Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to take this opportunity to talk a little bit about the work of the Subcommittee on Basic Research, a subcommittee I am honored to chair. This subcommittee has had a busy and productive 2 years. In the 106th Congress, we have held a total of 25 oversight hearings, field briefings, markups, on a range of important and timely issues. In addition, we have passed through the House two bills authorizing fire and earthquake programs under this subcommittee's jurisdiction, and oversight for the National Science Foundation, NSF, whose funding we authorize. I believe the work we do in the subcommittee is truly unique. In our hearings on information technology, than on technology, education research, plant genomics, and biotechnology, for example, we have been able to glimpse the future, and through our oversight and authorization bills I hope we are able to shape that future, as well. I am proud of our record and the colleguiality and bipartisanship on the subcommittee. I look forward to continuing that effort in the next session. I would like to take this opportunity to thank the staff of the subcommittee who work behind the scenes to get things done. Stephen Eule, Peter Harsha, Mark Harrington, Sharon Hayes, and Steve Howell have made my job easier. I thank them for their good ideas and hard work. I also compliment and congratulate our subcommittee ranking member, the gentlewoman from Texas (Ms. Eddie Bernice Johnson) and her chief of staff, Jim Wilson.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I am very concerned about what it looks like might happen to the FICA taxes, the payroll taxes, if we move ahead with Vice-President Gore's proposal for Social Security. This first chart reflects what the FICA taxes are now, 15.3 percent of what a worker makes. Then what is going to happen in terms of when we start running out of money? There is not enough money in the Medicare surplus as early as 2006. Then if we continue with the same program without doing anything else, without getting a better return on some of this money that is coming into the system in Social Security Trust Fund and the Medicare Trust Fund, then to keep the same benefits that we have promised continuing we are going to, the taxes would have to go up. Either taxes would have to go up or benefits drastically reduced. We are not going to reduce those benefits. But, also, let us make some changes now so that we do not have to let the taxes go up, as we see on this chart, to 22.41 percent versus 27.96 percent. If Vice President Gore's Medicare prescription drug program goes into effect, then those taxes will have to go up to 47 percent of what one makes. Look, it is some time ahead, so one can say somebody else could worry about it. But these are our kids; these are our grandkids that are going to have to pay that kind of tax. Let us make these kinds of changes now. Let me just reemphasize how serious this tax is today on the payroll deduction tax. Seventy-eight percent, 78 percent of American workers now pay more in the FICA tax for Social Security and Medicare than they do their income tax. We cannot allow these taxes to go up. We cannot simply say, look, we have got to put Social Security first or Medicare first and say, look, we are going to add these benefits. That is what the Vice President does. Somehow the American people have got to look seriously at the consequences of simply the attractiveness of saying we are going to increase benefits without making some changes in the program to get a better return on the money. The better return, as suggested by Governor Bush, is to start investing some of that money. Right now, the average return for one's Social Security money that is paid in in taxes is a real return of 2 percent. That is 7 percent less than the average return on equities. Let us balance it. Let us not do all equities. It is going to be limited stock investments. There is going to be safe investments that a person can invest. But it is going to be in their name, their account. If they die, instead of losing everything, their heirs get it. Let me show my colleagues this third chart. It simply says, no new taxes. Let us not force ourselves into a situation where the payroll deduction has to go up and we have to increase taxes. We have got to have a strong resolution that we are simply not going to cavalierly do what is politically attractive today to get votes today and leave the problem and an increased obligation of higher taxes to our kids and our grandkids. Again, if we do nothing, if we go with a Gore plan, the 15.3 percent that we are paying in payroll deductions go up to the high of 27.96 percent. If we go with their prescription drug program that says, look, here is prescription drugs that taxpayers are somehow, some way, some time are going to have to pay for, then we end up with a payroll tax that goes as high as 47 percent. Let us look at a program where one gets better investment from some of that money going in, where government cannot mess around with those benefits by letting at least part of that payroll tax equivalent go into personal investments. Let us not mess around with the trust fund. Let us keep the trust fund growing. But let us take some of this surplus on-budget money and use it to make this kind of transition that is going to keep probably America's most successful, maybe America's most important, program continuing and keep it solvent.