pitfalls that lie ahead. host: richard ravitch, thank you for joining us. guest: my pleasure. host: that is all for "washington legislative business includes the preserving of america family firms act. a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. july 24, 2012. i hereby appoint the the honorable david rivera, to act as speaker pro tempore on this day, signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: pursuant to the order of the house of january 17, 2012, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate.

the chair will alternate recognition between the parties with each party limited to one hour and each member other than the majority and minority leaders and minority whip limited to five minutes each. but in no event shall debate continue beyond 11:50 a.m. the chair recognizes the gentleman from texas, mr. poe, for five minutes. mr. poe: mr. speaker, i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. mr. poe: mr. speaker, for years the united states has used droughns to track terrorists overseas, catch outlaws along the border, and other lawful purposes. now thousands of droughns are headed to the homeland. the f.a.a. plans to allow expanded use of droughns to operate nationwide by -- drones to operate nationwide by the year 2015. it is estimated by 2020, 30,000 of them will be flying in american skies. yes, mr. speaker, the drones

are coming. who will operate these drones and what will be their mission? could it be a suspicious government agent who thinks someone looks kind of funny? the e.p.a. bureaucrat to monitor somebody's farm and watch bessie the cow graze in the pasture? or a nosey neighbor who wants to make sure someone's shutters are pretty and the flowers don't violate the homeowners association rules? or could it be a legitimate and lawful and legal purpose of drones that doesn't violate the right of privacy? these are the kind of situations americans face as we enter this uncharted and unprecedented world of drone technology. congress has the legal obligation to ensure that the fourth amendment rights of private citizens are protected in this new drone world. you see, mr. speaker, the fourth amendment says this, the right of people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated. no warrant shall issue but upon

probable cause, supported by oath or affirmation. and particularly describing the place to be searched and the persons or things to be seized. the fourth amendment limits government intrusion into our lives. the constitution limits eavesdropping, snooping, and spying on american citizens. and while there are some legitimate uses for droughns domestically, such as monitoring forest fires and floods and hurricanes, tracking an escaped bank robber, and other law enforcement uses, it's up to congress to limit their use so that the fourth amendment and the right of privacy are protected. that's why i am introducing the preserving american privacy act. now is the time for congress to act not in 2015. with the increased technology of surveillance, congress has to be proactive in controlling drone use to law enforcement and also protecting civilians from the private use of drones.

this bill ensures the privacy of private citizens that it is protected by establishing guidelines about when and what purposes law enforcement agencies and private citizens and businesses can use drones. i repeat, this bill will ensure the privatecy of -- privacy of private citizens that it is protected by establishing guidelines about when and what purposes law enforcement agencies, private citizens, and businesses can use drones. first it would prevent the f.a.a. from issuing a permit for the use of a drone to fly in the united states airspace for law enforcement purposes unless it is pursuant to a warrant and the investigation of a felony. this would apply to state, federal, and local jurisdiction. the warrant exceptions and circumstances rule that are already the law of the land would be the same as those applicable in the state, federal, or local jurisdiction where that surveillance occurs. it would also prevent the f.a.a. from issuing a permit to

any private individual for the use of a drone for surveillance of a u.s. citizen or the property of a u.s. citizen unless that person under surveillance has consented or the owner of the property has consented. there may be some other lawful exceptions as well. and lastly this bill would ensure that no evidence attained from the use of drones may be used in administrative hearings. americans expect their constitutional rights will be protected at any time in our history or our future. so congress must decide when drones can and cannot be used to ensure constitutional safeguards. this decision cannot be left up to government agencies, special interest groups, or others. mr. speaker, technology may change, but the constitution does not. and that's just the way it is. i yield back. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentleman from oregon, mr. blumenauer, for five minutes. mr. blumenauer: mr. speaker.

there's plenty of blame for the near collapse of the economy over the last five years, greedy, even criminal business behavior, lax or nonexistence oversight, regulators asleep at the switch, clearly there were some reckless consumers and a failed political system. but as instructive as the postmortem might be, it's more important to avoid a repeat performance. what should we do? i would suggest we simplify, regulate, and prosecute. let's begin by reinstating the glass-steagall depression era bank regulation that helped promote stability in that industry. it would be a small step in the right direction. that the era of deregulation unfettered is at an end. i hope we can move to performance-based regulation.

the d.o.d.-frank bill will -- dodd-frank bill had many important features but i feel it is at risk of becoming a bureaucratic nightmare. we do need to regulate. the cozy, light touch, genteel, some would say dissident approach that assumes that the gentle people in the financial industry will self-police must be a thing of the past. we should provide the various regulatory authorities with adequate staff and budget. we should pay them so -- properly so they aren't a training ground for -- to be hired away by much higher salaries from the industry they are supposed to regulate. we should have high expectations that they will do their job, and then we should back them up and not undercut those efforts. finally, we should prosecute.

sending people to jail will send a message. all of the people in american prisons collectively have not stolen as much with guns as the american public, our pension funds, our businesses lost in the near meltdown of the economy. every time somebody illegally profits from a financial transaction, somebody else loses. crooks, whatever the color of their collar, should be held accountable. to make this happen the public needs to focus some of their frustration to make this an issue in the election. at a time when politicians and special interests are making strange and outrageous noises, here's a real issue for them to address. the speaker pro tempore: the gentleman's time has expired.

the chair recognizes the gentleman from michigan, mr. wallburg, for five minutes. mr. walberg: thank you, mr. speaker. mr. speaker, for the record americans -- america's businesses and innovators do not need the administration mandating how they run their companies. yet it regularly does. and in the form of burdensome and costly regulations. we all share the responsibility to find the balance of making sure employees have the safest working conditions possible while allowing them to have a job to come back to every day. burdensome, onerous regulations place such a heavy toll on businesses that hiring slows and they are forced to start cutting from their work force. part of protecting employees' jobs is making sure that business they work for is still able to grow and create more

good-paying jobs for those in michigan and across the country. over the course of this congress i have had the opportunity to speak with numerous small businesses, owners and workers who state unequivocally that they would rather washington hand out less regulations and more certainty. according to a chamber of commerce small business outlook survey from earlier this year, nearly 80% of small businesses save taxes, regulations and legislation make it harder for them to hire. that's because small businesses are forced to pay on average $10,000 per employee per year in order to comply with excessive regulations. the small business administration has reported that when added up those costs amount to $1.75 trillion annually. which is enough money for businesses to provide 35

million private sector jobs with an average salary of $50,000 per year. truly, mr. speaker, the price of red tape is the loss of american jobs. because of these regulations, the united states is also losing its competitive edge. according to the global competitiveness report for 2011 to 2012, the u.s. fell to the fifth most competitive economy in the world. down from second place when president obama took office in 2009. and the reason stated by the report? and i quote, more burdensome regulations. i ask my big government completion, what's wrong with being number one? regulations are important, and businesses should be held accountable for our safe -- how safe they keep their employees, but how much is too much? so far this year the federal

register has run more than 40,000 pages of regulations that range from burdensome to down right ridiculous. it contains such provisions as multiple hospital claim reimbursement codes for injuries caused by parents and burns from flaming water skis. we need regulatory reform that cleans up the system, removes duplicative regs, and wipes out burdensome excessive rules. my republican colleagues and i in the house have passed dozens of bills to pull back the government's regulatory arm. we passed the regulations from the executive in need of scrutiny which would require both congress and the president approve of all major rules created by federal agencies. we also have passed regulations that discourage or rules that would discourage any regulation

that will have an annual impact of more than $100 million resulting in major increases in cost and prices or impose a significant negative effect on competition and jobs. this week we'll vote on h.r. 4078, the red tape reduction and small business job creation act, which would prevent any federal agency from taking a significant regulatory action until employment has reached 6% or less. house republicans remain committed to growing the economy and requiring congressional approval for any regulation that has significant impact on the economy or burden small businesses and cost jobs. we must stop allowing un-elected bureaucrats to enact job killing rules with no checks or balances. by preventing these kinds of job hindering proposals, we can give job creators more certainty about what rules they can expect. small businesses are our country's real job creators,

creating seven out of every 10 jobs. to protect these jobs in our country and michigan, i'll continue to fight for less red tape here and in washington and more jobs in our homeland. mr. speaker, i yield back. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentlewoman from texas, ms. jackson lee, for five minutes. ms. jackson lee: mr. speaker, these are task that is we often -- tasks that we often do not finet welcoming. i find this morning to pay tribute to a public servant among us, someone who served this house as a staff person, a chief of staff in my office, i rise this morning to pay tribute to cath lean wilkes

whose memorial service will be held this afternoon, july 24, 1:30 p.m. at the alfred baptist church in alexandria, virginia. kathy died suddenly last saturday. the good news is that so many of her friends were able to fly in as i was able to do from houston and to be with her in those waning hours. . one would ask the question why and there is no explanation. for someone so full of life, so ready to serve, so willing to help, to lose their life so suddenly. even as she was so active the week of her death. kathy had a wonderful history. coming from ohio, touching down in pennsylvania, in houston, in washington, d.c. how often can what we call a civilian touch the lives of so

many states and so many people? kathy pulled herself up by her boot straps, supported herself and became a nurse and was so good at it as well. continued to nurture people, maybe in the spirit of florence nighten gael. that was not -- nightengale. that was not enough. she became a lawyer. that brought her to houston, texas, working for one of the major corporations there. that brought her into my life so many, many years ago. there she was a light as well, interested in helping, befriending not only my husband and myself but my two little ones, aircrafta and jason -- erica and jason. boy, did they have a friend in kathy wilkes. just as a fun-loving person.

and then, of course, traveling to places around the world and, of course, embracing friends. as she came back to washington, d.c. to become the chief of staff in the 18th congressional district, what a light she was in the office. bringing in great talent and other young people who were nurtured, counseled by her. tutored and made great. through the ups and you downs of the 1990's, through the impeachment proceedings, as i was a member of the house judiciary committee, all of these tough times kathy was there. and then, of course, we were able to do something quite great, if i may say so myself. this place, this house was built by slaves, the capitol of the united states of america, but as we looked around a few years past, there were no statues of african-americans.

i passed legislation along with secretary, then-senator clinton, to place sojourner truth, a person that had been be a abolitionist, a slave, a mother of 13 children who had seen most all of them sold into slavery. kathy made sure that statue was sculptured, that we had the opportunity to place it historically in the united states congress and it was honored with 2,000 people coming to see the placement of the sojourner truth statute, having been secretary hillary clinton and fir lady michelle obama and, of course, the speaker, nancy pelosi. what wonderful day and occasion and tribute to the hard work of kathy wilkes. and so it is befitting that i rise today to express the deep pain that so many of us feel. friends from all around the world, even, but certainly in this nation, friends, as i

said, from ohio to pennsylvania to washington, d.c. to texas, many of whom will be able to come together, others of whom will celebrate her in houston and in ohio, one would ask why. she is deserving of such. in the backdrop of such terrible tragedies that have faced us in aurora and places around the world, as we mourn the loss of so many in the occurrence of last thursday, i stand here today to say that i know that if kathy wilkes was alive today she'd be somewhere trying to help, to nurture, to assist my office, to be of help, even as she is no longer a chief of staff but really a former chief of staff. that is simply the way kathy wilkes is to a mother, a son and of course her granddaughter and the many relatives and many, many friends. we have lost a good friend, but i can see her now taking wings.

