Paul Ryan

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. As this motion to instruct is written, number one, under the PAYGO rules that you are advocating, you will have to raise taxes somewhere else to pay for this tax cut or you will cut entitlements because that is how PAYGO works for these tax reliefs.

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. Reclaiming my time, the point I am coming to is that the practical effect of this by saying ``does not increase the Federal budget deficit,'' is to say that this will not, in effect, end up happening. And what we want to do is make sure these tax cuts stay in place. The point is this, Mr. Speaker, when the House passed its budget resolution, when the House deemed its budget resolution passed, we budgeted for this. We planned for this. It is within our budget, which is also a broader plan to reduce the budget deficit. The point is if you put this emphasis as this motion to instruct is created, it will put a bias in to keep these taxes high. It will put pressure not on reducing spending, but keeping taxes high. That is my concern with the gentleman's motion to instruct. By saying, ``extend the tax relief provisions that expired at the end of 2004 and does not increase the Federal budget deficit,'' that puts emphasis on keeping taxes high or raise raising taxes somewhere else to make this tax cut extended, rather than putting the emphasis where it ought to be, and that is reducing spending like we budget for in the budget resolution which we have deemed here. So the points is this: we want these tax cuts to be permanent. It was always the intention they be permanent. By having these kinds of motions to instruct which will have the practical effect, in my opinion, of derailing these tax relief measures, we will have a tax increase on the middle-income family earners. This is in our budget resolution. We budget for these tax cuts to be made permanent. That is what should happen. That is why I urge a ``no'' vote on this motion to instruct. With that, I understand my friend from Texas disagrees with my assessment of this, but that is my assessment. I think that is exactly what would happen if this were to be the case. That is why I urge a ``no'' vote. Mr. Speaker, I yield back the balance of my time.

Mr. RYAN of Wisconsin. I yield to the gentleman from Texas.

Mr. RYAN of Wisconsin. Reclaiming my time, I am making a larger point that will come around to the practical effect of this motion to instruct. The point I was trying to make, Mr. Speaker, is that because of an arcane rule in the other body, those tax cuts were made temporary, meaning next year if Congress does not act, the per child tax credits will go from $1,000 down to $700. The marriage penalty relief will go away and the marriage penalty will come back into full force which costs the average married couple $1,400 in higher taxes. And the 10 percent bracket which is income tax relief to low-income Americans will go away and go back to the 15 percent tax bracket.

Mr. RYAN of Wisconsin. If the gentleman is suggesting that when the budget resolution sets its 302(a) and reconciles its provisions, then the answer is you can put credit on the PAYGO score card to pay for a tax cut. But given the fact that we already have a budget resolution that is deemed, that accommodates this tax relief provision extending this tax cut so that it does not expire, we already have in our budget this budgeted for.

Mr. RYAN of Wisconsin. I yield to the gentleman from Texas.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to be very brief about this. This is a similar motion to instruct that we have seen before. The practical result of this motion to instruct is to make sure that a tax increase hits all middle-income families next year. We have a problem and the problem is when the tax cuts passed into law last July and in the original tax cuts when they passed in 2001, the intention of this body was to make those tax cuts permanent. The tax cut that passed the House originally was that the child tax credits would be doubled, the marriage tax penalty would be vastly eliminated, and the 10 percent bracket would be expanded, and that that would be the law of the land in perpetuity.

Mr. RYAN of Wisconsin. I was thinking we were going to yield all time back. I want to be very brief. We do want to reduce the deficit. We are trying to reduce the deficit. I think there is a better way than this vehicle. That is the point I am trying to make. I do believe there is a difference of opinion on how the PAYGO rules work. But also I think it is important to point out the fact that the tax cuts that took place last year, since then we have actually raised more money in tax receipts under these new lower tax rates than we did last year under the higher tax rates. So the facts are there; but, nevertheless, the point of this is we passed budget resolutions. We have not gotten one with the other body for a lot of reasons, but we have deemed it here. We passed the budget to try to get a handle on spending and reduce the deficit. I would have done even more on spending control in our budget resolution. This is not the vehicle to do it because I believe this vehicle will make it harder to extend this tax relief; and, therefore, you will have a tax increase on middle-income workers. And I believe the better vehicle to get a hold of our deficit is to pass a good budget that gets down our deficit, that reduces our deficit. I thank the gentleman for giving me the time.

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. The House deemed a budget, so we for practical purposes are operating under the House budget resolution which we deemed to be the budget of the House because we could not get a budget agreement with the other body.

Mr. RYAN of Wisconsin. I am getting there.

Mr. RYAN of Wisconsin. I have a different understanding on that.

Mr. RYAN of Wisconsin. Does PAYGO allow for cuts in discretionary spending to be used to pay for tax relief?

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Chairman, will the gentleman yield?