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to take this opportunity to talk a little bit about our work in the Subcommittee on Basic Research, a subcommittee I am honored to Chair. This Subcommittee has had a busy and productive two years. In the 106th Congress, we have held a total of 25 oversight hearings, field briefings, and mark-ups on a range of important and timely issues. In addition, we have passed through the House two bills authorizing fire and earthquake programs under this Subcommittee's jurisdiction, and these may yet be passed into law in the final days of the session. I believe the work we do in this Subcommittee truly is unique. In our hearings on information technology, nanotechnology, education research, plant genomics, and biotechnology, for example, we have been able to glimpse the future. And through our oversight and our authorization bills, I hope that we are able to help shape that future, as well. I am proud of our record of collegiality and bipartisanship on the Subcommittee, and I look forward to continuing that tradition in the next Congress. I would also like to this opportunity to thank the staff of the Subcommittee, who work behind the scenes to get things done. Stephen Eule, Peter Harsha, Mark Harrington, Sharon Hayes, and Steve Howell have made my job easier, and I thank them for all their good ideas and hard work. I congratulate all the members of the Subcommittee especially Ranking Member Eddie Bernice Johnson and her chief of staff Jim Wilsort.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, this is good news, I think, for people that are concerned with Social Security. Social Security is one of America's most important programs. I think we have missed a great opportunity in the last 8 years not to develop the kind of policy changes in Social Security that will for sure keep it solvent. Now it is part of the great debate, and I think it is important that we all understand a little better how the Social Security program works. Social Security benefits are a guaranteed act; and the fact is, is that there is going not to be enough money coming in from the payroll tax to pay benefits without some changes. The big change is a better return on the investments. When Franklin Roosevelt created the Social Security program over 6 decades ago, he wanted it to feature a private sector component to build retirement income. Social Security was supposed to be one leg of a three-legged stool to support retirees. It was supposed to go hand in hand with personal savings and private pension plans. Of course, when it passed through the Senate, it is interesting. The Senate on two votes back in 1935 said that it had to be optional investments so individuals could invest their own money. Provisions were put into that law so that certain States and counties would be allowed to have alternative private investment plans, and now we are seeing counties in Texas and around the country that opted out of Social Security getting four or five, six, 10 times as much benefits from their pension retirement plans that they own as opposed to what Social Security would pay. The biggest risk is doing nothing at all in Social Security. One thing I am concerned about is President Clinton and Vice President Gore have suggested that we simply add huge, giant IOUs to the Social Security trust fund. The problem with that is that the full faith and credit of this country is good, but the way we pay back Treasury notes now is simply to borrow more money. If we are going to borrow $20 trillion, it is going to tremendously change the economics of this country. Social Security has a total unfunded liability of over $20 trillion. The Social Security trust fund contains nothing but IOUs. That means you have to either borrow the money to pay it back, increase taxes to pay it back, or you have to reduce benefits. We have to have two things very clear: No increase in taxes, and no reduction in benefits for existing or near-term retirees. To keep paying the promised Social Security benefits, the payroll tax will have to be increased at least 50 percent of total income or benefits will have to be cut by one-third. Neither of those options are good. In conclusion, this is the demonstrated problem of Social Security. We are in a short range up to for the next 12 to 15 years of a little more money coming in in the Social Security payroll tax than is needed to pay benefits. But then look what happens in the out years. Twenty trillion, in today's dollars, but in those dollars that are going to have to be paid out over and above what is coming in from the Social Security tax 50 or 60 years from now, it is going to be 120 trillion of those inflated future year dollars. Huge problems. It needs to be dealt with now. We have to get a better return on the investment. The six principles of saving Social Security that I and Senator Rod Grams have come up with are: Protect the current and future beneficiaries; allow freedom of choice; preserve the safety net; make Americans better off, not worse off; create a fully funded system; and no increase in taxes. Right now the average American worker pays more in the payroll FICA tax than in the income tax. Seventy-eight percent of American workers pay more in the FICA tax than they do the income tax. Let us not increase taxes on them again. Let us do something now, so we do not pass this burden on to our kids and grandkids.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I think a lot of Americans listened to the debate last night. A lot of us have been working on Social Security for a long time, certainly our Speaker pro tempore, the gentleman from Florida (Mr. Shaw), myself, the gentleman from Texas (Mr. Stenholm), the gentleman from Arizona (Mr. Kolbe), and many others have been looking at ways to keep this most important program continuing to be solvent. A lot of people depend on it. I was very upset last night with some of the comments on Social Security. The Vice President has got a plan that I think does not solve the huge problem of keeping Social Security solvent. Let me just go through this chart briefly. The biggest risk is doing nothing at all. Social Security has a total unfunded liability of over $20 trillion. The Social Security Trust Fund contains nothing but IOUs. That is what the Vice President is suggesting, that we add another giant IOU and somehow come up with the money. How are we going to come up with the money? The last point. To keep paying program Social Security benefits, the payroll tax will have to be increased to at least 50 percent of total income; 50 percent of total income for our FICA taxes or benefits will have to be cut by one-third. We cannot continue to go on doing nothing. We have to make some program changes if we are going to keep this important program solvent.