S6018 CONGRESSIONAL RECORD — SENATE June 10, 1998 who works in the Chrysler or GM plant I realize that at this point we are Mr. GRAMM. Madam President, I in Delaware and whose spouse is a constrained by financial limitations think somewhere I heard the old say- school teacher would have too high an and other priorities, and I compliment ing, ‘‘No good deed goes unpunished.’’ income to qualify for marriage penalty my colleagues for moving as far as In trying to see if we might find some relief. That doesn’t seem fair. I would they have with this bill. But I want all consensus on this issue, I tried to write have liked to see us give relief from the of my colleagues to agree with me that our marriage penalty repeal amend- marriage penalty to many more Ameri- this should be seen as only the begin- ment in such a way as to limit the cans. Frankly, I would like to see us ning. There is no justification for a amount of resources that it took from get rid of the marriage penalty alto- married couple to be penalized just be- the underlying bill. gether. cause they are married. I did it recognizing that the underly- The second major component of tax Mr. President, though it is not per- ing bill is as full of fat as any bill could relief in this amendment is in the area fect, and while it does not go as far as possibly be. It is a bill that provides of health care. The amendment pro- I would like, I intend to support this funding for a Native American vides self-employed individuals next amendment. It sends the right mes- antismoking campaign that will spend year with a 100 percent deduction for sage. $18,615.55 per Native American who will their health insurance. This is long It does provide partial relief. And it be served. It is a bill that pays trial over-due. It will help farmers, small is a step in the right direction. I en- lawyers $92,000 an hour. It is a bill that business people, and others who buy courage my colleagues to support this pays tobacco farmers $23,000 an acre, their own health insurance. Because of effort. and they can keep the land and go on this amendment, 3 million taxpayers Mr. MURKOWSKI addressed the farming tobacco. and their families will have more af- Chair. With all of these gross expenditures, fordable health care, and you cannot The PRESIDING OFFICER (Ms. COL- our colleagues say that if we take more overstate how important this is. LINS). The Senator from Alaska is rec- than a third of the money we are rais- This is a good first step. But I want ognized. ing in taxes—which they say they are to be clear that I do not consider it to f not increasing the tax to raise money— be everything we must do. There are 18 but if we take any more than a third of million other Americans who lack VISIT TO THE SENATE BY ANSON it and give it back, then somehow the health insurance, some are unem- CHAN, CHIEF SECRETARY OF bill is going to collapse. ployed, others are elderly, and many THE HONG KONG SPECIAL AD- Then I try to adjust the amendment have jobs. Simply put, I would like to MINISTRATIVE REGION to keep it within those constraints, see these individuals receive an above- Mr. MURKOWSKI. Madam President, and our dear colleague from Massachu- the-line deduction for the cost of their it gives me a great deal of pleasure to setts accuses me of taking money from health care. This is something I have introduce to this body, the U.S. Sen- Social Security. And it goes on and on worked on for some time. ate, Mrs. Anson Chan. Anson Chan is and on. ‘‘No good deed goes When the Finance Committee the Chief Secretary of the Hong Kong unpunished.’’ marked up the tobacco legislation I Special Administrative Region, known I have the ability to modify my placed before the committee a two-part to many Senators in this body. amendment. I want my colleagues to proposal in the area of health care. Anson Chan is the head of Hong understand that if we don’t work out The first part was an immediate in- Kong’s 190,000-strong Civil Service. She something on this amendment pretty crease to 100 percent deductibility for was appointed to the position back in soon, I am going to modify my amend- health insurance for the self-employed. 1993 by then-Governor Chris Patten and ment, and I am going to take every The second part provided the same ben- has continued to serve in this capacity penny of this money out of this larded efit to the other 18 million Americans under C.H. Tung, the Chief Executive bill. So I can solve all of these prob- who need health insurance. This at- of the Hong Kong Special Administra- lems. I tried to help somebody. I tried tempt was a natural follow-on to my tive Region. to work out a consensus, and now we successful efforts in 1995 to raise the f are not able to do it. But I can fix that deductible percentage from 25 to 30 per- problem. I can fix the problem by tak- cent and to make it permanent. Unfor- RECESS ing the money out of this bill, and I am tunately, this time my tax cut pro- Mr. MURKOWSKI. Madam President, prepared to do that. I am not going to posal was not approved by the Finance I ask unanimous consent the Senate do it right now. I am going to wait and Committee. stand in recess for 5 minutes, so col- see if we can work something out. But I intended to offer the same tax cut leagues may greet Anson Chan, our I am prepared to do it. I have a modi- amendment on the floor, and I was dear friend. fication. I have a right to modify my pleased that several members—Repub- There being no objection, the Senate, amendment, and I will modify my licans and Democrats—agreed to sup- at 3:10 p.m., recessed until 3:14 p.m.; amendment at some point if we don’t port it. whereupon, the Senate reassembled work something out. This proposal was also supported by when called to order by the Presiding Madam President, I want to address a farmers and small business, and I am Officer (Ms. COLLINS). number of issues that our colleague pleased that it is reflected in the Mr. MURKOWSKI. I thank the Chair from Massachusetts raised. amendment before us now. Though, for recognizing Anson Chan. I thank Our colleague from Massachusetts again, I want to go further. This is a my colleagues who visited with her, as says, ‘‘Well, I have a marriage penalty good start, but I hope that in the fu- well as the pages. correction device, but mine doesn’t ture we revisit this with a mind to I suggest the absence of a quorum. cost as much and gives more relief.’’ making health insurance more afford- The PRESIDING OFFICER. The So the question is, How is that pos- able for millions more of American clerk will call the roll. sible? Well, the answer is that it gives workers. The bill clerk proceeded to call the no relief to one particular kind of fam- It is the same with the marriage pen- roll. ily. That is a family where one of the alty. It is egregious that married cou- Mr. GRAMM. Madam President, I ask parents decides to stay at home and ples are penalized by our tax code. I be- unanimous consent that the order for work within the home—one of the lieve this sends the wrong message in the quorum call be rescinded. hardest and most difficult jobs in more ways than one, and it must be ad- The PRESIDING OFFICER. Without America and one of the most important dressed. We have attempted to do this objection, it is so ordered. jobs in America. in the past. For example, in 1995, in the f We have not seen their amendment, Balanced Budget Act, Congress ap- but the way our Democrat colleagues proved a proposal to phase out the NATIONAL TOBACCO POLICY AND could give a marriage penalty for so marriage penalty in the standard de- YOUTH SMOKING REDUCTION ACT much less money is that it is a mar- duction. Our legislation was vetoed by The Senate continued with the con- riage penalty correction that you get President Clinton. sideration of the bill. only if both parents work outside the June 10, 1998 CONGRESSIONAL RECORD — SENATE S6019 home. That is not the way we have percent of their income. Then they got deduction. We want to put it above the done it. We have not done it that way their standard deduction, and that line so it applies to the earned-income because I do not want the Government shielded 10 percent of their income, for tax credit. And our Democrat col- to be making the decision as to wheth- a total of 75.3 percent. leagues say, ‘‘No, we don’t want to do er a parent works outside the home or So in 1950, the cold war had heated it that way.’’ works inside the home. up, we were going into Korea, defense Let me tell you what they want to Let me say, it is a tough decision for spending was rising, but we still shield- do. No. 1, they want to say that if a people to make. Some people make it ed 75.3 percent of the income of the av- family chooses to have one of the par- based on economics; some people make erage family of four in America from ents stay at home with their children, it based on their careers. And I think any income taxes because of the per- that that parent is worthless and families need to make it, not the Gov- sonal exemptions and the standard de- therefore they should get no correction ernment. My mama, as I have said ear- duction. for the marriage penalty at all. lier, worked all my life because she had The personal exemption was $500 in What Senator DOMENICI, Senator to. My wife has worked all my chil- 1950. To be the same level today, the ROTH, and I are trying to do is to not dren’s lives because she chose to. She personal exemption would have to be tilt the Tax Code against stay-at-home had a career. She wanted to do it. But $5,000. But it is $2,700. So today, the parents. the point is, the Tax Code should not same family of four, making the aver- I am not trying to make a judgment. discriminate against parents who age income in the country in 1996, has In the two families I have had the choose to make an economic sacrifice only 32.8 percent of their income privilege to live in my parents’; and to have one of the parents stay home shielded. Every bit of the additional in- now my own family—both parents have and raise the children. come is being subject to income taxes. worked. I am not trying to stand in So the magic in this Democrat alter- So what happened between 1950 and judgment on whether both parents native, if such an alternative exists, is 1998? What happened between 1950 and should work or they should not work. they can do it for less but the way they 1998 is that the real value of the stand- Families should do what works for do it for less is, they say if you have a ard deduction and the personal exemp- them. But we should not have a Tax stay-at-home parent, you get no relief tion declined dramatically because it Code that penalizes people who give up from the marriage penalty. did not keep pace with inflation. So income in order to have one parent They are going to complicate this whereas in 1950, 75.3 percent of the in- stay at home with the children. That is issue. But, fortunately, I understand come of the average working family in the proposal that the Democrats are this issue. So let me try to straighten America was totally shielded from in- making. The second proposal they are making it all out before they waste all the time come taxes, now the average family in is, do not give any of this to moderate- trying to complicate it, because I can America, family of four, making the income people. I did not hear anything answer it and will save everybody time. average income, has only 32.8 percent in their proposal about making it a re- There is something called a marriage of their income shielded from taxes. bonus. If there has ever been a totally So since 1950, what has happened? bate to people who are getting the fraudulent concept, it is the marriage Rich people paid a lot of taxes in 1950, earned-income tax credit. Let me tell you why that is so impor- bonus. This thing that we call in the and rich people pay a lot of taxes tant. You have a lady who is washing Tax Code a marriage bonus is, if you today. Poor people paid no income dishes and you have a man who is a taxes in 1950, and they do not pay any marry—and let me just speak from the janitor in a school. They might be income taxes today. What happened to point of view of a male—if you marry a about as well off on welfare as they are the tax burden between 1950 and today? lady and she comes and lives with you working, but they are proud, they are It almost doubled. Who paid it? Middle- in marriage, you get to take her per- ambitious, they want to be self-reliant. sonal exemption and you also get an class families. Today, the number that So every morning they set the alarm adjustment to your standard deduc- just came out showed that 20.4 percent for 6 o’clock. When the alarm clock tion. of all income earned by all Americans goes off, their feet hit the ground. They So I am sure that people will laugh is taken by the Federal Government, get up, they get dressed, they go to at this, but since our colleagues are and when you take State and local work. They often work more than one going to go to great lengths to talk taxes, the tax burden today is at the job. They meet and fall in love. It looks about it, let me just destroy it, and we highest level in the peacetime history like their dream has come true because will not waste our time. of the United States of America. No together they can have more. Something is called a marriage bonus American has ever lived with a peace- But under the existing Tax Code each when—let us say you have John and time tax burden higher than today. of them making very low income quali- Josephine who fall in love. And Jose- Even though we won the cold war, tore fies them for an earned-income tax phine is just getting out of college. Her down the Berlin Wall, cut defense by 50 credit. They lose the earned-income father and mother have been taking a percent, we still have the highest tax tax credit if they get married. So they personal exemption for Josephine. She burden in American peacetime history face a huge penalty, often more than marries John. And John is already because of passing bills like the one $1,400 a year if they get married. working. Josephine is getting ready to that is before us today. In our amendment, we apply the cor- go into the labor market. They went to What is the amendment that I have rection to this perversion in the Tax the graduation and she got her di- offered with Senator DOMENICI and Sen- Code called the marriage penalty so ploma. Then they walked down the ator ROTH trying to do? What it is try- that even people that are getting the aisle and said, ‘‘I do.’’ And sure enough, ing to do is address the problem, shown earned-income tax credit can deduct John gets to declare $2,700 on his tax on this chart, where working families this $3,300 before they gauge their eligi- return for her personal exemption. And end up paying more and more of their bility. Why? First of all, we are for John gets $2,850 added to his standard income. When you have a working love. Secondly, if a lady washing dishes deduction. But does anybody believe spouse today, that working spouse is and a man who is a janitor in a school that John can feed, clothe, and house paying 60 percent of their income in fall in love, we want them to get mar- Josephine for $5,550? Some bonus. That taxes that did not exist in 1950. ried. What society would want to dis- is no bonus. What Senator DOMENICI, Senator courage that from happening? They Let me show you what has happened. ROTH, and I are trying to do is to cor- may get married, have a child, their In 1950, the Tax Code of America was rect that. We are trying to take a first child may become President of the such that for the average family of step to correct this marriage penalty, United States. four—husband, wife, two children—75.3 which is basically a penalty that falls The alternative being offered is so percent of their income was totally on 31 million Americans where they ac- much cheaper. One of the reasons it is shielded from any Federal income tax. tually pay an average of $1,400 a year cheaper is that it doesn’t apply to This meant that by the time they took more because they are married than these very low-income people. We their personal exemptions—and they they would pay if they were single. We thought it should apply to very low-in- got four of them—that shield was 65.3 want to give them an additional $3,300 come people. The reason is 34 percent S6020 CONGRESSIONAL RECORD — SENATE June 10, 1998 of the money they are taking out of employed. I tried to do it in such a way him and I offered him a compromise the pockets of working Americans as to protect some of their huge trust which includes the capacity to raise through this tobacco tax come from funds. Now they say, no; you can’t do the level of benefit to the spouse— people that make $15,000 a year or less. that. So at some point, if we don’t working mom or pop—who stays home They should not be excluded from this work this out, I am going to modify my with kids. provision. amendment and I am going to take all But what the Senator is ignoring also To sum up the points I wanted to the money out of the bills trust fund. is that under the marriage penalty, so- make, I want the marriage penalty to The truth is we should be giving back called, the mother who stays home, or be corrected. I want this tax deduction about 80 percent of this money in tax father who stays home today and isn’t to apply to families, whether they both cuts. We should be using the other 20 working and that he wants to reward, work outside the home or whether they percent—10 percent of it on anti- is, in fact, already rewarded because decide they will sacrifice, take less in- smoking, 10 percent of it on antidrugs, the structure of tax is such that with a come, and one of them will stay home and that ought to be it. single earner and one parent staying and raise their children. I am not try- In any case, if we are going to debate home, they get a marriage bonus. ing to make a judgment as to whether this issue, I think our colleagues are So we have a tax structure that al- that is better or worse. I think it de- going to be a long time explaining why, ready rewards the very person the Sen- pends on the people and what they if mom or dad decides to stay at home, ator from Texas is talking about. In want. But I don’t think the Tax Code they are discriminated against under addition to that, I suggested to him should treat people differently based on this Tax Code. I don’t think people are that we ought to be able to work out that decision. Our colleagues who sup- going to be in favor of that and I hope some way to augment that a little bit. posedly are offering an alternative something can be worked out. I think that is reasonable. So let’s not think it should. Our colleagues say, Finally, at the end of the budget get into a notion that somehow people look, if you don’t work outside the cycle in the year 2007, we have a want to be more protective of mom and home, you don’t work. If you don’t choice: We can repeal these marriage pop who want to stay home with the work outside the home, you are not penalty provisions and take all of it kids. This debate is about whether or due any correction for this penalty. out of this trust fund, or we can set a not we are going to be able to have Then as the final absurdity they say, portion of it out of this trust fund. I enough money to do the things this to- after all, John, by marrying Josephine, can do it either way. bacco bill must do, which is to reduce he already got $5,550 tax deduction by I am beginning to be convinced, as the number of kids smoking. getting her personal exemption and my dear colleague from Arizona has You never hear the Senator from part of her standard deduction. But been convinced throughout this debate, Texas talk about how we are going to who can live on $5,550? What kind of that no good deed goes unpunished, save lives in America. We hear him bonus is that? It just shows you the ab- even when you try to do what you be- talking about saving taxes, but not surd language we have developed to de- lieve is a good work. If you try to do saving lives. We never hear him talk fend a provision in the Tax Code which something good and you try to be rea- about the 400,000 people a year who die is absolutely indefensible. sonable and you try to make things because they smoke. You also don’t I want, in this amendment, to give at work, something is going to happen to hear him refute the tobacco company’s least a third of the money we are tak- punish you for it. I think that is a own memoranda, which talks about ing from working Americans back to shame for the process. how they know that when the price them. Our colleagues try to get us to I wanted my colleagues to be aware, goes up, the number of people who buy focus on these terrible tobacco compa- when we are talking about giving a their cigarettes goes down. That is to- nies and forget about the fact that to- $3,300 tax deduction for working fami- bacco company fact; it is not made up bacco companies are paying no taxes at lies, that you have to wonder why is on the floor of the Senate. all under this bill. In fact, this bill that reasonable? Well, in 1950, 75.3 per- So let’s begin to deal with the reality makes it illegal for the tobacco compa- cent of their income was totally shield- here. The reality is that if you don’t nies not to pass through the tax to con- ed from income taxes because of the have the ability to affect the behavior sumers. Who is paying this tax? A ma- standard deduction and the dependent of our kids in this country, we are not jority, 59.1 percent of this tax is being exemption. Because of inflation since doing the job on this legislation. And paid by families that make less than that time and because the personal ex- while it is all well and good to want to $30,000 a year. So I have made the mod- emption has not been raised to equal restore some money back to people to est proposal to give a third of the inflation, now only 32.8 percent of their take care of the marriage penalty—and money back to moderate-income fami- income is shielded from taxes. I am for that—we want to do that in a lies so that those who were in favor of I am not going to apologize for trying way that is reasonable within the other the bill can say, well, we raised tobacco to let working families keep more of obligations of this legislation. That is prices. Hopefully, that will discourage what they earn. Nor am I going to what we are fighting for here—to main- children from smoking. Hopefully, it apologize for having a provision that tain common sense in this. will discourage other people from says to parents you can get this tax de- I am happy to work out some kind of smoking. Just don’t impoverish blue- duction if both of you work or you can compromise with the Senator. I think collar workers in America who smoke get it if one of you works and you have it is important to understand that has and who, paradoxically, are the victims to make the decision about what works to be fair. If we take 80 percent of this of this whole process. for you and your family. I don’t think bill in order to rebate people who are The incredible, unthinkable, vir- doing it any other way is going to be already getting benefits, we will have tually unspeakable truth about this successful. I hope we can work this out. departed from all common sense and bill is it doesn’t penalize the tobacco But it may be preordained somewhere fairness. companies. It penalizes the victims. We at a higher level than we are and I yield the floor and suggest the ab- tell everybody you have been victim- maybe for some good purpose that this sence of a quorum. ized by the tobacco companies. They can never work out and this might The PRESIDING OFFICER. The knew you would get addicted to nico- never be done. clerk will call the roll. tine, and they conspired to get you to I yield the floor. The assistant legislative clerk pro- smoke. Then this bill says we are going The PRESIDING OFFICER. The Sen- ceeded to call the roll. to do something about it; we are going ator from Massachusetts is recognized. Mr. DORGAN. Madam President, I to tax you, not the tobacco companies. Mr. KERRY. Mr. President, I will ask unanimous consent that the order Always seeking to do good, I had this speak for a moment and then spend a for the quorum call be rescinded. modest amendment to take a third of moment to visit with the Senator from The PRESIDING OFFICER. Without the money and give it back to mod- Arizona. objection, it is so ordered. erate-income families in repealing the Let me correct one thing the Senator Mr. DORGAN. Madam President, I marriage penalty and making health from Texas said. The Senator knows am interested to see that at a time insurance tax deductible for the self- just a little while ago I was talking to when the tobacco bill is on the floor of June 10, 1998 CONGRESSIONAL RECORD — SENATE S6021 the Senate, we are debating the mar- the tobacco companies that they didn’t it is that 16-year-olds are using their riage tax penalty. It is unique, I sup- want to disclose but were required to cigarettes. pose, that in the U.S. Senate one does disclose. This information showed ex- Philip Morris, 1974: ‘‘We are not sure not have to talk about the subject that actly what their strategies were in re- that anything can be done to halt a is on the Senate floor at that time. We cent decades to try to addict America’s major exodus if one gets going among experienced, earlier in this session, the children to tobacco. the young.’’ majority leader bringing to the floor a Almost no one reaches adult age and ‘‘This group’’—now speaking to the piece of legislation which created a discovers that what we really wanted young, according to Philip Morris— parliamentary situation where no one to do and have failed to do is start ‘‘follows the crowd, and we don’t pre- could offer any other amendments ex- smoking. Does anybody know a tend to know what gets them going cept those he would prefer to have of- thoughtful adult who scratches their from one thing or another. Certainly fered because he was afraid someone on head and says, ‘‘Gosh, what have I Philip Morris should continue efforts this side of the political aisle would missed in life? I know what it is. I need for Marlboro in the youth market.’’ offer an amendment not related to the to start smoking. That is what I am Is this a company looking at selling subject. So we had a legislative logjam missing. That is what will enrich my cigarettes to kids? I think so. on a number of pieces of legislation. life.’’ Did you ever hear of anybody In 1974, R.J. Reynolds, they write, That was his right, and I complained doing that? I don’t think so. The only speaking of kids: ‘‘They represent to- about it at the time. And at the same way you get new smokers is to get kids morrow’s cigarette business. As this 14- time, the majority leader was com- to smoke. to 24-age group matures, they will ac- plaining that somebody might offer an On Friday, I described for my col- count for a key share of the total ciga- amendment that had nothing to do leagues some of the data and the rette volume for at least the next 25 with the bill on the floor of the Senate. memoranda that were in the files of years.’’ Well, here we are. We have a tobacco the tobacco companies. I want to read This is a company talking about the bill on the floor of the Senate and what some of them again, because I want us 14-year-old smoker. have we been talking about now for a to be talking about the subject of to- In 1975, a researcher for Philip Morris number of days? The marriage tax pen- bacco on the floor of the Senate. writes: ‘‘Marlboro’s phenomenal alty. We had a tax bill on the floor of But why do we want to do something growth rate in the past has been attrib- the Senate some long while ago and we to tell the tobacco industry they can’t utable in large part to our high market debated that. But now, on the tobacco addict America’s children to nicotine penetration among young smokers 15 bill, we are talking about the marriage when it is legal to smoke, and it will to 19 years old. My own data, which in- tax penalty. always be legal to smoke. It is an adult cludes younger teenagers, even shows I don’t think the Senator from Texas choice. But it is not legal, and ought higher Marlboro market penetration will get anybody to swallow the bait not be legal nor morally defensible for among 15- to 17-year-olds.’’ here that a marriage tax penalty is jus- anyone to say we are going to try to Does anybody who reads believe after tifiable. The Congress has worked on addict 15-year-old kids, or 13-year-old reading this that the tobacco compa- the marriage tax penalty attempting kids, to our cigarettes in the name of nies weren’t vitally interested in sell- to fix it, to reduce it, to abolish it, and profit. ing cigarettes to these kids? Of course to otherwise change it for a long, long So let me proceed to describe some of they were. time. Long after this debate is over, the documents, that we have unearthed In 1975, RJR-Nabisco talks about in- there will be discussion about this so- in various court cases and elsewhere, creasing penetration among the 14- to called marriage tax penalty. Should it that describe what the tobacco indus- 24-year-olds: ‘‘Evidence is now avail- be abolished, should it be fixed? Of try has done. At the end of that, I will able to indicate the 14- to 18-year-old course, it should. Easier said than ask my colleagues if they think this group is an increasing segment of the done, but we ought to do it. behavior is defensible. If you don’t, smoking population. RJR Tobacco But we are now on a tobacco bill. I then we ought to pass this kind of leg- must soon establish a successful new bring this discussion back to the rea- islation and stop talking about other brand in this market if our position in son that we have a bill on the floor of subjects. the industry is to be maintained.’’ the Senate dealing with tobacco. I In 1972, Brown & Williamson, a to- In 1976, that is RJR saying about 14- want to read again, for some of my col- bacco company: ‘‘It is a well known to 18-year-olds that we have got to get leagues and those who are interested, fact that teenagers like sweet prod- a new cigarette out there to attract what persuades those of us in the Sen- ucts. Honey might be considered.’’ these people if we are going to retain ate who support this tobacco legisla- In 1972, they are talking about adding our position. tion and think this legislation is nec- honey to cigarettes. Why? Because kids In 1978, the Lorillard Cigarette Com- essary. like sweet products. Does that sound pany said the following: ‘‘The base of I was on the Senate Commerce Com- like a company that is trying to addict our business is the high school stu- mittee when we passed the legislation kids to cigarettes? It does to me. dent.’’ out of the committee. I voted for it, In 1973, RJR, a tobacco company, ‘‘The base of our business is the high and I supported it. Senator MCCAIN was says: ‘‘Comic strip type of copy might school student!’’ This from a tobacco the principal author of the bill, and get a much higher readership among company. Senator CONRAD, my colleague from younger people than another type of In 1979: ‘‘Marlboro dominates in the North Dakota, has also written a piece copy.’’ 17 and younger category capturing over of legislation which found its way, or They are talking about advertising. 50 percent of the market,’’ Philip Mor- at least in large part, into the McCain Does this sound like a cigarette com- ris writes proudly. legislation. I compliment both of them, pany that is interested in trying to get In the name of profit, they say: Our and others, including the Senator from kids to smoke? It does to me. cigarettes dominated the 17-year and Massachusetts, and a number of others In 1973, Brown & Williamson: younger category. We capture over 50 who have worked hard on this legisla- ‘‘Kool’’— percent of the market. tion. This is a quote. The cigarette brand They make it sound like a county But why tobacco legislation? Because Kool: fair, don’t they? A blue ribbon—a fat many of us believe that it is inappro- Kool has shown little or no growth in the steer gets a blue ribbon. We were able priate in this country to allow the to- share of the users in the 26 and up age group. to get 15-, 16-, and 17-year-old kids to bacco industry to continue to try to Growth is from 16- to 25-year-olds. At the smoke. We win. addict America’s children to nicotine. present rate, a smoker in the 16- to 25-year- Now tell me that this industry Some say, ‘‘Well, gee, that is not what old age group will soon be three times as im- doesn’t target young kids to smoke. has been happening.’’ Of course it has portant to Kool as a prospect in any other Marlboro Red, a derivative of Marl- been happening. Several court cases broad age category. boro, I guess—I have not seen a Marl- have now unearthed the memoranda This is a company that is talking boro Red cigarette. But a Marlboro Red and the information from the bowels of about 16-year-olds and how attractive in 1981, a Philip Morris researcher S6022 CONGRESSIONAL RECORD — SENATE June 10, 1998 writes: ‘‘The overwhelming majority of cline, just as a population which does not factor to causing heart disease and smokers first begin to smoke while in give birth will eventually dwindle. cancer and more. Counteradvertising their teens. At least part of the success Let me read again what the tobacco will be very helpful, it seems to me, to of our Marlboro Red during its most industry understood. warn kids away from cigarettes. rapid growth period was because it be- No more than 5 percent of the smokers Additionally, the resources will be came the brand of choice among teen- start after the age 24. used to invest in the National Insti- agers who then stuck with it.’’ If you don’t get them when they are tutes of Health where research occurs I think maybe ‘‘stuck with it’’ is a kids, you are not likely to get them. If every single day to try to respond to misnomer. I think maybe ‘‘who were you don’t addict someone in childhood the health consequences of not just the addicted to it’’ rather than ‘‘stuck with to nicotine, you are not likely to be addiction to cigarettes, but cancer and it.’’ The whole purpose, of course, is able to addict them when they become heart disease, and a range of other you attract a 15-year-old to start adults. problems as well. I cannot think of smoking and you have got a customer In 1986, R.J. Reynolds—they were anything that gives me more pride for life. talking about their advertising for than to decide that we are going to Smoking is legal in this country, and Camels: take substantial new resources and in- it will always be legal. Adults have the [Camel advertising will create] the percep- vest them in the National Institutes of right to make the choice to smoke. tion that Camel smokers are non-conformist, Health which will result in exciting, Three hundred thousand to four hun- self-confident, and [they] project a cool atti- wonderful, and breathtaking new dred thousand people a year die in this tude, which is admired by their changes in health care and medicines. country from choosing to smoke, from peers. . . . [They aspire] to be perceived as That is the subject for the Senate: Do smoking and smoking-related causes. cool [and] a member of the in-group is one of we want to stop the tobacco industry Three hundred thousand to four hun- the strongest influences affecting the behav- from trying to addict our children? Do ior of [young adults]. dred thousand people a year die from we want to put together an approach having made that choice. You have It is pretty clear. And this is just a that does all of these things, heard the statistics: every day, 3,000 smidgeon of the evidence that has counteradvertising, smoking cessation, kids will start to smoke; 1,000 of them come from the tobacco industry about investment in the National Institutes will die from having made that choice. what they have been doing over the of Health, and a whole range of things? The question for us is, will we as a years to appeal to a customer base I think most people would say, abso- country continue to sit on our hands coming from our children. lutely, this legislation makes a great and say to the tobacco industry, ‘‘It is Now, they have always insisted they deal of sense? all right, we understand your future have not been doing this. In fact, until And so the bill comes to the floor of customers are our children; it is all a couple of years ago the CEOs of to- the Senate, and to describe the pace in right, our sons and daughters are avail- bacco companies insisted that nicotine the Senate as a glacial pace is to de- able to be a marketing target for you? was not addictive. Nicotine was not ad- scribe a condition of speeding. I mean, Should it be all right to say that you dictive. They are the last Americans, glacial doesn’t begin to describe the can advertise to them; you can make apparently, to be willing to testify pace of the Senate when we have a pitches to them; you can provide all under oath that nicotine was not ad- bunch of people who are determined to kinds of subtle approaches to our kids dictive. But, of course, now most of slow something down. Glaciers at least that smoking is cool, smoking is some- them admit they understand nicotine move forward by inches. You bring a thing you ought to do, smoking tastes is addictive. And we raised the ques- tobacco bill to the floor of the Senate good, smoking feels good, your peers tion in a piece of tobacco legislation and then we have somebody who wants smoke so you ought to smoke’’? Is that whether this country wants to con- to speak for 46 hours on the Tax Code. something this country wants? Is that tinue to countenance this behavior. Well, God love them, they have every something this country is going to Smoking is legal, but should we allow right under the rules of the Senate to allow to continue? I don’t think so. tobacco companies to target children talk about whatever they want. We Let me continue. to become addicted to nicotine? The could talk about almost anything that The tobacco industry in 1983, says answer clearly ought to be no, and the anybody wants to come and talk about Brown & Williamson, will not support a answer ought to be delivered with some on the floor of the Senate, and so today youth smoking program which discour- urgency on the floor of the Senate. we are talking about the marriage tax ages young people from smoking. In We have a tobacco bill that was penalty. 1983, you heard all of the references brought to the floor of the Senate The Tax Code is a fascinating sub- that I used about the pitches that were which had a number of very important ject, and if ever there was anything in made by the industry to the children goals, the most important of which, in need of reform it is America’s Tax and the importance they placed in hav- my judgment, was to interrupt, inter- Code. It seems to me that there is a ing those children as their customer cept, and stop the tobacco industry time and a place for us to work to- base. from appealing to our children. Among gether in a thoughtful way to reform And then in 1983 they say this to- other things, it will raise the price of a the Tax Code, to fix the marriage pen- bacco company ‘‘will not support a pack of cigarettes. But what will hap- alty, and to do a whole range of other youth smoking program which discour- pen as a result of that price increase things that decrease its complexity, ages young people from smoking.’’ and the revenue that comes from it make the code much more understand- Well, I guess that is because they will be a range of programs such as able, and much fairer. But I wonder if knew who their customers were. They smoking cessation programs, so that we ought not keep our eye on the ball knew where their future profits would those who are now addicted to ciga- this afternoon and see if we can’t pass come from. rettes and want to get off of that addic- the tobacco bill, see if we can’t do what ‘‘Strategies and Opportunities,’’ a tion will have the opportunity, the re- this piece of legislation that we de- memorandum, 1984, from R.J. Rey- sources, and the wherewithal to do signed will do, and that includes the nolds, and I quote: that. five or six steps I have just described. Younger adult smokers have been the criti- Also, the bill had a prohibition on ad- If one thinks they are unimportant, I cal factor in the growth and decline of every vertising directed at children and a suppose you can conceive of a dozen major brand and company over the last 50 prohibition on vending machines in other things that you want to do to years. They will continue to be just as im- areas that are available to children. change the subject. We could have a portant to brands [and] companies in the fu- The smoking cessation programs will discussion, I suppose, this afternoon ture for two simple reasons: The renewal of be supplemented by counteradvertising about the space station. Gee, that is a the market stems almost entirely from 18- programs. Counteradvertising pro- controversial subject. You could have year-old smokers. No more than 5 percent of smokers start after age 24. . . . Younger grams that tell America’s children that an amendment here and we could de- adult smokers are the only source of replace- smoking does not make sense, smoking bate the space station for the next 4 or ment smokers. . . . If younger adults turn can injure your health, smoking can 5 hours. Or we could have a discussion away from smoking, the industry must de- cause death, smoking is a contributing about the nutrition of canned soup June 10, 1998 CONGRESSIONAL RECORD — SENATE S6023 from the grocery store shelves or our speak. I have only 25 more minutes—I could avoid the fate that he had experi- trade problems with Australia. am, of course, only kidding. Senator enced. How often we heard that story. There is no end to the subjects if CONRAD from North Dakota has been a Most recently, when the task force somebody wants to change the subject. principal author of a piece of legisla- met we heard from a former Winston There is no end to the other things to tion that has become a part of the bill man. He would go around to parties ruminate about or talk about if one that is now on the floor of the Senate. and events, representing Winston. Now doesn’t like the subject of this bill, I mentioned the role that Senator he has lung cancer. He described to us which is producing a piece of legisla- MCCAIN and Senator CONRAD and others what it is like to be under a death tion that deals with the tobacco issue have played. I think it has been very threat. the way I have just described it. important. I know there are people And we heard from a woman who was Let me go back to where I started. outside this Chamber who watch this a model for Lucky Strike, who has also After having read the evidence and in- debate and whose teeth you can hear had a laryngectomy, and also had other formation that comes from the files of gritting a mile away, they are so upset forms of cancer. She was required by the tobacco industry, if anyone does about what is going on here. Tough the terms of her contract to smoke. not yet believe that these companies luck. Just tough luck. Times have She took up the habit as a very young were targeting children because they changed. woman and now describes the pain and knew the only opportunity for them to With Senator CONRAD’s help and Sen- suffering she has experienced. profit in the future would be to get a ator MCCAIN’s help and the help of oth- So many of these witnesses have ac- customer base among young people, if ers who have done, I think, remarkable tually broken down and cried at our anyone doesn’t yet believe that, they work on this kind of legislation, we hearings, moved by the emotion of are not prepared to believe anything will in the end—whether the opponents what they have experienced. I wish my about this subject. like it or not—pass this tobacco bill. colleagues could have been there The evidence is clear. It is not debat- There will be enormous pressure on the through every hour of what we heard, able. It is in black and white. The in- House of Representatives to pass a because I don’t think there is a Mem- dustry didn’t want to give it up. They similar piece of legislation. We will ber of this Chamber who could have re- were forced to. And this country now have a conference. I predict we will mained unmoved. But we know the his- should make a decision: is this behav- have a new law in this country before tory of this industry. ior tolerable or should we stop it? I the end of this session of Congress that We had a representative of the indus- hope at every desk of this Senate when does something that we can be proud of try come and see me and tell me we are the roll is called and the Senator is and should be proud of on behalf of our unfairly vilifying this industry. I said named, I hope they would stand up and children. to him, frankly, this industry has done say that we ought to stop it. No com- So as I yield the floor, let me com- a great job of vilifying itself. They pany in this country has the right to pliment my colleague, Senator came before Congress. They said under try to attract a 14-year-old son or CONRAD, for the work he has done for so oath their products didn’t cause these daughter in an American family to be- many months on this legislation. And, diseases. They said their products were come addicted to tobacco. No company as I do, let me also pay a compliment not addictive. They said they had not has that right. Tobacco is a legal prod- to the chairman of the committee on targeted kids. They said they had not uct for those age 21 or over. It ought which I serve, Senator MCCAIN, who manipulated nicotine levels to foster not be right for any company to try to similarly has done some wonderful addiction. addict our children to tobacco. We now know each and every one of That is what this is all about. It is work on this legislation. I yield the floor. those statements was false. We do not not about the marriage tax penalty. It The PRESIDING OFFICER (Mr. know it by somebody else’s words, we is not about the space program. It is FAIRCLOTH). The Chair recognizes the know it by the industry’s own words, not about Food for Peace. It is not distinguished Senator from North Da- because we have now seen the docu- about the Food Stamp Program. It is kota. ments. I have read hundreds of pages of not about any of that. It is about the Mr. CONRAD. Mr. President, I thank these documents that reveal how this tobacco issue. my colleague from North Dakota for I am as patient as anybody. I can be industry testified falsely, knowing full his strong advocacy, because this is an here 2 weeks from now and we can be well what they were saying was untrue. important issue. It is an issue that is talking about new discoveries in the I was kind of struck by this cartoon habits of earthworms or whatever it is going to affect the lives of the Amer- by Herblock that was just in the Wash- somebody wants to talk about 2 weeks ican people for years to come. We all ington Post on May 27. The headline is, from now. know the statistics—over 400,000 people ‘‘Have I Ever Lied To You?’’ It is a pic- But in the end, this Congress will a year die in this country from to- ture of the tobacco companies. This have to deal with this bill. Are we bacco-related illness. As we have held man in the fancy suit has a button on going to pass a tobacco bill? And to hearings all across the country, we saying ‘‘tobacco companies.’’ He is a those who do not want to pass it, those have heard from the people affected by representative of the tobacco compa- who do not want to vote for it, I would those deaths very moving testimony. I nies. Here is a person who is reading a say: Just give it your best shot and still remember very clearly in Newark, tobacco industry ad and watching a to- then stand up and vote against it. If NJ, hearing from a coach, Pierce bacco message on taxes on television, you don’t like it, vote against it. But Frauenheim, a big, tough, strong guy all with the headline, ‘‘Have I Ever don’t thwart the will of the American who is a football coach and assistant Lied To You?’’ We know the tobacco people to pass legislation that will stop principal. industry has lied to us. They have done the tobacco companies from addicting When he testified, you could barely it repeatedly. I regret to say they are our children. Don’t do that. You will be hear him talk. He described how after a doing it in this debate. on the wrong side of history on this lifetime of smoking he was diagnosed I would like to focus now on the question. with cancer of the larynx, and he de- question that is before us, the amend- Ten years from now, 5 years from scribed to us the terror that he felt ment of the Senator from Texas, be- now, you will look back at that vote, when the doctor told him that his life cause during the budget debate the Re- you will look back at this debate, and was threatened and that the only hope publicans on the Budget Committee re- you will have to ask yourself, if you for him was a laryngectomy in which peatedly said: The tobacco funds vote the wrong way—How on Earth his larynx would be taken out. He went should go to Medicare and should not could I have been so out of step with through that procedure, and thank God be used as a piggy bank for unrelated common sense? How on Earth could I it did save his life. But he is left now as spending or tax priorities. That was have been so out of step with what this somebody who can barely talk. You the position they took in the Budget country needed to have done at that can barely hear him. He told us of how Committee. time? much he hoped his message would in- The Senator from Texas serves on I notice my colleague from North Da- fluence others and that perhaps by his the Budget Committee. Now he is spon- kota is on his feet, waiting patiently to experience and his suffering others soring an amendment that uses the S6024 CONGRESSIONAL RECORD — SENATE June 10, 1998 money substantially in a way that is at Tobacco control and public health lies we have heard from who told us of variance from what he said in the gets zero. Medicare gets zero, which what it meant to have a father taken, Budget Committee. He said, and I they argued in the Budget Committee a mother lost, a brother who died be- quote: hour after hour ought to get all the cause of the addiction and disease The fundamental issue is going to be that money and now gets no money. And caused by these products. This is the we want to dedicate the tobacco settlement public health gets no money—nothing only legal product in America, when to saving Medicare, and the minority wants for smoking cessation, nothing for used as intended by the manufacturer, to spend the money on a myriad of programs, smoking prevention, nothing for that addicts and kills its customers. many of which have absolutely nothing to do countertobacco advertising. Those are pretty harsh words, but it is with the tobacco settlement. I thought this was a public health the truth, and it is the reason we have That is what the Senator from Texas bill. I thought that is what this was a challenge and an opportunity. The said in the Budget Committee. He said about. Our friends on the other side challenge is to overcome the power of all of the money ought to go to Medi- said it was a bill to help save Medicare. this industry that wants nothing done. care. Now we look at his amendment— That is when we were in the Budget The opportunity is for us to act and to not a dime of the money goes to Medi- Committee. Now they come up with make a difference in the lives of the care. My, what a change a few months nothing for Medicare, not a penny. people we represent. has made. We in the Budget Committee What a difference a few months makes. The Senator from Texas talks a lot debated this issue for an entire day, The Gramm amendment, in conjunc- about this being a huge tax on low-in- and over and over and over the Senator tion with the Coverdell amendment, come Americans. He doesn’t tell the from Texas said: All of the money will spend tobacco money on programs other side of the story. The other side ought to go to save Medicare. Now he that have nothing to do with the to- of the story is that there is a huge tax offered an amendment on the floor of bacco settlement. already being placed on low-income the U.S. Senate and guess what? There Frankly, I am in favor of using some Americans, and it is because of the use is not one penny for Medicare. What of the funds for drug control. I am in of these products. There is a massive happened? We were supposed to be favor of using some of the money to ad- shift that is going on in this country using this money, he said in the Budget dress the marriage penalty. But the because of the costs of this industry. Committee, to save Medicare. Now all way they have done it, there is nothing Mr. President, $130 billion a year is of a sudden Medicare gets nothing. left for Medicare and there is nothing the consensus calculation on what this Under the bill I introduced, Medicare left for public health. I just don’t think industry costs Americans—$60 billion got a chunk. We also gave a substantial that makes sense. I don’t think that in health care costs, $60 billion in lost chunk to the States because they are can stand the light of day. I don’t productivity, $10 billion in other costs. the ones that brought the suits that think that can stand scrutiny. I think Nobody gets hurt worse by those facts are before us. We also used the money our colleagues are going to have some than low-income Americans. Low-in- for health research and for public explaining to do if these amendments come workers’ payroll taxes are paying health care campaigns— are adopted. about $18 billion a year in Medicare countertobacco advertising, smoking Every single public health expert has costs. cessation, smoking prevention. Under testified that if we are going to be seri- Our friends on the other side talked the amendment of the Senator from ous about protecting the public health about that incessantly in the Budget Texas, not only is there no money left and reducing youth smoking, then we Committee, that it is costing Medicare for Medicare, which he said all the have to have a program that is com- $18 billion a year and that all of the money should go to just a few months prehensive in nature, and part of that money ought to go to protect Medi- ago, but you know what? There is no has to be smoking prevention pro- care. That was their argument in the money left for public health pro- grams, smoking cessation programs to Budget Committee. Now they come out grams—none—zero. This is a bill that help those who are addicted get off the here on the floor and offer an amend- is supposed to be protecting the public products, and we also need ment that gives zero for Medicare. How health. There is no money left for pub- countertobacco advertising to warn do they justify that? What caused this lic health and there is no money for people of the dangers of using these dramatic transformation? What caused Medicare, which just a few months ago products, to warn them of the cancer this incredible change from being the he said was the absolute priority. risks, to warn them of the risks to defenders of Medicare to now not car- This chart shows the effect of the their heart, the risks of heart disease, ing about Medicare at all? I don’t know Gramm amendment which really does the risks of emphysema and the other what happened. It is amazing what oc- turn the tobacco bill into a piggy bank diseases which cost so many people in curs in this body, the inconsistency. for unrelated matters that our col- our country their lives. One month, Medicare is the priority; in leagues on the other side of the aisle I can remember very well a young fact, it is the only priority. The next were decrying during the Budget Com- woman who came and testified at our month, it matters not at all. What a mittee deliberations. Look what has hearing, again, in New Jersey, a young difference a few months makes. happened here: 35 percent of the woman named Gina Seagrave. She told The fact is, smoking is a huge tax on money, if we agree to the Gramm about her mother who took up smoking low-income Americans. The average amendment, goes for an unrelated tax at a young age and died at a very pack-a-day smoker will spend $25,000 on cut. We have the Coverdell amendment young age from a smoking-related ill- cigarettes over his or her lifetime. The that takes 13 percent of the money, so ness. This young woman broke down average pack-a-day smoker is being af- now half the money is for matters that and cried. She described to us the dev- fected in many ways. Not only are they are unrelated to tobacco legislation— astating effect this had on her whole paying $25,000 for cigarettes, but they half the money. family, because losing their mother are paying $20,000 in medical costs over There is no money for Medicare. Re- really hurt the entire family. It hurt it their lifetime—$25,000 for the ciga- search will get 13 percent of the money. very badly. She described what they rettes, $20,000 for medical costs. That is Veterans will get 4 percent. Farmers had been through since their mother $45,000 tobacco use is costing the aver- will get 9.8 percent. The States, boy, had passed away. age pack-a-day smoker. We talk about they are going to be in for a big sur- In every town and in every State I a heavy economic impact on low-in- prise. The States were going to get 40 have gone to, to listen to witnesses, come folks; that is the heavy impact. percent of the money. They are the they have described to us the trauma It dwarfs anything that is being done ones who brought the lawsuits. They that they have experienced because of here to counteract it. were given 40 percent of the money be- the addiction and disease caused by the Mr. President, the biggest tax cut we cause that is the amount of the money use of these products. could give low-income Americans is to they got in the settlement with the to- I grew up in a household where my reduce that cost. The McCain bill will bacco industry. If we adopt the Gramm grandparents raised me. My grand- cut smoking by about one-third. That amendment, they are going to get 24 father was a smoker. It probably short- will produce a savings of $1.6 trillion percent of the money. ened his life. I think of all those fami- over the next 25 years. That is the June 10, 1998 CONGRESSIONAL RECORD — SENATE S6025 smart way of helping low-income above-the-line deduction, but only on the floor over the last week, because Americans. when fully phased in. In actual tax sav- now we have an amendment before us When we look at the Gramm proposal ings, this couple would realize 15 per- that, amazingly enough in a public with respect to the so-called marriage cent of that deduction, or $495. That is health bill, provides no money for pub- penalty, we see that he is not really a far cry from the $1,400 advertised on lic health. just addressing the marriage penalty. the floor of the Senate. A couple earn- And after the arguments of our In fact, a lot of folks are benefited in ing $50,000, in the 28 percent bracket, friends on the other side of the aisle the Tax Code by being married. Maybe would get a savings of $924—again, a that were so strenuous in the Budget we can put that next chart up that far cry from the $1,400 advertised here Committee—they said we had to take shows what I am talking about. on the Senate floor. every dime of this money and use it for This is something we know with Bear in mind that those calculations Medicare—now we are about to vote for great certainty, because we can study are based on the $3,300 deduction being an amendment that does not give one married couples and we can see who fully phased in. The $25,000 couple wait- dime to Medicare. What a trans- would benefit by filing as single indi- ing to realize its $495 savings is going formation. They have gone from 100 viduals, who gets helped and who gets to have to wait until the year 2008, be- percent of the money going to protect hurt by filing as a married couple. cause that is when it is fully phased in. Medicare to none of the money going What we find is, for adjusted gross in- What they will get next year, under the for Medicare. While they are at it, comes of under $20,000, the significant Gramm plan, is not the $1,400 that has there is not going to be a dime of majority of people get a bonus by filing been advertised, but $125. That is what money to protect public health, either, as a married couple. We see a very they are going to get next year, not in a public health bill. small group—those are in red—who are $1,400; they are going to get $125. For Let us defeat the Gramm amendment actually penalized. A little over 10 per- the year 2002, that savings goes up to and stay on course with a public health cent of couples with combined income almost $150. Well, that is a whole lot bill that addresses the real concerns under $20,000 have a penalty by being less than $1,400. By 2007, the savings is and the real challenges facing the married. The significant majority of up to $297. American people. people, almost two-thirds, receive a So millions of families, who think of I thank the Chair and yield the floor. bonus by filing as a married couple, themselves as average hard-working Mr. FORD. I suggest the absence of a those who have adjusted gross incomes people, are going to be wondering quorum. of under $20,000. where their $1,400 of savings are. The The PRESIDING OFFICER. The If we go to AGIs—adjusted gross in- fact is, they are not going to see it, be- clerk will call the roll. comes—of $20,000 to $50,000, over 50 per- cause it has been overstated here on The legislative clerk proceeded to cent benefit. They pay less filing as a the floor of the Senate what the sav- call the roll. Mr. CONRAD. Mr. President, I ask married couple than they would pay ings actually will be. unanimous consent that the order for filing separately. About 40 percent I am hard pressed to decide what is the quorum call be rescinded. have a marriage penalty. the worst feature of the amendment of The PRESIDING OFFICER. Without From adjusted gross incomes of the Senator from Texas: The reckless objection, it is so ordered. $50,000 to $100,000, more of those, as a reductions it will require in public Mr. CONRAD. Mr. President, while percentage, are penalized. About 50 per- health programs or the downright stin- we are waiting, I thought I would just cent have a marriage penalty; about 40 giness of the remedy it purports to de- go through what I call the top 10 to- percent have a marriage bonus. liver to couples who actually incur a bacco ‘‘tall tales’’ that we have heard That is also true of those with ad- marriage penalty. from the tobacco industry during this justed gross incomes of over $100,000. If we are going to do something debate. About 50 percent have a penalty; about about the marriage penalty, we ought Tall tale No. 1 was that tobacco has 40 percent have a bonus. to focus the benefit on those who are no ill-health effects. Remember that? Given this information, it is rel- being hurt. That would be dealing with They came up to the Capitol, and they atively easy to put together a remedy the marriage penalty. But to spread it put up their hands, and they swore that delivers the relief directly to around to people who are helped and under oath that these products did not those who actually have a marriage hurt by the marriage penalty denies cause ill-health effects. But then we penalty. That is what the Democratic those who are actually penalized from got the documents. We got them be- proposal does. getting the help they deserve. cause of court action. We got access to Unfortunately, this is not the ap- Mr. President, I think what we have the documents, and we found out, in proach of the Senator from Texas. He before us is an important choice. The the industry’s own words, what the has opted instead to take a scattershot Democratic alternative focuses its re- truth is. approach that benefits equally those lief on those taxpayers who are actu- Here is the truth on that claim that who are helped and those who are hurt. ally being penalized. By contrast, the tobacco has no ill-health effects: The result is, those who are hurt get proposal offered by the Senator from Boy! Wouldn’t it be wonderful if our com- less help than they really deserve. That Texas dilutes that relief to provide for pany was first to produce a cancer-free ciga- is why the Democratic alternative is couples paying a marriage penalty as rette. What we could do to the competition. superior for those who really have a well as those who are actually receiv- This is from a mid-1950s Hill & marriage penalty. ing a marriage bonus. Knowlton memo quoting an unnamed I believe that this is unfair. We ought You hear a lot of talk about the mar- tobacco company research director. to give those who actually experience riage penalty. We do not hear much That is tall tale No. 1. the marriage penalty the help they talk about the marriage bonus. But the Tall tale No. 2 is, again, tobacco has really need to overcome it. It does not fact is, at many income levels many no ill-health effects. Again, we have an make sense to me to give the help to more are being benefited by the mar- industry document that reveals the fal- those who are benefited by being mar- riage bonus than are being affected by sity of that claim. This is from a 1978 ried in the same way that you help the marriage penalty. Because the Brown & Williamson document that those who are being hurt. The result is, Democratic alternative is targeted to says: ‘‘Very few customers are aware of you do not give enough to those who low- and moderate-income couples, we the effects of nicotine, i.e., its addict- are being hurt. That is not fair. I just can make their relief much greater. I ive nature and that nicotine is a poi- do not know what sense it makes. think that makes sense for those who son.’’ The Senator from Texas has told us are actually experiencing a marriage Again, that is not from the public on the floor that the average family penalty. health community. That is from the would save about $1,400 in taxes under In addition, we can save money to tobacco industry’s own documents. his proposal. Let us look at an exam- use to promote the public health. After Tall tale No. 3: Nicotine is not ad- ple. A couple earning $25,000 is in the 15 all, that is what this bill is supposed to dictive. percent tax bracket. Under the Gramm be about. I must say, I have viewed The truth, from a 1972 research plan- proposal, this couple would get a $3,300 with some concern the developments ning memo by RJR Tobacco: ‘‘Happily S6026 CONGRESSIONAL RECORD — SENATE June 10, 1998 for the tobacco industry, nicotine is . . . my own data . . . shows an even the fabric of our society. If we believe both habituating and unique in its va- higher Marlboro market penetration in family, we believe in marriage. So riety of physiological actions.’’ among 15–17-year-olds.’’ why in the world do we have a public This industry, I tell you, these guys You wonder what they thought when policy on the books that somehow cre- come up here, they don’t come with a they went home at night. ates a penalty for being married? That lot of credibility because they have Tall tale number 10, again, the claim is totally counterproductive to our val- told a lot of tall tales. tobacco companies don’t market to ues of this society, of this Nation. Tall tale No. 4, again, the claim that children. Before 1969, marriages were treated nicotine is not addictive. This is from ‘‘apparently problematic by the Federal Tax Code like partner- This is from a 1992 memo from the di- research,’’ a Brown & Williamson docu- ships, allowing husbands and wives to rector of portfolio management for ment: split their income evenly. In 1969, how- Philip Morris’ domestic tobacco busi- ‘‘The studies reported on youngsters’ ever, this practice of income splitting ness: ‘‘Different people smoke ciga- motivation for starting, their brand was ended, and thus was created the rettes for different reasons. But, the preferences, as well as the starting be- marriage tax penalty. primary reason is to deliver nicotine havior of children as young as 5 years Since that time, with our Nation’s into their bodies . . . similar organic old . . . the studies examined . . . progressive tax rates, tax laws have chemicals include nicotine, quinine, young smokers’ attitudes toward ad- meant that working married couples cocaine, atropine and morphine.’’ diction and contain multiple references are forced, forced to pay significantly Now, again, this is the industry— to how very young smokers at first be- more money in taxes than they would their documents—revealing what they lieve they cannot become addicted, if they were both single. Currently, 42 know and what they think of their own only to later discover, to their regret, percent of married couples suffer be- products. They say it is not addictive that they are.’’ cause of the marriage tax penalty. and yet they say it is the same as co- That kind of sums it up. That is the Let me provide an example. A single caine, the same as morphine, the same issue before the Senate. Are we here to person earning $24,000 per year is taxed as atropine. protect kids or are we here to protect at a 15 percent rate. Now, if two people, Tall tale No. 5: The tobacco compa- the bottom line of the tobacco indus- each earning $24,000, get married, how- nies did not manipulate nicotine levels. try? ever, the IRS, by taxing them on their The truth, again, from an industry The Wall Street analysts that came combined income, taxes them in the 28 document, a 1991 RJR report: ‘‘We are before my task force indicated that, in- percent bracket, not the 15 percent basically in the nicotine business . . . deed, if this legislation were passed, it that they would be taxed as individ- effective control of nicotine in our would reduce the profits of the indus- uals, but 28 percent because they have products should equate to a significant try, but not dramatically. In fact, the joined in holy matrimony. It is also important to be aware that product performance and cost advan- industry would still enjoy very, very the marriage tax penalty hits the tage.’’ high profit levels. Remember, this in- American people not only at the Fed- Tall tale No. 6: Tobacco companies dustry has a profit margin that is three eral level but also on their State taxes. did not manipulate nicotine levels. times the profit margin of most compa- Idaho generally conforms its State tax This is from a 1984 British-American nies that are in packaged good indus- code to the Federal law. If the Federal Tobacco memo: ‘‘Irrespective of the tries in America. They have a profit Government alters its standard deduc- ethics involved,’’—that is an interest- margin of 30 percent. Other package tion levels, for instance, Idaho most ing statement—‘‘Irrespective of the goods average a profit margin of 10 per- likely will as well. While the focus of ethics involved, we should develop al- cent. They would still enjoy dramatic ending the marriage tax penalty has ternative designs which will allow the profits, even if we passed this legisla- been primarily at the Federal level, we smoker to obtain significant enhanced tion according to the analysis of the cannot discount the fact that this is, in deliveries [of nicotine] should he so people who should know best, the Wall essence, a double hit for working wish.’’ Street analysts that report on this in- American couples who are trying to They have been manipulating nico- dustry. fulfill what this country believes in. tine levels for a long time. I yield the floor. I think that we can all agree that the Tall tale No. 7: Tobacco companies The PRESIDING OFFICER. The Federal Government should not be pe- don’t market to children. Chair recognizes the distinguished Sen- nalizing marriages, a sacrosanct insti- This is from a 1978 memo from a ator from Idaho. tution and the bedrock of our social Lorillard Tobacco executive: ‘‘The base Mr. KEMPTHORNE. Mr. President, structure. It is time for the Federal of our business are high school stu- thank you. Government to end this injustice to dents.’’ With this amendment we are debat- the American family. They didn’t market to kids? They ing today, which is a critical amend- I urge my colleagues to support the didn’t target kids? Here you have a ment, we will bring the last significant amendment of the Senator from Texas, major tobacco company executive say- aspect of our Federal Tax Code that is Senator GRAMM. I commend him for his ing the major business is high school of particular concern to Idahoans, and efforts. kids, the same kids tobacco companies I think really all Americans, and that Mr. President, just to reiterate, we don’t market to—children. is the marriage tax penalty. think about this society and we think This is from a 1976 RJR research de- I ask myself one fundamental ques- about all the problems and challenges partment forecast: ‘‘Evidence is now tion before I make up my mind on any that are facing America today. Senator available to indicate that the 14- to 18- issue we deal with on the floor of the FRIST of Tennessee was chairman of a year-old age group is an increasing seg- U.S. Senate. That is, Does this policy task force on education in America. He ment of the smoking population. RJR make sense for the American people? pointed out many of the statistics, must soon establish a successful new Let’s apply this question to our cur- many of the problems that we are hav- brand in this market if our position in rent Federal Tax Code which, quite ing with regard to our children. He the industry is to be maintained over simply, penalizes a working couple for pointed out how many of these chil- the long term.’’ getting married. Should folks pay more dren, more and more, are coming from Well, I don’t know how it can be tax because they are married? Abso- families where there is not both a fa- more clear. lutely not. ther and a mother. That is a signifi- Tall tale No. 9: Tobacco companies The marriage tax penalty raises reve- cant problem—a significant problem. don’t market to children. nue for the government—no question How do we respond with public pol- This is from a 1975 report from a about that. It raises revenue. But it is icy? Well, if you are married, there will Philip Morris researcher: ‘‘Marlboro’s bad public policy. It most often raises be a penalty. I happen to be the chair- phenomenal growth rate in the past taxes on lower and middle-income fam- man of the Military Personnel Sub- has been attributable in large part to ilies who claim the standard deduction. committee of the Armed Services Com- our high market penetration among Now, that is wrong. We must strength- mittee. We are starting to have prob- young smokers . . . 15 to 19 years old en the bonds of family to strengthen lems with recruitment of young people June 10, 1998 CONGRESSIONAL RECORD — SENATE S6027 to the military services. We need and some of the alternatives that ap- wants to pay for it. Not everybody sup- 176,000 young people every year to join pear to be supported by opponents of ports the fact that I am taking a third the military—the finest military in the this amendment. of the money from this bill which was world. At one of the hearings, I asked The principal feature of the amend- going to things like paying lawyers the generals and admirals testifying ment before us is an effort to give back $92,000 an hour, or paying farmers this: ‘‘Tell me, is there something roughly a third of the money that is $23,000 an acre when they do not have about this issue of values that we are collected in the cigarette tax embodied to give up the land and do not have to hearing about?’’ And they said: ‘‘Yes, in the bill before us. A tax that is very stop farming tobacco, or paying there is; there is very much a problem regressive in its impact. As I noted ear- $18,615.55 for smoker cessation pro- with values among all people.’’ In fact, lier, 59.1 percent of the taxes are col- grams for every Native American who all branches of the military services lected from people who make less than smokes. They would rather spend the have now added 1 week to the basic $30,000 a year. money on those things than to correct training to try to somehow instill in This amendment gives a rebate to the marriage penalty. But I do not them core values—knowing right from moderate-income Americans, who will think philosophically anybody objects wrong. A three-star general of the Ma- be devastated by this bill which will to the thesis that a tax policy that dis- rine Corps said, ‘‘We now have a new raise the tax by $1,015 per year, for the criminates against marriage is coun- category of young person; we just call average smoker who smokes one pack terproductive, in this Nation or any them ‘evil,’ and there is nothing we can of cigarettes a day. If the objective of other nation. Now, there are two issues that have do with them.’’ the tax is to discourage smoking, if we As the occupant of the Chair knows, hope to get a 50-percent reduction in been raised by opponents. One issue has been that we could do it cheaper if we it used to be that if you had a troubled smoking among teenagers as a result of excluded couples where one of the par- youth, in all likelihood if you could raising the tax, if the objective is to ents does not work outside the home. send them off to the military, they discourage smoking and not to take That is, if we only gave the marriage would be straightened out. That is not money away from blue-collar workers penalty correction to those couples the case anymore. I mention these to give to Government to spend, then the logic of the amendment that is now that make roughly the same income. challenges because it comes back. Do Now, when we put our amendment to- pending is that we should take roughly any of us believe that 1 week of basic gether, we looked at that. We thought a third of the money we collect and training with 17- and 18-year-olds is about it for about a microsecond, and somehow going to instill in them the give it back to people and families who we rejected it because if you do it the values they should have learned many, make less than $50,000 a year by repeal- way the minority wants to do it, you many years ago, that they should have ing the marriage penalty. end up giving a tax break only to those Some of our colleagues have come to been raised upon, knowing right from couples where both have roughly equal the floor with very pretty charts with wrong? That comes from a family envi- incomes. But for families that make a my name on them. I appreciate the free ronment, a family environment where decision to sacrifice so that one of advertising. I hope my mother saw a mother and father are there, where them can stay home and work in the mother and father will tuck the child them. They were beautiful charts. But home, which is real work, maybe the into bed, where mother and father will they refer to something called a mar- most important work on the planet, for listen to their prayers—a mother and riage bonus, and I think what is hap- those who choose to do that they would father, a married couple. pening is this whole debate is getting be discriminated against by the provi- Yet, we have public policy on the skewed by people who do not want to sion that the minority is proposing to books today that penalizes married focus on the issue. So let me explain offer. couples. That is wrong; that is flawed what we are doing. Then I want to say Under our amendment, you get $3,300 public policy. It is time that this Na- a little bit about this marriage bonus, of deductions whether or not both par- tion correct that. That is why I am and then talk about why doing the ents work outside the home. proud to stand in support of this marriage penalty in the way that is Now, why did we do that? We did it amendment that will correct this. It is being suggested by the minority will because we do not believe the tax pol- a clear signal, a loud signal, that we discriminate against stay-at-home par- icy of the country should discriminate are going to reclaim this society and ents. against people based on whether or not the fabric of this society by affirming First of all, under the current Tax they both work outside the home. And that marriage is positive; we will not Code there are 31 million families that let me make it clear. I am not trying penalize those who choose to go into end up paying an average of $1,400 a to tilt the Tax Code one direction or marriage. year more in income taxes because the other. My mother worked all my So, again, I urge all my colleagues to they fall in love and get married than life because she had to work. My wife support this amendment by the Sen- they would pay if they stayed single. I has worked all our children’s lives be- ator from Texas. think it is a uniform position in the cause she wanted to work. And I am Mr. President, I suggest the absence country as a whole and in the Senate not making a judgment about whether of a quorum. in particular that it cannot be prudent it is better for both parents to work or The PRESIDING OFFICER. The tax policy, even in the economy of the one parent to stay at home. I think clerk will call the roll. greatest nation in the history of the that is something each family has to The bill clerk proceeded to call the world, to have a tax policy that dis- make a decision on based on what they roll. courages people that fall in love from want for themselves, their children and Mr. GRAMM. Mr. President, I ask getting married. what they can afford. But the point I unanimous consent that the order for I think our colleagues on both sides want people to understand is that the the quorum call be rescinded. of the aisle would agree with the amendment that is before us treats The PRESIDING OFFICER (Mr. premise that the family has been the couples exactly the same whether they ABRAHAM). Without objection, it is so most powerful institution in the his- both work outside of the home or ordered. tory of mankind in terms of promoting whether one works outside the home Mr. GRAMM. Mr. President, I wanted progress and happiness. Those are two and one stays home to be a home- to respond to some comments. I was important things. So what I am trying maker, to raise the children. I do not over in a conference on the IRS reform to do in this amendment is to repeal believe the Tax Code should discrimi- bill when several of our colleagues that marriage penalty so we do not dis- nate against people based on the deci- came over to comment on the pending courage people who fall in love from sion they make about whether to work amendment. I want to try to address getting married and forming families inside or outside the home. briefly some of the issues that they and achieving the stability and the The way we have written the bill we raised. happiness and the fulfillment that do not discriminate. You get the bene- Let me begin by trying to delineate comes from being married. fit if both parents work and you get the between the marriage penalty that is Now, I think there is a general view benefit if only one parent works be- pending in the amendment before us that we should do that. Not everybody cause we give a $3,300 tax deduction. S6028 CONGRESSIONAL RECORD — SENATE June 10, 1998 We do it above the line so you get to married, by $2,850. So that he is going How did the tax take double? How did deduct it before you calculate what to get a deduction by marrying Jose- taxes, as a percentage of the economy, your taxable income is. phine of $5,550. double the Federal level between 1950 So that very modest-income people I want to pose this question to our and 1996? It doubled by raising the bur- who get an earned tax credit, but who colleagues who think that is such a den on families with children from $1 still work, can still take the credit. terrible thing and that anybody who is out of every $50 to $1 out of every $4. For example: a lady who is washing getting that should not get the benefit So, under these circumstances, it dishes and a man who is a janitor are of eliminating the marriage penalty. makes perfectly good sense to me that both working. They are trying to get How many fathers go to the wedding we would want to do something to help ahead, they are trying to be self-suffi- and when they get to the point where working families shield more of their cient, they both get an earned-income they say, ‘‘Is there anybody here who income and, in doing so, end the star- tax credit, and they each have two objects?’’ Bill, Josephine’s father, vation of the one institution in Amer- children. They meet and say, ‘‘I have stands up and says, ‘‘Wait a minute, I ica that works, and that is the family. found the solution; I am going to form object to this marriage, because if Jo- We are feeding Government, and we are a family.’’ They find if they get mar- sephine gets married, I’m going to lose starving families. ried, they lose the earned-income tax $2,700 of deductions and, as a result, it What the amendment I have offered, credit and they suffer a substantial de- is a bad deal for me’’? I never heard of with Senator DOMENICI and Senator cline in income. So they decide not to that happening. ROTH, tries to do is to give some of this get married. How many people rush out to get money that is being taken from work- Well, one of the things we wanted to married because, by marrying someone ing families in this confiscatory excise do in our amendment was to assure with no income, you get $5,550 of de- tax back to working families. So while that we made this adjustment so that ductions? That is not that much less in raising the price of tobacco products people at very low-income levels who taxes; that is just the amount you get and hopefully discouraging people from in many cases are penalized most by to deduct. Does anybody believe that using it, we do not impoverish people the marriage penalty would get the re- you can feed, clothe, and house a who are, in this case, the victims by lief. That is why we did our amend- spouse for $5,550? having become addicted to tobacco ment the way we did, and it does cost But to listen to our colleagues talk, products. more to do it that way. But if you do you get the idea that this is some big That is what this debate is about. So not do it that way, you discriminate bonus, that this is some unfair provi- I hope people do not get confused about against families where one parent sion in the Tax Code, because by John this silly business about a marriage stays at home and works at home, and marrying Josephine and forming a cou- bonus. The idea that somehow you are you discriminate against very low-in- ple and filing jointly, his deductions go getting a bonus when you take a come people who are working and often up by $5,500, and that is a ‘‘marriage spouse, by the fact that your tax de- working two or more jobs, but are still bonus.’’ Some bonus. Does anybody be- ductions go up by $5,500 ridiculous. No- getting some assistance in the earned- lieve that John can pay for having a body ever got married thinking that income tax credit. wife for $5,550? No. It is not a bonus; it they were going to benefit with a $5,500 I think when our colleagues criticize is simply the way the Tax Code works. is deduction when they have to pay for this they do not really understand that Why should we give more protection the expenses of their spouse. That is what they are saying is if you stay to family income? This chart really not a bonus. In fact, that is inadequate. home and raise your children, you tells the whole story. This chart shows That is outrageous. It ought to be high- should be discriminated against. I 1950 and 1996, the last year when we er. think when people understand the dis- have complete data on how much of the Finally, to suggest that we want to tinction they are not going to be for income of average-income working fix the marriage penalty but only if doing it their way. families with two children was shielded both parents work is ludicrous. I want The second issue I wanted to address from Federal income taxes by personal to fix the marriage penalty, but I don’t because it did come up while I was gone exemptions and by the standard deduc- want to tilt the Tax Code against fami- is the so-called misnomer of a marriage tion. Basically, what this chart shows lies where one parent decides to stay at bonus. If there has ever been a fraudu- is that in 1950 the personal exemption home. That is really what the debate is lent concept in the history of American and the standard deduction for a fam- about. taxation, it is the so-called marriage ily of four making the average income I hope reason will prevail here. bonus. in the country shielded 75.3 percent of Sometimes it does; sometimes it Now, let me define this marriage their income from any Federal taxes. doesn’t. But, I hope it will in this case. bonus. You have a guy named John, In fact, in 1950 the average family with And I yield the floor. and he has a job, and he is out working. two children was sending $1 out of Ms. MOSELEY-BRAUN. Mr. Presi- He is a sales representative, and he is every $50 it earned to Washington, DC; dent, I oppose the Gramm amendment. traveling all over the country selling $1 out of every $50. Because of inflation It is an attempt to distract the Sen- school supplies. And you have a girl not keeping up with the rise in real in- ate’s attention from what should be named Josephine, a young lady who is come and because the standard deduc- the focus of our attention. It is a thin- graduating from high school. Now, she tion and personal exemption didn’t ly veiled ploy to kill this bill, the only graduates from high school and then keep up with inflation, today they vehicle this body has had to address the next day she and John walk down shield only 32.8 percent of the income the epidemic of teen smoking and the the aisle and get married. of the average family of four. So, disastrous effects on the health and What the minority is calling a tax whereas in 1950 the average family well-being of generations of Americans bonus is that Josephine’s father was making the average income, with two who were lured into smoking by to- taking a dependent exemption because children, was sending $1 out of every bacco companies. he was supporting Josephine while she $50 it earned to Washington, today the This amendment has no place as a was living in the family home, going to average family with two children is part of this bill, and because of the way school. He was paying her expenses, sending $1 out of every $4 it earns to it is financed, it has no place in any and he got to write off on his income Washington, DC. bill. I strongly agree we ought to face taxes every year or deduct $2,700. Under these circumstances, is it obvi- the marriage penalty issue as soon as Now, what is being called a marriage ous that one of the things we need to possible, and I also would like to accel- bonus is that by marrying Josephine do is to shield more family income erate full deduction of health insurance and forming this family, before Jose- from Federal taxes? That is what this expenses for the self-employed. I do not phine goes out next year and gets a job amendment is about. In 1950, rich peo- think, however, that we can address herself, John is going to be able to ple paid a lot of taxes. Today, rich peo- these issues by adding to one of the write off $2,700 in a dependent exemp- ple pay a lot of taxes. In 1950, poor peo- greatest problems facing our country’s tion. He is also going to be able to raise ple paid no income taxes. And in 1996, future economy—the solvency of the his standard deduction, because he is poor people pay no income taxes. Social Security system. June 10, 1998 CONGRESSIONAL RECORD — SENATE S6029 Just two months ago, this body not. I urge all my colleagues to vote the future obligations of Social Secu- agreed that the budget surplus should against the Gramm amendment, and rity. I support him in that initiative, be reserved for reforming our Social for the Democratic alternative. as I believe there are important initia- Security System. It was a wise deci- Mr. President, I suggest the absence tives of education and health care that sion, for no one can honestly deny that of a quorum. are unaddressed in our country. But the Social Security Trust Fund faces The PRESIDING OFFICER. The the tobacco legislation brings into long-term problems. Based on informa- clerk will call the roll. focus another reality: The average tion from the 1998 Social Security The assistant legislative clerk pro- American family is still paying too Trustees’ report, it appears that, by ceeded to call the roll. much taxation. Indeed, the CBO re- the year 2013, Social Security benefit Mr. TORRICELLI. Mr. President, I ports that taxes on the American pub- payments will begin to exceed the pay- ask unanimous consent that the order lic have recently reached 20 percent of ments into the Social Security Trust for the quorum call be rescinded. the gross domestic product. Not since Fund from employers and employees. The PRESIDING OFFICER. Without the Second World War has the total tax By the year 2032, the Trust Fund will objection, it is so ordered. burden on the American people, as a have used up its accumulated surpluses Mr. TORRICELLI. Mr. President, percentage of our economy, been so and will be unable to fully meet its ob- anyone who has been listening to this high. According to the Joint Commit- ligations to American retirees. In order debate on the Senate floor in the last tee on Tax, Americans earning $30,000 to guarantee the viability of the Trust few weeks is now familiar with the and less will pay 59 percent of this new Fund for our children and grand- painful but very real statistics. Each tobacco tax, which is being added on children, we must focus on its long- day, 3,000 young Americans begin this already heavy burden. The answer of the Senator from term future and begin the process of smoking and eventually 1,000 will die. I Texas is to primarily deal with this making necessary changes. can think of no issue on the floor of Workers, the very workers that Sen- this Congress which could more di- new burden by dealing with what is known as the marriage penalty. Indeed, ator GRAMM seeks to help under his rectly affect the lives of Americans for in 1996, 21 million couples encountered amendment, pay into the Trust Fund a generation to come to finally deal an average penalty because of their all their lives and expect—rightfully with the reality of tobacco and its as- joint filings as a result of their mar- so, I might add—Social Security to be sorted dangers. riage of $1,400. That represents 42 per- there for them when they retire. Legislation offered by Senator Because Congress has not yet acted MCCAIN, which I enthusiastically sup- cent of the American people—married to preserve the long-term viability of port, makes a contribution in several couples—are paying more as a con- Social Security, I cannot support any important ways to dealing with this sequence of their marriage. A proposal by Senator GRAMM com- proposal that would exacerbate the fi- problem: First, it requires a warning bines a phase-in of tax relief for the nancial difficulties facing the Social label and restricts advertising designed marriage penalty, with tax credits for Security Trust Fund. This amendment, to attract children to smoking ciga- the self-employed to purchase health however, will do exactly that. I cannot, rettes; second, it grants broad author- insurance, for costs of upwards of $16 in good conscience, vote for this ity to the Federal Drug and Food Ad- billion during the first 5 years, and $30 amendment. ministration to regulate tobacco prod- billion in years 6 through 10. I want to be clear that I am ex- ucts, their advertising, and their dis- Responding to criticism that earlier tremely troubled that some married tribution; third, it establishes a na- versions of his amendment would have tional tobacco trust fund for smoke couples are being taxed at a higher rate completely drained the public health than they would be if they were single cessation programs, health research, funds in this bill, Senator GRAMM now and compensation for States and farm- filers. I find it appalling that 20.9 mil- proposes to limit the use of the tobacco ers as a result of tobacco smoking and lion couples, some 42% of all American trust fund from one-half to one-third of the program; and, finally, it also penal- couples paid penalties totaling $28.8 the revenues in the outyears for deal- izes companies up to $3.5 billion per billion just last year alone. Senator ing with this elimination of the mar- year if they fail to meet their targets Gramm’s right—we ought to fix this riage penalty. He does so, however, by problem. But it is wrong to do it at the to reduce youth smoking. using the general revenues of the Fed- There is, however, a less addressed expense of further damaging a retire- eral Government. The consequences of but equally significant impact of this ment security component that is so using these general revenues for the legislation that also needs to be ad- vital to the American people. admittedly important objective of Fortunately, we have another option. dressed. It has been raised by the Sen- eliminating the marriage penalty is The Democratic alternative would ad- ator from Texas, Senator GRAMM, and that it contradicts President Clinton’s dress the marriage penalty problem now by the Senator from South Da- goal of first using Federal surpluses to without further endangering Social Se- kota, Senator DASCHLE, that there are deal with Social Security. curity. This alternative targets more unintended tax consequences of this Indeed, on a bipartisan basis, I could tax relief directly to the couples who legislation. I am relieved that my col- not understand and it would be dif- are actually penalized by the tax code. leagues joined in the judgment not to ficult to accept that this Congress The Gramm amendment, on the other raise the tobacco tax to $1.50 per pack would not want to first deal with en- hand, would not only provide less relief but cast their votes, as I did, to keep suring the financial safety of Social to the 42% of couples who currently this tax $1.10. It is, nevertheless, the Security before dealing with other ad- pay a penalty, but would also provide a reality that this taxation upon ciga- mittedly important tax objectives. windfall to the 51% of married couples rettes could be the most regressive tax Specifically, the Gramm amendment who currently receive a bonus (on aver- ever passed in American history. This potentially would remove $90 to $125 age of $1,380 per couple) under our tax tax burden is falling disproportionately billion worth of Federal revenues that code. In addition, the Democratic al- on the working poor and, indeed, on the President has designed to deal with ternative addresses the need to acceler- poor families themselves. the future security of Social Security, ate the health insurance deduction for It has been noted that the total tax specifically for the baby boom genera- the self employed in an manner that is burden of families who earn under tion. sensible and sound. $10,000 a year would increase by 40 per- I think Senator DASCHLE has a better Overall, the Democratic alternative cent as a result of this tobacco tax. In- idea. He offers an alternative which al- is a more thorough, more targeted, and deed, three-quarters of the tax would lows this Congress to remain focused more sound proposal, and in any event, be paid by families who earn under on securing Social Security for the it is better tax policy. $50,000 per year. This would add a tax next generation while dealing with this I do not believe that it is wise to try burden to an American population that admittedly high tax burden and the un- to solve one problem by creating an- is already excessively taxed. intended consequence of regressivity of other, and I believe that the Demo- I understand that it is President the tobacco tax. cratic alternative avoids that pitfall, Clinton’s priority that a new Federal First, Senator DASCHLE would ease whereas the Gramm amendment does surplus be used primarily to deal with the tax burden on American families S6030 CONGRESSIONAL RECORD — SENATE June 10, 1998 by providing full deductibility for Second, before this Congress adjourns to outline the possible components, be- health insurance premiums for the self- this year, I hope the Congress will re- yond the tobacco legislation, of broad- employed. No issue could be more im- turn to the issue of capital gains sim- er tax relief for the American families. portant for people starting their own plification. I have joined with Senator Mr. President, I yield the floor and businesses, for middle-income families, MACK and Senator BREAUX to encour- suggest the absence of a quorum. than dealing with this full deductibil- age that savings and investment in- The PRESIDING OFFICER (Mr. ity of health insurance. come be restored to a 12-month holding SANTORUM). The clerk will call the roll. Second, it maintains the integrity of period in order to avail ourselves of the The legislative clerk proceeded to the tobacco bill and still protects So- lower capital gains tax rate that was call the roll. cial Security. So the programs now en- instituted by this Congress on an ear- Mr. GRAMM. Mr. President, I ask visioned in the tobacco bill would re- lier date. unanimous consent that the order for main—dealing with public health, to- Third, return again to the issue of es- the quorum call be rescinded. bacco farmers, reimbursement to the tate taxes by building on the $1 million The PRESIDING OFFICER. Without States—while at the same time allow- exemption from the estate tax in last objection, it is so ordered. ing us to provide this tax relief. year’s tax bill by slashing the estate AMENDMENT NO. 2686, AS MODIFIED The difference, of course, between tax rate by 25 percent. We made real Mr. GRAMM. Mr. President, I send a Senator DASCHLE’s proposal and Sen- progress last year by raising the ex- modification of my amendment to the ator GRAMM’s proposal is that Senator emption to a $1 million, but the Fed- desk. GRAMM did not simply deal with the eral tax rate and the State tax remain The PRESIDING OFFICER. The marriage penalty—because only 40 per- confiscatory at an unbelievable 55 per- amendment is so modified. cent of all married couples are paying cent. The amendment (No. 2686), as modi- a marriage penalty, he was providing Fourth, and finally, I hope this Con- fied, is as follows: tax relief beyond this and thereby gress, before concluding its work this At the end of the amendment, insert: causing this financial strain. The alter- year on the Federal Tax Code, will re- SEC. ll. ELIMINATION OF MARRIAGE PENALTY. native offered by the Senator from turn to the incredibly poor savings (a) IN GENERAL.