FISCAL ISSUES RAISED BY PRESIDENT BUSH IN HIS ADDRESS TO CONGRESS
(House of Representatives - February 28, 2001)
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. SHERMAN) is recognized for 5 minutes.
Mr. SHERMAN. Mr. Speaker, I would like to address some of the fiscal issues raised by the President when he spoke in this Hall scarcely 12 or 13 hours ago.
First, we are told that a 4 percent increase in the budget for domestic programs is sufficient and represents a genuine increase in those programs. Keep in mind, Mr. Speaker, our population is growing faster than 1 percent a year. Inflation is greater than 3 percent. Accordingly, a 4 percent nominal increase in expenditure is actually a real cut in the benefits that can be provided by a government program.
For example, Mr. Speaker, if our goal was to provide one pencil for every schoolchild in America, we would need to provide more than a 4 percent increase in that budget, because the price of pencils is likely to go up over 3 percent, and the number of students is likely to increase by more than 1 percent.
Mr. Speaker, we were told, I think correctly, that we cannot continue year after year to increase expenditure by 8 percent, even nominally by 8 percent, but a 4 percent increase when not adjusted for population or inflation represents an actual cut.
Mr. Speaker, we were given a tax cut proposal in which almost half of the benefits go to the richest 1 percent of Americans, those with the highest income, a group of individuals who have, on average, $900,000 of income every year. Certainly we can do better in targeting the tax cut.
We have been told that repealing the estate tax will not have an adverse impact on charity because, when people make charitable contributions, they are not influenced by the tax law but instead are influenced only by their desire to help the charity.
Our President yesterday exploded that argument that has been made on this floor by many Republican Members when he stated that ``By allowing an income tax deduction for those who do not itemize, we will encourage as much as $14 billion of charitable giving.''
So our President asks us to imagine a person of modest means putting $5 in the collection plate; that a person who does not even itemize their deductions somehow will be motivated to put more money in the collection plate if we change our tax law, but that an individual leaving $5 million to a university to have a building named after them will not be influenced by the repeal of the estate tax.
Nothing could be further from the truth. Trust me, I was a tax professional for nearly 15 years. I never got asked, ``Should I put $5 in the collection plate or $6? But I venture to say there are very few $5 million gifts that are not influenced by the estate and income tax law.
Then we were asked by the President to imagine a waitress with two kids earning just $25,000, and we were told this was the reason we should adopt the President's tax cut. Keep in mind, his tax cut would increase her income by only 2 percent. That is as stingy as a 25-cent tip.
But just to the point, that $25,000 waitress example was a carefully selected anomaly designed to disguise what the Bush tax proposal really does. Keep in mind, there are many waitresses who make only $20,000 a year, and under the President's proposal they get nothing, not even a 1 cent insult tip left on the table.
If we want to design a tax cut to benefit that image that was painted for us so cleverly yesterday of someone who is busing tables or waiting on tables making $25 $20,000, $25,000 and trying to support a couple of kids, we need to adopt a completely different approach to the tax cut.
Mr. Speaker, we need estate tax relief, but we need estate tax relief that is designed not to gut the estate tax as a source of revenue, but rather, something that will make sure that the estate tax falls only on 1 percent of the estates, meaning 99 percent of Americans would not have to worry about that tax.
That would still allow us to generate the vast majority of revenue that is generated by that tax, and then we could afford to provide real tax relief to waitresses making $25,000 or even $20,000.
