Pat Toomey

Mr. TOOMEY

Mr. TOOMEY. If I could reclaim my time for a moment on that point, as the gentleman from Arizona and my other colleagues know very well, the bill that we passed in the House contained a measure to expand and extend unemployment benefits and even health care benefits through the States. It was $12 billion. This is probably very appropriate. It is probably an appropriate and necessary thing to do, but we ought to recognize it does not have anything to do with economic stimulus. That is a different thing. As the gentleman from Arizona pointed out quite rightly and others have, too, the people who have lost their jobs that I talk to, that I know of, they do not want to know how long can I stay out of work, they want to know how quickly can I get back to work. That is why while it is appropriate to make sure that there is an unemployment system that is going to be there to help people get a transition to regain their job, the most important thing is that they get that job back quickly.

Mr. TOOMEY. I think that is correct.

Mr. TOOMEY. That is exactly right. Reclaiming my time for just a moment, when the President, President Kennedy at the time, made that observation, he was correct. He initiated a round of tax cuts that generated this prosperity. It is interesting that you pointed out, quite rightly, that lowering taxes really only works when taxes are excessively high. If we had extremely low taxes right now and an appropriate level of government spending, then I do not think we would be advocating for even further tax reductions. But right now we are at a record high. The Federal Government has not consumed as large a share of our total economic output as it does today since 1944.

Mr. TOOMEY. Ironically, their inaction can guarantee a longer period of time when people are out of work while they have not done anything to help even those people. It is absolutely unacceptable. I would be happy to yield to the gentleman from Arizona.

Mr. TOOMEY. That is absolutely another way to describe it. Another way that I think about it is there is this barrier between buyers and sellers, between consumers and producers. The barrier is the cost imposed by government. It is not only taxes. It is regulation, it is tariffs, it is litigation that is encouraged or tolerated by the government, but taxes are the biggest part of it. That is why it is not just a coincidence that when we lower taxes, we see economic growth. It is because when we lower taxes, we allow more economic transactions and economic activity to take place. That is why every time in our history, as the gentleman from Wisconsin pointed out, that we have had a significant tax reduction, what have we seen without fail? Prosperity, economic growth, people getting back to work, people getting a raise, people having more disposable income. It helps all Americans. I have on this chart a couple of examples from our history. We have really only had a few major, sweeping, across-the-board tax relief bills enacted in our Nation's history and it was in the 20th century. We have really had three prior to what we did earlier this year. The 1920s was the first. That is not on this board, but the 1920 tax cuts initiated by Treasury Secretary Mellon ushered in an era of unbelievable prosperity in the twenties. That era started to wane when taxes were raised and a trade war began. But let us look at some other tax cuts. In the 1960s, President Kennedy had the good sense to realize that you lower taxes, you generate more economic output. Sure enough in the 1960s, gross domestic product grew by 50 percent. Staggering growth. The 1980s was the other great tax relief act of the 20th century. President Reagan pushed through a tax reduction. What resulted? Nothing less than the longest peacetime expansion in our history. And, as the gentleman from Michigan pointed out as we all know, a tremendous increase in revenue to the Federal Government. There were deficits in the eighties, no question about it. It was not because we cut taxes. Cutting taxes caused revenue to double. It was because spending was out of control. Spending tripled. That was the problem that we had in the 1980s. But further to that point or any other point he chooses to bring up, I would like to recognize the gentleman from Arizona (Mr. Shadegg), the chairman of the Republican Study Committee, the distinguished member of the Committee on Commerce and the Committee on Financial Services.