—Part VII of subchapter B South Dakota, Senator DASCHLE, deals rates in this Nation. The United States of chapter 1 of the Internal Revenue Code of simply with those families who are ac- now suffers from the lowest savings 1986 (relating to additional itemized deduc- tions for individuals) is amended by redesig- tually paying the marriage penalty and rate in nearly 60 years. I believe this thereby allows us to do so in a more re- nating section 222 as section 223 and by in- Senate should exempt the first $500 in serting after section 221 the following new sponsible fashion. interest from taxation, ensuring that section: This, I believe, is the better alter- any family in America that saves ‘‘SEC. 222. DEDUCTION FOR MARRIED COUPLES native, but I hope the Senate does not $10,000, whether in equity or bonds or TO ELIMINATE THE MARRIAGE PEN- simply deal this year with the question savings accounts, would not pay taxes ALTY. of the tax burden on the American peo- on that first $10,000. Nothing would do ‘‘(a) IN GENERAL.—In the case of a joint re- turn under section 6013 for the taxable year, ple by only addressing the question of more for Americans to prepare for the marriage tax penalty. That will there shall be allowed as a deduction an their own retirement, to provide secu- amount equal to the applicable percentage of suffice for the tobacco legislation. I rity for American families, than trans- hope and I trust by the time the Senate the excess (if any) of— forming every $10,000 in savings in ‘‘(1) the sum of the amounts determined is finished dealing with tobacco legisla- America by every family instantly into under subparagraphs (B) and (C) of section tion that we have dealt with deduct- a tax-free account. This could be done 63(c)(2) for such taxable year (relating to the ibility for the self-employed of their simply by exempting the first $500 in basic standard deduction for a head of a health insurance and the elimination interest. For those 60 percent of Amer- household and a single individual, respec- of the marriage penalty. tively), over ican families that have no equity, no Before yielding the floor, I hope that ‘‘(2) the amount determined under section the Senate would follow the debate savings other than their house, and 63(c)(2)(A) for such taxable year (relating to that has now begun as a consequence of live in the dangerous position of pay- the basic standard deduction for a joint re- the important analysis offered by the check-to-paycheck, this, for the first turn). time, would provide a real incentive for ‘‘(b) LIMITATION BASED ON MODIFIED AD- RAMM Senator from Texas, Senator G , JUSTED GROSS INCOME.— on both the overall national tax burden those families to save money. Mr. President, my purpose today pri- ‘‘(1) IN GENERAL.—No deduction shall be al- and its regressivity by dealing with marily was to draw attention to the lowed under subsection (a) if the modified other tax issues in the remainder of adjusted gross income of the taxpayer for the worthwhile objective of providing some this session. taxable year exceeds $50,000. First, if not in this legislation, then tax relief in the tobacco legislation for ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— before this session adjourns, the Senate those families, primarily of low and For purposes of this subsection, the term should deal with the fact that there are moderate means, who will dispropor- ‘modified adjusted gross income’ means ad- too many Americans of modest means tionately be shouldering this burden of justed gross income determined— increased tobacco taxes. But I wanted ‘‘(A) after application of sections 86, 219, who are finding themselves in the high- and 469, and est tax bracket. Today, a single indi- to take advantage of the opportunity both to demonstrate the relative ad- ‘‘(B) without regard to sections 135, 137, vidual is paying a 28 percent Federal and 911 or the deduction allowable under this income tax with a salary of $25,300, and vantage of Senator DASCHLE’s proposal, section. a married couple with only $42,350 in to provide this tax relief within the to- ‘‘(3) COST-OF-LIVING ADJUSTMENT.—In the income is paying a Federal tax of 28 bacco bill, thereby not jeopardizing the case of any taxable year beginning in a cal- percent in income taxes. Therefore, we revenues available to deal with provid- endar year after 2007, the $50,000 amount are applying the highest rate to people ing some safety for Social Security, under paragraph (1) shall be increased by an of genuinely modest means. but also to point out to the Senate amount equal to such dollar amount multi- I believe we would make a real con- that, beyond dealing with the tax bur- plied by the cost-of-living adjustment deter- den of families because of the tobacco mined under section 1(f)(3) for the calendar tribution to tax fairness in the Senate year in which the taxable year begins, except in this year if the 15 percent bracket legislation and thereby providing relief that subparagraph (B) thereof shall be ap- could be expanded to $35,000 for individ- in the marriage penalty and the self- plied by substituting ‘calendar year 2008’ for uals and $70,000 for married couples. employment full deductibility on ‘calendar year 1992’. If any amount as ad- This would move more than 10 million health insurance, the Senate should be justed under this paragraph is not a multiple Americans from the 28 percent tax setting its sights on other areas as well of $5,000, such amount shall be rounded to bracket to the 15 percent tax bracket in the remainder of this year—an en- the next lowest multiple of $5,000. and genuinely ensure that middle-in- couragement in savings, general in- ‘‘(c) APPLICABLE PERCENTAGE.—For pur- come tax relief for middle-income fam- poses of this section, the applicable percent- come people are able to take advantage age shall be— of a lower 15 percent bracket. No single ilies, and on the inheritance tax. The ‘‘(1) 25 percent in the case of taxable years proposal would grant tax relief on a Senate has a larger obligation of easing beginning in 1999, broader, more comprehensive basis to the tax burden, and I believe the debate ‘‘(2) 30 percent in the case of taxable years middle-income Americans. that has begun in the Senate has begun beginning in 2000, 2001, and 2002, June 10, 1998 CONGRESSIONAL RECORD — SENATE S6031 ‘‘(3) 40 percent in the case of taxable years Mr. KERRY. Mr. President, the pend- AMENDMENT NO. 2688 TO AMENDMENT NO. 2437 beginning in 2003, 2004, and 2005, ing business, I believe, is the Gramm (Purpose: To provide a deduction for two- ‘‘(4) 50 percent in the case of taxable years amendment; is that correct? earner married couples, to allow self-em- beginning in 2006, The PRESIDING OFFICER. That is ployed individuals a 100-percent deduction ‘‘(5) 60 percent in the case of taxable years for health insurance costs, and for other beginning in 2007, and correct. purposes) ‘‘(6) 100 percent in the case of taxable years Mr. KERRY. Mr. President, I move to Mr. DASCHLE. Mr. President, I send beginning in 2008 and thereafter.’’ table the Gramm amendment, and I an amendment to the desk and ask for (b) DEDUCTION TO BE ABOVE-THE-LINE.— ask for the yeas and nays. Section 62(a) of the Internal Revenue Code of its immediate consideration. 1986 (defining adjusted gross income) is The PRESIDING OFFICER. Is there a The PRESIDING OFFICER. The amended by adding after paragraph (17) the sufficient second? clerk will report. following new paragraph: There appears to be a sufficient sec- The assistant legislative clerk read ‘‘(18) DEDUCTION FOR MARRIED COUPLES.— ond. as follows: The deduction allowed by section 222.’’ The yeas and nays were ordered. The Senator from South Dakota [Mr. (c) EARNED INCOME CREDIT PHASEOUT TO The PRESIDING OFFICER. The DASCHLE] proposes an amendment numbered REFLECT DEDUCTION.—Section 32(c)(2) of the 2688 to amendment No. 2437. Internal Revenue Code of 1986 (defining question is on agreeing to the motion earned income) is amended by adding at the to lay on the table the amendment No. Mr. DASCHLE. Mr. President, I ask end the following new subparagraph: 2686, as modified. The yeas and nays unanimous consent that reading of the ‘‘(C) MARRIAGE PENALTY REDUCTION.—Sole- have been ordered. The clerk will call amendment be dispensed with. ly for purposes of applying subsection the roll. The PRESIDING OFFICER. Without (a)(2)(B), earned income for any taxable year objection, it is so ordered. shall be reduced by an amount equal to the The legislative clerk called the roll. The amendment is as follows: amount of the deduction allowed to the tax- Mr. NICKLES. I announce that the At the end of the amendment add the fol- payer for such taxable year under section Senator from Pennsylvania (Mr. SPEC- lowing: 222.’’ TER) is absent because of illness. The provisons of Senate Amendment No. (d) FULL DEDUCTION FOR HEALTH INSURANCE Mr. FORD. I announce that the Sen- 2686 are null and void. FOR SELF-EMPLOYEDS.—The table contained TITLE ll—TAX BENEFITS FOR MARRIED in section 162(l)(1)(B) is amended— ator from Delaware (Mr. BIDEN) is nec- essarily absent. COUPLES AND SELF-EMPLOYED INDI- (1) by striking ‘‘and 1999’’, VIDUALS (2) by striking the items relating to years The result was announced—yeas 48, ll 1998 through 2006, and SEC. 01. DEDUCTION FOR TWO-EARNER MAR- nays 50, as follows: RIED COUPLES. (3) by striking ‘‘2007 and thereafter’’ and (a) IN GENERAL.—Part VII of subchapter B inserting ‘‘1999 and thereafter’’. [Rollcall Vote No. 154 Leg.] of chapter 1 of the Internal Revenue Code of (e) CLERICAL AMENDMENT.—The table of YEAS—48 sections for part VII of subchapter B of chap- 1986 (relating to additional itemized deduc- Akaka Feingold Levin tions for individuals) is amended by redesig- ter 1 of such Code is amended by striking the Baucus Feinstein Lieberman item relating to section 222 and inserting the nating section 222 as section 223 and by in- Bingaman Ford Mack serting after section 221 the following new following new items: Boxer Glenn Mikulski Breaux Graham Moseley-Braun section: ‘‘Sec. 222. Deduction for married couples to Bryan Harkin Moynihan ‘‘SEC. 222. DEDUCTION FOR MARRIED COUPLES eliminate the marriage penalty. Bumpers Inouye Murray TO ELIMINATE THE MARRIAGE PEN- ‘‘Sec. 223. Cross reference.’’ Byrd Jeffords Reed ALTY. Chafee Johnson Reid ‘‘(a) IN GENERAL.—In the case of a joint re- (f) REDUCTION IN TRANSFERS TO NATIONAL Cleland Kennedy Robb turn under section 6013 for the taxable year, TOBACCO TRUST FUND.— Collins Kerrey Rockefeller there shall be allowed as a deduction an (1) IN GENERAL.—Except as provided in Conrad Kerry Sarbanes amount equal to the applicable percentage of paragraph (2) and notwithstanding any other Daschle Kohl Snowe the qualified earned income of the spouse provision of this Act, the amount credited to Dodd Landrieu Torricelli with the lower qualified earned income for the National Tobacco Trust Fund under sec- Dorgan Lautenberg Wellstone Durbin Leahy Wyden the taxable year. tion 401(b) of this Act for any fiscal year ‘‘(b) APPLICABLE PERCENTAGE.—For pur- shall be reduced by the amount of the de- NAYS—50 poses of this section— crease in Federal revenues for such fiscal Abraham Frist McCain ‘‘(1) IN GENERAL.—The term ‘applicable per- year which the Secretary of the Treasury es- Allard Gorton McConnell centage’ means 20 percent, reduced by 2 per- timates will result from the amendments Ashcroft Gramm Murkowski centage points for each $1,000 (or fraction made by this title. The Secretary shall in- Bennett Grams Nickles thereof) by which the taxpayer’s modified crease or decrease the amount of any reduc- Bond Grassley Roberts Brownback Gregg Roth adjusted gross income for the taxable year tion under this section to reflect any incor- exceeds $50,000. rect estimate for any preceding fiscal year. Burns Hagel Santorum Campbell Hatch Sessions ‘‘(2) TRANSITION RULE FOR 1999 AND 2000.—In (2) LIMITATION ON REDUCTION AFTER FISCAL Coats Helms Shelby the case of taxable years beginning in 1999 YEAR 2007.— Cochran Hollings Smith (NH) and 2000, paragraph (1) shall be applied by (A) IN GENERAL.—Except as provided in Coverdell Hutchinson Smith (OR) substituting ‘10 percent’ for ‘20 percent’ and subparagraph (B), with respect to any fiscal Craig Hutchison Stevens ‘1 percentage point’ for ‘2 percentage points’. year after fiscal year 2007, the reduction de- D’Amato Inhofe Thomas DeWine Kempthorne Thompson ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— termined under paragraph (1) shall not ex- For purposes of this subsection, the term ceed 33 percent of the total amount credited Domenici Kyl Thurmond Enzi Lott Warner ‘modified adjusted gross income’ means ad- to the National Tobacco Trust Fund for such Faircloth Lugar justed gross income determined— fiscal year. ‘‘(A) after application of sections 86, 219, PECIAL RULE.—If in any fiscal year the (B) S NOT VOTING—2 and 469, and youth smoking reduction goals under section Biden Specter ‘‘(B) without regard to sections 135, 137, 203 are attained, the limitation under sub- and 911 or the deduction allowable under this paragraph (A) shall not apply. The motion to lay on the table the section. (g) EFFECTIVE DATE.—The amendments amendment (No. 2686), as modified, was ‘‘(4) COST-OF-LIVING ADJUSTMENT.—In the made by this section shall apply to taxable rejected. case of any taxable year beginning in a cal- years beginning after December 31, 1998. Mr. GRAMM. Mr. President, I move endar year after 2002, the $50,000 amount Mr. GRAMM. I suggest the absence of to reconsider the vote. under paragraph (1) shall be increased by an a quorum. Mr. LOTT. I move to lay that motion amount equal to such dollar amount multi- The PRESIDING OFFICER. The plied by the cost-of-living adjustment deter- on the table. clerk will call the roll. mined under section 1(f)(3) for the calendar The legislative clerk proceeded to The motion to lay on the table was year in which the taxable year begins, except call the roll. agreed to. that subparagraph (B) thereof shall be ap- Mr. KERRY. Mr. President, I ask The PRESIDING OFFICER. The plied by substituting ‘calendar year 2002’ for question is on agreeing to amendment ‘calendar year 1992’. If any amount as ad- unanimous consent that the order for justed under this paragraph is not a multiple the quorum call be rescinded. No. 2686, as modified. of $2,000, such amount shall be rounded to The PRESIDING OFFICER. Without The amendment (No. 2686), as modi- the next lowest multiple of $2,000. objection, it is so ordered. fied, was agreed to. ‘‘(c) QUALIFIED EARNED INCOME DEFINED.