Congressional Record, Volume 142 Issue 115 (Wednesday, July 31, 1996)

[Congressional Record Volume 142, Number 115 (Wednesday, July 31, 1996)]
[Senate]
[Pages S9265-S9275]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS ACT,
1997

The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:

A bill (H.R. 3675) making appropriations for the Department
of Transportation and related agencies for the fiscal year
ending September 30, 1997, and for other purposes.

The Senate resumed consideration of the bill.
Mr. DORGAN. Mr. President, I had given notice that I would offer one
additional amendment. I say to the ranking member and the manager that
I will not offer that amendment, but I do want to speak for just a
couple of minutes while we are waiting for another Senator to come to
offer an amendment. I think that will probably be good news to them
because they want to move the bill along, and they do not want me to
offer another amendment.
I want to describe, as you are waiting for Senator Baucus and others,
what I was going to offer the amendment on. I want Members of the
Senate to understand that we are going to be dealing with this issue in
a day or so.
Here is the issue. It is very simple. It is something most Senators
have not heard of, but it is something that went on late last night
here in the Senate in a deal between the Senate and the House, I am
told. There is a bill that is traveling with the minimum wage that is
called the Small Business Job Protection Act that gives some benefits
to small business. Of course, it is not just benefits for small
business. Included in that bill was a provision repealing something
called section 956A of the Internal Revenue Code.
What is 956A? It is a provision of the law that was passed in 1993 to
close a corporate tax loophole by which corporations move investments
and U.S. jobs overseas, and avoid paying taxes here at home. In 1993,
that loophole was closed by something that was proposed by President
Clinton and supported by the Congress: 956A. It says that you cannot
start a manufacturing plant overseas, earn a lot of money, and pay no
taxes back home.
My point is that in 1993 a tax loophole was closed. It had benefited
some of the largest corporations in the country. It said to them, if
you move your investments and jobs overseas, we will give you a special
tax break that is not available to small businesses operating in this
country. And they moved their jobs overseas. They earn income overseas
and pay no taxes in this country on income. They invest it in passive
assets abroad in foreign countries, and pay no income tax here.
We closed that tax loophole. Guess what? There are some folks in this
Chamber and the House that have been working late at night to reopen
that loophole. I know it is only a few hundred million dollars, but it
is a few hundred million dollars in favors to some of the largest
corporations in this country.
I have worked for couple of years trying to get some money to deal
with Indian child abuse--a million dollars, two million dollars. I have
told my colleagues before that I have been in an office where there is
a stack of papers that high on the floor of complaints of sexual abuse
and violence against children that have not even been investigated
because there is not enough money. We do not have enough money to do
things like that. We are simply short of money.
But when it comes to late night in this place, in the conference,
there is enough money to give a $235 million tax break to corporations
and say, if you want a tax break to move your jobs overseas, we will
sweeten it up; we will give you a big, juicy tax loophole.
That is going to be put in the bill in conference. I am told the deal
was struck last night between the chairmen of the two committees
working late last night.
I venture to say that there is not another Member of the Senate who
knows about it, and it probably does not mean a lot to some. It will
mean something to those people who are going to lose their jobs in this
country because we make it juicier for corporations to move jobs
overseas. We decide to give a huge tax break to firms which move jobs
overseas. And it will mean that some people in this country are going
to lose their good-paying jobs. It is going to mean that we are out
several hundred million dollars because we now have a new tax break
that we thought we had closed in 1993. It is going to mean that small
businesses that operate in this country are going to be forced to
compete with large multinational firms at a greater disadvantage.
This is coming to the Senate, and it is stuck in a bill called the
Small Business Job Protection Act. It ought to be against the law to
use a title like that when it includes provisions like this.
You are going to hear more from me if it is true that the conference
has accepted this and is going to bring it to the floor of the Senate.
I am told a deal was made last night.
I could name some large corporations on the floor--but I will not at
this moment--that have been moving around this town saying, ``Reopen,
please, for us this tax loophole. We want to benefit from it. We want
to move our jobs overseas. We want to invest our money overseas. Reopen
this loophole.''
We have folks jumping for joy to see if they cannot accommodate those
who want another tax loophole done in the dead of night without the
knowledge of people in this Chamber and the other Chamber. Most of them
do not know much about 956A--and done with hundreds of millions of
dollars at a time when we cannot get $0.5 million or $1 million to deal
with critical issues of child abuse on Indian reservations. They cannot
even get them investigated. But there is plenty of money to do this.
I will tell you, if I sound upset about this stuff, I am, because
this sort of thing should not go on in this town. If you want to debate
restoring a tax loophole, then let us debate it on the floor of the
Senate. We repealed it 3 years ago. Now the folks want to go out and
open it up again. Let us debate that on the floor of the Senate and see
if you get one vote.
How many want to stand up in the Senate and say, ``Yes, we would like
to restore a new tax loophole. Count us in. We want to go home and brag
about creating a new tax loophole which benefits some of the biggest
corporations

[[Page S9266]]

in this country so they can move their jobs overseas''.
I want to know one Senator who wants to go home and brag about that
in August. I bet there is not one who would do it, not one who would
want to vote on this, so you do not have to vote on it because it is
done under cover of darkness, slipped in a bill that is called the
Small Business Job Protection Act. You talk about mismanagement.
There is nothing about small business job protection in any of this.
This is not job protection--shipping jobs overseas. It is not small
business when you are talking about the biggest businesses in the
country.
So I would say if tomorrow this conference report comes back to the
floor of the Senate, you are going to hear a lot about this, and I am
going to ask: Who is the person that said, ``Count me in, count me in
at a time when we are tightening our belts wanting to lead the charge
to open up a new tax loophole. Sign me up for that''? I want to find
the Member of the Senate or the House who says, ``Yes, that is me. That
is what I stand for,'' because I think this is an outrage.
I think that there are a lot of people who think they can do it
simply because if they do it in conference, we do not get a chance to
vote on it separately. Do you know something? It was not put in the
Senate bill. They were going to put it in the Senate bill, but they did
not do it because I think they knew I was going to force a vote on it.
So they put it in the House bill and packaged up a rule so they do not
have to vote on it.
The result is that nobody in conference who tries to push this sort
of sweet deal--so that big business move jobs overseas--nobody has to
vote on it. So they get the job done for their friends worth hundreds
of millions of dollars and do not have to vote on it, therefore, and do
not have to go home and raise their hand and say, ``It was me. I am the
one who stood for spending several hundred millions opening up a new
tax loophole that benefits large profitable corporations.''

I just urge that if this deal is not done--I am told it was done last
night--if it is not done, rethink it, because somebody is going to live
with the consequences, and somebody is going to have to stand up and
say, ``I am the one who believed we ought to open up new tax
loopholes.''
That is not what we ought to be doing. We ought to be closing tax
loopholes.
We ought not be doing things to ship jobs overseas. We ought to keep
jobs at home.
You talk about a perversion of constructive thought about economics.
This is a perversion.
So I will not offer the amendment. I was going to offer a motion to
instruct conferees. I do not think at this moment that is something
that will accomplish what I want. I guess what I would like to do is
simply serve notice to Members of the Senate that if there is a vote in
conference on this, I hope conferees will stand up and be counted.
If this comes to the floor in this bill, I hope it comes to the floor
in a circumstance where we can have a good aggressive fight about it. I
know they are going to wrap it up in conference and tie the bow and try
to jam it through here so we do not have a chance to discuss this, but
it is not going to go through here without some of us asking questions:
For whom is this done? Who does it benefit? Who did it? Why did they do
it? And how on Earth do they think this benefits this country if you
are concerned about jobs and opportunity in this country?
Mr. President, I yield the floor.
Mr. LAUTENBERG addressed the Chair.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. LAUTENBERG. I thank the Senator from North Dakota.
Despite the fact that I heartily agree with him, I hardly think that
there are many in this Chamber or many across the country who would
think it is a good idea to facilitate the exportation of jobs. That is
about the silliest thing we can do, and, frankly, I think it has hurt
America severely by providing ease of transportation, transmission, and
relocation of jobs that used to be in America that we thought were
relatively menial, low-skilled jobs that today would be very nice to
have in our country.
The Senator's point is an excellent one, and I regret that we at this
point cannot accommodate him, but I think the message is clear to those
who are going to be on the conference committee that they ought to pay
attention because it will be remembered for a long time to come if they
ignore the opportunity to cut that flow.
I thank the Senator very much.
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, momentarily I am going to be offering an
amendment to correct a mistake the Treasury Department and Department
of Transportation made in calculating allocation of highway funds.
I see my very good friend from Virginia is in the Chamber. He is a
very valuable member, ranking member of the authorizing subcommittee
and wishes to make a statement on this, and I should like to yield to
my good friend from Virginia, Senator Warner.
Mr. WARNER addressed the Chair.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. Mr. President, I know full well the Senator did not mean
to call me ranking member. I do believe we have had a small matter of
an election, and I am now the chairman.
Mr. BAUCUS. Excuse me. I am sorry.
Mr. WARNER. In any event, the distinguished Senator from Montana and
I have worked together on many, many things over many, many years, and
we will continue, in all probability, to work together.
The point I wish to make is that when the Senator from Montana has
the opportunity to present the amendment to the Senate, I wish to be
recorded in opposition for the following reasons. There is nothing that
I have witnessed in my period here in the Senate that is more divisive
than the highway allocation formulas.
Mr. President, I do not know--I think I do know, but for the moment I
do not have before me the documentation--who devised this formula years
ago, but I know it requires many, many bureaucrats and many, many pages
of reference material for even those in the Department of
Transportation responsible for this allocation formula to figure it
out.
I think it is incumbent upon the Congress next year as a part of the
ISTEA reauthorization, in which I hope to play an active role, to
revise this formula so: First, it is simple and can be understood and
all States know the various factors that are taken into consideration
to make the allocation; and: second, that it is fair.
Right now there are donor States and donee States. The donor State is
a State in which the receipts from sales of gasoline in that State go
to the highway trust fund and then the allocation from the highway
trust fund comes back and that State gets a sum less than the total of
the receipts paid by its constituents and such others that may avail
themselves of the fuel in that State. Now, donees get a greater sum
than the total of their revenues from the sale of gasoline as a Federal
tax. So the time has come to reconcile this ancient formula with
reality and with fairness.

