[Congressional Record Volume 143, Number 92 (Thursday, June 26, 1997)]
[Senate]
[Pages S6440-S6473]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   REVENUE RECONCILIATION ACT OF 1997

  The Senate continued with the consideration of the bill.


                           Amendment No. 537

  Mr. DOMENICI. How much time do I have on the amendment?
  The PRESIDING OFFICER. Forty-four minutes.
  Mr. DOMENICI. And the opposition has 44 minutes?
  The PRESIDING OFFICER. Sixty minutes.
  Mr. DOMENICI. So we have used 16. Actually, unless Senator Lautenberg 
has anything further to say, I believe I have stated the case for the 
Domenici-Lautenberg amendment No. 537. Does Senator Gramm want to offer 
an amendment to the amendment?
  Mr. GRAMM. I think Senator Biden is going to offer an amendment 
first, and after his amendment is disposed of, then I will have an 
amendment, as will several other people.
  Mr. BIDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. BIDEN. Madam President, I wonder if the Democratic manager would 
yield me time off the bill.
  Mr. DOMENICI. The Senator has time on his amendment.
  Mr. BIDEN. Parliamentary inquiry. Can I get time in my own right?
  Mr. DOMENICI. I yield back my time.
  The PRESIDING OFFICER. The time is controlled by Senator Domenici and 
Senator Roth.
  Mr. LAUTENBERG. I yield back my time.
  The PRESIDING OFFICER. Is all time yielded back?
  Mr. DOMENICI. We yielded back our time.
  Mr. BIDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.


                 Amendment No. 539 to Amendment No. 537

  Mr. BIDEN. Madam President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Biden], for himself and Mr. 
     Gramm, proposes an amendment numbered 539 to amendment No. 
     537.

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

       On page 43 of the amendment, strike lines 14 through 21 and 
     insert the following:
       ``(5) with respect to fiscal year 2001--
       ``(A) for the discretionary category: $537,677,000,000 in 
     new budget authority and $558,460,000,000 in outlays; and
       ``(B) for the violent crime reduction category: 
     $4,355,000,000 in new budget authority and $5,936,000,000 in 
     outlays;
       ``(6) with respect to fiscal year 2002--
       ``(A) for the discretionary category: $546,619,000,000 in 
     new budget authority and $556,314,000,000 in outlays; and
       ``(B) for the violent crime reduction category: 
     $4,455,000,000 in new budget authority and $4,485,000,000 in 
     outlays;

     as adjusted in strict conformance with subsection (b).''.
       (2) Transfers into the fund.--On the first day of the 
     following fiscal years, the following amounts shall be 
     transferred from the general fund to the Violent Crime 
     Reduction Trust Fund--
       (A) for fiscal year 2001, $4,355,000,000; and
       (B) for fiscal year 2002, $4,455,000,000.

  Mr. BUMPERS. Will the Senator from Delaware yield for an inquiry for 
a moment?
  Mr. BIDEN. I would be happy to.
  Mr. BUMPERS. Could the managers of this bill tell us how many second-
degree amendments there are to this process?
  I assume we are on the second-degree amendment process; is that 
correct?
  The PRESIDING OFFICER. That is correct.
  Mr. BUMPERS. Could the managers tell us how many second-degree 
amendments they anticipate on this?
  Mr. DOMENICI. I do not know.
  Mr. GRAMM. I believe there will be four. Senator Biden will offer one 
for himself. Once that is adopted, I will offer a second-degree 
amendment. And

[[Page S6441]]

then we have two other Senators who want to offer second-degree 
amendments, so they will be seriatim.
  Mr. BUMPERS. Then there are five, because I have one also. I am just 
wondering if we could get some kind of sequence so we know how they are 
going to be offered so we do not spend the rest of our lives waiting.
  Mr. DOMENICI. I say to the Senator, you can be assured there will be 
four ahead of you, if you would like to be fifth.
  Mr. BUMPERS. I thank the Senator for his courtesy.
  Mr. GRAMM. Why don't you do yours last?
  Mr. DOMENICI. That is what I said.
  Mr. BIDEN. Madam President, the second-degree amendment I have at the 
desk is very simple and straightforward. The Senator from New Mexico is 
introducing a budget process amendment, and what the amendment of 
Senator Gramm and myself does is, quite frankly, it merely extends the 
crime law trust fund for the extension of this agreement.
  I am told by the staffs of the majority and minority that in the 
budget process agreement that was agreed to with the administration, 
there is a line on page 90 of the concurrent resolution of the budget 
fiscal year 1998. On page 90, it says, ``Retain current law on separate 
crime caps at levels shown in the agreement tables.''
  All we are doing here is extending the crime law trust fund. We are 
not making judgments on how that will be disbursed within the trust 
fund. We are just extending the trust fund to the extent of this 
agreement. And, Madam President, as I offer this amendment, we are 
maintaining a commitment to one of the few specific ways the 
reconciliation package can, by virtue of the type of legislation it is, 
maintain a commitment.
  The commitment we made was to fight violent crime. And, ironically, 
it is working. It is working. And so for us now to extend the violent 
crime trust fund, let it expire 2 years before this budget agreement 
expires, means we are going to be back at it again in the year 2000 or 
before, fighting over something we now know works.
  So I realize we can take a long time debating this. But the bottom 
line is this: We are not suggesting, as the Senator from New Mexico 
knows, how this trust fund money within the caps will be disbursed; 
merely that we have the continuation of the trust fund as long as the 
budget agreement to the year 2002.
  Of all the priorities addressed in this budget package, I believe 
that none is more important than continuing our fight against violent 
crime and violence against women.
  The amendment I am offering, along with Senator Gramm seeks to 
maintain this commitment in one of the few specific ways this 
reconciliation package can--by virtue of the type of legislation this 
is--maintain this commitment. That is by extending the violent crime 
control trust fund will continue through the end of this budget 
resolution, fiscal year 2002.
  Senator Byrd, more than anyone, deserves credit for the crime law 
trust fund. Senator Byrd worked to develop an idea that was simple as 
it was profound--as he called on us to use the savings from the 
reductions in the Federal work force of 272,000 employees to fund one 
of the Nation's most urgent priorities: fighting the scourge of violent 
crime.
  Senator Gramm was also one of the very first to call on the Senate to 
``put our money where our mouth was.'' Too often, this Senate has voted 
to send significant aid to State and local law enforcement--but, when 
it came time to write the check, we did not find nearly the dollars we 
promised.
  Working together in 1993, Senator Byrd, myself, Senator Gramm, and 
other Senators passed the violent crime control trust fund in the 
Senate. And, in 1994, it became law in the Biden crime law.
  Since then, the dollars from the crime law trust fund have: Helped 
add more than 60,000 community police officers to our streets; helped 
shelter more than 80,000 battered women and their children; focussed 
law enforcement, prosecutors, and victims service providers on 
providing immediate help to women victimized by someone who pretends to 
love them; forced tens of thousands of drug offenders into drug testing 
and treatment programs, instead of continuing to allow them to remain 
free on probation with no supervision and no accountability; 
constructed thousands of prison cells for violent criminals; and 
brought unprecedented resources to defending our Southwest border--
putting us on the path to literally double the number of Federal border 
agents over just a 5-year period.
  The results of this effort are already taking hold: According to the 
FBI's national crime statistics, violent crime is down and down 
significantly--leaving our nation with its lowest murder rate since 
1971; the lowest violent crime total since 1990; and the lowest murder 
rate for wives, ex-wives, and girlfriends at the hands of their 
intimates to an 18-year low.
  In short, we have proven able to do what few thought possible--by 
being smart, keeping our focus, and putting our ``money where our 
mouths'' are--we have actually cut violent crime.
  Today, our challenge is to keep our focus and to stay vigilant 
against violent crime. Today, the Biden-Byrd-Gramm amendment before the 
Senate offers one modest step toward meeting that challenge:
  By assuring that the commitment to fighting crime and violence 
against women will continue for the full duration of this budget 
resolution.
  By assuring that the violent crime control trust fund will continue--
in its current form which provides additional Federal assistance 
without adding 1 cent to the deficit--through 2002.
  The Biden-Gramm amendment offers a few very simple choices: Stand up 
for cops--or don't; stand up for the fight against violence against 
women--or don't; and stand up for increased border enforcement--or 
don't.
  Every Member of this Senate is against violence crime--we way that in 
speech after speech. Now, I urge all my colleagues to back up with 
words with the only thing that we can actually do for the cop walking 
the beat, the battered woman, the victim of crime--provide the dollars 
that help give them the tools to fight violent criminals, standup to 
their abuser, and restore at least some small piece of the dignity 
taken from them at the hands of a violent criminal.
  Let us be very clear of the stakes here--frankly, if we do not 
continue the trust fund, we will not be able to continue such proven, 
valuable efforts as the violence against women law. Nothing we can do 
today can guarantee that we, in fact, will continue the Violence 
Against Women Act when the law expires in the year 2000.
  But, mark my words, if the trust fund ends, the efforts to provide 
shelter, help victims, and get tough on the abusers and barterers will 
wither on the vine. Passing the amendment I offer today will send a 
clear, unambiguous message that the trust fund should continue and with 
it, the historic effort undertaken by the Violence Against Women Act 
that says by word, deed, and dollar that the Federal Government stands 
with women and against the misguided notion that ``domestic'' violence 
is a man's ``right'' and ``not really a crime.''
  I urge my colleagues to support the Biden-Gramm amendment.
  At the appropriate time--and I am not quite sure yet when is 
appropriate--I will ask for the yeas and nays on this.
  But make no mistake about it, what we are voting on here is whether 
or not we are going to commit now to the extension of the trust fund, 
the violent crime trust fund, for the extent of this agreement. That is 
all this does. That is everything it does, but that is all it does.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER (Mr. Bennett). The Senator from New Mexico.


                      Amendment No. 537, Withdrawn

  Mr. DOMENICI. Mr. President, I withdraw my amendment.
  The PRESIDING OFFICER. The amendment is withdrawn.
  The amendment (No. 537) was withdrawn.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
West Virginia is recognized.

[[Page S6442]]

                           Amendment No. 540

  (Purpose: To eliminate tax deductions for advertising and promotion 
 expenditures relating to alcoholic beverages and to increase funding 
 for programs that educate and prevent the abuse of alcohol among our 
                            Nation's youth)

  Mr. BYRD. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from West Virginia [Mr. Byrd] proposes an 
     amendment numbered 540.

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

       At the end of the bill, add the following:

            TITLE  --ALCOHOL ADVERTISING RESPONSIBILITY ACT

     SEC.  01. SHORT TITLE.

       This title may be cited as the ``Alcohol Advertising 
     Responsibility Act''.

     SEC.  02. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) alcohol is used by more Americans than any other drug;
       (2) it is estimated that the costs to society from 
     alcoholism and alcohol abuse were approximately 
     $100,000,000,000 in 1990 alone.
       (3) in 1995, the alcoholic beverage industry spent 
     $1,040,300,000 on advertising, while the National Institute 
     for Alcohol Abuse and Alcoholism was funded at only 
     $181,445,000;
       (4) more than 100,000 deaths each year in the United States 
     result from alcohol-related causes;
       (5) 41.3 percent of all traffic facilities in 1995, or 
     17,274 deaths, were alcohol related;
       (6) in addition to severe health consequences, alcohol 
     misuse is involved in approximately 30 percent of all 
     suicides, 50 percent of homicides, 68 percent of manslaughter 
     cases, 52 percent of rapes and other sexual assaults, 48 
     percent of robberies, 62 percent of assaults, and 49 percent 
     of all other violent crimes;
       (7) approximately 30 percent of all accidental deaths are 
     attributable to alcohol abuse;
       (8) alcohol advertising may influence children's 
     perceptions toward an inclinations to consume alcoholic 
     beverages;
       (9) 26 percent of eighth graders, 40 percent of tenth 
     graders, and 51 percent of twelfth graders report having used 
     alcohol in the past month; and
       (10) college presidents nationwide view alcohol abuse as 
     their paramount campus-life problem.
       (b) Purposes.--The purposes of this title are--
       (1) to repeal the existing tax subsidization for expenses 
     incurred to promote the consumption of alcoholic beverages;
       (2) to reduce the amount of alcohol advertising to which 
     our Nation's youth are exposed; and
       (3) to increase funding for those programs that educate and 
     prevent the abuse of alcohol among our Nation's youth.

     SEC.  03. DISALLOWANCE OF DEDUCTION FOR ADVERTISING AND 
                   PROMOTION EXPENSES RELATING TO ALCOHOLIC 
                   BEVERAGES.

       (a) In General.--Part IX of subchapter B of chapter 1 
     (relating to items not deductible) is amended by adding at 
     the end of the following:

     SEC. 280I. ADVERTISING AND PROMOTION EXPENDITURES RELATING TO 
                   ALCOHOLIC BEVERAGES.

       ``(a) In General.--No deduction otherwise allowable under 
     this chapter shall be allowed for any amount paid or incurred 
     to advertise or promote by any means any alcoholic beverage.
       ``(b) Alcoholic Beverage.--For purposes of this section, 
     the term `alcoholic beverage' means any item which is subject 
     to tax under subpart A, C, or D of part I of subchapter A of 
     chapter 51 (relating to taxes on distilled spirits, wines, 
     and beer).''.
       (b) Conforming Amendment.--The table of sections for part 
     IX of subchapter B of chapter 1 is amended by adding at the 
     end the following:

``Sec. 280I. Advertising and promotion expenditures relating to 
              alcoholic beverages.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31 of the year in which this Act is 
     enacted.

     SEC. 04. ALCOHOL ABUSE EDUCATION AND PREVENTION AMONG YOUTH.

       (a) In General.--Subject to subsection (c), there shall be 
     transferred, from funds in the Treasury not otherwise 
     appropriated, to the entities described in subsection (b) 
     amounts to the extent specified under subsection (b).
       (b) Education and Prevention Programs.--
       (1) Substance abuse and mental health services 
     administration.--The amounts specified in this subsection 
     shall be:
       (A) In general.--With respect to the Substance Abuse and 
     Mental Health Services Administration, $120,000.000 for 
     fiscal year 1998, $180,000,000 for fiscal year 1999, 
     $180,000,000 for fiscal year 2000, $210,000,000 for fiscal 
     year 2001, and $210,000,000 for fiscal year 2002, to 
     supplement substance abuse prevention activities authorized 
     under section 501 of the Public Health Service Act (42 U.S.C. 
     290aa).
       (B) Use of funds.--Amounts provided to the Substance Abuse 
     and Mental Health Services Administration under subparagraph 
     (A) shall be used directly or through grants and cooperative 
     agreements to carry out activities to prevent the use of 
     alcohol among youth, including the development and 
     distribution of public service announcements.
       (2) Centers for disease control and prevention.--
       (A) In general.--With respect to the Centers for Disease 
     Control and Prevention, $120,000.000 for fiscal year 1998, 
     $180,000,000 for fiscal year 1999, $180,000,000 for fiscal 
     year 2000, $210,000,000 for fiscal year 2001, and 
     $210,000,000 for fiscal year 2002, to carry out a 
     comprehensive strategy to prevent alcohol-related disease and 
     disability.
       (A) Required uses.--In carrying out the comprehensive 
     strategy under subparagraph (A), the Centers for Disease 
     Control and Prevention shall--
       (i) enhance and expand State-based and national 
     surveillance activities to monitor the scope of alcohol use 
     among the youth of the United States;
       (ii) enhance comprehensive school-based health programs 
     that focus on alcohol use prevention strategies;
       (iii) develop and distribute commercial advertising to 
     prevent alcohol abuse among youth; and
       (iv) enhance and expand Fetal Alcohol Syndrome prevention 
     activities throughout the United States.
       (3) National highway traffic safety administration.--With 
     respect to the National Highway Traffic Safety 
     Administration, and in addition to any funds authorized from 
     the Highway Trust Fund, $120,000.000 for fiscal year 1998, 
     $180,000,000 for fiscal year 1999, $180,000,000 for fiscal 
     year 2000, $210,000,000 for fiscal year 2001, and 
     $210,000,000 for fiscal year 2002, to carry out programs 
     under sections 402, 403, and 410 of title 23, United States 
     Code, and to develop and implement a paid media campaign 
     targeting high-risk youth populations to improve the balance 
     of media messages related to alcohol impaired driving.
       (4) Indian health service.--With respect to the Indian 
     Health Service, $40,000,000 for fiscal year 1998, $60,000,000 
     for fiscal year 1999, $60,000,000 for fiscal year 2000, 
     $70,000,000 for fiscal year 2001, and $70,000,000 for fiscal 
     year 2002, to supplement the programs that such Service is 
     authorized to carry out pursuant to titles II and III of the 
     Public Health Service Act (42 U.S.C. 202 et seq., 241 et 
     seq.).
       (c) Authority to Transfer Funds.--The Committee on 
     Appropriations of the House of Representatives and the 
     Committee on appropriations of the Senate, acting through 
     appropriations Acts, may transfer the amount specified under 
     subsection (b) in each fiscal year among the entities 
     referred to in such subsection.

  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, would the Chair indulge me momentarily?
  I protect my right to the floor.
  The PRESIDING OFFICER. The Senator from West Virginia will be 
protected in his right to the floor.
  Mr. DURBIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia has the floor.
  Mr. BYRD. I thank the Chair.
  Mr. President, last Friday negotiators from the tobacco industry and 
State attorneys general announced the landmark agreement addressing the 
impact of tobacco use on our Nation, particularly our young people. 
Although this important deal will likely face many obstacles and has a 
long way to go toward implementation, it is an unprecedented first step 
toward curbing tobacco use and paying for the harm caused by that use.
  This process has caused our Nation to focus on an important public 
health danger and is an important step in working toward a meaningful 
solution.
  While I applaud the action being taken to address the pernicious 
health effects of tobacco, I am concerned that its evil twin, which 
also has a staggering impact on our Nation, is to a large measure being 
ignored.
  Mr. President, the cost of alcohol abuse to our country is 
staggering. According to the National Institute on Alcohol Abuse and 
Alcoholism of the National Institutes of Health, alcohol is used by 
more Americans than any other drug. And the results are devastating.
  The flood tide of alcohol causes more than 100,000 deaths each year 
in the United States. Alcohol abuse and alcoholism imposes 
approximately $100 billion in cost each year on society. Links have 
been found between alcohol abuse and cirrhosis of the liver, as well as 
other harmful health conditions. Alcohol is a contributing factor in 
assaults, murders and other violent crimes, including fatal drinking 
and driving accidents.
  At the bottom of every empty bottle is another family in crisis, 
another career being destroyed, or another dream washed away.

[[Page S6443]]

  The amendment I am offering today would eliminate the tax deduction 
for alcoholic beverage advertising expenditures. In addition, it would 
increase funding for a number of programs that educate and prevent the 
abuse of alcohol among our Nation's youth.
  What should be of the utmost of our concern in our Nation is the 
impact of alcohol on our children and our grandchildren.
  I am introducing this amendment on behalf of the children who died 
because they were drinking and driving, and on behalf of the millions 
of children who are drinking right now without the full appreciation of 
what they are doing to themselves and what they could potentially do to 
others.
  Alcohol is the drug of choice among teenagers.
  Mr. President, more specifically, and looking at this chart compiled 
by the National Center on Addiction and Substance Abuse, the use of 
alcohol by our Nation's youth is highlighted among different age 
groups, including children between the ages of 12 and 17. Among 
children between the ages of 16 and 17, 69.3 percent have at one point 
in their lifetimes experimented with alcohol.
  Clearly, as made evident by these alarming statistics, alcohol is the 
leading problem among teenagers--not marijuana, not cocaine.
  In the last month, approximately 8 percent of the Nation's eighth 
graders have been drunk--have been drunk. We are talking about eighth 
graders, 13 years old--13-year-olds. I never heard of such a thing when 
I was in my teens, as a young man, or in my middle age. We are talking 
about eighth graders, 13-year-olds.
  Every State has a law prohibiting the sale of alcohol to individuals 
under the age of 21. How is it then that two out of every three 
teenagers who drink report that they can buy their own alcoholic 
beverages?
  The youth of this country, who at the delicate age of 15 should be 
enriching their minds with schoolwork, improving their bodies with 
exercise, and discovering the wonders of life through God and family 
values, instead are experimenting and endangering themselves with 
booze. Junior and senior high school students drink 35 percent of all 
wine coolers and consume 1.1 billion cans of beer a year. I know, 
because I pick some of them up off my lawn--I am talking about the beer 
cans, not the young people.
  I will repeat what is common knowledge to us all: Every State has a 
law prohibiting the sale of alcohol to individuals under the age of 21. 
Alcohol is a factor in the three leading causes of death for 15- to 24-
year-olds--the three leading causes--accidents, homicides, suicide. In 
approximately 50 percent to 60 percent of youth suicides, alcohol is 
involved.
  Links have been shown between alcohol use and teen pregnancies and 
sexually transmitted diseases. Eighty percent of the teenagers do not 
know that a can of beer has the same amount of alcohol as a shot of 
whiskey or a glass of wine. By the time they are in college, 40 percent 
have binged on alcohol during the previous 2 weeks.
  In 1994, 8.9 percent--almost 95,000--of the clients admitted to 
alcohol treatment programs that received at least part of their funding 
from the State were under the age of 21, including over 1,000 under the 
age of 12. And 31.9 percent of youth under the age of 18 in long-term 
State-operated juvenile institutions were under the influence of 
alcohol at the time of their arrest.
  While our Nation's education system needs repair, it seems that our 
society has been successful in teaching these kids something. The 
problem is that what we have taught them is deadly.
  Drinking impairs one's judgment. We all know that. Nobody will 
dispute that. Alcohol mixed with teenage driving is a lethal, a lethal 
combination. We read about it all the time in the Washington Post, the 
Washington Times, and every newspaper in the land. In 1995, there were 
1,666 alcohol-related fatalities of children between the ages of 15 and 
19. The total number of alcohol-related fatalities that year was 
17,274. Mr. President, for many years I have taken the opportunity, 
when addressing groups of young West Virginians, to warn them about the 
dangers of alcohol. I supported legislative efforts to discourage 
people, particularly young people, from drinking any alcohol. For 
example, 2 years ago I authored an amendment that requires States to 
pass the zero-tolerance laws that will make it illegal for persons 
under the age of 21 to drive a motor vehicle if they have a blood 
alcohol level greater than .02 percent. This legislation not only helps 
to save lives but it also sends a message to our Nation's youth that 
drinking and driving is wrong, that it is a violation of the law, and 
that it will be appropriately punished. Unfortunately and tragically, 
we all know someone, whether it is a family member or a friend or an 
acquaintance, whose life has been cut short by a drunk driver. These 
are senseless losses that are devastating to the families and the 
friends who are left behind.
  As if the aforementioned statistics about youth alcohol use and the 
results of that use are not frightening enough, young people who 
consume alcohol are more likely to use other drugs.
  On the chart to my left, Senators will note these statistics, 
compiled by the National Center on Addiction and Substance Abuse at 
Columbia University, statistics which show that 37.5 percent of young 
people who have consumed alcohol have used some other illicit drug, 
versus only 5 percent of young people who have never consumed alcohol; 
26.7 percent of those who have consumed alcohol have tried marijuana, 
versus 1.2 percent of those who have never consumed alcohol; 5 percent 
of youths who have partaken of alcohol have tried cocaine, while only 
0.1 of 1 percent of those who do not drink have used cocaine. So it is 
not a question that is even debatable that youths who drink alcohol are 
more likely to use other drugs.
  Mr. President, as the aforementioned facts and figures indicate, 
alcohol exacts a tremendous cost on our society. These costs are not 
always clear-cut. For example, consider the costs of the lost 
productivity of a person showing up at work on a Monday morning with a 
hangover and inadequately performing his or her job, perhaps making a 
mistake that results in injury. How many of us would like to ride in 
the automobile that was made on such a Monday morning? How many of us 
would like to fly on the airplane whose maintenance man or woman, whose 
mechanic was on a binge the previous day? While there is no way to 
accurately gauge the enormous costs that alcohol exacts upon our 
society, there can be no doubt that the pleasures of alcohol 
consumption exacts a considerable price on our Nation.
  The purpose of the amendment that I introduce today is simple. My 
proposal would simply tell all producers of alcoholic beverages that 
they can no longer deduct the costs of their advertising expenditures 
on those products from their Federal income tax liability. While 
advertising is generally deductible as a legitimate business expense, I 
believe there exists a moral, legitimate reason to create an exception 
for producers of alcoholic beverages whose products exact such 
considerable costs on our society. My proposal would not make illegal 
any advertising of alcoholic beverages. It does not say that any 
advertising of alcoholic beverages is unconstitutional. It does not 
attempt to ban such advertisements, nor would it create any additional 
Federal bureaucracy to regulate alcohol products. Rather, it would 
simply end the American taxpayers' subsidization of alcohol advertising 
by amending the Internal Revenue Code of 1986 to include a disallowance 
of any deduction for any amount paid or incurred to advertise or 
promote by any means any alcoholic beverage. This is not a sin tax. It 
is, rather, an end to the sin subsidy that has left American taxpayers 
footing the bill for both alcohol advertising and the high health care 
costs inflicted on society by alcohol consumption. Now there may be 
those who argue that it is wrong to single out alcohol advertising 
expenses. I counter that with the question: What other product, with 
the possible exception of tobacco, costs society $100 billion each 
year? What other product results in more than 100,000 deaths each year 
in the United States? The statistics are indeed staggering.

  Mr. President, in these complicated times, the innocence of youth, 
the innocence of youth is dashed away at an early age by the irreverent 
messages spewing from the television set. Profanity and violence on 
television programming are interrupted only by the aggressive 
commercials seeking to influence viewers in the name of profit.

[[Page S6444]]

Our impressionable youth, pressured by the self-indulgent motives of 
revenue-hungry corporations are bombarded by countless images 
glorifying an unrealistic view of reality, often insincerely portraying 
alcoholic beverages as an ingredient for ideal lifestyles. Our children 
are besieged with the message that if you drink you will attract 
beautiful women, if you drink you will be popular, if you drink you 
will excel at sports. Are these the images of reality or do they leave 
out something important? Do they leave out some important facts about 
alcohol consumption? What about the negative and all too prevalent 
results of alcohol consumption--the hangovers that result in lost 
productivity, the tragic deaths, the injuries caused by a drunk behind 
the wheel, the hospital visits for alcohol poisoning, the horrible 
effects of cirrhosis of the liver and the families torn apart by 
alcohol abuse.
  The industry indicates that their advertisements do not target young 
people, although this is debatable. A January Wall Street Journal 
article, detailing a competitive media reporting survey commissioned by 
the Journal, found that beer advertisements are often aired during 
programs that are watched by large numbers of adolescents. The findings 
of this survey are extremely disturbing. In one example, referenced in 
the article, a beer ad ran during the airing of a popular cartoon show 
on the MTV station of which 69 percent of the audience was comprised of 
children under the age of 21.
  Mr. President, I ask unanimous consent to have printed in the Record 
the Wall Street Journal article.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                     [From the Wall Street Journal]

          Are Beer Ads on Beavis and Butt-Head Aimed at Kids?

