[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Senate]
[Pages S3199-S3224]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. GRASSLEY (for himself, Ms. Moseley-Braun, and Mr. Burns):
S. 573. A bill to amend the Internal Revenue Code of 1986 to allow an
income tax deduction for student loan interest payments; to the
Committee on Finance.
the loan interest forgiveness for education act
Ms. MOSELEY-BRAUN. Mr. President, I am pleased to join my
distinguished colleague from Iowa, Senator Grassley, and my colleague
from Montana, Senator Conrad Burns, in introducing S. 573, the Loan
Interest Forgiveness for Education Act, the LIFE Act. One of the major
forces driving this bill is our growing concern that parents and
students in this country have access to a quality education without
amassing enormous student loan bills.
The cost of college has a direct impact on access to college. The
more tuition goes up, the more students will be
[[Page S3200]]
priced out of their opportunity for the American dream. Our country
will suffer the loss of talent and training. We cannot as a nation
prepare for the 21st century by making it more difficult for our
children to access higher education.
This Congress is working hard to eliminate the Federal deficit. In
part, this is because we know that piling on more debt ultimately
undermines the ability of the generations that follow us to achieve the
American dream, and to do what we have done--live better than our
parents. Mr. President, that is why we are introducing this LIFE bill.
It will do two things: encourage individuals to go to college, and
reduce the cost of a college education. I believe very strongly, Mr.
President, that the way to achieve this dream is to ensure that
everyone who is in need of financial assistance to attend an
institution of higher learning has that opportunity. They should have
the opportunity, as we did, to pursue their dreams.
It is absolutely essential that we continue to invest in our most
important asset--our children. That is what the Loan Interest
Forgiveness for Education Act is all about. The bill will create a
deduction for qualified student loan interest including expenses for
interest paid on student loans used to pay postsecondary education
expenses such as tuition, books, room and board. This bill is similar
to provisions contained in both the Republican and Democratic
leadership education bills, S. 1 and S. 12, and is also similar to a
provision passed by Congress as part of the 1995 Budget Reconciliation
Act.
As you may know, President Clinton has proposed a bill to allow a
$1,500 tax credit per year for the first 2 years of college or a
$10,000 deduction per person per year for qualified college tuition
expense. I am glad to see President Clinton focus on investing in
education for the middle class because it is truly our only hope of
remaining competitive in this global marketplace. However, I believe we
should go even further by investing in those working parents too, who
would otherwise not be able to send their children to college without
loans.
The median income for a family of four as reported by the Joint
Committee on Taxation in 1995 was $49,531. If that household income was
comprised entirely of wage or salary income and, if that household
filed a joint return claiming the standard deduction and four personal
exemptions, the household's income tax liability would have been $4,947
and a total payroll tax liability of $7,578 resulting in a total tax
liability of $12,525. When considering the tax liability and the
limited income of the median household family, a large number of
American families will not have the extra income to save $80,000 for
two children to go to college.
This legislation will focus on those that do not have parents who can
afford to save for college. Those working parents who can barely afford
to make ends meet; parents who provide the basics of life such as food,
clothing, shelter, and medical insurance for their children but do not
make the extra income to save for college. Even if families could
afford to save the money to pay for their children's college education,
income tax liability of many families is not high enough to benefit
from the President's proposal because neither the $10,000 tax deduction
nor $1,500 tax credit is refundable.
Students whose parents are unable to pay for college up front are
generally the ones who rely more heavily on student loans to pay for
college and should be given the same type of tax relief as those that
come from families that can afford to finance the costs of a college
education from savings. That is why the Loan Interest Forgiveness for
Education Act, or the LIFE Act, helps not only to improve the life of
students who might not otherwise have the opportunity to attend
college, it also helps to improve their life after graduation. These
students generally have an enormous burden of debt and the interest
costs impair their ability to get started in life after college. New
college graduates just beginning their careers all too often have to
pay a higher percentage of their income in educational loan bills than
they do in rent.
I believe we should encourage individuals who cannot afford to pay
for college to realize that education is a wise investment in their
future. Although some individuals must incur substantial debt to
complete their education, the Government should do their part to make
sure that these students will not suffer because of this decision for
the next 20 years of their lives.
The Government uses the Tax Code to help American families buy their
own homes. It is equally important to use the Tax Code to encourage
higher education. It is an investment in our children, our economy and
our future. If a child receives a college education, that person is
much more likely to be able to afford to purchase a home. The link
between educational attainment and earnings is unquestionable.
Statistics show that the average earnings of the most educated
Americans are 600 percent greater than that of the least educated
Americans. The Department of Labor estimates that, by the year 2000,
more than half of all new jobs will require an education beyond high
school. As we move nearer to the 21st century and into an information-
driven economy, the gap between high school and college graduates is
growing. A college graduate in 1980 earned 43 percent more per hour
than a high school graduate. By 1994, that had increased to 73 percent.
When we reduce access to higher education, we reduce access to the
American Dream.
Given the fact that many of the people in the young generation are
going to be pushed into the ocean of responsibility to pay off our
national debt, and pay higher Social Security taxes to support us, the
least that we could do, Mr. President, is to provide them with a life-
preserver. It is the ethical thing to do and the right thing to do.
This life-preserver that I speak of, Mr. President, is education. By
supporting this educational initiative we are affording members of this
young generation and others a chance to arm themselves with knowledge
as well as enhance their income potential. This is very important
because most economist agree that education produces substantial
spillover, which simply means indirect effects, that will benefit
society in general. Examples cited of such positive spillover effects
include a more efficient work force, lower unemployment rates, lower
welfare costs, and less crime. All of these are issues that concern us
greatly. Furthermore, an educated electorate is said to foster a more
responsive and effective government. So as you can see this bill is
very timely.
This bill comes at a time when the cost of attending an institution
of higher learning has increased at a rate higher than inflation. In
the 1980's, for example, the cost of a year's tuition at a publicly
supported college increased from $635 to $1,454, an increase of almost
130 percent. And a year's tuition at a private college increased from
an average of $3,498 to $8,772, an increase of 150 percent. A more
recent figure can be found in the state of Illinois where, as of 1994,
students at Northern Illinois University and Illinois State University,
both public institutions, were paying nearly 96 percent more than the
increase in the inflationary rate for that same year. The number of
loans borrowed through the main Federal college loan programs rose by
nearly 50 percent since 1990, from 4,493,000 in 1990 to 6,672,000 in
1995. Rapid increases in college tuition force today's students to
borrow much more than their predecessors did, yet in 1986, the interest
deduction for student loans was eliminated.
I am working with the GAO, [Government Accounting Office] to further
investigate why college tuition is rising so rapidly, and what the
Federal Government can most appropriately do about this problem. One of
the arguments against providing up front tax cuts to parents for the
costs of education is that tuition costs will increase to take into
account the tax benefit given to parents. However, the Loan Interest
Forgiveness for Education Act will not increase the cost of tuition
because the benefit will be received after individuals have graduated.
This bill will improve the life of college graduates while at the same
time encouraging them to pay back their student loans.
We must improve the accessibility of education, so that all Americans
may receive a higher education, not just the wealthy elite.
It is a critical matter in terms of the opportunities than this
generation of
[[Page S3201]]
Americans will have to access and maintain the American dream. The fact
that Americans depend on people being able to make a living and support
themselves, and to reach as high as their talents will take them,
should not be hampered in any way by the limitation of availability of
educational opportunity because of costs.
I know that I would not be in the Senate today were it not for
quality public education and the accessibility of affordable higher
education. The Chicago Public Schools gave me a solid foundation, and I
was able to attend the University of Illinois and the University of
Chicago in spite of the fact of that my parents were working-class
people. I am committed to seeing that the students of this generation
and those who follow them have even greater opportunities than I have
had. I am absolutely determined to ensure that the exploding cost of
college does not close the door to opportunity for them. Our generation
has an absolute duty to keep the door open, and to preserve and enhance
the opportunity for a better life and the American dream for the 21st
century.
Certainly this generation should not have to bear a burdensome loan
portfolio when they graduate that keeps them from making other optimal
economic choices.
So, Mr. President, I introduce this legislation. I send it to the
desk, and I encourage my colleagues to consider cosponsorship of it. I
hope that by tax day next year we are able to provide those students
who are going to college and have taken on loans the opportunity to
have some loan forgiveness once they graduate.
______
By Mr. ABRAHAM (for himself and Mr. Levin):
S. 574. A bill to delay the application of the substantiation
requirements to reimbursement arrangements of certain loggers; to the
Committee on Finance.
TAX RELIEF FOR MICHIGAN LOGGERS
Mr. ABRAHAM. Mr. President, April 15 is a day that generally is
viewed with consternation throughout the Unided States. For many
loggers in Michigan's Upper Peninsula, however, tax day is synonymous
with bankruptcy. This is because the IRS insists on enforcing a little
known, and less understood, tax law affecting loggers in my State.
For nearly three decades, businesses in the timber industry have used
an accounting plan that allocated a percentage of loggers' wages as
rental for the use of the loggers' chain saws, thereby excluding this
portion of their wages from income tax withholding, FICA, and FUTA
taxes. This practice was acceptable to the IRS until the Family Support
Act of 1988 required that an employee business expense reimbursement
not be excluded from an employee's income unless it is paid under an
accountable plan. The timber industry's traditional accounting
procedure was not an accountable plan.
Unaware of the change in policy, the timber industry continued to use
their old accounting plan in violation of the new law. Many small
logging operations and loggers have now been assessed penalties and
interest by the IRS because of their violation of this obscure law. It
should be noted that most of the timber industry was in line with the
new policy by tax year 1993 and continues to abide by the correct
accounting procedure policies. Nonetheless, some loggers face fines of
$20,000 or more. Mr. President, many loggers in Michigan's Upper
Peninsula earn less than $20,000 per year.
To add to the frustration, IRS headquarters has stated that each
district operation has the authority to decide the effective date of
the requirement for accountable plans, and in other States, the IRS has
decided to have an effective date for this accounting procedure as it
relates to the timber industry of January 1, 1993. The IRS office in
Michigan, however, will not agree to the January 1, 1993 date which is
being used in other parts of the country. Michigan is the only State in
which the IRS will not accept this date.
Mr. President, relief for these loggers is long overdue, and today
Senator Levin joins with me to introduce legislation that will change
the Tax Code and make permissible the qualified logger reimbursement
arrangement for loggers in any taxable year prior to January 1, 1993.
It will also provide for a refund or credit of any overpayment of tax
accrued during these years. This correction is long overdue and I hope
for swift adoption during this session of Congress.
______
By Mr. DURBIN (for himself, Mr. Hagel, Mrs. Murray, Ms. Snowe,
Mr. Harkin, Mr. Allard, Mr. Johnson, Mrs. Hutchison, Mr. Reid,
Mr. Shelby, Mr. Roberts, Mr. Baucus, Mr. Kerrey, Mr. Jeffords,
Mr. Mack, Ms. Collins, and Mr. Biden):
S. 575. A bill to amend the Internal Revenue Code of 1986 to increase
the deduction for health insurance costs of self-employed individuals;
to the Committee on Finance.
The Health Insurance Tax Equity For Self-Employed Act
Mr. DURBIN. Mr. President, I will use just 2 or 3 minutes and defer
to my colleague. I want to say I am glad he is with me today. It is one
of our first bills as new Members of the U.S. Senate and one that is
very important, not only to our States but also to the Nation. I think
it is extremely fitting that Senator Hagel and 14 of our colleagues
have joined me in introducing a bipartisan bill to provide tax relief
for a group of hard-working Americans, namely the self-employed. What
we are trying to do with this bill, and I think it is appropriate to
discuss it on April 15, is to say that people who are self-employed,
small business people, farmers and the like, should enjoy the same tax
benefits of deduction for health insurance premiums as corporations.
This is only simple fairness.
If I work for a big company, they can literally write off every penny
of the cost of my health insurance that they pay. However, if I happen
to be a farmer in central Illinois, or a self-employed woman in Chicago
working at home at a computer, and I go to buy health insurance, only
40 percent of the premiums could be deducted. That is unfair and it
creates a real disadvantage. We should encourage people to take out
health insurance. The best way to encourage them to do it is to make it
more affordable by providing full deductibility. In my State of
Illinois there are over 400,000 people who are self-employed who would
benefit from this tax relief. In fact, over 3 million Americans who are
self-employed do not have health insurance. That represents 25 percent
of the self-employed. That is a high percentage compared to other
groups.
So, what Senator Hagel and I are trying to do with our legislation is
to level the playing field, give them all equal treatment and fair
treatment. I think this tax relief could be worth $500 or $1,000 for
somebody today who could deduct only 40 percent, but in the future
could deduct 100 percent under our legislation.
I thank my colleague for joining me in introducing this bill. It is
supported not only by the National Federation of Independent
Businesses, the National Farm Bureau, the Pork Producers, the Corn
Growers and the Farmers Union, but also by the National Association of
Women Business Owners. Between 1987 and 1996 the number of women-owned
businesses increased by 78 percent, and about 80 percent of these are
individual proprietorships.
I think this is an issue whose time has come. I have spoken to many
of my colleagues and they believe that is the case, too. I hope we can
work as part of any budget agreement to include this provision.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 575
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Health Insurance Tax Equity
for Self-Employed Act''.
SEC. 2. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED
INDIVIDUALS INCREASED.
(a) In General.--Section 162(l)(1) of the Internal Revenue
Code of 1986 (relating to special rules for health insurance
costs of self-employed individuals) is amended to read as
follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section
[[Page S3202]]
an amount equal to the amount paid during the taxable year
for insurance which constitutes medical care for the
taxpayer, the taxpayer's spouse, and dependents.''.
(c) Effective Date.--The amendment made by this section
applies to taxable years beginning after December 31, 1996.
Mr. HAGEL. Mr. President, I am pleased to join with my distinguished
colleague from Illinois, Senator Durbin, to introduce legislation that
will cut taxes and improve access to health insurance for millions of
small business owners and farmers across America.
Our legislation--the Health Insurance Tax Equity for Self-Employed
Act--is a bill about fairness. Under current law, corporations can
deduct from their income tax the full amount of money spent on health
care for their employees. But the 10\1/2\ million self-employed men and
women in America cannot fully deduct what they spend on their own
health care. They can deduct a percentage--which is now 40 percent and
will increase to 80 percent by 2006--but they cannot deduct the entire
cost.
Our bill would immediately eliminate this disadvantage--effective
January 1, 1997--and put the self-employed on the same footing with
their incorporated competitors. And it would make health insurance more
affordable for the 3 million uninsured Americans who are self-employed.
This bill will make a real difference to real people. The high cost
of health insurance was the No. 1 problem that small businesses cited
in a recent comprehensive study by the National Federation of
Independent Businesses [NFIB]. Small business owners often pay 30
percent more for the cost of their health insurance than do larger
companies--they pay more, but they can deduct less.
Our bill will make health insurance more affordable for small
business owners. That is why it has been endorsed by the National
Federation of Independent Businesses.
It also is strongly supported by the National Farm Bureau and by the
Nebraska Farm Bureau Federation. Both have sent me letters endorsing
this legislation. I ask unanimous consent that the full text of these
be submitted for the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 7.)
Mr. HAGEL. More than 95 percent of farmers and ranchers are self-
employed and generally pay the full cost of their insurance coverage
themselves. Our bill makes a real difference to them as well.
I am involved in this issue because it is vitally important to my
home State of Nebraska. There are 98,000 self-employed people in
Nebraska, of whom more than 10,000 are uninsured. These are real
numbers. These are real people. This legislation can make a real
difference for them--making their health insurance more affordable and
their businesses more profitable.
Every State in America has hardworking, self-employed men and women
who need the tax relief and health care assistance this bill offers. I
hope my colleagues will support this important effort.
Exhibit 1
Nebraska Farm Bureau Federation,
Lincoln, NE, April 10, 1997.
Hon. Chuck Hagel,
U.S. Senate,
Washington, DC.
Dear Chuck: On behalf of Nebraska's largest farm
organization, I am writing to offer Nebraska Farm Bureau
Federation's strong support for your legislation that would
provide a 100 percent tax deduction of health insurance
premiums for the self-employed.
Deductibility of health insurance premium costs for self-
employed individuals has been a long standing goal of Farm
Bureau. More than 95 percent of farmers and ranchers are
self-employed and generally pay the full cost of their
insurance coverage themselves. In addition, many farm
families are forced into a situation where a spouse must get
an off-farm job primarily to obtain more affordable health
insurance coverage for their family.
The cost of self-employed health insurance, when not
purchased as part of a group, can be significant and cause
financial hardships for some individuals and farm families.
In many cases, farmers and ranchers pay more than $3,000 to
$5,000 annually for health insurance. Farmers and ranchers
are looking at many avenues to cut skyrocketing health
insurance premiums. More farmers have moved to higher
deductible policies--quite often in the $2,500 to $5,000
range. In other cases, farmers are opting to go without
health insurance altogether.
As you know, current federal tax law allows self-employed
people to deduct 30 percent of the cost of their health
insurance premiums. That will increase to 80 percent by the
year 2006. Current federal tax law also allows corporations
to deduct 100 percent of their health insurance premium
costs. Members of Nebraska Farm Bureau believe that fairness
and equity dictate that Nebraska's self-employed individuals
receive the same tax treatment as other employees and
employers.
Nebraska Farm Bureau appreciates your work on the
introduction of this legislation and we wholeheartedly offer
our support to this effort.
Respectively,
Bryce P. Neidig, President.
____
National Federation of Independent Business,
Washington, DC, April 10, 1997.
Hon. Chuck Hagel,
U.S. Senate,
Washington, DC.
Dear Senator Hagel: On behalf of the 600,000 small business
owners of the National Federation of Independent Business
(NFIB), I am writing to express our strong support of your
legislation to extend the deduction of health insurance
premiums for the self-employed to 100 percent, effective
immediately upon date of enactment.
Current law's tax treatment of the health insurance
premiums for the self-employed is extremely unfair. The three
million self-employed Americans who are presently uninsured
should have access to the same 100 percent deduction that
CEO's and employees in Fortune 500 companies receive. The
Health Insurance Portability and Accountability Act of 1996
gave the self-employed the ability to take a 40-percent
deduction in 1997 and gradually phases in a permanent
deduction for the self-employed reaching 80 percent in 2006.
Enabling the self-employed to take an 100 percent deduction
would certainly help us to make health care more affordable
for this important group of employers and their employees.
The cost of health insurance is the number one problem that
small businesses cited in a 1996 NFIB Education Foundation
study. Small Business Problems and Priorities, the most
comprehensive study of its kind in the country. Small
business owners often pay 30 percent more for the cost of
their health insurance than larger companies. In addition,
self-employed business owners face the cost that result from
having to pay income taxes on the majority of the amount of
their health insurance premiums. Instead of penalizing the
self-employed in this manner, Congress should be doing all it
can to help the self-employed, a group who plays a critical
role in our economy.
NFIB appreciates your understanding of this issue and your
willingness to introduce this significant piece of
legislation.
Sincerely,
Dan Danner,
Vice President, Federal Governmental Affairs.
______
By Mr. LEVIN (for himself and Mr. McCain):
S. 576. A bill to amend the Internal Revenue Code of 1986 to provide
that corporate tax benefits from stock option compensation expenses are
allowed only to the extent such expenses are included in corporate
accounts; to the Committee on Finance.
THE ENDING DOUBLE STANDARDS FOR STOCK OPTIONS ACT
Mr. LEVIN. Mr. President, for the past several years, the Wall Street
Journal has published a special pullout section of the newspaper with a
number of articles on executive pay. Last year's headline read, ``The
Great Divide: CEO Pay Keeps Soaring Leaving Everybody Else Further and
Further Behind.'' Last week, Business Week magazine featured this cover
story on its 47th annual pay survey: ``Executive Pay: It's Out of
Control.''
Both publications analyze the pay of top executives at approximately
350 U.S. major corporations. Their analysis shows that the pay of the
chief executive officers continues to outpace inflation, other workers'
pay, the pay of CEO's in other countries, and company profits.
According to Business Week, for CEO's of the leading 350 companies
studied, their average total compensation rose 54 percent last year to
about $5.7 million, which came on top of 1995 CEO pay increases of 30
percent. So in 1995 we had the CEO's increasing their pay by 30
percent, last year increases of 54 percent. Blue-collar employees
received a 3 percent raise in 1996, and white-collar workers fared only
slightly better with a 3.2 percent raise.
So in 1996 the pay of the top executives was 209 times the pay of the
factory employee, which is a huge increase. The ratio of executive pay
to factory workers' pay in the United States was already two to three
times more than the pay ratio in any other country. Suddenly, now we
see this going up to a ratio of 209 times the pay of the average
factory worker. The last time we had statistics, the ratio of executive
pay to factory worker pay was 20 times in Japan and 25 times in
Germany. Those statistics are a few years
[[Page S3203]]
old but we do not think they have changed that much.
These statistics, the 3.2 percent pay increase that went to the white
collar workers and the 3 percent increase in wages and benefits that
went to America's blue collar workers, represent a growing problem in
America, and represent a gap that is growing. The question is now what?
Is this gap going to continue? That is a question more for the market
than for government.
There is something that government is currently doing that can change
this, and that is right now we permit stock options, which represent
the biggest portion of corporate pay, to be taken as a tax deduction
for income tax purposes, although it is not shown as an expense on the
company's books. There is no other form of executive compensation for
which this is true. Every other form of executive compensation, of
compensation for anybody, is shown as an expense on the company's books
when it is taken as a deduction on income tax.