What is the present problem? The Senator from Montana I think quite
properly brings before the Senate the fact that someone--and I am not
pointing an accusing finger of malice aforethought--misapplied a
regulation, a rule or something.
As a result, Mr. President, we have 19 States, my State being one of
the 19, which received an incorrect sum of money. In the case of
Virginia, it is $10,488,000, a sum of money which is greater than
Virginia was entitled to under the complicated formula to which I have
referred had that formula been properly administered by the unknown
bureaucrat. And 18 other States are in a similar situation--Arizona,
Arkansas, California--$65 million for California--Colorado, Indiana,
Louisiana, Massachusetts--I will not go on. They are here. I will put
them in the Record. I so ask unanimous consent. I will name Oregon, Mr.
President, the State of the distinguished chairman of the committee.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[[Page S9267]]

COMPARISON OF PROPOSED FY 1997 OBLIGATION LIMITATION BASED ON ESTIMATED
FY 1997 APPROPRIATIONS
------------------------------------------------------------------------
90 percent 90 percent of
of payments payments
States estimated @ estimated @ Difference
$2.6B $1.5B + $135M
------------------------------------------------------------------------
Alabama...................... 316,954 317,760 806
Alaska....................... 174,987 184,165 9,178
Arizona...................... 238,340 233,851 (4,189)
Arkansas..................... 196,398 189,800 (6,598)
California................... 1,490,847 1,424,889 (65,958)
Colorado..................... 195,996 195,439 (557)
Connecticut.................. 309,047 324,870 15,823
Delaware..................... 67,550 71,008 3,458
District of Columbia......... 72,833 76,652 3,819
Florida...................... 692,919 695,436 2,517
Georgia...................... 511,466 528,744 17,278
Hawaii....................... 106,597 112,055 5,458
Idaho........................ 94,626 99,588 4,962
Illinois..................... 592,113 604,958 12,845
Indiana...................... 380,999 362,901 (18,098)
Iowa......................... 178,942 181,124 2,182
Kansas....................... 178,921 188,082 9,161
Kentucky..................... 282,885 293,063 10,178
Louisiana.................... 258,683 243,528 (15,155)
Maine........................ 79,641 83,564 3,923
Maryland..................... 260,348 258,343 (2,005)
Massachusetts................ 597,481 628,817 31,336
Michigan..................... 488,272 463,353 (24,919)
Minnesota.................... 247,475 228,404 (19,071)
Mississippi.................. 194,751 193,413 (1,338)
Missouri..................... 389,783 384,254 (5,529)
Montana...................... 132,763 139,726 6,963
Nebraska..................... 121,326 127,538 6,212
Nevada....................... 99,084 99,599 515
New Hampshire................ 74,635 78,457 3,822
New Jersey................... 417,115 438,472 21,357
New Mexico................... 147,746 155,494 7,748
New York..................... 912,361 959,076 46,715
North Carolina............... 427,763 420,165 (7,598)
North Dakota................. 88,859 93,409 4,550
Ohio......................... 598,477 558,927 (42,550)
Oklahoma..................... 246,635 245,416 (1,219)
Oregon....................... 195,536 196,960 1,424
Pennsylvania................. 655,910 637,515 (18,395)
Rhode Island................. 74,195 78,086 3,891
South Carolina............... 248,779 258,338 9,559
South Dakota................. 97,350 102,456 5,106
Tennessee.................... 363,093 353,238 (9,855)
Texas........................ 1,132,043 1,105,498 (26,545)
Utah......................... 112,946 115,506 2,560
Vermont...................... 68,516 72,024 3,508
Virginia..................... 381,449 370,961 (10,488)
Washington................... 283,047 297,892 14,845
West Virginia................ 137,862 144,921 7,059
Wisconsin.................... 286,718 279,676 (7,042)
Wyoming...................... 97,018 101,986 4,968
Puerto Rico.................. 71,920 75,603 3,683
------------------------------------------
Subtotal................... 16,072,000 16,072,000 0
Administration............... 532,000 532,000 0
Federal lands................ 426,000 426,000 0
Allocation reserve........... 620,000 620,000 0
------------------------------------------
Total...................... 17,650,000 17,650,000 0
------------------------------------------------------------------------
Note: Estimated apportionments prepared by HPP-21

Mr. WARNER. Now, my position is that this correction should be done
in the course of our consideration of the revision of this formula next
year during ISTEA. Owing to the clear conscience of the distinguished
chairman of the committee, the distinguished ranking member from New
Jersey, the distinguished ranking member of the Environment Committee,
our chairman, and indeed backup from well-informed staff, we decided
not to do this amendment last night--I among others objected--as a
managers' amendment--and I commend the managers of this bill for not
trying to do this--which results in a considerable loss of money to 19
States.
The Senator has every right to do it as an amendment to the pending
bill. Technically, I suppose it is legislation on this bill. I intend
to vote, however the vote is taken, in opposition because I think the
better course of action is to deal with this correction next year.
These sums of money will not affect the ability of the several States,
50 of them, to go forward with their highway programs. My State,
although it has been told it is going to get the $10 million, has made
certain plans to expend this $10 million, and it will require a certain
perturbation in the planning to take $10 million out of the budget for
this year. And 18 other States will similarly be subjected to deducting
from their highway budgets this sum of money. So that, to me, is the
more equitable and more fair way to deal with this question. That would
enable all the other Senators, many of whom are learning, presumably
for the first time at this moment, knowledge of this problem.

