E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 108 CONGRESS, FIRST SESSION

Vol. 149 WASHINGTON, WEDNESDAY, MAY 14, 2003 No. 72 Senate The Senate met at 9:15 a.m. and was God, let us remember that You are addresses and interaction with their called to order by the President pro the author and finisher of our faith. constituents, so we will not be in on tempore [Mr. STEVENS]. Let us also remember You are our Fa- Saturday, but we will likely be voting The PRESIDENT pro tempore. This ther, and You have the last word. late into Friday. I urge them to make morning the Senate will be led in pray- Amen. appropriate arrangements but to be er by a great personal friend and father f here Friday. We will clearly be voting of one of my staff on the Appropria- through tomorrow as well. tions Committee. I present to the Sen- PLEDGE OF ALLEGIANCE Mr. President, I made a few state- ate Pastor James C. Hayes of the Lily The PRESIDENT pro tempore led the ments yesterday on the fact that this of the Valley Church of God in Christ Pledge of Allegiance, as follows: HIV/AIDS bill will be addressed this of Fairbanks, AK. He is a three-time I pledge allegiance to the Flag of the week. The focus today and much of to- former mayor of Fairbanks. United States of America, and to the Repub- morrow will be on the jobs and eco- lic for which it stands, one Nation under PRAYER nomic growth package. I hope we can God, indivisible, with liberty and justice for go to the HIV/AIDS bill tomorrow The guest Chaplain offered the fol- all. afternoon. This virus, HIV/AIDS, casts lowing prayer: f a shadow of death that reaches across Oh, gracious and eternal God who oceans; it knows no borders, and it is rules Heaven and Earth and has been RECOGNITION OF THE MAJORITY sweeping across continents. It goes to with all of us from the very beginning LEADER remote villages and countries all of time, You have never left us. As you The PRESIDING OFFICER (Mr. stated in Your word, ‘‘Lo I am with you across the globe. It has killed 23 mil- BROWNBACK). The majority leader is lion people, and 42 million people are always even unto the end of the world’’ recognized. (Matthew 28:20). We thank You. We living with this virus. Of those 42 mil- also thank You for America, the great- f lion people, most don’t know they have the virus. Another 60 million people est Nation founded upon the belief ‘‘In SCHEDULE God we trust.’’ will likely die of HIV/AIDS by 2020. God, I pray no prayer that You have Mr. FRIST. Mr. President, this morn- We have an opportunity to reverse not heard before. I speak no words that ing the Senate will begin consideration this moral, this humanitarian tragedy. have never been uttered. Ezekiel 22:30 of the jobs and economic growth pack- The work has been done by the House says, ‘‘And I sought for a man among age which was reported by the Finance of Representatives, by the President of them that should make up the hedge, Committee. Under the agreement the United States, and now it is up to and stand in the gap before me for the reached yesterday, there are 14 hours this body. As I have mentioned before, land, that I should not destroy it; but remaining for consideration of the bill. history will judge whether America has I found none.’’ God, as Your servant, I I again ask that all Senators who in- led in the fight against HIV/AIDS, stand in the gap and pray an interces- tend to offer amendments contact the which has caused the greatest destruc- sory prayer of faith, hope, and love. I chairman and ranking member of the tion in human life in recorded history, pray for these men and women who are committee to facilitate their struc- and whether we stood up in a timely elected to serve Your people in the U.S. turing of consideration of this bill for fashion and performed heroic rescues. Senate as they deliberate and make today and tomorrow morning. President Bush opened the door to that tough and sometimes unpopular deci- As I indicated last night in closing, I possibility, the House acted, and we sions that affect all of us who live in expect a very busy day today and, in- will act this week to pass legislation the land of the free. I Timothy 2:1–2 deed, a busy day tomorrow and on Fri- and get this program established with- says, ‘‘I exhort, therefore, that first of day. We will have a busy day and likely out further delay. all, supplications, prayers, interces- a busy night tonight as we address this f sions, and giving of thanks be made for important jobs and economic growth all men; for kings and for all that are package. RECOGNITION OF THE ACTING in authority, that we may lead a quiet When we complete this measure to- MINORITY LEADER and peaceful life in all godliness and morrow, we will proceed directly to the The PRESIDING OFFICER. The Sen- honesty.’’ I pray that You empower bipartisan global HIV/AIDS bill. The ator from Nevada is recognized. each Member with Your vision and Senate will complete both of these im- Mr. REID. We have two of the most courage as they seek to continue mak- portant issues this week. A number of experienced managers in the Senate ing this Nation the greatest nation on Senators do have engagements planned working on this bill, Senators GRASS- Earth. Saturday, a number of commencement LEY and BAUCUS. The rules of this tax

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

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VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00001 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6148 CONGRESSIONAL RECORD — SENATE May 14, 2003 debate are not the ordinary rules of the the two leaders who will be managing through this bill, make a difference in Senate. They are unique in this piece this bill. I want to reiterate what the the lives of each and every one of our of legislation. So we need to make sure assistant leader said. constituents. Our constituents want to that Members understand that, and The legislation that we will be dis- feel good again about the economy. that those who have amendments, as cussing—and, ultimately, I believe will They want to be able to find a job or the majority leader has indicated, give pass—will clearly lower tax burdens, get a better job. They want to be able the managers some indication as to increase jobs, and expand and grow the to grow their businesses, most of which when they will be ready. We don’t have economy in the short term, midterm, are small businesses, as we all know. the luxury, as we have on a lot of and in the long term. That is an objec- They want a fighting chance to grab a pieces of legislation, to just wait tive I think both sides of the aisle piece of that American dream. around until they show up. With some share—expansion of the economy. With In closing, I urge my colleagues to exceptions, the time runs all the that, you have job creation and an in- move this jobs and growth package time—with the exception, of course, if crease in savings and investment. through the Senate quickly over the there are rollcall votes. The House has done its work on the course of today. We can complete our I ask that all Members understand bill, and now it is time for the Senate job in this body in preparation for a that the rules of this debate are dif- to do the same, to send a very clear final vote in the conference committee ferent than others. If we are going to message to the American people that before we leave for the Memorial Day complete all of the work people want— we are serious as a body, as an institu- recess. In the form that is created over we have a significant number of tion, as a Government, as the Congress, the next really 24 to 36 hours, building amendments on this side that people about creating jobs. When you say cre- upon the very solid package put forth want to offer, and they may not be able ating jobs, you are really saying to by the Finance Committee, we will be to offer them. If the majority wants to give job security to the people who able to create jobs and we will be able take time on our amendments, they have jobs, and also to those people to put Americans to work. can do that, of course. across America who don’t have jobs but I yield the floor. This is also one of those times when who want jobs and are willing to work, The PRESIDING OFFICER. Who we have the ability to enter into de- to have that opportunity. yields time? bate and have amendments voted on. Growing the economy is sort of a sur- The Senator from Iowa. rogate of what we say because if you We are going to have this trimmed Mr. GRASSLEY. Mr. President, I look at the economy and you make down as much as we can on our side, yield myself such time as I might con- that pie larger and larger, in truth, you but we have a lot of amendments. Vot- sume. are creating jobs and growing our gross ing alone on this bill could take several The PRESIDING OFFICER. The Sen- domestic product in a way that is con- hours. So I hope everybody will cooper- ator from Iowa is recognized. ate with Senators GRASSLEY and BAU- sistent with the increased productivity of individuals that has occurred over Mr. GRASSLEY. Mr. President, we CUS and help us move this important are in a position where there is a lot of piece of legislation. the last 15, 20 years. A lot of people ask how much. It is anxiety about the economy. That anx- f hard to give an exact number. We all iety probably started back in March of 2000, when we first saw a downturn in RESERVATION OF LEADER TIME look for those exact numbers. How much will the Senate Finance Com- the manufacturing index, and the man- The PRESIDING OFFICER. Under mittee jobs and tax package grow the ufacturing index has been in a down- the previous order, leadership time is economy? We make references to other turn for 33 months, at least as far as it reserved. proposals, and the other side of the relates to employment. f aisle put a package on the table and There is anxiety that the economy quantified it. The President’s proposal might go back to mid-2000 and later in JOBS AND GROWTH TAX RELIEF 2000 when Nasdaq lost half its value. RECONCILIATION ACT OF 2003 has been quantified, and those numbers have been used. People are asking: Then September 11 happened. There is The PRESIDING OFFICER. Under What about the package that passed anxiety about the war on terrorism, re- the previous order, the Senate will pro- out of the Finance Committee last inforced by the murder of Americans in ceed to the consideration of Calendar night? How many jobs will it create? Saudi Arabia yesterday. There is anx- No. 97, S. 1054. The clerk will state the The Heritage Foundation’s Center for iety about the economy because of the bill by title. Data Analysis specifically studied the war in Iraq and the war in Afghanistan. The legislative clerk read as follows: Senate Finance bill, and the results As far as war and foreign relations are A bill (S. 1054) to provide for reconciliation paint a very clear picture of growth— concerned, there is not a lot we in Con- pursuant to section 201 of the concurrent res- growing the economy. The study shows gress can do about it because people ex- olution on the budget for fiscal year 2004. that the Finance Committee package pect us to fight a war against terror- The PRESIDING OFFICER. Under will raise the economy’s growth rate in ists. They expect us to make sure that the previous order, there are 14 hours 2004 from 3.3 to 3.6 percent. That six- bases for terrorism training against of debate on the measure to be equally tenths of 1 percent may not seem to be American citizens are not maintained divided. much, but what it does do is translate by protection of foreign countries, such The Senator from Iowa is recognized. into an additional 437,000 jobs in 1 year, as Afghanistan. Mr. GRASSLEY. Mr. President, I in 2004 alone, and an increase in gross Americans expect us to not allow a yield to our majority leader whatever domestic product that year of more nation such as Iraq, where there has time he might consume. than $42 billion. been a great deal of evidence of the ex- The PRESIDING OFFICER. The ma- I want to remind my colleagues that istence of weapons of mass destruction jority leader is recognized. outside of the White House, the Senate that could be used against American Mr. FRIST. Mr. President, we are is perhaps the only place in Wash- citizens, to continue to exist, or a na- now on the jobs and economic growth ington where one person literally can tion such as Iraq that supports ter- package. By statute, the clock is run- make the difference. We have seen that rorist organizations such as Hezbollah ning and we will have a very healthy play out in many of the votes thus far or Hamas, to create greater turmoil in and productive debate in the next 14 this year in our very closely divided the Middle East, threatening the oil hours, as the assistant minority leader Senate. One vote makes a difference. supply coming to the United States said. So I say to each of my colleagues, which will affect our economy. There is It is critically important that we do please remember that the people back not much we can do about that, but the this in a disciplined and organized way. you, and how you participate in this American people expect us to do what The rules are different than on the debate and in growing the economy is we can. usual debate. They are very clear. important to our constituents—con- Also, there are some actions we can What it means is that we need to have stituents in your State but indeed peo- take domestically that deal with the participation as early as possible with ple all across the country. We will, anxiety about the economy, whether it

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00002 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6149 is related to the downturn of the do- investment incentives that will provide proving this bill. So in just a few mestic economy or whether that down- short-term stimulus and provide the weeks, eligible families will receive a turn is related to our international re- building blocks for meaningful future check from the Treasury of up to $400 lations, our international responsibil- economic growth. per child. ities, or the protection of American There is wide support for the provi- Why $400 per child? Because pres- citizens. sions that accelerate the child tax ently the child credit is $600 and it What we are doing today is respond- credit, the marriage penalty relief, ex- would not reach $1,000 until later in ing, as best we can, through the tax pansion of the 10-percent bracket, al- this decade, gradually phased in. We policy of our country, to the anxiety most all of the marginal rates expand- make that $1,000 credit effective right about the economy. We have had the ing small business expensing, and pro- now for the year 2004. good fortune of a President with vision, viding much needed alternative min- Now, there is another very popular with ideas to stimulate the recovery imum tax relief. change in this bill that a vast majority and, in the process of this legislation, These six provisions make up ap- of this body believes should have been as economists will tell us, create more proximately $300 billion of the total done a long time ago and was done in than 1 million new jobs through package of economic growth proposals the year 2001 tax bill but phased in over changes in tax policy. before the Senate and represent the this decade. What we do is provide mar- We are responding to the issues that three-fourths of the bill that I de- riage penalty relief of $51 billion in this are on the minds of Americans, and scribed that had broad bipartisan sup- package to de-emphasize the penalty those issues are the need to create jobs port. Unfortunately, from the state- for people being married, meaning they and bringing robust growth to the ments by a few of my colleagues, one pay a higher tax bill than people who economy. would never know about these items would have the same incomes not being I have the good fortune of serving in having broad bipartisan support. married. So these people will not be pe- the Senate at the same time we have a I believe the American people sent us nalized for being married and having President who has a tax policy that here to get the people’s business done. both husband and wife working. tries to accomplish what I have been Sadly, despite a bill that provides so It also enhances tax relief for those working for in the Senate as a member much benefit to working families and families where one spouse decides to of the Finance Committee for a much will create over 1 million new jobs, stay home and spend their time, rather longer period of time than President there are many who put partisanship than outside the family and the work- Bush has been President of the United first and turn the other song on its force, doing that work in the family, States. head: accentuate the negative and raising kids. As my wife reminds me, As chairman of the Senate Finance eliminate the positive. raising the family is one of the hardest Committee, that good fortune gives me Let me try to counter the efforts to and most important jobs, and that has the opportunity to work for my goals eliminate the positive by briefly tak- been emphasized very effectively by simultaneously with the goals the ing Members through key provisions of the President of the United States. President seeks. Many times being a the bill. I will emphasize first those So the marriage penalty would have member of the Senate Finance Com- that I can say categorically would have been phased in over this decade, and mittee—I was not chairman at that overwhelming support, meaning over- now, retroactive to January 1, 2004, we particular time—I found myself trying whelming bipartisan support, if they are going to have the marriage penalty to fight what I thought were bad ideas were voted upon separately. fully brought in under the 2001 tax bill put forth by Presidents of the United With regard to the child tax credit, policy. States on tax policy. Today I have the we immediately bring the child tax There is another problem particu- good fortune of trying to accomplish credit to $1,000 per year instead of larly for middle-income taxpayers, and for President Bush good things for our waiting for that to be phased in over that is how the alternative minimum economy along the lines that I have the rest of this decade. In addition, we tax is hitting an increasing number of tried to accomplish over a long period also accelerate the refundable portion American taxpayers. The bill before us of time. Not often do Senators have of the child credit. actually ensures that fewer Americans that opportunity. On the other hand, we faced a chal- In other words, we are going to speed will be subject to the alternative min- lenge in meeting the President’s goals. up the giving of money to people who imum tax through the year 2005, and As many of my colleagues know, sev- have not even paid income tax so that we devote $49 billion in this bill to ad- eral weeks ago the Senate agreed upon they benefit from our emphasis upon dressing the alternative minimum tax. the size of the reconciled tax relief cuts helping families with children. I want to be candid with the tax- for jobs and for growth. I join many of Finally, we simplify the definition of payers of America and tell them that my colleagues in wishing the reconcili- a child for several different tax pro- we are not doing in this bill, because of ation amount had been larger, and I be- grams. I know it is not imaginable to costs now, what we did in 1999 when, lieve we have put together a good pro- the average taxpayer that somehow we during the Clinton administration, the posal, given the limitation we face of would complicate the Tax Code by hav- Senate and House sent to the President the realities of compromising on the ing half a dozen different definitions of a bill abolishing the alternative min- budget which we adopted 1 month ago. the world ‘‘child,’’ but we do have. We imum tax. That was vetoed by Presi- I am pleased that the Finance Com- simplified this by expanding who is eli- dent Clinton. I am sure I am going to mittee was able to report out legisla- gible and making more families eligi- have Members on the other side of the tion that received bipartisan support, ble for certain tax benefits. This is aisle saying we are not doing enough although not as broadly bipartisan as I what that means: Over $75 billion that for the alternative minimum tax. I had hoped. While I wish the number of hard-working families will get to keep hope they remember that when it was supporters from the other side of the in their pockets. Thus, by far and away not as far down the road as it is now on aisle had been greater for final passage, the biggest part of this bill is direct covering more Americans being hit by I think the vote reflects broad bipar- benefits that help middle and lower in- the alternative minimum tax, this Con- tisan support for a significant majority come families. gress had the foresight to do away with of the provisions in this bill. There is one more thing. Not only are the alternative minimum tax and The vote also reflects a common hard-working families getting the big- President Clinton vetoed it. goal: to see our economy strengthened gest benefits, they are first in line to In this regard of how we handle the by tax relief policies. At least three- get the benefits of this bill because we alternative minimum tax, we eliminate fourths of this bill enjoys bipartisan include the President’s proposal that more people from being hit by the al- support, for instance, with major parts would send checks—rebate checks, if ternative minimum tax than we would of the income tax policy that is in this you want to call them that—to those have under the 2001 tax law. legislation, meaning personal income who receive the child credit in their In another area where we want to in- tax policy. 2002 tax year. The Treasury Depart- crease investment to create jobs, the I believe the bill before us today is a ment states that these checks will be bill provides for increasing expensing balanced package of consumption and sent out within 6 weeks of Congress ap- of depreciable investment by small

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00003 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6150 CONGRESSIONAL RECORD — SENATE May 14, 2003 business. We increase that from a Do not buy into the argument: How will disproportionately add the most $25,000 a year write-off to a $75,000 a can we afford a tax cut when the budg- labor and capital. This is an important year write-off, to encourage expansion et deficit is what it is. A lot of the point to keep in mind. and investment by small business same Members who are going to be Everyone knows most of my liveli- today and the new jobs that will result bringing that issue forward are some of hood outside of Congress or even while from that small business investment. the same Members who offered amend- I have been in Congress has been from The acceleration of the expansion of ments on the Budget Act or offered farming. But throughout my lifetime I the tax brackets at the 10 percent amendments on the appropriations bill have had jobs with small business peo- bracket benefits all taxpayers and will in January to spend more money. A lot ple in the Waterloo-Cedar Falls area of mean thousands of taxpayers no longer of the votes on the budget took money Iowa. I have had those jobs because I even owe Federal income tax. That 10 away from tax relief in the budget and started out as a small farmer. If you percent bracket relief reports $44 bil- spent it somewhere else. Anyone who is are farming 80 acres, you cannot make lion of revenue loss in this bill, mean- concerned about the budget deficit a living so you moonlight someplace ing that people hit by the 10 percent ought to have reduced taxes and put it else to provide income to support your bracket will pay $44 billion less in against the bottom line, not spend it family. I had an opportunity to work taxes. This is another one of the provi- someplace else. at a little business called Universal sions in the 2001 tax bill that would The conclusion can be drawn that a Hoist. We made grain-moving equip- have been phased in over the next dec- lot of Members expressing concern over ment for farmers and grain elevators to ade that we are bringing back effective the budget deficit are not really con- buy. That business is still operating in January 1, 2004, fully implemented. cerned about the budget deficit but Cedar Falls. I worked 10 years, from The reduction of tax rates at all want more tax money coming through 1961 to 1971, as an assembly line worker other levels—and this does reduce mar- the Federal budget, through the Fed- at a company called Waterloo Register ginal tax rates back to January 1, 2004, eral Treasury, so 535 Members of Con- Company. We made furnace registers. I rates that would have otherwise been gress can spend the money rather than had the beautiful job of putting screw reduced gradually over the rest of this 110 million American taxpayers having holes in those registers. Do that for 10 decade, making those marginal tax it in their pockets. years and you have a lot of time to rates fully effective this year. The re- I happen to believe how 535 Members think about public policy, too, I guess. duction of the top rate amounts to less of Congress spend the money is not Regardless, that is what I did. That than 7 percent of the total cost of this going to respond to the dynamics of factory closed down in 1971. It no package, although I fear that many our free market system, compared to longer exists. speakers will have us think it is 93 per- 110 million taxpayers making the deci- The point I make about higher in- cent from all the words spent on this sion of how that money is spent. come people, they provide jobs for peo- matter. Much of the discussion I have spoken ple in my State. They probably provide The reduction of all tax rates will about, worry of the budget deficit, is a lot more jobs than the John Deeres help the husband and wife who, after going to be related to discussion re- and Maytags. These are outstanding years of hard work, have finally garding the top rate and whether or businesses in my State and I do not achieved good paying jobs and now face denigrate their contribution to the the triple threat. That triple threat is not we should reduce the top rate from economy. I had jobs because of small the cost of paying for their children 38.6 to 35. Remember, that was already entrepreneurs investing and creating a going to college, saving for their own legislated in 2001 but not going to be retirement and, oddly enough, probably fully effective until the year 2006. We job for me that I could not create for helping their own parents in retire- made a judgment that putting money myself on an 80-acre farm. I created a ment. into the pockets of people who will in- part-time job on an 80-acre farm. The reductions of rates as well as ex- vest it and create jobs, particularly Someone else invested money. These pensing will help small business own- small business owners, is better to do were middle-income taxpayers, as I ers, as in my own city of Dubuque, IA, now, starting January 1, 2004, rather knew them at that time. It takes peo- and small business owners across the than waiting until 2006. ple with money to create jobs. country. These small business folks are For those listening, do not look ex- Also, people who have money have key to job creation. If they hire more clusively at the number of taxpayers not always been rich. And they are not workers, if they expand their busi- impacted by those rates. Such an anal- always going to be rich. We have eco- nesses, we are all better off. ysis fails to tell a complete story about nomic mobility studies that show that. That brings me to the point of who the efficacy and efficiency of lowering One might get the opinion from debate most benefits from the reductions of top rates and seems to focus instead on on this bill—and I hope I am accurately rates as well as small business expens- who gets what in a distributional anticipating because I have heard these ing: The people who are hired by the sense, not the economic good that debates before. One gets the idea from small business owner. What this bill is comes from the policy decisions. the debates on class warfare that some- all about is the creation of jobs. Of all In my opinion, the better way to how people who are poor in America the people benefiting, it is going to be think about it is to focus on: One, what are poor throughout their lifetime, and those who want to work and will have most efficiently changes behavior of people who are rich are rich through- an opportunity to work because of the taxpayers; two, what provides incen- out their lifetime. People at the top 1 million-plus jobs that will be created tives for the creation of jobs; and, levels have problems and they come by this legislation. These new jobs and three, what has the largest multiplier down, and there is great mobility up- the people who will be in them do not effect on the economy. And by ‘‘multi- wards in our society. I want people who show up on any of the charts that we plier effect,’’ I mean what is going to discuss we are not doing enough for the will see. They do not show up on the be done with the money by the 110 mil- poor or we are doing too much for the benefit table. But it is those people and lion taxpayers who create jobs. That rich in America, I want these Members their families who benefit greatly from has to be one of two ways. Either they to understand the studies show as we this bill. spend it and it enhances two-thirds of divide our working people into This is jobs creation legislation. This the economy related to consumer quintiles of income, these studies show is based on the presumption that if spending or it will be invested and, the people in the lowest quintile after money is in the taxpayers’ pockets and with investment, the creation of jobs. 10 years have moved to the second, 110 million taxpayers in America de- We will hear a lot about distribu- third, and fourth quintile, maybe some cide how that money is going to be tional analysis of how this tax bill even up to the fifth quintile. But there spent or invested, it will do more eco- might affect certain classes of tax- is only 10 percent of the original 20 per- nomic good, turn over the economy payers. It also ignores the fact that cent in the lower quintile after 10 many more times, than if it comes successful businesses—in other words, years. That is 2 percent of our work- through the Federal Treasury and 535 profitable businesses that pay propor- force. Members of Congress decide how it will tionately higher taxes and the highest There is great upward mobility. be divided. marginal tax rates—are the ones who Those studies also show a lot of people

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00004 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6151 in the top quintile after 10 years are America people do not resent or try to publican caucus, and people who are not in the top quintile. There is mobil- block success of those who acquire it not on the Senate committee. They ity downward. through developing small businesses. have been indicating to me that they What we are talking about in this In my State of Iowa, the opinion of a view State fiscal relief as a key compo- legislation to create jobs, to give tax successful small business person is very nent to an overall agreement on taxes relief to American workers, is to give important, if not more important, than and on growth. small business, and even large busi- that of a corporate CEO. To be perfectly candid, we have Mem- ness, an incentive to create jobs in one I was amused to read some press re- bers of this body, right or wrong, who of two ways: Either take the money ports about how K Street lobbyists and are telling us if we don’t have some- and invest it and create jobs rather the Fortune 500 have reservations thing in here for fiscal relief, this bill than spending it for you or for con- about this Finance Committee bill be- is not going to get 51 votes to pass. sumers to take their extra money and fore us. There were too many revenue Like it or not, they have a great deal buy things and create consumer de- raisers, too many loophole closers, too of leverage. So we are dealing with mand, in turn creating jobs. much to ask from big business. that and hopefully dealing with it in a It also has something to do with en- I would like to ask a different ques- responsible way, through programs hancing the capital-to-labor ratio. tion. Are we doing enough for small where there has been a Federal/State That is because when capital is more business and the people who want to partnership, such as Medicaid. There available, when there is a surplus of hire them? I want to focus on that are some areas where there has not capital, that is when labor in America question. Small businesses, as I have necessarily been a State/Federal part- does its best because labor is going to indicated, are engines of growth for our nership. These funds, under our agree- be much more in demand when there is economy. In the recent past, they have ment—and there will be an amendment a surplus of capital. That is where been the source of most newly created that fleshes this out to a greater ex- labor is going to make its progress, jobs. I also continue to believe it is im- tent—could be used for education, with higher wages and more jobs being portant to ensure that small businesses health care, law enforcement, and es- created. This bill will enhance the cap- do not operate at a competitive dis- sential Government services. I look ital-to-labor ratio. advantage vis-a-vis large corporations forward to continuing to work with my To further be definitive on what I because they are forced to pay higher colleagues on this important issue as have said as a philosophical statement marginal income tax rates. Currently, we start filling in the details of that with statements that are backed up by successful small businesses incur a 10- that will be part of an amendment of- studies that have been made, we have, percent rate penalty when compared to fered later on. as far as cutting the marginal tax rate their big business counterparts. In I conclude by commenting briefly is concerned, studies suggesting that a other words, if you are not incor- about the offsets that are in this bill. 5 percentage point reduction in the top porated, you pay the higher marginal Let me first note that there has been marginal tax rate would increase small tax rate of 38 percent. There is a bias in some surprise in the media about the business investment by as much as 10 favor of corporations away from small fact that these are offsets. I respond by percent. The Treasury has indicated business, individual entrepreneurs, be- saying that if the media is somehow that 80 percent of the benefits from the cause of the 38-percent bracket on per- shocked that we would have offsets, top rate acceleration go to small busi- sonal income versus the 35-percent they haven’t been paying attention to ness. bracket for the corporate tax rate. a lot of tax bills which have been going I will digress for a minute to talk Even common sense would tell you through here. The fact is you are not about something that troubles me that does not make good economic going to get a tax bill through this about the debate on bringing down the sense. Why should you have a bias in body under what you call regular order top rate to 35 percent. Some folks, es- the Tax Code against people who do not unless there is unanimous consent to pecially those who have acquired their want to incorporate? do it without a point of order. If there wealth through professions, big busi- I want to leave that issue now and is a point of order, you have to have 60 ness, or inheritance, are the ones most turn to the last major part of the bill, votes, or you have to avoid a point of violently opposed to reducing the top and that is the part of the bill that pro- order, which is hard to do, by having rate. It makes you wonder why these vides for a partial exclusion of dividend offsets, meaning it would be revenue people so oppose bringing down the tax income from taxes. As my colleagues neutral. burden on businesses that they prob- know, the President called for a com- ably do not even know about—small plete end to this double taxation of As the President’s own spokesperson business. dividends. He would even go further, as stated, the President in his budget pro- I gave this some thought while I was I would, and say that double taxation vided several billions of dollars in off- out in the field helping to plant corn of anything is wrong, dividends or oth- sets—not necessarily the same ones we the other day. I asked myself, Could it erwise. I have to admit that our bill is are using in this bill. In addition, my be that they are envious? No, that not a bill that is an absolute victory counterpart in the House has stated doesn’t make sense because these folks against double taxation because the that he will look to offsets to pay for generally have more money than suc- proposal as reported covers only 86 per- improvements in the international tax cessful small business people. cent of dividend-receiving taxpayers arena. Offsets are not new. I asked myself another question: and is a good step in the effort to I will not discuss all the offsets at Could it be they do not want others, eliminate economic distortion result- this point. But my colleagues should maybe those looking to make the tran- ing from that tax policy framework. know that many of these offsets deal sition from modest success to very suc- When in full effect, this policy would with the scandals we have seen re- cessful status, to make that transition ensure that dividends would be subject cently at Enron and many other bad that is possible given the economic mo- to the top rate of 28 percent. All other actors in corporate America. bility of our society? Could it be that ordinary income would be subject to a That is not denigrating corporate they see high taxes as a way to bar oth- top rate of 35 percent. This means that America because the bad actors are a ers from moving up? Could it be that dividend income would enjoy a signifi- few compared to tens of thousands of they believe high taxes are the nec- cant preference over other forms of legitimate, ethical, honest corpora- essary tool to block successful small periodic investment income such as in- tions in America. business people? Could it be that these terest. It is my view that while we are try- elitists want to block a class of people Let me note to my colleagues that ing to help shareholders with reduc- who move up because of hard work we provide State fiscal relief in this tions in dividends, we should also be rather than by pedigree? Could it be bill. A lot of Senators, over a 2-year pe- closing down the loopholes, the games that high taxes on small businesses is a riod of time, have talked to me about and the gimmicks that executives have way to sustain the status quo? the necessity of doing this, both mem- been playing. The shareholders and the I hope that is not true, but it makes bers of the Senate Finance Committee workers—and many of the workers who you wonder. I know in the heartland of as well as people even in my own Re- also own shares—have been greatly

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00005 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6152 CONGRESSIONAL RECORD — SENATE May 14, 2003 harmed by the actions of corrupt ex- The PRESIDING OFFICER. The Sen- From our point of view, if we focus on ecutives. This bill takes great strides ator from Montana. these God-fearing, middle-income, in ending these loopholes. Mr. BAUCUS. Mr. President, I very hard-working Americans and give them Thus, shareholders benefit greatly much thank my friend and colleague, a helping hand, give them an addi- from the dividend deductions as well as Senator GRASSLEY, chairman of our tional small slice of the pie so they can our efforts to end the fast and loose committee. He has done an excellent enrich their lives, we on this side of the games being played in some corporate job working on this bill. As he said, I aisle believe that America will be suites. do not support the bill but I do support stronger; these people will have strong- I haven’t thanked Senator BAUCUS the process and the will of the Senate er families, stronger neighborhoods, yet for his continued efforts to work to proceed; let Senators vote as they stronger churches, stronger schools, with me despite our inability to find wish. That is, frankly, why we are and they will spend their money build- common ground on all the elements of standing here—to get things done, al- ing a stronger economy in each com- this economic recovery package. Sen- though we may not always agree. munity. ator BAUCUS, ranking Democrat and I now yield to the Senator from Illi- We have two very different views of former chairman of the committee, has nois 15 minutes from the time on our the world. worked very hard to help me move this side. Senator GRASSLEY, a Republican, bill along even though he could not The PRESIDING OFFICER. The Sen- sees the Bush tax plan as a way of help- vote for it in committee. That is par- ator from Illinois. ing the elite. We on the Democratic ticularly in the tradition of our com- Mr. DURBIN. I thank the Senator side believe it is far more important to mittee. Rarely does a bill come to this from Montana. make certain that what we do is fair floor where he and I are not on the I would like to acknowledge my and balanced, particularly when it same side of the fence. Yet there are friendship and respect for the Senator comes to working families who are going to be a lot more bills coming to from Iowa. We have been working to- struggling to get by. the floor this year, as before, on which gether, as we will in the future. We Senator GRASSLEY said in his opening we are on the same side of the fence. come from neighboring States and have remarks that ‘‘it takes people with I look forward to continuing to work a lot of neighboring concerns. I think money to create jobs.’’ I quote him. through our differences to produce leg- we will find common ground in the fu- That is his point of view. That is his islation that will be helpful and getting ture to work on many issues. I look philosophy. It takes people with money things moving again as quickly and ef- forward to that opportunity. to create jobs. What he overlooks is the fectively as possible. Let me tell you that today we fact that people who may not be rich, AMENDMENT NO. 555 couldn’t be further apart. There is such when given a tax break, will spend it. Mr. GRASSLEY. Mr. President, I a chasm and such a divide between They will buy washers, dryers, refrig- send an amendment to the desk. those who support this bill and those erators, and stoves in addition to a The PRESIDING OFFICER (Mr. GRA- who oppose it. It really comes down to house, paying their bills, and making HAM of South Carolina). The clerk will a very fundamental issue. It is not a certain their kids are taken care of and report. question of who is good and who is evil the school tuition is paid. The assistant legislative clerk read or who is right and who is wrong. It I suggest to the Senator from Iowa as follows: comes down to the way you look at the and those of his point of view that it not only takes people with money to The Senator from Iowa [Mr. GRASSLEY] world. The way Senator GRASSLEY proposes an amendment numbered 555. looks at the world as he describes it in create jobs, but to create jobs you Mr. GRASSLEY. Mr. President, I ask his opening remarks and the way he ought to give people who are struggling unanimous consent that reading of the puts the reasoning forward for this leg- every single day with the burdens of family life a helping hand. In so doing, amendment be dispensed with. islation describes a vision of the world. they will help us create jobs. The PRESIDING OFFICER. Without I have a different view of the world. The Senator from Iowa said, inciden- objection, it is so ordered. It comes down to this: From Senator tally, that this is about class warfare; The amendment is as follows: GRASSLEY’s point of view, when it the speech I am giving is about class (Purpose: To increase the criminal monetary comes to taxes in America, our Govern- warfare. penalty limitation for the underpayment ment should find ways to provide more or overpayment of tax due to fraud) A month ago, we had a visit from a comfort, more help, and more financial man named Warren Buffett. He is one At the end of part I of subtitle C of title III assistance to the elite in America, the add the following: of my favorites. You may have heard of investors who have made a lot of SEC. 335. INCREASE IN CRIMINAL MONETARY him. He is one of the most successful PENALTY LIMITATION FOR THE UN- money, successful businesspeople— businessmen in the world. He lives in DERPAYMENT OR OVERPAYMENT OF those who have done well in America, Omaha, NE. He owns a company called TAX DUE TO FRAUD. some by their own hard work, some by (a) IN GENERAL.—Section 7206 (relating to Berkshire Hathaway. He is extremely virtue of being born into a family with successful. Warren Buffett came to fraud and false statements) is amended— a lot of money. But the belief of the (1) by striking ‘‘Any person who—’’ and in- talk to us, as he does once in a while, serting ‘‘(a) IN GENERAL.—Any person who— Senator from Iowa and those who sup- about his view of the world. I always ’’, and port the President’s tax package is enjoy it. I think his annual report (2) by adding at the end the following new that those are the people who really should be must-reading for anybody in- subsection: are the future and hope of America; if terested in American business because ‘‘(b) INCREASE IN MONETARY LIMITATION FOR we can just make life more com- he has such a refreshing and honest UNDERPAYMENT OR OVERPAYMENT OF TAX DUE fortable for them, if we can give them point of view. TO FRAUD.—If any portion of any under- more of our national resources, then payment (as defined in section 6664(a)) or We asked Warren Buffett, the second overpayment (as defined in section 6401(a)) of the economy will move forward and all wealthiest man in America, about this tax required to be shown on a return is at- boats will rise. That is their view of claim of class warfare and this tax bill. tributable to fraudulent action described in the world—help the elite and America He said: You bet there’s class warfare subsection (a), the applicable dollar amount will be better off. going on, and my class is winning. He under subsection (a) shall in no event be less On this side of the aisle, we see it a said: My class is winning. And he is than an amount equal to such portion. A rule little differently. We kind of view the right. similar to the rule under section 6663(b) shall world in terms of the people who get up This bill is designed so Warren apply for purposes of determining the por- every morning and go to work and Buffett and the wealthiest people in tion so attributable.’’. (b) EFFECTIVE DATE.—The amendments struggle—teachers, policemen, fire- America will get the tax breaks. War- made by this section shall apply to under- fighters, people who own small busi- ren Buffett knows that is unfair. He payments and overpayments attributable to nesses, those who get up and work said that publicly. I think most Ameri- actions occurring after the date of the enact- every day for a paycheck and pay more cans know it is unfair. ment of this Act. in payroll taxes than they do in income Take a look at this morning’s New Mr. GRASSLEY. Mr. President, I taxes—and some who are struggling York Times. Consider this for a mo- yield the floor. under difficult family circumstances. ment: Despite all of the hectoring by

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00006 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6153 rightwing television, despite all of the aren’t important. Why are you Demo- against deficits, it was before we came best efforts of the President of the crats tied in knots over deficits? into this new era where deficits don’t United States visiting America from Well, the reason they do not want to count. We are now in a new era where one corner to the next, despite all the talk about it is because the record is so the debt we are leaving our children is speeches by Republicans in Congress, miserable. Look where we are ‘‘Stuck not important. What is important is this is what the American people think in the Bushes’’: Federal deficits, sur- giving tax breaks to the elite in Amer- about the debate in which we are en- pluses, and then deficits again. Here we ica. gaged. have a runup, from the first President The Senator, once he comes to grips Question to the American people, Bush, a bad deficit situation; then the with this, once he comes to understand across the board: Which is a better way beginning years of the Clinton adminis- this, will really understand the Bush to improve the national economy: cut- tration, deficits, still red ink; finally, economic policy. But I say to the Sen- ting taxes or reducing the Federal at the end of the Clinton years, we ator, he is in good company because I budget deficit? Simple choice. Well, 31 break out of it, and for the first time in struggle with this concept, and the ma- percent said: cut taxes, which is what over 30 years we start generating sur- jority of the American people do. This Senator GRASSLEY, President Bush, pluses in America; and then comes just does not compute and it does not and the Republicans propose. But 58 President George W. Bush, and here we work. percent said: reduce the deficit—al- go again, red ink for as far as the eye For the President and his supporters most 2 to 1. can see. My fiscally conservative Re- to stand before us and say this Bush The American people get it. They un- publican friends say: It doesn’t count. tax plan is going to increase jobs—take derstand this cutting taxes is not the Mr. REID. Will the Senator yield for a look at the job growth we have seen answer to every problem, and yet that a question? in the last few years. Take a look, is all we hear from this White House. Mr. DURBIN. I am happy to yield. starting with President Truman, at all Then they asked the American peo- Mr. REID. Is the Senator aware of the job growth, and then take a look at ple: Have the reductions in Federal some statements made by some of our what has happened when we get to taxes enacted since 2001 under Presi- friends on the other side of the aisle? President George W. Bush. dent Bush been good for the economy, For example, I quote Senator The President told us, 2 years ago: If bad for the economy, or have they SANTORUM. And this is from the Pitts- you will just let me cut taxes on the made much difference? So think about burgh Post Gazette on November 15, wealthy, America is going to have this, for a tax cut which most people 1995: more jobs. usually applaud, they asked the Amer- The American people are sick and tired of Well, we have lost 2 million jobs. ican people: Take a look at the Presi- excuses for inaction to balance the budget. Sorry, Mr. President, you missed it by dent’s last tax cut. Did it help the The public wants us to stay the course to- a mile. economy or did it not? Those who said wards a balanced budget, and we take that Now he says, this time around, the it was good for the economy, 19 per- obligation quite seriously. best thing for us to do is more of the cent; those who said it was bad for the I quote the majority leader at the same. I can tell you that more of the economy, 12 percent—not much dif- time, Senator TRENT LOTT: same is not good for America. Take a ference: 63 percent. I think the most important thing really look at those who are facing long-term We took $1 trillion out of the Federal does involve the budget, keeping a balanced unemployment: 6 percent. It is back to Treasury, gave it to the wealthiest peo- budget, not dipping into Social Security, and the highest rate—President Bush has ple in America, ran our deficit to continuing to reduce the national debt. not matched his father’s 7.5-percent record levels, and by a margin of 63 I quote Senator HAGEL, from the unemployment rate, but he is creeping percent to 19 percent the American Omaha World Herald, on February 6, up there. It is higher and higher each people said it did not make much dif- 1997: year. That does not say much for his ference to those who said: Good idea. The real threat to Social Security is the economic plan. Do it again. national debt. If we don’t act to balance the I think America gets it. The Presi- Then they asked the American peo- budget and stop adding to the debt, then we dent, as Commander in Chief, is sound- ple: If adopted, do you think President are truly placing the future of Social Secu- ing retreat when it comes to the econ- Bush’s latest tax cut will or will not rity in jeopardy. omy of America. He is walking away make a significant difference in the Final quote—there are others—but from the greatest challenge our fami- amount of money you have after taxes? the final quote I will give you is from lies face today. It is not just the threat Will: 33 percent; will not: 58 percent. Senator JUDD GREGG. This is from the of terrorism; it is the threat of eco- The American people understand. New Hampshire Sunday News, Feb- nomic insecurity. The winners in the Bush tax bill are ruary 1, 1998: Let me be specific. The Republican the elite in America. It isn’t the work- As long as we have a Republican Congress, plan does not address, does not spend ing families and small businesses that we’re going to have a balanced budget, and if one dollar, does not even concern itself will come out ahead. They are going to we can get a Republican President, we can with an overwhelming issue I find from be saddled with this deficit created by start paying down the debt on the Federal businesses across Illinois: the cost of a tax cut when the country is in reces- government. health insurance. Go to any business— sion, a tax cut when we are still trying I give you these quotes. large or small—and ask them what to find out how much we are going to Also, very soon, in the next few days, they are facing. Ask them what the pay for the war in Iraq and the war in we are going to take up the issue of in- premiums are. They are going to tell Afghanistan and the war against ter- creasing the national debt by almost $1 you that the health premiums are kill- rorism. trillion. So will the Senator comment ing them, killing their competitive- Then, the final question: Would a on these direct quotes from Republican ness, killing their ability to offer new tax cut be good for the economy, leaders and the fact we are being asked health insurance protection to their bad for the economy, or won’t have by the President of the United States employees. Many of them are facing much effect? Good: 41 percent—not bad, to increase the national debt by almost absolutely awful choices they have to huh?—and then those who said bad or $1 trillion in the next few days? make. won’t have much effect: 52 percent. So Mr. DURBIN. I say to the Senator Not one penny, not one word, not one a majority of the American people from Nevada, it is totally unfair to call provision in the Bush plan for busi- think it is either not going to have any out the quotes of our Republican col- nesses deals with health insurance, but impact or it is going to be bad. leagues about deficits because he has the Democratic plan does. The Demo- They get it. They understand it. failed to take into account this new era cratic plan provides that we are going I listen to my fiscally conservative of compassionate conservatism. Things to increase the tax credit, a small busi- Republicans come to this floor and say: have changed. The Senator from Ne- ness tax credit for those offering insur- For goodness’ sake, don’t mention the vada, in all fairness, should understand ance for their employees. ‘‘D’’ word. Don’t mention deficits. Defi- when Republicans stood on the floor of I will tell you, I will take that to any cits don’t count anymore. Deficits the Senate and the House and railed chamber of commerce, any meeting of

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00007 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6154 CONGRESSIONAL RECORD — SENATE May 14, 2003 the National Federation of Independent religion, and they still don’t buy it. As The amendment is as follows: Businesses—you pick it—and let them the Senator from Nevada said, they be- (Purpose: To repeal the 1993 income tax in- decide which is better for the future of lieve as we do, that this Bush tax plan crease on Social Security benefits and to their business, a tax credit for health for the elite investors is not going to offset the revenue loss) insurance or reducing the tax rate on create jobs or create the kind of Strike section 102. the wealthiest people in America. I will growth that we want to see. I think the Strike title II. At the end of subtitle C of title V, add the take that referendum and I will go to Senator from Nevada has pinpointed following: the bank on that one. I know what the one of the weaknesses in their argu- SEC. ll. REPEAL OF 1993 INCOME TAX IN- outcome is going to be. ment. CREASE ON SOCIAL SECURITY BENE- What we believe is that there should Mr. REID. Is the Senator aware that FITS. be a tax cut, if there is going to be one, in the State of Illinois the number of (a) RESTORATION OF PRIOR LAW FORMULA.— for every American taxpayer, particu- jobs lost since the beginning of the Subsection (a) of section 86 is amended to read as follows: larly for those in lower income cat- Bush administration is nearly 200,000, ‘‘(a) IN GENERAL.—Gross income for the egories. We should accelerate the child and last month alone it was almost taxable year of any taxpayer described in tax credit to $800, even higher than the 20,000 jobs? subsection (b) (notwithstanding section 207 Republicans have proposed. We should Mr. DURBIN. I am aware of it. Vir- of the Social Security Act) includes social eliminate the marriage penalty. We tually every State has lost jobs. We security benefits in an amount equal to the should have a small business health tax have lost over 20,000 manufacturing lesser of— credit. We should triple the amount jobs in the last 12 months with the last ‘‘(1) one-half of the social security benefits received during the taxable year, or that small businesses can expense. We Bush tax cut. Adding insult to injury is ‘‘(2) one-half of the excess described in sub- should encourage business investment. the fact that this administration re- section (b)(1).’’ We should make certain that we limit sists providing additional unemploy- (b) REPEAL OF ADJUSTED BASE AMOUNT.— the amount of this tax cut to what we ment compensation for people who are Subsection (c) of section 86 is amended to can afford; otherwise, we are digging out of work. When his father faced re- read as follows: ourselves deeper and deeper and deeper cession, five different times we in- ‘‘(c) BASE AMOUNT.—For purposes of this creased unemployment compensation, section, the term ‘base amount’ means— in this deficit hole. ‘‘(1) except as otherwise provided in this The Republicans who push this tax three times under President Bush, and subsection, $25,000, plan have to face stubborn facts, and twice under President Clinton. We have ‘‘(2) $32,000 in the case of a joint return, facts can be stubborn. The last time only done it twice in this situation. and they got a tax cut through, the Amer- To me, it is heartless to ignore what ‘‘(3) zero in the case of a taxpayer who— ican economy fell backward. We did is happening to unemployed people. ‘‘(A) is married as of the close of the tax- not make progress. We lost jobs. We They have lost good jobs. Some of able year (within the meaning of section lost opportunity. We lost a lot of hope them have been victims of corporate 7703) but does not file a joint return for such scandals. They are in trouble, trying to year, and in this country. ‘‘(B) does not live apart from his spouse at We need to move forward. We can do find some way to get by. Every single all times during the taxable year.’’ it with a sensible tax plan, one that day is a challenge. We find over a (c) CONFORMING AMENDMENTS.— does not reward the elite but rewards fourth of them have had to leave their (1) Subparagraph (A) of section 871(a)(3) is working Americans across the board. homes and move in with family and amended by striking ‘‘85 percent’’ and insert- I yield the floor. friends. We find over half of them ing ‘‘50 percent’’. Mr. BAUCUS. Mr. Chairman, I yield 5 struggling to pay utility bills. More (2)(A) Subparagraph (A) of section 121(e)(1) more minutes to the Senator from Illi- and more of them are paying less for of the Social Security Amendments of 1983 nois. (Public Law 98–21) is amended— food and clothing for their family and (i) by striking ‘‘(A) There’’ and inserting Mr. REID. If the Senator would allow ultimately many of them are losing ‘‘There’’; me to ask him a question. health insurance—words Republicans (ii) by striking ‘‘(i)’’ immediately following Mr. DURBIN. I would be happy. don’t want to talk about, the cost of ‘‘amounts equivalent to’’; and The PRESIDING OFFICER. Does the health insurance. That is an indication (iii) by striking ‘‘, less (ii)’’ and all that Senator from Montana yield? of what we should be focusing on in follows and inserting a period. Mr. BAUCUS. I yield 5 minutes off terms of our priorities. Instead, what (B) Paragraph (1) of section 121(e) of such the amendment to the Senator from Il- we are doing is increasing the deficit at Act is amended by striking subparagraph (B). linois. the expense of Social Security and Mr. REID. Is the Senator from Illi- (C) Paragraph (3) of section 121(e) of such Medicare. That is not fair. Act is amended by striking subparagraph (B) nois aware that the Congressional The PRESIDING OFFICER. The Sen- and by redesignating subparagraph (C) as Budget Office, the White House Council ator from Montana. subparagraph (B). of Economic Advisors, and the private Mr. BAUCUS. Mr. President, I ask (D) Paragraph (2) of section 121(e) of such sector economists who helped the unanimous consent that the pending Act is amended in the first sentence by President analyze this proposal have amendment be temporarily laid aside striking ‘‘paragraph (1)(A)’’ and inserting stated that the President’s tax break and that the amendment to be offered ‘‘paragraph (1)’’. (d) MAINTENANCE OF TRANSFERS TO HOS- plan will weaken the long-term health by the Senator from North Dakota be PITAL INSURANCE TRUST FUND.—There are of our economy? This is from the Con- in order. hereby appropriated to the Hospital Insur- gressional Budget Office, the first part The PRESIDING OFFICER. Without ance Trust Fund established under section of April of this year. Is the Senator objection, it is so ordered. 1817 of the Social Security Act amounts aware that these institutions and indi- The Senator from North Dakota. equal to the reduction in revenues to the viduals have so stated? AMENDMENT NO. 556 Treasury by reason of the enactment of this Mr. DURBIN. I say to the Senator Mr. DORGAN. Mr. President, I send section. Amounts appropriated by the pre- from Nevada, the interesting thing an amendment to the desk and ask for ceding sentence shall be transferred from the general fund at such times and in such man- about that is—I was aware of it—this is its immediate consideration. the new Congressional Budget Office ner as to replicate to the extent possible the The PRESIDING OFFICER. The transfers which would have occurred to such that brought us the new economic con- clerk will report the amendment. Trust Fund had this section not been en- cept of dynamic growth. The Repub- The assistant legislative clerk read acted. lican conservatives have been scream- as follows: (e) EFFECTIVE DATES.— ing for years that the Democrats and The Senator from North Dakota [Mr. (1) IN GENERAL.—Except as otherwise pro- those following their point of view DORGAN], for himself and Mr. BAUCUS, pro- vided in this subsection, the amendments were too conservative: We don’t take poses an amendment numbered 556. made by this section shall apply to taxable years beginning after December 31, 2003. into account what a tax cut will do, Mr. DORGAN. Mr. President, I ask (2) SUBSECTION (c)(1).—The amendment that it will just mushroom growth. unanimous consent that reading of the made by subsection (c)(1) shall apply to ben- Here comes the new Congressional amendment be dispensed with. efits paid after December 31, 2003. Budget Office. They are now believers The PRESIDING OFFICER. Without (3) SUBSECTION (c)(2).—The amendments in this new dynamic growth economic objection, it is so ordered. made by subsection (c)(2) shall apply to tax

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00008 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6155 liabilities for taxable years beginning after Let me talk for a moment about the When we talk about the greatest gen- December 31, 2003. Social Security issue and senior citi- eration and senior citizens, I went to a Mr. BAUCUS. Mr. President, I ask zens. There is discussion on the Senate veterans hospital on a Sunday morning unanimous consent that the following floor—and there will be much more, I to provide the medals that had been staff of the Joint Committee on Tax- expect—that this tax proposal that earned by a Native American veteran. ation be granted the privilege of the comes to the Senate will use all of the His name was Edmond Young Eagle. He floor, and I send the list to the desk. trust funds that are to be set aside for was dying of lung cancer. I learned We worked out an arrangement so they Social Security to pay for tax cuts. I later that he died a week after I had rotate. don’t think that is going to be dis- been there. His sisters asked if we The PRESIDING OFFICER. Without puted. I don’t think that is subject to could get his medals, and so I did. I objection, it is so orderd. contest. There will not be Social Secu- presented them to him at the VA hos- The list is as follows: rity trust funds if we pass this tax cut. pital that Sunday morning. The doc- Thomas A. Barthold. This is a circumstance where upper tors and nurses gathered, and his sis- Ray Beeman. income Americans will receive very ters were there. We cranked up his bed John H. Bloyer. generous tax cuts and senior citizens so that he was in a seated position, and Nikole Flax. will see their Social Security trust I pinned the medals he had earned dur- Roger Colinvaux. funds depleted in order to finance it. ing the Second World War on his pa- Harold Hirsch. Deirdre James. I mentioned yesterday that on page 4 jama top. Lauralee A. Matthews. of the Budget Act, which brings us to Edmond Young Eagle never had Patricia (Tricia) MCDermott. the floor under reconciliation, the de- much in life. He fought in Africa and in Brian Meighan. scription of what is happening to the Europe, and he went where this coun- John F. Navratil. debt is it goes from $6.7 trillion to $12 try asked him to go. He risked his life Joseph W. Nega. trillion in a decade. and served America with great distinc- David Noren. Some say: That is not much to worry tion. He came back to live on the res- Cecily W. Rock. Carol Sayegh. about. Don’t worry about debt. ervation, and he never had very much, Gretchen Sierra. I don’t understand that. The debt, of never had a very good life. He had it Ron Schultz. course, is going to be inherited by our pretty tough. That day, on a Sunday Mary M. Schmitt. children because they will inherit this morning, having the medals that he Carolyn E. Smith. economy and this country. We are say- earned 50 years previously pinned on Allison Wielobob. ing to them: We have a new plan. Our his pajama tops, Edmond Young Eagle, Barry L. Wold. fiscal policy plan will double the Fed- 7 days from dying of lung cancer, said: Tara Zimmerman. eral debt to $12 trillion in 10 years. ‘‘This is one of the proudest days of my Mr. DORGAN. Mr. President, let me I have never heard of a plan doubling life.’’ He didn’t have much, but he briefly describe the amendment I offer the debt described as a success. But deeply valued the service he had given on behalf of myself and Senator BAU- that is what I am hearing in the Sen- his country. I told him how much this CUS. This amendment deals with re- ate. This is a plan that is gearing this country valued the service he had pro- pealing the 1993 provision that would country towards long-term economic vided and how proud we were of him. increase the amount of Social Security solvency, economic opportunity, Edmond Young Eagle and millions of income received by a senior citizen to growth, hope, and most especially jobs others have answered the call to serve be reported for tax purposes. Let me by doubling the Federal debt to $12 this country in so many ways. I talk describe the history of this a bit and trillion—a rather curious argument. about the greatest generation. Yes, it then talk about why I believe we ought I managed to teach economics for a was the soldiers and it was ‘‘Rosie the to do it. couple of years. I don’t think there is Riveter’’ back then. Moving forward, so For a good many years after Social anything in any book anywhere that many people have served this country, Security was created, the Social Secu- would have you teach this lesson. This and this country made a bargain with rity receipts that a senior citizen is apparently a new form of economic them and a promise to them. We said would receive would not be required to theory. to them: If you will pay from your pay- be reported for tax purposes on their I recall the book written by Tom check, every time you receive a pay- income tax return. It was exempt in- Brokaw called ‘‘The Greatest Genera- check, a tax that goes into a trust fund come. Then at one point the Congress tion.’’ I have visited with many of the to fund something called Social Secu- decided that one-half of the payments folks described in that book, the folks rity, when you reach retirement age, for Social Security that go to a recipi- who lie on their belly on the sands of that Social Security payment will be ent should be described as income on Normandy, risking their lives for their there for you. Yes, we want you to save their income tax return. So we went country, seeing their comrades die in and invest yourself, but at least this for a long while with 50 percent of the foxholes beside them, those who were will be a basic insurance retirement Social Security payments to senior asked to go halfway around the world payment for you. citizens being required to be reported to fight for liberty and did so without We have always made that promise. for tax purposes. complaint, never asked for much, but In fact, we changed that promise in In 1993, in a rather large piece of leg- were told by this country a couple 1983 and said: You know what? Because islation that moved this country to- things: When you get back from serv- the largest baby crop in the history of wards a different fiscal policy in a very ing your country, we will provide free this country will retire after the turn significant way—the results of which health care for life for you in the vet- of the century—and that is called the throughout the 1990s expanded the erans health care system. war babies, the group of babies who economy, created jobs, did a number of That turned out to be a promise this came after the soldiers came home things—one of the provisions was to in- Congress is unwilling to keep, regret- after the Second World War and the crease from 50 percent to 85 percent the tably. They also were told: When you largest outpouring of affection in the amount of income that would be re- come back, there will be a Social Secu- history of the country occurred, and we quired to be subject to income tax and rity system you can count on; you can had so many babies born, the largest reported on the tax return for single rely on. Of course, what is happening baby crop in the history of America. beneficiaries with incomes over $34,000, now is we have people who don’t sup- They will begin to retire now. When married couples income over $44,000. So port that system, don’t believe we they retire and hit the retirement moving that 50 percent to 85 percent ought to keep the promise, don’t be- rolls, then we have maximum strain on now means that roughly 8 million sen- lieve trust funds ought to include the the Social Security system. ior citizens pay an average increased word ‘‘trust.’’ So in 1983, we put in place a little dif- income tax of about $1,500 a piece per If I can digress for a moment, I recall ferent approach. The approach was to year. I propose that we repeal that pro- one day going to a veterans hospital in say we are actually going to collect vision, go back to previous law which Fargo, ND, about which I have told my more money than we spend on a cur- is a 50-percent reporting requirement. Senate colleagues before. rent basis in order to have a trust fund

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00009 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6156 CONGRESSIONAL RECORD — SENATE May 14, 2003 balance that begins to save so that the uncle who is 81 years old. He runs in double taxation, which I think is the resources are there when the baby the Senior Olympic events. He has 43 principle by which some brought to the boomers retire. That is what the trust gold medals. He runs the 400 and the floor this issue of dividends, how about fund is about. I mentioned that if we 800. Thirty years ago when one reached double taxation of Social Security? decide to increase the Federal debt—as 80 years of age, they had to find a La- That is a good example. Wages. We tax is the case in the bill brought to the Z-Boy. You were then at that age on your wage, you put some money floor of the Senate, and as was the case where it was time to find an easy chair away, and then you come back and get with respect to the Budget Act—from because you were not going to run a Social Security payment, and you $6 trillion roughly to $12 trillion, there races or buy a car and finance it for 5 have to pay a tax on part of that. It is won’t be a Social Security trust fund. years. 85 percent now. I propose 50 percent. It is to say that that which is to be put Now things have changed in a very Double taxation on Social Security. Is away in a trust fund for Social Secu- dramatic way. People are living longer that more or less important? I guess rity will be used as an offset to provide and much better lives. But it is true you could talk about almost anything, tax cuts for Donald Trump. I know I that as they live longer lives, they could you not? Go buy a car this after- should not use his name, but he likes reach a period of time when their in- noon. You pay taxes on the wages you to have his name used. I think he is an come declines. Inevitably, they stop earn, and when you buy a car, they are interesting guy, a good businessman working and retire. Their income de- going to charge a big old excise tax. and investor. He does very well. He clines. As they reach the declining in- Double taxation. puts his name on his buildings, so he come years, then the question of what So the question I have is, When some certainly won’t mind my using his kinds of taxes they pay is a very im- people apparently got bottled water name. portant question. Do they, as some are and sat around a big old mahogany The question is, Should we decide required, go into a grocery store, where table and started thinking, the biggest that the trust funds we are trying to the pharmacy is in the back, and have problem in America is double taxation save for the future, which we need to ask themselves: Should I buy gro- so let’s try to get rid of that, how did when the baby boomers retire, will be ceries first so I can see how much I they come up with the notion that used as offsets so that we can give Don- have left for prescription drugs? Of dividends represented that priority? ald Trump, or others in the upper in- course, they make those choices. Were there people smoking Cohibas come bracket in the country, large tax When they reach their declining in- there who were getting a lot of divi- cuts? come years, the question is, What dends and said: The biggest problem for Is that what you would sit around a should their tax obligation be? How me is that I get $10 million of dividends table and decide as an American family should we construct this tax obliga- and, by God, that is double taxation? Is that represents the priorities, values, tion? My amendment is devastatingly that where that came from? and needs? Is that what you would de- simple: Let’s relieve them of that 30 Or were there perhaps some senior cide we ought to do now? Is that the percent in extra income on Social Se- citizens who were supposed to be there urgency for our country in public pol- curity they are required to report, and their chairs were empty? I assume icy? I don’t think so. which will save 8 million people $1,500 a they would have said: Double taxation? In addition to trying to save money year. These are not the top-income Here is an example of double taxation. in a trust fund, in 1993 we changed the folks. These are folks who have retired Help us. mechanisms by which we assessed and now have less income than they No, that is not the priority. The pri- taxes, and especially with respect to had during their working years. In ority is not about helping them. The senior citizens. We said: We will re- many cases, they are folks who saved priority is helping the folks at the top quire you to report more of our Social and are trying to help their kids and and then saying: And if we do that, we Security payments as income on your grandkids. They have less income, and are going to create a massive amount tax returns—from 50 percent to 85 per- they are now in the last 10 years, and of new jobs in America. cent. That means about 8 million sen- they are required to pay higher taxes. We have heard this argument be- ior citizens now pay $1,500 a year in ad- This provision will relieve them of fore—massive new jobs—new jobs. Jobs ditional taxes. some of that burden. I was thinking is a four-letter word, but it is a good I wish we had not done that in 1993. the other day about this tax debate be- one, as long as jobs are present some- I voted for a bill that included it be- cause it is the case that some will ben- place. We went through this with a cause it had a lot of things in it that efit and some will not. There is an old very large tax cut 2 years ago, and now put this country back on track, but I saying: When you rob from Peter to we have 2.3 million fewer jobs. It might wasn’t pleased that was in it. Twice pay Paul, you can always count on be because other events happened. since then, I have voted to try to re- Paul being grateful. They certainly did. peal it. Now if we are going to have a The fact is, this bill is going to make One wonders, if the first dose of med- substantial change in tax laws and some people in this country very grate- icine makes you sick, whether you evaluate who ought to get a tax break ful—but it is not the senior citizens, ought to trot out the same bottle and and who should not, and where should unless we pass this amendment; it is label another batch to an unsuspecting we cut taxes or where should we not, the folks at the very top of the income public. Is there a time perhaps when we perhaps we ought to consider this at ladder. We have people come to the decide maybe the way we create new the top of the list. Why not make this floor of the Senate and say the big pri- jobs in America is to put the economy change now? Why not go back to the 50 ority here is to exempt dividends from back on track and say we are not going percent? That is where it was. Why not taxation. to double the debt, we are not going to say that senior citizens—those who First of all, most dividends are not run the largest deficits in history, and reached their declining income years— double taxed. I will make that point. we are not going to tell the working are those who ought to get the tax Second, if you want to talk about dou- folks who represent, in my judgment, breaks? ble taxation, why talk about double the engine of our economy and of our That is what my amendment does. It taxation just for the top of the income country: By the way, you do not mat- is fairly simple. Senior citizens are liv- heap—those who clip coupons to get ter much. ing longer and better lives. Really, peo- unearned income to the tune of mil- I will finish my remarks. I am going ple say we have all these problems with lions of dollars a year? Why talk about afield. The fact is, in the Senate, you Social Security and Medicare. Do you them being exempt? Why do you have a speak when you have the opportunity know what they are? They are prob- philosophy that says let’s exempt in- to do so. lems of success. Just go back to the old vestment and tax work? What kind of My amendment deals with senior life expectancy. People are living value system is that? Nobody is saying citizens. I am trying to describe some longer and better lives. I know a let’s exempt work, let’s just exempt in- of the circumstances that would per- woman who is 89 years old. She bought vestment. I don’t understand that. suade senior citizens to think they a car a while back, and she used 5-year The tax system ought to be about have not been treated fairly in this financing. God bless her. I have an values. But if you are talking about bill, and this is a way to remedy that.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00010 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6157 It seems to me both political parties ago. We are going to do it because we stand she is only going to take about 5 have something to offer this country believe the 8 million people who are minutes. that is constructive in discussing tax- now required to pay $1,500 apiece in ad- The PRESIDING OFFICER. The Sen- ation and economic policy. I happen to ditional taxes ought to be relieved of ator from Iowa has that right. Without think those on the Republican side are that burden. objection, the Senator from Alaska is a little better at trying to make sure As I indicated, I have on two previous recognized. we tamp down spending. They are a lit- occasions voted to repeal this tax. It NATIONAL POLICE WEEK 2003 tle better at that than we are. Some- has never gotten done. I know there is Ms. MURKOWSKI. I thank the Chair. times I do not think they have the disagreement as to whether it should Mr. President, I do appreciate the con- judgment they should have when they get done. I believe it should get done sideration of my colleagues and the tamp down spending, but the fact is because, frankly, this is double tax- chairman in allowing me a brief oppor- they are a little better at it than we ation. It is not just dividends. It is this tunity to speak. I do recognize that are. as well. taking this time out of the very impor- It seems to me we are a little better I am proud to offer this amendment tant consideration of the legislation at the notion of how you do things that with my colleague, Senator BAUCUS that is before us is significant, but I re- give people confidence in the future from Montana, and I assume many mind Members that the events that that can provide the buoyancy, the other colleagues would like to cospon- happened last evening, at the National growth, and the lift to the American sor it before they vote. I hope we have Law Enforcement Officers Memorial, economy. Getting the best of what a vote on it. are equally significant. I will take a both parties have to offer is better I did not mention this will be paid for few moments this morning to speak to than getting the worst of either. I by offsets. We would not accelerate the that. think often we get the worst either scheduled rate reductions in the high- Last evening, some 10,000 law en- party can offer this country. est rates, and we would strike the divi- forcement officers, representing all My proposal is just to begin to amend dend income relief in the bill. We do corners of our Nation and foreign this tax bill. I am not saying the bill is not increase taxes. If someone stands lands, gathered at the National Law worthless. There are some provisions in up and says what you are going to do is Enforcement Officers Memorial to pay this bill that have great worth, some increase taxes with your offset, that is tribute to 377 of their colleagues and provisions I support. The child tax not the case. There is no increase in comfort their survivors. credit and others, I think, make sense. taxes in this amendment, but we do not Each of the 377 honorees bears the We should do what is contained in accelerate the top rates and, at the distinction of having lost his or her life these provisions, even as we try to put same time, we decide not to proceed in the line of duty. The attendees rep- this economy on track so that the with the dividend income tax relief in resented a cross-section of many dif- numbers add up. the bill, the bulk of which goes to ferent agencies that make up the law There is not any way the numbers upper income Americans. enforcement community, including add up. My colleague, Senator CONRAD I hope, perhaps, this amendment will Federal law enforcement officers, State from North Dakota, has spoken on the be accepted on a voice vote. If that is troopers, municipal cops, sheriff’s dep- floor at great length about this issue. not the case, we will have some debate uties, corrections officers, game war- We also were together yesterday at a and then I am hoping we will have a dens, and National Park Service rang- presentation. Even as we do these successful record vote. Perhaps I will ers. Most came in uniform. Many were things, some of which have great worth be inspired to speak again after I have joined by their spouses. Many were and some of which, in my judgment, heard the debate on this amendment. I joined by their children, not only those are just waving a flag to the upper in- yield the floor. who are old enough to understand, but come folks in America to say our party The PRESIDING OFFICER. Who also the little ones. is still with you—those on the other yields time? The Senator from Iowa. At dusk, thousands of candles were side of the aisle—it seems to me you Mr. GRASSLEY. Mr. President, the lit, and the names of each of the 377 de- need to do them in the context of say- Senator from Alaska has asked for parted officers was read. ing to the American people that the fu- time to speak as in morning business The purpose of this annual event is ture of this economy is not going to be for whatever time she needs. I will be not to reflect on the events that pre- a future mired in debt and choking on glad to yield time to the Senator from maturely ended the lives of these brave yearly deficits. Alaska. officers, but those who created this me- I will make one final point. As we do Mr. REID. Mr. President, it is my un- morial remind us that ‘‘It is not how this, understand that what is being derstanding the Senator is asking that these officers died that made them he- proposed now is the largest deficits in in the form of a unanimous consent roes, but how they lived.’’ history, in fiscal policy, on top of the agreement she speak in morning busi- This year, the names of three Alas- largest trade deficits in history. Those ness. kans were added to the memorial. Two two problems together potentially can Mr. GRASSLEY. Off our time, not of the three died in the line of duty in cause very significant problems for the extra time. 2002, while the third died in the line of value of this country’s currency. Mr. REID. I am not going to object to duty in 1917, in the days when Alaska As Mr. Friedman says in ‘‘The Lexus this request, but I do want everyone to was still a territory. This third indi- and the Olive Tree,’’ when the elec- understand that the majority leader vidual was added to the memorial as a tronic herd runs and begins to move to asked that we expedite the tax bill. We result of diligent research by the City other currencies, it has a profound im- are trying to do that, but speaking in of Seward, AK and its police depart- pact on your economy, and we should morning business is not going to expe- ment. I would like to introduce these be concerned about that. dite consideration of this bill. There is exemplary Alaskans to the Senate. To come back to my amendment, limited time. We have 7 hours on our Correctional Officer James C. this amendment is about priorities— side. We are going to try to spend all 7 Hesterberg, was known as ‘‘Jamie.’’ At what is important and what is not; hours on tax matters. I want everyone age 48, he was killed in the line of duty. what should we do and what should we to understand this when the majority A 19 year veteran of the Alaska Depart- not do. It seems to me one of the high leader is asking why this is not moving ment of Corrections, he was contem- priorities for us in dealing with reduc- more quickly plating retirement in September 2003. ing taxes ought to be to say to senior Mr. GRASSLEY. Let me explain why On November 19, 2002, Officer citizens, among them the greatest gen- the distinguished Senator from Nevada Hesterberg, and his partner, Officer eration and others who are struggling is wrong. We are going to take it off Dennis Nilsen, were transporting seven and who are trying to make sure they the time on the bill, not extra time. prisoners to the Spring Creek Correc- get through these difficult times, those This will come off the 7 hours we have tional Center by van on a snow and who have reached their lowest income on the bill. slush covered highway. Their van was years: We are going to repeal that por- I yield whatever time the Senator struck by a large semi truck, killing tion of the law that was passed 10 years from Alaska may consume. I under- Officer Hesterberg and four prisoners.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00011 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6158 CONGRESSIONAL RECORD — SENATE May 14, 2003 Officer Hesterberg was the first em- making it a part of your lives. In valor, am glad they have the opportunity to ployee of the Alaska Department of there is hope. observe the activities of this body. Corrections ever to die in the line of I yield the floor. In honor of their visit, I want to talk duty. He leaves behind his wife, Debra, Several Senators addressed the a while on the importance of young his three children, Scott, Catherine Chair. people understanding how Government and Mark, his mother and father, and The PRESIDING OFFICER. Who works. So that they can better follow many good friends and fellow officers. yields time? along, and since I trust the students The people of Alaska mourn his loss. The Senator from Minnesota. are familiar with it, I am going to use Mr. COLEMAN. Mr. President, I ask Jamie’s commitment to protecting parts of the Twin Cities Academy mis- unanimous consent that I be permitted Alaska’s citizens and to fulfilling the sion statement as an example. to speak as in morning business for up mission of the Department of Correc- The Twin Cities Academy mission to 5 minutes and that the time be tions will not be forgotten. stresses collaboration between the charged against the majority’s control Thomas Patrick O’Hara, at age 41, school, parents, and the community to of time on S. 1054. was a protection ranger and pilot for develop each child’s talent, potential, Mr. DORGAN. Mr. President, reserv- and character. When this process suc- the National Park Service at Katmai ing the right to object, I shall not ob- National Park and Preserve in the ject, but I want to clarify with the ceeds, the mission statement says that Bristol Bay region of Alaska. On De- Chair, do I control the time on the the end result is a group of productive cember 19, 2002, Tom and his passenger, amendment on this side? citizens who will contribute to sus- a Fish and Wildlife Service employee, The PRESIDING OFFICER. The Sen- taining American democracy. were on a mission in the Alaska Penin- ator does, and the Chair recognizes the Thomas Jefferson, one of the great sula National Wildlife Refuge. Their Senator from Minnesota as the first leaders and legislators of this Nation, plane went down on the tundra. When person seeking recognition. had a vision for public schools and the the plane was reported overdue, a res- Mr. DORGAN. Mr. President, fol- role they were to play in America, to cue effort consisting of 14 single engine lowing the presentation, then, it would create a public of informed and en- aircraft, an Alaska Air National Guard be my opportunity to yield time; is gaged citizens capable of sustaining the plane, and a Coast Guard helicopter that correct? Republic he and his colleagues had quickly mobilized. Many of the single The PRESIDING OFFICER. That is formed. Twin Cities Academy had mod- engine aircraft were piloted by Tom’s correct. eled its vision after these ideals, and friends. The wreckage was located late Mr. REID. Mr. President, reserving they are committed to fostering pro- in the afternoon of December 20. The the right to object. ductive citizens, as stated in its mis- passenger survived the crash, but The PRESIDING OFFICER. The Sen- sion. Ranger O’Hara did not. ator from Nevada. Having a strong history program at Tom O’Hara was an experienced pilot Mr. REID. My dear friend from Iowa school is a good thing for young people with 11,000 hours as a pilot-in-com- was wrong in saying that the time like my daughter Sarah. Students need mand. He was active in the commu- would be used up anyway, and here is to understand how the three branches nities of Naknek and King Salmon the point I am making: We have been of Government work together. Also im- where he grew up, flying children to asked to move the tax bill. That is port is having the opportunity to come Bible camp and coaching young wres- what we should be doing. We have to Washington and witness first hand tlers. Tom provided a strong link be- turned down a number of requests on the rights and duties of citizens. It tween the residents of Bristol Bay and this side of people wanting to speak, no helps them realize what it means to the National Park Service. matter how important it might be, on celebrate freedom, to celebrate oppor- Tom leaves behind his parents, Dan issues other than those relating to the tunity, and to be an optimist and have and Sharon O’Hara, who are in Wash- tax bill. The time used on the bill talk- a hopeful spirit. ington, DC, today and who are distin- ing about morning business, no matter My good friend and colleague Senator guished leaders in the Bristol Bay re- how important it might be, does not ALEXANDER understands the impor- gion, his wife Lucy, and three children, deal with the tax issues of this coun- tance of sharing these values with the Jonathon, Nicole and Heidi. I also had try. The majority leader has asked us next generation, which is why he intro- an opportunity to meet with his broth- to cooperate in trying to move this bill duced The American History and Civics er this morning. The deputy director of along. It is obvious as the day is clear Education Act, an act which will help the National Park Service character- that we are not moving this along us ensure young people grow up learn- ized Tom as one of its finest and he will when we are talking about extraneous ing what it means to be an American. be missed deeply by all of us. matters. That is the point I am mak- I was pleased to have the opportunity The third Alaskan, Charles H. Wiley, ing. I have no objection. to cosponsor this legislation. came to Seward from California to The PRESIDING OFFICER. The Sen- When their school trip comes to an work on the construction of the Alaska ator from Minnesota. end, I hope that my daughter Sarah Railroad. He was appointed to the post BRING YOUR DAUGHTER TO WORK DAY and her schoolmates have thoroughly of night marshal in April 1917. On the Mr. COLEMAN. Mr. President, today enjoyed all that they experienced in evening of October 2, 1917, Marshal I am engaging in my own version of Washington, particularly my version of Wiley went to the Overland Hotel in ‘‘Bring Your Daughter to Work Day.’’ ‘‘Bring Your Daughter to Work Day.’’ Seward to investigate an incident. As we all know, this day does not fall I mentioned earlier in this statement Marshal Wiley knocked first, but en- on May 14, nor does it involve the how I hoped to give them an under- tered the hotel room when nobody an- daughter bringing along 40 of her standing of how Government works. If swered. He was met by a round of gun- friends, but this was the unique situa- these Twin Cities Academy students fire. Marshal Wiley died two days later. tion I faced today when my daughter were to look up the word ‘‘understand’’ I thank the Chair for allowing me to Sarah stopped by my office with some in a thesaurus, they would see as a syn- share a bit of the lives of these brave of her schoolmates from the Twin Cit- onym the word ‘‘appreciate.’’ I hope at Alaskans. I want to thank the organi- ies Academy in St. Paul, MN. the end of the day, these students have zation Concerns of Police Survivors Like many other students from even a greater appreciation, not just and the staff of the National Law En- across the Nation, seventh and eighth understanding, of this great institution forcement Officers’ Memorial for their graders from the Twin Cities Academy and our process of Government that hard work in organizing the candle- are in Washington this week for a makes us the greatest Nation in the light memorial last evening. school trip. Their plans include visiting world. To the children of Jamie Hesterberg the countless museums and monu- I yield the floor. and Tom O’Hara, I to say, your fathers ments throughout the city, a Capitol Mr. DORGAN. I yield 5 minutes to lost their lives doing something impor- tour, and also the chance to be with us the Senator from Montana. tant for Alaska and the Nation. Public today in the Senate Chamber. The PRESIDING OFFICER. The service is an honorable profession and I I want to again welcome Sarah and Chair advises the managers of the bill hope that each of you will consider her schoolmates to the Senate, and I and those controlling time that there

