[Congressional Record Volume 141, Number 181 (Wednesday, November 15, 1995)]
[Senate]
[Pages S17068-S17078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 
                        1996--CONFERENCE REPORT

  Mr. DOLE. Mr. President, I submit a report of the committee of 
conference on H.R. 2020 and ask for its immediate consideration.
  The PRESIDING OFFICER. The report will be stated.
  The legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendments of the Senate to the bill (H.R. 
     2020) making appropriations for the Treasury Department, the 
     United States Postal Service, the Executive Office of the 
     President, and certain Independent Agencies, for the fiscal 
     year ending September 30, 1996, and for other purposes, 
     having met, after full and free conference, have agreed to 
     recommend and do recommend to their respective Houses this 
     report, signed by a majority of the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of October 25, 1995.)
  Mr. DOLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRYOR. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRYOR. Mr. President, I thank the Chair for recognizing me.
  Mr. President, in a few moments it is my understanding, according to 
the majority leader's request, that we are about to begin consideration 
of the conference report on the Treasury-Postal appropriations bill. 
That is my understanding. I think that will be coming to the Senate 
floor in just a very few moments.
  Mr. President, I want to remind my colleagues respectfully, 
notwithstanding the fact that the Senate in a voice vote knocked out a 
provision which was in the bill that came over from the House of 
Representatives, this provision has now been put back in during the 
conference between the House and Senate, and the final conference 
report including this provision is going to be voted on in a few 
moments by the Senate.
  Here is what this provision does: For the first time--for the first 
time--in the history of this great Republic, we are going to grant the 
authority for the Internal Revenue Service to privatize tax 
collections--for the first time.
  There are no guidelines. There are no ethics rules. There are no laws 
or regulations that pertain to this at this point. But we are going to 
be saying that we are going to put $13 million in for a pilot project 
to see how much law firms, lawyers, and private bill collectors can go 
out and collect from people who owe the Internal Revenue Service money.
  This was tried a few years ago, as far back as the ancient Greeks. 
Actually, this led, I might say, to this practice being labeled as 
``tax farming.'' These tax farmers, Mr. President, became so very 
unpopular that ultimately they were beheaded. There is a lot written 
about this. There is a lot stated about this.
  We are about to commit the act of not recognizing our history nor 
realizing what this could do in the future of tax collections in this 
country.
  I have been advised, Mr. President, by those with great experience in 
parliamentary procedure--certainly greater than myself--that it will be 
impossible for this Senator or any other Senator to move that we 
recommit the conference report with instructions to the conferees. The 
reason is that there is no conference--the conference has disbanded. 
That is my understanding at this point. I hope I am wrong about that, 
but I think I am correct.
  Second, I then thought perhaps I would try something like a sense of 
the Senate or perhaps some other avenue of approach so that we could 
strike from this bill that particularly onerous provision that is going 
to send this country stepping toward tax farming and tax collections by 
the private sector against our own citizens.
  Mr. President, I have been advised that there is nothing that I can 
do at this moment to strike that provision, with the exception of just 
trying to talk about it and wait for another provision in another piece 
of legislation subsequent to this at the appropriate time.
  In a moment, I will continue this discussion. I will continue talking 
about why I think this is a very, very bad step, a dangerous step, a 
precedent-setting step, wading off into an area where we have no 
guidelines, no ethics protection, no protection for confidentiality to 
protect the taxpayers, something that I hope at the appropriate time we 
can strike from this particular piece of legislation.
  I thank the Chair for recognizing me. I yield the floor.
  Mr. McCAIN. Mr. President I want to take 1 minute to thank both the 
managers of the bill, Senator Shelby and Senator Kerrey.
  I often am critical of appropriations bills that come to the floor 
because of unnecessary and wasteful spending that is associated with 
it. I want to say that I have reviewed this bill, and with a very rare 
exception, this bill is clean of wasteful and unauthorized programs.
  I think it is probably the best piece of legislation in the 
appropriation cycle that I have seen. I want to express my appreciation 
to both Senator Kerrey and Senator Shelby for resisting what seems to 
be irresistible on the part of some members of the Appropriations 
Committee, and that is loading it up with unauthorized projects and 
other special interest programs.
  I want to again thank him for an outstanding piece of legislation. I 
yield the floor.
  Mr. BUMPERS. Mr. President, I see Senator Shelby is not here, and I 
assumed we were not ready to start in on this bill. I thought I might 
make a few remarks pending his arrival.
  Mr. KERREY. I would like to begin. I know Senator Shelby will be down 
here shortly.
  How long will the Senator speak?
  Mr. BUMPERS. You never know when I get wound up.
  Mr. KERREY. I am aware of that. The Senator from Alabama is coming to 
the floor.
  Mr. BUMPERS. Is there a time agreement on the bill?
  Mr. KERREY. I believe they are going to try to set the time for the 
vote at 5 o'clock, and I doubt that Senator Shelby and I are going to 
take a great deal of time in opening statements.

[[Page S17069]]

  Mr. BUMPERS. Fine. I will wait until then or at some hiatus in the 
bill to speak, Mr. President. I thank the distinguished ranking member.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, today with my distinguished ranking 
member, Senator Kerry, I bring to the Senate the conference report for 
H.R. 2020, the fiscal year 1996 appropriations for the Department of 
the Treasury, the U.S. Postal Service, the Executive Office of the 
President, and certain independent agencies.
  The conference report we are presenting today contains total funding 
of $23,161,490. This bill is $339,457,000 below the appropriations 
provided in fiscal year 1995. It is $15,797,000 below the House-passed 
bill and $1,735,000,000 below the President's request.
  Of the totals in this bill the conference is recommending 
$11,263,514,000 for new discretionary spending. The balance, 
$11,889,400,000 is for mandatory programs.
  The $11,263,514,000 the committee proposes for domestic discretionary 
programs is almost $1.8 billion below the President's request. Let me 
repeat that, Mr. President. This bill is nearly $1.8 billion below the 
President's fiscal year 1996 request. It is also $340 million below the 
amount appropriated for the accounts funded in this bill in fiscal year 
1995.
  Reaching this level has not been an easy task. We have had to make 
some very difficult decisions, while trying to ensure that funds are 
made available to carry out essential Government services.
  Mr. President, this bill includes $10,303,999,000 for the Department 
of the Treasury.
  The conference report includes $121,908,000 for payment to the Postal 
Service fund for free mail for the blind, overseas voting, and payment 
to the Department of Labor for disability costs incurred by the old 
Post Office Department.
  The President receives $156,844,000 to exercise the duties and 
responsibilities of the Executive Office of the President.
  This conference report contains $7.5 million for the operations of 
the Office of National Drug Control Policy. The fact that we have 
included funding for the drug czar's office does not mean I am 
satisfied with the current drug policy of this administration. I have 
made my feelings on the ineffectiveness of this office known before. I 
will not take the time of my colleagues to restate it again today. I do 
want to reiterate that the committee will revisit funding for ONDCP in 
1996. I certainly hope we will see some changes.
  This bill includes $545,002,000 for construction of new courthouses 
and Federal facilities. This funding provides the General Services 
Administration the ability to let construction contracts for buildings 
which construction can begin in fiscal year 1996. There is no funding 
for projects where no construction awards can be made in fiscal year 
1996.
  There is $11.8 billion in mandatory payments through the Office of 
Personnel Management for annuitant and employee health, disability and 
retirement, and life insurance benefits.
  There is approximately $375 million for other independent agencies.
  Mr. President, this bill proposes to terminate the Advisory 
Commission on Intergovernmental Relations and the Administrative 
Conference of the United States. Funds are provided for ACIR to 
complete the unfunded mandates study, and provide for the orderly 
closedown of the two agencies.
  Mr. President, this subcommittee continues to be a strong supporter 
of law enforcement. We have done what we can to ensure that the law 
enforcement agencies funded in this bill have the resources to do the 
job we ask them to do.
  There has been considerable discussion since this bill was reported 
from the subcommittee about the level of funding for the Internal 
Revenue Service. The level of discussion continued through the 
conference. The conference report exceeds the bill passed by the Senate 
by $31 million. The Senate conferees worked with the conferees from the 
other body to do what we could to resolve the differences between the 
two Houses to balance processing and enforcement, while continuing tax 
systems modernization efforts.
  Mr. President, let me be perfectly clear on this. As I said when the 
Senate first deliberated this bill, that the committee's options were 
limited. Many may disagree with the choices we have made, but we had to 
work with limited resources. Funding for the IRS makes up 65 percent of 
the discretionary spending in this bill. There is no other way to reach 
savings called for in our 602(b) allocation.
  Mr. President, this bill, as we all know has been held up because of 
discussions on the legislative language popularly called the Istook 
amendment. The amendment in disagreement is language offered by Senator 
Simpson, which I support. The other body insisted that the Senate 
recede from its position in amendment No. 132. Senator Simpson, the 
sponsor of this amendment, has indicated that he will support the 
motion to recede on this amendment so we can send this bill to the 
President. I personally want to thank Senators Simpson and Craig for 
all of their hard work on this issue.
  I yield to Senator Kerrey, the subcommittee's ranking member.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, I thank the Chair. First let me 
congratulate the Senator from Alabama for doing an exceptional job of 
chairing this subcommittee and working through the various amendments 
and problems that he has faced, along with Chairman Lightfoot on the 
House side, in making certain we can deliver a bill to the President.