The other reason I feel it should be done this way, and with due
respect to the distinguished ranking member of the committee, the
Senator from Montana, is we do not have before us--at least I do not--
any letter from the Department of Transportation explaining to Senators
exactly how this happened. Perhaps the Senator from Montana can
articulate the problem in more detail. But it seems to me the Senate
should have before it certain documentation from the Secretary of
Transportation explaining how this happened and the need for it to be
corrected by the Congress. It is apparent that the Secretary of
Transportation has made the decision he cannot do it administratively
within the executive branch, but it requires the Congress to act.
So I have concluded my remarks and, at such time as the distinguished
Senator from Montana wishes, he can put the amendment forward. I hope
other Senators will find the opportunity to speak on it. I yield the
floor. I thank my colleague.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I appreciate the statement the chairman of
the Subcommittee on Transportation of the Environment and Public Works
Committee made. I understand the Senator's position, namely that
although a mistake is made, and there is not anybody who disputes that
a mistake was made, the point is the mistake could be corrected next
year when Congress takes up reauthorization of the highway bill, the
so-called ISTEA.
The problem with that is very simple. First of all, this is a
mistake. This is not a formula question. When ISTEA comes up next year,
this Congress will deal with the formula under which the highway funds
are disbursed. This is not a formula question--not a formula question.
This is correcting an administrative error the Department of
Transportation and, more precisely, the Department of Treasury made. It
is a simple correction.
I might also say the mistake that was made, and nobody disputes the
mistake was made, is not a donor-donee question. The mistake
distributes the dollars inappropriately to some States and does not
distribute dollars inappropriately to other States, irrespective of the
donor-donee question. This has nothing to do with donor-donee issues.
It has nothing to do with the formula.
One more point which I think is even more salient is this. The States
in question here would not receive this money, if the mistake is not
corrected, until fiscal 1997. So they are not going to be receiving any
money this year, calendar 1996. They are not going to be receiving any
money next year until after the fiscal year begins on October 1, 1997.
So this is the appropriate time to correct the mistake, that is, before
States would otherwise receive their money. It is a lot easier to
correct a mistake before a State or somebody receives money than it is
afterward. I know full well the States that receive their money, if
they were to receive their money incorrectly next year, they are not
going to be very likely to give it back.
I think, therefore, for all those reasons, the appropriate place to
correct the mistake--nobody disputes the mistake was made--is right
now. Just do it quickly and easily. Then, next year, this Congress will
engage in a full battle royal, I know, over the allocation of highway
funds.
For those reasons, I think this is more appropriate that the
correction be made here and now, simply, rather than putting it off to
next year.
Mr. HATFIELD. Will the Senator yield?
Mr. BAUCUS. I am glad to yield to the chairman of the Appropriations
Committee.
Mr. HATFIELD. I discussed this matter with the Senator from Virginia,
and I believe the Senator is willing to enter into a time agreement on
this amendment of 1 hour, equally divided.
Mr. BAUCUS. Fine.
Mr. HATFIELD. I ask unanimous consent an hour limitation be given to
the Baucus amendment.
The PRESIDING OFFICER. Is there objection?
Mr. HATFIELD. Mr. President, I withdraw the request.
The PRESIDING OFFICER. The request is withdrawn.
Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LAUTENBERG. 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. LAUTENBERG. Mr. President, we are going to be waiting for a few
minutes for other Senators who wish to speak to arrive. I would like to
take a few minutes during that wait to lend my support to the amendment
that will be offered by the distinguished Senator from Montana. I think
it is well-intentioned, and I think the amendment is fair.
The one thing I want to be certain of is that this amendment is not
going to be perceived as a formula fight, because that should not be.
This is a correction. It corrects the fact that the Department of
Treasury misinterpreted the revenue reports that were

[[Page S9268]]

put into a new format. The unfortunate result is that the Treasury
Department grossly overstated the amount of gas tax receipts to the
highway trust fund during 1994.
This error is acknowledged by the Treasury Department and by the
Federal Highway Administration. Unfortunately, the FHWA is required by
law to base a certain category of highway fund allocations on the
Treasury's formal estimates, whether or not they are correct.
So, what the Baucus amendment seeks to do is correct the allocations
made as a result of Treasury's error. And the amendment, I must say to
my colleagues who were in the Chamber or who might hear us, the
amendment will not deny any State the full 90 percent of the payments
they are due through the Federal aid to highways formula program. What
this amendment will do is to set these payments at 90 percent of what
the States actually paid, rather than 90 percent of the Treasury's
erroneous estimates.
We heard from the distinguished Senator from Virginia about the
interest that he and the Senator from Montana have in terms of
examining the formula. We will have a chance to do that, I assure you,
at length, I believe. But we ought not to try to do it here, and that
is not what is being attempted. Unfortunately, the impact of correcting
this mistake results in certain States getting more and others getting
less than they would otherwise receive if this correction were not
adopted.

When reviewing this amendment, I hope that the Members will keep in
mind that the bill before us provides an increase of $100 million in
the overall obligation limit for the Federal Aid Highway Program, from
$17.55 billion to $17.65 billion, a $100 million increase. This
increase is going to help all States in meeting their transportation
needs. While it is unfortunate that the legislation is required to
correct this mistake, the Federal Highway Administration assures us
that absent this bill language, the Secretary does not have the
administrative authority to correct these highway allocations and bring
them into conformity with what we now know to be the actual gas tax
receipts.
I hope our Members will support this amendment. It is the right thing
to do; it is the fair thing to do. The amendment is not an attempt to
pick anyone's pocket in the dark of night.
Mr. President, I yield the floor.
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER (Mr. Santorum). The Senator from Montana.

Amendment No. 5141

(Purpose: To require the calculation of Federal-aid highway
apportionments and allocations for fiscal year 1997 to be determined so
that States experience no net effect from a credit to the Highway Trust
Fund made in correction of an accounting error made in fiscal year
1994)

Mr. BAUCUS. Mr. President, I have an amendment which I send to the
desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Montana [Mr. Baucus] proposes an amendment
numbered 5141.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

At the appropriate place in title III, insert the
following:

SEC. 3 . CALCULATION OF FEDERAL-AID HIGHWAY APPORTIONMENTS
AND ALLOCATIONS.

(a) In General.--Except as provided in subsection (b), for
fiscal year 1997, the Secretary of Transportation shall
determine the Federal-aid highway apportionments and
allocations to a State without regard to the approximately
$1,596,000,000 credit to the Highway Trust Fund (other than
the Mass Transit Account) of estimated taxes paid by States
that was made by the Secretary of the Treasury for fiscal
year 1995 in correction of an accounting effort made in
fiscal year 1994.
(b) Adjustments for Effects in 1996.--The Secretary of
Transportation shall, for each State--
(1) determine whether the State would have been apportioned
and allocated an increased or decreased amount for Federal-
aid highways for fiscal year 1996 if the accounting error
referred to in subsection (a) had not been made (which
determination shall take into account the effects of section
1003(c) of the Intermodal Surface Transportation Efficiency
Act of 1991 (Public Law 102-240; 105 Stat. 1921)); and
(2) after apportionments and allocations are determined in
accordance with subsection (a)--
(A) adjust the amount apportioned and allocated to the
State for Federal-aid highways for fiscal year 1997 by the
amount of increase or decrease; and
(B) adjust accordingly the obligation limitation for
Federal-aid highways distributed to the State under this Act.
(c) No Effect on 1996 Distributions.--Nothing in this
section shall affect any apportionment, allocation, or
distribution of obligation limitation, or reduction thereof,
to a State for Federal-aid highways for fiscal year 1996.
(d) Effective Date.--This section shall take effect on
September 30, 1996.

Mr. BAUCUS. Mr. President, this is a very simple technical correction
amendment. Very simply, it corrects a mistake that the Department of
the Treasury made. The administration tells us, incredibly, they need
legislative authority to correct the mistake. This amendment simply
does that legislatively, it corrects that mistake.
Nobody disputes that a mistake was made--nobody. The administration
admits it, and the Senators who have spoken on this issue also admit it
was a mistake.
What was the mistake? The mistake is very simple. Essentially, in
1994, the Treasury failed to credit the Highway Trust Fund with about
$1.5 billion, an administrative error, a bureaucratic error. The
Treasury then corrected that error in 1995, credited the Highway Trust
Fund with the 1994 mistake, that is, the $1.5 billion and also
continued to collect revenues in 1995, as they should.
The problem is the extra bump, the additional revenue in 1995, that
is not only the revenue to be collected properly in 1995 but also the
additional $1.5 billion credit because the mistake was made in 1994,
that additional bump skewed the formulas, because the formulas are
based upon the revenue that was received in 1995; that is, the
formula's distribution for future years is based upon the 1995
receipts.
The Department of Transportation has written us a letter saying that
they cannot correct this mistake administratively and cannot, by their
own administrative procedures, correct this error. They say it has to
be made by legislation. It is a pure and simple error, pure and simple
mistake. I think it is appropriate at this time to correct the mistake.
I might say, Mr. President, this is not a donor-donee question. This
has nothing to do with the claim that some States have that they are
so-called donee States, that is, their citizens are contributing more
dollars in gasoline taxes in the Highway Trust Fund than they are
receiving in highway formula distributions. This is not that issue. In
fact, the mistake that the Treasury made results in a misallocation
which is totally independent of the donee-donor issue--totally
independent; it has nothing to do with it.
I remind my colleagues who might think this is an allocation
question, that this might be, ``Oh, here we go again, one of those
battles where States are trying to get more money for themselves,''
this is not that issue.
We will have an opportunity to deal with that question next year. Why
next year? Because next year the Congress is due to reauthorize the
highway bill, ISTEA. The States have been dealing with the formula
under ISTEA for the past several years. The last ISTEA was passed in
1991. Here we are in 1996. The next ISTEA 6 years later will be passed
in 1997. That is the opportunity and the place to figure out what the
proper formula is in distribution of highway funds.
There will be a lot of good arguments made by a lot of Senators as to
what that formula should be. A lot of factors go into it. Obviously,
population density, miles traveled, population growth--a whole host of
factors. And next year the Congress will dig down deep, try to figure
out which factors, which indicators make the most sense, and we can
deal with that issue then.
That is the time, next year, to deal with the formula. It certainly
is not here on the floor of the Senate at the end of July, this is not
the time to deal with the highway allocation formula. This is not a
formulation, this is simply correcting a mistake which everyone agrees
was a mistake and should be corrected.

