January 20, 19 77 CONGRESSIONAL RECORD- SENATE 1859

By Mr. CORMAN (!or himself, Mr. AN­ Armed Forces. law enforcement officials, and, 13 or .15 _of title- 88, COde, or DERSON o! California, Mr. BLOUIN, as authorized by the Secretary of the Treas­ the Railroad Retirement Act of 1937 Will be Mr. DR:INAN, Mr. DUNCAN o! Tennes­ ury; licensed importers. manufacturers, deal­ considered as a. finding of disability under see, Mr. F'LOR:IO, Mr. HAM:ILTON, Mr. ers, and pistol clubs; to the Committee on any of such programs, and for other pur­ HANNAFORD, Mr. HARR:INGTON, Mr. the Judiciary. poses; jointly, to the Committee on Ways HOWARD, Mr. HUGHES, Mr. LEGGETl', H.R. 2279. A bill to incorporate Recovery, and Means, Veterans' Affairs, and Interstate Mr. LENT, Mrs. MEYNER, Mr. MINETA, Inc.; to the Committee on the Judiciary. and Foreign Commerce. ?,41'. MOFFETT, Mr. RoD:INO, Mr. Ros­ H.R. 2280. A bill to prohibit commercial By Mrs. HOLT (for herself, Mr. DICK­ ENTHAL, Mr. RoYBAL, Mr. ST 0ER­ fiights by supersonic aircraft into or over the :INSON, Mr. MARTIN, Mr. RoUSSELOT, MA:IN, and Mr. SCHEUER) : United States until certain findings are made Mr. BAUMAN, Mr. BYRON, Mr. BUR­ H.R. 2270. A bill to amend XVIII of the by the Administrator of the Environmental GENER, Mr. 5:rKON, Mr. DEVINE, Mr. Social Security Act to provide for the cov­ Protection Agency and by the Secretary of WAMPLER, Mr. , Mr. VAN­ erage of certain psychologists' services utl­ Transportation, and for other purposes; to DER JAGT, Mr. RUDD, Mr. JOHN T. der the supplementary medical insurance the Committee on Public Works and Trans­ MYERS): benefits program established by part B of portation. H.J. Res. 188. Joint resolution to amend such title; jointly, to the Committees on H.R. 2281. A bill to amend chapter 1 of 26 the Constitution of the United States to re­ Ways and Means, and Interstate and Foreign U.S.C. to allow a deduction to tenants of quire a balanced Federal budget; to the Commerce. houses or apartments for their proportionate Committee on the Judiciary. By Mr. CORMAN (for himself, Mr. share of the taxes and interest paid by their By Mr. VANDER JAGT: JOHN L. BURTON, and Mr. SISK): landlords; to the Committee on Ways and H.J. Res. 189. Joint resolution proposing H.R. 2271. A bill to amend XVIIl of the Means. an amendment to the Constitution of the · Social Security Act to provide for the cover­ H.R. 2282. A bill to extend to all unmarried United States; to the Committee on the age of certain psychologists' services under individuals the full tax benefits of income Judiciary. the supplementary medical insurance bene­ splitting now enjoyed by married individuals H.J. Res. 190. Joint resolution proposing fits program established by pa.rt B of such filing joint returns; to the Committee on an amendment to the Constitution of the title; jointly, to the Committees on Ways and Ways and Means. United States providing for the election of Means, a.nd Interstate and Foreign Com­ H.R. 2283. A bill to amend title 42, United the President and Vice President; to the Com­ merce. States Code, chapter 7, subchapter II to in­ mittee on the Judiciary. By Mrs. HOLT: crease to $7,500 the amount of outside earn­ By Mr. YATES: H.R. 2272. A blll to amend chapter 44 of ings which (subject to further increases H.J. Res. 191. Joint resolution prescribing title 18 of the United States Code (respecting under the automatic adjustment provisions) model regulations governing implementation firearms) to penalize the use of firearms in is permitted each year without any deduc­ of the provisions of the Social Security Act the commission of any felony and to increase tions from benefits thereunder; to the Com­ relating to the admln.istra tion of social serv­ the penalties in certain related existing pro­ mittee on Ways and Means. ice programs; to the Committee on Ways and visions; to the Committee on the Judiciary. H.R. 2284. A bill to encourage increased Means. H.R. 2273. A bill to a.mend title 38, United use of public transit systems by amending By Mr. DELANEY: States Code, to authorize a. program of assist­ chapter 1 of title 26, United States Code, to H. Res. 151. A resolution to designate ance to States for the establishment, ex­ allow a. credit against individual income January 22 as Ukrainian Independence Day; pansion, improvement, and maintenance of taxes for funds expended by a taxpayer for to the Committee on Post Office and Civil payment of public transit fares from his or veterans cemeteries, and t9 provide for trans­ Service. her residence to his or her place of employ­ portation of bodies to national cemetery; a. ment and from his or her place of employ­ to the Committee on Veterans' Affairs. ment to his or her residence; to the Com­ PRIVATE Bn.L.S AND RESOLUTIONS By Mr. YATES: mittee on Ways and Means. H.R. 2274. A b111 to establish in the De­ H.R. 2285. A bill to amend title 42, United Under clause 1 of rule XXII, private partment of Housing and Urban Develop­ States Code, to include qualified drugs, re­ bills and resolutions were introduced and ment a direct low-interest loan program to quiring a physician's prescription or certifi­ severally referred as follows: assist homeowners and builders in purchas­ cation and approved by a formulary commit­ By Mr. JOHN L. BURTON: ing and installing solar heating (or combined tee, among the items and services covered H.R. 2289. A bill for the relief of Teresa solar heating and cooling) equipment; to under the hospital insurance program; to the Rodriguez De La Torre; to the Committee on the Committee on Banking, Fina.nee and Ur­ Committee on Ways and Means. the Judiciary. ban Affairs. H.R. 2286. A bill to amend title 42, United H.R. 2290. A bill for the relief of Ma Ho H.R. 2275. A bill to establish a. national States Code. chapter 7, subchapter II to re­ Lui; to the Committee on the Judiciary. adoption information exchange system; to duce from 20 to 5 years the length of time a H.R. 2291. A bill for the relief of Carmen the Committee on Education and Labor. divorced woman's marriage to an insured in­ Cecma Blanquicett; to the Committee on the H.R. 2276. A bill to designate the Indiana dividual must have lasted in order for her to Judiciary. Dunes National Lakeshore as the "Paul H. qualify for wife's or widow's benefits on his By Mr. TRIBLE: Douglas National Lakeshore"; to the Com­ wage record; to the Committee on Ways and H.R. 2292. A bill for the relief of Boulos mittee on Interior and Insular Affairs. Means. Stephan; to the Committee on the Judiciary. H.R. 2277. A bill to amend subchapter H.R. 2287. A bill to establish a policy for By Mr. YATES: XVIII, chapter 7, 42 U.S.C. to provide for the the management of oil and natural gas in H.R. 2293. A bill for the relief of Phyllis T. administrative and judicial review of claims the outer Continental Shelf; to protect the Pontrelli; to the Committee on the Judiciary. (involving the amount of benefits payable) marine and coastal environment; to amend which arise under the supplementary med­ the Outer Continental Shelf Lands Act; and ical insurance program; to the Committee for other purposes; jointly, to the Commit­ PETITIONS, ETC. on Interstate and Foreign Commerce. tees on Interior and Insular Affairs, the H.R. 2278. A ·bill to prohibit the importa­ Judiciary, Merchant Marine and Fisheries, Under clause 1 of rule XXII. tion, manufacture, sale, purchase, transfer, and Science and Technology. 33. The SPEAKER presented a petition of receipt, or transportation of handguns, in H.R. 2288. A bill to provide that a finding Dennis L. Nygren, Royal Oak, Mich., relative any manner affecting interstate or foreign of permanent and total disability under title to the Child and Family Services Act; to the commerce, except for or by members of the II or XVI of the Social Security Act, chapter Committee on Ways and Means.

