[Congressional Record Volume 142, Number 86 (Wednesday, June 12, 1996)]
[House]
[Pages H6275-H6278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE TAX TRAP

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. SMith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, when I am back in Michigan in our 
7th Congressional District, around Battle Creek and Jackson and 
Hillsdale and Adrian, not a day goes by but a young mother or a young 
father comes up to me and says, you know, we are working very hard and 
we can hardly get by. We are both working now. Or sometimes it is a 
young mother, all by herself trying to support her kids, and they say 
why is it so difficult now when my mom and dad, when I was growing up, 
only one of them worked and we still ended up with enough money to go 
on vacations, to have good food, and to have good housing?
  You know what I have concluded, Mr. Speaker, a large part of today's 
problem is? The tax trap. Back in the 1950's and the 1960's the taxes 
only took a small part of our earnings, but today taxes take almost 50 
percent of what we earn. Taxes at the local, State and national level 
take 41 percent of what we earn. And then, if we earn more money and 
work harder, and we get into those higher tax brackets, in addition to 
the 15 percent that goes into FICA, we can go as high as 39 percent on 
our income tax.
  I call it the tax trap because people may remember that old song that 
says the more you study, the more you learn; the more you learn, the 
more you forget; the more you forget, the less you know; so why study? 
It is sort of true on taxes. The harder you work and the more you earn, 
the higher your taxes are and the more you have to pay the Federal 
Government to spend the money that you worked so hard to earn.
  I wonder if people know that today we spend more on food and clothing 
and shelter. The taxes that we pay to the government is more than we 
spend on food and clothing and shelter. I wonder if people know that 
there is about 70 percent of the hard-working American people that pay 
more in the FICA taxes, that 15 percent that is tacked on to our wages, 
than they do in the Federal income tax.

                              {time}  2315

  Let us look at the FICA taxes a minute. Most of that, 12.4 percent, 
goes to pay Social Security taxes. How many of the people under 40 
today think that Social Security is going to be around when they are 
ready to retire?
  We have got some real problems with Social Security. Back in the 
early 1980's and 1982, they appointed the Greenspan Commission because 
at that time they published reports that the unfunded liability of 
Social Security was 1.82 percent of payroll. In other words, taxes 
would have to be raised that much more to cover the unfunded liability 
of Social Security.
  Guess what it is today. Today the unfunded liability of Social 
Security is 2.17 percent. So when we hear people say, ``Don't worry 
about Social Security because it is going to have enough money until 
the year 2029,'' what happened is the actuaries just recently came and 
said it is not going to be 2030, but it is going to be 2029, but the 
fact is that is only if somehow Government pays back all the money that 
it has been taking out of the Social Security surpluses.
  Since we changed the Social Security taxes in 1983, and at that time 
the estimate was that they would be solvent for 65 years, well, guess 
what one of the former commissioners, Dorcas Hardy, said a couple of 
weeks ago? She estimated that sometime during the year 2005 there would 
be less money coming in for Social Security than was required for the 
payout.
  There is no trust fund. There is no reserve. The Federal Government 
has taken every cent of the surplus every year, written out an IOU, and 
spent that money for general fund spending, expanding Government 
spending, expanding programs, taking more of Americans' individual 
decisionmaking away from them and putting it in this Chamber and over 
in the Senate Chamber and having Government make the decisions that 
they used to decide.
  So when that young mother and young father come to me and say, ``What 
are your suggestions, what are we going to do,'' my suggestion is to 
slow down on the borrowing and eventually balance this budget. Slow 
down on those taxes. Let people keep some of that hard-earned money in 
their own pockets and decide how to spend that money, rather than 
sending it to this kind of Chamber to let Government decide how to 
spend your hard-earned dollar.
  Somehow, Mr. Speaker, we have got to have a tax system where the 
people that work hard and try and save, end up better off than those 
that do not. That is the goal of our budget resolution, and our budget 
projection for the future of saying cut spending, do it now, do not put 
it off and let us get to a balanced budget. Let us quit borrowing and 
taking the future away from our kids.