farewell, my good friend. you have served well and made us proud, but more importantly, you have given of yourself. may you rest in peace. i yield back my time. the speaker pro tempore: the gentlewoman's time has expired. the chair recognizes the gentleman from north carolina, mr. jones, for five minutes. mr. jones: mr. speaker, last saturday, i had the privilege to speak to well over 200 retirees, many of the retirees are veterans of our previous wars of this country. they wanted me to be there with them to discuss sequestration, their benefits and what do i think is going to happen, which i could not honestly tell them. and none of us really seem to know until we get back after the election in november. but mr. speaker, when i spoke to this group of retirees, i took this poster down and i had it on a stand like this one

that says, "funding the enemy: how u.s. taxpayers bankroll the taliban," and i told these veterans that it's time to get our troops out of afghanistan. it was time to stop sending money to a corrupt leader named karzai and time to bring the troops home and spend the money here in america on our own people and guarantee the benefits for our veterans which they have earned. mr. speaker, i got a strong applause from those people who have served this nation and their spouses. this took place at jacksonville, north carolina, which is in my district. camp lejeune marine base is in my district. and many of these in attendance served in the marine corps, the navy, few in the air force and they agree with me, it is time

to stop spending money, digging a hole that has no end to it known as afghanistan. mr. speaker, in a critique on this book, "funding the enemy," i read, one of the most candid, behind the scenes example of war reportage, this book contains a host of voices that spell out the chaos and mayhem of america's longest war. mr. speaker, it is a no-win situation. i'm a history major from college, but i'm not an expert on the history, but everything i ever read about afghanistan, the end is always the same. no nation has ever gone to afghanistan and changed anything. nothing at all. and, mr. speaker, speaking of

mayhem, yesterday in "the new york times," and i quote the article, the title of the article is "top afghans tied to 1990's carnage," researchers say. activists say powerful figures are a afghanistan today. i don't know why there's not more outrage from congress. anytime we have a debate about afghanistan, it's a few reports, a few democrats stand up and we might get 10 minutes but that's about all. 10 minutes spending $10 billion a month, young men and women losing their legs and arms and 10 minutes is all we're going to debate the policy in afghanistan? that in itself is crazy. in this article it further states -- excuse me -- the american embassy here has been another source of objection to the mass grave report.

american officials say releasing the report would be a bad idea. at least until after afghanistan's 2014 presidential election. this has been a failed policy and should have stopped after mr. obama got bin laden. that's the reason we got into afghanistan was to get bin laden and al qaeda who was responsible for 9/11. well, he is dead now. al qaeda has been dispersed all around the world. it is time to stop this failed policy in afghanistan. and i will say to the embassy that does not want this report out, why, why do you continue to play this game with the american young men and women who've given their life and limbs in afghanistan? why won't you be honest with the american people and congress and sebring the troops home, stop -- and bring the

troops home and? and we owe china $1.3 trillion. we can't pay our own bills but yet we are going to borrow the money from china to send to a corrupt leader named karzai in afghanistan and, mr. speaker, the subtitle of this book "how u.s. taxpayers bankroll the taliban." it's the taliban that are killing the americans. mr. speaker, with that i will yield back my time and ask god to please bless our men and women in uniform. thank you and i yield back. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentleman from georgia, mr. johnson, for five minutes. mr. johnson: thank you, mr. speaker. today i rise to express my heart felt sorrow and condolences to the victims and their families and the community of aurora, colorado,

a great tragedy. words are inadequate to describe it. and it's certainly a reminder to everyone that no time is promised to any of us, and we never know what will happen in the next second or the next minute or the next hour. certainly the next day so we give praise that we are able to wake up this morning and come to the floor of the house and talk about an issue that's going to take a lot of time to heal, but while we are healing, we have work to do in this congress. you see, the assault weapons ban in place for a number of

years, 10 years actually, expired in 2004 and after the expiration of the assault weapons ban, it's been open season. now i know there are people who hold the second amendment dear, and it is established clearly in law that citizens have a right to bear arms. beyond that the constitution is silent and so it leaves it up

to us to address issues concerning the reasonable regulation of that right. should we not have any regulations or should we have regulations that are reasonable? now, i just heard some of my colleagues on the other side of the aisle talking about the numerous bills that we will be considering this week having to do with stopping regulation in their tracks in all areas, whether it be child safety, food, drugs, cars, safety, whether or not it be air, water, food, drugs. i've heard the talk that

regulations stop jobs from being created. it's one that i disagree with, but nevertheless, we will be considering it today. but there are some regulations governing the things that are reasonable, and that includes restrictions on who can bear arms and what kind of arms they can bear. to say that we have -- and we should have no regulations on weapons, particularly our weapons of mass destruction, to me is unwise. i don't understand why someone

who has a gun in their home for protection needs to have a magazine that's capable of rapid fire, 100 rounds in a couple minutes or in a minute, i don't understand why someone needs that kind of firepower to protect their home. . i know people love to go hunting. i myself will one day have the opportunity to do that. i have never done it before, but i respect those who wait until hunting season begins on their particular prey of choice and they exercise that right. get a lot of joy and satisfaction out of it. and also bring home some food. i can't disagree with that, and we do need to cull our deer

population and other populations. we have reasonable regulations on that, but you don't need an ak-47 to go deer hunting. am i at my five minutes? time goes by very quickly, but i think you-all understand what i'm saying. i'm going to yield back my time. thank you. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentleman from pennsylvania mr. fitzpatrick for five minutes. mr. fitzpatrick: i ask to address the house for five minutes, revise and extend. the speaker pro tempore: without objection. mr. fitzpatrick: thank you, mr. speaker. i rise today to honor the life and memory of pennsylvania state representative anthony melio who passed away on thursday afternoon. to his family, friends, and neighbors he was known simply as tony, poppop and uncle tony, in the pennsylvania state capital he was known as a hardworking and honorable state

representative. having served his country in the naval reserves and working as one of the first employees in the united states fireworks in bucks county, tony's story is a story of my hometown, a town of dignified and hardworking people. tony was a man who built his political career on bringing the community together with his contagious smile and warm personality. he embodied the spirit of public service during his time in harrisburg. as the people's representative from lower bucks county, tony carried out his duties with dignity and perseverance. his commitment to his family and his community were the hallmarks of his service. a man of great faith, bucks county has lost one of its most well respected and beloved public servants in tony. i, like so many, had the privilege of calling tony a friend and a neighbor and my thoughts and prayers are with

the family in this difficult time and i thank the united states house of representatives for stopping to remember this dignified public servant this morning. i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. the chair recognizes the gentleman from pennsylvania, mr. thompson, for five minutes. mr. thompson: thank you, mr. speaker. mr. speaker, president obama continues to pursue an energy agenda that is contrary to his all-of-the-above rhetoric. there is no better example that this administration's recently released five-year offshore leasing plan. according to the nonpartisan congressional research service, the plan proposes a mere 15 lease sales over the next five years. which is the lowest number since 1980 when c.r.s. began tracking that data. instead of allowing the development of america's vast offshore oil and gas resources,

the plan effectively imposes a moratorium on most development. a moratorium which congress lifted nearly four years ago. mr. speaker, the plan blocks drilling on 85% of the outer continental shelf. effectively, states which sought federal approval will have to wait another 12 years before any production is possible. under current law, congress has a 60 day review period to replace the president's plan. last week the house natural resource committee passed h.r. 6082, a plan that will allow more development of our energy resources. instead of the moratorium of a none-of-the-above energy policy, we should responsibly develop all of our resources for the long-term benefits for the american people. mr. speaker, the american people deserve affordable and reliable energy.

i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the chair recognizes the gentleman from california, mr. dreier, for five minutes. mr. dreier: mr. speaker, i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection. mr. dreier: mr. speaker, i rise to discuss an issue which i hope we are going to be addressing in the coming days. there is a great deal of confusion about the possibility of our passing permanent normal trade relations for russia. -- pntr for russia. some are laboring under the impress this is a reward to putin and russia, and in fact the opposite is the case. we know that putin, in fact many people say they look at him and when they are reminded of is the k.g.b. we know that putin, according to many reports, is attempting to reassemble the former soviet union. we know that he has grossly violated human rights. we know that they have a massive bureaucracy, crony capitalism, and very corrupt

court system. that's why, mr. speaker, that's why it's very important for us to make sure that we pass russia pntr. according to the "wall street journal," an editorial last week, they made it clear, putin does not want us to pass the act which is part of russia pntr and they go on to say that he probably would be just as happy if we did not have pntr. why? because based on overwhelming votes that took place the last two weeks in the russian parliament, in the duma, lower house, and the federated council, upper house, overwhelming votes, russia is going to become a member of the world trade organization. i personally believe that's a good thing because it will take a great step in the direction of forcing russia to live with a rules-based trading system. to address those issues of crony capitalism, a corrupt court system, and a massive bureaucracy.

but, mr. speaker, having said that, i think it's important to note that we have seen action taken here in the house foreign affairs committee, senate finance committee, and we have seen great deal of enthusiasm focused on the miniski act. whattle is that act? it's legislation that is named for sergei miniski who was a whistle blower who focused on basically corruption that existed within the tax reporting system. basically tax fraud. he reported on that and he was imprisoned. he died in 2009. mr. speaker, what happened very sadly, according to most reports, is he was beaten to death. what does this legislation do? something again putin would be opposed to, it actually penalizes anyone who was involved in those human rights violations against sergei. so, mr. speaker, this is a good thing and at the same time, at

the same time in passing pntr we will say that the 140 million consumers in russia will have access to goods and services from the united states of america. under the measure that's passed both houses of the russian parliament, as i said, overwhelming majority, it will go into effect in -- within the next couple, three weeks. what we need to do, mr. speaker, we need to recognize that the world will have access to that consumer market. we need to get -- we need to create jobs here in the united states of america. we need to open up that market for u.s. goods and services. so, mr. speaker, when this vote comes forward, don't believe that this is somehow a rewardtorial putin and the people who are leading russia. this in fact is a great benefit for workers in the united states of america, businesses in the united states of america, and a benefit to the

consumers of russia who will have access to our goods and services. i want to congratulate in closing, mr. speaker, my colleagues, billy long and tom reed who along with 71 other of the newly elected members sent a letter that indicates strong support of this effort. with that, mr. speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the chair recognizes the gentleman from illinois, mr. dold, for five minutes. mr. dold: thank you, mr. speaker. i certainly want to echo the comments of the esteemed chairman from the rules committee about russian pntr, the effects it's going to have for american businesses. it really is going to allow us to compete more on a level playing field. mr. speaker, i rise today also to recognize a company in illinois who will celebrate their 100th anniversary on july 25, tomorrow. this is indeed a remarkable achievement and something that

we should celebrate. mr. james himes and his team at bell flavors and fragrances are innovating and selling products that satisfy the needs of their customers. and their customers, mr. speaker, are literally all over the world. headquartered in north brook, illinois, they have sales offices in 40 countries around the world and taylored -- tailors its products to meet the demands of its consumers. that's one of many small businesses in my district who have utilized the export-import bank. they utilized it this year to support its export operations. as a member of the financial services committee and a strong supporter of the export-import bank, i am proud that here in congress we were able to work together on a broad bipartisan basis to re-authorize the export-import bank. so many of our small and medium-sized businesses rely on the support of the export bank in order to more efficiently and effectively compete in the

gleeble marketplace. -- global marketplace. mr. speaker, we don't always spend enough time, effort, or energy here in washington, d.c., celebrating business growth and success. so today on behalf of the residents of the 10th district of illinois, i want to congratulate the wonderful people who make up bell flavors and fragrances on their centennial anniversary. with that i yield back. the speaker pro tempore: the gentleman yields back. pursuant to clause 12-a of rule 1, the chair declares the house in recess u

true in the next four years, a 25 million more americans are expected to shop online. the argument that this is a small economy does not hold up. let me make a final note. we understand that regardless of how the budget discussions come out, there will probably be less money coming out of washington to fund state and local governments. if that is true, unless they have the authority to collect the state sales tax, this is an issue of fairness. i asked you to take up this issue. thank you very much.