SENATE-Thursday, January 20, 1977

The Senate met at 10: 15 a.m., on the dedication; We pray especially for our God," striving to set forward Thy king­ expiration of the recess, and was called President and for him who will preside dom on Earth. to order by the President pro tempore over this Senate. Give them an under­ We pray in the name of our Redeemer (Mr. EASTLAND). standing of our times, wisdom beyond and Lord. Amen. themselves, and health of mind and body PRAYER sufficient for their tasks. May the truths of the Bible on which their hands are THE JOURNAL The Chaplain, the Reverend Edward placed be the guide of this Republic in L. R. Elson, D.D., offered the following the years to come. And may the oath of Mr. CRANSTON. Mr. President, I ask prayer: ' office taken by two men be for every citi­ unanimous consent that the Journal of God of our Fathers, and our God, make zen a new pledge of allegiance and a the proceedings of Wednesday, Janu­ sacred to all of us this solemn day of fresh dedication to "one nation under ary 19, 1977, be approved. 1860 CONGRESSIONAL RECORD- SENATE January 20, 1977 The PRESIDENT pro tempare. With.. EC-445. A communication from the Presi- Cabinet nominations which are noncon­ out objection, it is so ordered. dent of the United States, transmitting a troversial, and on which rollcall votes are draft of proposed legislation to authorize the not anticipated; and, second, the Mc­ President to implement an agreement with Govern motion to refer Senate Resolu­ MESSAGES FROM THE PRESIDENT the Government of the Republic of Turkey relative to defense cooperation pursuant to tion 18 on Vietnam draft evaders to the Messages from the President of the article III of the North Atlantic Treaty in Judiciary Committee. The Executive Cal­ United States were communicated to the order to resist armed attack in the North endar presently has two nominations. Senate by Mr. Geisler, one of his secre .. Atlantic Treaty area (with accompanying The Senate will meet tomorrow; the taries. papers); to the Committee on Foreign present plan as I understand it is to con­ Relations. vene at noon, though conceivably that EC-446. A communication from the Presi­ could be changed, and vote at 1 p.m. on REPORT ON EMPLOYMENT AND dent of the United States, transmitting an the cloture motion close debate on TRAINING-MESSAGE FROM THE alternative nuclear program ship design, to PRESIDENT-PM 30 cost, and schedule (with accompanying Senate Resolution 18. - papers); to the Committee on Armed Serv- This afternoon the Senate will be con­ The PRESIDENT pro tempore laid ices. sidering those nominations submitted by before the Senate the following message EC-447. A communication from the Presi­ the new President on which no rollcall is from the President of the United States, dent of the United States, transmitting a desired. which was referred to the Committee report on the review of disaster loan author­ Tomorrow the Senate will presumably on Labor and Public Welfare: ities mandated in section 101 of Public Law consider some of the nominations on 94-305 (with an accompanying report) ; to which rollcalls are desired. To the Congress of the United States: the Committee on Banking, Housing and Urban Affairs. I am informed, although I am not I am transmitting to the Congress the absolutely certain of this, that the Senate annual Employment and Training Re­ EC-448. A communication from the Presi­ dent of the United States, transmitting a will not consider until Monday the port of the President, pertaining to em­ draft of proposed legislation to authorize nomination of the nominee for Secretary ployment and training requirements, re­ appropriations for the acquisition, improve­ of Labor. I am not certain that that is sources, and utilization, as required by ment, rehabilitation, and maintenance of the plan, but there have been some in­ sections 705 (a) and 705 (b) of the Com­ the National Park System and National Wild­ dications that that will be the case. prehensive Employment and Training life Refuges, and to increase grants to com­ I have nothing further to say at this Act of 1973, as amended. This Employ­ munities to improve park and recreation facilities (with accompanying papers); to moment. ment and Training Report of the Presi­ The PRESIDENT pro tempore. The dent also includes reports required by the Committee on Commerce and the Com­ mittee on Interior and Insular Affairs. minority leader is recognized. sections 209 and 413 of the same act. GERALD R. FORD. Mr. CRANSTON. Mr. President, I ask THE , January 20, 1977. unanimous consent that a communica­ COMPLIMENTARY STATEMENTS tion from the President of the United States, relative to the National Park Mr. BAKER. Mr. President, I shall not REPORT OF THE CORPORATION FOR System and the National Wildlife Ref­ take very long, but I think it would be PUBLIC BROADCASTING-MES­ uges, be referred jointly to the Committee derelict of me if I did not compliment the distinguished Senator from California SAGE FROM THE PRESIDENT­ on Commerce and the Committee on In­ PM 31 terior and Insular Affairs. for his service today as acting majority leader and for his new position as major- The PRESIDENT pro tempore laid be­ The ACTING PRESIDENT pro tem­ ity whip of the U.S. Senate. · fore the Senate the following message pore. Without objection, it is so ordered. We are delighted to have the opportu­ from the President of the United States, EC-449. A communication from the Presi­ nity to work with such a great Member which was referred to the Committee on dent of the United States, transmitting a Commerce: report of the National Cancer Advisory of this body now, as in the past. Board for calendar year 1975 (with an ac­ Mr. CRANSTON. I thank the Senator To the Congress of the United States: companying report); to the Committee on very much. It is a great pleasure to work I am transmitting to the Congress the Labor and Public Welfare. with him and the Senator from Alaska annual report of the Corporation for EC-450. A communication from the Presi­ and the other leaders in the minority in Public Broadcasting, describing its ac­ dent of the United States, transmitting a the Senate. tivities for the year ending June 30, 1976. draft of proposed legislation to transfer cer­ tain functions from the Secretary of the GERALD R. FORD. Interior to the Secretary of Agriculture COMMENTS ON THE INAUGURATION THE WHITE HOUSE, January 20, 1977. (with accompanying papers); to the Com­ mittee on Interior and Insular Affairs. Mr. BAKER. Mr. President, this is a solemn event that we are about to wit.. Ct>MMUNICATIONS FROM EXECU­ ness and in which we are about to par­ TIVE DEPARTMENTS, ETC. STATEMENT OF ACTING MAJORITY ticipate. The PRESIDENT pro tempore laid LEADER There is no more fundamental and im­ before the Senate the following letters, Mr. CRANSTON. Mr. President, I pressive, indeed, there is no more solemn which were referred as indicated: would like to say that the majority leader constitutional function than the inaugu­ EC-441. A communication from the Presi­ is with the group that will lead the Presi­ ration of a new President and Vice Presi­ dent of the United States transmitting a dent-elect to the inauguration. It is for dent of the United States. draft of proposed legislation entitled "Energy that reason that I am acting in the ca­ In a few moments we will proceed as Independence Authority Act of 1977"; to the pacity of acting majority leader, which one of the two Chambers of one of the Committee on Interior and Insular Affairs. is a great thrill for me on this great day three coordinate branches of the Gov­ EC-442. A communication from the Presi­ ernment to the inaugural platform where dent of the United States, transmitting the for our country when we join in the pass· ing of· leadership to the President-elect, in the presence of all the principal of­ 16th annual report of the U.S. ficials of the three departments, the and Disarmament Agency (with an accom­ , of . panying report) ; to the Committee on For­ oath of office will be administered and eign Relations. the power of the executive department EC-443. A communication from the Pres­ ORDER OF PROCEDURE TODAY will pass by orderly transition to new ident of the United States, transmitting an Mr. CRANSTON. Mr. President, I have hands. alternative nuclear program, ship design We will also see the induction of a characteristics (with accompanying papers); just a word on what will occur today. It was originally announced that we new President of this body, the Vice to the Committee on Armed Services. President of the United States. EC-444. A communication from the Presi­ would proceed in a body at 10:30 a.m. dent of the United States, informing the It will be more like 10 :50 a.m. before we Those of us on this side of the aisle Senate of his intention to withdraw the gather for that purpose. There will be a will celebrate fully the inauguration of designation of the People's Republic of the quorum call until that point after the our new President. Congo as a beneficiary developing country present proceedings have been concluded. While campaigns are partisan and for purposes of the generalized system of The Senate will reconvene at 4 p.m. to­ nominees are designated by the two preferences; to the Committee on Finance. day to consider, :first, the President's great parties, inaugurations are na- January 20, 1977 CONGRESSIONAL RECORD-SENATE 1861 tional and constitutional events, and we INAUGURATION OF THE PRESIDENT Senator RoBERT c. BYRD. on the Republican side will join with you OF THE UNITED STATES AND THE Representative WRIGHT. on the majority side in fully celebrating VICE PRESIDENT

Idaho for the Paul Revere . Insurance Com­ SCHEDULE OF LIABILITIES vestments and the status of operations at the panies. Home office in Worcester, Massachu­ Notes payable: Piper, Jat!ery, a respective companies; provided, however, setts. brokerage fl.rm. This ls a margin that all of said securities shall be sold no 1970-77--Governor of the State of Idaho. loan secured by 2,000 shares of later than six months from the date hereof. Government experience: Sunshine Mining Co. stock______10, 000 (2) The proceeds of the sale of said securi­ Member of Idaho Senate, 1961-67; 1969-70. Real estate mortgages: Balance pay­ ties shall be reinvested by the Trustee, in its Governor of the State of Idaho from Janu- able to Floyd Loomis, Cascade, isole discretion and Without consultation ary 4, 1971 to the present. Idaho, under a real estate pur- with or notification to Settlors, in any one President of the Idaho State Land Board 1 chase contract ------7,800 or more of the following: 1971-77. Served on many other boards and Chattel Mortgages, etc.: Automobile (a) certificates of deposits issued by com­ commissions as Governor of Idaho. loan payable to Idaho Bank & mercial banks; Chairman of the Federation of the Rocky Trust Co------1,000 (b) instruments of the United States Mountain States, 1972-73. 