[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[House]
[Pages H9839-H9862]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONFERENCE REPORT ON H.R. 3448, SMALL BUSINESS JOB PROTECTION ACT OF
1996
(Mr. SOLOMON. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 503 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 503
Resolved, That upon adoption of this resolution it shall be
in order to consider the conference report to accompany the
bill (H.R. 3448) to provide tax relief for small businesses,
to protect jobs, to create opportunities, to increase the
take home pay of workers, to amend the Portal-to-Portal Act
of 1947 relating to the payment of wages to employees who use
employer owned vehicles, and to amend the Fair Labor
Standards Act of 1938 to increase the minimum wage rate and
to prevent job loss by providing flexibility to employers in
complying with minimum wage and overtime requirements under
that Act. All points of order against the conference report
and against its consideration are waived. The conference
report shall be considered as read.
The SPEAKER pro tempore (Mr. Collins of Georgia). The gentleman from
New York [Mr. Solomon] is recognized for 1 hour.
Mr. SOLOMON. Mr. Speaker, I see the distinguished gentleman from
Boston, MA [Mr. Moakley] sitting over there. It seems like only
yesterday that we spent all day together, and all night too. I yield
him the customary 30 minutes, pending which I yield myself such time as
I may consume. During consideration of this resolution, all time
yielded is for debate purposes only.
Mr. Speaker, House Resolution 503 is a typical rule for a conference
report. It waives all points of order against the conference report,
and it provides that the conference report shall be considered as read
as usual.
Mr. Speaker, I am so pleased that the House and Senate conferees were
able to put together this bipartisan bill. They put partisanship behind
them and reported a bill that raises the minimum wage in a responsible
way by offsetting the additional costs to small business through tax
relief, and is so important.
As one who ran a small business before coming to this body, I am
particularly pleased that we are making a much needed effort to give
some tax relief to hard working people who run these small businesses
and provide most of the new jobs.
The small business provisions included in the conference report
include an increase in the amount small businesses can expense, which
will make it easier to start up and expand a small business. The
provisions also include modifications of the rules governing subchapter
S corporations, which is the way that many small businesses get along,
and raise capital.
For example, it will increase from 35 to 75 the number of
shareholders an S corporation may have, and the bill would permit S
corporations to have wholly owned subsidiaries as well.
The small business relief also include much-needed pension
simplification provisions, which are intended to strengthen and to
encourage retirement plans for employees of small businesses. There are
several other provisions designed to encourage and protect jobs as
well.
Mr. Speaker, I represent a rural district that has many, many small
businesses. They are an important part of the economy in my district
just like some of the large Fortune 500's are an important part of the
economy of the country. I know how difficult it is to start up and
maintain a small business. Many small businesses fail before the first
year is even over, and that is why they need to be able to utilize all
of their operating capital early.
But even with all the difficulties, small businesses create more jobs
than any other type of business in America.
[[Page H9840]]
In fact, small businesses account for almost 75 percent of all new jobs
created every single year in this country. That means jobs for kids
coming out of high school, and for young men and women coming out of
college. So, Mr. Speaker, these tax provisions do not just help small
businesses, they help everyone by encouraging job growth.
But, Mr. Speaker, that is not all. This conference report also
includes provisions that increase the availability of spousal IRA's to
help families plan for their retirement. And the bill includes needed
extensions of several expiring tax provisions. One of those provisions
is the employer-provided educational assistance tax credit, which
allows employers to deduct up to $5,250 for educational expenses for
their employees. This is a tax credit that helps the employer, and it
certainly helps those employees that are struggling to advance up the
promotion ladder in life.
This conference report also would replace the expired targeted tax
job credit with a new work opportunity tax credit. This credit will
encourage businesses to hire individuals who are long-term welfare
recipients that might otherwise not be employed. It is going to help
them. It is going to help lift them up by the bootstraps. Certain
disabled workers are going to have the same opportunity. That is why
this is such an important bill.
Finally, Mr. Speaker, this bill contains something I have advocated
and encouraged for so long: An adoption tax credit. The conference
report provides a tax credit for up to $5,000 of qualified adoption
expenses. The gentlewoman from Ohio [Ms. Pryce] is going to speak about
this in a few minutes because this includes her language, and I commend
her for the great job she has done in getting this written into this
bill, which is going to become the law of the land.
Now, I know that this provision is not germane to a bill that raises
the minimum wage and offers small business tax deductions to protect
jobs, but the adoption tax credit has gotten bogged down in politics in
the Senate and probably would not have passed Congress this year unless
the gentlewoman from Ohio [Ms. Pryce] and others had not been able to
work it into this legislation. So I feel that this provision is so
important that I am very glad that the conferees decided to include it.
In conclusion, Mr. Speaker, I would urge support of the rule we are
considering now, and I urge support of the conference report so that
the President can sign this important piece of legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume
and I thank my colleague and dear friend from New York, Mr. Solomon,
the honorable chairman of the Committee on Rules, for yielding me this
time.
(Mr. MOAKLEY asked and was given permission to revise and extend his
remarks.)
Mr. MOAKLEY. Mr. Speaker, on behalf of the 4.2 million Americans who
work for the minimum wage, I want to say: it's about time.
The minimum wage in the United States has not been raised in more
than 6 years.
For that reason, I congratulate my Republican colleagues for
recognizing the importance of this increase today and I am proud to
stand in support of this rule, making the bill in order.
Mr. Speaker, the value of minimum wage is at a 40-year low. A 40-year
low.
Today, people who work for minimum wage, people who work very hard to
support their families and try to stay off of welfare, earn only $8,500
a year. That is not enough, Mr. Speaker, to support a family.
In fact it is $3,800 below the poverty line for a family of three.
That's right, Mr. Speaker. People who work very hard in full time
minimum wage jobs earn almost $4,000 less than people at the poverty
level.
Yesterday we voted on a Republican welfare bill which President
Clinton has said he will sign. That bill made significant changes in
our Nation's welfare system. But I would argue, Mr. Speaker, that this
bill we are doing today is the real of welfare reform.
Because, Mr. Speaker, instead of haggling over which benefits the
Federal Government should provide to support children, as we were
yesterday, we are working on making it easier for parents to support
children themselves without the Federal Government. And that's the way
it should be.
With this increase in the minimum wage, working parents will come
closer to having jobs that enable them to support their families.
Instead of working full time for only $8,500 a year, these parents
will get a 90-cent-an-hour raise. It may not sound like much but to
these 4.2 million people, it's a very good start.
It used to be, Mr. Speaker, that only one parent had to work to
support a family. A father could go to work and earn a good living
which would provide food and shelter and clothing for his family. But
not anymore.
The earning power of a lower income worker in the United States has
declined to the point that a person working full time for the minimum
wage earns below the poverty level.
A lot of families chose welfare over work because it is absolutely
impossible to make ends meet otherwise.
That's why this bill, this small increase in the minimum wage, is so
important. Because it will make it just a little bit easier for lower
income families to make those ends meet.
It will bring the minimum wage closer to what it should be: A safety
net for primary earners and the best kind of welfare reform this
Congress can enact.
I want to add, Mr. Speaker, that my home State of Massachusetts
already has a minimum wage of $4.75. I think we did the right thing by
raising the minimum wage in Massachusetts and we are doing the right
thing today by raising it even further for the entire country.
Mr. Speaker, for the last year and a half my Democratic colleagues
and I have been fighting for a minimum wage increase--if my Republican
colleagues had listened to us earlier--12 million Americans would have
gotten a raise by now.
But Mr. Speaker, they have joined us now. I am pleased to welcome
them to this side of the issue and I urge my colleagues to support this
rule to give hard working Americans a long overdue raise.
Mr. Speaker, I reserve the balance of my time.
Mr. SOLOMON. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from Columbus, OH. [Ms. Pryce], one of the very, very
valuable members of the Committee on Rules. She has a major role in
this legislation.
Ms. PRYCE. Mr. Speaker, I thank the gentleman from New York [Mr.
Solomon], my friend and the distinguished chairman of the Committee on
Rules, for yielding me this time, and I appreciate having the
opportunity to work with him on some of the underlying legislation and
in managing this important rule.
Mr. Speaker, as the chairman described, House Resolution 503 has the
customary 1 hour granted for debating conference rules in the House,
and I urge all my colleagues to give it their full support.
Mr. Speaker, the conference report on the Small Business Job
Protection Act contains many very important elements. First, we provide
for an increase in the minimum wage, a provision fought so hard and
passionately for by the gentleman from New York, Mr. Quinn, my
Republican colleague from New York, Mr. Quinn.
The report also provides for a series of tax incentives designed to
make it easier to start up and then expand small businesses, and also
the numerous provisions outlined by the gentleman from New York [Mr.
Solomon] at the outset of his remarks.
Our Nation's economic health depends in large part on the success of
America's small businesses. They are the engine of economic growth,
creating nearly 75 percent of all new jobs in the United States in any
given year, but we cannot expect them to survive, much less prosper
given the regulatory and tax burdens imposed on them under current
laws. That is why the tax incentives contained in the conference
agreement are so important to the future of small business and jobs in
this country. Together, they will provide small business owners and
entrepreneurs alike with the financial tools they need to grow and
compete and to create the kind of stable and lasting jobs that the
American people need.
Mr. Speaker, the third, and to me the most personally significant,
element of
[[Page H9841]]
the bill is made up of the provisions designed to remove barriers that
currently discourage hundreds and hundreds of caring families each year
from seeking to adopt children.
{time} 0930
As many of my colleagues know, I am an adoptive parent myself. Since
coming to this body, I have worked hard to find ways to make it easier
for parents to adopt, especially young parents with moderate incomes.
While progress is being made, the high costs associated with the
adoption process, which can be as much as $15,000 or more in many
cases, still pose very significant obstacles.
To help families defray these costs, the conference report provides a
valuable tax credit of up to $5,000 for qualified adoption expenses,
and it recommends the necessary offsets to pay for the credit.
In addition, the conference report seeks to remove barriers to
interracial adoptions by prohibiting a State or any other entity that
receives Federal assistance from denying or delaying a child's adoption
because of the race, color, or national origin of the child or the
prospective parents.
Hopefully, this change will make it possible for more children to
find their way into loving, permanent homes regardless of the race of
the family seeking to adopt.
Mr. Speaker, these pro-adoption provisions were originally included
in legislation passed by the House earlier this year, but unfortunately
the other body has not acted as quickly on this important measure. I
congratulate the gentleman from Texas, Chairman Archer, and the
conferees for ensuring that these beneficial pro-family provisions are
enacted into law this year.
Mr. Speaker, this week we have passed major legislation to reform
welfare and to expand access to affordable health care coverage. With
this legislation, we will add to those victories by easing the
financial burden on small businesses, by lifting the barriers that
discourage more families from seeking to adopt. I urge my colleagues to
support this fair rule and to vote for the conference report.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from New
Jersey [Mr. Pallone], a very active Member dealing with this matter.
Mr. PALLONE. Mr. Speaker, once again I want to point out that the
Democrats can truly declare victory this morning with this minimum wage
bill finally being brought to the floor. But two points need to be
made. One is that the Republicans consistently over the last 2 years
have opposed this minimum wage increase and, second, that this really
does impact a lot of real people. It is not something that is pie in
the sky that we are just talking about here that does not mean anything
to the average Americans.
Democrats have been trying to pass this minimum wage increase since
February 1995, when President Clinton first proposed the bill and
Democratic leader Gephardt introduced it into the House. But it took
over a year to force the Republicans into acting. The Republican
leadership remained strongly opposed to the minimum wage bill, and
Republicans marched in lockstep behind them voting five separate times
to kill Democratic efforts to bring it up.
Many of us were here many times trying to bring this up but we were
opposed by the Republican leadership. Even when the moderate
Republicans finally started to cave in, faced with polls showing that
over 80 percent of the Americans supported this bill, Republican
leaders continued to try to kill the bill. They offered amendments that
would have gutted the bill in a failed attempt to appease the business
lobby and blunt the Democratic initiative.
Mr. Speaker, let me just say we are talking about real people, over
10 million Americans that are going to be positively impacted by this
legislation. Most minimum wage earners are not teenage children of the
affluent. According to the Bureau of Labor Statistics, of current
minimum wage earners, two-thirds are adults, with over 50 percent being
26 or older, while 62 percent are women.
These workers have to work almost twice as many hours just to live
near the poverty level for a family of four. They work hard, they
provide what they can for their family and they deserve the opportunity
to earn a livable wage.
Mr. Speaker, yesterday and this past week both parties have been
talking about welfare reform. We passed a good welfare bill. But reform
is useless if we do not do something to improve wages. We need to
reward hard work and make it less enticing to collect welfare. This
bill will accomplish that. I urge support for the conference report.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume.
I have been around here a long time. It is not that politics is
wonderful. It is no wonder that the American people hold us in such low
esteem when they see that in every other speech we get up here and
engage in partisan attacks. I long for the old days when maybe there
was no television coverage, and we came on this floor and we hammered
out the issues and we did not have this partisan bickering.
The man I am going to introduce right now is a man I have never heard
utter one single partisan word on this floor. He is a standup
Congressman. If it were not for him, this legislation would not be on
the floor today. His name is Jack Quinn from Buffalo, NY.
Mr. Speaker, I yield such time as he may consume to the gentleman
from New York [Mr. Quinn].
Mr. QUINN. Mr. Speaker, I thank the gentleman for yielding time to me
today.
Mr. Speaker, I rise in support today of the rule and also rise in
support of the Small Business Job Protection Act. I also rise as a
Republican Member of this body for almost 2 terms now who has never
opposed the minimum wage and was pleased to join a number of Republican
colleagues of mine to finally get this bill to a vote on the floor.
This has been a historic week in our House and in Congress. On
Wednesday, the House voted to end welfare as we know it, and just last
night we passed legislation to make health insurance more accessible to
Americans who get sick or lose their jobs.
Today the House is considering legislation to raise the minimum wage
and at the same time provide necessary tax incentives to small
businesses. Mr. Speaker, in April, about the middle of April, I was
proud to begin this process by submitting the bringing a bill to the
floor that would have raised the minimum wage. Today, now as we take
another historic step in raising the minimum wage for over 4 million
Americans, it is an opportunity for me to thank the people who worked
so hard in this effort.
I want to thank those sometimes-courageous 23 other Republican
Members who joined me in my minimum wage increase bill. I also wanted
to thank the Republican leadership who continued to meet with me and
the others, who continued to work with us, our group, as we found ways
to bring the bill in an acceptable manner to this floor.
Time after time during that often heated debate, there were times
when it was not acceptable to one group or another; but in the end,
leadership worked with Members who felt a need to bring this bill to a
vote and we did. What we found out was that we thought was going to
happen all along, the minimum wage increase in the House passed
overwhelmingly with bipartisan support.
Mr. Speaker, it is also an opportunity for me today to thank my
Democrat colleagues on the other side of the aisle who also, once we
had the bill in acceptable form on the floor, joined in that bipartisan
fashion to pass the bill and, at the same time, I believe, sent a
message to the Senate, our colleagues across the building, that this
was important legislation and that the House was prepared to act in a
bipartisan way to get them a bill, to get a bill that the American
people needed, the American people who had not seen the minimum wage
increase in almost 7 years. I think we need to thank all of those
Members who helped us get to this day today.
I believe, Mr. Speaker, that Americans who work a 40-hour work week
ought to make a wage that they can live on. A lot of rhetoric has taken
place in the well, a lot of rhetoric has taken place back and forth in
these past 3 months since my bill was introduced. I think we are here
today, again, on an historic event, to say that we are going to give
those workers, the men and women of this country, a
[[Page H9842]]
raise. Today America will get the raise it deserves.
It is through the hard work of a lot of Members in this Chamber and
in the Senate. I stand here before all of our colleagues today asking
support for the rule, support for the conference report and also urge
the President to sign this bill as quickly as possible to give
Americans the raise they deserve.
Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentleman from
Ohio [Mr. Traficant], the Garrison Keillor of the House of
Representatives.
(Mr. TRAFICANT asked and was given permission to revise and extend
his remarks.)
Mr. TRAFICANT. Mr. Speaker, everybody is declaring victory. I would
like to declare a few facts today.
I am bipartisan, nonpartisan type of guy. I rise to indict both
parties for subsidizing China and Japan, Mexico, and Canada with
another continuing record trade deficit. Japan is over 60 million;
China is approaching 40. And the analysts say in 5 years China will
surpass Japan.
Anyway, I do not know, I do not think anybody is listening, but there
is an old saying, God loves poor people. They say God must love poor
people, he made so many poor people, and there are so many working poor
people. They deserve a minimum wage increase. I support the rule. I
support the bill. I want to commend Mr. Moakley and Mr. Solomon, great
job they have done over the years. Mr. Quinn fought hard from the
Republican side. I want to commend him.
I just want to remind Members, between 1991 and 1993, 13 million
Americans lost their jobs. As I speak today, 36 percent are still
unemployed; 18 percent took pay cuts less than 50 percent of what they
previously made; 10 percent are working for 75 percent less pay than
they mad 5 years ago. If you do your math, 60 percent of those 13
million people, 7.8 million people are worse off today than they were 5
years ago. So, yes, I support a minimum wage increase. But my
colleagues, a minimum wage job is still the bottom rung of the ladder.
If we do not resolve our trade deficits, we will not balance our
budget deficits. By God, we are going to have a Communist party fund
raiser on the east lawn of this White House.
I thank the gentleman for the time.
Mr. SOLOMON. Mr. Speaker, I yield 3 minutes to the gentleman from
Illinois [Mr. Fawell].
(Mr. FAWELL asked and was given permission to revise and extend his
remarks.)
Mr. FAWELL. Mr. Speaker, I thank the gentleman for yielding me the
time.
I rise in support of the rule and I rise in support of the
legislation, although with some doubts in reference to the minimum wage
question. I have supported it before. I plan to support it again. There
are many other fine provision in the bill: the portal-to-portal
provisions, for instance; a lot of tax matters that are of importance
to small business people.
I do, however, want to also apprise my colleagues of the fact that
unfortunately there was a provision that was added in the Senate
involving a Supreme Court case called the Harris Trust case back in
December 1993, which involves the ERISA statute, involves pensions and
indeed is, I think, one of the bad features of this bill.
As editorial in the Chicago Tribune of last week, entitled Reckless
Attack on Pension Plans, tells the story. There are about anywhere from
$300 to $700 billion held by the life insurance industry in this Nation
for the benefit of pension plans. That is, they are deemed to be under
the ERISA statute.
That statute requires that those assets are held exclusively for the
benefit of the private pensions of America. But there has been a big
argument about this and the life insurance industry has said they have
a right to commingle those funds with their own assets so they did so
for 20 years. Then the Supreme Court said, no, you are wrong. You
cannot do that. You have to have separate accounts for these funds that
belong to the pension plans.
This legislation unfortunately, which is a part of this minimum wage
bill that is not germane at all, basically eliminates the U.S. Supreme
Court case entirely and immunizes, the life insurance industry for all
past misconduct in violation of ERISA going back to 1975. If that is
not bad enough, it also goes into the future, and immunizes the life
insurance industry for any wrongs it may do, including even civil fraud
and self-dealing up to July 1, 1999.
Then, on the basis of some changes that we were able to effect in
conference, then the traditional fiduciary standards of ERISA will be
reinstituted but only in the future, on July 1, 1999. So, this is still
a very, very unfortunate piece of legislation. I think a lot of us are
going to consider that we will have to introduce legislation to rectify
it, to repeal it.
{time} 0945
We cannot allow something like this, when you are talking about
something like $700 billion of pension funds which are going to be
continually commingled in the assets of the life insurance industry in
this Nation. That is not right. I simply wanted my colleagues to know
about this.
Mr. Speaker, I rise to support this legislation overall. I support
raising the minimum wage, with the conditions included in the
legislation, and I support the small business simplification provisions
of the bill. Thus, I will vote ``yes'' on the conference report, and,
as a House conferee on the bill, I signed the conference report on
title II.
I, however, continue to object to one provision that was originally
added to title I by the Senate which will shield the insurance industry
from suits arising from the Supreme Court Harris trust case, and
seriously weaken the integrity of ERISA which has protected pension for
more than 20 years. While through intense negotiations, Mr. Goodling
and I were able to make some improvements to the Senate-passed Harris
Trust language--and our amendment was adopted by the conference--I
still must object to this language being included in this bill. For the
record, I would like to explain why this provision should not be
included in this bill.