Mr. TOOMEY. Mr. Speaker, the gentleman's points are very well taken. Regarding class warfare, the gentleman from North Carolina made the argument that lowering the capital gains burden helps low-income and moderate-income people. It is a job-creation engine. It has nothing to do with class warfare. As we move on in this discussion, I want to just touch on an issue that is raised sometimes. I think sometimes it is not obvious to see the connection between lowering taxes and economic growth. Why does that happen? How does it really generate economic growth? One of the ways that I think is useful to think about this is the fact that there are a lot of transactions that could be occurring in our economy, transactions on the margin, one more home being sold, one more car being built, and a few more services being provided. These are transactions that are not happening because buyer and seller cannot agree on a price. There are not enough buyers who can quite afford the price that the seller needs, or there are not enough sellers who can lower their price to the point that the consumer can afford. So there is this inability to get the transaction done. What is one of the biggest costs to every producer, every potential seller of goods and services? It is their tax burden. What is one of the biggest costs of every consumer that takes away their disposable income? It is the tax burden. So if you lower taxes on producers and you lower taxes on consumers, producers are suddenly able to pass on the lower costs in the form of lower prices and potential buyers have more disposable income so they can afford more, and all of a sudden you have these transactions that start occurring that cannot occur today. If that just happens on the margin with just a small percentage, it can have a huge impact on economic growth. I think the gentleman from Wisconsin wanted to comment on that.

Mr. TOOMEY. Mr. Speaker, the gentleman has touched on something which is worth discussing. I have heard people suggest that if we cut the capital gains tax rate, it might be bad for the stock market. People might think the capital gain is lower so I should sell stock now while I enjoy a lower tax rate. I have heard people suggest if we ever cut the capital gains rate, we could have a collapse in the stock market. That strikes me as exactly the opposite of the likely effect. First of all, we have cut capital gains tax rates before, and the stock market has gone up. We cannot ignore the fact that we have historical evidence on this. We have seen this happen before. And the reason why, if we were to lower the capital gains rate tomorrow, we would immediately increase the value of every asset in America. Because what is the value of an asset? It is its ability to appreciate in value. If you diminish the amount that the government is going to take of that, it is worth more. So why would the stock market collapse when every company in America became more valuable? The gentleman points out if we cut the capital gains rate, in fact it would help the stock market. That is counterintuitive to some people, for the reason I just mentioned, but it is exactly right.

Mr. TOOMEY. Mr. Speaker, I thank the gentleman from Michigan (Mr. Hoekstra) for that observation on this particular provision in the bill which the House has passed, and the House has acted to try to lower the tax burden and get this economy moving again. It is our colleagues in the other body who refuse to do a thing about this, which I think is a disgrace given the level of unemployment we have. The gentleman's point is right; when a business has the opportunity through an incentive in the Tax Code to have greater depreciation or even expensing of a capital item, it benefits the workers who are able to increase their productivity and hold on to their job because that business remains competitive. The other folks that it helps are the consumers. Who do people think pay taxes, corporate taxes? Corporations pass those costs on to the consumer through the form of their prices. When we lower that burden, we lower the cost of doing business for that company. We enable them to hire more workers and lower their prices and benefit consumers and help accelerate transactions. This gets into another theme, but at this point I yield to the gentleman from Arizona (Mr. Flake). I thank the gentleman for coming here, and salute the gentleman for all of the great work he has been doing to help lower the tax break for American people.

Mr. TOOMEY. Mr. Speaker, reclaiming my time, I thank the gentleman from Wisconsin (Mr. Ryan), and I yield to the gentleman from North Carolina (Mr. Jones).

Mr. TOOMEY. Reclaiming my time for just a moment, the gentleman is pointing to and getting exactly right to the crux of the problem here. What we are talking about is the difference between massive government spending and private sector investment. I have had colleagues and I have constituents say, well, what difference does it really make, as long as somebody is doing the spending? If it is the government or the private sector, a dollar is a dollar, and the dollar does not really know who is spending it. Right? There is a huge difference for a lot of reasons, and I just want to touch on one. If we stop and think about it, we all know what drives government spending is politics. What drives government spending is the political system we have, and whose political bed gets feathered by some spending is a big part of what does it. But there is no market force driving political spending or government spending. There is no competition within government over this, whether it is the Department of Housing and Urban Development or any other Department. It does not have a competing Department down the road that it has to outperform. So, basically, the money just gets spent as politicians see fit. Whereas, in the market, it is a totally different mechanism. Consumers do not buy anything unless they think it is something worthwhile, something of value, something they want to have. Investors do not invest in anything unless they think it is a process, a business that is providing goods or services that people want. So we have a private sector mechanism that ensures that money goes to where it is needed and where it is wanted. And we have a public sector, a government system, that goes to where politicians want. And that is a big part of the reason why one is much more effective than the other. I will yield back to my colleague from Wisconsin, but I want to say one more thing quickly, because I think all three of us agree on this issue, which is that there is a huge amount of government spending which is absolutely critical. In fact, right now I think we all agree that we need more government spending on intelligence gathering, on defense, and on homeland security. We need to increase spending there. There is no question. That is something only the government can do, the government must do. But I think it argues for even more restraint in the other areas, especially when we know those other areas are not terribly effective. And did the gentleman from Wisconsin want to say something else?