There is no double standard for any form of compensation in our
country, in our Tax Code, except for stock options. If a corporate
executive gets stock, that is an expense on the company's books. It is
a tax deduction on their income taxes. If there is a bonus based on
performance, that is an expense on the company's books, and it is a tax
deduction. But when it comes to stock options, the Tax Code right now
permits there to be a tax deduction for the company when that stock
option is exercised. However, the company does not show that stock
option as an expense on its own books. It is a stealth exception. It is
a double standard. We should end it.
That is why, today, Senator McCain and I are introducing legislation
to end this corporate tax loophole that is fueling the increases in
executive pay and is fueling those increases with taxpayer dollars.
Again, this loophole allows companies to deduct from their income taxes
these multimillion dollar pay expenses that never show up on the
company office books as an expense.
A just completed survey of CEO pay at 55 major Fortune 500
corporations by a leading executive compensation publication called
Executive Compensation Reports, found that in 1996 stock options
averaged about 45 percent of total executive pay. That is up from 40
percent just 1 year ago, and stock options provided more money to the
55 CEO's studied than their base salary or their annual bonus. In fact,
for 1996, salary accounted for only 22 percent of CEO compensation
while stock options accounted for 45 percent.
These stock options enable a CEO typically to buy company shares at a
set price for a period of time, which is usually 10 years. Since stock
prices generally rise over time, stock options have become the most
lucrative source of executive pay.
Now, again, I do not think anyone is suggesting government ought to
determine how much executives get paid. We should not. Stockholders and
boards of directors should set that. But we should determine whether or
not we want to allow our Tax Code to contain this loophole any longer,
where this one form of executive compensation and only this form of
compensation is dealt with by a double standard. We permit the company
to get the tax deduction when it comes to filing their income tax
return, but we do not require the company to show that same expense as
an expense on their books, thereby hiding the cost to the company of
the stock option cost but still getting a tax deduction.
Now, say, a corporate executive exercises stock options to purchase
company stock and makes a profit of $10 million. The company can claim
the full $10 million as a business expense and deduct it from the
company's tax bill. But when it comes to showing that expense on their
books, on their annual report, it is not an expense. It is a footnote,
not required to be shown as an expense like other forms of
compensation, but rather hidden in a footnote.
This is not an accounting issue. The accounting authorities, the
experts, have decided how this should be handled as an accounting
matter. This is now a tax loophole issue. The question is whether or
not we, on tax day, want to continue a loophole for executives--because
that is who we are talking about in approximately 98 percent of the
cases. In perhaps 1 or 2 percent of the cases these stock option plans
are broadly based and help average employees, and we would not include
that in our bill. But in maybe 98 percent of the cases, these are
narrowly based stock option plans only going to the top officials of
companies.
This bill would end the double standard. It gives a choice. If you
want to take it as an expense for tax purposes, deduct this as
compensation for tax purposes, that is fine, no restriction. But then
you have to show it on your books as an expense also. You do not want
to show it on your books as an expense? That is your choice, but then
we will not let you take it as an expense on your income taxes and have
the rest of the taxpayers of the United States foot the bill.
Stock option pay is either a company expense or it is not. It either
lowers company earnings or it does not. Something is clearly out of
whack when in the tax law a company can say one thing at tax time and
something else to investors at the annual meeting.
This bill that I am introducing with Senator McCain today would end
the double standard that allows corporations to treat stock option pay
one way on the tax form and the opposite way on the company's books.
I want to emphasize that this bill does not prohibit stock options.
It doesn't put a cap on them. It doesn't limit them in any way. It just
says, if you want to claim stock option pay as an expense at tax time,
you have to treat it as an expense the rest of the year as well.
In summary, the bill would not prohibit stock options. It would not
put a cap on them or limit them in any way. It just says, if a company
wants to claim stock option pay as an expense at tax time, it has to
treat it as an expense the rest of the year as well. Period.
The bill provides one exception to ensure that closing the stock
option tax loophole doesn't affect the pay of average workers.
Right now, stock option pay is overwhelmingly executive pay. In 1994,
the most extensive stock option review to date, covering 6,000 publicly
traded U.S. companies, found that only 1 percent of the companies
issued stock options to anyone other than management and 97 percent of
the stock options issued went to 15 or fewer individuals per company.
Nevertheless, there are a few companies that issue stock options to
all employees and do not disproportionately favor top executives. Our
bill would allow companies that provide broad-based plans to continue
to claim existing stock option tax benefits, even if they exclude stock
option pay expenses from their books. Like FASB, we would encourage but
not require these companies to treat these expenses consistently. By
making this limited exception, we would ensure that average worker pay
would not be affected by closing the stock option loophole. We might
even encourage a few more companies to share stock option benefits with
average workers.
The bottom line is that the bill that Senator McCain and I are
introducing today is not intended to stop the use of stock options. Our
bill is aimed only at stopping the manipulation of stock option
expenses by those companies that are trying to have it both ways--
claiming stock option pay as an expense at tax time, but not when
reporting company earnings to Wall Street and the public. It is aimed
at ending a stealth tax benefit that is fueling the wage gap, favoring
one group of companies over another, and feeding public cynicism about
the fairness of the Federal Tax Code.
It would also curtail an expensive tax loophole. The Congressional
Budget Office has estimated that eliminating the corporate stock option
loophole would save taxpayers $373 million over 7 years and $933
million--almost $1 billion--over 10 years. In this era of fiscal
austerity, that's money worth saving.
Mr. President, I ask unanimous consent that the bill Senator McCain
and I are introducing be printed in the Record, along with a section-
by-section analysis of the bill that would end the double standards for
stock options.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 576
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S3204]]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ending Double Standards for
Stock Options Act''.
SEC. 2. REQUIREMENTS FOR CONSISTENT TREATMENT OF STOCK
OPTIONS BY CORPORATIONS
(a) Consistent Treatment for Tax Deduction.--Section 83(h)
of the Internal Revenue Code of 1986 (relating to deduction
of employer) is amended by adding at the end the following
new paragraph:
``(2) Special rules for property transferred pursuant to
stock options.--
``(A) In general.--In the case of property transferred in
connection with a stock option, the deduction otherwise
allowable under paragraph (1) shall not exceed the amount the
taxpayer has treated as an expense for the purpose of
ascertaining income, profit, or loss in a report or statement
to shareholders, partners, or other proprietors (or to
beneficiaries). In no event shall such deduction be allowed
before the taxable year described in paragraph (1).
``(B) Exception for broad-based option programs.--
Subparagraph (A) shall not apply to property transferred in
connection with a stock option if, at the time the stock
option was granted--
``(i) substantially all employees of the corporation
issuing such stock option were eligible to receive
substantially similar stock options from such corporation,
``(ii) no individual performing services for such
corporation received more than 20 percent of the total number
of stock options granted by such corporation during the
taxable year, and
``(iii) at least 50 percent of the total number of stock
options granted by such corporation during such taxable year
were issued to employees other than individuals performing
executive or management services for such corporation.
``(C) Employees covered.--For purposes of this paragraph,
an employee shall be taken into account only if--
``(i) the employee is a full-time employee, and
``(ii) substantially all of the services performed by the
employee for the corporation are performed within the United
States.
``(D) Special rules for controlled groups.--The Secretary
shall prescribe rules for the application of this paragraph
in cases where the stock option is granted by a parent or
subsidiary corporation (within the meaning of section 424) of
the employer corporation.''
(b) Consistent Treatment for Research Tax Credit.--Section
41(b)(2)(D) of the Internal Revenue Code of 1986 (defining
wages for purposes of credit for increasing research
expenses) is amended by inserting at the end the following
new clause:
``(iv) Special rule for stock options and stock-based
plans.--The term `wages' shall not include any amount of
property transferred in connection with a stock option and
required to be included in a report or statement under
section 83(h)(2) until it is so included, and the portion of
such amount which may be treated as wages for a taxable year
shall not exceed the amount of the deduction allowed under
section 83(h) for such taxable year with respect to such
amount.''
(c) Conforming Amendments.--Section 83(h) of the Internal
Revenue Code of 1986 is amended by striking ``In the case
of'' and inserting:
``(1) In general.--In the case of''.
(d) Effective Date.--The amendments made by this section
shall apply to property transferred and wages provided on or
after the date of enactment of this Act, pursuant to stock
options granted on or after such date.
____
Section-by-Section Analysis of Ending Double Standards for Stock
Options Act
Short Title. Section 1 of the bill provides the short
title.
Consistent Treatment. Section 2 of the bill would establish
requirements for consistent treatment of stock options by
corporations when deducting stock option compensation as a
business expense under Section 83(h) or claiming stock option
wages to obtain a research tax credit under Section 41.
Tax Deduction. Subsection 2(a) of the bill would amend
section 83(h) of the Internal Revenue Code by adding at the
end a new paragraph (2) with special rules for corporate tax
deductions related to stock options. A new subparagraph 2(A)
of Section 83(h) would limit the deduction that a company
could claim for stock option compensation to no more than the
amount of stock option expense reported by that company in a
financial statement to stockholders. The subsection would
continue current law by allowing the deduction at the time
the stock option beneficiary exercises the option and
includes it in personal income.
Average Workers Protected. A new subparagraph 2(B) of
Section 83(h) would establish an exception for stock option
plans that benefit average workers. To qualify, substantially
all full-time, U.S. employees in a company would have to be
eligible to receive substantially similar company stock
options during the taxable year; no one person could have
received more than 20 percent of the stock options issued
during the year; and at least 50 percent of the stock options
would have had to be issued to non-management employees
during the year. A new subparagraph 2(C) would state that
only full-time employees performing services in the United
States would need to be taken into account in determining
eligibility for the exception.
Controlled Groups. A new subparagraph 2(D) of Section 83(h)
would authorize the Secretary of the Treasury to issue
regulations applying these rules to stock options granted by
a parent or subsidiary corporation of the employer
corporation.
Tax Credit. Subsection (b) of the bill would amend Section
41 of the Internal Revenue Code to clarify the ``wages'' that
may be used in calculating the research tax credit allowable
under Section 41. The bill would add a new clause (iv) at the
end of Section 41(b)(2)(D) stating that the allowable
``wages'' under Section 41 shall not include stock option
compensation, until a company reports that compensation in a
financial statement to stockholders, as provided in Section
83(h)(2) (as amended by this bill). The clause would limit
the amount of stock option compensation allowed as a
deduction under Section 83(h). Stock option wages could be
claimed under Section 41 only after a company reported the
compensation expense under Section 83(h)(2), as amended by
this bill.
Conforming Amendment. Section (c) of the bill would make
technical conforming amendments to Section 83(h).
Effective Date. Section (d) of the bill would make the
amendments applicable only to stock options granted on or
after the date of enactment.
Mr. McCAIN. Mr. President, I rise today to introduce legislation with
my friend and colleague, Senator Levin, entitled Ending Double
Standards for Stock Options Act. This legislation requires companies to
treat stock options for highly paid executives as an expense for
bookkeeping purposes if they want to claim this expense as a deduction
for tax purposes.
Currently, corporations can hide these multimillion-dollar executive
compensation plans from their stockholders or other investors because
these plans are not counted as an expense when calculating company
earnings. Even the Federal Accounting Standards Board [FASB] recognized
that stock options should be treated as an expense for accounting
purposes. This month, new accounting disclosure rules issued by FASB
require that companies include in their annual reports a footnote
disclosing what the company's net earnings would have been if stock
option plans were treated as an expense.
An article in the Wall Street Journal, dated January 14, 1997, stated
these new rules could reduce some companies' annual earnings by as much
as 11 to 32 percent. One might reasonably ask how an arcane accounting
rule could have such a large effect on the bottom line of corporations.
The answer lies in the growth and value of stock options as a means of
executive compensation. These plans now account for about one-fourth of
total executive compensation.
We all have heard the reports of executives making multimillion-
dollar salaries, while average worker salaries stagnate or fall.
Recently, The Washington Post reported that Michael Eisner, the CEO of
Disney, was given a stock option package estimated to be worth as much
as $771 million over the next 10 years. Why shouldn't the value of this
compensation package be included in calculating Disney's earnings? How
can stockholders evaluate the true value of executive compensation if
the value is just buried in a footnote somewhere in the annual report?
No other type of compensation gets treated as an expense for tax
purposes, without also being treated as an expense on the company
books. This double standard is exactly the kind of inequitable
corporate benefit that makes the American people irate and must be
eliminated. If companies do not want to fully disclose on their books
how much they are compensating their executives, then they should not
be able to claim a tax benefit for it.
This legislation does not require a particular accounting treatment;
the accounting decision is left to the company. This legislation simply
requires companies to treat stock options the same way for both
accounting and tax purposes.
I hope my colleagues will join in cosponsoring this important
legislation that will end the double standard for executive stock
option compensation.
I ask unanimous consent that the two articles to which I have
referred be printed in the Record.
There being no objection, the articles were ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Jan. 14, 1997]
As Options Proliferate, Investors Question Effect on Bottom Line
(By Laura Jereski)
How much does Microsoft Corp. really earn from its
business?
[[Page S3205]]
For the fiscal year ended June 30, the Redmond, Wash.,
software giant said pretax income rose 56% to a record $3.4
billion. But a telltale footnote to its income statement
revealed that pretax earnings would have been $2.8 billion--
$570 million less--if Microsoft had compensated its employees
entirely with cash.
But employees didn't get just cash. Like many companies
these days, Microsoft sprinkles stock options liberally among
its workers. That makes a big difference in the earnings
outlook at Microsoft and elsewhere.
Wall Street and Main Street fervently embrace options as a
tonic for much of what ails corporate America. Lucrative for
employees, options appear to be cost-free to the employer.
Distribute them broadly, the wisdom goes, and employees will
pull together, company returns will rocket and shareholders
will cheer.
But some investors and critics say the options downpour is
muddying companies' earnings pictures. Companies can show
investors higher earnings if they slash compensation costs by
handing out options. As Byron Wien, Morgan Stanley & Co.'s
top stock-market strategist, points out: ``In the short run,
people are overstating current earnings because part of
employees' compensation is coming in the form of options.''
bet on growth prospects
Put another way: Investors may be making a bigger bet on
company growth prospects than they realize. If Microsoft's
options were treated as an expense, its net income last year
would have been about $1.8 billion, or $2.85 a share, instead
of $2.2 billion, or $3.43 a share--meaning its $83.75 closing
stock price on the Nasdaq Stock Market yesterday would
reflect an earning multiple of nearly 30 times last year's
earnings instead of about 24 times.
Michael Brown, Microsoft's chief financial officer, scoffs
at that notion: ``The Street figures it our pretty fast.''
But disparities will be popping up all over come March when
new accounting disclosure rules by the Financial Accounting
Standards Board take effect. For the first time, companies
will have to include a footnote in their annual reports
disclosing what net would have been if options were treated
as an expense--something Microsoft and some others are
already doing. Murray Akresh, a compensation expert with
Coopers & Lybrand, says the earnings difference could be as
much as 11% for some companies. By the time the full impact
of the new rule is felt at the end of a four-year transition
period, the difference could reach 32%.
Companies' true earning power is of particular concern
because earnings growth has propelled the stock market's
sustained rise. But some money managers say that rise is
making options more costly for companies to issue.
``What's really happening is that companies are selling
their stock to employees at a discount,'' says Richard
Howard, a mutual-fund manager at T. Rowe Price Associates in
Baltimore. Often, the companies then turn around and buy
stock at the higher market price to hold steady the number of
shares outstanding.
``There's a real economic cost when stocks are going up,''
Mr. Howard says. ``That's when options cost the most.''
options have value
One measure of that aggregate cost can be seen in stock-
buyback programs. In 1996, buybacks totaled $170 billion,
according to Securities Data Co., a Newark, N.J., securities-
market-data company, up 72% from the previous year's $99
billion. Buyback costs are partly offset by the money
companies collect from employees who exercise their options
and buy.
Some investors say the costs ought to be reflected in
companies' income statements at the time the employees earn
the options. ``Stock options have value, so they should be
recorded as an expense,'' says Jerry White, president of
Grace & White, a New York money-management firm.
And some shareholder activists are rebelling against the
amount of options being dispensed. Institutional Shareholders
Services, which votes on shareholder issues on behalf of many
large investors, votes against about one in five option plans
as too generous and expensive. Says ISS research director
Jill Lyons: ``A human being has to say, `This is too much.'
''
ISS focuses on how much shareholder value option plans
transfer, rather than how they might affect company earnings.
For example, a magnanimous plan adopted two months ago by San
Jose, Calif., computer networker Cisco Systems Inc. will set
aside 4.75% of Cisco's stock for options annually for three
years. Three-fourths of those options will go to employees
below the vice-president level.
Most of Wall Street applauds this employee motivator.
Analyst Suzanne Harvey at Prudential Securities wrote
recently that Cisco has the best employee benefits in the
computer industry.
But ISS analyst Caroline Kim warned clients that the option
plan would double insiders' stake in Cisco to nearly 23%--
twice what employees in comparable companies get--and hand
over to employees shareholder value of $3.6 billion during
the next three years. Shareholders approved the plan anyway.
Many investors and financial analysts see nothing wrong
with companies' generosity with options. In a recent survey
of 300 top Wall Street stock analysts, eight of 10 said they
would disregard stock options entirely, as long as companies
don't have to take a charge for them. ``I think that's
accounting mumbo jumbo, as opposed to a value measure that
has to do with stock prices,'' says Bruce Lupatkin, head of
research at Hambrecht & Quist.
That view prevailed in 1995, after a long and bruising
battle over whether such options largess should count against
earnings. Hundreds of companies, analysts, venture
capitalists, and even congressmen joined forces to defeat
accounting rule makers who wanted companies to reflect the
actual value of options in their earnings. When the FASB held
hearings on the proposal in Silicon Valley--where such
options have created thousands of fortunes--they were
disrupted by a ``Rally in the Valley'' of the local
citizenry, complete with marching bands, balloons and T-
shirts stamped ``Stop the FASB.''
more widespread
FASB opponents argued that companies incur no cash costs in
granting options. Further, not all options granted will be
exercised since employees leave and stock prices sometimes
fall below the option exercise price. The FASB accountants
argued that options are valuable because they give employees
a long-term right to buy stock at a set price. They lost,
which led to the compromise with the footnote disclosure.
Since then, option grants have become more generous and
more widespread. Once they were mainly used by small, fast-
growing high-technology companies loath to part with precious
cash. Today, big companies are enthusiasts, according to a
survey of 350 large companies by William M. Mercer Inc., a
New York compensation-consulting firm. Annual stock-option
grants soared by more than 20% between 1993 and 1995, the
firm's work shows.
John McMillin, a food-industry analyst at Prudential
Securities, says that means ``the quality of the earnings you
are looking at is often not good.'' What's more, some
companies offer employees the chance to take raises and pay-
related benefits in stock instead of cash, which distorts
earnings even more. (That can be a losing bet for the
employee if the stock fails to rise above the exercise
price.)
One big proponent of options-for-all is General Mills Inc.
The Minneapolis cereal and baked-goods company started
granting options to all employees in 1993. General Mills had
already been offering its top 800 people the opportunity to
take raises and some other benefits in options instead of
cash.
Mike Davis, General Mills' compensation vice president,
says the option programs are ``very attractive for
shareholders'' because they cut fixed costs and thereby boost
profits, though he can't say by how much. One clue: The
company's selling, general and administrative expenses, which
include compensation, dropped by $222 million, or 9%, to $2.1
billion, in May 1996, compared with May 1994. For that same
period, pretax earnings from continuing operations rose $194
million, or 34%, to $759 million.
Meantime, General Mills' options grants have been steadily
ratcheting up. Today, the company distributes almost 3% of
its stock to employees annually, buying enough stock to match
that distribution. ``They are working hard to keep the
shares-outstanding line flat,'' Mr. McMillin of Prudential
says. ``That also means that they have to go into the market
arbitrarily, as options are exercised, and buy stock back at
a higher level.''
Microsoft, to some extent, also uses buybacks to offset
option grants, says, Mr. Brown, its chief financial
officer. But the buybacks have become so expensive that
the company had to invent a new security to help offset
the cost. ``The impact of buying back shares has been more
extreme for them because the price took off so
dramatically,'' says Michael Kwatinetz, a stock analyst
who covers the company for Deutsche Morgan Grenfell.
Still, Mr. Kwatinetz views the options package overall as
``a strong plus'' for employees.
For a while, Microcsoft was coming out about even, in real
money terms. When employees exercise options for, say, $40 a
share, they pay Microsoft the exercise price. Microsoft gets
a tax deduction for the difference between the exercise price
and the market price.
no small change
But the gross buyback cost has been rising, to $1.3 billion
last year from $348 million in 1994. Employees paid Microsoft
about $500 million last year for their stock, and tax savings
further reduced the company's out-of-pocket costs. But
Microsoft still had to shell out about $300 million.
Compared with the $570 million in options expense, that
sounds like Microsoft is getting its money's worth. In fact,
the company is actually paying out $400 million in real cash,
to offset employee stock options whose cost isn't recognized
in its financial statements.
Still, $400 million is no small change, even for a company
as flush as Microsoft. So in December, the company sold $1
billion of a newfangled convertible-preferred stock to
outside investors that will reduce such costs as long as the
stock rises more than 6.88% a year for the next three years.