Those who manage and invest retirement funds have been subject to the
wise fiduciary standards of ERISA--the Employee Retirement Income
Security Act--for more than two decades. ERISA overhauled Federal
pension law in 1973 after Congress found many loyal, long-term
employees weren't getting the retirement money they were promised under
their pension plans. Most important, ERISA makes sure those in control
of your money are held to the highest standard of conduct--that they
manage and invest your money under a duty of complete loyalty to you.
Incredibly, this crucial standard of conduct--the backbone of our
pension system--would be eroded by the legislation we are passing today
as it applies to hundreds of billions of retirement dollars held by
insurance companies. When the Senate passed their version of the
minimum wage and small business tax bill, tucked within the bill was a
provision exempting from ERISA's fiduciary standards the at least $300
billion the industry holds in its general account contracts sold to
pension plans. I can only assume the Senate, in passing this
legislation, did not understand the implications for our retirement
system.
The Senate bill overturns a 1993 Supreme Court decision, John Hancock
Mutual Life Insurance versus Harris Trust, which conformed what the
insurance industry has known for hears--that these fund are in fact
subject to the ERISA fiduciary standards put in place to protect
America's retirees. Before the Court's decision, insurance companies
had mistakenly relied upon an unrelated Department of Labor
pronouncement which they claimed exempted these general account
contracts from the traditional protections of ERISA. The insurance
industry has been lobbying Congress for 20 years for the sort of change
they're getting--clear evidence they knew ERISA applies to these
assets.
Not only would this bill give the insurance industry a retroactive
pardon for all past misconduct in handling these retirement dollars--
even willful violations--it would create a new, prospective, until
1999, fiduciary standard weaker than ERISA, and prevent pension plans
and participants--you--from suing under Federal law to recover your
money.
As chairman of the employer-employee relations subcommittee with
responsibility for ERISA matters, I strongly opposite letting this
provision become law. As groups outside Congress become aware of this
bill, opposition and outraged gelled.
The American Association of Retired Persons, acting on behalf of the
Nation's retirees, voiced its opposition, as has the Financial
Executives Institute, a group of pension plan sponsors with more than
$900 billion in assets--including BellSouth, Coca-Cola, Ford Motor Co.,
Motorola, and Procter & Gamble. Significantly, both the AFL-CIO and the
Teamsters have also sent letters to Congress opposing this insurance
industry bailout.
Ironically, President Clinton is out campaigning telling you how much
he wants to improve
[[Page H9843]]
your pension system while his Department of Labor is at the same time
supporting this serious weakening of pension protection. Is the
President unaware that this bill would excuse any misconduct, however
egregious, that's taken place over the past two decades, and would
weaken the protections retirees have under ERISA? And the Department of
Labor, which is supposed to be America's pension watchdog, is selling
out the retirement security of American workers. That anyone who cares
about the integrity of our retirement system could support his
unprecedented move to excuse past and future abuses to retirees defies
logic.
Perhaps most disturbing is the fact this provision has been attached
to the unrelated minimum wage bill and is being passed without a single
legislative hearing in the House or Senate. It has never been voted on
by any Member of the House and was not included in the House-passed
bill.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas, Mr. Gene Green.
Mr. GENE GREEN of Texas. Mr. Speaker, I rise in support of the rule
and the bill.
Mr. Speaker, today is a good day for our Nation's working people,
both men and women. What a difference a year makes. This Republican
majority Congress passes a minimum wage increase. The world has
definitely turned upside down. With the passage of this conference
committee report, working Americans will finally see an increase in
their wages. To again quote the late Senator from Texas, U.S. Senator
Ralph Yarborough, we are putting the jam on the lower shelf for the
little people to reach it. This is a day to celebrate.
But we should not forget the Republican attempts to stonewall,
derail, and defeat the increase. The American people brought the
Republican majority to this point, in some cases kicking and screaming,
with a few exceptions. My colleague, the gentleman from New York [Mr.
Jack Quinn], is to be commended for his leadership on this effort.
The credit should go to the American people, who made it absolutely
clear to the Republican leadership that they expected an increase in
the minimum wage. Eighty percent expected that. American workers
understand that the purchasing power of the minimum wage will soon be
the lowest in 40 years, and now they will make an additional $1,800 a
year in their pocket to spend. Let us stop talking about it. Let us
give the American people what they want and deserve, an increase in the
minimum wage. The best welfare reform is a job that pays a decent wage.
Mr. MOAKLEY. Mr. Speaker, it gives me great pleasure to yield 2
minutes to the gentleman from California [Mr. Miller], ranking minority
member of the Committee on Resources.
(Mr. MILLER of California asked and was given permission to revise
and extend his remarks.)
Mr. MILLER of California. Mr. Speaker, I thank the gentleman for
yielding time to me.
Mr. Speaker, I rise in strong support of this legislation. It has
been a long time coming, Mr. Speaker, to give the people of this
country a minimum wage increase, to give those who work so very hard,
sometimes at the lowest wages, with long hours and in difficult jobs,
to finally give them a pay raise.
Let us remember, though, that this minimum wage increase has been
fought tooth and nail by the Republican leadership. We had to have over
a dozen procedural votes before we could finally get the attention of
the Republican leadership on this legislation.
In the Senate they did everything they could to stifle the
consideration of this legislation. It was only because of the tenacious
nature of Senator Kennedy and Senator Daschle to bring the Senate to a
stall, to a stop, to a complete ending of business, before they could
get consideration. Only after the Senate did that did we see the
Republican leadership here concede that America was entitled to a
minimum wage increase.
Mr. Speaker, the fact is, these Americans have been entitled to this
minimum wage increase for many years. I want to commend our colleague,
the gentleman from Michigan [Dave Bonior], who came to this floor on
one vote after another and tried to force this issue. I want to commend
our colleague, the gentleman from New York [Jack Quinn], who finally
showed courage and separated from that leadership, and recognized the
need of people to have this increase in the minimum wage.
I also want to remember the gentleman from Texas [Mr. Armey], the
majority leader, who said he would fight this with every fiber of his
body, he would fight this and never allow this to happen. The American
people are about to win, and because of the persistence of the
Democratic leadership in the House and Senate, an increase is going to
happen for the minimum wage.
This is going to be an improvement for people's lives. This is going
to allow people to leave welfare. This is going to reduce our food
stamp contributions, our housing contributions, our other welfare
payments, because now employers will have to start paying people a
liveable wage and no longer have to subsidize unemployment.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
West Virginia [Mr. Wise].
Mr. WISE. Mr. Speaker, let me just say hallelujah, because when this
Congress started a year and a half ago, I would not have predicted this
day. There are a lot of things that I would have predicted would have
happened in this session of Congress, but an increase in the minimum
wage, the first legislated increase since 1989, I would not have
predicted.
The good news is that miracles do happen. The good news is that those
who say that they are going to fight a minimum wage increase with every
fiber of their being can often be proved wrong. This is a very
important day for West Virginians as well as Americans.
There are 112,000 payroll jobs in West Virginia that will see an
increase because of this minimum wage increase, going from $4.25 to
$5.15. That is roughly 17 percent of the payroll jobs in our State. It
means that the delay that people have been facing, in which $2 million
a week in payroll has been lost because there has not been a minimum
wage increase, that will no longer take place.
Yes, Mr. Speaker, I have heard the complaints of small business. I
appreciate them. I know many of our small businesses are struggling.
But there are also tax provisions that will assist them and that will
prove beneficial.
Additionally, Mr. Speaker, I think it has to be recognized that while
the minimum wage has stayed the same since 1991, the last increase, all
other costs of business have gone up. What about that minimum wage
recipient? Nobody has said anything at the grocery store about keeping
prices low because their wages have not gone up. Nobody said anything
at the utility about keeping prices low because their wages have not
gone up. Nobody said anything, when they have to go out and try and
find an automobile to get to work, about keeping the price low because
their minimum wage has not gone up.
The fact of the matter is, if we want people to be able to make it in
today's society, we have to occasionally give them a minimum wage
increase. This House yesterday passed a welfare reform bill. It
stresses work. I supported that bill. If we are going to stress work,
we have to make sure that people can make a livable wage when they get
that work. The minimum wage increase today brings that a little closer
to reality.
Mr. MOAKLEY. Mr. Speaker, it gives me great pleasure to yield 2
minutes to the gentleman from New Jersey [Mr. Andrews].
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Mr. Speaker, I thank the gentleman from Massachusetts
[Mr. Moakley] for yielding time to me.
Mr. Speaker, sometimes the measure of a legislative body is who it
listens to. The majority this year listened to a certain elite group of
citizens who said they wanted to renounce their citizenship in order to
avoid paying taxes, and they got what they wanted.
The majority this year listened to corporate America that wanted to
continue to flood our campaigns with political contributions, and they
got what they wanted. The majority this year listened to the huge
argribusiness that get billions and billions of dollars of welfare
checks from the public Treasury, and they got what they wanted.
Today a bipartisan majority of Republicans and Democrats is going to
[[Page H9844]]
listen to the people who sweep our floors, wash our dishes, take care
of our children, and do the hard work of America, and finally they are
going to get what they rightfully deserve, an increase in the minimum
wage of this country.
We have lad a lot of talk on this floor this week about the
desirability of work. Talk is cheap. What is more important about the
desirability of work is to say to someone who washes dishes or sweeps
floors or works in a child care center, your work counts, too.
By rising today in support of this rule and this bill, we are finally
going to say to the Americans that no one ever listens to, thank you
for a job well done. America does need a raise. Today the most
deserving Americans are going to get one.
Mr. SOLOMON. Mr. Speaker, yield 3 minutes to the distinguished
gentleman from Stamford, CT, Chris Shays.
Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, this is an historic day I am thrilled to be able to
celebrate. This is, in fact, a bipartisan effort. Republicans wanted a
tax cut, and some Democrats wanted a minimum wage, and some
Republicans. We united in a common goal to do both. We have $8 billion
of tax cuts for businesses who are going to hire the most unemployable
in our society. We have a minimum wage for those who work for the least
amount.
As my colleagues, the gentleman from New York [Mr. Quinn], a leader
in this effort pointed out, this is not just an historic day, it is an
historic week, because we passed welfare reform. We want to get people
off of welfare and onto work. It is very important that we have a
minimum wage that is competitive with welfare.
Welfare recipients will have a minimum wage that will not pay them 20
percent more. In a 40-hour workweek they were making $8,000. They will
now receive $10,000. This was an effort that would not have passed had
it not been bipartisan.
I might just express one slight concern with the bill. We are kind of
distorting the concept of how we classify workers, and this is an issue
we are going to have to find a way to address, because we have too many
workers who work as outside consultants who then are not paid certain
benefits. I just want to lay that on the table for the record. We have
to find a way to make sure that workers are properly classified.
But this bill does two things it needs to do. It provides tax cuts
and it provides a livable minimum wage. No one can live, in my
judgment, on a minimum wage if they only work 40 hours a week. But tell
me, what people in society only work 40 hours a week and succeed? This,
to me, is truly an historic day. I congratulate both Republicans and
Democrats on their combined effort to provide a minimum wage and tax
cut for those businesses that need it.
Mr. MOAKLEY. Mr. Speaker, it gives me great pleasure to yield 1
minute to my colleague, the gentleman from Massachusetts [Mr. Frank].
Mr. FRANK of Massachusetts. Mr. Speaker, I congratulate all of those
who helped bring forward this increase in the minimum wage, a small but
important step toward social equity which we very much need.
I also want to express my appreciation within this bill to the U.S.
Treasury Department, to the Committee on Ways and Means, the chairman,
the gentleman from Texas, and the ranking member. My colleague, the
gentleman from Massachusetts, and I approached them on behalf of
fishermen in the greater New Bedford area who were caught up unfairly
in a tax dispute. They found themselves, in effect, retroactively
taxes, I believe. We made our case. These are very hardworking people,
already facing great difficulties because of conservation-imposed
restrictions.
I am very appreciative of the willingness of the Committee on Ways
and Means, on a bipartisan basis, to entertain our requests; the
Treasury Department, to make a rare exception and say retroactively
would be acceptable in this case; and I am pleased that as part of this
bill, some very hardworking people in the greater New Bedford area will
get the tax relief they are entitled to. They are getting nothing they
should not have had in the first place. They have been through a lot of
expense and aggravation to get here, but at least from now on they will
not have this burden.
Mr. MOAKLEY. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Martinez].
(Mr. MARTINEZ asked and was given permission to revise and extend his
remarks.)
Mr. MARTINEZ. Mr. Speaker, I thank the gentleman very much for
yielding time to me.
Mr. Speaker, I rise, on a rare occasion that I take the well, to
congratulate all those people whose persistence paid off in bringing us
this minimum wage bill. It truly is a bipartisan bill. I know there
were people in the leadership on one side of the aisle that had made
comments, I think very drastic comments, about withholding this piece
of legislation. Eventually, better minds prevailed and this is being
brought to the floor now.
On behalf of my constituents, I very sincerely thank you. I do not
care whether you make $100,000 or $10,000, you actually want a raise,
because the cost of living continues to go up. Finally, the people that
were persisting in this made people realize that we need to have a
minimum wage increase.
Let me tell the Members that in California, though, we have an
initiative on the ballot, and every poll has indicated that that
particular ballot proposition will pass overwhelmingly. It will pass
overwhelmingly, for the reason I just stated.
If we need to be vindicated in what we do today, just watch that
California vote, because I can guarantee the Members that it will be a
landslide. It will be people from all walks of life, from both sides of
the aisle, Republicans and Democrats alike, and even Libertarians, that
will vote for that particular initiative. I guarantee the Members, we
are in the right ball field in the right ball game.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Vermont, the Honorable Bernie Sanders.
(Mr. SANDERS asked and was given permission to revise and extend his
remarks.)
Mr. SANDERS. Mr. Speaker, ever since my first day in Congress I have
been fighting to raise the minimum wage. The simple truth is that the
purchasing power of the minimum wage today is 26 percent less than it
was in 1970, which means that our minimum wage workers today are much,
much poorer and harder pressed than they were in the past.
The fact of the matter is that millions and millions of American
workers cannot survive, cannot live in dignity on $4.25 an hour, and I
am glad now today, finally, we are going to be raising the minimum wage
to $5.15 an hour, although in truth, we should be raising it higher
than that.
{time} 1000
The reality of the American economy is that more and more of the new
jobs that are being created are low-wage jobs, they are part-time jobs,
they are temporary jobs without benefits. Today we are saying to those
workers that at least you are going to be getting $5.15 an hour and
that is long overdue.
The second part of this bill, which is also a positive step forward,
is that we are saying to small businesses in Vermont and all over this
country that we understand that you and not corporate America who are
taking our jobs to China and Mexico but you, small businesses, are the
people who are creating the new jobs in Vermont and in California and
all over this country, and that you and not big business are entitled
to the tax breaks that you desperately need so that you can reinvest in
our communities and create more jobs.
So this bill ultimately does two very important things: It says to
every worker in America that you are going to make at least $5.15 an
hour and it says to the small businesses of this country who are
creating the new jobs that this Congress hears what your problems are
and we are going to give you some tax breaks so you can reinvest and
create more jobs.
Mr. SOLOMON. Mr. Speaker, Addison, MI, is very fortunate to have an
outstanding representative by the name of Nick Smith.
I yield 2 minutes to the gentleman from Michigan [Mr. Smith].
[[Page H9845]]
Mr. SMITH of Michigan. Mr. Speaker, I thank the chairman for yielding
me this time and certainly for that introduction.
It is so frustrating listening to the debate, pretending that
Congress can somehow create more wealth by passing a law saying you
increase wages. Do we think $5.15 an hour is that great of an income?
Do we think that is the correct rate for people to survive? If anybody
thought Congress could do it, why in the world are we not raising it to
$10 or $12 or a respectable living for an American family of $14, $16?
It is because Government cannot set prices. That is not the way our
system works.
Let me tell my colleagues how I think it works. I think competition
is just as important in the labor force as it is in the total economy
of this country. The free market with competition is what has made us
so great.
If we want to improve the chances of people to increase their
salaries, then one thing we need is to have competition in the labor
market with better mobility of labor. The bill that we passed yesterday
that allows a person working to be assured that their health care can
go with them as they go looking for a better job is a good step toward
improving mobility of labor.
Another area that needs attention if we really wanted to help
mobility, to help assure the highest possible wage would be to allow
accrued pension benefits earned to go with the worker to the next job.
Another thing we could do would be to provide better information
regarding jobs and job skills that are and will be in high demand.
The pretense by liberals that we can somehow magically pass a law and
set prices and wages to improve our standard of living is ridiculous,
and is contrary to the economic system that made this country great.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from
North Carolina [Mrs. Clayton].
Mrs. CLAYTON. Mr. Speaker, I thank the gentleman from Massachusetts
for yielding me this time.
We are going to do something for workers today, and I am delighted. I
am delighted at last we will have a final vote on the minimum wage
increase today. The American people wanted this, 8 out of 10, and I am
pleased that both Democrats and Republicans also will make this a
reality. Twelve million workers certainly deserve better than to be
working at their current level. Yes, the minimum wage that we are
raising is not sufficient, but indeed the minimum wage increase will
raise that to a level which will be a livable wage.
The minimum wage worker now earns about 50 percent less if you equate
the value of the raise now to the cost and the value some years ago. It
means that the minimum wage we are increasing then is still not
sufficient, but nevertheless this is an important first step. At least
117,000 or more persons who live in my State will have the benefit of
this increase.
What will this mean to them? Obviously it will mean 90 cents over 2
years, for a 2-year period, but that increase will mean $1,800 a year.
That means it will make a difference in their lives and their families,
their ability to provide for their families food and shelter, clothing
and education. While indeed the cost of bread and eggs and a place to
sleep and clothes to wear, a bus ride or even a ride to the doctor has
increased, this minimum wage is beginning to approach that increase in
the cost of living.
We are now at the threshold, I think an important threshold, of
saying that the American workers also need to have some of the
abundance of our economy. Just as our corporate structure has great
profits and our executives have great increases in their salary, we are
saying to the average worker, they too can have a benefit. I am
delighted that we are going to pass this. This is a historic day.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Maryland [Mr. Cardin].
(Mr. CARDIN asked and was given permission to revise and extend his
remarks.)
Mr. CARDIN. First let me thank my friend, the gentleman from
Massachusetts [Mr. Moakley], for yielding me this time.
Mr. Speaker, there are many reasons to support this rule and the
conference report. It contains very important provisions increasing the
minimum wage and extending some very important tax credit provisions
that will help create more jobs and investment in our community.
I would like to just mention one provision in the conference report
that I take pride that we are finally going to get enacted, that is,
pension simplification that will help many businesses in this country
and many small businesses particularly. I started working on this issue
5 years ago when I filed legislation in this area. I did it because the
savings ratios of this country indicate very clearly that we must
encourage more private sector investment and savings.
Retirement plans, particularly for small companies, were on the
decline because of the red tape and difficulty in establishing a
pension plan for small businesses. In 1992 many of the provisions that
are included in this conference report were passed by a Democratic
Congress and vetoed by a Republican President for reasons totally
unrelated to the retirement provisions, because they were included in
an omnibus bill. Then again on 1995 these provisions were passed by a
Republican Congress, vetoed by a Democratic President, again for
reasons totally unrelated to the retirement provisions.
The third time is the charm. It looks like we are finally going to
get these provisions enacted into law. I particularly want to thank the
gentleman from Ohio [Mr. Portman] for the work that he has done on
pension simplification. I want to thank the gentleman from Texas [Mr.
Archer], chairman of the Committee on Ways and Means, and the gentleman
from Florida [Mr. Gibbons], the ranking member, for making sure that
these provisions were included in this very important legislation.
This is a very important provision for the small businesses in our
country. it will allow them to expand and set up retirement 401(K)
plans that will encourage more people to be able to plan for their
retirement. I congratulate the committees for including this in the
legislation.
Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Mississippi [Mr. Taylor].
Mr. TAYLOR of Mississippi. Mr. Speaker, I want to compliment the
Rules Committee for bringing this bill forward today.
One of my friends spoke a little earlier and said that Congress
cannot determine wealth or it cannot set wages. Yet every year for the
7 years that we have both been here, Congress has given our senior
citizens a COLA, cost of living increase, on their Social Security
check. For each of those 7 years, we have given retired Federal
employees a cost of living adjustment on their check. For each of those
7 years, we have given our military retirees a cost of living
adjustment on their check, not for what they are doing but for what
they have done. And no one stood up and said we should not do this,
because everyone realized that the cost of living has gone up.