>> thank you. you are next in line. >> thank you. thank you. about 22 speedthe opera senit today. this is one of the most challenging issues for our community. i shared the house -- i chair the house rules committee. i share my goal as someone responsible for producing a .alanced budget i appreciate the title of

today's hearing. that is of paramount urgency. the supreme court decisions are the basis of this hearing. the crux of the issue is the advantage government grants certain retailers over others. remote business selling the same products as a retailer in your home town has an inherently lower transaction price. government is picking winners and losers. i come before you today to ask you to exercise your congressional authority and in the sanction of tax businesses. this will total more than twice the amount.

local retailers often find themselves acting as a display case for consumers will come in and try out the products and then go home and buy it on line. why? it makes sense to buy remotely as remote sellers are not required to collect sales tax. let's investigate some of the arguments regarding tax security. some argue it is impossible to collect online or catalog sales tax. the internet is the perfect environment. the consumer is already supplying to the vendor and a shopping cart all data that is needed to collect this. existing technology available from over a company's allow for easily collection of sales tax.

ebay is doing a pilot program with two companies that "delivered companies an affordable solution for tax."ving sales and use clien today the real burden is on the retailers who have tried to compete against someone who is not collecting sales tax. your home town retailers are at the mercy of the government mandate. that is the real burden on small business. some groups will tell you these bills are a tax increase. that is not true. how is collecting a tax you owe but are not paying a tax increase? asking one retailer to collect sales tax because they have a store in your home town without asking the same of all retailers

is not seem like equal protection under the law. some groups claim that states cannot do a good enough job collecting a use tax. there are basically only two ways to collect the use taxpayer at the retailer collected or educate them on it. to those that argued that states should engage in more audits, do they think we should have a more inclusive system or the average consumer will be made to feel like they have been on a share at their kitchen table? i say no. some will stay the states have not simplify their tax system enough to warrant congressional authority. what the supreme court answered was how much simpler the system would have to be of what technology would have to exist to role differently. , at simplification must be done that i submit that technology has improved.

resolving the tax inequity will ensure fairness for all. congress is authorizing collection rules, not a new tax nor is it a tax on retailers. it is time to eliminate the government sanctioned advantage some retailers have over your hotel businesses. it is time to end government picking winners and losers. i believe congress has the ability to balance appropriately the knees for simplification. i encourage you to make this decision and to act now. >> thank you. we try to work with in the 5 minute rule. when the red line appears, but says to you that -- you not be keelhauled.

we are glad to have you next in line. >> i have been interested in innovation in buying and selling. there are two reports. >> can you pull the microphone closer? >> what is about the origin based [inaudible] i would be appreciative if he made part of the record. i am reminded of the chair of the council of economic advisers. he said it was simple to be an economist. you just lean forward every so often been say "marginal costs." my contribution is to lean forward and say it remember the

declining cost of information and the cost of gathering information and put it together. at today, itlooking out toda was resistive of when there is no smart phones and looking up separate in getting out paper documents and having your finger right down the columns. in talking about the issues, my colleagues said why can you google that? why isn't there a smartphone application for that tax that is how much more the world has changed since 1992. information cost is declining. that will change the market place and what it means to be an

undue burden. thank you. >> you were forewarned. you did good. thank you. >> thank you. thank you for the opportunity to testify on the role on authorizing states to expand their sales tax authority to add a state sellers. we have not monitored trends at the state levels and are misguided by the principles. simplicity, neutrality, transparency, and stability. to be american is to believe in federalism. most of the time congress should let the states do their thing even if it is bad policy. in a few important situations, congress has the responsibility to get involved in state tax policy. this history is important.

it is the original understanding of the commerce clause. the constitution was adopted in part to get congress the power to rein in state tax authority when it threatens to do harm to the national economy. this is the power you have exercised in the past. in those cases you balance on one hand letting the states have the ability to set tax policies in line with their interest says citizens have choices of different baskets of goods and services with ensuring that state tax power does not reach so far as to harm the free flow of commerce in the national economy. from the founding until the 1950's, the roule is simply. states cannot tax interstate commerce.

as i am sure you know, a state had used taxes. these are imposed on items used within a state upon which sales tax has not been paid. an economist will argue that i bear the economic burden. well the purpose of the use taxes is to equalize tax burdens and port tax competition between states, the issue you're dealing with today is about purchases made in the same state. brick and mortar retailers point out that when someone buys from them they usually pay tax. when someone buys from the internet often do not pay tax. perhaps you just let the tax -- state tax whoever they want. there are approximately 9600 tax

jurisdictions in the united states. it grows by several hundred each year. states have different taxes on different items. sometimes different times of years. i read statues for the 46 states that have them. a lot of the revenue rulings try to parse out things that are not clear. there are seven states that local governments have their own. we subscribe to a number of the calculation software that we talk about. it is tough for us to keep up and we're not trying to run a small business. on august 7, a computer microphones in new mexico are not taxed but computer had set are. the rules are different the next day. if you want to do something about disparity was making sure that states cannot voice their

complicated tax systems on out- of-state sellers, there are options. i put it on page 15. one of the options is the companions. on page 16, i list features of the fact is a publication that should be part of any bill authorizing greater state tax power over out-of-state sellers. this bill comes a lot closer than previous efforts. there are some things left unchecked. congress decides to modify the federal standards for simplified tax must be an effective board. even the smallest business can sell their products and services and all 50 states. the to the station is great to -- the temptation is great to treated as a golden goose. the result of a taxpayer

uncertainty and harm the economic growth. this can only be countered by well thought out roleules. >> thank you. >> thank you. i also speak today for members of a new coalition for the simplification of taxation which includes the direct marketing and the electronic retailing associations. it must be hard to get a lot on this issue when you hear such contradictory facts on arguments. i enjoy debating this. it is not very enlightening to anybody who watches it. you deserve some straight answers. is this legislation about equity? equities when everyone plays by the same rules. that is the situation today. every online catalog retailer collect sales tax from every

place they have a reference. this bill requires them to pay a base for the customer lives. think about the outlet malls. nearly all the customers come from out of state. equity would mean requiring the customers to show and at his vacation so the clerk could figure out the sales tax where they live. that is ridiculous. even not do that but that is the unfair burden of this legislation would impose. we talked a lot about quelle. the court said it was concerned not by fairness as by concerns of the state regulations on the national economy. it our national economy is an area where the u.s. leads the world. we're also number one when it comes to the complexity of our state's sales tax.

are 46 states are approaching 10,000 jurisdiction. this legislation endorsed this disaster in forces other states to comply. would it be fair for congress to pass a marketplace equity act? would it be fair to senior citizens? they sell sensible clothing and shoes for senior women. the average age of their customer is 70 years old. 40's are paid by check. -- 40% are paid by check. it is not fair to ask a grandmother to fill out this form in a way that causes her to search through thousands of jurisdictions to find the tax rate applying to her and put it on the form. with this bill be fair to a

small business? the exception is not nearly high enough. out of a million in gross sales, you have to pay 750,000 so far cost sales and marketing and advertising. 6 the thousand for programming and web sites. -- 60,000 for programming and web site. if there's anything left they might be able to play an employee. it is still a mom and pop operation and it is not fair to hit them with a new cost. take a look at the top 500 retailers. they account for 90% of the uncollected sales tax. one was amazon. you can spare businesses on that long tail and still let the states collect '90s term

would it be fair for the businesses just small enough to get over the threshold? they need a radical simplification and reduced burdens. this bill leaves out the simplification. it would be subject to 46 separate audits every year. these are just two of the 11 missing. so, to conclude, these bills are not so fare after all. they would create a new tax on america's businesses. it is due from the business that made the sale. most states called a business privilege tax for the business -- for the privilege of doing business in their state. for businesses in every state, this bill would authorize a uniquely complex tax burden. in closing, please keep in mind the costs on american

businesses. if you were to empower states to export their tax burdens to external businesses. please compared up to the potential new taxes which, at most, would be less than 1% of total state and local tax revenue. compare those two, and i think you will conclude that the juice is not worth the squeeze. if i sincerely look forward to your questions. >> thank you. governor, let me direct my first question to you. if this bill were to be enacted, it will obviously have additional revenue for the states. what do you think will happen to that revenue? will it be passed along to consumers? or is it simply going to be spent by elected officials? >> that is a great question. it is one of the beauties of the state system. i think you will see 50 different answers to that question. i think we would do it to use a

variety of things. our history has been that we have cut taxes both years. that being said, would we apply some to infrastructure? yes. would we mitigate some of the rising costs? i know you've followed to that in congress and a very serious ways. my sense is that there would be ways that money would be used. in our state, part of that would be used to cut taxes. >> thank you, governor. mr. harper, would you represent has made taxes easier to work to comply with. you believe that it comports with benchmarks? >> i do. it would provide security to small businesses and retailers. this goes a long way from

addressing the issues. i have a bill file opened with the anticipation that this bill will go through and reduce the sales tax rate and basically have this as a revenue neutral impact on the state of utah. >> thank you. mr. kavner, deal of any alternative ideas? i regret that i missed your testimony. to level the playing field between the online bricks and mortar retailers. >> it would bother the governor a lot, but one way would be to say that there are certain categories where online sales have become so great and the competition is so intense and so unfair that the state has not tax to those categories.

that will make this a lot more difficult. it does get your question. >> thank you. many proponents of this legislation came -- claim that there is software by remote sellers. thereby alleviating -- what is your opinion to how well that software works? >> it can facilitate the look of rates, but they are not everything. indeed, there are some jurisdictions where the zip codes to not aligned. that is the problem. one example, there is a zip code that straddles the line. oregon has no sales tax. if you put in the zip code, that will not tell you the complete story. even putting aside rates, the question of what is tax and what is not is often the question of

reading the revenue rulings. this is one example. in my testimony, i pulled from a colleague's work who tried to see whether a bottled for cappuccino drink would be taxed under the sales tax statute. some states they are, some since they are not. some states, it is unclear. there's a lot of work that can be done to simplify. this is a legislative problem at the state level. >> that is your question, too. >> i am amazed at the claims of software making everything simple. i made my living with software. the government paid $1 million to do is study on what is the cost businesses today under the current rules to collect sales tax. they concluded the businesses were spending 17 cents over their own money to collect the sales tax for the one or two states they collected. only two cents had anything to do with software. the rest is for handling

exceptions and problems and questions. following up on audits that are done. following up on a non-taxable items. there's nothing to the beauty of software for doing a look up. let's not kid ourselves. soccer does not plug and play. there is a virginia seller who studied what it would cost to modify their fulfillment system. they are about a $3 million seller of jewelry and engraved items. they have a custom system to allow the consumer to specify their order. they will spend money to integrate free software. >> thank you. do you want to comment on the software question? >> yes. there has been a number of additional players who have come to the table with software. i think there is two or three. there are at least eight better on the table today.

the software has been vastly improved. it is a jurisdictional database. a state certified collection of software. things of that nature that will go through the burden that can be placed on business. i think some of those issues are truly answered today. >> thank you, mr. harper. that concludes my question. >> thank you. this seems to be a question that starts off with a greatexcitemey dealing with our obligation and quell, but that it comes down to whether there is the technology sufficient to make this practical how can -- i ask,

governor has plum and governor governornor -- haslam and governor harper -- wait a minute. mr. harper is not a governor. [laughter] >> a representative. >> how can we deal with questions of already been raised? how do we deal with that end of the table?

