E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 105 CONGRESS, FIRST SESSION

Vol. 143 WASHINGTON, MONDAY, NOVEMBER 3, 1997 No. 151 House of Representatives The House was not in session today. Its next meeting will be held on Tuesday, November 4, 1997, at 10:30 a.m. Senate MONDAY, NOVEMBER 3, 1997

The Senate met at 12 noon, and was day’s activities, today the Senate will The PRESIDENT pro tempore. The called to order by the President pro be in a period of morning business until clerk will call the roll. tempore [Mr. THURMOND]. 2:45 p.m., with Senators permitted to The legislative clerk proceeded to speak therein for up to 10 minutes call the roll. PRAYER each. (Mr. GRAMS assumed the chair.) The Chaplain, Dr. Lloyd John At 2:45, the Senate will proceed to ex- Mr. BYRD. Mr. President, I ask unan- Ogilvie, offered the following prayer. ecutive session to consider the nomina- imous consent that the order for the Gracious God, thank You for this mo- tion of Charles Rossotti to be Commis- quorum call be rescinded. ment of prayer in which we can affirm sioner of the Internal Revenue Service. The PRESIDING OFFICER. Without Your call to seek unity in the midst of Under a previous order, there will be 3 objection, it is so ordered. differences in parties and politics. So hours of debate on that nomination, Mr. BYRD. Mr. President, I may take often we focus on what separates us with a vote occurring at the expiration just a few minutes longer than 10. I ask rather than the bond of unity that of that time. Therefore, Members can unanimous consent that I may be rec- binds us together. We are one in our anticipate the first rollcall vote at ap- ognized for such time as I may require. calling to serve You and our Nation proximately 5:45 p.m. The PRESIDING OFFICER. Without The Senate may also consider and and in the belief that You are the ulti- objection, it is so ordered. complete action on any or all of the mate and only Sovereign. You are the Mr. BYRD. I thank the Chair. following items: D.C. appropriations magnetic and majestic Lord of all who bill, FDA reform conference report, the f draws us out of pride and self-serving intelligence authorization conference attitudes to work together for You. We FAIRY TALES OF FAST TRACK: report, and any additional legislative find each other as we join our hearts in THE MYTH OF TRADE NEGOTIA- or executive items that can be cleared TIONS PARALYSIS gratitude for the privilege of leading for action. Therefore, there may be ad- our Nation. Keep us so close to You and ditional votes following the 5:45 p.m. Mr. BYRD. Mr. President, I wish to so open to one another that we will vote. speak this morning on the subject: the have a week of great progress. Help us As a reminder to all Members, on ‘‘fairy tales of fast track: the myth of to work expeditiously and with excel- Friday, cloture was filed on both H.R. trade negotiations paralysis.’’ lence for Your glory and our Nation’s 2646, the A-plus education savings ac- It has been said that if one wants a good. Through our Lord and Saviour. count bill, and the motion to proceed lie to stick, just keep repeating it, Amen. to S. 1269, the fast-track legislation. keep shouting it, until it just seems to f Those cloture votes will occur on Tues- become a reality. On the matter of day morning at a time to be announced fast-track procedures for congressional RECOGNITION OF THE ACTING later today. Therefore, all first-degree handling of trade agreements, we have MAJORITY LEADER amendments to H.R. 2646 must be filed a whopper being shouted from the The PRESIDENT pro tempore. The by 1 p.m. today. Needless to say, all housetops in congressional testimony able acting majority leader, the distin- Senators should expect rollcall votes and on the op-ed pages of our leading guished Senator from Minnesota, is during every day of the session this newspapers by people who surely ought recognized. week as we attempt to complete action to know better. An example of what I f on the very important issues before the am talking about appears in the Wash- Senate. ington Post today, authored by our es- SCHEDULE Mr. President, I see no other Sen- teemed former colleague and former Mr. GRAMS. Mr. President, on behalf ators on the floor, so I suggest the ab- Senate Republican leader, Mr. Bob of the majority leader, to outline to- sence of a quorum. Dole, who engages in vacuous, vapid

