Thomas Reynolds

Mr. REYNOLDS

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I know that it is not a missed opportunity for those millions of taxpayers who are going to be assisted by this. While I respect my colleague from Maryland, I think there is a couple of things we need to look at to set the record straight. I was prepared to do it as we do the rule on the legislation, but maybe now is a good time. This bill provides nearly $200 million in assistance for our military. This bill has 23 annual extenders for tax provisions that we have worked on in the past. It is going to address child tax credit that we have passed overwhelmingly in this House in a bipartisan provision. It is going to address the marriage penalty, which this House has, again, done in overwhelming provisions in past votes. We have a 10 percent bracket, which is there. Without passage of the legislation, the bracket would start to fade until it is totally removed from the Tax Code, and that would affect 73 million families who will be paying higher income taxes next year. Over the next 10 years, these families will pay out a total of $2,400 more in taxes. That is a bill that this House has passed in previous times. When we look at the AMT relief which was created more than 30 years ago as a way to prevent high income taxpayers from avoiding income tax payments, something happened, and the failure to index AMT for inflation has resulted in millions of Americans paying for this onerous double tax. As a result, by 2010, one in three American taxpayers will be hid in the shadow of the AMT tax. Both in the 2001 and 2003 growth packages, Congress worked to ensure the new tax cuts would not force more taxpayers into the AMT trap. Yet, the provisions preventing millions of middle-class Americans from being hit with the AMT will expire at the end of this year. This is why the legislation is so critical, to prevent these Americans from being hit with the unsuspected tax. So when we look at this legislation, when the House is scheduled to adjourn on October 1, and we look at this House that may extend itself a few days in closing, we need to also keep on track moving legislation that is ready for the body to consider. I would also say that when we look at this, which was provided for, the paying of this, in the House-crafted budget that was adopted by this body, the extension of family tax relief is already provided for in the House-passed budget resolution. That resolution would cut the deficit in half over 5 years without raising taxes, so this bill is paid for. The second aspect is the Democrats have agreed to extending the child tax credit, the 10 percent bracket, and the marriage penalty relief. However, to accomplish the offsets, they want means of more than $130 billion in either tax hikes or spending cuts. The Democrats are not prepared to make the tough choices regarding which taxes to increase or which programs to cut. We are going to talk about a procedural provision of whether we adopt this rule to consider same-day or not versus the aspect of an alternative, which I welcome as they bring their legislation before the House. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, is the gentleman asking me if I would yield on his time?

Mr. REYNOLDS. No, I will give the gentleman exactly what I said, if the gentleman will yield.

Mr. REYNOLDS. Mr. Speaker, I said the extension of the family tax relief is already provided for in the House-passed budget resolution. That resolution would cut the deficit in half over 5 years without raising taxes. I believe that the previous speaker on the minority side, the gentleman from Maryland, made a statement that he felt that it was not paid for.