>> when the supreme court decision was made, that is the first thing. secondly, despite some the testimony, we're saying it's fair for everybody, but everyone does not have a retail presence. the reality of the fact is you have local businesses contributing property tax and sales tax and the jobs that are having to play on an unlevel playing field. we have to figure out a way to make it work. >> thank you. i think the response from my two other witnesses over here is exactly why we want to have this legislation passed.

that is a significant reduction on business. j.c. penney has hundreds and hundreds of accounts that respond today to sales tax returns and audits from thousands of jurisdictions. imagine what they and other retailers to do if we had a single audit and return each month. that could be reduced and we could focus on the core business of developing and designing goods. >> thank you. >> [unintelligible] the fact that this technology isn't quite there, as this

associate put it to me, is in their access to this yet? >> there will soon be a group of folks sitting down trying to get the app on the iphone. >> this can be improved. the bill is not perfect. most bills when they're finished are not perfect, much less when they start out. do you have any suggestions about where we might start on the measure before us? >> certainly. i agree with you that technology is a concern. maybe the two can meet in the middle. one example that is a great feature is the option of using a blended rate. a combined state and local

rates. that is a feature unique to this bill. there are, however, some features that are not in the bill. maybe including some of those might further make sure that the system we hoists on online retailers and the national retailers currently have to deal with can be a lot simpler. >> i think that this committee and another committee in the congress have a lot of work to do i think the fairness issue overrides everything that we are here for. there are problems and i would like to invite all of you to help us work them out.

thank you, chairman. >> the gentleman from north carolina is recognized for his questions. >> thank you. good to have you all with us this morning. we have been kicking this issue around in excess of a decade. we may be close to resolution. i hope so. let me start with you and work our way down the table. a rhetorical question, i think. will this bill creates a new tax? a. and b. is it feasible for internet retail to create and facilitate tax? >> it will not create a new tax. it is already owed. when businesses put their pnl

together, they do not show sales tax owed and sales tax paid. it is due from the buyer. number two, the capacity to do this? i really do. i understand there are issues in different jurisdictions and sales tax holidays. but given the capacity that we have today, i am very confident that we can solve these issues. >> thank you, governor. >> no. this is not a new tax. we're taught -- we are asking congress to authorize a collection tool. is the software out there? no. as improvements are made, bright eyes and bright minds will see things and make changes that will facilitate the improvement in the software. it has come a long way and i think it is ready for trial and congressional authorization now. >> you think it is feasible for internet retailers to collect and remit? >> yes. everything that is needed to be told to state tax authorities already being provided by the

consumer in the shopping cart. >> thank you. mr. cutler? >> no. not a new tax. it is a collect the tax. is it feasible? yes. is it a burden for small entities? perhaps. that is a question to be decided on empirical question, not on feasibility. >> on the question of whether it is a new tax, it is an existing tax that is not paid by the vast majority of people who should be paying it. whether that is a new tax and not is in the eye of the beholder. i think a lot of people will see it as a new tax. i agree with mr. cutler's point. it's not really about feasibility, but how burden somewhat to be. how much can congressional legislation reduce that burden. >> on the first question, it is absolutely a new tax. it is the use tax of consumers that is not being paid. what they want you to do is

allow states to force sellers to pay sales tax. it is the flip side. it is due from the business. the business has to pay it whether they collected it or not. your state national wholesale has a line item on the order form. if grandma puts the wrong amount or leave it blank, national polls still pays the sales tax. they cannot tell the states, i am sorry, she did not pay her tax. it is due with penalty and interest from the cellars. that is why does call the sales tax or a privilege? . not a consumer tax. >> this is obviously subject to interpretation. thank you for being with us. i yield back. >> the gentleman from virginia, mr. scott is recognized. >> thank you, mr. chairman. i think we have heard comments and yours pointed up the logistics' to be absolutely impossible. you may owe tax to one of

jurisdiction. but mr. harper, the last time we had a hearing like this, did i understand that there is a service that can be provided? and calculate the tax? just like it is done now on shipping? software just does it for you? and the business can collect the tax? and sent one check to the service and of the service will figure out who gets what? was it you the testified last summer at a hearing like this? >> no. it is the senator from indiana. >> did i describe that right? the tested the software and put it on and it does all of the calculation for you? you write one check to the service? >> there are certified service providers the to have an offer software that can go through. you can use them as a third party.

we will handle it for you. >> what is the cost of that service? >> the cost of the service depends on the company. the intent is that better compensation will be provided so that the company will not have to pay for that. the intent of a streamlined sales tax is there will be better compensation so that the retailer will not have to pay for it. it'll come out of the tax that is collected. just like to collect the handling and shipping, for no cost to the business, you can get the software that will

provide a calculation of the tax and you write one check to the service and they will figure out where it goes? and it is no cost? is that right? >> yes. >> after problems of what is taxable and nontaxable, does the software deal with that, too? >> yes. for those members, there are definitions of every product that is out there and then states will choose what is taxable and nontaxable based on the definitions that exist. >> is this by product code? >> it could be by product code or product type. there's a whole bunch of data you can turn on and off. >> thank you. you indicated that if your internet is based on the residence, based in the location, and last time we had this hearing, we also had

another category. if the product was purchased from a brick and mortar but delivered somewhere else, the washing machine to virginia, that virginia can get a tax. is that right? >> in a situation like that, if the delivery trucks are delivering the good to virginia and the purchaser live in virginia, then the d.c. company would have to collect virginia's sales tax. that is not the situation we're talking about here. if you compare the ease of shipping and handling to suggesting that makes it easy to do sales tax. that is not the case. the dow sales tax comes in on an address. the seller has to know. >> i agree with you if the seller was making the calculation. mr. harper has suggested the software will figure that out for you. then just like the shipping fee.

>> let's assume that free software, if i put in an address or product code can turn in a rate, that is where the problems just began. their own study shows that a lot of the costs of collecting sales tax is an exempt purchaser. what about if the item is taxable or not. consumers can get on the phone and say, why is this being taxed in my state? the refund exchanges are at the beginning of the expense. every time there is a refund or exchange or backwater, that has to make adjustments to the systems. >> let mr. harper respond to what that software does with people who may be taxable or not taxable. >> there is a taxability matrix in there. you can go through and say this is taxable, different jurisdictions, all of those things built into the software. i believe there is the

functionality to address the issues which cause you concern. >> thank you. but the gentleman from california is recognized for his question. >> thank you, very much. i do commend putting together what i think is one of the more balanced panels we have had a longtime. there has certainly been an interesting diversity. and the testimony, like so many cases, we always get back to this fairness issue. clearly, fairness, when you put five political people together or variations of political people together, the fairness sometimes becomes a tad bit subjective. in the republican. i was a former mayor. i have served -- i've been a member of the chamber of commerce for over 40 years.

i have elected that of a problem with the governor's assessment of it not been a new tax. when you have to pass a law to attack somebody, a tax they are not paying, to me, that seems as though it is a new tax. is it a fair tax? well, that is where the subjectivity comes. now, i would like to ask a question. maybe even the governor would like to respond to this. the source, the provider has got a business set up. it pays for the business, the state, the county, and local jurisdictions get a percentage of sales tax. these are the folks at providing the service and the state where this product is made. it would seem to me that if we

had a uniform tax on this type of the transaction, state senator charging 2% would charge 2% to every consumer. a state the charges 8% would charge to every consumer in that office to buy and save. the provider would only have one sales tax percentage to work with. i would like to get a response from mr. henchmen the first about the point of origin. maybe, if we're going to go this direction. i am still wrestling if it has been a topic of discussion. >> a think you might mean mr. kellner. he has written some papers on it. it is not the approach taken. >> i understand that. but that does not mean there might not be amendments during

the course. >> shirt. the issue you might be concerned about, at least when i describe it to other people, are all business is going to flee to states with no sales tax? businesses have done states with no corporate income tax, but maybe it is interest for this. it might not be a bad idea for people to do things to create a businesses in their states and the lower the taxes. i vote for that. mr. del bianco, your assessment? >> thank you. it is where the item is sold from. it is a brick and mortar stores do today. they do not have to ask where you live even the your taking the item home with you. if they do not have to calculate the rates were you live. they all presume that you are using it right where you bought it. that simplicity is the same simplicity that ought to be applied if we force out-of-state sellers to collect.

we may need to turn this upside down and take a hard look at the origin based. >> you have risen on this. you could be preselected hear from the good governor over there. >> the oregon approach is much more complex. where is the origin? it is the origin were the company will be? were the good is shipped from? it is it worthy corp. headquarters is located? is it a different state? the question of imports. sold from outside the u.s., therefore, tax free because it does have any origin inside united states. >> but it would appear that the challenges that you have just presented might be a little simpler to work with than 48

different taxes from 48 different states. just my own assessment of that. governor? >> i very much appreciative and sympathize with your view, what is to incentivize people to go or taxes are lowest. remember, states have a different mix of taxes. some, like us, have no income tax. they rely on sales tax. there's a variety of different approaches. >> thank you, governor. i see my time is expired. it just a brief response, unlike california, if we have high taxes on everything. income, sales tax, property tax. you name it, we got it. >> if we find your state to be a great place to recruit. >> and many have been doing just that. [laughter] >> thank you, mr. chairman. i keep wondering when my friend

from california is an export himself from california. so, mr. kuttner, listening to your testimony before i heard mr. delbianco, i was tempted to think that maybe innovation is taking the place so rapidly that you would not need the $1 million exemption or the $100,000 exemption that this bill does because you could just pull up and app and you'd be doing pretty simply. isn't that right? >> the technology will reduce the cost over time. as to where it goes, that is another question for you over time. >> mr. henchmahaslam, this is ad

panel because mr. kuttner doesn't seem to have a dog in this fight either way. >> we sat in the right order. [laughter] >> it seems that he could go the right way if you simplified the tax. you're not saying this a bad idea, you're just saying it would be a lot simpler to simplify the tax? >> it would be simpler if you simplify, yes. [laughter] >> mr. delbianco says he does not want this even if you simplify the tax. he thinks that's a bad idea. am i misstating were you are? >> no. i have done what i hope to be a thorough job how unfair i think it will be to collect. that is why the end of my testimony i wrote two pages

writing the true simplifications under which it makes sense to require remote companies to collect. >> all right. let's look at some of those simplifications. some of those, on page 16 of mr. henchman's testimony. you're talking about offering immunity to remote sellers who remiss if i sales tax holidays. do we offer immunity to local sellers who miscalculate? we hold them responsible. why when we hold remote sellers equally responsible when we're trying to apply the law to everybody? >> is that directed at me? the rationale for that would be that the reporter has to do with the sales tax holiday that they're dealing with. an online seller would have to deal with -- >> what i am trying to get to is

an equal application of tax, regardless of who is responsible for it. i do not think i would be more interested in giving somebody and immunity from something that i'm not giving, because then you will create another disparity between in it-a state and out- of-state collectors, it seems to me. do we compensate brick and mortar retailers for collecting the tax? >> many states do, yes. >> you do? to compensate brick and mortar of vendors within your state, governor? >> compensate in which way? >> compensate brick and mortar vendors who collect your tax for collecting your taxes? >> no, we do not. >> do you, mr. harper? >> yes, we do. >> how do you do that? >> took we had a study that was done.

the state agreed to it and we put it in the state code. collected.f what is >> so, you think that would be a fair addition to this bill? >> yes. there are some other things are like to see in this bill for safeguards, but yes. that compensation. >> what about requiring local jurisdictions to align geographically? do you require that of brick and mortar retailers? >> in the state of utah we have the jurisdiction of database, yes. you go through based on were the transaction occurs. i think that would be another safeguard to have. >> if you are going to have a state opting for one of these three options, as i understand this bill to do, what sense would that make? >> what it does is allow each

state to maintain control for its own state tax policy. >> ok. but once they choose one of those three options, are they basically for going all the other variables within the state? >> the thing that depends on when the amendments were made. in the present form, they could be locked in. that is still an item for discussion. >> i think i am confused and enough. [laughter] and i yield back. >> the gentleman yield back. the chair recognizes the other gentleman for five minutes. >> thank you, mr. chairman. thank you for being here. we appreciate your expertise. governor, we're sympathetic with this issue. we're trying to work through

with the best piece of legislation. i know that your state is one of the few states that uses the physical presence for business activities taxes. this committee voted favorably for the business simplification act that confirms -- i do not know if you had time to review that bill to see how we reconcile that with this particular piece of legislation. >> i'm sorry, congressman, i have not. >> and i would not expect you to. i think you testified on that bill when it was here. can you reconcile the two? >> bashar. although it is an issue that you should be thinking about, the standard presence as i mentioned in my testimony is the cornerstone of state taxation.

not just for sales tax, but corporate income tax for a long time. the vast bill for those to the attack standards. it is one that has to be paid by the consumer. the economists tell me that they bear the economic burden of the tax. they bear some administrative costs associated with it. it is passed to the consumer. >> what do you believe is the appropriate small cellar discretion threshold? is that something we have pulled out because it is politically acceptable?