Mr. TOOMEY. Mr. Speaker, reclaiming my time, I hope that we will be able to move on to the discussion that the gentleman from Wisconsin (Mr. Ryan) introduced, the idea, which is the historical fact, that when taxes are excessively high and they are lowered, we get economic prosperity and growth and new jobs. There is a reason why. I would like to discuss why that works and why it has historically worked. But before I do that, I yield to the gentleman from Michigan (Mr. Hoekstra).

Mr. TOOMEY. I thank the gentleman from North Carolina for mentioning the capital gains tax, and our colleague from Wisconsin may want to comment on especially the job creation aspect of lowering this tax, but if I could follow up on one quick point. The gentleman's point is exactly right. There just cannot be any question that the capital gains tax is really an irrational tax. In the first place, it is a punishment for saving and investing. Now, what society really wants to punish people for saving their money and investing it in the future? But that is what this tax does. I think it is particularly unfair, especially to the those folks the gentleman is referring to, in the sense that if someone makes an investment in a stock, in a small business, in a piece of property, anything one can invest in, and that investment grows in value, but only maybe by the rate of inflation, a couple of percentage points here and there, but just pretty much tracks inflation, so that the individual has not really made any money, they have only kept pace with the general price structure of our economy, well, after 10 or 20 years, that is a significant amount of increase in the nominal value of that asset because inflation adds up to a lot over 10 or 20 years. But the individual has not really made a dime in terms of any real gains. All that person has done is kept pace. Yet, if they sell that asset, what do we do here in Washington? We attribute the entire increase to a capital gain and we take up to 20 percent of that, despite the fact that the person has truly made no money. That strikes me as egregiously unfair. But maybe our colleague, the gentleman from Wisconsin (Mr. Ryan), would like to share his thoughts on it.