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00012 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6159 is no requirement that the Senator changed the rules in the middle of the It would be to everyone’s best inter- speak on this legislation when yielded game for people receiving Social Secu- est to get that out of the way as quick- time. rity benefits. I will never forget. Sud- ly as possible and vote on this very im- Mr. BAUCUS. I thank the Senator. denly that was enacted. It came out of portant amendment offered by the Sen- The amendment the Senator from the blue, an additional tax on our sen- ator from North Dakota. North Dakota is offering, that I co- ior citizens and their benefits. We Mr. DORGAN. I yield 10 minutes to sponsor, is a tax cut amendment. Most began to tax Social Security benefits the Senator from North Dakota, Mr. Members of this body like to cut taxes. at a higher rate for individuals at cer- CONRAD. That is what this amendment is all tain income levels. Mr. CONRAD. Mr. President, I ask about. It is cutting taxes. The second flaw in 1993, we failed to unanimous consent I be named as a co- Second, which group is getting the adjust the income levels for inflation. sponsor of the amendment of my col- benefit of the tax cut under this For the past 10 years, there has been no league. amendment? Under the amendment of- adjustment. This means more and more The PRESIDING OFFICER. Without fered by the Senator from North Da- seniors will be subjected to this tax as objection, it is so ordered. kota, cosponsored by myself, it is sen- each year passes. We need to correct Mr. CONRAD. Mr. President, I wish ior citizens who get the benefit of the those flaws. my colleague a happy birthday. This is tax cut. Again, this debate is about choices. his birthday, and I hope it is a happy I join the Senator in offering this We make choices here. Life is making one for him. I hope what helps make it amendment. It repeals the 1993 tax of choices. We think the choice here is a happy birthday is this amendment Social Security benefits, the tax this clear. If we have $150 billion to spend, passing. body imposed on certain senior citizens spend it on seniors. As such, we offset This is a good amendment. This is re- in 1993. the cost of our amendment to repeal versing a tax increase previously im- We are currently debating a $350 bil- the tax to Social Security benefits. posed on recipients of Social Security. lion tax cut reconciliation bill. This That is the purpose of the underlying That was part of a deficit reduction bill is about priorities, about values. amendment by striking the dividend plan back in the 1990s that helped get That is what budgets are about. Part of proposal in the bill and also striking us back on track. We did that. Now in the budget is $350 billion in tax cuts. reductions in the top rates. the context of this bill, since there will The budget we are working under that Again, this is a tax cut amendment. clearly be tax reductions, we ought to was adopted by the Congress set those Those seniors I mention are currently do it in a way that is fair and balanced numbers. I am pleased there was a paying that tax. We are proposing that and that recognizes a tax increase pre- commitment to limit that reconcili- tax be repealed. That is a tax cut viously imposed that could be reversed ation bill through conference to $350 amendment. It is being paid for by a at this moment. billion. That was the commitment promise to the future. Those provisions My colleague mentioned what is hap- made by certain key Senators on this of the Finance Committee dealing with pening to the Federal debt under the side. dividends are not currently in effect. President’s budget plan. This chart It is within this tax reconciliation They are future promises, we suggest, shows it in graphic form. The debt of bill we debate and decide how the to be repealed so our seniors get the the United States is absolutely sky- changes in revenues and outlays affect benefit of the repeal of the taxes im- rocketing. It is over $6 trillion now, our constituents. The debate is about posed upon them in 1993. and it will be over $12 trillion in 10 who the $350 billion benefits: do we give A couple of numbers: Repealing the years if the President’s plan is adopted, 1993 tax of Social Security benefits gets more money to some taxpayers or oth- including the overall tax bill before the an average of $1,500 into the hands of 8 ers? The choices are real. We are here Senate. million seniors. Contrast that with the to make decisions. We are here to de- All of this is at the worst possible dividend proposal in the Finance Com- cide. time. Right now, the trust funds of So- mittee bill. The dividend proposal in We need to make sure our Nation’s cial Security and Medicare are running the bill gets an average of $19,000 to seniors receive a significant benefit. If surpluses. The blue bar is the Medicare fewer than 5,000 seniors. Again, what is this bill before the Senate will allocate trust fund; the green bar is the Social better: $1,500 in the hands of 8 million benefits to certain groups, certainly Security trust fund; the red bars are seniors or $19,000 in the hands of the senior citizens in our country should be the tax cuts, both those enacted al- most wealthy, only 5,000 seniors? And a main beneficiary of a tax reduction. ready and those proposed. You can see fewer than 1 million taxpayers, regard- This amendment offered by the Sen- that when the trust funds that are now less of whether they are 65 or 25, would ator from North Dakota is just that, a running big surpluses turn cash nega- benefit from the top rate reductions. tax reduction for senior citizens. It re- tive within the next decade, at that Remember, there are 130 million filers very time the cost of the tax cuts pro- peals the 1993 provision which imposed in America. Fewer than 1 million tax- posed by the President explode, driving taxes on certain senior citizens. payers who are not seniors, who are be- The bill reported by the Finance us deep into deficit and deep into debt. tween 65 and 25 get reductions from the Committee provides a tax break for That is right as the baby boom genera- top rate reductions. taxpayers with dividend income. That Members on the other side of the tion retires, right as we are least able proposal costs $81 billion over 10 years aisle have supported this in the past. to have deficits. You don’t have to take out of the $350 billion. That proposal Repealing the 1993 Social Security tax my word for it or the word of the Con- provides a few seniors, not very many, is a better choice for our constituents gressional Budget Office; this is the a few with a small amount of tax relief; than enacting dividend proposals in the President’s own analysis of the long- 77 percent of seniors in our country top rate reductions contained in the term effects of his plan. will receive no relief, no tax reduc- underlying bill. Some have said these deficits are tions, under the Finance Committee Mr. REID. Will the Senator yield? small. The deficits currently are at bill on dividends; 77 percent of Ameri- Mr. DORGAN. Mr. President, I yield 2 record levels. We are going to have the cans do not receive any of the $81 bil- minutes to the Senator from Nevada. biggest deficit this year we have ever lion that will go to very few Ameri- Mr. REID. Mr. President, the amend- had in our history. That is right here. cans, the most wealthy, the least in ment offered by the Senator from But look where we are headed, ac- our country. North Dakota will be voted on as it cording to the President’s own anal- In contrast, our amendment will pro- stands. If there is any suggestion that ysis. This is from his budget document. vide 8 million seniors with a signifi- there will be an offer or attempt to sec- It shows deficits now are small com- cant tax cut. All the cost of this goes ond-degree the amendment or somehow pared to what they will be, even back to America’s seniors. That means not give us a straight up-or-down vote, though they are at record levels now. $150 billion over 10 years is put back we will continue to offer this second- These are the biggest deficits we have into the pockets of our senior citizens. degree amendment on other things. ever had, and they are tiny compared The current law enacted in 1993 has There will be a vote on this amend- to what is to come if we adopt the two significant flaws. First, in 1993 we ment. President’s plan, because the costs of

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00013 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6160 CONGRESSIONAL RECORD — SENATE May 14, 2003 the retirement of the baby boom gen- Passing these tax cuts will worsen the penny of Social Security surplus over eration explode at the very time the long-term budget outlook, adding to the na- the next decade to pay for these tax costs of the President’s tax bill ex- tion’s projected chronic deficits. cuts. What a profoundly mistaken pol- plode. They conclude: icy. Some on the other side are saying if To be effective, a stimulus plan should rely The PRESIDING OFFICER. The time you cut taxes you are going to get on immediate but temporary spending and of the Senator has expired. Who yields more revenue. Let’s do a reality test. tax measures to expand demand, and it time? They said that 2 years ago. This was should also rely on immediate but temporary Mr. BAUCUS. Mr. President, how incentives for investment. the range of possible outcomes, looking much time is remaining on both sides? forward, that was given to us 2 years It is not just 10 Nobel laureates. This The PRESIDING OFFICER. The Sen- ago by the Congressional Budget Of- morning a distinguished Republican ator from North Dakota has 20 minutes fice. They adopted the midpoint of this economist was quoted in the Wash- on the amendment. The Senator from range. That was what told them we ington Post reacting to a plan to Iowa has 1 hour. were going to have nearly $6 trillion of phase-in and later sunset the Presi- Mr. DORGAN. Mr. President, I was unable to hear. surpluses over the next decade. dent’s dividend proposal. Here is what The PRESIDING OFFICER. The Sen- Republicans said, Oh, wait a minute, he wrote in a website editorial: ator from North Dakota has 20 min- that is too conservative. If you cut Administration sources admit that divi- utes. The Senator from Iowa has an taxes, as we did 2 years ago, you will dends will likely decline relative to today under this plan between now and 2005. hour. get much more revenue. They are mak- Mr. DORGAN. I ask if the Senator ing the same claim now: If we cut taxes Dividends are going to decline. How can that be a harmless event, given from Iowa wishes to use some of his again, we will get more revenue. time at this point. Let’s look back at history. Let’s look that increases in dividend payments are viewed to be so wonderful? The PRESIDING OFFICER. The Sen- at the record. What it shows us is here This Republican economist, distin- ator from Iowa. is what actually happened. This is Mr. GRASSLEY. Mr. President, I guished Republican economist whom what the projections were; this is the yield myself such time as I consume. midpoint of those projections that said they have called to testify before com- I have enjoyed listening to this de- there would be nearly $6 trillion of sur- mittees of Congress repeatedly con- bate. It is just like being in another pluses. This red line is what has actu- cluded: world. The reason I say that is, why do ally happened. We didn’t get more rev- Clearly, this proposal is one of the most you think that we tax 85 percent of So- enue. We didn’t get more surpluses. We patently absurd tax policies ever proposed. cial Security income for certain Amer- got less revenue and no surpluses. In- This is from a Republican economist icans in the higher income tax brack- stead, we got deficits, massive deficits, whom they have called repeatedly be- ets—I would say even in the middle-in- record deficits. Now we get the same fore committees to testify on economic come tax brackets—at 85 percent? That old song: Let’s just do another big proposals. was done in 1993. Do the people who round of tax cuts; we will get more rev- It is not just 10 Nobel laureates. It is have just spoken forget that every one enue. not just a distinguished Republican of them voted that increase, to have It didn’t work last time. It didn’t economist. It is even the people they the Social Security income be taxed at come close to working. In fact, we just have hired to do the analysis of their 85 percent of that income that has to got the latest numbers from the Treas- plan, Macroeconomic Advisers, hired be reported? Every one of the people ury Department. Revenue this year is by the White House, hired by the Con- who have spoken are responsible for running $100 billion below the forecast gressional Budget Office to do macro- that level of income reporting of 85 per- made just 7 months ago. They said, economic forecasting. Do you know cent being on the tax books. Why do based on the tax cuts of 2 years ago, we what they say? The President’s plan they want to repeal what they are re- would get more revenue. We are not will give you a little boost, less than sponsible for passing? During the de- getting more revenue. In fact, if this half of 1 percent of additional GDP, bate on the tax bill, every one of the trend continues this year, we will have until 2004. Then look: straight down. Democratic Senators now serving in the lowest revenue as a percentage of That is what this policy provides. It the Senate, except for Senator BINGA- our gross domestic product since 1959. hurts economic growth. In fact, past MAN from New Mexico, voted to have All those who claimed we were going 2004 it is worse than doing nothing. this money taxed. Now they are trying to get more revenue were wrong. The That is a great economic growth plan. to take it out. President was wrong. Our Republican That is a great jobs plan. It is worse On June 24, 1993, there was an amend- colleagues who told us we were going than doing nothing, according to the ment offered by Senator LOTT to to get more revenue with the big tax people they have hired to give them ad- change the amendment which was in cut enacted 2 years ago were wrong. vice on what the results will be. the Democrat tax increase bill at that They were not wrong just by a little It is not just those Nobel laureates, time to not report 85 percent of Social bit; they were wrong by a lot. it is not just a distinguished Repub- Security income for taxation. The roll- That is why some of the most distin- lican economist, it is not even the firm call shows that the motion to table was guished economists in the country are the Congressional Budget Office and agreed to 51 to 46. The 51 Members who telling us that this tax cut plan is not the White House have hired to do mac- voted at that particular time were the going to do the job. These are the roeconomic analysis. This is the chair- ones who were voting to keep the level names of the economists who signed man of the Federal Reserve: ‘‘Green- of Social Security income that was this statement. Ten of them are Nobel span Says Tax Cut Without Spending taxed at 85 percent and which needed laureates in economics, the most dis- Reductions Could Be Damaging.’’ to be reported. Every Democrat still tinguished economists America has He is saying: serving in the Senate voted to table produced. This is what they say: With a large deficit . . . you will be signifi- Senator LOTT’s amendment. Every Re- cantly undercutting the benefits that would publican voted not to table the Lott The tax cut plan proposed by President be achieved from the tax cuts. Bush is not the answer to these problems—of amendment, which meant that every weak economic growth. The President of the United States is Republican was voting against that. Regardless of how one views the specifics, not proposing cutting spending. He is We had the support of Senator BINGA- there is wide agreement that its purpose is a proposing increasing spending and he is MAN—the only Democrat from whom permanent change in the tax structure and proposing massive tax cuts when we al- we had support. not the creation of jobs and growth in the ready have record deficits. There can They wonder why I am amused? If near term. The permanent dividend tax cut, only be one result: massive deficits, they think it is so bad today, why in particular, is not credible as a short-term massive debt, that will hurt economic didn’t they think it was bad 10 years stimulus. As tax reform, the dividend tax cut is misdirected in that it targets individuals growth, that will hurt the economic se- ago? And we wouldn’t even be debating rather than corporations, is overly complex, curity of the country, and finally, on this issue. It looks to me as if they and could be, but is not, part of a revenue- an amendment that involves Social Se- want to maybe detract from the mis- neutral tax reform effort. curity, that will take virtually every takes of the past. I don’t know.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00014 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6161 But also, earlier this year, on an do more economic good if the 110 mil- BINGAMAN, every Democrat in the Sen- amendment by Senator BUNNING to the lion taxpayers spend it or invest it ate today voted for that back in 1993. Budget Act, the very same Members than if I, Senator GRASSLEY, and 534 Now they want to try to cover up their opposing this amendment voted others here in DC are going to make votes supporting this tax, and they against the very same amendment that decision. We have to believe that want to do it by destroying the under- when Senator BUNNING offered it. What if the money is in the pockets of 110 lying jobs and growth bill. has happened in the last month? Do million taxpayers and they spend it or This is how they destroy it: The Dor- they realize that maybe the vote at invest it, it is going to do more eco- gan amendment strikes our efforts to that time was wrong and they have to nomic good. It is going to turn over reduce all marginal tax rates above 10 have cover? I don’t know. But every more times in the economy. It will re- percent. The efforts to reduce marginal one of the Members who are proposing spond to the dynamics of our free mar- tax rates for the middle class are elimi- this amendment or speaking for it ket economy rather than a political de- nated by this amendment. As a result, voted just the opposite way on Senator cision being made about what to do a single mom making $40,000 in taxable BUNNING’s amendment. That amend- with it. income will see no reduction in the tax ment was defeated 48 to 51. Obviously, I believe people on the on her small pay increase. A family But there are bigger things to worry other side of the aisle have the attitude with taxable income of $70,000 will see about than how people voted in the that we in Congress know better than no reduction in their marginal tax past. I want the public to understand they do how to spend the taxpayers’ rate. that there is some game playing going money. If we are going to have a tax The Dorgan amendment takes away on here. We are talking about serious reduction, that will mean less money our bill’s tax cuts for middle-income business as well. We are talking about for us to spend. But it ignores the eco- Americans. The Senator from North a jobs bill before the Senate to give tax nomic good that comes from private Dakota says this isn’t a tax increase. I relief to American working men and sector investment and private sector would like to have you tell that to the women so they can have more money spending as opposed to public sector single mom, who is one of the targets in their pockets. spending. of this amendment, who, on her pay To get the cover that some people I think there is very much an incon- raise, will not see a reduction in her need for previous votes, they are going sistency here. What we are talking tax. A vote for this amendment is, in to take tax decreases away from mid- about is a $430 billion tax reduction fact, a tax increase, no matter how the dle-class Americans to pay for that. I package—net $350 billion. As we have authors want to try to dress it up. will be a little more specific on that in been told, we have been led to believe I yield the floor. The PRESIDING OFFICER. Who just a minute. that this is responsible for doubling the I have to repeat something I said in yields time? national debt. This tax package is only Mr. DORGAN. Mr. President, I yield my opening remarks. We just heard a one-half of 1 percent of all the dollars myself such time as I may consume. speech on the debt situation which that are going to be collected by the The PRESIDING OFFICER. The Sen- might be forthcoming if we grow the Federal Government under existing tax ator from North Dakota. economy. Reducing taxes is one way to law over the next decade. That is going Mr. DORGAN. Mr. President, this grow the economy and will not have to be $24.7 trillion. Tell me things are was an interesting and clever argument the debt situation we found with the so tight here in Washington, DC, that to listen to. I have great respect for my growth we had in the 1990s. We paid somehow one-half of 1 cent on the dol- colleague who chairs the Finance Com- down the national debt $550 billion. lar left in the taxpayers’ pockets is mittee. We have worked on many We hear about this debt situation. going to be responsible for doubling the issues together. But I listened to his My friends on the other side of the national debt. No. What is going to be argument, which was more about mo- aisle are worried about the debt. They responsible for doubling the national tives with respect to this amendment said if we adopt the President’s plan, debt—if it were to happen; I don’t than it was about merits. we are going to have greater debt. If think it is going to happen—is not be- It is, I guess, perfectly plausible to they are so concerned about the debt, cause the people of this country are talk about the motives of others. I why didn’t they offer all of their undertaxed; it is because this Congress won’t do that at this moment, but he amendments on the budget bill about a overspends. was describing the motives of people month ago? They wanted to take There again I would remind the Sen- dealing with this amendment. Let me money away from the tax reduction as- ator from North Dakota, the distin- talk a bit about the merits and correct pect of the budget. It begins at the bot- guished ranking member of the Budget some of the misstatements, if I might, tom line. They took money away from Committee, the President’s plan does and then describe why this is an impor- tax decreases and spent it someplace not follow the pattern of the last few tant amendment. else. If they are concerned about the years, where back to back we had 9- Let me take the last point first. My national debt, it seems to me—and percent increases in domestic discre- colleague says this is going to take they believe that one more dollar com- tionary spending each of those years. away the tax cuts for middle Ameri- ing into the Federal Treasury is going But the President’s program, plus the cans. Nonsense; simply untrue. Is this to reduce the national debt—they budget of this Congress, has domestic going to take away the tax cuts for the shouldn’t have been offering amend- discretionary expenditures not at 9 per- child credit, which is going to be very ments to spend it someplace else. But cent but at 4 percent. Now, yes, that is significant to that single mom? Does they are very consistent in doing that. an increase. That is an increase, but this take that away? The answer is no. Amendment after amendment after that is an increase that is sustainable So if someone says this takes away amendment took money away from the over the long haul. Nine-percent budg- the tax cuts for middle Americans, tax reduction figure in the budget, et increases are not sustainable. they are wrong, just wrong. It is not which this bill is a result of, and spent We are in a situation where nothing supported by the facts. I will go it someplace else. around here surprises me anymore. The through a whole list of others that this Do you know why? I think there is a very people offering this amendment does not take away. difference in philosophy between my are the same ones who created this tax This does take away the tax cut that party and the other party. That dif- increase back in 1993. As I indicated, accelerates the rate reductions going ference in philosophy is very basic to they even voted against repealing the down to the 28 percent. It is not all this debate going on today. I just think tax just 2 months ago on the budget those above 10 percent, as my colleague people ought to realize that this is not resolution. suggested. But let me go back to the a Republican-Democrat fight, or some I think this is an amendment that is top and take his arguments one by one. little cat fight over some little bill in trying to fool the American people. The Senator from Iowa is right, this the Senate. Just about every Member on the Re- was put in place 10 years ago as part of There is the difference between one publican side has vehemently opposed a large plan. I was not happy it was party that believes money in the pock- the Democrats’ 1993 tax increase on So- there 10 years ago, but it was part of a ets of 110 million taxpayers is going to cial Security. Except for Senator plan we passed.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00015 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6162 CONGRESSIONAL RECORD — SENATE May 14, 2003 Twice, since that time, I have sup- cept two. On page 4 of that conference answer ought to be yes. My hope is ported efforts to get rid of this tax on report, they say, if they get all they that enough colleagues will join me so Social Security—the 50 percent to 85 want—they grow the economy, they we can make this kind of affirmative percent—but we have been unsuccess- create the jobs, they get all they want change that will be helpful to cut taxes ful. The question now is, Are we willing in budget and appropriations and tax for 8 million senior citizens to the tune to cut taxes now by abolishing the 85 cuts and so on—they say they will have of $1,500 a year. These are taxes that percent back down to 50 percent? That a $12 trillion debt in the year 2013. This ought to be cut. I hope my colleagues is the question for us now. isn’t a case of, well, if we grow the will support this amendment. As a result of the 1993 new economic economy, the debt situation will not One more time. There are a lot of mi- proposal, which included this piece, we happen. No. This is what they predict rages created in this Chamber, a lot of had unprecedented economic growth will happen if they get all they want. word castles being built: We will grow; that turned this country around, So I would refer you to page 4 of the we will create jobs; we will grow the turned the biggest budget deficits then conference report, that you voted for— economy; we will expand all these into the biggest budget surpluses we I say to those who voted for it—and ask things that we hear about. have ever had. Now, we have people yourselves: Were you creating a plan It is not contestable that we have a who are still huffing and puffing that it and supporting a plan that doubles the fiscal plan passed by one vote in this really was not the result of that eco- Federal debt? The answer is yes. Case Congress that says: Let us borrow a nomic plan, but, notwithstanding that, closed. No more discussion about that, great deal of money, provide very large the fact is, that put this country back I am sorry. tax cuts mostly to upper income folks, on track. This piece was a part of it. I Now, the question was asked: Do we double the Federal debt from $6 to $12 am not pleased it was, but it was. As I want to repeal this or don’t we want to trillion, increase funding on defense, said, I voted previously to try to get repeal this? The reason I have offered increase funding for homeland defense rid of this piece. Now we have the op- the amendment is, yes, I think we and security, and then shrink domestic portunity. ought to repeal that provision. I did discretionary and at the same time If the prospect of the majority is to not like that provision when it was put double the Federal debt. That is a leg- come to the floor of the Senate and in, but it was. It was part of a larger acy we will leave to our children if ev- say, let’s have very large tax cuts, the plan we all protected in order to make erything goes as is predicted. question is, it seems to me, Where do that plan work. The fact is, I did not I happen to think this fiscal policy you start? Who benefits most? like it then. I do not like it now. I makes little sense. If we are going to Wouldn’t it be a good thing to cut think we ought to repeal it. cut taxes, let’s make sure we have a these taxes so 8 million senior citizens The question now is not, What did priority in terms of the value system who are paying $1,500 a year more in you think about someone doing that 10 we want to exhibit as we cut taxes. I taxes as a result of that change 10 years ago? The question is, In the year say those who have reached their de- years ago would be able to begin to pay 2003, do you support repealing this pro- clining income years and who are now less as a result of our repeal of that vision or don’t you? paying higher taxes because of this provision? This, in fact, is a tax cut for senior provision put in 10 years ago deserve My colleague said: Gee, there was citizens, 8 million of them who have the opportunity to see this provision just an amendment offered by Senator reached their declining income years repealed, and my amendment does ex- BUNNING on the floor of the Senate that and who have earned the opportunity actly that. dealt with this very issue. Total non- to go back to the provision we used to I yield 3 minutes to the Senator from sense. It was offered during the budget have where 50 percent of their Social Montana. debate, and the budget debate did not Security payments are counted as in- The PRESIDING OFFICER. The Sen- have anything to do with what we were come for tax purposes rather than the ator from Montana. going to do on specific tax cuts. That 85 percent. That is what my proposal Mr. BAUCUS. Mr. President, there can only be done with respect to the does. isn’t anybody in this body for whom I Finance Committee and on the floor of We are told that what this larger tax have higher respect and more affection the Senate. bill is about is putting money in the than the Senator from Iowa. I must say The Bunning amendment was a pro- pockets of American taxpayers. That is when I listened to his arguments posal to increase the overall tax cut by true. It will be borrowed, of course. We against this amendment, virtually $146 billion. But the Bunning amend- are going to borrow money to provide nothing was said that addressed the ment—if I just ask you to go read it— tax cuts. But if we are going to provide merits. In fact, there were some state- says nothing about this issue that I tax cuts, it is perfectly appropriate to ments which were a little bit mis- have as a matter of the amendment ask the question: What are the prior- leading. Lawyers like to call them red today. I assume my colleague will say: ities? Who ought to be first in line? herrings. That is when you say some- Everybody knew what he was doing. Those at the very top of the income thing to try to get people off track so No, you can’t do that during a budget ladder who earn the biggest dividends, they don’t think about the subject at debate. There is no vote during the should they be first in line? Is that who hand. It is called a red herring. budget debate that is going to affect edges up to the trough here? Or perhaps One of the red herrings we heard was what the Finance Committee does to should we take a look at the issue of that Democrats voted against this cut taxes at some point later. So the the tax burden on senior citizens and amendment in the past, and it was Bunning issue is a specious issue. especially the income they receive Democrats who voted for this increase We are told this is a jobs bill, and we from Social Security? in Social Security taxes back in 1993. are also told by my colleague as to this If this is about putting money in the That was 10 years ago. That is a dif- ‘‘debt situation,’’ don’t worry so much pockets of the American taxpayers, I ferent time, a different situation, dif- about that because we are going to say without respect to the motives of ferent circumstance. Back then the grow the economy and the debt isn’t those who disagree with me, if the mo- Congress voted to reduce deficits, and going to happen. This reminds me of tive is to put money in the pockets of that was part of a large deficit reduc- that old joke in the movies: Who are senior citizens who have had to pay a tion package. This is 10 years later, you going to believe, me or your own higher tax than they should have to 2003. We are faced with the question, eyes? Well, let’s take a look with our pay, this amendment gives you the op- within a $350 billion tax bill, how own eyes here. portunity to vote yes or no. should the tax cuts be allocated. That When somebody says, this doubling We can have people stand and steam is the question before us. of the Federal debt, from $6 to $12 tril- and bluster about other people’s mo- Many of us believe it is a far wiser lion, is probably not going to happen, tives, but in the end, we will vote on policy that seniors receive more of the let me refer you to the budget that was this. And the vote is going to be, do tax benefit as a result of the cuts than passed by this Senate, embraced by the you believe we ought to relieve senior is the case under the Senate Finance previous speaker and all on his side of citizens of this tax obligation they Committee bill. That is why we think the aisle, I believe—or almost all—ex- have had to pay? In my judgment, the the 1993 provision should be repealed

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00016 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6163 because then seniors will receive sig- to say to my friend from Montana, the for senior citizens—8 million of them nificant benefits if it is repealed, and distinguished ranking member of this who pay $1,500 a year, at this point, we believe that is a higher priority committee, that for this farmer to be more than I think they should pay. I than giving a lot more dollars to very called a lawyer, if he were not a good think the priority ought to be to cut few Americans who are the elite, the friend of mine, I would take offense. taxes for them at this point. Is it more extremely wealthy Americans. Regardless, before us is this amend- important to do that than to, as I said Repealing the 1993 tax on Social Se- ment that reduces the amount of So- earlier, cut dividend taxation? I think curity benefits gets an average of $1,500 cial Security income that must be re- it is. I think those individuals are in in the hands of 8 million Americans. ported for taxation. One of the issues I the highest income levels. Eight million seniors will receive, on didn’t mention in my debate against Again, I hope Donald Trump won’t average, a benefit of $1,500 under our the amendment is the fact that all the mind, but since he names everything amendment. Otherwise, if this amend- money raised from this tax goes into after himself, and he is a very success- ment does not pass, then by contrast, the Medicare health insurance trust ful businessman, he probably doesn’t under the committee bill, which gives fund. We all know the Medicare Pro- mind my using his name. He is at the dividends to all Americans tax free, a gram is in much more serious condi- top of the income ladder, and God bless few seniors, 5,000 seniors, will get tion than the Social Security Program. him. But it is a reasonable thing to $19,000. The Medicare trust fund has a drop ask: what is the priority? Is it pro- We are saying there should be a bet- dead date of 2026. The Social Security viding tax exemptions that will provide ter priority; that is, the money should trust fund has a drop dead date of 2042. large tax cuts to those at the top or to be given to people who are going to None of those dates are anything that provide tax exemptions for senior citi- spend it. It should be spread out more I am making light of, that they are so zens who have reached the lower part evenly rather than have the benefits, far off that we should not be concerned. of their income in their lives and are as in the Finance Committee bill, so We have to be very concerned. But peo- struggling to make it? heavily skewed to the Nation’s elite. ple ought to understand that to the ex- What I propose has nothing to do This should not be an elite bill. This tent this amendment is adopted, it with the debt. This doesn’t reduce the should be an American bill. This should would take money out of the Medicare debt. I am not saying it does. If we are be a bill for Americans, and American health insurance trust fund. And I going to cut taxes, the question ought seniors should be included as the rest don’t think we ought to be doing any- to be one of choice and priority. That of America. thing to weaken the Medicare trust is what this amendment is. I am going There are other provisions of the bill fund. I would rather refer to a point back to the question of debt because it that give tax benefits other than to made by the two Senators from North is the very reason I voted against the seniors. We believe seniors should get a Dakota, most often made by the spon- budget in the first place. We cannot significant part of the benefit. I strong- sor of this amendment. I cannot help come to the floor and say this debt sit- ly urge passage of the amendment. but ask both of these Senators who are uation ‘‘isn’t real’’ because it may not The Senator from Iowa also said trying to make an issue about this bill happen because we have this policy or there is a difference in philosophy: One by saying that this bill will increase plan that will grow the economy, and if party wants to put money in the pock- the debt. Somehow that just doesn’t and when we do these debts won’t ap- ets of people; the other does not. add up, when you consider the thrust of pear. That, too, is not a valid argument. their amendment. I am sorry, that just doesn’t wash. We are talking about whose pockets How does this amendment they have This plan is a plan that says if we get this money should be put into, if you before us reduce the debt? The bottom all we want, if we get this economic want to put it in those terms. We on line of the bill is exactly the same with growth, if we create these jobs, if our our side are suggesting that the people or without the Dorgan amendment. In plan is approved, we will then double whose pockets should receive the other words, it costs the same as the the Federal debt. Are we concerned money are the seniors, that they underlying bill. So, again, we have peo- about that? You bet your life we are. should receive the benefits, much more ple speaking on three sides of a two- Are some others around here concerned than is the case in this bill. In this bill, sided coin. Senator DORGAN’s amend- about it? No. There is a lot of thumb- the people who receive the money, ment will increase the debt, so I don’t ing of suspenders and saying, ‘‘Aw whose pockets get the money, are the hear any more about increasing the shucks, this doesn’t matter.’’ Well, it elite, the wealthy elite of America gen- debt on the part of the underlying bill, matters. Our kids and their kids will erally. That is not right. That doesn’t because with their amendment, we end inherit this debt. It will be their bur- work. It is not fair. It is not American. up exactly in the same place. den to pay this. We believe this should be a bill that is The PRESIDING OFFICER (Ms. We just came through a war, and God more evenly balanced for all Ameri- MURKOWSKI). The Senator from bless the soldiers we called on to ask to cans. North Dakota is recognized. fight that war. This country is enor- For all those reasons, I urge my col- Mr. DORGAN. Madam President, my mously blessed that it lasted only a leagues to support the amendment. It colleague from Iowa just won a debate very short time. But I think it is very is good for America. we were not having. That is an inter- unusual that America sends her sons The PRESIDING OFFICER. Who esting thing to do. I wasn’t proposing and daughters to war but says we don’t yields time? The Senator from Iowa. this amendment as one that would dra- choose to pay for it at this point. It is Mr. GRASSLEY. Mr. President, I ask matically reduce the Federal debt. I a very costly enterprise. Nobody is say- how much time remains on the Dorgan never suggested that or proposed it. ing we ought to pay for this. What we amendment on both sides. My point is, we lost on that issue said was: When you come back from The PRESIDING OFFICER. The Sen- when my colleague and his party the war, you can come back to the wel- ator from Iowa has 45 minutes; the passed in the Senate this budget which, come arms of your family and then in- Senator from North Dakota has 7 min- on page 4, says they want to double the herit the burden of paying the costs. utes. Federal debt from $6 trillion to $12 tril- That is my point about the debt and Mr. GRASSLEY. Forty-five minutes lion. They passed that without my deficit. on my side? vote. I didn’t support it. But I didn’t Have I used my 7 minutes? The PRESIDING OFFICER. The Sen- propose this amendment saying it will The PRESIDING OFFICER. Yes. ator is correct. reduce the Federal debt. I am saying Mr. DORGAN. I yield the floor. Mr. GRASSLEY. I rise to address a this: Since they won, and since they Mr. BAUCUS. Madam President, I couple of issues that have been pre- are going to cut taxes, the question is yield myself 5 minutes off the bill. For sented before we go to other people of choice and priority: Which of the the record, I want to make a correc- who want to speak. This is on the Dor- taxes ought to be cut? Which ought to tion. I know it was an oversight by the gan amendment. It might be in the be cut first? Senator from Iowa when he mentioned form of asking rhetorical questions or My amendment simply says I think that the Medicare trust fund will be what have you. But first of all, I want it is more important to cut these taxes somewhat in jeopardy in future years.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00017 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6164 CONGRESSIONAL RECORD — SENATE May 14, 2003 That is true, but I know it was an over- While we are talking about double The assistant legislative clerk read sight when he failed to state that, taxation, yes, some dividends—fewer as follows: under the terms of our amendment, the than 50 percent—are subject to double The Senator from Nevada [Mr. REID] pro- trust fund will be made whole through taxation in this country, but all of this poses an amendment numbered 560. transfers from the general fund over to is double taxation—all of this. Senior Mr. REID. Madam President, I ask the Medicare trust fund, so it will be citizens pay a tax on their wage when unanimous consent that the reading of made whole or kept whole and held they are working. When they retire, the amendment be dispensed with. harmless under this amendment. they get a Social Security benefit and The PRESIDING OFFICER. Without I know that was an oversight, but I pay a tax on now 85 percent of that. objection, it is so ordered. wanted to say that for the record. That is double taxation. The amendment is as follows: Mr. REID. Madam President, I sug- If, in fact, the culprit we are chasing (Purpose: To ensure that Social Security gest the absence of a quorum. is double taxation, why do we start surpluses are not raided in order to fund The PRESIDING OFFICER. The with dividends first? What about dou- tax cuts on corporate dividends) clerk will call the roll. ble taxation that results in Social Se- At the appropriate place, insert the fol- lowing: The assistant legislative clerk pro- curity recipients being taxed while SEC. ll. MECHANISM TO PROTECT SOCIAL SE- ceeded to call the roll. they work on the same income we will Mr. DORGAN. Madam President, I CURITY now tax when they retire? It does not ask unanimous consent that the order (a) CERTIFICATION.— make any sense to me. The only ques- (1) IN GENERAL.—Each year, beginning in for the quorum call be rescinded. tion is not one of motives of someone 2003, when the Final Monthly Treasury Madam President, my understanding Statement for the most recently completed is that when I asked whether I had used who might be supporting this or offer- ing it, as my colleagues suggested a fiscal year is issued, the Secretary of the the 7 minutes, the response was not ac- Treasury shall— curate and that there are, in fact, 3 moment ago, the question is when the (A) certify whether there was a on-budget minutes left. roll is called, do you believe we ought balance or surplus in that fiscal year; and The PRESIDING OFFICER. The Sen- to repeal this tax increase that senior (B) estimate whether there would be an on- ator is correct. citizens face? My answer is yes, let’s budget deficit in any of the succeeding 10 fis- Mr. DORGAN. I knew I talked fast, repeal this tax increase. That ought to cal years if section 201 of this Act takes ef- but I didn’t think I finished all 7 min- have a priority over other provisions in fect January 1 of the following year. utes then. I thank the Presiding Officer the bill. (2) ESTIMATE.—The calculations for the es- timate under paragraph (1)(B) shall be con- and the Parliamentarian as well. One last point. The Senator from Montana clarified the point with re- sistent with the baseline rules specified in I wanted to make a point in response section 257 of the Balanced Budget and to something said earlier that, well, if spect to Medicare. I appreciate he did Emergency Deficit Control Act of 1995, ex- this amendment passes, the tax cuts that. I failed to do it. This bill does not cept for the assumption that these provi- for American families will be gone. jeopardize the Medicare trust funds at sions take effect and remain in effect perma- That is simply not the case. I will de- all. They are restored in the bill. nently. scribe that I don’t, with this amend- I yield the floor. (b) DELAY IN DIVIDEND TAX CUT.—Notwith- ment, change the child tax credit. That Mr. LEVIN. Mr. President, I support standing any other provision of law or this the amendment offered by Senator Act, section 201 of this Act shall not take ef- moves to $1,000. It has nothing to do fect until January 1 of the year following— with that. That stays in place. I don’t DORGAN that would cut taxes for 8 mil- (1) a certification by the Secretary of the propose changing expensing to $75,000. lion of our seniors that pay Social Se- Treasury pursuant to paragraph (a)(1)(A) That stays in place. The increase in the curity taxes. that no on-budget deficit existed in the pre- AMT, the alternative minimum tax, This boils down to a question of pri- ceding fiscal year; and exemption stays in place. Acceleration orities. If we are going to pass a huge (2) an estimate by the Secretary of the to the 10 percent bracket stays in tax cut as the majority insists, who Treasury pursuant to paragraph (a)(1)(B) place. Acceleration to the 15 percent would we rather provide the tax cuts that no on-budget deficits will occur in any bracket stays in place. to? This amendment would provide tax of the 10 succeeding fiscal years even if sec- My point is that a lot of things are relief to senior citizens who pay taxes tion 201 takes effect. said on the floor of the Senate, and on their Social Security benefits. Mr. REID. Madam President, I can they are often said by someone who Those who oppose this amendment ap- remember as a little boy my grand- might mean them, but they might be parently would rather provide tax mother getting what she referred to as mistaken. It is a mistake to say that breaks that mostly go to the wealthi- her old-age pension check. That is this amendment somehow, in some est among us. They apparently would what she called it. We have refined the name. That is not politically correct way, jeopardizes tax cuts to most rather cut taxes on dividends that anymore. We now refer to someone re- American families. It doesn’t. It sim- studies show will disproportionately ceiving a Social Security check. ply does not. benefit upper income folks. They ap- The Social Security check my grand- The only question the Senate will be parently would rather accelerate tax mother received gave her dignity. She voting on with respect to this amend- cuts for taxpayers in the top bracket had eight children. The children helped ment is the following: Do we, at long making over $300,000 a year. I would her, but my grandmother, a proud last, repeal the provision put in place rather cut taxes for seniors than do widow, did not want to feel dependent 10 years ago? And, yes, many voted 10 these things. on people, even her own children. I re- years ago for that large package and I will support the Dorgan amendment peat, that old-age pension check gave put the country on track, and that led as a major improvement to the under- her dignity. It gave her independence. to awfully good economic times. But do lying bill reported by the Finance She had money of her own that she we repeal that provision? I felt 10 years Committee. could spend. She was unable to work. ago it would be better not to have that The PRESIDING OFFICER. The Sen- My grandmother, for all the time I re- provision in the package. I have on two ator from Montana. member her, could not walk very well. occasions voted to repeal it. Let’s try Mr. BAUCUS. Madam President, I She was very heavy and did not move again. ask unanimous consent that the pend- around very well. But that check still If we are on the floor saying there ing amendments be temporarily laid gave her the ability to feel free to do will be very large tax cuts, let’s ask aside so the Senator from Nevada may things on her own. the question: Should this tax cut be offer an amendment. Social Security is the most impor- one of them, a tax cut for senior citi- The PRESIDING OFFICER. Without tant, the most successful social pro- zens that says to them the $1,500 in ad- objection, it is so ordered. The Senator gram in the history of the world. There ditional taxes that 8 million of you are from Nevada. has never been a program that has now paying, because we changed the AMENDMENT NO. 560 worked as well as Social Security. In rules on what percent of the Social Se- Mr. REID. Madam President, I ask addition to helping my grandmother as curity receipts you get should be re- that amendment No. 560 be reported. it did, Social Security has other impor- ported for tax purposes, should that be The PRESIDING OFFICER. The tant effects. It helps those who are wid- cut? The answer is yes. clerk will report the amendment. ows.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00018 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6165 I have said on this floor before and I rity a better program than it would be using payroll tax money to fund a tax will repeat it, I was in my Senate office without our help, but even if we did cut that will benefit a select few of the in the Hart Building, and a woman was nothing, Social Security recipients elite of this country. there representing an agency from Ne- would be able to draw 75 to 80 percent A short time ago the county assessor vada. It was obvious she was very anx- of their benefits. We need to do some- from Washoe County, NV, Reno, NV, ious to make her flight. I asked: You thing. came to my office. He came for one can make your plane easily; why are What is being done is exactly the reason, to tell me: Please, Senator, do you so nervous? She had to get home to wrong approach. The Republican tax not do anything to allow this dividend her children. She proceeded to tell me bill that is before this Senate—call it tax cut to go through. It will devastate she was a widow. She was a young growth and opportunity, call it what- Washoe County. How we build roads, woman. I asked her what happened to ever you want—is a tax bill that is dev- bridges, and schools is through floating her husband. He was murdered. Social astating to the security of this coun- bonds. That is how we do our assess- Security steps in in situations such as try. It is devastating to the Social Se- ment districts, to put in water sys- that to help widows and orphans. So- curity program. tems, curbs and gutters. If the dividend cial Security also helps the disabled. My amendment is very simple. It tax cut goes through, State and local Social Security is more than a check says Congress cannot raid Social Secu- governments are going to be dev- for my grandmother. It is a check for rity surpluses to fund tax cuts on cor- astated. They will not be able to raise the widow whose husband was mur- porate dividends. It is as simple as money as they did before. So as far as I am concerned, this divi- dered. It is a check for someone who that. The Social Security trust fund is dend tax cut is not good for our coun- has a debilitating disease and cannot being raided as we speak. try. In just 6 years, the baby boom gen- work. Social Security is an important During the Clinton years, we came to eration will begin to retire and our sen- program. Our Social Security program the conclusion that it was not appro- ior population will double—almost dou- is the envy of the rest of the world. It priate to mask the yearly deficit with ble from 44 million to 77 million. We is a program that came about during Social Security surpluses. So we had need to make sure that we are prepared the Great Depression, the brainchild of an accurate accounting system. When to meet the obligations we have made Franklin Delano Roosevelt, and the we talked about there being a surplus, to our parents, our grandparents, as there was a real surplus. What we have program has been remarkable. well as our children and our grand- Not every Member of this body is here is a report in the newspapers by children. committed to protecting Social Secu- the administration of what the deficit When the Bush administration came rity. That is a fact. The former major- is, but that deficit is masked because into office, there was a projected $5.6 ity leader of the Senate, my friend, the of Social Security surpluses. trillion 10-year surplus. Some say it distinguished Senator from Kansas, As we speak, there are huge amounts was over $7 trillion. Now, the Govern- Mr. Dole, is proud of the fact he voted of money coming in to the Social Secu- ment will have a record of a $1.8 tril- against Medicare. He acknowledges, as rity trust fund, and these moneys are lion deficit, and maybe a $2 trillion def- do a number of other distinguished Re- not being spent. There is a surplus. icit, and spend every dollar of the $2.2 publican leaders, that Social Security As the late Senator Moynihan and I, trillion Social Security surplus over and Medicare are bad programs. in a dialog in the Senate one afternoon, the next 10 years. I carry in my wallet—I still have talked about, it should be a Social Se- Before Social Security, 1 in 3 older them here; I have read them so many curity trust fund, not a Social Security Americans lived in poverty. Social Se- times and I am not going to do it slush fund. curity has reduced that number to 1 in again—quotes from Republican lead- It is being used as a slush fund to 10. Over the past few decades, millions ers—Gingrich, Armey, Dole, and there cover deficits. The deficit this year will of older Americans have been lifted out are others who are not as nearly forth- approach $600 billion. So I believe that of poverty by Social Security. right as these three men who acknowl- we should protect Social Security. We I believe Social Security is one of the edge their dislike for these programs, used to have debates going on about greatest success stories in the history but we know there are people in the lockboxes. What was a lockbox? A of our country. I have already stated other body who do not like these pro- lockbox was a box that the Social Se- that. grams. We know there are people in curity surpluses were in and it could As I said, Social Security is some- this body, Senators who do not like not be raided. We said: You cannot thing everyone in this country wants these programs. have the key to unlock that lockbox to believe is going to continue to be as As has already been stated on this for Social Security surpluses. That de- successful as it has been. Yet it is a floor by the distinguished Senator from bate is gone. Nobody talks about it success story that will be rewritten North Dakota, the former chairman of anymore because everyone knows this with a tragic ending if we decide to the Budget Committee, Senator CON- administration has not only given the plow ahead with the corporate dividend RAD, part of this tax program of the key away to the lockbox but thrown tax cut before we meet our commit- majority is simply to do away with away the lockbox. Social Security sur- ment to future generations. If we are programs they cannot defeat head up. pluses are raided every day in this going to build on the success of the So- They cannot get rid of Medicare and country. cial Security Program, we cannot Social Security with votes on the Sen- The last 3 years of the Clinton ad- allow Congress to raid the Social Secu- ate floor. So these tax programs will ministration there were huge sur- rity surplus in order to fund corporate starve domestic discretionary spending pluses, retiring hundreds of billions of dividend tax cuts. New tax cuts will and cause us to cut back and maybe dollars of debt. Now we have the direct run up debt, make it harder for Social even eliminate, if they get what they opposite. We are creating hundreds of Security to meet its future obligations, want, these important programs. billions of dollars of debt, and in the and further threaten its long-term sol- I repeat, not every Member of this next few days we are going to be asked vency. Simply, this means future gen- body is committed to protecting Social to vote upon increasing the national erations of seniors can look forward to Security. The amendment I have of- debt ceiling by a trillion dollars, ap- uncertain retirements. For many, this fered will give Members an opportunity proximately, some 980-odd-billion dol- will mean retirements into poverty. to show not only seniors, but others, lars. Round it off to a trillion dollars. Social Security is a guarantee of that Social Security is a program be- My amendment is about priorities. some measure of security in retire- lieved to be important to this country. Are we going to protect Social Secu- ment. It is not everything, but it is a Young people believe in Social Secu- rity or are we going to take the money guarantee of some security in retire- rity, and there has been this myth pro- raised with payroll taxes and use it for ment. The collapse of corporations like pounded by the majority that Social a tax cut for the elite of this country? Enron and WorldCom underscore the Security is about to go broke. Social Every worker pays payroll taxes. Yet importance of maintaining this guar- Security is not about to go broke. We every worker will not benefit from a antee and not forcing workers to de- need to do things in the outyears, prob- corporate dividend tax cut. So it hard- pend entirely on pensions for their re- ably around 2040, to make Social Secu- ly seems right that we would support tirement savings.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00019 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6166 CONGRESSIONAL RECORD — SENATE May 14, 2003 We have just started to see what is amendments are very interesting. It is sion and what it will do to the Amer- happening to the retirements of people kind of like the other side is going in a ican people. who have worked all their lives. For circle. In regard to the amendment of Mr. GRASSLEY. Madam President, I example, in the airline industry we the distinguished Senate minority yield such time as he might consume have real concern about the future. Are whip, the Senator argues against the to the Senator from Utah to either they going to be able to maintain their jobs bill because Social Security funds speak on the pending amendment or to programs so people can draw their ben- are used. speak on the bill. efits? The airline industry is only one. Well, let’s compare that argument to Mr. REID. Will the Senator withhold We have battled with the steel indus- the arguments Senator DORGAN was for a brief minute? try, coal miners. We have had all kinds using. How does the Senator from Ne- Madam President, there are Senators of problems and that is only a small vada think the Dorgan amendment he wondering what will happen this after- portion of what is probably going to supports is paid for? As the Senator noon. It is my understanding that the happen in the future. from Montana pointed out, general rev- distinguished Senator from Iowa will Not everyone agrees on how to ap- enues will be used to cover the costs of propound a unanimous consent request proach Social Security reform. But one the Dorgan amendment. that we will have a vote around 2 p.m.; thing is certain, nearly every single We are in a deficit situation. Every- is that right? Social Security reform plan that has body acknowledges that. So where does Mr. GRASSLEY. I am prepared to do been proposed requires additional re- the Senator think these revenues will that. The answer is, yes, we will have a sources, not less resources. In fact, the come from? They will raid the Social vote at 2 o’clock, but I don’t want to plan recommended by the President’s Security trust fund to pay for the Dor- propound the unanimous consent right own commission to strengthen Social gan amendment. now. Security required over a trillion dol- Once again, it seems to me the other Mr. REID. It is my understanding, lars. What has happened to that? The side is trying to be on three sides of a though, that we will have a vote, try to true question is, Where does Social Se- two-sided coin. Maybe if we keep this have a unanimous consent agreement curity rank on the page of important up long enough with their circular ar- and vote on the Dorgan amendment issues voted on? Will this Senate say guments they will be supporting the and the Reid amendment, and the Sen- that protecting Social Security is more jobs bill when we finally get to final ator from Iowa may raise points of important than giving a dividend tax passage. order against those. cut to the elite of this country? I hope I yield the floor. Mr. GRASSLEY. I could make the the answer is yes. I hope people vote to Mr. REID. Madam President, I per- unanimous consent request and then put Social Security first. I hope every sonally think we should have a real raise a point of order later. Member in this body agrees we should jobs bill. For example, there has been a Mr. REID. That is right. not raid Social Security trust fund dol- lot of talk about how many jobs this Mr. GRASSLEY. Madam President, I lars so we can offer tax cuts for the tax bill will create. Let’s analyze this. ask unanimous consent, notwith- elite of this country. There is no dispute that for every $1 standing the remaining debate time, it Let’s show our seniors and future billion we spend on public works be in order for me to raise a point of generations we are serious about ful- projects—for example, building high- order against the pending Reid amend- filling our obligations to them. It is ways, roads, bridges, dams, water sys- ment No. 560; provided further that time, and this amendment is the time tems, sewer systems—for every $1 bil- Senator REID then be recognized and to demonstrate that Social Security is lion we spend, we create 47,000 jobs. ordered to move to waive. Finally, I a top priority for this Congress and for The math is simple. By spending just a ask consent that the vote in relation- the Nation. few billion dollars compared to the ship to the amendment occur at 2 p.m. A constituent said it best in a recent multitrillion-dollar tax program that The PRESIDING OFFICER. Without e-mail that he wrote to me. I do not has been recommended, we could cre- objection, it is so ordered. know if that is a proper term for e- ate many more jobs. Those are direct, Mr. GRASSLEY. Madam President, I mail, but I received it. He said: high-paying jobs. Every $1 billion, yield such time as the Senator from Tax cuts are nice . . . but if we can’t de- 47,000 jobs. Multiply that and it comes Utah might consume. pend on what the Federal Government prom- out to lots of jobs, especially those Mr. BENNETT. Madam President, I ises, then what is left for us to believe in? that would be created indirectly. thank the chairman of the Finance Of course, that was referenced di- I hope some day we have a real jobs Committee for his support. rectly to Social Security. bill, instead of what we are talking We continue to hear about jobs in I hope we will join to do the right about, jobs and growth; call a pig a this debate and the question of what thing for the millions of people who are horse all you want, but it is still a pig. creates job. We heard the assistant on Social Security, the millions of peo- You can talk all you want about this Democratic leader say for every $1 bil- ple who will go on Social Security, and tax bill and how much growth it will lion we put into the economy, we get for those people who recognize that create; the fact is it is a program for 47,000 jobs. I am not sure what study this program is the most successful so- the elite of this country. produced that number, but if it were cial program in the history of the Simple and direct to the point, it is absolutely true, any time we wanted world. what it is. It is an effort to devastate we could say, let’s appropriate another The PRESIDING OFFICER. Who the ability for domestic discretionary $1 billion and get another 47,000 jobs. If yields time? spending and cause tremendous harm we need to put 470,000 people to work, Mr. REID. I ask for the yeas and nays to programs such as Social Security appropriate $10 billion and go buy the on my amendment. jobs—as if jobs are used cars sitting in The PRESIDING OFFICER. Is there a and Medicare. I hope when we vote on this measure a car lot which can be purchased if you sufficient second? There is not a suffi- there will be a resounding yes vote. I have enough money. cient second. Mr. REID. I suggest the absence of a understand there will be a technicality Unfortunately, the economy is not quorum. raised because, under this rule, ger- that simple and does not work that The PRESIDING OFFICER. The maneness is a very tight rule and it way. Jobs are created by two things. clerk will call the roll. will require 60 votes. That is not such No. 1, enterpreneurism, risk taking, The assistant legislative clerk pro- a high burden. somebody does something. A human ceeded to call the roll. We should be able to have 60 Senators activity is required. No. 2, accumulated Mr. GRASSLEY. Madam President, I vote to put Social Security before giv- capital. Jobs come because somebody ask unanimous consent that the order ing tax cuts to the elite. My amend- accumulates enough capital to fund the for the quorum call be rescinded. ment goes only to the dividend tax cut. risk taking. In many instances the risk The PRESIDING OFFICER. Without I hope we have support on that. If 60 that is being taken is that the capital objection, it is so ordered. Senators do not agree to support Social will be lost. Mr. GRASSLEY. Madam President, Security over a dividend tax cut, I feel If we look at the creation of jobs the arguments we hear for various very sorry for the remainder of the ses- through this prism, that it requires

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00020 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6167 risk taking and it requires accumu- Indeed, when I became the CEO, I was didn’t have $150,000 in equity in the lated capital, we see things a little dif- part-time and I was paid a consulting house. We had to add it all up with ev- ferently. It is not a matter of the Fed- fee rather than a CEO’s salary because erybody else’s houses to get to the eral Government spending $1 billion to the company couldn’t handle that. $150,000, and then the amount on top purchase 47,000 jobs. It is a matter of That was in 1984. The reason I point that the bank wanted. the Federal Government creating an out that year is because that is the We were successful. I will not bore atmosphere in which those who are year many of our friends who are dis- the Senate with the details of what willing to risk their accumulated cap- cussing this bill in apocalyptic terms happened, but we were successful. ital—or in the case of borrowing, some- would describe as part of the Decade of Madam President, 61⁄2 years later, when body else’s capital—and produce the Greed. The Decade of Greed, as that I stepped down as the CEO of that com- jobs that come out of that activity. phrase is used—usually in the Demo- pany, prior to my decision to run for If I may be personal, I will outline cratic Party and on the editorial page the Senate, we were doing $80 million a my own experience as an entrepreneur of the New York Times—refers to that year. in risking some accumulated capital period of time when Ronald Reagan The debt had grown from the original and creating some jobs. I was given the was President of the United States and $75,000 to $7.5 million, but we didn’t award as Entrepreneur of the Year by the top marginal tax rate was ulti- care about the debt because we had Inc Magazine in 1989 for the Rocky mately brought down to 28 percent. more than enough money to cover it. Mountain area. Frankly, I had not Think of it, how greedy rich Ameri- As a percentage of our sales, as a per- thought of myself as an entrepreneur cans were that they demanded, and centage of our profits, the debt was prior to that time when I received the Ronald Reagan and the Republicans re- now de minimis. I make that point be- award. I sat down and said to myself, sponded, a tax rate of 28 percent. Why, cause the argument has been made on Self, let’s draw up a little tally of that is terrible. We should clearly have the floor today that the debt of the whether or not I have, indeed, been in- moved away from that, and we have. United States is going to go from $6 volved in entrepreneurial activities in The tax increase that occurred under trillion to $12 trillion and isn’t that my life. Because I had not kept track President Bush the first, and then the awful? before, I did that inventory. I was a lit- tax increase that occurred under Presi- The answer is, yes; that is awful if tle surprised at what I found. I had dent Clinton, has brought us up to the the U.S. economy is not going to grow. been involved in 11 different startup or rates they now insist are right and Then the debt is going to double. But if turnaround activities. That is, 11 dif- proper, an effective marginal tax rate— the U.S. economy is going to double in ferent attempts to create new eco- when combined with the Medicare size in the period that the debt doubles nomic activity where none had been be- tax—of 42 percent on the Nation’s high- in size, the debt will be no more of a fore. Then I tallied up the record of est paying taxpayers. problem in 10 years than it is now. And success. They say 42 percent is about right; 42 now the debt as a percentage of the Four of these efforts failed outright. percent shows the rich are paying their economy is lower in the United States The money represented by the accumu- fair share. They say 28 percent is giv- than it is in any other industrialized lated capital being risked in our at- ing in to the demands of the greedy and nation. The other countries of the tempt to create new jobs did not work. isn’t life much better when the effec- world would kill to get the kind of The money was all lost. Four of these tive rate is 42 percent. debt-to-GDP relationship we have al- efforts were sold without having suc- Now they say President Bush the sec- ready. So I am not alarmed by the sta- ceeded or failed. In other words, we ond is trying to bring us back down tistic that has been quoted on the started it, we got it going, we decided into the area of the Decade of Greed. other side because I have lived with it to bail out before we found out whether He is not going as far as 28 percent, but personally. or not we were going to make it, and he is going to bring us down to 35 or 32, I have seen the debt of the company someone else took us out. We neither depending on the brackets. He is going over which I presided go from $75,000 to made money nor lost money. We lost to bring us down away from the 42 and $7.5 million, and I recognize that the money in the sense of our opportuni- back toward the attitudes of the Dec- $7.5 million was a benign figure where- ties in the period of time we were ade of Greed. as the $75,000 was threatening to shut working on these efforts was gone, but So, as I say, back to my own experi- us down because the sales of the com- at least we did not lose the accumu- ence. We were building that business in pany had gone from $300,000 to $80 mil- lated capital with which we went into the Decade of Greed. I can assure you, lion. The margins had gone from zero— the venture. no one in our company was earning a at $300,000 we weren’t making any That left only 3 out of the 11 that had six-figure salary. We couldn’t afford to money—to 20 percent before taxes, so been successful. Interestingly enough, pay that on the amount of revenue we we had an aftertax margin of about 10 enough money was made out of those got. But we had high hopes. We were percent. Twenty percent of $80 million three to cover all of the expense of the taking big risks. I signed a guarantee is $16 million. We had a $16 million other eight. Enough jobs were created on the bank loan that would have cost pretax profit, which makes it very easy out of those three to compensate for me my house if we had not been able to to service a $7.5 million debt. So let’s everything that went down the drain pay it, and every other shareholder in not talk about the debt figures in the with the other eight. I decided, having the business did the same thing. We aggregate and scare everybody with re- done this 11 times in my life, I guess I were on the line. At that point, that lationships that make no sense. did deserve to be called an entre- was the only real asset I owned. But I However, back to the point of the preneur, a risk taker. signed it because I believed we could marginal tax rates. As we built that Now, I will focus on one of those make it go. business from $300,000 a year to $80 mil- companies with which I was involved, We were on the line then, for losing lion, we did it during the Decade of to make the point that cannot be our houses—talk about taking a risk— Greed when the top marginal tax rate stressed too often or too strongly in in order to get the accumulated capital was 28 percent. That meant of every this debate. I was recruited to be the that we needed to build that business pretax dollar we earned, we got to keep chief executive officer of a company in the form of a business loan. It was 72 cents of it to finance the growth of that at the time had four full-time em- $75,000. the business. We went from 4 full-time ployees. It was doing somewhere be- Madam President, $75,000 doesn’t employees to over 700 in that period. tween $250,000 and $300,000 per year. sound like a lot of money, but when We created 700 new jobs, and we did it Frankly, its long-term prospects were you are going to lose your house, without a dime of Federal money. No- not all that bright, if you looked solely $75,000 is a huge amount of money. It body walked out and said: Here is your at where it was. It was not making any was added to $75,000 that had been portion of the $1 billion we are going to money. It was just barely able to sup- there before I showed up, so the total use to purchase 47,000 jobs. port those four full-time employees, debt of the company was $150,000, and The way the Federal Government and it probably couldn’t have afforded they were going to take after me to helped us was they said to us, for every me. take $150,000 out of my house and I pretax dollar you earn, you get to keep

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00021 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6168 CONGRESSIONAL RECORD — SENATE May 14, 2003 72 cents. We funded the growth of that every dollar they were reportedly re- business. They don’t have anything company, from 4 employees to 700 em- ceiving. That is how we were able to like the network of small business and ployees, out of the earnings of the com- grow the company. entrepreneurial activity that is the pany. That same pattern still exists even hallmark of the American economy. Just for a moment, look at what though it was badly damaged when we It is right and proper for us to come would happen if we had founded that in went to a 42-percent marginal tax rate to the floor regardless of party and tell 1994 instead of 1984. The Federal Gov- in 1993. There are still S corporations everybody how much we love small ernment would have said to us, in 1994: and sole proprietorships and partner- business. But it is deceptive to say that For every pretax dollar you earn, you ships where the owners of the company this is a tax cut for the Michael Jor- get to keep 58 cents because we are receive a tax form saying they have $1 dans of the world when we realize that going to take 42 cents. The difference million or whatever their share of the the primary economic activity of roll- between 58 cents and 72 cents would profit of the enterprise might be, but ing back the top marginal rates will be have made, for that company, the dif- they give back everything except that for the small business men and women ference between rapid growth and stag- which is necessary to pay the taxes. of this country, if they could ever get nation. I am not saying we couldn’t That means there are small business- back to the level of effective tax rates have made it under the effective tax men who have tax returns that very during the decade of greed, who could rate of 1994, but I am saying, with great quickly get into the top marginal rate. create the kind of jobs that were cre- certainty, that it would have been They are small businessmen who are ated in that period, could create the much more difficult and the growth, struggling, and increasingly small kind of momentum that was created in even if it had come, would have been business women who are struggling to that period. much slower. In other words, the num- make the business grow, only being Back to my company, it was founded ber of jobs created would have been able to keep 58 cents out of every dol- in 1984. They say when I stepped down substantially less with a marginal tax lar they earn. They may report tax re- as the CEO in 1991, we had gone from 4 rate of 42 percent than it was with a turns that put them in the top 1 per- employees to 700, and we had created marginal tax rate of 28 percent. cent of taxpayers, but they are not Mi- the momentum that produced that In the spirit of full disclosure I chael Jordan or Donald Trump. They growth in that period where the top should point out that once I left the are doing their best to get along with a marginal rate was 28 percent. That mo- company, it then grew from 700 jobs to little business that employs 5 or 6 peo- mentum carried forward into the 1990s. 4,000, and I have to say there is a direct ple and the business is earning $200,000 That carried forward to the point cause and effect relationship. Getting plus the salary they pay themselves. where they eventually got to 4,000 jobs me out of there made it grow substan- They need that $200,000 desperately instead of 700. tially faster. back in the business to keep it grow- We hear in this Congress that some The point of focusing so firmly on a ing. But Uncle Sam comes along and of us in this Congress took credit for single firm and the experience is this: says: The business may be earning that. Some in this Congress looked at We were an S corporation. That is a $200,000—that shows up on your per- that and said: The Clinton increase to tax designation which means that the sonal tax return—we are going to take an effective rate of 42 percent has cre- profits of the company flowed through $84,000 of that $200,000 in taxes. Good ated jobs. This company went from 700 the company to the personal tax re- luck making the business grow. to 4,000; that was created by President turns of the investors. I would show at If there are entrepreneurs good Clinton; that was created in the Clin- some point in that situation a private enough and working hard enough, they ton administration. I submit to you it tax return—a 1040—of over $1 million of can make the business grow, but they was created in the Decade of Greed. It personal income. have to delay hiring that extra person was created when Ronald Reagan You can say: Good Heavens, he is the because they are paying $84,000 out of helped the Congress get the effective richest man around. He is earning $1 the $200,000 instead of paying at the 28 rate down to 28 percent when we laid million a year. No. I was earning my percent that we paid when we were the groundwork and sowed the seeds salary, which was $140,000. Then I was making our business grow. for the kind of explosive growth for reporting my share of the company’s When we talk about, the rich don’t which the harvest took place in the income so that the income didn’t get need this tax cut, the rich don’t need 1990s. taxed twice. If the company had paid to have their effective rate rolled back I submit that by establishing a top taxes at the company level, and then from 42 percent to, say, 35 percent, and marginal rate of 42 percent in the 1990s, had given me my share of the income, Donald Trump doesn’t need that, let’s when that momentum of growth was the company would have paid taxes and make him pay his fair share, or Mi- going on coming out of the 1980s, we I would have paid taxes. chael Jordan doesn’t need that, let’s are now harvesting an opposite kind of Does this sound familiar? That is make him pay his fair share, we are ig- situation. Small business faced with an what this debate is about with respect noring the fact that it is the small effective tax rate of 42 percent, where to the taxation of dividends. We could businessman and the small business- they can only keep 58 cents out of have avoided taxation of dividends be- woman hiring the extra employee, be it every pretax dollar to help grow the cause we had a small enough number of in Alaska, Utah, or Colorado, or wher- business, is growing more slowly than shareholders to qualify as an S cor- ever it is, who will drive the oppor- they were. Just as the excitement of poration as opposed to the C, referring tunity for new jobs to be created all the 1990s was harvest of the low tax pe- to the chapters in the Tax Code that over the country. riod of the 1980s, now some of the prob- describe all of this. But I was not tak- Most of the new job creation in this lem in 2000-plus is the harvest of the ing home $1 million a year. I was not country comes from small business. high tax rates of the 1990s. taking home after tax $1 million a That is a truth that has been repeated What we have to learn around here is year. All the company gave me of the over and over on this floor. Everybody that there is a lag in fiscal policy. Peo- million dollars that the company put says they are in favor of small busi- ple ask me, What is the difference be- on my personal tax return was 28 per- ness. Everybody, regardless of where tween fiscal policy and monetary pol- cent; in other words, enough to pay the they sit on the floor, says small busi- icy? Very simply, monetary policy is taxes that were being reported on my ness is the backbone of the American what the Federal Reserve does about form. But the company kept the other economy. They are right. the monetary supply, and fiscal policy 72 cents to grow the business. One of the reasons other industri- is what the Congress does about taxes. That was true of every other share- alized countries, such as Germany, We can pass a tax bill and say, We holder in the company. We had five France, Japan, and others, have been handled this problem. But the reality shareholders, every one of whom was unable to see their economies grow at is what we have done in a tax bill ei- reporting over $1 million a year in per- the rate ours does is that they have ther for good or ill is sow some seed sonal income but who were in fact re- been unable to see their job growth that will be harvested later on. ceiving only their salaries and giving come anywhere close to the rate of As we look back over what was done back to the company 72 cents out of ours because they don’t have small in 2001, we begin to understand some of

