FLOOR STATEMENT OF WAYS & MEANS RANKING MEMBER JIM MCCRERY
H.R. 6049, THE RENEWABLE ENERGY AND JOB CREATION ACT OF 2008
MAY 21, 2008
(REMARKS AS DELIVERED)

Mr. Speaker, I yield myself such time as I may consume.

I rise in opposition to this legislation before us today and urge all of my colleagues to vote against it today.

Most critically, the bill claims to be a package of tax extenders but fails to deal with the biggest and most pressing extender in the code, the AMT patch- the Alternative Minimum Tax patch.  This is a missed opportunity. We should have included it in this bill with the other expiring provisions in the code.

The Majority’s failure to extend this patch for 2008 would mean an additional 21 million middle-class individuals and families will be ensnared by the AMT.   As a result, affected families will pay an additional $61.5 billion in taxes for this year. 

This oversight- this neglect- is the single largest flaw in the bill.
 
The Majority, I am sure, will claim during today’s debate – just as they did during Committee mark-up -- that they will address the AMT before adjourning this year, just not now.  Surely our experience from 2007, when the AMT patch wasn’t enacted until the day after Christmas, suggests that we ought to begin acting on this now, and not just run down the shot clock. 

Mr. Speaker, it simply does not make sense to vote to extend dozens of tax provisions, some for several years, without also dealing with the biggest and most far-reaching expired provision, the AMT patch.

The bill also clings to the mistaken view that the House’s paygo rules require us to raise taxes in order to prevent tax increases.  I was pleased last year that when the House finally did pass the AMT patch, we recognized the foolishness of applying paygo to expiring tax provisions and I am disappointed that that bipartisan approach is not being followed here today.

Simply put, we shouldn’t have to “pay” to extend current law. This is not paying for a new tax cut in the main.  Most of this bill is paying to extend current law. As we stare at the prospect of a more than $3.5 trillion tax increase baked into budget by the Majority’s misguided paygo rules, I think it will become even more obvious in the years to come why Congress should not have to raise taxes to prevent a tax increase.
 
If the Majority was ever willing to offset tax provisions with spending cuts, I might view this a little differently, but this bill shows, once again, that the only tool the Majority has to meet its paygo requirements is the hammer of tax increases.  It is little wonder then, that to them every problem looks like a nail.

As I documented many times last year and during our Committee mark-up last week, Washington doesn’t have a revenue problem – we’re getting enough revenues, we are already collecting more taxes as a percentage of our GDP than the historical average of revenues coming in to Washington. That is not the problem.  The problem is spending. So how many times have we had paygo rules be adopted- and followed- in this house using spending cuts to pay for extending current tax law? Zero.

Mr. Speaker, the continued use of tax increases to pay for extending current law is unacceptable to this Ranking Member of the Ways and Means Committee and I hope will be objectionable to the majority of the members of this House.

In fact, this bill not only contains tax cuts, it actually does increase spending.  There are items in this bill that score as spending, expanding refundable tax credits and the New York Liberty Zone project.  Those score as spending.  So we’re increasing spending in this bill and we’re paying for that with tax increases.  In addition to those two provisions the bill contains numerous other new temporary and permanent provisions undermining the claim that the bill is merely extending current law.  Some of the new provisions might be meritorious, but a few of those deserve close examination. 

For example, some of my colleagues might be surprised to know that there is a nearly $1.6 billion special tax break for trial lawyers in this bill.  The provision overrides developing case law and lets lawyers using certain contingency fee arrangements to deduct their expenses sooner.  CBO and Joint Tax Committee score this as costing the taxpayers $1.6 billion over the next ten years.

This provision was not the subject of any hearings or examination by the Committee, and yet it’s in this bill today.  I would hope that before we make such a significant change in tax law, costing tax payers $1.6 billion dollars, all going to one, very narrow set of people in this country- trial lawyers, that we would want to have a hearing on that and flesh it out—to see if maybe it could be crafted better, or whether in fact it’s of any value at all to the country.

The bill also revisits the “green pork” tax credit bonds that were much discussed during the energy debate in 2007.  These are the same bond proceeds that could be used for all sorts of dubious projects, like subsidizing hybrid snowmobiles in Aspen or the construction of a new Wal-Mart with a couple of solar panels out front. 

State and local governments using the bond proceeds don’t even have to certify that the projects will reduce fossil fuel consumption or greenhouse gas emissions. Unfortunately, the majority rejected a sensible fix for this oversight when this was offered last year. 

 We know how this is going to end.   It will end with the passage of an AMT patch without offsets, and probably many extenders being approved without tax increases. More than forty Senators have signed a letter pledging to oppose a package such as the one before us today.  And even if it somehow squeaked through the Senate, the President has indicated he would veto this bill.

Mr. Speaker it is unfortunate that the majority has chosen against moving a bill on expiring provisions that could have had bipartisan support and instead opted for the measure before us.

Given that its fate has already been sealed – this will not become law – I am comforted to know that we will have another chance to consider this legislation this year.  I hope it is sooner rather than later so that we are not here in December, once again, scrambling to deal with these issues.

We can do better than what we have before us today.  Let’s get rid of this, start over and bring a good bill back.

I reserve the balance of my time.

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