This week speaker after speaker came to the podium and said that
people should value work, and I agree. But if people should value work,
then work must have value. And so, yes, the least fortunate in our
society, those who by and large have the toughest jobs, they deserve a
wage increase. I want to compliment the gentleman from New York [Mr.
Solomon], and I want to compliment the gentleman from Massachusetts
[Mr. Moakley] for bringing this bill to the floor today. It is long
overdue. Let us help those people out.
Mr. MOAKLEY. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I think it was the gentleman from West Virginia that
stood up a few minutes ago and said, ``Hallelujah, I never thought this
day would come when we would have this bill on the floor.'' He was
talking about raising the minimum wage. I guess I would have to turn
around and say, hallelujah, I thought this day would never come,
either, because for the last 2 years we have been trying to give some
tax relief to working men and women, to small businesses in this
country, and, yes, it is so terribly important that we do raise the
minimum wage like the gentleman from Mississippi said. That is
important. But just as important, Mr. Speaker, is the fact that
[[Page H9846]]
we have to give some tax relief to small businesses to help offset the
cost of the minimum wage increase.
I could go down through this list. There is $22 billion in tax relief
for the American people in this bill: Increases in expensing for small
businesses. That is terribly important. Home office deductions so that
people can run their businesses out of their home, particularly women
who have to stay home with children and still want to operate a
business. There is tax relief in there. To expand eligibility for
first-time farmers. Industrial development bonds. This is more for
first-time farmers. I could go through this whole list. Employer-
provided educational assistance. Contributions for stock to private
foundations to help the charities in this Nation. It goes on and on and
on.
Mr. Speaker, this is a good piece of legislation, it does provide for
the increase in the minimum wage, but it also provides for $22 billion
in tax relief for the American people. That is why we should all come
over here, vote for this rule, and vote for the outstanding bill that
the gentleman from Texas [Mr. Archer] will be bringing to the floor in
just a few minutes.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The resolution was agreed to.
A motion to reconsider was laid on the table.
Mr. ARCHER. Mr. Speaker, pursuant to House Resolution 503, I call up
the conference report on the bill (H.R. 3448) to provide tax relief for
small businesses, to protect jobs, to create opportunities, to increase
the take home pay of workers, to amend the Portal-to-Portal Act of 1947
relating to the payment of wages to employees who use employer-owned
vehicles, and to amend the Fair Labor Standards Act of 1938 to increase
the minimum wage rate and to prevent job loss by providing flexibility
to employers in complying with minimum wage and overtime requirements
under that Act.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. LaTourette). Pursuant to House
Resolution 503, the conference report is considered read.
(For conference report and statement, see proceedings of the House of
Thursday, August 1, 1996, at page H9568.)
The SPEAKER pro tempore. The gentleman from Texas [Mr. Archer] and
the gentleman from Florida [Mr. Gibbons] will each be recognized for 30
minutes.
The chair recognizes the gentleman from Texas [Mr. Archer].
general leave
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and include extraneous material on the conference report on H.R. 3448.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that I allot 15
minutes to myself for distribution and, subsequent to the conclusion of
that, 15 minutes to the gentleman from Pennsylvania [Mr. Goodling],
chairman of the Committee on Economic and Educational Opportunities, so
that he may distribute that time according to his discretion.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today the House is on the verge of enacting the first
major tax bill of this new historic did-something Congress. It is great
to report to the American people that this bill provides tax relief and
not tax increases. What a difference this new Congress is making in the
lives of the American people.
This bill actually is three bills: We have combined many of the items
in the Small Business Relief Act with the adoption tax credit and with
the trade bill renewing the generalized system of preferences, also
known as GSP. I am really not sure what to call this new bill, except
to call it a helping hand for millions of Americans struggling to make
ends meet.
{time} 1015
This bill awards three gold medals to the American people. The first
gold medal goes to millions of small businessmen and women so that
their companies can grow, prosper and create jobs.
The second gold medal goes to hundreds of thousands of loving
families who seek the joy of adoption and the children who will benefit
from that love.
The third gold medal goes to millions of Americans who worry about
their ability to retire with comfort and security. The two dozen
pension changes in this bill will make it easier for people to save for
retirement and protect their retirement nest eggs so that these savings
will be secure.
I especially want to note that this bill will end the discrimination
against homemakers, usually women, that stay in the home to take care
of children and to do what is so important to our society, and in doing
so that has stopped them from getting the same individual retirement
deduction allowed to those who work outside the home. So we have a new
homemaker IRA that is a great addition to this bill. It is a part of
this bill that also helps people retire with comfort and security.
Let me add one other thing. This bill, together with the health bill
that we passed last night, updates and closes several corporate tax
loopholes, particularly the section 936 tax break for companies doing
business in Puerto Rico and a big loophole that benefitted insurance
companies.
I am pleased to note that we are taking action to close tax loopholes
just as we said we would at the beginning of the Congress last year. I
am proud that the new Republican Congress is getting the job done.
Mr. Speaker, as I said earlier, by giving tax relief and pension
security to the American people, this Congress is doing the people's
business and doing it right. Democrats and Republicans, on a bipartisan
basis, are working together, and that is good government.
Mr. Speaker, this new Congress is moving America in the right
direction, and I am pleased that President Clinton is going to join
with us by signing this bill. It has been a great week for the
Republican Congress and it has been a great 2 years of accomplishment
for our efforts to reform Congress and change America.
Mr. Speaker, I reserve the balance of my time.
Mr. GIBBONS. Mr. Speaker, I ask unanimous consent to yield 15 minutes
of my time to the gentleman from Missouri [Mr. Clay], and that he may
further yield that time.
The SPEAKER pro tempore (Mr. LaTourette). Is there objection to the
request of the gentleman from Florida?
There was no objection.
Mr. GIBBONS. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, this is a very important piece of legislation,
particularly the minimum wage part, but I shall dwell on the part that
is germane to the Committee on Ways and Means and talk about that.
As best I have been able to tell, from all search and research and
participation, this bill is a fair bill. It contains little if nothing
that was not in either the House bill or the Senate bill and it stays
within the germaneness of the topic that we are dealing with.
There are many fine adjustments in here that are perhaps warranted. I
believe they are warranted because the Internal Revenue Code is
probably the most complex document that exists on the face of this
Earth and it, from time to time, needs adjusting.
The adjustments here were done with the help of a very competent
staff and under the direction of, I think, a very conscientious
chairman of the Committee on Ways and Means. The gentleman from Texas
[Mr. Archer] was fair, he was principled, and he did a good job of
putting this bill together and controlling it through conference.
I urge the Members to support this bill. It is extremely thick and
complex. The conference report is about six inches thick. It will
probably take a week to print, but I believe it is an important and
well-produced document. I urge favorable consideration and passage of
this bill.
Mr. CLAY. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, I am pleased that at long last a Congress will provide
hard-working wage earners a well-deserved raise. I commend the 93
Republicans,
[[Page H9847]]
the 1 Independent, and the 187 Democrats who made this increase
possible with their vote to raise the minimum wage.
Mr. Speaker, I cannot resist expressing my disappointment with the
Republican leadership that attempted to sabotage this badly needed
increase for our workers. The Republican leadership has fought this
effort with every fiber of their beings. For months the Republican
leadership refused even to allow the committee of jurisdiction to hold
a hearing on the minimum wage.
When forced to bring the bill to the floor, the Republican leadership
tried to gut the legislation, tried to exempt most employers from the
obligation to pay the minimum wage.
In this conference report the Republican leadership has needlessly
postponed the minimum wage increase by 1 month in 1996 and, incredibly,
by 2 months in 1997. At every turn the Republicans have felt compelled
to nickel and dime low-wage workers and their families. Now some to
them want the American workers to believe that the leadership of the
Republican Party are giving them a raise.
Mr. Speaker, I am also extremely disappointed that the conferees
included a special interest provision, the so-called Harris Trust
provision, that weakens the protection for pension participants and
beneficiaries. The final conference report moderates that provision
somewhat by providing that ERISA shall be fully applicable to pension
plan contracts with life insurance companies issued after 1998.
However, the Harris Trust provision should never have been included in
the first place.
Despite serious misgivings, Mr. Speaker, I support the conference
report. American workers deserve a fair day's pay for a fair day's work
and we cannot afford to delay an increase any longer.
Mr. ARCHER. Mr. Speaker, I yield myself 1 minute. I do so to thank my
colleague, the ranking Democrat on the Committee on Ways and Means, the
gentleman from Florida [Mr. Gibbons], who will be retiring at the end
of this Congress, for his kind comments about how we put this bill
together.
We did it, Mr. Speaker, on a bipartisan basis, the way the Committee
on Ways and Means should operate. Members from both sides of the aisle
had a chance to make an input. I do agree with the gentleman from
Florida, naturally, that I think we have a good bill, but I am grateful
for his comments and I want to compliment him for his input in making
this bill the good bill that it is.
Mr. Speaker, I yield 3 minutes to the gentlewoman from Connecticut
[Mrs. Johnson], the distinguished chairman of the Subcommittee on
Oversight of the Committee on Ways and Means.
Mrs. JOHNSON of Connecticut. Mr. Speaker, this is truly a great day
for the American people. This is a good bill but it is a result of
outstanding leadership.
Let me make plain that as one of those who supports increasing the
minimum wage, I feel honored to stand here today in support of a bill
that not only does that but recognizes the ramifications of increasing
the minimum wage on our society and protects, for example, job
opportunities for teenagers in the summer, and protects small
businesses by giving them a series of preferred tax treatments to lower
their costs of doing business.
This bill opens up pension opportunities for employees of small
businesses. It dramatically helps women. For the first time it puts in
the law the legislation we need to give women who stay home and take
care of the children the same IRA rights as anyone else in America.
This is a sea change. This is good legislation. This is about
equality for all of us. This is about building a strong future for the
families of our Nation.
Mr. Speaker, there is also a very important provision that we have
worked on for many years, giving our small businesses greater expending
rights so that they can expense out the costs of machinery and
equipment, computers and so on, and add more jobs, grow more rapidly.
In a society where small business is driving job growth, the kind of
help this bill gives to small business is indeed critical and key to
leading our Nation to enjoy a more rapid rate of economic growth, job
growth, and job opportunities for career advancement for our people.
Last, I want to mention the R&D tax credit in this bill. I regret we
could not do it retroactively, I regret we could not do it many more
years out to the future, but we have reformed it in a way that small,
inventive little companies, our future, those companies will be able to
take advantage of it.
We have also restructured it in a way that the old defense companies
that we need to be able to turn around, we need to be able to do new
product research, we need to be strong in 10 years, will also benefit
from the R&D tax credit for the first time in many years.
This bill before us helps families in numerous ways, not only
increasing the minimum wage but also increasing pension opportunities,
saving opportunities, job opportunities, and it strengthens the very
sector on which our future growth, job expansion, and well-being
depends, the small business sector.
Mr. Speaker, I thank the chairman for his extraordinary leadership
and for the work of both sides on this bill.
Mr. ARCHER. Mr. Speaker, will the gentlewoman yield?
Mrs. JOHNSON of Connecticut. I yield to the gentleman from Texas.
Mr. ARCHER. Mr. Speaker, I want to compliment the gentlewoman for
driving the expensing for small business. She was the one who pushed
and pushed and pushed to get this in the bill.
Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from
Massachusetts [Mr. Neal].
(Mr. NEAL of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from
Florida, and, like the gentleman from Texas [Mr. Archer], I want to
thank him for the many remarkable years of service in this institution,
and for those of us on the minority side of the Committee on Ways and
Means, we want to thank him for the leadership he has provided during
the past 18 months.
I also want to thank Chairman Archer for the provision in this
legislation that deals with the New Bedford fishermen, which was a
contentious issue for many years. I am grateful we were able to resolve
this issue in an amicable manner.
I want to ask the following rhetorical question, if I can, for just a
second. Last year in this House we voted more than 1,000 times. Here we
are now, in the middle of the Olympics, with a tangible accomplishment
for the American people in this piece of legislation. Why do we not ask
ourselves this: What did we accomplish in this institution last year
with 1,000 votes?
Well, we certainly satisfied the psychology of an element that got
elected. We made them happy that they were able to go home and point to
some headline-grabbing news that really had little consequence for the
American people, but we spent 5 days a week and sometimes 5 nights a
week on this floor and in this institution talking about things, again,
that had little relevance to the American people.
So here we are on the day before the House recesses, with a tangible
piece of legislation, and it is in the middle of the summer Olympics,
so we cannot report back to the American people on what we have done
during the last week.
We have a good increase in the minimum wage. What did the majority
leader of the Republican Party say? He was going to do everything he
could to stop that bill from ever happening. That is what we did last
year.
There is an improvement here in spousal IRA's, which I have sponsored
and pushed hard for. That should have been done last year. We, in fact,
should have done a more expansive individual retirement account piece
of legislation that we all could have taken satisfaction from its
passage having occurred.
One thousand votes last year. We should ask ourselves, what did we
accomplish?
{time} 1030
Mr. CLAY. Mr. Speaker, I yield 2 minutes to the gentleman from New
York [Mr. Owens].
(Mr. OWENS asked and was given permission to revise and extend his
remarks.)
Mr. OWENS. Mr. Speaker, I agree with the gentlewoman from Connecticut
[Mrs. Johnson], my classmate, my Republican colleague, that this is a
[[Page H9848]]
``see'' change. This is a very important change. This Congress should
congratulate itself. We did in a bipartisan way finally come to grips
with the common sense of the American people. The common sense of the
American people came home to us.
The polls showed that almost 90 percent of the American people wanted
a minimum-wage increase. This is important for people at the very
bottom of the rung. It does not seem like much, an increase of 90 cents
over a 2-year period. But it will buy shoes, it will buy beans, it will
buy rice. This is very important to these other people that have been
left out while prosperity soared in America. It is very important that
we begin to reward work.
There are a lot of very powerful people who have spoken loudly about
moving from welfare to work in the last few weeks. Well, the burden of
proof is on them. Will there be work or jobs? In my district you
mention a job, and people line up in long lines and hundreds of people
go away disappointed because there are only a few jobs.
So let us create the jobs first, and let us make the jobs pay minimum
wage. There is a lot of work to be done, but work is not a job unless
it is paid properly. We need the minimum wage plus a health care
package. A real job is minimum wage plus a health care package. It is
up to us to try to create that. Start with the minimum wage.
We also want those health care packages for everybody. People on
welfare find they are better off not going to work because they lose
their health care. Let us finish the job, but begin with the minimum
wage. We want work. The tremendous economic gap exists, with the top 5
percent of the American people, income earners, earning huge profits
while at the very bottom they have found their wages have gone down in
the past 20 years. If we really increase the minimum wage to a level
where it would keep pace with inflation, we would be talking about a
$6.25 increase.
Mr. Speaker, let us reward work and pay what it is worth so that
people will go to work.
MR. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Minnesota [Mr. Ramstad], a distinguished member of the Committee on
Ways and Means.
Mr. RAMSTAD. Mr. Speaker, I thank the chairman for yielding, and I
rise today to enter into a brief colloquy with the gentleman from Texas
[Mr. Archer]. First of all, I want to commend the gentleman for his
outstanding leadership in bringing this legislation to the floor.
I am concerned, however, about regulations that were just issued by
the IRS in May regarding the section 936 possession tax credit therein.
I believe these regulations will have an unfair impact on companies
during the phaseout of section 936 because they cast aside regulatory
rules upon which companies have relied for many years permitting arm's-
length pricing in the purchase of components. They produce a
discriminatory result that an arm's-length third party price can be
used to value outbound sales of components but not inbound purchases by
the possession company for purposes of the section 936 calculation.
Mr. Speaker, I believe that a fair and workable solution can be
developed to address these concerns, and I would ask that the chairman
join me in strongly encouraging the Treasury Department to seek such a
solution.
Mr. ARCHER. Mr. Speaker, will the gentleman yield?
Mr. RAMSTAD. I yield to the gentleman from Texas.
Mr. ARCHER. Mr. Speaker, I am happy to join the gentleman from
Minnesota [Mr. Ramstad] in strongly encouraging the Treasury Department
to do that.
Mr. RAMSTAD. Mr. Speaker, I thank the gentleman for his agreement and
also for his leadership.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio
[Mr. Portman], a distinguished member of the Committee on Ways and
Means
(Mr. PORTMAN asked and was given permission to revise and extend his
remarks.)
Mr. PORTMAN. Mr. Speaker, I thank the gentleman from Texas [Mr.
Archer] for the time. This is a guy who has had his own legislative
marathon this week during the Olympics, and he deserves a medal because
he has achieved a lot of good legislation for America.
Mr. Speaker, I want to talk about a gem hidden in this bill, and I do
not want it to be lost. It is simplification of our pension laws and
strengthening of retirement savings for all Americans.
My friend from Maryland [Mr. Cardin] and I have pushed this
legislation, because we want to expand retirement security for all
Americans. It is in this bill and something very important for America
and for American workers.
These days 401(k)'s profit-sharing plans, and other pension plans are
being used less and less because, frankly, they are overregulated.
Today small businesses, for the most part, do not offer any kind of
retirement savings at all. Of those companies under 20 employees, fewer
than 20 percent of them offer any pension savings plans at all.
Since 1980, Congress has passed an average of one law per year
affecting private sector pensions. Congress has increasingly
complicated this area, and as these rules and regulations have
multiplied, retirement savings plans have become less and less
attractive. They are too costly to set up and too costly and burdensome
to maintain, particularly for small businesses that cannot afford
either the inside or outside professional help to make their way
through the bureaucratic maze.
As a result, these days pension plans are being terminated around
this country faster than they are being established. The bottom line is
that if this legislation is enacted, which I think it will be now, it
will encourage private savings, it will help the economy because we
need to increase our savings rate, and, most importantly, it will allow
more people to plan for their future.
Mr. Speaker, I applaud the gentleman from Maryland [Mr. Cardin] and
the gentleman from Texas [Mr. Archer], as well as the other conferees,
for including this legislation in this report, and I hope that this
legislation receives the support of all Members of the House.
Despite the fact that these important pension simplification
provisions are included in the conference report, I am concerned that
this bill will also raise the minimum wage. In my view, this is a
misguided and regrettable effort, because I fear it will hurt the very
working people we are trying to help. Thankfully, because of Chairman
Archer's leadership, we added the pension reform and other provisions
that will help to mollify the effect of his legislation on small
business. For that reason, I will vote in favor of this bill, despite
my deep concerns about the effects of the minimum-wage increase on
working people at the low end of the economic ladder, on small
businesses and on local and State governments.
Mr. ARCHER. Mr. Speaker, I yield myself 15 seconds in order to
compliment the gentleman from Ohio [Mr. Portman] and the gentleman from
Maryland [Mr. Cardin] because it was their efforts that put this
pension simplification provision in the bill.
Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from
North Dakota [Mr. Pomeroy].
Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding. This is
vital legislation, and I applaud those on the majority caucus that
broke away from their leadership that was doing everything possible to
stop a minimum wage increase and joined with us in the minority to
reach the critical mass necessary to pass the minimum wage and get
these workers at the lowest levels of earning power the raise they so
desperately needed. it took guts to buck your own leadership and those
of you who did that I applaud you.
While we address the immediate earning needs of those at the lowest
level, this legislation should also be commended for what it does to
advance pension and retirement savings policy. Our Nation has a looming
crisis because Americans are not saving adequately for their
retirement.
Three aspects of this bill advance pension retirement savings policy.
The first is straightening out and clarifying how the pension
administration occurring in the life insurance industry will proceed in
the wake of the Harris trust ruling. Unlike previous comments made on
this floor, I believe that the Harris trust language is very positive
and helpful in clarifying this situation and should be in this bill.
[[Page H9849]]
Second, pension simplification: at a point when only 24 percent of
employees and employers under 100 have the opportunity to save for
retirement at the workplace, this simplifies pensions. This is going to
make small employers more willing to offer pension and retirement
savings opportunity for their employees. It is a vital part of the
bill.
Third, the spousal IRA. Representing a rural area, I cannot think of
a more unfair part of the Tax Code relative to retirement policy than
the present provision which limits to $250 a contribution by a spouse
not employed in the workplace.
In a farm family where you have the husband and wife pitching in to
make that farm go, it is just desperately unfair to limit to $250 the
contribution of the second spouse. By allowing the full contribution in
the spousal IRA we have improved this law a lot.