1 Chairman of the National Governors' Con­ I own approximately Ys acre of land in Government; ference, 1976-77. Valley County, Idaho, adjacent to the Cas­ (c) well diversified, no load, mutual funds. cade Reservoir. The land was purchased from Published writings: Inaugural Addresses, Article VI 1971 and 1975, published in "Great American Lloyd Loomis and a summer cabin was con­ structed on the site several years ago (value During the existence of this Trust, the Speeches"; other articles in various periodi­ Trustee shall not provide Settlors with any cals in my capacity as Governor. $45,000). A'ITACHMENT 2 listing or accounting of the investments Future employment relationships: held in Trust provided, however, that Trustee 1. Indicate whether you will sever all con­ I wlll divest myself of all mining stocks listed in Attachment 1. The values of these shall provide Settlors annually and at such nections with your present employer, busi­ other times as Settlors may request, the ness firm, association or organization if you securities are currently depressed because of a strike a.t the Sunshine Mine. Conse­ total market value of the Trust assets. Trus­ are confirmed by the Senate. tee shall also provide to an accountant desig­ Yes. quently, I will place these securities in a blind trust with instructions to the Trustee nated by Settlors such information as may 2. As far as can be foreseen, state whether be necessary for the preparation of Settlors' you have any plans after completing govern­ to sell these securities in an orderly way, with sales to be complete no later than six tax returns. ment service to resume employment, affilia­ Article VII tion or practice With your current or any months from the date of my confirmation. previous employer, business firm, association A copy of the Trust ls attached. In extension and not in limitation of the or organization. APPENDIX C powers given by law or other provisions of None. this Trust, Trustee shall have the following Trust agreement powers with respect to the Trust created 3. Has anybody made you a commitment to We, Cecil D. Andrus and Carol M. Andrus, a job after you leave government? hereby and to the Trust property, to ·be ex­ husband and wife of Boise, Ada County, ercised from time to time in the discretion No. Idaho (hereinafter call~ "Settlors"), hereby 4. Do you expect to serve the full term for of the Trustee, without order or license of assign, set over, a.nd transfer unto the Idaho Court and Without the knowledge or consent which you have been appointed? Bank a.nd Trust Company, Boise, Idaho, all Yes. of Settlors: of our interest in and to the marketable (1) To sell, exchange, transfer, convey and Potential conflicts of interest: securities listed on Exhibit A attached hereto 1. Describe any financial ararngements or make contracts concerning the Trust prop­ and incorporated herein, to hold the same erty for such considerations and upon such deferred compensation agreements or other as Trustee in Trust as hereinafter provided. continuing dealings with business associates, terms as the Trustee may determine; to ex­ clients or customers who will be affected by Article I ecute any instruments with regard thereto. policies which you will influence in the po­ Settlors reserve the right at any time or (2) To hold bonds, shares, or other securi­ sition to which you have been nominated. times after six months from the date hereof, ties in bearer form, or in the name of the None. to amend, alter or revoke this trust, in whole Trustee or in the name of a nominee, with­ 2. List any investments, obligations, lia­ or in part, or any provision hereof, by an out indication of any fiduciary capacity. b111ties, or other relationships which might instrument in writing signed by either of (3) To deposit cash in a checking account, involve potential conflicts of interest with the Settlors and delivered to the Trustee savings account or certifications of deposit the position to which you have been nomi­ during the lifetime of such Settlor. in a bank, including the Trustee bank, With­ nated. Article II out indication of any fiduciary capacity. Shares of stock in the various mining com­ During the existence of this Trust, the Trustee shall have custody of all Trust assets. panies listed on attachment 1. Trustee shall pay the net income of the (4) To give general or special proxies or 3. Describe any business relationship, Trust to the Settlors at least as often as powers of an attorney for voting or acting in dealing or financial transaction ( other than quarterly. Upon the death of a Settlor, the respect of shares of securities which may be taxpaying) which you have had during the income thereafter shall be so paid to the discretionary and with power of substitu­ last 10 years with the Federal Government, survivor. tion. whether for yourself or relatives, on behalf Article III ( 5) To employ and pay custodians of Trust of a client, or acting as an agent, that might Upon the termination of this Trust for any property, brokers, agents and attorneys. in any way constitute or result in a possible reason whatsoever, the Trustee shall pay Article VIII conflict of interest With the position to which the then remaining principal and any un­ you have been nominated. The following provisions shall apply to the distributed net income of the Trust, as extent that they are not inconsistent with None. follows: 4. List and describe any lobbying activity a.ny of the preceding articles: (1) To the Settlors jointly, if both Settlors ( 1) Income or principal payable to any during the post 10 years in which you have are then 11 ving; engaged for the purpose of directly or in­ minor or to any other person who in the directly influencing the passage, defeat or (2) If only one Settlor ls then living, then opinion of the Trustee ls incapacitated modification of any legislation at the na­ to such Settlor; through illness, age, or other ca.use may be tional level of government or for the pur­ (3) If neither Settlor is then living, then applied by the Trustee at its discretion for pose of affecting the administration and to the issue of Settlors, then living, per the beneficiary's maintenance, support or execution of national law or public policy. stirpes. education, by direct payment of such bene­ As a part of my duties as Governor of Article IV ficiary's expenses or by payment to such bene­ ficiary's legal guardian. Idaho, I have been extensively involved in This Trust shall terminate, thirty days dealing with legislative matters at all levels after the first of the following events to (2) Whenever distribution is to be made to of Government. occur: designated "issue" on a per stlrpes basis, the 5. Explain how you wm resolve any poten­ property shall be distributed to such persons ( 1) upon revocation of the Trust as pro­ tial conflict of interest that may be disclosed by right of representation and not per capita. by your responses to the above items. vided in Article I hereof; ln Witness Hereof, Cecil D. Andrus and (2) upon the death of Cecil D. Andrus; See attachment 2. Carol M. Andrus, Settlors, have hereunto set (3) at such time as Cecil D. Andrus is no ATrACHMENT 1 their hands and seals, and the Idaho Bank longer Secretary of the Interior. and Trust Company, Ada. County, Boise, Schedule of securities Article V Idaho, in token of its acceptance of the (Value at January 1, 1977] During the existence of this Trust, the Trust hereby created, has hereunto set its Shares of common stock and com­ Trustee shall manage and invest the assets hand and seal, as of this __ day of ------, pany: of this Trust as follows: 1977. Listed: 2,000, Sunshine Mining ___ $23-, 000 (1) The marketable securities listed in CECIL D. ANDRUS, Unlisted: CAROL M. ANDRUS. 6,000, Silver Syndicate______13, 500 Exhibit A attached hereto shall be sold by the Trustee in an orderly manner in such IDAHO BANK AND TRUST COMPANY, BOISE, 25,000 Silver Buckle Mines_____ 2, 250 !DAHO. 40,000, Placer Creek Mining____ 1, 600 a way as to realize the best possible price By----. Investors Diversified Services for such investments taking into account Attest: Mutual Fund ------1, 500 the limited markets for some of such in------. January 20, 1977 CONGRESSIONAL RECORD- SENATE 1869 ExHmIT A-Shares of common stock Mr. JAVITS. Mr. President, I support larly, he is highly regarded as an individ­ Company: the nomination of Michael Blumenthal. ual sensitive to the concerns and needs Sunshine Mining------2, 000 I would not take the Senate's time if I Silver Syndicate______6, 000 of working people. Silver Buckle Mines ______25, 000 did not fully know him but also worked Not only will Mike Blumenthal provide Placer Creek Mining ______40, 000 with him during his work in Europe in an important bridge between interest connection with the European commu­ groups that are sometimes at odds, he CONFLICT OF INTEREST nity and the tariff and trade problems will be a forthright member of the As indicated in Attachment 2 of the in­ which exist there. formation submitted above, Governor An­ Cabinet who commands respect abroad as drus agreed to di vest himself of all mining He brings with him an unusual dimen­ well as at home. The respect that Mr. stocks by placing the securities in a blind sion of experience, skill, and very high Blumenthal commands abroad, largely trust with instructions to the Trustee to standing with the leaders of Europe who on the basis of his role as chief U.S. sell them in an orderly way, with sales to be have negotiated with him. I believe that negotiator at the Kennedy round of completed no later than six months from the his appointment is one of the very fine tariff negotiations in the 1960's, is ex­ date of his confirmation. The committee ac­ appointments that have been made in tremely important because of the im­ cepted the Governor's actions as a method to the course of the history of this office. I portance of international economics and avoid the appearance of any conflict of in­ commend it highly to the Senate. terest, and in view of the uncertain market foreign trade to U.S. foreign policy in the for the securities involved, extended the time Mr. MOYNIHAN. Mr. President, I years ahead. for divestment to nine months. support the nomination of W. Michael Increasingly the issues that confront CONCLUSION Blumenthal. our Nation in its relations with both our The Committee agrees that Governor An­ I had the privilege to serve with him allies and our adversaries are economic drus is qualified in all respects to serve as on a three-man group that negotiated issues. Under those circumstances we Secretary of the Interior and recommends for President Kennedy the long-term could scarcely hope for a more qualified that he be confirmed by the United States cotton textile agreement of 1962. person to serve as Treasury Secretary Senate, if nominated. Mr. Blumenthal is known, properly so, than Mike Blumenthal. Not only has he Mr. McCLURE. Mr. President, I would as a man greatly and wholly committed received both his undergracuate and like to second what the distinguished to the principles of expanding world graduate degrees in international eco­ chairman of the committee has said. trade. Yet, on that occasion he showed nomics, he has directed a major interna­ a most vigorous concern for the jobs of tional corporation. As members know, the nominee is the Among the more difficult tasks that the Governor and has been the Governor of American workers who were in situa­ tions of particular disadvantage and Secretary-designate will face 'Vill be the my State. But beyond that, I have known fulflllment of President Carter's pledge him for a number of years, having been need. He carried out that assignment by President Kennedy with the greatest to achieve thoroughgoing tax reform. As elected to serve in the State legislature President Carter has said, this is an issue at the same time in 1961 and having distinction. One of Mr. Blumenthal's monuments, about which we have talked the most and worked with him. about which we have acted least. I am I was pleased to appear before the we might say, was the Trade Expansion Act of 1962, which has served world hopeful that the Carter administration committee as a witness on his behalf, will finally end the lipservice and pro­ and I certainly support this nomination. trade well and has served this Nation well. vide the action necessary to correct gross I believe it was a fine choice on the part inequities in our tax system, and look to of the