                         Privilege of the Floor

  Mr. KERREY. Mr. President, I ask unanimous consent that John 
Libonati, legislative fellow with the Appropriations Committee, be 
granted the privilege of the floor throughout the consideration of the 
conference report.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, I am pleased to join the subcommittee 
chairman, Senator Shelby, in bringing this conference report to the 
floor.
  As the chairman pointed out, this conference report is substantially 
below the requested and enacted levels for the many programs and 
activities under the jurisdiction of the Treasury Department, the 
Executive Office of the President, and certain independent agencies.
  Having said that, I want to take this opportunity to compliment the 
distinguished Senator from Alabama, Mr. Shelby, and the House 
subcommittee chairman, Mr. Lightfoot, for the bipartisan spirit they 
both displayed during the conference to craft a conference agreement 
which, under the most severe budgetary constraints, meets the highest 
priorities of both the executive branch and the Congress.
  The conference report contains funding for the continuation of the 
Council of Economic Advisers, which the House had proposed to 
eliminate, and does not include many of the controversial legislative 
riders which would most assuredly open this bill to a Presidential 
veto.
  This conference report funds Federal programs where a compelling case 
has been made for their continued existence. And, in the case of two 
agencies, the Administrative Conference of the United States and the 
Advisory Commission on Intergovernment Relations, it provides only 
limited funding for the orderly close out of their operations.
  While most programs have been reduced below enacted levels, the 
conference agreement does contain modest increases for Treasury law 
enforcement agencies to permit them to sustain current levels of 
vigilance in the war on drugs, violent and financial crimes 
investigations, counterterrorism, Presidential protection, White House 
security, and law enforcement training.
  Funding for new Federal building and courthouse construction has been 
funded at the Senate-passed level of $573 million, or $415 million 
below the requested level. In addition, the Senate criteria on Federal 
building construction were adopted by the conferees. These criteria 
provide full funding for GSA's highest priority projects, which have 
received site or design funds in the past; but do not permit the 
funding of new starts or projects where the construction contract 
awards will not be awarded in fiscal year 1996.
  I believe this is a sound approach. We are funding buildings at 
levels that will 

[[Page S17070]]
permit GSA to complete the projects. We did not go along with the House 
proposal to provide 40-percent funding for these projects. That 
approach will only prolong these projects and will not enable GSA to 
let any contracts in fiscal year 1996.

  Mr. President, having said that, I do not support all of the actions 
taken by the conference committee. I am particularly concerned that the 
Senate provision fencing IRS tax systems modernization funds until GAO 
certifies that certain corrections in the management of the program 
have been made, was dropped.
  Mr. President, to date, $2.5 billion has been invested in this 
program to modernize IRS' outdated computer systems. The conference 
agreement contains an additional $695 million toward this effort. When 
all is said and done, this program could cost the taxpayers upward of 
$8 billion. This is a hefty sum of money, particularly in these 
budgetary times, for a program which according to GAO is fraught with 
mismanagement and infrastructure problems. There is no doubt that the 
TSM concept should revolutionize the IRS. However, the way the agency 
is progressing on its implementation at this juncture, at some point in 
the future, we could find us regretting this substantial investment.
  Mr. President, I am also concerned about the reduced funding level 
for the IRS returns processing and taxpayer assistance account. The 
conference agreement cuts $81 million from the President's requested 
level for IRS' front-line returns processing and taxpayer assistance 
activities. The IRS estimates that it will process about 211 million 
returns and supplemental documents and will issue about 83 million tax 
refunds in fiscal year 1996. This is an increase of about 3 million 
returns and documents and 2 million refunds above the 1995 level. I 
just hope, Mr. President, that as a result of these reductions, refunds 
are not delayed and taxpayer questions do not go unanswered because we 
have not provided the agency with the funds it needs to operate at 
increased service levels.
  I am pleased that the final agreement includes a provision which I 
offered on the Senate bill to establish a Commission on the 
Restructuring of the Internal Revenue Service. I am hopeful, that 
through the work of this Commission, we will come up with some workable 
solutions to make the IRS a more customer-oriented organization, which 
will be the Nation's leading revenue producer while operating more 
economically and efficiently.
  Mr. President, depending on what happens to the amendment in 
disagreement, amendment No. 132, I believe this bill will be signed by 
the President. This bill was passed by the Senate on August 5, the 
conferees met September 12 and was it not for the controversial Istook-
McIntosh-Erlich provision, this bill could have been sent to the 
President and I believe signed prior to the close of the fiscal year.
  Unfortunately, we are now past that date, our agencies have been 
operating at reduced funding levels through two continuing resolutions, 
and now most of the agencies funded in this bill are in the shutdown 
phase. I believe we have an opportunity here to get this bill to the 
President without further delay. We have an obligation to the American 
public to get the job done and ensure that important tax, financial 
management, law enforcement, and Federal building programs move 
forward.
  So, I would urge my colleagues to support this conference report and 
put an end to the gridlock. I urge the adoption of the conference 
report.
  Let me comment on a couple of things. I suppose I am not unique. I 
imagine all of us are getting questions from home as to why we were 
unable to pass appropriations bills, why do we have the furloughing of 
Federal employees, and why have we essentially shut down parts of the 
Government. There are 200,000 Federal employees who have been 
furloughed for 2 days as a consequence of this particular 
appropriations bill.
  The Senator from Alabama referenced it. There were 141 amendments on 
this legislation that were subject to the conference of this 
subcommittee--141.
  The chairman called a conference, he and Chairman Lightfoot. We met 
on the 12th and 13th of September, a full 2 weeks before we were 
supposed to finish our work. According to the Budget Impoundment Act, 
we had to have that work done by the 30th of September.
  On the 12th and 13th, the chairman was successful in disposing of 140 
of 141 amendments. As he indicated, the only one that remained was the 
so-called Istook amendment, which appeared in neither version of the 
bill and which, regardless of your position on the issue, had no 
relevance to this appropriation bill, and which had a little or no 
support in the Senate, and delayed the final House and Senate action on 
this conference report.

  I mention it because there is a kind of a common perception--I think 
it is common--that there are significant differences between 
Republicans and Democrats on all these appropriations items, and that 
is why the Government was shut down.
  I agree with Senator Shelby on this piece of legislation. I am 
prepared to vote for it. Both of us wanted to move this thing out 
before the 30th of September, and it could have been not nearly as 
difficult as it might appear to the average citizen out there that is 
wondering what has gone on in the past couple of days--200,000 Federal 
employees being furloughed in the last 2 days. Again, not because of 
great ideological differences on spending, not because Democrats and 
Republicans disagreed that we need to get rid of the deficit that has 
been, I think, tormenting the Nation for many, many years, but because 
of a single amendment having to do with the regulation of 501(c)(3)'s 
and 501(c)(4)'s.
  Mr. President, I, too, appreciate the willingness of the Senator from 
Wyoming to allow us to recede to the House. I supported the original 
Simpson proposal, and appreciate very much his willingness to recede to 
the House in this particular case so we can move this to the President 
for his signature and end the furloughing of 200,000 Federal employees 
who are covered by this legislation.
  Let me also comment. The distinguished chairman mentioned his concern 
about the drug czar. I share that concern. I have a great deal of 
respect for Dr. Brown. It is not as if I am critical of him as an 
individual but the number one problem that we face with drugs today is 
the illegal consumption of drugs by young people 12, 13, and 14 years 
of age. Those who have made it either their living or their avocation 
trying to help us reduce drug consumption in America will say to us 
that the most important thing is to reduce the size of the funnel of 
people that are coming on line using illegal drugs. That means we have 
to get to young people and say to them that you should not use these 
illegal and dangerous drugs.
  I remember when former First Lady Nancy Reagan started the Just Say 
No Program. And I thought, well, this is a silly program. It cannot 
possibly work. The fact is it did work. The fact is that young people 
see the consumption and the use of illegal drugs in black or white 
materials. It is either yes or no. If we as adults do not say no to 
them, they are likely to say, ``Well, maybe it is OK.''
  Over the past 4 or 5 years, according to those like Jim Burke who 
have been involved in this effort in the private sector, there has been 
an increase of exposure to the youth of illegal drugs, either on 
television shows or in movies. This has been creeping in again to our 
culture--sort of an acceptance that perhaps marijuana use is OK, or 
that perhaps cocaine use is OK.
  So this idea that our leaders say to our youth do not do drugs, say 
no to drugs, this idea that can have a very powerful impact on our 
youth, to me, has sunken in rather impressively after listening to 
people out there in the private sector. I have been quite discouraged 
in looking at the drug czar who has legal authority to take action and 
has failed to either use that legal authority or to make much progress 
in the war on drugs.
  So I join with the Senator from Alabama. We initially were going to 
zero out the drug czar. We entered into a negotiation here on the 
floor, and when the bill was first being considered by the Senate and 
talked to the distinguished chairman of the Judiciary Committee and the 
ranking member of the Judiciary Committee, and they convinced us to 
accept some language 

