[Congressional Record Volume 144, Number 31 (Thursday, March 19, 1998)]
[Senate]
[Pages S2285-S2290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page S2285]]
EDUCATION SAVINGS ACT FOR PUBLIC AND PRIVATE SCHOOLS
The PRESIDING OFFICER. Under the previous order, the hour of 4:45
having arrived, there will be 30 minutes of debate prior to the vote on
cloture on H.R. 2646. Debate time is equally divided and controlled for
the majority by Mr. Coverdell and by the Democratic leader.
The Senate resumed consideration of the bill.
Mr. KENNEDY. Mr. President, I yield myself 5 minutes of the
opposition time.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
Mr. KENNEDY. Mr. President, I urge the Senate to reject cloture on
this bill. Improving education can and must be a top priority for
Congress and the nation. But this Republican bill flunks the test. They
call it their ``A+'' bill, but it's anti-education. It deserves an
``F.''
It is the nation's public schools that need help. So what do our
Republican friends do? They propose legislation to aid private schools.
That makes no sense at all. Our goal is to strengthen public schools,
not abandon them.
Incredibly, the Republican strategy on the Budget Committee is more
of the same. The Republican plan does not provide for key investments
to improve public education. It does not provide help to reduce class
size. In fact, the Republican plan proposes a cut of $400 million--$400
million--in the budget category for education next year. If that anti-
education plan is passed, schools and students will get even less help
next year than they are getting this year, just when they need help the
most.
It is clear that our Republican friends are no friends of public
schools. They have an anti-education agenda. They want tax breaks for
the wealthy who send their children to private schools. They want to
cut the budget for public schools. The Republicans have put their cards
on the table--and it's a losing hand for education.
If they really wanted to improve the nation's schools, they wouldn't
propose a $30 billion tax break, while cutting funds for education.
Now, with this cloture vote, they are trying to gag Democrats to
prevent us from offering proposals that will genuinely help education.
They are trying to force the Senate to pass their private school bill
or no bill.
The use of tax breaks to subsidize parents who send their children to
private schools is a serious mistake.
This chart indicates who the winners and losers are. Ninety-three
percent of the children in this country go to public schools; 7 percent
go to the private schools. Yet when you look at the money, where the
money goes, 48 percent to the public schools, and 52 percent to the
private schools.
This bill does nothing to address the serious need of public schools
to build new facilities and repair their crumbling existing facilities.
It does nothing to reduce class size in school. It does nothing to
provide qualified teachers in more classrooms across the Nation. It
does nothing to help children reach high academic standards. It does
nothing to provide after-school activities to keep kids off the street
and away from drugs and out of trouble. It does nothing to improve the
quality of education for children in public schools.
Working families do not have enough assets in savings to participate
in this scheme. This regressive bill does not help families struggling
to pay day-to-day expenses during their children's school years. This
so-called education bill does nothing for education. It simply provides
a tax shelter for the rich.
Congress should be building new schools, not building new tax
shelters for the wealthy. Congress should be reducing class size, not
reducing aid to public schools.
We know what it takes to achieve genuine education reform. The place
to start is by resoundingly rejecting cloture on this defective bill
and then amending it in the ways that would genuinely help the Nation's
schools.
How much time does the Senator from Nebraska desire?
Mr. KERREY. Five minutes.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. KERREY. Mr. President, I also rise in opposition to cloture. If
you look out across America today and look at the growth in the economy
and the economic success and the various reasons why we have that
economic success, it is clear that one of the things we need to do is
invest in our infrastructure.
We just passed an ISTEA bill, $200 billion or so in investments in
roads, bridges, in our transportation system to make it more
productive. Our people are part of our infrastructure.
What we are saying on this side is that, if you want to provide a tax
break, we ought to also be doing something about our schools that are
crumbling, about our class sizes that have grown too large. There is a
lot more we can do than just this piece of legislation. That is all we
are asking for.
There is an opportunity to offer some constructive amendments that
would substantially improve this piece of legislation. Otherwise, as
many others have commented, the distributional analysis is lousy and it
does precious little to help those who are in the greatest need.