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00022 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6169 the things about the sowing of seeds. In So as these small business men and in 1991 when President Bush went to 2001, we had a balanced tax cut—bal- women looked out into the future, they Andrews Air Force Base and said: Let’s anced politically, not economically. said: This 42-percent effective rate that tell the small business man and woman The political balance said: We have to came in with President Clinton is we are going to take more of their put some money in people’s hands im- going to start to come down. And as I pretax money away from them. And mediately because there are those who make my plans for what I will do, as I there was a sense: Well, we better not insist that is the thing that will cause try to invest and I try to create jobs in buy that new piece of machinery. We the economy to grow. So let’s put the future, I can plan on that coming better not hire that new person. We are money in customers’ hands right away. down. And the mere anticipation and going to have a problem. That was the genesis of the $300-per- sense of certainty that came out of And then President Clinton said: person rebate. being able to plan for a reduction in Let’s tell the small business man and Then there are those who said: No, the amount of money that Uncle Sam woman we are going to take even more we have to bring down the top mar- would take out of their businesses in 1993, and bring the top marginal tax ginal tax rate, for all of the reasons I caused some beginning stirrings in the rate up to the level that I have de- have been discussing. For small busi- small business community toward the scribed. ness to create new jobs, for all those S creation of new jobs. But those You sow the seeds of incentive, you corporations that are reporting on stirrings were not enough. reap the fruits. If the incentive is to in- their personal tax returns the cor- We are in recovery, but the recovery vest, if the incentive is to hire, if the porate income that is placed there, we is far from robust. Chairman Green- incentive is to take risk, you get the have to see to it those people get back span calls it a ‘‘soft patch.’’ And the benefits of higher economic activity down into the level where they can cre- soft patch, unfortunately, has gone on and higher job creation. If you sow the ate jobs at the same energy and same longer than he or any of the rest of us seeds of negative incentive that says rate in which they were creating jobs would like. the Federal Government will take So how do we get out of this soft in the late 1980s. more of your money than it has been, All right. What have we learned in patch? The most important thing we you reap the rewards of higher unem- the 3 years since we passed the 2001 tax could do is say to these small business ployment and slower economic activ- cut? We learned that amount of money men and women: Guess what. You were ity. that went out in the rebate had little planning on this reduction in the It always takes time. It never hap- or no impact on creating jobs. All of us amount of money Uncle Sam takes out pens, in fiscal policy, overnight. But I took credit for it. We stood out in front of your entrepreneurial activity in a submit we are now in a position where few years. We are going to make that of the Capitol, we waved the $300 we need to move clearly and firmly reduction effective right now. As a check, and we had our pictures taken. back toward the time when the incen- matter of fact, we are going to make it We had people come up to us in air- tive was to invest, when the incentive effective January 1, 2003. ports and shopping malls and say: was to take risk, when the incentive All right. Now, as I make my plans as was to build a small business. Thank you, Senator. I got my $300. a small businessman, I can say: I am I think it disingenuous, therefore, to That is terrific. But the economic im- going to be able to keep more than 58 attack all of the reduction in the mar- pact of that, looking back on it, was cents. I will be able to keep 60 cents, 62 ginal tax rate as if every single tax re- negligible. Why? cents, maybe even 65 cents. Now I can turn that shows income being taxed at Didn’t you want all those people to plan on having that much more money the top marginal tax rate is coming go out and spend that money? Yes. And coming out of my enterprise. I can go from a Michael Jordan or a Bill Gates a very large percentage of them did hire that extra person. I can go buy or a Donald Trump. not. What do you mean? Did they put it that extra piece of machinery, which It ignores the fact that the major- in their mattress? No. They paid down means that the manufacturer of the ity—I don’t have the exact statistic; I their Visa card. They paid down their machinery can hire an extra person. have heard it as high as two-thirds, but MasterCard. They lowered their own Now that I see that marginal rate com- it varies from time to time—of the tax personal amount of debt, which was a ing down, and coming down more rap- returns filed in the top marginal tax prudent thing for them to do. But that idly than was promised in 2001, I can rate are tax returns with small busi- did not produce very much economic react accordingly. And now we can ness income on them, tax returns such activity. start to see the small business job ma- as the one I described for myself when Also, if you take the total amount of chine get cranked up. I had my salary on there and then I had money involved in that rebate, and We all need to understand this about an extra million dollars as my share of then compare it to an economy of $11 economics: Economics turns on incen- the company’s profits transferred on to trillion, you realize we were talking tives. No one will invest in an enter- my tax return, none of which money I about a tiny percentage. There was no prise where the Government would saw, none of which money I got be- leverage in that amount of money. And take 100 percent of the profits because cause all of which had to go back to while it was a good thing to do, and it there is no incentive. You say, all the company to help it grow and help it helped a lot of people—and I am glad right, the Government will take only create jobs. they got their credit card debt down by 99 percent of the profits, and there is Let us understand that this is not a an extra $300—it did not produce any still no incentive. So the Government debate about whether Bill Gates should jobs. And that is what we are talking says, all right, we will take 80 percent get a tax cut. This is a debate about about. of the profits. Well, maybe you begin to whether small businessmen and small However, simply the promise that get my interest now. The Government businesswomen all across this country the top marginal tax rate would come will only take 50 percent of the profits. should get an incentive to hire, an in- down did, in fact, cause some small All right, now there is an incentive for centive to invest, an incentive to build businesspeople to say: All right, the ef- me to invest. for the future, whether to plant seeds fect is not immediate, the relief is not In the 1980s, the Government said to of growth which will yield a significant here right now, but I can see it coming, small business, we will only take 28 harvest for us later on. I believe the and I can plan on it. percent of the profits, and you saw a sooner we can plant those seeds, the The most important quality a small period of job growth, job creation, and better off we will be. business man or woman has to have in economic expansion unparalleled in I believe the lesson of the tax cut of order to succeed in business is the abil- our history. And, based on my own ex- 2001 tells us that what we did there, ity to somehow, some way correctly perience, I believe it was an impetus however salutory, was not good enough see the future because every business and an inertia of job creation that car- and not strong enough, that it has not enterprise is involved in selling in the ried over into the 1990s, for which the gotten us through the soft patch that future. No business enterprise survives Congresses and the President in the it was supposed to help with, and we on the basis of what it did in the past. 1990s took credit. need to get on with this. It is all tied to what it can see in the But the inertia, as I say, has changed For that reason, I will support a cut future. because the incentive got a little less in the top marginal tax rate, and I will

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00023 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6170 CONGRESSIONAL RECORD — SENATE May 14, 2003 rejoice in the years to come as new David Kiefer, Thomas Maloney, James million private sector jobs. The econ- jobs are created, new economic activ- M. Rock, Norman Waitzman, all distin- omy has shed 500,000 jobs in the past 3 ity occurs, and, yes, new tax revenues guished scholars from Utah who are on months alone. About 9 million people start to roll in to the Federal Govern- this chart who say this tax plan the are looking for work. The unemploy- ment. At that time whoever is in the President has proposed is not good. ment rate is 6 percent. The number of Senate will take credit for those tax The question before the body—the unemployed workers has increased 47 revenues, whoever is in the Senate will vote will take place at 2—is whether percent since the President took office. take credit for the good economy that this body will vote to have a tax cut A growing share of the unemployed we have. And whoever is managing for the elite as it relates to dividends workers are long-term unemployed. In Presidential campaigns will say it was or whether Senators will vote to pro- February, nearly 2 million people had President this or President that who tect Social Security. The Social Secu- been unemployed for 6 months, which was personally responsible for it. rity debate has left this body since Re- is triple what it was before this man We should understand that the econ- publicans became the party that dwells became President. The Bush adminis- omy is much more sophisticated than in the White House. We used to talk tration is on track to post the worst that. We should do what we can to let about a lockbox. Not only the key has job creation record of any administra- the economy do its work by creating been lost but the whole lockbox has tion in almost six decades. This tax cut the incentives that will produce the been thrown someplace we can’t find. raids Social Security, and that is what two things that produce jobs: risk tak- Social Security is not part of the equa- this amendment is all about. ing and accumulated capital. This bill tion anymore. Suddenly deficits don’t I have been here long enough to know moves in the direction of rewarding matter. that the majority are not very inde- both. I say to my distinguished friend who pendent. I believe—and I hope my be- I yield the floor. was a courageous soldier for the United lief is unfounded—that come 2 o’clock The PRESIDING OFFICER (Mr. States, somebody who was valiant in people will march down here and vote HAGEL). The Senator from Nevada. battle and who I have the greatest re- against this amendment. They will Mr. REID. Mr. President, I have the spect for as a legislator, I want to vote that it is not germane. It takes 60 deepest affection for my friend from bring to his attention some of the prob- votes. We know the rules of germane- Utah. He lives in a different political lems that exist with this new philos- ness. They will march down here just world than I do. He just did a stunning ophy that deficits don’t matter. like lemmings over the cliff and throw I refer the distinguished Presiding job in his debate, but he was debating Social Security to the wind, I am sorry Officer to a statement he made on the himself. The matter pending before the to say, but I think that is what is going 6th of February 1997, in the Omaha Senate is whether we should have tax to happen. cuts for the elite—that is, dividend tax World Herald: Even without the new tax break for cuts—or whether those moneys should The real threat to Social Security is the the elite, this Government will spend be kept for Social Security. That seems national debt. If we don’t act to balance the budget and stop adding to the debt, then we every dollar of the $2 trillion Social Se- pretty simple to me. are truly placing the future of Social Secu- curity surplus over the next 10 years— I did mention, and the Senator from rity in jeopardy. even without this. So with this, it will Utah responded briefly, that my pro- I ask my friend, when he comes down be done more quickly. posal to have public works projects is to this table in 40 minutes and votes, The real reason for the deficit is the not in keeping with his idea of how to to remember what he said in 1997. This tax cut—the tax cut previously made, create jobs. The only way to create is clearly an indication that we are which I voted against. It is not easy to jobs, he said, is through entrepreneur- driving this country into a terribly dif- vote against tax cuts. People love ship. ficult situation as it relates to the def- them. It will be used against me in my Well, Frainer Construction of Ne- icit. campaign. That is the way it is. vada, Helms Construction of Nevada, Deficits don’t matter? I hope they do. The Congressional Budget Office says Granite Construction, Las Vegas Pav- But apparently there has been a new that only 14 percent of the deficit is as ing—large by Nevada standards—are philosophy from the other side of the a result of homeland security and de- companies that believe in entrepre- aisle. fense spending. Over 10 years, Federal neurship. Every road they build, every We are going to be asked in a few spending on interest on the public debt water project they work on, every days to increase the national debt by will amount to $2.4 trillion. Of course, bridge they repair is entrepreneurship. almost $1 trillion. I hope people will be every dollar directed toward interest is What is the difference in these huge more concerned about the debt. I agree diverted from Social Security. It is di- tax cuts that go to the elite, that cre- with the statement made by the Sen- verted from Medicare, education, de- ate no jobs, as I will shortly show? If ator from Nebraska. fense, and homeland security. past experience means anything, I I believed the chairman of the Fed- The additional interest burden on a think we are better off directly doing eral Reserve System when he told us in family of four will be $30,000. That is something. the Appropriations Committee that the the additional burden. State and local My friend from Utah has acknowl- most important thing we could do is governments are in the midst of the edged that there is not going to be any- get rid of the deficit. We did that. We worst fiscal crisis since World War II. thing happening in the near future. He took him at his word. As a result of Last month, the cumulative 2004 budg- is talking about future Presidents tak- that, we had years where we paid down et shortfall was about $54 billion. A bil- ing credit, future Congresses. He has the debt to the tune of $600 billion. lion of that is in the small State of Ne- acknowledged that nothing is going to When the Bush administration took vada. State and local governments, happen in the near term with this fool- office, they promised to eliminate the which bear primary responsibility for ish tax cut that has been proposed. national debt and spur the economy most education, health care, and first All this talk about growth and jobs, with a massive tax cut for the elite. I responder expenditures, will bear the as this bill is intended to do, simply didn’t vote for that tax cut because I brunt of the consequences of this irre- will not work. I direct my friend to a thought it would do exactly what it has sponsible tax plan. few people on this chart. These are the done. I have been through the years in The second phase gets even worse. economists who support the Bush tax the past when we were told that the Sixteen States have cut education pro- plan. You can see them on the left trickle down theory was a great one grams in elementary schools. In Ne- hand side, few in number. The econo- and would help the country economi- vada, the Clark County School District mists opposing the Bush tax plan are cally. It didn’t then, and it didn’t dur- is considering going to a 4-day week for 450 in number. Those who support the ing the Bush 2 program. This plan has kids because it is having trouble pay- plan are 13 in number. Those opposing failed the vast majority of people in ing for a 5-day week. Twenty States are 10 people who have won Nobel America who are worse off than 2 years have cut health care programs, even Prizes for their work. We have, in fact, ago when this man took office. though we are living in a heightened professors from the University of Utah, Since this administration took of- risk of bioterrorism and SARS. It Gail Blattenberger, Samuel Jameson, fice, the economy has lost almost 3 makes no sense to just chop to pieces

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00024 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6171 our State public health budgets. But budget, not dipping into Social Security, and vada, and the Republican Governor in that is a consequence of what is hap- continuing to reduce the national debt. the State of Nevada—I am sure it was pening in this administration. He gave that quote to the Chat- very difficult for him—because there is What is wrong with this plan we are tanooga Free Press. What has changed? no alternative because of the unfunded being asked to approve? It fails to help Nothing has changed in a little over a mandates the Federal Government working people, for one thing. Our top year. Senator JUDD GREGG—here is a passed on to the State of Nevada, is priority is to create jobs. I will say it man who has wide-ranging experience. trying to find ways to create new reve- again, Mr. President—creating jobs. He served in the House of Representa- nues. I say the word, the Republican The moneys that would be given in tives, he was a Governor, and now he is Governor of the State of Nevada has these public works projects, which are a Senator. He said to the New Hamp- asked for new taxes. not new jobs—I bet in the States of shire Sun News on the first day of Feb- Mr. DURBIN. Mr. President, if I may Utah and Nebraska there are many ruary 1998: ask the Senator from Nevada, if the ar- projects on the drawing board that As long as we have a Republican Congress, gument has been made by the Repub- simply cannot be completed because we are going to have a balanced budget. And licans that if we give the President an- there is no money to do it—roads, if we can get a Republican President, we can other tax cut for elite investors and water and sewer projects, bridges, start paying down the debt on the Federal wealthy people that this will somehow dams, all those activities. They are on Government. create jobs, is it not fair for us to look the drawing boards now and would go What has happened to that? Do defi- back and see how successful the Presi- forward tomorrow if there were money cits not matter anymore? Obviously, dent was the last time he made this to do it. they don’t. We are going to be asked to promise? As I indicated before, for every bil- increase the national debt a trillion If I recall correctly, we gave this lion dollars spent, 40,000 jobs are cre- dollars in a few days. President a $1 trillion—some say $2 ated. Those are direct jobs, all high- Mr. DURBIN. Will the Senator yield trillion—tax cut just 2 years ago. If I paying jobs. These people would buy re- for a question? am not mistaken, we have lost jobs. frigerators, carpets, cars, all kinds of Mr. REID. I am happy to yield to the Under this Bush administration, we consumer items. There are a lot of in- Senator from Illinois for a question. have lost somewhere in the range of 2 direct jobs as a result. The Republican Mr. DURBIN. I ask the Senator from million jobs. In my State of Illinois, plan fails to help working people. It Nevada, it is not just a question of the under the Bush administration, we fails to preserve Social Security. It of- national debt—which is bad enough— have lost 191,000 jobs, 20,000 manufac- fers no relief to the 9 million Ameri- that has to be repaid, and interest has turing jobs in the last 12 months. cans who want to work but cannot find to be paid on it, not just by us but by If the President’s plan of tax cuts for a job. our children and grandchildren, but is wealthy people is exactly the medicine People on the other side refer to this it not a fact that the money we are to cure our problems, how do we ex- as a ‘‘jobs and growth package.’’ As I putting into the President’s program plain the fact that the economy is still said earlier today, you can call a pig a for tax breaks for elite investors in so sick 2 years after the President tried horse, but it doesn’t matter how many America is coming out of the Social this tax cut the first time? times you call a pig a horse, it is still Security trust fund, out of the Medi- Mr. REID. I respond to my friend, I a pig. Or you can call a horse a pig; it care trust fund? These are trust funds voted against the first tax cut. It was doesn’t matter; that animal is still a that are going to struggle with more not an easy vote. Just on general prin- horse. You can call this program jobs and more elderly Americans needing ciple you want to vote for tax cuts. I and growth all you want, but it doesn’t their help, and we are going to give a believe the payroll taxes are something make it a jobs and growth program. tax break to wealthy people at the ex- most people pay much more than they Calling this a jobs and growth pro- pense of Social Security and Medicare. do in income taxes. I would like to fig- gram—there could not be anything fur- Is that not a part of the problem as ure out some way to give them a break ther from the truth. well? from payroll taxes. I think there are The CBO, the White House Counsel of Mr. REID. Mr. President, I say to my ways we can reduce taxes. Economic Advisers, and the private friend in answer to his question, the At first glance, you do not want to sector economists who helped the Senator is absolutely right. What is vote against a tax cut, but I had an in- President analyze this proposal have happening boggles my mind. I am cer- kling, I had a belief, I had a conviction stated that his tax break plan won’t tainly not a genius, but I did OK in that doing what was done with the first create jobs and will weaken the long- school, and I can understand some big tax cut would throw this country term health of this country. In fact, basic facts. How can people, for whom into an economic downturn, and that is some economists have forecast that the I have the highest respect, say one what it has done. plan will cause an annual .25 percent thing about deficits mattering and So- When the Bush administration took drop in GDP and will result in a loss of cial Security mattering and vote for office, they promised to eliminate the almost a million jobs in the next 10 this awful program? national debt and spur the economy years. That is in addition to the jobs I say to my friend, the distinguished with a massive tax cut for the wealthy. that have already been lost. There are Senator from Illinois, what I said ear- They failed to deliver. Most people are the 400 economists there on the chart. lier today. I believe this is all part of a not better off; they are worse off than And I am sure there would be more if program to do away with some of these they were 2 years ago, I say to my we spent a little extra time. So 400 programs in which we really believe. I friend. economists, including 10 Nobel laureate repeated in different words what the Mr. BENNETT. Will the Senator prizewinners, signed a statement warn- Senator said today in responding to a yield for a question? ing that the President’s plan would do statement made by the distinguished Mr. REID. I will be happy to yield for long-term harm to the economy, add- chairman of the Finance Committee. I a question from my friend from Utah ing to the Nation’s projected deficits. said the same thing to the distin- without losing my right to the floor. Mr. President, you were not standing guished junior Senator from Utah. Mr. BENNETT. I ask the Senator, if there alone saying deficits matter. They live in a different world than I he is interested, if I gave him the Some of your colleagues also felt the live in. It is as simple as that. They names of another 400 economists who same. A number of very distinguished live in a different world. They care were in favor of the Bush tax cut if he colleagues felt the same. For example, about the trickle down theory. I do would put them on his chart? Such somebody for whom I have the greatest not. I do not think it has worked. Over names are available. respect, TRENT LOTT—we worked to- the years I have seen it trying to work Mr. REID. I respond to my friend gether on the floor very closely for 4 where you give money to the elite of from Utah, I borrowed this chart from years—said on the 27th day of January, this country. It does not trickle down. somebody else. I am not much on this 2002: We have significant problems in the chart business, but I know that if there I think the most important thing really State of Nevada. We are battling budg- are that many who favor the tax cut, does involve the budget—keeping a balanced et problems in the little State of Ne- you should do your own chart.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00025 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6172 CONGRESSIONAL RECORD — SENATE May 14, 2003 Mr. BENNETT. I further ask, Mr. They wanted to use Social Security aisle, is quoted in the Pittsburgh Post President, a question of the Senator surpluses to balance the budget. That Gazette: from Nevada. is unfair. I have no regret having done The American people are sick and tired of Mr. REID. I yield for a question. I that. excuses for inaction to balance the budget. will do that. Mr. DURBIN. Will the Senator yield? The public wants us to stay the course to- Mr. BENNETT. Reference has been Mr. REID. I yield to my friend for a wards a balanced budget, and we take that made by the Senator from Illinois to question. obligation quite seriously. the effect of a $2 trillion tax cut. Is it Mr. DURBIN. I would like to speak Take it quite seriously, when we are not true that what we are asking for in for a moment to this. Is it not a fact going to be asked to increase the na- this bill is that the effect of that tax that we are only a few years away from tional debt in a few days by a trillion cut be made now because the effects of the baby boom generation showing up dollars—by a trillion dollars; not a bil- that tax cut, as you get up to the num- for Social Security? Isn’t it the height lion, not a million but a trillion? ber of $2 trillion, was stretched out of irresponsibility for us to be dragging Where are all of these statements? over a number of years and, in fact, the this Nation deeper in deficit at the ex- What happened to them? What hap- marginal tax rate cut that has actually pense of the Social Security trust fund pened to the consistency? Why all of a occurred now, to which the Senator when we know that parents and grand- sudden do deficits not matter, the na- from Illinois referred, has been mini- parents are going to be asking for the tional debt does not matter, Social Se- mal and we are trying to accelerate the Social Security benefits which they curity does not matter, Medicare does effect? paid for a lifetime? Isn’t the same true not matter, education does not matter, It does not seem to me fair to say it when it comes to Medicare, that these just give tax cuts to the elite and it failed and, by the way, we have not had same senior citizens will need Medicare will all be fine? any effect from it. The reason we have to make sure they are healthy, inde- It is going to take care of all the en- not had the effect is because they have pendent, and lead strong lives as long vironmental problems we have in not been put into effect. as possible, and what we are doing is America today. We do not have to Mr. REID. I will be happy to respond jeopardizing Social Security and Medi- worry about Superfund, endangered to the question. First, it seems a little care to provide tax breaks for the elite species, clean air, clean water. Just cut unusual to me, the huge tax cuts writ- investors in America? taxes. That takes care of it all. ten by the Republicans and passed vir- How in the world can you rationalize Mr. DURBIN. I ask the Senator from tually by Republican votes, with very that once we have a promise to a gen- Nevada, if we have now reached a point few Democratic votes, now they are eration that has paid for over 40 years in our history where deficits do not saying the tax cut was not big enough into Social Security? I wonder if the count, can you not also conclude from and not quick enough. So now what we Senator from Nevada can remember that statement that it does not count are going to do is come back with a when President George W. Bush came that our children and grandchildren bigger tax cut and I guess they say it is to us with his first tax cut, he said: will have to pay off that debt; that it not quick enough. This should be easy. We are going to does not count that the money coming The majority has written both tax have a surplus over the next 10 years of out of Social Security is going to be at bills. I voted against the first tax cut, $5.6 trillion. For goodness’ sake, you do the expense of our parents and grand- and I will vote against the second tax not need the money in Washington to parents—and some of us will be knock- cut because I believe the tax cut cer- waste on programs. Send it back home ing on those doors in just a few years? tainly is not going to help Social Secu- to the families so they do not have to If deficits do not count, then, frankly, rity. Remember, the issue before the pay taxes. we are counting out millions of Ameri- Senate today, and we are going to vote A lot of people were enthralled by cans who count on us to be financially on it at 2 o’clock, is whether this body this message. I was not. Neither was responsible, fiscally responsible. should give tax cuts to the elite of this the Senator from Nevada. Today, is it This bill is fiscally irresponsible. It country in the form of reducing the tax not a fact, I ask the Senator from Ne- was irresponsible 2 years ago. It dev- on corporate dividends or whether that vada, that same projection over 10 astated the economy. It added to our money should be put back in Social Se- years has gone from the President’s deficit. It has created more problems curity. That is the issue before the $5.6 trillion surplus to a $1.8 trillion economically than this country has Senate. It is a very simple issue. deficit and that this bill will make the seen in many years. I have talked about what I think is deficit even worse over the next 10 I ask the Senator from Nevada this: wrong with the plan in general. Re- years? Do we have a Democratic alternative member, my statement has been di- Mr. REID. The Senator is absolutely we are going to offer on the floor of the rected toward what I feel is a very per- right. The baby boom generation is Senate that is smaller in scope but tinent question: Does this body, the upon us. more focused on the issues we are hear- Senate, want to preserve Social Secu- Our senior population will nearly ing about, for example, that addresses rity or destroy Social Security? The double from 44 million to 77 million in the costs of health insurance for busi- vote at 2 o’clock will take that into just 6 years. That is what it is all nesses? Has the Senator met any busi- consideration. about. I am just stunned by—I believe ness leader in America today who has I believe when we had discussions on in intellectual consistency, and I try to not told him that the cost of health in- the Senate floor dealing with be consistent on what I do in my legis- surance is breaking the bank? lockboxes and keys to lockboxes that lative voting on the Senate floor. I try I say to the Senator from Nevada, if it was a good discussion because I felt to remember statements I have made, we are going to have a tax cut to invig- very strongly that we should do some- so I do not want to be inconsistent, to orate the economy, tell us what the thing to preserve Social Security. say something today that is incon- Democratic alternative would do and It is interesting to me that there was sistent with something I said pre- the scope of it and whether or not it a constitutional amendment offered on viously. reaches the level suggested by the Re- the Senate floor to balance the budget. What has happened to our friends on publicans. It was offered by Republicans. I offered the other side of the aisle who cared so Mr. REID. The Senator from Illinois a counter amendment. I said that is a much about deficits and balancing the has raised a question, and I am sure great idea, let’s do it, but we are going budget, who offered a constitutional the people watching this have the same to do it without using the Social Secu- amendment on the Senate floor to bal- question, which is: Okay, you do not rity surpluses. That was not enough for ance the budget? Of course, they want- like the Republican plan. What is your my friends on the other side of the ed to use Social Security surpluses, but idea? aisle. My amendment received 44 votes. still they were concerned about bal- Well, we do have an idea. It costs I was six votes short. I wanted a con- ancing the budget. much less money and has a direct im- stitutional amendment to balance the Senator RICK SANTORUM, the junior pact. We would want a new wage cred- budget but not use the surpluses of So- Senator from Pennsylvania, who is one it, which would provide $300 for each cial Security. The majority disagreed. of the leaders on the other side of the adult in a family; $300 for the first two

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00026 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6173 children. We want to accelerate the the Senator from Louisiana, we are the economy. And this time the Presi- child tax credit to $800 from the cur- going to have an opportunity to do dent says we need to rerun that play, rent $600. It eliminates the marriage something about unemployment bene- we need to try it again and again at tax penalty. It provides marriage pen- fits. Our plan calls for unemployment the expense of Social Security and alty relief for recipients of the earned- benefits. I think that is extremely im- Medicare. income tax credit, which by the way, portant. I ask the Senator from Nevada, as we Ronald Reagan said was the most im- Our plan is so much better. It creates listen to people such as Warren Buffett portant tax policy this country has over a million jobs right away. It is a talk about this issue, how would the ever had, the earned-income tax rate. program that has something the work- Senator respond to our Republican What is that? It creates a desire for ing men and women in this country critics who say: There you go again, people to work rather than try to go will benefit from. We had a meeting class warfare; that is all you Demo- on, say, welfare, because they can actu- with one of the most successful crats want to do, set the wealthy off ally make money by working with businesspeople in the country, Warren against the people who are not so their hands. Buffett, a man who is a study in how wealthy? Ronald Reagan loved this program, entrepreneurship should work. We have the earned-income tax credit, and we heard a lot about entrepreneurs in I ask the Senator from Nevada, in want to make it even more important. speeches on the other side. this coalition of the willing that we We want to have a 50-percent tax He is what the free market system is would put together in this class war- credit to help small businesses pay for all about. When asked a direct question fare, wouldn’t we include an awful lot health insurance premiums. These esti- about what he thinks of the Bush tax of people today who are struggling to mates are not exact, but there are from cut plan, after he wiped the smile off make ends meet, a lot of seniors who 21 million to 25 million Americans with his face, he said: You know, if this tax face cuts in Social Security for their no health insurance. There are millions cut plan passes, next year I will re- own benefits, a lot of people who do not more who are underinsured. Now, this ceive—and this figure might not be have health insurance because their is not going to answer all the problems, exact but real close—an extra $390 mil- businesses cannot afford it? I suggest but it sure is a step in the right direc- lion for me, Warren Buffett. the coalition on our side of class war- tion. It will help small businesses pay He said: I do not need that. I do not fare is a pretty broad one across Amer- for health insurance premiums. want that. It is not going to create ica. I ask the Senator to respond. Mr. DURBIN. Just so it is clear, I ask jobs. What we should do, if there is $390 Mr. REID. I say to my friend, in the Senator if the Democratic plan pro- million to go around, is give 390,000 parroting something the Senator said vides a tax credit for small businesses people a thousand dollars. earlier today, those people on the other to pay for health insurance? The Re- He said: They will spend that. That side of the aisle who are pushing this publican plan provides no benefit for will help the economy. tax plan are not evil people; they are the health insurance cost to small That is the difference between our not bad people. They are good people. business. That is as clear as can be. plan and their plan. The Warren They just live in a different political Has the Senator from Nevada found in Buffett understanding of what our world. They live in a world where they that Republican approach any help for economy is all about is about people are willing to change their political small businesses to pay for health in- spending money. philosophy according to who is in the surance? Mr. DURBIN. I ask the Senator from White House. People who used to say Mr. REID. As I mentioned, the an- Nevada, does this not reflect the basic that deficits matter now say they do swer to all of the problems—environ- difference in outlook and vision from not matter. People who said we had to mental problems, better schools, home- the Republican side of the aisle to the balance the budget no longer say we land security—is cut taxes for the elite Democratic side of the aisle, that War- have to balance the budget. They sim- of this country. That will handle every- ren Buffett—who happens to be the sec- ply are not willing to approach the thing. I am sure that is their reasoning ond wealthiest man in America and world the way I think the world needs for this no-tax policy on health insur- happens to be a Democrat, by his own to be approached. ance. professed political faith—understands I think I am right. I believe I am In answer to the Senator’s question, that helping elite investors in America right. Everyone is entitled to their we would allow small business expens- is not the key to a strong economy, yet opinion. I have a little substantiation. ing that I think is very important. that is what the Republicans return to I have 10 Nobel laureates who believe I That is in the Republican plan. I think time and time again? am right, that this tax cut is not good; it is important we have that in ours. We believe, as Warren Buffett be- it will not help the economy. However, We want a bonus deduction for busi- lieves, if we want to strengthen Amer- no one has to accept these Nobel laure- nesses on depreciation rules. We want a ica’s economy, have faith in America’s ates. Ask the Congressional Budget Of- 20-percent tax credit for businesses working families, give them the help- fice. They, the Republicans, picked who that invest in the broadband high- ing hand they need to cope with the re- runs that, we did not, and the Congres- speed Internet infrastructure. We want ality of life, the demands of life, and sional Budget Office says it will not $40 billion direct relief to States and provide a helping hand to the unem- help anything. local governments. It is so important ployed who, through no fault of their we do that. own, are out of work. There are three I say to my friend from Illinois, this As I mentioned to the Senator earlier times as many long-term unemployed vote we will take in a few minutes is in responding to one of the questions, in America today—that is, those out of an example of the difference in philos- the State of Nevada is devastated be- work for over 6 months—than when ophy between what is going on with the cause of unfunded mandates. Leave No President George W. Bush took office. majority and we, the Democrats. What Child Behind, as I said, according to His economic plan has failed, and what we are saying is the dividend tax cuts the State legislature, is leaving lots of we are hearing again is this vision that for the elite of this world should not go kids behind because they have no the way to help the unemployed, the forward. That money should be saved money to implement all the testing re- way to help the working families is to for Social Security. That money that quirements and things that our school give to Warren Buffett a $390 million will go to elite people is coming out of districts are being forced to do. They tax break. It is a wide chasm of the Social Security trust fund. do not have the money to do it. thought between the two sides of the If there was ever an example of how Homeland security, we have all kinds aisle. we should vote for constituents, it is of burdens upon us as a result of 9/11, I would argue, for those who want to now. Do you vote for people who want and I think we should be helping with make up their mind, take a look at to maintain the strong Social Security that. what happened to the President’s last Program or do you vote for the people With our tax plan, which we are tax cut. It did not work. It provided who are going to give big tax cuts to going to have a chance to vote on and some assistance for the wealthy, but it Warren Buffett? There is a simple an- which I think is going to be offered by did not create jobs. It did not revive swer to the question.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00027 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6174 CONGRESSIONAL RECORD — SENATE May 14, 2003 Remember the vote today at 2 p.m.: ing to do. We are seeking to recognize affirmative, the motion is rejected. Dividend tax cuts or saving Social Se- the situation we are in, recognize that The point of order is sustained, and the curity. It is as simple as that. We rec- part of the reason for reduced income amendment falls. ognize that anyone can puff it any way is the economy, and that instead of Mr. GRASSLEY. I move to recon- they want; anyone can slam it any way spending, we are seeking to create jobs. sider the vote. they want. That is what the vote is It is time for a vote. Mr. REID. I move to lay that motion about. The first vote we will take on On this bill, Mr. President, this lan- on the table. this tax cut bill is whether you are guage is not germane to the legislation The motion to lay on the table was going to vote for Social Security or the now before the Senate. Therefore, I agreed to. wealthy of this country. It is as simple raise a point of order under section Mr. BREAUX addressed the Chair. as that. 305(b)2) of the Congressional Budget The PRESIDING OFFICER. Who The PRESIDING OFFICER. The Sen- Act, 1974. yields time on the pending amend- ator from Wyoming. The PRESIDING OFFICER. The ment? Mr. THOMAS. I understand we will point of order is in order at this time. The Senator from Montana. vote in 5 minutes. Mr. REID. Pursuant to section 904 of Mr. BAUCUS. Madam President, I The PRESIDING OFFICER. That is the Congressional Budget Act, I move yield whatever time the Senator from correct. to waive the section of the Budget Act Louisiana would desire to have. Mr. THOMAS. Mr. President, this has for the pending amendment, and I ask The PRESIDING OFFICER. The Sen- been an interesting dialog and cer- for the yeas and nays. ator from Louisiana. tainly does show a different point of The PRESIDING OFFICER. Is there a Mr. BREAUX. Madam President, I view on that side of the aisle as op- sufficient second? ask the Chair to notify me if I go for 10 posed to this side of the aisle. There is a sufficient second. minutes. I do not want to go more than The Senator from Nevada summed it The question is on agreeing to the that. up pretty well when he said it is all motion. The yeas and nays have been The PRESIDING OFFICER. Is the about spending. That is exactly what it ordered. The clerk will call the roll. Senator yielding time from the bill? is. The question is whether you are try- The bill clerk called the roll. The Senator from Montana. ing to do something to stimulate the Mr. REID. I announce that the Sen- Mr. BAUCUS. Yes. creation of jobs or whether you want to ator from North Carolina (Mr. The PRESIDING OFFICER. The Sen- throw money out and spend it, such as EDWARDS), the Senator from Massachu- ator from Louisiana. $40 billion. setts (Mr. KERRY) and the Senator from Mr. BREAUX. I thank the Chair and What we are talking about is doing Maryland (Mr. SARBANES) are nec- I thank my distinguished ranking something about the economy. It essarily absent. member, the Senator from Montana, seems as we go through this, we do not I further announce that, if present for yielding me this time. ever recognize the situation we are in. and voting, the Senator from Massa- My colleagues, let me just say that One of the reasons we have a problem chusetts (Mr. KERRY) would vote the bill the Finance Committee has is that sources of revenue have been re- ‘‘Aye’’. brought to the floor is a tax cut piece duced substantially because the econ- The PRESIDING OFFICER (Mrs. of legislation which also raises signifi- omy has weakened. They do not talk DOLE). Are there any other Senators in cant amounts of taxes on American about that. That is why we are doing the Chamber desiring to vote? citizens. Tax cuts are a wonderful some of the things that are different The yeas and nays resulted—yeas 44, thing to do, for those of us who are than we may have done before. Reve- nays 53, as follows: elected officials. It is great to say we nues registered in 2000 were over $2 [Rollcall Vote No. 147 Leg.] have cut taxes by x billions of dollars, to send out a press release to our con- trillion, and they fell to the low $2 tril- YEAS—44 lions; and in 2002 we are $1.8 trillion be- stituents back home saying we cut Akaka Dorgan Levin taxes by x billions of dollars. cause the economy is not working. Bayh Durbin Lieberman What we are trying to do is to stimu- Biden Feingold Lincoln It is also important to read the fine late that economy, of course. Bingaman Feinstein Mikulski print. The fine print in this legislation There is talk about doing everything Boxer Graham (FL) Murray tells the rest of the story. And the rest Byrd Harkin Nelson (FL) for Warren Buffett. That talk is not Cantwell Hollings of the story is that, among other provi- Nelson (NE) sions in the bill, there is a provision true, and it has nothing to do with Carper Inouye Pryor Chafee Jeffords what we are seeking to do. Do you Reed that increases taxes by $35 billion on Clinton Johnson Reid American citizens. think acceleration of the 10 percent Conrad Kennedy Rockefeller regular income tax rate is good for Corzine Kohl Tax cuts have to be done in one of Daschle Landrieu Schumer two ways. You can cut taxes by in- Warren Buffett? I don’t think so. Stabenow What we are talking about is raising Dayton Lautenberg creasing the size of the deficit and Dodd Leahy Wyden the amount of money that is tax free passing it on to the next generation. for people in the bottom line. We are NAYS—53 This bill does that. We have the largest talking about the acceleration of the Alexander DeWine McConnell deficit projections we have ever had in regular income tax cuts that were put Allard Dole Miller the history of our country. And now we Allen Domenici Murkowski are saying, on top of that, we want to into place to make it happen more Baucus Ensign Nickles quickly. Bennett Enzi Roberts make it larger. We are going to have a What we are trying to do is stimulate Bond Fitzgerald Santorum tax cut in order to make the deficit the economy. Do you think accelera- Breaux Frist Sessions larger in the hopes that it may gen- Brownback Graham (SC) Shelby tion of the marriage penalty tax is for Bunning Grassley erate some jobs. That is one way to pay Smith Burns Gregg for the tax cut. Warren Buffett? I don’t believe so. It is Snowe Campbell Hagel for everyone. On the question of fair- Specter The other way is to raise taxes in Chambliss Hatch ness in taxation for people who are sin- Cochran Hutchison Stevens other areas. This bill does that, too. Lo gle or married, Warren Buffett has Coleman Inhofe Sununu and behold, during the markup of the nothing to do with it. Collins Kyl Talent Senate Finance Committee, there was Thomas Acceleration of child tax credit that Cornyn Lott a provision that had not had 1 day of Craig Lugar Voinovich is Warren Buffett? I don’t believe so. Crapo McCain Warner hearings, had not had 1 hour of hear- How about small business expensing? ings—in fact, it had not had 1 minute This is one of the most important NOT VOTING—3 of hearings because it was never things we can possibly do with regard Edwards Kerry Sarbanes brought up in the committee—to dis- to the economy. It has nothing to do The PRESIDING OFFICER. On this cuss a $35 billion tax increase on Amer- with Warren Buffett. vote, the yeas are 44, the nays are 53. ican workers who work overseas, some- What we really have is a real declara- Three-fifths of the Senators duly cho- times in very difficult parts of the tion of difference in what we are seek- sen and sworn not having voted in the world. That tax break they got was

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00028 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6175 being eliminated—totally eliminated— versely affecting are wage earners who priate time. It should receive a major- without one word of discussion, one work month to month, many of them ity of the support of our colleagues, day of hearings about whether this was earning $50,000, $60,000, $75,000 a year to both Republicans and Democrats. the right thing to do, or about whether help pay for tax benefits for those who There is a very simple way to pay for it should be to this extent, whether it are relying on dividends as a part of it—by simply not increasing the divi- should be less than this, or anything. their income, many of which go to the dend tax deduction as much as the cur- In addition to increasing the size of very highest income earners. rent bill does. We can accomplish this the deficit, we have in just this one In Louisiana, 92 percent of the citi- in a fair manner. If someone wants to provision a $35 billion tax increase on zens are not affected by the so-called talk about this later on, about a pay- American workers. Why do American double taxation on dividends. We ought for, someone wants to eliminate this workers get a credit for working over- to get rid of it, but we ought to find a rate for American workers, if someone seas? Because, No. 1, they are not in way to pay for it. Only 8 percent of my wants to make an argument that it is this country. They don’t enjoy the ben- citizens are affected by the tax on divi- appropriate to have a $35 billion tax in- efits and the security of living in this dends. Quite frankly, most people who crease on American workers, let them country, and, therefore, the argument earn dividends put them in retirement make the case in the appropriate forum correctly says that in order to encour- accounts or put them in investment which is the Senate Finance Com- age American workers to have jobs portfolios that are already tax exempt. mittee. Don’t let it be slipped into the overseas instead of hiring foreign citi- Ninety-two percent of my people in bill overnight as a pay-for for some- zens, the Tax Code says that we are Louisiana are not affected by it at all. thing that is questionable as far as going to give American workers an Yet in order to pay for something that short-term tax policies. $80,000 tax exemption on wages that only adversely affects 8 percent of the At the appropriate time, I will offer they earn overseas. In many cases, citizens in Louisiana, we are going to an amendment to preserve this provi- they work in very dangerous places. In eliminate a foreign tax credit that will sion which is very important to Amer- most cases, they don’t get the privi- be adverse to literally hundreds of ican workers. leges and the security of living in the thousands of people, over 400,000 peo- I yield the floor. United States. ple. The PRESIDING OFFICER. Who The paper just today talks about The type of people we are affecting yields time? Mr. GRASSLEY. Mr. President, an seven such Americans who lost their are really Americans who are working amendment will be offered tomorrow lives in Saudi Arabia because of a ter- overseas for relatively modest salaries which Senator BREAUX has already spo- rorist activity. That is just in one in far off places doing important work ken in favor of. I wanted to speak in country. that ultimately creates jobs in this support of the language that is in the At the appropriate time I will be of- country. We have had many statements bill. I am speaking against the amend- fering an amendment to strike the tax from organizations that have workers ment which will be offered by Senator increase of $35 billion in the legislation working overseas who say, look, if this BREAUX tomorrow. which is currently before this body. We exemption is gone, we will have to ter- The policy issue presented by repeal have had expressions of support for my minate those American workers and of section 911 is whether taxpayer dol- amendment to take out the elimi- give the jobs to foreigners working in lars should be used to underwrite an nation of this tax credit for American their own country. We will be having employer’s cost of sending employees citizens from the Chamber of Com- foreign citizens hired by American overseas. Section 911 excludes from tax merce, from the National Association companies doing work that is now cur- the first $80,000 of foreign wages and of Manufacturers, from the National rently done by American citizens. That additional foreign housing costs that Foreign Trade Council, from the Finan- is not good tax policy. are paid for by the employer. Under cial Executives International, from the We could have argued in the Finance normal tax rules, these amounts would U.S. Council for International Busi- Committee, if we wanted, move in that be taxable. According to the latest IRS ness, from the Association of General direction. We should have had hearings data, 358,000 taxpayers claim this ex- Contractors of America, from the on it. We never had one witness come clusion, yet repeal of the exemption American Council of Engineering Com- in and say, look, this section 911 of the raises $35 billion. panies. To show that the support is Tax Code is bad policy; we need to The reason repeal raises so much is there from companies other than busi- change it. because many U.S. citizens living over- ness-oriented companies, we have non- It came up overnight because some- seas don’t pay tax to either the United profit organizations such as the Catho- one said, here is a nice pay-for. Let’s States or even to the foreign country. lic Relief Services, with which the raise $35 billion. Let’s increase taxes by The section 911 is skewed heavily to- Chair is familiar, and the International $35 billion in order to pay for the divi- wards upper-income taxpayers. The Rescue Commission that have ex- dend tax cut which, in most cases, af- more a person owns, the more they can pressed support for retaining section fects only a very few American workers exclude free foreign housing. 911 which the current bill eliminates. and American citizens. Section 911 then is a subsidy to an The point is, we are going to have to As I have said, the groups that sup- employer for the costs of sending em- find a way to reinstate. We will have to port retaining 911 are contracting ployees overseas. Section 911 only ap- find a way to cover $35 billion because groups, oil and gas company groups, plies to private sector employees who tax cuts are not for free. We have to but also some of them are organiza- move overseas of their own free will. It pay for them. That is the problem this tions and groups that I read, for in- is not available to government or mili- bill presents. stance, the Catholic Relief Services, tary employees stationed overseas who My amendment would reduce the the International Rescue Commission, are obviously there through some- amount of the dividend tax exclusion workers who we have to depend on for body’s command and not by their own above $500 to 5 percent instead of the 10 doing humanitarian work on behalf of choice. percent that is currently in the bill. I the United States around the world. If Most employers offer their overseas think that is a fair tradeoff. It makes this provision is taken out of the cur- employees ‘‘tax equalization’’ packages no sense to say: We are going to give, rent Tax Code, you will have foreign which guarantee the employee will not for example, a dividend tax exemption citizens replacing American workers to pay more taxes working overseas than for the people in my State of which do work for American relief agencies they would pay if they were working only 8 percent would be affected by it around the world. What kind of a mes- within the United States. in order to have a tax increase on over sage does that send to the world when Section 911 reduces the amount of 400,000 other American citizens who all of the workers for the Catholic Re- tax an employer has to reimburse work in far off places around the world. lief Services of the United States are under those agreements, making it It makes no sense to say: All right, foreign workers? We need these Amer- then a help to the employer as much as we will help a small number, and we ican workers in these areas. to the employee. will adversely affect a very large num- My amendment will preserve section Why does this make any sense? Obvi- ber. The type of people we are ad- 911 and we will offer it at an appro- ously, I feel it makes sense or it

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00029 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6176 CONGRESSIONAL RECORD — SENATE May 14, 2003 wouldn’t be in this bill that I present The PRESIDING OFFICER. Without (1) the Senate Finance Committee and the to the Senate. If an employer sends an objection, it is so ordered. Joint Economic Committee should under- employee from Florida, which has no The amendment is as follows: take a comprehensive analysis of simplifica- income taxes, to Massachusetts, which (Purpose: To urge the Senate Finance Com- tion including flat tax proposals, including mittee and the Joint Economic Committee appropriate hearings and consider legislation has very high income taxes, we do not providing for a flat tax. provide such a subsidy. to hold hearings and consider legislation Mr. SPECTER. I am offering this Why do we subsidize moving employ- providing for a flat tax) amendment on behalf of Senator ees overseas? I think sending employ- At the end of subtitle C of title V as the GRASSLEY, Senator BENNETT, Senator ees overseas should be a business deci- following: SEC. . FLAT TAX. THOMAS, Senator SUNUNU, and myself. sion, not a tax decision. Repeal will not (a) FINDINGS.—The Senate finds the fol- This amendment calls for consider- cause U.S. citizens to be double taxed. lowing: ation by the Senate Finance Com- A U.S. citizen who earns income that is (1) The current Internal Revenue Code, mittee and the Joint Economic Com- taxed by a foreign country is allowed with it myriad deductions, credits and sched- mittee of tax simplification including a to reduce their U.S. taxes for any for- ules, and over 17,000 pages of rules and regu- lations, is long overdue for an overhaul. flat tax. eign income taxes paid. A foreign tax The essence is set forth in the brief credit is not allowed, however, for for- (2) The current Internal Revenue Code has over 6,900,000,000 words compared to the resolution clause: eign property and gas taxes and levies Bible at 1,773,000 words, the Declaration of It is the sense of the Senate that the Sen- for social programs sponsored by the Independence at 1,300 words, the Gettysburg ate Finance Committee and the Joint Eco- governments of foreign countries. Address at 267 words, and the Pledge of Alle- nomic Committee should undertake a com- We do not subsidize those taxes or giance at only 31 words. prehensive analysis of simplification includ- those policies. Many claim U.S. exports (3) It is an unacceptable waste of our na- ing flat tax proposals, including appropriate are enhanced by sending U.S. personnel tion’s precious resources when Americans hearings and consider legislation providing overseas. However, there is no basis for spend more than 5,800,000,000 hours every for a flat tax. year compiling information and filling out such a claim. Whether a U.S. company Internal Revenue Code tax forms. In addi- Madam President, this is a subject uses U.S. products in its foreign oper- tion, taxpayers spend $194,000,000,000 each that I have addressed virtually every ations is a business decision of the U.S. year in tax code compliance. America’s re- year since introducing a flat tax pro- employer. It is not determined by the sources could be dedicated to far more pro- posal in the spring of 1995. The flat tax nationality of the foreign manager. ductive pursuits. proposal was introduced in the House It has come to our attention that (4) The primary goal of any tax reform is of Representatives by Congressman certain nonprofits, charities, and reli- to promote growth and remove the ineffi- Armey in the fall of 1994. After exten- gious organizations use section 911 to ciencies of the current tax code. The flat tax will expand the economy by an estimated $2 sive consideration and analyses of further their overseas activities. We trillion over seven years. these proposals by two distinguished plan to work with these organizations (5) Another important goal of the flat tax professors from Stanford, Professors to exempt these activities. is to achieve fairness, with a single low flat Hall and Rabushka, it seemed to me Section 911 is a tax loophole that tax rate for all individuals and businesses. that it was long overdue that a serious forces you and me, as well as every (6) Simplicity is another critically impor- effort be made to simplify the U.S. Tax other taxpayer out there throughout tant goal of the flat tax, and it is in the pub- Code. the United States, to subsidize high- lic interest to have a ten-lined tax form that At the present time, we have a Tax fits on a postcard and takes 10 minutes to fill paid corporate employees and their out. Code which has grown to 6.9 million companies. It is unfair, and the Con- (7) A comprehensive analysis of our tax words. That is the count in the year gress needs to fix it, and the legislation structure has concluded that a flat tax of 2000. When the Tax Code was counted before us fixes it. 19% could be imposed upon individuals and in the year 1955, there were 744,000 The Breaux amendment, if agreed to, be revenue neutral. words. There are 325 forms to be filled would take that fix out of this legisla- (8) If the decision is made to include de- out, and the American taxpayers spend tion. Everyone voting for the Breaux ductibility on items such as interest on home mortgages and charitable contribu- more than 5.8 billion hours each year amendment will be voting for these tax tions, the flat tax would be raised from a 19% preparing them. And it is estimated by benefits the rest of us are paying for. to a 20% rate to accommodate the deduc- the Tax Foundation that $194 billion is So obviously, tomorrow, I urge the tions and remain revenue neutral. spent each year in complying with the defeat of the Breaux amendment. (9) The flat tax would tax business at a 20% tax laws. I have seen other estimates I yield the floor. rate on net profits and be revenue neutral that place the issue of compliance as Madam President, I yield the Senator and lead to investment decisions being made high as some $800 billion. from Pennsylvania such time as he on the basis of productivity rather than for But there is no doubt that the Fed- may consume. tax avoidance. (10) The flat tax would lead to the elimi- eral Tax Code and the forms are bur- The PRESIDING OFFICER. The Sen- nation of the capital gains tax. This would densome, onerous, and unduly com- ator from Pennsylvania. become a powerful incentive for savings and plicated. The vast majority of Ameri- AMENDMENT NO. 569 investment—which translates into economic cans require professional help to fill Mr. SPECTER. Madam President, I growth and expansion, more and better jobs, out a tax return. Some people say even send an amendment to the desk and and raising the standard of living for all a Philadelphia lawyer cannot figure it ask for its immediate consideration. Americans. out. I am inclined to agree with that. (11) The flat tax would lower the cost of Mr. BAUCUS. Madam President, it is capital by allowing businesses to write off Senator GRASSLEY, may the record my understanding the Senator from the cost of capital purchase in the same year show, concurred with my last state- Pennsylvania wishes to offer an amend- the purchase was made as opposed to com- ment. He has never been a devotee of a ment. I ask unanimous consent that plying with complicated depreciation sched- Philadelphia lawyer. The CONGRES- the pending amendments be set aside ules. SIONAL RECORD is replete with com- so the Senator from Pennsylvania may (12) By eliminating the double tax on divi- ments to that effect with reference to offer his amendment. dends, the flat tax eliminates the distortions one of his colleagues who was elected The PRESIDING OFFICER. Without in the tax code favoring debt over equity fi- in the same year, 1980. nancing by businesses. objection, it is so ordered. (13) The flat tax would eliminate the estate Back to the subject at hand, Albert The clerk will report. and gift tax. With the elimination of the es- Einstein said: The hardest thing in the The senior assistant bill clerk read as tate and gift tax, family-held businesses will world is to understand the income tax. follows: be much more stable under the flat tax sys- That is quite a statement for Albert The Senator from Pennsylvania [Mr. SPEC- tem. Einstein to make. I think it shows TER], for himself, Mr. GRASSLEY, and Mr. (14) As tax loopholes are eliminated and what the complications are. the tax code is simplified, there will be far BENNETT, proposes an amendment numbered We are considering now a tax pro- 569. less opportunity for tax avoidance and fraud, posal that will probably end up in this which now amounts to over $120 billion in Mr. SPECTER. Madam President, I uncollected revenue annually. body as $350 billion because the distin- ask unanimous consent that reading of (b) SENSE OF THE SENATE.—It is the sense guished Senator from Iowa, Mr. GRASS- the amendment be dispensed with. of the Senate that— LEY, has said that is his word on what

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00030 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6177 is going to come back out of the con- The flat tax would expense all so- more complex after this legislation is ference. The House of Representatives called capital investments by deduct- passed, and it will be passed, than is is talking about $550 billion. The Presi- ing them immediately in the first year. the code today. dent’s original proposal was $726 bil- If that were to be done, there would be We did, however, include one measure lion. I support the full proposal offered a tremendous stimulus for entre- of tax simplification at my behest. It is by the President. preneurs to invest in new capital in- small, but it is important, I think. When we consider that we have a $10 stead of having to depreciate it over a There are many definitions in the code. trillion economy, and we are talking long period of years on complicated de- There is a definition of a child for the about $726 billion or $550 billion or $350 preciation schedules. purpose of the child tax credit or the billion over a 10-year period, and look- The flat tax eliminates the estate earned-income tax credit or as an ex- ing at a gross economy of $10 trillion a tax, capital gains tax, and the double emption as a dependent or for purposes year now, and over 10 years it will taxation of dividends. For families of of a head-of-household exemption. It amount to $140 trillion, it is question- modest means and their conflicting depends on how many children the able as to what the impact would be of schedules, they would pay less under a household has in terms of what addi- any tax cut. But I think the Presi- flat tax. The various schedules that tional credits or exemptions that head dent’s proposal is worth a try. I am have been proposed are complicated of household has. There are five defini- prepared to vote for that figure—the and sometimes conflicting. That is why tions in the code, each different for highest figure we can have for this I would like to see the hearings on a each of the conditions I mentioned. We body on a conference report. comprehensive analysis, to really find simplified that situation. What should be done is to take, fi- out what it would mean at all levels. nally, some bold, innovative action and We said, whether it is earned-income Today, when the loopholes are ap- tax credit, the child credit, a dependent at least consider tax simplification and plied, the sky is the limit. The wealthi- a flat tax. It has never been considered for the purpose of exemption or head- est people, who earn the most money, of-household exemption, the definition or analyzed, and there are some very can avoid paying taxes altogether, and thorough comprehensive distinguished of child is the same. That will make that would be eliminated. There is a the code a bit easier for taxpayers and studies. tremendous amount of money lost The leading study, by Professors Hall practitioners. through fraud. That, too, would be re- and Rabushka, analyzed the revenue I appreciate the amendment offered duced substantially, if not virtually picture and concluded that, at 19 per- by the Senator from Pennsylvania. It eliminated with a flat tax proposal. So, cent, the flat tax would be revenue is helpful always to look for ways to in essence, my point is when we have neutral. That would be eliminating all simplify the code. I am not terribly en- had so much controversy and argument deductions. couraged we are going to get the code In the flat tax legislation that I have in the Congress of the United States simplified very much in the next sev- introduced, I have retained two deduc- about the $726 billion over 10 years, and eral years. It would be great if we tions. I introduced the flat tax again $550 billion over 10 years, and $350 bil- could. We should make those efforts. If this year in advance of April 15, on lion over 10 years, the way to really history is any guide, regrettably the April 11. We were not in session on give the economy a shot in the arm is President and the Congress together April 15. During the 104th, 105th, and to eliminate all of this nonproductive are making the code more complex 106th Congresses I introduced the flat time filling out tax returns and the nu- every year. tax legislative proposal to coincide merous forms attendant thereto and Some day the straw will break the with income tax day. The proposal I allow American ingenuity to focus on camel’s back. The code, in my judg- have introduced retains the deduction what makes economic sense, produc- ment, is going to collapse. It is going for home interest and charitable con- tivity sense, and not what you can do to get so complex and finally people tributions. So I have taken the two by contortions and gyrations to reduce are going to get fed up and make sig- items that are the most popular and your tax bill. nificant changes. We are not there. I do It would be a godsend if on April 15 that cost money. That requires the flat not think that will occur for several we sat down and filled out a postcard. tax to be raised from 19 percent to 20 years. We will all go through it. The flat tax percent. The amendment offered by the Sen- is something which is certainly worthy It may be that the Finance Com- ator from Pennsylvania is a step in the of consideration and study. mittee or the Joint Economic Com- direction toward forcing us in the Con- mittee, in their wisdom, would want to My best judgment is that the flat tax would be very worthwhile, but I would gress to grapple with the undue com- have other deductions, or perhaps no plexity of the code, whether the flat deductions, leaving it at the flattest want to reserve my best judgment today on a study that I have made. I tax, consumption tax, value-added rate of 19 percent. tax—who knows what is the right ap- This, Madam President, is a tax re- would like to see the Finance Com- proach; that is to be decided another turn form under the flat tax. It is genu- mittee and the Joint Economic Com- day—or just stay with our current code inely the size of a postcard and could mittee undertake the kinds of hearings and make a lot of simplifications. For be filled out in some 15 minutes. Simi- and analyses which would give appro- example, phasing out so-called Peps larly, for the corporate tax, the cal- priate consideration. and Peases. That is the section of the culation has been made that it would Today the Internal Revenue Code code that says we will give you a tax be revenue neutral at 20 percent. constitutes cruel and unusual punish- break on the one hand but take them Today, there is an enormous amount of ment. A flat tax would be an enormous away on the other. We will give a tax time with the lawyers, the account- step forward. ants, the tax specialists, figuring out I thank the Chair and yield the floor. break, but it phases out in a few years. loopholes, figuring out tax avoidance, The PRESIDING OFFICER. The Sen- There are lots of provisions in the code where it is legal, contrasted with tax ator from Montana. like that. One major simplification evasion, where it is illegal. Mr. BAUCUS. Madam President, be- would be to get rid of those provisions. If, once and for all, we directed our sides being willing to accept the I compliment the Senator for advanc- attention to what is economically pro- amendment offered by the Senator ing the ball and thinking more about ductive—that is, what makes sense from Pennsylvania, I add that there simplification. I thank him for offering from an economic point of view, with- are some portions of this bill which the amendment. out regard to the tax consequences— further make the Tax Code more com- The PRESIDING OFFICER. The Sen- there would be a burst of energy and plex. We often do that as we are trying ator from Pennsylvania. productivity, and it would do wonders to, on the one hand, balance the budget Mr. SPECTER. Madam President, I for our economy. That is the way to or fit within certain budget restric- note for the record, in a brief colloquy stimulate the American economy, in- tions and, on the other hand, help a with the Senator from Montana, his stead of tinkering at the edges, which certain tax policy which, in effect, adds thrust at simplification I think is a is what many of the tax modifications a lot more complexity to the code. Re- hallmark of what we are looking for. have been. grettably, the code is going to be much That is one of the principal objectives,

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00031 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6178 CONGRESSIONAL RECORD — SENATE May 14, 2003 perhaps the principal objective, al- is best for the country. Then we will (Purpose: To ensure that the limit on though it goes alongside trying to in- have a winner out of this that shows a refundability shall not apply to the addi- crease productivity and growth. clear division of keeping what we have, tional $400 child credit for 2003, to make When I talked to the Senator from which I hope does not happen, or com- the dividend exclusion effective for taxable years beginning in 2003, and to eliminate Montana briefly in showing him the ing up with something new. the increase in the dividend exclusion from amendment, I added a modification That mandate from an election will 10 percent to 20 percent of dividends over which would call for simplification in- move the people and the people then $500) cluding the flat tax, but in the resolve will move the Congress. Being chair- On page 19, lines 12 and 13, strike ‘‘(20 per- clause, to call for that simplification. man of the Senate Finance Committee, cent in the case of taxable years beginning I appreciate the comment by the Sen- I should not have to wait for that to after 2007)’’. ator from Montana. I hope he will join happen, but it seems that we have so On page 26, lines 18 and 19, strike ‘‘(80 per- me in this amendment. It advances the cent in the case of taxable years beginning much work before us dealing with after 2007)’’. ball not anywhere near the goal line, short-term issues that we do not spend but I think everyone will agree there On page 26, lines 21 and 22, strike ‘‘(80 per- time on the long-term policies, which cent in the case of taxable years beginning has never been a serious study of this this amendment encourages. after 2007)’’. proposal, and I hope there will be some On page 27, line 19, strike ‘‘2003’’ and insert impetus given by this amendment. I I thank the Senator from Pennsyl- vania for his amendment. I am going to ‘‘2002’’. yield the floor. At the end of subtitle C of title V, insert: obviously vote for it. I hope it is adopt- The PRESIDING OFFICER. The Sen- SEC. . GUARANTY OF ADDITIONAL $400 CHILD ator from Iowa. ed overwhelmingly, but I hope it has an CREDIT FOR 2003 AND MODIFICA- Mr. GRASSLEY. Madam President, I impact beyond what we in the Congress TIONS OF DIVIDEND EXCLUSION. am a cosponsor of the amendment by will be called upon to study. I hope it (a) IN GENERAL.—Section 24(d) (relating to portion of credit refundable) is amended by the Senator from Pennsylvania. I very has an impact on the next Presidential election. adding at the end the following new para- much support this amendment. I do not graph: think we have a hard time convincing The PRESIDING OFFICER. The Sen- ‘‘(4) SPECIAL RULE FOR 2003.— the people of this country about the ator from Pennsylvania. ‘‘(A) IN GENERAL.—In applying this sub- complicated aspects of the Tax Code Mr. SPECTER. Madam President, I section— and the need for something more sim- ask for the yeas and nays. ‘‘(i) in the case of any taxable year begin- ning in 2003, or ple to replace it. There seems to be an The PRESIDING OFFICER. Is there a overwhelming consensus on the part of ‘‘(ii) for purposes of determining the sufficient second? amount of the credit allowed under this sec- the American people about that point. There appears to be a sufficient sec- tion for the taxpayer’s first taxable year be- What we need a national dialog ginning in 2002 in computing the child tax about—and I think this amendment en- ond. credit refund amount under section 6429, the courages that dialog—as well as a The yeas and nays were ordered. increase under paragraph (1) for such taxable study is what is going to take its place. The PRESIDING OFFICER. Who year shall be determined under subparagraph Seventy percent of the people think yields time? (B). the present Tax Code ought to be ‘‘(B) ADDITIONAL INCREASE.—For purposes Mr. GRASSLEY. Madam President, thrown out, partly because of how com- of subparagraph (A), the amount of the in- we do not want this vote now. We want crease under paragraph (1) for a taxable year plicated it is and because it may be to have this vote later. shall be equal to the sum of— viewed as unfair. There does not seem ‘‘(i) the amount of such increase deter- to be that sort of consensus as to what I suggest the absence of a quorum. mined without regard to this paragraph, plus takes its place. The PRESIDING OFFICER. The ‘‘(ii) the lesser of— For instance, I have had opportuni- clerk will call the roll. ‘‘(I) $400, multiplied by the number of ties to see surveys where approxi- qualifying children of the taxpayer for the The assistant legislative clerk pro- taxable year, or mately 20 percent of the people want a ceeded to call the roll. national sales tax and 30 percent of the ‘‘(II) the amount determined under para- Mr. BAUCUS. Madam President, I graph (1)(A) for the taxable year, reduced by people want a flat rate income tax. ask unanimous consent that the order the amount of the credit allowed after the Maybe Congress ought to show leader- for the quorum call be rescinded. application of section 26 and this subsection ship and follow up on that 20 percent or (without regard to this paragraph). 30 percent, but I do not think that is The PRESIDING OFFICER. Without For purposes of applying subclause (II) to going to happen until we get some con- objection, it is so ordered. the taxable year described in subparagraph sensus among the American people Mr. BAUCUS. Madam President, I (A)(ii), the amount determined under para- that is in the 40-percent range of what ask unanimous consent that the pend- graph (1)(A) shall be computed by taking into account the adjustments described in ought to take the place of the present ing amendments be temporarily set section 6429(b).’’ income tax mess. aside so I might offer an amendment. (b) EFFECTIVE DATE.—The amendment The amendment before us is very use- The PRESIDING OFFICER. Is there made by subsection (a) shall take effect as if ful from the standpoint of encouraging objection? included in the provisions of section 106 of congressional committees to do the this Act and section 108 of this Act shall Without objection, it is so ordered. proper work, but I believe in the final apply to such amendment as if it had been so analysis, to get the consensus that it is AMENDMENT NO. 570 included. going to take to bring about a sim- Mr. BAUCUS. Madam President, I Mr. BAUCUS. Madam President, this plified tax system, replacing the send an amendment to the desk and amendment is designed to take effect present complicated system, is when it ask for its immediate consideration. earlier rather than later and provide becomes part of the national debate be- substantially more benefits than the The PRESIDING OFFICER. The tween two candidates for President. tax bill that is presently before us. It is clerk will report. For instance, ideally, we have Presi- designed to help stimulate the econ- dent Bush seeking reelection next year, The assistant legislative clerk read omy with more wallop, more punch, and he would make an issue out of how as follows: earlier rather than later. complicated the Tax Code is and offer The Senator from Montana [Mr. BAUCUS] How does it do that? Two ways. First, an alternative. Ideally, a flat rate in- proposes an amendment numbered 570. it would speed up the dividend tax re- come tax along the lines of what Mr. lief. It would make it take effect ear- Mr. BAUCUS. Madam President, I FORBES did a few years ago when he lier rather than later. Second, it would ask unanimous consent that the read- was running for the Republican nomi- simplify the mechanism that will be ing of the amendment be dispensed nation and made this type of reform a sending checks out to people who qual- with. major plank of his campaign. Ideally, ify for the child tax credit. So, there we would have a Democratic candidate The PRESIDING OFFICER. Without are two ways that this amendment will who says the current progressive sys- objection, it is so ordered. help provide more income relief, more tem, even though it is a mess, is what The amendment is as follows: quickly, to more Americans, than what