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S11577 S11578 CONGRESSIONAL RECORD — SENATE November 3, 1997 vaporings in insisting that other na- I do not think it hurts American lead- short indeed and the Founding Fathers tions will not play ball with us on ership for our trading partners—some were not at all enamored with the idea trade if they think Congress is going to of whom are trading adversaries when of a President of the United States take a close look at what is negotiated, they do not implement in good faith gathering authority unto himself like and, Heaven forbid, even have an op- the agreements they sign with us and they had experienced with King George portunity to consider amendments to continue to restrict access to their III of England. So this exclusive power trade agreements negotiated by the ad- markets for American goods—to know was not centered on the legislative ministration. that the U.S. Senate is looking over branch by whim or by fancy. There Here is what Mr. Dole says, in part: their shoulders. It could be useful bar- were weighty considerations of a sys- The fate of fast-track legislation this fall gaining leverage, and if I were nego- tem founded on carefully balanced may determine whether the President ever tiating an agreement I certainly think powers. will negotiate another trade agreement. it would be advantageous to have the Therefore, let’s not get stampeded by Let us take a look again at that pro- weight of future Senate scrutiny to all the alarm bells, all of the Roman found statement by Mr. Dole: dangle over the head of a tough bar- candles, all of the fire crackers of lost The fate of fast-track legislation this fall gainer on the other side of the table. American leadership, of preposterous may determine whether the President ever The third point that our good friend assertions about the behavior of our will negotiate another trade agreement. Mr. Dole makes is that somehow our trading partners if we don’t steer our Now, there is an assertion. One might trade negotiators are cooling their constitutional system further in the di- get the idea that fast-track consider- heels and waiting for the Senate to rection of executive power. The scare- ation of trade agreements is normal give assured protection to their prod- mongers say that the Sun rises in the practice, and that it is the normal ucts before beginning their negotia- west. I don’t believe it. I don’t believe practice in considering trade agree- tions. Mr. Dole says: the Sun rises at the western end of ments, Mr. President. But, fast-track Some may ask why it matters whether Constitution Avenue. If it does, that’s consideration of trade agreements is as other countries beat us in securing trade a very recent phenomenon. rare as hen’s teeth. It has been done all pacts with developing nations. What are we If our trading partners truly want to of only five times since the first very waiting for? make market arrangements for new limited fast-track authority was grant- Now, there is a profound question: flows of goods and services with the ed by the Congress in 1974. So, in near- What are we waiting for? Mr. Dole sug- United States, we certainly have ly a quarter of a century, we have used gests that the Senate is holding up ne- learned that they will do so, even in fast-track consideration all of five gotiations. And nothing could be fur- the reality of scrutiny of the Congress times on this floor. ther from the truth. The administra- over those deals. That has not stopped Can anyone guess how many trade tion already has authority given to it any country or group of countries from agreements have been negotiated in in law to negotiate trade pacts. This negotiating with us to date. So why that quarter of a century? The answer negotiating authority was most re- should it happen now? Let us not short- is, of course, hundreds—hundreds. We cently provided by the Congress in the change ourselves. Don’t belittle our- have had fast track on this Senate 1994 GATT agreement, or Uruguay selves. Let’s not lose confidence in our- floor five times in a little over 23 years, round, and it is good into the next cen- selves. This is America, the engine of but in the meantime, hundreds of trade tury. world growth; the largest market, the agreements have been negotiated. And I do not notice any crippling of the most coveted market in the world! It is the Clinton administration, as a mat- administration’s negotiating authority embarrassing and it is wrong to say ter of fact, is quite fond of boasting of or of its ability to successfully con- that the role of the Congress is stand- its record of entering into some 200 clude trade agreements without the use ing in the way of success, damaging to trade agreements, none of them subject of fast track. At the moment, the Unit- our world leadership, or an obstacle to to fast track except the GATT and ed States has been negotiating a so- getting good agreements. And it is ab- NAFTA trade pacts. called multilateral agreement on in- solutely preposterous to maintain that The other clarion call that we hear vestment, MAI, for 2 years, which is other nations will not negotiate with repeatedly from the administration, re- now 90 percent or more complete, with us if we follow our constitutional sys- peated by Mr. Dole again this morning, strong American leadership and with- tem. is the issue of American leadership. out the assurance of fast-track legisla- If trade agreements are in the na- The United States must lead in the tion. It is unclear whether the adminis- tional interests of other nations, they global economy and if Congress wants tration intends to try to get this agree- will be at the table. They will be at the to review and possibly amend trade ment approved by the Congress under table, in my judgment, Congress or no agreements, that’s the end of that. new fast-track approval legislation. Congress. Now, when was the last time Here is what Mr. Dole says: Nevertheless, this immensely com- that Congress rejected a trade agree- Global trade is inevitable, and Presidential plicated and very important multilat- ment or emasculated it beyond further fast-track authority is indispensable if eral agreement has been negotiated international consideration? These ar- America is to lead the community of nations without the benefit—without the bene- guments put forth by the administra- into the next century. fit of a promise of the Senate’s pulling tion, and dutifully repeated—dutifully Another quite profound statement; a black bag of no amendment guaran- repeated by our distinguished former and mind-boggling, indeed. I would sus- tees over its head. Republican leader, are just a pretext pect that we are going to be talking I think we need an analysis of all the for not going through the rigors of de- about American leadership a lot this trade agreements concluded by the ad- fending such agreements, and all parts week, as the Senate reviews the need ministration. Let’s take a look at the thereof, before the elected representa- for fast-track authority that has been scorecard. Let’s see if Mr. Dole is right tives of the people who are going to be requested by the administration. that without the Senate’s passing the subjected to them, certainly affected If a trade agreement is soundly nego- new Export Expansion and Reciprocal by them, and who will perhaps pay for tiated and if it would be clearly bene- Trade Agreement Act of 1997, all is them. ficial to America, I think it is a pretty lost—all is lost. Let’s try to determine I hope that the Senate will have an fair guess that the Senate will approve if the Founding Fathers were com- informed, lengthy, robust debate on it without any amendment; without pletely off the mark when they gave to trade this week. It is high time that even the threat of an amendment. But the Congress authority over the regula- the Senate talked about such agree- the threat of amendments should prove tion of commerce with foreign nations ments; high time that the Senate valuable as additional leverage for ad- in article I, section 8—article I, section talked about the trade deficits that we ministration negotiators on trade mat- 8, of the Constitution, dealing with the are experiencing. ters. Some of these negotiations are powers of the Congress. The Founding My distinguished and informed and pretty tough, and I should think that Fathers did not want the President to most learned colleague, BYRON DOR- the Senate’s careful role in reviewing have this authority, because our GAN, has been talking about this from the product can be used to advantage. Founding Fathers’ memories were not time to time over the long weeks and November 3, 1997 CONGRESSIONAL RECORD — SENATE S11579 months. I have seen him bring charts clude the United States and favor European Now is the time for the president and Con- into the Chamber. I have heard him products. gress to work together and pass fast-track discuss the shortsightedness of our ne- Latin American countries are negotiating legislation. bilateral and multilateral agreements at a gotiators and how we continually let (The writer is former Senate majority rate that will make it unnecessary for them leader and the Republican nominee for presi- ourselves be taken to the cleaners in to wait for the United States. In a region dent in 1996.) trade negotiations. that is projected to be the United States’ f So I hope that we will have a good largest market in just a few years, exceeding debate on trade this week because, as I $200 billion in trade by 2002, we are allowing THE VERY BAD DEBT BOXSCORE say, it’s high time that the Senate competitors to eliminate our natural advan- Mr. HELMS. Mr. President, at the talked about the trade deficits we are tage. If this trend continues without any ac- close of business Friday, October 31, experiencing, about the barriers that tion on our part, we will soon need Latin America as a trading partner more than it 1997, the Federal debt stood at exist for access to foreign markets and needs us. $5,427,225,185,059.66 (Five trillion, four about the real advantages and dis- Emboldened by our inaction, French Presi- hundred twenty-seven billion, two hun- advantages of trade for our economy. dent Jacques Chirac recently declared, dred twenty-five million, one hundred Mr. President, so much for the vacu- ‘‘Latin America’s essential economic inter- eighty-five thousand, fifty-nine dollars ous, vapid vaporings of those who ests . . . lie not with the United States but and sixty-six cents). would have us steer away from the con- with Europe.’’ His comments are indicative One year ago, October 31, 1996, the stitutional authority of the Congress of the growing belief that the United States Federal debt stood at $5,247,320,000,000 and go down that road that we have lacks the political will to seize the lead in trade with developing nations. We must (Five trillion, two hundred forty-seven been traveling on for so long—of taking prove Chirac and other of like mind wrong. billion, three hundred twenty million). a beating in trade negotiations. Some may ask why it matters whether Twenty-five years ago, October 31, Mr. President, I ask unanimous con- other countries beat us in securing trade 1972, the Federal debt stood at sent that the article by former Senator pacts with developing nations. A better ques- $439,947,000,000 (Four hundred thirty- Bob Dole be printed in the RECORD. tion, however, is: What are we waiting for? nine billion, nine hundred forty-seven There being no objection, this article Global leadership has enormous benefits— million) which reflects a debt increase was ordered to be printed in the it increases our security and creates a multi- plier effect for our exports. When we lead, of nearly $5 trillion—$4,987,278,185,059.66 RECORD, as follows: the world accepts our way of doing business (Four trillion, nine hundred eighty- [From the Washington Post, Nov. 3, 1997] and our industrial standards, which, in turn, seven billion, two hundred seventy- GET BACK TO THE FAST TRACK ON TRADE increases U.S. sales abroad. If China or the eight million, one hundred eighty-five (By Bob Dole) European Union beat us into developing mar- kets, they will set the rules by which trade thousand, fifty-nine dollars and sixty- As Congress rushes to complete its work is conducted and influence the evolution of six cents) during the past 25 years. and adjourn this week, I have found myself industry in fast-growing countries to their f in the unusual position of urging my former benefit. colleagues to stay—at least until they pass Given that 96 percent of the world’s con- THE TOBACCO SETTLEMENT legislation giving fast-track trade negotiat- sumers live outside the United States and ing authority to President Clinton. Mr. ROBB. Mr. President, farmers that the global economy will grow at three face a great deal of uncertainty. The During my tenure in the Senate, I often times the rate of the U.S. economy, it is a made the point that we could do more good certainty that many of tomorrow’s high-pay- uncontrollable forces of nature or a by going home and listening to our constitu- ing American jobs will be created through volatile market can destroy a farmer’s ents than by staying in Washington. But the exports. Every $1 billion in new American ex- livelihood without warning. When the decision to give the president fast-track au- ports creates 15,000 to 20,000 American jobs. crops are planted, growers worry about thority is urgent and must be made now. The And, already, more than a quarter of our whether they’ll be enough rain—or too initial steps already have been taken in both economic growth and more than 10 million Houses. Now it is up to the president, his ad- much; whether supply will be too great jobs are the direct result of overseas trade. or demand too small; whether prices ministration and congressional leaders to In order to honestly and thoroughly con- make the case for passage. sider fast track, each member of Congress will be too low, or production costs too Very simply, passing fast track is the right must recognize that the president still must high. For tobacco growers, these un- thing to do. Our nation’s future prosperity— consult with Congress in negotiating trade avoidable concerns were compounded the good jobs that will provide a living for deals and that no agreement will go into ef- when the tobacco industry and the 40 our children and grandchildren—will be cre- fect without being passed by a majority in states’ attorneys general unveiled their ated through international trade. Members both houses of Congress. Fast track is a vote global settlement of tobacco issues on have recognized this reality, on a bipartisan on process, not on substance. It would be a basis, for more than 20 years, giving fast- June 20 of this year. The parties did travesty for the leader of the greatest nation not address how the settlement would track authority to every president from Ger- on earth not to be free to negotiate with his ald Ford to George Bush. counterparts as an equal. affect America’s tobacco growers and Today it is more apparent than ever that The president also needs to lead on this their communities. the debate between advocates of free trade issue. As the leader of his party, as well as Much has happened since that time. and protectionism is over. Global trade is a our nation, President Clinton must step up Congressional hearings have been held, fact of life rather than a policy position. his efforts to persuade fellow Democrats to legislation has been drafted, and the That is why we cannot cede leadership in de- support this initiative. Fast track will not President has reviewed the global set- veloping markets to our competitors pass the House with a few dozen votes from through inaction, thereby endangering tlement. A common theme runs the minority: We need an all-out presidential through these separate actions, and America’s economic future and abandoning push. The fate of fast track legislation this our responsibility to lead as the sole remain- fall may determine whether the president that theme is that tobacco farmers and ing superpower. ever will negotiate another trade agreement. the families and communities that de- During Chinese President Jiang Zemin’s The private sector—the companies that pend on them should not be punished visit, it has been instructive to look at Chi- will create new jobs based on exports—also by comprehensive tobacco legislation. I na’s efforts to expand its export markets and must make more forcefully the case to the believe the President said it best when international influence, not just in Asia but American public and Congress that passing he remarked during his discussion of in our own back yard. China has targeted Ar- fast-track legislation is vital to America’s the tobacco settlement in September gentina, Brazil, Chile, Mexico and Venezuela continued economic growth. as ‘‘strategic priorities’’ to develop bilateral If Congress fails to pass fast-track legisla- that: trade. While our elected leaders continue to tion before adjourning for the year, the dan- We have a responsibility to [tobacco grow- ponder whether we will be fully engaged in ger is that, because of election-year politics ers]. They haven’t done anything wrong. the global economy, China is moving forward in 1998, it will not pass until the 106th Con- They haven’t done anything illegal. They’re to reach free-trade agreements giving Chi- gress in 1999—or even 2001, after the next good, hardworking, tax-paying citizens, and nese goods and services a significant tariff presidential election. By then, the working they have not caused this problem. And we advantage that will eliminate the U.S. edge people of America will have lost unneces- cannot let them, their families, or their in productivity and proximity. The European sarily. communities just be crippled and broken by Union also is working with the Mercosur Global trade is inevitable, and presidential this. And, I don’t think of the public health trading block (Argentina, Brazil, Paraguay, fast-track authority is indispensable if community wants to do that * * * We’re try- Uruguay and associate members Chile and America is to lead the community of nations ing to change America and make everybody Bolivia) to create a partnership that will ex- into the next century. whole. And they deserve a chance to have S11580 CONGRESSIONAL RECORD — SENATE November 3, 1997 their lives, and be made whole, and to go on for retirement, it is appropriate to ducers will no longer face the expense with the future as well. compensate for the decline in value of leasing or buying quota. Once that My staff and I have been working for caused by a radical change in govern- cost of operation is eliminated—which a number of months on a proposal I be- ment policy. represents about 40¢ of the price of a lieve may offer a means of making to- I propose giving quota owners $8/ pound of flue-cured tobacco—the pro- bacco growers whole and providing the pound for their quota. The funds would ducer can be more competitive, both resources necessary to expand eco- be paid out in five annual installments here and overseas. And by being more nomic opportunities in tobacco-depend- of $1.60/pound based on the 3-year aver- competitive, the decline in quota will ent regions. While we have discussed age—1995–1997—of their basic quota. To not be as steep, and growers will not these concepts with various people, I avoid serious tax consequences, which suffer the severe dislocation that a sud- would like to describe it more fully would be the government giving with den drop in quota would create, wheth- now so I can get broader feedback from one hand and taking away with the er that drop is caused by decreased de- interested parties. In putting together other, the funds could be placed in a mand or increased costs of production. this proposal, we have talked to to- tax-deferred 401(k)-type plan, or used I would like to see the creation of a bacco growers, local government offi- tax-free to reduce debt associated with privatized authority that would govern cials interested in economic develop- acquiring the quota. This program the production, marketing, importa- ment, agricultural economists and would convert existing quota into cash, tion, exportation, and consumer qual- members of the public health commu- it would terminate the existing to- ity assurance of U.S. farm produced to- nity. bacco quota system, and a new pro- bacco. This authority, which I’ll call To reduce youth smoking, health ad- gram would be instituted to give grow- the Tobacco Production Control Cor- vocates seek an immediate and sub- ers the right to grow tobacco through poration, could have a varied member- stantial increase in the price of to- the issuance of licenses. ship, and one option would be to have bacco products. If Congress adopts this New Tobacco Program.—It is crucial an authority with 21 members. The strategy, it will have a substantial ef- that we reconstitute some form of sup- members would include the Secretary fect throughout the tobacco-growing ply-limiting tobacco program. Without of Agriculture, the Secretary of Health regions, and I believe we have an obli- one, production shifts to large agri- and Human Services, the Adminis- gation to provide a soft landing for the businesses that are encouraged to grow trator of EPA, the U.S. Trade Rep- people who would be affected. as much tobacco as possible. The price resentative, nine representatives of To- The plan we developed contains sev- for tobacco would plummet, and many bacco Loan Associations, four rotating eral components. First, it would com- communities where tobacco is now representatives of the public health pensate quota owners for the value of grown would be immediately dev- community, one representative from their quota, which is likely to be erod- astated. A supply-limiting program domestic cigarette manufacturers, one ed over time by this government ac- stabilizes the price of tobacco, so that representative form the domestic ex- tion. Second, it would dismantle the wild swings don’t put small growers port leaf dealers, one representative existing Federal tobacco program, out of business, and limits production. from tobacco marketing facilities, one which has been under annual assault, While many agricultural commodity representative from the Tobacco Mar- and reinstitute a privatized supply-lim- programs have moved away from the keting and Quality Assurance Corpora- iting program. Third, it would target supply-limiting approach, I believe it is tion, and one representative from the economic development funds to to- still appropriate in the unique case of agriculture department of a tobacco bacco-dependent communities, to be tobacco. There is no other farm prod- state university. used to attract quality jobs and train uct where the ultimate goal is to in- The Tobacco Loan Associations individuals for them. The effect of crease the cost to consumers, not de- would be comprised of all licensees of these changes, which I will describe in crease it. In addition, the free market each respective type of tobacco. Ini- more detail, would be to give quota isn’t so free in the tobacco industry, tially, licenses would be issued to all holders the value of their asset, guar- because there are essentially only four tobacco growers based on the 3-year av- antee that producers retain a program buyers who have unparalleled control erage—1995–1997—of tobacco they pro- stabilizing the supply and price of to- over the market. To require farmers to duced. The Tobacco Loan Associations bacco, reduce operating costs to the contract individually with the few would issue licenses to control the grower by eliminating the expenses as- large buyers is to put the farmers at a quantity of tobacco production, and sociated with buying or leasing quota, gross competitive disadvantage. would assure compliance by levying make domestic tobacco more competi- The new tobacco program should be fines. Additionally, they would arrange tive, and provide long-term economic privatized to the extent possible. No for financing and administration of development. one enjoys the annual uncertainty that price supports, including the right to Buy-out of quota asset.—Tobacco follows from constant attempts to end receive, process, store, and sell any quota refers to the amount of tobacco the tobacco program. Growers, who U.S. produced tobacco received as col- that can be produced domestically. benefit from the program, should be lateral for private price support loans. Last year, there were 1.5 billion pounds willing to take on the obligation of The Tobacco Marketing and Quality of tobacco quota. Today, quota owned running it. Once all the quota has been Assurance Corporation would be cre- by an individual, which represents the bought out, the new system would ated to determine and describe the proportion of the total amount of do- grant licenses to actual tobacco pro- physical characteristics of U.S. farm- mestic quota an owner has the right to ducers. These licenses would go to all produced tobacco and unmanufactured produce, is an asset which can be producers, whether they were quota imported tobacco, operate a crop insur- bought or sold or leased. Its value has holders, tenant farmers or quota ance program, and assure the physical accrued over time, and for many in to- leasees. There would be no significant and chemical integrity of U.S. pro- bacco-producing regions it is the major cost associated with acquiring the li- duced and imported unmanufactured asset used to pay for retirement. Farm- censes. These licenses would give the tobacco. This would insure that the to- ers acquire quota throughout their farmer the right to continue growing bacco being used in domestically man- lives so they can grow tobacco to sus- tobacco, but unlike the previous sys- ufactured tobacco products is of the tain their families, and then in retire- tem that right could not be bought or highest quality and is free from prohib- ment sell or lease it to others for in- sold or leased. In other words, that li- ited physical and chemical agents. The come. A substantial and immediate in- cense, unlike quota, would not be a liq- Quality Assurance Corporation would crease in the price of tobacco products uid asset. If the grower decided to stop consist of a CEO hired by the Tobacco will decrease demand and will reduce exercising the right to produce granted Production Control Corporation and a the amount of quota. This erodes the by the license, the license would be staff experience in the sampling and value accrued by quota-holders, as surrendered to the issuing authority, analysis of unmanufactured tobacco their proportionate share declines with which could then reissue the license to and capable of collecting data and demand. Since so many have invested another grower. By wringing the value monitoring tobacco production and in this asset, many of whom rely on it out of quota through the buy-out, pro- consumption information. November 3, 1997 CONGRESSIONAL RECORD — SENATE S11581 These are the elements that could will be required to target a certain per- years, truly great men and women of constitute a new tobacco program. centage of the funds to the most to- our age have appeared in the ballroom Under this proposed program, once the bacco-dependent counties as deter- of the Waldorf-Astoria Hotel. Kings, quota holder has received the value of mined by their proportionate share of prime ministers—Winston S. Churchill the asset, a new system of regulating the amount of tobacco produced annu- was the 1947 speaker, in the company of the production of tobacco would be cre- ally. This approach combines regional James V. Forrestall—and Presidents or ated. This approach honors the value of planning with local investment. Presidential candidates by the score. It quota, retains the price stabilizing ben- The funds can only be used for spe- fell to me to write the first draft of efits of the tobacco program but elimi- cific purposes, such as improving the Averell Harriman’s address when he nates the current costs associated with quality of all levels of education in the was Governor of New York; it was, I do acquiring quota, making domestic to- region, promoting tourism through believe, a distinction he treasured ever bacco more competitive in the future. natural resource protection, construct- after. And now we have had Buffalo’s I’d like to acknowledge the insightful ing advanced manufacturing centers, gift to the Nation, Timothy J. Russert. contribution of Henry Maxey, a to- industrial parks, water and sewer fa- This year the speaker was Timothy bacco grower from Pittsylvania Coun- cilities and transportation improve- J. Russert, Moderator of ‘‘Meet The ty, who first presented this idea to a ments, establishing small business in- Press,’’ which, come to think, is cele- member of my staff in a meeting a few cubators, and installing high tech- brating its 50th anniversary just now. months ago in the Halifax office of Del- nology infrastructure improvements. Mr. Russert was by turns irreverent egate Ted Bennett. While I’ve gotten We will need to insure, however, that and riotous. But his purpose was pro- input from an number of people since these funds are not used to reduce the foundly serious and, if you will, rev- then, Mr. Maxey should be credited amount of funding that would other- erent. It is something Al Smith would with getting the ball rolling. wise be provided by the local, State or very much wish to have had said. We Economic Development.—I would like Federal governments. are just now in a phase of considerable to devote $250 million annually for eco- Whenever there is a major shift in a self-congratulation about American so- nomic diversification in tobacco-de- program like the one this proposal con- ciety. A world away from the slums pendent communities. Unfortunately, templates, we need to be concerned and factories that Smith, with his the biggest export in many of the to- about providing a smooth transition. Tammany colleagues Robert F. Wagner bacco-growing regions is the children. In fact, the uncertainty created by the and James A. Foley, along with They leave the area because there mere possibility of major tobacco legis- Frances Perkins and, of course, Frank- aren’t enough high quality jobs in the lation will undoubtedly affect tobacco lin D. Roosevelt helped transform. A community. Tobacco legislation pro- growers next year, who expect a seri- world at once vastly improved, and vides us a unique opportunity to ad- ous decline in quota because these is- grossly degraded. For in the course of dress this situation. The economic de- sues remain unresolved. To make sure resolving so many difficulties in our velopment funds should be used for two that current producers can survive public life, we have seen a near-to-in- purposes: attracting quality jobs and until this new system is implemented comprehensible collapse in our family training people to fill them. over the 5-year buy-out period, we lives. As Mr. Russert states: I believe that economic development should consider giving a minimum of At the turn of this century, just three activities are best generated from income protection during this period. short years from now, there will be seventy those most familiar with a commu- One option would be to add protections million children under the age of eighteen nity’s needs. Generally speaking, I be- in the event tobacco quota falls by living in the United States. More than a lieve that economic development funds more than 10 percent from 1997 levels. third of them, one in three, nearly twenty- should go to counties to carry out If that occurs, tobacco producers would five million, will have been born into single those activities that best suit their be eligible for a $1/pound payment for parent households. needs. I would envision that the funds lost quota from their 1997 level. This is This is the central challenge to would be distributed to localities based especially important to farmers oper- American institutions in the genera- on their proportionate share of the ating without much margin, as we tion to come. Doubly so in that Con- amount of tobacco produced annually, make the transition to a more com- gress and the President have chosen to which is a rough approximation of how petitive marketplace. eliminate the Social Security Act pro- dependent each community is on to- I hope that these ideas generate some vision for dependent children, a drop- bacco income. In order to foster long- discussion and ultimately I intend to dead date not 4 years away. range thinking and coordination in the introduce legislation incorporating Can anyone imagine Al Smith or his region, the communities should de- these ideas. My purpose is to find a Industrial Commissioner Frances Per- velop and submit economic develop- mechanism that recognizes the changes kins doing such a thing! One suspects ment plans. In the case where an inde- facing the tobacco industry, and pro- that neither can Mr. Russert, but this pendent city is surrounded by a to- vides some degree of certainty to to- is an unnecessary speculation. What is bacco-dependent county, but doesn’t it- bacco growers and their communities necessary is that his urgent and cogent self produce tobacco, representatives so they are not faced with cataclysmic words be read and absorbed as widely from the city should have a voice in upheaval as a result of those changes. as possible. the development of the county’s eco- I look forward to working toward To this end, Mr. President, I ask nomic development plan, due to the this particular goal with colleagues unanimous consent that the full text of economic interdependence of the two who are interested in this particular this year’s address to the Al Smith din- independent governments. challenge. ner be printed in the RECORD. In some circumstances, counties have f There being no objection, the mate- banded together to form regional eco- rial was ordered to be printed in the nomic development commissions, like 52ND ANNUAL AL SMITH DINNER RECORD, as follows: the A.L. Philpott Southside Economic Mr. MOYNIHAN. Mr. President, for ADDRESS BY TIMOTHY J. RUSSERT Development Commission in Virginia. half of our century—52 years—one of What an honor to be here. The roster of In that case, the commission should be the notable events in the life of New previous speakers is filled with luminaries. given the authority to coordinate the York City has been the annual dinner They are from a world I report on—the world economic development funds, allowing of the Alfred E. Smith Memorial Foun- of Washington politics. the various counties to benefit from a dation, sponsored by the Archdiocese of But for some curious reason, a strange fate regional approach. Such an approach New York, and presided over by the seems to befall those who have spoken from would avoid duplicative efforts to pro- cardinal archbishop, most recently by this podium. For example, in 1991, your vide the same services or attract the speaker was former White House Chief of His Eminence John Cardinal O’Connor. Staff, John Sununu. I should note, six weeks same industries as a neighbor in the re- The foundation supports the hospitals after appearing here, he was forced to resign. gion, making the funds more effective. of the archdiocese. As he was contemplating his future, legend When coordinating the economic devel- The centerpiece, if you will, of the has it, he approached the revered First Lady, opment investments, the commission evening is the dinner speaker. Over the Barbara Bush, poured out his heart. ‘‘Why is S11582 CONGRESSIONAL RECORD — SENATE November 3, 1997 it,’’ he asked, ‘‘that people seems to take tunity to see the mysteries of that remark- personal motto, which he uttered to the such an instant dislike to me?’’ The First able institution. blessed Virgin after being shot. ‘‘Blessed Lady looked at him solemnly and said, ‘‘Be- Friedman said, ‘‘You’re right. Get the Mother,’’ He said, ‘‘if I live, I will rededicate cause it saves time John.’’ Pope.’’ I said, ‘‘Get the Pope? Friedman, my life to you. Totus Tuus.’’ All Yours. In 1993, Bob Dole addressed the Al Smith that’s a big booking. I used to be an alter The Pope spotted Luke, rushed towards dinner. Months later, he attended a White boy, but there are a few steps in between.’’ him, took him in his arms, held him high, House function for former Presidents. He ob- So I wrote a letter to the Pope, and heard admiring his face, his shirt. Exclaimed over served a remarkable scene. Three of your nothing back. I then faxed it to our bureau and over again, very nice, very nice. I of former speakers, engaged in private con- in Warsaw and had it translated into Polish. course, had an NBC crew standing by, taping versation. Jimmy Carter, Gerald Ford, Rich- I journeyed to Philadelphia and met with the the entire event. I dubbed it into slow mo- ard Nixon. That’s right. Jimmy Carter, Ger- late Joseph Cardinal Krol, God bless him. A tion and shipped it to my Italian mother in ald Ford and Richard Nixon actually talking close friend of the Pope who is also of Polish law. After sharing it with her friends for sev- to one another. In his customary stage whis- descent. He read my letter, was very taken eral hours, even she is willing now to admit, per, Senator Dole blurted out, ‘‘Look at that it was written in vernacular Polish and there is some value in having an Irish son in those three. See No Evil, Hear No Evil, and said, ‘‘Are you Polish?’’ law. But my wish that day in Rome is the Evil.’’ I realized it would be inappropriate to re- same I have tonight. That all our children in In 1950, the year I was born, your speaker spond with anything but the truth. And I New York will be as blessed and loved as my was Vice President Alben Barkley. Five said, ‘‘No, but I’m from Buffalo, some of my own, as your own. short years later, he was the keynote speak- best friends are!’’ Suddenly the phone rang Tonight you have taken an important first er at Washington and Lee University’s mock and Cardinal Krol said, ‘‘Would you like to step. Your dinner tickets will fund pre and political convention, where he concluded his come to the Cathedral? The young Diocesan post natal care for teenage moms and their inspirational address by bellowing, ‘‘I would Boy’s Choir is preparing for Christmas.’’ I babies. But this must only be the beginning of our efforts. At the turn of this century, rather be a servant of the Lord than sit in said, ‘‘There’s nothing I’d rather do than lis- just three short years from now, there will the seat of the mighty.’’ Which was a pru- ten to those little cherubs lift the rafters of be seventy million children under the age of dent thing to say, because he promptly the Cathedral.’’ We went and they were mag- eighteen living in the United States. More dropped dead of a heart attack. But nothing nificent. After about fifteen minutes, Car- than a third of them, one in three, nearly can equal your stellar line up in 1972. Your dinal Krol turned to me and said, ‘‘You twenty-five million, will have been born into guest speakers, Kurt Waldheim and Spiro know, Mr. Russert, my dream is to one day single parent households. Many of them kids Agnew. Who booked that one? What were have these young men sing for the Holy Fa- having kids. And we all know what that you thinking of? ther.’’ And I said, ‘‘This is a Cardinal!’’ means for most of them. Your Senator Pat A quick news update. I can report tonight And having been trained by the Jesuits and Moynihan warned about this thirty-five that President Clinton is feeling a little bet- the Sisters of Mercy, I quickly amended my ter about Chelsea going off to college. He years ago, but the nation did not listen. letter to say, if His Holiness accepts our in- And now we have a generation of children just figured out it freed up another bedroom vitation, NBC will of course be accompanied who will not have a life of love and discipline for fund raising. It’s not fair just to poke fun by the Arch Diocesan Boy’s Choir of Phila- and values, but an existence of drugs and at politicians. We in television news cer- delphia. Who else? Two weeks later the gangs and sickness, and too often, death. Fif- tainly have our shortcomings. It seems we phone rang. It was Cardinal Krol. He asked teen children a day are shot dead in the reduce everything to sound bites, devoid of me to come to Rome and to meet with the United States of America. The health care content or nuance. David Brinkley recently Pope’s advisors. And it was an extraordinary facilities of this nation, of this diocese, are observed, the way television news would re- week as we went from meeting to meeting going to be overwhelmed by these children. port the unveiling of the Ten Command- and ultimately I was lead into a room about Oh how I wish we could change behavior, and ments in 1997, would be as follows: this size. It was empty, but for myself. And try we must. For these children will either ‘‘Moses came down from the mountain top suddenly the door opened, and there stood, be our future work force who respect people today with the Ten Commandments. Here’s dressed on white, the Holy Father, in my and property and get to work on time, or Sam Donaldson with the three most impor- church, the Vicar of Christ. they will be our future crime statistics. tant.’’ And as he approached me, my mind quick- Hopefully someday our society will pro- Yogi Berra said it best after flunking his ly turned from NBC’s ratings and Bryant claim its central mission is to convince our English exam for the third time. I guess he Gumbel’s career to the prospect of salvation. young people to finish school, learn a skill, wanted to go to journalism school. The And you heard this tough, hard-hitting, no- get a job, get married and then have a baby. teacher ran down the aisle, shook him and nonsense moderator of Meet the Press begin In that order. This, I believe, is the most im- said, Yogi, don’t you know anything? He by saying, ‘‘Bless me Father.’’ He ap- portant economic, national security and looked up and said, ‘‘I don’t even suspect proached me, took me by the arm and said, moral issue facing our nation. But in the anything.’’ I’ve had a few of my own hum- ‘‘You are the man called Timothy from meantime, we cannot just ignore the chil- bling experiences. I am a recovering Buffalo NBC.’’ dren in need. That is what Al Smith told us. Bills fan. For four years I took Meet the I said, ‘‘Your Holiness, please don’t ever It’s what John Cardinal O’Connor has shown Press to the site of the Super Bowl. At the forget this face.’’ us. You won’t read about it in the tabloids or last game, in the Georgia Dome, the studio He said, ‘‘They tell me you’re an important see it on TV. He has refused to publicize his director was saying in my ear piece, ‘‘You man.’’ compassion, but your Cardinal has person- have thirty seconds, fill.’’ So I looked into I said, ‘‘Your Holiness, with all due and ally cared for more than one thousand people the camera and I said, ‘‘Well, now it’s in deep respect, there are only two of us in this with AIDS. God’s hands. And God is good and God is room—and I’m a most distant second.’’ Going alone at night, he holds their hands, just. Please God, one time, go Bills!’’ He put his hand on my shoulders, looked empties their bed pans, combs their hair. As I walked off the set, my colleague Tom me in the eyes and said, ‘‘Right.’’ Simply sitting with them in the final days of Brokaw said, ‘‘You Irish Catholics are His Holiness agreed to greet the Today their life. It is called living the gospel. Help- shameless. You can’t pray on the air.’’ I said, Show on live American television, a first. ing the poorest of the poor, the sickest of the I just did, Tom, and you’ll see. Well, the Dal- And I told Bryant Gumbel and Jane Pauley sick. That’s what Al Smith did, and it’s what las Cowboys snuck by the Bills, 52 to 17. As that this would be different. That they had John O’Connor does. And so must we all. I I moped back to the hotel, Tom looked up met Presidents and Kings and Queens and was hungry and you gave me food. I was and said, ‘‘Hey Russert, I guess God’s a Senators and Governors, but never the Pope. thirsty and you gave me drink. I was sick Southern Baptist.’’ But by far, the most ex- Bryant, who happened to be Catholic said, and you took care of me. Words to reflect on traordinary event in my life was when I first ‘‘Don’t worry, I can handle it.’’ as we return tonight to the comfort of the joined NBC in 1984 as the executive in charge Suddenly the Pope appeared on television. Upper East Side, Westchester, Long Island or of the Today program. I had grown up in Buf- It was Bryant’s chance to ask him a ques- wherever. Let us count our blessings but let falo, watching a flickering black and white tion—direct to the people of America. And us share our blessings with vigor and new ur- TV set with then Today cast of Dave Bryant said, ‘‘Your Holiness, these are pic- gency. Garroway and J. Fred Muggs. tures of my children. Would you please bless Tutoring, mentoring, being even more gen- I was determined to reinvigorate the them?’’ erous to the Al Smith Foundation. Catholic Today Show—to travel the program around And Jane Pauley jumping in said, ‘‘I have charities, the inner city scholarship fund. the world, to bring people to places they twins!’’ Together we can redirect lives and probably couldn’t afford to go, or never see in their An extraordinary week from the Vatican even save a few souls. Embrace the spirit of lifetime. Steve Friedman, the Executive Pro- for NBC. I was accompanied by my wife who the happy warrior, Al Smith, and the holy ducer at that time said, you’re right. Where was pregnant. The Holy Father blessed her warrior, John O’Connor. Two men it will al- should we go? I said, in the Spring, nothing womb and said, ‘‘Please bring your baby ways be said, who fought the good fight and better than Italy. The vibrancy, the fashion, back to Rome next year.’’ We did just that, who kept the faith. By the quiet eloquence of the music, the art. And if we time it right, and as we stood in the first row of the Papal their example, they have defined our mission perhaps we could bring our viewers behind audience, we proudly held our son Luke, who here tonight. To nurture and protect the the walls of the Vatican—where Catholics was wearing a white T-shirt with red letters, uniqueness, the dignity, and the preciousness and non-Catholics would have an oppor- Totus Tuus. All Yours. That is the Pope’s of life from beginning to end. November 3, 1997 CONGRESSIONAL RECORD — SENATE S11583 To care and to share. That is our charge. both, is absolutely unthinkable in On the other hand, GATT was tre- That is our challenge. As we leave the 52nd terms of good judgment, as far as I’m mendously important to the State of Annual Al Smith dinner, we remember the concerned. West Virginia. As somebody who is in- words of your speaker from 1960. ‘‘Let us go I can tell you in my own State of terested in trade, I went to Geneva to forth asking His blessing and His help, but West Virginia which is not exactly lo- knowing that here on Earth, God’s work work with some of the international must truly be our own.’’ Thank you. cated on either the Atlantic or Pacific trade folks where the GATT, the Gen- Ocean, that trade and exports are a tre- eral Agreement on Tariff and Trade, Mr. MOYNIHAN. I yield the floor and mendous part of our economy. We have suggest the absence of a quorum. was being negotiated. I worked on anti- tens of thousands of people who are dumping. That is central to West Vir- The PRESIDING OFFICER (Mr. AL- working exclusively because of inter- ginia’s steel industry. I worked on LARD). The clerk will call the roll. national trade. We need to be increas- countervailing duties. That is central The assistant legislative clerk pro- ing that. We need to be opening up new ceeded to call the roll. to America’s trading interests. Also, markets not only as the State of West circumvention. Most people don’t know Mr. BYRD. Mr. President, I ask unan- Virginia but also as a nation. There are imous consent that the order for the what circumvention is. Here is a good about 11.5 million jobs in this country example. Sony television used to make quorum call be rescinded. right now which are exclusively related The PRESIDING OFFICER. Without all of its television sets in Japan, and to international trade. We ought to be then export them to Mexico with ev- objection, it is so ordered. pursuing that. erything done but the front piece f One of the people that I work with was talking with somebody from the glass—not the tube that actually radi- RECESS U.S. Trade Representative’s office the ates the pictures but the front piece of glass. That would be added on in Mex- Mr. BYRD. Mr. President, at the re- other day and that person had just ico and then would be exported into the quest of the distinguished majority come back from a certain part of the United States from Mexico, counting leader, I ask unanimous consent that world—I think, South America—and as a Mexican import. That is cir- the Senate stand in recess until the said that other countries are going cumvention for the purposes of trade hour of 2:30 p.m. this afternoon. ahead and making agreements and cut- law. In the GATT we were able to stop There being no objection, the Senate, ting deals on trade and that they are that. So Sony had to build a plant in at 1:01 p.m., recessed until 2:31 p.m.; bypassing the United States because America, hiring 1,000 American work- whereupon, the Senate reassembled we are withholding fast-track author- ers, to do what they had previously when called to order by the Presiding ity. It is expired. It doesn’t exist. We done in an entirely different fashion. Officer (Mr. ROBERTS). have to reauthorize it. We need to re- Mr. ROCKEFELLER addressed the authorize it. Trade law is important. Section 337 Chair. Somehow, also, the idea that the has everything to do with intellectual The PRESIDING OFFICER. The Sen- United States exists all by ourselves in property protection. It is the future of ator from West Virginia is recognized. this world doesn’t make sense any- our information technology that is at more, much less the U.S. Senate being stake. So we could not even have nego- f able to sit and determine what will tiated the GATT agreement without FAST-TRACK AUTHORITY happen in the world. I think the his- fast track. I’m saying that the Presi- Mr. ROCKEFELLER. Mr. President, I tory of the last week and what has hap- dent of the United States and his team feel very strongly that we should give pened with the stock markets has of negotiators ought to have the right the President fast-track authority be- shown that transactions are inter- to negotiate a critical trade agreement fore we adjourn. He needs fast-track national, they are instantaneous, they as they choose, but then we would have are electronic, they depend enormously authority. We are not saying what is the right to either approve it or dis- upon each country taking the maxi- going to be in the trade bill that comes approve it according to how we felt. I mum advantage of the comparative ad- after the fast-track authority. think that is a perfectly reasonable re- vantage which it has in terms of goods It is extremely important to remem- lationship. which it produces. The United States ber that fast-track authority is some- The Congress, in a sense, we up or has an enormous comparative advan- thing every President has had since down the trade agreement, but we tage. Not to take full advantage of that 1974. There is absolutely nothing new don’t down the process through which doesn’t make any sense to me. the administration can get into the in it. The idea that we would withhold Actually, it might interest some peo- trade agreement. We don’t simply say, from the President fast-track author- ple to know that West Virginia, which ‘‘fast track you are not going to have,’’ ity on the notion that only the Con- is not thought of as an internationally so you can’t begin to negotiate a trade gress can negotiate trade agreements— related State, in fact, is. In terms of agreement. Lord help us when it comes to the the proportion of the jobs in our State point where the Congress has to nego- which are related to products which I think that is totally counter to the tiate trade agreements. There are some are exported internationally, only purposes of international trade and trade agreements where we can put our three or, maximum, four other States frankly to the interests of my own imprimatur on that trade agreement, export more of what they produce pro- State. So I hope that in the Senate and for example: NAFTA, which I voted portionately than does the State of these coming days as we debate this against; GATT, which I voted for; West Virginia. So here is a State in the issue that we would give the President Chile, which would be upcoming; or middle of the Appalachian mountains— of the United States the fast-track au- others. not just because of coal, not just be- thority which President Reagan had, But let’s understand that in virtually cause of steel, but because of many which President Ford had, which Presi- all cases the President could go ahead things—we are highly dependent on the dent Carter had, which President Bush and negotiate, his people at the U.S. international trade environment. had, and which President Bill Clinton Trade Representative’s office could go Mr. President, I remember several ought to be able to have. ahead and negotiate trade agreements, years ago when fast track was still in I yield the floor and I suggest the ab- and what the Congress thinks or does existence. We had two votes. One was sence of a quorum. not think does not really apply. We on something called NAFTA; the other The PRESIDING OFFICER. The would, obviously, watch that, and in was on something called GATT. We clerk will call the roll. the Finance Committee we watch trade could have done neither of those unless very closely. we had first made sure that the Presi- The legislative clerk proceeded to The whole notion of withholding dent had fast-track authority, which call the roll. from the President of the United he did. I happen to think NAFTA was a Mr. ROTH. Mr. President, I ask unan- States, in a highly visible action, with- bad deal for the State of West Virginia imous consent that the order for the holding fast-track authority from the and I think I have been proved correct. quorum call be rescinded. President of the United States, doing I would definitely vote again as I did The PRESIDING OFFICER. Without that in the Senate or in the House or then, which was to vote negatively. objection, it is so ordered. S11584 CONGRESSIONAL RECORD — SENATE November 3, 1997 EXECUTIVE SESSION woe. Likewise, we have received thou- The problems—administratively and sands of letters, faxes, e-mails and culturally—within the agency are the notes—some of them hand delivered— culmination of a history where power NOMINATION OF CHARLES each detailing another story of power has been left unchecked, where objec- ROSSOTTI, OF THE DISTRICT OF run amok. A recent NBC News/Wall tives have been misapplied and prior- COLUMBIA, TO BE COMMIS- Street Journal poll shows that 21 per- ities misplaced. They exist despite past SIONER OF INTERNAL REVENUE cent of Americans report to have had reform efforts. And unless they are ap- The PRESIDING OFFICER. Under some dealings with the IRS, in addition propriately addressed this time around, the previous order, the hour of 2:45 p.m. to simply filing their taxes. Of these they will continue to plague the agen- having arrived, the Senate will now go Americans, a full 42 percent felt they cy. into executive session and proceed to were treated unfairly. Forty-two per- Despite past efforts at reform, Lord the nomination of Charles Rossotti, cent. And as if these statistics aren’t Acton’s phrase about absolute power is which the clerk will report. compelling enough, the poll found that still given frightening clarity in an The bill clerk read the nomination of 70 percent of Americans believe that agency that—as we have shown—re- Charles Rossotti, of the District of Co- the incidents of abuse and mistreat- sorts to unethical or illegal tactics in lumbia, to be Commissioner of Internal ment by the IRS that we uncovered in dealing with taxpayers. Our hearings Revenue. our hearings occur on a regular basis. showed how IRS employees use pseudo- The PRESIDING OFFICER. The time Mr. President, our hearings, these nyms, despite the fact that they are for debate on the nomination shall be statistics—and the growing consensus prohibited according to the agency’s limited to 3 hours, with 60 minutes we’re witnessing in Washington—make manual. We showed how blue sky as- under the control of the Democratic it clear that something must be done sessments are made against Ameri- leader or his designee, 90 minutes to rechart the course of this powerful cans—assessments that have no basis under the control of the Senator from agency. On the Tuesday following our in fact or tax law. We showed how they New York [Mr. MOYNIHAN], and 30 min- hearings, the Secretary of the Treasury are used to hurt the taxpayer, or sim- utes under the control of the Senator and the Acting Commissioner of the In- ply to raise the individual statistics of from Delaware [Mr. ROTH]. ternal Revenue Service held a joint an IRS employee. We showed how sta- The Senator from Delaware is recog- press conference to introduce what has tistics and quotas are used to rate em- nized. been called a list of mini-initiatives. ployees, despite the fact that such Mr. ROTH. Mr. President, as we con- These included: keeping offices and usage is strictly prohibited, and how sider the nomination of Charles O. telephone lines open one Saturday a levies and seizures are used to measure Rossotti to become the new Commis- month to address taxpayer grievances; employee performance. sioner of the IRS, it’s appropriate that giving taxpayers ‘‘customer feedback We listened to heartbreaking testi- we pause to take a good look at that surveys’’; and, rewriting taxpayer no- mony by courageous witnesses—private agency as a whole. Let me say from the tices in plain language. citizens whose lives have been torn beginning, that Mr. Rossotti—who Beyond these reforms, the agency, it- apart by the IRS, as well as current came before the Finance Committee self, has suspended four IRS managers, employees of the agency who speak of just a little over 1 week ago—is unique- demonstrating an increased awareness horrific tactics and practices within ly suited to this confirmation. I am im- of the abuses disclosed in our three-day the agency. One witness has disclosed pressed by him and his background. hearings. how IRS abuse led to suicides, the Mr. Rossotti is a successful business- Each of these measures is a welcomed break up of families, the destruction of man—in touch with the needs, con- change. As Acting Commissioner Mi- businesses, and loss of financial credit cerns, and risk-taking mindset of en- chael Dolan told the committee—that and personal reputation. trepreneurs. He has made his mark as a the IRS has made mistakes, handled Employees testified concerning a cul- management consultant and expert on taxpayer cases very badly, and caused ture of secrecy, vindictiveness, abuse, computer systems—a vital background Americans to suffer in ways they and retribution that exists within the at a time when one of the agency’s should not have. Acting Commissioner agency, itself—often targeted against major setbacks is its dysfunctional in- Dolan testified that the Internal Reve- employees, themselves. And let me say formation system. I intend to vote for nue Service has disrupted . . . lives here, Mr. President, the vast number of Mr. Rossotti’s confirmation, and I en- without excuse. IRS employees are good, hard-working, courage my colleagues to do the same. My concern, Mr. President, is that honest men and women. Without the Having said this, I also want to say these initiatives—though welcomed— help of the employees themselves, our something about the Internal Revenue may still be insufficient to meet all the hearings would have been impossible. Service and its current condition. Sep- problems that affect the IRS. To under- We discovered that IRS employees tember 23 to 25, the Finance Commit- stand how the Government can collect want change. They understand that tee held what will be the first in a se- the necessary and proper amount of change is necessary. They are perform- ries of hearings to probe an agency taxes in a way that does not harass, ing an extremely difficult duty—an im- that is cloaked in more secrecy than abuse or overly burden the American portant duty—under extremely dif- the FBI and the CIA. What we learned taxpayer will take a thorough exam- ficult circumstances. in our initial hearings was so disturb- ination—one that engages not only We heard of false allegations of ing that the IRS—its stories of abuses, Congress, but the agency and the ad- wrongdoing against targeted employ- mismanagement, lack of accountabil- ministration. ees. We learned about one senior agent ity and perverse incentives—continues Such a thorough examination will re- who discovered an electronic listening to captivate the attention of taxpayers quire 6103 authority—the authority device in the IRS employee break everywhere. granted to only two Members of Con- room, the area where agency employ- As last month ended, the House Ways gress. Only by appropriately using that ees are supposed to be able to relax and and Means Committee, with the sup- authority can we have a complete un- hold informal conversations. The room, port of the White House, moved legisla- derstanding of what must be done to Mr. President, had been bugged. But- tion to restructure the IRS. Chairman properly restructure and reform the tons were found under the desks of sev- ARCHER is to be commended for his IRS. eral IRS managers who were listening work. I compliment him on the job he The hearings we held a few weeks ago to their employees—violating their pri- has done in reversing the White were intended as a solid beginning in a vacy. And as if this discovery wasn’t House’s position on the issue. process that must be comprehensive. It bad enough, the senior agent who had The growing effort to restructure and is likely that we will get only one shot discovered and reported the bugging reform the IRS reflects the growing at restructuring the Internal Revenue devices was the one who was inves- concern about the agency. Congres- Service. We must make certain that re- tigated. Our hearings, Mr. President, sional switchboards have been inun- form legislation addresses all the prob- struck a chord with the American peo- dated with calls from Americans who lems that we are in the process of dis- ple. They struck a chord because Amer- have their own tales of IRS-induced covering. icans fear the IRS. It touches the life November 3, 1997 CONGRESSIONAL RECORD — SENATE S11585 of every family—of every business. And continuous improvement. Our hearings sight authority—has ever held such our hearings struck a chord because raised serious problems about the lack hearings. Congress must be vigilant. Americans believe Congress is serious of accountability of IRS employees. We Our current efforts must lay a founda- about reforming the agency—reform found there to be little accountability tion for systematic oversight. that must be thorough enough to ad- for their actions—against taxpayers These four recommendations that dress the problems that we are con- and internally, against employees of have come immediately out of our tinuing to uncover. the agency. There is a need for a zero hearings lay a strong foundation for As I said when I opened the hearings, tolerance policy for improper and abu- the reform process. We have a consen- Congress has given the IRS awesome sive behavior. There must be zero tol- sus that something must be done. What power in an effort to help the agency erance for failure to follow procedures we do must build on this momentum to carry out its tremendous responsibil- and regulations. Accountability must assure that our effort at reform and re- ity. In that Congress has given such also contain appropriate restraints on structuring is based on a complete un- power, it is also Congress’ responsibil- powers—especially the use of liens, lev- derstanding of the problems and nec- ity to ensure that it is being used pru- ies and seizures—to assure that tax- essary remedies. dently, constructively, and with regard payers are treated fairly. It must in- Toward this end, the Finance Com- for the taxpayer and employees of the clude a top to bottom review of em- mittee will continue to investigate and agency. Working together, we must ployee evaluations, and make certain hold hearings. When Congress returns help the IRS get back to its mission that such evaluations are not based on next year, the Finance Committee will statement—to collect the proper goals, quotas or statistics. There must hold additional hearings and work to amount of tax revenue at the least be no promotion in spite of abusive be- act on reform and restructuring that cost; serve the public by continually havior. And accountability certainly addresses all the problems and con- improving the quality of our products includes the ability to identify IRS em- cerns disclosed thus far. We will work and services; and perform in a manner ployees. The IRS must include signa- with the House, the President, and warranting the highest degree of public tures on correspondence and do away Commissioner Rossotti—once he’s been confidence in [the IRS’s] integrity, effi- with false identifications. confirmed—to ensure that not only is ciency, and fairness.’’ Third, comprehensive reform must there a complete understanding of the Toward achieving this, we must an- address the issue of due process for tax- challenges and problems currently swer three fundamental questions that payers. Our investigation and hearings plaguing the IRS. We must ensure that I posed during the Committee hearings: disclose cases where innocent tax- such efforts at restructuring and re- First, does the IRS have too much payers had liens placed against their forming are complete, workable, and power? homes, where they had their auto- effective in making this powerful agen- Second, if Congress were to limit mobiles seized and bank accounts fro- cy more efficient, more service ori- that power, what expectations do we zen without notification or the right to ented, and less frightening to honest have that the new limits will be more appeal. Restructuring and reforming Americans. effective than the old limits? the agency must include strengthening Mr. Rossotti has a background and And, third, how do we go about and implementing fundamental proce- the experience that will be invaluable changing the culture of the IRS? dures for due process, and those proce- in helping us bring about the kind of With the painful disclosures still lin- dures must be followed to protect and changes we believe are needed in the gering weeks after the hearings, I be- serve the taxpayer. agency. lieve it is safe to say that we have an Fourth, and finally, reform and re- Mr. President, I yield the floor. answer to the first question. The IRS structuring the IRS must result in Mr. MOYNIHAN addressed the Chair. does have too much power. The very more timely results for taxpayer prob- manner by which seizures, liens, and lems. Our hearings showed that the The PRESIDING OFFICER (Ms. COL- levies can be imposed—often without IRS does not fix problems within a rea- LINS). The Senator from New York is due process, and the manner in which sonable time frame. Change in this recognized. the agency has now been shown to area must go beyond the systemic to Mr. MOYNIHAN. Madam President, abuse those methods of tax collection— embrace the culture within the IRS, as our revered chairman, in calling up suggests that the IRS’s power is be- well. this important nomination of Mr. yond what would be considered nec- Just as in the private sector, an em- Charles O. Rossotti, spoke at length of essary and prudent. ployee’s promotion should be based on the problems we have encountered with Now, Mr. President, we must focus on his or her ability to serve the client— the Internal Revenue Service and the latter two questions: How can Con- to resolve problems, not create them— spoke of the need for public confidence gress effectively limit the agency’s to assure that a fair and appropriate in that agency and the manner in power while allowing it sufficient au- tax has been paid, and not to harass or which our tax revenues are collected. thority to carry out its important re- intimidate the client into paying more He spoke of the determination of the sponsibility? And what can we do to than is due. Committee on Finance to see that this change the culture of the IRS? These Mr. President are changes that issue is addressed fully, comprehen- As we turn our attention to these is- can be made. Service must be the hall- sively, and carefully. I would like to sues and consider possible legislative mark of the IRS. It is certainly the stand here and say that as this goes remedies, I want us to keep the follow- hallmark of America’s finest corpora- forward, there can be complete public ing four criteria in mind: tions. Each day they become more ef- confidence in the chairman of the Com- First, we must restructure the Inter- fective and efficient, more service ori- mittee on Finance, Senator ROTH, that nal Revenue Service. The IRS—like ented and customer friendly. If they do it will be done in a nonpartisan way. I many Federal departments and agen- not, they are quickly overtaken by don’t think I should use the word ‘‘bi- cies—was created in the industrial age. other concerns, or they go out of busi- partisan,’’ because I don’t think there While its mission is necessary to col- ness altogether. A mechanism that es- is a Republican method of collecting lect the revenue Government needs to tablishes self-sustaining improvement taxes fairly and efficiently or a Demo- run legitimate programs and services, within the IRS is critical to the future cratic method. It is something that we its organization, administration, and of that agency. must do properly as a Nation. infrastructure must be engineered to As I said during the hearings, just as We do well to remind ourselves that meet the needs, demands and expecta- the IRS is quick to say that no honest we began as a Nation in protest against tions of the information age. The IRS taxpayer should ever fear an agency taxation we thought was improper and must be dedicated to service. It must audit, the IRS itself should never fear illegal and that this issue has never be responsive to taxpayer needs and congressional oversight. Congress must been far from our concerns, although above political influence. continue its oversight. One discovery not until recently has the Committee Second, in restructuring the IRS, we from our first series of hearings is that on Finance exercised its oversight ju- must build into its system a mecha- it was the first time the full Senate Fi- risdiction. It is our duty to see what is nism that promotes accountability and nance Committee—which has IRS over- going on in this large public agency, S11586 CONGRESSIONAL RECORD — SENATE November 3, 1997 which was founded in 1862 on the occa- Service 17, and then there are super- know, gradually it spun off and became sion when the Federal Government im- grades beyond that. the Department of Education. And posed for the first time an income tax. You create this in a 19th-century there have been efforts in the other And which, as the distinguished chair- mode. It is called civil service reform. body to put an end to it. But by and man said, has the organization and pat- And on this floor a century ago, 110 large, these efforts are never success- tern of the industrial age, as yet but years ago, it was debated with great ful. They take longer than you think. little responsive to the modes of man- vigor. It meant to take the individuals They are not very rewarding. You can- agement which have emerged in a in the public employ out of any area of not put them in a newsletter. postindustrial age with great efficacy political influence, political choice, pa- As a matter of fact, we don’t have and public response. tronage of jobs. newsletters anymore. I do not want to I am here to state that there is com- But it easily results in what Profes- speak with anything less than the full- plete support on this side of the aisle sor Light calls layering—the GS–5 on est admiration of our colleagues in the for the chairman’s program. The par- top of the GS–4, the GS–6 on top of the House of Representatives, but when I ticulars will emerge as we work at the GS–5. And he gives this illustration, a came to this body each Senator had a facts, as we uncover them. We have our very concise one. He said: certain amount of funds—we had the first hearing on the IRS restructuring Just imagine a bureaucracy that goes franking privilege, which went back to legislation this Wednesday. Again, I something like this: an agent— 1790, and enabled us to write persons, will say this is not a bipartisan matter, The agent is the person who deals to send out mailings to our constitu- it is a nonpartisan matter of central with the individual citizen— ents. importance to the Federal Govern- an agent reports to a district group manager, For my part, I represent some 18 mil- ment. As the chairman indicated in his who reports to a branch chief, who reports to lion people. You cannot meet them, but closing passage, the nomination of an assistant chief of the division, who re- you can write them. Or rather you Charles Rossotti to be Commissioner of ports to the assistant district director, who could write them. The one thing from the Internal Revenue Service is an im- reports to the assistant regional commis- that great revolution we had across the sioner, who reports to the regional commis- portant measure of cooperation from way a few years ago is we abolished the the executive branch. The chairman sioner, who reports to the chief of staff to a deputy assistant commissioner, who reports one direct contact between Members of noted that President Clinton has sup- to the deputy assistant commissioner, who the Congress and the citizenry, which ported this. In particular, Secretary of reports to the assistant commissioner, who was the newsletter. The first one went the Treasury Rubin, much impressed reports to the chief operating officer, who re- out from Philadelphia in 1790, a gen- by the work of the commission headed ports to the deputy commissioner, and so on. tleman from North Carolina, as I re- by a member of our committee, Sen- You haven’t even reached the top of call, telling his folks that there was ator KERREY of Nebraska, and legisla- the layer. not much going on just then, but he tion introduced by him and another That is the kind of progression you had hopes that there might be a tariff Member, Senator GRASSLEY of Iowa, will get over a century in an organiza- change which would improve the sales again in an across-the-aisle mode. It tion in which the internal incentives of our local product. By ‘‘our local was Secretary Rubin who thought that are to be promoted, as they should be. product’’ he meant whiskey, corn whis- the time had come to bring modern It is how Colin Powell went from being key, as against rum from the Carib- management modes into the IRS and, a member of the Pershing Rifles at bean. Indeed, it was an important indeed, Madam President, Mr. Rossotti City College in New York, where I source of revenue. And it kept the set- will be the first Commissioner not to began my education, to Chairman of tlers across the Appalachians con- be a tax lawyer in a half century, since the Joint Chiefs of Staff of the U.S. nected to the Atlantic coast as against World War II. This is not, as Everett Armed Forces. And they encourage the Ohio-Mississippi system which Dirksen would have said, to slight the them. But there can be too much. It took them through French territory at tax lawyers. They typically defend the can separate accountability to the the time. public, the individuals against the Gov- point where it cannot be found in the We have lost that direct contact. ernment, and their task grows steadily system. This agency ought not to lose its. I was more rewarding as the tax code become It has been remarked that the Catho- impressed, if I may say, by Mr. steadily more incomprehensible. Still, lic Church, which has been around for Rossotti’s response on this point. We we have brought the right man to do centuries, has managed all these years were speaking of these matters during the job at this moment. with just three layers of authority. his hearing, and I raised this issue of I would like just to offer a brief com- You have Pope, bishop, and priest. layering. And afterward he wrote me a ment, if I can have the indulgence of There are some honorific; every so letter in which he said—and I will take the Chair, about an article which ap- often a priest will be called a mon- the liberty of quoting as I do not see peared in the New York Times, whilst signor, but it is Pope, bishop, priest. any other Senator seeking recognition we were contemplating this second And it is something to be thought just now—he said: phase of the effort which the chairman about, as this whole subject is consid- Your comment about the ‘‘layering’’ that began with those 3 days of dramatic ered in the Congress. accumulates in many large organizations and powerful testimony. And that is an We spend too little time on organiza- that are organized on traditional lines is get- article by Paul C. Light, a professor of tional matters, too little time on how ting at a very important point. Excessive public affairs and political science at much we have spread out agencies. I layering often lies at the heart of many the University of Minnesota’s Hubert have been witness, in my time in Gov- problems, especially the difficulty upper Humphrey Institute, in which Profes- ernment, to a number of sequences by management faces in understanding accu- sor Light pointed out that whatever we which the Bureau of Public Roads in rately what actually goes on in the front lines. It can also slow down action to fix do to restructure and simplify the Tax the Department of Commerce, a small problems. Of course, I do not yet know Code, we still have a problem of organi- effective agency known in the 1920’s enough about the specific facts at the IRS to zation within the IRS itself. We still and 1930’s for its very vigorous civil know how this problem affects the IRS and have to do something to reduce the service that was mostly working on what might be done about it. As I begin my multiple layers of bureaucracy which, farmer market roads, and then comes assessment of the situation at the IRS, how- and I quote Dr. Light, ‘‘leaves no one some other legislation, the interstate ever, I will most certainly be thinking hard accountable for how agents treat tax- highway program, and the next thing about this issue. payers.’’ you know you have the Department of If I may say, this is a promising re- I think you would find this is a nor- Transportation. sponse. We have had lots of nomina- mal development of an agency in place I have seen small activities in the tions before our committee in the 21 over a very long time in which you field of education. We had a commis- years that you and I have served there have career public servants in a system sioner of education, oh, going back a together, sir. And without in any way which has gradations of compensation, long way, and various able persons ran disparaging any of my predecessors, and presumedly responsibility that go it. It was in the Department of Health, this is the first evidence I have ever from General Service 3 to General Education and Welfare. And don’t you had of any of the nominees listening to November 3, 1997 CONGRESSIONAL RECORD — SENATE S11587 anything that we said. Perhaps at most OCTOBER 27, 1997. I assure my distinguished colleague I they keep an ear open, thinking that as Hon. DANIEL P. MOYNIHAN, will be very brief. soon as we stop talking, it is over, and U.S. Senate, Washington, DC. I want to point out that the hearings ‘‘I can get out of here and on with my DEAR SENATOR MOYNIHAN: I want to thank we held earlier this year were the re- you very much for your quick consideration sult of the close cooperation between job.’’ of my nomination and for your supportive But to get a letter like that back— and generous comments at my hearing. the minority side and majority side. I well, Mr. Rossotti is a management Your comment about the ‘‘layering’’ that appreciate very much the full coopera- specialist. He deals with modern sys- accumulates in many large organizations tion and assistance that the distin- tems. He has built an international that are organized on traditional lines is get- guished Senator from New York pro- firm for which people engage him to ting at a very important point. Excessive vided us. layering often lies at the heart of many We look forward to bringing about help them with the kinds of problems problems, especially the difficulty upper reform that has nonpartisan support. I we have here. It is a good beginning. management faces in understanding accu- think the Senator is perfectly correct. Now, sir, one last point. The employ- rately what actually goes on in the front It is not a Republican, it is not a ees of the Internal Revenue Service are lines. It can also slow down action to fix problems. Of course, I do not yet know Democratic, it is a nonpartisan solu- well-paid public servants, but none of tion that we seek. them makes a third of the salary of an enough about the specific facts at the IRS to know how this problem affects the IRS and I have to say that I do think we are average tax attorney. And the average what might be done about it. As I begin my very fortunate in having a distin- tax attorney has to master this—what assessment of the situation at the IRS, how- guished individual like Mr. Rossotti to is it?—9,479 pages of the Internal Reve- ever, I will most certainly be thinking hard be available. I think you made a very nue Service. Look at it—9,479 pages. about this issue. strong case as to why he should be con- That speaks dereliction of our duty. We Once again, thank you for your help, and if firmed because he has the very quali- can’t go on producing these. I am confirmed I look forward to working ties and the very experience that I with you in the months ahead. think are essential at this particular I take the liberty of displaying to the SINCERELY, Senate and to our distinguished Presid- CHARLES ROSSOTTI. juncture. ing Officer the bill we adopted on July You talked about the layered lives 31—820 pages added to the 9,479; 820 [From the New York Times, Oct. 18, 1997] within the IRS. Mr. Rossotti is, fortu- pages entitled Taxpayer Relief Act. THE TAX AGENCY’S LAYERED LOOK nately, an expert on management. He What taxpayer relief will there be from (By Paul C. Light) is an expert on high technology. As I understand, much of his experience is having the IRS have to understand PHILADELPHIA.—Before Congress and Presi- what is in here, as well as individual dent Clinton create an oversight board to giving advice and consulting with large taxpayers? We better watch this. It is monitor the Internal Revenue Service and firms as to how to become more effec- the way organizations can develop. It end taxpayer abuse at the agency, they tive, more efficient. So I think you is a form of entropy. Energy goes down should take another look at what made that made the point very well. the system, complexity goes up and abuse possible. I think next year, I say to my distin- abuse takes place. There are simply too many layers of bu- guished friend and colleague, it is criti- reaucracy at the I.R.S. which leaves no one cally important that we begin some We can attend to organizational mat- accountable for how agents treat taxpayers. steps to simplify the Code. That is ters as much as we want. We can cer- Creating an oversight board won’t make a something I want to consult with you tainly attend to abuse. But until we difference unless it can see abuse happening at the staff level because it is complex. simplify the Tax Code as a multiyear at the bottom. The solution, then, is not to It is going to be a multiyear effort. But effort, as one that is real, we will fail add layers of supervision, but to get rid of there is no time better suited to start to address the heart of the problem. them. The I.R.S. has been lengthening the chain this than next year. I look forward to Remember the simplifiers that took of command for decades. In 1960, for example, working with you on this important over on the other side of the Capitol the senior leadership consisted of just 13 peo- matter. who said we will get rid of all these ple. By 1996, despite efforts to streamline the Mr. MOYNIHAN. Madam President, complexities? What did they do? They agency it had grown to more than 60. may I thank my dear chairman for say- added 820 pages. That speaks to a sys- There can be something like a dozen layers of supervisors between the President, who is ing there is no time like now. What a temic problem, and we are old enough better moment to start addressing the and capable enough as a society to ad- the chief executive of the agency, and agents in regional offices. Tax Code than that point which, nomi- dress them. I, for my part, am hugely Just imagine a bureaucracy that goes nally at least, we have a balanced pleased that we will. something like this: an agency reports to a budget and we are not driven by the ex- I want to thank again our chairman, district group manager, who reports to a igencies of revenue as such. We can ad- without whom this would not be taking branch chief, who reports to an assistant dress the question of complexity, effi- place, and thank Senator KERREY of chief of the division, who reports to the as- ciency, and clarity. Nebraska and thank Secretary Rubin. sistant district director, who reports to the Simplicity—we are a republic. We are This is a good beginning and a good assistant regional commissioner, who re- ports to the regional commissioner, who re- meant to be simple. Good people of note on which to start. I urge the con- ports to the chief of staff to a deputy assist- Maine would like that, I think, and I firmation of Mr. Rossotti, an extraor- ant commissioner who reports to the deputy think the people of Delaware would. In dinarily able man. assistant commissioner, who reports to the New York we are somewhat given to I do not know that political party assistant commissioner, who reports to the complexifying, but I think we might has ever entered into the calculation of chief operating officer, who reports to the find a little simplicity refreshing. who ought to be the Commissioner of deputy commissioner, and so on. I yield the floor. No wonder rogue agents thought they Mr. ROTH. I suggest the absence of a the Internal Revenue, but I do expect could get away with harassment. Had the that by and large it has been a person quorum. I.R.S. added field agents instead of new lay- The PRESIDING OFFICER. The who is of the same party as the Presi- ers of supervisors perhaps district managers dent who nominates him. It is an inter- wouldn’t have needed to institute the collec- clerk will call the roll. The assistant esting fact that this is not the case in tion quotas that fueled taxpayer abuse. legislative clerk proceeded to call the this instance. I am sure we will have Some legislators believe that simplifying roll. his cooperation, and I am sure you will the tax code is a solution to the agency’s Mr. GRAMS. Madam President, I ask know how to use it to the greatest pub- problem, but that won’t make the I.R.S. any unanimous consent that the order for less likely to abuse taxpayers. The best way lic advantage. the quorum call be rescinded. to reduce taxpayer harassment is not a flat The PRESIDING OFFICER. Without I ask unanimous consent to have the tax, but a flat I.R.S. objection, it is so ordered. previously referred to material printed Mr. MOYNIHAN. I yield the floor. Mr. GRAMS. Madam President, I ask in the RECORD. The PRESIDING OFFICER. The Sen- unanimous consent that I be allowed to There being no objection, the mate- ator has 11 minutes remaining. speak for about 5 minutes and that the rial was ordered to be printed in the Mr. ROTH. I yield myself such time time be deducted from the time of the RECORD, as follows: as I may consume. majority leader. S11588 CONGRESSIONAL RECORD — SENATE November 3, 1997 The PRESIDING OFFICER. Without the despair and disaffection among the right the first time around, not accept objection, it is so ordered. poor and disadvantaged. It encourages minor changes that may prevent or f abuse, waste, and corruption. delay efforts to reform our overall tax Congress deserves much—if not system. IRS REFORM most—of the blame for the abuses of Madam President, the leadoff witness Mr. GRAMS. Madam President, be- our current tax system because it is at the Senate IRS hearings summed up fore we vote on IRS Commissioner Congress that writes the Tax Code in the debate with a message Congress nominee Charles O. Rossotti, I’d like to the first place. cannot ignore: ‘‘If the public ever knew take this opportunity to make a few There are now nearly 10,000 pages of the number of abuses covered up by the remarks about the direction IRS re- Tax Code, 20 volumes of tax regula- IRS, there could be a tax revolt.’’ form should take. tions, and thousands and thousands of The public is beginning to under- But first let me commend Mr. pages of instructions. stand the depth of the IRS problems. Rossotti for his courage to take on this Besides making the tax system so Tinkering with the IRS won’t work and job. I believe with his expertise and ex- complicated, Congress has seriously ne- the time for real tax reforms is now. perience in private business manage- glected its oversight responsibilities Thank you very much. I yield the ment, Mr. Rossotti is qualified to head over the IRS. In fact, the Senate hear- floor. the agency, and I am confident that he Mr. GRAMM addressed the Chair. ings were the first formal oversight of The PRESIDING OFFICER. The Sen- will help improve IRS services and the agency ever conducted by Congress. ator from Texas is recognized. management. That in itself is very shocking. Mr. GRAMM. Madam President, I Madam President, the American peo- Congress for decades has been passing yield myself such time as I might use ple have every right to be outraged by new tax laws and regulations without off the leader’s time. the disturbing details that emerged looking back to see how the system has The PRESIDING OFFICER. Is there during 3 days of Senate hearings into been affected, or if it’s working, or if objection? The Chair hears none, and it the tax collection practices of the IRS. it’s unfair. is so ordered. Testimony from taxpayers and cur- It’s more obvious than ever that the f rent and former IRS officials provided present tax system will fail to lead us chilling accounts of mistreatment, into the next century without fun- IRS REFORM abuse of power, and the merciless damental reforms. But can Washington Mr. GRAMM. Madam President, I trampling of citizens’ rights. What’s fix the IRS problems it created? Yes— wanted to come over today and talk even more shocking is that these im- if Washington can muster the political about the IRS and about reforming the proper and illegal practices within the will to do it. IRS. We are on the floor considering IRS aren’t random occurrences—they The first thing Congress must do is the nomination of Charles Rossotti to happen regularly. take its oversight responsibility of the be head of the IRS. We had an excellent For decades, IRS agents have rou- agency more seriously. Let’s end the hearing on the nomination in the Com- tinely snooped through the supposedly secretive ways of the IRS and open the mittee on Finance. His background is confidential tax files of thousands and process to the sunlight. somewhat different in that he is an in- thousands of Americans. That could in- Let’s put the IRS under strict scru- formation management person, a very clude me, or you. IRS agents are evalu- tiny, periodically reviewing its oper- successful businessperson. I believe ated and promoted based on their total ations, exposing abuses, and ending il- that he will be an excellent head of the tax collections, a practice outlawed a legal practices. IRS. I intend to vote for him. However, decade ago. I welcome the fact that President like most people who have spoken dur- IRS managers often cover up abusive Clinton changed his mind and pre- ing this time, I want to talk about re- behavior by collection agents. In stark sented a plan aimed at improving tax- forming the IRS, not the naming of the contrast to our legal system, all al- payer-assistance services at the IRS, new head of the agency. leged tax debtors are assumed guilty including a board with private citizens First of all, Madam President, I want and treated as criminals. to oversee the agency. to reject the idea that what is wrong at The distressing tales told by the Sen- Although this is a positive step, the the IRS is sort of a sociological envi- ate witnesses were hardly isolated inci- proposed changes are mostly cosmetic ronment that has developed there. We heard a little of that during our hear- dents; hundreds of working, law-abid- and will do nothing to address the ings. We heard a lot of it from the ing Minnesotans have contacted my of- deep-rooted deficiencies within the Treasury Department when an effort fice with similar grievances. IRS. Very simply, the heart of the was undertaken to try to change the Though the individual details of their problem with the IRS is the tax policy IRS. stories vary, the message is the same: on which all IRS decisions are based. The whole logic of this argument, the IRS devastated their lives. Many To end the abuse once and for all, which I reject, is that the problem at lost their homes, cars, businesses, and Congress must pass new legislation to the IRS is that an atmosphere has de- professional licenses—not to mention reform our tax system and replace the veloped, that there is this sociological their reputation and self-respect. ever-more-complicated Tax Code with environment that has come into exist- Congress established the IRS with one that’s simpler, fairer, and more ence over a long period of time, and good intentions but the agency has friendly to taxpayers. what we really need is to have some evolved into what Nobel laureate Dr. The American people deserve a fair counselors come in and have sensitiv- Milton Friedman labels ‘‘a self-gener- Tax Code that promotes harmony be- ity training for IRS agents and that ating monstrosity over which the peo- tween people and doesn’t separate us will make everything great. ple have little control.’’ into classes, a code that encourages We then have terms used, and I would As a result, our tax system has be- work and savings; a code that rewards have to say by Members of both par- come extremely complicated, difficult families and success rather than penal- ties, such as, ‘‘Let’s make the IRS a even for IRS experts to understand, izes them; a code that stimulates real consumer-friendly agency.’’ I am afraid and our tax burden has become so economic growth and produces more that just reeks of nonsense to me. Let heavy and so unfair that it’s unbear- jobs and, yes, higher tax revenues; a us not forget that we did not create the able for many working Americans. code that allows taxpayers to keep IRS with the best of intentions. Con- The tax system under which the IRS more of their own money. gress created the IRS to get money operates today has become a re- Congress must explore every avail- from people who, by and large, did not distributor of private incomes, a mech- able solution in our quest to re-create want to joyfully give. When it comes to anism to enforce social re-engineering, our tax system and achieve these ob- the IRS, most Americans are not happy and a launch pad for class-warfare. jectives. givers. They believe that Government It is anti-family. It destroys eco- Passing the House IRS bill may spends too much money. I share that nomic opportunity, hinders our job cre- sound tempting, as it does make some belief. They believe that the Govern- ation, impedes productivity and re- needed changes, but I agree with Sen- ment spends it inefficiently and un- tards competitiveness. It has deepened ator ROTH that we need to do the job wisely. I share that belief. In fact, both November 3, 1997 CONGRESSIONAL RECORD — SENATE S11589 of those beliefs would be strengthened need to do is to carry this issue over wisely, then I think we would make if the average citizen could spend 1 until next year. We had very produc- people more willing to pay taxes. The week as a Member of the Senate. Peo- tive hearings, hearings that awakened great Abraham Lincoln was quoted ple do not like paying taxes. They ob- not only us but the American people to during the Civil War as having said ject to much that the Government abuses in the IRS. But now, before we that he was a joyful taxpayer. He per- does, and the IRS uses the power of the legislate, we need to hear from some haps was the last one in America. Be- State to force people to provide money people who have ideas as to how we fix cause he supported winning the Civil that, by and large, they do not want to the problem. I think we need to hear War. I think, to the extent that we can provide. from financial experts, including peo- make the system simpler and fairer, to But there has developed a notion ple from the Internal Revenue Service. the extent that we can be wiser in our that somehow at the end of this proc- I think we need to be certain that this expenditure of money, that we can im- ess, when the agent calls up and says, issue has been thoroughly examined. prove the situation. But, in the end, ‘‘I’m from the Internal Revenue Serv- I would like to share just a few the Internal Revenue Service has too ice and I want to help,’’ people would thoughts and then yield the floor, be- much power. We need to shift the bur- say, ‘‘Well, gosh, great; it’s awfully cause I see that we have other col- den of proof. The Internal Revenue nice that you called. This is the begin- leagues who have come to the floor. Service should have the burden of prov- ning of a good day, possibly a good First, I believe that we need, to the ing that someone is a lawbreaker. We week or year and may be a turning maximum extent possible, to try to should not begin with the presumption, point in my life.’’ find a way to separate powers that are when you are dealing with the Internal If we are going to approach the IRS currently joined together in the Inter- Revenue Service, that the taxpayer is problem from the point of view that nal Revenue Service. It seems to me, if guilty. the agents simply need sensitivity you look at the criminal justice sys- It seems to me that we ought to also training or that this can become such a tem, that the separation of functions look at a system where, if I am trying friendly Government agency that peo- represents a separation of powers that, to run a business and the IRS comes in ple will be happy to hear from it, I while it doesn’t always succeed, while and audits me and I spend $250,000 on think we are making a terrible mis- there are failures and abuses in the accountants and lawyers, defending take. system, at least in the criminal justice myself from the IRS, and at the end I think the problem with the IRS is system you have the police that do the the IRS says, or the judge and jury say: very easy to define and quite hard to investigating and then they take their This was all a mistake. You didn’t do do something about. The problem with evidence to the district attorney and anything wrong. If that turns out to be the IRS, to paraphrase an ancient the district attorney evaluates their the case, it seems to me that small Greek, is that power corrupts. The evidence and in the process evaluates business ought to be able to go into basic problem with the Internal Reve- them. And then the district attorney court and say: Look, I spent $250,000. I nue Service is that IRS agents, in the goes to a grand jury and the grand jury didn’t do anything wrong. The IRS bureaucracy that has developed to col- evaluates the evidence and makes the didn’t even say it’s sorry. Maybe the lect taxes, have tremendous power. I determination as to whether there is IRS ought to have to pay that small guess the best way I found to try to get sufficient evidence to take you into business $250,000 and pay their court people to visualize it is to talk about a court. If they decide there is, you go costs. courtroom. Most of us, fortunately, into a court where you have a judge A final point which has almost never have never been in a courtroom, but al- and where you have a jury. And the in- been mentioned in this debate but most everybody has seen it on tele- vestigating police, the district attor- which I want to mention here because vision or at the movies. I think it has to be a factor in our de- Think of yourself as going into a ney, the grand jury, the judge, and the jury all represent separations of power liberations, is that at the end of the courtroom and the judge is from the day, with whatever we do in reforming IRS. You look over at the jury, and the and checks on the potential abuses of the IRS, it still has to be able to col- 12 jurors are all from the IRS. And then one or the other. lect taxes. I have no sympathy for peo- you look over at the prosecutor’s table, Our problem in the Internal Revenue ple who cheat on their taxes. People and the prosecutor is from the IRS. Service is that this one agency per- who cheat on their taxes make the rest And the policeman who is going to tes- forms all of those functions. It seems pay more. And as we strengthen the tify, having arrested you, is from the to me that the first thing that we have rights of taxpayers—which I am in IRS. And you walk into the courtroom to try to do is to find a way to separate favor of, and I intend to fight hard faced with a presumption that you are those functions so that each of these for—as we shift the burden of proof, as guilty. different levels of our dealings with the Now, that sounds like a picture that Internal Revenue Service represents a we divide the powers of the IRS and is completely out of focus as far as the check on the potential abuses of the make it less intrusive, to the extent American system of justice is con- other level or function that we are that such reforms make it easier for cerned. But in reality that is an accu- dealing with. people to cheat we have to have stiffer rate picture of a taxpayer dealing with Obviously, this is a golden oppor- penalties for those who knowingly vio- the Internal Revenue Service. tunity for us to look at the Tax Code, late the law. Now, the question is, how do you to look at its complexity, to look at So I think we have quite a legislative change that picture? How do you do it the degree to which it is unfair, and try effort ahead of us. I think we have a in such a way as to guarantee due proc- to fix it. I am not one of those who be- golden opportunity to do something ess? How do you separate the powers of lieves that short of Heaven we will ever that is important. I want to congratu- the IRS to eliminate the abuse? And eliminate the Internal Revenue Serv- late Chairman ROTH and the Finance how do you do it all in such a way that ice. We can change its name, we can Committee because I do believe we had you do not undermine the ability of the change the plaque, we can take down an excellent set of hearings. But sim- Internal Revenue Service to collect $1.6 the flag, but in reality, as long as the ply because we know more about the trillion a year in taxes from working Government spends massive sums of problem does not mean that we yet Americans. money, somebody, some agency is know the solution. I am hoping that we That is our challenge. I want to con- going to have to collect that money. can have equally productive hearings gratulate our colleagues in the House But I think, with a simplified system, on ideas from people around the coun- for their efforts. I want to congratulate we could dramatically change the way try as to what could be done to fix the Senators GRASSLEY and KERREY for the IRS works by making it easier for IRS, how we could change the system. their IRS restructuring commission ef- citizens who intend to abide by the law We should take the time to get it right, fort. I think that effort gave us a good to do it. be more comprehensive in what we starting point. I think Chairman AR- I think also that, to the degree that want to achieve, and build on an excel- CHER’s bill is a good bill. we control Government spending so lent bill that came over from the But I would have to say that I agree that Government takes less, to the de- House. We have an opportunity to dra- with Chairman ROTH, that what we gree that we spend the money more matically change the Internal Revenue S11590 CONGRESSIONAL RECORD — SENATE November 3, 1997 Service and convince Americans that, uct’s country of origin and over 200 officials in January that Mexican straw- while the Government is still spending people were poisoned as a result. berries were being sold illegally to the lunch too much money and is not spending it But now, Mr. President, disturbing program. The berries were served around as wisely as it should, that the tax sys- new information has come to light Valentine’s Day and the hepatitis A cases de- veloped within a few weeks. tem is fairer and that the collection from the criminal case against Andrew At congressional hearings in the spring on process is fairer as a result of the re- & Williamson which indicates USDA the hepatitis A epidemic, USDA officials tes- form efforts that we are about to un- officials may have had advance warn- tified they only had vague allegations about dertake. ing of the illegal strawberries. An arti- a possible illegal sale shortly before the out- I don’t think people expect to love cle in Saturday’s edition of the San break. their Internal Revenue agent, unless Diego Union Tribune disclosed that When Sen. Spencer Abraham, R-Mich., they married one or unless one is their USDA was alerted 1 week after the learned The Union-Tribune had reported the USDA had evidence in January of an illegal child or their parent. But they expect school lunch purchase from Andrew & strawberry sale, he expressed outrage and to be treated fairly. And obviously Williamson that the fruit was from called for a Senate hearing on the USDA’s they know when they are contacted by Mexico. In addition, the newspaper also handling of the strawberry sale. the IRS that they are potentially in reports that the Federal official at Sen. Paul D. Coverdell, R-Ga., chairman of deep trouble, and it is that threat that USDA who was alerted thought it seri- the Senate Agriculture Subcommittee on drives many people to go ahead and de- ous enough to file an administrative Marketing, Inspection and Product Pro- clare income that they might have hid- report and wanted to investigate the motion, then began working to set up the den and to pay taxes that they didn’t hearing into the USDA’s accountability. charge, but was rebuffed by her super- Against this backdrop of heightened con- want to pay. visor. cern about food safety and imported produce, So, finding this balance, I submit, is Mr. President, I ask unanimous con- the new witness statements were released in going to be a difficult task. I am very sent that the text of the San Diego San Diego. grateful that I am on the Finance Com- Union Tribune article be printed in the Phillip L.B. Halpern, an assistant U.S. at- mittee and I am going to have an op- RECORD. torney whose office is handling the Andrew portunity to play a small role in it. I There being no objection, the article & Williamson prosecution, could not be think it is important. I am glad that was ordered to be printed in the reached for an interview. USDA officials in Washington declined to we are waiting to gather more facts, RECORD, as follows: comment. not just on the problem but the solu- [From the San Diego Union-Tribune, Nov. 1, The agency is continuing to investigate tion. I thank my colleagues for their 1997] the Mexican strawberry sale, which also has tolerance and I yield the floor. BERRY ALERT CAME WEEK AFTER SALE been linked to nearly 50 cases of hepatitis A The PRESIDING OFFICER (Mr. AL- WITNESS SAID HE WARNED USDA THAT FRUIT in Maine, Louisiana and Wisconsin. Federal LARD). WHO YIELDS TIME? THE SENATOR WAS GROWN IN MEXICO authorities believe a field worker in Mexico accidentally contaminated the fruit while it FROM MICHIGAN? (By Rex Dalton) Mr. ABRAHAM. Mr. President, I seek was being picked in April and May 1996. A federal official received an early com- Hepatitis A is spread through contact with unanimous consent to speak for up to 5 plaint in October 1996 that a San Diego com- human fecal matter. Investigators who later minutes, the time to be deducted from pany was illegally selling Mexican straw- visited farm fields where the berries were the leader’s time. berries to the federal government for school grown found outhouses adjacent to rows of The PRESIDING OFFICER. Without lunches, according to newly released docu- strawberries, and no ready method for har- objection, it is so ordered. ments. vesters to wash their hands. The virus can Mr. ABRAHAM. Mr. President, I That means the U.S. Department of Agri- cause nausea, vomiting, fever and jaundice. don’t believe I will necessarily need the culture knew about the sale four months be- In rare cases, it can be fatal. fore the strawberries were served in Feb- full 5 minutes, even, but let me speak The key witness statement that recently ruary. The USDA did not investigate until was released was made by Frederick J. Haas, today about an issue of great concern after the berries caused about 270 cases of who operates a Watsonville produce sales op- to the citizens of my State. hepatitis A in Michigan schools in March. eration called U.S. Food Service. The PRESIDING OFFICER. The Sen- In fact, the 1.7 million pounds of frozen As the USDA’s Office of the Inspector Gen- ator from Michigan is recognized. strawberries had not been delivered to gov- eral began its probe, Haas made separate f ernment warehouses when the warning came statements on different dates in April. in, shortly after the USDA’s strawberry pur- In an April 8 statement, Haas told the in- BERRY ALERT CAME WEEK AFTER chase was announced Oct. 17, 1996. spector general’s office he called the USDA’s SALE The disclosure of the early warning is in Sandra K. Gardei in January and told her witness statements recently released under about the Mexican strawberry issue. Gardei Mr. ABRAHAM. Mr. President, in unusual circumstances to defense attorneys March of this year, over 200 school- oversaw the October 1996 strawberry pur- for Andrew & Williamson Sales Co. Inc. of chase. children in my State contracted the Otay Mesa. That statement and those of other wit- hepatitis A virus from food served by The stawberry-processing company and nesses were provided to Andrew & the school lunch program. As news of two executives were indicted on charges of Williamson defense attorneys last summer. the outbreak began to pour in, the fraud and making false statements in con- But not until Oct. 14 did the defense attor- Michigan Department of Community nection with the sale of Baja-grown fruit to neys receive an ‘‘addendum’’ statement that Health and the Centers for Disease the USDA for the National School Lunch Haas made April 15 and an April 11 state- Program. The charges are not related to con- Control went into action to determine ment by Haas’ administrative assistant, Jea- tamination of the berries. Produce sold to nette Baum. the cause. They soon found the culprit: the program must be grown in the United Those statements detail how on Oct. 24, frozen strawberries sold to the school States, according to federal law. 1996—just a week after the announcement of lunch program by a San Diego com- The witness statements were made in April the USDA’s purchase of frozen strawberries— pany named Andrew & Williamson. In- to the USDA’s Office of the Inspector Gen- Gardei was called about the use of Mexican vestigators also discovered that some eral, but were not disclosed to defense attor- strawberries. of the strawberries sold to the school neys until Oct. 14. The defense attorneys had Haas’ April 15 statement says he told lunch program had been illegally cer- received many other witness statements and Gardei the USDA should not purchase the documents after the June indictments. strawberries from Andrew & Williamson’s tified as domestically grown when, in Joseph Milchen, the attorney for company brokers ‘‘because that product was grown in fact, they had been grown in Mexico. founder Frederick L. Williamson, said he re- Mexico.’’ Mr. President, these strawberries ceived the key witness statements from the After the strawberries first were linked to should never have been served in the U.S. Attorney’s Office in San Diego. The U.S. hepatitis A in Michigan on March 28, Gardei school lunch program in the first place. Attorney’s Office informed Milchen it sent prepared an administrative report for the By law, products sold to the school the statements right after getting them from USDA describing how she was alerted in Jan- lunch program must be certified as the USDA. uary and February about the Mexican fruit. being domestically grown. Williamson, 60, of Oceanside has pleaded In that administrative report, Gardei said innocent. The other executive, Richard H. she sought to open an immediate investiga- Companies have typically been trust- Kershaw, has pleaded guilty. tion. ed to do the right thing, but Andrew & The San Diego Union-Tribune reported in She said in the administrative report that Williamson chose to do something else. September that at least three leaders in the her USDA superior, Darrell J. Breed, refused They chose to misrepresent their prod- California strawberry industry told USDA to open an investigation. Gardei also said November 3, 1997 CONGRESSIONAL RECORD — SENATE S11591 Breed ordered his secretary to remove copies EXECUTIVE SESSION ed to be done and how would he ap- of her administrative report from USDA proach his job. I think the responses we files. received were right on target for what But Gardei’s April 3 statement to USDA NOMINATION OF CHARLES is needed at this time. investigators makes no mention of any calls ROSSOTTI, OF THE DISTRICT OF He said that he would not tolerate in October from Haas or any other California COLUMBIA, TO BE COMMIS- IRS workers who treat taxpayers abu- strawberry leader. SIONER OF INTERNAL REVENUE sively and would fire such workers as Neither Gardei nor Breed have been avail- The Senate continued with the con- necessary. able for interview. Breed denies in his state- sideration of the nomination. I don’t know about my colleagues, ment to the inspector general’s office that he Mr. MOYNIHAN. Mr. President, I but as one Member of the Senate, I feel sought to cover up or mislead USDA inves- yield such time as he may require to a sense of apprehension when I deal tigators. His secretary denied in her state- with the Internal Revenue Service, and ment that he ordered her to remove Gardei’s my distinguished friend and colleague administrative report from USDA files. on the Finance Committee, the Sen- I am a Member of the U.S. Senate and sit on the Senate Finance Committee While Michigan’s Abraham had hoped to ator from Louisiana. have a subcommittee hearing soon to explore The PRESIDING OFFICER. The Sen- which has jurisdiction over the Inter- USDA handling of the strawberry purchase ator from Louisiana is recognized. nal Revenue Service. Yet, I feel a little and probe, congressional aides say it appears Mr. BREAUX. Mr. President, I thank hesitant when I deal with the agency as if no hearing will be held this year. the ranking member, the Senator from for fear of doing something wrong. It is Congressional aides say USDA Inspector New York, for recognizing me. like that knock on the door that comes General Roger C. Viadero has asked to meet I take this time just to say a couple and someone says, ‘‘It is the IRS,’’ and privately with interested legislators about of words about the President’s nominee they are here to see you and you go the issue. to be the Internal Revenue Service into an absolute panic. That should not be the feeling that Americans have to- Mr. ABRAHAM. Mr. President, this Commissioner, Mr. Charles Rossotti, ward an agency that really works for information, if true, is very inconsist- who I enthusiastically support. I think them. They work for the taxpayers of ent with what was asserted by Federal the President has made a good choice. this country, as do we. officials at a June 5 hearing of the full It is interesting to note that this ap- pointment will be the first nontax law- So I was very pleased to see Charles Agriculture Committee. There, USDA Rossotti say, ‘‘I will not tolerate IRS officials testified at the hearing that yer to head the Internal Revenue Serv- ice since World War II. That might not workers who treat taxpayers abusively they knew nothing more than nonspe- and would fire such workers, if nec- cific and vague complaints of potential make a lot of waves in some areas, but I think considering the problems we essary.’’ violations at Andrew & Williamson, the He also said that the practice of eval- San Diego company which sold the are experiencing with the Internal Rev- enue Service that this is a very posi- uating an IRS employee performance fruit to the Government for school based on quotas or based on how many lunches. tive qualification at the current time. I say that because I think that many cases they make will not be a deter- If the newspaper article and witness of the problems that we heard in the mining factor in how well they do allegations are true, it would certainly days of hearings that we had in the within the agency. I think that is im- raise serious questions as to whether Senate Finance Committee about the portant. I think some of our colleagues have the full committee and this Senator Internal Revenue Service were not so probably had experiences in respective were misled. I believe we are owed an much tax problems but human prob- States where State troopers were pro- explanation and suggest the Govern- lems; not so much a problem about how moted and evaluated based on how ment officials involved be called to tes- much money was being collected and many tickets they wrote. It was a tify under oath regarding their actions. where it was being collected from or quota system. They had to issue so OVERDELL where it was not being collected from, Senator C has written many tickets in 1 day or they were USDA to ask for a response to these se- but really more evidence was given to going to be looked upon as not doing rious charges, but so far nothing has us about mishandling of individuals, their job properly. That is something been heard. It is my intention to keep mistreatment of individuals, setting that I think is a mistake. pressing the USDA for answers as well quotas for Internal Revenue Service Mr. Charles Rossotti has indicated as seek the appropriate oversight of agents that they had to meet in order that that will not be the basis for eval- this matter. I want to be sure that the to be considered for an appointment; uating and determining performances Government agencies responsible for review processes of Internal Revenue by IRS agents. I think that is a step in protecting us are doing their job. Service personnel that were conducted the right direction. They should not be This dangerous incident, the poison- by Internal Revenue Service personnel judged just on how much money they ing of Michigan children by their own themselves whose appointments many bring in. They should be judged on a School Lunch Program, should concern times were based on how they defended whole series of factors on how they per- us all, Mr. President. The company in- the Internal Revenue Service. form on their jobs, not the least of volved seems to have demonstrated a These are not problems that call for which is how they treat the people reckless disregard for public safety. a tax attorney but rather cry out for a they work for—the taxpayers of this person who is experienced in the busi- To that end, I have introduced legis- country. ness world, who is experienced with He outlined three principles. These lation which makes such conduct a fel- handling large numbers of employees, are not tax principles. These are per- ony with a maximum penalty of 5 years who is experienced in the management sonnel principles, management prin- imprisonment and/or a fine of $250,000 of a company or in the management of ciples, and that is why I think he is the per count. This change in law will en- a corporation. These are the type of right man for the job at this time. sure that individuals who intentionally qualifications that I think are needed In talking about management re- misrepresent their goods will now suf- at this particular time in the history of sponsibility, he said he would expect fer the appropriate consequences of the Internal Revenue Service. It is a managers to keep on top of activities their actions. The recent outbreaks of very large agency with over 100,000 em- under their authority and quickly halt hepatitis A, cyclospora and E. coli dem- ployees, and, of course, there are going abuses. These managers will be respon- onstrate that a new commitment to to be mistakes made. The question is sible for the abuses that may or may food safety is sorely needed in this not whether mistakes are going to be not occur within their jurisdiction. country. I will continue working to see made, but rather how we correct those He said that he was going to be that Congress takes the appropriate mistakes. I think Mr. Charles Rossotti strongly supportive of open commu- measures to assist the USDA, FDA, and brings a particular degree of expertise nication. He wants to create an atmos- Centers for Disease Control in their ef- to this position at this particular time. phere in which workers are willing to forts to keep America’s food supply the I was interested in some of the an- bring problems to the attention of the safest in the world. swers that he gave when we asked him managers without fear of reprisal. That Mr. President, I yield the floor. questions about what he thought need- is a personnel decision. We had people S11592 CONGRESSIONAL RECORD — SENATE November 3, 1997 from the agency testifying before our rectly, improper, or illegally in order in the business world, but not as a tax committee behind a screen to separate to justify a penalty against the Amer- lawyer. them from the other IRS personnel for ican taxpayer. I think that is incor- In business, he provided a superior fear of retribution because of their tes- rect. I think that that should be product and a superior service. The timony. changed. country desperately needs a superior They actually said they were fearful The other point that I think is im- product and superior service at the IRS to tell anybody about the problems portant to note right now is that we and a manager who can deliver both. that they saw for fear of being retali- have legislation—I have introduced it That is why the country needs someone ated against or demoted or never pro- with a number of cosponsors; it has like Charles Rossotti to be Commis- moted because of their willingness to been incorporated into the Senators sioner of the IRS. come up and say, ‘‘Look, there’s some- KERREY and GRASSLEY proposal—which Senator KERREY and I found, through thing wrong in my section. I don’t creates this commission, which creates our work on the Commission to Re- think we’re dealing right with the peo- what I will call a Taxpayer Protection structure the IRS, that what the IRS ple that we work for.’’ So I was very Office where when the taxpayer has a really needed was not a tax lawyer to pleased to see that the nominee ad- problem with the agency, that he or head it up. That had been tradition. dressed the question of open commu- she knows there is some place where he What they need is an organizational nication. or she can go, either by walking into a leader. I think Charles Rossotti fills And then, finally, on the performance district office or using a 1–800 tele- that responsibility. The duties of the measurements—and I mentioned this— phone number to explain their side of IRS are very much like a big business he said, there will be no revenue quotas the dispute and have someone in the organization. or perceptions of quotas in worker agency take the time to learn their Last year, the IRS had revenue of $1.4 evaluation. Instead, he said he wants side of the issue, so that they can have trillion and a congressional appropria- to create a set of measurements that someone to represent them and their tion of over $7 billion to collect that money. On the other hand, the IRS do in fact measure what we want, in- position before their own Government. cannot satisfy the General Accounting cluding taxpayer satisfaction with I think that is important. their dealings with the agency. We have a type of office like that Office that its books are in order. The I think that that goes a long way. If now called the Taxpayer’s Advocate, IRS has a work force of 106,000 people. This compares to the 50 largest busi- an agent is of the opinion that he is but it really is run by IRS agents. They ness organizations in America. The IRS going to be judged on his performance are only going to be there a short time. serves 115 million individual taxpayers. based on how much money he brings in, Then they will be promoted or de- Last year, it received 76 million inquir- there is a certain degree of pressure to moted, depending on their perform- ies. It handles 200 million different tax go out and do as much as he or she pos- ance, to some other part of the depart- returns and over 1 billion information sibly can. That should not be the guid- ment at a later date. So those people ing principles of the Internal Revenue returns annually. are just moving through the system. It has offices in every State in the Service agents when they deal with the Our legislation says that these people Nation. The National Treasury Em- American public. shall not directly be IRS employees, ployees Union is one of the largest The final point I make is that I think but should be more an organization most of us would agree that the Amer- labor unions in the country. The IRS that looks after the interests of the deals with over 12,000 financial institu- ican taxpayer should feel there is taxpayer and would be subject to the someone within this department that tions and 12 Federal Reserve banks in Commissioner himself’s jurisdiction. I some 600 locations. is on their side. They know that the think that should go a long way to All of these things taken together re- 104,000 Internal Revenue Service agents helping the American taxpayer know quire a manager with very special have a job, that their job is to collect that within this bureaucracy there is skills. Those skills do not necessarily the legitimate revenues that are owed some department, some division, some- involve expertise in the Tax Code. Con- by taxpayers so that their country one who is actually going to be on sequently, that is my argument. The could be a better place, a safer place in their side and help them represent tradition of having a tax lawyer as IRS which to live. They understand that. their case to the Internal Revenue Commissioner is overblown. Somebody But right now they feel that in deal- Service itself. with organizational skills coming from ing with this agency of Government, So I think that is where we are a business organization with a proven there is no one on their side, that they today, and the question before the Sen- track record in that environment is the are against a bureaucracy and that ate is, should the Senate confirm this best person to run this massive organi- they are really helpless, particularly nominee? I enthusiastically lend my zation we call the IRS. when they understand that they have support to the nomination. We had an The IRS Commissioner’s job has been to somehow prove themselves innocent excellent hearing with him. I think thought of as the chief tax collector of if they are ever accused by the Internal what he said was right on target. The our country. In a way, I hope that Mr. Revenue Service. I think that is wrong. fact that he is not a tax lawyer is prob- Rossotti does not become the Nation’s I mean, every courthouse in America ably part of his qualifications for this chief tax collector. We all expect him that I have ever been in, when someone particular title. I support the nomina- to collect every dollar that is legally is accused of doing something wrong, tion. due. the person who is bringing that accusa- I yield the floor. But I would rather think of the Com- tion, whether it be a State’s attorney, Mr. GRASSLEY addressed the Chair. missioner’s job as that of the ‘‘chief the district attorney, or what have The PRESIDING OFFICER. The Sen- customer service representative’’ at you, has an obligation to make the ator from Iowa. the IRS. We need to instill, in other case beyond a reasonable doubt and Mr. GRASSLEY. I ask unanimous words, through Mr. Rossotti and his with a preponderance of the evidence in consent that my time be taken from background, the attitude of customer civil cases and beyond a reasonable the leader’s time. service at the IRS. In other words, an- doubt in criminal cases. The person The PRESIDING OFFICER. Without other way to say that would be to put making the accusation has to prove it objection, it is so ordered. the word ‘‘service’’ back into the Inter- to various standards according to the Mr. GRASSLEY. Mr. President, I nal Revenue Service. Mr. Rossotti court that they happen to be operating voted for Mr. Rossotti to be reported seems to recognize improved customer in—except here, where the Government out of the Senate Finance Committee. service as his personal task. In the pri- can bring down the full bureaucracy of So, obviously, I support his nomination vate sector he knew his organization the American Government on an indi- on the floor of the Senate today. would not be successful without put- vidual taxpayer, and somehow that in- His re´sume´ differs from many of his ting customer service No. 1 on his pri- dividual has to come in and say, ‘‘Let predecessors. That is, he did not come ority. me attempt to prove my innocence,’’ to this position through appointment In January this year I wrote to the instead of having the Government of the President as a tax practitioner. President. I discussed the kind of per- prove that something was done incor- He comes to us from having succeeded son that we would need to be the next November 3, 1997 CONGRESSIONAL RECORD — SENATE S11593