Mr. President, there is another reason that has not been mentioned on
the floor that I want to talk about a bit. Our American taxpayers have
a deadline called April 15 which is less than four weeks away. That is
their deadline, their schedule. Under law they have to have their taxes
paid. On the 4th of November last year the House, by a vote of 426-4,
passed a piece of legislation that would restructure the IRS and give
the Commissioner the authority to manage in a fashion that almost
everybody says ought to be done. In addition to that, the House
legislation gives taxpayers new power. If the IRS sends out a
collection notice, you know with certainty that they better be certain
that they are right; otherwise, they are going to have to pay your
legal fees and other fees associated up to $100,000 of punitive
damages.
In addition, Mr. President, in the legislation passed by the House by
426-4 last November--which, if we had taken it up and passed it here,
could be conferenced and down to the President for signature by the
April 15 deadline. That should be our deadline. By the way, the
American taxpayers don't have an Easter recess. They can't go home and
say, ``I'll see you after the April 15 deadline.'' There are also new
requirements in the IRS reform proposals that are on the table which
calls for the Commissioner of the Internal Revenue Service to be
present when we are passing new tax laws to speak out for the American
taxpayer and say, this is what it will cost the taxpayer to comply. You
have given a great speech about how this new tax break such and such
and such and such, but this is what it will cost the American taxpayer
to comply.
Now, just listen to this new tax idea. Since 1986 this Congress has
amended the tax law 60-odd times. When we continue to do it, talk about
how complex the Tax Code is and why simplicity is needed, some of our
greatest advocates of flat tax and simplicity are not wildly
enthusiastic about something that will add substantial complexity to
their tax returns.
Let me walk through this education legislation, which allows for tax-
free withdrawals from education accounts for room and board, uniforms,
transportation expenses, or supplementary items and services, but only
if these things are required or provided by the school. Now, this not
only requires families to have a pretty sophisticated understanding of
the law before they take their money out; it also appears that to be on
the right side of the law, parents would need to be able to justify
their expenditures with detailed records.
Who is going to be checking those records? Will the IRS be asking
taxpayers to submit bus fare receipts and clothing bills with tax
returns? Mr. President, if they don't provide that information when
they file, are we going to be asking for it in an audit situation?
Don't forget that this K-12 provision sunsets in 2002. What does that
mean? That means if we pass this legislation, we will have three
separate rules governing the education savings account. This year, an
account that can be used for higher education, but not K through 12;
next year, through 2002, we have different rules allowing tax-free
withdrawals from the account; and after that, K through 12 withdrawals
could be made, but only from the contributions and earnings from 1999
to 2002.
[[Page S2286]]
Now if you understand that, I am surprised, because I don't think
your constituents will know. Will taxpayers know how much they take out
is tax free? I doubt it. How will the IRS know? How will the IRS
attempt to explain these new rules to taxpayers, and who will
understand them?
Mr. President, that is why the law should say that the Commissioner
of the IRS is going to be at the table when we write a tax law, to give
us an estimate of what it will cost. The majority leader of the House
came before the IRS Commission, which I chaired, and said it costs
taxpayers upwards of $200 billion to comply with the existing code--
with the existing code, Mr. President. And here we are again--probably
on the way home to give speeches about the complexity of our code--
adding additional complexity.
Mr. President, we are going in the wrong direction. This bill takes
us in the wrong direction. We should schedule the IRS bill that passed
the House. If we are not able to come up with a piece of legislation in
the Senate, we need to bring the House bill to this floor, pass it, get
it to the President for his signature, so that on the 15th of April the
American taxpayers will have the power they deserve. Give the
Commissioner the authority he needs. And, finally, get that
Commissioner at the table when this Congress is taking up a new tax
bill so on a piece of legislation like this we will have his estimate
of what it will cost the American taxpayer to comply with some new idea
that we have that we say is going to benefit the American people.
I yield the floor.
Mr. COVERDELL. How much time remains on the opposition?
The PRESIDING OFFICER. The opposition has 4 minutes and your side has
13.
Mr. COVERDELL. I yield 5 minutes to the chairman of the Finance
Committee.
Mr. ROTH. Mr. President, first, let me say there is nothing more
important than for this Congress to enact legislation to make the IRS
taxpayer friendly. This has become a critical issue, primarily because
of the hearings held in the Finance Committee that have shown abuse of
taxpayers. That must be changed.
Now, as I have said many times, the House version of reform is a good
beginning. But I have to emphasize, that is all it is--it is a good
beginning. But it does not go far enough to make the kind of changes,
the kind of reforms the American taxpayer deserves.