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00032 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6179 is contained in the bill. It is an im- My amendment will advance the ef- will not be eligible to receive the full provement upon the bill. fective date of the dividend provision $400. Millions of working families who First, with respect to speeding up the in the bill to January 1, 2003—this year. have incomes between $10,000 and dividend relief, the dividend proposal This means taxpayers will get relief for $20,000 will not get the full $400 check. in this bill is not effective until the dividends they receive this year. They will receive a partial check. year 2004. Many provisions of this bill I have my doubts whether the divi- Again, people are not getting what take effect in 2003, but the dividend dend tax relief has much stimulative they are promised. provisions of the bill do not take effect effect generally, but some will praise We are increasing the child tax credit in 2003; rather, a year later, in 2004. I the economic virtues of dividend tax from $600 to $1,000 to take effect in 2003 suspect it is to save revenue. There will relief. I ask, if there are virtues, why and telling people they get an addi- be no dollars injected into the econ- wait? Make the proposal effective for tional $400 in 2003 and many will not omy, as a consequence of the dividend 2003 at least to provide the possibility get it. We tell them that is the law, but proposal, in the year 2003. It will be that the economy will see some ben- they will not get it because their in- later, in 2004, and even then it is going efit. comes are in certain brackets. Those to take some time for Americans to The second provision in my amend- whose incomes are between $10,000 and change their tax returns to take advan- ment will get more dollars to families $20,000 will get less than the full $400 tage of this change. by simplifying the distribution of the and receive only partial checks, and As I stated earlier, we are here today increased child credit that we passed they will not know how much unless because the economy demands that we this year. The President has proposed the IRS tells them how much the fol- act quickly to help our anemic econ- accelerating the full $1,000 child credit lowing year. omy. Let’s see what we can do to help to 2003. It is currently $600. The Presi- That does not make sense. The fami- create more jobs. To rebuild the econ- dent has proposed accelerating that, lies who are most likely to spend the omy. To rebuild America. the full $1,000 to take effect this year, check, those who spend most of their In my State of Montana, we des- 2003. Instead of making taxpayers wait income, will not get the full amount. perately need jobs. Many of our high until next spring when they file their My amendment guarantees each and school and college graduates are leav- tax returns to get the credit, the Presi- every working family eligible for the ing Montana. Why? Because they can- dent has proposed sending the checks child credit would get the full $400 not find a job in the State. They go out this summer for the $400 increase check. This fulfills two of the goals of elsewhere. There is a better chance of in the credit. That is the same provi- the stimulus package, getting more finding a job in one of the larger cities. sion which is included in the Finance money out of the door immediately and But, even that is difficult. Lack of jobs Committee bill. I support the accelera- getting it to the people who will spend is a national problem, it is not just a tion of this credit for working families. it, lower income people. These two problem in Montana. I think over 2 It is the right thing to do. I think send- changes to the bill will inject an addi- million jobs have been lost in the last ing this increase out to taxpayers right tional $15 billion into the economy in couple of years because of an anemic away also makes good economic sense. 2003 and 2004, more than provided for in economy. We want to get moving Why wait? This gets money into the this bill. That makes sense. The addi- quickly. We want to get moving earlier people’s hands immediately so they can tional dollars in the next 2 years will than we otherwise would. We should spend it. This will spur consumption help create more jobs, help boost de- seek policies to help the economy grow and boost the economy, which is ex- mand, and help rebuild the economy. To pay for the modifications, my as soon as possible. actly what we should be doing in this amendment merely eliminates the in- I disagree with the current dividend bill. proposal for several reasons. One, it My concern, however, deals with the crease of the dividend exclusion from creates a three-tiered regime. It makes millions of families who will not re- 10 percent to 20 percent in the year the Tax Code even more complex. It ceive the full $400 check due to 2008. To repeat, in the bill, the 10 per- cent exclusion is increased to a 20-per- creates a three-tiered regime for in- refundability limits. I might remind cent exclusion, and does not take effect vestment income. Interest income our colleagues that a couple of years until 2008. I say that is too far off. Let’s would be fully taxed, as it is today. ago, when we sent out the so-called repeal the increase that is scheduled to Capital gains would be taxed at about $300 check for individuals and the $600 take effect in 2008 and take that $15 bil- half the rate of ordinary income, as it check for married couples, a lot of peo- lion and dedicate it to the working is today. But we now add a third com- ple did not get the $300; married cou- families. That will take effect in the plexity of taxation of investment in- ples did not get the $600. Why? Because early years, 2003 and 2004. We could come, and that is dividend income of the tax brackets the taxpayer hap- make the dividend proposal, therefore, which would fall to the new regime; pened to fall into when they did the effective now, not later. that is, the first $500 of dividend in- calculation to find out what portion of The current provisions in the bill come would be excluded from one’s in- the $300 an individual might receive. If provide that the dividend exclusion come tax, and then, beginning in later the taxpayer had a lower income, the does not take effect until 2004, not 2003. years, in 2004, the next 10 percent of taxpayer might not receive the full This amendment leaves in place the 10- dividend income would be excluded, $300. It was a mess. Some got the full percent exclusion that is still in place and then in the year 2008, 20 percent of $300, some did not. It was a mess. but takes effect a year earlier; that is, dividend income would be excluded. A Under current law, the credit is par- 10 percent above the $500 goes in. We new layer, a new complexity, certainly tially funded. Families can take part of are simply saying that the exclusion in with respect to investment income. the credit if they pay payroll taxes but 2008 will still be 10 percent. That is so My point is, if we are going to in- do not have income tax liability. Not far off. Why schedule an increase that clude a dividend proposal in this bill, the whole credit, but part of it. The does not take effect until 5 years from why not make it take effect earlier? amount that a low-income family can now? Our economy needs the boost right get refunded is to increase in 2005. The I urge my colleagues to support this now, not when taxpayers file their re- President’s proposal did not accelerate amendment. Briefly, it moves money turns in 2005. The dividend provision the refundability of the credit. Fortu- upfront. It does not change the total takes effect in 2004 but, frankly, it does nately, during consideration of the bill, amount of the bill but moves it upfront not really take effect until 2005 when the Finance Committee adopted an a little more so there is more stimula- people file their tax returns. The divi- amendment offered by Senator LIN- tive effect in the short run. Thus, the dend proposal has no stimulative effect COLN. Her amendment was to accel- bill does what it is purported to do, in the year 2003. Most people do not erate the refundability of the credit. which is to create more jobs. even get the benefit in 2004. Most indi- This will allow many low-income fami- I yield the floor. vidual taxpayers will have to wait lies to see some benefit from the in- The PRESIDING OFFICER. The Sen- until they file their tax returns in 2005 creased tax credit. However, even with ator from Iowa. to reap the benefit of a dividend exclu- the inclusion of the refundability Mr. GRASSLEY. I yield myself such sion in the bill. amendment, many low-income families time as I might consume.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00033 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6180 CONGRESSIONAL RECORD — SENATE May 14, 2003 I find it necessary to explain what Finally, I note this amendment vio- bate, we will have what is called a our legislation does because a lot of lates section 202, page 35 of the Budget Democratic alternative, which will times there are explanations about it Act, so I will be raising a point of order provide what I consider to be a very that are not very accurate. One of the later on. compelling amendment that will result impressions is our bill is not very well I yield the floor. in stimulating the economy and really balanced. Our bill does, in fact, at- The PRESIDING OFFICER. Who provide additional jobs. tempt to strike a good balance between yields time? It will be fairly balanced in helping consumption on one hand and invest- Mr. GRASSLEY. Madam President, I hard-working Americans. It will assist ment on the other hand. We do this to suggest the absence of a quorum. small businesses with accelerated de- provide incentives such that we can The PRESIDING OFFICER. The preciation and will also provide assist- provide both short-term economic clerk will call the roll. ance to the States so they can use stimulus and the building blocks for The legislative clerk proceeded to funds to provide for the No Child Left meaningful future economic growth. call the roll. Behind legislation, and perhaps offset The refundable tax credit outlined in Mr. KENNEDY. Madam President, I some of the anticipated cuts in Med- the amendment before the Senate, ask unanimous consent that the order icaid and also deal with some of the which I oppose, would be paid irrespec- for the quorum call be rescinded. other State priorities. tive of whether a person had any in- The PRESIDING OFFICER. Without One of the most important aspects of come tax liability at all. If the person objection, it is so ordered. economic recovery that this underlying owes no tax, we are to view this pro- Who yields time? proposal that has come out of the Fi- posal as effectively refunding payroll Mr. KENNEDY. Madam President, I nance Committee is missing is a provi- taxes. But we already have a provision yield myself an hour on the bill. sion to deal with the millions of Ameri- that refunds payroll taxes. It is called The PRESIDING OFFICER. Is there cans who are currently unemployed as the earned-income credit and the child objection? a result of economic policy. We have tax credit. This proposal, the Baucus Mr. GRASSLEY. Would the Senator seen at other times in our country amendment, a refundable tax credit from Massachusetts yield? I do not in- when we have taken action here in the proposal, would be duplicative of the tend to object, but we have always Senate, going back to the early 1960s. earned-income tax credit and the re- been promised copies of amendments. I We had economic stimulus programs fundable child tax credit to refund pay- assume the Senator is going to offer an and we had the longest period of eco- nomic growth and price stability, in roll taxes for those with insufficient in- amendment. the early period of the 1960s, that we come to have tax liability with the re- AMENDMENT NO. 544 had had up to that time in this cen- sult of encouraging people to work as (Purpose: To provide for additional weeks of tury. opposed to receiving welfare or unem- temporary extended unemployment com- pensation, to provide for a program of tem- Then, in 1993, we also took action ployment compensation. here on the floor Senate and we have In my estimation, such refundable porary enhanced regular unemployment had the longest period of economic credits do not provide incentives to compensation, and for other purposes) Mr. KENNEDY. I intend to do that growth, again with price stability, and work. They do not create jobs, and the creation of some 22 million addi- they do not stimulate the economy. right at this very moment. I have sent an amendment to the desk, and I ask tional jobs. Providing incentives to work, cre- We on our side are strongly com- for its immediate consideration. It is ating actual jobs, and stimulating the mitted to taking steps that are going amendment No. 544. economy are the purposes of the legis- to revive our economy, stimulate the The PRESIDING OFFICER. The lation from the Senate Finance Com- economy. We will have an opportunity Chair informs the Senator, it requires mittee that I presented. to debate that later in the afternoon. Job creation is a handup, not a hand- unanimous consent to set aside the This amendment is targeted on those out. It is a handup to help people out of pending amendment. Americans who have lost their jobs poverty. Refundable tax credits are Mr. GRASSLEY. I ask Senator KEN- through no fault of their own but be- handouts which may have just the op- NEDY, would he speak without our con- cause our economy is in stagnation. At posite effect. We should ensure that we senting to the hour so we could look at other times in American history, we are providing building blocks for long- the amendment for a while? have responded to the needs of these term growth and the economic sta- Mr. KENNEDY. I am prepared to ac- families. These are hard-working bility that comes from that growth. commodate the chairman of the Fi- American families who have played by I appreciate Senator BAUCUS’s sup- nance Committee. We had a general the rules, have paid into the unemploy- port for our dividend proposal and his concept of an hour. I will not person- ment compensation fund, and now are desire to accelerate into this year. ally take an hour. We have 25 cospon- entitled to benefit from it. However, acceleration means we sub- sors. Without this amendment, starting at ject more dividends to double taxation The PRESIDING OFFICER. Without the end of May there are going to be because the exclusion never reaches 20 objection, the Senator may proceed to 80,000 workers a week who will lose percent. In other words, ours goes from debate. their unemployment compensation. 10 percent through the year 2007; 2008 Mr. KENNEDY. I thank the Chair. I This is an emergency, and it is a mat- to 2013, it is 20 percent, whereas his was asking them what time they need, ter which I hope we will address and proposal always stays at 10 percent. and I will let the chairman know in will have the strong support of Repub- People invest in stock for long-term just a very few minutes who intends to licans and Democrats alike. gain. We need to provide long-term tax come over here and exactly how much Effectively, this amendment extends relief. This bill contains a lot of short- time we need. the temporary unemployment com- term stimulus already. I intend to speak about 20 minutes. pensation program through November. I appreciate the points he has raised Mr. GRASSLEY. I thank the Sen- The program is currently scheduled to regarding the child credit. The largest ator. prohibit any new enrollees after May item in this bill is the child credit, and Mr. KENNEDY. Madam President, 31, leaving 80,000 workers a week to run that amounts to over $95 billion. It in- this amendment is of enormous impor- out of their benefits. It provides 26 cludes a simplification of definition tance to the matter we are debating in weeks to all eligible workers, with an that Senator BAUCUS has already men- the Senate, which is basically legisla- additional 7 weeks available to the tioned. In addition, I note we expand tion that is targeted on strengthening States with the highest unemploy- the refundable portion of the child and improving our economy. ment. That would be some six States as credit that targets help to the low-in- We all know when the Senate of the of today. It provides an additional 13 come families he seeks to assist with United States has acted in the past to weeks to unemployed workers who his amendment. strengthen and improve our economy, have exhausted their initial 13 weeks of I appreciate his position. I believe on a number of very important occa- extended benefits prior to the enact- our bill provides proper balance in en- sions we have had a very positive im- ment, and it does provide help and as- couraging the economy. pact. Later in the discussion and de- sistance to low-wage workers.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00034 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6181 It provides temporary funding for trigger for extended benefits. But we moved to less expensive housing or States to implement alternative base know that we have now 2.5 million moved in with their friends or their periods. What we mean is, in a number fewer jobs than we had some 2 years families. of instances workers should be entitled ago. Look at this. We had 2.8 million These are the figures about the im- to unemployment compensation. But if additional unemployed over the period pact on the family because of unem- they seek part-time work, they lose all of these last 2 years; 6 million unem- ployment. We are talking about Ameri- eligibility for unemployment com- ployed in January of 2001; and we have cans who have worked, want to work, pensation in almost every state. Yet 8.8 million as of April this year. and are being laid off because of eco- they want to go back to work to pro- We have seen over this period of time nomic conditions. They have collected vide for their families, and all this does the fact that the total number of pri- unemployment compensation for a pe- is permit the States to make these ad- vate sector jobs has decreased by 2.7 riod of time, which is about a third of justments so they can go back to work, million—2.7 million jobs lost. We had their pay. Now they are in danger of maybe part-time, and not lose their un- 111.7 million in January 2001, and 109 losing that at the rate of 80,000 Ameri- employment compensation. The million now. cans per week at the end of this month. amendment also provides some tech- We are seeing a significant increase It is interesting that we now have nical provisions to add just for the rail- in the total number of the unemployed, 18,000 American servicemen who have road workers to permit greater parity. and we have also seen a reduction in returned from Iraq and are now on the Historically, unemployment insur- the total number of jobs that are out unemployment line. Now they are re- ance has been a bipartisan issue. In the there. These are hard-working Ameri- ceiving unemployment compensation recessions of the late 1950s, President cans. We are trying to get the economy because the jobs were not there when Eisenhower proposed a temporary pro- into an expansion. But at this par- they came back. That number is grow- gram of extended unemployment as- ticular time they are hurting. That is ing every single week because their sistance. In the recession of the early why we need to have an extension of jobs have effectively been eliminated. 1970s, President Nixon signed into law the unemployment compensation. The unemployment impact on the two extensions of unemployment com- Let me mention who these people are family is that more than 3 in 4—77 per- pensation. In the mid-1970s, President and what the state of our economy is cent—of the unemployed Americans Ford proposed a temporary Federal ex- at the present time. say the level of stress in their family All Americans understand the econ- tension of benefits. In the early 1980s, has increased. Two-thirds—65 percent— omy has been deteriorating for more President Reagan signed into law four of those with children have cut back in than 2 years. President Bush claims unemployment extensions. And in the spending for all of their children; 26 the tax cut for the rich will create jobs. early 1990s, President Bush, after twice percent say another family member We tried that his way in 2001. We lost vetoing unemployment extensions, ul- has to start a job or increase the work 2.5 million jobs. Alan Greenspan and timately saw the importance of this hours; and 23 percent have had to inter- Warren Buffett and the Nation’s lead- policy and signed into law three exten- rupt their education or that of a family ing economists, including 10 Nobel lau- sions. Each of these 1990 extensions, member—one-quarter of all the unem- reates, all agree that the President’s some for 26 weeks of benefits, received ployed now. That is happening in plan is the wrong prescription for the overwhelming bipartisan support. America. We have an opportunity to do sick economy. Average Americans are In November of 1991, we passed an ex- something about it with this bill by hurting. It is time for a change. We tension by a vote of 91 to 2. In Feb- just deferring the upper tax rates—not need an economic plan that helps our ruary of 1992, we passed, by a vote of 94 cancelling them out but deferring fellow citizens and which creates new to 2, a bill to provide 26 weeks of bene- those. Now we have the financial hard- jobs. Yet, there is not a penny in this fits to most States, 33 weeks in high ship on the unemployed. More than bill to provide the unemployment com- unemployment States. Many of the one-half of the unemployed adults have pensation for the Americans laid off Senators currently in this body voted had to postpone medical treatment—57 prior to the time the new jobs are cre- for that extension, which today they percent—or cut back on spending for ated. Unemployment benefits expire in are calling unprecedented. We have food—56 percent. One in four—26 per- just 2 weeks for many of these workers. seen, over the years, Republicans and cent—had to move to other housing or This amendment is cosponsored by 13 Democrats alike have supported this move in with their friends or relatives. of my colleagues. I ask unanimous con- legislation. Thirty-eight percent have lost their In July of 1992, the vote was 93 to 3; sent that they be listed as cosponsors telephone service. These are hard- in November of 1993, 79 to 20; and in the on this amendment. working Americans who have lost their last 2 years we have had a number of The PRESIDING OFFICER. Without telephone service. bipartisan votes. The Temporary Fed- objection, it is so ordered. Without this amendment, 80,000 per eral Unemployment Benefit Program Mr. KENNEDY. Madam President, week will lose all kinds of help and as- passed, 85 to 9, in March of 2002. This is this amendment provides for allocating sistance from unemployment com- not a partisan issue. Layoffs do not dis- $12.7 billion from the acceleration of pensation. criminate by party. This is a matter of the upper tax bracket reduction. This fairness. effectively does not change the law. This is what is happening to them al- I urge our colleagues to put aside The President’s 2003 bill asks for an ac- ready. partisanship and to support this par- celeration of the reduction of the tax Thirty-eight percent have lost their ticular proposal. brackets for 2001 and 2002, and this de- telephone service. Twenty-two percent There are those who raise these kinds fers that. In fact, it collects some $35 are worried about losing their phone of questions in opposition to this pro- billion. We use $12.7 billion of that to service. More than a third have had gram. They say people want handouts. pay for this extension. trouble paying gas or electric bills. They do not want handouts. They want Our workers take pride in doing a That is just the beginning. If you jobs. People want jobs, but there are good job and providing for their fami- look at the number of workers who not any jobs in the economy. There is lies, putting their children through have lost their health insurance, one- only one job available for every three school, and saving for a secure retire- half of them have already lost their unemployed workers. The Democrats ment. But for millions of Americans health insurance when they were laid have a plan to create the jobs. But that dream is gone. Years of saving and off, and the others who have been able today we have to help the millions of sacrifice have disappeared with a single to retain their health insurance are in people without jobs because of the bad pink slip. Instead of looking to a bright danger of losing that. One-third of the economy. They need help paying the future, now they must look in their unemployed covered by health insur- mortgage and putting food on the children’s eyes, and say, I am sorry; ance have lost their benefits as a result table. you can’t go to college; you can’t buy of just being unemployed. The rest of Some say the unemployment rate new shoes. We can no longer afford to them are going to lose that when they isn’t high by historic standards, and stay in this house. In fact, since losing lose their unemployment compensa- only a few States have reached the their jobs, one in every four have tion.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00035 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6182 CONGRESSIONAL RECORD — SENATE May 14, 2003 In fact, since losing their jobs, one in eral benefits but still could not find ers. We cannot deny them the kind of every four have moved into less expen- work were not left out in the cold. hand they need and they have been sive housing or moved in with friends Today, one in five unemployed workers working with over the course of their or families, more than a third can’t has been out of work for more than 6 working lives. We should accept this pay their electric and gas bills, and months. In January, we left out 1 mil- amendment. more than one-half cut back on their lion of these long-term unemployed The PRESIDING OFFICER. The food. without jobs and without any safety Democratic whip. One-half million men and women net. Today, there are 100,000 more. Our Mr. REID. Madam President, I have have joined the unemployment lines in amendment provides 13 more weeks of cleared this with the distinguished the past 3 months. That is 500,000 fel- benefits for these long-suffering Ameri- chairman of the committee. I ask low Americans who have joined the un- cans. unanimous consent that the pending employment lines in the last 3 months. Clearly, we owe it to all Americans amendments be temporarily set aside No end is in sight. who have lost their jobs in this econ- so the Senator from Massachusetts In Massachusetts, the jobless rate omy to provide help while they look for may offer his amendment. has jumped to a 9-year high—5.7 per- new jobs. They paid into the unemploy- Will the Senator from Massachusetts cent. Nationally the unemployment ment compensation. They have to be call up his amendment? rate has reached 6 percent, with 9 mil- out looking for jobs or they do not Mr. KENNEDY. Madam President, I lion Americans out of work and 2 mil- qualify, and they are doing that, and call up my amendment. lion of those out of work for more than still they are going to be left high and The PRESIDING OFFICER. Is there 6 months. dry without this amendment. objection? These Americans are not the first The actions in recent months to ex- Without objection, it is so ordered. priority—they are not even a priority— tend the benefits have left out too The clerk will report. in this administration’s tax reduction many workers, particularly compared The bill clerk read as follows: program because there is not a nickel to America’s response in the past. In The Senator from Massachusetts [Mr. KEN- in extended unemployment compensa- 1975, 75 percent of unemployed workers NEDY] for himself, Mr. DASCHLE, Mr. BINGA- tion for any of these workers who have were eligible for unemployment bene- MAN, Mr. DURBIN, Mr. REED, Mrs. CLINTON, lost out. fits, compared to only half of such Ms. CANTWELL, Mr. SARBANES, Mr. LEVIN, In fact, in this economy with no jobs, workers last year. And that is because Mrs. MURRAY, Mr. ROCKEFELLER, Mr. KERRY, they have learned a lot about being unemployment insurance has not been Mr. BAUCUS, Mr. SCHUMER, and Mr. DODD, second-class citizens with second mort- updated to meet the changing times; proposes an amendment numbered 544. gages and secondhand clothes to make and that is because our good friends on Mr. REID. Madam President, I ask ends meet. Our first priority on the the other side have changed the terms unanimous consent reading of the economy is to get these working Amer- of who was going to be eligible. Isn’t amendment be dispensed with. icans back to work—not just to reward that amazing. You are only going to The PRESIDING OFFICER. Without the wealthy. A major part of that ef- find half of all unemployed workers objection, it is so ordered. fort must be help for the unemployed. who are eligible, even though they are (The amendment is printed in today’s The current Federal unemployment certainly similar in terms of their RECORD under ‘‘Text of Amendments.’’) benefit program runs out at the end of working and contributing. Many of the Mr. REID. Madam President, I ask this month. With a continued troubled unemployed who fail to receive bene- unanimous consent that the time used economy, this extension cannot be fits are part-time and low-wage work- by the distinguished Senator from Mas- business as usual. Our amendment ex- ers. Part-time and low-wage workers sachusetts be charged against the time tends the current program for 6 pay into the system, and they should on this amendment. months, but it also helps the 1.1 mil- be able to rely on it while searching for The PRESIDING OFFICER. Without lion Americans who are long-term un- new jobs. Our amendment offers the objection, it is so ordered. employed and the hundreds of thou- States the option—does not require it; Mr. REID. Madam President, how sands who are part-time and low-wage it offers the States the option—to re- much time does that leave on this workers who would otherwise get no quest Federal assistance to provide amendment on the side of the minor- help. benefits for these workers. ity? Our amendment provides 26 weeks of Out-of-work Americans have worked benefits to out-of-work Americans, just The PRESIDING OFFICER. Thirty- hard all their lives. They have paid six minutes. as we provided during the last reces- into the unemployment insurance fund, Mr. REID. So the Senators from sion in the bipartisan bills signed by which has $21 billion. We cannot now Washington and Rhode Island will have the first President Bush. say to these citizens: Now that you are 36 minutes, or whatever time they Nearly 1 million more private sector out of work, struggling to pay your need. jobs have been lost during this reces- bills, we will not let you collect on I ask Senator KENNEDY, will you sion than over the same period of the your insurance policy. early 1990s recession. The impact in the I urge my colleagues to vote for this yield time to the Senator from Rhode 1990s, in terms of workers being able to amendment which will provide a life- Island? find jobs, was not nearly as bad as it is line to those hurt the most by the pro- Mr. KENNEDY. I yield such time as currently, and yet we did twice as tracted economic downturn. The exten- he may use. much for them. sion runs out in just 2 weeks. We can- The PRESIDING OFFICER. The Sen- It is inconceivable why we are not not wait. Congress must act now to ator from Rhode Island. willing to take the steps to help our provide the assistance out-of-work Mr. REED. Madam President, I rise fellow Americans when they have al- Americans deserve. in strong support of the Kennedy ready paid into the fund. These work- We may have some difference on the amendment. I am amazed that at a ers have contributed to the fund. The floor of the Senate about who has the time when there are over 1.1 million fund is in surplus today. All we are best economic stimulus program. And workers who have exhausted all their asking is, let’s use that fund that is in we do have significant differences—sig- unemployment benefits—who are look- surplus today to assist them during nificant differences—but we ought to ing for work, who are not finding this period of transition. This should be able to agree, whether you support work—at a time when our fund to pay be a no-brainer. This ought to be em- the Republican or the Democratic pro- for these benefits is in surplus by bil- braced overwhelmingly. gram, that we are not going to hold un- lions of dollars, we are not extending Where are the votes that we received employed workers hostage until it this program. in the early 1990s—by 90 votes—with bi- kicks in and provides job opportunities This is perhaps the last chance we partisanship. And still we have the re- for workers. We ought to all be able to will have. The program expires in just luctance by our friends on the other agree to that. We have done that in a a few days. Yet we are here on the floor side to support this program. bipartisan way historically. of the Senate talking about many In the last recession, we also made The trust fund is in surplus. People other things: tax benefits for affluent sure that workers who ran out of Fed- are hurting. They are our fellow work- Americans who are doing quite well.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00036 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6183 But we are not responding to the de- months and are erased within 2 years. pensation fund. We have to do some- mands, the needs of countless numbers The persistent job losses in this reces- thing and we have to do it now. of our fellow citizens. I am just amazed sion are at the 25-month mark—25 Alan Greenspan, in January of 2002, this would happen. months, not 15 months—and as a re- dispelled this whole myth that the ad- This UI, temporary Federal unem- sult, in that dimension, this is the ministration is trying to foster that ployment insurance program, will ex- worst recession, most severe recession this program is not any good, it is not pire at the end of May. What is hap- since the 1930s in terms of the duration worthwhile; they are just sitting pening in our economy today is that of long-term unemployment. around; it discourages people from people are desperately looking for jobs, The latest employment report paints finding jobs. but the economy is changing. As I go a bleak labor market picture for the fu- He said: about Rhode Island, I do not find lots ture. [C]learly, you cannot argue that somebody of people who say: Well, I don’t want to There are 8.8 million unemployed who runs past the 26-week level is slow for take a job because these benefits are so Americans, but we only count on our not looking for a job or not actively seeking good. These benefits are a fraction of unemployment rolls those Americans to get re-employed. There are just no jobs what these people were making when who are actively seeking employment. out there. they were working. They are hardly There are millions more who are un- This is January 2002. The situation is sufficient to pay the mortgage, to pay able or so frustrated by the lack of jobs worse today. for their children’s needs, to pay for all that they are not actively seeking—4.4 And consequently, to adhere to the 26-week the items they have to buy each and million Americans. They want a job. limit doesn’t serve its actual purpose, which every day. There is no real prospect, and as a re- is essentially to prevent a misuse of the un- What has happened in the economy, sult they are not even counted. employment insurance system. So I’ve al- in our case in Rhode Island, is we used Then add to that the number of ways been in favor of extending benefits when the job market itself begins to dry up. to be a manufacturing center where Americans—4.8 million—who work part there were 20 or 30 or 40 different man- time. They want to work full time but Frankly, this is the Sahara of the job ufacturing plants all requiring foremen they work part time because there are market that we see today. It is very and supervisors and vice presidents for no full-time jobs. dried up. human resources. Those factories have Then throughout these numbers, That was January 2002. It is worse been closing. Work has been going there is this persistent overhanging today. Yet we are not responding overseas. population of long-term unemployed today. Since January 2002, we have lost In many cases, it is not a question of Americans, about 1.9 million jobless for over three-quarters of a million more losing a job nowadays; it is a question more than 26 weeks, about 20 percent of jobs. There is no economic argument of the company going away, leaving the total unemployed. This is a number against this amendment. In fact, all of the small towns of Rhode Island and that is not going down; it is persistent. the economic arguments, all the argu- southern New England and the small These are the individuals who need our ments on fairness, all the arguments towns of North Carolina and South help, and we should help. We must about letting people get access to the Carolina, leaving people highly skilled help. Yet the bill that comes before us benefits before they find work again but with no place to work. today, the bill that is supposed to stim- argue strenuously for this amendment. These are the true victims of this ulate the economy, ignores all of these I urge my colleagues to support the current economic malaise and reces- millions of Americans. Frankly, I can’t Kennedy amendment. sion. And we are not responding by think of a more efficient way to stimu- I yield back whatever time I have to simply giving them some more time, late the economy than to continue ex- the Senator from Massachusetts. giving them resources to pay the debts tended unemployment benefits. It puts The PRESIDING OFFICER. Who that pile up every day in every family money in the hands of working fami- yields time? in this country? I think it is just ap- lies. That money is not going to be Mr. KENNEDY. I yield 7 minutes to palling. hoarded. That money will not be spent the Senator from Washington. Madam President, 1.1 million work- on impressionist art. That money is Ms. CANTWELL. Madam President, I ers have exhausted their benefits and going to be spent immediately at rise today in support of the Kennedy have not found work. That is the cur- Kmart and Target and Wal-Mart. amendment, and I hope my colleagues rent situation. We have to help them. So this is not just about fairness. will see that the essence of this amend- The unemployment rate today is 6 per- This is about getting the economy ment is about setting priorities in cent. That rate is higher than when moving again, at least in a very direct America. this temporary program was initiated way. I believe we have to do this. We Yes, we are discussing a tax bill that in March of 2002. It is higher today have to do it now. The time literally is could end up including $350 billion in than when the program was extended running out. As Senator KENNEDY tax cuts directed at the most wealthy in January 2003. Yet we are not extend- pointed out, even today’s program is people in America. While we are doing ing the program. The situation is less generous than programs in the that, we are doing it in the face of the worse, but our response is not appro- past. Indeed, the fund has over $20 bil- fact that millions of Americans are un- priate to that situation. lion of assets that were contributed by employed and that their unemploy- Over the last 3 months, 540,000 pri- these people when they worked. They ment benefits are running out. vate sector jobs have been lost and the paid into these funds. Now they are So what are we saying by setting this economy has lost, since the beginning simply asking in their time of need to priority, setting a bill in motion out of of the recession, a total of 2.7 million be supported, to be helped. It is not fair the Senate that some Members believe private sector jobs. This is not a ques- to ignore them. is going to help stimulate the econ- tion of jobs being there and workers There is no good economic argument omy, that it will really start us on the being unwilling to take those jobs. to say we should not do this. First, it right track? And instead of paying at- As a result, we only have one re- is stimulative. It puts money directly tention to the very people who have course—frankly, they only have one re- in the hands of Americans who will helped build this economy, those in the course: They must have these benefits. spend it. That is the best stimulation aviation sector who lost their jobs be- And we must provide these benefits. we can find. Second, the notion that cause of the downturn in aviation after Private payrolls are 2.4 percent below these people are just sitting around be- 9/11, those who lost their jobs because their level in March 2001 at the begin- cause they don’t want to work is pre- of corporate manipulation in the en- ning of this recession. The job losses in posterous. These people, many of them ergy crisis, who lost their jobs because this recession now exceed those in the our contemporaries, in their forties of those market schemes and manipu- recession of 1990. and fifties, would love to work simply lations, and those people who are sim- One other very compelling point is, for the sake of working but, more im- ply just out of a job because of 9/11 and on average, if you look at the reces- portantly, because their expenses far the economy has not returned, we are sions in this century, at least, job exceed whatever payment they will re- saying, we don’t have a plan to help losses tend to bottom out after 15 ceive from this unemployment com- you. Instead, we want to propose one of

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00037 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6184 CONGRESSIONAL RECORD — SENATE May 14, 2003 the biggest tax cuts in history hoping We will look for other opportunities two decades now. I don’t recall another that somehow this will trickle down to to make sure the training programs time when we had a downturn in the help you. and the educational opportunities are economy, where we had as many as 2 The point is, when in our history as there to retool the workforce for the million jobs lost in the last 27 months, a country have we proposed a dividend jobs of the future. where 80,000 workers a week are losing tax cut as a way to stimulate the econ- One of the amendments we were suc- their benefits. I don’t recall under any omy? Yet we have had two of the last cessful in getting on the budget bill administration—I have served here administrations, a Democrat and Re- earlier in setting our priorities was to under Republican administrations and publican administration, which said say that we should not cut the job Democratic administrations, and I one of the best things we can do during training programs. We still have people have served when this Chamber was times of high unemployment is to in Washington State who are willing to controlled by Democrats and also make sure we extend unemployment hire this workforce that has been laid under Republicans, and in the House benefits. Why is that? Well, it is quite off, but they want them to be retooled. also with both Democrats and Repub- simple. For every dollar spent on un- They want them to gain expertise. licans; I know of no other time in the employment, it generates $2.15 of stim- What better time to do that than now, more than two decades I have been ulus. This is a proven economic plan. as they are working through their un- here where in a moment like this we For my State in Washington, where employment, to offer to give them would not provide an extension of un- over 100,000 people would be impacted training benefits, make sure they are employment benefits. by this amendment and would qualify, retooled for the economy of the fu- It is truly shocking to see a piece of we are talking about real numbers. We ture—whether it is in nanosciences, in legislation designed to offer relief to are talking about millions of dollars to biotechnology, in new aviation con- people, allegedly, through the tax cuts our economy over the next several struction, in new IT fields, or in nurs- the President is suggesting, with no as- months that can help pay mortgage ing where we have over 130,000 openings sistance to the unemployed. We lit- payments, health care costs, and as for nurses in this country, and the peo- erally have thousands of people who Senator KENNEDY said, keep the lights ple who want to have those jobs. In- are facing difficult times, whose ability on at home in a region of our country to take care of their families, and to that has seen some of the highest en- stead, we are allowing outside people to come in and take them because we make ends meet have been hindered. ergy rates in a long time. We are talking about putting people What we are doing in this amend- are not willing to take care of Amer- ican workers. This is not a priority. We back to work and getting them jobs. ment Senator KENNEDY is proposing is We are talking about 80,000 people a putting forth an idea of how to help are simply saying instead of giving the largest tax cut in history, and passing week running out of benefits. And yet stimulate the economy that has been we find no space in the legislation to tested and proven successful by two ad- this out of the Senate, knowing that thousands of workers are going to lose provide assistance to them. I am really ministrations, both Republican and stunned in many ways that this is not Democrat. Instead, we are saying we their benefits in 3 weeks, we believe we should give them that helping hand. part of this effort. are not going to include this in this I can only hope our colleagues, re- Make no mistake. Nobody in America package. gardless of political party, will endorse wants an unemployment check. They I must remind my colleagues that we the Kennedy amendment as part of this would rather have a paycheck. But came to this brink in December of last package. The administration says they until we can guarantee to these people year. While some of us might think we are still deciding whether an extension that we are going to get them that rectified it when we came in in Janu- of unemployment insurance is nec- paycheck, we better extend that oppor- ary, there were people in my State, as essary. What do they need to know? tunity, from a trust fund that they those unemployment benefits were cur- Well, 80,000 people a week are losing have paid into, the things that they tailed in December, who did lose their their benefits. They are hard-working and their employers have paid into, the health care benefits. They did lose the Americans trying to hold together fam- opportunity to sustain them and ben- ability to take care of the health care ilies, pay mortgages, pay car pay- efit our economy. needs of their families. I am sure there ments, keep their kids in school. What The PRESIDING OFFICER. The Sen- were people who probably even lost do we need to know when 80,000 people ator has used 7 minutes. their homes because of that time pe- a week are losing their benefits? Why Ms. CANTWELL. I yield the floor. riod, because of the uncertainty, be- can we not provide, in this legislation, The PRESIDING OFFICER (Mr. COR- cause of our lack of commitment for which involves billions of dollars, some these unemployed workers. So here we NYN). Who yields time? Mr. KENNEDY. Mr. President, how relief for these people? are at the same point again, 2, 3 weeks Our unemployment insurance amend- away from having this unemployment much time do I have? The PRESIDING OFFICER. The Sen- ment would protect the unemployment benefit extension evaporate on May 31 insurance safety net for 4 million out- and no commitment, no commitment ator has 18 minutes 7 seconds. Mr. KENNEDY. I will yield 4 minutes of-work Americans. So I sincerely hope to say we will extend unemployment the managers of this bill, and others, benefits, again at a time when we have to the Senator from Montana, 10 min- utes to the Senator from Connecticut, would see fit to provide some space had administration after administra- here. In my State alone, 58,000 people tion say, in times of tough economic and 4 minutes to the Senator from who are out of work would be helped by situations and no job growth, the best Iowa, Mr. HARKIN. the Kennedy amendment; in California, thing we can do is keep the stimulus Mr. BAUCUS. I see Senator DODD ready to speak. I suggest that he 562,000; in Florida, 161,000. going by making sure there is unem- I ask unanimous consent that a State speak, and I will speak after him. ployment. by State list, totaling the 4 million So where are we? Well, as we know, The PRESIDING OFFICER. The Sen- people who would be benefitted by this the impact over the last 2 years, the ator from Connecticut is recognized. amendment be printed in the RECORD private sector has lost more than 2 mil- Mr. DODD. Madam President, I thank my colleague from Massachu- at this time. lion jobs. Unemployment has jumped There being no objection, the mate- by 50 percent. As a State that has 7- setts for yielding me some time. I have rial was ordered to be printed in the percent unemployment now and as a just a few observations. RECORD, as follows: region, the Pacific Northwest, with Or- First of all, on the amendment being egon, Washington and Alaska, that has offered by our colleague from Massa- FOUR MILLION AMERICANS WILL BENEFIT FROM THE the highest unemployment in the coun- chusetts, it has been said by others, by ECONOMIC SECURITY AMENDMENT try, this is no simple matter. This is my colleague from Washington, and my about priorities. This is about whether colleague from Rhode Island, and cer- Number of out of work Americans we are going to take care of the work- tainly the Senator from Massachu- State who would be ing families who have helped build this setts, as well, that this is difficult for helped by the Ken- economy and sustain them until job many of us to understand. I have nedy amendment opportunities increase again. served in this Chamber for more than Alabama ...... 43,800

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00038 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6185 FOUR MILLION AMERICANS WILL BENEFIT FROM THE dle-income families. Nothing could be periods in our recent past when that ECONOMIC SECURITY AMENDMENT—Continued more devastating to a family than to has happened. We are going to see it discover that they cannot afford to again, in my view, if this proposal is Number of out of work Americans send their son or daughter to college, adopted as presented. State who would be regardless of their child’s talent, deter- Two years ago when we were debat- helped by the Ken- nedy amendment mination, or ambition. Or others who ing the tax cuts of 2001, we were told want to continue learning throughout we could expect almost $6 trillion in Alaska ...... 17,500 Arizona ...... 44,700 their lifetime of learning, but cannot, surpluses over the next decade. In- Arkansas ...... 33,300 because instead of helping them, we de- stead, we are now getting record high California ...... 562,900 Colorado ...... 56,300 cide to provide a tax cut that primarily deficits. Two years ago we were told Connecticut ...... 58,500 benefits the wealthiest among us. For that if we enacted the President’s tax Delaware ...... 9,300 DC ...... 9,700 us to say to middle-income families cut plan, we would virtually pay off the Florida ...... 161,900 that your opportunity to send a child publicly held debt by 2008. We are head- Georgia ...... 100,800 Hawaii ...... 8,100 to college is going to have to take a ed in exactly the opposite direction. Idaho ...... 16,100 back seat to providing a tax break to How many more signals do we need Illinois ...... 187,000 Indiana ...... 71,000 the top 1 or 2 percent of income earners to get this Chamber to understand that Iowa ...... 29,100 is something I don’t think we ought to as we are digging this hole deeper and Kansas ...... 30,100 Kentucky ...... 38,500 do. deeper, we need to pull out of the hole. Louisiana ...... 33,000 So I am going to try, with this Instead, we are just as determined to Maine ...... 10,600 Maryland ...... 44,700 amendment, to focus our attention on dig that hole deeper to the point where Massachusetts ...... 140,700 higher education. Of course, last week, we will be spending years trying to re- Michigan ...... 154,200 Minnesota ...... 58,700 we discovered the Government has re- cover from this mistake. Mississippi ...... 28,500 ported that the unemployment rate After this Chamber passes part of the Missouri ...... 67,400 Montana ...... 8,000 jumped to 6 percent. There are econo- President’s so-called growth plan, and Nebraska ...... 16,900 mists in the country who believe the after we vote to increase the debt by Nevada ...... 26,300 New Hampshire ...... 7,300 unemployment rate, by the first quar- almost $1 trillion, how many more tril- New Jersey ...... 190,300 ter of next year, will hover near 8 per- lions of dollars are we going to have to New Mexico ...... 13,300 New York ...... 332,300 cent. It is beginning to become clear to increase the debt limit to in order to North Carolina ...... 128,100 make room for this irresponsible tax North Dakota ...... 4,600 this Senator that this possibility, as Ohio ...... 116,700 farfetched as it may have seemed a few cut affecting such a small percentage Oklahoma ...... 26,900 Oregon ...... 77,400 months ago, is not so farfetched at all of taxpayers? Pennsylvania ...... 258,500 if we don’t do something to stem the Let’s consider what breaks people Rhode Island ...... 15,800 South Carolina ...... 52,700 tide here. get. Again, I do not have to present all South Dakota ...... 1,800 Nothing in this legislation is de- of the charts here, but so people under- Tennessee ...... 69,100 Texas ...... 242,100 signed to do that. Now we are going to stand what I am talking about, accord- Utah ...... 23,200 have, according to the Congressional ing to the Urban Institute Tax Policy Vermont ...... 6,300 Virginia ...... 62,500 Budget Office, the largest single deficit Center, those who have incomes above Washington ...... 102,000 ever accumulated in the history of the $1 million will receive, on average, a West Virginia ...... 13,600 Wisconsin ...... 69,100 United States of America. What a tax cut of $64,400. For those in the mid- Wyoming ...... 4,600 record that is. This is, of course, just 27 dle-income spectrum, their tax cut will 1 Total ...... 3,886,100 months after we came off of a period of be $233. That is what we are about to 1 Including the part-time and low-wage workers, the total is 4.4 million. economic growth, of accumulating sur- adopt at a time when we are driving We do not have state-by-state break-downs for those workers. pluses, and putting our country on the deficit hole even deeper; and at a Mr. DODD. Madam President, I really sound fiscal footing. Yet in 27 short time when we are denying an extension cannot believe that at this moment in months, we have gone from surpluses of unemployment benefits to the 80,000 our history we would pass a bill that to the record high deficits ever accu- people a week who have and will be ex- would not provide help to the many, mulated in this country’s history. That hausting their benefits. many Americans who need it. Let me is an incredibly stunning record, not to It seems to me that we are headed in also say, because I know we are under mention the more than 2 million jobs the wrong direction on both fronts. The time constraints—and I am probably that have been lost. Kennedy amendment would extend un- not going to have a chance to have any In the midst of this massive tax employment benefits. The very least extended time for discussion of this break which will go mostly to the few we ought to do in this Chamber is to later—that I will speak briefly on an elite in the country, we are also going say to hard-working people: When you amendment that I have filed and in- to be raising the national debt to a are caught up in an economic down- tend to offer later, to reduce the tax point where it is almost a trillion dol- turn, Republicans and Democrats alike cut package to increase resources for lars more than the present national in recent history have extended a hand programs designed specifically to as- debt. If you are out there paying mort- to these families and said: Through no sist middle- and low-income families gage payments, car payments, and stu- fault of your own, you have ended up in with the cost of higher education—and dent loans, you don’t need to have a that situation. This Congress is not those are the Hope and Lifetime Learn- Ph.D. in economics to know that as going to ignore you. This Congress is ing tax credits and the Pell Grant pro- you accumulate these deficits and not going to pretend you do not exist. gram. And, I also would have an equiv- debts eventually interest rates are We are saying nothing about those alent amount of resources go to deficit going to start to go up. people. reduction. When interest rates go up, that is a The PRESIDING OFFICER. The Sen- If we are serious about having this tax increase on average Americans. ator’s time has expired. bill contribute to our economic growth, When you start paying more for that Mr. DODD. This tax cut is way too then we ought to dedicate these re- house payment, that car payment, that excessive, in my view, and will benefit sources to higher education. I don’t student loan that your child may need a small percentage of income earners, need to lecture anyone in the Chamber in order to receive a higher education, creating deficits from which we will about the value of providing higher that is a tax increase for middle Ameri- spend years recovering as it squeezes education opportunities for people. cans. If we do not stem this tide and our ability to provide help to working Yet, in spite of his rhetoric, the Presi- become more fiscally responsible, then families and for education. I urge the dent’s fiscal year 2004 budget includes those interest rates are going to have a adoption of the Kennedy amendment. I cuts in the maximum Pell Grant avail- huge impact on literally millions of ask for an additional 30 seconds. able to low-income students, and he Americans. The PRESIDING OFFICER. Without would do nothing to expand the Hope Again, you do not need to have me objection, it is so ordered. and Lifetime Learning credits, which lecture about that point. I think most Mr. DODD. We have 20 hours for de- are specifically designed to help mid- Americans understand it. We have seen bate on a reconciliation bill, which

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00039 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6186 CONGRESSIONAL RECORD — SENATE May 14, 2003 may be the most significant debate we I also think it is pretty simple be- This amendment additionally would are going to have in this Congress. cause we are paying for this by repeal- also allow someone who worked as few Twenty hours—that is all we get to ing the top bracket, repealing the ac- as 20 weeks to collect as much as 26 talk about the importance of what we celeration of the reduction of the top weeks of federally-funded benefits. are about to do. I am deeply dis- tier. Some people say: That is a small This amendment also deals with appointed. We are constrained in the business bracket. Those people are all part-time workers. In offering this Senate of the United States to have a small business people. We should do amendment, what they forget at the more meaningful debate about some- this to stimulate the economy. Federal level is that we already give thing as important as this. That is totally wrong. It is totally States the option of covering part-time I, again, urge adoption of the Ken- incorrect. Less than 5 percent—prob- workers. So why a national policy of nedy amendment to at least provide re- ably 2 or 3 percent—of the people who covering part-time workers when this lief for those who have lost their jobs receive benefits in the top bracket are has been historically a State program and ought to have some help to provide small businesses. Let me put it dif- that has been financed through some for their families. ferently; 2 to 3 percent of small busi- Federal taxation? There are a lot of de- The PRESIDING OFFICER. The Sen- nesses in America are in that top tails left to individual States to decide. ator from Montana. bracket. Just 2 to 3 percent. Most of It is not possible for us to legislate at Mr. BAUCUS. Mr. President, I ask all the people in the top bracket are not the Federal level the conditions that Senators to heed the words of the Sen- small business. They are other people. exist in various States for deciding ator from Connecticut. I think he is ac- They are very wealthy people. I have whether part-time workers should be curate. I think he is on target. nothing against wealthy people getting included. The amendment before us, of which I a tax break. Everybody should get a This provision would allow those am a cosponsor, is very simple. The an- tax break. It would be wonderful if we seeking only part-time work to collect swer of whether it should be adopted is all could get a tax break. unemployment benefits. What this ba- also very easy. We are elected to make choices and sically means is a worker could turn Getting to the point, the question is, set priorities. The economy today is down a full-time job and continue col- Should we extend unemployment bene- not in great shape. This bill before us lecting unemployment benefits. fits to those millions of Americans who is designed and intended to stimulate There is a provision of this amend- do not have jobs and whose unemploy- the economy by reducing taxes. I sug- ment that changes policy in regard to ment insurance is about to expire? gest the right course would be, instead low-wage workers. This is another pro- The provisions in Federal law that of giving the elite a tax break right vision under Federal law where States give unemployment insurance benefits now—a lot of them tell me they do not already are given the option of doing will expire in a few weeks. The number want it; they do not need it—take some this. This provision would require of unemployed people is rising. These of that money and extend unemploy- States to use what is referred to as an are people who have lost their jobs not ment benefits. alternative base period. That means because of their fault but because they The PRESIDING OFFICER. The Sen- using the most recent quarter to cal- have been laid off, because the econ- ator has used 4 minutes. culate benefits. omy is anemic. They lost jobs because Who yields time? The Senator from In 1997, this was offered to the Senate their employers are laying them off. Iowa. and we voted 85 to 15 to overturn a Fed- The question is, Should the Congress Mr. GRASSLEY. Mr. President, we eral court decision that would have re- extend unemployment benefits? Should will extend unemployment compensa- quired the States to use the most re- they extend unemployment benefits to tion. We will support an extension, cent quarter. In other words, Congress these hard-working men and women though, of current law. We will do it decided in 1997 against a court decision who are not making a lot of money? before its expiration at the end of May. doing what this amendment does. We They are basic wage earners. Should we But this amendment goes beyond ex- decided 85 to 15 to leave it to the re- extend unemployment benefits? To ask tending unemployment compensation spective States, as has historically the question is to answer it: Of course, as it is written in current law. been the case, to make this decision of we should. This is unprecedented for sure, and I using an alternative base period. I hear from the other side that also think it is an unjustified expan- So as I mentioned, I will support, and maybe they will not look for jobs be- sion. There might be legitimate debate I believe the Senate will pass, an exten- cause they are getting additional bene- on that point, but there is no legiti- sion of current law for unemployment fits. They are not getting more dollars mate opposition to a statement that benefits before it runs out. in benefits, they are just getting more this is unprecedented. This amendment is paid for in a way weeks during which they can receive Also, this extension and this change that discourages job creation. Remem- about $200 a week while they are look- in law comes at a time when unemploy- ber, the fundamental purpose under- ing for a job. The obvious answer to ment is not as high as it has been in lying this legislation is to give incen- that charge is these are not good previous recessions. The current unem- tive for investment for the creation of times. Two-hundred dollars a week is ployment rate is 6 percent. That is jobs. So how is this amendment paid not a lot of money. I daresay no Mem- compared to 7 percent at times during for? By attacking small businesses, by ber of this body can live on $200 a week. the 1990s and more than 8 percent dur- delaying the tax relief that is in this We are so used to living on more than ing the 1980s. bill for 80 percent of those who are $200 a week. I see the Presiding Officer It was in the 1990s at 7 percent, in the taxed at the 39 percent rate. Remem- smiling, knowing there is probably a 1980s at 8 percent. Those happen to be ber, we reduce the highest marginal little truth in that. I am suggesting we the last two times that Congress pro- tax rate down to the same as the high- should do the obvious and extend un- vided extended benefits. est corporate tax rate. Why? Because employment benefits. I also point out the unemployment there should not be a bias in our tax Another argument I hear against this rate right now in 23 States is lower law against small entrepreneurs, unin- proposal is that it is not a stimulus to than it was 1 year ago. When it comes corporated entrepreneurs. extend the period during which people to people who have exhausted benefits, As we have been told so often by get unemployment benefits. Of course this amendment would provide 26 Joint Tax and by the White House, 80 it is a stimulus. Those people are going weeks of Federal benefits even without percent of the benefits go to small to spend that $200-a-week check. Of regard to the duration of State bene- business. Now, that does not mean all course, they are going to spend it. fits. So this violates an insurance prin- small business is taxed at the 39 per- Economists will tell us that for every ciple that we followed for a long time cent level, but by reducing this we are $1 of unemployment benefits, there is a inherent in the unemployment pro- taking away a bias against small busi- multiplier effect of $2.15 to the econ- gram, and it violates it by breaking the ness. There should not be an 11 percent omy; that is, for every $1, an additional link between the time someone has penalty for being an unincorporated $2.15 is spent in the economy. It is pret- worked and the time that person can small business. It is unfair. When we ty simple. collect unemployment benefits. had a lower marginal tax rate for small

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00040 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6187 business at 28 percent for the top indi- over 1 million workers who already had week. This bill will put money into the vidual rate, as we did after 1986 until it exhausted their 13 weeks of federal un- hands of people who need it and people was raised, we had a 5 percent differen- employment benefits and received no who will spend it. That’s good for our tial between the corporate rate of 33 benefit from what Congress did earlier economy and it helps sustain the jobs percent and the highest individual rate this year. Now is the time to assist that other people do have. The Senate of 28 percent. During that period of those workers and all other Americans should unanimously adopt this amend- time, we had an explosion of small who are on the verge of exhausting ei- ment. business, setting the stage for the mas- ther their state or federal unemploy- The PRESIDING OFFICER. Who sive growth we had in the economy in ment benefits and in some cases, both. yields time? the 1990s. It is ironic that during the week the The Senator from Montana. What does this amendment do? It Senate is taking up the President’s Mr. BAUCUS. Mr. President, I have will kill the opportunity for job expan- ‘‘Jobs and Growth’’ package—the ma- the highest regard for my friend from sion that we have prepared in lowering jority is not addressing the immediate Iowa, but for him to characterize this the marginal tax rate for self-employed need for job assistance for millions of as a job-killing amendment is just be- people, doing away with the bias in Americans. Instead of pressing Con- yond the pale. The fact of the matter is favor of corporations so that where 80 gress for a ‘‘robust’’ tax cut to help the that less than 5 percent of small busi- percent of the jobs are created in small wealthiest Americans, the President nesses are in the top bracket that will business, there will be an incentive to should be fighting for additional unem- be repealed under the amendment. create new jobs. ployment benefits for working families That is a very conservative estimate. The National Bureau of Economic who need them and will spend them, Second, when we are talking small Research shows that the surest way of stimulating the economy. That is why businesses under terms of this amend- expanding small business is from their I support Senator KENNEDY’s amend- ment, we are talking about law firms, own equity, by reducing the marginal ment to authorize an additional 13 we are talking about partnerships of tax rates, which is going to encourage weeks of Federal unemployment bene- all kinds. We are talking about dental the sort of investment that creates fits, including coverage for those one partnerships and doctor partnerships. jobs. million workers who have already ex- When people use the word ‘‘small busi- The Senators who have offered this hausted their benefits. Senator KEN- ness,’’ it conjures up a 15 or 20-person amendment are complaining about lost NEDY’s amendment also expands unem- operation that is working hard to jobs, but then this amendment under- ployment coverage to low-wage and make ends meet. When we talk about mines the very provisions of the basic part-time workers. Finally, the amend- small business, however, we must be bill that will create the jobs we need. ment extends the Federal unemploy- clear as to which small businesses are Obviously, I urge the defeat of this ment benefit program through Novem- in that top rate. Less than 5 percent of job-killing amendment. ber 2003 to accommodate new enrollees. all small businesses pay that top rate, I yield the floor. This is not just about doing what is so we are not hurting small business Mr. LEVIN. Mr. President, I rise to right. It is also about doing what is with this amendment, by any stretch support the amendment being offered helpful to our economy. It is elemen- of the imagination. by Senator KENNEDY to extend and au- tary economics that providing addi- Second, this roughly 5 percent of thorize additional unemployment bene- tional unemployment benefits is a small businesses includes the mom- fits. great way to jump start our stagnant and-pop small businesses we have all This is a tumultuous time for mil- economy. The money we are talking talked about, but also the partnerships lions of Americans. Our economy is about here is money that will be spent. like law firms and dental partnerships. struggling right now and millions of According to a 1999 Department of I do not think the latter really con- Americans are down on their luck. Labor study, every $1 dollar invested in jures up what we are talking about Businesses and manufacturing plants unemployment insurance generates when we talk about helping a small are closing, the stock market is down $2.15 in gross domestic product. So we business. Maybe we are, but I think and most importantly, jobs are being are going to be putting money into the most Americans are not. That is a fact lost. It is critical that we in Congress, hands of people who need it, people who I want to get in the record, that really at a minimum, do what we can to help will spend it, people who will help the so few small businesses are in that top every day Americans hurt by this economy. rate. downturn, especially the increasing Over 47,000 Michigan residents have I ask unanimous consent that the number of people who are unemployed exhausted their Federal unemployment pending amendments be temporarily and having trouble getting back into benefits as of February of this year. If set aside so that the Senator from Ar- the workforce. we fail to act, in 2 weeks, over 1.1 mil- kansas may offer her amendment. There are currently over 8.7 million lion Americans, including nearly 54,000 Mr. DODD. Reserving the right to ob- unemployed Americans—the highest Michigan residents, will be without un- ject, Mr. President, and I will be very number in a decade. Since January employment insurance benefits. This is brief. 2001, the national unemployment rate unacceptable, especially given the fact The PRESIDING OFFICER. The Sen- has risen from 4.2 percent to over 6.0 that the Federal unemployment insur- ator from Connecticut. percent. Since President Bush took of- ance trust fund currently has a surplus Mr. DODD. I want to follow up. I fice, the United States has lost over 2.7 of more than $21 billion. The contrast know the chairman of the committee is million private sector jobs—the most couldn’t be more evident than in this here, and I missed a little of the discus- of any President in modern history. debate. Instead of pushing for a huge sion because I had to step outside the The downturn has especially hit my tax cut sharply slanted to upper in- Chamber with some police officers home State of Michigan hard. Michi- come folks, I would hope that the Sen- from my State. I will take a minute or gan has an unemployment rate of 6.7 ate will show real leadership and sup- so and obviously then move to the percent—among the highest in the Na- port unemployment insurance that amendment of the Senator from Ar- tion. According to the Bureau of Labor benefits working families. kansas. Statistics, Michigan lost 17,700 jobs The President accuses us of engaging I understand the chairman made a just last month—the most of any State in ‘‘class warfare.’’ Well, what he calls statement about this issue of unem- in the country. That brings the total class warfare, I call reality. Under the ployment insurance at some point. I number of Michigan jobs lost since the President’s tax cut plan, the wealthiest wonder if the distinguished chairman Bush Administration took office to 1 percent of Americans are expected to of the committee might share with over 178,000. receive an annual tax cut of about Members when that might happen and Earlier this year, Congress extended $90,000 a year, or a little more than why we cannot do it now. We know this Federal unemployment benefits for an $1700 a week. Under the Kennedy is a growing problem, and we always additional five months to June 1, 2003. amendment, unemployed workers in delay these things. When 80,000 people However, Congress did not authorize my home state of Michigan would re- a week are running out of benefits, we additional Federal benefits. Therefore, ceive a maximum benefit of $362 a have had more than 2 million people

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00041 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6188 CONGRESSIONAL RECORD — SENATE May 14, 2003 lose work since the President came set aside and the Senator from Arkan- their families, to be able to do what into office, why not extend unemploy- sas be recognized to offer her amend- they need to do not only in taking care ment insurance on this bill? It would ment. of their families but playing a role in be a great gesture to the American The PRESIDING OFFICER. Without stimulating this economy. public. My question is, simply, to ask if objection, it is so ordered. We certainly know that with our the chairman of the committee might AMENDMENT NO. 578 businesses and industries operating at respond. Mrs. LINCOLN. Mr. President, with roughly 70 percent, it is critical, if The PRESIDING OFFICER. The time the amendment set aside, I call up my these industries are going to create the on the amendment has expired. amendment. jobs we want created for the sustain- Mr. GRASSLEY. I ask unanimous The PRESIDING OFFICER. The ability of growing this economy, that consent that immediately following ac- clerk will report. they have a demand. They are going to tion on S. 1054, the Senate turn to con- The assistant legislative clerk read need people demanding their products sideration of legislation introduced by as follows: and services, and that will be critical. the majority leader or his designee to The Senator from Arkansas [Mrs. LIN- The way to do that is to provide fami- extend emergency unemployment bene- COLN], for herself and Mr. ROCKEFELLER, Mr. lies the resources and the means with fits until November 30, 2003; that the BINGAMAN, Mr. BREAUX, Mr. DASCHLE, Mr. which to provide for their families. bill be considered as read three times LEVIN, Ms. CANTWELL, Mr. PRYOR, Mr. That acceleration we provided in the and passed; further, that the motion to KERRY, Mr. KENNEDY, and Mr. DODD, pro- committee went a long way in doing poses an amendment numbered 578. reconsider be laid upon the table, with that. My hope is we will continue to all this to occur without intervening Mrs. LINCOLN. Mr. President, I ask move in that fashion, in the right di- action or debate. unanimous consent that the reading of rection of providing families the re- The PRESIDING OFFICER. The Sen- the amendment be dispensed with. sources they need, the hard-working ator from Montana. The PRESIDING OFFICER. Without American families who are out there Mr. BAUCUS. This is the first I have objection, it is so ordered. today working hard to provide for their heard this. I don’t know what this is all The amendment is as follows: families. about. Pending a better understanding (Purpose: To expand the refundability of the This amendment does that through of the request, I respectfully object. child tax credit) the expansion of the child credit. Basi- The PRESIDING OFFICER. The ob- At the end of subtitle C of title V, insert cally, what we do is expand the child jection is heard. the following: credit refundability by lowering the Is there objection to setting aside the SEC. ll. FURTHER EXPANSION OF CHILD TAX earnings threshold to $5,000. This is a CREDIT REFUNDABILITY. reasonable request in light of what we pending amendment? (a) EXPANSION OF CHILD TAX CREDITS.— Mr. DODD. Further reserving the are talking about—again, assistance to (1) IN GENERAL.—Clause (i) of section families in order to raise their children right to object, I ask unanimous con- 24(d)(1)(B) (relating to portion of credit re- and provide for their needs, as well as sent that I be allowed to proceed for 1 fundable), as amended by section 106(b) of stimulating the economy. minute. this Act, is amended to read as follows: I point out to my colleagues, there The PRESIDING OFFICER. Without ‘‘(i) the sum of— are 8 million children from working objection, it is so ordered. ‘‘(I) 5 percent of so much of the taxpayer’s earned income (within the meaning of sec- families in this great country at the Mr. DODD. I want to know why this tion 32) as is taken into account in com- very bottom of the income scale who could not be adopted as part of this puting taxable income for the taxable year get no benefit from the current child passage. We have an amendment here which exceeds $5,000 and is less than $13,250, care tax credit, 8 million children in right now to do it. This is the time to and this country we are trying to raise in do it. We all care about this and have ‘‘(II) 15 percent of so much of the tax- working families who get no benefit people in every State adversely af- payer’s earned income (within the meaning of section 32) as is taken into account in from this child tax credit; 4.4 million of fected. Why wait another series of those 8 million children would benefit weeks? Why not do it right now and computing taxable income for the taxable year which is more than $13,250, or’’. from the child credit under the amend- adopt the Kennedy amendment and (2) EFFECTIVE DATE.—The amendment ment I have offered today. move this issue beyond us and deal made by this subsection shall apply to tax- By providing tax relief to those who with the rest of the bill? That is my able years beginning after December 31, 2002. need it the most, our amendment will question to my distinguished chair- (3) APPLICATION OF EGTRRA.—The amend- have a direct and meaningful stimula- man. ment made by this subsection shall be sub- tive effect on the economy. Mr. GRASSLEY. Mr. President, I will ject to title IX of the Economic Growth and I am joined in this amendment by answer his question, if I am permitted. Tax Relief Reconciliation Act of 2001 to the several other cosponsors: Senators same extent and in the same manner as the Two reasons: One, this amendment is ROCKEFELLER, BINGAMAN, BREAUX, not germane to this bill; two, it goes to provision of such Act to which such amend- ment relates. DASCHLE, LEVIN, CANTWELL, PRYOR, the expansion of unemployment bene- (b) DELAY OF DIVIDEND EXCLUSION.—Sub- KENNEDY, DODD, and I think many oth- fits as opposed to extension of existing paragraph (B) of section 116(a)(2) (relating to ers, when they realize what we are try- benefits. partial exclusion of dividends by individ- ing to do and the effect we can have on Mr. DODD. I further understand that uals), as amended by section 201 of this Act, their States and, more importantly, the bill the chairman is talking about is amended by striking ‘‘2007’’ and inserting the working families who are out there would not expand this at all but really ‘‘2010’’. every day trying to make ends meet. just extend it; is that correct? So we Mrs. LINCOLN. I thank all of my col- The families of these kids play by the will have a debate about that, obvi- leagues for their attention today be- rules. These are individuals who are ously. cause I believe I brought something to working. They go to work every day at Mr. GRASSLEY. Yes. the floor that is of the utmost impor- extremely low wage jobs. They pay sig- Mr. DODD. I thank the chairman for tance to American families. nificant payroll, State, and local taxes, responding. I compliment the chairman of the Fi- excise taxes, and property taxes. Often- I am sad in a way, and maybe the nance Committee. Having worked with times they struggle to make ends amendment will be adopted by major- limits on a multitude of issues, he is meet, yet they get no benefit from the ity if that is the case and we can move always reaching out and working hard child tax credit. beyond this. with all the members of the Finance Now, I hope my colleagues will in- Mr. President, I suggest the absence Committee. I applaud him for his ef- dulge me for just a moment. One of the of a quorum. forts in working with me early in the things many reflect on is that raising The PRESIDING OFFICER. The committee to accelerate the child cred- children is probably one of the most clerk will call the roll. it we have in this stimulus package. important and expensive undertakings The PRESIDING OFFICER. Without The acceleration of the child credit is that anyone has. We do it for good rea- objection, it is so ordered. very important in terms of reaching son. We talk about what a great nation Mr. BAUCUS. I ask unanimous con- out to families and providing them the we live in. We talk about how wonder- sent that the pending amendment be utmost resources to be able to care for ful it is to be a part of the greatest

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00042 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6189 country on the face of this Earth. Then their cousins and grandmothers. But I dren we could cover. I look around at we think about the face of our country looked back at the time and the re- my neighbors: Mississippi would see tomorrow. Who will be the face of this sources I spent in molding and shaping 100,000 children additionally covered. In country tomorrow? What will it look those two little boys. Let me tell you, Tennessee, you would see 108,000 chil- like? it was no different than any other dren eligible who would not be eligible The face of this country, tomorrow working mom. otherwise. In the State of Texas, my and in the future, will be shaped by If we want to stimulate this econ- neighbor to the south, you would see how well we raise our children today. omy, if we want to develop a nation 467,000 children added with a benefit if That is what I am asking my col- with the kind of leadership and future we passed this amendment. leagues to focus on. It is not just our I think everyone in this body wants us I implore my colleagues to really children. I don’t just worry about my to have, then it is absolutely critical take a look at what our purpose is children and their well-being. I worry that we look at expanding that child today, what we have been striving to about the other parents’ children who credit to these working families. do. Let’s not just try to stimulate the are out there, who will be the cowork- Under the current law, the Presi- economy but use the opportunity we ers with my children, who will be the dent’s proposal, and the Finance Com- have in growing this economy to grow leaders of tomorrow. They will be the mittee bill, a working family with this great country. I daresay there will face of this country when we are work- earned income of $10,000 gets no benefit not be anyone in this Chamber who ing in a global economy with mul- from the child credit. Our amendment could argue with me that the future of titudes of nations across the globe. today would give such a family with this country lies in the future of our These are the children we are raising two children a total benefit of $500. children. today. This does not seem to be much money Once again, we have a tremendous My colleagues, we have an oppor- to many of us perhaps, but it amounts opportunity. I hope my colleagues will tunity today to give a hand to these to a significant increase in the amount realize that 4.4 million of the 8 million parents in raising these children with a of money available to these families to kids who are left out under the current simple child credit, a refundable child provide for the most fundamental bill would begin to benefit from a child credit. These are people who are hard- needs for their children. Again, we are credit under this amendment. By pro- working. To be eligible, they have to be talking about basic needs that also will viding this tax relief to those, again, in a job. They have to meet an earnings drive the economy. These people are who need it the most, we will have a di- limit. They have to have children. We not going to be able to participate in rect and meaningful stimulative effect are not just giving a freebie; we are stimulating the economy if they don’t on the economy. Let me tell you, just reaching out to these hard-working have the extra resources they need. as I did as I turned my hat around and parents and saying let us help you These are working individuals. became a mother during my break shape the face of this country tomor- Children have a variety of needs at a time, these families will spend those row. variety of ages, the most fundamental dollars. They will spend them on our Just one more indulgence. As I talk of them being shelter, food, clothes, greatest asset this country could pos- about raising children and the impor- education, and health care, and $500 sibly have, and that is our children. tance of that face of tomorrow, I re- can make a substantial difference to a I thank you for the time. I yield the flect on the time I have spent in my family with an earned income of $10,000 floor and encourage my colleagues to State visiting with and shadowing or less. This sort of benefit can go a support my amendment. some of our low-income workers, par- long way in helping these families The PRESIDING OFFICER. Who ticularly some single moms who have raise their children, encouraging them yields time? been out there working. They are to excel in their jobs and to set a good working parents with children in example. The Senator from Iowa. childcare, struggling with challenges of It is the least we can do for these Mr. GRASSLEY. Mr. President, we childcare and transportation. There are struggling and impoverished families all owe the Senator from Arkansas a multitudes of challenges they face. who, again, are working hard every day debt of gratitude for a lot of leadership I look at what I spent my time doing earning money and at the same time she has shown in this area, not only on during the Easter break, during the 2 trying to care for their children. They the present bill that is before us, be- weeks we are off from Congress, home have the same kind of love and compas- cause she did get some amendments in our States. I spent a lot of time on sion, the same kind of ability to give adopted in committee. She voted for the road, visiting with children, par- them the basic needs that every one of our bill on final passage. I appreciate ents, chambers of commerce, Rotary us tries to have every day. very much that being the case because groups, development groups, planning I just implore my colleagues, please it made it a bipartisan piece of legisla- districts—all of those different groups. look at this opportunity we have before tion. But also, she has expressed the But I also switched my hat around for us today, an opportunity to reach out same concern because she was a mem- a few days and spent some time myself to working American families who are ber of the committee, 2 years ago, out there as a mother, as a parent. struggling day in and day out to do when we passed the existing tax law I went to the store after looking at what is right. They are struggling to do that we are adjusting now to bring it the fliers and seeing where the sales what is right by their children, perhaps up to date and fully implement it in were, and I thought about what I did simply out of their own compassion 2003, rather than as we decided 2 years with my time and my resources. I and love for their children, not know- ago, to implement it over a 10-year pe- thought that with two growing boys, ing that we as a nation are depending riod of time. She was very active in age almost 7, I had to replace wornout on those children to be the leaders and these areas in that basic legislation. blue jeans, wornout tennis shoes, that I the providers, the employees of tomor- So she is very consistent in express- wrote a check to my school for their row. ing concerns about families of low in- lunchroom tab, the fact I wrote a I ask my colleagues to take a look at come, and particularly low-income check to make sure they would be on this amendment. Recognize all we are families with children. I wish I could the Little League team and made sure doing is postponing the 20 percent ex- do all the things she asked us to do, they had their uniforms. I looked at clusion on dividends—only postponing but we have to craft legislation that is the other things, the county summer it for 3 years, postponing that exclu- pretty well balanced. One of the largest programs I wanted to include them in sion in order to mold and shape the fu- parts of our bill is the $95 billion that so they would have good activities, ex- ture of this country. is provided for families with children. ercise, and grow just like any 7-year- I would like to share with my col- Obviously the Senator from Arkansas old little boy ought to be growing. leagues in just a few of my neighboring would like to make this more generous. I looked at what we did. We didn’t go States what they would see. Arkansas I wish we could. But I don’t feel we to Disney World. We didn’t do anything would see the number of added kids, can. The provisions that are in this $95 expensive. They went fishing with their when we move to that $5,000 threshold, billion have been, to a great extent, be- grandfather and spent some time with an increase in Arkansas of 60,000 chil- cause of the work of the Senator from

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00043 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6190 CONGRESSIONAL RECORD — SENATE May 14, 2003 Arkansas. It includes expanding bene- cent by the Federal Government. That Carter said in the past we should elimi- fits for low-income families, a provi- is a year. In addition to that, there are nate the double taxation of corporate sion that is included in great part be- additional weeks for high unemploy- dividends. I hope we will be able to do cause of the hard work of the Senator ment States. that, and I expect we will be presenting from Arkansas. Moreover, this legisla- This is not going to pass. It was tried an amendment to enhance or strength- tion creates a new benefit. several times on the floor of the Senate en the dividend proposal that is before But I think that the exception I take last year and it never passed. It is not us today which would actually elimi- to her amendment is just basically be- going to pass this year. We are not nate the double taxation of dividends. cause it hurts the balance of this bill going to double the program. We will We tax dividends now at the second between investment and spending. be happy to work with our colleagues highest rate in the world, higher than I appreciate the Senator’s work on to extend the current law. We will not France, Belgium, and Italy. We don’t these matters. It would be subject to a double or triple this program. need to do that. We can fix that in this budget point of order. I will raise that I appreciate the work of the chair- bill today. By doing so, we will be en- at the appropriate time. I will not do it man of the Finance Committee and couraging a much better environment taking exception to policy but taking other Members who want to truly give for investment, and encourage, I think, exception to what can be accomplished assistance to people who are unem- a much greater prospect for the stock at one time, and the fact that we are ployed and who need temporary assist- market. I think the stock market trying to have a balanced package be- ance. But we don’t want to turn it into would improve substantially and as a tween investment and spending. I a year-long program. If we did that, result, therefore, there would be more think it would put us over the balance frankly, the trust fund would be run- equity, more equity investments, more on the spending side. ning out of money if another extension private sector jobs. That ultimately was passed. That would be very fool- For that reason, I will raise that should be our goal. point of order but do it without preju- hardy. I urge our colleagues not to be mis- I also tell my colleagues that a budg- dice. lead by Senator KENNEDY’s amend- et point of order lies against Senator I yield the floor. ment. Let’s pass a clean extension of KENNEDY’s amendment. A germaneness The PRESIDING OFFICER. Who the unemployment compensation pro- point of order lies against Senator yields time? gram. We can do that by unanimous Mr. GRASSLEY. Mr. President, I KENNEDY’s amendment. We should be trying to work to create jobs. That is consent. We passed the previous one by suggest the absence of a quorum. unanimous consent, or we can have a The PRESIDING OFFICER. The really the essence of what the Presi- dent’s proposal is—and the chairman of recorded vote. We can do that outside clerk will call the roll. the reconciliation bill. We can do that The assistant legislative clerk pro- the Finance Committee—to help create jobs and not just write checks for the and have it on the President’s desk, ceeded to call the roll. and extend the present law. Mr. GRASSLEY. Mr. President, I ask unemployed but create an environment that will be more conducive towards I yield the floor. unanimous consent that the order for The PRESIDING OFFICER. The Sen- the quorum call be rescinded. investment, more conducive to encour- age people to make investments to cre- ator from Maryland. The PRESIDING OFFICER. Without Mr. SARBANES. Mr. President, I ate jobs. That is what we are trying to objection, it is so ordered. yield myself 2 minutes off of the bill. Mr. GRASSLEY. Mr. President, I am do. We do that several different ways. The PRESIDING OFFICER. Without going to yield to the Senator from One is to reduce tax rates. Somebody objection, it is so ordered. Oklahoma what time he might con- says that is a tax cut for the wealthy. Mr. SARBANES. Mr. President, I sume either on amendments or on the I disagree. By the time we are finished, want to respond to the Senator from bill. the maximum rate is 35 percent. I be- Oklahoma, and urge my colleagues to Mr. NICKLES. Mr. President, I thank lieve that is still more than a third— support the Kennedy amendment. my friend and colleague, the manager still a lot more than 31 percent—which What are workers to do in terms of of the bill, chairman of the Finance was the maximum rate when President supporting their family if they exhaust Committee. I want to make a few com- Clinton was elected. the 39 weeks of unemployment insur- ments concerning unemployment com- In 2001 they cut taxes for the wealthy ance benefits that they are eligible to pensation. and reduced the maximum rate from receive? Senator KENNEDY’s answer is It is my understanding that the 39.6 to 38.6, 1 percentage point. Presi- that under the current circumstances chairman said he would not object to dent Clinton raised it, and many in we provide an additional 13 weeks of and he is trying to facilitate a clean this Congress raised it from 31 percent benefits. extension of the current unemploy- to 39 in 1 year retroactive. By the time The labor market is not improving. ment compensation program. That is we are done, the rate is going to be 35 It is worsening. The unemployment what the Senator from New York, Sen- percent, which is still almost 20 per- rate is rising, not falling. This notion ator CLINTON, and I did twice on this cent higher than it was when President that there are jobs to be had does not floor. We did it last December and Clinton was elected. square with the facts. The economy is early this year. The first piece of legis- I just want to make a few additional continuing to lose jobs. We lost 48,000 lation we passed this year was the points. Also in the chairman’s mark we jobs last month. We have lost over half clean extension of the unemployment have expensing for small business. a million jobs already this year. The compensation program. That is a 13- They will be able to expense items up unemployment report stated that al- week Federal program. to $75,000. We are looking to maybe most 9 million workers were unem- Senator KENNEDY is being consistent. even accelerate that similar to a provi- ployed in April. Just under 2 million He is trying to make a 13-week pro- sion in the House. That will create an workers have been unemployed for 27 gram into a 26-week program. That incentive for small business so people weeks or more. The number of long- costs $12.7 billion. A clean extension can write off that investment in the term unemployed is as high as its been costs $5.6 billion. We will agree with a year that investment is made instead since January 1993. clean extension. We will not agree with of amortizing over years. That will cre- The average duration of unemployed doubling the program. ate jobs because more people will make has risen to 19.6 weeks. This is the Keep in mind this is a 13-week pro- that investment. longest average duration reported dur- gram. Current law is a 13-week Federal We are also talking about elimi- ing this recession, and it is the highest program on top of up to 26 weeks of nating this very unfair double taxation level in almost 20 years. What are these State benefits. That is a total of up to on dividends. Why should we tax dis- people to do? 39 weeks. That is a total of 9 months. If tribution of corporate profits at the The Kennedy amendment is very sim- we adopted Senator KENNEDY’s amend- second highest rate in the world? That ple. It says that providing some contin- ment, that would be a 26-week State makes no sense whatsoever. ued support for those who have lost program, and a 26-week Federal pro- The President has proposed that we their jobs through no fault of their own gram, the second part of it paid 100 per- eliminate double taxation. President is more important than providing some