[[Page S17071]]
that would urge the President to take stronger leadership. I personally 
am pleased to see that the President has announced that in January he 
is going to begin communicating. He is organizing a conference of 
youth.
  I think it is terribly important that our political leaders put that 
message out there, and that we start doing it repeatedly in order to 
reduce the size of the funnel of the number of people that are coming 
in and beginning to use illegal drugs.
  To say for emphasis, I am also with the chairman. The verdict is 
still out as far as I am concerned. I was willing to yield on this 
point, willing to give him a little bit more rope to try to see if they 
could be effective. But the bottom line for me is, if it is not 
effective, I will be back here next year suggesting that this Senate 
vote to zero out the drug czar. Get the job done or let us find some 
other organization or somebody else that can do it. Let us not pretend 
that we are solving the problem if the problem in fact is getting 
worse.
  Again, I say in closing that I appreciate very much the fine work 
Senator Shelby has done on this bill. I hope that in an expeditious 
fashion we can get this down to the President for his signature.


   proposed privatization of investigative services by the office of 
                          personnel management

  Mr. SPECTER. Mr. President, I would like to enter into a brief 
discussion with the distinguished chairman of the subcommittee to 
clarify a matter regarding the proposed privatization of Investigative 
Services by the Office of Personnel Management.
  It is my understanding that the House and Senate have directed the 
General Accounting Office to perform a detailed, long-term, cost-
benefit and feasibility analysis on the OPM submissions for an Employee 
Stock Ownership Plan [ESOP] for the Investigative Services under OPM's 
jurisdiction.
  Is it the intent of the conferees that OPM must retain full staffing 
at the Federal Investigative Processing Center [FIPC] in Boyers, PA, 
and that OPM may not proceed with the privatization of Investigative 
Services before receipt of the GAO report and in no event before March 
30, 1996?
  Mr. SHELBY. The Senator is correct. The committee has received the 
assurance of OPM that full staffing will be retained at the FIPC in 
Boyers with the recognition that many of the employees will be 
converted from the Federal payroll to the employee stock ownership 
plan.
  Mr. SPECTER. I thank the Senator for clarifying the intent of the 
conferees. This is an issue of great importance to several hundred 
Pennsylvania OPM employees and I appreciate the assistance of the 
distinguished chairman and his commitment to ensure that their 
interests and those of every taxpayer are best served. I thank the 
Chair and yield the floor.


                           fresno courthouse

  Mrs. FEINSTEIN. Mr. President, I would like to ask the distinguished 
chairman of the subcommittee on Treasury, Postal Service and General 
Government Appropriations, Senator Shelby, and the ranking minority 
member, Senator Kerrey, if they would engage in a brief colloquy with 
myself and my colleague from California, Senator Boxer.
  Mr. SHELBY. We would be happy to do so.
  Mrs. FEINSTEIN. We want to bring to the attention of the managers the 
need for a new courthouse in Fresno. The current U.S. courthouse in 
Fresno is at its full capacity and would require extensive 
modifications to meet seismic, fire and security standards.
  The current courthouse, the B.F. Sisk Building, opened in 1968 as an 
office building with only two courtrooms and a small amount of support 
space designated for the courts. Now, the court and related support 
agencies occupy 92 percent of the building with additional space being 
leased on the outside. There are currently four district, two 
magistrate and two bankruptcy courtrooms in the building, which is used 
by two district judges, two senior district judges, one visiting judge 
from Sacramento, two bankruptcy judges, two magistrate judges and 
visiting magistrate judge. Within the next year, there will be an 
additional senior judge. Five of the current courtrooms have been built 
out in previous office space. There is no room for future expansion.
  A recent seismic evaluation on the current building found that the 
cost of seismic retrofitting would be more than the cost of the 
building. Also, serious concerns have been raised about the safety and 
security standards in the building relating to its use as a court 
facility.
  Given the current situation and projected future growth, the city has 
been working with the courts, the General Services Administration [GSA] 
and the subcommittee to obtain funding for a new structure for the past 
few years. However, I understand that due to budget constraints, there 
is no funding provided for new start courthouse projects, including the 
Fresno project, in the conference report for the Treasury-Postal 
appropriations bill for fiscal year 1996.
  Mrs. BOXER. Mr. President I share my colleague's concern over the 
safety and lack of security of this facility. The chief judge for the 
Eastern District of California, the Honorable Robert E. Coyle, has 
informed me that ``the efficient, uninterrupted, safe and secure 
operation of the present courthouse cannot be carried out'' in the 
current building.
  I also want to make my colleagues aware of actions taken in Fresno 
pursuant to direction from this subcommittee last year. Senator 
Feinstein and I commend the city and GSA's work to develop a site for 
the proposed courthouse in downtown Fresno. As the senator may know, 
the fiscal year 1995 Treasury-Postal appropriations conference report 
acknowledged the beginning of the site selection process for a Federal 
courthouse in Fresno and directed GSA to locate a site in downtown 
Fresno for the project. To this end, the city has donated a site in 
downtown Fresno and is presently purchasing parcels to add to the city-
owned property for that purpose. Also, the city has agreed to complete 
all site and utility preparation work prior to construction will 
further, will build parking for the courthouse to accommodate nearly 
400 spaces.
  This agreement will save $5 million off the estimated Federal cost 
for site acquisition.
  It is important to recognize the importance of this project to the 
city of Fresno. GSA and the courts have worked closely with the city 
for the purpose of redeveloping a truly troubled downtown area. It 
would also appear from recent experience that the competitive bidding 
process in California is ripe for construction. In both Santa Ana and 
Sacramento, the bids came in considerable lower than the anticipated 
budget. However, one can only assume that delay in this project will 
only cause the cost to escalate.
  We would like to urge the chairman and ranking member, in light of 
the partnership between the city of Fresno and the judicial 
administration in complying with the committee's directive to reduce 
Federal spending, to make this project a high priority next year. We 
ask whether you will give the project your highest consideration.
  Mr. SHELBY. Yes. The subcommittee will carefully review this project 
in our deliberations next year for court construction for fiscal year 
1997.
  Mr. KERREY. I appreciate the words from my colleagues from California 
and I also want to express my congratulations for the agreement the 
court and GSA was able to work out with the city of Fresno. The Senator 
can be assured that I will do my part to see that this project receives 
serious consideration in subcommittee deliberations next year.
  Mrs. FEINSTEIN. We thank the chairman and ranking member for their 
understanding and thoughtful responses.
  Mr. DOMENICI. Mr. President, I rise in strong support of the 
conference agreement on H.R. 2020, the Treasury, Postal Service, and 
general Government appropriations bill for 1996.
  This bill provides new budget authority of $23 billion and new 
outlays of $20 billion to finance operations of the Department of the 
Treasury, including the Internal Revenue Service, U.S. Customs Service, 
Bureau of Alcohol, Tobacco and Firearms, and the Financial Management 
Service; as well as the Executive Office of the President, the Office 
of Personnel Management, and other agencies that perform central 
government functions. 

[[Page S17072]]

  I congratulate the chairman and ranking member for producing a bill 
that is within the subcommittee's 602(b) allocation. When outlays from 
prior-year budget authority and other adjustments are taken into 
account, the bill totals $22.8 billion in budget authority and $23.1 
billion in outlays. The total bill is at the Senate subcommittee's 
602(b) nondefense allocation for budget authority and under its 
allocation for outlays by $67 million. The subcommittee is also under 
its Violent Crime Reduction Trust Fund allocation by $1 million in 
budget authority and less than $500,000 in outlays.
  Mr. President, I ask unanimous to have printed in the Record a table 
displaying the Budget Committee scoring of the conference agreement on 
H.R. 2020.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

     TREASURY-POSTAL SUBCOMMITTEE SPENDING TOTALS--CONFERENCE REPORT    
             [For fiscal year 1996, in millions of dollars]             
------------------------------------------------------------------------
                                                       Budget           
                                                     authority   Outlays
------------------------------------------------------------------------
Nondefense discretionary:                                               
  Outlays from prior-year BA and other actions                          
   completed.......................................  .........     2,778
  H.R. 2020, conference report.....................     11,187     8,712
  Scorekeeping adjustment..........................  .........  ........
                                                    --------------------
      Subtotal nondefense discretionary............     11,187    11,490
                                                    ====================
Violent crime reduction trust fund:                                     
  Outlays from prior-year BA and other actions                          
   completed.......................................  .........         8
  H.R. 2020, conference report.....................         77        62
  Scorekeeping adjustment..........................  .........  ........
                                                    --------------------
      Subtotal violent crime reduction trust fund..         77        70
                                                    ====================
Mandatory:                                                              
  Outlays from prior-year BA and other actions                          
   completed.......................................        127       130
  H.R. 2020, conference report.....................     11,763    11,756
  Adjustment to conform mandatory programs with                         
   Budget Resolution assumptions...................       -334      -333
                                                    --------------------
      Subtotal mandatory...........................     11,555    11,553
                                                    ====================
      Adjusted bill total..........................     22,819    23,113
Senate Subcommittee 602(b) allocation:                                  
  Defense discretionary............................  .........  ........
  Nondefense discretionary.........................     11,187    11,557
  Violent crime reduction trust fund...............         78        70
  Mandatory........................................     11,555    11,553
      Total allocation.............................     22,820    23,180
Adjusted bill total compared to Senate Subcommittee                     
 602(b) allocation:                                                     
  Defense discretionary............................  .........  ........
  Nondefense discretionary.........................  .........       -67
  Violent crime reduction trust fund...............         -1        -0
  Mandatory........................................  .........  ........
      Total allocation.............................         -1       -67
------------------------------------------------------------------------
Note.--Details may not add to totals due to rounding. Totals adjusted   
  for consistency with current scorekeeping conventions.                