[[Page H6276]]



 IN OPPOSITION TO NUCLEAR WASTE STORAGE ON PALMYRA ATOLL, A POSSESSION 
               OF THE UNITED STATES IN THE PACIFIC OCEAN

  The SPEAKER pro tempore (Mr. Chabot). Under a previous order of the 
House, the gentleman from American Samoa [Mr. Faleomavaega] is 
recognized for 5 minutes.
  Mr. FALEOMAVAEGA. Mr. Speaker, I come before my colleagues and our 
great Nation today to state my strongest opposition to a proposal that 
some people view as nuclear lunacy. Some of my colleagues may have 
heard of this reckless initiative circulating around Capitol Hill, that 
would give birth to the world's largest nuclear waste cesspool--right 
smack in the middle amongst Pacific island nations and in the middle of 
the Pacific Ocean.
  Mr. Speaker, after approximately 50 years of nuclear testing in the 
Pacific, where hundreds of the world's most lethal nuclear weapons have 
been detonated, would you not think Mr. Speaker, that the peoples and 
the environment of the Pacific have suffered enough from nuclear 
poisoning and contamination? Apparently not--as a group of investors 
from New York and Russia--yes, Russian--are pushing the idea of 
commercially developing Palmyra Atoll, a United States possession in 
the Pacific, as an international storage site for spent nuclear fuel 
and plutonium. These investors are prepared to sacrifice the health and 
welfare of millions of men, women, and children who reside in the 
Pacific, for the billions of dollars these investors intend to make in 
annual revenues.
  According to these investors, their commercial enterprise would bring 
together the Governments of the United States, Russia and others to 
jointly store over 200,000 metric tons of spent nuclear fuel and excess 
weapons plutonium on Palmyra Atoll. Although making money is the 
primary motive, they also proclaim altruistic objectives, such as: 
First, securing Russia's fissile materials from the nuclear black 
market, while restraining Moscow's spread of nuclear technology to 
suspect regimes; Second, discouraging the reprocessing of spent nuclear 
fuel by nations for plutonium; and Third, materially aiding global 
efforts to stop nuclear proliferation.
  Although I find these nonproliferation objectives to be admirable, I 
take great exception to the investors' decision to locate their 
international nuclear storage site on Palmyra Island--a volcanic 
island. Hawaii's distinguished Senator, Daniel Akaka, has recently 
opposed the plan, calling it nuclear nonsense, and I cannot more 
wholeheartedly agree with the gentleman from Hawaii.
  Mr. Speaker, it is the height of folly and sheer nonsense to build 
the planet's largest nuclear wastedump on a geologically-suspect, 
dormant volcano--a volcanic formation that is surrounded by swirling 
Pacific currents, storms, cyclones, and hurricanes. Or how about these 
freak waves that travel in the Pacific at 60 mph and at 60 feet in 
height?
  As many of us know, the Pacific Basin is afflicted by shifting 
tectonic plates, and volcanoes erupt regularly. With the State of 
Hawaii less than 1000 miles away and my district, American Samoa, also 
close by--who can guarantee that Americans will not suffer from the 
environmental firestorm to erupt if Palmyra Atoll is, again, subjected 
to geologic movement? Mr. Speaker, we are talking about the storage 
here of 200,000 tons of nuclear materials that shall remain 
radioactive, toxic and hazardous for over 100,000 years--in essence, 
for all time, as far as I am concerned. Mr. Speaker, the menace to 
surrounding Pacific island nations, such as Kiribati less than 200 
miles away, is obviously the greatest. I would not want my family to 
live on islands anywhere close to Palmyra. What guarantees are there 
for the lives of some 1.2 million American citizens who live in the 
State of Hawaii, which is located less than 1,000 miles north of 
Palmyra Island?
  Mr. Speaker, the Palmyra proposal subjects Pacific residents to 
additional dangers, as ships carrying spent nuclear fuel and plutonium 
from all corners of the world shall traverse the Pacific to reach the 
island. The threat of accidental vessel sinkings and terrorist 
hijackings of the deadly nuclear cargoes are only the beginning of 
problems to anticipate and are surely to come if this body ever 
approves this proposal.