or is there some substantive reason why we picked that particular dollar amount? >> excuse me. this bill has a $1 million small cellar exemption. as we talked about the sales tax, we believe that for the remote, 500,000 is probably appropriate. >> one of the concerns that some people have is that small cellar exemption with less than $1 million of stock sales in the state, much smaller than in state out of state sellers. this is a problem to you? how to reconcile that? >> maybe if we had more time, that would be when it goes to

next. the list of simplifications do not all need to be done. if we have a simplified system, maybe we do not need a small cellar exemption. maybe they would need a really high level for small sellers. however, i do not know with the magic number is. there is no economic policy that dictates with the magic number is. i think that is the balancing approach. >> i will let you address any of those questions in your response. but also, there is a concern that this is putting small mom- and-pop businesses out. how do address that concern if we do not do something? >> amazon, target, for over

decades now. that impact is driven as the last best hope to turn to the internet to try to reach customers that may be never darken their doorstep for customers that bought once in their store and traveled home. the internet turns out, for small businesses, perhaps the only way they can survive against competition. just as we're counting on a small businesses to help the economy recover, not just for the only states, but for all of them in the jurisdictions. that, for me, it is the ultimate. the use the internet to compete and survive. i yield back. thank you, chairman, for your separate peace. >> thank you. this is a very helpful hearing. i think all of us want to make sure that we nurture the small

businesses, whether they're on main street or whether they are an internet company. i met recently with a woman who lives in my district who had retired from the tech industry she worked for. her early-20's son got cancer. he did not have insurance and she spent everything she had to save his life. she's running a small business out for living room. she thought should be retired, but she's all for retirement to save her son's life. i am thinking of her and people like her who are running little businesses out of their living room to get by and hell is this going to impact them? as well as the empty storefronts that also worry about. i am mindful that i think the big box stores have done more for the little small businesses on main street probably than the

little tiny internet businesses. the big box stores, along with amazon. as i look through this, page 14, mr. delbianco and mr. henchmen, are very helpful. they're giving us things to think about as we move forward on this. you are right. maybe we do not have to do all of them. here is one question i have. under suggestion, we have to establish a single tax return. are you suggesting that if it were 8% in california that it should be 8% in every city and county? what is your suggestion? >> no. just that there be one return you have to fill out. for instance, in california, may be just shy of 100 different jurisdictions. rather than somebody selling in california repeatedly have to develop different forms.

>> i see. our voters have approved the sales tax increases. we cannot overturn what the voters do. >> each one of those. >> have you looked at the software that mr. harper described? >> yes. it is expensive. i do not know how much of a budget your constituents has for software. >> none. >> it is expensive. now, that may change as technology goes forward. the simpler we make sales tax systems by setting federal standards, the cheaper. >> we could make them available for free. we could require the states. >> right. mr. harper, is this software available on nine so that members of the committee can try it out and see for themselves? >> yes. we have a number of demonstrations here. >> the we are all busy.

-- but, we are all busy. can you give us the sites? >> thank you, very much. i am also interested in how we arrive and other members have mentioned the small-business exemption. why wouldn't we use what the small business administration says, for example? are with the irs says is a small business instead of the arbitrary numbers? >> i think, if i may, the reason for the 500,000 or 1 million is what they came up with. we responded to that rather than the other standard setter out there. toi guess, if we're going move forward on any of this, i would want to have some further

examination of that because it seems to me that the whole reason for living and existence is small businesses. they have steady, what is a small business? we should be guided, i think, by that or the irs. i'm not critical of my colleagues to introduce these bills. i think these are starting points, not ending points. they wish to get some guidance about what is, in fact, a small- business exemption. i would just close that sometimes we think a solution is going to solve problems and it won't. i was in local government for 14 years. i know that revenue is a problem. at the time i was and local government, we talked a lot about catalog sales.

when you buy something online, you have to pay postage. if it is not a high dollar item, the postage is probably as much as the sales tax would be in a lot of these states. to think that the sales tax application is somehow going to is the availability of inventory in some cases. it upsets me so much that the border bookstores are closing. i love to go to border bookstores. yet, if you go, you can edit the book you want because the inventory is insufficient. if you end up buying things online because as retail gets hit, the inventory decreases. it is a death spiral. it is not just internet sales. anyhow, my time is up. i thank you for this hearing. i think this is the beginning of the end of our inquiry. >> i thank the gentlewoman.

it may not be the beginning of the end, but it may be the end of the beginning. >> amend the inquiry. obviously, i did not articulate -- fat cat i ask unanimous consent to put into the record a listing of the businesses incentive letters in opposition to the bill? >> without objection, the listing will be made as part of the record. the chair recognize himself for five minutes. the gentlewoman is quite right. this did not so with the internet. in fact, the supreme court decision was a mail order case that predated any significant business being transacted on the internet. there are also telephone sales. it raises a question that hasn't been addressed by any of you. i am wondering if any of you are concerned about the fact that this advantages for businesses. we talked about stays not collecting sales tax for businesses in the state.

but what about canada, mexico? caribbean islands? hong kong? china? india? he can buy goods from a couple of hundred different countries around the world and those countries, to my knowledge, off will not be required, and this law will not reach a requirement that they have to collect sales tax for the state in which the consumer is receiving the product. if you any of you have a comment on this? mr. delbianco? >> thank you. absolutely true. effect -- if the consumer rebounded determined to avoid paying sales tax -- >> he doesn't have to be bound and determined there he could to see an ad from a company in canada. >> it is absolutely true. if consumers go on line for a the variable choices they get, the lower prices, completely aside from sales tax. did not go on line to save sales tax.

there is no data to show that. people go online to research their purchases and then use that online research. >> anybody want to respond? i've been limited amount of time. mr. harper? >> this deals with state tax authority and the 10th amendment. what you're talking route is a valid issue but one that congress has the authority to deal with involving tariffs and imports. >> absolutely right, but it may have the unintended consequence of enhancing -- if you think a business outside of the state isn't required under current law to collect sales taxes for that state, it may have the unintended consequence of enhancing businesses outside of the united states. >> i will not disagree with that. >> let me ask you this. one of the concerns i have, and i'm completely sold on the fairness issue. the woman from california makes a good point about offsetting costs and the shipping and handling charges you encounter often of the internet. there are lots of different

advantages and disadvantages. the fact that a brick and mortar business is required because they collect that tax does not have that nexus and therefore is not required to collect and is unfair. finding a way to address that is a desirable thing. on the other hand, that business outside of the state, it does not have to -- it doesn't have any representation in the state in terms of the whole process that one undergoes to collect the tax. i'm not sure we have enough uniformity in the legislation that we're holding this hearing on to say with confidence that a small business outside of your state could feel confident they are treated fairly by a state that might be aggressive in pursuing collection of taxes. we encounter this with activity

taxes all the time. the states making taxes out of state having to dance of the head of a pen to comply with their loss. what if they do not like your particular laws that might enact to require them to comply with that? >> ultimately, it is the free market system. they have customers in those states under saying, we desire your product. >> but the businesses in tennessee are not operating under the free market system. they're operating under the fact that they are representative of the local member. they do not have that representation if they are in richmond, virginia, or indianapolis, or anywhere else in the country. >> i appreciate the shout out.

i would say that is not really an internet versus retail issue. back to be true of a retail chain that has one store and their headquarters are somewhere else. -- that could be a retail chain that has one store and their headquarters are somewhere else. >> i think we're on a road toward making progress of cooperation, but i do not think we are there yet. with some states have joined together, but this law apparently lets the state that does not join into the streamlined sales tax, which may have one definition of what is taxable, off to nonetheless step in. some of the largest state in the country are flexing their muscles with this legislation. california, texas, new york, saying we want to be able to do this, but we do not want to change our sales tax world of some kind uniformity for these interstate transactions. that is what comes back on the shoulders of the congress. we have the ultimate responsibility for writingaws

related to inter-state commerce and doing so in a fair matter not only for those brick and mortar businesses, but also for the small businesses that are, in this point and time, i think, still confronted with a very complex many thousands of multitudes more complex than a business in your state or another state, knowing what that state's requirements are and only having to meet the requirement of that state. so, i commend the author of the legislation. and i commend all of you are trying to find a way to simplify it. but i would urge you to work and further to bring about more supplication -- more simplification. anyone who wants to preserve a this is one definition. i would prefer to see one right. three rate is better than some 9000 rates. i would prefer to see something that made it simpler. and, let me say this, off with regard to small business, i am concerned about law exempting

them. your local small businesses in tennessee are not exempt from collecting the tax. and businesses out of state? why, if there's a $1 million cap, why would not want to grow your business beyond that and if you that you will face an artificial penalty but for doing so and having to change your system to collect it -- to collect a tax you did not collect before. if we're going to do this, we find a way to make it work for everybody. at this point, the chair will recognize the gentlewoman. >> chairman and a ranking member, i am thankful for this hearing and to have the opportunity to plunge into. many of us come with backgrounds from local governments. after serving as a municipal

judge. it is not a man's reform of government. we seek opportunities for our constituents. likewise, the state of texas has a unique structure as well. i think it's important for the governor to note that it taxes a brags that it does not have an income tax and therefore is in the recruiting business. i would make this statement as well. their individual states and certainly that goes to the constituency. states continued to look. it is a curious situation for me because i come from a state

where we have had the opportunity to receive $40 million in medicaid dollars that were rejected. it makes it very typical when you think of opportunities to secure money is that are rejected that you want to do something that may cause some concerns among your small businesses. so, in order to educate myself better, i am going to ask mr. delbianco, and i was others as well and extensive question. first of all, i think it is important that we argue for tax simplification. the underlying bill seems to strike a chord of possible overlapping confusion. i think it is correct that we need to find a way to handle this if, by chance, the bill passes.

many of zip codes will cover multiple taxing entities. and op-ed fights the dallas-fort worth airport is in six separate taxing jurisdictions. in addition, the taxable goods definition varies from jurisdiction to jurisdiction. it is obvious to me that even if we were to adopt a bill, we would have a long way to go. what responsibility does the federal government have to businesses to ensure a seamless and an expected of transition if adopted. and then would you also comment on the fact that it is this a new tax? will the " case be overturned? i hope others are listening. i think my last point that our like to comment on, as i read the bill, it seems like it says

$100,000 in sales, in states, and collectively. i would raise the concern of the lady in the living room with her business, but also a sufficiently small business that may have but $1,200,000 and is a small business and it will be a in enormous to try to keep up with this new structure. would you comment, my friend? >> thank you, congresswoman. the bill before you only has three elements of simplification. were as congress has considered as many as 16 minimum requirements. it is congress's job to impose bold and robust simplification. within this bill, two of them are fundamentally flawed. it doesn't even require all the states to use the same.

the state can provide its own software to each and every seller. this bill does not require that all be the same. you also asked if it was a new tax. as we discussed, it is absolutely a new tax burden on businesses. in your state of texas, your state tax collectors said amazon has had a presence in texas, therefore you should have been collecting for the past couple of years. and your state sued amazon for $290 million. amazon cannot turn around you and said the consumers didn't hit so we don't have to pay it because the tax was due from the retailer. in all cases with penalty and interest. your state use that as a bargaining chip to keep amazon in your distribution center in texas. amazon will begin collecting in texas next year and there goes a lot of what you thought would

be uncollected sales tax. doesn't overturn it? in a way, it completely blows away quill. quill always said that congress has the right to do that. we know you have the right to do it, but is it the right thing to do? >> t think the tension is high enough for small businesses? and you hear my underlying premise that it is a strange number because you could be small and go over the limit? >> right. i do not know that i'm qualified to define what that is. one is that 500,000. one is at 1 million. it is worthy of discussion, obviously. there are a little less labor- intensive. >> and do you believe in state'' rights? is it a case of notifying state laws? >> just the opposite. i think what you are doing is giving states the right to ask

businesses were forced businesses to collect that tax that is already do them. >> i thank you for your indulgence. i read it differently. >> i thank the gentlewoman. >> this hearing is set to continue until about 12:30 eastern. a complete hearing will be available, to the blow, and the video library. the u.s. house is gaveling in next. they will debate a bill by congressman ron paul which would call for an audit of the federal reserve. also, a bill that would replace president obama's offshore leasing plan that would open up additional offshore leasing plans to -- over the senate, the continued to debate the expiring 2001 and 2003 tax cuts. now, live to the house floor.

