E PL UR UM IB N U U S Congressional Record th of America PROCEEDINGS AND DEBATES OF THE 106 CONGRESS, FIRST SESSION

Vol. 145 WASHINGTON, THURSDAY, JULY 29, 1999 No. 109 Senate The Senate met at 9:30 a.m. and was I pledge allegiance to the Flag of the TAXPAYER REFUND ACT OF 1999— called to order by the President pro United States of America, and to the Repub- Resumed tempore [Mr. THURMOND]. lic for which it stands, one nation under God, indivisible, with liberty and justice for all. The PRESIDING OFFICER. The The PRESIDENT pro tempore. To- clerk will report the bill. day’s prayer will be offered by our f The legislative assistant read as fol- guest Chaplain, Rabbi Solomon Schiff, lows: director of chaplaincy, Greater Miami GUEST CHAPLAIN RABBI SOLOMON Jewish Federation, Miami, FL. A bill (S. 1429) to provide for reconciliation SCHIFF pursuant to section 104 of the concurrent res- We are pleased to have you with us. The PRESIDING OFFICER (Mr. olution on the budget for fiscal year 2000. PRAYER CRAPO). The Senator from Florida. Pending: The guest Chaplain, Rabbi Solomon Mr. GRAHAM. Mr. President, I rise Abraham amendment No. 1398, to preserve Schiff, offered the following prayer: to thank our distinguished guest Chap- and protect the surpluses of the social secu- Heavenly Creator, we invoke Thy lain, Rabbi Solomon Schiff, a personal rity trust funds by reaffirming the exclusion blessings upon those gathered here, of receipts and disbursement from the budg- friend, who has been a great contrib- et, by setting a limit on the debt held by the loyal servants in the vineyard of utor to the religious and civic life of public, and by amending the Congressional human compassion. Bless, we pray, the our community and Nation and who Budget Act of 1974 to provide a process to re- Members of this body who have accept- has brought us an inspirational mes- duce the limit on the debt held by the public. ed the high privilege and sacred respon- sage to commence a long day of Senate Baucus motion to recommit the bill to the sibility of serving in the sanctified deliberation. Committee on Finance, with instructions to Halls of the U.S. Senate. Unto their report back with an amendment to reduce hands was entrusted the mantle of f the tax breaks in the bill by an amount suffi- leadership on behalf of the American cient to allow one hundred percent of the So- people. May they discharge their re- RECOGNITION OF THE ACTING cial Security surplus in each year to be MAJORITY LEADER locked away for Social Security, and one- sponsibilities with courage and com- third of the non-Social Security surplus in mitment. Grant that their delibera- The PRESIDING OFFICER. The act- each year to be locked away for Medicare; tions will be free from rancor and bit- ing majority leader is recognized. and an amendment to protect the Social Se- terness, but that they will be ruled in- curity and Medicare surplus reserves. SCHEDULE stead by wisdom, purpose, and dedica- Robb amendment No. 1401, to delay the ef- Mr. ROBERTS. Mr. President, today, tion. fective dates of the provisions of, and amend- O, divine Healer, bind our Nation to- by a previous order, the Senate will ments made by, the Act until the long-term gether. Sustain the dreams of those begin a series of stacked votes on the solvency of Social Security and Medicare who founded our great Republic, that Abraham Social Security lockbox programs is ensured. through our sharing with one another amendment, the Baucus motion to re- MOTION TO WAIVE THE BUDGET ACT AMENDMENT the ideals which gave it birth—the commit, and the Robb amendment re- NO. 1398 ideals of liberty, justice, equality, and garding effective dates of the provi- The PRESIDING OFFICER. The Sen- freedom—we will preserve and sions in the Taxpayer Refund Act of ator from Nevada. strengthen these ideals for all future 1999. Mr. REID. Mr. President, the pending time. In this way we will help bring Following the votes, Senator GRAMM amendment is not germane. I raise a about a society based on moral and of Texas will be recognized to offer a point of order that the Abraham ethical values and ensure that the new substitute amendment containing amendment violates section 305(b)(2) of millennium will mark not only a across-the-board tax cuts, estate tax the Congressional Budget Act of 1974. change in calendar but a change in relief, and reductions in capital gains The PRESIDING OFFICER. The Sen- character as well. taxation. By previous consent, there ator from Michigan. We will then lead the family of na- then will be 10 hours of debate time re- Mr. ABRAHAM. Mr. President, pur- tions to an unending era of tranquility, maining on the bill today. Therefore, it suant to section 904(c) of the Congres- justice, and universal peace. Amen. is the intention of the majority leader sional Budget Act of 1974, I move to f and other rational Senators to con- waive the Budget Act for consideration tinue to make significant progress on of the ABRAHAM amendment. PLEDGE OF ALLEGIANCE the bill and complete action on this Mr. GRAMM. I ask for the yeas and The Honorable CONRAD BURNS, a legislation no later than tomorrow. nays. Senator from the State of Montana, led I thank my colleagues for their at- The PRESIDING OFFICER. Is there a the Pledge of Allegiance, as follows: tention. sufficient second?

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

S9651

. S9652 CONGRESSIONAL RECORD — SENATE July 29, 1999 There appears to be a sufficient sec- [Rollcall Vote No. 227 Leg.] along with the Medicare lockbox. The ond. YEAS—54 Medicare lockbox we provide sets aside The yeas and nays were ordered. Abraham Fitzgerald McCain one-third of the on-budget surplus for The PRESIDING OFFICER. There is Allard Frist McConnell Medicare. It can be used in whatever Ashcroft Gorton Murkowski way we want to use it for Medicare, in- 2 minutes of debate. Bennett Gramm Nickles Who yields time? Bond Grams Roberts cluding to provide an affordable pre- Mr. REID. Mr. President, in a letter Brownback Grassley Santorum scription drug benefit or for shoring up dated April 21, 1999, on a similar provi- Bunning Gregg Sessions Medicare solvency. Burns Hagel Shelby That is the choice before the Senate. sion, then-Secretary of the Treasury Campbell Hatch Smith (NH) wrote to Senator MOY- Chafee Helms Smith (OR) Do we preserve Medicare or not. Our NIHAN that this ‘‘provision could pre- Cochran Hutchinson Snowe choice here today, however, is nothing Collins Hutchison Specter compared to another choice. That is clude the United States from meeting Coverdell Inhofe Stevens its financial obligations to repay ma- Craig Jeffords Thomas the choice that about 16 million seniors turing debt and to make benefit pay- Crapo Kyl Thompson must make every day: Do I choose to ments—including Social Security DeWine Lott Thurmond buy my medicine, choose to pay the Domenici Lugar Voinovich rent, or choose to buy food? checks—also worsen a future economic Enzi Mack Warner We are saying set aside and preserve downturn.’’ NAYS—46 The lockbox in this proposal is poten- for Medicare one-third of the on-budget Akaka Feingold Lincoln tially destabilizing in a manner remi- surplus so that the choices facing sen- Baucus Feinstein Mikulski iors are not quite as abhorrent. niscent of the constitutional amend- Bayh Graham Moynihan The PRESIDING OFFICER. The Sen- ment to require a balanced budget. Biden Harkin Murray Bingaman Hollings Reed ator from New Mexico. I remind those who propose rigid 10- Boxer Inouye Reid Mr. DOMENICI. Mr. President, this is year schedules for reducing the pub- Breaux Johnson Robb another opportunity on the part of the licly held debt that economics does not Bryan Kennedy Rockefeller other side to propose to the American follow the agricultural cycle. There Byrd Kerrey Roth Cleland Kerry Sarbanes people that they want anything but tax will be periods when surpluses, both on Conrad Kohl Schumer relief. This is a motion to recommit. It and off budget, will fall far short of Daschle Landrieu Torricelli would do nothing to protect Medicare. projections. We should not impose a Dodd Lautenberg Wellstone Dorgan Leahy Wyden It is the President’s proposal, which is debt reduction schedule, enforced by a Durbin Levin a phony transfer of IOUs to the Medi- declining debt cycle ceiling, even if it Edwards Lieberman care trust fund. It does nothing to help can be overridden with 60 votes. To do The PRESIDING OFFICER (Mr. senior citizens. It is just an effort to so will risk default every time the debt FRIST). On this vote the yeas are 54, lock up $300 billion so you can’t give ceiling is lowered. and the nays are 46. Three-fifths of the the American people a tax cut, plain Mr. ABRAHAM. Mr. President, first Senators present and voting, not hav- and simple. They don’t want to con- of all, we have endeavored to and have ing voted in the affirmative, the mo- front the issue of a lockbox for Social modified our amendment to try to ad- tion to waive the Budget Act is re- Security so they muddle it up and in- dress some of these concerns. I think jected. The point of order is sustained, stead of trying to solve something, we have done so. I believe we have and the amendment falls. they would like to create an issue in- given sufficient flexibility so that Mr. ROTH. Mr. President, I ask unan- stead of a solution. there will not be the concerns that imous consent that the remaining Frankly, there are hardly any ex- were raised in that letter. votes in this series be limited to 10 perts in America who look at this This lockbox does not need a lot of minutes in length, and I ask that all lockbox concept for Medicare and say debate. Americans have been hearing the Members of the Senate stay on the it helps the seniors or it helps Medi- us talk about it now for almost 3 floor. We have a full and busy day. care. If this is the plan the President is months. We will continue to try to get The PRESIDING OFFICER. Without alluding to across this land, then he a straight up-down vote on this. I objection, it is so ordered. has none. would note that once again this morn- Mr. BAUCUS. Mr. President, I move I believe, since the other side did not ing another procedural roadblock has to reconsider the vote. let us have a vote, we ought to do ours been put in place to prevent us from Mr. REID. I move to lay that motion procedurally also, and I am compelled getting a straight up-or-down vote. I on the table. to do that. regret that. I was prepared to come The motion to lay on the table was Therefore: The language in this today and offer both sides the oppor- agreed to. amendment is not germane to the bill tunity to have straightforward votes. If PRIVILEGE OF THE FLOOR before us, so I raise a point of order one side or the other in their various Mr. LEAHY. Mr. President, I ask under section 305(b)(2) of the Congres- lockbox proposals got 50-plus votes, unanimous consent that Peter McDou- sional Budget Act. they would win and we could give the gall of my staff be given floor privi- The PRESIDING OFFICER. The Sen- American people what I believe they leges throughout the day. ator from Montana. want, and that is protection for their The PRESIDING OFFICER. Without Mr. BAUCUS. Mr. President, pursu- Social Security dollars sent to Wash- objection, it is so ordered. ant to section 904 of the Budget Act, I move to waive the applicable sections ington. But again, once more, what we MOTION TO RECOMMIT of that act for the consideration of the have had is a procedural impediment The PRESIDING OFFICER. The placed in the way of getting final ac- pending amendment. question is on the Baucus motion. Mr. President, I ask for the yeas and tion on this legislation. Mr. BAUCUS. Mr. President, I under- Mr. President, I urge my colleagues nays. stand each side has 1 minute of expla- The PRESIDING OFFICER. Is there a who have previously supported this nation. lockbox to do so. It is a tougher sufficient second? The PRESIDING OFFICER. The Sen- There is a sufficient second. lockbox that protects Social Security. ator is correct. The yeas and nays were ordered. If we want to do it, I say vote ‘‘yes.’’ Mr. BAUCUS. Mr. President, this is a The PRESIDING OFFICER. The Vote to waive the Budget Act. very simple matter before the Senate. question is on agreeing to the motion The PRESIDING OFFICER. All time It is a choice: Do we want to protect to waive the Budget Act in relation to has expired. The question is on agree- Medicare or not. It is that simple. That the Baucus motion to recommit S. 1429. ing to the motion to waive the Budget is the choice that we are presented The yeas and nays have been ordered. Act. The yeas and nays have been or- with today. The clerk will call the roll. dered. The clerk will call the roll. The amendment I am offering is the The legislative assistant called the The legislative clerk called the roll. House lockbox which passed the House roll. The yeas and nays resulted—yeas 54, by an overwhelming margin—it only The yeas and nays resulted—yeas 42, nays 46, as follows: had three or four votes against it— nays 58, as follows: July 29, 1999 CONGRESSIONAL RECORD — SENATE S9653 [Rollcall Vote No. 228 Leg.] Most of the people who have spoken [Rollcall Vote No. 229 Leg.] YEAS—42 so far have talked about their concern YEAS—46 Akaka Edwards Lieberman for doing just that. The lockbox provi- Akaka Feinstein Mikulski Baucus Feingold Lincoln sions were proposing to do just that. Baucus Graham Moynihan Bayh Feinstein Mikulski If you want to save Social Security Bayh Harkin Murray Biden Graham Moynihan Biden Hollings Reed Bingaman Harkin Murray and Medicare, this is an incentive. It Bingaman Inouye Reid Boxer Inouye Reed will delay the implementation of the Boxer Johnson Robb Bryan Johnson Reid act, but it will not negate the effective- Bryan Kennedy Rockefeller Byrd Kennedy Robb Byrd Kerrey Sarbanes Cleland Kerry Rockefeller ness of the act. Cleland Kerry Schumer Conrad Kohl Sarbanes I ask that our colleagues vote to sup- Conrad Kohl Snowe Daschle Landrieu Schumer port this particular amendment, save Daschle Landrieu Torricelli Dodd Lautenberg Torricelli Dodd Lautenberg Voinovich Dorgan Leahy Wellstone the one-half of 1 percent of the total Dorgan Leahy Wellstone Durbin Levin Wyden which would be expended this year, and Durbin Levin Wyden not lock in cuts that would cost $792 Edwards Lieberman NAYS—58 billion, which would be almost impos- Feingold Lincoln Abraham Frist McConnell NAYS—54 Allard Gorton Murkowski sible to reverse should that prove to be Ashcroft Gramm Nickles the case. Abraham Enzi Mack Bennett Grams Roberts The PRESIDING OFFICER. The Sen- Allard Fitzgerald McCain Bond Grassley Roth ator’s time has expired. Ashcroft Frist McConnell Breaux Gregg Santorum Bennett Gorton Murkowski Brownback Hagel Sessions Mr. THOMPSON addressed the Chair. Bond Gramm Nickles Bunning Hatch Shelby The PRESIDING OFFICER. The Sen- Breaux Grams Roberts Burns Helms Smith (NH) ator from Tennessee. Brownback Grassley Roth Campbell Hollings Smith (OR) Bunning Gregg Santorum Chafee Hutchinson Snowe Mr. THOMPSON. Mr. President, no Burns Hagel Sessions Cochran Hutchison Specter one in this chamber thinks other than Campbell Hatch Shelby Collins Inhofe Stevens that we want a real, sound, solid, and Chafee Helms Smith (NH) Coverdell Jeffords Thomas Cochran Hutchinson Smith (OR) Craig Kerrey Thompson solvent Social Security system and Collins Hutchison Specter Crapo Kyl Thurmond Medicare system. Most of us, however, Coverdell Inhofe Stevens DeWine Lott Voinovich realize we will only have that if we Craig Jeffords Thomas Domenici Lugar Warner have fundamental reforms in those sys- Crapo Kyl Thompson Enzi Mack DeWine Lott Thurmond Fitzgerald McCain tems, such as that proposed by the Domenici Lugar Warner Medicare commission at which the The PRESIDING OFFICER. On this The PRESIDING OFFICER. On this President scoffed. vote, the yeas are 42, the nays are 58. vote the yeas are 46, the nays are 54. Three-fifths of the Senators duly cho- This amendment will serve to actu- Three-fifths of the Senators duly cho- sen and sworn not having voted in the ally make Social Security and Medi- sen and sworn not having voted in the affirmative, the motion is rejected. care less sound. It will actually delay affirmative, the motion is rejected. The point of order is sustained, and the the process of real reform. The sol- The point of order is sustained, and motion falls. vency dates that are used in this legis- the amendment falls. The PRESIDING OFFICER. The Sen- lation are taken from the President’s Mr. MOYNIHAN. Mr. President, I ator from Delaware. proposal and will invariably result in move to reconsider the vote. Mr. ROTH. Mr. President, I move to pouring more and more general reve- Mr. ROTH. I move to lay that motion reconsider the vote. nues into these entitlement programs, on the table. Mr. MOYNIHAN. I move to lay that delaying the day when we have to face The motion to lay on the table was motion on the table. up to the fact that we have to have agreed to. The motion to lay on the table was fundamental reform. AMENDMENT NO. 1405 agreed to. Our bill sets aside 75 percent of the (Purpose: To return to the taxpayers a por- Mr. ROTH. Mr. President, I ask unan- surplus for Medicare, Social Security, tion of the budget surplus that they cre- imous consent that all amendments debt retirement, and other spending ated with their tax payments) and motions to recommit to S. 1429 priorities. With regard to the 25 per- The PRESIDING OFFICER. Under must be filed by 2 p.m. today at the cent remaining, there is no reason to the previous order, the Senator from desk and with the bill managers. delay tax cuts. Texas is recognized to offer an amend- Mr. STEVENS. Reserving the right If we saved every penny of the sur- ment. to object, what time was that? plus, put it into Medicare and Social Mr. GRAMM. Mr. President, I send Mr. ROTH. Two p.m. Security, it would not do one thing to- an amendment to the desk in the na- The PRESIDING OFFICER. Is there ward solving the fundamental problem. ture of a substitute for myself, for Sen- objection? This language is not germane to the ator LOTT, Senator NICKLES, Senator Without objection, it is so ordered. bill now before us; therefore, I raise a MACK, Senator COVERDELL, Senator AMENDMENT NO. 1401 point of order, under section 305(b)(2) of CRAIG, Senator MCCONNELL, Senator Mr. ROTH. Mr. President, I think we the Congressional Budget Act of 1974. INHOFE, Senator HUTCHISON, Senator are ready for the vote on the next Mr. ROBB. Mr. President, pursuant BUNNING, Senator KYL, Senator BOB amendment. to section 904 of the Congressional SMITH of New Hampshire, Senator AL- The PRESIDING OFFICER. There Budget Act of 1974, I move to waive the LARD, and Senator HAGEL, and I ask for are 2 minutes equally divided. Who applicable sections of that act for the its immediate consideration. yields time? consideration of the pending amend- The PRESIDING OFFICER. The Mr. ROBB addressed the Chair. ment, and I ask for the yeas and nays. clerk will report. The assistant legislative clerk read The PRESIDING OFFICER. The Sen- The PRESIDING OFFICER. Is there a as follows: ator from Virginia. sufficient second? Mr. ROBB. Mr. President, this There is a sufficient second. The Senator from Texas [Mr. GRAMM], for himself, Mr. LOTT, Mr. NICKLES, Mr. MACK, amendment simply delays the effective The yeas and nays were ordered. Mr. COVERDELL, Mr. CRAIG, Mr. MCCONNELL, date of the tax cut that is proposed. The PRESIDING OFFICER. The Mr. INHOFE, Mrs. HUTCHISON, Mr. BUNNING, There are many who believe that a tax question is on agreeing to the motion Mr. KYL, Mr. SMITH of New Hampshire, Mr. cut of this magnitude at this time to waive the Congressional Budget Act ALLARD, and Mr. HAGEL, proposes an amend- would be ludicrous. But that is not the in relation to the Robb amendment No. ment numbered 1405. issue. The issue is whether or not we 1401. The yeas and nays have been or- Mr. GRAMM. Mr. President, I ask ought to go ahead with a tax cut not- dered. The clerk will call the roll. unanimous consent that reading of the withstanding the fact that we have not The legislative clerk called the roll. amendment be dispensed with. protected Social Security and Medi- The yeas and nays resulted—yeas 46, The PRESIDING OFFICER. Without care. nays 54, as follows: objection, it is so ordered. S9654 CONGRESSIONAL RECORD — SENATE July 29, 1999 (The text of the amendment is print- Americans who have some college edu- met a printer from Mexia named Dicky ed in today’s RECORD under ‘‘Amend- cation, 69 percent of all married cou- Flatt, I met him about 25 years ago. He ments Submitted.’’) ples, and 80 percent of all two-wage was in business with his daddy, who Mr. GRAMM. Mr. President, I have earner families in America. worked on these old calculator ma- the highest admiration for the chair- Our Democrat colleagues love invest- chines that businesses use. His mama man of the Finance Committee. I am ment, but they hate investors. They kept all the books, his wife basically supportive of the tax cut he has crafted love the benefits of capitalism, but was working in their stationery shop, in committee. I intend to vote for it on they hate capitalists. An across-the- and Dicky Flatt did the printing busi- final passage if this amendment fails. board tax cut gives everybody a tax ness. They had an old building in But I believe we need a clearer vi- cut, and if people pay a lot of taxes, Mexia, and it was cracking right down sion. I believe we need to define very they get a bigger tax cut—not propor- the middle. They kept putting sand in precisely what we would like to use tionately, but they get the same tax the bottom and kept tar-papering over this tax cut to do, rather than running cut. If that offends you, if you believe the top. They had one bathroom, and it around trying to stick a nickel in that somehow people who make over didn’t have a door on it; it had a cur- everybody’s pocket with a targeted $50,000 a year are the enemies of the tain on it. So when you went in to use program. people and they ought to continue to the bathroom, you pulled the curtain. I would prefer to have a tax cut that be punished, you would want to be Now, they worked hard in that busi- has clear themes and this is a very sim- against this provision. ness. So now Dicky Flatt has torn ple substitute because it consists of The next thing this provision does is down that building. He has built a Mor- simply five things. So this is a tax cut it eliminates the marriage penalty. ton building, a metal building, and he that you can explain to every Amer- Most Americans are not aware of that has a good size print shop and sta- ican, and it contains basic principles because our Tax Code is so perverted, if tionery shop. He sent his two sons to that I believe every American can un- two young people, both of whom work, Texas A&M. They have come back and derstand and support. fall in love and get married, they, on have gone into business with him. He The first principle is we ought to average, pay the Federal Government works every day. He gets in at 6 and have an across-the-board tax cut of 10 $1,400 a year in taxes for the right to be leaves about 8. He is there on Saturday percent. Now, I know our Democrat married. My wife is worth $1,400, but until 6 o’clock. Whether you see him at colleagues are going to jump up and the point is, she ought to get the the PTA, Boy Scouts, or the Pres- down and say, first of all, that 32 per- money, not the Government. We elimi- byterian Church, try as he may, he cent of American families pay no in- nate the marriage penalty. never gets that blue ink off the ends of come taxes, and so if you have an Secondly, we have income splitting. his fingers. across-the-board tax cut, they will not Now, I know some of our Democrat col- Now, Dicky Flatt may be rich, for all get a tax cut. And that is right. Tax leagues are going to get up and say, I know. He doesn’t live like a rich guy. cuts are for taxpayers. If you don’t pay well, look, if the husband earns all the When his brother died of cancer, he taxes and we have a tax cut, you don’t money and the wife stays at home and took over his school supply business get a tax cut. Most Americans don’t raises the children, they ought not to with his wife. My basic point is that get food stamps; most Americans don’t get the correction for the marriage Dicky Flatt and Linda, his wife, have get TANF; most Americans don’t get penalty. Well, we do income splitting. worked 6 days a week their whole lives. Medicaid because they don’t qualify for We have decided we don’t want to in- They built up this business. Every those programs. If you don’t pay taxes, ject the Tax Code in the decision about penny they put into it has been in you don’t qualify for a tax cut. whether people work outside the home after-tax dollars. How can it be right to Our Democrat colleagues are obvi- or not. My mama worked every day force their two boys, who now work in ously going to jump up and down and that I was a child, and she did it be- that business, to sell that business say that Senator ROCKEFELLER, who cause she had to do it. My wife has when Dicky and his wife Linda die in pays 10 times as much taxes as I do, worked every day that our children order to give the Government 55 per- with a 10-percent across-the-board tax have been alive because she wanted to cent of it, in order to take the money cut, will get 10 times as big a tax cut. do it. I am not trying to distort the de- from Dicky Flatt and give it to people who have been sitting on their fannies That is right, but he pays 10 times as cision one way or another, or make a in Mexia, not working on Saturday, much taxes. If you ask people in your judgment. All I am saying is that peo- and in some cases, not working at all? church to take up money to build a ple who stay at home and raise their I am sure we are going to hear that new parsonage and it turned out you children contribute to America. They this is for rich people. I want to put a had taken up too much money, and you make a big contribution. By allowing a decided to give it back, isn’t the log- human face on it. couple, where only one of them works When we revolted against King ical way to give it back to simply take outside the home, to split their income George, he wasn’t doing things such as how much an individual gave and take and attribute half to each one of the death tax. This is an outrage. This the amount that you didn’t need and them—that is what the partnership of is an assault on every value this coun- give it back to them proportionately? marriage is about—we are able to give try stands for, and I want to repeal it So the point is, the first principle we them a substantial reduction in the and repeal it outright. believe in is there ought to be an penalty they pay for being married. I want to index the capital gains tax. across-the-board tax cut, so every The next provision is, we repeal the That is the fourth provision of this American who pays income taxes will death tax, which is a certain kind of bill. get a tax cut. Now, our Democratic col- death penalty. I like the death penalty I want to say that from this day for- leagues have said they believe if you where we put murderers to death. I ward, if you buy a house as an invest- are rich, which means you are in the don’t like the death penalty when ment and the price doubles and you sell upper half of the income distribution— working people die and we end up forc- the house for twice as much as you and they design that as roughly mak- ing their children to sell their business paid for it, you haven’t made any ing somewhere around $50,000—you or their farm. All over America, people money, you simply kept up with infla- don’t deserve a tax cut. In their pro- work a lifetime to build up a business tion. But under current tax law, you posal, you basically don’t get one. I or a farm, and then when they die, have to pay the Federal Government a want to remind my colleagues that by their children have to sell that busi- capital gains tax on the doubling of excluding people who pay 99 percent of ness or sell that farm to give Govern- your house’s price even though that the income taxes in America, they are ment 55 cents out of every dollar they new price will buy only the amount of excluding from a tax cut 62 percent of earned in a death tax. This provision goods you could have bought with the all homeowners, 66 percent of all Amer- repeals the death tax. money for which you bought the house. icans between the ages of 45 and 64, 67 Now, I know that our Democrat col- So the next thing we do is index the percent of all families who have chil- leagues are going to get up and say, capital gains tax for inflation. dren in their homes, 67 percent of all well, these are rich people. But I want Finally, we eliminate not the last full-time workers, 68 percent of all to give you an example. When I first outrage in the Tax Code but it is a big July 29, 1999 CONGRESSIONAL RECORD — SENATE S9655 outrage. If General Motors buys you remarks. Maybe when the Senator The $775 billion in real spending cuts health insurance, it is tax deductible from Texas was a Democrat he hated over the next ten years does not in- for them, but if you buy it for yourself, capitalism and he hated investors, but clude the spending we do to help the it is not tax deductible. We eliminate the Democrats around here don’t. One victims of hurricanes, earthquakes, that by saying that no matter who of the reasons we are not supporting tornadoes, floods, or any kind of inter- buys health insurance in America, the his amendment is that we think it is national emergency. employer or the employee, a retiree or bad for capitalism and we think it is But, for the moment, let us suppose a worker, a homemaker or someone bad for investors. that there will be no hurricanes, or who is employed in the economy, that I have to say that this amendment, earthquakes, or tornadoes, or floods in health insurance is tax deductible. which reflects what the House did, is a the next ten years. It is a simple tax cut that you can risky and radical amendment. It hurts Let us suppose that there will be no put on one piece of paper. If you pay the middle class. He says he loves the international emergencies that require taxes, you are going to get a 10-percent middle class. He talks about his our assistance. reduction in income taxes out of this momma and Dicky Flatt. And I love to Will Congress find the political will bill. It is easy to figure. If you pay hear him do it. But the bottom line is, to cut spending by three-quarters of a $1,000 in income taxes, you are going to the result of his amendment will hurt trillion dollars over the next ten years? get $100. If you pay $10,000, you are the very people he says he wants to Mr. President, Congress has yet to going to get $1,000. If that breaks your help because it is such an unfair tax demonstrate it can stay even within heart, so be it. I think most people will cut that would go to the very wealthi- the current spending caps, let alone like it. est and hurt the middle class and the find an additional three-quarters of a Second, we eliminate the marriage working poor. trillion dollars in cuts. penalty and we allow income splitting. I say to my friends who may be lis- Last fall, Congress passed an omni- If you have one parent who stays at tening to this debate, the Senator from bus appropriations bill that busted the home, you are able to divide the in- Texas is a great debater but he was current spending caps by more than $20 come in half and have each of them wrong when he said the Clinton plan billion. claim half that income that belongs to would lead to economic disaster and he This past winter, even before we them. This is endorsed by every family is wrong today. I hope we will vote passed a budget resolution, the Senate group in America because it is the down his amendment. passed another budget buster, S. 4, the right thing to do. I yield my time. military pay and retirement measure, We repeal the death tax outright over The PRESIDING OFFICER. The Sen- which over the next ten years would a 10-year period—no ifs, ands, or buts. ator from Wisconsin. add another $62 billion in spending. And just a few weeks ago, Congress If you live 10 more years, under this Mr. FEINGOLD. Mr. President, I busted the spending caps yet again bill, and you build something with thank the Senator from Montana. Mr. President, I rise to offer some with $15 billion in additional spending. after-tax dollars, it belongs to your Mr. President, this is not a record of comments on the reconciliation tax family forever. fiscal discipline. That is simple arithmetic. I think we measure we are considering. Nor is it the kind of record that can all understand it. First, let me note that we have come should give anyone confidence that the We index the capital gains tax so a long way in the last seven years. budget assumptions underlying this When I first came to the Senate, we that you never pay capital gains tax tax bill are sound ones. again on inflation. This is a big issue were facing an actual budget deficit of Mr. President, the assumptions un- for every homeowner and for every in- $340 million. derlying this tax bill are grounded not vestor in America. That was the real figure—the figure in fiscal reality but in political expedi- Finally, we provide full deductibility that did not use the Social Security ency. of health insurance. This is an equity Trust Fund balances to mask the def- But, let us assume that somehow, issue. It is something that ought to be icit. Congress was able to enact the three- done. Thanks in large part to the Presi- quarters of a trillion dollars in spend- This is a tax cut you can understand. dent’s deficit reduction package in ing cuts. It represents what I believe is the vi- 1993, and to a lesser extent the bipar- And let us further assume, as we did sion of the party of which I am proud tisan budget cuts of 1997, we are ap- earlier, that there will be no hurri- to be a member. I hope my colleagues proaching a truly balanced budget. canes, or floods, or earthquakes, or will vote for this substitute. I believe it I emphasize ‘’approaching,’’ Mr. drought, or any other kind of natural represents a dramatic improvement President, for we are not there yet. disaster for the next ten years. and simplification in the Tax Code. The budget projections of the Office And that there will be no more Bos- I reserve the remainder of my time. of Management and Budget, and of the nias or Kosovos or Iraqs—no inter- The PRESIDING OFFICER (Mr. AL- Congressional Budget Office, are just national emergencies of any kind for LARD). Who yields time? that—projections. the next ten years. The Senator from Montana. We do not currently have a budget Even under all of these assumptions, Mr. BAUCUS. Mr. President, I yield 1 surplus, not without including the So- would this tax proposal be a sound one? minute to the Senator from California cial Security Trust Fund balances. The answer is no, because even if and then 10 minutes to the Senator Mr. President, I do not mean to mini- each and every one of those rosy sce- from Wisconsin, off the bill. mize the wonderful budget turnabout narios comes true, this bill would use The PRESIDING OFFICER. The Sen- that has been achieved. over $75 billion in Social Security bal- ator from Delaware controls the time But we should not be building mas- ances to pay for the tax breaks. in opposition. sive new commitments on a shaky Mr. President, I strongly oppose Mr. BAUCUS. The Senator from foundation of questionable budget as- using Social Security to fund tax cuts; Delaware delegated that to the Senator sumptions. that is why I voted against the 1997 tax from Montana. And that is just what we have. cut package. The PRESIDING OFFICER. The The assumptions underlying the tax We simply should not be using Social Chair thanks the Senator for that clar- measure we will debate depend on Con- Security balances—balances needed to ification. gress making cuts of $775 billion in real pay future benefits—to fund other gov- The Senator from California is recog- spending over the next ten years com- ernment programs, or to pay for tax nized. pared to current levels. cuts. Mrs. BOXER. Thank you, Mr. Presi- Let me note that this level of cuts Of course, some may argue that even dent. I thank Senator BAUCUS. does not include any additional cuts more spending cuts will be found in My colleague from Texas says the that might have to be made in order to order to avoid the use of Social Secu- Democrats hate investors and the offset the cost of unanticipated emer- rity balances—on the top of the three- Democrats hate capitalism. As a gencies. quarters of a trillion dollars in cuts as- former stockbroker, I deeply resent his Let me repeat that, Mr. President. sumed in this measure. S9656 CONGRESSIONAL RECORD — SENATE July 29, 1999 Mr. President, granting even this heavily skewed to some of the wealthi- sources to help increase the number of still rosier scenario, would this tax est individuals and corporations in the winners and decrease the number of measure be fiscally responsible? world. losers. I regret that it would not, because As was noted by the tax watchdog Mr. President, this tax bill and the not only does this tax bill risk our cur- group Citizens for Tax Justice, the tax House version both squandered that op- rent budget, it puts future generations bill gives three-quarters of its benefits portunity as well. at risk as well. to the best-off fifth of all taxpayers. We might have had a significant Mr. President, while the revenue im- By contrast, only 11 percent of the start on real . pact of any tax cut measure can be ex- tax bill’s benefits go to the bottom 60 Instead, we got a grab bag of goodies pected to grow over time, the policies percent of all taxpayers. for special interests added to a tax code outlined in this measure explode. While the average tax reduction for already thick with complexity. Consider that while in the next ten the wealthiest 1 percent of taxpayers— A recent article in the Washington years, the cost of this proposal is an al- those with incomes over $300,000—is Post listed a number of the special in- ready whopping $800 billion—if those over $23,000 a year under this bill, those terest tax breaks in this bill and the tax policies are continued, the cost in with more average income do not do House version. the second ten years will be a nearly quite as well. They include tax breaks for: multi- unbelievable $2 trillion. The average tax cut for those who national corporations, utility compa- If you add the additional interest are among the middle fifth of tax- nies, railroad, oil and gas operators, payments that will arise from debt payers will be $279, or about $5 per timber companies, the steel industry, service, the total cost of the tax poli- week. seaplane owners in Alaska, sawmills in cies in this bill rise to over $3 trillion. For those in the bottom three-fifths Maine, barge lines in Mississippi, Es- For those who may have forgotten, of all taxpayers, the average tax cut is kimo whaling captains, and Carolina let me remind my colleagues that it is even smaller—about $140 per year, or woodlot owners. in that second ten years when the baby less than $3 per week. This bill is a dream come true for boomer generation begins to retire and Mr. President, under this $800 billion business lobbyists. The Post reported one lobbyist as put increased pressure on Social Secu- tax bill, the majority of taxpayers will saying, ‘‘If you’re a business lobbyist rity, Medicare, and the long-term care have an average tax cut of $3 per week. and couldn’t get into this legislation, services provided under Medicaid. Maybe the proponents of this bill are If ever there were a time to be pru- hoping most of America will use this you better turn in your six-shooter.’’ Mr. President, in the name of com- dent, now is the time. windfall to buy one of those overpriced plete disclosure, let me note that I un- As improved as the short-term budg- cups of coffee. derstand the Democratic alternative, et picture is, the longer-term budget Well, Mr. President, thanks to this which I may support, suffers from the picture is little changed. tax bill, once a week, three-fifths of same problem, though to a much lesser We still face serious problems in America will now be able to go to one extent. Medicare, and as I noted, the baby of those fancy coffee shops and get a And it will come as no surprise to my boomer generation will put enormous frothy decaf cappuccino latte with colleagues that I firmly believe this pressure on that program, as well as on skim milk. kind of pandering to special interests is the long-term care services, many of This tax bill is a bad tax policy any a direct result of our campaign finance which are provided through Medicaid. way you brew it. system. There is also a consensus that we Mr. President, I recognize that some There’s ample evidence to that effect should address the long-term fiscal may genuinely believe we should dedi- right here in this bill. health of Social Security, and the cate about $800 billion to tax cuts over The campaign finance system gives sooner the better. the next ten years. wealthy interest an open invitation to And finally, Mr. President, we still The tragedy is that even in that con- influence legislation in this body, and face a mountain of debt that was run text, the $800 billion was spent un- in this bill it’s clear that special inter- up during the 1980s and early 1990s be- wisely, because in addition to Social ests accepted that invitation in droves, cause of the deficits that were run up Security, Medicare, long-term care, Mr. President. during that time. and reducing our national debt, one of For the benefit of my colleagues and In each of these areas, there is a our highest priorities should be signifi- the public, I’d like to share just a few stark choice: we can act now to address cant reform of our tax code. examples of what these interests gave each of these areas; or, we can ignore It was just a few months ago that we in PAC and soft money, and what they them, watch the problems get much heard how critical fundamental tax re- got in either this bill, the House tax worse, and leave the work and cost of form was to our future. measure, or both. reform to our children and grand- , consumption tax, a national I do this from time to time; it is children. value-added tax—there were a number known as ‘‘The Calling of the Bank- Mr. President, for me, that’s an easy of significant proposals that sought to roll.’’ choice. address the inefficiency of our current According to the Washington Post, I do not want my children footing the Tax Code. an umbrella organization called the bill for the failure of past generations Simplification was the order of the Coalition of Service Industries, a coali- to act responsible. day, and let me add, Mr. President, tion of banks and securities firms, won I want to support a tax cut, but not that while I did not support many of a provision to extend for five years a one that jeopardizes the work we have those proposals, I think many of the temporary tax deferral on income done to straighten out the current proponents of reform got it exactly those industries earn abroad. The value budget and squanders the opportunity right. of this tax deferral: $5 billion over ten to reduce our debt and put Social Secu- Our Tax Code should be simplified. years. rity, Medicare, and our long-term care We should reduce the number of spe- So we know what Congress has given system on sound footing. cial interest tax breaks and use that the Coalition of Service Industries, but Mr. President, let me take a moment savings to lower the tax rates for ev- what has the Coalition of Service In- to look at the make-up of the tax eryone. dustries given to candidates and the measure itself. I participated in just that kind of ex- political parties? During the 1997–1998 One might expect that a tax cut of ercise at the State level as chair of the election cycle, coalition members gave $800 billion would provide the sort of Taxation Committee in the Wisconsin the following: broad-based tax benefits that would be State Senate. Ernst & Young—more than half a politically attractive. As we all know, there will be winners million dollars in soft money, and But given the amount of revenue and losers in a reform of our tax code, nearly $900,000 in PAC money. dedicated to this tax cut, the benefits and I can tell you from direct experi- CIGNA Corporation—more than to the average taxpayer are surpris- ence that the best time to enact tax re- $335,000 in soft money, and more than ingly small, and the overall package is forms is when you have additional re- $210,000 in PAC money. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9657 American Express—more than Mr. ROTH. Mr. President, Senator is so backloaded. It is so top heavy. By $275,000 in soft money and nearly GRAMM has provided Members with a that, I mean the bulk of the cost of the $175,000 in PAC money. straightforward alternative to the bi- provisions are at the very end—6, 7, or Deloitte and Touche—more than partisan Finance Committee bill. I 8 years from now. No one can predict $225,000 in soft money and more than compliment him on the clarity of his the future of this country and what po- $710,000 in PAC money. approach, much of which I favor. Al- sition we will be in 6 to 8 years from Of course, as I said Mr. President, though provisions of Senator GRAMM’s now. this is just a sampling of what Coali- substitute have appeal for me, frankly, I was speaking to the CEO of a major tion of Service Industries members I could not have used it as a basis for American company a few days ago, a have given. I’d be up here a lot longer the Finance Committee. His proposal man we all know, a company we all if I had a document all the millions of contains elements that would not gar- know very well. He told me they can’t dollars these groups have given. ner a majority of committee members. begin to plan for the future. They do But it doesn’t stop there. These two In addition, Senator GRAMM’s sub- have 5-year plans but they know the 5- tax bills mean Christmas in July for stitute, though popular with many in year plans are not going to be accu- special interests, Mr. President, with the Senate Republican caucus, would rate. So they have to just do the best gifts for jut about every industry in not pick up support on the other side of they can on virtually a quarterly basis. Santa’s bag. the aisle. For that reason, his proposal They have to go ahead in the areas The post reports the utility industry would not be a blueprint for tax cuts, they think are the areas of the future, got a provision affecting utility merg- in the form of a signable bill, that we but it is almost impossible to plan in ers in the House measure, which, if it can deliver to the American people this modern era. survives, is worth more than $1 billion now. So I say, if we today were to lock in to the utility industry. The provision Finally, although Senator GRAMM’s provisions in the law which will hemor- would excuse the payment of taxes on amendment is simpler, it leaves out rhage this country’s budget surplus the fund that utilities set up to cover many bipartisan tax measures that ad- based upon ephemeral, distant projec- the costs of shutting down nuclear dress important tax issues. For in- tions which are never accurate, that is power plants. stance, education savings incentives Utilities companies that operate nu- not responsible. That is not the right are deleted. This means parents who thing to do. And that is what this clear power plans would be particularly want to save for a child’s college edu- grateful to see this provision passed, amendment does. That is why basi- cation would be left out of the picture. cally, fundamentally, without going Mr. President. We’re talking about millions of parents Their depth of their gratitude would into all the details of it, why this does and students in every state. not make sense. It has often been stat- be matched only by the size of their Yet another example is the student campaign contributions during the last ed during this debate that the time loan interest deduction. Under the Fi- when the begin to retire election cycle, including: nance Committee bill, at least three Entergy Corporation, which gave is when these things really start to million graduates, bearing the burden kick in and the costs explode. $228,000 in soft money and nearly of college debt, would be allowed to de- I think prudence is the watchword $250,000 in PAC money; duct student loan interest on their tax Commonwealth Edison, which gave here today. History sometimes is a returns. guide. Look at the 1980s. What hap- $110,000 in soft money and more than In my legislation I try to focus on pened in the 1980s? There was a huge $106,000 in PAC money; matters of need to the American fam- And Florida Power and Light, which tax cut. Congress succumbed to the ily. I provide incentives to promote gave nearly $300,000 in soft money and siren song of supply side economics. savings, pensions, IRAs. Many in re- more than $182,000 in PAC money. What was supply side economics sup- tirement depend not only on Social Se- As it does so many other issues, our posed to do? It was supposed to make curity, which we will address, but also campaign finance system is preventing deep tax cuts, spend more on defense, on personal savings and pensions. My real reform to our tax code, and those and guess what, folks, that is going to bill addresses that. There is nothing to who doubt that only need to look at cause the budget to be balanced. That correct the problems of AMT, the alter- this bill. was what supply side economics was native minimum tax. Unfortunately, Mr. President, the best thing we can supposed to do—advocated, by the pro- thousands upon thousands of American say about this tax bill is that it will ponents of this amendment. It was families will be hit by AMT and not not be enacted into law. going to balance the budget. enjoy the full benefit of many pro- The President will almost surely veto The theory is the trickle down the- it, and he will be right in doing so. grams such as the child . Finally, nothing is done with respect ory: Cut the taxes of the most wealthy, This bill is fiscally irresponsible. they invest a lot more, it trickles down It depends on budget suppositions to charitable giving. We have proposals that will promote and create incen- and the economy starts humming and that are at best fanciful. it balances the budget. That was the It uses Social Security balances to tives. Laffer curve. Guess what, it did not pay for tax cuts. For these and other reasons, I must work. We kind of knew it was not going It proposes a tax policy that no only oppose Senator GRAMM’s well-inten- to work, but it was such a temptation, jeopardizes our current budget but our tioned amendment. such a siren song to vote these huge future fiscal health. I reserve the remainder of my time. It sticks our children and grand- Mr. BAUCUS. Mr. President, I yield tax cuts, hoping, hoping, hoping that children with the cost of paying-off the myself such time as I might consume. what the proponents said would come debt run up over the past two decades, The Finance Committee has already true. Guess what, it did not. It did not and leaves them the task of extending rejected this provision. The Finance come true at all. the solvency of Social Security, Committee deliberated this amend- The tax cut was passed in 1981. Then strengthening Medicare, and reforming ment in committee, and, by a large what happened in 1982? This Congress, our long-term care system. margin turned it down because it is ex- a Republican Congress, and President And it hands our special interest tax cessive. It is irresponsible, in my judg- Reagan, had to change course. They breaks galore while providing little tax ment. It is not the right thing to do. It had to raise taxes. The Republican relief to the vast majority of tax- says we are going to take the entire Congress and Republican President payers. on-budget surplus. And because of the raised taxes in 1982. Then guess what. Mr. President, I will vote against this tax cut plus the lost interest on the This tax increase was not enough be- bill, and urge my colleagues to do so as debt, there is nothing left for Medicare, cause the deficits were just so large. well. discretionary spending or any other The Republican Congress and Repub- Mr. President, I yield the floor. programs which will be cut anyway by lican President had to raise taxes again Mr. BAUCUS. Mr. President, I yield 5 a very large margin. in 1984. They had to raise taxes more minutes to my good friend from Dela- It is excessive, too, compared to the because the deficit was so large. The ware, Senator ROTH. bill passed by the committee because it national debt in 1980 was roughly about S9658 CONGRESSIONAL RECORD — SENATE July 29, 1999 $1 trillion; 8 years later it was roughly some notions of fairness of a particular we cannot say let’s give everybody the $3 trillion, maybe close to $4 trillion. It congressional makeup at some par- same dollar amount back in taxes re- tripled and quadrupled during that ticular time. So now we have wound up gardless of how much they paid in be- time of the huge tax cuts. Then we had with higher rates and a narrower base. cause we have a very progressive sys- to add more taxes back again in 1982 We now have five income tax rates in- tem. and 1984. stead of the two we had back in 1986 in We have progressive tax rates up to So, in many ways this is history re- addition to phaseouts. The Tax Code, 39.6 percent, with phaseouts so that if peating itself. Democrats in the Senate not only do we have additional rates, it you are making any money, if people support a tax cut. We support using a has become more progressive, even in are working hard and making a pretty third of the on-budget surplus to pay addition to those rates. good living, they begin to lose the de- for a tax cut. But we are just saying I do not think a lot of people are ductions and credits. That makes it don’t use all of the on-budget surplus aware of this. I think most Americans even more progressive. for tax cuts with virtually all going to think initially, basically, they can We come along and say we are going the most wealthy Americans. look at tax rates and see what their to give a tax cut now, and we say if the Do you know what else is going on tax burden is. But then you look at all other guy is paying twice as much in here? I do believe the proponents of the phaseouts that we have. Congress taxes as I am, give him a tax cut. He this bill are so—not distrustful, but so has decided in its wisdom that people lost all these exemptions because he is opposed to Government that they want of a certain income level do not de- making good money. He is paying these huge tax cuts partly to force serve some of the deductions, exemp- twice as much in taxes. But we come down deeper cuts, way below the base- tions, and benefits that others deserve. along with a tax cut and we say they line in spending. I think they want to So we have a personal exemption are going to both get the same amount cut veterans’ benefits 30 percent; they phaseout. back? I do not think that makes much want to cut health education 20, 30 per- We have an itemized deduction sense. cent; want to cut these programs. I phaseout at basically the $124,000 level Let’s say the economy was good and think there are really many on that for individuals. I am talking about in- we were able to have successive tax side who want to make these cuts. dividuals and not couples, in terms of cuts over a period of time and we gave They want to. As strange as that might the dollar amounts I am using. The the same dollar amount back to every- sound, they want to. That is another personal exemption phaseout; itemized body regardless of how much they were reason for this huge tax cut because it deduction phaseout, limitation of only paying in taxes. We would have a nar- will force cuts in spending later on. being able to deduct that amount over rower and narrower base all the time We have already cut spending. Dis- 2 percent of itemized deductions; a 7.5 and fewer and fewer people paying any cretionary spending has been cut so percent floor on medical deductions; a taxes at all. We would continually be much by this body over the last 10 10 percent adjusted gross income floor taking people off the tax rolls. We al- years it is unbelievable. And the size of on casualty deductions; a $500 child ready have 43 million people who do government has gone down, with many credit that phases out at an income not pay taxes. fewer federal employees than there level of $75,000; a dependent child credit As progressive as our Tax Code is, as were years ago. that begins to be phased out at an in- does the Senator from Texas, I make To sum it all up, we have seen this come level of $10,000—if you make that no apologies for the proposition that provision in the Finance Committee. much it begins to be phased out; a de- when it comes time for a tax cut, let’s The Finance Committee soundly re- ductible IRA, $30,000; an education IRA, base the tax cut on how much people jected this amendment. I urge the Sen- $95,000; the HOPE credit, college credit, are paying in. ate to also soundly reject this amend- begins to be phased out at $40,000 for an We have to ask ourselves a funda- ment. It is not good policy. individual. So we want to help you go mental question: Are we interested in I reserve the remainder of our time. to college, we want to help your kids punishing folks who make a good living The PRESIDING OFFICER. The Sen- go to college—as long as you do not or are we interested in collecting ator from Texas. have a job, basically is what that money for the Federal Government to Mr. GRAMM. Mr. President, I yield amounts to. pay legitimate Government expenses? 10 minutes to the distinguished Sen- We have a life-time learning credit of History shows every time we have had ator from Tennessee. $40,000; student loan interest deduc- a reduction in tax rates, we have more The PRESIDING OFFICER. The Sen- tions, at $40,000 it begins to be phased money. Every time the Government re- ator from Tennessee. out; education savings bond interest— duces rates in any appreciable amount, Mr. THOMPSON. Mr. President, I if you make $52,000 you begin to lose the Government winds up getting more think Senator GRAMM is bringing a that; elderly/disabled credit, $7,500; money. very important principle to the table, adoption credit/exclusion, $75,000; DC In the 1920s, it was true. In the 1960s, one that we need to address: If we are first time homebuyer—if you make under President Kennedy, who said a going to have a tax cut, what kind of $75,000, you begin to have that phased rising tide lifts all boats, it was true. tax cut should we have? What is best out as a taxpaying individual; rental In the much maligned 1980s, which laid for the economy, and what is fair? real estate losses; rehabilitation tax the groundwork for the greatest eco- There was a consensus in this coun- credit—on and on and on. nomic prosperity this world has ever try, 10, 15 years ago, that we needed to In addition to continuing to raise the known, it was true. have a tax policy based upon a broader tax rate—the highest one in 1986 was 28 Increased revenues in the twenties base and lower rates. That is essen- percent and now it is up to 39.6 percent was 61 percent over a 7-year period. In tially the tax bill that came out in plus the maximum—plus the limited the sixties, a revenue increase after in- 1986. We came down to two tax rates. itemized deductions and phaseout of flation was about 33 percent. In the We had a 15-percent and a 28-percent personal exemptions, you wind up with eighties, after cutting the tax rates, tax rate. There was a broader base, an effective rate of over 40 percent. revenues increased 28 percent because where more people were paying taxes, When you remove the cap on Medicare it reduced the incentive to hide in- but lower rates. tax, plus these phaseouts, you are look- come, to shelter income, and to under- In the 1990s, we have gotten away ing at, in some cases, close to an effec- report income. from that. We have gotten away from tive 45-percent tax rate, something like Similarly, the share of the tax bur- that principle and gone, instead, to- that. den paid by the rich rose dramatically ward what has been referred to as tar- My only point is that, as we decide as the rates fell. By cutting rates, we geted tax cuts. That its basically the how to go forward, we need to under- get more money out of the rich. Government—we, the President—that stand that we have a progressive sys- Do we want to be concerned about decide, on an individual basis, who de- tem as far as our income Tax Code is how much somebody is making and try serves the tax break or tax cut in any concerned, and that is the way it ought to hold that down or do we want the particular year. Usually it is based to be. A lot of people believe it is that money for the Federal Government? I upon how much clout they have, or way. But every time we have a tax cut, thought the idea was to have a fair Tax July 29, 1999 CONGRESSIONAL RECORD — SENATE S9659 Code but to raise the money for the le- tempt to argue against the need for radical difference in terms of what we gitimate expenses of the Federal Gov- this tax relief package. But I do have stand for and what we fight for and ernment. an argument when they attempt to what we have passion to change. I want In the 1920s, they called rich $50,000. I change facts and debunk what was— to describe a little of that difference. guess things have not changed that and continues to be—a tremendous eco- But first I want to go back to what much. But in 1921, the rich paid 44 per- nomic legacy. some would call ‘‘the good old days.’’ cent of the income tax. In 1928, after First, let me make it clear that cut- Let’s go back to the year just before we the rate cut, they paid 78 percent of all ting taxes to keep the economy strong passed, by one vote, the bill that in- taxes. The gap was not quite as pro- did not begin with President Reagan— creased some taxes for a few people in nounced later on, but in 1963 under nor is the idea isolated to one political this country, cut some taxes for others, President Kennedy, at the time of the party or the other. cut some spending, and put this coun- cut, the rich were paying 11.6 percent In the 1960s, President Kennedy ush- try back on track with an economic of all the taxes being paid. In 1966, they ered America into economic expansion plan that resulted in where we are were paying 15.1 percent. In the 1980s, with his own historic tax cuts. today. we were talking about the top 10 In fact, in recalling our history it In 1993 I voted for that package. We percent—— might help us to remember President did not get one vote from the other The PRESIDING OFFICER. The Sen- Kennedy’s statement to the Economic side of the aisle—not one. It passed by ator’s time has expired. club of in December 1962. On one vote in the House, one vote in the Mr. THOMPSON. I ask for another 3 that occasion, he said: Senate. We did not get one vote to help minutes. us from the other side of the aisle. Our true choice is not between tax reduc- In fact, some on the other side of the Mr. GRAMM. I yield the Senator an- tion, on the one hand, and the avoidance of other 3 minutes. large federal deficits on the other. It is in- aisle stood up and said: If you pass The PRESIDING OFFICER. The Sen- creasingly clear that...an economy hampered this, this country is going into a de- ator from Tennessee. by restrictive tax rates will never product pression. If you pass this, it will ruin Mr. THOMPSON. In the 1980s—1981— enough revenues to balance our budget just the American economy. It will throw the rich were paying 48 percent of the as it will never produce enough jobs or people out of work. It will injure this taxes. In 1988, they wound up paying 57 enough profits. country. Well, we passed it anyway. percent of the taxes. We do not get a Second, the facts concerning Presi- Do you remember those days? The lot of credit taking up for the rich, but dent Reagan’s economic record are Federal deficit then was $290 billion our responsibility as public servants is very clear: everyone benefited from the and growing. We had nearly 10 million to look out for the country and have broad based 25 percent across-the-board Americans out of work, looking for a policies that are going to get the most tax cuts signed into law by President job. The Dow Jones Industrial Average money and not try to be too concerned Reagan. The facts show that all income just barely reached 3,000. Inflation was about who is going to get this share of groups saw their incomes rise during double what it was last year. There were 97,000 business failures. the economic pie: I am going to get the period of 1980 to 1989. The facts Then we passed a piece of legislation yours; you are not going to get mine. show that during that period, the mean average of real income rose by 15.2 per- that put this country back on track— Our concern should be with making over the objections, I might add, of the that economic pie better. cent, compared to a 0.8 percent decline from 1970 to 1980. folks who bring—— As far as an across-the-board cut is Mr. REID. Will the Senator yield? And what of record-setting deficits? concerned, every serious observer now- Mr. DORGAN. I am happy to yield. adays thinks it is sound economic pol- Did cutting taxes 25 percent across the Mr. REID. The Senator from North icy. Lawrence Lindsey, former Federal board deplete the Treasury revenues? Dakota—this is a question—indicated Reserve Board member, George Shultz, Absolutely not. Again, the records, the that the Democrats did not receive a former Secretary of State, and even facts show that Federal revenues actu- single Republican vote in the 1993 the oft quoted Chairman Greenspan— ally exploded. As Americans grew in budget; is that true? there may be some discussion as to wealth, Treasury revenues grew. Be- Mr. DORGAN. That is correct. when he thinks a tax cut should come tween 1981 and 1987, they grew 42 per- Mr. REID. Does the Senator also re- about, but he says when it comes cent. member some of the statements of about, it ought to be an across-the- The deficits remind my debunking doom made? board rate reduction. This is sound eco- colleagues—were not created by cut- Mr. DORGAN. I do, indeed. nomic policy. ting taxes and stimulating economic Mr. REID. Do you remember this one I know the prospects for this par- growth; they were the product of a made by the author of this amendment: ticular amendment, but all of this busi- Congress that refused to hold the line I want to predict here tonight that if we ness about soak the rich and unfair- on spending. While revenues increased adopt this bill the American economy is ness, we need to keep a little balance 42 percent, following those tax cuts, going to get weaker and not stronger, the and keep things in mind. If we want spending increased by 50 percent. deficit four years from today will be higher And, my colleagues, that is unlikely than it is today and not lower . . . when all more money, if we want to be fair— is said and done, people will pay more taxes, first of all, we have to recognize we to happen after this tax relief package the economy will create fewer jobs, Govern- have a very progressive system in this becomes law, as Congress is largely ment will spend more money, and the Amer- country, so when it comes time for a controlled by the same individuals ican people will be worse off. tax cut, let’s pay some attention to the who—2 years ago—passed the first bal- Do you remember that statement? idea of across the board and not have anced budget in a generation. Mr. DORGAN. Of course I remember politicians deciding the detailed tar- Mr. President, I yield the floor. that. There were predictions of doom, geted tax cuts for their favorite people, Mr. HOLLINGS addressed the Chair. saying, if you pass this, you are going but make it across the board. It is The PRESIDING OFFICER. The Sen- to throw this country into a tailspin. more fair, and it will get more money ator from South Carolina. This is a country that had a $290 bil- for the Federal Treasury. I yield the Mr. HOLLINGS. I yield the distin- lion deficit, an anemic economy, with floor. guished Senator from North Dakota 10 10 million people out of work. This is a The PRESIDING OFFICER. The Sen- minutes off the bill. country that desperately needed a ator from Delaware. Mr. DORGAN addressed the Chair. change in direction. We made it with- Mr. ROTH. Mr. President, I yield my- The PRESIDING OFFICER. The Sen- out the help of one vote from the other self such time as I may take off the ator from North Dakota. side. bill. Mr. DORGAN. Mr. President, what a Frankly, I thought a couple of the Mr. President, a number of my col- remarkable debate. At a time when so folks you referenced were going to do a leagues have attacked the Reagan tax many Americans think so much in pol- half-gainer off the Capitol Dome, they cut. With that I strongly disagree. itics is fuzzy and they can’t see much were so upset about us changing the I have no argument with those who of a difference between the two parties, fiscal policy of this country. But we did want to bring up history in their at- this is a bright-line test. There is a it. S9660 CONGRESSIONAL RECORD — SENATE July 29, 1999 Guess what happened. Guess what said to the folks I represent: Don’t portunities and its future economy. happened. This country’s economy has blame me for voting for that. Give me Conservatism apparently means put seen robust . Seven credit for it because I stand behind this the country at higher risk. If you see a years later, we do not have a budget program. We did what was necessary to glimmer of a prospect of an estimate deficit. No, we do not have a $290 bil- put an end to these Federal budget by an economist that there might be a lion, and growing, budget deficit. We deficits and to put this country’s econ- surplus, rush to the floor of the Senate have a budget that is nearly in balance. omy back on track—over the objec- and propose a three-quarters-of-a-tril- Economists are predicting surpluses for tions of a lot of folks in this Chamber lion-dollar tax cut. Is that conserv- the next 10 years—I might point out, who today are telling us they have a ative? the same economists who predicted in new vision, a new idea. It was a perfect symmetrical propo- the early 1990s we would have a full We have heard their ideas. An old fel- sition that, on the floor of the Senate decade of sluggish, anemic growth in low in my hometown—a small town— yesterday, the first vote was to waive this country. once told me: Never buy something points of order that would exist against I mentioned yesterday these are the from somebody who is out of breath. their bill, waive points of order for a same economists who can’t remember There has been an almost breathless conference report that has not yet been their home phone number or address quality to the efforts by the majority written, for a conference that has not telling us what will happen 3, 5, and 10 party, for 6 months, to get to the floor been held. That was, in my judgment, years from now. We ought to be careful as quickly as they could with their tax in perfect symmetry to the proposition about these predictions. We do not cuts. they bring to the floor to provide tax have a budget surplus yet. The 10 years If this is a battle of the pie charts, I cuts, paid for with surpluses that don’t of estimated $3 trillion surpluses do say you win, we just give up. Here is a yet exist. What perfect symmetry. But not exist, and we have folks on the pie chart. Let me just show you. Let us how perfectly awful as public policy to floor who are breathless to try to deal just right at the start of this discussion do that and put the country at this with them through tax cuts. say: You win; this is your pie; if it is a risk. Mr. REID. Will the Senator yield for battle of the pie charts, you get the pie We have some choices. The choice is another question? award. Republican tax breaks: $23,344 that we have good economic times in Mr. DORGAN. I am happy to. for the top 1 percent of the income the future. Let us all hope and pray we Mr. REID. I ask my friend from earners. So you win the pie award. do because that is good for this coun- South Carolina, who is managing this Of course, these folks down here, try. More people are working. Fewer bill, that whatever time I use asking they pay taxes, too. They all go to people are on welfare. The country is these questions be yielded off the bill work. They pay payroll taxes. Eighty growing, less inflation. It is a wonder- so the Senator does not lose his time. percent of the people in this country ful opportunity we have in this coun- Mr. HOLLINGS. Yes. pay more in payroll taxes than income try. But the same people who opposed Mr. REID. I say to my friend, the taxes. the fiscal policy that got us here have statement I read to the Senator just a But you breathlessly run to the floor decided they want to create a new fis- short time ago was given August 5 by of the Senate with a bill that says let’s cal policy and a new strategy that puts the author of this amendment that we cut income taxes, because that allows all of that at risk. They know we are are now debating. A day later, on Au- you to give a huge portion of this pie heading towards a serious problem. gust 6, do you remember this state- to the largest income earners in this The PRESIDING OFFICER. The time ment? I quote: country. In the meantime, there are of the Senator has expired. I believe that this program is going to folks working today for the minimum Mr. DORGAN. I ask for an additional make the economy weaker. I believe that wage, $5, $6, $7 an hour, who pay a pay- 5 minutes. hundreds of thousands of people are going to roll tax, a big tax, pay more in payroll Mr. HOLLINGS. An additional 5 min- lose their jobs as a result of this program. I believe that is one of those peo- taxes than they do in income taxes. utes. ple. Are they going to get a tax cut? No; Mr. DORGAN. We are heading toward The fact is, does the Senator from they don’t count because they ‘‘don’t a demographic time bomb in both So- North Dakota realize that there have pay taxes.’’ They are not taxpayers ac- cial Security and Medicare. The ques- been 18 million jobs created in those 7 cording to this strategy and this kind tion is, If these surpluses exist, what years? Hundreds of thousands losing of philosophy. That is what is wrong shall we do with them; reduce the Fed- their jobs? with it. eral debt? That has gone from $1 tril- You do remember this statement, Let me just run through a couple lion to $5.7 trillion in two decades. Re- don’t you? charts. duce the Federal debt? The answer of Mr. DORGAN. Oh, I do. In fact, the One of my colleagues showed this the Republicans is no. How about ex- same people who made those pre- earlier this morning. I want to show it tend the solvency of Social Security dictions that were so wrong are now again. because we know we face this problem. telling us they have new predictions The bottom 60 percent of the income Older people living longer; fewer people and we should believe the new pre- earners, under this plan, will get $141 working to support them. Extend the dictions. in tax breaks a year; the top 1 percent, solvency of Social Security? No. How Mr. REID. I say to my friend, do you $23,344 a year. And people say: How about extending the solvency of Medi- also understand that since this state- dare you tell us this benefits the rich. care? No. ment was made we have had the lowest How dare we? It happens to be the fact. The only answer coming from that inflation, the lowest unemployment, in As I said, so much of is fuzzy. side of the aisle is take three-quarters some 40 years? Does the Senator ac- But you do not need strong glasses to of a trillion dollars, package it up, put knowledge the fact that the deficits, see this chart. There is nothing fuzzy a huge bow around it, and then bring it when these predictions were made, about this. If you decide you do not to the floor of the Senate, and then which were about $300 billion a year, want to do this, then do not do it. It is complain about a pie chart that shows are now down to nothing? Does the easy to amend your bill. If it is not they have cut out the biggest piece for Senator realize that? your intention to give the bulk of the the wealthiest Americans. Mr. DORGAN. The economy has per- tax cut to the wealthiest Americans, Mr. DURBIN. Will the Senator yield formed in a way no one expected. But then do not do it. But do not complain for a question? we knew that the direction this coun- to us that we are calling attention to it Mr. DORGAN. I will. try was headed in was wrong—$290 bil- when you do it. If you do not stand be- Mr. DURBIN. I suggested that the lion in a year in deficits, and heading hind it, then change it. amendment being offered by the Sen- up; more inflation, more people out of My problem is this: I don’t under- ator from Texas, which as I understand work. And we proposed to change the stand what conservatism means any- it, is the House version of the tax cut, fiscal program for this country. more. I thought being conservative is even worse than the Senate version It took some guts to vote for it be- would be to try to put this country at when it comes to helping working fam- cause it was not very popular. But I a lower risk with respect to future op- ilies, and frankly, I think, gives the July 29, 1999 CONGRESSIONAL RECORD — SENATE S9661 word ‘‘conservative’’ a bad name. I ask We can fairly well call the House legisla- versation, most Members of the Senate the Senator if he would consider the tion the most outrageous tax package in the who are supporting this three-quarters- following: last 50 years. It is worse than the 1981 ex- of-a-trillion-dollar tax cut would admit In this Nation where we revere free cesses. You have to go back to 1948. that a better approach for this country speech, we basically let people say The PRESIDING OFFICER. The Sen- and its future and certainly its chil- what they want to say. Some people ator’s time has expired. dren would be to use anticipated sur- Mr. HOLLINGS. Two additional min- have gone so far as to suggest that to- pluses, first, to begin to pay down the utes. morrow will be the end of the world. Federal debt. If during tough times you Well, when tomorrow comes and goes Mr. DORGAN. The point I am mak- ing is this: This is not a Democrat run up the debt from $1 trillion to $5.7 and the world doesn’t end, most of trillion and then in good times you those people shrink away. talking. This is a Republican saying this. We all know what is in this legis- say, but we can’t pay down the debt, The people who are offering this there is something fundamentally amendment, in 1993, said the Clinton lation. This legislation is a piece of legislation that does what is always flawed about that strategy. plan for deficit reduction was the end I think if you take all the politics of the economic world for America. We done by the same suspects that bring this to the floor. They are always shad- and fuzz out of this and get in a quiet would see deficits as far as the eye corner, those who are really conserv- could see. We would have unemploy- ing, not just shading, they are gal- loping towards the highest end of the ative and have conservative values ment, high inflation, the economy was about these issues as embodied in the in terrible shape. As a result, not a sin- income ladder to provide very signifi- cant cuts. The folks on the lowest rung fiscal plan we passed in 1993, I think gle Republican would vote for the Clin- they would admit that we ought to ton plan. of the ladder, they pay payroll taxes and they are told they don’t count. So take some of this surplus and reduce I ask the Senator, did the world end, Federal indebtedness. I think they as Senator GRAMM and others sug- the lowest 20 percent are going to get a $22 tax break; the top 1 percent, $23,300. would also admit there is not an inten- gested, with this Clinton plan? The tion to kick 100,000 kids off of Head same group is suggesting to us today So the question is, when you stand up and say that is unfair, what is unfair? Start or to decimate the education pro- that Alan Greenspan is wrong, Bill gram. Yet that is where we are headed, Clinton is wrong again, and that we That we are telling people what is in your bill? Is that unfair? Do you want on auto pilot, because this surplus is have to pass this tax break for wealthy garnered by those who want to package people which will endanger our econ- to change the bill? Do you deny this? Do you want to change the bill? Offer it up in a tax cut that predominantly omy. benefits the upper-income folks. Mr. DORGAN. Well, the Senator an amendment, I will support the We ought to do the right thing. The knows the economy not only did not amendment to change the bill, but right thing, it seems to me, for our collapse and crash and go into a depres- don’t say it is unfair when we tell peo- children’s sake, is to tell them we are sion as a result of our new fiscal policy; ple what the tax cut is going to be—$22 going to begin using some of this to re- the economy blossomed and grew and for the lowest 20 percent of the Amer- duce Federal indebtedness, and for our everything changed. The deficits were ican people, and the $23,300 for the top children’s sake, that we are going to gone. The deficits were at $290 billion 1 percent—because you have decided use some of this to extend the solvency and growing. We changed the fiscal pol- that people who pay payroll taxes don’t icy. count as taxpayers and you don’t in- of Medicare and Social Security, two A number of our friends stood up and tend to give them any help. It is the programs that have made this country said: You do this and you are going to folks at the upper end of the income a much better place in which to live for collapse this country’s economy. In ladder who are going to get huge tax millions and millions of Americans. We fact, the fellow who has offered this breaks from the income tax system. ought to do that. All of us know we amendment is an economist, taught ec- Mr. DURBIN. If the Senator will ought to do it. Regrettably, we are on onomics. I taught economics in college. yield for a question, perhaps Bill Gates the floor in a perverted process. Rec- I have been able to overcome that and and Donald Trump do need a tax break. onciliation was never intended for this lead a reasonably productive life, but Maybe the Senator from Texas believes process—never. economists can argue forever about all that is a good reason to pass the bill. Yet, we are here because it muzzles these things. The PRESIDING OFFICER. The Sen- us up with a 20-hour debate and does The question is whether we are going ator’s 2 minutes have expired. not allow a full debate about fiscal pol- to put the country at risk by moving Mr. DURBIN. I ask that the Senator icy and tax cuts. And I say to those on away from a fiscal policy that we know be given 3 additional minutes. the other side, you will get your bill works and taking three-quarters of a Mr. HOLLINGS. Three additional and have your votes and you will pass trillion dollars from surpluses that do minutes. a bill. But, in my judgment, you will not yet exist and giving big tax breaks. Mr. DURBIN. I ask the Senator from put this country at risk because you This amendment is the House tax North Dakota: Is it true or not true are spending, through tax cuts, sur- bill. I want to read for the author that in the last 2 weeks Alan Green- pluses that do not yet exist, just as something he probably heard me read span, Chairman of the Federal Reserve yesterday you wanted to waive points yesterday. Board, has testified before Congress of order on a conference report that Mr. GRAMM. Will the Senator yield several different times warning us that had not yet been drafted. to correct a factual error? First of all, this kind of tax proposal that is com- I yield the floor. there is nothing wrong with the House ing from the Republican side could The PRESIDING OFFICER. The time tax bill. jeopardize the economic expansion? Is yielded to the Senator has expired. Mr. DORGAN. I will yield. it not true that it is within the power Mr. GRAMM. Mr. President, I want Mr. GRAMM. This amendment is sub- of the Federal Reserve Board, by their to take a little time off the bill to an- stantially more focused than the House , to raise interest rates swer all this stuff, but first I want to tax bill. if they see indications of inflation, and give Senator GRAMS an opportunity to The PRESIDING OFFICER. Does the by raising these interests rates, put an speak for 5 minutes. Senator yield? additional economic burden on families The PRESIDING OFFICER. The Sen- Mr. DORGAN. I did yield, and he who are paying for their mortgages, ator from Minnesota is recognized. made his point. Reclaiming my time, family farmers who are trying to stay Does the Senator from Delaware my understanding was it was described in business, and small businesses alike? yield time off the bill? as the House tax bill. If you have made Is it not true that if we see inflation Mr. ROTH. The Senator from Texas— a couple of grammatical changes to come on the scene and interest rates go Mr. GRAMM. I am yielding time off that, so be it. Let me make the case, up, that a $22 tax break for working the amendment. I will ask for time off with regard to the House tax bill and, families will disappear in a heartbeat? the bill to answer the points that have similarly, the Senate bill, Kevin Phil- Mr. DORGAN. Well, that is the case. been raised. lips, a Republican columnist, said the I submit this: In a quiet moment, in The PRESIDING OFFICER. The Sen- following: a secluded corner, in a private con- ator from Minnesota is recognized. S9662 CONGRESSIONAL RECORD — SENATE July 29, 1999 Mr. GRAMS. Mr. President, I ask if I I want to do the right thing, so I plan then the next year $196 billion, $213 bil- may be recognized for up to 10 minutes. to spend the money carefully.’’ lion, $196 billion, $197 billion, and $194 The PRESIDING OFFICER. Is there That is what our Democratic col- billion. That was the Clinton budget. objection? leagues and the President want to do. But we elected a Republican majority Does the Senator yield 10 minutes? When they find the money on the in Congress. What happened? With that Mr. GRAMM. Five minutes is all the street, instead of giving it back to the Republican majority in Congress, we time I have. I am sorry. people it belongs to, they are going to were not able to pass every bit of our Mr. GRAMS. Mr. President, I rise to spend it carefully for you. Contract With America, but we re- support the tax relief plan offered by Again, this debate is not over any- formed welfare, we cut spending, we Senator . But I also want thing except who is going to spend the stopped the runaway spending freight to talk a little bit about what we heard money. As the Senator from North Da- train of Bill Clinton. And under a Re- from our Democratic friends and col- kota said, it is a clear, bright line. The publican majority, while Clinton’s defi- leagues on the other side. line is: Do we want Washington to cits looked like this, the real deficit Make no mistake about it, the sur- spend your surplus tax money, or do we started to fall and turn into a surplus plus dollars out there are going to be want to return it to you and allow you which is indicated on the chart. spent. The question is, Who is going to to spend it on your priorities? The question is, Who led, who fol- spend it? Are we going to allow it to be Thank you, Mr. President. I yield the lowed, and who got out of the way? I returned to the hard-working families floor. believe that the Republican Congress and Americans and allow them to Mr. GRAMM. Mr. President, I ask led, the Democrats in Congress fol- spend it, or are we going to let Wash- our distinguished chairman to yield me lowed, and Bill Clinton got out of the ington spend it? To some, it seems that 5 minutes off the bill. way. if the taxpayers spend it, it will jeop- Mr. ROTH. I yield 5 minutes off the So if we are going to tell the history ardize the economy, but if we trust the bill to the Senator from Texas. of what happened in the Clinton era, Mr. GRAMM. Mr. President, in Ron- President and trust Washington, the let’s not just remember his tax in- ald Reagan’s own words, I want to take money will be spent correctly. crease, let’s remember his stimulus Also, I heard them talk about 1993 our Democrat colleagues down memory package, which we killed. The Demo- and what a great turnaround in fiscal lane. They have such fond memories of crat majority could not get 60 votes, policy for this country it was, and that what President Clinton has done, and I and it died. Clinton was heartbroken, it was due to their efforts that turned would like to tell the rest of the story. but it died. And we defeated the Clin- this economy around. The CBO finds It is true that Bill Clinton was elected ton health care bill. It would have the increased revenues were propelled President. It is true that he came to taken over one-eighth of the American by personal income tax increases, and Washington and proposed the largest economy, and Americans were so it cites four reasons for this unex- tax increase in American history. It is shocked at the Clinton program that pected revenue: First, the rapid growth true that not one Republican voted for they elected the first Republican ma- of taxable income, which raised the tax that tax increase. It is true that it jority since the 1950s. base for personal income receipts; sec- passed by one vote. It is true that the When we took over, things changed. ond, adjusted gross income, which has largest tax increase in American his- With the same old Bill Clinton who was grown even more rapidly than taxable tory now bears heavily on working here in 1995, when the deficit was $200 personal income, mainly through the Americans. billion, what changed was the Repub- realization of capital gains—the cap- Everything else they said is not true. lican majority. ital gains tax increased by 150 percent Let me try to explain why. They quote between 1993 and 1997, which is a third people saying harsh things about the I just say to the American people, of the growth of the tax liability rel- Clinton program. Let me tell you the give us a Republican President, and we ative to the GDP—third, raising taxes rest of the program. The rest of the will again control spending, and we paid on pensions and IRA retirement program was a massive stimulus pro- will let working people have more of income; fourth, and most important, is gram where the Clinton administration what they earn. the increase in the effective tax rate. proposed spending $17 billion, in 1993 Mr. President, I yield Senator HAGEL That is people making a little more alone, on everything from ice skating 5 minutes off the amendment. money, inflation pushing them into the rink warming huts in Connecticut to The PRESIDING OFFICER. The Sen- higher brackets, and now not paying 15 alpine slides in Puerto Rico. I had ator from Nebraska is recognized. percent but 28, 31 percent or higher. harsh things to say about it, and I am Mr. HAGEL. Mr. President, thank By the way, this is also what CBO proud of that. I am very proud that Re- you. said. It points out that the revenue publicans, who were in the minority, I first want to add my thanks to the windfall did not result from legislative killed that bill with a filibuster. chairman of the Finance Committee, policy changes, which my Democratic Bill Clinton didn’t just propose the Senator ROTH, for the leadership he has friends have claimed. In other words, largest tax increase in American his- brought to the floor on such an impor- the CBO says the legislative initiatives tory, he proposed having Government tant issue on a very substantive vehi- taken by the President and the Demo- take over and run the health care sys- cle that we are using now to really crats did not generate this surplus; tem, collectivizing American medicine, make some decisions on behalf of the what generated this surplus was the in- forcing everybody into a Government- American public. vestment in the economy by busi- run health care collective, which was a I have heard this morning that this is nesses, through the Reagan era of tax giant HMO run by the Government. It an issue about priorities. Surely it is. relief bills, and also by the high pro- would have meant Government taking This is about priorities. This will fur- ductivity, work, and effort of the over one-eighth of the American econ- ther be about priorities as we debate American people. It wasn’t by what omy. I said it would be a disaster. I am this issue throughout the day, and ac- Washington did; it was in spite of what proud that I helped lead the effort to tually throughout this year and into Washington did that led to this. kill it, and I am proud that it is dead next year, because the priorities are So, clearly, all four reasons that we where it belongs. That is the Clinton about whose money it is. It is not my have a surplus are the result of the pro- program. The point is, we were able to money. It is not Senator GRAMM’s ductivity of working men and women defeat every part of it, except the tax money. It is not President Clinton’s and businesses in this country. increase. money. It is the taxpayers’ money. We Before I run out of time, I want to Now, when the Republican majority tend to allow that to slip aside here show you this chart. This depicts what showed up in Washington, DC, in Janu- when we are engaged in this theo- is going to happen to the surplus. This ary of 1995, they received this budget retical debate. is excess money that taxpayers have from President Clinton. On page 2 of Second, we all have to appreciate sent to Washington. Here is what I this budget, President Clinton outlines that we live in the mythical kingdom have often said. Here we have the man what his budget was. It had a deficit around here. The political kingdom saying, ‘‘I found someone’s wallet, and for fiscal year 1995 of $192 billion, and says that all the clouds and all the July 29, 1999 CONGRESSIONAL RECORD — SENATE S9663 goodness will reside here in the knowl- Senator MACK said yesterday, and as Packwood, said, ‘‘I will give you my edge and the fountain of wisdom com- my colleague again reminded us, he home if this thing works.’’ The chair- ing forth from Washington. We are see- asked rhetorically, ‘‘Would a $39 billion man of the House Budget Committee, ing a great dynamic of that given when tax cut in the year 2002 overheat the Mr. KASICH, said, ‘‘I will change parties we are trying to take the people’s economy when this is only .004 percent and become a Democrat if this thing money and then tell them how we will of the total projected GDP?’’ works.’’ And it is working. spend it and give it back to them be- I think you get the message. We are engaged once again in this That is a tremendous frustration I cause we are benevolent Senators; we have because it is working. We have are benevolent representatives of the mythical kingdom of fantasy. The fact the lowest unemployment, the lowest people; we can figure it out better. is, this money is the taxpayers’ money. If there is a sense of arrogance in The fact is, this is a responsible direc- inflation, and the economy is moving this, I think you are right if you sense tion of those resources that surely, if along. Mr. Greenspan, not just on yes- that, that the Congress is going to de- they are allowed to stay here in Wash- terday but earlier in the year, in Feb- cide who gets what; we are going to ington, will be spent. ruary, said stay the course. make that decision. So we are going to The President has given us ample op- My usually responsible Republican target all of these pieces of the pie be- portunity to look over that very gen- friends—I come from a Republican cause we can decide better for the erous menu he has presented to us with State, unfortunately—have given us American people how they should all of his new spending. what was called outrageous on Monday spend their money, if we decide to give Mr. President, I strongly support this by the best of the best conservatives, them back some of their money. amendment. Kevin Phillips—I ask unanimous con- I have also heard some interesting I yield my time. sent that this be printed in the The PRESIDING OFFICER. The Sen- conversations this morning about pro- RECORD. jections. As a matter of fact, I used to ator’s time has expired. have a real job, and in that real job I Mr. MOYNIHAN. Mr. President, I There being no objection, the mate- was a businessman. I had to deal with think our distinguished friend and col- rial was ordered to be printed in the projections because I had to put to- league, Senator HOLLINGS, is next. RECORD, as follows: The PRESIDING OFFICER. The Sen- gether budgets. Those budgets had to COMMENTARY BY KEVIN PHILLIPS ON NATIONAL ator from South Carolina. PUBLIC RADIO’S MORNING EDITION, MONDAY, direct research and development. Those Mr. HOLLINGS. I thank the Senator. JULY 26, 1999 budgets had to direct investment, cap- Mr. President, on behalf of myself ital, and what we were doing for the and the distinguished Senator from Bob Edwards: The Republican party last long term. Yes, they are imperfect. Connecticut, Senator LIEBERMAN, I week had its tax reduction proposal passed Ten-year budgets are slippery, and send a motion to the desk in accord- by the House of Representatives. Commen- they are dangerous. But the fact is, we ance with the rule, by 2 o’clock, that tator Kevin Phillips says it’s the most un- must base a budget upon something. sound fiscal legislation of the last half cen- they be filed and we intend to make tury: That budget must be based upon a rel- later today. evant series of assumptions. So that is The PRESIDING OFFICER. The Sen- Kevin Phillips: Tax bills often deal with Pie a given, and we have to deal with that. ator is recognized. in the Sky. The mind boggling ten-year cuts After we get through that, then we Mr. HOLLINGS. I thank the distin- passed late last week by the House of Rep- have to make some tough decisions. resentatives however deserve a new term: guished Chair. Pie in the Stratosphere. That’s because the That is what we are going through Let me just say quickly to clear the today. I believe this bill that we have cuts are predicated on federal budget sur- Record that the Senator from Texas pluses so far out, six, eight or ten years, that brought to the floor this morning does was talking about what the Repub- it would take an astrologer, not an econo- that. I think it does it first in a very licans have done for the economy. mist to predict federal revenues. The most responsible way. It does it in a way I can tell you what they have done publicized provision, phased in ten-percent that allows 75 cents of every surplus for the economy. They came in 1995, across the board reductions in federal in- dollar to go back into debt reduction and for 1996 they worked, of course, on come tax rates, looks excessive. But these at projects—Social Security, Medicare, the budget. They immediately in- least stand to be delayed by a legislative important Government programs such creased spending for the next year of trigger, if surpluses and debt-reduction don’t as defense. The first real obligation of $148 billion. They increased spending, occur as assumed. Not so for the truly venal, responsibility of the Federal Govern- and the budget went up another $50 bil- smaller provisions. Ones too complicated to ment is national security—veterans be explained in 40 seconds on the TV news lion. This year, of course, it is another shows. Democrats are certainly correct programs, education, medical research, $50 billion, and they have added. The about the imbalance of benefits by income and health care. That money is there. track record will show that they have group. Treasury figures show that the top 1% We are talking about a $3 trillion added $661 billion to the national debt. of families, just 1%, would get 33% of the budget surplus—both on the budget and But what did President Clinton do in dollar cuts, the bottom 60% of families get a off the budget, meaning in Social Secu- 1993? And we did not have the largest mere 7%. Conservatives reply that the tax rity and out of Social Security—$3 tril- tax increase. That was under Senator cuts are simply going to the people who pay lion over the next 10 years. I don’t Dole. I will show the articles analyzing the taxes and have the incomes. That’s part- know if that is going to materialize, both. ly true. The top 1% of families have about but one of the things we know is that But I readily acknowledge that I 13% of the nation’s income but that’s under we have to make some tough decisions voted and supported and worked like a an official definition that excludes capital based upon what we know and what we gains. If you include capital gains in house- tiger to get the Deficit Reduction Act hold income, the top 1% may indeed have project. This bill does it very respon- of 1993 passed, which prevailed by one some 20% to 30% of the national total these sibly. It does it in a way that addresses vote. Yes, we did cut spending, we did days. Which gets us to the real guts of this those needs of our Republic and what downsize over 300,000 Federal jobs. But bill: Two low profile, but high favoritism we have committed to the American more than anything else, yes, we raised provisions. First, reduction of the top federal public. taxes. capital gains tax rate from 20% to 15% and, My goodness, to say that giving 25 The Senator from Texas, when we second, the phasing out of the federal gift percent of that back to the American raised the taxes on Social Security, and inheritance taxes. Both changes would public in a tax cut is somehow irre- was adamantly opposed to that, and he concentrate a huge portion of their benefits sponsible is well beyond my calcula- said—I will use his expression—you in- in the top 1%. tions. crease taxes on Social Security and The top 1% of American taxpayers re- Senator MACK was on the floor yes- they will hunt you Democrats down in ported about 60% of the taxable capital gains terday. I want to repeat a couple of the streets and shoot you like dogs. dollar values several years back. To reduce points he made. One, he said, for exam- The Senator from South Carolina their capital gains rate from today’s 20% to 15% is unnecessary in terms of investment ple, how can a $4 billion net tax cut for never forgot that expression. That is stimulus. All of the bull markets of the last fiscal year 2000 overstimulate demands how tough we had it. They were going 50 years have occurred when the top cap in a trillion-dollar economy? Of course, to hunt us down. gains rate is in the 20 to 28% range. The bills as of now, this bill phases in those tax Of course, the chairman of the Fi- special interest provisions phasing out the cuts over a series of 10 years. nance Committee at that time, Senator Federal estate and gift taxes over the next S9664 CONGRESSIONAL RECORD — SENATE July 29, 1999 decade could be even more costly. Demog- fairly call the House legislation the tax cuts and have the real issue for the raphers say life expectancies ending in the most outrageous tax package in the election 2000. years 2000 to 2010 will send a tidal wave of es- last 50 years.’’ tates through the inheritance processes. The This is very interesting. You don’t That is why I come to the floor to top 1% of families have the great dollar bulk find the word ‘‘unified, unified, uni- speak. I agree with Mr. Phillips. This of what are now taxable estates and if these fied.’’ That is all I have heard for the are not substantially taxed, wealth and posi- tax bill turns everything on its back- tion in America will be more and more in- side when we have a good going econ- last 20 years—unified. It is not a uni- herited, not earned. omy, and the Republicans come in fied budget. It is an outright budget We can fairly call the House legislation the with, of all things, a tax cut. How surplus. That is what the CBO called it. most outrageous tax package in the last 50 It is not a budget surplus at all. The years. It’s worse than the 1981 excesses, you come? I will tell Members exactly. I have to go back to 1948, when the Republican can’t find out what was first, the fact is, and I will quote the figures, the 80th Congress sent a kindred bill to Presi- chicken or the egg, but OMB got into debt goes up each year for the next 5 dent Harry Truman. Truman vetoed it, call- this blooming 2000 election, and CBO years. ing the Republicans bloodsuckers, with of- has a Republican—not any Alice Rivlin I ask unanimous consent to have fices in Wall Street. Not only did he win re- or Bob Reischauer, but they have a Re- printed in the RECORD from the CBO re- election, but the Democrats recaptured Con- publican fix—Mr. Crippen over at CBO. gress. We’ll see if Bill Clinton and Albert port on page 19. Gore have anything resembling Truman’s I have been working on this budget guts. since we passed it back in 1973. There being no objection, the mate- Mr. HOLLINGS. Mr. President, one Both CBO and OMB started finding rial was ordered to be printed in the sentence of his commentary: ‘‘We can money. How we could as a party put in RECORD, as follows: TABLE 10.—CBO BASELINE PROJECTIONS OF INTEREST COSTS AND FEDERAL DEBT (BY FISCAL YEAR)

Actual 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NET INTEREST OUTLAYS (BILLIONS OF DOLLARS) Interest on Public Debt (Gross interest) 1 ...... 364 356 358 358 350 345 342 338 333 328 323 316 Interest Received by Trust Funds: Social Security ...... ¥47 ¥53 ¥59 ¥67 ¥74 ¥82 ¥91 ¥100 ¥110 ¥121 ¥132 ¥144 Other trust funds 2 ...... ¥67 ¥68 ¥70 ¥73 ¥74 ¥76 ¥79 ¥81 ¥84 ¥87 ¥89 ¥92 Subtotal ...... ¥114 ¥120 ¥129 ¥140 ¥148 ¥159 ¥170 ¥182 ¥194 ¥208 ¥222 ¥236 Other interest 3 ...... ¥7 ¥7 ¥6 ¥7 ¥7 ¥7 ¥8 ¥8 ¥8 ¥8 ¥8 ¥9 Total ...... 243 229 222 212 194 179 164 148 131 112 92 81 FEDERAL DEBT AT THE END OF THE YEAR (BILLIONS OF DOLLARS) Gross Federal Debt ...... 5,479 5,582 5,664 5,721 5,737 5,760 5,770 5,770 5,732 5,675 5,600 5,500 Debt Held by Government Accounts: Social Security ...... 730 856 1,003 1,157 1,321 1,493 1,675 1,869 2,075 2,292 2,520 2,755 Other accounts 2 ...... 1,029 1,107 1,188 1,267 1,350 1,431 1,510 1,589 1,666 1,743 1,813 1,880 Subtotal ...... 1,759 1,963 2,190 2,425 2,670 2,925 3,185 3,458 3,741 4,035 4,333 4,635 Debt Held by the Public ...... 3,720 3,618 3,473 3,297 3,066 2,835 2,584 2,312 1,992 1,640 1,267 865 Debt Subject to Limit 4 ...... 5,439 5,543 5,626 5,684 5,700 5,724 5,734 5,736 5,699 5,643 5,568 5,469 FEDERAL DEBT AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT Debt Held by the Public ...... 44.3 40.9 37.5 34.2 30.5 27.1 23.7 20.3 16.8 13.2 9.8 6.4 1 Excludes interest costs of debt issued by agencies other than the Treasury (primarily the Tennessee Valley Authority). 2 Mainly Civil Service Retirement, Military Retirement, Medicare, unemployment insurance, and the Airport and Airway Trust Fund. 3 Mainly interest on loans to the public. 4 Differs from the gross federal debt primarily because most debt issued by agencies other than the Treasury is excluded from the debt limit. The current debt limit is $5,950 billion. Source: Congressional Budget Office. Note: Projections of interest and debt assume that discretionary spending will equal the statutory caps on such spending through 2002 and will grow at the rate of inflation thereafter.

