Don Nickles

Mr. NICKLES

Mr. NICKLES. I ask for the yeas and nays.

Mr. NICKLES

Mr. NICKLES. Mr. President, I compliment my friend and colleague from Montana for his remarks about different things we can do to help the economy, including communications. Too many times when we in this body talk about impacting the economy, we are only talking about spending and revenues. We need to have broader vision, including telecommunications, including some areas that are suffocating the economy, such as asbestos litigation, such as liability for health care providers, whether that be doctors or hospitals. Those things handicap or in some cases greatly increase costs and cost a lot of jobs. I will make a couple of comments concerning fiscal policy. Some colleagues on the Democrat side of the aisle have alluded to it and given their information. I will throw out a few facts. I have heard repeatedly that the President's economic growth package will only benefit a few. I disagree with that. If you happen to be married, if you happen to have any kids, they benefit very substantially. As a matter of fact, the President's proposals dealing with the growth package benefit families very well. He accelerates the per-child tax credit which we passed a couple of years ago and is now $600 and makes that $1,000. In my family, we had four kids. They are grown, so I will not benefit from it. But if a young family has four kids, that is $4,000 on which they do not have to pay taxes. That is a $4,000 tax credit. Let me rephrase that. They not only do not have to pay taxes on it, they get a tax credit. If their tax liability is $4,000, they pay no taxes, no Federal income taxes. That is pretty generous. That is pretty good. That is very profamily. And the President is trying to accelerate that. His acceleration is an additional $400 per child. With four children, that is an additional $1,600 a year in Federal income taxes that family, that couple, will not have to pay. They can use that money for their kids' education and other expenses--medical or whatever. They have that choice; they can decide how to spend it. Also, if it happens to be a family, the President is moving basically to eliminate the marriage penalty. By doing that, he doubles the amount of the 15-percent bracket. That is a big, positive advantage for a married couple. If they have combined incomes up to about $50,000 or so, they will be in the 15-percent tax bracket instead of the 27- percent tax bracket. That is almost half. That, in value, is at least worth--it is right at $1,000. If you couple that with the per-child tax credit, moving up to a $1,000-per-child tax credit President Bush has enacted or will have enacted--and I expect it will be successful--those are the most profamily tax changes one could imagine. When I hear this rhetoric, ``Well, that only benefits the superwealthy,'' and so on, I don't know what they are talking about. But if people have kids and they happen to be married, they are going to be at a 15 percent tax bracket up to $50,000-some and they are going to get a tax credit of $1,000 per child. That is pretty generous. That is pretty profamily. So I just mention that. The idea of eliminating the double taxation on dividends is a good idea and one I hope we will be able to pass. It is one about which, I notice, our colleague John Kerry, on December 3, said: . . . and we should encourage the measurement of real value of companies by ending the double taxation of dividends. That statement was made on December 3, 2002, just about a month ago. He happens to be right. I want to see somebody justify the value of this. What is appropriate about a corporation--I used to run one--having to pay 35 percent corporate income tax on any profits they make and then distribute those in the form of dividends to their owners, and then their owners also have to pay 30 percent or maybe even 38 percent or maybe 27 percent on top of the corporate 35? If you add those together, you are looking at tax rates of 65, 70-- over 70 percent. So if a corporation makes $1,000 in net profit and they want to distribute that to shareholders, the Federal Government is going to get 70 percent. How does that make economic sense? It is a real discouragement to granting dividends, to distributing the proceeds, the earnings of a corporation. It encourages just the opposite. So if you are not going to do that, what shall we do? Let's go into debt. We encourage debt. We allow companies to deduct interest. That is deductible right off the top. So the net policy of the corporation, if it wants to expand, should they borrow money or go out and have a stock offering. Time and time again they say let's go deeper into debt, and investors are taught not to invest in companies that pay dividends. Let's invest in growth companies. They are more speculative, granted, and maybe as a result you see greater inflation and a bubble in the stock market and also a greater fall. That certainly is what happened in March of 2002. We had greatly inflated stock values and they went way up and they went way down. That is one of the reasons why our revenues to the Federal Government have declined and declined so significantly. People continue to misstate the facts. ``We have a deficit because of President Bush's tax cut that passed in the year 2001.'' That is not true. Revenues have declined. They have declined dramatically between the year 2000 and the year 2001 and the year 2002. In the year 2000, total Federal revenues equaled $2.25 trillion--over $2 trillion. The next year they went down about 2 percent, $1.991 trillion. In the year just completed, the year 2002, the total revenues were $1.853 trillion. For the last 2 years, revenues combined have fallen by 9 percent. That is the first time that has happened almost in history. You might say why? Was that because President Bush was elected? No. There was a recession. There is a recession. It declined. That recession started, in my opinion, in March of 2000. The stock market started crashing in March of 2000. So with great market devaluation, very rapid, in 2000, in 2001, and in 2002, it has had significant impact. Markets have gone way up and they have gone significantly down. Hopefully now we are starting to see some increases in the markets. But that is