  After review of proposed legislation that would facilitate Palmyra 
Atoll's development as a private nuclear storage site, I believe that, 
in addition to the concerns I have already raised, the proposal is 
grossly unsound on its face. I have attached a copy of the draft 
legislation for the Record.
  The bill directs the Nuclear Regulatory Commission [NRC] to 
expeditiously review the issuance of a license to the owners of Palmyra 
to operate a spent nuclear fuel storage facility, thereby applying 
undue pressure upon the NRC to circumvent normal environmental, 
engineering and safety requirements for such storage facilities.
  The bill further provides that key sections of the National 
Environmental Policy Act [NEPA] and the Clean Water Act shall not apply 
to the Palmyra facility, thereby sidestepping legal requirements for an 
environmental impact statement to be prepared. What are they trying to 
hide?
  The bill also makes no provision whatsoever for the ultimate 
disposition of the 200,000-plus tons of nuclear material to be stored 
on Palmyra. From my understanding, Palmyra is not to be a permanent 
repository like Yucca Mountain, which has entailed years of study and 
analyses which are still on-going.
  Nor is there any provision that addresses who will be liable in the 
event that a nuclear accident occurs at Palmyra or while nuclear 
materials are in-transit through the Pacific region. Can these 
investors cover this enormous liability, or are the United States and 
Russia expected to do so?
  Finally, Mr. Speaker, the bill makes no mention of who will provide 
the necessary security and protection of these deadly fissile 
materials. The Palmyra storage facility will constitute a plutonium 
mine for centuries that will attract every rogue government and 
terrorist group with nuclear weapons ambitions. Who is to provide for 
the long-term security of Palmyra?
  Mr. Speaker, as I said in the beginning, this Palmyra Atoll 
initiative is nuclear lunacy. Rather than governments putting the 
responsibility of storing dangerous nuclear materials in the hands of a 
private company, perhaps we should consider having the International 
Atomic Energy Agency [IAEA] perform this crucial function for the world 
community.
  Mr. Speaker, the Palmyra Atoll proposal is the work of individuals 
who see only profits and outright greed, at the expense of the lives of 
the millions of people who live throughout the Asia-Pacific regions. 
These profiteers now see that by throwing to the Pacific Islands a few 
bones to chew on--that this will satisfy their needs. Is $250 million 
enough? What happened to the initial offer for $750 million?
  Mr. Speaker, I cannot more strongly urge our colleagues to stand with 
me in opposing this reckless legislation when and if it is introduced 
to be considered by this body.
  Mr. Speaker, I submit the following for the Record:

                               Draft Bill

       To facilitate the ability of private owners to site, 
     design, license, construct, operate and decommission a 
     private facility for the interim or permanent storage of 
     commercial high-level spent nuclear fuel on the Pacific Atoll 
     of Palmyra subject to licensing by the Nuclear Regulatory 
     Commission.
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title--This Act may be cited as the ``Private 
     Storage Facility Authorization Act of 1996.''
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Authorization and siting of private storage facility.
Sec. 5. Funding of private storage facility.
Sec. 6. Design of private storage facility.
Sec. 7. Transfer of ownership of spent nuclear fuel.
Sec. 8. Transportation.
Sec. 9. Activities of the Commission.
Sec. 10. Participation in the project by Minatom.
Sec. 11. Plutonium processing facility.
Sec. 12. Trust  fund  to  cover  cost  of  final disposal.
Sec. 13. Trust  fund for benefit of Pacific island nations.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that:

[[Page H6277]]

