The Book of Ron Paul
1998 Ron Paul Chapter 56

Bankruptcy Hierarchy — Part 1

10 June 1998

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Congressional Record (Page H4403)   Cached

The Chaiirman. For what purpose does the gentleman from Texas rise?

1998 Ron Paul 56:1
Mr. PAUL. I have an amendment at the desk.

1998 Ron Paul 56:2
The Chairman. The clerk will designate the amendment.

1998 Ron Paul 56:3
The Clerk. Amendment number 7 printed in House report 105573 offered by Mr. PAUL of Texas.

1998 Ron Paul 56:4
The Chairman. Pursuant to House Resolution 462 the gentleman from Texas (Mr. PAUL) and a Member opposed will each control 5 minutes. The Chair recognizes the gentleman from Texas.

1998 Ron Paul 56:5
Mr. PAUL. Thank you, Mr. Chairman. I yield myself such time as I may consume.

1998 Ron Paul 56:6
Mr. Chairman, my amendment is not a complicated amendment. It merely redesignates the priorities of governments as they line up in the receiving end of a bankruptcy. These are unsecured debts.

1998 Ron Paul 56:7
Basically the way the law states now and the way the bill is written is that the IRS is the top government agency that’s going to receive the money, and then the State and then the local government. And my suggestion in my amendment is very simple and very clear and makes a very strong philosophic point, is why should we hold the IRS in such high esteem? Why should they be on top of the list? Why should the money leave the local districts and go to Washington? Why should it go into the coffers of the IRS, funding programs that are basically unconstitutional when there are so many programs that we are not doing and take it out of our school districts?

1998 Ron Paul 56:8
If we reverse the order, the local government gets the money first, the money that would be left over from the bankruptcy, then the State government, and then the Federal Government. And this merely states the point, which I hope we can get across someday in this Congress, that the priority in government should be local government, not a big, strong Federal Government.

1998 Ron Paul 56:9
Indeed, today there is a lot of resentment in this country against the IRS and the way we spend money up here, and this emphasizes a very important point, that money should be left in the district, money should be left in the States, and at last resort, the money should come here to the Federal Government.

1998 Ron Paul 56:10
Now, one of the arguments used against this amendment is, “Uh-oh, it’s going to cost the Government some money.” Cost the Government some money by leaving the money in the State or locally, or leaving it in the pockets of the American people as that same argument is used in tax increases? Hardly would it be difficult for the small amounts, I don’t even know the exact amount of money that might be lost to the Treasury because some of these funds might not flow here in this direction, but it can’t be a tremendous amount. But what’s wrong with the suggestion that we just cut something?

1998 Ron Paul 56:11
There are so many places that we can cut. Instead, all we do around here is look around for more places to spend money. Today we’re even talking about increasing taxes by three-quarters of a trillion dollars on a tobacco program. We are always looking for more revenues and more spending programs and we are worried about paying for a little less revenues coming into the Federal Government.

1998 Ron Paul 56:12
So, once again, this amendment is very clear. It states that in the order of designating these funds on unsecured creditors, local government would get the money first, then State government, and then the Federal Government.

1998 Ron Paul 56:13
In the 1980s, in the early 1990s, when Texas and California had trouble, money flowed up here in the middle of bankruptcies at the same time school districts were suffering, putting a greater burden on local school districts. So this is to me a very clear principled position to state that we should have local government, not Federal Government, that we should not enhance the power and the authority of the Federal Government and certainly should not put the IRS and the Federal Government on the top of the pecking order. They should be at the bottom where they deserve to be. So I would ask my colleagues to endorse this legislation and this amendment to this legislation. I support the legislation. I am hopeful that this amendment will be passed.

1998 Ron Paul 56:14
And I reserve the balance of my time.


1998 Ron Paul Chapter 56
This speech continues in 1998 Ron Paul Chapter 57. at last resort probably should be as a last resort.

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