Mr. CLAY. Mr. Speaker, I yield 1 minute to the gentlewoman from
California [Ms. Woolsey].
(Ms. WOOLSEY asked and was given permission to revise and extend her
remarks.)
Ms. WOOLSEY. Mr. Speaker, it is about time. It is about time to make
work pay more than welfare.
When I was on welfare 28 years ago, I had to go for aid for dependent
children because my wages were so low that I could not afford the
health care, the child care and the food that my three small children
needed. Too many American workers face that same situation today. In
fact, many minimum wage earners look like I did 28 years ago.
Sixty percent of minimum wage earners are woman; one-fifth are single
parents. Increasing the minimum wage will mean that these parents and
others can depend on work rather than welfare to support their
children.
Increasing the minimum wage will prevent the need for welfare in the
first place. Increasing the minimum wage is the right thing to do, it
is the smart thing to do, and it makes work pay. It is about time, Mr.
Speaker.
Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the gentleman from
Pennsylvania [Mr. English], a distinguished member of the Committee on
Ways and Means.
Mr. ENGLISH of Pennsylvania. Mr. Speaker, I would like to start by
joining my colleagues in complimenting the distinguished chair of the
House Committee on Ways and Means, who in my view has done a superb job
of bringing to the floor a balanced conference report that not only
addresses the needs of minimum wage workers, but also the needs of
small business.
I particularly want to acknowledge his role in addressing a pension
provision which is included in this package which addresses an inequity
in the law that would have otherwise destroyed 1,100 jobs, including
150 jobs in Erie, PA, at Erie Forge & Steel, and I salute him for doing
that.
Mr. Speaker, I am proud to rise in support of this conference report
that will increase the minimum wage for the first time in 5 years and
at the same time provide significant tax relief to America's small
businesses. This is a balanced approach, and this legislation is long
overdue.
I remember last year when I was the first member of my party to
introduce minimum wage legislation in the House. Since then, I joined
some of my colleagues and ultimately supported the Riggs-Quinn-English-
Martini amendment that increased the minimum wage and included it in
this package of legislation. I am proud to see and very pleased to see
that it has earned massive, bipartisan support.
In my congressional district in northwestern Pennsylvania, I have
seen far too many families supported by one or more members working in
minimum wage jobs. These hard-working people could very easily
surrender to the welfare system, but they do not. Instead of taking tax
money, they pay it, and I think they deserve more.
At the same time, I know of many small business people who are
struggling to get by, who are struggling to grow their businesses, and
they are finding it difficult because of the Tax Code. This legislation
provides incentives for them to grow jobs, to create more jobs and at
the same time bring part of the bounty back to minimum wage workers.
Mr. Speaker, this legislation, as has been noted before, includes
important expensing liberalization in the Tax Code. It includes a home
office deduction, subchapter S reforms and much-needed pension
simplification. In addition, it extends some critical expiring tax
provisions, including the work opportunity tax credit and employer-
provided educational assistance.
In my view, Mr. Speaker, this is a balanced package that merits the
support of every Member of this House. I am happy to endorse it. It is
a great day for American workers and American small businesses.
Mr. ARCHER. Mr. Speaker, I ask unanimous consent to yield the balance
of my time to the gentleman from Pennsylvania [Mr. Goodling] to add to
his original 15 minutes, and ask that he be allowed to control that
time.
The SPEAKER pro tempore (Mr. LaTourette). Is there objection to the
request of the gentleman from Texas?
There was no objection.
Mr. CLAY. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Becerra].
Mr. BECERRA. Mr. Speaker, about a year and a half ago, January 1995,
the gentleman from Texas [Mr. Armey], the majority leader, said, ``I
will resist an increase in the minimum wage with every fiber in my
being.''
Well, sure enough, on more than five occasions on this floor,
Democrats tried to pass a minimum wage bill and each time it was
defeated. The result, about 12 million Americans had no chance to see
their wages increased. The result of that, well, about $5.6 billion in
lost earnings for these people. What does that mean? About 3\1/2\
months of groceries for an individual on the minimum wage or maybe 6
months of health care insurance payments or about 4\1/2\ months of
payments of utility bills or about 2 months of housing for that
particular worker were lost as a result of 18 months of delays.
{time} 1045
It is about time, Mr. Speaker, that we got a message here in
Congress, the message that America has known for a long time. American
workers deserve a raise. I am pleased that we are finally going to get
the message here in Congress.
Mr. GOODLING. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Thomas].
Mr. THOMAS. Mr. Speaker, I thank the chairman for yielding me the
time.
I just want to take a minute because very often we forget that the
legislation in front of us, although worked out in general by Members,
is always finalized, structured, coordinated and made correct by staff.
Chief of staff on the Committee on Ways and Means, Phil Moseley, and
those competent staff under him on our side, Jim Clark, Paul Auster,
Tim Hanford, John Harrington, and Norah Moseley, and the Joint
Committee on Taxation under Ken Kies, have worked a number of hours,
along with minority staff, to make sure that what is in front of us is
done accurately.
I want to make sure that they got credit because they certainly put
in the hours.
Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from New
York [Mr. Rangel].
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Mr. Speaker, I would like to join the gentleman from
California [Mr. Thomas] in expressing our appreciation for staff, both
Democrat and Republican, because it was they that guided us when we
were not actually in session for the conference. And the conference was
a bipartisan conference inasmuch as we had very strong disagreements,
but the issues were resolved at least in a civil manner.
I think it is a successful conference because I think we emphasize
how important it is for people to have jobs. We are obsessed with the
problems we get from immigrants, from unwanted children, from drugs,
from crime and from violence. Yet education, job training and the
opportunity to have hope for the future seems to have in great measure
reduced these problems.
The minimum wage just makes a lot of sense, and I am glad the
American people just did not say no but insisted that at least we move
this far forward.
I also wanted to thank the Republicans for extending the targeted
jobs credit, which means disabled people,
[[Page H9850]]
veterans, those that come from poor families, those that are on welfare
will be provided with incentives to get jobs by giving credits to
employers who take this risk and who hire people.
It is unfortunate that most of the moneys in this bill were raised
just by cutting off economic development in Puerto Rico. I think it
will take a long time before this country and especially this Congress
would recognize these are citizens who fight and die for the United
States of America and, if we want to change the support that we are
giving them, I would think that you could put me first on the list to
review it.
I think that it is insulting just to cut off economic assistance and
job creation without hearing, without even thinking about the impact
that this will have not only to people in Puerto Rico but those who
will leave to come to the mainland because of lack of opportunity on
the island.
I would hope, too, that those of us that intend to work together
would realize that working together with civility makes a heck of a lot
more sense than attacking each other in a partisan way.
(Mr. GOODLING asked and was given permission to revise and extend his
remarks.)
Mr. GOODLING. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, throughout the sometimes fractious debate on the minimum
wage over the past few months, it has been my observation that we were
concentrating on our areas of disagreement. However, I think there was
a fundamental thing on which Republicans and Democrats, liberals and
conservatives seemed to agree, and that was that America needs a raise.
But as most of my colleagues know, simply raising the minimum wage
without making other reforms may do more harm than good. Economists and
experts have let us know in no uncertain terms that raising the minimum
wage will in fact hinder job growth, particularly for those in the
lowest rungs of the economic ladder.
That is why a series of reforms and changes must occur before
Americans truly see the economic situation improved overall so that
everyone can benefit. Small business tax breaks proposed in our bill
will help our Nation's mom and pop businesses better afford the minimum
wage hike that they are receiving. We are past due in fixing the IRA
system so that the spouse who works at home as the homemaker can enjoy
IRA retirement savings and benefits similar to that enjoyed by the
spouse who works outside the home.
We have also simplified and strengthened retirement plans through a
number of reforms, including permitting a simplified plan for small
businesses which will encourage pension plan growth for workers who
currently do not enjoy those benefits.
The report also provides incentives for employers to provide their
employees with educational assistance. These reforms and others
contained in the bill will help all Americans receive a raise.
With respect to the minimum wage itself, I supported the increase
after modifying it to protect the most vulnerable workers. Many studies
support the conclusion that a mandated increase in the minimum wage
would jeopardize disadvantaged Americans, those least educated, senior
citizens, young Americans looking for their first job. These people are
the last hired, the first fired, and least likely to be hired with a
higher wage. As we mandate an increase in the minimum wage, we must
protect the most vulnerable Americans.
While some low wage earners reap the benefits of an increase in the
minimum wage, other low wage workers would bear the brunt of the
destructive effects of the minimum wage. The additional protection
which we have included in this legislation helps to eliminate the
negative effects. The opportunity wage allows employers to pay new
hires under the age of 20 not less than $4.25 per hour for the first 90
calendar days of employment. This will encourage employers to hire new
workers and in turn help low skilled and entry level workers gain a
foothold in the job market.
The current law cash wage paid by employers to tipped employees is
maintained by the conference reports. Tipped employees typically
receive wages of $7 to $8 an hour, so this modification will help to
soften the negative impact of a wage increase on these types of
workers. If tips are insufficient to earn the new minimum wage, the
employer must pay the difference.
The conference agreement also maintains the current law requirements
for the computer professional exemption, ensuring that the minimum wage
increase will go to those most in need.
The conference report changed the effective date of the minimum wage
increase to allow employers an opportunity to be notified of the new
wage and to adjust for the wage increase.
I would like to note that the conference agreement will clarify the
Portal-to-Portal Act of 1947 to allow employees and employees to agree
on the use of employer-provided vehicles to commute between work and
home without travel time having to be treated as hours of work.
Turning to section 1461 of the conference report, I want to briefly
discuss the improvements in the bill that we were able to achieve
through the House amendment concerning the Harris Trust decision:
Under the conference agreement, future general account contracts sold
to pension plans will have to fully comply with the fiduciary standards
of the Employee Retirement Income Security Act, ERISA. Under the
Senate-passed language, these pensioners would never have received the
protections of ERISA.
Under the new agreement, existing general account contracts, and new
contracts sold until full ERISA protection takes effect, now will have
to be managed prudently and will have to meet reporting and disclosure
requirements, requirements not imposed by the Senate-passed provision.
Insurers will now have to mention pension assets held in insurance
company general accounts with a prudent man's level of care, skill,
prudence, and diligence. The Senate version would have offered
pensioners a significantly lower level of protection.
With respect to existing contracts, insurers will now have to meet
stringent new reporting and disclosure rules. The insurer will have to
provide periodic reports to the policyholder disclosing the allocation
of general account income and expenses to the policy, and disclosing
the effect of such allocation on the return to the plan under the
policy.
While these improvements are important, compromises were made, and
compromises by the very nature are not perfect. I do believe that this
matter would have been better addressed in another area and not in this
legislation.
Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentleman from
Maryland [Mr. Hoyer].
(Mr. HOYER asked and was given permission to revise and extend his
remarks.)
Mr. HOYER. Mr. Speaker, we are about to go home; 1995 was about the
principles of the majority, and 1996 is about the politics of the
majority. The Contract With America, does anybody remember that? It has
not been mentioned much; unremembered, unhonored and not inclusive of
what this bill does, because the central part of this bill is the
minimum wage.
Yesterday we did something to try to do a little bit for health care
for Americans: preexisting conditions, portability. It is not in the
contract.
Today we do minimum wage; not in the contract. The contract has been
forgotten. Why? Because it is not what the American public wanted. But
this minimum wage bill is. It is the right thing to do.
Dick Armey was wrong to say that he would fight it until his last
breath. I am pleased that we move today on America's agenda.
Mr. GOODLING. Mr. Speaker, I yield 3 minutes and 30 seconds to the
gentlewoman from New Jersey [Mrs. Roukema], a member of the committee.
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
Mrs. ROUKEMA. Mr. Speaker, I rise in strong support of the Small
Business Job Protection Act and ask consent to revise and extend my
remarks.
It's long past due that we raise the minimum wage and extend many of
the tax provisions that are so beneficial to small business nationwide.
But Mr. Speaker, I rise this morning to address provisions of this
bill that are designed to clarify uncertainties
[[Page H9851]]
raised by the John Hancock versus Harris Trust Supreme Court decision
in 1993. Earlier this year, I introduced legislation that would address
problems raised by the Court's holding that an insurance company's
general account may contain plan assets because of the purchase by a
plan of certain contracts issued from such accounts.
I want you to know that my legislation was cosponsored by a strong
bipartisan majority of the Members of the Opportunities Committee and I
am pleased that compromise language on this issue is contained in this
conference report.
The specific provision we are debating is a modified version of the
legislation I introduced in March. I believe it is a good compromise
that balances the interests of plan participants and beneficiaries,
plan sponsors, the Department of Labor and the insurance industry.
There are some who wrongly believe and I must stress this legislation
eliminates essential Federal protections from billions of dollars of
pension assets. In fact, the legislation requires any policy issued
from an insurance company general account after December 31, 1998, that
is not a guaranteed benefit policy to meet ERISA's standards.
With respect to contracts issued before that date, the legislation
requires the Department of Labor to issue regulations which Secretary
of Labor Reich states, ``will hold the insurance companies to as high a
level of fiduciary responsibility as any pension plan.'' In testimony
before our committee the Actuarial Association assured us of the high
judiciary compliance that is not violated.
There are those who are also concerned with the relief the
legislation gives to insurers for lawsuits with respect to past
transactions.
I am here to say that relief is appropriate. During this period, the
insurance industry, along with the parties with which it did business,
including employee benefit plans, relied on the Department of Labor
guidance on how it was to act. In other words, Labor Department set the
rules and the industry followed them. There is no dispute on this
point.
I must add that during this period it has never been established that
an insurance company violated any of ERISA's fiduciary responsibility
provisions or caused harm to any plan participants.
Moreover, insurers still remain liable for violations of any Federal
criminal law or for fiduciary breaches that also rise to the level of a
Federal or State criminal violation.
Finally, the legislation does not affect any lawsuit brought prior to
November 7, 1995.
Mr. Speaker, I recognize that this legislation has been controversial
to some people and there are different points of view regarding its
efficacy. However, this provision is a good compromise that will avoid
undue disruption to the pension community while assuring that the
rights and interests of participants are protected.
Again this is supported by a strong bipartisan majority of the
committee.
Mr. Speaker, I urge support for this important legislation.
{time} 1100
Mr. CLAY. Mr. Speaker, I yield 2 minutes to the gentleman from New
York [Mr. Hinchey].
Mr. HINCHEY. Mr. Speaker, first I want to express my thanks to the
gentleman from Missouri [Mr. Clay] for his tireless and dedicated
leadership on behalf of working Americans and to strongly support this
legislation, H.R. 3448.
At long last this body today has the opportunity to provide some
relief to working families in my district in New York and across the
country. A 90-cent increase in the minimum wage will raise the earnings
of a full-time minimum worker by $1,872 a year. If we had raised the
minimum wage last year as we advocated, in New York alone minimum wage
workers would have earned an additional $181 million last year.
Nevertheless, this now will help thousands of families work themselves
out of poverty and raise their standard of living.
While I would have preferred to see the minimum wage increased higher
than $5.15 an hour and put into effect sooner than October 1, I support
this bill in its current form recognizing that it is the best we are
going to get. In addition to raising wages, the tax relief contained in
the bill will help small businesses hire more workers, invest in new
equipment and create more jobs.
Finally the expansion of the availability of IRA deductions to
homemakers is a good idea and one that I advocated since the beginning
of this Congress. I am glad to see it finally enacted.
Mr. Speaker, this conference report is an example of how this
Congress can overcome the objections of the leadership of this House
and finally work in a dedicated and productive way on behalf of
American families.
Mr. GOODLING. Mr. Speaker, I yield myself 5 seconds first just to
remind everyone on that side that they had 2 years when I was a
minority Member in the committee, and the words ``minimum wage'' were
never raised.
Mr. Speaker, I yield 4 minutes to the gentleman from California [Mr.
Riggs], who added the amendment to the portal-to-portal bill, which
brought about the minimum wage.
Mr. RIGGS. Mr. Speaker, I thank the gentleman for yielding me time to
speak during what has, I think, truly been a remarkable and historic
week and the most productive and significant Congress in modern
history. In the last 72 hours we have enacted truly historic changes
which will better the lives of millions of our fellow Americans.
We have made it easier to move from welfare to work, arguably a very
difficult transition especially for single mothers. We are making work
pay more than welfare by raising the Federal minimum wage, if not to
keep pace with inflation at least to restore some of the purchasing
power of the minimum wage that has been eroded by inflation, and we are
making it easier for American workers in the workplace to get and keep
accessible affordable health insurance.
Welfare reform, which we enacted earlier this week, fundamentally
changes a system that, in my view, over time had come to replace
compassion with a system of political patronage, and it is estimated
that our welfare reform will help move 1.3 million of our fellow
Americans into productive jobs by the year 2002.
Health insurance reform, which we enacted yesterday on this floor,
will end job lock. For many of our fellow Americans, it will make it,
as I said earlier, easier to get and keep health insurance. It will
make it easier for people to move from job to job without the risk of
losing their health insurance due to a pre-existing medical condition,
and it will eliminate the longstanding insurance practice of excluding
Americans from health insurance based on a pre-existing health
condition.
And today we take up the minimum wage package, which is coupled with
some very necessary and important small business tax incentives. I was
proud to offer the minimum wage increase when that legislation first
came to the House floor, and the minimum wage increase will help
roughly 10 million of our fellow Americans, and it will reverse this
perverse incentive where welfare is more attractive than work.
I think many of us recognize, and this is truly on a bipartisan
basis, that we must in America, if we want to move people from welfare
to work, make work pay more than welfare. We must make work more
attractive than welfare.
Now, this stands in stark contrast to the last Congress, and I am not
going to get real partisan for a moment, but I could not help but
notice how many speakers on the Democratic side of the aisle have come
down to the well during the debate on the rule and during this general
debate on the legislation and have made extremely partisan remarks. I
think that is unfair.
I think the record speaks for itself. The last Congress, the
Democratically controlled Congress, did not pursue welfare reform
legislation, did not pursue an increase in the Federal minimum wage,
and, of course, did pursue a dramatic overhaul of the American health
care delivery system, a 13,000-page bill that would have nationalized
and arguably led to a big government takeover of the private health
care delivery system in America.
But that partisanship aside, I think it is very important to look at
the fact
[[Page H9852]]
that we have on a bipartisan basis in this Republican-led Congress been
able to enact these very important and historic reforms that emphasize
work, families, and personal responsibility while leaving in place a
very strong safety net for the genuinely indigent and the desperately
poor in our society.
We are, and I think we can all take pride in this as we prepare to go
home and report to our bosses, our constituents, back home in our
congressional districts, we are building a better America with more
hope and more opportunity for millions of our fellow citizens and that
is, again, why I say this is the most productive and significant and
historic Congress in modern history.
Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California [Ms. Pelosi].
Ms. PELOSI. Mr. Speaker, I thank the gentleman for yielding this time
and thank him for his great leadership in this Congress. I know that we
will continue to be well-served by him until the last day of this
Congress and we will be the beneficiaries of his legacy for a long time
to come. I thank him again for yielding.
Mr. Speaker, today is a good day, not a great day but a good day for
the American worker. It is a day that the Republican leadership has
finally been dragged kicking and screaming in support of raising the
minimum wage.
Democrats can be proud that at long last the pressure that we have
brought to bear on Republicans has finally produced real results for 12
million working Americans. The Republicans have finally caved after
months of staunch opposition-voting five times to defeat Democratic
efforts to bring up an increase in the minimum wage.
Even with polls showing over 80 percent of the American people
support increasing the minimum wage, the extreme Republican majority
tried to kill the bill or gut the bill and blunt its impact. These
delaying tactics cost American workers $5.6 billion. Faced with the
failure of their extreme agenda, moderate Republicans finally have
embraced this Democratic initiative, but in the meantime the American
worker has paid the price for Republican extremism.
By refusing to take action on the minimum wage sooner, Republicans
have cost American workers, as I have said, $5.6 billion in lost wages.
That increase in the minimum wage would have paid for 3\1/2\ months of
groceries, 6 months of health care, 4\1/2\ months of utility bills or 2
months of housing. Too bad it took 18 months to shame Republicans into
doing the right thing and raising the minimum wage from a 40-year low
in purchasing power.