Mr. HOLLINGS. Gross Federal debt, and the economy stays at a growth of TRUST FUNDS LOOTED TO BALANCE BUDGET on page 19: In the year 1999, $5.582 tril- around 2 to 2.5 percent. The chairman [By fiscal year, in billions] lion; it goes to $5.664 trillion; 2001, of the Budget Committee on Sunday 1999 2000 2004 $5.721 trillion; 2002, $5.737 trillion; 2003, said CBO estimated two recessions— $5.760 trillion; 2004, $5.770 trillion. That is not right and I would like to Social Security ...... 857 994 1,624 Up, up, and away. Deficits, not sur- Medicare: pluses; deficits—the Congressional correct that. CBO in this book does not HI ...... 129 140 184 project any recession during the next SMI ...... 39 44 64 Budget Office says—as far as the eye Military Retirement ...... 141 148 181 can see. 10 years, rather 2.5-percent growth. Civilian Retirement ...... 490 520 634 The Republicans were going to take If you can get all of that growth you Unemployment ...... 79 88 113 the $1.9 trillion of Social Security. We Highway ...... 25 26 32 can get and have unemployment stay- Airport ...... 11 14 25 have to not get into Social Security. ing the same way, inflation staying Railroad Retirement ...... 23 24 28 We have to find $1 trillion for the tax Other ...... 57 59 69 cut about which we have been talking. way down, interest rates down, you Total ...... 1,851 2,057 2,954 So they said we have another $1 tril- obey the caps and you have no emer- lion. How do we do it? They said—at gencies whatever. And then you find least the Republicans, and I will limit some money. Mr. HOLLINGS. So we have the other trust funds to the tune of a 10-year pe- my comment to that because that is However, I point out that they knew riod of $800 billion. We have $1 trillion what they have in this particular where most of the money, 80 percent, amendment—they said: Let’s not just to spend and that is the gamesmanship. was coming from—the other trust have current policy. Let’s stick to the There actually is no surplus. They are funds. spending caps that we put in. increasing deficits. If you don’t believe They violate the spending caps. They I ask unanimous consent to have CBO, believe at least the President. violated it again last year, $21 billion, printed in the RECORD that page in the I ask unanimous consent to have and we already are up to $17 billion and report, Trust Funds Looted to Balance printed page 43 of the OMB report. it is going to be at least $35 billion or the Budget. $40 billion or more at the end of this There being no objection, the mate- year—already in violation of the caps. There being no objection, the mate- rial was ordered to be printed in the When the majority says they keep the rial was ordered to be printed in the RECORD, as follows: caps on with no emergency spending RECORD, as follows: July 29, 1999 CONGRESSIONAL RECORD — SENATE S9665 TABLE 22.—FEDERAL DEBT WITH SOCIAL SECURITY AND MEDICARE REFORM [In billions of dollars]

Estimates Projections 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Debt held by the public: Debt held by the public, beginning of period ...... 3,653 3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249 944 637 335 Debt reduction from: ...... Off-budget surplus: ...... Surplus pending Social Security and medicare re- form ...... ¥137 ¥144 ¥154 ¥165 ¥175 ¥193 ¥202 ¥215 ¥225 ¥233 ¥243 ¥246 ¥248 ¥246 ¥241 Social Security solvency transfers ...... 0 0 0 0 0 0 0 0 0 0 0 ¥107 ¥125 ¥145 ¥166 Returns on investment of transfers 1 ...... 0 0 0 0 0 0 0 0 0 0 0 ¥3 ¥14 ¥27 ¥43 Medicare solvency transfers ...... ¥5 ¥0 ¥12 ¥5 ¥7 ¥10 ¥29 ¥59 ¥83 ¥113 ¥142 ¥67 ¥68 ¥65 ¥58 Less purchase of equities by Social Security trust fund 1 ...... 0 0 0 0 0 0 0 0 0 0 0 110 139 172 209 Other financing requirements 2 ...... 21 17 17 16 15 13 12 11 9 8 8 8 8 9 9 Total changes ...... ¥122 ¥127 ¥150 ¥154 ¥167 ¥189 ¥219 ¥263 ¥298 ¥339 ¥376 ¥305 ¥307 ¥302 ¥291 Debt held by the public, end of period ...... 3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249 944 637 335 44 Less market value of equities ...... 0 0 0 0 0 0 0 0 0 0 0 ¥110 ¥248 ¥420 ¥629 Debt held by the public, less equity holdings, end of period 3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249 834 388 ¥85 ¥585 Debt held by Government accounts: Debt held by Government accounts, beginning of period ...... 1,962 2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,822 6,374 6,949 Increase prior to Social Security reform ...... 205 204 222 230 240 254 271 280 289 299 310 315 318 317 314 Social Security and Medicare solvency transfers ...... 5 0 12 5 7 10 29 59 83 113 142 173 193 210 224 Earnings on solvency transfers invested in Treasury securi- ties ...... 0 0 1 1 2 2 3 6 11 17 25 35 42 48 55 Less purchase of equities by Social Security trust fund 1 ...... 0 0 0 0 0 0 0 0 0 0 0 ¥110 ¥139 ¥172 ¥209 Total changes ...... 210 204 235 236 249 266 304 345 382 429 476 523 552 575 593 Debt held by Government accounts, end of period ...... 2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,822 6,374 6,949 7,543 Plus market value of equities ...... 0 0 0 0 0 0 0 0 0 0 0 110 248 420 629 Debt and equities held by Government accounts, end of pe- riod ...... 2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,932 6,623 7,369 8,172 1 Includes accrued capital gains. 2 Primarily credit programs. Note: Projections for 2010 through 2014 are an OMB extension of detailed agency budget estimates through 2009.

The page shows increasing deficits We have a good economy. Alan growth everywhere,’’ what has grown is going up. The national debt goes up Greenspan, the best of the best, who the national debt with an interest cost from $5.6 trillion to about $7.6 trillion; has helped us maintain that, says stay of $1 billion a day. the course. The Hollings-Lieberman $7.587 trillion over 15 years. I served on Peter Grace’s commission What do we have? We have an in- motion is not to take sides in this in- crease in the debt of Social Security of tramural between tax cuts and spend- against waste, fraud and abuse. The which the distinguished chairman has ing. But just saying: Finance Com- only thing Congress created was the the jurisdiction. They owe it $857 bil- mittee, come back with a bill that says biggest waste of all, spending $358 bil- lion. In 10 years, they will owe Social any surplus you find, apply it to reduc- lion in interest costs. If we had that Security $2.7 trillion and they are talk- ing the national debt. Let’s all go $358 billion, we could do all these ing about saving Social Security— home. I think we will win the approval things—Social Security, Medicare, re- lockbox. This is a shameful sideshow of the American people. search, tax cuts and everything else. Now, not coming in with all of the out here. There is no dignity left in We are going to spend it on account of lockboxes, that immediately puts back this Senate. No responsibility. a political sideshow and use our credi- If they can put up a chart, run away, the money into IOUs. They issue these whine, and say the people back home Treasury bills, which are nothing more bility to get by. The reason we know how to spend—if we have all the than an IOU under section 201 of Social creditably get by, and I will finish in a money, why can’t the people get it Security, and then they spend the moment. We had a wonderful debate in back? They didn’t give it back to the money on other things. There is not the 1930s. I will listen to that any time. Social Security people when he was any true lockbox. The PRESIDING OFFICER. The time We had an amendment and I showed going to shoot me in the streets. They of the Senator has expired. didn’t give it back to where they came that to the majority leader. I cir- from, the wage earners, the payroll culated it to all the Senators. That is Mr. MOYNIHAN. Mr. President, off tax. why if they allow us to put our amend- the bill we yield the Senator 2 minutes. Oh, no, as the Senator from North ments up, including my amendment to The PRESIDING OFFICER. The Sen- Dakota said, the rich get it all. Come cap the debt, we will get the truth. All ator is recognized for an additional 2 I want to do is say cap the debt as of on. It seems as if there would be a con- minutes. science in this crowd. I don’t think this September 30, 1999. If you have nothing will sell with the American people but surpluses, then run around asking Mr. HOLLINGS. We had a wonderful when they hear the truth. That is what how to spend it or how to give a tax cut debate in the 1930s between Walter I am trying to give them here today— or whatever. Lippmann and John Dewey. It was Mr. the truth. I will agree that you are right if Lippmann’s contention that the way to The distinguished Senator from there is a surplus. But the debt won’t maintain and strengthen a democracy go down at the end of the fiscal year. Texas comes up. I knew it because I was get the best of minds in the var- have been working at his side in pre- They didn’t want that vote. That is why we are in a filibuster about the ious disciplines—foreign policy, eco- vious years. He comes up and the first nomic policy, housing, whatever—get thing he said is the real problem is how lockbox. Somehow, somewhere, we them around the table, determine the to give it, and the best was ‘‘across the have to get the truth out and cut out board.’’ I knew he was going to get to this whining about the people back public’s needs, the Nation’s needs, de- Dicky Flatt. He immediately changed home know how to spend their money. termine a policy to answer those needs, subjects and the debate became the The point is, you cannot cut taxes and give it to the politicians in Con- Gramm amendment, which is supposed without increasing spending. That is gress and let them enact it. to go between workers, wage earners, the great fiscal cancer we have devel- John Dewey, the educator, said no. and deadbeats. If he can put that one oped in the 1980s with the Reagan tax He said give the American people the cuts. The national debt was less than $1 over, then he has won the day with the truth. Let the free press give the Amer- hard-working people and Dicky Flatt. trillion, less than $1 trillion at that Come on, give us a break. We have particular time. Now we have a $5.6 ican people the truth, and the truth been through that. There is no edu- trillion debt. With all of that ‘‘growth, will be reflected through the Congress- cation in the second kick of a mule. growth, growth—we are going to have men and the Senators in the Congress S9666 CONGRESSIONAL RECORD — SENATE July 29, 1999 and we will have a strong democracy. The Republican plan takes all of the to visit the undertaker and the tax col- And that is what we did for 200-and- payroll taxes that we heard the Sen- lector on the same day and give up the some years. As Jefferson said, ‘‘When ator from North Dakota talk about and family farms that have had to be sold the press is free and every man can puts that into Social Security reform because of death taxes. That is wrong. read, all is safe.’’ and stability. So when we are talking This amendment will correct that situ- What has happened? We are not safe about a lockbox, we are saying all the ation. It is time we give relief to the any longer because the press has got- payroll taxes for Social Security that hard-working people of our country. ten into entertainment and they have people pay in will be set aside for So- I yield the floor. joined the conspiracy and they call cial Security. That is $2 trillion. That The PRESIDING OFFICER. The time spending increases spending cuts and is exactly what the President’s plan of the Senator has expired. they call deficits surpluses. That is our sets aside for Social Security. The distinguished Senator from Min- dilemma. That is our dilemma. The It also has the effect of paying down nesota is recognized. only thing that is going to save us is debt by about 50 percent, according to Mr. WELLSTONE. Mr. President, I that free press getting back to their the estimates. So you pay down debt understand I have 10 minutes. I will try professional code of conduct, and cut and you stabilize Social Security with to cut that in half in the interest of out the entertainment, and get back to $2 trillion that is set aside from the moving this along. telling the American people the truth. payroll taxes that people pay in. I cannot believe the amendment that Then we would not have to argue about But for the other $1 trillion we are is before this body. I am speaking tax cuts. It has to be an embarrass- looking at that comes from income tax about the Gramm amendment. The ment to come out here with a tax cut. withholding, we have very different Center on Budget and Policy Priorities It would be an embarrassment to come plans. The President would spend it. does very good work, as does Citizens out here and just spend billions and bil- The Republicans would let the people for Tax Justice. Let’s take the 10-per- lions of dollars that we do not have. who earned it keep it, and we would cent tax rate cut across the board: this This year we are spending $103 billion hold the rest in abeyance for spending is what they say. 60 percent of the ben- more than we are taking in. We are in on Medicare, education, national de- efits of this tax cut will go to 10 per- a deficit position. fense. cent of the taxpayers with the highest I thank the Chairman and I yield the Why do we want the people who earn income. The bottom 60 percent of all floor. this money, who work so hard for it, to taxpayers will share just over 9 percent The PRESIDING OFFICER. The Sen- be able to keep it? Because we believe of the total benefits under this plan. ator from Texas is recognized. the people who earn it need the relief The average tax cut under the Gramm Mr. GRAMM. I yield 5 minutes to the for their own purposes—for them to de- amendment, for the lowest income, 60 distinguished Senator from Texas. cide how they want to spend their percent of all taxpayers, those with in- The PRESIDING OFFICER. The dis- money. The typical American family is comes below $38,000, will be about $99. tinguished Senator from Texas is rec- paying more in income taxes in peace- By contrast, those in the top 10 per- ognized for 5 minutes. time than ever in our history—38 per- cent will enjoy an average tax cut of Mrs. HUTCHISON. Mr. President, I cent in income taxes. A 10-percent about $4,000. Tax cuts for the 1 percent want to address some of the issues I across-the-board tax cut is fair to ev- highest income, those making more just heard from the Senator from eryone. Because when people paid their than $300,000 a year, will average $20,000 South Carolina. The first is quoting of taxes last year—they know what they a year. I am not even talking about es- Alan Greenspan, the Chairman of the paid, and they can take 10 percent off tate and capital gains tax cuts, which Federal Reserve Board. I believe Dr. that. That is the most fair of all tax make the Gramm amendment even Greenspan’s comments have been cuts, to let people keep more of what more regressive. taken far out of context. Because if they earn. In fact, our tax relief pack- To pick up on the comments of my you look at what he said, plainly it is age is less than the tax increases that colleague from South Carolina, the if the choice is more spending or tax President Clinton put in place in 1993. original House Ways and Means Com- cuts, I will take tax cuts. At that time, President Clinton said he mittee proposal in the second 10 years It is true he said he would be very was going to tax the rich and he put in would explode the debt, costing $2.8 cautious. that category people on Social Secu- trillion. This may be only $2 trillion. Mr. HOLLINGS. Will the distin- rity who earned $34,000 a year. That is But even here, $2 trillion is a lot of guished Senator yield? what he declared as rich. I think these money. From 2010 to 2019, this tax cut Mrs. HUTCHISON. I will yield on people deserve a break, and that is package in the Gramm amendment will your time. what we are trying to give them. probably cost about $2 trillion. That is Mr. HOLLINGS. The Senator was We are giving marriage tax penalty what it will cost us. correct in what I was saying. I said relief. This morning at my constituent Mr. President, Kevin Phillips, in nothing about tax cuts—I favored those coffee, I met a schoolteacher and a some commentary the other day on over spending. I said in my motion football coach. I am going to estimate ‘‘Morning Edition,’’ talked about the there is a surplus that we apply to re- they earn about $35,000 and about House proposal. I think what he said ducing the national debt, and I quoted $40,000 apiece. They get hit right applies to this Gramm amendment: Mr. Greenspan as of February, when he square between the eyes with the mar- The mind-boggling 10-year cuts passed late said, ‘‘Stay the course.’’ I didn’t say riage penalty because when you put last week by the House of Representatives Greenspan said I prefer tax cuts over their incomes together, they go into a . . . deserve a new term: [Not pie in the sky spending. I did not use that quote. new bracket. They are earning, then, but] pie in the stratosphere. Mrs. HUTCHISON. Dr. Greenspan $65,000 to $70,000 for a family of four. That is what this Gramm amendment said: If it is a choice of tax cuts versus That is wrong. We should not tell is: pie in the stratosphere. spending, he takes tax cuts. Paying people because they get married that Sometimes my colleagues on the down the debt is exactly what the Re- they owe more in taxes, just because other side of the aisle—and I say this publican plan does. So I think it is very they got married. with a twinkle in my eye, it is never important we keep Dr. Greenspan’s The PRESIDING OFFICER. The Sen- hatred; we always enjoy our work— comments in context. ator’s time has expired. they will accuse some of us of class If you look at the President’s plan, Mrs. HUTCHISON. Mr. President, did warfare. I say to my colleague from he takes $1 trillion and spends it. The Senator HOLLINGS’ question come off Texas, this is class warfare. This is Republican plan takes the same $1 tril- his time or mine? class warfare: 60 percent of the benefits lion and gives $792 billion back to the The PRESIDING OFFICER. It came go to the top 10 percent of all tax- people who earned the money, and we off of his time. payers. The bottom 60 percent gets 9 have a cushion for spending on issues Mrs. HUTCHISON. Mr. President, it percent. The average tax cut for most such as Medicare and education in the is time we provide marriage tax pen- of the people in my State of Minnesota rest of the $1.3 trillion in surplus that alty relief, tax relief across the board, is about $99. But if you make over comes from income tax withholding. death tax relief so people will not have $300,000 a year, there will be an average July 29, 1999 CONGRESSIONAL RECORD — SENATE S9667 tax cut of $20,000 a year. I say to my The implication, in his words, has lifted in any event. The House tends to colleague from Texas, this is class war- also been pretty clear over these last use emergency spending to get around fare. That is what his amendment is. few months, which is that a large tax the caps. Apparently, we are going to In some ways, I am glad to fight this cut would cause the Fed to increase in- be more forthright and just lift the war because the vast majority of peo- terest rates. For the average middle-in- caps. ple in this country, when they realize come taxpayers, a rise in interest rates So most people in Congress already who gets the benefits and who does not, means larger mortgage payments, larg- believe—whether they acknowledge when they realize what this amend- er loan and credit card payments, larg- this publicly or not—that the caps are ment does in the second 10 years, here er payments on that automobile, and simply not going to hold. So we al- is what they are going to say. They are that would far outweigh the small ready have strong evidence that the going to say: We heard enough about share of the benefits from the tax cut basis of the surplus projection is not how this surplus belongs to us. We are which that average taxpayer might re- realistic or credible. responsible adults. We are responsible ceive. The proposal before us is going to parents and grandparents, and we be- The tax program that is being offered take the economy backwards, just as lieve that whatever the performance of to us is also based on unrealistic pro- we are climbing out of a deficit ditch. our economy—and I hope it will be jections. Projections are always risky. In 1992, the deficit in the Federal good; we do not know, this is all as- We have seen many Federal budget es- budget was $290 billion. We made re- sumed—and whatever we have by way timates, and we know that as quickly markable progress which has brought of surplus, here is what we believe: We as the surpluses appear, they can dis- us now to the threshold of surpluses. It believe that it does not belong to us; it appear. The estimates of both the Con- came in large part because of a deficit- belongs to our children and our grand- gressional Budget Office and the Office reduction package which President children. of Management and Budget have fre- Clinton presented in 1993 and which we That means we pay off some of the quently been far off the mark in recent passed by a margin of one vote. We debt we put on their shoulders, and years, and that is not their fault. We should not now, by passing a tax bill that means we also make sure that have some bright economists in the such as the one before us, head down Medicare and Social Security are there CBO and the OMB. They have a dif- the road toward new future deficits. for them. It also means our children ficult task. Forecasting the perform- The alternative that Democrats of- and our grandchildren, regardless of ance of the economy, particularly over fered yesterday was far better, by all whether they are rich or poor, have op- the course of several years, is more art three tests—the test of fairness, the portunities; that there is equal oppor- than science, and there is a lot of test of prudence, the test of credibility. tunity for every child. That is what the guesswork in it. But by those same three tests, we American people believe. That is what For instance, the CBO estimated that should hold off on any tax cut. We Minnesotans believe. the unified budget surplus for fiscal should hold off on any tax cut, period. I love this Gramm amendment. I love year 2000 will be $79 billion. But 4 First, we should see if the surplus is it because I think it presents in the months later, in a January 1999 CBO real before we adopt tax cuts. Second, clearest possible way to people in Min- document, the surplus for fiscal year if the surpluses are real, we should pay nesota and people in the country what 2000 was estimated at $130 billion. In 4 down the national debt faster. And we are about, whose side we are on. It months, it jumped from a $79 billion es- third, we should save tax cuts for a is a class warfare amendment, and it timate to a $130 billion estimate. The time of economic slow down. should be trounced in a vote. I yield July estimate for fiscal year 2000 now The argument is made that this is the floor. the taxpayers’ money. It is. But the The PRESIDING OFFICER. Who projects a $161 billion surplus. So there has been a change of over 100 percent in economy is the American taxpayers’, yields time? too. The economy belongs to the Amer- Mr. MOYNIHAN. I yield the Senator the projection of the surplus in less ican taxpayer. Social Security belongs from Michigan 10 minutes. than a year. If most Americans were The PRESIDING OFFICER. The dis- confronted with such uncertainty over to the American people, just as this tinguished Senator from Michigan is their own budget situation, they would money belongs to the American people. recognized for 10 minutes. follow a cautious course, and we The surplus belongs to the American Mr. LEVIN. I thank the Chair. Mr. should, too. people. So does the Medicare program President, I thank my good friend from The projections in both the under- belong to the American people. Our New York. lying proposal and the pending amend- education program, helping people The tax program which is in the ment to it are extremely risky because through college, belongs to the Amer- amendment before the Senate, like the they are based on assumptions about ican people, just as the surplus does. plan that it would amend, is unfair to domestic spending levels that are high- These are taxpayers’ dollars. There middle-income Americans. It is eco- ly unrealistic. The on-budget surplus, can be no dispute about that. But the nomically unwise, and it is based on which the Republicans now say will veterans’ program is the American peo- unrealistic assumptions. The unfair- pay for the tax cut, is reliant largely ple’s program. When we cut veterans’ ness in the underlying bill it would on massive cuts in discretionary spend- health care, we are cutting into some- amend is perhaps best shown in the ing, $595 billion over 10 years. That is a thing that the American people want. fact that about two-thirds of its tax 23-percent cut in real terms from the It is their program, just as the surplus, benefits go to the upper one-fifth of our 1999 level adjusted for inflation. Can we just as the taxes, are the American people. The amendment makes that really believe we will be cutting discre- people’s. worse. It makes an unfairness doubly tionary programs by 23 percent in real The American people are speaking unfair because it will give almost 80 terms? loudly, at least to me, at least in my percent of the tax benefits to the upper Is that what we are doing now? office, when I go back home to Michi- one-fifth of the income bracket. If a realistic defense spending level is gan every weekend and talk to the In addition to being unfair, it is also adopted—even the President’s proposal; American people. What they are telling economically unwise because it jeop- if we assume just that—the domestic me is: Pay down the debt, protect So- ardizes Medicare, it fails to strengthen spending cut will grow to $775 billion cial Security, protect Medicare. Do Social Security, and it risks higher in- over 10 years, which is a 38-percent cut what you need to do to invest in edu- terest rates. Yesterday, Alan Green- in real terms. cation. Don’t cut veterans’ programs. span, testifying before the Banking We have seen proof in the last few But we don’t need this tax cut that is Committee said: weeks that these levels are unrealistic. being proposed at this time, not just We probably would be better off holding off The so-called spending caps are already because it is unfair to middle income on a tax cut. being exceeded by attaching emergency Americans—which it is, since most of Why? Because of the uncertainty of spending labels to new funding. We the benefits go to the upper fifth—but budget surplus projections and also be- have already heard from the chairman we don’t need the tax cut because we cause we should normally reserve tax of the Appropriations Committee that want debt reduction, real debt reduc- cuts for periods of economic slowdown. these limits, or caps, are going to be tion. S9668 CONGRESSIONAL RECORD — SENATE July 29, 1999 That is what they are telling us. I wonder sometimes if our Democrat America making $50,000 a year, they That is what the American people, who colleagues do not just rediscover every are rich, according to the Senator from produced this surplus, who send us the once in a while how progressive—and South Carolina. But the average family tax money, are telling us. They are that is the term that was made up by making $50,000 a year will get $624 in a telling us that loudly, not just in pub- the people who wanted the Tax Code to tax cut by the 10-percent across-the- lic opinion polls—in the mail that we be highly skewed, where higher income board tax. open up, in the phone calls we get, and people paid the great preponderance of How is it that only rich people are in the personal pleas we get when we taxes in America. getting the tax cut? Well, you have to go home. We are today talking about cutting remember that when the Democrats, in That is exactly what we should do: income taxes. Our dear colleague from 1993, raised taxes, they defined ‘‘rich’’ To hold off on any tax cut and reduce Minnesota points out that if you make as anybody making over $25,000 a year the debt with the money that other- less than $30,000, you are going to get when they taxed people earning $25,000 wise would go to that tax cut, again, less than $100 of income tax cuts in this a year on their Social Security bene- not just because it is unfair—which it bill. But what our colleague fails to fits. I hope people are not confused is—but because it is unwise and impru- recognize is that 50 percent of Ameri- when they hear the Senator from dent. cans pay only 4.3 percent of the income South Carolina say under the Gramm Mr. President, I yield the floor. taxes; 32 percent of American families amendment rich people get it all. I Mr. GRAMM addressed the Chair. pay no income taxes whatsoever. hope they understand that rich people The PRESIDING OFFICER (Mr. So I know it makes for a good sound are people over $25,000 a year. When BUNNING). The Senator from Texas. bite to say 32 percent of Americans will Senator HOLLINGS was saying, yes, he Mr. GRAMM. Mr. President, it is my get no income tax cut if you cut taxes voted to raise taxes on Social Security, understanding that the Democrat side across the board by 10 percent, but that was on rich people who made over of the aisle has completed their run of they do not get a tax cut because they $25,000 a year. Don’t forget the code speakers. They have a little time left. do not pay income taxes. when we are talking about these I have a little bit more. But it would be Tax cuts are for taxpayers. The peo- things. my intention, if it suits everybody else, ple who will get a tax cut under this There are a lot of people on the Dem- to go ahead and try to answer all of bill get no food stamps. Is that an out- ocrat side of the aisle who say hold off these points that have been made, and rage? People who will get a tax cut on the tax cut. Well, I don’t find that try to deviate from my background as under this bill do not qualify for Med- unappealing. Just to level with people, a schoolteacher and not take all day, icaid. Is that an outrage that they do if we could stop the spending spree that and then go ahead and yield back my not qualify for Medicaid? People who is underway and hold off on the tax cut time if they would yield back theirs, will get a tax cut under this bill do not and have an election—I believe we are and then we will set my vote aside and qualify for Aid to Families with De- going to have a Republican President; I think I know who it is; I believe we are let Senator KENNEDY offer his amend- pendent Children. Is anyone outraged ment, if that will suit everybody on about that? I am not, because AFDC, going to have a Republican majority in time. food stamps, Medicaid are not for ev- both Houses of Congress—I think we The only thing I want to be sure of erybody; they are for poor people. Tax could do a better job 2 years from now. is—since I want to be sure I get to an- cuts are for taxpayers. So when Senator LEVIN says hold off on swer every point that has been made— So when our colleagues stand up and the tax cut, why do I not end up sup- I would like to be the last speaker on say the top one-quarter of the tax- porting his position? Well, the problem is, this is the Con- my substitute. So if that works with payers in America will get 60 percent of gressional Budget Office analysis of everybody, I am happy about it; if not, the tax cut under this bill, don’t forget President Clinton’s budget. He is pro- we can do it another way. that the top 25 percent of income earn- posing to spend $1.033 trillion, not only Mr. MOYNIHAN addressed the Chair. ers in America today pay 81.3 percent every penny of the surplus, but he is The PRESIDING OFFICER. The Sen- of all the taxes. having to plunder Social Security for 3 ator from New York. Why would anybody be shocked that out of the 10 years. So while our col- Mr. MOYNIHAN. The Senator’s pro- a group of people who pay 81.3 percent leagues are saying don’t cut taxes, posal is entirely agreeable. I cannot, of the taxes might get 60 percent of the what they are not telling is that the however, let pass the notion that Texas tax cut? In fact, what our dear col- President has proposed spending every may be the only State in the Union league from Michigan was pointing out penny of the non-Social Security sur- where a former professor of economics is that the Roth bill is, from the point plus, plus part of the Social Security of view of the existing Tax Code, put- refers to himself as a sometimes surplus. schoolteacher. But that is the way it ting a heavier burden on higher income We are already $21 billion over the is. We look forward to hearing all he people. My amendment does not do budget this year. I would be willing to has to say. that. Now, some of our colleagues, a wait when we had a President who I Mr. REID. Will the Senator yield for few minutes ago, suggested that I was think would support a better tax pack- a question? offering the House bill. The House tax age, but under President Clinton’s Mr. MOYNIHAN. Sure. cut bill is 457 pages long. The tax cut I budget, we will have spent every penny Mr. REID. So we have someone here am offering is 46 pages long. This is a of the surplus before we can elect a new to speak when the Senator finishes, very simple tax cut. At the end of my President. So that is why we have to could the Senator give us an estimate comments, I will go over what it does act now. of when he might complete his state- and does not do. The second thing is about how large ment on this amendment? It is true that the top 1 percent will this tax cut is, how outrageous, how Mr. GRAMM. Mr. President, how get more tax cut than the bottom 50 obscene. If you want to spend all the much time do I have? percent. The top 1 percent of income money, any tax cut is obscene. If you The PRESIDING OFFICER. Eighteen earners in America earn 16 cents of don’t want a tax cut, all tax cuts are and a half minutes. every dollar earned, but they pay 32.3 for rich people, all tax increases are on Mr. GRAMM. I will be through before percent of the taxes. The bottom 50 rich people. So most people, at least in that. Senator KENNEDY may want to percent pay only 4.3 percent of the that language, don’t have a stake in it. start making his way over here. taxes. So if you are giving a tax cut, But the problem is, all tax increases Mr. President, we are about to wrap people who pay taxes get it. If you are are on working people and our tax cut up the debate on this amendment. I giving welfare or Medicaid, people who is for working people. The question is, think sometimes it is easy to get car- are poor get it. I don’t know why that Is it too big? ried away and get in the business of comes as a shock to our Democrat col- When Bill Clinton became President, trying to look at people’s motives. I leagues. Government was taking in taxes, 17.8 would like, in my concluding com- Our dear friend from South Carolina cents out of every dollar earned by ments, to try to set this whole thing in said the rich get it all. Well, the plain every American. Because of the mas- perspective. truth is that the average family in sive tax increase in 1993 and because July 29, 1999 CONGRESSIONAL RECORD — SENATE S9669 people, as incomes have gone up, have I see that one of my colleagues who the national defense. It may be true moved into higher brackets, Govern- had asked to speak before, came and that refunding the overpayment will ment is now taking a peacetime record waited for others to speak, has come mean we cannot fund some low priority 20.6 percent of the economy in Federal back. How much time do I have at this programs, but that is the point: tax- taxes. point? payers ought to be able to decide how Now, if we took all $1 trillion of the The PRESIDING OFFICER. The Sen- to spend their own hard-earned money non-Social Security surplus and gave it ator has 6 minutes. before Washington wastes it. back to the American worker in tax Mr. GRAMM. I yield that Senator 5 Critics of the tax-relief bill also cuts—and I remind Senators, we are minutes of my time, and then I will claim that it cannot be justified be- giving less than $800 billion because we sum up with the last minute. cause projected surpluses may never are keeping $200 billion for Medicare The PRESIDING OFFICER. The Sen- materialize, that Congress and the and for emergencies—if we gave it all ator from Arizona. President will be unable to live within back, the tax burden, at 18.8 percent of Mr. KYL. Mr. President, I have heard the spending limits we agreed to on a every dollar earned, would still be sub- the name of the Federal Reserve Board bipartisan basis only two years ago. In stantially higher than it was the day Chairman, Alan Greenspan, invoked in other words, they contend that spend- Bill Clinton became President. So even this debate as if the Chairman would ing the surplus is a preordained out- if you adopt our tax cut and even if the oppose the tax-relief bill. That is not come. To me, that is not a reason to President signed it, when he left office my understanding of where Mr. Green- defer tax relief. It is the very reason we and when this tax cut was fully imple- span stands on the issue. I want to in- need to pass tax relief—before Wash- mented, he could say: Taxes were sub- clude for the RECORD at the end of my ington can find new ways to spend the stantially higher when I left than when remarks a copy of a Wall Street Jour- tax overpayment. I came—even though supposedly we are nal editorial on the subject that ran on Mr. President, I think it is important talking about a huge tax cut. July 27, 1999. to clarify that we are talking about Now, finally, if you take the arith- When Chairman Greenspan testified what to do with the non-Social Secu- metic and you say: How big is this tax before the Banking Committee last rity surplus. Our plan saves all of the cut relative to the level of taxes we are week, he said that he would delay tax Social Security surplus for Social Se- collecting, over a 10-year period, the cutting and apply the surplus to debt curity. President Clinton says that it tax cut is a whopping 3.5 percent. Over repayment—but here is the part of the is his goal as well, but his budget a 10-year period, if we adopt our tax quote that many in the media have would actually spend $158 billion of the cut, we are reducing revenues by 3.5 failed to report. He said he would defer Social Security surplus on other pro- percent. tax cuts: grams. If our colleagues on the other How can the President say this tax . . . unless, as I’ve indicated many times, it side of the aisle would end their fili- cut endangers the American economy? appears that the surplus is going to become buster against the Social Security In fact, the day before yesterday he a lightening rod for major increases in out- lockbox bill, we could pass it and make was saying it endangers women’s lays (emphasis added). That’s the worst of all sure the Social Security surplus is not health care; if we let working people possible worlds, from a fiscal policy point of spent. keep more of the money they earn, it is view, and that, under all conditions, should Let me turn for a few moments to going to hurt women’s health. be avoided. the specific provisions of the tax-relief I don’t know, if this debate goes on Mr. Greenspan went on to say, ‘‘I bill that is before us today. I want to another day or two, he may say that have great sympathy for those who begin by commending the chairman of infantile paralysis will be back, that wish to cut taxes now to pre-empt that the Finance Committee for producing a polio will suddenly descend on Amer- process, and indeed if it turns out that bill that fully meets the instructions of ica. If you let people keep more of what they are right, then I would say mov- the budget resolution we passed earlier they earn, it could happen. The bu- ing on the tax front makes a good deal this year and provides a full $792 billion bonic plague could come back. The of sense to me.’’ in tax relief over the next decade. point is, we are talking about 3.5-per- Mr. President, Chairman Greenspan’s But I must say that I would have cent tax cuts over 10 years. view is important because opponents of written the bill very differently. It Why are we doing this? We are doing this tax relief bill claim that the Fed- seems to me that there are too many it because we are going to collect $3 eral Reserve will respond to its enact- provisions that are targeted too nar- trillion in taxes over the next 10 years ment by raising interest rates to the rowly. For example, the bill includes a above the level we are going to spend. cool economy. But Mr. Greenspan’s re- tax break for the renovation of historic We are taking $2 trillion and putting it marks make it clear that the real homes. That is great if you intend to away so when we get a President that threat to continue prosperity is bigger engage in such renovation. But if you has the courage to fix Social Secu- government, not tax relief. And if the do not have the means to own a his- rity—we do not have such a President tax overpayment is not returned to toric home, or do not want one, you get today, I am sad to say, but when we get taxpayers, I think it is clear that it no relief. one, we will have the money and we will be spent long before it can be ap- People with a foreign address would will be ready to do it. plied to debt reduction. have their frequent flyer miles exempt- Then out of the trillion that is left, Just consider that President Clinton ed from the 7.5 percent air passenger we are saying, let us give eight-tenths is proposing new spending amounting ticket tax. of it back in tax cuts and let us keep to $826 billion—more than the 10-year Generation of electricity from chick- two-tenths of it for Medicare and for cost of the tax-relief bill that is before en litter would earn a tax break. any emergencies we might have. us. Remember, too, that our tax bill And if you are fortunate enough to Our colleagues say, if you give these accounts for only about 25 percent of get certain scholarships, your award tax cuts, the money is gone forever. the available surplus. In other words, would be excluded from tax. That is interesting because we raise we are only proposing to refund about These four provisions alone—and taxes round here all the time. But yet 25 cents of every surplus dollar to the each may have merit in its own right— when they spend this money on $1.033 people who sent it to us—hardly a have a combined revenue impact of trillion of new programs, it is as if we risky or irresponsible thing. Seventy about $4 billion over 10 years—money can snap our fingers and have it back. five cents of every surplus dollar would that I would prefer to put toward The truth is, you can always get be dedicated to preserving Social Secu- broad-based, growth-oriented tax relief money back that you give to the Amer- rity and Medicare, and funding other that help all taxpayers. ican public in tax cuts. If we start 81 domestic priorities. While there are many worthwhile new programs, which is what President Remember, to the extent that there provisions in the Finance Committee Clinton wants to do, we will never be is a surplus, we will have taken care of bill, a better approach is embodied in able to get that money back. We will our core obligations already—things an amendment that will be offered by never be able to end those programs. like education and health care, running Senator PHIL GRAMM of Texas. Whereas That is what the debate is about. our national parks, and providing for the committee bill attempts to spread S9670 CONGRESSIONAL RECORD — SENATE July 29, 1999 relief among some 130 parts of the Tax working Americans from passing the By repealing the death tax and put- Code, the Gramm amendment would bulk of their next eggs to their chil- ting those resources to better use, the focus on just five areas, using the sur- dren or grandchildren, or even their Joint Committee estimates that as plus to finally correct some of the most local charities. Liberal Professor of many as 240,000 jobs could be created unfair and egregious provisions of the Law at the University of Southern over seven years and Americans would law. California, Edward J. McCaffrey, put it have an additional $24.4 billion in dis- The Gramm amendment would, for this way: ‘‘Polls and practices show posable personal income. example, expand on the provisions of that we like sin taxes, such as on alco- Unlike the Finance Committee bill, the underlying bill to completely hol and cigarettes.’’ ‘‘The estate tax,’’ which leaves the death tax in place in- eliminate the marriage-tax penalty. he went on to say, ‘‘is an anti-sin, or a definitely, the Gramm amendment What rationale can there possibly be virtue, tax. It is a tax on work and sav- would repeal the tax—pull it out by its for imposing such a penalty? All of us ings without consumption, on thrift, roots. The House has already passed say we are concerned that families do on long term savings. There is no rea- similar provisions, and the Senate not have enough to make ends meet— son even a liberal populace need sup- should, as well. Death-tax repeal is a that they do not have enough to pay port it.’’ must. for child care, college, or to buy their Economists Henry Aaron and Alicia Mr. President, there are three other own homes. Yet we tolerate a system Munnell reached similar conclusions, components of the Gramm amendment that overtaxes families. According to writing in a 1992 study that death taxes that I will touch on only briefly. First, Tax Foundation estimates, the average ‘‘have failed to achieve their intended it would reduce marginal income-tax American family pays almost 40 per- purposes. They raise little revenue. rates by 10 percent across the board. In cent of its income in taxes to federal, They impose large excess burdens. other words, all taxpayers would see state, and local governments. To put it They are unfair.’’ their tax bills reduced, proportionate another way, in families where both In fact, 77 percent of the people re- to how much they pay. This is probably parents work, one of the parents is sponding to survey by the Polling Com- the fairest way of returning the tax nearly working full time just to pay pany last year indicated that they the family’s tax bill. It is no wonder, overpayment. favor repeal of the death tax. When Second, the amendment would index then, that parents do not have enough Californians had the chance to weigh in to make ends meet when government is capital gains for inflation, recognizing with a ballot proposition, they voted taking that much. It is just not right. that the Treasury should not reap the two-to-one to repeal their state’s death The marriage penalty alone is esti- benefit of inflationary policies. tax. The legislatures of five other mated to cost the average couple an Third, it would provide a full deduc- states have enacted legislation since extra $1,400 a year. About 21 million tion for health insurance for the self 1997 that will either eliminate or sig- American couples are affected, and the employed. nificantly reduce the burden of their cost is particularly high for the work- Mr. President, the Gramm amend- states’ death taxes. ing poor. Two-earner families making ment would provide broad-based relief, Talk to the men and women who run less than $20,000 often must devote a and would do so in a way that is not small businesses around the country full eight percent of their income to only fair, but which would keep the and you will find that death taxes are pay the marriage penalty. The highest economy growing and providing a bet- a major concern to them. The 1995 percentage of couples hit by the mar- ter standard of living for all Ameri- White House Conference on Small Busi- riage penalty earns between $20,000 and cans. ness identified the death tax as one of $30,000 per year. I will vote for the Gramm amend- Think what these families could do small business’s top concerns, and dele- gates to the conference voted over- ment. If it is defeated, I will vote for with an extra $1,400 in their pockets. the underlying bill in order to get it to They could pay for three to four whelmingly to endorse its repeal. Re- member, this is a tax that is imposed conference where the bill could be im- months of day care if they choose to proved. I will, however, reserve judg- send a child outside the home—or on a family business when it is least able to afford the payment—upon the ment about whether to support the make it easier for one parent to stay at conference report until I can see if it home to take care of the children, if death of the person with the greatest practical and institutional knowledge comes close to the Gramm amendment that is what they decide is best for or the House bill. them. They could make four to five of that business’s operations. Before concluding, I ask unanimous payments on their car or minivan. Although the death tax raises only consent that the Wall Street Journal They could pay their utility bill for about one percent of the federal gov- editorial from July 27, 1999, which I nine months. ernment’s annual revenue, it exerts a The Finance Committee bill goes a disproportionately large and negative mentioned at the beginning of my re- ECORD at this long way toward resolving the mar- impact on the economy. In fact, Alicia marks, be printed in the R point. riage-penalty problem, and I thank the Munnell, a former member of President chairman of the Finance Committee Clinton’s Council of Economic Advi- There being no objection, the edi- for that; but since we have the re- sors, estimates that the costs of com- torial was ordered to be printed in the sources to solve it fully once and for plying with death-tax laws are roughly RECORD, as follows: all, we should. the same magnitude as the revenue REVIEW & OUTLOOK—TRUTH AND TAXES The death tax is just as wrong, and raised. In 1998, for example that Ronald Reagan once famously noted that we ought to do something about it, too. amounted to about $23 billion. In other ‘‘facts are stubborn things,’’ but that was be- The Gramm amendment includes the words, for every dollar of tax revenue fore the Clinton Presidency. One con- provisions of the Kyl-Kerrey bill, as raised by the death tax, another dollar sequence of Clintonism is that facts have modified by the House, that would is squandered in the economy simply to been irrelevant to political debate, as for ex- eliminate the death tax outright. comply with or avoid the tax. ample in the current fight over tax cuts. Although most Americans will prob- Over time, the adverse consequences Under the new Clinton rules, by now ably never pay a death tax, most peo- are compounded. A report issued by the imbedded in media coverage, it doesn’t mat- ter whether something is true; what counts ple still sense that there is something Joint Economic Committee last De- is whether it works politically. Thus last terribly wrong with a system that al- cember concluded that the existence of week Federal Reserve Chairman Alan Green- lows Washington to seize more than the death tax this century has reduced span suddenly found himself hailed as a hero half of whatever is left after someone the stock of capital in the economy by of the Democratic Party, allegedly for dies—a system that prevents hard- nearly half a trillion dollars. trashing the House Republican tax-cut bill. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9671 Or so the news reports said. We read his re- Mr. Clinton has taken to lying with such The idea that it was to prevent the ac- marks, however, and the truth is more inter- fluency that his whoppers are barely even cumulation of wealth no longer works. esting. noticed. We’re not optimistic that anyone In today’s world, when you have to sell Mr. Greenspan: ‘‘My first priority, if I were else will keep him honest. But we thought the business, you usually sell to some given such a priority, is to let the surpluses our readers would like to know. run.’’ big conglomerate that then takes it Rep. John LaFalce (D., N.Y.): ‘‘Thank you, Mr. KYL. To reiterate, the bill in- over. Mr. Chairman.’’ cludes a tax break for the renovation of So the death tax is unfair. Our pro- Mr. Greenspan: ‘‘As I’ve said before, my historic homes. That is great, if you in- posal, which in effect converts it to a second priority is if you find that as a con- tend to engage in such a renovation capital gains tax on the sale of the as- sequence of those surpluses they tend to be and you have a historic home. But if spent, then I would be more in the camp of sets if and when they are ever sold, is you don’t have that kind of a home, it a much fairer proposal. It still permits cutting taxes, because the least desirable is is not going to do you much good. Peo- using those surpluses for expanding out- the Government to recover some of the lays.’’ ple with foreign addresses would have money, but it is not based upon the For some reason the press corps never their frequent flier miles exempted death of the individual, it is based upon mentioned this spending caveat, as large as from the 7.5-percent passenger ticket the sale of the asset when the people it is. We don’t know how they missed it, be- tax. want to sell it. cause a short time later the Fed chief said Generation of electricity from chick- There are three other components I he’d delay tax cutting ‘‘unless, as I’ve indi- en litter would earn a tax break. If you cated many times, it appears that the sur- will touch on briefly. First, it reduces plus is going to become a lightening rod for are fortunate to get certain scholar- the marginal income tax by 10 percent major increases in outlays. That’s the worst ship, you could be excluded from a tax. across the board. In other words, all of all possible worlds, for a fiscal policy These four provisions alone, which may taxpayers would see their taxes re- point of view, and that, under all conditions, well have merit, have a combined rev- duced, proportionate to how much they should be avoided. enue impact of about $4 billion over 10 pay, as the Senator pointed out. It is ‘‘I have great sympathy for those who wish years—money I would prefer to put to- probably the fairest way of returning to cut taxes now to pre-empt that process, ward the kind of relief Senator Gramm and indeed, if it turns out that they are the tax overpayment. The amendment right, then I would say moving on the tax has been proposing. That is why I sup- would index capital gains for inflation, front makes a good deal of sense to me.’’ port his amendment. recognizing that the Treasury should Now, also keep in mind that Mr. Greenspan Let’s take one of the provisions of his not reap the benefit of inflationary pol- is a central banker. He runs monetary pol- amendment, whereas, the committee icy. Finally, it would provide a full de- icy, which means he needs the political run- bill attempts to spread relief. Out of duction for health insurance for the ning room to raise interest rates from time about 130 different parts of the Tax to time. Like all central bankers, he gets ir- self-employed, something I think ev- Code, the Gramm amendment focuses erybody would like to see done. rationally exuberant about deficits, which he on just 5 particular areas, using the fears could return and complicate this task. We can afford to do those things, and Ergo, he’d prefer surpluses to pile up from surplus to finally correct some of the we ought to do those things in this here to eternity. most unfair and egregious provisions of amendment. I will vote for the GRAMM Yet, if the surpluses are going to be spent, the law. For example, it eliminates the amendment. If it is defeated, I will he’d still rather cut taxes first. And indeed, marriage tax penalty. vote for the underlying bill in order to last week Mr. Greenspan repeated his belief The Finance Committee proposal get it to conference where it can be im- that the revenue-maximizing tax rate for goes a long way toward working on proved. I will reserve judgment on capital gains is ‘‘zero’’ and that he prefers a that marriage penalty, but it does not cut in marginal tax rates. whether to support the conference re- As it happens, last week the Beltway’s eliminate it. The Gramm proposal port until I see whether it comes closer media sleuths also ignored some startling would do that. It is not fair that we to the approach Senator GRAMM has facts from the Congressional Budget Office. overtax families just because they are taken. CBO—historically no friend of tax-cutting— married. The impact is estimated to Mr. GRAMM addressed the Chair. compared Congress’s budget proposals with cost the average couple an extra $1,400 The PRESIDING OFFICER. The Sen- Mr. Clinton’s. And it found that, despite its a year. About 21 million American cou- ator from Texas is recognized. $800 billion tax cut over 10 years, Congress’s ples are affected. It is no wonder both budget actually reduces the federal debt Mr. GRAMM. Mr. President, I have more than does Mr. Clinton’s spouses in the family are having to worked up an example that I think How can this be? because Mr. Clinton pro- work. One, in effect, is working for the tells the story here at the end of the poses to spend that money instead of use it family, and the other is working to pay debate. The question is, If we have a to retire debt, just as Mr. Greenspan fears. off the taxes. They are upset with this simple tax cut that cuts taxes across Here’s the CBO math on the Clinton pro- marriage tax penalty. I support that the board by 10 percent, eliminates the posals: provision. marriage penalty, repeals the death $111 billion for Medicare, including $168 bil- While we deal with the death tax in lion for the new prescription drug bribe less tax, indexes capital gains taxes, and other savings; the Finance Committee proposal, we gives a full deduction for health insur- $245 billion for USA Accounts, another po- don’t eliminate it. It ought to be elimi- ance, what will it mean to your family? litical handout; nated. The Gramm proposal eliminates Obviously, it is easy to take how $328 billion for additional discretionary it along the lines of the Kyl-Kerrey much taxes you pay and then take the spending—$127 billion for defense and $201 bill. I appreciate Senator Gramm in- 10 percent. Here is an example. Take billion in nondefense programs’’; and $142 billion for higher debt service costs be- cluding our provision in his amend- this couple Senator HUTCHISON talked cause of the higher spending. ment. The death tax is the most unfair about, where you have a teacher and a The GOP tax cut is about $792 billion, tax of all. Death should not be a tax- football coach and they are married. while Mr. Clinton’s new spending would able event. If you want to tax people Together, they make $70,000 a year. amount to $826 billion. In short, Mr. Clinton because they make some economic de- Now, I know there are some people on isn’t against the GOP tax cut because he cision to spend money, to take money the other side of the aisle who are wants to save it for posterity. He’s against it out of an account, to sell an asset, then going to say they are rich. They have because he wants to spend that money in- tax that economic decision. They un- stead. Which by Mr. Greenspan’s own testi- two children, and they might have one mony last week means the Fed chief would derstand going in what the con- of them in college. If they have both of endorse cutting taxes first. sequences are going to be. But nobody them in college, they are among the And, by the way, don’t believe Mr. Clinton chooses to die. Why their heirs should most financially stressed people in when he claims, as he did in his Saturday have to pay a tax because of a death is America. radio address, that ‘‘the GOP tax cut is so beyond most of us. It brings in about 1 But what would happen under this large it would require dramatic cuts in vial percent in revenue. It is not worth it. bill is that the 10 percent tax cut would areas, such as education, the environment, An awful lot of small businesses and mean that this family—a coach and a biomedical research, defense and crime fight- ing.’’ As CBO also shows, since 1990 domestic farms, which have all of the assets tied teacher, making $70,000 a year—would spending (not including entitlements) has in- up in equipment and the capital of the get an $800 tax cut; actually, it would creased by 5% a year; that’s roughly double business itself, end up having to sell be an $809 tax cut because of the 10 per- the rate of inflation. their assets in order to pay the taxes. cent across-the-board cut; they would S9672 CONGRESSIONAL RECORD — SENATE July 29, 1999 get a $1,400 tax cut from the marriage This debate is about priorities. New In 1998 alone, private industry spent penalty elimination, meaning, in total, tax breaks are a priority for the Repub- more than $21 billion in research on they would get $2,200 in tax cuts. That licans. Prescription drugs for senior new medicines and to bring them to is roughly, I think, what working mid- citizens are not. If senior citizens were the public. dle America is about. the priority, we would be debating a These miracle drugs save lives—and Mr. President, I yield all my time Medicare prescription drug bill today— they save dollars too, by preventing back. not a tax cut bill. If senior citizens unnecessary hospitalization and expen- Mr. MOYNIHAN. Mr. President, this were the priority, we would be debating sive surgery. All patients deserve af- side of the aisle yields all our time a tax bill after we had taken care of fordable access to these medications. back. Medicare and Social Security—not be- Yet, Medicare, which is the nation’s Mr. GRAMM. Mr. President, I ask fore. largest insurer, does not cover out-pa- unanimous consent that the Gramm These Republican tax bills have $230 tient prescription drugs, and senior amendment, No. 1405, be temporarily billion in new tax breaks for people citizens and persons with disabilities set aside in order for Senator KENNEDY with incomes over $300,000 a year. They pay a heavy price for this glaring omis- to offer a motion relative to prescrip- reinstate the three-martini lunch de- sion. tion drugs. I further ask consent that duction. Prescription drug bills eat up a large following the debate time on that mo- There are sweetheart deals for the in- and disproportionate share of the typ- tion, the Senate then proceed to a vote surance industry, the timber industry, ical elderly household’s income. Senior on or in relation to the Gramm amend- the oil industry, and large multi- citizen spend three times more of their ment, No. 1405, to be followed by a vote national corporations. But there is not income on health care than persons on or in relation to the Kennedy mo- one dime for Medicare prescription under 65, and they account for one- tion. I ask unanimous consent that no drugs for senior citizens. third of all prescription drug expendi- other amendments be in order to the Medicare is a clear contract between tures. yet they make up only 12 per- amendment prior to the vote. I further workers and their government. It says, cent of the population. ask consent that there be 2 minutes ‘‘Work hard, pay into the system when The greatest gap in Medicare—and equally divided prior to each vote. you are young, and you will have the greatest anachronism—is its fail- The PRESIDING OFFICER. Without health security in your retirement ure to cover prescription drugs. Nine- objection, it is so ordered. years.’’ But that commitment is being ty-nine percent of all - Mr. MOYNIHAN. Mr. President, the broken today and every day, because based plans—ninety-nine percent— Senator from New York, on behalf of Medicare does not cover prescription cover prescription drugs today. But the Finance Committee, is honored to drugs. Medicare is still mired in the mid- yield to our distinguished friend and When Medicare was enacted in 1965, 1960s—when the private plans on which long-time colleague, Senator KENNEDY coverage of prescription drugs in pri- Medicare was modeled did not provide of Massachusetts. We welcome him vate insurance policies was not the this coverage. back to the debate. norm—and Medicare followed the Because of this gap and other gaps in The PRESIDING OFFICER. The Sen- standard practice in the private mar- Medicare, and the growing cost of the ator from Massachusetts is recognized. ket. Today, ninety-nine percent of em- Part B premium, Medicare now pays Mr. KENNEDY. Mr. President, I un- ployment-based health insurance poli- only 50% of the out-of-pocket medical derstand we now have a 1-hour time cies provide prescription drug cov- costs of the elderly. On average, senior limitation, am I correct, and the time erage—but Medicare is caught in a 34 citizens now spend almost as much of is divided? year old time warp—and too many sen- their income on health care as they did The PRESIDING OFFICER. Thirty iors are suffering as a result. before Medicare was enacted. And minutes on each side. Too many seniors today must choose Medicare was enacted because there Mr. KENNEDY. I yield myself 10 min- between food on the table and the med- was a crisis in health care for the el- utes, Mr. President. icine they need to stay healthy or to derly in the 1960s. How can we fail to The PRESIDING OFFICER. The Sen- treat their illnesses. act today, to deal with the health care ator from Massachusetts is recognized Too many seniors take half the pills crisis for the elderly in the 1990s? for 10 minutes. their doctor prescribes, or don’t even Prescription drugs are the single MOTION TO RECOMMIT fill needed prescriptions—because they largest out-of-pocket cost to the elder- (Purpose: To modernize and improve the cannot afford the high cost of prescrip- ly for health care. The average senior Medicare program by providing a long- tion drugs. Too many seniors are pay- citizen fills an average of eighteen pre- overdue prescription drug benefit, by re- ing twice as much as they should for scriptions a year, and takes four to six ducing or deferring certain new tax breaks) the drugs they need, because they are prescriptions daily. Many elderly Mr. KENNEDY. Mr. President, I send forced to pay full price, while almost Americans face monthly drug bills of a motion to the desk. everyone with a private insurance pol- $100, $200 or even more. The PRESIDING OFFICER. The icy benefits from negotiated discounts. America’s senior citizens and dis- clerk will report the motion. Too many seniors are ending up hos- abled citizens deserve to benefit from The assistant legislative clerk read pitalized—at immense costs to Medi- new discoveries in the same way that as follows: care—because they aren’t receiving the other families do. Yet, without negoti- The Senator from Massachusetts, Mr. KEN- drugs they need at all, or cannot afford ating power, they receive the brunt of NEDY, moves to recommit the bill to the to take them correctly. Pharma- cost-shifting—often with devastating Committee on Finance, with instructions to ceutical products are increasingly the results. In the words of a recent report report back within 3 days, with an amend- source of miracle cures for a host of by Standard & Poor ‘‘Drugmakers have ment to reserve amounts sufficient to pro- vide a prescription drug benefit to all Medi- dread diseases, but senior citizens will historically raised prices to private care recipients, in the context of modern- be left out and left behind if we do not customers to compensate for the dis- izing and strengthening Medicare, by reduc- act. counts they grant to managed care ing or deferring certain new tax breaks in The 21st century may well be the consumers.’’ The private customers re- the bill, especially those which dispropor- century of life sciences. With the sup- ferred to in this report are largely the tionately benefit the wealthy. port of the American people, Congress nation’s mothers, fathers, aunts, un- Mr. KENNEDY. Mr. President, as was is on its way to our goal of doubling cles, grandmothers, and grandfathers. indicated in the motion, senior citizens the budget of the National Institutes of Despite—and to a large extent be- deserve coverage of prescription drugs Health. This investment is seed money cause of—Medicare’s lack of coverage under Medicare, and it is time for Con- for the additional basic research that for prescription drugs, the misuse of gress to see that they get it. This will enable private and public sector such drugs results in preventable ill- amendment presents a clear choice be- scientists to develop new therapies nesses that cost Medicare $20 billion or tween prescription drug coverage for that will improve and extend the lives more a year, while imposing vast mis- the elderly and unnecessary new tax of people in the United States and ery on senior citizens. It is in their breaks for the wealthy. around the globe. best interest, and in the best interest July 29, 1999 CONGRESSIONAL RECORD — SENATE S9673 of Medicare, to design a system that priority, it would be tax breaks that senior citizens should have to pay to encourages the proper use, and mini- would get the left-overs, not the elder- get the prescription drugs they need. mizes the improper use of prescription ly. A couple of Marshfield, Massachu- drugs. Substantial savings can be found Republicans also say that prescrip- setts vividly demonstrates why we if physicians and pharmacists are edu- tion drug coverage should not be pro- need to act now. Their plight is rep- cated on senior citizen-prescription vided to all senior citizens—only to the resentative of millions of other senior drug interactions and on ways to iden- poor or those who have no current cov- tify, prevent, and correct prescription citizens across the country. They live erage. But we heard those same argu- on a fixed income of $30,000 a year from drug-related problems. ments when Medicare was originally Beneficiaries, too, must follow in- Social Security and a retirement pen- enacted. The American people didn’t sion. They are not poor. Their income structions that are dispensed with the buy these arguments then—and they medication itself. Too often, we hear is not below 135% of poverty. In fact, it won’t buy them now. is not even below 200% of poverty—but stories of senior citizens who skimp on Let’s look at the numbers. Fourteen medicine. They take half doses or oth- it is not enough for them to afford the million elderly and disabled Medicare prescription drugs they need. Both erwise try to stretch their prescription, beneficiaries—one-third of the total— to make it last longer. That is not have substantial medical needs, and right, and it doesn’t have to happen. If do not have a dime of prescription drug both belong to the Medicare HMO—but senior citizens are confident that the coverage today. Not a dime. 19% of the couple’s income is still drugs they need will be covered, proper One-quarter of Medicare beneficiaries spent on prescription drugs. usage will improve, and so will the have coverage through an employer— but retiree health benefits are on the By April, the couple had already ex- quality of life for senior citizens. hausted their HMO’s $150 quarterly cap During the course of this debate, we chopping block as companies seek to cut costs by trimming health care for prescription drug coverage. The $956 will hear many arguments from the op- cost of the wife’s medications for May ponents of this amendment. Their ar- spending. In fact, the proportion of firms offering coverage has dropped and June will come completely out of guments are as predictable as they are their pockets. She has been rationing wrong. one-quarter in just the last four years. No senior citizen—and certainly no 50- her medication—not taking it as pre- First, we will hear that the sponsors scribed, in an attempt to stretch out of this excessive tax cut are all for a year-old looking forward to retire- Medicare prescription drug benefit, ment—can count on prescription drug the medicine to save money. She was a too. They claim that even after their coverage being there for them when se- stroke victim five years ago. Yet, she tax cut, they still have $253 billion of rious illness strikes. has to cut back considerably on her surplus left. But we all know that Seven million Americans get pre- most expensive prescriptions. She is those estimates are as phony as a three scription drug coverage through a having a difficult time with the left dollar bill—and about as valuable. Medicare HMO. But that coverage is of- side of her body, and cannot move her The only way that any money is left fered voluntarily—and it is often being left arm. after the Republican tax cut is because cut back or eliminated altogether. She says, ‘‘My muscles are really their budget pretends to cut national Three-quarters of Medicare HMOs will tight, and it is a result of not taking defense by $198 billion below the Presi- impose caps on their benefits of less my Methocarbamol, because I am try- dent’s request—a request that Repub- than $1,000 next year. Almost one-third ing to stretch my prescription dollars. licans say is inadequate. Their budget will impose caps of less than $500. The We don’t go out, we can’t afford gas, also pretends that there will never be majority of seniors have annual drug and we have had to cut down on gro- another emergency appropriation— expenses well in excess of $500. More ceries.’’ even though emergencies will cost us than $325,000 beneficiaries will be $90 billion over the next 10 years if dropped from their HMOs next year. Every senior citizen in America could present trends continue. Their budget There is not a single senior citizens find themselves forced to choose be- pretends to cut domestic programs who joined an HMO because of the tween a decent retirement and the from Head Start to education to high- promise of affordable prescription drug medications they need to survive. No way construction to law enforcement benefits who can count on that promise person and no family should have to by half a trillion dollars over the next being kept. make that unfair choice. This is what ten years, cuts that no one believes Four and a half million senior citi- our amendment is all about. will ever happen. zens get prescription drug coverage Senior citizens need and deserve pre- Republicans hope they can continue through a Medigap plan. But that cov- scription drug coverage under Medi- to play ‘‘let’s pretend’’ until this reck- erage is extraordinarily expensive and care. Any senior citizen will tell you less and irresponsible tax cut passes inadequate. According to Consumer Re- that—and so will their children and the Senate. But by then it will be too ports, a seventy-four year old senior grandchildren. late—too late for today’s senior citi- citizen enrolled in the least generous I would like to just reiterate an ear- zens, who need prescription drug cov- Medigap plan offering drug coverage lier point. The debate this week is real- erage—too late for tomorrow’s senior would pay an average of close to $2,000 ly about priorities, and there are many citizens, who need a solvent Medicare— a year more in premiums—on top of too late to protect Social Security— $1,4000 for the non-drug part of the cov- of us who believe that, prior to moving too late to meet pressing needs to edu- erage—a total of more than $3,000 a toward any of these kinds of tax cate the nation’s children, support bio- year. And that is an average. Some breaks, we ought to secure Social Secu- medical research, fight crime, protect beneficiaries must pay more than $9,000 rity, we ought to ensure the security of the environment, and meet all the a year for drug coverage through the Medicare system, and include in other pressing needs that are priorities Medigap. Whatever the starting pre- the Medicare system a prescription for the American people. mium, it goes higher and higher as sen- drug benefit program. This is an issue of priorities. Repub- ior citizens age and their need for med- I have listened over the course of the licans may say that there is enough ical care grows. Anyone who misses the past 2 days, as well as earlier in the money left over to protect seniors. Let chance to enroll in a plan offering drug year, to those who say we can afford them put their votes where their coverage at age 65 never gets another the kind of tax breaks that are being mouth is. All this motion does is say chance if they have any health prob- recommended. They say that we will set aside enough money out of the tax lems. have sufficient resources at the end of cut to provide a prescription drug ben- The only senior citizens who have it in order to provide for a prescription efit before we vote to pass a tax bill. stable, secure, affordable Medicare drug benefit. I don’t believe that to be This should be a simple vote for any drug coverage today are the very poor the case. Senator who cares about senior citi- on Medicaid. The idea that only the Even if it were the case, I am not zens. Tax cuts are a priority for the Re- impoverished should qualify for needed going to take our limited time to de- publicans. Prescriptions drugs for sen- hospital and doctor care was popular ior citizens are not. If senior citizens with Republicans more than 30 years bate how much may be left over after were the priority, we would be debating ago when they fought against the en- we deal with the Republican tax a prescription drug coverage bill actment of Medicare. The American breaks. I don’t think there will be today—not a tax cut bill. If senior citi- people rejected that cruel doctrine— much, if anything. zens were the priority, we would be de- and Medicare for all was enacted. But what we are saying today is rath- bating a tax bill after we had taken Today, it is time for the Senate to re- er than wait to see if there is anything care of Medicare and Social Security— ject the equally indefensible propo- left, let’s go ahead today. We are say- not before. If senior citizens were the sition that poverty is the price that ing that any proposal that is going to S9674 CONGRESSIONAL RECORD — SENATE July 29, 1999 come out of this Senate dealing with that before we see the major kinds of martini lunch back in 1993. It is back tax breaks is also going to include an tax breaks and tax cuts in this bill, we in the House bill. important prescription drug benefit for should meet the needs of our senior This bill has all sorts of other tax the senior citizens of this country. citizens. goodies for special interests, tax That is what we are saying. Every Member of this body can give goodies for various industries, includ- We say send this legislation back to chapter and verse about what is hap- ing the insurance industry, the timber the Finance Committee, and then we pening in their communities, and about interests, the oil and gas industry, for ask the Finance Committee to report how important this is. I am sure that foreign tax credits, and others that I back within a period of 3 days. others in this body have had the oppor- think are questionable. There are a number of acceptable tunity, as I have, of visiting a nursing Out of all those issue that are out proposals. The proposal by the Presi- home or a senior citizen gathering and there, I say prescription drugs for the dent of the United States is one that I asking them: How many of you are elderly people are more important than favor. Senator ROCKEFELLER and I also paying out of your pocket for prescrip- putting into place the tax privileges in have a proposal that I favor. But this tion drugs $25 or $50 or $75 a month? this bill. motion simply requires the Finance You see all the hands go up. You ask This motion will put the Senate on Committee to come back with funds them: How many are paying $75 a record in favor of closing the largest sufficient to provide prescription drug month? You will find about half to gap in Medicare. A vote to reject it is coverage to all Medicare beneficiaries. three-quarters of them. How many are a vote to put a higher priority on new It doesn’t specify one proposal over an- paying $50? Half or three-quarters of tax breaks for the wealthy than on other. That is, in effect, what this them. How many are paying $100 or quality medical care for senior citi- amendment is really all about. more? You will still see many of those zens. I know where the American peo- We believe that coverage of prescrip- hands in the air. ple stand. It is time for the Senate to tion drugs is necessary in order to ef- We are finding that many of the sen- decide where it stands. fectively upgrade Medicare to deal ior citizens are skimping on their pre- I hope this motion will be accepted. with modern realities. There are other scription drugs—they take half of it or The PRESIDING OFFICER. The Sen- considerations in the Medicare pro- skip days—despite all of the negative ator from New York. gram that the President and others health implications that has. Mr. MOYNIHAN. I yield myself 3 have outlined which deserve consider- It is interesting that for the five minutes. I want to comment on the ation. But today we should say that be- most common preventable conditions history that our distinguished friend, fore we pass significant tax breaks, we or diseases in the elderly, just five pre- the senior Senator from Massachu- are going to make a commitment that ventable diseases for which prescrip- setts, makes about the origins of the a prescription drug benefit program be tion drugs are available, the Medicare Medicare program. put into place. system pays $30 billion a year in hos- He was the Senator at the time. I was It is a matter of enormous impor- pitalizations. Many of those hos- a member of the administration at the tance. It makes an incredible dif- pitalizations could have been avoided if time and was involved. A basic decision ference in the quality of life of the sen- those senior citizens had been able to was made, and thank goodness it was, ior citizens of this country. afford the prescription drugs rec- that Medicare, medical assistance to Prescription drug benefits in the cur- ommended by their doctors. the aging, would not be a poverty pro- rent system are completely inad- That is what we are talking about. gram. It would not be dependent upon equate. Those who rise to oppose it will We are going to pay for it either on the income. The idea was that programs say: Let us just have a partial program front end or the back end. for the poor inevitably become poor because there are only about one-third This motion makes sense because it programs. I think this has been the that have no coverage. We went is the right thing to do from a health case over the years. through those numbers earlier. Only point of view. It is the right thing to do The second point I make deals with the poorest seniors have affordable, re- from a bottom line point of view. It is 1965 and the years that led up to it. The liable and adequate coverage. necessary if we are going to meet our pharmaceutical revolution in ways Those with retiree coverage cannot continuing responsibilities to our sen- began with the discovery of penicillin be certain it will continue. Those in ior citizens. in London in the 1920s, and medications HMOs are being told that their cov- I would like to mention on the floor of the kind we know today have be- erage will be limited to $500 or $1,000 a of the Senate a petition I just received come a whole new phenomenon in med- year. Others are being dropped because from Silver Spring, MD. It is from the ical care. There was a time when hos- their plan is leaving the program. Sen- Homecrest House Resident Council in pitals were about all you could do for iors who can get into medigap are Silver Spring, MD. They wrote, ill people. Now so much more can be shelling out thousands of dollars a year We are enclosing our petition signed by done, principally through pharma- for coverage that is inadequate. most of our 300 residents. We are sure that ceuticals. Coverage of prescription drugs is an we voice a concern of our friends around the Indeed, if you had to make some bi- issue of life and death for our senior Nation, seniors and disabled. We do without zarre choice between providing hospital citizens. Some would like to limit our other necessities in order to buy needed care and providing the full range of assistance to only some of the elderly. medications. pharmaceuticals, one could very well Are we going to say now on this impor- Here are the names from just one choose the latter. tant issue that we should turn Medi- senior citizen center. Three hundred The Senator spoke of five lifesaving care into a poverty program, a Med- senior citizens and disabled persons. medications which are unavailable to icaid program? Clearly, we should not. They understand the importance of people who instead go to hospitals There are those who say, well, Mr. this particular program. where they can receive consolation, President, we only have a small group Again, this debate is about priorities. but no true treatment. that aren’t covered. Let’s target it at Are we going to have tax breaks for the This is a very wise and necessary mo- that. But every kind of indicator shows wealthy and for special interests or are tion. This Senator, for sure, will sup- that coverage is declining every year we going to have the protection of our port it. for those who are fortunate enough to seniors? I yield the floor. have some coverage now. Final point: I was listening with The PRESIDING OFFICER. The Sen- Our program is very clear and simple. great interest to the debate on the ator from Delaware. Again, it says that this will be a pri- other side about whether we are going Mr. ROTH. Mr. President, I yield ority. to accept the House proposal. The fact such time as I may consume. We said: Send this legislation back to is, that House proposal has a lot of tax Mr. President, no one in the Senate the Committee. Have it come back to goodies. There is the restoration of the is more concerned about Medicare and the floor with funds reserved to have a three-martini lunch. the program’s beneficiaries than mem- prescription drug program that is Many Members thought we freed our- bers of the Finance Committee. This going to be worthy of its name. It says selves from the tax break for the three- year alone, our committee has held a July 29, 1999 CONGRESSIONAL RECORD — SENATE S9675 dozen hearings looking into the needs prescription drugs for the elderly must not in a public meeting. People are a and future of this important program. be a critical component of the reform. little embarrassed to do it. But if you We are firm in our commitment to But now is not the time to address this get to meet with people individually— strengthen and preserve Medicare for issue. I can assure you that the com- they cut their pills in half. The prob- the Americans who are now a part of mittee will continue to proceed with lem is it doesn’t give them half the the program, and for those who will de- Medicare reform as a top priority. We benefit. Actually, it can be quite dan- pend on it in the years ahead. look forward to working with Senator gerous. Or if they don’t cut their pills One of our areas of focus concerns KENNEDY and others who are concerned in half, there are people who just do prescription drug benefits, and we ap- about this issue. Likewise, we will con- not take them so they can put food on preciate the seriousness with which the tinue to give the President’s recent the table, or if they go out and buy senior Senator from Massachusetts proposal careful consideration. what they need, then they do not put takes this issue. However, now is not By proceeding methodically, but cau- food on the table. I hear my colleagues the time and place to address this tiously, Mr. President, Congress will on the other side saying ‘‘in the long issue. construct a reform package that is run.’’ In the long run? What are we The carefully crafted bipartisan Tax- complete—one that meets the pressing waiting for? What are we waiting for? payer Refund Act of 1999 leaves over needs in the lives of the seniors who de- You are talking about tax cuts. I was $500 billion of the surplus for Congress pend on the Medicare program. The on the floor earlier when we were dis- cussing the Gramm amendment, which to carefully weigh and meet the needs amendment Senator KENNEDY offers— and long-term viability of Medicare. In as well as the President’s prescription I assume will be voted down. But take September, we will turn our attention drug benefit, as it now stands—pro- that one amendment: 60 percent of the benefit goes to the top 10 percent. The to addressing this most important con- vides only limited coverage to Medi- average tax cut for the lowest income cern. care beneficiaries. earners, the lowest 60 percent, earning But we should not be pressured into By waiting . . . by proceeding con- below $38,000, would be $99. But if you simply accepting something that re- structively . . . and by working in a bi- have an income of over $300,000, it is a quires our most careful and studied at- partisan effort to reform Medicare, $20,000 tax cut. You are talking about tention. Congress will—in the end—provide a $700 billion, $800 billion of tax cuts in Testifying before the Finance Com- more complete and lasting reform—re- the Republican proposal, crowding out mittee only last week, Comptroller form that will prepare the Medicare any kind of investment like this; for General David M. Walker made it clear program for the new millennium. that Congress must take great care as This effort does not have to wait example, affordable prescription drug we address Medicare reform. He re- long. The Finance Committee intends costs for the elderly. We have another amendment, the minded us that Congress has learned to continue our work on Medicare re- Gramm amendment, which is class some sobering lessons about moving form following the August recess. warfare. That is what it is. The people forward, pressed by political expedi- I fully intend to include a prescrip- in Minnesota are scratching their tion drug option as part of the plan we ency to alter such an important pro- heads saying: We would love to get will offer. At that time, the Senate will gram, without benefiting from careful some relief, us hard-pressed working be able to more fully and carefully ex- study and deliberation. people, but that is not what the Repub- ‘‘Effectiveness,’’ Comptroller Walker amine reform legislation. This will be lican plan is. reminded our committee, ‘‘involves in the long-term interests of everyone. Now we have the Kennedy amend- collecting the data necessary to assess I compliment Senator KENNEDY on ment on the floor, which I fully sup- impact—separting the transitory from his continuing commitment in address- port, that speaks directly to the con- the permanent, and the trivial from ing social needs, but now is not the cerns and circumstances of older Amer- the important.’’ time to move on it. icans. In my State of Minnesota, this is ‘‘Steadfastness is needed,’’ Mr. Walk- I ask my colleagues to vote against critically important. Only one-third of er said, ‘‘when particular interests pit the Kennedy amendment. senior citizens have any prescription I yield the floor. the primacy of needs against the more drug coverage at all. This is a burden- Mr. KENNEDY. I yield to the Senator global interest of making Medicare af- some cost. This is a health care issue. from Minnesota, 5 minutes. fordable, sustainable, and effective for This is a public health issue. current and future generations of PRIVILEGE OF THE FLOOR What made Medicare important—it Americans. Mr. WELLSTONE. Mr. President, I was a huge step forward in 1965—is that This makes it all the more important ask unanimous consent the privilege of it was a universal coverage program. that any new benefit expansion be the floor be granted to David Doleski, When we extend prescription drug ben- carefully designed to balance needs and a fellow in my office. efits to Medicare, we make it a uni- affordability both now and over the The PRESIDING OFFICER. Without versal care program. For my father and longer term.’’ objection, it is so ordered. my mother, neither of whom are alive Mr. President, Congress cannot hap- Mr. WELLSTONE. Mr. President, let today, both of whom had Parkinson’s hazardly paste one politically moti- me say to my colleague from Delaware, disease, without Medicare they would vated change after another on the he said about four or five times, ‘‘in have gone under. They never made any Medicare program and call it reform. the long term.’’ That is not good money. The kind of drugs they needed, We must be careful. We must be delib- enough. The long term is not good and seniors need, for Parkinson’s dis- erate. To know how important this is, enough. When I am in Minnesota, and I ease—I can talk about other diseases— we simply need to harken back to 1988, travel the State, no matter where I go, they cannot afford them. when Congress—again out of politics, in town meetings, there is a huge turn- I hear my good friend from Delaware and in a rush—pasted together the out of older citizens, of senior citizens. say ‘‘in the long run.’’ The long run is Medicare Catastrophic Coverage Act. In my State of Minnesota there are too long. We are confronted with the Within six months of enacting that probably about 800,000 Medicare recipi- urgency of now. This is a clear choice. legislation, Congress and the people re- ents, and only 35 percent have any kind You are either for the tax cuts, three- alized the debacle, and we were forced of coverage at all for prescription drugs martini lunches, egregious breaks for to repeal it within the year. —35 percent. Two-thirds of elderly Min- large corporations, the vast amount of So we’ve been down this road before, nesotans have no coverage; two-thirds the money going to the highest income Mr. President. A rush to legislation in Minnesota have no coverage at all. citizens, exploding the debt over the that not only failed to serve those It is not uncommon to meet someone next 10 years and then the next 10 whom we intended to help, but that ac- who is spending $300 a month on a years it gets worse; or why don’t we be tually set back progress more than a $1,000 monthly income. Mr. President, fiscally responsible? Why don’t we pay decade. $300 a month on a $1,000 monthly in- the debt down, make sure we support There is no question that Medicare come. Social Security and Medicare, invest- reform is necessary. And there is agree- It is also not uncommon to meet ment in our children, and when we sup- ment on both sides of the aisle that with people who will tell you—actually port Medicare, the best thing we could S9676 CONGRESSIONAL RECORD — SENATE July 29, 1999 do would be to make sure there is pre- said, for prescription drug coverage, Medicare Commission—bipartisan, scription drug coverage for elderly was $46 billion for 10 years. That $46 Democrat, Republican, 17 members— Americans. billion is much less than the $90 billion got together and came up with some- I hope there will be 99 or 100 votes for we have already put in our reserve fund thing that has comprehensive Medicare this amendment. There should be. and is only a tenth of the $505 billion modernization and reform, of which I yield the floor. we set aside, but we do it right. We prescription drugs is an integral part, The PRESIDING OFFICER. The Sen- have a real plan. We do not do it piece- to upgrade that machine which is going ator from Delaware. meal. We modernize, update, bring to to be serving all of us someday. Mr. ROTH. I yield 10 minutes to Sen- life a system that was very good for How did we do it? ator FRIST. 1965, 1970, 1980, 1990, but it is not good No. 1, we provide full Federal funding The PRESIDING OFFICER. The Sen- for the year 2000, 20005, 2010, specifi- for immediate prescription drug cov- ator from Tennessee is recognized. cally when the demographic shift hits, erage for low-income seniors; that is, Mr. FRIST. Mr. President, I rise to when we have a doubling of the number up to 135 percent of poverty. speak against the amendment offered of seniors when we go forward. That is No. 2, we require in the National Bi- by my colleague, the Senator from the framework we set forward, and it is partisan Commission—I should say, our Massachusetts. The Senator from Mas- what we need to address. recommendation was approved by a sachusetts has introduced an amend- Our job, our challenge now that we majority of the members, not a super- ment which suggests we set aside this have the money set aside —we do not majority, but a majority of members bill, recommitting it to the committee need to recommit it, send it back for did vote for that—it required all plans of jurisdiction, so they will incorporate more dollars and cents—is to fix the participating with the Medicare pro- funding for a new prescription drug system inside this framework, and we gram to make an enhanced benefit benefit in the existing Medicare pro- do it in three ways. We need to mod- package available which includes pre- gram. ernize Medicare benefits, bring it up to scription drug coverage and protects I have several points to make. First date. The 1965 car is not up to today’s seniors against unlimited out-of-pock- of all, I think most important is that standards and we can modernize it. We et spending. No. 3, in that National Bipartisan the Senate, this very body, has already demonstrated, through a bipartisan Commission, we require the medigap set aside funds for Medicare moderniza- plan, the Medicare Commission—I will programs—all plans—to include pre- tion. This has now become a familiar come back to what we actually said. scription drugs, to make those drugs chart on the floor of the Senate, but I We need to modernize. No. 2, we need available in a policy. There are other think it is very important. It goes to strengthen our Medicare commit- prescription drug proposals out there right to the heart of why this amend- ment, our commitment to the seniors, that need to be discussed and should be ment should and hopefully will be de- the generation of today, the future discussed. feated today. This is the plan. The U.S. generation—we need to make sure we Congress’ use of the surplus, the al- President Clinton put a proposal on can fulfill that commitment. And No. the table. That program, I believe, is most $3.3 trillion surplus: Debt reduc- 3, the issue of prescription drugs. tion, $1.9 trillion; tax cuts, $792 billion. inadequate for a whole host of reasons Shortly after I came to the Senate, which I hope we have the opportunity We talked about that. But what is about 5 years ago, I had a patient who to discuss as we go forward. most important for this particular was a transplant patient, somebody It is a little disingenuous to say—and amendment is the $505 billion that is whom I transplanted. When I was run- I think in some ways this amendment set aside over the next 10 years to spe- ning for reelection, he was 64 years of at least implies that—that hard-work- cifically address issues such as Medi- age. When I transplanted him, he was ing families do not deserve tax relief care modernization, including things about 62. When I was elected in 1965, he today, which we have shown we can such as the prescription drugs, which I, had Medicare. He had to give up his give with the priorities that have been as a physician, believe is very impor- private plan. His private plan did cover laid out, until we set aside funds for tant that we address as we modernize, prescription drugs. When he got to be Medicare modernization by just adding strengthen, and bring Medicare up to 65, because we do not have a modern prescription drug benefits, because we date. Medicare program there today, he had have set that money aside; this body Let me repeat: The Senate, this very to give that up. has done that. body, has already set aside funds for What we need is a system that The challenge before us, and the Medicare modernization, including pre- doesn’t only focus on prescription work before us, is to modernize Medi- scription drug coverage. drugs but modernizes the overall pro- care, to strengthen Medicare so that it First, what have we done? How can I gram to match individual patients in a will be there for the next generation, say that with such determination? The system which values choice, values with a focus on the patient, to make it congressional budget plan has $505 bil- freedom with those specific needs. That less rigid, more comprehensive, have lion over 10 years. Very specifically, we is what we set out to do in the Bipar- more preventive care, have it be less say it again and again and again; it is tisan Commission. costly to the seniors. We should be able for domestic priorities. That money is We need to strengthen our Medicare to do that. There are solid proposals set aside, aside from the tax cuts, the program so it will be there. We all before us to do that. tax relief, and the debt reduction. know most young people today do not Let me briefly talk about what this No. 2, the Senate has already specifi- believe Medicare will be there for Medicare Commission came up with. cally, in a reserve fund, set aside $90 them. We need to make sure that it is. Again, remember that the majority of billion, in a reserve fund, for long-term Prescription drugs for our seniors members supported this proposal. We Medicare reform. Again, I refer people and individuals with disabilities— did not have a supermajority. to April 15, the day we passed in this again, somebody with diabetes is going The four appointees by the President very body the concurrent resolution for to be on prescription drugs later. of the United States voted against this the year 2000, in section 203, reserve Someone with chronic heart disease or proposal, but a majority of members, 10 fund for Medicare. We lay it out. The debilitating arthritis needs prescrip- of the 17, did vote in favor of it. What charts are in the back, in terms of tion drugs. It shows the inadequacy of it basically does is set up a Medicare coming up with the $92.4 billion over 10 our Medicare system today in the fact board to oversee a group of plans which years. we do reimburse for hospital beds, we could be, in many ways, individually No. 1, $505 billion is set aside for such reimburse a little bit for preventive tailored to the needs of a heart trans- things as Medicare modernization; No. care, but not enough, and not anything plant patient or chronic care patient, 2, we specifically set aside $90 billion at all for those people who need pre- but all having the same core benefits for Medicare modernization in a re- scription drugs. that we have today. serve fund, which I quoted from. I say this because I am the strongest The prescription drug coverage we No. 3, in the President’s very plan, advocate, or as strong as others, that proposed and that a majority of mem- which he introduced a couple of weeks we must make prescription drugs a bers of the Bipartisan Commission ago, the net cost of the coverage, he part of our proposal. The Bipartisan agreed to is as follows: July 29, 1999 CONGRESSIONAL RECORD — SENATE S9677 Basically, prescription drugs today side has talked constantly about we which you then are to subtract $2,000, are provided for about 28 million peo- are going to fix the system. We cannot virtually all on prescription drugs or ple. Sixty-five percent of people in do prescription drugs until we fix the on medical out-of-pocket expenses, Medicare today have some prescription system. It is a question totally of pri- leaving that senior with $8,600 a year to drug coverage. How do they get it? Em- orities. I will put a little dose of reality live all of life? Are we going to let that ployer-sponsored plans, with Medicaid into this. person hang until the Senate, in its ul- and Medicare—we call for both; it is No matter what my colleagues on ei- timate wisdom, comes to a sense of called dual eligible—and medigap in- ther side of the aisle might think, we what is Medicare reform, and are we surance. are not going to reform Medicare this going to agree on it? The proposal we came up with, and year on a systemic basis. If it happens My priority is to do prescription hopefully we are ultimately going to the way the majority party wants, it is drugs now. Pass the Kennedy amend- pass once we meet that challenge, is going to be vetoed by the President. It ment. Do it now. They talk about hav- prescription drugs provided through is not going to happen. ing a $90 billion reserve. The Senator employer-sponsored plans today, dual The question before the Senate on from Tennessee said we have fixed the eligible today, and medigap today. This this amendment is, Do we want to take problem. I am very sorry to say that group provides about 65 percent of all the tens of millions of Americans who that reserve talks about ‘‘may be spent Medicare recipients, individuals with have no prescription drugs and give for,’’ so it might be prescription drugs, disabilities, and senior citizens with them the benefit of prescription drugs it might be disasters, it might be a some coverage. It can be strengthened now through voting for the Kennedy whole series of things, but there is no with some coverage. amendment, of which I am proud to be Medicare prescription drug benefit that We basically say let’s supplement a cosponsor, or do we want to say, oh, is in their plan. that, let’s direct our attention at the 35 let’s wait and fix the system, and then In fact, if I could put it more boldly, percent of people who do not, and we do when we fix the system, which may be under the Republican tax plan, there is that through focusing on low income, 3, 4, 5, 6 years from now, we will do pre- no money for Medicare reform. There is up to 135 percent, No. 1, and, No. 2, say- scription drugs because that is sort of no money for prescription drugs. It ing anybody who is going to come to neat and orderly? does not exist. I will hear arguments, the table and participates in a plan— The world does not work like that. and numbers will be thrown back and Mr. President, I ask for 2 more minutes The real world of the Congress and the forth, but that is the fact. It does not to complete my remarks. White House does not work like that. exist. That is the reason for the Ken- Mr. ROTH. I yield 2 more minutes. We are either going to do tax cuts as nedy amendment—to make us pick a Mr. FRIST. Thus, our proposal, they want to do it over there, or we are priority: Tax cuts, for the most part which we have discussed, to fix the sys- going to do prescription drugs and for people who do not need them or, in tem will supplement by offering people maybe some modest tax cuts as we a very small measure, in a very small up to 135 percent complete and full cov- want to do it over here. That is the amount of money, prescription drugs erage, a high option plan for anybody choice that needs to be made. for people who desperately need them, who actually comes to the table. The distinguished chairman of the who do not in the form of a cliche but I present all this today to make the Finance Committee, Senator ROTH, in the form of real life, have to pick point that, No. 1, the money, the budg- talked about catastrophic health care. each week whether they are going to etary framework, has been set, has He said beware of that experience. My eat, have heat in their homes, or have been passed by the Senate. We set aside reaction is the opposite. Remember prescription drugs. I say to the Presiding Officer, I say the $505 billion specifically in the reso- that experience as the reason not to to my colleagues, try to live on $8,600 a lution; the $90 billion—the President’s back off from making a hard choice. year, as our seniors do in West Vir- own plan costs only $46 billion, and we That was one of the best bills on health ginia. You could not do it. Prescription have already addressed the problem of care this Congress ever passed. The drugs are the reason the money gets so the money. The job of the Senate and Senate did not back off on catastrophic scarce for them. We can solve that the Congress is to fix the system for health insurance. Three times they problem by passing the Kennedy the American people. A bipartisan pro- tried to repeal it in the Senate, and 3 amendment. I think we have an abso- posal that is on the table is the pre- times we had 73 votes to defeat repeal lute moral obligation to do so. because catastrophic health insurance mium support plan. To wait for Medicare reform to be Let’s look at other plans. Let’s not was a good thing for seniors. We did fully formed is a hoax upon those peo- drop that issue. That is unnecessary. not get the message out to seniors. ple. They do not know that we do not Supporting the Kennedy amendment That was our fault. But do not say be- have a consensus on how to reform does not do that today. We need to sup- ware of catastrophic health insurance. Medicare. They do know that they are port freedom for seniors, give that free- The House backed off. We did not. It hurting. They do know that they do dom of choice, that freedom to match was good legislation. not have prescription drugs. And they specific needs with a plan. We need to We are here to do the right thing. do know that some of them take up to address Medicare. We have a plan to do The right thing is to pick between the 12 drugs a day, and they cost, and it is that. We have already set aside the re- priorities. Do we want to wait 4, 5, 6, 8 coming out of their pockets. sources to do that. years to fix Medicare until we get a bi- Medicare has no prescription drug The political tactics we are wit- partisan consensus? People talk about benefits. These seniors are not on Med- nessing do nothing to modernize Medi- a bipartisan consensus for Medicare re- icaid; they are on Medicare. So they care, do nothing to focus on that indi- form. It is not here. They talk about have nothing. So the money has to vidual patient and the quality of care the Breaux-Thomas commission, the come out of their pocket. That is they receive. Medicare Commission. Everybody talks wrong in America. I close by saying that before 2 o’clock about the bipartisan thing. It was not So the question is the priority. Are or in the next 2 to 3 minutes, I will be bipartisan. we for giving those people prescription submitting an amendment which ad- There were two Democrats who voted drugs—a modest amount of money—or dresses the Medicare issue. for it, yes, but it was not bipartisan. are we for simply going ahead with the The PRESIDING OFFICER. The Sen- There is not a bipartisan consensus on $792 billion tax cut and then saying, ator’s time has expired. the floor of the Senate today of what well, we will just wait until Medicare is Who yields time? to do about Medicare, and there will reformed someday, and then perhaps Mr. KENNEDY. I yield 6 minutes to not be one until we have some more we will consider prescription drugs? I the Senator from West Virginia. iterations which I cannot yet explain think the choice is clear. The PRESIDING OFFICER (Mr. because I am unable to. I thank the Presiding Officer. VOINOVICH). The Senator from West Are we going to stand quietly by The PRESIDING OFFICER. Who Virginia is recognized. while the average senior in West Vir- yields time? Mr. ROCKEFELLER. Mr. President, I ginia has a gross income, from all Mr. ROTH. I yield 2 minutes to the have several points to make. The other sources, of $10,600 a year, and from distinguished Senator from Louisiana. S9678 CONGRESSIONAL RECORD — SENATE July 29, 1999 Mr. BREAUX. I thank the chairman both—will reform Medicare and will Mr. BAUCUS. Well, you stayed away. of the Finance Committee. write the tax laws. I give him a great Mr. DOMENICI. Let me finish. I will be very brief and comment on deal of credit because he is a man of his The President asked for $46 billion the amendment of my good friend, the word when it comes to these issues. for the entire reform package on Medi- senior Senator from Massachusetts. Frankly, it is not correct that it is care. What are we talking about? Hold- I do not think there is any disagree- either Medicare, prescription drugs, re- ing up a tax bill that takes care of the ment that we ought to have prescrip- form, or tax cuts. The truth of the married sons and daughters of our sen- tion drugs in the Medicare program. matter is, Senator BILL FRIST has just ior citizens across America. They have But it is interesting that the recom- showed you. children and need all these things that mittal motion tells the Finance Com- I hear Senator after Senator get up the Tax Code provides? They say, we mittee to report it back in 3 days. I on that side and say there is no money just want to do anything but give them guess we could go over the weekend for Medicare in this budget, there is no help, so we will even hold up their bill, and, on Friday, Saturday, and Sunday room after the tax cut. claiming we are really holding it up for write a prescription drug program and Let me repeat, I went back and asked you seniors because we want to take modernize Medicare and reform Medi- the Congressional Budget Office to do care of Medicare. care, but I doubt whether that is hu- an analysis and assume that we froze Frankly, I have nothing but com- manly possible, unless the senior Sen- discretionary spending. We put in the pliments for the distinguished Senator ator from New York wants to spend the tax cut, we put in the $1.9 trillion for from Massachusetts, Mr. KENNEDY, be- weekend doing all of this and finishing Social Security, and we asked them: cause he is one who is concerned about it up by Monday morning. How much money can be added to dis- this. But I am equally comfortable in There is no question that there is a cretionary spending and Medicare re- saying I am. I think Senator BILL ROTH need for prescription drugs in the Medi- form and still live within the estimated of Delaware is concerned about it. I care program. But I say to my col- surplus? And they told us—$505 billion. think Senator BREAUX is concerned leagues, that is not the way to fix I say to the seniors in this country, I about it. Frankly, I believe we are Medicare. We have a program that is believe you have witnessed here on the going to have plenty of money left over becoming insolvent. It is going broke floor, through the good work of Chair- to fix that Medicare problem from that in the year 2015. Just adding more ben- man BILL ROTH and the Finance Com- $505 billion. efits to the program, without reform- mittee—I say to the seniors across Now, if the Senator wants me to ex- ing the structure of the program, is America, I have seen them produce a plain this budget, I will explain it right like having dessert before you eat your tax bill that I believe you will love be- now. spinach. It is easy to add more benefits cause you care about your sons and Mr. BAUCUS. I have a question. to a program. But bear in mind, we daughters; you care about the married Mr. DOMENICI. That is a CBO num- have a program that is structurally members of your family. This bill be- ber. going insolvent. We spend more money fore us stops penalizing marriage for 22 Mr. BAUCUS. The number on your today than we take in. Just adding million American families. I ask the chart that says CBO/Senate Budget more benefits, without taking the time seniors, isn’t that a good piece of Committee, that is really a Senate to fundamentally reform the program, work? It makes child care more avail- Budget Committee number. That is not is not the answer. able for your grandchildren. Isn’t that a CBO number. The distinguished chairman of the a good piece of work? It makes child Mr. DOMENICI. Mr. President, the Finance Committee said he planned to care more accessible. And guess what. truth of the matter is, we can ask the actually begin a markup in September The President plans to veto these—all Congressional Budget Office any ques- on a comprehensive Medicare reform in the name of ‘‘we can’t afford tax tions we would like. We asked them bill which will include prescription cuts.’’ how much is the surplus, if you freeze drugs, doing it in a timely fashion. I To be honest with you, the truth of discretionary programs at this year’s suggest that after that is reported out, the matter is, when you finish with level for 10 years. They said these are that is the time to look at how much that Congressional Budget Office anal- the numbers. money we need, and then pare down ysis, you are spending 23.4 percent of Mr. BAUCUS. That is correct. That is the tax cut, combine the two, and have the surplus for tax cuts, you are put- CBO. Mr. DOMENICI. That is CBO num- something that can be signed into law. ting the entire Social Security surplus I think, obviously, we cannot do it in bers. aside, and you still have $505 billion to Mr. BAUCUS. If I might ask another the next 3 days. I think the chairman be used over the next decade for high- has outlined a program that makes question. Basically, the CBO baseline priority items. So for those who have we are all working under, House and more sense and that I think is really come to the floor and said there is no doable. Senate, is the baseline which assumes money, there is $505 billion over the that after the caps expire by 2002, I yield the floor. next decade. Do you want to use $100 The PRESIDING OFFICER. Who spending under the discretionary caps billion of it for Medicare? Some say will proceed at inflation. yields time? that is too much. The President Mr. ROTH. I yield 8 minutes to Sen- Mr. DOMENICI. That is not true. thought $46 billion was enough. That is ator DOMENICI. Mr. BAUCUS. It is true. That is the The PRESIDING OFFICER. The Sen- very interesting. We still have people assumption. ator from New Mexico. talking about how much money we are Mr. DOMENICI. That is not true, Mr. DOMENICI. Mr. Chairman, fellow going to need to reform Medicare. I Senator. I did the budget resolution. Senators, I did not know that Senator don’t know how much. I trust the Fi- Mr. BAUCUS. What you have done is, BREAUX was going to come to the floor. nance Committee, under the leadership you have gone back to CBO and said, I am delighted that he has. I want to of BILL ROTH, to produce a bipartisan OK, let’s assume that there is no infla- state how consistent he has been over bill. The President had proposed $46 tionary increase. the months by just putting a quote billion as the entire amount necessary. Mr. DOMENICI. That is right. from the distinguished Senator from Remember, the chart my friend BILL Mr. BAUCUS. Which is not CBO’s as- Louisiana, a Democrat, here for every- FRIST put up said there is $505 billion sumption. But what you have done is, body to see: over the next decade. in order to show there may be, under Medicare must not be used as a wedge issue Mr. BAUCUS. Will the Senator yield? your figures, there may be a $500-, $400 any longer. The question before this Con- Mr. DOMENICI. I will yield in a little billion in spending, the yellow mark, gress is not whether to cut taxes or whether bit. You want to ask about the authen- you went back to CBO and said, I need to save Medicare. That’s not the choice we’re ticity of my charts. I already explained to show a number, that yellow bunch facing. I support a tax cut, targeted, and I’m it and you weren’t here. there. What you did was, you said, dedicated to saving Medicare. It’s not an ei- Mr. BAUCUS. I want to hear it. CBO—— ther/or position. Mr. DOMENICI. I heard your attack Mr. DOMENICI. Is this off my time? That is from a distinguished Senator on it last night, but I was home so I Mr. BAUCUS. Just a second. You who is on the committee that will do couldn’t come down here. said, OK, CBO, give me a baseline that July 29, 1999 CONGRESSIONAL RECORD — SENATE S9679 I want you to produce. What I want The PRESIDING OFFICER. Five mittee, we know they can do that with- you to produce is a baseline that shows minutes 51 seconds. in an hour. They can do it forthwith— no inflation after the year 2000 on Mr. KENNEDY. I yield a minute to introduce and report back with funds spending caps up to the rest of the 10- the Senator from Montana. reserved for a benefit program. But we year period. Mr. BAUCUS. Mr. President, the wanted to leave this up to the Finance If you do that, of course, you get that point I am making is, those numbers Committee. This should not be a proce- chart. But that is not the CBO numbers are accurate, if you believe the as- dural issue, and it is not. Those of us under which the Senate Finance Com- sumptions behind the chart. The as- who are supporting it are telling every mittee operated. That is not the num- sumptions behind the chart are no in- senior citizen that we believe they are bers under which the House operated. creases, not even inflationary adjust- a priority, that their interests are im- That is not the numbers under which ment, for discretionary spending over portant, and that their health care the rest of us operated. So that is why the next 10 years. I think that is an un- needs will be met. This isn’t only an I am saying we are not operating off realistic assumption. And it is, in ef- issue for the health care of the senior the same numbers. You produced your fect, a reduction of some $500 billion citizens; this matters to their children own numbers by telling CBO to produce over 10 years. If you add in the $127 bil- and grandchildren. They have an inter- them the way you wanted them pro- lion for defense, that means, in effect, est in the health care of their parents duced. about a $775 billion reduction in domes- and grandparents. Mr. DOMENICI. Mr. President, how tic spending. So again, he is right, if We ought to be able to have a Fi- much time do I have remaining? you make those assumptions. I say nance Committee that can report back The PRESIDING OFFICER. A minute those assumptions are unrealistic. allocations of resources and say a suffi- of the time yielded. Mr. KENNEDY addressed the Chair. cient amount will be reserved for pre- Mr. DOMENICI. I ask Senator ROTH, The PRESIDING OFFICER. The Sen- scription drugs. We will go ahead with may I have 1 additional minute? ator from Massachusetts. the rest, but this is reserved for pre- Mr. ROTH. One minute. Mr. KENNEDY. Mr. President, to scription drugs for all of those in Medi- Mr. DOMENICI. Let me assure fellow come back to a very basic and funda- care. Let the Finance Committee work Senators and explain what this is. This mental concept, we believe it is as im- that process out, either as part of the is a true assessment of the surplus in portant to give assurances to our sen- Medicare proposal or as a separate pro- total dollars, if you assume that for ior citizens that there will be a pre- posal. the next 10 years discretionary spend- scription drug benefit for them as it is This is what this is about—priorities. ing is frozen. I did that so we could find to have significant tax breaks. That is It is about priorities. Those of us who out how much new money is there, what this is about. are supporting it are giving the prior- available to spend, because the discre- Those that oppose us say they have a ities to our senior citizens. tionary programs are not entitled to an different conclusion, a different pri- Finally, how much time do I have re- inflationary add-on. They are entitled ority. They think tax breaks are pref- maining? to what we add on. If you want to know erable. Then they make other assump- The PRESIDING OFFICER. One where their numbers came from, they tions in terms of what is going to be minute 50 seconds. came from the budget resolution we available at some future time. Mr. KENNEDY. Mr. President, I ask produced, which had $181 billion in dis- I am not going to spend the last few unanimous consent a group of letters cretionary spending. That was some- minutes on this dispute, because this from various groups that support this thing we came up with. I asked them to has been debated over the past few motion be printed in the RECORD. take that out. And when they took it days, but the Wall Street Journal, the There being no objection, the letters out, they said: Now you have this much CBO, and OMB have basically indicated were ordered to be printed in the to spend. You have $505 billion. that if we go through with the kind of RECORD, as follows: If you would like to certify that and tax cut that is being proposed and ad- ask the Congressional Budget Office, is THE NATIONAL COUNCIL vanced by our Republican friends, ON THE AGING, this correct, they will tell you abso- there just won’t be resources left to Washington, DC, July 28, 1999. lutely, because we got it from them. deal with the elderly, the children and Senator EDWARD KENNEDY, Mr. President, I am not going to an- other priorities. Russell Senate Office Building, swer questions now because I want to I say, why ask the senior citizens to Washington, DC. finish my argument. wait? Why should they always be the DEAR SENATOR KENNEDY: On behalf of the The PRESIDING OFFICER. There is National Council on the Aging—the nation’s ones who have to wait? Why shouldn’t a half minute left under the control of first organization formed to represent older we say that the Senate will put aside the Senator from Delaware. The Sen- Americans and those who serve them—we the amount necessary to afford a good ator from New York has 5 minutes 51 write to oppose the irresponsible tax cut pro- benefit program on prescription drugs posal reported out of the Senate Finance seconds. Committee and to support your amendment Who yields time? as part of this legislation? We want to give them the assurance to dedicate a portion of the tax cuts to a new Mr. DOMENICI. He just yielded me a prescription drug benefit available to all half minute. that they are going to be protected. Why leave it iffy to the seniors? Why Medicare beneficiaries. The PRESIDING OFFICER. A half We are deeply disappointed in the Finance minute has been yielded by the Senator are they always the ones left behind? Committee’s irresponsible decision to squan- from Delaware. That is the question. This is an issue of der virtually the entire non-Social Security Mr. DOMENICI. Whatever baseline priority. surplus on a massive tax cut. If this proposal anybody wants to use, there is roughly We say, if you are going to go down were to become law, it would be impossible $405 billion above a freeze available to this road with regard to tax breaks to protect and strengthen Medicare for the be spent on discretionary spending and that benefit the wealthy, let’s make future. Without surplus or other new reve- nues, the Medicare program cannot remain on Medicare reform. That is all we try sure we are going to allocate some funds for a prescription drug benefit for strong while adding a meaningful new pre- to show in this chart. Before you start scription drug benefit. the chart, you can spend however much the senior citizens and disabled persons The Finance Committee tax cut proposal you want, but I decided to spend none who are on Medicare. ignores the impending retirement of a vast so we could put in perspective how My friend and colleague from Lou- number of baby boomers. With the Medicare much there is that we can spend out of isiana said we can’t do that over this population doubling by 2035 and a tax cut this surplus, and these are authentic period of time. Well, they are going to that would balloon to almost $3 trillion in numbers. They are correct, if you start have a conference on the two tax bills the second 10 years, there would be no way to protect America’s seniors, ensure future sol- with that assumption. over the weekend. If they can have a conference on these two bills over the vency and provide adequate drug coverage. I yield the floor. The numbers simply do not add up. The PRESIDING OFFICER. Who weekend, they ought to be able to get We are also extremely concerned that such yields time? together and allocate sufficient funds a tax cut would lead to drastic cuts in do- Mr. KENNEDY. How much time do I for a prescription drug benefit in about mestic programs that vulnerable seniors de- have? half an hour. In the Finance Com- pend on. The cuts would undermine such S9680 CONGRESSIONAL RECORD — SENATE July 29, 1999 Older Americans Act programs as meals on NCSC, therefore, strongly supports your beneficiaries. For these individuals, access wheels, protections against abuse and ne- motion to recommit S. 1429 back to the Fi- to prescription drug coverage at an afford- glect, and home care services. The proposal nance Committee and to enact a pharma- able price is difficult. clearly assumes that programs like these ceutical benefit for all Medicare bene- I look forward to working with you to en- would be cut significantly. ficiaries. NCSC believes that the Congress sure that Medicare beneficiaries with epi- The Senate Finance Committee tax cut must use this historic fiscal opportunity as- lepsy can continue to afford to follow their proposals would rob Medicare of the funds sure Medicare’s solvency and to meet the prescribed drug therapy. needed for modernization and future sol- pharmaceutical needs of forty million Medi- Sincerely, vency and drastically cut programs frail sen- care beneficiaries. ERIC R. HARGIS, iors need to remain independent. This mas- We urge all members of the Senate to sup- President and Chief Executive Officer. sive tax cut is bad medicine for older Ameri- port your motion to recommit. cans. Sincerely, CONSUMERS UNION, We deeply appreciate your efforts to at- STEVE PROTULIS, Washington, DC, July 28, 1999. tempt to protect and strengthen the Medi- Executive Director. Hon. EDWARD M. KENNEDY, care program and its beneficiaries and to add U.S. Senate, a meaningful new prescription drug benefit. NATIONAL COMMITTEE TO PRESERVE Washington, DC. Sincerely, SOCIAL SECURITY AND MEDICARE, DEAR SENATOR KENNEDY: Consumers Union JAMES FIRMAN, Washington, DC, July 28, 1999. supports your prescription drug amendment President and CEO. Hon. EDWARD M. KENNEDY, which is consistent with our goal of extend- U.S. Senate, ing affordable prescription drug coverage to NATIONAL HISPANIC COUNCIL ON AGING, Washington, DC. all Medicare beneficiaries. Washington, DC., July 28, 1999. DEAR SENATOR KENNEDY: On behalf of The need is great. The average Medicare Hon. EDWARD M. KENNEDY, about five million members and supporters beneficiary uses 18 prescriptions each year, Russell Office Building, of the National Committee to Preserve So- and average prescription drug spending is Washington, DC. cial Security and Medicare, I am pleased to projected to be $1,100 in the year 2000. More DEAR SENATOR KENNEDY: The National His- endorse your amendment to the Taxpayer than half will spend over $500. Seniors and panic Council on Aging (NHCoA), its chap- Refund Act of 1999, S. 1429. I understand that other Medicare beneficiaries suffer financial ters and affiliates, enthusiastically support your amendment would earmark a portion of hardship because of their out-of-pocket pre- your amendment to the Budget Reconcili- projected budget surpluses to establish a uni- scription drug costs. ation Bill S1429 that allows for medical pre- versal prescription drug benefit under Medi- Private prescription drug coverage is inad- scription drugs for those in need. Elderly, of care. equate, over-priced, and not even available every economic means, will greatly benefit Medicare beneficiaries spend nearly three to many beneficiaries who can be denied cov- from this amendment. times as much on out of pocket costs as the erage. Only 24 percent of Medicare bene- It is our hope that the proposed cuts in under 65 population, significantly because of ficiaries have retiree drug coverage, and this taxes bill is not approved. Rather, that these the absence of prescription drugs in the basic number is expected to decrease. Medicare monies are used in a more productive way benefits package. Three-fourths of Medicare HMO coverage for prescriptions is not avail- benefiting those in need in general and elder- beneficiaries have some chronic health prob- able in all geographic areas, and has proven ly in particular. lems, which require ongoing treatment with unreliable with many HMO’s pulling out of Sincerely, prescription drugs. Many seniors do not fill the market. Some medigap policies offer pre- MARTA SOTOMAYOR, Ph.D., prescriptions or skip required doses because scription drug coverage, but coverage is very President. of cost considerations. limited and the extra premium charged for a It is imperative that we do not squander policy with prescription drug coverage is AMERICAN NURSES ASSOCIATION, the opportunity presented by projected sur- likely to actually exceed the maximum ben- Washington, DC, July 28, 1999. pluses. Our first priority must be to extend efit. Our analysis of medigap policies on the Hon. EDWARD M. KENNEDY, Social Security solvency, improve and market during 1998 (for 75-year-olds) found U.S. Senate, strengthen Medicare, and pay down the fed- that the average premium for medigap plan Washington, DC. eral debt. Your amendment would modernize I, which provides at most a $1,250 prescrip- DEAR SENATOR KENNEDY: The American Medicare benefits in a way that meets one of tion drug benefit, was about $1,850 higher Nurses Association, the only full-service pro- the most pressing needs for current and fu- than the average premium for medigap Plan fessional organization representing the na- ture seniors. We support your amendment C (which has nearly identical benefits other tion’s registered nurses through its 53 con- and applaud your consistent leadership on than the prescription drug benefit). This cov- stituent associations, strongly supports your this issue. erage represents extremely poor value for amendment to S. 1429, the Budget Reconcili- Sincerely, consumers. ation bill now being considered by the Sen- MARTHA A. MCSTEEN, The potential for prescription drugs to ate, that would direct the development and President. benefit those covered by Medicare has in- implementation of a prescription drug ben- creased substantially since Medicare was en- efit for Medicare. EPILEPSY FOUNDATION, acted. Our nation’s thriving economy and ANA believes that enhancing the benefits Landover, MD, July 28, 1999. our government’s dramatically improved package available under Medicare, including Hon. EDWARD M. KENNEDY, budget status make this the right time to a prescription drug benefit, would enable Russell Senate Office Building, take this urgently needed step. beneficiaries to receive earlier, better, and Washington, DC. Sincerely, more comprehensive care. The use of part of DEAR SENATOR KENNEDY: On behalf of the GAIL SHEARER, the projected budget surplus to pay for this Epilepsy Foundation, the national voluntary Director, Health Policy Analysis, benefit is an appropriate use of those funds organization that works for people affected Washington Office. and is crucial to improving health and out- by seizures through research, education, ad- comes for Medicare beneficiaries. vocacy and service, this is to support your THE GERONTOLOGICAL We appreciate your leadership on this issue efforts to provide funding for a Medicare SOCIETY OF AMERICA, and look forward to continuing our work to- drug benefit program. As the Senate con- Washington, DC, July 28, 1999. gether to include this amendment in the siders S. 1429, The Budget Reconciliation Hon. EDWARD M. KENNEDY, Budget Reconciliation bill. Bill, it is particularly important to assure U.S. Senate, Sincerely, that Medicare beneficiaries with epilepsy, Washington, DC. MARJORIE VANDERBILT, for whom out-of-pocket expenses for seizure DEAR SENATOR KENNEDY: This letter is Director of Government Affairs. medications can be significant, have access written in support of your amendment S. to prescription medications at an affordable 1429 to the Budget Reconciliation Bill. The NATIONAL COUNCIL OF SENIOR CITIZENS, price. We also commend your support for Gerontological Society of America, an orga- Silver Spring, MD, July 28, 1999. other programs important to individuals nization of 6,000 professionals in the field of Senator EDWARD M. KENNEDY, with epilepsy who may face limited financial aging, is vitally concerned that the tax cuts U.S. Senate, resources, such as Medicaid and Social Secu- as proposed in the current Budget Reconcili- Washington, DC. rity. ation Bill will seriously jeopardize support DEAR SENATOR KENNEDY: The National As baby boomers age, there will be increas- for prescription drug coverage under Medi- Council of Senior Citizens (NCSC) is fol- ing numbers of age-related seizure disorders. care. lowing closely the debate on S. 1429, the Fi- It is estimated that 61,000 new cases of epi- The cost of prescription drugs has in- nance Committee tax bill. It is important lepsy occur each year among elderly Ameri- creased at an average of 6 percent annually that any tax bill this session allows for the cans. By the year 2020, it is projected that and is the leading factor in today’s rising use of some of the expected on-budget sur- one out of every two people developing epi- health care costs. This has particular impact plus to bolster the Medicare program and lepsy will be over the age of 65. on elderly as they are more likely to be create a universal Medicare pharmaceutical In addition, many low-income, young, dis- using, and even dependent on, multiple pre- benefit. abled individuals with epilepsy are Medicare scription drugs. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9681 I hope you are successful in convincing AMERICAN THORACIC SOCIETY, OK, we will work the details out now, your colleagues to support this important AMERICAN LUNG ASSOCIATION, but we are going to allocate the re- amendment. Washington, DC, July 28, 1999. sources for it. We don’t have to do as Sincerely, Hon. EDWARD M. KENNEDY, my friend and colleague from Ten- CAROL A. SCHUTZ, U.S. Senate, Washington, DC. Executive Director. DEAR SENATOR KENNEDY; We have learned nessee says—that we can wait until that during consideration of the Senate tax after 10 years and see where we are; or CONSORTIUM FOR CITIZENS bill, you intend to offer a motion to recom- as our friend from Louisiana said, we WITH DISABILITIES, mit the bill to the Senate Finance Com- can deal with this some time in the fu- Washington, DC, July 28, 1999. mittee with instructions for the committee ture. Re Kennedy amendment on prescription drugs. to develop financing for the establishment of The seniors deserve better. They need a Medicare pharmaceutical benefit. The Hon. EDWARD M. KENNEDY, American Lung Association and its medical an answer and they need it now. They U.S. Senate, section, the American Thoracic Society, need a message from the Senate that Washington, DC. strongly support your efforts to move the says we hear you, we know what is of DEAR SENATOR KENNEDY: We are writing as issue of a Medicare pharmaceutical benefit concern to those who have made this Co-Chairs of the Health Task Force of the to forefront of Congressional activity. Consortium for Citizens with Disabilities to the great country that it is. They de- America’s seniors need prescription drug serve this kind of a protection. support your amendment to include and pro- coverage under the medicare program. Far tect sufficient funds within the pending too often, Medicare beneficiaries are forced There is an enormous need and in- Budger Reconciliation Bill (and within the to choose between purchasing the drugs they credible consequences. It is a matter of budget surplus) to allow for the design of a need or paying for food and housing. This in- life and death for many senior citizens. new prescription drug benefit for Medicare tolerable dilemma is not just a problem for a Let us say that it is at least—at least— beneficiaries. few low-income seniors. It is a chronic prob- as important to guarantee that there CCD is a Washington-based coalition of lem being faced by middle class senior citi- nearly 100 national organizations rep- will be funding for prescription drugs zens. as it is for a tax benefit. Many of us be- resenting the more than 54 million people While there are a number of difficult issues living with disabilities in the United States. that must be resolved before Congress can lieve it is more important, but with The five million Medicare beneficiaries move forward with the creation of a much this motion to recommit the bill we with disabilities are dependent on prescrip- needed Medicare pharmaceutical benefit, no are saying it is at least as important as tion drugs to maintain sufficient function, issue is more difficult than determining how the tax cut bill itself. I hope this mo- control disease progression, and prevent sec- to pay for the new benefit. tion will be accepted. ondary medical conditions. It is imperative Congress now faces a wonderful oppor- Mr. ROTH. Mr. President, has all that Congress both acknowledge the benefit tunity. The expected budget surpluses has need and implement appropriate budgetary created a rare opportunity for Congress to time on both sides expired? policies to begin to lessen the cost burden on address one of the most glaring inadequacies The PRESIDING OFFICER. Yes. the nation’s most vulnerable populations. in the Medicare program, the lack of a drug Mr. ROTH. Mr. President, I make a Sincerely, benefit. Before Congress can responsibly con- point of order against the amendment SHELLEY MCLANE, sider any tax cut, Congress must first ensure under section 305 of the Budget Act on National Association that federal resources exist to provide pre- the grounds that it is not germane. of Protection and scription drugs to our nation’s senior citi- Advocacy Systems. zens. Recommitting the Senate tax bill to Mr. KENNEDY. Mr. President, pursu- JEFF CROWLEY, the Senate Finance Committee is an appro- ant to section 904 of the Congressional National Association priate first step in this process. Budget Act of 1974, I move to waive the of People with AIDS. Again, thank you for your leadership on applicable section of that act for con- BOB GRISS, this process. sideration of the pending motion. Center on Disability Again, thank you for your leadership on this issue. I ask for the yeas and nays. and Health. The PRESIDING OFFICER. Is there a KATHY MCGINLEY, Sincerely, The Arc of the United FRAN DUMELLE, sufficient second? States. Deputy Managing Director. There is a sufficient second. The yeas and nays were ordered. NATIONAL OSTEOPOROSIS FOUNDATION, NATIONAL ASSOCIATION OF Washington, DC, July 28, 1999. AMENDMENT NO. 1405 AREA AGENCIES ON AGING, Washington, DC, July 28, 1999. Hon. EDWARD KENNEDY, The PRESIDING OFFICER. Under U.S. Senate, Washington, DC. Hon. TED KENNEDY, the previous order, the Senate will re- DEAR SENATOR KENNEDY: This is in support U.S. Senate, turn to the consideration of the amend- of your prescription drug amendment to the Washington, DC. ment of Senator GRAMM of Texas. tax bill. DEAR SENATOR KENNEDY, The National As- The National Osteoporosis Foundation There will be 2 minutes of debate, to be sociation of Area Agencies on Aging (N4A) (NOF), the only non-profit, voluntary health equally divided. supports your amendment to the tax legisla- organization solely dedicated to eradicating Mr. ROTH. Mr. President, I suggest tion currently on the Senate floor which rec- osteoporosis, represents 250,000 members. To the absence of a quorum. ognizes the need for a universal prescription NOF it is far more important that seniors re- drug benefit for Medicare recipients. The PRESIDING OFFICER. The ceive the protection they need under Medi- clerk will call the roll. The largest out-of-pocket expenditure for care than it is for Americans to receive a tax Medicare beneficiaries is for drug coverage. cut. First we need to protect our senior citi- The legislative clerk proceeded to Many beneficiaries are required to pay for zens and people with low incomes before we call the roll. their own prescriptions at a time when the provide tax breaks for people of means. Mr. ROTH. Mr. President, I ask unan- cost of medication is rising sharply. Medi- Sincerely, imous consent that the order for the care needs to be modernized to recognize the BENTE E. COONEY, MSW quorum call be rescinded. remarkable advances in preventing and Director of Public Policy. treating illnesses through drugs since the The PRESIDING OFFICER. Without program’s inception in 1965 and N4A ap- Mr. KENNEDY. Mr. President, vir- objection, it is so ordered. plauds your efforts in this direction. tually every major organization that represents senior citizens or persons UNANIMOUS CONSENT AGREEMENT N4A is the umbrella organization for the Mr. ROTH. Mr. President, I ask unan- 655 area agencies on aging (AAAs) and 230 with disabilities is in urgent support of Title VI Native American aging programs in this particular motion. imous consent that, notwithstanding the U.S. Through its presence in Wash- They know what is happening. There the filing requirement, it be in order ington, D.C., N4A advocates on behalf of the isn’t a Member who hasn’t gone home for the manager to offer an amendment local aging agencies to ensure that needed and met with seniors in the state that that has been cleared by both man- resources and support services are available doesn’t know what is happening. It is agers. to older Americans. We look forward to con- not good enough to say we care about The PRESIDING OFFICER. Without tinuing to work with you on all endeavors objection, it is so ordered. that promote the dignity and independence it and we will handle it some time in of older Americans. the future. You have a chance to han- Mr. MOYNIHAN. Mr. President, it is Sincerely, dle it now, in the next 15 minutes. not a matter of one side of the aisle or JANICE JACKSON, We have a chance to put the Senate the other on Senator GRAMM’s amend- Executive Director. of the United States on record and say: ment. Now for the first time, we find S9682 CONGRESSIONAL RECORD — SENATE July 29, 1999 ourselves in complete agreement with Mr. MOYNIHAN. Start with the $3 Smith (OR) Thomas Thurmond the chairman of the Finance Com- trillion and think what that would add. Stevens Thompson Warner mittee, that the amendment is a dis- Mr. SARBANES. That is right; ex- NAYS—54 aster. We don’t have to characterize actly. It would literally explode out of Akaka Durbin Lieberman the existing proposal, but it is not ev- sight. Baucus Edwards Lincoln Bayh Feingold Mikulski erything we would hope for. That is Mr. MOYNIHAN. Three trillion dol- Biden Feinstein Moynihan something even the chairman would lars is the Department of Treasury fig- Bingaman Graham Murray dread, and he is right to do so. I think ure. Bond Harkin Reed we are right in a situation such as this Mr. SARBANES. I thank the Sen- Boxer Hollings Reid Breaux Inouye Robb to overcome partisanship. It would be ator. Bryan Jeffords Rockefeller wicked, indeed, to join the Senator Mrs. BOXER. Mr. President, will my Byrd Johnson Roth from Texas, and then where would we colleague yield for a question? Will the Chafee Kennedy Sarbanes Cleland Kerrey Schumer be? But we won’t. I hope on our side we Senator from New York yield for a Collins Kerry Snowe will support the chairman of the Fi- question that has to do with a par- Conrad Kohl Specter nance Committee and show him that liamentary procedure? Daschle Landrieu Torricelli we share his view of the unacceptable I wonder if he could enlighten the Dodd Lautenberg Voinovich Domenici Leahy Wellstone extravagance of the proposal, the Senator. Perhaps Senator ROTH could. I Dorgan Levin Wyden amendment of the Senator from Texas, thought we were under a unanimous The PRESIDING OFFICER. On this which will soon be voted on. consent to go to a vote. Has that been vote the yeas are 46, the nays are 54. Mr. ROTH. Mr. President, I suggest laid aside? Three-fifths of the Senators duly cho- the absence of a quorum. Mr. MOYNIHAN. We are delinquent sen and sworn not having voted in the The PRESIDING OFFICER. The and derelict and behind the times. clerk will call the roll. affirmative, the motion is rejected. Mrs. BOXER. Is there any way to get The point of order is sustained and The legislative clerk proceeded to us back on schedule and no longer de- call the roll. the amendment falls. linquent and behind the times? Mr. MOYNIHAN. Mr. President, I Mr. MOYNIHAN. Mr. President, I ask Mr. MOYNIHAN. The Senator from unanimous consent that the order for move to reconsider the vote. California has made her point. Mr. NICKLES. I move to lay that mo- the quorum call be rescinded. Mr. ROTH. Mr. President, I make a The PRESIDING OFFICER. Without tion on the table. point of order that a quorum is not The motion to lay on the table was objection, it is so ordered. present. Mr. SARBANES. Mr. President, will agreed to. The PRESIDING OFFICER. The Mr. MOYNIHAN. Mr. President, I do the Senator yield for a question? clerk will call the roll. Mr. MOYNIHAN. Yes. ask we might have order. The legislative clerk proceeded to The PRESIDING OFFICER. The Sen- Mr. SARBANES. I ask the ranking call the roll. member on the Finance Committee ate will please be in order. The Senator Mr. ROTH. Mr. President, I ask unan- from New York. this question with respect to the imous consent that the order for the GRAMM amendment. In the course of Mr. MOYNIHAN. Mr. President, I be- quorum call be rescinded. lieve another vote is scheduled. the debate, was there any discussion on The PRESIDING OFFICER. Without MOTION TO RECOMMIT what this amendment would cost—not objection, it is so ordered. The PRESIDING OFFICER. The Sen- in the first 10 years but in the next 10 Mr. ROTH. Mr. President, I yield the ate will be in order. There are 2 min- years? remainder of time on behalf of Senator Mr. MOYNIHAN. I think there was utes evenly divided for the motion sub- GRAMM. mitted by the Senator from Massachu- not. Were there such a debate and dis- Mr. MOYNIHAN. Mr. President, I setts. Who yields time? cussion, it would have been chilling. make a point of order against the Mr. SARBANES. This is the great ex- The Senator from Massachusetts. amendment that we are about to vote ploding tax cut. I was looking at the Mr. KENNEDY. Mr. President, can on under section 305 of the Budget Act very document the Senator from Texas we have order? I will just take one mo- on the grounds that it is not germane. himself distributed. It is clear that the ment. Mrs. HUTCHISON. Mr. President, I marginal income tax rate cuts don’t go Mr. President, when the Medicare move to waive the Budget Act for con- fully into effect until the year 2008. By program was agreed to in 1965, it was sideration of the Gramm amendment his own figures, it would cost $73 bil- intended to provide health security for and ask for the yeas and nays. lion in the first 5 years, and $451 billion the seniors in this country. Now it still The PRESIDING OFFICER. Is there a over 10 years; and it is not getting into is a vital force, but there is a major sufficient second? full effect until right near the end of element that is missing, and that is the There is a sufficient second. the 10-year period. So if you extrapo- prescription drug coverage. The yeas and nays were ordered. late out, you are going to have an in- There are no senior citizens, unless The PRESIDING OFFICER. The credible increase in its cost. they are on Medicaid, who have a pre- question is on agreeing to the motion The same thing is true with virtually scription drug benefit that is reliable, to waive the Congressional Budget Act every provision that is in this amend- dependable, and affordable. This par- in relation to the Gramm amendment ment, with one exception. All of the ticular motion says we believe, those No. 1405. The yeas and nays have been others get phased in. They don’t take who support it, that as a part of this ordered, and the clerk will call the roll. full effect until close to the end of the tax cut there ought to be set aside The legislative clerk called the roll. 10-year period. Then you are given funding for a prescription drug benefit. The yeas and nays resulted—yeas 46, these cost figures which, of course, are We do not believe a tax cut has a high- nays 54, as follows: over the range of the period. So, obvi- er priority than providing a prescrip- ously, in the next 10-year period, these [Rollcall Vote No. 230 Leg.] tion drug benefit for our seniors. But tax cuts are going to explode out of YEAS—46 what we do say is the Finance Com- sight and put the Nation right back Abraham Fitzgerald Lott mittee should set aside sufficient into the deficit box. Is that not a rea- Allard Frist Lugar funds, and that the program can be de- Ashcroft Gorton Mack sonable analysis, I ask the ranking Bennett Gramm McCain veloped later in this term. The motion member? Brownback Grams McConnell ensures that funds will be earmarked Mr. MOYNIHAN. The measure before Bunning Grassley Murkowski to provide our senior citizens with a re- us, which is moderate by the standards Burns Gregg Nickles liable, dependable, affordable prescrip- Campbell Hagel Roberts of the proposal of the Senator from Cochran Hatch tion drug benefit. Santorum Coverdell Helms Texas, would cost in the outyears, in Sessions Make such a fund part of this whole Craig Hutchinson the second decade, $3 trillion. Shelby program. Do not take a chance there Crapo Hutchison Mr. SARBANES. Not that of the Sen- DeWine Inhofe Smith (NH) will be some funds down the line. Do ator from Texas, but the other one. Enzi Kyl not ask our seniors to wait any further. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9683 They have waited long enough. They Kyl Roberts Stevens jected non-Social Security surplus in Lott Roth Thomas need this; they depend on it. Prescrip- Lugar Santorum Thompson tax cuts. That is why, along with fel- tion drugs are a lifeline for our senior Mack Sessions Thurmond low members of the Finance Com- citizens. McCain Shelby Voinovich mittee, Senators BREAUX, JEFFORDS I hope this motion will be passed as McConnell Smith (NH) Warner and KERREY, as well as a number of Murkowski Smith (OR) part of a tax program, and that there Nickles Snowe other moderate Senators from both will be a designated fund available for sides of the aisle, I have joined in spon- The PRESIDING OFFICER. On this a prescription drug program for all soring a $500 billion bipartisan alter- vote the yeas are 45, the nays are 55. Medicare beneficiaries. native tax cut amendment. Three-fifths of the Senators duly cho- The PRESIDING OFFICER. The Sen- This bipartisan alternative is a good, sen and sworn not having voted in the ator from Delaware. solid package. It would provide broad- affirmative, the motion is rejected. based tax relief for middle income tax Mr. ROTH. I yield the time to the The point of order is sustained and the distinguished Senator from Tennessee. payers and families. It would increase motion falls. the standard deduction to $4,350 for The PRESIDING OFFICER. The Sen- Several Senators addressed the ator from Tennessee. joint filers, $2,150 for heads of house- Chair. holds, and $1,300 for single filers. Mr. FRIST. Mr. President, I rise in The PRESIDING OFFICER. The Sen- opposition to the motion of the Sen- These increases in the standard de- ator from Delaware. duction would have the effect of sim- ator from Massachusetts for several Mr. ROTH. Mr. President, I yield reasons. First and foremost, this very plifying tax preparation for some 9 mil- time to the distinguished Senator from lion households. Our bipartisan alter- body has already set aside funds spe- Rhode Island. cifically for Medicare modernization native contains the historic home- Mr. STEVENS. Parliamentary in- owner credit that I mentioned earlier. and specifically for inclusion of pre- quiry. That is an outstanding provision and scription drug coverage. The congres- The PRESIDING OFFICER. The Sen- certainly will be of assistance in curb- sional budget plan has given us the fig- ator from Alaska. ing urban sprawl. ure of $505 billion. In our resolution Mr. CHAFEE addressed the Chair. The PRESIDING OFFICER. The Sen- If we are serious about passing a tax passed just 2 months ago, we have $90 cut this year, I believe our bipartisan ator from Rhode Island. billion set aside specifically. The Presi- alternative is the right way to go. It dent’s own proposal, his own proposal AMENDMENT NO. 1442 would provide carefully targeted, well- for Medicare prescription drug cov- (Purpose: To make an amendment in the deserved tax relief to the American nature of a substitute) erage, is $46 billion, much less than the people but for $300 billion less than ei- Mr. CHAFEE. Mr. President, the $90 billion we have already directed to ther the House or Senate bills. There is time in favor of this amendment will this cause. no doubt in my mind that President be controlled by Senator BREAUX for We need to focus on fundamental Clinton will veto an $800 billion tax cut modernization, repair of the Medicare both Democrats and Republicans. package, particularly one that resem- I commend Chairman ROTH for his system to include prescription drug bles the House-passed bill. What is hard work in crafting the Taxpayer Re- coverage. That is something that is be- more, his veto will be sustained. All of fund Act. I was pleased to support that fore us, not this issue of money just for that puts us right back at square one. and defend it in the Finance Com- prescription drug coverage. I urge its All of this maneuvering could be avoid- mittee. It is a carefully balanced, equi- defeat. ed by the acceptance now of this sen- The PRESIDING OFFICER (Mr. FITZ- table bill that will provide targeted tax sible bipartisan alternative that is GERALD). The question is on agreeing to relief to all Americans. It has several being proposed. I hope my colleagues the motion to waive the Budget Act features that I would like to point out. will support that bipartisan alter- First, it gives a generous tax deduc- with respect to the Kennedy motion to native. recommit S. 1429. tion to millions of Americans whose I thank the Chair, and I thank Sen- The yeas and nays have been ordered. employers do not provide health insur- ator BREAUX and yield the remainder of The clerk will call the roll. ance. In other words, those who buy in- my time to Senator BREAUX. The legislative assistant called the surance through a company, but the The PRESIDING OFFICER. The Sen- roll. company itself does not pay for the in- ator from Delaware. The PRESIDING OFFICER. Are there surance, this helps make that deduct- Mr. ROTH. Mr. President, I yield my- any other Senators in the Chamber ible. self 5 minutes. who desire to vote? Second it corrects a flaw in the alter- Senator BREAUX and Senator CHAFEE The yeas and nays resulted—yeas 45, native minimum tax which, if left un- have thoughtfully crafted an amend- nays 55, as follows: corrected, will result in the application ment that offers a $500 billion tax cut. of the to mil- [Rollcall Vote No. 231 Leg.] As with the alternative introduced yes- lions of American families who cur- terday by my friend, the distinguished YEAS—45 rently don’t pay it. ranking member of the Finance Com- Akaka Feingold Lieberman Third, the bill contains some very mittee, Senator MOYNIHAN, Senator Baucus Feinstein Lincoln Bayh Graham Mikulski important environmental and urban re- BREAUX’s amendment demonstrates Biden Harkin Moynihan newal initiatives. Despite all the meri- that there is agreement on both sides Bingaman Hollings Murray torious provisions in the bill of Senator of the aisle concerning the need to give Boxer Inouye Reed ROTH, I believe $800 billion in tax cuts Bryan Johnson Reid individuals and families a well-de- Byrd Kennedy Robb is too big. What if the budget surpluses served tax refund from the $3.3 trillion Cleland Kerrey Rockefeller needed to pay for these reductions surplus. Conrad Kerry Sarbanes don’t materialize? Does any one of us I appreciate the fact that Senator Daschle Kohl Schumer REAUX Dodd Landrieu Specter believe that Congress can or should B , with his amendment, offers a Dorgan Lautenberg Torricelli hold discretionary spending to nearly deeper cut than the alternative intro- Durbin Leahy Wellstone $600 billion below current levels over duced yesterday, but I am concerned Edwards Levin Wyden the next decade? that it still does not go far enough. It NAYS—55 What about the fact that we are now does not go far enough in providing the Abraham Cochran Gramm in the middle of, or perhaps at the end much needed relief Americans require Allard Collins Grams of, who knows, the longest burst of eco- to meet the necessary and important Ashcroft Coverdell Grassley nomic prosperity in our peacetime his- priorities in their lives. It does not go Bennett Craig Gregg Bond Crapo Hagel tory? Is that going to continue far enough to offer broad-based tax re- Breaux DeWine Hatch unabated? Nobody can tell. Nobody has lief that will be necessary to gain the Brownback Domenici Helms a crystal ball that will give an accu- bipartisan support needed to pass this Bunning Enzi Hutchinson rate answer. Burns Fitzgerald Hutchison bill in the Senate. Campbell Frist Inhofe So I am simply not comfortable with For example, Mr. President, the Chafee Gorton Jeffords rebating more than half of the pro- Breaux amendment does not lower the S9684 CONGRESSIONAL RECORD — SENATE July 29, 1999 15-percent tax bracket. Instead, it sim- Taxpayer Refund Act of 1999 is built on Mr. President, I suggest it is time for ply expands it by only $2,500 for indi- the proposition that the income Ameri- a reality check by Members of both viduals and $5,000 for joint returns. And cans earn belongs to them; that when parties as to where we are and what we this benefit is only available for people government sets a budget and receives are attempting to do. who do not itemize. This means that if revenues in taxes to meet the budget We in the United States in this pe- you take a deduction for home mort- obligations, government—by the will of riod of time are in a very unique, and gage interest you will not receive a tax the people—receives what it needs to I would also say very unusual, position rate cut, under this bill. Additionally, pay the bills; and that when the people in the sense that other countries because the 15-percent bracket is not have given government more than around the world would love to have reduced, the tax relief is not felt by what the budget calls for, well, then the problem that is facing all of us in middle-income taxpayers in that that money should be returned to the the Senate this afternoon: We are faced bracket, nor is there a reduction for people. with a country that has a $1 trillion those paying taxes in the higher brack- It’s that simple, Mr. President. And surplus. ets. with that understanding, Congress That is a problem that most coun- The Taxpayer Refund Act of 1999 cuts passed a budget resolution authorizing tries would love to have. It is a prob- the 15 percent rate to 14 percent and the Finance Committee to cut taxes by lem because we are now faced with the broadens the 14-percent bracket by $792 billion over 10 years. The Finance question of what we are going to do twice as much as what the Breaux Committee, with bipartisan support, with a $1 trillion surplus. Some have amendment would do at the higher 15- met that responsibility and, as a re- said all of it should be used in the form percent rate. sult, has offered the Taxpayer Refund of a tax cut and given back to the The Breaux amendment also falls Act of 1999. What we have offered is a American people. We can argue about short when it comes to providing fam- broad-based tax relief plan that will how they do that. But, for the moment, ily tax relief. For example, the Tax- benefit all Americans—one that is fair, let’s just say they have decided all of it payer Refund Act offers $222 billion for constructive, and empowering. should go for a tax cut. Some on my family tax relief. The Breaux bill only Our plan will help restore equity to side of the aisle say, no, we can’t do provides $43 billion. When it comes to the tax code and provide American that. It should be a very small tax cut, providing families with the relief they families with the relief and resources and the rest should be reserved for both need and deserve, the amendment they need to meet pressing concerns. It other functions of Government. I point out to my colleagues what I offered by Senator BREAUX is only 20 will help individuals and families save think the rest of the American people percent of the relief offered in our for self-reliance in retirement. It will already fully realize. They know if the more complete package. help parents prepare for educational proposal on that side of the aisle—an As with relief to families, this costs. It will give the self-employed $800 billion tax cut—should pass and amendment also comes up short in pro- and under-insured the boost they need viding health care relief. Where the get sent to the President, it is clearly to pay for health insurance. It will Taxpayer Refund Act offers $52 billion going to be vetoed, and nothing will re- begin to restore fairness to the tax in health-related cuts, this amendment sult from this other than a debate. We code by eliminating the marriage tax offers only $32 billion, or roughly $20 will end up with nothing more than a penalty. political argument to make against billion less. The Shortfall can be seen These are all important goals. And, each other. If we pass the Republican in specific areas such as long-term as with the Democratic alternative, bill, and it ultimately goes to the care, where this amendment would not this amendment also falls far short of allow an employer to provide such President, there will be a big ceremony accomplishing all that we do with our long-term care coverage as part of its in the White House where he will veto broad-based plan. This amendment will employee benefits package. that piece of legislation. He will then Another important difference be- leave many taxpayers without the re- have a powerful political argument to tween the Taxpayer Refund Act and lief they deserve. For that reason, I en- say the Republican Party has wasted this amendment is the area of estate courage my colleagues to vote against the trillion dollar surplus. There are tax relief. We have heard eloquent and it. some on the Republican side of the Mr. BREAUX addressed the Chair. persuasive arguments these past two aisle who will say that is a great argu- The PRESIDING OFFICER. The Sen- days concerning how important it is ment. The White House and adminis- ator from Louisiana. that Congress provide American fami- Mr. BREAUX. How much time re- tration will blame the Republicans for lies with relief from death taxes. And mains? wasting the trillion dollars and giving our legislation offers almost $63 billion The PRESIDING OFFICER. The time an unnecessary and unrealistic tax cut in relief. This will help countless fami- does not begin to run on the amend- that is targeted to the wealthiest peo- lies save the businesses, farms, and ment until the amendment is actually ple in this country. That is a great ar- ranches that have been built by par- called up. gument for us. ents and grandparents. Mr. BREAUX. Mr. President, I ask While the political parties may have It is good for these families, and for for the reporting of the amendment. a short-term political gain, I suggest America, as it protects their work and The PRESIDING OFFICER. The that the real losers, if this is what is sacrifice. Unfortunately, this amend- clerk will report. going to happen, are the American peo- ment only contains a third of the relief The legislative clerk read as follows: ple because they end up with nothing —no tax cut, no decision on how to that these families would receive from The Senator from Louisiana [Mr. BREAUX], our legislation. for himself, Mr. CHAFEE, Mr. KERREY, Mr. spend the surplus, with no money being Mr. President, I compliment Senator JEFFORDS, Mr. TORRICELLI, Mr. SPECTER, Mr. allocated to real Medicare reform, and BREAUX for the work he has done on BAYH, Ms. SNOWE, Mrs. LINCOLN, and Ms. no pressure to continue to work on a this amendment. It certainly offers COLLINS, proposes an amendment numbered Medicare reform program. more than the alternative that the 1442. I suggest there is a different way we Senate voted against yesterday. Like Mr. BREAUX. Mr. President, I ask can look at this problem instead of a yesterday’s alternative, it shows that unanimous consent that reading of the political opportunity. We can look at it there is bipartisan support for relief, amendment be dispensed with. as a policy opportunity to do some- but it does not go far enough. It does The PRESIDING OFFICER. Without thing realistic, and that is what the not go far enough in the area of family objection, it is so ordered. amendment before this body does. tax relief. (The text of the amendment is print- It is a $500 billion tax cut that is tar- It does not go far enough in the area ed in today’s RECORD under ‘‘Amend- geted to people who really need help in of savings and investment. It does not ments Submitted.’’) this country. There are some argu- provide enough health care tax relief, The PRESIDING OFFICER. There is ments that say the polls tell us the nor does it provide enough relief 1 hour for the sponsor and 1 hour for people don’t want any tax relief. If you against death taxes. the opponents. explain it properly when you go back, As I said when I spoke against the Mr. BREAUX. Mr. President, I yield people do need help. People in the mid- Democratic alternative yesterday, the myself 5 minutes. dle-income brackets would like to have July 29, 1999 CONGRESSIONAL RECORD — SENATE S9685 a greater standard deduction than they The PRESIDING OFFICER. Who We say we are concerned about vet- have now. People on the edge of being yields time? erans’ health care, we want to have kicked up into the 28-percent bracket Mr. ROTH. Mr. President, I yield 10 community policing, we want to have would like to stay in the 15-percent minutes to the distinguished Senator environmental cleanup, we certainly bracket and work harder and earn from Minnesota. want to make sure we deal with what more for their family. People would The PRESIDING OFFICER. The Sen- is becoming a crisis of affordable hous- like to see more tax assistance for edu- ator from Minnesota. ing, and then all of us are forever and cation and help for the 43 million Mr. WELLSTONE. I thank the Sen- ever and ever talking about children Americans who work every day and ator from Delaware. and education. We talk about all those can’t afford to buy health insurance be- Mr. President, I was listening to my people who do not have any health in- cause they work for a company that colleague, Senator BREAUX from Lou- surance. We talk about prescription doesn’t provide them health insurance. isiana, and I want to respond to what drug benefits for the elderly. How are he said because he said it—like he says We have carefully tailored the $500 bil- we going to do all of that at the same everything—very well, regarding the lion to help those people. time that we are going to have $500 bil- whole question of reality tests and Our legislation helps people buy lion of tax cuts? We are not. health insurance. It helps people avoid good politics versus good policy. With the Democratic proposal the I speak against this amendment, not the ridiculous marriage penalty by other day on the floor with $300 billion for the sake of good politics but for the eliminating it and increasing the of tax cuts, we were still several hun- sake of good policy. I speak against standard deduction. That is a tax pol- dred billion dollars under where the icy that should have an opportunity to this amendment understanding that re- ality test, as I think about the lives of caps take us. In other words, we were become law, because while we spend several hundred billion dollars—I think $500 billion over the next 10 years to people in our country. I want to say close to $300 billion—short of making help people who need help the most, we one more time on the floor of the Sen- up the cuts in discretionary spending. also reserve $500 billion for other prior- ate—and I have said it a couple of times—that I do not understand this With the $500 billion it is worse. ities of Government, to do something I want to know where the give is on Medicare, which needs to be re- kind of bidding war on tax cuts. I un- derstand very targeted tax cuts to going to be. formed. The chairman says we will do In all due respect, as I look at the those citizens who need it the most. I something in September, and that is a pattern of our powerlessness in Amer- understand very targeted tax cuts that very courageous position to take. But ica today, it is a very distorted pattern there will be money to pay for what is speak to the concerns and cir- cumstances of hard-pressed working of power. I know the Pentagon will get needed for Medicare. There will be a its resources. I know we will make sure $500 billion pot of money to go to cover families. But I think the vast majority of people in the United States of Amer- that we invest in transportation. the very necessary discretionary spend- I can just imagine with the squeeze ica—and I think this is the meaning of ing needs in this country. on—that is exactly what you are going So we are offering something, accord- the poll about tax cuts—are saying to have, deep cuts in discretionary ing to a reality check, that has the po- this: You all are sort of—I don’t know spending for a decade, and then God tential to become law as opposed to what the word is—trying to pander to knows where this takes us in the next being merely a political statement on us and you have this argument that decade—what is going to be cut. both sides of the aisle. Unfortunately, you have made for years—I am not say- We are going to go from 1 percent people in both parties have taken the ing all colleagues for this amendment Head Start funding—pre-3-year-olds, position: It is my way or no way. have made this argument for years, but We were sent here not to do political it goes something such as this: This Early Head Start funding—to less than statements and take political positions money belongs to the people, and we 1 percent. We are going to go from 40 only, but to work together to resolve are going to give it back to you, what- percent, or a little over 40-percent differences and come to an agreement ever there is in surpluses, which, of funding for Head Start, ages 2 to 5, to on public policy. I happen to think pub- course, is all based upon assumptions less than 40 percent. We are going to go lic policy is good politics. But good we make. And, hopefully, these as- from barely covering 20 percent of af- politics is not necessarily good policy. sumptions will be borne out about eco- fordable child care needs for low-in- We have a choice today, in the next nomic performance. come families—much less moderate in- couple of hours, to determine whether I really think the vast majority of come and much less working families— we are going to be interested in good people in Minnesota and the vast ma- to less than 20 percent. politics in the short term, or whether jority of people in the country are say- That is the problem with this amend- we are going to try to work together to ing this belongs not to us but to our ment. reach an agreement that can become children and grandchildren, and what- My colleague from Louisiana said it law and become policy for the Amer- ever you have by way of surpluses— is a compromise. It is a reality test. It ican people. now we are focusing on the non-Social is a compromise between the political There are very few things in life that Security surplus—put it into reducing center of gravity of where Republicans are either all one way or the other the debt to get the debt off the backs of are and where Democrats are, but it is way. Anybody who has been around for our children. Make sure there will be not based upon where I think the polit- a short period of time knows that. Cer- Social Security and Medicare for our ical center of gravity is in the country. tainly, when we are discussing what to children and our grandchildren as it I know that sounds presumptuous. do with $1 trillion, there are a lot of has been there for us; and, finally, Maybe it even sounds arrogant. I swear good ideas. But we have to conclude make sure that our children and grand- that I don’t mean it to be. But I really that neither side is completely right. children are going to have the same op- believe the vast majority of people in There has to be a blend of different portunities we have. our country are for tax cuts that are ideas and philosophies in order to come We can’t do that. I came to the floor very targeted, that speak to the con- together in a democracy and reach the other day and said about my own cerns and circumstances of really hard- something that can become law and, party’s proposal at $300 billion—$200 pressed families, and they want to see ultimately, good public policy. Then billion less than $500 billion—that we the rest of us deal with Medicare. They the argument will be over success, as can’t do all of that and have these tax want to make sure we have Social Se- opposed to an argument over failure. cuts to the tune of $500 billion at the curity, and people want to see some in- The track we are on now leads us to go same time. It doesn’t add up. vestment in our children. They want to back and tell our people it was their To use the old Yiddish proverb, ‘‘You see opportunities for children in this fault that nothing was done. That is ar- can’t dance at two weddings at the country. We can’t do it with this. guing over failure as opposed to argu- same time.’’ We have several hundred billion dol- ing about success and who was able to If you look at the non-Social Secu- lars more—well over $300 billion more— bring that to the American people. rity surplus, three-quarters of it is of cuts in discretionary spending if we Mr. President, I reserve the remain- based upon cuts or the caps in domestic go for their $500 billion package. Where der of my time. spending. are we going to cut? You mean to tell S9686 CONGRESSIONAL RECORD — SENATE July 29, 1999 me that now we are putting a strait- Some people say: Wait a minute. You ROTH’s bill moves the bottom rate from jacket on ourselves and boxing our- are not reducing the debt enough. We 15 to 14. selves in such a way that we are not reduced the debt more than Clinton’s The difference between 28 and 14 is 14 even going to be able to make any of proposal. Maybe that is good. I think percent. Fourteen percent times the these kinds of investments in health, that is probably good. number of thousands, if it is $10,000, skills, intellect, and character of our Concerning the tax cut and total of that is $1,400. children? We are not going to be able the estimated surplus: Some people to it. This hypothetical couple pays an ad- may say: Maybe the estimates aren’t ditional $1,400 more per year for being I don’t see this as being any kind of right. Maybe they are too optimistic. reality test amendment. I think this is married. We shouldn’t penalize them And even though we are only taking for that. not at all based upon where most peo- one-fourth of the surplus and allowing ple in the country are. I don’t think it people to keep it, they don’t want to In the bill each couple has the option is based upon what we have to do as a give it back to the taxpayers. They’d of being taxed individually. If one nation. rather spend it. member of the couple is taxed at 28 I think in the next century we have Well, that is not what a tax cut is. A percent, fine. It doesn’t mean the next to grow together. I think in the next tax cut let’s people keep more of their spouse has to be taxed at that rate as century, by the year 2030 or 2040 or money. They do not have to get it back well. Maybe the income of that spouse, 2050, we have to make sure the next from Washington, DC. Is it their male or female, might be significantly century belongs to our children and money, or is it Washington’s money? It lower. It would be taxed at a lower our grandchildren. We have to make is their money. Is it not a gift from us. rate. Why tax them at the highest sure they get the best education. We We are taking it from them right now. rate? We shouldn’t do that. We elimi- have to make sure they have the best In some cases we are taking too much. nate that in this bill. That is not insig- skill development. We have to make nificant. sure they are healthy. We have to In some cases the taxes we are taking The example I gave was a $1,400 dif- make sure they are productive. We from people are unfair. ferential. CBO says the average mar- have to make sure there is less vio- I am going to talk about that be- riage penalty is $1,400. We should be lence in their lives; that they grow up cause the bill we have before us allevi- able to eliminate that, and we do to be independent, resourceful, self-re- ates some of those problems. It doesn’t liant, morally responsible and demo- solve all the problems, but it alleviates eliminate it in this bill. Who benefits? cratic citizens. That is what we ought some of the problems. Is it the best bill Nineteen million married returns to be doing with whatever kind of sur- imaginable and perfect? No. But it does would have that inequity eliminated. plus we have. go a giant step toward eliminating in- That is in this bill. We certainly shouldn’t be supporting equities and injustices in the tax bill. I Let me talk about the 14-percent a proposal with $500 billion of tax cuts say ‘‘injustices.’’ There are some cases bracket expansion. I wasn’t particu- that will crowd out all of that invest- in the 1999 Tax Code where the taxes larly fond of this idea. I thought, why ment, especially when it comes to the are unfair. move the 15-percent rate to 14 percent? most vulnerable citizens in our coun- It is absolutely unfair for a married What does that mean? Somebody asked try. couple to have to pay more taxes than me the other day on a radio show: I hope this amendment will be voted if they were living together and unmar- What does that mean to me as a tax- down. ried. It is unfair to have a tax penalty payer? It means we have a benefit for I yield the floor. for being married—absolutely unfair. all taxpayers. Any taxpayer will ben- The PRESIDING OFFICER. The Sen- That is in the Tax Code today. efit. How much do you benefit? Individ- ator from Delaware. The bill of the Senator from Dela- uals, up to $250; and a couple, $430. Mr. ROTH. Mr. President, I yield 6 ware eliminates that. We want to get Therefore, a couple who makes up to, minutes to the Senator from Okla- rid of it. homa. I think, $48,000 receives a $430 benefit. Unfortunately, that doesn’t happen Somebody said the tax benefit in the The PRESIDING OFFICER. The Sen- under the Democrats’ proposal. Let me ator from Oklahoma. bill is only 50 cents a day. Their num- talk about that for a second. bers are not adding up. The benefit of Mr. NICKLES. Mr. President, first I Somebody says: Well, you eliminate that is $430 a couple. would like to thank my colleague, Sen- the marriage penalty. What does the ator ROTH, for his management of this House do? The House basically doubles I will touch on the bracket expan- bill and for bringing this bill to the the exemption for single people and for sion. I want to compliment our col- floor of the Senate. I am going to talk couples. That is one way of taking care leagues on the pending amendment. preliminarily about the bill. They expand the 15-percent bracket up. First, let me say to our colleagues of the exemption. But it doesn’t elimi- nate the fact that a lot of people have We have that in this bill, too, under who are offering the $500 billion sub- the pending bill authored by Chairman stitute that I compliment them for the combined incomes that push them into higher income brackets. ROTH. We expand the 15-percent brack- fact that they are trying to work to re- et. That means a lot of people who are duce taxes. I think that is important. For example, an individual with a taxable income of $25,000 is taxed at 15 paying 28 percent will pay 15 percent. There are several provisions they have We increase that by $5,000 per couple or in their bill that I compliment them percent. Anything above that, they are taxed at 28 percent. That is kind of $2,500 for an individual. That means a for. couple will save $700. If they have a Most of all, I want to talk about the simple. combined income of $42,000, we save bill that is before us, the bill as re- Let’s say you have two teachers who them $700 by reducing the rate from 15 ported out of the Finance Committee are married, and they have a taxable to 14. For a couple earning $40,000 or by a vote of 13–7. That was a bipartisan income of $25,000. If they file as individ- more will save $1,130 under the bill. vote. I think that is important. uals, they are both taxed at 15 percent. Again, I think that happened in large If they are married, their combined in- That is almost $100 a month. part because of the Senator from Dela- come pushes them into a 28-percent tax I use the test sometimes of my son ware and because of the content of the bracket. They are penalized. and his wife. He sells cars, and she is a bill. I think that maybe we spent too It just so happens, as it works out, schoolteacher. They have one child. much time talking about numbers. that in this case they are penalized How will this benefit them? From Maybe that is partly my fault. I like $1,400. those two provisions alone, they will talking about numbers. We have a $3 Where did I get that? save almost $100 a month in taxes, and trillion surplus. We are going to give a They have a combined income of they are a middle-income, tax-paying tax cut of $782 billion. That is about 25 $50,000. A 28-percent tax bracket actu- family. I think that is a good provi- cents on the dollar. ally kicks in at $42,000. They have sion. When combined with marriage We are going to take two-thirds of $8,000 that is taxed at a 14-percent rate. penalty relief, the average married the surplus and use that for debt re- It is higher than what somebody is couple will realize significant savings tirement. That is good. paying at the 14-percent rate. Senator through this bill. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9687 For instance, those items together entire tax bill is targeted toward AMT ceive the property, the beneficiaries, come to $1,100 just in the rate reduc- relief on American families. I have not the family, if they want to keep the tion and the expansion of the 15-per- heard anybody talk about it. If any- business and keep the business oper- cent rate. Then there is $1,400 savings body thinks that provision is wrong, ating and running, great. If they want in eliminating the marriage penalty. offer an amendment to strike it out. to sell the business, tax it as a capital Now we are talking about $2,500 per If anybody thinks the marriage pen- gain and tax it at the old valuation, at year for a married couple making alty provision, which is $112 billion— whatever escalation has been in the $40,000, $50,000, or $60,000 a year. That is again, probably about 15 percent of this market value. That is the capital gain. not insignificant. That is $200 a month. entire package—is too generous, if That is what the taxable event should We are helping a lot of people. The Members don’t think we should have be, when the property is sold—not be- number of people who would benefit marriage penalty relief, offer an cause somebody dies. from expanding the 15-percent rate up- amendment and take it out. If Mem- Again, the chairman’s provision, ex- wards, so they don’t have to pay 28 per- bers don’t think we should cut the rate changing the unified credit for an ex- cent, is a reduction of 13 or 14 percent from 15 percent to 14 percent—which is emption, is a giant step towards, basi- —13 percent by the substitute offered $298 billion, which is the biggest provi- cally, bringing about some relief in es- and 14 percent by Chairman ROTH’s sion in this entire bill, which is three- tate taxes which I think is critically proposal. Chairman ROTH’s proposal eighths of the entire bill—if Members important. If you believe, as do I, in says to individuals in that category, we don’t think it should be in there, take family-owned businesses, if you believe are going to cut their rate in half for it out. I would oppose any such amend- the Government is not entitled to take that additional $5,000. That is a signifi- ments, because these provisions are at over half of people’s property just be- cant savings. Add that all together, the heart of this legislation and are cause they pass away then you should and we are talking about $2,500 for a what make this bill a tax cut for tax- support this bill. Somebody said earlier couple who make $40, $50, or $60,000. payers on the lowest end of the ladder. this provision in the bill only benefits That is not insignificant. A lot of people say the Republican the wealthy. I disagree strongly with Mr. President, 98 million people will package is a tax cut for the rich. It is that statement. benefit from the reduction in the 15 to not. Those people have not read the My father, unfortunately, passed 14 percent income bracket, 80 million bill. This bill reduces taxes for all tax- away when I was pretty young and we who have incomes less than $75,000. In payers, including people at the lowest had a family-owned business, Nickles other words, it is a tax cut for tax- end of the economic ladder. Machine Corporation, in Ponca City, payers, not necessarily targeted the The provisions I discussed are $506 OK. We had a significant dispute with way as some others might like, but it billion out of $792 billion. That is over the IRS for 7 years about the valuation is a tax cut that is weighted on the five-eighths of the bill I have already of this company. The IRS said: We lower end of the tax schedule. described. I haven’t heard anybody sin- think it is worth a whole lot more and Moving the 14-percent bracket up, 36 gle out any of those sections and say: we want you to pay a lot of taxes. My million middle-class people will benefit that is a bad provision, we shouldn’t mother did not pass away; my brothers from that provision; 19 million married have that provision. and sisters did not pass away—just my returns will benefit from elimination Let me discuss a couple of other father. And he was second generation of the marriage penalties. areas in this bill and why we should in this business. Yet the Government Then there is something else that pass the bill. Let me talk about estate said: We want a chunk of it. hardly anybody is talking about. We taxes. A lot of people are not aware of The estate tax rate today says any have a provision that eliminates the how the amendment of the Senator estate over $3 million, they want 55 penalty called alternative minimum from Delaware works. It replaces the percent. Why in the world would the tax that disallows a lot of the tax cred- unified credit with an exemption. Most Federal Government be entitled to its we have already passed. In 1997 we people say: What in the world are you take over half of what somebody passed a tax credit, $500 per child. It talking about? Unified credit, under worked his or her entire life for be- was $400 last year, $500 this year. That the existing system, says we will credit cause somebody passed away? is law. I know a lot of the people argu- you so much in taxes, and you don’t One of the changes we made in 1981, ing against the Republican tax bill have to pay; but above that, you start it has been seldom noticed, but one of didn’t like it when we passed that in paying taxes at whatever rate it is. It the great changes we made, we elimi- 1997. I had an appearance last night means if you have a taxable estate, nated the inheritance tax between with Gene Sperling, and he said the once you start paying taxes, you start spouses so surviving spouses do not President supported the $500 tax credit paying taxes at a 39-percent rate. If have to pay a dime of inheritance tax. for a child. you have a taxable estate of $1 million, That is a positive change. I was here Maybe a little history would be in 39 percent goes to the Government. and had a little something to do with order. The President campaigned for it What we do by replacing the unified it, and I am very pleased we made that in 1992, and he forgot about it in 1993 credit with an exemption is, once you change. when he raised taxes on all Americans. run out of the exemption, you start But it isn’t enough. Now, even Not only did he forget about it, but he paying taxes at the lowest rate, which though we have made that change, did a tax increase rather than a tax is 18 percent. That is a big difference. when the surviving spouse passes away cut. It wasn’t until 1995 that the $500 That is a big difference for estates that and you have a taxable estate of $3 mil- tax credit passed again. That was when are barely taxable. So, if you are over lion—maybe it is a manufacturing Republicans took control. We passed the exemption amount—the exemption company, maybe it is a farm or ranch, the bill, and the President vetoed it. amount today is $650,000—and you maybe it is a restaurant, and it hap- We passed it again in 1997, and he don’t have to have a lot of property or pens to be worth $3 million—the Fed- signed it. Now they are trying to take a lot of wealth to have an estate of eral Government comes in and says: We credit for it. They didn’t want a tax $650,000, if you get above that, your tax want half. I absolutely think that is cut in 1995, they didn’t want a tax cut would be 18 percent instead of 39 per- wrong. That is one of the many reasons in 1997, but we gave it to him and he cent. That is a big difference, and I why I think we need a tax cut today. signed it. Now that is law. compliment the chairman for doing it. That is one of the reasons why I think Because of AMT, a lot of people are Frankly, I would like to eliminate we need a greater tax cut than the al- not able to take full advantage of that the estate taxes and have the taxable ternative proposed by our colleagues tax credit or child care tax credit—13 event not be death but when the prop- that would provide $500 million. I note million families, and I tell my col- erty is sold. Senator KYL and others the estate tax relief they have in their leagues that number is growing every have been advancing that. I think that provision—— year. Senator ROTH’s amendment has is an excellent idea. You should not be The PRESIDING OFFICER. The 15 significant relief. My colleagues will be taxing somebody because somebody minutes of the Senator has expired. interested to know that is $96 billion. dies. You should tax them when that Mr. NICKLES. I ask an additional 10 Over one-tenth, about 12 percent, of the property is sold. If the people who re- minutes on the amendment. S9688 CONGRESSIONAL RECORD — SENATE July 29, 1999 The PRESIDING OFFICER. The Sen- after-tax dollars. You do not get any The PRESIDING OFFICER. The Sen- ator may proceed. deduction. ator from Louisiana. Mr. NICKLES. Looking at the provi- The chairman’s bill changes that in- Mr. BREAUX. Mr. President, I yield sion offered by our colleagues, in the equity and says, yes, you eventually 10 minutes to the distinguished cospon- substitute they have $19 billion of es- get a 100-percent deduction. It phases tate tax relief and the estate tax relief that in, but eventually that person gets sor of the amendment, the Senator offered by the underlying proposal is a 100-percent deduction for their health from New Jersey. $63 billion. So it does a lot more in es- care cost as well, and they do not have The PRESIDING OFFICER. The Sen- tate tax relief in the chairman’s bill to itemize to get it. All taxpayers ator from New Jersey. than what is offered in the substitute. would get it. Again, this is a giant step Mr. TORRICELLI. Mr. President, I happen to believe in estate tax re- in the right direction in bringing tax thank you very much. equity in health care costs. form very strongly, and not because it The Senate has had before it three benefits the wealthy. I happen to be- When we allow people to buy homes lieve it is a matter of fundamental fair- and we say you can deduct your inter- very distinct blueprints for the Amer- ness and freedom. People should be est, we do not say you have to work for ican future, not a tax plan for the re- able to work their entire life and be a generous employer to be able to de- mainder of this year or next year but able to pass their property on to their duct the interest. Everybody gets it. blueprints that will dictate many pri- kids without Uncle Sam coming in and We are free to use the Tax Code to en- orities and decisions for more than a saying that we want half or even over courage health care. It should apply to decade. They are very distinctly dif- half. The chairman’s amendment helps everybody, and again, the chairman’s ferent. make that change. package makes a giant step in that di- The Senate has before it a Repub- rection. Also in the underlying bill, we in- lican tax reduction plan that will never crease retirement savings. Everybody The chairman’s package does many in this room knows we do not save near other things. It allows an extension of become law because the President will enough. What we do under the under- time for people to be able to deduct never sign it. The Senate is considering lying bill is we increase IRAs over a 3- their student loans; it allows a contin- a Democratic tax reduction plan that year period from $2,000 to $5,000. We do ued deduction for companies that have will never become law because this that in both the IRAs that are tax ex- educational plans and benefits; it has a Congress will never pass it. And there empt going in and the ROTH IRAs, into plan to help in education; it has a plan is a bipartisan tax reduction plan of which you may put after-tax dollars. $500 billion now before the Senate. That means we are allowing people to to help in health care; it has a plan to help increase savings and retirement It is termed a ‘‘bipartisan tax reduc- put in more money to save for their tion plan,’’ but it should be better own retirement. and 401(k)s; it has a plan to allow peo- known as the ‘‘October plan,’’ because The $2,000 limit goes back for years ple to keep more of their own money; it and has not been indexed for inflation. eliminates the marriage penalty. we may spend July and August debat- Frankly, we in Congress should encour- I tell my colleagues that those are ing our partisan proposals. age savings. We want people to be less things we need which will help Amer- Members of the Senate may not en- dependent on Government, more de- ican families. That is not just a tax cut dorse this proposal today, but I suggest pendent on themselves, to be able to for the wealthy. That is not something that by the time we reach October, it is save for their retirement. Increasing my colleagues can demagog. They may a plan such as this that will bring us this amount from $2,000 to $5,000 is a want to, but if they want to demagog, together. giant step in the right direction. where do they want to cut? Do they This plan, crafted by Senators REAUX, KERREY, CHAFEE, SPECTER, Again, I compliment the chairman. want to eliminate the permanent R&D B COLLINS, SNOWE, BAYH, myself, and a This provision is in his bill. It is not in tax credit? Do they want to eliminate most of the other bills. I do not believe group of others, is based on a belief it is in the substitute as well. the self-employed deductibility? Do that the Nation should have returned Finally, I want to touch on one other they want to eliminate the marriage to it as much of its tax dollars as pos- thing, and that is the self-employed penalty? Do they want to eliminate the sible, while still being prudent to allow health care deductibility. The chair- reduction in rate from 15 to 14? Do they the development of a surplus, pro- man’s bill says, for self-employed per- want to eliminate the expansion of the tecting Social Security and other na- sons, we are going to allow 100-percent 15-percent tax bracket? I don’t think tional priorities. Reducing taxes is a deductibility. We had this debate actu- so. national priority, but so is hiring ally when we were debating the Pa- I think the chairman has put to- 100,000 teachers, rebuilding American tients’ Bill of Rights. It was included gether a good package and that pack- schools, providing for a pharmaceutical in the measure we passed on the floor age, yes, costs $792 billion. I say costs. benefit in Medicare, improving the na- of the Senate. I argued then if we want It is going to allow people to keep $792 tional infrastructure, and reducing the to increase health care access, we billion of their own money. They are national debt. should at least make the Tax Code eq- going to be sending in over $3 trillion Like any compromise, this plan is de- uitable, and it is not equitable. Major more than the Federal Government signed to accommodate many of these corporations today get to deduct 100 objectives, and I think we have suc- needs in the next 10 years. We are say- ceeded. But it is also based on the be- percent of their health care costs; self- ing we are going to let them keep some employed deduct 45 percent. What is lief that the American people, after 8 right about that? What is right about a of that themselves. The chairman has years of economic expansion that was code that says: Self-employed person, crafted this in a way that is going to built on hard work, high taxes, and you deduct 45 percent but GM or any help a lot of middle-income working sacrifices, deserve a dividend. corporation in America, you deduct 100 Americans who are interested in health This $500 billion tax reduction plan is percent? I am offended by that section care, who are interested in education, a fair and reasonable dividend. This in the Tax Code and I support this bill who want to not be penalized because surplus developed for a reason. In 1993, for making that much needed change. I they happen to be married. appropriately in response to bur- used to be self-employed. I used to run So I compliment him for his package. geoning deficits, this Congress in- a corporation. A corporation deducts I urge my colleagues, with all great re- creased taxes by a quarter of a trillion 100 percent, but if you are self em- spect for the amendment that is pend- dollars. In the years that followed, ployed tough luck, you only get to de- ing, I urge them to vote no on that American businesses produced and duct 45 percent. amendment because we can do more, American workers produced at unprec- Then the chairman’s package also and we should do more. The American edented levels. They have provided an has a major expansion for people who taxpayers deserve more, deserve better. economic expansion and also a Govern- do not get anything from their em- I hope our colleagues vote no on the ment surplus, and they deserve now to have some of it returned. That is the ployer. If they pay over half their pending amendment and vote yes on health care cost, they get to have an foundation of this plan. But we accom- final passage, hopefully tonight. plish nothing by returning these tax above-the-line deduction for their I will mention, as far as procedurally, health care expense. Again, why in the revenues if we only prestage a bur- world, if we are going to use the Tax I hope we can finish this bill tonight. It geoning deficit in the future or we deny Code to encourage health care, why do is possible. It will not be easy, and our other needs in the country as well. we not let it apply to everybody in colleagues will have to work together Tax reduction is an economic imper- America? We do not do that today. If to make that happen, but I hope it will ative, in my judgment, but so is edu- you do not work for a generous em- be possible for us to have final passage cation and so is improvement of the ployer who subsidizes your health care, on the underlying amendment later to- national health care system, and so is you are out of luck. If you are not self- night. expansion of the national infrastruc- employed, you are out of luck. You I yield the floor. I thank my col- ture. There is before this Senate but have to pay for your health care with league from Delaware. one balanced plan that can achieve July 29, 1999 CONGRESSIONAL RECORD — SENATE S9689 these tax reduction goals while meet- Those are the twin objectives we not having any tax cut at all, but it ap- ing these balanced national objectives, have: Reduce consumer debt by low- pears we are headed for some tax cut. and it is this plan, the ‘‘October plan.’’ ering taxes on the middle class by mov- And a group of centrists, so-called This plan is also based on a recogni- ing people from the 28-percent bracket moderates, have joined together on the tion that even in good economic times, to the 15-percent bracket; and, second, proposal which is now on the floor for it is important to recognize that these by encouraging savings, both as Sen- a tax cut of some $500 billion. are not perfect economic times. The ator ROTH has done by an expansion of This same group, in substantial United States today faces twin eco- the IRA, and in our case from $2,000 to measure, was assembled 2 weeks ago on nomic problems: $3,000. the so-called Patients’ Bill of Rights, First, record levels of consumer debt. This Government should be doing ev- where the centrists had an alternative The current economic expansion is erything possible to encourage Ameri- proposal to the more extreme proposals threatened by mounting middle-class cans to save money, if not for our larg- on the right and on the left. consumer debt more than any other er economic purposes, then simply be- We have rounded up the so-called single indicator. Middle-income fami- cause 50 percent of Americans have no ‘‘usual suspects,’’ but we have a few lies with young children are shoul- pensions; 60 percent of Americans re- more; and I think there is some chance dering more debt in home mortgages, tire only on Social Security. My col- that this bill, this proposal, this credit card bills, and educational ex- leagues and I know why there is such amendment will be adopted, if not penses than at any time in our na- enormous pressure on this Congress to today, then perhaps ultimately. tional history. increase Social Security and other At the outset, I acknowledge the This plan is designed to respond to Government benefits: Because people proposition which has been advanced that need by moving 4 million Ameri- are not saving money, and they do not by the Chairman of the Federal Re- cans, people who earn $50,000, $60,000, save money because this Government serve, Alan Greenspan: that the Gov- $70,000 in family income, with young has made it economically irrational to ernment of the United States would be children, and moving them from the 28- do so, and the Tax Code is the answer best served if there were to be no tax percent bracket to the 15-percent to changing that reality. cut at all. bracket where they belong. The projections of the surpluses are This Government has no right to go Our bill, I think, is easily defined and highly speculative. If you change the to a family that earns $60,000 and explained. It is simply $500 billion over interest rate a bit, or if you change the $70,000 and struggles every month to the course of this next decade. It re- unemployment rate a bit, those sur- educate its children, provide housing, moves 3 million people entirely from pluses would change very dramatically. clothing, and food, and take 28 percent the tax rolls by increasing the standard There is a strong argument for the of that income for the Federal Govern- deduction and eliminating taxes on proposition that we would be best ad- ment. I do not believe it was ever our modest savings. Three million people, vised to pay down the national debt. intention. largely senior citizens, will pay noth- Prosperity and inflation moved peo- ing. The national debt now stands in excess ple into these tax brackets. For a long Second, as I suggested, we move 4 of $5.5 trillion. When the Presiding Of- time, some of us lived with the illusion million people from the 28-percent tax ficer and I came to the Senate, after that people who lived at these modest bracket to the 15-percent tax bracket, the 1980 election, the national debt was incomes somehow had expendable in- meaning that a family of four earning slightly under $1 trillion. Notwith- come, as if they were living lives of $71,000 will now have their taxes argu- standing the so-called ‘‘Reaganomics’’ luxury. There is no luxury in American ably reduced in half and have money of the administration of President life today on an income of $30,000 to available for their own family needs. Reagan, by the time he had left office, $70,000 with children. This bill recog- For a single person earning $37,000, this the national debt was in the range of $3 nizes that fact. translates into a $600 tax cut. A family trillion, and it has gone up. We also recognize that many senior earning $71,000, as I suggested, receives To reduce the national debt would re- citizens and many young families sup- a $1,300 tax cut. duce the carrying costs on the interest, plement their incomes by modest sav- We also do more. We eliminate the and there is a great deal to be said for ings—people who earn a few thousand marriage penalty entirely in the stand- that. But my sense is the temper of the dollars in capital gains, put a little bit ard deduction. We increase and expand times is that we are going to be look- of money in the bank, or they invest in the child care tax credit to remove ing at a tax cut to some extent. If we the stock market for a little security American women from this dilemma ameliorate, or reduce the tax cut from to participate in American growth. The where they have to choose between the proposed $792 billion to $500 billion, Federal Government should not be going to work to pay the mortgage and then we have more assurances that we charging capital gains taxes on people knowing their children are safe by al- can take care of other needs of Amer- who earn $2,000 and $3,000 a year. We lowing affordable child care. ica. should be doing everything we can to The PRESIDING OFFICER. The time There is a consensus that the Social encourage these people to save for an yielded to the Senator from New Jer- Security fund ought to remain invio- emergency, prepare for the future, and sey has expired. late, ought to be preserved at all costs. this bill deals with that reality, in re- Mr. TORRICELLI. I close by urging I believe that it is true that the Social sponse to the fact that the other crisis my colleagues to join with me in this Security fund will be secure under any in American economic life today, be- bipartisan plan for reasonable and af- of the pending proposals. But you can’t yond high consumer debt, is a virtual fordable tax relief. I yield the floor. be entirely certain of that because that collapse in national savings. This year, The PRESIDING OFFICER. Who significant measure depends on the the United States has a national sav- yields time? economic forecasts, the unemployment ings rate of minus 1.2 percent, the low- Mr. BREAUX addressed the Chair. rate, and the interest rate. est rate since the second year of the The PRESIDING OFFICER. The Sen- Beyond Social Security, there is a Great Depression. We are the only de- ator from Louisiana. commitment to preserve Medicare. A veloped nation in the world with a neg- Mr. BREAUX. I yield 10 minutes to lesser tax cut would provide a better ative savings rate. the Senator from Pennsylvania. guarantee that funds will be available This legislation responds to that re- The PRESIDING OFFICER. The Sen- for Medicare. ality. We eliminate the capital gains ator from Pennsylvania is recognized Then we have the issue of prescrip- taxes on the first few thousand dollars for 10 minutes. tion drugs where, again, there is a of savings, which, in part, takes 4 mil- Mr. SPECTER. I thank my colleague growing sense that this is an issue lion taxpayers off the tax rolls en- from Louisiana. which has to be taken into account. tirely—young families and probably Mr. President, I join in cosponsoring Again, a lesser tax cut gives more flexi- largely senior citizens who want a lit- this centrist approach. In my view, the bility for prescription drugs. tle security in life. They should pay tax proposal to cut $792 billion over 10 So when we look at the nothing, and that is what this bill pro- years is too much. It may be that the imponderables and the problems, there vides. United States would be best served by is much to recommend a lesser tax cut, S9690 CONGRESSIONAL RECORD — SENATE July 29, 1999 so that a figure in the $500 billion have pending, which is the flat tax. that the Finance Committee bill is a range appears preeminently reason- That is a proposal to simplify taxes in better, balanced approach. able. America so they could be filed on a sin- Let’s examine it for a moment. For Earlier today, about an hour ago, the gle postcard. example, middle-class families would Senator from Minnesota, Mr. I regret that this measure has not re- receive far less relief under the $500 bil- WELLSTONE, said he did not think the ceived greater attention, notwith- lion amendment because the 15-percent majority of the country favored any standing the fact that it was intro- bracket is not reduced. Moreover, the tax cut. Well, it is hard to assess where duced in the House of Representatives marriage penalty relief in this amend- the majority of the country is. What is by Majority Leader ARMEY in the fall ment will not affect the 30 percent of going to happen in the course of the of 1994, and I introduced it—the first married couples who itemize deduc- next 6 weeks, probably, presumably, bill in the Senate—in March of 1995, tions. likely, is that a tax cut will come out which really provides some very sub- The biggest flaw in the authors’ ap- of the Republican Congress. The plan stantial relief on simplicity and breaks proach is their belief that this $500 bil- is, if this tax cut is adopted, the Senate for the American people. That is not to lion tax cut would be approved by our and House will go to conference, and be, but I will have an opportunity a lit- President. He has stated already he there will be a resolution of the issue tle later to explain, in some detail, the would not sign a tax bill, a $500 billion by the end of next week, before we flat tax proposal. tax bill that cuts taxes by more than start the August recess. Mr. President, inquiry as to how $300 billion. And the Director of the Then there will be an opportunity for much time I have remaining of the 10 OMB has indicated that a $500 billion Americans to digest the positions minutes allotted. tax cut would be vetoed. So we have a taken by the Republican Congress, con- The PRESIDING OFFICER. One veto threat. trasted with the position taken by the minute. We also have a responsibility to the President’s Administration and what Mr. SPECTER. I thank the Chair. American taxpayer. As a member of the Democrats have in mind. In conclusion—the two most popular the Finance Committee, I rise in I believe if the Senate were to enact words of any speech—I believe that strong support of the Taxpayer Refund this amendment on the $500 billion tax America ought to be governed from the Act as proposed by Finance Chairman cut, we would be in the position to center; America needs to be governed ROTH. I commend his chairmanship, have some realistic negotiations. It is from the center; and America wants to the professional staff, and the Joint perfectly obvious, at this stage of the be governed from the center. Tax Committee staff who have worked proceeding, that the aura of politics is Where we have the competing pro- so hard in putting this together. It has very heavy in this Chamber, very posals—the one which was defeated been very difficult, but it is fair, it is heavy in the House Chamber, very yesterday, the Democratic proposal at balanced, and it is growing in support, heavy over all of America—less heavy, $295 billion; the competing proposal of as Americans and Members of this body frankly, outside the beltway. $792 billion—the $500 billion figure will recognize its contribution from the During the August recess, as I under- provide more flexibility for other needs standpoint of fairness and equity. Ev- take my open-house town meetings, I of America, will move to the center, erybody shares. Everybody benefits. It am anxious to get guidance as to what will give better assurances that ade- is a great opportunity for the Amer- the Congress ought to do from the pre- quate funding will be available to pro- ican people to share in this prosperity vailing wisdom of Pennsylvanians and tect Social Security, to provide Medi- associated with the surplus. the wisdom of men and women outside care reform, to provide important pro- The Roth bill gives the overtaxed of the beltway. grams such as prescription drugs, to American family a refund of the taxes But I think a tax bill coming out of provide for the kinds of funding nec- they are now overpaying to the Federal the Senate at $500 billion would set the essary for the National Institutes of Government which has resulted in the stage for some serious discussions with Health, the other important items yet surplus. The Congressional Budget Of- the White House, and an important as- to be resolved under an arrangement fice projects that the total budget sur- pect of those discussions will be what with the White House on the pending plus over the next 10 years will be $2.9 is going to happen to the appropria- appropriations bills. trillion. Nearly $1 trillion—that is, tions bills. I join my colleagues in urging adop- about $996 billion—of that surplus We are now operating under the 1997 tion of the Chafee-Breaux proposal. comes from overpayments of income Balanced Budget Act. Speaking for my The PRESIDING OFFICER. Who and estate taxes. The American people subcommittee, which has jurisdiction yields time? should share. They know to whom this over three major Departments—the De- Mr. ROTH. Mr. President, I yield 10 refund belongs. It is an obligation of partment of Education, the Depart- minutes to the Senator from Alaska. this body to give some of it back. ment of Health and Human Services, The PRESIDING OFFICER. The Sen- What Senator ROTH and my col- and the Department of Labor—the allo- ator from Alaska is recognized. leagues on the Finance Committee cation of $80 billion is totally insuffi- Mr. MURKOWSKI. I thank the Chair, have done in this bill is to take about cient when we look at what we had ap- and I shall not take the full 10 minutes. $791 billion of those tax overpayments propriated last year, what the inflation Mr. BAUCUS. Mr. President, might I and return that money to the Amer- rate has been—however small, it is a get some understanding of the order. I ican people, the hard-working Amer- factor. Looking at the financing of the wonder if there is some way we could ican taxpayers. All of the $1.9 trillion National Institutes of Health, which go back and forth. Social Security surplus will be used have made such dramatic achieve- Mr. MURKOWSKI. I was under the solely for preserving Social Security. ments; the financing for Head Start, impression we were talking on dif- As a result of this bill, we will have Healthy Start, and worker safety; that ferent sides of the amendment. more than $200 billion available for is a matter which has to be reconciled, Mr. BAUCUS. If we understand that saving Medicare and paying down part has to be negotiated with the White the next speaker will be the Senator of the debt. House during September, before we go from New Jersey, that would be help- We have heard from the President into October where we have the highly ful. that he will veto this bill because the publicized possibility of the so-called Mr. ROTH. That is correct. tax refund is too large, and the liberal train wreck. Mr. BAUCUS. I thank the Chair. Washington press mindlessly parrot But those are factors which have to Mr. MURKOWSKI. Mr. President, the the President’s statement and argue be taken into account. There again, an issue before us today is whether we that we should not provide such a large approach of $500 billion leaves greater should replace the Finance Commit- refund. flexibility to accommodate other press- tee’s tax relief bill with a smaller $500 First of all, the President wasn’t ing needs of the Government. billion tax relief bill. I commend the very supportive of any kind of a refund. Later during the consideration of authors of the amendment for their ef- He is coming around now. Think of the this tax bill, I will have an opportunity fort to provide tax relief to the Amer- media, the media that parrot an argu- to speak about an amendment which I ican people, but I believe very strongly ment that has no foundation, that July 29, 1999 CONGRESSIONAL RECORD — SENATE S9691 somehow it is wrong for the American ment incentives, allows increased com- cuts of roughly $800 billion. The Presi- people to have a tax refund. Think petition by people over 50 years of age. dent has said he will veto a bill of that about that for a moment. What is I commend the chairman, Mr. ROTH, size. The Senate Democrats have pro- wrong with the American people shar- for upping the limit on contributions posed tax cuts of $300 billion, and the ing in this surplus? After all, it belongs to IRAs to $5,000. It has been over 20 President has signaled his willingness to them. What do you do if you get a years since we raised the $2,000 IRA to sign a bill with that level of tax tax refund? What do you do if your limit. Upping the limit to $5,000 is long cuts. taxes are reduced? Well, you have a overdue, and it is incentive for the The bad news in all this is that the couple of alternatives. You can save it, American people to save for retire- parties are at an impasse. One side is or you can go out and buy something, ment. dug in at $800 billion; the other will not spend something. That is going to in- In recent months we have seen that budge from $300 billion. The good news crease somebody’s inventory. Go out America’s savings rate is actually a is that both sides agree that we can af- and buy a new bicycle; somebody has negative number. These incentives ford and achieve some level of tax cut. to put in more bicycles. could well serve to increase our savings I certainly do. And since both sides The point is that it addresses an al- rate. Is that what President Clinton agree that a tax cut is appropriate, ternative for the American people. We objects to—retirement savings incen- sooner or later we will have one. should save more. We are going to have tives? Or does the President object to What those of us sponsoring his cen- an opportunity to save more. the health care provisions in this bill, trist amendment are saying is: ‘‘Let’s The Democrats automatically jump health care changes that bring a much- compromise. Let us take a step toward to a conclusion: Interest rates are needed level of equity to the Tax Code? the middle. Let us settle on a figure we going to go up. There is no proof of Allowing the self-employed to deduct can agree on. And let us get this tax that. There is no indication of that. 100 percent of the cost of health insur- cut done—sooner, rather than later. If That is scare tactics, Mr. President. ance finally brings small businesses to neither side can give ground, if we lock What is wrong with the American peo- parity with large corporations. What is ourselves into hard and fast positions, ple having more dollars in their jeans wrong with that? For the first time in this whole process will come grinding to spend or save if they wish? our history, under the bill, employees to a halt. How the process will ulti- Mr. KERRY. Will the Senator yield who pay for more than half of their mately play out is anybody’s guess. It for a question? own health insurance will be able to could mean we have another govern- Mr. MURKOWSKI. I will yield at the take an above-the-line deduction for ment shut-down. Or it could mean we end of my statement. I will be happy to those costs. It sounds fair to me. I end up with an omnibus bill like we at that time. We only have to go back to December thought the President was so con- had last year. of 1980, under the Carter administra- cerned about the uninsured. Why would It does not have to be that way. This tion. Some people have forgotten. Do he, if he was that concerned, veto a tax should not turn into a game of ‘‘chick- you remember what the inflation rate bill that finally provides health equity en’’ between political parties. But both was? The inflation rate was better than to employees and small business own- sides will have to give a little. 11 percent. Interest on the prime rate ers? I ask that question of the Presi- In the end, I think we will ultimately in this country was 20.5 percent. Imag- dent. end up with a tax bill that is some- ine that. What was that due to? Par- Much overlooked in this bill are the where between $300 billion and $800 bil- tially the oil shock. So here we have an more than $12 billion in educational lion—in other words, around $500 bil- opportunity where we can have a sig- changes that will make it easier for lion. I do not see why we can not settle nificant refund, and the beneficiary is graduates to pay for their student on an acceptable mid-point now. the American people. loans. In addition, more than $1 billion You can get a lot of tax relief with The fact is that what the President of this bill will help communities con- $500 billion. The centrist package will wants us to do is not to provide a tax struct new schools. Does the President provide for broad-based tax relief for refund to the American people. Instead, object to that? most taxpayers. Taxpayers who do not he wants to take that surplus to fi- The PRESIDING OFFICER. The time itemize deductions will see a big in- nance $1 trillion in new spending. De- of the Senator from Alaska has ex- crease in the standard deduction. This spite his claim that he wants to cut pired. increase is not just tax relief. It is also taxes by $300 billion, CBO has scored Who yields time? tax simplification. With a larger stand- the President’s budget as actually rais- Mr. MURKOWSKI. I urge support of ard deduction millions of taxpayers ing taxes by $100 billion over the next the Finance Committee chairman’s will no longer have to itemize their de- 10 years. In other words, at a time bill. ductions. Taxpayers who itemize will when we are running a real surplus in Mr. BREAUX. Mr. President, I yield 5 also get a break, as the 15-percent the hundreds of billions of dollars, this minutes to the distinguished Senator bracket will be expanded. President comes along and wants to from Vermont. Up to $5,000 that was formerly taxed impose even more higher taxes on the Mr. JEFFORDS. Mr. President, I at 28 percent will now be taxed at 15 American people so he can finance a thank the Senator for yielding the 5 percent. This 13 percent reduction in big and growing Government. minutes. We have worked closely to- tax will mean savings up to $650 for The bill before us should not be ve- gether on this bill. I am here to rec- married couples. toed because it provides a tax refund to ommend passage of it. Our centrist package also addresses every single American who pays taxes. First of all, I commend my chairman, the marriage penalty. It eliminates the The lion’s share of the tax cut, more Senator ROTH. I support many of the marriage penalty in the standard de- than $410 billion, results from cutting provisions in his bill. Many of the pro- duction, and eliminates part of the the 15-percent rate to the 14-percent visions in his bill are in this bill. I ex- marriage penalty in the earned income rate and the almost total elimination press my sincere hopes that the bill’s credit. Our Tax Code should not punish of the marriage penalty. Is that what good provisions will stand. I agree with marriage—especially among the work- President Clinton objects to—reducing much of what Senator SPECTER said ing poor. Right now two low-income the tax rate paid by the lowest income about some of the ramifications if we people who marry often find them- taxpayer? Or does the President object continue on our present course. This is selves with a smaller earned income to elimination of the marriage pen- basically ‘‘Roth lite’’ as far as the bill credit than they would have had as sin- alty? That must be the case, because if goes. gle taxpayers. That shouldn’t be. our President had his way and we cut It is very much modeled after it. It This alternative also encourages sav- taxes by $300 billion, we could not just cuts it back somewhat so we can ings and investment. The first $1,500 of eliminate the marriage penalty, we get sort of in the middle. capital gains would be tax tree. Again, could not cut the rate paid by the low- This $500 billion centrist alternative this is not just tax savings; it’s also tax est income earners. represents an attempt by some of us to simplification. During the tax filing When the baby boomers are set to re- find a middle ground. The Senate fi- season, the complex schedule D was tire in 11 years, this bill expands retire- nance Committee has approved tax one of the things Vermont taxpayers S9692 CONGRESSIONAL RECORD — SENATE July 29, 1999 complained about most often. Under It is always tempting to believe the has to be prepared to cut spending signifi- our proposal, millions of people with best solution to a conflict is to split cantly in the event that the forecasts on capital gains from mutual funds could the difference. But that is not true which they are based are wrong. avoid filing out schedule D. when one side is taking an extreme po- The PRESIDING OFFICER. The time Our alternative includes targeted sition. That is what is happening. of the Senator has expired. provisions that serve important na- In this case, splitting the difference Mr. LAUTENBERG. I thought I had tional interests like retirement sav- would be terrible policy. It would force 10 minutes. ings, education, and protection of the either unreasonable cuts in education, Mr. ROTH. I yield 2 minutes from the environment. When people move be- defense, and other priorities or, more bill. tween jobs it will be easier for them to likely, it would eventually force exces- Mr. LAUTENBERG. Mr. President, it take their pension benefits with them. sive cuts in Medicare and Social Secu- is less time than I thought I would More people will be able to claim the rity. have to speak on this subject. I have deduction for student loan interest. Supporters of large tax cuts have waited patiently. I guess I will try to Long-term care insurance would be de- been coming to the floor arguing that wrap it up now. ductible. The research and experimen- we have a $3 trillion surplus to divide The projected surplus is truly a mi- tation credit would be permanent and up. But that is wrong. I have even rage. If Congress were to maintain the low-income housing tax credit heard the arguments being made about basic Government functions at this would be extended. These are but a few how well regarded the original Finance year’s level, it would be a $1 trillion of many tax issues addressed in our al- Committee bill of $792 billion was, and non-Social Security surplus, yes, but it ternative package. claiming that it is the only fair thing would be more like one-tenth of that, In the Finance Committee, I voted to to do—to give it back to the people or $100 billion, by the time we finish move the bill out of committee and who paid the bills in the first place. with this tax cut. keep the process going. I applaud The fact of the matter is, we are all on We are slashing prospectively impor- Chairman ROTH for the reasoned ap- a mortgage; all of our citizens share a tant domestic programs such as VA proach he has taken in this bill. mortgage, all of us in this room and and other programs, trying to find With a projected surplus approaching outside in the countryside. It is our na- trick ways to satisfy our obligation to a trillion dollars, I think we can afford tional debt. the Veterans’ Administration and to some tax relief. I must confess, how- I don’t know any family that, given a the Census, which is clearly identified ever, I’m a little uneasy with the level chance to get a couple of bucks in their in our Constitution as an obligation, of tax cuts in the Finance Committee pockets—less than $150 in the tax cut now calling it ‘‘emergency’’ spending. bill. An $800 billion tax cut leaves little for modest-income earners of $38,000— What we are observing, I think, is margin for error if the surplus projec- would not rather have their mortgage some sleight-of-hand work. I hate to tions are not correct. An if these pro- paid off for them. That is the condition use that term, but that is what I see, jections understate the surplus, we can we ought to be in—paying off our mort- ‘‘cooking the books,’’ making sure we always come back and enact further gage and paying off our national debt, take whatever forecasts suit the situa- tax cuts. not giving it back in forms that tion the best. I’m also concerned that an $800 bil- produce most of the benefits for people There is no way to do what we want lion tax cut doesn’t leave us a cushion in the highest share of the income stra- to do, what we are obliged to do, if we sufficient to fund a Medicare prescrip- ta. We were talking about people who are going to give away $500 billion in tion drug benefit, to pay down our na- are wealthy, who make $800,000 a tax cuts. There are better ways to deal tional debt or to address other areas of year—by any judgment, they are pret- with our financial or fiscal condition. concern, like education. I think we ty well off in this country—getting Alan Greenspan confirms that. should go slower, be a little more cau- $23,000 a year worth of tax cuts in the I hope this Senate will respond to the tious. Some would call this the con- original bill. Now we are in the com- American people’s desire. Get rid of the servative approach. promise stage, and we are down at a mortgage, pay down the debt, and then Still, I want tax cuts. Our $500 billion level that still, frankly, doesn’t make talk about tax cuts that are targeted alternative allows for meaningful tax economic sense. specifically to modest-income people. relief, while also leaving a significant It is expected that we are talking Mr. BREAUX. I yield 5 minutes to chunk of the surplus intact for other about a surplus. Well, first, I want to the distinguished Senator from Maine, national priorities. point out it is a projected surplus. Ms. COLLINS. Mr. President, the American people There is a big difference. Hardly any- Ms. COLLINS. I thank my colleague are tired of gridlock. They’re frus- body who has looked at CBO’s projec- from Louisiana. trated that compromise is becoming a tions truly believes that they are with- Mr. President, I rise today in strong lost art. We don’t need to wait for a out question. To be fair to CBO, even support and as a proud cosponsor of the veto before getting down to serious ne- they have acknowledged their esti- Chafee-Breaux bipartisan compromise gotiations. We can get this bill done mates are uncertain. plan. I commend the Senator from Lou- today. They depend not only on guesses isiana and the Senator from Rhode Is- The PRESIDING OFFICER. Who about our economy, but they depend on land for their leadership in bringing yields time? assumptions that the Congress will Members together to craft this impor- Mr. ROTH. Mr. President, I yield to make drastic cuts in a broad range of tant proposal. This amendment rep- the Senator from New Jersey for 5 min- popular programs from veterans’ resents a fair, prudent, and responsible utes. health care, to education, to law en- compromise between and among the The PRESIDING OFFICER. The Sen- forcement. If Congress merely main- competing proposals we have been de- ator from New Jersey is recognized. tains defense spending at the levels re- bating. It is a sensible bipartisan plan. Mr. LAUTENBERG. Mr. President, I quested by President Clinton, all of In crafting this proposal, our bipar- thank the chairman of the Finance these other programs would have to be tisan coalition has been guided by sev- Committee. I appreciate this oppor- cut about 40 percent. eral principles. The first is perhaps tunity to state my opposition to the Alan Greenspan, Chairman of the best summed up by the expression, Chafee-Breaux amendment, which Federal Reserve, who is really the most ‘‘Don’t count your chickens until they would provide a $500 billion tax cut. esteemed spokesman on the economic are hatched.’’ We know, based on CBO The proposal is being put forward by condition in our country, has said: Hey, estimates for the next 10 years, that we some of the moderate Members of this be careful. The Fed Chairman told the may have a projected surplus of $3 tril- body, and I have tremendous respect Banking Committee in an article from lion. However, $1.9 trillion of that sur- for Senators CHAFEE, BREAUX, and the the Washington Post this very day: plus is due to a surplus in the Social other cosponsors. Its sponsors may be It would be unwise to cut taxes now alto- Security trust fund. I don’t think we moderate, but this amendment is not. gether on the basis of surplus forecasts that should spend a penny of the Social Se- If you really look at the numbers, I could be far off the mark. If Congress goes curity trust fund surplus for either tax would say it is fiscally irresponsible. ahead with a major tax cut, I think it also cuts or for spending increases on non- July 29, 1999 CONGRESSIONAL RECORD — SENATE S9693 Social Security-related programs. That ever, a slimmed down version of the Fi- When President Clinton first took of- should be reserved for paying Social nance Committee bill in that it trims fice, taxes were 17.8 percent. If we were Security benefits and for Social Secu- about $300 billion from the Finance to give the entire $3 trillion surplus rity reform. Committee legislation. back in the form of tax cuts, the tax That leaves roughly $1 trillion to de- I urge the adoption of the Chafee- burden would still be 18.8 percent of the cide how we are going to allocate. Our Breaux amendment. It seems a good gross domestic product. You have to bipartisan coalition believes adopting a middle ground that best provides tax look back to 1944 and 1945, when we more prudent tax relief goal of approxi- relief in a prudent way for American were in the midst of World War II, to mately $500 billion over the next 10 families. find such high levels of taxation on the years will provide millions of families Mr. ROTH. I yield 6 minutes to the American people. in Maine and across the country with distinguished Senator from Illinois. These are the seven heaviest tax bur- much-needed tax relief, while at the The PRESIDING OFFICER. The Sen- dens in U.S. history. Right now, in the same time guarding against the possi- ator from Illinois is recognized for 6 year 1999, our tax burden is up here. To bility that the current surplus projec- minutes. get equivalent high tax burdens, you tions may not be fully realized in the Mr. FITZGERALD. Mr. President, I have to look to the administration of years to come. Our proposal allows for thank Senator ROTH for this time. Franklin Delano Roosevelt in 1944, or additional amounts of the public debt I am pleased to rise in support of the Harry Truman in 1945 when we were at- to be paid down, as well as reserving tax relief act that has been proposed by tempting to throw Hitler out of Eu- extra funds that could be used to pre- Senator ROTH and the Senate Finance rope, and when we were spending 38 serve and protect Medicare, to Committee. percent of our money on our Nation’s strengthen education, and for other During this debate which has been defense. Today, we are only spending priority programs. going on some 15 hours and several about 23 percent. By historic stand- Our second principle is to target the days before that, we heard many oppo- ards, our taxes are enormously high. In tax relief we are providing. In this time nents of tax relief argue that we ought fact, they are unprecedented in our of economic good fortune, we should to focus on paying down that external peacetime history, and we ought, focus our tax relief on hard-working national debt, which now stands at therefore, to be thinking about tax re- lower-income and middle-income fami- about $3.6 trillion. Many on the other lief. lies. Our proposal would do just that. It side have said our focus on paying Another thing I would like to point allows for additional public debt to be down that national debt should encour- out to you is that right now the aver- paid off while removing 3 million low- age Members to support the President’s age family in America is paying nearly income taxpayers from the tax rolls al- plan, which actually has very limited 40 percent of its family income in com- together. In addition, it slices the mar- tax relief in it. By the CBO’s own esti- bined Federal, State, and local taxes. ginal tax rate nearly in half for an- mates, it actually has a $95 billion tax That 40-percent burden means that in other 4 million Americans. increase, and people believe that some- families in this country where you The third principle we have adhered how going with no tax cut in the Presi- have two parents who are working, one to is quite simply pragmatism. In order dent’s plan will pay down more of the of them is working for the government. to craft, to pass, and actually enact national debt. But, in fact, if you look I don’t happen to think that is right. into law a tax relief bill, we must offer at the real numbers and look where the We need to do what we can to alleviate a plan that enjoys bipartisan support. national debt will be 10 years out, in that tax burden on our American fami- Our proposal meets this test and in the the year 2009, you see that Senator lies. We talk all the time in Washington process offers a blueprint for reason- ROTH’s plan and the Finance Com- about government programs that can able tax relief that should and could mittee plan pays down more of the na- help our families, help our children, become law. Indeed, I predict that ulti- tional debt, the external national debt, improve their education, but all too mately what will be signed into law than the President’s plan which has a often we ignore the fact that the great- will be very close to the proposal the net tax increase of $95 billion. est single reform we could have for our bipartisan coalition has put forth In fact, under the Senate plan that is kids or for their futures would not be today. now before us, the national debt will be another government program but, in In addition to this broad-based tax paid down, the external national debt, fact, more parental involvement in relief, our proposal includes a number will be paid down from $3.6 trillion to $l.5 trillion by the year 2009 versus only their lives. of compelling tax relief measures. For But when you have a confiscatory $1.8 trillion under the President’s plan. example, the amendment provides sub- level of taxation that is taking nearly In other words, even with the tax cuts, stantial relief for the unfair marriage 40 percent of the average family in- we pay more of the external national tax penalty that causes many married come where parents are working two, debt, and we are in a better position, couples to pay more taxes together and sometimes two and a half or even therefore, in the future to take care of than they would if they had remained three jobs just to pay the cut extracted our ongoing obligations for Social Se- separate. It also contains important by Uncle Sam—— health care-related tax proposals that curity and Medicare. The PRESIDING OFFICER. The time I, along with many other Senators, But I want to encourage my col- yielded to the Senator has expired. have advocated for some time. That in- leagues to step back from this whole Mr. FITZGERALD. Could I request 2 cludes a 100-percent deduction for self- debate. We have heard all sorts of argu- minutes taken from the bill? employed individuals purchasing their ments about how much the surplus is The PRESIDING OFFICER. There own health insurance, as well as the projected to be—$3 trillion—and their are 2 additional minutes yielded by the deduction for the purchase of long- plan will save that amount and this manager. term care insurance. plan will cut taxes by this amount. But Mr. FITZGERALD. In short, families In addition, our amendment contains let us step back from that issue and right now in America are spending valuable estate tax relief provisions to just look at where overall levels of tax- more on taxes than they are on food, help our family businesses and our ation are right now in our Nation’s his- housing, and clothing combined. The family farms stay in the family. It in- tory. actual tax levels have increased by 35 cludes provisions that I sponsored to Going back to 1941—this is from the percent. The combined Federal, State, help families save for college education Congressional Research Service—if you and local tax burden has increased by of their children as well as to encour- look at the levels of taxes in this coun- 35 percent on American families since age the environmental benefits that try, Federal taxes as a percentage of the late 1950s. That tax burden is too come from biomass plants. our gross domestic product, you will high. We need to alleviate it. An astute, perhaps even a casual, ob- see that our taxes right now are almost I compliment Chairman ROTH for server might well notice that our bi- at an all-time high. Right now, Federal what he has done to structure a bill partisan coalition’s plan bears a strik- taxes as a percentage of our gross do- that would eliminate that odious mar- ing resemblance to the plan put forth mestic product are 20.6 percent of our riage tax penalty on 22 million Amer- by the Finance Committee. It is, how- economy. ican married couples who are penalized S9694 CONGRESSIONAL RECORD — SENATE July 29, 1999 for being married. It would also give I remind all of us about the needs of on autopilot. I do not know of any serious major tax relief to people in the the American people, of families, work- working family in my State who has lowest tax bracket—that 15-percent tax ing men and women. What about their been guaranteed inflationary increases bracket which would be lowered to 14 needs too? Many working families in their family income for 10 years. percent. That bracket would also be ex- across my State, even in this time of Why should we treat the Federal Gov- panded in size so that more Americans plenty with a strong economy, are hav- ernment any better than ordinary citi- could pay taxes at that lower level. ing trouble paying the mortgage, put- zens? Of course we should not. I appreciate the time. I yield the ting something away for retirement, I asked the Chairman of the Federal floor. affording a college education for their Reserve yesterday about productivity Mr. KERRY. Will the Senator yield children. These families—at a time increases. We are seeing amazing pro- for a question on the remaining time? when we are adding $1.8 trillion to So- ductivity increases in the private econ- The PRESIDING OFFICER. The Sen- cial Security, $210 billion for Medicare, omy. Shouldn’t the Government be ator’s time has expired. and the other for discretionary spend- asked to become more efficient and Who yields time? ing—can very much use the $1,000 for productive as well, thereby decreasing Mr. KERRY. I thought he had addi- an average family across my State to the need for annual increases in spend- tional time. help meet their pressing needs. It is the ing? Of course we need to set priorities The PRESIDING OFFICER. The Sen- right and appropriate thing to do. and make difficult decisions, allowing ator from Louisiana. This proposal honors our values—our us to live within our means, just as Mr. BREAUX. Mr. President, I yield 5 most basic values—and eliminates en- families across my State and country minutes to the distinguished Senator tirely the marriage penalty. No longer are asked to live within their means. from Indiana. will people be penalized by the Federal This is a momentous debate. The The PRESIDING OFFICER. The Sen- Tax Code simply because they choose consequences of our decisions will last ator from Indiana. to get married. We should encourage for many years to come. I believe we Mr. BAYH. Mr. President, thank you. marriage. We should not discourage have set the right balance of priorities, I am pleased to be on the floor of the marriage. fiscal responsibility, honoring our val- Senate as a part of a bipartisan group This proposal makes child care, care ues, doing right by future generations once again—this time to advocate a tax for a sick parent, and health insurance in a bipartisan way. I appeal to the cut for the American people that is fis- for those who are without it more af- President and my colleagues for sup- cally responsible, that honors our val- fordable. These are the right things to port for this measure. ues, and that can actually be done. do. I yield the floor. I am disappointed we will not have I think it is important to recognize Mr. ROTH. Mr. President, I yield 5 an opportunity to vote on this proposal that we can cherish our values and pro- minutes to Senator LIEBERMAN. today because I believe it is in the best mote them by reducing taxes just as Mr. LIEBERMAN. Mr. President, I interests of the American people. Ulti- easily and sometimes better than rise to oppose the amendment before mately, I believe that if we are going through increased public spending. the Senate introduced by my friends to ever span the partisan chasm that This proposal has room for a $45 bil- from Rhode Island and Louisiana. But stretches before us, it will be on the lion drug benefit under Medicare, the in doing so, I rise to oppose all of the ground that I and others are staking same amount of public spending re- amendments that have been offered to out here today. quired of the President’s proposal, and cut taxes. This proposal is fiscally responsible. still we would have $180 billion for ad- It is particularly difficult for me to It allows for paying down 94 percent of ditional discretionary spending over rise and speak against this amendment the publicly held Federal debt—94 per- the next 10 years. offered by this centrist group. It con- cent of the publicly held Federal debt. There has been a lot of talk and a tains some of my dearest friends and That is fiscally responsible. It, as the good deal of disagreement about the closest collaborators in the Senate. I other proposals would do, extends the appropriate level for discretionary have parted company with them only life of Social Security to the year spending increases. I must say, with all after much consternation and consider- 2053—54 more years—by adding $1.8 due respect, I cannot agree with my ation. I do so because, if they will trillion to Social Security. That, too, colleagues in the majority because I allow me to say so, I think the centrist is fiscally responsible. It extends the find the assumptions and accounting course we would best follow in this life of Medicare to the year 2020, adding upon which their proposal is based are case is to stay right in the middle of $210 billion—allowing for that to ex- suspect at best. They ask us to believe the road that has brought the Amer- tend the life of Medicare. they can hold to spending caps over the ican economy to the extraordinary As my colleague from Louisiana, next 10 years that they have already point of growth and strength it occu- Senator BREAUX, pointed out, on some admitted they cannot abide by in this pies today, and that is the road of fis- occasions none of the proposals that very year. That simply is not possible. cal responsibility. It took a lot of hard are before us permanently solve every Yesterday I listened to one of my col- work to get us to this plentiful place issue of Medicare. All of them simply leagues on the Senate Banking Com- that we are enjoying today, with high postpone the day of reckoning. Our mittee have an amazing colloquy with growth, low unemployment, a surpris- proposal would do that and give us the Chairman of the Federal Reserve ingly high stock market, and surpris- time for systemic reform. But, in the Board in which he essentially said, Mr. ingly low inflation. meantime, adding $210 billion to extend Chairman, the reason I am supporting I think the Federal Government the life of Medicare is the fiscally re- tax reductions is that I cannot keep helped to begin it all by creating the sponsible thing to do. from spending irresponsibly. He looked climate for sustained economic growth Finally, it allows for $500 billion of at the Chairman of the Federal Reserve by exercising some real fiscal dis- tax reductions for the men and women and almost asked him: Mr. Chairman, cipline. Then most of the prosperity of our country, completely removing stop me before I spend again. has come, as it always does in America, from the tax rolls 3 million hard-work- Colleagues, we have been elected to from the private sector, from millions ing Americans and moving 4 million this body to make tough choices and of businesses and individuals, inno- people from the 28-percent tax bracket set priorities. I believe we can and vating, cooperating, and profiting. to the 15-percent tax bracket. should. The prescription of the major- Now, as a result, for the first time in a I have listened to the eloquence of ity is one for increased debt and def- generation it looks as if the Federal my colleagues, many of whom have icit. This is a path I choose not to trav- Government may actually go into sur- mentioned the important needs of our el. At the same time, I cannot find my- plus—if we let it. Government—and our Government self in agreement with those who show Oscar Wilde once wrote, ‘‘I can resist does have important needs—many of charts and list figures basically argu- everything except temptation.’’ I fear whom have mentioned the funding pri- ing for an inflationary increase for the same may well be said of this Con- orities for Government spending pro- Federal spending as far as the eye can gress as it giddily proceeds to spend a grams which are important. see, basically putting Federal spending surplus that no one knows is really July 29, 1999 CONGRESSIONAL RECORD — SENATE S9695 there, that would take our Nation back would likely incur sizable deficits for Lyndon Johnson once said: The good into deficit and endanger the critical years to come. news is, I see the light at the end of the economic gains we have made over the The PRESIDING OFFICER. The 5 tunnel. The bad news is, it is the light past several years. minutes of the Senator have expired. of an oncoming train. So I ask, why not stay the course Mr. LIEBERMAN. I ask the Senator That is the prospect we are facing in that has raised the standard of living from Delaware if I might have 2 more Congress with the tax cut proposal be- of millions of American families? Why minutes off the bill. cause all the positions are different and not wait for at least another year to Mr. ROTH. I yield 2 more minutes to everyone is taking a very polarized po- see if the surplus projections are real, the Senator. sition on this very important issue. if the economy will continue to grow, if Mr. LIEBERMAN. I thank the Sen- I hope our package will be one that Congress is prepared to exercise the re- ator. can bridge the differences from all quired spending discipline? That is the On top of that, of course, we would sides. That is why we have tried to leave little or no money available for question Senator LEVIN and I will ask stake out this position so that we can later on a motion to strike the entire building the solvency of Medicare and have a bipartisan proposal that will Social Security, for supporting our na- tax cut before us, which would mean avoid that train wreck. tional security—defense—and we would we would wait a year. It is the question Over the last few days, we have heard thus raise the specter of a major tax that Senator HOLLINGS will ask in an comments from the administration and increase down the line to compensate amendment we will offer later which from Members of this body saying for our profligacy right now. there is no room for compromise; there would recommit this tax cut to com- It seems quite clear from what Alan is zero room for a consensus. I think mittee. Greenspan is saying, if we cut taxes I must say, as all of us here, I sup- that kind of intransigence is unaccept- now, the Fed will increase interest pose my reflex is to propose tax cuts, able because ultimately it will result rates soon thereafter, which would put not to oppose them. I was very active in no tax cut at all, and that is not in a drag on the economy, slow down busi- in support of the tax cuts we passed— the best interest of the American peo- ness investment, and probably lower just 2 years ago. I think sometimes we ple. We should not reject out of hand the stock market, and it would hit av- forget that in this debate. Just 2 years the possibility of developing a con- erage working Americans literally ago, I cosponsored the cut in the cap- sensus on this issue, and that is what where they live, driving up the cost of ital gains tax and supported so many of this proposal is all about. their mortgages, car payments, credit the incentives that the chairman of the This proposal is certainly similar to card bills, and student loans to the Finance Committee offered to increase ones that have been offered on the floor point where it would dwarf any tax savings in our country. I would wel- by the Senate Finance Committee and benefit most Americans would receive come the opportunity to vote for a bal- by Senator MOYNIHAN. So it is not a from this bill. question of substance because if you anced, thoughtfully crafted tax reduc- In other words, we would be robbing look at the various components of the tion package such as the one the Sen- Paul to pay—Paul, while simulta- tax cut package, they certainly exist in ators from Rhode Island and Louisiana neously robbing our economy of the dy- all of them. have offered today if I were convinced namism we have labored so hard to cre- It is a matter of size, and that is why we could afford it, if I were convinced ate. And to what purpose? None that I we decided that instead of the $792 bil- the money was there to support the tax have heard, except to return to the lion package offered by the Senate Fi- cut, or, in the alternative, if I thought, American people a surplus that is not nance Committee or the President’s as Chairman Greenspan has suggested, going to be there. that the economy needed it, needed to What we need now, I argue, is a little package of $300 billion, we would come be stimulated. more of the fiscal discipline and re- in the middle with $500 billion. That But the more I have looked at these sponsibility that helped bring this represents a consensus upon which I protections of a $1 trillion surplus over economy to the point of great growth think we can all agree. That represents the next decade, the more it looks to it is at now. less than 40 percent of the $1.1 trillion me like a Potemkin surplus—not a real I thank the Senator from Delaware, projected on-budget surplus over the one, a facade with nothing behind it be- and I yield the floor. next 10 years, less than 40 percent. cause it is based on projections of 2.4- The PRESIDING OFFICER. The Sen- It comes in the middle between the percent growth over the next 10 years, ator from Louisiana. President’s package and the Finance which may happen but would extend The PRESIDING OFFICER. The Sen- Committee’s package. I think that it is what is already the longest peacetime ator from Louisiana. eminently sensible, it is prudent, and expansion of our economy in history. It Mr. BREAUX. I yield 5 minutes to we have to err on the side of economic is possible, but I would not bank on it, the distinguished Senator from Maine. caution when it comes to how much we or at least I would not spend in tax The PRESIDING OFFICER. The Sen- are going to spend of the projected sur- cuts the profits of such unprecedented ator from Maine. pluses over the next 10 years because projected growth until I knew they Ms. SNOWE. I thank the Senator. those surpluses are just that, they are were in the bank. Mr. President, I congratulate Senators projections. Some have referred to Of course, both baselines, OMB’s and BREAUX, CHAFEE, JEFFORDS, and them as the hypothetical jackpot. CBO’s, assume cuts in spending that KERREY for reigniting the centrists on We have to be particularly cautious are massive and unsustainable. These an issue that certainly is important to about how much we intend to spend are cuts that few in either House would the American people. over the next 10 years from projected ever support and, in fact, are not sup- It is interesting that we are here surpluses. We want to save the addi- porting right now, as Congress simply today confronted with a major issue, tional $300 billion so we can look at exceeds the budget almost every day, and it is not surprising that various Medicare, so we can look at prescrip- exceeds the caps through transparent Members of this Senate, the House, and tion drug plans, so we can look at So- accounting gimmicks, calling excess the President have different positions cial Security, and all the other issues spending emergency spending and dou- on an issue of such significance. What contained within discretionary spend- ble counting when necessary. we have tried to do with the package ing that we think happen to be a pri- In other words, we do not have to that has been offered by Senator ority, or we can create a surplus re- wonder whether Congress over the next BREAUX and Senator CHAFEE is to serve. decade will be able to hold the spend- bridge the gap between what the Presi- The PRESIDING OFFICER. The Sen- ing line on which the surplus, which dent has offered, what the House has ator’s 5 minutes have expired. would fund these tax cuts, is contin- offered, and the package that has been Ms. SNOWE. I hope, Mr. President, gent because Congress is already prov- offered by Senator ROTH and the Sen- that Members of this body will give ing today that it cannot so control ate Finance Committee. We are trying very careful consideration to the com- itself. The result is that by passing a to bring the differences together to promise proposal we are offering be- major tax cut, paid for by a surplus preserve the viability of a tax cut for cause it keeps open the door of the tax that probably will not be there, we the American people. cut for the American people. S9696 CONGRESSIONAL RECORD — SENATE July 29, 1999 The PRESIDING OFFICER. The Sen- a new and very much needed prescrip- time before the year’s end both sides ator from Louisiana. tion drug benefit, leave room for some will come to reach an agreement that Mr. BREAUX. Mr. President, I in- reasonable, responsible new spending what we have offered on the floor is the quire as to whether the distinguished for programs, and give some strategic right approach and one which will chairman has additional time. We can relief to hard-working American fami- allow us to get something done with re- rotate. lies, families that are struggling every gard to this type of a tax cut and res- Mr. ROTH. I yield back the remain- day to put their children through ervation of funds to do what we need to der of my time. school, families who are struggling to do as a government. Mr. BREAUX. I yield 5 minutes to keep an elderly person at home with I hereby ask that my amendment at my distinguished colleague, Senator the added expense so they do not have the desk be withdrawn. LANDRIEU. to live alone or live in a nursing home The PRESIDING OFFICER. Without The PRESIDING OFFICER. The Sen- that perhaps is not appropriate for objection, it is so ordered. ator from Louisiana. them. The amendment (No. 1442) was with- Ms. LANDRIEU. I thank the Chair. There are many important parts of drawn. Mr. President, I rise to support my sen- this bipartisan plan that help average, Mr. MOYNIHAN addressed the Chair. ior colleague from Louisiana and thank hard-working families begin to be a The PRESIDING OFFICER. The Sen- him and Senator CHAFEE for bringing part of this new economy. ator from New York. us together and for bringing this meas- One of the things I want to mention Mr. MOYNIHAN. May I stress the ad- ure before the Senate and before the that is actually interesting but not a miration of this Senator, and I think American people, a measure that, in part of this plan, and I hope as it is many, for the case that the Senator my mind, is a very good starting point massaged and improved and perfected from Louisiana and the Senator from for where we need to be and on what we over the next weeks there can be some Rhode Island have made and their col- need to be focused. strategic tax relief to encourage low- leagues in the centrist coalition. It does a couple of things of which I income families to begin saving, just as I note the trenchant counsel of that am very proud and a couple of things we have the Roth IRA plan and the tra- philosopher from Bourbon Street: for which I believe I ran for the Senate ditional IRA plan. Those have really When to hold them, when to fold them. to try to do. One, it is very fiscally re- helped a lot of middle-income Ameri- I say, it is very clear that their time sponsible. It pays down a significant cans. will come again, sooner perhaps than portion of the publicly held debt and But today there are many Americans we know. gives tremendous benefits to the mar- who live in Louisiana who do not make With that, I yield 10 minutes to the ket and to our economy because of that enough money to set aside $2,000 a Senator from Massachusetts. savings approach. year. So there is a possibility, through Mr. CHAFEE addressed the Chair. It also sets aside a prudent amount of this tax proposal, that we could struc- Mr. MOYNIHAN. Forgive me, sir. I money, and under the leadership of my ture some tax relief to enable these withhold that. I think the Senator senior Senator, it enables us to not lower-income, hard-working Ameri- from Rhode Island wishes to speak. only throw more money at Medicare, cans, to begin savings accounts that The PRESIDING OFFICER. The Sen- which we need to do for prescription can promote their wealth, promote ator from Rhode Island. drugs, but it provides a floor or a their economic fortune, and help them Mr. CHAFEE. Just briefly, I con- framework for us to really put in some to participate in the new economy. gratulate my colleague, Senator systemic reforms if we could come to The PRESIDING OFFICER. The Sen- BREAUX, from Louisiana, for his pres- an agreement to strengthen a program ator’s 5 minutes have expired. entation and organization of this whole that is depended on by almost everyone Ms. LANDRIEU. If I could have 30 effort that we have had. I believe there in our Nation. seconds to wrap up. is going to come a time—not tomor- It also gives us a starting point and a So besides the program I have just row, not the day after but before long— proposal to reduce taxes, not for the described, there is family tax relief, in which this proposal, which he and I very rich, not for those who have al- savings and investments, education— and so many others have worked on, is ready benefited from this booming tax relief for small businesses; their going to be accepted by this body. I economy, but it gives us an oppor- No. 1 request to us is for some tax re- certainly hope so. tunity, through strategic tax cuts, to lief so they can continue to afford in- I thank Senator MOYNIHAN for the make it possible for more people to surance for themselves and small busi- kind comments he made about the ef- enjoy this new historic economic boom nesses throughout this country. There forts we have made. that we are experiencing. are many others—tax credits for the I thank the Chair. It does this in very strategic ways, renovation of historic homes, and some Mr. MOYNIHAN. Again, I emphasize and I will hit on a few in a moment. other things that create jobs, stir in- that this was a bipartisan effort, with Before I begin that point, I want to say vestment, and give people the tools Senator CHAFEE on the Republican that I have the greatest respect for the they need to participate in this new side. And I say to him, semper fi. Senators from Connecticut and par- economy. On that note, I yield to Senator JOHN ticularly my good friend, Senator JOE I thank my senior Senator. I am KERRY. LIEBERMAN, who just spoke. There is proud to be a part of this bipartisan ef- Mr. KERRY addressed the Chair. hardly a time I ever disagree with him fort. I ask unanimous consent to be The PRESIDING OFFICER. The Sen- on an issue of this magnitude, but I added as a cosponsor of the amend- ator from Massachusetts. have also looked at the projections un- ment. Mr. KERRY. I thank the distin- derlying the bipartisan plan of Senator The PRESIDING OFFICER. Without guished ranking member. BREAUX and Senator CHAFEE. objection, it is so ordered. Mr. President, I appreciate the hard I have learned through that review Mr. BREAUX. Mr. President, as a work and the thinking that went into that over the last 50 years, the average great political philosopher once said: the so-called centrist approach. I would rate of growth has been 3.3 percent. You have to know when to hold them like to associate myself with that This plan is based on a very conserv- and know when to fold them; you have thinking and with the reasonableness ative projection, I believe, of a 2.4-per- to know when to walk away and you that I think guides most of their ac- cent growth. I do not concede the point have to know when to run. tions. that these projections are off. I will I do not think this is the time to run But may I say, respectfully, that concede that on the other side, in or to walk away, but neither do I think something is in the air in Washington terms of the spending projections, we that either of the two parties at this that I think is clouding people’s think- are tight. But we have never, as Sen- time is supportive of the concept that ing a little bit, about where we are on ator BAYH pointed out, spent the infla- has been offered by our centrist coali- this whole tax bill. tionary standard. tion. I am all for giving a tax cut when There is room to pay down our debt, However, while I think that time you have the money to give as a tax provide for reform of Medicare, provide does not arrive yet today, I think some cut. But everybody here understands July 29, 1999 CONGRESSIONAL RECORD — SENATE S9697 some plain truths. Notwithstanding are based on, you are going to have a would argue we ought to do 500 or 300. those plain truths, the Senate has in 38-percent cut, or so, in all of the dis- The fact is, all of those figures are out front of it a $792 billion tax cut. cretionary budget. of sync with the reality of what we A moment ago we were talking about Tell me the year in which we have have in front of us. a $500 billion tax cut. The fact is that not increased defense spending. Tell me We don’t even show a real budget sur- most of the analysis that is reasonable, the year, particularly, that the major- plus until the year 2006. In the year dispassionate—and certainly not pie- ity party has not set out, as a goal, to 2006, assuming that you have spending in-the-sky sort of dreaming about the increase defense spending. But they did plus some little measure of inflation, future—suggests we have nothing near not even figure that into the level of the way we have traditionally, you a $1 trillion, let alone $3 trillion, sur- spending that we have here. have only $29 billion of surplus by the plus. This is the reality. If you keep the year 2006. That is the hard reality. Everyone here has accepted the fact current accounts at their current level, I hear my colleagues come to the that $2 trillion is going to go to pay plus inflation—and no one here has floor and say: We have the highest down the debt and protect Social Secu- said to America they are going to re- measure of taxation against our gross rity, and, indeed, a little bit for Medi- duce those accounts all across the domestic product that we have ever care, hopefully. But that set aside, board by X percentage—you are going had. What they don’t tell you is the whatever prospect there is for a surplus to spend an additional $595 billion. So reason it is so high is because so many is outside of that $2 trillion. The prob- you have to subtract that $595 billion people are cashing in on their capital lem is that the hard reality already from the so-called $1 trillion that has gains. We lowered the capital gains tells us an entirely different story from been set aside from the $3 trillion be- tax. They don’t tell you the capital that which Senators are acting on in cause we are protecting Social Secu- gains tax isn’t even counted in the voting on the size of the tax cut on rity with $2 trillion. measure of the gross domestic product. which we are voting. That leaves about $400 billion. But So you have a completely artificial set We are already breaking the caps. every year we have had an average of of numbers, when they come in and tell There are appropriations bills that ev- $80 billion of emergencies. Are people you the tax rate is up. erybody knows are being marked up in suggesting there are going to be no That is the way it is supposed to a fictitious manner with an under- emergencies next year, even though work. That is why we have a progres- standing that come September or Octo- every year we have had a budget there sive tax structure. When the economy ber there is going to be an agreement has been an emergency expenditure? does brilliantly, you are supposed to to change the caps because you cannot Just taking the average of $80 billion, get a little more money into the Gov- meet the appropriations bills without you will have an absolute, predictable ernment so that you have the ability changing the caps. additional $31 billion in Social Secu- to do the things that are important for We are already $30 billion-some over rity Administration costs. Those aren’t the long-term of our country. Recently, I had the pleasure of meet- the caps. We are doing it with the fic- counted into the Republican bill. You ing with a number of high-tech presi- tion of emergency spending. We are will have absolutely $178 billion of ad- dents. And to a person, these people, calling the census an emergency spend- ditional interest rates because of the who are fueling the engine of our pro- ing. money you are not paying down on the ductivity growth in America and cre- Everybody knows these games are debt. You will have to pay that inter- ating the high value-added jobs, will being played right now. Nevertheless, est. That is not calculated. That is an tell you they need an America that has the Senate is poised to act on this ficti- additional $178 billion. That leaves us a citizenry that is educated and capa- tious surplus. conceivably with this little red block, ble, that depends on investment. You I do not know one Senator who has not a trillion dollars, but this little red don’t measure the debt of this country gone back to their constituents and block, which might amount to $112 bil- by the figures that show up on debt. said: We’re going to cut veterans’ bene- lion or so, depending on what we do for You measure the debt of this country fits. We’re going to cut highways. prescription drugs, for Medicare, and a by the people who can’t access those We’re going to cut border guards. We’re lot of other issues facing America. high value-added jobs, who don’t have going to cut drug fighting. We’re going The real choice in front of the Senate child care and the ability to live with to cut the Coast Guard. Nobody is say- is considerably different than the fic- clean water and clean air and so forth. ing we are going to cut these things. tion we are being fed. I heard the dis- Mr. President, I think we are meas- But the absolute inescapable reality of tinguished ranking member yesterday uring things backwards, wrong. I think this budget is that unless you increase talk about the reality that we lived we are on a very dangerous track the spending of discretionary by some- through in the 1980s, the creation of which will have long-term implications thing reflecting inflation, you are fiscal crisis as a means of achieving for the full measure of the citizens of going to cut. ideological and political goals. I re- our country. I express that concern as I heard the Senator from Indiana say: spectfully suggest that what we are we come, sometime, to a vote on this What is it that says we’re going to go looking at is a form of Stockman 2. issue. out into the future increasing these That is what is going on. This is Stock- Mr. MOYNIHAN. Mr. President, Sen- budget accounts by inflation? The fact man 2. We are going to come in with a ator BINGAMAN has an amendment he is, we have done it every year. We do tax cut that has no money, that isn’t will offer. it. That is what happens. It gets more predictable, and we are going to create AMENDMENT NO. 1462 expensive. a new crisis in our Government, where (Purpose: To express the sense of the Senate The Government isn’t somehow ex- we are going to face a whole set of regarding investment in education) empt from the inflation figures and choices that a lot of people here will Mr. BINGAMAN. I appreciate the factors to which the rest of the econ- love because we know they hate those courtesy. omy is subject. Prices go up. Costs of particular expenditures. But they are Mr. President, there is an amend- contracts for the Government go up. expenditures that time and again, year ment that I believe has been filed. I Fuel costs go up. Insurance—whatever in and year out, our fellow citizens send it to the desk. it is. The fact is, we already know what have said they want us to make. And The PRESIDING OFFICER. The is happening to medical costs in the time and again, the Congress, when it clerk will report the amendment. country. Yet everyone knows we are has had that great clash with the The legislative assistant read as fol- not sufficiently laying out the amount President, has capitulated and made lows. of money that it is going to cost the them. The Senator from New Mexico [Mr. BINGA- Government to do its business. Not So this is a remarkable new kind of MAN] proposes an amendment numbered 1462. withstanding that, we are poised to thinking, where if one big mistake is a Mr. BINGAMAN. Mr. President, I ask carve out, to fix in concrete a measure mistake, we are going to come in and unanimous consent that reading of the of give-back that predicates that if you say we will make it a lesser mistake, amendment be dispensed with. go down that road and you freeze Gov- but it is still somehow better thinking. The PRESIDING OFFICER. Without ernment at the level that the figures So instead of $791 billion, some people objection, it is so ordered. S9698 CONGRESSIONAL RECORD — SENATE July 29, 1999 The amendment is as follows: is accepted as written, Congress must position, to let the surpluses run and On page 371, between lines 16 and 17, insert cut discretionary spending by more let’s get our fiscal house in order. the following: than $775 billion over the next 10 years. I don’t agree with that position. I be- SEC. ll. SENSE OF THE SENATE REGARDING IN- When we say discretionary spending, of lieve there are some areas in our Fed- VESTMENT IN EDUCATION. course, we are talking about domestic eral budget where we should increase (a) FINDINGS.—The Senate finds the fol- discretionary spending, which includes spending. Education is the first pri- lowing: education, but we are also talking ority, as I see it. But if we were to take (1) The Republican tax plan requires cuts about national defense, what we spend the Republican plan as it is proposed, in discretionary spending of $775,000,000,000 on our military. it would mean that 430,000 of the 835,000 over the next 10 years. children who would otherwise be served (2) If defense programs are funded at the If we say the portion of discretionary level requested by the President, funding for spending that is spent on our military by the Head Start program would lose domestic programs, including those pro- is likely to be funded at the level re- services by the time we get to the year viding funds for public schools, will have to quested by the Joint Chiefs of Staff, 2009. It would mean that more than 5.9 be cut by at least 38 percent by 2009. which is very likely—in fact, we usu- million of the 14.6 million children who (3) Such cuts in funding for public schools ally do better than the Joint Chiefs’ re- live in high-poverty communities would deny— quest—then domestic programs have to would lose essential education services (A) access to critical early education serv- be cut 38 percent. By those ‘‘domestic under title I. The title I program is the ices to 430,000 of the 835,000 young children largest education program we fund who would otherwise be served by Head Start programs,’’ in this amendment I am talking about education. If these cuts here in Washington. It would mean in fiscal year 2009; that 480,000 of the 1 million students (B) services to 5,900,000 children under the are spread across the board, it would who currently are served by the Read- program for disadvantaged children under result in very substantial reductions in title I of the Elementary and Secondary Edu- current educational programs. ing Excellence Program would lose the 1 opportunity to learn and to have that cation Act of 1965, almost ⁄2 of those who Let me show to my colleagues a would otherwise be served; chart that tries to make the point. I additional help by the time they com- (C) access to Reading Excellence programs think it makes it pretty well. plete the third grade. It also means to 480,000 children, making those children It shows with this red line, starting that the chance of increasing the Fed- less likely to reach the goal of being able to eral share of the cost of the Individuals read by the end of the third grade; and in the year 2000 and going to the year 2009, we are spending nearly $34 billion With Disabilities Education Act, (D) the opportunity to learn in smaller IDEA—the line item that we try to classes in the earlier grades to 1,000,000 chil- on education in the Federal budget. dren. That includes what we spend on edu- fund each year—the stated goal of (4) If discretionary cuts are applied across cation through the Education Depart- many in this body has been that we the board, funding under the Individuals ment but also Head Start. We have in- should at least go to 40 percent of what With Disabilities Education Act (IDEA) cluded Head Start because we consider it costs to implement IDEA. But that would be cut by $3,400,000,000 by the year that a program that assists greatly in would be clearly impossible under what 2009, resulting in a reduction in the Federal I understand the Republican tax bill is preparing students for school. So we share of funding, rather than the increase in to provide. Instead, we would be forced are spending a little below $34 billion funding requested by school boards and ad- to cut special education by $3.4 billion this year. ministrators across the Nation. by the time we get to the 10th year of (5) If the Federal share under IDEA is in- If you take the Republican plan, as I creased from its current level of 10 percent, understand it, and take the logical as- the Tax Code. Pell grants, which currently benefit then other education programs would experi- sumption that we are going to have the nearly 4 million students—if we assume ence even deeper reductions, denying more kind of cut in domestic programs we we are going to continue to provide a children access to services. have to have in order to get enough (6) The Pell grant, which benefits nearly grant to 4 million students, then you room for this size tax cut, then you see 4,000,000 students, would have the maximum have to slash that from $3,850 per year, grant level reduced to $2175, from the current that go from $34 billion down to a little which is today’s level, down to $2,175 by level of $3850. over $19 billion by the year 2009. the year 2009. Nearly 500,000 disadvan- An education freeze, of course, would (7) Such a level in Pell grants would be the taged students who need extra guid- lowest level since 1987, and would deny low keep it right at 34 billion, but that ance and support through the TRIO and middle income students critical finan- would not make any provision for in- Program and the GEAR UP Program cial aid, increasing the cost of attending col- flation. What we are doing in this lege. would also lose that extra help. amendment is saying that the Senate In my home State, these statistics (8) Nearly 500,000 students would be denied should go on record as requesting that the opportunity to work their way through could be brought down to a very con- college with the help of the work-study pro- the tax cut be reduced by $132 billion so crete level. One example would be Head gram. that we have room not only to main- Start. We have about 8,000 young peo- (9) Nearly 500,000 disadvantaged students tain Federal funding for education ple in our Head Start Program in my would be denied extra help in preparing for where it is today but also to allow it to State today, which is about half of college through the TRIO and Gear-up pro- increase as inflation increases. what we should have; that is, half of grams. The Senator from Massachusetts those who are eligible. We would have (b) SENSE OF THE SENATE.—It is the sense made a very good point a few minutes about 3,000 fewer if this tax bill were of the Senate that $132 million should be ago: The cost of buying services, of shifted from tax breaks that disproportion- agreed to. ately benefit upper income taxpayers to sus- paying utility bills, of doing every- I hope very much that we can get a tain our investment in public education and thing goes up for the government as it strong vote of support. I believe the prepare children for the 21st Century, includ- does for everyone else. It certainly goes American people do not want to see a ing our investment in programs such as up for the schools. tax cut adopted at the expense of con- IDEA special education, Pell grant, and Head Now, we have not built into this tinued support for education as we go Start, and to fully fund the class size initia- amendment, I should point out, any into this new century. Everyone real- tive. provision for the fact that we are going izes that our future depends upon how Mr. BINGAMAN. Mr. President, this to have tens and hundreds of thousands well we can prepare young people for amendment has a very simple purpose. of new children coming into our school the opportunities they will have in The purpose is to protect the current system in the next 10 years, and we are their lives. It is not responsible for us investment that we are making in edu- not proposing increases in education to be proposing tax cuts that are going cation. funding to account for that. We should to prevent us from at least maintain- The amendment seeks to decrease be, quite frankly, but we are not. We ing the level of effort we have today in the tax breaks that disproportionately are also not proposing increases for education. That is the difference. That benefit upper-income taxpayers in any new education programs. I have is what we are trying to fix in this order to sustain the current level of been hearing Mr. Greenspan’s testi- amendment. I hope very much that we funding for education with an increase, mony, as I am sure all of my colleagues will have a strong vote in favor of it. a small increase for inflation. If the have, and he says: Start no new spend- Before I yield the floor to my col- Republican tax bill we are considering ing and cut no taxes. That is his basic leagues to speak in favor, I hope, of July 29, 1999 CONGRESSIONAL RECORD — SENATE S9699 this amendment, let me also say a cou- ROCKEFELLER and I will make a motion we need to go back and correct the dra- ple of words about another motion I am which protects our senior citizens in conian cuts of the Balanced Budget Act going to propose and which will be the wake of the Balanced Budget Act of of 1997. voted on when we get into the long list 1997. I would like to talk about this but We also have a situation where we of motions. It is a motion to do some- I also rise to support the amendment have skilled nursing facilities that are thing which is very modest, as this offered by the Senator from New Mex- teeter-tottering on closing. Some amendment is very modest. This only ico, Senator BINGAMAN. As usual, his might say: Oh, that is a profit-making involves $132 billion. We have been amendment is well thought out. It industry. Stella Morris isn’t profit talking about trillions for the last 2 brings intellectual rigor, sound public making. Hebrew Home isn’t profit days. This other motion would be to policy, and responsible fiscal policy to making. But I will tell you they will have the bill go back to the Finance this debate, and really meets a compel- now have to find funds through private, Committee with instructions to report ling human need. philanthropic dollars even though the back with an amendment providing How I wish the rest of this debate re- Government should be providing funds. that an additional $100 billion be ap- flected the Bingaman amendment, be- We have people in my own home plied to debt reduction. That is a small cause I believe we have embarked upon State who are being turned away from thing to ask. I think of it more as a a debate on these tax cuts which are, nursing homes because they are so tithe than anything else. indeed, reckless. I believe the other sick, they have such complicated ill- If we are talking about nearly $800 party is practicing very reckless eco- nesses, that the nursing home can’t billion in tax reduction over the 10 nomics. First of all, we don’t really take them because of the skimpy, spar- years, we ought to say let’s go back have a surplus; we have a promissory tan reimbursement policies that are and at least take $100 billion of that, note of a surplus. No. 2, we are looking the result of the Balanced Budget Act which is surplus that we can antici- at an area where we are not sure what of 1997. pate, and commit that to debt reduc- the projections will be, and we need to Some of those spartan reimburse- tion. That will be another item that I be prudent. Therefore, we should use ments went to Medicare HMOs. I al- believe is very meritorious. I think all the taxpayers’ dollars to meet compel- ways thought that Medicare HMOs for Senators should support it. I think it is ling human needs, national security, seniors were a risky proposition be- the responsible thing to do. I do it be- and stay the course in terms of our re- cause our old-timers are sick. They cause, in my State, whereas there is search and development. need complicated prescription drugs. I disagreement about new spending pro- While we are in the midst of debating thought that these HMOs that were es- grams and whether we should fund bloated tax cuts, we have marines who sentially making a profit may have those, and where there is disagreement are on food stamps. I don’t see how we some problems. However, these HMOs about a lot of other items we are debat- can meet our national security com- also provide seniors with extra health ing, there is a strong consensus that we mitment, do a tax cut, and have ma- benefits that they cannot get in reg- need to make a downpayment on debt rines on food stamps. The marines say ular Medicare, oftentimes for no extra reduction as part of this reconciliation ‘‘semper fi’’—‘‘always faithful.’’ They money. bill. This reconciliation bill is a blue- are faithful to the United States and Now, I will tell you that the non- print for where we intend to go in the we have to be always faithful to the profit HMO in my own State—Blue next 10 years. Marine Corps and to the military. Cross Blue Shield—is pulling out of 17 I hope the blueprint we finally adopt Right over there in Quantico, they are rural counties in my State, as of 3 shows that we intend to maintain fund- getting food stamps and they run con- weeks ago in 17 counties, and 18,000 ing for education, at least at current signment shops. That is not right. people will lose their Medicare + levels. I will be arguing each year I The Senator from New Mexico offers Choice HMO. Why? Because Blue Cross serve in the Senate that we should be this excellent amendment that says: Blue Shield is losing $5 million, and increasing funding for education, not Stay the course on education. they can’t afford to provide services. cutting. We should at least maintain When I travel in my own State, peo- Dear colleagues, I ask you to reexam- the current level. I also hope we will ple don’t come up to me and say: I have ine the premise under which we are op- adopt a roadmap for the next 10 years a marriage penalty. They say: I am erating. that contemplates substantial debt re- married, I have children, and I want No. 1, the surplus is not yet avail- duction. And I will propose this other them to have the same kind of good able. It is a promissory note. Let us motion, which we will vote on later in education I did. Barb, make sure we move with prudence. Let us meet com- the debate, on that subject. have sound public schools, well-trained pelling human needs. Let us meet our I see I have some colleagues who wish teachers, and structured afterschool national security responsibility and to speak. I know the Senator from activities. That is what the Bingaman stay the course in research and devel- Maryland does. Let me yield her 10 amendment does—it lets reserve funds opment. minutes to speak on this, or the bill, stay the course for our children. Let’s support the Bingaman amend- whichever she prefers. While we are looking at Senator ment on education. Let’s deal with the The PRESIDING OFFICER. The Sen- BINGAMAN’s amendment, there is an- issues that came from the Balanced ator from Maryland is recognized. other compelling human need that Budget Act of 1997. Let’s make sure our Ms. MIKULSKI. I thank the Chair, needs to be addressed. We have to re- marines aren’t on food stamps. and I thank the Senator from New serve certain funds to correct the dra- Let’s make sure that those on food Mexico. conian effects of the Balanced Budget Mr. REID. Will the Senator yield for stamps and their children have access Act of 1997 on Medicare. The motion a unanimous consent request? to public education so that in the next that I am cosponsoring will provide $20 Ms. MIKULSKI. Yes. generation they won’t have to be on Mr. REID. Mr. President, it has been billion to fix many of the problems in food stamps. cleared, as I understand it, on the Re- Medicare reimbursement. My col- Then we truly have been responsible. publican side and over here that all leagues might recall that in 1997 we We are then getting our country ready votes will occur when all time has been passed a Balanced Budget Act. We were for the millennium. used on whatever amendments have going to save money on Medicare. But I would like to say one final word in been offered up to that time. we went too far in our cuts. HCFA went closing. I thank the Senator from New Mr. ROTH. Mr. President, it was too far in its regulations. Guess where Mexico for his strong advocacy for vet- brought up to me, but we haven’t had a we find ourselves? In my own home erans, and particularly for veterans chance to get it cleared. State, 34 home health care agencies with disabilities. The Senator knows Mr. REID. Mr President, perhaps we have closed. I have 10 public home that we have an 18-month backlog. He will offer the request in a few minutes. health agencies, primarily in rural has spoken to me about this. The PRESIDING OFFICER. The Sen- counties, some who travel on snowmo- In his State, they have billboards ator from Maryland. biles to treat home-bound patients, and complaining about the VA backlog. Ms. MIKULSKI. Mr. President, later eight have closed because of the budget I bring to the Senator’s attention today Senator JOHN KERRY, Senator cuts. There is a terrible problem, and that in VA–HUD appropriations, we S9700 CONGRESSIONAL RECORD — SENATE July 29, 1999 have under this budget allocation a 10- spending as we have proposed in the Members say we would never want to percent cut. We will not be able to deal 1997 balanced budget amendment. do, and that is renege once again on with that backlog. These discretionary caps are already our commitment to special education. In fact, while we are opening tax constraining what we do. In fact, we I don’t know how many times I have loopholes, we might even be closing have already violated these caps. As been on the floor listening particularly veteran hospitals. the Senator from Massachusetts sug- to my colleagues on the other side who I yield the floor. gested, we will probably in October have been talking about how we have I thank the Senator. somehow formally or informally avoid to put more money into IDEA, the In- Mr. BINGAMAN. Mr. President, I these caps. dividuals with Disability Education thank the Senator from Maryland for But the premise of this supposed tril- Act, how we have imposed programs on her very insightful words and her kind lion-dollar surplus is that we will live localities promising robust spending, comments about me but also for her within these caps. You can see from and we have never delivered. If we have leadership on these key issues. Senator BINGAMAN’s presentation that not delivered on IDEA yet, if these tax PRIVILEGE OF THE FLOOR if we do not do our investment, edu- proposals pass, we will never have a I ask unanimous consent that Kath- cation will collapse. We will find our- chance to deliver on our contribution ryn Olsen Senator and Gabe Mandujano selves underinvesting in education as to local school systems. of my staff be granted floor privileges we have in so many other programs. When we move to the area of higher during the pendency of this bill. The reality is, as was suggested be- education and Pell grants, work-study The PRESIDING OFFICER (Mr. BEN- fore, that if we, in fact, simply fund the programs, the new LEAP program, NETT). Without objection, it is so or- President’s proposal by the year 2009, which is an outgrowth of the State dered. we will be spending 38 percent in do- Student Center Grant Program, all of Mr. BINGAMAN. Mr. President, I mestic discretionary spending. There is these provide opportunities for Ameri- yield 10 minutes to the Senator from no way that we can do that. Frankly, cans to educate themselves beyond Rhode Island, Senator REED. the political reality is that there is no high school. We all recognize that The PRESIDING OFFICER. The Sen- way we will do that. might be the most critical issue we ator from Rhode Island. We have to recognize that we will be face as a nation—educating our citi- Mr. REED. Thank you, Mr. Presi- investing in these programs. We have zens to enable them to assume chal- dent. I thank the Senator from New to recognize, as Senator BINGAMAN has lenging roles in the next century. Mexico for yielding the time but also said, that one of our first priorities is Yet we dramatically cut these pro- for his farsightedness. He recognizes, as to continue to invest in education. grams, denying opportunities to thou- the American people recognize, that Looking at these Republican pro- sands and thousands of Americans. We the key to our future is investing in posals, I am reminded of what hap- say to them again: This is not the land education. His amendment would pre- pened in the early 1980s. George Bush, of opportunity; this is the land of ad- cisely do that. It would sustain our when he was campaigning against vantage and affluence. Anyone lucky education investment at least at the President Reagan, described his eco- enough to pay for college with their rate of inflation. nomics as ‘‘voodoo economics.’’ It own resources can go but don’t look to We are here debating what to do with turned out to be that way. The supply the Government to provide the kind of a surplus. This debate is a direct result side theories of cutting taxes will stim- help provided in the last several years. of some very difficult choices we made ulate the economy, pay for themselves, All of these cuts lead Members to ask starting in 1993 and continuing for the and lead to surpluses proved dan- a very simple question for the working last several years. We now have before gerously in error during the 1980s. families of Rhode Island, for the work- us a supposed $3 trillion surplus. But Perhaps what we are talking about ing families of New Mexico, for the we all recognize and agree that $2 tril- today when we look at these Repub- working families across this country, lion of that is the Social Security ac- lican proposals is ‘‘de ja voodoo eco- when they lose the Pell grants or see count. We are in various ways recog- nomics.’’ The theory is that we will re- the urban school systems getting less nizing that we don’t want to disturb turn to the same kind of deficits, the and less support and local property those accounts. So we are really talk- same kind of economic instability that taxes going up: are they better off with ing about roughly $1 trillion, or $965 plagued us through the late 1980s and whatever tax cut they receive than billion. into the early 1990s until we did take these proposed programs? I think not. As the Senator from Massachusetts some difficult votes in 1993. One other aspect of the Republican so eloquently pointed out and so accu- What Senator BINGAMAN is saying is proposal is a terribly distorted benefit rately pointed out, within that surplus let’s recognize the reality. Let’s recog- that goes to the very wealthy at the we have already made significant com- nize that we have to fund educational expense of middle- and low-income mitments. programs at least at the level of infla- America. Our constituents know edu- One of the problems with the pro- tion. If we do that, we will have to in- cation is the most important aspect posals that have been made by the Re- vest at least about $132 billion. facing our society. They want Congress publicans—the almost $800 billion tax That is what we should be doing. If to continue to support families. They cut, or the $500 billion tax cut—is that we don’t do that, we are going to lose want precisely what the Bingaman edu- the assumptions they are using have to out tremendously in the title I pro- cation amendment does. I believe if we be seriously questioned. They are theo- grams—a Federal program that pro- listen to those people who sent us here, retical assumptions, first, that we will vides assistance and support for low-in- they will say vote for this amendment. enjoy the same kind of economic come students. Frankly, we understand They will say reject this deja voodoo growth over the next 10 years that we the crisis in urban and rural education economics that is underlying the pro- have enjoyed recently. that this money is so effective in deal- posals by the majority party. In fact, I As Chairman Greenspan pointed out ing with. Without it, urban systems hope we respond to that clarion call in his appearance both before the Sen- and rural systems would be situated from our constituents. ate Banking Committee and the com- even worse. Without it, we would be I commend and thank the Senator parable committee in the other body, fostering and contributing to two sepa- from New Mexico for his efforts and for the business cycle has not been re- rate and terribly unequal societies. We his time. pealed. We will run into, particularly have to keep our commitment to these I yield the floor. over a 10-year time span, situations in young people. Mr. WELLSTONE. Mr. President, I which projections do not provide the We would also lose opportunities to want to speak briefly about my support resources that we think of today. reform education, for professional de- for Senator BINGAMAN’s amendment, But the second assumption and the velopment programs, for opportunities which urges restoration of a portion of one that is of critical importance to to have smaller class sizes, for opportu- the Republican cuts in several key edu- Senator BINGAMAN’s amendment is the nities to go ahead and fix crumbling cation programs. There is nothing unrealistic assumption that we will school buildings throughout the coun- more important to me than doing the continue these caps on discretionary try. We would do something that all absolute best I can—and encouraging July 29, 1999 CONGRESSIONAL RECORD — SENATE S9701 my colleagues on both sides of the aisle gram, denying them the extra help school does not permit the separation to do the same—to push, push as hard they need to read well by the 4th grade. of middle level and senor high school as we possibly can to re-order our Mr. President, allow me to share level students. The list is extensive. I spending priorities so that they better some examples from my own experi- know we’ve heard it all before—the reflect the real concerns and cir- ence. Minnesota, like most states, re- crumbling schools, the lousy physical cumstances of the lives of those whom ceives only a portion of the Title I environments, and the resulting dis- we represent who are trying to raise money it desperately needs as it is. Our tractions that once again detract from and educate their kids, or send them to current allocation is about $88 million. our children’s ability to learn. The college. If fully funded, we would receive ap- question is ‘‘When are we going to Our goal should to be approve a tax proximately a quarter-billion dollars wake up and actually do something plan that will send a clear, unmistak- and over a hundred million additional about it?’’ able message that this Congress cares dollars for concentration grants, ac- Mr. President, I could go on but the about education, that this Congress cording to the Minnesota Department time for talk is long past. The time for wants to ensure sure that children of Children, Families and Learning. pondering our next move is over. The come to school prepared to learn and Well, I suppose that’s a start. A cut of time to move and to move deftly is at are given every possible opportunity to even half a percent on a program like hand. My colleagues’ proposal urges a grow, to succeed, to excel. It is time to Title I would be disastrous. But I can major transfer of funding that goes end photo op politics. It is easy for all see it coming. straight to the heart of where our pri- of us to get our pictures taken with One-fourth of Minnesota’s Title I dol- orities ought to be. It calls for a real young children at schools, but the lars goes to only two cities, either to investment in real people, people who question is, have we done enough? The Minneapolis or St. Paul, because both truly deserve it. Smaller class sizes. answer: we have not. I believe my col- cities have high concentrations of pov- Access to quality education at an early leagues’ proposal, modest as it is, erty. How can we expect to eliminate age. A fairer share for individuals with moves us in the right direction. I know the learning gaps among our children disabilities. Help for low and middle in- there are technical reasons why we when so many others are left without come students who deserve every op- couldn’t actually directly transfer opportunities or options? portunity to attend college. funding for this year in the amend- Right now elementary and secondary These are some of the most funda- ment—an approach which I wanted to education receive on average about mental elements in a strong education take—but at least this amendment eight percent of its funding from the system that values all its children, sends the right signal regarding a re- federal government. It is imperative leaving none of them behind. What is ordering of our priorities. that we take bold steps to pass a tax the Republican alternative? Denying I consider this a matter of national measure that will, at the absolute our children access to the very things security issue, a national priority. least, serve to move us closer to pro- that would prepare them for healthy, Making sure that the young are ready viding the resources so badly needed in happy, productive lives in the 21st cen- to learn is good for our democracy, or so many areas of education. But it tury. I urge my colleagues to support economy, and our national defense. it seems clear we will not do that here. this amendment. is our responsibility to make sure that Another area that I believe is a vital Mr. KENNEDY. Mr. President, we teachers are qualified and equipped component of our national infrastruc- should be doing all we can to help im- with the right tools, and that the op- ture is our schools. That is why I am prove public schools to ensure a bright- portunities for learning will be there in an original cosponsor of Senator er future for children and the nation. the afternoons long after the last class Robb’s school modernization effort We should help communities improve has been dismissed. I cannot say force- that we will hear more about later. I teacher training and teacher recruit- fully enough: this must be accom- think it too is a step in the right direc- ment; reduce class sizes, especially in plished not at the expense or detriment tion and I honestly believe it’s another the early grades; expand after-school of our children but to their collective sure way to say to our kids, ‘‘You mat- programs; build new schools, and mod- advantage. ter. Your schools matter. Your future ernize crumbling and overcrowded I’m behind the proposal to shift these matters.’’ In Minnesota alone, there is schools; provide up-to-date-tech- excessive tax breaks to a plan that a one-point-five billion dollar unmet nologies in every classroom; and make would fully fund the initiative to hire need for school construction. Our aver- college more accessible and affordable 100,000 qualified teachers to reduce age school is over 50 years old. Eighty- to all families across the country. class sizes. It’s no mystery that small- five percent of Minnesota schools re- But, the Republicans insist on an ex- er class sizes translate into greater op- port a need to upgrade or rebuild their cessive tax cut at the expense of edu- portunities for children to get more in- building just to achieve ‘‘good’’ overall cation and children. We should be mak- dividualized attention. condition. Sixty-six percent report at ing a strong investment in education— We’ve heard that the size of the Re- least one unsatisfactory environmental not undermining education. publican tax bill is such that it will re- factor like air quality, ventilation, The Republican budget denies 5.9 mil- quire significant cuts in crucial edu- acoustics, heating, or lighting. lion children in high-poverty commu- cation programs. We’ve heard that if My staff and I have visited nearly a nities the extra support they need to defense is funded at the level requested hundred schools over the past eight meet basic academic standards through by the president, we should anticipate months and we’ve heard stories of pa- the Title I program, including 81,547 at 38 percent ($180 billion) cut in do- thetic conditions throughout the state. children in Massachusetts. It denies mestic discretionary spending. That is I know many of you have heard these 480,000 children the assistance they the worst possible news for the mil- stories in your own states. In my state, need to learn to read well by the 4th lions of people who rely on vital initia- for example, Two Harbors High School, grade through the Reading Excellence tives like Title I, Head Start, and the which is on the north shore of Lake Su- Act. It denies more than a million chil- Reading Excellence program. Abso- perior is representative. Two Harbors dren the opportunity to learn in small- lutely ludicrous. is a thriving community, but each day er classes where they will get the indi- For instance, under this proposal: its students must enter a facility that vidual attention they need to succeed Nearly 6 million disadvantaged chil- can’t meet some of their most basic in school. It denies 430,000 children the dren would lose Title I services that educational needs. Three separate stud- Head Start services that help them help them meet basic academic needs; ies were conducted to assess Two Har- come to school ready to learn. It denies 270,000 summer jobs and training oppor- bors’ facilities. The studies identified 215,000 students the after-school and tunities would be eliminated for low- twenty-seven critical needs that are summer school programs they need to income young people; 375,000 children characteristic of so many of our stay off the streets and out of trouble. would be denied Head Start services schools. The original facility is sixty It denies 500,000 disadvantaged students that help them come to school ready- years old. The facility does not comply the extra guidance and support they to-learn; and 549,000 children would be with the Americans with Disabilities need to prepare for college through the cut from the Reading Excellence pro- Act. There are no teacher offices. The TRIO and GEAR-UP programs. It cuts S9702 CONGRESSIONAL RECORD — SENATE July 29, 1999 IDEA by $3.4 billion, resulting in a re- Another high priority is to meet the man amendment. As I read the amend- duction in the federal share of the need for more after-school activities. ment, it suggests we shift $132 billion funding, rather than the increase re- Each day, 5 million children, many as from tax breaks that disproportion- quested by school boards and adminis- young as 8 or 9 years old, are left home ately benefit upper-income taxpayers trators across the country. alone after school. Juvenile delin- to sustain our investment in public The Republican assault on education quency peaks in the hours between 3 education and prepare children for the doesn’t stop with young children—it af- p.m. and 8 p.m. Children left unsuper- 21st century, including our investment fects college students, too. It makes vised are more likely to be involved in programs such as IDEA, special edu- college less affordable for nearly 4 mil- anti-social activities and destructive cation, Pell grant, Head Start, and to lion low- and middle-income students— patterns of behavior. fully fund the class size initiative. by slashing the maximum Pell grant to We need to do more—not less—to I will comment on every aspect of $2,175, the lowest level since 1987. It de- meet workers’ needs for additional job that particular statement. This amend- nies 500,000 students the opportunity to training opportunities, and to meet ment presents a false choice. It sug- work their way through college. families’ needs for affordable college gests to my colleagues and to the Education for the nation’s children education. The nation’s workers re- American people Members either have must be a higher priority than tax quire strong skills to compete in the to be for tax relief for the American breaks for the rich. The American peo- new global economy. According to the people or to be for public education, ple tell us that improving public Bureau of Labor Statistics, 42 percent but Members can’t be for both. If Mem- schools is one of their top priorities. of all jobs created between 1996–2006 bers really support public education, They support reducing class sizes. They will require education beyond high then they will want to shift $132 billion support after-school programs to help school. out of the suggested tax relief and put children learn, and to reduce juvenile Education is the key to future earn- it into various aspects of public edu- crime. They agree that every class- ing power. A college graduate earns al- cation. That is a false choice. room should have a well-qualified most twice as much as a high school It proves one thing conclusively, the teacher. They believe technology graduate earns, and close to three concern many Members have had as we should be part of the classroom. They times what a high school dropout hear the arguments on the other side believe that all children should have earns. as they repeatedly say: We shouldn’t the opportunity to meet high standards Those who complete a post-secondary give tax relief to the American people of achievement. They want us to make vocational degree or certificate are because we need to pay down the na- college more accessible and affordable. more likely to be employed than those tional debt. Instead of offering new tax breaks for who do not pursue post-secondary edu- We have suggested it won’t ever go to the wealthy, Congress should be ad- cation. But the average student debt is pay down the national debt but any dressing the priority education needs skyrocketing. In 1995–96, the average left will immediately be used for more of children and families across the debt for undergraduates who borrowed spending. Before the ink is even dry country—and help all children get a was almost $10,000, an increase of 24 from the passage of this tax relief bill, good education. percent just since 1992–93. For grad- the proposals are coming forth in a tor- Overcrowded classrooms undermine uates of four-year schools, the average rent as to how we should spend the $792 discipline and decrease student morale. debt was $12,000. In the 1990s, students billion proposed tax relief package for Students in small classes in the early have borrowed more in student loans the American people. grades make more rapid progress than than in the three preceding decades If we do not pass the $792 billion tax students in larger classes. The benefits combined. relief, that money will not go to paying are greatest for low-achieving, minor- The time is now to do all we can to down the national debt. It will, as al- ity, and low-income children. Smaller improve education across the country. ready suggested in the speeches on the classes also enable teachers to identify The time is now to meet our commit- other side in the last few minutes, im- and work effectively with students who ment to help communities reduce class mediately go into more spending. have learning disabilities, and reduce size, so that students get the individual IDEA funding is an important issue the need for special education in later attention they need. for school districts across the Nation. grades. The time is now to expand after- It is important in Arkansas but not an The nation’s students deserve mod- school opportunities, so that construc- issue to be addressed by reducing the ern schools with world-class teachers. tive alternatives are available to stu- amount of hard-earned dollars that are But too many students in too many dents. returned to American taxpayers. The time is now to provide greater schools in too many communities In addition, the Class Size Reduction resources to modernize and expand across the country fail to achieve that Program is only in its first year. It has schools to meet the urgent need for up- standard. The latest international sur- not even been authorized. It was first to-date facilities. vey of math and science achievement included in last year’s omnibus appro- The time is now to expand support confirms the urgent need to raise priations bill and is being considered for IDEA, so that more children with standards of performance for schools, during this year’s reauthorization of disabilities receive a high-quality edu- teachers, and students alike. It is the Elementary and Secondary Edu- cation. shameful that America’s twelfth grad- The time is now to provide better cation Act. That is where it should be ers ranked among the lowest of the 22 training for current and new teachers, considered. We should not be setting nations participating in the inter- so that they are well-prepared to teach aside funds for a program that has national survey of math and science. to high standards. never been authorized and has, quite The teacher shortage has forced The time is now to increase funding frankly, done very little right now in many school districts to hire for critical programs to raise academic reducing class size across the country. uncertified teachers, or ask certified standards for all children. The Class Size Reduction Program teachers to teach outside their area of The time is now to make college and already forces too many regulations on expertise. Each year, more than 50,000 job training more accessible and af- to school districts. Many States have under-prepared teachers enter the fordable for all students. already implemented class size reduc- classroom. One in four new teachers I urge my colleagues to support Sen- tion programs at a level of 19 or 20 stu- does not meet state certification re- ator BINGAMAN’s Sense of the Senate dents per year. The Federal class size quirements. Twelve percent of new commitment to support increased fund- program mandates a ratio of 18 stu- teachers have had no teacher training ing for education. Now is the time to dents for every teacher. This forces at all. Students in inner-city schools do what it takes to give every child a States to slightly alter their State have only a 50% chance of being taught good education. plan to receive any Federal funding. by a qualified science or math teacher. Mr. ROTH. I yield to the Senator Many school districts in my home In Massachusetts, 30% of teachers in from Arkansas. State have chosen not to participate in high-poverty schools do not even have Mr. HUTCHINSON. Mr. President, I the Class Size Reduction Program be- a minor degree in their field. rise in strong opposition to the Binga- cause of the excessive regulations that July 29, 1999 CONGRESSIONAL RECORD — SENATE S9703 govern the use of funds. Any school dis- surplus for this obligation over the much relief we can provide the Amer- trict that does not receive enough next 10 years. ican people. It is a debate over philos- funds to hire a new teacher must form This is a wrongheaded amendment, ophy. It is a debate whether your faith a consortium in order to do so. and it is the wrong place to do this. is in Government and your faith is in Given the fact in my home State of But it certainly proves that this $792 Washington and your faith is in more Arkansas there are 311 school districts, billion will not go to debt reduction. It taxes and central control, or whether 167 school districts, 54 percent will be will go to extensive additional spend- your faith is in the people of this coun- forced to form a consortium even to ing programs. try. We will do well to put our faith in hire a single teacher because their allo- I could not vote for this proposed the people and return that which be- cations are less than $20,000. Some amendment of the distinguished Sen- longs to them in passing the Roth tax school districts, such as Randolph ator from New Mexico, apart from the cut bill. County, report they cannot form a con- $132 billion that it suggests we take The PRESIDING OFFICER. The time sortium and they share a teacher with- away from tax relief, because it im- of the Senator has expired. in the consortium because of geo- properly characterizes the Republican Mr. HUTCHINSON. I thank the chair- graphic reasons. tax relief package by saying it dis- man for yielding me time. Class size reduction has not proven proportionately benefits upper-income Mr. BINGAMAN. Mr. President, I to be effective unless class size is sig- taxpayers. I suggest this is one of the yield 10 minutes to the distinguished nificantly reduced to 12 or 13 students, great myths being perpetrated about Senator from Massachusetts. which is not even envisioned in the Senator ROTH’s tax relief package that The PRESIDING OFFICER. The Sen- President’s Class Size Reduction Pro- has been produced by the Finance Com- ator from Massachusetts. gram. mittee. Mr. KERRY. Mr. President, I rise Class size has been reduced signifi- This proposal will reduce the lowest also in support of the amendment of cantly over the past 30 years, from 27.4 personal income tax rate, the lowest the Senator from New Mexico. It is a students per classroom in 1955 to 17 rate, from 15 percent to 14 percent, be- smart amendment. It invests in the fu- students per classroom in 1997, but the ginning in 2001 and then would gradu- ture of our country by making certain interesting thing is, as we have seen ally expand the bracket so more people that, at a time when our schools all this dramatic decrease in average class would pay that lowest rate. It would across the Nation do not have the re- size across the country, we have not benefit 70 million Americans; 55 per- sources necessary to prepare students seen a corresponding increase in aca- cent of Americans would benefit from for the future, we will do so as a mat- demic achievement and standardized that provision alone. That is not a tax ter of priority. tests across the country. break for the wealthy, and I wish my I must say I was struck by the Sen- The State of Arkansas will receive honest and true colleagues on the other ator from Arkansas a moment ago. He about 1.15 new teachers per school dis- side would quit characterizing it as said this benefits not the wealthy but, trict, or half a teacher per elementary such. This amendment should not be rather, it benefits 61 percent of the peo- school. This program has not been au- voted for because it says it ‘‘dispropor- ple in his State. He was only pointing thorized, and to suggest we will take tionately benefits the wealthy,’’ and it to one component of the program; that well-deserved tax relief from the Amer- does not. is, the lowering of the tax bracket from ican people and put it into a program In the State of Arkansas there will I think 15 percent to 14 percent. That is not yet authorized I think fails to be 683,000 people, 61 percent of the tax- about a $150 billion part of the $791 bil- make a lot of sense. payers in Arkansas, who will receive lion. Once again this year we are author- tax relief from this single provision, But when you add in the other parts izing the Elementary and Secondary apart from the marriage penalty, apart of the $791 billion, here is exactly what Education Act. We have spent months from the estate tax relief. The single happens. In the whole tax package the conducting hearings to learn about provision of lowering that rate from 15 Republicans are giving, the lowest 20 Federal elementary and secondary edu- percent to 14 percent and expanding percent of income earners in America cation policy. We will continue to work the bracket will benefit 61 percent of will get $22, the second 20 percent will on ESEA throughout the year. I believe the poorest people in Arkansas. get $120, the middle 20 percent will get that is the appropriate place for class So, in all honesty, let’s tell the $276, and the top 1 percent gets $22,964. size reduction and many of these other American people the truth. This is not The next 4 percent gets $3,400, and the education issues to be addressed prop- a tax break for the wealthy. It is a tax next 15 percent gets $1,500. You have to erly. break for hard-working Americans who be in the upper-income brackets to get Before we set aside Federal funds are paying far more than they should the larger amount. that should be rightly returned to the be in taxes. The Republicans will always come to taxpayers, we should consider whether Under the Clinton administration, the floor and say, Gee, Democrat Sen- we even want this program authorized taxes have risen to the highest level in ator, did you just wake up to the fact and appropriated in this year’s legisla- peacetime, a level of 21 percent of that that is how it works? If you earn tion. This is the wrong way to do it. GDP—21 percent. In my home State of more money, you get more money? If As I think about the need for IDEA, Arkansas, that amount translates into you are a bigger taxpayer, you get I support increased funding for IDEA. $7,352 in taxes per capita in 1998. I plead more money back? We have done a terrible job in appro- with my colleagues, let us not agree to I understand that. I understand basic priately funding IDEA. But if we think this amendment. Let us not begin to mathematics. But basic fairness, basic about what is being suggested, taking dilute that which is already far too lit- decency, dictates if you are really try- it from tax relief for the American peo- tle relief for hard-working Americans ing to help the lower-income person, ple, it is the wrong way to go. In the $3 who have a difficult enough time mak- you set the figures of the tax break so trillion surplus, $13 to $14 billion can be ing ends meet each month. the person with the smaller income found to fully fund IDEA without tak- Oh, we can talk about wonderful Fed- gets the bigger amount. ing it away from tax relief for the eral programs to benefit people, and Why is it that the lowest 20 percent American people. IDEA is currently they do. But if we start down that doesn’t get $100 and the top 1 percent funded at $4.3 billion, which is about 10 road, there is no stopping point. Let’s gets maybe $1,000 back? It is because percent of the cost of educating special take more of the $800 billion tax cut that is the way they rigged the bill. education students. Therefore, about and let’s spend it on this program and That is the difference in approach and $17 billion would be needed to meet the this program and this program be- philosophy. It is a difference that fun- federally-authorized commitment of 40 cause, after all, don’t we know best damentally divides us. percent. This works out to an appro- here in Washington? And we do not. Let me speak for a moment, if I may, priation of an additional $13 billion to At the root and at the core of the de- to an issue in one of the amendments fully fund IDEA. I suggest to my col- bate going on in the Senate is more that will be coming up very shortly, leagues, that $13 billion can certainly than just a debate over a tax package. but we will not have time to do full be found in the projected $3 trillion It is more than a debate over how measure on it, and that is the question S9704 CONGRESSIONAL RECORD — SENATE July 29, 1999 of where we are with respect to Medi- line for health care providers. This has In 1999 alone, the BBA was projected care. There is an amendment Senators never been a debate about the interest to cut Medicare spending by less than ROCKEFELLER, MIKULSKI, I, and others of hospitals or nursing homes. It is a $16 billion. Instead, we anticipate have introduced to ask the Finance debate about the fact that if we do not Medicare spending is going to fall by Committee to go back and set aside $20 act, we will further reduce the access $38 billion in 1999—$22 billion more billion, about 3 percent of the total size to quality care so critical for our Na- than was expected. Medicare hospital of the tax cut, in order to guarantee tion’s elderly, our Nation’s poor, and spending is plummeting, and the qual- that we will undo the damage the Bal- our Nation’s rural communities. It ity of care is plummeting with it. anced Budget Act is currently doing to means something to real people. In When the Balanced Budget Act America’s health care system. Today, Massachusetts alone, in South Shore, passed, CBO had projected a 2.5-percent despite the fact that we have a remark- in the last 2 years the South Shore increase in part A spending, hospital able economy, there are 43 million in- Hospital has had to lay off close to 50 insurance, for 1999. But actually, dividuals in our Nation who do not of their visiting nurses. They have had spending fell almost 5 percent during have health insurance—1 out of every 6 to close their satellite offices, and the first half of the year, and the im- Americans. Experts anticipate that is their budget is more than 40 percent pact on hospitals is clear. going to increase by 1.5 million per less than they require just to meet the Total hospital Medicare margins are year. needs of elderly and disabled patients. expected to decline from 4.3 percent in For the uninsured, academic health Who suffers as a result of that? 1997 to only 0.1 percent this year. We centers, the teaching hospitals of our Let me share with you a real elderly have a fundamental crisis. I say to my country, have created an enormous couple, a man and a woman with heart colleagues on the other side of the disease, lung disease, asthma, and hy- safety net. Teaching hospitals have aisle, as we are busy giving back this pertension. The wife of this gentleman stood by to ensure there is care avail- tax money, we need to consider the im- has heart disease. They are 89 and 90 able to everyone in our country when pact on our hospitals, on health care, years old, and one of their greatest it is absolutely needed. Today, at a on home health care, and rural commu- hopes has been to live together in the time when teaching hospitals are more nities. I beg my colleagues to try to home they saved for years to buy, liv- find the money that is going to save us important than ever before, the com- ing as independently as they can in old from the loss of the crown jewels of the bination of cost containment measures age. They have been able to do it with American health care system—our imposed by managed care and the ef- the help of a visiting nurse from the teaching hospitals. fects of the Balanced Budget Act in re- South Shore Hospital. But now that is Mr. ROTH. Mr. President, I yield 15 ducing Medicare payments has lit- gone. Now, because the services are minutes off the bill to the distin- erally made the future of our Nation’s being cut because the Medicare reim- guished Senator from Pennsylvania. academic medical centers unclear. bursements are so low, the impact is I would like my colleagues to think The PRESIDING OFFICER. The Sen- that those people can no longer con- ator from Pennsylvania. about the impact of what is happening tinue to do it. today because of the reduction of Medi- I recently received a letter from an- FLAT TAX care reimbursements. At the Medical other constituent named Harlan Mr. SPECTER. I thank the Chair- College of Georgia in Augusta, the Smith. He says the following: man. Mr. President, I have sought recogni- training facility for the State univer- Dear Senator KERRY: My 80-year-old father sity system’s medical school, officials was discharged from my hospital to his home tion to talk about my flat tax amend- are now raising room fees by an aver- Friday afternoon, and we are meeting with ment which will be voted on by the age of 28 percent and they are increas- home health care nurses and physical thera- Senate either this evening or tomor- ing the cost of lab tests and other serv- pists today to plan a strategy for my 80-year- row. ices by 10 percent. old mother and us to manage him at home. The most dramatic way to show what In Tennessee, Vanderbilt University This is ironic since the cuts from the Bal- the flat tax is, is to hold up a postcard anced Budget Act have caused my hospital which is an income tax return on the recently decided it can no longer ac- to cut services to the point where my mother cept Medicare patients from outside and family now have to hire the required flat tax. This postcard will take 15 the State. help privately. minutes to fill out. Here is an enlarge- In March, Massachusetts General They cannot afford it. ment of the flat tax which lists the Hospital eliminated 130 positions and These days, that story is repeated in identity of the taxpayer, the total com- raised prices. countless communities across the pensation, personal allowance, number In New York City, which has the Na- country. When the Balanced Budget of dependents, two deductions allowed, tion’s largest concentration of teach- Act of 1997 passed, the Congressional mortgage interest up to $100,000, chari- ing hospitals, city hospitals have cut Budget Office projected the 335 provi- table contributions up to $2,500, and their staffs by 10 percent since 1993. sions of the law were going to cut then a flat 20-percent tax. It will take In California, Medicare cuts are Medicare payments by $103 billion over 15 minutes on tax simplification to fill largely to blame for the loss of over 5 years. But today, CBO estimates that out this return. 1,250 jobs at the USFF, Stanford Health Medicare spending is going to drop $205 Contrast that, if you will, with the Care Network. billion—a 100-percent increase above fact that we have a Tax Code with 7.5 In May, the University of Pennsyl- what the expectations were supposed to million words; a Pledge of Allegiance vania health system announced it was be. which has 31 words; the Gettysburg Ad- going to lay off 450 people, 9 percent of The projected net on-budget surplus dress which has 267 words; the Declara- its total health care workforce. De- for fiscal years 1998 through 2002 is $100 tion of Independence, about 1,300 troit’s hospitals have eliminated 4,500 billion. You are seeing the surplus we words; the Bible with 1,773,000 words; jobs since January, but as my col- will have in the country is basically and the U.S. Tax Code with 7.5 million leagues will tell you, the problems as- going to come out of the hides of elder- words with the pending legislation, sociated with the Balanced Budget Act ly infirm patients, people who cannot which I have in my hand, which is an- are not unique to hospitals. In Massa- afford it, hospitals that are being other thick book of 443 pages to be chusetts, as of mid-June, 20 home forced to close, and medical care that added. health care agencies have closed since is being reduced. In offering an amendment on the flat late 1997. When the Balanced Budget Act tax, I have no illusion about its passing The administration may be busy sort passed, total Medicare spending infla- because the train is in operation to of brushing off some of this as the sim- tion was expected to drop from almost have a tax cut. The flat tax would be a ple corrections of market inefficien- 10 percent in 1997 to approximately 5 total substitute on a comprehensive cies, but I could not disagree more, and percent in the outyears. But in April, tax bill which would do great things for I think many of my colleagues would the Treasury Department reported that America. disagree with that. total Medicare spending in the first First of all, the flat tax would elimi- I do not direct my colleagues’ atten- half of the year had fallen by over 2 nate double taxation so there would be tion to statistics to debate the bottom percent. no tax on estates. They have already July 29, 1999 CONGRESSIONAL RECORD — SENATE S9705 been taxed; all the money is going into billion in tax losses due to the deduc- In essence, the flat tax would vastly the estate. There would be no tax on tion on interest on charitable contribu- simplify the code. It would eliminate dividends; that has all been taxed be- tions. So we have a system which is tax most of the 117,000 IRS Internal Rev- fore it gets into earned surplus. There neutral. enue Service employees, would save would be no tax on capital gains; that Another major advantage of the flat most of the $7 billion now spent on the has already been taxed. tax is that it would vastly increase , and would be This is a win-win situation for Amer- productivity because people would no a very strong signal to the Finance ica because it lowers the tax burden on longer be looking to what they could Committee in the Senate to take up the taxpayers in the lower brackets. save on tax loopholes. Instead, Ameri- the flat tax seriously. That has not For example in the 1998 tax year, the cans would be devising their affairs on been done. standard deduction is $4,250 for a single what would be most productive, be- It would be a strong signal to the taxpayer, $6,250 for a head of household cause it would not do one any good to Ways and Means Committee of the and $7,100 for a married couple filing construct a tax loophole, diverting a House of Representatives to take a jointly, while the personal exemption lot of energy to try to save taxes, but, good look at the flat tax. for individuals and dependents is $2,700. instead, the energies of productive Because Americans will see that they Thus, under the current tax code, a Americans would be devoted to what is could fill out their tax return on a family of four which does not itemize productive and what can be accom- postcard, save the laborious hours and deductions would pay taxes on all in- plished. the complications and all those letters come over $17,900—that is personal ex- This model, under Hall-Rabushka, from the IRA saying, you owe $19.14 emptions of $10,800 and a standard de- projects that these savings —which cents—which taxpayers like myself duction of $7,100. By contrast, under would be tremendously increased— would rather pay but you can’t do that; my flat tax bill, that same family would far outweigh for the individual you have to go back through all of would receive a personal exemption of taxpayer any of the benefits that they your records—the release in produc- $27,500, and would pay tax on only in- would receive at the present time. tivity, the elimination of the capital come over that amount. Professors Hall and Rabushka project gains tax, the estate tax, the tax on A family of four with $35,000 in in- there would be an increase in the gross dividends, all of which has been paid. come would owe $2,569 in taxes under national product of some $2 trillion Mr. SPECTER. Mr. President, I have current law, but would only owe $1,500 within 7 years, which would be an enor- sought recognition to introduce my under this flat tax—that is a savings of mous boon to America. flat tax legislation as an amendment to $1,065. A family of four with $50,000 As I say, this tax bill is well on the S. 1429, the Tax Reconciliation bill. I would have a saving of $752. road. The train has left the station; had reintroduced this legislation on Why is this possible? It is possible be- and it is not to be derailed by any sub- April 15th, 1999 to provide for a flat 20 cause the tax loopholes enable write- stitute measure. But I do ask my col- percent tax on individuals and busi- offs to save some $393 billion a year. leagues to seriously consider the flat nesses. In the 104th Congress, I was the What is eliminated under the flat tax tax and, if nothing more, to cast a pro- first Senator to introduce flat tax leg- are the loopholes, the deductions in test vote against the existing Tax Code islation and the first Member of Con- this complicated code which can be de- which has 75 million pages, and the gress to set forth a deficit-neutral plan ciphered, interpreted, and found really current bill which would add 443 pages for dramatically reforming our na- only by the $500-an-hour lawyers. That to that mountainous monstrosity. tion’s tax code and replacing it with a money is lost to the taxpayers. $120 bil- The flat tax is enormously popular flatter, fairer plan designed to stimu- lion would be saved by the elimination with the American people. The polls late economic growth. My flat tax leg- of fraud because of the simplicity of show that 61 percent of Americans islation was also the first plan to re- the Tax Code, the taxpayer being able favor a flat tax. tain limited deductions for home mort- to find out exactly what they owe. I can personally attest to the fact gage interest and charitable contribu- This bill is modeled after legislation that in my open house town meetings, tions. organized and written by two very dis- the reference to the flat tax and the As I traveled around the country and tinguished professors of law from Stan- display of this postcard tax return is held town hall meetings across Penn- ford University, Professor Hall and the only applause item in my speech. sylvania and other states, the public Professor Rabushka. Their model was You might attribute that to the dull support for fundamental tax reform first introduced in the Congress in the balance of the speech, but the flat tax was overwhelming. I would point out in fall of 1994 by Majority Leader Richard is an applause producer. those speeches that I never leave home Armey. I introduced the flat tax bill— When people think about the time without two key documents: (1) my the first one in the Senate—on March they spend on their tax returns, and copy of the Constitution; and (2) a copy 2, 1995, Senate bill 488. I reintroduced the regulatory system, and the com- of my 10-line flat tax postcard. I soon the bill in the 105th Congress, and re- plexity of the tax returns, the fact that realized that I needed more than just reintroduced the bill in this Congress Americans spend 5.4 billion hours fill- one copy of my flat tax postcard— on April 15, 1999—income tax day—in a ing out tax returns, this is an enor- many people wanted their own post- bill denominated S. 822. mously attractive matter. card so that they could see what life in So the bill has been well thought out, I do not believe that the Senate has a flat tax world would be like, where has been well documented, as being voted on a flat tax proposal yet. We tax returns only take 15 minutes to fill revenue neutral by Professors Hall and Senators always hear that this group out and individual taxpayers are no Rabushka at 19 percent. or that group is going to be watching a longer burdened with double taxation My bill has added two deductions— specific vote, and it is going to be a re- on their dividends, interest, capital one for interest on home mortgages for corded vote on the scorecard. I suggest gains and estates. borrowing up to $100,000 for middle-in- that a vote on the flat tax is going to Support for the flat tax is growing as come Americans and a deduction for be a vote on the big scorecard for more and more Americans embrace the charitable contributions for up to America. simplicity, fairness and growth poten- $2,500. These two deductions have been People do know what the flat tax is. tial of flat tax reform. An April 17, obtained because of the practical im- They do have an idea about it. It is 1995, edition of Newsweek cited a poll possibility of having a Tax Code which overwhelmingly popular. 