The Finance Committee has been working hard to improve that
legislation. It is legislation that we will take up with the committee,
full committee, in the next 2 weeks. We expect to mark it up and report
it out. But I want to emphasize that I will not be satisfied, and I am
not going to push forward legislation that does not help the taxpayer
as they so fully deserve.
Now, Mr. President, as for the Coverdell bill, there is no question
where I stand. The fundamental responsibility parents have is to raise
children who are prepared for adulthood, children who will themselves
become nurturing parents, productive citizens, and vital leaders in the
future. Toward achieving this objective, there are few things as
important as education.
Mr. President, family is the foundation of our children's education.
And family is at the heart of the Coverdell bill. The objective here is
simple--to empower fathers and mothers to be proactive in directing the
educational endeavors of their children--to give them the resources
they need to make decisions consistent with their unique needs and
determined goals.
This bill allows us to join hands with parents everywhere--to let
them use their money to educate their children. This bill allows them
to increase their contributions from $500 per year to $2,000 per year.
This money will be available tax free for college expenses. It allows
for withdrawals to be used for elementary and secondary education
expenses. And it covers public and private schools.
The bill also makes state-sponsored prepaid tuition programs tax-
free, not tax-deferred, meaning that students will be able to withdraw
on a tax-free basis the savings that accumulate in their pre-paid
tuition accounts. Parents will have the incentive to put money away
today and their children will have the full benefit of that money tax
free tomorrow.
Already, forty-four states have pre-paid tuition plans in effect, and
the other six have legislation to create a state plan, or they have
implemented a feasibility study. Many cities and states are offering
families the power of choice when it comes to selecting what school
their children will attend. Others are embracing programs that make
private schools more accessible.
Those who disagree with these important measures are really
suggesting that the money earned by these parents does not belong to
them, that government is best at determining how their money is spent,
that there is no need to change business-as-usual in our effort to
improve the way we educate America's children. Clearly, this is not the
message we're hearing from home. Our states and communities--our
families--are embracing innovative educational programs. They realize
the old way isn't working. Many cities and states are offering families
the power of choice when it comes to selecting what school their
children will attend. Others are embracing programs that make private
schools more accessible. These measures are having a positive impact.
These measure are an important step forward, and the Senate can
demonstrate its leadership on education by adopting this legislation.
Let's be bold, Mr. President. Our policies must offer Dad and Mom the
resources they need to actively guide Junior's education. The Coverdell
bill does this. It is a very important step in the right direction, and
I urge my colleagues to support it.
It's time for innovation. It's time to empower parents. It's time to
prepare for the future. This is what the Coverdell bill is all about.
I yield the floor.
The PRESIDING OFFICER (Mr. Coats). Who yields time?
Mr. COVERDELL. How much time is remaining?
The PRESIDING OFFICER. The Senator from Georgia has 7 minutes 20
seconds.
Mr. COVERDELL. Mr. President, I believe we must be reading from
different scripts on this legislation. This is the sixth day of the
filibuster from the other side and, if successful, it will keep 14
million families from opening a savings account; it will keep $2.5
billion from supporting students in public schools over the next 4
years; it will keep $2.5 billion from supporting children in private
and home schools over the next 4 years; it will stop 1 million students
who would benefit from tax relief on State prepaid tuition, and 17
others to consider it; it will block 1 million workers, including
250,000 graduate students, from benefits from their employers for
advanced education or continuing education; it will block $3 billion in
new tax-exempt, private activity bonds, which will stop dead the
construction of 500 schools. That is what the filibuster will block.
I find it strikingly similar to the debate in opposition and the
suggestion from the National Education Association and Mary Teasley,
who says these tax-free savings accounts disproportionately benefit
wealthy families who already send their children to private and
religious schools. Bunk.
Seventy percent of the families that will use these accounts have
children in public schools. And my view is that Ms. Teasley is probably
doing reasonably well.
This is a letter from a very fine lady named Louise R. Watley,
chairperson of the City Wide Advisory Council on Public Housing in
Atlanta. She has been a resident of the Carver Homes Public Housing
Community since 1955. She says:
I have witnessed generations of young African Americans
grow up in one of our nation's poorest neighborhoods. In the
1980s, I fought the epidemic of crack cocaine among our youth
by working to kick drug dealers out of our community. In the
1990s, I find myself fighting the epidemic of hopelessness
that has resulted from the increasing failure of our public
schools to educate poor, urban children. As the Chairperson
of the City Wide Advisory Council on Public Housing, and on
behalf of the thousands of Atlanta public housing residents
the Council represents, I ask you to provide us with hope for
improving the K-12 education of our children.