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00044 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6191 of these tax cuts that are proposed in The amendment is as follows: many of the businesses that have been this legislation. Ms. CANTWELL. Madam President, I the great engines of growth in the 1990s It makes sense for the individuals, rise today, along with my colleagues, are companies that now spend 27 per- and it makes sense for the economy. Senator NELSON of Florida and Senator cent of their overall dollars on research We are talking about trying to stimu- BAUCUS, to offer an amendment to re- and development. So research and de- late the economy. Extended unemploy- vise and extend the research and devel- velopment has become a bigger per- ment insurance benefits are scheduled opment tax credit. centage of a company’s overall plans, to stop and that will withdraw that I know my colleagues will be familiar and predictability about that research much purchasing power out of the with this amendment, but I want to and development has become more im- economy. clarify three things this amendment portant. So I urge my colleagues to be sup- does. First, it will extend the research That is why two years ago Federal portive of this amendment. We face a credit through June 30, 2014, which is Reserve Board Chairman Alan Green- worsening economic situation. Unem- the end of this reconciliation period. span told a Senate Budget Committee: ployment is rising. The opportunities Second, it will increase the rates of the Had the innovations of recent decades, es- in the job market are shrinking. We alternative incremental credit; and pecially in information technologies, not need to provide help to our workers third, it will create a new alternative come to fruition, productivity growth during and to their families to help them simplified credit for qualified research the past five to seven years, arguably, would through this very difficult period. The expenses. have continued to languish at the rate of the preceding twenty years. Kennedy amendment seeks to do that. This language is identical to the lan- The unemployment insurance trust guage that was originally included in So here was someone in charge of ad- funds have surpluses of almost $20 bil- S. 664, introduced by Senator HATCH vising us on Federal investment and lion. from Utah and cosponsored by 27 bipar- tax policy basically saying these com- The PRESIDING OFFICER (Ms. COL- tisan Senators. The amendment pays panies have been able to invest in R&D, LINS). The Senator’s time has expired. for this tax credit by eliminating the and have gotten us to that produc- Mr. SARBANES. Madam President, I underlying legislation’s section reduc- tivity rate we are so interested in. So yield myself 30 more seconds. ing the dividend tax credit. why aren’t we including that in this The PRESIDING OFFICER. Is there Since its increment in 1981, the re- package—something we know is tried objection? search tax credit, I believe, has dem- and true, something we know many or- Without objection, it is so ordered. onstrated that it is a powerful incen- ganizations have come before us to Mr. SARBANES. The unemployment tive for companies to increase research argue for, asking, why not make this insurance trust funds have surpluses of spending. The tax credit lowers the permanent? So in my amendment, we approximately $20 billion. These mon- cost of doing research in the United expand that tax credit through June eys were paid into the trust fund for States, so it encourages companies to 2014—which will help the economy turn the announced purpose of paying unem- continue to make investments in crit- around. ployment insurance benefits in an eco- ical R&D. The bottom-line benefit is I would like to enter into the RECORD nomic downturn. Now we have an eco- that research and development creates comments—I have no idea where my nomic downturn. We have people out of new jobs in the United States. colleague will be on this particular work. We have the job market wors- The current R&D tax credit is ex- amendment, but I would like to enter ening, not improving. These surpluses pected to expire on June 30, 2004. Many into the RECORD, or reenter into the ought to be used for the purpose for of my colleagues know we play this an- RECORD, I guess—comments from my which they were intended; and that is, nual game of continuing to say the colleague from Utah, who I think spoke to provide extended unemployment in- R&D tax credit is important, but not eloquently on this particular issue. As surance benefits. And those benefits renewing it on a permanent basis, my colleague from Utah said: ought to come ahead of any of the tax thereby saying to companies and orga- As it stands, companies have to take ac- cuts. nizations: You don’t know whether you count of the fact that Congress could allow I urge my colleagues to support the the credit lapse for a few months, as it did a will actually get this research credit or number of years ago. So companies hedge Kennedy amendment. not. It is important for companies to their bets, they spend a little less on R&D, I yield the floor. have access to this information be- and our economy suffers as a result. By con- The PRESIDING OFFICER. Who cause the kind of planning it takes to trast, permanence helps planning. The soon- yields time? do research and development, to in- er we make this permanent, the sooner com- The Senator from Montana. crease productivity in America, is not panies can begin to enlarge and expand their Mr. BAUCUS. Madam President, I necessarily done in 1 year or 2 years. research and development units, and the ask unanimous consent that the pend- The major investments in nano- sooner their innovations will strengthen eco- nomic growth. ing amendments be temporarily set technology and biotechnology, in soft- aside so the Senator from Washington ware, and in the computer sciences He quoted a variety of studies that I can offer an amendment. take several years of investments. So think are very important. He went on The PRESIDING OFFICER. Is there what we are talking about is giving to say: objection? businesses the predictability they want A permanent extension of this credit may Without objection, it is so ordered. to see in research and development so seem costly in terms of lost revenue. How- The Senator from Washington. ever, when you consider the value this in- they can move ahead. vestment will create for our economy, it is a AMENDMENT NO. 577 The long-term nature of these re- bargain. In fact, one study estimates a per- Ms. CANTWELL. Madam President, I search projects, I believe, is something manent research credit would result in our call up amendment No. 577. Congress should recognize today and gross domestic product increasing by $10 bil- The PRESIDING OFFICER. The make part of a priority package for re- lion after 5 years and by $31 billion after 20 clerk will report the amendment. invigorating America. This is a tried years. The assistant legislative clerk read and true program, again, for creating The Senator is quoting a study and as follows: jobs in America. analysis of various economists who are The Senator from Washington [Ms. CANT- In this tax cut bill—we are trying saying this is really how we get to pro- WELL], for herself, Mr. NELSON of Florida, something that is new, effectively say- ductivity in our economy. I am quoting and Mr. BAUCUS, proposes an amendment ing, let’s cut taxes on dividends for in- the Senator because I believe in what numbered 577. dividuals, and hope it trickles down to he said. Ms. CANTWELL. Madam President, I create jobs in America. We know the I understand my colleagues may not ask unanimous consent that further R&D tax credit works—it works, and it think that now is the time for this par- reading of the amendment be dispensed works effectively. ticular amendment. I argue that it is with. The point I want to make to my col- exactly the time for this amendment The PRESIDING OFFICER. Is there leagues is, what we need to understand, because let’s think about it. Who has objection? is the changing nature of businesses created jobs in the last decade? Who Without objection, it is so ordered. today in an information economy. So has stimulated our economy to move

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00045 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6192 CONGRESSIONAL RECORD — SENATE May 14, 2003 forward? It is a lot of companies that manufacturing technologies, advanced weap- permanent? Much too often the Con- have invested in R&D. It is the on systems and other tools in the war on ter- gress has decided, yes, to extend the Microsofts. It is the Amazons. It is the ror. credit, which I agree with, but not to variety of companies from my State Ms. CANTWELL. They write: make it permanent. For the life of me, and others that have made the invest- Growth in our high tech economy depends I cannot understand why we have not ments which increase the productivity on solid R&D, and there is no good reason to made this credit permanent. of their workforce, where they can delay making the credit permanent. A per- I have introduced legislation, bipar- manent tax credit will go a long way to pro- then hire new people as new products tisan legislation, which Senator HATCH and services are delivered. viding the planners and investors the cer- tainty that they need. and myself introduced, to make the That is something with which we R&D tax credit permanent. Similar Another document by that same coa- have had good experience. I want to get legislation has also been introduced in lition states that research jobs that are back to 3.5-percent economic growth. I the other body by Congresswoman created by this R&D are quite signifi- know the economic engine that will NANCY JOHNSON and Congressman ROB- cant; that more than 90 percent of the take us there will be these companies ERT MATSUI, along with other members costs eligible for credits from the R&D and corporations that know about pro- of each of their parties. This is bi- tax credit go directly into salary and ducing product and services in an infor- cameral. It is bipartisan. We believe wages of researchers. So the only way mation age economy. What they tell us very strongly that the research and de- for the company to go ahead and in- is important to them, is making per- velopment tax credit should be made crease the credit is to get an R&D pay- manent the R&D tax credit. They say permanent. In fact, there are about 28 roll. That is what we are talking about, this because there is currently no cer- sponsors of our legislation in the Sen- getting the R&D payroll. tainty—they come to us every few ate. It is about evenly divided between We are sitting here discussing how years to try to understand whether we both sides. we are going to move forward. I know are going to give them these tax cred- I would like to make a couple of its. my colleagues have a variety of ideas. We all probably have ideas that we points. The very bottom line is, this I ask unanimous consent to print in amendment will very much help the the RECORD a statement from the R&D think are an avenue or path within this tax proposal that will be effective. I American economy. Making the R&D Credit Coalition. tax credit permanent will give U.S. There being no objection, the mate- know as somebody who has been in the businesses, particularly in the tech- rial was ordered to be printed in the private sector, has seen a company nology sector, the confidence that RECORD, as follows: grow from 10 people to 1,000 people in a short time, the major focus of that those companies can invest in research RESEARCH EQUALS JOBS GROWTH AND and development and not have to keep ECONOMIC GROWTH company was in research and develop- guessing whether Congress is going to NOW IS THE TIME TO STRENGTHEN AND MAKE ment. extend or not extend this tax credit. PERMANENT THE R&D TAX CREDIT Let’s turn our attention to those Productivity growth in recent years has very companies that we think are the I can remember years past, some- been driven by the combination of acceler- basis for our future. We still see great times we would extend it and other ated technical progress and the resultant in- growth and opportunity in medical de- times the Congress would not extend vestment in tangible capital assets, research vices and research. We see great oppor- the R&D tax credit. There would be a and development, human capital, and public tunities in biomedicines, as I men- hiatus. I have forgotten how long those infrastructure. tioned, in nanosciences, in computing gaps were, but, as I recall, they were in Technological innovations have accounted the nature of 8 months, 10 months, for more than one third of our nation’s eco- sciences, in supercomputing. We see nomic growth during the last decade and are great opportunity in energy tech- something like that. Technology com- critical to sustained growth in the future. nology, in the new energy economy we panies were wondering, is Congress With government support, private invest- think will be so important. We cer- going to extend the credit? They have ment in R&D would fall short of the socially tainly see from the State of Wash- in the past. Maybe they will in the fu- optimal amount. (Congressional Research ington how the great investment in ture—but will they? This causes great Service, ‘‘Small Business Tax Relief: Se- uncertainty in the business world. lected Economic Policy Issues for the 107th software and communications tech- Congress’’ (RL31052)) nologies can move our country for- The R&D tax credit has a proven The research credit creates jobs. More than ward. track record. It lays the foundation for 90 percent of the costs eligible for the credit Let’s take this amendment that I be- technological innovation which in turn are salaries and wages paid to researchers. lieve is a bipartisan amendment sup- is an extremely important driving The only way for a company to increase its ported by many of my colleagues and force in the American economy. credit is to increase its R&D payroll in the Most economists look to productivity U.S. say that this is a priority. Let’s not First authorized in 1982, the credit has make these organizations, which have gains. When there are productivity been reauthorized 8 times (with a gap from been the engine of job creation, con- gains in the economy, the economy June 1995 to June 1996). The current credit tinue to come back to us as we pass the grows. When we have had high produc- expires in June 2004. However, its effective- largest tax cut without including tivity gains, our economy has done ness is limited because businesses cannot something that the very job creators quite well. In fact, it is important to rely on it in their long-term planning, and have told us they need to move for- recall the words of Chairman Alan most R&D projects are long-term. Greenspan of the Federal Reserve who In order to provide stability and broaden ward. the reach of this proven incentive, Congress I urge my colleagues to support this said, the reason why our economy has should make the credit permanent, increase amendment. Let’s make the research continued to grow so well is because of the rate for the alternative incremental and development tax credit permanent. advances in technology that occurred credit (AIRC), and provide an alternative I retain the remainder of my time. in America and also in the world, simplified credit calculation to induce even The PRESIDING OFFICER. Who which dramatically increased produc- more research-intensive businesses to under- yields time? tivity in our country. This is one of the take additional research spending. Mr. BAUCUS. Will the Senator from main reasons the economy grew at A bolstered and permanent R&D tax credit is essential to US competitiveness. In a glob- Washington yield me 10 minutes? such a rapid rate in the 1990s. al economy, many companies can choose Ms. CANTWELL. I yield the Senator Granted, some of that was, as the where to conduct their R&D. A 2000 study from Montana as much time as he Chairman would say, irrational exu- based on OECD data that measures the im- needs. berance. There was a bubble in effect at pact of government fiscal support for R&D Mr. BAUCUS. Madam President, the the time. There were too many people shows that Spain, Portugal, the Netherlands, R&D tax credit has been an issue be- investing because the idea sounded Canada, Australia, and Japan each provide fore us for quite some time, almost as good, without looking closely and di- more generous—and permanent—fiscal in- long as I can remember since I have rectly at the bottom line, whether it centives for R&D investment than those pro- vided for by the United States. been in the Senate. The basic questions was a good investment or not. Never- Private investment in R&D results in new are, Should we extend the R&D tax theless, it is very clear that technology medicines, medical technologies, cleaner credit and, second, should we make it was a driving force in the 1990s.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00046 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6193 There is extensive research showing offshore, resulting in a permanent loss as we can be in the world because that that tax credits are a very cost-effec- of technology advancements, loss of benefits the United States not only in tive way to promote research and de- jobs, and a loss of industrial innovation the short term, but very much in the velopment. The General Accounting Of- in the United States. Once R&D moves longer term. fice, the Bureau of Labor Statistics, offshore because of other countries giv- Investments by U.S. businesses in re- the Congressional Research Service, ing a tax comparative advantage, then search and development can prove very the National Bureau of Economic Re- what happens? Then companies tend to costly over time. Leading edge com- search, and many others have found manufacture in those same locations petitors in Europe and Japan continue significant evidence that the R&D and often use available labor in those to gain ground. credit stimulates additional domestic markets, rather than American work- To sum up, we are presented with a R&D spending by U.S. companies. Per- ers. Once you are in a location for a pe- great opportunity. What is it? That op- haps more importantly, the R&D in- riod of time, you are more likely to portunity is to make our current R&D vestment tax credit benefits American stay. You learn the procedures and the tax credit permanent—at least as much companies and American workers. ropes and you feel comfortable. The as we can under the constraints of the A full 75 percent of the R&D credit country starts to be comfortable with bill; second, we also have an oppor- dollars are used for salaries of employ- you and they start giving you more in- tunity to modify the tax credit to in- ees associated with R&D activities. centives to stay there. It starts to cas- clude the additions suggested by the These are good paying jobs. These are cade and go downhill. Senator from Washington that will not service industry jobs at the local I remember years ago, in Saudi Ara- make the credit even more meaningful, fast food store. These are very high bia, I was talking to officials there, and including the incremental changes in paying jobs. the big question was, Who is going to the credit rates and the addition of a Seventy-five percent of the R&D tax provide the technical advice in setting third credit option that is in this legis- credit dollars are used for salaried em- up a phone system in Saudi Arabia? Is lation. ployees associated with R&D activities. there going to be a big German com- Madam President, this is a no- R&D activity creates some of the most pany, such as Siemens, or an American brainer. I cannot, for the life of me, un- intellectual, stimulating, high-paying, firm? Which firm will provide the tech- derstand why this amendment won’t high-skilled jobs in the country, en- nological specifications for a telephone pass. That is not just a glib statement couraging individuals to pursue ad- system in Saudi Arabia? Well, guess that rolls easily off my tongue into the vanced science and math degrees in what happened. A U.S. company lost; Senate Chamber. I just think that if order to obtain these job opportunities. the big German company won. What is the tradeoff is between research and That clearly is a big plus for our econ- even more important about that? development on the one hand, and help- omy. They create more disposable in- Guess who built the telephone system? ing American companies with more in- come for employees which provides ad- You got it, the German company. centives to do more R&D on the other ditional indirect returns to the econ- In this case, I am talking generally hand, compared with the accelerating omy. about R&D going offshore. Once your reduction of the top rate or, in the al- There are ripple effects. Innovations foot is in the door offshore, there is a ternative, of the dividends proposal, we achieved through R&D make a com- strong likelihood that there are going have to make choices as to which is pany much more productive, enhances to be other benefits that will accrue to more likely to help this country get its competitiveness. Downstream com- those other countries, not to the more jobs in the short term and in the panies are also helped. Once a company United States. long term. develops a new product because of re- The timing of this proposal is very I think the answer to that question is search, in most cases, downstream important. There is new data compiled pretty easy and clear, and that answer companies get benefits as well—to say for R&D Magazine that projects that is by making the R&D tax credit per- nothing of the national security bene- U.S. companies spending on R&D will manent. So I argue very strongly in fits. The more our technology compa- be mostly flat this year, 2003. This favor of this legislation and this nies engage in research and develop- makes for flat growth for the second amendment offered by the Senator ment, the more likely it is that we are year in a row. This compares with 2001, from Washington. She is on the right going to have technological advances when R&D spending grew by 5 percent track. I think we should pay attention and developments that help our na- over the previous year. Investment in to what she says. She is from Wash- tional security. That, too, is a given. R&D is not a function of simply eco- ington. The State of Washington is the There is no doubt that if R&D is nomic uncertainty. Businesses often home to a lot of high-tech companies. going to decrease generally, national invest less in R&D because of the ex- The PRESIDING OFFICER. The time security is also going to decline. Did pense and the long-term planning re- of the Senator has expired. you know that the United States lags quirements and the difficulty of cap- Mr. BAUCUS. I thank the Chair and far behind other countries in giving in- turing all or some of the returns from I thank my good friend from Wash- centives to businesses to invest within the investments. ington. its own borders? Most of our trading Many economists generally agree The PRESIDING OFFICER. The Sen- partners offer very generous tax and that without government support, pri- ator from Iowa is recognized. nontax incentives to encourage compa- vate sector investment in R&D often Mr. GRASSLEY. Madam President, nies in their countries to invest in falls short of the optimal level of first of all, I think it is pretty unani- R&D. These incentives lower the cost spending necessary to provide max- mous in this body about the need for of investing in R&D outside of the imum benefits to the U.S. economy. the R&D tax credit, and I think it en- United States and give companies re- There has to be some government as- joys pretty broad support. I suppose it ceiving these benefits outside the sistance. I might add that other coun- is not a case of ‘‘if’’ we will do it; it is United States a competitive advantage tries certainly provide a lot more gov- a case of ‘‘when’’ and exactly how. I over U.S. companies that don’t benefit ernment assistance to their companies would say there is probably not much from similar incentives. than we Americans do for our own disagreement within this body yet. I In 2000, the United States ranked U.S.-based companies—at least in the have visited with my colleagues so ninth behind other nations, in terms of area of R&D. much during this debate about the pur- the amount of tax credit allowances for One can debate the degree to which poses of the legislation and the balance business R&D spending at large manu- there should be any government sup- that we brought to this between invest- facturing firms. Countries that provide port to the private sector. I believe ment and enhancing consumer spend- more generous R&D tax benefits than there should be support in some cases. ing, and between those things that are the United States include Spain, Can- In this case, when it comes to R&D, it tax reductions versus tax expenditures, ada, Portugal, Austria, Australia, the is clear that we want to maintain pro- it is this balance that I want to pre- Netherlands, France, and Korea. ductivity advantages, technological ad- serve in this legislation. This disparity encourages U.S. com- vantages, and good jobs for American Every attempt we have had, as well panies to locate more R&D activities workers. We want to be as competitive intended as it is, obviously, takes away

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00047 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6194 CONGRESSIONAL RECORD — SENATE May 14, 2003 from the job creation aspects of our tax credit is very important, as it encour- are talking about. I think we can eas- reduction. It is to do something special ages higher levels of technology devel- ily look at history and say corpora- and, in many cases, is worthy, but it opment and innovation which brings tions have done a better job of that be- detracts from the overall approach to about greater productivity, it does not cause they know what products and our legislation. So this is another ex- help small businesses that will provide services can be created in the market- ample where I must rise in opposition so many new jobs for the economy place and have used this incentive to to an amendment, but not because of under our underlying legislation. do that. the good intent or because I have a dis- I ask the Senator from Washington The second point I wish to make is agreement with the amendment, but to think about whether or not she has that small businesses can take advan- because of how it is accomplished. And checked with organizations or their tax tage of this credit. In fact, in the past most of that is on the side of where representatives that support R&D cred- decade we saw a lot of increases in pro- they take the money to pay for the its. I think the last thing they would ductivity by large corporations because proposal in this amendment, or any want to happen is for the extension to they were able to take advantage of re- other amendment that we have had be- lose at this time. If they want their ex- search and development and new tech- fore us. tension—and I am sure they do, and I nologies, and they were able to deploy I am very confident that we will ex- have indicated a willingness to work on that, while small businesses that had tend the R&D credit this year. I call this—they should be working with the less flexibility, not as much revenue, the attention of my colleagues to the Finance Committee and not against it and had smaller operations had a much fact that the President has proposed as we try to accomplish this goal. harder time making those productivity extending it in his budget. I note that Right now, I have to consider this improvements. the extension is paid for in this amend- amendment counterproductive in that I have heard from small businesses ment by eliminating partial exclusion it slashes job-creating provisions to throughout our State that said: I am a of dividends, and this exclusion of divi- give generous tax breaks to large cor- subcontractor, or I do business with dends is meant to encourage the in- porations to do research and develop- some of the larger companies in the vestment we are talking about here. ment. Many may ask: Why do rich cor- State, but our computer systems and Obviously, the amendment on R&D is porations need a tax break to do some- our software do not communicate. The a tax incentive to encourage R&D, and thing that is essential to their business way I now have to talk to my cus- it takes a lot of R&D to get jobs, but it anyway? tomers and providers of service I work is a very indirect way of creating jobs, As I indicated, I do support the R&D with throughout the State is being whereas we believe the dividend exclu- tax credit, but I also support, more im- challenged by new systems and oper- sion, at least if it were fully imple- portantly and more eminently, the pro- ations, and I need to upgrade and move mented the way the President pro- visions of this bill which are more forward. So small businesses, to main- posed, and I know our underlying legis- broad based in helping to create jobs tain their competitive edge, also need lation does not do that, but at least the and doing it in a balanced way, not in help in the research and development way the President proposed, according the targeted way of this amendment. area. to economists, would create 400,000 new There is nothing wrong with the Oftentimes it is the small business jobs, besides making our capital costs amendment. It is just the wrong time that is created prior to becoming a for our industry much more competi- and wrong place. I ask my colleagues large organization. As I said, the com- tive with those of our competition to vote against it. panies that grow from 10 jobs and take internationally because our cost of The PRESIDING OFFICER. The Sen- advantage of R&D tax credits and then capital is as high as that of any nation ator from Washington. grow to 1,000 jobs are the very compa- with which we compete. Ms. CANTWELL. I thank the Chair. nies about which we are talking. So If we were to adopt the President’s Madam President, I have the utmost both small and large companies will program, it would put us in the middle respect for the Senator from Iowa and benefit. of the advanced nations for cost of cap- his comments about the R&D tax cred- The third point is that this is about ital and make us much more competi- it amendment and his great work on priorities. In an information economy, tive. trying to put together a package to it is very important for us to keep our This detracts from the investment ef- bring before the Senate. It is clear that deficits down and to get access to cap- forts in our legislation which is where my colleague from Iowa has had a ital. the money is being taken to pay for the tough challenge working with a variety Think about it. In the industrial age, R&D amendment. of people, and I am sure he will face an when we were making automobiles, Mr. I say to the Senator from Wash- even tougher challenge working in con- Ford said: Just give me the hands. I do ington that I look forward to working ference with the House of Representa- not even need the brain that goes with with her at another time—not this tives and the White House on their pri- it. time—to extend the R&D credit down orities. Why? Because it was about a manu- the road. I respect his commitment to working facturing process, that was not nec- There is another point that should be on the R&D tax credit expansion or essarily about the worker, and the in- made about the R&D credit, and that is permanency and I take him at his word crease in productivity. The process and that it does not benefit all businesses that he is very earnest and will work system had been set in place. and taxpayers equally or apply as towards this. Well, the information age is just the broadly as do the provisions of this un- I guess the reason we are bringing opposite of that. It is all about new derlying growth bill that I have been this up today is that we do have a fun- ideas in a global economy where infor- trying to demonstrate is a well-bal- damental difference about how to move mation flows quickly and competition anced bill to create jobs. It is well bal- forward with the economy and where is created quickly, and whether we are anced between larger businesses and the White House is on this proposal. going to maintain our competitive smaller businesses, particularly where What I am trying to say is not exten- edge by making the right levels of R&D it brings equity between a corporation sion of R&D, but permanent R&D tax investment. form of business and individual propri- credits are a better economic stimulus Actually, the U.S. economy is so etorship form of business. It does that than what the current underlying pro- strong in biotechnology, in pharma- by eliminating the bias in favor of cor- posal gives to the American public. ceuticals, and in software. Why? Be- porations that is in our present tax Let’s think about it: A dividend tax cause we make the investment in R&D system. cut that would give some money back that keeps that technological advan- I look at R&D credit as not bene- to investors who may or may not rein- tage in an information age. fiting all businesses equally as our un- vest that versus companies that have So while some of my colleagues, derlying bill does. The R&D credit pro- proven they have taken the R&D tax argue that a dividend tax break is an vides a benefit to a limited number of credit and turned that into new prod- issue of fairness, I say there are lots of large corporations in certain industrial ucts and services, and have hired peo- things about our Tax Code that I do sectors. While the purpose of the R&D ple to, in fact, do the R&D which we not think are particularly fair. But

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00048 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6195 given the 7 percent unemployment rate Mr. REID. I ask unanimous consent amount of the standard deduction al- in my State of Washington, with over 2 that the pending amendment be tempo- lowed single taxpayers, making mar- million jobs lost and no sight of what rarily set aside and ask that the Sen- riage an advantage. we are going to do to stimulate the ator from Vermont be recognized to The second provision increased the economy that will create jobs, it is im- offer an amendment. size of the 15 percent income tax rate perative to make this tax credit per- The PRESIDING OFFICER. Is there bracket for a married couple to twice manent now. objection? Without objection, it is so the size of the corresponding bracket My colleague has offered to look at ordered. for a single taxpayer. this at another time. But the issue is, The Senator from Vermont is recog- The third provision addressed the are we going to make it permanent at nized. marriage penalty in earned income tax another time? In an information age AMENDMENT NO. 587 credit, and provided for a larger credit this is the best thing we could do for Mr. JEFFORDS. I send an amend- for married couples. All three of these companies that are spending almost 30 ment to the desk and ask for its imme- provisions were phased in gradually, percent of their company’s overall ex- diate consideration. not becoming fully effective until 2008 penses in R&D. An information econ- The PRESIDING OFFICER. The or 2009. omy means so many new products and clerk will report. The bill under consideration today services are going to come into cre- The legislative clerk read as follows: accelerates the scheduled phase-in of two of the three marriage penalty re- ativity by thousands of ideas floating The Senator from Vermont [Mr. JEFFORDS] around, things that we never even proposes an amendment numbered 587. lief provisions we adopted in 2001. The standard deduction marriage imagined before—who thought 20 years Mr. JEFFORDS. Madam President, I penalty relief is accelerated to 2003. ago we were going to be buying our ask unanimous consent that the read- And the expansion of the 15 percent books online or communicating with ing of the amendment be dispensed rate bracket for married couples is global media through the Internet? But with. similarly accelerated to 2003. those are the products and services The PRESIDING OFFICER. Without There is no acceleration, however, of that have been created. The good news objection, it is so ordered. the marriage penalty relief for tax- is we are at the infancy of this infor- The amendment is as follows: payers who claim the earned income mation age. So let’s take advantage of (Purpose: To accelerate the elimination of tax credit. The earned income tax cred- that. Let’s harness that information the marriage penalty in the earned income it, the EITC, provides an income sup- age economy with one of the best tools credit) plement for low-income workers. we have to encourage them, and that is After section 107, insert the following: It is one of the Nation’s most effec- make permanent the R&D tax credits SEC. 107A. ACCELERATION OF MARRIAGE PEN- tive anti-poverty programs. It was the so those products, those services, those ALTY RELIEF FOR EARNED INCOME CREDIT. brainchild of the late Senator Russell job-creating activities, will take place Long, whose death we sadly recognized in our economy. (a) IN GENERAL.—Section 32(b)(2)(B) (relat- ing to joint returns) is amended by striking yesterday, who characterized it as a If we asked economists, or asked ‘‘‘increased by—’’ and all that follows and in- ‘‘work bonus’’ and Senator Long called businesspeople, sure, they would like serting ‘‘increased by $3,000.’’. it one of his proudest accomplish- both. I am sure there are people who (b) INFLATION ADJUSTMENT.—Clause (ii) of ments. would say: Give us the dividend and section 32( j)(1)(B) (relating to inflation ad- However, the way the EITC is pres- give us the R&D tax credit. But ask justments) is amended to read as follows: ently structured can result in high them to prioritize, and I have no doubt ‘‘(ii) in the case of the $3,000 amount in marriage penalties. Two single, low-in- subsection (b)(2)(B), by substituting ‘cal- they would say the R&D tax credit is come workers may be entitled to a more important because they know it endar year 2003’ for ‘calendar year 1992’ in subparagraph (B) of such section 1.’’. much smaller EITC from their com- will give them certainty and predict- (c) CONFORMING AMENDMENT.—Section bined incomes when they get married ability in a time and age where re- 303(i)(2) of the Economic Growth and Tax Re- than what they would have gotten sep- search and development is going to be lief Reconciliation Act of 2001 is amended by arately had they stayed single. the way for us to continue the produc- striking ‘‘2004’’ and inserting ‘‘2003’’. Take, for example, a man and a tivity. (d) ADJUSTMENT OF HIGHEST INDIVIDUAL IN- woman, each with an income of $15,000, Make no mistake, that opportunity COME TAX RATE.—In lieu of the rate specified and each with one child. If they are for taxable years beginning during calendar for productivity is great. We had great single, each can claim an EITC benefit increases during the industrial age—a year 2003 and thereafter in the last column of the table contained in section 1(i)(2) of the of roughly $2,750, a total of $5,500. 1 constant 3 ⁄2, 4, 5 percent economic Internal Revenue Code of 1986, as amended However, if they get married and growth in the last decade. If we harness by section 102(a), the Secretary of the Treas- combine their incomes, the EITC that the ability for new products and serv- ury shall adjust such rate for 1 or more of they can claim is only $1,200. This is a ices by making the right level of in- such taxable years to provide such revenues marriage penalty of $4,300, 14 percent of vestment in research and development, as are necessary to equal the loss in revenues their combined income. we can have that kind of productivity which would result in the enactment of the Think of a young couple who finds increase and we can have that kind of amendments made by subsections (a), (b), they have an unexpected pregnancy. If GDP. and (c) of this section. they get married, they have to pay an (e) EFFECTIVE DATES.— For all of us here, we want to get (1) IN GENERAL.—Except as provided in additional $4,300 in taxes. That is not a back to that. We want to get back to paragraph (2), the amendments made by this very good situation. having families who have jobs and section shall apply to taxable years begin- The 2001 tax bill addresses this prob- communities that are healthy and a ning after December 31, 2002. lem by increasing the EITC allowed to government that can own up to its re- (2) CONFORMING AMENDMENT.—The amend- married low-income taxpayers. But sponsibilities in the future for Social ment made by subsection (c) shall take ef- this provision is gradually phased-in Security and Medicare. So let’s make fect on January 1, 2003. and does not become fully effective the investment now. Mr. JEFFORDS. Madam President, until 2008. So we have a gap. This is about making a priority when we passed the last big tax pack- My amendment calls for acceleration statement today. It is about saying age in 2001, we included in the bill a of the phase-in of the EITC marriage that R&D tax credit has a higher pri- title called ‘‘Marriage Penalty Relief.’’ penalty relief. It will benefit working ority and ranking over some of the pro- That title had three sections aimed families with incomes between $15,000 posals that are in this bill, and that it at easing the burden faced by tax- and $37,000. will benefit both small and large com- payers, who find themselves paying I propose to pay for this amendment panies, and ultimately will benefit higher tax bills after they get married by paring back the reduction in the top many Americans by getting them em- than what they would have paid if they rate in an amount sufficient to pay for ployed. had stayed single. this amendment. This would mean a I yield the floor. One of these provisions increased the relatively modest decrease in the re- The PRESIDING OFFICER. The standard deduction for married tax- duction in that top rate. We believe it Democratic whip is recognized. payers, so that it would equal twice the is less than one-quarter of 1 percent.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00049 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6196 CONGRESSIONAL RECORD — SENATE May 14, 2003 I have been involved in trying to fix Hearing no objection, the Senator with the House, and the Chair be au- the problems of the marriage penalty from Kentucky is recognized. thorized to appoint conferees on the since the 1970s, when I co-sponsored the Mr. BUNNING. Madam President, I part of the Senate with a ratio of 3 to first bill with Congresswomen will shortly offer an amendment to the 2. Finally, I ask consent no points of Millicent Fenwick, who was a pioneer pending bill. We need to have just a lit- order be waived by this agreement. in fighting this problem. I would like tle time for consideration of this Mr. REID. Reserving the right to ob- to remember her. amendment. It is not complicated. It is ject, Mr. President. If we are going to accelerate mar- very straightforward and to the point. The PRESIDING OFFICER. The Sen- riage penalty relief, we should do it for We have a need to have our majority ator from Nevada. the poorest of the poor. These people leader show up on the floor to make a Mr. REID. As I said earlier this really feet the effects of the marriage statement before I offer the amend- morning, we have two of the most ex- penalty. ment. Therefore, I suggest the absence perienced Senators that we have in the In testimony before the Senate Fi- of a quorum. Senate managing this bill. We would nance Committee two years ago, a rep- The PRESIDING OFFICER. The not be at the point we are today but for resentative from H. and R. Block, clerk will call the roll. the good work of the two Senators, the which prepares returns for many low- The bill clerk proceeded to call the Senator from Iowa and the Senator income taxpayers, expressed the opin- roll. from Montana. It doesn’t matter how ion that the EITC marriage penalty Mr. FRIST. Mr. President, I ask you feel about the underlying bill, the had a real detrimental effect on the unanimous consent the order for the work that has been done on the floor choices of low-income taxpayers. quorum call be rescinded. by these two men here today has been In other words, it deters marriage The PRESIDING OFFICER (Mr. outstanding, and that is why we are and adversely affects family life. ALEXANDER). Without objection, it is so able to enter into this agreement. The EITC marriage penalty relief is ordered. There is no objection on this side. also the most effective economic stim- UNANIMOUS CONSENT AGREEMENT The PRESIDING OFFICER. Without ulus of any of the marriage penalty re- Mr. FRIST. Mr. President, I ask objection, it is so ordered. lief provisions. It is targeted at low- unanimous consent that following my Mr. FRIST. Mr. President, I ask and middle-income workers, who are remarks, Senator BUNNING be recog- unanimous consent that immediately most likely to spend any additional nized to offer an amendment for him- following passage of H.R. 2, the Senate funds. self, Senator MCCONNELL, and others, proceed to Calendar No. 86, H.R. 1298, A considerable amount of this bill is regarding taxation of Social Security the Global AIDS bill. I further ask targeted to help the very richest tax- benefits; provided further that there be unanimous consent that only relevant payers. Roughly $35 billion goes to- 1 hour equally divided in the usual first-degree amendments be in order; wards reduction of the top income tax form. I further ask consent that fol- further, that only second-degree bracket, which doesn’t kick in until a lowing the conclusion of time, the amendments which are relevant to the couple’s income is over $300,000. amendments be set aside and the Sen- first-degree amendment to which they Another $80 billion goes toward the ate proceed to vote in relation to the are offered, when offered, be in order; exclusion for dividends, which will not Bunning amendment, to be followed by that upon disposition of all amend- affect most taxpayers. In my state of a vote in relation to the Dorgan ments the bill, as amended, if amended, Vermont, about seventy percent of the amendment, No. 556, at a time deter- be read a third time and the Senate taxpayers have no dividend income. mined by the majority leader, after then vote on passage of the bill with- My amendment is modest. It costs consultation with the Democratic lead- out further intervening action or de- about $4 billion over several years. We er; further, that no amendments be in bate. can make room for this amendment in order to the amendments prior to the The PRESIDING OFFICER. Is there this bill. We should not overlook those votes. objection? who need help the most. The PRESIDING OFFICER. Is there Mr. REID. No objection. I urge my fellow senators to support objection? The PRESIDING OFFICER. Without this amendment, and I ask for the yeas Mr. REID. No objection. objection, it is so ordered. and nays. The PRESIDING OFFICER. Without Mr. FRIST. Mr. President, just to The PRESIDING OFFICER. Is there a objection, it is so ordered. summarize very quickly, let me restate sufficient second? Mr. FRIST. I ask unanimous consent what the assistant Democratic leader There is not a sufficient second. when the Senate resumes consideration said. A lot of discipline and organiza- Mr. BAUCUS. I ask for the yeas and at 9:15 of S. 1054, on Thursday, May 15, tion has taken us very successfully to nays on the amendment. that all time under the statutory limit this point. We encourage people who The PRESIDING OFFICER. Is there a be expired; I further ask consent that are going to be offering amendments sufficient second? the Senate then proceed to a series of At the moment, there is not a suffi- either tonight or tomorrow to report stacked votes on or in relation to the cient second. that and discuss that with the two Mr. BAUCUS. Madam President, I pending amendments in the order of- managers of the bill. ask for the yeas and nays on the fered, beginning with the Bunning At 9:15 tomorrow morning, all time amendment. amendment, provided that there be 2 will have been exhausted and we will The PRESIDING OFFICER. Is there a minutes equally divided for closing re- start at 9:15 with our voting on what- sufficient second? marks prior to vote in relation to any ever pending amendments there are There is a sufficient second. of the amendments pending from based on what has been carried out so The yeas and nays were ordered. Wednesday’s session. far today and tonight. We will be look- The PRESIDING OFFICER. The I further ask consent that following ing at those amendments starting at Democratic whip is recognized. the disposition of the pending amend- 9:15 in the morning. If additional Mr. REID. It is my understanding the ments and any other offered amend- amendments arise, they will be consid- Senator has completed debate on this ments, the bill then be read a third ered after the disposition of all of the amendment. time, the Senate then proceed to the pending amendments. We will have I recognize the Senator from Ken- consideration of H.R. 2, all after the final consideration and passage of this tucky, who, as the gentleman he is, enacting clause be stricken and the bill tomorrow at the conclusion of that very graciously allowed the Senator text of S. 1054, as amended, if amended, sequence of votes. from Vermont to go first. The Senator be inserted in lieu thereof, the bill then Immediately following passage, we from Vermont had been waiting for a be read a third time and the Senate will go to the global HIV–AIDS bill, long time. We appreciate the courtesy then proceed to a vote on passage of and I intend to complete that bill this of the Senator from Kentucky. the bill, with no intervening action or week as well. The PRESIDING OFFICER. Is there debate. I further ask consent that fol- Thus, tonight we expect no further objection to setting aside the pending lowing that vote, the Senate insist on rollcall votes and our voting will begin amendment? its amendment, request a conference at 9:15 sharp tomorrow morning.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00050 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6197 The PRESIDING OFFICER. The Sen- system. This tax was unfair to seniors we get to this bill before the end of this ator from Nevada. back in 1993, and it certainly is unfair legislative calendar. Mr. REID. One area of clarification: I today. I yield the floor. am confident there is no problem. We The amendment I am offering as a The PRESIDING OFFICER. The Sen- want to make sure motions to waive sense of the Senate allows the Finance ator from Kentucky. would also be in order on these amend- Committee to pass legislation by July Mr. MCCONNELL. Mr. President, I ments that are pending. 31, 2003, which repeals this unfair tax to commend my friend and colleague from Mr. FRIST. Mr. President, we under- our seniors and requires the Senate to Kentucky, Senator BUNNING, for his ex- stand that. That is correct. act on this legislation no later than cellent amendment. The PRESIDING OFFICER. Under September 30, 2003. What we are hearing from the other the previous order, the Senator from I am offering this amendment to side of the aisle is that they do not Kentucky is recognized. counter an amendment that would de- want the dividend exclusion, and they stroy the very bill that is before us. An AMENDMENT NO. 589 want to finally address an issue they unwise amendment by the Senator Mr. BUNNING. Mr. President, I send created 10 years ago, which is this addi- from North Dakota would repeal this an amendment to the desk. tional tax on Social Security recipi- tax and thus reduce the amount of tax The PRESIDING OFFICER. The ents. But they are saying, you can’t reduction for our country and for our clerk will report. have both. And, as the Senator from citizens. The assistant legislative clerk read Kentucky, Mr. BUNNING, has pointed I want to try to put this in a little out, most seniors can benefit from as follows: perspective for the American people, The Senator from Kentucky [Mr. both. Obviously, they all benefit from for my fellow Senators, and you, Mr. Social Security, and they would like to BUNNING], for himself and Mr. MCCON- President. NELL, proposes an amendment num- not have this Clinton tax on Social Se- In the overall aspects of the budget curity continued any longer; second, bered 589. bill, the total amount as far as this bill Mr. BUNNING. Mr. President, I ask seniors account for only 15 percent of is concerned is a reduction of $350 bil- the total income in America, but they unanimous consent that reading of the lion in tax reductions. Our economy is get 50 percent of the dividend income. amendment be dispensed with. a $10 trillion-per-year economy. How The PRESIDING OFFICER. Without So I gather what Senator DORGAN is minuscule is the tax reduction? If you saying is, we are going to take away objection, it is so ordered. look at the overall bill as a 10-year bill, the dividend exclusion from seniors in The amendment is as follows: and the overall economy as a 10-year order to finally reduce the Social Secu- (Purpose: To amend the Internal Revenue economy, we are looking at about $120 rity tax which we put on 10 years ago. Code of 1986 to repeal the 1993 income tax trillion, and we are talking about $350 What the Senator from Kentucky is increase on Social Security benefits) billion in that $120 trillion economy as saying is: We want to do both. And we At the appropriate place, insert the fol- a tax reduction. lowing: If the amendment of the Senator ought to do both. We should never have levied this Social Security tax in the SENSE OF THE SENATE ON REPEALING THE 1993 from North Dakota is agreed to, we TAX HIKE ON SOCIAL SECURITY BENEFITS SEC- will have no tax reduction, not even a first place, 10 years ago, for which nei- TION . dividend tax reduction, as minuscule as ther of us voted. And we ought to now SECTION . it is, and not any of the advanced tax do the dividend exclusion as close to (a) FINDINGS.— reductions we passed in the year 2001. the President’s suggested manner of The 1993 tax on Social Security benefits If we want to take action to create doing that as possible. was imposed as part of President Clinton’s jobs, and if we want to do it as quickly June could be a pretty good month agenda to raise taxes; as we can, my amendment allows us to for seniors around here. If we could get The original 1993 tax hike on Social Secu- the dividend exclusion through, get rid rity benefits was to raise income taxes on vote on the reduction in the Social Se- curity tax from 85 percent to 50 percent of the Social Security tax, and begin to Social Security retirees with as little as address prescription drugs, which is on $25,000 of income; later on—after we get this job-creating Repeated efforts to repeal the 1993 tax hike incentive bill into conference, out of the agenda of the majority leader for on Social Security benefits have failed; and the Senate, and back to the floor of the June, I say to my friend and colleague Seniors rely on Social Security benefits as Senate for a final vote. from Kentucky, we would have a pretty well as dividend income to fund their retire- I want you to know that seniors age good month around here for seniors, ment and they should have taxes reduced on 65 and older depend on taxable divi- pretty soon, wouldn’t we? both sources of income: dends. These are real Americans who Mr. BUNNING. Yes, sir. (b) Sense of the Senate— need this money because they are on Mr. MCCONNELL. So this Bunning It is the Sense of the Senate that the Sen- fixed incomes. They have to scramble amendment makes it clear that we ate Finance Committee should report out would like to act on the repeal of the the Social Security Benefits Tax Relief Act and scrimp to have enough dollars to of 2003, S. 514, to repeal the tax on seniors live on fixed incomes. This will allow Social Security tax hike of 1993, and we not later than July 31, 2003, and the Senate just a portion of that dividend income will do that in the very near future. shall consider such bill not later than Sep- to be tax free. Seventy-one percent of Mr. BUNNING. Will the Senator tember 30, 2003 in a manner consistent with all taxable dividends go to Americans yield? the preservation of the Medicare Trust Fund. who are over age 55. With the rising Mr. MCCONNELL. I yield to my Mr. BUNNING. Mr. President, I am cost of prescription drugs, seniors de- friend from Kentucky. offering an amendment as a sense of pend on this income from dividends. If Mr. BUNNING. As the Senator the Senate on the Social Security tax; we can make just a little bit of it tax knows, I offered this very same amend- that the 85-percent tax repeal be set at free, that will be a big help for those ment on the budget bill to repeal the a certain time during the year 2003 and senior citizens—15 percent of seniors’ Social Security tax from 85 percent to final consideration of the bill be no total income, but 50 percent of dividend 50 percent, and the very same people later than September 30, 2003. I want to income in this country comes to those who would support that today voted bring the Senate up to date on this spe- senior citizens. unanimously against it on the budget cific tax. Under the President’s package, 99.8 bill. Prior to 1993, seniors were taxed on 50 million seniors would have saved $936 a So the inconsistency that the Sen- percent of their Social Security bene- year. That was the President’s pro- ator from North Dakota shows today is fits if their incomes were above a cer- posal. We cut that more than in half. something I have a very big problem tain level. This money went back into I just think it is a wrongheaded way understanding. If you are for it today, the Social Security System. In 1993, to approach the reduction of this omi- and you want to take these away from Congress passed a provision requiring nous tax on senior citizens, particu- seniors, and you also want to take tax that 85 percent of a senior’s Social Se- larly those who definitely have no away from seniors, you ought to have curity benefits be taxed if certain in- other income except Social Security. been consistent and voted to take it come levels were met. This additional I hope the Senate will consider this away during the budget resolution de- money went back into the Medicare as a sense of the Senate to make sure bate we had on the floor.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00051 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6198 CONGRESSIONAL RECORD — SENATE May 14, 2003 I know this Senator voted with me ments to the child tax credit. I will The PRESIDING OFFICER. The Sen- on the budget resolution when we tried speak on it very briefly. ator from Montana. to repeal it. And I hope we are able to I think it is one of the most valuable Mr. BURNS. Mr. President, I ask get this amendment accepted. provisions. I thank the chairman of the unanimous consent that the amend- Mr. MCCONNELL. I know the Sen- Finance Committee—while I see he is ment offered by Senator BUNNING be ator from Kentucky agrees with me still in the Chamber—for accepting one laid aside. that we ought to do all three. We ought of Senator LINCOLN’s amendments on The PRESIDING OFFICER. Is there to get rid of this Clinton Social Secu- the child tax credit. It is a particularly objection? rity tax. We ought to do a significant welcome addition. Without objection, it is so ordered. dividend exclusion that is, to the max- I think common sense tells us that if AMENDMENT NO. 593 we put money in the hands of people imum extent possible, permitted under (Purpose: To amend the Internal Revenue our overall ceiling in the growth pack- who will indeed spend it, and will spend Code of 1986 to allow the expensing of age. And we ought to begin to address it on clothes and kitchen utensils, and broadband Internet access expenditures, prescription drugs, which the leader all kinds of other items, there is a and for other purposes) has indicated we are going to do in stimulative effect. Mr. BURNS. Mr. President, I rise But quite apart from that, almost June. If we do those three things, I today to offer an amendment to this half of the benefits of this child tax would say we are well on the way to bill, and I ask for its immediate consid- credit go to families who make less eration. providing the kinds of relief for sen- than $50,000. In the State that I rep- iors—both on the tax side and on the The PRESIDING OFFICER. The resent—this Senator represents the clerk will report. prescription drug side—that they rich- State of West Virginia—only 20 percent ly deserve, that we have talked about The assistant legislative clerk read of the people make more than $50,000 a as follows: for entirely too long around here and year. So this is very welcome. The Senator from Montana [Mr. BURNS], have never done anything about. The bill we are looking at, what is in So let me conclude by commending for himself, Mr. ROCKEFELLER, Mr. BAUCUS, the package, makes very important Mrs. CLINTON, and Mr. JOHNSON, proposes an my friend and colleague from Ken- improvements to the child tax credit. tucky for an excellent amendment. I amendment numbered 593. Basically, it increases the value of the Mr. BURNS. Mr. President, I ask hope it will be approved overwhelm- credit from $600 to $1,000, which is real unanimous consent that reading of the ingly. I thank him for his continuing money, as they say, for real people, amendment be dispensed with. contribution to this whole Social Secu- who need it and deserve it. rity debate. The Senator from Ken- I was happy that we did this. I was The PRESIDING OFFICER. Without tucky, Mr. BUNNING, was the chairman grateful that it was accepted by the Fi- objection, it is so ordered. of the Social Security Subcommittee nance Committee chairman. It is going (The amendment is printed in today’s of the House Ways and Means Com- to have a big effect. RECORD under ‘‘Text of Amendments.’’) mittee and is now on the Senate Fi- I will say this: Refundability will go Mr. BURNS. Mr. President, I come to nance Committee, and is one of the from 10 percent to 15 percent of earn- the floor today with an amendment real experts on Social Security in ings above $10,500. That means families that is offered by Senator ROCKE- America. can benefit from this bill more than FELLER and myself that provides some When Senator BUNNING talks about otherwise would have been the case. On incentives to accelerate the deploy- Social Security, we all listen, and once the other hand, the bill still does not ment of broadband high-speed Internet again he has proposed an excellent idea do anything—and I have to say this in access across the country. There are which I fully support. I thank him and fairness—for 72,000 kids who do not other cosponsors of the amendment. commend him for his outstanding qualify for any child tax credit in West My colleague from Montana, Senator work. Virginia because their parents do not BAUCUS, is a cosponsor. Senators CLIN- Mr. President, I yield the floor. have enough income to qualify on a TON, KENNEDY, and JOHNSON of South The PRESIDING OFFICER. Who low-income basis. Dakota also are cosponsors. yields time? But all things being equal, as they Broadband has always been of inter- The Senator from Iowa. rarely are in this life, one has to take est to both Senator ROCKEFELLER and Mr. GRASSLEY. Mr. President, I what one can work out in the demo- myself. Both of us serve on the Com- think the Democrats have the next op- cratic process. And the Finance chair- merce Committee. We have worked on portunity. man was extremely fair and helpful. this a lot. We both represent States The PRESIDING OFFICER. The Sen- Obviously, the Senator from Arkansas that have quite a lot of rural outdoors. ator from Iowa has the floor. was outstanding in her leadership on What this amendment does is affords Mr. GRASSLEY. I yield the floor. these matters. tax incentives for the buildout of The PRESIDING OFFICER. The Sen- I am proud to a be a cosponsor of the broadband. Although many urban and ator from Montana. amendment that Senator LINCOLN of- suburban areas now have access to Mr. BAUCUS. Mr. President, what is fered today that will expand the reach broadband connections, many rural the parliamentary situation? of the child tax credit to more of our areas across the country and, of course, The PRESIDING OFFICER. The Bun- nation’s poorest families. In my own in Montana do not. That places rural ning amendment is pending. There is 1 state, 27,000 more kids would qualify areas at a disadvantage in a number of hour evenly divided. for the child tax credit. This amend- ways. Mr. BAUCUS. I thank the Chair. ment would increase the amount of the Just for economics, why should folks Mr. President, I understand Senator child tax credit that can be refunded to in rural areas be denied access to the low income parents. Specifically a par- BUNNING yields back his time. Internet, or the Internet economy as Mr. BUNNING. Yes. ent would qualify for a child tax credit some would say, just because they live equal to 5% of earnings between $5,000 Mr. BAUCUS. Mr. President, I yield where they do to merchandise and to 10 minutes on the amendment to Sen- and $13,250. These folks whom we are helping are exchange ideas in this economy and ator ROCKEFELLER. at risk. That is important. And I am find some way to supplement their pri- The PRESIDING OFFICER. The Sen- very proud this is happening. I ask my mary income? We have people who ator from West Virginia. colleagues to support this amendment market their grain and livestock every Mr. ROCKEFELLER. Thank you, Mr. when it comes up for a vote on tomor- day through the commodity markets President, and I thank my friend and row. around the world. In terms of edu- leader from Montana. I thank the Presiding Officer and cational opportunities in rural areas, AMENDMENT NO. 578 yield the floor. why should a young person, just be- Mr. President, I rise to speak about The PRESIDING OFFICER. The Sen- cause he is born in Garfield County, an amendment which was offered ear- ator from Iowa. MT, be denied the same educational op- lier. I am particularly proud to be co- Mr. GRASSLEY. Mr. President, I portunities as those who were born and sponsoring, with Senator BLANCHE LIN- yield to the Senator from Montana raised in the more urban areas where COLN of Arkansas, and others, improve- whatever time he might consume. their curriculum is broadly taught.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00052 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6199 These young folks deserve the same op- And it sunsets after 1 year. The intent communications. I hope my colleagues portunity. Distance learning is an im- is not to provide a permanent benefit will support the Burns amendment. portant part of the education system in to the telecom sector but, rather, an I yield the floor. rural areas. Broadband is the tech- incentive to build out new infrastruc- Mr. KENNEDY. Mr. President, I urge nology that takes them those dis- ture within a short period of time. the Senate to support this amendment tances. Think of the generation of business to accelerate broadband high-speed In the area of health care, I have 14 and our economic setup and the jobs Internet access across the country. The counties in Montana that do not have a and the job climate in that area in the widespread availability of broadband doctor. People receive their health care first year of deployment. It is a very technology is essential to maintaining from physician assistants and in other important amendment. Not only do we our technology leadership in the world. ways. We know from rural demo- deliver better and quicker services to The spread of the information revolu- graphics that the folks are getting rural America, but we put a lot of peo- tion to rural communities and under- older, so our health care for the elderly ple to work. served areas in our cities depends on is very important, and part of that is I hope more of our colleagues will affordable access to the Internet. For supplied by broadband technologies. join with Senator ROCKEFELLER and me too long, these regions have been un- Our amendment would create a tem- in supporting it, and I hope we can able to enter the information age be- porary tax incentive for providers in work with Senator GRASSLEY to in- cause of their location and the high the form of expensing, allowing an im- clude this in the jobs and growth pack- cost of making service available. One mediate deduction of a capital expendi- age. of our greatest challenges is to close ture in the first year of service rather Mr. President, I ask unanimous con- this growing economic gap in access to than depreciating that investment over sent to add as cosponsors of the amend- computers and the Internet. If we do time. In the case of the current genera- ment Senators BAUCUS, CLINTON, KEN- not act to close it now, the ‘‘digital di- tion broadband investments in rural NEDY, and JOHNSON. vide’’ will soon become an unaccept- and underserved areas, the bill would The PRESIDING OFFICER. Without able opportunity gap. allow a 50 percent expensing on the in- objection, it is so ordered. The broadband tax incentive is an vestment, with the rest to be depre- The Senator from West Virginia. important step in developing a na- tional broadband policy. The incentive ciated according to the normal depre- Mr. ROCKEFELLER. Mr. President, I has widespread support in Congress be- ciation schedules. And where the pro- thank the Chair. cause it goes to those who bring viders build out next generation I rise in support of the amendment broadband to places beyond the current broadband networks, which are typi- offered by Senator BURNS and a number of others. This is an amendment I have reach of the private sector. cally more expensive, the bill would Many of us joined our colleague, Sen- provide for 100 percent expensing in been working on for many years. At times it has had 75 cosponsors. It is one ator Moynihan, when he first intro- that year. duced legislation along these lines 3 Our amendment would have a tre- of those amendments that always years ago. Last year, the bill had 65 co- mendous impact on the economy. In comes up. Everybody knows it should sponsors from both sides of the aisle, get done and it never seems to. The an- fact, we know it would. For instance, and a companion bill in the House had swer to that is you keep trying. You Robert Crandall, an economist at the 227 cosponsors. Our colleagues clearly just keep trying. Brookings Institute, has estimated support this idea, and we hope that it For individuals, businesses, schools, that accelerated deployment of will be enacted. broadband would generate $500 billion libraries, hospitals, there is no end to In Massachusetts, I have seen how in economic growth annually. I think the need for this amendment. We did broadband has transformed the econ- we would all be delighted to have that the E-rate. The E-rate is still being omy of the entire Berkshire County re- happen. I believe we should take the done. But we all know we have moved gion in the western part of the State. steps to allow it to do so. This amend- past that. We need much faster tele- Like many rural areas across the Na- ment is a very important step in that communications now. tion, the Berkshires were not an area direction. What the Burns-Rockefeller broad- that could easily attract private in- This is an opportune time to take ad- band amendment does is it says to vestments in Internet access. But busi- vantage of such a provision. Currently broadband providers, if you will extend ness and government leaders worked South Korea and Japan are ahead of your networks to hard-to-reach, under- out an initiative called Berkshire Con- the United States in broadband deploy- served and/or rural areas, you will get nect, a partnership with Internet pro- ment. I believe it is extremely impor- a break on your taxes. As the distin- viders to build a multimillion-dollar tant that the United States avoid fall- guished Senator from Montana indi- network of microwave towers and ing behind in telecom and Internet cated, it also encourages a leapfrog to fiberoptic lines linking the county’s technology, and the financial incentive the next generation. It has two dif- villages and small cities with fast of the type provided by this legislation ferent categories of tax breaks depend- Internet access. will help us ensure that we will not. ing upon what generation of broadband That project put the Berkshires on a As we take a look at this issue, this you are dealing with. In any event, it is more equal footing with the rest of the means new technologies on the wired going to be faster than the DSL and global marketplace because the Inter- system but also on the wireless system. cable modem services most typical net helps to level the playing field be- It says technology neutral, which today. tween large and small businesses and means it allows the new technologies The best thing is to say that you rural and urban areas. I am confident that are being offered and the R&D don’t obviously get a tax credit unless that passage of the broadband tax in- work going on with new technologies, you make a whole lot of things happen centive will bring similar success sto- it allows those technologies to be de- in this amendment. There is nothing ries across the Nation for residents and ployed and taken advantage of. Just re- automatic about it. You have to make businesses. member, 50 percent expensing for in- an investment. You have to buy new Another prime broadband application vestments in rural and underserved equipment. You have to pay people to is telemedicine. A fascinating moment areas of current generation broadband install that new equipment. occurred in medicine 2 years ago when technologies. It provides 100 percent I am very pleased to join with my a surgeon in New York operated by re- expensing for the investments in the friend from Montana in what I think mote control on a patient in France next generation of broadband tech- can very well be described as the future using robot arms at the patient’s loca- nologies in rural areas. competitiveness of America. He men- tion, and the operation was successful. It is technology neutral. It makes no tioned South Korea and Japan. He is Broadband technology can enhance the difference if you are using a medium absolutely right. We all remember medical miracles, but it needs a very copper wire, coaxial cable, optical fiber what happened with the VCR. We had high bandwidth connection for those terrestrial wireless, satellite or some- it all, then all of a sudden we had none kinds of applications. You can’t per- thing else. If you deliver the threshold of it. We do not want this to happen in form remote-control surgery over a speeds, you are eligible for the benefit. the most important form of tele- narrowband connection.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00053 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6200 CONGRESSIONAL RECORD — SENATE May 14, 2003 Broadband’s potential is immense, a distribution and it is taxed on top of had significant input. I believe it will and I commend my colleagues from being taxed at the corporate level, they help make a significant economic im- Montana and West Virginia for their may realize it is not a very good in- pact. leadership. This is the kind of tax in- vestment. A lot of people buy growth When you step back and say, what centive we need, and I urge my col- stocks that pay very little, if any, in are we doing in the bill that will help leagues to support it. dividends because they don’t want to the economy, shake it up, improve it, The PRESIDING OFFICER. The Sen- go through this scenario. They don’t and create jobs, I believe the two ator from Iowa. want to pay capital gains. things I mentioned, in addition to the Mr. GRASSLEY. Mr. President, I The House at least said let’s tax cap- acceleration of rates, are the three yield to the Senator from Oklahoma ital gains and stock dividends equally. things that will positively create jobs, such time as he may consume. They reported out a bill and said let’s have a positive impact on the stock The PRESIDING OFFICER. The Sen- tax capital gains and stocks at 15 per- market, on wealth, investment, and ator from Oklahoma. cent; and for some lower incomes, will encourage people to make invest- Mr. NICKLES. I thank my friend and maybe lower than that, at 5 percent. ments, get money out of banks or CDs colleague from Iowa for his leadership That is a significant step in the right that are not paying any interest to and chairmanship of the committee. I direction. The President said let’s speak of and put it to work, help it cre- am going to briefly describe an amend- eliminate double taxation of dividends. ate jobs. I believe all three of these ment that Senator KYL and myself, The proposal we are going to be offer- provisions will do so. Senator GRASSLEY, Senator LOTT, and ing tomorrow says let’s do that. In I am speaking tonight before it is in- several others will be offering tomor- year 2003, let’s exclude 50 percent. In troduced because it looks as if all de- row to enhance the dividend portion of year 2004, 2005, and 2006—for the next 3 bate should be transpired on the this bill. The dividend portion that we years—let’s make it 100 percent. We amendments tonight because we are now have in the bill is for 10 years; $500 can do that. Then we sunset it. This is going to have significant votes tomor- per person would be excluded from tax- sunset after 4 years. If I am wrong and row. I thank my colleague again, the ation, plus for the first 5 years, an ad- the stock market doesn’t react posi- chairman of the committee, for his ditional 10 percent; in the second 5 tively—if it is not a positive thing, we work and cooperation, for his leader- years, an additional 20 percent on top will know it after 4 years. It makes ship on this bill, and for his support in of 500. sense to try it. The President has a helping us to try to come up with a I stated publicly that I think that proposal and many economists have more robust package that would create leaves a lot to be desired. So the said you should eliminate double tax- more jobs in the process. That is what amendment we will be offering tomor- ation of dividends, and this is a way of we are trying to do—have a jobs cre- row will enhance that, improve that. It doing it. We can do it. ation bill. I think by adopting this would say for all taxpayers, for divi- We will have a provision, also as part amendment tomorrow we will help im- dend exclusion, our effort is to elimi- of this amendment, to adopt the House prove it dramatically. nate double taxation of dividends. Un- provision dealing with expensing items. The PRESIDING OFFICER. The Sen- fortunately, we find ourselves pres- You might say, what does that mean? ator from Iowa is recognized. ently where we tax dividends more The present law is that a small busi- Mr. GRASSLEY. Mr. President, I ask than almost any other country in the ness that invests basically $200,000 or unanimous consent to set the pending world. Now we are, as a free enterprise, less per year can expense $25,000. The amendment aside. as capitalistic as anybody in the world, Finance Committee said let’s raise The PRESIDING OFFICER. Without but we tax the distribution of profits, that to $75,000 and allow people with a objection, it is so ordered. i.e., dividends from corporations, high- much greater income to qualify as a AMENDMENT NO. 594 er than almost anybody, i.e., dividends, small business. They said let’s triple (Purpose: To amend title XVIII of the Social higher than Great Britain, France, and that, up to $75,000, and we will do that Security Act to enhance beneficiary access Italy. Japan is basically tied with us. for 10 years. to quality health care services in rural We tax dividends at 35 percent of the The House said let’s try this, make it areas under the medicare program) corporate level and whatever the indi- $100,000, and do it for 5 years. In other Mr. GRASSLEY. Mr. President, I vidual taxpayer’s rate is. So if the tax- words, if a business wanted to write off send an amendment to the desk and payer is at 38.6, it is that amount plus 100 percent of their investments, up to ask for its immediate consideration. 35. So their tax is 73 percent; almost $100,000, they could do so if it is done in The PRESIDING OFFICER. The three-fourths of the distribution of the first 5 years. It doesn’t cost much clerk will report. profits is taxed. That makes no sense. over 10 years because it sunsets after 5 The assistant legislative clerk read Many people, including President years. Somebody might say we did that as follows: Jimmy Carter, said that is wrong and when we did the bonus depreciation The Senator from Iowa [Mr. GRASSLEY] it needs to be changed. I believe several and it generated positive economic in- proposes an amendment numbered 594. people—Democrats and Republicans— vestment. This is another way of en- Mr. GRASSLEY. Mr. President, I ask have said that is unfair and is too high couraging small business, and we in- unanimous consent that further read- of a tax and it needs to be fixed. Now crease the level up to $400,000 for this 5- ing of the amendment be dispensed we have a President who said we should year period. That is what the House with. fix it. There are different ways of doing has done. The House passed it. I think (The amendment is printed in today’s it. He is proposing that we exclude it there is wisdom there. Every once in a RECORD under ‘‘Text of Amendments.’’) from income for individuals. while, we can say they did something Mr. GRASSLEY. Mr. President, I put Unfortunately, the bill that came out right and we can emulate it. I think before you not a tax amendment, but I of the Finance Committee didn’t do they have a good provision. am addressing a funding crisis that af- that. It said let’s exclude the first $500 I used to be a small businessperson. I fects rural America. I am talking about for individuals plus 10 percent, then 20 owned a janitorial service, and I used the issue of Medicare. percent. I think we can do a lot more. to have a manufacturing company. I We have heard a lot about relief to I think we can do a lot better. If we do believe these provisions will create States and about Medicaid during this a lot better, we will have a much more jobs. So we are proposing in our debate, and legitimately so. But there positive impact on the stock market amendment that we adopt the House has been no discussion of the role Medi- and on the economy. When I say the expensing provision, the so-called sec- care plays in keeping our health care stock market, certainly I believe what tion 179. And they also have created a infrastructure strong in rural States we are proposing will have a significant new dividend proposal that will have a like mine. increase on the stock market—maybe 50-percent exclusion in 2003 and 100 per- Today, our rural health infrastruc- 10, 15, 20 percent. That is positive and cent in the years 2004, 2005, and 2006. ture is falling apart. Hospitals and real. Why would that be? If somebody I thank my friend and colleague, Sen- home health agencies in rural areas is investing in stock under present law ator KYL, and several other members, lose money on every Medicare patient and they own a company and they get Democrats and Republicans, who have they see. Services are being slashed

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00054 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6201 and staff are being cut, all to make My bill also provides assistance to Mr. BAUCUS. Yes. ends meet and keep the facility open— other rural health care providers, such AMENDMENT NO. 595 but not to keep it open with the qual- as ambulance services and home health Mr. HARKIN. Mr. President, I send ity of care that ought to be there, or to agencies which millions of seniors in an amendment to the desk. meet necessarily all the needs of the rural areas rely on every day. The PRESIDING OFFICER. The Providers in rural States, such as community. clerk will report. Medicare formulas penalize rural Iowa, practice some of the lowest cost, The bill clerk read as follows: physicians in 30 States by reducing highest quality medicine in the coun- their payments below those of their try. This is widely understood by re- The Senator from Iowa [Mr. HARKIN] pro- urban counterparts for the very same searchers, academics, and citizens of poses an amendment numbered 595. service. Small physician clinics, and those States, but it is not recognized Mr. HARKIN. Mr. President, I ask especially solo practitioners, who are by the impersonal formulas of Medi- unanimous consent that the reading of facing rising malpractice premiums on care. Medicare instead rewards pro- the amendment be dispensed with. top of the Medicare formula inequities viders in high-cost, inefficient States The PRESIDING OFFICER. Without are on the verge of closing up shop. My with bigger payments that have the objection, it is so ordered. amendment takes important steps to- perverse effect of incentivizing over- The amendment is as follows: ward correcting geographic disparities utilization of services and also poor (Purpose: To help rural health care providers that penalize rural health care pro- quality. and hospitals receive a fair reimbursement viders. My legislation is paid for not by tak- for services under Medicare by reducing I will summarize some of the key ing resources away from our growth tax cuts regarding dividends) provisions of the amendment. On hos- and jobs package, nor by taking money On page 281, between lines 2 and 3, insert pitals, we eliminate the disparity be- away from those high-cost States that the following: tween large urban hospitals and small I mentioned, but by other modifica- SEC. . FAIR REIMBURSEMENT FOR RURAL urban and rural hospitals by equalizing tions to the Medicare Program that HEALTH CARE PROVIDERS UNDER inpatient-based payment. The hospitals make good policy sense. MEDICARE. in my State and in other rural areas I want to emphasize that because (a) REDUCTION OF GEOGRAPHIC DISPARITY are paid 1.6 percent less on every dis- every other amendment we have had UNDER MEDICARE.— (1) IN GENERAL.—Subject to paragraph (3), charge. That is a $14 million loss every before the Senate today has taken the Secretary of Health and Human Services year in my State. money out of the tax package to spend shall promulgate the regulations described We received bipartisan support to someplace else. My amendment does in paragraph (2) by December 31, 2004 (unless temporarily end this inequity in the not affect the tax provisions of this legislation has been enacted having the ef- fiscal year 2003 omnibus appropriations legislation. fect of such regulations before the conclu- bill, but it is time to end this inequity This amendment represents a fair sion of the first session of the 108th Con- in a permanent way. and balanced approach to improving gress). We also revise the labor share of the equity in rural America. I urge my col- (2) REGULATIONS DESCRIBED.—The regula- wage index for inpatient hospitals. The leagues to support its adoption today. tions described in this paragraph are regula- wage index calculation is killing our tions that reduce the geographic disparity in For those of us from rural States, our payments under the medicare program under hospitals in rural areas. They have to doctors, hospitals, and whole commu- title XVIII of the Social Security Act (42 compete with larger hospitals in the nities are counting on us. U.S.C. 1395 et seq.) to health care providers big cities for the same small pool of I yield the floor. by— nurses and physicians. But because of The PRESIDING OFFICER. Who (A) equalizing urban and rural standard- the inequity in the wage index, these yields time? ized payment amounts under the medicare hospitals are not able to offer the kinds Mr. GRASSLEY. I yield such time as inpatient hospital prospective payment sys- of salaries and benefits that attract the Senator from Maine may consume. tem under section 1886(d)(3) of such Act (42 health care workers. This amendment Ms. COLLINS. Mr. President, I be- U.S.C. 1395ww(d)(3)); would reduce the labor share of the lieve we are about to have an agree- (B) improving the medicare incentive pay- ment program under section 1833(m) of such wage index from 71 percent to 62 per- ment on the order for proceeding, but I need to consult with my colleagues, so Act (42 U.S.C. 1395l(m)) to ensure that bonus cent. payments under such section are made on be- We strengthen and improve the Crit- I suggest the absence of a quorum. half of all eligible physicians; ical Access Hospital Program which The PRESIDING OFFICER. Who (C) providing fairness in the medicare dis- has been so successful in keeping open yields time for that purpose? proportionate share hospitals adjustment for the doors of some of our most remote Mr. GRASSLEY. The Senator from rural hospitals under section 1886(d)(5)(F) of hospitals. We also create a low volume Maine suggested the absence of a such Act (42 U.S.C. 1395ww(d)(5)(F)); adjustment for those small rural hos- quorum. (D) establishing a medicare inpatient hos- pitals that are not able to benefit from Ms. COLLINS. Mr. President, I ask pital bonus payment for low-volume hos- the Critical Access Hospital Program. that time be taken equally from both pitals under section 1886(d) of such Act (42 U.S.C. 1395ww(d)); These hospital corrections are not par- sides. The PRESIDING OFFICER. Is there (E) adjusting the medicare inpatient hos- tisan rhetoric. They are supported by pital prospective payment system wage the nonpartisan Medicare Payment Ad- objection? Mr. BAUCUS. Mr. President, under index to revise the labor-related share of visory Committee, by the CMS admin- the rules, as I understand them, the au- such index to account for 62 percent of such istrator in a recent letter to the House index under section 1886(d)(3)(E) of such Act thor of the amendment has control of Ways and Means Committee, and by 31 (42 U.S.C. 1395ww(d)(3)(E)); her time, which is 1 hour. bipartisan Members of the Senate rural (F) revising the physician fee schedule I ask unanimous consent that the wage index under section 1848(e)(1) of such health caucus. pending amendments be laid aside so For doctors, my amendment ends Act (42 U.S.C. 1395w–4(e)(1)) to establish a that the Senator from Iowa, Mr. HAR- once and for all the penalty Medicare minimum geographic cost-of-practice index KIN, may offer an amendment. value of not less than 1 for physicians’ serv- imposes on doctors who choose to prac- The PRESIDING OFFICER. Without ices furnished under the medicare program; tice in rural areas of our country. objection, it is so ordered. (G) extending the temporary increase Medicare adjusts payments to doctors The Senator from Iowa. under section 508(a) of the Medicare, Med- downward based on where they live, Mr. HARKIN. Mr. President, I ask if icaid, and SCHIP Benefits Improvement and but, in fact, the value of a physician’s the Senator can yield me 15 minutes. Protection Act of 2000 (114 Stat. 2763A–533), service is the same in Brooklyn, IA, as Mr. BAUCUS. Mr. President, I inform as enacted into law by section 1(a)(6) of Pub- it is in Brooklyn, NY, but the Medicare the Senator from Iowa that he has 1 lic Law 106–554, for home health services fur- formula does not think so. My amend- nished in a rural area; and hour. (H) making any other change to a payment ment changes that and sets a floor for Mr. HARKIN. I appreciate that. I will system under the medicare program that the all physician payments that will end not take an hour. Secretary determines is appropriate. the negative adjustment doctors in Parliamentary inquiry: The Senator (3) HOLD-HARMLESS.—The regulations pro- Iowa and 30 other States currently asked that the amendments be set mulgated under paragraph (1) may not result face. aside; right? in a lower level of reimbursement for a