President. Mr. JACKSON. Mr. President, I have Secretary-designate Blumenthal to pro­ The PRESIDING OFFICER. The ques­ known W. Michael Blumenthal since he vide key leadership in this regard. tion is, Will the Senate advise and con­ served as President Kennedy's trade ne­ I look forward to Mr. Blumenthal's sent to the nomination of Cecil D. Andrus gotiator. Mr. Blumenthal certainly has tenure as Treasury Secretary with great to be Secretary of the Interior. unique qualifications. He brings to the Treasury Department a background as a optimism, and the sincere conviction that The nomination was confirmed. scholar. He received his Ph. D. in inter­ his selection by President Carter will Mr. ROBERT C. BYRD. Mr. President, national trade at Princeton University. prove to be one of the best, early decisions I ask that the President of the United of the new administration. I am de­ States be immediately notified of the He has been an outstanding and a lighted to advise and consent to Mr. confirmation of the nomination. most effective business leader of the Na­ Blumenthal's confirmation. tion. He has a keen understanding of la­ The PRESIDING OFFICER. The The PRESIDING OFFICER. Without bor-management relations. He has a objection, the President will be notified. question is, Will the Senate advise and keen understanding of economics. I be­ consent to the nomination of W. Michael lieve he will bring to the Treasury a Blumenthal to be Secretary of the Treas­ much needed talent, both in the domes­ ury? SECRETARY OF THE TREASURY tic area of finance-economics and the in­ The nomination was confirmed. ternational side. I think the Nation is Mr. ROBERT C. BYRD. Mr. President, Mr. ROBERT C. BYRD. Mr. President, most fortunate. I ask unanimous consent that the Senate I ask unanimous consent that the Presi­ proceed to the consideration of the Mr. BAYH. Mr. President, I am dent be immediately notified of the con­ nomination of Mr. W. Michael Blumen­ delighted to lend my strong support to firmation of the nomination. thal. of Michigan, to be Secretary of the the confirmation of W. Michael Blumen­ The PRESIDING OFFICER. Without Treasury. thal as Secretary of the Treasury. In objection, it is so ordered. recent years Mike Blumenthal has been The PRESIDING OFFICER. The the chief operating officer and then the nomination will be stated. chief executive officer of the Bendix The legislative clerk read the nomina­ Corp. Because the Bendix Corp. is a SECRETARY OF STATE tion of W. Michael Blumenthal, of Michi­ major corporate constituent in Indiana Mr. ROBERT C. BYRD. Mr. President, gan, to be Secretary of the Treasury. I was fortunate enough to develop an I ask unanimous consent that the Sen­ Mr. LONG. Mr. President, the Com­ acquaintanceship with Mike Blumethal ate proceed to the consideration of the mittee on Finance had the opportunity some years ago. He is a brilliant execu­ nomination of Cyrus R. Vance of New to inte:·rogate Mr. Michael Blumenthal tive. a compassionate human being, a York-of West Virginia-to be Secretary in depth. Almost all members of the respected economist, and a public servant of State. committee were present. Each member of proven skills. The PRESIDING OFFICER. The interrogated him on about threa occa­ The nomination of Secretary-designate Senator may designate the residence of sions, and we were enormously impressed Blumenthal by President Carter is strong the nominee. by Mr. Blumenthal. The Senate has read testimony to the fact there not be the Mr. ROBERT C. BYRD. West Virginia. about his life. It is a modern Horatio traditional tension between the business The PRESIDING OFFICER. The Alger story and an inspiration to all community and those concerned with nomination will be stated. members. providing necessary public services to the The legislative clerk read as follows: The vote of the committee was unani­ American peoi:,le. The Secretary-desig­ The nomination of Cyrus R. Va.nee, o! mous. We recommend that his nomina­ nate has earned a just reputation as a New York and West Virginia, to be Secretary tion be confirmed. businessman of great acumen. Simi- of State. 1870 CONGRESSIONAL RECORD-SENATE January 20, 1977 Mr. SPARKMAN. Mr. President, I do known Cyrus Vance as long as my dis­ his responses indicated that he has a not want to enter into debate as between tinguished colleague from New York has, detailed grasp of every facet of the De­ West Virginia and New York. but it has been my pleasure to have partment of Agriculture and with the I believe the record shows that our known him for two decades. issues which will face the new Secretary. committee voted to confirm the nomina­ is a hard act to fol­ Moreover, Secretary-designate BERG­ tion of Mr. Cyrus R. Vance of New York. low~ but I do not think anyone could have LAND's harmonious relationship with the committee demonstrates the poise and Mr. ROBERT C. BYRD. I withdraw been appointed who would be more per­ fectly suited for the times in which we skill which he can bring to the leader­ my reservation for the moment. ship position in the Department of Agri­ [Laughter. J now live than Cy Vance. The distinguished Senator from Con­ culture. Mr. SPARKMAN. We had extensive necticut

any financial institution which is a member United States) i& amended to read as fol­ The effects o"f Section 1011 will be to un­ of a. Federal home loan bank, or is an in­ lows: dermine each one of these laudable ideals. sured institution a.s defined in section 40l(a) "An individual shall not be allowed, as a American citizens living and working of the National Houslng Act, a.s assets for deduction from his gross income, any de­ a.broad do not have the benefit of many serv­ purposes o'f meeting the liquidity require­ ductions (other than those allowed by sec­ ices available at home that are paid for by ments under section 5A(b) of the Federal tion 151, relating to personal exemptions) taxes. When such services a.re provided by the Home Loan Bank Act (12. U.S.C. 1425a(b)); properly allocable to or chargeable against employer in the form of living allowances, to the Committee on Banking, Housing and amounts excluded from gross income under housing allowances, and educational allow­ Urban Affairs. this subsection.". ances, they are included in the employees' By Mr. LAXALT (for Mr. BARTLETI') : (c) Section 911 of such Code (relating to S. 388. A bill to a.mend the Internal Reve­ calculation of gross income. The exemption earned income from sources without the of 20 thousand dollars from ea.med income nue Code of 1954 with respect to income United States) is amended by striking out earned abroad by U.S. citizens living or re­ subsections (d) l\nd (e) and by redeslgna.ting was a.n attempt to partially compensate for sidlng abroad; to the Committee on Finance. subsection (f) as subsection (d). this inflated calculation of personal income. By Mr. MATSUNAGA: (d) Section 36 of such Code (relating to Concern for equal treatment of taxpayers' S. 389. A bill to amend the Internal Reve­ demands that some attempt be made to real- nue Oode of 1954 to exempt from excise tax credits not allowed to individuals paying op­ tional tax or taking standard deduction) is 1stlcally compensate individuals for cost of certain buses purchased by nonprofit orga­ living a.nd quality of living differentials. nizations or by other persons for exclusive amended by striking out "sections 32" and use In furnishing transportation for State or inserting in lieu thereof "sections 32, 33, ". The Halliburton Services Company of Dun­ local governments or nonprofit organizations; SEC. 2. The amendments made by the first can, Oklahoma, has provided the following to the- Committee on Finance. section of this Act shall apply to taxable information on what they expect the impact S. 390. A bill to amend the Internal Reve­ years beginning after December 31, 1975. of the present law to be. It 1s obvious that nue Code of 1954 to provide that the amount STATEMENT BY SENATOR BARTLETT equity for taxpayers overseas is being ignored of the charitable deduction allowable !or ex­ Today I am introducing legislation that and must be corrected before the tax col• penses incurred in the operation of a highway will correct- one of the most misguided pro­ lection deadline this year. vehicle will be determined in the same man­ visions of the Tax Reform Act of 1976. My The attached computations are based on ner as the business deduction for such ex­ bill will substantially return the treatment the following assumptions: penses; to the Committee on Finance. of individual ea.med income of Americans 1. The employee in the foreign country abroad to what it was prior to October 4, 1976. will incur additional expenses living in the foreign country equal to the allowances paid The Tax Reform Act of 1976 amended to him. STATEMENTS ON INTRODUCED Section 911 (c) of the 1954 Internal Revenue BILLS AND JOINT RESOLUTIONS Code so as to reduce the exclusion for in­ 2. Housing furnished the employee 1s usu­ ally inferior to housing in the United States By Mr. LAXALT (for Mr. BART­ come ea.med abroad by U.S. citizens from 20 thousand dollars to 15 thousand dollars and the rentals paid are greatly in excess of LETT): and modified the computation of that ex­ rentals on comparable housing in U.S. Also S. 388. A bill to amend the Internal clusion in three ways. First, on individual employee sometimes keeps a house in the Revenue Code of 1954 with respect to entitled to the earned income exclusion may U.S., therefore, all rentals paid abroad con­ income earned abroad by U.S. citizens no longer credit or deduct foreign income stitute additional expense to him. taxes paid on excluded income. Second, in­ living or residing abroad; to the Com­ 3. Tuition for dependents paid by or on mittee on Finance. come, derived by individuals beyond the in­ come eligible for the earned income exclusion behalf of the employee is an additional ex­ Mr. LAXALT (for Mr. BARTLETT). Mr. pense, since such schooling is offered free in President, I am today introducing legis­ ls now subject to U.S. tax at the higher rate brackets which would apply U no exclu­ the U.S. lation that will make certain changes in sion had been allowed. Third, income earned 4. Vacation expense is the airfare of an em­ the Tax Reform Act of 1976 with respect abroad which is received outside the coun­ ployee and his famlly usually to a. more de­ to income earned abroad by U.S. citizens try in which earned in order to avoid tax veloped country. living or residing abroad. The bill will in that country 1s ineligible for the earned 5. Based on the above assumptions, the income exclusion. restore the treatment of such income to take home pay of the employee while in the what it was prior to the passage of the My bill returns the exclusion to 20 thou­ foreign country is equal to his base salary 1976 Act. sand dollars and, save for the third modifi­ cation mentioned above, returns the calcula­ plus the overseas dHTerential. The overseas I ask unanimous consent that the text tion of the tax Uab1lity to what it wa.s be­ differential is generally $150 per month in· of the bill as well as the remarks of and for the passage of the Tax Reform Act. crease in pay given an employee to induce materials prepared by the Senator from I find it dista.ste!ul to have to undo some­ him to go a.broad. Oklahoma (Mr. BARTLETT) be printed in thing that should have been done properly COMPARISON OF UNITED STATES INCOME TAX EFFECT ON the RECORD at this time. the first time, but in reviewing the legisla­ CEMENTER rN DUBAI TO CEMENTER IN UNITED STATES There being no objection, the material tive history of this provision, it is obvious to was ordered to be printed in the RECORD, me that what we ended up with is a minced version of a. ha.If-baked idea.. Section 1011 Computation of U.S. tax as follows: of the Tax Reform Act is punitive in its ef­ 8.388 fects on individual Americans abroad and a. If in Be U enacted by the Senate and HO'USe great disservice to American business over­ United If in Increase of Representatives of the United States of seas generally. Unless corrected, its net effect States Dubai in tax America- in Congress assembled, That (a) will be that Americans wm lose Jobs and paragraph (1) of section 911 (c) o! the Inter­ that American companies operating abroad Base salary in United States _____ $11, 260 $11, 260 ·------nal Revenue Code of 1954 (relating to limi­ will be forced to cut back their activities or Overseas differential.