House Republican leader, the gentleman from Texas [Mr. Armey], has
said, and we have quoted him many times, that he would fight an
increase in the minimum wage with every fiber of his being. That was an
earlier statement. As recently as Monday he blasted the minimum wage
increase yet again saying that it was not a matter of importance to
real people and dismissing it as an inside-the-beltway issue.
I urge our colleagues to recognize the importance of the Democratic
effort and increase the minimum wage.
Mr. CLAY. Mr. Speaker, I yield 1 minute to the gentleman from
Missouri [Mr. Volkmer].
Mr. VOLKMER. Mr. Speaker, Members of the House, yes, it is a great
day for the people of this country who are the working poor. That is
right, they are the working poor. They are the lowest level in the
financial status that we have, but they work just as hard as my
colleagues and I do and everybody else does.
This should have been done a year ago. That meant that those people
would have been able to buy shoes for the kids. Not at the retail
store, but no, at the yard sale, at the Salvation Army secondhand
store.
I challenge all of my colleagues to realize that these people who
work every day for the minimum wage are not able to live like my
colleagues and I. My colleagues must realize that these people scrape
and save to just make ends meet every day.
I challenge those that are going to vote against this bill to take
this month of August and go out and visit with some of the people in
their home areas that earn the minimum wage and find out how they have
to live and how my colleagues wanted them not to have that minimum wage
increase.
Mr. GOODLING. Mr. Speaker, I reserve the balance of my time until
they are all finished.
Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Hawaii [Mrs. Mink].
(Mrs. MINK of Hawaii asked and was given permission to revise and
extend her remarks.)
Mrs. MINK of Hawaii. Mr. Speaker, I thank the gentleman for yielding
this time to me.
Mr. Speaker, it is very important for this body and the country to
realize that the vast majority of workers in this country working for
the minimum wage are women, and it is these hard-working women who are
supporting their families that we need to celebrate today because they
are finally going to get 90 cents an hour more, not a whole lot, but it
is $36 week, $1,800 a year, something which they should have been
getting many, many months ago. They are finally getting it. We have
been preached at about the importance of work, so today finally they
are getting a pay raise to help support their families.
Under welfare we are forcing single mothers to go to work. With this
minimum wage they will have a chance to lift their families out of
poverty. Not a single person in this body ought to regret the fact of
minimum wage going up today.
Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Connecticut [Ms. DeLauro].
Ms. DeLAURO. Mr. Speaker, this is a great day that almost never came.
America needs a raise. It is a tribute to the dignity and to the hard
work of those Americans who get up every morning and go to work for the
minimum wage that we are here today about to pass legislation raising
the minimum wage by 90 cents.
The American people's overwhelming support for a minimum wage
increase has won the day today, but we had to overcome the steadfast
opposition of a Republican leadership who vowed to stop it and even
denied that minimum wage workers exist in this country.
I know different. I have a letter from Janis Venditto, a working
mother in Hamden, CT, whose husband fought in the Persian Gulf war.
They are struggling to feed their kids and to pay their bills and my
constituent says:
I really wish someone out there can really listen to me for
once. Raise the minimum wage. I know I am not the only person
in this situation. It is a shame that the most wonderfulest
country in the world cannot give us moms a small break.
That is what this is all about. We need to pass the minimum wage.
Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentlewoman from
New York [Mrs. Maloney].
Mrs. MALONEY. Mr. Speaker, there is a crisis of fairness in this
country. The rich are getting richer and the poor are getting poorer.
In real terms, the minimum wage is at its lowest level in 40 years.
Where I come from if one earns the minimum wage and work full-time,
they live in extreme poverty. More than 600,000 New Yorkers will
benefit from this increase.
This is also a woman's issue; 5.7 million women earn the minimum
wage. That is 59 percent of all minimum wage earners.
Raising the minimum wage promotes families. If we want to encourage
work and make it pay, we need to do this for the American people.
Unfortunately, it took a Democratic uproar in Congress and 80 percent
of the American people to get the Republican Congress to give in and do
the right thing.
The current minimum wage is indefensible, it discourages work, it
demoralizes workers, and it makes a mockery of fairness.
Mr. GIBBONS. Mr. Speaker, I yield my remaining 1 minute to the
gentleman from Maryland [Mr. Cardin] to close debate on our particular
part of this.
{time} 1115
Mr. CARDIN. Mr. Speaker, once again let me thank the gentleman from
Florida [Mr. Gibbons] for his leadership on this legislation.
Mr. Speaker, we are going to be able to enact this legislation. Why
we are going to be able to do it, it is because it is the right mix. We
have a well-balanced bill. It is good for small businesses and it is
also good for those people who work for small businesses.
[[Page H9853]]
It provides real help to small businesses by extending tax credit
provisions for work opportunity tax credits; employer-provided
educational assistance; the R&D credit; retirement simplification that
I talked about before, and which the gentleman from Ohio [Mr. Portman]
has talked about; the small business expensing, where it helps small
businesses because it increases the minimum wage.
Mr. Speaker, I hope we will use this formula in the future in
considering legislation, and rather than looking at extreme
legislation, let us look at well-balanced legislation. It is in the
interests of our constituents, and I urge my colleagues to support the
conference report.
Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan [Mr. Bonior].
Mr. BONIOR. Mr. Speaker, House Majority Leader Dick Armey loves to
quote country music lyrics.
Well, the Republican strategy on the minimum wage reminds me of
another old country song. It's called, ``Walk out Backwards Slowly So
I'll Think You're Walking In.''
Republicans have been walking up to the podium today to take credit
for raising the minimum wage. But we all know that beyond a few people
like the gentleman from New York, Jack Quinn, and a few others over
there, they have been running away from this issue for months.
Five separate times, this Republican Congress blocked an increase in
the minimum wage. Newt Gingrich implied that the minimum wage should be
based on Mexican wages. Tom DeLay said that minimum wage families don't
really exist. John Boehner said he would commit suicide before voting
to raise the minimum wage.
Dick Armey said he would fight a minimum wage increase with every
fiber in his being. And just last week, he said the real people don't
care about the minimum wage.
Well, I think they've found out the past few months that real people
do care about the minimum wage. The American people understand that if
we want to move people from welfare to work, we have to make work pay.
You can't raise a family on $4.25 an hour.
These are people who work hard--and work long hours--to give their
kids a better life. They deserve to be treated with dignity and
respect.
Mr. Speaker, it's sad that it took 18 months for Democrats to
browbeat the Republicans into doing the right thing for America's
families. But thanks to public pressure, and the hard work of people
like Senator Ted Kennedy, an increase in the minimum wage will be
signed into law by Labor Day.
Mr. Speaker, the Republican leadership can quote all the country
songs they want. This is one song that has a happy ending for America's
families.
Mr. CLAY. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from Missouri [Mr. Gephardt], the minority
leader, who will be the majority leader.
(Mr. GEPHARDT asked and was given permission to revise and extend his
remarks.)
Mr. GEPHARDT. Mr. Speaker, in a few short moments I believe this
House of Representatives will vote to raise the minimum wage, which is
at a 40-year low. It is severely impacting, in a negative way, American
families.
I realize that for many of my colleagues on the other side of the
aisle this is a difficult vote to cast. Even for some who will support
this increase, this is a vote of resignation, not one of joy. But while
this might not be an easy vote for some of you, I believe with all my
heart that this is the right vote and probably the most important vote
of this Congress.
Let us put aside this morning all the ideology, all the partisan
differences, all of the political argument, and let us put one thing
and one thing only in our mind today, which is what the gentleman from
Michigan [Mr. Bonior] talked about: That is American families that are
living day-by-day today on the minimum wage.
I had a woman in my district recently, as I went door-to-door, tell
me that she had two minimum wage jobs, worked 16 hours a day, two
children. She said, ``Congressman, I cannot pay my bills. But that is
not what I am worried about. That is my problem.'' She said, ``What I
am worried about is that I am never home to raise my children.'' She
welled up as she talked about her failure of responsibility to raise
her children to be productive citizens. She said, ``I am not worried
that they will be victims of crime, I am even worried they will commit
crimes.''
It went through me like a knife. We had women out here the other day
who talked about living on the minimum wage, what it means to raise a
family on $8,500 a year. We had a woman go through her bills. She had
her bills: How much she paid for rent, how much she paid for health
care, how much she paid for groceries.
She said, ``You know, at the end of the month I always have to put
three bills aside because I cannot pay them.'' She said, ``My son hurt
his hand in football. We went to the emergency room. They gave me a
bill for $1,500 after he was treated.'' She said, ``I will never pay
that bill.''
The people of this country are responsible. They want to work. They
want most desperately to raise their children to be productive
citizens. This bill, more than anything we will do in this Congress,
gives those American families and those parents and those children the
ability to do what they desperately want to do. Two years from now,
$1,800 more than they are able to earn today will make their lives
better, and allow them to meet their most important and fundamental
human responsibility, which is to raise their children to be productive
citizens.
Mr. Speaker, Republican or Democrat, conservative, liberal, or
moderate, please vote for this bill for the American people.
Mr. GOODLING. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, is it not amazing? I hope the American people have been
listening to this discussion. We have heard from the other side today
that yesterday we had welfare reform that was a bipartisan effort
because 98 Democrats supported it, but the last speaker did not support
it. Then on this side we had 93 who supported minimum wage, but that is
a Democrat program. Is that not amazing?
What I want to remind the American people is that for 2 years this
minority was in the majority, they had the majority in the House, they
had the majority in the Senate, and they had the White House. Not one
word in committee was ever mentioned about minimum wage, not one word.
Oh, but thanks for the conversion: An election year conversion. We are
happy to have you converted. It is good to have you with us.
But nevertheless, we realized from day one, as the President said,
because he is the only one who mentioned minimum wage during the 2
years when they had this big majority, and what did the President say?
``Hiking the minimum wage is the wrong way to raise the incomes of low-
wage workers.'' That is what the President said, the only thing
mentioned about minimum wage.
We knew on our side that we had to do more than just raise the
minimum wage if we were going to help American workers, if we were
going to help those most in need. We knew that just raising the minimum
wage could be devastating if we did not do the other things that are
now in this package, which makes it a good package.
We knew that changes would be necessary in the tax program. We knew
that including spousal IRA's was important. We knew educational tax
assistance to workers was important. So when we got the whole package
together, we then had this wonderful election year conversation.
Mr. Speaker, I yield the balance of my time to the gentleman from
Ohio [Mr. Kasich].
The SPEAKER pro tempore. The gentleman from Ohio [Mr. Kasich] is
recognized for one and three-quarters minutes.
Mr. KASICH. I just wanted to rise and make the point, Mr. Speaker,
that was raised by the delegate, the gentleman from Puerto Rico [Mr
Romero-Barcelo], regarding the 936 program that currently exists, where
we try to create incentives for companies to create jobs. We believe
that that whole 936 had a very big element of corporate welfare, where
companies were able to get signficant tax reductions without providing
the kind of jobs and income levels that we had anticipated.
A lot of folks in Puerto Rico and a lot of economists would argue
that we
[[Page H9854]]
should be very careful as we work our way through the wage credit,
where we more approximately give a tax incentive based on what you have
actually done for an individual in Puerto Rico to get a job. I
understand that over the course of the next 10 years we are going to
phase this out.
I have to tell the Members, I have been thrilled with the work of the
chairman of the committee, the gentleman from Texas [Mr. Archer], to
close loopholes in the Tax Code that have been given to folks that do
not represent strong economic incentives to create growth. What I would
say, through, as we move through this period in the next few years, we
should take our time to make sure that that wage credit is viewed
carefully. There may be a way to reform that program where we in fact
can help people in Puerto Rico and provide economic growth, but yet not
have tax loopholes that represent giveaways to large corporations.
Mr. Speaker, I appreciate the chairman of the committee yielding to
me. I think he made an outstanding statement on this bill.
Mr. GIBBONS. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from Texas [Ms. Jackson-Lee].
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise to support the
Democratic-led fight to raise the minimum wage.
Mr. Speaker, I rise today to voice my reluctant support for the
conference report on H.R. 3448, the Small Business Job Protection Act
and minimum wage increase.
It was my hope that we would not turn the issue of raising the
minimum wage into a political football. The weight of public opinion is
squarely on the side of raising the minimum wage, but the Republican
leadership of both Houses of Congress could not provide a clear victory
for the working poor of this country.
This conference report would eliminate the existing provision which
requires employers of tipped employees to pay at least 50 percent of
the statutory minimum wage in case, and replaces it with a provision
which locks the cash wage at the current standard of $2.13 an hour. It
would also deny any automatic future increases in the minimum wage to
those who work and earn tips as a part of their income.
To further add insult to hard working Americans, this conference
report delays the initial start of the 45 cents an hour increase to the
minimum wage from July of this year until October 1.
The conference report also eliminates the existing provision
exempting certain computer professionals from requirements that they
receive overtime pay. This would mean that no additional computer
professionals will be protected by the Fair Labor Standards Act's time
and one-half overtime requirements.
In my Houston, TX district that would mean a real income drop for
computer professionals who would no longer be subject to this
protection.
This conference report would make permanent a failed experiment
contained in the 1989 Amendment to the Fair Labor Standards Act that
expired in 1993. Where employers were allowed on a temporary basis to
pay a rate lower than the minimum wage. This change if widely used
would create an incentive to displace older workers.
Paying this lower wage to workers under age 20 for 90 days presumes
that it must cost them less to live than you or me. This subminimum
wage workers will not get a corresponding break in the cost of living.
They will still have to care for their children and families just as
they are required to do today. This change in the Fair Labor Standards
Act would restrict these worker's freedom to seek other employment
opportunities that may be presented to them for fear of taking lower
pay for a quarter of their first year of employment.
Some would argue that a raise in the minimum wage would result in
high unemployment so the idea to limit the number of workers who would
qualify for the increase is a good idea. If the proposal was more than
a mere 90 cents divided between 2 years their might be some merit to
that position. The real discussion should be about supporting those
poor families that choose work over welfare.
The first step to moving people from poverty to self sustainment is
to raise the minimum wage for all workers with malice toward none. I
will support this bill to raise the minimum wage because this is
consistent with the long-standing fight we have waged to help hard-
working Americans, of which some 69 percent are women with children,
get a fair wage for a days work.
This is long overdue.
Mrs. MINK of Hawaii. Mr. Speaker, today is a great day for American
workers and their families--not only because we are raising the minimum
wage, but because the voice of the American people was heard by the
Congress of the United States.
This bill is a true example of how government and this Congress can
work together for the people of this Nation. Despite opposition to
raising the minimum wage from the major party, the workers and families
all across the country rose up and made their voices heard in support
for an increase in the minimum wage. And today we are finally
responding to their cry for a decent wage for an honest day's work.
The people of this Nation know they are working harder today for
less, struggling to make ends meet, and barely getting by even in a
strong economy. Over the last decade they have watched as the salaries
of CEOs and their corporate bosses skyrocket, as the value of the
minimum wage decreased--falling 50 cents since the last increase in
1991.
Mr. Speaker, this increase is even more critical today because of the
passage of the welfare reform bill which will soon become law. The new
welfare bill will force many women into the work force. It is fine to
emphasize work, but we must assure that work pays a living wage.
Many women currently on welfare work at minimum wage jobs. One of the
biggest misconceptions about welfare is that welfare mothers stay at
home and collect welfare check. In most cases this is simply not true.
Forty percent of women on welfare combine their income from work and
welfare in order to care for their children. A minimum wage income is
not enough to support the basic needs of a family, so women must
continue to receive welfare assistance while they work in order to care
for their families.
This bill moves us in the right direction for many women in the work
force. Ninety cents an hour, $36 a week, $144 a month. It's not much,
but it could mean the ability to buy a desperately needed pair of
children's shoes or to pay the extra cost of heating in the winter.
Raising the minimum wage means women--those on welfare and many who are
not--will now be able to better care and provide for their families.
Women make up 64 percent of the minimum wage work force. It is for the
women of this country that we must pass this bill today.
In addition, Mr. Speaker, I would like to note the small business tax
relief provisions and the assistance we are providing to this important
sector of our economy. Also, I want to express my support for the
provision which allows women who work at home--home makers to invest in
IRAs. This is an important step for the economic self-sufficiency and
economic security of women in this Nation.
Mr. Speaker, I urge my colleagues to support this conference report.
Mr. POSHARD. Mr. Speaker, today this body can be proud to be passing
legislation that will directly impact the lives of millions of American
workers. I wholeheartedly support this legislation, and while we have
met our goal of providing a more livable wage for those hard-working,
citizens who desperately need it, this bill also provides tax
incentives to help our small businesses as well. Provisions such as the
Work Opportunity Tax Credit will allow our small business owners to
claim substantial tax relief at the same time they are giving vital
opportunities to new workers.
This measure also rewards the invaluable efforts of housewives across
the Nation by allowing nonworking spouses to contribute $2,000 annually
tax free to an IRA, finally according the raising of children and other
home-related activities the respect they deserve in regard to the tax
code. Many more pension reform provisions are included which will help
empower the American people to save for their own retirements, which in
time will help to take the load off of Federal entitlement programs. At
the same time, we have taken strides toward curbing corporate welfare,
and have provided incentives in the tax code for the adoption of
children.
Perhaps it has taken too long to reach this goal, but we have truly
given hope to legions of citizens with this bill. This legislation is
all about rewarding work, and it, combined with the welfare reform
legislation of earlier this week, goes a long way toward giving
incentives to individuals and families to gain economic independence
and self-sufficiency through viable work opportunities and wage rates.
I urge all of my colleagues to vote in favor of the conference report.
Mrs. COLLINS of Illinois. Mr. Speaker, I would like to say that I am
pleased that the Democrats and the Republicans have come to an
agreement on raising the minimum wage. It should have been simple: No
one can support a family working in a job that pays the current minimum
wage. But because the Democrats stayed on task and on track, we were
able to convince the Congress that this was the right thing to do for
the American economy and for the American family.
For the minimum wage worker, a 90 cents an hour increase means a lot.
It could mean
[[Page H9855]]
the difference between having a roof over your head or living in
substandard housing. It could mean the difference between providing a
healthy, balanced diet for your family or waiting in line at a soup
kitchen so your children can have a square meal. It could mean the
difference between having a telephone or being isolated. It could mean
the difference between a car or relying on expensive public
transportation to get to your job, the doctors, or the grocery. With
the increase in the minimum wage, after the 2-year phase in, the
American worker will have about $36 a week extra.
In Illinois, nearly 11 percent of the wage earners are paid the
minimum wage, currently only $4.25 an hour. There are over 12 million
Americans currently working in jobs that pay the minimum wage, and with
that, the average wage and salary paid per hour for employee
compensation in the private, nonfarm labor sector in 1995 was $12.25
per hour.
According to the Bureau of the Census, women make up 46 percent of
the work force, and 40 percent of those women are working mothers. A
single mother cannot work at a minimum wage job if she has to pay for
nonfamily child care because she can't afford it. When President
Clinton declared a ``National Pay Inequity Awareness Day'' his
statement provided the information that last year American women earned
only 75 cents for every $1 a man brought home, with African-American
women and Hispanic women collecting just 66 cents and 57 cents,
respectively, when compared to the male wage earner. Raising the
minimum wage will help women achieve a better payday.
Students are a large proportion of minimum wage earners. Students who
are supple- menting their family's income by working are not a thing of
the past; they are the foundation of many communities. In 1980, the
minimum wage was raised from $2.90 to a whooping $3.10, and since then
it has only gone up to $4.25 where it has stayed since 1991. Since
1980, the cost of college has gone up 260 percent, but the minimum wage
for earners trying to pay their way through school only went up by
about 30 percent.
Raising the minimum wage will not fill anybody's wallet or bank
account, but it will help change lives.
I urge my colleagues to support this conference report and put a
little more in the pockets of the American worker by raising the
minimum wage.
I yield back the balance of my time.
Mr. STOKES. Mr. Speaker, I rise in strong support of the conference
report to H.R. 3448, the Small Business Job Protection/Minimum Wage
Increase Act. After months of staunch opposition from our Republican
leadership, I am pleased that my colleagues on the other side are
finally able to join in support of a minimum wage increase.
At a time when wage inequality has widened dramatically in the United
States, this piece of legislation would give over 21 million hard-
working Americans a well-deserved wage increase. In addition, a higher
minimum wage will serve to benefit families with the least income,
those families which have been the target of many of this Republican
led Congress' pernicious legislative efforts--low-income and lower
middle class families.