Mr. TOOMEY. Mr. Speaker, today I would like to engage in a discussion about the economic situation we find ourselves in, the state of our economy and what it is that we are going to do about it, what we have done about it in the House, what needs to be done by the other body. I would like to begin by just summarizing, reflecting briefly on something I hope we all understand, I hope we all appreciate, and that is the very difficult situation that we find ourselves in today. The fact is our economy had been in a slowdown mode. We had been slowing down the rate of growth of our economic output for over a year prior to September 11, 2001, and certainly since September 11 the downturn has accelerated. It has gotten to the point now where we know by various experts, government and private sector economists, that we no longer have economic growth that we can talk about. Today we are experiencing economic contraction. The consensus is almost a half, four-tenths of a percent, anyway, of actual economic contraction in the third quarter of this year. There is very little reason to believe that the fourth quarter is going to turn around and show growth. Many believe that we started the contraction back in March. In any case, in all likelihood we are in a recession right now, and we are going to be in a recession for some time going forward. Now, of course, one of the very most unfortunate, tragic things about a recession is the job losses that always result. Unemployment now is at a 5-year high, about 5.4 percent. Our Nation has lost literally hundreds of thousands of jobs since September 11 alone, when this downturn accelerated. Consumer confidence fell for the fifth straight month. It is now at its lowest level since 1994. The bottom line is, the translation of all of that is people are out of work. People who want to be working and productive and supporting their families have lost their jobs and they are wondering how they will get back to work. Layoffs are impacting just about everywhere in our country and, as best as I can gather, certainly hitting my district. Good solid companies that have provided great jobs for years have had to lay off workers, and I know they do that reluctantly. And I hope those openings will come back, those jobs will come back. But for now, folks have been laid off at Kraft, at Rodale, at Lanco, at Pabst, Agere, all across my district. Good companies. Jobs have been lost. Nationally there are all kinds of job losses, Gateway, IBM. Boeing announced huge losses of jobs. Solid companies laying off thousands of workers, hundreds of thousands of workers all across the country. So the question is what are we doing about this? What are we doing about this in the House? What have we already done about it in the House? What are our colleagues in the other body going to do about it, if anything? I think we have got a responsibility to create an environment that maximizes the opportunity for our constituents to get back to work, for this economy to pick up steam, for companies to begin to hire back the people that they have laid off. I think most of my colleagues share that view that that is our responsibility. I think one of things that divides us, one of the points on which we disagree, unfortunately, is how do you go about that. How do you best encourage that economic growth? And to simplify things a bit, but I do not think it is unfair, I think it is a reasonable simplification of the debate that has been carried on in this town, there are two schools of thought, maybe two major philosophies about how we ought to go about getting this economy moving again and getting people back to work. One is the school that says the way you do this is government spending, big government spending program, new program on all kinds of things helps to get the economy going again. Some would describe that as priming the pump. There are lots of other expressions, but some think that is the way we ought to go. That has been proposed. Especially it had been advocated by the leadership of the other Chamber as the main thrust of how we ought to go forward here. There are others who believe that there is an alternative that is a better, more effective, more constructive way to get the economy moving again, and that is major immediate tax relief, and that that would be much more effective both in the near term and in the long term than even more government spending. So let us take a look at these alternatives. Let us discuss this a little bit. On the side of those who favor more government spending, it seems that that is the traditional approach taken by those who hold the Keynesian economic view, the demand-side model for how an economy works. And one of the ways to look at the premise behind that philosophy is that, in a way, it holds the view that the slowdown, an economic slowdown, is generally caused when a demand for goods and services is just too low; there is just not enough demand. That is what it is called the demand-side model sometimes. But this is a Keynesian idea. And if the demand is too low, then the way to solve the problem is to increase the demand. And the easiest way to increase demand is to flood the economy with money, so that people can go out and spend it. That creates demand. And we hear people talking about getting money out in the people's pockets as a way to get the economy going again. Of course, for many who subscribe to this theory, they would, rather than have individuals have more money in their pockets to spend, they would rather just have the government do the spending. Because the government is part of the demand; government expenditure contributes to the total demand in the economy. So a lot of folks will say, just short-circuit the whole process, go right to a big government spending program, and that will get the economy going again. Now, it is interesting to note that this, of course, is a convenient theory. It can be used to justify and rationalize some other objectives that some people might have. For instance, some people would like to redistribute income, to a very large degree, in our society. They like to take money from some people and give it to others, and they like to be in control of that process. Well, you can justify that a little bit better if you argue that this is all good for the economy too. And so often this becomes a convenient theory for those who really have ulterior motives. But without getting into motives, because I do not want to dwell on that, I want to look at the question of whether this is really the best thing for the economy. Is a wave of government spending going to increase the demand? Is that going to solve our problem? Well, I suspect not, and I suspect not for several reasons, the most simple of which is that this model, this way of viewing the economy, just has not held up very well. The bottom line is I think that there has never been a strong correlation. I do not think anyone has been able to prove a correlation, much less a causation, between increases in government spending and economic growth and prosperity. The correlation does not exist. So that ought to give us some real pause. Now, there are specific periods in times in history where we can look at this and examine what has happened and what has not happened. One case that comes to mind is the whole stagflation of the 1970s. Now, under the Keynesian model, high inflation and high unemployment are supposed to be impossible to occur at the same time. You could have one or the other, but you would not have both. And the reason is