what has caused the big reduction in revenue. There is a recession. There has also been a war. There has been the terrorist attack. I hope my colleagues will stick to the facts and say: We had a recession, revenues went down, what are we going to do about it? I guess some are proposing we could have tax increases. I don't think that would help the situation. Now most people are agreeing let's have some stimulus type of growth package. What can we do to grow the economy? The President said let's be profamily. Let's offer a per-child tax credit, eliminate the marriage penalty. I hope we will be successful. He's also said let's accelerate the existing rate cuts that were passed in 2001. By doing that, he says, instead of just having another point reduction, a 1 point reduction in 2004 and another 1 point reduction or 2 point reduction in 2006, let's accelerate those and make them effective this year. And he's exactly right. I hear this rhetoric from our colleagues: That only benefits the wealthy. Just a couple of comments are in order. If you look at the tax cuts we passed in May or June of 2001, on the low income tax cuts, we made those effective retroactively. We reduced the 15 percent tax bracket to 10 percent, and we didn't do it effective on the date of passage; we did it effective retroactive to January 1 of that year. We didn't do that for the other rates. We did it for the lowest rate. So everybody got a tax cut, they got 100 percent of the tax cut on the low-income side. If you were in a tax bracket that paid 15 percent, say you were an individual who had a taxable income of up to $10,000, $14,000, you were in a 15 percent tax bracket up to $22,000, we made that rate, in many cases, for a large portion of that, 10 percent, and we made it retroactive. If you were in that category, you got 100 percent of the rate reduction tax cut and you got it retroactive. The upper incomes we didn't make a 5 point reduction in 1 year, we didn't go from 10 to 15. Upper incomes, all the other rates--all the other rates we moved down by one point. If you were at the 28 percent tax bracket, you went to 27; if you were 33, 32; if you were at 39.6, you went to 38.6. That is a pretty marginal rate reduction, for all the rhetoric we hear about class warfare and benefiting the wealthy, if you have a 1 percent rate reduction when you are wealthy and if you are lower income you got 5. The President said: Let's accelerate the remaining cuts for 2004 and 2006, make them effective January 16 this year--and he's right. At that point the highest rate on personal income tax, Federal personal income tax, would be 35 percent. I know we will hear that benefits Warren Buffett or whoever, but the net result is you are going to have a lot of individuals paying 35 percent. Guess what the corporate income tax rate is. It is 35 percent. Why should individuals pay more than corporations? I might mention, for about 70 percent of the people who are in the highest income tax bracket, they are businesses, small businesses. I used to run a small business. Why in the world should they be taxed at rates higher than big corporations? That's the present Tax Code. We need to change that. The President has proposed changing that and he's exactly right. Those are the companies that are behind most of the people in the upcoming years. If you want to grow the economy, let's have a rate that at least is not higher than for corporations, for individuals, for sole proprietors, for partnerships and others. That would make good sense. I think the President has offered us some good packages. I mentioned small business. Small business would be able to expense up to $75,000. The present law is $25,000. I think Senator Baucus has proposed something similar to that. That is a good proposal. That is probusiness. That is pro small business. It will allow businesses to be able to expense items over a shorter period of time and they will make more investments. That will create more jobs. I think we ought to stick to some facts and think about how we can grow the economy. I don't think we should be near as partisan as some of the rhetoric I have heard on the floor already. Usually we let the President submit his budget and his plans, but it is being denounced almost on a daily, almost an hourly basis by some of our colleagues. I hope we tone it down and we look at the facts and we consider various alternatives. If people have different ideas, let's consider those. We can vote on different ideas. Let's try to figure out how we can get the maximum bang for the buck in helping the economy, in growing the economy, in helping the most people. How can it be a long- term positive tax change? So I hope the Senate will return to its great tradition. The Finance Committee has always been a bipartisan committee. It was in 2001 when we passed the President's first tax bill. I hope and expect it will in 2003 under the chairmanship of Senator Grassley. I hope our colleagues will say let's work together and let's tone down the partisan rhetoric that we have heard so stridently early in the year and work together to see if we can't do some positive things to help grow this economy and help a lot of people get jobs. That is what the point really is--not pointing the finger and saying the recession really started in 2000. And it did. Let us try to figure out ways that we can grow the economy together--Democrats and Republicans doing something positive for our country. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I wish to compliment my friend and colleague from Missouri for his statement. I wish to make a few additional comments as well. This is my 23rd year in the Senate. Every 2 years we have passed an organizing resolution within a couple of days of the House and the Senate reconvening--almost always on the first or second day; always within a week. Every 2 years for the last 20-some years we have done that within a couple of days. This year we haven't because our friends and colleagues on the Democrat side have objected. I am embarrassed by their objection. The resolution the majority leader introduced is basically pro forma. It should have been done on the first day. It recognizes the newly elected Senators and the committees on which they have chosen to serve. It also recognizes the new chairmanships as a result of the elections. That is only appropriate. It is only proper. It is only fitting. It is normal course. It is standard practice. And it should have been done by unanimous consent, without any objection. It has happened every year I have been in the Senate--or every other year. We do it at the beginning of every new Congress. But this year, for whatever reason, our colleagues on the Democrat side decided to object. They indicated they would filibuster. I urge them not to. I urge them to keep in mind we do serve and are privileged to serve in probably the greatest deliberative, elected body in the history of the world. Senator Byrd may come over and talk about the Roman Senate, but certainly this rivals the Roman Senate. But this is not our finest hour. If the Democrats are saying, wait a minute, we are going to insist on maintaining chairmanship of the committees, they are really refuting the elected will of the people which they made clear last November. In my term in the Senate, there has been a change in leadership and a change in committees done automatically, within a couple of days. It happened in 1981, as a result of the 1980 elections. It happened in 1987, as a result of the 1986 elections. It happened in 1995, as a result of the 1994 elections. It happened in the year 2000, as a result of the Senator Jeffords switch. And it happened immediately. There was no prolonged debate on this side, saying: Wait a minute. This is not fair. As a matter of fact, gavels were handed over. So it is almost as if the minority party or the Democrat Party said: Wait a minute. We don't want to be in the minority so we are going to delay process indefinitely. I just read an e-mail that basically said that. It said: We will continue to chair. I am or will be the new chairman of the Budget Committee. I scheduled a hearing with Alan Greenspan, Chairman of the Federal Reserve, to testify today. I had to postpone that because of this embarrassment. I am embarrassed for the Senate. I love this institution. And to see our colleagues on the other side denigrate the reputation of the Senate, by falsely trying to assume that they maintain chairmanships of these committees, is ridiculous. So I urge my colleagues--I see the assistant Democrat leader and whip. I urge my colleagues: Enough. Let's think of the institution. Let's think of the Senate. Let's think of the traditions of the Senate. Let's think of regular order in the Senate. Let's think of the reputation of the Senate and not fall down into this kind of partisan ploy to obstruct. And now I have read a letter that said: Well, we don't want to get this solved until we get a certain ratio of money. You are going to get plenty of money for committees. I think everybody knows that. Or maybe: We don't want to do this until we have an agreement on square footage in each office space. That is ridiculous. Those negotiations usually take months. Or now I see a letter that says: Well, we don't want to have an organizational resolution until we have an agreement on the confirmation of judges and how many will be taken up at what time. That is, again, totally ridiculous, totally out of line, totally contrary to the great traditions of the Senate. We are all, I think, proud to serve in the Senate, but this is denigrating to the Senate. We need to think of the reputation of the Senate. We need to show other countries, which have struggling democracies, that you can have a transition of power, and it can move very seamlessly and very smoothly and very appropriately, and not have something such as this lingering. What kind of example is this to set for other countries that have aspirations for democracy to see this kind of episode? This is not our finest hour. This is an embarrassment. So I implore our colleagues, for the sake of the Senate, for the institution in which we have the pleasure and privilege to serve, for the Constitution, that we should work together, that we should have a smooth, seamless transition of power within our body, within our committees, and let's work together. This is not a good start. The tradition of the Senate is, when we come back from election time, and we come back from Christmas break, and holidays, that we are in a good spirit, and that we shake hands, and that we put elections behind us and say we are going to work together for the good of the country. And, oh, yes, maybe in the second year, at some point--late in the second year--we will start worrying about elections. Now it seems as if people are more worried about the elections. We have everybody announcing they are running for President, and Presidential elections are starting 2 years in advance. And the Senate is already somewhat in a quagmire, not even operating because some people think: Well, maybe we will be better off if we just obstruct. We will not even let the committees organize. And I read that in an e-mail. That is not the way to run the Senate. That is not the way to serve in the Senate. So again, I implore upon my friends--and I have many friends on the Democrat side--let's think of what is right for the institution, for this body, for democracy as a whole, and let's work together. We have a lot of unfinished business to do. Maybe people do not want to do it, but we have 11 out of 13 appropriations bills that have not been passed from last year. We are already in fiscal year 2003. We have already finished 3 months of fiscal year 2003. We need to finish those appropriations bills. We need to have those amounts fixed so we can base that for the 2004 budget. We have a lot of work to do. We have international threats, certainly in Iraq, possibly in Korea. We have a war on terrorism. We have a lot of work to do that is far more important than partisan gamesmanship. We need to think of what is important for our country. We ought to at least have a grace period where we put partisanship aside and where we work together for the good of the country. I urge my colleagues, let's do what the tradition of the Senate has always done; let's reorganize now. Let's do it without objection. Let's work together. Let's finish some of our unfinished business. And let's work together to tackle some of the real critical problems we have confronting our country today.