IRS Commissioner. Mr. President, I nominee for the post of IRS Commissioner. If man, Senator ROTH, is very sincere in ask unanimous consent to have that you are interested, I would like to help you his expression of these reservations. letter printed in the RECORD. with the selection process. But, speaking for myself, delaying IRS There being no objection, the mate- Sincerely, reform is a mistake. The Senate should rials was ordered to be printed in the CHARLES E. GRASSLEY, U.S. Senator. pass our legislation yet this year. The RECORD, as follows: House is prepared to pass the compan- Mr. GRASSLEY. In subsequent dis- U.S. SENATE, ion bill. We can make IRS reform the Washington, DC, January 13, 1997. cussions with Deputy Secretary Sum- law of the land before the 1997 holidays. Re selecting a non-lawyer as the next IRS mers we agreed that now is the time to If we did, the Senate would create a Commissioner. acquire a nontax practitioner to lead new reason for Americans to be thank- The PRESIDENT, the IRS. ful this November. The White House With Mr. Rossotti, we hope to cap- There are two reasons for the Senate Washington, DC. ture the benefit of a superior organiza- to join the House in supporting the IRS DEAR MR. PRESIDENT: Presently you are tional leader. The risk is that a non- confronted with the resignation of Internal Restructuring and Reform Act. First, lawyer could not handle the legal side troubled taxpayers literally can’t wait Revenue Service Commissioner Margaret of the Commissioner job. At the Fi- Milner Richardson. Though the Commis- for the relief that we provide in our sioner and I have disagreed on certain prac- nance Committee hearing on Mr. bill. Second, the Senate will hopefully tices and policies of the IRS, we have had a Rossotti’s nomination, I asked Mr. confirm the next IRS Commissioner good working relationship that has resulted Rossotti how he intends to perform nomination. Mr. Rossotti needs the in some successes. legal analysis as a Commissioner of the As you begin to consider persons whom you tools that are in our bill in order for tax law agency when he does not have him to fully succeed in his job. Let’s will nominate as the next IRS Commis- that background. He responded that he sioner, I urge you to consider nominating a not require him to spin his wheels for new kind of administrative leader for the would do it exactly the same way he another half-year. When you are deal- IRS. Rather than focusing on lawyers with a would do it as a private-sector business ing with the Internal Revenue Service, workable knowledge of the tax law, it may leader. He would hire good advisers, every day counts. If you are a tax- be time to nominate someone who is both a consult the experts, and make clear de- paying family and you are being hunt- non-Washington, D.C.-insider and a non-law- cisions based upon all the information ed by the IRS, you need relief right yer to be the next IRS Commissioner. A per- supplied to him. son educated in business and experienced in away. If the Senate does not pass relief The Nation has a great opportunity until 5 or 6 months from now, individ- running a large private sector company with a person like Charles Rossotti. would be better suited to administer the IRS ual taxpayers will continue to suffer. than most lawyers. When coupled with legislative reform At best, they may lose their life’s as- The duties of IRS are very much like a at the IRS, a nontax practitioner as sets. At worse, they may lose that business. The IRS would benefit from the IRS Commissioner represents a sea which holds the family together. If you leadership of a trained and experienced busi- change at the IRS. The IRS is moving are in trouble with the IRS, 6 months ness person. Last year, the IRS had a reve- away from being a law enforcement nue of 1.4 trillion dollars, and a Congres- is an eternity. agency and toward becoming a cus- The IRS Restructuring and Reform sional appropriation of over 7 billion dollars, tomer service agency. Of course, it is but it cannot balance its own books to sat- Act would provide immediate relief to isfy our own Congressional accountants, the about time. Most people pay their taxpayers in trouble. We would extend General Accounting Office. taxes voluntarily and pay them hon- to taxpayers a greater ability to re- The IRS has an employee workforce of estly. cover costs and fees incurred to defend 110,000 individuals. This makes it comparable Therefore, I encourage all my col- the family against the aggressive tax to the group of the fifty largest companies in leagues to support Mr. Rossotti’s nomi- man. In the Senate hearings where we the country. The IRS has 115 million individ- nation and then we can take up the had these sort of horror stories about ual taxpayers that it must serve. As tax- matters of legislative reform of the payers, all of these customers, are also own- how the IRS can treat the taxpayer, we ers of the IRS. IRS received 76 million tax- IRS with him as an ally. found that many taxpayers simply pay payer inquiries last year. It handles 200 mil- I think I need to speak for a moment an unlawful tax assessment. Often it is lion different tax returns, and over 1 billion in support of the Internal Revenue cheaper than a legal defense against information returns annually. It has offices Service Restructuring and Reform Act, the IRS. in every state in the nation. The employee the Kerrey-Grassley legislation. Our When there is a tax due, our legisla- union with which the Commissioner must bill, S. 1096, is the product of 1-year’s tion sets standards and sets allowances deal, the National Treasury Employee’s work in the National Commission to within which we would require the IRS Union, is one of the largest labor unions in Restructure the Internal Revenue the country. The IRS deals with over 12,000 to make offers in compromise of a dis- financial institutions and 12 Federal Reserve Service. Senator KERREY and I partici- puted claim. In other words, taxpayers Banks in some 600 locations. pated in the commission as four con- get to pay their bill and go on with I think that these things suggest the need gressional Members of this 17-member their lives. When a disputed claim in- for an expertise that is not taught in law commission. The other 13 members cludes both an IRS debt to the tax- school and is not tested on any bar exam. were non-Congress-oriented, and 10 of payers and a taxpayer debt, we once The best of our prospective administrative those were from the private sector. So and for all eliminate the IRS interest leaders are found in this country’s private I think we had a broad range of exper- sector companies. One would think that, if rate preference over taxpayers. the President of the United States would tise on this commission to study how Currently, when you owe the IRS ask, he would have his choice of the best of can we make the IRS more consumer money you pay a higher percentage the best. friendly and more efficient in its oper- than when the IRS doesn’t make your There will be people in both the public and ation. refund and the Government owes you private sector who will criticize the idea of a The House might pass this same leg- money. So if we wait another 6 months, non-lawyer running the IRS. Many of these islation as early as tomorrow. Our leg- we continue to give the Government people will be professionals of what I call the islation is maybe the only thing more the monetary advantage over the tax- federal tax industrial complex. About these important to the IRS and the tax- criticisms, I will say two things. First, most payer. The Government earns a higher of the critics will themselves be lawyers. payers than who the next Commis- rate of interest from taxpayers than Second, I will remind them that many non- sioner might be. If that Commissioner what the taxpayer get in return. It is a lawyer CEOs of this country all have many is dedicated, as I think Mr. Rossotti is, matter of equity that we would not lawyers who work for them, and they seem to change at the IRS, then he needs our charge the taxpayer more than we are to get along just fine. I would even suggest legislation in order to succeed. willing to pay the taxpayer for money that the stock-holders of big companies run I introduced S. 1096 with Senator not refunded. by non-lawyers are much happier with the KERREY last July. However, the Senate Indeed, fundamental fairness is what production and service of those companies, seems to be on track to address this finding a new breed of IRS Commis- than the people who own the IRS, the federal taxpayers. legislation next year rather than this sioner is all about. We are about ready For these reasons, I sincerely hope that year. There are arguments to wait— to confirm Mr. Rossotti to be this per- you can select a non-lawyer as your next and I think our distinguished chair- son. I think he will be a fundamentally S11594 CONGRESSIONAL RECORD — SENATE November 3, 1997 new sort of IRS Commissioner. He is often. Each mistake translates into an recent hearings were barely over when experienced in leading large multistate expense of time, money and, most im- my office started hearing from basi- organizations. He is experienced in or- portantly, hardships for the taxpayers. cally two groups of taxpayers: those ganizing state-of-the-art information In our legislation, the Senate offers who were cynical, saying, well, now systems. That is his business. He is ex- some strategic direction. that the hearings are over, I suspect perienced in providing customer serv- We will direct the IRS and the next nothing more will happen and it will be ice or he would not be the head of a Commissioner to reach a target elec- business as usual. very successful private-sector organi- tronic tax filing rate of 80 percent by That was the first type. The second zation. the year 2007. That 10 years starts right type were those who were relieved to However, when he takes office, he is now, and it ought to start right now; it discover what appeared to be a very se- going to need all of the tools that we ought to not start 6 months from now rious Congress finally looking toward can think to provide him in order to when the Senate gets around to acting reform and an effort to prevent IRS succeed. It seems to me that Congress on this legislation. The Commissioner abuse. So they were saying to me, as a needs to pass legislation to knock nominee recently told the Finance Senator, that they were not alone and down the legal barriers to his success Committee that, once he can begin his that they were now willing to come on behalf of the taxpayer. Charles job, it will take him 10 years to design forward and to express to me, or to a Rossotti needs the tools of reform on and implement a state of the art infor- larger body of interest, their experi- his very first day, not 6 months from mation system at the IRS. We need to ence with the IRS, the problems they now, and the IRS Restructuring and get that 10-year clock ticking right had. Reform Act provides those tools. now, not 6 months from now. And the Similarly, the IRS restructuring bill For example, our legislation provides 10-year clock will not tick until the that is now moving through the other that the incoming IRS Commissioners taxpayers get this legislation, the IRS body is a start. Let me suggest, and I would sit for a single 5-year term. The Restructuring and Reform Act. think the ranking member who is here revolving door between the Commis- For example, our IRS Restructuring on the floor, the Senator from New sioner’s office and the tax industry will and Reform Act would provide and set York, would agree it is only a start. be closed. We will require Commis- standards for security and access to Taxpayers deserve as much due process sioners to stick around long enough to taxpayers’ electronic accounts. If we protection in the matter of taxes as do reap what they sow. More important, are going to have electronic filing, we all other citizens dealing with our Gov- we will provide the Commissioner with will need electronic payment. Other- ernment in all other issues. an independent board of nine persons wise, we would still have people out Blatant disregard for individual who will be his strategic leaders. The there licking stamps and going to the rights has all been in pursuit of one board will provide guidance on long- post office on April 15. Our legislation goal by the IRS, and that was, ‘‘Get the term goals and investments. The Com- accomplishes these things and many money, get the money,’’ and sometimes missioner will implement the cor- more. at nearly all costs to due process, and responding day-to-day leadership at In short, waiting until next year to we heard some of those examples ex- the IRS. pass IRS reform is bad for taxpayers, pressed by witnesses before the Fi- Our legislation provides that the new and it’s going to be lengthening the pe- nance Committee. Drug dealers, child Commissioner need not operate as a riod of time that Mr. Rossotti will be molesters and organized crime in many team of one. Our legislation offers the the most effective Commissioner we instances have more legal rights than opportunity for the new Commissioner have had for a long time. the average taxpayer whom the IRS to bring in his or her own team of sen- I yield the floor. suspects may owe a few dollars of back ior managers, because currently at the Mr. MOYNIHAN addressed the Chair. taxes. IRS and over decades of time, high- The PRESIDING OFFICER. The Sen- With the IRS, the taxpayer is guilty level bureaucrats at the IRS know they ator from New York is recognized. until proven innocent, and therein lies can always outlive any new IRS Com- (The remarks of Mr. MOYNIHAN per- the difference, because I will tell you missioner. Previous IRS Commis- taining to the submission of Senate that a drug dealer is, by law, innocent sioners have gone into those positions Resolution 142 are located in today’s until proven guilty, as is the child mo- with high-level management there in a RECORD under ‘‘Submission of concur- lester. But we heard very clearly from place frustrating what the Commis- rent and Senate resolutions.’’) those witnesses that they were guilty sioner wants to accomplish. Mr. CRAIG. Mr. President, today I until proven innocent. Unlike the FBI So it seems to me that the taxpayers rise in support of the nomination of or the local sheriff, if the IRS thinks deserve the best. Our legislation allows Charles Rossotti to be IRS Commis- someone has underpaid taxes, it can the next Commissioner to recruit the sioner. I don’t know whether to offer seize cars, freeze bank accounts, and best and then to retain the best. We this new Commissioner congratula- all under its own authority without ob- make it clear as the intent of the law. tions or condolences. He comes to the taining any kind of impartial or prior Mr. Rossotti hopes that even under ex- IRS at a time of great turmoil and, I approval. If the taxpayer fills out his isting law he can bring people in from must say, also at a time of great oppor- or her return relying on tax advice other agencies of Government, through tunity. The process of investigating from the IRS and that advice turns out the Senior Executive Service, to ac- and reforming the IRS has only just to be wrong, guess who is liable. Not complish a team that he wants. How- begun, and I commend Senator ROTH the IRS, that’s for sure, but the tax- ever, it is not clear if he can bring in and the ranking member, the Senator payer himself or herself. If the IRS people from outside of Government. He from New York, Mr. MOYNIHAN, for wrongfully assesses back taxes or pen- will need such new faces in order to get holding the recent Finance Committee alties, the taxpayer usually has three the job done. We ought to give him the hearings, and especially commend the basically no-win choices to make: You best team that he sees necessary to ac- courage displayed by the witnesses at pay up and shut up, take the case to complish his goal. those hearings. I say ‘‘courage’’ be- the tax court where the judge is usu- However, I would say, having the cause oftentimes in the past, as wit- ally a former IRS employee and tax- right personnel is not enough because nesses have come forward, they were to payers usually lose, or pay up and then much of the trouble at the IRS stems find themselves only later victims of a go to Federal district court and sue to from the IRS information system deba- very aggressive rogue agency that get your money back. cle. Currently, the IRS gets poor infor- would not adhere to any reasonable Remember, I say ‘‘sue to get your mation from its computers and then policy of treating the taxpayer as money back.’’ While the Finance Com- makes it worse. In this age of informa- somebody who deserved appropriate mittee’s investigations focused on tion and technology, most persons are treatment. middle- to lower middle-income indi- still filing paper tax returns. Then em- I suggest that those hearings and viduals, I had the representative of a ployees of the IRS input that data by those witnesses are merely the tip of relatively large corporation in my hand at the IRS processing centers. an iceberg; there is so much more to be State approach me and say: You know, This is where mistakes happen most uncovered and to be investigated. The Senator, I know we get no sympathy. November 3, 1997 CONGRESSIONAL RECORD — SENATE S11595 We are considered big and therefore we The tail is wagging the dog, and the Tax Code—that was an understanding are considered wealthy as a company. IRS is now widely perceived as a rogue in this country that laws ought to be But a good number of years ago the agency, marching to its own beat with self-enforcing and that citizens really IRS withheld an additional $8 million Congress afraid to touch it because did want to pay their taxes, their fair that they thought was theirs and we Congress itself, individually, could be share of running a Government and thought was ours, and we went after it, audited. And that has happened in the keeping a free society and assuring and not long ago the courts ruled it past. that our democracy survived. was ours. The only problem is, the $8 So we draw back quietly, talk tough That has not been true of the last million plus the interest plus all other on the floors of our collective bodies, several decades. Taxpayers today are assessments was now about $24 million. but very seldom follow through with much more often heard to be telling Will they get it back? I doubt it. But actual and real hearings and reform their tax accountant: Find out every- it was the IRS that was wrong, and it that is a product of those hearings. I where you can where I do not have to was the large corporation that was certainly hope that is simply now the pay taxes, because the code is too com- right. Now, that large corporation exception, and the rule of the day, with plicated and the taxes are too much. could spend the money to fight the IRS the action that the other body is tak- Grandfathers used to pay only about 20 and they probably could write off a lot ing and the action that I hope we will percent in their taxes. That meant of their expenses fighting the IRS. take, will be comprehensive and broad- they got to keep 80 percent. Their Could an individual, small taxpayer, do ranging reform of this agency. grandchildren in today’s work force that? Absolutely not. So, even when Sometimes problems happen because now have to pay nearly 50 percent in the IRS loses, it really wins, because previous Congresses, liberal Con- their taxes, keeping only half. the IRS, with unlimited resources, has gresses, or simply those with a raven- And we wonder why families can’t been known to appeal and appeal a ous appetite that the taxpayer pay the provide for themselves today, why both weak case until the innocent taxpayer money because we need the money— parents are working when one may not gives up or is just simply financially whether it is balancing the budget or want to. Oftentimes it is a combina- exhausted and goes away. That is a spending beyond the will of the citi- tion, but most often it is just simply story that should not have to be told zen—the money has to be there. So we that they have to pay so much, so on the floor of the U.S. Senate, but it have granted IRS what I call power be- much is taken from their paycheck is in fact a story of fact that occurs yond the law, in many instances, to that they cannot survive unless both many times across this country when collect what we ask them to collect. In are working and providing for their it should not. any case, there is never an excuse for family. I think the IRS needs to realize that such behavior, and this Congress is Underlying our commitment to mak- the taxpayer is the boss, because in our going to change things, I hope. Cer- ing substantial tax reform a reality, I system of Government that is exactly tainly, if it is this Senator speaking by have also cosponsored leading bills to the way it ought to be. Taxpayers are his intent, then it is my intent, and I sunset the current Internal Revenue not a suspect criminal class in our so- believe the intent of a bipartisan Con- Code by the year 2001. Mr. President, this Senate, the 105th Congress, led by ciety. Yet it appears from what we gress, for major reform. And that we conservative Republicans, have a have heard, in example after example, must get at. and a good many more that could be So I invite the Commissioner whose unique opportunity, working with all expressed, that that is oftentimes the nomination will be voted on today to of our colleagues, to assure that major way they are viewed by the IRS. Tax- work with us in a constructive way to reform of the IRS occurs and that we payers should be treated with respect change the character, the image, the lead a march toward a significant re- and dignity and should be presumed in- style, the culture of an agency that is form of the code that brings us to a nocent until proven guilty. now out of control. And witnesses in simple, fairer form that then allows the responsible downsizing of the IRS. Why should this Senator have to say our country, those who make up our No people can remain free or their that on the floor, when it ought to be country, have so demonstrated. government effective if they do not dis- a matter of fact and law? Because it is Real IRS reform also depends on real play trust and confidence in each not a fact today, and now we know it. Tax Code reform. I will not mention other. Yet, America’s tax system in- There should be no quotas, pushing the Senator, but right after we offered creasingly eats like a cancer at the agents to prosecute dubious cases. Tax- some reasonable tax relief this year, he very bonds of support and the legit- payers should not be targeted on the said: Well, there is relief in the Code, if imacy of our society. basis of how little resistance they can you can find it. So now, to the lower I urge all of my colleagues and invite offer. Can you imagine that as the pol- middle-income people for whom we the new IRS Commissioner to redouble icy of a Federal agency, ‘‘Let’s pick on champion the tax relief, we say now go their efforts to restore fairness to the those who can offer least resistance be- hire an accountant and spend the tax system and trust to the people. Re- cause we will get a greater yield on the money to get the tax relief, and prob- form for the Tax Code, making it sim- money spent,’’ when they could be in- ably the tax relief will at least pay for pler, fairer and, I hope, flatter, is one nocent and can be at least embattled the accountant. If that is true, that is approach toward doing that. Reform until they are willing to give up? There tragic. And tragically enough, that is for the tax collector, increasing IRS should be no vendettas, absolutely not, probably true. accountability and requiring the IRS and yet there appear to have been some Sometimes the problem is the Tax to treat the taxpayer with dignity, re- and probably are some. The privacy of Code—too complicated even for the spect and the due process of the law taxpayers should be fully respected. IRS to understand it. Listen to these would be a legacy that I wish could be And, yet, is it? figures. The IRS publishes 480 different done during my tenure in the U.S. Sen- Both the IRS and the Congress have tax forms and another 280 forms to ex- ate and I believe that would be a legacy been a part of the problem. I can point plain the first 480. If laid end to end, that a majority of the Senators would the finger only at the IRS, but that the 8 billion pages of instructions sent like to leave. That is our goal. That is would be somewhat unfair. We have out by the IRS every year would circle certainly my hope. Recognizing that, I created one of the most complicated the Earth 28 times. That is why Sen- yield the floor and suggest the absence tax systems in the history of this coun- ator SHELBY and I introduced—or re- of a quorum. try. Sometimes the problem is the IRS, introduced—the Freedom and Fairness The PRESIDING OFFICER. The who act outside the law—or certainly Restoration Act, better known as the clerk will call the roll. to the very edges of the law. I am sure flat tax. Why? Simplification, equity, The bill clerk proceeded to call the most IRS employees are decent, hard- fairness, the ability with ease to fill roll. working, and conscientious people. And out a form, to know you are in compli- Mr. CRAIG. Mr. President, I ask I know many of these employees, as do ance when you do it, and to once again unanimous consent that the order for others, and they would fit that which I set in motion something that has been the quorum call be rescinded. have just described. But the exception historically true up until about two The PRESIDING OFFICER. Without has become the rule, tragically enough. decades ago of the taxpayer versus the objection, it is so ordered. S11596 CONGRESSIONAL RECORD — SENATE November 3, 1997 Mr. CRAIG. Mr. President, I ask Mr. Rossotti has the background and experience, including his current posi- unanimous consent that the vote occur expertise to help him achieve the dif- tion as Chairman of American Manage- on the pending nomination at 5:45 this ficult tasks we expect of him in the ment Systems. evening. days ahead. I wish him every success, During his confirmation hearings, The PRESIDING OFFICER. Without and look forward to working with him Mr. Rossotti expressed a willingness objection, it is so ordered. to make sure the Internal Revenue and desire to implement fundamental Mr. BAUCUS. Mr. President, I want Service reaches its full potential. changes that would focus on the rights to take this opportunity to express my Mr. DODD. Mr. President, I rise of the taxpayer, modernize the agency support for the nomination of Charles today in support of Charles Rossotti’s and its technology, and strengthen Rossotti to be the new Commissioner nomination to serve as Commissioner communication between Congress, the of the Internal Revenue Service. Mr. of the Internal Revenue Service. The IRS, and the public. In my view, Mr. Rossotti will face a daunting challenge IRS is an agency under widespread, Rossotti has the vision and the capabil- as he takes over the reins of this be- deeply felt, and entirely justified criti- ity to lead this agency and is commit- sieged agency. cism. In my view, the nomination be- ted to holding the IRS to the highest The IRS has suffered from years of fore us today is perhaps one of the standards of efficiency, competence, neglect and lack of focus. As new Com- most critical the Senate will vote on and accountability. I urge my col- missioner, Mr. Rossotti will need to re- this session. I commend President Clin- leagues to support this nomination. pair the damage that has eaten away ton for endorsing an individual who has Mr. CRAIG. I suggest the absence of at the Service’s foundation and try to the expertise and vision to lead the ef- a quorum. restore some semblance of respect for fort to restructure and reform this The PRESIDING OFFICER. The the IRS among the average taxpayer. troubled agency, as well as my col- clerk will call the roll. The bill clerk proceeded to call the At the same time, he will need to be leagues on the Finance Committee for preparing the IRS for the challenges of roll. moving the nomination expeditiously. Mr. MURKOWSKI. Mr. President, I the next century. It is no secret that the IRS has come ask unanimous consent that the order The public expects some essential under fire lately from taxpayers who, for the quorum call be rescinded. services from the Government, and in their dealings with the agency, have The PRESIDING OFFICER. Without most people are willing to pay their experienced anger, frustration, and de- objection, it is so ordered. fair share of taxes in order to pay for spair. The hearings conducted by the Mr. MURKOWSKI. Mr. President, I these services. Finance Committee earlier this fall rise to speak in favor of the nominee to Nobody likes paying taxes, but most highlighted some of the problems at be Commissioner of the Internal Reve- of us do it regularly and honestly. the IRS, including shoddy manage- nue Service, Mr. Charles Rossotti. Mr. In return, we expect the Government ment, poor taxpayer service, and in Rossotti is unique among nominees for to keep the process fair, make it as some cases, reports of taxpayer abuse this position since he is the first simple as possible, and keep our per- by IRS employees. nontax-lawyer nominated for the post. sonal information private. I’ve heard stories from my own con- In fact, he is a businessman who is Running the IRS is a study in careful stituents about calls that aren’t an- chairman of American Management balances. And I believe that the IRS swered, and about calls that are Systems, a company he cofounded in has somehow lost its ability to main- bounced from one person to the next, 1970, which now employs some 7,000 tain one side of the equation over the where they never get a real answer or people. years. any type of guidance or support. I’ve Mr. President, if this man is con- Many tax collectors, in their zeal to also heard stories about the IRS losing firmed, and I expect that he will be, he catch the few people who don’t pay people’s checks and then charging faces a daunting challenge in turning their taxes, seem to have lost sight of them interest and penalties on this around an agency which has very seri- the most important truth about our money. The list goes on and on, Mr. ous credibility problems with this Sen- tax system—that citizens have rights President, and the more people you ator and, I think, a majority of the that must be protected. talk to, the more nightmares you hear. American public as well. Anything less undermines our ability Every citizen who pays taxes has a As this country learned some 6 weeks to make a system of voluntary tax- right to be treated fairly, and treated ago in the hearings at the Senate Fi- ation work. as innocent until proven guilty. Al- nance Committee, the IRS is an agency We certainly don’t want to tie IRS’s though we have taken several steps in with structural and personnel problems hands so much that tax cheats are en- this regard in the last few years, there that have led to an agency culture that couraged, because the rest of us end up is still more that can be done, and that is abusive, unresponsive, and to some picking up the tab when someone is why I am a cosponsor of S. 1096, the extent arrogant. Far too often, the In- cheats. IRS Restructuring and Reform Act. ternal Revenue Service appears to be At the same time, we also can’t have This legislation aims to transform out of control, with no accountability IRS harassing innocent citizens, as- the troubled agency into a modern in- to the public or to the policymakers suming everyone is guilty the minute stitution that provides efficient and here in Washington. For anyone who they walk in the door. Mr. Rossotti fair service, yet still has the ability to has tried to phone the IRS lately, why, will be the one person we will expect to effectively collect revenues. Specifi- I think you get the flavor for my gen- help IRS find its way back to the rea- cally, the bill will enact 21 new tax- eralizations. sonable balance that our tax system re- payer protections and will establish a The bipartisan Kerrey-Portman Com- quires. hotline for taxpayers to register com- mission that examined the Internal I hope and expect that we in the Con- plaints of IRS misconduct. This legisla- Revenue Service recommended a series gress will do our best to help. tion, which enjoys broad, bipartisan of changes at the IRS, including the We will be looking at legislative so- support and is endorsed by the admin- creation of an independent board to lutions, to give the new Commissioner istration, is, in my view, a tremendous oversee IRS operations. Recently, the the tools to encourage the climate of step forward in our effort to protect House passed a measure incorporating change we need if we are to reverse the the rights of our nation’s taxpayers. nearly all of the Commission’s rec- past years of decline. Yet, without an effective leader to ommendations. However, I believe that We will be looking at stable funding, implement these much-needed changes, the lessons learned from the Finance to make sure Mr. Rossotti has the our ideas become nothing but good in- Committee September hearings sug- money to pay good people and buy new tentions. I believe that Mr. Rossotti is gest that far more needs to be done if computers. up to the challenge to successfully the public is going to regain a measure I hope we would also be looking at steer the IRS through this difficult pe- of confidence in the Internal Revenue tax simplification, to make it a little riod. Mr. Rossotti brings with him the Service. easier for both taxpayers and the IRS refreshing ideas and outlook of a suc- I applaud the Finance Committee to figure out how much our fair share cessful businessman with more than 30 chairman, Chairman ROTH, for his com- really amounts to. years of management and technology mitment to hold a series of hearings November 3, 1997 CONGRESSIONAL RECORD — SENATE S11597 that will build on the achievements of turn on the recommendations of the [Rollcall Vote No. 290 Ex.] the House and bring a tough reform bill IRS Commission and decided to back YEAS—92 to the floor of the Senate next year. the House reform legislation creating Abraham Feingold Mack To give you an idea of the structural an independent IRS management Akaka Feinstein McCain problems that exist at the Internal board. Allard Frist McConnell Ashcroft Glenn Moseley-Braun Revenue Service, consider the follow- That’s not the end of this matter. In- Baucus Gorton Moynihan ing description of the Service that was stead we need a top-to-bottom review Bennett Graham Murkowski done by Paul Light, author of ‘‘The of the IRS. In the past, we adopted two Bingaman Gramm Murray Bond Grams Nickles Tides of Reform: Making Government taxpayer bill of rights bills which Boxer Grassley Reed Work, 1945–1995.’’ many of us thought would improve tax- Breaux Gregg Reid Just imagine a bureaucracy that goes payer-IRS interactions. The hearings Brownback Hagel Robb something like this: an agent reports to a in the Finance Committee suggest that Bryan Hatch Roberts district group manager, who reports to a dis- Bumpers Hollings Rockefeller these bills did little to alleviate ten- Burns Hutchinson Roth trict group manager, who reports to a branch sions between the IRS and the Amer- Byrd Hutchison Santorum chief, who reports to an assistant chief of the ican taxpayer. Campbell Inhofe Sarbanes division, who reports to the assistant dis- Chafee Inouye Sessions trict director, who reports to the assistant That is why the Finance Committee Cleland Jeffords Shelby regional commissioner, who reports to the needs to hold further hearings on IRS Coats Johnson Smith (NH) deputy assistant commissioner, who reports reform. It has taken decades for the Cochran Kempthorne Smith (OR) to the assistant commissioner, who reports Collins Kennedy Snowe IRS to develop internal procedures Conrad Kerry Specter to the chief operating officer, who reports to that appear to make it unaccountable. Coverdell Kohl Stevens the deputy commissioner, and so on. We’ve learned of these problems 6 Craig Kyl Thomas What we have here, Mr. President, is Daschle Landrieu Thompson weeks ago. I am willing to admit that DeWine Lautenberg Thurmond a layered bureaucracy which implies we don’t know all the answers, but I Dodd Leahy Torricelli accountability on paper but which, in know that now is not the time to mere- Domenici Levin Warner reality, is designed by its very nature ly take the House bill, pass it, and tell Dorgan Lieberman Wellstone to be unaccountable. Durbin Lott Wyden the public we fixed the problems at Enzi Lugar Consider, Mr. President, the testi- IRS. We haven’t. mony the committee heard from Lynda NOT VOTING—8 Mr. President, Charles Rossotti is to Willis of the General Accounting Office Biden Ford Kerrey be admired for his willingness to leave [GAO]. D’Amato Harkin Mikulski the private sector and take on this Faircloth Helms IRS systems, both manual and automated, challenge at a time when IRS is in seri- have not been designed to capture and report The nomination was confirmed. comprehensive information on the use and ous trouble. I look forward to receiving Mr. MOYNIHAN. I move to recon- possible misuse of collection authorities. his recommendations for change at the sider the vote. IRS cannot readily produce data on the Service after he has been there a few Mr. LOTT. I move to lay that motion overall use or misuse of its collection en- months. And I am sure his hands-on ex- on the table. forcement authorities or on the characteris- perience will assist the Finance Com- The motion to lay on the table was tics of affected taxpayers. mittee in drafting a comprehensive agreed to. In effect, GAO said they couldn’t IRS reform bill. f audit IRS because the systems IRS has Mr. MOYNIHAN. Mr. President, I ask put in place are designed to ensure that for the yeas and nays on the nomina- LEGISLATIVE SESSION there is no way for IRS personnel to be tion of Mr. Rossotti. The PRESIDING OFFICER. Under held accountable for their erroneous The PRESIDING OFFICER. Is there a the previous order, the Senate will now actions. There is no way to determine sufficient second? return to legislative session. how many times IRS has made a mis- There is a sufficient second. f take in sending out a collection notice. No way to determine how many com- The yeas and nays were ordered. MORNING BUSINESS plaints have been received. And this is The PRESIDING OFFICER. The Mr. LOTT. Mr. President, I ask unan- the way the managers at IRS set up the question is, Will the Senate advise and imous consent that there now be a pe- system—set it up so that no one can consent to the nomination of Charles riod for morning business until 7 p.m., trace improper behavior. Rossotti, of the District of Columbia, with Senators permitted to speak for Mr. President, the committee also to be Commissioner of the Internal up to 5 minutes each. heard testimony to the effect that the Revenue Service? The PRESIDING OFFICER. Without Problem Resolution Office [PRO], the On this question, the yeas and nays objection, it is so ordered. office designed to resolve taxpayer dis- have been ordered and the clerk will f putes with IRS is, and I quote one of call the roll. our witnesses, ‘‘utterly useless’’ in pro- TRIBUTE TO SECRETARY OF THE The assistant legislative clerk called AIR FORCE SHEILA WIDNALL tecting the American taxpayer. The the roll. reason the PRO cannot function as de- Mr. KENNEDY. Mr. President, it is Mr. NICKLES. I announce that the signed is because employees at PRO are an honor to take this opportunity to Senator from New York [Mr. D’AMATO], pay tribute to Sheila Widnall, the Sec- evaluated for promotions by the same the Senator from North Carolina [Mr. Collection Division management they retary of the Air Force, who is leaving FAIRCLOTH], and the Senator from are supposed to police while assigned office at the end of this month to re- North Carolina [Mr. HELMS] are nec- turn to the Massachusetts Institute of to the PRO. essarily absent. Mr. President, there is no reason that Technology as a professor of aero- that kind of conflict of interest should Mr. BREAUX. I announce that the nautics and astronautics. In 1993, Sec- exist. I plan on working with the Fi- Senator from Delaware [Mr. BIDEN], retary Widnall became the first woman nance Committee chairman to develop the Senator from Kentucky [Mr. FORD], to serve as a service Secretary when legislation that will fundamentally the Senator from Idaho [Mr. HARKIN], she assumed her present position as the change the PRO structure to ensure the Senator from Nebraska [Mr. Secretary of the Air Force, and she has that taxpayers get a fair shake when KERREY], and the Senator from Mary- done an outstanding job. there’s a conflict with the IRS. land [Ms. MIKULSKI] are necessarily ab- During her distinguished tenure, Sec- Mr. President, the Finance Commit- sent. retary Widnall has led the Air Force tee hearings had a profound effect on The PRESIDING OFFICER. Are there through a critical period of post-cold- the American public and on the Presi- any other Senators in the Chamber de- war consolidation and adjustment. dent of the United States. Shortly siring to vote? Congress and the country are proud of after those hearings, and seeing the The result was announced—yeas 92, her achievements. She directed a mod- polls, the President did a 180-degree U- nays 0, as follows: ernization program to shape the future S11598 CONGRESSIONAL RECORD — SENATE November 3, 1997 of the Air Force and incorporate space Republic of Venezuela, the Fred M. Mr. President, all of us in this body technology into military operations. Butzel Award for Distinguished Com- can learn from the examples set by Bill She led the Department’s remarkable munity Service, and membership in the Davidson. I know my colleagues will success in overhauling its business Michigan Jewish Sports Hall of Fame. join me in offering him congratula- practices, including major initiatives One of Bill Davidson’s most remark- tions and best wishes on this important in acquisition reform, outsourcing, and able traits is his commitment to im- occasion. privatization to increase efficiency and proving the lives of people throughout f make maximum use of scarce funds. the world. Giving is an important part She has also taken the lead in of his life, and he is known locally and MESSAGES FROM THE PRESIDENT strengthening the Nation’s role in nationally for his philanthropic vision Messages from the President of the space, by working effectively with the and generosity. He does not take suc- United States were communicated to National Aeronautics and Space Ad- cess for granted and is most thankful the Senate by Mr. Williams, one of his ministration, the National Reconnais- for what he has achieved. As a result, secretaries. he chooses to support institutions and sance Office, and the private space sec- EXECUTIVE MESSAGES REFERRED programs which help develop the minds tor. As in executive session the Presiding Above all, Secretary Widnall has and bodies of tomorrow’s leaders. It is this commitment to philan- Officer laid before the Senate messages done her best to care for Air Force from the President of the United members and their families. Her em- thropy that was the guiding force for his creation of the Pistons-Palace States submitting sundry nominations phasis on equal opportunity and her which were referred to the Committee skillful and tireless pursuit of quality Foundation, the philanthropic arm of the Detroit Pistons and the Palace of on Commerce, Science, and Transpor- of life issues kept morale high during a tation. period of significant and far-reaching Auburn Hills. Bill Davidson and the foundation have contributed millions (The nominations received today are change. printed at the end of the Senate pro- Secretary Widnall brought an out- of dollars to support meaningful youth ceedings.) standing background to her current po- and recreation programs throughout sition. Her accomplishments include metropolitan Detroit. The Pistons-Pal- f many years as a professor of aero- ace Foundation is quickly gaining rec- REPORT OF THE CANCELLATION nautics and astronautics and also as ognition in the National Basketball As- OF DISCRETIONARY BUDGET AU- associate provost at MIT. She has sociation and receiving national atten- THORITY (97–72)—MESSAGE FROM earned international recognition for tion for its work in the city of Detroit, THE PRESIDENT—PM 77 her work in fluid dynamics, and has specifically through the PARK pro- had extensive service on numerous gram, which works to revitalize neigh- The PRESIDING OFFICER laid be- boards, panels, and committees in gov- borhoods by refurbishing and renovat- fore the Senate the following message ernment, industry, and the academic ing parks and installing outdoor bas- from the President of the United world. ketball courts and other recreation States, received on November 1, 1997, In her years as Secretary, Sheila equipment at sites. together with an accompanying report, Widnall has set a high standard of lead- Developing tomorrow’s leaders referred jointly, pursuant to Public ership and service to the Nation. I through higher education is another of Law 93–344, to the Committee on Ap- know I am joined by my colleagues in Bill Davidson’s highest priorities. He propriations and to the Committee on Congress and a grateful Nation in contributed $35 million to establish the the Budget. thanking her for her dedication and William Davidson Institute at the Uni- To the Congress of the United States: distinguished service to our country, versity of Michigan School of Business In accordance with the Line Item and I wish her well in the years to Administration. The institute strives Veto Act, I hereby cancel the dollar come. to help countries as they make the amounts of discretionary budget au- f transition to free market economies thority, as specified in the attached re- and to assist companies which seek to TRIBUTE TO WILLIAM DAVIDSON ports, contained in the ‘‘Department of operate successfully in those countries. Transportation and Related Agencies Mr. LEVIN. Mr. President, I rise To that end, the Davidson Institute of- Appropriations Act, 1998’’ (Public Law today to pay tribute to a truly out- fers seminars for business and govern- 105–66; H.R. 2169). I have determined standing business leader and philan- ment leaders from countries with that the cancellation of these amounts thropist from my home State of Michi- economies in transition and develops will reduce the Federal budget deficit, gan, William Davidson. Bill Davidson faculty fellows who teach or work in will not impair any essential Govern- has been chosen as the honorary chair those countries upon completion of the ment functions, and will not harm the of the Council of Michigan Foundations program. Bill also established the national interest. 25th annual conference, which takes world’s first educational institution WILLIAM J. CLINTON. place November 5–7, 1997. entirely dedicated to the international THE WHITE HOUSE, November 1, 1997. Bill Davidson is one of Michigan’s management of technology-based com- f most renowned businesspeople. He is panies at the Technion-Israel Institute the chairman of the board and presi- of Technology. Bill Davidson’s commit- REPORT OF THE CANCELLATION dent of Guardian Industries, an inter- ment to keeping Jewish education OF DISCRETIONARY BUDGET AU- national manufacturer of flat glass strong led him to help to create grad- THORITY (97–65)—MESSAGE FROM products for the construction and auto- uate school of Jewish education at the THE PRESIDENT—PM 78 motive industries. He is also the major- Jewish Theological Seminary of Amer- The PRESIDING OFFICER laid be- ity owner of the Detroit Pistons Bas- ica in New York City, which trains fore the Senate the following message ketball Club, the Palace Sports and En- educators for North America. from the President of the United tertainment Arena, Pine Knob Music It is not possible to do Bill States, received on November 1, 1997, Theater, the Detroit Vipers hockey Davidson’s lifetime of good works jus- together with an accompanying report, team, and the Detroit Neon soccer tice in a few words, but there is no referred jointly, pursuant to Public team. doubt among anyone who knows of him Law 93–344, to the Committee on Ap- Bill has received numerous citations that he is a truly remarkable person. propriations and to the Committee on and awards for his philanthropic activi- His dedication to improving people’s the Budget. ties, his contributions to the glass in- lives and the unpretentious way he dustry, and professional sports. Some goes about that quest has earned him To the Congress of the United States: of these awards include the Phoenix respect and gratitude from countless In accordance with the Line Item Award, an honorary doctoral degree people around the world. Millions more Veto Act, I hereby cancel the dollar from the Jewish Theological Seminary who will never know of Bill Davidson amounts of discretionary budget au- in New York, the Order of Merit in have benefited from his efforts and ac- thority, as specified in the attached re- Labor of the Highest Class from the complishments. ports, contained in the ‘‘Departments November 3, 1997 CONGRESSIONAL RECORD — SENATE S11599 of Veterans Affairs and Housing and SUBMISSION OF CONCURRENT AND vide a process for declassifying on an Urban Development, and Independent SENATE RESOLUTIONS expedited basis certain documents re- Agencies Appropriations Act, 1998’’ The following concurrent resolutions lating to human rights abuses in Gua- (Public Law 105–65; H.R. 2158). I have and Senate resolutions were read, and temala and Honduras. determined that the cancellation of referred (or acted upon), as indicated: S. 1286 these amounts will reduce the Federal By Mr. MOYNIHAN: At the request of Mr. JEFFORDS, the budget deficit, will not impair any es- S. Res. 142. A resolution to express the names of the Senator from Oregon [Mr. sential Government functions, and will sense of the Senate regarding the treatment SMITH], the Senator from Illinois [Mr. not harm the national interest. of any future unified budget surpluses; to the DURBIN], the Senator from Mississippi WILLIAM J. CLINTON. Committee on Finance. [Mr. COCHRAN], and the Senator from THE WHITE HOUSE, November 1, 1997. f Nebraska [Mr. KERREY] were added as cosponsors of S. 1286, a bill to amend f ADDITIONAL COSPONSORS the Internal Revenue Code of 1986 to S. 364 exclude from gross income certain MEASAGES FROM THE HOUSE At the request of Mr. LIEBERMAN, the amounts received as scholarships by an At 12 noon, a message from the House names of the Senator from Nebraska individual under the National Health of Representatives, delivered by Ms. [Mr. HAGEL] and the Senator from Ver- Corps Scholarship Program. EFFORDS Goetz, one of its reading clerks, an- mont [Mr. J ] were added as co- S. 1309 sponsors of S. 364, a bill to provide nounced that the House had passed the At the request of Mr. KERRY, the following bill, with amendments, in legal standards and procedures for sup- name of the Senator from New York pliers of raw materials and component which it requests the concurrence of [Mr. MOYNIHAN] was added as a cospon- the Senate: parts for medical devices. sor of S. 1309, a bill to provide for the S. 923. An act to deny veterans’ benefits to S. 943 health, education, and welfare of chil- persons convicted of Federal capital offenses. At the request of Mr. SPECTER, the dren under 6 years of age. The message also announced that the name of the Senator from Illinois [Ms. S. 1311 OSELEY RAUN House had passed the following bill, in M -B ] was added as a co- At the request of Mr. LOTT, the name which it requests the concurrence of sponsor of S. 943, a bill to amend title of the Senator from Alaska [Mr. MUR- the Senate: 49, United States Code, to clarify the KOWSKI] was added as a cosponsor of S. H.R. 2367. An act to amend title 38, United application of the act popularly known 1311, a bill to impose certain sanctions States Code, to provide a cost-of-living ad- as the ‘‘Death on the High Seas Act’’ to on foreign persons who transfer items justment in the rates of disability for veter- aviation accidents. contributing to Iran’s efforts to ac- ans with service-connected disabilities and S. 950 quire, develop, or produce ballistic mis- the rates of dependency and indemnity com- At the request of Mr. MCCONNELL, siles. pensation for survivors of such veterans. the name of the Senator from New SENATE CONCURRENT RESOLUTION 52 f Hampshire [Mr. SMITH] was added as a At the request of Mr. HOLLINGS, the cosponsor of S. 950, a bill to provide for names of the Senator from New York MEASURES PLACED ON THE equal protection of the law and to pro- [Mr. D’AMATO], the Senator from Mon- CALENDAR hibit discrimination and preferential tana [Mr. BAUCUS], the Senator from treatment on the basis of race, color, The following measure was read the Connecticut [Mr. DODD], the Senator national origin, or sex in Federal ac- first and second times by unanimous from Iowa [Mr. HARKIN], and the Sen- tions, and for other purposes. consent and placed on the calendar: ator from Alabama [Mr. SESSIONS] were S. 952 H.R. 2367. An act to amend title 38, United added as cosponsors of Senate Concur- States Code, to provide a cost-of-living ad- At the request of Mr. MCCONNELL, rent Resolution 52, a concurrent reso- justment in the rates of disability for veter- the name of the Senator from New lution relating to maintaining the cur- ans with service-connected disabilities and Hampshire [Mr. SMITH] was added as a rent standard behind the ‘‘Made in the rates of dependency and indemnity com- cosponsor of S. 952, a bill to establish a USA’’ label, in order to protect con- pensation for survivors of such veterans. Federal cause of action for discrimina- sumers and jobs in the United States. tion and preferential treatment in Fed- f f eral actions on the basis of race, color, national origin, or sex, and for other SENATE RESOLUTION 142—RE- REPORTS OF COMMITTEES purposes. GARDING THE TREATMENT OF ANY FUTURE UNIFIED BUDGET The following reports of committees S. 977 SURPLUSES were submitted: At the request of Mr. TORRICELLI, the By Mr. MURKOWSKI, from the Committee names of the Senator from Massachu- Mr. MOYNIHAN submitted the fol- on Energy and Natural Resources, with an setts [Mr. KENNEDY], and the Senator lowing resolution; which was referred amendment in the nature of a substitute: from California [Mrs. BOXER] were to the Committee on Finance: S. 538. A bill to authorize the Secretary of S. RES. 142 the Interior to convey certain facilities of added as cosponsors of S. 977, a bill to the Minidoka project to the Burley Irriga- amend the Forest and Rangeland Re- Whereas the current economic expansion is tion District, and for other purposes (Rept. newable Resources Planning Act of 1974 now in its seventh year and shows no signs of No. 105–131). and related laws to strengthen the pro- ending; tection of native biodiversity and ban Whereas the unemployment rate is below 5 f percent for the first time in 24 years; clearcutting on Federal lands, and to Whereas the current official inflation rate, designate certain Federal lands as An- which may be overstated, is about 2 percent; INTRODUCTION OF BILLS AND cient Forests, Roadless Areas, Water- Whereas the deficit has been reduced from JOINT RESOLUTIONS shed Protection Areas, Special Areas, $290,000,000,000 in fiscal year 1992 to The following bills and joint resolu- and Federal Boundary Areas where log- $23,000,000,000 in fiscal year 1997, or just tions were introduced, read the first ging and other intrusive activities are three-tenths of 1 percent of the Gross Domes- and second time by unanimous con- tic Product (GDP); prohibited. Whereas the Congressional Budget Office sent, and referred as indicated: S. 1220 projects that, under present law, the unified By Mr. GORTON (for himself, Mr. At the request of Mr. DODD, the budget will have a surplus of $86,000,000,000 in MCCAIN, Mr. HOLLINGS, and Mr. names of the Senator from Kentucky 2007; FORD): [Mr. FORD], the Senator from Michigan Whereas the Congressional Budget Office S. 1358. A bill to authorize the Federal also projects that, under present law, the [Mr. LEVIN], the Senator from Vermont Aviation Administration’s research, engi- debt held by the public will fall from about neering, and development programs for fiscal [Mr. JEFFORDS], the Senator from Cali- 50 percent of GDP this year to about 30 per- year 1998, and for other purposes; to the fornia [Mrs. BOXER], and the Senator cent by 2007; Committee on Commerce, Science, and from Oregon [Mr. WYDEN] were added Whereas this extraordinary combination of Transportation. as cosponsors of S. 1220, a bill to pro- good budget and economic news is largely S11600 CONGRESSIONAL RECORD — SENATE November 3, 1997 the result of budget policies included in the One need not engage in a long dis- Tax legislation for this session of the Omnibus Budget and Reconciliation Act of course on the fundamental differences 105th Congress is and should be con- 1993; between Keynesian and classical mac- cluded. Whereas the budget is not yet in surplus; Whereas the Congressional Budget Office roeconomic theories, to realize that Mr. President, my remarks till now also projects that the deficit is likely to re- during the last recession and current have focused on the short run and appear after 2007, and that the debt held by expansion, the deficit has changed as pleasant and unparalleled economic the public as a percentage of GDP is also economists would expect, or in any and budget circumstances in which we likely to increase as the baby boom genera- event would hope. now find ourselves. But before we de- tion begins to retire; Between fiscal 1989 and fiscal 1991, as vote too much energy to tax cuts in Whereas, without the on-budget surpluses the economy entered a recession, gross the next session of the 105th Congress, of the social security trust funds, the Con- domestic product in nominal—which is gressional Budget Office still projects annual we should be mindful of the following to say money terms—grew at an aver- less-than-exuberant facts. deficits of about $100,000,000,000 even after age rate of 4.7 percent. Revenues to the the budget is ‘‘balanced’’ in 2002; and First, the budget is not yet in sur- Whereas projected unified budget surpluses Federal Government, however, only plus. in the short-run would rapidly disappear if grew at an average rate of 3.2 percent, Second, the Congressional Budget Of- the current expansion ends, and the economy while outlays grew by 7.6 percent. Now fice also projects that the deficit is would enter a recession: Now, therefore, be it this imbalance between the growth in likely to reappear after the year 2007 Resolved, That is the sense of the Senate revenues and outlays—which helped and that the debt held by the public as that— moderate the recession, as we learned (1) any unified budget surpluses that might a percentage of gross domestic product through painful experience in the mid- is likely to increase as the baby boom arise in the current expansion should be used dle of the century—would ordinarily be to reduce the Federal debt held by the pub- generation begins to retire. lic; and welcomed were it not for the fact that, Third, without the on-budget sur- (2) to achieve this goal during this eco- in 1989, the Federal Government’s defi- pluses of the Social Security trust nomic expansion that there be no net tax cut cit was already 3.8 percent of GDP. As funds, the Congressional Budget Office or new spending that is not offset by reduc- it were, the deficit reached 5.5 percent still projects annual deficits of about tions in spending on other programs or tax of GDP in 1991 and 1992. $100 billion even after the budget is bal- increases. For the next 2 years, the economy anced in the year 2002. Mr. MOYNIHAN. Mr. President, there slowly recovered from the recession. I make the point, Mr. President, as is now clear evidence that at least for And then, in 1993, something extraor- Senator Dole remarked yesterday on the short run, both the economy and dinary happened; we passed what I ‘‘Meet The Press,’’ in 1983 we made have since acknowledged to be the the budget have attained to a singular major changes in the Social Security largest tax increase in history. We also degree of stability. System which have made it solvent and Consider the following facts: limited the growth in spending. in surplus every year since then and for The current economic expansion is The results—quite contrary to those many years still to come. But that sur- now in its seventh year and shows no predicted by many who opposed the plus is not saved in any conventional sign of ending; the unemployment rate measure—are truly remarkable. Be- sense of the word; it is expended on is below 5 percent for the first time in tween 1993 and 1997, GDP increased at other purposes that have nothing to do 24 years; the current official inflation an average annual rate of 5.3 percent. with social insurance, a matter which I rate, which may be—and almost cer- Mr. President, that doubles in some- know troubled Senator Dole when he tainly is—overstated, is about 2 per- thing like 13 or 14 years. To double was still our most revered colleague cent; the deficit has been reduced from your GDP every 14 years, that would and majority leader. $290 billion in fiscal year 1992 to $23 bil- quadruple in a generation, which is al- And, lastly, projected unified budget lion in fiscal year 1997, or just three- most unimaginable. Real gross domes- surpluses in the short run would rap- tenths of 1 percent of our gross domes- tic product—that is adjusting for infla- idly disappear if the current expansion tic product; the Congressional Budget tion—increased at an average annual ends and the economy were to enter a Office projects that, under present law, rate of about 3.5 percent, compared to recession. the unified budget will have a surplus almost no real growth for the period from 1989 to 1991. With rapid, non- In that setting, Mr. President, I offer of $86 billion in the year 2007. I repeat a resolution which I hope to call up at that unfamiliar phrase—a surplus of inflationary growth, revenues in- creased at an average annual rate of 8.2 some point in the days remaining in $86 billion. The Congressional Budget the first session of the 105th Congress Office also projects that, under present percent, while outlays grew at a mod- est 3.3 percent annual rate. to express the sense of the Senate re- law, the debt held by the public will garding the treatment of any future fall from about 50 percent of gross do- For the fiscal year just ended, the comparison is even more striking. The unified budget surpluses. mestic product this year to about 30 Mr. CRAIG addressed the Chair. percent by 2007. economy grew by 5.9 percent, while revenues grew by 8.7 percent and out- The PRESIDING OFFICER. The Sen- May I suggest to my colleagues that, ator from Idaho. for the first time in 20 years or more, lays by a mere 2.7 percent. We have had no such experience in postwar periods. Mr. CRAIG. Mr. President, I would such good economic news is upon us like to associate myself with the re- and was previously thought unattain- I don’t know if we have ever had such an experience. marks of the Senator from New York, able. who, I think, has spoken very clearly Last week, at a Finance Committee Mr. President, may I suggest that while the revenues and outlays grew as to what happens in large part when the hearing on his confirmation to be Congress of the United States restrains Treasury Assistant Secretary of Eco- one would expect during the various phases of a business cycle, it was only spending. While I recognize that there nomic Policy, David Wilcox quoted a were certainly added revenues by a favorite economics professor of his at after a very great deal of effort, and not an inconsiderable amount of pain substantially large tax increase, if the the Massachusetts Institute of Tech- that we have brought the Federal budg- Congress following that had followed nology—and I have the honor to say, et into near balance—a deficit of $22.6 the practices of past Congresss, and parenthetically, a long and good friend billion, a rather insubstantial three- that is of course, a promise to reduce of mine—the distinguished Nobel laure- tenths of 1 percent of GDP. spending for every so many dollars of ate Robert Solow. As Wilcox recalls, But, sir, in the closing days of this increase—and, I think I had heard that Professor Solow said something as fol- first session of the 105th Congress, we promise over my years in the House lows. can risk it all. Perhaps we should fol- and in the Senate—I doubt that we . . . the most important thing economists low the admonition that Hippocrates would be experiencing the kind of eco- have to communicate to the rest of the world bequeathed to the medical profession, nomic vitality that we are currently is how effectively markets work. The most important thing that economists have to tell which somehow translated it from and that the Senator spoke to. This each other is the important ways in which Greek into Latin, in the passage of the Congress adhered to very real spending markets sometimes don’t work exactly Hippocratic oath: ‘‘primum non restraints, and as a result of that the right. nocere’’—‘‘first do no harm.’’ markets recognized that we were not November 3, 1997 CONGRESSIONAL RECORD — SENATE S11601 going to spend beyond our limits and, ‘‘(i) subparagraph (A) shall not apply, and (b) LIMIT ON AGGREGATE CONTRIBUTIONS.— in fact, we would actually see a reduc- ‘‘(ii) no amount shall be includible in gross (1) IN GENERAL.—Section 529(b)(7) of the In- tion in deficit of the kind the Senator income with respect to such distribution.’’ ternal Revenue Code of 1986 is amended to spoke to. There is no question that (2) QUALIFIED HIGHER EDUCATION DISTRIBU- read as follows: TION DEFINED.—Section 529 of such Code (re- ‘‘(7) AGGREGATE LIMIT ON CONTRIBUTIONS.— with that kind of restraint here, the lating to qualified State tuition programs) is A program shall not be treated as a qualified markets have responded and our citi- amended by adding at the end the following State tuition program if it allows aggregate zens and our work force are now experi- new subsection: contributions (including rollover contribu- encing the kind of economic growth of ‘‘(f) QUALIFIED HIGHER EDUCATION DIS- tions) on behalf of a designated beneficiary which we are all extremely proud. TRIBUTION.—For purposes of this section— to exceed $35,200.’’ ‘‘(1) IN GENERAL.—The term ‘qualified high- f (2) TAX ON EXCESS CONTRIBUTIONS.— er education distribution’ means any dis- (A) IN GENERAL.—Section 4973 of such Code AMENDMENTS SUBMITTED tribution (or portion thereof) which con- is amended by adding at the end the follow- stitutes a payment directly to an eligible ing new subsection: educational institution for qualified higher ‘‘(g) EXCESS CONTRIBUTIONS TO QUALIFIED education expenses of the designated bene- THE RECIPROCAL TRADE STATE TUITION PROGRAMS.— ficiary for enrollment or attendance at such AGREEMENT ACT OF 1997 ‘‘(1) IN GENERAL.—In the case of a des- institution. ignated beneficiary under 1 or more qualified ‘‘(2) ROOM AND BOARD FOR STUDENTS LIVING State tuition programs (as defined in section OFF CAMPUS.— 529(b)), the amount by which the contribu- GRASSLEY AMENDMENT NO. 1545 ‘‘(A) IN GENERAL.—The term ‘qualified tions on behalf of such beneficiary for such higher education distribution’ includes dis- (Ordered to lie on the table.) taxable year, when added to the aggregate tributions not described in paragraph (1) to Mr. GRASSLEY submitted an contributions on behalf of such beneficiary the extent that the amount of such distribu- amendment intended to be proposed by for all preceding taxable years, exceeds the tions for the taxable year does not exceed dollar limit in effect under section 529(b)(7) him to the bill (S. 1269) to establish ob- the amount treated as qualified higher edu- for calendar year in which the taxable year jectives for negotiating and procedures cation expenses of the designated beneficiary begins. for implementing certain trade agree- under subsection (e)(3)(B)(i)(II). ‘‘(2) SPECIAL RULES.—For purposes of para- ments; as follows: ‘‘(B) RESTRICTIONS.—Subparagraph (A) graph (1), the following contributions shall shall only apply with respect to distributions Add the following subsection (d) to section not be taken into account: 3: for any academic period if— ‘‘(i) distributions described in paragraph (1) ‘‘(A) Any contribution which is distributed (1) Notwithstanding any other provision of out of the qualified State tuition program in law, the U.S. Government shall not enter are made for such period for expenses other than room and board, and a distribution to which section 529(g)(2) ap- into any treaty or other international agree- plies. ment that, in whole or in part, would have ‘‘(ii) the designated beneficiary certifies to the qualified State tuition program that the ‘‘(B) Any rollover contribution.’’ the purpose or effect of transferring any ju- (B) CONFORMING AMENDMENTS.—Section risdiction or authority to decide cases under beneficiary resides in a dwelling unit not op- erated or maintained by an eligible edu- 4973(a) is amended— U.S. law away from the federal judiciary. (i) by striking ‘‘or’’ at the end of paragraph (2) Notwithstanding any other provision of cational institution. ‘‘(3) EXCLUSION ELECTIVE; LIMITATION TO (3), by inserting ‘‘or’’ at the end of paragraph law, the trade agreement negotiating au- (5), and by inserting after paragraph (4) the thority of this section 3 of this Act shall not ONE PROGRAM.— ‘‘(A) ELECTION.—This subsection shall following new paragraph: apply to the negotiation of any trade agree- ‘‘(5) a qualified State tuition program (as ment that would have the purpose or effect apply for a taxable year only if the des- ignated beneficiary elects its application. defined in section 529),’’, of transferring any jurisdiction or authority ‘‘(B) LIMITATION TO ONE PROGRAM.—This (ii) by striking ‘‘accounts or annuities’’ to decide cases under U.S. law away from the subsection shall apply only to distributions and inserting ‘‘accounts, annuities, or pro- federal judiciary, and the trade agreement from the qualified State tuition program grams’’, and approval procedures shall not apply to im- designated by the beneficiary in the first (iii) by striking ‘‘account or annuity’’ and plementing bills submitted with respect to election taking effect under subparagraph inserting ‘‘account, annuity, or program’’. any such trade agreement. (A). Such designation, once made, shall be ir- (c) COMPLIANCE PROVISIONS.— f revocable. (1) ADDITIONAL TAX ON AMOUNTS NOT USED THE EDUCATION SAVINGS ACT ‘‘(4) AGGREGATION.—All distributions from FOR HIGHER EDUCATION EXPENSES.— (A) IN GENERAL.—Section 529 of the Inter- FOR PUBLIC AND PRIVATE the qualified State tuition program des- ignated under paragraph (3)(B) shall be treat- nal Revenue Code of 1986 is amended by add- SCHOOLS ed as 1 distribution for purposes of this sub- ing at the end the following new subsection: section.’’ ‘‘(g) ADDITIONAL TAX FOR DISTRIBUTIONS (3) ROOM AND BOARD.—Section 529(e)(3)(B) NOT USED FOR EDUCATIONAL EXPENSES.— MCCONNELL (AND OTHERS) of such Code is amended to read as follows: ‘‘(1) IN GENERAL.—The tax imposed by sec- AMENDMENT NO. 1546 ‘‘(B) ROOM AND BOARD INCLUDED FOR STU- tion 530(d)(4) shall apply to payments and (Ordered to lie on the table.) DENTS WHO ARE AT LEAST HALF-TIME.— distributions from qualified State tuition ‘‘(i) IN GENERAL.—In the case of a des- programs in the same manner as such tax ap- Mr. MCCONNELL (for himself, Mr. ignated beneficiary who is an eligible stu- plies to education individual retirement ac- GRAHAM, Mr. GRASSLEY, and Ms. dent (as defined in such section 25A(b)(3)) for counts. LANDRIEU) submitted an amendment any academic period, the term ‘qualified ‘‘(2) EXCESS CONTRIBUTIONS RETURNED BE- intended to be proposed by them to the higher education expenses’ shall include— FORE DUE DATE OF RETURN.—Subparagraph bill (H.R. 2646) to amend the Internal ‘‘(I) amounts paid directly to an eligible (A) shall not apply to the distribution to a Revenue Code of 1986 to allow tax-free educational institution for room and board contributor of any contribution paid during expenditures from education individual furnished to the beneficiary during such aca- a taxable year to a qualified tuition program retirement accounts for elementary demic period, or to the extent that such contribution exceeds and secondary school expenses, to in- ‘‘(II) if the beneficiary is not residing in a the limitation in section 4973(g) if such dis- dwelling unit operated or maintained by the tribution (and the net income with respect crease the maximum annual amount of eligible educational institution, reasonable to such excess contribution) meet require- contributions to such accounts, and for costs incurred by the beneficiary for room ments comparable to the requirements of other purposes; as follows: and board during such academic period. section 530(d)(4)(C).’’ At the appropriate place in the bill, insert ‘‘(ii) LIMITATIONS ON OFF-CAMPUS ROOM AND (B) CONFORMING AMENDMENT.—Section the following new sections: BOARD.— 529(b)(3) of such Code is repealed. SEC. ll. EXCLUSION FROM GROSS INCOME OF ‘‘(I) DOLLAR LIMIT.—The aggregate costs (2) WITHHOLDING OF TAX ON CERTAIN DIS- EDUCATION DISTRIBUTIONS FROM which may be taken into account under TRIBUTIONS.—Section 529(c) is amended by QUALIFIED STATE TUITION PRO- clause (i)(II) for any taxable year shall not adding at the end the following new para- GRAMS. exceed $4,500. graph: (a) ALLOWANCE OF EXCLUSION.— ‘‘(II) NO MORE THAN 4 ACADEMIC YEARS ‘‘(6) WITHHOLDING OF TAX ON CERTAIN DIS- (1) IN GENERAL.—Subparagraph (B) of sec- TAKEN INTO ACCOUNT.—Costs may be taken TRIBUTIONS.— tion 529(c)(3) of the Internal Revenue Code of into account under clause (i)(II) only for that ‘‘(A) IN GENERAL.—A qualified State tui- 1986 (relating to distributions) is amended to number of academic periods as is equivalent tion program shall withhold from any dis- read as follows: to 4 academic years. Such number shall be tribution an amount equal to 15 percent of ‘‘(B) QUALIFIED HIGHER EDUCATION DISTRIBU- reduced by the number of academic periods the portion of such distribution properly al- TIONS.—In the case of a qualified higher edu- for which amounts were previously taken locable to income on the contract (as deter- cation distribution under subsection (f)— into account under clause (i)(I).’’ mined under section 72). S11602 CONGRESSIONAL RECORD — SENATE November 3, 1997

