[Congressional Record Volume 143, Number 76 (Thursday, June 5, 1997)]
[Senate]
[Pages S5344-S5345]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself, Mr. Kerrey, Mr. Harkin, Mr. Hatch, Mr. 
        Hagel, and Mr. Grassley):
  S. 832. A bill to amend the Internal Revenue Code of 1986 to increase 
the deductibility of business meal expenses for individuals who are 
subject to Federal limitations on hours of service; to the Committee on 
Finance.


            The Business Meal Deduction Fairness Act of 1997

  Mr. KOHL. Mr. President, as my colleagues know, I am one of this 
body's strongest advocates for deficit reduction. I attribute much of 
my deep commitment to this goal to my days in business. As a 
businessman, I learned that you must balance your books and live within 
your means. I also learned that you must treat people fairly and admit 
when you have made a mistake. I have come to the floor to acknowledge 
that a mistake has been made, and must be corrected.
  In August 1993 we passed the omnibus budget reconciliation bill. I am 
proud to say that this legislation has helped to produce falling 
deficits and sustained economic growth. However, in our efforts to get 
our fiscal house in order we unfairly penalized a group of hard 
working, middle-class Americans: transportation workers. It is for this 
reason that I rise today, to reintroduce the business meal deduction 
fairness bill. This measure would increase the deductibility of 
business meals, from 50 to 80 percent, for individuals who are required 
to eat away from home due to the nature of their work.
  In the 1993 reconciliation bill was a provision which lowered the 
deductible portion of business meals and entertainment expenses from 80 
to 50 percent. The change was aimed at the so-called three martini 
lunches and extravagant entertainment expenses of Wall Street 
financiers and Hollywood movie moguls. Unfortunately, the change also 
hit the average truck driver who eats chicken fried steak, hot roast 
beef sandwiches, and meatloaf in truck stops. And while those who 
entertain for business purposes can change their practices based on the 
tax law change, long-haul transportation workers often have no choice 
but to eat on the road.
  For these workers, the 1993 decrease in the meal deduction has 
translated into an undeserved decrease in take home pay. For example, 
when the allowable deduction was dropped in 1993,

[[Page S5345]]

it increased taxes on an average truck driver $700 to $2,000 per year. 
This is a huge increase for a truck driver who normally earns $27,000 
to $35,000 per year.
  Our legislation would increase the take-home pay of hard working, 
middle-class Americans who were inadvertently hurt by changes in the 
tax law in 1993. Workers who, due to regulations limiting travel hours, 
must eat out. They have no control over the length of their trips, the 
amount of time they must rest during a delivery, or, in many cases, the 
places they can stop and eat. This legislation is straight forward. It 
would simply restore the business meal expense deduction to 80 per cent 
for individuals subject to the Department of Transportation's hours-of-
service limitations.
  I will be the first to admit that the budget deficit is the No. 1 
economic problem facing this country. Since being elected to the 
Senate, I have fought to eliminate this destructive drain on our 
ability to grow and compete in the world economy, but I have fought to 
do so in a fair manner. The 1993 reconciliation bill closed a loophole 
and unintentionally trapped some very hard working Americans. We need 
to acknowledge that a mistake was made and take the opportunity of a 
tax bill moving this year to fix that mistake. Therefore my colleagues, 
Senators Kerrey, Harkin, Hatch, Hagel, Grassley and I are requesting 
the support and assistance of this entire body to ensure that the 
business meal deduction fairness bill becomes law. Mr. President, I ask 
unanimous consent that a copy of my legislation be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 832

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. INCREASED DEDUCTIBILITY OF BUSINESS MEAL EXPENSES 
                   FOR INDIVIDUALS SUBJECT TO FEDERAL LIMITATIONS 
                   ON HOURS OF SERVICE.

       (a) In General.--Section 274(n) of the Internal Revenue 
     Code of 1986 (relating to only 50 percent of meal and 
     entertainment expenses allowed as deduction) is amended by 
     adding at the end the following new paragraph:
       ``(3) Special rule for individuals subject to federal 
     limitations on hours of service.--In the case of any expenses 
     for food or beverages consumed by an individual during, or 
     incident to, any period of duty which is subject to the hours 
     of service limitations of the Department of Transportation, 
     paragraph (1) shall be applied by substituting `80 percent' 
     for `50 percent'.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1997.
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