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00055 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6202 CONGRESSIONAL RECORD — SENATE May 14, 2003 health care provider under the medicare pro- to share nurses and counselors and bill, we lost 1.3 million jobs. Since the gram under title XVIII of the Social Secu- eliminate programs such as music and 2001 tax bill was passed 20 years later, rity Act than such provider would have re- art and enrichment classes entirely we have lost 1.8 million jobs in almost ceived but for the enactment of this section. from their schools. 2 years. (b) FUNDING.— (1) APPROPRIATION.—There are appro- In our hearing this morning, we had Now, 22 years after the first try, we priated, out of moneys in the Treasury not a teacher from a small school in Iowa are going to try it again. It is not otherwise appropriated, $50,000,000,000 for the testify. The cost just in her school dis- enough that the riverboat gamble purpose of implementing the regulations de- trict for health care coverage went up failed in 1981. It is not enough that it scribed in subsection (a)(2). 61.5 percent over the last year. failed in 2001. By gosh, we are going to (2) REVERSION OF EXCESS FUNDS.—Any As he said, they are now approaching try it again, folks—another riverboat funds appropriated under this subsection the point where their health care costs gamble. One would think history would that are not used to implement such regula- are going to equal the salary of a first- teach us something. tions shall revert to the Treasury and shall be used to reduce the Federal deficit. year teacher. So this is the real Amer- If history does not, then how about (c) FUNDING OFFSET.—Paragraph (2) of sec- ica that is happening in my State, in some of the economists and what they tion 116(a) (relating to partial exclusion of every State, to people who have are saying. Federal Reserve Chairman dividends received by individuals), as added worked all their lives and now do not Alan Greenspan said: by section 201(a), is amended to read as fol- have any health care coverage. Our There is no question that as deficits go up, lows: schools are being cut. Our infrastruc- contrary to what some have said, it does af- ‘‘(2) LIMITATION.—Paragraph (1) shall apply ture is deteriorating in this country, as fect long-term interest rates. It does have a to qualified dividend income of a taxpayer negative impact on the economy . . . only to the extent such income does not ex- well as our bridges, roads, sewer, and ceed the sum of $500 ($250 in the case of a water systems. He twice testified before Congress in married individual filing a separate re- What is the answer before us for opposition to the tax cut plan, warning turn).’’. growth and jobs in our economy? An that these deficits would stunt long- Mr. HARKIN. Mr. President, I will enormous tax cut, in large part for the term growth. Ten Nobel laureates and speak to my amendment in a moment. wealthy in our country. That is the an- 400 other economists disagree with the Before I do, I wish to make preliminary swer. If I believed this tax bill before us President’s approach. In a statement comments about the tax bill before us would help the economy, create the made February 10 of this year, they which the President and the Repub- jobs we need, and help provide health wrote: licans have called a jobs and growth care coverage, I would be all for it. But Regardless of how one views the specifics package and they say it is to grow the the fact is, we have tried this before. of the Bush plan, there is wide agreement economy. I certainly agree that the In 1981, under President Reagan, we that its purpose is a permanent change in economy is in dire straits and we are in had a supposedly big supply side cut in the tax structure and not the creation of jobs desperate need of taking action. That taxes. We lost 1.3 million jobs in the and growth in the near term. is true. two years after the passage of that bill. The economists also said that: Since President Bush took office, the Then OMB Director David Stockman Passing these tax cuts will worsen the United States has lost 2.6 million jobs, called it a riverboat gamble. Guess long-term budget outlook, adding to the na- more than 36,000 of those in my State what. Working Americans all over this tion’s projected chronic deficits. This fiscal of Iowa. Unemployment rates, includ- country lost that gamble. In 1982, part deterioration will reduce the capacity of the government to finance Social Security and ing long-term unemployment rates, of that measure was reversed and the continue to rise. That is a fact. The Medicare benefits, as well as investments in Federal Reserve sharply dropped inter- schools, health, infrastructure, and basic re- economy is in a shambles. Unemploy- est rates allowing for things to start to search. Moreover, the proposed tax cuts will ment continues to go up. This is not get better. generate further inequities in after-tax in- just some academic process. It is caus- After much hard work in the 1990s, come. ing real hardship for millions of Ameri- we passed a bill in 1993 that put us on That is what these 400 economists cans and families who are without a the path towards a balanced budget, re- said. job and without health care coverage. stored confidence and creating 22 mil- What we are talking about is fair- Senator SPECTER and I had a hearing lion jobs. Productivity went up. It was ness. We want fairness in the Tax Code. in our appropriations subcommittee a bill with a policy totally out of line We want fairness to the working fami- talking about the lack of access and af- with the supply side philosophy of the lies of America in how they are taxed fordability of health care. You can read 1981 bill. Almost every Republican sen- and who pays the burden in this coun- the story of the man who testified, Mr. ator predicted that the economy would Kurilko. He was referred to in the Wall try. be severely hurt. The economy grew, Every time we talk about fairness, Street Journal. He is 57 years old, and 6.5 million jobs were created in President Bush says, class warfare. worked 37 years on a job. He now has a just the first two years after that bill heart problem, diabetes. He is out of a Why is fairness class warfare? Why is it passed. The United States enjoyed 40 job. He and his wife now face the pros- in President Bush’s head that if we try consecutive months of unemployment pect of losing their life savings because to have fairness in the Tax Code, he below 5 percent. his health care costs, just for insur- thinks it is class warfare? Twenty years after 1981, we had an- ance, are over $2,000 a month. This is a That is what this is about. It is about other supply side riverboat gamble in man who worked in a blue-collar job, a basic fairness. We have tried it before. front of us. President Bush assured the steel mill, all of his life. It failed horribly, and yet I guess we That is what is happening in America country in 2001 that are going to do it again. today. Families without work, and the We can proceed with tax relief without fear Why should we do this? Why should high cost of health care, go without of budget deficits, even if the economy soft- we go against the advice of some of the ens. coverage, and they see their life sav- most renowned economists and why ings vanishing before their eyes. And on another occasion, he said should we go against what we know We see it affecting other areas of our A tax cut now will stimulate the economy from history? Why take a risky gamble economy, our families, and our States. and create jobs. when people’s lives are at stake? Why The tuition fees in Iowa have increased Yet what we are now facing, almost take a risky gamble when 9 million sharply at our public universities. two years after the passage of that Americans cannot find jobs? However, the tuition does not make up measure is a loss of another 1.8 million If I were out of work, I would want for the shortfall in the loss of State jobs to our economy. my representatives in Washington to funding. We are seeing cuts to critical The President, and the Republicans, do what has been proven to grow the public health initiatives, including passed a $1.3 billion tax cut like the economy, proven to create jobs, not those that help indigent dialysis pa- one we are considering today. It was what has twice proven to fail. tients, and a program that helps immu- targeted to the wealthiest. Unfortu- In fact, the more I think about this nize low-income kids. nately, the President’s predictions tax bill before us, I think of Bill Ben- Public schools in Iowa have cut 350 were dead wrong. I want to get this nett. It is like a gambling addiction, teachers statewide. Schools are forced chart back up. Two years after the 1981 putting $500 in the slot machine and

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00056 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6203 pulling the handle. That is what this night. It may have some merit, I don’t up? Or do we go with proven methods tax bill is like. It is like putting $500 in know. Both are trying to help rural to grow the economy and create jobs? and pulling the handle and hoping he hospitals and providers. I hope we can Do we break the bank on tax cuts for hits it. Now we know that Mr. Bennett work together to get that done some- the wealthy or do we invest in edu- did not hit it. He lost millions of dol- time this year. cation? Do we break the bank on divi- lars over several years of gambling. Basically, what my amendment dend tax breaks or do we cap them and That is what this bill is like. It is a would do is, say, if the Congress does use that offset as a way of helping riverboat gamble, like David Stockman not pass legislation by December 31, equalize Medicare payments in our called it in the 1980s. 2003 then the Secretary of Health and States? Do we break the bank on tax I am getting to my amendment now, Human Services would promulgate reg- cuts for the rich or help families afford and there is an interesting comparison ulations by December 31, 2004. We college tuition? Do we break the bank I wanted to make on Medicare. How would have to enact additional legisla- on tax cuts for the rich or do we help much does the plan before us cost? tion. If none passed, the Secretary families afford health care coverage? Well, when we throw out figures of bil- would have to act by the end of 2004. Do we break the bank on tax cuts for lions of dollars, eyes sort of glaze over. Those regulation changes would have the rich or do we keep Social Security No one can understand exactly how to have the following parts: secure? Do we break the bank on tax much money that is. So I thought I One, to equalize urban and rural base cuts for the rich or do we keep Medi- might compare it. payment rate. This increases the rate care benefits intact? Do we break the The President’s plan if made perma- for all hospitals in cities below one bank on tax cuts for the rich or do we nent costs more than the entire 75-year million people. start to work on having smaller defi- shortfall in both Social Security and Two, improve the Medicare incentive cits? Medicare, about 1.8 percent of GDP. payment program to ensure that bonus These are our choices. The choice is The Bush tax cuts made permanent payments are made on behalf of all eli- clear. This bill needs some serious over a 75-year period will amount to 2.3 gible physicians; three, my amendment amendments. There will be a number of percent to 2.7 percent of GDP. would eliminate the Medicare DSH cap. amendments offered and, quite frankly, We hear all the talk about the short- The current cap disproportionately if some of the amendments are accept- fall we are going to have in Social Se- hurts rural states; four, it would estab- ed, maybe the bill would be worthy of curity and Medicare when the baby- lish a Medicare inpatient hospital support. As the bill sits right now, the boomers retire, and that we have to do bonus payment for hospitals with low bill must be opposed, unless we can something about it. Here is your an- Medicare patient volumes; five, it adopt some of these amendments that I swer: The Bush plan will cost more would adjust the Medicare inpatient think would make it, A, more fair and than the shortfall in Social Security hospital prospective wage index to re- equitable, and B, to make sure we in- and Medicare. Think about it. Are we vise the labor-related share of such vest in the long-term security of Social going to have this riverboat gamble, a index to account for 62 percent of such Security and Medicare. tax cut that basically benefits the index. Currently, payments are 71 per- How much time do I have remaining? wealthiest in our society, when we cent based on labor costs. I heard Sen- The PRESIDING OFFICER (Ms. MUR- KOWSKI). The Senator has 39 minutes could be using this to secure Social Se- ator GRASSLEY’s amendment did the curity and Medicare for 75 years? But same thing; next, reinstate a bonus remaining. Mr. HARKIN. Parliamentary inquiry, maybe that is what this is all about. payment to home health care providers Madam President: In terms of the time, It was Newt Gingrich, after all, who in rural areas. A 10 percent bonus has can this time be reserved? said that they—the Republicans—want- expired and this would reinstate it. The PRESIDING OFFICER. It can be ed to have Medicare ‘‘wither on the Next adjust the work GPCI to no less reserved for use today. vine.’’ Maybe that is what this is all than 1 for physicians; lastly, this Mr. HARKIN. I reserve the remainder about. Pass this tax cut, reward the amendment I am offering would say we of my time. wealthiest in our society, and when it would have a hold harmless clause that I yield the floor. comes time to do something about So- whatever we do could not result in the The PRESIDING OFFICER. The Sen- cial Security and Medicare, we will not lower level of reimbursement for a ator from Iowa. have enough money. Maybe that is health care provider under title XVIII, Mr. GRASSLEY. Madam President, what it is all about. that such provider would have received before we move on with the next That is not what we should be about. but for the enactment or these of this amendment, I think it would be accu- We should be about a jobs and growth amendment or these regulations. rate for me to say that the speech by bill that helps the working families of The offset I used would be to limit, to my good colleague from the State of America. We ought to be about a bill to put a cap on any tax deductions for Iowa emphasizes the difference of phi- help secure Medicare and Social Secu- dividend income not to exceed $500. In losophy I have tried to emphasize that rity for the baby boomers. One of the other words, you could get an exclusion our bill tries versus other approaches. ways we can do this is by making sure of up to $500 on dividends in terms of a These are honest, faithfully held ideas we have equity in the Medicare system. tax benefit, but no more than that. about the role of the Government in The amendment I sent to the desk will That offset would fully pay to make our society. help do that by making sure we have sure our hospitals in Iowa or Wash- The alternatives my colleague from better equity in the Social Security ington State—I know Washington is Iowa has given—tax cuts on the one system and Medicare system. very low on the payment schedule— hand, or spending money on the other I tried to listen as my colleague from Montana, other States, make sure that hand—is exactly the point I have been Iowa offered his amendment. I did not we have an equalization so the Medi- trying to make of whether or not the receive a copy of it earlier, so I did not care payments in those States are not resources of this country should go have a chance to look at it. I heard so skewed as they are right now. through the Federal Treasury and have some of the things that my colleague We can get this done simply by cap- 535 Members of Congress divide them from Iowa was talking about in terms ping at $500 the tax benefits under the up, keep taxes high in the process, or of helping right some of the wrongs in present bill before the Senate on divi- whether it is better to reduce taxes to Medicare to provide for less disparity dends. It seems to me that would be a create jobs and create the jobs by leav- under Medicare. small price for the wealthiest in our ing the money in the hands of 110 mil- Most of what I heard I agree with. I country to pay to make sure we had a lion taxpayers making their own indi- think a number of the provisions in working Medicare system that was fair vidual decisions; the dynamics of our Senator GRASSLEY’s Medicare amend- to all. free market system respond very well ment are similar to provisions in my In closing, regarding the tax bill, do to that. Money that is spent by individ- amendment. I commend him for that. we take a risky gamble as we have be- uals or invested by individuals turns However, his amendment uses a dif- fore, sort of a Bill Bennett gamble, as over in the economy many more times ferent offset. I don’t know exactly I have said, pull the handle on the slot than it does if I make a decision on what that is. I plan to analyze it over- machine and hope something comes how that is spent.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00057 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6204 CONGRESSIONAL RECORD — SENATE May 14, 2003 Some believe, as evidenced by the re- people outside the committee as rep- the distinguished chairman of the Fi- cent speech, it is better to have higher resented by Senator COLLINS and Sen- nance Committee, who has worked so levels of taxation, bring the money ator NELSON of Nebraska, there was a hard to produce not only the bill on the through the Federal Treasury and de- desire to have more people involved floor but also has worked very closely cide how to spend it. The other ap- with the policy of how to meet the with the sponsors of this amendment proach is that we will, as we do needs of the States through some State to come up with a proposal for fiscal through this bill, give tax reduction aid. So we have deliberately left kind aid to the States that I believe is care- with the taxpayers of this country de- of a vacuum in this legislation that is fully drafted and is going to make a ciding on investing and spending, or now going to be filled by the good work real difference to the 49 States that are both, and enhancing the economy that of Senator COLLINS and Senator NEL- struggling to close budget shortfalls. way and creating jobs. SON off the committee, and by Senator I am pleased to have a number of co- Another goal of this bill is to bring ROCKEFELLER and others on my com- sponsors, including Senators ROCKE- taxation of the people of this country mittee. I commend them for their hard FELLER, BEN NELSON, SMITH, SCHUMER, within the band that it has been for work. COLEMAN, CLINTON, MURRAY, and about 50 or 60 years, of about 17 percent There is an awful lot of compromise WYDEN. But I particularly want to pay or 19 percent of the resources of this that has gone into this product and I tribute to Senator BEN NELSON and Nation coming to the Federal Govern- am proud to be affiliated with this Senator ROCKEFELLER, who have ment for us to finance programs and to product. But the product is not mine, worked night and day with not only make decisions on how that will be because it was my determined effort to Senator GRASSLEY and myself but oth- spent. About 17 to 19 percent of the leave it to people who have worked on ers interested in this issue to forge a gross domestic product has generally, this issue for about 2 years now. For compromise that I think will result, at over 40 years, been taxed. In recent about 2 years people have been pro- the end of the day, in the conference years that has gotten as high as 21 per- moting this concept. I compliment report with $20 billion in much needed cent, as high as it was in World War II, them for their stick-to-it-iveness. To- fiscal relief for our States. so the highest in peacetime history. night proves that hard work pays off. Half of this funding would be through This tax bill, besides the motive of The PRESIDING OFFICER. The Sen- a temporary increase in the Federal creating jobs, is to bring the level of ator from Maine. Medicaid share, to ensure that States taxation down so it falls within that Ms. COLLINS. Madam President, let can continue to protect millions of vul- historic band, based on two propo- me begin by thanking the distin- nerable Americans who rely on the sitions. One is it is a level of taxation guished chairman of the Senate Fi- Medicaid program as part of the health that has not been so high to be harmful nance Committee for his hard work. care safety net. to our economy and to our people, be- Mr. BAUCUS. Madam President, if I The attacks of September 11, coupled cause our country has advanced tre- might ask the Senator to yield just for with the subsequent recession and re- mendously well with the Federal Gov- the sake of orderly process here in the sulting unemployment, have placed ernment operating within that band of Senate, as I understand it, the Senator tremendous and unanticipated strains deciding how to allocate 17 percent to means to offer her amendment. Is that on State budgets. The States are, after 19 percent of our resources. The other correct? all, our partners in providing health is it is a level of taxation that has been Ms. COLLINS. That is correct. care, education, and other essential accepted by the people of the United Mr. BAUCUS. Technically, as I un- services to the citizens of this Nation. States. derstand it, we should put aside pend- They are, however, facing a dramatic Some of them would say it is still too ing amendments. and unexpected decline in government high, but I guess I would have to say Ms. COLLINS. I was about to ask. revenues at precisely the time when over the long haul I have not heard too Mr. BAUCUS. I ask unanimous con- the demand for government services much complaint about the level of tax- sent the Harkin amendment and the has never been higher because of a lag- ation that has existed over that long amendment by Senator GRASSLEY be ging economy. period of time of 17 percent to 19 per- temporarily set aside, as well as the States from Maine to Nebraska to cent. other amendments, so the Senator West Virginia to Alaska are facing So I do not find fault with anything from Maine can offer her amendment. their most serious budget shortfalls in my colleague from Iowa said. He is ex- The PRESIDING OFFICER. Without 50 years. States face deficits of between pressing one very legitimate philos- objection, it is so ordered. $70 and $85 billion for the next fiscal ophy of government and the financing AMENDMENT NO. 596 year, which begins in most States on of that government and the distribu- (Purpose: To provide temporary State and July 1. They also face deficits of $26 tion of resources and having that done local fiscal relief) billion trying to close the books on the by political decision. I am expressing Ms. COLLINS. Madam President, I current fiscal year. another philosophy of government ask unanimous consent that the Sen- Moreover, while the President’s pro- shared by some Democrats and hope- ate proceed to amendment No. 596, posal for excluding dividends from tax- fully by a lot of Republicans, that a which is a Collins-Rockefeller-Nelson, ation would spur needed investment in level of taxation can get so high it et al, amendment, regarding State aid, American businesses, it would cost the hurts the economy, and the way to en- which is at the desk. States nearly a billion dollars over the hance the economy and grow the econ- The PRESIDING OFFICER. The next 3 years. That strengthens, to me, omy is to let people have a lower level clerk will report. the case for providing aid to the of taxation. The bill clerk read as follows: States. Another way to say it is if we have Let me tell you what the State of The Senator from Maine [Ms. COLLINS] for any budget problems and any deficit herself, Mr. ROCKEFELLER, Mr. NELSON of Ne- Maine, my home State, is facing. The problems, they are not related to the braska, Mr. SMITH, Mr. SCHUMER, Mr. COLE- State of Maine faces a budget shortfall undertaxation of the American people. MAN, Mrs. CLINTON, Mrs. MURRAY, and Mr. for this year and the next of approxi- They are related to the overspending WYDEN, proposes an amendment numbered mately $1.2 billion. Let me put that in by the Congress. 596. perspective. Now we move on to another issue. Ms. COLLINS. I ask unanimous con- The entire budget for the State of But before I yield whatever time she sent the reading of the amendment be Maine is only $5.3 billion, which means might consume to the Senator from dispensed with. it faces a shortfall of approximately 20 Maine, we are adopting policy with her The PRESIDING OFFICER. Without percent. Imagine if the Federal Gov- amendment, in a bipartisan way, that objection, it is so ordered. ernment were struggling with a budget is unrelated to the policy that is in the (The text of the amendment is print- shortfall of 20 percent. It would have to bill. That is because as chairman of the ed in today’s RECORD under ‘‘Text Of close a $440 billion budget gap, and it committee, responding to the people in Amendments.’’) would have to do so without borrowing my committee, both Republicans and Ms. COLLINS. Madam President, I a single dime. That summarizes the di- Democrats, as well as responding to was beginning with my thank-yous to lemma facing our State.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00058 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6205 Forty-nine States have balanced should be allocated. We focus particu- has been stalwart in arguing for fiscal budget requirements. They have to bal- larly on Medicaid because of our con- relief for the States. It has been a great ance their budgets. They cannot print cern about the impact of State budget pleasure to work with him. I yield to more money. They can’t run temporary cuts on low-income families in Amer- him as much time as he needs out of deficits. They can’t borrow the money ica. my time. to close the deficit. As a consequence, But there is another reason it makes The PRESIDING OFFICER. The Sen- States have been cutting spending, in- sense to target one-half of the assist- ator from West Virginia. creasing taxes, using rainy day funds, ance to the Medicaid Program. That is Mr. ROCKEFELLER. I thank my and delaying capital projects. They are that Medicaid is the fastest growing dear friend, the very distinguished Sen- doing whatever they can because they component of State budgets. While ator from Maine. I thank the Presiding must balance their budgets. State revenues are stagnant, or declin- Officer for allowing me to talk briefly All of the States have cut programs— ing in most States, Medicaid cuts are about this amendment of Senator COL- even programs that provide lifelines to increasing at a rate of more than 13 LINS, myself, Senators NELSON and our most vulnerable citizens. At a time percent a year. That is why States SMITH, and Senators, et al, as the Sen- when the number of people without have no choice but to look to the Med- ator from Maine kept saying, including health insurance is climbing, 49 States icaid Program. Senator CLINTON and many others. It is have either already cut their Medicaid If you look at home State budgets, something we have been working on for Programs or are planning to do so. the vast majority of State spending is 2 years. It is something we have been Medicaid provides a critical health for education and Medicaid. If we want working very hard on for 2 years. It is care safety net for 44 million of our to help protect low-income Americans, something the National Governors As- most vulnerable low-income citizens, the best thing we can do is to approve sociation has worked hard for, for obvi- including 218,000 in my State of Maine. an increase in the Federal match for ous reasons, which I will get into in a States, as a result of trying to balance the Medicaid Program. moment, although my remarks will not their budgets, are slashing Medicaid As to the State of Maine, our amend- be long. Programs. As a consequence, approxi- ment would mean $116 million over the The Senator from Maine really did mately 1.7 million Americans are at next 2 years for health care and other cover the logic and the need in very risk of losing their health insurance. services that will help our most vulner- clear terms. If those who are listening That means they are going to be added able Americans. heard her, they heard the best possible to the growing number of 41 million There is another advantage to using argument. I just want to add a few Americans lacking health insurance. the current Medicaid structure—what comments. Moreover, not only is our proposal is known as the Federal Medicaid I also thank the chairman of the Fi- compassionate, not only will it help matching rate, or FMAP. That is, the nance Committee, Senator GRASSLEY the most vulnerable Americans keep States don’t have to take any new leg- from Iowa, for his generosity and good their health care services, but our pro- islative action or establish any new ad- judgment in accepting this $20 billion posal makes sound economic sense. ministrative structures in order to use package as part of the chairman’s Putting money into the hands of these additional Federal matching mark. Is it everything in amount and States is a great way to stimulate eco- funds. They can go straight into the scope that the Senator from West Vir- nomic growth in conjunction with the Medicaid Program. ginia would wish? No. Because the Sen- tax provisions of this package. As The remaining $10 billion could be ator is from West Virginia and the States cut spending and raise taxes to used by States and local governments needs on a proportional basis across balance their budgets, they weaken the to fund education or job training, the country are greater in West Vir- overall economy. health care or other social services, ginia than many other places. I would A recent Goldman Sachs analysis un- transportation or other infrastructure support $30 billion. I support $40 billion derscores the stimulative effect of needs, and law enforcement or public provided that one-half is used for Med- State fiscal relief. The report notes safety. In other words, we provided a icaid, and then others could be nego- that ‘‘State governments could provide great deal of flexibility for that re- tiated out. significant support to the economy maining $10 billion. So I do not think the $20 billion is without large long-term budget cuts, Our amendment would allocate $4 bil- enough, but $20 billion is what we have, reducing the need for these jurisdic- lion of those funds directly to counties and $20 billion is more than we started tions to raise taxes, and cut spending.’’ and local governments. out with last year. We will hope people After all, if we cut taxes here in Our amendment is strongly sup- forget that, even though 75 of them on Washington only to have taxes increase ported by a wide range of health care this floor voted for it then, and then, in State capitals across the country, groups, which I will submit as part of for a $30 billion bill, 80 on this floor we will wipe out some of the good we my formal statement in the interest of voted for it this year. That does not are trying to do by cutting Federal time. happen a lot around here. taxes. The support for our proposal—the That was not a free vote. That was I am not saying Congress should bail Collins-Rockefeller-Nelson-Smith, et not a trivial vote. That was a vote peo- out the States. I am not saying States al, amendment—underscores the crit- ple made after thinking about it. So we should not have to make hard choices. ical importance of providing assistance will prevail, and we will rejoice in that. I am not saying States should not bal- to States right now. Now is when they And we will not do that just because ance their budgets. The States are need it. Now is when we must act. we win an amendment; we do that be- going to have to make hard, painful Congress is most effective when it cause we know we are helping real peo- choices, even with the $20 billion we stands arm in arm and not toe to toe ple. are proposing to assist them. The na- with our partners, the States. Our We have almost 300,000 people in West ture and the severity of the fiscal crisis States face a fiscal crisis of expanding Virginia who are on Medicaid. One of facing our States has convinced me dimension. We need to help, and this the things that always strikes me: We that we simply have to help them. The bipartisan, carefully crafted amend- always talk about health care in statis- consequences are too dire otherwise, ment is the critical step forward in tics, and somehow that separates us and too many vulnerable low-income doing just that. from being able to get down to what American families will suffer if we do I hope we will have a strong bipar- the Senator from Iowa, Mr. HARKIN, not step in and lend a helping hand. tisan vote for this important amend- calls ‘‘real people.’’ And I am of that I am encouraged that the economic ment. It is similar to proposals that school, the so-called real people school. stimulus package approved by the Sen- my colleagues and I advanced last year I picked up the paper this morning. I ate Finance Committee authorizes and this year which garnered the over- read that 60 million Americans, at temporary fiscal relief to the States. whelming support of the Senate. Now some point during the year, do not As the distinguished chairman has in- we can make sure that it happens. have health care. That is not a Med- dicated, tonight we are deciding how to I would like to yield at this time to icaid statement. That is a health care fill in the blanks and how that help the Senator from West Virginia who statement. That means some of them

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These are peo- To say the States have been irrespon- health care. ple sometimes who cannot find work sible is so wrong because if you go back But here comes a Medicaid amend- simply because they live too far out in to the end of the Second World War or ment in which we can do some good for the country, as was the case in this if you go back just 10 years, you will people. The Senator from Maine men- community, or they did not have auto- find the States have been far more dis- tioned 1,700,000 people are at risk if we mobiles to be able to get to work. Or if crete and responsible in their spending do not. I am not sure the $10 billion they got to work, they didn’t know than has the Federal Government. will take care of all those 1,700,000 peo- how to take a job exam or have a job Now, you can say: Well, the Federal ple, but it will take care of a lot of peo- interview, or they had never been up in Government has very broad respon- ple, and it is going to take care of them an elevator and they were scared by sibilities, the Department of Defense, with very good health care. People that, or they were asked to lower a Ve- and other endeavors. And I understand need to understand that Medicaid, un- netian blind because the Sun was in that. But the fact is, the States have like Medicare, does provide a prescrip- their eyes, and they had never seen a been responsible. tion drug benefit. And Medicaid, prob- Venetian blind before, so they would When we took in less money in 1982 ably known to most of my colleagues, just sort of shut up and hunker down than we did in 1981, I had to fire 10,000 provides 6 million elderly, poor Ameri- and be defeatist. Department of Highway workers. I had cans—who do not have health care oth- Don’t tell me those people are not to fire them. I had to fire those peo- erwise and prescription drugs other- worth keeping healthy because things ple—good people who worked. So don’t wise—it provides this to them. So it did not break their way. Things broke tell me that States don’t sacrifice. has an enormous capacity and reach. It well in my life. Things have not broken West Virginia has just raised its ciga- is superb health care. It does EPSDT well in some people’s lives in Maine rette tax to 55 cents, and all of the for children. That is early screening. It and Alaska and West Virginia, and we money is being spent by the Governor does all kinds of things that Medicare, cannot pretend that somehow these are on Medicaid. And, at the same time, obviously being a different area, does not people and that they don’t deserve the State is having to cut services. not do. So it is a superb program. help. The spirit of America is one in This morning, I talked to the presi- The Senator from Maine pointed out which you try to protect those who dent of our very largest university, it is very good in terms of being a stim- cannot protect themselves, as much as with 31,000 students, West Virginia ulus to the economy. She is quite cor- possible, within reason. University. His budget, and every other rect about that. And it is about a 3 to Incidentally, this also happens to do State public education budget at the 1 relationship. For every $1 you spend an enormous amount for our hospitals college/university level, has been cut in the State, about $3 is actually and nursing homes. And that was the by 13 percent. And it will happen again churned beyond that. So it is a stim- one thing that was not said by the Sen- next year. It is a devastating cut. Why? ulus program. Yes, it is actually a ator from Maine. Eighty-five percent of Because, as the Senator from Maine stimulus program. I think that is one any hospital in West Virginia depends said, you have to balance the budget. of the reasons the chairman of the Fi- on Medicare and Medicaid—all of them. So we are dealing with real States nance Committee put it in the mark. So by doing this—and by pouring here, but, most importantly, we are But there is another aspect here. The millions of dollars into West Virginia, dealing with real people who need the Senator from Maine used the words and $10 billion across America—for a help in an America which was created ‘‘safety net.’’ I will use the word ‘‘un- temporary period of 18 months, we to protect those who needed that help. derpinning.’’ Either one is the same. strengthen our entire health care sys- I ask my colleagues to join the Sen- This is a sacred concept. This is a tem as well as stimulating the econ- ator from Maine, the Senator from Ne- country, because of our original his- omy. So it helps the economy and it braska, and others who have sponsored tory under the British crown, in which helps the people—and people who really this bill, and been working on it for a we wanted to protect the minority, not do need it. long time. I am thrilled that, at last, it protect the majority. The majority, we The Senator pointed out that the has a very good chance of passing. figured, were able to do that. other $10 billion—which I was less in- I thank the Presiding Officer and I There are protections and checks and volved with because I was focused on yield the floor. balances in all these things, but people the Medicaid relief—is spent wisely: in The PRESIDING OFFICER. Who sometimes say: Well, if somebody is on education, job training, transportation. yields time? The Senator from Iowa. Medicaid, that means they are not She talked about it. And it is a good Mr. GRASSLEY. Madam President, I working or they don’t deserve it. That expenditure. Governors and local yield myself off the bill such time as I is so untrue. groups can decide how to spend that. may consume. When I go back to the way I was in- I was worried it would be kind of a The PRESIDING OFFICER. The Sen- troduced to West Virginia—and what revenue-sharing thing. I remember ator has that right. caused me to stay in West Virginia— back when I was Governor in 1982, we Mr. GRASSLEY. I am in support of when I became a Vista volunteer for 2 had revenuesharing, and, all of a sud- this amendment. I am very glad that years, and I dealt with people, none of den, county courthouses all over the such a compromise has been worked whom had health care, they fed me State of West Virginia got new roofs out. I am very happy with the team of every meal I had, because I ate in some and got refurbished, which is not ex- people both on and off the committee home or some mobile home or what- actly what I think the revenuesharing who have put it together. I would like ever it was. I depended upon them. My was meant to be for. to emphasize one thing about the life was them. If it was a good day for So it is a serious business when you amendment. I am sure it has been stat- them; it was a good day for me. If it give Medicaid help to people who need ed very well by other sponsors, but this was a bad day for them; it was a bad it. is meant to bring temporary—and I day for me. It changed me in every sin- I will conclude with this. And this want to stress ‘‘temporary’’—fiscal re- gle way. really gets my goat. I have heard a lot lief to the States. I have heard from But these are people who need this. around here the argument that you my State and many others about the There is nothing that hurts so much as cannot give money to States. What are difficult budget situations they are to know a child cannot get screened for we, two nations? Are we 50 States, on currently experiencing. This amend- autism when they should be, or that a the one hand? Is that called America? ment will help to bring temporary re- child has no dental care whatsoever. I Or are we a Federal Government? Is lief to all States during this difficult had to deal with that. I would have to that America? Or are we somehow fiscal time. load kids from this little community bound up that we work together and It is important for the Senate to suc- into my jeep, and we would go down to that we help each other? cessfully pass a strong growth bill, and

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That is the hope, that is the rity under homeland security require- sistance Percentage Program or some- expectation, and that clearly is the ments. They do not have the luxury to thing we call around here by the acro- goal, not only of this amendment but run deficits, nor should they. nym FMAP. This is the funding struc- of the entire growth package before the Therefore, what we propose is $10 bil- ture for Medicaid. This amendment Senate. lion to be split between the States and uses a temporary adjustment in the Our goal is to make sure that we local governments on a block grant FMAP formula. grow the economy faster than we grow basis. This will help provide some relief Some of my colleagues feel strongly the deficit. It doesn’t make a lot of from property taxes that would other- about giving flexible grants to the sense to cut taxes in Washington and wise most assuredly rise as the cost of States and localities. This amendment ignore what is happening in the State local governments are passed on to tax- also uses flexible grants to those capitals. ether it is in Juneau or Lin- payers. States and localities. Many Members coln or wherever it may be, what hap- As we look at this package, as we both on and off the Finance Committee pens in State capitals with the State look at State fiscal relief, I hope we have worked hard to reach this agree- legislatures does matter. will continue to have the bipartisan ment. As I stated in the Finance Com- Over the weekend, I was home in Ne- support we have had in the past. mittee markup, I believe all Senators braska and the local news media was Whether it is 75 or 80 votes is sec- should have an opportunity to weigh covering in great detail the travail of ondary. I certainly hope it would be in. The amendment before us reflects the Nebraska Legislature in trying to overwhelming support for this effort. the hard work of many Senators who take care of a growing budget deficit For those who would say what kind care deeply about State fiscal relief. It caused by declining revenues and in- of stimulus will come from this effort, is a good compromise. For these rea- creasing costs. Therefore, the news was there are studies that show that 1.24 sons, I am going to vote for this replete on the subject day in and day will be returned in one year. From my amendment, and I urge my colleagues out. So if we are going to try to change perspective, a 24-percent return on this to do the same. the attitude and improve the economy sort of investment to take back to the I want to state a couple more times, with active results in Washington, DC, States is a good return, and it is cer- just so it is not forgotten, to any State it does not make sense to ignore what tainly a stimulus to the economy. and local people listening or who will is happening in the State capitals. Therefore, it is a stimulus to the future read about it or for sure will be re- We only have one tax pocket. The of this great country. minded about it a year or so from now: Federal Government is trying to put in I appreciate the opportunity. I thank This is meant to be temporary. some money. States have their hand in my colleague, the Senator from Maine, The PRESIDING OFFICER. The Sen- taking more out. That certainly is for her support, for her constant coun- ator from Maine. counterproductive to the goal we have seling on how we should go about this Ms. COLLINS. Madam President, I if we ignore what is happening at the effort. I thank her for the time to thank the distinguished chairman of State level. speak on this very important amend- the committee for his remarks. I thank I have said that it is the equivalent ment. the Senator from West Virginia for his of trying to drive a car with one foot I yield the floor to the Senator from eloquent statement, and I now yield on the accelerator and the other on the Maine. time to the other great leader on this brake. We don’t want what we are at- Ms. COLLINS. I would like to ask my issue, my colleague and friend, Senator tempting to do here negated by what is friend from Nebraska how he would re- BEN NELSON of Nebraska. going on in State capitals. This will spond to a valid question that has been The PRESIDING OFFICER. The Sen- permit us to do as much as we can to raised about our amendment: Will the ator from Nebraska. help avoid that. increase in the FMAP, Federal share of Mr. NELSON of Nebraska. Madam There is the human side. Quite hon- Medicaid, be a temporary one? President, I come to the floor today to estly, in Nebraska, for example, with Mr. NELSON of Nebraska. I am glad support and urge my colleagues to join this projected budget shortfall, the my friend from Maine has asked that in support of the amendment before the University of Nebraska, the State col- question so that I can provide some as- Senate for State fiscal relief. I begin by leges are all taking significant cuts. surances to our colleagues. On behalf of thanking my friend and colleague from Nebraska teachers are out of work be- our group of Senators offering this Maine, Senator COLLINS, who has been cause of lower State aid to education. amendment, let me be clear: We have stalwart in pushing for State fiscal re- In fact, when it comes to health care drafted this provision in such a way lief for 2-plus years. We have worked coverage and child care options, more that the increase in the FMAP will end very carefully, very closely to bring than 15,000 children have already been June 30, 2004. My colleagues will be about this amendment that is before us cut from Medicaid benefits and another glad to know that there is precedent today. 2,000 families have lost their child care. for Congress passing short-term Med- On two other occasions, we have had More harsh cuts are on the way unless icaid matching rate increases that overwhelming support. We believe this we do something to help fill the rev- have not become permanent. amendment will potentially have that enue gap. This amendment does that. In 1981, the Omnibus Budget Rec- same level of support. I thank her for Some have suggested that this is onciliation Act reduced Medicaid all of the work and leadership she has bailing out the States or somehow it is matching rates for 3 years, while also provided in making this possible. a gift that we are doing out of the gen- creating exemptions for States that I thank also the distinguished chair- erosity of Washington. I have encoun- had high unemployment rates, special man of the Finance Committee, my tered the generosity of Washington, hospital review programs, or strong friend to the east of Nebraska in Iowa, generally, as a former Governor when fraud and abuse recovery systems. At Senator GRASSLEY. He has been a man things were given to us. They were the time when this was enacted, some of his word. We have worked very care- called underfunded and unfunded Fed- in Congress worried that these changes fully, very closely on this issue and eral mandates. This is not what we are would be permanent, but these provi- others. I thank him for contributing about today. We recognize that one of sions expired on schedule without any significantly to our effort to bring this the best ways to help the States with particular controversy or efforts to ex- amendment to the body. their problems today is to take care of tend them. Most of what needs to be said has these needs and make sure that we There is even a more recent example: been said already. I do want to empha- don’t have what we are doing here ne- The Omnibus Consolidated Rescissions size, as Senator GRASSLEY has, that gated by action at the State level, and Appropriations Act of 1996 granted

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This tem- eliminate or reduce, it should be al- By providing a temporary boost to porary State relief was granted because lowed to do so. We know that the State FMAP in the form of $10 billion, Or- the Omnibus Budget Reconciliation is the best judge of how to prioritize egon would see more than $300 million Act of 1993 tightened disproportionate these funds, not the Federal Govern- in new economic activity, more than share hospital payment policies and ment. $110 million in new wages would be gen- posed a hardship for Louisiana at a Madam President, I thank my col- erated, and more than 3,500 jobs would time when the State’s economy was league and close friend, the Senator be created. faring badly. The State was able to use from Nebraska, for his leadership and As you can see, State fiscal relief is these temporary funds to avoid disrup- for making such an excellent case. I one of the most effective policies the tions in essential services. The tem- know there are others who are waiting, Congress could and should enact as porary increase in Louisiana’s FMAP so I will conclude the debate on this by part of the economic stimulus/growth expired as scheduled. making just one final point. Forty-nine package. There is no question that These provisions expired as planned States are facing severe budget short- States will spend any additional Fed- after fulfilling their mission of tem- falls. This is not an isolated problem. eral funds they receive quickly, put- porary relief to help these States tran- It is a problem that affects all but one ting money directly into the economy sition through a difficult period. Con- State. This isn’t a case where States rather than curtailing economic activ- gress has been able to maintain dis- have been fiscally irresponsible, spend- ity. cipline in the past. There is no evi- ing wildly. As many economists have noted, we dence that a temporary increase in In fact, the States are coping with need to increase demand in the econ- Medicaid matching rates will inevi- the demand for services and a decline omy—but State budget actions to bal- tably become permanent. In fact, be- in revenues at the same time. It is not ance their budgets right now are reduc- cause our amendment in no way ad- something they brought upon them- ing demand significantly. This is pre- justs how future FMAPs are cal- selves. That is why we should step in cisely the wrong medicine at the wrong culated, it does not effect a permanent temporarily—these are not permanent time for our economy. change in FMAPs for States. assistance programs—to provide help. As you know, States are facing budg- Ms. COLLINS. I thank my colleague It will help ensure that 1.7 million et deficits of approximately $100 billion for that valuable clarification. Let me Americans will not lose their Medicaid that need to be closed over the next ask my colleague from West Virginia services. It will help ensure that they few months. States are closing these about another question that has come might just have a little bit of help as deficits by cutting education, health up regarding the impact of our pro- they make the painful, difficult choices care, and public safety—and sometimes posal on the baseline for future Med- that are necessary to close their budg- by considering raising taxes. icaid calculations. There is some con- et gap. It will help ensure that it has a Unfortunately, the economic impact cern that this provision might increase direct stimulative effect, which is, of State budget cuts and possible tax FMAP rates in future years. Would you after all, the entire purpose of this increases have wide-reaching impacts. clarify this issue for our colleagues? package. It is to get our economy A dollar cut from Medicaid results in Mr. ROCKEFELLER. I am happy to growing again and create good jobs. far more than one dollar less in health address that issue. The FMAP is cur- Fiscal aid to States will help to care. rently calculated annually under the achieve that critical goal. Fortunately, the opposite is also following formula. The FMAP is at I want to take this opportunity to true: every single dollar spent on Med- least 50 percent and is calculated based ask for the yeas and nays on my icaid results in over $3 in the State and on the ratio of a State’s 3-year average amendment. local economy. The PRESIDING OFFICER. Is there a of per capita income to the 3-year aver- Some of our colleagues will tell us sufficient second? that the States spent their own way age of per capita income of the Nation. There is a sufficient second. Given the nature of this formula, the The yeas and nays were ordered. into the current fiscal crisis. But most previous year’s FMAP in no way af- Ms. COLLINS. I thank the Chair and of the spending increases in health care fects the calculation of future FMAPs. I yield the floor. were driven by the fact that health Basically, if the State’s average per Mr. SMITH. Mr. President, I rise care costs grew almost twice as quick- capita income is below the national per today in support of this amendment to ly as general inflation, and that Med- capita average, the State gets a higher allocate State fiscal relief funds to icaid enrollment rose among disabled FMAP. The FMAP is calculated usu- Medicaid and State and local govern- individuals and the elderly—two groups ally 6 months to a year in advance of ments. with expensive health care needs. the start of a Federal fiscal year. The I have been supportive of State fiscal In addition, States expanded health amendment would take the FMAP that relief since the last Congress. Last care coverage among low income chil- has already been calculated by HHS year, I introduced a bill with Senators dren and pregnant women. under this formula for fiscal year 2003 ROCKEFELLER, NELSON, and COLLINS to Since the economy began to falter, and fiscal year 2004 and increase it by provide states with fiscal relief, which virtually every State has taken Med- 2.95 percentage points for a portion of garnered the support of 75 Senators. icaid cost-containment action. Addi- those years. It does not adjust the un- This year, I reintroduced State fiscal tional cuts are expected next year as derlying formula. Because the FMAP is relief legislation with Senators ROCKE- States struggle to fill budget shortfalls calculated annually, and the calcula- FELLER, NELSON, and COLLINS that of billions of dollars. tion is still based on the current per would provide States with $20 billion— Of course, this means that the num- capita income ratio, our amendment in half through FMAP. ber of uninsured Americans will con- no way increases the baseline for fu- And earlier this year, 80 Senators tinue to grow. ture FMAP calculations. supported a sense of the Senate that According to the CDC, Medicaid and I would like to add that I completely $30 billion should be spent on State fis- SCHIP provided coverage for 2 million concur with the Senator from Nebras- cal relief, with half of the money going children and 1 million adults who lost ka’s statement on the temporary na- to Medicaid. Eighty votes is a pretty their health coverage last year. I sus- ture of the FMAP. clear signal that this is important to a pect this year, those numbers will be Ms. COLLINS. I would like to add lot of folks in a lot of States. even larger. one other point of clarification on this And make no mistake, FMAP is good My home State of Oregon has been provision. By no means do we intend to economic stimulus for the States hit hard by the economic downturn.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00062 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6209 The number of uninsured is up, way up. I only wish that somehow we could ance their budgets will significantly Children and adults, parents have lost resolve our differences and recognize help the economies in those States. Un- their jobs and they are turning to Med- that fiscal responsibility has to have funded mandates by the U.S. Federal icaid. Will Medicaid be there for them? some important part in our calculation Government has caused some of the Without additional resources, 100,000 as to what makes the most sense as we problems the States are facing. No Oregonians will lose their health cov- look to economic recovery. An inde- Child Left Behind has been mentioned, erage, and the people who retain their pendent analysis by Economy.com and there are others, such as IDEA and coverage are facing drastically reduced found that we could actually lose jobs special education. There are various benefits. This loss will have a ripple ef- in the outyears. The objective report unfunded mandates. fect in the local economy. In some indicated that not only do we not cre- We in the Congress have said that the counties, a quarter of the population is ate many jobs in the next year because States must provide these services, but eligible for Medicaid. most of this legislation doesn’t kick in the President and the Congress have While we need to strengthen our until 2004, we actually could harm the not provided the money to the States economy in the long run, it is impera- economy in the outyears because of in- so they can provide these services. So tive that we address the immediate creasing long-term indebtedness as a the States have had to figure out how economic problems by tackling the result of higher interest rates. to pay for these services because that State fiscal crisis. So from a jobs point of view, we can is Federal law, they must do so. This amendment will provide mil- do better. From a cost point of view, In the meantime, as we all know, lions of dollars to needy State and we can certainly do better. From the States have suffered dramatic reduc- local governments to provide essential point of view of fiscal responsibility, tions in revenues because the economy services that benefit all of us. we must do better. So we will be offer- has been down. States all across the I urge my colleagues to support this ing a Democratic alternative that will country have not received near the amendment. allow us that fiscal responsibility and amount of revenues they expected in The PRESIDING OFFICER. Who their last budgets. When you add to yields time? allow us an immediate response to the economic circumstances we are facing that rising health care costs in the Mr. BAUCUS. Madam President, I country, which are averaging 12 to 13 yield such time as the minority leader right now. Our bill does what the economic ex- percent higher each year, this is a huge himself may use. increase to the States’ Medicaid budg- Mr. DASCHLE. Madam President, I perts told us we must do. They said make it temporary, make it imme- ets and other health care budgets. So it thank the distinguished ranking mem- is very important to give increased aid ber, the Senator from Montana. I will diate, make it broad-based and, above all, make it fiscally responsible. That to the States. I am disappointed, frank- just take a couple of minutes. ly, that this bill provides only $20 bil- I think this is a critical amendment. is what the Democratic alternative will do tomorrow. It will provide help for lion when the need is so great. I hope, as we consider what it is we I remind our colleagues also, as the the States, as this amendment does. It need to do to ensure that our country occupant of the chair knows well—par- will provide a broad-based wage credit can be put back in economic balance, ticularly because her father is Gov- that we recognize the importance in for every working family in the coun- ernor of a State—States have to bal- providing meaningful assistance to the try today. It will provide meaningful ance their budgets. That is not true for States. help to small business with the busi- the Federal Government. When States Of all the amendments we have be- ness expensing allowance. It will pro- face all these unfunded mandates and a fore us, this is one of the most impor- vide unemployment insurance for those reduction in revenue, they have huge tant. I just spoke to the Governors yes- who have seen it terminated. So it does budget deficits, which they have to terday. They have an $80 billion short- exactly what the Nobel laureates, the somehow solve, and they can only do so fall. So I am very hopeful that, as we economists, have told us must be done by raising taxes or by cutting various consider where it is we can do the most if indeed we are cognizant and sensitive State services, such as Medicaid—their good, where we can get the greatest to the many pressures and challenges share—and whatnot. traction, where we can do the most to and the many real problems we are fac- So that is why we are here today and ensure that we have the greatest de- ing as we look to our fiscal responsibil- why so many Senators have spoken out gree of economic recovery, we recog- ities in the coming years. in favor of aid to the States. We are nize the importance of helping States We can do better than this. I am very soon to have an amendment offered by deal with the crisis they are facing in hopeful that we can persuade our col- the Senator from Washington, which I dealing with medical costs. Likewise, leagues to look carefully at what reper- support. She is going to suggest even we must recognize that we have an ob- cussions there will be if the legislation more aid to the States. This $20 billion ligation to offset the costs of the Leave currently pending passes. I hope we can is merely a drop in the bucket. As we No Child Behind Act and realize that persuade our colleagues that indeed all know, the budget deficit in Cali- transportation infrastructure has to be working together we can find a better fornia is $35 billion alone. This bill pro- addressed. Our legislation would do approach. Our Democratic alternative vides just $20 billion. One State alone that. is that better approach. I urge my col- is much more than that. My State of So I applaud my colleagues for the leagues to look at it tonight and sup- Montana is running a budget deficit of extraordinary effort they have made to port it tomorrow. about $260 million. We are a small bring us to this point. I congratulate I yield the floor and I thank my col- State, but $260 million in deficit is a our colleagues on both sides of the leagues for the opportunity to address lot for my State with a population of aisle for their effort. I hope our col- the alternative, as well as the State 19,000 people. leagues will see fit to pass the amend- amendment. So I join in the chorus, and I particu- ment when we vote on it tomorrow. The PRESIDING OFFICER. The Sen- larly thank the Senator from Maine If I may say briefly, I wish we were ator from Montana is recognized. and the chairman of the committee. I not here tonight with the legislation Mr. BAUCUS. Madam President, I, also thank the other Senators who are that is pending before us. Our country too, am pleased we are going to be vot- working to put this together. I must is mired in debt. We could exceed $400 ing to increase aid to the States. Ear- say I will support it, but I wish we were billion in debt this year—the single lier this year, I offered legislation to a little wiser, frankly, and providing largest 1-year level of indebtedness our cut taxes, but its centerpiece was aid more aid to the States. Certainly $20 country has ever faced. I cannot imag- to the States. In fact, I suggested $75 billion is low, but if that is all we can ine, with all of that debt, with the rec- billion in aid to the States. That get, that is what we face. I thank all ognition that we have gone from a $5 sounds like a pretty large sum, but I my colleagues who have worked on trillion surplus to a $2 trillion deficit, suggested in the introduced legislation this. that anyone could possibly feel com- to provide up to $75 billion because, in Madam President, I now yield 3 min- fortable supporting a tax cut of the my judgment—and I think it is the utes to the Senator from New York. magnitude we are talking about to- judgment of most economists—dollars The PRESIDING OFFICER. The Sen- night. that are spent to help States to bal- ator from New York.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00063 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6210 CONGRESSIONAL RECORD — SENATE May 14, 2003 Mr. SCHUMER. Madam President, I Mr. BAUCUS. Madam President, it is rules under section 6720(c) of title 31, United thank my colleague from Montana. I my understanding that all Senators States Code, shall apply. add my remarks to his. I agree with who wished to speak on the Collins SEC. 371A. TEMPORARY STATE FMAP RELIEF. him completely. I am in full support of amendment have spoken. (a) PERMITTING MAINTENANCE OF FISCAL the Collins-Rockefeller-Nelson amend- I ask unanimous consent that all YEAR 2002 FMAP FOR LAST 2 CALENDAR ment. Our localities and States des- pending amendments be temporarily QUARTERS OF FISCAL YEAR 2003.—Notwith- standing any other provision of law, but sub- perately need aid. It makes no sense to laid aside so the Senator from Wash- ject to subsection (e), if the FMAP deter- tell John Q. Citizen that he will get a ington can offer her amendment. mined without regard to this subsection for $100 rebate from the Federal Govern- The PRESIDING OFFICER. Without a State for fiscal year 2003 is less than the ment and then have his State and local objection, it is so ordered. The Senator FMAP as so determined for fiscal year 2002, taxes rise $100. That does not put from Washington. the FMAP for the State for fiscal year 2002 shall be substituted for the State’s FMAP for money in his pocket and stimulate the AMENDMENT NO. 564 the third and fourth calendar quarters of fis- economy. Mrs. MURRAY. Madam President, I Madam President, $20 billion is a de- cal year 2003, before the application of this call up amendment No. 564. cent sum, half going to FMAP and half section. The PRESIDING OFFICER. The to direct aid. I would like to see a little (b) PERMITTING MAINTENANCE OF FISCAL clerk will report. YEAR 2003 FMAP FOR EACH CALENDAR QUAR- more going to localities. It is 60–40, as The legislative clerk read as follows: TER OF FISCAL YEAR 2004.—Notwithstanding I understand it. My original proposal any other provision of law, but subject to The Senator from Washington [Mrs. MUR- with Senator COLLINS and Senator subsection (e), if the FMAP determined with- RAY], for herself, Mr. DASCHLE, Mr. BAUCUS, SNOWE was 50–50. That would be a little out regard to this subsection for a State for Mr. ROCKEFELLER, Mr. WYDEN, Mr. SCHUMER, fiscal year 2004 is less than the FMAP as so fairer because localities need help in and Mr. CORZINE, proposes an amendment property taxes a lot. But this is a good numbered 564. determined for fiscal year 2003, the FMAP for the State for fiscal year 2003 shall be sub- start. I am glad it is in the bill. I hope Mrs. MURRAY. Madam President, I it will stay in the bill because our lo- stituted for the State’s FMAP for each cal- ask unanimous consent that the read- calities desperately need aid. endar quarter of fiscal year 2004, before the ing of the amendment be dispensed application of this section. Property taxes are going through the (c) GENERAL 4.95 PERCENTAGE POINTS IN- roof, and the best property tax circuit with. The PRESIDING OFFICER. Without CREASE FOR LAST 2 CALENDAR QUARTERS OF breaker is local aid. I wish it was high- FISCAL YEAR 2003 AND EACH CALENDAR QUAR- er as well, and I am glad that in a few objection, it is so ordered. The amendment is as follows: TER OF FISCAL YEAR 2004.—Notwithstanding minutes, my colleague from Wash- any other provision of law, but subject to ington will be offering an amendment (Purpose: To provide temporary State fiscal subsections (e) and (f), for each State for the that doubles that amount. relief) third and fourth calendar quarters of fiscal The original legislation that Senator Strike section 371 and insert the following: year 2003 and each calendar quarter of fiscal SNOWE and I introduced was $40 billion. SEC. 371. GENERAL REVENUE SHARING WITH year 2004, the FMAP (taking into account I know my friend from Montana origi- STATES AND THEIR LOCAL GOVERN- the application of subsections (a) and (b)) MENTS. shall be increased by 4.95 percentage points. nally proposed $75 billion. Even that (a) APPROPRIATION.—There is authorized to (d) INCREASE IN CAP ON MEDICAID PAYMENTS would not be enough to do what we be appropriated and is appropriated to carry TO TERRITORIES.—Notwithstanding any need to do. I hope we can raise the out this section $20,000,000,000 for fiscal year other provision of law, but subject to sub- amount. Again, States and localities 2003. section (f), with respect to the third and need it. (b) ALLOTMENTS.—From the amount appro- fourth calendar quarters of fiscal year 2003 Cities and counties throughout my priated under subsection (a) for fiscal year and each calendar quarter of fiscal year 2004, State are raising taxes. That is going 2003, the Secretary of the Treasury shall, as the amounts otherwise determined for Puer- to put a real damper not only on New soon as practicable after the date of the en- to Rico, the Virgin Islands, Guam, the York’s economy but on America’s actment of this Act, allot to each of the Northern Mariana Islands, and American economy. Local aid prevents some of States as follows, except that no State shall Samoa under subsections (f) and (g) of sec- receive less than 1⁄2 of 1 percent of such tion 1108 of the Social Security Act (42 that from happening. amount: U.S.C. 1308) shall each be increased by an This is one of the most important (1) STATE LEVEL.—$16,000,000,000 shall be al- amount equal to 9.90 percent of such provisions in this bill. There are a lot lotted among such States on the basis of the amounts. of provisions in the bill that Senator relative population of each such State, as de- (e) SCOPE OF APPLICATION.—The increases GRASSLEY has proposed with which I termined by the Secretary on the basis of in the FMAP for a State under this section agree. There are some with which I dis- the most recent satisfactory data. shall apply only for purposes of title XIX of agree. But there is probably none that (2) LOCAL GOVERNMENT LEVEL.— the Social Security Act and shall not apply is more needed, more demanded by the $4,000,000,000 shall be allotted among such with respect to— Governors, mayors, county officials, States as determined under paragraph (1) for (1) disproportionate share hospital pay- town and village officials than the pro- distribution to the various units of general ments described in section 1923 of such Act local government within such States on the (42 U.S.C. 1396r–4); posal the Senator from Maine, the Sen- basis of the relative population of each such (2) payments under title IV or XXI of such ator from West Virginia, and the Sen- unit within each such State, as determined Act (42 U.S.C. 601 et seq. and 1397aa et seq.); ator from Nebraska have brought be- by the Secretary on the basis of the most re- or fore us. cent satisfactory data. (3) the percentage described in the third I am going to support it rather en- (c) DEFINITIONS.—For purposes of this sec- sentence of section 1905(b) of the Social Se- thusiastically, only tempered by the tion— curity Act (42 U.S.C. 1396d(b)) (relating to fact that I think it should be more. I (1) STATE.—The term ‘‘State’’ means any of amounts expended as medical assistance for hope it can be more. I hope it does not the several States, the District of Columbia, services received through an Indian Health get any lower, I say to my good friend and the Commonwealth of Puerto Rico. Service facility whether operated by the In- (2) UNIT OF GENERAL LOCAL GOVERNMENT.— dian Health Service or by an Indian tribe or from Iowa, in conference and in other (A) IN GENERAL.—The term ‘‘unit of general tribal organization (as defined in section 4 of places. He is shaking his head yes, let local government’’ means— the Indian Health Care Improvement Act)). the record show. I hope he is saying, (i) a county, parish, township, city, or po- (f) STATE ELIGIBILITY.— yes, it should not get lower not, yes, it litical subdivision of a county, parish, town- (1) IN GENERAL.—Subject to paragraph (2), a should get lower. ship, or city, that is a unit of general local State is eligible for an increase in its FMAP This is a very important amendment. government as determined by the Secretary under subsection (c) or an increase in a cap I will fully support it. I was involved in of Commerce for general statistical pur- amount under subsection (d) only if the eligi- helping to push this local aid issue. I poses; and bility under its State plan under title XIX of hope we can increase the amount with (ii) the District of Columbia, the Common- the Social Security Act (including any waiv- wealth of Puerto Rico, and the recognized er under such title or under section 1115 of the amendment of the Senator from governing body of an Indian tribe or Alaskan such Act (42 U.S.C. 1315)) is no more restric- Washington. native village that carries out substantial tive than the eligibility under such plan (or I yield back the remainder of my governmental duties and powers. waiver) as in effect on July 1, 2003. time. (B) TREATMENT OF SUBSUMED AREAS.—For (2) STATE REINSTATEMENT OF ELIGIBILITY The PRESIDING OFFICER. The Sen- purposes of determining a unit of general PERMITTED.—A State that has restricted eli- ator from Montana. local government under this section, the gibility under its State plan under title XIX

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00064 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6211 of the Social Security Act (including any ment offers an additional $20 billion for countability measures, but the assist- waiver under such title or under section 1115 our struggling States and local govern- ance that was promised has never been of such Act (42 U.S.C. 1315)) after July 1, 2003, ments. In total, my amendment pro- delivered. but prior to the date of enactment of this vides $40 billion in immediate assist- On homeland security, State and Act is eligible for an increase in its FMAP under subsection (c) or an increase in a cap ance to our ailing States. local law enforcement must work over- amount under subsection (d) in the first cal- Here is how the money will be di- time whenever the threat level is endar quarter (and any subsequent calendar vided: $20 billion will go to general rev- raised. For many States and localities, quarters) in which the State has reinstated enue sharing. Of that, $16 billion is for homeland security is on the verge of eligibility that is no more restrictive than State governments, including Wash- becoming another unfunded mandate. the eligibility under such plan (or waiver) as ington, DC, and Puerto Rico; $4 billion Unfortunately, in response to the cri- in effect on July 1, 2003. is for local governments, and each ses in our States, the President pro- (3) RULE OF CONSTRUCTION.—Nothing in State will receive a minimum of $100 posed nothing to help them. It is like paragraph (1) or (2) shall be construed as af- million. fecting a State’s flexibility with respect to the famous newspaper headline: ‘‘Ford The other $20 billion goes to States to City: Drop Dead.’’ The House of Rep- benefits offered under the State medicaid for Medicaid relief. This provision program under title XIX of the Social Secu- resentatives followed the President’s rity Act (42 U.S.C. 1396 et seq.) (including would temporarily increase the Federal lead in leaving States in crisis. It took any waiver under such title or under section matching rate for Medicaid. If we are Democratic efforts in the Senate to 1115 of such Act (42 U.S.C. 1315)). going to help our economy recover, we build bipartisan support for our States. (g) DEFINITIONS.—In this section: need to help our States and local gov- I am proud of the work that Demo- (1) FMAP.—The term ‘‘FMAP’’ means the ernments get through this crisis. crats have done to add $20 billion to Federal medical assistance percentage, as All of my colleagues know the plight the tax legislation to help our States defined in section 1905(b) of the Social Secu- of our States. My home State of Wash- rity Act (42 U.S.C. 1396d(b)). get through this difficult time. I also ington continues to suffer real eco- commend my colleagues on the other (2) STATE.—The term ‘‘State’’ has the nomic problems, and it illustrates the meaning given such term for purposes of side who are working on this issue. I title XIX of the Social Security Act (42 importance of adopting the Murray applaud their work in the face of U.S.C. 1396 et seq.). amendment. Washington State has the strong opposition from the President (h) REPEAL.—Effective as of October 1, 2004, second highest unemployment rate in and the Republican party leadership. this section is repealed. the Nation at 7 percent. My colleague My amendment will help States deal SEC. 371B. ELIMINATION OF 20 PERCENT PAR- from Oregon, Senator WYDEN, who is with education, as many State univer- TIAL EXCLUSION OF DIVIDENDS RE- going to be speaking in just a few min- sities and community colleges are fac- CEIVED BY INDIVIDUALS. utes, shares the distinguished record of Section 116(a)(2)(B), as added by section 201 ing double-digit tuition increases. My having the highest unemployment in of this Act, is amended by striking ‘‘(20 per- amendment will also help States ad- the Nation go back and forth between cent in the case of taxable years beginning dress their Medicaid shortfalls by tem- Oregon and Washington in the last 2 after 2007)’’. porarily raising the Federal share of Mrs. MURRAY. Madam President, I years. In Washington State, since the spring Medicaid payments. rise to offer an amendment that will Given the fiscal crisis in our States, of 2001, we have lost tens of thousands help address the real needs of families this additional support is critical of jobs. In fact, one in nine Washington in cities and States all across this residents does not have health care today. This aid will allow our States to country. I thank my cosponsors Sen- coverage today, and 150,000 people in maintain health care coverage for our ators DASCHLE, BAUCUS, ROCKEFELLER, my State have lost health insurance in most vulnerable citizens. WYDEN, KOHL, SCHUMER, EDWARDS, and Some of my colleagues may hear the the last 2 years. In the last 2 years CORZINE. alone, we have faced in my State an word ‘‘Medicaid’’ and think I am just As I look at the current tax proposal, earthquake, an energy crisis, declines talking about helping low-income fam- I do not see much that will provide an in our technology sector, the downturn ilies. That is true and it is critical, but immediate stimulus to our economy or of Boeing, and the loss of thousands of it is much more than that. help working families who are strug- jobs. And now we face a State budget Yes, Medicaid does provide coverage gling during this recession. In fact, to- deficit of $2.7 billion. That translates for more than 42 million low-income, day’s Washington Post said that even to dramatic cuts in education, health disabled, and elderly Americans, but some Republicans consider this plan care, transportation, and social serv- let’s not forget that Medicaid plays a ‘‘bizarre and economically suspect.’’ ices. major role in America’s health care de- This tax bill ignores the real needs These programs are more important livery system. that families are facing, and it dra- now than ever because times are so It pays for about half of all nursing matically increases the deficit, all to tough. Unfortunately, as we all know, home care. It pays for 17 percent of pre- give massive tax cuts to a very few. many other States are facing very scription drug coverage. That is an approach that has already similar challenges. In fact, today our Hospitals, doctors and clinics in failed us. Simply put, this tax bill fails States are experiencing the most se- every State rely on Medicaid as a sig- America’s families. So tonight I am of- vere economic crisis since World War nificant source of revenue. fering an amendment to put some stim- II. Nationwide, States are facing defi- Cuts in Medicaid could close nursing ulus and relief into this no-stimulus cits totaling $70 billion to $85 billion. homes. Cuts could make it harder for bill. Experts are warning us that 1.7 mil- middle class families to pay for long- The Murray amendment provides di- lion people nationwide risk losing Med- term care for their aging parents or rect help where it is so badly needed— icaid coverage as States cut their budg- relatives. It could mean lower wages in our States and in our local commu- ets. In fact, in Washington State, ac- for nurses in long-term care facilities. nities. My amendment addresses a cri- cording to our insurance commissioner, Finally, let me emphasize, it could sis in health care that jeopardizes ac- 60,000 children will lose access to have a major impact on women because cess for all Americans. health care unless we help. That is 70 percent of Medicaid beneficiaries Currently, the underlying bill, as we 60,000 children in Washington State over age 15 are women. just heard, offers $20 billion in aid to alone. Unlike the Federal Government, Unless we address the Medicaid the States. By the way, that funding is States do not have the option of deficit shortfall, we will feel the impact every- only there because Democrats fought spending. Instead, States are forced to where. for it. That is a major accomplishment cut existing programs or raise new rev- When poor kids, families, and moms considering the President’s plan in- enues to balance their budgets. do not have health care, kids show up cluded nothing for our ailing States, To add to the State’s budget crises, at school sick, moms cannot care for and the House also failed our States. the Federal Government has created families, and parents do not go to While $20 billion is a victory in our costly new mandates in areas such as work. That affects everyone. It will add current political environment, we all education and homeland security. to the 41 million Americans who do not know it is not enough to help our The ‘‘No Child Left Behind’’ law re- have health insurance, and that will States recover quickly. So my amend- quired States to implement new ac- add to the costs we all pay for health