                           (By Sally Beatty)

       When a commercial for Schlitz Malt Liquor appeared last 
     year on MTV during ``My So-Called Life,'' a show about 
     teenage girls, beer maker Stroh called the airing an 
     aberration.
       Even as the ad helped launch a Federal Trade Commission 
     probe into alcohol advertising to children, Stroh said it had 
     a longtime policy of aiming ads only at adults of legal 
     drinking age; MTV said the ad ran by mistake because of a 
     last-minute programming switch.
       In fact, the commercial was hardly an isolated event. 
     Despite the beer industry's insistence that it doesn't target 
     kids, its commercials regularly wash over underage viewers. A 
     survey by Competitive Media Reporting for the Wall Street 
     Journal showed that during one arbitrarily chosen week--the 
     first week of September--youths under the drinking age made 
     up the majority of the audience for beer commercials on 
     several occasions.
       For instance, Molson beer was advertised during a 10 p.m. 
     episode of ``Beavis & Butt-Head,'' the popular MTV cartoon 
     series about two obnoxious teens. Fully 69% of all the 
     episode's viewers that night were under 21--the legal 
     drinking age in all 50 states--according to Nielsen Media 
     Research's widely used ratings data. Molson, which is 
     marketed in the U.S. by Philip Morris's Miller Brewing, also 
     advertised on MTV's racy youth dating show, ``Singled Out,'' 
     just after 7 p.m., when 52% of the audience was under 21. And 
     Stroh advertised Schlitz Malt Liquor during MTV's prime-time 
     music-video show at 8:30 p.m., when 56% of the audience was 
     under 21.
       That same week, Adolph Coors ran two ads on the Black 
     Entertainment Television channel after 8 p.m., when 65% of 
     the audience wasn't old enough to drink. Also that week, 
     Anheuser-Busch ran an ad for its Budweiser brand just 
     after 8:30 p.m. on BET during music-video programming, 
     when 70% of the audience was under 21.
       These commercials look like clear violations of the chief 
     beer industry trade group's own guidelines for TV ads. ``Beer 
     advertising . . . should not be placed in magazines, 
     newspapers, television programs, radio programs or other 
     media where most of the audience is reasonably expected to be 
     below the legal purchase age,'' states the Beer Institute's 
     published ``advertising and marketing guidelines.'' The 
     industry is pointing to these guidelines in an aggressive 
     lobbying effort against proposed new federal restrictions of 
     beer and liquor advertising.
       The number of ads reaching kids is ``very troubling,'' says 
     Jodie Bernstein, director of the FTC's bureau of consumer 
     protection and a top official involved with its ongoing probe 
     into alcohol marketing to kids on television. Her bureau 
     enforces laws banning unfair or deceptive ad practices, 
     including a statute that says it's unfair to aim ads at 
     people who aren't legally able to buy the products. A company 
     that runs afoul of such laws can face fines, orders to pull 
     ads and regular FTC screening of future advertising.
       Ms. Bernstein won't comment on the FTC's probe. However, 
     she says that in any investigation, the commission would look 
     first at whether alcohol advertisers are ``following their 
     own guidelines.'' For example, ``Is it OK if [the percentage 
     of underage viewers] gets up to 70% once in a while? I don't 
     think it's OK.'' And she says the commission would ``never 
     act on just one episode or one mistake--we would act on the 
     pattern.''
       Brewers and TV executives insist that it doesn't make sense 
     to evaluate beer ads on a single night's audience. ``Any 
     attempt to analyze the beer industry's media-buying practices 
     by examining only selected broadcast media buys during a one-
     week period is misleading and simplistic,'' said Miller 
     Brewing in a statement responding to questions about the 
     survey. Miller added that more than 75 percent of the 
     broadcast audience reached by the programming it buys is over 
     21.
       At Stroh, officials argue that there's a difference between 
     putting ads in front of kids and targeting them explicitly. 
     ``We understand that when an ad is run it's going to be seen 
     by some people who are under 21 years of age, whether it's a 
     billboard, in a magazine or on TV,'' says Stroh general 
     counsel George Kuehn. ``That does not mean we target the 
     group that is under 21.''
       Whether the beer industry advertises to kids became a hotly 
     debated question after the liquor industry last year 
     abandoned its longstanding guidelines banning TV ads. That 
     sparked a national uproar over exposing kids to alcohol ads--
     putting the beer industry in the spotlight.
       In Congress, Rep. Joseph P. Kennedy II (D., Mass.) has 
     introduced legislation that would ban most forms of alcohol 
     advertising from 7 a.m. to 10 p.m., require health warnings 
     on print, radio and TV ads and require alcohol ads that run 
     in publication with a 15% or more youth readership to appear 
     only in black-and-white text.
       There are already signs that brewers and Madison Avenue are 
     worried about the threat of regulation of beer ads. No. 1 
     brewer Anheuser-Busch revealed last month that it quietly 
     pulled all its beer advertising from MTV, saying it hoped to 
     ``ensure that our intent is not misperceived in today's 
     climate.'' The Madison Avenue's main trade group, the 
     American Association of Advertising Agencies, recently 
     abandoned its longtime stand against restrictions on ads 
     for products like alcohol and cigarettes. It proposed 
     setting up a new self-regulation committee, warning that 
     the industry otherwise faces a government crackdown on ads 
     for beer and other adult products.
       But setting reliable guidelines for such ads remains 
     tricky. TV executives argue that Nielsen ratings aren't 
     reliable measures of kid viewership--even though the ratings 
     are the TV industry's gold standard for gauging the cost of 
     ad time. Says John Popkowski, executive vice president in 
     charge of ad sales at MTV Networks: ``If you pick one show on 
     an isolated night you might find one that's an aberration 
     statistically,'' since cable channels' viewership is 
     sometimes relatively small.
       On the E! Channel, for instance, Miller Brewing ran a 
     Foster's ad on Sept. 2, just before 7:30 p.m., during the 
     show ``Melrose Place.'' That night, 41% of the show's 
     audience was under 21, according to Nielsen. But David T. 
     Cassaro, senior vice president in charge of ad sales for E! 
     Entertainment Television, says that from July 1 to Sept. 29 
     between 7 p.m. and 8 p.m., only about 28% of E! 
     Entertainment's audience was under 21. Overall, Mr. Cassaro 
     adds, only 19% of E! Entertainment's total audience isn't old 
     enough to drink.
       ``With networks like BET the numbers are so small that they 
     jump all over the place,'' adds John Goldman, a spokesman for 
     Adolph Coors. ``You take as much care as you can but the 
     programming changes often.'' Mr. Goldman says that in the 
     third quarter, the over-21 audience reached by BET between 7 
     p.m. and 8 p.m. ranged from 80% to 43%.
       Mr. Goldman adds that Coors doesn't buy MTV as a matter of 
     company policy. ``We want to avoid any misperception that 
     we're aiming at an underage audience.''

  Mr. BYRD. Mr. President, looking at another chart to my left, this 
chart demonstrates competitive media reporting estimates that the 
alcoholic beverage industry spent more than $1 billion on alcohol 
advertising in 1995.
  In contrast, in 1995, the Federal investment in the National 
Institute on Alcohol Abuse and Alcoholism was a mere $189.8 million for 
alcohol research. Does the industry expect us to believe that it would 
spend this huge amount of money--$1.1 billion--if it were not getting 
something for that money? Some may argue that this legislation would 
adversely affect the advertising industry by forcing producers of 
alcoholic beverages to eliminate their advertising expenditure. 
Poppycock. I do not believe that this would be the case.
  Alcoholic beverage producers spend large amounts of money to 
advertise their products because it encourages people to consume their 
product and it, therefore, increases sales. Eliminating the advertising 
deduction will not eliminate the fundamental business practice. By 
making these advertisements less profitable, this amendment may reduce 
the overall amount of alcohol advertising in our society. However, let 
there be no doubt that the alcohol ads will keep on running. You

[[Page S6445]]

can bet your bottom dollar on that. They will. The difference, however, 
will be that the American taxpayer will no longer be subsidizing this 
activity and that the money will go, instead, to getting the other side 
of the alcohol story out. That is what we need to start doing. We need 
to start now getting the other side of the alcohol story out. It is 
perhaps not the most popular thing politically to attempt to do here, 
but it needs to be done.
  This amendment is all the more necessary because, last year, the 
Distilled Spirits Council of the United States decided to reject its 
self-imposed ban on advertising hard liquor on television and radio. I 
decried this decision by the Distilled Spirits Council because it is a 
step backward at a time when our Nation is working to curb alcohol 
abuse. Now hard liquor advertisements will be flowing over the 
airwaves. This is not the direction in which our Nation should be 
moving.
  According to the Joint Committee on Taxation, the elimination of the 
tax deduction would result in $2.9 billion in savings over 5 years. My 
amendment targets the savings from the elimination of the disallowance 
to programs to prevent alcohol abuse among our Nation's young people 
and to educate children about alcohol. The Substance Abuse and Mental 
Health Services Administration would be given increased funds to 
supplement programs to prevent the use of alcohol among young people 
and to fund a media campaign designed to counteract the constant 
bombardment to which our children are subjected daily by alcohol 
advertisements. It is important to give our children information about 
the risks associated with the consumption of alcohol. We should not sit 
idly by and leave unchallenged the messages of alcoholic beverage 
advertisements that only good things happen to those who drink alcohol.
  This amendment will also direct funding to the Centers for Disease 
Control and Prevention to carry out a comprehensive strategy to prevent 
alcohol-related disease and disability. The CDC would be given 
authority to enhance and expand fetal alcohol syndrome prevention 
activities throughout the Nation. According to the NIAAA, fetal alcohol 
syndrome is estimated to affect from one to three children out of every 
1,000 live births.
  To address the distressing problem of alcohol-impaired driving, the 
National Highway Traffic Safety Administration's alcohol-impaired 
driving incentive grant program, previously known as section 410, would 
receive additional funding. Funding is also made available to NTSA to 
launch a media campaign about the perils of driving under the 
influence.

  The Indian Health Service will receive funding for its alcohol abuse 
programs to address the issue of alcohol abuse, which has such a 
devastating effect on the first Americans. I don't refer to them as 
native Americans. I don't refer to them as native Americans. I am a 
native American. If I am not a native American, of what country am I a 
native? I refer to them as the original Americans, or the first 
Americans.
  The harm that alcoholic beverages cause our Nation is not a second-
rate hangover, but a serious affliction that kills more than 100,000 
people each year. By adopting this amendment, we would be making a 
positive effort to improve the health of our Nation, particularly of 
our children, and to send a sober message to those who are capitalizing 
on profits generated by recklessly advertising alcoholic beverages 
through far-reaching and seductive means, such as television.
  We should act in the best interests of the American people and 
announce ``last call'' to those who have been receiving tax breaks for 
peddling booze, take a step in the right direction and begin to repair 
some of the damage brought by alcohol in this country. Let us begin by 
putting a cork in the tax loophole that has left American taxpayers 
picking up the tab for the alcohol industry.
  Now, Mr. President, I am very well aware that a point of order will 
be made, or can be made. I am well aware of that. But I think the 
debate has to start at some point. I think that point is now. We hear a 
great deal about tobacco and we hear a great deal about children, about 
children's health. I hope those who support those programs and talk 
much about them would support this effort. We are talking here about 
children's health. We are talking here about something that kills 
100,000 people every year. I am not seeking to ban alcohol. I am not 
seeking to regulate alcohol. I am simply seeking to end the 
subsidization by the taxpayers of this country of alcohol.
  Think about it. Think about it on your way home tonight as you drive 
out the George Washington Parkway and see someone in front of you 
wobbling from one side of the road to the other. Think again. Suppose 
your wife is up at Tyson's Corner getting ready to drive home with the 
children and that same fellow who was in front of your car wobbling may 
kill your wife and your children.
  So let's start talking about it. Let's start airing the subject here. 
Let's stop putting it behind the curtain, putting it under the rug, 
saying it is taboo. It is not. It is not taboo. Think about our 
children, our grandchildren. This is the product that kills other 
people. Tobacco may kill me. Tobacco may kill the individual who smokes 
it. But alcohol may not kill the person who imbibes; it may kill the 
innocent--the driver in the other car.
  So I hope that Senators will support my amendment. As I say, I am 
sure that there is a process or a motion available, but I am accustomed 
to those things. I say let the Senate work its will.
  I yield the floor.
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. I yield 5 minutes to the distinguished Senator from 
Kentucky.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. McCONNELL. Mr. President, I thank the chairman of the Finance 
Committee for yielding me a few moments. I listened very carefully to 
my good friend and colleague from West Virginia and to his observations 
about the dangers of drinking and driving, with which I completely 
concur.
  Of course, representing Kentucky, as my friend from West Virginia 
knows, not only do we have 60,000 tobacco growers, which is, of course, 
the subject of a number of amendments that may come on this bill; we 
are also the home of bourbon. If this kind of whiskey is not made in 
Kentucky, it cannot be called bourbon. Let me suggest that there are no 
industries--and I checked with the Finance Committee staff--that have 
been singled out by law and, as a result of being singled out, are not 
allowed to deduct their expenses for advertising. So this would be a 
first.
  To begin with, as a matter of tax policy, certain kinds of legal 
industries are not allowed to deduct their advertising, and others are. 
There is also--while we are thinking of both cigarettes and alcohol--
another important distinction. There is no argument that misuse of 
alcohol is a problem in this country. As a Senator from a tobacco-
producing State, I never make the argument that smoking cigarettes is 
good for you. Obviously, it isn't. But there are many in the medical 
profession who would say that the consumption of alcohol, if used 
properly--properly--is actually good for you. I am not a physician, I 
can't make that argument, but there is a growing argument being made by 
many in the medical community that a certain amount of alcohol, 
properly used, is actually good for you health, not bad for your 
health.
  So we have here a legal product, Mr. President, which, arguably, if 
properly used, might actually be good for you, which the distinguished 
Senator from West Virginia, I gather, is saying when misused, of 
course, is clearly a terrible thing and a disaster not only for the 
person misusing it, but for others who may be affected by that, and 
that because a product may be misused, the Government should step in 
and say: Your advertising is not allowed.
  Regardless of how you may feel about this----
  Mr. BYRD. Will the Senator yield?
  Mr. McCONNELL. Yes.
  Mr. BYRD. For a correction only. My amendment does not say your 
advertising will not be allowed. I am not saying that at all. The 
alcohol industry may continue to advertise. I am just saying, let's 
stop the subsidization of that advertising, the subsidization by the 
taxpayers.
  Mr. McCONNELL. I thank the Senator. I think I did understand his

[[Page S6446]]

amendment to disallow a deductibility for advertising, which would make 
this the only industry of which the Finance Committee is aware where 
such deductibility would be disallowed.
  Aside from my home State and the product, which, if properly used, 
might actually be good for you, I wonder if my friend from West 
Virginia doesn't share my concern that once we go in this direction, we 
might find other activities that some may find offensive being subject 
to the same kinds of efforts to disallow deductibility for certain 
kinds of business expenses.
  I think, for example, West Virginia and Kentucky used to trade back 
and forth in terms of coal production. One year West Virginia would be 
first; the next year Kentucky would be the first. Alas, neither are 
first anymore. Wyoming is. But there are many Americans who think, as a 
result of the burning of coal, that the area is polluted and that, as a 
result of that, people contract lung problems. In fact, there is an 
initiative by the Clinton administration just announced this week which 
the Senator from West Virginia and I both have serious reservations 
about designed to cut down on air pollution--so the argument goes--so 
there will be less lung disease.
  I wonder, if we go down this path of trying to pick out which 
industries' deductions for certain kinds of business expenses are to be 
allowed or not allowed based upon our judgment about what is harmful to 
the public, whether or not somebody might come in and say, ``Well, we 
shouldn't allow production costs associated with the mining of coal to 
be deductible because, after all, the burning of coal leads to the 
pollution of the air, which then leads to lung disease, which then 
leads to death.''
  I just am concerned that this is a step in the wrong direction. I 
understand fully the concerns of the Senator from West Virginia, and I 
share them. I think the use of alcohol leads to a great deal of 
tragedy.
  But I hope we will not single out this legal industry producing a 
product, which, if properly used, many people in the medical field feel 
is actually good for you, for this kind of selective treatment on 
deductibility.
  Finally, let me say that I am not an expert on the budget deal. But 
it is clear that there is a lot of momentum in this body to hold the 
deal together, and this is clearly not part of the budget deal.
  I hope that the proposal will not be approved, in all due respect to 
my good friend and colleague from West Virginia. I hope this would not 
become part of the measure before us.
  I yield the floor.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, may I say that I fully understand the 
economic impact of the tobacco industry on the State of the 
distinguished Senator who has just spoken. West Virginia grows good 
tobacco crops as well, and the income from those tobacco crops 
certainly impact upon many families in many counties of West Virginia. 
We are talking about here, though, a product that results in the 
maiming and in the killing of people--innocent men, women, and 
children.
  The distinguished Senator from Kentucky mentions the carbon dioxide 
emissions and other greenhouse gas emissions and possible implications 
of those emissions on health. People who breathe that air may well, 
indeed, suffer an adverse impact on their health. But they don't go out 
and maim. They don't go out and drive an automobile, lose their proper 
judgment, and end up killing innocent people. They do not go home and 
abuse their spouses if they smoke cigarettes or if they breathe air 
blown from them. They don't go home and abuse their children. They 
don't go home and assault and batter the other members of their family.
  I am talking about a product that we all know--it is not just this 
Senator's opinion. We all know when we read the daily newspapers about 
the effects of drinking and driving. We all read the newspapers in the 
spring following the graduation exercises at high schools, and we read, 
with horror, the stories of a few young people who get into an 
automobile and wrap that automobile around a telephone pole and they 
are all killed or maimed--maimed for life.
  That is what we are talking about. I am not talking about singling 
out an industry. I am talking about an industry that creates a product 
that is hurtful--not just hurtful to the person who uses it, but 
endangers, as I said already, the lives of others. We all know that.
  But I do appreciate the fact that the Senator is from Kentucky, and I 
respect him for that, and I respect his viewpoint and count him and his 
fellow Kentuckians as good neighbors.
  I yield the floor.
  Mr. ROTH. How much time would the Senator from Montana like?
  Mr. BURNS. Probably no more than 5 minutes.
  Mr. ROTH. I yield 5 minutes to the Senator from Montana.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BURNS. I thank my friend from Delaware.
  Mr. President, no one on this floor makes his case with such passion 
as my friend from West Virginia. We have a couple of things in common 
that we will not go into here. But I also know from where he comes. And 
when you start talking about this issue of singling out something, then 
we have to look at probably the real facts.
  First, there is the presumption in this amendment that somehow the 
advertising is evil or bad, or that it wreaks health problems on the 
American people. There is no question in anybody's mind across this 
land that the abuse of alcohol is one of our greatest problems--no 
doubt. Yet, there is no scientific evidence that would even suggest the 
casual relationship between advertising and abuse.
  In order to get to the root of the problem of alcoholism and all of 
the problems that it brings, study after study after study has been 
made in the relationship of advertising. In fact, during the 1980's, 
when the advertising for alcohol products was increasing, actual 
consumption per capita actually was decreasing. So not only does 
advertising not impact abuse, it doesn't even impact the overall 
consumption.
  Singling out a product is not, I don't think, what fair tax law is 
about.
  So let's be upfront about it, because I am familiar with the 
broadcast industry. It has economic impacts on small business. It has 
economic impacts. And once we start singling out products, do we start 
talking about red meat, eggs, or sugar? Where do we draw the line? The 
impact it might have on the national pastime? We could say, ``OK, we 
don't need it in the broadcasting industry. We can all pay for pay-per-
view''--the impact on an industry within itself. And the list goes on 
and on trying to explain to our constituents why different things 
happen and cost more, because there is a decrease in advertising 
support in free television. That also brings us our weather, our farm 
reports, our news, our emergency conditions. All of these things that 
are supported by free over-the-air broadcasts will be impacted if this 
amendment is successful.
  The industry has taken steps to limit or try to curb the abuse that 
alcohol has on a person or individual. There is no doubt about it. And 
in some areas some would say it is even working.
  I know that all of us want a tax cut. All of us want a balanced 
budget. But to single out and start limiting an ad tax or deductibility 
for legal products is not the right approach. It is not the right 
approach--not on a legal product.
  So I urge my colleagues to oppose this. It is unwarranted. I think it 
is unwise. And I am not real sure, it might have some constitutional 
overtones because advertising is still freedom of speech. It cannot be 
treated differently than any other form.
  The Senator from West Virginia makes a point. It is the abuse of the 
product. The advertising has very little to do with the abuse of the 
product.
  Thank you, and I urge the defeat of this amendment.
  I yield the floor.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, the Senator talks about red meat, eggs, and 
sugar. The Honorable Senator is my friend. Who ever heard of anybody 
eating red meat, eggs, and sugar, and getting out in the car and having 
that car plunge into a tree, weave all across the road, and kill and 
maim other people? Red meat doesn't cause an individual to drive drunk 
and get in the car and

[[Page S6447]]

drive all over the highway. Eggs and sugar don't do that in their form 
as eggs and sugar, in their natural form.
  The Senator also, I think, made reference to the Federal Trade 
Commission in 1985, which found ``no reliable basis to conclude that 
alcohol advertising significantly affects consumption, let alone 
abuse.'' Well, let's see what the conclusions are from the effects of 
the mass media on the use and abuse of alcohol.

  The National Institute of Alcohol Abuse and Alcoholism, U.S. 
Department of Health and Human Services, Research Monograph-28, 1995:

       [The] preponderance of the evidence indicates that alcohol 
     advertising stimulates higher consumption of alcohol by both 
     adults and adolescents . . . It appears to be a contributing 
     factor that increases drinking to a modest degree rather than 
     being a major determinant. (Dr. Charles Adkins, Department of 
     Communications, Michigan State University.)

  Now I shall quote Dr. Sally Casswell, Alcohol and Public Health 
Research Unit, School of Medicine, University of Aukland:

       [T]here is sufficient evidence to say that alcohol 
     advertising is likely to be a contributing factor to overall 
     consumption and other alcohol-related problems in the long 
     term.

  Now quoting Dr. Joel Grube, Prevention Research Center:

       [A]lcohol advertising can influence children, particularly 
     their beliefs about alcohol and, indirectly, their intentions 
     to drink as adults.

  Finally, let me quote Dr. Esther Thorson, School of Journalism, 
University of Missouri:

       If research were designed to take account of what the 
     advertiser is trying to do and if it examined the 
     relationship between the specific structure of the message 
     and the individual or group for whom that message is 
     targeted, investigators probably would find ``whopping 
     effects''.

  Mr. President, I appreciate the views that have been expressed by my 
friend from Montana and, as I have already indicated, by my friend from 
Kentucky. I appreciate their views, and I respect their views.
  Mr. President, I don't think there should be any doubts in the minds 
of any Senator or any person who is viewing this Chamber via that 
electronic eye that the drinking of alcohol affects the judgment of 
people, and that there are many other costs that are not tangible, that 
cannot be translated into dollars and cents-- the cost of lost 
productivity, the cost of broken homes, the cost of children abused. 
And I could go on.

  I have made my case, and I ask for the yeas and nays on my amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. BYRD. I yield back the balance of my time.
  The PRESIDING OFFICER. The Senator from Delaware has the remaining 
time.
  Mr. ROTH. Mr. President, I yield back the remainder of my time, and I 
make the point of order that the pending amendment is not germane to 
the provisions of the reconciliation measure and I therefore raise a 
point of order against the amendment under section 305(b)(2) of the 
Budget Act.
  Mr. BYRD. Mr. President, I move to waive the point of order and ask 
for the yeas and nays on my motion.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. There is an hour equally divided on the 
motion.
  Mr. BYRD. Mr. President, I yield back my time.
  Mr. ROTH. Mr. President, I yield back the balance of my time.


                 Vote on Motion to Waive the Budget Act

  The PRESIDING OFFICER. The question is on agreeing to the motion to 
waive. The yeas and nays have been ordered. The clerk will call the 
roll.
  The bill clerk called the roll.
  Mr. McCAIN (when his name was called). Present.
  Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts], 
is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The yeas and nays resulted--yeas 12, nays 86, as follows:

                      [Rollcall Vote No. 136 Leg.]

                                YEAS--12

     Bumpers
     Byrd
     Cleland
     DeWine
     Glenn
     Hatch
     Helms
     Kennedy
     Rockefeller
     Sarbanes
     Thurmond
     Wellstone

                                NAYS--86

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bryan
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     Dodd
     Domenici
     Dorgan
     Durbin
     Enzi
     Faircloth
     Feingold
     Feinstein
     Ford
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Torricelli
     Warner
     Wyden

                        ANSWERED ``PRESENT''--1

       
     McCain
       

                             NOT VOTING--1

       
     Roberts
       
  The PRESIDING OFFICER. If there are no other Senators wishing to 
vote, the yeas are 12, the nays are 86. One Senator responded present.
  Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. The point of order is 
sustained and the amendment falls.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I move to reconsider the vote.
  Mr. NICKLES. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.


                         Privilege Of The Floor

  Mr. ROTH. Mr. President, I ask unanimous consent that Barbara Angus 
and Mel Schwarz of the staff of the Joint Committee on Taxation be 
granted full floor access during consideration of S. 949.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Several Senators addressed the chair.
  The PRESIDING OFFICER. The Senator from Delaware has the floor.
  Mr. McCAIN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Delaware has the floor.


                      Point of Order--Section 602

  Mr. ROTH. Mr. President, I move to withdraw the request for a waiver 
of the point of order on section 602 of S. 949.
  The PRESIDING OFFICER. Is there objection?
  Mr. BOND. Mr. President, reserving the right to object, what is the 
section?
  Mr. KERRY. What is it? Mr. President, I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The Senator from Delaware has the floor. Does 
he yield?
  Mr. BROWNBACK. Will the Senator from Delaware explain the section?
  Mr. ROTH. Mr. President, this was a motion to strike section 602, 
``Incentives conditioned on other DC reform.'' This part deals with:

       Amendments made by section 701 shall not take effect unless 
     an entity known as the Economic Development Corporation is 
     created by Federal law in 1997 as part of the District of 
     Columbia government.

  Senator Brownback made a point of order on this matter and I, in 
turn, asked for a waiver. We are now asking that the waiver be 
withdrawn, so that the point of order will lie.
  The PRESIDING OFFICER. Is there objection to withdrawing the waiver?
  Mr. KERRY addressed the Chair.
  Mr. FORD. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Delaware does not lose the 
floor.
  Is there objection?
  Mr. KERRY. Reserving the right to object, Mr. President.
  Mr. President, I will not object.
  Mr. ROTH. Mr. President, I move to withdraw my waiver of the point of 
order.

[[Page S6448]]

  The PRESIDING OFFICER. Is there an objection to moving to withdraw 
the waiver.
  Mr. BROWNBACK. Reserving the right to object, do I understand the 
chairman to say now that you are removing your waiver to the point of 
order that I have raised?
  Mr. ROTH. Yes.
  Mr. BROWNBACK. OK. So the point of order would lie.
  Mr. ROTH. Correct.
  Mr. BROWNBACK. I thank the Senator. I just needed that clarification.
  Mr. HARKIN addressed the Chair.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Is the Senator reserving the right to object?
  Mr. ROTH. Mr. President, I make a point of order that a quorum is not 
present.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered. The point of order is withdrawn.
  The motion to waive the Budget Act was withdrawn.
  Mr. DURBIN addressed the Chair.
  Mr. ROTH. Mr. President, please.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. I make a point of order a quorum is not present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  Mr. KERRY. I object.
  The PRESIDING OFFICER. Objection is heard.
  The assistant legislative clerk continued with the call of the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Mr. President, I ask unanimous consent that the following 
Senators, in the order listed, be able to bring up their amendments, 
the time for each of the amendments be listed and divided equally 
between the two sides. The first would be Senator Durbin for 20 
minutes, to be equally divided; Senator Nickles 10 minutes, to be 
equally divided; Senator Gramm 20 minutes to be equally divided; 
Senator Kerry of Massachusetts 20 minutes equally divided, and----
  Mr. FORD. Reserving the right to object, Mr. President. Reserving the 
right to object.
  You have in there Senator Durbin's amendment for, what, 20 minutes 
equally divided?
  Mr. ROTH. That is correct.
  Mr. FORD. Mr. President, I want to object to that one. And you can 
jerk it out if you want to, because you have rolled over the tobacco 
industry and my farmers long enough. And I don't intend to sit here 
without a fight for the additional 11 cents you want to put on after 
you have already put on 20 cents.
  So if you want to change that one, that is fine; otherwise, Mr. 
President, I will have to object.
  Mr. GRAMM. Take it off.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. ROTH. I yield for a comment.
  Mr. KERRY. Can I suggest, Mr. President, the following. We are going 
to have to resolve that issue. We are obviously not going to resolve it 
immediately if an objection is going to be lodged.
  So I recommend that we put in line reserving the time that the 
Senator has agreed to already cut it down to, in the event we reach 
some agreement that it will be able to be debated, absent that, that we 
set it aside temporarily with the understanding we take the order as 
you have described it.
  Again, let me just ask, if I could, Mr. President, how much time 
remains for each side so we know we are dividing this properly?
  The PRESIDING OFFICER. The Senator from Illinois has 43 minutes on 
his amendment.
  Mr. KERRY. I am referring to both sides total on the bill.
  The PRESIDING OFFICER. The majority has 1 hour and 35 minutes; the 
minority has 1 hour and 18 minutes.
  Mr. KERRY. Mr. President, I ask then unanimous consent that added to 
that list, for the minority side, the order be as follows: Senator 
Dodd, Senator Landrieu, Senator Torricelli, Senator Harkin, Senator 
Levin, Senator Bingaman, Senator Wellstone, and Senator Kohl, each of 
them to have 10 minutes on our side.
  Mr. FORD. Mr. President, reserving the right to object. Reserving the 
right to object.
  Mr. ROTH. Mr. President, it is obvious we are not close to unanimous 
consent as to how to proceed, so I think we will just have to go to 
regular order and call upon Senator Durbin to bring up his amendment.
  Mr. DURBIN addressed the Chair.
  The PRESIDING OFFICER. Does the Senator from Delaware withdraw his 
request?
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  Mr. DURBIN. Mr. President, what is the pending business before the 
Senate?
  The PRESIDING OFFICER. The pending question is the amendment of the 
Senator from Illinois.
  Mr. DURBIN. I seek the regular order.
  The PRESIDING OFFICER. The Senator from Illinois and the Senator from 
Delaware control the time.
  The PRESIDING OFFICER. Who yields time?
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. DURBIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. I seek recognition on this amendment.
  I want to make it clear to my colleagues, I am more than willing to 
accommodate on the remainder of the time. As I understand it, there are 
about 42 minutes left on this amendment. I do not need all that time. I 
am more than happy to reduce it equally on both sides and allocate the 
remaining time on this amendment, any time left before the Senate, 
among the Members. And I hope that there is no objection to that. But 
if there is such an objection, I have no other recourse but to proceed 
on this amendment. And I now have the floor.
  I yield for the purpose of a question to the Senator from Oklahoma.
  Mr. NICKLES. Will the Senator yield, not for the purpose of a 
question, but maybe for a suggestion?
  Mr. DURBIN. Yes.
  Mr. NICKLES. That we go ahead and debate the Senator's amendment 
until he is satisfied with it, his cosponsors are satisfied with it, 
and then maybe at that time you can set it aside, and we will go ahead 
and vote on the other amendments, and you then have had your debate, 
and we will have a vote on yours somewhere in the pecking order.
  Mr. DURBIN. I thank the Senator.
  It is the only way I can proceed at this point since there is no 
unanimous consent that is going to be agreed to.
  Mr. KERRY. Mr. President, if the Senator would yield for a moment.
  Mr. DURBIN. I yield to the Senator from Massachusetts for a question.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. I believe the Senator from Kentucky will agree to a time. 
I believe the Senator would agree to a time. And I think, in fairness 
to all the other Senators, that if we could try to establish some kind 
of order, I think that everybody will benefit that much more. I think 
we were very close to having that arranged, if the Senator from 
Oklahoma would just forbear for a moment.
  Mr. ROTH. What is the order, Mr. President?
  The PRESIDING OFFICER. The Senator from Illinois has the floor.
  Mr. DURBIN. Mr. President, I can proceed on this amendment. And if 
Members can work out some accommodation, I will do my best to 
abbreviate this debate and give everyone a chance, because I know many 
people waited.
  Mr. President, this--
  Mr. KERRY. Would the Senator yield for a question?
  Mr. DURBIN. Yes.
  Mr. KERRY. Can we get a sense for what the Senator from Illinois 
means about abbreviating this? Is there some period of time?

