[Congressional Record Volume 143, Number 111 (Thursday, July 31, 1997)]
[Senate]
[Pages S8465-S8480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page S8465]]

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                                 Senate

                 RAILROAD DEFICIT REDUCTION FUEL TAXES

  Mr. CHAFEE. Unfortunately, I understand the conference agreement on 
H.R. 2014 takes no action to equalize the rate of deficit reduction 
fuel taxes paid by the various modes of transportation. As the 
distinguished chairman of the Finance Committee and I have discussed, 
an obvious inequity currently exists which requires that railroads pay 
a 5.55 cents-per-gallon fuel excise tax, while all other modes of 
transportation pay no more than 4.3 cents-per-gallon for this purpose. 
In fact, by transferring deficit reduction taxes paid by other 
transportation users, including truckers which compete with the 
railroads, into trust funds for infrastructure improvements, we 
exacerbate the current inequity. Railroads continue to contribute to 
deficit reduction, while their competitors instead contribute to their 
own infrastructure.
  If transportation is to be singled out for deficit reduction, the 
burden of contributing to a balanced budget should be shared equally 
among all modes. While I regret that no solution to this problem was 
possible in this legislation, I hope you share my belief that the fuel 
tax inequity imposed on the Nation's railroads must be remedied at the 
earliest opportunity.
  Mr. ROTH. As the Senator from Rhode Island knows, I am deeply 
concerned about the unfair situation faced by railroads. While we were 
unable to include a solution to this problem in H.R. 2014, it is my 
hope that we will have the opportunity to pursue such a remedy as 
quickly as possible, perhaps in the upcoming ISTEA reauthorization 
legislation.
  Mr. CHAFEE. Let me express my appreciation to the Chairman, Senator 
Roth, for his interest in this important issue. I look forward to 
working with him on this matter during the upcoming ISTEA legislation.
  Mr. FAIRCLOTH. Mr. President, I rise in strong support of the tax 
bill, H.R. 2014.
  Mr. President, this is a major tax cut for the American people--more 
than $90 billion in tax relief.
  This is the largest tax cut for the American people since 1981.
  In terms of education, the provisions are very significant. My 
legislative priority for this year has been a tax credit for community 
college students of any age to improve their job skills. On the first 
day of this Congress, I introduced S. 50, a bill to provide a $1,500 
tax credit for community college students. Technology has brought about 
rapid change in the workplace, and the need to update one's skills on a 
daily basis is critical. I think the community college system is the 
best job training program we have in this country. North Carolina has 
been a leader in education and in job growth. There is a strong link 
between the two. The tax bill will provide a 100-percent tax credit for 
the first $1,000 of expenses for attending a community college or the 
first 2 years of college. It will provide a 50-percent credit for of 
the next $1,000. In sum, it's a $1,500 tax credit for all of America's 
community college students. I was a strong supporter of this provision, 
and I am pleased it has been retained and improved.
  The legislation also provides an interest deduction for student 
loans. Under the bill, State prepaid tuition plans will receive tax-
free treatment. And, the bill permits penalty free withdrawals from 
IRA's for education expenses. All of these provisions will improve our 
education system without spending more money on bureaucrats or 
Government programs.
  For families, the bill has significant tax relief. We have provided a 
$500 tax credit for children under the age of 17. For a family of four 
making $30,000--this is a 50-percent tax cut. For a family of four 
making $50,000, this is a 21-percent tax cut.
  Mr. President, this is major tax relief for America's working 
families. For too many years, these families, working men and women 
have been the backbone of America, going to work every day, paying the 
mortgage, raising families, and paying their taxes and their debts. The 
Government has put a greater and greater tax burden on them every year. 
This tax relief is long overdue. In fact, it's 16 years overdue. Their 
last tax cut was 1981. There have been plenty of tax increases in the 
intervening years.
  Mr. President, there are a number of other positive items in this tax 
bill. For example, the bill: Cuts capital gains taxes; cuts the capital 
gains on the sale of one's home; provides greater estate tax relief, 
particularly for small family-owned businesses and farms; accelerates 
the phasein of self-employed health insurance tax deduction; and 
provides a more generous IRA for at-home spouses.
  Mr. President, we should not lose sight of the fact that the 
Republicans have now controlled Congress for 3 years. We have finally 
overcome the President's opposition and cut taxes. In 1993, President 
Clinton passed the largest tax increase in American history. To me, 
this is a stark contrast in philosophy. If the Senate was not in 
Republican hands, we would be debating the size of the tax hike, not 
the tax cut. Although the White House has at times tried to blur the 
differences, it should not be lost on the American public that wasteful 
Government spending is going down, and taxes are being cut for the 
first time in years.
  The battle for greater tax relief does not end here. The Tax Code has 
to be simplified dramatically. Overall tax rates are too high. 
Americans are working until May just to pay taxes. We need to set a 
protection into law that not more than 25 percent of one's wages can be 
taken in taxes.
  I can assure the Senate and my constituents in North Carolina that I 
will

[[Page S8466]]

continue my work for greater tax relief.
  Thank you, Mr. President, I am pleased to support this bill.
  Mr. LAUTENBERG. Mr. President, I rise in support of the conference 
report on the tax reconciliation bill.
  Mr. President, before I begin to discuss this legislation, let me 
take a moment to again congratulate the chairman and ranking member of 
the Finance Committee, Senator Roth and Senator Moynihan, for their 
leadership on this legislation. Both these distinguished Senators 
reached out to Members on the other side of the aisle to make this 
happen, and they deserve enormous credit for their leadership.
  Mr. President, I am supporting this legislation for four primary 
reasons. First, it will help ordinary, middle-class families and 
especially their children. Second, it will promote education. Third, it 
will help clean up our environment and promote economic development. 
And, fourth, it's part of a broader bipartisan agreement that will 
balance the budget and prepare our Nation for the 21st century.
  First, Mr. President, this legislation would provide valuable 
assistance to middle-class families in the form of a $500 tax credit 
for children under the age of 17. This credit will help millions of 
ordinary people who are raising their children, working hard, and 
struggling to pay their bills. For these Americans, an extra $500 or 
$1,000 per year can go a long way. And, so long as our Nation can 
afford to provide this relief in the context of a balanced budget, I 
think it's the right thing to do.
  Mr. President, I am especially pleased that the child tax credit 
included in this legislation will be available to lower income families 
who also qualify for the earned income tax credit, or EITC. This proved 
to be one of the most contentious issues in the conference, much to my 
surprise. Yet some around here argued that providing direct tax relief 
to police officers, nurses, and teachers somehow amounted to welfare. I 
never understood the logic of that. But, fortunately, Democrats made 
this a top priority. And, in the end, these hard-working Americans will 
be able to benefit from the child tax credit.
  Mr. President, the second major element of this legislation is the 
section that promotes education. The bill includes a $1,500 tax credit 
to help students afford the first 2 years of college. In addition, 
there's a tax credit worth up to $1,000 for those who want to pursue 
additional education beyond that.
  This latter benefit will be available to adults of all ages. And it's 
especially important. In an increasingly technological age, education 
must be a life-long process. And it's something that we should 
encourage and support.
  Mr. President, the third major reason why I'm supporting this 
legislation is that it includes new incentives to clean up thousands of 
contaminated, abandoned sites in economically distressed areas. That 
not only will improve the environment, but it will help encourage 
redevelopment of these areas, known as brownfields. It's a win-win 
approach that will make a real difference for communities around our 
Nation.
  Mr. President, the final reason I am supporting this legislation is 
that it's part of the broad bipartisan budget agreement that I helped 
negotiate with leaders from both parties and the President. That 
agreement will provide several benefits outside the tax area that we 
never could have achieved without this broader compromise.
  We're getting $24 billion to provide health care coverage for 
uninsured children. We're restoring disability benefits for legal 
immigrants. We're ensuring that 30,000 disabled children don't lose 
their Medicaid coverage. We're investing $3 billion to move people from 
welfare to work. And the list goes on.
  None of these important advances would have been possible without a 
broad bipartisan agreement. And to get that agreement, Democrats had to 
accept some significant new tax breaks that we otherwise would have 
resisted.
  Mr. President, I, for one, do not share the faith of my Republican 
friends that cutting taxes for rich Americans is the ticket to economic 
growth. We've tried trickle-down economics in the past. And it's proved 
not only unfair, but ineffective in promoting the economy.
  Most Democrats have a different approach, Mr. President. We like to 
focus on tax cuts for ordinary Americans. The people who work hard, 
raise their kids, and who often have a hard time keeping their heads 
above water.
  In other words, Mr. President, rather than showering tax breaks on 
the rich and having that money trickle down, we'd rather provide relief 
to ordinary Americans, and allow those funds to flow back up.
  Fortunately, Mr. President, while this bill does contain some new tax 
breaks for the very wealthy, the bulk of its benefits are focused on 
the middle class. The most expensive element in the package is the 
child tax credit. The next most expensive area is education. Both of 
these types of tax relief are targeted on people who really could use 
the help.
  Having said that, Mr. President, there clearly are other provisions, 
such as the capital gains rate cut and the backloaded IRA, I'm 
concerned about the costs of these new tax breaks, especially in the 
future. If it were up to me, I would have done much more to constrain 
those costs.
  But, Mr. President, these provisions were necessary to reach the 
broader agreement. There simply would not have been a deal without 
them. And so, on the whole, many on this side of the aisle felt that 
this was the price we had to pay to get the other benefits in the 
budget agreement.
  At least, Mr. President, the legislation before us does not include 
some of the more egregious proposals that would have exploded the 
deficit in the future.
  But the bottom line, Mr. President, is that, though it has real 
flaws, I am going to support this legislation. And I would encourage my 
colleagues to do likewise.
  No, it's not perfect legislation. But it's part of a compromise that 
will do a lot of good. It provides significant tax relief to middle-
class families. It will help millions of Americans afford college. It 
will encourage millions of others to pursue their educations throughout 
their lives. It will lead to the cleanup and redevelopment of many 
abandoned sites around our nation. And it's part of a bipartisan plan 
that will balance the budget and prepare our Nation for the next 
century.
  Mr. SPECTER. Mr. President, I am pleased to vote in favor of the 
Taxpayer Relief Act, which will provide the first significant tax cut 
to working Americans in 16 years.
  Although I still believe that we ought to move to a system of a 
fairer, flatter tax without myriad exemptions and deductions, this bill 
represents an important first step toward relieving the tax burden on 
working Americans and families. This tax bill provides a net tax 
reduction of $96 billion over 5 years while remaining on a glide path 
toward a balanced budget.
  Specifically, I am pleased that the final package includes a $500 per 
child tax credit, tax incentives for education, including education 
IRA's, a modified Hope Scholarship and tax free treatment of State 
prepaid tuition plans. It also takes important steps toward expanding 
participation in IRA's, a reduction in the capital gains tax and AMT, 
and incentives for small business by reinstatement of the home office 
business deduction and an acceleration in the phase in of the self-
employed health insurance deduction.
  On estate taxes, an area where I have long believed that we must have 
relief, this bill would help family farmers and small businesses by 
increasing the exclusion to $1.3 million. It would also increase the 
exclusion for families to $1 million over 10 years.
  In conclusion, Mr. President when combined with the budget savings 
bill passed earlier today, we have made real progress on putting our 
financial house in order and providing necessary tax relief to millions 
of Americans.


                repeal of limit on sec. 501(c)(3) bonds

  Mr. MOYNIHAN. Mr. President, one provision of H.R. 2014 would repeal 
the $150 million limit on section 501(C)(3) bonds. This is a change I 
have long sought, and I am grateful for my chairman's support for this 
change. It is my understanding that the intention of the provision is 
that bonds that meet the requirements of the bill will be eligible for 
tax-exempt treatment without being subject to the $150 million 
limitation. Furthermore, these bonds will not be taken into account 
with respect to other qualified section 501(C)(3)