Some might ask, ``Gee, why don't we take up this mistake and correct
this

[[Page S9269]]

mistake next year when we take up the highway bill?'' The answer to
that is very simple, Mr. President. It is this: The maldistributions,
the unjust-enrichment distributions that will be allocated under this
mistake will not occur this year in 1996, they will occur in the next
fiscal year, 1997. So those States who unjustly are enriched by a
clerical bureaucratic mistake will not be receiving any funds until
after October 1 of next year, 1997.
So now is the time to correct the mistake; that is, before States
receive money they should not receive and before States do not receive
money that they should receive. Now is the time to correct the mistake.
Sure as we are here tonight, Mr. President, we know next year after
October of 1997--and ISTEA will certainly come up later than October of
next year, that is the new highway bill as we deal with the new
allocation formula--States are not going to want to give back money
they improperly receive. They already will have received the dollars.
So now is the time in 1996 to correct the mistake so States are in a
lot better position to deal with what is proper here.
I might say, too, Mr. President, that 19 States benefited by this
mistake; 31 States were injured, harmed by this mistake. The amendment
I am offering simply returns us to the status quo. It does not tilt the
formula any way, one way or the other. It is totally a restoration of
the status quo; that is, a total correction of a mistake that was made,
which means under this amendment 31 States will be better off, 19
States will be worse off, compared with where they would be if the
mistake were not corrected. The amendment here simply again is to
correct the mistake. I would like to read the names of the States, Mr.
President, which will benefit under this amendment, that is, returned
to the status quo, that is, States which will then be receiving what
they are supposed to be receiving under the ISTEA bill, the highway
bill. Here are the States: Alabama, Alaska--so if you are one of these
States, you are a State that is being unjustly, unfairly harmed by a
bureaucratic error. This amendment would add dollars back to correct
that mistake so we are back to the status quo.

Again: Alabama, Alaska, Connecticut, Delaware, District of Columbia,
Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky,
Maine, Massachusetts, Montana, Nebraska, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Dakota, Oregon, Rhode Island, South
Carolina, South Dakota, Utah, Vermont, Washington, West Virginia, and
Wyoming. I might also add, Puerto Rico would be in that list as well.
Very simply, I will sum up, Mr. President, by saying this is an
attempt to correct a mistake. Everyone admits it is a mistake. This is
not a donee-donor question. Now is the proper time to correct the
mistake because funds have not yet been allocated. They will not be
allocated--under the mistake--until 1997, fiscal 1997. That is
beginning October 1 of next year.
So now is the time to correct it. The issue of how we allocate
disbursements should be addressed when we take up the highway bill next
year. I have given the names of the States that will be benefited under
this amendment. Again, they are States who are harmed by the mistake
but to be returned to the status quo. Thirty-one States in that
category.
Mr. President, I see the chairman of the committee, my very good
friend, John Chafee on the floor. And he also supports this amendment
for the correction for the States. I yield the floor.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I support the amendment by the ranking
member of the Senate Environment and Public Works Committee, the
distinguished Senator from Montana.
Mr. President, the amendment by the Senator from Montana corrects an
accounting error made by the Department of the Treasury in 1994.
There may be some confusion as to whether under this amendment States
will receive full credit for contributions made to the highway trust
fund. Under the Baucus amendment the States will receive full credit
for all contributions made to the highway trust fund but they will
receive that credit in the year that they were actually collected
rather than when they were recorded on the Treasury ledger.
I would like to emphasize that this is not an attempt to rewrite the
highway funding formula under the so-called ISTEA, the Interstate
Transportation Act. This is not a highway trust fund formula amendment.
And I do think it is very, very unfortunate that the clerical error has
resulted in confusion, and indeed understandable irritation for Members
of this body. Frankly, Mr. President, I greatly wish it had never
occurred so that we would not be here trying to straighten things out.
I realize that some Members of this body believe that the formulas
that distribute highway funds are not fair or appropriate. And that is
a legitimate concern. Members will have their chance to make their case
for changes in the formula next year when we reauthorize the highway
program. The Environment and Public Works Committee plans to commence
hearings on the reauthorization of the so-called ISTEA in September of
this year. We will continue those hearings next year. We want to get on
with this bill. We have to get on with it next year. At that time we
definitely will have arguments over the formula and what should go into
it.
The Senator from Montana ticked off some of those items. For example,
should we count the amount of interstate highway mileage, the State's
population, the miles driven, the amount of highway trust fund
contributions, the number of deficient bridges? All of those are
legitimate things to consider when we deal with the formula.
That will be a very healthy debate, I can guarantee everybody here,
because you have donor States who put in more than they get back and
you have donee States that receive more than they put in. Legitimately,
the States that put in more are distressed. And the States that put in
less think that, well, this is a National Highway System so you should
not get back exactly what you put in. That is OK. We will debate that
vigorously.
But I do believe that it is unfortunate and not appropriate, when we
are trying to straighten out a bureaucratic error, to change the
current formula that has been agreed to, was agreed to by Congress in
1991. The distribution of funds in the highway program structure are
issues that must be debated on the merits, as I said, when we
reauthorize the basic legislation.
Some would say, ``Well, OK, if you want to straighten out this
problem, wait until next spring when you deal with the highway
reauthorization. Why do we take it up now?'' We are taking it up now
because the problem that we are talking about will be compounded if we
wait. Now is the time, difficult though it might be. Some might say,
``Oh, well, in the list that the Senator from Montana read off, Rhode
Island will get back some money that they should have gotten, and
others will have to restore some of the extra money that they
received.'' As I say, we wish that all had not occurred. But if we
wait, the problem, as I say, will become more difficult.
I would like to raise, Mr. President, a concern regarding the public
perception of this issue. Failure to approve the amendment by the
Senator from Montana will mean that an accounting error will generate
more than $1 billion in false spending authority. This situation
obviously will be difficult to explain to taxpayers when they are
concerned about reining in Federal spending. Moreover, unless it is
corrected, this error will create the image of an irresponsible Federal
Government which cannot correct an error. So I hope we will support
this amendment and get on with it, difficult though it might be. I
thank the Chair.
Mr. GRASSLEY. Mr. President, I rise in support of the amendment being
offered by Senator Baucus, and my colleagues Senator Chafee and
Domenici. Due to the error by the Treasury Department, my home State of
Iowa stands to lose $2,182,000 from the highway trust fund. This
amendment would correct the Treasury Department's error, restoring the
money.
I understand that the Treasury Department did not correctly credit
$1.6 billion to the highway trust fund in fiscal year 1994. The
Treasury then corrected this error in fiscal year 1995. However, by not
correctly attributing the funds to fiscal year 1994, the Treasury
action is adversely affecting the

[[Page S9270]]

distribution of highway funds to 31 States in fiscal year 1997. This is
unfair. These States are being unfairly penalized through no fault of
their own. They are being penalized by an error by the Treasury
Department.
I urge my fellow Senators to join the Senator from Montana, myself,
and the other cosponsors of this amendment to correct this error. It is
the right thing to do.
Mr. GRAMM addressed the Chair.
The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, I am somewhat puzzled by this debate
because what has happened is that the error has been corrected. No one
is saying that there is a problem in the allocation in the bill before
us. What we are seeing here is an effort to use an appropriations bill
to try to go back and impose a change on a formula which this year is
fair to correct a problem which it is asserted existed last year.
Let me remind my colleagues of how we came to this point. The
apportionment of highway dollars to States is based in part on the
actual motor fuel taxes collected in the State. And the law says that
the most recent data available will be used.
In fiscal year 1996, the most recent data available was an estimate
of fiscal year 1994 collections. The Secretary of the Treasury
certified that that was the data that was available. On the basis of
that data and the law, an allocation was made. The Department of the
Treasury was late in reporting the 1994 actual data collection to the
Department of Transportation and therefore they relied on the data that
was available at that time. What we are being asked to do now is to go
back and change a formula which has already been adjusted.
In listening to our colleague from Rhode Island, one would get the
view that the current appropriations bill before us has an unfair
allocation of funds under ISTEA or an allocation which is based on old
data. But unless I am wrong--and I would be happy to be corrected--that
is not the case.
No one is asserting that this appropriations bill in any way is in
error in allocating funds. What is instead being asserted is, that
since the most recent data available when this was done last year was
the estimated 1994 data, which therefore under law was used, that if
the actual 1994 data had been available, that the funding formulas
would have generated a different result. Are we, Mr. President, every
year, going to go back and second-guess the formula? Or are we going to
follow the law?