[[Page S6449]]

  Mr. DURBIN. Yes. The Senator is going to try to do it in the 20 
minutes that was in the UC request, allocating an equal amount of time 
to the Senator from Missouri.
  Mr. KERRY. Mr. President, if the Senator will yield just for the 
purposes of asking something.
  Mr. DURBIN. Yes.
  Mr. KERRY. Will the Senator from Kentucky agree to a 20-minute time 
period on the Senator from Illinois' amendment?
  Mr. FORD. Mr. President, since it has been laid on me--and I do not 
mind that at all. I have always heard when you tear the hide off it 
comes back--you are tougher. And I will agree to the 20 minutes. I do 
not want to, but I will agree to it.
  All I hear for the last week is banging my State and my farmers and 
my tobacco. And I think I ought to have an opportunity to defend myself 
and my people. If I am going to be limited to 10 minutes, you know, I 
am not sure that my colleague and I, with 5 minutes each, can do it 
adequately. We can do as well as anybody else in 5 minutes.
  But I hope they would give some consideration to it.
  Mr. President, I will agree to the 20 minutes equally divided, since 
I have used 5.
  Mr. KERRY. I thank the Senator.
  Mr. DURBIN. I want to make certain, Mr. President, that I understand. 
Is this time being taken from the time allocated on my position on the 
amendment?
  The PRESIDING OFFICER. Time is being charged to the Senator from 
Illinois.
  Mr. DURBIN. I hope we can reach agreement quickly then. And I yield 
for the purpose of a question to the Senator from Delaware. I believe 
the chairman has a suggestion.
  Mr. ROTH. I suggest that we proceed with my proposal, Senator Durbin 
having 20 minutes equally divided; Senator Nickles 10 minutes divided; 
Senator Gramm 20 minutes divided; and then Senator Kerry of 
Massachusetts 20 minutes divided.
  Mr. DORGAN. Reserving the right to object, Mr. President.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Reserving the right to object, and I will not object, but 
I do want at this point to try to understand the circumstances.
  When the time has expired on this bill--that will occur I guess in an 
hour and a half or 2 hours, less than 2 hours--I am wondering what the 
intentions of the chairman and the ranking member are with respect to 
further proceedings on the bill.
  Will we cast record votes this evening, for example, on the Durbin 
amendment? How many additional record votes this evening? How long will 
we be in session this evening? And when do we intend to begin tomorrow, 
and with how many amendments?
  Mr. ROTH. It is the intent, I say to the Senator from North Dakota, 
that when the 10 hours expires today, to go out until tomorrow morning, 
at which time the amendments can be offered and voted upon.
  Mr. DORGAN. Further reserving the right to object, is the intent of 
the chairman to have the additional recorded votes, for example on the 
Durbin amendment?
  Mr. ROTH. It is unclear at this time. I urge that we proceed, let the 
debate proceed, and we can work out the other details forthwith.
  I move the adoption of my unanimous consent request.
  Mr. KENNEDY. Reserving the right to object.
  Mr. President, like many others here, I would like to just be able to 
get a short period of time. To be able to get on the early part of that 
queue, I would be glad. But I have an amendment with regard to tobacco 
tax. So I wanted to just make sure that we are going to even be able to 
discuss this or at least have some idea where we are to have that, too.
  Mr. ROTH. Mr. President, in order to get things moving, let us 
proceed. Regular order. I urge Senator Durbin to proceed to debate his 
amendment, and we can try to work out things.
  Mr. KERRY. Mr. President, if I could just answer my senior colleague.
  The PRESIDING OFFICER. The Senator from Illinois has the floor.
  Mr. DURBIN. I am going to proceed. I hope that my colleagues will 
meet and discuss UC's, and Senator Bond and I would like to explain an 
important amendment.
  Mr. FORD. Are we on 20?
  Mr. DURBIN. I do not think we have any agreement at this moment.
  Mr. KERRY. Would the Senator yield for one moment? I think we can get 
this locked in place.
  Mr. DURBIN. I yield only for a question.
  Mr. KERRY. Mr. President, will the Senator permit the Chair to 
hopefully rule on the unanimous-consent request that was proposed, 
during which time we will have whatever Democrat time, whatever time on 
this side of the aisle that remains, divided equally among everybody 
who has an amendment so that no Senator's preference goes over another, 
just divide it equally?
  Mr. DURBIN. I say to my colleague from Massachusetts, I would be 
happy to do that, so long as I do not yield my right to the floor in 
the process.
  Mr. ROTH. Mr. President, I move the adoption of my unanimous consent.
  Mr. KENNEDY. Mr. President, how much time would remain at the end? I 
am glad to divide it all up with my colleague, but how much time 
remains?
  Mr. ROTH. Mr. President, I have been going around in a circle about 
10 times now. I think the best thing to do is to let the Senator from 
Illinois proceed with the debate of his amendment, and we can try to 
work out further agreements subsequently.
  The PRESIDING OFFICER. The Senator from Illinois has the floor.
  Mr. DURBIN. Thank you, Mr. President.


                           Amendment No. 519

  Mr. DURBIN. Mr. President, this amendment was offered last night. It 
is an amendment which I think most Members are conversant with because 
it is not a new issue. This is an issue which has been literally before 
Congress for almost 50 years.
  It is an issue of rank discrimination. It is an issue of unfairness. 
It is an issue of inequality. And it goes to the heart of protecting 
American families.
  The issue at hand is the deductibility of health insurance premiums.
  Those Americans fortunate enough to work for corporations, employees 
and management, enjoy a 100 percent deductibility of all health 
insurance premiums. I think that is good policy. It encourages health 
insurance protection. It protects families.
  If you happen to be one of the 23 million Americans who are self-
employed and you buy health insurance for your family, your tax 
deductibility is 40 percent. What does that mean? It means, 
unfortunately, a higher percentage of self-employed people and their 
families are uninsured. It means that the children, of course, of these 
self-employed do not have health insurance protection, and it basically 
means a discrimination in our Tax Code which should have been removed 
long ago.
  There are those who have argued for gradualism. Let us very, very 
slowly, in a glacial-like pace reach the day when we have equality and 
parity, 100 percent deduction for all Americans.
  I am happy to be joined by my colleague from Missouri, Senator Kit 
Bond, and also my other colleagues who have said that they think as I 
do, that it is time for us to end this inequality and to give real 
parity and fairness so that both the self-employed and those working 
for other businesses have the same opportunity for 100 percent tax 
deduction.
  I ask unanimous consent Senators Bond, Dorgan Daschle, Harkin, Boxer, 
Mikulski and Johnson be added as cosponsors of my amendment No. 519.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Let me say at this point, too, it is easy to come before 
this body and to propose new tax benefits. We know the difficult part, 
the offsets--how do you pay for them?
  I have come up with a means of paying for this which I think you can 
detect has some controversy attached to it, but I think it is 
reasonable. It would impose an additional 11-cent-per-package tax on 
cigarettes sold in America and a parallel percentage increase on spit 
tobacco and snuff.
  Now, the bill proposed by the Senate Finance Committee already raised 
the Federal tax on tobacco and cigarettes, for example, from 24 cents 
to 44 cents. This bill would add an additional 11 cents. Make no 
mistake, it is a tax. For

[[Page S6450]]

those who have told me, as I have spoken to them, ``Oh, I never vote to 
increase the tax,'' I remind you if you are voting for the Senate 
Finance Committee bill, you are voting for an increase in this very 
same tax.
  I ask you to consider whether or not it is worth 11 cents on a 
package of cigarettes to extend this kind of protection to over 20 
million Americans. I think it is. I hope you will agree with me.
  If we do not make this move this evening, if we do not finally grasp 
this opportunity, seize this opportunity and increase the deductibility 
of this health insurance for self-employed, they will languish for 8, 
9, or 10 years before ever approximating or reaching parity. That is 
not fair. It is not fair to the self-employed. It is not fair to the 
Americans who are disadvantaged by this provision in the Tax Code.
  I might also add that many of my colleagues are interested in small 
business. They believe, as I do that small business is the real engine 
of economic growth in this country. One of the largest associations of 
small businesses is the National Federation of Independent Businesses, 
over 600,000 businesses. When they surveyed their members nationwide, 
they learned last year that the No. 1 issue--the No. 1 issue--on the 
minds of their members was the deductibility of health insurance. 
Business Week magazine recently noted that this was one of the two top 
obstacles to success for many small businesses. So if you want to 
encourage small business and the creation of jobs, I urge you to 
support this amendment.
  Let me speak for a moment about this tobacco tax. I know that my 
colleague and friend from the State of Kentucky feels very passionately 
about this issue. I might tell him that I do as well. I will tell you 
what will occur if you increase the cost of tobacco products. Children 
will be less inclined to buy them. As these products become more 
expensive, children cannot afford them. It is a fact that has been 
proven over and again. It was recently shown just a few years ago in 
Canada when they had a dramatic increase in their tobacco tax. So we 
know that by increasing this tax by 11 cents, we end up making over 20 
million Americans who are self-employed, give them a position of 
fairness when it comes to tax treatment, and we reduce the likelihood 
that children will end up using these tobacco products.
  Now I know there will be a lot said about tobacco farmers in 
opposition to my amendment. I want to make this a matter of record. I 
have said from the beginning I am prepared to work with those Members 
who want to help transition tobacco farmers into other crops and other 
livelihoods. I believe that is the wave of the future and it should be 
part of any comprehensive change in tobacco policy.
  I will conclude and then defer to my colleague from Missouri. An 
estimated 4\1/2\ million American children and teenagers smoke 
cigarettes and another million use smokeless tobacco. Every 30 seconds 
in America a child smokes for the first time--3,000 a day--and a third 
of them--1,000--will die with this addiction to nicotine. And teenage 
smoking has risen by nearly 50 percent since 1991.
  So I say to my colleagues, I think this is a balanced approach. It 
helps those who truly deserve it. It says to the tobacco industry, we 
will make your product a little more expensive and take it out of the 
hands of children. This is a reality. If you look at the State taxes 
around the United States, some of them range as high as $1 a package 
and they are going up. The States understand this is a source of 
revenue which is a reasonable source to turn to for legitimate reasons. 
We should turn to the source of revenue, turn to it this evening.
  I yield for purposes of debate, but do not yield the floor, to my 
colleague from Missouri, Senator Bond.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Missouri.
  How much time is yielded?
  Mr. DURBIN. Five minutes.
  Mr. BOND. Mr. President, I thank my distinguished colleague and 
neighbor from Illinois. I commend him for his perseverance in being 
able to hold on to the floor. These are very difficult times and this 
is a very important amendment. I congratulate him on staying with it so 
we can bring this up and debate it while we have the attention of this 
body.
  I believe my experience in the State of Missouri is probably like the 
experience that most of us have had in our own States. As we travel 
around and talk to farmers, to people involved in small business, to 
truck drivers, day care operators, people who work for themselves, they 
ask an unanswerable question: Why is it that I can only deduct, now, 40 
percent of what I pay in health insurance premiums for myself and my 
family when my neighbor next door who works for a large corporation, or 
in the country when my neighbor next door who works for a large 
corporate farm gets his or her health care paid and the employer 
deducts 100-percent of what they pay and they do not have to include 
any of the health insurance on their income tax? Why does the self-
employed person only get to deduct 40 percent?
  Frankly, there is no answer, Mr. President. There is a gross inequity 
in this system. It is an inequity that has been pointed out by every 
farm organization in my State time and time again. It has been pointed 
out by organizations representing small business.
  At the conclusion of my remarks, I will enter in the Record a letter 
from the NFIB of June 26 expressing their strong support for the 100-
percent deductibility for the amounts paid for health insurance for 
self-employed business owners.
  This is a matter of equity. This is a matter that is absolutely 
essential to see that the 5.1 million self-employed individuals in the 
country today have health insurance and the 1.3 million children who do 
not have health insurance and who live in a family headed by an 
entrepreneur, a self-employed business owner.
  This, to me, is not only an inequity, but it is a very bad policy 
outcome. We are talking about the health of children. One of the best 
things we can do is provide 100 percent deductibility.
  Mr. President, the reason I am here joining with my colleague from 
Illinois, we have pointed out in this tax relief bill, this tax 
reduction bill that is before the Senate now, with $85 billion in 
taxes, we have pointed out that this is one of the top priorities of 
small business and of farmers, of the struggling working middle class 
of America.
  Before the debate began, I circulated a letter signed by 52 of my 
colleagues, in addition, saying that this was important. Unfortunately, 
the three top small business priorities were excluded--the self-
employed tax deduction for health care, the home office business 
deduction, and the independent contractor. This measure, unfortunately, 
is not in either the House or the Senate bill. We feel it is vitally 
important to put it there. I congratulate my colleague from Illinois in 
choosing the tobacco tax. Tobacco taxes are being raised in this bill. 
There is no more important place to put those taxes than this, 
guaranteeing health for self-employed and their children.
  In addition to the figures that my colleague from Illinois stated, 
about 3,000 children becoming regular smokers every day, last week when 
Senator Bumpers and I introduced a measure to encourage pregnant women 
to stop smoking, I pointed out that while tobacco use among most 
pregnant women is declining, tobacco usage among teenage pregnant women 
is on the increase. In my State it is 50 percent above the national 
average, and not surprisingly our birth-defect rate is 50 percent above 
the nationwide average. This will have an impact on discouraging 
teenagers from starting to smoke. It will help encourage pregnant 
women, particularly pregnant teenagers, to stop smoking.
  Mr. President, this is an important matter of equity. It is a matter 
of health care policy. I urge my colleagues to support what I know will 
be a required budget waiver so that this could be included.
  Before I yield the floor, I ask unanimous consent to have printed in 
the Record the letter of June 26 from the vice president for Federal 
Government relations of NFIB, Dan Danner, saying, ``The self-employed 
have an extremely difficult time purchasing health insurance. This is 
why 3 million self-employed business owners have no health insurance, 
nor do 1.3 million of their children.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


[[Page S6451]]


                                            National Federation of


                                         Independent Business,

                                                    June 26, 1997.
     Hon. Christopher Bond,
     U.S. Senate, Washington, DC.
       Dear Senator Bond: On behalf of the 600,000 members of the 
     National Federation of Independent Business, I am writing to 
     express our strong support for 100% deductibility of the 
     amounts paid for health insurance for self-employed business 
     owners.
       The CEOs of large corporations can deduct 100 percent of 
     their health care costs, while the self-employed can only 
     currently deduct 40 percent of their health care costs. This 
     is simply not fair. The Kassebaum/Kennedy health care law was 
     a good first step, but still does not give the self-employed 
     the fairness they deserve in that the law only allows the 
     self-employed to deduct 80 percent of their health care costs 
     by the year 2006.
       The self-employed have an extremely difficult time 
     purchasing health insurance. This is why 3 million self-
     employed business owners currently have no health insurance, 
     nor do 1.3 million of their children. Full deductibility will 
     help make health insurance more affordable for these small 
     business owners. Therefore, the self-employed need full 
     deductibility now.
           Sincerely,

                                                   Dan Danner,

                                                   Vice President,
                                   Federal Governmental Relations.

  Mr. BOND. I yield the floor.
  Mr. NICKLES. Mr. President, would the Senator from Delaware give me 4 
minutes?
  Mr. ROTH. I yield 4 minutes to the Senator from Oklahoma.
  Mr. NICKLES. Mr. President, one, I want to ask my colleagues to vote 
no on the Durbin-Bond amendment and tell them I think I have a pretty 
good record--I heard the support of NFIB for deductibility for the 
self-employed. I used to be self-employed, so I support that.
  For my colleagues' information, I will be offering an amendment after 
the Durbin amendment, very soon, that will accelerate and allow self-
employed people to deduct a greater percentage for their health 
insurance at a much faster rate than now is under existing law. It does 
not go to 100 percent, but likewise we do not increase taxes another 10 
cents, which I think a lot of people, not just from tobacco States, are 
saying ``Wait, we are already increasing it 20 cents, almost doubling 
the tax, should we do another 10 cents?''
  I might mention the Finance Committee said we would stop at 20 cents. 
I do not think the Durbin amendment will become law. I want to let my 
colleagues know we will offer an amendment that will accelerate 
deductibility for the self-employed. We will be offering that 
subsequent to this so they can vote no on the Durbin amendment, vote 
yes on the amendment that Senator Hagel and I will be introducing 
momentarily that will give the self-employed a greater benefit for 
deducting their insurance.
  I yield the floor.
  Mr. ROTH. I am pleased to yield 5 minutes to the Senator.
  Mr. FORD. My other colleague will need some time, too. I thank the 
chairman.
  You know, Mr. President, this has been an interesting week. We had a 
negotiation with the attorneys general around the country, and the 
tobacco industry is stuck for almost $370 billion. The price of 
cigarettes go up. How much more do you want? And then the Finance 
Committee puts on 20 cents more, and that raises the price of 
cigarettes and smokeless tobacco. And now we want to put on 11 cents 
more. Why? To help the small businessman get a deductible on his health 
insurance?
  At the same time, you are putting 65,000 farm families out of work in 
my State. You say you are going to help. You may never get the bill to 
help. I think it is time to stop it. It is time we quit. My farmers 
have to survive. And we hear all the States have an excise tax. Well, 
we had a good many here in the past that would vote against any excise 
tax because they thought it all should go to the States. It is their 
prerogative. But when you add 20 cents onto the State, and you add 
another 11 cents onto the State, then you add 75 cents on, if you get 
the negotiated agreement out there, the income to the community and to 
the Federal Government are going to go straight down. They are playing 
with funny money, because the more you increase it, the less income you 
are going to have. When you increase the tax, the less income you are 
going to have. So now you say you have all this income coming in--you 
are playing with funny money.
  One other point, Mr. President. You talk about low income--59.5 
percent of this tax will come out of those who make less than $30,000 a 
year--$30,000 a year--and 34 percent of the money the Senator from 
Illinois and the Senator from Missouri want will come from those that 
make less than $15,000. Talk about the little man--you are talking away 
from the man that makes $15,000 and a man with a family that makes less 
than $30,000. You are going to take 60, 65 percent of that money from 
that group. What do they benefit? You put them out of business.
  I ask unanimous consent to have printed in the Record the Tax 
Foundation's analysis on where the cigarette tax and smokeless tax 
would come from and how many States would lose what money, and how many 
individuals of what financial income category would have to pay for 
this.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Bottom Line on Finance Committee's Proposed 20 cents Cigarette Excise 
       Hike: Bottom Income Earners Would Pick Up Most of the Tab

       Washington, D.C., June 20, 1997.--The Senate Finance 
     Committee' proposed 20 cents per pack addition to the current 
     24 cents federal cigarette excise could play havoc with 
     lower-income Americans' pocketbooks, according to an analysis 
     by the Tax Foundation.
       Tax Foundation Economist Patrick Fleenor says that, judging 
     by historic cigarette consumptions patterns, over a third of 
     the $15 billion that the Finance Committee hopes to bring in 
     over five years will be paid by those earning less than 
     $15,000 a year (see Chart 1). Another 25 percent of the total 
     revenues will be paid by Americans earning between $15,000 
     and $30,000. In all, those earning $30,000 or less would foot 
     about 60 percent of the total bill for the new tax.

CHART 1: NEW COLLECTIONS BY INCOME GROUP BASED ON FINANCE COMMITTEE'S 20
                       cents CIGARETTE EXCISE HIKE
------------------------------------------------------------------------
                                                                Share of
                                                     5-year       tax
              Adjusted gross income                   total      burden
                                                   (millions)  (percent)
------------------------------------------------------------------------
under $15,000....................................    $5,098.2       34.0
$15,000 under $30,000............................     3,819.9       25.5
$30,000 under $45,000............................     2,315.2       15.4
$45,000 under $60,000............................     1,318.8        8.8
$60,000 under $75,000............................       911.6        6.1
$75,000 under $115,000...........................       982.5        6.6
$115,000 under $300,000..........................       474.2        3.2
$300,000 and over................................        80.0        0.5
                                                  ----------------------
    Total........................................    15,000.0      100.0
------------------------------------------------------------------------
Source: Tax Foundation estimates based on data from IRS, Bureau of the
  Census, and Center for Disease Control.

       Juxtaposed to this, those earning $115,000 or more will 
     account for less than four percent of the additional tax 
     revenues.
       ``Whether the Finance Committee recognizes it or not, the 
     proposed tax will really make a dent in the budgets of 
     America's lower-income households,'' Mr. Fleenor stated.
       In a state by state comparison, California will bear the 
     single largest burden if the new tax is enacted, paying $1.16 
     billion to the U.S. Treasury over five years (see Chart 2). 
     The 10 states with the highest projected tax payments will 
     pay 50 percent of the overall tax increase, according to Mr. 
     Fleenor's calculations (see Chart 3).


Chart 2: New collections by State based on Finance Committee's 20 cents 
                  cigarette excise hike, 5-year total

             [Share of tax burden; in millions of dollars]

Alabama..........................................................$278.1
Alaska.............................................................35.0
Arizona...........................................................200.0
Arkansas..........................................................177.7
California......................................................1,155.5
Colorado..........................................................199.2
Connecticut.......................................................167.5
Delaware...........................................................57.7
Florida...........................................................852.0
Georgia...........................................................452.2
Hawaii.............................................................34.9
Idaho..............................................................56.3
Illinois..........................................................638.8
Indiana...........................................................501.8
Iowa..............................................................169.4
Kansas............................................................148.0
Kentucky..........................................................429.5
Louisiana.........................................................293.7
Maine..............................................................81.8
Maryland..........................................................251.2
Massachusetts.....................................................299.7
Michigan..........................................................507.3
Minnesota.........................................................246.5
Mississippi.......................................................183.3
Missouri..........................................................420.7
Montana............................................................48.8
Nebraska...........................................................92.1
Nevada.............................................................92.1
New Hampshire.....................................................115.6
New Jersey........................................................413.1
New Mexico.........................................................70.2
New York..........................................................829.5
North Carolina....................................................563.5
North Dakota.......................................................33.0
Ohio..............................................................801.8
Oklahoma..........................................................229.0
Oregon............................................................186.8
Pennsylvania......................................................743.4
Rhode Island.......................................................59.1
South Carolina....................................................258.1
South Dakota.......................................................45.7
Tennessee.........................................................413.7

[[Page S6452]]

Texas.............................................................880.9
Utah...............................................................62.9
Vermont............................................................46.0
Virginia..........................................................448.9
Washington........................................................229.7
West Virginia.....................................................135.8
Wisconsin.........................................................306.5
Wyoming............................................................34.7
District of Columbia...............................................21.5

Source: Tax Foundation estimates based on data from IRS, Bureau of the 
Census, and Centers for Disease Control.


   Chart 3: Top Ten State Contributors to Senate Finance Committee's 
                     20 cents Cigarette Excise Hike

1. California..................................................$1,155.5
2. Texas..........................................................880.9
3. Florida........................................................852.0
4. New York.......................................................829.5
5. Ohio...........................................................801.8
6. Pennsylvania...................................................743.4
7. Illinois.......................................................638.8
8. North Carolina.................................................563.5
9. Michigan.......................................................507.3
10. Indiana.......................................................501.8
                                                             __________
                                                             
    Total.......................................................7,474.5

Source: Tax Foundation estimates based on data from IRS, Bureau of the 
Census, and Centers for Disease Control.
       ``What's ironic about this tax,'' noted Tax Foundation 
     Executive Director J.D. Foster, ``is that, with over half of 
     it earmarked for healthcare costs for poor children, it 
     amounts to a case of the poor paying for new programs for the 
     poor.''
                                  ____


  New Tax Foundation Analyses Question Role of Excise Taxes in Sound 
                      Federal and State Tax Policy

       Washington, D.C., June 20, 1997.--Do excise taxes represent 
     good or bad tax policy? The Tax Foundation recently published 
     the first two in a series of five Background Papers focusing 
     on this and other questions relating to the role excise taxes 
     play in our economy.
       In ``Excise Taxes and Sound Tax Policy,'' Dr. John R. 
     McGowan, Associate Professor of Accounting at Saint Louis 
     University's School of Business, provides an overview of how 
     and why the federal excise system evolved.
       Excise taxes have always played a large role in the federal 
     government's revenue collections, forming the bulk of total 
     revenues in the early years of the republic.
       While excise taxes constitute under five percent of total 
     revenues today, the federal government still imposes excises 
     on a wide variety of goods and services, including gasoline 
     and diesel fuel, tobacco and alcohol products, airline 
     tickets, firearm sales and firearm dealers, heavy trucks and 
     trailers, large tires, coal, vaccines, fishing equipment, and 
     even bows and arrows. Federal excise receipts recently 
     approached $60 billion.
       Today, about 70 percent of excise revenues come from the 
     taxes on alcohol, tobacco, and gasoline and diesel fuel, says 
     Dr. McGowan. The accompanying charts shows that federal 
     excises on distilled spirits, beer, and wine, raised about 
     $7.2 billion in 1995, while the tobacco excise raised about 
     $5.9 billion, and gasoline and diesel fuel taxes raised over 
     $22.6 billion.
       Dr. McGowan concludes that while excise taxes are 
     relatively easy for governments to impose, they generally do 
     not represent sound tax policy. Excise taxes can introduce 
     significant amounts of inefficiencies into the economic 
     marketplace and create a net reduction of benefits for 
     consumers. Most significantly, excise taxes are widely 
     believed to be regressive and therefore contrary to long-held 
     concepts of fairness in the United States tax system.
       In ``The Use and Abuse of Excise Taxes,'' Dr. Dwight R. 
     Lee, of the University of Georgia, examined the 
     inefficiencies of the excise tax. While he acknowledged that 
     inefficiencies are inherent in any taxation, because taxes 
     distort the economic choices that people make, Dr. Lee 
     observed that the most efficient tax system minimizes this 
     type of distortion.
       Excise taxes, however, are conspicuously at odds with the 
     goal of reducing tax distortions, says Dr. Lee. They are the 
     most distorting of all taxes per dollar raised. Instead of 
     spreading the tax burden as neutrally as possible over a 
     broad tax base, excise taxes single out a few products for a 
     high and discriminatory tax burden. While obviously unfair to 
     the consumers of the taxed product, imposing or increasing 
     excise taxes to fund tax relief for other taxpayers only 
     exacerbates the problem.
       Excise taxes are sometimes proposed to fund specific 
     government spending programs, called ``earmarking.'' Only in 
     a very few situations--where the consumption of a product is 
     complementary to the use of some other good that cannot 
     easily be priced directly--can earmarked excise taxes be 
     efficient. But even here the efficiency of the excise tax 
     depends upon the revenues being unconditionally allocated to 
     the complementary use to reduce the cost of rent seeking. The 
     greater the rent seeking over the allocation of the revenues 
     from a potentially efficient excise tax, the less efficient 
     it is and the lower the efficient rate of taxation (under 
     reasonable assumptions about the relevant elasticity of 
     demand).
  Mr. FORD. Mr. President, let's be fair. We had a negotiated 
agreement. It wasn't good enough. That may be the floor. So here we 
come with 20 cents more, and then 11 cents more. I have 65,000 farm 
families that this legislation will put out of business. Oh, we are 
going to take care of them. Well, you take care of them, then I will 
talk about taxes. You take care of my farmers and I will talk about 
taxes after that. I will talk about how much you get from the tobacco 
industry. I will talk about how much you are going to do for this group 
or that group. So take care of my farmers, take care of my people. I 
have stood by and watched these people be run over long enough. Oh, you 
can come out here with crocodile tears. I can tell you all the sad 
stories. But small businessmen are small businessmen, and a small 
farmer is still a small farmer. And 69 percent of my farmers have 
another job. It becomes a husband, wife, and family occupation. You 
want to put them out of work.
  I understand smoking. I have been smoking for 54 years and I am still 
here, thank God. I understand smoking. My grandchildren don't smoke, 
and I understand all of that. But then, a while ago, we didn't put a 
little deductible, or eliminate the deductible on the distilled spirits 
industry--beer, wine, and distilled spirits. Here we have tobacco and 
you pile on and pile on and pile on.
  Mr. President, I hope my colleagues will do the best they can to help 
in this case. It is an additional tax. It is putting my people out of 
work. It is saying to children on the farm--children on the farm--that 
you are going to have less income next year. You are going to have less 
next year. Substitute another crop. That indicates that you don't know 
what tobacco brings, you don't know what corn brings, or what soybeans 
brings--$1,844 net profit for an acre of tobacco, and $100 from 
soybeans. You have to plant acres and acres and acres of soybeans and 
one acre of tobacco.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. FORD. I suppose it's time. I was sweating anyhow.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Kentucky, [Mr. McConnell].
  Mr. McCONNELL. Mr. President, if I were a Senator from any other 
State listening to this debate, I guess I would have to conclude that I 
don't have any tobacco growers. Cigarette smoking is obviously not good 
for your health. Why should I not vote for the Durbin-Bond amendment?
  Reason No. 1: We entered into a budget agreement and this breaks it 
wide open. There has been a lot of momentum in this Chamber over the 
last week to stick to the budget agreement. This is a deal breaker. It 
wasn't negotiated by the President and the leaders of the Republican 
Congress. It wasn't even voted on by the Senate Finance Committee.
  So the stake you have in this, I say to my colleagues, you will be 
voting to bust the budget deal wide open, in order to raise taxes on 
low-income Americans. What a great idea. This is supposed to be a 
package about lowering taxes by $85 billion, or close thereto, over the 
next 5 years, and a vote for the Durbin-Bond amendment turns it into a 
tax increase bill--a tax increase bill on the lowest income people in 
America. In fact, 60 percent of any tobacco tax increase will be borne 
by Americans making less than $30,000 a year. So you will be 
transforming this bill, which has been criticized by some downtown as 
somehow a benefit for the wealthy, into a major tax increase on the 
most vulnerable, low-income people in our society.
  Regardless of how you feel about tobacco, regardless about how you 
feel about smoking--I don't smoke and don't support it particularly; I 
think it is not good for you--it is a legal product. That isn't the 
issue here. Why in the world, in a bill designed to lower taxes, would 
we want to have a whopping tax increase on the lowest income people in 
America?
  My good friend from Missouri said it is a matter of equity. It sure 
is. What is equitable about it? We are singling out one industry and 
one socioeconomic group in America for a major tax increase in a bill 
designed to lower taxes on working American families. It absolutely 
distorts everything this tax reduction bill is supposed to be about. 
Obviously, it has an impact on my State. Senator Ford and I feel 
passionately about this. Maybe some product