[[Page S8467]]

bonds that are subject to the $150 million limitation, which bonds may 
continue to be issued on a tax-exempt basis to finance and refinance 
expenditures as permitted under existing law.
  Mr. ROTH. I agree with the Senator's interpretation of this provision 
of the bill.
  Mr. ALLARD. Mr. President, I must admit that I was less than pleased 
with the spending portion of the budget reconciliation package. I 
regret that I was unable to give that section my support. 
Unfortunately, we failed to address the problem of growth in 
entitlement spending. We passed on making some needed reforms to the 
Medicare system. We owe our children and grandchildren much more, Mr. 
President. I am much more pleased with the tax portion of the budget 
reconciliation package. One of my primary goals has always been to 
reduce the tax burden on hard-working Americans. I am proud to say that 
we will take a step toward this goal today. For the first time in 16 
years, we give the American people a measure of tax relief. I am 
especially pleased that we are taking steps to reduce two of the most 
onerous and economically harmful taxes--the capital gains tax and the 
death tax.
  Mr. President, with this act today, we will move in the direction of 
protecting family farms and businesses from Uncle Sam's grasping arms. 
Under current law, many family farms and small businesses have to be 
sold off just to pay the taxes on the founder's estate. This is tragic 
and irresponsible. But today, we will change that law to allow estates 
containing small businesses and family farms to deduct the first $1.3 
million of the value of the estate. This change in death tax law is a 
good step in the right direction, although I must emphasize that it is 
only a first step. No family owned business or farm should have to be 
sold to pay death taxes. I will continue to fight to see that no family 
owned business is ever again the victim of the Federal Government's 
insatiable appetite for more money.
  We also make some good progress in the area of capital gains tax 
relief in this bill. Under current law, the U.S. has one of the highest 
capital gains tax rates in the world. These high rates have the 
perverse effect of punishing those who help our economy to grow by 
saving and investing and they raise the cost of capital, thereby 
lowering growth in productivity. With this bill today, we will reduce 
this economically harmful tax.
  Although we did not get the indexing provisions that I championed, 
most investors will get a reduced rate of 18 percent if they hold an 
asset purchased after 2000 for more than 5 years. Low-income investors 
will be charged an even lower rate of 8 percent for long-term 
investments. In addition, we are reducing the rate on all capital. Most 
taxpayers will now be charged a 20 percent rate and those in the lowest 
income bracket will only have to pay 10 percent. The 43 percent of 
Americans that now invest in stocks in one form or another will benefit 
from these provisions.
  Mr. President, I am pleased with these steps that we are taking today 
to reduce these economically harmful and unfair taxes, and I am proud 
to say that I will support this portion of the budget reconciliation 
package. I look forward to working with my colleagues in the future to 
enact further tax reduction measures that will help our family farms 
and small businesses.
  Mr. HUTCHINSON. Mr. President, the United Kingdom deregulated its 
electric utilities in 1990. There is now a central power pool. Power 
stations with capacities of over 10 megawatts are ordinarily required 
to sell all electricity generated into the pool. Consumers buy from the 
pool or from regional electric companies that buy from the pool
  Thus, for example, if an independent generator wanted to build a 
power station to supply electricity to an oil refinery in England, it 
might lease land from the refinery and build the power station. 
However, a direct sale of electricity to the refinery would not be 
permitted. The generator would sell electricity to the pool, and the 
refinery would buy from that pool. The pool prices change each half 
hour based on demand and supply and, therefore, fluctuate frequently.
  The refinery will want protection against price fluctuations. 
Consequently, it will enter into a contract for differences with the 
generator. The parties will agree on a schedule of fixed prices that 
the generator would have charged had the generator been free to make a 
direct sale. When the pool price exceeds the agreed price in the 
schedule, the generator will pay the refinery the difference. The 
refinery will pay the generator the difference when the pool price is 
less. Thus, the differences contract is a way for both parties to buy 
certainty. The generator is certain of his revenue stream. The refinery 
is certain of how much electricity will cost over an extended period. 
It is a hedging agreement.
  It my understanding that the relevant provision in the bill does not 
turn payments under such differences contracts into subpart F income. 
Would the Chairman clarify this understanding?
  Mr. ROTH. The legislation is not intended to affect arrangements 
which do not constitute notional principal contracts under present law. 
In addition, the legislation is not intended to change the treatment of 
notional principal contracts entered into as part of a hedging 
arrangement referred to elsewhere in section 954.
  Mr. HUTCHINSON. I thank the Chairman.


                                 amtrak

  Mr. McCAIN. Mr. President, the conference agreement to H.R. 2014 
includes a provision to provide Amtrak up to $2.3 billion during the 
next 2 years. This funding provision would be provided in the form of 
tax credits. While I have already made my concerns known regarding this 
provision, I note that it would require enactment of reform legislation 
prior to the Treasury providing these credits to Amtrak.
  As Chairman of the Senate Committee on Commerce, Science, and 
Transportation, which has jurisdiction over Amtrak, I would like to 
ascertain for the record what the authors of this tax credit provision 
envision would constitute reforms. Since I was not a conferee, I would 
appreciate the majority leader clarifying this matter and explaining 
the conferees intent.
  Mr. LOTT. I would be happy to offer clarification to the Chairman of 
the Amtrak authorizing Committee. As members know, we have spent 
significant congressional time working to develop comprehensive Amtrak 
reform and reauthorization legislation. As Members further know, I 
worked for 2 years on a bipartisan reform package in the 104th 
Congress. Senator Hutchison has picked up this legislation effort and 
has worked diligently to advance the process. However, we cannot 
justify new Federal subsidies for Amtrak unless we also fix the many 
impediments imposed by statute which prevent Amtrak from operating like 
a business. Comprehensive reforms in the areas of Amtrak operations, 
labor, and liability must be enacted if we are serious about addressing 
Amtrak's financial crisis. Amtrak cannot survive without these 
fundamental changes. Money alone will not address Amtrak's systemic 
problems.
  Mr. McCAIN. I thank the majority leader for his comments. From your 
description, the reforms you envision to release this new funding for 
Amtrak are the type of reforms included for in S. 738, the Amtrak 
Reform and Accountability Act of 1997. That bill, sponsored by the 
Chairwoman of the Surface Transportation and Merchant Marine 
Subcommittee, Senator Hutchison, was approved by the Commerce Committee 
on June 26, 1997. I note that the sponsor of S. 738 is on the floor. I 
would like to ask what her intentions are for moving that bill.
  Mrs. HUTCHISON. Thank you. I had hoped we would be able to accomplish 
the necessary Amtrak reforms within the context of this tax bill. I 
believe that Members of the Senate from both parties were prepared to 
do that. Given that Amtrak has warned us it could reach bankruptcy by 
the spring of 1998, the reforms embodied in S. 738, which include labor 
reforms and limits on liability, are simply critical. I am committed to 
moving S. 738 as soon as possible after the August recess. The Chairman 
of the House Transportation and Infrastructure Committee shares my 
commitment to provide honest legislative reforms in order to release 
the tax credits to Amtrak. I hope the majority leader will work with me 
to assure timely floor action.

[[Page S8468]]

  Mr. LOTT. I look forward to having the full Senate consider the 
authorization legislation reported by the Senate Commerce Committee and 
will be happy to work with the Senator.
  Mr. McCAIN. I thank the majority leader and Senator Hutchison for 
clarifying this issue. The reform language in this tax bill linked to 
the release of tax credits clearly means comprehensive, substantive, 
meaningful reforms to ensure Amtrak operates more efficiently and to 
set up a process that will protect taxpayers if Amtrak does not meet 
its financial goals. Let there be no misunderstanding. There will be no 
new funding provided to Amtrak until we first enact legislation 
providing operational, labor and liability reforms. The hard working 
men and women whose tax dollars are subsidizing Amtrak deserve to have 
their contributions invested as responsibly as possible. I stand ready 
to work with the majority leader and the subcommittee chairman to bring 
this reform measure before the full Senate.
  Mr. THURMOND. Mr. President, I rise to support the Tax Relief Act of 
1997. I commend the Finance Committee and the leadership, along with 
the Budget Committee, for their hard work.
  This bill, along with the Balanced Budget Act of 1997, fulfills our 
promise to the American people--to restrain Government spending, and to 
bring Tax Relief to the American people.
  This tax reduction act has some tax relief for all Americans, at all 
stages of life. The child tax credit will boost the family budget for 
parents with children.
  Homeowners, and others with capital assets will benefit from the 
capital gains tax reduction. The education provisions will encourage 
savings and assist all students. The bill has provisions for savings 
and investment, and for businesses. This will encourage economic growth 
and promote employment. Finally, there are estate tax reforms which 
will help preserve family businesses and farms.
  Mr. President, this Nation has waited too long for a balanced 
budget--nearly 30 years; and it has been 16 years since we have 
delivered any significant tax relief. These measures passed today keep 
us on the track of smaller government and a strong economy.
  I am proud to support this measure, because it is good for the people 
of South Carolina and good for the Nation. It is a good down payment 
toward a simpler, fairer, and less burdensome tax system.
  Finally, Mr. President, these two bills put us on course to fiscal 
responsibility. We must continue to keep spending within the limits of 
our resources, and begin to reduce the national debt. We owe no less to 
our children and grandchildren.
  Mr. ENZI. Mr. President, I rise in support of H.R. 2014, the 
conference report on tax relief. Through this tax package, we can give 
the American people the first serious tax reduction package in 16 
years. This legislation provides tax relief to families with children, 
it offers greatly needed relief for small business, and it encourages 
education and investment. Finally this legislation gives some relief to 
individuals and small businesses from the punitive Federal death tax. I 
commend the Chairmen of the Finance and Budget Committees and the other 
conferees for their hard work on this package. We must realize that we 
still have a long journey ahead in relieving the tax burden on American 
taxpayers and in simplifying the cumbersome tax code.
  Mr. President, our tax burden in this country is overwhelming. We tax 
income, we tax investment, and we tax savings. In fact, we have pretty 
well figured out a way of taxing a person from the time he gets up in 
the morning to the time he goes to bed. From the time you wake up in 
the morning and have your first cup of coffee, you are paying sales 
tax. When you get in your car and drive to work, you are paying 
gasoline tax. As you work all day to support your family, you are also 
supporting the Government by paying income tax. When you go home and 
spend time with your family and finally go to bed, you are paying 
property tax. If you decide to make a telephone call or turn on the 
light switch, you get taxed for that too. This taxation on almost all 
your daily activities goes on your entire life and to add insult to 
injury, we even tax you when you die. It is a tragic situation in this 
country when most people spend more money on taxes than they spend on 
food, clothing, and shelter combined. It is time that we relieve this 
tax burden on our Americans.
  Just as our tax burden is too high, our Tax Code is frustratingly 
complex. Like a critically-ill patient, the Internal Revenue Code is in 
desperate need of surgery. We have continued to operate our Tax Code 
with layer after layer of bandages while ignoring the gasps of the 
dying patient beneath. This complexity has often left even the 
professional tax preparers in a quandary about the meaning of the 
myriad of code provisions and revenue regulations. When even the 
experts cannot understand our Tax Code, it is time for meaningful 
reform.
  I had the pleasure of conducting a small business committee field 
hearing in Casper, WY, this past April in order to find out the 
concerns facing many of our small businesses. One of the consistent 
messages I received from the hearing was that the complexity of our Tax 
Code is strangling small businesses. Even the representatives from the 
accounting profession testified that our Tax Code is in desperate need 
of simplification. They are concerned about their own liability because 
they cannot even count on representatives of the Internal Revenue 
Service to understand the Tax Code they attempt to enforce. I have 
found that many of these accountants are reluctant to simplify the 
code, however, because every time we've attempted to simplify the Tax 
Code, we have ended up raising taxes. We in Congress must begin by 
reevaluating our tax policy. We will be able to accurately chart our 
course only if we know where we are going.
  This conference report takes an important step in lessening the tax 
burden on individuals and small businesses alike. This tax package 
provides broad-based tax relief for America's families. The $500-per-
child tax credit would provide over $70 billion in tax relief for 
families over the next 5 years. The child credit has long been 
championed by the Republican Party as a means of helping in the 
evergrowing cost of raising families. Our Tax Code has failed miserably 
to keep up with the ever-growing demands of raising children. The 
current exemption for dependent children is less than one-half what it 
should be to keep pace with inflation. Many of America's families have 
two parents working with one working to pay the bills and the other 
working to pay the taxes. We should be working to strengthen our 
families in any way we can, and this credit will help in that effort.
  Mr. President, this package moves us a step closer to the eventual 
repeal of the punitive death tax. This is an area I have taken a 
special interest in since the Federal death tax adversely impacts a 
large number of small businesses and farms in Wyoming. The death tax 
punishes people who work hard their entire lives in order to pass 
something on to their children. This bill increase the exemption for 
individuals and provides for a $700,000 exclusion for family owned 
businesses. This exclusion was an important priority for me. I joined 
several of my colleagues in urging the conferees to include a provision 
which excludes the death tax for family businesses and farms. We need 
to build on this foundation and work toward an eventual repeal of the 
Federal death tax.
  Mr. President, this bill gets us closer to leveling the playing field 
between small businesses and their larger competitors. Most notably, it 
accelerates the phase in for the deduction of health insurance for the 
self-employed and it reinstates the home office business deduction. As 
a small businessman myself, I was pleased to see some tax relief going 
to those who form the backbone of our economy.
  This legislation also encourages education by providing tax credits 
for tuition and expenses for college and technical school training as 
well as tax deductions for the interest on student loans. These tuition 
tax credits will provide the means for many students to pursue a 
college education or receive technical training. The tax deduction for 
individuals who have already invested in college or graduate education 
provide tax relief for one of the largest investments many people will 
make in their lifetime.
  Mr. President, this package makes important strides toward 
encouraging

[[Page S8469]]