Mr. NICKLES. I have not yielded the floor. I would be happy to yield the floor. Mr. President, I yield the floor.

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. That would be what year?

Mr. NICKLES. Correct me if I am wrong, but at what date did we pass a resolution announcing the chairmanships of the committees?

Mr. NICKLES. No. Correct me if I am wrong, but in January of 2001, we passed a resolution quickly, announcing who would be committee chairs.

Mr. NICKLES. I did not serve in 1880. But I still believe that early in January we passed a resolution announcing who the committee chairs were. And I also believe--correct me if I am wrong; and I am happy to be corrected--after Senator Jeffords switched, we had an automatic transition of who was to be committee chairmen, and I believe that happened in June of 2001.

Mr. NICKLES. If the Senator will yield, again, I think he announced he was switching, but I think he delayed it until we passed the tax bill. As a matter of fact, if memory serves me correctly--and I am stretching it--I believe Senator Jeffords announced his intentions to switch, and some of us tried hard to dissuade him from that. I believe he also said his switch would not be effective until after we passed President Bush's tax bill, which took a few weeks, which we did pass; and I believe shortly after the conclusion of passing that bill, he did announce his affiliation as an Independent but his alignment with Democrats; and I believe--I may well be corrected--shortly after that, not when he announced his intention, but after he announced he would do that, after we passed the tax bill, there was a transition of power almost immediately in all the committees. In the Jeffords case, it was a little different because that wasn't an election, that was a switch, and that was not as a result of elections, that was a unique scenario. This is not a unique scenario. We have had 108 Congresses, and every Congress, until now, to my knowledge, after convening at the beginning of the Congress, has elected its chairmanships and assigned committee members. We have 10 new Senators--11, if you count Senator Lautenberg who haven't even been formally assigned to committees. I was scheduled to have a hearing with Chairman Greenspan. I will have seven new members on the committee, and we could not have them sit in on that hearing. How absurd is that? I urge my colleague--I will refresh my memory on the Jeffords case, but let us work together. This is so unlike the tradition of the Senate. I see my colleague from Maryland here who I know has a love for this institution. This is denigrating to this institution and sending a terrible signal to those other countries that have fledgling democracies, to say, wait a minute, there was an election and a change in power but the Democrats are not relinquishing that power.