[[Page S6453]]

in your State will be next. But this transforms this bill into a major 
tax increase on low-income Americans. I can't think of a worse 
direction to go in.
  Finally, let me say that it is estimated that it will cost our State 
of Kentucky 2,700 jobs, just like that. Clearly, that is a matter of 
major concern to us. But the consumers of cigarettes are all over 
America, not just in Kentucky, not just in North Carolina. They are, by 
and large, lower income people, who will continue to smoke after that, 
and you have just socked them with a major tax increase, Mr. President.
  I certainly hope my colleagues will not, A, break the budget deal 
and, B, have a whopping tax increase on low-income Americans.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from North 
Carolina.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized 
for 5 minutes.
  Mr. FAIRCLOTH. Mr. President, I don't know of a lot more that can be 
said on the subject. It has been very adequately and eloquently 
addressed by the two Senators from Kentucky. But we talk about equity 
and we talk about fairness, but the truth of it is that is not even in 
the vernacular of what we are saying here tonight. What we are doing is 
very simply this--I said it yesterday, I think, or the day before--they 
said it was a historic session. Yes, it is a historic session. We are 
destroying an industry that has served this country for 300-plus years, 
and we are simply wiping it out.
  Now, when you go to the 77,000 workers in North Carolina and say to 
them, your job is gone, your industry is gone, but the good news is 
that international air travel is cheaper for you--most of them haven't 
been out of the county. So that is what we are saying here.
  I don't doubt that the real interest here is to reduce and enable 
people to deduct their health insurance. I didn't notice that it was 
proposed to be paid for by any 10-cents-a-bushel tax on corn. And they 
go back to Illinois and Missouri and explain to the corn farmers there 
that we really have done you a great favor. No, it is on tobacco, which 
has been the whipping boy. Anybody in the Senate or in the Congress in 
the last year or two that had an ax that needed to be ground, they have 
come to the tobacco industry to grind it for them. That is very simply 
what happened. This is a source of money for whatever eleemosynary or 
good feeling or cause we have. This is a source of money.
  As has been said earlier, enough is enough. I hope colleagues in the 
Senate will recognize that this has gone far enough. It breaks a budget 
agreement, and it is time to stop it.
  I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from North Carolina, Mr. Helms.
  The PRESIDING OFFICER. The Senator from North Carolina, Mr. Helms, is 
recognized.
  Mr. HELMS. Mr. President, we have taken on the air of a Gilbert and 
Sullivan comic opera here tonight and all this week. I heard on the 
radio, I say to my colleague from North Carolina, on the early morning 
news, several days ago, I heard a Senator say, ``Yes, we are going to 
give umpteen hundred million dollars to children''--he didn't say 
children, he said ``chillin,'' and, oh, how benevolent he was--
``because we are going to raise the cigarette tax,'' we are going to 
sock the tobacco companies. Well, he is not going to do any such thing. 
But that is what he wants the folks back home to think.
  Speaker after speaker has pointed out that you are not taxing the 
tobacco companies; you are taxing the lower income people of this 
population of the United States. If you don't believe it, look at the 
record. Yet, they say, we are socking it to the tobacco companies--the 
evil tobacco companies--and they have all sorts of statistics that they 
pulled out of their hip pocket, saying how many lives it is going to 
save. They are not going to save any lives.
  The point is, I say to my friend from Kentucky, it is so much hot 
air. They know it is hot air, but they have nothing else to say. And 
they want a headline back home that Senator Joe Blow really socked it 
to the tobacco companies. No, Joe Blow is not socking it to the tobacco 
companies.
  He is socking it to the low-income people of this country who do 
something that maybe Joe Blow doesn't do--enjoy cigarettes. I don't 
smoke. Nobody in my family does. But I will tell you one thing. When 
you get down to it, it's a matter of choice and statistics--and you can 
play all sorts of games with statistics. But Lauch Faircloth has it 
right and so does the distinguished Senator from Kentucky. Both of them 
have it right about how many jobs this is going to adversely affect.
  This is the game we play. Go ahead and play it if you think you can 
win. I hope you can. But get you a little monkey and one of these organ 
grinders and sing this debate that you are making about tobacco, then 
you can be really funny.
  I thank the Senator. I yield such time as I may have.
  Ms. MOSELEY-BRAUN. Mr. President, I would like to express my support 
for the spirit embodied in Senator Durbin's amendment to S. 949. This 
amendment seeks to increase the health insurance deduction for self-
employed individuals to 100 percent. I agree that this is the right 
thing to do and that the Senate should consider options for ensuring 
that small business owners, particularly women, and farmers have access 
to the same tax deductions that are available to large corporations. I 
do not, however, agree with the way my Illinois colleague has suggested 
we pay for this particular increase, and for that reason, I cannot 
support this amendment.
  The bill before us today reflects a long and tedious, bipartisan 
compromise among the members of the Finance Committee. That compromise, 
which provides for increased access to education, increased savings 
incentives, family tax relief, and agricultural and business investment 
incentives, also reflects some hard choices regarding upon whom the 
burden to pay for such benefits should fall. A part of the compromise 
made by the members of the Finance Committee was the decision to forgo 
increasing tobacco taxes at the present time. This decision was made 
with due consideration to the ongoing tobacco litigation, which may 
result in a dramatic increase in current tobacco taxes.
  I definitely support the spirit of Senator Durbin's amendment. A 100 
percent deduction for health insurance premiums could reduce the annual 
net cost of health insurance for a typical family by as much as $500 to 
$1,000. In addition, such a deduction could provide tax equity for the 
10.6 million self-employed Americans who currently can only receive a 
40 percent deduction, unlike large corporations, who currently can 
deduct 100 percent of incurred health insurance premiums. There is no 
doubt that there is merit to the goals of this amendment.
  As much as I would like to support the amendment presented by my 
colleague today, however, I believe that the compromise made by the 
Finance Committee should be honored. To do otherwise could place other 
programs and incentives of vital importance to the average American 
family and small business at risk. Because I believe that we have an 
obligation to make good on the promises of this bill, I cannot support 
this amendment.
  The PRESIDING OFFICER. Who yields time?
  Mr. NICKLES. Would the Senator yield 1 minute to me?
  Mr. ROTH. I yield 1 minute to the Senator from Oklahoma.
  Mr. NICKLES. I again remind my colleagues. I urge them to vote ``no'' 
on the Durbin amendment. There may be a point of order raised on it. I 
hope they sustain the point of order. I again remind them that right 
after this amendment, we will be offering an amendment that will have a 
significant improvement on deductibility for self-employed persons, one 
that I believe we cannot only pass but hopefully prevail in conference 
on as well.
  The PRESIDING OFFICER. Who yields time?
  Mr. DURBIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Could I ask my friend and colleague from Delaware, are 
there

[[Page S6454]]

any more requests for time on their side of the aisle?
  Mr. ROTH. No. I will yield back my time.
  Mr. DURBIN. Might I have 3 or 4 minutes? Then I will be prepared to 
yield back the floor as well.
  Mr. ROTH. Does the Senator have time remaining?
  Mr. DURBIN. Yes. I believe I have some time remaining.
  The PRESIDING OFFICER. The Senator from Illinois has 23 minutes left.
  Mr. DURBIN. I will not use that, I guarantee you.
  Let me say this. I want to respond to some of the points raised in 
this debate. I have been involved in this debate for over a decade and 
have heard many of these arguments, and I disagree with them. But I do 
respect my colleagues both in the House and in the Senate who make 
these arguments. I believe they are heartfelt and sincere. I believe 
they are speaking for the people that they represent.
  I believe I am speaking for the people that I represent not only in 
Illinois but across the Nation when I talk about the need to have some 
fairness when it comes to hospitalization insurance premiums and to 
stop all of the promises that have gone on for more than a decade that 
we are going to give these people fairness. ``Oh, we love small 
business. Oh, we love the family farmer. We are going to get around to 
helping you on health insurance matters in the next year 2 years.'' 
Senator Nickles said maybe 10 years from now we are going to get around 
to it.
  Please. I have been involved in that debate. Senator Dorgan has. 
Senator Conrad has. This has gone on for more than a decade.
  All of these promises we can deliver on tonight.
  Listen to the arguments. Again, I find it incredible.
  One of my colleagues from Kentucky stands up and says this busts the 
budget deal. What? There was a provision in the budget deal that I 
voted for on this floor that limited the tobacco tax to only a 20-cent 
increase? I missed that provision. I don't think it was in there. If 
you will read it closely, that wasn't part of the budget deal.
  I might say to my colleagues. This is meddling strange--that you can 
impose a 20-cent increase in the Finance Committee, and it has no 
impact on employment in Kentucky or North Carolina, but Durbin wants to 
put 11 cents on, and all of a sudden we have thousands of people out of 
work. My goodness. Twenty cents has no impact, and 11 cents more we 
have tipped the scales, and it is all over for tobacco? Give me a 
break. Give me a break.
  What we are talking about here is an 11-cent increase on an item 
which is going to cost you $2, $3, or $4 a pack anyway.
  You know, they talk about it being a regressive tax. Poor people 
smoke. Yes, they do. Yes, they do. They are correct in saying that. 
Eighty-five percent of the people smoking today--poor and rich, it is 
the same thing--``I wish I could quit. I really wish I could quit.'' 
Some of them say, ``You know, if the tax gets too high, I might not be 
able to afford these darned things.''
  So you are talking about helping poor people. You are going to help 
them quit smoking, and help them live a little longer. That is a real 
help.
  Again, one of my colleagues said, ``Why don't you go around and tax 
corn? You have corn in Illinois. Why are you taxing tobacco from my 
State?''
  There is a big difference. The corn in Illinois and the corn in 
Missouri can be used for nutritious purposes. When it comes right down 
to it, tobacco is neither food nor fiber--neither food nor fiber.

  And let me add this. Tobacco is the only crop regulated by the U.S. 
Department of Agriculture which has a body count, the biggest single 
preventable cause of death each year. Don't stand up and tell me this 
is another agricultural product, another farm commodity. This is an 
item which, used according to manufacturers' directions, will kill you. 
That is what tobacco is all about. It is not another agricultural 
product.
  So when you talk about imposing a tax on this, we are talking about 
the health of America and the health of children. Oh, yes, in that low-
income group, that regressive tax, that tobacco tax--the low-income 
group includes a lot of Americans who live on allowances they get from 
their parents. Those are the low-income Americans, too, kids going and 
buying tobacco on the corner.
  Mr. FAIRCLOTH. Will the Senator yield?
  Mr. DURBIN. I am happy to yield.
  Mr. FAIRCLOTH. Would you give me an estimate of how many people are 
sick or die from drinking liquor a year made out of corn?
  Mr. DURBIN. I can't answer you that question.
  Mr. FAIRCLOTH. If you know a lot about tobacco, then you should know 
something about corn.
  Mr. DURBIN. I know that corn is a nutritious product and can be used 
and is probably consumed on a regular basis by the Senator who asked me 
the question. He looks pretty healthy.
  I will tell you something else. Tobacco is the No. 1 preventable 
cause of death in America today. You can't say that about corn, 
soybeans, wheat or any other commodity. You can't say that about it. 
You know it as well as I do. You can't make light of the fact that a 
product, if used as intended, kills people. You can't make light of the 
fact that when you follow the manufacturers' directions, you die when 
you use that product.
  Mr. FAIRCLOTH. What is the point? I am not trying to--
  Mr. DURBIN. Mr. President, let the Senator speak on his own time.
  Mr. President, regular order.
  The PRESIDING OFFICER. The Senator from Illinois has the floor.
  Mr. DURBIN. Let me tell you this in closing.
  I have heard a lot of arguments tonight made about the defense of 
tobacco. I say to my colleagues on both sides, if you are ready to vote 
for this tax bill, you are already imposing a tax on tobacco of 20 
cents. I am saying to you that 11 cents is going to buy a lot of good 
for America--not only keeping the products out of the hands of kids but 
finally keeping our promise to small business and family farmers.
  I urge you to look beyond some of the arguments that you have heard 
tonight, that you have heard over and over again, and think about the 
bottom line when this is done. Thirty-one cents on a package of tobacco 
is not going to break the tobacco industry. But it is going to save a 
lot of small businesses which will have a chance to survive.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I make a point of order that a quorum is not 
present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Mr. President, has the distinguished Senator from Illinois 
returned all time?
  The PRESIDING OFFICER. No. The Senator from Illinois has 18 more 
minutes remaining.
  Mr. ROTH. Does the Senator want to yield back?
  Mr. DURBIN. I am prepared to yield back my time.
  Mr. ROTH. I am prepared to yield back the remainder of the time.
  The PRESIDING OFFICER. All time is yielded.
  Mr. ROTH. Mr. President, the pending amendment is not germane to the 
provisions of the reconciliation measure. I, therefore, raise a point 
of order against the amendment under section 305(b)(2) of the Budget 
Act.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. DURBIN. I move to waive the Budget Act, and I ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. ROTH. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.

[[Page S6455]]

  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Vote on Motion to Waive the Budget Act

  The PRESIDING OFFICER. The question occurs on agreeing to the motion 
to waive the Budget Act in relation to the Durbin amendment No. 519. 
The yeas and nays have been ordered. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts] is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The yeas and nays resulted--yeas 41, nays 58, as follows:

                      [Rollcall Vote No. 137 Leg.]

                                YEAS--41

     Abraham
     Biden
     Bingaman
     Bond
     Boxer
     Bumpers
     Collins
     Daschle
     DeWine
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Glenn
     Gorton
     Gregg
     Harkin
     Hutchison
     Johnson
     Kennedy
     Merry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lugar
     McCain
     Mikulski
     Murray
     Reed
     Reid
     Santorum
     Sarbanes
     Shelby
     Specter
     Torricelli
     Wellstone
     Wyden

                                NAYS--58

     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Breaux
     Brownback
     Bryan
     Burns
     Byrd
     Campbell
     Chafee
     Cleland
     Coats
     Cochran
     Conrad
     Coverdell
     Craig
     D'Amato
     Domenici
     Enzi
     Faircloth
     Ford
     Frist
     Graham
     Gramm
     Grams
     Grassley
     Hagel
     Hatch
     Helms
     Hollings
     Hutchinson
     Inhofe
     Inouye
     Jeffords
     Kempthorne
     Kerrey
     Kyl
     Lott
     Mack
     McConnell
     Moseley-Braun
     Moynihan
     Murkowski
     Nickles
     Robb
     Rockefeller
     Roth
     Sessions
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                             NOT VOTING--1

       
     Roberts
       
  The PRESIDING OFFICER. On this vote, the yeas are 41, the nays are 
58. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected.
  The point of order is sustained and the amendment falls.
  Mr. ROTH. Mr. President, I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 518

  Mr. BAUCUS. Mr. President, I opposed the Bumpers Amendment that would 
repeal percentage depletion for hardrock mining companies operating on 
public and formerly public lands. I believe this amendment is the wrong 
approach to bringing about mining law reform.
  Hardrock mining provides many high-paying jobs and is essential to 
the economy of Montana. This amendment would raise taxes on the 
hardrock mining industry which will negatively effect everyone that 
depends on mining for their economic livelihood.
  The intent of this amendment is not about percentage depletion. This 
amendment is an overt attempt to punish the hardrock mining industry 
for the lack of success in reforming the 1872 Mining Law. Percentage 
depletion is being used as a surrogate to bring about reform. If there 
are problems with the 1872 Mining Law, we should approach those 
problems directly--not in the form of repealing percentage depletion. 
Let's not wage economic warfare against an entire industry.
  The repeal of percentage depletion is the wrong tool for bringing 
about mining law reform. The Bumpers amendment could have potentially 
devastating effects on the hardrock mining industry.


                    children's health care provision

  Mr. McCAIN. Mr. President, today, I voted for an amendment to the 
Budget Act which would improve access to health insurance for uninsured 
children in our country by providing an additional $8 billion to the 
$16 billion already contained in this bill for children's health care. 
This $24 billion in new Federal funding will allow us to expand 
Medicaid coverage for very low-income children and will put affordable 
health care insurance within the reach of every family.
  I am deeply concerned about the approximately 10 million children in 
our country who are currently lacking health insurance coverage. It is 
distressing that such a large number of our children lack access to 
primary and preventative care. I find it even more disconcerting that 
recent reports indicate that most of these children reside in families 
with one or more working parents.
  Providing access to health care for uninsured children has been a 
priority for me since coming to the Senate. During the 103d Congress, I 
offered legislation which attempted to address this problem and provide 
access to health care for many of our Nation's uninsured children. This 
issue has remained a high priority for me in the 105th Congress and I 
am pleased that we were able to pass this amendment today.
  This amendment is financed by a 20-cent-a-pack increase in the 
cigarette tax, which will raise enough revenues to provide the 
additional $8 billion for children's health insurance coverage. 
Although I have traditionally opposed new taxes, I believe that this 
proposal is necessary to help working parents purchase affordable 
health care coverage for their children.
  I wholeheartedly believe that every child deserves a healthy 
beginning in life. There should not be any children in our country who 
cannot count on access to quality health care when they need it. I 
believe that this bipartisan children's health insurance proposal will 
address this problem in a fiscally responsible manner and allow us to 
provide coverage to our Nation's most vulnerable population.
  Mr. MURKOWSKI. Mr. President, I rise in strong support of the tax cut 
bull that forms the heart of the second reconciliation bill.
  I want to take this opportunity to commend the chairman of the 
Finance Committee, Senator Roth and the ranking member, Senator 
Moynihan, for their efforts in ensuring that the Finance Committee's 
bill was reported with strong bipartisan support. I hope the spirit of 
bipartisanship that permeated the committee's work will extend to our 
debate on the Senate floor.
  Mr. President, during this past week, we considered the first budget 
reconciliation bill which was designed to slow the growth of Federal 
spending and to stop the hemorrhaging of the Medicare Program. And we 
successfully achieved both goals while at the same time making a 
commitment to boost funding by $16 billion to enable more children in 
America to obtain health insurance.
  The tax bill we are considering today builds on that achievement by 
earmarking $8 billion from increased tobacco taxes for expanded 
children's health insurance. With this unprecedented $24 billion 
commitment of funds for children's health insurance, I believe the 
Senate has made an investment in the health of the children of America 
that should alleviate the anxieties and fears of millions of parents 
about paying for the health care of their children.
  What is even more remarkable about the reconciliation bills we are 
considering this week is that at the end of the process, we will have 
set this Government on course to finally achieve a balanced budget. 
While I believe the tax cuts contained in this bill provide much needed 
financial relief for the vast majority of working Americans, I believe 
our greatest achievement is balancing the budget.
  What that means is that when this agreement is fully implemented in 5 
years, the Federal Government will no longer have to borrow to keep 
this Government operating. Most importantly, the balanced budget will 
give us the opportunity to finally begin paying down our enormous $5-
plus trillion national debt.
  Mr. President, on Monday, the world's financial markets were reminded 
of the enormity of the American Government's debt and the impact that 
debt has on the global marketplace. When Japanese Prime Minister 
Hashimoto suggested that he was tempted to sell off portions of Japan's 
American debt portfolio to stabilize the yen/dollar exchange rate, 
markets plummeted throughout the world. On Wall Street, we saw the Dow 
Jones average drop 192 points, the second largest point decline in 
exchange history.
  Although markets recovered after Japan's Finance Minister dismissed 
the idea that Japan would dump it's Treasury securities, the lesson is 
unmistakable. The security of our economy can

[[Page S6456]]

never be assured so long as this country continues to run deficits and 
pile up billions in additional debt. As long as we must turn to world 
markets to finance Government spending, our economy's health is always 
in danger of being held hostage to the political whims of foreign 
governments and speculators.
  That is why it is so important that we balance the budget and begin 
to pay down the debt. And that is why these reconciliations bills are 
vital to our Nation's economic security.
  Mr. President, the tax bill before us provides much-needed relief for 
the hard-working middle-income families who have not seen their tax 
burden reduced in 16 years. Despite what some of my colleagues on the 
other side of the aisle may allege about this tax bill, the lion's 
share of the income tax cuts--81 percent--will go to families earning 
between $12,000 and $62,000.
  This bipartisan bill will reduce the taxes paid by every low- and 
middle-income family with a child by $500. For a family with three 
children under 13, their tax burden will be reduced by $1,500. That's 
$1,500 that the family will have available to pay off bills, buy 
clothing for their children or spend as they see fit.
  A provision in the bill requires families with children between the 
ages of 13 and 17 to invest their $500 children's tax credit in an 
educational savings account. While I think it is important that we do 
as much as we can to encourage families to save for college, I think it 
is inappropriate for us to require families to establish these 
accounts. I will support an amendment that will debate this provision 
from the bill.
  The bill also provides more than $30 million in tax relief for 
families that are facing enormous college education bills. And it 
encourages economic growth and savings by reducing the capital gains 
tax and expanding individual retirement accounts.
  I also applaud the changes the committee made to the estate tax, with 
the goal that family businesses should be kept together rather than 
split apart in order to pay estate taxes. In fact, Mr. President, it is 
my hope that we can fundamentally change, if not eliminate, the estate 
tax with what can only be called confiscatory tax rates. Although we 
have not been able to achieve that result in this bill, I think that 
should be one of our goals when we consider fundamental tax reform in 
the future.
  Mr. President, the items I have just noted represent the highlights 
of the bill. What is again worth mentioning is how we were able to 
craft this bill. We did it with input and good debate between 
Republicans and Democrats on the committee. There was no rancor. We 
were not partisan, we tried to work within the confines of the budget 
agreement negotiated by our leadership with the White House.
  I would hope that that spirit of bipartisanship will continue as we 
debate this bill since I think we can all agree that the goal of 
providing tax relief for hard-working Americans and encouraging savings 
and investment are in the best long-term interests of our Nation.


                           Amendment No. 518

  Mr. KYL. Mr. President, as he has done numerous times over the past 
10 years, Senator Bumpers again attacked the hardrock mining industry 
in the United States. This time, he chose to introduce an amendment to 
the Tax Reconciliation Bill to repeal the percentage depletion 
allowance. This allowance has been in the tax code for over 60 years 
and repeal would be an arbitrary tax increase on the industry.
  Repeal of the allowance is a tax increase. Mining companies cannot 
recover higher costs, including higher taxes, by raising prices because 
mineral prices are set by international commodity market. It should be 
noted that the mining industry already pays high average federal tax 
rates--32 percent per a GAO study--because of the corporate alternative 
minimum tax.
  In addition to the damage that would be done by this arbitrary tax 
increase, I would emphasize that this is not the way to reform the 
mining law. Although Senator Bumpers and I may not agree on the 
specific reforms necessary, we do both agree that a comprehensive, 
responsible reform is necessary. Along with my other Western 
colleagues, I would like to see reform that is environmentally sound 
and allows industry to thrive in a healthy and supportive atmosphere. A 
one-shot tax increase on the Senate floor is neither comprehensive nor 
responsible. Any reform of such an economically significant domestic 
industry should be done through the committee process where all parties 
have a chance to be heard and the issues can be dealt with in a 
thoughtful and meaningful manner.
  I voted against the Bumpers amendment today and I am pleased that it 
was defeated.


                           broad base reform

  Mr. SHELBY. Mr. President, the bill before the Senate tonight, 
promises to provide about $75.8 billion in tax relief over the next 5 
years and approximately $238 over 10 years. Mr. President, that is a 
good step forward. But, Mr. President, I rise tonight to remind and 
encourage my colleagues that while this bill might be viewed as a good 
step forward in providing tax relief to the American people. It is just 
that: a step forward--hopefully, toward greater reform in the future.
  I will offer a sense-of-the-Senate resolution for a very simple, but 
very important purpose: We must not forsake our broader agenda to seek 
comprehensive reform of our tax system. Tax cuts are not a substitute 
for broad based reform.
  Mr. President, while we live in a society that accepts the notion 
that some level of taxation is necessary to finance the cost of 
government, our challenge has always been how much government and at 
what cost.
  In my view, the power to tax is the most ominous and potentially 
destructive power granted to government by the people and that is 
because taxes empower governments, not people, With that in mind, our 
tax policy should do no more harm than is necessary to achieve its 
stated good. This maxim underscores why we need to change our current 
system, and specifically eliminate the estate and capital gains taxes.
  Our current tax system promotes waste and inefficiency, penalizes 
savings and investment and rewards dependency. Not only is the current 
Tax Code inequitable in who and how it taxes, it is responsible for 
fueling much of the growth of government and Federal spending. Changing 
how we collect revenue to pay for the cost of government will be a 
significant step in helping devolve power from Washington back to the 
people and restoring greater freedom.
  We need to address significant tax policy changes that will not only 
provide taxpayers' relief, but will simplify and equalize tax 
collection. Taxation is bad enough without administering that tax 
through an inefficient, inequitable, complex and unresponsive tax 
system.
  Yesterday, the National Commission on Restructuring the IRS came out 
with their report and recommendations. I have not had an opportunity to 
review their report completely, but I did note that simplification on 
the Tax Code was among one of their primary recommendations, including 
establishing one broad based tax system.
  While the Commission was not tasked and did not address specific 
legislative proposals to reform the tax system, I believe that the 
underlying principle of seeking a``truly fair and comprehensive'' tax 
system is something we can all agree on And I would take this 
opportunity to commend my colleagues from Nebraska and Iowa for their 
leadership on this issue.
  While I believe a flat tax is the most equitable replacement that 
supports the most freedom at the least cost--this resolution is not an 
endorsement of the flat tax. It only calls for Congress and the 
President to move forward with consideration of broad based reform.
  While this bill attempts to reverse the punitive effects of our tax 
policy and tax system which currently punishes the basic values of 
work, savings and individual liberty, it is not sufficient to undo the 
basic premise that seems to underlie the current system and that is 
that the Government is entitled to all that you earn. And only through 
selected, targeted tax credits, deductions, exemptions and the like are 
the American people allowed to keep portions of the income that they 
work hard every day to earn.

[[Page S6457]]

  Our tax policy should support the most freedom at the least cost and 
embody the least intrusive means of levying and collecting taxes. But 
most importantly of all, Mr. President, we need a policy that does not 
punish the basic values of work, savings and individual liberty.
  Mr. President, without comprehensive tax reform, we will never truly 
be able to say that the era of big government is over.
  Mr. President, I would encourage my colleagues to join me and the 
Senator from Idaho in supporting this sense-of-the-Senate resolution.
  Mr. LOTT. Mr. President, I do want to propound a unanimous consent 
request here, that would allow us to carry out the indication that we 
have put at the table here that this would be the last vote of the 
night.
  Before I do that, I want to say again I really appreciate the 
bipartisan cooperation that we have had throughout this week. I think 
it has made the Senate look good and it has taken a lot of work and 
several of us have had to keep our commitments in a way that was not 
always easy, but we have stuck by it on both sides of the aisle. I 
thank the Senators for doing that. I appreciate also your tolerance 
when I suffered mightily on one of the votes myself today.
  The chairman and the ranking member have been a pleasure in working 
through all of this. I thank them and their staff. It is a little 
premature. I think we are tired, we are trying to find a way to 
complete our work, but it is important we also take note of the fact 
that we have been doing some good work working together. We want to 
keep that going.
  So we have a unanimous consent request that we have worked with 
Senator Daschle on. He has made a lot of very positive recommendations. 
We think this would be the fairest way under the process that we have 
now to complete our work.
  I want to say, Senator Daschle and Senator Domenici, Senator Byrd and 
I have been talking about the fact that we need to take a look at the 
process and see if we cannot come up with a little better way to do it 
without the votes in seriatim at the end of this process. Senator Byrd 
has a resolution he is going to introduce. Senator Daschle and I are 
going to appoint a task force of senior Senators to see if we cannot 
come up with some ideas we can agree to, to allow this process to be 
done better in the future.