Americans to save and to invest for their future. We currently have a 
dangerously low savings rate in this country, and this is due in large 
part to our current tax structure which not only taxes income but it 
taxes savings. This bill expands the availability of tax-free 
Individual Retirement Accounts to include nonworking spouses and it 
creates a new ``super IRA'' the proceeds of which can be withdrawn tax-
free for purposes such as first time home purchases.
  We also provide relief for investment by providing for long-overdue 
capital gains relief. This bill cuts the top capital gains rate from 28 
percent to 20 percent and reduces the 15 percent rate to 10 percent for 
assets held longer than 18 months. This reduction of the capital gains 
rate will benefit millions of Americans. A news report just this week 
showed that nearly one-half of Americans have some current investment 
in the stock market. Many companies have allowed their employees to 
invest in their future by buying stock in the company. Many of these 
employees have counted on this investment for retirement. This package 
provides relief for people who have planned wisely for their future.
  Mr. President, I support his tax relief proposal because I believe we 
need to return some of the Americans' money back to them this year. 
This legislation will return over $90 million to those who have paid 
the taxes. It has been far too long since Congress has passed a tax 
relief package for the American families and small business, and I 
applaud this effort. We must not, however, believe that our work is 
done. Rather, it has just begun. We must now focus our attention and 
effort on the reducing the enormous complexity of the Internal Revenue 
Code. We need to set our sights on the clearly defining our Nation's 
tax policy, and then muster the reserve to implement our goals with 
simplicity and fairness. As the only accountant in the U.S. Senate, I 
fully realize the need of reforming a tax code so that it strengthens 
families, encourages enterprise and thrift, and rewards savings. I look 
forward to working with my colleagues in this most important endeavor.
  I thank the Chair and yield the floor.


          tax incentives that promote forestland conservation

  Mr. GREGG. Mr. President, I am very pleased that the Senator from 
Delaware [Mr. Roth], included language in this tax bill, H.R. 2014, the 
Revenue Reconciliation Act, which promotes land conservation through 
the use of conservation easements and allowing the postmortem election 
of these easements. Still, I believe that more must be done in the 
future to ensure that forestland, especially in the Northeast, is 
preserved. This issue is of particular importance in the Northeast, 
where 85 percent of our forestland is in private ownership.
  Mr. LEAHY. Mr. President, I agree with the Senator from New 
Hampshire, and I intend to work with him in a bipartisan manner to 
promote land conservation by pushing forward the recommendations made 
by the Northern Forest Lands Council in 1994. As highlighted in S. 552, 
the Forestland Preservation Tax Act, certain tax polices work against 
the long-term ownership and management of forestland and instead force 
landowners to sell or change the use of their land. H.R. 2014 begins to 
address this program with the provisions for conservation easements and 
estate tax relief for small businesses and family farms. In the 
Northeast, the timber production is part of our agriculture and faces 
many of the same challenges as family farms.
  Mr. ROTH. I agree with both Senators and look forward to working with 
both of you on these issues in the future.


                        Child Health Provisions

  Mr. MOYNIHAN. Mr. President, I would like to enter into a colloquy 
with Chairman Roth to clarify the conference agreement as it relates to 
the children's health initiative. First, the issue of what benefits 
must be provided to children has been very important to us in this 
Chamber, on both sides of the aisle. Under the conference report, a 
State covering children under the new title XXI must offer at least the 
coverage listed under the options specified in section 2103(a). Do 
these options establish floors or ceilings?
  Mr. ROTH. These four options are floors. States are given flexibility 
to design their programs, while meeting the standards of section 
2103(a). States may also build upon the benchmark packages. With grant 
funds, States, if they wish, may provide additional benefit coverage, 
but they must provide at least the coverage described in section 
2103(a). For example, a State may supplement the benchmark-equivalent 
package of the standard Blue Cross/Blue Shield plan for Federal 
employees by expanding vision, dental, and hearing services benefits.
  Mr. MOYNIHAN. Another benchmark is the coverage for State employees. 
It is my understanding that this benchmark coverage is equivalent to 
the health benefit plans in which State employees are enrolled. Is that 
correct?
  Mr. ROTH. Yes, this benchmark allows States to provide children with 
coverage benefits equivalent to the health benefit plans that enroll 
State employees.
  Mr. MOYNIHAN. Another clarification. Is it intended that children, 
including those with special needs, receive quality care?
  Mr. ROTH. The conferees expect State programs to provide access to 
appropriate treatment for special needs children. In addition, the new 
legislation is clear that children who are eligible for Medicaid under 
current law may not be shifted to the new program under title XXI. 
Medicaid coverage may not be rolled back and replaced by new insurance 
programs. For example, the new program cannot replace an existing 
medically needy program for children or existing Medicaid eligibility 
through waivers for children receiving home and community based care.
  Mr. MOYNIHAN. I thank the distinguished chairman of the Finance 
Committee for his helpful remarks. I would also emphasize that, in the 
Finance Committee, members on both sides of the aisle strongly agreed 
that these child health grants should not supplant current State 
spending, and instead would supplement and enhance current State child 
health insurance programs. The conference report included such 
maintenance of effort provisions. To ensure a cost-effective grant 
program, Federal funds should not replace existing State spending.
  Mr. NICKLES. Mr. President, the chairman of the Senate Finance 
Committee has worked closely with me on a provision in this bill to 
clarify the application of section 168(j) of the Internal Revenue Code 
to Indian lands in Oklahoma.
  Section 168(j) was enacted in 1993 to provide accelerated 
depreciation for property placed in service on Indian reservations. 
Since Oklahoma has no formal reservations, the House of Representatives 
included a provision in their tax bill to clarify that lands in 
Oklahoma within the jurisdictional area of an Oklahoma Indian tribe and 
eligible for trust-land status would qualify for section 168(j).
  As the chairman knows, the Senate receded to the House provision in 
conference. However, since the House leaves the interpretation of the 
provisions to the U.S. Department of the Interior, I believe it is 
essential that we clarify congressional intent.
  There needs to be a ``bright-line'' test for determining which 
Oklahoma lands qualify for section 168(j) in order to treat Oklahoma 
fairly compared to other States and to avoid costly litigation. The 
Department of the Interior has indicated that ``lands in Oklahoma 
within the jurisdictional area of an Oklahoma Indian tribe'' would be 
defined as lands within boundaries of the last treaties with the 
Oklahoma tribes. This definition narrows the land area compared with 
current law by eliminating the unassigned lands.
  Because I believe it is important that we clarify this matter, does 
the chairman of the Senate Finance Committee concur with my 
explanation?
  Mr. ROTH. The Senator from Oklahoma is correct. I thank the Senator 
for his cooperation on this issue.
  Mr. DOMENICI. Mr. President, pursuant to section 313(c) of the Budget 
Act I submit the following list of extraneous material for H.R. 2014, 
the Taxpayer Relief Act of 1997.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S8470]]



 EXTRANEOUS PROVISIONS--CONFERENCE REPORT ON H.R. 2014--TAXPAYER RELIEF 
                               ACT OF 1997                              
------------------------------------------------------------------------
               Provision                        Comments/Violation      
------------------------------------------------------------------------
Sec. 901...............................  Deposit general revenue portion
                                          of highway motor fuels taxes  
                                          into highway trust fund. Byrd 
                                          rule (b)(1)(A): Produces no   
                                          change in outlays or revenues.
Sec. 909...............................  Require study of feasibility of
                                          moving collection point for   
                                          distilled spirits excise tax. 
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 910...............................  Codify BATF regulations on wine
                                          labeling. Byrd rule (b)(1)(A):
                                          Produces no change in outlays 
                                          or revenues.                  
Sec. 931...............................  Delay penalties for failure to 
                                          make payments through EFTPS   
                                          until after 6/30/98. Byrd rule
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 954...............................  Modification of empowerment    
                                          zones and enterprise          
                                          communities criteria in the   
                                          event of future designations  
                                          of additional zones and       
                                          communities. Byrd rule        
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 976...............................  Combined employment tax        
                                          reporting five-year           
                                          demonstration project for     
                                          Montana. Byrd rule (b)(1)(A): 
                                          Produces no change in outlays 
                                          or revenues.                  
Sec. 1031(d)...........................  Dedicate 4.3 cents/gallon tax  
                                          on aviation fuel to the       
                                          Airport and Airway Trust Fund.
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
                                                                        
  Following provisions are from the Simplification section of H.R. 2014 
                                                                        
Sec. 1223..............................  Due date for furnishing        
                                          information to partners of    
                                          large partnerships. Byrd rule 
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1283..............................  Repeal of authority to disclose
                                          whether prospective juror has 
                                          been audited. Byrd rule       
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1284..............................  Clarification of statute of    
                                          limitations. Byrd rule        
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1285..............................  Clarify procedures for         
                                          administrative cost awards.   
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1310..............................  Adjustments for certain gifts  
                                          made within three years of    
                                          decedent's death. Byrd rule   
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1314..............................  Authority to waive requirement 
                                          of United States trustee for  
                                          qualified domestic trusts.    
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1412..............................  Authority to cancel or credit  
                                          export bonds without          
                                          submission of records. Byrd   
                                          rule (b)(1)(A): Produces no   
                                          change in outlays or revenues.
Sec. 1413..............................  Repeal of required maintenance 
                                          of records on premises of     
                                          distilled spirits plant. Byrd 
                                          rule (b)(1)(A): Produces no   
                                          change in outlays or revenues.
Sec. 1415..............................  Repeal of requirement for      
                                          wholesale dealers in liquor to
                                          post sign. Byrd rule          
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1417..............................  Use of additional ameliorating 
                                          material in certain wines.    
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1420..............................  Authority to allow drawback on 
                                          exported beer without         
                                          submission of records. Byrd   
                                          rule (b)(1)(A): Produces no   
                                          change in outlays or revenues.
Sec. 1431..............................  Authority for IRS to grant     
                                          exemptions from excise tax    
                                          registration requirements.    
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1432..............................  Repeal of expired provisions.  
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1444..............................  Repeal of expired provisions.  
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1451..............................  Clarify Tax Court jurisdiction 
                                          over interest determinations. 
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
Sec. 1503..............................  Elimination of paperwork       
                                          burdens on plans. Byrd rule   
                                          (b)(1)(A): Produces no change 
                                          in outlays or revenues.       
Sec. 1510..............................  New technologies in retirement 
                                          plans. Byrd rule (b)(1)(A):   
                                          Produces no change in outlays 
                                          or revenues.                  
Sec. 1604(f)(3)........................  Coordination with tobacco      
                                          industry settlement agreement.
                                          Byrd rule (b)(1)(A): Produces 
                                          no change in outlays or       
                                          revenues.                     
------------------------------------------------------------------------

                 railroad deficit reduction fuel taxes

  Mr. CHAFEE. Unfortunately, I understand the Conference Agreement on 
H.R. 2014 takes no action to equalize the rate of deficit reduction 
fuel taxes paid by the various modes of transportation. As the 
distinguished Chairman of the Finance Committee and I have discussed, 
an obvious inequity currently exists which requires that railroads pay 
a 5.55 cents-per-gallon fuel excise tax, while all other modes of 
transportation pay no more than 4.3 cents-per-gallon for this purpose. 
In fact, by transferring deficit reduction taxes paid by other 
transportation users, including truckers which compete with the 
railroads, into trust funds for infrastructure improvements, we 
exacerbate the current inequity. Railroads continue to contribute to 
deficit reduction, while their competitors instead contribute to their 
own infrastructure.
  If transportation is to be singled out for deficit reduction, the 
burden of contributing to a balanced budget should be shared equally 
among all modes. While I regret that no solution to this problem was 
possible in this legislation, I hope you share my belief that the fuel 
tax inequity imposed on the Nation's railroads must be remedied at the 
earliest opportunity.
  Mr. ROTH. As the Senator from Rhode Island knows, I am deeply 
concerned about the unfair situation faced by railroads. While we were 
unable to include a solution to this problem in H.R. 2014, it is my 
hope that we will have the opportunity to pursue such a remedy as 
quickly as possible, perhaps in the upcoming ISTEA reauthorization 
legislation.
  Mr. CHAFEE. Let me express my appreciation to the Chairman, Senator 
Roth, for his interest in this important issue. I look forward to 
working with him on this matter during the upcoming ISTEA legislation.