Mr. REYNOLDS. Mr. Speaker, upon reflection and in listening to the distinguished gentleman from New York (Mr. Rangel), the ranking member of the Committee on Ways and Means and one who is the senior member of the New York delegation, I agree with him that we should phase out and change the AMT tax, and I have watched him advocate a lot of other things. A few times I have not seen him want to pay for it except for raising taxes. But the thing I heard most out of the debate was not about helping the American family put more money back into their pockets, not about the middle class, which some of the politicians outside this body would talk about middle-class warfare and all of the other type of class war discussion. Today, if we are allowed to start the debate on this bill, we will begin to help the middle class because, otherwise, if the Congress does not act, families will face a tax increase next year. For example, next year, the $1,000 child tax credit drops to $700 per child. The 10 percent bracket will apply to less than an individual's income, and the marriage penalty provision will provide less relief for couples. I did not hear the aspect of a debate over how we get it done out of the distinguished ranking member. What I heard was the Democrats may look bad however they vote versus a decision of whether you are going to help the middle class today with a tax cut or whether you are going to raise taxes by not getting the job done. I hope we will pass this same-day rule so we can bring the legislation to the floor. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. I hope my colleague will take the opportunity to brief himself on the income tax savings for middle-income families, a Joint Economic Committee study done by the gentleman from New Jersey (Vice Chairman Saxton) of the Joint Economic Committee of the Congress; possibly that will provide him some assistance on some of the points that he has made. The impending tax increases, unless Congress takes action, the following tax increases will automatically occur. I want all of my colleagues from all walks of life to look at what actually is at risk here if this legislation is not passed before we adjourn. The impending tax increases, unless Congress takes action, the following increases will automatically occur: In 2005, the child tax credit will decrease from $1,000 to $700. The standard deduction for couples as a percentage of the standard deduction for singles will decrease from 200 percent to 174 percent, reinstating the marriage penalty. The top end of the 15 percent marginal income tax bracket for couples as a percentage of the top end for singles will decrease from 200 percent to 174 percent, reinstating the marriage penalty. The 10 percent marginal income tax bracket will contract from covering the first $7,000 of income for singles and $14,000 for joint filers to covering only the first $6,000 of income for singles and $12,000 for joint filers. The bonus depreciation will decrease from 50 percent to 30 percent. The exemption of the alternative minimum tax will decrease from $40,250 to $33,750, Mr. Speaker, for single filers, and from $58,000 to $45,000 for married couples filing jointly. In 2006, the section 179 small business expensing cap will decrease from $100,000 to $25,000, and the definition of small business will decrease from $400,000 to $200,000. In 2009, the personal capital gains rate will increase from 15 percent to 20 percent. Dividends will no longer be taxed on the personal capital gains rate, thereby increasing the double taxation of dividends by as much as 62 percent. In 2011, the marginal income tax rates will increase as follows: 35 percent bracket will increase to 39.6 percent; 33 percent bracket will increase to 36 percent; 28 percent bracket will increase to 31 percent; the 25 percent bracket will increase to 28 percent; and the 10 percent bracket will increase to 15 percent. The child tax credit will decrease from $1,000 to $500. The annual education IRA contribution limit will decrease from $2,000 to $500. The standard deduction for couples as a percentage of the standard deduction for singles will decrease from 200 percent to 167 percent, reinstating the marriage penalty. The top end of the 15 percent marginal income tax bracket for couples as a percentage of the top end for singles will decrease from 200 percent to 167 percent, reinstating the marriage penalty. The estate tax using the stepped-up basis will return with a 60 percent maximum rate, including surtax, and a $1 million exemption after years of decreasing estate tax rates, increasing exemptions, and one year using the more fair carry-over basis to calculate the tax due. The annual IRA contribution limit will decrease from 5,000 to a post- 2008 inflation of 2,000. So we can see that if Congress takes action, we will help all taxpayers that are paying taxes to put money back in their pocket versus having it in the government. As we consider whether we have a same-day, I again urge the adoption of this rule so we can consider the underlying legislation in the next rule. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I look forward to this gentleman and any others coming to the Committee on Rules if we get consideration of the same-day so we can hear any amendments that they would like to discuss. But as we well know, a conference report is not amendable, so it will be an up or down vote. I do not know many taxpayers that are $11,000 that have to pay an income tax that we are considering. I thought the earned income tax credit is a refundable tax credit offered by the Federal Government; I know New York has its own EITC, and that rate is 27.5 of a qualifying taxpayer's Federal EITC in the tax year 2002 and that the Federal and State EITC or for the working people that earn low or moderate income. So I certainly will continue to listen to my colleague, as I always do on his thoughts, both on this as an individual, Member to Member, but also anything he would like to bring on the floor of the debate when the distinguished Committee on Ways and Means will continue in what I believe will be a proper debate.

Mr. REYNOLDS. I yield to the gentleman from Tennessee.

Mr. REYNOLDS. I will bring this debate to a closure.

Mr. REYNOLDS. Then I will not yield so I can complete my question on my time. If the gentleman gets time from his ranking member of this debate, we will certainly continue.