Mr. RYAN of Wisconsin. Mr. Chairman, I would like to address a few of the things that the gentleman from South Carolina said. As far as the estimate on the $1.8 trillion cut, that is not accurate for this bill. Number one, this bill addresses those issues that were raised in that estimate. Number two, entitlement spending will go up. It will go up by the number of beneficiaries coming to these programs, it will go up by inflation, and medical inflation in Medicare's instance. And we do take care of putting into the baseline the new prescription drug benefit. I would like to just quickly go through the summary of what this legislation actually accomplishes in a very, very quick order. Number one, what this budget does is it raises the budget to the point of law by making a joint budget resolution so we do not have these stalemates at the end of Congress every year like we do. It also has a one-page budget so it is easier for the Congress, the House, the Senate, and the President to agree on a budget at the beginning of the session. It also abolishes the practice of designating everything as emergencies. One of the problems we have is we can designate just about anything an emergency. The census was designated an emergency. We knew that one was coming. So what we are trying to do is tighten up that definition so true emergencies are designated emergencies. We go to biennial budget so that we do our budgeting in the first year of our cycle, and then in the second year we conduct oversight. We think that Congress does not do nearly enough government oversight into how our taxpayers' dollars are being spent. We also have government shut-down protection so that, if for some reason we have this brinksmanship which has been common around here, we do not hold hostage government workers and shut down the government. We keep things going with an automatic continuing resolution. We also have very important spending caps which we have been talking about on discretionary and entitlement spending. It will take two- thirds of a vote in Congress to break those spending caps. This is the real heart of this bill so that we do not violate our spending caps. Because all too often, we will pass a budget, we will set spending caps, lo and behold, a couple months go by, we break the spending caps. In this bill, it takes two-thirds of the vote in the House and Senate to break those spending caps. We also protect ourselves from the point of order so we here in this body, unlike those in the other body who can have this power, we can raise points of order if they try to waive points of the Budget Act so that House Members can also play a role in enforcing the budget act. We also make sure we amend the Byrd Rule so we do not have temporary tax cuts. That was an arcane rule that occurred that is now giving us the largest tax increase we will ever see if we fail to make these tax cuts permanent. We also try and clean up this omnibus appropriation problem so we do not bundle all these big bills that we have at the end of the cycle. For instance, last year 7 appropriations bills bundled into one bill. Each of us on the floor had one vote up or down on half of the discretionary spending in the Federal Government. We also have very important spending control provisions. We talked about some of these. Discretionary caps, having the ability to save money when you bring amendments to the floor to stop wasteful spending. Having the ability to make sure that we can give the President the power to take bad, wasteful spending out of the budget. We also have an amendment that did pass already which is a commission to look at all of our Federal programs with respect to our earned entitlements, but also have a sunset in law of our programs on a rotating basis so that Congress actually does its oversight to see if the programs we have in our Federal Government are really meeting the spirit of the original intent of the law or whether they are really serving our constituents and serving our taxpayers so that we can make sure that no wasteful spending continues in this government. The problem we have basically is that our budget process is not a clean process. It is not a functional process. It is not honest. It is not transparent, and we want to make it so. We want to pass a budget and stick to a budget. We want to make sure that the American people really see how their money is being spent, and we want to make sure that those of us who want to see wasteless spending go away have the tools in which we can do that. That is what we are trying to accomplish with this bill. What we simply want is the ability to treat our constituents' money like it ought to be treated. It is their money. That is what we are trying to do. It is a very big bill and project. We have 102 cosponsors. I urge passage of this substitute amendment.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for yielding me this time. And I would like to say to the last speaker the hand was reached out on an amendment and the last speaker took the hand and that is why he and I have an amendment on the floor today on a very important item. So while all the minority's amendments were not made in order, there are a couple of amendments that were bipartisan that he and I have. And I hope that he does not count among the silly amendments the one that he and I have.

Mr. RYAN of Wisconsin. I yield to the gentleman from Texas.