. . . Please support the passage of the A+ Accounts for
Public and Private Schools Act as well as stronger Federal
charter school legislation and demonstration public and
private school choice projects. Please allow the poorest
children in Atlanta and Georgia to escape ineffective and
unsafe schools.
[[Page S2287]]
Mr. President, I have a feeling that this woman has a little more
personal experience than this lady defending the status quo who works
for the NEA.
I ask unanimous consent that the letter from Louise R. Watley be
printed in the Record, along with the letter from the National
Education Association, for whom the White House now does its bidding.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
City Wide Advisory Council on
Public Housing, Inc.,
Atlanta, Georgia, March 19, 1998.
From: Louise R. Watley.
To: Senators Paul Coverdell and Max Cleland.
Re: H.R. 2646, S. 1590, and Related School Improvement
Legislation.
Dear Senators: As a resident of the Carver Homes Public
Housing Community since 1955, I have witnessed generations of
young African Americans grow up in one of our Nation's
poorest neighborhoods. In the 1980s, I fought the epidemic of
crack cocaine among our youth by working to kick drug dealers
out of our community. In the 1990s, I find myself fighting
the epidemic of hopelessness that has resulted from the
increasing failure of our public schools to educate poor,
urban children. As the Chairperson of the City Wide Advisory
Council on Public Housing (``CWAC'') and on behalf of the
thousands of Atlanta public housing residents the Council
represents, I ask you to provide us with hope for improving
the K-12 education of our children.
During the just-completed session of the Georgia General
Assembly, at the urging of CWAC, an overwhelming majority of
the black caucus supported a bipartisan effort to strengthen
Georgia's weak charter school laws. Because of their new
appreciation for the terrible condition of public schools in
our low-income neighborhoods, these representatives put aside
political and racial differences and ``did the right thing.''
Because of their courage, we now can create a model public
charter school at Carver Homes.
By way of this letter, I urge both of you to continue this
important trend of granting parents greater choice in the
education of their children. Please avoid the temptation of
sacrificing the poorest children in America in order to
protect an education bureaucracy that seems to care more
about money and job security than it does about helping
children to read, to write and to recognize right from wrong.
Please support the passage of the A+ Accounts for Public
and Private Schools Act as well as stronger federal charter
school legislation and demonstration public and private
school choice projects. Please allow the poorest children in
Atlanta and Georgia to escape ineffective and unsafe schools.
Is it too much for us to ask for the same educational
opportunities that are available to those who have moved out
of our communities to where better public schools are located
or those who can afford to send their children to private
schools?
Sincerely,
Louise R. Watley,
CWAC Chairperson.
____
National Education Association,
Washington, DC, March 11, 1998.
U.S. Senate,
Washington, DC.
Dear Senator: On behalf of the 2.3 million member of the
National Education Association (NEA), we reiterate our
opposition to the ``education IRAs'' for private schools in
S. 1133 and urge you to vote against passage of this bill or
any similar provision. No modification or additional
amendments to this provision, such as school construction,
would change our position. Positive ideas, such as
modernizing public school buildings, should not be tied to
tax schemes to benefit private and religious schools.
Instead of supporting S. 1133, NEA urges you to vote for a
substitute to provide tax credits to subsidize $22 billion of
school modernization bonds over 10 years. These bonds would
enable states and local public school districts, which serve
more than 90 percent of all students, to provide safe, modern
schools that are well-equipped to prepare students for jobs
of the future. School modernization bonds would target one-
half of the funds to schools with the greatest number of low-
income children and allow states to decide where to
distribute the remaining half. This would ensure that rural,
urban, and suburban schools all benefit from these bonds.
The provision in S. 1133 to create tax-free savings
accounts to pay for private and religious schools would do
nothing to improve teaching or learning in our public
schools. It would also disproportionately benefit wealthy
families who already send their children to private and
religious schools. The public and parents say they want
federal investments to improve teacher training, promote safe
schools, and establish programs to help all students reach
high standards. Tax shelters, as proposed by S. 1133, would
do nothing to help achieve these goals.