Mr. REYNOLDS. Mr. Speaker, in consultation with the Committee on Ways and Means and, of course, this is more appropriate on the underlying legislation, or I suppose even we could request them on the next rule, EIC has been expanded dramatically in this legislation which is going to assist in a number of fashions. I am not exactly sure as the gentleman from Tennessee (Mr. Ford) has outlined a particular part that he has talked about on 11,000; but the EIC is expanded just on the aspect of making sure that we capture helping low income wage earners so that they are not caught in this. As I said, in my State, the EITC has been extensively of assistance to our poor and low income family wage earners. I would hope that we can move forward to a closure of this rule on same-day, take a vote on it, see if the body will consider then the rule on the underlying legislation, to consider this legislation so that all Members will have an opportunity to participate in the debate, and then we can have consideration of whether we pass this conference report, which has been 18 months in the making. Most of these are extenders and legislation that all Members are well aware of. We have had strong bipartisan support for this legislation as has been considered in this body in the past. Otherwise, as I understand it, if we are not able to take this legislation up today, it will cause us to be continuing our work tomorrow if we cannot complete our work today. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I have no further speakers, and I am prepared to close.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, it is important for the record as this has had substantial debate on the underlying bill of future consideration of the next rule. There is only one change to the EIC in this bill which is an expansion for military families, in contradiction to some of the debate before. The bill allows military families to include combat pay in the EIC and child credits, and that provision is in the legislation that will be considered later if this bill is now passed as a rule before us. So to get back to where we are, we have a rule that is requesting consideration of this body of a same-day rule that if we pass it today, we will continue in being able to do our work on a conference report rule to consider the legislation, the underlying bill today. If not, it would seem to me, as I understand it from previous briefings before coming to the floor, if we are not allowed to continue our work today, we will then find ourselves working tomorrow on this legislation because we were not able to complete it today. So the resolution before us today and the rule is for same-day consideration of the legislation that will be the underlying legislation rule next. I would hope that we could pass this legislation and vote for the previous question so that we can move forward.

Mr. REYNOLDS. Mr. Speaker, when I was responding to Mr. Ford's remarks about those earning under $11,000 per year, I inadvertently referred to the EIC, when I meant to refer to the refundable portion of the child credit. It is important to note that the bill does not increase taxes on anyone and actually increases the refundability of the child credit for low-income families.

Mr. REYNOLDS. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. REYNOLDS

Mr. REYNOLDS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 794 and ask for its immediate consideration.

Mr. REYNOLDS. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from New York (Ms. Slaughter), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only. (Mr. REYNOLDS asked and was given permission to revise and extend his remarks.)