______l, 800 1, 800 -----·-- tation on amount o! exclusion) is a.mended increase their product prices. to read as !oilows: Base salary in Dubai______13, 060 13, 060 ··------Quoting from the Senate Finance Com­ Add: "(l) Limitations on amount of exclusion.­ mittee Report Number 94-938. the ostensible The amount excluded from the gross income livin_g allowance .• ----·------·-- 3, 000 ---·---- objectives of the Ta.X Reform Bill of 19'16 Furntt:ure allowance ••••.•.--··-----··-·- 1, 000 -----·-­ of an individual under subsection (a.) for any were: Revaluation of currency allow· taxable year shall not exceed an amount anee. ______---·-·---.--·-- 1, 572 ------which shall be computed on a daily bas1s at "1. To improve the equity of the income Fair market value of housing______12, 000 ------an annual ra~ of- tax at all income levels without interfering Tuition paid ..•• ·------· 3, 000 -·------with equally important goals of economic Vacation paid ••• ------·-·--·---·- 2, 000 ·-·----· " (A) except as provided in subparagraph -~~~~~~~- (B), $20,000 ln the case of an individual who efficiency and growth; To ta I .:ompensation...... 13, 060 35, 632 -··-·--- qualifies under subsection (a), or 2. To slmpUfy many tax provisions, delete Less IRC sec. 911 exc1usion______0 20, 000 ------unnecessary language and encourage tax- -~~~~~~~- "(B) •25,000 In the case of a.n individual Adjusted gross income...... 13, 060 15, 632 ----···· who quallftes under subsection (e.) (1), but payers to use the standard deduction; Less: only with respect to that portion of such 3. To continue !or- the next 12 months the Standard deduction.·------2, 090 ?., 800 ·------taxable year occurring after such 1!1div1dual economfo nilnulus provided in the Tax Re­ Personal exemptions (4)...... 3, 000 3, 000 ---·---- has been a bona fl.de resident of a foreign duction Act of 1975 and extended through Taxable income ••. ------7, 970 9, 832 -·----·- country or countries for an uninterrupted the first half of 1976 by the Revenue Adjust­ Ta:t (based on joint return rates): period of 3 consecutive years.". ment Act of 1975; and Under proposed law______1, 374 1, 783 S409 Under present law (with $15,- (b) The last sentence of subsection (a.) 4. To make improvements in the adminis­ 000 exclusion and higher or section 911 of such Code (relating to tration of the tax laws, particularly to rates>----·-·-····-----··-· 1, 374 4,804 3, 430 earned income from sources \Vlthout the strengthen taxpayers' rights. January 20, 1977 CONGRESSIONAL RECORD-SENATE 1883 COMPUTATION OF UNITED STATES INCOME TAX EFFECT come not taxed In the United States a.re ON DISTRICT MANAGIR IN ABU DHABI AS COMPARED Computation of U.S. tax not allowed as a credit or a deduction against TO DISTRICT MANAGER IN THE UNITED STATES If in If in United States taxes. United Saudi Increase American citizens working abroad do not States Arabia in tax Computation of U.S. tax have the benefit of many services available at home that are paid for bv taxes. As for If in If in Increase Less: the individual businessman overseas, the United Abu in Standard deduction______2, 800 2, 800 ------tax exclusion of $20,000 and $26,000 helps States Dhabi tax Personal exemptions (4)______3, 000 3, 000 ------off'set the additional costs of schooling, hous­ ~~~~~~~~- Taxable income______15, 370 18, 501 ------ing, travel, and other inconveniences. Such Base salary in United States _____ $21, 465 $21, 465 ------Tax (based on joint return rates): Americans overseas do not get the benefits Overseas differentiaL______1, 800 1, 800 ------Under proposed law______3, 103 3, 960 $857 of those things their taxes help pay for in Under present law (with $15,- the United States. Add:Base salary in Abu Dhabi____ 23, 265 23, 265 ------000 exdusion and hieher 8, 455 5, 352 The exclusions in section 911 give some Living allowance______3, 076 ------rates>------3, 103 relief from this situation and represent a Furniture allowance______750 ------measure of Justice for the American citizen Revaluation of currency allow- The present law concerning taxation of ance______1, 572 ------abroad. Because of inflationary trends Fair market value of housing______12, 000 ------Americans abroad is more complex than it throughout the world, any adjustment in Tuition paid______3, 000 ------was, is economically constrictive rather than the exclusions should be up rather than Vacation paid·------2, 000 ------stimulative, and is of doubtful administra­ down. ~~~~~~~~- tive efficiency. In short. this provision of the Total compensation______23, 265 45, 663 ------United States Government employees Less IRC sec. 911 exclusion______O 20, 000 ------Tax Reform Act accomplished none of the abroad remain subject to our income taxes ~~~~~~~~~ announced aims of that a.ct, and is positively on their earnings, but they are not taxed Adjusted gross income______23, 265 25, 663 ------mischievous in its effects upon individuals on fringe benefits such as shelter, cost of Less: and companies alike. Standard deduction______2, 800 2,. 800 -_-_ -_-_ -_-_ -_-_ living, education, travel and other differen­ Personal exemptions (4)______3, 000 3 000 To the extent that the current law forces tial cost payments. On the other hand, cost­ ~~~~~~~...;...~ American companies to forgo planned expan­ of-living allowances are taxable compensa­ Taxable income______17, 465 19, 863 ------sions or to increase their prices, it will hinder Tax (based on joint return rates): tion to employees of private business. Under proPosed law______3, 670 4, 342 $672 international economic . Much of the Armed forces personnel enjoy fa.c111ties on Under present law (with $15,- world is depending upon the United States' foreign bases which provide an environment 000 exclusion and higher economic ability and strength for much of comparable to a base in the States. Civilians rates>------3, 670 9, 068 5, 398 their recovery. The present law will frustrate employed abroad must attempt to create a that expectation as American expertise and comparable cultural environment for their COMPARISON OF UNITED STATES INCOME TAX ON FIELD experience is drawn back to U.S. territory. families on an individual basis. Reduction SUPERVISOR IN QATAR TO FIELD SUPERVISOR IN UNITED An additional mark against the present of the presently excludable portion of salary STATES law ls its retroactive nature, which if allowed earnings would discriminate against non­ to be carried out with this yea.r's tax collec­ government employees. tions will unfairly and unduly burden thou­ In order to operate on an internationaf Computation of U.S. tax sands of America.ns who have not been able basis, American companies must employ some If in to plan for the increased taxes. For all the of our citizens to work In foreign subsidi­ United If in Increase above reasons I urge the earliest possible con­ aries and branches. These American employ­ States Qatar in faJC sideration and passage of my blll. I ask unani­ ees are necessary because local nationals, in mous consent that the text of my bill and the many cases, do not possess the needed skills, BasesalaryinUnitedStates ______$17,400 $17,400 ------following materials which include a sampling experience or familiarity With American busi­ Overseas differentiaL______1, 800 1, 800 ------of the letters I have received from around ness methods. ~~~~~~~~~ the world, as well as editorials and state­ United States citizens representing Ameri­ Base salary in Abu Dhabi___ __ 19, 200 19, 200 ------Add: ments on this problem, be included in the can businesses abroad often have many years Living allowance-______2, 800 ______Congressional Record with my remarks. of experience with the language, law, cus­ Furnitureallowance______750 ------toms, and techniques of the foreign country Revaluation of currency FROM THE STATEMENT OF WALKER WINTER, FOR allowance______1, 350 ------in which they live. The are invaluable and Fair market value of housing ••• __ ------12, 000 --·----_ THE CHAMBER OF COMMERCE OF THE UNITED are as essential to companies operating Tuition paid______3, 000 ------·- STATES, JULY 9, 1975, BEFORE THE HOUSE abroad as American capital. It is absolutely Vacation paid______2, 000 ------·- Col.lD.ll'rl'El!! ON WAYS AND MEANS essential to have American citizens in over­ ~~~~~~~_..;..~ Totalcompensation ______19, 200 41, 100 --·-···- EXEMPTXON OF EARNED INCOME FROM FOREIGN seas positions to manage these investments, Less IRC sec. 911 exclusion ______0 20, 000 ------SOURCES as wen as to train local personnel. A citizen employed a.broad must receive Adjusted gross income •••••• - 19, 200 21, 100 -······- We reaffirm our position that the exclusion Less: in section 911 of the Internal Revenue Code compensation !or special costs which do not Standarddeduction______2,800 2,800 ----·-·- for earned income of citizens who a.re resi­ represent real income. It he is given an al­ Personalexemptions(4). ------3, 000 3, 000 ------dents and/or employed abroad should not be lowance for tuition for his children to attend ~~~~~~~~~ a private English language school, this does Taxableincome ••••••••••••• 13,400 15,300 ------reduced. Under existing tax law, United Tax (based on joint return rates): States citizens, who a.re bona fide. residents not represent any income to the individual, Under proposed law______2, 610 3, 085 475 of foreign countries for at least one full cal­ but the United States will tax such a tuition Under present law (with $15,000 allowance. exclusion and higher rates).. 2, 610 7, 036 4, 426 endar year or who are physically present in foreign countries for 17 out of 18 consecutive As a revenue producing measure, the elimi­ months. may exclude from their federal in­ nation of the exclusion would be largely in­ COMPUTATION OF UNITED STATES INCOME TAX ON AS­ come tax the first $20,000, or in some cases effective. Corporate employers would be SISTANT DISTRICT MANAGERS IN SAUDI ARABIA AS the firijt $26,000, of compensation received obliged to increase salaries or living allow­ COMPARED TO ASSISTANT DISTRICT MANAGERS IN for services performed outside the· United ances of their overseas American employees, UNITED STATES States. thus diminishing corporate tax receipts. The net effect would be to make American busi­ This exclusion has been a part of our tax ness abroad less competitive with other for­ Computation of U.S. tax law since 1926. This issue was fully considered eign business, since other major industrial by both House and Senate in 1962, and the nations generally do not taX' their overseas If in If in present law is a result, with the exception United Saudi Increase businessmen. States Arabia in tax that in 1964 the $35,000 exclusion was re­ Increased costs are already having an ad­ duced to $26,000. The tax benefit has been verse effect on employment by forcing a num­ reduced substantially from an unlimited ex­ Base salary in United States _____ $19, $19, 370 ------ber of international companies to hire for­ :no clusion to the present $20,000 and $26,000 eign executives, not necessarily of the host Overseas differential.______1, 800 1, 800 ------exclusion. Furthermore, the exclusion is llm­ ~~~~~~~~- countries, to replace American executives. It Add:Base salary in Saudi Arabia.. 21, 170 21,.170 ------ited sufficiently to prevent its use as a tu has been estimated. a United States company avoidance device. 3 spends an average of $100,000 during the first ~~v/:ifu~~o~:..C:nce::::-=::::::::::: ' Critics of the exclusion assert that it en­ two yea.rs when it sends a $20,000-a-year man m:::::::: tices Americans, With technical and profes­ Revaluationlowance ______of currency al- ---- 2, 381 _ _. __ _ abroad. sional skills not avallable 1n foreign coun­ The long-range effect of any unfavorable Fair market value in housin&------12, 000 ------tries to work abroad by offering them tax-free change would be to jeopardize our competi­ =:rr:~cC:::::::::::::::::::::::: t ~ :::::::: earnings. Th1s assertion completely over­ tive position abroad at a time when infi.ation ~~~~~~~~~ looks. that fact that the income of these and rising operating costs have made it in­ 21 11 employees may be subjected to fdretgn in­ creasingly difficult to compete in foreign mar­ LessWt :.rrr:ci~s-ioli:::::: ' i ~ ~ ==== come taxes as well as- other foreign taxes. kets. AddlttonaI costs could cut back on Adjusted lfOSS i~--. ·-- 21, 170 24, 301 ------Also, the foreign truces attributable to In- dividends and profits from foreign operations

