Mr. PAUL. Mr. Speaker, I was the original cosponsor of 2373, the Education Savings Act. That bill has changed. It is now 2646. I can support with reluctance this rule coming to the floor, but because of the changes that have occurred, I can no longer support this bill. There is nobody in this House that is a stronger supporter of credits and benefits and return of funds to parents to raise their children and give them a choice.

There will be Members on this floor today who will oppose this bill because they cannot stand the idea of returning funds to parents and giving them a choice, but I am opposing it because this is a net tax increase. This is costing, and for that reason I can no longer support this bill.

Mr. Speaker, I think the best way to give individuals and families a true choice is to give them tax credit. Unfortunately, this is a small step in the right direction, which I could have supported if we would not have had to raise taxes. We are closing a so-called loophole, a benefit provided to the businessmen and the individuals who benefit from the way their vacation time is deducted. The courts ruled in favor of the taxpayer and here we are undermining it.

According to the Joint Committee on Taxation, our own committee here in the Congress has estimated that what we do here today will raise taxes $1.8 billion over the next 2 years. With the most optimistic projections on how many people will use these savings accounts, they are claiming there will only be a return of $600 million. So in the next 2 years, if this goes through, we will raise taxes three times as much as we are so-called returning.

This is a net tax increase. It is not the way to go. We should do one thing to provide for these tax credits, one and only, and that is cut spending. Do my colleagues realize that if we would cut the National Endowment for the Arts by less than 3 percent we would have enough funds for this? That is all that we would need to do. But instead we go and we reverse the procedure of the courts which finally ruled in favor of the taxpayers, and now we are going to force them to reassess and revamp and make sure that those individuals on how they are handling their vacation time that more taxes will be paid.

Mr. Speaker, it is estimated the most optimistic estimates on this bill in order to project what might happen is that 12 million people would use these accounts, the maximum amount of $2,500 for 5 years. It means $120 billion would be stashed away. That is very unlikely, but I do predict that the taxes will go up, unfortunately.

• Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I oppose the Education Savings Act for Public and Private Schools--H.R. 2646--despite having been an original cosponsor of the Parents and Student Savings Account Act--PLUS A+--bill and having been quite active in seeking support for the original bill. I remain a strong supporter of education IRA's, which are a good first step toward restoring parental control of education by ensuring parents can devote more of their resources to their children's education. However, this bill also raises taxes on businesses and I cannot vote for a bill that raises taxes, no matter what other salutary provisions are in the legislation.

• I certainly support the provisions allowing parents to contribute up to $2,500 a year to education savings accounts without having to pay taxes on the interest earned by that account. This provision expands parental control of education, the key to true education reform as well as one of the hallmarks of a free society. Today the right of parents to educate their children as they see fit is increasingly eroded by the excessive tax burden imposed on America's families by Congress. Congress then rubs salt in the wounds of America's hardworking, taxpaying parents by using their tax dollars to fund an unconstitutional education bureaucracy that all too often uses its illegitimate authority over education to undermine the values of these same parents.

• In fact, one of my objections to this bill is that it does not go nearly far enough in returning education authority to the parents. This is largely because the deposit to an education IRA must consist of after-tax dollars. Mr. Speaker, education IRA's would be so much more beneficial if parents could make their deposits with pretax dollars. Furthermore, allowing contributions to be made from pretax dollars would provide a greater incentive for citizens to contribute to education IRA's for other underprivileged children.

• Furthermore, education IRA's are not the most effective means of returning education resources to the American people. A much more effective way of promoting parental choice in education is through education tax credits, such as those contained in H.R. 1816, the Family Education Freedom Act, which provides a tax credit of up to $3,000 for elementary and secondary expenses incurred in educating a child at private, parochial, or home schools. Tax credits allow parents to get back the money they spent on education, in fact, large tax credits will remove large numbers of families from the tax roles.

• I would still support this bill as a good first--albeit small--step toward restoring parental control of education if it did not offset the so-called cost to Government--revenue loss--by alterning the rules by which businesses are taxed on employee vacation benefits. While I support efforts to ensure that tax cuts do not increase the budget deficit, the offset should come from cuts in wasteful, unconstitutional Government programs, such as foreign aid and corporate welfare. Congress should give serious consideration to cutting unconstitutional programs such as Goals 2000 which run roughshod over the rights of parents to control their children's education, as a means of offsetting the revenue loss to the Treasury from this bill. A less than 3-percent cut in the NEA budget would provide more funds than needed for this return of tax dollars to families who seek choice in their children's educational needs.

• Mr. Speaker, we in Congress have no moral nor scientific means by which to determine which Americans are most deserving of tax cuts. Yet, this is precisely what Congress does when it raises taxes on some Americans to offset tax cuts for others. Rather than selecting some arbitrary means of choosing which Americans are more deserving of tax cuts, Congress should cut taxes for all Americans.

• Moreover, becasue we have no practical way of knowing how many Americans will take advantage of the education IRA's relative to those who will have their taxes raised by the offset in this bill, it is quite possible that H.R. 2646 is actually a backdoor tax increase. In fact, the Joint Committee on Taxation has estimated that this legislation will increase revenues to the Treasury by $1.8 billion over the next 2 years.

• It is a well-established fact that any increase in taxes on small businesses discourages job creation and, thus, increases unemployment. It is hard too see how discouraging job creation by raising taxes is consistent with the stated goal of H.R. 2646--helping America's families.

• Mr. Speaker, I would suggest that is this type of legislation--a backdoor tax increase masquerading as a tax cut--that is, in part, responsible for the widespread and ever growing disgust with this body.

• In conclusion, although the Education Savings Act for Public and Private Schools does take a small step toward restoring parental control of education, it also raises job-destroying taxes on business. Therefore, I cannot in good conscience support this bill. I urge my colleagues to join me in opposing this bill and instead support legislation that returns education resources to American parents by returning to them moneys saved by deep cuts in the Federal bureaucracy, nor by raising taxes on other Americans.

(Bulleted paragraphs were entered into record but not spoken because of time constraints.)