[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[Senate]
[Pages S11623-S11626]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          EDUCATION SAVINGS ACT FOR PUBLIC AND PRIVATE SCHOOLS

  Mr. DODD. Mr. President, I know we have a vote at about 11 o'clock 
and my colleague from Georgia wants to be heard before that time. I 
will try and move this along.
  Mr. President, the vote around 11 o'clock is on a cloture motion 
dealing with a proposal that has been offered by my colleague from 
Georgia, whom I respect greatly and agree with on many issues. On this 
one we disagree, not because of his intent at all, but rather because I 
am concerned it is not the best use of scarce resources. Even though 
our budget situation is vastly improved from what it was even a few 
months ago--with the deficit now down around to unimaginably low 
levels--still we must make careful decisions about how to best invest 
those dollars.
  When you are trying to help out working parents with the costs of 
raising children, the question becomes one of priorities in allocating 
resources. As I understand it, if the cloture motion that will be 
offered shortly were to be agreed to, an amendment that I would like to 
offer would be foreclosed because it would probably not pass the 
procedural test of being germane. I am concerned about that, and for 
that reason will oppose the cloture motion.
  The amendment I would offer, Mr. President, would propose a 
substitute to what our colleague from Georgia has offered. My proposal 
would allow for a refundable tax credit for child care. As it is right 
now, we have some 2 million American families--working families; not on 
welfare, but working--who don't have any tax liability at all and, 
therefore, cannot claim the current child care tax credit.
  The affordability and quality of child care, Mr. President, is an 
area in which most Americans are developing a growing sense of concern. 
The recent tragedy in Massachusetts that we have all been witness to 
over the last several days, highlights the concerns that millions and 
millions of American families have today about who will care for their 
children and whether they can afford to place them in a quality 
environment.
  In contrast, when we are talking about education, choices do exist 
for parents. There are 53 million American children who are in our 
elementary and secondary schools at this very hour. About 90 percent of 
them are in public

[[Page S11624]]

schools, about 10 percent in private and parochial schools. There is a 
choice, Mr. President. Parents have a choice. Now, it is expensive in 
some private and parochial schools, but the choice of free public 
schooling is there. It is not a great choice in many areas because of 
the condition of our public schools, but at least affordability is not 
an issue.
  When it comes to child care, Mr. President, there really are not many 
choices available to parents. If you are coming off welfare, if you are 
working, you have to place your children someplace. The issues of 
quality and accessibility are obviously important, but if you can't 
afford it at all, if you can't afford the $4,000 to the $9,000 a year 
that it costs to place your child in a child care setting, you have no 
choices.
  Today, when we have working families out there that are barely making 
it and we have about $2 billion in tax credits we can offer, I ask the 
question of my colleagues of whether we can't do something to help. 
While we might like to do everything for everyone if we could, given 
the choice of providing a tax credit to someone making $85,000 a year 
to send their child to a private school or saying to a working family 
that is barely making it, here are some resources that will allow you 
to place your child while you work in a decent child care setting, what 
choice do we make? Do we provide a tax break, with all due respect, to 
people who have a choice? Or do we offer a refundable tax credit of 
roughly the same cost as Senator Coverdell's amendment to working 
families, struggling to hold body and soul together--people who have no 
choices.