Mr. Speaker, research has demonstrated that at least 10 million
Americans working at minimum wage would take home an additional $1,800
a year when this legislation becomes law. There can be no doubt that
this modest increase in the minimum wage will make a substantial
difference for thousands of minimum wage earners in my district in
addition to millions of other workers across the Nation who, despite
working hard every day, still find themselves in the midst of poverty.
According to the Department of Health and Human Services, with this
90 cent wage increase, as many as 300,000 families could be lifted
above the poverty line, including more than 100,000 children.
Mr. Speaker, in my congressional district, 22 percent of my
constituents live below the poverty line. There is no doubt in my mind
that our Government must do all that it can to provide wage equity for
the thousands of working families who work hard but most still live in
poverty.
It's been 5 long years since America's minimum wage workers got a
raise. The proposed minimum wage is a logical step in our efforts to
enable families to be productive and self-supporting.
Mr. Speaker, H.R. 3448 is an historic effort toward economic
justice. I urge my colleagues to support this vital legislation.
Mr. BENTSEN. Mr. Speaker, I rise in support of H.R. 3448, the Small
Business Job Protection Act of 1996, and in strong support for
America's working families who are finally getting the raise they
deserve.
Increasing the minimum wage will help ensure that holding a job pays
more than being on welfare and it will help lower-income families
struggling to make ends meet, it puts our values of work, family, and
responsibility ahead of partisan gain or bottom line accounting. This
increase will restore not just the purchasing power that has eroded to
nearly a 40 year low, but the self-esteem and pride that can't be
scored by the CBO or OMB.
Mr. Speaker, families living on the minimum wage do exist and a
living wage is integral for workers to provide for themselves and their
families in dignity. These are not families seeking a handout, or
special provision in a nonrelated tax bill, or line item in an
appropriation bill. What they are seeking is the opportunity to provide
for themselves and this Congress should not frustrate their
determination to pursue this better, dignified life.
Mr. Speaker, we may disagree on a number of social economic theories.
However, this disagreement cannot overshadow the pressing concern that
families of goodwill are entitled to pursue a living wage.
I also support the provisions in this legislation to help small
businesses provide retirement security for their workers and their
families. While there are a number of measures not included in this
legislation that should have been, I strongly support the SIMPLE plan
and the increase in the contribution to an Individual Retirement
account for nonworking spouses. These provisions will allow more
families to save for their retirement and not penalize parents who
choose to stay home and raise their children.
However, I am disappointed that we didn't do more to help families
provide for their retirement. This conference agreement should have
further expanded IRA eligibility and allowed penalty-free withdrawals
from an IRA for a first home purchase, tuition, major medical expenses,
or during long-term unemployment, but doesn't. That being said, I do
support this conference report and pledge to pursue these changes in
future legislation.
Mr. FRANKS of New Jersey. Mr. Speaker, I rise today in strong support
of the conference report for H.R. 3448, the Small Business Job
Protection Act.
Mr. Chairman, I voted against the original House bill which increased
the minimum wage by 90 cents because I firmly believe that losing one
American's job is not worth 90 cents. Statistics prove that eight of
the last nine increases in the minimum wage have resulted in either a
loss of jobs or an increase in the inflation rate. In fact, President
Clinton said that raising the minimum wage is not the way to improve
the economic well-being of the lower class. I believed that we must
include tax reforms for small business. Unfortunately, the House chose
not to combine the minimum wage bill and the small business tax
reforms. The Senate bill did combine the two initiatives.
Had the Senate bill been considered in the House, I would have
unequivocally voted in favor of the bill. The wage increase and the
small business tax reforms will prevent the loss of jobs and the
raising of product prices.
Mr. Chairman, I proudly rise in support of the conference report
Small Business Job Protection Act.
Mr. SABO. Mr. Speaker, today is a great day for American workers who
will get a pay raise on October 1 because the Republican majority
finally allowed a vote to increase the minimum wage. While $.90 an hour
is not a total solution to the growing income gap that plagues our
society, it will make a big difference to the 12 million workers who
will receive this boost in pay.
American working families have been forced to sit on the sideline
while congressional leaders went through legislative maneuvers, made
empty promises, and generally used dilatory tactics. By refusing to
take action on the minimum wage sooner, Republicans have cost American
workers $5.6 billion in lost wages. Had the increase taken place when
it was first proposed in this Congress, it would have paid for 3\1/2\
months of groceries, 6 months of health care, or 2 months of housing.
Today, however, the majority realized they could no longer stall and
the minimum wage will increase from a level that left it at a 40-year
low in purchasing power.
For many years, I have been speaking about the growing income gap in
America. Several months ago, due in large part to the Republican
Presidential race, this issue finally catapulted to the forefront of
the Nation's consciousness. In fact, it has been hard to open a
newspaper op-ed page or turn on a television news program without
hearing something about declining worker wages, increased layoffs, and
increasing corporate profits and CEO pay.
Thanks in part to the deficit reduction measures we passed in 1993,
the American economy today is in good shape. We enjoy strong growth
combined with low unemployment and low inflation. The stock market has
reached record highs, as have profits of many American companies. This
should have all seemed like good news for the average American family;
for, in the past, Americans at all income levels shared in our Nation's
prosperity. However, in recent years while we have seen stock prices
and corporate profits rise, the incomes of most middle-class American
families have stagnated or dropped.
[[Page H9856]]
If stagnating wages were the only problem that working Americans had
to face, things might not be so bad. But, in recent years our Nation
has also seen unprecedented worker layoffs in corporate America. Of
course, it is understandable that such upheavals may occur as our
economy becomes more technology-based and integrated into global
markets. What is difficult to understand, however, are the tremendous
bonuses and pay increases enjoyed by the very CEO's who lay off
thousands of workers.
The United States has prided itself on being a nation of the middle
class--one in which if you work hard and follow the rules, you can
expect to do well enough to support yourself and your family.
Alarmingly, this is no longer true for an increasing number of
Americans.
In the decades following World War II, all American workers shared in
the Nation's prosperity. Over the past 20 years, however, only high-
income Americans have moved ahead economically. Between 1977 and 1990,
for instance, the average after-tax income of the wealthiest 1 percent
of our population increased by 67 percent, after adjusting for
inflation. During this same period, the average after-tax income of the
bottom fifth decreased by nearly 27 percent.
This is not a problem that affects only the poor. Every year,
thousands of Americans are laid off from well-paying middle-class jobs,
to be left with a choice between a new job that pays less or the
unemployment line. Clearly, this trend cannot continue.
America's level of income inequality is already higher than that of
any industrialized nation. Our middle class is evaporating, and we are
well on the road to becoming a Nation divided between a few very rich
and many who simply struggle to get by. None of us, in the works of
Labor Secretary Robert Reich, will ``want to live in a society sharply
divided between winners and losers.''
The widening income gap lays before us the question of what kind of
country we want to be: One sharply divided between the rich and poor,
or one in which all citizens can benefit from a strong economy. I
believe that our choice is clear. America has always been the land of
opportunity. We should work together for policies that do not favor any
income group, but enable all Americans to share in our Nation's
strength and prosperity.
Today we take a small step in the right direction for those at the
very bottom of the income ladder by passing this increase to our
Nation's minimum wage. The bill increases the Federal minimum wage from
its current $4.25 an hour to $5.15 per hour. I applaud this action and
the victory for American workers.
The American people should feel good today because they forced Newt
Gingrich and the Republican leadership to sit up, listen, and act. The
public said that America needs a raise, and on October 1, millions of
working Americans will get that raise and find it just a little easier
to provide for their families.
Mr. BLUMENAUER. Mr. Speaker, providing for their families is a daily
struggle for the working poor. Basics like food, shelter and healthcare
are out of reach for too many full-time employees and their children.
Congress, so far, has not chosen to improve upon this sad situation.
What we have seen is welfare reform which threatens the little
assistance available for those with low-paying jobs. I fear, Mr.
Speaker, that poverty may continue to be the reward many receive for
their work.
There are solutions to these problems--the proposed minimum wage
increase being the most obvious. This simple act will do more to create
self-sufficiency than any government program or bureaucracy. I am
pleased to be a part of this long overdue adjustment.
Mr. FAZIO of California. Mr. Speaker, I am very pleased to rise in
support of H.R. 3448, a bill to increase the minimum wage and provide
various tax incentives.
After a long, hard battle, we can be proud of passing a bill that
will produce real results for 12 million working Americans.
This increase will pay for an extra 3\1/2\ months of groceries, 6
months of health care, 4\1/2\ months of utility bills, or 2 months of
housing. America's working families are finally getting the raise that
they deserve.
This bill, like the health insurance reform bill that was passed
yesterday, isn't an ``inside the Beltway'' issue like some in the
Republican leadership have claimed. It's common-sense, pro-family
legislation that many of us in Congress have been championing from the
beginning.
In addition to the minimum wage increase, this bill also contains
some important tax provisions for Americans and small businesses.
The conference agreement includes a pension provision to allow
spouses who do not work outside the home to contribute $2,000 annually
to an IRA. Now couples living on one income can save the same amount as
two-income couples. Not only does this provision encourage saving for
thousands of households across the country, it reinforces a feeling
that we have started to lose: staying at home to raise a family is one
of the most important jobs in America. It is a full-time job which
should be rewarded with the opportunity to save for the future.
Along the same family-strengthening lines, H.R. 3448 includes a tax
credit up to $5,000 for parents who adopt children. Also included is a
$6,000 credit for parents who adopt children with special needs. This
provision is a powerful one. It encourages the union of couples who
long to be parents with children who might not otherwise belong to a
loving family.
Finally, while reinforcing our nation's family structure, H.R. 3448
also strengthens our Nation's economic structure by extending the
research and development [R&D] tax credit. Federal support for R&D is
the quintessential investment in our Nation's future. R&D is
responsible for approximately one-half of the productivity in the
Nation's economy and is the single most important source of long-term
economic growth.
In my home State of California, R&D has been particularly important
to the growth of the State's economy. California received about $722
million in energy R&D funding in 1995. We are heavily involved in
programs like energy conservation research and research on fusion
energy development. These programs would have suffered severe setbacks
under the original bill the house passed in May. Fortunately, an
extension of the R&D tax credit is included in the bill before us
today.
All of these measures will strengthen the economic foundations of our
families and will allow them to invest in themselves and their futures.
I urge my colleagues to support the conference agreement for H.R. 3448.
Mr. COSTELLO. Mr. Speaker, I rise in strong support of an increase in
the minimum wage. The 90-cent increase that is being considered today
by the House of Representatives will begin to address the erosion in
American workers' purchasing power. If the minimum wage is not
increased, it will fall to its lowest level in 40 years.
Mr. Speaker, this is essential legislation that directly impacts
millions of American workers. Over 500,000 of these workers are in
Illinois. Because the majority of American workers who are paid the
minimum wage are over 20 years old, the increase will aid these workers
in supporting themselves and their families. As we encourage people to
find jobs instead of relying on public welfare, we must work to ensure
that the minimum wage is a living wage. Receiving a living wage makes
workers more productive for society and more willing to work. As a
result of the reduction in turnover, the employer's costs of recruiting
and retraining are lower.
Raising the minimum wage is expected to immediately lift it 300,000
families out of poverty. My colleagues who charge that a 90-cent
increase is nominal and unnecessary probably are not aware that a 90-
cent increase in the minimum wage could pay for seven months of
groceries, rent or mortgage payments for 4 months, or a full year of
health costs. These are real expenses that working people have and that
can be addressed by a minimum wage increase.
Many of my colleagues also charge that the minimum wage increase will
result in lost jobs. However, many economists dispute this claim. In
addition, according to the Bureau of Labor Statistics, 10 million jobs
have been created since the last increase in the minimum wage.
These are among the reasons why I strongly support a 90-cent increase
in the minimum wage and urge my colleagues to join me in voting for the
increase.
Mrs. MORELLA. Mr. Speaker, I rise in strong support of the conference
report on H.R. 3448, the Small Business Job Protection Act. I commend
the members of the Conference Committee for their diligence in sending
to the House floor a bill that will provide tax relief for small
businesses, equal individual retirement account [IRA] treatment for
spouses who work at home, and will raise the minimum wage for our
Nation's workers.
I have long supported a so-called Homemaker IRA, which is part of the
Women's Economic Equity Act (H.R. 3857) which I introduced last month
in my role as co-chair of the Congressional Caucus for Women's Issues.
Current law penalizes one-income families by limiting the tax deduction
that spouses who work at home can take for money put aside for
retirement. Presently, spouses who stay at home to raise children or to
take care of an elderly parent can only save $250 above the $2,000
allowed for the spouse who works outside of the home.
Women face a number of barriers when it comes to saving for their
retirement. They live longer, earn less than their male counterparts,
and receive less from Social Security. The spousal IRA, included in
this bill, will go a long way toward helping American women during
their retirement years.
This conference report also extends, until June 30 of this year, the
tax exclusion for graduate level education assistance provided by an
employer. I have supported, since coming to Congress, legislation that
would restore and make permanent the exclusion from gross income of
employer-provided education assistance. This partnership between
employer and
[[Page H9857]]
employee has enabled millions of Americans to upgrade their work skills
in order to improve their productivity and better support themselves
and their families.
I am also pleased that the adoption tax credit is part of this
package. The provision is similar to the tax credit approved in the
Adoption Promotion and Stability Act, which passed the House in May,
and which I strongly support. The conference report allows individuals
with adjusted gross incomes below a certain level to deduct, over 5
years, up to $5,000 per eligible child--$6,000 for the adoption of
hard-to-place children--from their income tax liability. This adoption
tax credit will help ease the expenses of adoption, allowing more
families to adopt.
Recently, I introduced a resolution regarding tuition prepayment
plans by States to allow families to save for their children's college
education at a fixed rate. I am very pleased that this conference
report includes an amendment which would prohibit the Internal Revenue
Service from taxing State-sponsored prepaid college tuition plans until
the funds are distributed. These State-sponsored plans have allowed
more than 500,000 American families to save years in advance for their
children's college tuition. The provision regarding prepaid tuition
plans will make it possible for more States to adopt similar programs,
affording more families the opportunity to save for their children's
education.
From raising the minimum wage to providing tax relief for small
businesses, this conference report is an example of bipartisan
cooperation for the benefit of all Americans. Again, I commend the
conferees, and I urge my colleagues to support this fine legislative
effort to promote economic prosperity.
Mr. CAMP. Mr. Speaker, I rise to strongly support H.R. 3448, the
Small Business Job Protection Act and congratulate and thank the
chairman of the Ways and Means Committee, Mr. Archer, for his
leadership and success in this matter.
I am very pleased that the bill includes the Tax Fairness for
Agriculture Act which I sponsored with bipartisan support from many of
our colleagues. The Tax Fairness for Agriculture Act will help State
and county farm bureaus across the country continue to serve the farm
families which are their members.
I am particularly pleased that the conferees agreed with the Senate
to make this proposal effective for taxable years beginning after
December 31, 1986, and to provide transitional relief for organizations
that had a reasonable basis for not treating amounts received prior to
January 1, 1987, as unrelated business income. This is consistent with,
and an improvement upon, my original bill.
For these purposes, as I have said many times, reasonable basis
includes the longstanding recognized practice by agricultural and
horticultural organizations of relying upon the 1983 IRS position that
associate member dues are not taxable.
With the passage of my legislation, these unfortunate controversies
should be put to an end once and for all. Accordingly, I thank the many
Members of this and the other body who have supported me in this
important effort.
Mr. CRANE. Mr. Speaker, today I regret that I must speak in
opposition to H.R. 3448, the Small Business Job Protection Act. Despite
the fact that as one of the conferees on this bill I worked to
incorporate, and support, many of the tax provisions contained in the
legislation, and despite the fact that as chairman of the Trade
Subcommittee I support a key trade provision contained in the bill, I
must oppose this bill because of the minimum-wage increase it contains.
Increasing the minimum wage will not protect jobs as the title of
this legislation implies, but will do just the opposite--it will
destroy jobs. Although I do not intend to dwell entirely on this issue
in my statement, as I do not intend to dwell entirely on this issue in
my statement, as I do want to discuss the tax and trade portion of the
bill as well, I do want to include in the Record following my
statement, the testimony from someone who certainly knows something
about the impact of the minimum wage on a business. Herman Cain,
president of Godfather's Pizza testified before the Joint Economic
Committee on the subject of a minimum-wage increase, and I must say
that his inciteful comments are indicative of conversations I have had
over the years on this subject with economists and employers. I would
urge my colleagues to review his testimony because he makes clear that
this feel good legislation is for people with blinders or rose colored
glasses who do not care to acknowledge the real economic consequences
or raising the minimum wage.
Supporters of the minimum wage, while they might be well intentioned
and might receive an award from the media establishment for being
politically correct, are hurting the very people they purport to help--
the young, poor, unskilled individual who wants to work. Raising the
minimum wage raises the costs for businesses that operate on a thin
margin--such as those in the food industry--and leaves them with the
choice of marginally raising prices in a highly competitive sector of
our economy or cutting costs--i.e. jobs. All too many companies must
choose the later, and estimates I have seen indicate that this minimum-
wage increase will cost Americans 200,000 jobs. So how does increasing
the minimum wage help the young, poor unskilled worker? Good question.
While I oppose the minimum-wage increase, as vice chairman of the
Ways and Means Committee and as one of five House conferees on the tax
portion of this bill, I would be remiss if I did not comment on the tax
provision of H.R. 3448. The tax provisions of the bill, for the most
part, will make a positive economic contribution and will hopefully
blunt, to some degree, the negative impact of the minimum wage. While
this is by no means an all inclusive list, some of the highlights of
the bill include the expansion of the expensing provisions for small
businesses, the package of S corporation reforms, pension
simplification items including critical spousal IRA provisions, the
employer provided educational assistance exclusion, the extension of
the research and experimentation credit, the clarification of worker
classification language relating to independent contractors, and the 6-
month delay of the IRS' electric payment system. Also included in the
bill was an adoption credit which had passed the House of
Representatives by a substantial margin earlier. As I indicated, there
are many other positive tax proposals contained in this legislation too
numerous to mention here. If signed into law, these provisions will
help blunt to some degree the negative fallout from the minimum-wage
increase.
Although the overwhelming number of tax provisions in the bill are
positive, I must also express my concern, as I did when the bill first
passed the House, with regard to that portion of this bill which would
phase to section 936 of the Tax Code over a 10-year period. Section 936
of the Tax Code provides tax incentives to companies that locate
production facilities in Puerto Rico. I must say that it is most likely
that the vast majority of members in this House do not fully appreciate
the negative impact that eliminating section 936 will have with regard
to the economic vitality of Puerto Rico and what the decline in that
regard will mean to our Federal budget in the long run.
Having served on the committee with jurisdiction over this issue for
the past 20 years, the Ways and Means Committee, I can unequivocally
state that section 936 has been one of the most successful provisions
in our entire Tax Code. Section 936 has spurred economic development in
Puerto Rico which has in turn created thousands of jobs--American
jobs--dramatically reducing the unemployment rate in Puerto Rico.
Sadly, all too many people view Puerto Rico as a foreign country rather
than as the American territory that it is. Jobs created in Puerto Rico
are U.S. jobs. Moreover contrary to what many critics contend, the
majority of jobs created in Puerto Rico through section 936 would not
have been created on the mainland absent section 936. The production
facilities in Puerto Rico would likely have been located in a foreign
country if not in Puerto Rico. In short, don't expect a wave of new
production facilities opening on the mainland United States because
section 936 is being phased out.
By removing this incentive for companies to locate in Puerto Rico, an
economic vacuum will be created which I do not see being filled any
time soon. This void will bring on increased unemployment, and hope and
opportunity, which has been on the rise over the last 20 years in
Puerto Rico, will decline steadily. As the economy declines there will
be an increased dependency--dependency on Uncle Sam to help those that
no longer have jobs. Just what form this dependency will take, whether
it be statehood or some other arrangement, remains to be seen, but mark
my words, it will mean greater expenditures by the U.S. Treasury. So I
would say to those that think they are saving taxpayers dollars when
they vote to eliminate this socalled corporate welfare in the Tax Code,
that you can either pay now by encouraging economic growth and
opportunity, or you can pay later by increasing Federal outlays for
welfare and creating a dependency which I don't think the American
citizens--either on the mainland or in Puerto Rico--will appreciate. It
is my urgent hope that the Ways and Means Committee will revisit this
issue at a later date--and sooner rather than later.
[[Page H9858]]
Having discussed the minimum-wage provisions and the tax provisions,
I must finally comment on the lone trade provision contained in H.R.