Mr. NICKLES. No, we have not.

Mr. NICKLES. I yielded to my colleague.

Mr. NICKLES. If the Senator would.

Mr. NICKLES. Mr. President, I have a couple comments. One, I am going to be very strict when people start engaging in dialog and not going through the Chair. The Senate is a great institution. It is not a little chat club. I am warning my colleagues, they should go through the Chair. To say that when we do a Senate reorganizing resolution, we are supposed to solve staffing allocations, room allocations, and now blue- slip policies on appellate court judges, that is absurd. It has never been done. In the last Congress, after the Jeffords switch, there was a reorganizing resolution. It did mention staff, and it should not have.

Mr. NICKLES. Should not have. That was the breaking of a precedent in every Congress of never mentioning the funding resolution. Mr. President, 1977 was the first time funding was ever raised, and I do not believe it was part of the reorganizing resolution. It did say the minority should get one-third.

Mr. NICKLES. I will not yield.

Mr. NICKLES. I will not yield. My point being, the tradition of the Senate has always been to adopt a resolution announcing the individuals serving on committees and that this person or that person will be chairman of a committee. That has always been the tradition of the Senate. We broke tradition last year, and it was a terrible precedent to set because now if we are going to do a reorganization now, we have to negotiate wages, staff allotment, space allotment, and now people are trying to bring in blue slips. They are trying to drag in all kinds of issues so basically they can obstruct the Senate. That is absurd. Let's pass the resolution as we have done for the last 200-some years in the Senate, and say: Here is the organizing resolution; here are the committees on which you will serve. I have been in the Senate for 22 years, and that is what we have done in at least 21 out of the 22 years, and I would venture to say we did it 22 out of 22 years. The aberration being in the middle of last year after the Jeffords switch in 2001. I believe that was a mistake. Obviously, it was a mistake because we can have the Senate tied up in knots for weeks discussing all kinds of trivial issues that, frankly, should be decided by the Rules Committee, not by the Senate, not by reorganization. Reorganization is assigning individuals as chairmen and new members of a committee so they can serve on their committees; so we can staff the committees; so we can have hearings; so we can have Chairman Greenspan today; so we can have hearings on nominees; so we can get our work done; so the chairman of the Appropriations Committee can bring forward the unfinished business; so we can move on and discuss space allotment. We can discuss staff allotment, and we can discuss blue-slip policy in committees which have their work cut out to work on those issues. It should not be in a reorganization resolution. That was a mistake last year, in my opinion. It was the first time we did it, I believe--this is now my 23rd year--for 22 years we always adopted a resolution that said: Here are the committees. Now people are trying to put on more bells and whistles: Before we do committees, we have to get this. That is absurd. That is designed to fail. That is designed to obstruct. That is designed to say: We are not going to let you chair this committee unless you give us our way on blue-slip policy. Now we are going to give Senators vetoes on circuit court appellate judges which we have never had? It is a case of maybe the minority not wanting to relinquish their majority or wanting to pretend they are the majority just to obstruct the majority that is trying to get some work done. It is really indefensible. Again, I implore my colleagues who love this institution, let's work together. Let's adopt this reorganizing resolution. It does exactly what my colleague from Nevada said. It says: Here are the committee chairs; here are the members of the committees. The minority needs to adopt the same resolution: Here are the members of the committees. Then let's go to work. The funding issue is not that big an issue. It is very close to being solved. The space allotment is not that big of an issue. It is close to being resolved. But it should not be resolved as part of this resolution. This resolution says who will be committee chairs, and we should adopt it today. There is a lot of serious work that needs to be done. Let the Rules Committee do its work. That is what the Rules Committee is for, to divvy up space and work on allotments. I worked with my colleague from Nevada, and I am very interested in being fair on space and being fair on committee allotments, but that should not be done now. What should be done now is to adopt this resolution so we can have a confirmation hearing on the nominee for Treasury Secretary and so we can have a hearing on the nominee for the Department of Homeland Security, so we can have Chairman Greenspan testify before the Committee on the Budget about the economy so we can move our Nation's business forward, so we can take up the appropriations bills and try to get caught up on some of the work on which we are behind. It is absurd to tie it to getting this and that; we did it last year. Last year was unique, and maybe we did not solve it right. Let's look back at the tradition of the Senate and at all those struggling democracies around the world. They look to us with great pride. When they visit the United States, they love to come to the Senate. They want to see a functioning democracy. In my years in the Senate, we changed power, we changed chairmen several times and always did it smoothly and seamlessly, but this year we are not, and that is not a very good example for us to set. I urge my colleagues, let's step back a little bit. Let's move off this partisan excitement in which people are engaged, and together solve some of these other problems behind closed doors, as we usually do, in a way that is satisfactory to all. We can do that. To say we are going to filibuster this resolution and you can never be chair until we do such and such--frankly, I find it demeaning to the Senate. I do not want to say that. I do not want it to happen. I love this institution, and this situation is denigrating to this great institution. I yield the floor.