                       puerto rico tax incentives

  Mr. D'AMATO. Mr. President, I joined with Senators Moynihan, Chafee, 
Hatch, Graham, and Breaux recently in introducing S. 906, which would 
provide job creation incentives for our fellow 3.8 million American 
citizens in Puerto Rico. I am disappointed that these incentives were 
not included in the bill before us today, H.R. 2014, the Taxpayers 
Relief Act.
  S. 906 had the unified support of the public and private sectors in 
Puerto Rico, was endorsed by the President, and has received bipartisan 
support in Congress. It was my goal to include this job creation 
incentive in today's legislation. But because of extreme economic 
constraints on available resources, this was not possible.
  As a result of the changes made to tax incentives affecting Puerto 
Rico in 1993 and 1996, Puerto Rico has no Federal economic incentives 
to attract new businesses or jobs. Further, existing U.S. companies 
operating on the island have little incentive to make new investments 
or replace depreciating plant and equipment. This is inequitable and 
should be changed. Our fellow citizens in Puerto Rico, where there is 
an unemployment rate more than twice the national average, and well 
over 50 percent of its population living below the poverty line, can 
least afford to suffer economic setbacks.
  Mr. President, I urge the Senate to consider S. 906, or other 
incentives for economic growth in Puerto Rico at the first available 
opportunity. This legislation provides a wage-based tax credit that 
encourages U.S. companies to stay and expand on the island.
  We cannot wait until the damage is done. Puerto Rican Americans, no 
less than Americans living in the States, should be receiving the 
benefits of economic growth and job creation that the Taxpayer Relief 
Act provides to so many others.
  Mr. BROWNBACK. Mr. President, I rise to make a few remarks on the tax 
cut package being considered before us today.
  Not since 1981 have we been able to offer the American people as 
comprehensive a tax relief package as we are offering in this tax bill. 
Through this historic tax bill we will offer American families much 
needed tax relief in the form of $500 per child tax credit, capital 
gains tax rate cuts, as well as an increase in the unified credit 
exemption for death taxes. Families will also be able to save through 
tax relief for education expenses.
  But this is just the beginning.
  Cutting taxes and shrinking government spending are two things that 
will help to remove the obstacles that impede the progress of our 
economy. We must continue to cut taxes even more.
  Current estimates by the Congressional Budget Office place our 
deficit this year around $45 billion. With a robust economy and 
continually declining deficits we could easily reach a balanced budget 
next year--we might even go into surplus for the first time in well 
over a generation--something that would truly make this budget deal 
historic.
  In the spending portion of the budget deal the Administration has 
stated that the amounts agreed to are enough for the operation of the 
federal government. Although I believe that we need to reduce the size 
of the federal government even further.
  We have a deal that limits government, we cannot and should not let 
government grow beyond what we have agreed to here today when revenues 
exceed the costs of the operation of the federal government.
  The question is now upon us as to what we should do next--what we 
should do after having achieved the goals so boldly outlined just three 
short years ago. The debate is no longer about whether we should 
balance the budget or not--it's not about whether we should cut taxes 
or not--we have done those things. The debate before us is now in terms 
of a more limited government with lower taxes. The next question is now 
that we have agreed on the acceptable size of government what should we 
do next.
  The short answer is we must continue to cut taxes.
  Surpluses that are generalized either next year or five years from 
now must be used for further tax reduction. We must make it clear that 
our priority is to provide Americans with as much tax relief as 
possible--and using surpluses to provide additional tax relief makes 
that priority clear. Cutting taxes will continue to fuel the economy 
and will further unleash the potential of our economy to perform at 
full speed. For too long the Congress has worked to hinder the 
functioning of our economy by imposing a multilayered tax system that 
punishes success more than it rewards it.

  We must continue to cut taxes and to make that our priority as we 
move into the next century.

[[Page S8471]]

  Currently, whenever revenues come into the Treasury higher than 
estimated the revenues automatically go to deficit reduction and will 
eventually contribute to paying down the Federal debt once we are 
running a surplus.
  I believe that it is critical that we continue to eliminate the 
deficit and pay down the debt--but we must do that in the context of 
lower taxes for the American people. We can do both--we can provide the 
American taxpayers with much needed tax relief and pay down the debt by 
allocating excess revenues to both tax reduction and debt reduction. 
But we must be vigilant in ensuring that excess revenues do not go to 
more Government spending; they must go to tax cuts and debt reduction 
alone.
  We must continue to limit the size, scope, and intrusiveness of the 
Federal Government. We must further limit Government and force its 
shrinkage through a continuing effort to cut taxes.
  And when we cut the size of Government further we must return the 
money to the taxpayers who have been forced to subsidize its woefully 
inefficient operations for much of this century. The taxpayers deserve 
a break.
  Now, however, we must reject any notions of relaxing at having 
completed this historic budget deal. Rather, we must pick up again, and 
begin again, fighting for more tax relief, more tax cuts, and a 
smaller, less intrusive Federal Government.
  The American people have said they want these things--now we must 
bind ourselves to provide those things--it would be irresponsible to do 
otherwise.
  Thank you Mr. President, I yield the floor.
  Mr. BOND. Mr. President, I rise today in support of H.R. 2014, the 
Revenue Reconciliation Act of 1997. This conference report is the 
product of months of effort by Members of the Senate as well as our 
colleagues in the other body and representatives of the administration. 
This legislation also represents the first real tax cut for the 
American people in over a decade. Today, Americans are bearing an 
enormous burden when it comes to income taxes. According to a recent 
study by the Tax Foundation, the per capita Federal tax burden has 
increased 36.5 percent since 1992 and 57.5 percent since 1988, largely 
because of the severity of the administration's 1993 tax increase.
  In simple terms, the tax burden on Americans today is too high. Many 
Americans now pay more in taxes than they do for food, clothing, and 
housing combined. This bill takes a positive step toward easing that 
burden in an effort to let the hard-working men and women in this 
country keep more of the money they earn.
  While the provisions of this bill reduces taxes in a variety of ways, 
I want to focus on two important groups who will benefit the most from 
this legislation--our American families and the millions of small 
businesses across the Nation.


                           family tax relief

  Family tax relief is a critical part of the conference report that we 
consider today. The child tax credit has long been a Republican 
priority, and as a result of this bill, it is now a reality. Beginning 
in 1998, families will be able to claim a $400 credit per child, which 
will increase to $500 beginning in 1999. In addition, by making the 
credit available for children under age 17, we help many families when 
they need it the most. As a parent, I can attest to the fact that the 
costs of raising a child explode during the teenage years, and through 
this bill millions of parents will not have to struggle so much to meet 
those higher expenses.
  The availability of this credit will benefit more than 43 million 
children and their families. In fact, the Joint Economic Committee 
estimates that a married couple in my State of Missouri who earn 
$30,000 a year and have two children will see their Federal tax burden 
cut in half. That means that those families will be able to keep 
significantly more of their hard-earned income and use it to put food 
on the table rather than subsidizing the huge Federal bureaucracy.
  On the education front, the Revenue Reconciliation Act provides 
relief for millions of students seeking to better themselves and learn 
a trade or other profession. The bill establishes the Hope Scholarship 
and the Lifetime Learning tax credits, which will offset some of the 
high costs that families must bear to continue their children's 
education after high school.
  In addition, this legislation will benefit nearly 5 million students 
through tuition tax relief in the form of State-sponsored prepaid 
tuition programs and new educational IRA's. These programs will allow 
parents to contribute to education savings accounts for a child 
beginning at an early age. As those contributions grow tax-free, a fund 
will be created to pay for tuition, room and board, and related 
expenses when the child goes to a qualifying college or vocational 
school.
  For many students, however, higher education is only possible if they 
finance all or part of the expense through student loans. 
Unfortunately, after accumulating 4 years of such loans, these students 
often graduate into starting positions and large monthly loan payments. 
I am very pleased that this bill will assist over 7 million students in 
this situation by restoring a tax deduction for interest paid on 
student loans. This provision will help today's student who will not 
have had the benefit of the long-term educational savings accounts 
created under the bill, and it will recognize the responsibility and 
commitment that they undertook to achieve their higher education goals.
  While this bill provides important tax relief for families with 
children and for young adults expanding their education, it also helps 
those planning for their retirement years. The bill reduces the 
limitations on individual retirement accounts and will enable more 
Americans to use IRA's to save for their retirement. The legislation 
will also encourage both spouses to save for retirement by permitting a 
nonworking spouse to contribute to an IRA regardless of whether the 
working spouse participates in a pension plan. These changes will not 
only ensure greater retirement security, but will also bolster our 
national savings rate, which is now one of the lowest among 
industrialized nations.


                       small business tax relief

  Mr. President, as the chairman of the Committee on Small Business, I 
am very pleased that this legislation makes great strides for reducing 
the enormous tax burdens on the small businesses in this country. 
According to the Small Business Administration, small firms in this 
country employ 53 percent of the private work force, contribute 47 
percent of all sales in the country, and are responsible for 50 percent 
of the private gross domestic product. In addition, industries 
dominated by small businesses produced an estimated 75 percent of the 
2.5 million new jobs created in 1995.
  In recognition of the important role that small entrepreneurs play in 
this country today, the Revenue Reconciliation Act contains several 
provisions that will help level the playing field for small businesses 
and encourage their continued growth and development. First and most 
important, the bill increases the deductibility of health insurance for 
the self-employed to 100 percent. This is truly a landmark victory for 
small entrepreneurs. For the first time, this legislation recognizes 
that self-employed business owners are entitled to the same tax 
treatment with respect to the deductibility of their health insurance 
costs as their large competitors have received for many years.
  Earlier this year, I introduced legislation that would provide full 
deductibility of health insurance for the self-employed beginning this 
year. While I am disappointed that it will take 10 years under this 
bill to reach full deductibility, we are finally on the right path. Now 
we can turn our attention to realizing that 100 percent level at the 
earliest possible date. Greater deductibility will help the 5.1 million 
uninsured self-employed individuals and their 1.4 million children to 
have greater access to health insurance. It will also help the self-
employed who are already insured to maintain the cost of a single 
person health-insurance policy, which in most cases is substantially 
more expensive than a group insurance policy.
  A second major victory for home-based businesses is the restoration 
of the home-office deduction, which is a major goal of the Home-Based 
Business Act that I introduced earlier this year. For too long home-
based businesses

[[Page S8472]]

have borne the inequality created by the Soliman decision, which 
radically limited the home-based businesses that could claim the 
deduction. Even more troubling is the fact that many home-based 
businesses that would arguably meet the current criteria for the 
deduction never claim it for fear of triggering an IRS audit. This bill 
puts home-based businesses on an equal footing with their larger 
competitors and clears the way for the continued success of these 
important entrepreneurs.
  I am also pleased that we are able to provide a significant reduction 
in the estate tax for family owned businesses and farms. With less than 
one-third of family owned businesses currently being passed on to a 
second generation, and only about one-eighth passed to a third 
generation, estate tax reform for family owned businesses and farms is 
urgently needed. This legislation will provide a $1.3 million exclusion 
from estate tax for these family owned enterprises. In addition, the 
bill will increase the individual estate tax credit to $1 million by 
2006. The result will not only be the preservation of many successful 
family owned businesses and farms that would otherwise have to be sold 
in order to pay the Federal Government, but it will also preserve the 
millions of jobs that these enterprises contribute to our local 
communities.
  Small businesses will also benefit from the capital gains provisions 
in the bill. My committee has heard on many occasions that small 
businesses need greater access to capital. I can think of no better way 
to address that need than by opening up the billions of dollars of 
built-in gains that currently exists in our economy, which the capital 
gains tax reduction is expected to unleash. Small companies will also 
have greater capital access through the provisions in the bill that 
will allow tax-free rollover of gains from an investment in qualified 
small business stock into an investment in another qualified small 
business. This provision will foster investments in small businesses 
and encourage existing investors to repeat their success stories by 
rolling over their gains into new start-up companies.
  Additionally, millions of limited partners, many of whom work in 
small limited partnerships and limited liability companies, can rest 
easy as a result of the moratorium included in the bill that will 
prevent the IRS from finalizing its proposed stealth tax regulation 
before July 1, 1998. This proposed regulation purports merely to define 
who is a limited partner. But in reality, the rule will raise taxes on 
millions of limited partners by regulatory fiat. The Constitution vests 
the power to impose taxes in Congress, and Congress alone. The 
moratorium included in this bill will stop the IRS from usurping that 
power and give Congress an opportunity to exercise its authority to 
find a statutory solution.
  Finally, small business will have extended protection from IRS 
penalties under this legislation as a result of the 6-month extension 
of the penalty-free period for small businesses subject to the 
Electronic Federal Tax Payment System [EFTPS]. This past June, the IRS 
agreed to waive penalties through December 31, 1997, on small 
businesses who are required to pay their taxes electronically starting 
on July 1, 1997. The bill extends the penalty-free period through June 
30, 1998, and will ensure that small firms will not be penalized if 
errors or problems occur. In addition, it will give Congress time to 
enact the legislation, which Senator Nickles introduced and I have 
cosponsored, that would make EFTPS voluntary for most small businesses.
  Mr. President, despite the many positive provisions in this bill for 
small business, there is one glaring omission--a safe harbor for 
independent contractors. The need for such a provisions was made clear 
by the 2,000 delegates to the 1995 White House Conference on Small 
Business who named it the most important issue for the President and 
the Congress to address. For too long millions of entrepreneurs and 
businesses that hire them have lived in constant fear that the IRS will 
use its now infamous 20-factor test to find that a worker was 
misclassified to the tune of thousands of dollars in back taxes, 
interest, and penalties, not to mention the enormous costs of 
accountants and attorneys necessary to fight the IRS.
  No one disputes that the IRS has a duty to collect Federal revenues 
and to enforce the tax laws. The problem in this case is that the IRS 
is using a procedure that is patently unfair and is doing so on an 
increasingly frequent basis. It is time for companies, workers, and 
most especially the IRS, to have clear rules for determining the status 
of workers.
  The legislation that I introduced earlier this year reaches that goal 
through a general safe harbor based on clear, objective criteria and a 
bar against retroactive reclassification of workers by the IRS. I 
remain committed to working with those on all sides of this issue to 
find an answer to this critical problem, and I call on my colleagues on 
both sides of the aisle to join with me in that endeavor. Let's end the 
environment of fear in which small businesses and self-employed 
individuals now must live. They should be able to spend less time 
looking over their shoulder for an IRS audit, and more time doing what 
they do best--contributing to the growth and strength of our economy 
and creating much-needed jobs.
  Mr. President, the Revenue Reconciliation Act that we consider today 
will help Americans in so many ways, from raising children and 
educating them to helping small businesses continue to be the economic 
engine of this country. In addition, it is the culmination of so many 
of the efforts that we began more than 2 years ago to bring meaningful 
tax relief to hard-working Americans across this country. I urge all of 
my colleagues to support this important legislation.
  Mr. ROTH. Mr. President, I ask unanimous consent that the 
distribution tables for 1998-2002 on the conference report to H.R. 
2014, the Taxpayer Relief Act of 1997, as prepared by the Joint 
Committee on Taxation be printed in the Record.
  The distribution tables show that the Taxpayer Relief Act of 1997 is 
a substantial tax cut for America's overtaxed middle-income families.
  There being no objection, the tables were ordered to be printed in 
the Record, as follows:

