Statement in Congressional Record by Rep. Tom Tancredo (R-CO).
Re: Introduction of the "E-Rate Termination Act."

Congressional Record, February 10, 1999, Page H571.
Date: February 10, 1999.
Source: Library of Congress.

Mr. TANCREDO. Mr. Speaker, I rise today with encouragement that this House just passed the Mandates Information Act, which will help to safeguard us from making unfunded mandates to the private sector.

Well, I am here today to do just that, to address an unfunded mandate that our constituents pay for every month in their phone bills, the E-rate program, sometimes known as the `Gore Tax,' because it has garnered the Vice President's support.

As you know, Mr. Speaker, the intent of the `Gore Tax' is to ensure that every school and library is connected to the Internet. But the FCC pays for this program by getting mandatory contributions from phone companies and others. If you look at your phone bill, you will see that mandatory contribution passed on to you, the consumer, as part of the Universal Service Charge.

Mandatory contributions. Mr. Speaker, let us be honest. If it looks like a tax, it quacks like a tax, it is a tax. We can say that our annual `mandatory contributions' to the government are due on April 15th, but we know different.

I have a chart here that shows how it works. First the FCC forces this mandatory contribution on long distance phone companies and others; second, those companies make their massive contributions to the Universal Service Corporation here. That is currently capped at $2.25 billion each year, this mandatory contribution.

Only here, only in government, only at the Federal Government, could we actually come up with these oxymoronic statements, that this is a mandatory contribution.

But what the Vice President and other E-rate supporters do not want you to know is that this is a hidden tax. Consumers are forced to pay this charge through their monthly phone bills. This is where the hidden tax is found, and I would like to eliminate it.

Mr. Speaker, Americans today are taxed at the highest levels in history. In fact, the Congressional Budget Office recently reported that Federal tax revenues have reached a peacetime record level of 20.5 percent of the Gross Domestic Product.

But, Mr. Speaker, this is not just a hidden tax, it is also an unnecessary tax. I have some statistics here from the Congressional Research Service that came before the `Gore Tax' was created.

Now, remember this tax was put on, it was snuck through essentially in order to provide technological support and technology support for schools, in order to encourage them to get on to the Internet and to put computers in classrooms.

But before this tax was ever passed, according to the Congressional Research Service, the 1997 student-to-computer ratio in this country was 8-to-1. Also in 1997, 78 percent of all schools were connected to the Internet, remember, before this tax ever came into existence.

Mr. Speaker, the President has just asked for another $766 million in his Department of Education's budget for education technology alone. That is three-quarters of $1 billion, and I quote his own budget summary, `as a part of the President's proposal to connect all schools to the Internet and put a computer in every classroom.' Mr. Speaker, this is the `Gore Tax,' and what is this `Gore Tax' program? Is there not some duplication in a multibillion-dollar effort to put Internet in the schools?

In fact, there are over 20 Federal programs aimed toward this effort, not to mention hundreds of State and local private initiatives.

Last year, the Committee on Appropriations reported that the Department of Education cannot account for the money it now spends in education technology. They cannot explain where this money goes. In fact, the Committee on Appropriations said that it fears millions of dollars might go unspent each year.

Today, I am introducing the E-Rate Termination Act, and I would like to thank the 13 original cosponsors of this bill for recognizing the dire need for change. By eliminating this hidden tax, we can focus on honest and realistic ways to address our schools' and libraries' technological needs, and I ask for my colleagues' support.