61 percent of showing that 61 percent of Americans eliminates those two deductions which the public favors it; leaving only 39 favor a flat tax over the current tax is really the mainstay of America. But percent, most of whom probably do not code. Significantly, a majority of the aside from those two modest deduc- know about it. Anybody who knows respondents who favor the flat tax pre- tions, it is a flat tax. about the flat tax, that they could get ferred my flat tax plan with limited de- One percent has been added on my their tax return done on a postcard in ductions for home mortgage interest bill to the Hall-Rabushka formula to 15 minutes, would be very proud to and charitable contributions. Well be- accommodate $35 billion in losses due have his or her Senator vote in favor of fore he entered the 1996 Republican to the home interest deduction and $13 this flat tax. presidential primary, publisher Steve S9706 CONGRESSIONAL RECORD — SENATE July 29, 1999 Forbes opined in a March 27, 1995, exempt retirement benefits available a battle the government can never win. Forbes editorial about the tremendous to some kinds of businesses but not Under the flat tax bill I offer today, appeal and potency of my flat tax plan. others. It was apparent then, as it is there are no loopholes, and tax avoid- Congress was not immune to public now, that the very complexities of the ance through clever manipulations will demand for reform. was ap- could be used to become a thing of the past. pointed to head up the National Com- give unfair advantage to some. The basic model for this legislation mission on Economic Growth and Tax Before I introduced my flat tax bill comes from a plan created by Profes- Reform and the Commission soon came early in the 104th Congress, I had dis- sors Robert Hall and Alvin Rabushka out with its report recognizing the cussions with Congressman RICHARD of the Hoover Institute at Stanford value of a fairer, flatter tax code. Mr. ARMEY, the House Majority Leader, University. Their plan envisioned a flat Forbes soon introduced a flat tax plan about his flat tax proposal. In fact, I tax with no deductions whatever. After of his own, and my fellow candidates in testified with House Majority Leader considerable reflection, I decided to in- the 1996 Republican presidential pri- RICHARD ARMEY before the Senate Fi- clude in the legislation limited deduc- mary began to embrace similar nance and House Ways & Means Com- tions for home mortgage interest for versions of either a flat tax or a con- mittees, as well as the Joint Economic up to $100,000 in borrowing and chari- sumption-based tax system. Committee and the House Small Busi- table contributions up to $2,500. While Unfortunately, the politics of that ness Committee on the tremendous these modifications undercut the pure Presidential campaign denied the flat benefits of flat tax reform. Since then, principle of the flat tax by continuing tax a fair hearing and momentum and both before and after introducing the use of tax policy to promote home stalled. On October 27, 1995, I intro- my original flat tax bill, my staff and buying and charitable contributions, I duced a Sense of the Senate Resolution I have studied the flat tax at some believe that those two deductions are calling on my colleagues to expedite length, and have engaged in a host of so deeply ingrained in the financial Congressional adoption of a flat tax. discussions with economists and tax planning of American families that The Resolution, which was introduced experts, including the staff of the Joint they should be retained as a matter of fairness and public policy—and also po- as an amendment to pending legisla- Committee on Taxation, to evaluate litical practicality. With those two de- tion, was not adopted. the economic impact and viability of a ductions maintained, passage of a I reintroduced this legislation in the flat tax. Based on those discussions, modified flat tax will be difficult, but 105th Congress with slight modifica- and on the revenue estimates supplied without them, probably impossible. tions to reflect inflation-adjusted in- to us, I have concluded that a simple In my judgment, an indispensable creases in the personal allowances and flat tax at a rate of 20 percent on all prerequisite to enactment of a modi- dependent allowances. While my flat business and personal income can be fied flat tax is revenue neutrality. Pro- tax proposal was favorably received at enacted without reducing federal reve- fessor Hall advised that the revenue town hall meetings in Pennsylvania, nues. neutrality of the Hall-Rabushka pro- Congress failed to move forward on any A flat tax will help reduce the size of posal, which uses a 19% rate, is based tax reform during the 105th Congress. I government and allow ordinary citi- on a well documented model founded tried repeatedly to raise the issue with zens to have more influence over how on reliable governmental statistics. My leadership and the Finance Committee their money is spent because they will legislation raises that rate from 19% to to no avail. I think the American peo- spend it—not the government. By cre- 20% to accommodate retaining limited ple want this debate to move forward ating strong incentives for savings and home mortgage interest and charitable and I think the issue of tax reform is investment, the flat tax will have the deductions. A preliminary estimate in ripe for consideration. beneficial result of making available the 104th Congress by the Committee In this period of opportunity as we larger pools of capital for expansion of on Joint Taxation places the annual commence the 106th Session of Con- the private sector of the economy— cost of the home interest deduction at gress, I am optimistic that public sup- rather than more tax money for big $35 billion, and the cost of the chari- port for tax reform will enable us to government. This will mean more jobs table deduction at $13 billion. While move forward and adopt this critically and, just as important, more higher- the revenue calculation is complicated important and necessary legislation. paying jobs. because the Hall-Rabushka proposal My flat tax legislation will fun- As a matter of federal tax policy, encompasses significant revisions to damentally revise the present tax code, there has been considerable con- business taxes as well as personal in- with its myriad rates, deductions, and troversy over whether tax breaks come taxes, there is a sound basis for instructions. This legislation would in- should be used to stimulate particular concluding that the 1 percent increase stitute a simple, flat 20% tax rate for kinds of economic activity, or whether in rate would pay for the two deduc- all individuals and businesses. It will tax policy should be neutral, leaving tions. Revenue estimates for tax code allow all taxpayers to file their April 15 people to do what they consider best revisions are difficult to obtain and tax returns on a simple 10-line post- from a purely economic point of view. are, at best, judgment calls based on card. This proposal is based on three Our current tax code attempts to use projections from fact situations with a key principles which are critical to an tax policy to direct economic activity. myriad of assumed variables. It is pos- effective and equitable taxation sys- Yet actions under that code have dem- sible that some modification may be tem: simplicity, fairness and economic onstrated that so-called tax breaks are needed at a later date to guarantee rev- growth. inevitably used as the basis for tax enue neutrality. Over the years and prior to my legis- shelters which have no real relation to This legislation offered today is quite lative efforts on behalf of flat tax re- solid economic purposes, or to the ac- similar to the bill introduced in the form, I have devoted considerable time tivities which the tax laws were meant House by Congressman ARMEY and in and attention to analyzing our nation’s to promote. Even when the government the Senate late in 1995 by Senator tax code and the policies which under- responds to particular tax shelters RICHARD SHELBY, which were both in lie it. I began the study of the complex- with new and often complex revisions turn modeled after the Hall-Rabushka ities of the tax code 40 years ago as a of the regulations, clever tax experts proposal. The flat tax offers great po- law student at Yale University. I in- are able to stay one or two steps ahead tential for enormous economic growth, cluded some tax law as part of my of the IRS bureaucrats by changing the in keeping with principles articulated practice in my early years as an attor- structure of their business transactions so well by Jack Kemp. This proposal ney in Philadelphia. In the spring of and then claiming some legal distinc- taxes business revenues fully at their 1962, I published a law review article in tions between the taxpayer’s new ap- source, so that there is no personal the Villanova Law Review, ‘‘Pension proach and the revised IRS regulations taxation on interest, dividends, capital and Profit Sharing Plans: Coverage and and precedents. gains, gifts or estates. Restructured in Operation for Closely Held Corpora- Under the massive complexity of the this way, the tax code can become a tions and Professional Associations,’’ 7 current IRS Code, the battle between powerful incentive for savings and in- Villanova L. Rev. 335, which in part fo- $500-an-hour tax lawyers and IRS bu- vestment—which translates into eco- cused on the inequity in making tax- reaucrats to open and close loopholes is nomic growth and expansion, more and July 29, 1999 CONGRESSIONAL RECORD — SENATE S9707 better jobs, and raising the standard of In order to ensure that this flat tax frustration and inefficiency. By way of living for all Americans. does not unfairly impact low income example, most Americans have become In the 104th Congress, we took some families, the personal allowances con- familiar with the absurdities of the important steps toward reducing the tained in my proposal are much higher government’s military procurement size and cost of government, and this than the standard deduction and per- programs. If these programs have work is ongoing and vitally important. sonal exemptions allowed under the taught us anything, it is how a simple But the work of downsizing govern- current tax code. For example in the purchase order for a hammer or a toilet ment is only one side of the coin; what 1998 tax year, the standard deduction is seat can mushroom into thousands of we must do at the same time, and with $4,250 for a single taxpayer, $6,250 for a words of regulations and restrictions as much energy and care, is to grow head of household and $7,100 for a mar- when the government gets involved. the private sector. As we reform the ried couple filing jointly, while the per- The Internal Revenue Service is cer- welfare programs and government bu- sonal exemption for individuals and de- tainly no exception. Indeed, it has be- reaucracies of past administrations, we pendents is $2,700. Thus, under the cur- come a distressingly common experi- must replace those programs with a rent tax code, a family of four which ence for taxpayers to receive comput- prosperity that extends to all segments does not itemize deductions would pay erized print-outs claiming that addi- of American society through private tax on all income over $17,900 (personal tional taxes are due, which require re- investment and job creation—which exemptions of $10,800 and a standard peated exchanges of correspondence or can have the additional benefit of pro- deduction of $7,100). By contrast, under personal visits before it is determined, ducing even lower taxes for Americans my flat tax bill, that same family as it so often is, that the taxpayer was as economic expansion adds to federal would receive a personal exemption of right in the first place. revenues. Just as Americans need a tax $27,500, and would pay tax only on in- The plan offered today would elimi- code that is fair and simple, they also come over that amount. nate these kinds of frustrations for are entitled to tax laws designed to fos- My legislation retains the provisions millions of taxpayers. This flat tax ter rather than retard economic for the deductibility of charitable con- would enable us to scrap the great ma- growth. The bill I offer today embodies tributions up to a limit of $2,500 and jority of the IRS rules, regulations and those principles. home mortgage interest on up to instructions and delete most of the five My plan, like the Armey-Shelby pro- $100,000 of borrowing. Retention of million words in the Internal Revenue posal, is based on the Hall-Rabushka these key deductions will, I believe, en- Code. Instead of tens of millions of analysis. But my flat tax differs from hance the political salability of this hours of non-productive time spent in the Armey-Shelby plan in four key re- legislation and allow the debate on the compliance with, or avoidance of, the spects: First, my bill contains a 20 per- flat tax to move forward. If a decision tax code, taxpayers would spend only cent flat tax rate. Second, this bill is made to eliminate these deductions, the small amount of time necessary to would retain modified deductions for the revenue saved could be used to re- fill out a postcard-sized form. Both mortgage interest and charitable con- duce the overall flat tax rate below 20 business and individual taxpayers tributions (which will require a 1 per- percent. would thus find valuable hours freed up cent higher tax rate than otherwise). With respect to businesses, the flat to engage in productive business activ- Third, my bill would maintain the tax would also be a flat rate of 20 per- ity, or for more time with their fami- automatic withholding of taxes from cent. My legislation would eliminate lies, instead of poring over tax tables, an individual’s paycheck. Lastly, my the intricate scheme of complicated de- schedules and regulations. bill is designed to be revenue neutral, preciation schedules, deductions, cred- The flat tax I have proposed can be and thus will not undermine our vital its, and other complexities that go into calculated just by filling out a small efforts to balance the nation’s budget. business taxation in favor of a much- postcard which would require a tax- The key advantages of this flat tax simplified system that taxes all busi- payer only to answer a few easy ques- plan are three-fold: First, it will dra- ness revenue less only wages, direct ex- tions. Filing a tax return would be- matically simplify the payment of penses and purchases—a system with come a manageable chore, not a seem- taxes. Second, it will remove much of much less potential for fraud, ‘‘creative ingly endless nightmare, for most tax- the IRS regulatory morass now im- accounting’’ and tax avoidance. payers. posed on individual and corporate tax- Businesses would be allowed to ex- Along with the advantage of sim- payers, and allow those taxpayers to pense 100 percent of the cost of capital plicity, enactment of this flat tax bill devote more of their energies to pro- formation, including purchases of cap- will help to remove the burden of cost- ductive pursuits. Third, since it is a ital equipment, structures and land, ly and unnecessary government regula- plan which rewards savings and invest- and to do so in the year in which the tion, bureaucracy and red tape from ment, the flat tax will spur economic investments are made. The business our everyday lives. The heavy hand of growth in all sectors of the economy as tax would apply to all money not rein- government bureaucracy is particu- more money flows into investments vested in the company in the form of larly onerous in the case of the Inter- and savings accounts, and as interest employment or capital formation— nal Revenue Service, which has been rates drop. thus fully taxing revenue at the busi- able to extend its influence into so Under this tax plan, individuals ness level and making it inappropriate many aspects of our lives. would be taxed at a flat rate of 20 per- to re-tax the same monies when passed In 1995, the IRS employed 117,000 peo- cent on all income they earn from on to investors as dividends or capital ple, spread out over countless offices wages, pensions and salaries. Individ- gains. across the United States. Its budget uals would not be taxed on any capital Let me now turn to a more specific was in excess of $7 billion, with over $4 gains, interest on savings, or divi- discussion of the advantages of the flat billion spent merely on enforcement. dends—since those items will have al- tax legislation I am reintroducing By simplifying the tax code and elimi- ready been taxed as part of the flat tax today. nating most of the IRS’ vast array of on business revenue. The flat tax will The first major advantage to this flat rules and regulations, the flat tax also eliminate all but two of the deduc- tax is simplicity. According to the Tax would enable us to cut a significant tions and exemptions currently con- Foundation, Americans spend approxi- portion of the IRS budget, including tained within the tax code. Instead, mately 5.3 billion hours each year fill- the bulk of the funding now needed for taxpayers will be entitled to ‘‘personal ing out tax forms. Much of this time is enforcement and administration. allowances’’ for themselves and their spent burrowing through IRS laws and In addition, a flat tax would allow children. The personal allowances are: regulations which fill 17,000 pages and taxpayers to redirect their time, ener- $10,000 for a single taxpayer; $15,000 for have grown from 744,000 words in 1955 gies and money away from the yearly a single head of household; $17,500 for a to 5.6 million words in 1995. morass of tax compliance. According to married couple filing jointly; and $5,000 Whenever the government gets in- the Tax Foundation, in 1996, the pri- per child or dependent. These personal volved in any aspect of our lives, it can vate sector spent over $150 billion com- allowances would be adjusted annually convert the most simple goal or task plying with federal tax laws. According for inflation after 1999. into a tangled array of complexity, to a Tax Foundation study, adoption of S9708 CONGRESSIONAL RECORD — SENATE July 29, 1999 flat tax reform would cut pre-filing deficit. We have to very materially $1 trillion in 1989. In fact, the Reagan compliance costs by over 90 percent. raise our levels of private savings and tax cut program helped to bring about Monies spent by businesses and in- investment. And we have to do so in a one of the longest peacetime expansion vestors in creating tax shelters and way that will not cause additional defi- of the U.S. economy in history. There finding loopholes could be instead di- cits. is every reason to believe that the flat rected to productive and job-creating The less money people save, the less tax proposed here can do the same— economic activity. With the adoption money is available for business invest- and by maintaining revenue neutrality of a flat tax, the opportunities for ment and growth. The current tax sys- in this flat tax proposal, as we have, we fraud and cheating would also be vastly tem discourages savings and invest- can avoid any increases in annual defi- reduced, allowing the government to ment, because it taxes the interest we cits and the national debt. collect, according to some estimates, earn from our savings accounts, the In addition to increasing federal rev- over $120 billion annually. dividends we make from investing in enues by fostering economic growth, The third major advantage to a flat the stock market, and the capital gains the flat tax can also add to federal rev- tax is that it will be a tremendous spur we make from successful investments enues without increasing taxes by clos- to economic growth. Harvard econo- in our homes and the financial mar- ing tax loopholes. The Congressional mist Dale Jorgenson estimates adop- kets. Indeed, under the current law Research Service estimates that for tion of a flat tax like the one offered these rewards for saving and invest- fiscal year 1995, individuals sheltered today would increase future national ment are not only taxed, they are over- more than $393 billion in tax revenue in wealth by over $2 trillion, in present taxed—since gains due solely to infla- legal loopholes, and corporations shel- value terms, over a seven year period. tion, which represent no real increase tered an additional $60 billion. There This translates into over $7,500 in in- in value, are taxed as if they were prof- may well be additional monies hidden creased wealth for every man, woman its to the taxpayer. in quasi-legal or even illegal ‘‘tax shel- and child in America. This growth also With the limited exceptions of retire- ters.’’ Under a flat tax system, all tax means that there will be more jobs—it ment plans and tax free municipal shelters will disappear and all income is estimated that the $2 trillion in- bonds, our current tax code does vir- will be subject to taxation. crease in wealth would lead to the cre- tually nothing to encourage personal The growth case for a flat tax is com- ation of 6 million new jobs. savings and investment, or to reward it pelling. It is even more compelling in The economic principles are fairly over consumption. This bill will change the case of a tax revision that is simple straightforward. Our current tax sys- this system, and address this problem. and demonstrably fair. tem is inefficient; it is biased toward The proposed legislation reverses the By substantially increasing the per- too little savings and too much con- current skewed incentives by pro- sonal allowances for taxpayers and sumption. The flat tax creates substan- moting savings and investment by indi- their dependents, this flat tax proposal tial incentives for savings and invest- viduals and by businesses. Individuals ensures that poorer taxpayers will pay ment by eliminating taxation on inter- would be able to invest and save their no tax and that taxes will not be re- est, dividends and capital gains—and money tax-free and reap the benefits of gressive for lower and middle income tax policies which promote capital for- the accumulated value of those invest- taxpayers. At the same time, by clos- mation and investment are the best ve- ments without paying a capital gains ing the hundreds of tax loopholes hicle for creation of new and high pay- tax upon the sale of these investments. which are currently used by wealthier ing jobs, and for a greater prosperity Businesses would also invest more as taxpayers to shelter their income and for all Americans. the flat tax allowed them to expense avoid taxes, this flat tax bill will also It is well recognized that to promote fully all sums invested in new equip- ensure that all Americans pay their future economic growth, we need not ment and technology in the year the fair share. only to eliminate the federal govern- expense was incurred, rather than The flat tax legislation that I am of- ment’s reliance on deficits and bor- dragging out the tax benefits for these fering will retain the element of pro- rowed money, but to restore and ex- investments through complicated de- gressivity that Americans view as es- pand the base of private savings and in- preciation schedules. With greater in- sential to fairness in an income tax vestment that has been the real engine vestment and a larger pool of savings system. Because of the lower end in- driving American prosperity through- available, interest rates and the costs come exclusions, and the capped deduc- out our history. These concepts are re- of investment would also drop, spur- tions for home mortgage interest and lated—the federal budget deficit soaks ring even greater economic growth. charitable contributions, the effective up much of what we have saved, leav- Critics of the flat tax have argued tax rates under my bill will range from ing less for businesses to borrow for in- that we cannot afford the revenue 0% for families with incomes under vestments. losses associated with the tremendous about $30,000 to roughly 20% for the It is the sum total of savings by all savings and investment incentives the highest income groups. aspects of the U.S. economy that rep- bill affords to businesses and individ- My proposed legislation demon- resents the pool of all capital available uals. Those critics are wrong. Not only strably retains the fairness that must for investment—in training, education, is this bill carefully crafted to be rev- be an essential component of the Amer- research, machinery, physical plant, enue neutral, but historically we have ican tax system. etc.—and that constitutes the real seed seen that when taxes are cut, revenues The proposal that I make today is of future prosperity. The statistics actually increase, as more taxpayers dramatic, but so are its advantages: a here are daunting. In the 1960s, the net work harder for a larger share of their taxation system that is simple, fair U.S. national savings rate was 8.2 per- take-home pay, and investors are more and designed to maximize prosperity cent, but it has fallen to a dismal 1.5 willing to take risks in pursuit of re- for all Americans. A summary of the percent. Americans save at only one- wards that will not get eaten up in key advantages are: tenth the rate of the Japanese, and taxes. Simplicity: A 10-line postcard filing only one-fifth the rate of the Germans. As one example, under President would replace the myriad forms and at- This is unacceptable and we must do Kennedy when individual tax rates tachments currently required, thus something to reverse the trend. were lowered, investment incentives saving Americans up to 5.3 billion An analysis of the components of including the investment tax credit hours they currently spend every year U.S. savings patterns shows that al- were created and then expanded and de- in tax compliance. though the federal budget deficit is the preciation rates were accelerated. Yet, Cuts government: The flat tax would largest cause of ‘‘dissavings,’’ both per- between 1962 and 1967, gross annual fed- eliminate the lion’s share of IRS rules, sonal and business savings rates have eral tax receipts grew from $99.7 billion regulations and requirements, which declined significantly over the past to $148 billion—an increase of nearly 50 have grown from 744,000 words in 1955 three decades. Thus, to recreate the percent. More recently after President to 5.6 million words and 12,000 pages pool of capital stock that is critical to Reagan’s tax cuts in the early 1980’s, currently. It would also allow us to future U.S. growth and prosperity, we government tax revenues rose from slash the mammoth IRS bureaucracy have to do more than just get rid of the just under $600 billion in 1981 to nearly of 117,000 employees. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9709 Promotes economic growth: Econo- budget currently allocated to the In- Your social security mists estimate a growth of over $2 tril- ternal Revenue Service. number: llllll lion in national wealth over seven Professors Hall and Rabushka have Home address (number and street including years, representing an increase of ap- projected that within seven years of apartment number or rural route): proximately $7,500 in personal wealth enactment, this type of a flat tax llllllllll for every man, woman and child in would produce a 6 percent increase in Spouse’s social security America. This growth would also lead output from increased total work in number: llllll to the creation of 6 million new jobs. the U.S. economy and increased capital City, town, or post office, state, and ZIP Increases efficiency: Investment deci- formation. The economic growth would code: llllllllll sions would be made on the basis of mean a $7,500 increase in the personal 1. Wages, salary, pension and retire- productivity rather than simply for tax income of all Americans. ment benefits ...... 1ll avoidance, thus leading to even greater No one likes to pay taxes. But Ameri- 2. Personal allowance (enter only economic expansion. cans will be much more willing to pay one): Reduces interest rates: Economic their taxes under a system that they —$17,500 for married filing jointly forecasts indicate that interest rates believe is fair, a system that they can —$10,000 for single would fall substantially, by as much as understand, and a system that they —$15,000 for single head of house- two points, as the flat tax removes recognize promotes rather than pre- hold ...... 2ll many of the current disincentives to vents growth and prosperity. The legis- 3. Number of dependents, not includ- savings. ing spouse, multiplied by $5,000 ...... 3ll Lowers compliance costs: Americans lation I introduce today will afford Americans such a tax system. 4. Mortgage interest on debt up to would be able to save up to $224 billion $100,000 for owner-occupied home ... 4ll they currently spend every year in tax Mr. President, I ask unanimous con- sent that the charts and exhibits be 5. Cash or equivalent charitable con- compliance. tributions (up to $2,500) ...... 5ll printed in the RECORD. Decreases fraud: as tax loopholes are 6. Total allowances and dedications eliminated and the tax code is sim- There being no objection, the mate- (lines 2, 3, 4 and 5) ...... 6ll plified, there will be far less oppor- rial was ordered to be printed in the 7. Taxable compensation (line 1 less tunity for tax avoidance and fraud, RECORD, as follows: line 6, if positive; otherwise zero) ... 7ll which now amounts to over $120 billion 1999 INDIVIDUAL TAX RETURN 8. Tax (20% of line 7) ...... 8ll in uncollected revenue annually. FORM 1—INDIVIDUAL WAGE TAX—1999 9. Tax withheld by employer ...... 9ll Reduces IRS costs: Simplification of Your first name and initial (if joint return, 10. Tax or refund due (difference be- the tax code will allow us to save sig- also give spouse’s name and initial): tween lines 8 and 9) ...... 10ll nificantly on the $7 billion annual llllllllll ANNUAL TAXES UNDER 20% FLAT TAX FOR MARRIED COUPLE WITH TWO CHILDREN FILING JOINTLY

1 1 Personal allowance (w/chil- Income Income mortgage Deductible mtg interest Charitable contributions dren) Taxable income Marginal tax rate (percent) Taxes owed

<27,500 ...... 0 None 30,000 60,000 5,400 600 27,500 0 0 None 40,000 80,000 7,200 800 27,500 4,500 2.3 900 50,000 100,000 9,000 1,000 27,500 12,500 5.0 2,500 60,000 120,000 9,000 1,200 27,500 22,300 7.4 4,460 70,000 140,000 9,000 1,400 27,500 31,200 9.2 6,420 80,000 160,000 9,000 1,600 27,500 41,900 10.5 8,380 90,000 180,000 9,000 1,800 27,500 51,700 11.5 10,340 100,000 200,000 9,000 2,000 27,500 61,500 12.3 12,300 125,000 250,000 9,000 2,500 27,500 86,000 13.8 17,200 150,000 300,000 9,000 2,500 27,500 111,000 14.8 22,200 200,000 400,000 9,000 2,500 27,500 161,000 16.1 32,200 250,000 500,000 9,000 2,500 27,500 211,000 16.8 42,200 500,000 1,000,000 9,000 2,500 27,500 461,000 18.4 92,200 1,000,000 2,000,000 9,000 2,500 27,500 961,000 19.2 192,200 1 Assumes home mortgage of twice annual income at a rate of 9% and charitable contributions up to 2% of annual income.

ADVANTAGES OF THE 20 PERCENT FLAT TAX Decreases fraud: As tax loopholes are elimi- which we allocated in increase last (By Senator ) nated and the tax code is simplified, there year. Simplicity: A 10-line postcard filing would will be far less opportunity for tax avoidance In consulting with the biotechnology replace the myriad forms and attachments and fraud, which now amounts to over $120 billion in uncollected revenue annually. industry, the one item which could currently required, thus saving Americans Reduces IRS costs: Simplification of the tax bridge the gap would be a 10 percent in- up to 5.3 billion hours they currently spend code will allow us to save significantly on vestment tax credit which would stim- every year in tax compliance. the $7 billion annual budget currently allo- Cuts government: The flat tax would elimi- ulate Biotech and would do a tremen- cated to the Internal Revenue Service. nate the lion’s share of IRS rules, regula- dous amount for the health of Ameri- tions and requirements, which have grown INVESTMENT TAX CREDIT FOR THE BIOTECH cans. from 744,000 words in 1955 to 5.6 million words INDUSTRY In the course of the past few months, Mr. SPECTER. In the balance of my and 12,000 pages currently. It would also stem cells have been discovered by allotted time, I will speak briefly allow us to slash the mammoth IRS bureauc- Biotech which is a veritable fountain of about another amendment which will racy of 117,000 employees. youth, holding a promise for a cure for Promotes economic growth: Economists esti- be voted on, probably tomorrow. That cancer, Alzheimer’s, Parkinson’s, and mate a growth of over $2 trillion in national is an investment tax credit for the bio- other maladies. wealth over seven years, representing an in- technology equipment industry. crease of approximately $7,500 in personal In my capacity as chairman of the So I urge my colleagues to take a wealth for every man, woman and child in Senate Subcommittee on Health and close look at the investment tax credit America. This growth would also lead to the Human Services, my distinguished for the Biotech industry when it comes creation of 6 million new jobs. up. Increases efficiency: Investment decisions ranking member, Senator HARKIN, and would be made on the basis of productivity I have the job of allocating funds for I thank the Chair and thank the rather than simply for tax avoidance, thus the National Institutes of Health. They chairman for yielding me this time leading to even greater economic expansion. are the crown jewel of the Federal Gov- from the bill and yield the floor. Reduces interest rates: Economic forecasts ernment—perhaps the only jewel of the Mr. REID. Mr. President, if the man- indicate that interest rates would fall sub- Federal Government. ager of the bill will yield for a brief stantially, by as much as two points, as the We are facing an extraordinarily dif- statement, as soon as the leaders ar- flat tax removes many of the current dis- incentives to savings. ficult time in allocating funding be- rive, I wonder if the next speaker Lowers compliance costs: Americans would cause of the allocation for the sub- would mind being interrupted. We have be able to save up to $593 billion they cur- committee which is far under what is a unanimous consent request we would rently spend every year in tax compliance. necessary to provide the $2 billion like to enter and not delay the leader S9710 CONGRESSIONAL RECORD — SENATE July 29, 1999 any more than necessary. The leader tion. This was the administration of those who are saying we don’t want to should be coming here soon. President Kennedy, and he made the reduce taxes are really saying we don’t Mr. ROTH. That is satisfactory. I statement, drawing upon the experi- want to reduce revenues. I can under- yield 12 minutes to Senator INHOFE. ence of the 1920s, that we have to have stand that. Some people believe Gov- Mr. INHOFE. I thank the Senator. more revenues to take care of the obli- ernment should have more spending Mr. President, I, like many of my gations that we have incurred in Gov- power and more control of our every- colleagues, have been listening in- ernment. He said we need more reve- day lives. That is what defines a liberal tently to all of the debate. I certainly nues, and the best way to increase rev- versus a conservative. I think we are understand that the Senator from New enues is to reduce taxes. trying to do something to really have Mexico is very sincere when he talks I say to the Senator from New York, dramatic cuts to enhance the economy. about many of these programs that this was not a Republican saying this. Perhaps one of the benefits of that need funding. This is someone whom he knew very would be, as history has shown, to in- I do think that something has been well, President Kennedy, back in the crease revenues. completely lost in the debate that has 1960s. There is one thing you can do if you been taking place on the floor. It is So he came along with his tax rate. want to cut down the size of Govern- this assumption that if we are going to At that time the highest rate had been ment, and that is to cut some of these pass a tax reduction, it is going to up at 91 percent, as you see on the programs. It has been my experience— automatically reduce revenues. I think chart represented by the green line. He having worked at the local level, State this is one of the fallacies that defies reduced them over that period of time level, and now in both Houses of Con- all history, and it is one that needs to down to 70 percent. gress—that once a problem exists out be talked about at this time. Now, if you make that kind of a re- there, you form a Government agency I can remember when President Clin- duction in the tax rate and you see to deal with the problem. The problem ton was first elected in 1992. One of the what has happened during that period goes away, but the agency goes on. In first appointments he made was his of time, during the 1960s, it did exactly a great speech made in 1965 which was chief financial adviser, Laura Tyson, what the President said it was going to called ‘‘A Rendezvous With Destiny,’’ who was quoted to have said—I believe do in anticipating what was going to Ronald Reagan said: this is an exact quote; certainly the in- happen to the revenues. President Ken- There is nothing closer to immortality on tent is the same—that there is no rela- nedy knew that, and I think many of the face of this earth than a Government tionship between the level of taxation the people at that time felt this was agency once formed. the Nation pays and the amount of eco- something that twice in history had I believe we need to look at this and nomic performance. I think this is ludi- been proven to be the case. realize what has been happening, where crous. I think it defies all logic. If you Then, of course, along came the 1980s. we are going from here, and what effect carried that to its logical conclusion, I can remember in the 1980s because I the tax cuts we are advocating are you would say let’s raise all marginal was around at that time. I remember going to actually have on the economy. rates to 100 percent, and everyone is when Ronald Reagan—keep in mind Another way of looking at it is, in going to work as hard as they would this was at a time when we had defi- 1993, Bill Clinton actually passed, with have otherwise. Certainly this is not cits, not surpluses as we have today. He the support of Congress, the largest what history has shown us. was advocating a sweeping tax relief single tax increase in contemporary One of the interesting things that is reduction of about $1.6 trillion. I hap- history—in the whole history of this so overlooked by many liberals and pen to have known personally, as many country. He raised taxes in that one in- others nowadays is that you can in- of my colleagues did at that time, crease by $241 billion over a 5-year pe- crease revenues by decreasing taxes. Speaker Tip O’Neill. Speaker O’Neill at riod. In 1995, 2 years later, President You have to realize that for every 1- that time was not considered to be one Clinton said: percent increase in economic activity, of the stalwarts of the conservative People in this room are still mad at me that generates new revenues of $24 bil- movement, but Tip O’Neill said: No, I about the budget because you think I raised lion. think that is too much. I think to be taxes too much. It might surprise you to This was really discovered by acci- fiscally responsible, we should reduce know that I think they raised them too dent back in the 1920s. Back in the taxes only by $1.3 trillion. much, too. 1920s, under two administrations, War- Now, keep in mind, this is Tip I think anybody at that time who ren Harding and Calvin Coolidge, there O’Neill, a Democrat, advocating the re- was opposed to that largest tax in- was a guy named Andrew Mellon, who duction of taxes by $1.3 trillion. Now crease in the history of this Nation was the Secretary of the Treasury we are talking about merely reducing should realize that a way to rectify under both administrations. It wasn’t them by some $790 billion. that is to reverse and repeal some of his understanding at that time that he Mr. President, to repeat, we learned the taxes that were increased at that would be able to increase revenues by lessons quite by accident during the time. We have looked at different taxes reducing taxes, but this was right after Harding and Coolidge administrations that should be reduced. I agree with World War I. In World War I, we had back in the twenties. The lessons were the Senator from Texas that we should tax rates that were just unconscion- that you can actually increase reve- reduce the marriage penalty. It doesn’t ably high—73 percent. So they said, all nues by decreasing taxes. We learned in make any sense in our society to re- right, the war is over now. Let’s reduce the 1960s when President Kennedy did ward people who live together out of our tax rates, and they reduced them the same thing; we dramatically in- wedlock. It doesn’t make any sense at in three steps during a 9-year period creased revenues by decreasing taxes. all, and it creates some of the other from 73 percent to 25 percent. This is the most revealing one because problems that we are so concerned This chart shows the income tax rate there has never been a 10-year period in about. at the time right after the war and how the history of this country where we I am very concerned about the mar- they reduced it from 73 percent down have had more tax reductions in mar- ginal rate tax, and I think we can prob- to 25 percent. Look what happens as ginal rates than we did in the 1980s. ably have the effect of increasing reve- the income started rising. It came up On this chart, the green line is the nues by reducing marginal rates. from about $700,000 to over a billion income tax revenues, starting in 1980, Thirdly—and this will be in one of dollars. It was almost doubled during going up here and showing that they the amendments that we vote on, I that period of time. I think this speaks increase by two-thirds at a time when guess, tomorrow; I hoped it would be for itself. It shocked a lot of people. the reductions in the rates were actu- tonight, but it will be tomorrow—is the This wasn’t some smart economist say- ally cut by two-thirds. death tax. I suggest to you that I had ing this is the way to increase revenue. I think it needs to be pointed out occasion to be out in western Okla- They weren’t even trying to increase that there is not a direct relationship homa talking about the farm crisis and revenue. But that is what happened. between the level of taxation and the about all the things that are hap- Then again in the 1960s, of course, amount of revenue. In fact, the rela- pening, I know, in other States and in this was not a Republican administra- tionship is just the opposite. I think Oklahoma. I am sure they have the July 29, 1999 CONGRESSIONAL RECORD — SENATE S9711 same problems out in New Mexico. Mr. LOTT. Mr. President, I renew my we had a split in our party in the House When you talk about repealing the es- unanimous consent request as earlier as to whether to enact a balanced tate tax or the death tax, all of a sud- stated. budget, and I am glad I did. I am glad den they quit worrying about crop in- The PRESIDING OFFICER. Is there I did. That means that one has to be surance and these programs because objection? careful about spending. that is the thing they believe is most Without objection, it is so ordered. But if there is one place as we move critical to the small businessman and Mr. LOTT. Mr. President, in light of into the 21st century that we should be woman and farmer in America. If there this agreement, there will be no fur- spending more—not just throwing is one thing we can do, in all fairness, ther votes this evening. The first two money at the problem, being careful, it would be to vote favorably on that votes of tomorrow will begin at 9 a.m. setting standards, but spending more when the appropriate time comes. A number of votes will occur following money—it is the area of education. I yield the floor. those two votes. I hope Senators will As we move into an ideas economy, Mr. LOTT. Mr. President, we have a work with the managers and work with an ideas-based economy, the most im- unanimous consent agreement that I the whips on both sides of the aisle. portant resource our country has is the think will be constructive in getting Senator NICKLES is here and prepared minds of our young people. It is more our work completed. It has been dis- to work with Senators to discuss the important than the wealth of the mine, cussed thoroughly with the Democratic seriousness of their amendments. The or the fertility of the fields, or even the leadership, and I know it is going to ‘‘Tasmanian junior’’ here, HARRY REID, output of the factory, because more take some more time tonight and also is going to be working on the Demo- and more and more wealth is created, an effort tomorrow, but I think that all cratic side. Talk with the whips. It is jobs are created, and happiness is cre- things considered, it is the best way to not a very seemly way to do business ated by how well educated we are by proceed. to have repeated votes in the so-called the ideas that our people have. I ask unanimous consent that the vote-arama. A reasonable number is To enact the budget plan posed by vote with respect to the pending understandable and can be explained the other side, as the chart of the Sen- amendment No. 1462 occur tomorrow sufficiently. Senators will be asked not ator from New Mexico shows, and cut morning beginning at 9 a.m, with 15 to leave the Chamber in the morning education funding or to even simply minutes for concluding remarks to be because once we start on the series of freeze education funding, in my judg- equally divided beginning at 8:30 a.m. votes, votes will occur every 10 to 15 ment, would be a mistake. This resolu- on Friday. minutes, so we can get at least four tion, which urges this Senate and this I further ask unanimous consent that done in an hour. Congress and this country to spend the vote with respect to the Hutchison Mr. REID. Will the Senator yield? somewhat more on education, again amendment on the marriage penalty Mr. LOTT. Yes. wisely—I would not spend much more occur immediately following the Mr. REID. I say to the leader and on education without imposing stand- above-described vote and there also be Members of the Senate, the staff will ards on teachers and standards on pro- 15 minutes for concluding remarks to be working all night trying to clear all motion, which makes a great deal of be equally divided beginning at 8:45. of these amendments. In addition, sense—I support wholeheartedly. I also ask consent that following the there is no rule that says if you call up There is another amendment in the conclusion of debate this evening, no your amendment, you have to have a area of education which I am intro- further debate time be in order other recorded vote. We can have voice votes ducing along with Senator SNOWE of than the concluding time as outlined on some amendments. Also, on some- Maine, Senator BAYH of Indiana, Sen- above. thing such as this, people have to de- ator SMITH of Oregon, Senator WYDEN I further ask unanimous consent that termine whether they want to offer the of Oregon, and Senator KOHL of Wis- following the two described votes amendment that has been filed. Just consin. It is a bipartisan amendment. above, the Senate begin the voting se- because it was filed doesn’t mean you We hope this amendment doesn’t be- quence with debate on any amendment have to offer it. came a football in the various views of or motion properly filed in the consent Mr. LOTT. You do have options: they reconciliation that we have. But it is agreement of July 29 limited to 2 min- can be accepted or taken by voice vote an amendment that is very simple. It is utes equally divided. or some insist on a recorded vote. an amendment to make up to $12,000 of The PRESIDING OFFICER. Is there As I see things, tomorrow we can fin- college tuition tax deductible and to objection? ish up at 2 or 3 o’clock, or we can be provide tax credit to help those saddled Mr. ROTH. Mr. President, I object. here at 5 o’clock tomorrow afternoon. I with student loans. Mr. LOTT. Mr. President, may I in- hope Senators will weigh carefully the We have introduced this amendment quire, what is the problem? need for their particular amendment. for two real purposes. The first purpose So we can clarify this, I think just a As far as amendments that have not relates to individual families. temporary misunderstanding, I suggest been thoroughly debated in committee, We are talking about tax cuts. But the absence of a quorum. when I talk to my constituents in New Mr. DOMENICI. Could I ask a ques- it is awfully hard to change the Tax York, and when I hear about constitu- tion before you do that? Code in that way. We will try to ac- ents from around the country, what is Mr. LOTT. I ask to withhold the sug- commodate Senators as best we can. the average person worried about? It is gestion of a quorum call. Mr. BINGAMAN addressed the Chair. Mr. DOMENICI. Might I ask a par- The PRESIDING OFFICER. The Sen- not the exact amount of taxes that liamentary inquiry? How much time ator from New Mexico is recognized. they pay as much as it is the big finan- remains on the 20 hours allowed by Mr. BINGAMAN. Mr. President, I cial nugget they have to deal with— law? yield 8 minutes to the Senator from buying a home in early family life, The PRESIDING OFFICER. Two New York. paying for the kids’ college in middle hours 42 minutes. Mr. SCHUMER. Mr. President, I life, and paying for health care in later Mr. DOMENICI. I thank the Chair. thank the Senator from New Mexico. I life. Mr. LOTT. Mr. President, I suggest rise in support of his amendment. Tonight, as we all go to sleep, there the absence of a quorum. First, I thank him for his leadership on will be millions of Americans worrying The PRESIDING OFFICER. The educational issues before introducing about how they are going to pay for clerk will call the roll. this amendment. I would like to speak their kids’ college education. Tuition The legislative clerk proceeded to for a couple of minutes and talk about has gone up far more than the rate of call the roll. another educational amendment that inflation. In fact, if you look at the Mr. LOTT. Mr. President, I ask unan- will be before us tonight or tomorrow. prices of everything since 1980, tuition imous consent that the order for the First, on the amendment of the Sen- has gone up more than anything else— quorum call be rescinded. ator from New Mexico, I have generally even more than health care. I believe The PRESIDING OFFICER (Mr. SES- considered myself a balanced budget the number is 250 percent between 1980 SIONS). Without objection, it is so or- type of person and Democrat. I backed and 1995 for middle-income families— dered. up the President a few years ago when families that do not really need much S9712 CONGRESSIONAL RECORD — SENATE July 29, 1999 other help, families that might make is not intended to be an amendment the appropriations process. It is what $50,000, or $60,000, or $70,000 a year. It that scores political points. It is an the Senator thinks they should add; seems almost unfair, after they strug- amendment intended to better this therefore, it is called a sense of the gle to pay that tuition bill, for Uncle country and help middle-class families Senate. Sam to take his cut. This bill says that struggling to send their children to col- Over the decade under the budget res- won’t happen. This bill says that for lege. olution adopted, and I am not certain anyone at the 28-percent bracket or I urge its adoption by Members on it will be implemented because it is not lower. So the numbers will go up fairly both sides of the aisle. binding, we actually vote every year on high—$90,000—for a single head of I thank the Chair. the appropriated accounts. So all Mem- household, and $105,000 for a two-family Mr. ROTH. Mr. President, I yield 5 bers know, the education function in head of household. You can deduct minutes to the distinguished Senator that budget resolution has $570 billion, your tuition. from New Mexico. an average of $57 billion a year, while We rarely give relief to those in the The PRESIDING OFFICER. The Sen- we are spending $47 billion this year. middle class. Too often many people in ator from New Mexico is recognized. I don’t know where the other graphs the middle class—the majority of Mr. DOMENICI. Thank you, Mr. came from that are talking about what Americans—think most of what we do President. I thank the chairman. we are doing to education. Those num- helps the very poor or the very rich. I say to Senator BINGAMAN that I bers are from the budget resolution. But this proposal is aimed right at would not rise in opposition to his Nobody knows at what level edu- what bothers them, and with good rea- amendment if it was not, as I view it, cation will be funded on the discre- son. It is going to be tremendously an implication that what I propose is tionary side of the budget of the United helpful to millions and millions of going to hurt education. States of America budget. They will Americans who right now think they Since that is the case, I must tell the not know any more if Senator BINGA- are not getting much out of the tax Senator that I think he is wrong. So I MAN’s sense of the Senate passes. They proposal on either side of the aisle. will proceed, as I must, to tell him will say we should not cut taxes by $120 There is a second reason to do this; what we did with education and what billion, because if we don’t, we might that is, for the good of the country. As we can do with education based upon put it in education. Having said that, I merely want to we move into an ideas economy—as I the money that is left over after the look at the budget of the United States mentioned in my remarks about the tax cut is effective. and the surplus that is created and amendment of the Senator from New I do not know where the chart comes then start with a freeze on everything, Mexico—education is the key. The bet- from that the Senator has up there. including education. And it may be the ter educated we are, the better we do But I would assume it comes from Senator is starting with a freeze and as a country. In fact, I worry when you somebody who assumes there is no money left over after the tax cut and, assuming it continues. How much is look at some of the rankings in terms the surplus? It is $3.371 trillion. What of education when compared to other therefore, everything will be reduced, and over the next 10 years there will be do you do with it? We put $1.9 trillion Western countries. in the trust fund for Social Security But every time a well-prepared, in- no inflation added to any function. If because it is there. We then say: Let’s telligent student isn’t able to go to the that is the case, it is wrong. But if Senators want to look at the cut taxes in a gradual way over a dec- college of his or her choice because of ade at $792 billion. Then we ask how that tuition bill, not only does that in- budget resolution we prepared, we ex- pect they will stand up and say no, much is left over to spend on discre- dividual lose, not only does their fam- tionary programs and Medicare. It there is not enough money in this ily lose but America loses. Every time turns out to be $505 billion. budget for education. we don’t use and fulfill the potential of I could not believe under any cir- What we did in that budget resolu- a young mind, not only does that per- cumstance that the Congress of the tion, which is not binding—just like his son lose, not only does his or her fam- United States, be it Republican, Demo- resolution here is not binding; it does ily lose but America loses. crat, or whatever, would take that $505 It seems to me, as we move into the nothing for education—it is a wish list billion and spend it on education. I 21st century in an ideas-based econ- and cuts taxes. It reduces the tax cuts cannot believe that. There may be a omy, it is almost imperative that we substantially. It would be nice if the difference of opinion as to where it is have as many students in as good a col- Senator would tell us which $120 billion to be spent, but there is a whopping lot lege as they can academically achieve. and some he would take out of the tax of money for high-priority items. Right now that is not happening. But cut. I don’t know where the Senator got in this tax bill, if we were to make tui- But having said that, let me first his numbers. If the numbers were le- tion deductible up to $12,000, it would start by saying if you want to look at gitimate, I would be supporting him. I have a tremendous impetus. a budget resolution that passed the believe we ought to establish a priority A couple of other points on the pro- Senate which had $181 billion in money for education. If I thought we would posal, a bipartisan proposal, made by over a baseline that was frozen for the not have enough money for the edu- myself and Senators BAYH, KOHL, and next decade on the discretionary side, cation function to be appropriated by WYDEN on this side of the aisle, and and ask what did it provide for edu- the appropriators, I might even be say- Senators SNOWE and SMITH on the cation—an assumption just like the as- ing don’t cut taxes that much, but I other side of the aisle: sumptions of the Senator from New don’t think that is the case. I don’t No. 1, it is completely offset. So we Mexico—I would like to tell you what think we need to do that. There will be are not increasing the tax bill. We it does. money around for education. It will mainly do this by delaying certain In 1999, that function on education grow dramatically because it is a high- things in the existing bill for a year. had $47 billion in it. By the year 2009, it priority item, and there is $505 billion No. 2, it does not cut off until, as I has $60 billion in it. It specifically pro- over a freeze to be allocated for discre- said, you move from the 28-percent vided that education initiatives receive tionary programs, and somewhere bracket and above that. So 90, 95 per- an added amount of $37 billion over 5 around 70, 80, or 90 for a Medicare pre- cent, a huge percentage of America’s years, $101 billion over 10 years. scription drug reform fix. families, would benefit—all but the ex- The Senator from New Mexico, my I regret doing this, but I do not think tremely well-to-do. colleague and my friend, could ask, I want New Mexicans to think what I No. 3, tuition is deductible up to how are you sure that will happen? I propose will destroy education in the $12,000 a year. That is full tuition for am not. Neither am I certain that the manner that this sense of the Senate over 80 percent of all Americans. Even Senator’s sense-of-the-Senate resolu- implies. If it did not imply that, I for those who are going to a more ex- tion is anything but a wish list. How do would be for it and I would not be pensive school, it is a real help in we know it would happen? If we reduce speaking. terms of getting them there. taxes by the amount suggested, there Mr. BINGAMAN. Mr. President, I I urge my colleagues to please look is absolutely nothing to indicate there yield myself 4 minutes off of the at this amendment. It is bipartisan. It would be more added to education in amendment. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9713 I want to respond to my colleague vency of Social Security and Medicare, can reach on this issue. I look forward from New Mexico and indicate I do not it provides an inadequate level of in- to that debate, but for now I will sim- in any way question his motives, and I vestment in education. ply say that Senator BINGAMAN is certainly do not question his under- My own State of Virginia has long right: we need to pay more than lip standing of the budget. He is an expert been proud of its history and support of service to our most critical societal in- in that. He has demonstrated that re- education. You may recall it was a Vir- vestment—education. I thank the chair peatedly since I have been in the Sen- ginian who is widely acknowledged as and I yield back any time remaining to ate. ‘‘the father of free public schools in the Senator from New Mexico. I do think there is a genuine mis- America.’’ Thomas Jefferson’s vision to Mr. BINGAMAN. Mr. President, how understanding or disagreement about provide a free public education to all much time remains? what we are talking about in the size citizens was designed to preserve a The PRESIDING OFFICER. There re- of this surplus. I hear my colleague say fledgling democracy. But at the dawn mains 5 minutes. we have, over the next 10 years, $33.371 of a new millennium, a strong and vi- Mr. BINGAMAN. I yield the remain- billion in surplus that we have to spend brant system of public education has der of our time to the Senator from or we have to use for tax reductions. many other benefits as well. New Jersey. That is substantially more than the Education breeds opportunity. And it The PRESIDING OFFICER. The Sen- CBO indicated we had. They said we is opportunity that knows no class, no ator from New Jersey. had $2.896 billion. There is a substan- gender, no race, no income level, no Mr. LAUTENBERG. Mr. President, I tial difference there. Taking the figure street address. Because when we invest thank my colleague from the class of I was given, $2.896 billion, I understand in education, we invest in our people, 1982. You are looking at the entire we are using by far the largest part of we invest in the economic strength of class here, Senator BINGAMAN and me. that for this proposed tax cut. our communities, and we invest in the The Senator and I are the remainder of My colleague says that is not the international competitiveness of our the class of 1982. We thought we were a case, that there is still $505 billion re- Nation. small class then, but we have gotten maining for Medicare and discre- That is why I have always believed smaller and we have hung on tena- tionary programs. I am just not clear that all three levels of Government— ciously. in my mind where that money comes local, state, and federal—should work One of the things we agree on is the from. The figures I have for the total of together in the area of education. That need to provide the kinds of services to the surplus do not allow for that is why I believe that the Federal Gov- our country that we are pledged to, not money to be available for discretionary ernment can be a constructive partner only morally but by law, by laws estab- programs and Medicare. The figures I in education. And that’s why I believe lished over a period of many years, in- have received lead me to conclude that this tax bill falls short of our responsi- cluding such services as our commit- there will be major cuts in discre- bility to our nation’s children and to ments to the veterans who fought to tionary programs if we are going to our nation’s future competitiveness. keep this country free, for the school- adopt a tax cut of this size. If there are The stakes for our country, and all who children who need to get a start in life cuts in discretionary programs, some live here, couldn’t be greater. and get on with their own opportuni- of those, of course, will be defense. Despite these stakes, the tax bill we ties. I believe, based on the time I have debate today still falls short in its in- What we see today in the discussion spent in the Senate, we will not cut de- vestment in education. In addition to we have just had, frankly, comes as a fense. I do not support the cuts in de- the concerns expressed by my friend surprise to me, a surprise because I fense, and I do not believe my col- from New Mexico, I am particularly serve on the Budget Committee as the leagues do either. I think we will fund concerned about the inadequate level senior Democrat. I looked at the fig- defense and we will fund increases in of school construction assistance pro- ures. We worked together to try to es- defense in the next 10 years in many re- vided in this bill. tablish a plausible base, a parameter spects. That means the discretionary Mr. President, we know that 14 mil- within which to work. But what I have domestic spending such as education lion children attend schools in need of heard is we just discovered gold. We has to be cut even more. That is the extensive repair or, in some cases, found $500 billion just laying around. concern that caused me to bring this complete replacement. We know that 7 No one else knew it, but it was found. amendment to the floor. million attend schools with safety code Since arithmetic is a relatively pure The point was made that I have just violations. And we know there are science and everything has to add up, put together a sense of the Senate thousands and thousands of trailers in one scratches one’s head and says: How which is a wish list. That is in many use because of school overcrowding— did we find roughly $500 billion more? ways true. I have said the Senate over 3,000 in Virginia alone. Loudon The distinguished chairman, a very should go on record as not wanting to County, Virginia, Mr. President will wise Member of the Senate, an out- cut the current level of funding for need to build 22 new schools to accom- standing expert on the budget, found education in this bill, and to the extent modate its enormous growth in student $500 billion that could be used to sup- we need to reduce the tax cut in order population. My home county of Fair- port the tax cut that is proposed at to ensure we do not cut current levels fax, VA has capital needs of $1.2 billion some $790 billion. Then there are inter- of funding for education, then reduce over the next ten years. est costs on that. the tax cut to that extent. But it isn’t just a Virginia phe- What I come up with, what the num- As I understand the figures, that nomenon; it’s a national crisis. bers say, is that we wind up with a means a $132 billion reduction in the And we have known about this crisis budget surplus of $32 billion—$32 bil- tax cut. That is what I have urged Sen- since 1995, when the GAO informed us lion. That is at the end of 10 years—$32 ators to support. that our national school repair needs billion. The elderly, the baby boomers Mr. BINGAMAN. I yield 5 minutes to total some $112 billion. We have known who are going to be retiring at that the Senator from Virginia. that we need to build and repair over time, ought to rest easy because they Mr. ROBB. Mr. President, first of all 6,000 schools across the Nation. And yet have $32 billion that is going to go into let me thank my distinguished col- we are considering a bill today which helping Social Security stay a little league from New Mexico for his contin- builds and renovates only 200 schools. more solvent—$32 billion that can be ued leadership on virtually every as- Mr. President, later in our debate, I used for other purposes. pect of education and our public re- will offer a motion to recommit the tax Mr. SARBANES. Will the Senator sponsibility in that particular area. I bill to the Finance Committee to force yield for a question? am pleased to join him on this amend- us to take another look at our prior- Mr. LAUTENBERG. I will be happy ment, and would say that I agree com- ities. I have recently introduced legis- to yield for a question. pletely with my colleague from New lation which combines various bipar- Mr. SARBANES. I would like to ask Mexico about the need to make critical tisan school construction proposals, the Senator about his chart about the investments in our future. Not only and which I hope brings us one step GOP baseline, if I might. does this tax bill fail to ensure the sol- closer to the compromise I know we Mr. LAUTENBERG. Please. S9714 CONGRESSIONAL RECORD — SENATE July 29, 1999 Mr. SARBANES. As I understand it, Every time I begin thinking we can have to be some increases as we go what the Republicans are now pro- have good discussion about this, I pick along, but I think the primary point I posing represents a cut of over $1 tril- up something, such as the Daily Report want to make is that there are also lion below—below what? Current for Executives of July 29 that is enti- going to have to be some decreases. spending levels? tled, ‘‘GOP Tax Plan Would Hurt There are going to have to be some Mr. LAUTENBERG. The baseline Schools, President And Administration cuts. that was originally proposed by CBO Aides Say.’’ Those are the kinds of things we are was to have the caps in place until the Clinton told representatives of Boys and going to have to decide. We cannot de- year 2002, 3 years hence. Then it was Girls Nation at the White House that the Re- cide here in advance, because some pro- assumed by the presentations that we publican tax plan would eliminate funds to jection is not reached, that we are have seen and that are here on the help 480,000 children learn to read. going to cut a particular program to chart, that now the baseline will de- On and on for other things. I know keep kids from reading—pick your own cline by virtue of no inflation allow- when I came to Washington, one of the favorite program, the worst thing you able for those years after it—none, main things I wanted to do was keep can come up with, and say that par- zero. children from reading. We spend a lot ticular program is going to be cut. Mr. SARBANES. None whatever? of time, we stay up late at night, fig- That is not true. That is not accurate. Mr. LAUTENBERG. That is right. If uring out how we can keep kids from That does not represent what the situ- you do that, you take over $400 billion learning to read. The President is just ation is. out of reality, out of the need to pro- verifying this with these young people. Again, we have to decide what is vide programs—$419 billion below I hope the President, as badly as he is going to be cut. We have to decide what CBO’s capped baseline. misleading them, has more credibility is going to be increased, taking a base- If you want to play with a figment of with the young people of this Nation line, taking a freeze, not including in- imagination, you can imagine maybe it than I think he has. flation, and adding $505 billion to it will be less than that. Maybe we will be Now we hear about cuts. We have over 10 years. able to cut out the programs for vet- been hearing about cuts of 30 percent, Why do I say that some things ought erans and the other programs that are cuts of 40 percent, and now cuts of 50 to be cut? One of the things—I guess necessary, just cut them and play pre- percent. People must wonder what is the primary thing—we are supposed to tend. going on. Senator DOMENICI says that is be doing in the Governmental Affairs Mr. SARBANES. As I understand it, not accurate. He points out that al- Committee is seeing how our Govern- it would take a cut of about 40 to 50 though we have a baseline freeze after ment is operating. We spend an awful percent in the program levels in order the spending caps are lifted, there is an lot of time in oversight in that com- to reach that figure on the GOP base- additional $505 billion in our budget mittee which I chair. We see agencies, line. Mr. LAUTENBERG. The Senator is proposal that can be used for whatever Departments of Government, year after absolutely right. It would take a cut of discretionary spending this President year come before us and they have been 50 percent. So that is how we get there. and this Congress decide they want to delineated by the GAO as prime objects It is a poor way to do business. spend it on. of waste, fraud, and abuse. They are on The PRESIDING OFFICER. The time How do we come up with these cuts? the list year after year, but we keep of the Senator has expired. Who yields It is a Washington, DC, cut. A Wash- funding these programs. We keep in- time? ington, DC, cut is when you project out creasing the funding for these pro- Mr. THOMPSON. With the com- what you want spending to be, and grams, whether they are working or mittee chairman’s approval, I yield then any spending that is less than not. There are billions of dollars of myself 10 minutes. that constitutes a cut. It is not a real scarce resources diverted from their in- The PRESIDING OFFICER. Without cut. It is an increase, but it is less than tended purposes many times in waste, objection, it is so ordered. what the projection would be. fraud, and abuse. Mr. THOMPSON. Mr. President, on If you are going by that kind of ra- The President in his budget does not the amendment there are certain basic tionale, then the President is proposing find one agency, that I can determine, things we can all agree with about edu- cuts up to 26 percent, if you figure in that he believes could be operated cation. I think most of us realize the his Social Security plan, because he more efficiently or in which money economic prosperity we have today has does not really keep up with the pro- could be spent better. All of these pro- to do with our productivity. Our pro- jections that are being argued. grams deserve an increase by defini- ductivity, in turn, has to do in large Go back to 1991 and project increases tion. They are Federal Government part with the technological advances from 1991 up to today. Look and see programs. They deserve an increase. If we have had, and that, in turn, is based what that is. It has been about 4.2 per- you want to reduce funding for a De- upon a well-qualified workforce. The cent during that period of time. What partment or an agency, then you can needs for that kind of workforce, that the other side is doing is projecting pick the program on the other side kind of background and training in the that out ad infinitum. If we cut back they say you are cutting. future, are going to be even greater be- any of those programs, even though the The honest truth is that no one cause we are exploding with informa- dollar is an increase, it is less than knows really how much the Federal tion in an information age for sure. what they projected it ought to be, so Government loses annually cumula- There is no question about that. Our that constitutes a cut. tively to waste, fraud, abuse, and error. economic stability and security in the The fact is, if we did what our col- One reason is that most agencies do long term in large part is going to de- leagues on the other side suggest, we not keep track of such losses. We try to pend on the education system we have. would lock in basically the projected keep track for them, as best we can. That, of course, does not necessarily increases we would have—inflation Here are a few things we have equate to Federal spending on edu- plus—we would lock those in, basically learned: The Health Care Financing cation. Unfortunately, for some years making them, I suppose, mandatory Administration made erroneous Medi- now we have seen that we have almost programs instead of discretionary pro- care payments that siphoned off be- an inverse relationship between the grams. We would not do what Congress tween 7 and 14 percent of the overall amount of Federal money spent on edu- is supposed to do, and that is sit down Medicare budget, $12 billion to $24 bil- cation and the quality of education we and decide what our priorities are, lion, depending on which year you are seem to be getting. Nonetheless, we all what programs should be cut, and what talking about. In 1997, it was $24 bil- agree there is a part of this effort that programs should not be cut. lion. In 1998, they improved; it was should fall on our shoulders. This Obviously, many of us think some only $12 billion. amendment suggests our budget does programs should be increased. We are The Supplemental Security Income not address this education problem suf- hearing a lot now about our hospital Program—cumulative overpayments of ficiently. programs, our children’s hospitals, vet- $3.3 billion, including newly detected I think it has been a good discussion. erans, certainly military in some re- overpayments of $1.2 billion just last I think it is one we ought to have. spects. Certainly, there are going to year. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9715 The Department of Housing and Urban Development, Education, Labor, been in those Departments had it not Urban Development made overpay- Veterans Affairs—and two independent been siphoned off, had it not been sto- ments in its rent subsidy program of agencies—FEMA and the Social Secu- len, had it not been wasted. It would almost $1 billion. rity Administration—all running these have been reflected in the budgetary The Department of Agriculture made programs, overlapping, duplicating requests when they came before us. overpayments in its Food Stamp Pro- with $1.2 billion in obligated funds ad- The requests would be less, and we gram that amounted to about $1 bil- dressing the homeless. GAO found would be giving them less money if lion, or 5 percent of the total program. these programs provide many of the they were operating halfway the way I have others here. The Federal tax same services, such as housing, health they are supposed to. debt. We have Federal tax debt and care, job training, and transportation, My point is, again, this idea that our nontax debt delinquencies, money owed and more than 20 programs operated by friends on the other side of the aisle to the Government, not collected, of four different agencies, offsetting hous- have, that they want to have this pro- $150 billion. I have other items. I men- ing, such as emergency shelters, transi- jected rate of increase that we can’t de- tioned the Medicare payments. tional housing, and other housing as- viate from at all, is a notion that The Department of Energy: Through sistance. would go against every basic precept of 1980 to 1996, the Department of Energy In another report, the GAO identified efficiency and the proper functioning terminated before completion 31 major 26 Federal grants at a cost of approxi- of Government. systems acquisition projects after ex- mately $28 million that exist to help I yield myself another 3 minutes. The PRESIDING OFFICER. Without penditures of over $10 billion. They evaluate the effectiveness of various objection, it is so ordered. spent $10 billion and then terminated school-based violence programs. I know Mr. THOMPSON. We need to, as we the projects; $10 billion was essentially that is something that the Presiding go along, take that $505 billion that wasted. Officer and I have talked about many our budget sets aside for these pro- Defense contract overpayments: No times, as to how we get our arms grams and have every one of them one knows how much the Government around this. But $28 million to evalu- come up here and justify themselves. overpays each year in contracts for ate these violence programs in schools, Some of them need increases. Some of goods and services. However, during to see which of them are doing any them need cuts. In my opinion, some of the recent 5-year period, defense con- good? At least three Federal Depart- them need total elimination, and I tractors returned $4.6 billion in over- ments—Education, Health and Human make no apologies for that. payments to the Department of De- Services, and Justice —support school- But the idea that we are cutting this, fense. based violence prevention research and and we are cutting that, and we are Earned income tax credit, $4.4 bil- programs. going to keep people from reading, the lion. However, GAO found that these indi- President of the United States telling I mentioned SSI. vidual Departments have not mounted these young boys and girls that we are Student loan defaults, $3.3 billion. a comprehensive strategy for address- going to cut 480,000 children from Food stamp overpayments, rent sub- ing school violence. They are just all learning to read, that is kind of a new sidy. kind of out there doing their own low. We do not know really what to do A total of $196 billion. thing—getting some money, coming to any more with this stuff. The first I yield myself another 5 minutes. Congress, saying: My goodness, you thing you do is get kind of angry, and Mr. President, $196 billion, and that can’t cut back on this. You have to then you are just kind of sad, shaking is just on the waste, fraud, and abuse give us some money. We fund these your head, that that sort of stuff is side. This is what is going on with re- various programs that are all out there coming out of the White House. gard to our Government now and these doing their own things—uncoordi- So let’s get back to the facts. Let’s agencies across our Government. nated—obviously, wasting a good deal get back to reality. We can have a good Look at the cross-cutting and the du- of money. debate as to how much money we plication, the hundreds of programs It is not that you do not want the ef- ought to spend on these programs. that are all designed to do the same fort made; it is that you want to have That is what we ought to do. But let’s thing. The left hand of Government the effort made with a little common not try to convince the American peo- does not know what the right hand is sense and not take people’s hard- ple that we have made a determination doing. No one is taking action to sort earned money and throw it down a rat that somewhere in our budget we are through this morass to find out which hole. cutting kids off from learning to read programs are working and are not. We have a fragmented Federal ap- or that we are doing any of these other They keep being refunded every year at proach to ensure the safety and quality things—any of these other scare tactics the full amount or an increased of the Nation’s food. As many as 12 dif- that are always used by people who amount. ferent agencies administer over 35 inef- think that the American people are not According to the GAO, in program ficient programs, putting the American quite as smart as they really are. area after program area, unfocused and public at greater danger of foodborne I yield the floor. uncoordinated cross-cutting programs illnesses. But there have been virtually Several Senators addressed the waste scarce funds, confuse and frus- no decreases for nonmilitary discre- Chair. The PRESIDING OFFICER. Who trate taxpayers and other program cus- tionary programs in the President’s yields time? tomers, and limit overall program ef- budget. Several Senators addressed the fectiveness. This is supposed to be part of our job. Chair. Last year Congress tried to address That is why we passed the Performance Mr. ROTH. I yield 10 minutes to the the number of education programs. We and Results Act. These agencies are Senator from Pennsylvania. are all for education. We are all for now supposed to come to us in Con- The PRESIDING OFFICER. The Sen- spending education money wisely. We gress and tell us of the effectiveness of ator from Pennsylvania. have $505 billion of discretionary their programs. I assume that because Mr. SANTORUM. I thank the Chair spending set aside, some of which we we want that information, we want to and thank the chairman for yielding can spend on education. But we found do something with it, and what we me time. out there were 39 Federal agencies run- want to do with that information is not I rise to talk about two amend- ning more than 760 education programs use it to continue to fund these Depart- ments—not the Bingaman amend- at a cost of $100 billion a year. Is that ments that are wasting money and per- ment—two amendments that I have effective use of taxpayers’ money? mitting fraud to be perpetrated upon added to the list of 100-some amend- One example is homelessness where us to the tune of billions and billions of ments. I hope that we can accept one of 50 Federal programs, run by eight dollars. them. We are working very hard to get agencies, seek to provide services to Some of these programs are manda- that done. I have agreed to enter into homeless people. We have eight agen- tory spending programs. Some of them a colloquy with the chairman on an- cies—the Departments of Agriculture, are discretionary spending programs. other one. I would hope that we will Health and Human Services, Housing, But it is all money that would have work in conference. S9716 CONGRESSIONAL RECORD — SENATE July 29, 1999 THE AMERICAN COMMUNITY RENEWAL ACT Governor George Bush, and many oth- The second bill I am going to be talk- The amendment that I have agreed to ers running for President. They are ing about, which we have introduced enter into a colloquy with the Senator lifted up because they found that—you and I hope we can get adopted, is a from Delaware on is the American know what?—faith works. There is a very simple provision. Community Renewal Act. The Amer- very utilitarian reason to do this—it Before I start, in this bill—I con- ican Community Renewal Act is part of works best; it is cheapest—but that is gratulate the chairman—is a raising of the House bill. It was one of the center- not the best reason. The best reason to the low-income housing tax credit allo- pieces of the House bill and one that I do this is because it transforms lives. cation. The current cap, $1.25 per cap- very strongly support as chairman of It does not just give people a better job ita per State, was established in 1986 the Renewal Alliance, which is a group or get them off drugs. It transforms and has never been raised. Due to infla- of Senators and Congressmen who have their spirit, which is the best thing tion, credits under the current alloca- been advocating nongovernmental so- needed in America’s poorest commu- tion have lost about 50 percent of their lutions to the problems that face our nities. value. The chairman’s bill raises the inner cities and impoverished rural What we do with the charitable tax allocation to $1.75 per capita over a 5- areas. credit is, I believe, the most trans- year period. The low-income housing It is important for us, when we pass formational thing we can do in this tax tax credit is the largest and, I think, a tax bill that provides tax relief to bill. most efficient housing program be- taxpayers, as we should, that we look The second part of the American cause it marries public and private re- to those who do not pay taxes and see Community Renewal Act targets not sources of production in rehab of af- what we can do to help lift them into the soul but the economy. How do we fordable housing, rental housing that the sometimes beleaguered status of create jobs so when we transform peo- we have in America. It is a tremendous taxpayers. ple they can get into productive work, success. It is important for us to be able to not taking a bus out to the suburbs to My amendment to the chairman’s reach down into those communities work in a mall, but transform their bill is based on legislation which raises that are struggling. I have many of own communities with home ownership the cap and indexes it for inflation. them in my State. We work very hard and economic opportunity and entre- This legislation already has 70 cospon- in communities, from Philadelphia to preneurial investment. sors in the Senate. The only piece left smaller towns like Chester and We provide for 100 renewal commu- out of the chaiman’s bill is an indexing McKeesport, and work with community nities, targeted with progrowth incen- of that per capita allocation from the groups, nonprofits that are out there tives, tax benefits, regulatory relief, year 2006 on. That costs a whopping $43 trying to make a difference, working savings accounts, brownfield cleanups, million, not a big ticket item. And with the local officials in trying to pro- a comprehensive approach to inner cit- frankly, we pay for it. In fact, as the vide economic opportunity, as well as ies. And at least 20 percent of these chairman will be delighted, we more cultural renewal for the communities communities have to be in rural areas. than pay for it in the amendment that that are in blight. This is in the House bill. This is where we have. So there is extra money The American Community Renewal the House stepped up and said, yes, we around for other things that may be Act, I believe, is the right message for are for tax relief. We have overpaid, done. We think this is a high priority. those communities, is the right direc- but we will not leave any American be- We think, again, we have to provide tion, and that is through empowerment hind. We are going to reach down and affordable housing. This is a program and through working with the local make sure every American has the op- that works. This is a program that has faith-based and local community devel- portunity to be a taxpayer, to con- bipartisan support and something that opment organizations, helping them tribute to the economic future of this can say to people, as we have in this pull themselves out of the difficult sit- country. bill already, say to people who may not uations they find themselves in. A renewal community must do some be big taxpayers and get big tax relief The American Community Renewal things. It is not just a handout to the that we are going to provide some re- Act has two parts. No. 1, it provides for community. They have to commit to lief in the form of better affordable a charitable tax credit. This is a State- reduce local tax rates and reduce fees housing, more affordable housing for based tax credit. It allows for Federal within the zones. So yes, we are going those who may not be taxpayers now block grant funds to be used by States to provide some incentives, but they but hopefully, through the efforts here to provide a tax credit to individual have to do the same. They have to in reducing taxes, getting this econ- taxpayers who give money to non- partner with us. The States have to omy—not getting it but continuing profits that spend over 75 percent of eliminate State and local sales taxes, this economy to grow in the future, we their money helping low-income indi- waive local and State occupational li- will participate in that. viduals. So this is a way for the Gov- censing regulations and other barriers This is one of those step-ups, by pro- ernment, instead of spending more to entry for entrepreneurs in these viding quality, affordable private hous- money on Federal or State programs, poor communities where it is so hard. ing, rental housing, which has, again, to take the money that the Federal It is a lot harder to put up a store been an incredibly successful program. Government gives to run Federal pro- front in an area where crime is high, I hope, again, that we can include the grams and say: Let’s give it directly, where the services are not as good, amendment on the low-income housing unaltered, untainted, directly to those than it to set up one in the suburbs. It tax credit in this bill and go to con- organizations—many of them faith- is a lot more expensive. It is harder to ference with that here in the Senate based—that really are out there on the get employees, harder to maintain se- bill. Secondly, I implore the chairman front line, compassionate organizations curity, harder to get people to come that when we get to conference to in- that are out there across the table into your establishment. So they need clude the American Community Re- from people who are in need, people some help. This is the kind of help we newal Act to make sure that every who have problems. want to partner with. We will provide American has the opportunity to rise. They are not behind a bulletproof some incentives, the locals, the State. I yield the floor. glass at a welfare office passing out It is a partnership. Let’s really work The PRESIDING OFFICER. Who checks if you have the right number on together to make this happen. yields time? your card. These are people who are in I fervently hope when we bring this Mr. BAUCUS. Mr. President, I yield the trenches who are making a dif- bill out of conference that the Amer- 10 minutes off the bill to the Senator ference, who are transforming lives ican Community Renewal Act will be a from New Jersey. every single day, and doing it not be- part of that so we show, as I believe The PRESIDING OFFICER. The Sen- cause they get paid to do it or because this bill does, show that we care about ator from New Jersey. there is a Federal law they have to do all Americans in providing relief, yes, Mr. LAUTENBERG. I thank my it; they do it because they love their tax relief, but relief from the difficult friend and colleague from Montana. neighbor. times that many Americans are going Mr. President, tomorrow I will be of- Those organizations have been lifted through in our inner cities and poor fering an amendment on behalf of my- up recently by the Vice President, by rural areas. self and Senator FEINGOLD. This July 29, 1999 CONGRESSIONAL RECORD — SENATE S9717 amendment is very simple. It directs cred: Touch not a hair on that Social have medical care through the rest of the Finance Committee to change the Security reserve that we are saving for your life—except they cut the funding. bill so that it does not raid Social Se- the elderly, which we promised them There may be a few Republicans who curity surpluses in any year to pay for would be theirs. When we finally have would support cuts such as that. But tax breaks. a chance to guarantee its solvency, there is no way cuts that size would The motion stands for a very simple that promise, frankly, was an empty ever win a majority. It would be foolish proposition. Social Security surpluses promise. to assume otherwise. should be used for Social Security, not Look at the numbers. If you consider My motion is simple. It tells the Fi- for broad-scale tax breaks that pri- both the direct revenue losses and the nance Committee to go back and fix marily benefit special interests and additional interest costs, this bill this bill so that it doesn’t use Social wealthy individuals, not for tax breaks would raid Social Security surpluses in Security surpluses in any year, bring it that disproportionately benefit the each of the second 5 years after enact- back to the Senate within 3 days, and wealthy, not for anything that would ment. We are talking about 10 years then let’s consider it. I don’t think it is make it more difficult for baby from now. The raid in 2006 would take asking much. It is not going to hurt boomers and other Americans to enjoy $5.7 billion. That would increase to anybody if the Senate waits another 3 a secure retirement. $10.2 billion in 2007, to $24 billion in days before resuming work on this bill. This ought not to be a controversial 2008, and $23.4 billion in the year 2009. But lots of people will be hurt if the proposition. After all, both parties This is inconsistent with the Repub- Senate abandons its principles and uses have been arguing along the same lines licans’ own lockbox. It would violate a Social Security surpluses for tax for most of this year. Democrats cre- principle that is meant to protect all breaks that disproportionately benefit ated a lockbox to prevent Social Secu- Americans who are depending on Social the wealthy and special interests. That rity surpluses from being used for Security for their retirement. These would be a serious mistake. other purposes and to protect Medi- are people who spend their lives work- I urge my colleagues to support this care, and the Republicans vowed to ing hard, playing by the rules, contrib- motion when it is in front of you. Let’s support that concept. But actually, the uting their FICA taxes to the Social fix this bill and protect Social Security lockbox proposal that was introduced Security trust fund. In fact, millions of surpluses. Let’s keep the promise we by the Republicans has a huge loophole seniors depend on Social Security just made to the baby boomers, those who and does nothing for Medicare. to make ends meet, no luxury included will be retiring, that Social Security Medicare is perhaps the most impor- there. Many of these people have high will be extended as far as we are phys- tant program that exists in this coun- medical expenses. It is a natural phe- ically able to do so. try. Medicare is for the elderly. Medi- nomenon. Thank goodness we are liv- I yield the floor. care is the one program that people ing longer, but in that living illnesses Mr. ROTH. Mr. President, I yield the have to have standing by in case an ill- do occur. Some have trouble getting remaining 6 minutes we have on the ness strikes, which is an occurrence around; they are physically impaired. amendment to the Senator from New that is not infrequent when one Many are really struggling. It is Social Mexico. reaches 65 or retirement age. Medicare Security that keeps them out of pov- Mr. DOMENICI. Mr. President, there can prevent a catastrophic illness, but erty. For these people, saving Social won’t be time tomorrow to say what I also can prevent a catastrophic finan- Security is not just an abstract prin- am saying tonight. That is why I came cial problem. So we support extending ciple, a slogan; it is critical to their down. I congratulate the Senator from Medicare for as long as we possibly very existence. Delaware, Senator ROTH, and the Fi- can, and the projection now is that That is important to remember. It is nance Committee for a fine job. though Medicare would be insolvent in important to remember that the num- First of all, I am kind of infuriated, 2015, we see an opportunity to extend it ber of Social Security beneficiaries will but I will keep my emotions down. The to 2027. grow by 37 percent between now and President of the United States has There did seem to be broad agree- 2015. By 2014, Social Security taxes will gone beyond what anybody would be- ment from both parties that Social Se- no longer be sufficient to cover month- lieve when today, in front of a bunch of curity surpluses should not be touched ly expenses. So we need to prepare. At young people, he as much as said the for any other purpose, that they should a minimum, that means not using So- Republican plan will make sure you be used only to reduce publicly held cial Security surpluses for anything don’t even learn how to read. That is debt. I was surprised, to put it mildly, else. disgraceful because the truth of the to discover that the Republican tax bill I know how my friends on the Repub- matter is, if the Congress wants to before us actually spends Social Secu- lican side will react to this. When con- spend more money on education after rity surpluses. Deny it they might— fronted with these numbers, they will this tax cut, there is plenty of money and one need not be a mathematician; have to admit that this bill spends So- to do it. If the President is persuasive the arithmetic is pretty simple to see— cial Security surpluses. But that is not enough next year, he can get more but, in fact, the bill before us spends really a problem, they will say, because money for education because there is Social Security surpluses in each of the years and years down the road Con- more money to spend. second 5 years after the bill’s enact- gress will somehow or other cut pro- The second thing is not at that level ment. It starts in 2005. grams such as education and the envi- for me, but Senator LAUTENBERG is just This chart explains the problems. ronment to make up the difference. flat wrong. Do you know who was Consider, for example, what happens That is an empty promise, an empty spending the Social Security surplus? beginning in 2005 under this legislation. lockbox, it is completely unenforce- The President was. In fact, he even The non-Social Security surplus that able, and it has zero credibility. Con- sent to us his first proposal and said, year will be $88.6 billion. But this bill, sider how deep these cuts would have only save 62 percent of it, spend the the way it is laid out, would cost $89.9 to be. Let’s assume the Republican rest of it. He said, we will save it over billion. In other words, this bill would Congress funds defense programs only 15 years, so don’t worry year by year use $1.3 billion in Social Security sur- at the levels proposed by President about putting it in the trust fund. We pluses that very year, 2005, not a long Clinton. After 10 years, domestic challenged him on that. He came back way away. But the damage doesn’t stop needs—everything from education, to in his midsession review and said: Re- there. environmental protection, to the FBI— publicans, you are right: Let’s put 100 This legislation would increase debt, would have to be cut by roughly 40 per- percent in. So we put 100 percent in the and that would lead to higher interest cent. Is that credible? A 40-percent cut lockbox, into security. So I don’t un- costs. In 2005 alone, these additional in- in student aid? A 40-percent cut in derstand what Senator LAUTENBERG is terest costs would eat up another $10.9 health research? A 40-percent cut in talking about. billion of Social Security surpluses. So veterans’ programs? That always gets Having said that, let me talk about the raid on Social Security that year to me because the promises made when this bill because it is a very masterful would equal $12.3 billion. This is after they are recruiting, when people sign bill, considering where we are. First, the promise that Social Security is sa- up, are that we will make sure you there is no question that marriage, S9718 CONGRESSIONAL RECORD — SENATE July 29, 1999 saving for retirement, and dying should it more accessible, and we have made There will be 16 million families eli- not be taxable events as we enter the more advantageous tax laws. gible for HOPE and lifetime learning new century. If there is anything we Their Tax Code is notorious for giv- credits, but 11.3 million would receive have learned, it is that we need to en- ing a tax break on the one hand and zero or less than the full credits as a hance and praise marriage, not punish then taking it away on the other. That result of the AMT. it. We need to encourage saving for re- is the alternative minimum tax, and it The bill recognizes that all family tirement, and we should not tax the works in that fashion. This bill that expenditures are not equal. This tax event of dying. Isn’t it wonderful that has been put before the Senate protects we have fixed all of those to a great ex- the child credit, and it protects edu- bill recognizes that education is impor- tent in this bill? What is the matter cation credits. tant and provides $12 billion over ten with that? Mr. President, and fellow Senators, years in tax relief. The bill includes Mr. President, that is what you are there is much more that can be said education savings accounts to help 14.3 going to be vetoing when you veto this about it. I suggest that this bill will do million families. Seventy percent of bill. more for millions of Americans. these education tax benefits goes to Alternative minimum tax. That is, Taxes are too high if measured by families with incomes less than $75,000. the alternative minimum tax should what is needed to fund government. It makes employer provided education Taxes are too high if measured by not turn the child care credit, edu- assistance permanent. In this ever historical benchmarks. The average cation credit, HOPE education tax changing technology-driven world, it is family is paying twice what they paid credit, and foster care credits into essential that workers pursue life long phantom tax relief, not worth the in 1985. The tax burden is 54 percent heavier learning and complete graduate de- paper they were written on because an when measured from President Clin- grees. The bill also makes it easier and old alternative minimum tax, adopted ton’s first day in office to the end of cheaper for school construction. There during the oil boom, would make these 1999. Despite these record increases, are more than 1,700 schools in New credits unusable, so when you hear the Administration’s 2000 budget pro- Mexico that I hope will be helped by these funny words, ‘‘Let’s fix the alter- poses another $170 billion in new taxes. this initiative. native minimum tax,’’ it is hundreds The Senate bill starts out with and hundreds of thousands of middle- In New Mexico there are 331,815 pub- broad-based tax relief. Lowering the lic school students. It would be wonder- income Americans who thought we bottom bracket gives a tax cut to ful if New Mexican—parents and grand- gave them an education credit, who every taxpaying family. The bill lowers parents started as soon as this bill is thought we gave them a child care the rate to 14 percent. I would have signed into law to open an account for credit, only to find that now the alter- liked to see it go even lower. native minimum tax takes it away. The bill also widens the lowest each of these 331,815 children. There That has been fixed. bracket so that more people can earn would be no better investment in Taxes are too high if measured by more money without being forced into America’s future and these education what is needed to fund the Govern- the 28 percent bracket. This change accounts should help families meet ment. They are too high if measured will return 4 million Americans to the that goal. historically. The average family is pay- lowest bracket. It will return 151,000 When it comes to health care, the ing twice what they paid in 1985. The New Mexicans to the lowest bracket Tax Code doesn’t discriminate based tax burden is 54 percent heavier when and at the same time another 83,000 upon who you are, but rather upon who measured from President Bill Clinton’s New Mexicans will see their taxes cut. first day in office to the end of 1999. He you work for. Families shouldn’t re- This bill also provides significant ceive disparate tax treatment deter- may take a lot of credit for other family tax relief. things, but that is a fact. Despite these Saying ‘‘I do’’ at the altar has meant mined by who you work for. It isn’t fair record increases, the administration’s paying on average $1,400 more on April that one worker has health care pur- 2000 budget proposes another $170 bil- 15. Marriage shouldn’t be a taxable chased with pre-tax dollars; while the lion in new taxes. Unbelievable. event. This bill corrects this inequity sole proprietor or the employee of a Broad-based tax relief. The Senate for 19 million American families. small business has to pay for health bill starts off with broad-based relief, As more and more women have en- care with after-tax dollars. lowering the bottom brackets for ev- tered the work force, one of the fastest This bill provides 100 percent deduct- eryone in our families across America, growing family expenses is child care. ibility for health insurance for the self- and then in the bill, after lowering the In New Mexico, the annual cost can run employed. It also provides an above- rate to 14, they raise the brackets by from $3,133 to $5,200 per child. This bill the-line deduction that will phase in $10,000. That means that millions more increases the child care credit from 30 from 25 percent to 100 percent for every Americans will be paying the lowest to 50 percent for families earning less taxpaying American family. There are possible rate. than $30,000, and expands the eligibility 43.3 million uninsured people in Amer- This bill provides significant family for the credit to all families. With the ica, plus 10.2 million who have access relief, although not as much as my credit increase and the eligibility ex- good friend from Texas would like on to health insurance but decline to par- pansion, as many as 68,000 New Mexico ticipate because of the high cost. This the marriage penalty. families will be eligible for either a is a big problem in New Mexico. There I ask our seniors across America, as bigger credit or first-time eligibility. the President tries to frighten them The tax code is notorious for giving a are 340,000 uninsured New Mexicans into thinking we are harming them on tax break with one hand and taking it where someone in the family works. Medicare and Social Security when way in the other. The Alternative Min- The bill provides generational equity that is not the truth, wouldn’t you like imum Tax, AMT, works in this fashion. by providing a child care and a long it if your sons and daughters who are This bill protects the child care credit, term care credit. One in four families paying a marriage penalty because education credits, day care and other care for an elderly relative. This bill they are married are treated like other norefundable tax credits from being provides a tax credit and an extra ex- citizens instead of punished? I believe rendered unusable by the AMT. When emption for the in home care giver. senior citizens would be very grateful the AMT was created in 1986, 140,000 Expensing is the most efficient way for that for their children—the mil- people had to pay it. But by 2008: lions across America. There will be 40.6 million Families el- of reducing the cost of capital for new Child care: I think the seniors who igible for dependent child credits but investment. The bill provides $5,000 they are trying to frighten to death be- 24.8 million of those families would re- worth of new efficiency for every small cause they want an issue and not a so- ceive zero or less than the full credit as business by increasing the amount that lution would be thrilled to know that a result of the AMT. can be written off in the year the in- Chairman BILL ROTH and his Finance There will be 49 million familes with vestment is made. A tax policy that al- Committee made it easier for their nonrefundable credits—all credits ex- lows capital investments to be deduct- grandchildren to be taken care of under cept EITC—and 33.9 million of them ible in the year they are made maxi- child care and the enormous costs that will receive zero or less than the full mizes productivity, economic growth it imposes on a family. We have made credits as a result of the AMT. and job creation. When a company July 29, 1999 CONGRESSIONAL RECORD — SENATE S9719 doesn’t have to calculate depreciation With the first three quarters we can (I) a joint return for married individuals it saves 43 hours a year in tax prepara- save social security, reform medicare, not filing a combined return under 6013A, or tion. If we adopted a system of expens- provide adequate funding for domestic (ii) a surviving spouse (as defined in sec- ing we could save 106 million hours a tion 2(a)), and defense spending and pay down the On page 15, line 14, insert the following year in tax and recordkeeping. We national the debt. new paragraph (d) and reorder the remaining would also lower the cost of capital by The remaining quarter is for tax paragraphs accordingly: about one-third. cuts. (d) PHASE-IN.