(The preferred stock, which will be redeemed at as high as
$102.24 a share, can be exchanged for cash, debt or stock. If
Microsoft's stock price falls, the preferred would be
redeemed at no less than $79.875 a share.)
Many investors consider the financial impact of the options
by focusing on earnings per share on a fully diluted basis, a
calculation that assumes that options outstanding
[[Page S3206]]
at prices below the current market have been exercised. Tom
Stern at Chieftain Capital, a New York money manager, goes
one step further. He estimates how much the stock ought to
rise, if his earnings estimates are right, and figures out
how many more options will be exercised. ``We pay close
attention to options,'' he says. ``If you don't, your
earnings get diluted.''
Will the required footnote disclosure in companies' annual
reports have a big impact? ``That's not chopped liver,'' says
Jack Ciesielski, author of the Analyst's Accounting Observer
newsletter. ``I don't think investors have any idea how big
the options programs are.''
To calculate the cost, many companies will use option-
pricing models in wide use on Wall Street that combine the
time span of the options with the volatility of each
company's stock price. Options in a hightech company tend to
be worth more since chances are better the stock will surge.
A few companies have already bit the bullet. Bristol-Myers
Squibb Co., the New York pharmaceuticals concern, revealed
last year that its options plan would have trimmed 1995 net
by a mere $35 million, cutting seven cents a share from per
share earnings of $3.58, had options been treated as an
expense.
The impact of options can be suprisingly big, however, even
if the company hasn't been that generous. At Foster Wheeler
Corp., the Clinton, N.J., builder of refineries and power
plants, the impact was heightened by a restructuring charge
that reduced reported earnings at the same time as its stock
took off. The result was that a 1995 grant of only 1.35% of
shares outstanding would have slashed the year's earnings by
14%, or $4.1 million.
Tobias Lefkovich, a Smith Barney analyst who follows Foster
Wheeler, says nobody noticed. ``Investors are more focused on
consistent earnings growth and new orders'' than the option
cost, he explains. Nonetheless, Charles Tse, an outside
director at Foster Wheeler who serves on the compensation
committee, says, ``the whole compensation plan is being
reviewed.'' A company spokesman said later that the review
wasn't prompted by the stock-option disclosure.
____
[From the Washington Post]
Disney Chief May Reap $771 Million From Stock Options
(By Paul Farhi)
By any measure, Michael Eisner the chief executive of the
Walt Disney Co., has been one of America's most successful
corporate executives. And by any measure, he has been
handsomely compensated for it.
Eisner, in fact, could be poised to become one of the most
richly rewarded employees in the history of American
business. Thanks to a new 10-year pay package that includes
generous stock options, the top executive of the
entertainment conglomerate could reap nearly $771 million
over the next decade, according to estimates by the
compensation expert who designed Eisner's new contract. The
figure doesn't include Eisner's $750,000-per-year salary or
bonuses that could add another $15 million annually.
While Disney argues that Eisner has proved he's worth it,
the huge package has raised anew a debate over executive
compensation. A group of 22 institutional pension funds that
hold Disney stock plans to protest Eisner's contract at
Disney's annual meeting in Anaheim, Calif., next week.
They intend to withhold their votes for the five
management-backed nominees to Disney's board--including
former Senate majority leader George Mitchell and Roy E.
Disney, Walt's nephew--and to vote against a resolution that
sets the formula for Eisner's annual bonus.
The group, which includes the big public-employee pension
funds of California, Louisiana and Wisconsin, also is
displeased with the severance package awarded Michael Ovitz,
the Hollywood talent agent who served as Disney's president
for 14 months. Ovitz, who resigned in December, has received
$38.9 million in cash from Disney and options on 3 million
shares that have a current paper value of $54 million.
The Washington-based Council of Institutional Investors,
which organized the pension fund protest, acknowledges the
action is largely symbolic--it is not voting for alternative
board candidates. The group's members control about 11.5
million Disney shares--a tiny fraction of the 675 million
Disney shares in the public's hands; it's not clear whether
the action has wide support among other shareholders.
``We're merely trying to send a message,'' said Alyssa
Machold, deputy director of the council. ``We don't want to
start burning Mickey Mouse in effigy. But by not voting,
we're calling into question the actions of Disney's board,''
which approved the Eisner and Ovitz packages.
The organization says Disney's 16-member board includes 10
directors whose financial ties to the company could
compromise their independence. Mitchell's Washington law
firm, for example, provides legal services to Disney.
Even before his new pay package was disclosed in January,
Eisner was often at the center of the executive-pay
controversy. In 1992, he made headlines when he exercised
options on shares then worth about $202 million.
According to Disney's records, the 54-year-old executive
has reaped $240 million in profits by exercising options and
selling stock in his past 12 years as chief executive. As of
September, he held stock that would bring an additional $304
million of profit if sold.
His new contract awards him 8 million options. (An option
gives its owner the right to buy stock in a company at a
particular point in time at a predetermined price; it has
value if it permits the buyer to buy stock at a price below
the existing market price.)
Assessing the future value of an option is an inexact
science because it requires guessing the future price of a
stock. Officially, Disney estimates the value of Eisner's new
options at $195.4 million over their 10-year life.
Raymond Watson, the Disney board member who directed
negotiations on the contract with Eisner, says that is a
conservative figure, based on the low end of assumptions
about Disney's future performance.
Graef ``Bud'' Crystal, an executive-pay expert whom
Disney's board consulted to formulate the contract, said the
value of the Eisner deal likely will be much higher. Assuming
an 11 percent annual return--Disney's average stock
performance for the past 10 years--Crystal calculated Eisner
could realize $770.9 million from exercising the options from
2003 to 2006.
Asked about that figure, Watson said, ``I don't dispute it.
We looked at it that way and 30 other ways besides.''
But Watson said Eisner's compensation will be worth it if
he can help Disney keep up its historical growth. He noted
that options only have value if the company's stock keeps
appreciating. Indeed, companies award executive options in
order to motivate them to keep share value rising.
Under Eisner, Disney has been one of Wall Street's stellar
performers. Its revenue has grown from $1.5 billion in 1984
to $18.7 billion in 1996. And its stock has soared during
that period--from $3 per share to $75.37\1/2\ as of Friday,
after adjusting for splits.
Even Crystal, a frequently quoted critic of huge executive
pay packages, grudgingly says Disney's board had to offer
Eisner his huge new deal. ``The package he got is awesome,''
he said. ``But if Sony had tried to lure him away, they would
have offered him Tokyo and thrown in Kyoto as a bonus.''
______
By Mr. GLENN (for himself and Mr. Lieberman):
S. 577. A bill to increase the efficiency and effectiveness of the
Federal Government, and for other purposes; to the Committee on
Governmental Affairs.
the government restructuring and reform act of 1997
Mr. GLENN. Mr. President, I rise today to introduce the Government
Restructuring and Reform Act of 1997, legislation whose objective is to
reorganize the executive branch into a form and a structure that is
capable of meeting the challenges of the 21st century. The bill is
cosponsored by my distinguished colleague from Connecticut, Senator
Lieberman.
We are in an era of contraction at the Federal level. Some of this
contraction is needed in my opinion, in some areas I don't think it's a
good idea. But it is a fact. Many programs are being cut, others have
been eliminated or consolidated into block grants to the States.
Agencies and departments are being downsized and in some cases
eliminated. In the last Congress, the Bureau of Mines, Office of
Technology Assessment, Interstate Commerce Commission, and Advisory
Commission on Intergovernmental Relations were all terminated. In
addition, agency rules and paperwork are being pruned. And Federal
employment has been cut by over 250,000 positions in the last 4 years
and continues to fall.
These are big and historic changes, spurred on by our efforts to
reach a balanced budget and the desire of the American people for a
more cost-effective Government.
However, despite the overall downsizing effort, the basic structure
of the Federal Government remains unchanged. In fact, the basic
structure of the Federal Government has changed little in the last 25
years, despite structural changes in the private sector, the economy,
and our society over that same time period. The Federal Government has
been the last to follow suit--and that's as it should be in a
democracy--but that does not mean it should be immune from change
forever. We cannot keep the status quo in the existing executive branch
structure while continuing to downsize, cut budgets and programs and
reduce personnel levels and also expect these same Federal agencies to
perform effectively and maintain adequate levels of service. We'll end
up with what I call the hollowing out of Government. We'll have the
same agencies and departments in place doing most of the same
activities as they do now. But with less money and less people on hand,
these activities will be carried out less effectively. We'll have a
less costly Federal
[[Page S3207]]
Government, but not a more cost-effective one. That is, unless we
address reorganization and consolidation of Federal agencies and
functions in a comprehensive, well-thought-out way.
Reorganization issues are very difficult, perhaps among the most
difficult issues we face in Government. It raises questions that don't
have simple, right and wrong answers. Should we have greater
centralization of Government functions in less, but larger Cabinet
departments? This is the traditional, centralized model of how
Government bureaucracy is organized. Or should we decentralize and
spread Government functions across many smaller agencies and
departments? Such an approach fits what many call the entrepreneurial
model of Government organization.
Well, I can think of pros and cons to both approaches. To add to this
difficulty, reorganization necessarily involves questions of turf and
jurisdiction. Turf battles in this town are as hotly contested as any
policy issue. I know this through experience. Several years ago I
proposed consolidating the Government's trade and technology functions
into one Cabinet department and I faced very stiff opposition.
Likewise, turf is just as jealously guarded at the other end of
Pennsylvania Avenue. Ask the President's National Performance Review.
They proposed integrating the Agency for International Development into
the State Department in addition to consolidating the Federal law
enforcement agencies only to be faced down by the bureaucracy. So I
don't think comprehensive reorganization can be tackled successfully by
either the Congress or the executive branch.
That's why I'm in favor of establishing a Government commission to
examine executive branch organization. My bill establishes a nine-
member, bipartisan Commission to make recommendations to the President
and the Congress in 2 years on consolidating, eliminating, and
restructuring Federal departments and agencies in order to eliminate
unnecessary activities, reduce duplication across programs, and improve
management and efficiency. This Commission would be not just any old
Commission, producing some big thick study that would wind up largely
unread in some recycling bin, or on the dusty shelf of academia. Rather
the Commission's recommendations would be submitted to the Congress and
have to be considered on a what I call a flexible fast-track basis.
They could not perish in committee, as so often occurs with commission
reports and recommendations.
There is precedent for such a commission. In fact, the few successful
Government reorganization efforts that have taken place have come about
because of the work of a commission. Let me give you some background.
The Hoover Commission is probably the most famous Government
restructuring commission from recent times. It was formed in 1947 and
chaired by former President Hoover. The 12-member commission operated
until 1949 and issued 19 reports to the President recommending various
changes in the structure of the Federal Government. From these
recommendations, President Truman submitted eight reorganization plans
to Congress in 1949, of which six became effective. The following year
he submitted 27 reorganization plans, 20 of which became effective.
Included among these plans were the creation of the General Services
Administration, the expansion of the Executive Office of the President,
and the creation of a centralized Office of Personnel.
A second Hoover Commission was formed in 1953 and made 314 specific
recommendations over the following 2 years, 202 of which were
implemented. However, generally this Commission was not considered as
successful as the first Hoover Commission, as it engaged itself in more
controversial matters of policy rather than solely focus on management
and organization as the first commission had done.
Our next restructuring effort of note was put forward by President
Nixon's Ash Council, which was in operation from 1969 to 1971. Headed
by Roy Ash, chairman of Litton Industries, the Council supplied the
President with nine memoranda detailing with specific reorganization
and consolidation proposals. The Council recommended the formation of
OMB, the EPA, and NOAA from the consolidation of existing programs.
These proposals were all implemented. The Council also recommended the
creation of several super-Departments, including a Department of
Natural Resources, but these proposals ultimately did not pass the
Congress.
The next notable Commission came during the Reagan years, the Grace
Commission, which was established by Executive order in 1982 and was in
operation through 1984. The panel was composed of 161 corporate
executives and it issued a massive 47 volume report with nearly 2,500
recommendations. Many of its recommendations were policy-based rather
than organizational in nature, hence they generated controversy and
polarized debate in the Congress. Still, many of the recommendations
were implemented, primarily through executive branch action. And the
Commission did call for stronger financial management in the Federal
bureaucracy. That's something we have built on in the Committee on
Governmental Affairs through enactment of the Chief Financial Officers
Act.
More recently, the Committee on Governmental Affairs passed
legislation to establish a bipartisan reorganization commission as part
of our efforts to make the VA a Cabinet department. That Commission
became law, Unfortunately, in order to pass it, we had to place a
mechanism to trigger the activation of the Commission through a
Presidential certification that the Commission was in the national
interest. Unfortunately, that certification was not made, Had it been,
perhaps we would have in place today the blueprint for the Government
of the 21st century.
Then in the 103d Congress, we reported out a Glenn-Roth-Lieberman
Commission bill by a 12 to 1 vote. But we did not move it to the floor
because the President's National Performance Review was just getting
underway and we wanted to see what it might come up with before
establishing the commission.
Finally, last year the committee reported out a version of a
government reorganization commission; however, it was tied to
legislation dismantling the Commerce Department and thus died. Late in
the session, Senator Stevens developed a substitute retaining the
commission but dropping the dismantling provisions, We came close to an
agreement and my hope this Congress is that we will reach one.
For a more detailed history of government restructuring commissions I
would refer my colleagues to an excellent report prepared by CRS titled
``Reorganizing the Executive Branch in the Twentieth Century: Landmark
Commissions.''
I believe that a commission would complement nicely the efforts of
the NPR. The Federal work force has been reduced by over 250,000
positions, Federal paperwork and redtape has been simplified,
procurement reform has been enacted, and unnecessary field offices at
the Department of Agriculture has been closed. These accomplishments
are due in significant part to the work and the efforts of the NPR.
However, the NPR has generally not focused on government restricting.
In the instances where it has made proposals--I noted two examples
earlier in my statement--they have been rebuffed by the bureaucracy,
the Congress or both.
Recent congressional efforts have fallen short also, as several of my
colleagues learned in advocating the dismantling of four Cabinet
departments--HUD, DOE, Commerce, and Education. Those efforts were
heavy-handed in my view and would have created more problems then they
would have solved.
In closing, I believe an examination of the experience of the private
sector in restructuring and downsizing is instructive in
differentiating between the right and wrong ways to downsize. A 1993
survey of over 500 U.S. companies by the Wyatt Co. revealed that only
60 percent of the companies actually were able to reduce costs in their
restrucuting efforts. Both the Wyatt Survey and a similar one conducted
by the American Management Association concluded that successful
restructuring efforts must be planned carefully with a clear vision of
their goals and objectives, and that proper attention be given to
maintaining employee morale
[[Page S3208]]
and productivity. Otherwise, the costs of reorganization may outweigh
its benefits.
There is a right and a wrong way to reorganize and downsize. I
believe that the Commission approach is the right way. I hope my
colleagues will support this legislation.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Summary of the Government Restructuring and Reform Act of 1997
mission
To consolidate, eliminate and reorganize Federal government
departments, agencies and programs to improve efficiency and
effectiveness, streamline operations and eliminate
unnecessary duplication. To strengthen management capacity.
To propose criteria for government-sponsored corporations. To
define new/reorganized agency missions and responsibilities.
membership
Nine Members (No more than five from any one party). Three
Members (including Chair) appointed by the President
(Chairman is selected in consultation with the respective
Republican and Democratic leaders of the House and Senate).
Six Members appointed by the Congress (1 each for each party
leader, then 1 by Speaker in concurrence with Sen. Majority
Leader and 1 by Sen. Minority Leader in concurrence with
House Minority Leader). Appointments made within 90 days of
enactment. Six Members must be in agreement for the
Commission to approve any recommendation.
reports
President may submit his own recommendations (7/1/98) for
the Commission to consider. Commission issues a preliminary
(due 12/1/98) and final report (8/1/99) to the President,
Congress, and the public. Public hearings must be held and
the Commission is subject to FACA. President has 30 days to
suggest changes to final report. The final report is
forwarded to Congress by 10/1/99.
legislation
``Flexible'' fast-track process is in place. Commission
final report is introduced as one single bill and Committees
have 30 legislative days to act or bill is discharged. Bill
is then placed on the Senate calender and after 5th
legislative day it is in order to proceed to consideration of
the bill. Bill can be filibustered or amended (must be
relevant). Fast track procedures apply for the House as well.
House-Senate conferees then have 20 days to report.
funds/tenure
$5 M per yr. Sunsets by 10/1/99.
By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Hatch, Mr. Grassley,
Mr. Abraham, Mr. Reid, Mr. Inouye, Mr. Baucus, Mr. Craig, Mr.
Kempthorne, and Mr. Thomas):
S. 578. A bill to permit an individual to be treated by a health care
practitioner with any method of medical treatment such individual
requests, and for other purposes; to the Committee on Labor and Human
Resources.
the access to medical treatment act
Mr. DASCHLE. Mr. President, today I am introducing the Access to
Medical Treatment Act. I am pleased to be joined by Senators Harkin,
Hatch, Grassley, Reid, Abraham, Inouye, Baucus, Craig, Kempthorne, and
Thomas in this effort to allow greater freedom of choice in the realm
of medical treatments.
I was introduced to the alternative medical treatment debate the same
way many Americans are: through personal experience. Actually, in my
case it was the experience of a personal friend: Berkley Bedell.
Berkley Bedell, as many of you know, is a former Congressman from
Iowa's 6th District. He is also--since his battle with Lyme disease
several years ago--a tireless advocate for improving access to
alternative treatments.
As some may remember, Congressman Bedell was ill with Lyme disease
when he left the House at the end of the 100th Congress. Having tried
several unsuccessful rounds of conventional treatment consisting of
heavy doses of antibiotics over approximately 4 years, he turned to an
alternative treatment that he believes cured his disease.
This treatment consisted on its most basic level of nothing more than
drinking processed whey from a cow's milk. After about 2 months of
taking regular doses of this processed whey, his symptoms disappeared.
Despite Congressman Bedell's amazing recovery, and the fact that this
same treatment appeared to be effective in treating other cases of Lyme
disease, the treatment can no longer be administered because it has not
gone through the FDA approval process.
Congressman Bedell's story--and others I have heard since--have
convinced me of two things: first, that our health care system actually
discourages the development and use of alternative medical treatments;
and second, that this myopic outlook does not serve the best interest
of the American people.
As I looked into the potential of alternative therapies, I was struck
by what appears to be a deep-seated skepticism of alternative
treatments within the medical establishment that may be impeding their
use. It is clear to me that the public would benefit by greater debate
about the value of alternative medical treatments, and it is to
stimulate that debate and ultimately remove barriers to potentially
effective treatments that I have reintroduced the Access to Medical
Treatment Act.
This legislation would allow individual patients and their physicians
to use certain alternative and complementary therapies not approved by
the FDA. A companion measure has been introduced in the House by
Representative DeFazio and 43 of his colleagues.
Mr. President, it has been my experience that efforts to expand
access to alternative treatments often produce strong emotional
reactions--on both sides of the issue. Sometimes, those reactions are
so strong they detract from the merits of the debate.
Therefore, let me clarify the intent of the Access to Medical
Treatment Act.
This bill is intended to promote greater access to alternative
therapies under the supervision of licensed health practitioners and
under carefully circumscribed guidelines. Hopefully, it will stimulate
a constructive discussion of how best to achieve this objective.
I appreciate the natural inclination to be wary of uncharted waters,
and I am not suggesting that caution be thrown to the wind in the case
of alternative therapies. Some have expressed concern that this bill
could have the unintended effect of opening the door to unscrupulous
entrepreneurs who seek to make profit on the despair of the sick. I
don't minimize that concern. How to guard against such an unintended
consequence is an issue we will want to examine closely and address.
What I am suggesting, however, is that this concern should not blind
us to the benefit and potential of alternative medicine. It is not a
reason to shrink from the challenge of expanding access to alternative
therapies.
Alternative therapies constitute a legitimate field of endeavor that
is an accepted part of medicine taught in at least 22 of the Nation's
125 medical schools, including such prestigious institutions as
Harvard, Yale, Columbia, Johns Hopkins, Georgetown, Albert Einstein,
Mount Sinai, UCLA, and the University of Maryland.
At the National Institutes of Health's Office of Alternative
Medicine, scientists are working to expand our knowledge of alternative
therapies and their safe and effective use.
And the State medical licensing boards now have a committee
discussing alternative medicine. I encourage that panel to explore how
safe access to alternative medicine might be increased.
Additionally, more and more Americans are turning to alternative
therapies in those frustrating instances in which conventional
treatments seem to be ineffective in combating illness and disease. In
1990 alone, the New England Journal of Medicine found that Americans
spent nearly $14 billion on alternative therapies, and made more visits
to alternative practitioners than they did to primary care doctors.
American consumers are turning to these therapies because they are
perceived to be a less expensive and more prevention-based alternative
to conventional treatments.
Given the popularity of alternative therapies among the American
public, it will be asked why this legislation is necessary. If a
particular alternative treatment is effective and desired by patients,
then why can't it simply go through the standard FDA approval process?
The answer is that the time and expense currently required to gain
FDA approval of a treatment makes it very
[[Page S3209]]
difficult for all but large pharmaceutical companies to undertake such
an arduous and costly endeavor. The heavy demands and requirements of
the FDA approval process, and the time and expense involved in meeting
them, serve to limit access to the potentially innovative contributions
of individual practitioners, scientists, smaller companies, and others
who do not have the financial resources to traverse the painstakingly
detailed path to certification.