Mr. RYAN of Wisconsin. Mr. Speaker, reclaiming my time, I appreciate the clarification. Mr. Speaker, let me frame what this is all about. What are we doing here today? What we are trying to accomplish here today is to clean up this silly budget process we have here in Washington. All of us have different ideas on how to fix this system. There are some differences in philosophies. We heard the gentleman talking about the PAYGO, their version of PAYGO, our version of PAYGO, that the basis of that philosophical difference is we do not believe fiscal discipline in Washington should come from tax increases. We believe fiscal discipline in Washington should come from spending cuts. And when we have the PAYGO system, much like what we have had in the past, history already shows that it puts a bias in the law for tax increases, not spending cuts. So what we want to accomplish, because we believe this, we want the discipline, we want the inertia, we want the pressure to be on controlling spending, not raising taxes. There is the big philosophy difference. But going down the road of the system we have here in Washington, Mr. Speaker, I would argue that we have this thing in place since 1974; and since 1974, Washington has had a horrible record of getting its handle on our budgets, when Republicans ran things and when Democrats ran things. For a while in the 1990s, we did a pretty good job, but since then we have not; and I would argue that. We are doing well in many years, but when we look at a system, for example, that allows some appropriations to come to the floor, say, adding $50 million for a rain forest museum in Coraville, Iowa, and if we want to come to this floor and pass an amendment so that we can do so on behalf of our taxpayer constituents to say I do not think we should pay $50 million for a rain forest museum in Coraville, Iowa, I have an amendment to strike that proposal. We could pass that amendment. But by the rules of this institution from the 1974 Budget Act, that $50 million would have to be re-spent somewhere else in the Federal Government. It could not be saved. That is ridiculous. That is just one example of how crazy this budget system is that we have today. Another crazy example of these rules is when we pass budgets, and we really work hard on passing these budget resolutions, as soon as we pass these budget resolutions, they amount to nothing more than mere guidelines. They are not actual, enforceable budgets. They do not take the force of law. What we propose today, through an amendment and through a couple of substitutes, is that when we actually pass a budget here, it means something. We stick to it. We enforce it. It is honest. It is going to work. It is going to happen. That is not what happens today. So we want to have a budget process that is done at the beginning of the budget process where the President signs it into law, and because the budget becomes law, it therefore is enforceable so that we can make sure we stick to the budget, that we plan the finances of this country so that we can factor in all the things we need to think about: the level of taxation, the level of debt, the deficits, getting ready for the baby boomer retirement, all of those things so that when we actually pass a budget, it works and it is enforceable. These are not really crazy ideas. These are commonsense ideas to bring common sense to a budget system that is broken. I would challenge anyone to come to the floor and argue on behalf of this current budget system to say that this is the epitome of common sense, that this thing works right as it should. We have not changed this system since 1974. It is high time we changed it. We are going to have a lot of amendments to try to do that. We are going to have some big substitute votes on big bills to do that. This is the product of a collaborative work. It is a product of Democrats and Republicans. It is a product that needs to come to this floor. It is a product that needs to pass into law so that we bring common sense back to our budget process.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, I want to repeat a couple things said in the past. If a small business makes $1 million, what does that mean? That means they are making money and hiring people. Two-thirds of our jobs in America come from small businesses. Two-thirds of all those who file in the top bracket are small businesses. In this new rate structure being proposed, this new tax increase, 75 percent of those people are small business people. Why would we want to tax the recovery of this economy at this time? What we accomplished in the last tax bill was finally lowering the tax rate on small businesses down to a level large corporations pay. Remember, Mr. Speaker, that before the July tax cuts, we were charging small business owners higher tax rates than we charged the largest corporations in America, like Exxon or IBM or General Motors. What this bill will do is do that again. It will increase taxes on small businesses and make small businesses pay higher tax rates than the largest corporations in America. Why would we want to reintroduce that injustice back into the Tax Code? We want to keep low tax rates on small businesses. That is who are creating jobs right now. Two-thirds of our jobs today come from small businesses. This big tax increase on small businesses is not the way to go. We want small businesses making money. This is a tax on their income that they reinvest in their businesses. More importantly, this proposal adds $130 billion to our deficit over the next 10 years. It is fiscally irresponsible, taxing small business and spending more money. Adding to the deficits is what has given us this hole we are trying to dig out of in the first place.

Mr. RYAN of Wisconsin. Mr. Speaker, two-thirds of all those who file their taxes in the top bracket are people who report small business income, subchapter S corporations, limited liability corporations. Seventy-five percent of all those in this new tax bracket covered in this bill are those who report small business income. Small businesses do not pay taxes as corporations; they pay taxes as people. So we are not talking about tax increases on millionaires who are hanging out on yachts. We are talking about tax increases on people who are running businesses. They have 25 employees, they have 50 employees, they have 100 employees, they have two employees, they have five employees. The point is, these small businesses, the engine of economic growth, the job creator of this economy, pay their taxes on the individual rate; and these are the people whose taxes are being increased under this proposal.

Mr. RYAN of Wisconsin. Mr. Speaker, my friend and I, we get along very well personally when the mikes are not on; but I just have to say, that is not what this proposal says. This proposal says ``reduction in tax cuts for taxpayers with incomes above $1 million,'' period, end of story. The committee figures out how to do the rest of it. The point is, if businesses are becoming successful, that means they are going to start hiring people again. We do not want to raise their taxes

Mr. RYAN of Wisconsin. I yield to the gentleman from Iowa.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Chairman, I just want to comment on a couple other aspects of this amendment that I think are very important. This amendment really dovetails well with another amendment that is coming, which is breaking it into five simple categories so that we do not have these stalemates we have every year in Congress between the other Chamber and the White House. What we want to do is make the budget amendment easier to achieve in the beginning of the process. Also what this does is it has emergency spending protection so that we save for emergencies ahead of time, so that we have a rainy day fund to prepare for these kinds of emergencies. We also clean up the definition of emergencies in this amendment. Far too often in this body, we designate things that really do not pass the smell test as to what are emergencies. We want to have real emergencies being funded under the emergency spending reserve fund, not nonemergencies. That is why we think we need to clean up that rule that allows Congress to designate things like a summit house on top of Pikes Peak an emergency. So this bill makes it easier to get a budget agreement, cleans up our emergency spending designation and helps us set money aside so we can prepare for these inevitable emergencies that occur every year Congress spends this money.