The video for this story is not available, but you can still read the transcript below.
No image

Tax Wars

Kwame Holman covers the congressional debate over extending the Bush administration's tax cuts.

Read the Full Transcript


    It's now my honor to sign the first broad tax relief in a generation.


    It still is considered President Bush's most significant legislative achievement. Last June, he made good on his top campaign promise and signed into law a major tax cut.


    It becomes reality because of the bipartisan leadership of the members of the United States Congress — some Democrats, many Republicans, who worked tirelessly and effectively to produce this important result.


    Indeed, small numbers of Democrats joined nearly all Congressional Republicans last year to approve the $1.3 trillion measure, which cut income tax rates across the board for ten years. But that ten-year limit on the tax cuts, required by a unique rule in the Senate, always irritated the bill's supporters.


    Mr. Speaker, today…


    Today, Republican leaders in the House made good on a promise of their own, to try remove the ten-year limit and make the tax cuts, in their word, "permanent."


    We've got to make the tax cuts we enacted last year permanent. You know, hard-working Americans and the Texans who live in my Congressional district were Downright angry when they heard that their taxes would increase in ten years. They think we lost our minds in Washington.


    But Democrats argued the country's fiscal outlook has deteriorated substantially in just the ten months since the tax cuts were enacted, and removing the time limit on them would be unwise.


    It was nonsense last June when the President and the Republicans argued that we could have a $1.5 trillion tax cut, and not raid Social Security and Medicare and Medicaid. And it's nonsense on stilts after September 11, after the deficits, after all that's happened, that they now want to permanently extend those tax breaks for the wealthiest 2%, because they are now going to permanently raid Medicare, permanently raid Social Security, permanently raid Medicaid, which provides nursing- home care for every person in America with Alzheimer's.


    Even Democrats who supported the tax cut bill last year said higher revenues would result from letting the tax cuts expire in ten years, and those funds may be vitally needed then.


    I voted for the President's tax cut last June, and I would be glad to extend that tax cut. And I hope we have the opportunity to do it sometime between now and 2010. But when we've gone from projections of $5.5 trillion in surplus Down to where we no longer have any surplus and we're projecting deficits, it seems fiscally irresponsible to propose today to extend that tax cut. I'm confident we'll be able to extend much of it, but fiscal conservatives will support a balanced budget first.


    But Republicans said if income tax rates revert to their original higher brackets in the year 2011, it would amount to the largest tax increase in history.


    Well, Mr. Speaker, a vote against this bill is a decision to bury the middle class beneath a wave of new taxes at the end of the decade. And if the Democrats vote no today, they are inflicting a rash of higher taxes on the American family. They will slice the child-care tax credit in half. It falls from $1,000 Down to $500 without permanent tax relief. They will revive the discriminatory marriage penalty that punishes families with a greater burden. They will resuscitate the hated death tax that's been stalking American farmers and small businesswomen all these years. Democrats who vote "no" are really saying "yes" to the largest single day tax increase in American history.


    House Democratic Leader Richard Gephardt closed the debate for his side with a warning that Republicans will pay a political price in the fall elections for depleting Social Security funds by extending the tax cuts.


    We're already back into the Social Security trust fund, spending those dollars for current needs. We passed in this House five times a lockbox that said we would never spend the Social Security funds. Congressman DeLay vowed the people's hard-earned money would be saved so they can enjoy their well-deserved retirement. I think that everybody here probably voted at least once for the lockbox. Well, if you vote for this bill today, you're throwing the lockbox on the ground, breaking it open, and taking all the money out of it finally. This is the definitive vote in this Congress on whether you want the economic plan to be permanent or whether you want to save Social Security, stabilize Social Security, and ensure that it will always be there for every citizen.


    Just before leaving for the weekend this afternoon, Republicans and a handful of Democrats voted to extend the income tax cuts. But Senate Democrat Leader Daschle has said the bill will never come up for a vote there.