Mr. REYNOLDS. Mr. Speaker, House Resolution 794 is a customary rule providing for consideration of the conference report on H.R. 1308, the Working Families Tax Relief Act of 2004. The rule waives all points of order against the conference report and against its consideration. The rule also provides the conference report will be considered as read. Mr. Speaker, as we prepare to head home to our districts for the weekend, there are two things that I look forward to telling my constituents that this Congress accomplished today: Cutting taxes and creating jobs. They are two of the most important things we can do for the hard-working people who sent us here to represent them. We all know the unfortunate hits America's economy has suffered over the past several years. But through the strength of this administration and the will of this Congress, we have made great strides in recovering from horrific terrorist attacks, corporate scandals and a recession. Time and time again, this Congress has responded to adversity with sound economic policies that continue to grow our economy. Thanks to the Economic Growth and Tax Relief Act and the Jobs and Growth Tax Relief Act, we have given taxpayers in my district and all across America greater control over their hard-earned dollars. Not only does this provide greater motivation for savings and investment, but it also protects and creates jobs. The Working Families Tax Relief Act before us today is yet another step in our plan to create a fair and reasonable tax system for hard-working Americans and continue the path of new job creation. In March of 2003, this House passed our original version of the bill by a voice vote under suspension of the rules. In June of that same year we passed the bill for a second time. Mr. Speaker, in the 18 months that we have been debating this bill, our constituents have waited patiently for the tax relief they deserve. Today, that long wait ends. The underlying conference report includes much of the previous House passed language, providing more and longer lasting benefits for families of all income levels. It extends the child tax credit of $1,000 per eligible child that is currently scheduled to sunset in 2005. The conference report makes this a meaningful credit available through 2010. Important tax relief for married couples is also extended in the conference report. The House voted overwhelmingly in April of this year to make marriage penalty relief permanent, and we have yet another opportunity today to do the right thing. Mr. Speaker, the conference report also expands the 10 percent bracket originally created in the Economic Growth and Tax Relief Reconciliation Act of 2001, and which overwhelmingly passed this House once again just over 4 months ago. This provision means substantial tax relief for low-income workers by taxing the first $14,000 of earnings for married couples and the first $7,000 for single taxpayers at a 10 percent rate instead of a 15 percent rate. Without extensions of the child tax credit, marriage penalty relief and the expansion of the 10 percent bracket, working families would face a $109 billion tax increase over the next 10 years. This House simply cannot delay and must pass this measure in order to remove these excess tax burdens from our hard-working families. Mr. Speaker, the report additionally provides the middle class with relief from the Alternative Minimum Tax, the AMT. While the calculation for the AMT is quite complicated, the negative result is simple to understand: It is an extra tax some have to pay on top of their regular income tax. Originally conceived to prevent those with a very higher income from abusing tax benefits to unfairly reduce or eliminate their tax liability, the AMT has unintentionally ensnared millions of middle- class taxpayers. In May of this year, the AMT tax exemption was widely supported in this House on a bipartisan basis. Without this much needed extension, more middle income families will be pushed into the AMT, resulting in a tax hike of $23 billion in the next 10 years. The conference report also continues to honor our servicemen and women in combat zones with nearly $200 million in tax assistance through the inclusion of tax-free combat pay when calculating their refundable child credit and an increase in the Earned Income Credit. Our brave men and women in uniform continue to defend the freedoms this Nation holds dear, and every day they work to protect us from those who would do us harm. They do not just deserve our thanks and appreciation, they deserve this sensible assistance for their hard work and sacrifice. The conference report further provides that the tax-exempt status of an organization is automatically suspended during any period in which the organization is designated as a terrorist organization or is listed in or designated by an executive order as supporting terrorism. Mr. Speaker, also included in the underlying conference report is a 1-year extension of over 20 various expiring tax provisions, including the research and development tax credit, which is so important to business across the country. In all, $13 billion of needed tax relief is provided for with these extensions. Of particular importance to my home State of New York is the expansion of authority to issue advance refunding of Liberty Zone bonds through 2009. The Liberty Zone bond financing was intended to encourage the commercial revitalization of Lower Manhattan, and in particular, the World Trade Center site following the devastating attacks of September 11. Currently scheduled to expire this December, I am pleased this conference report recognized the importance of the program and has included this much-needed extension. Mr. Speaker, a yes vote today seizes on the momentum we have created towards a strong economy and job creation and sends a clear message that this Congress supports putting real dollars back where they belong, into the hands of hard-working men and women. A no vote simply prevents us this needed relief from becoming reality and denies our constituency the assistance they deserve. I urge my colleagues to join me in supporting the rule and the underlying conference report. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. First, in listening to the gentlewoman's remarks on the general preliminary estimates that were there, as I understand it, that is what is published before the legislation is passed. Also, for the Record, I would like to have the final, which was prepared by the Joint Committee on Taxation, which is on their website for the Members who may not be in the chamber now if they choose to use it, but I would like to have this inserted into the Record as the final numbers. Also, as I have listened to some of the aspects about this bill, both in the previous rule and now, that it is not paid for, I think there are a couple of things that also need to be on record. This bill prevents a tax increase on families, and it is very clear, if we do nothing, that taxes will go up, and so, actually, we are preventing that. Secondly, the relief that is provided for in the President's budget which holds the line on spending, it cuts the deficit in half over 5 years. The recent data from the Treasury Department show we are on track to meeting the President's budget goals. Finally, the Treasury data shows that tax receipts are increasing, despite the President's tax relief, proof that tax relief leads to economic growth. [GRAPHIC] [TIFF OMITTED] TH23SE04.007 [GRAPHIC] [TIFF OMITTED] TH23SE04.008 [GRAPHIC] [TIFF OMITTED] TH23SE04.009 Mr. Speaker, I yield 3 minutes to the gentlewoman from Pennsylvania (Ms. Hart).