Now we have one of these things that, from time-to-time, happens,
where by going back and changing the base-year data, more States
benefit than lose. The bottom line is that no one here has asserted
that the Secretary of the Treasury or the Secretary of Transportation
did not comply with the law. The law says that the allocation will be
based on the most recent data available. It was based on the most
recent data available last year.
No one asserts that the current formula is wrong. But what is being
asserted is that, using data that was not available last year, we could
go back and reallocate these funds and take an allocation which this
year no one disputes is a fair allocation, but we would go back and
take money away from States in a formula that no one argues is unfair,
to basically allocate funds, not according to the law last year, since
the estimated 1994 data was the most recent year available, but
according to how it would have been allocated if data had been
available which was not available.
Here is my point: I think you can argue endlessly on these things,
but I do not think this is the place where the argument should occur.
This is an appropriations bill. Obviously, what we have here is an
attempt to change the allocation. The amendment changes an allocation,
which no one disputes as being valid, to try to reallocate funds from
last year.
It is true that nobody here would dispute that if the actual 1994
data was available last year, instead of the estimate, the allocation
might have been different. But it was not. The law says very clearly
that the allocation is based on the most recent data available. I
believe if we are going to deal with this issue, we need to deal with
it when we are reauthorizing ISTEA, and we need to deal with it not
just for this year but we ought to set out a principle. I think it
makes absolutely no sense to simply go back and say, if data had been
available then, which was not available, the allocation might have been
different, and therefore take a year where no one disputes the
allocation and reallocate the money, because 31 States will benefit and
only 19 States will lose. I hope we will table this amendment because
it clearly is legislating on an appropriations bill. I think if we
start opening these formulas up to this kind of debate, it is going to
make it very, very difficult for us to be able to pass these
appropriations bills. I am not at this point ready to give a time limit
on this bill. I think we should vote on tabling it, and then I think we
will want to look at second-degree amendments.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BAUCUS. 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. BAUCUS. Mr. President, I want to enter into the Record a couple
of letters from the administration which document that a mistake was
made. The first is a memorandum from the Department of Treasury. I
would like to read several portions of it without reading it in detail.

In fiscal 1994 an accounting error, described in greater
detail below, resulted in a $1.590 billion misallocation of
excise taxes against the Highway Trust Fund. This
misallocation of excise taxes was corrected in fiscal year
1995.

Another portion reads:

This change led to a misinterpretation of the information
provided to FMS on the IRS Quarterly Certification and
resulted in a misallocation of excise taxes between the
Highway Trust Fund and General Fund in Fiscal Year 1994. This
misallocation of excise taxes was corrected in Fiscal Year
1995, debiting the General Fund and crediting the Highway
Trust Fund in the amount of $1.590 billion. Procedures have
been implemented to assure that future adjustments to the
Highway Trust Fund occur in an accurate and timely manner.

I ask unanimous consent that this document be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Department of the Treasury,

Washington, DC, July 31, 1996.
Memorandum to: Senator John H. Chafee, Chairman, Environment
and Public Works Committee, U.S. Senate, Washington, DC.
From: Linda L. Robertson, Assistant Secretary (Legislative
Affairs and Public Liaison).
Subject: Correcting the misallocation of excise taxes between
the highway trust fund and the general fund.
In Fiscal Year 1994, an accounting error, described in
greater detail below, resulted in a $1.590 billion
misallocation of excise taxes, against the Highway Trust Fund
(HTF). This misallocation of excise taxes was corrected in
Fiscal Year 1995.
The initial transfer of receipts to the Highway Trust Fund
is based upon monthly estimates provided to Financial
Management Services (FMS) by the Office of Tax Analysis.
Subsequently, FMS uses the IRS Quarterly Certification of
``actual'' liability to adjust the Highway Trust Fund balance
for any difference between amounts initially transferred and
``actual'' quarterly liability. This adjustment is referred
to as the ``Correcting Adjustment.''
At the request of OTA, the format of the IRS Quarterly
Certifications used to make correcting adjustments to the
Highway Trust Fund was changed. This change led to a
misinterpretation of the information provided to FMS on the
IRS Quarterly Certification and resulted in a misallocation
of excise taxes between the Highway Trust Fund and the
General Fund in Fiscal Year 1994. This misallocation of
excise taxes was corrected in Fiscal Year 1995, debiting the
General Fund and crediting the Highway Trust Fund in the
amount of $1.590 billion. Procedures have been implemented to
assure that future adjustments to the Highway Trust Fund
occur in an accurate and timely manner.

Mr. BAUCUS. Mr. President, very clearly, the Department of Treasury
admits the error, a $1.590 billion miscalculation. To review this, so
that Senators understand how this procedure works, by law, there is a
2-year time lag, which means that because a mistake was made in 1994,
by definition, 1996 allocations were not made in advance of what the
formula would

[[Page S9271]]

otherwise require, because in 1994, almost $1.6 billion was not
credited to the highway trust fund. In 1996, the formula was based upon
the amount that is in the 1994 account. Since the 1994 account was
deficient by $1.6 billion, by definition, States were not overpaid in
1996. So no States were overpaid in 1996.
Again, as I said, by law, the allocation is made 2 years after the
account is so-called certified. Well, in 1995, after the mistake was
discovered, not only were normal 1995 accounts received from States and
the highway trust fund credited with the usual amount it should have
been, but in addition to that, the mistake--the $1.6 billion--was added
on top of the 1995 account, which overstated 1997 payments. So the
correction we are trying to make here today is a combination of 1994
and 1995, the underpayment in 1994, as well as the overpayment in 1995,
which determine the State allocations in fiscal years 1996 and 1997.
I might add, Mr. President, I have another letter from the Department
of Transportation--actually, from the Federal Highway Administration,
signed by Rodney Slater, Administrator.
It states in part that it is unable to administratively make the
correction. I can read portions of that, but Senators may read the
letter. It is a little bit technical and bureaucratic. But the long and
short of it is that they admit the mistake and explain what would have
happened had the mistake not occurred. They state that it has to be
corrected by legislation.
I listened with great curiosity to the arguments of the Senator from
Texas. He, in a sense, was saying that because the 1994 allocation was
determined as it was, and the mistake was made, we should close our
eyes and be blind to any mistake that might have been made. He is
saying, by law, the 1996 allocation should be determined by what the
1994 receipts are, and a mistake was made, but do not look at the
mistake because that is what the law said in 1994.
Mr. President, we are only saying that everyone admits it was a
mistake. The Department of Treasury documents it was a mistake, as does
the Department of Transportation. Senator Warner was on the floor not
long ago and also admitted the mistake.
I guess the real question is, if it is a mistake, do we correct it or
not? That is the issue. Very simply, if a mistake is made, should it be
corrected, or should it not be corrected?
I submit, Mr. President, to ask the question is to answer it. Of
course, we should correct the mistake. That is what normal, civilized
human beings do--correct mistakes.
The other argument I have heard is, well, gee, even if a mistake was
made, don't correct it now, correct it next year. Well, we all know,
Mr. President, one of the greatest problems that we as human beings
have is procrastinating, putting off what we can do now.
Here we are tonight. Let us correct this mistake. We could, I
suppose, take it up next year when ISTEA comes up. But ISTEA is the
highway bill. The highway bill battle is to determine what the
allocation should be. We are not arguing what the allocation should be.
That is an argument that Senators will engage in next year, in 1997.
I might also say--repeating myself--if we don't correct the mistake
now, next year the States will receive dollars they should not receive,
and they are not very likely to want to send the dollars back, even
though they know they should.
We are really put to a test here, Mr. President. The real test is:
Are we going to live up to our word or not? I might say, particularly,
as Senators, that is really the issue here. Sure, if a State is
unjustly enriched, it is kind of fun to get the extra dollars. But if
it is unjustly enriched because of a mistake, we all know we should not
accept those dollars, and we should correct the mistake, according to
the formula and understanding that we all had when we passed the
highway bill in 1991.