the speaker: the house will be in order. the prayer will be offered by our guest chaplain today, reverend bud roland, st. john neuman catholic church, austin, texas. the chaplain: good and loving god, we thank you for this day. we thank you for the gift of public service. we ask for your blessings on these women and men who serve on our behalf. grant them the wisdom to be

humble in collaboration. the vision to consider the needs of all american citizens, and the desire to protect our freedom as they provide for the common good. direct their deliberations to be good leaders and guide them in fruitful dialogue. may your grace shine forth in all their proceedings. may they enact just laws for our government. and may they seek to preserve peace, promote the national happiness, and continue to bring us the blessings of liberty and equality. amen. the speaker: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1, the journal stands approved. the pledge of allegiance today will be led by the gentleman from arkansas, mr. crawford.

mr. crawford: i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker: the chair will remind the house that on july 24, 1998, at 3:40 p.m., officer jacob j. chestnut, detective john m. gibson of the united states capitol police were killed in the line of duty defending the capital against an intruder armed with a gun. at 3:40 p.m. today, the chair will recognize the anniversary of this tragedy by observing a moment of silence in their memory. without objection, the gentleman from texas, mr. mccaul, is recognized for one minute. mr. mccaul: thank you, mr. speaker. i rise today to pay tribute to good and decent man a. man of god, a man of faith.

a man who has devoted his entire life to the service of his fellow man. father bud row lan, -- roland, is our guest chaplain today and pastor of st. john neuman's catholic church in austin, texas. a native of amarillo, he was ordained a roman catholic priest in january, 1999. he was inspired to convert to catholicism by a man named jordan noons. i'm thankful that this man impacted father bud. he has gone on to shepherd so many with great love and great leadership. he is revered and admired by all whose lives he has touched. it has been a great privilege to call him my pastor, and everyone who knows him experiences the true message of christ. in his words and in his deeds, and above all in his heart, his example is a beacon of light which draws us all closer to

the creator. i am reminded of roman chapter 8 verse 28 which says we know that for those who love god, all things work together for good. for those who were called according to his purpose. we are blessed and the world is a better place because father bud was called according to his purpose. with that, mr. speaker, i yield back. the speaker pro tempore: the gentleman from texas yields back. the chair will entertain 15 further one-minute requests for speeches on each side of the aisle. for what purpose does the gentleman from arkansas seeks recognition? without objection. >> thank you, mr. speaker. mr. crawford: i rise today to recognize the leadership and dedication of mrs. rita hamilton, who has made a lifelong commitment to advancing conservative causes. his career juan began was a volunteer in political activism in 1995 and gone on to hold positions of the republican

party of arkansas, and a member of the republican national committee's women's leadership forum. she served as a national committee woman for the republican party of arkansas since 2004, and as a member of the committee she's able to influence party nominations and messages. she's been a delegate to every republican national convention since 1992. she's also a 2012 r.n.c. convention committee member. mr. speaker, today i honor her for her commitment to our commonsense conservative ideals and thank her for her service. the speaker pro tempore: the gentleman yields back. for what purpose does the gentlelady from new york seek recognition? >> to address the house for one minute. the speaker pro tempore: without objection, the gentlelady from new york is recognized for one minute. ms. hochul: thank you, mr. speaker, exactly two months ago i was in afghanistan breaking bread with our troops, i asked them, what is your biggest worry? what keeps you awake at night? thinking it had to be the taliban lurking in the nearby mountains. it wasn't. their biggest fear, i hear this over and over, was the fear of

coming back to this country and not finding a job. at this point our country, over 30% rate is the rate of unemployment for recently returning veterans from iraq and afghanistan. that is absolutely unacceptable. we have taken steps in congress to detect credit for employers is a good start. i introduce add vets bill to help veterans receive training for the skills they have acquired abroad. i also want to recognize the v.a. and department of defense are recognizing that we need to do much more to help these individuals transition into civilian society. in fact, tomorrow we are having a joint hearing of the armed services and veterans' affairs committee to address these matters. as i have told many veterans' groups, we didn't get it right after vietnam. we have so much more to help them reintegrate into society and help them heal their wounds. i say instead of a thank you, let's give them a job. . thank you, mr. speaker, i yield back the balance of my time. the speaker pro tempore: for what purpose does the gentleman from south carolina seek recognition? mr. wilson: unanimous consent

to address the house for one minute. revise and extend my remarks. the speaker pro tempore: without objection. the gentleman from south carolina is recognized for one minute. mr. wilson: mr. speaker, since the president took office, his administration has enacted over 400 new government regulations, limiting small business owners from creating new jobs. this year alone the federal register has published over 41,000 pages of regulations that would cost $56.6 billion and result in paperwork that would take over 114 million wasted hours to complete. with record unemployment it's sadly clear the president's new taxes and policies are failing american families and destroying jobs. house republicans are focused on putting americans back to work. as a result, we have passed over 30 job creation bills in the past year. sadly these bills remain stalled in the liberal controlled senate. this week in the house led by kevin brady will vote on the

red tape reduction and small business act, and once again attempt to remove government red tape prohibiting america's job creators from achieving economic success and creating jobs. i hope we can work together to support this legislation. in conclusion, god bless our troops, we will never forget september 11 and the global war on terrorism. the speaker pro tempore: the gentleman's time has expired. the chair will receive a message. the messenger: mr. speaker, a message from the president of the united states. the secretary: mr. speaker. the speaker pro tempore: mr. secretary. the secretary: i am directed by the president of the united states to deliver to the house of representatives a message in writing. the speaker pro tempore: for what purpose does the gentleman from tennessee seek recognition? mr. cohen: to address the house for one minute. revise and extend if necessary. the speaker pro tempore: does the gentleman seek unanimous consent? mr. cohen: thank you, mr. speaker. the speaker pro tempore: does the gentleman seek unanimous consent? mr. cohen: i do. the speaker pro tempore: without objection. mr. cohen: this weekend the whole country was struck with the tragedy in aurora, colorado. a deranged individual murdered

12 citizens and wounded 58 others. my mind went back to the day that gabrielle giffords was shot, another deranged individual. and what it says to me is we need to spend more money not less money on mental health issues. there are a lot of mentally disturbed people out there who need mental health treatment, and this congress has been cutting funds for mental health and clinics and health care. we need more law enforcement and more protection. there are cuts that could be made to protect our country's fiscal health, but to protect our nation's physical health some funds need to be maintained. let's think before we cut. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. for what purpose does the gentlelady from florida seek recognition? ms. ros-lehtinen: unanimous consent to address the house for one minute. the speaker pro tempore: without objection, the gentlelady from florida is recognized for one minute. ms. ros-lehtinen: thank you

very much, mr. speaker. it is with great pride, admiration, and affection that i rise to recognize dr. nunez, an outstanding member of the south florida medical community on his very well deserved retirement. in his 69 years of medical practice, he has improved the lives of countless individuals and has enjoyed a career of many achievements. he's a great example of the patriotism and dedication that we see throughout our nation and also to his profession. forced to flee from the effects of the communist regime of castro, he began his new life and career in miami. then moved to san antonio, texas, where in 1974 he was elected vice president of the american heart association. in 1977 he moved back to miami where he helped many struggling young doctors who had moved to freedom in the united states. he has received many awards, including a proclamation by the city of miami, and a

congressional recognition in 2006 for his many contributions to the medical field. congratulations to dr. nunez on his retirement and i wish him all the best in his new exciting chapter in his life. thank you, mr. speaker. the speaker pro tempore: the gentlewoman yields back the balance of her time. for what purpose does the gentleman from vermont seek recognition? mr. welch: revise and extend. the speaker pro tempore: does the gentleman is recognized unanimous consent? mr. welch: yes. the speaker pro tempore: without objection, the gentleman from vermont is recognized for one minute. mr. welch: thank you, mr. speaker. mr. speaker, the main street retailers, bricks and mortar retailers, play an essential function, providing access to stores in communities, they are the engine of downtown revitalization. e-commerce retailers are emerging at the very strong retailing force providing convenience and low cost to consumers. the challenge we face is having a level playing field between

these two retailers. the way things stand right now if a state assesses the sales tax, main street retailers have to collect it. e-retaers more often than not don't. that's not a level playing field for them to compete on a fair basis. there are two bills in the house to resolve this. the main street fairness act and the marketplace equity act, both i am a co-sponsor of with bipartisan support, fair is fair. we are making progress on this. just recently the governors from both parties attending the national governors association spoke in favor of the importance of updating federal laws so that there will be this level playing field. just this morning, chairman smith's house judiciary committee, there was a hearing on the marketplace equity act. let's bring this to the floor for a vote. let's pass it. let's return fairness. i yield back. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from new hampshire seek recognition? the gentleman seek unanimous consent? >> yes. the speaker pro tempore: without objection, the

gentleman from new hampshire is recognized for one minute. mr. guinta: thank you, mr. speaker. with tax cuts set to expire at midnight on december 31 of this year, the obama administration wants some of those taxes to increase. i think that would inflict a load to our economy' prolong this recovery. a recent study by the accounting firm ernst & young, finds raising these taxes would cause the estimated loss of 00,000 jobs, wages would be reduced by 1.8%, and our economy would shrink by 1.3%. my state of new hampshire relies heavily on small businesses. it is the backbone of our economy. this tax hike would hit small businesses especially hard because at least 75% pay their taxes as individuals. i think of the many job creators in my district, such as ham spire fire protection, they face enough challenges

without washington imposing higher taxes and that burden on their small business. with the nation's unemployment at 8.2%, we simply cannot afford to lose an additional 700,000 jobs. that is why i say we must stop this tax hike, mr. speaker. i yield back the balance of my time. . the speaker pro tempore: for what purpose does the gentlelady from california seek recognition? without objection. mrs. davis: yesterday we lost a true hero in sally ride. dr. ride was a constituent and i recall my excitement and first meeting her years ago. at the age of 32 sally ride broke her first barrier when she flew on the space shuttle challenger in 1983. she was the first american ever to fly in space. but her journey didn't end there. she went back to space in 1984 and later on became director of the california space institute

spells a professor of physics. she was a trail blazer in every sense of the word. she cracked over the door for women to enter the field of science and engineering and helped inspire countless young girls to follow in her footsteps. i think it -- what it will mean to my granddaughter to see her in our history books. dr. ride will be miss bide all those who knew her and all those who she -- by all those who knew her and all those who she touched and reach. i yield back. . the speaker pro tempore: for what purpose does the gentlelady from south dakota rise? ms. noem: to address the house for one minute. the speaker pro tempore: without objection, the gentlelady is recognized. ms. noem: this is the drought that's hitting so many people and our economy, i was recently

in the northwest corner of south dakota and had the chance to drive all the way across the state and visit with producers and communities that have been hit so hard. i tell you the facts are clear. we have fee shortages, there is escalating feed costs that are hitting our farmers every day. our recently in livestock producers take a great risk. they don't have the crop insurance programs that many of our crop the speaker pro tempore: for what purpose does the gentleman from connecticut seek recognition? the speaker pro tempore: without objection, the gentleman from connecticut is recognized for one minute. >> mr. speaker, this week washington plays host to the international aids conference. a conference that brings

together activists, scientist, people living with h.i.v. to mourn those millions who have been lost to that disease around this world, but also to celebrate some very real progress made against that disease. mr. himes: h.i.v. is no lopinger a death sentence for those who are diagnosed. that's a very large accomplishment. that the u.s. government can claim some credit through research at n.i.h., c.v.c., smalls things like the fact that the city of washington can be host because the president's administration lifted the travel ban on people with h.i.v. mr. speaker, there is also something for us to learn. the bush administration which i didn't always agree with also can take enormous credit for a program which saved millions of lives in africa and asia and earned us the respect in the law that people around this planet. we should learn from that to work together to end this disease.