CXXIII--119-'PA.rt-. ~ .!... 1 1884 CONGRESSIONAL RECORD- SENATE January 20, 1977 which assist in solving our balance-of-pay­ American workers soar. The problem is alize the conditions for U.S. citizens working ments problems. magnified because a company usually has to overseas. [From , Jan. 9, 1977] pay roughly $20,000 to a worker Just to Thank you for your assistance, and con­ TAX LAW: PuNISHING AMERICANS ABROAD finance his living-cost differential and home­ sideration of my views. leave expenses, which Internal Revenue Very truly yours, To the Editor: counts as personal income to a worker. DONALD W. PRESTON. The new Congress and the new Adminis­ Equity is best assessed in examining the tration will have an opportunity to examine after-tax effects. A company that pays P.O. Box 1177, HAMn.ToN 5, BERMUDA, the recent changes in U.S. tax law that affect $40,000 to a domestic employee gives him, American citizens residing abroad. It is the December 2, 1976. say, $30,000 after tax. For that employee to Hon. DEWEY FOLLE'lT BARTLE'lT, general consensus of the American com­ $30,000 be sent abroad and receive after tax Russell Building munity in Brazil that the legislation is either and living allowances, the company will have deliberat'ely punitive or utterly thoughtless. Washington, D.C. to expend $80,000, $90,000, or if he's stationed DEAR Sm: The contents of this letter are to The changes in question, by reducing the in Japan, $100,000. The company's foreign income earned abroad which is exempt from register a complaint as to the construction competitor is able to send in an employee of and passing of the latest Income Tax Bill. U.S. taxation and by greatly raising the ef­ equal sk111 at much less total outlay because fective tax rate on the non exempt income, I am an individual who works overseas for expose Americans residing a.broad to the cer­ the employee does not pay domestic tax on a foreign company, which does not pay to me foreign earnings. The competitor thus tends t:iinty of real double taxation. This is be­ any subsidies as in reference to paying an cause foreign countries, not unnaturally, to win the contracts and get the business. equivalent amount of U.S. taxes. I have to themselves tax income earned by non-citizen So if the taxwrlters are counting on pay my U.S. taxes from my earned salary. residents from economic activity within the Treasury getting more revenue as a result With the new tax Bill, which has been passed, foreign country, sometimes (as in Brazil) at of their "reform," forget it. Treasury will lose it will make it so that I cannot afford to very high rates indeed. revenues on two counts: First, because U.S. continue in my overseas position. By the ac­ foreign earnings will shrink as U.S. com­ Furthermore, Americans living abroad ac­ tion of the new Bill I will be forced to re­ tually receive services-police, fire, s:inita­ panies lose business to foreign competitors. turn to the United States, whereby I will be Second, because the executives, engineers and tion, etc.-from the host nation, whereas placed into the Job market and either I will they receive few if any from the United hardhats will no longer be bringing home be unemployed or I will displace someone States. On top of this, Americans abroad savings that can subsequently be taxed by from a position. often have to pay exorbitant amounts, none Treasury as investxnent income. Is the objective of this Bill to create addi­ of them deductible, for services such as edu­ The degree to which this increased tax tional unemployment? It certainly appears cation which would be provided at govern­ burden prevents the United States from that this is one of the objectives. ment expense in the U.S. This is to be con­ selling goods and services abroad, of course Further, you have made it so that the re­ trasted with the gentle treatment meted out means that the cost of goods and services we duction in the overseas exemption ls retro­ to our diplomatic personnel, who have special buy from abroad will rise. The effect is the active to January 1, 1976. This places such a allowances for Just such items. same as an embargo on labor or any other severe burden upon my family that I, at this The net effect of the new tax law is to traded commodity. The foreign nation that time, have doubts that I will be able to pay make it substantially more expensive for otherwise would employ the talents and re­ the retroactive taxes. Under the Internal American companies to employ Americans sources of U.S. citizens suffers because the Revenue Service Code, ls it 100% legal to abroad. Many will choose not to do so. The tax differential makes such employment have a retroactive tax? result will be a reduction of American in­ impossible. United States citizens who are working fluence abroad and of the beneficial spread · What Congress should have done instead is outside of the United States as part of the of American technology and good will, a double the exemption, to account for the international operating work force are in a worsening of the U.S. balance of payments inflation that has taken place since 1962, very good position to be excellent represent­ and of our ability to compete with other in­ thereby expanding U.S. business activity atives for the Unlted States. However, when dustrial nations, and the encouragement of abroad with its resulting beneficial feedback the Congress passes unfair income tax laws taxpayer despair and prevarication. The in­ effects on the U.S. economy. As it is, this I feel reasonably sure that these good repre­ crease in tax revenues will be negligible or ls one tax change that damages everyone's sentatives of the United States might have non-existent. The only other country to tax interest to nobody's benefit. other thoughts. on the basis of nationality rather than resi­ It is my impression in general conversa­ dence is Switzerland, which is hardly com­ NOVEMBER 16, 1976. tions with large major companies that these parable. Subject: Tax Reform Act of 1976; Changes companies are going to have their United Had Congress deliberately set out to pass a. in the Treatment of Foreign Income States citizens working overseas return to the hopelessly misguided law, it could not have Affecting Individuals. United States. Foreign nationals will then be done better. I hope that this does not re­ Senator DEWEY F. BARTLETT, brought into the vacant positions. The end main the case. Senate Office Building, result is that in many cases the United THOMAS J. SUTCLIFFE. Washington, D.C. States Government will lose not only more DEAR SENATOR BARTLETT: I wish to express tax dollars but possibly good business sense [From Wall Street Journal, Nov. 1, 1976] my views relating to certain provisions of from a standpoint of international dealing. I will certainly appreciate a response from TAXING INCOME EARNED ABROAD the Tax Refor~ Act which was signed into Law by President Ford on October 4, 1976. you in regard to the justification for this un­ One of the many reasons President Ford The specific provisions deal with the changes fair tax law. should have vetoed the tax bill last month in the treatment of foreign income affecting Very truly, instead of signing it is the provision that in­ individuals. GERALD E. BROOKS. creases the tax burden on U.S. citizens work­ I a.m not in favor of these changes because ing abroad. The taxwriters l'oo.l!Y goofed, for of the increased tax burden on U.S. cl tizens BUTLER ASSOCIATES, INC., the net effect can only be that American living and working overseas, as well as the corporations operating abroad will reduce the Tulsa, Okla., September 15, 1976. fact, that these changes are retroactive to Senator DEWEY F. BARTLE'lT, number of Americans they employ and either January l, 1976. replace them with foreign nationals or The changes will be a significant deterent Senate Office Building, shrink the level of U.S. business activity to promoting and maintaining U.S. busi­ Washington, D.C. abroad. ness interests overseas. American firms can­ DEAR DEWEY: The recent announcement Until 1962, the United States didn't tax not successfully compete in foreign markets regarding the change in the income tax po­ its citizens on any wage and salary income if they cannot find personnel willing to work sition of Americans working abroad will earned abroad, and we are still one of the overseas. And, because there is notable re­ create a very serious problem for companies very few nations of the world who now do lationship between Americans overseas, such as ours. As you know, we are an en:­ tax such income. Prior to 1962 we accepted American direct investment overseas and gineering and construction management firm the universal rationale, which was and is U.S. exports, the U.S. balance of trade deficit providing foreign governments, as well as reasonable, that a wo:cker w111 be taxed by the can be expected to deteriorate. private industries overseas, with technical country in which he earns his income. As to the effective date of the taxation, I services. The proposed revision in the tax But when the law was changed, it was at cannot understand how Congress could con­ law will eliminate any competitive position least replaced with some relief on this score. sciously approve a retroactive change in the that we might have with the foreign firms, Americans employed abroad could exempt the tax burden of U.S. citizens! Would your and for all practical purposes we will be out first $20,000 of income earned abroad from fellow members accept a. retroa.ctive change of business insofar as foreign projects are U.S. taxes, and after three years abroad could in the election laws that placed them in concerned. exempt the first $25,000. Now, not only has Congress if such a. cha.nge adversely affected The retroactive aspects of the proposed the figure been dropped to $15,000, but the their prel,ent position? I believe the answer changes are especially unfa.ir both to the non-excluded income must be taxed in the would be a resounding No! But yet Congress corporation and to the individuals. The dif­ same tax brackets as if there were no expects the sa.me logic to be accepted when ferential that we must pay our expatriates exclusion. it is applied in other areas. will rise substantially, and it js too late to The change will have enormous damaging I strongly urge you to introduce amend­ renegotiate existing contracts. It might be impact on the competitiveness of U.S. busi­ ments in the next legislature which will not interesting to you to know that a recent ness a.broad as the tax 11ab111ties of their only rectify these unfair changes, but Uber- article in the "Wall Street .Tournal" quoted January 20, 1977 CONGRESSIONAL RECORD-SENATE 1885