  Mr. BAUCUS. Mr. President, I was an early supporter of the taxpayer 
bill of rights which was enacted in 1988. That legislation protected 
the American taxpayer from overreaching actions by the IRS. This year, 
the Finance Committee included a number of additional provisions in the 
tax bill to protect the taxpayer.
  Unfortunately, the conference report for Treasury and Postal 
appropriations upon which we will vote today contains language taking 
us in the opposite direction. The report provides for an appropriation 
of $13 million to the IRS to ``initiate a program to utilized private 
counsel law firms and debt collection agencies in the collection 
activities of the IRS.''
  Mr. President, most bill collectors are paid on a contingency basis. 
We are in danger of creating a system that will encourage bounty 
hunters to collect taxes from U.S. citizens.
  Margaret Milner Richardson, the Commissioner of the Internal Revenue 
Service, in a letter dated August 4, 1995, expressed ``grave 
reservations'' with respect to privatizing the tax collection services 
of the IRS. To quote Ms. Richardson:

       What impact would private debt collection have on the 
     public's perception of the fairness of tax administration and 
     of the security of the financial information provided to the 
     IRS? A recent study conducted by Anderson Consulting revealed 
     that 59 percent of Americans oppose State tax agencies 
     contracting with private companies to administer and collect 
     taxes.

  Frankly, Mr. President, I believe that the 59 percent number would 
have increased dramatically had the survey inquired as to whether the 
IRS should contract with debt collection agencies to collect Federal 
income taxes.
  We are told by supporters of the proposal that we should not worry 
because the debt collectors will be under the direct supervision of IRS 
employees. I do worry Mr. President, because we have too many instances 
in which IRS employees themselves have abused their powers. This is why 
we enacted the 1988 taxpayer bill of rights and why this year's 
reconciliation bill contains additional taxpayer rights. I am not 
comfortable that debt collectors working on a contingency basis will 
respect taxpayer rights--even if they are under the direct supervision 
of IRS employees.
  For this reason, Mr. President, I plan to vote against the conference 
report.
  Mr. SHELBY. Mr. President, I now ask unanimous consent that the vote 
occur on adoption of the conference report to accompany H.R. 2020, the 
Treasury-Postal Service appropriations bill, at 4:45 p.m. this evening, 
and that the Senate recede from the Senate amendment in disagreement at 
that time.
  Mr. PRYOR. Reserving the right to object, Mr. President, I do not 
want to object, and I usually am not an obstructionist around this 
Chamber. But I want to be guaranteed some time, and enough time to 
explain a position that I have relative to the farming out of private 
tax collection.
  Mr. SHELBY. How much time does the Senator want?
  Mr. PRYOR. Let me say to my friend from Alabama that I do not think 
that I would use over 30 minutes. If I could have 30 to 35 minutes, I 
think I could cover the areas that I need to be covering. I would like 
the opportunity to ask some questions of my friend from Alabama as to 
how this very onerous provision crept back into this conference report.
  Mr. SHELBY. The Senator may ask questions of the Senator from 
Nebraska, too.
  Mr. PRYOR. I would be glad to ask either.
  Mr. SHELBY. Both of us. Sure.
  Mr. PRYOR. I wonder if I could be allocated a minimum of 35 minutes.
  Mr. SHELBY. What about 40 minutes? Is that OK?
  Mr. PRYOR. I will take 40 minutes. I do not think I will use all of 
that time. I thank the Senator very much.
  Mr. SHELBY. At 4:45. Would that be OK?
  Mr. PRYOR. If it is all right with the Senator from Alabama, could we 
say no later than 5 o'clock?
  Mr. KERREY. We have to vote at 4:45.
  Mr. SHELBY. An hour from now is 4:45.
  Mr. PRYOR. Could not we vote no later than 5 o'clock?
  Mr. SHELBY. We have a lot of Members. We will give you all the time 
and try to respond to whatever you want.
  Mr. PRYOR. I guess I will take at least 40 minutes. I hope I do not 
use it. I know my friend from Iowa wants to speak for 3 minutes on the 
issue. He can speak before I do, if that is all right with the 
distinguished managers.
  Mr. SHELBY. Sure.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Who seeks recognition?
  The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I rise in strong support of the action 
of the conferees decision not to fund President Clinton's initiative 
last year which spent $405 million to hire over 6,000 more IRS agents. 
This is an issue that Senator Lott and I have worked on very closely 
for over a year and I am pleased to see that our efforts have achieved 
a success for the taxpayers.
  In particular, I want to commend Senator Shelby for his work. This 
would not have happened were it not for Senator Shelby's efforts and 
his decision to put the interest of the American taxpayer first and not 
listen to the voices of empire-building bureaucrats at the IRS.
  I find it particularly galling that when the President is thumping 
his chest about vetoing bills, he forgets to tell the American people 
that one of his top priorities is to get $405 million to retain the 
6,000 plus additional IRS agents--that is right 6,000 more IRS agents 
that he hired last year.
  And remember, the IRS has already seen a massive increase in staff, 
from 82,000 in 1982 to over 110,000 in the early 1990's. Yet, that was 
not enough for President Clinton.
  President Clinton wanted to have 6,000 more IRS agents knocking on 
taxpayers doors. And last year, the big-spending Democrats in Congress 
were happy to oblige.
  But last fall, the voters spoke strongly for a smaller Government. 
And today we see a significant response to those voters. This bill will 
ensure that the IRS will not have 114,000 IRS agents looking through 
your files but 

[[Page S17073]]
instead 106,000--a reduction of 8,000 agents.
  We have asked the American taxpayers to tighten their belts enough 
times, now we are finally asking the IRS to do the same. And let me 
say, you do not hear about it in press releases from the White House, 
but in closed doors they have been fighting tooth and nail for more 
money to keep these additional IRS agents and incredibly, to hire even 
more.
  We have heard on this floor the question asked many times, ``Whose 
side are you on?'' It is clear that the White House is on the side of 
bigger bureaucracy and more agents at the IRS, and this Congress is on 
the side of the taxpayer and small businessmen and women struggling to 
pay the bills and who just want big Government off their backs.
  Once again I want to commend Senator Shelby and Congressman 
Lightfoot, chairman in the House and the conferees for their work on 
this issue. This is clearly a red letter day for taxpayers who have 
finally won one over the IRS.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRYOR addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. PRYOR. With no one else seeking recognition at this point, if I 
might, Mr. President, I would like to make a few points relative to 
this legislation and to one specific provision which bothers me to such 
a great extent that I will not only speak against this bill being 
passed, I will vote against this bill being passed, and I may be in a 
minority of one, but if that is the case I will be in that minority and 
be very proud of it.
  Historically, the Finance Committee, which is one of the oldest 
committees of this great institution, as is the Appropriations 
Committee, has not only been charged with tax collection but also 
charged with a very unique function in addition to that, and that 
function is the protection of the individual taxpayer. The protection 
of the individual taxpayer's rights has always, historically been a 
function not of the Appropriations Committee but of the Finance 
Committee of the Senate.
  On page 33 of the conference report that we are considering at this 
point--and that is the issue before the Senate--we find amendment No. 
22. This is the same language that was stricken by the Senate on August 
4, 1995, when the Senator from Alabama acquiesced in a unanimous-
consent request for an amendment by myself, and the Senate knocked out 
the House language which stated this--I am going to read amendment No. 
22, Mr. President.

       Restores and modifies House language authorizing $13 
     million for a private debt collection initiative.