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00065 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6212 CONGRESSIONAL RECORD — SENATE May 14, 2003 care. This affects families and busi- I yield 15 minutes to my colleague millions of baby boomers retiring and nesses in the form of much higher in- from Oregon, who is a cosponsor of this the technology explosion, it is not on surance premiums. amendment and who knows in his the level if you are not willing to make Finally, when Medicaid is under- State how much they are struggling as some tough choices in health care. funded, it puts more pressure on our they try to meet a crisis, as so many That is what my home State did a doctors, hospitals, and clinics that are other States are. number of years ago with the Oregon already struggling. We are losing doc- The PRESIDING OFFICER. The Sen- Health Plan; we held the first nation- tors and seeing hospitals close today. ator from Oregon. wide debate about how to go about We cannot afford to let things get Mr. WYDEN. Madam President, I making choices in health care, making worse. We need to improve the under- thank Senator MURRAY, the lead spon- sure you are doing prevention first in lying tax bill so it addresses the real sor for this legislation. kids and pregnant mothers. And all the challenges facing families in our States Oregon and Washington are really services we know will reap great bene- and local communities. States are fac- ground zero as far as the economic hurt fits in the years ahead. ing a fiscal crisis, and my amendment in this country, and I thank her for all That is the program that has been provides $20 billion in aid. States are of her leadership and support. slashed. It was not a program that en- facing a healthcare crisis, and my I will take only a few minutes to- gendered a lot of fancy services or Cad- amendment provides another $20 bil- night because I know we have had a illac health care or profligate spending. lion to make up the Medicaid shortfall. number of speakers on this topic, but I It was a program that focused on the This amendment is a chance to im- think it is time to put a human face on basics, on the essential health care prove what has been called a ‘‘bizarre this issue and try to make sure that services, on services that by anyone’s and economically suspect’’ tax plan. people really understand what is at analysis are just plain vanilla, essen- Before I close, I want to clarify some- stake. tial services for our citizens. thing that we may hear during this de- In Eugene, OR, where I went to I bring this up by way of saying, as bate. I want my colleagues to know school, parents have recently been sell- we move tonight to close out the dis- that this is not about bailing out ing their own blood plasma—that’s cussion of these amendments, I cer- States that have overspent. We are right, their own blood plasma—to pay tainly support the Collins amendment. talking about individual Americans for a math teacher’s salary for one It is very helpful. I would like to go and their access to services like vision more year because the school district further, for all the reasons Senator and dental care, asthma medicine, hos- has been unable to come up with the MURRAY has described tonight, that we pice care, and physical therapy. So cash to pay for a math teacher. I think think about these consequences in when my colleagues blame the States that really says it all. human terms: What is going on today in Eugene, OR, what is going on with for this crisis, they are choosing their As Senator MURRAY and other col- the Oregon Health Plan where people words carefully. They do not dare leagues talked about, we are not talk- did make tough and courageous calls. blame the disabled, the elderly, poor ing about luxuries. We are not talking A lot of the States must be won- about something that would be frivo- children and their parents, but that is dering now, what was the point of try- lous or on somebody’s wish list. We are who they are really talking about, the ing to be innovative? What was the talking about the most essential serv- people who will lose access to health point of trying to be innovative be- ices in our society, making sure that care unless we pass the Murray amend- cause when there were tough financial kids get a good start, and decent ment. circumstances nationally beyond their health care. Let’s not forget that our States have control, the Federal Government said: What it has come to in my State, had to pick up the bills because the That is the way it goes, we are not which is in its third year now of finan- Federal Government has not done its going to do anything to help tide you cial meltdown, is we have parents actu- job in certain areas. over so innovative programs such as ally going out and selling blood. For example, because we have not re- the Oregon Health Plan are not deci- Something is really out of whack in formed health care at the Federal mated. level, States have had to deal with this country when somehow the Con- These are critical issues. The budget more and more residents on Medicaid. gress is going to find ways to come up cuts we have seen in health care and Because Federal assistance for tuition with billions of dollars to rebuild Iraq, education are not going to be quickly has been cut, there is more pressure on but the Congress of the United States healed. Regarding the national econ- State-funded universities. To those will not come up with the dollars that omy, we all hope for a speedy recovery, pressures we can add the Federal Gov- are needed to rebuild the States. That but it seems to me, by any calculation, ernment’s failure to fund the education is what this effort on a bipartisan basis the States are going to need significant law and new homeland security man- is all about. and ongoing help to ameliorate the dates. In my home State, we now have damage that has been done and to start So this is not about bailing out schools closing a month early. We pulling together the tatters of the so- States that have done something brought an end to the medical-needy cial safety net and begin to help our wrong. This is about recognizing our program which helped nearly 9,000 low- citizens again. We are not going to re- responsibility to pay for the things we income Oregonians with unusually pair that tattered safety net with just have required at the Federal level. We high health costs who do not qualify a few needles and thread; we will do it know there is an economic crisis in our for our innovative health plan. More with real and tangible help, the way States, and this is a chance to provide than 2,500 older adults and persons with the Murray amendment seeks to do. some critical support. disabilities have lost adult care, as- I come to the Senate tonight to make Unless we provide some real aid to sisted living care, nursing home care, it clear, what we seek to do in these our States, Congress and the President and the list really goes on. important amendments is to try to will just be passing the tax burden on I particularly wanted to highlight give our States the tools in this strug- to the local level. Let’s do the respon- the fact that these cuts and the hard- gle to provide the most critical of serv- sible thing. ship that has been engendered as a re- ices, to tell them they are going to I think that any Senator who votes sult of these cuts comes about at a have a little bit more to get by with against the Murray amendment will time when some of our States have during unprecedented times. have a hard time explaining to their been on the cutting edge of innovation. School finance in Oregon has been Governor, their mayors, and all their I will take a minute to describe our cut so drastically they have curtailed citizens why they left their State hang- health plan. The State of Oregon has the school year in some districts. We ing in order to provide a massive tax been the only State in the country—in have been laying off teachers left and cut to the few, which will not result in fact, the only political jurisdiction on right. We have no way to attract them. immediate economic growth. the planet—that has been willing to Senator SMITH and I co-hosted an im- I urge my colleagues to vote for the force a discussion about tough calls in portant economic development summit Murray amendment, and I thank my health care. Many feel, given the demo- at the end of last year with 1,300 busi- co-sponsors. graphics tsunami that is ahead with ness leaders from all over the State.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00066 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6213 They are worried, as a business com- I support the Murray amendment. States have cut the fat from their munity, that with the shortening of This amendment is critical to New budgets and depleted reserves. They the school year in the country, it will York. It will help thousands of New now are cutting muscle. To balance be very tough to grow existing busi- Yorkers keep their jobs, maintain the their budgets for fiscal 2004, States are nesses and to attract new ones. State services they rely on, and most in the process of eliminating thousands Suffice it to say, we are not really importantly avoid the burden of in- of jobs. happy about the Doonesbury cartoons creasing taxes. I cannot state that In many States, the jobs that will be either. We have been first so often in more clearly—without this legislation lost are vital to our communities: po- my home State—with environmental the tax burden on citizens in my State licemen, firefighters, teachers, postal protection, mass transit—but we are will go up. That threatens to undo the workers, and bus drivers. In New York not pleased to be first in terms of eco- very stimulus we all believe is nec- these were the jobs of the everyday he- nomic hurt and unemployment and the essary. roes that we celebrated after the trage- kinds of problems we have been out- As we all know, New York is not dies of September 11. lining on the floor tonight. alone. States are facing their worst fis- States also are eliminating many We have to start filling the holes in cal crisis since World War II. The Gov- critical programs and reducing funds these devastated budgets. The situa- ernor of New York, George Pataki, available for those programs that re- tion is dire. In the face of this unprece- stated the situation in all of our States main. dented suffering, many in the Senate and cities clearly, ‘‘We face a fiscal cri- Among the most vulnerable targets believe the $20 billion allocated is not sis today of a magnitude that we have are those services that working fami- enough and the Senate must do better. not faced in our lifetime.’’ lies rely on, such as childcare and ele- Ultimately, budgets are about According to estimates provided by mentary and secondary education. choices. Budgets are not just about the National Conference of State Leg- Without funds, school improvements charts and graphs and figures and lots islatures, the total budgetary shortfall will not be made. Libraries will not be of dark ink on paper. Budgets are for all States in fiscal year 2004 was in upgraded. Staff will be cut. Class sizes about hopes and aspirations and what the range of $80 billion, and an approxi- will dramatically increase. kind of country we want. I don’t want mate $22 billion gap still remains from All of this is happening today. As one a country and I don’t want a State to fiscal 2003. Many believe these figures school superintendent stated, ‘‘It is the have to sit by while the Government remain significantly understated. worst thing that has happened in my does not respond when people have to Almost every State is running a sig- thirty years in public education.’’ sell blood to finance a teacher’s salary nificant, multi-hundred million dollar This comes at a time when, as a na- and we end up having the devastation deficit. In many States, the figure runs tion, we are striving to raise our chil- to an innovative state-of-the-art health into the multi-billions of dollars. In dren’s test scores and improve overall plan, the way the Oregon Health Plan several States, the deficit’s percentage school performance. In addition, in was at the outset. of the total State budget is estimated many states the cost of higher edu- I don’t want to tell the people of my to be in the range of 25 percent or cation is increasing. Tuition at some home State, and I don’t think others in more. New York State’s budget short- State colleges and universities has this body want to either, that the U.S. fall alone is $12 billion dollars. been raised over 20 percent. Also vul- Congress can figure out a way to come The situation at the local level is nerable are programs that help those up with billions and billions of dollars just as dire. According to the National most in need during difficult times. to reconstruct Iraq, hundreds of mil- Association of Counties, nearly 72 per- lions of dollars for tax cuts, and simply cent of counties are facing budget States now bear the responsibility not come up with the critical dollars shortfalls, 37 percent are reducing serv- for numerous programs and services needed to keep our kids in school for a ices, and 17 percent are increasing that provide the safety net that our full year, to keep older people in health taxes—all at a time when the demand citizens rely on. For example, as we care systems that are a lifeline for for services and the need for tax cuts is know well, states fund a large percent- them. rising given the sour economy. age of the cost of Medicaid. During the I hope our colleagues will support the This is not a regional issue. It is a current fiscal crisis, according to the Murray amendment. The very least the national crisis. Kaiser Commission on Medicaid and Senate can do is to keep the huge budg- Unlike the Federal Government, the Uninsured, Medicaid programs have etary hole the States have found them- which has seen its fiscal position been cut substantially. This will place selves in from getting deeper and change from a budgetary surplus in an enormous burden on our society. wider. The Murray amendment ensures 2000 to a newly estimated deficit of States clearly need funding to pay for that can be done. over $300 billion in fiscal 2003, almost Medicaid. I urge the passage of this critical every state is required by law to have In addition, programs such as job- amendment. I yield the floor. a balanced budget. To achieve this the training, housing subsidies, and other Mr. SCHUMER. Madam President, I only options are to raise taxes and/or services for lower-income citizens are first thank my colleague, Senator cut spending. at risk. MURRAY, for her sponsorship of this State taxes are increasing in three Most importantly, states now face vital amendment. I also want to spe- ways. First, state income tax rates are extraordinary demands to provide the cifically recognize Senator GRASSLEY, increasing. Second, property tax rates protection citizens require in the new the distinguished chairman of the Fi- are skyrocketing. In New York City, post-9/11 world. They face increased re- nance Committee, and Senator BAUCUS, Mayor Bloomberg was forced to raise sponsibilities to patrol ports, bridges the distinguished ranking member, for property taxes over 18 percent to pre- and tunnels, to train emergency re- their leadership in putting State and serve vital services. Third, States are sponse personnel, and to put in place local fiscal relief on the agenda. I increasing sales taxes, excise taxes, the infrastructure to protect their citi- should also note the bipartisan effort and other fees. As the New York Times zens. of Senators COLLINS, ROCKEFELLER, recently reported ‘‘at least 15 states In the current world, with threats on SMITH and NELSON which helped estab- have raised taxes, five of them by 5 per- our home soil at high levels, and on the lish State aid in the budget debate. Fi- cent or more.’’ brink of a war with a nation accused of nally, Senator SNOWE deserves special This increasing tax burden falls heav- sponsoring international terrorism, we recognition for her early and steadfast ily and squarely on the backs of our cannot abandon our States and cities. support of this legislation. working families. It will make it hard- We must give them the funds they need The fiscal crisis in our States and er for them to make ends meet in these to protect our citizens. cities is a national problem that re- already difficult economic times when The solution is to provide direct Fed- quires bipartisan cooperation in the every dollar counts. eral aid to the States and localities best spirit of the Senate, and I am State spending cuts follow 2 years of within the budget. We have had bipar- proud to be working together with my a deteriorating economic environment tisan agreement to provide $20 billion esteemed colleagues. and fiscal outlook. During that time, in direct Federal aid to the States and

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00067 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6214 CONGRESSIONAL RECORD — SENATE May 14, 2003 localities on a one-time basis. I com- good intentions behind people who AMENDMENT NO. 614 mend Senator GRASSLEY for his leader- have higher figures in mind, including Ms. STABENOW. Madam President, I ship in getting this done. It is a very the amendment by the Senator from send an amendment to the desk and good start, but it not enough. Washington. There are Members on ask for its immediate consideration. I have heard some argue that state both sides of the aisle for whom fiscal The PRESIDING OFFICER. The aid is not good economic policy, but relief is a key component of any larger clerk will report. numerous reports indicate that a very tax and jobs package. I have worked The assistant legislative clerk read large number of economists believe hard to accommodate Members’ prior- as follows: that aid to the States is, in fact, an ex- ities relative thereto. The Senator from Michigan (Ms. STABE- tremely effective means of providing A number of provisions in this NOW) proposes an amendment numbered 614. fiscal stimulus, as it quickly puts amendment have been addressed by the Ms. STABENOW. I ask unanimous money in the hands of people who need State fiscal conservative relief amend- consent the reading of the amendment it and will spend it. ment offered by Senator COLLINS. The be dispensed with. State and local aid also alleviates State fiscal relief amendment offered The PRESIDING OFFICER. Without the need for States to cut more jobs, by Senator COLLINS represents a sig- objection, it is so ordered. cut more programs, and raise taxes, nificant boost to States. It provides $20 The amendment is as follows: which acts as an ‘‘antistimulus’’ on the billion. To me, that is lots of money. (Purpose: To ensure the enactment of a economy. Without any State aid, an in- This is much more money than some medicare prescription drug benefit) dividual’s or family’s decreased in Fed- would like to spend at all. However, At the end of end of subtitle C of title V, eral taxes could be surpassed by an in- there will be those for whom no add the following: crease in State and local taxes. amount of spending will ever be SEC. . ENSURING ENACTMENT OF A MEDICARE We should not support policies where, enough. PRESCRIPTION DRUG BENEFIT. (a) TRIGGER.—Notwithstanding any other ‘‘What one hand giveth the other I am not saying Senator MURRAY is provision of this Act, the provisions as de- taketh away.’’ We should not ‘‘rob one of those for whom no amount of scribed in subsection (b) shall not take effect Peter to pay Paul.’’ money would ever be enough. All I am except as provided in subsection (c). This modest increase in the amount saying is that at some point we have to (b) PROVISION DESCRIBED.—A provision de- of aid is a one-time shot in the arm for determine a final dollar amount for scribed in this subsection is— the States. It is not an enormous, State aid. (1) section 102 of this Act to the extent multi-year change that threatens to We have an amendment that provides such section accelerates the scheduled phase build more deficits. It is a short-term $20 billion for States, and I think we down of the top tax rate of 38.6 percent to 37.6 percent in 2004 and to 35 percent in 2006; proposal in response to a crisis that should stick with that number. There- and threatens to further drag down our fore, Senator MURRAY’s amendment at (2) section 116(a)(2)(B) of the Internal Rev- economy and further increase the tax $40 billion is too expensive and must be enue Code of 1986, as added by section 201 of burden on our citizens. opposed. I urge my colleagues to vote this Act. Some argue that States and cities against this amendment. I urge them (c) DELAY UNTIL ENACTMENT OF A MEDICARE have dug their own fiscal graves, and to support the Collins amendment. PRESCRIPTION DRUG BENEFIT.—The provi- should now lie in them. I could not dis- I yield the floor. sions described in subsection (b) shall apply agree more. Our States and cities face Mr. BAUCUS. I yield whatever time to taxable years beginning in or after the calendar year in which a prescription drug the same economic forces as the Fed- the Senator from Washington desires. benefit under the medicare program under eral Government. As the economy has The PRESIDING OFFICER. The Sen- title XVIII of the Social Security Act (42 forced a dramatic reversal in fiscal ator from Washington. U.S.C. 1395 et seq.) is enacted that is— health in our Federal budget, so has it Mrs. MURRAY. Madam President, I (1) available to all beneficiaries under such wreaked havoc on local budgets. know there are many other Senators program; and Why should we hold States and local- on the floor who wish to speak to their (2) actuarially equivalent to the Blue Cross ities to a different standard than we amendments. Let me conclude this and Blue Shield benefit offered through the hold ourselves? amendment debate by saying how im- Federal employees health benefits program. If we want to teach States a lesson, portant it is for our States that are Ms. STABENOW. Madam President, I why should we force citizens to bear struggling today with $75 billion or $80 rise this evening to offer an amend- the brunt of that discipline through billion in debt, that we do everything ment that seeks to set the right prior- higher taxes on their income, bigger we can to get the economy going in a ities for us in the Senate and in the class sizes for their children, and less true economic stimulus package to Congress as we move forward this year services for those in need? provide funds for those States to assure with the budget. My amendment is The money we are discussing is not a they do not lose people off health care, simple. It says before the dividend tax bailout. Nowhere close. States and that their education systems are in- cut and the acceleration of the top tax locals will still need to make painful tact, and they have the ability to deal rate go into effect, Congress must pass cuts and possibly raise taxes. But we with their budget crisis and we don’t a Medicare prescription drug bill that can help alleviate the pain which will add to it with fiscally irresponsible tax is actuarially equivalent to the value fall not on lawmakers, as we all know, cuts that preclude them from being of the Blue Cross standard option but on our citizens. able to provide the services that are so under the Federal Employees Health As President John Kennedy once critical today. Benefits Program, known as FEHBP, said, ‘‘Let us seek not the Democratic I ask for the yeas and nays on this for all Medicare beneficiaries. solution or the Republican solution, amendment. This is a question of our values and but the right solution.’’ The PRESIDING OFFICER. Is there a priorities. My amendment is a promise This is the right solution. I fully and sufficient second? to our Nation’s seniors. It says you are enthusiastically support Senator MUR- There is a sufficient second. as important as the elite in this coun- RAY’s amendment. The yeas and nays were ordered. try; we are finally going to get some- The PRESIDING OFFICER. Who The PRESIDING OFFICER. The Sen- thing done; and that it will be some- yields time? ator from Montana. thing that is equal to what we receive Mr. GRASSLEY. Madam President, I Mr. BAUCUS. Madam President, I in the U.S. Senate. This is the third spoke earlier in support of the Collins ask unanimous consent all pending consecutive Congress that has consid- amendment which is a $20 billion fiscal amendments be temporarily set aside ered adding an outpatient prescription relief package. We have been told that and the Senator from Michigan be rec- drug benefit under Medicare. In the $20 billion is a drop in the bucket. I ognized for the purpose of offering an last two Congresses we were unsuccess- don’t think $20 billion is a drop in the amendment. ful. To be fair, we were unsuccessful bucket. We have been told that maybe The PRESIDING OFFICER. Is there with a Democratic President, a Repub- $75 billion is not enough for State aid. an objection? Without objection, it is lican President, a Democratic Con- We have to be fiscally responsible as so ordered. gress, a Republican Congress. The re- we approach this. I do not fault the The Senator from Michigan. ality is we have not yet been able to

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00068 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6215 deliver for our seniors the promise of that plan—and I have great concerns gested in totality over the next 75 prescription drug coverage under Medi- about anything outside of Medicare— years, we would see a cost of over $14 care. they all agree that this plan that we trillion. I believe the time is up. Our seniors and other Federal employees have of- At the same time, the projected and those who are disabled, who depend fers excellent prescription drug cov- Medicare and Social Security deficit is on Medicare, are counting on us to get erage for Federal employees. $10 trillion. this done this year. I think most of us agree our seniors I go back again to my concern that In order to be able to do that, we deserve the same opportunity to have this an issue of priorities. We have one need to impose some discipline on our- prescription drug coverage equal to proposal that creates a $14 trillion selves. We have to hold our feet to the what we or other Federal employees re- cost. At the same time that we know fire in order to get this done. This ceive. However, the current budget res- we have an unfunded liability in Social amendment says to the House and Sen- olution does not allow for that. It does Security and Medicare of $10 trillion, ate and the administration that we not provide for the resources to do why in the world would we do that? must all work together to pass a mean- that. So despite the comments I have Why in the world would anybody? This ingful prescription drug benefit or a heard on a number of occasions from is what the economists are talking major component of the tax cut that is colleagues that, in fact, we ought to be about. Over 450 economists have come supported by the majority will not go providing similar coverage, the budget out against this, saying it will not cre- into effect. resolution does not provide the re- ate jobs; it will just create more mas- I would like to make it clear that my sources. So this, again, is a question of sive debt; it will create instability long amendment does not eliminate the tax priorities. It is a question of values. term in the economy; it jeopardizes cuts on dividends or those for the peo- What should come first, fulfilling the Medicare and Social Security. ple who pay the highest rates. As long promise of a quality prescription drug These are the numbers they are look- as we pass a meaningful prescription benefit for our seniors under Medicare ing at. Why in the world would any- drug benefit, these tax cuts would take or proceeding with a tax cut geared to body with common sense looking at effect as scheduled. the elite in this country? this say we ought to go in this direc- Having said that, I want to also indi- I think it is particularly of concern tion? If we didn’t go in this direction, cate that I do not believe, from an eco- that we focus on this, particularly in and if we agreed to the amendment we nomic standpoint, that is the best way light of the overwhelming evidence are talking about, we would be sending to stimulate the economy. I agree with that those particular tax cuts will not a clear message that we are committed the over 450 economists who have said stimulate the economy in the short to really providing Medicare prescrip- this will not create jobs; it will not cre- run, will not create jobs, will not cre- tion drug coverage and not just talking ate growth. But if in fact there is sup- ate growth. No matter how many times about it for another session but really port to pass the tax breaks geared to Members say that, with all due respect, providing it for our seniors and for the the elite in the country, I ask my col- we have overwhelming evidence—450 disabled. And we would be sending a leagues to at least be willing to hold economists, 10 Nobel laureates, con- message that we are making a long- off. At least be willing to hold off until cerns by Chairman Greenspan—and term commitment to Medicare and So- we can fulfill the promise of an out- only 13 economists on the side, saying cial Security. patient prescription drug benefit under it is a good idea. My fear is, if we proceed down the Medicare. Before we go ahead with something road as we currently are as a Congress, My amendment says this should be we know is not a short-term stimulus, that we are creating a situation which available to all seniors, not just seniors doesn’t create jobs, doesn’t create will lend itself to the argument of in private insurance, as has been pro- growth, and, in fact, created red ink as those who say we can’t afford Medicare posed by the President and by others, far as the eye can see, I ask that we and Social Security anymore. We heard but all seniors should be able to get the stop. that. We heard we can’t afford prescrip- same prescription drug coverage. Whether Members wish to have a div- tion drug coverage; we can’t afford In addition, this amendment says the idend tax cut and a top rate cut or wish Medicare as we know it; we can’t afford prescription drug benefit we pass not to, we should come together and Social Security as we know it. We can should be actuarially equivalent to the agree we would not proceed until we afford to update it for prescription plan that is most often used by Federal provide prescription drug coverage that drugs if we do not pass irresponsible employees, including Members of Con- is quality and is similar to what we tax policy that creates trillions and gress. In other words—and I have heard have as Members of the Senate. trillions of dollars in debt. other colleagues say this—the seniors This is a trigger. As I indicated, it is That is my concern overall. I am of this country should get no less in not eliminating those parts of the tax hopeful that we will reconsider this. I prescription drug help than we get bill. It is simply a trigger on those. am very hopeful that in the meantime, through our insurance plan. That is If I might take just another moment regardless of the broader picture, col- what my amendment says, simply. The on the broader issues of Medicare, on leagues will join to be able to send a tax cuts geared to the most wealthy this question of whether we will have strong message that we are going to among us, the elite in the country, the resources to update Medicare to put the seniors of the country first and should wait until we can fulfill the provide a real prescription drug ben- a real prescription drug benefit first. promise of a prescription drug benefit efit, one that we could probably sup- As many colleagues have said, our sen- that is equal to what we receive as port because it would be similar to iors deserve the same kind of benefit Members of the Senate. what we are able to receive as Members that we receive in the Senate. This I have heard many friends on the of the Senate. The larger issue is where amendment would allow that to hap- other side of the aisle extol the virtues we are going in terms of the huge na- pen. of our plan, the FEHBP plan. I have tional debt projected for the future. With the passage of these other pro- also heard the President and members The actual question is whether we will visions, it then would allow them to of his administration make similar be able to meet our obligations overall take effect after the prescription drug comments. They say a new prescription for Medicare and Social Security in the benefit is passed. drug benefit should be modeled after long run without going into more and I reserve the remainder of my time. I the benefit in the Federal employee more deficit. yield to my colleagues who are possibly plan. In fact, on May 6 my distin- I refer to the study that was recently wishing to speak. I would like the op- guished colleague from Idaho, Senator done that indicates if we were to take portunity to respond at the appropriate CRAIG, held a hearing in the Aging the proposals that have been put for- time. Committee, which I am on, that high- ward by the President—I realize in the I yield the floor. lighted the Federal employee program, Senate there is a modified version of The PRESIDING OFFICER. Who its benefits, and so on. While the wit- that. We don’t have exactly this yields time? nesses disagreed on whether it would amendment in front of us. But if we are Mr. WARNER. Madam President, I be appropriate to go to the structure of to take what the President has sug- see my distinguished colleague from

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00069 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6216 CONGRESSIONAL RECORD — SENATE May 14, 2003 Ohio who arrived a few moments before I learned, as other colleagues have the end of the year. The Warner amendment me. I simply ask of my colleague learned on their trips to schools, to my would make a real difference for many edu- whether I can proceed for 4 or 5 min- utter astonishment that so many cators, who often sacrifice other personal needs in order to pay for classroom supplies utes without being disruptive to the teachers reach into their own pockets and professional development. Two impor- statement on which he is proceeding. and take their own dollars, after pay- tant reasons for supporting this amendment Mr. VOINOVICH. I am happy to yield ing taxes in those instances where they are: my distinguished colleague 3 or 4 min- pay taxes, and buy school supplies for According to a study by the research firm utes prior to submitting my amend- the children. They have to use their Quality Education Data, a division of Scho- ment. own money for further teacher edu- lastic, elementary school teachers spend The PRESIDING OFFICER. The Sen- cation. more than $1 billion a year on classroom sup- plies. The study found that the average ele- ator from Virginia. Last year, the Congress of the United mentary educator spends $521 annually, with Mr. WARNER. Madam President, I States, at the initiative of myself and first-year teachers spending over $700 a year ask unanimous consent to lay the many others, finally passed a law by for classroom supplies. pending amendments aside. which they got a $250 above-the-line de- Teacher quality is the single most critical The PRESIDING OFFICER (Mrs. duction. That was a remarkable factor in maximizing student achievement. DOLE). Without objection, it is so or- achievement legislatively. Unfortu- Ongoing professional development is essen- dered. nately, that piece of legislation sunsets tial to ensure that educators stay up-to-date on the skills and knowledge necessary to AMENDMENT NO. 550, AS MODIFIED at the end of this calendar year. prepare students for the challenges of the Mr. WARNER. Madam President, I The purpose of this amendment is, 21st century. send an amendment to the desk. first, to increase $250 to $400 as the We urge you to support this important The PRESIDING OFFICER. The amount of deduction and, second, to amendment. clerk will report. enable that amendment now, by virtue Sincerely, DIANE SHUST, The senior assistant bill clerk read as of this amendment, to become perma- nent law so that they can plan their fu- Director of Govern- follows: ment Relations. tures a little bit better. This deduction The Senator from Virginia [Mr. WARNER], RANDALL MOODY, for himself and Ms. COLLINS, Mr. ALLEN, Mr. will be there for those wonderful and Manager of Federal CRAIG, and Ms. MURKOWSKI, proposes an courageous teacher expenditures which Relations. amendment numbered 550, as modified. they take out of their own pockets. I Mr. WARNER. Madam President, Mr. WARNER. Madam President, I find it to be very touching. why do teachers need this kind of re- ask unanimous consent that reading of I was talking to my colleague from lief? It is now estimated that the aver- the amendment be dispensed with. Ohio while waiting to take the floor, age teacher spends $521 out of their The PRESIDING OFFICER. Without and he told me that at the time he was own pocket each year on classroom objection, it is so ordered. Governor, they put similar legislation materials—materials such as pens, pen- The amendment is as follows: into State law. This, of course, will be cils and books. First-year teachers (Purpose: To amend the Internal Revenue Federal law and apply to all 50 States. spend even more, averaging $701 a year Code of 1986 to increase the above-the-line This amendment will make this im- on classroom expenses. deduction for teacher classroom supplies portant tax benefit permanent for our Why do they do this? Simply because and to expand such deduction to include teachers. In addition, it will increase school budgets are not adequate to qualified professional development ex- the above the line deduction to $400 meet the costs of education. Our teach- penses) and expand the allowable uses for the ers dip into their own pocket to better At the end of subtitle C of title V, insert deduction to include professional de- the education of America’s youth. the following: velopment expenses. Moreover, in addition to spending SEC. ll. EXPANSION OF ABOVE-THE-LINE DE- It is important to note that the substantial money on classroom sup- DUCTION FOR CERTAIN EXPENSES President’s budget calls for this tax re- OF ELEMENTARY AND SECONDARY plies, many teachers spend even more SCHOOL TEACHERS. lief. I also note that the amendment money out of their own pocket on pro- (a) IN GENERAL.—Subparagraph (D) of sec- has been endorsed by the National Edu- fessional development. Such expenses tion 62(a)(2) (relating to certain trade and cation Association. include tuition, fees, books, and sup- business deductions of employees) is amend- I ask unanimous consent to have plies associated with courses that help ed to read as follows: printed in the RECORD a letter from the our teachers become even better in- ‘‘(D) CERTAIN EXPENSES OF ELEMENTARY NEA endorsing my amendment. structors. AND SECONDARY SCHOOL TEACHERS.—The de- There being no objection, the mate- The fact is that these out-of-pocket ductions allowed by section 162 which consist rial was ordered to be printed in the of expenses, not in excess of $400, paid or in- costs place lasting financial burdens on RECORD, as follows: curred by an eligible educator— our teachers. This is one reason our ‘‘(i) by reason of the participation of the NATIONAL EDUCATION ASSOCIATION, teachers are leaving the profession. educator in professional development Washington, DC, May 14, 2003. Little wonder that our country is in courses related to the curriculum and aca- U.S. Senate, the midst of a teacher shortage. demic subjects in which the educator pro- Washington, DC. Without a doubt the Teacher Tax Re- DEAR SENATOR WARNER: On behalf of the vides instruction or to the students for lief Act of 2001 took a step forward in which the educator provides instruction, and National Education Association’s (NEA) 2.7 million members, we urge your support for helping to alleviate the Nation’s teach- ‘‘(ii) in connection with books, supplies ing shortage by providing a $250 above- (other than nonathletic supplies for courses the Warner amendment on teacher tax de- of instruction in health or physical edu- ductions when it is offered during consider- the-line deduction for classroom ex- cation), computer equipment (including re- ation of the tax reduction plan. A similar penses. lated software and services) and other equip- amendment was approved by the Senate dur- However, it is clear that our teachers ment, and supplementary materials used by ing the last Congress by a vote of 98–2. This are spending much more than $250 a the eligible educator in the classroom.’’. year’s vote may be included in the NEA Leg- year out of their own pockets to better islative Report Card for the 108th Congress. (b) EFFECTIVE DATE.—The amendment the education of our children. The Warner amendment, which was origi- made by this section shall apply to taxable This amendment that I have offered years beginning after December 31, 2002. nally introduced as the Teacher Tax Relief Act (S. 695), would increase to $500 and make today is the same as the administra- Mr. WARNER. Madam President, I permanent a tax deduction for educators’ tion’s request. Again, the amendment thank the distinguished Presiding Offi- out-of-pocket classroom supply expenses. will increase the above-the-line deduc- cer. I thank the managers of this bill The amendment also would help educators tion for educators from $250 allowed and my colleague from Ohio. access quality training, much of it mandated under the current law to $400; allow I will proceed for a few minutes with by the No Child Left Behind Act, by expand- educators to include professional devel- regard to amendment No. 550, in which ing the deduction to include professional de- opment costs within that $400 deduc- velopment. I am privileged to be joined by Sen- Last year, Congress enacted a $250 tax de- tion (under current law, up to $250 is ators COLLINS, ALLEN, CRAIG, and MUR- duction for educators’ out-of-pocket ex- deductible but only for classroom ex- KOWSKI, the Presiding Officer. It relates penses as part of the economic stimulus penses); and make the Teacher Tax re- to the teachers of America. package. The current deduction expires at lief provisions in the law permanent.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00070 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6217 Current law sunsets the teacher tax The PRESIDING OFFICER. The (c) REPORT.—Not later than 18 months provisions at the end of this year. clerk will report. after the date on which all initial members Our teachers have made a personal The senior assistant bill clerk read as of the Commission have been appointed pur- commitment to educate the next gen- follows: suant to section 2(b), the Commission shall eration and to strengthen America. submit a report to the President and Con- The Senator from Ohio [Mr. VOINOVICH] gress which shall contain a detailed state- And, in my view, the Federal Govern- proposes an amendment numbered 592. ment of the findings and conclusions of the ment should recognize the many sac- Mr. VOINOVICH. Madam President, I Commission, together with its recommenda- rifices our teachers make in their ca- ask unanimous consent that reading of tions for such legislation and administrative reer. the amendment be dispensed with. actions as it considers appropriate. This amendment is another step for- The PRESIDING OFFICER. Without SEC. 4. POWERS OF THE COMMISSION. ward in providing our educators with objection, it is so ordered. (a) HEARINGS.—The Commission may hold the recognition they deserve. The amendment is as follows: such hearings, sit and act at such times and In my view, America’s teachers de- places, take such testimony, and receive serve better. (Purpose: To establish a blue ribbon such evidence as the Commission considers I ask unanimous consent that an commission on comprehensive tax reform) advisable to carry out this Act. analysis of the President’s budget re- At the appropriate place insert the fol- (b) INFORMATION FROM FEDERAL AGEN- quest which depicts exactly the same lowing: CIES.—The Commission may secure directly amendment about which I am speaking SECTION 1. SHORT TITLE. from any Federal department or agency such This Act may be cited as the ‘‘Funda- information as the Commission considers also be printed in the RECORD. mental Tax Reform Commission Act of 2003’’. necessary to carry out this Act. Upon re- There being no objection, the mate- quest of the Chairman of the Commission, rial was ordered to be printed in the SEC. 2. ESTABLISHMENT OF COMMISSION. (a) ESTABLISHMENT.—There is established the head of such department or agency shall RECORD, as follows: the ‘‘Blue Ribbon Commission on Com- furnish such information to the Commission. EXTEND, INCREASE AND EXPAND THE ABOVE- prehensive Tax Reform’’ (in this Act referred (c) POSTAL SERVICES.—The Commission THE-LINE DEDUCTION FOR QUALIFIED OUT-OF- to as the ‘‘Commission’’). may use the United States mails in the same POCKET CLASSROOM EXPENSES (b) MEMBERSHIP.— manner and under the same conditions as Under current law, teachers who itemize (1) COMPOSITION.—The Commission shall be other departments and agencies of the Fed- deductions (do not use the standard deduc- composed of 12 members of whom— eral Government. tion) and incur unreimbursed, job-related ex- (A) 1 shall be the Chairman of the Board of (d) GIFTS.—The Commission may accept, penses are allowed to deduct those expenses Governors of the Federal Reserve System; use, and dispose of gifts or donations of serv- to the extent that when combined with other (B) 1 shall be the Vice Chairman of the ices or property. miscellaneous itemized deductions they ex- Board of Governors of the Federal Reserve SEC. 5. COMMISSION PERSONNEL MATTERS. ceed two percent of AGI. Current law also al- System; (a) COMPENSATION OF MEMBERS.—Each lows certain teachers and other elementary (C) 1 shall be the Commissioner of Internal member of the Commission who is not an of- and secondary school professionals to treat Revenue; ficer or employee of the Federal Government up to $250 in annual qualified out-of-pocket (D) 2 shall be appointed by the majority shall be compensated at a rate equal to the classroom expenses as a non-itemized deduc- leader of the Senate; daily equivalent of the annual rate of basic tions (above-the-line deduction), effective for (E) 1 shall be appointed by the minority pay prescribed for level IV of the Executive expenses incurred in taxable years beginning leader of the Senate; Schedule under section 5315 of title 5, United after December 31, 2001 and before January 1, (F) 2 shall be appointed by the Speaker of States Code, for each day (including travel 2004. Unreimbursed expenditures for certain the House of Representatives; time) during which such member is engaged books, supplies and equipment related to (G) 1 shall be appointed by the minority in the performance of the duties of the Com- classroom instruction qualify for the above- leader of the House of Representatives; and mission. All members of the Commission the-line deduction. Expenses claimed as an (H) 3 shall be appointed by the President, who are officers or employees of the United above-the-line deduction cannot be claimed of which— States shall serve without compensation in as an itemized deduction. The Administra- (i) no more than 2 shall be of the same addition to that received for their services as tion proposes to extend the above-the-line party as the President; and officers or employees of the United States. deduction to apply to qualified out-of-pocket (ii) 1 may be the Secretary of the Treasury. (b) TRAVEL EXPENSES—The members of the expenditures incurred after December 31, (2) FEDERAL EMPLOYEES.—The members of Commission shall be allowed travel expenses, 2003, to increase the deduction to $400, and to the Commission may be employees or former including per diem in lieu of subsistence, at expand the deduction to apply to unreim- employees of the Federal Government. rates authorized for employees of agencies bursed expenditures for certain professional (3) DATE.—The appointments of the mem- under subchapter I of chapter 57 of title 5, training programs. bers of the Commission shall be made not United States Code, while away from their Mr. WARNER. Madam President, the later than July 30, 2003. homes or regular places of business in the amendment is in compliance with the (c) PERIOD OF APPOINTMENT VACANCIES.— performance of services for the Commission. President’s program. It is the desire of Members shall be appointed for the life of (c) STAFF.— this National Education Association the Commission. Any vacancy in the Com- (1) IN GENERAL.— The Chairman of the mission shall not affect its powers, but shall just to take existing law, make it per- Commission may, without regard to the civil be filled in the same manner as the original service laws and regulations, appoint and manent, and to increase it to $400, appointment. terminate an executive director and such given the calculations of the amounts (d) INITIAL MEETING.—Not later than 30 other additional personnel as may be nec- that are expended each year by teach- days after the date on which all members of essary to enable the Commission to perform ers all across America, which is larger the Commission have been appointed, the its duties. The employment of an executive than existing law, $250. Commission shall hold its first meeting. director shall be subject to confirmation by I appreciate the indulgence of my (e) MEETINGS.—The Commission shall meet the Commission. colleagues. I hope this amendment will at the call of the Chairman. (2) COMPENSATION.—The Chairman of the receive the support of the Senate to- (f) QUORUM.—A majority of the members of Commission may fix the compensation of the the Commission shall constitute a quorum, executive director and other personnel with- morrow as we proceed to vote. but a lesser number of members may hold I thank my colleague from Ohio and out regard to chapter 51 and subchapter III of hearings. chapter 53 of title 5, United States Code, re- yield the floor. (g) CHAIRMAN AND VICE CHAIRMAN.—The lating to classification of positions and Gen- The PRESIDING OFFICER. Who President shall select a Chairman and Vice eral Schedule pay rates, except that the rate yields time? Chairman from among its members. of pay for the executive director and other Mr. BAUCUS. Madam President, I SEC. 3. DUTIES OF THE COMMISSION. personnel may not exceed the rate payable ask unanimous consent that the pend- (a) STUDY.—The Commission shall conduct for level V of the Executive Schedule under ing amendments be temporarily laid a thorough study of all matters relating to a section 5316 of such title. aside so the Senator from Ohio may comprehensive reform of the Federal tax sys- (d) DETAIL OF GOVERNMENT EMPLOYEES.— offer an amendment. tem, including the reform of the Internal Any Federal Government employee may be The PRESIDING OFFICER. Without Revenue Code of 1986 and the implementa- detailed to the Commission without reim- objection, it is so ordered. tion (if appropriate) of other types of tax bursement, and such detail shall be without Mr. VOINOVICH. Thank you, Madam systems. interruption or loss of civil service status or (b) RECOMMENDATIONS.—The Commission privilege. President. shall develop recommendations on how to (e) PROCUREMENT OF TEMPORARY AND AMENDMENT NO. 592 comprehensively reform the Federal tax sys- INTERMITTENT SERVICES.—The Chairman of Madam President, I send an amend- tem in a manner that generates appropriate the Commission may procure temporary and ment to the desk. revenue for the Federal Government. intermittent services under section 3109(b) of

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00071 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6218 CONGRESSIONAL RECORD — SENATE May 14, 2003 title 5, United States Code, at rates for indi- own alternatives and failed to do so. It Americans toil for about—listen to viduals which do not exceed the daily equiva- is easy to criticize, but it is difficult to this—6.4 billion hours on tax forms and lent of the annual rate of basic pay pre- legislate. Let us acknowledge that re- recordkeeping, accounting for 84 per- scribed for level V of the Executive Schedule gardless of our individual opinions re- cent of the Federal Government’s pa- under section 5316 of such title. garding the offset package Chairman perwork burden in this country. And SEC. 6. TERMINATION OF THE COMMISSION. The Commission shall terminate 90 days GRASSLEY and a majority of his com- that is associated with the Internal after the date on which the Commission sub- mittee have chosen to legislate. Revenue Code. This only includes fi- mits its report under section 3. However, the current disagreements nancial recordkeeping and tax prepara- SEC. 7. AUTHORIZATION OF APPROPRIATIONS. over the offset package inevitably begs tion, and these estimates may be too There are authorized to be appropriated the question: Why is the Tax Code so low since they ignore the countless such sums as are necessary to the Commis- complicated? How did we get into this hours spent on tax minimization strat- sion to carry out this Act. situation? And how can we return to a egies. Everybody is working to figure Mr. VOINOVICH. Madam President, I simple, fair, and honest Tax Code? out a way not to pay taxes. rise today to commend Chairman What is stimulative to the economy? Included among the items of needless GRASSLEY for the outstanding job he What isn’t stimulative? What tax ex- complexity today are the following: has done to bring this reconciliation penditures came in several years ago bill to the floor and to focus attention which are no longer relevant? All these An alternative minimum tax that on our urgent need to address funda- issues need to be discussed. That is treats items such as dependent exemp- mental tax reform. why I am offering this amendment. tions as tax shelters, thereby threat- When the Senate enacted the budget Many of my colleagues have said: We ening to tax millions who never were resolution for fiscal year 2004, it pre- need fundamental tax reform, but now meant to be affected; phaseout after sented Chairman GRASSLEY with a very is not the time. I have heard that over phaseout of such allowances as difficult challenge—to report to the and over. I have heard that for years: itemized deductions, earned-income Senate meaningful, stimulative tax de- Tax reform but now is not the time. tax credits, personal exemptions, eligi- ductions while keeping the overall I think the debate over offsets dem- bility for IRAs, eligibility for other growth in the deficit below $350 billion. onstrates this is precisely the time to savings incentives, eligibility for edu- Many observers, in and out of Con- abandon piecemeal tinkering and em- cational tax breaks; and each of these gress, considered that task impossible. brace fundamental tax reform. This is like an additional minimum tax sys- But I believe the Finance Committee Congress—not the next or the one after tem all of itself, forcing taxpayers to has accomplished that goal. that—should seize the opportunity to file multiple schedules for each form. The reconciliation bill before the focus national attention on the need I have a very simple return. I do not Senate today contains $430 billion in for comprehensive tax reform in the have that much. But the schedules that tax cuts and $80 billion in offsets, for a United States of America. are connected with my return are un- net cost of $350 billion. Equally impor- I am proposing the establishment of believable. I am sure my colleagues tant, both the tax cuts and the offsets a commission to examine the Tax Code who think about it think about all the are real. The Joint Committee on Tax- from top to bottom. And I recommend time they spend on preparing their own ation, a highly respected, neutral fundamental restructuring. The goal of individual tax returns. scorekeeper, has analyzed this bill and any Government revenue program certifies the revenue effects of both the should be to raise sufficient funds to Also, included among the many items tax cuts and the offsets. operate public programs with the min- of needless complexity today are: Many people claim this economic imum disruption of the economy. Tax Pension and saving incentives that growth package is too small and they structures should be simple, fair, effec- add administrative costs and possibly would like to see larger tax relief for tive, and honest. Our current Tax Code even reduce net savings by providing small businesses and working families. achieves none—none—of these objec- different rules for withdrawals, pen- So would I, but only if we can offset tives. alties, Social Security tax treatment, the additional cost. And some people Proof of the complexity of our cur- allowable amounts of exclusion or de- claim the tax cuts are too large and rent Tax Code is demonstrated by a duction, and so on; a tax treatment of will limit funds available to low-in- few, simple observations: dependent children that needlessly come support programs. I sympathize The Internal Revenue Code consists causes millions of unnecessary tax re- with their concern, but we must recog- of approximately 1,395,000 words. turns to be filed; a capital gains law nize that the most effective low-in- There are 693 sections of the Internal with at least seven different tax rates, come support program is a job. And we Revenue Code that are applicable to in- and that requires taxpayers to fill out can only provide jobs by jump-starting dividual taxpayers; 1,501 sections appli- pages of forms even when they have the economy. cable to businesses; 445 sections appli- only a few dollars of capital gains; Too many of our fellow Americans cable to tax-exempt organizations, em- complicated rules for charitable deduc- are out of work, too many of our fellow ployee plans, and governments. tions and charities, including multiple Americans are worried about whether As of June 2000, the Treasury Depart- limits on giving as a percent of income, they are going to have a job. Small ment had issued almost 20,000 pages of and a perverse excise tax on founda- business owners and investors in Ohio regulations containing over 8 million tions that actually discourages chari- have told me this is a good plan that words. table giving; child credits and depend- will help them create jobs in my State. The current 1040A short form has ent exemptions that could easily be We accelerate the reduction of tax doubled the number of lines that once folded into one; and unnecessarily rates, we end the marriage penalty, we appeared on the 1945 version of the strict estimated tax rules that pick up accelerate small business depreciation, standard 1040 tax return. It has an 85- very little extra revenue for all the we increase the size of the child tax page instruction booklet which now complexity they introduce. credit, and we begin to eliminate the tops the long form 1040 instructions It is unbelievable. double taxation of dividends. published just 7 years ago. This is the Another area of contention is the na- short form, 85 pages; and it is more One of the most disturbing aspects of ture of the offsets. It is in this area, than the instructions that we had 7 this current Tax Code is the almost more than any other, that Senator years ago on the long form. continual growth of so-called tax ex- GRASSLEY has been unjustly criticized. The IRS prints at least 1,101 publica- penditures. Essentially, they increase He was asked to produce offsets that tions, forms, and instructions, con- the level of tax rates far beyond what would limit the total cost of tax reform taining 16,339 pages, up from 943 docu- is necessary, and then mitigate the im- to $350 billion, and he has done it. ments with 12,933 pages. That is 2 years pact with incentives to special interest Members of Congress who oppose ago. groups. It is the Government equiva- some or all of the offsets because of Over 56 percent of the taxpayers in lent of jacking up prices in the grocery their impact on special interest groups this country need professional people store, and then accepting coupons at have had ample time to present their to help them prepare their tax return. the checkout counter.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00072 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6219 Private sector investment becomes commission, and Senator Moynihan. screwed on straight and they are trying distorted by tax provisions encour- They had a job to do, and they did a to give us the right recommendation aging both individuals and corpora- pretty good job. It was not political. rather than spoon-feed us some polit- tions to allocate their funds to mini- The President, both bodies of Congress, ical agenda from any side. mize their taxes rather than to maxi- both political parties, all got together I am trying to do the best I can by mize their income. Ultimately, most and worked with members on the com- trying to find people who are probably people end up paying more than they mission to come up with recommenda- neutral. The three organizations I should for both their groceries and tions to save Social Security. looked at that have analyzed the their taxes. Two points: One is, the membership wealth effect of the President’s divi- According to a recent article in the is people who really want to do a good dend proposal are Brookings Institute, Washington Post, many leading tax re- job. They work together. There is not McKinsey & Company, and Goldman form advocates believe the only solu- any political sniping, no partisan rhet- Sachs is the third. Let me go through tion for this dilemma is to propose new oric. They work together. And it is first the Brookings analysis briefly. I and different tax cuts every year. Al- very important that the composition of think it is instructive. though I sympathize with their goal, it the commission be people who do want The total value of equities held by will not provide the most effective re- to work together; that is, the commis- households in the United States is $10 forms that meet the ultimate test the sion not be stacked. trillion. That is, the total value of all equities held by households is $10 tril- American people demand: a Tax Code The second point is at that time lion. I will get to institutional inves- that is fair, simple, and honest. Tax re- there was a crisis. Social Security was about to go belly up. A crisis generally tors in just a moment. form, like surgery, is best done quick- The reasonable estimate of the stock creates solutions and results. The com- ly. Do you hear that? Tax reform, like price increase due to the President’s plexity of the U.S. Tax Code and the in- surgery, is best done quickly and infre- dividend proposal, according to Brook- creasing complexity of the Tax Code quently rather than slowly and often. ings’ analysis, is 5 percent. The in- That is why I am proposing a com- may have become a crisis in the nature crease in value effect of equities held mission to propose comprehensive re- of Social Security back in the early by households as a result of the stock form that can be enacted at once, im- 1980s; I don’t know. price increase is about $500 billion. The plemented quickly, and establish a I am saying to the Senator from next question is what is the wealth ef- fair, simple, honest, and effective rev- Ohio: It is a good amendment. As most fect, how much effect of that increase, enue structure for the next generation. things in life, it is the followthrough if it is 5 percent, is going to be trans- This commission will examine all as- that counts, the followup that counts. lated into spending in the economy. pects of the Federal revenues, includ- It is making sure that if we do this, the The Brookings analysis is that the ing individual taxes, corporate taxes, right people are appointed. I say that wealth effect—that is, the percent of capital gains taxes, excise taxes, user in part because when I listened to the wealth increase that is consumed rath- fees, taxes on dividends, tax deduc- Senator, he mentioned two members er than saved by households—will be 3 tions, tax credits, and tax complexity. appointed by the majority leader, one to 5 percent. So that means the in- The commission will recommend fun- by the minority leader, three by the crease in consumption as a result of damental reforms that can be enacted President, and also the House. It has the wealth effect is about $15- to $25- in a single reform package and imple- the possibility of being a stacked deck, billion, which is about .14 percent to .23 mented quickly. It will allow Congress possibility of being a partisan commis- percent of GDP. We all know that usu- and the Nation to focus on tax reform, sion. That is the last thing we need ally to have a real stimulus in the devise a simple, fair, honest solution, around here is a partisan commission economy you need somewhere between and move on to other priorities. on tax reform. 1 and 1.5 percent; and .14 and .23 is cer- The current debate clearly dem- I would like to work with the Sen- tainly very small compared with 1 per- onstrates the system is broken and ator, and I know other Senators would cent or 1.5. That is the Brookings anal- now—not next year, or the year after— like to work with him, to do the very ysis. now is the time to fix the problem. best we can to make sure this is not a The McKinsey Company’s analysis is Madam President, I yield the floor. stacked deck, and it is not therefore a very similar. I want to read a quote The PRESIDING OFFICER. Who commission whose recommendations from the McKinsey analysis. I think it yields time? The Senator from Mon- collect dust on some shelf somewhere is instructive. It says: tana. but rather something that makes good But the proposed tax cut (eliminate tax on Mr. BAUCUS. Madam President, I sense. dividends) isn’t likely to have a major last- think the Senator from Ohio is on tar- One other point I might mention ing effect on US share prices, primarily be- get. It makes excellent sense for the while the Senator from Ohio is here. I cause the key investors who drive them are already exempt from taxes. What little im- United States to set up some kind of a know the Senator is wondering, just as pact the proposal may have was probably re- tax commission to take a good, hard I think most Senators in this body are flected in the 2.2 percent gain in the S&P 500 look at our tax structure. As I listened wondering, what is the real effect of the day before it was announced. to the Senator’s amendment being dividend exclusion. What effect does it Continuing on to quote: read, one thought came to my mind, really have. There are a lot of people Those who believe otherwise draw on clas- though. That is, commissions some- who have lots of ideas. A lot of econo- sic finance theory. In a world without taxes, times work and sometimes they don’t mists have spoken on the effect of ex- theory suggests, shareholders would be indif- work. And the goal here, clearly, if we cluding dividends from income. I think ferent to whether a corporation paid divi- do this, is to make it work. in theory most of us agree there is dends, since the funds to do so would come at That begs the question, how do you some inequity between the taxation of the shareholders’ own expense. In a world with taxes, shareholders may face different make it work? How do you make it equity and the taxation of debt with tax rates on, for example, dividends as op- worthwhile, not just some outfit draw- respect to companies’ decisions as to posed to capital gains. They would care ing conclusions that are put on the whether to invest or investor decisions whether a company retained its earnings or shelf to gather dust. Most commission as to whether to invest. distributed those earnings as dividends, be- recommendations are put on the shelf One point that often rises in the de- cause this would affect how much they got to gather dust. bate is the wealth effect. What is the to keep. If all investors paid taxes on divi- The one commission that comes to wealth effect of a significant reduction dends, yes, share prices probably would rise if the tax were eliminated. my mind that really has worked—and I in dividend income? Who knows, real- The fact, however, is that tax-paying US can think of many that have not—is ly? There are all kinds of analyses; dif- individual shareholders own a minority of all the commission on Social Security ferent people have different points of US shares— back in the early 1980s, when President view. We are trying to do our best to That is, about 28 percent. That is, in- Reagan nominated Chairman Green- try to get opinions of people who really dividuals own about 28 percent. span to head the commission on Social don’t have an axe to grind, of people whereas tax exempt US institutions and in- Security. Various Senators were on the who really, as far as we can tell, are dividuals who hold shares in tax-exempt ac- commission. Senator Dole was on the pretty straight, who have their heads counts own 61 percent. (The remainder was

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00073 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6220 CONGRESSIONAL RECORD — SENATE May 14, 2003 in foreign hands.) For the most part, tax- What we really need to do is put all The President’s mishandling of the paying individual shareholders don’t drive of this on a table and not do it as part economy since January 20, 2001, is al- share prices, whereas nontax-paying institu- of this stimulus package, and have tax most incredible. Two million-plus tional investors do: the trading activity of a reform, so we can start to look at the Americans have lost their jobs since company’s top 40 to 100 investors—again, usually big institutional investors—accounts wealth factor and look at whether it that date. We have seen a 50 percent in- for 70 percent of its stock price movement. makes a difference in terms of our crease in the unemployment rate to Since these investors are indifferent to the economy. We have tax loopholes and last month’s 6 percent. The stock mar- issue of taxes on dividends [because they are tax expenditures that are really no ket has lost a quarter of its value. tax exempt] they are unlikely to set in mo- longer relevant. We can take that There has been a $7 trillion turn in the tion the kinds of changes in their portfolios money and put it into something else- Federal Government’s finances—from a that would drive up share prices. where. We can reduce taxes and provide $5 billion projected surplus to today’s I will soon yield to the Senator from something that would be really helpful $2 trillion projected addition to the na- Ohio. to the economy. But we don’t do that tional debt. The third reason Goldman Sachs around here. We take things from day The CBO’s most recent estimate is gave in their review is that it would to day, week to week, year to year. that the deficit this year will top $350 generate no more than a 5 percent in- I say to the ranking member of the billion—the largest annual deficit ever. crease in stock prices. That is the Finance Committee, my distinguished Economic growth has been anemic—on Goldman Sachs view. colleague, if the commission member- average, 1 percent, and consumer con- The PRESIDING OFFICER. The Sen- ship is not what it ought to be, I am fidence has dropped 34 percentage ator from Ohio. glad to rewrite it so that it is entirely points. Mr. VOINOVICH. I will soon ask for impartial, so it will get the job done. I What has been the response to this the yeas and nays on my amendment. want to get the job done. I would like dismal economic record? The President Second of all, the ranking member of to have a commission such as they had has proposed the same prescription the Finance Committee and I sat in on in 1983 when we looked at Social Secu- that he proposes for nearly all of our meetings together as part of the cen- rity. They did a good job. I think we mounting domestic problems: tax cuts trist coalition. The thing that im- ought to do that again. I think a lot of for the very wealthy. pressed me, when we met with Alan people agree on that. But unless we get Madam President, I don’t think we Greenspan, was the fact—and he has at it now, it will not happen, we will have a problem; we have at least three said this publicly since the time we had let it go, and it will be something else interconnecting challenges. The first is our private meeting with him—that next year. to regenerate a moribund national the most significant thing we could do Mr. BAUCUS. Madam President, I ap- economy; the second is to prepare for to aid the economy was to eliminate preciate what the Senator said, and he the next decade, when our Government double taxation, eliminate the tax on is correct. We have had all kinds of will be faced with enormous additional dividends, although it was a short-term theories, and it is hard to tell what is expenses, particularly in Social Secu- benefit, he said, but something sys- the most accurate. Maybe we should rity and Medicare; and finally, the im- temic needs to be done to better the just not pass this bill because we are mediate crisis that is occurring be- Tax Code. going to make the Code that much cause of our States’ financial positions You can argue the dividend issue any more complex by passing this legisla- and what that is doing to wage loss, way you want, but what I usually do is tion, and so we will at least be giving benefits loss, and a denial of the serv- ask the people back in Ohio how they the commission a bit of a break. I ap- ices that represent the ultimate safety feel about it. No. 1, many of our busi- preciate what the Senator has said. net under much of our population. nesses that have defined pension plans, Mr. VOINOVICH. Madam President, I The bill the Finance Committee has because their stock is down, are going ask for the yeas and nays on my reported very closely follows the Presi- to be asked for an enormous amount of amendment. dent’s plan. There are two fundamental money to be deposited in those fine The PRESIDING OFFICER. Is there a aspects of this plan with which I take pension plans, which they don’t have. sufficient second? the strongest exception. First, the mix Other corporations have told me that if There is a sufficient second. of tax cuts that it includes will do lit- their stock price gets a bump, they will The yeas and nays were ordered. tle to stimulate the economy, which we issue stock and they will get cash that Mr. BAUCUS. Madam President, I desperately need. Second, the cost of way so they won’t have to borrow it ask unanimous consent that the pend- this program is not offset, so Federal the way they are now borrowing the ing amendment be temporarily laid deficits and the debts that we will pass money. aside so the Senator from Florida may on to our children and grandchildren In addition, there are many people, offer an amendment. will grow even greater. such as my son George, who have re- The PRESIDING OFFICER. Without Why is a stimulus important—a real tirement accounts, who have seen objection, it is so ordered. stimulus? It is important because con- those retirement accounts go down in AMENDMENT NO. 617 sumer spending makes up two-thirds of value. There are millions of Americans Mr. GRAHAM of Florida. Madam our economy; so as consumers go, so in that same position. Other Ameri- President, I send an amendment to the goes our economy. The economy is cans, who are in a better position, have desk. struggling today not because we don’t seen a vast amount of wealth disappear The PRESIDING OFFICER. The produce enough goods and services in in the stock market. Many of them say clerk will report the amendment. the United States but because con- to me that eliminating the tax on divi- The assistant legislative clerk read sumers are reluctant to spend what dends will give a bump to the market. as follows: they have to purchase those goods and Because the market will get a bump The Senator from Florida [Mr. GRAHAM] services. up, they are going to feel a little better proposes an amendment numbered 617. Madam President, I would like to di- about the future and, as a result of Mr. GRAHAM of Florida. Madam rect your and my colleagues’ attention that, will be more likely to spend some President, I ask unanimous consent to this picture. This picture was taken money. that further reading of the amendment on a desert airport in Senator KYL’s So you can argue this any way you be dispensed with. State of Arizona. It is a picture of a want. The PRESIDING OFFICER. Without portion of the over 300 commercial air- I have other people who say to me, if objection, it is so ordered. liners currently parked on that air- you do this, it is going to impact on (The amendment is printed in today’s field. municipal bonds, affect real estate RECORD under ‘‘Text of Amendments.’’) I submit these airplanes are not trusts, and eliminate or have an im- Mr. GRAHAM of Florida. Today, the parked on the airfield in Arizona be- pact on the low-income housing tax Senate began consideration of the Jobs cause Boeing cannot build enough air- credit. and Growth Tax Relief Reconciliation planes. They are parked there because So that is the issue we are talking Act of 2003. This is an appropriately there are not enough passengers who about here. We will talk about that named act because the economy is very want to or are able to or are willing to today and tomorrow. much in need of assistance. fly in those airplanes.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00074 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6221 This administration, in spite of that creases the amount of machinery and born in 1936. On the day I was born, I fundamental truth, has pursued a plan equipment that a small business can inherited a national debt of $264. My that does not emphasize demand-side deduct; therefore, creating an incen- oldest daughter was born in 1963. When stimulus. The administration believes tive for that business to make its in- she was born, she inherited as her por- producing goods and services is more vestment now when we need it as op- tion of the national debt $1,634. The important than selling those goods and posed to deferring it to a future date. last number I am going to give you is services. My amendment will provide States stunning, almost unbelievable. My This picture of airplanes parked is with over $40 billion in aid over the youngest granddaughter was born 3 evidence that producing goods is not next 12 months. This temporary assist- years ago. When she was born, her enough. For the economy to get back ance is provided to the States by the share of the national debt was $20,163. on track, more Americans must shop Federal Government, increasing its In four generations of one American at our malls, go out to eat, and buy air- share of Medicaid costs. family, we have gone from $33, as that line tickets. Putting more money Greater assistance from the Federal citizen’s portion of the national debt, quickly into the hands of those who are Government will help forestall drastic to $20,163. This expansion of debt is not the most likely to spend it is the best cuts in State health programs that will only immoral, it is also bad economics. formula for jump-starting this econ- affect those least able to absorb them. By putting the cost of their tax plan on omy. Directing relief to the Medicaid reim- the Nation’s credit card, the President Rather than spread tax cuts broadly bursement rate is the most efficient jeopardizes the very economic growth to spur consumer demand, the Presi- means by which to get these funds to we hope to stimulate. dent’s plan directs most of the tax cuts the States. Increasing the debt reduces national to the wealthiest taxpayers. President Finally, my plan bolsters unemploy- safety, crowds out private sector bor- Bush believes we need to reduce the tax ment compensation benefits. Many of rowing, increases the cost of capital for burden on investment by completely those over 2 million people who have the private sector, and ultimately re- duces economic potential. Even fur- exempting dividend income from the lost their jobs since January 20, 2001, ther, there is a commonsense reason to income tax. By doing so, President have lost them for a considerable pe- offset the cost of the stimulus bill so Bush hopes to spur savings and invest- riod of time and, thus, have exhausted that it does not increase the national ments. Businesses are not going to both their State and now their Federal make such investments when today, on debt. In just 8 years, the first wave of unemployment benefits. My proposal the baby boom generation, born after average, they are only using 75 percent would extend the Federal program, of their capacity. World War II, will become eligible for which is currently scheduled to expire full Social Security and Medicare bene- The plan I offer today provides sub- at the end of this month, through No- stantial tax relief for all working fits. vember. It would provide 26 weeks of Today, there are 391⁄2 million Ameri- Americans. My plan will give to the benefits to those who are struggling to typical two-working-member family cans eligible for Social Security and find work in this stagnant economy. It Medicare full benefits. In the year 2011, paycheck tax relief of up to $1,530 this would also provide 13 weeks of benefits year and again $1,530 next year. Let me 8 years from today, when the first of to the approximately 1 million workers the baby boomers become eligible, recite a couple of recent experiences. who had exhausted their benefits be- Last Friday, I taught school at Oys- there will be 45 million. At the time fore the end of last year but who were ter River High School in Durham, NH. when the last of the baby boomers turn excluded from the extended program I talked to some of the teachers at that 65, which will be in the year 2030, there school. Very few of them are invested which we enacted in January. will be nearly 72 million participants Finally, this proposal gives the in the stock market. Those who are in- in these two programs. States the option of modernizing their vested in the stock market are in- Those numbers are hard to com- unemployment compensation programs vested generally through a plan, such prehend, but what they say is that our to better cover part-time and low-wage Federal Government has entered into a as a 401(k) retirement plan, where the workers. contract with our citizens paying dividends are already exempt from tax- In summary, the plan I have sub- through this very payroll tax that we ation. So they will get zero benefit mitted will stimulate demand and, discussed earlier, with the expectation from this plan. On Sunday of this week, I worked at thus, has the better opportunity to that upon retirement, they will have Drake’s Diner in Des Moines, IA. I stimulate the economy. It focuses all purchased some benefits, both eco- talked to the bus boys, the waiters, the the money in the next 24 months, as nomic and medical security. My plan is fully offset, primarily by cooks, and the dishwashers. I tell you, Senator NELSON from Nebraska com- suspending some of the tax cuts en- their salary level is not sufficient for mented that one of his objections to acted in 2001, tax cuts that have yet to them to have a significant presence in several of the proposals was they would spread the money out over a 10-year pe- go into effect. My proposal suspends the stock market. This paycheck relief the reductions in the top three income plan will put real money in the pockets riod and, in the case of the President’s plan, an infinite period because the tax tax rates planned to go in effect in 2004 of real Americans who will spend it to and in 2006. My plan freezes the stimulate the demand that is so crit- cuts would stay in effect assumedly until Congress acted to do otherwise, planned cuts in the estate tax sched- ical to getting this economy jump- uled beyond 2006. My plan also clamps started. This paycheck tax relief will whereas what we need to do is the money that is available to stimulate down on those Americans who avoid inject $200 billion into the economy paying taxes by investing in abusive over the next 2 years. the economy needs to be focused in the period when the economy needs stimu- tax shelters, moving their corporate During the Finance Committee headquarters to a file cabinet in Ber- markup, some criticized the wage tax lation. Finally, this plan is fair. It treats all muda or hiding assets offshore. as being a threat to the finances of the We need to bring America back to a Americans, whether they are teaching Social Security trust fund. That argu- time when our economy was booming school in Oyster River or whether they ment is a red herring and has no basis. and our Federal finances were sound. are busing tables at Drake’s Diner, My amendment makes absolutely no The President’s plan will not do that. fairly and gives them an opportunity changes to the payroll taxes paid by My plan will. employers and employees and, there- to be part of the recovery of the Amer- I ask for the yeas and nays on this fore, does not affect one thin dime of ican economy. amendment. the revenues that go in to the Social Maybe even more important, my plan The PRESIDING OFFICER. Is there a Security and the Medicare trust funds. does not ask our children and grand- sufficient second? My amendment provides a refundable children to foot our bill. We have had There appears to be a sufficient sec- income tax credit for workers designed an incredible buildup of debt. If I could ond. to provide the same benefits as would a use as an example my own family. My The yeas and nays were ordered. temporary reduction in the payroll tax. father was born in 1885. On the day he The PRESIDING OFFICER (Mr. GRA- My plan also includes tax relief for was born, he inherited, as his share of HAM of South Carolina). The Senator small businesses. It substantially in- the Federal national debt, $33. I was from Arizona.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00075 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6222 CONGRESSIONAL RECORD — SENATE May 14, 2003 Mr. KYL. I ask unanimous consent responsibility. As the court cases all ney’s fees were not awarded in the to- that the pending business be set aside attest—and I will quote a couple in a bacco settlement pursuant to contract. for the purpose of offering an amend- moment—whereas a contract between So for those people who say we are try- ment. two regular people is enforceable in ing to abrogate contracts, as I said, we The PRESIDING OFFICER. Is there law, with respect to a trustee or a law- are not talking about contracts. We are objection? Without objection, it is so yer, where you have a fiduciary respon- talking about a fiduciary responsi- ordered. sibility to the client or to the trust, bility. In any event, in the tobacco set- AMENDMENT NO. 575 that contract is not the most impor- tlement, there was not a contract. Nor (Purpose: To further enhance the denial of tant thing. The most important thing were they awarded by a court, which is deduction for certain fines, penalties, and is the fiduciary responsibility, which the other way that ordinarily attor- other amounts.) the law will enforce, above the con- ney’s fees are awarded as a result of Mr. KYL. Mr. President, I send tracted for fee. That is what would successful litigation. amendment No. 575 to the desk and ask apply in this particular case. So it was not awarded by a contract, for its immediate consideration. As a result of the tobacco litigation and it was not awarded by a court. In- The PRESIDING OFFICER. The we are all familiar with, the fees are stead, after the tobacco companies’ ini- clerk will read the amendment. being paid to these lawyers at the rate tial offer to settle the litigation and The legislative clerk read as follows: of about $500 million a year. That ex- that offer failed and Congress rejected The Senator from Arizona [Mr. KYL], for ists for 30 years until the year 2028, a legislative settlement, which some of himself, Mr. CORNYN, Mr. ALEXANDER, and possibly forever if the lawyers win my colleagues will recall, the tobacco Mr. ENSIGN, proposes an amendment num- their argument for an inflation adjust- companies and the lawyers agreed to a bered 575. ment. Some attorneys are receiving $246 billion settlement, with a special Mr. KYL. Mr. President, I ask unani- fees—if we can believe this now—in ex- provision for attorney’s fees. So this mous consent that the reading of the cess of $150,000 an hour. was not between the lawyers and cli- amendment be dispensed with. Senators make about $150,000 a year, ents. It was between the lawyers and The PRESIDING OFFICER. Without and there are a lot of people who think the other party, something about objection, it is so ordered. Senators are overpaid. Think about in- which courts always raise a red flag. (The text of the amendment is print- stead of earning $150,000 a year, a per- That provision included a very un- ed in today’s RECORD under ‘‘Text of son earned $150,000 every hour. That is usual agreement by the tobacco compa- Amendments.’’) what some of the attorneys in this to- nies to pay the fees of these lawyers Mr. KYL. I ask unanimous consent bacco litigation are earning. It is un- who represented their opponents, the that this amendment be designated the conscionable, and no contract that pro- States. The fees were ostensibly set by Kyl-Cornyn amendment and that Sen- vides for that can be enforceable in a panel of three arbitrators, and there ators ALEXANDER and ENSIGN be listed law. It is clearly a breach of the fidu- are some very interesting articles as original cosponsors. ciary responsibility. about how this would occur that would The PRESIDING OFFICER. Without Congress enacted this Tax Code pro- make your blood boil. Two of the ma- objection, it is so ordered. vision in 1996 in response to two very jority were effectively chosen by the Mr. KYL. Mr. President, I will ad- famous people. I will not mention their lawyers. dress this amendment for a few min- names, but they set up a trust and then In this agreement, the tobacco com- utes, and then I am going to speak on proceeded, basically, to pay themselves panies and lawyers agreed to immunize the dividends proposal that will be of- as trustee most of the money out of the all fee awards from judicial review. In fered tomorrow and that hopefully the trust. Congress said: That is not right. other words, it stipulates that it can- Senate will approve as one of the per- We do not care what the contract says. not be reviewed by a court. And all pro- fecting amendments of the legislation It is wrong. The IRS can tax you on ceedings were concealed from the pub- that passed out of the Finance Com- that overage. lic. That is what we are talking mittee. That is the same provision we would about—a secret deal by which the to- The first thing I would like to do is use. The Congress can tax you on that bacco companies agreed, as part of how to describe the amendment that I have overage, and I will describe in a minute much money they had to pay out, that just laid down. I know Senator CORNYN how we actually describe what the they would pay these substantial fees is coming a little bit later, and he will overage is. to the lawyers. be talking about it, too. I will first assure my colleagues that It does not take too much imagina- This amendment is known as the to- the money that would be returned by tion to figure out that it was in the bacco tax lawyers amendment. The the tobacco lawyers is not returned to best interests of two parties that this technical name is different than that, the tobacco companies. They have to arrangement exist—the lawyers and but the gist of this amendment is that pay the money. They either pay it to the tobacco companies. They got to- about $9 billion could be returned to the lawyers or they pay it to the gether and they concocted a secret deal the States, the clients in the tobacco States. The money would be returned which was never reviewed by a court, is litigation, from the attorneys who to the States. As I said, under the not pursuant to a contract, and which, overcharged those clients. This legisla- original bill that Senator CORNYN and I by the precedence of this Congress, can tion ensures that overcharging be rec- introduced, it is about $9 billion. That be limited. ognized in law so that the States can is the securitized value of this income Now, the amendment we have pro- apply for that refund. stream of over half a billion dollars posed guarantees that none of these How does that work? There is an ex- every year for 30 years, and maybe in lawyers receives less than $20,000 an isting IRS Code provision that says if perpetuity. So $9 billion is the reduced- hour for their services. Is that gen- one is the trustee of a trust, and they to-present value of this fee award. erous enough? None of them will get overcharge that trust, they take too I have a chart, which I do not think less than $20,000 an hour. How much is much in the way of fees out of it, they I will bother to put up on the easel, a plumber charging these days? A hun- have to return those fees. The IRS will which shows what every State would dred dollars an hour? I am not sure enforce that. get. My State, for example, would re- what it is. How much does a school- In fact, the Secretary of the Treasury ceive about $164 million, and it could teacher get these days? Probably not is involved in that process. We simply use that money. Since it is based pure- $100 an hour when you add it all up. apply that same existing IRS Code pro- ly on population, if that is what Ari- These lawyers would be guaranteed vision to this situation where attor- zona, with a little over 5 million peo- $20,000 for every hour they put in. Some ney’s fees have been charged in excess. ple, received, my colleagues can figure claim to have put in 10,000 hours, 20,000 The common thread is a fiduciary re- out what their State would receive. hours, 30,000 hours. Add it up. They will lationship, the legal term which ap- I will go back to describe what the not have to sell their yachts. plies where a trustee or a lawyer to a tobacco settlement really did because As I said, there are a lot of descrip- trust or to a client has a responsibility most people are not aware of what hap- tions of this, and I will put some of this above and beyond a mere contractual pened in the tobacco settlement. Attor- in the RECORD at the appropriate time.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00076 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6223 I wanted to note, if anyone thinks I it is to try a $1 million case, but the applica- Let me quote a couple of these misspeak, in one of the articles it is tion of a percentage comparable to that in a courts. This is from the Illinois Su- noted that in the case of Michigan, for smaller case may yield an award 150 times preme Court: greater. example—I will be very specific—the A fiduciary relationship exists as a matter fee worked out to $22,500 an hour for Another said: of law between attorney and client. this particular firm. These lawyers There is considerable merit to disallowing The New Jersey Supreme Court: would therefore have to take a little standard percentage awards as the size of the An attorney’s freedom to contract with a bit of a cut. Instead of getting $22,500 recovery fund increases. In many cases the client is subject to the constraints of ethical increase in the recovery is merely a factor in considerations. an hour, they only get $20,000 an hour. the size of the class and has no direct rela- Now, The Economist, a respected tionship to the efforts of counsel. The Massachusetts Appeals Court: magazine published in Great Britain, While freedom of contract is the guiding That certainly was the case in the to- notes that tobacco settlement ‘‘arbi- principle underlying contract law, contrac- bacco litigation. tration is a mere figleaf. The money tual freedom is muted in the lawyer-client Before the trial lawyers or some of going to the lawyers was clearly part and lawyer-lawyer context. their allies say this is a Republican That comes from a law professor, Joseph of the overall amount that the tobacco lawyer-bashing amendment, I say two Perillo. companies were willing to pay to settle things. First, I am a lawyer. I am not Here is another court: the case. Whatever the lawyers get, the trying to bash any lawyers. A guaran- [A]n attorney is only entitled to fees which States do not.’’ teed fee of $20,000 an hour would be are fair and just and which adequately com- That is the bottom line. So the pensate him for his services. This is true no money has to be returned to the cli- considered extraordinarily generous by the standards of most of my colleagues. matter what fee is specified in the contract, ents, the States, not the tobacco com- because an attorney, as a fiduciary, cannot panies. Second, the fee formula used in this bind his client to pay a greater compensa- As I said, the proposal is based on the situation allows attorneys to receive tion for his services than the attorney would intermediate sanction tax, an existing up to 500 percent of what courts usu- have the right to demand if no contract had provision of the Tax Code that applies ally determine as reasonable hourly been made. Therefore, as a matter of public a punitive tax to the excessive portion rates but not less than $20,000 an hour. policy, reasonableness is an implied term in every contract for attorney’s fees. of a fiduciary’s fee and effectively So you take what a court determines forces the fiduciary to restore the ex- as a reasonable rate, add 500 percent— As I noted before, in this case, in the cessive portion of the fee to the client. no one can contend that is unfair—and tobacco litigation, you don’t have a Our amendment applies the same tax that is the standard used in this typ- contract between the client and the at- formula to the excessive attorney’s ical type of case. torney. The contract is between the at- fees in the mega-lawsuits. Before you say this is Republican torney and the opposing parties, the The suit would have to be $100 mil- lawyer bashing, this came from prob- tobacco companies, which make it even lion or this provision would not apply. ably the most liberal court in the coun- more suspect. Again, as I said, this does not change We are talking about a very minute try, the Florida Supreme Court, which the substantive law. It simply enforces number of lawsuits per year; probably in a specific case tried to determine preexisting fiduciary standards that 15 to 20 litigations a year, at most, ac- what would be a fair fee in a situation like this. bind every attorney in every State. cording to experts, would qualify. You I urge my colleagues when we vote on have to exceed $100 million as part of What it said was that the maximum multiplier that it thought was appro- this amendment tomorrow to just con- the settlement or judgment. sider the alternative. These lawyers Let me note, because one of my col- priate was this multiplier of 5, or 500 are all going to get a ton of money, leagues said you have to have contin- percent. hundreds of millions of dollars, guaran- gent fees in the big complicated cases, Here is what the court said: teed $20,000 per hour that they work. that is very true, lawyers will take We set the maximum multiplier available in this common-fund category of cases at 5. Most of them worked, they claim, tough cases on a contingent fee. In the thousands of hours on this case. But we early stages of this litigation, it was . . . [A] multiplier which increases fees to five times the accepted hourly rate is suffi- are able to return somewhere, depend- tough litigation, that is true. So some- cient to alleviate the contingency risk factor ing upon how the payment for this times lawyers will take a third, some- involved and attract high level counsel to amendment is done, between $6.5 bil- times even 40 percent. I have seen fees common fund cases while producing a fee lion and $9 billion to the States. The as high as 50 percent of the settle- that remains within the bounds of reason- States could use this money at this ments. ableness. We emphasize that 5 percent is a time. The tobacco companies have to maximum multiplier. What have experts and courts said pay the money one way or the other. about that? Courts have made clear I take this as the most liberal of After compensating lawyers on the that fee agreements based primarily on standards, the reasonable attorney’s basis of a reasonable attorney fee plus the size of the recovery tend to become fees, plus 500 percent, and then say, but 500 percent, but at a minimum at least unreasonable when judgments reach we will guarantee you that you do not $20,000 an hour, the remainder would be the $100 million mark, which is the get anything less than $20,000 an hour returned to the States. I submit this is mark we use here. As one court stated: if it turns out not to satisfy that. I a responsible thing for us to do. In much smaller cases, a fee award of 33 challenge any of my colleagues, if you The final comments I would like to percent does not present the danger of pro- vote against this amendment, you are make relate to the amendment that viding the plaintiff counsel with the windfall going to have to justify paying lawyers will be offered tomorrow relating to that would accompany a mega fund settle- $20,000 an hour rather than returning the dividend section of this bill. The ment of $100 million or upwards, but it is quite different when the figure hits the real- that money to the States. proposal is to join the President in fi- ly big time. The original of the bill Senator COR- nally bringing to an end the pernicious Whereas the Third Circuit Court NYN and I filed has this provision effec- practice of taxing dividends in this notes: tively from June of last year. To avoid country twice, which puts us at a com- any question that it is retroactive, we petitive disadvantage with our trading Courts have generally decreased the per- centage awarded for attorney fees as the made it effective on the effective day partners, which is unfair in anybody’s amount recovered increases and $100 million of the act, so it is only prospective. book, which drives corporations to seems to be the informal marker of a very There is one more thing I want to fund their investment by debt rather large settlement. summarize. This act does not alter the than equity investment, which reduces It is one of the reasons we chose the considered fee award standards of any the transparency of corporations be- $100 million mark. jurisdiction in the country. Rather, it cause they do not have to account to The logic of avoiding judgment-based is intended to enforce those standards shareholders, and which diminishes the awards in the very largest lawsuits is and to correct the occasional extreme value of stock because the shareholders straightforward: outlier. What we are doing is enforcing are going to have to pay a tax on the It is not 150 times more difficult to pre- the court-imposed law relating to fidu- dividends even after the corporation pare, try, and settle a $150 million case than ciary responsibilities. has already done so.