  Mr. President, the other day there was an article in the Hartford 
Courant about a woman who has three children, making $6.50 an hour. She 
has a small apartment and a 1981 automobile. Now she is about to leave 
welfare. She will lose her welfare benefits of $500 or $600 a month. 
That ends this week. Now, at $6.50 an hour, with three kids, trying to 
keep an apartment, trying to keep her family going, I would like to say 
to her I can't do everything for you with regard to your children as 
you go to work. But I would at least like to say that I can offer you a 
refundable tax credit--because at $6.50 an hour you are not paying 
taxes--and give you a break to see that your three children can be in a 
child care setting where they may be safe.
  The question is, do I try to help her? Or, with all due respect, do I 
instead help someone making--$50,000, $60,000, or $70,000 a year to go 
to a private school in Washington, Maryland or Virginia? Those are the 
kind of choices we have to make.
  I argue very strongly that when you have limited resources, let's put 
them to work for people who are struggling out there, who need the help 
the most. Because I can't offer an amendment that I think would make 
the right choice if cloture were adopted, with all due respect to the 
authors of the amendment, I will oppose cloture.
  I yield the floor.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that I be 
permitted to complete my remarks prior to the scheduled 11 a.m. vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, originally we were allocated some 15 
minutes for comments prior to the vote. Under this unanimous consent, I 
yield up to 7 minutes of my time to my distinguished colleague from New 
Jersey.
  Mr. TORRICELLI. I thank the Senator from Georgia for yielding.
  Mr. President, through the years there has been no more compelling 
voice on the floor of this Senate for the interests of children and 
families than Senator Dodd. Today is no exception. Senator Dodd has 
made a compelling case for the need for child care in America. I could 
not agree more strongly. I wish he had a chance on this day to have his 
amendment offered, and I would join in voting with him.
  The choice before the Senate today is not a choice between Senator 
Coverdell's proposal and Senator Dodd. Both have merit. I would support 
each. Senator Coverdell's proposal is fully paid for by offsetting the 
elimination of a corporate deduction. It has no negative impact on the 
budget. It is paid for, as Senator Dodd's amendment, indeed, can also 
be paid for.
  What the Senate has before it today is a chance to escape this 
continuing nonproductive dialog about whether or not we will engage in 
vouchers for private school or leave the plight to private school 
students unanswered. Senator Coverdell has offered an imaginative 
answer by expanding what is indeed a proposal that the Senate adopted 
earlier in the year for HOPE scholarships offered by President Clinton. 
By that same concept of allowing families to save their own money to 
make their own choices for the education of their families, Senator 
Coverdell's proposal would be expanded to high school and grade school.
  It is an economic sense and a compelling answer to a real national 
dilemma. First, that the education of a child and some of those 
decisions be retained by families, where families use their own 
resources--not just mothers and fathers but aunts, uncles, sister and 
brothers--who may not be able to put away $2,000 or $2,500 in a year 
with limited resources, but can on every birthday and every anniversary 
and every holiday put away $10, $20, and $100 so that during the course 
of a child's life those resources are available, families are involved, 
using their money.
  Second, it isn't just a question of whether this money would be 
available for private school students. The Joint Committee on Taxation 
estimates that 70 percent of the families who would avail themselves of 
these resources would be public school students because under the 
proposal that money is available to buy home computers or 
transportation for extracurricular activities, school uniforms or, most 
importantly in my mind, after-school tutors to help with the advancing 
math and science curriculum in our schools.

  Third, also a compelling aspect of this case is not only is it 
private money, not only would much of it go to public school students, 
but it will also stop potentially the hemorrhaging loss of private 
schools in this country. A parochial school in America closes every 
week. We are not opening up enough public schools to make up the 
difference. At a time when education is the Nation's principal 
challenge to our economic well-being, the number of classrooms and 
chairs for American students is declining. This is the use of private 
savings, private resources, to stop that hemorrhaging loss.
  Critics argue this is money that is going to help the wealthiest 
families in America when we should be doing more for working families. 
On the contrary. First, there is a cap in the legislation of $95,000 
for single filing taxpayers. Overwhelmingly, three-quarters of this 
money is going to families that earn less than $70,000 a year. This is 
the answer to giving working families a chance to get involved in the 
education of their children.
  Mr. President, I make no case for the procedures involved in this. 
There are worthwhile additions to this bill I would like to support. 
Senator Landrieu and Senator Graham have a worthwhile proposal for 
prepaid tuitions. I believe in Senator Dodd's proposal for day care and 
child care. I would like to see the Senate address both. Indeed, in 
time, I hope and I trust that we will.
  But on this day we address the question of whether or not families 
will be able to use their own resources to become involved in their own 
planning for their children's public or private education. This 
Congress has been presented with a series of challenges by the 
President. One was to address new resources to education. We do it. 
Second, to get families back involved. We do it. Third, he has stated a 
great national goal to get every school in America online into the new 
century. We go beyond it. Sixty percent of American families and 85 
percent of minority students have no access to a home computer. They 
are not going to school on an equal basis with all other American 
students. They don't have it for their homework, they don't have it for 
composition, they don't have it for research. The Internet and those 
computers are the principal tool for American students in the 21st 
century.
  Under the Coverdell-Torricelli proposal not only will America schools 
be online but so will American families at home because these students 
can use these A-plus accounts to buy that equipment for home.
  Mr. President, I join with Senator Coverdell on this day, asking that 
this be a genuinely bipartisan answer