  This is truly the tip of the iceberg. When my friend, Senator 
Grassley, of Iowa, a few moments ago was speaking about taxpayers' 
rights and the number of IRS agents that we are not going to employ, 
thus protecting the taxpayer, I went back many years ago remembering 
the work that Senator Grassley and myself and Senator Shelby, even in 
his days in the House of Representatives, were involved in by trying to 
get passed in the Congress the first-ever Taxpayer Bill of Rights, the 
first time that this country ever stated in statute rights specifically 
to protect the taxpayer.
  It was 1988 when this legislation was passed. And we are seeing today 
what I consider to be a great challenge to and a great erosion of the 
spirit of the Taxpayer Bill of Rights. Why is that? First, the Taxpayer 
Bill of Rights had a very key provision. I am sure my friend from 
Alabama remembers--I wish my friend from Iowa were here because he 
helped to draft that particular section--we stated in 1988 that there 
could be no bounty system, there could be no quota system with regard 
to tax collections from the taxpayers of America. We found egregious 
example after example throughout the 50 States where tax collectors 
were abusing the rights of taxpayers, where they were abusing these 
rights to the extent that the tax collectors before 1988 operated under 
a bounty system and under a quota system whereby their raises and the 
structure of their civil service retirement, their opportunity in the 
work force was based upon, ``How much did you collect?''
  Here is what we are doing now. For the first time in 200 years we are 
about to put our stamp of approval officially upon a bounty system. 
That is what this is. This is a bounty system where we cannot pay those 
lawyers to collect debts, where we cannot pay ABC Collection Service to 
collect debts of the IRS. There is no way we can put them temporarily 
on the Federal payroll. So we are going to pay them the only way there 
is to pay them: We are going to give them a percentage of what they 
collect.
  What sort of environment does that bring about? It does not take a 
rocket scientist to figure that one out. They are going to be out there 
using methods that are unprotected by statute, using a system of bounty 
hunter mentality that was in place before 1988, that is going to become 
the law of the land with the sanction of the U.S. Government. I think 
it is horrible that we would consider taking this very backward step 
and going back into the dark ages in the collection of our taxes.
  I received this letter August 4, and usually I am not on the side of 
the Internal Revenue Service. I chaired the Senate Finance Committee's 
subcommittee on oversight of the IRS for a good number of years. I 
worked closely with many of my colleagues on that committee and Members 
of this body. But on August 4, I received a letter from Margaret Milner 
Richardson, who is the Commissioner of the Internal Revenue Service at 
the Department of the Treasury, and I agree 100 percent.
  By the way, I ask unanimous consent to place this letter in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                       Department of the Treasury,


                                     Internal Revenue Service,

                                   Washington, DC, August 4, 1995.
     Hon. David Pryor,
     U.S. Senate,
     Washington, DC.
       Dear Senator Pryor: I am writing to express my concern 
     regarding statutory language in the FY 1996 Appropriations 
     Committee Bill (H.R. 2020) for Treasury, Postal Service and 
     General Government that would mandate the Internal Revenue 
     Service (IRS) spend $13 million ``to initiate a program to 
     utilize private counsel law firms and debt collection 
     activities. . .'' I have grave reservations about starting 
     down the path of using private contractors to contact 
     taxpayers regarding their delinquent tax debts without 
     Congress having a thorough understanding of the costs, 
     benefits and risks of embarking on such a course.
       There are some administrative and support functions in the 
     collection activity that do lend themselves to performance by 
     private sector enterprises under contract to the IRS. 
     *For example in FY 1994, the IRS spent nearly $5 million 
     for contracts to acquire addresses and telephone numbers for 
     taxpayers with delinquent accounts. In addition, we are 
     taking many steps to emulate the best collection practices of 
     the private sector to the extent they are compatible with 
     safeguarding taxpayer rights. However, to this point, the IRS 
     has not engaged contractors to make direct contact with 
     taxpayers regarding delinquent taxes as is envisioned in H.R. 
     2020. Before taking this step, I strongly recommend that all 
     parties with an interest obtain solid information on the 
     following key issues:
       (1) What impact would private debt collectors have on the 
     public's perception of the fairness of tax administration and 
     of the security of the financial information provided to the 
     IRS? A recent survey conducted by Anderson Consulting 
     revealed that 59% of Americans oppose state tax agencies 
     contracting with private companies to administer and collect 
     taxes while only 35% favor such a proposal. In all 
     likelihood, the proportion of those opposed would be even 
     higher for Federal taxes. Addressing potential public 
     misgivings should be a priority concern.
       (2) How would taxpayers rights be protected and privacy be 
     guaranteed once tax information was released to private debt 
     collectors? Would the financial incentives common to private 
     debt collection (keeping a percentage of the amount 
     collected) result in reduced rights for certain taxpayers 
     whose accounts had been privatized? Using private collectors 
     to contact taxpayers on collection matters would pose unique 
     oversight problems for the IRS to assure that Taxpayers Bill 
     of Rights and privacy rights are protected for all taxpayers. 
     Commingling of tax and non-tax data by contractors is a risk 
     as is the use of tax information for purposes other than 
     intended.
       (3) Is privatizing collection of tax debt a good business 
     decision for the Federal Government? Private contractors have 
     none of the collection powers the Congress has given to the 
     IRS. Therefore, their success in collection may not yield the 
     same return as a similar amount invested in IRS telephone or 
     field collection activities where the capability to contact 
     taxpayers is linked with the ability to institute liens and 
     levy on property if need be. Currently, the IRS telephone 

[[Page S17074]]
     collection efforts yield about $26 collected for every dollar expended. 
     More complex and difficult cases dealt with in the field 
     yield about $10 for every dollar spent.
       I strongly believe a more extensive dialogue is needed on 
     the matter of contracting out collection activity before the 
     IRS proceeds to implement such a provision. Please let me 
     know if I can provide any additional information that would 
     be of value to you as Congress considers this matter.
           Sincerely,
                                       Margaret Milner Richardson.

  Mr. PRYOR. I thank the Chair.
  Mrs. Richardson wrote me this letter August 4, and I quote:

       I have grave reservations about starting down the path of 
     using private contractors to contact taxpayers regarding 
     their delinquent tax debts without Congress having a thorough 
     understanding of the costs, the benefits and risks of 
     embarking on such a course.

  Another quote from paragraph 2, and she is asking questions at this 
time.

       How would taxpayers rights be protected and privacy be 
     guaranteed once tax information was released to private debt 
     collectors?

  And that is a good question.

       Would the financial incentives common to private debt 
     collection (keeping a percentage of the amount collected) 
     result in reduced rights for certain taxpayers whose accounts 
     had been privatized? Using private collectors to contact 
     taxpayers on collection matters would cause unique oversight 
     problems for the Internal Revenue Service to assure that 
     Taxpayers Bill of Rights and privacy rights are protected for 
     all taxpayers. Commingling of tax and nontax data by 
     contractors is a risk as is the use of tax information for 
     purposes other than intended.