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to invite my colleagues, the press, all those that might be interested in a press briefing that we are having at 11:30 this morning in room 1302 of the Longworth. That is 11:30, 1302, on fear profiteering. Do we select our science and those stories that are going to justify what policy we want to pass and the decisions we want to make, or do we base our policy on the kind of real science that is going to make this country and the people of the world better off? I have been doing a study on seeds of opportunity, which is in the biotechnology. In Europe, they have brought that scientific research to a halt. What is going to happen in this country, as we look at the alar in apples; as we look at organic foods? We need to make sure we base our policy on real science. Mr. Speaker, I submit the agenda on the 11:30 briefing on fear profiteers for the Record. Introduction: Steve Milloy, publisher of www.junkscience.com Speaking Order: Nick Smith. Fred Smith, Competitive Enterprise Institute. Bonner Cohen, Lexington Institute, Editor of Fear Profiteers. Alex Avery, Hudson Institute.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, the American taxpayer is making a considerable investment in research through the spending of Congress and the President. Part of the research that I am particularly interested in is the basic plant genome research. Current sequencing efforts on the Arabidopsis plant has allowed us to understand the plant gene and our ability to modify plants, with the potential of tremendously helping mankind throughout the world. We now have the ability to select one or two or a few genes, whose characteristics have been determined, and incorporate those genes into another plant to improve the nutrient digestibility, to improve the vitamins, to improve the needed minerals, to create the desease immunization values of that particular food product. We are now faced with what I call fear profiteers that are spreading the word of fear to stymie research. My message this morning is that we have to rely on scientific information as we pursue our scientific endeavors and not allow emotion and fear profiteers to determine the destiny of research and scientific achievement in this country. Mr. Speaker, the payoffs from plant genome research will depend in large part on our ability to capture and apply the benefits from it. Congress should support the goals of the plant genome research. The National Plant Genome Initiative is a well-managed public asset that represents a wise use of taxpayer dollars. Current sequencing efforts on Arabidopsis thaliana have improved immeasurably our understanding of the genomics of a typical flowering plant. The shift in emphasis from gene sequencing to functional genomics is the logical next step that should provide the intellectual basis for new varieties of commercially-important crops and other plants. NSF, the U.S. Department of Agriculture (USDA), and the other participants in the plant genome program have done a credible job of making the results of the research it funds available to other researchers and the private sector. Partnerships among universities participating in the program, agricultural experiment stations, and private-sector companies also have been developed. These efforts should be encouraged further, and more formal structures concentrating research efforts in plant genomics, plant breeding, and agricultural extension should be considered to attract increased private sector participation and get new varieties to the field sooner. To that end, I would hope that the plant genome and gene expression centers pilot program authorized in H.R. 3500, through its matching-funds requirement, will be used by NSF to encourage greater participation of other federal agencies, particularly USDA, and the private sector in accelerating the development of enhanced food crops, particularly those that provide nutritional or health benefits to consumers, and for alternative uses of agricultural crops. Please join me this Thursday at a press and staff briefing on biotechnology and ``Fear Profiteers.'' A timely discussion of the importance of sound science in policy approaches to biotechnology, other areas of science and case studies of organizations and businesses that sow health scares to reap membership and/or monetary gain. September 21, 2000, 11:30-12:30 p.m., 1302 Longworth Building, Representative Nick Smith (R-MI); Fred Smith, Competitive Enterprise Institute; Bonner Cohen, Ph.D., Lexington Institute; Alex Avery, Hudson Institute; Emceed by Steve Milloy, Publisher of junkscience.com.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, encouraging savings and investment and not leaving our kids and our grandkids with a huge mortgage is a reasonable combination in this piece of legislation. On September 13, the President said, in regard to paying down the debt, and I quote from the New York Times, ``Whether we can do it this year or not depends upon what the various spending commitments are.'' He may have very well said, ``I have other plans for this money.'' Today, this House makes spending commitments under this bill. We are committed to paying down the debt. Maybe we could do more. I would have liked to have done more. But the problem is that we have to make a commitment to do it, otherwise the propensity to spend by the President and by this Congress is too great. Let us pass this legislation to help assure we don't simply increase spending. The President sent us the Democrat budget proposal last spring that increased spending $100 billion more than could be paid for with projected revenues. That meant that without increased taxes and increased revenues, it would have used the Social Security and the Medicaid trust fund surpluses. Let us pass this bill and move ahead. Let us make sure saving and investment is easier for the American people and we do not leave our kids with a bigger mortgage.