[[Page S11625]]

for a genuinely bipartisan problem. Education is the American issue of 
these last years of the 21st century. It is the question of whether or 
not America maintains our standard of living and is economically 
competitive. Education is an issue without par in this Congress and in 
this country. This may not be a total answer. It is certainly not the 
last of the answer but it is an important addition for the labyrinth of 
issues and questions we must walk through in answering the education 
question.
  Mr. President, I thank the Senator from Georgia for yielding the 
time.
  Mr. COVERDELL. Mr. President, I want to compliment the Senator from 
New Jersey for his remarks, and more importantly, for his steadfast 
support of this proposal, and not always under the easiest of 
circumstances. He has been a great colleague and advocate and I have 
enjoyed working with him on this proposal.
  Where we find ourselves, moments away from this vote, Mr. President, 
is that the filibuster could not be broken last week and it was 
suggested that if we could just iron out a few amendments that both 
sides would come together.
  Over the weekend we suggested that we would agree to two or three 
amendments on both sides and try to proceed. That would require a 
unanimous consent, or for those listening, a unanimous agreement--
everybody will have to agree. The other side of the aisle cannot secure 
that.
  Given the hour of this session, this is no time to open it up to a 
free-for-all. So the filibuster will probably continue and my 
prediction is, fall a vote or two short of ending the filibuster and 
proceeding with what would be easy passage of the education savings 
account. It is unfortunate, because every time we delay these ideas 
another week, another month, we just slow down the great need to get at 
the problems in education in grades kindergarten through high 
school. Every time we delay, we create another student whose economic 
opportunity, whose challenges in this society will be inhibited because 
of a lack of resources that might have been made available to that 
child.