because of the idea that inflation is a manifestation of excess demand. If there is too much demand for products and goods and services, then everybody must be working to provide those products and services so unemployment would be very low. Of course, we know in the 1970s that was not true. Unemployment was quite high. Now, conversely, if you have high unemployment, that supposedly is a manifestation of inadequate demand. And if there is inadequate demand, then there is nobody out there bidding up prices for things, or certainly not a sufficient amount of that, and so we would have very low inflation. If we have high unemployment, we would have to have low inflation. That was not true. As I said, we had both. I think the real reason we had both is we had a weak dollar, which gave us inflation, and we had way excessive taxes, which caused an economic slowdown and huge unemployment. In any case, whatever you think the cause was, the Keynesian model cannot explain what we know happened as a matter of historical fact in the 1970s. And there are other periods of time when we have seen huge government spending increases that have not resulted in economic growth. The chart that I have here to my left just touches on a few periods. I will cite the very first here. In the 1930s, government spending tripled; massive government spending beginning in the 1930s. But yet during that very same decade, gross domestic product fell by 27 percent in the first 5 years; and by 1940, 10 years later, unemployment had doubled. Obviously, government spending did not solve the problem in the 1930s. Probably because a lack of government spending was not the cause of the problem we had in the 1930s, but rather protectionist barriers to trade and an increase in taxes probably had a lot more to do with the problems that we had in the 1930s. It is interesting to take a look at what has happened in recent years. From 1992 to 2001, government spending has grown by 41 percent, and at the end of that period we have entered into a recession here. So, clearly, there is not a strong correlation between increases in government spending and an economic slowdown. But when we think about it, it makes sense. If government spending were all it took to get out of a recession, we would never have one. We would just ratchet up spending a little bit and sail along on our merry way. As this evidence points out, we certainly would not be facing a slowdown now, because in recent years we have had a massive increase in government spending. As soon as the surpluses arrived, we lost the fiscal discipline that got us to that point in the first place, spending took off; and yet here we find ourselves in a recession. There is another great example that I want to touch on, and then I will recognize some of my colleagues who have come to join me in this discussion, but the Japanese economy is a fascinating example of how this whole Keynesian demand-side, government-spending approach has not worked. Beginning in 1991, the Japanese proceeded with this approach to dealing with a recession. Fact is they were 10 years into a terrible recession despite excessive waves of massive government spending. Arguably, they have had 10 different stimulus packages, largely based on public infrastructure spending, massive government spending, which has added up to trillions and trillions of yen, a quarter of a trillion U.S. dollars equivalent, a huge percentage of their economy, and where are they today? They are mired in a serious recession that continues well into its 10th year. So, clearly, excessive government spending, an increase in government spending, is not the solution. But I will pause at this point and recognize my esteemed colleague, the gentleman from North Carolina (Mr. Jones), for any comments he may want to share with us.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, there are several problems that I have with the substitute that is offered by my distinguished colleague from New York, but I want to touch on two of them in particular. One is the fact that the substitute clearly removes from the committee bill several vital tort reform measures which are in the base bill; and they are in the base bill for a simple reason, for a variety of reasons, but mainly to ensure that in the event that harm is done in a terrorist attack, we want to see a greater share of the payment to the victims actually go to the victims and not a huge windfall going to trial lawyers. That is a big part of what this is about. That is a serious flaw, but there is another one that I think may be even a bigger flaw in this bill and that is the issue that was raised by my colleague, the distinguished gentleman from Alabama. There is no question, it is very clear, the substitute does impose a new Federal mandate on business, large and small business, every business, specifically by requiring that every commercial insurance policy carry this terrorism provision whether or not the insured wants to buy this provision. It is true that it only applies to commercial policies. You could choose not to buy a commercial policy; but as we all know as a practical matter, you cannot be in business in America today without having a commercial insurance policy. So it really is a universal mandate in that sense. Think about this. At a time when thousands of businesses are losing money, forced to lay off literally hundreds of thousands of workers in the last several months, layoffs that are continuing today, this substitute, if it were adopted, would force potentially unlimited increases in costs in doing business for every business in America. It says you have got to go out and buy terrorism insurance coverage regardless of what kind of business you are in, regardless of where you are located, regardless of whether or not you perceive yourself to have any risks, and regardless of what it costs. This can only result in more job losses. I do not know how many folks here have actually gone through the experience of taking their entire life savings, remortgaging their house, borrowing money from family and friends and risking it all to pursue the dream of owning their own business, whether that is a little coffee shop on Tilghman Street in Allentown or a dry cleaner on Chestnut Street in Emmaus or a bookstore in downtown Bethlehem, but I know what that is all about. I have been through that. I think we all know people who have been through that. These are the people, the people who are willing to take that huge risk to risk everything they have to launch that small business. These are the people and their employees that I am concerned about, and I am concerned about the adverse effect that this provision will have on them. These are the people that are keeping our economy going. These small businesses are the ones that are creating the few new jobs we are creating in our economy. They are creating so many opportunities for so many people. The cards are stacked already against the entrepreneur starting a new business. It is the nature of a new business to have a very risky period. We have still a crushing tax burden on Americans. We have too much regulation. My argument is let us not stack the deck further against the people who are creating new businesses, running small businesses, creating opportunity. Let us not impose this new costly mandate on them. Reject the substitute and support the underlying bill.