Thus, the current system has the unfortunate effect of both
discouraging the exploration of life-saving treatments and preventing
low-cost treatments from gaining access to the market. The Access to
Medical Treatment Act attempts to open the door to promising treatments
that may not have huge financial backing.
I want to be absolutely clear, however, that this legislation will
not dismantle the FDA, undermine its authority or appreciably change
current medical practices. It is not meant to attack the FDA or its
approval process. It is meant to complement it.
The FDA should--and would under this legislation--remain solely
responsible for protecting the health of the Nation from unsafe and
impure drugs. The heavy demands and requirements placed upon treatments
before they gain FDA approval are important, and I firmly believe that
treatments receiving the Federal Government's stamp of approval should
be proven safe and effective.
The real question posed by this legislation is whether it is in the
public interest to simply forgo the potential benefits of alternative
treatments because of economies of scale, or whether, working with the
FDA, it makes sense to explore ways to bring such treatments to the
marketplace.
Mr. President, the Access to Medical Treatment Act proposes one way
to extend freedom of choice to medical consumers under carefully
controlled situations. It suggests that individuals--especially those
who face life-threatening afflictions for which conventional treatments
have proven ineffective--should have the option of trying an
alternative treatment, so long as they have been fully informed of the
nature of the treatment, potential side effects and any other
information necessary to fully meet FDA informed consent requirements.
This is a choice that is rightly left to the consumer, and not dictated
by the Federal Government.
The bill requires that a treatment be administered by a properly
licensed health care practitioner who has personally examined the
patient. It requires the practitioner to comply fully with FDA informed
consent requirements. And it strictly regulates the circumstances under
which claims regarding the efficacy of a treatment can be made.
No advertising claims can be made about the efficacy of a treatment
by a manufacturer, distributor, or other seller of the treatment.
Claims may be made by the practitioner administering the treatment, but
only so long as he or she has not received any financial benefit from
the manufacturer, distributor, or other seller of the treatment. No
statement made by a practitioner about his or her administration of a
treatment may be used by a manufacturer, distributor, or other seller
to advance the sale of such treatment.
What this means is that there can be no marketing of any treatment
administered under this bill. As such, there should be little incentive
for anyone to try to use this bill as a bypass to the process of
obtaining FDA approval. Also, because only properly licensed
practitioners are able to make any claims at all about the efficacy of
a treatment, there should be little room for so-called quack medicine.
In short, if an individual or a company wants to earn a profit off
their product, they would be wise to go through the standard FDA
approval process rather than utilizing this legislation.
In essence, this legislation addresses the fundamental balance
between two seemingly irreconcilable interests: the protection of
patients from dangerous treatments and those who would advocate unsafe
and ineffective medicine--and the preservation of the consumer's
freedom to choose alternative therapies.
The complexity of this policy challenge should not discourage us from
seeking to solve it. I am convinced that the public good will be served
by a serious attempt to reconcile these contradictory interests, and I
am hopeful the discussion generated by introduction of this legislation
will help point the way to its resolution. I welcome anyone who would
like to join me in promoting this important debate to cosponsor this
legislation. I also welcome alternative suggestions for accomplishing
this objective.
As I mentioned previously, I am sympathetic to the concern about the
need to protect patients against unscrupulous practitioners.
Individuals are often at their most vulnerable when they are in
desperate need of medical treatment. That is why it is absolutely
critical that a proposal of this nature include strong protections to
ensure that patients are not subject to charlatans who would prey on
their misfortunate and fears for personal gain. The Access to Medical
Treatment Act contains such protections.
Mr. President, this legislation represents an honest attempt to focus
serious attention on the value of alternative treatments and overcome
current obstacles to their safe development and utilization. If there
is a better way to make alternative therapies available to people
safely, let's find that way. But let's continue this discussion and get
the job done.
I ask unanimous consent that the text of the Access to Medical
Treatment Act be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 578
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Access to Medical Treatment
Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Advertising claims.--The term ``advertising claims''
means any representations made or suggested by statement,
word, design, device, sound, or any combination thereof with
respect to a medical treatment.
(2) Danger.--The term ``danger'' means any negative
reaction that--
(A) causes serious harm;
(B) occurred as a result of a method of medical treatment;
(C) would not otherwise have occurred; and
(D) is more serious than reactions experienced with
routinely used medical treatments for the same medical
condition or conditions.
(3) Device.--The term ``device'' has the same meaning given
such term in section 201(h) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(h)).
(4) Drug.--The term ``drug'' has the same meaning given
such term in section 201(g)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(g)(1)).
(5) Food.--The term ``food''--
(A) has the same meaning given such term in section 201(f)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(f)); and
(B) includes a dietary supplement as defined in section
201(ff) of such Act.
(6) Health care practitioner.--The term ``health care
practitioner'' means a physician or another person who is
legally authorized to provide health professional services in
the State in which the services are provided.
(7) Label.--The term ``label'' has the same meaning given
such term in section 201(k) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(k)).
(8) Labeling.--The term ``labeling'' has the same meaning
given such term in section 201(m) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321(m)).
(9) Legal representative.--The term ``legal
representative'' means a parent or an individual who
qualifies as a legal guardian under State law.
(10) Medical treatment.--The term ``medical treatment''
means any food, drug, device, or procedure that is used and
intended as a cure, mitigation, treatment, or prevention of
disease.
(11) Seller.--The term ``seller'' means a person, company,
or organization that receives payment related to a medical
treatment of a patient of a health practitioner, except that
this term does not apply to a health care practitioner who
receives payment from an individual or representative of such
individual for the administration of a medical treatment to
such individual.
SEC. 3. ACCESS TO MEDICAL TREATMENT.
(a) In General.--Notwithstanding any other provision of
law, and except as provided in subsection (b), an individual
shall have the right to be treated by a health care
practitioner with any medical treatment (including a medical
treatment that is not approved, certified, or licensed by the
Secretary of Health and Human Services) that such individual
desires or the legal representative of such individual
authorizes if--
(1) such practitioner has personally examined such
individual and agrees to treat such individual; and
[[Page S3210]]
(2) the administration of such treatment does not violate
licensing laws.
(b) Medical Treatment Requirements.--A health care
practitioner may provide any medical treatment to an
individual described in subsection (a) if--
(1) there is no reasonable basis to conclude that the
medical treatment itself, when used as directed, poses an
unreasonable and significant risk of danger to such
individual;
(2) in the case of an individual whose treatment is the
administration of a food, drug, or device that has to be
approved, certified, or licensed by the Secretary of Health
and Human Services, but has not been approved, certified, or
licensed by the Secretary of Health and Human Services--
(A) such individual has been informed in writing that such
food, drug, or device has not yet been approved, certified,
or licensed by the Secretary of Health and Human Services for
use as a medical treatment of the medical condition of such
individual; and
(B) prior to the administration of such treatment, the
practitioner has provided the patient a written statement
that states the following:
``WARNING: This food, drug, or device has not been declared
to be safe and effective by the Federal Government and any
individual who uses such food, drug, or device, does so at
his or her own risk.'';
(3) such individual has been informed in writing of the
nature of the medical treatment, including--
(A) the contents and methods of such treatment;
(B) the anticipated benefits of such treatment;
(C) any reasonably foreseeable side effects that may result
from such treatment;
(D) the results of past applications of such treatment by
the health care practitioner and others; and
(E) any other information necessary to fully meet the
requirements for informed consent of human subjects
prescribed by regulations issued by the Food and Drug
Administration;
(4) except as provided in subsection (c), there have been
no advertising claims made with respect to the efficacy of
the medical treatment by the practitioner;
(5) the label or labeling of a food, drug, or device that
is a medical treatment is not false or misleading; and
(6) such individual--
(A) has been provided a written statement that such
individual has been fully informed with respect to the
information described in paragraphs (1) through (4);
(B) desires such treatment; and
(C) signs such statement.
(c) Claim Exceptions.--
(1) Reporting by a practitioner.--Subsection (b)(4) shall
not apply to an accurate and truthful reporting by a health
care practitioner of the results of the practitioner's
administration of a medical treatment in recognized journals,
at seminars, conventions, or similar meetings, or to others,
so long as the reporting practitioner has no direct or
indirect financial interest in the reporting of the material
and has received no financial benefits of any kind from the
manufacturer, distributor, or other seller for such
reporting. Such reporting may not be used by a manufacturer,
distributor, or other seller to advance the sale of such
treatment.
(2) Statements by a practitioner to a patient.--Subsection
(b)(4) shall not apply to any statement made in person by a
health care practitioner to an individual patient or an
individual prospective patient.
(3) Dietary supplements statements.--Subsection (b)(4)
shall not apply to statements or claims permitted under
sections 403B and 403(r)(6) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 343-2 and 343(r)(6)).
SEC. 4. REPORTING OF A DANGEROUS MEDICAL TREATMENT.
(a) Health Care Practitioner.--If a health care
practitioner, after administering a medical treatment,
discovers that the treatment itself was a danger to the
individual receiving such treatment, the practitioner shall
immediately report to the Secretary of Health and Human
Services the nature of such treatment, the results of such
treatment, the complete protocol of such treatment, and the
source from which such treatment or any part thereof was
obtained.
(b) Secretary.--Upon confirmation that a medical treatment
has proven dangerous to an individual, the Secretary of
Health and Human Services shall properly disseminate
information with respect to the danger of the medical
treatment.
SEC. 5. REPORTING OF A BENEFICIAL MEDICAL TREATMENT.
If a health care practitioner, after administering a
medical treatment that is not a conventional medical
treatment for a life-threatening medical condition or
conditions, discovers that such medical treatment has
positive effects on such condition or conditions that are
significantly greater than the positive effects that are
expected from a conventional medical treatment for the same
condition or conditions, the practitioner shall immediately
make a reporting, which is accurate and truthful, to the
Office of Alternative Medicine of--
(1) the nature of such medical treatment (which is not a
conventional medical treatment);
(2) the results of such treatment; and
(3) the protocol of such treatment.
SEC. 6. TRANSPORTATION AND PRODUCTION OF FOOD, DRUGS,
DEVICES, AND OTHER EQUIPMENT.
Notwithstanding any other provision of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 201 et seq.), a person
may--
(1) introduce or deliver into interstate commerce a food,
drug, device, or any other equipment; and
(2) produce a food, drug, device, or any other equipment,
solely for use in accordance with this Act if there have been
no advertising claims by the manufacturer, distributor, or
seller.
SEC. 7. VIOLATION OF THE CONTROLLED SUBSTANCES ACT.
A health care practitioner, manufacturer, distributor, or
other seller may not violate any provision of the Controlled
Substances Act (21 U.S.C. 801 et seq.) in the provision of
medical treatment in accordance with this Act.
SEC. 8. PENALTY.
A health care practitioner who knowingly violates any
provisions under this Act shall not be covered by the
protections under this Act and shall be subject to all other
applicable laws and regulations.
______
By Mr. ASHCROFT:
S. 579. A bill to amend the Internal Revenue Code of 1986 to allow a
deduction for the old-age, survivors, and disability insurance taxes
paid by employees and self-employed individuals, and for other
purposes; to the Committee on Finance.
the working americans wage restoration act
Mr. ASHCROFT. Mr. President, it has been said that America is a city
on a hill, a special example for the rest of the world to observe--a
place of hope, a place of opportunity--what America is and ought to be.
But it might be said that if we are a city, we are in need of urban
renewal. We need to restart our engine, to regenerate the potential for
growth, for the development of opportunity in this culture.
Economic growth has been the idea, it has been the mechanism whereby
America could find a special place of opportunity, where America could
be that particular country that said:
Give me your tired, your poor, your huddled masses,
yearning to breathe free, the wretched refuse of your teeming
shore. Send these, the homeless tempest tossed, to me.
With what the writer of that great poem inscribed on the Statue of
Liberty, America could proudly proclaim, ``I lift my lamp beside the
golden door.''
America has been a place of opportunity because it has been a place
of growth, with an understanding that we could always grow our way
through problems. Growth has been that marvelous key toward providing
some new hope for individuals. Individuals from anywhere and everywhere
at all times in our history have provided a part of the stream of a
growing America, a set of opportunities that is the envy of the world.
Yet what is happening and has happened to our growth? What has happened
to our culture? Working families are being stressed. They get up early.
They work hard. They sacrifice time with each other and with their
children, and they seem to have less and less to show for it. They are
squeezed not just financially but as families.
What is the reason? Why is that we as a culture find ourselves
laboring under this weight rather than soaring with the opportunity
characteristic of our heritage?
I think we have a tax load that is weighing down individuals in this
culture, and it is a major one. It is simple. It is not hard to
understand. The most recent issue of Baron's magazine, which is a
magazine that monitors business activity and government and families
and opportunity, spells out the tremendous tax load--heavier at this
moment in history than at any other time in the history of America. It
is interesting to note that we were able to spend our way out of the
Great Depression with lower tax rates than we now have. We were able to
make the world safe for democracy or to work toward making it in the
First World War. We were able to defeat the onerous and terrible power
of Nazi Germany in the Second World War with lower tax rates than we
have now.
Big government is taking so much of the working wages of Americans
that Americans no longer have the resources to spend on themselves that
they need.
The family budget in 1955, for example, was 27.7 percent in total
taxes. Now the total taxes of the average American family is well over
38 percent. And you are well aware of the fact that we spend more on
taxes than
[[Page S3211]]
we do on food, clothing, and shelter combined. We need to take a look
at what we are spending and how we are deploying it, to see what has
happened to what we thought were our wage increases. We have had a lot
of wage increases, but we end up with less and less. It turns out that
the wage increase for America has been stolen by the Government. If we
had the kind of income that we have now and we were paying 27.7 in
total taxes like we were in 1955, we would have had real wage
increases.
Mr. President, today is April 15. It is tax day. Yet most Americans
do not realize that we are forced to pay a double tax. We pay income
tax on the Social Security taxes that are deducted from our check, on
those taxes which are pulled out before we ever see our check. We pay
income taxes on that tax. That is particularly unfortunate. We are
double taxed. Money that we never see, money that goes to Government,
we pay a second tax to Government on that money. It does not make
sense.
Interestingly enough, this is not a tax that hits American businesses
the same way. As you will recall, half of the Social Security tax is
paid by citizens; half is paid by corporations or the employers. The
citizen who pays the tax pays a double tax--not only pays the Social
Security tax but then has an income tax on that same money that is
required to be taken out of his remaining funds. The business that pays
Social Security taxes gets to deduct from its other taxes what it has
paid in Social Security taxes, or gets to deduct from its taxable
income what it has paid in Social Security taxes.
So the business community gets fair treatment of a single tax while
the working individual has a double tax situation there, and it is time
to end that kind of arbitrary, unreasonable, unequal, discriminatory
approach to the worker and to provide parity with the reasonable
expectation that is demanded from the employer and the corporation. If
this is deductible to the employers and to corporations and to
businesses, the payment of those taxes should also be deductible to
individuals in our culture.
The ordinary citizen, the worker, cannot though, and it is time that
we lift the American worker at least to tax parity and to tax equality,
a position that they should share with the corporate community and the
business community.
For those who are fond of saying that every tax break is a tax break
for the rich, it is time to think again. This is not a proposal that is
designed to help people who make millions and millions of dollars.
Social Security taxes are only levied on the first $65,000 of income.
If we provide a deduction for those Social Security taxes which are
paid, the person who makes $65,000 in income does not have any smaller
deduction or any smaller benefit than the person who makes $650,000 in
income or the person who makes $65 million in income. The tax benefit
is the same once you reach the $65,000 level.
So this is a tax benefit that is not focused on the rich. It is not
any more valuable to the very rich than it is to the middle class. The
truth is this is the middle-class tax cut that is fair. It provides for
people who work, that they will not be double taxed on their work.
Social Security taxes are the only tax in America levied on work.
Income taxes are levied on earned income or unearned income, but Social
Security taxes are levied on work. How ironic that in America we would
have a double tax on work. We ought to be standing for a proposition,
instead of double taxing work, at least give it equality with other
income that would not be double taxed. We would give Americans an
opportunity to retain some of that for which they had worked so they
could spend it themselves.
There would be a significant improvement in the setting for the
average two-income family in America. The average two-earner family
pays about $1,227 more in income taxes because they cannot deduct from
their income tax the taxes they have already paid to Social Security.
If we allow them to deduct those, that means that $1,227 that is paid
in income taxes would be available for individuals to have to meet
their family needs. This is not just a way of saying that people will
be able to spend the money. It is saying that people will be able to
spend this money on themselves rather than have Government spend this
money on more Government programs. I think most Americans understand
that they would be better off deciding what they need most and how best
to meet those needs than expecting Government to spend the money for
them.
The thrust of the matter is that this $1,227 per year for the average
two-income family would be a welcome relief from a tax load which is
higher than it has ever been before in the history of this country.
I had the privilege of being Governor in my State for two terms
before I came here, and I know what jobs mean and how important jobs
are. What is interesting to note is that if we were to implement this
tax measure of relief for the American people, the scholars estimate it
would mean 900,000 new jobs in this country. Nine hundred thousand new
jobs would provide a real spurt of growth for this Nation and would
help us reacquire the sense of dynamic that America has had
historically and that our heritage contains. Nine hundred thousand new
jobs would be an average of about 18,000 jobs per State. I know that
18,000 jobs is equivalent to at least 3 car plants, new car plants, in
a State. That would mean growth. That would mean opportunity. It would
build for the future of this great country. I think we need to remind
ourselves on a consistent basis when we tax people it is not a question
of whether or not the money will be spent; it is a question of whether
Government will spend the money or people will spend the money. I
believe people can decide best.
The passage of this act would affect the take-home pay of 77 million
Americans who would have more resources to devote to meet the needs of
their families, and it would be a measure of providing equity and
fairness so that they would not be double taxed and neither would they
be taxed unequally and in a discriminatory way as compared to the taxes
which are levied on the corporate community.
Mr. President, so often we say that bigger Government is required
because some think that families will not do what they ought to do. I
believe we have come to a juncture where Government has made it
impossible for families to do what they need to do. Families want to
share. They want to be involved in their communities. They want to be
involved in reaching out to other people. When Government takes such a
big portion of your income, when you have to work 3 hours every day to
pay your taxes and you struggle through the rest of your day to meet
your own needs, it does not leave much opportunity for sharing.
The purpose of Government is related to growth. It is related to the
growth of people, not the growth of Government. If we are to perpetuate
a system where the only thing that can grow is Government, we have made
a mistake. We would have destroyed the genius of America and repudiated
our rich history of being able to grow our way through any challenge.
It is time for us, the United States of America, the city on the Hill,
again to be a city of hope and opportunity. It is time for us to
provide a basis upon which the American worker and the American economy
can grow. We can do that by ceasing the practice of double taxing work.
We must stop double taxing working Americans.
The bill, which I now send to the desk, is cosponsored by Senators
Craig, Shelby, Cochran, Hagel, and Hatch. It would end the double
taxation that American workers pay on Social Security taxes, because
income taxes are levied on those amounts which are deducted as payroll
taxes, known as Social Security taxes.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 579
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Working Americans Wage
Restoration Act''.
SEC. 2. DEDUCTION FOR OLD-AGE, SURVIVORS, AND DISABILITY
INSURANCE TAXES OF EMPLOYEES AND SELF-EMPLOYED
INDIVIDUALS.
(a) Taxes of Employees.--
[[Page S3212]]
(1) Deduction allowed in arriving at adjusted gross
income.--Section 62(a) of the Internal Revenue Code of 1986
(defining adjusted gross income) is amended by inserting
after paragraph (16) the following new paragraph:
``(17) Employees' oasdi taxes.--The deduction allowed by
section 164(g).''
(2) Determination of deduction.--Section 164 of such Code
(relating to deduction for taxes) is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) Employees' OASDI Taxes.--
``(1) In general.--In the case of an individual, in
addition to the taxes described in subsection (a), there
shall be allowed as a deduction for the taxable year an
amount equal to the sum of--
``(A) the taxes imposed by section 3101(a) for the taxable
year, and
``(B) the taxes imposed by section 3201(a) for the taxable
year but only to the extent attributable to the percentage in
effect under section 3101(a).
``(2) Special rule for certain agreements.--For purposes of
paragraph (1), taxes imposed by section 3101(a) shall include
amounts equivalent to such taxes imposed with respect to
remuneration covered by--
``(A) an agreement under section 218 of the Social Security
Act, or
``(B) an agreement under section 3121(l) (relating to
agreements entered into by American employers with respect to
foreign affiliates).
``(3) Coordination with special refund of social security
taxes.--Taxes shall not be taken into account under paragraph
(1) to the extent the taxpayer is entitled to a special
refund of such taxes under section 6413(c).
``(4) Coordination with earned income credit.--No deduction
shall be allowed under paragraph (1) for any taxable year if
the individual elects to claim the earned income credit under
section 32 for the taxable year.''
(3) Conforming amendment.--The next to last sentence of
section 275(a) of such Code is amended by inserting ``or
164(g)'' after ``164(f)''.
(b) Deduction for Self-Employed Individuals.--
(1) In general.--Paragraph (1) of section 164(f) of the
Internal Revenue Code of 1986 (relating to deduction for one-
half of self-employment taxes) is amended to read as follows:
``(1) In general.--In the case of an individual, in
addition to the taxes described in subsection (a), there
shall be allowed as a deduction for the taxable year an
amount equal to the sum of--
``(A) the taxes imposed by section 1401(a) for such taxable
year, plus
``(B) 50 percent of the taxes imposed by section 1401(b)
for such taxable year.