  This is the end of that quote from the Commissioner of the Internal 
Revenue Service embodied in a letter to me dated August 4.
  How far will this go? Well, we might say it is only $13 million. They 
are going to go out there and experiment. We are going to hire a few 
collectors now, and maybe a few lawyers would be interested. They are 
going to go out there and try to collect some of the debts that are 
owed to the Internal Revenue Service.
  How far does it go? No one knows how far it goes because, Mr. 
President, there was not one day of hearings. There was not a hearing. 
There was not a discussion. There was not a debate. There was nothing. 
All we knew was that the House of Representatives inserted this 
language here. We struck it out in the Senate on August 4. I am hoping 
that we can defeat this bill so we can send a message back to the House 
that we are not going to tolerate this potential invasion of privacy, 
this potential invasion of confidentiality of private taxpayers' 
records and give those out to private debt collection companies and 
lawyers throughout the land. It is a terrible situation.
  The second question is, who are these people going to be? Are they 
just going to be lawyers? We just had the first version where we saw 
they were debt collection companies. Then it was expanded to lawyers. I 
do not know what it will be expanded to the next go-round. But now we 
have already expanded it once from debt collection companies to 
lawyers. I do not know how that happened.
  Who is going to be hired? Who makes that determination? Do they go up 
into the IRS office in Washington and say, ``We want to go back in our 
hometowns, and we know that that Ford dealer down there or that old 
farmer out there on route 4--I have a feeling that he probably owes the 
IRS something. We would like to see his records. And if you would show 
us those records of that Ford dealer or that farmer or that housewife 
or that small businessperson or that individual whom they may not like, 
``for 50 percent we'll go out there and collect that money for you.'' 
Then is the IRS going to say, ``OK. You're hired?'' Someone else may 
come up and say, ``OK. You are not hired.'' Maybe they want too much 
money. Maybe they do not want enough. Who is going to train those 
people, Mr. President?
  My friend from Iowa, Senator Grassley, was talking about this massive 
bureaucracy of the IRS. I, too, have been critical of that bureaucracy. 
I think for too long it has been too insensitive. But who is going to 
train these people to go out and protect taxpayers' rights? That is 
what this argument is about. I do not know anything in the legislation 
that says that those rights are going to be protected.
  I know nothing in this amendment that says anything about the 
particular training program that these individuals are going to go 
through. All it says is, here is $13 million to go out and hire private 
collection agencies in the private sector. Who is going to train them? 
We do not know. Who is going to oversee them, Mr. President? Who is 
going to go down to Camden, AR, and oversee the Jones collection agency 
and see if they are properly giving the proper treatment and protection 
to the individual taxpayers that they are collecting money from? Who is 
going to oversee them? I do not know. New bureaucracy? Yes. Fewer 
taxpayers' rights? Yes.
  And now--this is a key and critical question, Mr. President--which 
taxpayers' cases are these individuals, once they are hired, once they 
are given their contract, which taxpayers' cases, when you file through 
all the records of the Internal Revenue Service, which ones are they 
going to be given to work on? Will it be at random? Will it be rural 
letter carriers as it was a few years ago? Will it be Methodist 
ministers? Will it be small businesspeople? Who is it going to be that 
they are going to zero in on? And this confidential information, 
confidential tax records, dating perhaps 10 years back, is it going to 
be given to the local collection agency so they can carry them around 
in the coffee shops, carry them around to the shopping centers and hold 
them up and say, ``Hey, look at our neighbors' tax collections for the 
last 10 years.'' Are we going to go out and get that system? As a 
result, we might collect 50 percent and make a nice profit on it.
  Mr. President, what type of taxpayer information will be made 
available? And how will this information be made available? And how 
will these tax collectors, these bill collectors, I should say, be 
paid? That has never been mentioned in this debate.
  Once again, Mr. President, this is an appropriations bill. It is not 
a bill that came from the Finance Committee. The Finance Committee is 
that committee historically that has been charged with regulating the 
protections of the taxpayer. And here we are making a very, very 
backward step, in fact a step back into the Dark Ages, in my opinion, 
when we are creating a new bounty-hunter mentality in the Internal 
Revenue Service. And it is an issue--I should say it is an authority, a 
new authority, that the Internal Revenue Service does not want. They do 
not think it will work. They are posing these many questions today as 
we consider this particular appropriations bill.
  Mr. President, I would like at this point to yield the floor. I would 
like the opportunity to ask some questions of my friend from Alabama. 
Perhaps he would like to respond. He may desire to do so at this time. 
I will yield the floor and retain the remainder of my time.
  Mr. SHELBY addressed the Chair.
  The PRESIDING OFFICER (Mr. Thompson). The Senator from Alabama is 
recognized.
  Mr. SHELBY. Mr. President, I appreciate the remarks of my good friend 
from Arkansas. He is to be commended over the years for being very 
involved in pushing legislation for years and years and articulating 
the position of the taxpayer as far as the IRS is concerned. We all 
know that that is known as the Taxpayers' Bill of Rights. That was long 
in coming, and the Senator from Arkansas should get most of the credit 
for it. A lot of us worked with him, but he was the leader in this, and 
I commend him so.
  On this bill here, let me share some of it. In December 1991, the IRS 
completed an internal study that addressed, among other things, legal, 
financial, policy, and design considerations involved in contracting 
out collections. The study concluded that the IRS should test the use 
of private collection companies, provided that legal issues regarding 
activities that the IRS could contract out and funding sources were 
resolved. This proposal before us encourages that. In September 1992, 
the OMB issued a policy letter indicating that private companies can do 
collection-related functions such as locating taxpayers, making 
telephone calls to remind taxpayers of tax delinquencies, mailing tax 
notices, and providing lockboxes for receipt of payments. This proposal 
encourages that.
  In December 1992, the IRS chief counsel's office issued guidance for 
IRS' use of contracting with private collection 

[[Page S17075]]
companies. It concurs with the OMB letter. In discussing the disclosure 
issue, the guidance said that the IRS has the authority to contract out 
certain collection-related activities and that the appropriate 
safeguards would be in place. This proposal would allow the IRS to 
ensure the appropriate safeguards are in place.
  As the Senator from Arkansas brings up--and he is absolutely right--
the appropriate safeguards must be in place. The IRS must, Mr. 
President, oversee this. The IRS will oversee this. This is a pilot 
program. The 1993 GAO report indicated, Mr. President, that the IRS was 
moving forward with the plans for a pilot test which would start as 
early as October 1993--we are behind on that--and that the IRS' long-
range plans included expansion if the test worked.
  The Vice President's reinvention proposal indicates that a pilot test 
should be developed. And considering the fact that taxes remain 
uncollected in the United States and that the number of IRS personnel 
continues to grow, and the only apparent way the IRS is able to 
increase revenues is to spend more money and hire more people, should 
we not try something new? I say yes.
  This proposal allows the IRS to create the plan. They can address all 
of the concerns that have been raised, not only by the Senator from 
Arkansas, but by others, including this Senator. I firmly believe, Mr. 
President, that we should use all of the resources available to ensure 
that tax scofflaws are tracked down and those of us who pay our taxes 
are given more for our money.
  Let me continue. The conferees have included, Mr. President, a 
provision which will create the pilot program allowing private law and 
collection activities to pursue delinquent tax bills under the 
direction of the IRS, Mr. President; no one else.
  This proposal is intended to be innovative. It gives the authority to 
the IRS to make the decisions. The IRS will be able to use all of the 
safeguards available to ensure taxpayers and disclosure problems.
  Many businesses and States already use private collection sources in 
an attempt to manage and to supplement their basic resources.
  The GAO reported in 1993 that 28 States with individual income tax 
problems used private collection companies in collecting taxes. Only 6 
of the 28 States felt they were ineffective.
  Several questions have been raised by the Senator from Arkansas, and 
they should be, about the private collection initiative. Some of those 
questions are basically these:
  Is privatizing certain collection activities on delinquent tax debt a 
good idea? The answer, I believe, is yes. Currently, approximately $70 
billion, Mr. President--$70 billion--is owed to the IRS in delinquent 
tax debt upon which the IRS has ceased active collection efforts, and 
this amount is growing by roughly $10 billion a year.
  This proposal before us would allow private firms to provide limited 
collection services on that debt at no cost to the taxpayers, unless 
the debt is collected, because these accounts are currently lying 
dormant at the IRS and will remain so.
  What prevents private collectors from engaging in abusive collection 
practices or disclosure of confidential information? The Fair Debt 
Collection Practices Act and the Privacy Act of 1974 prohibit 
harassment of debtors and other unfair collection practices, as well as 
the unauthorized disclosure of debtor information to third parties. 
Violations of these provisions can subject collectors to millions of 
dollars in actual and punitive damages.
  Let me go into this a minute. What type of taxpayer records will they 
have access to? This was raised by the Senator from Arkansas. The only 
information that contractors would receive would be the debtor's name, 
the address, the phone number, the Social Security number, employer, 
and amount owed, just as they would with any nontax debt in America.
  Mr. President, the debtor's tax return would not--and I repeat, would 
not--be disclosed to the contractor.
  Who will these contractors be? Private collection companies that 
specialize in collecting overdue debts. An example of the best pool of 
candidates from which to choose would be those collectors currently 
working under the Department of Education's private sector collection 
activities for student-related debt contracts.

  Who will train them? According to GAO, one of the reasons for using 
private collection companies is for the IRS to learn from the 
techniques that are being used in the private sector to collect overdue 
taxes. Consequently, the training of employees who will be performing 
this function should be, I believe, done by private collection 
companies that will be contracting with the Internal Revenue Service, 
under the supervision and guidelines of the Internal Revenue Service.
  With respect to special expertise that is needed for collecting tax 
debts, the IRS should and would provide the speciality training. No one 
else.
  On which cases will the collector's work? Currently not collectible 
accounts, that is what they are called, Mr. President, as classified by 
the IRS since these accounts are now lying dormant at the IRS, $70 
billion of them.
  One approach would be to send cases to private contractors that are 
otherwise noncollectible, primarily where there is an inability to 
locate the taxpayer and, in such cases, a contractor should be able to 
invest more resources to locate them than the IRS can spend.
  Another approach would be to take cases that are deferred, meaning 
that there is a small enough balance due that the moneys are left 
uncollected until some other credit shows up in the system, such as a 
refund, that is then offset against the deferred amount, and replace 
these with private collectors.
  What type of collection services will they provide? The contractors 
will be responsible for generating letters to be mailed in most cases 
by the IRS and making phone calls to debtors. The letters and calls 
would be designed to remind debtors of their outstanding tax debt and 
to seek assurances from the debtor that the debt will be repaid. The 
contractors would not, Mr. President, be authorized to receive funds, 
compromise debts, sue debtors, seize property, or levy against assets.
  At this time, it would seem to make sense to me to test a program 
where private contractors locate and call taxpayers by telephone and 
inform them of how much they owe, how high interest and/or penalties 
are accumulating, their options, and the actions the IRS can take if 
they do not pay.
  However, the contractor would not make the final decision and should 
not make the final decision whether or not to enter into an installment 
agreement or to take any other collection action.
  The bottom line is that this is a pilot program. IRS has full 
control. They should have full control. The points I have tried to 
respond to are examples. IRS will be making the decisions. I believe 
that any ideas should be considered. I believe this is a good proposal 
that we have come forth with.
  The PRESIDING OFFICER. The Senator from Arkansas has 25 minutes.
  Mr. PRYOR. I thank the Chair for advising me on the time remaining. I 
am going to speak only a few moments, Mr. President. I want to give 
adequate time for our friend and colleague, the distinguished Senator 
from West Virginia, to speak. I would like to hit two or three more 
points.
  I listened very intently to my friend from Alabama go down through 
the concerns as expressed by the Department of the Treasury, more 
specifically the Commissioner of the IRS, Margaret Milner Richardson, 
who wrote me on August 4--I placed that letter in the Record--
expressing grave concerns about going down this particular trail with 
debt collection.
  The Senator from Alabama has just mentioned that the IRS would still 
retain control throughout this whole process. I maintain that the IRS 
has control now. What we are about to do is to add a new dimension 
whereby confidential tax information of individual taxpayers, of small 
businesses and large, perhaps, are going to be taken from the 
confidentiality of the Internal Revenue Service and given, basically, 
to debt collection services, to lawyers and to law firms, and they are 
going to go out and collect these debts with a bounty hunter's 
mentality.
  It did not work centuries ago in Greece. It did not work in Rome. 
And, Mr. President, it is not going to work now, especially with the 
opposition of the agency, the IRS, that is going to be policing this 
situation, training these collectors and lawyers and, basically, having 
oversight of this whole new venture, in this leap that I think we are 
about to make into darkness. 