  However, the adoption of this concept is inevitable. The status quo, 
which has fought from day one and continues to do everything it can to 
block almost any new idea, will not prevail. The American people will 
override the status quo, and ideas like the education savings account 
are going to become law. My prediction is that, come February 1998, 
this proposal will be back before us and we will ultimately secure 
passage of it.
  Just a reminder. Mr. President, the education savings account will 
allow families to save up to $2,500 a year of their own aftertax money, 
and the interest buildup would not be taxed if the proceeds of the 
principal and interest are used to help an education purpose--
essentially, grades kindergarten through high school, which is where 
our problems are; although it could be used in college.
  Senator Dodd, in his remarks, inferred that these were resources that 
were going to allow somebody to enjoy private education. I think it's 
important that we take an overview of the entire proposal. The Joint 
Committee on Taxation says that the education savings account will be 
used by 14 million American families. That probably equates to 20 to 25 
million children that would be the beneficiaries of this concept. That 
is almost half the school population in the United States that would 
benefit from this new structure, this education savings account. And 
10.8 million of these families would be families with children in 
public schools. Seventy percent of all the value of these savings 
accounts will go to augment public schools. Thirty percent will augment 
those that are in a private school.
  It is statistically insignificant, but it is a fact that some 
families will use the account to change schools. But in the overall 
picture, you are essentially bringing new dollars that don't have to be 
taxed, new dollars that people are saving themselves and, as Senator 
Torricelli said, families becoming involved, families setting aside 
money to augment the child's education deficiency.
  Now, I call these dollars smart dollars. They are smart dollars 
because the family is directing their expenditure, and we know that it 
will, therefore, go to the exact child deficiency, which may be the 
fact that the child does not have a home computer; it may be that the 
child needs a math tutor; it may be that the child is experiencing 
dyslexia or some medical problem and the family will be able to augment 
and help support a learning disability. Well, the list goes on and on 
and on, as to the kind of particular or peculiar deficiencies that the 
child may suffer. This allows a resource to be gathered together to be 
put right on the problem. Unfortunately, you can't get that kind of 
utility for most public dollars.
  As Senator Torricelli said, 70 percent of all these resources will 
assist families making $75,000 or less. So it's going right to the 
hardest pressed, the middle class. It's right on target.
  Mr. President, there is another unique feature about the education 
savings account. The education savings account, which for most people 
would resemble an IRA, is different in that it would allow sponsors to 
contribute to the account. That could be an extended family member, an 
uncle, aunt, cousin, grandparent. More importantly, it could be a 
church, it could be an employer, it could be a community assistance 
organization, it could be a labor union. The imagination can't even 
perceive the kinds of community activities. How often have we seen a 
law enforcement officer fall in the line of duty and the community 
wants to come forward to help? This is the kind of tool that would be 
used. That community could set up an education savings account for the 
surviving children so that they would be more able to deal with their 
educational needs as they grow older without their father or mother.
  I can envision a company saying, well, we will put $50 a month in the 
account for the children that work for our employees if the employee 
will match it. By the end of the year, that would be half of the amount 
of money that is legally available; that would be $1,200. So it's an 
instrument that allows the entire community, the entire family to bring 
together resources to help with whatever problem that child may 
confront when they get to school.
  The other side has tried to describe it as a voucher. It's not. A 
voucher is public money given to the parents to decide what to do with. 
This is the parents' money. This is private money. We are allowing the 
parents an opportunity to get focused on that child's education, and 
just with the attention alone in creating 14 million family accounts 
like this, there will be an attitude change. You know, they can get 
focused on it and they think of their child and what that child needs, 
and they will have an exhilarated feeling of putting a resource in that 
account once a month, or every quarter, or on holidays, as Senator 
Torricelli said.
  They have said this goes to the wealthy. It does not. It goes to the 
middle class. They have even said, at one point, well, it doesn't 
amount to much. If it doesn't, I can't imagine why in the devil I am 
facing this filibuster and why the President said he would veto the 
entire tax relief plan if this proposal were in the tax relief bill.
  Mr. President, this is an idea whose time has come. The education 
savings account is going to become law. It is just a matter of time. I 
hoped we could do it in this session, but I think the filibuster is, 
once again, going to deny a good idea. America, as Senator Torricelli 
said, is focused on education. It will not accept the status quo. It is 
going to force new ideas. We cannot afford to have a failed elementary 
education system in place as we come to the new century.
  So, Mr. President, I thank my colleagues on the other side of the 
aisle that have stood up to the special interests and have said we are 
going to change the status quo. I appreciate all the assistance from 
the colleagues on my side of the aisle.
  I yield the floor.
  Mr. GRAMS Mr. President, today we will vote on whether to invoke 
cloture on a bill--H.R. 2646--that would allow parents to save money 
for their children's education without incurring tax liability.
  The proposed new education savings account, which expands existing 
law, would allow families to contribute up to $2,500 per year in a 
savings account for a variety of public or private education-related 
expenses. Congress had

[[Page S11626]]