So that is really the deeper underlying question here tonight. Are we
Senators going to live up to our word? Or are we going to be greedy and
take advantage of a mistake that was made, even though we know that is
not fair, that is not the right thing to do? That is the deep
underlying question here tonight that we have to ask ourselves.
I say, Mr. President, that it is very clear. I am surprised that we
are debating this. I am surprised that this amendment was not
automatically accepted. It was a mistake. We are not in a highway
allocation fight tonight. This is not a donor-donee issue. We all know
it is better to correct something sooner than later. So let us correct
it tonight.
Mr. GRAMM addressed the Chair.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mr. GRAMM. Mr. President, let me reiterate that there is no mistake
involved here. In fact, nobody has said there is a mistake involved
here.
Mr. BAUCUS. Will the Senator yield for a question?
Mr. GRAMM. Let me make my point, and then I will be happy to. Here
are the facts: ISTEA says that the allocation of funds among States
shall be based on the most recent data available. That is what it says.
The most recent data available, provided by the Treasury Department,
was the data which was, in fact, provided under the law.
In fact, if you will read the letter sent to Senator Baucus,
basically that letter makes it clear that it is the Department of
Transportation's position that it does not have authority to use
anything other than the official accounts of the trust fund maintained
by the Department of the Treasury in calculating apportionments among
the States.
Here is the point. When the Treasury gave their estimate, they gave
that estimate based on the best data they had available and required by
the law. It is true that, if you go back after the fact and take data
that they did not have that they could have had, you could have
allocated funds differently. But to call that an error is simply a
misuse of the English language. The Department of Transportation used
the best estimate they had based on the data they had.
Now, what the Senator from Montana is trying to do is to say that,
because they did not have data then which they now have, that we should
now go back and alter allocations. No one disputes that the 1997
formula, which is in the bill before us, is based on the newest data,
which no one disputes as being the best available data that apparently
everyone is satisfied with, no one says that the allocation of funds in
this bill are in any way unfair for fiscal year 1997. If they do, I
have not heard it.
But what the Senator is saying is that because the Treasury did not
have final 1994 data in 1996 when they did the estimate, and because
they gave the best data available, complied with the letter and the
spirit of the law, that knowing now what that data turned out to be
after the fact that we could go back last year and rewrite the formula.
Clearly, ISTEA provides no authority whatsoever to do that, and what
is being sought here is rewriting ISTEA. This is legislation on an
appropriations bill. This is taking an allocation for 1997, that no one
disputes as being valid, and changing it to reallocate funds to reflect
an allocation that would have occurred had the Department of
Transportation had data which was not available.
It seems to me that this is gamesmanship that we can engage in
endlessly. Let me give you an example.
Next year we may have the final 1995 data. Next year we might even
have the 1996 data. It would be possible for this Senator or any other
Senator next year to stand up and say, ``When the allocation was done
for 1997, the Department of the Treasury relied on 1995 data, but
actually, if they had known what the 1996 tax collections would have
been, they could have had a different allocation.''
My point being, this amendment could be offered every single year
because there is a lag in available data that the Treasury is able to
provide the Department of Transportation to do these estimates. What we
have done in the past is simply each year made the fairest estimate
that we could make. But I am not aware that we have ever gone back
retroactively and said, if Treasury had had newer data and if they had
provided it to the Department of Transportation data that we now know
but was not known then, could not have been known then, that last
year's allocation could be rewritten.
I hope my colleagues will understand and agree with me that next year
this

[[Page S9272]]

same amendment could be offered because next year we will have the
actual data for the next year in this series--1995-1996. We could stand
up and argue that the actual allocation in the bill before us--not last
year--is wrong because it is based on 1995 data which is the best data
available but that next year when we get 1996 data it might produce a
different allocation.
The point is that while 31 States in fact do benefit, some very
slightly, by this reallocation, this amendment could be offered every
single year to every Department of Transportation allocation of funds
under ISTEA because each year we get a new data point. You could take
that data point which was not available when the funds were allocated
by the formula, but, if it had been available, the allocation would
have been different.
Do we want to do this every single year? Am I to stand up next year
when the 1996 data is available and say had we known in writing in the
1997 allocation what the actual 1996 data was, which we do not know
today, that the allocation would have been different and Texas would
have gotten more money and, therefore, I want to go back retroactively
and take money in the 1998 bill away from some other State, perhaps
Montana, to give to Texas?
I think this is a very, very bad precedent, and it is something that
could be done every single year. That is the point. I hope that we will
not do this because we are setting a precedent that it seems to me
simply leaves chaos in the allocation of these funds.
I yield the floor.
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, the Senator from Texas--by the way, one of
the biggest beneficiaries of this bureaucratic snafu, his State, gets
more dollars as a result of this bureaucratic snafu than almost any
other State.
Mr. GRAMM. That is not correct. California loses the most dollars
under your amendment.
Mr. BAUCUS. I said one of the most. I did not say ``the.''
He is saying that, under the law, the allocation is made according to
the best data available. The fact is the data was available and is
available in 1994. Do you know what happened? Some bureaucrat punched
the wrong keys. So the allocation was put over to the general fund
instead of the highway trust fund. The data is always available. It is
collected. Just some bureaucrat, somebody, made a mistake and punched
the wrong buttons in the computer. So the allocations from States,
gasoline receipts from States, a portion of it, was put in the wrong
account. It was put in the general fund, not the trust fund. The data
was available.
More importantly, I am astounded at the argument of the Senator from
Texas. The Senator from Texas who rails against bureaucracy, who rails
against the Federal Government, is standing here tonight basically
standing up for the bureaucratic ``snafu protection act.'' As he says,
if a bureaucrat makes a mistake, we do not correct it. If the
bureaucrat makes a mistake, we do not correct it, and we do not come
back here on the floor and try to correct the mistake. I am astounded,
absolutely astounded, that the Senator from Texas would stand up and
say we should let a bureaucrat who makes a snafu continue the effect of
that mistake and do not correct the mistake even though the result is
$1.6 billion of unfairly distributed highway trust funds.
That is essentially what he is saying. Essentially that is what he is
saying. Do not correct the mistake. If we come back here next year and
find a mistake, we should not correct it.
I hope we do not come back here next year and correct this mistake
again. The Department of Treasury has said, and I take them at that
their word, in a memo they sent up to us here tonight, ``Procedures
have been implemented to assure that future adjustments to the highway
trust fund occur in an accurate and timely manner.''
Now no one can guarantee they will not make a mistake again. I would
guess tonight there are a lot of red-faced folks over there in the
Department of Treasury perhaps watching this debate saying, ``Oh, my
gosh, how do we make that mistake? How in the world did that happen?
Boy, don't we have egg on our face.'' It is true they do. They made a
booboo, a $1.6 billion mistake.
So all we are saying is let us correct it. The Senator is wrong when
he says this is an allocation fight tonight. It is not that. Nobody who
is listening to this debate believes it is. Nobody who is listening to
this debate believes the argument that this is an allocation fight.
This is simply an effort to correct a mistake. That is all it is, pure
and simple.
Now somebody can come up with some kind of sophistry, argument, turn
on the tail and come back around, and so forth, to try to confuse
people. This Senator is not trying to confuse anybody. This Senator is
trying to very plainly ask the Senate to correct a mistake that was
made--and this is another point, Mr. President--so that when we go into
ISTEA next year there is a better taste in people's mouths; that
Senators will be more inclined to know that the base is fair.
I tell you, Mr. President, if this mistake is not corrected, there is
going to be a lot of bitterness in that debate next year as we begin to
try to figure out what the correct allocation is because Senators will
know that a mistake that should have been corrected was not corrected
and we are starting off basically with a base that is the result of a
big snafu and that snafu is compounded every cycle.
I do not think we want that. I think we want to start off on a level
playing field, and the level playing field will be the restoration of
what the formula is supposed to be and that will be the case if this
mistake is corrected.
Mr. President, I ask unanimous consent to add Senators Grassley and
Bingaman as cosponsors to the pending amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRAMM addressed the Chair.
The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, I do not know that we are gaining very much
in dragging this dead cat back and forth across the table here, but let
me go back to the point which I think is relevant.
Where is this snafu? I see no documentation of a snafu.
Let me go back and outline exactly what the law says and how it works
and make clear what the Senator is calling a bureaucratic snafu, the
pressing of a button by a mindless, nameless bureaucrat. If the Senator
has data to show that, if the Senator has documentation to show that a
bureaucrat pushed the wrong button, this Senator would like to see it.
But I do not have it.
Now, here is what I understand the facts to be. Under ISTEA, the
Department of Treasury, based on the newest data available to them,
gives an estimate to the Department of Transportation as to how much in
highway trust funds is collected by States.
When this estimate was given for last year's appropriation, the
Department of Treasury did not have the final 1994 data, as I
understand it. If someone has evidence to the contrary, I would like to
see it. But based on everything that I have seen, based on all the
correspondence that is available, the Treasury Department, based on the
newest data they had, gave an estimate of tax collections by State to
the Department of Transportation, which, based on that data, which at
that point, to the best of my knowledge or anyone else's knowledge, was
the best data that was available, on the basis of that data the
Department of Transportation allocated funds in last year's
appropriations bill which in fact we voted on and it became law and the
funds were allocated.
What is being called a snafu here is that based on the best data they
had last year, the Department of the Treasury made an estimate, and if
they had data that is now available 1 year later they would have made a
different estimate and the allocation formula would have been
different. But that is not a snafu. Basically, they were using the best
data they had last year just as we are using the best data we have this
year.
My point is that it is distinctly possible, in fact probable, likely,
that next year when we have 1995 and 1996 data we will find the
allocation used for 1997 would have been different had we had this
data, which we did not have this year.