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, I rise today to share a poem entitled ``Prayer For America'' written by Miss Ruth Werner, a constituent of mine who lives in Bangor, Pennsylvania. Miss Werner was inspired to pen this poem following the September 11th attacks. I was touched when she gave me this poem and thought that my colleagues in the House of Representatives, the Senate and President Bush would enjoy it as well. Prayer for America Dear Heavenly Father, We pray for peace on earth. Let it begin with us. With you as our Father we are all made one. We are all brothers and sisters. Let us walk in each other in all 50 states and throughout the world with President Bush, Vice President Cheney and all the Leaders. With children and adults, male and female, with families and people who are lonely, with rich and poor, with people who have homes and the homeless; With all kinds of people with different careers and with the unemployed; You love all your children of the world whether red, yellow, black or white. We are all precious in your sight because you love everyone with an unconditional love; always ready to forgive. Today God let this be our prayer because we know that United We Stand Divided We Fall. Let us stand for peace for America, a most beautiful land. And let us keep this as one nation under you with liberty and justice for all. It makes us proud to be an American to be among the red, white and blue as we are just passing through, but most importantly we are honored to be Christians who believe in you and will live with you and our loved ones in our heavenly home forever. God we know you will bless the USA today and always. In your name we pray, AMEN I commend Miss Werner for her heartfelt words and for her dedication to God and country.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, hundreds of thousands of Americans are losing jobs. We need an economic stimulus package now that will lower the Federal tax burden and, thereby, increase incentives to work, to save, to invest, to start new small businesses, to hire new workers. We need to create an environment of opportunity, to help people get back to work, because the people that I represent of the Lehigh Valley and the Upper Perkiomen Valleys of Pennsylvania, they do not want to know how long they can stay out of work; they want to know how quickly they can get back to work. The President has proposed and the House has passed a meaningful, tax-lowering, back-to-work economic stimulus package. And what is the other Chamber doing? Instead of a real economic stimulus package, the majority party in the other Chamber has proposed a package mostly consisting of unproductive government spending. Unbelievably, less than 30 percent of the Senate Democrats' stimulus bill, so-called stimulus bill, is dedicated to actually increasing any incentives for new job creation. Instead, there is all manner of new spending. There is an expansion of authority for Indian tribes to issue tax exempt private bonds, there are increases in subsidies to bison ranchers and pumpkin growers, there is a tax credit proposed for using poultry waste to produce electricity. Mr. Speaker, this is not economic stimulus; it is pork barrel spending. We need real economic stimulus.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, it is true; there are hundreds, there are thousands, of good and decent people who are losing their jobs across the Lehigh Valley that I represent, certainly across Pennsylvania and across America. These losses are hitting our families, our neighbors, our friends. No one is immune to this risk. The fact is, the people that I represent do not want to know how long they can stay out of work; they want to know how quickly they can get back to work. And it is our responsibility to have policy that helps to create an environment of opportunity so they can get back to work, because that is what they want, and that means lowering the huge tax barrier that stands between employers and employees, creating that opportunity to create those new jobs. In this House we passed an economic stimulus bill that moves in that direction of creating more job opportunities, but the Democratic majority leader in the other chamber refuses to bring a bill to the floor. That chamber insists on dickering and dithering and bickering and political squabbling. They are talking about a so-called stimulus bill that will do nothing but line the pork-barrel politics and try to help out their own political futures and do nothing for creating jobs. It is long past time to have that type of squabbling. It time to lower the tax barrier and give people the opportunity to get back to work.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, people across America, across Pennsylvania, across the Lehigh Valley and Upper Macungie, the valleys that I represent, are losing their jobs in very disturbing numbers. In October, we had a record high numbers of Americans who lost their jobs. The actual loss of jobs or the threat of a loss of jobs is hitting all of us: our families, our neighbors, our friends. And it is about time that Congress responded. We need an economic stimulus package that is going to lower the record-high tax burden that is impeding our economic growth and create the incentives to bring people back to work because the people who are losing their jobs across Pennsylvania, they do not want to know how long they can stay out of work; they want to know how quickly they can get back to work. Mr. Speaker, it is our responsibility to help create an environment where that is possible. The President has called for an economic stimulus package. This Chamber has passed one, but the Democratic majority in the other Chamber insists on bickering and wasting time when Americans need the opportunity to get back to work. Some on the other side would like to load this up with government spending, which may be nice pork barrel politics in their district, but it will not get Americans back to work. I urge the other Chamber to adopt an economic stimulus package, and do it now.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, I rise in support of this resolution today. The cowardly attack on innocent Americans yesterday is the worst assault on our country and our freedom in our Nation's history. I think we all feel this attack very personally, and we will all keep the victims and their families in our prayers. As many have said, this was an attack on freedom itself, and we cannot allow the evil, cowardly terrorists responsible to win. We must take whatever measures, commit whatever resources necessary to find the people responsible for this atrocity and bring them to justice, and we must also hold fully accountable any country or group which aided or harbored these terrorists in any way whatsoever. Finally, Mr. Speaker, we must take a new approach to fighting terrorism, a proactive, aggressive, and comprehensive approach. It is no longer sufficient to treat these terrorists as ordinary criminals, waiting for them to act and then attempting to apprehend them and convict them of crimes. We know several large, sophisticated, determined terrorist organizations who have declared war against the United States and have demonstrated the ability and intent to carry out acts of terrorism against America, including yesterday's atrocities. These barbarians are worse than criminals. They are enemies in a war that they have launched unprovoked against the United States. It is time for this Congress, our Federal Government, our Nation to engage in this war against these organizations to find them, to destroy them, and to ensure that attacks like yesterday's never happen again.