to make sure that those with it are treated and that we prevent it and ultimately end it. that should be our goal. mr. speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from texas seek recognition? >> mr. speaker, i seek permission unanimous consent to address the house for one minute. the speaker pro tempore: without objection, gentleman from texas is recognized for one minute. >> mr. speaker, i rise today as an original co-sponsor of the federal reserve transparency act of 2011, authored by my colleague from texas, ron paul. i commend congressman paul for his years of diligence in pursuing this issue. it has long since been time for the federal reserve to commit to an audit. mr. marchant: this legislation requires the comptroller general to complete an audit of the federal reserve board of governors and federal reserve bank. many of my constituents have n calling and writing and asking me for this significant new

transparency of the federal reserve. i agree with them on the urgent need for accountability. this legislation is an important step forward in achieving that goal. oy urge all of my colleagues to join me in supporting the federal reserve transparency act. thank you. i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentlelady from illinois seek recognition? ms. schakowsky: unanimous consent to address the house for one minute. the speaker pro tempore: without objection, the gentlelady from illinois is recognized for one minute. ms. schakowsky: now that it's the law the land, it's time for everyone in the country to take a deep breath and look at what really is in the affordable care act, obamacare. if you are a senior citizen, you are no receiving a 50% discount on brand name drugs if you fall into what's called the doughnut hole, the medicare prescription drug coverage gap. if you are a woman, you now have free coverage of lifesaving preventive services such as mammograms and

beginning on august 1, free coverage is going to include many more prevenlventive services f you are a parent, with children under age 19, they cannot be denied coverage by an insurance company because they have a pre-existing condition. and if you are a young adult, you can now stay on your parents' health care plan until you your 26th birthday, which is really important if you don't have a job that has health insurance coverage. if you are a small business owner like my son is, there are millions now of eligible small business owners that are receiving tax credits if you choose to offer coverage to your employees. take a look. it's really good for most americans. i yield back. the speaker pro tempore: the gentlelady's time has expired. for what purpose does the gentleman from texas seek recognition? mr. poe: ask unanimous consent to address the house for one minute. revise and extend my remarks. the speaker pro tempore: without objection. the gentleman from texas is recognized for one minute. mr. poe: mr. speaker, last week i met with dr. williams an

oncology nurse from a cancer center in houston, texas. for 30 years dr. williams has provided care to cancer patients, whether they have battled the disease for years or they are just beginning that fight. i was impressed by her compassion and her dedication. people like dr. williams are why m.d. anderson is the greatest cancer center in the world. named the top hospital for cancer care for the sixth year in a row. while its innovative cancer research is most impressive, dedicated and knowledgeable staff are the reasons why it remains the number one center for cancer care. it all starts at the top with dr., he's trying to provide the best care possible to dramatically reduce the number of deaths from cancer. this year they will see their one millionth patient since the doors opened in 1944. each day lives are forever

changed by the staff and volunteers who are tenaciously determined to stop cancer. that's just the way it is. i yield back. the speaker pro tempore: the gentleman from texas yields back. for what purpose does the gentleman from new york seek recognition? the speaker pro tempore: without objection, the gentleman from new york is recognized for one minute. mr. higgins: reports issued by american canadian scientists reveals alarming findings regarding the health of our great lakes. this report is an urgent reminder that it is imperative that we intensify our efforts and act immediately to prevent arabant carp from entering the great lakes. today i along with 15 of my colleagues from both sides of the aisle sent a bipartisan letter to the environmental protection agency and the army corps of engineers calling

attention to this study and urging swift action on the threat of the asian carp to the great lakes environment. keeping our waters healthy and free of invasive species is a federal responsibility. it's time to act and act now. i yield back the balance of my time. the speaker pro tempore: does the gentleman seek unanimous consent to address the house? mr. defazio: certainly. the speaker pro tempore: without objection, the gentleman is recognized for one minutes. mr. defazio: 1989 i sponsored a bill along with 11 other democrats to audit the federal reserve. "wall street journal" wrote an editorial saying we would stroy the american economy if we audited the federal reserve. guess what? 18 years later wall street

destroys the economy of the united states of america. wall street, the big bank, and then they were bailed out secretly by the federal reserve. we don't know how many trillions of dollars the federal reserve committed to them. we know their profits were billions. tens of billions, on the failout they got. so it's past time to audit the federal reserve. today we'll take up a bill, ron paul's bill, to audit the reserve. i strongly support it. i also urge members to support my bill which would establish conflict of interest rules for the federal reserve and take the 2/3 of the federal reserve that is controlled by wall street banks, take those people off the board, and put citizen representatives who represent the taxpayers and the consumers of the united states not the big banks on that board. . the speaker pro tempore: for what purpose does the gentleman

from california rise? ms. hochul: to address the house for one minute. the speaker pro tempore: without objection, the gentlelady is recognized for one minute. ms. hochul: the government accountability office revealed that the debt ceiling crisis that the republicans put through this last summer cost the taxpayers $1.3 billion. now the americans are hearing that they may be put through that wringer again. i hope my republican friends will agree with me that the middle class families are the backbone of our economy. keeping their taxes at their historically low rate is the best way to get our economy back on track. fortunately, that middle-class tax cut extension is under threat. my friends on the other side of the aisle are demanding instead that the superrich get their tax breaks. this isn't the way forward. we tried tax breaks for the rich and the tax giveaways for the corporations during the bush years. ms. hahn: let's keep tax rates low for the middle class. americans -- for americans and move this country forward. thank you. i yield back. the speaker pro tempore: the gentlelady yields back. for what purpose does the gentleman from michigan seek

recognition? >> i ask unanimous consent to address the house for one minute. the speaker pro tempore: without objection, the gentleman from virginia is recognized for one minute. >> thank you, mr. speaker. some claim the solution to america's energy concerns is drill, baby, drill. mr. connolly: under petroleum, domestic oil and natural gas production increased every year with the largest increase in the number of drilling rigs in american history. domestic oil production last year was the highest in a decade and natural gas production, the highest ever in our history. under president obama will reduce foreign oil imports by one million barrels of oil per day. foreign oil dependence was 60% of u.s. consumption in 2005. under bush. it's dropped to 49% in 2010 under obama and is now on pace to fall to 36%. reversing trends since the nixon presidency. by 2020 u.s. oil production will be up 11%, rivaling the largest producer in the world, saudi arabia. under this president, u.s. oil

production exploration are booming while foreign oil imports are plummeting. the u.s. consumes 21% of the world's energy but contains of proven oil reserves. that's why it's imperative we follow president obama's lead and produce multiple sources of energy to meet our ever expanding needs. for those that say drill more, president obama can say, we have, baby, we have. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentlelady from hawaii seek recognition? >> mr. speaker, i request unanimous consent to address the house for one minute. the speaker pro tempore: without objection, the gentlelady from hawaii is recognized for one minute. >> mr. speaker, we must reduce taxes on the group of americans that fuels our economy. ms. hanabusa: we disagree who that group is. democrats believe that it is the 98%, the middle class that fuels our economy. the bottom line is, do you believe that the economy is going to be revised top down,

but really it isn't. it's whether it's going to be a strong and secure middle class. today, the white house released some figures. for hawaii, my state, 500,000 families qualify as middle class. you know what it means? if we don't extend the middle class tax credits, taxi breaks, it will mean $1,600 more per family per year. what does it mean for the superwealthy? if we do not and we let those tax breaks expire, like it should, it will mean we'll be able to reduce the deficit by about $1.16 trillion in 10 years. this is a no-brainer. extend the middle-class tax credits for those who really fuel our economy and expire the bush tax cuts. thank you, mr. speaker. i yield back. the speaker pro tempore: the gentlelady yields back.

pursuant to clause 12-a of rule 1, the chair declares the house in recess subject to the call of the chair.

earning less than $250,000 a year and allow for rates to expire, i.e., reverts to the higher clinton era levels. that vote, which will have a 60-vote threshold, as do most contentious matters in the senate, is expected to fail. action will then go to the house next quadriplegic week, it's expected, where they'll

hold their votes and we think there will be a vote on the democratic provision, i.e., the same one i discussed, which will fail because the republicans control the house. and the house will pass its version of the bill which will have all current income tax rates. that will pass on an almost exclusively party line vote and then wither in the senate. really what we're having is show votes. no one expects this will be the final word on the subject, nor will we have any fruition before lawmakers leave for recess in 10 days' time. >> you mentioned on president obama's middle class tax proposals as part of the debate this week. when will democrats be allowed to offer that proposal? in the senate, the democrats can't muster enough votes to

get over the 60-vote threshold. in the house there is likely to have a vote which will be defeated because the republicans have a strong majority in the house. >> you went to a briefing with kevin mccarthy. how did he characterize the agenda? >> he tried to frame it all in the conversation of jobs and improving the economy. so in addition to the tax cut votes, we will he see a continuing of the republican agenda on what they say is rolling back the red tape that is stifling job creation in america. there will be votes on tying new regulations to the state of joblessness market and also going to be an attempt to effectively scrap the current obama administration plan on how and when oil and gas exploratory leases are handed down and open up far more parts of offshore drilling -- far more parts of offshore to drilling of the exploratory

nature. again, both of those votes are likely to pass the house, but it will go nowhere in the senate. democrats have shown absolutely no -- nothing to take up this republican political agenda. >> you mentioned show votes. why are we seeing both chambers voting on things that won't get approved and become law? >> it's an election year, it's that simple. both sides are -- think having their members vote on pieces of legislation which are politically advantageousous, which carry their message, is a good thing. and similarly, they hope to cast their political opponents in a negative light. taking up senate tax votes, for example, democrats think that forcing republicans to vote against, even though it's a procedural vote, but essentially to vote against extending tax cuts -- current tax rate for all americans helps them out in the various states in which there are

senate races that will be close, as a handful, 10, 12 senate races across the country. harry reid thinks holding these votes helps his candidates, helps out his incumbent senators in crafting their political message come the november election. >> thanks for your time. >> thank you. >> we'll go back in at about 2 :15. subject to call of the chair. could be half an hour, 45 minutes. they'll take up a bill by congressman ron paul which calls for an audit of the federal reserve. congressman paul joined us this morning on "washington journal." host: congressman ron paul, republican of texas, serving

his 12th term. thank you for coming in today. guest: thank you. host: you have a bill that's getting a run-through in the house this week. tell us what it would do to audit the federal reserve? guest: it will do exactly that. we will once again -- as a matter of fact, for the first time, be able to audit the fed. the fed's never been audited. they've been around for 100 years. their budget is much, much bigger than the congress. during the crisis they generated $15 trillion of credit which they london out in secret. and the constitution is very clear. monetary policy is the responsibility of the congress. oversight is the responsibility of the congress. but when they tried to clarify what congress could do in the 1970's, they wrote a law that said, sure, you could audit the fedex september for some very important things like monetary policy and agreements with foreign banks, agreements with foreign governments and other central banks. and international organizations like the i.m.f. who might be

able to merely remove some prohibitions that allows congress to perform its responsibility and that is to audit of the fed, give transparency of the fed. i know that these conditions has become more important. as a matter of fact, the american people are very, very strongly in support of this legislation. host: the details, as you mentioned, would require the g.a.o. to audit the fed board of governors and 12 regional banks and require a follow-up report to congress with recommendations for what to do. and it would have to happen within one year. guest: right. host: the chairman of the federal reserve, ben bar nanky, had some pushback. -- bernanke had some pushback. let's hear what he had to say. >> what the g.a.o. is allowed to audit under current law and that is monetary policy, deliberations and decisions. what the audit would be to eliminate the exemption for monetary policy deliberations

and decisions from the g.a.o. audit. so in effect what it would do is allow congress, for example, to ask the g.a.o. to audit a decision taking by the fed about interest rates, for example. now, that is very concerning because there's a lot of evidence that an independent central bank that makes decisions based strictly on economics -- economic considerations and not based on political pressure will deliver lower inflation and better economic results in the longer term. so, again, i want to agree with the basic premise that the federal reserve should be slowly transparent, federally accountable. i will work with everyone here to make sure that's the case, but i do feel it's a mistake to eliminate the exemption for monetary policy and deliberations which would effectively, at least to some extent, create a political influence or political dampening effect on the federal reserve's policy decisions. host: federal reserve chairman ben bernanke testifying last