[[Page S9273]]

The point being each and every year we can go back and second-guess
last year's estimate based on data that the estimators did not have. I
would be able, if we set this principle, to offer an amendment to next
year's appropriation based on actual data that will be available next
year which is not available this year to say that the formula this year
would have been different had we had another year of data. And it will
be. Invariably it will be.
There is no mistake in the current allocation based on the newest and
best estimate we have, but what the Senator from Montana is saying is
that the estimate made last year was made on the data which was
available then. I do not know that he is arguing a conspiracy by the
Treasury. I hear the word snafu, pressed the wrong button, but I do not
have any data to substantiate that, and I would be willing to look at
it if there is data. But based on everything they knew, the Treasury
made an estimate last year, and on the basis of that estimate we
allocated money.
Based on everything they know this year, they made an estimate, and
we are allocating money again. But if we are going to go back and
change this year's formula based on new data that was not available
last year, why can we not do that next year and the next year and the
next year?
The whole purpose of this system is to take the best data available
and allocate funds on the basis of it. That is what, based on all the
information that I have, the Department of the Transportation did. And
relying on this data--and the law requires the Department of
Transportation to rely on this data--they allocated funds. Now the
Senator is saying a year later that if we had had new data that has
since become available, the allocation would be different. He is right.
But the point is the same will be true next year about this year. The
same will be true year after next about next year. If we are going to
get into a situation where every year we are going to look back at the
last allocation based on data that was not available when the
allocation was made, we are going to be able to reestimate everything.
Was it a snafu that the estimate they had last year based on the best
data turned out not to be right when they got the final data? I do not
think it was a snafu. It was an estimate based on what they had. It is
no more a snafu than the data we are using this year, when next year we
have an additional year, will clearly be different. And by the same
logic I could stand up here and say it was a snafu last year. Based on
the data the Treasury had last year, we had an allocation of money, but
now 1 year later with actual data they did not have, I want to go back
and reestimate the allocation.
I think we are inviting chaos if we go down this road because we
could do it every single year. Was the estimate last year more
inaccurate than the estimate this year will turn out to be? I do not
know. Maybe it was. Maybe it will be less inaccurate than the estimate
this year will turn out to be. The point is, the law requires the use
of the best available data. Based on everything I know, that was done.
The Senator talks about snafus, about pushing the wrong key on the
computer. I do not know about any of those things. I see no
documentation whatsoever. All I have seen documentation on is that,
based on the best data they had, the Treasury made an estimate. We
allocated funds on it. Now that they have another year of data, if they
were making the estimate today, it would be different.
That is like saying, if I am predicting what is going to happen next
year, that it is a snafu that I have imperfect knowledge relative to
what I will have next year after I have lived out the year. I do not
call that a snafu. I simply call it having to make decisions on the
best data that is available.
I think this is a fundamental issue. I think many of my colleagues
started this debate saying there was a mistake made in last year's
estimation because they did not have data which we now have. It just so
happens, in that mistake, 31 States gain and 19 States lose. The point
is the exact same facts will exist next year and the next year and the
next year and the next year, and maybe it will be other States who will
gain next year and other States who will lose. But we are creating a
chaotic situation if we are going to try to go back each year and redo
last year's formula, based on data that was not available last year.
That is why, while this is not be-all and end-all of the planet, this
is a bad principle and it is a principle we are going to end up
refighting every year.
In fact, if we start down this road, we might as well have a 1-year
lag of collecting the money to allocate it because we are going to end
up, every single year, rewriting this formula. Because every Senator is
going to check the allocation based on the new data that will be
available next year, reestimate the allocation this year, and all those
who will gain are going to stand up, as our dear colleague is saying,
and say, ``There was a snafu. Somebody pushed the wrong computer key.
Somebody made a mistake. They predicted the future and the future
turned out to be different, and therefore we ought to go back and
correct that.''
The point is, that is not how the system works. If we are going to do
that, we are going to create chaos, and that is why I hope we will not
do it.
Mr. MACK. Mr. President, I am here today to oppose the amendment
being offered even though my State, Florida, would marginally benefit
from its passage.
This amendment is said to correct a bureaucratic error--a mistake
which resulted in many donee States receiving for 1 year less than what
they thought they were entitled to under the law.
Well, it is extremely hard for me to be sympathetic to this argument.
I know a good number of States--donor States--who, for the last 5
years, feel they got far less than that amount to which they were
entitled. They would call the formulas enacted in law during ISTEA a
mistake.
I believe the amendment now being considered appropriately highlights
the problems that result from a muddled, inefficient, and overly
bureaucratic Federal highway program.
So, not only is it my intention to oppose this amendment tonight, but
it is my intention to be a leader in the fight next year to move our
Nations' transportation program away from the Federal highway program
that exists today.
It is high time to harness the ingenuity of State officials and local
governments, the entrepreneurialism of private industry, and the
strength of the financial markets to enhance the Nation's
transportation infrastructure. It is time to recognize that the
national interest may be best served by allowing States to assume the
primary role in transportation uninhibited by Federal mandates, the
redistribution of States gas tax dollars.
I look forward to working with my colleagues next year to return the
primary role in transportation to our States.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BAUCUS. 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. BAUCUS. Mr. President, I do not want to prolong this either, but
I would much rather read facts into the Record than sit here in a
quorum call. So I will correct the misinformation we just heard from
the Senator from Texas.
The Senator from Texas is trying to imply this is an error in
estimating the highway trust fund, it is not a bureaucratic error. I
would like to address that by reading the memorandum to the chairman of
the committee from the Department of the Treasury, dated today.
There is a little bit of bureaucratese in here, but, if you listen
closely, you can tell this is not an estimate problem, it is a
bureaucratic problem. I will read from the beginning.

In fiscal year 1994, an accounting error, described in
greater detail below--

It did not say an error in estimating, in estimating receipts. It
says ``an accounting error.'' An accounting error was made--

Resulted in a $1.590 billion misallocation of excise taxes
against the Highway Trust Fund. . . .

Then it says:

This misallocation of excise taxes was corrected in Fiscal
Year 1995.

[[Page S9274]]

Then going on:

The initial transfer of receipts to the Highway Trust Fund
is based upon monthly estimates provided to Financial
Management Services . . . by the Office of Tax Analysis.
Subsequently, FMS uses the IRS Quarterly Certification of
``actual'' liability to adjust the Highway Trust Fund balance
for any difference between accounts initially transferred and
``actual'' quarterly liability. This adjustment was referred
to as the ``Correcting Adjustment.''

More importantly:

At the request of OTA, [that is the Office of Tax Analysis,
in the Treasury] the format of the IRS Quarterly
Certifications used to make correcting adjustments to the
Highway Trust Fund was changed.

I will repeat that statement.

At the request of OTA, the format of the IRS Quarterly
Certifications used to make correcting adjustments to the
Highway Trust Fund was changed.

The format was changed.

This [format] change led to a misinterpretation of the
information provided to FMS on the IRS Quarterly
Certification and resulted in a misallocation of excise taxes
between the Highway Trust Fund and the General Fund in Fiscal
Year 1994.

The problem is not a miscalculation of the estimates. It was a
mistake made because of a change in format. Somebody over there did not
understand the new format and took the data, the correct data, but put
it in the wrong account.

This misallocation of excise taxes was corrected in Fiscal
Year 1995, debiting the General Fund and crediting the
Highway Trust Fund in the amount of $1.590 billion.
Procedures have been implemented to assure that future
adjustments to the Highway Trust Fund occur in an accurate
and timely manner.