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. Will the Senator yield for a comment?

Mr. NICKLES. I do not want to get into the funding because I do not believe it belongs in this resolution, but my understanding is that the offer the majority leader has made is that the committee is going to be held whole, that the amount of staff money for the Banking Committee would still be there for the next Congress, so there would not be a radical shift; there would be ample funds. I wanted to make sure the Senator was aware of that. I ask the Senator if he is aware of the fact, not counting the last Congress, that in every Congress going all the way back to 1993, Banking traditionally had a two-thirds/one-third, but the majority leader is not talking about going back to two-thirds/one-third; he is basically talking about giving the same amount of money that was allocated last year.

Mr. NICKLES

Mr. NICKLES. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. NICKLES

Mr. NICKLES. Mr. President, I spoke earlier today on unemployment compensation, and I am not going to repeat those statements. I think it is really unfortunate that some people maybe want to play politics with this issue. I don't know. I am concerned. I am pleased we were able to pass a bill that will help a lot of Americans. I had resisted in the past and will continue to resist efforts to double the Federal program from 13 weeks to 26 weeks for every State. This is a Federally financed program--financed entirely by the Federal Government. In other words, people who participate in this program have already exhausted State benefits which are 26 weeks. Last year in March or April we passed a Federal program for 13 weeks of benefits. Some people are saying that 13 weeks should be 26 weeks. In other words, an unemployed person would be able to receive 1 full year of unemployment compensation benefits regardless of whether or not they are in the high unemployment State. I disagree with that. If you continue to expand unemployment benefits for a longer duration, in some cases you are going to expand unemployment. It will create disincentives for people to go to work. I believe a fact of interest is that 70 percent of people receiving unemployed benefits are living in a household with an employed worker. I just mention these facts not really to debate it but just to say there is a real concern trying to turn a Federal program which is to be temporary into a permanent program and to take a temporary program of 13 weeks for all States and make that 26 weeks. That is very expensive. I have strong reservations about it. I opposed that several times last year for months and will continue to do so if persons try to pass that proposal. I might also mention there are several other expansions of unemployment compensation in the bill that was promoted last year. I brought that to individuals' attention who were sponsoring it because I think it had fatal flaws. I think, more importantly, rather than just trying to figure out ways in which we could expand unemployment, we should be figuring out ways to expand employment. How can we grow the economy? How can we expand jobs? How can we create more jobs, and not reward people for not working but reward them for working? Let's create greater incentives for work. The President's speech today in Chicago outlined a growth package. I compliment him for it. It is different. In many cases, it is very good tax policy. I really hope when we work on tax issues that will work for things that are good tax policy. There are a lot of things under the present code that need to be changed and that need to be corrected that are wrong and that are real disincentives to grow, build or expand--one of which is double taxation of dividends. I used to run a corporation. Why in the world would a corporation or somebody who runs a corporation want to pay dividends? The corporation has to pay a 35-percent tax on the earnings. And dividends come out after tax. So you have already paid a 35-percent rate. Then they are paid out to individuals. They also have to pay tax. The individual in all likelihood would be at a 27-percent rate, or a 30-percent rate, or a 38-percent rate. So you had the 37 percent plus the 35 percent. You are already at a 73-percent tax rate. If a corporation makes $100, $73 of the $100 goes to taxation. That is not very good use of resources from a corporate manager's position. It is not very encouraging of investment. A lot of us would like to eliminate that unfair penalty of double taxation. The President proposed that today. There are different ways of doing it. He proposed one. I compliment him for it. I also believe the President had a provision to allow greater use of what we call expensing--allowing individuals--I believe in this case small companies--to expense items, I believe up to $75,000. I used to run a small business. I have run a corporation. As I say, I have also run a small business. But if you allow small business to expense, they are going to be able to recoup the investment they make that year. They make the investment that year, they expense