In the case of an individual who elects to claim the earned
income credit under section 32 for the taxable year, only 50
percent of the taxes described in subparagraph (A) shall be
taken into account.''
(2) Conforming amendments.--
(A) Section 32(a)(1) of such Code is amended by inserting
``who elects the application of this section'' after
``eligible individual''.
(B) The heading for section 164(f) of such Code is amended
by striking ``One-Half'' and inserting ``Portion''.
(C) Section 1402(a)(12) of such Code is amended--
(i) by striking ``one-half'' the first place it appears and
inserting ``portion'', and
(ii) by striking subparagraph (B) and inserting:
``(B) a percentage equal to the sum for such year of the
rate of tax under section 1401(a) and one-half of the rate of
tax under section 1401(b);''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1997.
______
By Mr. SMITH of New Hampshire (for himself, Mr. Faircloth, Mr.
Gramm, Mr. Hatch and Mr. Kyl):
S. 580. A bill to amend the Internal Revenue Code of 1986 to allow
individuals to designate that up to 10 percent of their income tax
liability be used to reduce the national debt, and to require spending
reductions equal to the amounts so designated; to the Committee on
Finance.
The Taxpayer Debt Buy-Down Act of 1997
Mr. SMITH, Mr. President, today I am introducing legislation to
create an active role for ``We the People'' in the fiscal matters of
the Federal Government.
I am joined by my colleagues, Senators Faircloth, Gramm, Hatch, and
Kyl, who are original cosponsors of this measure.
why we need the taxpayer debt buy-down: the president and congress have
not stepped up to the plate
On February 6, President Clinton submitted his fifth unbalanced
budget.
Then, on March 4, the Senate failed by one vote to approve the
balanced budget constitutional amendment (BBCA).
During the debate on the balanced budget constitutional amendment,
the president and his congressional allies decried the constitutional
change as too permanent, and argued that Congress could impose fiscal
self-discipline.
In response to these claims, today I am reintroducing the Taxpayer
Debt Buy-Down Act. This legislation not only answers appeals for
statutory restrictions, but also takes the balanced budget debate to
the people.
If the President and Congress cannot agree, the American people
should decide.
I first introduced the bill in 1992, and it was endorsed by President
George Bush.
More than one-third of the Senate voted for my plan which I offered
as an amendment to the tax bill of 1992.
I feel the time has come again to empower the taxpayers to tell
Congress how much spending they want cut in order to balance the budget
and buy down the debt.
For example; in 1996, individual income tax revenue totaled over $650
billion.
So if every taxpayer checked off the maximum designation of 10-
percent, Congress would have to come up with roughly $65 billion in
spending cuts.
Admittedly, this level of participation is highly unlikely initially.
A more reasonable estimate would be that the total taxpayer check-off
would amount to about 3-percent of all individual tax revenue in the
first few years.
Under this scenario, Congress would only have to find less than $20
billion in spending reductions.
Considering the danger posed by our growing national debt, who could
oppose $20 billion in spending cuts.
The American people will be able to tell us if we are on the right
track, or if they want more deficit and debt reduction.
I challenge my colleagues to support their claims that they support a
balanced budget. Ask the taxpayers.
the process would be simple
First, by checking off a box on their April 1040 tax forms, taxpayers
would designate up to 10 percent of their income tax liability, what
they owe, for the purpose of deficit and debt reduction. Once the
deficit is eliminated, designated cuts would buy down the debt.
Second, the following October, the Treasury Department would
calculate the amount demanded by the taxpayers. Congress would then
have until the end of the next fiscal year to cut Federal spending in
any area to meet this target.
Third, if Congress failed to make the necessary cuts, an automatic
across-the-board sequester of all Government accounts, with some
necessary exemptions, would be triggered at the end of the session.
This sequester would ensure compliance with the taxpayer-mandated
spending reductions. However, I would hope this would not occur if
Congress listens to the mandate of the taxpayers.
Fourth, furthermore, to harmonize this grassroots effort with
congressional efforts to balance the budget, the check-off will
initially mandate spending cuts and debt retirement only over and above
the savings that Congress otherwise enacts. For example, if Congress
passes legislation that implements savings of $50 billion in fiscal
year 1999, and the check-off for that year totals $60 billion, only an
additional $10 billion would be cut under this bill.
______
By Mr. DURBIN (for himself, Mr. Leahy, Mrs. Feinstein and Mr.
Torricelli):
S. 581. A bill to amend section 49 of title 28, United States Code,
to limit the periods of service that a judge or justice may serve on
the division of the United States Court of Appeals for the District of
Columbia to appoint independent counsels, and for other purposes; to
the Committee on the Judiciary.
INDEPENDENT COUNSEL LEGISLATION
Mr. DURBIN. Mr. President, I rise today to introduce, with Senators
Leahy, Feinstein and Torricelli, legislation dealing with the three-
judge panel that appoints independent counsels.
In the last few days, we have heard a flurry of speeches about the
appointment of an independent counsel and about the grasp that the
Attorney General has on her job. Recently some Members of Congress have
suggested that we should open an investigation on the Attorney General
because of her
[[Page S3213]]
decision not to seek the appointment of an independent counsel.
This is a new high in the efforts to politicize the independent
counsel statute and a new low in bullying tactics.
And, Mr. President, these tactics have worked insofar as their goal
was to politicize this issue. Many Americans now view this statute as
just another political football. Here in Congress, we toss about calls
for an independent counsel. We threaten to minutely examine every act
of the Attorney General in her efforts to carry out her duties under
the statute.
Meanwhile, one of the most important institutions to the operation of
the independent counsel statute goes unexamined. The three-judge panel
that appoints and oversees the independent counsels wields enormous
power. And it has tainted itself through close connections to partisan
politics and through the appointment of special counsels who are
likewise partisans.
This panel seems to operate free of any genuine scrutiny. It plays
one of the most important roles in the administration of the statute.
And it is the most in need of some oversight.
The last time an independent counsel was appointed, we all saw just
how embroiled that three-judge panel is in partisan politics. The head
of that panel, the Republican-appointed David Sentelle, had lunch with
two Republican Senators just a few weeks before he appointed an
independent counsel who was a Republican Justice Department official
and who had just recently publicly contemplated running for the Senate
as a Republican. As a result of this incident, five former presidents
of the American Bar Association issued a letter rebuking Judge Sentelle
for his actions.
A recent article in the Legal Times noted:
In fact, with the appointment of independent counsel[s]
handled by a highly secretive three-judge panel, named by the
chief judge of the United States, it could be argued that one
partisan system has simply been supplanted by another.
Let me explain what the panel currently does and how that contributes
to the failings of the statute.
The first flaw in the statute is in the appointment terms of the
judges who sit on this special panel. Currently, three judges are
appointed to the panel by the Chief Justice of the United States. The
judges are appointed to the division for 2-year terms.
But David Sentelle is now serving his third 2-year term. Judge John
D. Butzner, Jr., is in the middle of his fourth 2-year term. And Judge
Peter T. Fay is in the midst of his second 2-year term.
In short, some judges are becoming entrenched in the independent
counsel process.
A second flaw in the judges' panel is in its consistent failure to
issue any rules of procedure and practice. In 1994, when we
reauthorized the act, Congress called on the panel to promulgate rules
of procedure for practice before it, clarify available avenues of
appellate review, and undertake to catalog and preserve independent
counsel reports and make public versions accessible upon request.
They have not done so. Only recently, the panel issued some draft
rules of procedure dealing with attorney fee applications, but in 3
years they do seem to have not otherwise complied with Congress's
request.
This special division is like a magician's hat: independent counsels
emerge from it. But we do not know how. Are there any criteria used by
the panel to appoint an independent counsel? Does the panel make any
effort to assure that the person it appoints is actually independent?
How does someone get this job--a job with a virtually unlimited budget
and a stunning array of powers?
We do not know because the Court will not tell us, even though we
asked them to 3 years ago.
We need to do a few things about this panel. The legislation I
introduce today is intended to remove any taint of partisan politics
from this panel. It requires that judges on the panel serve no more
than two, 2-year terms. This will ensure that no one judge gets
entrenched in appointing independent counsels. And it assures that the
division does not get politicized. In addition, it is consistent with
current law. Why have 2-year terms if the judges just stay on as long
as they want? The 2-year term was clearly inserted with the view that
judges would not stay on the division forever.
In addition to limiting judges on the panel to 4 years, the measure I
introduce requires that the division promulgate the very rules that we
asked them to issue 3 years ago.
The special division should not be a mysterious black box. People who
practice before it should know the rules. Attorney fee applications are
the most common things the Division has to deal with, but this
provision also requires that the Special Division have rules governing
the appointment of an independent counsel. We should know what criteria
and what procedure they use to assure that the independent counsel is
indeed independent and qualified.
Mr. President, I hope we can all agree that this measure is vitally
needed. It is simply aimed at improving the operation of the
independent counsel statute not tearing it down. It's goal is to take
some partisan politics out of the system and to put a little more
independence back into the statute.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 581
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. LIMITATION ON PERIODS OF SERVICE THAT A JUDGE MAY
SERVE ON THE DIVISION TO APPOINT INDEPENDENT
COUNSELS.
(a) Limitation on Service.--
(1) In general.--Section 49 of title 28, United States
Code, is amended by adding at the end the following:
``(g)(1) Notwithstanding subsections (a) through (f) and
subject to paragraphs (2) and (3) of this subsection, no
judge or justice may serve more than 2 two-year periods
assigned to the division to appoint independent counsels
under this section.
``(2) For purposes of paragraph (1), service in filling a
vacancy on the division of--
``(A) less than 1 year shall not apply; and
``(B) 1 year or more shall be considered service for the
full two-year period.
``(3) A judge of the United States Court of Appeals for the
District of Columbia who has served 2 two-year periods on the
division may be assigned to serve an additional two-year
period, if--
``(A) every other judge of such Court otherwise eligible
for such assignment has served 2 two-year periods in such
assignment; and
``(B) the period of time since such judge last served in
such assignment is not less than the period of time any other
judge of such Court (who is otherwise eligible to serve) last
served in such assignment.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on the date of enactment of this Act and
shall apply to any judge or justice serving on such date on
the division to appoint independent counsels of the United
States Court of Appeals for the District of Columbia.
(b) Administration of Division by the Circuit Judicial
Council.--
(1) In general.--Section 332 of title 28, United States
Code (including subsection (d) of such section relating to
making all necessary and appropriate orders for the effective
and expeditious administration of justice), shall apply with
respect to the administration of the division of the United
States Court of Appeals for the District of Columbia to
appoint independent counsels by the Circuit Judicial Council
for the District of Columbia.
(2) Rules.--No later than 6 months after the date of
enactment of this Act, the Circuit Judicial Council for the
District of Columbia shall promulgate rules to--
(A) govern practice and procedures before the division to
appoint independent counsels;
(B) govern the procedure for the appointment of an
independent counsel by the division;
(C) clarify procedures for judicial appellate review of
actions of the division; and
(D) catalog and preserve independent counsel reports and
make public versions available upon request.
Mr. LEAHY. Mr. President, the whole purpose of the independent
counsel law--to get politics out of the process of investigating
politically potent matters--has been severely undercut recently by
partisan efforts to bully the Attorney General into appointing an
independent counsel to investigate fundraising activities in the 1996
Presidential campaign. In fact, some Republicans in Congress have
threatened that if Janet Reno refuses to do what they want, she will be
investigated and her job will be at stake.
This marks a new low in the politicization of the independent counsel
process. These threats demean our system of justice and, I fear,
undermines public confidence in all branches of government.
[[Page S3214]]
Continued politicization of the independent counsel process will be
the death knell for this law. The American people already have
legitimate questions about how much independent counsels cost, how long
they take, and how this law is working. By last count, independent
counsels have cost taxpayers a total of over $125 million. Whitewater
counsel Ken Starr alone has already spent over $22 million. We still
have an independent counsel investigating matters from the Reagan
administration.
Suspicions about the role of partisan politics in the selection of
so-called independent counsels are already strong. A Reagan-appointed
Chief Justice, who served in the Nixon administration, appointed a
staunchly Republican judge to the selection panel that, after meeting
in secret, appointed partisan Republican Kenneth Starr to investigate
Whitewater.
If the results of independent counsel investigations cannot be
trusted because they are tainted by partisan politics, we will not be
able to justify the costs of this law.
That is why I am commending Senator Durbin for his work on this bill.
It takes important steps to begin restoring public confidence in the
process by which independent counsels are selected. Specifically, the
bill sets term limits for the three judges who serve on the Special
Division of the D.C. Circuit division that appoints the independent
counsel. Under current law, these judges serve for 2-year terms.
However, all of them are on at least their second 2-year term. The
legislation would prohibit a judge, including the current panel, from
serving more than 2-year terms.
In addition, the bill would allow sunshine on the selection of
independent counsels and the results of independent counsel
investigations. What criteria does the Special Division use to select
independent counsels? Do they look for trial experience, prosecutorial
experience or political experience? The bill places the Special
Division that selects independent counsels under the authority of the
Circuit Judicial Council and requires that the Council promulgate
within 6 months rules of practice for the Division. These rules would
specify the procedure for selection of an independent counsel. This is
important so everyone will know what qualifications the Special
Division uses to evaluate candidates. Public procedures should also
open up the process so that appropriate candidates know how to apply
for independent counsel positions when openings occur. This is too
important a process to be decided by political cronies over lunch.
The bill would also require that the Court catalog and preserve
independent counsel reports and make public versions available upon
request.
This bill is not a cure-all for the problems we have seen with the
independent counsel law. But this is a good start.
Mr. President, the whole purpose of the independent counsel law--to
get politics out of the process of investigating politically potent
matters--has been severely undercut recently by partisan efforts to
bully the Attorney General into appointing an independent counsel to
investigate fundraising activities in the 1996 Presidential campaign.
In statement after statement by otherwise responsible Members of
Congress, they tell her how she should use here discretion and how she
should make up her mind, before she even has an opportunity to do so.
Some Republicans in Congress have threatened that if Janet Reno refuses
to do what they want, she will be investigated and her job will be at
stake.
Basically, the American people were asked last night to make this
choice: Would they let the Speaker of the House, Mr. Gingrich,
determine what the ethics rules should be, or would they rather allow
the Attorney General of the United States, Janet Reno to follow the law
and investigate whether crimes have occurred?
Frankly, I am very confident in allowing Attorney General Reno to
proceed. She has done a pretty darn good job so far. She calls them as
she sees them and has been a very straightforward Attorney General.
I hope that everybody, whether in this body or the other body, will
stop trying to substitute their ethical standards and political
judgment as to what should be done and allow the Attorney General, who
sticks to a very strong ethical standard, to follow and enforce the
law. I believe the statements seeking to intimidate the Attorney
General mark a new low in the politicization of the independent counsel
process.
______
By Mr. GREGG:
S. 583. A bill to change the date on which individual Federal income
tax returns must be filed to the Nation's Tax Freedom Day, the day on
which the country's citizens no longer work to pay taxes, and for other
purposes; to the Committee on Finance.
TAX FILING ON TAX FREEDOM DAY ACT OF 1997
Mr. GREGG. Mr. President, this past weekend we had a weekend of
firsts. Tiger Woods became the youngest PGA player to ever win the
Masters and in doing so broke the all-time scoring record of 270 and
established the largest margin of victory--12 shots--in the
tournament's 61-year history.
On April 14, 1997, the Tax Foundation announced another first, Tax
Freedom Day this year will be on May 9.
What is Tax Freedom Day? Tax Freedom Day is the day when the average
American stops working for the Government and starts working for
themselves. This year's record date for Tax Freedom Day of May 9 is 2
days after last year's record of May 7 and up significantly since the
Clinton administration took office in 1993.
This year the average American will have to work a total of 128 days
to pay his or her tax bill. That equates to 2 hours 49 minutes of each
working day laboring to pay taxes. That's hard time any way you slice
it.
Over the years, April 15 has metamorphosized from being a trip to the
dentist's office to being a major root canal without the novocaine.
I rise today to introduce legislation that will change the date on
which individuals file their Federal income tax returns from April 15
to May 9, Tax Freedom Day.
While this legislation does little to bring about a change in the
amount of money paid by the average American wage earner, I believe
that issue would be helped greatly with the enactment of a balanced
budget with tax relief. It does ensure that your taxes won't be due
until you free yourself from crushing Federal taxes.
I ask unanimous consent that a copy of the bill be placed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 583
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled.
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Filing On Tax Freedom
Day Act of 1997''.
SEC. 2. TAX FILING ON TAX FREEDOM DAY.
(a) In General.--Each year, in time to be included in the
instruction and information booklets that accompany the
year's individual income tax returns, the Secretary of the
Treasury (in this Act referred to as the ``Secretary'') shall
determine the year's Tax Freedom Day pursuant to subsection
(d).
(b) Due Date for Taxes.--Notwithstanding any other
provision of law, Federal individual income tax returns for
each year shall be due on the date of the Tax Freedom Day in
the subsequent year (rather than April 15th).
(c) Information Provided.--The Secretary shall include in
the instruction and information booklets a prominent section
that provides the following information with respect to the
Tax Freedom Day:
(1) An explanation of Tax Freedom Day and what it
signifies.
(2) A statement that Congress provided for Federal
individual income tax returns to be due on Tax Freedom Day to
emphasize how long the average citizen works to pay
government taxes.
(3) During leap years, a note that the year's Tax Freedom
Day appears one calendar day earlier than normal.
(4) A chart showing how the Tax Freedom Day's date has
changed over time.
(5) Information on the State and Federal components of the
total tax burden, and how the Tax Freedom Day would differ on
a State-by-State basis.
(d) Determination of Tax Freedom Day.--Each year, the
Secretary shall determine the Tax Freedom Day as follows:
(1) Tax foundation.--By contacting and receiving the date
from the Tax Foundation (which has been determining and
publishing a Tax Freedom Day since 1973), in time to meet the
informational requirements of subsection (c), as long as the
Tax Foundation maintains its--
(A) status as a non-profit, non-partisan research and
public education organization;
(B) consistent method of analysis with respect to
determining Tax Freedom Day (unless a change results in a
demonstrably much more accurate determination); and
[[Page S3215]]
(C) trademark on Tax Freedom Day.
(2) Requirements not met.--If the Tax Foundation--
(A) fails to maintain any of the requirements described in
paragraph (1), or
(B) does not provide such information to the Secretary in a
timely manner after the Secretary's request for the
information,
then the Secretary shall determine the year's Tax Freedom Day
in accordance with paragraph (3).
(3) Determination by the secretary.--If either subparagraph
(A) or (B) of paragraph (2) are met, then the Secretary shall
determine the year's Tax Freedom Day--
(A) by assuming that income is earned evenly throughout the
year and that individuals initially devote all of their
earnings to paying incomes taxes;
(B) by calculating an effective tax rate for the nation, by
dividing the per capita income tax burden (including Federal,
State and local taxes) by per capita income (using the net
national product, a component of the national income product
accounts, as compiled annually by the Bureau of Economic
Analysis of the Department of Commerce);
(C) by multiplying the effective tax rate determined in
subparagraph (B) by the number of days in the year; and
(D) by ensuring that a consistent methodology is utilized
from year-to-year, and altering the existing methodology only
if the new methodology is demonstrably much more accurate.
The resultant total shall signify the number of days the
average citizen devotes to paying taxes, and the
corresponding calendar day shall be the Tax Freedom Day.
SEC. 3. EFFECTIVE DATE AND SECRETARIAL SUBMISSION.
(a) Effective Date.--This Act shall take effect for taxable
years beginning after December 31, 1997.
(b) Secretarial Submission.--Not later than 90 days after
the date of the enactment of this Act, the Secretary shall
submit to the appropriate committees of the Congress a
legislative proposal providing for such technical and
conforming amendments in the law as are required by the
provisions of this Act.
______
By Mr. ABRAHAM:
S. 584. A bill to amend the Internal Revenue Code of 1986 to change
the time for filing income tax returns from April 15 to the first
Tuesday in November, and for other purposes; to the Committee on
Finance.
the TAXATION ACCOUNTABILITY ACT
Mr. ABRAHAM. Mr. President, we made several reforms during the last
Congress intended to put Members of this body in closer touch with the
American people. Among those reforms were provisions applying to
Members of Congress the same laws that apply to private businesses and
citizens.
Today I am introducing legislation that I believe will further
strengthen the ties between Members and their constituents. In
particular, Mr. President, I am concerned that, where, according to a
USA Today poll from this March, 70 percent of the American people
believe that they need a tax cut, many in Congress still refuse to give
it to them.
I am convinced, Mr. President, that some Members continue to oppose
any limits on Federal tax funds because they are out of touch with the
American people. That is why I am introducing the Taxation
Accountability Act to tie the act of voting more closely with the act
of taxpaying.
Too many Members believe that the American people are not, and do not
believe themselves to be, over-taxed. This is wrong, Mr. President, and
we must put an end to this mistaken and dangerous belief. How? By
making it possible for Americans to more effectively act on their
convictions regarding proper levels of taxation. By moving tax day, now
April 15, to coincide with election day.
To begin with, Mr. President, most Americans are not even fully aware
of the percentage of their income the government takes from them in the
form of taxes. According to the National Taxpayer's Union, the average
American family now pays almost 40 percent of its income in State,
local, and Federal taxes. That is an all-time high.