Fluor Corporation as having 87 percent of FENIX & ScissoN, INC., for the same job in the U.S.: it is barely ade­ their engineering backlog overseas. This alone Tulsa, Okla.,_September 13, 1976. quate to meet the high cost of living in Iran. should give you an indication of the impact Hon. DEWEY BARTLETT, For instance, my housing allowance ls $325.00 that this change in the law wm have on such U.S. Senate, and I. pay $350.00. Others, with the same firms. Washington, D.C. amount of allowance have to pay $600.00 and If the objective of the le.w ls to increase DEAR DEWEY: The September 10, 1976 issue more; I was fortunate in that I had a. friend unemployment, it will succeed admirably. of indicates that the in Isfahan (an Iranian) that helped me We are certain that this was not the intent tax-revision bill a.s approved by the House­ obtain my house. and that this section of the proposed revision Sena.te Conference Committee contains the If this passes into law the incentive for of the tax bill will be reconsidered. The following provisions: overseas employment will be gone entirely change has the effect of removing any in­ 1. Reduces to $15,000 the amount of income a.nd there will be a mass return of Americans centive for American personnel to go over­ U.S. citizens working a.broad may exclude returning to the United States. This w111 seas. We would appreciate you opposing this from their U.S. income for tax purposes. put an extra burden on the employment sit­ change. This reduction ls to be retroactive to Janu­ uation that you now have in the States. Very truly yours, ary 1, 1976. Please, consider the proposed reduction VINCENT E. BUTLER, 2. Does a.way with the credit U.S. citizens as a detriment to the well being of many Presiden,t. working a.broad have been able to take Americans engaged in foreign work. I re­ against their U.S. taxes for foreign taxes spectfully ask for your "no" vote when this PARKER DRILLING Co., pa.id on the excluded income. matter comes before you. Nairobi, Kenya, September 17, 1976. 3. In the future, an American working Re : Tax reform bill. abroad earning more than the excluded Tha.nk you for your consideration of this Hon.' DEWEY F. BARTLE'IT, $15,000 wlll be subject to U.S. tax a.t the request. U.S. Senate, higher tax bracket that would apply if the Respectfully, Washington, D.C. $15,000 also were taxable. DoN L. WILSON, DEAR SENATOR BARTLETT: Attached you will Our company, among other things, sells WILMA DEAN WILSON. find copies of recent articles from the In­ engineering and construction management ternational Herald Tribune giving notice to services in foreign countries. We have proj_­ By U.S. expatriates about the pending tax bill. ects and/or assignments in England, France, Mr. MATSUNAGA: As I have written in earlier months, this South Africa and the Middle East. We have S. 389. A bill to amend the Internal reduction of tax excludable income will only additional proposals outstanding in the Revenua Code of 1954 to exempt from hurt the U.S. consumer in one of two ways: Middle Ea.st and Japan. At the present time, excise tax certain buses purchased by 1. Expatriate employees Will be forced to we have ten U.S. citizens stationed abroad. nonprofit organizations or by other per­ return to the U.S. because of the higher tax U.S. citizens generally will not accept sons for exclusive use in furnishing consequences to which they would be sub­ foreign assignments unless their after tax transportation for State or local govern­ ject. This fact would be a. negative force on income and benefits exceed those which they ments or nonprofit organizations; to the the Country's unemployment percentage. would obtain if they were employed in the 2. The U.S. firms operating abroad to im­ USA. The tax exclusion, the credit for foreign Committee on Finance. port products into the U.S. Will necessarily taxes and rate applied against their USA ta.x­ Mr. MATSUNAGA. Mr. President, I am have to increase their prices to the con­ a.ble income a.re all factors that are consid­ introducing today two bills which are sumer. The reason being that of increased ered in their employment contracts and in directed toward furthering the trans­ wages, which they will have to pay to keep the charges that we must make for their portation services to the elderly. American expertise abroad. services. our standard employment agree­ When the Tax Reform Blll goes to a final ment includes a provision that should the My concern for the transportation vote, please consider whether the $1 billion tax treatment change we will give additional needs of the elderly has been greatly re­ in additional tax revenue will not be felt by compensation to allow them to have the same inforced from hearings and studies on the American public in a multiplier effect. after tax income a.s before the change. this subject, which I conducted as chair­ Sincerely yours, We have reviewed the impact of these pro­ man of the Subcommittee on Federal, JERRY W. HOLDER, posed tax changes on the personnel we now State, and Community Services of the Assistant Division Manager. have stationed abroad a.nd find that our House Select Committee on Aging. additional costs, due to these changes, are TEHRAN, IRAN.. such that we must increase any charges to Older Americans presently encounter October 10, 1976. our foreign clients somewhere between numerous difficulties in traveling to and Hon. DEWEY BARTLET!', $10,000 to $12,000 per year per man. In some from their destinations. Their paths are Senate Office Building, cases this additional charge will make- us often impeded by income inadequacies­ Washington, D.C. non-competitive with our European (mostly which often discourage frequent use of DEAR Sm: As an Oklahoman, and an French and German) competitors. private or public transportation-by de­ American working and residing a.broad, in We feel the retroactive clause is particu­ ficiencies in existing transportation pro­ Europe, Africa and the Middle East, I wish larly unfair as it gives us a substantial un­ to complement the expected expense (in excess of $100,000) so grams and services--especially in iso­ on another unparalleled act of stupidity in late in the year that we have no opportunity lated rural areas--and by the unaccom­ the punitive tax legislation for U.S. Ex­ to either (1) re-negotiate or withdraw from modative design of certain vehicles used patriates. These actions can only be greeted contracts that may no longer be worthwhile. by elderly and handicapped persons. with joy by Western European and Japanese or (2) replace our U.S. citizens with Euro­ There are numerous program sources firms who wm happily jump in to fill a.ny pean employees. from which funds and services may be void created by American firms being rend­ I am in accord with the general intent of ered uncompetitive by our own Congress. the tax-revision blll and in most instances drawn for developing and operating The bill wlll certa.lnly cause many Ameri­ agree that the proposed changes are.well past transportation for the elderly. However, cans to return to the U.S. because of simple due; however, I do not be-Ueve its intent ls to a number of important constraints have economics. These people will need jobs. The deter companies such as ours from working limited the range and level of such Bill wilf ca.use many "marginal" or new for­ a.broad or to make us less competitive with transportation services. eign operations to fold because of cost con­ foreign companies. The bill I offer today would amend siderations. The net effect is that some Very truly yours, certain tax exemption provisions in order manufacturers who enjoy a high level of em­ S. E. ScISSON, ployment due to foreign markets will now President. to facilitate easier- access by the elderlY find it mare difficult to retain this level. This to schoolbuses during periods in the. day ls a. potential cause of additional unemploy­ BELL HELICOPTER INTERN TIONAL, when such vehicles are not being used ment for workers in the U.S. Isfahan, Iran, September 12, 1976. by the schools. Competition from West German, Italian, DEWEY BARTLE'IT, French, English and Japanese concerns is Prior to and since the 1971 White U.S. Senate Office Building, House Conference on Aging, the use of keen. Any advantage our Congress may pro­ Washington, D.C. vide them wlll surely be appreciated and DEAR Sm: It is my understanding that the schoolbuses to meet the transpo1tation utilized to the fullest extent. Congressional Conferees have voted to reduce needs of the elderly has been a constant I do not understand how the logic tn this the foreign income tax exemption to $15,- and reocurring recommendation. At issue legislation was derived. In a period where 000.00. Also, all income over the $15,000.00 is the fact that older persons are in great unemployment and "balance of payments" exemption would be taxed at the higher need of adequate and responsive trans­ is a problem, this seems to me to be a. coun­ percentage as if the $15,000.00 was also tax­ portation services. Schoolbuses continue ter productive action. I can assure you that able. to remain an important and untapped it goes a. long way for me in diminishing the I feel t-hat" this proposal is unfair to those resource. credibility of the U.S. Congress. working overseas. Sincerely, Although the base salary, cost of ltving al­ During hours of nonuse by students, R. S. NICKEL. lowance and etc. is higher than that paid schoolbuses could and would provide a 1886 CONGRESSIONAL RECORD- SENATE January 20, 1977 useful means of transporting the elderly By Mr. MATSUNAGA: section 170 of the Internal Revenue Code of to nutrition sites or senior centers. S. 390. A bill to amend the Internal 1954 (relating to charitable deductions) is Revenue Code of 1954 to provide that the amended by redesignatlng subsections (1) In order to make schoolbuses more ac­ and (J) as subsections (j) and (k), respec­ cessible for use by older persons, my bill amount of the charitable deduction al­ tively, and by inserting after subsection (h) seeks to remove a large obstacle blocking lowable for expenses incurred in the op­ the following new subsection: contractors' use of schoolbuses for non­ eration of a highway vehicle will be de­ "(1) AMOUNT OF DEDUCTION FOR EXPENSES school purposes. Presently, schoolbuses termined in the same manner as the busi­ OF OPERATING A MOTOR VEHICLE.