                              DISTRIBUTIONAL EFFECTS OF THE CONFERENCE AGREEMENT ON THE REVENUE PROVISIONS \1\ OF H.R. 2014                             
                                                                  [Calendar year 1998]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Change in federal taxes   Federal taxes \3\ under   Federal taxes \3\ under     Effective tax rate   
                                                             \3\                   present law                proposal                (percent) \4\     
               Income category \2\               -------------------------------------------------------------------------------------------------------
                                                    Millions     Percent      Billions     Percent      Billions     Percent    Present law    Proposal 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................         -$26         -0.5           $5          0.4           $5          0.4          5.4          5.4
10,000 to 20,000................................       -1,870         -5.9           31          2.5           30          2.4          8.5          7.9
20,000 to 30,000................................       -3,477         -4.9           70          5.6           67          5.4         13.7         13.0
30,000 to 40,000................................       -4,244         -4.3           98          7.8           93          7.6         16.5         15.8
40,000 to 50,000................................       -3,372         -3.3          103          8.2           99          8.1         17.7         17.1
50,000 to 75,000................................       -6,628         -2.6          251         20.0          244         19.9         20.2         19.6
75,000 to 100,000...............................       -3,242         -1.7          193         15.4          189         15.4         23.1         22.6
100,000 to 200,000..............................         -178         -0.1          251         20.0          251         20.4         25.1         24.8
200,000 and over................................        1,076          0.4          251         20.0          252         20.5         30.2         28.6
                                                 -------------------------------------------------------------------------------------------------------
      Total, all taxpayers......................      -21,961         -1.8        1,253        100.0        1,231        100.0         20.7         20.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Includes child credit, capital gains reform, education incentives, IRA expansion, self-employed health deduction increase, EIC reduction, individual
  AMT depreciation conformity and relief for farmers, and air travel taxes attributable to personal travel. Does not include increases in the cigarette 
  excise tax.                                                                                                                                           
(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer      
  contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, [5] nontaxable social security benefits,
  [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and [8] excluded income of U.S. citizens living abroad.       
  Categories are measured at 1997 levels.                                                                                                               
(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), and excise    
  taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who are     
  dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.                                                      

[[Page S8473]]

                                                                                                                                                        
(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional income      
  attributable to the proposal.                                                                                                                         
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    
                                                                                                                                                        
Detail may not add to total due to rounding.                                                                                                            


                              DISTRIBUTIONAL EFFECTS OF THE CONFERENCE AGREEMENT ON THE REVENUE PROVISIONS \1\ OF H.R. 2014                             
                                                                  [Calendar year 1999]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Change in federal taxes   Federal taxes \3\ under   Federal taxes \3\ under     Effective tax rate   
                                                             \3\                   present law                proposal                (percent) \4\     
               Income category \2\               -------------------------------------------------------------------------------------------------------
                                                    Millions     Percent      Billions     Percent      Billions     Percent    Present law    Proposal 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................         -$33         -0.7           $5          0.4           $5          0.4          5.7          5.6
10,000 to 20,000................................       -2,051         -6.5           32          2.4           29          2.3          8.3          7.8
20,000 to 30,000................................       -3,955         -5.5           72          5.5           69          5.4         13.6         12.9
30,000 to 40,000................................       -5,088         -5.0          101          7.7           96          7.5         16.5         15.6
40,000 to 50,000................................       -4,115         -3.9          107          8.1          102          8.0         17.5         16.8
50,000 to 75,000................................       -8,255         -3.2          259         19.8          251         19.6         20.0         19.3
75,000 to 100,000...............................       -4,358         -2.1          204         15.6          200         15.6         23.0         22.4
100,000 to 200,000..............................       -1,101         -0.4          264         20.2          263         20.6         25.1         24.7
200,000 and over................................       -1,893         -0.7          264         20.2          262         20.5         30.2         28.7
                                                 -------------------------------------------------------------------------------------------------------
      Total, all taxpayers......................     -$30,850         -2.4        1,309        100.0        1,278        100.0         20.6         20.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Includes child credit, capital gains reform, education incentives, IRA expansion, self-employed health deduction increase, EIC reduction, individual
  AMT depreciation conformity and relief for farmers, and air travel taxes attributable to personal travel. Does not include increases in the cigarette 
  excise tax.                                                                                                                                           
(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer      
  contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, [5] nontaxable social security benefits,
  [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and [8] excluded income of U.S. citizens living aboard.       
  Categories are measured at 1997 levels.                                                                                                               
(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), and excise    
  taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who are     
  dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.                                                      
(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional income      
  attributable to the proposal.                                                                                                                         
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    
                                                                                                                                                        
Detail may not add to total due to rounding.                                                                                                            


                              DISTRIBUTIONAL EFFECTS OF THE CONFERENCE AGREEMENT ON THE REVENUE PROVISIONS \1\ OF H.R. 2014                             
                                                                  [Calendar year 2000]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Change in federal taxes   Federal taxes \3\ under   Federal taxes \3\ under     Effective tax rate   
                                                             \3\                   present law                proposal                (percent) \4\     
               Income category \2\               -------------------------------------------------------------------------------------------------------
                                                    Millions     Percent      Billions     Percent      Billions     Percent    Present law    Proposal 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................         -$40         -0.8           $5          0.4           $5          0.4          5.8          5.7
10,000 to 20,000................................       -2,143         -6.7           32          2.3           30          2.2          8.3          7.7
20,000 to 30,000................................       -4,075         -5.5           75          5.4           71          5.3         13.6         12.8
30,000 to 40,000................................       -5,189         -4.9          105          7.7          100          7.5         16.4         15.6
40,000 to 50,000................................       -4,152         -3.8          110          8.1          106          7.9         17.5         16.8
50,000 to 75,000................................       -8,197         -3.1          267         19.4          258         19.3         19.7         19.1
75,000 to 100,000...............................       -4,482         -2.1          218         15.9          213         15.9         22.8         22.3
100,000 to 200,000..............................       -1,096         -0.4          280         20.4          278         20.8         25.0         24.7
200,000 and over................................       -2,439         -0.9          279         20.4          277         20.7         30.2         28.7
                                                 -------------------------------------------------------------------------------------------------------
      Total, All Taxpayers......................      -31,812         -2.3        1,371        100.0        1,339        100.0         20.6         20.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Includes child credit, capital gains reform, education incentives, IRA expansion, self-employed health deduction increase, EIC reduction, individual
  AMT depreciation conformity and relief for farmers, and air personal travel taxes attributable to personal travel. Does not include increase in the   
  cigarette excise tax.                                                                                                                                 
(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer      
  contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, [5] nontaxable social security benefits,
  [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and [8] excluded income of U.S. citizens living aboard.       
  Categories are measured at 1997 levels.                                                                                                               
(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), and excise    
  taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who are     
  dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.                                                      
(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional income      
  attributable to the proposal.                                                                                                                         
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    
                                                                                                                                                        
Detail may not add to total due to rounding.                                                                                                            


                              DISTRIBUTIONAL EFFECTS OF THE CONFERENCE AGREEMENT ON THE REVENUE PROVISIONS \1\ OF H.R. 2014                             
                                                                  [Calendar year 2001]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Change in federal taxes   Federal taxes \3\ under   Federal taxes \3\ under     Effective tax rate   
                                                             \3\                   present law                proposal                (percent) \4\     
               Income category \2\               -------------------------------------------------------------------------------------------------------
                                                    Millions     Percent      Billions     Percent      Billions     Percent    Present law    Proposal 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................         -$52         -1.0           $5          0.4           $5          0.4          5.8          5.8
10,000 to 20,000................................       -2,395         -7.4           32          2.2           30          2.1          8.3          7.7
20,000 to 30,000................................       -4,359         -5.6           77          5.4           73          5.2         13.5         12.8
30,000 to 40,000................................       -5,359         -4.9          109          7.6          104          7.4         16.4         15.6
40,000 to 50,000................................       -4,324         -3.8          114          8.0          110          7.8         17.4         16.7
50,000 to 75,000................................       -8,116         -3.0          274         19.1          266         18.9         19.6         18.9
75,000 to 100,000...............................       -4,533         -1.9          235         16.4          230         16.4         22.8         22.2
100,000 to 200,000..............................         -570         -0.2          295         20.5          294         20.9         25.0         24.7
200,000 and over................................       -1,162         -0.4          294         20.5          293         20.8         30.3         28.7
                                                 -------------------------------------------------------------------------------------------------------
      Total, all taxpayers......................      -30,870         -2.1        1,437        100.0        1,406        100.0         20.6         20.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Includes child credit, capital gains reform, education incentives, IRA expansion, self-employed health deduction increase, EIC reduction, individual
  AMT depreciation conformity and relief for farmers, and air travel taxes attributable to personal travel. Does not include increases in the cigarette 
  excise tax.                                                                                                                                           
(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer      
  contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, [5] nontaxable social security benefits,
  [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and [8] excluded income of U.S. citizens living aboard.       
  Categories are measured at 1997 levels.                                                                                                               
(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), and excise    
  taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who are     
  dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.                                                      
(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional income      
  attributable to the proposal.                                                                                                                         
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    
                                                                                                                                                        
Detail may not add to total due to rounding.                                                                                                            


[[Page S8474]]


                              DISTRIBUTIONAL EFFECTS OF THE CONFERENCE AGREEMENT ON THE REVENUE PROVISIONS \1\ OF H.R. 2014                             
                                                                  [Calendar year 2002]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Change in federal taxes   Federal taxes \3\ under   Federal taxes \3\ under     Effective tax rate   
                                                             \3\                   present law                proposal                (percent) \4\     
               Income category \2\               -------------------------------------------------------------------------------------------------------
                                                    Millions     Percent      Billions     Percent      Billions     Percent    Present law    Proposal 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................         -$70         -1.3           $5          0.4           $5          0.4          5.9          5.8
10,000 to 20,000................................       -2,702         -8.3           33          2.2           30          2.0          8.3          7.6
20,000 to 30,000................................       -4,748         -6.0           80          5.3           75          5.1         13.5         12.7
30,000 to 40,000................................       -5,646         -5.0          114          7.5          108          7.3         16.4         15.5
40,000 to 50,000................................       -4,537         -3.8          120          7.9          115          7.8         17.3         16.7
50,000 to 75,000................................       -8,260         -2.9          284         18.9          276         18.7         19.3         18.8
75,000 to 100,000...............................       -4,696         -1.9          248         16.5          243         16.5         22.7         22.2
100,000 to 200,000..............................         -614         -0.2          312         20.8          312         21.2         25.0         24.7
200,000 and over................................       -2,019         -0.7          310         20.6          308         20.9         30.3         28.7
                                                 -------------------------------------------------------------------------------------------------------
      Total, all taxpayers......................      -33,293         -2.2        1,505        100.0        1,471        100.0         20.6         20.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Includes child credit, capital gains reform, education incentives, IRA expansion, self-employed health deduction increase, EIC reduction, individual
  AMT depreciation conformity and relief for farmers, and air personal travel taxes attributable to personal travel. Does not include increase in the   
  cigarette excise tax.                                                                                                                                 
(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer      
  contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, [5] nontaxable social security benefits,
  [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and [8] excluded income of U.S. citizens living aboard.       
  Categories are measured at 1997 levels.                                                                                                               
(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), and excise    
  taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who are     
  dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.                                                      
(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional income      
  attributable to the proposal.                                                                                                                         
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    
                                                                                                                                                        
Detail may not add to total due to rounding.                                                                                                            

  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Will the Senator from Arkansas yield some time?
  Mr. BUMPERS. Mr. President, I am delighted to yield to the Senator 
from Maryland.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland is recognized. He 
has the floor.
  Mr. LOTT. Will the Senator yield for a unanimous-consent request that 
I think would be of great interest to all Senators?
  Mr. SARBANES. I am happy to do that.