3448. As chairman of the Trade Subcommittee, I am very pleased to
report that this conference report extends the Generalized System of
Preferences [GSP] Program through May 31, 1997. The extension of GSP is
critical to our free trade efforts, and I have included a more detailed
and separate statement on this subject later in the Record.
Mr. Chairman, again I would say that I am disappointed with the
minimum-wage portion of this bill. And while I am extremely pleased
with the extension of GSP and the long overdue tax provisions contained
therein, I must still oppose this bill because of the loss of jobs that
will result from the minimum wage provision.
[From the American Enterprise, July/Aug. 1996]
Bad Solution for the Wrong Problem--How Forcing up the Minimum Wage
Hurts Those Who Need Help Most
My name is Herman Cain. I am President of Godfather's
Pizza, Inc., a 525-unit pizza restaurant chain headquartered
in Omaha, Nebraska. I am also President of the National
Restaurant Association.
There are nearly 740,000 food service units in this
country, including everything from fast-food chains to fine-
dining restaurants. We are an industry dominated by small
businesses, and we employ a diverse workforce of over nine
million people. Our employees are white, African-American,
Hispanic-American, Asian-American, and more. We expect to
employ 12.5 million by the year 2005, with the fastest growth
coming in the category of food service managers. More than 30
percent of Americans under age 35 had their first job in the
restaurant industry. Restaurants offer an important boost
into the job market for millions, as well as a clearly
defined career path for those willing to work hard and stay
in the business.
There are numerous reasons why I firmly believe a minimum-
wage increase is attacking the wrong problem. Allow me to
list the three reasons I believe to be most important.
First, mandated wage increases reduce entry-level job
opportunities.
A few weeks ago, a colleague in Oregon told me about a
homeless 17-year-old he hired in the mid-1980s. He gave the
teenager a job chopping lettuce, deveining shrimp, and
sweeping floors. That 17-year-old has worked his way up: He's
now the executive chef at the restaurant. But the job that
brought him into the business no longer exists. When Oregon
raised its minimum wage a few years ago and the restaurant
owner looked for ways to cut costs, this job was one of the
first to go. Now, my colleague buys lettuce already chopped
from a nearby automated facility.
It's a good example of the split personality of the minimum
wage. When you make it more expensive to hire people who lack
basic work skills and experience, you risk shutting them out
of the workforce.
My second point: A minimum-wage increase jeopardizes
existing jobs by threatening businesses that may be
marginally profitable. In my case, for example, Godfather's
Pizza, Inc., has nearly 150 company owned and operated units,
and a few of them are either marginally profitable or not
profitable at all. If you raise costs for the many thousands
of enterprises like these, you risk shutting their doors
permanently.
When you're running a restaurant that's on the edge, you're
scrutinizing every penny. Can ninety cents an hour put me
under? It could. Maybe not by itself--but when labor accounts
for about 30 percent of my expenses, second only to my food
costs, a mandated wage increase is one more factor tipping
the balance. A mandated wage increase triggers wage inflation
by rippling up through the entire wage spectrum and by
causing increases in payroll-related expenses like FICA
taxes.
Some people would say ``Just raise your prices.'' It
doesn't work that way. In a competitive market, that's the
fastest way to drive away customers with limited
discretionary income. That can close a business fast.
My third point: A minimum-wage increase is an ineffective
way to raise someone out of poverty. Most minimum-wage
earners are part-time workers under age 25--mostly first-time
workers, students, people holding down second jobs or
supplementing the income of their household's primary earner.
In my restaurants, for example, nine out of ten of my hourly
employees choose to work less than 35 hours a week--even
though fulltime work is available. These are not the poor
people policymakers most want to help. By shooting wide and
hoping to hit the right target, you're taking a gamble with
harmful side effects.
The best way to lift a family out of poverty is to get
people into the job market and give them a chance to acquire
skills. I think of my father, who worked three jobs until he
was skilled enough to cut back to two jobs, and who kept
going until his skills were good enough that he could support
us on one hourly job.
There are other dangers with a minimum-wage increase. Like
the fact that a federal mandate prescribes the same wage for
a mom-and-pop restaurant in rural Nebraska as it does for a
restaurant located in a high-cost-of-living metro area. It's
not a good idea to try to overrule the laws of supply and
demand that do a pretty good job of setting local wages
according to the specific conditions of specific markets.
Congress has recently been playing close attention to the
state and local officials--Democrats and Republicans alike--
who say ``enough is enough'' when it comes to picking up the
tab for unfunded federal mandates. Please give businesses the
same hearing: An increase in the minimum wage is also an
unfunded federal mandate. Someone has to pay--and it's
usually the entry-level employee.
I urge you to look deeper for solutions. Some people lack
the skills to make them competitive for entry-level
employment. This is why we have tax credits to encourage
businesses to hire employees who typically have a hard time
gaining a foothold in the job market. This is why politicians
are setting up empowerment zones to help businesses hire in
impoverished areas. These programs rightly recognize that
some workers may be overlooked if it gets too expensive for a
business to hire them. Congress should be looking for ways to
encourage people to work, and businesses to hire, instead of
making it more expensive for employers to give the low-
skilled a job.
You're getting a good dose of information lately on the
theories behind successful welfare reform. In businesses like
ours, real life crowds out theory. While our main expertise
is in getting out good meals at good prices, as entry-level
employers we've also become fairly expert at finding ways to
help millions of troubled teens and troubled adults get
beyond some daunting barriers to employment. We see that real
entry-level jobs provide training in the fundamentals--
reliability and teamwork, to name just two--and thereby field
long-term social payoffs that don't come in any other way.
Right now we have more than four million people earning the
minimum wage in this country, 7\1/2\ million unemployed
persons, and nine million adults receiving welfare payments.
Tackle the right problems first. Focus on creating more jobs,
not on raising the cost of entry-level employment and
eliminating existing jobs. A minimum-wage increase doesn't
attack the right problem. I urge you to reject it.
Fact and Fiction on the Minimum Wage
Minimum-wage workers are the most vulnerable Americans,
right? Actually, more adults who earn the minimum wage live
in families with over $30,000 in annual income than live in
families making under $10,000. Over all, 22 percent of
minimum wage earners are poor. The majority of poor Americans
don't work at all, at any wage.
Minimum-wage work is undignified. Fifty-five percent of
minimum-wage workers are youths age 16-24. Many of these live
with their parents. Only 2 percent of workers age 25 or older
are paid the minimum wage.
You can't raise a family on the minimum wage. Few have to:
89 percent of all workers now making less than the proposed
minimum have no spouse or child depending on them as sole
breadwinner. Of these, 44 percent are single individuals
living with their parents or other family member, 22 percent
are single individuals living alone, and 23 percent have a
spouse with a paying job.
Minimum-wage jobs are a dead end. Sixty-three percent of
minimum-wage workers earn higher wages within 12 months.
Seventy percent of the restaurant managers at McDonald's,
plus a majority of the firm's middle and senior management,
began in hourly positions. (This includes CEO Ed Rensi, who
started at 85 cents an hour in 1965.)
Sources: U.S. Bureau of Labor Statistics: Employment Policy
Foundation; Wall Street Journal; Industrial Relations and
Labor Review.
Mr. CRANE. Mr. Speaker, as chairman of the Trade Subcommittee, I want
to highlight that the conference report on H.R. 3448, the Small
Business Jobs Protection Act, contains provisions that extend the
Generalized System of Preferences [GSP] Program, through May 31, 1997.
The GSP Program promotes three broad policy goals: First, to help
maintain U.S. international competitiveness by lowering costs for U.S.
businesses, as well as lowering prices for American consumers; second,
to foster economic development in developing countries and economies in
transition through increased trade, rather than foreign aid; and third,
to promote U.S. Trade interests by encouraging beneficiaries to open
their markets and comply more fully with international trading rules.
This important legislation will help American businesses across the
country, both small and large, by eliminating unnecessary tariffs on
certain imported products. Extension of GSP will expand trade and
prevent job losses in a wide variety of U.S. industries currently
suffering increased tariff costs as a result of the expiration of GSP.
Reauthorization of GSP, in this difficult budget environment, should
be viewed by our trading partners as indicative of our continued
commitment to the expansion of international trade and economic
opportunity. H.R. 3448 is important trade legislation, which, I
believe,
[[Page H9859]]
will be followed next year by an extension of fast-track trade
negotiating authority, and legislation to expand trade with Caribbean
Basin region.
H.R., 3448 makes modest reforms and technical changes to title V of
the Trade Act of 1974, which are intended to simplify and improve the
administration of the GSP Program. For example, the bill recodifies a
3-year rule whereby specific products may only be considered for
addition to the GSP Program every third year. The bill would exclude
high-income countries from GSP, and would have the effect of reducing
the per capita gross-national-product [GNP] limit from $11,800 to
$8,600, a number which would be indexed. Beneficiary countries that
exceed the per capita GNP limit will be removed form the GSP Program.
The bill would reduce the competitive need limit [CNL] in the expired
law from about $108 million to $75 million, to be increased by $5
million annually, but would retain the competitive need waiver
authority. Also, a beneficiary country that exceeds the CNL on a
particular product would lose GSP on that product. Under certain
circumstances, however, the President could waive the CNL and restore
the product to GSP status for that country.
The bill also contains new authority, which was requested by the
Administration, to designate any article from a least developed
developing country [LDDC], if the President determines that the article
is not import-sensitive in the context of imports from LDDC's.
Designed to promote economic development through increased trade,
rather than foreign aid, GSP is a valuable program, both for
beneficiary countries, and for U.S. businesses and consumers. I urge my
colleagues to support its inclusion in H.R. 3448.
Mr. RAMSTAD. Mr. Speaker, I rise in strong support of the Small
Business Job Protection Act and to discuss a related issue regarding
the tax treatment of independent contractors.
The Ways and Means Oversight Subcommittee, on which I serve, has been
aggressively working to rationalize the tax laws governing independent
contractors. As we learned from the White House Conference on Small
Business and through testimony before the subcommittee, sound rules
covering employee classification are sorely needed. I commend Chairman
Archer for the improvements in the bill before us, as they are an
important first step in achieving this goal.
I do, however, want to speak to one improvement that is needed to
ensure the proper balance between consumer protection and appropriate
application of employee classification laws.
I was pleased to see that in the recently issued IRS Worker
Classification Training Manual, the Service acknowledged the importance
of balancing competing regulatory demands--those designed for consumer
protection purposes and those driven by tax considerations. The
training manual made significant progress by stating that rules imposed
by a business on its workers in order to comply with Governmental
agency requirements should be given little weight in determining a
worker's status.
Unfortunately, the manual goes on to state that if the business
develops more stringent guidelines for a worker in addition to those
imposed by a third party, more weight should be given to these
instructions in determining whether the business has retained a right
to control the worker. As you know, the amount of control exercised
over a worker is indicative of that employee's status with respect to
classifying workers as independent contractors. It is this second
portion of the rule that could unintentionally compromise consumer
protection.
For example, in the securities industry, the Securities and Exchange
Commission [SEC], the National Association of Securities Dealers [NASD]
and State regulatory agencies' regulations are broad in scope and
require securities dealers to exercise significant discretion in their
implementation. I am concerned that this ambiguity may force businesses
to comply with only the most minimal standards in order to avoid
potential conflict with the tax laws. It makes no sense to place
companies that exercise higher standards of due care in meeting their
regulatory obligations at a greater tax risk than more lax competitors.
I do not believe this was the intention of Congress.
I urge the IRS to revise its guidelines so that no weight is given to
any business policies or procedures that are reasonably designed to
achieve compliance with applicable laws and regulations of Government
or self-regulatory organizations, including the supervision of
activities of workers and associated person to ensure compliance
thereto.
I would like to thank both Chairman Archer and Subcommittee
Chairwoman Johnson for their leadership in this area. I look forward to
working with them to develop rational employee classification tax rules
in general, and also to ensure that our Nation's complex regulatory
laws are not undermined by the Tax Code.
Mr. MARTINI. Mr. Speaker, I rise today in support of the American
worker and in strong support of raising the minimum wage. To me, this
has never been an issue of politics, but rather a simple issue of
fairness. Too often Americans are working long hours and even taking
second jobs, yet they feel like they are running in place. If we really
want people to move from welfare to work, we have to make work
worthwhile. Americans deserve a fair wage for a hard day's work.
Raising the minimum wage will reward those able bodied individuals
who chose work over welfare by improving their quality of life.
Ultimately, that's what this is all about. Mr. Speaker, people want to
support their families without Government help, but we have to make
work worthwhile. I believe one way to do that is to raise the minimum
wage. It just comes down to basic fairness.
Congress has not raised the minimum wage in over 7 years. In
comparison to other wages, the minimum wage is now at a 40-year low. I
don't think that is fair. I believe people deserve a fair return on a
hard day's labor. My record reflects a strong commitment to working
people's issues and that is why I joined Jack Quinn and 21 other
Republicans to introduce legislation to increase the minimum wage back
in April.
It's time to help people earn more and keep more of what they earn.
Raising the minimum wage is just one aspect of the kind of economic
growth and opportunity package this country desperately needs. In 1
week this historic Congress has done more to advance the agenda of
working Americans than any legislative session in recent memory.
We have successfully passed comprehensive welfare reform, the most
significant health insurance reform legislation in a generation, and
today we will finally give low wage earners a much needed raise. Mr.
Speaker, the verdict's out. The 104th Congress has been a champion for
working Americans. This Congress has stood up for fairness.
Mr. Speaker, I believe in raising the minimum wage, but I also
believe that we have an obligation to our small businesses and mom and
pop shops to ease the Federal tax and regulatory burden placed on them.
True small businesses are often the most vulnerable and have extremely
high rates of failure. Today we are increasing the minimum wage and
providing necessary tax relief to our small businesses.
Mr. Speaker, I am proud to have helped introduce a minimum wage
increase bill and I am also proud to have cast my vote for the
successful tax relief, welfare reform, and immigration reform bills. We
need a responsible and fair government for a change, and this Congress
is on the right course.
This legislation is a victory for low wage earners, a victory for
small business, and a victory for the American people. I strongly urge
my colleagues to support the conference report on H.R. 3448.
Mr. ROTH. Mr. Speaker, I rise in strong opposition to this conference
report.
While this legislation has some strong points--increased expensing
and pension simplification for small businesses--it would also impose a
massive unfunded mandate on American businesses, and it would destroy
Puerto Rico's enterprise zone status.
Both are grave mistakes with real consequences for real people.
The minimum wage increase will kill 600,000 jobs for low-skilled
workers. These are the people who can least afford to lose their jobs.
Without work, what will they do?
Phasing out section 936 and immediately repealing QPSII would have a
devastating impact on the economy and people of Puerto Rico.
Today, section 936 businesses employ one-third of Puerto Rico's
entire work force. They produce 40 percent of Puerto Rico's annual
economic output. They are responsible for 200,000 mainland jobs.
Section 936/QPSII has also attracted $15 billion in additional
capital to the island--capital that would otherwise have gone
elsewhere.
As a result, more entrepreneurs can start new businesses, more
consumers can buy household appliances, and more families can purchase
homes.
Mr. Speaker, let's not abandon the people of Puerto Rico. Let's not
cripple our Nation's job creators with needless unfunded mandates.
Vote for opportunity. Defeat this conference report.
Ms. VELAZQUEZ. Mr. Speaker, I rise today in support of the conference
report.
Legislation to increase the minimum wage is long over due. For
months, Democrats have been calling for a raise for the American
people, but that wasn't enough. Even when 85 percent of the American
people voiced their support for an increase, that wasn't enough. I'm
glad to see that the Republican majority is finally starting to get it.
The increase in the minimum wage will help to lift millions of
Americans out of poverty. For years, single mothers have been
struggling to feed their families on a poverty wage. This
[[Page H9860]]
takes on even more importance, now that this Congress has shredded the
safety net of welfare. We must make work pay, and make the pay a living
wage.
Although I support this conference report, I also want to express my
great anger over the price that some will have to pay for the adoption
of this legislation. In classic Republican style, they give a helping
hand to the needy while using the other hand to stab someone in the
back. By removing the 936 tax credit, Republicans are taking the
lifeforce that keeps Puerto Rico alive.
I urge my colleagues to support the conference report. But keep in
mind the 300,000 U.S. citizens that live in Puerto Rico, who will not
gain but lose under this legislation.
Mrs. THURMAN. Mr. Speaker, I rise today to support the conference
report on H.R. 3448 I am particularly happy about a provision that
protects the tax exempt status of State-sponsored prepaid tuition
programs, which mirrors, H.R. 3842, legislation that I introduced. This
provision is of great importance to working parents and their children
across this Nation.
For years, parents have been looking for a financially sound way to
fund their children's education. In this era of continually rising
costs and reduced Federal aid, that desire appears even more
unattainable. In response, 16 States, including my home State Florida,
have formed innovative partnerships known as prepaid college tuition
programs. In fact, Representative Ros-Lehtinen and I worked on this
issue in the Florida State Senate.
Prepaid tuition programs allow individuals to purchase contracts that
provide for the cost of college tuition in the future, locking in
today's tuition rates. As a result, more than 500,000 mostly middle-
class families are taking part nationwide in these programs.
Earlier this year, the IRS announced its intention to tax these
programs. This makes no sense because the contributors of this fund
have no access to it. As a result, I introduced H.R. 3842, which would
clarify that prepaid tuition programs are tax exempt. I was happy then
to get 60 bipartisan cosponsor of this bill. But I am even happier
today that the conferees included this valuable and meritorious
provision in this bill.
Mr. Chairman, the conference report on H.R. 3448 is good policy
because it guarantees American workers a higher wage and a better
standard of living. But it is even better policy because it guarantees
that a good number of our children, our future workers, would be
educated and not have to struggle with the notion of a minimum wage. I
urge my colleagues to support the report.
Mr. NEAL of Massachusetts. Mr. Speaker, today we are voting on a
piece of legislation that is long overdue. We are increasing the
minimum wage by 90 cents over 2 years. The value of the minimum wage
has dropped to a 40-year low.
Today, by increasing the minimum wage we are doing something tangible
for the American worker.
Two days ago on this floor we passed a tough welfare bill. The major
goal of this bill is to move individuals off of welfare and to work.
Increasing the minimum wage goes hand in hand with welfare reform. To
encourage individuals to work we have to make work more attractive.
Increasing the minimum wage is a step in making work a better
alternative.
By earning more there will be less of a need for Federal assistance
such as food stamps. We are helping workers become more self-
sufficient.
The Small Business Job Protection Act includes many tax provisions
that many of us have been working on the past few years. Many of these
provisions have been long awaited.
The tax provisions do not include everything I would have liked, but
I believe it's a good package that will go along with helping small
businesses.
This bill includes a provision which would assist the fishermen of
New Bedford, MA. I cannot think of a better example of a small
business.
I am a strong supporter of IRA's and believe we should provide tax
incentives to encourage savings. This legislation includes a provision
which increases the availability for spousal IRA's. The provisions
permit deductible IRA contributions of up to $2,000 to be made for each
spouse, including those who do not work outside the home. This will
help women to increase savings for their retirement. It corrects an
inequity that existed in our Tax Code.
This legislation extends the exclusion for employer provided
educational assistance. This provision allows for exclusion from income
up to $5,250 for tuition paid for by an employer. As a former
professor, I have seen how helpful this provision can be.
Unfortunately, the exclusion only applies to graduate-level education
until June 30, 1996. I plan on continuing to work on including graduate
education. Education is important to increasing our competitiveness in
this global economy. We are creating more high wage jobs and we need
education workers. The exclusion for education workers helps more than
lawyers and doctors.
This legislation provides an extension of the R&D credit. The credit
is reinstated for July 1, 1996 to May 31, 1997. This is the first time
the credit has not been extended retroactively. I am pleased the credit
has been extended and I will continue toward making the R&D credit
permanent. We need to assist corporations with research and
development. R&D is necessary for global competitiveness. The R&D
credit will help keep high wage jobs in the United States.
This legislation contains a package of S corporation reform
provisions. The package includes a provision I have worked on the last
couple of years. This package will help small businesses that are
organized as Subchapter S corporations.
The legislation includes pension simplification provisions. The
purpose of this package is to strengthen and simplify the pension
provisions of the Tax Code. The package includes provisions which make
it easier for small businesses to offer pension plans. Church pension
simplification provisions were also included in this package.