-The amount owned by contractors are exempt from ness deduction for such expenses; to the allowable as a deduction under this section Federal excise tax-that is, 10 percent of Committee on Finance. with respect to expenses incurred by the tax­ the vehicle-if the contractor signs an Mr. MATSUNAGA. Mr. President, the payer for the operation o! a highway affidavit at the time of the purchase that second bill I am introducing today is an­ vehicle- "(l) shall include that portion o! the the vehicle will be used solely for trips other attempt to further transportation costs of operating and maintaining such ve­ to and from school. This exemption pro­ services for the elderly by extending tax hicle (including a reasonable allowance for vides great savings to the contractor, deductions for expenses incurred by vol­ depreciation) which 1s allocable to such op­ particularly when there are large num­ unteers driving to and from charitable­ eration; and bers of buses involved. Many contractors, service functions. " ( 2) shall be determined in the same however, are unwilling to jeopardize Our older Americans are important manner as if such operation were in connec­ these savings in order to provide non· human resources. Many of the Nation's tion with a trade or business of the tax­ school transportation. senior population have the desire to pro­ payer.". (b) The amendment made by subsection As revealed in the House Aging Com­ long their years of productivity and serv­ (a) shall apply with respect to the operation mittee transportation study, an "in­ ices. However, all too often, their contri­ of a motor vehicle occurring after the date formal interpretation" by an official of butions made as volunteers in local or of the enactment of this Act in taxable years the Internal Revenue Service indicated State services, are stymied by the burdens ending after such date. that "if subsequent circumstances arise of rising expenses in driving or being which would dictate that a bus purchased driven to their charitable activities. tax free can no longer be exclusively 1.U?ed Numerous programs and projects ADDITIONAL COSPONSORS for exempt purposes, then its diversion throughout the country rely upon the s. 15 to other uses will not negate the exemp­ services of drivers. But fre­ At the request of Mr. JOHNSTON, the tion for that bus." Most bus contractors, quently many volunteer drivers are Senator from Minnesota (Mr. ANDERSON) to however, tend to interpret the law more forced curtail their voluntary driving was added as a cosponsor of S. 15, the narrowly. because of the imbalance between in­ In light of the great uncertainty on the creasing costs in operating a vehicle and Federal Election Campaign Act Amend­ ments of 1977. part of schoolbus contractors as to their the limited, fixed income of the senior s. 69 tax exemption if schoolbuses are used to volunteer. transport persons other than pupils, my Volunteerism is usually effective when At the request of Mr. STEVENSON, the bill would amend the Internal Revenue there is a potential to alleviate burden­ Senator from New Mexico (Mr. Do­ code to allow the transport of the elderly ing costs to the volunteer, and when the MENICI), the Senator from Hawaii (Mr. and other disadvantaged persons out-of-pocket expenses of the volunteer MATSUNAGA), and the Senator from through publicly-supported programs is at a minimal. Consideration of incen­ Rhode Island (Mr. PELL) were added as without the loss of the exemption tives is an important aspect of promot­ cosponsors of S. 69, to extend the Export presently permitted in Sec. 4221

and status of Ambassador Extraordinary and DEPARTMENT OF DEFENSE DEPARTMENT OF 'l'RANSPORXATION Plenipotentiary, and the Representative of Harold Brown, of California, to be Secre­ Brockman Adams, of Washington, to be the United States of America in the Security tary of Defense. Secretary of Transportation. Council of the United Nations. DEPARTMENT OF THE INTERIOR OFFICE OF MANAGEMENT AND BUDGET Cecil D. Andrus, of Idaho, to be Secretary of the Interior. Thomas Bertram Lance, of Georgia, to be Director of the Office of Management and DEPARTMENT OF AGRICULTURE CONFIRMATIONS Budget. Bob S. Bergland, of Minnesota, to be Secre­ Executive nominations r...>nfirmed by tary of Agriculture. COUNCIL OF ECONOMIC ADVISERS the Senate January 20, 1977: DEPARTMENT OF COMMERCE Charles L. Schultze, of the District of Columbia, to be a member of the Council of DEPARTMENT OF STATE Juanita M. Kreps, of North Carolina., to be Secertary of Commerce. Economic Advisers. Cyrus Vance, of New York, to be Secretary of State. DEPARTMENT OF HOUSING AND URBAN The above nominations were approved DEVELOPMENT subject to the nominees' commitments to DEPARTMENT OF THE TREASURY Patricia Roberts Harris, of the District of respond to requests to appear and testify w. Michael Blumenthal, of Michigan, to be Columbia, to be Secretary of Housing and before any duly constituted committee of the be Secretary of the Treasury. Urban Development. Senate.

EXTENSIONS OF REMARKS OCEANIC OIL POLLUTION which tanker accidents and offshore leaks 2. As "fallout" from the atmosphere, prob­ play a relatively small part-and they sug­ ably as particles or in rain. gest possible courses of action to control the we shall consider all these sources except HON. G. WILLIAM WHITEHURST problem. Revelle is director of the Harvard accidental spills as constituting the base load OF vmGINIA Center for Population Studies and former of oil polution in the sea. director of Scripps Institution of Oceanogra­ ACCIDENTAL OIL SPILLS IN THE HOUSE OF REPRESENTATIVES phy; Wenk, a specialist in ocean engineer­ At present, the average annual influx to Wednesday, January 19, 1977 ing and public affairs, ls a professor at the ; Ketchum is as­ the ocean from accidental oil spills through­ Mr. WHITEHURST. Mr. Speaker, I sociate director of Woods Hole Oceanographic out the world is probably about 200,000 tons. have the privilege of serving as a mem­ Institution; and Corino ls with the Esso Most of these spills are relatively small. Out ber of the board of directors of the Research and Engineering Company.) of 714 recorded accidental spills in U.S. wa­ At the present time, the most conspicu­ ters in 1968, approximately half were from Oceanic Educational Foundation, an or­ ships and barges, most of which were docked ganization which has as its goal the es­ ously detrimental effects of oil pollution of the ocean are localized in extent and are at the time of the accident. About 300 spills tablishment of world ocean education, caused by accidental spills in near-shore occurred from shore facilities of various covering the many aspects of the study of areas. These loci of concern, however, poten­ types, and a few resulted from ships dragging the sea, at all levels in the American tially include the coastal zones of every anchor across submarine pipelines in bays. school system, in order to bring the seas continent and every inhabited island so that Even under carefully controlled conditions into educational balance with the land the problem of accidental spllls ls of world­ accidental oil spills in port are negligible. to sustain the future prosperity, safety, wide significance. Projections of future Milford Haven, a relatively new British oil growth in ocean transport and offshore pro­ port, is adjacent to a national park, and great and security of citizens through knowl­ efforts have been made to control and pre­ edge of the world's oceans. duction of petroleum indicate that both the frequency and the damaging effects of local vent oil pollution. In 1966 the annual turn­ In that connection I recently received accidents are likely to increase. over at Milford Haven was 30 million tons a copy of Oceans: Our Continuing Fron­ Although accidental oil spills cause the with losses amounting to 2,900 tons or 0.01 tier, the courses by Newspaper Reader most evident damage to ocean resources, they percent of the total amount handled. which is a project of the University of make up a small percentage of the total Accidental oil spills resulting from strand­ amount of oil entering the marine environ­ ing or collision of large tankers and from California, San Diego, university exten­ accidents to offshore drilling or producing sion program. At this point in the REC­ ment. At least 90 percent of this amount originates in the normal operations of oil­ wells deserVl?dly attract much public atten­ ORD, I would like to share with my col­ carrying tankers, other ships, refineries, tion because of the extensive damage done leagues one of the articles from that ex­ petrochemical plants, and submarine oil to beaches, recreational areas, and harbors. cellent book. It was written by Roger Re­ wells; from disposal of spent lubricants and The wreck of the Torrey Canyon, which dis­ velle, Edward Wenk, Bostwick Ketchum, other industrial and automotive oils; and by charged 118,000 tons of crude oil in to the sea, and Edward Corino, and it deals with the fallout of airborne hydrocarbons emitted by is the best known example although some­ subject of oceanic oil pollution. It is motor vehicles and industry. The extent and what smaller tanker wrecks have occurred character of the damage to the living re­ elsewhere, such as off Nova Scotia and Puerto well worth reading, as is the rest of the Rico. All large accidental spills to date have material in this book, and it points up the sources of the sea from this "base load" of oil pollution is little known or understood. occurred fairly near shore, and the spreading need for a concerted, international effort In the long run it could be more serious, be­ sheet of oil has drifted or has been blown by to prevent further damage to the oceans cause ~ore widespread, than the localized winds onto beaches and into shallow water of this world. damage from acclden tal spills. areas. Present efforts to contain and to dis­ I have previously mentioned my bills The magnitude of oceanic oil pollution is pose of the oil before it does extensive dam­ toward this end, H.R. 711 and 712, and likely to increase with the worldwide growth age have been singularly ineffective. Agents of petroleum production, transportation, and such as talc, clay, and carbonized sand have House Joint Resolution 134, and I ear­ consumption. World crude oil production been used to sink the oil. Various dispersing nestly hope that legislation of this kind reached 2 billion tons per year in 1969, and agents have been developed which break up will receive favorable consideration in production of 3 billion and 4.4 billion tons the oil into minute droplets that are subse­ this session. Criteria for tanker safety per year is predicted for 1975 and 1980, quently dispersed throughout the water. must be established, and international respect! vely. Earlier versions of these chemical dispersants treaties need to be brought up to date were more toxic than the oil, but a number SOURCES OF PETROLEUM HYDROCARBONS IN THE of essentially nontoxic dispersants are now and promptly ratified. We have very lit­ SEA available. Even with a nontoxic dispersant, tle time left. Petroleum hydrocarbons enter the sea: dispersed oil is more toxic to marine life than OCEANIC OIL POLLUTION 1. Directly an oil slick on the surface, primarily because (By Roger Revelle, Edward Wenk, Bostwick a. in accidental spllls from ships, shore fa­ of its increased availabllity to the organisms. cilities, offshore oil wells, and underwater With all our vast inventory of chemical Ketchum, and Edward Corino) pipe lines; (011 pollution is not confined to coastal agents, the best and safest means of disposal b. from tankers flushing oil tanks at sea; is apparently still absorption on chopped areas; it poses an eventual threat to the c. from dry cargo ships cleaning fuel tanks ecosystems of the oceans of the world. straw, if conditions permit. and bilges; The danger of large-scale accidents is in­ Furthermore, as consumption of oil increases d. from leakage during normal operation in our ever-expanding technological society, creasing with the increasing size of tankers. of offshore oil wells; Four 327,000-ton ships are already in opera­ the problem of oil pollution is also likely e. from operation of refineries and petro­ to increase. In the following selection, Roger tion; vessels of 500,000 dead weight tons will chemical plants; soon be constructed, and 800,000-ton vessels Revelle and three other experts analyze the f. in rivers and sewage outfalls carrying extent and character of oil pollution-in have been projected within the next few industrial and automotive wastes; and years. These monster ships have so much