Yet, with almost 40 percent of their income going to taxes, mothers
and fathers in America still are not going to the polls. Despite the
huge investment they are making, voluntarily or involuntarily, in
government in this country, this last Presidential election showed the
lowest turnout in our history. Americans are not exercising their right
to decide who shall represent them in deciding how that government
shall be run--what it shall do and at what expense.
Why are Americans so apathetic in the face of such staggering tax
rates, Mr. President? Simple, most Americans simply do not know how
high their taxes really are.
Two years ago a Readers Digest poll asked Americans, ``What is the
highest percentage of income that is fair for a family of four making
$200,000 to pay in all taxes?'' The median response, regardless of
whether the respondent was rich or poor, black or white, was 25
percent.
This estimate among Americans, that 25 percent is the limit of fair
taxation, is borne out by a grassroots research poll conducted last
March. That poll found that a majority of Americans would favor a
constitutional amendment to prohibit Federal, State, and local taxes
from taking ``a combined total of more than 25 percent of anyone's
income in taxes.''
Yet the Tax Foundation tells us that a dual-income family today pays
an average of 38.4 percent of its income in taxes to State, local, and
Federal governments.
Why is it, Mr. President, that Americans, are not aware of so vital a
figure as the percentage of their income that is taken away by the
government in taxes?
One reason is the significant extent to which the taxes they pay are
hidden. Taxes on businesses eventually are paid by families. So are
sales taxes. Taxes on the average loaf of bread equal 31 percent of the
total cost. Taxes also represent 43 percent of the cost of a hotel
room, 54 percent of the cost of a gallon of gas and 40 percent of the
cost of an airline ticket.
Another, and perhaps the most significant way taxes are hidden is
withholding. Many taxpayers do not realize how much the government is
taking from them because it takes their money before they ever see it.
Only when they fill out their tax forms do most Americans have a chance
to see the full enormity of the tax burden they bear. And then they
have 7 months to cool off before election day rolls around.
Combined, these factors keep Americans from realizing the extent of
their tax burden, and acting on that realization. Information is
crucial to effective voting. And just as crucial, in my view, is
information that is timely. Only if people know the extent of their tax
burden, and are made aware of it at a time when they can do something
about it, will they act. Only if Americans are aware of what is at
stake on election day will they vote on election day. And only if they
vote, expressing their opinions on crucial issues like taxation, can
they hold Members of Congress responsible for their actions.
Mr. President, we are not likely to do away with withholding or
repeal Federal taxes on bread and butter. But we can highlight the
importance of voting by tieing the process of tax-filing more closely
to the process of voting.
To achieve this, Mr. President, I am proposing legislation that would
move tax day, the day tax forms must be mailed to the Internal Revenue
Service, to the first Tuesday after the first Monday in November--
election day. In this way our citizens will have fresh in their minds
the substantive importance of voting at the same time they are to
exercise their right to vote. Voter participation will increase as
effective information increases, and thus so will the accountability of
elected officials, as was intended by our Founders.
There will be no cost to the Treasury because this bill moves the
fiscal year into accord with the calendar year at the same time that it
moves tax day. But there will be a significant impact on our form of
government. Members of Congress will be put in closer touch with the
people, to the vast improvement of democracy.
I urge my colleagues to support this legislation as we attempt to
foster responsible voter conduct and responsible government.
______
By Mr. DORGAN (for himself, Mr. Daschle, Mr. Johnson, and Mr.
Wellstone):
S. 585. A bill to amend the Internal Revenue Code of 1986 to
authorize the Secretary of the Treasury to abate the accrual of
interest on income tax underpayments by taxpayers located in
Presidentially declared disaster areas if the Secretary extends the
time for filing returns and payment of tax for such returns; to the
Committee on Finance.
income tax relief legislation
Mr. DORGAN. Mr. President, today I'm joined by Senators Daschle,
[[Page S3216]]
Wellstone, and Johnson in introducing legislation to provide much-
needed income tax relief for North and South Dakotans and others
pummeled by the severe blizzards and flooding this spring in the Upper
Midwest. This legislation builds upon the good work started by the
Internal Revenue Service [IRS] last week.
About a week ago, the Internal Revenue Service announced that
taxpayers living in counties recently declared a disaster area by the
President will be able to delay filing their Federal income tax returns
until May 30, 1997, without facing a late filing or payment penalty.
Clearly this is significant relief for those who may be prevented from
filing their tax returns by the April 15, 1997 due date because of the
recent blizzard and flooding in our part of the country.
In its announcement, however, the IRS stated that it did not have the
authority to waive any interest charges accruing on delayed payments
made between April 15, 1997 and May 30, 1997. It makes no sense to
impose interest charges for payments occurring after the original due
date, when the IRS itself says--and I think properly so--that it will
extend the time for filing income tax returns and payments by taxpayers
located in a Presidentially-declared disaster area. In my opinion, the
IRS's action properly suggests that income tax return filing and
payments made before the new date should not be treated as late. It is
just that simple, and our legislation reflects this point.
Specifically, our legislation requires the IRS to abate the
assessment of interest on underpayment by taxpayers in Presidentially-
declared disaster areas if the IRS acts to extend the period of time
for filing income tax returns and paying income tax by taxpayers in
such areas. The legislation would apply to all Presidentially-declared
disasters announced after December 31, 1996.
Once again, the IRS wisely and promptly granted an extension for
North Dakotans and others to file their income tax returns due to
flood-and snow-related emergencies without facing late filing and
payment penalties. But the IRS has been prevented from doing more by
statute. Our legislation remedies this problem in the case of IRS
extensions due to Presidential disaster declarations.
We intend to advance this proposal at the first available opportunity
in the U.S. Senate. We urge our colleagues to support this important
initiative to provide income tax relief for those affected by this
year's weather-related disasters and for those living in disaster areas
in the future.
Mr. DASCHLE. Mr. President, I would like to commend Senator Dorgan on
the introduction of legislation authorizing the Internal Revenue
Service to waive interest on late payments of taxes in Presidentially-
declared disaster areas. The IRS currently has authority to waive
penalties for late tax filings following natural disasters. Last week,
it did so in the Dakotas and part of Minnesota in response to the
severe flooding in the region. However, the IRS does not now have
parallel authority for waiving interest in these circumstances.
A number of South Dakotans have raised questions about the disparate
treatment of penalties and interest. If taxpayers deserve more time to
file and pay their taxes due to a natural disaster, why should they be
charged 9 percent interest, a rate many would consider punitive, on
these same taxes? Senator Dorgan's bill would address this apparent
anomaly in our tax laws and help numerous flood victims who are too
busy securing their homes, businesses, and communities to file on time.
Some of these people have been physically prevented from obtaining tax
forms by the rising flood waters.
For this reason, I am pleased to cosponsor Senator Dorgan's
legislation, and I thank him for his leadership on this pressing
matter.
______
By Mr. MOYNIHAN (for himself, Mr. Lautenberg, Mr. Lieberman, Mr.
Chafee, Mr. Smith of New Hampshire, Mrs. Boxer, Mr. Wyden, Mr.
Byrd, Mr. Kennedy, Mr. Inouye, Mr. Roth, Mr. Biden, Mr. Leahy,
Mr. Sarbanes, Mr. Dodd, Mr. D'Amato, Mr. Specter, Mr. Kerry,
Mr. Rockefeller, Ms. Mikulski, Mr. Jeffords, Mr. Akaka, Mrs.
Feinstein, Mr. Gregg, Ms. Moseley-Braun, Mrs. Murray, Ms.
Snowe, Mr. Santorum, Mr. Durbin, Mr. Torricelli, Mr. Reed, and
Ms. Collins):
S. 586. A bill to reauthorize the Intermodal Surface Transportation
Efficiency Act of 1991, and for other purposes; to the Committee on
Environment and Public Works.
the istea reauthorization act of 1997
Mr. MOYNIHAN. I rise with Senators Lautenberg and Lieberman and a
distinguished group of my colleagues today to introduce the ISTEA
Reauthorization Act of 1997. This bill is designed to reauthorize, with
some modifications and improvements, the Intermodal Surface
Transportation Efficiency Act of 1991. ISTEA is an innovative law that
addresses the fundamental imbalance in national transportation
investment, and in so doing, serves to promote intermodalism, improve
mobility and access to jobs, protect the environment, empower local
communities, and enhance transportation safety.
ISTEA spurred the Federal Government and the States to invest their
transportation dollars in whatever modes were most efficient for moving
people and goods and to solicit the input of local communities in
planning those investments. The result was a dramatic increase in
investment in maintenance and rehabilitation of existing roads and
bridges, in mass transit, and in creative approaches to our
transportation needs, from bicycle and pedestrian paths to ferry boats.
When I introduced the original ISTEA legislation in 1991, I had only
four Senate cosponsors--Quentin Burdick of North Dakota, Steve Symms of
Idaho, John Chafee of Rhode Island, and Frank Lautenberg of New Jersey.
The bill I introduce today has broad bipartisan and grassroots support,
with 31 Senate cosponsors from across the country joining me. We have
learned a lot over the last 6 years.
In 1991, my House counterpart Robert A. Roe of New Jersey, then
chairman of the Public Works Committee, and I had hoped to develop a
Federal highway bill that would mark the end of the era of interstate
highway construction. That era had brought the nationwide, multilane,
limited access highway system, as first envisioned at the General
Motors Futurama exhibit at the 1939 World's Fair, and then advanced in
1944 by President Roosevelt. The New York State Thruway was the
system's first segment. In fact, the civil engineer who built it,
Bertram Tallamy, left Albany in 1956 to start up the national program
in Washington with funding from a dedicated tax proposed by President
Eisenhower and approved by Congress that year.
But by 1991 the interstate system was essentially done and Chairman
Roe and I confronted the question, ``What now?''
We developed three principles for the first highway bill to mark the
post-interstate era. First, the primary objective was to improve
efficiency of the transportation system we already had. Second, the
time had come to turn the initiative in transportation matters back to
the States and cities. Third, transit was to be an option for cities.
I am proud to say we achieved our three principles and more.
The Interstate Highway System left a big mark on American cities,
where the majority of the funds were spent. I wrote in The Reporter in
1960:
It is not true, as is sometimes alleged, that the sponsors
of the interstate program ignored the consequences it would
have in the cities. Nor did they simply acquiesce in them.
They exulted in them . . . This rhapsody startled many of
those who have been concerned with the future of the American
city. To undertake a vast program of urban highway
construction with no thought for other forms of
transportation seemed lunatic.
The results often were. American cities were cruelly split, their
character and geography changed forever, with interstate highways
running through once-thriving working class neighborhoods from Newark
to Detroit to Miami. Homes and jobs were dispersed to the outlying
suburbs and beyond. The wreckage was something to see. Some cities have
used ISTEA funds to try to repair the damage where they could, using
funds for transit--even bike and pedestrian paths--instead of more road
building. Or with plans such as Boston's Central Artery, a project
[[Page S3217]]
that will reunite some of that city's most historic and colorful
neighborhoods, separated for almost 40 years by an elevated highway.
Today, I ask that we continue to build upon our success with ISTEA,
changing it only as needed. The bill we introduce today retains the
basic structure of ISTEA, which distributes funds primarily on needs
balanced with such factors as historical shares, but updates outmoded
formulas and streamlines the equity adjustment programs. The ISTEA
Reauthorization Act of 1997 also increases flexibility for States by
allowing them to use some of their transportation funding to support
Amtrak. This is the first step this year in meeting our commitment to
address Amtrak's long-term funding needs.
The ISTEA Reauthorization Act of 1997 reauthorizes all the program
categories of the original legislation--the National Highway System,
the Interstate Maintenance Program, the Highway Bridge Rehabilitation
and Replacement Program, the Congestion Mitigation and Air Quality
Improvement Program, the Surface Transportation Program, the Interstate
Highway Reimbursement Program, and the Transportation Enhancements
Program--at a total funding level of $26 billion, which can be fully
supported by the Highway Trust Fund.
While the ISTEA Reauthorization Act increases funding for all the
program categories, I want to mention three programs in more detail.
The bill strengthens the Congestion Mitigation and Air Quality
Improvement Program, funding it at $2 billion annually, with a portion
of the authorized amount to be distributed on the basis of population
residing in fine particulate non-attainment areas. The CMAQ program,
which has allowed States and municipalities to find creative solutions
to improving air quality and reducing traffic congestion, has been an
ISTEA success story, resulting in impressive improvement in U.S. air
quality over the last few years.
The bill also increases funding for the Highway Bridge Rehabilitation
and Replacement Program to $3.75 billion per year. The success of the
Bridge Program is dramatic--in four years, there has been a 15 percent
drop in deficient bridges--from 111,200 in 1990 to 94,800 in 1994. I
believe broad consensus exists to strengthen this important program
that has already done so much to preserve our existing bridge
infrastructure.
Finally, the ISTEA Reauthorization Act fully funds the Interstate
Highway Reimbursement Program at $2 billion per year. The Federal-Aid
Highway Act of 1956 provided for the Federal Government to fund the
construction of the Interstate Highway System with a Federal-State
share of 90-10. At that time a number of States had, at their own
expense, already constructed a total of 10,859 miles of highways that
later became part of the Interstate System.
As a result, Congress tasked the Bureau of Public Roads with
determining the cost of reimbursing States for those segments, and the
Bureau arrived at a figure of $5 billion in 1957 dollars. ISTEA used
that figure, adjusted to $30 billion in 1991 dollars, and established a
15-year repayment schedule. The ISTEA Reauthorization Act retains this
program, which is a matter of basic equity and provides urgently needed
funds for those highways that are the oldest and among the most heavily
used portions of the Interstate System.
These programs are essentially, but I do hope that as Congress
considers reauthorization of ISTEA, we can ask the question once again,
``What now?''
Congress must focus on increasing the U.S. investment in
transportation infrastructure. The United States has watched our
European and Asian competitors finance and build innovative
transportation infrastructure that is the envy of the world. As the
budget process gets underway this year, we will need innovative
financing ideas to leverage scarce Federal dollars and address our
chronic multi-billion dollar underinvestment in U.S. roads, bridges,
rails, ports, and transit systems.
We must also search for new technologies and innovations--like
Magnetic-Levitation trains [maglev] and Intelligent Transportation
Systems [ITS]--to solve our congestion and air quality problems without
pouring ever more concrete. The railroad represents an early 19th
century technology, the automobile an early 20th century technology; we
need new modes of transportation for the next century.
Today, maglev trains run in Bremen, but not in New York, where the
maglev concept was first conceived in 1960 by a young Brookhaven
scientist, James Powell, as he sat mired in traffic on the Bronx-
Whitestone Bridge. In truth, today most of the meager Federal
transportation research and development resources are going for
improvements in existing highways, and not into other modes such as
rail and transit, where I suspect we can achieve much greater economic
and environmental returns.
As we determine the course for this bill, I also wish to address the
so-called donor State issue. To distribute Federal transportation funds
primarily upon the ability of each State to collect fuel taxes, as
advocated by representatives of the donor States, would run counter to
whole concept of federalism, which is based on collecting national
resources to address national needs. When California has an earthquake,
or Florida has a hurricane, or the Mississippi River floods its banks,
the entire Nation addresses these needs, without considering whether
the needed funds were raised in the affected States. Every other
Federal program--from crop supports to water reclamation projects to
airport improvement grants--distributes funds on the basis of need.
For example, in response to the Savings & Loan crisis, the Resolution
Trust Corp. was formed to help bail out depositors, but each State did
not contribute according to the amount of dollars lost in that State.
If such an approach had been taken, Texas alone would have faced costs
of over $26 billion, while the cost to New York would have been only $3
billion. Under our Federal system, which allocates national resources
to meet national needs, the taxpayers of New York shouldered a
significant portion of Texas's burden. The cosponsors of the ISTEA
Reauthorization Act, most of them from donor States in the larger
scheme of the balance of Federal payments, reject the idea that
gasoline taxes should be distributed according to where they are
collected.
Furthermore, some of the highway bill proposals put forth this year,
which distribute up to 60 percent of transportation funding on the
basis of where the gas taxes were collected, thwart our national
environmental efforts. These bills reward States with high gas
consumption, and punish States that conserve fuel and invest in mass
transit. Under these proposals, a State that invests in a new bus or
rail line, or in other improvements that reduce traffic congestion and
improve air quality, would receive less transportation money as gas
consumption falls.
As a Nation we have made clean air and reduced dependence on foreign
oil two major priorities--these bills threaten to undo the progress we
have made. In 1944, the United States exported oil. In 1956, we
imported only 11.5 percent of consumption. Today, we import nearly 50
percent of the oil we consume. It could be said that the biggest single
effect of the Interstate Highway System has been in the field of
American foreign policy. We are a nation that absolutely must have
foreign oil, and must shape our defense and foreign policies
accordingly. We must strive to keep that dependency to a minimum. The
sponsors of the ISTEA Reauthorization Act of 1997 are committed to that
goal.
We are also committed to working with other Members, including our
distinguished colleagues on the Transportation and Infrastructure
Subcommittee, Senators Warner and Baucus, who have both put forth their
own proposals for reauthorizing ISTEA. Each coalition's bill reflects,
to a greater or lesser extent, the interests of its own member States
and regions, and I am confident that all will ultimately contribute to
a transportation bill that best serves the Nation.
I ask unanimous consent that the text of the ISTEA Reauthorization
Act of 1997 legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 586
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``ISTEA
Reauthorization Act of 1997''.
[[Page S3218]]
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Authorization of appropriations.
Sec. 4. National Highway System.
Sec. 5. Congestion mitigation and air quality improvement program.
Sec. 6. Surface transportation program.
Sec. 7. Bridge program.
Sec. 8. Minimum allocation.
Sec. 9. Reimbursement program.
Sec. 10. Apportionment adjustments.
Sec. 11. Research programs.
Sec. 12. Scenic byways program.
Sec. 13. Ferry boats and terminals.
Sec. 14. National recreational trails program.
Sec. 15. Transportation and land use initiative.
Sec. 16. Appalachian development highway system.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Intermodal Surface Transportation Efficiency Act of
1991 (Public Law 102-240) (referred to in this section as
``ISTEA'') was the result of a bipartisan and multiregional
consensus to change transportation policy by giving States
and localities more flexibility in spending Federal funds
while still pursuing important national goals;
(2) the Federal Government has an important role to play in
helping to fund transportation improvements and ensuring that
a national focus remains on national goals such as mobility,
connectivity and integrity of the transportation system,
safety, research, air quality, global and national economic
competitiveness, and improved quality of life;
(3) this role as funding partner and policy-maker--
(A) should nurture State and local flexibility in using
funds to solve problems creatively; and
(B) should relieve the States of burdensome regulation and
review procedures that slow down project implementation
without adding value;
(4)(A) the economic health of the United States and of the
metropolitan and rural areas in the United States depends
on--
(i) a strong transit program funded above fiscal year 1997
levels; and
(ii) dedicated support for intercity passenger rail; and
(B) this Act should be accompanied by companion legislation
to provide for the needs described in subparagraph (A);
(5) the funding programs authorized by ISTEA were visionary
and will continue to influence transportation into the
future;
(6) the partnerships between the Federal Government and
State and local governments, and between the public and
private sectors, that were reaffirmed and strengthened by
ISTEA are helping to improve transportation investment and
transportation policy choices; and
(7) it is in the interest of the United States as a whole
to--
(A) reauthorize ISTEA in 1997 with refinements but without
significant changes, and without eliminating current funding
categories;
(B) authorize the maximum feasible level of funding for
ISTEA programs;
(C) allocate these funds among the States based primarily
on need, with adjustments to be considered to reflect--
(i) system usage;
(ii) system extent; and
(iii) historic distribution patterns;
(D) preserve and strengthen the partnerships among the
Federal Government, State governments, local governments, and
the private sector;
(E) minimize prescriptive Federal regulation that is
unnecessary and eliminate regulatory duplication between the
Federal Government and State governments;
(F) increase flexibility to address intermodal projects;
and
(G) provide a separate adequately funded transit program.
SEC. 3. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--For the purpose of carrying out title 23,
United States Code, the following sums are authorized to be
appropriated out of the Highway Trust Fund (other than the
Mass Transit Account):
(1) National highway system.--For the National Highway
System under section 103 of title 23, United States Code,
$5,600,000,000 for each of fiscal years 1998 through 2003.
(2) Interstate maintenance program.--For the Interstate
maintenance program under section 119 of that title
$5,250,000,000 for each of fiscal years 1998 through 2003.
(3) Surface transportation program.--For the surface
transportation program under section 133 of that title
$5,250,000,000 for each of fiscal years 1998 through 2003.
(4) Bridge program.--For the highway bridge replacement and
rehabilitation program under section 144 of that title
$3,750,000,000 for each of fiscal years 1998 through 2003.
(5) Congestion mitigation and air quality improvement
program.--For the congestion mitigation and air quality
improvement program under section 149 of that title
$2,000,000,000 for each of fiscal years 1998 through 2003.
(6) Minimum allocation.--For the minimum allocation program
under section 157 of that title $830,000,000 for each of
fiscal years 1998 through 2003. Such sums shall not be
subject to subsection (a) or (f) of section 104 of title 23,
United States Code.
(7) Apportionment adjustments.--For apportionment
adjustments under section 10 $470,000,000 for each of fiscal
years 1998 through 2003. Such sums shall not be subject to
subsection (a) or (f) of section 104 of title 23, United
States Code.