                      Unanimous Consent Agreement

  Mr. LOTT. But, in view of what we have to deal with, I ask unanimous 
consent, now, that during the remainder of the consideration tonight of 
S. 949, the following be the only amendments in order, other than 
agreed-upon amendments to be offered by the managers: The Nickles 
amendment, the Gramm amendment, and Kerry of Massachusetts amendment. I 
further ask at the conclusion of the debate on the above listed 
amendments, it be in order for any Member of the Senate to address the 
Senate with respect to an amendment that may be offered after all time 
is expired, but there be no further amendments to be in order this 
evening.
  I further ask that at the conclusion of the remainder of the time on 
S. 949, the Senate automatically proceed to a period of morning 
business with Senators permitted to speak for up to 10 minutes each. 
That way, if all time has expired and you have an amendment that you 
are going to offer tomorrow, you have that 10 minutes in which you can 
explain tonight what your intentions are, what is in the amendment; so 
I ask at the conclusion of the remaining time on S. 949 the Senate 
automatically proceed to this period of morning business.
  Mr. BIDEN. Reserving the right to object.
  The PRESIDING OFFICER. Is there objection?
  Mr. DOMENICI. Reserving the right to object. Mr. Leader, would you 
clarify for me please, and I regret to take your time, will there be no 
amendments offered tomorrow that are not offered tonight?
  Mr. LOTT. No. Under this agreement, if a Senator has not had the 
opportunity to offer his amendment today, he or she would be able to 
offer their amendment in the morning with time equally divided between 
those for and against it, 2 minutes each--the usual 1 minute on each 
side to explain that amendment and a vote.
  Mr. DOMENICI. Mr. Leader, they would have 1 minute on a side 
tomorrow?
  Mr. LOTT. Yes. Right.
  Mr. DOMENICI. Mr. Leader, we have worked with everybody that had 
process amendments. They don't have to offer them, and I am not asking 
especially for them to offer them, but I wonder if we couldn't get an 
agreement that would set in motion, so everybody would understand, 
these process amendments? Could I try a request on for you and see if 
you can agree?
  I ask consent that the withdrawn amendment No. 537, that withdrawal 
be vitiated--that is the one I offered--and that a motion to waive with 
respect to amendment 537 be made and that it not be amendable, the 
motion to waive is agreed to the amendment, and if it is, it be treated 
as original text. Then I ask consent that the following Senators, if 
they choose, be authorized to offer amendments for budget process: 
Biden, Gramm--Senator Gramm of Texas, Senator Bumpers, Senator Gregg, 
Senators Brownback, Frist, and Abraham. And if they offer them they 
would be taken up in that order tomorrow.
  Mr. LOTT. These are the amendments having to do strictly with process 
questions. I know there is a lot of interest in these process 
amendments. I am not familiar with the content of all of them.
  Several Senators addressed the Chair.
  Mr. LOTT. Our understanding is Senator Byrd is going to offer his 
separately.
  Mr. President, I renew my request based on the three-unanimous 
consent request paragraphs I read, with the addition of the Domenici 
request.
  Mr. REID. Reserving the right to object.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I direct the question to both leaders. I 
have some trouble understanding why there would be amendments in order 
in the morning. It would seem to me this process has gone on for 
several days and there should come a time when you make a decision 
whether you are going to offer an amendment. The leaders have been very 
generous, they are going to allow amendments to be offered after the 
time has expired. But I would think that should end sometime tonight. I 
don't think we should come in here in the morning, fresh as daisies, 
with a big pile of new amendments.
  Mr. LOTT. The Senator's point is well taken and I certainly agree. 
Senator Daschle and I would hope there would not be a long series of 
amendments offered tomorrow.
  Some Senators will feel very strongly and feel like they should have 
that opportunity. Under the rules as they now exist we could not cut 
them off. We have had a good debate. We have had the alternative 
amendment offered by the Democratic leader. We have had other good 
amendments and debates that occurred. We hope we could bring it to a 
conclusion at a reasonable time tomorrow.
  I remind my colleagues we had 16 votes yesterday, I believe it was. 
We started at 9:30 and we finally concluded that at about 5 o'clock 
yesterday afternoon. Now I believe we can do a better job. We'll start 
earlier tomorrow and we will stick to the 10-minute vote after the 
first vote. And we will try to move it right along. But we found the 
other night that when we said OK, just leave your amendment with the 
managers of the bill, when we came in in the morning we had 61 
amendments. Then the leadership, Senator Daschle and his whip team, as 
we were, were running around trying to find out which amendments 
really--what they do. You know, will the Senator insist on offering it? 
Can we get them accepted? It really complicated the process.
  We really believe by this process Senators will be able to debate 
these amendments and other amendments tonight. Then they, based on 
their thinking tomorrow, they would have the opportunity or perhaps 
would choose not to offer the amendments tomorrow. But if they do we 
cannot--we cannot cut off the Senators' right to offer an amendment.
  Mr. REID. Reserving the right to object, continuing my reservation, I 
say

[[Page S6458]]

to my friend the majority leader, I am going to withdraw my 
reservation. But I do say this. I want everyone to hear, including the 
senior Senator from West Virginia. If we don't get a change in the 
process by next year I am going to object to everything. This is a 
ridiculous process. I don't think it is good for the system and I hope 
we change it.
  Mr. LOTT. I agree and I appreciate the Senator's comment on that. I 
have been thinking that for several years. I remember one day here we 
had, what, 39 votes and set a record, a historical record Senator Byrd 
told us. It is just not a good process.
  We are committed to coming up, by September 8, within the next couple 
of months, with a way to change the process. In fact, Senator Byrd has 
some good ideas. But I just want to make sure that we have thought it 
through and we don't start and change it without thinking about 
unintended consequences. I don't believe anybody intended 10 years ago, 
when reconciliation was set up, that it would lead to this type of 
voting process. We are committed on both sides, the leadership and our 
senior Members, to coming up with a better process. We are going to do 
that. We certainly would like the input of the Senator from Nevada, 
too.
  Mr. DASCHLE. Mr. President, reserving the right to object?
  Mr. ALLARD. Mr. President, I say to the majority leader, I did not 
hear my name listed on that list of amendments, it is the Allard-
4Abraham-Brownback amendment.
  Mr. DOMENICI. We have Senator Brownback. Do you have a separate one 
from Senator Brownback?
  Mr. ALLARD. It's under my name actually, Allard-Brownback; Senator 
Abraham is a cosponsor.
  Mr. LOTT. It's Allard-Brownback. OK. We got that.
  Mr. DASCHLE. Mr. President, reserving the right to object.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. For purposes of clarification, let me first say I 
subscribe to what the majority leader is attempting to do here. We hope 
that we can accommodate the largest number of Senators with this 
process. I think there are some questions, however, about what happens 
tomorrow morning beginning with what time we vote. I think the majority 
leader has now indicated 9 o'clock.

  Mr. LOTT. Yes, 9 o'clock, so we will start earlier and we will start 
voting--we would have the brief explanation and we would start voting 
immediately after that. We would then vote one after the other until we 
completed the process.
  Mr. DASCHLE. The second question has to do with the request made by 
the distinguished Senator from New Mexico. As I understand it, what he 
is attempting to do is sequence a series of amendments. I guess the 
question would be, at what point tomorrow does that sequencing begin?
  Mr. DOMENICI. I think that's up to the floor manager as he sequences 
over the evening. He'll go over all the amendments and I assume he'll 
sequence the way we did and put the whole list together. We are not 
seeking any special preference in that list.
  Mr. DASCHLE. It doesn't preclude any other Senator from offering 
amendments?
  Mr. LOTT. Not at all. It would not preclude other Senators from 
offering amendments. I want to say to the Senator--
  Mr. DASCHLE. The question would be--I'm sorry, if I can just 
interject? If there was an amendment on one of the amendments offered, 
would the sequencing preclude an amendment to one of the amendments?
  Mr. DOMENICI. I did not make that request.
  Mr. DASCHLE. I ask consent that be considered. I don't think that 
would matter, but I think we need to protect Senators in that regard.
  Mr. DOMENICI. If a Senator wants an up-or-down vote on his process I 
would not object to that request.
  Mr. LOTT. I have not had a chance to get into the specifics of each 
one of these amendments, but I hope we could pursue the possibility of 
not going through the long list of process amendments. At least half of 
these are on our side of the aisle. So I hope we could find another 
time, another day, another way to do these process amendments. I will 
certainly be working on that later on tonight and in the morning.
  Since we have the first 3 votes already lined up that would give us 
time to do some work on exactly whether or not this is essential. I 
will work with Senator Daschle on that.
  Mr. DOMENICI. Mr. President, there are points of order not waived on 
any of these. The points of order--if people want to make them you have 
to get 60 votes and everybody knows that.
  The PRESIDING OFFICER. Is there objection? The Senator from 
Minnesota.
  Mr. WELLSTONE. Mr. President, this is not an objection. I am not 
going to object. But just the question, if I could ask it. My 
understanding is--I mean, there are a number of us--all of us would 
like to finish. Some of us have been waiting a long time, many, to have 
amendments and to discuss them and I don't think we want to prolong the 
matter. My understanding is as opposed to the beginning of the week, we 
don't actually have to lay the amendment down tonight in order to have 
that amendment up tomorrow; am I correct? My second question is, 
wouldn't it be a little bit more expeditious if in fact the amendment 
could be laid down so we don't have to go through that process at all 
tomorrow morning with the requirement if they are not laid down tonight 
they would be out of order?
  Mr. LOTT. We have discussed that back and forth. We tried to again, 
in a bipartisan way, figure the best way to deal with this, the fairest 
way, and also the way that would hopefully not lead to the largest 
number of amendments. We really think that we may actually wind up 
having fewer amendments finally voted on tomorrow by doing it this way. 
We tried it the other way. Bear with us as we try it this way.
  Again I urge, unless you just really feel you have to have a vote on 
your amendment tomorrow I urge you, and I will be saying it on this 
side--but but if you feel strongly, you can talk about it tonight and 
offer your amendment tomorrow.

  Mr. DODD. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. I inquire of our leader or our friend from New Mexico, is 
it necessary the process amendments be considered as part of this 
budget agreement, or would it not be better to deal with that as a side 
issue and deal with the amendments that bear directly on the tax bill 
and then bring up the process amendments on a separate occasion? Is 
there reason that has to be a part of this, I inquire of the leader or 
distinguished Senator from New Mexico?
  Mr. DOMENICI. I could have offered a process amendment that I think 
is needed and other Senators think are needed. I could have offered it 
on the first bill that went through here, the reconciliation bill. I 
chose to wait for this bill. It is just as in order on this bill and 
just as subject to a point of order on this bill as on the other bill, 
but there is no other reconciliation bill coming down the field.
  Mr. DODD. I understand. If my colleague will yield, I understand 
this. Time is running out. If we don't debate it this evening or during 
morning business, tomorrow we will be limited to a 1-minute explanation 
of process amendments that have to do with the budget process that I 
think are rather significant.
  I am concerned that something as profound as dealing with the budget 
process is left to seconds to debate them, and unnecessarily so. I 
raise the issue of whether we ought to set that for a separate time, 
rather than deal with this?
  Mr. LOTT. Mr. President, if I can respond again, I share a lot of the 
Senator's feelings. We will work to see if there is some way we can get 
an agreement on these process amendments to limit the number or to find 
another time and opportunity for them to be offered.
  I remind you that yesterday, one unanimous consent agreement that we 
worked out took nine amendments off the board in one swoop, and we 
agreed to something that was passed by voice vote. I am not sure we can 
do that here. Part of what we need is a little time to work with what 
we have left.
  Mr. DODD. I understand.
  Mrs. BOXER. Reserving the right to object, and I shall not object, I 
have a

[[Page S6459]]

question for the majority leader. If we were able to work out 
amendments cleared on both sides, is it necessary for us to personally 
offer it, or can one of the managers offer it in our name if it has 
been cleared, because that would speed things along.
  Mr. LOTT. The UC specifically says ``other than agreed upon 
amendments to be offered by the managers.''
  Mrs. BOXER. I want to make sure they will be offered in the name of 
the Senator who wrote them rather than the manager.
  Mr. LOTT. I believe that is the way they do them.
  Mrs. BOXER. I have no objection.
  Mr. COATS. Reserving the right to object.
  Mr. BYRD. Mr. President, reserving the right to object.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. COATS. Mr. President, I have a question for the majority leader. 
He listed three amendments to be debated this evening, I believe those 
of Senator Nickles, Senator Gramm of Texas, and Senator Kerry. Is there 
a time limitation on the debate of those? The reason I ask is because 
for those who want to stay afterward and take the 10 minutes to 
describe an amendment that will be offered tomorrow, it will be good to 
know that there is some limitation on the time for debate for those 
three particular amendments.
  Mr. LOTT. In answer to the Senator, I say there was no time agreement 
worked out, partially because the Senators didn't want that time 
agreement. I am hoping they will be actually relatively short in time. 
I know Senator Nickles doesn't need a lot of time. I believe these 
amendments will go relatively quickly, and there will be time left for 
other Members to address the Senate on their amendments. And then after 
that, when all time has expired, Senators can still talk in morning 
business for up to 10 minutes. We did not get a time agreement in our 
effort to get the UC worked out, but I think we are talking about a 
relatively short period time of time.
  Mr. BYRD. Mr. President, reserving the right to object.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. My reservation, Mr. President--
  The PRESIDING OFFICER. May we have order in the Senate, please? The 
Senator from West Virginia.
  Mr. BYRD. While I have submitted a reservation, may I offer a 
parliamentary inquiry? Will a motion to recommit, either a straight 
motion to recommit or a motion to recommit with instructions, still be 
in order, even though a Senator has not reserved a spot on this list?
  The PRESIDING OFFICER. Under the Budget Act, the only motion to 
recommit that can be considered is one that occurs within 3 days; it 
specifies the bill be reported back in 3 days.
  Mr. BYRD. And is that motion in order any time prior to the 
conclusion of action on the bill?
  The PRESIDING OFFICER. That is correct.
  Mr. BYRD. Mr. President, reserving the right to object--I will not 
object--I am concerned about these process amendments. I am 
particularly concerned that there may be a process amendment that would 
wipe out the Byrd rule. I am also concerned that there might be a 
process amendment that would wipe out all 60-vote points of order. 
Either of those would be pretty fatal to this process.
  And I hope that while we have both leaders here and a good size 
attendance, that we will be very aware, very alert to the possibility 
of either of those, which would mean that the reconciliation process, 
as we know it--perhaps we don't like it as we know it--but it will be 
gone. Period. I hope it won't happen. Would the Senator include me as a 
Senator who might offer a process amendment or a motion?
  Mr. DOMENICI. I so request. May I say to Senator Byrd, we very 
carefully looked at these amendments with the view that you have in 
mind, and I can tell you that none of the process amendments that are 
listed in the unanimous-consent request address either the Byrd rule, 
nor do any of those amendments--what was your other?
  Mr. BYRD. Wipe out 60-vote points of order.
  Mr. DOMENICI. Nor do they attempt to permit us to vote with less than 
60 votes on any of these matters that are subject to a point of order.
  Mr. BYRD. Mr. President, I am greatly relieved, and I thank the 
Senator.
  Mr. LOTT. Mr. President, before I put forth the unanimous-consent 
request one more time, we did add the Byrd resolution or amendment to 
the process list of amendments, and I renew my unanimous-consent 
request.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. LOTT. For the information of all Senators, then, there will be no 
further votes tonight. Following debate on the three amendments, any 
Senator wishing to discuss an amendment that may be offered tomorrow 
may do so. The Senate would then begin voting at 9 a.m. on Friday, on 
or in relation to the three listed amendments and any amendments 
offered tomorrow. If Senators do intend to offer amendments tomorrow, I 
urge them to please give a copy to the managers, since there will be no 
debate time other than the 2-minute-equally-divided time. It will be 
very helpful to all Senators to have these amendments available so they 
can be given to interested Senators.
  I yield the floor. We have approximately 1 hour and 5 minutes left of 
time on the bill.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, the Senate is still not in order.
  The PRESIDING OFFICER. May we have order in the Senate so we can 
continue on the 1 hour and 5 minutes that is rapidly dissolving? If 
staff will please take their seats and if conversations will please 
cease, we can continue with the business of the Senate.
  The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I thank you for getting order in the 
Senate.
  Mr. KOHL addressed the Chair.
  Mr. NICKLES. Mr. President, I will be happy to yield to the Senator 
from Wisconsin for 2 minutes without losing my right to the floor.
  The PRESIDING OFFICER. The Senator from Wisconsin.


                           Amendment No. 524

  Mr. KOHL. Mr. President, tomorrow I will up amendment No. 524 which I 
believe is at the desk. This amendment creates a tax incentive for 
companies that provide child care for the dependents of their 
employees. The amendment is also cosponsored by Senators Daschle, 
DeWine, Boxer, D'Amato, Moseley-Braun, Snowe, Specter, and Johnson.
  Our amendment creates a tax credit for employers who get involved in 
increasing the supply of quality child care. The credit is limited to 
50 percent of $150,000 per company per year.
  The amendment is based on S. 82, the Child Care Infrastructure Act, 
which has received praise from businesses, parents, and day care 
workers alike. Working Mother magazine gave the initiative its 
``Lollipops'' award in the January issue, and the Children's Defense 
Fund has endorsed it. S. 82 is also endorsed by the National Center for 
the Early Childhood Work Force and the National Child Care Association.
  The amendment responds to a great need, a great challenge, and a 
great opportunity. The need is to provide a safe and stimulating place 
for our youngest children to spend their time while their parents are 
at work. The challenge is to make the American workplace more 
productive by making it more responsive to the needs of the American 
family. And the opportunity is to take what we are learning about the 
importance of early childhood education and use it to help our children 
become the best educated adults of the 21st century.
  The credit is offset by authorizing an anti-fraud program that will 
keep parents who do not have custody of their children from unlawfully 
claiming child-related tax benefits.
  Child care is an investment that is good for children, good for 
business, good for our States, and good for the Nation. We need to 
involve every level of government--and private communities and private 
businesses--in building a child care infrastructure that is the best in 
the world. Our amendment is a first, essential and deficit neutral step 
toward that end, and I urge all my colleagues to support it.
  Mr. HATCH. Mr. President, I rise to support Senator Kohl's amendment. 
This amendment would provide tax credits to encourage businesses and 
other institutions to provide child care for their employees.

[[Page S6460]]

  This proposal, which is similar to one that I included in my original 
child care bill several years ago, would provide a tax credit for 
businesses that build on- or near-site day care centers, jointly 
participate with other businesses in running child care centers, or 
contract with child care facilities. This amendment is important in 
order to meet the rapidly increasing demand for child care. I recognize 
the importance of finding safe places for our children while their 
parents are at work, preferably places where they can learn and have 
wholesome fun. We use the Tax Code to encourage a variety of private 
endeavors; we should not hesitate to use the tax code to encourage 
private businesses to become involved in providing child care for 
dependents of their employees.
  This tax credit would be equal to 50 percent of the qualified child 
care expenditures up to a maximum of $150,000, paid or incurred by the 
employer during the taxable year to acquire, construct, rehabilitate, 
expand, or operate a qualified child care facility.
  Parents of young children are joining the work force in record 
numbers, leading to more young children in the need of care as their 
parents go off to work. There are more single parents today than ever 
before. In has been reported that up to 62 percent of working mothers 
have children under 6 years old and 59 percent had children under 3 
years of age. This amendment would give incentives for any company, 
small or large, to provide child care to its employees.
  Studies have shown that organizations that provide child care 
benefits to their employees attract and retain better qualified 
applicants and experience reductions in employee absenteeism. But, the 
argument goes that if the employer benefits from providing child care 
benefits, why should we subsidize the costs with a tax credit. That is 
not a bad question.
  But, I suggest that society has a stake in this as well. Not only 
will our workforce respond positively given the peace of mind that 
comes from knowing that your children are safe and thriving, but also, 
we must be concerned with the health and safety of our children. It is 
disturbing whenever we read about children left alone or children in 
inadequate or unsafe facilities. I believe that the small innovation of 
a tax credit to defray the costs of employer-sponsored child care will 
do wonders to address this increasing need of American families.
  Mr. President, child care is an investment for the future. It is good 
for business, good for our communities, and good for the Nation. There 
certainly is a need for quality child care. As a nation, we have made 
significant increases in the education of our older children, aged 5 to 
25. We have increased Headstart. But, we need to do more. And, we need 
to create more options.
  This tax credit proposal made by Senator Kohl is the least intrusive 
and least expensive way I can think of to stimulate private sector 
investments in child care. It is now time to set the infrastructure in 
place for the most important years in the development of our children. 
There is an increasing struggle to balance work and family. How well we 
respond will determine the success of our future.
  I encourage my colleagues to support this important amendment, and I 
commend Senator Kohl for his work on it.
  Mr. KOHL. I ask unanimous consent that this be the first amendment 
taken up tomorrow morning for a vote after the three amendments laid 
down tonight.
  The PRESIDING OFFICER. Is there objection?
  Mr. KENNEDY. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Can I ask a question about whether we can at least get 
an understanding about the sequence? I don't mind whether I am fourth 
or eighth.
  Mr. NICKLES. Mr. President, I think I have the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma has the floor.
  Mr. NICKLES. Mr. President, I yielded to the Senator from Wisconsin 
for 2 minutes, and now I wish to reclaim the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma has the floor.


                           Amendment No. 551

(Purpose: To increase the deduction for self-employed health insurance 
                     costs, and for other purposes)

  Mr. NICKLES. Mr. President, tonight I offer an amendment on behalf of 
myself, Senator Hagel, Senator Cleland, and Senator Domenici which 
would increase the deductibility of health insurance for self-employed 
individuals. I will not take long. I mentioned it a couple of times 
during debate on the Durbin amendment.
  The current law allows for self-employed persons to deduct 40 percent 
in 1997. We actually increased that--if I remember, Senator Dole, 
Senator Roth and several of us last year in the last Congress increased 
that--over several years, and eventually by the year 2004, it would be 
at 60 percent. We would like to accelerate that. That is what this 
amendment does. It would improve it from 1997, the year we are in, from 
40 percent to 50 percent. In 1999, it improves it from 45 percent to 60 
percent, and in the year 2003, it improves it from 50 percent to 80 
percent, and so on. We want to improve and accelerate health insurance 
deductibility for the self-employed.
  Mr. President, I used to be self-employed, and it always bothered me 
that I used to manage a corporation and the corporation could deduct 
100 percent of health care premiums, but my company, when I was self-
employed--it was a janitor service--could only deduct 40 percent. I 
would like parity, and, hopefully, eventually we will get there.
  In this amendment, we don't get there for several years, but at least 
we will accelerate it and make a better deal for self-employed persons 
at a more rapid rate.
  On behalf of my colleagues cosponsoring this amendment, I send the 
amendment to the desk and ask for its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Oklahoma [Mr. Nickles], for himself, Mr. 
     Hagel, Mr. Cleland, Mr. Domenici, and Mr. Thurmond, proposes 
     an amendment numbered 551.

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

       On page 212, between lines 11 and 12, insert:

     SEC. __. INCREASE IN DEDUCTION FOR HEALTH INSURANCE COSTS OF 
                   SELF-EMPLOYED INDIVIDUALS.

       (a) In General.--The table contained in section 
     162(l)(1)(B) is amended to read as follows:

The applicable percentage is--in calendar year--
  1997..........................................................50 ....

  1998..........................................................55 ....

  1999 through 2001.............................................60 ....

  2002..........................................................65 ....

  2003 through 2005.............................................80 ....

  2006..........................................................90 ....

  2007 or thereafter.........................................100.''....

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
       On page 159, line 15, strike ``December 31, 1999'' and 
     insert ``May 31, 1999''.
       On page 159, line 18, strike ``42-month'' and insert ``35-
     month''.
       On page 159, line 19, strike ``42 months'' and insert ``35 
     months''.
       On page 160, lines 10 and 11, strike ``December 31, 1999'' 
     and insert ``May 31, 1999''.
       On page 160, lines 19 and 20, strike ``December 31, 1999'' 
     and insert ``May 31, 1999''.
       On page 400, between lines 14 and 15, insert:

     SEC. __. MODIFICATION OF RULES FOR ALLOCATING INTEREST 
                   EXPENSE TO TAX-EXEMPT INTEREST.

       (a) Pro Rata Allocation Rules Applicable to Corporations.--
       (1) In general.--Paragraph (1) of section 265(b) is amended 
     by striking ``In the case of a financial institution'' and 
     inserting ``In the case of a corporation''.
       (2) Only obligations acquired after June 8, 1997, taken 
     into account.--Subparagraph (A) of section 265(b)(2) is 
     amended by striking ``August 7, 1986'' and inserting ``June 
     8, 1997 (August 7, 1986, in the case of a financial 
     institution)''.
       (3) Small issuer exception not to apply.--Subparagraph (A) 
     of section 265(b)(3) is amended by striking ``Any qualified'' 
     and inserting ``In the case of a financial institution, any 
     qualified''.
       (4) Exception for certain bonds acquired on sale of goods 
     or services.--Subparagraph (B) of section 265(b)(4) is 
     amended by adding at the end the following new sentence: ``In 
     the case of a taxpayer other than a financial institution, 
     such term shall not include a nonsalable obligation acquired 
     by such taxpayer in the ordinary course of business as 
     payment for goods or services provided by such taxpayer to 
     any State or local government.''

[[Page S6461]]

       (5) Look-thru rules for partnerships.--Paragraph (6) of 
     section 265(b) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Look-thru rules for partnerships.--In the case of a 
     corporation which is a partner in a partnership, such 
     corporation shall be treated for purposes of this subsection 
     as holding directly its allocable share of the assets of the 
     partnership.''
       (6) Application of pro rata disallowance on affiliated 
     group basis.--Subsection (b) of section 265 is amended by 
     adding at the end the following new paragraph:
       ``(7) Application of disallowance on affiliated group 
     basis.--
       ``(A) In general.--For purposes of this subsection, all 
     members of an affiliated group filing a consolidated return 
     under section 1501 shall be treated as 1 taxpayer.
       ``(B) Treatment of insurance companies.--This subsection 
     shall not apply to an insurance company, and subparagraph (A) 
     shall be applied without regard to any member of an 
     affiliated group which is an insurance company.''
       (6) De minimis exception for nonfinancial institutions.--
     Subsection (b) of section 265 is amended by adding at the end 
     the following new paragraph:
       ``(8) De minimis exception for nonfinancial institutions.--
     In the case of a corporation, paragraph (1) shall not apply 
     for any taxable year if the amount described in paragraph 
     (2)(A) with respect to such corporation does not exceed the 
     lesser of--
       ``(A) 2 percent of the amount described in paragraph 
     (2)(B), or
       ``(B) $1,000,000.

     The preceding sentence shall not apply to a financial 
     institution or to a dealer in tax-exempt obligations.''
       (7) Clerical amendment.--The subsection heading for section 
     265(b) is amended by striking ``Financial Institutions'' and 
     inserting ``Corporations''.
       (b) Application of Section 265(a)(2) With Respect to 
     Controlled Groups.--Paragraph (2) of section 265(a) is 
     amended after ``obligations'' by inserting ``held by the 
     taxpayer (or any corporation which is a member of a 
     controlled group (as defined in section 267(f)(1)) which 
     includes the taxpayer)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

  Mr. NICKLES. Mr. President, for the information of all my colleagues, 
I think under the unanimous-consent request, already agreed to by the 
leader, it has been agreed upon that we will vote on this amendment, I 
believe it will be the first amendment we will vote on at 9 o'clock 
tomorrow morning.
  Mr. MOYNIHAN. Mr. President, might the Senator from Illinois have 1 
minute to comment at this point?
  Mr. NICKLES. Certainly.
  Mr. DURBIN. Mr. President, I thank the Senator from New York.
  I will be supporting the Senator from Oklahoma. He is improving the 
process. I will continue to fight for 100 percent. Maybe the day will 
come when he and I can both agree on a way to do it.
  Mr. NICKLES. I hope so.
  Mr. HARKIN. Mr. President, parliamentary inquiry.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, are we in morning business?
  The PRESIDING OFFICER. We are not in morning business yet. We have 
some time remaining yet on the actual debate of the bill.
  Mr. HARKIN. Further parliamentary inquiry.
  Under the rules of the Senate, under the rules of which we are 
debating this bill, if someone is recognized, since there is no time 
limit, can that Senator yield time to other Senators for purposes other 
than asking a question?
  The PRESIDING OFFICER. It is my understanding that when there is no 
time limit, that each Senator would have to get his own time on the 
bill.
  Mr. HARKIN. Therefore, a Senator may only yield for a question; is 
that correct?
  The PRESIDING OFFICER. He could yield for a question provided it were 
a question and not another speech.
  Mr. GRAMM. Regular order, Mr. President.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. I have completed my statement.
  I ask unanimous consent that Senator Thurmond be added as a 
cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 552

 (Purpose: To let families decide for themselves how best to use their 
                           child tax credit)

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

       The Senator from Texas [Mr. Gramm], for himself, Mr. Coats, 
     Mr. Nickles, Mr. Hutchinson, Mr. Grams, Mr. Smith of New 
     Hampshire, Mr. Sessions, and Mr. Abraham, proposes an 
     amendment numbered 552.

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

     SECTION 1. CHILD TAX CREDIT FLEXIBILITY.

       On page 12, line 13, strike all through page 13, line 8, 
     and on page 16, line 3, strike all through page 17, line 6.