‘‘(B) EXCEPTIONS.—Subparagraph (A) shall (5) Headings 9901.00.50 and 9901.00.52 of the ‘‘(II) in the case of 7.7 percent gasohol, 4.62 not apply to a distribution which— Harmonized Tariff Schedule of the United cents per gallon, and ‘‘(i) is a qualified higher education dis- States (19 U.S.C. 3007) are amended in the ef- ‘‘(III) in the case of 5.7 percent gasohol, 3.42 tribution under subsection (f), or fective period column by striking ‘‘10/1/2000’’ cents per gallon.’’. ‘‘(ii) is exempt from the payment of the ad- each place it appears and inserting ‘‘10/1/ (C) Section 4081(c)(5) of such Code is ditional tax imposed by subsection (g).’’ 2007’’. amended by striking ‘‘5.4 cents’’ and insert- (3) DISTRIBUTIONS REQUIRED IN CERTAIN (b) MODIFICATION.— ing ‘‘the applicable blender rate (as defined CASES.—Subsection (b) of section 529 of such (1) IN GENERAL.—Subsection (h) of section in section 4041(b)(2)(C))’’. Code is amended by adding at the end the 40 of the Internal Revenue Code of 1986 (re- (D) Section 4091(c)(1) of such Code is following new paragraph: lating to alcohol used as fuel) is amended to amended by striking ‘‘13.4 cents’’ each place ‘‘(8) REQUIRED DISTRIBUTIONS.— read as follows: it appears and inserting ‘‘the applicable ‘‘(A) IN GENERAL.—A program shall be ‘‘(h) REDUCED CREDIT FOR ETHANOL BLEND- blender amount’’ and by adding at the end treated as a qualified State tuition program ERS.— the following new sentence: ‘‘For purposes of only if any balance to the credit of a des- ‘‘(1) IN GENERAL.—In the case of any alco- this paragraph, the term ‘applicable blender ignated beneficiary (if any) on the account hol mixture credit or alcohol credit with re- amount’ means 13.3 cents in the case of any termination date is required to be distrib- spect to any sale or use of alcohol which is sale or use during 2001 or 2002, 13.2 cents in uted within 30 days after such date to such ethanol during calendar years 2001 through the case of any sale or use during 2003 or beneficiary (or in the case of death, the es- 2007— 2004, 13.1 cents in the case of any sale or use tate of the beneficiary). ‘‘(A) subsections (b)(1)(A) and (b)(2)(A) during 2005, 2006, or 2007, and 13.4 cents in the ‘‘(B) ACCOUNT TERMINATION DATE.—For pur- shall be applied by substituting ‘the blender case of any sale or use during 2008 or there- poses of subparagraph (A), the term ‘account amount’ for ‘60 cents’, after.’’. termination date’ means whichever of the ‘‘(B) subsection (b)(3) shall be applied by (3) EFFECTIVE DATE.—The amendments following dates is the earliest: substituting ‘the low-proof blender amount’ made by this subsection shall take effect on ‘‘(i) The date on which the designated ben- for ‘45 cents’ and ‘the blender amount’ for ‘60 January 1, 2001. eficiary attains age 30. cents’, and ‘‘(ii) The date on which the designated ben- ‘‘(C) subparagraphs (A) and (B) of sub- eficiary dies.’’ section (d)(3) shall be applied by substituting GRASSLEY (AND MOSELEY-BRAUN) (d) COST-OF-LIVING ADJUSTMENTS.—Section ‘the blender amount’ for ‘60 cents’ and ‘the AMENDMENT NO. 1547 529(e) of the Internal Revenue Code of 1986 is low-proof blender amount’ for ‘45 cents’. amended by adding at the end the following (Ordered to lie on the table.) ‘‘(2) AMOUNTS.—For purposes of paragraph new paragraph: (1), the blender amount and the low-proof Mr. GRASSLEY (for himself and Mrs. ‘‘(6) COST-OF-LIVING ADJUSTMENTS.—In the blender amount shall be determined in ac- MOSELEY-BRAUN) submitted an amend- case of calendar years beginning after De- cordance with the following table: ment intended to be proposed by them cember 31, 1998, the $32,500 amount under to the bill, H.R. 2646, supra; as follows: subsection (b)(7) and the $4,500 amount under In the case of any The low-proof At the appropriate place in the bill, insert subsection (e)(3)(B)(ii)(I) shall each be in- sale or use during The blender blender creased by an amount equal to— calendar year: amount is: amount is: the following new section: ‘‘(A) such dollar amount, multiplied by, SEC. ll. EXTENSION AND MODIFICATION OF ‘‘(B) the cost-of-living adjustment deter- 2001 or 2002 53 cents 39.26 cents SUBSIDIES FOR ALCOHOL FUELS. 2003 or 2004 52 cents 38.52 cents (a) EXTENSION.— mined under section 1(f)(3) for the calendar 2005, 2006, or 2007 51 cents 37.78 cents.’’. year, determined by substituting ‘1997’ for (1) The following provisions of the Internal ‘1992’ in subparagraph (B) thereof. (2) CONFORMING AMENDMENTS.— Revenue Code of 1986 are each amended by If any dollar amount is not a multiple of $100 (A) Section 4041(b)(2) of such Code is striking ‘‘2000’’ each place it appears and in- after being increased under this paragraph, amended— serting ‘‘2007’’: such amount shall be rounded to the next (i) in subparagraph (A)(i), by striking ‘‘5.4 (A) Section 4041(b)(2)(C) (relating to termi- lowest multiple of $100.’’ cents’’ and inserting ‘‘the applicable blender nation). (e) EFFECTIVE DATES.— rate’’, and (B) Section 4041(k)(3) (relating to termi- (1) IN GENERAL.—Except as provided in (ii) by redesignating subparagraph (C), as nation). paragraph (2), the amendments made by this amended by subsection (a)(2)(A), as subpara- (C) Section 4081(c)(8) (relating to termi- section shall apply to distributions in tax- graph (D) and by inserting after subpara- nation). able years beginning after December 31, 1997. graph (B) the following: (D) Section 4091(c)(5) (relating to termi- (2) CONTRACT REQUIREMENTS.—The amend- ‘‘(C) APPLICABLE BLENDER RATE.—For pur- nation). ments made by subsections (b)(1) and (c)(3) poses of subparagraph (A)(i), the applicable (2) Section 4041(m)(1)(A) of such Code (re- shall apply to contracts issued after Decem- blender rate is— lating to certain alcohol fuels), as amended ber 31, 1997. ‘‘(i) except as provided in clause (ii), 5.4 by section 907(b) of the Taxpayer Relief Act SEC. ll. EXTENSION AND MODIFICATION OF cents, and of 1997, is amended by striking ‘‘1999’’ both SUBSIDIES FOR ALCOHOL FUELS. ‘‘(ii) for sales or uses during calendar years places it appears and inserting ‘‘2005’’. (a) EXTENSION.— 2001 through 2007, 1⁄10 of the blender amount (3) Section 6427(f)(4) of such Code (relating (1) The following provisions of the Internal applicable under section 40(h)(2) for the cal- to termination) is amended by striking Revenue Code of 1986 are each amended by endar year in which the sale or use occurs.’’. ‘‘1999’’ and inserting ‘‘2007’’. striking ‘‘2000’’ each place it appears and in- (B) Subparagraph (A) of section 4081(c)(4) of (4) Section 40(e)(1) of such Code (relating to serting ‘‘2007’’: such Code is amended to read as follows: termination) is amended— (A) Section 4041(b)(2)(C) (relating to termi- ‘‘(A) GENERAL RULES.— (A) by striking ‘‘December 31, 2000’’ and in- nation). ‘‘(i) MIXTURES CONTAINING ETHANOL.—Ex- serting ‘‘December 31, 2007’’, and (B) Section 4041(k)(3) (relating to termi- cept as provided in clause (ii), in the case of (B) by striking subparagraph (B) and in- nation). a qualified alcohol mixture which contains serting the following: (C) Section 4081(c)(8) (relating to termi- gasoline, the alcohol mixture rate is the ex- ‘‘(B) of any fuel for any period before Janu- nation). cess of the rate which would (but for this ary 1, 2008, during which the rate of tax (D) Section 4091(c)(5) (relating to termi- paragraph) be determined under subsection under section 4081(a)(2)(A) is 4.3 cents per nation). (a) over— gallon.’’. (2) Section 4041(m)(1)(A) of such Code (re- ‘‘(I) in the case of 10 percent gasohol, the (5) Headings 9901.00.50 and 9901.00.52 of the lating to certain alcohol fuels), as amended applicable blender rate (as defined in section Harmonized Tariff Schedule of the United by section 907(b) of the Taxpayer Relief Act 4041(b)(2)(A)) per gallon, States (19 U.S.C. 3007) are amended in the ef- of 1997, is amended by striking ‘‘1999’’ both ‘‘(II) in the case of 7.7 percent gasohol, the fective period column by striking ‘‘10/1/2000’’ places it appears and inserting ‘‘2005’’. number of cents per gallon equal to 77 per- each place it appears and inserting ‘‘10/1/ (3) Section 6427(f)(4) of such Code (relating cent of such applicable blender rate, and 2007’’. to termination) is amended by striking ‘‘(III) in the case of 5.7 percent gasohol, the (b) MODIFICATION.— ‘‘1999’’ and inserting ‘‘2007’’. number of cents per gallon equal to 57 per- (1) IN GENERAL.—Subsection (h) of section (4) Section 40(e)(1) of such Code (relating to cent of such applicable blender rate. 40 of the Internal Revenue Code of 1986 (re- termination) is amended— ‘‘(ii) MIXTURES NOT CONTAINING ETHANOL.— lating to alcohol used as fuel) is amended to (A) by striking ‘‘December 31, 2000’’ and in- In the case of a qualified alcohol mixture read as follows: serting ‘‘December 31, 2007’’, and which contains gasoline and none of the al- ‘‘(h) REDUCED CREDIT FOR ETHANOL BLEND- (B) by striking subparagraph (B) and in- cohol in which consists of ethanol, the alco- ERS.— serting the following: hol mixture rate is the excess of the rate ‘‘(1) IN GENERAL.—In the case of any alco- ‘‘(B) of any fuel for any period before Janu- which would (but for this paragraph) be de- hol mixture credit or alcohol credit with re- ary 1, 2008, during which the rate of tax termined under subsection (a) over— spect to any sale or use of alcohol which is under section 4081(a)(2)(A) is 4.3 cents per ‘‘(I) in the case of 10 percent gasohol, 6 ethanol during calendar years 2001 through gallon.’’. cents per gallon, 2007— November 3, 1997 CONGRESSIONAL RECORD — SENATE S11603 ‘‘(A) subsections (b)(1)(A) and (b)(2)(A) this paragraph, the term ‘applicable blender demption of, any obligations held in the shall be applied by substituting ‘the blender amount’ means 13.3 cents in the case of any Fund shall be credited to and form a part of amount’ for ‘60 cents’, sale or use during 2001 or 2002, 13.2 cents in the Fund. ‘‘(B) subsection (b)(3) shall be applied by the case of any sale or use during 2003 or ‘‘(c) OBLIGATIONS FROM FUND.— substituting ‘the low-proof blender amount’ 2004, 13.1 cents in the case of any sale or use ‘‘(1) IN GENERAL.—The Secretary of Health for ‘45 cents’ and ‘the blender amount’ for ‘60 during 2005, 2006, or 2007, and 13.4 cents in the and Human Services shall annually make cents’, and case of any sale or use during 2008 or there- available such sums as are available in the ‘‘(C) subparagraphs (A) and (B) of sub- after.’’. Fund (including any amounts not obligated section (d)(3) shall be applied by substituting (3) EFFECTIVE DATE.—The amendments in previous fiscal years) to the National In- ‘the blender amount’ for ‘60 cents’ and ‘the made by this subsection shall take effect on stitutes of Health for the conduct of bio- low-proof blender amount’ for ‘45 cents’. January 1, 2001. medical, intramural and extramural re- ‘‘(2) AMOUNTS.—For purposes of paragraph search. (1), the blender amount and the low-proof FEINSTEIN AMENDMENTS NOS. ‘‘(2) DIRECTOR OF NIH.—The Director of the blender amount shall be determined in ac- 1548–1549 National Institutes of Health may distribute cordance with the following table: amounts made available under paragraph (1) (Ordered to lie on the table.) among the various research institutes and Mrs. FEINSTEIN submitted two In the case The centers of the National Institutes of Health of any sale amendments intended to be proposed to enable such institutes and centers to con- or use dur- blender The low-proof blender ing calendar amount amount is: by her to the bill, H.R. 2646, supra; as duct research that the Director determines year: is: follows: is appropriate. The Director shall make AMENDMENT NO. 1548 awards from amounts available under para- 2001 or 2002 53 39.26 cents graph (1) for research on cancer. cents At the end add the following: ‘‘(d) SUPPLEMENT NOT SUPPLANT.— 2003 or 2004 52 38.52 cents SEC. ll. ESTABLISHMENT OF CANCER RE- cents SEARCH TRUST FUND. Amounts provided to an institute or center 2005, 2006, or (a) IN GENERAL.—Part A of title IV of the under subsection (c) shall be used to supple- 2007 ...... 51 37.78 cents.’’. Public Health Service Act (42 U.S.C. 281 et ment and not supplant other research con- cents seq.) is amended by adding at the end the fol- ducted with Federal funds. (2) CONFORMING AMENDMENTS.— lowing new section: ‘‘(e) LIMITATION.—No expenditure shall be (A) Section 4041(b)(2) of such Code is ‘‘SEC. 404F. ESTABLISHMENT OF CANCER RE- made under subsection (c)(1) during any fis- amended— SEARCH TRUST FUND. cal year in which the annual amount appro- (i) in subparagraph (A)(i), by striking ‘‘5.4 ‘‘(a) ESTABLISHMENT.—There is established priated for the National Institutes of Health cents’’ and inserting ‘‘the applicable blender in the Treasury of the United States a trust is less than the amount so appropriated for rate’’, and fund, to be known as the ‘Cancer Research the prior fiscal year.’’. (ii) by redesignating subparagraph (C), as Trust Fund’ (hereafter in this section re- (b) DESIGNATION OF OVERPAYMENTS AND amended by subsection (a)(2)(A), as subpara- ferred to as the ‘Fund’), consisting of such CONTRIBUTIONS TO TRUST FUND.— graph (D) and by inserting after subpara- amounts as are credited or paid to the Fund (1) IN GENERAL.—Subchapter A of chapter graph (B) the following: as provided for in section 6098 of the Internal 61 of the Internal Revenue Code of 1986 (re- ‘‘(C) APPLICABLE BLENDER RATE.—For pur- Revenue Code of 1986 and any interest earned lating to information and returns) is amend- poses of subparagraph (A)(i), the applicable on investment of amounts in the Fund. ed by adding at the end the following new blender rate is— ‘‘(b) INVESTMENT OF TRUST FUND.— part: ‘‘(i) except as provided in clause (ii), 5.4 ‘‘(1) IN GENERAL.—It shall be the duty of ‘‘PART IX—DESIGNATION OF OVERPAY- cents, and the Secretary of the Treasury to invest such MENTS AND CONTRIBUTIONS TO CAN- ‘‘(ii) for sales or uses during calendar years portion of the Fund as is not, in the Sec- CER RESEARCH TRUST FUND 1 retary’s judgment, required to meet current 2001 through 2007, ⁄10 of the blender amount ‘‘Sec. 6098. Designation to Cancer Research applicable under section 40(h)(2) for the cal- withdrawals. Such investments may be made Trust Fund. endar year in which the sale or use occurs.’’. only in interest-bearing obligations of the United States or in obligations guaranteed ‘‘SEC. 6098. DESIGNATION TO CANCER RESEARCH (B) Subparagraph (A) of section 4081(c)(4) of TRUST FUND. as to both principal and interest by the Unit- such Code is amended to read as follows: ‘‘(a) IN GENERAL.—Every individual (other ed States. For such purpose, such obligations ‘‘(A) GENERAL RULES.— than a nonresident alien) may— may be acquired— ‘‘(i) MIXTURES CONTAINING ETHANOL.—Ex- ‘‘(1) designate that a portion (not less than ‘‘(A) on original issue at the issue price, or cept as provided in clause (ii), in the case of $1) of any overpayment of the tax imposed by ‘‘(B) by purchase of outstanding obliga- a qualified alcohol mixture which contains chapter 1 for the taxable year, and tions at the market price. gasoline, the alcohol mixture rate is the ex- ‘‘(2) provide that a cash contribution (not cess of the rate which would (but for this The purposes for which obligations of the less than $1), paragraph) be determined under subsection United States may be issued under chapter be paid over to the Cancer Research Trust (a) over— 31 of title 31, of the United States Code, are Fund in accordance with the provisions of ‘‘(I) in the case of 10 percent gasohol, the hereby extended to authorize the issuance at section 404F of the Public Health Service applicable blender rate (as defined in section par of special obligations exclusively to the Act. In the case of a joint return of a hus- 4041(b)(2)(A)) per gallon, Fund. Such special obligations shall bear in- band and wife, each spouse may designate ‘‘(II) in the case of 7.7 percent gasohol, the terest at a rate equal to the average rate of one-half of any such overpayment of tax (not number of cents per gallon equal to 77 per- interest, computed as to the end of the cal- less than $2). cent of such applicable blender rate, and endar month next preceding the date of such ‘‘(b) MANNER AND TIME OF DESIGNATION.— ‘‘(III) in the case of 5.7 percent gasohol, the issue, borne by all marketable interest-bear- Any designation or payment under sub- number of cents per gallon equal to 57 per- ing obligations of the United States then section (a) may be made with respect to any cent of such applicable blender rate. forming a part of the Public Debt; except taxable year only at the time of filing the ‘‘(ii) MIXTURES NOT CONTAINING ETHANOL.— that where such average rate is not a mul- original return of the tax imposed by chapter In the case of a qualified alcohol mixture tiple of one-eighth of 1 percent, the rate of 1 for such taxable year. Such designation which contains gasoline and none of the al- interest of such special obligations shall be shall be made on the page bearing the tax- cohol in which consists of ethanol, the alco- the multiple of one-eighth of 1 percent next payer’s signature, and in close proximity to hol mixture rate is the excess of the rate lower than such average rate. Such special such signature, and shall be labeled ‘Cancer which would (but for this paragraph) be de- obligations shall be issued only if the Sec- Research Fund’. termined under subsection (a) over— retary of the Treasury determines that the ‘‘(c) OVERPAYMENTS TREATED AS RE- ‘‘(I) in the case of 10 percent gasohol, 6 purchase of other interest-bearing obliga- FUNDED.—For purposes of this section, any cents per gallon, tions of the United States, or of obligations overpayment of tax designated under sub- ‘‘(II) in the case of 7.7 percent gasohol, 4.62 guaranteed as to both principal and interest section (a) shall be treated as being refunded cents per gallon, and by the United States on original issue or at to the taxpayer as of the last day prescribed ‘‘(III) in the case of 5.7 percent gasohol, 3.42 the market price, is not in the public inter- for filing the return of tax imposed by chap- cents per gallon.’’. est. ter 1 (determined with regard to extensions) (C) Section 4081(c)(5) of such Code is ‘‘(2) SALE OF OBLIGATION.—Any obligation or, if later, the date the return is filed.’’ amended by striking ‘‘5.4 cents’’ and insert- acquired by the Fund (except special obliga- (2) CLERICAL AMENDMENT.—The table of ing ‘‘the applicable blender rate (as defined tions issued exclusively to the Fund) may be parts for subchapter A of chapter 61 of the in section 4041(b)(2)(C))’’. sold by the Secretary of the Treasury at the Internal Revenue Code of 1986 is amended by (D) Section 4091(c)(1) of such Code is market price, and such special obligations adding at the end the following new item: amended by striking ‘‘13.4 cents’’ each place may be redeemed at par plus accrued inter- it appears and inserting ‘‘the applicable est. ‘‘Part IX. Designation of overpayments and blender amount’’ and by adding at the end ‘‘(3) CREDITS TO TRUST FUND.—The interest contributions to Cancer Re- the following new sentence: ‘‘For purposes of on, and the proceeds from the sale or re- search Trust Fund.’’. S11604 CONGRESSIONAL RECORD — SENATE November 3, 1997