(8) Interstate reimbursement program.--For reimbursement
for segments of the Interstate System constructed without
Federal assistance under section 160 of that title
$2,050,000,000 for each of fiscal years 1998 through 2003.
(9) Federal lands highways program.--
(A) Indian reservation roads.--For Indian reservation roads
under section 204 of that title $210,000,000 for each of
fiscal years 1998 through 2003.
(B) Public lands highways.--For public lands highways under
section 204 of that title $215,000,000 for each of fiscal
years 1998 through 2003.
(C) Parkways and park roads.--For parkways and park roads
under section 204 of that title $100,000,000 for each of
fiscal years 1998 through 2003.
(10) FHWA highway safety programs.--For carrying out
section 402 of that title by the Federal Highway
Administration $25,000,000 for each of fiscal years 1998
through 2003.
(11) FHWA highway safety research and development.--For
carrying out section 403 of that title by the Federal Highway
Administration $10,000,000 for each of fiscal years 1998
through 2003.
(b) Limitation on Obligations.--Notwithstanding any other
provision of law, any limitation on obligations established
for any of fiscal years 1998 through 2003 for funds
apportioned or allocated from the Highway Trust Fund (other
than the Mass Transit Account) shall apply equally to all
such apportionments and allocations, except that no such
limitation shall apply to any allocation made under section
125 of title 23, United States Code, for emergency relief.
SEC. 4. NATIONAL HIGHWAY SYSTEM.
(a) In General.--Section 104(b) of title 23, United States
Code, is amended by striking paragraph (1) and inserting the
following:
``(1) National highway system.--For the National Highway
System, 1 percent to the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands
and the remaining 99 percent apportioned as follows:
``(A) \1/3\ of the remaining apportionments in the ratio
that--
``(i) the total vehicle miles traveled on public highways
in each State; bears to
``(ii) the total vehicle miles traveled on public highways
in all States;
``(B) \1/3\ of the remaining apportionments in the ratio
that--
``(i) the total lane miles of public highways in each
State; bears to
``(ii) the total lane miles of public highways in all
States; and
``(C) \1/3\ of the remaining apportionments in equal
amounts to each State.''.
(b) Set Aside for 4R Projects.--Section 118(c)(2)(A) of
title 23, United States Code, is amended in the first
sentence--
(1) by striking ``1996, and'' and inserting ``1996,''; and
(2) by inserting after ``1997'' the following: ``, and
$100,000,000 for each of fiscal years 1998 through 2003''.
SEC. 5. CONGESTION MITIGATION AND AIR QUALITY IMPROVEMENT
PROGRAM.
(a) Adjustment for New Nonattainment Areas.--
(1) Report.--Not later than April 1, 2000, the Secretary of
Transportation, in consultation with the Administrator of the
Environmental Protection Agency, shall--
(A) prepare a report containing recommended adjustments to
the formula used to apportion funds for the congestion
mitigation and air quality improvement program under section
149 of title 23, United States Code, and the amount
apportioned for the program, to reflect changes, since the
enactment of the Intermodal Surface Transportation Efficiency
Act of 1991 (Public Law 102-240), in--
(i) national ambient air quality standards under the Clean
Air Act (42 U.S.C. 7401 et seq.); and
(ii) the emission control requirements that result from the
standards; and
(B) submit the report to the Committee on Environment and
Public Works of the Senate and the Committee on
Transportation and Infrastructure of the House of
Representatives.
(2) Adoption of new formula and apportionments.--
(A) Effect of failure to adopt.--Notwithstanding any other
provision of law, if, by September 30, 2000, the
recommendations contained in the report described in
paragraph (1) have not been enacted into law, as proposed in
the report or as amended by Congress, the Secretary of
Transportation shall withhold 10 percent of the
apportionments otherwise required to be made under title 23,
United States Code, on October 1, 2000.
(B) Effect of later adoption.--The Secretary shall
apportion the amount withheld under subparagraph (A) upon the
enactment of a law described in subparagraph (A).
(b) Particulate Matter.--Section 104(b)(2) of title 23,
United States Code, is amended--
(1) by redesignating subparagraphs (A) through (E) as
clauses (i) through (v), respectively, and indenting
appropriately;
(2) by striking ``For the congestion mitigation and air
quality improvement program,
[[Page S3219]]
in the ratio which'' and inserting the following:
``(A) In general.--For the congestion mitigation and air
quality improvement program in accordance with subparagraphs
(B) and (C).
``(B) Weighted nonattainment area population.--The
Secretary shall apportion 90 percent of the remainder of the
sums authorized to be appropriated for expenditure on the
program in the ratio that'';
(3) in subparagraph (B) (as so designated)--
(A) by striking ``such subpart.'' in clause (v) and all
that follows through ``the area was'' and inserting the
following: ``such subpart.
If the area was''; and
(B) in the sentence beginning with ``If the area'', by
striking ``paragraph'' and inserting ``subparagraph'';
(4) by striking the sentence beginning with
``Notwithstanding any provision'' and inserting the
following:
``(C) Particulate matter.--The Secretary shall apportion 10
percent of the remainder of the sums authorized to be
appropriated for expenditure on the program in the ratio
that--
``(i) the population of all areas that are nonattainment
under the Clean Air Act (42 U.S.C. 7401 et seq.) for
particulate matter with an aerodynamic diameter smaller than
or equal to 10 micrometers (known as `PM-10') in each State;
bears to
``(ii) the population of all such areas in all States.'';
(5) in the next-to-last sentence, by striking
``Notwithstanding'' and inserting the following:
``(D) Minimum apportionment.--Notwithstanding''; and
(6) in the last sentence, by striking ``The Secretary'' and
inserting the following:
``(E) Determination of population.--In determining
population for the purpose of this paragraph, the
Secretary''.
(c) Increased Flexibility.--The first sentence of section
149(b) of title 23, United States Code, is amended--
(1) in paragraph (3), by striking ``or'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(5) if the project or program will have air quality
benefits and consists of--
``(A) construction, reconstruction, or rehabilitation of,
or operational improvements for, intercity rail passenger
facilities (including facilities owned by the National
Railroad Passenger Corporation);
``(B) operation of intercity rail passenger trains; or
``(C) acquisition or remanufacture of rolling stock for
intercity rail passenger service;
except that not more than 50 percent of the funds apportioned
to a State for a fiscal year under section 104(b)(2) may be
obligated for operations.''.
SEC. 6. SURFACE TRANSPORTATION PROGRAM.
(a) Apportionment Formula.--Section 104(b) of title 23,
United States Code, is amended by striking paragraph (3) and
inserting the following:
``(3) Surface transportation program.--
``(A) In general.--For the surface transportation program,
in the ratio that--
``(i) the total lane miles of public highways in each State
multiplied by the relative intensity of use of public
highways in the State; bears to
``(ii) the sum of--
``(I) the total lane miles of public highways in each
State; multiplied by
``(II) the relative intensity of use of public highways in
the State.
``(B) Determination of relative intensity of use.--For the
purpose of subparagraph (A), the relative intensity of use of
public highways in a State shall be determined by dividing--
``(i) the vehicle miles traveled on public highways in the
State per lane mile of public highways in the State during
the latest 1-year-period for which data are available; by
``(ii) the vehicle miles traveled on public highways in all
States per lane mile of public highways in all States during
that period.
``(C) Minimum apportionment.--Notwithstanding any other
provision of this paragraph, for each fiscal year, each State
shall receive an apportionment under this paragraph of not
less than \1/2\ of 1 percent of all funds apportioned under
this paragraph for the fiscal year.''.
(b) Increased Flexibility.--Section 133(b) of title 23,
United States Code, is amended by adding at the end the
following:
``(12) Construction, reconstruction, and rehabilitation of,
and operational improvements for, intercity rail passenger
facilities (including facilities owned by the National
Railroad Passenger Corporation), operation of intercity rail
passenger trains, and acquisition or remanufacture of rolling
stock for intercity rail passenger service, except that not
more than 50 percent of the funds apportioned to a State for
a fiscal year under section 104(b)(3) may be obligated for
operations.''.
(c) Allocation of Obligation Authority.--Section 133(f) of
title 23, United States Code, is amended by striking ``6-
fiscal year period 1992 through 1997'' and inserting ``6-
fiscal-year period 1998 through 2003''.
SEC. 7. BRIDGE PROGRAM.
(a) Minimum Apportionment.--Section 144(e) of title 23,
United States Code, is amended in the fifth sentence by
striking ``0.25'' and inserting ``0.5''.
(b) Authorizations for Discretionary Program.--Section
144(g) of title 23, United States Code, is by striking
paragraph (1) and inserting the following:
``(1) Discretionary bridge program.--
``(A) In general.--For each of fiscal years 1998 through
2003, of the amounts authorized to be appropriated to carry
out this section, all but $100,000,000 in the case of each
such fiscal year shall be apportioned as provided in
subsection (e).
``(B) Reserved amount.--For each of fiscal years 1998
through 2003, of the $100,000,000 referred to in subparagraph
(A)--
``(i) $90,000,000 shall be allocated at the discretion of
the Secretary on the same date and in the same manner as
funds apportioned under subsection (e); and
``(ii) $10,000,000 shall be allocated by the Secretary in
accordance with section 1039 of the Intermodal Surface
Transportation Efficiency Act of 1991 (23 U.S.C. 144 note;
105 Stat. 1990).''.
(c) Conforming Amendment.--Section 1039(e) of the
Intermodal Surface Transportation Efficiency Act of 1991 (23
U.S.C. 144 note; 105 Stat. 1991) is amended by striking
``1992, 1993,'' and all that follows and inserting the
following: ``1998 through 2003, $1,500,000 shall be available
to the Secretary to carry out subsections (a) and (b), and
$8,500,000 shall be available to the Secretary to carry out
subsection (c). Such sums shall remain available until
expended.''.
SEC. 8. MINIMUM ALLOCATION.
Section 157 of title 23, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (4), by striking the paragraph designation
and all that follows before ``on October 1'' and inserting
the following:
``(4) Fiscal years 1992-1997.--In each of fiscal years 1992
through 1997,''; and
(B) by adding at the end the following:
``(5) Fiscal year 1998 and thereafter.--
``(A) Determination of amounts.--In fiscal year 1998 and
each fiscal year thereafter on October 1, or as soon as
practicable thereafter, the Secretary shall determine what
amount of funds would be required to ensure that a State's
percentage of the total apportionments in each such fiscal
year and allocations for the prior fiscal year for--
``(i) the National Highway System under section 103;
``(ii) the Interstate maintenance program under section
119;
``(iii) the surface transportation program under section
133;
``(iv) the bridge program under section 144;
``(v) the congestion mitigation and air quality improvement
program under section 149;
``(vi) grants for safety belts and motorcycle helmets under
section 153;
``(vii) the Interstate reimbursement program under section
160; and
``(viii) the scenic byways program under section 1047 of
the Intermodal Surface Transportation Efficiency Act of 1991
(23 U.S.C. 101 note; 105 Stat. 1996);
is not less than 90 percent of the percentage that the
population of the State is of the population of the United
States.
``(B) Apportionment.--After determining the amounts of
funds under subparagraph (A), the Secretary shall apportion
the funds authorized to carry out this section to each State
in the ratio that the amount determined for the State under
subparagraph (A) bears to the total amount determined for all
States under subparagraph (A).'';
(2) in subsection (b), by striking the last 2 sentences and
inserting the following: ``Funds apportioned under this
section shall be subject to any limitation on obligations
established for Federal-aid highways and highway safety
construction programs.''; and
(3) by striking subsection (e) and inserting the following:
``(e) Definition of State.--Notwithstanding any other
provision of this title, in this section, the term `State'
means each of the 50 States.''.
SEC. 9. REIMBURSEMENT PROGRAM.
Section 160 of title 23, United States Code, is amended--
(1) in subsection (a), by striking ``The Secretary shall
allocate to the States in each of fiscal years 1996 and
1997'' and inserting ``For any fiscal year for which funds
are authorized to carry out this section, the Secretary shall
allocate to the States''; and
(2) in subsection (b), by striking ``each of fiscal years
1996 and 1997'' and inserting ``each fiscal year described in
subsection (a)''.
SEC. 10. APPORTIONMENT ADJUSTMENTS.
(a) Definition of State.--In this section, the term
``State'' means each of the 50 States.
(b) Density Adjustment.--
(1) In general.--Subject to subsection (d), in the case of
any State eligible for a density adjustment under paragraph
(3), the amount of funds apportioned to the State for the
surface transportation program under section 133 of title 23,
United States Code, for each of fiscal years 1998 through
2003--
(A) shall be increased as necessary to ensure that the
percentage obtained by dividing--
(i) the total apportionments to the State for the fiscal
year for Federal-aid highways and highway safety construction
programs; by
(ii) the total of all apportionments to all States for the
fiscal year for Federal-aid highways and highway safety
construction programs;
is not less than the minimum percentage for the State
determined under paragraph (2); and
[[Page S3220]]
(B) shall be increased as necessary to ensure that the
State receives an increased apportionment under subparagraph
(A) of not less than $5,000,000.
(2) Minimum percentage.--The minimum percentage referred to
in paragraph (1)(A) for a State shall be equal to the State's
percentage of the total apportionments and allocations during
fiscal years 1992 through 1997 under title 23, United States
Code, the Intermodal Surface Transportation Efficiency Act of
1991 (Public Law 102-240), and the National Highway System
Designation Act of 1995 (Public Law 104-59), excluding
apportionments and allocations made for--
(A) Interstate construction under section 104(b)(5)(A);
(B) emergency relief under section 125;
(C) the Federal lands highways program under section 204;
(D) donor State bonus amounts under section 1013(c) of the
Intermodal Surface Transportation Efficiency Act of 1991 (23
U.S.C. 157 note; 105 Stat. 1940);
(E) Kansas projects under section 1014(c) of the Intermodal
Surface Transportation Efficiency Act of 1991 (Public Law
102-240; 105 Stat. 1942);
(F) hold harmless adjustments under section 1015(a) of the
Intermodal Surface Transportation Efficiency Act of 1991 (23
U.S.C. 104 note; 105 Stat. 1943);
(G) 90 percent of payment adjustments under section 1015(b)
of the Intermodal Surface Transportation Efficiency Act of
1991 (23 U.S.C. 104 note; 105 Stat. 1944); and
(H) demonstration projects under the Intermodal Surface
Transportation Efficiency Act of 1991 (Public Law 102-240).
(3) Eligible states.--A State shall be eligible for a
density adjustment under this subsection if the State--
(A) has a population density of less than 20 persons per
square mile or more than 450 persons per square mile; or
(B) is an island State completely separated from the
continental United States by water.
(c) Minimum Apportionment Adjustment.--Subject to
subsection (d), the amount of funds apportioned to a State
for the surface transportation program under section 133 for
each of fiscal years 1998 through 2003 shall be increased as
necessary to ensure that--
(1) the sum of--
(A) the total apportionments to the State for the fiscal
year; and
(B) the total allocations, authorized by this Act, to the
State for the previous fiscal year;
for Federal-aid highways and highway safety construction
programs (excluding apportionments and allocations for
emergency relief under section 125 and for Federal lands
highways under section 204); is not less than
(2)(A) \1/2\ of 1 percent of the sum of--
(i) the total of all apportionments described in paragraph
(1) to all States for the fiscal year; and
(ii) the total of all allocations described in paragraph
(1) to all States for the previous fiscal year; or
(B) 90 percent of the total of all apportionments described
in paragraph (1) to the State for fiscal year 1997.
(d) Limitation on Apportionment Adjustments.--If the
amounts authorized to be appropriated for apportionment
adjustments under this section for a fiscal year are
insufficient to fund the increased apportionments required by
subsections (b) and (c) for the fiscal year, the increased
apportionment for each State shall be reduced
proportionately.
SEC. 11. RESEARCH PROGRAMS.
(a) Strategic Highway Research Program.--Section
307(b)(2)(B) of title 23, United States Code, is amended by
striking ``1994, 1995, 1996 and 1997'' and inserting ``1994
through 2003''.
(b) Applied Research Program.--Section 307(e)(13) of title
23, United States Code, is amended in the first sentence by
striking ``1993, 1994, 1995, 1996, and 1997'' and inserting
``1993 through 2003''.
(c) Intelligent Transportation Systems.--Section 6058 of
the Intermodal Surface Transportation Efficiency Act of 1991
(23 U.S.C. 307 note; 105 Stat. 2191) is amended--
(1) in subsection (a), by striking ``1997'' and inserting
``2003''; and
(2) in subsection (b), by striking ``1997'' and inserting
``2003''.
SEC. 12. SCENIC BYWAYS PROGRAM.
Section 1047(d) of the Intermodal Surface Transportation
Efficiency Act of 1991 (23 U.S.C. 101 note; 105 Stat. 1996)
is amended by striking ``1995, 1996, and 1997'' and inserting
``1995 through 2003''.
SEC. 13. FERRY BOATS AND TERMINALS.
Section 1064(c) of the Intermodal Surface Transportation
Efficiency Act of 1991 (23 U.S.C. 129 note; 105 Stat. 2005)
is amended by striking ``fiscal year 1997'' and inserting
``each of fiscal years 1997 through 2003''.
SEC. 14. NATIONAL RECREATIONAL TRAILS PROGRAM.
Section 1302(d)(3) of the Intermodal Surface Transportation
Efficiency Act of 1991 (16 U.S.C. 1261(d)(3)) is amended by
striking ``shall not exceed'' and all that follows and
inserting ``shall not exceed $30,000,000 for each of fiscal
years 1992 through 2003.''.
SEC. 15. TRANSPORTATION AND LAND USE INITIATIVE.
(a) In General.--Chapter 3 of title 23, United States Code,
is amended by inserting after section 307 the following:
``Sec. 307A. Transportation and land use initiative
``(a) Establishment.--The Secretary shall establish a
comprehensive initiative to investigate, understand, and, in
cooperation with appropriate State, regional, and local
authorities, address the relationships between transportation
and land use.
``(b) Transportation and Land Use Research.--
``(1) In general.--The Secretary, in cooperation with
appropriate Federal, State, regional, and local agencies and
experts, including States and other entities eligible for
assistance under subsection (d), shall develop and carry out
a comprehensive research program to investigate and
understand the relationships between transportation, land
use, and the environment.
``(2) Funding.--For each of fiscal years 1998 through 2003,
of the sum deducted by the Secretary under section 104(a),
not less than $1,000,000 shall be made available to carry out
this subsection.
``(c) Transportation and Land Use Planning Grants.--
``(1) Applications.--The Secretary shall solicit
applications for transportation and land use planning grants
under this subsection from State, regional, and local
agencies, individually or in the form of consortia, to plan,
develop, implement, and monitor strategies to integrate
transportation and land use plans and practices.
``(2) Purposes.--The purposes of grants under this
subsection shall be--
``(A) to support initiatives to reduce the need for costly
future highway investments;
``(B) to provide access to jobs, services, recreational and
educational opportunities, and centers of trade, in a cost-
effective and efficient manner;
``(C) to otherwise improve the efficiency of the
transportation system; and
``(D) to avoid, minimize, or mitigate the environmental
impacts of transportation projects.
``(3) Preferences.--In selecting recipients of grants under
this subsection, the Secretary shall give preference to
applicants that--
``(A) are agencies that have significant responsibilities
for transportation and land use; and
``(B) submit applications that--
``(i) demonstrate a commitment to public involvement; and
``(ii) demonstrate a meaningful commitment of non-Federal
resources to support the efforts of the project team.
``(4) Number.--For each fiscal year, the Secretary shall
make not more than 5 grants under this subsection.
``(5) Maximum amount.--A grant made under this subsection
for a fiscal year shall be in an amount not greater than
$1,000,000.
``(d) Transportation and Land Use Policy Grants.--
``(1) In general.--The Secretary may make transportation
and land use policy grants to State agencies, metropolitan
planning organizations, and local governments to--
``(A) recognize significant progress in integrating
transportation and land use plans and programs; and
``(B) further aid in the implementation of the programs.
``(2) Preferences.--In selecting recipients of grants under
this subsection, the Secretary shall give preference to
applicants that--
``(A) have instituted transportation processes, plans, and
programs that--
``(i) are coordinated with adopted State land use policies;
and
``(ii) are intended to reduce the need for costly future
highway investments through adopted State land use policies;
``(B) have instituted other policies to promote the
integration of land use and transportation, such as--
``(i) `green corridors' programs that limit access to major
highway corridors to areas targeted for efficient and compact
development;
``(ii) urban growth boundaries to guide metropolitan
expansion;
``(iii) State spending policies that target funds to areas
targeted for growth; and
``(iv) other such programs or policies as determined by the
Secretary; and
``(C) have adopted land use policies that include a
mechanism for assessing and avoiding, minimizing, or
mitigating potential impacts of transportation development
activities on the environment.
``(3) Use of grant funds.--Grants made under this
subsection shall be available for obligation for--
``(A) any project eligible for funding under this title or
title 49; and
``(B) any other activity relating to transportation and
land use that the Secretary determines appropriate, including
purchase of land or development easements and activities that
are necessary to implement--
``(i) transit-oriented development plans;
``(ii) traffic calming measures; or
``(iii) any other coordinated transportation and land use
policy.
``(4) Minimum amount.--A grant made under this subsection
for a fiscal year shall be in an amount not less than
$10,000,000.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated out of the Highway Trust Fund
(other than the Mass Transit Account)--
``(1) to carry out subsection (c) $3,000,000 for each of
fiscal years 1998 through 2003; and
``(2) to carry out subsection (d) $50,000,000 for each of
fiscal years 1998 through 2003.''.