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. I thank the gentleman for yielding. Madam Speaker, this is a good start, but it should be more. We are really talking about a $70 billion surplus in excess of Social Security and Medicare. Ninety percent of that $70 billion, is $63 billion that should be dedicated to debt reduction in addition to the Medicare and Social Security surplus. Rather, we are taking 90 percent of the unified budget surplus which allows an additional $20 billion more spending. Ninety percent of the $70 billion is $63 billion or only $7 billion increased spending. The reason such tax cuts as the marriage penalty tax should be on the table, is that it takes increased spending off the table. The President has said he sees little room for additional debt paydown in 2001. Let me quote the New York Times of September 13th: ``Mr. Clinton told Republicans he viewed paying down the debt as a priority, but said he was not sure it could be done in the 2001 fiscal budget, which is set to begin on Oct. 1. `Whether we can do it this year or not depends upon what the various spending commitments are,' Mr. Clinton said.'' We can do better than this. Talking about paying off the debt by 2012 is misleading. It means that we do not solve the Social Security problem because it is the Social Security surplus that is being used to pay down that portion of the total debt held by the public. We need that money to do what is necessary to save Social Security and Medicare.

Mr. SMITH of Michigan. I thank the gentleman for yielding me this time. Madam Speaker, we are really talking about a $70 billion surplus in excess of Social Security and Medicare. It should be 90 percent of that $70 billion, or $63 billion rather, that we are taking 90 percent of the on- and off-budget surplus, which is a start; but it means more spending. The President has said he sees probably there is no room for using any excess to pay down the debt this year other than the debt held by the public. We have got to go further than this. Talking about paying down the debt held by the public by 2012 means that we do not solve Social Security. We do not use that money to do what is important in saving Social Security and Medicare.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, on Friday, September 22, 2000, David Katz will conduct his final performance as music director and principal conductor of the Adrian Symphony Orchestra and OPERA! Lenawee. It is with great pleasure that I congratulate him on his past twelve seasons of service. Under his leadership the Adrian Symphony has grown into one of Michigan's top five orchestras, has built its own professional opera company, OPERA! Lenawee, hosted Itzhak Perlman as the most famous of dozens of exceptional solo artists, been cheered in dozens of venues in four countries and two states, and has made us more proud of our orchestra and more excited about great music than we ever thought possible. David Katz worked to break down the barriers which often separate classical music and opera from many people, instituting educational programs for both adults and children. His programming of concerts continually challenge the musicians, as well as the audience, through presentation of a broad variety of music and through increasing the breadth and scope of programming offered, adding opera, ballet and chamber music to the Adrian Symphony Orchestra during his tenure. David's devotion and determination to both the Adrian Symphony Orchestra and his community is to be applauded and I am honored to recognize him and wish him continued success in his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman from New York (Mr. Reynolds) for yielding me this time. Mr. Speaker, I rise in support of this conference report and in support of the rule. I want to commend the gentleman from California (Mr. Rohrabacher), chairman and also the ranking member of the Subcommittee on Space and Aeronautics. I also commend the gentleman from Wisconsin (Mr. Sensenbrenner) and the ranking member, the gentleman from Texas (Mr. Hall), for navigating this important authorization through all the necessary hurdles and coming to the floor today with a good bill. I am pleased that an amendment assisting our farmers and our ranchers I offered during the original consideration of this legislation remains in this final package. The amendment directs the Administrator of NASA to discover and catalog the kind of remote sensing information, commercial and otherwise, that might help farmers and ranchers determine potential crop shortages and surpluses and ultimately make decisions about how they might best use their land. Our ability to anticipate crop production around the world by using remote sensing technologies has advanced tremendously over the last 30 years. We are now able to estimate yields of some of the major crops, within plus or minus 10 percent 60 days before harvest. That means often within 30 days after planting, in southern climates we can predict expected over- and under-production before planting starts in some northern areas. By keeping track of what is happening on the ground, with planting date, mosture, etc. we can predict what is happening to that crop. Other farmers can adjust their plantings. We can help stop shortages and excess and maximize profit. We can make sure that there is not hunger because of the lack of knowledge on the part of farmers to plant the kind of acreage necessary to accommodate shortages in other parts of the world. Once again, I am pleased that this provision has been retained. I am pleased to stand in support of this rule and this legislation.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Michigan. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, again I thank both the chairman and the ranking member for the time to protest some of my concerns. Again, nobody else in the Nation, or very few, can have a pension system that is going broke and then reduce the contribution, reduce the taxes that are going in by the employee and the employer, and increase benefits, increase benefits for widows, widowers, and also reduce the age to 60 that these individual workers are eligible for that retirement. Railroad workers work very hard, they put in a lot of time and a lot of hours, but we cannot afford this $33 billion cost bill.