                      Unanimous-Consent Agreement

  Mr. LOTT. Mr. President, I believe that everybody knows what is in 
this bill now and Senators have had many opportunities to express their 
enthusiastic support for the bill. It seems to me that Senators are 
ready to vote. If we can get this unanimous-consent agreement that I 
have discussed with the Democratic leader, we would have this vote this 
afternoon and we would be through with our work and we would not have 
another vote until Wednesday, September 3.
  I ask unanimous-consent that the vote occur on adoption of the 
pending tax fairness conference report at 6 p.m. this evening, and that 
no further action occur prior to the vote.
  The PRESIDING OFFICER. Is there objection?
  Mr. BYRD. Reserving the right to object, Mr. President. I reserve the 
right to object not for the purpose of objecting, but for the purpose 
of making a brief statement with respect to my vote on the last 
rollcall vote. I think the Senate made a mistake, and I had hoped to be 
here in time to express my opposition to the motion to waive all points 
of order.
  I think that was a mistake. These are the reasons why it is a 
mistake. I was not--along with most of the other Members of this body--
a conferee on this resolution. I know very little about what's in the 
bill--only by asking questions of staff and listening to other Members. 
But I had nothing to do with the conference report that was brought 
back. Many of the Senators in here are in the same boat.
  What goes into that conference report depends a lot on the actions of 
the House of Representatives. They are a part of the conference report 
that comes back here for us to vote on. Our only recourse--inasmuch as 
we cannot amend the conference report, our only recourse, if indeed we 
want to get a vote on something in that conference report, is to make a 
point of order if the point of order is available.
  The Byrd rule was devised for the purpose of keeping extraneous 
matter off reconciliation measures because there was very little time 
on a reconciliation bill for debate, and on a conference report, there 
is no opportunity to amend it. And so we devised the Byrd rule to keep 
off these pieces of extemporaneous legislation that were often complex, 
costly, and needed to be aired and debated by the representatives of 
the people. That was the purpose of the Byrd rule.
  I looked over the Byrd rule violations that were involved here. I saw 
none that I would question. Some of the Byrd rule violations are good, 
in my view. But at least I had the opportunity, I had the right to 
raise a point of order and get a vote. I could not amend the conference 
report, so a point of order would be my only way to delete from the 
bill an extemporaneous matter and get a vote on it. And now the Senate 
has adopted a motion that waived all points of order. It took away your 
rights, your rights, your rights, and my rights, if we had wanted to 
make a point of order under the Byrd rule.
  It was a bad precedent. What are we going to do the next time--the 
next time we bring in a reconciliation bill? The first thing, if the 
majority so wishes, could be to move to waive all points of order? They 
have the votes. They have the votes. We might be in the majority the 
next time, or we may not be.
  Another thing that happens in these conferences is, the 
administration, which is a separate branch of Government--and I still 
hold that there are three equal, coordinate branches of this 
Government. I don't salute the executive branch. I don't serve under 
any President. I serve with the President. But the administration goes 
into these conferences, whether it is a Republican administration or a 
Democratic administration, and tries to dominate those conferences, 
tries to get matters included in the conference report right at the 
last minute so we won't have time to air them under the limited time 
for debate. But there is still a point of order that a Senator has a 
right to make, and especially under the Byrd rule, because usually if 
the administration wants to put in something, it may be an authorizing 
measure, it is something which ought to be debated. But because they 
can get it in the reconciliation bill, if they can get by the Byrd rule 
points of order, then they are home scot-free. I am opposed to that. I 
think we made a mistake. It is a bad precedent. And I only wish I had 
had time to express my viewpoint before we voted. Maybe it would not 
have changed any votes, but still I would have had an opportunity. I 
thank all Senators for listening. I apologize for imposing on your 
time.
  Mr. LOTT. Mr. President, I renew my request.
  The PRESIDING OFFICER. Is there objection to the unanimous-consent 
request?
  Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, just 4 years ago, in 1993, in order to 
reduce the deficit, the Congress, by a narrow margin, enacted a budget 
resolution that curtailed programs and increased taxes--taxes that fell 
primarily on those at the upper end of the income scale. This 
combination of spending restraint and revenue increases represents a 
logical way of dealing with the deficit issue.

[[Page S8475]]

  This approach has worked in a most impressive way. The flourishing 
economy has brought unemployment below 5 percent for the first time in 
a quarter of a century. While unemployment is at a quarter-century low, 
inflation is at a 31-year low. I don't know what better proof you can 
offer of a strong economy than the low unemployment rate and low 
inflation rate we are now experiencing. As a consequence of this 
flourishing economy, the deficit has declined on a steady basis since 
fiscal year 1992. It has come straight down in each succeeding fiscal 
year from $290 billion to $255 billion, to $203 billion, to $164 
billion, to $107 billion in the fiscal year that ended last September 
30, and it is now expected to be below $50 billion for the current 
fiscal year come this September 30.
  As a percentage of gross domestic product, the deficit has gone from 
4.9 percent--a very worrisome figure--in 1992 to well under 1 percent 
for the current fiscal year, the best performance since 1974. So you 
have the best unemployment rate in 25 years, the lowest inflation in 31 
years, the lowest deficit as a percent of GDP in 23 years. We are doing 
far better than any of the other major industrial countries. So it is a 
very impressive economic and deficit-reduction performance indeed that 
we are now witnessing.
  Given this performance, one would think that the wise policy would be 
to stay the course and finish the job, that we would choose to continue 
following the path on which we find ourselves. Today we have already 
enacted budget cuts and spending restraints, legislation which 
obviously works in the direction of deficit reduction. But now we are 
passing a tax cut when the objective, or so everyone states, is deficit 
reduction.
  Tax cuts obviously work against deficit reduction. And the tax cuts 
contained in this legislation are particularly destructive of deficit 
reduction in that they will grow over time in a way that may well 
jeopardize the goal of reaching and staying in budget balance 
altogether.
  The capital gains, inheritance, and IRA tax cuts all carry with them 
the potential for substantial increases in future years. In fact, the 
tables put out by the Joint Tax Committee itself with respect to the 
tax cuts contained in this conference report tell this very tale. For 
the first 5 years covered by this legislation--1998-2002--estate tax 
cuts will cost $6 billion in revenues. For the next 5 years, from 2003 
to 2007, they will cost $28 billion in revenue. That is the upward 
trendline from the first 5 years to the second 5 years. We don't have 
the figures for beyond the initial 10-year period. They have not been 
provided to us. So we are in a sense being asked to make this decision 
in the dark. But it is reasonable to assume that these estate tax cuts 
will continue on that upward trajectory.
  Capital gains cuts in this conference report are listed as producing 
$123 billion in revenues over the first 5-year period, 1998 to 2002, 
and then to cost $21 billion from 2003 to 2007 with no projection 
beyond that point.
  IRA's will cost $1.8 billion in the first 5 years, $18 billion in the 
next 5 years. And the alternative minimum tax costs $8 billion in the 
first 5 years and $12 billion in the 5 years thereafter.
  So, as everyone can see, we are on an upward trajectory that makes it 
reasonable to assume that the loss in revenues over the second 10-year 
period will be well in excess of $0.5 trillion.
  This rising trend will, in effect, undercut--if not derail--the 
deficit reduction effort.
  Is it not imprudent--indeed, irresponsible--to commit to such tax 
cuts before we have actually achieved budget balance and before we have 
a more accurate and realistic view of whether it can be sustained?
  As the Baltimore Sun said in an editorial only yesterday, and I 
quote:

       The question remains: Will the generous tax cuts come back 
     to haunt the country in the form of widening deficits as the 
     tax cuts take full effect several years down the road?'' The 
     answer, judging from the figures I have just cited, appears 
     to be yes.

  Furthermore, let me note that all of this is premised on the economy 
continuing to function as strongly as it is functioning right now. In 
effect, with this tax cut, we are giving away our margin to engage in a 
countercyclical fiscal policy, if we have an economic downturn. What 
would we do in a downturn when, in fact, you might want to do a tax cut 
in order to stimulate the economy to help move us out of the recession 
when, in fact, you have proceeded to use up the margin for taking such 
policy action with the legislation that is here before us.
  Second, these tax provisions before us in this conference report are 
strikingly inequitable, and result in a disproportionate share of the 
burdens of deficit reduction being placed on lower income individuals 
and families. The impact of the reduction in programs contained in the 
spending bill passed earlier today will be felt by ordinary working 
people, primarily. The tax reductions contained in this legislation, 
far from burdening upper income individuals, will primarily benefit 
those at the top end of the income scale.
  In fact, it has been reliably estimated that the top 1 percent of the 
income scale will receive 30 percent of the tax benefits contained in 
this conference report. The top 5 percent will receive 44 percent of 
the benefits. And the top 20 percent, the upper quintile, will receive 
77 percent of the tax benefits contained in this conference report. I 
repeat, the top quintile will receive 77 percent of the benefits.
  By contrast, the bottom 60 percent, the lowest three quintiles, will 
receive less than 7 percent of the benefits. So the top fifth of the 
income pyramid is going to get 11 times the benefit that the bottom 
three-fifths of the income pyramid will receive under this proposal.
  There is no way that can be regarded as an equitable arrangement. 
And, in fact, what is happening here is, in order to move toward 
deficit reduction, additional burdens are being put on working people. 
In fact, under this conference report, the people at the top end of the 
scale, instead of making a contribution to deficit reduction, are 
getting out from some of the burden which they now bear, a burden which 
has helped to bring the deficit down to the point at which we find 
ourselves today.
  A budget agreement and the tax measure to implement it should 
undertake equitable deficit reduction apportioning the burdens in a way 
that it is reasonably spread across the entire society, as was done in 
1993 when ordinary working people made their contribution through 
program reductions, and those at the top end of the income scale made 
their contribution through tax increases. Here again we have working 
people bearing their share of the burden of program reduction. But the 
tax breaks contained in this resolution go very much to those at the 
upper end of the income scale, leaving working Americans bearing a far 
larger percentage of the load.
  So one must conclude this budget fails the equity test. A budget 
agreement and the tax program to implement it should also lead to 
lasting long-term deficit reduction. I don't think this legislation 
will do that. In fact, as I have already discussed at length, I have 
very deep concern that in the long term, as the Sun editorial 
indicated--in posing the basic question, ``Will the generous tax cuts 
come back to haunt the country in the form of widening deficits as the 
tax cuts take full effect several years down the road?''--this 
conference report will do serious damage to our long-term deficit 
reduction efforts.
  These tax cuts will explode in the outyears. They start exploding 
even within the 10-year period. Let me repeat the figures: The estate 
tax cuts go from a loss of revenue of $6 billion in the first 5 years 
to a loss of $28 billion in the next 5 years, and presumably more in 
the outyears. Capital gains are scored under this conference report to 
earn revenues--earn revenues--of $123 billion in the first 5 years, and 
to cost $21 billion in the next 5 years, and presumably more in the 
outyears.
  IRA's are scored here to cost $1.8 billion--less than $2 billion--in 
the first 5 years, $18 billion in the next 5 years, again with no 
projection beyond that, although everyone assumes it is on an upward 
trajectory.
  So, Mr. President, this measure before us also fails the long-term 
deficit reduction test, just as it fails the equity test. In effect, it 
does not have either of two essential attributes--equitable deficit 
reduction and lasting long-term deficit reduction--that should inform a 
tax bill.
  For those reasons, I must oppose the measure before us.