earlier voted to support the Coverdell amendment 59 to 41, on June 27.
  Currently, the reconciliation law we passed this year as part of the 
budget agreement, allows parents to save up to $500 per year for their 
children's college education without penalty.
  The new education savings accounts are more expansive in that they 
allow the money to be used for children's kindergarten through 12th 
grade education expenses as well as college.
  Our adoption of this bill without further delay comes at a notable 
time, a time of increasing focus on the future of America's children. 
Just over a week ago, the White House held a summit intended to bring 
children's issues into the forefront as a national priority.
  What better way to turn consensus-building into action than to give 
parents the practical tool which the Coverdell bill supplies; a tool 
which allows parents to better provide options for their children's 
education.
  The education savings accounts help working families. They are a good 
complement to the $500 per child tax credit I have long championed, 
which was included in the tax bill this year. They encourage savings 
and allow families to make plans which shape a child's future.
  This provision is directed at low and middle income families, not 
wealthy families who currently have education options. All families 
should have a better opportunity to choose the best education for their 
children.
  According to the Joint Committee on Taxation, the great majority of 
families expected to take advantage of the education savings accounts 
have incomes of $75,000 or less.
  In other words, in families where both parents are working, 
individual parent income is at the very most an average of $37,500 in 
more than two-thirds of the families expected to take advantage of this 
legislation. Clearly, these are the families who need our help the 
most.
  Mr. President, this important legislation offers a real solution for 
America's working families. We must act now to help families best 
provide for one of life's most basic necessities--a child's education.
  Mr. KENNEDY. Mr. President, I oppose the Coverdell bill because it 
uses regressive tax policy to subsidize vouchers for private schools. 
It does not give any real financial help to low-income, working- and 
middle-class families, and it does not help children in the nation's 
classrooms. What it does is undermine public schools and provide yet 
another tax giveaway for the wealthy.
  Public education is one of the great successes of American democracy. 
It makes no sense for Congress to undermine it. This bill turns its 
back on the Nation's long-standing support of public schools and 
earmarks tax dollars for private schools. This bill is a fundamental 
step in the wrong direction for education and for the Nation's 
children.
  Senator Coverdell's proposal would spend $2.5 billion over the next 5 
years on subsidies to help wealthy people pay the private school 
expenses they already pay, and do nothing to help children in public 
schools get a better education.
  It is important to strengthen our national investment in education. 
We should invest more in improving public schools by fixing leaky roofs 
and crumbling buildings, by recruiting and preparing excellent 
teachers, and by taking many other steps.
  If we have $2.5 billion more to spend on elementary and secondary 
education, we should spend it to deal with these problems. We should 
not invest in bad education policy and bad tax policy. We should 
support teachers and rebuild schools--not build tax shelters for the 
wealthy.
  Proponents of the bill claim that it deserves our support because the 
Joint Committee on Taxation estimates that almost 75 percent of funds 
will go to public school students.
  But they're distorting the facts. According to the Department of 
Treasury, 70 percent of the benefit of the bill would go to those 
families in the highest income brackets. An October 28, 1997, Joint Tax 
Committee memorandum states that 83 percent of families with children 
in private schools would use this account, but only 28 percent of 
families with children in public schools would make use of it. It is a 
sham to pretend that the bill is not providing a subsidy for private 
schools. The overwhelming majority of the benefits go to high-income 
families who are already sending their children to private school, and 
does nothing to improve public education.
  In fact, the Joint Tax Committee memorandum clearly confirms this 
basic point that the bill disproportionately benefits families who send 
their children to private schools. As the committee memorandum states, 
``The dollar benefit to returns with children in public schools is 
assumed to be significantly lower than that attributable to returns 
with children in private schools.''
  Proponents of the bill claim that 70 percent of the benefits from the 
Coverdell accounts would go to families that earn under $70,000 a year.
  But again, they're distorting the facts. The facts are that the 
majority of the benefits under the proposal go to upper income 
families. Only about 10 percent of taxpayers have incomes between 
$70,000 and the capped income levels. Therefore, 30% of the benefits 
would go to just 10 percent of the taxpayers. In addition, the majority 
of the benefits for families who earn under $70,000 a year go to those 
earning between $55,000 and $70,000 a year.
  Other families will get almost no tax break from this legislation. 
Families earning less than $50,000 a year will get a tax cut of $2.50 a 
year from this legislation--$2.50. You can't even buy a good box of 
crayons for that amount. Families in the lowest income brackets--those 
making less than $17,000 a year--will get a tax cut of all of $1--$1. 
But, a family earning over $93,000 will get $97.
  Proponents also claim that these IRA's do not use public money. The 
money invested in the accounts, whether by individuals, their employer, 
or their labor union is their own money, not public funds.
  But the loss to the Treasury is clear. This proposal will cost the 
Treasury $2.5 billion in the first 5 years. It is nonsense to pretend 
that these funds are not a Federal subsidy to private schools.
  Scarce tax dollars should be targeted to public schools, which don't 
have the luxury of closing their doors to students who pose special 
challenges, such as children with disabilities, limited English-
proficient children, or homeless students. Private schools can decide 
whether to accept a child or not. The real choice under this bill goes 
to the schools, not the parents. We should not use public tax dollars 
to support schools that select some children and reject others.
  We all want children to get the best possible education. We should be 
doing more--much more--to support efforts to improve local public 
schools. We should oppose any plan that would undermine those efforts.
  This bill is simply private school vouchers under another name. It is 
wrong for Congress to subsidize private schools. We should improve our 
public schools--not abandon them.


                         PRIVILEGE OF THE FLOOR

  Mr. WELLSTONE. Mr. President, I ask unanimous consent that Kelly 
Miller be granted floor privileges during this vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________