week. here are some headlines. bernanke slams ron paul's fed audit bill. guest: when he talks about independence, he talks about secrecy. he talks about politics. i mean, it is a very political organization. what they can do, you know, they -- he does not want the congress to have oversight, but he talks to and works with the treasury department. he works with the executive branch, but the executive branch doesn't have the authority to manipulate monetary policy either. if he can give loans to private banks and private corporations in secret, how more -- how much more political can you get? and then be protected? he says the only thing we want to have protection on is monetary policy. well, that's what his business is is monetary policy. he's the lender of last resort. he's the bailer out of last resort. he can spend $15 trillion offbudget. he said, we need to do this in

secret. but the financial crisis has changed all this. i mean, that's ancient history. the fed has been able to do that from 1913 up until 2008 but now the people want to know. they know how important it is. they're understanding how the fed creates bubbles and how they claim they can come to the rescue and bail everybody out and they need total secrecy so they bail out one company to go bankrupt and then bail out the other company, bail out some banks and then have no exposure and keep the information secret. i think that is ancient history. no, we don't have our way. we don't have a total audit. we don't have monetary reform yet. but the handwriting is on the wall. this system can't work. we've had an experiment. basically since 1971, when we were on a worldwide standard, it's never been done in the history of the world to have one single paper standard running the whole financial institutions. and that's coming to an end. i think when they look at the libor scandal, our fed was

cohorting with the european central banks in setting interest rates. and our central bank is always setting interest rates. that's their business. that's how they create money. i think because the failure of the policy, the transparency of the fed is going to come because it's going to become more obvious to everyone that this system cannot be maintained. host: we have a tweet that's come in. referring to the fact that you're retiring from congress. guest: well, i have other people talking about this. i say, yes, it's a big move. i have been talking about it for 30 years. the last five years we've gotten about 100 times more attention than we did than the previous 25. host: right. guest: no. this whole idea of -- getting one -- we didn't have the full

audit, no, the knowledge is there. host: why the change in the last five years? guest: because of the crisis and the realization that the fed was responsible because of education, because of the study of free market economics. before this was not understood but it's better understood than now. the younger generation for some reason is fascinated with this idea and information is so much more information on the internet and i have young people i talk to a lot of them and they're studying this. it will change. whether it's going to be changed before i leave congress or not, most people realize, and i think she's correct, the senate's going to give us trouble. but the attention keeps growing and growing, understanding keeps growing. i work as much outside of the congress within the congress to change people's attitudes and understanding and help educate because that's what you need first and then congress will respond.

i think that's what's happening right now. the congress is responding to the people waking up and realizing, you know, how important this issue is. up until now they said whatever the fed chairman says, we'll go along with it, because they always sove our problem. not going to happen any longer. host: we'll go to the folks and hear from sarah who is a republican from maryland. good morning. caller: good morning. it's such a pleasure having an opportunity to talk to you, mr. paul. i am a very big critic of the fed. because the crisis, i did a lot of reading about it. but what troubles me it still seems a lot of members in congress don't truly understand the controversial about the fed, what it truly does to undermine the system. what i was wondering is, you know, i -- would you agree with the statement that, you know, that america is bankrupt? that would be my first question. and my second one is, it seems

the united states as well as europe -- i mean, basically there's no more money to finance anything. and would a new financial system need to be implemented that would also include some sort of debt forgiveness on a massive scale? that would be my question. it was a pleasure having an opportunity to talk to you. guest: thank you. you're right. the question is bankrupt. it has not been declared yet because the world still trusts our dollars, but we keep printing them and the foreigners take it and we buy goods. yes, and there's going to be monetary reform and, yes, there will be liquidation of debt. the question is, how does a country liquid ate its debts? states and cities can leck wind ate its debts by -- liquid ate its debts by writing -- liquidate its debts by writing it off.

spain and greece are pretending they can salvage the system. all the moneytory authorities is to get rid of the -- monetary authorities is to get rid of the debt. and if you have a national debt of $15 trillion and you devalue your currency by 50% and prices impup, you just liquidated $7.5 trillion of real money. but that debt will be liquidated. eventually the trust will be lost and there will be monetary reform. there has to be reform because countries have done this for centuries where they have to finally restore confidence. but there's no way you can keep confidence going into a system where all you have to do is print more money. this is why congress is irresponsible because they always know the fed is there. if they had to borrow that money in the marketplace, interest rates will impup and this will all -- will go up and this will all come to an end.

some like to spend money on runaway spending overseas and military and the fed prints the money. it's coming to an end. exactly when that's going to go we don't know. if we didn't pay our bills today it would be impossible. host: a tweet from wild and wonderful. guest: that's an incorrect statement because when we were under gold standard the congress had the responsibility of guaranteeing that the dollar was as good as gold and the dollar was a stable currency. you don't want congress to do it. congress might even print more than the federal reserve. they bail out different people. they might bail out the mortgageholder and the farmers where the fed bails out the big banks and big corporations and foreign banks and foreign

corporations. so it's who special benefits. i don't want the fed to bail out the superwealthy and i don't want congress, you know, to say we can just print out money and bail out every mortgageholder. what you want is the market to operate where the interest rates go up by the markets, supply comes in the marketplace and people go bankrupt. nobody bails them out. they just have to write those debts off. you wouldn't get these huge financial bubbles like the housing bubble. host: gary in pennsylvania. independent line. welcome. caller: mr. paul, it's a shame that you don't get the right media coverage. i just want to ask you about the u.n. -- [inaudible]

it was in june, i think, and talked about the economy and how it affects every aspect of our lives -- our lifestyles, behavior, health, consumption, agriculture. and create a international monetary fund. according to one, efforts to be made to explore the potential for innovative size of a potential world currency. [inaudible] host: let's get a response. guest: i think his concerns are justified. i think those who manage the world financial system and those who manage our dollar both nationally and internationally know exactly what i'm saying. this is destined to fail. so they're sitting around on these, you know, trying to make plans on what it should be

replaced with. i think they're absolutely right. they want to replace it with an international currency. they'd like to use the i.m.f. they're interested in world government. i'm interested in not even going into the united nations. i want to give up our national sovereignty in any way, and i certainly don't want them to have the currency. so this is -- this is the plan that they have, and i don't want to -- our country going to war under u.n. resolutions or -- i believe in our constitution. if we want to influence the world we should do so by setting a good example. but not allowing international banks like the i.m.f. do the job that we in the congress should be doing. host: congressman ron paul, republican of texas, representing the 14th district that includes galveston, lake jackson, freeport, serving his 12th term, also a presidential candidate. let's go to democratic caller

in arkansas. you're on the air. turn down your tv. caller: how you doing? host: good. you're on with congressman paul. caller: i thank all what you do for c-span. host: thanks. please go ahead. caller: and i just want to ask congressman paul -- host: yes. all right. caller: why not mitt romney release his tax records? host: ok. mitt romney. guest: i think the american people would like to see that happen. and i have volunteered -- i tried to instruct myself what to do, but i think the american people have asked for it and i made a statement that it would probably be helpful to him, you know, to let the people know if that's what they want since he's, you know, likely nominee for the republican party. host: have you spoken with mitt romney?

guest: i have off and on during the many months. host: have you talked about endorsing him? guest: not directly with him. host: and do you have a plan for that, that you're willing to share with us? guest: i have no plan. we still have a convention to go to. host: talk about the convention. we have questions on our facebook page asking what you're going to be doing in tampa. mark asks -- will you be speaking at the convention? whom will you invite to speak if you were scheduling the convention? guest: well, i am scheduling a rally before the convention, and that will be on sunday. i'll be speaking at that rally. i have to have my own in order to speak. i have not been invited to speak at the national convention. it doesn't mean i absolutely won't be speaking at the national convention. as of now i have not been invited to speak there. host: and who would you like to hear from, if mark had his way and you got to speak the roster

? guest: individuals who are probably more academically inclined than politically inclined. in our rally that we're having, we're having people around the country who have been successful during our campaign who have become state chairmen, who have become nominees for senate races, have great potential and some are in office already. there's quite a few. it's usually those that have been successful with the same message that i've been talking about and those individuals who believe in personal liberty, a different foreign policy, an understanding of the federal reserve and a market economy. and we put this all together, and there's quite a few and with the risk of missing somebody, i'll just say there's quite a few and they can look up the list of people who will be coming to our meeting on the 26th of august. host: story from "usa today," describe the status of your

campaign and says you're no longer actively campaigning for president but you have not officially suspended your bid. you're still in the running. to that degree. here's the latest goop convention delegate count that we see from the associated press with mitt romney, 1,522 delegates. congressman ron paul, 158. will you share any more with us about what your plan is at the convention in terms of releasing delegates or sharing your message of what you'd like to see at tampa come out of the republican party? guest: well, i look at this differently. it's not like i own my delegates. i don't tell them what to do at all. at the convention will probably clarify the numbers because the way we count up all our delegates and all our alternates and people there that might not be able to vote for me, it's closer to 500. that's a significant amount of people who will be participating in the process

and be participating in the platform. so we'll just do what we can to promote what we believe in and what we think republicans have said they believe in because for years and years they've argued they believe in limited government and the group of people that will be attending the paul conference and our delegates, believe me, they are not looking for bigger government. this country doesn't need bigger government. and republicans, we profess we want less government but we actually believe in it. we don't want to just cut on the proposed increases, and that's all that's happened for the last 30, 40 years, no matter who's in office, it's always tinkering around edges. we want to change the philosophy of this government. it's the philosophy of liberty. it's the philosophy of the constitution and defending everybody's individual rights. host: congressman ron paul. let's hear from richard who's a republican in indiana. good morning, richard. caller: yes. good morning.

two questions. first, it was intended for the previous speaker, but i got put on hold until now. first is campaign finance and the other is morality of campaigning. i'd like to ask, why is the huge cost to the media, the press put into this equation on campaign financing? i'm not talking about dues. i'm talking about political analysis of the news. the amount of money contributed by fox news and the liberal media to this whole campaign business is millions of dollars. that is not figured in this equation and it ought to be. host: let's get a response from congressman paul. guest: i had a great point because people look at this very superficially and people say, why is all this donation

and lobbying efforts? millions and millions of dollars. that's because government is too big and the politicians are yielding to the temptation of being influenced by money. but then they come along and say, there's too much money and too many special interests so therefore we have to write another law and say people can't do that. but his point is, ok, let's say corporations and individuals can't spend a penny. well, go downground and spend it one way or the other. but the whole thing is, let's say you take all the corporations out of the money and all the private money out and you still have the media. then you have the left wing and the right wing on their news and their corporation, why should they have a free ride on this? and so i would say that you don't solve a problem by more regulations telling people how to spend their money. you do it by shrinking the size of government so there's no incentive to go to the auction. that's what government is is a big auction, auctioning off all the benefits and all the privileges and unless you have

purity of thought of everybody in washington, believe me, that problem is going to exist. the shrinking of government but just to regulate private financing and not -- then allowing the corporations who run all the tv companies, then they would have free rein. host: new york on our independence line, good morning, preston. caller: good morning, libby. how you doing? host: you're on with congressman paul. caller: i want to echo the spirit of that earlier tweet you have and also i agree with richard to some extent. you want congressional oversight for the fed, right? guest: that is correct. caller: congress is broken. what are you thinking? it's so locked up by politics that it's almost completely dysfunctional. i don't get it. i tell you what, i will accept that congress can have oversight of the fed when congress can get its act together. but first thing congress should be concentrating on is something like more realistic

like lobbying reform or campaign finance reform, that's far more realistic and doable, even in this ridiculous environment we have now. i think it's more important. why don't you, younow, try something radical like working with jake abramoff or that guy, team up with that guy who seemed to turn his life around and is focused on lobbying and nobody knows it better than he does? you're just not going to get this oversight of the fed through, sir. guest: well, i think you're just -- you're finding an excuse to duck the issue. yes, i think congress has a lot of shortcomings. if you are going to straighten out congress, just straighten them up and have them do their responsibility. as a matter of fact, the g.a.o. is one of the few agencies of government that has a half decent reputation. so i would say that's your best goal. i mean, you don't have the members of congress actually doing it. what you have is the g.a.o. what you have is the g.a.o. doing an