Further, this tax-free savings account does not guarantee
parents a choice of schools. Private school admissions
officers would decide which students to accept. An editorial
about S. 1133 in the September 11, 1997 issue of the
Christian Science Monitor stated: ``Sounds innocent enough.
But where does it lead? It's a small step toward positioning
government behind private--most often church-related--
elementary and secondary education.''
NEA urges you to vote for the public school modernization
bond substitute and against cloture and final passage of S.
1133 if it contains the private school tax scheme.
Sincerely,
Mary Elizabeth Teasley,
Director of Government Relations.
Mr. KERREY addressed the Chair.
The PRESIDING OFFICER. The Senator from Nebraska is recognized.
Mr. KERREY. Mr. President, first of all, the distinguished Senator
from Georgia mentioned a filibuster. All we are asking for on this side
of the aisle is a chance to do more. We look out in America and see
crumbling schools and class sizes growing. We see a much bigger problem
than you all see. So we are just asking for an opportunity to be able
to offer amendments to this bill, and offer them in a normal,
expeditious fashion.
Mr. COVERDELL. Is the Senator aware of the offer the majority leader
made to the minority leader about 2 hours ago that we accept for debate
the 14 amendments that have been put forward on education--9 on your
side and 5 on our side?
Mr. KERREY. Mr. President, I will let the minority leader speak to
that himself. He has just come to the floor. In his absence, I was
making the point that you-all control the agenda on the floor. You
decide what comes up.
I heard the chairman of the Finance Committee say that nothing is a
higher priority than the restructuring of the IRS. We worked for 5 days
on the Ronald Reagan Airport. We debated human cloning for 4 days. You
have to decide what you want to schedule and what you think is the most
important priority.
In regard to the IRS, this education legislation will make our Tax
Code more complicated, no question about that. You can't deny that
that's the case. Our Tax Code is going to get more complicated, not
less complicated. Under current law, the Commissioner is not at the
table. The Commissioner doesn't get the opportunity to express a view,
whether that view is against what the President wants to do or against
what the Congress wants to do, or to just tell us what it is going to
cost the taxpayers to comply. The bill passed the House on November 4,
and since that time 16 million Americans have been sent collection
notices. In the bill passed on the floor in November, the Commissioner
has a seat at the table to talk to us about the cost of compliance,
talk to us on behalf of the taxpayer, what it is going to cost them to
try to take advantage of some new tax loophole, new tax provision that
we are writing into law.
That is all I was saying, Mr. President. I am also saying that, as
regards the IRS restructuring, forget all other deadlines. The American
taxpayers have a deadline on the 15th of April. Let's conform our
deadline to theirs. Again, the distinguished chairman of the Finance
Committee has been a leader in this. He held excellent hearings on this
and has been very straightforward in doing that. But the clock is
ticking. Collection notices are going out. The IRS continues to
operate. This bill was passed in the House by a vote of 426-4,
including the vote of Speaker Gingrich, Majority Leader Armey, and
every single Republican in the House of Representatives. It is a strong
bill. The chairman has excellent ideas. Bring it to the floor and offer
it as a managers' amendment so we can get it to conference and on to
the President for signature--not for us, but for the taxpayers who are
going to be subject to the power and abuse of the IRS as long as we
allow the current law to continue.
One additional thing. The Senator from Georgia held up a letter from,
I guess, the NEA, National Education Association, talking about the
distributional analysis. The cite I have been using is not from the
NEA; it's from the Joint Committee on Taxation. It was the Joint
Committee on Taxation that provided us with that analysis. We didn't
have this analysis when we marked up the bill in the Finance Committee.
Now we have the analysis. We have an analysis that shows what the
distributional impact is going to be.
I ask unanimous consent that this memorandum be printed in the
Record.
[[Page S2288]]
There being no objection, the material was ordered to be printed in
the Record, as follows:
Congress of the United States,
Washington, DC, March 2, 1998.
Memorandum:
To: Maury Passman and Nick Giordano.
From: Lindy L. Paull.
Subject: Revenue Requests.
The attached tables are in response to your request dated
January 28, 1998, for revenue estimates of H.R. 2646 as
passed by House of Representatives and as modified by Senator
Lott's second degree amendment as well as the corresponding
number of taxpayers estimated to benefit from H.R. 2646.
