Date: 1981-07-29
Speaker: DE LUGO (democrat)
Chamber: H

Mr. Chairman. seldom In this historic forum has a more significant vote been called for from this body. The breadth of this Lax legislation Is awesome. the implications of the vote will be even more so. And In the midst of this Intense Issue. virtually buried beneath the weight of national politics Involved in this debate. lies a matter of critical Importance to a relative handful of people living under the American flag in two of -its territories: the U.S. Virgin Islands and Guam. In H.R. 4242. the Democratic tax package. a bill of nearly 400 pages. are contained a few wordstwo sentences to be exactthat spell the future for those people. Those two sentences will compensate the U.S. Virgin Islands and Guam for direct revenue losses they will suffer as a result of the nationwide tax cuts. Without those two sentences. the U.S. Virgin Islands and Guam would have to bear a double burdendirect revenue losses from the tax cuts and program reductions in the budget cuts. It Is a double burden that these two territories can least afford to cope with. On January 20. 1981. the day of the Inauguration. I wrote to the President a detailed explanation of the unique and damaging Impact the combination of program reductions and tax cuts would have on the two territories. I urged the President to reimnbuse the territories for the direct revenue losses resulting from the tax cutsa carefully structured program for which the precedent had been set *under the Ford administration. That precedent was set in.- 1976 with the backing of both parties In both Houses. On March 15 of this year. in the Interior Committees report to the Budget Committee. the Republican members of the Interior Committee. went on record as supporting and In fact urged the utilization of that precedent for this administrations tax cuts. I would like to quote from that Republican report: over the years. It has become the policy of the Committee on Interior and Insular Affairs to regard with sympathy the critical needs of the citizens in the offshore areas. too often. it Is forgotten that their stand. ardofliving approximates a level twofifths below that of Americas poorest State. Economic development. health care programs and educational assistance in the territories are more severely restrained than on the mainland because of vast distances. inadequate infrastructures and soaring inflation * * . We do not wish the governments of Guam and the Virgin Islands to be doubly jeopardized by Federal economic policy over which they have no control 04* . Consequently. we appeal to the Reagan administration to take note of this fact and appropriately compensate the governments of Guam and the Virgin Islands for revenue loss as a result of changes In the national taxing authority. On June 25. 1981. the chairman of the Appropriations Subcommittee on Interior in his report stated that "budget reductions proposed by the administration are bound to have a greater and unfortunate effect on the flag territories as well as the Trust Territory of the Pacific Islands than in local government entities." The chairman noted that income tax rev-. enues are expected to decrease by as much as 25 percent. "The Impact of actions now in Congress may be most devastating". he stated. On June 25. 1981. the chairman of the Senate Committee on Energy and Natural Resources which has Jurisdiction over the territories stated on the floor of the Senate: 0 0 I am. concerned that we may very well be unintenti onally harming the territories and creating a situation whichwe are powerless to remedy. During this years appropriations hearing I asked the administration witness what the total levels of Federal reduction would be to the territories under the Presidents program and what would be the effect. The witness did not know * ** 0* * In addition to the uncertainty of pro. gram cuts. the territories. as a result of Federal law. operate under a mirror tax. The proposed Federal cuts will automatically be mirrored In the territories resulting in decreased revenues at the same time that Federal assistance Is being reduced. Mr. President. I am prepared. as chairman of the Committee on Energy and Natural Resuurces and chairman of the Subcommittee on Interior and Related Agencies of the Appropriations Committee. to reassume the total responsibility for all programs In the territories If that is the direction we are going. But If that Is the direction we are going. the budget must adequately reflect the needs of the territories and the Increased responsibilities of the Secretary of the Interior. There Is very little flexibility under the reconciliation process to accommodate this. I would hope that this will not happen. but if It does. I hope that sufficient leadtime is given so that the necessary authorizations can be enacted. I would like to state. however. that It Is MY Intention within whatever constraints there. may be. to Insure that the Congress properly fulfills it responsibilities for the U.S. citizens and other residents of the offshore areas* 4*0 On July 16. 1981. the House Ways and Means Committee included In Its tax package. now bill 4242. a provision to reimburse the U.S. Virgin Islands and Guam for tax cut revenue losses. That amendment was adopted without objection. I detail this history to emphasize the strong bipartisan support that not only now In this Congress. but historically has been given to this reimbursement provision for the U.S. Virgin Islands and Guam. and to underscore the point that despite the endorsement of leaders of both parties. this administration has failed to Include such a provision In its tax package. These two territories represent the outermost reaches of the American frontierone in the Pacific. Guam. and the other half way around the world in the Caribbean. the U.S. Virgin Islands. The spblere of American Influence in these two distant areas revolves not around Washington or the Midwest or California. but around these two territories. The perception of America In those hinterlands is built upon those territories. How Ironic. how paradoxical. that at the same time the administration speaks of developing a new policy In the Caribbean. It literally ignores the impact Its own domestic policies will have on its own territory in that region. The U.S. Virgin Islands cannot bear the double burden of program cuts and revenue losses. This Is a fact. The leadership of both parties In both Houseri of Congress has recognized that f %ct. Does this administration not heed the advise of its own party leaders In the House of Representatives anti the Senateleaders with years of experience in dealing with the territories? If It does not. then this Is an ominous new beginning indeed. I would urge the passage of the tax bill as reported out of the Ways and Means Committee. I would urge this administration to reconsider its position. to listen to the advice of Its own party leaders. and to recognize that we are all Americans. all under one flag. all wjlling to speak out for Americaand all needing to be heard.