[Congressional Record Volume 143, Number 97 (Thursday, July 10, 1997)]
[House]
[Pages H5129-H5130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE REPUBLICAN TAX BILL IS BAD FOR EDUCATION

  (Mr. McGOVERN asked and was given permission to address the House for 
1 minute and to revise and extend his remarks and include extraneous 
matter.)
  Mr. McGOVERN. Mr. Speaker, if the United States is to be the economic 
superpower in the 21st century, then Congress must make education its 
No. 1 priority. Any tax bill that passes this Congress must expand 
educational opportunity for working families.
  Unfortunately, the tax bill that passed the House recently fails that 
test. The Republican tax bill fails to provide the full HOPE 
scholarship requested by the President, and it does virtually nothing 
for students in their third and fourth year in college.
  Furthermore, the Republican tax bill contains provisions to actually 
raise taxes on students, faculty, and staff in higher education 
institutions. It is both cynical and dishonest for Congress to claim to 
be committed to tax relief while raising taxes on those hard-working 
members of our academic community.
  Democrats have offered a tax alternative that includes the full $500 
HOPE scholarship, and provides significant tax relief for college 
students in their junior and senior years. I urge my Republican 
colleagues to remove the anti-education measures in their tax bill. Let 
us give tax relief to hard-working families struggling to send their 
kids to college.
  Mr. Speaker, I include for the Record a letter I sent to President 
Clinton yesterday urging his continued support for initiatives to 
expand educational opportunities for working families:
  The material referred to is as follows:
                                    Congress of the United States,


                                     House of Representatives,

                                     Washington, DC, July 9, 1997.
     William Jefferson Clinton,
     President of the United States, The White House, Washington, 
         DC.
       Dear Mr. President, I would like to express again my 
     support for the leadership you have demonstrated this year on 
     education initiatives. Education, however, is once again 
     under attack: this time in the form of H.R. 2014, the so-
     called Taxpayer Relief Act, that has been approved by the 
     House of Representatives and is now facing negotiations in a 
     House-Senate Conference Committee on the budget 
     reconciliation and tax bills. Mr. President, your leadership 
     is needed again to prevent our students, faculty, and higher 
     education institutions from unfairly becoming targets of tax 
     increases. Specifically, I urge you to:
       Support the provision in the Senate version of the tax bill 
     to retain the tax-exempt status of the TIAA-CREF retirement 
     program. Revoking the tax exemption for the pension system of 
     TIAA-CREF, granted by the IRS in 1920, would cause 
     irreparable harm to the employees, higher education 
     institutions, and the Massachusetts and New England education 
     and research community as a whole. The Senate has recognized 
     this fact and has not included this provision in its tax 
     bill. TIAA-CREF's pension assets are exclusively and 
     irrevocably used for the benefit of its pension participants. 
     And unlike the reserves of other insurance companies, TIAA's 
     pension reserves can be used for no other purpose than to 
     support participants' retirement benefits. TIAA is already 
     subject to taxes, imposed in 1986, on its non-pension

[[Page H5130]]

     insurance business. The net effect of revoking TIAA-CREF's 
     tax exemption after seventy-five years would be to 
     significantly reduce the earnings of current employee's 
     retirement accumulation as well as the pension income of 
     retired employees. By imposing this unprecedented tax, the 
     House measure would not only undermine the recruitment and 
     retention of men and women in teaching professions and 
     assault the financial security of higher education employees' 
     retirement, it would summarily undercut your efforts, Mr. 
     President, to improve educational opportunities for all of 
     America's youth. On behalf of the current and retired 
     employees of New England's 260 tax-exempt colleges and 
     universities, I urge you to use your special offices to 
     guarantee the continuation of the tax exempt status of TIAA-
     CREF'S pension program.
       In a similar contrast between the House and Senate tax 
     bills, I urge you to use your good offices to retain Section 
     117(d) of the tax code so that graduate students engaged 
     in teaching and research would continue to receive tuition 
     waivers that would exclude this income from federal taxes. 
     The tuition waiver for graduate teaching and research 
     assistance is what makes graduate school a financially 
     viable opportunity for many students. The effect of the 
     House provision to transform this tuition assistance into 
     taxable income will no doubt be to drive out of graduate 
     school and away from careers in research and teaching many 
     of our most promising young Americans, especially those of 
     modest means and middle income families. The changes 
     proposed in the House version of the tax bills would make 
     graduate school unaffordable to millions of Americans 
     throughout the next decade, require dramatic increases in 
     college costs so that institutions might increase the pay 
     to graduate teaching and research assistants, and cause 
     dramatic cut-backs in America's university research 
     programs precisely at the moment when the nation as a 
     whole is attempting to become more competitive 
     internationally. Mr. President, the House proposal runs 
     contrary to the goals you have established for our nation 
     and I urge you to oppose it and to support the Senate 
     bill's retention of section 117(d) of the IRS tax code.
       This same subsection also ensures that the children of 
     employees of higher education institutions might also receive 
     tuition waivers. This provision has allowed the children of 
     faculty and staff--from the families of janitors, food 
     service workers, administrative staff and modestly paid 
     faculty--to live out their parents' dreams and attain a 
     college education. Mr. President, please fight on behalf of 
     these families' hopes and aspirations.
       I want you to know, Mr. President, that I am a strong 
     supporter of your efforts to save the HOPE Scholarship tax 
     credit, to allow the interest on student loans to be tax 
     deductible, and to permanently extend Section 127 of the tax 
     code on employer provided education assistance not just to 
     undergraduate students, but to graduate students as well, 
     where it is most needed.
       I assure you, Mr. President, that I will also convey these 
     concerns directly to the House and Senate conferees, but it 
     will need your leadership and commitment to ensure that our 
     higher education community do not suffer under the terms of 
     these congressional tax bills.
       Thank you for your attention to these requests. I look 
     forward to working with you on this fight for America's 
     future.
           Sincerely,
                                                James P. McGovern,
     Member of Congress.

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