it, and they recoup that investment. That would greatly increase their incentives to make another investment. I think that is very positive for job creation, maybe the most positive as far as getting jobs for the dollars that we are talking about. So I am pleased the President has that in his proposal. I hope this Congress will aggressively pursue expensing and/or accelerated depreciation or more realistic depreciation schedules over the life of these properties. Far too many properties, under current tax laws and current regulations, require depreciation over a long period of time, much longer, in some cases, than the actual lives of the property. That discourages investment. So I encourage our colleagues, if we want to create jobs, let's work on accelerating depreciation or allow people to expense items or at least allow a shorter depreciation cycle for a lot of goods and services. One example is software. A year ago, I believe, or 2 years ago, the depreciable life of software was 5 years. It was the same thing for computers and equipment. But we all know software is obsolete in a couple years, and hardware, for the most part, is probably obsolete in 2 or 3 years, certainly not 5 years. So allowing for a more realistic depreciation schedule makes sense. Another example is improvements that you would make for apartments and homes if you are in the rental business. Right now, you have to depreciate these improvements over 39 years. If you have an apartment complex, and you want to make some investments to upgrade that apartment, you should be able to depreciate those improvements over a much shorter period of time than 39 years. It should be more like 15 years, maybe even 10 years. If we made that change, a lot of people would make those investments. A lot of jobs would be created in the process. The President's proposal also says that we should have acceleration of the tax cuts that are already on the books. I agree with him wholeheartedly. Tax cuts, some of which are now scheduled for 2004, some of which are scheduled for 2006, in my opinion, should be made immediate, January 1, 2003. If we want to have any positive economic impact from them, it does not do a lot of good knowing that they are going to come in a couple of years. Let's make them immediate. I know some people want to play class warfare and say: Wait a minute, that is a tax cut for the wealthy. If we did it immediately, the maximum tax rate would be 35 percent. When President Clinton was elected, the maximum tax rate was 31 percent. So it is still almost 20 percent higher than it was when President Clinton was elected. Now, 35 percent--why should the Federal Government be entitled to take over a third of what an individual makes? I believe 35 percent is a little over a third. So why is that such a bad deal? We have to look at taxation policy, what is right, what is fair. Should the Federal Government be entitled to automatically take that amount? I talk about marginal tax rates a lot because high marginal tax rates inhibit individuals, investors, entrepreneurs, small businesspeople, farmers, and ranchers from building and expanding if they have to work for the Government the majority of the time. I used to be self-employed. Self-employed individuals pay the highest marginal tax rates of anybody. And guess what they create: about 70 or 80 percent of the jobs in America. You do not have to be very wealthy before you find out you are working as much for Uncle Sam as for yourself. I will give you an example. A self-employed individual who has a taxable income of $30,000 is in a 20-percent marginal Federal income- tax bracket. I believe any additional dollar they make above $27,000, $28,000 is taxed at a 27-percent rate. That individual also has to pay what are commonly called FICA taxes, Social Security, and Medicare tax. That tax totals 15.3 percent. If you add 15.3 percent, plus the 27 percent, you get to 42.3 percent. So any additional dollar of income profits that the painter makes--I used to be a janitor--or a janitor makes, or someone who has some type of business, any profit they make above that $30,000, the Federal Government gets 42.3 percent of it. If they are working in most States, they end up paying a State income tax. There are a few States that do not have an income tax. Most States have an income tax of 6 or 7 percent. If you add 7 percent on top of the 42.3 percent, you are already right at 50 percent in taxes on any additional dollar of income generated from their work. That is a real disincentive to build, grow, or expand. I have been there. I was there with a janitorial service, so it did not take me very long to realize, wait a minute, why should this business grow if we are going to be working more for the Government than we work for ourselves? The President, talking about trying to accelerate the existing tax cuts that are on the books, is exactly right. It is a small reduction in marginal rates. Even at that, the rates are still much higher for upper income people, far higher than they were during the Clinton administration. The President has also proposed making the