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. We are getting into some of the theatrics of politics 40 days before an election. I accept that. But I also want to say that before Joe Scarborough was elected in 1994, in the time he served, it was the failed liberal policies of 40 years that knew tax and spend, in this House and allowed the policy that started in 1995 which was to stop a train wreck, and also begin to move forward in recovering from the largest tax increase in American history in 1993. Now, what I also find ironic, the Democratic leadership of the House never listened to Joe Scarborough when he was a Member but might choose to now that he is a pundit and an author. But the fact is, as we look at this legislation on the underlying bill, as we consider this rule today, this rule prevents a tax increase on families, middle-class American families that the politics of America has been addressing day in and day out while the 2004 election is underway. If you do not vote for it, you begin to threaten the aspect that middle America will have a tax increase. This relief is provided for in the President's budget, which holds the line on spending and cuts the deficit in half over 5 years. Recent data from the Treasury Department shows we can and we are on track in meeting the President's budget goals. The Treasury data shows that tax receipts are increasing, despite the President's tax relief, proof that tax relief leads to economic growth. Finally, Mr. Speaker, if you look at the Joint Economic Committee United States Congress Report, in their summary it clearly says in there that raising taxes to cover budget deficits is usually a bad idea because it reduces incentives to work, save and invest. Mr. Speaker, I reserve the balance of my time. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Well, there they go again. Let us have a plan where we will sell a loaf of bread that says we will cut middle class taxes, but then again, I do not really have a plan on how to do it. I have been in the majority before getting here and serving in the majority since the day I got here, but that majority of the previous 40 years has nicely gotten trenched into the minority because they have a lot of rhetoric but they have not put forth a plan as to how to get the job done. So when you look at this, the Democrats have agreed to extending child tax credit, the 10 percent tax bracket, the marriage penalty relief, however, to accomplish the offsets they want, it means they have to come up with $130 billion of either tax hikes or spending cuts. The Democrats are not prepared to make that tough choice regarding which taxes to increase or which programs to cut. They want to come up and say, I am for cutting the middle class tax, but then again, I do not see this, I do not see that, BBA, debt, but there is never a solution. So the Democrats' plan is a zero sum game here, it provides tax relief with one hand and takes it away with the other. So the Members who should vote no on this rule are the ones not interested in helping millions of American families that deserve tax relief. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. Ryan).

Mr. REYNOLDS. Mr. Speaker, as I said earlier, we are getting down into election year, and I am so used to the other side of the aisle using class warfare, more importantly, I guess the American people are, that it is totally false, the information coming out here. The information is false. The bill does not increase taxes on anyone. It actually increases the refundability of the child tax credit for low income families; $23 billion comes back to low income working families to help them, and they do not pay income tax in the category that is the outlay. So, in other words, low income families who pay no income tax at all still will receive an additional $23 billion in the bill. As I said, Mr. Speaker, it is an election year. Prior to 2001, the child credit was refundable only for those families with three or more children. This President, under 2001 tax relief, made all families with children eligible for the refundable child credit. The size of the refundable credit is based on the family's earned income in excess of $10,000, which is indexed for inflation; and what I am seeing from the other side of the aisle is argument that the $10,000 limit should not be indexed for inflation so that families can receive a bigger check from the government. Ironically, they did not make this argument in 2001 when the refund was created in the first place. It is very important that our colleagues understand $23 billion of outlays are going to help people who do not pay income tax in the low- income levels of our society. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Half of the cost of this bill is child credit, which has an income limit. High-income people do not qualify. So I want to make sure that is on the record after my colleague just spoke. My colleague is right, though, that low-income families do need help, and that is just exactly what this conference report does. It provides $23 billion in outlays. In other words, low-income families who pay no income taxes at all will receive an additional $23 billion from the government under this bill. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. Just as I listened carefully, I thought I understood that the Republicans since being in the control of the majority have brought about a third of the country's debt in policy decisions. I guess that would mean two-thirds of the debt would be borne by the Democratic minority party. Mr. Speaker, I reserve the balance of my time.

Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume. It just is something, I would almost like to look at that particular time transcript before 1994, when I think of the failed liberal spending policies of the previous majority; but we are here today and we have to reflect that in the 21st century we have faced 9/11, a recession, corporate scandal, reinvestment into the types of things that we have had to do in order to get the economy moving again, create jobs, open opportunity, but also to make sure that we are moving again and moving strong on homeland security and our national defense, which was all but beaten up pretty well in the nineties. As we move forward, we have also done it with the aspect of a President outlining in this budget, which I hope this Congress, both sides of the aisle, might hold the line on the spending and cuts so that we can achieve the deficit reduction by cutting it in half over 5 years as the President outlined, and then how the House Republican majority put forth in its budget this year as well, the plan to do that. But I will also say that while I have enjoyed listening to comments from the sidelines about the aspect of tax cuts or how to help middle- class Americans not see a tax increase or low-income Americans not see a tax increase or expanding $23 billion of outlays to low-income Americans who would be benefited by this legislation today, I have not seen any plan that is even on the table from the other side of the aisle that will make the tough choices we have with this legislation and the underlying bill or they have a proposal of raising taxes or cutting programs, some other solution than this. But I do know this, Mr. Speaker, if my colleagues vote ``no'' on this, they are voting to raise middle America and the low-income families of this country's taxes, and if my colleagues vote ``yes'' for this rule, and they vote ``yes'' for the underlying legislation, they are going to keep millions of Americans from having to pay more in taxes. Mr. Speaker, I reserve the balance of my time.