[[Page S17076]]

  We are about to privatize the collection of debts by the Internal 
Revenue Service. There is some form of privatizing that may be all 
right. Yesterday, for example, when everything was closed down, I went 
down to the dining room. I walked down to the dining room, I knocked on 
the door, and the dining room was closed. So I decided, well, I have to 
eat somewhere, I had not had anything to eat. Somebody said, ``You can 
go over to the House of Representatives and eat; they have a cafeteria 
over there that is open.'' So I walked over, and I had two or three 
people with me. We walked through the tunnel and walked to the House of 
Representatives, and we ate. We ate because it was privatized. It was 
not run by the Government. Therefore, the Government did not have a lot 
to say about whether or not employees came in.
  But, Mr. President, privatizing a cafeteria and privatizing the 
confidential information to be dispensed to the general public and to 
lawyers and debt collectors are two different things. This is one area 
of privatizing that--even though many of our colleagues on the other 
side of the aisle might think it is appropriate--I beg them to 
reconsider, to look at the potential for conflict, for harassment, for 
bounty hunters, and for undue influence being used against unsuspecting 
and unprotected taxpayers.
  In 1988, in the taxpayers' bill of rights, we protected those 
taxpayers, I say to my friend from Alabama, and now we are about to 
walk away from them. We are about to say, well, we wanted to give you a 
little respite, but now we are ready to go after you again. We are 
ready to harness bounty hunters, who are going after you, who are going 
to have knowledge of your confidential tax information, where there are 
no ethics laws applying, and no regulations, where the IRS Commissioner 
says even the IRS cannot police this program.
  Mr. President, I ask, what are we doing? I hope we will reconsider 
this. I, for one, will vote against this conference report, even though 
I will probably be in the minority of one, and I hope that at the 
appropriate time, I am going to give this opportunity of the Senate 
itself to vote up or down on whether or not we should start privatizing 
the collections of our debts owed to the Internal Revenue Service.
  Mr. President, I yield the floor.
  Mr. SHELBY. Mr. President, I believe some good is going to come out 
of this debate here on the floor of the Senate because I agree with the 
Senator from Arkansas that the IRS should and must protect the privacy 
of all taxpayers not to hand over their tax returns to anyone else, and 
we are not going to do that in this.
  Let me go back to something. The IRS, Internal Revenue Service, 
actually requested this proposal 2 years ago. The approved budget for 
the Internal Revenue Service in fiscal year 1994 included funding, at 
the request of the IRS, totaling $5.790 million in startup funds and 41 
full-time equivalent employees. I will quote the IRS document:

       This will enable the Internal Revenue Service collection to 
     contract for a test to determine the effectiveness and cost-
     benefit of having private sector collection agencies work a 
     portion of the delinquent taxes inventory not being worked 
     due to resource constraints, and so forth. The funds, 
     unfortunately, were reprogrammed to cover costs of locality 
     pay. Let me repeat, Mr. President, there are $70 billion in 
     America in these closed accounts or dormant accounts, 
     uncollectible, growing at the rate of $10 billion a year. I 
     do not know how much of these dormant accounts--$70 billion 
     now, and next year it will be $80 billion, getting on up 
     toward $100 billion. That is a lot of money in America. If 
     these taxes are owed--and most of them are not even disputed, 
     it is my understanding--we should collect them. These are 
     owed taxes. If we can collect them, it helps us in our 
     expenditures here in the Congress. It means people are not 
     going to be deadbeats in this country, and that we will have 
     to levy fewer taxes elsewhere. I think it is a good start. It 
     is a pilot program, and I think it makes sense.

  I do want to continue to work with my friend from Arkansas to make 
sure that the American taxpayers' privacy is protected. Their returns 
are not put out of the IRS, but as far as what they owe and who they 
are, I do not see any privacy on that. That is everywhere in America 
today. You can pick that up on a credit report.
  Mr. PRYOR. Will my friend from Alabama yield?
  Mr. SHELBY. Yes.
  Mr. PRYOR. Mr. President, I want to ask my friend from Alabama, how 
are these new collectors going to be paid?
  Mr. SHELBY. How will they be paid? We have not received the directive 
from the IRS. But I hope they will be paid on what they collect, a 
percentage of what they collect. In other words, I certainly would not 
want to pay them a salary. I do not believe they would be as diligent 
or that they would work as hard. Billions of dollars in America is 
collected each day, probably based on incentives. Incentives do matter. 
As with the Department of Education debt collection contracts, the base 
compensation, I hope, would be calculated as a percentage of account 
dollars collected, or included in repayment schedules agreed to by the 
debtors. Also, a competitive environment would be structured so that it 
would reward productive contractors who comply with the law and who do 
not generate debtor complaints, do not abuse people and penalize 
unproductive or compliant ones. That is who we look forward to working 
with.
  Mr. PRYOR. Mr. President, in the 1988 taxpayers' bill of rights, on 
which the Senator from Alabama was a helpful participant, we abolished 
the quota system. We said to the regional district offices of the 
Internal Revenue Service, you may not promote or demote your employees 
based upon what they collected or what they did not collect. We sent a 
message throughout the IRS collection system: No quotas, no bounties.
  The Senator from Alabama has just stated he hopes that they are paid 
on a percentage. That is a bounty. That is a quota. That is going 
directly contrary to the 1988 taxpayers' bill of rights.
  Mr. SHELBY. This is a lot different, if I can respond. That is 
different from an IRS auditor coming in and auditing Mr. and Mrs. John 
Jones' account, and the more they found, the more they get working as 
an IRS employee. These efforts will be directed at collecting debts 
that are not in dispute, debts that have been arrived at as owed, debts 
that have basically been forgotten, as I said, to the tune now of $70 
billion. There is a lot of difference between that and protecting 
someone who the IRS is auditing or having a tax dispute with. This is 
not a tax dispute. This is a debt owed. There is a lot of difference.
  Mr. PRYOR. Mr. President, to conclude, my friend from Alabama has 
stated that the IRS has requested this. The IRS did not request this 
authority. This administration did not request this authority. The 
present IRS Commissioner did not request this new authority. In fact, 
the present IRS Commissioner has said she does not think it will work. 
She is raising the questions that, today, are unanswered.
  I hope that my colleagues from both of the committees and both 
managers--each of the managers, I should say, of this conference report 
will understand my voting ``no'' on this. It is nothing personal 
against them. But I am going to continue this fight to try to strike 
this from the law of the land when we adopt it.
  Mr. SHELBY. Mr. President, I ask unanimous consent that the fiscal 
year 1994 compliance option request regarding the budget, where the IRS 
requested this, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  Fiscal Year 1994 Compliance Options

     Key Area: Accounts Receivable.
     Concern: Implementation of Private Collection Agency Program 
         Pilot Objective.
       We are requesting the direct hire of 41 FTEs and $5.790 
     million in start up funds. This will enable the IRS 
     Collection to contract for a test to determine the 
     effectiveness/cost benefit of having private sector 
     collection agencies work a portion of delinquent taxes 
     inventory not being worked due to resource constraints.


                              program area

       A feasibility study on contracting our collection work was 
     completed by a cross-functional group in December 1991. This 
     group concluded that contracting out could be an effective 
     means to address portions of the Collection inventory that 
     have not been worked, or that have been worked with little or 
     no revenue collected. Benefits of this approach would include 
     a direct reduction in accounts receivable dollar inventory 
     (ARDI), and a reduction of taxpayer burden.
       A test using commercial vendors to collect delinquent taxes 
     will require the establishment of a national program office 
     to plan and oversee implementation of the pilot test site. 
     Collection agencies would be involved 

[[Page S17077]]
     with the collection of accounts with a balance due of $10,000 or less, 
     or accounts receivable deemed too low for immediate IRS 
     involvement. This project requires a national centralized 
     focal point to oversee the program development and to 
     complete testing before implementation. This proposal has the 
     potential to reduce excessive taxpayer burden while 
     increasing revenue.
       In addition to personnel this initiative will require start 
     up funds for contractual services. It is not anticipated that 
     the IRS will be able to have a normal business relationship 
     with the collection agencies involved with this program. In 
     the private sector, accounts receivable are collected or sold 
     to a vendor who then retains a portion of the receipts as 
     payment. The IRS must receive the entire portion that is to 
     be applied towards the taxpayer balance due. Then a 
     prearranged payment would be paid to the vendor. We estimate 
     $12.5 million would be needed up-front, $5.790 million in 
     FY94 and $6.710 million in FY95.