Mr. TOOMEY

Mr. TOOMEY. Mr. Chairman, I thank the gentleman from California for yielding time. I would like to commend the sponsors of this amendment. I introduced bills both in the previous Congress and in this Congress that are substantially the same as this amendment, so I am grateful that we are going to have a chance to include this in legislation that is moving. Why do we need medical malpractice reform? It is simple. Medical malpractice awards are out of control. Medical malpractice awards are draining millions of dollars from health care and putting it into courtrooms and trial lawyers. They are contributing significantly to the staggering increase in health care costs. They are forcing doctors to practice defensive medicine to protect themselves against, very often, meritless claims, and these awards are forcing some doctors to leave their specialties altogether. My State of Pennsylvania has been particularly hard hit by what is now a legal system run amok. We rank second in the Nation in medical malpractice judgments. We suffer through jury verdicts that are amongst the highest, twice the level of California, which has this kind of medical malpractice reform. As a result, doctors in my State often pay premiums that are twice the level of California, often over $100,000 a year just for insurance; good doctors who have never harmed a soul, who have never been negligent. Mr. Chairman, this is long overdue. This provision applies to all health care providers; it provides reasonable parameters on awards. It eliminates the insidious application of joint and several liability; and that, in layman terms, simply means that defendants will be required to pay judgments in proportion to their responsibility, not in proportion to the thickness of their wallet. Finally, Mr. Chairman, many of us are concerned that what we do here in Washington respect the rights of the States. This amendment does exactly that. This amendment says that if there is a State that has a medical malpractice law on the books, then that State law will prevail. If a State has no law whatsoever, then this amendment would prevail. If a State has no law and subsequently chooses to pass a law, then this would become irrelevant in that State; the State law would then once again prevail. This respects States' rights. This is going to help restore funding to health care instead of to trial lawyers. I urge my colleagues to support this amendment.