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, may I ask of the chairman and yield for the answer, when it came out of the Committee on Ways and Means, my understanding was that there was a 4.3 cent tax on diesel fuel for railroads. Is that reduction still in the bill?

Mr. SMITH of Michigan. I yield to the gentleman from Pennsylvania.

Mr. SMITH of Michigan. Is the gentleman saying, Mr. Speaker, that the 4.3 cents was not in the bill in the Committee on Ways and Means?

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I think the question before us is should we delve into using taxpayer money to, if you will, bail out a private pension retirement plan for railroad workers. Let me just quote some of the facts developed by our Committee on the Budget, four reasons that Members should oppose this bill. Number one may be the most important as far as the American taxpayers are concerned. The Committee on the Budget says it will cost $33 billion of taxpayer money over the next 10 years. This bill increases benefits and reduces contributions to the Railroad Retirement System by $7 billion over the next 10 years. In addition, it allows the Railroad Retirement System to cash in $15 billion in government bonds now held by the railroad industry pension fund. These actions will reduce the budget surplus, thereby increasing the Government's interest costs by $13 billion over that time period. The net cost to U.S. taxpayers, including the offset, therefore, is $33 billion. Again, with all of the pension plans in this country, many of them facing difficulty and insolvency as life spans continue to increase, it reminds me of some of the problems with Social Security. Social Security has some of the exact same problems as the railroad retirement pension plan. Let me give the second reason suggested by the Committee on the Budget staff. This bill maintains a special subsidy available to no other industry. Under current law, income taxes paid by railroad retirees on their retirement benefits are transferred to the Railroad Retirement System. Therefore, they do not pay the taxes. This subsidy, which is available to no other industry, will cost taxpayers more than $5 billion. Number three, it allows the Railroad Retirement System to really raid Social Security. I ask my colleagues to consider the fact that Social Security is becoming insolvent, it is insolvent, and this bill in effect takes some of that Social Security solvency additionally away. This bill allows the transfer of funds from the railroad retirement Social Security equivalent benefit account to the Social Security retirement trust fund. This transfer will result in Social Security funds being used to pay railroad retirement benefits. Number four, I think it sets a bad precedent for Social Security reform. Instead of creating personal accounts with individual ownership and control over these accounts, this bill creates a government- appointed board to invest in the stock market on a collective basis. Under collective investments, there is no way to guarantee younger workers that they would receive any of the higher returns earned by the Government with their investment. So, number one, we are bailing out to the tune of $33 billion, according to the staff of the Committee on the Budget; number two, we are having government go into the business of investing those funds, and I think both precedents are dangerous as we look at Social Security. Let me quote some information from the Congressional Research Service: ``This Railroad Retirement and Survivors Improvement Act,'' as it is called, ``proposes a number of substantive changes.'' Number one, the bill would increase benefits for widows and widowers of railroad employees. It would lower the minimum age at which workers with 30 years of employment are eligible for those benefits. So we reduce the requirement for benefits while we ask the American taxpayer to bail them out, using some Social Security money. Something is wrong with this legislation as a precedent, as a way to solve a problem that the railroad retirees have. How many private pension funds do we really want to go into? Government got mixed up in it. It is quasi- governmental. Mr. Speaker, at this time, so I will have some time to react to other statements, 10 minutes out of the 40 minutes is given against the bill, which I think reflects some of the positive votes as it moved through two separate committees, I will reserve the balance of my time. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Michigan. Reclaiming my time, Mr. Speaker, since I am short on time, let me just emphasize again that a bill of this magnitude should not be going through on suspension. It should have a full debate, because the consequences, if it is not $33 billion if we do not include the interest, then at least look at the CBO scoring that says $20 billion. This legislation has been sort of promoted as a bipartisan agreement with overwhelming support by both rail management and rail labor. Why have they agreed so easily? I think the answer is because American taxpayers are footing the bill. Again, CBO has scored the cost at $20 billion. Let me go through some of the facts. The Railroad Retirement System already has an unfunded liability of $39.7 billion. It is a pension fund in trouble. So with three retirees in the railroad industry, with three retirees for every worker, why would we go to the extent of not only reducing the taxes and contributions they pay in, but increasing the benefits they get out? So we increase the benefits, we reduce the age for eligibility. Here again it seems to me that it only can be this kind of solution if we reach into the pockets of the American taxpayers. The industry would need to increase contributions from 21 percent of wages to 31 percent of wages for the next 30 years to cover this shortfall. Accurate accounting shows that the industry has received at least $85 billion more in benefits than it has paid in contributions. The rail industry has for many years, of course, received special government subsidies that are available to no other industry. Just to mention one, under current law, income taxes paid by rail retirees do not go to the U.S. Treasury. They are instead transferred to the Railroad Retirement System, costing taxpayers over $5 billion. The government also currently pays the cost of Amtrak's social security contributions, costing taxpayers another $150 million a year. This kind of cost, this kind of implication, of precedent, should be going through this Chamber with a full debate and not through a special suspension calendar. Let me just briefly comment in my closing minutes on specifically what the bill does. It repeals a 26.5 cent per hour employee contribution to supplemental annuities, it reduces employer contributions from the current 16.1 percent to 14.2 percent, and it expands benefits for widows and widowers. It reduces the vesting requirement from 10 to 5 years. It repeals the current gap on payment of earned benefits. Six, it reduces the minimum retirement age to 60 years old. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Michigan. Mr. Speaker, reclaiming my time, to help pay for it, it was my understanding when this bill went through the Committee on Ways and Means, they put a 4.3 cent tax on the diesel fuel used by railroads, and somehow in this clean bill it is no longer there. If the gentleman will continue to yield, oh, no, that has nothing to do with it, I would say to my good friend. It was several years ago as part of the deficit reduction package of 1993 that that tax was placed.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, in behalf of this House, we welcome the Honorable Bill Broomfield to this Chamber again, to his old Chamber. Bill helped me when he was first elected to office in 1957 when he first came in, and he helped me again in his last year in 1992. In 1957, my brother, who was a jet pilot, was killed in Asia. All of his personal effects had been lost coming back to Michigan. Chan's wife, Bonnie, and I went to Bill Broomfield. Bonnie is from Royal Oak. And so this new freshman Congressman pushed ahead, found Chan's personal effects and got them back to us. Again when I was first elected in 1992, I won a tough primary, did not have any final opposition in the general, and came to Bill Broomfield who had been a friend in between to help give me some guidance on learning to be a good Congressman. What struck me as significant is Bill said, ``Look, one of the things I try to do the best I can is responding honestly and quickly to mail coming in from constituents.'' At that time the Congressman had a turnaround time for 98 percent of his mail of 24 hours. So he had set a target. Do we not all wish we had a 24-hour turnaround time that we could give that kind of attention and dedication to mail? He did that. I have tried to achieve it. Here is a gentleman that has guided us through foreign policy decisions for his 36 years in the United States Congress, from the problems of Soviet invasion in Hungary, their invasion of Czechoslovakia, Nicaragua, the Persian Gulf, Eastern Europe, Iran, Iraq, the problems with North Korea. We should be consulting with him on a regular basis for our current international affairs. Bill Broomfield, again, congratulations. I am proud to be a cosponsor of this legislation.

