to the official reception place of the Chinese Government is just simply ridiculous. Now, I believe that we have no choice but to remain engaged with China. For us to return to the pre-Nixon era, when we said they are communists so we are not going to talk to them, is simply not possible. Clearly, the events in South Asia that everybody was out here 2 weeks ago passing resolutions about, that is, the exchange of nuclear technology with Pakistan, and the whole problem of the Pakistan-China- India triangle, is an issue that must be discussed at the highest level. If Members and I share a concern about peace in the world, we have to be talking to the people who have the ability to control that situation. For us to say to the President, why do you not start by insulting the Chinese, tell them where you are going to land, you are going to go into Nanking, the old south capital, you are not going to Beijing because that represents a bad place, would be like saying to Yeltsin, I do not think I am going to come into Moscow because that is where a lot of tragedy and trauma occurred. Mr. Speaker, I think this resolution is very ill-conceived and bad public policy.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today we have real irony, because we are both going to vote on prayer in the schools and a budget that cuts Medicare and support and medical care for those less fortunate in our society. This budget was put together with one hearing. They wanted to put $10 billion in cuts on Medicare. Last night, in the middle of the night, they took that out and they have now gone after the poor. I think the majority really ought to have had some religious education, because the Bible says, in Matthew 25, verse 35, ``When I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in.'' Then it goes on to say: And the king replied, ``I tell you the truth, whatever you did to one of the least of these brothers of mine, you did for me.'' Mr. Speaker, it is nice to talk about prayer in the schools, but you ought to have public policy that reflects what you believe. This budget that goes after the poor, that goes after the sick, that goes after the disabled is not a budget based on biblical principles.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise in support of this piece of legislation. As the gentleman from California (Mr. Horn) has just suggested, I think anybody who worked with Steve Schiff would use the same kind of words. I sat with him on the Ethics Committee and watched him deal with matters affecting Members on both sides of the aisle. Steve always kept his eye on the view that he wanted to know what was right, what was the situation and how should it be remedied. It did not make any difference to him who it was. He was fair beyond what I think we see very often in this House. I think that one of the things that is missing, Steve had a great sense of humor. When we were into some kind of tight spot in the Ethics Committee, he could always come up with a joke or some sort of wry phrase that would take the tension out of the situation. In many ways, he was the finest example of what people should expect from Members of Congress. I think it is a real honor that we can give this honor to him today and to his family.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I ask unanimous consent to withdraw my name as a cosponsor of H.R. 1891.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I wish to bring to the attention of this body and the American people a matter of serious concern regarding current violations of the U.S.-Japan Insurance Agreement. Against a backdrop of a rapidly expanding trade deficit, continuing Asian financial crisis, and growing skepticism regarding international trade agreements and institutions such as the IMF, it is crucial for the Administration to ensure that major U.S. trading partners live up to their obligations under existing trade agreements with the United States. Nevertheless, clear violations of the U.S.-Japan Insurance Agreement are now taking place virtually unchallenged. The U.S.-Japan Insurance Agreement is designed to promote liberalization of the Japanese insurance market by preserving the third sector, where U.S. companies have traditionally had success, until the primary first and second sectors have been liberalized by the Japanese Government. This basic bargain, struck by the governments of Japan and the United States in 1994 and strengthened in 1996, has been put at serious risk by the activities of Yasuda Fire and Marine Co., Ltd. who has used its relationship with its affiliate and de facto subsidiary INA Himawari Life Insurance CO., Ltd. to prematurely ramp up its presence in the third sector. The seriousness of this breach cannot be overstated. If Yasuda is allowed to continue expanding its presence in the third sector prior to the substantial deregulation of the life and non-life sectors, the Agreement will be left without its primary incentive for compliance by Japanese firms (i.e., the promise of access to the third sector). Yasuda's current activities also pose a serious challenge to U.S. trade policy. The Japanese insurance industry knows that obtaining this agreement required intense efforts by senior U.S. Government officials, including the President of the United States. If the United States is unable to take vigorous actions against Japan's clear violation of the U.S.-Japan Insurance Agreement, it will send a lasting and damaging message to Japan and Japanese industry, as well as to those countries that would negotiate with us in the future. Despite its failure to comply with the Agreement's critical third sector provisions, Japan appears ready to start the two and one-half year countdown to opening the third sector to large Japanese companies on July 1 of this year. Absent measures to correct the violations, this action would breach both the letter and the spirit of the U.S.-Japan Insurance Agreement. This situation requires swift action by the Administration. The U.S. insurance industry's continued viability in the Japanese market depends on the full and effective enforcement of this agreement.