Additionally, you requested information regarding the
utilization of educational savings accounts for public versus
private education. We estimate that approximately 38.3
million returns would have dependents in schools at the
primary or secondary level in 1999. We estimate that, of
those eligible to contribute, approximately 2.9 million
returns would have children in private schools, and that
approximately 2.4 million of these returns would utilize
education IRAs.
We estimate that the proposed expansion of education IRAs
to include withdrawals to cover primary and secondary
education expenses would extend approximately 52 percent of
the tax benefit to taxpayers with children in private
schools. We estimate that the average per return tax benefit
for taxpayers with children attending private schools would
be approximately $37 in tax year 2002.
Conversely, we estimate that, of the 38.3 million returns
eligible, approximately 35.4 million returns would have
dependents in public schools, and that approximately 10.8
million of these returns would utilize education IRAs.
We estimate that the proposed expansion of education IRAs
would extend approximately 48 percent of the tax benefit to
taxpayers with children in public schools, with an average
per return tax benefit of approximately $7 in tax year 2002.
Mr. McCONNELL. Mr.President, I come to the floor today to support
legislation that addresses an important issue facing American families
today--the education of their children. An area of particular interest
to me has always been making a college education more affordable. For
the past several years, I have introduced legislation to provide tax
incentives to families who save for college.
I have not been alone in my efforts to give parents more flexibility
to choose the school which is best for their child and make those
decisions more affordable. Under the leadership of the 105th Congress,
there has been a strong focus on education. My colleague from Georgia,
Senator Coverdell, has championed the cause by introducing legislation
which would increase the amount families can save for elementary and
secondary education in an education IRA. I also want to commend Senator
Roth, the Chairman of the Finance Committee, who has worked tirelessly
to help all Americans save more for their retirement. I want to thank
the Chairman for his support of these education savings initiatives,
especially his support of the state-sponsored savings and pre-paid
programs.
Mr. President, anyone with a child in college knows first-hand the
expense of higher education. The GAO has also confirmed the
astronomical increase in college costs. According to GAO, tuition at a
four-year university rose 234 percent between 1980-1994, while median
household income rose only 84 percent and the consumer price index rose
a mere 74 percent. A similar study conducted by the College Board found
that tuition and fees for a four-year public university rose 100.3
percent from 1987-1997, while median household income rose only 34.5
percent. Throughout the 1990's, education costs have continually
outstripped the gains in income. Tuition rates have now become the
greatest obstacle students face in attending college.
Due to the high cost of education, more and more families have come
to rely on financial aid to meet tuition costs. In fact, a majority of
all college students utilize some amount of financial assistance. In
1995, $50 billion in financial aid was available to students from
federal, state, and institutional sources. This was $3 billion higher
than the previous year. A majority of this increase was in the form of
loans, which now make up the largest portion of the total federal-aid
package at 57 percent. Grants, which a decade ago made up 49 percent of
assistance, have been reduced to 42 percent. This shift toward loans
further burdens students and families with additional interest costs.
This legislation is a serious effort to support long-term saving. It
is important that we not forget that compound interest cuts both ways.
By saving, participants can keep pace with tuition increases while
putting a little away at a time. By borrowing, students must bear added
interest costs that add thousands to the total cost of tuition. Savings
will have a positive impact, by reducing the need for students to
borrow tens of thousands of dollars in student loans. This will help
make need-based grants, which target low-income families, go much
further.
This legislation also recognizes the leadership that states have
provided in helping families save for college. In the mid-1980s, states
identified the difficulty families had in keeping pace with the rising
cost of education. States like Kentucky, Florida, Ohio, and Michigan
were the first to start programs in order to help families save for
college. Nationwide more than 30 states have established savings
programs, and over a dozen states are preparing to implement plans in
the near future. Today, there are nearly one million savers who have
contributed over $3 billion in education savings. The provision which I
authored, which allows tax-free education savings in state-sponsored
savings plans for education purposes, provides a $1.5 billion tax break
for middle-class savers nationwide. In Kentucky, over 2,700 families
have established accounts, which amount to about $6.4 million in
savings
Mr. President, many Kentuckians are drawn to this program because it
offers a low-cost, disciplined approach to savings. In fact, the
average monthly contribution in Kentucky is just $52. It is also
important to note that 58 percent of the participants earn under
$60,000 per year. By exempting all interest earnings from state taxes,
this proposal rewards parents who are serious about their children's
future and who are committed over the long-term to the education of
their children. Clearly, this benefits middle-class families.