(b) Conforming Amendment.--The analysis for chapter 3 of
title 23, United States Code, is amended by inserting after
the item relating to section 307 the following:
[[Page S3221]]
``307A. Transportation and land use initiative.''.
SEC. 16. APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM.
(a) Authorization.--
(1) In general.--There is authorized to be appropriated out
of the Highway Trust Fund (other than the Mass Transit
Account) for construction of the Appalachian development
highway system authorized by section 201 of the Appalachian
Regional Development Act of 1965 (40 U.S.C. App.)
$425,000,000 for each of fiscal years 1998 through 2003.
(2) Transfer and administration of funds.--The Secretary of
Transportation shall transfer the funds made available by
paragraph (1) to the Appalachian Regional Commission, which
shall be responsible for the administration of the funds.
(b) Federal Share.--The Federal share under this section
shall be 80 percent.
(c) Delegation to States.--Subject to title 23, United
States Code, the Secretary of Transportation shall delegate
responsibility for completion of construction of each segment
of the Appalachian development highway system under this
section to the State in which the segment is located, upon
request of the State.
(d) Advance Construction.--The Secretary of Transportation
may make available amounts authorized by this section in the
manner described in section 115(a) of title 23, United States
Code.
(e) Contract Authority.--Funds authorized by this section
shall be available for obligation in the same manner as if
the funds were apportioned under chapter 1 of title 23,
United States Code, except that--
(1) the Federal share of the cost of any construction under
this section shall be determined in accordance with
subsection (b); and
(2) the funds shall remain available until expended.
(f) Other State Funds.--Funds made available to a State
under this section shall not be considered in determining the
apportionments and allocations that any State shall be
entitled to receive, under title 23, United States Code, and
other law, of amounts in the Highway Trust Fund.
Mrs. BOXER. Mr. President, it is an honor for me to join today with
four of the giants of the first ISTEA--Senators Moynihan, Chafee,
Lautenberg, and Lieberman to support the ISTEA Reauthorization Act, the
reauthorization of the 1991 Intermodal Surface Transportation
Efficiency Act. Their vision of how we should shape transportation in
this country in the postinterstate era is why we are here today to
carry that vision into the next century.
The economic power of California and this Nation can only be
unleashed if we invest in the means to get our workers to their jobs
and our exports into international trade. This legislation not only
will accomplish that vital goal but it will do so without leaving our
environment in worst shape for generations to come.
At this time, Senator Moynihan's bill best meets the goals that I
have set for rewriting our surface transportation law. It is the best
approach for California, which contributes more in Federal gas taxes
than any other State. While this legislation is not what I will expect
in a final bill, it is the best horse for California out of the
starting gate.
I look forward to working with colleagues in committee to add
provisions important to my State, including adding my legislation to
provide Federal investment in border infrastructure to relieve border
choke points resulting from increased trade. Senator Moynihan knows
this is a key issue for the border States.
Let me tell you briefly why this bill is the best for California
right now:
First and foremost, this bill recognizes the responsibility that
transportation bears to environmental protection by preserving the
Congestion Mitigation and Air Quality Program. Nearly 26 million of
California's 33 million residents live in an area that fails to meet
one or more of the EPA's air quality standards. CMAQ must be preserved
as a separate program targeted to those areas that need alternative
transportation choices.
The bill also anticipates the adoption of new standards that will
increase CMAQ funding for new nonattainment areas while protecting the
funding levels of current areas. In addition, the bill preserves
funding for areas that are in maintenance status, a measure that I
authored in the 1995 National Highway System Designation Act to help
these areas continue their path toward improved air quality.
Second, the bill uses up to date factors such as actual vehicle use
and current population estimates in determining the highway funding
categories. Those factors help raise California's share of funding. I
will continue to work with my colleagues in the committee for a fairer
share of the transportation funds for California, but this is a good
start.
Third, the bill continues the Bridge Rehabilitation and Repair
Program. In 1994, after the Northridge disaster, my colleagues here
supported my bill that permitted this program to fund seismic retrofit
projects without needing some other kind of repair first. This program
is unique in that it permits such funding for local bridges.
Last, but not least, this bill carries the torch for the basic
framework of ISTEA. I have heard from my local governments north to
south in California that ISTEA works. Some change, yes. But the basic
integrity of this law is sound. I agree with them, and I am proud to
join the ``ISTEA works team.''
Mr. LAUTENBERG. Mr. President, I am pleased to join with Senator
Patrick Moynihan, Senator Joseph Lieberman, and 32 other Senators to
introduce the ISTEA Reauthorization Act of 1997. This bill recognizes
the success of the 1991 law, the Intermodal Surface Transportation
Efficiency Act, by reauthorizing it with no major changes.
Mr. President, 17 Governors endorsed a statement of principles for
the next surface transportation law that strongly affirmed ISTEA's
goals and effectiveness in ensuring a sound national transportation
infrastructure. Included in those goals were these statements: Maintain
the course set by ISTEA; reauthorize ISTEA with simplification and
refinement but without significant changes; allocate funds to states
primarily based on needs; retain the Federal Government's role as a key
transportation partner to help fund highway, bridge, and transit
projects and to assure that a national focus remains on mobility,
connectivity, uniformity, integrity, safety, and research. Their
message was, plain and simple, ISTEA works.
Over the past few months, many others, from coast to coast, have
sounded that message. Some are in the transportation business, others,
such as mayors, county officials, and environmentalists are not. The
drumbeat has sounded, that ISTEA works.
I strongly support that message. ISTEA was bold and innovative, and
changed the way we think and make decisions about transportation. It
brought the public into the process. It requires sound planning. It
promotes energy efficient transportation, research and development. It
strengthens safety.
It recognizes that the goal of a transportation system is how best to
move goods and people, efficiently and effectively.
Mr. President, ISTEA has worked across this Nation, as witnessed by
the 32 cosponsors from 17 States. ISTEA has also worked for my home
State of New Jersey. ISTEA could not have had a better laboratory than
New Jersey. New Jersey is a corridor State, linking commerce and travel
to the Northeast and the rest of the country. New Jersey has the
highest vehicle density of any State in the United States. Thousands of
heavy duty trucks, only half of which are not registered in New Jersey,
use New Jersey's roads.
It is a commuter State, heavily reliant on mass transit. New Jersey's
transportation infrastructure is heavily used and is significantly
older than many other State's. We as a State have had to be creative in
finding ways to maintain the condition of the infrastructure, while
improving mobility and promoting sound planning.
Improving mobility reduces congestion, which in turn, improves air
quality and makes our highways safer. This means that our time is not
spent in long commutes to work or stuck in traffic. We need to remember
why sensible transportation funding and planning is important. It's not
to satisfy some special interest. It's to remember that sound
transportation systems help cope with growing communities--our
neighborhoods. Sound transportation systems help to improve mobility to
transport freight and promote domestic and international commerce,
making our economy more efficient and creating jobs--our businesses.
Sound transportation systems help to improve air quality and protect
the environment--our personal health. In short, transportation can, and
should, help develop liveable communities and create a better way of
life.
[[Page S3222]]
Mr. President, ISTEA was the first step toward this goal. The ISTEA
Reauthorization Act of 1997 is the next logical step to launch our
Nation's transportation system into the 21st century.
The bill we are introducing today recognizes that current levels of
transportation investment fall short of needs, so it increases
authorized transportation funding over 6 years and continues the
emphasis on preservation and maintenance of transportation systems.
The bill continues to support the scientifically proven link between
transportation and air quality by bolstering the Congestion Mitigation
and Air Quality Program.
The bill supports allocating transportation funds based on need, by
continuing the bridge program without any changes.
The bill increases flexibility by making Amtrak eligible for certain
highway funds, and maintains the flexibility for transit.
And, the bill recognizes special needs of States with both low and
high density populations, by providing additional funding.
Mr. President, I would also like to comment on the effort to revise
our national highway program to ensure that each State receives
allocations based on a certain percentage of its gas tax contributions
to the highway trust fund--the donor-donee issue. This is the wrong way
to think about transportation funding. It is in the national interest
to have a Federal transportation policy with national goals. That's how
we promote interstate and international commerce, further economic
productivity, protect the environment, and ensure safety. That's why
decisions to allocate Federal transportation funding should be based on
need, not on a State's contribution to the highway trust fund. We do
not allocate airport improvement program funds based on the amount of
ticket tax that is collected in each State. No Federal programs work
that way.
However, if we choose to approach the issue in that context, then we
must first recognize each State's return on the Federal dollar for all
Federal programs. New Jersey receives only 68 cents of return on the
Federal dollar--second to last, just ahead of Connecticut. New
Jerseyans collectively contribute $15 billion more in Federal payments
than they receive--that's more than $1,800 per resident.
Mr. President, if we were to adopt an across-the-board rule to
require 95 percent return on Federal dollars, consider what would
happen if we apply that test to other programs. New Jersey would then
receive $169 million more for agriculture subsidies, $2.1 billion more
of defense spending, and about $55 million more for child and family
health services funding.
Mr. President, national transportation funding should continue to be
allocated based on national goals and State needs like other Federal
programs.
Mr. President, ISTEA has worked for our cities, our counties, our
environment, and for economic development. Let us build on the success
of the past and not turn the clock back on transportation progress.
Mr. LEAHY. Mr. President, 6 years ago, thanks to the leadership of
Senators Moynihan and C0hafee, this Nation made a fundamental change in
the way that it allocates public investment in transportation. That
change was based on the premises that local people understand local
needs, that funding should be flexible, and that transportation should
contribute to meeting national environmental and public health goals.
I made a commitment to myself and to Vermonters that I would only
sponsor legislation that embodies those three premises. Today I
announce that I am proud to be an original cosponsor of the ISTEA
Reauthorization Act of 1997, and I look forward to doing whatever I can
to ensure that this progressive legislation makes it through the Senate
and into law.
This bill maintains and enhances our transportation commitments in
ways that will benefit Vermonters. I fought hard to include the
provision that will allow the State of Vermont the flexibility to use
Federal funds for Amtrak service. Our small State has two successful
Amtrak trains, both of which operate because of the leadership shown by
Governor Dean and the legislature. If this provision passes it will
mean that Amtrak service in Vermont can be maintained and possibly even
expanded.
This bill also protects transportation flexibility that has been so
popular in Vermont. It maintains the recreational trails and scenic
byways programs, and allows States to continue to use funds for bicycle
transportation and pedestrian walkways. I will continue to fight for
these programs in the coming months.
Finally, this bill will bring more resources to Vermont. Out small
State lies on a major north-south truck route. Much of this traffic
passes through Vermont without stopping for fuel. Consequently, our
roads get a lot of the wear and tear that goes along with commerce,
without the accompanying gas tax receipts. This legislation provides
Vermont with a major boost in highway funding, so that we can better
maintain and repair our existing roads.
In closing, Mr. President, I urge my colleagues who have not yet done
so to join me and the bipartisan group of 32 other Senators who have
committed themselves to the ISTEA reauthorization bill of 1997.
Mr. LIEBERMAN. Mr. President, I'm delighted to join with Senator
Moynihan and Senators Lautenberg, Chafee, Dodd, and numerous other
colleagues to introduce the Intermodal Surface Transportation
Efficiency Reauthorization Act of l997.
As a member of the Environment and Public Works Committee, I was
proud to have worked hard with Senator Moynihan and others to craft
ISTEA in l991. Without a doubt, ISTEA was the most significant and
innovative transportation legislation of a generation. It recognized
that our Nation is now reaching a maturing system of transportation.
With our Interstate system built, ISTEA moved us to also focus on
maintenance, intermodalism, efficiency, funding flexibility, and
environmental protection.
So often today we hear complaints about laws and programs that don't
work. ISTEA is a law that has worked and is working--very well. It's
one area where we don't need to reinvent government--we did that in
l991 when we adopted ISTEA. That's why Governors, mayors, county
officials, guilders unions, environmental groups, planners, businessmen
and women, and others are telling us to reauthorize the law with
minimal change. That was the resounding message I heard in Connecticut
at a forum yesterday from a broad range of interests.
Let me spend a few minutes reviewing why ISTEA is so important.
In a very unique way, ISTEA combines this country's long-standing
commitment to our national priorities--a national system of
transportation central to our economic growth and our commitment to
protecting and enhancing our environment--with a new emphasis on
responding to local conditions, priorities, and interests and involving
the public in this decisionmaking process.
The statement of policy that introduces ISTEA reminds us that the
economic health of the country depends on access to an efficient
transportation system. It reads as follows:
It is the policy of the United States to develop a national
intermodal transportation system that is economically
efficient and environmentally sound, provides the foundation
for the nation to compete in the global economy and will move
people and goods in an efficient manner.
ISTEA's commitment to a national transportation system includes
dedicated sources of funding to preserve, restore, and rehabilitate our
Interstate highways and bridges. In many areas of the country, like my
own, our infrastructure is older and densely traveled. We need
dedicated sources of funding for these programs to help ensure an
efficient transportation system for our entire Nation.
Second, ISTEA recognized that there is an inextricable link between
transportation and the quality of our environment, particularly our air
quality. Automobiles are a large contributor to our smog, carbon
monoxide, and particulate matter pollution. As Americans drive more and
more miles, the pollution control gains from cleaner cars get wiped
out.
The Congestion Mitigation and Air Quality Improvement Program is one
of the most innovative programs created under ISTEA. It is providing $1
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billion per year for projects to reduce air pollution. These funds are
being used to help States restore air quality to healthy levels. This
program is the opposite of the so-called unfunded mandates--it provides
Federal funds to help meet the requirements of the Clean Air Act. In
Connecticut where our air quality is so bad, this program provides an
important source of funding to help us move toward clean air. Stamford,
Greenwich, and Norwalk, for example, made innovative use of these
funds. Our bill would substantially increase funding for this program.
While recognizing these national priorities, ISTEA also makes nearly
one-half of all funds available for State and local decisionmaking. The
transportation needs of Connecticut are different from the needs of
Montana, and this program allows each area to decide what's right for
them, again, within the context of protecting a national transportation
system. And for the first time, it allowed local decisionmakers to
spend funds on either highways or transit. This leveling of the playing
field between transit and highways is very important for many areas of
the country, including my own.
ISTEA also created a popular program known as Transportation
Enhancements which provides a small amount of funding to mitigate some
of the negative effects transportation has caused for our local
communities. I heard yesterday at a forum in Connecticut how funds were
used from this program to restore a recreational and open space
corridor along the abandoned right of way of the former Farmington
Canal and the Boston and Main Railroad. This project was selected as
one of the Nation's 25 best enhancement projects. We've also used funds
from this program to help restore some of our coastal wetlands, to
protect and enhance the landscape of our famous Merritt Parkway and for
the restoration of the Route 8 and Route 15 interchanges.
We should also not forget the important process changes made by
ISTEA. The law gave local decisionmakers and the public a much greater
role in making the transportation decisions that so affect their
communities. In Connecticut, mayors and other local elected officials
strongly support this approach. In fact, I heard from mayors at a forum
yesterday that ISTEA's planning provisions have led to greater
cooperation between central cities and their suburban neighbors on a
wide variety of issues--extending beyond transportation.
Unfortunately, despite ISTEA's record of achievement, our efforts to
reauthorize it will not be easy. ISTEA is under attack. A significant
number of Senators already support proposals which would eliminate many
of the fundamental bases of ISTEA, including much of our commitment to
a national transportation system. Instead, these proposals would turn
much of the program into essentially a block grant, where I'm concerned
our national priorities for our transportation system would be lost.
The funds would be distributed based on how much money each State is
contributing to the Highway Trust Fund in gasoline taxes rather than
looking to the Nation's infrastructure needs and also focusing funding
on those systems that require preservation and enhancement. In short,
these proposals would largely abandon the Federal role in
transportation which is so essential to support national economic
growth, global competitiveness, and the quality of life in our
communities.
I congratulate my friend and colleague Senator Moynihan and his staff
for their outstanding work in putting this bill together. I look
forward to working with him and my other colleagues as we move through
this process.
Mr. KENNEDY. Mr. President, I join in commending Senator Moynihan and
the other bipartisan sponsors for their leadership on this important
issue. The stakes are very high. The strength of our economy is
directly tied to the quality of our transportation. This is no time to
turn back the clock on ISTEA and its well-balanced commitment to seven
key points: Highways; public transit; environmental protection;
bikeways, recreational trails, and historic preservation; computerized
traffic management; safety; and a strong voice for local communities in
the allocation of funds.
In all of these areas, ISTEA has worked well and deserves to be
continued.
This is our reply to the STEP 21 coalition and the Western coalition.
Their proposals are blatant schemes to gerrymander the funding formula
against our States and undermine other key aspects of ISTEA, and
they're not acceptable.
They say their States should get back from the Treasury in ISTEA
funds what they pay into the Treasury in gas tax revenues. But that
kind of tunnel vision is distorting this debate. It's wrong to focus
narrowly just on transportation spending versus gas tax revenues. The
only fair comparison is between overall Federal spending that goes into
a State, and the overall Federal tax revenues that come from that
State.
By that standard, our States are donor States. We send more to
Washington than we get back in return. The States complaining the
loudest about not getting their fair share of Federal transportation
dollars are huge net winners in the overall picture. They get back far
more in Federal spending than they pay into the Treasury. And they're
trying to grab even more through ISTEA. I say, they should keep their
hands out of the ISTEA cookie jar.
We have enormous transportation needs in our States, and those needs
deserve strong Federal support. Working together, we intend to do all
we can to chart a fair transportation course for the coming years. I
look forward to that challenge and to our successful efforts together.
Ms. MOSELEY-BRAUN. Mr. President, I am honored to join my colleague
from New York, Senator Moynihan, and Senator Lautenberg, Senator
Lieberman, and many others today to introduce the ISTEA Reauthorization
Act of 1997. This law builds on the success of the last 6 years of
ISTEA, and will guide more than $175 billion in Federal highway
spending over the next 6 years.
Few laws we enact this year will have as much of an immediate and
significant affect on our economy than the ISTEA reauthorization bill.
The transportation industry employs 12 million people, consumes 20
percent of total household spending, and accounts for 11 percent of our
Nation's total economic activity. Highways are the most important
component of our transportation infrastructure, and their use is
growing. Between 1984 and 1994, U.S. motor vehicle travel increased
37.5 percent.
Over the past 6 years, the Intermodal Surface Transportation and
Efficiency Act has provided the basis for a strong Federal-State-local
partnership to help the Nation meet its transportation needs. It has
directed $157 billion into highways, mass transit, and related
transportation priorities nationwide. It is one of the most successful
intergovernmental partnerships in American history. Under ISTEA, we
completed the system of Interstate and Defense Highways begun by
President Eisenhower 40 years ago, defined the National Highway System
that will help prioritize highway improvements for decades to come, and
coordinated planning among different transportation modes.
ISTEA has improved the capacity and overall condition of our
transportation infrastructure. According to the U.S. Department of
Transportation, our highways and bridges are in better shape than they
were a few years ago. Our environment is in better condition too,
thanks to ISTEA innovations like the congestion mitigation and air
quality and transportation enhancement programs.
Despite our success, we continue to face enormous challenges over the
next 6 years to maintain and improve our highways and bridges. Over
this time, it will cost an estimated $148.5 billion just to maintain
the current physical conditions of our highways. Every year, we must
renew 100,000 miles of highways in order to maintain current pavement
conditions.
My own State of Illinois will need several billion dollars to repair
aging roads and bridges. According to some estimates, nearly 43 percent
of Illinois roads need repair, and almost one-fourth of Illinois
bridges are in substandard condition. Every year, Illinois motorists
pay an estimated $1 billion
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in vehicle wear and tear and other expenses associated with poor road
conditions.
In Chicago, the transportation hub of the Nation, the traffic flow on
some of the major arterial highways has increased seven-fold since they
were built in the 1950's and 1960's. According to a recent study,
Chicago is the fifth most congested city in the Nation. The typical
Chicago-area driver wastes 34 hours every year sitting still in traffic
jams, and pays $470 a year in lost time and wasted fuel.
In order to meet the transportation infrastructure needs of Illinois
and the Nation, the Federal Government must continue to play a lead
role in the ongoing partnership to improve America's highways. If there
were ever a legislative case in point for the saying, ``If it's not
broken, don't fix it,'' ISTEA is it.
The ISTEA Reauthorization Act of 1997 is a simple bill. It builds on
the success of the last 6 years. It does not represent a set of major
policy changes. It provides a significant increase in funding over
ISTEA levels, updates some of the funding formulas, and increases
flexibility for States, all within the constructs defined by ISTEA. I
hope the Environment and Public Works Committee will use this bill as
the basis for its deliberations on ISTEA reauthorization, and I urge
all of my colleagues to join us in sponsoring this important
legislation.
I want to point out that this legislation does not reauthorize the
mass transit half of ISTEA. That job falls on the Banking Committee. I
look forward to working with my colleagues on the committee and with
others who have a strong interest in transit to ensure the next 6 years
of transit policy also mirror the successful framework of transit
policy defined by ISTEA.
As we head into the 21st century, we must continue to maintain and
improve America's transportation infrastructure. In the global economy,
one of the things that makes our products competitive is our ability to
move freight across the country cheaply and efficiently. The ISTEA
Reauthorization Act of 1997 will accomplish that goal by continuing the
success of ISTEA into the next 6 years.
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