       (1) The age of nuclear energy has brought with it three 
     worldwide problems that may be summarized as follows:
       (A) Safely disposing of high-level spent nuclear fuel which 
     is necessarily generated in the process of producing 
     electrical energy by nuclear technology and which is 
     dangerous to life and ecology.
       (B) Safeguarding of high-level spent nuclear fuel so that 
     its by-products cannot be used to produce and proliferate 
     weapons grade nuclear material.
       (C) Safe storage and/or processing of plutonium that is 
     surplus to legitimate national security requirements to 
     insure that it does not fall into the hands of rogue 
     governments and terrorists.
       (2) Because of siting problems it has so far not been 
     possible to begin construction of a repository for storage of 
     high-level spent nuclear fuel in the United States even 
     though the U.S. Department of Energy is contractually 
     obligated to have such a facility available by January 31, 
     1998.
       (3) Facilities for the temporary storage of spent nuclear 
     fuel--primarily at the power plants that used the fuel--are 
     virtually exhausted, a problem that affects the nuclear power 
     industry all over the world.
       (4) Reprocessing of spent nuclear fuel is a method of 
     separating the components of that fuel so that the uranium it 
     contains can be reused to generate electric power, but this 
     method is not approved in the United States because it yields 
     by-products that can be used to produce weapons grade nuclear 
     materials.
       (5) Prompt implementation of the plan for building a 
     private storage facility will make it possible to include 
     Minatom, the nuclear energy facility of the Russian 
     Federation, as an equity partner in the project, a move that 
     will greatly reduce the threat of weapons-grade nuclear 
     materials falling into the hands of irresponsible nations 
     while at the same time benefiting the ecology by providing 
     the Russian Federation a safe repository for its high-level 
     nuclear spent fuel. Participation by Minatom as an equity 
     partner will enable Minatom to share substantially in the 
     profits realized by the project.
       (b) Purposes.--The purposes of this Act are--
       (1) to facilitate the ability of private owners to site, 
     design, license, construct, operate and decommission a 
     facility for the safe storage of high-level commercial spent 
     nuclear fuel and to establish procedures that will make such 
     a facility available in the shortest possible time. The 
     existence of this facility will provide adequate and safe 
     storage space for all commercial high-level spent nuclear 
     fuel and will render unnecessary and uneconomical the 
     reprocessing of spent nuclear fuel; and
       (2) to authorize private owners to designate and develop a 
     site for a private storage facility on Palmyra Atoll for 
     high-level spent nuclear fuel and facilities for storage and 
     processing of surplus plutonium.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Palmyra Atoll.--Palmyra Atoll is a small group of coral 
     islets of volcanic origin that surround a shallow lagoon and 
     is located in the Pacific Ocean at 5 degrees, 52 minutes, 
     north latitude and 162 degrees, 30 minutes, west longitude. 
     The atoll is classified as an incorporated possession of the 
     United States and is privately owned.
       (2) Comemrcial High-Level Spent Nuclear Fuel.--The term 
     ``commercial high-level spent nuclear fuel'' means fuel that 
     has been withdrawn from a nuclear reactor primarily dedicated 
     to the production of electric power following irradiation, 
     the constituent elements of which have not been separated by 
     reprocessing.
       (3) Plutonium.--The term ``plutonium'' refers to one of the 
     by-products of nuclear fission that in its refined form is 
     essential to the production of nuclear weapons.
       (4) Commission.--The term ``Commission'' means the United 
     States Nuclear Regulatory Commission.
       (5) Private Owners.--The term ``private owners'' means a 
     group of investors organized into three corporations formed 
     for the purpose of developing and operating a private storage 
     facility for commercial high-level spent nuclear fuel and 
     surplus plutonium in accordance with the provisions of this 
     Act.
       (6) Private Storage Facility.--The term ``private storage 
     facility'' means a facility designed, constructed and 
     operated by private owners for the receipt, handling, 
     possession, safeguarding and storage of commercial high-level 
     spent nuclear fuel in accordance with the provisions of this 
     Act.
       (7) Storage.--The term ``storage'' means retention of 
     commercial high-level spent nuclear fuel with the intention 
     of recovering the components of that fuel for subsequent use, 
     processing or disposal. This term is not to be confused with 
     the term ``final disposal,'' which refers to high-level spent 
     nuclear fuel whose toxicity has been reduced to an as yet 
     theoretical level that poses no possible danger to life, 
     health or environment.

     SEC. 4. AUTHORIZATION FOR SITING, CONSTRUCTION AND OPERATION 
                   OF A PRIVATE STORAGE FACILITY.

       (A) Authorization.--
       (1) The private owners may site, design, license, 
     construct, operate and decommission a private storage 
     facility on Palmyra Atoll for the storage of commercial high-
     level spent nuclear fuel in accordance with the regulations 
     of the Nuclear Regulatory Commission.
       (2) In order to facilitate this authorization, title VI, 
     section 605(a) of Public Law 96-205 (48 U.S.C. 1491(a)) is 
     amended by adding the words ``or to the Atoll know as 
     Palmyra'' to the end of the last line of section 605(a).
       (3) License.--On application by the private owners, the 
     private storage facility shall be licensed by the Commission 
     in accordance with its regulations governing the licensing of 
     independent spent fuel installations as modified in 
     accordance with section 9 infra.
       (b) Designation of Private Storage Facility Site.--The site 
     designated by the private owners for a private storage 
     facility is Palmyra Atoll, which is owned in fee by them and 
     is not under the jurisdiction of any State.
       (c) Activities.--The private owners shall be authorized to 
     conduct specified activities at the private storage facility 
     site, including the design, licensing, construction, 
     operation and decommissioning of the private storage 
     facility, with the scope of activities to be determined by 
     the private owners.

     SEC. 5. FUNDING OF THE PRIVATE STORAGE FACILITY.

       Source of Funding.--The private owners will obtain funding 
     for the design, licensing, construction and operation of the 
     private storage facility from private sources. Income will be 
     derived from user fees.

     SEC. 6. DESIGN OF PRIVATE STORAGE FACILITY.

       (A) Storage Capacity.--The private storage facility shall 
     have a storage capacity of not less than 200,000 metric tons 
     of commercial high-level spent nuclear fuel and plutonium. 
     This capacity shall be expandable as necessary to meet 
     storage requirements.
       (b) Canister System.--the design of the private storage 
     facility shall provide for the use of such containment and 
     transportation technologies as are licensed and certified by 
     the Nuclear Regulatory Commission for use in handling 
     transportation and storage of high-level spent nuclear fuel.