[[Page S8476]]

  I thank the Senator for yielding me time.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, I would like to yield 10 minutes, or such 
time as he may use, to the distinguished Senator from Virginia [Mr. 
Robb].
  Are we going back and forth?
  I apologize for that, and withhold the request.
  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from Montana.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BURNS. Mr. President, I thank my good friend from Delaware.
  I rise today in support of this package. I guess every now and again 
we get into a situation where we have a big bill in front of us. I know 
that there is a good friend of mine on the floor now. I call him one of 
the greatest American slaves to his labor than anybody, and that is 
Senator Domenici from New Mexico on Budget, now with Senator Roth at 
the helm on Finance.
  A lot of things that we have tried to do in the last 6 or 7 or 10 
years we get in this bill.
  We had a problem one time in the caucus. I can remember my good 
friend from Wyoming. It got kind of quiet. Nobody was coming up with 
any answers. He said, ``Our biggest problem is we are overthinking this 
thing.'' And we could be doing just that.
  But I want to remind America what it is all about. And that is middle 
America and what it means to young men and women who are starting out 
in agriculture on their farms. This is income averaging, because we are 
going to phase out subsidies, folks. We have to allow those who are 
starting off in the farming business, and those who want to sell a 
farm, to have capital gains relief--those who inherit farms. We are 
giving them some way that we can pass our farms and ranches on to the 
next generation. In other words, we don't have to sell the farm to save 
the farm, and income averaging, allowing a young man and a young woman 
on a farm to accumulate cash and save it in the good years so that they 
can make it through the bad years. That is basically what we want to 
do. And I call them farm friendly provisions of this budget deal.
  In small business, the ability and just a short time to write off 100 
percent of your premiums for a tax credit on your health care 
insurance; you get your home office tax credit back; the alternative 
minimum tax for small businesses and farming operations. Yes, on that 
same farm or ranch they have children; and the $500-per-child tax 
credit, which, in my State, means that $200 million a year stays in 
that State. And the decision on who spends that money is left to the 
parents. That decision will be made around a breakfast table rather 
than around a conference table here in Washington, DC.
  So let us take a look at the big picture. Let us take a look at the 
people who really pull the wagon. They have been looking for relief a 
long time. It is in this package.
  I congratulate my good friend from New York and my good friend from 
Delaware because they have worked a long, long time. And, yes, you can 
find something in here that you do not like. But let us not let 
perfection stand in the way of progress. Let us at least take that one 
giant step in the right direction and let people control those dollars 
that they have worked so hard to earn.
  Across my State of Montana, we are agriculture and we are small 
business. So this package is just like a rifle shot; it is pointed 
right at those people who really are the heart and soul of any 
community, and, yes, the working men and women of this country. I am 
going to support it. I hope that all of my colleagues will support it. 
And then if there is something wrong, this body is not encased in 
stone. There is plenty of time to put some fixes in that maybe should 
be put in. But nonetheless, right now let us take that one giant step 
in the right direction.
  Mr. President, I yield the floor and I yield back the remainder of my 
time.
  The PRESIDING OFFICER (Mr. Abraham). Who yields time?
  Mr. MOYNIHAN. Mr. President, the Senator from Virginia would like 5 
minutes.
  The PRESIDING OFFICER. The Senator from Virginia is recognized for up 
to 5 minutes.
  Mr. ROBB. Mr. President, I thank the Chair and I thank the 
distinguished Senator from New York.
  I had planned to make a longer formal statement today, but I will be 
very brief given the lateness of the hour. Most of the things that I 
wanted to say have already been said, and in most cases said more 
eloquently than I suspect I could say them. I really do not enjoy being 
the burr under the saddle when there is so much euphoria. Many good 
people have worked long and hard to achieve this compromise which I 
think is ultimately the only way that the system works in terms of the 
major proposals that we deal with in this institution.
  I applaud the President and the Republican leadership for working 
together. I applaud the ranking members and the chairs of the Finance 
Committee and the Budget Committee. I have had the privilege of working 
with the chairman of the Budget Committee for almost 20 years. In my 
prior incarnation as a Governor, Senator Domenici was always one of the 
most respected Members of either party from Congress on matters that 
related to fiscal policy. I know for him this budget agreement 
represents a major milestone. I know how hard he has worked and I know 
of his personal commitment to fiscal responsibility and to bringing 
down the deficit. It is real. I have seen him make tough decisions and 
without compromising his view of the deal that was finally struck 
between the President and the leadership in Congress. My guess is that 
he is at least as enthusiastic, if not more so, about the deficit 
reduction portion than perhaps some of the timing on the tax cuts.
  I would say that there are very few people that I know, Mr. 
President, who wouldn't like to have their taxes reduced. My problem is 
with the timing of the tax cuts. We have been making real progress on 
the deficit in the last few years. We are on the right course. We have, 
as the Senator from Maryland indicated just a minute ago, some of the 
most favorable economic statistics and optimistic projections we have 
ever had. If ever we were going to make real long-term progress, not 
only in reducing the deficit but in actually beginning to reduce the 
debt, so that we would not be passing on to our children and 
grandchildren the kinds of burdens that we continue to accumulate, now 
is the time to address that challenge. And yet we fail to do so at this 
particular time.
  We are providing tax cuts that will be gratefully received by many. 
We are providing incentives for many good programs. And again I applaud 
the President and the leadership of Congress and all of those who have 
been involved in this effort. But we are missing an opportunity that 
may not come again to make a substantial effort toward long-term fiscal 
responsibility. I am even more concerned that some of the proposals 
that we are going to pass today will have some very unfortunate 
consequences in the outyears.
  I think we will have to look back upon our time on watch and answer 
to future generations as to why, when we had this opportunity, this 
window of opportunity in our history, when so many of the economic 
indicators are so good, we were not willing to make the tough choices.
  I voted for the package this morning with a tinge of regret. As I 
have been committed to deficit reduction for my entire public career, I 
was disappointed that we failed to include in that particular package 
some rather modest, but important, restraints on entitlement growth, 
restraints that made sense for our long-term future. They were among 
the very first parts of the proposal that we moved away from. Just as 
we failed to show the political courage to take the kind of steps that 
we could have taken when respected economists told us what the Consumer 
Price Index was doing to all of the programs that were related to it 
and the impact a revision would have on the long term. What we are 
doing here today is providing the kind of good news in the short term 
that many of our citizens will respond favorably to, but in the long 
term all of us are going to have to answer for the consequences of our 
actions.
  With that, Mr. President, I thank the Chair. I applaud those who have 
worked hard to reach this particular agreement, but I respectfully 
dissent.

[[Page S8477]]

  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. I yield 3 minutes to the distinguished Senator from 
Arizona.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, I congratulate Senator Roth, Senator 
Domenici, Senator Moynihan, and especially our leader for this landmark 
agreement.
  However, I wish to remark on the conference agreement provision that 
gives $2.3 billion to Amtrak under the guise of so-called tax relief. 
Mr. President, this has got to be called the great train robbery. It 
used to be in the Old West that the outlaws took money from the trains. 
Now the trains are taking money from the taxpayers--$2.3 billion. The 
James boys, Jesse and Frank, did not have the imagination that this 
incredible scheme does. It is not to be believed.
  Do you know how they are going to get that $2.3 billion, Mr. 
President? They are going to get it with a $2.3 billion tax break in 
taxes they never paid. Amtrak has never paid any taxes. In fact, they 
have lost $20 billion since they came into being. They have lost $20 
billion. Now we are going to take tax relief from the freight trains 
that used to run prior to Amtrak ever coming into existence.
  Mr. President, this is most bizarre. I have only been here 10 years, 
and I am sure some bizarre and Orwellian things have happened, but this 
is the most bizarre thing I have ever seen. The only thing, the only 
thing I think that saves this is that Congress, the leader and others 
have demanded that reform be part of the package. And our friends on 
the other side of the aisle, rather than grabbing ahold of this 
greatest sweetheart deal in history, won't even agree to reforms. Right 
now, if you are laid off from Amtrak, you stay for 6 years on the 
payroll, and our friends will not even agree to doing away with that 
incredible, incredible, unbelievable break.
  Now, I guess this provision that unless reform is agreed to this 
bailout--bailout is not the word. My vocabulary does not encompass the 
ability to describe what we are doing here with this $2.3 billion to 
Amtrak--$2.3 billion. Not a single reform. And I thank Senator 
Hutchison of Texas who has worked hard on this issue and many others, 
but I well tell you, Mr. President, I am going to vote for this bill, 
but I hope and pray we never see anything like this great train robbery 
ever again.
  Mr. President, I yield back the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I yield myself 1 minute.
  Mr. President, I appreciate the concerns expressed by my 
distinguished colleague, but I feel that a little history will readily 
help us understand exactly why we have done what we have done with 
Amtrak.
  We are in complete agreement that Amtrak is in a serious financial 
crisis.
  It may not survive through next year, and according to the GAO, the 
most important measure Congress can take to help Amtrak through this 
crisis is to provide a stable capital funding source.
  In an effort to provide this funding, I introduced legislation that 
would have created a dedicated trust fund for Amtrak.
  This fund would have been financed by transferring one half-cent-per-
gallon of the excise taxes imposed on all motor fuels currently going 
to the general fund to a new rail fund for Amtrak. This would have 
provided $2.3 billion in capital funding over the next 3\1/2\ years.
  By a vote of 77 to 21, the Senate overwhelmingly approved this 
funding source.
  However, during the conference on the tax bill, the House conferees 
demanded that the secure funding source for Amtrak be contingent on a 
reform bill being enacted. And the House conferees demanded that the 
funding must be provided through the Tax Code in place of the reserve 
fund mechanism contained in the Senate-passed version of the tax bill.
  This is why the conference agreement now includes a tax refund for 
Amtrak. And while this is not my first preference in providing capital 
funding for Amtrak, it provides the necessary capital to keep Amtrak 
alive. The conference agreement gives Amtrak the benefit of electing no 
more than $2.3 billion in net operating losses over 2 years.
  Amtrak must use the benefit for capital expenses and provide a 
portion of this benefit for non-Amtrak States for their transportation 
related expenditures.
  This relief is based on the fact that Amtrak has incurred billions of 
dollars of losses as a result of inheriting revenue losing passenger 
rail service since its formation in 1971.
  The tax provision contained in the conference report merely provides 
the same type of tax relief that would have been available to its 
predecessor railroads had Amtrak not been formed in that year.
  Mr. President, the bottom line is that Amtrak desperately needs this 
relief.
  The current path Washington is taking to address our transportation 
needs is to spend more money on highways and airports. In doing this, 
we must not overlook the vital importance of passenger rail. Last year 
Washington spent $20 billion for highways, while capital investment for 
Amtrak was less than $450 million.
  In relative terms, between fiscal year 1980 and fiscal year 1994, 
transportation outlays for highways increased 73 percent, aviation 
increased 170 percent, and transportation outlays for rail went down by 
62 percent. In terms of growth, between 1982 and 1992 highway spending 
grew by 5 percent, aviation by 10 percent, while rail decreased by 9 
percent.
  The time has come to invest in our rail system. The money Amtrak 
needs to survive is in this tax bill, but it can't be spent until a 
reform bill is enacted. The bottom line is without a reform bill none 
of this money will be available to Amtrak. I have done my part, it is 
now time for all the parties to work together on a reform package. 
Without reforms, Amtrak won't have the resources it needs to survive.
  I just want to make it clear that we are about to have the last clear 
chance to save the American railroad passenger system. I point out that 
in the legislation there is a requirement that there must be reform. 
Make no mistake about that. But the fact is I think it would be a 
serious mistake that the greatest, sole superpower in the world does 
not have a passenger system. It is bad from the standpoint of 
transportation, it is bad from the standpoint of environment, and I 
hope that we are able to get the job done so that we have this modern, 
clean transportation.
  I yield 4 minutes to the distinguished Senator from Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, first, I wish to compliment and 
congratulate the chairman of the Finance Committee, Senator Roth, and 
his counterpart, Senator Moynihan, for the bipartisan way in which they 
have worked to put this bill together. Also, I wish to compliment the 
majority leader of the Senate, Senator Lott, and Speaker of the House, 
Speaker Gingrich, because, frankly, they set up the design to make this 
happen. They said let's get something passed. Let's pass a law. Let's 
reach out. Let's have Democrat support. Let's not jut pass a Republican 
package.
  I will tell you, I think the bill we passed 2 years ago was a lot 
better. It had a net tax cut of $245 billion. This bill has a tax cut 
of $95 billion. The difference is this is going to become law. That is 
important. The tax bill we passed a couple of years ago had a tax 
credit of $500 per child. We have it in this bill. And so if a family 
of median income has three kids, that's $1,500 that they get to spend, 
not Washington, DC. It is their money. They earned it. They should be 
able to keep it. That is the whole premise of this package.
  We have education relief. I hear some of my colleagues who are 
opposing this say, well, it does too much for the wealthy. It's really 
slanted toward the upper income. That is totally false; 82 percent of 
the package goes to education and the family tax credit. Those are 
limited to middle income. Families with over $100,000 or over $110,000 
do not qualify. So this is targeted towards families, middle-income 
families.
  I think it is a good package. It also has IRA's, and I compliment 
Chairman Roth because he has been so steadfast