— S6032 CONGRESSIONAL RECORD — SENATE June 10, 1998 ‘‘(1) IN GENERAL.—For purposes of this sec- (1) the amount credited to the National To- penalized by providing a 20% deduction tion, the term ‘qualified earned income’ bacco Trust Fund under section 401(b) of this against the income of the lesser-earn- means an amount equal to the excess of— Act for any fiscal year shall be reduced by ing spouse, phased out between $50,000 ‘‘(A) the earned income of the spouse for the amount of the decrease in Federal reve- and $60,000 of family income. If the Re- the taxable year, over nues for such fiscal year which the Secretary ‘‘(B) an amount equal to the sum of the de- of the Treasury estimates will result from publicans were genuinely interested in ductions described in paragraphs (1), (2), (7), the amendments made by this title, and the marriage penalty relief problem as and (15) of section 62 to the extent such de- (2) for purposes of allocating amounts to Senator GRAMM and others have pro- ductions are properly allocable to or charge- accounts under section 451 of this Act, the claimed, they would vote for the Demo- able against earned income described in sub- reduction under paragraph (1) shall be treat- cratic amendment. It would provide a paragraph (A). ed as having been made proportionately from bigger cut in the marriage penalty for The amount of qualified earned income shall the amounts described in paragraphs (1), (2), most couples than the Gramm amend- be determined without regard to any com- and (3) of section 401(b) of this Act. ment over the next 10 years. munity property laws.’’ The Secretary shall increase or decrease the Let me give a couple of examples. A ‘‘(2) EARNED INCOME.—For purposes of para- amount of any reduction under this section couple making $35,000, with income graph (1), the term ‘earned income’ means to reflect any incorrect estimate for any pre- income which is earned income within the ceding fiscal year. split $20,000 and $15,000 between the two meaning of section 911(d)(2) or 401(c)(2)(C), Mr. DASCHLE. Mr. President, I want spouses, would see the following cir- except that— to explain this particular amendment cumstances if this amendment were to ‘‘(A) such term shall not include any because I believe it is very important pass. In the year 2002, under Gramm amount— that everyone understand the jux- the couple would receive an average ‘‘(i) not includible in gross income, additional income of about $1,000. By ‘‘(ii) received as a pension or annuity, taposition of the Democratic amend- ‘‘(iii) paid or distributed out of an individ- ment and the so-called Gramm amend- comparison, under our 20-percent sec- ual retirement plan (within the meaning of ment. ond earner deduction alternative, the section 7701(a)(37)), A vote for the Gramm amendment couple would receive an additional re- ‘‘(iv) received as deferred compensation, or was a vote either to take about $120 duction of $3,000, that is, 20 percent of ‘‘(v) received for services performed by an billion of budget surpluses away from $15,000. individual in the employ of his spouse (with- our effort to shore up Social Security Mr. President, that represents about in the meaning of section 3121(b)(3)(A)), and or to drain 80 percent of the money out three times as large a tax deduction ‘‘(B) section 911(d)(2)(B) shall be applied of the tobacco trust fund, money that and would provide nearly three times without regard to the phrase ‘not in excess of 30 percent of his share of net profits of would otherwise be going to States’ as much tax relief—three times more such trade or business’.’’ antismoking efforts, medical research tax relief under the Democratic amend- (b) DEDUCTION TO BE ABOVE-THE-LINE.— and farmers. That is the choice pre- ment than under the so-called Gramm Section 62(a) of the Internal Revenue Code of sented by the Gramm amendment from amendment. Next, take a couple mak- 1986 (defining adjusted gross income) is 2008 through 2022. ing $50,000, split $25,000 and $25,000 be- amended by adding after paragraph (17) the That was the problem we had with tween the two spouses. Again, under following new paragraph: the Gramm amendment. In the out the Gramm amendment the couple ‘‘(18) DEDUCTION FOR TWO-EARNER MARRIED COUPLES.—The deduction allowed by section years, after 2008, it either took so much would receive an average additional de- 222.’’ money out of Social Security and out duction of about $1,000 in 2002. By con- (c) EARNED INCOME CREDIT PHASEOUT TO of the surplus, or it took 80 percent of trast, our amendment would provide an REFLECT DEDUCTION.—Section 32(c)(2) of the the tobacco money. We were not satis- extra $5,000 deduction, representing Internal Revenue Code of 1986 (defining fied with this choice. We were not sup- five times the amount of relief as under earned income) is amended by adding at the portive of, first, the overall amount of end the following new subparagraph: the Gramm amendment. So because we target our benefit to ‘‘(C) MARRIAGE PENALTY REDUCTION.—Sole- money to be taken, and, secondly, the ly for purposes of applying subsection pots from which it was to be taken. those who are actually penalized by the (a)(2)(B), earned income for any taxable year That is only the first problem—where penalty rather than spread it across shall be reduced by an amount equal to the the money to fund the tax cut would be those who now enjoy a tax bonus for amount of the deduction allowed to the tax- drawn from in the out years. The sec- being married, we are able to deal with payer for such taxable year under section ond problem is that, in the first ten the penalty in a far more consequential 222.’’ years, the revised amendment costs 50 way over the next ten years. (d) CLERICAL AMENDMENT.—The table of sections for part VII of subchapter B of chap- percent more than the Democratic al- To recap, the Gramm amendment ter 1 of such Code is amended by striking the ternative; that is, $46 billion versus costs 50 percent more over the first 10 item relating to section 222 and inserting the about $31 billion. But, here is the years than the Democratic alternative following new items: catch: it actually delivers far less mar- and gives far less marriage penalty re- ‘‘Sec. 222. Deduction for married couples to riage penalty tax relief. So while it lief during this period. It makes more eliminate the marriage penalty. costs more, it does far less with regard sense to redirect the additional $15 bil- ‘‘Sec. 223. Cross reference.’’ to the marriage penalty itself. The rea- lion that Senator GRAMM spends on (e) EFFECTIVE DATE.—The amendments son for that is about 60 percent of the bigger marriage bonuses to the original made by this section shall apply to taxable Republican tax cut goes to couples who purposes of this bill—to public health, years beginning after December 31, 1998. have a marriage bonus in the sense to research, to state programs, and to SEC. ll02. DEDUCTION FOR HEALTH INSUR- that they pay less if they are married farmers. ANCE COSTS FOR SELF-EMPLOYED than if they filed single returns. That in essence is the difference be- INDIVIDUALS. Keep in mind that today about 52 tween our two approaches. Let’s spend (a) IN GENERAL.—Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 is percent of those who are married get a and invest those resources on the amended to read as follows: marriage bonus. There is actually an things that this bill is designed to do. ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case incentive built into the Tax Code to be Let’s do as Senator GRAMM suggests, of an individual who is an employee within married. The other 48 percent incur a focus on the problem he has described, the meaning of section 401(c)(1), there shall marriage penalty. Sixty percent of the that is, the marriage penalty, and try be allowed as a deduction under this section Gramm amendment goes to those who to deal with it as effectively as we can. an amount equal to 100 percent (75 percent in By following that counsel, by taking the case of taxable years beginning in 1999 have a marriage bonus. So, in addition and 2000) of the amount paid during the tax- to the current marriage bonus, they that approach, we should pass the able year for insurance which constitutes will get a Gramm bonus. In our view, Democratic amendment, we should ul- medical care for the taxpayer, his spouse, given the fact that this additional timately accept this compromise and and dependents.’’ bonus costs so much and comes from the balance that it reflects, a balance (b) EFFECTIVE DATE.—The amendments either Social Security or tobacco, the between investments in public health made by this section shall apply to taxable additional Gramm bonus does not and tax reductions. This is a prudent years beginning after December 31, 1998. make a lot of sense. balance that recognizes the importance SEC. ll03. REDUCTION IN TRANSFERS TO NA- TIONAL TOBACCO TRUST FUND. The Democratic alternative, by con- of this tobacco legislation as it was Notwithstanding any other provision of trast, focuses about 90 percent of its originally intended. this Act— tax cut on families who are actually Mr. President, I yield the floor. June 10, 1998 CONGRESSIONAL RECORD — SENATE S6033 Mr. LOTT. Mr. President, I move to The PRESIDING OFFICER. Without THE 50TH ANNIVERSARY OF table the amendment and ask for the objection, it is so ordered. MCCARRAN INTERNATIONAL AIR- yeas and nays. PORT The PRESIDING OFFICER. Is there a f Mr. BRYAN. Mr. President. I rise sufficient second? today to recognize a milestone in Ne- There is a sufficient second. THE 35TH ANNIVERSARY OF THE vada history. This weekend, Nevadans The yeas and nays were ordered. EQUAL PAY ACT will celebrate the 50th anniversary of The PRESIDING OFFICER. The Mr. DASCHLE. Mr. President, 35 McCarran International Airport and on question is on agreeing to the motion. Monday the opening of the new ‘‘D’’ The clerk will call the roll. years ago, President Kennedy took the bold first step to secure equal pay for gates. The assistant legislative clerk called Seventy-eight years ago, in 1920, the roll. women. Although there has been much progress since 1963, women continue to pilot Randall Henderson landed his Mr. NICKLES. I announce that the plane on a makeshift dirt runway Senator from Pennsylvania (Mr. SPEC- earn less than men. That is why we mut take action to improve and marking Las Vegas’ first flight. I am TER) is absent because of illness. sure that Mr. Henderson had no idea Mr. FORD. I announce that the Sen- strengthen President Kennedy’s land- mark law and ensure that America’s that some 78 years later the McCarran ator from Delaware (Mr. BIDEN) is nec- International Airport would be one of essarily absent. working women and families are paid the wages they deserve. the fastest growing airports in the The PRESIDING OFFICER. Are there country. any other Senators in the Chamber de- In 1963, President Kennedy signed the That runway was later used by such siring to vote? Equal Pay Act prohibiting employers famous people as Amelia Earhart, Clar- The result was announced—yeas 55, from paying women less than men for ence Prest, and Emery Rogers and nays 43, as follows: the same job. Knowing that the legisla- came to be named Rockwell Field. tion was merely a first step in the [Rollcall Vote No. 155 Leg.] Rockwell Field was sold in 1929. For- right direction, President Kennedy YEAS—55 tunately, P.A. ‘‘Pop’’ Simon bought noted that ‘‘much remains to be done Abraham Feingold McCain the land northeast of Las Vegas, the to achieve full equality of economic op- Allard Frist McConnell site of today’s Nellis Air Force Base, Ashcroft Gorton Murkowski portunity.’’ and built the Las Vegas Airport. It was Bennett Gramm Nickles While the Equal Pay Act prohibited Bond Grams Roberts later named Western Air Express Field. Brownback Grassley Roth discrimination against women in terms In 1948, Clark County purchased an ex- Burns Gregg Santorum of wages, substantial pay disparities isting airfield on Las Vegas Boulevard Campbell Hagel Sessions continue to exist. Women still earn, on Chafee Hatch Shelby South and established the Clark Coun- Coats Helms Smith (NH) average, only 74 cents to a man’s dol- ty Public Airport. Cochran Hutchinson Smith (OR) lar. That year, the airport was renamed Collins Hutchison Snowe That’s why fair pay continues to be a Coverdell Inhofe Stevens McCarran Field, after Nevada’s senior Craig Jeffords Thomas major issue for American women and Senator, Senator Pat McCarran, who D’Amato Kempthorne Thompson working families. In fact, the dramatic authored the Civil Aeronautics Act and DeWine Kyl Thurmond increase in the number of women in the Domenici Lott Warner played a major role in the development Enzi Lugar work force and the number of families of aviation not only in Nevada but in Faircloth Mack who depend on women’s earnings make the country. McCarran Airport was at NAYS—43 fair pay a matter of justice and neces- that time already servicing 12 flights a sity now more than ever. My state of Akaka Ford Lieberman day, by four airlines. Later, the growth Baucus Glenn Mikulski South Dakota has the highest percent- of Las Vegas necessitated the move of Bingaman Graham Moseley-Braun age in the nation of working mothers the airport terminal from the Las Boxer Harkin Moynihan with children under the age of 6. These Vegas Boulevard South location to Breaux Hollings Murray families need and deserve both parents Bryan Inouye Reed Paradise Road, and the present Bumpers Johnson Reid to be paid fairly for an honest day’s McCarran Field Terminal was opened Byrd Kennedy Robb work. Now is the time to take another in 1963. At this time the airport was Cleland Kerrey Rockefeller step toward fair pay and equal treat- Conrad Kerry Sarbanes serving nearly 1.5 million passengers. Daschle Kohl Torricelli ment for all people. Three short years later, the annual Dodd Landrieu Wellstone Last year, I introduced the Paycheck passenger volume exceeded the two- Dorgan Lautenberg Wyden Fairness Act to address the glaring in- million mark for the first time in the Durbin Leahy Feinstein Levin equities between men’s and women’s airport’s history. By 1978, tourism to earnings. The bill seeks to eliminate the Las Vegas area had increased dra- NOT VOTING—2 the wage gap by beefing up enforce- matically, and the McCarran 2000 mas- Biden Specter ment of the Equal Pay Act, increasing ter plan was established to respond to The motion to lay on the table the penalties for pay discrimination, and the burgeoning tourism industry. This amendment (No. 2688) was agreed to. lifting the gag rule imposed by many plan brought the addition of more ter- PRIVILEGE OF THE FLOOR employees who forbid employees from minals, parking, runways, and pas- Mr. KERRY. Mr. President, I ask discussing their wages with their co- senger assistance facilities. After unanimous consent that the following workers. The bill would also ensure Phase I of the McCarran 2000 project members of my staff: Scott Bunton and that employers who make real strides was completed, the size of the airport Dave Kass, and Gregg Rothschild of the in establishing fair and equal work- quadrupled, adding 16 more gates. Small Business Committee staff be places would be recognized and cele- Later, a fourth runway was added granted privileges of the floor during brated. along with major renovations to the the pendency of the tobacco legisla- As we commemorate the 35th anni- runways and terminals, and in 1994, a tion. versary of the passage of the Equal Pay 1,400-foot extension was added, making The PRESIDING OFFICER. Without Act, I join my colleagues, the Presi- it one of the longest civilian runways objection, it is so ordered. dent, and the Vice President in calling in the United States. f on Congress to schedule a vote on the This Monday, McCarran will cele- Paycheck Fairness Act, and renew our brate the opening of the new ‘‘D’’ MORNING BUSINESS efforts to advance the principles of gates, which will ultimately consist of Ms. COLLINS. Mr. President, I ask equal pay for equal work. Through the 48 gates throughout four concourse unanimous consent there now be a pe- Paycheck Fairness Act, Democrats wings. The completion of the ‘‘D’’ gates riod for the transaction of morning honor and continue President Ken- will enable the airport to serve a total business with Senators permitted to nedy’s legacy of equality for a better of 55 million passengers per year, near- speak for up to 10 minutes each. workplace economy, and country. ly double the current capacity.