Mr. SMITH of Michigan. Madam Speaker, in behalf of this House, we welcome the Honorable Bill Broomfield to this Chamber again, to his old stomping grounds. Bill helped me when he was first elected to office in 1957, in his first year, and he helped me again in his last year in 1992. In 1957, my brother, Chan, who was a jet pilot, was killed in Asia. All of his personal effects had been lost coming back to Michigan. Chan's wife, Bonnie, who was from Royal Oak, and I went to Bill Broomfield. And so this new freshman Congressman pushed ahead, found Chan's personal effects and got them back to us. Again when I was first elected in 1992, I went to Bill Broomfield who had been a friend to help give me some guidance on learning to be a good Congressman. What struck me as significant is Bill said, ``Look, one of the things I try to do the best I can is responding honestly and quickly to mail coming in from constituents.'' At that time the Congressman had a turnaround time for 98 percent of his mail of 24 hours. So he had set a target and achieved it. Do we not all wish we had the ability to respond to constituent inquiries in a 24-hour turnaround time; that we could give that kind of attention and dedication to mail? He did that. I have tried to follow his advice and example. Here is a gentleman that has guided us through foreign policy decisions for his 36 years in the United States Congress, from the problems of Soviet invasion in Hungary, their invasion of Czechoslovakia, the problems in Nicaragua, the Persian Gulf, Eastern Europe, Iran, Iraq, the problems with North Korea. Bill is still an excellent consultant for our current international challenges. Bill Broomfield, again, congratulations. I am proud to be a cosponsor of this legislation honoring you.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, over the last month, I held many town hall meetings, meetings with constituents across the 7th Congressional District of Michigan. Two priority issues that seem to come from those meetings as a message to me to bring back to Washington was making sure we save Social Security, not only a concern of the seniors but a concern of their kids and their grandkids. Secondly was somehow doing a better job to improve education to make sure every child has the opportunity to learn to their maximum potential. So I challenge myself and I challenge my colleagues to give education a top priority, to get the money out of Washington and into the district. In terms of Social Security, we must have provisions that make sure that that generation that works so hard, that did so much, that sacrificed, that saved string, that saved tinfoil are not deprived of the Social Security that they have been promised by this Congress. Let us make that effort. In the last 7\1/2\ years, this administration has failed to give us the leadership to solve those problems.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, over the last month, I held many town hall meetings, and forums with constituents across the 7th Congressional District of Michigan. Two priority issues that came up in most every meeting was Education and Social Security. Making sure we save Social Security, was not only a concern of the seniors but a concern of younger workers. Parents were concerned about the K through 12 education for their kids; somehow doing a better job to improve education to make sure every child has the opportunity to learn to their maximum potential. So I challenge myself and I challenge my colleagues to give education a top priority, to get the money out of Washington and into the class room so educators and parents can decide how best to use it. In terms of Social Security, we must have provisions that make sure that that generation that worked so hard, that did so much, that sacrificed, that saved string, that bundled tinfoil for the war effort are not deprived of the Social Security that they were promised. Let us make that effort. In the last 7\1/2\ years, this administration has failed to give us the leadership to solve those problems. Let us do better in the future.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, for two reasons, what the chairman says is correct. The increased tax on Social Security benefits passed in 1993 was for the purpose of reducing deficit spending, even though the money of the tax was earmarked for Medicare. As far as its justification for deficit reduction, it is appropriate that we repeal this tax increase. We are now experiencing huge surpluses and make up that money to Medicare. Therefore, to continue to justify this tax for deficit reduction is not appropriate. Let me offer another reason why it is appropriate to reduce this tax. Higher-income retirees tend to be workers who paid in more Social Security taxes than lower-wage earners; and because the Social Security system is so progressive, higher-income wage earners already receive a much smaller percentage of what they paid in in terms of the benefits they receive. It is not fair in a relative sense that they be additionally penalized by this tax. Now, it is my opinion that eventually, as we lower the tax rate overall, as suggested by Governor Bush, we should tax Social Security benefits the way we tax private pensions. We now tax private pensions, but we only tax the value of the employer's contribution plus total interest as a percentage of the whole. We do not tax the recipient's contribution. That amount in a typical Social Security pension received from high wage earners is 15 percent. In contrast, an average low wage earner retiree has already received in benefits about seven times his or her after-tax contribution. So our goal should be to lower the tax overall and to treat those higher-income recipients that are already in a progressive state at a fair tax level related to the lower tax level.