This has nothing to do with what the right estimate is, nothing at
all. This has everything to do with just a bureaucratic mistake in
misinterpreting a new format, that is all this is. It is very clearly a
clerical, bureaucratic error. It is not an error in estimating tax
receipts, not at all. It is an error made in computing the adjustments
that were made between the Highway Trust Fund and the General Fund.
That is all this is, stated clearly by the Department of the Treasury.
That is the technical argument.
The basic argument, Mr. President, is: Here we are. This is the end
of July. This is 1996. What special is going on right now in America?
It is the Olympics. In the world? It is the Olympics down in Atlanta,
where people compete fairly. They compete according to the rules, and
there are winners and losers, according to the rules. Certainly
Senators, if they want, can take advantage of a mistake, take advantage
of something that is unfairly given to them at the expense of somebody
else. Or they can live by the rules, live by the rules and not take
advantage of an ill-begotten gain but rather say, yes, that is not
fair, let us correct this, when the real battle on highway allocation
of trust funds is next year when Congress takes up the transportation
bill.
That is what this is all about, very simply, very plainly. Are we
going to correct a mistake or are those Senators who are enriched by
the mistake going to take advantage of that mistake? Or are they going
to say, yes, a mistake is made, let us correct the mistake and let us
go on.
I made a point earlier, which I think is one worth remembering. That
is, if this mistake is not corrected, it is going to sour the debate
next year when Congress takes up the highway bill, because Senators are
going to know the debate begins not with what it was supposed to be,
not as was determined by the 1991 highway bill. Rather, it would be
based as a result of a bureaucratic snafu, and I do not think we want
that. I think we want to correct the mistake.
I urge my colleagues to just basically correct the mistake and get
ready for the battle next year when we take up the highway bill in
earnest, because that is the proper place to do all that.
Mr. President, I ask unanimous consent the letter, dated July 31,
1996, from Linda Robertson to Senator Chafee, be printed in the Record,
and I yield the floor.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

Department of the Treasury,

Washington, D.C., July 31, 1996.
Memorandum to: Senator John H. Chafee, Chairman, Environment
and Public Works Committee, U.S. Senate, Washington, DC.
From: Linda L. Robertson, Assistant Secretary, (Legislative
Affairs and Public Liaison).
Subject: Correcting the misallocation of excise taxes between
the highway trust fund and the general fund.
In Fiscal Year 1994, an accounting error, described in
greater detail below, resulted in a $1.590 billion
misallocation of excise taxes, against the Highway Trust Fund
(HTF). This misallocation of excise taxes was corrected in
Fiscal Year 1995.
The initial transfer of receipts to the Highway Trust Fund
is based upon monthly estimates provided to Financial
Management Services (FMS) by the Office of Tax Analysis.
Subsequently, FMS uses the IRS Quarterly Certification of
``actual'' liability to adjust the Highway Trust Fund balance
for any difference between amounts initially transferred and
``actual'' quarterly liability. This adjustment is referred
to as the ``Correcting Adjustment.''
At the request of OTA, the format of the IRS Quarterly
Certifications used to make correcting adjustments to the
Highway Trust Fund was changed. This change led to a
misinterpretation of the information provided to FMS on the
IRS Quarterly Certification and resulted in a misallocation
of excise taxes between the Highway Trust Fund and the
General Fund in Fiscal Year 1994. This misallocation of
excise taxes was corrected in Fiscal Year 1995, debiting the
General Fund and crediting the Highway Trust Fund in the
amount of $1.590 billion. Procedures have been implemented to
assure that future adjustments to the Highway Trust Fund
occur in an accurate and timely manner.

The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, one of the things I always try to tell my
children is you should never debate about facts. You go look up facts,
you debate about ideas, you debate about what they mean.
Our dear colleague from Montana just quoted from correspondence that,
so far as I can determine in talking to the majority and the minority
side, no one else has.
What I would like to propose is this--and I would like to have a copy
of it. What I would like to propose is that we set this amendment aside
to give all of us an opportunity to talk to the Treasury Department in
the morning and ascertain exactly what the facts are so that we can
debate tomorrow where we all are dealing with the same facts.
We are all, obviously, entitled to our ideas. Jefferson once said
good people with the same facts are going to disagree. But what I think
is important that we do is that we be certain that we are all dealing
with the same facts. What I will promise my colleague is that I will,
obviously, read this memo, and I will talk tomorrow to the Treasury
Department to ascertain exactly what happened.
All of the documentation that I have that was made available to my
office by the Department of Transportation shows that this simply was a
best available estimate, which, obviously, is different now that we
have additional data, as you would expect it to be. But I would
certainly be willing to look at additional information from the
Treasury Department. I think probably the best thing to do is to set
this amendment aside and give us all an opportunity to talk to the
Treasury Department to try to ascertain what the facts are. That would
be my suggestion.
Mr. BENNETT. 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. BUMPERS. 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. BUMPERS. Mr. President, to say that it is a complex issue is an
understatement. I am not sure everybody on this floor fully understands
what we are debating. But let me tell you what I do understand about
it, and I welcome the comments of either of the managers or the author
of the amendment.
We appropriate trust funds 2 years after we receive them. For
instance, whatever we took in in the trust fund in 1994 is actually
allocated to the States in 1996. That is my understanding. As I say, I
invite anybody to correct anything I say. I just want everyone to
understand what we are talking about.
So whatever the Treasury Department takes in in gasoline taxes, which
is called the trust fund, in 1994, is allocated for use in 1996. So in
1994, apparently the Treasury Department made an error and took in $1.5
billion more

[[Page S9275]]

than they said they were going to have, and rather than try to correct
the error at the time it was made, they said, ``Well, we will just save
this until next year. We'll put it in the 1995 allocation.''
Now, bear in mind that when you are allocating money in 1995, you are
talking about money that the States are going to get in 1996, simply
because we appropriate money a year in advance.
Mr. BAUCUS. Mr. President, if I might, a slight correction, 1995 is
in 1997.
Mr. BUMPERS. Please feel free to interrupt.
Mr. BAUCUS. The 1995 determination affects the 1997 allocation, 2
years later.
Mr. BUMPERS. Say that again, please.
Mr. BAUCUS. The allocation made to States is determined by the
receipts received 2 years earlier. So 1994 determines 1996, and the
amount in the trust fund in 1995 determines 1997.
Mr. BUMPERS. You appropriate the money in 1995 for 1996, don't you?
Mr. BAUCUS. Yes.
Mr. BUMPERS. That is correct?
Mr. BAUCUS. That is correct.
Mr. BUMPERS. That is right, you allocate it 2 years later than the
Treasury Department receives it. But the basic problem here is that the
Treasury Department underestimated by $1.5 billion 1994 receipts.
So when it came time to appropriate the money from the trust fund in
1995, it was appropriated, not realizing the fact that they had $1.5
billion more than they thought they had. So this year, 1996, the States
got an allocation of 1994 trust funds that was $1.5 billion short--$1.6
billion, to be precise.
Here is my problem. My State tells me that by the time the $1.5
billion error had been discovered, everybody knew it, and the great
State of Arkansas got less money in 1996 than we were entitled to, and
we were told that we would get it made up in 1997, which is the bill we
are debating here tonight, the 1997 bill.
So the 1997 money is being allocated here this evening and, lo and
behold, an amendment is offered that would cause my State to be about
$6.5 million short. Now, that is not a lot of money to a very many
people. However, in the State of Arkansas, $6.5 million is a pretty
good hunk of change.
So Arkansas got less money in 1996 than we were supposed to get. We
did not get our share of that $1.5 billion. And now they are taking it
away from us again in 1997.
So, as I say, that is my understanding so far. And on that basis, of
course, I do not have any choice but to vote against the Senator from
Montana's amendment. I am hoping that a lot of other people will do
likewise.
I also note that the managers of this bill would like to get this
thing done tonight so they can get out of here. I do not want to slow
things up. But I would like, when all this conversation ends over here,
to have somebody to comment on the things I have said, either refute
the statement I made that we got less money in 1996 than we were
supposed to get, or that we got more. But you should not penalize my
State in 1997 and give us less money if we got penalized last year.
That is what we call a double whammy. And it is not right and it is not
fair.
I yield the floor and 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. HATFIELD. 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. HATFIELD. Mr. President, at 7:45 I will make a motion to table
the Baucus amendment and ask for the yeas and nays at that time. I say
that at this point in order to give Members due warning and opportunity
to return to the Hill. And I say this. We will make no other
compensation for people being off the Hill until we finish this bill
tonight.
Everybody ought to be alert to the fact we may have votes at any
time, and we are not going to delay a vote henceforth. But this vote
will be called at 7:45. I, at that point, will make a motion to table.
Mr. President, I ask unanimous consent that I be recognized at that
time to make that motion.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. HATFIELD. I thank the Chair and 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. HATFIELD. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________