                           types of employees

       We are proposing the direct hiring of 41 FTE/positions, to 
     be distributed as follows: 14 positions to be hired by the 
     beginning of the first quarter of FY 1994 for the project 
     office; 17 positions to be located at the ACS test site 
     location; and 10 positions will be located at the Service 
     Center support site.


                            historical data

       This is a first time pilot, there are no historical 
     records.


                           revenue estimates

----------------------------------------------------------------------------------------------------------------
                                                                         Fiscal year--                          
                                                              ----------------------------------      Total     
                                                                     1994             1995                      
----------------------------------------------------------------------------------------------------------------
Revenue:                                                                                                        
  Projections................................................     $26,859,000      $34,993,000      $61,852,000 
  Cost.......................................................      (5,790,000)      (6,710,000)     (12,500,000)
                                                              --------------------------------------------------
    Net Revenue..............................................     $21,069,000      $28,283,000      $49,352,000 
----------------------------------------------------------------------------------------------------------------

                              assumptions

       Benefits of this contracting approach would include a 
     direct reduction in ARDI, and a reduction of taxpayer burden.
       We assume a collection rate of 5% of the case value.
       The test is scheduled to start in January of FY94; 75% of 
     the revenue is reported in FY94 and 25% in FY95.
       As of June 1992 inventories in the queue and currently not 
     collectable (CNC) were as follows:

------------------------------------------------------------------------
                                          Queue       CNC        Total  
------------------------------------------------------------------------
Taxpayers.............................   470,000   1,400,000   1,870,000
Dollar/value (billions)...............         3          30          33
Avg dollars per T/P...................     6,410      21,311  ..........
------------------------------------------------------------------------

       This request is for a limited one year controlled pilot. 
     The experience gained through a pilot test would enable the 
     Service to better evaluate the concept's direct benefits and 
     costs, and to measure public acceptance. The contract would 
     include a one year renewable option for FY95.


                              methodology

       Contract out approximately 100,000 cases (taxpayers) from 
     the two categories listed.
       The mix of cases will be approximately 60,000 out of the 
     queue and 40,000 from CNC.
       The average dollar per case is assigned to the number of 
     cases that will be contracted out in each area:

------------------------------------------------------------------------
                                         Queue        CNC        Total  
------------------------------------------------------------------------
Taxpayers...........................      60,000      40,000     100,000
Avg dollars per T/P.................       6,410      21,311  ..........
Dollar value (thousands)............     384,600     852,440   1,237,040
------------------------------------------------------------------------

       Dollars collected would be approximately 61,852,000, (5% 
     collection rate).
       The contract will be a fixed price deliverable contract 
     with an award fee pool, i.e. a fixed price per module with an 
     award if the contractor does an excellent job. The total cost 
     is based on the industry standard, which is 20% of what is 
     collected, approximately $12,500,000.
       $5.790 million will be needed in FY94 and the other $6.710 
     million in FY95.

                                        FISCAL YEAR 1994 COMPLIANCE OPTIONS, DIRECT ENFORCEMENT REVENUE AND COSTS                                       
                                                              [Dollar amounts in millions]                                                              
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Fiscal year--                           Dollars collected by fiscal years--                      
                     Options                      ------------------------------------------------------------------------------------------------------
                                                    1994 FTE  1994 Cost      1994          1995          1996         1997         1998         Totals  
--------------------------------------------------------------------------------------------------------------------------------------------------------
International Issues.............................        177      $30.5        ($1.9)         $1.0         $10.1        $13.5         $27.7        $50.4
Private Debt Collection..........................         44       12.6         26.9          35.0           0            0             0           61.9
Bankruptcy.......................................         60        3.4         23.6          35.0          39.9         44.3          44.3        187.1
High Income Individual...........................        160       12.1         (4.9)         (3.0)         12.4         27.4          37.8         69.7
Employment Issues................................        414       31.6          1.9          17.7          77.7        108.7         127.0        329.2
Accounts Receivable..............................        529       24.8         61.8         128.8         231.9        247.4         247.4        917.3
Non--Filers......................................        358       20.3          9.7          73.7         201.4        294.1         315.6        894.5
Information Reporting............................        109        4.3          0            57.0          63.0         63.0          63.0        246.0
Underfunded Pension Plans........................         43        2.9          0             0             0            0             0            0  
Electronic Filing Fraud..........................         81        5.0                                                                                 
(5) Not quantifiable                                                                                                                                    
Motor Fuels......................................         25        2.6                                                                                 
(5) Not quantifiable                                                                                                                                    
                                                  ------------------------------------------------------------------------------------------------------
      Grand total................................      2,000      150.0         13.3         345.2         636.4        798.4         862.8      2,756.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: It is important to realize that the direct enforcement revenue listed above does not represent the total revenue that will eventually be realized 
  through our enforcement efforts. Indirect revenue will occur as a result of influencing the voluntary compliance of not only the taxpayers undergoing 
  enforcement, but also other taxpayers such as relatives, friends, and neighbors. Depending on the compliance option, the amount of indirect revenue   
  will vary.                                                                                                                                            


                                       FISCAL YEAR 1994 COMPLIANCE OPTIONS                                      
----------------------------------------------------------------------------------------------------------------
                                                             Revenue Scored by OTA by fiscal year--             
                                               -----------------------------------------------------------------
                                                   1994       1995       1996       1997       1998      Total  
----------------------------------------------------------------------------------------------------------------
International issues..........................     ($1.9)       $1.0      $10.1      $13.5      $27.7      $50.4
Private debt collection.......................       26.9       35.0          0          0          0       61.9
Bankruptcy....................................       23.6       35.0       39.9       44.3       44.3      187.0
    Collection................................        4.8       10.0       14.9       19.3       19.3       68.3
    Chief Counsel.............................       18.8       25.0       25.0       25.0       25.0      118.8
High income...................................      (4.9)      (3.0)       12.4       27.4       37.8       69.7
Employment issues.............................      (1.9)       17.7       77.7      108.7      127.0      329.2
    Collection................................        6.4       15.3       32.4       36.6       37.0      127.7
    Examination...............................      (8.3)        2.4       45.3       72.1       90.0      201.5
Accounts receivable...........................       61.8      128.8      231.9      247.4      247.4      917.3
Non-filer.....................................        9.7       73.7      201.4      294.1      315.6      894.5
    Collection................................        5.8       15.9       22.1       23.2       23.2       90.2
    Examination...............................        3.9       57.8      179.3      270.9      292.4      804.3
Information reporting.........................          0       57.0       63.0       63.0       63.0      246.0
                                               -----------------------------------------------------------------
      Total...................................      113.3      345.3      636.4      798.4      862.7    2,756.1
----------------------------------------------------------------------------------------------------------------

  Mr. SHELBY. Mr. President, have the yeas and nays been ordered?
  The PRESIDING OFFICER. They have not been ordered.
  Mr. SHELBY. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report to accompany H.R. 2020. On this question, the yeas and nays have 
been ordered, and the clerk will call the roll.
  The bill clerk called the roll.
  Mr. LOTT. I announce that the Senator from Indiana [Mr. Lugar] is 
necessarily absent.

[[Page S17078]]

  The PRESIDING OFFICER (Mr. Abraham). Are there any other Senators in 
the Chamber who desire to vote?
  The result was announced--yeas 64, nays 34, as follows:

                      [Rollcall Vote No. 576 Leg.]

                                YEAS--64

     Abraham
     Ashcroft
     Bennett
     Bond
     Bradley
     Breaux
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Ford
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Heflin
     Helms
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kerrey
     Kohl
     Kyl
     Leahy
     Lieberman
     Lott
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Pressler
     Reid
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--34

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Brown
     Bryan
     Bumpers
     Conrad
     Dorgan
     Exon
     Faircloth
     Feingold
     Feinstein
     Glenn
     Harkin
     Hollings
     Kennedy
     Kerry
     Lautenberg
     Levin
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Robb
     Rockefeller
     Sarbanes
     Simon
     Snowe
     Wellstone

                             NOT VOTING--1

       
     Lugar
       
  So, the conference report was agreed to.
  Mr. SHELBY. Mr. President, I move to reconsider the vote by which the 
conference report was agreed to.
  Mr. LAUTENBERG. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, the Senate recedes 
from its amendment numbered 132.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The distinguished majority leader.
  Mr. DOLE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, I ask unanimous consent to proceed as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Massachusetts.

                          ____________________