[Congressional Record Volume 142, Number 119 (Wednesday, September 4, 1996)]
[Senate]
[Pages S9857-S9858]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                   SMALL BUSINESS JOB PROTECTION ACT

 Mr. FAIRCLOTH. Mr. President, the Senate passed the Small 
Business Job Protection Act, but I voted against the final bill. I ran 
for the Senate on a pro-growth and low-tax platform. This bill is a 
step in the wrong direction. I cannot vote for a bill that raises the 
minimum wage and thus closes opportunities for thousands of low-skill 
workers and that raises numerous taxes on the American people and 
businessmen. However, I will say a few words in support of certain 
provisions of H.R. 3448, which do, in fact, benefit the public 
interest.
  The bill includes provisions that will contribute to increased 
savings, higher wages, and improved economic growth. These are three of 
our most important economic challenges, and, Mr. President, I wish to 
express my belief that provisions of this bill begin to address these 
issues.
  I am a strong supporter of the expansion of tax-deferred individual 
retirement accounts [IRA's] to permit non-working spouses to establish 
an account and thus defer taxes on a maximum of $2,000 per year. This 
homemaker IRA provision, which I have cosponsored as a separate bill, 
is an important tool for families and their efforts to plan for 
retirement. In fact, over 30 years at a 6 percent rate of return, the 
homemaker IRA can add close to $150,000 to retirement savings.
  The previous law limited a nonworking spouse to a $250 maximum IRA 
contribution, and, as women often leave the work force to raise their 
families, the homemaker IRA will help to offset the effects of their 
smaller pensions. The homemaker IRA thus offers significant assistance 
to these spouses in their efforts toward a secure retirement.

[[Page S9858]]

  The pension simplification provisions are an important contribution 
to the long-term financial security of our citizens. These measures are 
designed for the benefit of working Americans and will permit small 
businesses to establish pension plans for their employees. Further, 
these measures encourage savings and bring additional safeguards to 
pension plans, which will ensure the financial independence of millions 
of Americans in their retirement. The bill also includes a provision to 
clear up longstanding problems that plague church pension plans and 
will ensure that clergymen will not face unanticipated additional taxes 
on their modest pensions.
  The extension of the tax exclusion for educational assistance is 
another important aspect of this legislation. This provision will 
extend the exclusion for those who benefit from employer-provided 
tuition assistance. There is no reason to penalize workers for the 
generosity of their employers. The Tax Code cannot ignore the national 
interest in a well-educated and highly skilled work force.
  This bill also includes numerous commonsense tax provisions. The 
limited extension of the orphan drug tax credit will renew credits to 
defray the costs of clinical tests for drugs designed to treat rare 
diseases. The bill also extends the research and experimentation tax 
credit to encourage investment in innovative approaches and new 
technologies.
  I believe that economic growth is one of our most important 
concerns--growth has been anemic since President Clinton pushed through 
his record tax increases of 1993 without a single Republican vote--and 
the growth provisions will begin to address this issue. The bill boosts 
the allowance for small business equipment expensing and extends the 
work opportunity tax credit that brings low-skill people into the work 
force. Unfortunately, however, the minimum wage increase will erect 
additional hurdles for those in search of job opportunities.
  The minimum wage increase is good politics, but, Mr. President, it is 
bad economics. It will result in job losses for hundreds of thousands 
of people in low-skill jobs. It will become prohibitively expensive to 
hire these workers at increased wages. Further, the increased minimum 
wage will result in inflationary ripples through the economy as wage 
costs drive up prices. I also believe that the minimum wage increase 
is, in effect, an unfunded mandate that will increase labor costs for 
State and local governments and thus boost tax rates.
  If we are serious about growth and the expansion of opportunity, Mr. 
President, this Congress will focus its attention on small business 
incentives and pension reforms, not minimum wage increases. We will 
bring economic opportunities to millions of Americans through 
elimination of the barriers to entry-level jobs rather than 
congressional efforts to set wages. After all, the typical worker earns 
the minimum wage for just a brief period, and the minimum wage is a 
way-station rather than a destination in American careers.
  I wish that the Congress passed a bill that I could support, and, 
yet, I believe that our obligation is to the Americans of the next 
generation rather than the political imperatives of the next election. 
There are some good provisions in this bill, but there are provisions 
to which I cannot lend my support, and I thus voted against the 
bill.

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