—In the case of taxable years This bill takes significant steps to re- The Taxpayer Refund Act before the before January 1, 2004— duce the estate and gift tax . The bill Senate is the best of plans. It lowers (A) paragraph (2)(A) shall be applied by would lower the top rate to 50 percent, rates. It encourages savings. It elimi- substituting for ‘‘twice’’— double the gift tax exclusion and get nates the worst of a bad tax code by (I) ‘‘1.778 times’’ in the case of taxable rid of the generation skipping transfer years beginning during 2001 and 2002 eliminating the marriage penalty; kill- (ii) ‘‘1.889 times’’ in the case of the taxable tax which can impose taxes as high as ing the death tax and ending the Alter- year 2003. 80 percent when a gift is left to a native Minimum tax to rescue the full (2) Alternative Minimum Tax: Modifications grandchild. benefit of the child care, foster care, to Section 206: Milton Friedman said and I agree, education, and other needed tax credits On page 32, line 3— ‘‘The estate tax sends a bad message to for families who otherwise unavoidably Strike ‘‘1998’’ and insert ‘‘2000.’’ savers, to wit: that it is o.k. to spend On page 32, line 14— would end up in the AMT. Strike ‘‘2004’’ and insert ‘‘2006.’’ your money on wine, women and song, If not tax cuts now, then when? The but don’t try to save it for your kids. (3) AGI Limitations on Contributions to the Democrats say—not ever. Roth IRA: Modification to Sections 302: The moral absurdity of the tax is sur- I say, If not tax cuts now, then what? On page 38, line 18, strike ‘‘2000’’ and insert passed only by its economic irration- The President’s plan answers: Spend it ‘‘2002’’ ality.’’ all. Grow government! (4) Gift Tax Exclusion: Modification to Sec- The death tax is also one of the most The Senate plan is synchronized to tion 721: unpopular taxes. While most Ameri- On page 236, line 11, strike all of Section our business cycle and the condition of 721 and insert the following new section: cans will never pay it, 70 percent be- the economy. Congress’ budget allo- ‘‘SECTION 721. INCREASE IN ANNUAL GIFT EX- lieve it is one of the most unfair taxes. cates 75 percent of the projected sur- Its damage to the economy is worse CLUSION. pluses over the next 10 years for paying than its unpopular reputation. The Tax (a) IN GENERAL.—Section 2503 (b) (relating down the debt. This ensures our long- to exclusions from gifts) is amended— Foundation found that today’s estate term fiscal virility. (1) by striking ‘‘$10,000’’ and inserting tax rates (ranging from 18 to 55 per- Even with our tax cut, our surpluses ‘‘$20,000.’’ cent) have the same disincentive effect will climb steadily as a share of GDP (b) EFFECTIVE DATE.—The amendments on entrepreneurs as doubling the cur- made by this section shall apply to gifts and our national debt will be paid off— rent income tax rates. NFIB called it made after December 31, 2004.’’ falling dramatically from 40 percent of the ‘‘greatest burden on our nation’s (5) Charitable Contributions for Individuals GDP this year to only 12 percent by most successful small businesses.’’ Who Do Not Itemize: Modifications to Section This bill makes a major stride. It 2009. our plan lowers the level of debt 808 more than the President’s plan, keeps On page 262, strike lines 15 through 17 and makes the R&E credit permanent. insert the following new paragraph: With a $3.2 trillion surplus, the only government from growing out of con- trol and gives the American people (c) EFFECTIVE DATE.—The amendments responsible, legitimate course of action made by this section shall apply to taxable is a tax cut. some of their hard earned money back years beginning after December 31, 2001 and Foolish are they who argue against in the form or a well-thought out tax ending before January 1, 2004. tax cuts. They say to working families, cut. (6) International Tax Provisions: Modifica- ‘‘I know what to do with your money The PRESIDING OFFICER. All time tions to Sections 901 and 902: better than you do. Give it to me so I has expired. On page 275, line 12, strike ‘‘2003’’ and in- can spend it for you.’’ Mr. DOMENICI. I yield the floor. sert ‘‘2004’’. The tax burden is high. People work Mr. ROTH. Mr. President, I ask that On page 278, line 13, strike ‘‘2002’’ and in- sert ‘‘2004’’. until May 11, of each year to pay their we temporarily set aside the amend- taxes. It is the highest tax burden since ment before us. Mrs. HUTCHISON. Mr. President, WWII. People pay more in taxes than The PRESIDING OFFICER. Without this amendment is cosponsored by Sen- they spend on food, shelter and edu- objection, it is so ordered. ator ASHCROFT of Missouri and Senator cation. Mr. ROTH. Mr. President, we are now BROWNBACK of Kansas. The Senate tax plan is an excellent opening up to the next amendment. This is an amendment that, very sim- plan that moves us toward lower, flat- The PRESIDING OFFICER. The Sen- ply, moves the marriage penalty provi- ter, simplier taxes. It moves our tax ator from Texas. sions from taking effect in 2005 to giv- system toward taxing income that is AMENDMENT NO. 1472 ing an early effect starting in 2001. By consumed and not income that is (Purpose: To provide for the relief of the beginning to phase in the doubling of earned, saved and invested. marriage tax penalty beginning in the year the standard deduction, we give mar- It’s the same old debate: one party 2001 and for other purposes) ried couples relief from the marriage wants to give the money to programs; Mrs. HUTCHISON. Mr. President, I tax penalty that I have to say I think we want to give the money to people. call up amendment No. 1472. is the most unfair part of the Tax Code A government big enough to give you The PRESIDING OFFICER. The in the Internal Revenue Code that we everything is a government that takes clerk will report. have in our country. everything away with a big tax bite. I The legislative assistant read as fol- It isn’t that anybody ever meant to can’t imagine anything more fright- lows: have a marriage tax penalty. Congress didn’t enact one. But it was a con- ening to the average taxpayer than the The Senator from Texas (Mrs. HUTCHISON), sight of grand government schemer for herself, Mr. ASHCROFT, and Mr. sequence that was unintended and un- rushing towards a trillion dollar pile of BROWNBACK, proposes an amendment num- expected when there were changes in extra tax payer dollars. bered 1472. the brackets in the Tax Code. We are Republicans say it is the best of Mrs. HUTCHISON. Mr. President, I going to correct it with this amend- times for a tax cut; the Democrats say ask unanimous consent that reading of ment. We are going to do it earlier it is the worst. Everyone quotes Chair- the amendment be dispensed with. than is in the bill. man Greenspan. When Greenspan is de- The PRESIDING OFFICER. Without I think Senator ROTH and Senator ciphered the oracle is that a tax cut is objection, it is so ordered. MOYNIHAN did a terrific job. They had a better than spending all the money. The amendment is as follows: very difficult time, particularly be- If the surplus were a dollar 2 quarters (1) On page 15, line 14, insert the following to cause they were quite responsible in would go for Social Security reform; paragraph (c): saying we were not going to have tax one quarter for high priority spending (A) Twice the dollar amount in effect cuts except as we have a surplus that —education, research, and defense. under subparagraph (C) in the case of— comes from income tax deductions. S9720 CONGRESSIONAL RECORD — SENATE July 29, 1999 The first decision the Finance Com- in their working years, but they get pe- across America who have stated what mittee made was to say: We are setting nalized in their retirement years. That they are paying in this marriage pen- aside Social Security. We are not going is not fair. alty. to touch it. This bill attempts to give them Listen to this from Tennessee: If we were to spend the Social Secu- catchup provisions for their pensions. My wife and I got married on January 1, rity surplus, we could have a lot more It is a great part of this bill. I support 1997. We were going to have a Christmas wed- tax cuts a lot faster. But they were it totally. ding last year but after talking to my ac- right. They said: No, we are not going We also have increases in charitable countant, who saw that instead of both of us to do that. Social Security was off the giving. This is a provision of mine that getting money back on our taxes we would have to pay in. So we postponed it. Now after table. was put in this bill by Senator ROTH. It getting married we have to have more taken We have smaller tax cuts in the early allows a person to roll over IRA con- out of our checks just to break even and not years because we are dealing with in- tributions to charities without tax con- get a refund. We got penalized for getting come tax deductions that should go sequences. If a person has saved and married and that is not right. back to the people who earned it. They done the right thing and sees that they I don’t know that it can be any clear- sent too much to Washington and we are not going to need their IRA money, er than what some of these families want to return it to them. they can give it to charity without tax have said. The question is, What is the most im- consequences. That is in this bill. From Maryland, Mark Patterson: portant of the tax cuts and the least we We are helping farmers with risk ac- My wife and I decided to have a family and can give? Senator ASHCROFT, Senator counts in this bill, so that farmers will get married. All we were concerned about BROWNBACK, and I believe the marriage be able to plan and put aside money was the love we had for each other. tax penalty is the highest priority for tax free until they need it in bad times. That sounds like a pretty good start. relief. Heaven knows, the farmers of this After 8 years of marriage and two children We are offering this amendment by country have seen bad times. We have we found all we worry about now is how to delaying a few of the other tax cuts $12 billion in education tax relief. come up with enough money to put a roof until later. We don’t change any of the Mr. President, this is a good bill. It is over our head, eat and have good day care for tax cuts in this bill. We do not elimi- a balanced bill. It has marriage tax our children. I am sick about the huge nate any of them. I support all of them. penalty relief, but it is in 2005. That is chunks of money taken out of every pay But we say the highest priority is the my only real concern about the fair- check by Uncle Sam just because we are married. marriage tax penalty relief and every- ness of this bill. Mr. SESSIONS. Will the Senator thing else can be delayed a little bit to Senator ASHCROFT, Senator yield for a question? give hard-working American families BROWNBACK, and I want to phase in Mr. BROWNBACK. If he will state his that relief. some of the other tax cuts a little bit We are talking about a schoolteacher further down the road and say to the 40 marriage penalty, I yield. Mr. SESSIONS. I received a commu- who makes $33,000 a year and a football million American married couples who nication from an individual who was coach who makes $41,000 a year. They are being penalized because they are divorced in January and found out, had are paying taxes, when they are single, married, we believe it is the highest they divorced in December, they would in the 15-percent tax bracket. They get priority to give relief. That is what we have saved almost $2,000 in taxes. married. Guess what. They go into the are saying in our amendment. My question to the Senator: Does How much time remains? 28-percent tax bracket at a time when that mean the Federal Government is The PRESIDING OFFICER (Mr. they need their money the most. subsidizing divorce? We have almost doubled their tax ENZI). Thirty-four and a half minutes. Mr. BROWNBACK. Some would draw Mrs. HUTCHISON. Senator bracket just because they have gotten that conclusion. married. Not only that, we don’t even BROWNBACK has been a leader in this ef- Clearly, we are taxing marriage. We give them double the standard deduc- fort. We have been fighting for this for are taxing the fundamental institution tion. Instead of $4,300, and $4,300 when a long time. I am very pleased he is around which we build values. That is they were both single, they now to- with us on this amendment. We made not right, as the people in the letters gether get $7,200. All we are going to do some tough choices, but we think it is from across America state. is phase in $8,600 in the standard deduc- the right priority to send. Here is another letter from Ohio: I yield 12 minutes to Senator tion right up front. We are going to No person who legitimately supports fam- delay a few other things to let that BROWNBACK. ily values could be against this bill of elimi- happen. Mr. BROWNBACK. I thank the Sen- nating the marriage penalty. The marriage In 2005, the real marriage tax penalty ator from Texas. She has been the lead- penalty is but another example of how in the kicks in because that is the first time er on this issue. I am delighted to be past 40 years the Federal Government has we have the money to let people file as working with her on such an important enacted policies that have broken down the singles when they are married. That is issue. I also thank the chairman of the fundamental institutions that were the the best marriage tax penalty reduc- committee for recognizing the impor- strength of this country from the start. tion of all because it eliminates it. tance of eliminating the marriage pen- A woman writes: That is simply what the amendment alty. We moved this up; this is the My boy friend, Darryl and I have been liv- does. highest priority. ing together for quite some time. We would very much like to get married. We both work I commend Senator ROTH for all of I want to tell Members why I think it is the highest priority in the words of at Ford Electronics in Crothersville, IN, and the effort he took to be responsible make less than $10 an hour, but work over with this tax cut bill. This tax cut bill people who have been interviewed and time when available and Darryl does farming has across-the-board rate reductions who have paid the marriage penalties. on the side. I cannot tell you how disgusted that help every taxpayer in America, In the Wichita Eagle on Sunday, Kyle we both are over this tax issue. If we get expands the tax brackets for middle-in- and Lynn Schudy stated they redis- married not only would I forfeit my $900 re- come taxpayers, and a number of posi- covered the cost of true love this April, fund check, we would be writing a check for tive pension provisions that are par- April 15. Their total cost of true love $2,800. ticularly helpful for women. came to $1,823. That is how much the This was figured by an accountant at H&R Block at New Castle. There is nothing right I spoke to Senator ROTH about the extra income tax was for this Prairie about this after we continually hear the gov- inequity for women in the workplace, Village couple in their early thirties. ernment preach to us about family values. because women have children and they That is what they paid last year be- Nothing new about the hypocrites in Wash- have to lay off a few months. Some cause they are married and filed joint- ington. Why not do away with the current choose to lay off for six years until ly instead of single and living together. tax system? their children go to school. Some They found that was the cost of true These are voices from across Amer- choose to lay off 18 years. love. ica. Women live longer. They are in and I don’t know that we can make a This is from Houston, TX: out of the workplace more—that is a much better case for eliminating the If we are really interested in putting chil- fact—and they get penalized not only marriage penalty than the voices dren first, why would this country penalize July 29, 1999 CONGRESSIONAL RECORD — SENATE S9721 the very situation [marriage] where kids do marriages are projected to end in divorce or Mr. BROWNBACK. It says: best? When parents are truly committed to permanent separation. Americans are less likely to marry than These changes have ignited a national each other through their marriage vows, ever before, according to a new study, and grass-roots movement to discourage divorce their children’s outcomes are enhanced. fewer people who do marry report being and promote marriage. Many states are reex- Yet we tax it and penalize it to the ‘‘very happy’’ in their marriages. amining their no-fault divorce laws, and at This report, released yesterday by Rutger average of $1,400 per married couple of least two states, Louisiana and Arizona, University’s National Marriage Project and the 21 million American married cou- have instituted ‘‘covenant marriages,’’ which touted as a benchmark compilation of statis- ples who pay this tax. require marriage counseling if a relationship I am sure this evolved and nobody falters and narrowly restrict grounds for di- tics and surveys, found that the nation’s vorce. ‘‘Marriage education,’’ a term that en- marriage rate has dipped by 43 percent in the maliciously said we will tax married past four decades. . . . couples. The fact remains, we tax mar- tered the national lexicon less than a decade riage, and it must stop. We have the ago, has become a growing concern. We have a chart of the result from Last year in Florida, legislators passed a the Rutger study. In 1960, per 1,000 chance now to actually do that. law requiring marriage education skills to be Another point I want to make about women age 15 and over, between 85 and taught in high schools. In addition, adults 90 percent per year were getting mar- this: The institution of marriage in preparing for marriage in Florida receive a America is in serious trouble. substantial discount on their marriage li- ried, and now it is below 50 percent, a I ask unanimous consent to have censes if they choose to take a marriage edu- 43-percent fall-off in people getting printed in the RECORD the Washington cation course. married. Post article of July 2 of this year titled ‘‘People are so distressed about the state of The writers of the study stated this marriage in America,’’ said Diane Sollee, ‘‘For Better or Worse, Marriage Hits a about the institution of marriage, the founder of the Coalition for Marriage, Fam- foundational unit upon which we build Low.’’ ily and Couples Education. Her District- There being no objection, the mate- based group is hosting a conference in Ar- family values and pass them on to the rial was ordered to be printed in the lington this week that is being attended by next generation: RECORD, as follows: 1,000 people seeking marriage education Key social indicators suggest a substantial [From the Washington Post, July 2, 1999] training. weakening of the institution of marriage. ‘‘We think about marriage counseling in This is serious. I daresay that prob- FOR BETTER OR WORSE, MARRIAGE HITS A terms of therapy,’’ she added, ‘‘But we real- LOW ize that we can teach skills to people to ably in this next Presidential cam- (By Michael A. Fletcher) make their marriages strong. What distin- paign, ‘‘family values’’ may be the two Americans are less likely to marry than guishes marriages that go the distance from words said most often as we worry, ever before, according to a new study, and those that end in divorce isn’t whether cou- fret, and are concerned about what is fewer people who do marry report being ples disagree, but certain behaviors between happening to our children and our soci- ‘‘very happy’’ in their marriages. them.’’ ety and in this culture. The report, released yesterday by Rutgers The National Marriage Project report Can anybody in this room, in this au- University’s National Marriage Project and blames the declining marriage rate on people postponing marriage until later in life and gust body, therefore say it is OK to tax touted as a benchmark compilation of statis- the fundamental institution that helps tics and surveys, found that the nation’s on more couples deciding to live together marriage rate has dipped by 43 percent in the outside of marriage. According to the report, most in building family values, that we past four decades—from 87.5 marriages per nearly half of people ages 25 to 40 have at tax the U.S. institution of marriage, 1,000 unmarried women in 1960 to 49.7 mar- some point set up a joint household with a that we make 21 million American cou- riages in 1996—leaving it at its lowest point member of the opposite sex outside of mar- ples annually pay on average to the in recorded history. riage. tune of $1,400 just for the privilege of As a result, the report’s authors argued, The percentage of married people who re- being married when we are so worried ported being ‘‘very happy’’ in their mar- marriage is no longer the presumed route from adolescence to adulthood and has lost about the values in the country? How riages fell from 53.5 in 1973–76 to 37.8 in 1996. can we vote against this? The historically low marriage rate, cou- much of its significance as a rite of passage. Moreover, marriage is far less likely to be pled with a soaring divorce rate, has dra- I am delighted the chairman has put associated with first sexual experiences, par- matically altered attitudes toward one of so- this in the bill. I am happy we are try- ticularly for women, the report said. Where- ciety’s most fundamental institutions. Al- ing, and I hope we will be successful, in as 90 percent of women born between 1933 and though Americans still cherish the ideal of moving this up earlier, so once and for 1942 were either virgins when they married marriage, increasing numbers of young or had premarital sex only with their even- all we can stop taxing the institution adults, particularly young women, are pessi- tual husbands, now more than half of girls of marriage. We have to stop doing mistic about finding a lasting marriage part- have sexual intercourse by age 17, and on av- that. ner and are far more accepting than in the erage they are sexually active for about When marriage as an institution past of alternatives to marriage, including eight years before getting married. single parenthood and living together with a breaks down, children suffer. The past These changes in marriage patterns have few decades have seen a huge increase partner outside of marriage, according to the contributed to new attitudes toward the in- report. stitution. Although the percentage of teen- in out-of-wedlock births and divorce, a ‘‘Young people today want successful mar- agers who said that having a good marriage combination which has substantially riages, but they are increasingly anxious and and family life was ‘‘extremely important’’ undermined the well-being of children pessimistic about their chances for achieving to them has increased modestly in the past in virtually all areas, all places of life. that goal,’’ said Barbara Dafoe Whitehead, two decades, the percentage who said they Some people can struggle heroically co-director of the National Marriage Project. expected to stay married to the same person and help build up the families, and cer- Funded by Rutgers in conjunction with for life has decreased slightly. More dramati- several private foundations, the project is a tainly nobody is here to castigate oth- cally, the percentage of teenage girls who ers. We are saying this is a tax that is research institute that tracks social indica- said having a child out of wedlock is a tors related to marriage—an area of study ‘‘worthwhile lifestyle’’ increased from 33 per- wrong. It is wrong for virtually every its directors contend is frequently over- cent to 53 percent in the past two decades. reason. It taxes a fundamental family- looked. Whereas the report’s findings led its au- value-building institution. It penalizes ‘‘Nobody is focusing on marriage,’’ said thors to conclude that ‘‘the institution of people whom we should be rewarding. David Popenoe, the project’s other co-direc- marriage is in serious trouble,’’ other re- Study after study has shown children tor. ‘‘It is not in the national debate.’’ searchers who track marriage trends said do best when they grow up in a stable Rather than directly examining Ameri- there also was reason for optimism. For one, cans’ attitudes toward marriage, researchers they note that demographers predict that 85 home, raised by two parents who are have tended to focus on the flip side of the percent of young people will marry at some committed to each other. coin, tracking social trends such as the in- point in their lives, a substantial figure, Newlyweds face enough challenges creases in divorce, out-of-wedlock births and even though it is smaller than the 94 percent without paying punitive damages in single-parent households over the past two that pertained in 1960. the form of the marriage tax. The last decades. In the immediate post-World War II ‘‘There is some evidence that marriage is thing the Federal Government should generation, 80 percent of children grew up in in trouble,’’ said Kristin Moore, senior schol- do is penalize the institution that is a family with two biological parents. That ar for Child Trends, a nonprofit research or- number has dipped to 60 percent. ganization that tracks trends in family and the foundational unit of passing on to Before declining slightly in recent years, child well-being. ‘‘But there is also much the next generation morals and family the divorce rate had soared more than 30 per- evidence that marriage remains highly val- values, and yet we do it. We have done cent since 1970. Today, nearly half of U.S. ued.’’ it for a number of years. S9722 CONGRESSIONAL RECORD — SENATE July 29, 1999 We must give the people back a tax that we have been at war with families safety net, has gotten all the resources. cut. I will support the overall effort to in our Tax Code. Mr. President, 21 mil- We have left in an anemic place the give back in tax cuts the nearly $800 lion American couples, 42 million family, which ought to be doing the billion. I think we should do that. But Americans, are spending an average of front-line defense. It would be similar clearly our top priority in this effort $1,400 per year more, each couple, be- to giving all the guns and weapons to must be eliminating this bad—this cause of the marriage penalty. It the rear guard and not having the guys worst tax that we have, worst for its ef- makes it tough for that couple to make on the front line with any bullets. It is fect on the institution of marriage. We choices that they ought to be able to time to load the resources into the must give the American people the make to benefit their families. So I families, at least to give them a fair growth rebate they deserve and return thank the chairman of the Finance shake. It is just a fundamental part of this overpayment. The first tax we Committee, Senator ROTH, for placing America. We believe families are im- must cut is this marriage penalty tax. this in the bill, for seeing to it that portant. If we really get our job done in It is going to be expensive. It is impor- this category of remediation, this ef- the families of America, Government tant. It is expensive to couples who pay fort to repair an injury to the very fab- will not really have much responsi- this tax all the time, on average $1,400 ric of America’s culture, is included in bility and much problem. per year per couple. this tax measure. If we destroy the families of America, With that, I have a number of other We would not be here this evening there is no amount of Government that things to share, but I think it is simply with the capacity to say we want to ac- will solve our problems. time we do away with this tax. I am de- celerate that remedy, that we want to So here we have a choice. Are we lighted to join the Senator from Texas provide this antidote to a malady going to endow families with the re- and the Senator from Missouri in their which has been afflicting the American sources they create, they earn? Are we efforts, in our efforts to do this. I ap- culture, we could not move it up in the going to let them keep some of those plaud the chairman for building this bill had it not been there in the first resources or, when they form these du- into the tax cut. I am hopeful we can place. I commend him. rable, lasting, persistent bonds and a do this earlier. I would like us to even I would like to just take us, for a relationship that teaches people how to do income splitting. We are not going minute, back to some very substantial rely on each other, to live with each to be able to do it today. With that, I fundamentals about America. I think other, how to be individually respon- yield back to the Senator from Texas. the first of those fundamentals is that sible and self-reliant, are we going to Mrs. HUTCHISON. Mr. President, I this is a culture where the most impor- take that institution and continue to say to the Senator from Kansas that tant things are not in Government. The punish it? Or are we going to wake up we can do income splitting down the most important things are not in the and say: Hello, it is time for us to say road as well because, in fact, it is very institutions of Government, not in the about families we are going to let the important that we give every married corporate responsibility of Govern- families have some of the resources couple the best shake we can give ment. The most important things are which they earn and they should keep. them; that treats them totally fair. with individuals. This is a society that I do not think it is a hard question. Whether they are a two-income-earner honors great freedom and expects great It is pretty simple. The proverbial couple or a one-income-earner couple, responsibility. rocket scientist is not needed here. It we want them to have the same treat- America has prospered. America is is an anomaly of our tax law. It is un- ment that they would have under any distinguished from, different from, dif- fair to say the Congress at some point other circumstance. ferentiated from, we are different from went forward to try to hurt families. So I do support income splitting. I other countries, other cultures. We But in this topsy-turvy tax environ- think after we get the money accumu- have gone farther, we have soared fa- ment that has grown by just a snippet lated in the surplus we will be able to ther, for that reason. We expect indi- here and a little piece there and a few give them much more relief, real relief, viduals to do things for themselves; not hundred thousand words there—this in fact elimination of the penalty. That to be reliant, always, on Government, Tax Code was, what, 750,000 words in is the goal of all of us. but, where possible, to build the sense 1955 and it is 5 million words now. You I yield 12 minutes also to Senator of independence, responsibility, judg- would have a hard time reading it if ASHCROFT. Senator ASHCROFT has been ment, self-reliance that makes Ameri- you started at birth and read as fast as fighting along with Senator cans unique in the community we call Evelyn Woods to get through the thing BROWNBACK and myself, side by side, on the world. before the end of your life. this issue. Ever since he came to the When you believe the future of Amer- So we have a situation where this Senate it has been one of his highest ica is dependent upon that spirit, you code has grown up and it discriminates priorities. I am so appreciative that he have to ask yourself what are we going against families. It hurts families, and has been the stalwart soldier on the to fund in America? Are we going to we have a great opportunity now, marriage tax penalty that he has be- fund the bureaucracy and the institu- thanks to the chairman of the com- cause I think we are going to win this tion or are we going to fund the family mittee who placed this concept of re- victory in the end. and individuals? Are we going to give mediating this pathology right here in I yield 12 minutes to Senator families the opportunity to take care this bill. ASHCROFT. of themselves or are we going to give I predict Members on both sides of The PRESIDING OFFICER. The Sen- all the resources to the sort of second the aisle are going to say: We want to ator from Missouri. best alternative? vote in favor of marriages; it is time to Mr. ASHCROFT. Mr. President, I I do not think there is a Member of correct this inadvertent, but very dam- thank the Senator from Texas for her this Chamber who would say it is ever aging, prejudice against marriage in leadership in this respect. She has un- better to have a vast Government pro- the Tax Code. derstood the challenge, the special gram than it is to have a good family. That is where we ought to be. No one challenge that comes to families as a I just do not think we have anyone who in this Chamber believes that Govern- result of this pernicious discrimination believes that because we know the fam- ment is more important than families. in our Tax Code. She has fought long ily is the best Department of Edu- No one believes that our front line, in and hard for its removal. I am honored cation, it is the best Department of terms of developing this culture, is so to be a participant as a cosponsor of Health, it is the best teacher of respon- unimportant that we ought to load all this amendment with her and Senator sibility and character, which is as im- the resources to the guys at the back BROWNBACK. portant as anything else. It is where it of the operation. We ought to put some I also thank the chairman of the Fi- really must happen. of our ammunition in the hands of the nance Committee, Senator ROTH, who Yet our Tax Code has been sweeping front line. understood the fundamental value that the resources away from this essential Let’s let families, let’s let parents, is expressed in neutralizing the tax pol- institution of the culture, the family, who make these kinds of lasting com- icy toward families. I say ‘‘neutral- into the coffers of the Government, and mitments to each other and to their izing.’’ I really mean that, in the sense plan B, the second priority, the sort of children, build an America tomorrow July 29, 1999 CONGRESSIONAL RECORD — SENATE S9723 which has all the promise of the Amer- spouses are earning a similar income. Mrs. HUTCHISON. I appreciate the ica you and I inherited. That is what we are addressing here, fact that the committee made a pri- I will add that it is not a great tradi- the penalty side, because more couples ority of the marriage tax penalty. The tion in America to discriminate have both spouses working. It is inter- real marriage tax relief is in the bill in against marriage. This has happened in esting to note, there is a bonus for get- the year 2005 in the responsible time- the Tax Code as our tax bite on the ting married today if the differential is frame. That was actually the first year American family has accelerated with roughly between 70–30. you could do it because you cannot the growth of social programs. It was The amendment the Senator from phase that in. I appreciate the effort not until the sixties that we had any- Texas is offering goes part way to that was made. thing of a marriage penalty, and it eliminate the marriage tax penalty. My amendment just doubles the began to get worse and worse until Our Democratic alternative actually standard deduction earlier. The Sen- now, as I have indicated, $29 billion a went a lot further. She raises the ator from Delaware has been working year is what Government takes from standard deduction by about $1,400, and with me on the floor, as has Senator families as it robs 21 million families of the Democratic alternative raised the BAUCUS. I very much appreciate their about $1,400 per couple, and it sweeps standard deduction for married couples helping me work through this so that that money away from the families by about $4,300. we are going to have the early relief on into the Government, into the bureauc- In addition, in our proposal we began the standard deduction now in the year racy, into the plan B, the second best, to eliminate the marriage tax penalty 2001, starting the phase-in to 2005 when yes, important safety net. Yes, we need for itemizers; that is, for couples who we are going to give the real relief, it, but let’s not deprive the first line of itemize. The amendment before us which the chairman had in the bill this culture’s conditions for great- deals only with couples who use the originally. I give him the credit for ness—the families—let’s not deprive standard deduction. There are some that, and I appreciate his remarks very them of the resources they ought to couples who still itemize in the Tax much. have. Code, and it is our hope that we could Mr. ROTH. I appreciate the remarks I thank Senator ROTH, chairman of address, eliminate, as you would, the of the Senator from Texas. the Finance Committee, for placing marriage tax penalty not only for cou- One of the frustrating things of put- this concept in the bill. I thank Sen- ples who use the standard deduction ting a bill together, although I have to ator HUTCHISON from Texas for having but also for couples who itemize. admit it is a very interesting challenge been alert to this since before I came Also, we in the Democratic alter- that I much enjoy, is the fact that to the Senate. She was working hard in native raised the standard deduction there are so many things I believe this respect. I am always delighted to not only for married couples but also should be done for the American fam- be a part of any measure with Senator for singles. We thought the standard ily. It is frustrating that there are lim- BROWNBACK whose sensitivity to the deduction should go up quite a bit itations as to what we can do. I agree values and the need for character in higher than it now is for singles. with the distinguished Senator that this culture is unsurpassed. The long and short of it is, this nothing is more important than elimi- I do not think Government should be amendment goes part way in raising nating this marriage penalty. Obvi- dictating our culture and pounding in the standard deduction. We proposed to ously, the sooner we can do it, the bet- values, but, on the other hand, our go a lot further in raising the standard ter off we are. I thank her for her lead- Government should not be at war with deduction, but the net effect is to help ership. our values, and it is time for us to call begin to eliminate the marriage tax For the information of all Senators, I a peace conference around the kitchen penalty by raising the standard deduc- do want to make clear that my concern table of America and say to husbands tion for married couples. It is our hope with the pending amendment had been and wives: You have a very important that maybe a little bit later the Sen- that it would put us out of compliance job to do, and we want you to have the ator from Texas would, since she sees with our reconciliation instructions. I resources to do that job. We must the wisdom in our proposal, go a little was also concerned that the earlier eliminate the marriage penalty, and further and agree to other provisions version of the amendment would have this bill, with the Hutchison- that we in the Democratic alternative relied heavily on delaying the AMT re- Brownback-Ashcroft amendment, can have suggested. lief. And this delay would hit middle- get that down. I do not think this really is a matter income Americans very hard. I reserve the remainder of the time that requires a lot of debate. I believe But now we understand, of course, and yield the floor. most Senators agree this is a good that the Senator from Texas will offer The PRESIDING OFFICER. Who amendment. It begins to eliminate the a modification to the filed amendment yields time? penalty married couples pay. It is our which will alleviate this offset prob- Mr. ROTH. I am happy to yield 5 suggestion we also address the mar- lem. For that I am very grateful. With minutes to the Senator from Montana. riage tax penalty for couples who these changes, I just say, I look for- Mr. BAUCUS. Mr. President, I con- itemize because that would begin to ward to working with the Senator from gratulate the Senator from Texas for complete the elimination of the mar- Texas on having this amendment en- her amendment. It is a good amend- riage tax penalty. Again, I hope that acted. ment. It does deal with an inequity in occurs at some reasonable future date. Mr. President, I yield the floor. the code clearly, simply. I congratulate I reserve the remainder of my time. Would the Senator like some more her, too, because she is taking the The PRESIDING OFFICER. Who time? course that we in the Democratic alter- yields time? Mrs. HUTCHISON. Mr. President, I native took in trying to address this The Senator from Delaware. would just like to reserve the remain- problem when we proposed to raise the Mr. ROTH. Mr. President, I yield my- der of my time for the modification standard deduction as well to address self such time as I may use. when it is ready, which I understand essentially the marriage tax penalty. First of all, I congratulate the distin- will be in the next 15 to 30 minutes. It is interesting; there is a marriage guished Senator from Texas for her So I yield now and will reclaim that tax penalty today, but there is also a leadership in this most important mat- time when we have the corrected marriage tax bonus. Basically, the rule ter. I know that as I return to my amendment. of thumb is 70–30. That is, if there is State of Delaware and talk to people Mr. ROTH. Mr. President, I suggest more than a 70–30 percent differential there, it is a matter of real unhappi- the absence of a quorum. between the income of each spouse, ness and dissatisfaction that there is The PRESIDING OFFICER. The then there is a marriage bonus; that is, this marriage penalty. Obviously, for clerk will call the roll. you get a tax bonus for marriages as that reason, it is very desirable that we The assistant legislative clerk pro- opposed to a penalty. correct it as quickly as possible. ceeded to call the roll. The penalty situation arises roughly Mrs. HUTCHISON. Will the Senator Mr. BAUCUS. Mr. President, I ask when the 70–30 starts to narrow down, yield? unanimous consent that the order for is less of a differential, and when both Mr. ROTH. I will be happy to yield. the quorum call be rescinded. S9724 CONGRESSIONAL RECORD — SENATE July 29, 1999 The PRESIDING OFFICER. Without file separately, who gets the personal new forms would be required. Programming objection, it is so ordered. exemptions, the additional personal ex- changes would be required to reflect the 14 Mr. ROTH. Mr. President, I yield 5 emption for children, and so forth, and percent rate. minutes to the Senator from Montana. who doesn’t. INCREASE WIDTH OF 14 PERCENT BRACKET BY The PRESIDING OFFICER. The Sen- Then there is the question of large $2,000 BEGINNING IN 2005. ator from Montana is recognized. medical payments, the medical deduc- The increase in the width of the 14 percent Mr. BAUCUS. Mr. President, I think tion, which, as the Presiding Officer bracket would be incorporated in the tax ta- there is another dimension to this tax knows better than anybody else in the bles and tax rate scheduling during IRS’ an- bill which I think is important for us Chamber, is about 700 percent of ad- nual update of these items. The provision would require changes to the rates shown in to address. It is not only tax reduction justed gross income. And then the the 2005 instructions for Forms 1040, 1040A, in the amount of the reduction and not question is, How is that allocated—one 1040EZ, 1040NR, 1040NR–EZ, and 1041, and on only the composition of the reduction, spouse or do both spouses get it or the Forms 1040–ES for 2005. No new forms it is also whether we are making this whatnot? would be required. Programming changes Tax Code even more complex. There is a lot of additional com- would be required to reflect the expanded 14 If there is anything we hear from our plexity that couples would face under percent bracket. people at home, it is that this Tax Code the underlying bill. All of this is not MARRIAGE PENALTY RELIEF FOR JOINT FILERS is much too complex; it is just a mess. glamorous stuff. It doesn’t get head- BEGINNING IN 2005 I see the Presiding Officer, who has lines. It is not in the evening news. It FORMS deep experience in this, is nodding his is my hope that as we undertake the The following form changes would be nec- head in agreement. We all know that work in this body, as well as in the essary to implement this provision. The he is right. other body, to reduce taxes, and we try changes noted for Form 1040EZ could affect Regrettably, when Congress passes to do it in a fair way, we also do it in the scannability of the form. tax legislation, we tend not to pay a way that is less complex, not more 1. A new line and check box would be added much attention to whether this adds to the 2005 Forms 1040, 1040A, and 1040EZ for complex. married taxpayers to indicate they are filing further complexity to the code. We As this bill stands tonight, with re- single returns on a combined form. rarely pay any attention to that. spect to the marriage tax penalty re- 2. Three new schedules would be developed Frankly, I take some pride in that I lief, it is going to be much more com- (for 1040 filers, 1040 filers, and 1040EZ filers) pushed for the provision of the law last plex for taxpayers, for individual tax- with columns for each spouse to separately year that directs the IRS, in conjunc- payers, whether they file separately, report the information required to determine tion with the Joint Tax Committee, to particularly for married taxpayers try- his or her total income, adjusted gross in- come up with a complexity analysis of ing to determine how to deal with the come (AGI), taxable income, and tax before new provisions that the Congress en- solution we have so far drafted with re- nonrefundable credits. This information is shown on the following lines of the 1999 acts. We did not get this analysis until spect to the marriage tax penalty. forms: Form 1040, lines 7 through 40; Form after the Finance Committee reported I ask unanimous consent to have 1040A, lines 7 through 25; and Form 1040EZ, out its bill, but we did get it, finally. printed in the RECORD a letter and a lines 1 through 6, and line 10. The new sched- I have with me a letter from Charles short document from Commissioner ules would also show the couple’s combined Rossotti, the Commissioner of the IRS, Rossotti to the Joint Tax Committee AGI and combined tax before nonrefundable to Ms. Lindy Paull, who is the Chief of which begins to outline some of the ad- credits. The combined tax would also be en- Staff of the Joint Committee on Tax- ditional complexities this bill will tered on the appropriate line of the couple’s ation, which is a brief analysis of the cause. 1040 return and the rest of that return would additional complexity that the bill be- There being no objection, the mate- be completed as if a joint return has been filed. fore us would cost. rial was ordered to be printed in the Based on the 1999 forms, the new schedule Just by way of example, we are here RECORD, as follows: for Form 1040 filers would have a total of 82 today trying to correct a problem by DEPARTMENT OF THE TREASURY, entry spaces. The schedule for Form 1040A providing relief for the marriage tax INTERNAL REVENUE SERVICE, filers would have a total of 46 entry spaces, penalty. This marriage tax penalty is Washington, DC, July 22, 1999. and the one for 1040EZ filers would have a where a couple pays a higher net tax Ms. LINDY L. PAULL, total of 16 entry spaces. The new schedules Chief of Staff, Joint Committee on Taxation, would contain calculations involving mul- when both couples earn about the same Washington, DC. amount of money. The underlying bill tiplication. The instructions for the new DEAR MS. PAULL: Attached are the Internal schedules would be between 2 and 5 pages. before us today attempts to address Revenue Service’s (IRS) comments on the If credits are to be determined as if the that problem, but in a way which is eight provisions from the Senate Committee spouses had filed a joint return (as indicated very complex. on Finance markup of the ‘‘Taxpayer Refund in JCX–46–99), a third computation of AGI The amendment offered by the Sen- Act of 1999’’ that you identified for com- and tax before nonrefundable credits would ator from Texas is a much more crude plexity analysis in your letter of July 20, be necessary. The AGI and tax would be com- 1999. The comments are based on the Joint way to deal with alleviating the mar- puted as if a joint return had been filed. The Committee on Taxation staff description reason for this additional computation is be- riage tax penalty by raising the stand- (JCX–46–99) of the provisions and, in the case ard deduction by a significant amount, cause some credits are affected by AGI and of marriage penalty relief, the statutory lan- may also be limited by the regular tax liabil- an approach that we took in our Demo- guage for a similar item provided in H.R. ity. These items would not necessarily be the cratic alternative bill, too, where we 2656, introduced by Mr. Weller in the 105th same as the two spouse’s combined AGIs and would raise the standard deduction Congress. tax. To eliminate this third computation, Due to the short turnaround time, our even more. But to give you an example the provision relating to credits should be comments are provisional and subject to of the additional complexity that this changed to specify that the couples’ com- change upon a more complete and in-depth bined AGI and tax are to be used in figuring bill would cause in trying to resolve analysis of the provisions. the amount of any credit. the marriage tax penalty, let me just Sincerely, 3. A new four-line, two-column worksheet state the following items which I hope CHARLES O. ROSSOTTI. would be developed for each spouse to com- Attachment we will get worked out as this bill pro- pute his or her applicable percentage for pur- gresses. IRS COMMENTS ON EIGHT TAX PROVISIONS OF poses of determining the deductions, such as Essentially, taxpayers would have to THE TAX REFUND ACT OF 1999 IDENTIFIED the deduction for exemptions, that are re- fill out two forms or the 1040 would FOR COMPLEXITY ANALYSIS quired to be allocated based on each spouse’s have to have more columns and many REDUCE 15 PERCENT INCOME TAX RATE TO 14 share of the combined AGIs. This worksheet more items, because essentially cou- PERCENT BEGINNING IN 2001 would be included in the instructions for the ples would have to fill out their 1040 in The tax rate change mandated by this pro- new schedules. many ways twice—one as if married, vision would be incorporated in the tax ta- 4. The 2005 TeleFile Record would be re- and then separate, as if joint filers, at- bles and tax rate schedules during IRS’ an- vised to permit its use by married taxpayers nual update of these items. The provision choosing the combined filing status. Based tempting to determine which is less in would require changes to the tax rates shown on the 1999 TeleFile Tax Record, this would that tax, and so forth. in the 2001 instructions for Forms 1040, 1040A, require the addition of 10 entry spaces. Then there is the question of alloca- 1040EZ, 1040NR, 1040NR–EZ, and 1041, and on 5. The provision would require many elect- tion of personal exemptions: When you Forms 1040–ES, W–4V, and 8814 for 2001. No ing taxpayers to complete two separate July 29, 1999 CONGRESSIONAL RECORD — SENATE S9725 Schedules A, B, D, and E, or Forms 4797 (and provision provided it is enacted in the near ducted would be through examination, which possibly other schedules/forms) to determine future. If enactment is delayed, the IRS will is not practical because of the small the amounts to enter on the new schedule. In have to begin taking steps to re-institute the amounts involved. general, two separate schedules/forms will be pre-1998 rules for 1999 tax years. It is critical No new forms would be required. required where both spouses have items that that this provision be enacted as soon as pos- Mr. President, I yield 10 minutes to affect the schedule/forms. sible to avoid costly and unnecessary pro- the Senator from Iowa. IRS understands that rules clarifying the gramming changes and to minimize the im- The PRESIDING OFFICER. The Sen- application of the election for AMT purposes pact on timely distribution of the 1999 tax ator from Iowa is recognized for 10 will be forthcoming. The above does not re- packages. In addition, a return to pre-1998 minutes. flect the additional form changes that would law would significantly increase the com- Mr. HARKIN. I thank the Senator be needed to integrate the election with the plexity of these credits. alternative minimum tax. The provision relating to the deduction for from Montana for yielding. Mr. President, I will talk about the PROCESSING, PROGRAMMING, COMPLIANCE personal exemptions would eliminate the nine line AMT worksheet in the Form 1040A bill itself, but I also want to talk about The marriage penalty election would im- an amendment that I intend to offer pact most aspects of IRS operations. instructions for 2005. This provision would The form changes needed to implement the not affect the number of lines on the 2005 tomorrow, sponsored by myself, Sen- provision would increase the time it takes Form 6251 or the AMT worksheet in the 2005 ator LEAHY, Senator REID of Nevada, the IRS to process a 1040 on which the elec- Form 1040 instructions. Senator KENNEDY, and Senator tion is made and issue a refund, as well as in- INDIVIDUAL RETIREMENT ARRANGEMENTS WELLSTONE. It has to do with pensions. crease the cost of processing the return. De- This provision would require a change to Current law prevents companies from voting additional time and resources to the the dollar limit specified in the Form 1040, reducing pension benefits which a processing of electing returns could delay Form 1040A, Form 8606, and Form 5329 in- worker has already earned. However, the processing of other returns and the structions for 2001 through 2005 and possibly there is a new phenomenon going on. issuance of other refunds. in future years. The change would also be re- Companies are now changing to so- The complexity of this provision would flected in the Form 1040–ES for all applicable likely cause an increase in the number of called cash balance plans which can years. No new forms or additional lines save the companies millions of dollars taxpayers who use a paid preparer and dis- would be required. Programming changes courage the use by taxpayers of e-file pro- would be needed to reflect the increased con- in pension costs each year by allowing grams such as Telefile and On-Line Filing. tribution limits. them to take a substantial cut out of The error rate among those who do prepare IRS would need to provide guidance to fi- their employees’ pensions. their own returns would also increase. Dur- nancial institutions that sponsor IRAs on Employees generally receive three ing processing, these returns would have to how to take into account the higher con- kinds of benefits from working. They be sent to Error Resolution for correction. tribution limits (currently all sponsors uti- get direct wages, health benefits, and This could result in additional taxpayer con- lize IRS approved documents). In addition, pensions. So reducing an employee’s tacts, delays in the issuing of refunds, and the following model IRA and Roth IRA docu- pension years after it is earned should additional costs to the IRS. The provision ments that are issued by the Assistant Com- be no more legal than denying a work- would also increase the number of amended missioner (EPEO) would need to be modified er wages after the work has been per- returns which would have to be examined to take into account the increased contribu- and processed. tion limits: formed. The IRS would have to make substantial Form 5305, Individual Retirement Trust Under traditional defined benefit changes to its IRM procedures for processing Account. plans, the worker gets a pension based marriage penalty election returns and train Form 5305–A, Individual Retirement Custo- on the length of employment and the the service center in those procedures. dial Account. average pay of the last few years of The added complexity would also increase Form 5305–R, Roth Individual Retirement service. The pension is based on a pre- the number of taxpayers who would seek as- Account. set formula using those key factors sistance either over the toll-free lines or at Form 5305–RA, Roth Individual Retirement rather than on the amount in an em- the walk-in sites. The number of taxpayers Custodial Account. seeking assistance about the marriage pen- ployee’s pension account. Form 5305–RB, Roth Individual Retirement Under some cash balance plans, pay- alty election could reduce the opportunity Annuity Endorsement. for other taxpayers to get assistance. The ments to workers do not start until the INCREASE DEDUCTION FOR SELF-EMPLOYED TO value of their pension has reduced to IRS would have to make substantial changes 100 PERCENT to the customer service IRM and would have the lower level of the cash balance This provision would eliminate one line to train the Customer Service Representa- plan. This is a term of art that they from the self-employed health insurance de- tives to enable them to assist taxpayers in duction worksheet contained in the 2000 in- call wearaway. In fact, under a number these complex provisions. of cash balance plans, some older work- The rules for allocating income and deduc- structions for Forms 1040 and 1040NR. This worksheet is currently four lines. The Form ers receive no pension benefit contribu- tions between spouses, which are in part tions for as long as 5 or more years, based on state property law, would cause 1040–ES for 2000 would also reflect the provi- confusion and errors by taxpayers. In many sion. No new forms would be required. while younger workers, workmates instances, mis-allocations could only be de- REPEAL FUTA SURTAX AFTER DECEMBER 31, 2004 working right alongside them who tected on examination. The IRS would have The provision would require a change to started under the cash balance plan, re- to develop new examination procedures and the FUTA tax rate on Forms 940, 940–EZ, 940– ceive regular contributions during train its examiners in the law and the new PR and Schedule H of Form 1040 for 2005. The those years. procedures. The marriage penalty election rate would be reduced from 6.2 percent to 6.0 So what does this really mean to real could also affect the resolution of examina- percent. No new forms would be required. people in the real world? Well, two tion cases involving the innocent spouse pro- Programming changes would be necessary to Chase Manhattan banking employees visions. reflect the reduced FUTA rate. hired an actuary to calculate their fu- This provision would require major sys- ALLOW NON-ITEMIZERS TO DEDUCT UP TO $50 ($100 temic programming changes to IRS’ com- ture pensions after Chase Manhattan’s FOR JOINT RETURNS) OF CHARITABLE CON- predecessor, Chemical Bank, converted putation process. This provision would affect TRIBUTIONS FOR 2000 AND 2001 many of our tax systems including Inte- to a cash balance plan. The actuary es- Assuming the deduction is allowed in de- grated Submission and Remittance Proc- timated that their future pensions had termining adjusted gross income (unlike the essing (ISRP), Error Resolution System been cut by 45 percent. John Healy, one 1982–86 deduction for non-itemizers), the fol- (ERS), Generalized Unpostable Framework lowing changes would be necessary to imple- of the workers, said, ‘‘I would have had (GUF), Generalized Mainline Framework ment this provision: to work about 10 more years before I (GMF), Federal Tax Deposits (FTDs), 1. One line would be added to the adjust- broke even.’’ SCRIPS, MasterFile, Electronic Filing, and ments section of Forms 1040, 1040A, 1040NR, In another case, Ispat Inland, Inc., a TeleFile. It is estimated that at least 50 staff and 1040NR–EZ for 2000 and 2001. Chicago steel company, converted to a years and approximately $5,000,000 in con- 2. Two new lines would be added to Form tractor costs would be needed to make the cash balance plan on January 1. Paul 1040EZ for 2000 and 2001 (one for the deduc- Schroeder, a 44-year-old engineer who necessary programming changes. tion and one to subtract the deduction from ALTERNATIVE MINIMUM TAX has worked for Ispat for 19 years, cal- total income to arrive at adjusted gross in- culated it would take him as long as 13 Since the provision regarding personal come). This change could affect the credits and the AMT is the same as that ap- scanability of the form. years of additional work to acquire ad- plicable to 1998 tax years, and reflected in Ensuring compliance with the above-the- ditional pension benefits. So this prac- the 1988 tax forms, no form or programming line charitable deduction would be difficult. tice stands to hurt millions of older changes would be needed to implement the The only means of verifying amounts de- workers. S9726 CONGRESSIONAL RECORD — SENATE July 29, 1999 Frankly, I consider it age discrimina- icit. Well, the deficit almost quad- Security is going to be there for them. tion. After all, a new employee, usually rupled during the 1980s. The public debt Well, this is our chance to make sure younger, effectively receives greater more than quadrupled. We simply put they know it is going to be there for pay for the same work in the form of the American people on a credit card. them, and also that we secure Medi- money put into the pension plan. In Finally, in 1993, Congress got serious. care. We then can take and reduce the other words, you have two people We took the lead in stopping the hem- debt on our kids, invest in education, working side by side. As I said, they orrhaging. So now we have turned it so that our kids will have a growing get their wages. They also get their around. We have gone from an annual economy and be more productive in the pensions. But if one is not getting any deficit of $290 billion to a surplus of future. That is what we ought to be pensions, he is basically getting less about $120 billion, created 18.9 million doing with this—not giving it back to pay. new jobs. Unemployment is at 29-year people who already have too much. The amendment we are offering to- lows. The rate of inflation is the lowest I must tell you, I have a lot of friends morrow would prevent the wearaway. it has been since the Kennedy adminis- and I know a lot of people who have a It would require a company to add to tration. Our GNP is growing at a great lot of money. We all have rich friends, the pension benefits of older workers in rate. We are beginning to pay down the people who have made a lot of money. the same way that they add to the ben- $5.6 trillion debt saddled on our kids. I have yet to have any one of them ever efits of younger workers. My friends on the Republican side re- tell me that they desperately need a I will make it clear that my amend- jected that deficit reduction bill in tax break. Mostly, what they tell me ment does not stop companies from 1993. Not one single Republican voted is: Pay down the debt, invest in edu- modifying their plans. It does not stop for it. cation, save Social Security for our them from converting to cash balance I remember when Senator GRAMM of kids. plans, and it doesn’t stop them from Texas said: That is what we ought to be doing. improving the portability. It simply The top 1 percent of the taxpayers are . . . if we adopt this bill, the American the ones that make out the most in the prevents employers from cutting the economy is going to get weaker, not strong- benefits of older workers by thousands er. The deficit, 4 years from today, will be tax cut by the Republicans. of dollars a year, compared to what higher than it is today and not lower. . .. The PRESIDING OFFICER. The Sen- happens to a younger worker. When all is said and done, people will pay ator’s time has expired. Mr. HARKIN. I ask unanimous con- My amendment just says that a com- more taxes, the economy will create fewer sent for 2 more minutes. pany cannot discriminate against long- jobs, Government will spend more money, and the American people will be worse off. Mr. BAUCUS. I yield 2 more minutes time workers by not putting money to the Senator. into their pension account just because That was in 1993. Obviously, my friend from Texas could not have been Mr. HARKIN. Since 1980, the average they earn pension benefits under a after-tax income of the top 1 percent of prior plan. Workers would get whatever more wrong in his assessment. But now we have this big tax cut be- American families has increased by 72 they are entitled to receive under the percent. The income of the poorest terms of their old pension plan as well fore us based on paper projections. But we also find the gap between the rich fifth of American families has declined as all they are entitled to under the by 16 percent. If the Republican tax bill new plan for the period that their pen- and poor is growing even wider. At a time when we need to ensure the future becomes law, corporate limousines will sion fell under that plan. The total line up in front of the Capitol with for our children, we are going to take benefit would be the sum of the two. their trunks open. The top 1 percent it away from them. In closing, my amendment is sup- will haul the money away in the This is the way I look at it. We built ported by the National Council of Sen- trunks of their limousines. up this huge debt in the 1980s. Who ior Citizens, the National Committee I have always said there is nothing made out from that? Look at all the to Preserve Social Security, the AARP, wrong with making money in America. the AFL–CIO, the Pension Rights Cen- statistics. Upper-income people made a There is nothing wrong with being ter, Business and Professional Women lot of money in the 1980s and secured rich. There is nothing wrong with hav- USA, the Older Women’s League, and more wealth. More assets went to fewer ing a nicer house, a bigger car, and all the Women’s Pension Project. and fewer people in this country and, the better amenities of life. That is a Older workers across America have thus, the gap between the rich and poor big part of the American dream. But I been paying into pension plans widened. We have slain the dragon of believe when you make it to the top, throughout their working years antici- deficits and we are now going to have and others make it to the top, and I pating the secure retirement which is some surpluses. It seems to me it is our make it to the top, it is the responsi- their due. Now, as more Americans responsibility to take that money and bility of Government to make sure we than ever before in history approach lift the heavy debt burden off of our leave the ladder down there for others retirement, we are seeing a disturbing kids and grandkids—$5.5 trillion of to climb, too. The Republican tax bill, trend by employers to cut their pen- debt. We owe it to our children and basically, says to the wealthy in this sion benefits. grandchildren. country: You have it made. Don’t I urge the Senate to support our I keep hearing a lot of my friends on worry about anybody else. You made it amendment. the Republican side say: Well, this isn’t to the top. Now you can pull up the Let me shift for just a second, in our money; it is your money; we should ladder behind you and we are going to whatever time I have remaining, to say give it back to you, the people today help you. The Government will help that I am going to vote against this that are paying taxes; give it back. Of you pull the ladder up behind you. tax bill for three reasons: It is fiscally course, most of it goes back to the President Clinton has talked often irresponsible, it widens the gap be- upper 5 percent of income earners in about the bridge to the 21st century, tween the rich and the poor, and it America. But I look upon it in a dif- and we have a good construct of it: Un- really robs our children. ferent way. The huge debt we ran up in employment is low, GNP is going up, My friends on the Republican side the 1980s is going to be a burden on our debt is going down. But if only a few make it sound so simple. They say: kids and grandkids. The very wealthy people cross that bridge, it will become Look, we have this enormous surplus. people who made out in the 1980s are a dividing line. That is why we don’t It means people are paying too much in now going to get a big tax cut. It seems need this tax bill. We need to bring taxes. Let’s give it all back in a tax to me that what we need to do is take people together, not divide us even cut. that money and say, no, you know who more, as this tax bill would do. Well, if only it were that easy. First this money belongs to? It belongs to The PRESIDING OFFICER. The time of all, we don’t have those surpluses our kids and grandkids. We better be of the Senator has expired. yet. They are anticipated, but they are paying off our debts so they are not Who yields time? not here. Again, I remember back in saddled with it when they grow up. Mr. ROTH. Mr. President, I suggest 1981 when we were told by some that we Let’s secure Social Security. We keep the absence of a quorum. could cut taxes and increase military hearing the hue and cry all the time The PRESIDING OFFICER. The spending and we wouldn’t have a def- that young people don’t think Social clerk will call the roll. July 29, 1999 CONGRESSIONAL RECORD — SENATE S9727 The legislative clerk proceeded to I yield to the manager, if the man- both simplicity and equity. Of course, call the roll. ager would like to have the time back. those are enemies of each other. The Mr. BAUCUS. Mr. President, I ask I will be glad to yield back whatever more something is simple, the more unanimous consent that the order for time I have remaining. someone else claims it is inequitable the quorum call be rescinded. Mr. BAUCUS. Mr. President, how and applies to them. The more we try The PRESIDING OFFICER. Without much time remains on our side? to deal with them to make it more eq- objection, it is so ordered. The PRESIDING OFFICER. Four uitable, the less simple the code be- Mr. BAUCUS. Mr. President, I yield minutes. comes. But nevertheless we have an ob- 10 minutes to the Senator from Iowa. Mr. BAUCUS. Thank you, Mr. Presi- ligation. I very much hope we address The PRESIDING OFFICER. Only 7 dent. it and solve it. minutes 20 seconds remain. I would like to emphasize a point I suggest the absence of a quorum. Mr. BAUCUS. I yield 7 minutes 20 that I made earlier about complexity. The PRESIDING OFFICER. The seconds to the Senator from Iowa. The tax bill passed by the other body clerk will call the roll. Mr. HARKIN. I will not talk that reduces capital gains. Without getting The legislative clerk proceeded to long. I thank the manager. into whether they should or should not call the roll. Mr. President, I will talk about an- be reduced, the effective date is July 1, Mr. FRIST. Mr. President, I ask other motion I will have to recommit 1999, which adds tremendous additional unanimous consent that the order for the bill with instructions tomorrow complexities to the code—to account- the quorum call be rescinded. when it comes up. This has to do with ants, who have to add in more lines, The PRESIDING OFFICER. Without funding for the National Institutes of and for programmers in their com- objection, it is so ordered. Mr. FRIST. I ask unanimous consent Health. puters to adjust to the IRS. to speak for 10 minutes as in morning Just 21⁄2 years ago, the Senate went The preliminary analysis is that on record, 98–0, committing to double business. there are many more pages for the cap- The PRESIDING OFFICER. Without the budget of the National Institutes of ital gains increase schedule than cur- objection, it is so ordered. Health over 5 years. But this tax bill rently is required. It is immense. Add Mr. BAUCUS. Mr. President, I will shortchanges America’s health and re- to that Y2K. This provision goes into not object. But there comes a point neges on the Senate’s promise, by forc- law on July 1. I am just addressing the when we have to wrap things up to- ing cuts of up to 38 percent in discre- complexity. I am not talking about the night. In the earlier conversation with tionary health programs. merits. the Senator it was a different amount Earlier this evening, my friend and Then the IRS—who knows? It may of time we agreed to. colleague from Pennsylvania, Senator well have to go back and retest their Mr. FRIST. Mr. President, I thought SPECTER, talked about NIH being the Y2K program to see if it works again we were waiting for legislative lan- ‘‘crown jewel’’ of our Government. In- with these additional items that are guage. I will be happy to speak for deed, I agree with him. It is. But we plugged in. however many minutes I can. I was said we were going to double the budg- I very much hope the conferees on under the understanding it would be et. Yet now, because of this tax bill, we their tax bill, in working with the about 10 minutes before we had legisla- are going to be faced with huge cuts. President when this bill is finally put tive language to close, but I will be We can’t even get our appropriations together, pay much more attention to happy to be more brief. bill on the floor because we are $8 bil- the complexity than they have in the Mr. BAUCUS. I will not object. lion to $10 billion below what we had past. Just bear down on that because if Mr. FRIST. Mr. President, I will last year, and yet we are going to give we hear anything from the taxpayers, speak for 5 minutes by unanimous con- a big tax break to the wealthiest in our it is the additional complexity of the sent? society. code. We have an obligation not to add The PRESIDING OFFICER. Without We have to invest in this medical re- additional complexity. objection, it is so ordered. search—Alzheimer’s and arthritis to In my experience in all of the debate THE MEDICARE PROGRAM cancer, diabetes, and spinal cord in- on all of the tax bills, we have to cut a Mr. FRIST. Mr. President, we have jury. We are on the verge of break- little bit here and raise some more rev- not discussed an amendment which we throughs in all of these areas. Now is enue. We are going to add a little bit will be voting on tomorrow. It has not not the time to back off; now is the over here, with not one second of at- been discussed yet at all. It has to do time to invest in biomedical research. tention to whether or not this adds ad- with the very important issue that we If we were able to just simply delay ditional complexity to the taxpayers. voted on today, in terms of another the onset of Alzheimer’s in individuals We have had IRS hearings on the amendment. That is what we are going by 5 years, the savings would be $50 bil- problems the IRS has caused the tax- to do in this body to address a funda- lion a year. We would have no problems payers. There is some truth to that. mental problem. It has to do with in Medicare if we just delayed the The IRS has been a little bit too draco- Medicare, the fact that we have a Medi- onset of Alzheimer’s by 5 years. nian in some ways in some of the pro- care system which is not going to be My amendment is going to be very ceedings that it has brought against solvent long-term. It is a very costly simple. It makes good on the promise taxpayers. They have been a bit rough. system where, if you are a senior, and the Senator made, 89–0, to double the But mark my words. Most of the you have health care expenses, only NIH budget over 5 years. The amend- complexity is caused by Congress. Most about 48 percent of those are paid by ment returns the tax bill to the Com- of it is caused by Congress. We are a the Medicare Program. It is a very mittee on Finance, with instructions little two-faced around here. We like to costly system for seniors and individ- that the committee report back to the say: Oh boy, we are helping taxpayers uals with disabilities. It is a very rigid full Senate within 3 days with an reducing taxes—and at the same time system. It is a system that is not com- amendment to provide an additional we are increasing complexity. We don’t prehensive. Much preventive care is $13 billion for the NIH over 5 years. talk about that. But we have an obliga- not covered, prescription drugs are not Funding for this would be provided by tion to address both tax reduction as covered at all—outpatient prescription reducing or delaying specific tax cuts well as complexity. drugs. It needs to be modernized. We in the bill, so long as those tax cuts I very much hope we live up to our talked a bit about that today. that benefit moderate- or middle-in- responsibility and address that because The real question is why we cannot come taxpayers are not reduced. it is a huge problem. No wonder Ameri- take a new benefit and just add it to Again, I commend this amendment. cans want a flat tax. It is the com- the overall Medicare system. The gist It is sponsored, again, by myself, Sen- plexity. of the amendment tomorrow is that, ator KENNEDY, Senator MIKULSKI, and On the other hand, I might ask my- yes, we need prescription drug cov- Senator MURRAY to again make good self and each of you, how do you ad- erage, but we must incorporate that on our promise to make sure we put dress the marriage tax penalty with a new benefit, which needs to be there, in the necessary funding in biomedical re- national tax? Americans want both an overall modernization plan for search at the NIH. simplicity and equity. We all want Medicare. S9728 CONGRESSIONAL RECORD — SENATE July 29, 1999 The question is, why? Let me focus vency, make it less costly, less rigid, ‘‘(v) ‘1.88 times’ in the case of taxable years on this one chart. On the right half of let’s at least address this 35 percent as beginning during 2005, this chart, the red bar takes an average a first step. The 65 percent who are ‘‘(vi) ‘1.917 times’ in the case of taxable over the last 5 or 6 years, an average covered are covered in lots of different years beginning during 2006, and ‘‘(vii) ‘1.959 times’ in the case of taxable annual increase in all health care. The ways. years beginning during 2007, and red bar is in drug expenditures. They Since my time is up, I will yield the ‘‘(B) the basic standard deduction for a have gone up 11 percent every year. floor and simply close with this point. married individual filing a separate return The green bar is the annual growth in We will be offering an amendment to- shall be one-half of the amount applicable all health care expenditures in our morrow which says: Yes, prescription under paragraph (2)(A). health care system. drugs, but let’s do it in the context of If any amount determined under subpara- The real point of this graph is that overall Medicare reform. graph (A) is not a multiple of $50, such every year overall drug expenditures, I yield the floor. amount shall be rounded to the next lowest Mr. BAUCUS. Mr. President, I sug- multiple of $50.’’