  Mr. GRAMM. Mr. President, I have sent this amendment to the desk on 
behalf of myself, Senator Coats, Senator Nickles, Senator Hutchinson of 
Arkansas, Senator Grams, Senator Smith of New Hampshire, Senator 
Sessions of Alabama, and Senator Abraham of Michigan. I am going to try 
to be very brief. I have a couple of my cosponsors here who have waited 
to speak on this amendment, and I hope we can accommodate them. We will 
all try to be brief.
  This is a very simple amendment. For the last 4 years we have been 
talking about a $500-per-child tax credit. Our argument has always been 
the same: We want to let families decide how to invest their own money 
in their own children and for their own futures.
  The whole purpose of a $500 tax credit was to allow families to 
invest their own money--which after all they earned--in the education, 
housing, nutrition, nurturing, and health care of their children.
  This is what the whole tax debate is about: It was in the Contract 
With America and even President Clinton has endorsed it. Nobody ever 
disputed the fact that the purpose here was a clear-cut tax cut to let 
families decide how to spend their own money on their own children. 
Remember, this is not all of their money; only $500 per child.
  Out of the Finance Committee has come a provision that says for 
children 13 to 16, in order to get the tax credit, you have to put it 
into an education account. And remarkably, it saves money for one, and 
only one, reason: because some people will not take the tax credit.
  Mr. President, if there has ever been an effort to go back on a deal, 
this is it. I think families ought to be able to invest in an 
individual retirement account. I think they ought to be able to set 
aside the money for that purpose. But the idea of making them do it is 
Government paternalism in its worst form.
  So what I am asking that we do is live up to what we said. I am 
asking that we give the $500 tax credit and that we give it for every 
age of a child covered, and that we let that child's father and that 
child's mother decide what is in their best interest.
  I think what we are trying to do here is dissuade people from taking 
their $500 tax credit by playing God with what they are supposed to use 
that money for. I know the intentions are good. I know they were aimed 
at trying to bring people together. But a deal is a deal. I have heard 
everybody here talk about a budget deal and what the President got and 
what we got and what we agreed to; but we had a deal with the American 
family. The deal with the American family was a $500 tax credit that 
the family got to spend.
  If we were reneging on a deal with the President, oh, people would be 
jumping up and down screaming, hollering, ``But we promised the 
President,'' or if the Democrats were trying to do something that was 
not in the budget deal, some would say, ``Well, the President promised 
us.'' This does not have to do with the President. This does not have 
to do with us--it has to do with the families of America.
  We are not living up to the deal. This is a lousy provision, and it 
should be removed. I am not saying there are not good intentions and I 
am not saying this is not part of some political deal. I am saying it 
is an unacceptable provision. It should not be in here. It fails to 
live up to the deal we made with the American people, and it needs to 
come out.

[[Page S6462]]

  Mr. President, I ask unanimous consent to have two letters printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                  Concerned Women for America,

                                                    June 25, 1997.
       Dear Senator: The over 500,000 members of Concerned Women 
     for America (CWA), many of whom reside in your state, urge 
     you to pass an unencumbered $500-per-child tax credit for 
     children.
       We strongly oppose the current Senate Finance Committee 
     version of the $500-per-child tax credit because it requires 
     parents of teens 13-17 to put their tax refund into an 
     Individual Retirement Account (IRA). This credit was created 
     to give needed tax relief to American families; it was never 
     intended to become a new way for the government to tell 
     families how they should and should not spend their own 
     money.
       Therefore, CWA urges you to support the Gramm Amendment. 
     This amendment will remove the IRA restrictions and allow 
     parents of teens to use the child credit for immediate needs, 
     such as food and healthcare. Only families are capable of 
     deciding the best use of family funds.
       Thank you for your attention to this important matter. The 
     over half million members of CWA appreciate your support for 
     the Gramm Amendment.
           Sincerely,
                                                   Beverly LaHaye,
     Chairman and Founder.
                                  ____



                                          Christian Coalition,

                                    Washington, DC, June 25, 1997.

                           Tax Bill Key Votes


 vote for the gramm motion to strike which will qualify teenagers for 
                     the $500 per child tax credit

                   vote against the daschle amendment

          vote for final passage if the gramm amendment passes

       Dear Senator: Sen. Phil Gramm and many others intend to 
     offer a motion to strike that will restore teenagers to the 
     $500 per child tax credit. We strongly urge you to vote for 
     the Gramm motion.
       Family tax relief in the form of a $500 per child tax 
     credit has been our highest legislative priority since 1993. 
     We are pleased that the Finance Committee has included the 
     credit in the tax bill. However, we cannot support the bill 
     in its current form. The single biggest disagreement we have 
     with the Finance Committee version of the $550 per child tax 
     credit is the exclusion of teenagers. Under the bill, only 
     children up to age 12 qualify for the credit. The Gramm 
     motion will restore teenagers to coverage of the $500 per 
     child tax credit.
       Excluding teenagers would be a deep disappointment for the 
     families of teenagers that struggle to meet the financial 
     pressures they must endure during the costly teenage years. 
     Indeed, caring for children reaches its most expensive point 
     during these years. The high cost of teenagers has been well 
     documented by the Clinton Administration's recent 1996 
     report, titled ``Expenditures on Children by Families'' 
     published by the Department of Agriculture. This report 
     compares the cost of food, clothing, health care, housing, 
     child care, education, and transportation by age group.
       This report documents that teenagers are by far the most 
     expensive age group. It concludes that it costs between $710 
     and $1,140 more to raise a child age 15-17, than it does to 
     raise a child age 9-11.
       Cutting off teenagers from the child tax credit would be a 
     double blow to the families of eleven million teenagers. 
     These families will already spend dramatically more than 
     previously to raise their children. Under the bill, they 
     would also begin paying an extra $500 in taxes once the child 
     credit is taken away from them. Added together, families with 
     teenagers would face a whopping $1,210 to $1,640 in extra out 
     of pocket costs.
       Here is how the Gramm motion would operate vis-a-vis the 
     Finance Committee provision. Instead of a $500 per child tax 
     credit for teenagers, the Finance bill creates a second 
     education IRA for teenagers. It mandates that a tax credit 
     worth $500 be placed into an education IRA. If the money 
     is not put into the IRA, the $500 is forfeited. The Gramm 
     motion strikes the mandatory language, making the IRA 
     optional. In other words, parents who don't choose the IRA 
     would then have an unrestricted $500 per child tax credit. 
     This makes much more sense. Parents are the only ones who 
     should make these decisions. The federal government should 
     not mandate the choice of saving for education over other 
     more pressing needs. There are many financial needs 
     families must meet apart from the worthy goal of saving 
     for education.
       We strongly urge you to vote against the Daschle amendment. 
     The amendment diminishes the value of the $500 per child tax 
     credit in several ways. It cuts the amount of $350, phases it 
     in unnecessarily, exempts teenagers for five years, and 
     eliminates the tax credit all together for some middle class 
     families by drastically lowering the income caps.
       If the Gramm motion prevails (and no amendments are passed 
     which would weaken the $500 per child tax credit), we 
     certainly urge you to vote for the tax bill on final passage. 
     If the Gramm motion fails, we regrettably will not be able to 
     support the tax bill at this time. We would actively work to 
     add coverage of teenagers in conference, and reserve judgment 
     on the conference report until it is finalized. We certainly 
     hope that in the end, we will be able to support the report. 
     That certainly is our goal.
       We will select a vote to be included in our Congressional 
     Scorecard relating to the $500 per child tax credit. At this 
     time, we can not predict which vote will be selected. Thank 
     you for your consideration of our views.
           Sincerely,

                                                 Brian Lopina,

                                                         Director,
                                      Governmental Affairs Office.

  Mr. GRAMM. Mr. President, I ask unanimous consent to add Senator 
Thurmond as a cosponsor to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. I wonder if my friend from Texas would wish to modify 
the term ``rotten.''
  Mr. GRAMM. This abrogates the deal with the working men and women of 
America. Some may see it as rotten and some may not. Some may see it--
  Mr. MOYNIHAN. Surely the Senator does not mean it as rotten.
  Mr. GRAMM. Some may see it as an acceptable deal and some may see it 
as a rotten deal. But the point is--I am happy to strike the word if it 
offends our dear colleague. But I feel strongly about it because the 
tax cut, after all, is about families. That is what it has been about 
to begin with.
  I have several of my colleagues here. If I could just let them all 
speak for 2 or 3 minutes, we would all be happy.
  I ask unanimous consent that each of them may have 2 minutes each.
  Mr. KERREY. Reserving the right to object.
  Mr. MOYNIHAN. I know they will be kind and thoughtful and even 
benevolent remarks.
  Mr. KERREY. No. Mr. President, reserving the right to object, I would 
like the Senator to be a little more specific. He said, ``I have a 
number of colleagues.''
  Mr. GRAMM. We have one, two, three, four; and they will speak 2 
minutes each.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. Mr. President, I commend Chairman Roth for the great 
leadership he has demonstrated in bringing this legislation before us. 
And I commend Senator Gramm for this amendment tonight.
  My good friend and colleague from Arkansas, Senator Tim Hutchinson, 
and I were freshman Members of the House in 1993 when we came together 
with Senator Coats of Indiana to develop a budget proposal called 
Family First that could serve as the taxpayer's alternative to the 
higher taxes and bigger Government plan offered by President Clinton.
  The key component of our legislation was family tax relief through a 
$500 per child tax credit.
  We convinced the House and Senate leadership to make our Families 
First bill--with the $500 per child tax credit as its centerpiece--the 
Republican budget alternative in 1994.
  For overtaxed American families, 1997 looks to be the year this long-
promised, long-overdue middle-class tax relief is finally delivered.
  As you know, working families today need tax relief more than ever.
  Factor in State and local taxes and the hidden taxes that result from 
the high cost of Government regulations, and a family today gives up 
more than 50 percent of its annual income to the Government. So all we 
are saying is let us let the working people of this Nation keep a 
little bit more of their own money.
  The $500 per child tax credit proposal in the bill before us goes a 
long way toward delivering tax relief to working families raising 
children. However, it imposes restrictions that will significantly 
dilute the purpose of the child tax credit.
  The legislation before us tells families that, yes, we will give you 
a tax credit, but if your children are between the ages of 13 and 16, 
you are going to have to spend it the way Washington thinks it should 
be spent. In this case, it would have to be spent on education. By 
mandating how the tax credit must be spent, we are in effect denying it 
to teenagers, leaving 11 million children out in the cold.
  And if your child is 17 or 18, you do not get it at all.

[[Page S6463]]

  Mr. President, I applaud the parents that take the $500 per child tax 
credit and dedicate it to an IRA or their child's college education.
  But that is a decision that belongs with parents, not with 
Washington. It is not our place to tell families how they can spend 
their money.
  The family tax relief provisions in the bill before us can be greatly 
improved by striking the mandate that the tax credit be dedicated to 
education. I am pleased to be joining my colleagues in offering this 
amendment to give that choice back to families. And I urge all my 
colleagues to support this amendment.
  Thank you, Mr. President.
  Mr. HUTCHINSON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. HUTCHINSON. Mr. President, I also want to commend Senator Roth. 
The $500 per child tax credit is truly the heart of this tax relief 
bill. I especially want to thank Senator Gramm for taking the lead in 
solving this problem, which is a very serious problem.
  There are 382,000 families in Arkansas who benefit from the $500 per 
child tax credit, but there are many teenaged children who are excluded 
because of the provision that is in the Finance Committee's bill. I 
believe parents should have the right to decide. They are better 
arbiters, they are better decisionmakers on the use of that money than 
bureaucrats and even lawmakers in Washington, DC. And no matter how 
good educational savings for teenagers may be, it is better to let the 
parents make that decision.
  I think I will have a hard time explaining to those parents of that 
13-year-old why, when their child was 12 he was eligible or she was 
eligible for the $500 per child tax credit, but at the age of 13 they 
are not. Perhaps that 13-year-old will have an emergency. Perhaps that 
13-year-old needs braces. Perhaps that 13-year-old needs a math tutor 
to enable that child to ensure that he or she is ready to go to college 
when they graduate from high school. The parents will not have the 
option, will not have the opportunity, will not have the eligibility 
under the current bill. That is why this amendment is so important that 
we ensure that the parents have the ultimate decisionmaking authority.
  Forty percent of young people who graduate from high school do not go 
straight on to college. They should not be excluded from the benefits 
of this tax bill. Parents should decide, not Washington, DC.
  I yield the floor.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I compliment my colleague, Senator Gramm. 
We tried to do this in the Finance Committee. Unfortunately, we fell a 
couple votes short. But the basic principle is we want to tell 
everybody their kids are going to get the $500 tax credit, not to say, 
well, it only applies to people 13 or younger, that if you are older 
you have to put it into an educational IRA.
  I think educational IRA's are a good idea. I compliment Senator Roth 
because he has been the champion of IRA's, but it should be an option. 
It should not be mandatory. We should allow them to have this choice. I 
hope a lot of them choose it before age 13. I think it would be a great 
idea for a parent, if they can do it, if they can afford it, to put the 
$500 into an IRA for their child and let that accumulate and do that 
every year so they have a nest egg for their college expenses. It would 
be a positive thing for them and our country.
  But we should not mandate it. Presently, under the bill we mandate it 
for kids that are 14, 15, 16, 17 years old. I compliment my colleague 
from Texas and the cosponsors.
  I urge my colleagues to vote for this amendment to allow parents to 
choose whether they get the $500 tax credit to spend as they choose or 
whether or not to put it into an IRA. They should make that choice. We 
should not mandate it from Washington, DC.
  Mr. SESSIONS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. I want to thank Senator Roth for his outstanding 
leadership that he has given on this important issue. But I feel very, 
very strongly that we need to do more for working families. Working 
middle-class American families today are struggling to get by.
  My youngest son will start college this fall. But I will tell you, I 
have children; three of them under age 13 and three of them over age 
13. It costs more for a 14- or 15- or 16-year-old than it does for a 
12- or 10-year-old. Anybody who has raised a family knows that.
  The demands on those families are fierce today. They are struggling 
to get by. This is the heart and soul of a family middle-class tax cut. 
Many kids will not be going off to college. They will never be going to 
college. But even if they are, many of those families need the money 
now. They have a flat tire and they need to replace a tire. They need 
shoes or to go on a school trip. They need to make their own decision 
about how to spend their money.
  This is important to me. It is important to American families. I 
salute Senator Gramm for raising this issue, and I am in support of 
this amendment.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I yield to the Senator from Louisiana 
such time as he may require.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Massachusetts has the floor.
  Mr. MOYNIHAN. Would the Senator from Massachusetts, who has been Job-
like--he has been No. 2 since 9:30--would he allow 3 minutes to the 
Senator from Louisiana and 3 minutes to the Senator from Nebraska to 
respond, and the remainder of the time is his?
  Mr. KERRY. Mr. President, could I inquire how much the remainder of 
the time is?
  The PRESIDING OFFICER. There is approximately a half an hour in total 
time.
  Mr. KERRY. I would be very content with that.
  Mr. MOYNIHAN. You have been very patient. We thank you, sir.
  The PRESIDING OFFICER. That would require unanimous consent.
  Mr. MOYNIHAN. I ask unanimous consent that that may occur.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BREAUX addressed the Chair.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. My friend from Texas would refer to this provision as the 
``rotten'' provision. I am sure what he meant to say was the 
``forgotten'' provision, because he obviously forgot what we did to 
this in the Finance Committee when we greatly improved it. If anyone 
wants to have a $500-per-child tax cut, we presume that it is for the 
children.
  Under the suggestion of the Senator from Texas, we would give the 
family a $500 tax rate to use for whatever they want. If they want to 
use it to go to the casino, fine. If they want to use it to buy a six-
pack of booze every week, fine. It is about $9.66 a week, so under the 
provision of the Senator from Texas they could take it, put it in their 
pocket, and don't use it for children at all--just do whatever you want 
with it.
  Interestingly, the Citizen Council, a respected voice of both 
parties, says, ``In our view, a no-strings child credit is a cruel hoax 
on the very children who are supposed to benefit from it. We expect 
that most of the credits would disappear into the family's general 
budgets, or be used to pay bills''--and I add, not for the children, 
that the tax credit is supposed to be for.
  What we have done is to craft a compromise from zero to 13, the 
family can use it for anything they would like, no strings attached, 
but from 13 to 17, when children need to be educated, there is an 
obligation that the tax credit be used to educate the children. For all 
of us who want to help children and our families and help parents raise 
those children, what is better than to give that family help and 
assistance in educating that child?
  Some say the Tax Code should not tell people what to do. The Tax Code 
is full of examples--a mortgage deduction is only available if you buy 
a house; a charitable contribution is only available if, in fact, you 
give to charity. So what I think the Finance Committee was able to do 
was to erect a compromise, a blending of what that suggestion was 
coming from this side, blending it with what many of our people said, 
use it for educating children. If we are going to have a tax credit for 
children, let's at least ensure that part of the time it is used for 
one of the basic functions that a family has as an

[[Page S6464]]

obligation to those children, and that is to educate those children.
  So I think that what we have come forward with makes a great deal of 
sense. It is a legitimate compromise. It adds to the education package 
which I think everyone is for, and it helps families with small 
children.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. This proposal began in 1995. I heard the Senator from 
Texas describe it as a sacred part of the Contract With America.
  In 1995, Senator Lieberman and I introduced KIDSAVE as a modification 
to this $500 per child tax credit, and it set up a savings account for 
children. It was mandatory. The idea was that Americans are not saving 
enough money, they are struggling to put aside savings, and that is 
especially revealed when you look at one of the most important parts of 
this tax proposal, which is the reduction of tax on estates.
  Mr. President, about 1 percent or 2 percent of Americans have estates 
over $600,000. It is a provision that affects a relatively small number 
of Americans. I appreciate my colleagues on the other side of the aisle 
saying that is one of their top concerns, that 1 percent or 2 percent 
of Americans who have estates over $600,000. KIDSAVE is put together as 
a consequence of our concern for the 98 percent of Americans that do 
not. The only way that you will be able, particularly for middle-income 
people, to acquire that wealth is to save a little bit of money over a 
long period of time.
  So I say we are not breaking any deal. We introduced this bill in 
1995. It was endorsed at the time by the Heritage Foundation. The only 
thing that is going on here, in my judgment, is the Christian Coalition 
is arguing that this is a violation of something they want. So they are 
rallying the troops and trying to get it changed. I appreciate the 
Senator from Texas does not like the proposal, but it was introduced in 
1995, and its purpose is to help Americans generate wealth. We know we 
cannot redistribute wealth. We are trying to enable Americans to create 
wealth by saving their money.
  The $500 child tax credit goes from 0 to 17. That is the law. It ends 
at age 17. I would have preferred 0 to 4, frankly, for this thing to go 
into effect. It was a compromise. We agreed to do this as a consequence 
of the desire to increase the amount of money that Americans have, not 
only for education but this money, particularly for those that are not 
going to school, would be better off staying in a savings account until 
retirement so those individuals can look to their retirement and say in 
addition to having Social Security there for them they will have a 
source of wealth.
  So in my view, this is an amendment that would deny Americans the 
opportunity to acquire wealth. I think it is a very important provision 
in this Tax Code.
  I hope my colleagues will vote against the Gramm motion to strike.
  Mr. MOYNIHAN. I endorse wholeheartedly the position that the Senators 
from Louisiana and Nebraska have stated on behalf of the committee 
bill. I thank them.
  I yield the balance of our time to the distinguished Senator from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, I thank the distinguished party manager. I 
will probably not use all the time but I ask unanimous consent that the 
balance of the time I have be divided between Senator Dodd and Senator 
Kennedy.

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERRY. Mr. President, we just heard a debate about the $500 tax 
credit. We heard a number of Senators state what a critical component 
of the effort to restore families this is and how important it was to 
the early efforts of the contract. The fact is that the committee bill 
will deny 38 percent of the children in the United States with the 
lowest incomes access to a tax credit. In Massachusetts, as a matter of 
fact, 46 percent of all children would be excluded from receiving this 
important tax credit. That means about 850,000 children, plus, in my 
State, will not receive a tax credit.
  Now, I ask my colleagues what kind of profamily policy takes $81 
billion over the next 5 years but completely denies this help to the 
9.5 percent of all children in families with the lowest 20 percent of 
incomes, and denies the tax credit to 86.6 percent of all the families 
in the second 20 percent of income.
  I direct my colleagues' attention to this chart. These are the 
percentage of children ineligible for the child tax credit, the way it 
has been structured by the Finance Committee. Fully 99.5 percent of the 
lowest 20 percent, and 86.6 percent of the children in the second fifth 
will not get the benefit of this credit.
  I propose, therefore, a very simple amendment so that working 
families could have access to this credit. My amendment that I will 
send to the desk momentarily lets those families whose net Federal 
taxes are greater than zero get a full or partial children's tax 
credit, and the amount accomplishes this in a very simple way. It makes 
the credit refundable to the full extent of the family's Federal 
payroll taxes once it has offset all of the family's income tax 
liability.
  This refundability, I want to emphasize, is not my idea. The 
refundability was a provision of the Republican's Contract With 
America. It was in the child tax credit bill which was sponsored by the 
Senator from Texas, who a few moments ago was talking about the virtues 
of providing a $500 tax credit to children. In fact, Senator Coats, 
Senator Lott, Senator Gramm and others on the Republican side supported 
the very proposal that I am now offering which would, indeed, allow 
those children to be able to get that credit.
  My colleagues on the other side of the aisle were right when they 
proposed a refundable credit. And Speaker Gingrich was right when he 
called the refundable credit in the Contract With America the ``crown 
jewel'' of the contract.
  As Marshall Wittman, the Legislative Affairs Director for the 
Christian Coalition, said, ``Allowing families with children to retain 
a larger share of their hard earned income will be a first step toward 
freeing America's parents from the national treadmill of working long 
hours at the expense of time with their children.'' The Heritage 
Foundation endorsed the children's tax credit in the contract, which 
was a refundable tax credit.
  Mr. President, I am proposing that we adopt the Contract With 
America's refundable tax credit which would provide 7 million more 
children with access to the credit, to the tax credit. The simple 
question is, why would you want to deny those people who work--we are 
not talking about people who are solely relying on welfare, or people 
who get the earned-income tax credit; we are talking about two-parent 
families with two children who are working and paying taxes, who still 
will not get credit the way it has been structured under the Republican 
proposal. These children live in families that pay income or payroll 
taxes, and payroll taxes are a reflection of work. Work, after all, is 
what we are trying to put a premium on--both in the welfare reform 
bill, as well as, I think, in a $500 credit.
  My amendment would take the refundability against payroll taxes from 
the Contract With America and it lowers the income phaseout more slowly 
and phases in the credit by the age of the child. The reason we phase 
in the credit and the reason we do the income difference is to keep 
this revenue neutral. It is revenue neutral. I want to emphasize, this 
amendment takes the Contract With America payroll provisions but it 
remains revenue neutral.
  It would seem to me, Mr. President, that all of us would want to try 
to find a way to guarantee that families earning $110,000 are not going 
to get a $500 tax credit, while a family working and earning $20,000 
gets nothing--nothing. That is exactly what happens under this proposal 
the way it is done.
  My credit would begin to phase out at $60,000 and it would finish at 
$75,000. By doing that, we manage to spread it to those people at the 
lower end of the income scale, most of whose income goes into the 
payroll tax but who nevertheless are working and deserve as much of a 
break as anybody else. My amendment would allow the bottom 80 percent 
of American families to get a full or partial credit, and the richest 
20 percent would not. A very simple tradeoff.

  Mr. President, I think it is critical to understand that the tax 
bill, as it

[[Page S6465]]

comes out of the Finance Committee, which we are voting on, that the 
tax bill credit for children as currently written, most of the children 
who would be denied the credit or have the credit reduced live in 
families who are working and paying Federal taxes. It is just that 
their tax burden often amounts to several thousand dollars, even after 
the effects of the earned-income tax credit are accounted for. The 
claims that these peoples pay no taxes is simply incorrect.
  The Joint Tax Committee data issued this week shows that taxpayers 
with incomes between $10,000 and $20,000 will owe an estimated $191 
billion in Federal taxes. Taxpayers with incomes between $20,000 and 
$30,000 will owe $442 billion in Federal taxes between 1997 and the 
year 2002. These figures from the Joint Tax Committee reflect the fact 
that these taxes are owed after the EITC benefits are subtracted.
  Mr. President, the vast majority of the taxes that these families 
pay--we have to acknowledge, if they are working and they are playing 
by the rules and they are trying to climb up the economic ladder, why 
should they be denied access to the $500 credit--the taxes that they 
pay consist mostly of payroll taxes because that is the way life is for 
people at that end of the income scale.
  I hope my colleagues who say that this is a fair way to adjust more 
appropriately what has happened in the committee mark --I want to 
emphasize that a two-parent family, the kind of family that most people 
in the Christian Coalition or in the Heritage Foundation or others feel 
have been the most hard hit in America in the recent years, a two-
parent family with two children with an income of $20,000, under my 
proposal, would get the full $1,000 credit, $500 for each child under 
this proposal, which is the contract proposal. They would not get that 
under the proposal of the Finance Committee.
  Mr. President, I think if we are going to accept the notion that we 
will provide the children's credit for as many working taxpaying 
families as possible, it is important to change the base and to 
guarantee we are reaching those kids.
  Everybody knows what has happened to income distribution in America 
in the last 15 years, how the bottom has not been the part of America 
that has grown. I might add, here is a chart that shows the percentage 
of working families whose payroll taxes exceed their income taxes. They 
are all in the bottom three-fifths of America. You have 99 percent in 
the bottom fifth, 97 percent in the second fifth, and 90 percent in the 
next fifth--all work, all have payroll taxes that exceed their income 
tax, and, therefore, do not get the full benefit of the credit.
  Finally, I simply point out to my colleagues that income for young 
working families has not increased in over 20 years. These are the 
young families of America earning $18,000 in the lowest quintile on 
average, and $30,000 in the second quintile on average. Look at what 
happened to payroll taxes during that period of time. Payroll taxes in 
1975 were $374 for that family. But, in 1985, they were $2,171. In 
1995, they were $2,523. So the payroll taxes went up, but at the same 
time in both quintiles and, yet, their income went down and they are 
not going to get the credit.

  So I respectfully hope that my colleagues will join in an effort to 
rectify what I hope is simply an oversight in distribution and help to 
guarantee that every family in America that works, that is struggling 
to raise their children, can actually have the benefit of this $500 
credit, and that would, I think, be deemed a benefit to the Senate and 
to the country if we were to make that happen.
  Mr. President, under the previous agreement, I yield the balance of 
time divided equally to Senator Dodd and Senator Kennedy.
  The PRESIDING OFFICER. There are 10 minutes left on the Democratic 
side.
  Mr. DODD. On the bill?
  The PRESIDING OFFICER. There are 10 minutes on the proponents' side.
  Mr. COATS. Parliamentary inquiry, Mr. President.
  The PRESIDING OFFICER. The Senator will state it.
  Mr. COATS. Mr. President, I don't understand why we are allocating 
time here because in the unanimous-consent request--I specifically 
asked the Chair and asked in the request if the three amendments agreed 
to under the unanimous-consent request were on any kind of a time 
limit. The answer was, no, they are not on any kind of a time limit.
  I further raised the statement saying that there are a number of 
Senators under the agreement that would stay beyond the three to offer 
and discuss their amendments this evening. They would be allowed to 
speak for up to 10 minutes in support of their amendments. I don't 
believe we are under a time agreement and that there needs to be 
allocation of a time agreement. This Senator has not yet spoken on the 
Gramm amendment, which I would like to do. I don't feel there is any 
constraint on the amount of time I have to speak.
  The PRESIDING OFFICER. Under the consent agreement, there was still 
time remaining on the bill. The time remaining on the bill could be 
used by each side presenting their amendments. There was an order to 
the amendments. We are on the third one, which was the Kerry amendment. 
Senator Kerry was allotted the time on the proponents' side, which was 
20 minutes. There is an opponent side of 20 minutes that would be 
allocated, which would be the majority party side.
  Following the expiration of all time, which would be the remaining 38 
minutes, then there will be a period for morning business where any 
Senator can be recognized for up to 10 minutes to introduce his motion, 
which would put it in order for tomorrow, but in no particular order 
for tomorrow.
  The Senator from Massachusetts is recognized.
  Mr. KERRY. If I could say to my colleague, I had the full amount of 
time under the unanimous-consent agreement. I chose to truncate my 
remarks in order to accommodate my colleague within that. I don't mean 
to upset the order.
  Mr. COATS. No. Mr. President, I am perfectly content to let the 
Senator take whatever time he wants. It is this Senator's understanding 
that the unanimous-consent agreement supersedes the reconciliation 
instructions regarding time under the agreement. The Senator from 
Massachusetts can offer any amount of time he wants to his colleagues. 
I am more than willing to wait for that.
  The PRESIDING OFFICER. We have already ruled that, as far as 
allocating time to anybody else, there would have to be a unanimous 
consent agreement by that particular person who is speaking; otherwise, 
the time is up for grabs.
  Mr. COATS. Further parliamentary inquiry. That is not my 
understanding of what the unanimous consent request was. The reason I 
am stating this is that I specifically asked the majority leader if my 
interpretation was correct, and he specifically said yes and included 
it in the unanimous-consent agreement. The Parliamentarian may not have 
heard that. I don't believe there is a ruling of that. In any event, I 
don't want to split hairs. I think everybody will have an opportunity 
to speak. He doesn't have to limit the Senator from Connecticut to 2 
minutes. He can talk for 20, as I understand the unanimous-consent 
agreement.
  Mr. KERRY. Mr. President, if I can simply clarify something. But 
before I do, I will send my amendment to the desk.