child tax credit effective immediately. Several years ago, we passed, as part of the 1997 bill, a $500 tax credit per child. I was one of the sponsors of that. We passed that. That became law. That was good. In 2001, President Bush's first tax bill, we passed another $500 tax credit per child, but we phased it in over several years. In the first year, we gave a $100 tax credit. There is still $400 that becomes effective in the outyears. What the President has proposed is, let's make that effective this year. I have heard some say: Wait a minute. The President's proposal doesn't do anything for people making $35,000 or $40,000 a year. That is not true. If they have one child, it is $400. If they have three children, that is $1,200 more per year they get to keep. So I urge my colleagues to look at the President's proposal because I think it is a positive change. Let's make that $1,000 tax credit per child effective this year, not $600, as is present law. Let's make it $1,000 this year. That will help families. That will help individuals who have children as dependents. The President, as well, has also proposed making the marriage penalty elimination, that is now spread out over several years, effective immediately. The net impact of this is a great positive change for married couples, particularly married couples who have incomes in the range from $30,000 to $40,000 to $50,000, $55,000. They will be the biggest beneficiaries of this proposal because the changes that we made in 2001 in the Tax Code say that really what we should do, for a married couple, is double the 15-percent bracket for an individual. I believe the figures are something like, an individual pays 15 percent on their taxable income up to about $27,750. But a couple pays 15 percent up to an income of about $46,400. So an individual pays 15 percent up to $27,750, but a couple pays--or another way of saying that is, anything above $27,750, an individual pays 27 percent, anything above $46,400, a couple has to pay 27 percent. So if they were taxed as individuals, they could have a combined income of $55,500 before they would go into the 27-percent tax bracket. What we did in eliminating the marriage penalty relief was, over some period of time, double that individual 15-percent bracket. So the couple would not have to pay 27 percent until they had income above $55,500. Right now, they pay about $10,000 or $12,000 of that at the 27-percent bracket instead of the 15- percent bracket. The net result is, you are talking about $1,200 in savings, tax savings for couples who have taxable incomes of $40,000 to $50,000. That is a pretty good change. If they have a couple kids, they get another $400 tax credit per child. So if you have four kids and a taxable income of $54,000, the way I am thinking, that is $1,600 and $1,200, so $2,800. It is a pretty significant reduction and savings for a married couple with four kids with a taxable income of $50,000 or $60,000. And it happens to apply to a lot of middle-income Americans. So I compliment the President for his combination of changes where he wants to grow the economy. It helps married families. It helps families with kids. It helps taxpayers. And it helps eliminate a well-known double taxation in the Tax Code, the double taxation of dividends that are really at exorbitant rates, which discourages investment, which discourages corporate ownership, which discourages equity, and encourages debt, which is not a very good policy--present law. The President says, let's correct it. I think he is right in doing so. I look forward to working with my colleagues to see if we can't work in a bipartisan fashion to put together a real package that will help grow jobs this year. I think that should be our challenge, not to say, here is the Democrat package, here is the Republican package. I say let's work together as we have done historically in the Finance Committee to see if we can't pass something good for America, good for American taxpayers and good for American families and good for our economy. We should have our economy grow. Revenues declined last year by 7 percent. Somebody said, why is there a deficit? There is a deficit because of the tax cut? The deficit is not because of the tax cut. It is because there has been a real recession. Revenues have declined because the stock market started declining dramatically in March of 2000. The Nasdaq index was at 5,000. It is around 1,500, 1,600 now. So you see there has been a real decline in markets. That has caused a real decline in revenues to the Government. We need to do some positive things that will increase equity values and increase ownership in America's companies, that will create jobs, that will create real growth in the economy. The President has outlined a constructive package. I look forward to working with the President and my colleagues to enact a positive package for America this year. I yield the floor and suggest the absence of a quorum.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. NICKLES

Mr. NICKLES. I move to lay the motion on the table. The motion to lay on the table was agreed to.