. in the aggregate, go up about twice as (c) TECHNICAL AMENDMENTS.— fast as other health care costs. Thus if gest the absence of a quorum. (1) Subparagraph (B) of section 1(f)(6) is we are going to add a new benefit onto The PRESIDING OFFICER. The amended by striking ‘‘(other than with’’ and overall health care costs, something clerk will call the roll. all that follows through ‘‘shall be applied’’ that is growing at 5 percent, we need to The legislative assistant proceeded and inserting ‘‘(other than with respect to be very sure we do not run into the to call the roll. sections 63(c)(4) and 151(d)(4)(A)) shall be ap- same problem we have in certain fields Mrs. HUTCHISON. Mr. President, I plied’’. such as home health care. Home health ask unanimous consent that the order (2) Paragraph (4) of section 63(c) is amend- for the quorum call be rescinded. ed by adding at the end the following flush care was a benefit in Medicare that was sentence: growing 17 percent a year. It could not The PRESIDING OFFICER. Without objection, it is so ordered. ‘‘The preceding sentence shall not apply to be tolerated in the overall Medicare the amount referred to in paragraph (2)(A).’’. system because of cost. AMENDMENT NO. 1472, AS MODIFIED (d) EFFECTIVE DATE.—The amendments Then we, with the heavy hand of Gov- Mrs. HUTCHISON. Mr. President, I made by this section shall apply to taxable ernment, came in and slashed home ask unanimous consent that amend- years beginning after December 31, 2000. health care 2 years ago. In many ways ment No. 1472 be modified with the On page 38, line 18, strike ‘‘2000’’ and insert that was devastating to patients, to ‘‘2002’’. changes that are now at the desk. On page 236, strike line 12 through the mat- the quality of health care, to people The PRESIDING OFFICER. Without ter following line 21, and insert: who were depending on venipuncture to objection, it is so ordered. The amend- (a) IN GENERAL.—Section 2503(b) (relating have blood drawn on a regular basis. ment is so modified. to exclusions from gifts) is amended— Therefore, I think it is very important The amendment (No. 1472), as modi- (1) by striking the following: we recognize, because drugs are a dif- fied, is as follows: ‘‘(b) EXCLUSIONS FROM GIFTS.— ferent entity, if we are going to add On page 10, line 6, strike ‘‘2004’’ and insert ‘‘(1) IN GENERAL.—In the case of gifts’’, ‘‘2005’’. (2) by inserting the following: that benefit, we need to do it in the ‘‘(b) EXCLUSIONS FROM GIFTS.—In the case realm of overall reform of Medicare On page 10, strike the matter between lines 19 and 20, and insert: of gifts’’, and modernization. (3) by striking paragraph (2), and This shows prescription drug expend- Applicable (4) by striking ‘‘$10,000’’ and inserting ‘‘Calendar year: dollar amount: ‘‘$20,000’’. itures in the aggregate since 1965 have 2006 or 2007 ...... $4,000 increased—not quite exponentially, but On page 237, line 3, strike ‘‘2000’’ and insert 2008 and thereafter ...... $5,000. ‘‘2004’’. you can see in 1993, 1995, 1996, from On page 11, strike the matter before line 1, On page 270, line 18, strike ‘‘2003’’ and in- about $55 billion up to about $80 bil- and insert: sert ‘‘2004’’. lion. So before we take this entity and Applicable On page 273, line 21, strike ‘‘2003’’ and in- put it in Medicare, because Medicare is ‘‘Calendar year: dollar amount: sert ‘‘2004’’. already going bankrupt, we need to 2006 or 2007 ...... $2,000 On page 275, line 12, strike ‘‘2003’’ and in- look at the overall picture. It includes 2008 and thereafter ...... $2,500. sert ‘‘2004’’. On page 277, line 13, strike ‘‘2003’’ and in- hospitals, includes doctors, prescrip- On page 11, line 3, strike ‘‘2007’’ and insert ‘‘2008’’. sert ‘‘2005’’. tion drugs, chronic care and acute care. On page 278, line 13, strike ‘‘2002’’ and in- There is a proposal that has been put On page 11, line 11, strike ‘‘2006’’ and insert ‘‘2007’’. sert ‘‘2004’’. forth by the National Bipartisan Medi- On page 32, between lines 14 and 15, insert: Mrs. HUTCHISON. I thank the Chair. care Commission appointed by the SEC. ll. ELIMINATION OF MARRIAGE PENALTY Mr. President, I will not delay be- President of the United States, ap- IN STANDARD DEDUCTION. cause I believe we are about to wrap pointed by our leadership in the Senate (a) IN GENERAL.—Paragraph (2) of section up, and I will have 15 minutes equally and in the House. We came up with the 63(c) (relating to standard deduction) is divided tomorrow. This is a significant proposal that is essentially this: The amended— victory. I appreciate so much Chair- (1) by striking ‘‘$5,000’’ in subparagraph (A) premium support model, the Breaux- man ROTH and Senator BAUCUS, who is Thomas bill. This proposal did look at and inserting ‘‘twice the dollar amount in ef- fect under subparagraph (C) for the taxable here on behalf of Senator MOYNIHAN, overall Medicare, hospitals, physician year’’, working with me on this amendment. reimbursement, and prescription drugs, (2) by adding ‘‘or’’ at the end of subpara- The bottom line is, by delaying a few and came up with this model. The de- graph (B), other very important tax cuts, we have tails of the model do not matter, but I (3) by striking ‘‘in the case of’’ and all that been able to put at the top of our pri- do want to stress that 10 of the 17 Mem- follows in subparagraph (C) and inserting ‘‘in ority list $6 billion more in marriage bers, in a bipartisan way, did put this any other case.’’, and tax penalty relief for the 43 million forward as a proposal—again, to show (4) by striking subparagraph (D). people in this country who are suf- Medicare can be modernized. (b) PHASE-IN.—Subsection (c) of section 63 fering just because they are married. The point with prescription drugs in is amended by adding at the end the fol- lowing new paragraph: That is not right. We have been need- Medicare—remember, as an outpatient, ‘‘(7) PHASE-IN OF INCREASE IN BASIC STAND- ing to correct this for years. You prescription drugs are not covered in ARD DEDUCTION.—In the case of taxable years should not have to choose between love Medicare at all. You have to go outside beginning before January 1, 2008— or money in America, and yet 22 mil- the system. But of the about 36 million ‘‘(A) paragraph (2)(A) shall be applied by lion American couples are doing just people enrolled in Medicare, two-thirds substituting for ‘twice’— that. do have some coverage, one-third do ‘‘(i) ‘1.702 times’ in the case of taxable This amendment will take part of the not have coverage. Therefore, in that years beginning during 2001, marriage tax relief and put it up, start- Bipartisan Commission, which we put ‘‘(ii) ‘1.75 times’ in the case of taxable ing in 2001, so there will be immediate years beginning during 2002, forward and worked out over the ‘‘(iii) ‘1.796 times’ in the case of taxable relief phased in to give couples that op- course of the year, we said let’s first years beginning during 2003, portunity to save more of the money focus right now as we modernize and ‘‘(iv) ‘1.837 times’ in the case of taxable they earn to spend as they choose be- strengthen Medicare, improve its sol- years beginning during 2004, cause, in fact, if they were not married, July 29, 1999 CONGRESSIONAL RECORD — SENATE S9729 they would be paying that much less in Ranking Member of the Subcommittee on (A) by striking ‘‘shall enter into a contract taxes. But they are married. We want Labor, Health and Human Services, and Edu- on a sole-source basis’’ and inserting ‘‘may to encourage them to do that, if that is cation of the Committee on Appropriations enter into a contract on a sole-source basis’’; what they want to do, and we certainly of the Senate;’’; and (C) by redesignating subparagraph (G) as (B) by striking ‘‘fiscal year 1998’’ and in- should not be penalizing them. subparagraph (J); and serting ‘‘fiscal years 2001, 2005, and 2009’’. Tomorrow I will talk about what is (D) by inserting after subparagraph (F) the in the amendment, what it does, but following new subparagraphs: AMENDMENT NO. 1411 tonight I want to say thank you to ‘‘(G) the Chairman and Ranking Member of (Purpose: To provide that no Federal income Senator ROTH and to Senator BAUCUS the Committee on Finance of the Senate; tax shall be imposed on amounts received, for working with us. This is a signifi- ‘‘(H) the Chairman and Ranking Member of and lands recovered, by Holocaust victims cant improvement in the bill because it the Committee on Ways and Means of the or their heirs) House of Representatives; At the end of title XI, insert the following: will give married couples throughout ‘‘(I) the Chairman and Ranking Member of our country the relief they deserve. SEC. ll. NO FEDERAL INCOME TAX ON the Subcommittee on Employer-Employee AMOUNTS AND LANDS RECEIVED BY I thank the Chair. I yield the floor. Relations of the Committee on Education HOLOCAUST VICTIMS OR THEIR Mr. BAUCUS. I suggest the absence and the Workforce of the House of Rep- HEIRS. of a quorum. resentatives; and’’; (a) IN GENERAL.—For purposes of the Inter- The PRESIDING OFFICER. The (4) in subsection (e)(3)(A)— nal Revenue Code of 1986, gross income shall clerk will call the roll. (A) by striking ‘‘There shall be no more not include— The legislative assistant proceeded than 200 additional participants.’’ and insert- (1) any amount received by an individual ing ‘‘The participants in the National Sum- to call the roll. (or any heir of the individual)— mit shall also include additional partici- (A) from the Swiss Humanitarian Fund es- Mr. ROTH. Mr. President, I ask unan- pants appointed under this subparagraph.’’; tablished by the Government of Switzerland imous consent that the order for the (B) by striking ‘‘one-half shall be ap- or from any similar fund established by any quorum call be rescinded. pointed by the President,’’ in clause (i) and foreign country, or The PRESIDING OFFICER. Without inserting ‘‘not more than 100 participants (B) as a result of the settlement of the ac- objection, it is so ordered. shall be appointed under this clause by the tion entitled ‘‘In re Holocaust Victims’ Asset Mr. ROTH. Mr. President, I ask unan- President,’’, and by striking ‘‘and’’ at the Litigation’’, (E.D. NY), C.A. No. 96–4849, or as imous consent that prior to the vote on end of clause (i); a result of any similar action; and (C) by striking ‘‘one-half shall be appointed or in relation to amendment No. 1472 it (2) the value of any land (including struc- by the elected leaders of Congress’’ in clause tures thereon) recovered by an individual (or be in order for Senator HUTCHISON to (ii) and inserting ‘‘not more than 100 partici- any heir of the individual) from a govern- further modify her amendment. pants shall be appointed under this clause by ment of a foreign country as a result of a The PRESIDING OFFICER. Without the elected leaders of Congress’’, and by settlement of a claim arising out of the con- objection, it is so ordered. striking the period at the end of clause (ii) fiscation of such land in connection with the AMENDMENT NOS. 1388, 1411, 1412, 1446 AND 1455, EN and inserting ‘‘; and’’; and Holocaust. BLOC (D) by adding at the end the following new (b) EFFECTIVE DATE.—This section shall clause: Mr. ROTH. Mr. President, I have a se- apply to any amount received before, on, or ‘‘(iii) The President, in consultation with after the date of the enactment of this Act. ries of five amendments which have the elected leaders of Congress referred to in been cleared on both sides. I ask unani- subsection (a), may appoint under this clause AMENDMENT NO. 1412 mous consent that these amendments additional participants to the National Sum- (Purpose: To add a short title) be agreed to, en bloc, the motion to re- mit. The number of such additional partici- On page 193, after line 23, add: consider be laid upon the table, and pants appointed under this clause may not (h) SHORT TITLE.—This section may be that any statements relating to these exceed the lesser of 3 percent of the total cited as the ‘‘Collegiate Learning and Stu- number of all additional participants ap- dent Savings (CLASS) Act’’. amendments be printed in the RECORD. pointed under this paragraph, or 10. Such ad- The PRESIDING OFFICER. Without ditional participants shall be appointed from AMENDMENT NO. 1466, AS MODIFIED objection, it is so ordered. persons nominated by the organization re- (Purpose: To eliminate the 2-percent floor on The amendments (Nos. 1388, 1411, ferred to in subsection (b)(2) which is made miscellaneous itemized deductions for 1412, 1446 and 1455) were agreed to, en up of private sector businesses and associa- qualified professional development ex- tions partnered with Government entities to bloc, as follows: penses and incidental expenses of elemen- promote long term financial security in re- AMENDMENT NO. 1388 tary and secondary school teachers, and tirement through savings and with which the for other purposes) (Purpose: Making technical corrections to Secretary is required thereunder to consult the Saver Act) and cooperate and shall not be Federal, On page 371, between lines 16 and 17, insert At the end of title XIV, insert: State, or local government employees.’’; the following: ll SEC. ll. TECHNICAL CORRECTIONS TO SAVER (5) in subsection (e)(3)(B), by striking SEC. . 2-PERCENT FLOOR ON MISCELLA- ACT. ‘‘January 31, 1998’’ in subparagraph (B) and NEOUS ITEMIZED DEDUCTIONS NOT Section 517 of the Employee Retirement inserting ‘‘May 1, 2001, May 1, 2005, and May TO APPLY TO QUALIFIED PROFES- SIONAL DEVELOPMENT EXPENSES Income Security Act of 1974 (29 U.S.C. 1147) is 1, 2009, for each of the subsequent summits, AND QUALIFIED INCIDENTAL EX- amended— respectively’’; PENSES OF ELEMENTARY AND SEC- (1) in subsection (a), by striking ‘‘2001 and (6) in subsection (f)(1)(C), by inserting ONDARY SCHOOL TEACHERS. 2005 on or after September 1 of each year in- ‘‘, no later than 90 days prior to the date of (a) QUALIFIED PROFESSIONAL DEVELOPMENT volved’’ and inserting ‘‘2001, 2005, and 2009 in the commencement of the National Sum- EXPENSES DEDUCTION.— the month of September of each year in- mit,’’ after ‘‘comment’’ in paragraph (1)(C); (1) IN GENERAL.—Section 67(b) (defining volved’’; (7) in subsection (g), by inserting ‘‘, in con- miscellaneous itemized deductions) is (2) in subsection (b), by adding at the end sultation with the congressional leaders amended by striking ‘‘and’’ at the end of the following new sentence: ‘‘To effectuate specified in subsection (e)(2),’’ after ‘‘re- paragraph (11), by striking the period at the the purposes of this paragraph, the Secretary port’’; end of paragraph (12) and inserting ‘‘, and’’, may enter into a cooperative agreement, (8) in subsection (i)— and by adding at the end the following new pursuant to the Federal Grant and Coopera- (A) by striking ‘‘beginning on or after Oc- paragraph: tive Agreement Act of 1977 (31 U.S.C. 6301 et tober 1, 1997’’ in paragraph (1) and inserting ‘‘(13) any deduction allowable for the quali- seq.), with the American Savings Education ‘‘2001, 2005, and 2009’’; and fied professional development expenses of an Council.’’; (B) by adding at the end the following new eligible teacher.’’ (3) in subsection (e)(2)— paragraph: (2) DEFINITIONS.—Section 67 (relating to 2- (A) by striking ‘‘Committee on Labor and ‘‘(3) RECEPTION AND REPRESENTATION AU- percent floor on miscellaneous itemized de- Human Resources’’ in subparagraph (B) and THORITY.—The Secretary is hereby granted ductions) is amended by adding at the end inserting ‘‘Committee on Health, Education, reception and representation authority lim- the following new subsection: Labor, and Pensions’’; ited specifically to the events at the Na- ‘‘(g) QUALIFIED PROFESSIONAL DEVELOP- (B) by striking subparagraph (D) and in- tional Summit. The Secretary shall use any MENT EXPENSES OF ELIGIBLE TEACHERS.—For serting the following: private contributions received in connection purposes of subsection (b)(13)— ‘‘(D) the Chairman and Ranking Member of with the National Summit prior to using ‘‘(1) QUALIFIED PROFESSIONAL DEVELOPMENT the Subcommittee on Labor, Health and funds appropriated for purposes of the Na- EXPENSES.— Human Services, and Education of the Com- tional Summit pursuant to this paragraph.’’; ‘‘(A) IN GENERAL.—The term ‘qualified pro- mittee on Appropriations of the House of and fessional development expenses’ means Representatives and the Chairman and (9) in subsection (k)— expenses— S9730 CONGRESSIONAL RECORD — SENATE July 29, 1999 ‘‘(i) for tuition, fees, books, supplies, equip- (2) by inserting ‘‘for the taxpayer’s own the qualified computer contributions (as de- ment, and transportation required for the use’’ after ‘‘constructed by the taxpayer’’. fined in section 45E(b)) made during the tax- enrollment or attendance of an individual in (b) REACQUIRED COMPUTERS ELIGIBLE FOR able year that is equal to the amount of a qualified course of instruction, and DONATION.— credit determined for the taxable year under ‘‘(ii) with respect to which a deduction is (1) IN GENERAL.—Section 170(e)(6)(B)(iii) section 45E(a). In the case of a corporation allowable under section 162 (determined (defining qualified elementary or secondary which is a member of a controlled group of without regard to this section). educational contribution) is amended by in- corporations (within the meaning of section ‘‘(B) QUALIFIED COURSE OF INSTRUCTION.— serting ‘‘, the person from whom the donor 52(a)) or a trade or business which is treated The term ‘qualified course of instruction’ reacquires the property,’’ after ‘‘the donor’’. as being under common control with other means a course of instruction which— (2) CONFORMING AMENDMENT.—Section trades or businesses (within the meaning of ‘‘(i) is— 170(e)(6)(B)(ii) is amended by inserting ‘‘or section 52(b)), this subsection shall be ap- ‘‘(I) at an institution of higher education reaquired’’ after ‘‘acquired’’. plied under rules prescribed by the Secretary (as defined in section 481 of the Higher Edu- (c) EFFECTIVE DATE.—The amendments similar to the rules applicable under sub- cation Act of 1965 (20 U.S.C. 1088), as in effect made by this section shall apply to contribu- sections (a) and (b) of section 52.’’ on the date of the enactment of this sub- tions made in taxable years ending after the (d) LIMITATION ON CARRYBACK.—Subsection section), or date of the enactment of this Act. (d) of section 39 (relating to carryback and ‘‘(II) a professional conference, and SEC. ll. CREDIT FOR COMPUTER DONATIONS carryforward of unused credits) is amended ‘‘(ii) is part of a program of professional TO SCHOOLS AND SENIOR CENTERS. by adding at the end the following: development which is approved and certified (a) IN GENERAL.—Subpart D of part IV of ‘‘(9) NO CARRYBACK OF COMPUTER DONATION by the appropriate local educational agency subchapter A of chapter 1 (relating to busi- CREDIT BEFORE EFFECTIVE DATE.—No amount as furthering the individual’s teaching skills. ness related credits), as amended by this Act, of unused business credit available under ‘‘(C) LOCAL EDUCATIONAL AGENCY.—The is amended by adding at the end the fol- section 45E may be carried back to a taxable term ‘local educational agency’ has the lowing: year beginning on or before the date of the meaning given such term by section 14101 of enactment of this paragraph.’’ the Elementary and Secondary Education ‘‘SEC. 45E. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS AND SENIOR CENTERS. (e) CLERICAL AMENDMENT.—The table of Act of 1965, as so in effect. ‘‘(a) GENERAL RULE.—For purposes of sec- sections for subpart D of part IV of sub- ‘‘(2) ELIGIBLE TEACHER.— tion 38, the computer donation credit deter- chapter A of chapter 1, as amended by this ‘‘(A) IN GENERAL.—The term ‘eligible mined under this section is an amount equal Act, is amended by inserting after the item teacher’ means an individual who is a kin- relating to section 45D the following: dergarten through grade 12 classroom teach- to 30 percent of the qualified computer con- er, instructor, counselor, aide, or principal in tributions made by the taxpayer during the ‘‘Sec. 45E. Credit for computer donations to an elementary or secondary school. taxable year. schools and senior centers.’’ ‘‘(b) QUALIFIED COMPUTER CONTRIBUTION.— ‘‘(B) ELEMENTARY OR SECONDARY SCHOOL.— (f) EFFECTIVE DATES.— For purposes of this section, the term ‘quali- The terms ‘elementary school’ and ‘sec- (1) IN GENERAL.—Except as provided in ondary school’ have the meanings given such fied computer contribution’ has the meaning paragraph (2), the amendments made by this terms by section 14101 of the Elementary and given the term ‘qualified elementary or sec- section shall apply to contributions made in Secondary Education Act of 1965 (20 U.S.C. ondary educational contribution’ by section taxable years beginning after the date of the 8801), as so in effect.’’ 170(e)(6)(B), except that— enactment of this Act. ‘‘(1) such term shall include the contribu- (3) EFFECTIVE DATE.—The amendments (2) CERTAIN CONTRIBUTIONS.—The amend- made by this section shall apply to taxable tion of a computer (as defined in section ments made by this section shall apply to years beginning after December 31, 2000, and 168(i)(2)(B)(ii)) only if computer software (as contributions made to an organization or en- ending before December 31, 2004. defined in section 197(e)(3)(B)) that serves as tity not described in section 45E(c) of the In- (b) QUALIFIED INCIDENTAL EXPENSES.— a computer operating system has been law- ternal Revenue Code of 1986, as added by sub- (1) IN GENERAL.—Section 67(g)(1)(A), as fully installed in such computer, and section (a), in taxable years beginning after added by subsection (a)(2), is amended by ‘‘(2) for purposes of clauses (i) and (iv) of the date that is one year after the date of the striking ‘‘and’’ at the end of clause (i), by re- section 170(e)(6)(B), such term shall include enactment of this Act. designating clause (ii) as clause (iii), and by the contribution of computer technology or inserting after clause (i) the following new equipment to multipurpose senior centers (as Mr. COVERDELL. Mr. President, I clause: defined in section 102(35) of the Older Ameri- would like to discuss an amendment ‘‘(ii) for qualified incidental expenses, cans Act of 1965 (42 U.S.C. 3002(35)) to be used that Senators TORRICELLI, MCCAIN, and’’. by individuals who have attained 60 years of CRAIG, and I would like to offer—ex- (2) DEFINITION.—Section 67(g), as added by age to improve job skills in computers. pansion of education savings accounts. subsection (a)(2), is amended by adding at ‘‘(c) INCREASED PERCENTAGE FOR CONTRIBU- Under our provision, parents, relatives, the end the following new paragraph: TIONS TO ENTITIES IN EMPOWERMENT ZONES, friends—anyone—would be allowed to ‘‘(3) QUALIFIED INCIDENTAL EXPENSES.— ENTERPRISE COMMUNITIES, AND INDIAN RES- ‘‘(A) IN GENERAL.—The term ‘qualified inci- ERVATIONS.—In the case of a qualified com- contribute up to $2,000 per year, after dental expenses’ means expenses paid or in- puter contribution to an entity located in an tax, into an account where the pro- curred by an eligible teacher in an amount empowerment zone or enterprise community ceeds could be withdrawn tax-free to not to exceed $125 for any taxable year for designated under section 1391 or an Indian pay for a child’s K–12 education ex- books, supplies, and equipment related to in- reservation (as defined in section 168(j)(6)), penses. struction, teaching, or other educational job- subsection (a) shall be applied by sub- Right now, the law allows parents to related activities of such eligible teacher. stituting ‘50 percent’ for ‘30 percent’. contribute up to $500 per year for a ‘‘(B) SPECIAL RULE FOR HOMESCHOOLING.— ‘‘(d) CERTAIN RULES MADE APPLICABLE.— child’s college education. We increase Such term shall include expenses described For purposes of this section, rules similar to in subparagraph (A) in connection with edu- the rules of paragraphs (1) and (2) of section that amount to $2,000 per year and cation provided by homeschooling if the re- 41(f) and of section 170(e)(6)(A) shall apply. allow for tax-free withdrawals for K–12 quirements of any applicable State or local ‘‘(e) TERMINATION.—This section shall not educational expenses, as well. law are met with respect to such education.’’ apply to taxable years beginning on or after Last Congress, this legislation passed (3) EFFECTIVE DATE.—The amendments the date which is 3 years after the date of the the Senate with bipartisan majorities made by this section shall apply to taxable enactment of the New Millennium Class- on two separate occasions. The bill years beginning after December 31, 2000, and rooms Act.’’ passed with a vote of 56 to 43; while the ending before December 31, 2004. (b) CURRENT YEAR BUSINESS CREDIT CAL- conference report passed with a vote of CULATION.—Section 38(b) (relating to current 59 to 36. AMENDMENT NO. 1455 year business credit), as amended by this (Purpose: To amend the Internal Revenue Act, is amended by striking ‘‘plus’’ at the On each occasion, the chairman of Code of 1986 to expand the deduction for end of paragraph (12), by striking the period the Finance Committee supported the computer donations to schools and to at the end of paragraph (13) and inserting ‘‘, measure, and was in large part respon- allow a tax credit for donated computers, plus’’, and by adding at the end the fol- sible for its successful passage. and for other purposes) lowing: Unfortunately, despite the bipartisan On page 371, between lines 16 and 17, insert: ‘‘(14) the computer donation credit deter- support for the bill, the opponents of SEC. ll. EXPANSION OF DEDUCTION FOR COM- mined under section 45E(a).’’ this legislation ultimately prevailed PUTER DONATIONS TO SCHOOLS. (c) DISALLOWANCE OF DEDUCTION BY and it was vetoed by President Clinton. (a) EXTENSION OF AGE OF ELIGIBLE COM- AMOUNT OF CREDIT.—Section 280C (relating Because the House-passed tax-relief PUTERS.—Section 170(e)(6)(B)(ii) (defining to certain expenses for which credits are al- qualified elementary or secondary edu- lowable) is amended by adding at the end the measure contains this provision, I cational contribution) is amended— following: would like to withdraw our amendment (1) by striking ‘‘2 years’’ and inserting ‘‘3 ‘‘(d) CREDIT FOR COMPUTER DONATIONS.—No and ask the chairman of the Finance years’’, and deduction shall be allowed for that portion of Committee, Senator ROTH, to support July 29, 1999 CONGRESSIONAL RECORD — SENATE S9731 the House position on this issue during appropriations bills will not be able to the best possible education; we should the upcoming House-Senate conference pass unless their funding is restored to improve our Nation’s highways and in- negotiations. pre-cap levels. Already this year, ap- frastructure; we should invest in Amer- Mr. ROTH. Thank you, Senator propriators are eyeing the projected ica’s workers to train them for the 21st COVERDELL. As you are aware, I have budget surpluses to help fund large ap- century; we should continue to put been a supporter of this legislation in propriations bills. And, as difficult as more police officers on the streets and the past, and I will continue to support these spending caps have been for ap- give them the resources they need to this legislation in the future. propriators this year, the spending bring crime rates down; and we should This bipartisan proposal is an out- caps in future years call for even more protect our environment and natural standing example of our ability to use drastic cuts. resources. the tax code, to help millions of middle We are in the midst of the longest While I am not opposed to passing class American families across the peacetime economic expansion in his- legislation that uses a portion of the country. By using the tax code to en- tory. This remarkable turnaround has projected surplus to cut taxes, such courage families to save for their chil- come about in large part because of cuts must be responsible, and we dren’s education needs and expenses, deficit reduction efforts which began should ensure that America’s hard- we all benefit. The expansion of the with legislation proposed by the Ad- working families who are struggling to education IRA will result in greater op- ministration and enacted by the Con- take part in the Nation’s prosperity portunities for every American child gress in 1993 - without a single Repub- benefit first. and their families. With education sav- lican vote. Thanks to these efforts, we Mr. President, we are embarking on ings accounts, 14 million families—over have been able to achieve record low an extremely important decision in 20 million kids—will take advantage of levels of unemployment while at the terms of the future course of the Na- the expanded education IRAs, gener- same time maintaining dramatically tion. If we make it responsibly, we can ating billions of dollars in education low levels of inflation. Tax cuts of the continue on the path of prosperity. We savings that might otherwise not exist. magnitude put forward by the Majority can continue to invest in the future It is an outstanding way to provide would be unwise and potentially desta- strength of our country through edu- families new and innovative options in bilizing in an economy that has strong cation, research and development, and education. growth, low unemployment and dra- infrastructure. We can shore up Social Because this legislation has the sup- matically low levels of inflation. Security, address the problems in the port of a bipartisan majority of the The real question before us today is Medicare program, and bring down the Senate and is contained in the House- whether we are going to take advan- Federal debt. We can also implement passed bill, I believe it should be given tage of this opportunity to exercise re- targeted tax cuts that help strengthen every consideration by the conferees sponsible fiscal policy. If we begin to our families. during the negotiations of the con- stimulate the economy with a tax cut All of these things are possible, but ference report. at the very time that unemployment is we cannot, for the sake of our future Mr. SARBANES. Mr. President, I rise at unprecedented low levels, we run the economic prosperity, go to extremes. in opposition to the Budget Reconcili- risk of reigniting inflation. If we start The Republican proposal is an extreme ation bill that is before us today. This over-stimulating the economy, the proposal. Subjected to analysis, it does bill would spend nearly all of the on- Federal Reserve will surely raise inter- not stand up. I strongly oppose this budget surplus projected by the Con- est rates to keep inflation in check and proposal and I urge my colleagues to gressional Budget Office over the next we will be right back in the box we reject it. ten years and would use none of this faced prior to this recovery. Mr. KENNEDY. Mr. President, I am projected surplus to protect the Social It is my strongly held view that any in strong support of Senator ROBB’s Security system, shore up Medicare, or surplus realized over the next ten years amendment to recommit the tax bill to give senior citizens the prescription should be seen as an opportunity to pay instruct the Finance Committee to drug benefits they so desperately need. down the Nation’s debt, invest in our make a $5.7 billion investment in re- Instead of taking this opportunity to Nation’s future, and shore up vital pro- building and modernizing the nation’s invest in the future of America at the grams. The Republican tax plan would schools. I commend Senator ROBB for threshold of the 21st century, Repub- squander this unprecedented oppor- his leadership on this issue and I urge licans want to enact deep and unrea- tunity to ensure that the Federal gov- my colleagues to support this sensible sonable tax cuts that largely benefit ernment will meet its obligations after legislation that is necessary to help the wealthy. the baby boomers retire and beyond. the nation meet the critical need to One major problem with basing a dec- The Republican plan does nothing to modernize and rebuild crumbling and ade’s worth of budgetary decisions on a preserve the integrity of the Social Se- overcrowded schools. projected surplus is that we have no curity trust fund. The Social Security Schools, communities, and govern- way of knowing what will happen in program is one of this Nation’s great- ments at every level have to do more the next ten years to affect these pro- est achievements. For more than 60 to improve student achievement. jections. Consider that just three years years, we have ensured that our senior Schools need smaller classes, particu- ago, when we enacted the Balanced citizens have a means of support in re- larly in the early grades. They need Budget Act of 1997, there were forecasts tirement after a lifetime of hard work. stronger parent involvement. They of large deficits stretching into the fu- We must honor this commitment and need well-trained teachers in the class- ture. This year, both the Congressional ensure that seniors who count on So- room who keep up with current devel- Budget Office and the Office of Man- cial Security receive their benefits. opments in their field and the best agement and Budget are projecting The Republican tax plan would set teaching practices. They need after- large surpluses over the same period. aside no new resources for the Medi- school instruction for students who This turnabout should illustrate clear- care program—the plan does nothing to need extra help, and after-school pro- ly that there is a large element of un- extend the solvency of the Medicare grams to engage students in construc- certainty in any economic projection, trust fund or provide prescription drug tion activities. They need safe, modern and that large scale shifts in tax policy benefits. The President’s proposal to facilities with up-to-date technology. that would tie our hands in the event enact a modest prescription drug ben- But, this investment can’t succeed of an economic downturn are, at the efit for Medicare would cost $46 billion when roofs are crumbling and children very least, unwise. over the next ten years—less than 6 are in overcrowded classrooms. Send- Furthermore, the surplus estimates percent of the total cost of the Repub- ing children to dilapidated, over- are based on the assumption that the lican tax proposal. crowded facilities sends a message to Federal government will adhere to the Beyond Social Security and Medi- these children. It tells them they don’t spending caps enacted in the Balanced care, this projected budget surplus matter. No CEO would tolerate a leaky Budget Act of 1997. The Leadership in could allow us to invest in the coun- ceiling in the board room, and no both Houses has admitted that this is try’s infrastructure. We should invest teacher should have to tolerate it in not a realistic assumption: a number of in schools to provide our children with the classroom. We need to do all we can S9732 CONGRESSIONAL RECORD — SENATE July 29, 1999 to ensure that children are learning in goals. Instead, Fitchburg has been I urge my colleagues to support Sen- safe, modern school buildings. forced to construct four portable facili- ator ROBB’s amendment. The time is Renovation, rehabilitation, and mod- ties—and a fifth is under construc- now to do all we can to help rebuild ernization will allow schools to correct tion—to deal with overcrowding. and modernize public schools, so that problems that prevent them from offer- Forrest Grove Middle School in all children can succeed in safe, tech- ing an environment conducive to learn- Worcester, Massachusetts, is at full ca- nologically-equipped schools. ing. Researchers have documented a pacity with 750 students. As enroll- Mr. ROCKEFELLER. Mr. President, I clear link between school building con- ments rise, they expect an additional rise today to discuss the Balanced ditions and student learning. A study 150 students, forcing them to rent Budget Act of 1997 and its impact on by Virginia Polytechnic Institute and rooms at a local church to alleviate providers and beneficiaries’ access to State University in 1996 compared test overcrowding. The schools in Olathe, health care services. Congress has a re- scores of students in substandard and Kansas are growing at a rate of 500– sponsibility to address problems with above-standard buildings, and found 1,000 students a year, which is equiva- the BBA for providers, especially those that students in better buildings with lent to about one new school per year. in rural areas. I believe it is important access to modern technology do better Two cafeterias at Bladensburg High that we keep one thought in mind dur- in their academic work then those School in Prince Georges County, Vir- ing the course of this debate—we de- without these problems. ginia were recently closed because they bated all these changes to help our sen- Nearly one third of all public schools were infested with mice and roaches. A iors. They are, and should remain, at are more than 50 years old. 14 million teacher commented, ‘‘It’s disgusting. It the forefront of these discussions. children in a third of the nation’s causes chaos when the mice run around The BBA made the most significant schools are learning in substandard the room.’’ At an elementary school in modifications to Medicare in the his- buildings, and half of the schools have Montgomery, Alabama, a ceiling which tory of the program. It signified a at least one unsatisfactory environ- had been damaged by leaking water change in policy designed to pay more mental condition. The problems with collapsed only 40 minutes after the reasonable prices and increase overall ailing school buildings aren’t the prob- children had left for the day. efficiency. There is no doubt that these lems of the inner city alone. They exist In Ramona, California, where over- were needed reforms enacted to protect in almost every community, whether crowding is a serious problem, one ele- and preserve the program for future urban, rural, or suburban. mentary school is composed entirely of generations. However, in light of the portable buildings. It has neither a caf- In addition to modernizing and ren- magnitude of the changes, we need to eteria nor an auditorium, and a single ovating dilapidated schools, commu- make some adjustments to compensate relocatable room is used as a library, nities need to build new schools in for unforeseen consequences. order to keep pace with rising enroll- computer lab, music room, and art It is clear that in rural areas like ments and to reduce class sizes. Ele- room. West Virginia, the impact of the BBA In Silver Spring, Maryland, a second- mentary and secondary school enroll- on beneficiaries and providers is much grade reading class has to squeeze ment has reached an all-time high more dramatic than in many other through a narrow corridor with a sink again this year of 53 million students, parts of the country. Medicare pay- on one side into a space about 14 feet and will continue to grow. wide by 15 feet long. ments make up a larger proportion of The Department of Education esti- Schools are trying to meet their rural hospitals’ revenues and rural hos- mates that 2,400 new public schools will needs, but they can’t do it alone. The pitals have lower hospital margins in be needed by 2003, to accommodate ris- federal government should join with general. Thus, West Virginia hospitals, ing enrollments. The General Account- state and local governments and com- like many other rural hospitals, have ing Office estimates that it will cost munity organizations to ensure that little to fall back on when federal communities $112 billion to repair and all children have the opportunity to Medicare payments are cut. modernize the nation’s schools. Con- get a good education in a safe and up- Since rural hospitals are often local gress should lend a helping hand and do to-date school building. safety net providers with low, and all we can to help schools and commu- Children need and deserve a good sometimes negative, margins, payment nities across the country meet this education in order to succeed in life. reductions may mean financial jeop- challenge. But they cannot obtain that education ardy for rural hospitals and con- In Massachusetts, 41 percent of if school roofs are falling down around sequently, reduced access to care for schools report that at least one build- them, sewage is backing up through rural beneficiaries. ing needs extensive repairs or should be faulty plumbing, asbestos is flaking off It is not yet clear whether Medicare replaced. 80 percent of schools report at the walls and ceilings, schools lack payment rates will take into account least one unsatisfactory environmental computers and modern technology, and the severity or complexity of patients’ factor. 48 percent have inadequate classrooms are overcrowded. We need illnesses. Under the current law, caring heating, ventilation, or air condi- to invest more to help states and com- for the chronically ill or those with tioning. And 36 percent report inad- munities rebuild crumbling schools, complex medical conditions can push equate plumbing systems. modernize old buildings, and expand fa- these health care facilities closer to This past year, I visited Everett Ele- cilities to accommodate reduced class the brink of bankruptcy. Rural facili- mentary School in Dorchester, Massa- sizes. ties are especially concerned because chusetts. The school is experiencing se- Senator ROBB’s bill offers school dis- they do not treat a large enough vol- rious overcrowding. The average class tricts the necessary flexibility and as- ume of patents to counterbalance the size is 28 students. The principal of the sistance to get the job done. Under this costs of a few very sick ones. school gave up her office and moved proposal, states will be able to put to- We cannot afford to lose providers into a closet in the hall in order to ac- gether a school financing package without endangering the well-being of commodate the rising enrollment. which best meets their needs. It offers our citizens. Therefore, it is imperative When the school needs the multi-pur- states and school districts five choices that we take action to make sure that pose auditorium/library, the rolling from a menu of school construction fi- the problems we’re facing today do not bookcases are moved to the basement, nancing components. It gives states become a crisis that we’ll have to face and the library has to close for the rest and communities the authority to offer in the near future. of the day. zero-interest school modernization I would like to note that this body In Fitchburg, Massachusetts, enroll- bonds. It also offers other tax incen- has voted on one facet of this issue ear- ments are rising by 200 students a year. tives to enhance the ability of commu- lier this year. The Senate budget reso- Educators there would like to reduce nities to rebuild their schools, includ- lution included an amendment, which class size, extend special education and ing private activity bonds, advance re- was passed by voice-vote, that directed bilingual education programs, and hire funding, elimination of arbitrage re- attention to the impact of the BBA on new teachers, but the school system bates for small issuers, and Federal hospital care. Specifically, the amend- does not have the facilities or re- Home Loan Bank guarantees on school ment expressed the sense of the Senate sources to accomplish these important construction bonds. that we should consider the extent to July 29, 1999 CONGRESSIONAL RECORD — SENATE S9733 which the BBA has had adverse effects feasibility. As a result, less and less af- regulations, numerous companies are on access to hospital care and provided fordable housing is made available interested in constructing these facili- additional budget authority to address under the credit. ties. This is a tax credit that will help the unintended consequences. Assuming an inflation factor of just to clean our Nation’s air and keep our Today, I am offering an amendment three percent, California would have an skies blue. with my colleagues from Massachu- additional $1.23 million in the first I yield the floor. setts and Maryland, Senators KERRY year of indexing. This would produce Mr. KENNEDY. Mr. President, mem- and MIKULSKI, that takes the next step approximately 150 more affordable bers on both sides of the aisle have in providing for the additional needs of apartments in California annually. spent a great deal of time over the past our health care delivery system, espe- Nationwide, demand for housing two years talking about child care. cially in rural areas. The ‘‘Medicare credits outstrips supply by more than We’ve introduced dozens of bills. We’ve Quality Assurance and Continued Ac- three to one. In California, it’s four to held extensive hearings. We know the cess’’ amendment would amend a small one. According to the Center on Budget difficulties facing countless families portion of the tax cut for a comprehen- and Policy Priorities, 90 percent of across the nation in obtaining afford- sive package of assistance to Medicare renters in Los Angeles pay more than able, quality care for their children. providers. 30 percent of their monthly income on We’ve emphasized the scientific re- Mr. President, I am not advocating rent. Seventy-three percent spend more search that confirms again and again that we undo the BBA. However, we than 50 percent of their income on that quality early childhood support is must address the inequities that re- rent. necessary for proper brain development sulted from its enactment, particularly In the city of San Diego, the afford- of infants and toddlers. We’ve called for when it comes to making certain our able housing situation is not much bet- significant additional investments in seniors get the care they need. ter. There, 106,000 families spend more the nation’s children when they are We have commitment to those who than 30 percent of their income on very young, so that all children can came before us and sacrificed so much rent, and 57,000 families spend more benefit from healthy growth and devel- to make this nation what it is today. than 50 percent on rental housing. opment. The alternative is unaccept- Today, we have the opportunity to In the San Francisco Bay Area, the able because it means far higher costs honor that commitment, and I urge my situation is even worse. The average in the long run, and because it denies colleagues to do so by supporting family pays roughly 58 percent of its many thousands of children the oppor- tunity to enter school ready to learn. changes to the Balanced Budget Act. monthly income on rent. We need to For all the talk, there has been far Mrs. FEINSTEIN. Mr. President, I aggressively work to fix this shortage. too little action. We have severely un- rise to address the amendment on low- We need to ensure the tax credit will derfunded the Child Care and Develop- income housing tax credit to be offered remain a workable incentive for home ment Block Grants to the states. Only by my colleague from Pennsylvania, of builders nationwide. I urge my col- one in ten children who qualify for fed- which I am a cosponsor. leagues to join me in support of this eral assistance actually receives it. This issue—affordable housing—is of amendment. When states run out of funds, they great importance in my state of Cali- Mr. BURNS. Mr. President, I will place many of the remaining children fornia, as it is for much of the nation. offer an amendment that will help to on waiting lists. Today, over two hun- Low income families in San Francisco, keep our Nation’s air clean and dred thousands children who need a San Diego, and cities across the coun- healthy. This amendment will provide safe and stimulating environment try are finding it harder and harder to a tax credit for our Nation’s energy while their parents work are on wait- find affordable housing for rent. producers to produce an environ- ing lists instead. At a hearing held this The low-income housing tax credit is mentally-friendly and energy-efficient week, Senators from both parties a great help. Since 1987, state agencies alternative fuel using otherwise unus- called this a national disgrace, and I have allocated over $3 billion in hous- able waste products and natural re- could not agree more. ing credits to help finance nearly one sources. Many of those who have taken jobs million apartments for low income This proposal would provide for a bio- under welfare reform are parents who families. mass coal tax credit and offer an incen- can only find minimum wage employ- The current housing credit cap—$1.25 tive for the Nation’s energy producers ment. At today’s low minimum wage, for each resident of a state—has not to construct facilities that would proc- full time work pays only $10,712 in been adjusted since the program’s in- ess low-grade, high-moisture, coal. We wages a year. Yet child care for one ception. Annual cap growth is limited have large supplies of this type of coal child costs thousands of dollars a year. to the increase in state population, in our nation. Without adequate child care assist- which has been less than five percent This proposal provides half of the ance, it is irresponsible to demand that nationwide over the past decade. Dur- credit that is being allowed to produce parents leave their infants and toddlers ing the same time period, inflation has electricity using biomass and wind without adequate care. Yet that is the eroded the housing credit’s purchasing power. This is a production tax credit consequence of our refusal to fully fund power by nearly 50 percent, as meas- you can only claim the credit if you the Child Care and Development Block ured by the Consumer Price Index. produce the qualified product. Grant. The budget reconciliation bill in- However, it has been determined that With the amendment of Senator crease the credit cap to $1.75 over five in order for companies to use this cred- DODD and Senator JEFFORDS, we can years. This is an important step, but it, they need to have an idea that the begin to deal more effectively with this it’s not enough. Senator SANTORUM and credit is going to be available for an serious problem. The amendment rep- I have proposed this amendment to extended number of years. Otherwise resents concrete progress in fulfilling index the low-income housing tax cred- the costs of building the facilities to the nation’s commitment to children. it cap for inflation. provide this environmentally-friendly It would give states the additional re- The estimated cost to index the cap and energy-efficient fuels would be cost sources they need to support quality for inflation is $43 million over ten prohibitive. child care in their communities. In this years. It is my understanding the cost The marketplace demands a pre- time of enormous prosperity, it is not has been fully offset. It is important to mium, low pollutant coal, to meet the only the right thing to do—it is a wise see that the housing tax credit will not nations needs and in response to the investment for this nation’s future. depreciate over time. Clean Air Act and the Kyoto Protocol. Mrs. MURRAY. Mr. President, I join By not indexing the credit for infla- We cannot jeopardize America’s com- with the Senator from Florida in urg- tion over the past 13 years, it has erod- petitiveness by complying with Kyoto’s ing my colleagues to do the right ed by between 40 and 45 percent. Costs costs on our consumers and markets. thing. Our priorities are out of order. to build and rehabilitate affordable Providing this tax credit marks the We must remember that we have all housing developments have continued beginning of a new industry. Based on committed to saving Social Security to climb, requiring more credit per current market pressures resulting and Medicare. These should be our pri- project in order to achieve economic from deregulation and environmental orities. We should be debating reforms S9734 CONGRESSIONAL RECORD — SENATE July 29, 1999 that save these essential income secu- that women, on average, take a total of I can guarantee that if we let the rity programs instead of deciding how 11.5 years out of the work force to care Government hold onto that money— to squander a protected surplus that for their families. We know that somebody will find a way to spend it. may never materialize. women often outlive their retirement On the other side of the coin, Repub- This tax bill is a serious threat to savings. And, we know that more licans say that if taxes are bringing in women. By ignoring the looming crisis women live with chronic and disabling more money than we need to run the facing both Social Security and Medi- illnesses. This in part explains why Government, we should give it back to care, we are jeopardizing the financial women are more than twice as likely the people so they can determine how security of older women. If we fail to as men to live in poverty at age 65. to spend it. reform both Social Security and Medi- This amendment does not kill a tax That’s what this debate is all about. care, we will force more older women cut. It will force us to make the tough Whose money is it? into poverty. The progressive structure decisions and to tackle the difficult job The President and the Democrat of both programs guarantees that for of reforming Social Security and Medi- leadership say that tax cuts are irre- millions of older women, their golden care. But, more important, it will pro- sponsible and risky—that they would years are not spent living far below the vide greater economic security to jeopardize Social Security, Medicare poverty level. women than any instant gratification and essential government services. The bottom line is that Social Secu- tax cut ever would. Please do not force But our budget and our tax bill and rity and Medicare are women’s issues. elderly women to pay the price for our our Social Security lockbox proposal They are the most important domestic misguided priorities. which the Democrats here in the Sen- programs for women. By failing to allo- Mr. BUNNING. Mr. President, I rise ate keep rejecting all guarantee that cate part of the projected surplus to in support of the Taxpayer Refund Act the Government cannot touch the So- saving these programs and instead act- and urge my colleagues to vote for it. cial Security surpluses over the next 10 ing for short term gratification, we I actually prefer the tax bill that was years. place the issues important to women considered and approved in the House The Republican proposals all clearly and families behind the special inter- of Representatives and I support the protect Social Security—we lock up ests of DC lobbyists. conservative substitute tax bill that that money so it can’t be spent—so Why am I here today fighting for an was offered earlier today. that it reduces the public debt. amendment that simply says we will I prefer these alternatives because But the Democrats in this body keep not squander the projected surplus they cut taxes across the Board which voting against the lock box which until we have reformed Social Security I think is appropriate. They reduce the would guarantee that Social Security and Medicare for the long term? Be- marriage penalty more adequately surpluses cannot be spend. So, it is not cause I am here fighting for families which I think is essential. the Republican tax bill that threatens They make further reductions in the and fighting for some economic peace Social Security. It is Democrat reluc- capital gains tax which I think is good of mind for older women. Without So- tance to make a binding commitment for the economy. They totally phase cial Security benefits, the elderly pov- not to spend Social Security surpluses. out the death tax instead of just reduc- erty rate among women would be 52.2 Yes, something needs to be done to ing it which I think is just a matter of percent and among widows would be strengthen and protect Medicae—but it fairness. 60.6 percent. Instead 12 percent of all is not the Republican tax bill which However, even though I think that Social Security recipients live in pov- threatens this important program. the Taxpayer Refund Act could be im- erty. While I still cannot accept even 12 Medicare needs systemic reform—we proved—and I hope that it is improved percent, I do not want to be part of all know that—and it was the Presi- during conference—it is vitally impor- pushing more than 50 percent of older dent—not the Republicans or the Re- tant that we keep the process moving women into poverty. publican tax bill—who killed the bipar- and send a tax cut bill to conference. Women are far more dependent on During this debate, we’ve seen a tisan commission recommendations Social Security for their retirement in- great many charts and graphs out- which were designed to give us a start- come than are men. Three-quarters of lining all the figures and projections ing point for real Medicare reform. So, no, this debate is not about So- unmarried and widowed elderly women under the Sun. It’s almost like watch- cial Security—it is not about Medicare. rely on Social Security for more than ing a commercial. half of their income. Fifty-eight per- But when we get to the bottom line It is about who the money belongs to. cent of all Social Security recipients in this debate, we aren’t talking about I believe that it belongs to the work- are women. Tell me women do not have figures and projections at all. We are ing Americans who pay the freight. a vital stake in this debate. talking about two different philoso- When the projections tell us that we I am not saying we cannot have tax phies of government. are going to take in over a trillion dol- relief targeted to working families. We We are talking about two different lars more than we need, it means that could have tax relief targeted to help philosophies of who the money really the taxpayers are paying too much and more Americans save for retirement. belongs to. we should give it back. However, we cannot jeopardize or gam- Does the money that is generated by It’s that simple. ble with the future economic security the income tax and the payroll tax be- That’s what this debate is all about. of millions of women. We have to tack- long to the people—or does it belong to We have an opportunity today to re- le Social Security and Medicare reform the Federal Government. That’s the ar- turn some tax money to the taxpayers first. gument today. of this Nation. It is a matter of fair- I know such reform will require And the differences here are very ness—it is a matter of honesty—and it heavy lifting. It will require us to in- clear cut and distinct. is a simple matter of respect. vest potential surplus funds in the The President and his supporters be- We can protect Social Security and well-being of older Americans. I am lieve that the money paid into the Fed- Medicare and we can reduce the public committed to this reform. I am willing eral treasury belongs to the Govern- debt and, yes, we can cut taxes at the to sit down and tackle these tough as- ment. same time. signments. What I am not willing to do We are told that over the next 10 And we should cut taxes—because, is to watch my colleagues ignore the years we will have $1.1 trillion more Mr. President, I’m one of those who be- economic importance of both Social than we need in general revenues to lieve that the money belongs to the Security and Medicare for women. fund the Federal Government. A tril- people—not the Government. A tax cut is not what most women lion dollars is a lot of money. Mr. BINGAMAN. Mr. President, I’m are looking for. They want pay equity, But the President and his supporters not going to take a lot of the Senate’s economic opportunity, and retirement say that all that money belongs to the time, but I want to speak briefly about security. Women currently start out Government and that we should hold an amendment I have filed to this tax several economic steps behind men. We onto it just in case Congress or the bill. My amendment, number 1391, pro- know that women today earn 74 cents President can find new ways to spend motes the use of small, efficient dis- for every dollar men earn. We know it. tributed electronic power generation July 29, 1999 CONGRESSIONAL RECORD — SENATE S9735 systems in residential, industrial and particular provision in the tax bill we people to restore their energy. In the commercial applications. are debating, the extension of the Re- past decade, this drug has helped mil- I believe distruted generating tech- search & Development tax credit. Last lions to remain productive. It has re- nologies are the future of our electric week the Finance Committee took an duced transfusions in the United States power industry. Already, the first historic step, and reported a bill which by nearly one-fifth, and fewer people microturbines and fuel cells are being would have made the R&D tax credit a have contracted blood-born disease. installed in homes and businesses. Re- permanent feature of our tax code. Yes- Another example of the real-life ben- newable technologies, like wind and terday, unfortunately, every single efits from R&D is the new class of solar, are bringing power to isolated member of the minority voted to sun- drugs, developed in the late 1980s, areas that are not connected to the set the provisions of the tax bill, so in- which are giving millions of people who electrical power grid. These remote ap- stead of a permanent R&D tax credit, suffer from depression a new lease on plications are very common in my we have a ten-year extension. life. Because of these new depression state of New Mexico. Though the actions of our colleagues drugs, the cost of treating depression Mr. President, my amendment has across the aisle prevented us from hav- in the United States has plummeted— two parts. The first part provides a ing a permanent R&D tax credit, I am expensive psychiatric care and in-pa- much needed tax clarification con- pleased that the on-again, off-again na- tient stays, which many could not af- cerning small, distributed electric ture of the credit will not undermine ford, are now disappearing in favor of power technologies, such as high-effi- America’s innovators for the next dec- these new treatments. ciency microturbines and fuel cells. ade. I have long supported federal poli- There are two telecommunications The current tax law discourages the cies to increase the nation’s R&D in- companies which invested in R&D to use of these technologies in vestment because of the central impor- create new technologies to bring state- commerical buildings by requiring a tance of scientific research to the of-the-art medicine to previously un- straight-lined depreciation over a 39– health and well-being of our people, its derserved and remote locations. These year lifetime. However, the same tech- positive contribution to our economic new technologies allow transfer of nology, if used in different application, growth and our higher standard of liv- high-resolution photographs, radio- has a shorter depreciation schedule. ing, and the improvements which add logical images, sounds, and medical My amendment would make clear that to our quality of life. records from leading medical centers these advanced electric power systems Both business and government play to physicians and patients in remote would have a 15-year depreciation important and complementary roles in locations. schedule when used for power genera- making sure that America continues to These are just a few of hundreds of great success stories coming out of tion. lead the world in research and innova- The second part of my amendment America’s medical research labs—suc- tion. The federal role in R&D is focused provides an 8-percent investment tax cesses coming from companies respond- on investment in long-term basic re- credit for systems that produce both ing to the R&D tax credit incentive. search. I will continue to do my best to heat energy and electrical power. The These examples make clear that R&D increase federal R&D spending on basic tax credit would apply only to systems is not simply a dollars and cents issue. research, particularly on biomedical that meet a strict 60-percent overall Federal R&D policy makes improve- research which leads to huge benefits energy efficient requirement. This pro- ments to the quality of life across-the- to all Americans. vision will help increase the Nation’s board for all Americans. Today, private industry plays the energy efficiency by encouraging in- The R&D tax credit has proven its ef- largest role in the nation’s research ef- vestment in these highly efficient sys- fectiveness. Numerous studies during fort, funding 65% of all R&D. Industry’s tems. the past decade have found that each Last month the Energy and Natural role makes it clear . . . that if overall dollar of tax credits generates between Resources Committee held a hearing on R&D is to increase, we must pursue $1 and $2 of additional R&D. Therefore, distributed power generation. The policies which create a good business taxpayers are getting a solid return on hearing made clear that technologies climate for firms to pursue long-term their investment in terms of greater such as microturbines, fuel cells, and increases in their R&D budgets. We economic growth, a higher standard of the various renewable resources can want America’s leading-edge compa- living, and in numerous cases—a longer provide many practical benefits, in- nies to hire new scientists, invest in and healthier life span. cluding reduced dependence on high- new technologies and new research fa- As chairman of the Joint Economic tension power transmission lines, high- cilities—and the R&D tax credit pro- Committee, last month, along with er energy efficiency, lower costs, in- vides that crucial incentive. Senator BENNETT, I hosted a high-tech creased reliability, and reduced emis- To see the benefits of R&D, look no summit which brought together busi- sions. Moreover, by combining the pro- further than America’s economic per- ness leaders from all across the high duction of heat and electric power in formance today. We are in the eighth technology industries. One issue every- one package, overall efficiencies of up consecutive year of non-inflationary one seemed to agree on was that a per- to 90 percent can be achieved. growth, and technology industries de- manent R&D tax credit would advance Though I believe my amendment is serve a large share of the credit. In the development of new technologies, important and would provide signifi- fact, high-tech industries have ac- leading to breakthroughs which benefit cant economic, reliability, and envi- counted for about one-third of real the environment, increase transpor- ronmental benefits, I am not going to GDP growth in recent years. tation safety, treat serious illnesses call it up for one very simple reason: Advancements from R&D lead to a and save lives. And on top of all this, a This tax bill isn’t going anywhere. The huge number of improvements to our Coopers & Lybrand study found that a Senate will soon pass this bill, but the quality of life. The most dramatic im- permanent extension to the credit President is not going to sign it. In a pact of R&D on our quality of life is would raise American incomes due to few weeks, when the Senate comes evident in biomedical research and higher productivity growth and con- back with a more sensible package of health care. Here are some examples of tribute substantially to our economic tax legislation, I hope my amendment the payoff to medical R&D: growth. will be incorporated in a bill that we It used to be that patients with kid- The R&D tax credit has proven its can pass and send to the President for ney failure had to undergo frequent worth many times over. Mr. President, his signature. transfusions, which are expensive, though I am pleased we have extended The incentives for distributed gener- carry substantial risks, and leave R&D for 10 years, it is my hope that ating technologies in my amendment many patients anemic. Many kidney the R&D tax credit will one day be a will go a long way to realizing the best patients had to cut back on work or permanent fixture in our Tax Code so future for electric power generation quit their jobs, or go on public assist- it can spur innovation and economic and efficient use of energy. I hope we ance. Through extensive R&D, one of growth throughout the next millen- can pass them in the next tax bill. America’s top biotech companies cre- nium. Mr. MACK. Mr. President, I would ated a new drug that allows the body to Mrs. FEINSTEIN. Mr. President, al- like to talk a few minutes about one create red blood cells again and enables though I have a great deal of respect S9736 CONGRESSIONAL RECORD — SENATE July 29, 1999 for the chairman of the Senate Finance a matter of fact, they are made impos- vital for their survival that the mas- Committee, close examination of the sible. sive Republican tax package be passed. Taxpayer Refund Act of 1999 has led me The Republican plan endangers vir- I would like to read from some of the to conclude that the $792 billion Repub- tually all domestic program priorities, letters that I have received, to give my lican tax bill passed out of the Finance forcing cuts of close to 40 percent in colleagues a sense of what the people of Committee is too much too soon and domestic spending over the next dec- California are thinking about this could well have serious adverse effects ade. The Republican plan would com- issue. on federal priorities and the national mit the nation to major cuts in mili- A letter I received from a woman in economy. tary readiness, education, healthcare, Berkeley sums up much of this debate The Republican tax plan would de- and crime-fighting, just to name a few quite well, and is reflective of much of vote virtually the entire projected non- areas. the mail I have received. And it is fur- Social Security surplus over the next In fact, under this plan, to avoid defi- ther testament to the fact that the ten years—some $932 billion out of $964 cits, domestic spending will have to be American people are often more wise billion, according to the CBO—to tax cut an additional 23 percent by 2009. then many of their elected leaders. cuts. That would leave just $32 billion But if defense programs are to be fund- This letter reads: for everything else—Medicare needs, ed at the level recommended by the I am very concerned about proposed tax defense, health care, education, com- Joint Chiefs—as I believe they should cuts and urge you to be cautious! bating crime, everything else that the be—then domestic spending will have First, we really do not know if the pro- government does. Clearly, that is not to be cut by 38 percent. Cuts of this posed surplus will be there in the next 15 sustainable. magnitude would: years. In fact, the Republican plan may well Reduce Head Start services over one- Second, we have enormous debt, and, in my lead to substantial deficits unless the third, from the 835,000 children who mind, the major portion of the surplus should be used to pay down our debt. This Congress and the President are willing would otherwise be served to 460,000. to not only keep the present caps, but would be a boom to baby boomers, etc since It would slash Title I, Education for their ‘‘invested’’ surplus Social Security to tighten them even further. the Disadvantaged, programs, denying taxes are already spent. Talk about ‘‘family By devoting 97 percent of a surplus 4 million children in high poverty com- value’’—pay your debt first. that has not yet been generated to tax munities throughout this nation (from Third, Social Security, Medicare, and child cuts and to the additional interest the 14.6 million projected) access to services all need financial attention. costs of not reducing the debt—$932 bil- key educational services necessary to Please do not vote for a large tax cut. It is lion—the Republican plan creates a improve their future prospects. not the right thing for our national financial future. great risk that we will return to the It would cut the National Institutes era of deficits and rising debt. of Health budget by $8.6 billion from For those of my colleagues who may When I first came to the Senate in the current baseline, which would en- be quick to dismiss a letter coming 1993, the Federal budget deficit was danger NIH’s ability to fund new re- from Berkeley, I also received a note $290 billion, and expected to continue search grants. It would gut the cancer from a couple in Sonoma which read: for the foreseeable future. ‘‘We are two registered Republicans Through the imposition of tough fis- program and certainly prevent the dou- bling of funding for cancer research as who would prefer no tax cut. Pay off cal discipline—and by making tough the national debt and lower interest budgetary choices—we have now man- this body has supported by a vote of 98– 0 in 1997 in a Sense of the Senate. rates thereby. Also secure Social Secu- aged to bring the federal budget back rity and improve healthcare for every- in balance. We should not now precipi- It would cut Superfund cleanup funds by $870 million, eliminating all new one.’’ tously put these gains at risk. A man in San Diego wrote: If we abandon the fiscal discipline federally-led clean-ups due to begin in I want the national debt payed down. I and responsibility that have allowed us 2009, and making it difficult, if not im- possible, to meet the EPA’s 900-site want Social Security and Medicare shored to get to where we are today—our up. I don’t want more government spending. economy growing and our budget in cleanup goal in 2002. There are 96 Superfund sites in Cali- If we can do that and get a tax cut fine. If we balance—we will once again find our- can’t fine. I don’t want to depend on your selves running up annual deficits in the fornia on the National Priority Clean- economist’s estimates of overages, since we tens of billions of dollars. up List, including Iron Mountain near know their abilities are mediocre at best! The bottom line is that the Repub- Redding and the San Gabriel Valley And from an e-mail from Aptos: lican plan is too much, too soon, too site in Los Angeles county. Construc- tion is underway at just 38 percent of I am opposed to the recent large tax break fast. It: legislation in the House. We need instead to Spends money which Congress does these sites. The Republican tax plan be paying down the debt and saving tax cuts not yet have. This surplus has not yet may put continued work on these sites for when they are truly needed. The more we materialized and will not until next in jeopardy. pay off our national debt, the more of our year—assuming projections are cor- The Republican plan cuts to the Im- hard earned tax dollars will actually go to rect, which they may not be. What hap- migration and Naturalization Service programs, not debt repayment, and the more pens if there is a military need? What could result in a reduction of over 6,000 we will be able to afford true tax cuts in the future. Lets not spend our future away. happens if there are large national dis- Border Patrol Agents (from the number asters? What happens if the economy projected); cuts to the FBI could result In fact, I believe that if our col- slows down? Answer: All surplus pro- in a reduction of over 6,000 FBI agents leagues on the other side of the aisle jections are in the wastebasket. (from the number projected). were willing to put partisan posturing In fact, the projected surpluses which Does not eliminate publicly held behind them, a responsible tax cut have set off the tax-relief movement debt. Today, public debt stands at $3.6 would be possible within the context of may never materialize. It will only trillion. We have an opportunity to the budget plan proposed by the Presi- come about if the economy continues eliminate this public debt entirely by dent. to grow and if Congress cuts spending 2015—critical if we wish to keep inter- I support the Administration in set- even more deeply. est rates low—if we stick with a fis- ting aside 62 percent of the surplus for The Republican plan does nothing to cally responsible approach. Social Security, some $3.5 trillion over protect Medicare. No budget resources I represent the most populous state 15 years. It extends the program’s sol- are set aside for Medicare solvency. in the union. Most important issues be- vency to 2053, and eliminates publically And by giving nearly all the surplus fore the Senate produce letters and e- held debt by 2015. This means that the outside of Social Security’s need to tax mail in excess of 10,000 a week, and ‘‘baby boomer’’ generation’s Social Se- cuts, the Republican plan does nothing often 20,000 or 30,000. Yet, I have re- curity is protected. to extend the solvency of Medicare ceived remarkably few letters urging I support extending the solvency of trust fund, which will be bankrupt by tax cuts. And those letters that I have Medicare from 2015 to 2027 by dedi- 2015. received—109 last week—have been cating 13.5 percent of the surplus, some Nor does it provide coverage for pre- equally split. In fact, only one person $794 billion over 15 years to Medicare. scription drug benefits to be added. As has written to me saying that it is This is vital if there is to be a solvent July 29, 1999 CONGRESSIONAL RECORD — SENATE S9737 system. It is mandatory if addressing a portant incentive for U.S. companies to learn from their first-hand experiences change in benefits is contemplated. continue to develop the cutting-edge and gain a deeper insight into the ob- Finally, I strongly support itemizing technologies of the 21st century. stacles they face. During the 105th Con- 2.5 percent of the surplus, or $156 bil- So, the complete elimination of the gress, I introduced legislation—the lion over 15 years for education, and 6 marriage tax, the low-income housing International Anti-Corruption Act—to percent of the surplus or $366 billion credit, and the R&D credit would total link U.S. foreign aid to how conducive over ten years for various discre- some $269 billion over the next years, recipient countries are to business in- tionary programs such as defense, vet- well within the $271 billion cap. vestment. I intend to reintroduce that erans affairs, research, agriculture, and Unfortunately, the Republican plan legislation shortly, taking into ac- environmental protection. passed by the Finance Committee is count testimony presented during last That would leave $271 billion over the neither common sense nor bipartisan. week’s Commission hearing. next ten years which could be utilized It is a tax plan which will endanger The time has come to stop doing as a tax cut. the federal budget, places Medicare at business as usual with the Russians Indeed, that is why I worked with my risk, force deep and unnecessary cuts and others who gladly line up to re- colleague from Iowa, Senator GRASS- in important domestic priorities, and ceive our assistance then turn around LEY, to put together and introduce ear- may undermine the long-term health of and fleece U.S. businesses seeking to lier this year a moderate bill that pro- the U.S. economy. It is unwise, and I assist with the establishment of legiti- vides needed tax relief for working urge my colleagues to think long and mate operations in these countries. An families while fitting within the budg- hard before plunging headlong and article in the Washington Post this et framework set out by the President heedless down this path of fiscal irre- week illustrates the type of rampant to protect Social Security and Medi- sponsibility. and blatant corruption faced by many care. Congress has an unprecedented op- in the U.S. business community, in- The Grassley-Feinstein plan would portunity to put our fiscal house in cluding companies based in my home cost $271 billion over ten years. It pro- order. We can protect Social Security state of Colorado. vides a $61.4 billion cut in the marriage and Medicare, meet other domestic and Mr. President, I ask unanimous con- penalty; a 100 percent deduction for international priorities, and eliminate sent that the full text of this article be health insurance expenses and a tax the federal debt. And we can provide printed in the RECORD. credit for long-term care ($117 billion the American people with significant There being on objection, the mate- over ten years); an increase in the low- and much needed tax relief. This is not rial was ordered to be printed in the income housing credit ($6.6 billion over some pie in the sky scenario, but a re- RECORD, as follows: ten years); tax credits for child care alistic appraisal of what we can do if INVESTORS FEAR ‘‘SCARY GUY’’ IN RUSSIA and education, including help for stay we are willing to move beyond partisan TALKS at home parents, with the HOPE col- posturing and politics as usual, and do (By Steven Mufson) lege credit, and with student loan in- what is right for the American people. Russian Prime Minister Sergei Stepashin terest payments ($32.3 billion over ten f arrived in Seattle on Sunday to court Amer- years); and it helps our economy con- ican investment in his country’s ailing econ- BUSINESS AS USUAL IN THE tinue to grow by making permanent omy, but his entourage included a regional RUSSIAN FEDERATION the R&D tax credit ($27.4 billion over governor who has been accused of using ten years). Mr. CAMPBELL. Mr. President, I strong-arm tactics to wrest assets from for- In fact, it is much like the Demo- take this opportunity today in my ca- eign investors. The controversial member of Stepashin’s cratic plan. It is a common sense, bi- pacity as Co-Chairman of the Commis- sion on Security and Cooperation in delegation is Yevgeny Nazdratenko, gov- partisan approach. ernor of Primonsky province in Russia’s Far Of all the tax cuts that have been Europe, known as the Helsinki Com- East, who is embroiled in several disputes proposed, I believe the one that would mission, to draw the attention of my with foreign business leaders. be of the most help to the American Senate colleagues to the growing prob- ‘‘Basically the governor is a pretty scary people would be marriage penalty re- lem of official and unofficial corrup- guy,’’ said Andrew Fox, who sits on the lief. tion abroad and the direct impact on boards of more than 20 companies in the re- It makes sense for social reasons: It U.S. business. gion and is the honorary British consul in reinforces the important institutions Last week I chaired a Commission Valdivostok. Fox said that Nazdratenko hearing that focused on the issues of summoned him on June 3 and threatened to of family and marriage. send him ‘‘on an excursion to visit a very And it makes sense for economic rea- bribery and corruption in the OSCE re- small room’’ where Fox would be kept until sons: It eliminates what many of us see gion, an area stretching from Van- he agreed to give the governor control of a as a vast inconsistency in our tax law, couver to Vladivostok. The Commis- crucial stake in a shipping company and that two people could find that they sion heard that, in economic terms, leave the company’s existing management pay more in taxes if they are married rampant corruption and organized intact. Fox left that week and is now in then if they stay single. It makes no crime in this vast region has cost U.S. Scotland. sense. businesses billions of dollars in lost David Gens, finance director of Seattle- Another approach to this tax relief contracts with direct implications for based Far East Maritime Agency, said the Russian partner of one of the company’s af- question would be to simply eliminate our economy here at home. filiates was ordered to contribute 10 percent the marriage penalty outright, starting Ironically, Mr. President, in some of of revenue for the rest of the year to in 2002, and allow married couples to the biggest recipients of U.S. foreign Nazdratenko’s reelection campaign. file either individually or jointly at assistance—countries like Russia and In yet another dispute, an American inves- their option. This would cost some $234 Ukraine—the climate is either not con- tor has alleged that Nazdratenko packed the billion for the eight years. ducive or outright hostile to American board of a company, diluted the ownership A tax relief plan which starts with a business. This week a delegation of interest of foreign investors and diverted $234 billion cut in the marriage penalty Russian officials led by Prime Minister funds to coffers for his December reelection campaign. would also allow us to include other Sergei Stepashin are meeting with the Senior administration officials said important provisions. I would support Vice President and other administra- Nazdratenko would not be included in meet- including an immediate increase in the tion officials to seek support of the ings with President Clinton, Vice President low-income housing tax credit, index- transfer of billions of dollars in loans Gore or other top U.S. officials today in ing that credit to inflation, which and other assistance, money which ul- Washington. But several business leaders would cost $6 billion over ten years. timately comes from the pockets of said the mere presence of the Vladivostok The low-income housing tax credit is U.S. taxpayers. politician, who accompanied Stepashin in critical for financing housing for low I recently returned from the annual Seattle for a tour of a Boeing plant and a dinner hosted by Washington Gov. Gary income families. I would also support session of the OSCE Parliamentary As- Locke (D), was sending a bad signal to inves- the permanent extension of the R&D sembly in St. Petersburg, Russia, tors. tax credit,which costs some $27.4 bil- where I had an opportunity to sit down Russia has defaulted on its debts, it has a lion over ten years, and provides an im- with U.S. business representatives to lot of economic problems, it should be extra