This pension package takes a step toward making retirements more
secure. These provisions will help increase the access to retirement
savings for many American workers. We have to continue to work to make
it easier for more American workers to have pensions.
Today is a good day for the American worker and small businesses. The
bill is a good compromise and it should make a difference.
Mr. MONTGOMERY. Mr. Speaker, I want to commend the conferees on this
measures for including changes to the Tax Code which ensure that
employers who reemploy veterans after military service are not
penalized for restoring their pension benefits. Two years ago, the
Congress enacted the Uniformed Services Employment and Reemployment
Rights Act of 1994 [USERRA], Public Law 103-353. This law was a
restatement and clarification of the existing veterans reemployment
rights law, and like that law, it guarantees that reservists and other
persons who go on active military duty will be restored to their
civilian jobs without any loss of seniority.
This law originated in 1940 and has been the subject of a number of
Supreme Court decisions. The Supreme Court has held that one of the
most important benefits of seniority, the high to a pension, is a
protected benefit to which a veteran is entitled.
In discussions with various pension experts over the past several
years, it was pointed out that technical amendments to the Internal
Revenue Code were needed. The Tax Code limits employer and employee
contributions to tax-favored pension plans and thus benefits payable to
reemployed veterans. Other limits on deductible contributions, and
qualified plan non-discrimination, coverage, minimum participation, and
top-heavy rules do not take into account the veteran returning from
active duty and his right to have his pension rights restored as if he
had never left.
Last year, I introduced legislation, H.R. 1469, to allow employers
who reemploy veterans to comply with both USERRA and the Internal
Revenue Code when they endeavor to restore veterans' pension benefits
as required by USERRA. The bill would provide assurance to employers
that such contributions would not in any way disqualify a tax-favored
plan. I am pleased that the bill before the House today includes the
text of H.R. 1469 with minor technical changes.
It is very important to note that the legislation before the House
today would allow employers and pension plans to make contributions for
any veteran, World War II, Korea, Vietnam, as well as Persian Gulf. In
essence, this provision corrects an oversight contained in the 1974
ERISA legislation which failed to take into consideration the rights of
reemployed veterans, and is a good measure for employers as well as
veterans. Again, I thank the conferees for including this provision in
the conference report.
Mr. FAZIO. Mr. Speaker, I am very pleased to rise in support of an
increase in the minimum wage.
After a long, hard battle, we can be proud of passing a bill that
will produce real results for 12 million working Americans.
This increase will pay for an extra 3\1/2\ months of groceries, 6
months of health care, 4\1/2\ months of utility bills, or 2 months of
housing.
America's working families are finally getting the raise that they
deserve.
This bill, like the health insurance reform bill that was passed
yesterday, isn't an inside the Beltway issue like some in the
Republican leadership have claimed.
It's common sense, pro-family legislation that many of us in Congress
have been championing from the beginning.
In addition to the minimum wage increase, this bill also contains
some important tax provisions for America's small businesses.
The bill includes an important provision that increases the amount
that a small business can deduct from the costs of business-related
equipment.
[[Page H9861]]
This will allow our Nation's small businesses to expand and
contribute even more than they already do to our national economy.
It will also allow homemakers to invest up to $2,000 a year in an
individual retirement account, and provides a tax credit of up to
$5,000 for parents who adopt.
These measures will strengthen the economic foundations of our
families and will allow them to invest in themselves and their futures.
This is a good bill that will help America's workers and small
businesses. I urge my colleagues to support the conference agreement.
Mr. BALLENGER. Mr. Speaker, I am opposed to the conference agreement
on H.R. 3448, the Small Business Job Protection Act because of my
concern that the increase in the minimum wage or starting wage will
make it much harder for those with few skills and training or a limited
education to get a first job. Minimum wage jobs are often the first
rung on the ladder of upward mobility and this increase will likely
move that rung beyond reach for many workers. By raising the wage rate,
we end up denying job opportunities to thousands of workers.
The conference agreement raises the Federal minimum wage from $4.25
to $5.15, in two increments. The first increase becomes effective on
October 1, 1996 and will raise the wage rate to $4.75. The second
increase would take effect on September 1, 1997, raising the minimum
wage rate to $5.15. It is well known by economists and lawmakers that
higher minimum wages lead to job losses. Dozens of studies show that
raising the minimum wage costs entry-level job opportunities, and does
little to help the working poor. Job loss estimates for this increase
range from 100,000 to over 600,000 jobs. In my home State of North
Carolina, an estimated 19,100 jobs will be lost. A 90-cent increase is
meaningless for the individual who no longer has a job.
Just recently, the Washington Post featured a story on the Kiddie
Junction Learning Center in Zachary, LA. The owner of the day care
center indicated that an increase in the minimum wage would be bad for
her business, her employees, and her customers--and that it will likely
force her to let go one employee and increase prices. This is just one
more example of how a minimum wage increase does more harm than good by
costing some low-wage workers their jobs and raising costs for others.
A copy of the article follows.
While I am voting ``no'' on the conference agreement to signal my
concern about the effect wage increases have on job creation, I do
support the final agreement to bring tax relief for small businesses
and their workers and as well as the provisions bringing long overdue
reform to our pension system. These changes will do much to help ease
the middle class crunch and help many people make more and save more.
[From the Washington Post, July 30, 1996]
(By Gary Younge)
Zachary, LA.--Jeannette Boggs started her working life
making $1.25 an hour as a service representative for a
utilities company in Baton Rouge in 1965. Since then, she
says, she has ``bettered myself in dollars and cents'' to get
where she is today--the proud owner of Kiddie Junction
Learning Center, a day-care center 12 miles away in Zachary.
Zachary is a rural town of about 10,000 where churches
outnumber banks by about three to one. Like many in the area,
Boggs describes herself as religious and conservative. She
believes that in America, if you work hard you will be
rewarded, and she says her six employees work very hard
indeed.
``It's a tough job. It's wiping noses, cleaning butts and
tying shoes all day long,'' she said. None of her staff earns
more than $6.50 an hour. Two are paid at or around the
current minimum wage of $4.25. Many of the parents who use
Kiddie Junction also are minimum-wage, or slightly better,
earners.
When it comes to increasing the minimum wage, many low-paid
people here are understandably eager to see it happen but
recognize that, like a boomerang, that very increase may well
come back and hit them in the form of higher costs. Many
cannot decide whether tit will spark a vicious circle that
will fuel inflation or a virtuous one that will help
alleviate poverty.
But Boggs has definitely made up her mind. She argues that
an increase will be bad for her business, her employees and
her customers. If, as appears likely to happen as early as
this week, Congress passes a 90-cent increase in the minimum
wage, pushing it up to $5.15 an hour, Boggs contends it will
force her to let go one staff member and increase her prices.
``When people talk about the minimum wage, all they think
about are kids working in the fast-food chains. If people
work hard, they should get paid well, and that's why we have
labor laws to protect them,'' Boggs said. ``But I have lots
of hidden costs as well as payroll taxes and workers'
compensation. All these things cost money, and if you add
them up them the minimum wage is not so minimum any more.
It's going to add about 12.75 percent to my cost, and I'm
going to have to pass some of that on.''
That would be bad news for Annette Ponthier. She started
her working life at minimum wage six years ago as a driver
for a medical transportation company. A few years later, she
gave birth to her son, Alex, and soon after that, Alex's
father left. At first Ponthier's mother looked after Alex,
but she has a heart problem so Annette took Alex to Kiddie
Junction, where she pays $62 a week. She now makes $5.50 an
hour selling swimming pools and pool chemicals.
At age 23, she still lives with her parents in Zachary
because, she said she cannot afford her own place. A minimum
wage increase would be good, she said, although ``you still
couldn't live on it.'' But if the price of Kiddie Junction
went up even by a few dollars a week, she said, she could not
really afford it, and ``with no child care, there's no job.''
There are 4.2 million people earning the $4.25 an hour
minimum, and 7 million earning $5.15 or less. With 19.9
percent of its workers earning between $4.25 and $5.15,
Louisiana has the highest proportion of working people who
will be affected in the country, according to figures
compiled in 1994 by the Economic Policy Institute.
During the debate that has raged in Washington over
increasing the minimum, both supporters and opponents said
they were arguing in the name of the poor and low-skilled.
Opponents said the raise would break small businesses like
Boggs's and would price low-skilled workers out of their
jobs. Supporters protested that the minimum wage level had
been eroded by inflation and that an increase would help
alleviate the kind of poverty that is prevalent in Louisiana.
The measure passed by the House on a 288 to 144 vote would
raise the minimum wage from $4.25 to $4.75 an hour on July 1
and to $5.25 a year later. The Senate also has passed it, and
minor differences in the two bills are being worked out in
conference.
But Zachary is a long way from Capitol Hill. ``It's just a
little town on the go,'' said Norabeth Alexander, who has
earned $5.25 an hour as a cook and teacher at Kiddie Junction
for the past year and a half. With a large influx of new
families eager to take advantage of the local schools, which
have a good reputation, Zachary is suffering some growing
pains. The community is far less tightknit than it used to
be, and urban evils are beginning to arrive from the
metropolis. ``Drugs and crime are working their way out from
Baton Rouge,'' Alexander said.
The days when doors could be left unlocked are gone here,
said Boggs, 48. Last year, Kiddie Junction was broken into
twice in one month. ``Parents just aren't spending enough
time with their children anymore. There's too much divorce
and no morals and very little discipline in the family. Kids
just won't say ``Yes, ma'am' or ``Yes, sir'' anymore like
they used to.''
Kellie Valloton is an exception, Boggs said. Valloton is
17, still in high school, and works at Kiddie Junction as
part of a work experience program for $4.50 an hour. ``Kellie
is mature,'' Boggs said. She wants to be a teacher, but her
only experience working with children before she came to
Kiddie Junction was baby-sitting for friends. Valloton
says there is no way she could live on her own on her
wage. ``Sure, it would be nice to have a raise. But it
would be hard for some of the adults with more experience
because if I got an increase, I suppose they would want
one, too. I'm just here really to learn some
responsibility and hopefully have something to show for
it,'' she said.
Boggs is certain there will be a chain reaction as high-
paid workers demand that a differential be maintained between
them and their minimum-wage colleagues. Brenda Dugas, co-
director of Kiddie Junction, thinks that is unlikely, Dugas
says that when she was raising her two children, she earned
no more than minimum wage, and sometimes less. Now she makes
$6.50 an hour, on which she helps support a son working his
way through college. Her daughter makes the minimum at a
local Lowe's Lumber store. ``Of course it's hard on the young
people, but it teaches them responsibility and survival
skills,'' Dugas said.
But Dugas is in the apparent minority here in thinking it
is possible to live on the minimum wage. ``I think it would
be very difficult for the head of the household to live on
that,'' Boggs said. ``I do think it is morally wrong for
employers to just exploit people.''
She prides herself on the benefits Kiddie Junction gives
its workers--a week's vacation and two annual sick days after
one year; two weeks' vacation and four sick days after three
years. ``I used to work in personnel, I know that the best
way to keep staff is to invest in people,'' she said.
But, federal and state law imposes tight--and often
costly--restrictions on day-care centers. Boggs can have no
more than 16 4-year-olds, 14 3-year-olds or 12 2-year-olds
for every staff member. There must be 35 square feet inside
and 75 square feet outside for each child. She must pay for
fingerprinting (to help detect convicted child molesters), a
physical and tuberculosis test for each new staff member, and
CPR classes and an additional training day for each worker
annually.
Boggs charges $62 a week for children age 1 to 3, $56 for
those 3 or older and $30 for school-age children who are
there before or after school. With 39 children on its books
and a waiting list of 11, Kiddie Junction has made a profit
for the last eight years.
Boggs's husband, Louis, who build Kiddie Junction in spare
time away from his job as an instrument technician for
Georgia Pacific Corp., is proud of its success. Louis Boggs
is a fan of conservative talk show host Rush Limbaugh and has
few good words to say
[[Page H9862]]
about President Clinton. ``Every time I turn around, he's got
his hand in my pockets and trying to take my money away in
taxes,'' he said.
It is senseless to talk about poverty in Louisiana, Louis
Boggs said, let alone to try to fix it with federal help.
``For people at the low end of the wage scale in a state like
this, a minimum wage increase is just a vicious circle.
People keep talking about poverty. What's poverty? There's no
such thing as poverty. There's just workers without skills.''
Mr. BEREUTER. Mr. Speaker, this Member rises to express his strong
support for the conference report providing an increased minimum wage.
This Member supported the bill when it was originally considered by the
House and believes the time is right to increase the wage of working
Americans. This Member is also pleased to see that the conferees
included many important reforms which are designed to offset any
potential costs associated with the increased cost in wages.
The minimum wage was last increased on April 1, 1991, from $3.80 to
$4.25 per hour. Inflation has increased 15.90 percent since April 1,
1991. At that rate, to have the same purchasing power as the minimum
wage did when it was last increased, the minimum wage level today would
have to be set at $4.93 per hour. With the buying power of the minimum
wage at a 40-year low, this Member has advocated a modest 45-cent-per-
hour increase, which would have appropriately returned the minimum wage
close to its strength following the latest increase in 1991. Although
the measure goes beyond his preferred position, this Member simply
could not in good conscience vote against raising the minimum wage up
to the level it should be after the effect of inflation. The September
1, 1997, figure of $5.15 per hour will only be 22 cents more than it
should be to adjust to the inflation level of July 1, 1996, so the
prospective increases put in place are not out of line.
This Member is very pleased that a $5,000 tax credit for adoptions is
included in this conference report. As you know, the House passed this
provision several times in the past 2 years; however, each time the
overall bill was vetoed by the President. It is time that this family-
friendly tax credit becomes law.
Additionally, this Member is extraordinarily pleased to see that
conferees agreed to include the so-called Homemakers IRA. This Member
joined 34 of his colleagues in sending a letter to the conferees
requesting that they include the provision in the conference report.
This Member would like to thank the gentleman from Texas [Mr. Archer],
for his prompt response to the letter and thank the conferees for
including this provision. The Homemakers IRA will allow America's
middle-class families to prepare for their future by raising the tax-
deductible amount nonworking spouses may contribute to individual
retirement accounts. For a family which contributes the new maximum of
$2,000 for a nonworking spouse, assuming they begin when they are 30
years old and retire at 65, they would have contributed an additional
$63,000 to their retirement. This figure is strictly their
contributions and does not take into account earnings on their savings.
Mr. Speaker, this Member believes the conference report should be
approved and urges his colleagues to vote aye.
The SPEAKER pro tempore (Mr. LaTourette). All time has expired.
Without objection, the previous question is ordered on the conference
report.
There was no objection.
The SPEAKER pro tempore. The question is on the conference report.
Pursuant to House Resolution 440, the yeas and nays are ordered.
The vote was taken by electronic device, and there were--yeas 354,
nays 72, not voting 7, as follows:
[Roll No. 398]
YEAS--354
Abercrombie
Ackerman
Andrews
Bachus
Baesler
Baker (LA)
Baldacci
Barcia
Barrett (NE)
Barrett (WI)
Bass
Bateman
Becerra
Beilenson
Bentsen
Bereuter
Berman
Bevill
Bilbray
Bilirakis
Bliley
Blumenauer
Blute
Boehlert
Bonior
Bono
Borski
Boucher
Brewster
Browder
Brown (CA)
Brown (FL)
Brown (OH)
Bryant (TN)
Bryant (TX)
Bunn
Bunning
Buyer
Calvert
Camp
Canady
Cardin
Castle
Chambliss
Chapman
Christensen
Chrysler
Clay
Clayton
Clement
Clinger
Clyburn
Coble
Coburn
Coleman
Collins (GA)
Collins (IL)
Collins (MI)
Condit
Conyers
Costello
Coyne
Cramer
Cremeans
Cummings
Cunningham
Danner
Davis
de la Garza
Deal
DeFazio
DeLauro
Dellums
Deutsch
Diaz-Balart
Dicks
Dingell
Dixon
Doggett
Dooley
Dornan
Doyle
Dreier
Duncan
Dunn
Durbin
Edwards
Ehlers
Engel
English
Ensign
Eshoo
Evans
Everett
Ewing
Farr
Fattah
Fawell
Fazio
Fields (LA)
Filner
Flake
Flanagan
Foglietta
Foley
Forbes
Fowler
Fox
Frank (MA)
Franks (CT)
Franks (NJ)
Frelinghuysen
Frisa
Frost
Furse
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goodlatte
Goodling
Gordon
Goss
Graham
Green (TX)
Greene (UT)
Greenwood
Gunderson
Gutierrez
Gutknecht
Hall (OH)
Hamilton
Harman
Hastert
Hastings (FL)
Hayes
Hayworth
Hefner
Heineman
Hilleary
Hilliard
Hinchey
Hobson
Hoekstra
Hoke
Holden
Horn
Houghton
Hoyer
Hunter
Hutchinson
Hyde
Jackson (IL)
Jackson-Lee (TX)
Jacobs
Jefferson
Johnson (CT)
Johnson (SD)
Johnson, E. B.
Johnston
Kanjorski
Kaptur
Kasich
Kelly
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kim
King
Kleczka
Klink
Klug
Knollenberg
Kolbe
LaFalce
LaHood
Lantos
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Lightfoot
Linder
Lipinski
Livingston
LoBiondo
Lofgren
Longley
Lowey
Luther
Maloney
Manton
Markey
Martinez
Martini
Mascara
Matsui
McCarthy
McCrery
McDermott
McHale
McHugh
McInnis
McKeon
McKinney
McNulty
Meehan
Meek
Menendez
Metcalf
Meyers
Millender-McDonald
Miller (CA)
Minge
Mink
Moakley
Molinari
Mollohan
Montgomery
Moorhead
Moran
Morella
Murtha
Nadler
Neal
Neumann
Ney
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Orton
Owens
Oxley
Pallone
Parker
Pastor
Paxon
Payne (NJ)
Payne (VA)
Pelosi
Peterson (FL)
Peterson (MN)
Petri
Pickett
Pomeroy
Porter
Portman
Poshard
Pryce
Quillen
Quinn
Rahall
Ramstad
Rangel
Reed
Regula
Richardson
Riggs
Rivers
Roberts
Roemer
Rogers
Ros-Lehtinen
Rose
Roukema
Roybal-Allard
Rush
Sabo
Sanders
Sawyer
Saxton
Schiff
Schroeder
Schumer
Scott
Seastrand
Serrano
Shaw
Shays
Shuster
Sisisky
Skaggs
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Solomon
Spence
Spratt
Stark
Stenholm
Stockman
Stokes
Studds
Stupak
Tanner
Tate
Tauzin
Taylor (MS)
Tejeda
Thomas
Thompson
Thornton
Thurman
Torkildsen
Torres
Torricelli
Towns
Traficant
Upton
Velazquez
Vento
Visclosky
Volkmer
Vucanovich
Walker
Walsh
Ward
Waters
Watt (NC)
Waxman
Weldon (FL)
Weldon (PA)
Weller
White
Whitfield
Wicker
Williams
Wilson
Wise
Wolf
Woolsey
Wynn
Yates
Young (AK)
Zeliff
Zimmer
NAYS--72
Allard
Archer
Armey
Baker (CA)
Ballenger
Barr
Bartlett
Barton
Boehner
Bonilla
Burr
Burton
Callahan
Campbell
Chabot
Chenoweth
Combest
Cooley
Cox
Crane
Crapo
Cubin
DeLay
Doolittle
Ehrlich
Fields (TX)
Funderburk
Geren
Hall (TX)
Hancock
Hansen
Hastings (WA)
Hefley
Herger
Hostettler
Inglis
Istook
Johnson, Sam
Jones
Kingston
Largent
Laughlin
Lucas
Manzullo
McCollum
McIntosh
Mica
Miller (FL)
Myers
Myrick
Nethercutt
Packard
Pombo
Radanovich
Rohrabacher
Roth
Royce
Salmon
Sanford
Scarborough
Schaefer
Sensenbrenner
Shadegg
Souder
Stearns
Stump
Talent
Taylor (NC)
Thornberry
Tiahrt
Wamp
Watts (OK)
NOT VOTING--7
Bishop
Brownback
Dickey
Ford
Lincoln
McDade
Young (FL)
{time} 1146
Messrs. McCOLLUM, JONES, MICA, MYERS of Indiana, and KINGSTON changed
their vote from ``yea'' to ``nay.''
Mr. BACHUS changed his vote from ``nay'' to ``yea.''
So the conference report was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________