                           Amendment No. 554

 (Purpose: To allow payroll taxes to be included in the calculation of 
 tax liability for receiving the children's tax credit, and for other 
                               purposes)

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

       The Senator from Massachusetts [Mr. Kerry], for himself, 
     Mr. Conrad, and Mr. Johnson, proposes an amendment numbered 
     554.

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

       On page 13, beginning with line 9, strike all through page 
     17, line 12, and insert the following:
       ``(2) Limitation based on adjusted gross income.--The 
     dollar amount in subsection (a)

[[Page S6466]]

     shall be reduced (but not below zero) ratably for each $1,000 
     (or fraction thereof) by which the taxpayer's modified 
     adjusted gross income exceeds $60,000 but does not exceed 
     $75,000. For purposes of the preceding sentence, the term 
     `modified adjusted gross income' means adjusted gross income 
     increased by any amount excluded from gross income under 
     section 911, 931, or 933.
       ``(3) Limitation based on amount of tax.--The aggregate 
     credit allowed by subsection (a) (determined after paragraph 
     (2)) shall not exceed the sum of--
       ``(A) the excess (if any) of--
       ``(i) the taxpayer's regular tax liability for the taxable 
     year reduced by the credits allowable against such tax under 
     this subpart (other than this section), over
       ``(ii) the taxpayer's tentative minimum tax for such 
     taxable year (determined without regard to the alternative 
     minimum tax foreign tax credit), plus
       ``(B) the excess (if any) of--
       ``(i) the sum of--

       ``(I) the taxpayer's liability for the taxable year under 
     sections 3101 and 3201,
       ``(II) the amount of tax paid on behalf of such taxpayer 
     for the taxable year under sections 3111 and 3221, plus
       ``(III) the taxpayer's liability for such year under 
     sections 1401 and 3211, over

       ``(ii) the credit allowed for the taxable year under 
     section 32.
       ``(c) Qualifying Child.--For purposes of this section--
       ``(1) In general.--The term `qualifying child' means any 
     individual if--
       ``(A) the taxpayer is allowed a deduction under section 151 
     with respect to such individual for the taxable year,
       ``(B) such individual has not attained the applicable age 
     as of the close of the calendar year in which the taxable 
     year of the taxpayer begins, and
       ``(C) such individual bears a relationship to the taxpayer 
     described in section 32(c)(3)(B).
       ``(2) Applicable age.--For purposes of paragraph (1), the 
     applicable age is 13 in calendar year 1997, and increased by 
     1 year for each of the next 4 succeeding calender years.
       ``(3) Exception for certain noncitizens.--The term 
     `qualifying child' shall not include any individual who would 
     not be a dependent if the first sentence of section 152(b)(3) 
     were applied without regard to all that follows `resident of 
     the United States'.
       ``(d) Taxable Year Must Be Full Taxable Year.--Except in 
     the case of a taxable year closed by reason of the death of 
     the taxpayer, no credit shall be allowable under this section 
     in the case of a taxable year covering a period of less than 
     12 months.
       ``(e) Recapture of Credit.--
       ``(1) In general.--If--
       ``(A) during any taxable year any amount is withdrawn from 
     a qualified tuition program or an education individual 
     retirement account maintained for the benefit of a 
     beneficiary and such amount is subject to tax under section 
     529(f) or 530(c)(3), and
       ``(B) the amount of the credit allowed under this section 
     for the prior taxable year was contingent on a contribution 
     being made to such a program or account for the benefit of 
     such beneficiary,

     the taxpayer's tax imposed by this chapter for the taxable 
     year shall be increased by the lesser of the amount described 
     in subparagraph (A) or the credit described in subparagraph 
     (B).
       ``(2) No credits against tax, etc.--Any increase in tax 
     under this subsection shall not be treated as a tax imposed 
     by this chapter for purposes of determining--
       ``(A) the amount of any credit under this subpart or 
     subpart B or D of this part, and
       ``(B) the amount of the minimum tax imposed by section 55.
       ``(f) Other Definitions.--For purposes of this section, the 
     terms `qualified tuition program' and `education individual 
     retirement account' have the meanings given such terms by 
     section 529 and 530, respectively.
       ``(g) Phasein of Credit.--In the case of taxable years 
     beginning in 1997, subsection (a)(1) shall be applied by 
     substituting `$250' for `$500'.''

  Mr. ROTH. Mr. President, parliamentary inquiry.
  The PRESIDING OFFICER. The Senator will state it.
  Mr. ROTH. Is it proper to offer an amendment under the unanimous-
consent agreement?
  The PRESIDING OFFICER. The Senator from Massachusetts, under the 
unanimous consent agreement that we had earlier, is allowed to offer 
one tonight.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KERRY. Mr. President, it may be that the Senator from Indiana 
missed it, but I asked unanimous consent at the opening of my comments, 
when I was yielded the full amount of time, that the balance of time 
that I didn't use be divided equally, and that consent order was 
entered into. I might add, if the Senator was correct, it was all of 
our understanding that after the expiration of all the time on the 
bill, the Senate would go into morning business, during which time 
Senators would have the opportunity to speak for as long as they 
wanted. So there is not in effect a time limitation with respect to the 
after period of the bill.
  The PRESIDING OFFICER. A clarification on that. The consent order did 
call for 10 minutes per person in morning business.
  Mr. KERRY. Well, Mr. President, I have been informed that Senator 
Kennedy now does not wish to use his time. I ask unanimous consent that 
the balance now go to Senator Dodd, at which point it would revert to 
the other side.
  The PRESIDING OFFICER. The Senator from Indiana and those on this 
side have up to 20 minutes following the 8\1/2\ minutes of the Senator 
from Connecticut that will be allocated under the unanimous-consent 
agreement. The Senator from Connecticut is recognized for up to 8\1/2\ 
minutes.
  Mr. DODD. Mr. President, rather than confuse this situation even 
further, I am going to yield for the purposes of offering an amendment 
to the distinguished Senator from Vermont. It is his amendment, and I 
am a cosponsor with him. I yield for that purpose. I ask unanimous 
consent that I may yield for that purpose.
  The PRESIDING OFFICER. The Senator doesn't have the right to offer an 
amendment under this agreement. Only the managers can offer amendments 
under the agreement, until we get into the period for morning business, 
at which time--
  Mr. DODD. I ask unanimous consent that I be allowed to offer an 
amendment.
  Mr. JEFFORDS. I ask unanimous consent--
  Mr. COATS. Mr. President, I hate to be a fly in the ointment here. I 
have been waiting to speak on one of the three designated amendments in 
the unanimous consent agreement, the Gramm amendment. I have not yet 
had that opportunity. My understanding is that further amendments come 
after these three. I think if we just get going, we can get this done 
and get to the other amendments.
  The PRESIDING OFFICER. The right to offer amendments is limited to 
the managers. The right to speak is not.
  Who wishes recognition?
  Mr. COATS. Mr. President, I would like to take just a few moments and 
I will be brief.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.


                           Amendment No. 552

  Mr. COATS. Mr. President, the hour is late and the week has been 
long. We all need our rest. I want to take a few moments to speak in 
support of the Gramm amendment, the amendment we discussed just before 
the discussion of the Kerry amendment.
  The reason I want to speak in favor of the Gramm amendment is that, 
as someone who has been an original sponsor and long-time proponent of 
the child tax credit, we were surprised--first of all, we were 
delighted when, first, the President, and then the Budget Committee 
endorsed the concept of the $500-per-child tax credit. It is long 
overdue. It is only a partial step in remedying an inequity that has 
existed for a long, long time, in terms of giving families the ability 
to provide for their children.
  Way back in the 1940s, Congress decided that raising families and 
raising children was a good thing. They provided a dependents exemption 
for that purpose. They did not index it for inflation. And over the 
years, because it was not indexed for inflation and because it was not 
raised by an act of Congress, the value of that particular exemption 
decreased--that is, the dependents exemption. Now, we finally doubled 
that exemption, and now index it, after the 1986 tax law. But it was 
still a third to a fourth of what it should have been if it had 
maintained pace with the cost of raising children. So families were 
squeezed and fell further and further behind other special interests 
that were granted benefits in the Tax Code.
  We finally focused on the importance of raising children and the 
importance of families and the importance of providing support for the 
family. I am pleased that we are here discussing the $500 tax credit. I 
am pleased that the chairman of the Finance Committee incorporated the 
$500 tax credit in their mark. But I rise in support of the Gramm 
amendment because, in doing so, a provision was made whereby the credit 
would only be available up through the age of 12. At that point, the 
credit was available, but it was

[[Page S6467]]

conditioned on the fact that the money be put into an education savings 
account.

  Now, it is ironic that, at the very time when the cost of raising 
children takes a dramatic jump, we take away the ability of parents to 
use that credit to pay for expenses related to those children.
  As this chart shows, entitled ``Annual Child Rearing Costs; Children 
Ages 0 to 17,'' there is roughly a $7,850 cost per child for children, 
ages 0 to 2. It jumps to over $8,000 for children, ages 3 to 5. It goes 
to nearly $8,200 for children, ages 6 to 8. And it stays about that 
level through the age of 11. But at the age of 12--at no surprise to 
any parent in this room, or any parent trying to raise young children--
there is a dramatic increase in the cost per child when you hit the 
ages of 12 to 14, and it continues to 15 to 17. Why is that? It is 
because no longer are you able to tell your children that the $5 Kmart 
tennis shoes are good enough to wear to school. All of a sudden, they 
discover the Michael Jordan tennis shoes, and it is now $140 a pair. 
All of a sudden, the dentist says it is time that you saw an 
orthodontist, because if you want your child to have straight teeth, 
this is the time. The baby teeth are gone, the new teeth have come in, 
and we all want our kids to have perfect smiles. Some might be for 
cosmetic reasons, and many might be for a misaligned jaw or an 
overbite, and so forth. And clothes begin to cost more. Kids start 
thinking about the opposite sex. So that involves the thought of 
beginning to date and, suddenly, you are buying movie tickets and, 
suddenly, they are going out for burgers, et cetera. It is no surprise 
to any parent that that is the point in time which the cost really 
escalates, particularly when they get into the 15 to 17 age range. Then 
they are starting to work after school and they need transportation. 
Heavens, what an embarrassment it would be to have to ride the school 
bus. You need a car, et cetera, et cetera. There are a lot of necessary 
costs at this particular time, also.
  At that very time when it costs more, the Finance Committee has said, 
``We recognize that it costs more, but you can't use the money for 
anything except the purpose we deem is acceptable.''
  Now, it is a worthy thing to begin to save money for college, for 
secondary education, but not all children go to college. In fact, 
apparently, a large percentage don't go to college. So the education 
savings account that is begun or is mandated at the age of 13--they 
must use the child credit for that. I think that serves a purpose that 
we should not support.
  Now, some have suggested that the reason all this was done was to 
make the budget numbers balance, that it was to save money because 
those families that would not send their children to college, or didn't 
have plans to send their children to college, or didn't have the funds 
to accumulate for college, would not take the $500 tax credit and, 
therefore, are a savings. I hope that is not the motivation. I don't 
think it was the motivation, but that may be the unintended result. So 
we have a situation here where, ultimately, what we come down to is 
that either the parents are going to decide how to use the funds on the 
child tax credit in the best interest of their children, or the Senate 
Finance Committee will decide.
  Once again we continue the practice of Government knows best--not 
father knows best, not mothers know best, not family knows best, but 
Government knows best. We will tell you how you should spend or save 
money for your child. We will determine that it can only be used for 
one purpose. You have to continue a secondary education--a noble goal, 
a worthy goal, and one that I think we want to hold out as an option. 
But it should not be a mandate. It should not be limited to that 
particular goal.
  There are a lot of families in this category that have expenses for 
their children at the ages of 13, 14, 15, and 16 that are more critical 
than forcing them to put the money into a savings account. Hopefully, 
they will be in a financial position, if we think they can put the 
money into a savings account. Again, I say it is a worthy goal. But it 
ought to be an option to those parents. It shouldn't be a mandate. We 
should not have a Government entity--whether it is an elected 
Government entity or a nonelected Government entity--making a decision 
as to how that money should be used.
  It is almost humorous to say we know better about how a mother and 
father ought to spend money for their child than they do, that we know 
their family situation better, we know their education situation of 
their children better, we know their future plans better than the 
family knows its own plans.
  So, as well-intended as this mark in the Finance Committee package 
might be, I think that the amendment of the Senator from Texas makes 
perfect sense because it simply says if you want to do that with a $500 
tax credit, fine, you can do that. We will allow you to set up an 
education savings account.
  One of the first bills I introduced when I came to Congress a long 
time ago was an education savings account. I think it is a worthy goal, 
a worthy idea. But if you deem that there are other purposes more 
appropriate, then we will allow you to do that also.
  To suggest that at the age of 13 suddenly the 13-year old is given 
the money and the parents are going to say, ``I am going to take the 
money and go down to the casino,'' like the Concord Coalition 
suggested--talk about arrogance. Talk about an arrogant conclusion; 
that is, that parents don't care about their kids, that they are either 
going to spend the money on beer or they are going to spend the money 
at the casino almost defies belief.
  Who do we trust here? Do we trust the parents? Do we trust the 
family? I am sure there will be examples. You can pick up the paper and 
read about some wayward father who took the tax credit and went down to 
the casino. Sure, that will happen. But that doesn't begin to describe 
the average American family who cares about their children, who want 
the best for their children, and are in the best position to make the 
decision as to how that money ought to be spent.
  So I am a strong supporter of the Gramm amendment. I think that we 
ought to modify this. Whether this is put together to create a deal--it 
is a lousy deal. I won't call it a rotten deal. It is a lousy deal, and 
the wrong way to allocate these resources. Let's leave that decision in 
the hands of the parents and not in the hands of the Government.
  Mr. SESSIONS. Mr. President, will the Senator yield for a question?
  Let's imagine a single mother who is teaching school with three 
children ages 17, 15, and 12 hoping to save money for college and just 
getting by. The transmission breaks on the car, and there is a $400 
bill. Who should decide who ought to spend that money? The Members of 
this body, or that mother?
  Mr. COATS. Maybe that mother needs that car to get to work so she can 
continue to make money so she can send her children to school, but we 
will be effectively telling her, ``You can't fix that transmission.'' 
We will tell that mother, ``You can't use that money to buy a computer 
because maybe your child needs special tutoring.'' And, ``You can't buy 
a software program to give that child better math tutoring so they will 
be able to go to college. You can't use that money for that. You can't 
use that money to hire a learning center or some other organization to 
help your child prepare for the SAT's so that they can get into 
college. No. You have to do what the Finance Committee says. The 
Finance Committee says you have to put it in an education savings 
account.''

  I just think it is wrong. As I said, it may be well intended and well 
motivated, but the consequences are such that I don't think we have 
thought these things through.
  That is why the amendment of the Senator from Texas ought to be 
supported.
  I thank my colleague from Alabama for his contributions.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. There are approximately 8 minutes left on the 
debate.
  Mr. JEFFORDS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.

[[Page S6468]]

  Mr. JEFFORDS. Mr. President, may I make an inquiry? Is it in order 
for me to ask unanimous consent to offer my amendment at this time?
  The PRESIDING OFFICER. The Senator may ask.
  I have been authorized to object.


                               Child Care

  Mr. JEFFORDS. We will discuss the amendment which we will be offering 
on the floor at the appropriate time.
  Mr. President, it is difficult to find high quality child care that 
is appropriate, affordable, and convenient for children today. How 
government can help parents achieve that goal is a very difficult and 
compelling question. I have, with my cosponsors Senators Dodd, Roberts, 
Kohl, Snowe, Landrieu, and Johnson put together an amendment which we 
will be offering. On the one hand the amendment will make it easier to 
find better child care that is more affordable. At the same time the 
amendment does some engineering by making it possible for more child 
care facilities and individual providers to improve their services and 
receive higher tax deductions for those efforts. My amendment also to 
shifts the amount of money that is available to parents in the child 
care tax credit and the dependent care assistance program to help them 
afford a better quality of care they may now be available to them. This 
combination of assistance for providers and parents will encourage that 
the child care facilities and individual providers will provide better 
care for the 12 million children who are in child care.
  How we accomplish this is: First of all, to help middle- and low-
income families, the amendment increases the level of income which 
qualifies for the maximum amount of the child care tax credit benefits 
$10,000 to $20,000. We make the child care tax credit refundable for 
low-income working families who qualify for the EITC. Then we go to the 
other end of the scale and phase the tax credit down, but not out, for 
wealthier people with incomes over $70,000, then we can pay for the 
increases at the lower end.
  I also feel strongly that it is important to assist those businesses 
that are providing child care for their employees. The amendment 
creates an incentive which will allow businesses to receive a 50 
percent tax credit for up to $150,000 in expenses to operate, improve, 
and develop appropriate child care for their employees.
  As we all know from recent studies, the healthy development of 
children can very dramatically enhance, including their potential for 
future educational and social achievement, depending upon the kind of 
nurturing and affection they receive early in life, and the 
developmental and educational activities they are exposed to at birth. 
In order to make sure that kind of care is available for those children 
who need to be in child care while their parents work. This amendment 
provides the necessary incentives so they can find and afford to 
receive the care that will be safe and provide their children with a 
better chance for healthy development. That will be required if we 
expect to have a skilled workforce in the new world of the future.
  What we are trying to do here is to balance the need to reduce the 
deficit and get the budget under control, with the need to improve the 
quality of child care for all children who must use it. Keeping in mind 
the funds that are available. We have offsets to pay for this child 
care amendment, which I think are very appropriate.
  I yield to the Senator from Connecticut for a further explanation.
  Mr. DODD. Mr. President, first of all, I want to commend my colleague 
from Vermont. This is an amendment which will be offered by the 
distinguished Senator from Vermont, along with myself, Senator Roberts 
of Kansas, Senator Kohl of Wisconsin, Senator Landrieu, Senator Snowe, 
Senator Johnson, and others.
  Mr. President, this is a modest proposal that is designed to do what 
all of us agree needs to be done.
  We have provided over the last number of years some significant 
support for child care in this country. For example, there is the Child 
Care Development Block Grant program which Senator Hatch and I authored 
back in the mid-1980's. There is also the Head Start program, which has 
been very, very helpful to so many families in this country in 
providing a positive learning environment for children. There is also 
the current child care tax credit. All of these are designed to provide 
assistance to those families today who are trying to juggle the very 
difficult task of providing an income for their families and also a 
safer environment for their children.

  Good quality child care can no longer be considered a luxury. There 
are 13 million children every day in this country who are placed in 
child care settings. There are an awful lot of single parents out there 
raising families. There are two-income families that are providing for 
their children. These families want to be sure that their children are 
in a safe place.
  We have done a great deal to help families with the affordability of 
child care. We have done a lot to increase the availability of child 
care.
  What Senator Jeffords, Senator Roberts, Senator Kohl, myself, Senator 
Snowe, Senator Landrieu, Senator Johnson, and others are trying to do 
is to use the Tax Code to try to do a better job of dealing with 
quality.
  I want to be very clear that there is nothing in this amendment which 
sets national standards for quality--as our colleagues over the years 
have had some serious reservations about setting national child care 
quality standards. This amendment simply defines a quality setting as 
one that meets standards or certification set by States, local 
governments or private, non-profit entities--we don't specify any 
standards--what those standards must be. With this amendment we just 
try to create incentives so that child care settings will get some 
encouragement to improve quality.
  Let me just enumerate what some of those incentives are.
  We expand the tax deductions for businesses who contribute 
educational equipment and supplies to public child care providers.
  We provide tax incentives to families who seek out higher quality 
care, realizing that such care is more expensive.
  Let me step back, if I can, for a minute.
  Mr. President, earlier this year, national magazines had cover 
stories on early childhood development. We now know that in the 
earliest stages of a child's life--zero to 36 months--it is absolutely 
critical that they be nurtured and cared for so that they can develop 
to their fullest potential. We've all heard by now about how the 
synapses in the brain of a child are formed --1,000 trillion of them 
just in those earliest years. Now we have scientific evidence of how 
important it is to read to children, to hold children, and to play with 
children in order to wire their brains for the skills they'll need 
later.
  Obviously, the best caretakers of children are loving parents. That 
is the best child care--be cared for by prepared parents. No one can 
argue against that. But we also know that there are a lot of these 
parents who can't be there all day with their children.
  So what do we do to proximate that caring, prepared parent situation 
when the parent is unable to be there? What are we trying to do? Do we 
leave the situation to chance and say to parents, ``Good luck. Do what 
you can. Hopefully you can find the kind of care you would provide if 
you were there.'' That is a difficult statement to make to parents 
since we all understand that not every setting is a safe one or a 
healthy one, that in fact there are vast differences in the quality of 
child care.
  Rather than applying any rigid standards here, however, we will leave 
to the States and to communities to decide what works best. And then we 
provide the tax incentives to businesses to contribute equipment and 
supplies to help to improve the quality child care. We provide the 
incentives to those parents who seek out quality child care because it 
can cost a bit more. In doing all this we will hopefully encourage 
other child care providers to improve their own quality and to 
ultimately raise the levels of quality around the country.
  With this amendment we also make the child care tax credit refundable 
because we realize that as we go from welfare to work that we are going 
to have a lot of these poorer families out there who are going to have 
difficulty affording quality child care. Refundability is critical--if 
we only provide tax credits to those who pay

[[Page S6469]]

taxes, then we miss helping a lot of these poorer families who can 
truly use the assistance.
  It is certainly a lot more expensive to provide child care than it is 
to provide welfare in most States. So as people move from welfare to 
work, do we want them leaving kids in the street, where hopefully a 
neighbor or someone else is around to keep an eye on them, or should 
they be in a quality environment? I think all of us agree they should 
be in a quality environment and one that their parents hopefully can 
afford.
  Senator Jeffords has provided us with a way to reach this goal by 
using the Tax Code. It is not a direct appropriation. We realize how 
difficult it is to get funding for child care programs. Through the 
largess of our membership here over the last number of years, we have 
increased the child care block grant to $1 billion. That amount of 
money, but it does not even approximate the demand. And only 4 percent 
of that total amount is there for quality--hardly enough, really, when 
you think of the tremendous increase in demand for child care that is 
now going to occur across the country as a result of the enactment of 
welfare reform.
  This proposal is designed to provide incentives to businesses to set 
up quality child care center and to families to seek quality care. We 
pay for this by making minor adjustments for those receiving the tax 
credit at the highest income levels by reducing the credit 
progressively by 1 percent, but never going below a credit of 10 
percent of allowable expenses. So by just adjusting the benefit a bit 
we can provide the resources here to promote quality.
  I urge our colleagues' support. This is going to need 60 votes, and 
that is a hard number to reach, but we ought to be doing everything we 
can to improve the quality of child care. This ought not to be a 
partisan debate. We have come up with an offset. We pay for this with 
minor adjustments to the Tax Code. This is a bipartisan amendment. With 
my colleagues from Vermont, Kansas, from Maine, from Louisiana, from 
Wisconsin and South Dakota, we have come up with a good proposal that 
we think meets the concerns that some have raised and still provides a 
way to ensure through the Tax Code that child care is not only 
available and affordable but also high quality.
  And so, at the appropriate time, Mr. President, when the amendment is 
offered by the distinguished Senator from Vermont, we would urge our 
colleagues to be supportive.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DODD. I thank my colleague from Vermont.


Amendment Nos. 556, 557, 558, 559, 560, 561, 562, 563, 564, and 565, en 
                             bloc, and 553

  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. I ask unanimous consent that the following amendments be 
considered and agreed to en bloc: first, McCain-Levin: Sense of the 
Senate regarding stock options with a statement; 2. Enzi: Sense of the 
Senate regarding estate tax with a statement; 3. Dodd: Forgiveness of 
student loans; 4. Grams: Exception to UBIT for charitable giving; 5. 
Dorgan: Disaster relief. 6. Dorgan: IRA withdrawal for disaster relief; 
7. Biden: Survivors' benefits/public safety officials; 8. Dodd-D'Amato: 
Disability benefits for firefighters and officers; 9. Boxer: Section 
401(k) and employer stock; and No. 10. Daschle: Non-Amtrak States. I 
urge their adoption.
  In addition, I ask that amendment 553 be called up and agreed to.
  Mr. COATS. Mr. President, reserving the right to object--
  The PRESIDING OFFICER. Is there objection?
  Mr. COATS. Reserving the right to object--
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. COATS. I am only inquiring from the standpoint that I am a little 
lost again on procedure. How much time is left under the bill? Because 
I would like to respond to the arguments on the amendment of the 
Senator from Vermont.
  The PRESIDING OFFICER. There are 3 minutes remaining on the bill. If 
the Senator will wait until the 3 minutes have expired, then he can 
have up to 10 minutes in his own right.
  Mr. COATS. Further reserving the right to object, I asked relative to 
the unanimous consent request of the Senator from Delaware. I just 
wanted to make sure it didn't include--maybe I misunderstood, but it 
didn't include a request to go immediately to those amendments.
  The PRESIDING OFFICER. These are amendments on which there appears to 
be agreement on both sides of the aisle.
  Mr. COATS. To be accepted en bloc.
  Mr. ROTH. I asked they be--
  Mr. COATS. I withdraw my reservation.
  The PRESIDING OFFICER. If there is no objection, the clerk will 
report the amendments en bloc.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. ROTH] proposes amendment No. 
     556 for Mr. McCain, amendment No. 557 for Mr. Enzi, amendment 
     No. 558 for Mr. Dodd, amendment No. 559 for Mr. Grams of 
     Minnesota, amendment No. 560 for Mr. Dorgan, amendment No. 
     561 for Mr. Dorgan, amendment No. 562 for Mr. Biden, 
     amendment No. 563 for Messrs. Dodd and D'Amato, amendment No. 
     564 for Mrs. Boxer, and amendment No. 565 for Mr. Daschle.

  The PRESIDING OFFICER. If there is no objection, the amendments are 
considered and agreed to en bloc.
  The amendments considered and agreed to en bloc are as follows:


                           amendment no. 556

(Purpose: To express the sense of the Senate that the Finance Committee 
      should hold hearings on the tax treatment of stock options)

       On page 267, between lines 15 and 16, insert the following:

     SEC.   . SENSE OF THE SENATE REGARDING TAX TREATMENT OF STOCK 
                   OPTIONS.

       (a) Findings.--The Senate finds that--
       (1) currently businesses can deduct the value of stock 
     options as a business expense on their income tax returns, 
     even though the stock options are not treated as an expense 
     on the books of those same businesses; and
       (2) stock options are the only form of compensation that is 
     treated in this way.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Committee on Finance of the Senate should hold 
     hearings on the tax treatment of stock options.

  Mr. McCAIN. Mr. President, I am pleased to join my colleague from 
Michigan, Senator Levin, in offering an amendment regarding the current 
double standard employed by corporations today in accounting for stock 
options.
  The amendment expresses the sense of the Senate that hearings should 
be held on S. 576, a bill sponsored by Senator Levin and myself.
  S. 576 would close a tax loophole by requiring companies to treat 
stock options granted as compensation to employees as an expense for 
bookkeeping purposes, if they want to claim this expense as a deduction 
for tax purposes. The bill protects average workers by exempting 
companies from the requirements of the amendment if they provide stock 
options to substantially all of their employees, with more than half 
the stock options going to nonmanagement personnel and not more than 20 
percent going to a single employee. The bill does not require a 
particular accounting treatment; that decision is left to the company. 
It simply requires companies to treat stock options the same way for 
both accounting and tax purposes.
  The Joint Committee on Taxation provided an estimate of the revenue 
that is being lost because of this tax loophole. If this loophole is 
not closed, over the next 10 years, from 1998 to 2007, the U.S. 
Treasury will lose $1.6 billion. That's real money that could be used 
to reduce our ever-increasing $5.4 trillion national debt.
  A great deal of attention has been focused recently on the 
outrageously high levels of executive compensation paid by some 
companies. The New York Times printed an article on March 30, 1997, 
that listed the compensation levels of several top corporate executives 
in 1996. For example:

       IBM's Chairman, Louis V. Gerstner, Jr., received a 
     compensation package worth $20.2 million.
       General Electric gave its Chairman, John F. Welch, Jr., a 
     package worth $30 million.
       And Michael Eisner, Chairman of Walt Disney Corporation, 
     got $8.7 million in salary and bonuses, plus stock options 
     worth $181 million in today's market--the largest single 
     grant in corporate history, according to the article.

  Under current law, corporations can easily hide these multimillion 
dollar executive compensation plans from their stockholders or other 
investors. That is because the stock options that make up a large and 
increasing portion of these packages need not be counted

[[Page S6470]]

as an expense when calculating company earnings.