[[Page S8478]]

in pushing for individual retirement accounts for spouses. Now we have 
millions of nonworking spouses that will be able to invest in an IRA 
before taxes. I think that is a very positive provision. We have 
educational IRA's, again because of Chairman Roth. We have relief from 
the so-called death tax. We will increase the exemption from $600,000 
to $1 million. It takes 10 years. So I encourage people not to pass 
away if they are in that range. They need to wait a few years. But we 
also increased the exemption for family businesses, farms and ranches. 
And I will tell my colleagues, it is extremely popular, very much 
needed. If you have a family farm, business or ranch and you happen to 
pass away and you have a taxable estate of $1 million. You are in a 
taxable rate of 39 percent. And I don't think Government is entitled to 
take 39 percent of that property. And so again I think this is long 
overdue.
  We have other relief in this bill to encourage savings, to encourage 
investment. We reduced the capital gains tax 20 percent. Every time we 
reduced capital gains we have had more savings.
  And so again, I think this is a positive bill. It will encourage 
jobs; it will encourage savings. It will leave families to keep more of 
their own money in their pocketbooks.
  I compliment again the Speaker and I compliment the leader, Senator 
Roth, and Senator Moynihan, those who worked so tirelessly to make this 
happen. The good news is this will become law. We will do what we said 
we were going to do. We said we were going to give American families 
tax relief. We said we were going to pass incentives to create more 
jobs. We have done that in this bill. I urge my colleagues to vote for 
it. I am glad to see this will become law soon.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Domenici). Who yields time? The Senator 
from Arkansas.
  Mr. BUMPERS. Mr. President, I yield myself 3 minutes.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. BUMPERS. Mr. President, I have already spoken on the subject 
today. There are a couple of other things I would like to add.
  First of all, there is always a big constituency for tax cuts and I 
have never known a Member of Congress to lose a vote by voting for a 
tax cut. We lost a lot of good men and women in 1993 because they voted 
for a tax increase, which has reduced the deficit from $300 billion to 
an anticipated $40 billion this year. But they are not here. They 
honored what they thought was a demand by the American people for a 
balanced budget, clearly within our grasp. But, you see, there is a big 
constituency for tax cuts. There is always a big constituency for 
spending. There is no constituency for a balanced budget. There are 
those who have looked forward to that, as I have, for 22\1/2\ years. 
When I was deciding whether I wanted to run again, that was one of the 
major considerations with me.
  There are two things that I think would reinstill confidence in the 
American people in the congressional system and in our democratic 
system, in our very political system. The two things that would do more 
than anything to build confidence in America would be to balance the 
budget, and, No. 2, to change the way we finance campaigns. I concluded 
that neither were going to happen in the next 18 months and probably 
wouldn't happen during the next 6 years if I ran and were reelected. 
That wasn't the only consideration.
  But here we are. In 1998--every economist in the country now believes 
we will probably balance the budget in 1998. So what are we going to 
do? No. No. We screamed about balanced budgets around here for 22\1/2\ 
years that I have been around here. Now it is within our grasp and how 
do we treat it? Postpone it for 5 years. Don't do it in 1998, give away 
some goodies.
  And there are some goodies in here that I love. The educational part 
of it intrigues me. I love it. But here is something the American 
people have been clamoring for all of these years. We could postpone 
this for at least a year and provide some comfort to the American 
people in letting them know that we are really concerned about deficit 
spending.
  Let me ask you this. What in the name of goodness are we always 
talking about Greenspan raising interest rates for, depending on the 
inflation rate? Everybody is scared to death the inflation rate is 
going to go up a couple of tenths of a point, Greenspan will raise 
interest rates, and this glowing economy, almost unprecedented in the 
annals of the history of this country, will come to a screeching halt. 
There will be no balanced budget once this economy goes into decline.
  I yield myself 2 additional minutes, Mr. President.
  So, what are we doing? This is not a tax cut of the magnitude of 
1981. Certainly in the scheme of things it doesn't even begin to match 
the tax cuts of Jack Kennedy in 1961-1963. But I tell you what it is, 
it is $135 billion infused into the American economy which could, which 
just could fuel the economy to the extent of a couple of tenths of a 
point in inflation. And if that happens, you can bet that the Fed will 
raise interest rates. And if that happens you can bet that this economy 
is going to start slowing and you will not see a balanced budget.
  The idea, I don't mind saying, Mr. President, I don't know how to say 
it any stronger--the idea of doing what we are doing today and 
postponing something that is so near at hand, a balanced budget--
postponing it for 5 years is the height of irresponsibility.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I just wanted to take a minute here at 
the finish of this debate, to compliment a number of people whose 
commitments have been so vital to the success of this bill. From the 
very beginning of the 104th Congress until today, the Presiding Officer 
himself has been in the lead as the chairman of our Budget Committee. 
Without his leadership, we never would have reached this point. Without 
the leadership of the chairman of the Finance Committee we would not 
have reached this point. Without the able work of the ranking member of 
the Finance Committee we would not have reached this point. Certainly, 
without the assistance and the leadership of our majority leader, we 
would not have reached this point.
  Today we do something that has not occurred in 16 years, we give the 
taxpayers of our country a chance to keep more of what they earn. In my 
State of Michigan this means a great deal. We are not a rich State, in 
the sense that everybody makes a lot of money. We are a rich State in 
terms of values and natural resources, but the hard-working people in 
Michigan have waited an awful long time for the tax cut which we will 
be delivering. Whether it is the working family who will receive a $500 
per child tax credit or the family trying to finance the education of 
children--who do not want to go bankrupt, but want their kids to go to 
college--or the small family farmers and small business people who have 
feared the prospect of having to sell the family business or farm in 
order to pay death taxes, or the people in our inner cities who are 
going to benefit from the brownfields provisions that will allow us to 
clean up environmentally contaminated brownfields and create job 
opportunities in deserted factory sites, or the people who are hopeful 
that we can have more dollars for road repair and, because of having 
shifted the 4.3 cent gas tax to the highway trust fund in this bill we 
will now have the opportunity to restore more dollars for roads and 
transportation--all of those people in Michigan will benefit when this 
action is taken today and the President signs this tax cut into law.
  The fact is, today taxes as a percentage of our national income are 
as high as they have ever been, higher than during the Depression, 
higher than World War II, higher than during the Vietnam war and other 
crises. The time has come to restore some balance to the equation, to 
give the American hard-working families the break they deserve.
  So I compliment everybody who has played this role. I think we are 
moving in the right direction. Many of us would like to do more, and I 
hope we will have the chance next year, in a later Congress, to do 
more. But for what we are achieving today, I think great credit is owed 
to the leadership we have had. So I rise to compliment that leadership 
and say, as a new Member of this body, I am delighted to be

[[Page S8479]]

part of a day today in which we celebrate both the passage of a bill 
that will bring us to a balanced budget for the first time in a quarter 
of a century and the passage of a bill that will mean tax relief for 
hard-working people in Michigan.
  Mr. President, I yield the floor and thank the chairman of the 
Finance Committee for this time.
  Mr. ROTH. Mr. President, I yield the remainder of my time to the 
majority leader.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. LOTT. Mr. President, if I need some additional time, I yield 
myself time off my leader time, although I hope--I will stay as close 
to the appointed hour for a vote as possible.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. LOTT. Mr. President, I thank the chairman of the Finance 
Committee, Senator Roth, for yielding me this time and thank him for 
his great work. I talked about that this morning in relation to the 
balanced Budget Act, but I think it is even more appropriate that I 
commend him for his diligence, patience, persistence, leadership, his 
bipartisan effort. He did a great job on this legislation. I am 
extremely proud of him and I think he should feel proud. Also Senator 
Moynihan, for his cooperation and for the way he approaches his 
legislative responsibilities, we thank him. Without his being willing 
to support this we would not have had the 80 votes that we had when the 
bill passed the Senate a month ago. To the Senator in the Chair, the 
Senator from New Mexico, his imprint is over both these bills; all over 
them. I thank him for that.
  This morning I was satisfied with our action on the balanced budget. 
I was pleased we got it done. I thought it was an important thing to do 
and that we should get it done and move forward and reach a balanced 
budget with honest numbers.
  But, with this bill I am enthusiastic, I am really excited about what 
this legislation does. It is going to help our children with the tax 
credits and education provisions. I feel good about the education 
provisions. Some people say, ``Well I don't like that part or the other 
part.'' Education is about the future of America, and we put some of 
the President's provisions in there but we put some others in there 
that will help our children have a better access to community colleges 
and universities and colleges. It is worthwhile and I am proud of that.
  A lot of young people, young business men and women are going to 
benefit from this. My own son, a young entrepreneur, will benefit from 
it. And even he was excited, the other night, when I told him what was 
in this bill. Nothing makes a father prouder than for his own son to 
say, ``Dad, this will help me to create some more businesses and hire 
some more people.'' He has 60 young people working for him now. This is 
what the American dream is all about: Investors, savers, farmers, small 
business men and women, spouses, and seniors. This is one that really 
does what we said it was going to do, and we got it done. I am very 
proud of it.
  This is the first significant tax cut for working Americans in 16 
years. It is long overdue. Taxes are too high in my opinion. The Tax 
Code is obviously too complex and complicated. The IRS is too intrusive 
in our lives and everybody knows it. Congressional Republicans and a 
lot of Democrats wanted to do more than just talk about tax relief, 
they wanted to get it done. We wanted to deliver and we wanted to 
provide this legislation. We picked up considerable bipartisan support 
and came together in a way that I have not seen the Senate come 
together in the years that I have been in the Senate, certainly as 
majority leader. It was a good feeling. We went out on the steps of the 
Capitol and said we had done this job for the American people. I 
thought it was constructive and thoughtful, and I was very proud of it.
  The President also supports this bill. I am glad that he has 
supported this tax package and the tax relief that we are giving to the 
American people. He insisted that some parts of it be dropped. I was 
very disappointed in that. But we insisted on some things that he 
didn't want to go along with. As I said repeatedly, we gave ground on 
both sides, but we found common ground in many instances.
  I was particularly concerned, though, about one provision that we had 
to drop, the so-called Coverdell amendment that would have allowed for 
an education IRA to be used to pay for education from K through high 
school, for elementary and secondary. Yes, I like the fact that we are 
helping community college opportunities for our children, and 
universities and colleges. But the truth of the matter is, the problem 
in education in America is not at the higher education level. Our 
higher education system in America is a good one. It is broad, it is 
diverse, there is lots of choice. The problem is at the elementary and 
secondary level.
  Why shouldn't a parent, who can now put $500 in the Roth education 
IRA opportunity, be able to take some of that money to help their 
children in the fourth grade with some tutoring, so they can learn to 
read better, or to get help with remedial arithmetic? Why shouldn't a 
parent be able to do that? I think they should, and I am very sorry 
that we had to drop this from the package. But the President insisted 
that this not be allowed because, he said, it would undermine public 
education. I don't want to do that. I am a product of public education. 
My mother is a public education schoolteacher. So there were some 
disappointments along the way. But there is a lot of good in this bill.
  Everybody can declare a victory in being for this, because the 
American people, the American family will benefit from this 
legislation. Three years ago, congressional Republicans promised the 
American people a $500-per-child tax credit to help them save for the 
future or to meet the costs of raising a family in today's world. We 
kept that promise. And along the way, the Democrats got involved. They 
put their imprint on it. But the main thing is they are going to get 
this help. Parents with children will get some help to do things for 
their own children. I think we should be proud of that.
  At the start of this Congress I urged that the Republican conference 
introduce, as our first bill, a bill to help families with the needs 
for education and for college costs. S. 1, the first bill that was 
introduced this year, our highest priority, was in education. The 
legislation before us today incorporates many of those tax provisions.
  If American families are looking for someone to thank, they need to 
look to further than the sponsors and the leaders of this legislation, 
Senator Roth and Senator Moynihan. They really did a great job. They 
brought us together and they produced the final package that we are 
voting on here today.
  Amazing as it seems, we have been willing to resist some of the 
criticisms that we should not give tax relief for working Americans. We 
have done it here. We have kept our promises. I think it is going to be 
good for the economy. Allow the people, allow our people in this 
country to make some decisions of how they will help their own 
children, when it comes to the tax credit, and for education. Let them 
decide how they will use their money to pay for education.
  We are making individual retirement accounts available to almost 
everybody, especially homemakers. We have that up, now, so they can put 
in $2,000 like everybody else. Why shouldn't they be able to? But they 
had not been able to in the past. Now homemakers have this opportunity, 
just like everybody else, to have this IRA.
  We are reducing the unfair tax on capital gains, including 
homeowners. That alone is going to help fire up the economy even more, 
foster job creation and expand opportunity for every willing worker.
  So, this is an important package. But I want the taxpayers of America 
to understand this. It is only a downpayment. It is not Utopia. It's 
not everything we would like to do. It doesn't make the Tax Code a lot 
less complicated. In fact, it maybe goes the other way. But it's a step 
in the right direction. It provides help where it is needed and there 
will be another day for us to have a fairer Tax Code. So, it is the 
kind of legislation that we need. We have come together to pass it. It 
will provide extensive tax relief. Tax reform will be something we will 
do another day.
  But we have done a good job here, and I urge my colleagues to rally 
round the banner of lower taxes and economic growth and join me in 
sending 

[[Page S8480]]

America's tax cut to the President for his signature.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. Bennett). Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. LOTT. I yield the floor.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report accompanying H.R. 2014, the Revenue Reconciliation Act of 1997. 
The yeas and nays have been ordered. The clerk will call the roll.
  The legislative clerk called the roll.
  The result was announced--yeas 92, nays 8, as follows:

                      [Rollcall Vote No. 211 Leg.]

                                YEAS--92

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

                                NAYS--8

     Bumpers
     Byrd
     Feingold
     Glenn
     Hollings
     Robb
     Sarbanes
     Wellstone
  The conference report was agreed to.
  Mr. MOYNIHAN. I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  [Applause.]

                          ____________________