(3) EFFECTIVE DATE.—The amendments centers of the National Institutes of Health (B) the Secretary of the Treasury agrees to made by this subsection shall apply to tax- to enable such institutes and centers to con- comply with the requirements of section able years beginning after December 31, 1996. duct research that the Director determines 6402(e) of the Internal Revenue Code of 1986. is appropriate. The Director shall make (2) DISCLOSURE OF RETURN INFORMATION TO AMENDMENT NO. 1549 awards from amounts available under para- STATES.—Section 6103(d) of the Internal Rev- At the end add the following: graph (1) for research on cancer. enue Code of 1986 (relating to disclosure to SEC. ll. ESTABLISHMENT OF CANCER RE- ‘‘(d) SUPPLEMENT NOT SUPPLANT.— State tax officials and State and local law SEARCH TRUST FUND. Amounts provided to an institute or center enforcement agencies) is amended by adding (a) IN GENERAL.—Part A of title IV of the under subsection (c) shall be used to supple- at the end the following new paragraph: Public Health Service Act (42 U.S.C. 281 et ment and not supplant other research con- ‘‘(6) DISCLOSURE FOR RECIPROCAL OFFSET seq.) is amended by adding at the end the fol- ducted with Federal funds. PROGRAM AGREEMENTS.—The Secretary shall lowing new section: ‘‘(e) LIMITATION.—No expenditure shall be disclose return information for purposes of ‘‘SEC. 404F. ESTABLISHMENT OF CANCER RE- made under subsection (c)(1) during any fis- an agreement under the reciprocal offset SEARCH TRUST FUND. cal year in which the annual amount appro- program established under section ll(c)(1) ‘‘(a) ESTABLISHMENT.—There is established priated for the National Institutes of Health of the Education Savings Act for Public and in the Treasury of the United States a trust is less than the amount so appropriated for Private Schools.’’. fund, to be known as the ‘Cancer Research the prior fiscal year.’’. (3) OFFSET OF PAST-DUE, LEGALLY ENFORCE- ESIGNATION OF VERPAYMENTS AND Trust Fund’ (hereafter in this section re- (b) D O ABLE STATE TAX OBLIGATIONS AGAINST OVER- CONTRIBUTIONS TO TRUST FUND.— ferred to as the ‘Fund’), consisting of such PAYMENTS.— (1) IN GENERAL.—Subchapter A of chapter amounts as are credited or paid to the Fund (A) IN GENERAL.—Section 6402 of the Inter- as provided for in section 6098 of the Internal 61 of the Internal Revenue Code of 1986 (re- nal Revenue Code of 1986 (relating to author- Revenue Code of 1986 and any interest earned lating to information and returns) is amend- ity to make credits or refunds) is amended on investment of amounts in the Fund. ed by adding at the end the following new by redesignating subsections (e) through (i) ‘‘(b) INVESTMENT OF TRUST FUND.— part: as subsections (f) through (j), respectively, ‘‘(1) IN GENERAL.—It shall be the duty of ‘‘PART IX—DESIGNATION OF OVERPAY- and by inserting after subsection (d) the fol- the Secretary of the Treasury to invest such MENTS AND CONTRIBUTIONS TO CAN- lowing new subsection: portion of the Fund as is not, in the Sec- CER RESEARCH TRUST FUND ‘‘(e) COLLECTION OF PAST-DUE, LEGALLY EN- retary’s judgment, required to meet current ‘‘Sec. 6098. Designation to Cancer Research FORCEABLE STATE TAX OBLIGATIONS.— withdrawals. Such investments may be made Trust Fund. only in interest-bearing obligations of the ‘‘(1) IN GENERAL.—Upon receiving notice ‘‘SEC. 6098. DESIGNATION TO CANCER RESEARCH from any State that has entered into an United States or in obligations guaranteed TRUST FUND. agreement with the Secretary under section as to both principal and interest by the Unit- ‘‘(a) IN GENERAL.—Every individual (other ll(c)(1) of the Education Savings Act for ed States. For such purpose, such obligations than a nonresident alien) may— Public and Private Schools that a named may be acquired— ‘‘(1) designate that a portion (not less than person owes a past-due, legally enforceable ‘‘(A) on original issue at the issue price, or $1) of any overpayment of the tax imposed by State tax obligation to such State, the Sec- ‘‘(B) by purchase of outstanding obliga- chapter 1 for the taxable year, and retary shall, under such conditions as may tions at the market price. ‘‘(2) provide that a cash contribution (not be prescribed by the Secretary— The purposes for which obligations of the less than $1), ‘‘(A) reduce the amount of any overpay- United States may be issued under chapter be paid over to the Cancer Research Trust ment payable to such person by the amount 31 of title 31, of the United States Code, are Fund in accordance with the provisions of of such State tax obligation; hereby extended to authorize the issuance at section 404F of the Public Health Service ‘‘(B) pay the amount by which such over- par of special obligations exclusively to the Act. In the case of a joint return of a hus- payment is reduced under subparagraph (A) Fund. Such special obligations shall bear in- band and wife, each spouse may designate to such State and notify such State of such terest at a rate equal to the average rate of one-half of any such overpayment of tax (not person’s name, taxpayer identification num- interest, computed as to the end of the cal- less than $2). ber, address, and the amount collected; and endar month next preceding the date of such ‘‘(b) MANNER AND TIME OF DESIGNATION.— ‘‘(C) notify the person making such over- issue, borne by all marketable interest-bear- Any designation or payment under sub- payment that the overpayment has been re- ing obligations of the United States then section (a) may be made with respect to any duced by an amount necessary to satisfy a forming a part of the Public Debt; except taxable year only at the time of filing the past-due, legally enforceable State tax obli- that where such average rate is not a mul- original return of the tax imposed by chapter gation. tiple of one-eighth of 1 percent, the rate of 1 for such taxable year. Such designation If an offset is made pursuant to a joint re- interest of such special obligations shall be shall be made on the page bearing the tax- turn, the notice under subparagraph (B) shall the multiple of one-eighth of 1 percent next payer’s signature, and in close proximity to include the names, taxpayer identification lower than such average rate. Such special such signature, and shall be labeled ‘Cancer numbers, and addresses of each person filing obligations shall be issued only if the Sec- Research Fund’. such return. retary of the Treasury determines that the ‘‘(c) OVERPAYMENTS TREATED AS RE- ‘‘(2) PRIORITIES FOR OFFSET.—Any overpay- purchase of other interest-bearing obliga- FUNDED.—For purposes of this section, any ment by a person shall be reduced pursuant tions of the United States, or of obligations overpayment of tax designated under sub- to this subsection— guaranteed as to both principal and interest section (a) shall be treated as being refunded ‘‘(A) after such overpayment is reduced by the United States on original issue or at to the taxpayer as of the last day prescribed pursuant to— the market price, is not in the public inter- for filing the return of tax imposed by chap- ‘‘(i) subsection (a) with respect to any li- est. ter 1 (determined with regard to extensions) ability for any internal revenue tax on the ‘‘(2) SALE OF OBLIGATION.—Any obligation or, if later, the date the return is filed.’’. part of the person who made the overpay- acquired by the Fund (except special obliga- (2) CLERICAL AMENDMENT.—The table of ment, tions issued exclusively to the Fund) may be parts for subchapter A of chapter 61 of the ‘‘(ii) subsection (c) with respect to past-due sold by the Secretary of the Treasury at the Internal Revenue Code of 1986 is amended by support, and market price, and such special obligations adding at the end the following new item: may be redeemed at par plus accrued inter- ‘‘(iii) subsection (d) with respect to any est. ‘‘Part IX. Designation of overpayments and past-due, legally enforceable debt owed to a contributions to Cancer Re- ‘‘(3) CREDITS TO TRUST FUND.—The interest Federal agency, and on, and the proceeds from the sale or re- search Trust Fund.’’. ‘‘(B) before such overpayment is credited demption of, any obligations held in the (3) EFFECTIVE DATE.—The amendments to the future liability for any Federal inter- Fund shall be credited to and form a part of made by this subsection shall apply to tax- nal revenue tax of such person pursuant to the Fund. able years beginning after December 31, 1996. subsection (b). ‘‘(c) OBLIGATIONS FROM FUND.— (c) RECIPROCAL OFFSET PROGRAM.— If the Secretary receives notice from 1 or ‘‘(1) IN GENERAL.—The Secretary of Health (1) ESTABLISHMENT.—The Secretary of the more State agencies of more than 1 debt sub- and Human Services shall annually make Treasury shall enter into an agreement with ject to paragraph (1) that is owed by such available such sums as are available in the any State under which— person to such an agency, any overpayment Fund (including any amounts not obligated (A) the State agrees, upon notice by the by such person shall be applied against such in previous fiscal years) to the National In- Secretary of the Treasury of any person hav- debts in the order in which such debts ac- stitutes of Health for the conduct of bio- ing a liability in respect of an internal reve- crued. medical, intramural and extramural re- nue tax, to reduce any overpayment of State ‘‘(3) NOTICE; CONSIDERATION OF EVIDENCE.— search. tax to be refunded to such person to the ex- No State may take action under this sub- ‘‘(2) DIRECTOR OF NIH.—The Director of the tent of the amount of such liability and pay section until such State— National Institutes of Health may distribute the amount by which the overpayment is so ‘‘(A) notifies the person owing the past-due amounts made available under paragraph (1) reduced to the United States Treasury and State tax liability that the State proposes to among the various research institutes and to notify such person of such payment, and take action pursuant to this section, November 3, 1997 CONGRESSIONAL RECORD — SENATE S11605 ‘‘(B) gives such person at least 60 days to (iii) Subsection (f) of section 6402 of such ‘‘(A) to acquire, construct, rehabilitate, or present evidence that all or part of such li- Code, as redesignated by subparagraph (A), is expand property— ability is not past-due or not legally enforce- amended— ‘‘(i) which is to be used as part of a quali- able, (I) by striking ‘‘(c) or (d)’’ and inserting fied child care facility of the taxpayer, ‘‘(C) considers any evidence presented by ‘‘(c), (d), or (e)’’, and ‘‘(ii) with respect to which a deduction for such person and determines that an amount (II) by striking ‘‘Federal agency’’ and in- depreciation (or amortization in lieu of de- of such debt is past-due and legally enforce- serting ‘‘Federal agency or State’’. preciation) is allowable, and able, and (iv) Subsection (h) of section 6402 of such ‘‘(iii) which does not constitute part of the ‘‘(D) satisfies such other conditions as the Code, as redesignated by subparagraph (A), is principal residence (within the meaning of Secretary may prescribe to ensure that the amended by striking ‘‘subsection (c)’’ and in- section 1034) of the taxpayer or any employee determination made under subparagraph (C) serting ‘‘subsection (c) or (e)’’. of the taxpayer, is valid and that the State has made reason- (D) AMENDMENTS APPLIED AFTER TECH- ‘‘(B) for the operating costs of a qualified able efforts to obtain payment of such State NICAL CORRECTIONS TO PERSONAL RESPON- child care facility of the taxpayer, including tax obligation. SIBILITY AND WORK OPPORTUNITY RECONCILI- costs related to the training of employees, to ‘‘(4) PAST-DUE, LEGALLY ENFORCEABLE ATION ACT OF 1996.— scholarship programs, and to the providing STATE TAX OBLIGATION.—For purposes of this (i) Section 110(l) of the Personal Respon- of increased compensation to employees with subsection, the term ‘past-due, legally en- sibility and Work Opportunity Reconcili- higher levels of child care training, forceable State tax obligation’ means a ation Act of 1996 is amended by striking ‘‘(C) under a contract with a qualified child debt— paragraphs (4), (5), and (7) (and the amend- care facility to provide child care services to ‘‘(A)(i) which resulted from— ments made by such paragraphs), and the In- employees of the taxpayer, or ‘‘(I) a judgment rendered by a court of ternal Revenue Code of 1986 shall be applied ‘‘(D) under a contract to provide child care competent jurisdiction which has deter- as if such paragraphs (and amendments) had resource and referral services to employees mined an amount of State tax to be due, or never been enacted. of the taxpayer. ‘‘(II) a determination after an administra- (ii) For purposes of applying the amend- ‘‘(2) QUALIFIED CHILD CARE FACILITY.— tive hearing which has determined an ments made by this paragraph other than ‘‘(A) IN GENERAL.—The term ‘qualified amount of State tax to be due, and this subparagraph the provisions of this sub- child care facility’ means a facility— ‘‘(ii) which is no longer subject to judicial paragraph shall be treated as having been en- ‘‘(i) the principal use of which is to provide review, or acted immediately before the other provi- child care assistance, and ‘‘(B) which resulted from a State tax which sions of this paragraph. ‘‘(ii) which meets the requirements of all has been assessed but not collected, the time (E) EFFECTIVE DATE.—The amendments applicable laws and regulations of the State for redetermination of which has expired, made by this subsection (other than para- or local government in which it is located, and which has not been delinquent for more graph (3)(D)) shall apply to refunds payable including, but not limited to, the licensing of than 10 years. after December 31, 1998. the facility as a child care facility. For purposes of this paragraph, the term Clause (i) shall not apply to a facility which ‘State tax’ includes any local tax adminis- GRAHAM AMENDMENT NO. 1550 is the principal residence (within the mean- ing of section 1034) of the operator of the fa- tered by the chief tax administration agency (Ordered to lie on the table.) of the State. cility. Mr. GRAHAM submitted an amend- ‘‘(B) SPECIAL RULES WITH RESPECT TO A TAX- ‘‘(5) REGULATIONS.—The Secretary shall ment intended to be proposed by him issue regulations prescribing the time and PAYER.—A facility shall not be treated as a manner in which States must submit notices to the bill, H.R. 2646, supra; as follows: qualified child care facility with respect to a of past-due, legally enforceable State tax ob- On page 3, between lines 9 and 10, insert: taxpayer unless— ligations and the necessary information that ‘‘(C) DEPENDENT CARE EMPLOYMENT-RELAT- ‘‘(i) enrollment in the facility is open to must be contained in or accompany such no- ED EXPENSES.—Such term shall include em- employees of the taxpayer during the taxable tices. The regulations shall specify the types ployment-related expenses (as defined in sec- year, of State taxes and the minimum amount of tion 21(b)(2)) for the care of a designated ben- ‘‘(ii) the facility is not the principal trade debt to which the reduction procedure estab- eficiary who is a qualifying individual under or business of the taxpayer unless at least 30 lished by paragraph (1) may be applied. The section 21(b)(1)(A) with respect to the indi- percent of the enrollees of such facility are regulations may require States to pay a fee vidual incurring such expenses. No credit dependents of employees of the taxpayer, and to reimburse the Secretary for the cost of shall be allowed under section 21 with re- ‘‘(iii) the use of such facility (or the eligi- applying such procedure. Any fee paid to the spect to employment-related expenses paid bility to use such facility) does not discrimi- Secretary pursuant to the preceding sen- out of the account to the extent such pay- nate in favor of employees of the taxpayer tence shall be used to reimburse appropria- ment is not included in gross income by rea- who are highly compensated employees son of subsection (d)(2).’’ tions which bore all or part of the cost of ap- (within the meaning of section 414(q)). plying such procedure. ‘‘(d) RECAPTURE OF ACQUISITION AND CON- STRUCTION CREDIT.— ‘‘(6) ERRONEOUS PAYMENT TO STATE.—Any KOHL AMENDMENT NO. 1551 State receiving notice from the Secretary ‘‘(1) IN GENERAL.—If, as of the close of any (Ordered to lie on the table.) taxable year, there is a recapture event with that an erroneous payment has been made to Mr. KOHL submitted an amendment such State under paragraph (1) shall pay respect to any qualified child care facility of intended to be proposed by him to the the taxpayer, then the tax of the taxpayer promptly to the Secretary, in accordance bill, H.R. 2646, supra; as follows: with such regulations as the Secretary may under this chapter for such taxable year prescribe, an amount equal to the amount of At the appropriate place in the bill, insert shall be increased by an amount equal to the such erroneous payment (without regard to the following: product of— ll whether any other amounts payable to such SEC. . ALLOWANCE OF CREDIT FOR EM- ‘‘(A) the applicable recapture percentage, State under such paragraph have been paid PLOYER EXPENSES FOR CHILD CARE and ASSISTANCE; FOREIGN TAX CREDIT to such State).’’. ‘‘(B) the aggregate decrease in the credits CARRYOVERS. allowed under section 38 for all prior taxable (B) DISCLOSURE OF CERTAIN INFORMATION TO (a) ALLOWANCE OF CREDIT.— years which would have resulted if the quali- STATES REQUESTING REFUND OFFSETS FOR (1) IN GENERAL.—Subpart D of part IV of fied child care expenditures of the taxpayer PAST-DUE, LEGALLY ENFORCEABLE STATE TAX subchapter A of chapter 1 of the Internal described in subsection (c)(1)(A) with respect OBLIGATIONS.— Revenue Code of 1986 (relating to business re- to such facility had been zero. (i) Paragraph (10) of section 6103(l) of such lated credits) is amended by adding at the Code is amended by striking ‘‘(c) or (d)’’ each ‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.— end the following new section: ‘‘(A) IN GENERAL.—For purposes of this sub- place it appears and inserting ‘‘(c), (d), or ‘‘SEC. 45D. EMPLOYER-PROVIDED CHILD CARE (e)’’. section, the applicable recapture percentage CREDIT. shall be determined from the following table: (ii) The paragraph heading for such para- ‘‘(a) IN GENERAL.—For purposes of section graph (10) is amended by striking ‘‘SECTION 38, the employer-provided child care credit The applicable 6402(c) OR 6402(d)’’ and inserting ‘‘SUBSECTION recapture determined under this section for the taxable ‘‘If the recapture event percentage is: (c), (d), OR (e) OF SECTION 6402’’. year is an amount equal to 50 percent of the occurs in: (C) CONFORMING AMENDMENTS.— qualified child care expenditures of the tax- Years 1–3 ...... 100 (i) Subsection (a) of section 6402 of such payer for such taxable year. Year 4 ...... 85 Code is amended by striking ‘‘(c) and (d)’’ ‘‘(b) DOLLAR LIMITATION.—The credit al- Year 5 ...... 70 and inserting ‘‘(c), (d), and (e)’’. lowable under subsection (a) for any taxable Year 6 ...... 55 (ii) Paragraph (2) of section 6402(d) of such year shall not exceed $150,000. Year 7 ...... 40 Code is amended by striking ‘‘and before ‘‘(c) DEFINITIONS.—For purposes of this sec- Year 8 ...... 25 such overpayment’’ and inserting ‘‘and be- tion— Years 9 and 10 ...... 10 fore such overpayment is reduced pursuant ‘‘(1) QUALIFIED CHILD CARE EXPENDITURE.— Years 11 and thereafter 0. to subsection (e) and before such overpay- The term ‘qualified child care expenditure’ ‘‘(B) YEARS.—For purposes of subparagraph ment’’. means any amount paid or incurred— (A), year 1 shall begin on the first day of the S11606 CONGRESSIONAL RECORD — SENATE November 3, 1997