In 1994, I introduced the first bill to make education savings exempt
from taxation. Since then I have won a couple of battles, but I still
haven't won the war. To win the war Congress needs to make education
savings tax free--from start to finish. The bill we are considering
today will do that. In 1996, Congress took the first step in providing
tax relief to families investing in these programs. In the Small
Business Job Protection Act of 1996, I was able to include a provision
that clarified the tax treatment of state-sponsored savings plans and
the participants' investment. This measure put an end to the tax
uncertainty that has hampered the effectiveness of these state-
sponsored programs and helped families who are trying to save for their
children's' education.
In 1997, the Job Protection Act expanded the definition of
``qualified education costs'' to include room and board, thus doubling
the amount families could save tax-free. In Kentucky, room and board at
a public institution make up half of all college costs.
Already, we can see the result of the tax reforms in the 105th
Congress. In 1996, Virginia started its plan and was overwhelmed by the
positive response. In its first year, the plan sold 16,111 contracts
raising $260 million. This success exceeded all goals for this program.
While we made important gains, we need to finish what we have already
started and fully exempt the investment income from taxation.
Last month, the Finance Committee approved legislation, sponsored by
Senator Coverdell and Senator Torricelli, which would allow parents to
place as much as $2,000 per year, per child, in an education savings
account for kindergarten through high school education. I am proud to
join several of my distinguished colleagues to support the A+ Education
Savings Accounts Act. I believe this measure will continue the
Republican effort to move the money and decision-making authority out
of Washington and back where it belongs, at home with parents and their
locally-elected school boards.
As revised by the Finance Committee, these after-tax, non-government
dollars would earn tax-free interest and could be used for expenses and
tuition associated with any school from kindergarten through high
schools. Under this plan, parents, grandparents, and scholarship
sponsors may contribute up to $2,000 a year per child. The buildup of
interest within the account is tax free if used for the student's
education.
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For students who attend private or religious schools, money can be
withdrawn from an A+ Account to pay for tuition. For those who attend
public school, this money can be used for after-school tutoring, any
transportation expenses, or to purchase a home computer. Moreover,
parents of special needs children could use this money for lifelong
education expenses, including tutoring, occupational therapy,
vocational training, and skill development for independent living. As
you can see, this program is targeted to provide for the educational
needs of all Americans.
The Joint Committee on Taxation has estimated that more than 10
million families with children in public schools will take advantage of
these accounts. Moreover, it has said that 70 percent of the tax
benefit will go to the families with annual incomes of $75,000 and
less.
Last year, the Coverdell-Torricelli initiative passed the House and
received 56 votes in this Senate. It is in our best interest as a
nation to maintain a quality and affordable education system for
everyone. We need to decide on how we will redirect families' resources
in order to enable them to use their education dollars most
effectively. We can help families make their money count in a
meaningful way for their children's education by ensuring that they
have choices. At a modest cost, we can help families help themselves by
rewarding savings. This will reduce the cost of education and will not
necessarily burden future generations with thousands of dollars in
loans.
I urge my colleagues to support this valuable legislation this year
to reward those who save in order to provide a college education for
their children.
Mr. DASCHLE. Mr. President, how much time remains?
The PRESIDING OFFICER. The minority has 37 seconds remaining. The
majority has 3 minutes 35 seconds.
Mr. DASCHLE. Mr. President, I know a lot of people are hoping to
catch airplanes. We would like to keep as close to the 5:15 vote as we
can. Again, I appreciate the majority leader's offer. Unfortunately,
the offer does not include the Democratic substitute; it doesn't
include the Dodd tax credit amendment for child care expenses; it
doesn't include the Boxer after-school programs amendment.
That makes my point. I think we can work out a way in which to deal
with these amendments, but given the time, there certainly isn't the
opportunity to do that right now. So things have not changed,
unfortunately, to date, even though I think a good-faith effort has
been made to try to accommodate some of this. We will have to continue
to talk about it, and we are prepared to do that.
I yield the floor.