     SEC. 7. TRANSFER OF OWNERSHIP OF SPENT NUCLEAR FUEL.

       At the time that spent nuclear fuel is transferred to the 
     canisters belonging to the private owners, ownership of that 
     fuel shall vest in the private owners.

     SEC. 8. TRANSPORTATION.

       Upon acceptance by the private owners of spent nuclear 
     fuel, the spent nuclear fuel shall be transported to the 
     private storage facility in the safest, most cost-efficient 
     manner in accordance with the regulations for such transit of 
     the Nuclear Regulatory Commission and the Department of 
     Transportation.

     SEC. 9. ACTIVITIES OF THE COMMISSION.

       (a) Regulations.--Not later than 180 days after the date of 
     enactment of this Act the Commission shall amend its 
     regulations governing the licensing of independent spent 
     nuclear fuel storage installations, as necessary, to provide 
     for the licensing of the private storage facility upon 
     application by the private owners.
       (b) Contents.--The regulations issued under subsection (a) 
     shall incorporate the following provisions:
       (1) Location of facility.--The private storage facility 
     shall be located at the site specified in section 4 supra.
       (2) Term of license.--The private storage facility shall be 
     licensed for the maximum period consistent with applicable 
     law.
       (c) Licensing.--On application by the private owners for a 
     license for construction and operation of the private storage 
     facility at the designated site, the Commission shall review 
     the license application and issue a final decision on it at 
     the earliest practicable date, to the extent permitted by law 
     and regulation, but not later than 18 months after receipt of 
     the license application.
       (d) Compliance With the National Environmental Policy Act 
     of 1969.--Preparation of an environmental impact statement by 
     the Commission under section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) in 
     conjunction with the licensing of the private storage 
     facility authorized by this Act shall not be required.
       (e) Dredging Permit.--The issuance of a permit under 
     section 404 of the Clean Water Act (33 U.S.C. 1344) for 
     dredging of the lagoon in the Palmyra Atoll in conjunction 
     with this project shall not be required.

     SEC. 10. PARTICIPATION IN THE PROJECT BY MINATOM.

       It shall be a condition binding on the private owners that 
     Minatom, the nuclear energy facility of the Russian 
     Federation, be offered a substantial equity position in the 
     real estate and global services of this project in exchange 
     for its agreement to deny nuclear weapons technology and 
     materials to any nation whose interests and policies are 
     inimical to the security interests of either the United 
     States or the Russian Federation as determined by their 
     respective heads of state. In exchange for equity 
     participation in the project, Minatom also will not make any 
     commitment for reprocessing high level spent nuclear fuel 
     from sources outside of the Russian Federation after the time 
     that this Act becomes law.

     SEC. 11. PLUTONIUM STORAGE AND PROCESSING FACILITY.

       For the purpose of implementing a global policy of nuclear 
     non-proliferation, the private owners will design and build 
     at their own cost, using revenues derived from storage fees, 
     a facility for storage, conditioning, stabilizing and 
     conversion of plutonium that is surplus to the security 
     requirements of the United States and Russia. The private 
     owners will not operate this facility, but it will be 
     available for joint operation by the United States Department 
     of Energy and Minatom.

[[Page H6278]]

     SEC. 12. TRUST FUND FOR FINAL DISPOSITION.

       From revenues received from storage fees, the owners will 
     contribute to a trust fund to be administered by the United 
     States Department of Energy the sum of $100,000 for each 
     metric ton of high level spent nuclear fuel deposited in the 
     private storage facility, which fund shall be used to defray 
     the cost of making final disposition of the high-level spent 
     nuclear fuel existing in the private storage facility at the 
     time the disposition decision is made.

     SEC. 13. TRUST FUND FOR BENEFIT OF PACIFIC ISLAND NATIONS.

       In recognition of the interest in and support of this 
     project on the part of the Pacific Island nations, the 
     private owners will establish a trust fund, to be 
     administered by the Office of Insular Affairs of the United 
     States Department of the Interior and based in Hawaii, that 
     will receive a share of the profits from each metric ton of 
     spent nuclear fuel placed in the private storage facility. 
     This trust will be funded by an initial contribution of 
     $100,000,000 plus an increment of $25,000 for each metric ton 
     deposited in the private storage facility up to a maximum 
     payout of $250,000,000 per annum. This fund will be used to 
     assist the Pacific Island Nations in economic development, 
     education and environmental protection.

                          ____________________