taxable year in which the qualified child spect to the amount of the credit determined ‘‘(C) SPECIAL RULE FOR DECREASING CREDIT care facility is placed in service by the tax- under this section. FOR TAXABLE YEAR.—If the amount of the payer. ‘‘(g) TERMINATION.—This section shall not credit of a cooperative organization deter- ‘‘(3) RECAPTURE EVENT DEFINED.—For pur- apply to taxable years beginning after De- mined under subsection (a)(3) for a taxable poses of this subsection, the term ‘recapture cember 31, 1999.’’ year is less than the amount of such credit event’ means— (2) CONFORMING AMENDMENTS.— shown on the cooperative organization’s re- ‘‘(A) CESSATION OF OPERATION.—The ces- (A) Section 38(b) of the Internal Revenue turn for such year, an amount equal to the sation of the operation of the facility as a Code of 1986 is amended— excess of such reduction over the amount not qualified child care facility. (i) by striking out ‘‘plus’’ at the end of apportioned to the patrons under subpara- ‘‘(B) CHANGE IN OWNERSHIP.— paragraph (11), graph (A) for the taxable year shall be treat- ‘‘(i) IN GENERAL.—Except as provided in (ii) by striking out the period at the end of ed as an increase in tax imposed by this clause (ii), the disposition of a taxpayer’s in- paragraph (12), and inserting a comma and chapter on the organization. Any such in- terest in a qualified child care facility with ‘‘plus’’, and crease shall not be treated as tax imposed by respect to which the credit described in sub- (iii) by adding at the end the following new this chapter for purposes of determining the section (a) was allowable. paragraph: amount of any credit under this subpart or ‘‘(ii) AGREEMENT TO ASSUME RECAPTURE LI- ‘‘(13) the employer-provided child care subpart A, B, E, or G of this part.’’ ABILITY.—Clause (i) shall not apply if the credit determined under section 45D.’’ (2) TECHNICAL AMENDMENT.—Section 1388 of person acquiring such interest in the facility (B) The table of sections for subpart D of the Internal Revenue Code of 1986 (relating agrees in writing to assume the recapture li- part IV of subchapter A of chapter 1 is to definitions and special rules for coopera- ability of the person disposing of such inter- amended by adding at the end the following tive organizations) is amended by adding at est in effect immediately before such disposi- new item: the end the following new subsection: tion. In the event of such an assumption, the ‘‘Sec. 45D. Employer-provided child care ‘‘(k) CROSS REFERENCE.— person acquiring the interest in the facility credit.’’ shall be treated as the taxpayer for purposes ‘‘For provisions relating to the apportion- of assessing any recapture liability (com- (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to tax- ment of the alcohol fuels credit between co- puted as if there had been no change in own- operative organizations and their patrons, ership). able years beginning after December 31, 1996. (b) MODIFICATION TO FOREIGN TAX CREDIT see section 40(d)(6).’’ ‘‘(4) SPECIAL RULES.— CARRYBACK AND CARRYOVER PERIODS.— (3) EFFECTIVE DATE.—The amendments ‘‘(A) TAX BENEFIT RULE.—The tax for the taxable year shall be increased under para- (1) IN GENERAL.—Subsection (c) of section made by this subsection shall apply to tax- graph (1) only with respect to credits allowed 904 of the Internal Revenue Code of 1986 (re- able years beginning after December 31, 1997. lating to limitation on credit) is amended— by reason of this section which were used to (b) OFFSET OF PAST-DUE, LEGALLY EN- (A) by striking ‘‘in the second preceding reduce tax liability. In the case of credits FORCEABLE STATE TAX OBLIGATIONS AGAINST taxable year,’’, and not so used to reduce tax liability, the OVERPAYMENTS.— (B) by striking ‘‘or fifth’’ and inserting carryforwards and carrybacks under section (1) IN GENERAL.—Section 6402 of the Inter- ‘‘fifth, sixth, or seventh’’. 39 shall be appropriately adjusted. nal Revenue Code of 1986 is amended by re- (2) EFFECTIVE DATE.—The amendment ‘‘(B) NO CREDITS AGAINST TAX.—Any in- designating subsections (e) through (i) as made by this subsection shall apply to cred- crease in tax under this subsection shall not subsections (f) through (j), respectively, and its arising in taxable years beginning after be treated as a tax imposed by this chapter by inserting after subsection (d) the follow- December 31, 1997. for purposes of determining the amount of ing new subsection: any credit under subpart A, B, or D of this ‘‘(e) COLLECTION OF PAST-DUE, LEGALLY EN- part. WELLSTONE AMENDMENTS NOS. FORCEABLE STATE TAX OBLIGATIONS.— ‘‘(C) NO RECAPTURE BY REASON OF CASUALTY 1552–1553 ‘‘(1) IN GENERAL.—Upon receiving notice LOSS.—The increase in tax under this sub- (Ordered to lie on the table.) from any State that a named person owes a section shall not apply to a cessation of op- Mr. WELLSTONE submitted two past-due, legally enforceable State tax obli- eration of the facility as a qualified child amendments intended to be proposed gation to such State, the Secretary shall, care facility by reason of a casualty loss to under such conditions as may be prescribed the extent such loss is restored by recon- by him to the bill, H.R. 2646, supra; as by the Secretary— struction or replacement within a reasonable follows: ‘‘(A) reduce the amount of any overpay- period established by the Secretary. AMENDMENT NO. 1552 ment payable to such person by the amount ‘‘(e) SPECIAL RULES.—For purposes of this At the appropriate place, insert the follow- of such State tax obligation; section— ing: ‘‘(1) AGGREGATION RULES.—All persons ll ‘‘(B) pay the amount by which such over- SEC. . ALLOCATION OF ALCOHOL FUELS payment is reduced under subparagraph (A) which are treated as a single employer under CREDIT TO PATRONS OF A COOPER- subsections (a) and (b) of section 52 shall be ATIVE. to such State and notify such State of such treated as a single taxpayer. (a) ALLOCATION.— person’s name, taxpayer identification num- ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND (1) IN GENERAL.—Subsection (d) of section ber, address, and the amount collected; and TRUSTS.—Under regulations prescribed by 40 of the Internal Revenue Code of 1986 (re- ‘‘(C) notify the person making such over- the Secretary, rules similar to the rules of lating to alcohol used as fuel) is amended by payment that the overpayment has been re- subsection (d) of section 52 shall apply. adding at the end the following new para- duced by an amount necessary to satisfy a ‘‘(3) ALLOCATION IN THE CASE OF PARTNER- graph: past-due, legally enforceable State tax obli- SHIPS.—In the case of partnerships, the cred- ‘‘(6) ALLOCATION OF SMALL ETHANOL PRO- gation. it shall be allocated among partners under DUCER CREDIT TO PATRONS OF COOPERATIVE.— If an offset is made pursuant to a joint re- regulations prescribed by the Secretary. ‘‘(A) IN GENERAL.—In the case of a coopera- turn, the notice under subparagraph (B) shall ‘‘(f) NO DOUBLE BENEFIT.— tive organization described in section 1381(a), include the names, taxpayer identification ‘‘(1) REDUCTION IN BASIS.—For purposes of any portion of the credit determined under numbers, and addresses of each person filing this subtitle— subsection (a)(3) for the taxable year may, at such return. ‘‘(A) IN GENERAL.—If a credit is determined the election of the organization made on a ‘‘(2) OFFSET PERMITTED ONLY AGAINST RESI- under this section with respect to any prop- timely filed return (including extensions) for DENTS OF STATE SEEKING OFFSET.—Paragraph erty by reason of expenditures described in such year, be apportioned pro rata among pa- (1) shall apply to an overpayment by any subsection (c)(1)(A), the basis of such prop- trons on the basis of the quantity or value of person for a taxable year only if the address erty shall be reduced by the amount of the business done with or for such patrons for shown on the return for such taxable year is credit so determined. the taxable year. Such an election, once an address within the State seeking the off- ‘‘(B) CERTAIN DISPOSITIONS.—If during any made, shall be irrevocable for such taxable set. taxable year there is a recapture amount de- year. ‘‘(3) PRIORITIES FOR OFFSET.—Any overpay- termined with respect to any property the ‘‘(B) TREATMENT OF ORGANIZATIONS AND PA- ment by a person shall be reduced pursuant basis of which was reduced under subpara- TRONS.—The amount of the credit appor- to this subsection— graph (A), the basis of such property (imme- tioned to patrons pursuant to subparagraph ‘‘(A) after such overpayment is reduced diately before the event resulting in such re- (A)— pursuant to— capture) shall be increased by an amount ‘‘(i) shall not be included in the amount de- ‘‘(i) subsection (a) with respect to any li- equal to such recapture amount. For pur- termined under subsection (a) for the taxable ability for any internal revenue tax on the poses of the preceding sentence, the term ‘re- year of the organization, and part of the person who made the overpay- capture amount’ means any increase in tax ‘‘(ii) shall be included in the amount deter- ment, (or adjustment in carrybacks or carryovers) mined under subsection (a) for the taxable ‘‘(ii) subsection (c) with respect to past-due determined under subsection (d). year of each patron in which the patronage support, and ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No dividend for the taxable year referred to in ‘‘(iii) subsection (d) with respect to any deduction or credit shall be allowed under subparagraph (A) is includible in gross in- past-due, legally enforceable debt owed to a any other provision of this chapter with re- come. Federal agency, and November 3, 1997 CONGRESSIONAL RECORD — SENATE S11607 ‘‘(B) before such overpayment is credited (A) Paragraph (10) of section 6103(l) of the (C) Section 4081(c)(8) (relating to termi- to the future liability for any Federal inter- Internal Revenue Code of 1986 is amended by nation). nal revenue tax of such person pursuant to striking ‘‘(c) or (d)’’ each place it appears (D) Section 4091(c)(5) (relating to termi- subsection (b). and inserting ‘‘(c), (d), or (e)’’. nation). If the Secretary receives notice from 1 or (B) The paragraph heading for such para- (2) Section 4041(m)(1)(A) of such Code (re- more agencies of the State of more than 1 graph (10) is amended by striking ‘‘SECTION lating to certain alcohol fuels), as amended debt subject to paragraph (1) that is owed by 6402(c) OR 6402(d)’’ and inserting ‘‘SUBSECTION by section 907(b) of the Taxpayer Relief Act such person to such an agency, any overpay- (c), (d), OR (e) OF SECTION 6402’’. of 1997, is amended by striking ‘‘1999’’ both places it appears and inserting ‘‘2005’’. ment by such person shall be applied against (3) CONFORMING AMENDMENTS.— (3) Section 6427(f)(4) of such Code (relating such debts in the order in which such debts (A) Subsection (a) of section 6402 of the In- to termination) is amended by striking accrued. ternal Revenue Code of 1986 is amended by striking ‘‘(c) and (d)’’ and inserting ‘‘(c), (d), ‘‘1999’’ and inserting ‘‘2007’’. ‘‘(4) NOTICE; CONSIDERATION OF EVIDENCE.— (4) Section 40(e)(1) of such Code (relating to No State may take action under this sub- and (e)’’. termination) is amended— section until such State— (B) Paragraph (2) of section 6402(d) of the Internal Revenue Code of 1986 is amended by (A) by striking ‘‘December 31, 2000’’ and in- ‘‘(A) notifies the person owing the past-due serting ‘‘December 31, 2007’’, and State tax liability that the State proposes to striking ‘‘and before such overpayment’’ and inserting ‘‘and before such overpayment is (B) by striking subparagraph (B) and in- take action pursuant to this section, reduced pursuant to subsection (e) and before serting the following: ‘‘(B) gives such person at least 60 days to such overpayment’’. ‘‘(B) of any fuel for any period before Janu- present evidence that all or part of such li- (C) Subsection (f) of section 6402 of the In- ary 1, 2008, during which the rate of tax ability is not past-due or not legally enforce- ternal Revenue Code of 1986, as redesignated under section 4081(a)(2)(A) is 4.3 cents per able, by paragraph (1), is amended— gallon.’’. ‘‘(C) considers any evidence presented by (i) by striking ‘‘(c) or (d)’’ and inserting (5) Headings 9901.00.50 and 9901.00.52 of the such person and determines that an amount ‘‘(c), (d), or (e)’’, and Harmonized Tariff Schedule of the United of such debt is past-due and legally enforce- (ii) by striking ‘‘Federal agency’’ and in- States (19 U.S.C. 3007) are amended in the ef- able, and serting ‘‘Federal agency or State’’. fective period column by striking ‘‘10/1/2000’’ ‘‘(D) satisfies such other conditions as the (D) Subsection (h) of section 6402 of the In- each place it appears and inserting ‘‘10/1/ Secretary may prescribe to ensure that the ternal Revenue Code of 1986, as redesignated 2007’’. determination made under subparagraph (C) by paragraph (1), is amended by striking (b) MODIFICATION.— is valid and that the State has made reason- ‘‘subsection (c)’’ and inserting ‘‘subsection (1) IN GENERAL.—Subsection (h) of section able efforts to obtain payment of such State (c) or (e)’’. 40 of the Internal Revenue Code of 1986 (re- tax obligation. (4) AMENDMENTS APPLIED AFTER TECHNICAL lating to alcohol used as fuel) is amended to AST DUE LEGALLY ENFORCEABLE ‘‘(5) P - , CORRECTIONS TO PERSONAL RESPONSIBILITY read as follows: ‘‘(h) REDUCED CREDIT FOR ETHANOL BLEND- STATE TAX OBLIGATION.—For purposes of this AND WORK OPPORTUNITY RECONCILIATION ACT ERS.— subsection, the term ‘past-due, legally en- OF 1996.— ‘‘(1) IN GENERAL.—In the case of any alco- forceable State tax obligation’ means a (A) Section 110(l) of the Personal Respon- hol mixture credit or alcohol credit with re- debt— sibility and Work Opportunity Reconcili- spect to any sale or use of alcohol which is ‘‘(A)(i) which resulted from— ation Act of 1996 is amended by striking ethanol during calendar years 2001 through ‘‘(I) a judgment rendered by a court of paragraphs (4), (5), and (7) (and the amend- 2007— competent jurisdiction which has deter- ments made by such paragraphs), and the In- ‘‘(A) subsections (b)(1)(A) and (b)(2)(A) mined an amount of State tax to be due, or ternal Revenue Code of 1986 shall be applied shall be applied by substituting ‘the blender ‘‘(II) a determination after an administra- as if such paragraphs (and amendments) had amount’ for ‘60 cents’, tive hearing which has determined an never been enacted. ‘‘(B) subsection (b)(3) shall be applied by amount of State tax to be due, and (B) For purposes of applying the amend- substituting ‘the low-proof blender amount’ ‘‘(ii) which is no longer subject to judicial ments made by this subsection other than for ‘45 cents’ and ‘the blender amount’ for ‘60 review, or this paragraph, the provisions of this para- cents’, and ‘‘(B) which resulted from a State tax which graph shall be treated as having been en- ‘‘(C) subparagraphs (A) and (B) of sub- has been assessed but not collected, the time acted immediately before the other provi- section (d)(3) shall be applied by substituting for redetermination of which has expired, sions of this subsection. ‘the blender amount’ for ‘60 cents’ and ‘the and which has not been delinquent for more (5) EFFECTIVE DATE.—The amendments low-proof blender amount’ for ‘45 cents’. than 10 years. made by this subsection (other than para- ‘‘(2) AMOUNTS.—For purposes of paragraph graph (4)) shall apply to refunds payable For purposes of this paragraph, the term (1), the blender amount and the low-proof under section 6402 of the Internal Revenue ‘State tax’ includes any local tax adminis- blender amount shall be determined in ac- Code of 1986 after December 31, 1998. tered by the chief tax administration agency cordance with the following table: of the State. ‘‘(6) REGULATIONS.—The Secretary shall AMENDMENT NO. 1553 issue regulations prescribing the time and At the appropriate place, insert the follow- In the case of any The blender The low-proof ing: sale or use during blender manner in which States must submit notices calendar year: amount is: amount is: of past-due, legally enforceable State tax ob- ‘‘It is the sense of the Senate that the Fed- ligations and the necessary information that eral budget deficit should be reduced, and a 2001 or 2002 ...... 53 cents 39.26 cents must be contained in or accompany such no- surplus should be achieved, in a way that is 2003 or 2004 ...... 52 cents 38.52 cents 2005, 2006, or 2007 51 cents 37.78 cents.’’. tices. The regulations shall specify the types fair and responsible, in part by enacting pro- visions to close longstanding loopholes in of State taxes and the minimum amount of (2) CONFORMING AMENDMENTS.— debt to which the reduction procedure estab- our tax code and eliminating unwarranted (A) Section 4041(b)(2) of such Code is lished by paragraph (1) may be applied. The special interest subsidies.’’ amended— regulations may require States to pay a fee (i) in subparagraph (A)(i), by striking ‘‘5.4 to reimburse the Secretary for the cost of MOSELEY-BRAUN AMENDMENTS cents’’ and inserting ‘‘the applicable blender applying such procedure. Any fee paid to the NOS. 1554–1556 rate’’, and Secretary pursuant to the preceding sen- (Ordered to lie on the table.) (ii) by redesignating subparagraph (C), as tence shall be used to reimburse appropria- Ms. MOSELEY-BRAUN submitted amended by subsection (a)(2)(A), as subpara- tions which bore all or part of the cost of ap- three amendments intended to be pro- graph (D) and by inserting after subpara- plying such procedure. graph (B) the following: ‘‘(7) ERRONEOUS PAYMENT TO STATE.—Any posed by her to the bill, H.R. 2646, ‘‘(C) APPLICABLE BLENDER RATE.—For pur- State receiving notice from the Secretary supra; as follows: poses of subparagraph (A)(i), the applicable that an erroneous payment has been made to AMENDMENT NO. 1554 blender rate is— such State under paragraph (1) shall pay At the end add the following: ‘‘(i) except as provided in clause (ii), 5.4 promptly to the Secretary, in accordance SEC. ll. EXTENSION AND MODIFICATION OF cents, and with such regulations as the Secretary may SUBSIDIES FOR ALCOHOL FUELS. ‘‘(ii) for sales or uses during calendar years prescribe, an amount equal to the amount of (a) EXTENSION.— 2001 through 2007, 1⁄10 of the blender amount such erroneous payment (without regard to (1) The following provisions of the Internal applicable under section 40(h)(2) for the cal- whether any other amounts payable to such Revenue Code of 1986 are each amended by endar year in which the sale or use occurs.’’. State under such paragraph have been paid striking ‘‘2000’’ each place it appears and in- (B) Subparagraph (A) of section 4081(c)(4) of to such State).’’. serting ‘‘2007’’: such Code is amended to read as follows: (2) DISCLOSURE OF CERTAIN INFORMATION TO (A) Section 4041(b)(2)(C) (relating to termi- ‘‘(A) GENERAL RULES.— STATES REQUESTING REFUND OFFSETS FOR nation). ‘‘(i) MIXTURES CONTAINING ETHANOL.—Ex- PAST-DUE, LEGALLY ENFORCEABLE STATE TAX (B) Section 4041(k)(3) (relating to termi- cept as provided in clause (ii), in the case of OBLIGATIONS.— nation). a qualified alcohol mixture which contains S11608 CONGRESSIONAL RECORD — SENATE November 3, 1997

gasoline, the alcohol mixture rate is the ex- (3) EFFECTIVE DATES.— ‘‘(A) the aggregate amount contributed by cess of the rate which would (but for this (1) Except as provided in paragraph (2), the the taxpayer for such taxable year for the paragraph) be determined under subsection amendments made by this section shall benefit of such child to qualified tuition pro- (a) over— apply to taxable years beginning after De- grams (as defined in section 529) and edu- ‘‘(I) in the case of 10 percent gasohol, the cember 31, 1997. cation individual retirement accounts (as de- applicable blender rate (as defined in section (2) The amendment made by subsection (d) fined in section 530), over 4041(b)(2)(A)) per gallon, shall apply to credits arising in taxable ‘‘(B) the aggregate amount distributed dur- ‘‘(II) in the case of 7.7 percent gasohol, the years beginning after December 31, 1997. ing such taxable year from such programs number of cents per gallon equal to 77 per- and accounts (the beneficiary of which is cent of such applicable blender rate, and AMENDMENT NO. 1556 such child) which is subject to tax under sec- ‘‘(III) in the case of 5.7 percent gasohol, the Beginning on page 2, line 3, strike all tion 529(c) or 530(d). number of cents per gallon equal to 57 per- through page 6, line 9, and insert: ‘‘(2) RECAPTURE OF CREDIT.— cent of such applicable blender rate. ‘‘(A) IN GENERAL.—If— SECTION 1. REMOVAL OF DOLLAR AND 60-MONTH ‘‘(i) during any taxable year any amount is ‘‘(ii) MIXTURES NOT CONTAINING ETHANOL.— LIMITATIONS ON DEDUCTION FOR withdrawn from a qualified tuition program In the case of a qualified alcohol mixture STUDENT LOANS. or an education individual retirement ac- which contains gasoline and none of the al- (a) IN GENERAL.—Section 221 of the Inter- count maintained for the benefit of a bene- cohol in which consists of ethanol, the alco- nal Revenue Code of 1986 (relating to interest ficiary and such amount is subject to tax hol mixture rate is the excess of the rate on education loans) is amended by striking which would (but for this paragraph) be de- under section 529(c) or 530(d), and subsections (b)(1) and (d) and by redesignat- ‘‘(ii) the amount of the credit allowed termined under subsection (a) over— ing subsections (e), (f), and (g) as subsections under this section for the prior taxable year ‘‘(I) in the case of 10 percent gasohol, 6 (d), (e), and (f), respectively. was contingent on a contribution being made cents per gallon, (b) CONFORMING AMENDMENTS.— to such a program or account for the benefit ‘‘(II) in the case of 7.7 percent gasohol, 4.62 (1) Subsection (b) of section 221 of such of such beneficiary, cents per gallon, and Code, as amended by subsection (a), is ‘‘(III) in the case of 5.7 percent gasohol, 3.42 amended to read as follows: the taxpayer’s tax imposed by this chapter for the taxable year shall be increased by the cents per gallon.’’. ‘‘(b) LIMITATION BASED ON MODIFIED AD- lesser of the amount described in clause (i) (C) Section 4081(c)(5) of such Code is JUSTED GROSS INCOME.— amended by striking ‘‘5.4 cents’’ and insert- ‘‘(1) IN GENERAL.—The amount which would or the credit described in clause (ii). ‘‘(B) NO CREDITS AGAINST TAX, ETC.—Any ing ‘‘the applicable blender rate (as defined (but for this subsection) be allowable as a de- increase in tax under this paragraph shall in section 4041(b)(2)(C))’’. duction under this section shall be reduced not be treated as a tax imposed by this chap- (D) Section 4091(c)(1) of such Code is (but not below zero) by the amount deter- ter for purposes of determining— amended by striking ‘‘13.4 cents’’ each place mined under paragraph (2). ‘‘(i) the amount of any credit under this it appears and inserting ‘‘the applicable ‘‘(2) AMOUNT OF REDUCTION.—The amount subpart or subpart B or D of this part, and blender amount’’ and by adding at the end determined under this paragraph is the ‘‘(ii) the amount of the minimum tax im- the following new sentence: ‘‘For purposes of amount which would be so taken into ratio posed by section 55.’’. this paragraph, the term ‘applicable blender to the amount which would be so taken into (b) EFFECTIVE DATE.—The amendment amount’ means 13.3 cents in the case of any account as— made by this section shall take effect as if sale or use during 2001 or 2002, 13.2 cents in ‘‘(A) the excess of— included in the amendments made by section the case of any sale or use during 2003 or ‘‘(i) the taxpayer’s modified adjusted gross 101 of the Taxpayer Relief Act of 1997. 2004, 13.1 cents in the case of any sale or use income for such taxable year, over ‘‘(ii) $40,000 ($60,000 in the case of a joint re- during 2005, 2006, or 2007, and 13.4 cents in the MOYNIHAN AMENDMENT NO. 1558 case of any sale or use during 2008 or there- turn), bears to after.’’. ‘‘(B) $15,000. (Ordered to lie on the table.) (3) EFFECTIVE DATE.—The amendments ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— Mr. MOYNIHAN submitted an made by this subsection shall take effect on The term ‘modified adjusted gross income’ amendment intended to be proposed by January 1, 2001. means adjusted gross income determined— him to the bill, H.R. 2646, supra; as fol- ‘‘(A) without regard to this section and lows: AMENDMENT NO. 1555 sections 135, 137, 911, 931, and 933, and At the end add the following: At the end add the following: ‘‘(B) after application of sections 86, 219, and 469. SEC. . SENSE OF THE SENATE REGARDING SEC. . INCREASE IN MAXIMUM EXCLUSION FOR TREATMENT OF FUTURE UNIFIED EMPLOYER-PROVIDED TRANSIT For purposes of sections 86, 135, 137, 219, and BUDGET SURPLUSES. PASSES. 469, adjusted gross income shall be deter- (a) FINDINGS.—The Senate finds that— (a) IN GENERAL.—Subparagraph (A) of sec- mined without regard to the deduction al- (1) the current economic expansion is now tion 132(f)(2) of the Internal Revenue Code of lowed under this section.’’. in its seventh year and shows no signs of 1986 (relating to limitation on exclusion) is (2) Section 6050S(e) of such Code is amend- ending; amended by striking ‘‘$60’’ and inserting ed by striking ‘‘section 221(e)(1)’’ and insert- (2) the unemployment rate is below 5 per- ‘‘$170’’. ing ‘‘section 221(d)(1)’’. cent for the first time in 24 years; (b) CONFORMING AMENDMENT.—Section (c) EFFECTIVE DATE.—The amendments (3) the current official inflation rate, 132(f)(2)(B) of such Code is amended by strik- made by this section shall take effect as if which may be overstated, is about 2 percent; ing ‘‘$155’’ and inserting ‘‘$170’’. included in the amendments made by section (4) the deficit has been reduced from (c) CONFORMING INFLATION ADJUSTMENT.— 202 of the Taxpayer Relief Act of 1997. $290,000,000,000 in fiscal year 1992 to Paragraph (6) of section 132(f) of such Code $23,000,000,000 in fiscal year 1997, or just (relating to qualified transportation fringe) KERREY AMENDMENT NO. 1557 three-tenths of 1 percent of the Gross Domes- is amended to read as follows: (Ordered to lie on the table.) tic Product (GDP); ‘‘(6) INFLATION ADJUSTMENT.—In the case of (5) the Congressional Budget Office any taxable year beginning in a calendar Mr. KERREY submitted an amend- projects that, under present law, the unified year after 1997, the dollar amounts contained ment intended to be proposed by him budget will have a surplus of $86,000,000,000 in in subparagraphs (A) and (B) of paragraph (2) to the bill, H.R. 2646, supra; as follows: 2007; shall be increased by an amount equal to— At the end add the following: (6) the Congressional Budget Office also ‘‘(A) such dollar amount, multiplied by SEC. . CHILD CREDIT LIMITED TO EDUCATION projects that, under present law, the debt ‘‘(B) the cost-of-living adjustment deter- SAVINGS FOR CHILDREN UNDER held by the public will fall from about 50 per- mined under section 1(f)(3) for the calendar AGE 6. cent of GDP this year to about 30 percent by year in which the taxable year begins, by (a) IN GENERAL.—Section 24 of the Internal 2007; substituting ‘calendar year 1996’ for ‘cal- Revenue Code of 1986 (relating to child tax (7) this extraordinary combination of good endar year 1992’. credit) is amended by adding at the end the budget and economic news is largely the re- If any increase determined under the preced- following: sult of budget policies included in the Omni- ing sentence is not a multiple of $5, such in- ‘‘(g) CREDIT LIMITED TO EDUCATION SAVINGS bus Budget and Reconciliation Act of 1993; crease shall be rounded to the next lowest FOR CERTAIN CHILDREN.— (8) the budget is not yet in surplus; multiple of $5.’’. ‘‘(1) IN GENERAL.—In the case of a qualify- (9) the Congressional Budget Office also (d) MODIFICATION TO FOREIGN TAX CREDIT ing child who has not attained the age of 6 as projects that the deficit is likely to reappear CARRYBACK AND CARRYOVER PERIODS.— of the close of the calendar year in which the after 2007, and that the debt held by the pub- Subsection (c) of section 904 of such Code (re- taxable year of the taxpayer begins, the lic as a percentage of GDP is also likely to lating to limitation on credit) is amended— amount of the credit allowed under this sec- increase as the baby boom generation begins (1) by striking ‘‘in the second preceding tion for such taxable year with respect to to retire; taxable year,’’, and such child (after the application of any pre- (10) without the on-budget surpluses of the (2) by striking ‘‘of fifth’’ and inserting ceding subsection) shall not exceed the ex- social security trust funds, the Congres- ‘‘fifth, sixth, or seventh’’. cess of— sional Budget Office still projects annual November 3, 1997 CONGRESSIONAL RECORD — SENATE S11609

