Senate Floor Speech
Senator Kay Bailey Hutchison
May 11, 2006 -- Page: S4397

TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005--CONFERENCE REPORT

MRS. HUTCHISON. Mr. President, I appreciate the opportunity to speak on this very important legislation. I thank Senator Grassley and Senator Baucus for bringing us this bill. It was hard-fought. Tax cuts always are. There are always those who will say: Oh, this only helps the rich. There are always those who will say: This is going to increase the deficit. Let's talk about what this bill in fact does.

This is a bill which will continue the tax cuts we passed in 2001 and 2003, the tax cuts that have spurred the growth in our economy, that have created jobs, the tax cuts that caused the stock market to immediately turn from being stagnant or worse to being on the brink of record highs for the history of the stock market. If we don't pass the extensions that are in the bill before us today, it would be like telling Wall Street and telling the investors: We are going to increase your taxes; we are reserving that right. That would immediately put a freeze on this economy, and it would stop the incredible prosperity we are seeing in our economy today.

We can look at what has happened to our economy since September 11, 2001, when our tourism industry was severely impacted and our entire airline industry was shut down. Commerce was affected. We had a huge hit to our economy in 2001. Then we have had the war on terror, trying to keep terrorists who attacked our country in 2001 from being able to come back and hurt Americans again, and that has caused us to have to spend billions of dollars more. Then we were hit with Katrina, the worst hurricane in dollar damage in the history of our country, and Rita following that. We have had huge hits on our economy. Now we have gasoline prices and energy prices that are going through the roof. But our economy is strong. Our economy is strong for several reasons, one of which is that we have kept taxes low, particularly on dividends and capital gains.

So when someone says these are tax cuts for the rich, the fact is these are tax cuts for small business. These are tax cuts which have allowed them to start hiring people again and have spurred our economy to new highs. With this bill, we will prevent the egregious reach of the alternative minimum tax on our middle class by extending the higher exemption levels we approved last year. We also make an incredible investment incentive for the younger people in our country with the ability to convert Traditional IRAs to Roth IRAs.

If I were only 35 years old, I would be so excited because I would know that under the provisions of this bill I could provide for my own retirement security through the use of the Roth IRA. The Roth IRA has been limited in use with a salary cap of $100,000 for conversions. If you make more than that, you can not convert from a Traditional IRA to a Roth IRA, which allows you to put money in and then earn interest tax free until your retirement, and you can take it out tax free. That is a nest egg which could make every American self-sufficient because you can just put in the $3,000 or $4,000 every year, and once it is in there it is tax free, expanding its scope, interest rates going back into the pot, and then you can take it out without paying taxes. The traditional IRAs are not that way; you do have to pay taxes. This bill allows people who have started a Traditional IRA to convert it to a Roth IRA without income limitations. That is going to help the young people of our country because any of them, if they are working or if they are married, will be able to do this.

Tax cuts have created 5 million new jobs since they were last passed in 2003.

Mr. President, I hope we will pass this bill. It is a good bill for our country, a good bill for our economy, and it is going to put money in the pockets of the people who are earning it instead of sending it to the Federal Government.