  Simply put, if a company pays $100 to an employee as salary, that 
$100 is deducted from the company's total profits. That seems logical. 
But if a company gives that same employee 100 dollars' worth of stock 
options as part of their compensation package, the company's total 
profits are unaffected. And the actual value of those stock options may 
very well increase several fold over time.
  Stock options given as compensation to company employees are simply 
mentioned in a footnote in the annual report to shareholders--which, by 
the way, is a much-needed yet inadequate change in the accounting rules 
required by the Federal Accounting Standards Board starting this year. 
The result is the shareholders are given an inflated picture of the 
company's profits, and the top executives can take credit for those 
artificially inflated profits.
  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. Yet, the required footnote could be overlooked by 
all but the most astute of stockholders.
  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.
  Stock option plans in 1996 accounted for almost 45 percent of total 
executive compensation at 56 of our Nation's largest corporations, an 
increase of 5 percent in just 1 year. The portion of compensation made 
up of actual cash salary declined by 5 percent in just 1 year.
  At the same time, the value of stock options increased dramatically 
as overall market performance soared in the last few years. The New 
York Times piece cited earlier also estimated the future value of stock 
options to those top executives, based on the most likely time the 
options would be exercised. The most impressive gain would be realized 
by Mr. Eisner, whose $181 million in Disney options received last year 
would be worth $583.7 million in 2007.
  Yet, if any Disney shareholder looked at the annual report, all they 
will find is a footnote about the value of stock options granted to Mr. 
Eisner and other top executives. The bottom line--the profit 
statement--will be overstated by at least $181 million.
  Why shouldn't the true value of Mr. Eisner's 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?

  I recognize that there is a serious opposition to S. 576 in the 
business community. And I fully understand why. Companies save millions 
every year by claiming the value of stock options granted to employees 
as a deductible expense on their taxes. The Wall Street Journal article 
states that companies saved hundreds of millions of dollars in 1996 
taxes because of this loophole:

       Microsoft saves $352 million.
       Intel saved 196 million.
       Disney Corporation saved $44 million.

  No other type of compensation can be 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.
  S. 576 would end an inequitable corporate subsidy and restore 
fairness in the treatment of stock options. It would provide an 
additional $1.6 billion in deficit reduction by closing this corporate 
tax loophole.
  The amendment Senator Levin and I are offering today is intended to 
urge full and open hearings on this issue. Industry will have an 
opportunity to express their views and explain their opposition to S. 
576. I urge my colleagues to vote for the amendment, and I look forward 
to the hearings.

       At the appropriate place in the bill, insert the following:

     SEC.   . SENSE OF THE SENATE ON ESTATE TAXES.

       (a) The Senate finds that whereas--
       (1) The Federal estate tax punishes hard working small 
     business owners and discourages savings and growth; and
       (2) The Federal estate tax imposes an unfair economic 
     burden on small businesses and reduces their ability to 
     survive and complete with large corporations; and
       (3) A reduction in Federal estate taxes for family-owned 
     farms and enterprises will help to prevent the liquidation of 
     small businesses that strengthen American communities by 
     providing jobs and security;
       (b) It is the Sense of the Senate that--
       (1) The estate tax relief provided in this bill is an 
     important step that will enable more family-owned farms and 
     small businesses to survive and continue to provide economic 
     security and job creation in American communities; and
       (2) Congress should eliminate the Federal estate tax 
     liability for family-owned businesses by the end of 2002 on a 
     deficit-neutral basis.

  Mr. ENZI. Mr. President, I rise to offer a sense of the Senate 
amendment that calls for a repeal of the Federal estate tax on family 
owned businesses by 2002. I commend Chairman Roth and the Finance 
Committee on the progress they have made by increasing the estate tax 
exemption for individuals and by excluding the first $1 million family 
owned businesses from Federal death tax liability. I look forward to 
working with my colleagues toward repealing the death tax on family 
businesses.
  I introduce this resolution because I believe there is still much 
work to be done. The Federal death tax on family owned business tax 
punishes those who have worked hard their entire life building up a 
small business or a family farm only to have their children see it 
disappear in order to pay the Federal death taxes. The death tax 
discourages thrift and pierces the very heart of the American economy--
small businesses.
  Mr. President, small businesses are the backbone of the American 
economy. The simple fact is that most businesses in this country are 
small businesses. Out of the nearly 5\1/2\ million employers in this 
country, 99 percent are businesses with fewer than 500 employees. 
Almost 90 percent of those businesses employ fewer than 20 employees. 
Since the early 1970's, small businesses have created two out of every 
three net new jobs in this country. This remarkable job growth 
continued even during periods of slow national growth and downturns 
when most large corporations were downsizing and laying off workers. 
Small businesses employ more than half of the private sector workforce 
and are responsible for producing roughly half our Nation's gross 
domestic product. By punishing small businesses, the Federal death tax 
stifles our economy, discourages ingenuity, and threatens the economic 
security of many of our families.
  The Federal death tax also tears at the bonds that unite parents and 
children and families and communities. The family business has 
historically been one of the primary means for children to learn skills 
and virtues that help throughout their entire lives. Many of the small 
business in Wyoming are ranches and farms, and I know many of the hard-
working men and women in Wyoming who run these family ranches and 
farms. The whole family pitches in to harvest the crops, feed the 
livestock, mend the fences, fix the irrigation ditches, plow the roads, 
herd the sheep and cattle, and plan for next year's yield. Children 
learn that hard work and responsible planning are necessary ingredients 
for success in work as in life. They learn respect for the land that is 
their livelihood. They learn to appreciate the labor of their parents 
and grandparents and they realize their own labor is an investment in 
their future and the future of their children.

  I myself ran a small family owned shoe store in Gillette, WY. We 
didn't have a separate division for merchandising and marketing. We 
didn't have an accounting department to sort out the complicated Tax 
Code. We all wore many hats. We had to sell the shoes, balance the 
books, keep track of our inventory, and straighten out the shelves. Let 
me tell you that we all learned to pitch in to get the job done. We 
learned to work together and we learned to appreciate the hard work and 
sacrifices each of us made to keep the store running smoothly. We also 
learned firsthand the importance of living by the golden rule. If you 
don't treat your customers well in the retail business they don't 
forget. This is especially true of folks in small towns

[[Page S6471]]

where there are always a few people who remember what you did as a kid 
and who can even tell you stories about your parents and grandparents. 
The joy is, they also remember you when you treat them well. The family 
owned business is an important medium through which we pass on our 
heritage from one generation to the next.
  Mr. President, our Tax Code represents our tax policy and we should 
be ashamed at a code which punishes families and stifles our economy. 
Every year our Tax Code forces thousands of families to sell their 
businesses just to pay the repressive Federal death tax. It is time we 
correct this injustice by providing meaningful relief for America's 
families and their small businesses. I commend the chairman for his 
diligent work in crafting a tax bill that takes an important first step 
toward reforming the death tax. I look forward to working with my 
colleagues in repealing this burdensome tax in the near future. This 
sense of the Senate resolution expresses our firm intent to work 
together toward this end. I ask for your support in this important 
endeavor.
  I thank the chair and yield the floor.


                           amendment no. 558

  (Purpose: To amend the Internal Revenue Code of 1986 regarding the 
              treatment of cancellation of student loans)

       On page 77, between lines 11 and 12, insert the following:

     SEC.   . TREATMENT OF CANCELLATIION OF CERTAIN STUDENT LOANS.

       (a) Certain Loans by Exempt Organizations.--
       (1) In general.--Paragraph (2) of section 108(f) (defining 
     student loan) is amended by striking ``or'' at the end of 
     subparagraph (b) and by striking subparagraph (D) and 
     inserting the following:
       ``(D) any educational organization described in section 
     170(b)(1)(A)(ii) if such loan is made--
       ``(i) pursuant to an agreement with any entity described in 
     subparagraph (A), (B), or (C) under which the funds from 
     which the loan was made were provided to such educational 
     organization, or
       ``(ii) pursuant to a program of such educational 
     organization which is designed to encourage its students to 
     serve in occupations with unmet needs or in areas with unmet 
     needs and under which the services provided by the students 
     (or former students) are for or under the direction of a 
     governmental unit or an organization described in section 
     501(c)(3) and exempt from tax under section 501(a).

     The term `student loan' includes any loan made by an 
     educational organization so described or by an organization 
     exempt from tax under section 501(a) to refinance a loan 
     meeting the requirements of the preceding sentence.''
       (2) Exception for discharges on account of services 
     performed for certain lenders.--Subsection (f) of section 108 
     is amended by adding at the end the following new paragraph:
       ``(3) Exception for discharges on account of services 
     performed for certain lenders.--Paragraph (1) shall not apply 
     to the discharge of a loan made by an organization described 
     in paragraph (2)(D) (or by an organization described in 
     paragraph (2)(E) from funds provided by an organization 
     described in paragraph (2)(D)) if the discharge is on account 
     of services performed by either such organization.''
       (b) Certain Student Loans the Repayment of Which Is Income 
     Contingent.--Paragraph (1) of section 108(f) is amended by 
     striking ``any student loan if'' and all that follows and 
     inserting ``any student loan if--
       ``(A) such discharge was pursuant to a provision of such 
     loan under which all or part of the indebtedness of the 
     individual would be discharged if the individual worked for a 
     certain period of time in certain professions for any of a 
     broad class of employers, or
       ``(B) in the case of a loan made under part D of title IV 
     of the Higher Education Act 1965 which has a repayment 
     schedule establish under section 455(e)(4) of such Act 
     (relating to income contingent repayments), such discharge is 
     after the maximum repayment period under such loan (as 
     prescribed under such part).''
       (c) Effective Date.--The amendments made by this section 
     shall apply to discharges of indebtedness after the date of 
     the enactment of this Act.

  Mr. DODD. Mr. President, I rise today to offer a modest amendment 
that will make a major difference to thousands of young men and women 
who chose careers in community service.
  As is well-known, the rewards of a community service job are not the 
salaries. Few choose teaching in Head Start, working for the Jesuit 
Volunteer Corps, or a career in nursing with the expectation of riches, 
big houses or luxurious vacations. In fact, for too many in these 
fields the salaries are substandard and pension and other benefits are 
questionable. The rewards come from knowing at the end of the day that 
they have made a difference in the lives of children and others in 
their communities.
  Many of these careers require post-secondary education, and today, 
higher education means debt. In 1995-96, total federal student loan 
debt rose to over $24 billion dollars; $264 million in my home state of 
connecticut. Nearly 7 million students borrowed to meet the costs of 
college.
  Mr. President, I believe we must do more about this problem of rising 
student debt. Not only are students deterred from pursuing rewarding, 
community-related work, but they and their families are also being 
scared off from pursuing the dream of higher education at all. This 
undermines our economy and nation as a whole; it is clear we will not 
be able to meet the challenges of the next century without harnessing 
and nurturing the talents of all Americans.
  For nearly 40 years, this is what federal higher education policy has 
been about--from the GI bill to Pell grants, the federal government has 
provided the means for millions of Americans to attend college. Rising 
costs, and the increasing reliance on loans to finance them, is 
beginning to undermine our central federal commitment.
  There are some good things, but many missed opportunities, In the 
bill before us today. The modified HOPE Scholarship should be improved 
and I support amendments to do so. The tax deduction for student loan 
interest, and some of the family savings provisions will also assist 
families in meeting the costs of higher education.
  But there is a great deal missing. Most notably, the President's 
proposal to support lifelong learning through a $10,000 tax deduction 
for tuition. This tax relief is critical to America's families and 
others pursuing higher education beyond the first two years. Continuing 
education is vitally important for nurses, teachers, technical workers 
and others. Yet this package does little for them to assist in these 
efforts. The Democratic alternative rightly restored this critical 
benefit.
  In addition, few of these tax advantages go to the neediest students 
and their families, despite the fact that this is the group with the 
most limited access to higher education. I hope that we can make 
progress on these fronts during today's consideration of this bill.
  Mr. President, this amendment also helps fill in the gaps in this 
bill. With rising student indebtedness, students literally cannot 
afford to take jobs as Head Start teachers, nurses or police officers. 
As a result, we and all our communities lose the talents and energies 
of these trained and motivated young people.
  The Dodd amendment supports the work of students who chose a career 
in community service by ensuring that they are not disadvantaged in the 
treatment of loan forgiveness associated with their work.
  It is not uncommon that public and private non-profit student loan 
programs provide for the forgiveness of a student's loans should that 
student chose to go into certain community service fields. For 
instance, the Federal Perkins Loan programs provides forgiveness for 
Head Start teachers, teachers in certain urban and rural areas, police 
officers, nurses, members of the Armed Forces and certain others.
  However, the Tax Code currently disadvantages those students who 
receive loan forgiveness from the private sector. The amount forgiven 
by nonpublic entities is currently treated as income, which can result 
in much higher tax liability for the student, undermining the effect of 
this important benefit.
  Specifically, this amendment would expand section 108(f) of the 
Internal Revenue Code so that an individual's gross income does not 
include forgiveness of loans made by tax-exempt charitable 
organizations, such as universities or private foundations, if the 
proceeds of such loans are used to pay costs of attendance at an 
educational institution or to refinance outstanding student loans and 
the student is not employed by the lender organization. As under 
present law, the Section 108 (f) exclusion would apply only if the 
forgiveness is contingent on the student's working for a certain period 
of time in certain professions for any of a broad class of employers, 
so long as a public service requirement is met.
  The exclusion also corrects an oversight in the enactment of the 
income

[[Page S6472]]

contingent repayment option under the current student loan program, 
which provides low-income, high-debt students with the option of 
stretching out their payments over 25 years. This program allows 
students to pursue interests in lower paying fields while continuing to 
meet their obligations to the tax payers to repay their student loans. 
If the student makes payments for 25 years and still has a remaining 
balance, the Government forgives their loan. Unfortunately, when we 
enacted this vital program, we neglected to clarify that this 
forgiveness should not be taxable. This amendment would make this 
correction and fulfill the Government's promise to needy students.
  This initiative has been scored by the Joint Tax Committee to have a 
minimal impact on revenue and therefore this amendment does not require 
offsetting revenues. The administration supports this initiative and it 
is also included in Chairman Archer's house bill.
  Mr. President, I believe this is a simple step we can take to assist 
thousands of young people who chose careers in community service, and I 
urge my colleagues to support it.


                           amendment no. 559

(Purpose: To exclude from unrelated business taxable income for certain 
                          charitable gambling)

       ``(j) Qualified Games of Chance.--
       (1) In general.--The term ``unrelated trade or business'' 
     does not include the activity of qualified games of chance.
       (2) Qualified games of chance.--For purposes of this 
     subsection, the term ``qualified games of chance means any 
     game of chance, other than provided in subsection (f), 
     conducted by an organization if--
       ``(A) such organization is licensed pursuant to State law 
     to conduct such game,
       ``(B) only organizations which are organized as nonprofit 
     corporations or are exempt from tax under section 501(a) may 
     be so licensed to conduct such game within the State, and
       ``(C) the conduct of such game does not violate State or 
     local law.''
                                  ____

       On page 211, between lines 5 and 6, insert the following:

     SEC. 724. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS 
                   MAY BE USED WITHOUT PENALTY TO REPLACE OR 
                   REPAIR PROPERTY DAMAGED IN PRESIDENTIALLY 
                   DECLARED DISASTER AREAS.

       (a) In General.--Section 72(t)(2) (relating to exceptions 
     to 10-percent additional tax on early distributions), as 
     amended by sections 203 and 303, is amended by adding at the 
     end the following new subparagraph:
       ``(G) Distributions for disaster-related expenses.--
     Distributions from an individual retirement plan which are 
     qualified disaster-related distributions.''
       (b) Qualified Disaster-Related Distributions.--Section 
     72(t), as amended by sections 203 and 303, is amended by 
     adding at the end the following new paragraph:
       ``(9) Qualified disaster-related distributions.--For 
     purposes of paragraph (2)(E)--
       ``(A) In general.--The term `qualified disaster-related 
     distribution' means any payment or distribution received by 
     an individual to the extent that the payment or distribution 
     is used by such individual within 60 days of the payment or 
     distribution to pay for the repair or replacement of tangible 
     property which is disaster-damaged property.
       ``(B) Limitations.--
       ``(i) Only distributions within 2 years.--The term 
     `qualified disaster-related distribution' shall only include 
     any payment or distribution which is made during the 2-year 
     period beginning on the date of the determination referred to 
     in subparagraph (D).
       ``(ii) Dollar limitation.--Such term shall not include 
     distributions to the extent the amount of such distributions 
     exceeds $10,000 during the 2-year period described in clause 
     (i).
       ``(C) Disaster-damaged property.--The term `disaster-
     damaged property' means property--
       ``(i) which was located in a disaster area on the date of 
     the determination referred to in subparagraph (C), and
       ``(ii) which was destroyed or substantially damaged as a 
     result of the disaster occurring in such area.
       ``(D) Disaster area.--The term `disaster area' means an 
     area determined by the President during 1997 to warrant 
     assistance by the Federal Government under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments and distributions after December 31, 
     1996, with respect to disasters occurring after such date.

     SEC. 725. ELIMINATION OF 10 PERCENT FLOOR FOR DISASTER 
                   LOSSES.

       (a) General Rule.--Section 165(h)(2)(A) (relating to net 
     casualty loss allowed only to the extent it exceeds 10 
     percent of adjusted gross income) is amended by striking 
     clauses (i) and (ii) and inserting the following new clauses:
       ``(i) the amount of the personal casualty gains for the 
     taxable year,
       ``(ii) the amount of the federally declared disaster losses 
     for the taxable year (or, if lesser, the net casualty loss), 
     plus
       ``(iii) the portion of the net casualty loss which is not 
     deductible under clause (ii) but only to the extent such 
     portion exceeds 10 percent of the adjusted gross income of 
     the individual.

     For purposes of the preceding sentence, the term `net 
     casualty loss' means the excess of personal casualty losses 
     for the taxable year over personal casualty gains.''
       (b) Federally Declared Disaster Loss Defined.--Section 
     165(h)(3) (relating to treatment of casualty gains and 
     losses) is amended by adding at the end the following new 
     subparagraph:
       ``(C) Federally declared disaster loss.--
       ``(i) In general.--The term `federally declared disaster 
     loss' means any personal casualty loss attributable to a 
     disaster occurring during 1997 in an area subsequently 
     determined by the President of the United States to warrant 
     assistance by the Federal Government under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act.
       ``(ii) Dollar limitation.--Such term shall not include 
     personal casualty losses to the extent such losses exceed 
     $10,000 for the taxable year.''
       (c) Conforming Amendment.--The heading for section 
     165(h)(2) is amended by striking ``Net casualty loss'' and 
     inserting ``Net nondisaster casualty loss''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to losses attributable to disasters occurring 
     after December 31, 1996, including for purposes of 
     determining the portion of such losses allowable in taxable 
     years ending before such date pursuant to an election under 
     section 165(i) of the Internal Revenue Code of 1986.
                                  ____



                           amendment no. 561

   (Purpose: To authorize the Secretary of the Treasury to abate the 
accrual of interest on income tax underpaymnets by taxpayers located in 
  Presidentially declared disaster areas if the Secretary extends the 
 time for filing returns and payment of tax (and waives any penalties 
   relating to the failure to so file or so pay) for such taxpayers)

       Ordered to lie on the table and to be printed.
       Amendment intended to be proposed by Mr. Dorgan.
       Viz:
       On page 211, between lines 5 and 6, insert the following:

     SEC. 724. ABATEMENT OF INTEREST ON UNDERPAYMENTS BY TAXPAYERS 
                   IN PRESIDENTIALLY DECLARED DISASTER AREAS.

       (a) In General.--Section 6404 (relating to abatements) is 
     amended by adding at the end the following:
       ``(h) Abatement of Interest on Underpayments by Taxpayers 
     in Presidentially Declared Disaster Areas.--
       ``(1) In general.--If the Secretary extends for any period 
     of time for filing income tax returns under section 6081 and 
     the time for paying income tax with respect to such returns 
     under section 6161 (and waives any penalties relating to the 
     failure to so file or so pay) for any individual located in a 
     Presidentially declared disaster area, the Secretary shall 
     abate for such period the assessment of any interest 
     prescribed under section 6601 on such income tax.
       ``(2) Presidentially declared disaster area.--For purposes 
     of paragraph (1), the term `Presidentially declared disaster 
     area' means, with respect to any individual, any area which 
     the President has determined during 1997 warrants assistance 
     by the Federal Government under the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act.
       ``(3) Individual.--For purposes of this subsection, the 
     term `individual' shall not include any estate or trust.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to disasters declared after December 31, 1996.
                                  ____



                           amendment no. 562

       At the appropriate place, insert the following:

     SEC.  SURVIVOR BENEFITS FOR PUBLIC SAFETY OFFICERS KILLED IN 
                   THE LINE OF DUTY.

       In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 138 as section 139 and by 
     inserting after section 137 the following new section:

     ``SEC. 138. SURVIVOR BENEFITS ATTRIBUTABLE TO SERVICE BY A 
                   PUBLIC SAFETY OFFICER WHO IS KILLED IN THE LINE 
                   OF DUTY.

       ``(a) In General.--Gross income shall not include any 
     amount paid as a survivor annuity on account of the death of 
     a public safety officer (as such term is defined in section 
     1204 of the Omnibus Crime Control and Safe Streets Act of 
     1968) killed in the line of duty--
       ``(1) if such annuity is provided under a governmental plan 
     which meets the requirements of section 401(1) to the spouse 
     (or a former spouse) of the public safety officer or to a 
     child of such officer; and
       ``(2) to the extent such annuity is attributable to such 
     officer's service as a public safety officer.

[[Page S6473]]

       ``(b) Exceptions.--
       ``(1) In general.--Subsection (a) shall not apply with 
     respect to the death of any public safety officer if--
       ``(A) the death was caused by the intentional misconduct of 
     the officer or by such officer's intention to bring about 
     such officer's death;
       ``(B) the officer was voluntarily intoxicated (as defined 
     in section 1204 of the Omnibus Crime Control and Safe Streets 
     Act of 1968) at the time of death; or
       ``(C) the officer was performing such officer's duties in 
     grossly negligent manner at the time of death.
       ``(2) Exception for benefits paid to certain individuals.--
     Subsection (a) shall not apply to any payment to an 
     individual whose actions were a substantial contributing 
     factor to the death of the officer.
       (b) Effective Date.--The amendments made by this subsection 
     shall apply to amounts received in taxable years beginning 
     after December 31, 1996, with respect to individuals dying 
     after such date.
                                  ____



                           amendment no. 563

 (Purpose: To clarify the tax treatment of certain disability benefits 
          received by former police officers or firefighters)

       On page 267, between lines 15 and 16, insert the following:

     SEC.   . TREATMENT OF CERTAIN DISABILITY BENEFITS RECEIVED BY 
                   FORMER POLICE OFFICERS OR FIREFIGHTERS.

       (a) General Rule.--For purposes of determining whether any 
     amount to which this section applies is excludable from gross 
     income under section 104(a)(1) of the Internal Revenue Code 
     of 1986, the following conditions shall be treated as 
     personal injuries or sickness in the course of employment:
       (1) Heart disease.
       (2) Hypertension.
       (b) Amounts To Which Section Applies.--This section shall 
     apply to any amount--
       (1) which is payable--
       (A) to an individual (or to the survivors of an individual) 
     who was a full-time employee of any police department or fire 
     department which is organized and operated by a State, by any 
     political subdivision thereof, or by any agency or 
     instrumentality of a State or political subdivision thereof, 
     and
       (B) under a State law (as in existence on July 1, 1992) 
     which irrebuttably presumed that heart disease and 
     hypertension are work-related illnesses but only for 
     employees separating from service before such date; and
       (2) which is received in calendar year 1989, 1990, or 1991.

     For purposes of the preceding sentence, the term ``State'' 
     includes the District of Columbia.
       (c) Waiver of Statute of Limitations.--If, on the date of 
     the enactment of this Act (or at any time within the 1-year 
     period beginning on such date of enactment) credit or refund 
     of any overpayment of tax resulting from the provisions of 
     this section is barred by any law or rule of law, credit or 
     refund of such overpayment shall, nevertheless, be allowed or 
     made if claim therefore is filed before the date 1 year after 
     such date of enactment.

     SEC.   . REMOVAL OF DOLLAR LIMITATION ON BENEFIT PAYMENTS 
                   FROM A DEFINED BENEFIT PLAN MAINTAINED FOR 
                   CERTAIN POLICE AND FIRE EMPLOYEES.

       (a) In General.--Subparagraph (G) of section 415(b)(2) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``participant--'' and all that follows and inserting 
     ``participant, subparagraphs (C) and (D) of this paragraph 
     and subparagraph (B) of paragraph (1) shall not apply.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to years beginning after December 31, 1996.

                           amendment no. 564

    (Purpose: To provide for diversification in section 401(k) plan 
                              investments)

       On page 208, between lines 16 and 17, insert the following:

     SEC.  . DIVERSIFICATION IN SECTION 401(K) PLAN INVESTMENTS.

       (a) Limitations on Investment in Employer Securities and 
     Employer Real Property by Cash or Deferred Arrangements.--
     Section 407(d)(3) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1107(d)(3)) is amended by adding at 
     the end the following:
       ``(D)(i) the term `eligible individual account plan' does 
     not include that portion of an individual account plan that 
     consists of elective deferrals (as defined in section 
     402(g)(3) of the Internal Revenue Code of 1986) pursuant to a 
     qualified cash or deferred arrangement as defined in section 
     401(k) of the Internal Revenue Code of 1986 (and earnings 
     allocable thereto), if such elective deferrals (or earnings 
     allocable thereto) are required to be invested in qualifying 
     employer securities or qualifying employer real property or 
     both pursuant to the documents and instruments governing the 
     plan or at the direction of a person other than the 
     participant on whose behalf such elective deferrals are made 
     to the plan (or the participant's beneficiary).
       ``(ii) For purposes of subsection (a), such portion shall 
     be treated as a separate plan.
       ``(iii) This subparagraph shall not apply to an individual 
     account plan if the fair market value of the assets of all 
     individual account plans maintained by the employer equals 
     not more than 10 percent of the fair market value of the 
     assets of all pension plans maintained by the employer.
       ``(iv) This subparagraph shall not apply to an individual 
     account plan that is an employee stock ownership plan as 
     defined in section 409(a) or 4975(e)(7) of the Internal 
     Revenue Code.''.
       (v) This subparagraph shall not apply to an individual 
     account plan if not more than 1 percent of an employees 
     eligible compensation deposited to the plan as an elective 
     deferral (as so defined) is required to be invested in the 
     qualifying employer securities.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to employer securities and employer real property 
     acquired after the beginning of the first plan year beginning 
     after the 90th day after the date of enactment of this Act.
       (2) Special Rule for certain acquisitions.--Employer 
     securities and employer real property acquired pursuant to a 
     binding written contract to acquire such securities and real 
     property in effect on the date of enactment of this Act and 
     at all times thereafter, shall be treated as acquired 
     immediately before such date.
                                  ____



                           AMENDMENT NO. 565

 (Purpose: To expand non-Amtrak States' use of the Intercity Passenger 
                              Rail Funds)

       Beginning on page 189, line 24, strike ``and'' and all that 
     follows through page 190, line 1, and insert the following:
       ``(III) capital expenditures related to rail operations for 
     Class II or Class III rail carriers in the State,
       ``(IV) any project that is eligible to receive funding 
     under section 5309, 5310, or 5311 of title 49, United States 
     Code.
       ``(V) any project that is eligible to receive funding under 
     section 130 of title 23, United States Code, and
       ``(VI) the payment of interest.
                                  ____



                           Amendment No. 553

  The PRESIDING OFFICER. And amendment No. 553 as a part of that 
agreement is agreed to.
  The amendment (No. 553) was agreed to, as follows:


                           amendment no. 553

(Purpose: To express the sense of the Senate that the Internal Revenue 
                       Code of 1986 needs reform)

       At the end of page 11, insert the following:

     SEC.   . SENSE OF THE SENATE REGARDING REFORM OF THE INTERNAL 
                   REVENUE CODE OF 1986.

       (a) Findings.--The Senate finds that--
       (1) the Internal Revenue Code of 1986 (``tax code'') is 
     unnecessarily complex, having grown from 14 pages at its 
     inception to 3,458 pages by 1995;
       (2) this complexity resulted in taxpayers spending about 
     5,300,000,000 hours and $225,000,000,000 trying to comply 
     with the tax code in 1996;
       (3) the current congressional budgetary process is weighted 
     too heavily toward tax increases, as evidenced by the fact 
     that since 1954 there have been 27 major bills enacted that 
     increased Federal income taxes and only 9 bills that 
     decreased Federal income taxes, 3 of which were de minimis 
     decreases;
       (4) the tax burden on working families has reached an 
     unsustainable level, as evidenced by the fact that in 1948 
     the average American family with children paid only 4.3 
     percent of its income to the Federal Government in direct 
     taxes and today the average family pays about 25 percent;
       (5) the tax code unfairly penalizes saving and investment 
     by double taxing these activities while only taxing income 
     used for consumption once, and as a result the United States 
     has one of the lowest saving rates, at 4.7 percent, in the 
     industrialized world;
       (6) the tax code stifles economic growth by discouraging 
     work and capital formation through excessively high tax 
     rates;
       (7) Congress and the President have found it necessary, on 
     2 separate occasions, to enact laws to protect taxpayers from 
     the abuses of the Internal Revenue Service and a third bill 
     has been introduced in the 105th Congress; and
       (8) the complexity of the tax code has increased the number 
     of Internal Revenue Service employees responsible for 
     administering the tax laws to 110,000 and this costs the 
     taxpayers $9,800,000,000 each year.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Internal Revenue Code of 1986 needs broad-based 
     reform; and
       (2) the President should submit to Congress a comprehensive 
     proposal to reform the Internal Revenue Code of 1986.

  The PRESIDING OFFICER. Who seeks the floor?
  Mr. COATS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. COATS. May I inquire now what the time situation is?

                          ____________________