deficits of about $100,000,000,000 even after ‘‘(5) states the number of qualifying indi- (3) CONFORMING AMENDMENTS.— the budget is ‘‘balanced’’ in 2002; and viduals in the household maintained by the (A) Section 530(d)(4)(C) of such Code is (11) projected unified budget surpluses in employee, and amended by striking ‘‘$500’’ and inserting the short-run would rapidly disappear if the ‘‘(6) estimates the amount of employment- ‘‘the contribution limit for such taxable current expansion ends, and the economy related expenses for the calendar year. year’’. would enter a recession. ‘‘(c) DEPENDENT CARE ADVANCE AMOUNT.— (B) Section 4973(e)(1)(A) of such Code is (b) SENSE OF THE SENATE.—It is the sense ‘‘(1) IN GENERAL.—For purposes of this amended by striking ‘‘$500’’ and inserting of the Senate that— title, the term ‘dependent care advance ‘‘the contribution limit (as defined in section (1) any unified budget surpluses that might amount’ means, with respect to any payroll 530(b)(4)) for such taxable year’’. arise in the current expansion should be used period, the amount determined— (b) WAIVER OF AGE LIMITATIONS FOR CHIL- to reduce the Federal debt held by the pub- ‘‘(A) on the basis of the employee’s wages DREN WITH SPECIAL NEEDS.—Paragraph (1) of lic; and from the employer for such period, section 530(b) of the Internal Revenue Code (2) to achieve this goal during this eco- ‘‘(B) on the basis of the employee’s esti- of 1986 is amended by adding at the end the nomic expansion that there be no net tax cut mated employment-related expenses in- following flush sentence: or new spending that is not offset by reduc- cluded in the dependent care eligibility cer- ‘‘The age limitations in the proceeding tions in spending on other programs or tax tificate, and sentence shall not apply to any designated increases. ‘‘(C) in accordance with tables provided by beneficiary with special needs (as deter- the Secretary. mined under regulations prescribed by the ‘‘(2) ADVANCE AMOUNT TABLES.—The tables Secretary).’’. DODD AMENDMENT NO. 1559 referred to in paragraph (1)(C) shall be simi- (c) CORPORATIONS PERMITTED TO CONTRIB- lar in form to the tables prescribed under (Ordered to lie on the table.) UTE TO ACCOUNTS.—Paragraph (1) of section Mr. DODD submitted an amendment section 3402 and, to the maximum extent fea- 530(c) of the Internal Revenue Code of 1986 is intended to be proposed by him to the sible, shall be coordinated with such tables amended by striking ‘‘The maximum amount bill, H.R. 2646, supra; as follows: and the tables prescribed under section which a contributor’’ and inserting ‘‘In the 3507(c). Beginning on page 2, line 3, strike all case of a contributor who is an individual, THER RULES.—For purposes of this ‘‘(d) O the maximum amount the contributor’’. through page 6, line 9, and insert: section, rules similar to the rules of sub- (d) EFFECTIVE DATE; REFERENCES.— SECTION 1. DEPENDENT CARE CREDIT MADE RE- sections (d) and (e) of section 3507 shall (1) EFFECTIVE DATE.—The amendments FUNDABLE FOR LOW-INCOME TAX- apply. PAYERS. made by this section shall take effect as if ‘‘(e) DEFINITIONS.—For purposes of this sec- (a) IN GENERAL.—Section 21 of the Internal included in the amendments made by section tion, terms used in this section which are de- Revenue Code of 1986 (relating to credit for 213 of the Taxpayer Relief Act of 1997. fined in section 21 shall have the respective household and dependent care services) is (2) REFERENCES.—Any reference in this sec- meanings given such terms by section 21.’’. amended by redesignating subsection (f) as tion to any section of the Internal Revenue (c) CONFORMING AMENDMENT.—The table of Code of 1986 shall be a reference to such sec- subsection (g) and by inserting after sub- sections for chapter 25 of the Internal Reve- tion as added by the Taxpayer Relief Act of section (e) the following: nue Code of 1986 is amended by adding after ‘‘(f) CREDIT MADE REFUNDABLE FOR LOW IN- 1997. the item relating to section 3507 the follow- COME TAXPAYERS.— ing: ‘‘(1) IN GENERAL.—For purposes of this sub- AMENDMENT NO. 1562 ‘‘Sec. 3507A. Advance payment of dependent title, in the case of an applicable taxpayer Strike section 2 and insert: individual, the credit allowable under sub- care credit.’’. SEC. 2. MODIFICATIONS TO EDUCATION INDIVID- (d) EFFECTIVE DATE.—The amendments section (a) for any taxable year shall be UAL RETIREMENT ACCOUNTS. treated as a credit allowable under subpart C made by this section shall apply to taxable (a) TEMPORARY INCREASE IN MAXIMUM AN- of this part. years beginning after December 31, 1997. NUAL CONTRIBUTIONS.— ‘‘(2) APPLICABLE TAXPAYER.—For purposes (1) IN GENERAL.—Section 530(b)(1)(A)(iii) of of this subsection, the term ‘applicable tax- KENNEDY AMENDMENTS NOS. 1560– the Internal Revenue Code of 1986 is amended payer’ means a taxpayer with respect to 1569 by striking ‘‘$500’’ and inserting ‘‘the con- whom the credit under section 32 is allow- tribution limit for such taxable year’’. able for the taxable year. (Ordered to lie on the table.) (2) CONTRIBUTION LIMIT.—Section 530(b) of ‘‘(3) COORDINATION WITH ADVANCE PAYMENTS Mr. KENNEDY submitted 10 amend- such Code is amended by adding at the end AND MINIMUM TAX.—Rules similar to the rules ments intended to be proposed by him of subsections (g) and (h) of section 32 shall the following new paragraph: to the bill, H.R. 2646, supra; as follows: ONTRIBUTION LIMIT.—The term ‘con- apply with respect to the portion of any ‘‘(4) C AMENDMENT NO. 1560 tribution limit’ means $2,000 ($500 in the case credit to which this subsection applies.’’. (b) Advance Payment of Credit.— Strike section 2 and insert: of any taxable year ending after December (1) IN GENERAL.—Chapter 25 of the Internal SEC. 2. EXCLUSION FOR EDUCATIONAL ASSIST- 31, 2002).’’. Revenue Code of 1986 (relating to general ANCE TO GRADUATE STUDENTS. (3) CONFORMING AMENDMENTS.— provisions relating to employment taxes) is (A) IN GENERAL.—The last sentence of sec- (A) Section 530(d)(4)(C) of such Code is amended by inserting after section 3507 the tion 127(c)(1) of the Internal Revenue Code of amended by striking ‘‘$500’’ and inserting following: 1986 (defining educational assistance) is ‘‘the contribution limit for such taxable year’’. ‘‘SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT amended by striking ‘‘, and such term also CARE CREDIT. does not include any payment for, or the pro- (B) Section 4973(e)(1)(A) of such Code is ‘‘(a) GENERAL RULE.—Except as otherwise vision of any benefits with respect to, any amended by striking ‘‘$500’’ and inserting provided in this section, every employer graduate level course of a kind normally ‘‘the contribution limit (as defined in section making payment of wages with respect to taken by an individual pursuing a program 530(b)(4)) for such taxable year’’. whom a dependent care eligibility certificate leading to a law, business, medical, or other (b) WAIVER OF AGE LIMITATIONS FOR CHIL- is in effect shall, at the time of paying such advanced academic or professional degree’’. DREN WITH SPECIAL NEEDS.—Paragraph (1) of wages, make an additional payment equal to (b) EFFECTIVE DATE.—The amendment section 530(b) of the Internal Revenue Code such employee’s dependent care advance made by subsection (a) shall apply with re- of 1986 is amended by adding at the end the amount. spect to expenses relating to courses begin- following flush sentence: ‘‘(b) DEPENDENT CARE ELIGIBILITY CERTIFI- ning after June 30, 1996. ‘‘The age limitations in the preceding sen- CATE.—For purposes of this title, a depend- tence shall not apply to any designated bene- ent care eligibility certificate is a statement AMENDMENT NO. 1561 ficiary with special needs (as determined furnished by an employee to the employer Strike section 2 and insert: under regulations prescribed by the Sec- which— SEC. 2. MODIFICATIONS TO EDUCATION INDIVID- retary).’’. ‘‘(1) certifies that the employee will be eli- UAL RETIREMENT ACCOUNTS. (c) CORPORATIONS PERMITTED TO CONTRIB- gible to receive the credit provided by sec- (a) TEMPORARY INCREASE IN MAXIMUM AN- UTE TO ACCOUNTS.—Paragraph (1) of section tion 21 for the taxable year, NUAL CONTRIBUTIONS.— 530(c) of the Internal Revenue Code of 1986 is ‘‘(2) certifies that the employee reasonably (1) IN GENERAL.—Section 530(b)(1)(A)(iii) of amended by striking ‘‘The maximum amount expects to be an applicable taxpayer for the the Internal Revenue Code of 1986 is amended which a contributor’’ and inserting ‘‘In the taxable year, by striking ‘‘$500’’ and inserting ‘‘the con- case of a contributor who is an individual, ‘‘(3) certifies that the employee does not tribution limit for such taxable year’’. the maximum amount the contributor’’. have a dependent care eligibility certificate (2) CONTRIBUTION LIMIT.—Section 530(b) of (d) EFFECTIVE DATE; REFERENCES.— in effect for the calendar year with respect such Code is amended by adding at the end (1) EFFECTIVE DATE.—The amendments to the payment of wages by another em- the following new paragraph: made by this section shall take effect as if ployer, ‘‘(4) CONTRIBUTION LIMIT.—The term ‘con- included in the amendments made by section ‘‘(4) states whether or not the employee’s tribution limit’ means $2,500 ($500 in the case 213 of the Taxpayer Relief Act of 1997. spouse has a dependent care eligibility cer- of any taxable year ending after December (2) REFERENCES.—Any reference in this sec- tificate in effect, 31, 2002).’’. tion to any section of the Internal Revenue S11610 CONGRESSIONAL RECORD — SENATE November 3, 1997 Code of 1986 shall be a reference to such sec- section 530(b) of the Internal Revenue Code the taxpayer with respect to whom a deduc- tion as added by the Taxpayer Relief Act of of 1986 is amended by adding at the end the tion is allowable under section 151(c)(1) for a 1997. following flush sentence: designated beneficiary shall be treated as ‘‘The age limitations in the preceding sen- having been made by such taxpayer, and AMENDMENT NO. 1563 tence shall not apply to any designated bene- (E) expenses for computer and other equip- Strike section 2 and insert: ficiary with special needs (as determined ment, transportation, and supplementary items are allowed tax-free only if required or SEC. 2. MODIFICATIONS TO EDUCATION INDIVID- under regulations prescribed by the Sec- UAL RETIREMENT ACCOUNTS. retary).’’. provided by the school.’’ (a) TEMPORARY INCREASE IN MAXIMUM AN- (c) CORPORATIONS PERMITTED TO CONTRIB- AMENDMENT NO. 1567 NUAL CONTRIBUTIONS.— UTE TO ACCOUNTS.—Paragraph (1) of section (1) IN GENERAL.—Section 530(b)(1)(A)(iii) of 530(c) of the Internal Revenue Code of 1986 is On page 6, line 5, strike ‘‘1997’’ and insert the Internal Revenue Code of 1986 is amended amended by striking ‘‘The maximum amount ‘‘1997, except that such amendments shall by striking ‘‘$500’’ and inserting ‘‘the con- which a contributor’’ and inserting ‘‘In the only take effect to the extent that— tribution limit for such taxable year’’. case of a contributor who is an individual, (A) contributions to education individual (2) CONTRIBUTION LIMIT.—Section 530(b) of the maximum amount the contributor’’. retirement accounts for qualified elementary such Code is amended by adding at the end (d) EFFECTIVE DATE; REFERENCES.— and secondary education expenses are— the following new paragraph: (1) EFFECTIVE DATE.—The amendments (i) limited to accounts that, at the time the account is created or organized, are des- ‘‘(4) CONTRIBUTION LIMIT.—The term ‘con- made by this section shall take effect as if tribution limit’ means $1,500 ($500 in the case included in the amendments made by section ignated solely for the payment of such ex- of any taxable year ending after December 213 of the Taxpayer Relief Act of 1997. penses, and (ii) not allowed for contributors who have 31, 2002).’’. (2) REFERENCES.—Any reference in this sec- modified adjusted gross income in excess of (3) CONFORMING AMENDMENTS.— tion to any section of the Internal Revenue (A) Section 530(d)(4)(C) of such Code is Code of 1986 shall be a reference to such sec- $50,000 and are ratably reduced to zero for amended by striking ‘‘$500’’ and inserting tion as added by the Taxpayer Relief Act of contributors who have modified adjusted ‘‘the contribution limit for such taxable 1997. gross income between $40,000 and $50,000, (B) contributions to education individual year’’. retirement accounts in excess of $500 for any (B) Section 4973(e)(1)(A) of such Code is AMENDMENT NO. 1565 taxable years may be made only to accounts amended by striking ‘‘$500’’ and inserting On page 6, line 5, strike ‘‘1997’’ and insert described in subparagraph (A)(i), ‘‘the contribution limit (as defined in section ‘‘1997, except that such amendments shall (C) no contributions may be made to ac- 530(b)(4)) for such taxable year’’. only take effect to the extent that— counts described in subparagraph (A)(i) for (b) WAIVER OF AGE LIMITATIONS FOR CHIL- (A) contributions to education individual taxable years ending after December 31, 2002, DREN WITH SPECIAL NEEDS.—Paragraph (1) of retirement accounts for qualified elementary (D) the modified adjusted gross income section 530(b) of the Internal Revenue Code and secondary education expenses are— limitation shall apply to all contributors but of 1986 is amended by adding at the end the (i) limited to accounts that, at the time contributions made by a person other than following flush sentence: the account is created or organized, are des- the taxpayer with respect to whom a deduc- ‘‘The age limitations in the preceding sen- ignated solely for the payment of such ex- tion is allowable under section 151(c)(1) for a tence shall not apply to any designated bene- penses, and designated beneficiary shall be treated as ficiary with special needs (as determined (ii) not allowed for contributors who have having been made by such taxpayer, and under regulations prescribed by the Sec- modified adjusted gross income in excess of (E) expenses for computer and other equip- retary).’’. $65,000 and are ratably reduced to zero for ment, transportation, and supplementary (c) CORPORATIONS PERMITTED TO CONTRIB- contributors who have modified adjusted items are allowed tax-free only if required or UTE TO ACCOUNTS.—Paragraph (1) of section gross income between $50,000 and $65,000, provided by the school.’’ 530(c) of the International Revenue Code of (B) contributions to education individual 1986 is amended by striking ‘‘The maximum retirement accounts in excess of $500 for any AMENDMENT NO. 1568 amount which a contributor’’ and inserting taxable years may be made only to accounts On page 3, beginning with line 14, strike all ‘‘In the case of a contributor who is an indi- described in subparagraph (A)(i), through page 4, line 10, and insert: vidual, the maximum amount the contribu- (C) no contributions may be made to ac- ‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY tor’’. counts described in subparagraph (A)(i) for EDUCATION EXPENSES.— (d) EFFECTIVE DATE, REFERENCES.— taxable years ending after December 31, 2002, ‘‘(A) IN GENERAL.—The term ‘qualified ele- (1) EFFECTIVE DATE.—The amendments (D) the modified adjusted gross income mentary and secondary education expenses’ made by this section shall take effect as if limitation shall apply to all contributors but means tuition, fees, tutoring, special needs included in the amendments made by section contributions made by a person other than services, books, supplies, computer equip- 213 of the Taxpayer Relief Act of 1997. the taxpayer with respect to whom a deduc- ment (including related software and serv- (2) REFERENCES.—Any reference in this sec- tion is allowable under section 151(c)(1) for a ices) and other equipment, transportation, tion to any section of the Internal Revenue designated beneficiary shall be treated as and supplementary expenses required for the Code of 1986 shall be a reference to such sec- having been made by such taxpayer, and enrollment or attendance of the designated tion as added by the Taxpayer Relief Act of (E) expenses for computer and other equip- beneficiary of the trust at a public school. 1997. ment, transportation, and supplementary ‘‘(B) SPECIAL RULE FOR HOME-SCHOOLING.— items are allowed tax-free only if required or Such term shall include expenses described AMENDMENT NO. 1564 provided by the school.’’ in subparagraph (A) required for education Strike section 2 and insert: provided for homeschooling if the require- SEC. 2. MODIFICATIONS TO EDUCATION INDIVID- AMENDMENT NO. 1566 ments of any applicable State or local law UAL RETIREMENT ACCOUNTS. On page 6, line 5, strike ‘‘1997’’ and insert are met with respect to such education. (a) TEMPORARY INCREASE IN MAXIMUM AN- ‘‘1997, except that such amendments shall ‘‘(C) SCHOOL.—The term ‘school’ means any NUAL CONTRIBUTIONS.— only take effect to the extent that— public or home school which provides ele- (1) IN GENERAL.—Section 530(b)(1)(A)(iii) of (A) contributions to education individual mentary education or secondary education the Internal Revenue Code of 1986 is amended retirement accounts for qualified elementary (through grade 12), as determined under by striking ‘‘$500’’ and inserting ‘‘the con- and secondary education expenses are— State law.’’. tribution limit for such taxable year’’. (i) limited to accounts that, at the time (2) CONTRIBUTION LIMIT.—Section 530(b) of the account is created or organized, are des- AMENDMENT NO. 1569 such Code is amended by adding at the end ignated solely for the payment of such ex- On page 3, beginning with line 14, strike all the following new paragraph: penses, and through page 4, line 10, and insert: ‘‘(4) CONTRIBUTION LIMIT.—The term ‘con- (ii) not allowed for contributors who have ‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY tribution limit’ means $1,000 ($500 in the case modified adjusted gross income in excess of EDUCATION EXPENSES.— of any taxable year ending after December $60,000 and are ratably reduced to zero for ‘‘(A) IN GENERAL.—The term ‘qualified ele- 31, 2002).’’. contributors who have modified adjusted mentary and secondary education expenses’ (3) CONFORMING AMENDMENTS.— gross income between $50,000 and $60,000, means tuition fees, tutoring, special needs (A) Section 530(d)(4)(C) of such Code is (B) contributions to education individual services, books, supplies, computer equip- amended by striking ‘‘$500’’ and inserting retirement accounts in excess of $500 for any ment (including related software and serv- ‘‘the contribution limit for such taxable taxable years may be made only to accounts ices) and other equipment, transportation, year’’. described in subparagraph (A)(i), and supplementary expenses required for the (B) Section 4973(e)(1)(A) of such Code is (C) no contributions may be made to ac- enrollment or attendance of the designated amended by striking ‘‘$500’’ and inserting counts described in subparagraph (A)(i) for beneficiary of the trust at a public school. ‘‘the contribution limit (as defined in section taxable years ending after December 31, 2002, ‘‘(B) SCHOOL.—The term ‘school’ means any 530(b)(4)) for such taxable year’’. (D) the modified adjusted gross income public school which provides elementary (b) WAIVER OF AGE LIMITATIONS FOR CHIL- limitation shall apply to all contributors but education or secondary education (through DREN WITH SPECIAL NEEDS.—Paragraph (1) of contributions made by a person other than grade 12), as determined under State law.’’. November 3, 1997 CONGRESSIONAL RECORD — SENATE S11611 GRAMM AMENDMENT NO. 1570 SUBCOMMITTEE ON INTERNATIONAL SECURITY, istence. Hampton Falls, with its simple PROLIFERATION, AND FEDERAL SERVICES (Ordered to lie on the table.) white churches and colonial buildings, Mr. GRAMM submitted an amend- Mr. ROTH. Mr. President, I ask unan- provides for a prime example of Amer- ment intended to be proposed by him imous consent on behalf of the Sub- ican history and culture. to the bill, H.R. 2646, supra; as follows: committee on International Security, Today, Hampton Falls is a thriving Proliferation, and Federal Services of southern New Hampshire community (a) IN GENERAL.—Subpart A of Part IV of the Governmental Affairs Committee subchapter A of Chapter 1 of the Internal of approximately 1,700 people. The Revenue Code of 1986 is amended by inserting to meet on Monday, November 3, at 2:30 town is unmistakably New England. after section 24 the following new section: p.m. for a hearing on Oversight of the Winding country roads bring one past ‘‘SEC 24A EXPEDITED FAMILY TAX RELIEF. U.S. Postal Service. many sprawling farms and picture-per- ‘‘(a) NOTICE OF CREDIT.—The Secretary of The PRESIDING OFFICER. Without fect farmhouses. Presently, the town’s the Treasury shall transmit to all individual objection, it is so ordered. central industry is agriculture. A taxpayers by a separate mailing made on or f major area business is Applecrest before June 1, 1998, a notice which states Farms, one of the last working or- ADDITIONAL STATEMENTS only the following: The Taxpayer Relief Act chards on the seacoast. Applecrest of 1997 was recently passed by the Congress. celebrates the harvest season with The Act’s child tax credit allows taxpayers to reduce their taxes by $400 per child in 1998 TRIBUTE TO HAMPTON FALLS, NH, pick-your-own apples, a country farm- and $500 thereafter. the credit is effective ON ITS 275TH ANNIVERSARY ers market, and entertainment. Har- vest season is a festive time in Hamp- January 1, 1998. Mr. SMITH of New Hampshire. Mr. You will receive this tax credit in 1999 as ∑ ton Falls, and it seems fitting that the part of your 1998 tax refund OR you may President I rise today to honor the town’s anniversary would be during elect to receive the credit this year through town of Hampton Falls, NH, for cele- this period. lower income tax withholding from your brating its 275th anniversary on No- I congratulate the residents of this paycheck for the period October 1, 1998 to vember 22, 1997. The town is planning beautiful town on 275 years of distin- December 25, 1998. an evening of celebration, commemora- guished history, and wish to extend my To take advantage of the credit to which tion, and entertainment on this most you are entitled for the current tax year, very best wishes of continued prosper- important date. There will be a dinner ity. Happy birthday, Hampton Falls.∑ you should notify your employer of your party, a musical presentation by the election to receive the tax credit in 1998 by f September 1, 1998. Your employer will reduce Winnacunnet High School Chamber the amount of federal income tax withheld Singers, and a historical slide show CAMPAIGN FINANCE IS STILL A during the period from October 1 through De- dedicated to 275 years of history and PRIORITY cember 31, 1995. That notification should heritage. This special night is certain ∑ Mr. CLELAND. Mr. President, I re- also: to include full participation from the cently had the privilege of attending a (1). Confirm that your projected income for town’s proud people. reunion of Carter administration offi- 1998 is Originally, Hampton Falls was part cials in Atlanta. In an interview he in the case of a joint return, less than of the town of Hampton. However, due $110,000 gave to the Atlanta Journal-Constitu- in the case of married couple filing sepa- to its seacoast location, high tides tion, President Carter, whose personal rately, less than $55,000 often prevented those living in the area integrity has never been questioned, in the case of an individual who is not mar- from attending the church. In 1709 the summed up the current state of affairs ried, less than $75,000; and General Assembly of Portsmouth acted very candidly, and all too well. The (2). identify the number of eligible children on this problem and gave the residents President’s comments, which appeared age 16 or less that qualify as your dependent permission to maintain a separate in the October 19, 1997 edition of the under section 151.’’’ church. Nine years later Hampton Journal-Constitution, were as follows: ‘‘(b). The Secretary of the Treasury shall Falls became a separate parish. That transmit to all employers by a separate The intense competition now almost forces mailing made on or before June 1, 1998 the same year the first town meeting was Democrats and Republicans to cut corners following table to assist in determining the held in which selectmen and a town on basic principles of politics in order to changes to federal income tax withholding clerk were elected. raise enormous amounts of soft money. I required by subsection (a) Hampton Falls, however, still re- think it’s an embarrassment to our nation. The amount of income tax withheld per mained a part of Hampton. The towns- It’s a travesty of proper political life. And I paycheck issued during the period October 1, people successfully petitioned for inde- think it debilitates democracy itself in our 1998 to Dec. 25, 1998 is reduced by: country. As (Vice President Mondale) and I pendence from their parent church have agreed, it’s a form of legal bribery. Peo- after the death of the minister from ple can raise hundreds of thousands of dol- No. of eligible children Monthly Biweekly Weekly paycheck paycheck paycheck that town. On November 22, 1722, the lars and contribute that money to can- 1 ...... $133 $66.50 $33.25 town was incorporated as an independ- didates in both parties. They don’t do this 2 ...... 266 133.00 66.50 ent jurisdiction. from a sense of altruism or benevolence or 3 ...... 399 200.00 100.00 generosity. They do it in expectation of ac- 4 ...... 532 266.50 133.25 Hampton Falls can be categorized as the quintessential New England town cess to leaders, to present their point of view For more than 4 children, increase the dollar amount in row 4 by the dol- through its history and scenery. Dur- personally to someone in the Senate or lar amount in row 1 for each child.’’ someone in the White House when the people ing the eighteenth century the local f who might suffer from that sort of decision economy was dominated by mills; saw- don’t have an equal opportunity to present mills, gristmills, and cotton mills dot- their point of view. So it distorts the whole AUTHORITY FOR COMMITTEES TO ted the landscape and provided for a political system and I hope it will be MEET major source of employment. Also, the changed. SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT town served as an important post town At that same Atlanta gathering, AND THE COURTS where horse changes were frequently former Vice President Mondale para- Mr. ROTH. Mr. President, I ask unan- made. At times, up to 125 horses could phrased Abraham Lincoln to the effect imous consent that the Subcommittee be found stabled within this small vi- that, ‘‘With public trust, everything is on Administrative Oversight and the cinity. One of the most significant sta- possible. Without public trust, nothing Courts, of the Senate Judiciary Com- bles in the area was the Wells Inn, is possible.’’ He added, compellingly: mittee, be authorized to meet during which could accommodate 40 horses. ‘‘Public trust cannot be bought. It the session of the Senate on Monday, Today, the stage house is known as the must be earned.’’ November 3, 1997, at 2 p.m. to hold a Wellswood Inn, and provides fine food Indeed, this is an indictment of our hearing in room 226, Senate Dirksen and atmosphere to patrons. On Decem- political system from individuals who Building, on: ‘‘Oversight of the Admin- ber 13, 1774 Paul Revere passed through have reached the pinnacle of success in istrative Procedures and Examination Hampton Falls on his legendary ride that system. I believe the single most of Antislamming Laws.’’ from Boston to Portsmouth proclaim- important step we can take in this The PRESIDING OFFICER. Without ing the arrival of the British. Few Congress in rebuilding public con- objection, it is so ordered. towns can claim a more American ex- fidence and faith in our democracy is S11612 CONGRESSIONAL RECORD — SENATE November 3, 1997 to enact, on a bipartisan basis, mean- tions of H.R. 2646—it would increase flecting his central tenet that designs ingful campaign finance reform to spending by $4 billion over 10 years. It should grow out of a landscape, not be clean up a system which has gotten is both shortsighted and unwise to forced upon it. His designs have been completely out of control and which make major modifications in the Tax sought out by the leading modern ar- undermines both the operation and rep- Code without review by the committee chitects and his unique vision cele- utation of our entire national govern- of jurisdiction and without first asking brated and taught throughout the ment. I think President Carter and a simple question: Are these IRA’s our world. Vice President Mondale would cer- highest priority for educational fund- In addition to his long career as a tainly agree, and I commend their ob- ing? To my way of thinking, that ques- landscape architect, Mr. Kiley served servations to my colleagues.∑ tion has not been addressed. as an Army Captain in World War II. f When this bill was immediately con- He was selected by President Truman sidered under a cloture strategy, all and General Eisenhower to find a site TRIBUTE TO RICHARD LETTS ability to make any changes in this to try the Nazi War criminals, and his ∑ Mr. ABRAHAM. Mr. President, I rise policy were blocked. That is simply un- selection of Nuremberg as the site as today to honor one of Lansing, MI’s acceptable. This legislation should be well as his courtroom design earned most outstanding citizens who recently considered under a less restricted ap- him the Decorated Legion of Merit. passed away, Richard Letts. Because of proach. In keeping with the customary Once again, I rise to honor Mr. his tremendous commitment and in- Senate approach we should conduct a Kiley’s many contributions and accom- volvement in many organizations thorough debate with ample oppor- plishments, far too numerous to list throughout the community, Mr. Letts tunity for amendments. Anything less today. As a Vermonter, and as one of became affectionately known as Mr. should be rejected. the millions of Americans who have en- Lansing. I should also note my absence for the joyed Daniel Kiley’s designs, I extend Mr. Letts’ life, even while fighting a cloture vote on the Defense authoriza- my most heartfelt congratulations on battle against cancer, was a tribute to tion conference report. Cloture was in- his receiving the National Medal of the human spirit. Whether as a cham- voked in an overwhelming vote. Had I Arts, and I wish him many more years pion athlete, a 27-year career as been present, I too would have cast my of continued success.∑ Lansing’s human relations director or vote in favor of cloture. f a community leader in volunteer orga- Mr. President, there are many de- nizations such as Boy Scouts, United mands made on the time of a Senator. CONGRATULATIONS TO MEAGAN Way, Old Newsboys, United Negro Col- Few are as important or as rewarding CORLIN AND ALIA SZOPA lege Fund, Boys and Girls Club, Urban as being a part of the life of our school ∑ Mr. SMITH of New Hampshire. Mr. League, and Lions Club just to name a children. And on last Friday, when pre- President, I rise today to congratulate few, Richard Letts was a dominating sented with a choice between keeping two outstanding youths, Meagan Corlin figure in Lansing’s landscape. Yet even important commitments to Montana and Alia Szopa, who are the 1997 as he struggled with his health, the students or procedural votes in the honorees from New Hampshire for the people of Lansing gave tributes, procla- Senate, I faced a difficult decision. And Prudential Spirit of Community mations, speeches, and parades to a while I take my responsibilities here in Awards. These awards, sponsored by man who so often became the com- Washington very seriously, I decided the Prudential Insurance Co. of Amer- forter, as people came to comfort him. ica in partnership with the National Olivia Letts, Richard’s wife of 46 that I needed to be with these Montana Association of Secondary School Prin- years, has said, ‘‘People don’t change students on this occasion. And in this cipals, honor outstanding, self-initi- who they are when they become ill.’’ particular instance my votes would not ated community service by young peo- Indeed, Mr. Letts refused to quit. His have affected the ultimate outcome of ple in middle and high school grades. message in his life, and our future: either vote.∑ The Prudential Spirit of Community Race should not matter, color should f Awards, the country’s largest youth not matter, all people matter. Richard TRIBUTE TO DANIEL URBAN recognition program based solely on Letts mattered to Lansing and all of KILEY community service, were created in Michigan. The loss of his presence will Mr. JEFFORDS. Mr. President, I rise be mourned, but the mark his life left ∑ 1995 following a nationwide survey of today to pay tribute to Daniel Urban high school students. The survey indi- on Lansing is permanent.∑ Kiley of Charlotte, VT, recipient of a cated that while 95 percent of teen- f 1997 National Medal of Arts. The Na- agers believe community volunteer POSITION ON CLOTURE VOTES ON tional Medal of Arts is our Nation’s work is important, a large proportion H.R. 2646 AND DEFENSE AUTHOR- highest honor in the arts, recognizing don’t know how to get involved and IZATION CONFERENCE REPORT individuals and organizations who have lack role models that could inspire ∑ Mr. BAUCUS. Mr. President, I was made outstanding contributions to the them to seek out volunteer opportuni- not present for the cloture votes on Oc- excellence, growth, support and avail- ties. As a former high school teacher, I tober 31, 1997. I would like to record my ability of the arts in the United States. am well aware of the importance of position, had I been present for the Mr. Kiley is the first landscape archi- empowering students with volunteer votes. tect to be honored with this prestigious opportunities. Had I been present for the cloture award. Meagan and Alia have both created vote on H.R. 2646, the Education Sav- Mr. Kiley, 84, has been called ‘‘the innovative community service pro- ings Act for Public and Private most celebrated landscape architect of grams to serve various needs in their Schools, I would have opposed cloture. this century’’. His many works include respective communities. In addition to the many serious public the setting for Dulles International Meagan Corlin, from Strafford policy implications raised by this legis- Airport, the grounds for the Gateway School in Center Strafford, NH, created lation, as a member of the Senate Fi- Arch in St. Louis, the interior and ex- a reading program called Story-time nance Committee I have serious con- terior landscapes for the East Wing of on the Road to share her love of books cerns about the virtually unprece- the National Gallery of Art, and the with others. She uses her title as Miss dented manner in which it was brought Navy Pier in Chicago. Yet, despite his New Hampshire Pre-Teen to promote to the floor. After H.R. 2646 was ap- work all over the world, Mr. Kiley has her program to day care centers, li- proved by the House it was sent di- stayed in close touch with the people braries, elderly housing facilities, and rectly to the desk, where it was pulled and landscapes of Vermont. His work homeless shelters. Each week, she and from and sent to the floor—completely can be seen at Twin Farms Inn in Bar- several of her schoolmates travel to bypassing the Finance Committee nard, VT, the Lake Champlain Basin these various locations in order to read where virtually all tax legislation is re- Region, and even at my own farm in stories to children or to the elderly. viewed. Shrewsbury. Alia Szopa, from Central High School The lack of review is particularly Daniel Kiley’s works have been lik- in Manchester, NH, created a dance distressing given the budget implica- ened to ‘‘a walk through nature,’’ re- program called Legato for pre-teen November 3, 1997 CONGRESSIONAL RECORD — SENATE S11613 girls with developmental disabilities. incidents caused another $15,000 in subcommittee. It was made by the Her program works in conjunction with losses to the Government. independent, nonpartisan General Ac- the Moore Center, an agency serving The harm resulting from attacks on counting Office. the disabled, to provide training for our national cemeteries, however, is The GAO also found that IG Lau vio- dance instructors who will teach the more than economic loss. Such crimi- lated the standards of ethical conduct. children at the center. One hour each nal activity is an assault on the honor This is because she failed to disclose week, from November to June, Szopa of our veterans, particularly those who her personal and professional relation- and five other instructors teach basic made the supreme sacrifice in defense ship with Mr. Sato. dance to five students. of our Nation. It is an attack on the Today, at the subcommittee’s second School honorees are judged by State heritage and values for which our vet- hearing, we heard more. We learned selection committees, which name the erans fought. Such conduct is uncon- that IG Lau and her staff provided false top middle-level and high school volun- scionable and deserves a strong re- and/or inaccurate testimony to Con- teer in each State. These State-level sponse. gress and congressional investigators. honorees receive a silver medallion, The time has come to demand a stop We learned of the destruction of a doc- $1,000 and a trip to Washington, DC to this type of insulting behavior and ument. The document was destroyed, with a parent or guardian, for several punish it when it occurs. That is why I in my view, as part of a cover-up. It days of national recognition events in introduced S. 813, the Veterans’ Ceme- was to hide the fact that a potentially May. Also, in May, America’s top 10 tery Protection Act of 1997. This bill criminal investigation had been youth volunteers for 1998 are chosen imposes criminal penalties for vandal- launched—without merit—of two from the State-level honorees by a ism and theft at national cemeteries agents of the U.S. Secret Service. It blue-ribbon national selection panel. operated by the VA, the Department of was in retaliation for their testimony These 10 national honorees will be an- Defense, and the Department of Inte- before Congress in the FBI Filegate nounced at a special ceremony at the rior. matter. Again, that is my own judg- National Press Club in Washington, Specifically, this bill authorizes the ment. where they each will receive an addi- U.S. Sentencing Commission to review The IG and her staff, as well as other tional $5,000, a gold medallion and a and amend the Federal sentencing Treasury officials, had told my staff as crystal trophy for his or her school. guidelines to provide an appropriate well as officials of the Secret Service Meagan and Alia have made signifi- sentencing enhancement for any of- that a potentially criminal case had cant contributions to their commu- fense against the property of a national been opened. Then, the IG and her staff nities and to the State of New Hamp- cemetery. denied having told us that, and main- shire. Not only have they served their I am delighted that Senators MCCAIN, tained that such a case was never community selflessly, but they have INHOFE, INOUYE, D’AMATO, and SES- opened. The record now shows that also served as inspirational role models SIONS have joined as cosponsors. I those statements were false: There to other students. Volunteerism thank all Senators for their support on was, in fact, such an investigation of strengthens community life as well as final passage. I particularly appreciate the two agents. enhances the lives of people. I applaud the support from the Senate Commit- Also today, we learned that the IG Meagan and Alia’s dedication and inno- tee on Veterans’ Affairs, the Senate presides over an agency that has be- vation in creating programs to serve Judiciary Committee, the Department come totally demoralized. It’s clearly the needs of citizens in their commu- of Justice, and the U.S. Sentencing because of failed leadership at the top. nity. Without these young leaders, our Commission. I look forward to passage Wrongful and questionable activity can country would be lost. It takes a spe- of this measure by the other body, so be assigned to virtually the entire cial person to make a difference in this bill can be on the President’s desk upper level of the IG’s office. The someone’s life. Meagan and Alia are in- by Veterans Day. troops below are suffering from bad deed special and treasures to their Mr. GRASSLEY. Mr. President, I ask morale. The office of the Treasury IG school, the State of New Hampshire unanimous consent I be permitted to has been severely crippled. and to our country.∑ speak for 12 minutes. The irony in all this is that an in- f The PRESIDING OFFICER. Without spector general’s job is to detect these objection, it is so ordered. very violations in others. An IG is not THE VETERANS’ CEMETERY f supposed to commit them. PROTECTION ACT OF 1997 One of the illegal contracts that the Mr. THURMOND. Mr. President, next THE PERFORMANCE OF TREASURY IG let, grew from $85,000 to $345,000. week, November 11, our Nation will ob- IG VALERIE LAU That’s called contract nourishment. serve Veterans Day. Commemorative Mr. GRASSLEY. Mr. President, I rise There’s not much to show for it. Ex- services will be held throughout the today to inform my colleagues about cept 1,000 rulers, Mr. President. The Nation on that day. I expect services an instance of failed leadership in pro- rulers are 6 inches in length. They’re will be held at Arlington Cemetery and tecting the taxpayers’ money, and in made of flexible plastic. They have the other national cemeteries, where thou- executing the law enforcement func- inspector general’s mission, vision, and sands of war dead are buried. tions of our Government. It’s a story values statement printed on them to As I mentioned in a statement last full of irony, of abuse of power, of a remind employees of who they are and May, prior to Memorial Day, Mr. Presi- breakdown in the people’s trust. what they do. dent, not all activities at our national Last Friday, and again today, hear- Mr. President, I take the amount of cemeteries have honored our Nation’s ings were held by the Governmental rulers purchased—1,000—and divide veterans. There have been, unfortu- Affairs Permanent Subcommittee on that into the cost of the contract— nately, instances of vandalism and Investigations. The chairman of that $345,000—and I come up with a value theft at our national cemeteries. While subcommittee is Senator SUSAN COL- per ruler of $345. many of these incidents are minor, LINS of Maine. The subject was the per- That’s right, Mr. President. The $345 many attacks on national cemeteries formance and conduct of the Treasury ruler. are serious. The Department of Justice Department’s inspector general, Val- Mr. President, this is not the first reports that between January 1, 1995, erie Lau, and her staff. time in my experience that the Govern- and May 31, 1997, there were 21 reports During Friday’s hearing, we learned ment bought ordinary products at ex- of vandalism or crime at national that Ms. Lau personally let two illegal traordinary prices. I recall coming to cemeteries, where the estimated dam- contracts, including one to a long time this floor in 1983. I had with me a small age was over $1,000. The total loss to associate, Mr. Frank Sato. IG Lau vio- steel washer that was a spare part for our national cemeteries from these in- lated procurement laws and regula- an Air Force airplane. The price of that cidents is more than $98,000. In addi- tions in the sole-source procurement of washer was $364. It was worth only tion, more than 56 incidents were re- the two consulting contracts. The judg- about a quarter. ported, with damage less than $1,000, ment that these two contracts were il- The Pentagon, at the time, defended during that same time period. These legal was not made by members of the the cost of the washer. First of all, it S11614 CONGRESSIONAL RECORD — SENATE November 3, 1997 wasn’t just a washer, you see. Why, it rassment for the inspector general, Instead of answering questions, she did was a ‘‘sheer pin spacer.’’ And the $364- who needs to always be beyond re- a soft-shoe routine. For example, when price tag wasn’t really outrageous. proach, for the Secretary of the Treas- GAO found that she let two illegal con- After all, it was precision-molded from ury, and for the President, who nomi- tracts, her response was to call them space-age alloys; extremely light nated this IG. And also the Congress, ‘‘technical violations.’’ That response weight, less than half an ounce; no which confirmed the IG. hardly instills confidence that this IG moving parts; easy-to-handle circular But nothing is more unconscionable should remain in that job. Quite the shape; plus, there was inflation; trans- than what this IG’s office did in per- contrary, it speaks volumes about the portation costs; special packaging; ob- petrating a potentially criminal inves- need for a new IG. solescence; breakage; deterioration; tigation of two dedicated agents of the Mr. President, the Secretary of any pilferage; and so forth. All of these are U.S. Secret Service, in retaliation for Department is required, under the In- costly. So, $364 was an absolute bar- their testimony before two committees spector General Act of 1978, to gen- gain, according to the Pentagon, for a of the U.S. Congress. And after opening erally supervise the IG. I hope that steel washer. Excuse me—a sheer pin such a case, it was denied and covered Treasury Secretary Rubin makes him- spacer. up. As part of the cover-up, an official self familiar with the facts and findings Given my experience with military document was destroyed. of the investigation by the Permanent spare parts, I thought to myself: Now, I have seen similar abuses of power in Subcommittee on Investigations. Were what could possibly be the justification the past, since I arrived in Congress. he to do that, I am confident that he for the Treasury IG first, buying all That’s not what’s new. Bureaucracies would reach the same conclusion I these rulers, and second, buying them do that all the time. That’s why we have—that the IG’s own actions have at $345 per copy? have IG’s. IG’s are supposed to catch undermined her moral authority to Well, let’s look at the first question: those who abuse their power. lead that office. Her ability to continue Why does the IG need all these rulers? What’s new in all this is that the to run that office effectively, and in There are only 300 employees in the of- abuse of authority is by someone in the taxpayers’ interest, has been com- fice. Yet, she bought 1,000. That’s three whom the citizens have vested the pow- promised. rulers for each employee. Perhaps the ers to combat such actions. I have I do not come to this judgment frivo- extra 700 are spare parts. never seen such an abuse of power by a lously. I have been intimately involved Also, Congress recently passed the Federal law enforcement official. in the investigation and circumstances Government Performance and Results The responsibility of employing such of this case for over a year. I worked Act. That act gives Congress the abil- powers is of enormous proportions. The with Chairwoman COLLINS for several ity to measure the performance of Gov- full powers of the IG’s office were di- months, who did an outstanding job on ernment agencies. It does so by requir- rected against the most precious right this investigation, Mr. President. She ing agencies to come up with perform- that exists in this country—the civil and her staff are to be greatly com- ance goals, and then provide us with liberties of two American citizens. It mended for digging out all the facts on data so we can measure their perform- cost these two agents over $26,000 so this case, and laying them in front of ance against their goals. far. Worse, there has been a cloud over the American people. The contract in question provided no them and their families for more than So I feel an obligation to call on the real benefit to the taxpayers. It was in- a year. Treasury IG to step aside so that a new tended to boost morale. But testimony What happens the next time these IG and IG management team can be from witnesses at today’s hearing said agents are in a court of law, or being brought in to reestablish the trust and morale was worse after the study than interviewed for a future job oppor- confidence of the people, and to restore before it. That means, the only real, tunity? Suppose they are asked, ‘‘Have the morale of the many hardworking tangible benefit to the taxpayers out of you ever been the target of a criminal and dedicated employees of that office. this contract were the 1,000 rulers. investigation?’’ How are they supposed There is a tremendous responsibility So I must assume, Mr. President, to answer that question? Technically, that comes with being Treasury IG. that the IG needed these rulers to help they were targeted improperly. But if And we in Congress need to make sure measure performance. Is it possible the it’s a yes-or-no question, they would every effort is made to maintain the IG took the measurement function a have to answer yes. It’s just not fair. public’s confidence in their law en- little too literally? The process of correcting the wrong forcement agencies. That’s why I think If so, that gives new meaning to the that was done began today. The IG, this decision to step aside must be term ‘‘performance measurement.’’ after a year of denials, contradictions, made. Now that might justify why we pur- and wordsmithing, finally apologized I thank the Chair. I yield the floor. I chased the ruler. But it doesn’t justify at this morning’s hearing. It was a year suggest the absence of a quorum. the price tag. overdue. Nonetheless, it was the appro- The PRESIDING OFFICER. The Perhaps I could take a stab at that. I priate thing to do. clerk will call the roll. note that the ruler is lightweight—less I mentioned earlier that this ruler, The bill clerk proceeded to call the than half an ounce. It looks like it purchased as part of one of the illegal roll. could be made of precision-molded contracts, displays the IG’s value Mr. GRASSLEY. Mr. President, I ask space-age teflon. No moving parts. statement. Ironically, the actions of unanimous consent that the order for Flat, streamlined sides for trouble-free upper management in the IG’s office the quorum call be rescinded. underlining. Able to withstand thou- systematically violated almost every The PRESIDING OFFICER. Without sands of whacks on the knuckles. Cus- one of them. objection, it is so ordered. tomized to fit in most standard pock- The value statement reads as follows: ets. It’s a real triumph of 21st century The core values which govern all of our f technological configuration. Then, of employee and organizational actions are course, there’s the packaging costs, the trust, mutual respect, integrity and com- APPOINTMENT BY THE MAJORITY cost of inspection, planning, transpor- petence. These values are demonstrated tation, and so forth. Just like the DOD through qualities such as fairness, honesty, LEADER steel washer. A real bargain, Mr. Presi- cooperation, open communication, shared The PRESIDING OFFICER. The dent. goals, and a commitment to excellence. Chair, on behalf of the majority leader, With that kind of price tag, this IG is Mr. President, in my view, the tax- and in consultation with the Demo- perhaps better off working at the Pen- payers would have got more value out cratic leader, pursuant to Public Law tagon as a contracting officer, rather of this contract had the Treasury IG’s 105–33, announces the appointment of than an IG guarding the public’s Treas- office practiced the values listed on the following Members to the National ury. At least at the Pentagon, a $345 this ruler. It did not. And that reflects Bipartisan Commission on the Future ruler would not be an anomaly. a major leadership void in that office. of Medicare: The Senator from Ne- But seriously, Mr. President, clearly I mentioned earlier that the IG en- braska [Mr. KERREY] and the Senator the aforementioned is a major embar- gaged in the fine art of wordsmithing. from West Virginia [Mr. ROCKEFELLER]. November 3, 1997 CONGRESSIONAL RECORD — SENATE S11615 EXECUTIVE SESSION each, with the following exceptions: conference report, and any additional Senator HATCH for 20 minutes; Senator legislative or executive items that can COVERDELL for 15 minutes; Senator be cleared for action. Therefore, Mem- EXECUTIVE CALENDAR ROBERTS for 20 minutes, and Senator bers can anticipate additional rollcall Mr. GRASSLEY. Mr. President, in DODD for 5 minutes. votes following the 11 a.m. cloture executive session, I ask unanimous The PRESIDING OFFICER. Without vote. consent that the Senate proceed to the objection, it is so ordered. Also, as under the consent, the Sen- following nomination on the Executive Mr. GRASSLEY. Under the provi- ate will recess from 12:30 p.m. to 2:30 Calendar: No. 274. sions of rule XXII, the cloture vote p.m. for the weekly policy luncheons to I also ask unanimous consent that with respect to the Coverdell A-plus meet. the nomination be confirmed, the mo- education accounts bill will occur at 11 As a reminder to all Members then, tion to reconsider be laid upon the a.m. on Tuesday. Following the cloture the first rollcall vote tomorrow will table, any statements relating to the vote, if not invoked, the Senate will occur at 11 a.m. nomination appear in the RECORD at then either seek consent to set the f this point, the President be imme- next cloture vote at 2:30 p.m. on Tues- diately notified of the Senate’s action, day or, if consent cannot be granted, ADJOURNMENT UNTIL 10 A.M. and that the Senate return to legisla- the Senate would recess until 2:30 p.m. TOMORROW tive session. In either case, the cloture vote on the Mr. GRASSLEY. If there is no fur- The PRESIDING OFFICER. Without motion to proceed to fast track will ther business to come before the Sen- objection, it is so ordered. occur at 2:30 p.m. on Tuesday. ate, I now ask unanimous consent that The nomination considered and con- I further ask unanimous consent that the Senate stand in adjournment under firmed is as follows: if the Senate is not previously in re- the previous order. cess, the Senate stand in recess from DEPARTMENT OF STATE There being no objection, the Senate, the hour of 12:30 p.m. to 2:30 p.m. for Curtis Warren Kamman, of the District of at 7 p.m., adjourned until Tuesday, No- Columbia, a Career Member of the Senior the weekly policy luncheons of each vember 4, 1997, at 10 a.m. party to meet. Foreign Service, Class of Career Minister, to f be Ambassador Extraordinary and Pleni- The PRESIDING OFFICER. Without potentiary of the United States of America objection, it is so ordered. NOMINATIONS to the Republic of Colombia. f f Executive nominations received by PROGRAM the Senate November 3, 1997: LEGISLATIVE SESSION Mr. GRASSLEY. In conjunction with DEPARTMENT OF TRANSPORTATION The PRESIDING OFFICER. Under a previous unanimous-consent agree- JOHN CHARLES HORSLEY, OF WASHINGTON, TO BE AS- the previous order, the Senate will re- ment, on Tuesday, the Senate will be SOCIATE DEPUTY SECRETARY OF TRANSPORTATION, VICE MICHAEL HUERTA. turn to legislative session. in a period of morning business from 10 f f a.m. to 11 a.m. At 11 a.m., the Senate will proceed to the cloture vote on H.R. CONFIRMATIONS ORDERS FOR TUESDAY, 2646, the A-plus savings account bill. If NOVEMBER 4, 1997 cloture is not invoked, the Senate will Executive nominations confirmed by Mr. GRASSLEY. Also for our distin- proceed to the cloture vote on the mo- the Senate November 3, 1997: guished leader, I ask unanimous con- tion to proceed to S. 1269, the fast- DEPARTMENT OF STATE sent that when the Senate completes track legislation, at 2:30 p.m. If cloture CURTIS WARREN KAMMAN, OF THE DISTRICT OF CO- LUMBIA, A CAREER MEMBER OF THE SENIOR FOREIGN its business today, it stand in adjourn- is invoked on the motion to proceed to SERVICE, CLASS OF CAREER MINISTER, TO BE AMBAS- ment until the hour of 10 a.m. on Tues- the fast-track legislation, the Senate SADOR EXTRAORDINARY AND PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA TO THE REPUBLIC OF day, November 4. I further ask that on will be in debate on the motion to pro- COLOMBIA. Tuesday, immediately following the ceed to S. 1269. DEPARTMENT OF THE TREASURY prayer, the routine requests through In addition, the Senate may also con- CHARLES ROSSOTTI, OF THE DISTRICT OF COLUMBIA, the morning hour be granted, and that sider and complete action on the D.C. TO BE COMMISSIONER OF INTERNAL REVENUE. there then be a period of morning busi- appropriations bill, the Food and Drug THE ABOVE NOMINATIONS WERE APPROVED SUBJECT ness until 11 a.m., with Senators per- Administration reform conference re- TO THE NOMINEES’ COMMITMENT TO RESPOND TO RE- QUESTS TO APPEAR AND TESTIFY BEFORE ANY DULY mitted to speak for up to 5 minutes port, the intelligence authorization CONSTITUTED COMMITTEE OF THE SENATE. November 3, 1997 CONGRESSIONAL RECORD — Extensions of Remarks E2167 EXTENSIONS OF REMARKS