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00077 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6224 CONGRESSIONAL RECORD — SENATE May 14, 2003 Those are the reasons President Bush But another point I would like to fly a lot are not flying as much. Why? understood that this double taxation of make with regard to this whole issue is Because the corporations are trying to dividends had to be addressed in this that dividends obviously work in two save money. Why? Because they can’t tax bill. The beauty of his proposal is good ways. By putting money back in get enough money to invest in their that when combined with two of the taxpayers’ pockets, they can do with businesses. Why? Because there is a other provisions of the act, the accel- those dividends whatever they like. capital asset deficit. This recession, eration of the write-off for small busi- The distinguished Senator from Flor- the first of the 21st century, is the first ness and, most important, the accelera- ida who was speaking a moment ago nonconsumer recession. It is a capital tion of the reductions in the marginal talked about the need for consumers to asset deficit recession. It is a recession income tax rates, we will produce in have more money in their pockets. that understands that investment in- this country 1.4 million jobs next year, This is a way for consumers, and spe- come is what is lacking. and we could produce half a million cifically senior citizens, to get more Over the last 2 or 3 years, we have jobs this year. money in their pockets. There are seen, by the count of some economists, The proposal that is going to be of- about 10 million seniors who would re- almost $10 trillion sucked out of the fered tomorrow is ingenious in that it ceive relief under this proposal, just stock values of this country. Some- puts the bulk of this relief right up under $1,000 a year in terms of the av- thing has to be done to put back that front where it will do good for the erage value they would receive. This is value. The way you put it back is by economy right now; and, second, it money in their pocket. This is money creating more investment opportuni- sends an unmistakable message to the with which they can do one of two ties. Most of the economists we have stock market that we mean business things: They can either spend it or talked to said the single best thing you about reducing the tax to zero. can do to add to that investment op- What the proposal does is, for this they can invest it. In either case they portunity is to repeal this double tax- current tax year, before we could put are helping the economy. For those who think we need to have ation of dividends. this all in effect, it gives all of the divi- people who can spend more, they can My colleague, Senator VOINOVICH dend holders a 50-percent deduction on spend more. For those who think we from Ohio, quoted Alan Greenspan a their dividends. So for this tax year we need more investment, obviously some while ago, who said if you are going to are in right now they can write off half seniors invest some part of their in- do something like this, get rid of the of what they would otherwise have to double taxation of dividends. That will pay, and starting next year, 2004, and come. I would like to make a point in re- help spur investment. He also said to going into 2005 and 2006, in other words sponse to the Senator from Florida be- Congress, stop spending so much for 3 straight years, the tax rate for cause he referred to my beloved home money. them goes to zero on these dividends. It State of Arizona and showed a photo- This chart on my left demonstrates is repealed. It is gone. I challenge anybody at the end of graph of some airplanes sitting out on the situation here. Last year, con- that period of time to suggest at that a tarmac, airplanes that were sumer spending didn’t go down. Those point we try to reinstate the double mothballed. If you come out to Tucson, of you who have refinanced your home taxation of dividends. It is not going to AZ, you will see a very interesting or tried to buy a car at 0 percent inter- happen. sight. There are literally hundreds if est know people are still buying. Con- So the message to the stock market, not thousands of these airplanes. Most sumer spending went up 3.4 percent when the vote occurs tomorrow and of them are military, but there are last year, and it was up the year before you have seen that the Senate is will- some commercial airplanes as well. as well. This green line shows con- ing to follow the President and repeal The point he was trying to make was sumer spending continues to go up. the double taxation of dividends, the this is a consumer-driven recession and From 1999 to 2002, you can see that con- message is that you can finally begin therefore we need to put money in the sumer spending is increasing. to see the light at the end of the tunnel pockets of consumers. The two big It hasn’t fallen off. What has fallen with respect to the recovery. things we do here is accelerate the off? The gross private investment is What do economists tell us? One marginal income tax rate—that puts what has fallen off—the investment in economist, a very prominent econo- money in the pockets of consumers— our businesses in the United States. mist, told us at a dinner the other and don’t double tax dividends so the After reaching the peak just after the night that he could expect to see at people who invest in stocks have that year 2000, we all know what happened. least a 20-percent increase in the value money to spend. Even for those who be- We read the paper and see what is hap- of stock as a result of this. The average lieve this is a consumer-driven reces- pening to the stock market. You can of the economists we have talked to is sion, which it is not, what the Presi- see investment in the market has closer to 10 percent. But take 10 per- dent has proposed, and what we will be plummeted, and it hasn’t come back cent. I think we would all like to see a voting on tomorrow, helps put money very much. It will come back if we give return of that much value in our stock in the pockets of consumers. people the means to invest and the in- portfolio. This exists whether or not we But there is a fundamental misunder- centive to invest because they are not are holding stock that issues dividends standing, if you look at airplanes and going to have their profits from their because of the general value of the say, therefore, because people are not investment in corporations taxed after market, or increased value of the mar- flying as much, this is a consumer- the corporation has already paid the ket that would result from this. Obvi- driven recession. There are two prob- tax. ously, those taxpayers who receive lems: First, regarding 9/11, the airline This is clearly a capital asset prob- dividends from their corporate holdings industry is almost unique among the lem and not a consumer spending prob- would receive a direct benefit in the re- businesses in this country. The airline lem, as has been alleged by so many of duction of their liability for taxes, in industry and associated industries those on the other side of the aisle. addition to the increase in the value of went into a nose dive that they still Finally, I want to say this: My col- their stock. haven’t recovered from because the league from Florida said, ‘‘The Presi- Obviously, this is going to be very traveling public has not traveled as dent’s handling of the economy’’—the good tax policy. It puts us in a better much after 9/11. But the airlines will end of the quote, but the gist is the competitive position. Do you know tell you a second factor has contrib- President’s handling of the economy is that the United States has the second uted to their bad financial situation. In why we are in the bad economic situa- worst tax rate on dividends in the en- addition to the fact that some people tion. tire world of economically developed do not travel as much as a result of 9/ Under current circumstances, would countries? Only Japan has a slightly 11, and we have increased security that the President could handle the higher rate. And every other country costs placed upon them, the biggest economy. But as all economists know, in the economically developed world single factor, they will tell you, is they fortunately 250-plus million people has a lower tax rate on dividends than have lost the business traveling public. drive the economy in this free market we do. No wonder we are having a prob- The business travelers who buy the country of ours. They make millions of lem right now. first class or business class tickets and decisions every day. The President

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00078 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6225 doesn’t run the economy in the United times States find themselves in—and in But the real concern I have about States of America. He has very little my State of Texas they find themselves this arrangement, particularly in my that he can do to change the economic with a $10 billion budget shortfall—but home State of Texas, is while the State situation in the country except try to notwithstanding that fact, I would be receives a historic settlement of $17.3 lead by persuasion. He is trying very reluctant to send $20 billion to the billion—and actually that purports to hard to do that. States with no strings attached so they be the present value of the money that The other thing he can do is to pro- could spend however they might like is going to be paid in perpetuity—it is pose to the Congress that we try to do when we have no means of establishing really probably only a part of what ul- things he thinks will help the economy accountability for how that money timately that judgment is worth. and he has done that. But my colleague might be spent. But the collective wis- Once these lawyers settled the case who spoke these words a moment ago dom of the Finance Committee and for the client, so to speak, then they wants to deny him the ability to put perhaps this body is that $20 billion in talked to the tobacco industry, and his plan in effect. On the one hand, State aid will be sent to the States as they said: OK, what about us? We have they complain he is not doing anything part of this overall package. my client’s settlement, $17.3 billion, to handle the economy, and on the That being the case and recognizing roughly speaking. Now what about us? other hand, they are going to disagree that no single Senator gets everything And they engaged in an arrangement with whatever he proposes to do. Of he or she wants, the question then has which I believe violated one of the course, we know the truth. He doesn’t arisen—and the Senator from Arizona most basic obligations that a lawyer handle the economy. But he has some has raised it—the issue of attorneys’ owes to the client and breached their influence over the direction we go by fees ostensibly earned by lawyers who fiduciary duties to the client. getting his best advisers together and represented the various States in the It simply boils down to this: that the trying to figure out how we can create tobacco litigation and other contin- duty of a lawyer who has been hired by the most jobs and produce economic re- gency fee arrangements whereby cer- a client is to maximize the recovery on covery. He has done that. Most of the tain private lawyers have earned, or at the part of the plaintiff. Here, rather Republicans in this body have agreed least claim to have earned, literally than do that, they struck a deal with his proposal is the best way for us to billions of dollars in attorneys’ fees. the tobacco industry for a certain I don’t speak on this issue without a create jobs. amount of money and then said: Well, little bit of history, and perhaps that Therefore, tomorrow what will be of- on top of that, now you have to deal would provide some context for why I fered is very close to what he proposed. with us—which turns on its head the support this amendment. duty of loyalty that a lawyer has to a With this dividend, this elimination of On January 1, 1999, I was sworn in as client to not let his or her personal in- the double taxation of dividends, we Attorney General of Texas, shortly terest conflict with the interests of the will be able to go a long way toward after my predecessor had entered into a giving the President the plan he has settlement with the tobacco industry, client and to maximize the recovery by asked for—not so that he can handle and really I think what we all recog- the client. So, simply stated, I believe what we the economy, but so we as leaders can nize is an unprecedented lawsuit ulti- saw in the tobacco litigation, all across help lead the country toward at least mately resulting in the largest civil this country, represented an unprece- some degree of recovery in this year of judgment in the history of the world. 2003. I know the State of Texas and other dented breach of fiduciary duty that As I said before, some people say the States filed this lawsuit to recover the lawyer owed to the client to maxi- President’s reelection depends on Medicaid expenditures they had in- mize the client’s recovery and enrich whether the economy is strong or not. curred on smoking-related illnesses. the lawyers in the process. I don’t think he would be proposing Certainly, I count myself second to no So the question is, What do we do something which he thinks won’t work. one in expressing concern about the about it? Well, here again, I believe He is proposing something which he be- number of people in this country and that the needs of the States, and par- lieves will work, and we believe it will around the world—some 400,000 in this ticularly the State of Texas—which is work. That is why I hope my col- country alone—who lose there lives an- currently in session trying to deal with leagues will support the proposal that nually as a result of smoking-related a $10 billion shortfall, looking at cut- will be offered tomorrow in support of illnesses. But that is only part of the ting health care for those who are un- the President’s program to eliminate story. able to pay for health care on their the double taxation of dividends. The rest of the story is that a small own, for children under the CHIPS pro- The PRESIDING OFFICER. Who group of entrepreneurial lawyers saw gram, for public education—that this yields time? an opportunity once they joined league provides an opportunity for this body Mr. GRASSLEY. I yield to the Sen- with State attorneys general to file to correct an injustice, to enforce a fi- ator from Texas what time he might litigation against the tobacco industry. duciary duty that the lawyer owes to consume. If that were more or less the end of the the client, and to provide aid to the The PRESIDING OFFICER. The Sen- story, then I wouldn’t have concerns. States in the process in a way that will ator from Texas. But ultimately, those settlements help ameliorate that loss and vindicate Mr. CORNYN. Mr. President, I appre- ended up with the States in a joint ven- a wrong. ciate the Senator from Iowa providing ture with the tobacco industry to keep Part of this story, too, involves a me an opportunity to speak on a mat- the tobacco industry alive, and with tragedy. My predecessor as attorney ter I know the Senator from Arizona the settlements, these huge amounts of general currently stands indicted by a has already addressed—something money, multiple billions of dollars U.S. grand jury in the Western District called the Intermediate Sanctions being paid out of the profits of the to- of Texas for trying to enrich a friend, a Compensatory Review Adjustment Act bacco industry for continuing to sell colleague, to the tune of some $520 mil- of 2003. more of their tobacco products in the lion for doing no work. This amendment, I believe, is impor- future, not just in this country but For those who have not followed the tant for a number of reasons. First of across the world. story, I will just say that about the all, nobody in this body is going to get So rather than discouraging or lim- time the tobacco settlement was quite everything they may want in this iting tobacco use in this country and struck, there arrived on the scene an- jobs and economic growth package of around the world, the States became other lawyer, whom nobody had ever 2003. But, for better or for worse, a deal joint venturers, so to speak, with the heard of before, by the name of Mark has been struck in order to obtain suf- tobacco industry because if the tobacco Murr. The lawyers who had been in- ficient votes to get the matter out of industry was unable to sell more of its volved in the litigation—at least they committee and hopefully enacted into product, then the States would not get had done some work on it—wondered law to provide $20 billion of State aid paid under the settlements, a truly what this arrangement was. And when as part of this package. shrewd and ingenuous arrangement on push came to shove, ultimately the five If it had been up to me, I would have the part of these entrepreneurial law- main lawyers in the Texas tobacco law- said that notwithstanding the difficult yers. suit got their $3.3 billion. But then

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00079 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S6226 CONGRESSIONAL RECORD — SENATE May 14, 2003 there was an arrangement made to cre- and what this amendment addresses by enforcing this fiduciary duty owed ate a separate mechanism, a collusive specifically, is the manner in which by the lawyers to the client. arbitration arrangement, whereby five private lawyers enrich themselves Let me just say, Mr. President, in Mark Murr would receive up to $520 at the expense of the State of Texas closing, that I support the Jobs and million out of the recovery of the State and how other lawyers across the coun- Economic Growth Act of 2003. Even of Texas. try, during the course of this tobacco though I think it will undergo a num- As it turned out, during my inves- litigation, enrich themselves at the ex- ber of amendments and will ultimately tigation as attorney general, we deter- pense of their State clients in breach of not be exactly what any of us would mined that the contract upon which their fiduciary duties. like, I believe it provides a necessary Mr. Murr claimed a right to be paid The Internal Revenue Code provides prescription for what ails the economy had been falsified, backdated, and lit- a mechanism where those who breach and will provide a necessary jump-start erally been cut and pasted to make it fiduciary duties—whether they be a to allow taxpayers, the ones who earn look as if he had done some work on trustee or, in this case, a lawyer rep- the money, to keep more of that money the case and had been involved in the resenting a client—can be taxed. It pro- and spend it as they see fit, and to case much earlier than he really had. vides another mechanism, a nonlitiga- allow small businesses that earn the In truth, and in fact, I believe he did tion mechanism, to enforce that fidu- money to reinvest in their businesses not do any work to justify that fee. and create new jobs in a way that will During the 4 years that I was attor- ciary duty that is owed by the fidu- ultimately help us grow our way out of ney general of the State of Texas, we ciary to the client. In this case, I be- our current economic doldrums. conducted an investigation into that lieve it is an opportunity for this body So I am happy to support this impor- matter, were successful in preventing to find funds—if, in fact, it is the will Mr. Murr from making the claim for of the majority of this body—and to see tant legislation and happy to add my that money against the treasury of the Federal dollars, or money that other- voice to hopefully putting America State of Texas, and ultimately, I be- wise is paid by Federal taxpayers, go to back to work. lieve, provided the factual basis under State taxpayers. It provides another Mr. President, I yield the floor. which the U.S. attorney was able to opportunity to provide up to $9 billion The PRESIDING OFFICER. Who present that case to the grand jury, of additional funds by simply enforcing yields time? and ultimately resulting in the indict- the fiduciary duty owed by these law- The Senator from Montana. ment of the former attorney general of yers to their clients, the various Mr. BAUCUS. Mr. President, I ask the State of Texas. States. unanimous consent that all pending I say that with no pleasure at all. It So I am pleased to join Senator KYL amendments be temporarily set aside is a tragedy, a terrible tragedy. But it and Senator ALEXANDER in cospon- so the Senator from Louisiana can is a story of how a steward of the pub- soring this amendment that would, if offer an amendment. lic trust has violated that trust and adopted by this body, provide an addi- The PRESIDING OFFICER. Without now must be held accountable for vio- tional $9 billion in State aid, in a way objection, it is so ordered. lating that trust. But in the process, that I believe ultimately does justice, The Senator from Louisiana.

N O T I C E Incomplete record of Senate proceedings. Except for concluding business which follows, today’s Senate proceedings will be continued in the next issue of the Record.

ORDERS FOR THURSDAY, MAY 15, growth bill and immediately begin a with numerous rollcall votes. With the 2003 series of stacked votes on the remain- cooperation of all Members, we can fin- Mr. GRASSLEY. Mr. President, I ask ing amendments to the bill. There are ish our work on these two bills in an unanimous consent that when the Sen- approximately 25 amendments that orderly way. ate completes its business today, it will need to be disposed of. Following f the votes on the pending amendments, stand in adjournment until 9:15 a.m., UNANIMOUS CONSENT AGREE- additional amendments are possible Thursday, May 15. I further ask that MENT—CORRECTION ON VOTE and therefore this is going to be a very following the prayer and the pledge, SEQUENCE the morning hour be deemed expired, lengthy voting sequence. All Members The PRESIDING OFFICER. The Sen- the Journal of proceedings be approved are urged to remain close to the Cham- ber during this so-called vote-arama in ator from Montana. to date, the time of the two leaders be Mr. BAUCUS. There is a correction reserved for their use later in the day, order to expedite passage of this bill. I also ask that any Member who in- on the vote sequence. Landrieu amend- and that the Senate then resume con- ment No. 579 in the consent request sideration of Calendar No. 97, S. 1054, tends to offer an amendment during to- morrow’s session contact the chairman should be amendment No. 619. I ask the jobs and economic growth bill, as unanimous consent that change be provided under the previous order; pro- and ranking member of the Finance Committee. We are not encouraging made. vided further that no second-degree The PRESIDING OFFICER. Without additional amendments. However, it amendments be in order to the amend- objection, it is so ordered. ments offered during Wednesday’s ses- would be helpful to know in advance Mr. BAUCUS. In addition, in the con- sion, prior to a vote in relationship to the substance of the amendment to be sent request there were two Burns the amendment. offered. The majority leader has stated amendments. I ask unanimous consent Finally, I ask unanimous consent that we will finish the jobs and eco- that be modified so there is only one that following the first vote, all suc- nomic growth bill on Thursday. Burns amendment, and that is amend- ceeding votes in sequence be limited to Under a previous order, following ment No. 593. 10 minutes each. passage of the jobs and economic The PRESIDING OFFICER. Without The PRESIDING OFFICER. Without growth bill, the Senate will begin con- objection, it is so ordered. sideration of H.R. 1298, the Global HIV/ objection, it is so ordered. f f AIDS bill. The majority leader has also stated it is his intention to complete ADJOURNMENT UNTIL 9:15 A.M. PROGRAM action on this vital legislation this TOMORROW Mr. GRASSLEY. For the information week as well. Mr. GRASSLEY. If there is no fur- of all Senators, the Senate will resume Finally, I say to my colleagues that ther business to come before the Sen- consideration of the jobs and economic tomorrow will be a very busy session, ate, I ask unanimous consent that the

VerDate Mar 15 2010 21:24 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00080 Fmt 0624 Sfmt 0634 E:\2003SENATE\S14MY3.REC S14MY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY May 14, 2003 CONGRESSIONAL RECORD — SENATE S6227 Senate stand in adjournment under the WHILE ASSIGNED TO A POSITION OF IMPORTANCE AND CAPTAIN MARK E. FERGUSON III, 0000 RESPONSIBILITY UNDER TITLE 10, U.S.C., SECTION 601: CAPTAIN JOHN W. GOODWIN, 0000 previous order. CAPTAIN RICHARD W. HUNT, 0000 To be lieutenant general There being no objection, the Senate, CAPTAIN ARTHUR J. JOHNSON JR., 0000 MAJ. GEN. JOHN R. VINES, 0000 CAPTAIN MARK W. KENNY, 0000 at 12:16 a.m., adjourned until Thursday, CAPTAIN JOSEPH F. KILKENNY, 0000 May 15, 2003, at 9:15 a.m. THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT CAPTAIN WILLIAM E. LANDAY, 0000 IN THE UNITED STATES ARMY TO THE GRADE INDICATED CAPTAIN MICHAEL A. LEFEVER, 0000 f UNDER TITLE 10, U.S.C., SECTION 624: CAPTAIN GERARD M. MAUER JR., 0000 To be major general CAPTAIN DOUGLAS L. MCCLAIN, 0000 NOMINATIONS CAPTAIN WILLIAM H. MCRAVEN, 0000 BRIGADIER GENERAL LLOYD J. AUSTIN III, 0000 CAPTAIN RICHARD O’HANLON, 0000 Executive nominations received by BRIGADIER GENERAL GARY L. BORDER, 0000 CAPTAIN KEVIN M. QUINN, 0000 the Senate May 14, 2003: BRIGADIER GENERAL WILLIAM H. BRANDENBURG, 0000 CAPTAIN RAYMOND A. SPICER, 0000 BRIGADIER GENERAL RANDAL R. CASTRO, 0000 CAPTAIN PETER J. WILLIAMS, 0000 EXPORT-IMPORT BANK OF THE UNITED STATES BRIGADIER GENERAL JAMES A. COGGIN, 0000 IN THE MARINE CORPS BRIGADIER GENERAL MARTIN E. DEMPSEY, 0000 APRIL H. FOLEY, OF NEW YORK, TO BE A MEMBER OF BRIGADIER GENERAL BARBARA G. FAST, 0000 THE FOLLOWING NAMED OFFICERS IN THE UNITED THE BOARD OF DIRECTORS OF THE EXPORT-IMPORT BRIGADIER GENERAL JOSEPH F. FIL JR., 0000 BANK OF THE UNITED STATES FOR A TERM EXPIRING STATES MARINE CORPS FOR REGULAR APPOINTMENT BRIGADIER GENERAL BENJAMIN C. FREAKLEY, 0000 UNDER TITLE 10, U.S.C., SECTION 531: JANUARY 20, 2007, VICE DAN HERMAN RENBERG, TERM BRIGADIER GENERAL JOHN D. GARDNER, 0000 EXPIRED, TO WHICH POSITION SHE WAS APPOINTED DUR- BRIGADIER GENERAL BRIAN I. GEEHAN, 0000 To be first lieutenant ING THE LAST RECESS OF THE SENATE. BRIGADIER GENERAL GARY L. HARRELL, 0000 BENJAMIN T ACKISON, 0000 DEPARTMENT OF TRANSPORTATION BRIGADIER GENERAL STEVEN R. HAWKINS, 0000 ALEC H ACUNA, 0000 BRIGADIER GENERAL JANET E. A. HICKS, 0000 NICOLE R. NASON, OF VIRGINIA, TO BE AN ASSISTANT ROBERT M AGUAM, 0000 BRIGADIER GENERAL KENNETH W. HUNZEKER, 0000 DARRIAN H AINSWORTH, 0000 SECRETARY OF TRANSPORTATION, VICE SEAN B. BRIGADIER GENERAL JAMES A. KELLEY, 0000 O’HOLLAREN, RESIGNED. CAMERON W ALBIN, 0000 BRIGADIER GENERAL RICKY LYNCH, 0000 ISMAEL ALCALA, 0000 DEPARTMENT OF STATE BRIGADIER GENERAL MICHAEL R. MAZZUCCHI, 0000 SKENDER ALICKA, 0000 BRIGADIER GENERAL DENNIS C. MORAN, 0000 RYAN P ALLEN, 0000 GRETA N. MORRIS, OF CALIFORNIA, A CAREER MEMBER BRIGADIER GENERAL JAMES H. PILLSBURY, 0000 THOMAS L ALLOSSO, 0000 OF THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- BRIGADIER GENERAL DAVID C. RALSTON, 0000 RICHARD ALVAREZ, 0000 COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND BRIGADIER GENERAL DON T. RILEY, 0000 EDWARD P AMDAHL, 0000 PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA BRIGADIER GENERAL JAMES E. SIMMONS, 0000 MICHAEL E ANDA, 0000 TO THE REPUBLIC OF THE MARSHALL ISLANDS. BRIGADIER GENERAL EDGAR E. STANTON III, 0000 RICHARD A ANDERSON, 0000 UNITED STATES POSTAL SERVICE BRIGADIER GENERAL GUY C. SWAN III, 0000 ROBERT K ANDERSON, 0000 BRIGADIER GENERAL DAVID P. VALCOURT, 0000 SCOTT J ANDERSON, 0000 JAMES C. MILLER III, OF VIRGINIA, TO BE A GOVERNOR BRIGADIER GENERAL W. MONTAGUE WINFIELD, 0000 ANTHONY J ANGELONE, 0000 OF THE UNITED STATES POSTAL SERVICE FOR THE BRIGADIER GENERAL JOHN A. YINGLING, 0000 ALEXANDER C ARCINAS, 0000 TERM EXPIRING DECEMBER 8, 2010, VICE EINAR V. IN THE MARINE CORPS DAVID A ARENAS, 0000 DYHRKOPP, TERM EXPIRED, TO WHICH POSITION HE WAS GREIG E ARENDT, 0000 APPOINTED DURING THE LAST RECESS OF THE SENATE. THE FOLLOWING NAMED OFFICER FOR APPOINTMENT DANIEL ARISPE, 0000 MERIT SYSTEMS PROTECTION BOARD IN THE UNITED STATES MARINE CORPS TO THE GRADE THOMAS K ARMSTRONG, 0000 INDICATED WHILE ASSIGNED TO A POSITION OF IMPOR- BARRY S ARNWINE, 0000 NEIL MCPHIE, OF VIRGINIA, TO BE A MEMBER OF THE TANCE AND RESPONSIBILITY UNDER TITLE 10, U.S.C., RYAN W ASLESEN, 0000 MERIT SYSTEMS PROTECTION BOARD FOR THE TERM OF SECTION 601: JAMES A ATCHISON JR., 0000 SEVEN YEARS EXPIRING MARCH 1, 2009, VICE BETH DARRYL G AYERS, 0000 SUSAN SLAVET, TERM EXPIRED, TO WHICH POSITION HE To be lieutenant general TIMOTHY J AYERS, 0000 WAS APPOINTED DURING THE LAST RECESS OF THE SEN- LT. GEN. WALLACE C. GREGSON JR., 0000 RICHARD P AYRES, 0000 ATE. JOHN L BABISH, 0000 IN THE NAVY FEDERAL LABOR RELATIONS AUTHORITY ROBERT E BACZKOWSKI JR., 0000 BOBBY R BAILEY JR., 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT TASE E BAILEY, 0000 PETER EIDE, OF MARYLAND, TO BE GENERAL COUNSEL IN THE UNITED STATES NAVY TO THE GRADE INDICATED RIDLEY P BAIN, 0000 OF THE FEDERAL LABOR RELATIONS AUTHORITY FOR A UNDER TITLE 10, U.S.C., SECTION 624: TERM OF FIVE YEARS, VICE JOSEPH SWERDZENWSKI, GREGORY A BAKER JR., 0000 RESIGNED, TO WHICH POSITION HE WAS APPOINTED To be rear admiral (lower half) JONATHAN T BAKER, 0000 DURING THE LAST RECESS OF THE SENATE. BRADLEY J BALL, 0000 CAPT. CAROL I. B. TURNER, 0000 BRIAN W BANN, 0000 FEDERAL MINE SAFETY AND HEALTH REVIEW THE FOLLOWING NAMED OFFICER FOR APPOINTMENT JEFFREY M BARBER, 0000 COMMISSION IN THE UNITED STATES NAVY TO THE GRADE INDICATED ROBERT G BARBER, 0000 UNDER TITLE 10, U.S.C., SECTION 624: ADAM N BARBORKA, 0000 STANLEY C. SUBOLESKI, OF VIRGINIA, TO BE A MEM- BRUCE B BARKER II, 0000 BER OF THE FEDERAL MINE SAFETY AND HEALTH RE- To be rear admiral (lower half) SEAN W BARNES, 0000 VIEW COMMISSION FOR A TERM OF SIX YEARS EXPIRING ROBERT M BARNHART JR., 0000 CAPT. TERRY L. MCCREARY, 0000 AUGUST 30, 2006, VICE MARC LINCOLN MARKS, TERM EX- COLBY E BARRETT, 0000 PIRED, TO WHICH POSITION HE WAS APPOINTED DURING THE FOLLOWING NAMED OFFICER FOR APPOINTMENT CRAIG D BARRETT, 0000 THE LAST RECESS OF THE SENATE. IN THE UNITED STATES NAVY TO THE GRADE INDICATED ARTHUR J BARRON, 0000 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION UNDER TITLE 10, U.S.C., SECTION 624: ANDREW E BARTLE, 0000 To be rear admiral (lower half) DANIEL J BARTNICKI, 0000 NAOMI CHURCHILL EARP, OF VIRGINIA, TO BE A MEM- KATHARINE A BARWICK, 0000 BER OF THE EQUAL EMPLOYMENT OPPORTUNITY COM- CAPT. GARY A. ENGLE, 0000 RUSSELL N BATES, 0000 MISSION FOR A TERM EXPIRING JULY 1, 2005, VICE REGI- CARRIE C BATSON, 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT NALD EARL JONES, TERM EXPIRED, TO WHICH POSITION RYAN J BAUMAN, 0000 IN THE UNITED STATES NAVY TO THE GRADE INDICATED SHE WAS APPOINTED DURING THE LAST RECESS OF THE ERIC E BAYLES, 0000 UNDER TITLE 10, U.S.C., SECTION 624: SENATE. JAMES F BEAL, 0000 CORPORATION FOR NATIONAL AND COMMUNITY To be rear admiral (lower half) SHANNON R BEALL, 0000 JAMES A BEAULIEU, 0000 SERVICE CAPT. THOMAS R. CULLISON, 0000 BRIAN J BECK, 0000 WILLIAM A. SCHAMBRA, OF VIRGINIA, TO BE A MEMBER THE FOLLOWING NAMED OFFICER FOR APPOINTMENT JONATHAN W BEERY, 0000 OF THE BOARD OF DIRECTORS OF THE CORPORATION IN THE UNITED STATES NAVY TO THE GRADE INDICATED DALE R BEHM, 0000 FOR NATIONAL AND COMMUNITY SERVICE FOR A TERM UNDER TITLE 10, U.S.C., SECTION 624: WELDON T BELL II, 0000 RUSSELL A BELT II, 0000 EXPIRING SEPTEMBER 14, 2006, VICE CAROL W. KINSLEY, To be rear admiral (lower half) TERM EXPIRED, TO WHICH POSITION HE WAS APPOINTED RICARDO BENAVIDES, 0000 DURING THE LAST RECESS OF THE SENATE. CAPT. JEFFREY A. WIERINGA, 0000 JOHN T BERDUSIS, 0000 CARL E BERGER, 0000 DONNA N. WILLIAMS, OF TEXAS, TO BE A MEMBER OF THE FOLLOWING NAMED OFFICER FOR APPOINTMENT THE BOARD OF DIRECTORS OF THE CORPORATION FOR ANN BERNARD, 0000 IN THE UNITED STATES NAVY TO THE GRADE INDICATED VICTOR D BERNARD, 0000 NATIONAL AND COMMUNITY SERVICE FOR A TERM EX- UNDER TITLE 10, U.S.C., SECTION 624: PIRING OCTOBER 6, 2006, VICE ROBERT B. ROGERS, TERM CHRISTOPH T BERRY, 0000 EXPIRED, TO WHICH POSITION SHE WAS APPOINTED DUR- To be rear admiral (lower half) MICHAEL A BERSKY, 0000 ING THE LAST RECESS OF THE SENATE. THOMAS A BERTRAM JR., 0000 CAPT. DAVID J. DORSETT, 0000 MATTHEW J BETLEY III, 0000 LEGAL SERVICES CORPORATION THE FOLLOWING NAMED OFFICER FOR APPOINTMENT ANURADHA K BHAGWATI, 0000 CHAD T BIGNELL, 0000 THOMAS A. FUENTES, OF CALIFORNIA, TO BE A MEM- IN THE UNITED STATES NAVY TO THE GRADE INDICATED UNDER TITLE 10, U.S.C., SECTION 624: JAMES W BIRCHFIELD, 0000 BER OF THE BOARD OF DIRECTORS OF THE LEGAL SERV- PAUL F BISCHOFF, 0000 ICES CORPORATION FOR A TERM EXPIRING JULY 13, 2005, To be rear admiral (lower half) ALVIN C BISSETTE, 0000 VICE THOMAS F. SMEGAL, JR., TERM EXPIRED, TO WHICH JOE D BLACK JR., 0000 POSITION HE WAS APPOINTED DURING THE LAST RE- CAPT. ELIZABETH A. HIGHT, 0000 EDWARD J BLACKSHAW, 0000 CESS OF THE SENATE. THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ALEXANDER W BLAKE, 0000 LILLIAN R. BEVIER, OF VIRGINIA, TO BE A MEMBER OF IN THE UNITED STATES NAVY TO THE GRADE INDICATED MARC E BLANKENBICKER, 0000 THE BOARD OF DIRECTORS OF THE LEGAL SERVICES UNDER TITLE 10, U.S.C., SECTION 624: JOE D BLOCKER, 0000 CORPORATION FOR A TERM EXPIRING JULY 13, 2004, VICE PATRICIA D BLOCKER, 0000 HULETT HALL ASKEW, TERM EXPIRED, TO WHICH POSI- To be rear admiral (lower half) BRIAN M BLOMQUIST, 0000 TION SHE WAS APPOINTED DURING THE LAST RECESS OF CHADD W BLOOMSTINE, 0000 THE SENATE. CAPT. MARTIN J. BROWN, 0000 CAPT. WILLIAM A. KOWBA, 0000 CHARLES W BLOUNT, 0000 DEFENSE NUCLEAR FACILITIES SAFETY BOARD CAPT. MICHAEL J. LYDEN, 0000 SAMUEL P BLUNTZER, 0000 HORACE J BLY, 0000 R. BRUCE MATTHEWS, OF NEW MEXICO, TO BE A MEM- THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT JOHN D BOLT, 0000 BER OF THE DEFENSE NUCLEAR FACILITIES SAFETY IN THE UNITED STATES NAVY TO THE GRADE INDICATED JONATHAN C BONNETTE, 0000 BOARD FOR A TERM EXPIRING OCTOBER 18, 2005, VICE JO- UNDER TITLE 10, U.S.C., SECTION 624: DAVID L BONNEY, 0000 SEPH DINUNNO, RESIGNED, TO WHICH POSITION HE WAS To be rear admiral (lower half) NEIL E BOOHER, 0000 APPOINTED DURING THE LAST RECESS OF THE SENATE. ADAM P BOOTH, 0000 IN THE ARMY CAPTAIN JOHN M. BIRD, 0000 MICHAEL A BOURQUIN, 0000 CAPTAIN JOHN T. BLAKE, 0000 JONATHAN M BOYD, 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT CAPTAIN FRED BYUS, 0000 KURT A BOYD, 0000 IN THE UNITED STATES ARMY TO THE GRADE INDICATED CAPTAIN FRANK M. DRENNAN, 0000 BROOKS D BRADEN, 0000

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ANTHONY S BRADLEY, 0000 FRANK E DILLBECK, 0000 JEREMY A HAYES, 0000 JERAMY W BRADY, 0000 RODNEY J DIMALANTA, 0000 WILLIAM G HEIKEN, 0000 ROBERT K BRADY, 0000 JOHN Q DINH, 0000 MATHEW E HEIL, 0000 JAVIER A BRAHAM, 0000 MARK C DINSMORE, 0000 JOHN H HELM JR., 0000 JOEL P BRANIECKI, 0000 DEREK L DIVINE, 0000 KATHRYN E HENDEL, 0000 THOMAS J BRANNAN, 0000 KYLE M DJUKICH, 0000 CHARLES F HENDERSON III, 0000 ARTHUR J BRAUER, 0000 CHAD A DODD, 0000 JAMES J HENNESSEY II, 0000 JASON C BREZLER, 0000 ERIK H DOEBEL, 0000 GLEN C HENTON, 0000 JASON E BROENE, 0000 ROBERT L DOHN, 0000 JONATHAN D HESKETT, 0000 JOHN N BROGDON, 0000 KENT D DOMME, 0000 BRIAN J HESLIN, 0000 AARON J BROOKS, 0000 DAVID J DONNELL, 0000 JAMES L HIATT, 0000 THOMAS L BROOKS, 0000 BRIAN DONOHUE, 0000 EVAN L HILL, 0000 DAVID R BROTHERS, 0000 SEAN M DONOHUE, 0000 ROGER S HILL, 0000 BEN A BROUSIL, 0000 CRAIG T DOUGLAS, 0000 WILLIAM M HIMEBAUGH, 0000 BRIAN P BROWN, 0000 JOHN M DOUGLASS, 0000 AARON R HINMAN, 0000 CHRISTOPHER A BROWN, 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DAVENPORT, 0000 CLAIRE M HAMILTON, 0000 SEAN F KUEHL, 0000 MICHAEL R DAVIDGE, 0000 JON F HAMILTON, 0000 CASEY S KUHLMAN, 0000 ROBERT M DAVIS, 0000 LUCAS T HANBACK, 0000 DAVID W KUMMER JR., 0000 BENJAMIN J DEBARDELEBEN, 0000 KELLY A HANCOCK, 0000 JASON M KUT, 0000 BRYON S DECASTRO, 0000 ABIGAIL M HANDY, 0000 DANIEL C LAMMERS, 0000 ARTHUR G DECOTIIS JR., 0000 SPENCE W HANEMANN, 0000 CHARLES W LAMONT, 0000 JOEL A DELUCA, 0000 MICHAEL A HARKIN, 0000 JAMES M LANE, 0000 TIMOTHY R DEMANN, 0000 OWEN HARLEMAN, 0000 JOHN K LANGSTON, 0000 GERARD C DEMPSTER, 0000 ELIZABETH A HARRESCHOU, 0000 JENNIFER L LARSEN, 0000 SUZANNE M DENAULT, 0000 JOHN E HARRIS III, 0000 BRIAN T LAURENCE, 0000 JAMES C DERRICK, 0000 MICHAEL J HARRIS, 0000 DANIEL W LAUX, 0000 DARYL L DESIMONE, 0000 OMAR K HARRIS, 0000 MICHAEL S LAWLOR, 0000 ROBERT P DICKINSON, 0000 BENJAMIN V HAWN, 0000 DAVID F LAWRENCE, 0000

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GARRETT T LAWTON, 0000 DANIEL M MURPHY, 0000 CHRISTOPHER M REYNOLDS, 0000 JOHN K LE, 0000 JAMIE P MURPHY, 0000 JARET R RHINEHART, 0000 WYLAND F LEADBETTER III, 0000 MARK E MURPHY, 0000 TIMOTHY R RICHMOND, 0000 STEPHEN J LEBO, 0000 ROBERT P MURPHY JR., 0000 ANTHONY C RICKMAN, 0000 ANDY R LEE, 0000 SUSAN E MURPHY, 0000 CHRISTOPHER M RIEMAN, 0000 JEREMY E LEE, 0000 MATTHEW R MURRAY, 0000 ANNA M RILEASMITH, 0000 PAUL M LEE, 0000 JASON N MYERS, 0000 ANDREW F RILEY, 0000 JASON T LEIGH, 0000 ROBERT N MYERS JR., 0000 RUBEN S RILLOS, 0000 ERIK LEIN, 0000 TRISHA D MYLER, 0000 DAVID J RIVERA, 0000 TYLER D LEONARD, 0000 JAMES C NASH, 0000 ANDREW C ROBERTS, 0000 ERIC LEVESQUE, 0000 SAMAR M NASHAGH, 0000 CHAD E ROBERTS, 0000 ROBERTO LEVIN, 0000 DAVID A NASSE, 0000 HOWARD L ROBERTS, 0000 ERNEST C LINCOLN, 0000 EDWARD N NASTASE, 0000 JASON K ROBERTS, 0000 AARON C LLOYD, 0000 DOMINIQUE B NEAL, 0000 DARREN M ROCK, 0000 ROBERT J LOKAR, 0000 KENDRICK E NEAL, 0000 BRIAN L ROCKEL, 0000 WILLIAM L LOMBARDO, 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PATUBO, 0000 MARK A SMITH, 0000 DOUGLAS S MEISEL, 0000 STEPHEN T PEARSON, 0000 RANDALL W SMITH, 0000 MARCOS A MELENDEZ III, 0000 RICHARD F PENNINGTON II, 0000 VIDAL D SMITH, 0000 BENJAMIN M MERCIER, 0000 CRIS S PERHAM, 0000 WILLIAM R SMITH, 0000 MICHELLE K MERCURIO, 0000 AMOS J PERKINS III, 0000 KRZYSZTOF G SOBCZAK, 0000 SEAN M MERLIN, 0000 MATTHEW R PETER, 0000 JULIANNE H SOHN, 0000 WALTER P MESSICK III, 0000 JENNIFER R PETERSEN, 0000 BRIAN J SOLECKI, 0000 MELISSA K METZ, 0000 ERIK A PETERSON, 0000 CHRISTIAN SOLOMON, 0000 DANIEL W MICKLIS, 0000 ATIIM O PHILLIPS, 0000 JEREMY T SOULE, 0000 DAVID A MILLEN, 0000 JAY D PHILLIPS, 0000 JEFFREY T SPEEDY, 0000 ERIC W MILLER, 0000 MATTHEW L PHILLIPS, 0000 ERIK T SPRAGUE, 0000 JONPAUL MILLER, 0000 ROBERT A PIAGENTINI JR., 0000 JESS K SPRINGFIELD, 0000 KASEY C MILLER, 0000 PETER C PICONE JR., 0000 JARED P STANYER, 0000 MATTHEW S MILLER, 0000 SEAN M PIEJA, 0000 GREGORY STARACE, 0000 SEAN D MILLER, 0000 TOBY N PINEO, 0000 STEPHEN A STARR, 0000 BRETT C MINER, 0000 CHARLES T POLLOK II, 0000 DAVID B STAUGAITIS, 0000 MELISSA C MINTON, 0000 DAVID L POULERIS, 0000 TIMOTHY C STEPAN, 0000 MELISSA J MITCHELL, 0000 DIANA C POWELL, 0000 BRENT W STEVENS, 0000 TIMOTHY W MIX, 0000 MICHAEL W PRETUS, 0000 LATRESA A STEWARD, 0000 BRIAN L MIZE, 0000 TIMOTHY J PRICE, 0000 TIMOTHY C STEWART, 0000 THOMAS B MONDOUX, 0000 CHARLES A PRIDDY, 0000 MATTHEW J STICKSEL, 0000 DARYL MOORE, 0000 RICHARD J PROSSER III, 0000 KEVIN M STOFFELL, 0000 JEREMY P MOORE, 0000 JAMES N PUTNAM III, 0000 DOUGLAS M STRAHAN, 0000 JESSICA M MOORE, 0000 JAMES W QUEEN, 0000 JOSHUA D STRAND, 0000 MIRIAM N MOORE, 0000 JASON P QUINTER, 0000 BRENT W STRICKER, 0000 SEAN D MOORE, 0000 ANTHONY J R QUITUGUA, 0000 PAUL D STUBBS, 0000 TYLER J MOORE, 0000 CHRISTOPHER E RABASSI, 0000 SHAWN C STUDLEY, 0000 MELISSA R MORAN, 0000 MICHAEL A RADYNSKI, 0000 ADAM J SZELAG II, 0000 NATHAN P MOREHOUSE, 0000 CHAD W RAGAN, 0000 PHILIP J TADENA, 0000 SERGE P MOROSOFF, 0000 KASMIRA A RAK, 0000 TIMOTHY W TAPPLY, 0000 JASON R MORRISON, 0000 BILLY H RAMSEY, 0000 DONALD R TARBELL, 0000 STEPHEN D MORRISON, 0000 ALEX J RAMTHUN, 0000 CASEY L TAYLOR, 0000 CHAD M MORTON, 0000 ADAM D RANSON, 0000 CLAY H TERRELL, 0000 THOMAS A MORTON, 0000 SABIR RASHID, 0000 JASON P TERRUSO, 0000 JODIE F MOSER, 0000 SIDDHARTHA H RATHOD, 0000 STEPHEN W THEBERGE, 0000 JOHN A MOSS, 0000 ANDERSON W RAUB, 0000 ANDREW C THOMAS, 0000 JOSEPH E MOYE, 0000 JEFFREY N RAWLINS, 0000 CHRISTOPHER J THOMAS, 0000 HOWARD MUI, 0000 JOHN M REH, 0000 GRAHAM E THOMAS, 0000 WILLIAM R MULLIKIN, 0000 GREGORY M REHLENDER, 0000 HARRY K THOMPSON JR., 0000 MICHAEL K MULLINS, 0000 CHARLES P REICHE JR., 0000 JOE F THOMPSON III, 0000 MANUEL F MUNOZ, 0000 CAMERON M RENNER, 0000 RYAN E THOMPSON, 0000 JOHN P MUNTZER, 0000 ABRAHAM REYES, 0000 KEITH THORKELSON, 0000 CHRISTOPHER J MURPHY, 0000 RICO REYES, 0000 CRAIG A TIBADO, 0000

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FLETCHER C TIDWELL, 0000 CHARLOTTE V. LEIDY, 0000 PHILLIP L. BEACHY, 0000 DAVID F TOLAR, 0000 DEBORAH A. MCGHEE, 0000 DAVID F. BEAN, 0000 DAMON M TORRES, 0000 JANET D. STEWART, 0000 RICHARD R. BECK JR., 0000 AARON M TOSCANO, 0000 CHRISTOPHER L. VANCE, 0000 DAVID D. BELT, 0000 DUE H TRAN, 0000 CHARLES J. BERDAR, 0000 MINH D TRAN, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT WILLIAM P. BINGHAM, 0000 GILBERTO TREJO JR., 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY GILMORE N. BIRKLUND, 0000 MATTHEW A TREPTOW, 0000 UNDER TITLE 10, U.S.C., SECTIONS 624: MATTHEW E. BOBOLA, 0000 COURTNEY D TROMBLY, 0000 To be captain ROBERT A. BONNER, 0000 JAMES E TUNNEY, 0000 TIMOTHY E. BOOTHE, 0000 ANDREW M TURNER, 0000 JEAN E. BENFER, 0000 KENT D. BRADSHAW, 0000 BRIAN D TURNER, 0000 LEE S. CARDWELL, 0000 RICHARD L. BRASEL, 0000 RUSSELL A TUTEN, 0000 FRANK J. CARUSO JR., 0000 RICHARD P. BRECKENRIDGE, 0000 MICHAEL J TYLAVSKY, 0000 SEAN R. FILIPOWSKI, 0000 ROBERT J. BRENNAN, 0000 GLENDON TYREE, 0000 REINER W. LAMBERT, 0000 STEPHEN G. BRENNAN, 0000 JAMES L TYREE, 0000 ALLEN V. POLLARD, 0000 TIMOTHY B. BREWER, 0000 MATTHEW C UFFORD, 0000 CYNTHIA L. WIDICK, 0000 MICHAEL G. BROOKS, 0000 RODOLFO S URIOSTEGUI, 0000 JERRY K. BURROUGHS, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT JAMES R UWINS, 0000 THOMAS A. BUTERBAUGH, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY DILLON D VADEN, 0000 ALFRED J. CAMP JR., 0000 UNDER TITLE 10, U.S.C., SECTION 624: PAUL L VANDERWATER, 0000 EMIL C. CASCIANO, 0000 BRADLEY J VANSLYKE, 0000 To be captain GEORGE A. J. CHAMBERLAIN, 0000 MICHAEL P VOLMER, 0000 CURTIS S. CHESNUTT, 0000 JASON T VRABLE, 0000 DAVID L. BAILEY, 0000 HUBERT D. CLOPP, 0000 DENNIS C WAIT, 0000 BRIAN J. BILL, 0000 WILLIAM H. COGAN, 0000 WILLIAM F WALKER, 0000 NANETTE M. DERENZI, 0000 ALFRED COLLINS, 0000 CHARLES B. CONNERS, 0000 SEAN R WALSH, 0000 PAMELA A. HOLDEN, 0000 HUGH H. COOK III, 0000 STEPHEN E WALSON, 0000 CATHERINE S. KNOWLES, 0000 TIMOTHY E. COOLIDGE, 0000 ERIC J WALTHER, 0000 STAUFFER P. MALCOM, 0000 JUSTIN D. COOPER II, 0000 WILLIAM L WARD, 0000 RUSSELL L. SHAFFER, 0000 MICHAEL J. CORTESE, 0000 JEFFREY B WATTS, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT JOHN W. COVELL, 0000 NICHOLAS G WEBB, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY GEORGE A. COX, 0000 DALE H WEBSTER, 0000 UNDER TITLE 10, U.S.C., SECTION 624: PAUL D. CRAIN, 0000 MARK B WEINRICH, 0000 JAMES E. DALBERG JR., 0000 KEEGAN J WELCH, 0000 To be captain MARK W. DARRAH, 0000 SEAN T WELCH, 0000 ROBERT W. ARCHER, 0000 BRIAN W. DAUGHERTY, 0000 MICHAEL A WELSCH, 0000 EDWARD J. DELANEY, 0000 WILLIAM C WENNBERG, 0000 LEO O. FALARDEAU, 0000 KENNETH W. FREEMAN, 0000 DANIEL N. DIXON, 0000 NICHOLAS J WESSMAN, 0000 PATRICK J. DOUGHERTY, 0000 MARVIN T WHITE, 0000 WILLIAM G. GLENN, 0000 JOHN S. MIKELL JR., 0000 JONATHAN A. DOWELL, 0000 WAYLON G WHITE, 0000 VINCENT DROUILLARD, 0000 BRANDON L WHITFIELD, 0000 HOWARD P. MILLER, 0000 JIM O. ROMANO, 0000 MICHAEL R. DURKIN, 0000 JEREMY D WHITLOCK, 0000 JOHN W. DZIMINOWICZ, 0000 JON D WICKLUND, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT DAVID B. EMICH, 0000 JON T WIDMAN, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY DELL W. EPPERSON, 0000 BRIAN B WILCOX, 0000 UNDER TITLE 10, U.S.C., SECTION 624: KEVIN S. EYER, 0000 BRYAN D WILLARD, 0000 CRAIG S. FALLER, 0000 ANTONIO V WILLIAMS, 0000 To be captain DORICE S. FAVORITE, 0000 BRADLEY J WILLIAMS, 0000 MARK C. FEALLOCK, 0000 BRANDON B WILLIAMS, 0000 CHRISTOPHER L. ABBOTT, 0000 GREG A. EISMAN, 0000 JOHN A. FERRER, 0000 KENNETH R WILLIAMSON II, 0000 JOANNE M. FISH, 0000 SCOTT D WILLIAMSON, 0000 LISA E. FRAILEY, 0000 ROBERT E. KISER, 0000 BRIAN G. GAWNE, 0000 VERNON T WILLIS JR., 0000 PATRICK C. GILL, 0000 BRIAN J WILSON, 0000 MENDAL S. LIVEZEY, 0000 JAMES M. OLSON, 0000 STERLING G. GILLIAM JR., 0000 ERIC D WILSON, 0000 RAYMOND B. GINNETTI, 0000 CHRISTOPHER M WINCHELL, 0000 ERNEST P. PETZRICK, 0000 WILLIAM A., WRIGHT III, 0000 CURT W. GOLDACKER, 0000 NICHOLAS R WINEMAN, 0000 THOMAS D. GOODWIN, 0000 BRETT R WINSLOW, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT MARK L. GORENFLO, 0000 LISA M WNEK, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY PETER F. GRAUSE, 0000 NATHAN C WOELLHOF, 0000 UNDER TITLE 10, U.S.C., SECTION 624: JAMES GREGORSKI, 0000 MARK E WOODARD, 0000 To be captain WILLIAM T. GRIFFIN, 0000 JOHN W WORSHAM, 0000 PAUL A. GROSKLAGS, 0000 JOHN D WRAY, 0000 CHARLES S. ANDERSON, 0000 STEPHEN L. GUSE, 0000 GREGORY D WRIGHT, 0000 BARBARA A. BELL, 0000 PATRICK D. HALL, 0000 DAVID R WROBLEWSKI, 0000 RANDAL D. BLACK, 0000 WILLIAM C. HAMMILL JR., 0000 JACK Z WU, 0000 THOMAS P. GARRISON III, 0000 JEFFREY W. HANSEN, 0000 JOSEPH T YAMRICK, 0000 MATTHEW R. KERCHER, 0000 JOHN F. HARDISON, 0000 TAE J YOON, 0000 FRANCIS C. LUKENBILL, 0000 KENNETH J. HARVEY, 0000 RICKY J YUNG, 0000 RANDOLPH L. MAHR, 0000 RANDALL L. HAUKE, 0000 ANKIST ZADEYAN, 0000 RICK M. MCQUEEN, 0000 PAUL F. HEALY, 0000 DEREK M ZALENSKI, 0000 PAUL S. MORGAN, 0000 CHARLES M. HERON, 0000 RANDALL C ZILK, 0000 DAVID L. PRATER, 0000 ERIC R. HINGER, 0000 ANTHONY E ZINNI, 0000 PATRIC K. ROESCH, 0000 NICHOLAS H. HOLMAN IV, 0000 MATTHEW P ZUMMO, 0000 RICHARD W. WALTER II, 0000 ELDRIDGE HORD III, 0000 ROBERT B ZWAYER, 0000 PHILIP A. YATES, 0000 RONALD. HORTON, 0000 IN THE NAVY JEFFREY M. HUGHES, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT MARK R. HUNTER, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT TO THE GRADE INDICATED IN THE UNITED STATES NAVY KURT T. IRGENS, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY UNDER TITLE 10, U.S.C., SECTION 624: MICHAEL J. JACOBSEN, 0000 UNDER TITLE 10, U.S.C., SECTION 624: To be captain PAUL N. JAENICHEN, 0000 To be captain RUSSELL T. JANICKE, 0000 BRIAN K. ANTONIO, 0000 ALAN F. JOHNSON, 0000 REBECCA E. BRENTON, 0000 TIMOTHY ATKINSON, 0000 WILLIAM H. JOHNSON, 0000 MATTHEW S. BROWN, 0000 KRISTIAN P. BIGGS, 0000 WILLIAM H. JOHNSON, 0000 WARREN C., GRAHAM III, 0000 NORBERT H. DOERRY, 0000 EUGENE W. JONES, 0000 STEPHANIE A. DOUGLAS, 0000 ROBERT E. KAPCIO, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT WILLIAM J. GALINIS, 0000 ROBERT D. KELSO, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY PATRICK J. KEENAN JR., 0000 PAUL R. B. KENNEDY, 0000 UNDER TITLE 10, U.S.C., SECTION 624: DAVID H. KIEL, 0000 RONALD W. KENNEDY, 0000 To be captain STEPHEN D. LEWIA, 0000 ROBERT S. KERNO JR., 0000 ROGER D. MCGINNIS, 0000 CHRISTOPHER W. KILEY, 0000 KATHY A. BARAN, 0000 ANTHONY J. MULLARKY, 0000 STEPHEN C. KINGSTON, 0000 CAROL L. CHRISTMAN, 0000 JOHN W. R. POPE II, 0000 STEPHEN H. KIRBY, 0000 KAREN P. FONDREN, 0000 GERARD J. REINA, 0000 RUSSELL P. KNIGHT, 0000 LINDA H. MCMEANS, 0000 RICHARD E. REINKE III, 0000 MARK A. KOHART, 0000 RUTH A. MOHR, 0000 PAUL E. ROWE, 0000 WILLIAM J. KOVACH, 0000 MARGARET A. TAYLOR, 0000 DOUGLAS S. SCHROEDER, 0000 JONATHAN D. KURTZ, 0000 MICHAEL B. STANTON, 0000 CLAYTON B. KYKER, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT GREGORY R. THOMAS, 0000 ROBERT A. LALLY, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY THOMAS L. VANPETTEN, 0000 VINCENT L. LAMOLINARA, 0000 UNDER TITLE 10, U.S.C., SECTION 624: LARRY W. LASKY, 0000 To be captain THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT DAVID A. LAUSMAN, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY TIMOTHY J. LAWRENCE, 0000 MICHAEL D. DISANO, 0000 UNDER TITLE 10, U.S.C., SECTION 624: MARK M. LEARY, 0000 PATRICK J. FELTS, 0000 To be captain ROCKY R. LEE, 0000 AVGI IOANNIDIS, 0000 CARROLL F. LEFON JR., 0000 GEORGE F. KILIAN, 0000 EUGENE M. ABLER, 0000 ADAM S. LEVITT, 0000 VINCENT M. SCOTT, 0000 GLEN C. ACKERMANN, 0000 BRUCE H. LINDSEY, 0000 DAVID B. ADLER, 0000 JOHN D. LITTLE, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ROBERT J. ADRION, 0000 CHARLES E. LOCKETT, 0000 TO THE GRADE INDICATED IN THE UNITED STATES NAVY RALPH N. ALDERSON JR., 0000 JOHN L. LOCKLER, 0000 UNDER TITLE 10, U.S.C., SECTION 624: JEFFREY C. AMICK, 0000 JOHN L. LOVERING JR., 0000 To be captain JOHN C. AQUILINO, 0000 JAMES R. LOW, 0000 WILLIAM R. AULT, 0000 FRANK J. M. LOWERY, 0000 NANCY R. DILLARD, 0000 MICHAEL R. BARCLIFT, 0000 WALTER E. LUTHIGER, 0000 JAMES M. DONOVAN, 0000 KEITH R. BARTON, 0000 DANIEL P. MACK, 0000

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STEVEN A. MALLOY, 0000 PETER H. YOUNG, 0000 GREGORY GULLAHORN, 0000 DAVID P. MALONEY, 0000 MICHAEL E. ZAMESNIK, 0000 STEVEN J. HAGER, 0000 BRADLEY D. MARTIN, 0000 JEFFREY A. JONES, 0000 THOMAS L. MASCOLO, 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT PHILLIP J. LANDRIGAN, 0000 MARTIN N. MAY, 0000 TO THE GRADE INDICATED IN THE UNITED STATES MARK E. LINSKEY, 0000 GARRY R. MAYNOR, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: SEAN R. LOGAN, 0000 JOHN C. MCCABE II, 0000 To be captain LLYOD B. MOORE, 0000 KEVIN T. MCCARTHY, 0000 LINDA A. MURAKATA, 0000 JOSEPH S. MCCLAIN, 0000 JUDY L. MILLER, 0000 RICHARD C. OSMAN, 0000 MATTHEW J. MCCLOSKEY, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT WILLIAM A. PINCUS, 0000 JEFFREY E. MCLEAN, 0000 TO THE GRADE INDICATED IN THE UNITED STATES RAYMON D. PRIEWE, 0000 VICTORINO G. MERCADO, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: MICHAEL RIESBERG, 0000 CHARLES K. MERKEL JR., 0000 WALLACE C. WALKER, 0000 SCOTT D. MILLER, 0000 To be captain JAMES L. WHITE, 0000 ENRIQUE F. MIRANDA, 0000 WILLIAM MORALES, 0000 THOMAS W. HARRINGTON, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT DARREL M. MORBEN, 0000 TERRY L. PLETKOVICH, 0000 TO THE GRADE INDICATED IN THE UNITED STATES JOHN F. MURPHY, 0000 PAUL G. ROBICHAUD, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: JAMES P. MURRAY, 0000 PETER A. RUSTICO, 0000 CHARLES J. NEARY, 0000 MARK J. SCHREIBER, 0000 To be captain RICHARD B. NICKLAS, 0000 BRADLEY R. SICKLER, 0000 BRIAN K. NUTT, 0000 ROBERT L. YOUNG, 0000 NANCY J. BATES, 0000 MICHAEL G. BERRY, 0000 LEWIS C. NYGARD, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT KEVIN W. OAKES, 0000 PETER BUDI, 0000 TO THE GRADE INDICATED IN THE UNITED STATES ROBERT H. BYNG, 0000 VICTOR R. OLIVAREZ, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: DENNIS J. OMEARA, 0000 JEFFREY B. CUNNINGHAM, 0000 GERARD OREGAN, 0000 To be captain LAWRENCE E. FOUTS, 0000 ALAN OSHIRAK, 0000 FREDRICK M. HAUCK, 0000 MATTHEW O. FOLEY III, 0000 DOUGLAS E. OTTE, 0000 CHARLES A. HENKEL, 0000 KAREN D. HILL, 0000 BURT T. PALMER, 0000 KENNETH C. HILL, 0000 CAROL M. LYNCH, 0000 ROBERT P. PAPADAKIS, 0000 CALVIN L. HOWARD, 0000 EDWARD S. MALLOW, 0000 KIM A. PARKER, 0000 STEPHEN D. HUGHES, 0000 GARY W. MCCOWN, 0000 MICHAEL S. PAUL, 0000 JAMES L. JOHNSON, 0000 RICHARD V. POIRIER, 0000 FREDRICK D. J. PAWLOWSKI, 0000 RICHARD R. LANCASTER, 0000 ROBERT M. ROMAIN, 0000 JEFFREY R. PENFIELD, 0000 GORDON R. LIVINGSTON, 0000 AARON SANTAANNA, 0000 DAVID R. PINE, 0000 MICHAEL H. MAERTZIG, 0000 TIMOTHY J. SCHOEPPLER, 0000 RICHARD J. POSTERA, 0000 MICHAEL S. MCGRATH, 0000 PIETER G. STRASSER, 0000 CRAIG D. POWELL, 0000 JOHN B. MOORE, 0000 FRANK G. USSEGLIO II, 0000 JEFFREY T. POWERS, 0000 PAUL M. NEMECHEK, 0000 STEPHEN F. NOWAK, 0000 JEROME R. PROVENCHER JR., 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT KIM D. POOLER, 0000 RAOUL A. RALL, 0000 TO THE GRADE INDICATED IN THE UNITED STATES SHEILA B. RAUSCH, 0000 CHRISTOPHER S. RATLIFF, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: THOMAS L. REESE, 0000 ROBERT G. REYNOLDS, 0000 WARREN E. RHOADES III, 0000 To be captain PETER P. SCHLENK JR., 0000 RALPH H. RICARDO JR., 0000 LINDA J. SCHLESINGER, 0000 CRAIG E. BUNDY, 0000 ANN B. SCHOWALTER, 0000 CHARLES A. RICHARD, 0000 WILLIAM J. CREED, 0000 RANDALL G. RICHARDS, 0000 RAYMOND E. SORENSEN, 0000 JAMES J. DIBELKA JR., 0000 JESSE D. THOMAS, 0000 SAMUEL B. RICHARDSON, 0000 MELVIN L. FORD III, 0000 MARK R. RIOS, 0000 MICHAEL P. UVA, 0000 STEPHEN R. LEE, 0000 RICHARD A. WEBSTER, 0000 CLAUDIA M. A. RISNER, 0000 JOHN M. LEWIS, 0000 HARRY M. ROBINSON, 0000 RICHARD R. WHITE, 0000 GARY D. REINHARDT, 0000 LLOYD G. WINGFIELD, 0000 RICHARD J. RUEHLIN, 0000 CHARLES C. RICHTER JR., 0000 DAVID G. RUFF, 0000 MARK E. RONGONE, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT PETER B. RUSH, 0000 MICHAEL L. SCHOELCH, 0000 TO THE GRADE INDICATED IN THE UNITED STATES ROBIN L. RUSSELL, 0000 DAVID M. TEETER, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: GORDON B. RUTHERFORD, 0000 RICHARD L. TRAUGH, 0000 GARY SANDALA, 0000 CLIFF P. WATKINS, 0000 To be captain MATTHEW T. SCASSERO, 0000 KEVIN D. SCOTT, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ANNEMARIE ADAMOWICZ, 0000 GLEN R. SEARS II, 0000 TO THE GRADE INDICATED IN THE UNITED STATES KANDACE D. ADAMS, 0000 JAMES D. SETTELE, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: CORAL T. ANDREWS, 0000 MATTHEW M. SHARPE, 0000 ANN R. BALLASSIDNEY, 0000 WILLIAM A. SHEEHAN, 0000 To be captain VIRGINIA R. BAXTER, 0000 KEVIN B. SHERMAN, 0000 WILLIAM M. ARBAUGH, 0000 MICHAEL S. BEIMER, 0000 PETER S. SHERMAN, 0000 LEO C. BAKALARSKI, 0000 ANNE W. BLOOM, 0000 DONALD R. J. SHUNKWILER, 0000 GARY L. BURGUND, 0000 PATRICIA A. BURKES, 0000 RICHARD L. SIMON, 0000 GARY E. CHEELY, 0000 MARY L. CALISE, 0000 DENNIS J. SINNETT, 0000 GROVER S. CROFT, 0000 SERENA A. CHETTA, 0000 TAYLOR W. SKARDON, 0000 JAMES R. JOHNSON, 0000 LISA C. CRAFT, 0000 JOHN W. SMITH JR., 0000 PAUL G. LYSKO, 0000 GAMBLE P. E. CRAWFORD, 0000 PAUL C. SMITH, 0000 SCOTT A. MARSH, 0000 SUSAN B. DAVIS, 0000 RUSSELL H. SMITH, 0000 JEFFREY R. MCCUNE, 0000 LINDA M. DIETSCHE, 0000 MURRAY R. SNYDER, 0000 STEPHEN J. MILLER, 0000 DIANE L. FLETCHER, 0000 JOSEPH D. SPITZ, 0000 JAMES H. SCHWEIKHARD, 0000 KATHARINE B. FOSS, 0000 WILLIAM C. STACIA JR., 0000 DAVID E. WALSTON, 0000 NANCY H. GILMAN, 0000 LOWELL S. STANTON, 0000 RICHARD E. WOLFE, 0000 CAROLYN J. GREEN, 0000 SCOTT A. STEARNEY, 0000 NORMA J. GRENFELL, 0000 MICHAEL T. STEED, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT KAREN N. GRUBER, 0000 DAVID F. STEINDL, 0000 TO THE GRADE INDICATED IN THE UNITED STATES LARRY J. HALEY, 0000 CURTIS R. STEVENS, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: CATHY A. HARRISON, 0000 KEVIN M. SWEENEY, 0000 To be captain SUSAN B. HOPKINSON, 0000 CHARLES C. SWICKER, 0000 VIRGINIA N. KELLER, 0000 THOMAS A. TACK, 0000 DANIEL M. BLESKEY, 0000 NANCY W. KILEY, 0000 CHARLES E. TAMBLYN, 0000 DOUGLAS L. DARIANO, 0000 ANN N. KIRBY, 0000 DAVID C. TAYLOR, 0000 RICHARD D. FRITZLEY, 0000 BETTY L. KOLE, 0000 GEORGE D. TAYLOR JR., 0000 BRAD A. HASTINGS, 0000 KAREN M. KREUTZBERG, 0000 EVIN H. THOMPSON, 0000 THOMAS J. KARNOWSKI, 0000 NADYNE D. KRIENKE, 0000 JOSEPH E. TOFALO, 0000 NICHOLAS F. KOCH, 0000 SUSANNA K. LINDSEY, 0000 RONALD P. TOWNSEND, 0000 PAUL J. MITCHELL, 0000 MARGUERITE T. LITTLETON, 0000 MICHAEL W. ULLRICH, 0000 JEFFREY R. PHILLIPS, 0000 WAYNE T. LOBELL, 0000 RICHARD E. VANDENHEUVEL, 0000 JOHN D. PRIEN III, 0000 POLLY H. LONG, 0000 PERRY F. VANHOOSER II, 0000 LAWRENCE E. RUGGIERO, 0000 MARY J. LYONS, 0000 DOUGLAS J. VENLET, 0000 MICHAEL J. SHERBAK II, 0000 EILEEN M. MALATINO, 0000 JAMES S. WAGNER, 0000 BRADLEY R. SPANGLER, 0000 JANET L. MARAN, 0000 JAMES G. WALLACE, 0000 STEPHEN F. TYAHLA, 0000 MARTHA M. MITCHELL, 0000 GORDON T. WALTON, 0000 WILLIAM E. VAUGHAN, 0000 JOSEPH P. MOORE, 0000 RALPH C. WARD JR., 0000 MARILYN W. MORREY, 0000 VICTOR G. WARRINER JR., 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT MARY J. NELSON, 0000 TIMOTHY L. WATKINS, 0000 TO THE GRADE INDICATED IN THE UNITED STATES GARY G. NITZ, 0000 RICHARD W. WATSON, 0000 NAVAL RESERVE UNDER TITLE 10, U.S.C., SECTION 12203: SHELA L. NORMAN, 0000 PAUL S. WEBB, 0000 To be captain HARRIET E. PALMERWILLIS, 0000 DANIEL L. WEED, 0000 LEE A. B. POWELL, 0000 DAVID G. WEGMANN, 0000 BARTLEY G. CILENTO JR., 0000 SALLY M. RAPPOLD, 0000 JAMES C. WHITAKER, 0000 BRIAN C. CUSICK, 0000 BELINDA J. RUTLEDGE, 0000 GREGORY J. WITTMAN, 0000 JEFFREY H. DAVIS, 0000 SUSAN C. SAINTONGE, 0000 GEORGE G. WOMACK, 0000 JOHN E. DRAKE, 0000 KATHLEEN M. STAYMAN, 0000 MARK E. WRALSTAD, 0000 FRANCIS J. DUFRAYNE, 0000 NOLA K. STRICKLAND, 0000 ROBERT P. WYLLY, 0000 WESLEY W. EMMONS, 0000 GAIL M. TUOHIG, 0000 MARION D. YANCEY, 0000 PETER G. GERBINO II, 0000 JOAN D. WENTZ, 0000 MARCUS B. YONEHIRO, 0000 MICHAEL J. GIORDANO, 0000 MARY A. WHITE, 0000

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