Mr. LOTT. Mr. President, in keeping with trying to start the vote on
time at 5:15, I will also be brief. I want to emphasize that this is
the sixth day that we have had this legislation before us. We have had
opportunities to try to come to some agreement. I have offered to agree
that there would be a substitute offered by the minority. Then I
suggested that there be a substitute and a couple of amendments on both
sides. Then there was an indication that, well, if we could get other
amendments that are relevant to education, maybe that would be a good
idea. So I suggested that we go with the 14 education and tax-related
amendments that were actually filed, 9 of which were minority
amendments, and 5 would be offered by the majority. The indications are
that that is not acceptable. The leader indicated it didn't include the
substitute. We would be flexible in doing that.
What I am interested in doing is finding a way to get us to a
conclusion on the very important issue of education, and there is
support on both sides. We have had a cloture on the motion to proceed.
Now we are going to have two votes on cloture on the bill itself. There
is a question of how long we can continue this. We have other business
we need to do. So I urge my colleagues, if those of you that are with
us on a bipartisan basis really want the Coverdell savings account for
children in America, if you want prepaid tuition to be available with
the tax benefits, if you want employer education benefits to be
available to your college students, this is the opportunity.
So I understand that the minority leader wants his Members to stick
with him. But this is an important issue. We need to get to the
substance. Then, even when we get through the cloture vote, when we get
cloture, we could still work out an agreement for some other amendments
that would not be in order postcloture, unless we agreed to.
But, as I told Senator Daschle a couple of days ago, I am interested
in getting this bill done. I am willing to be flexible to agree to some
amendments on education. I do not want to run far afield. I don't think
we ought to be shifting amendments, or health amendments, or things
that are not related to education and taxes in this bill. There will be
other opportunities. This is not the last day. We have a budget
resolution coming up. We have a supplemental coming up.
So I will be glad to work with Senator Daschle, and will continue to
work with him on that.
I urge colleagues, if you support savings accounts and these other
issues, the time is now, vote for cloture.
I yield the floor.
Cloture Motion
The PRESIDING OFFICER. Under the previous order, pursuant to rule
XXII, the Chair lays before the Senate the pending cloture motion,
which the clerk will report.
The bill clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on H.R. 2646, the
A+ Education Act:
Trent Lott, Paul Coverdell, Jeff Sessions, Connie Mack,
Bill Roth, Judd Gregg, Christopher Bond, Tim Hutchinson,
Larry E. Craig, Robert F. Bennett, Mike DeWine, Jim Inhofe,
Bill Frist, Bob Smith, Wayne Allard, Pat Roberts.
Call of the Roll
The PRESIDING OFFICER. By unanimous consent, the quorum call is
waived.
Vote
The PRESIDING OFFICER. The question is, Is it the sense of the Senate
that debate on H.R. 2646, the Education Savings Act for Public and
Private Schools, shall be brought to a close?
The yeas and nays are required under the rule. The clerk will call
the roll.
The bill clerk called the roll.
Mr. FORD. I announce that the Senator from Illinois (Ms. Moseley-
Braun) is necessarily absent.
I further announce that, if present and voting, the Senator from
Illinois (Ms. Moseley-Braun) would vote ``no.''
The yeas and nays resulted--yeas 55, nays 44, as follows:
[Rollcall Vote No. 38 Leg.]
YEAS--55
Abraham
Allard
Ashcroft
Bennett
Bond
Brownback
Burns
Campbell
Chafee
Coats
Cochran
Collins
Coverdell
Craig
D'Amato
DeWine
Domenici
Enzi
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Jeffords
Kempthorne
Kyl
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Warner
NAYS--44
Akaka
Baucus
Biden
Bingaman
Boxer
Breaux
Bryan
Bumpers
Byrd
Cleland
Conrad
Daschle
Dodd
Dorgan
Durbin
Feingold
Feinstein
Ford
Glenn
Graham
Harkin
Hollings
Inouye
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Moynihan
Murray
Reed
Reid
Robb
Rockefeller
Sarbanes
Torricelli
Wellstone
Wyden
NOT VOTING--1
Moseley-Braun
The PRESIDING OFFICER. On this vote the yeas are 55, the nays are 44.
Three-fifths of the Senators duly chosen and sworn not having voted in
the affirmative, the motion is rejected.
The Senate will come to order. The majority leader.
Unanimous Consent Agreement
Mr. LOTT. Mr. President, after conversation with the Democratic
leader, I now ask unanimous consent that the next cloture vote be
postponed to occur Tuesday, March 24, at a time to be determined and
announced at a later date.
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The PRESIDING OFFICER. Without objection, it is so ordered.
____________________