[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          THE SOCIAL SECURITY DOMESTIC EMPLOYMENT ACT OF 1994

  Mr. DURENBERGER. Madam President, I rise to note with satisfaction 
that, late yesterday evening, the Senate unanimously approved the 
conference report on the Social Security Domestic Employment Act of 
1994.
  I am very pleased that this body has acted to remedy the problems 
associated with the payment of Social Security taxes on behalf of 
domestic workers.
  We all know that the current system doesn't work. General ignorance 
of the present law, an absurdly low threshold for triggering liability 
for Social Security taxes, and overly burdensome quarterly reporting 
and payment obligations virtually ensure very low compliance.
  As a result, many Americans who, in every other respect, are 
meticulously law-abiding are in violation of the law.
  And tragically, many domestic workers are denied the Social Security 
benefits to which they are properly entitled. As Senator Moynihan has 
eloquently noted, this tragedy is compounded by the fact that domestic 
workers are precisely the sort of men and women whom Frances Perkins 
sought to help when the Social Security Program was first conceived.
  In the immediate aftermath of the doomed Zoe Baird nomination, I 
introduced--as primary sponsor--S. 402, the Occasional Employment 
Equity Act. The purpose of this bill was to remedy the most egregious 
shortcoming of current law--the absurdly low threshold for triggering 
Social Security tax obligations on wages paid to domestic workers.
  Under current law, an employer must withhold Social Security taxes 
for a domestic worker who earns more than $50 per quarter. This 
threshold was established in 1954, and has never been adjusted for 
inflation. S. 402 would have raised this amount to $250, which the 
Congressional Budget Office estimates is roughly equivalent to $50 in 
1954.
  Madam President, I am pleased to note that the conference report 
adopted that $1,000 threshold
  I believe the $1,000 threshold constitutes an improvement over the 
threshold included in the bill which initially passed this body. That 
figure, the amount required for one Social Security quarter of 
coverage--$620 in 1994--presented two problems.
  First, it failed to reflect fully 30 years of inflation since the $50 
figure was adopted in 1954. Second, it presented a less clear threshold 
than $1,000 per year. If we have learned nothing else in dealing with 
this issue, it is that the law must be easily understood if it is to be 
widely observed.
  Like S. 402 would have done, the Social Security Domestic Employment 
Act of 1994 will help reduce the reporting burden on ordinary 
Americans--whether it's a parent who hires an occasional babysitter, or 
a senior citizen who needs occasional help in shoveling the sidewalk or 
running errands.
  On the other hand, the legislation passed by the Senate will in no 
way relieve employers of their responsibility to pay Social Security 
taxes on behalf of those workers who perform a considerable amount of 
work for them.
  I also applaud and endorse the other reforms included in the 
conference report.
  Permitting employers to pay Social Security taxes on wages paid to 
domestic workers annually rather than quarterly--and to report those 
taxes on their Form 1040's--is simple common sense, something that has 
been missing from this area of law. Other reforms, such as exempting 
wages paid to domestic workers under age 18 from Social Security taxes, 
also make sense.
  Finally, Madam President, I wish to congratulate Senator Moynihan, 
chairman of the Finance Committee, on his leadership on this issue.
  Acting on his deep concern for the men and women who work as domestic 
employees who do not yet benefit from Social Security coverage, Senator 
Moynihan personally shepherded these reforms through the legislative 
process and fended off the addition of potentially damaging amendments.
  Thanks to the efforts of Senator Moynihan and others, many of the men 
and women most in need of Social Security will be covered for the first 
time. Frances Perkins would be pleased--and we also should be proud.

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