Mr. TOOMEY

Mr. TOOMEY. Mr. Speaker, I would like to thank the gentlewoman from Ohio for yielding me this time, especially in light of the fact that I am rising in opposition to this rule. I would point out that it is a very reluctant opposition. This is the first time that I have opposed a rule since I have been in Congress. The fact is in recent years we have been spending too much money. The result of that is that we are in grave danger, as a result of the spending increases we have had in recent years and the economic downturn, that within a few short years we could be back to raiding Medicare and raiding Social Security. We made a promise we would not do that. This rule makes that problem worse. It makes that danger worse. Let me explain why. This bill, as we know, adds $1.3 billion in funding for FEMA. Above and beyond the $1.4 billion ordinary funding for FEMA, there is 1.3 billion additional FEMA dollars that have an emergency designation. The significance of the emergency designation is that that money does not have to be offset. So that means it is in addition to the entire budget. It is above and beyond all that we are going to spend in 2002. House rules forbid putting an emergency designation into a nonemergency bill. This rule breaks that rule. It waives that provision. Why was that done, again I ask? It was to make sure that this did not have to be offset. That is what is wrong with this. Those of us who are going to oppose this rule do not do so because we necessarily oppose the FEMA funding. What we oppose is the fact that we are not going to be able to strike the emergency designation and require this to be offset; and as a result, we are going to increase the risk that we may, in fact, end up raiding Medicare or Social Security at some time in the near future. I would also point out the President did not request this. Normally when the President requests an emergency, he sends a letter requesting emergency funding and designates a specific event. The President did not do that. In fact, he issued a statement of administration policy. I will quote briefly. It says: ``The administration appreciates Congress' attentiveness to the needs of FEMA. The administration is not, however, prepared to commit to a specific level of contingent emergency appropriations at this time.'' That is exactly what this does. It puts in an extra $1.3 billion. I urge my Democratic colleagues who object to not being able to offer an amendment, do not vote against the previous question only to vote for the rule. You ought to vote against the rule if you do not agree with this rule. I urge my Republican colleagues likewise.

Mr. TOOMEY. Mr. Speaker, I demand a recorded vote.

Mr. TOOMEY

Mr. TOOMEY. Mr. Chairman, I offer an amendment. The amendment has been printed in House Report 107-105 and made in order by House Resolution 171.

Mr. TOOMEY. Mr. Chairman, I yield myself the balance of my time.

Mr. TOOMEY. Mr. Chairman, let me remind my colleagues and put this in some context, we have a $1,900 billion budget, plus or minus. We are contemplating $1 billion of the $1,900 billion that is going to be spent. Let us keep in mind also that the reduction is all in discretionary spending; it is not in mandatory spending. Veteran benefits is mandatory spending. That would not be touched by this. Let us bear in mind also that the amendment gives the administration the authority to have some flexibility, so they could choose to cut some more in some places and not cut at all in other places. Let us also, please, keep in mind we are talking about 1/3 of 1 percent of this Federal budget, meaning that of all of the discretionary spending, 99.67 percent, would go forward. If our colleagues believe it is important to fund FEMA, and I heard many people come down here and say how important this is, this is the amendment that does this. We restore a net of $384 million out of $389 million to FEMA. If our colleagues believe it is important to have some spending discipline, this is the amendment that does that. It says we will offset new spending with reductions. If our colleagues believe in honest offsets and debt reduction, I urge support of this amendment.