SENATE COMMITTEE MEETINGS ommendations of the IRS Restructur- and to consider other pending calendar ing Commission. business. Title IV of Senate Resolution 4, SD–215 SD–406 agreed to by the Senate on February 4, Foreign Relations Select on Intelligence 1977, calls for establishment of a sys- To hold hearings to examine how the To hold hearings to examine prolifera- tem for a computerized schedule of all American public views NATO enlarge- tion issues. meetings and hearings of Senate com- ment. SD–106 mittees, subcommittees, joint commit- SD–419 10:00 a.m. tees, and committees of conference. Governmental Affairs Foreign Relations Business meeting, to consider pending To hold hearings to examine commercial This title requires all such committees calendar business. to notify the Office of the Senate Daily activities of China’s People’s Libera- SD–342 tion Army (PLA). Digest—designated by the Rules Com- Judiciary SD–419 mittee—of the time, place, and purpose Immigration Subcommittee Judiciary of the meetings, when scheduled, and To hold hearings on proposed legislation Business meeting, to consider the nomi- any cancellations or changes in the on the impact of section 110 of the 1996 nation of Bill Lann Lee, of California, meetings as they occur. Immigration Act on land borders of the to be Assistant Attorney General for United States. As an additional procedure along the Civil Rights Division, Department SD–562 of Justice. with the computerization of this infor- Judiciary mation, the Office of the Senate Daily SD–226 Youth Violence Subcommittee 12:00 p.m. Digest will prepare this information for To hold hearings to examine Federal ef- Governmental Affairs printing in the Extensions of Remarks forts to prevent juvenile crime. Oversight of Government Management, Re- section of the CONGRESSIONAL RECORD SD–226 structuring and the District of Colum- on Monday and Wednesday of each 2:00 p.m. bia Subcommittee week. Finance To hold hearings to examine the social Health Care Subcommittee impact of music violence. Meetings scheduled for Tuesday, No- To hold hearings on S. 249, to require vember 4, 1997, may be found in the SD–342 that health plans provide coverage for 2:00 p.m. Daily Digest of today’s RECORD. a minimum hospital stay for Judiciary mastectomies and lymph node dissec- MEETINGS SCHEDULED To hold hearings on the nominations of tion for the treatment of breast cancer, Robert S. Warshaw, of New York, to be coverage for reconstructive surgery fol- Associate Director, and Thomas J. NOVEMBER 5 lowing mastectomies, and coverage for Umberg, of California, to be Deputy Di- 9:30 a.m. secondary consultations. rector for Supply Reduction, both of Banking, Housing, and Urban Affairs SD–215 the Office of National Drug Control Financial Institutions and Regulatory Re- Judiciary Policy. lief Subcommittee To hold hearings on the nomination of SD–226 To hold hearings to examine the presence Seth Waxman, of the District of Co- 2:30 p.m. of foreign governments and companies, lumbia, to be Solicitor General of the Select on Intelligence particularly in China, in U.S. securities United States, Department of Justice. To hold closed hearings on intelligence and banking sectors, and on S. 1315, to SD–226 matters. establish an Office of National Security Judiciary SH–219 within the Securities and Exchange Technology, Terrorism, and Government Commission, provide for the monitor- Information Subcommittee NOVEMBER 7 ing of the extent of foreign involve- Closed briefing on the ‘‘eligible receiver’’ ment in United States securities mar- exercise. 9:30 a.m. kets, financial institutions, and pen- SH–217 Joint Economic sion funds. 3:00 p.m. To hold hearings to examine the employ- SD–538 Judiciary ment-unemployment situation for Oc- Commerce, Science, and Transportation Technology, Terrorism, and Government tober. To hold hearings to examine the environ- Information Subcommittee 1334 Longworth Building mental consequences of global warm- To hold hearings to examine the report ing scenarios. of the President’s Commission on Criti- SR–253 cal Infrastructure Protection. CANCELLATIONS Rules and Administration SD–226 Business meeting, to consider pending NOVEMBER 4 administrative matters. NOVEMBER 6 SR–301 9:30 a.m. 2:00 p.m. 10:00 a.m. Budget Budget Environment and Public Works To hold hearings to examine Federal pre- To hold hearings to examine options for Transportation and Infrastructure Sub- kindergarten through grade twelve funding social security benefits in the committee education programs. 21st century. To hold hearings to examine the General SD–608 SD–608 Services Administration proposal to Environment and Public Works construct or otherwise acquire a facil- Business meeting, to mark up H.R. 1787, NOVEMBER 5 ity to house the headquarters of the to assist in the conservation of Asian 9:30 a.m. Department of Transportation. elephants by supporting and providing Indian Affairs SD–406 financial resources for the conserva- To hold oversight hearings on proposals Finance tion programs of nations within the to extend compacting to agencies of To hold hearings on proposed legislation range of Asian elephants an projects of the Department of Health and Human to restructure the Internal Revenue person with demonstrated expertise in Services. Service (IRS), and to examine the rec- the conservation of Asian elephants, SR–485

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. Monday, November 3, 1997 Daily Digest

HIGHLIGHTS See Re´sume´ of Congressional Activity. Senate confirmed Charles Rossotti to be IRS Commissioner. Senate of Columbia, to be Commissioner of Internal Reve- Chamber Action nue. Pages S11584±87, S11591±97, S11615 Routine Proceedings, pages S11577–S11615 Curtis Warren Kamman, of the District of Co- Measures Introduced: One bill and one resolution lumbia, to be Ambassador to the Republic of Co- were introduced, as follows: S. 1358 and S. Res. lombia. Page S11615 142. Page S11599 Nominations Received: Senate received the follow- Measures Reported: Reports were made as follows: ing nominations: S. 538, to authorize the Secretary of the Interior John Charles Horsley, of Washington, to be Asso- to convey certain facilities of the Minidoka project ciate Deputy Secretary of Transportation. Page S11615 to the Burley Irrigation District, with an amend- Messages From the President: Pages S11598±99 ment in the nature of a substitute. (S. Rept. No. Messages From the House: Page S11599 105–131) Page S11599 Measures Placed on Calendar: Page S11599 Appointments: Statement on a Submitted Resolution: National Bipartisan Commission on the Future Pages S11599±S11601 of Medicare: The Chair, on behalf of the Majority Additional Cosponsors: Page S11599 Leader, and in consultation with the Democratic Leader, pursuant to Public Law 105–33, announced Amendments Submitted: Pages S11601±11 the appointed of the following members of the Na- Authority for Committees: Page S11611 tional Bipartisan Commission on the Future of Med- Additional Statements: Pages S11611±13 icare: Senators Kerrey and Rockefeller. Page S11614 Record Votes: One record vote was taken today. Messages From the President: Senate received the (Total–290) Page S11597 following messages from the President of the United States: Adjournment: Senate convened at 12 Noon, and Transmitting the report of the cancellation of dis- adjourned at 7 p.m., until 10 a.m., on Tuesday, No- cretionary budget authority (97–72) received on No- vember 4, 1997. (For Senate’s program, see the re- vember 1, 1997; which was referred jointly, pursuant marks of the Acting Majority Leader in today’s to P.L. 93–344, to the Committee on Appropriations Record on page S11615.) and to the Committee on the Budget. (PM–77). Page S11598 Committee Meetings Transmitting the report of the cancellation of dis- cretionary budget authority (97–65) received on No- (Committees not listed did not meet) vember 1, 1997; which was referred jointly, pursuant POSTMASTER GENERAL REPORT to P.L. 93–344, to the Committee on Appropriations Committee on Governmental Affairs: Subcommittee on and to the Committee on the Budget. (PM–78). International Security, Proliferation, and Federal Pages S11598±99 Services concluded hearings to examine the current Nominations Confirmed: Senate confirmed the fol- state of the United States Postal Service, focusing on lowing nominations: By unanimous vote of 92 yeas proposed increases in postage rates, after receiving (Vote No. 290 EX), Charles Rossotti, of the District testimony from Marvin Runyon, Postmaster General D1196 November 3, 1997 CONGRESSIONAL RECORD — DAILY DIGEST D1197 and Chief Executive Officer, United States Postal ings to examine issues with regard to telephone Service. slamming which is the unauthorized switching of a TREASURY DEPARTMENT: INSPECTOR consumer’s phone carrier without their authorization, GENERAL’S OFFICE after receiving testimony from Robert W. Spangler, Acting Chief, Enforcement Division, Common Car- Committee on Governmental Affairs: Permanent Sub- committee on Investigations concluded hearings to rier Bureau, Federal Communications Commission; review activities of the Department of the Treasury’s William H. Smith, Jr., Iowa Utilities Board, Office of the Inspector General, focusing on the Of- Ankeny; Geryl Kramer, Kramer Associates, Inc., fice of Inspector General’s involvement in the initi- Chicago, Illinois; and Linda F. Golodner, National ation and management of an investigation involving Consumers League, Wayne Huyard, MCI Commu- certain Secret Service officials regarding their 1996 nications Corporation, Susan R. Lichtenstein, testimony before the House Committee on Govern- Ameritech, and James M. Smith, Excel Communica- ment Reform and Oversight on the process by which tions, Inc., all of Washington, D.C. the White House access list is maintained and up- dated, after receiving testimony from Richard J. INDIAN JUDGMENT FUNDS Gallo, Senior Special Agent, Office of Inspector Gen- Committee on Indian Affairs: Committee concluded eral, Department of Agriculture, on behalf of the hearings on the provisions of H.R. 1604, to provide Federal Law Enforcement Officers Association; and for the division, use, and distribution of judgment Valerie Lau, Inspector General, James M. Cottos, funds of the Ottawa and Chippewa Indians of Michi- Senior Technical Advisor to the Inspector General, gan, after receiving testimony from Representative and Emily P. Coleman, Regional Inspector General Kildee; Michael J. Anderson, Deputy Assistant Sec- for Investigations (Eastern Region), all of the De- retary of the Interior for Indian Affairs; and Arthur partment of the Treasury. L. LeBlanc, Bay Mills Indian Community, Brimley, TELEPHONE SLAMMING Michigan. Committee on the Judiciary: Subcommittee on Admin- istrative Oversight and the Courts concluded hear- h House of Representatives Committee on Commerce, Science, and Transportation, busi- Chamber Action ness meeting, to consider pending calendar business, 9:30 The House was not in session today. It will next a.m., SR–253. meet on Tuesday, November 4. Subcommittee on Science, Technology, and Space, to hold hearings to examine the necessity of Federal involve- ment in the Next Generation Internet, 2:30 p.m., Committee Meetings SR–253. Committee on Energy and Natural Resources, to hold hear- No Committee meetings were held. ings on the nominations of Curt Herbert Jr., of Mis- f sissippi, and Linda Key Breathitt, of Kentucky, each to be a Member of the Federal Energy Regulatory Commis- COMMITTEE MEETINGS FOR TUESDAY, sion, Department of Energy, 10 a.m., SD–366. NOVEMBER 4, 1997 Committee on Environment and Public Works, Subcommit- tee on Transportation and Infrastructure, to hold hearings (Committee meetings are open unless otherwise indicated) to examine the status of Federal transportation programs in the absence of a multi-year reauthorization, 9:30 a.m., Senate SD–406. Committee on Banking, Housing, and Urban Affairs, Sub- Full Committee, to hold hearings on S. 627, authoriz- committee on Financial Services and Technology, to hold ing funds for programs of the African Elephant Conserva- hearings on mandating disclosure of Year 2000 problem tion Act, and S. 1287, to assist in the conservation of compliance by publicly traded companies, 10 a.m., Asian elephants by supporting and providing financial re- SD–538. sources for the conservation programs of nations within Full Committee, business meeting, to consider pending the range of Asian elephants and projects of persons with nominations, 11 a.m., SD–538. D1198 CONGRESSIONAL RECORD — DAILY DIGEST November 3, 1997 demonstrated expertise in the conservation of Asian ele- Committee on National Security, Subcommittee on Mili- phants, 2 p.m., SD–406. tary Research and Development, hearing on Federal re- Committee on Foreign Relations, business meeting, to sponse to domestic terrorism involving weapons of mass mark up S. 759, to provide for an annual report to Con- destruction—status of Department of Defense support gress concerning diplomatic immunity, S. Con. Res. 48, program, 10 a.m., 2118 Rayburn. expressing the sense of the Congress regarding prolifera- Committee on Resources, Subcommittee on Forests and tion of missile technology from Russia to Iran, and S. Forest Health, to markup the following bills: H.R. 1659, Con. Res. 58, expressing the concern of Congress over Mount St. Helens National Volcanic Monument Comple- Russia’s newly passed religion law, and to consider pend- tion Act; H.R. 2416, provide for the transfer of certain ing nominations, 2:15 p.m., S–116, Capitol. rights and property to the United States Forest Service in Committee on Governmental Affairs, to hold hearings on exchange for a payment to the occupant of such property; the nominations of Ernesta Ballard, of Alaska, to be a and H.R. 2574, to consolidate certain mineral interest in Governor of the United States Postal Service, Dale the National grasslands in Billings County, ND, through Cabaniss, of Virginia, to be a Member of the Federal the exchange of Federal and private mineral interest to Labor Relations Authority, and Susanne T. Marshall, of enhance land management capabilities and environmental Virginia, to be a Member of the Merit Systems Protection and wildlife protection, 2 p.m., 1334 Longworth. Board, 9 a.m., SD–342. Committee on Rules, to consider the following: H.R. Committee on the Judiciary, to hold hearings to examine 2676, Internal Revenue Service Restructuring and Reform competition, innovation, and public policy in the digital Act of 1997; H. Res. 188, urging the executive branch age, 10 a.m., SH–216. to take action regarding the acquisition by Iran of C–802 Committee on Indian Affairs, business meeting, to mark Cruise missiles; H.R. 967, to prohibit the use of United up H.R. 976, to provide for the disposition of certain States funds to provide for the participation of certain funds appropriated to pay judgment in favor of the Mis- Chinese officials in international conferences, programs, sissippi Sioux Indians, and to consider the nomination of and activities and to provide that certain Chinese officials Kevin Gover, of New Mexico, to be Assistant Secretary shall be ineligible to receive visas and be excluded from of the Interior for Indian Affairs, 9:15 a.m., SR–485. admission to the United States; H.R. 2195, Laogai Slave Committee on Veterans’ Affairs, business meeting, to con- Labor Products Act of 1997; H.R. 2232, Radio Free Asia sider pending calendar business, time and room to be an- Act of 1997; H.R. 2358, Political Freedom in China Act nounced. of 1997; H.R. 2386, U.S.-Taiwan Anti-Ballistic Missile NOTICE Defense Cooperation Act; H.R. 2570, Forced Abortion Condemnation Act; H.R. 2605, Communist China Sub- For a listing of Senate committee meetings sched- sidy Reduction Act of 1997; and H.R. 2647, to ensure uled ahead, see page E2167 in today’s Record. that commercial activities of the People’s Liberation Army of China or any Communist Chinese military com- House pany in the U.S. are monitored and are subject to the au- Committee on Banking and Financial Services, hearing on thorities under the International Emergency Economic the Millennium Bug: Banking and the Year 2000 com- Powers Act, 2 p.m.; and to hold a hearing on H. Res. puter problem, 2:45 p.m., 2128 Rayburn. 298, amending the Rules of the House of Representatives Committee on Commerce, Subcommittee on Oversight and to repeal the rule allowing subpoenaed witnesses to Investigations, hearing on the Federal-State Relationship: choose not to be photographed at committee hearings, 6 A Look into EPA Regulatory Reinvention Efforts, 1 p.m., p.m., H–313 Capitol. 2322 Rayburn. Committee on Science, Subcommittee on Technology, Committee on Government Reform and Oversight, Sub- hearing on The Global Dimensions of the Millennium committee on Human Resources, oversight hearing on Bug, 9:30 a.m., 2318 Rayburn. Privatization of Child Support Enforcement Services, 2 Committee on Ways and Means, Subcommittee on Trade, p.m., 2247 Rayburn. oversight hearing on the Future of United States-China Subcommittee on the Postal Service, hearing on Im- Trade Relations and the possible Accession of China to proving Labor Management Relations in the Postal Serv- the World Trade Organization, 10 a.m., 1100 Long- ice, 10 a.m., 2154 Rayburn. worth. November 3, 1997 CONGRESSIONAL RECORD—DAILY DIGEST D1199

Re´sume´ of Congressional Activity

FIRST SESSION OF THE ONE HUNDRED FIFTH CONGRESS The first table gives a comprehensive re´sume´ of all legislative business transacted by the Senate and House. The second table accounts for all nominations submitted to the Senate by the President for Senate confirmation.

DATA ON LEGISLATIVE ACTIVITY DISPOSITION OF EXECUTIVE NOMINATIONS January 7 through October 31, 1997 January 7 through October 31, 1997

Senate House Total Civilian nominations, totaling 474, disposed of as follows: Days in session ...... 143 124 . . Confirmed ...... 235 Time in session ...... 1020 hrs., 12′ 912 hrs., 56′ . . Unconfirmed ...... 229 Congressional Record: Withdrawn ...... 10 Pages of proceedings ...... 11575 9866 . . Extensions of Remarks ...... 2165 . . Public bills enacted into law ...... 14 53 67 Civilian nominations (FS, PHS, CG, NOAA), totaling 3,092, disposed Private bills enacted into law ...... 1 1 2 of as follows: Bills in conference ...... 3 5 8 Confirmed ...... 2,284 Measures passed, total ...... 258 410 668 Unconfirmed ...... 808 Senate bills ...... 74 20 . . House bills ...... 60 188 . . Senate joint resolutions ...... 4 2 . . Air Force nominations, totaling 8,120, disposed of as follows: House joint resolutions ...... 8 10 . . Confirmed ...... 8,113 Senate concurrent resolutions ...... 18 8 . . Unconfirmed ...... 7 House concurrent resolutions ...... 18 37 . . Simple resolutions ...... 76 145 . . Measures reported, total ...... 200 346 546 Army nominations, totaling 6,245, disposed of as follows: Senate bills ...... 131 4 . . Confirmed ...... 6,220 House bills ...... 15 231 . . Unconfirmed ...... 25 Senate joint resolutions ...... 2 1 . . House joint resolutions ...... 2 9 . . Senate concurrent resolutions ...... 11 . . . . Navy nominations, totaling 6,157, disposed of as follows: House concurrent resolutions ...... 2 9 . . Confirmed ...... 4,847 Simple resolutions ...... 37 92 . . Unconfirmed ...... 1,310 Special reports ...... 20 11 . . Conference reports ...... 15 . . Measures pending on calendar ...... 111 61 . . Marine Corps nominations, totaling 1,679, disposed of as follows: Measures introduced, total ...... 1594 3375 4969 Confirmed ...... 1,679 Bills ...... 1357 2794 . . Unconfirmed ...... 0 Joint resolutions ...... 37 98 . . Concurrent resolutions ...... 59 183 . . Simple resolutions ...... 141 300 . . Summary Quorum calls ...... 6 6 . . Yea-and-nay votes ...... 289 238 . . Total nominations received this session ...... 25,767 Recorded votes ...... 323 . . Total confirmed ...... 23,378 Bills vetoed ...... 2 . . Total unconfirmed ...... 2,379 Vetoes overridden ...... Total withdrawn ...... 10

* These figures include all measures reported, even if there was no accom- panying report. A total of 130 reports have been filed in the Senate, a total of 372 reports have been filed in the House. D1200 CONGRESSIONAL RECORD — DAILY DIGEST November 3, 1997

Next Meeting of the SENATE 6. H.J. Res. 92, Alabama-Coosa-Tallapoosa river basin 10 a.m., Tuesday, November 4 Compact; 7. H.R. 1702, Commercial Space Act; and 8. H.R. 1839, National Salvage Motor Vehicle Senate Chamber Consumer Protection Act of 1997; 9. H.R. 1836, Federal Employees Health Care Protec- Program for Tuesday: After the recognition of four Sen- tion Act of 1997; ators for speeches and the transaction of any morning 10. H.R. 2675, Federal Employees Life Insurance Im- business (not to extend beyond 11 a.m.), Senate will vote on a motion to close further debate on H.R. 2646, Edu- provement Act; cation Savings Act For Public and Private Schools, and 11. H.R. 404, transfer to State and local governments vote on a motion to close further debate on the motion certain surplus property for use for law enforcement or to proceed to S. 1269, Reciprocal Trade Agreement Act. public safety purposes; 12. H.R. 1856, Volunteers for Wildlife Act of 1997; (Senate will recess from 12:30 p.m. until 2:30 p.m. for re- 13. H.R. 434, Carson National Forest and the Santa Fe spective party conferences.) National Forest Land Conveyance; 14. S. 587, Hinsdale County, Colorado Land Exchange; 15. S. 588, providing for the expansion of the Eagles Next Meeting of the HOUSE OF REPRESENTATIVES Nest Wilderness; 10:30 a.m., Tuesday, November 4 16. S. 589, providing for a Boundary Adjustment and Land Conveyance Involving the Raggeds Wilderness; 17. S. 591, Transferring the Dillon Ranger District in House Chamber the Arapaho National Forest to the White River National Program for Tuesday: Consideration of 20 Suspensions: Forest; 1. H.R. 2644, United States-Caribbean Trade Partner- 18. H.R. 1604, Providing for the Division, Use, and ship Act; Distribution of Judgment Funds of the Ottawa and Chip- 2. H.R. 1967, to provide that the distribution before pewa Indians; January 1, 1978, of a phonorecord shall not for any pur- 19. H.R. 948, Burt Lake Band of Ottawa and Chip- pose constitute a publication of the musical work; pewa Indians Act; and 3. H.R. 2265, No Electronic Theft Act; 20. S. 931, Marjory Stoneman Douglas Wilderness and 4. H.R. 1493, to require the Attorney General to es- Ernest F. Coe Visitor Center Designation Act; and tablish a program in local prisons to identify, prior to ar- Consideration of H.R. 2746, HELP Scholarships Act raignment, criminal aliens and aliens who are unlawfully (closed rule, 2 hours of general debate); and present in the United States; Consideration of H.R. 2616, Charter Schools Amend- 5. H.J. Res. 91, Apalachicola-Chattahoochee-Flat River ments Act (open rule, 1 hour of general debate). Basin Compact; NOTE: No recorded votes are expected before 5:00 p.m.

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