[Congressional Record Volume 144, Number 38 (Monday, March 30, 1998)]
[Senate]
[Pages S2764-S2767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         STATEMENTS ON INTRODUCED BILLS AND JOINTS RESOLUTIONS

      By Mr. BURNS:
  S. 1879. A bill to provide for the permanent extension of income 
averaging for farmers; to the Committee on Finance.


                          FARMERS' LEGISLATION

  Mr. BURNS. Mr. President, I introduced an amendment to the Revenue 
Reconciliation Act of 1997 back in 1997. It extended to our agriculture 
producers--farmers and ranchers--the ability to average their income 
over a 3-year period. The amendment was included and made part of the 
U.S. Tax Code, but only after further negotiations, sunset the 
provision after 3 year which would make it run out in 2001.
  Today, I would like to introduce a bill that would make income 
averaging for our agriculture producers permanent in the U.S. Tax Code. 
This bill will give our agriculture producers--farmers and ranchers--a 
fair tool to offset the unpredictable nature of their business.
  Our man in the chair this morning from the great agricultural State 
of Nebraska, and the rest of us in the breadbasket of this country 
understand what farmers and ranchers go through. It has always been a 
good business and at times it is a great business. But we are going 
through some times now that are very stressful. As a friend of mine 
said the other day, there is nothing wrong down on the farm except the 
price. That is what we have now.
  There are not very many segments of the American economy that are 
taking in the same amount of money for their commodity today as they 
were taking when World War II ended, some 50 years ago. However, they 
are expected to keep producing food not only in generous proportions 
but also the safest, the best quality and nutritious food in the world.
  What makes this Nation unique is, we not only produce it, but we have 
the infrastructure that allows distribution--our processors, purveyors, 
transportation, grocery stores, everything from the breakfast table of 
America all the way back to the first seed that goes into the ground is 
unmatched anywhere in the world. It is something of a great marvel in 
this country. And it is also true that every one of us alive today in 
this country goes about our daily business of feeding the Nation. 
Somewhere along the line, we are participants in this great 
infrastructure to deal with our own subsistence.
  But basically, I want to talk about--the production level, I don't 
think there is a commodity today that is not hurting when it comes to 
the marketplace and to the whims of Mother Nature's elements that she 
rains down on agriculture. Agriculture production is a 7-day-a-week job 
as anybody that has ever worked on a dairy farm knows. I assumed that 
most Americans knew that, but I am finding out that I was wrong. They 
think milk cows take off the weekend, too, but they don't. Farming is 
an ongoing situation--7 days a week, 52 weeks a year. Farmers and 
ranchers take pride in their work. They produce as economically as they 
possibly can, knowing that they fall under the old philosophy that they 
although they sell wholesale, they have to buy retail, and they pay the 
freight both ways, knowing that agriculture has always been in that 
kind of a predicament.
  Not only do they take great pride in what they produce, but probably 
no other segment of the American public has a greater understanding of 
land stewardship and the environmental problems that face our country 
today. Yet, very few of them are ever asked their advice on how to deal 
with an environmental problem. Several colleagues that serve in this 
body, who grew up on a farm or a ranch, certainly understand the 
frustration of the business. They only get paid about two, maybe three 
times a year. So it is a crucial time for the farm families across this 
country when we take a look at the situation we find ourselves in now. 
With the financial collapse of many Asian markets in the Pacific rim, 
we see wheat at an all-time low. Our corn and soybeans will suffer. As 
far as export trade is concerned, we export a lot more than we receive. 
We also see a time when we fall whim to the psychology of the market 
more than the market itself.
  With the recent passage of the freedom to farm bill, we told farmers 
that subsidies were going to go away, that they were going to have to 
stand on their own. We also said that we would give them the tools with 
which to operate their farms.
  Market forces are unique. We still fall victim to flood and drought, 
disease, new infestations which are far,

[[Page S2765]]

far beyond the control of the producer himself. Farmers make money one 
year, but may break even the next year, and then lose money the next 
two years. If you take market elements and Mother Nature into 
consideration, farmers fall outside of the business of control. So, at 
best, they are lucky to break even 2 years in a row, and if they have 
done that, they think they are really ahead.
  The business is capital intensive, and labor intensive. To give you 
an idea just why this is an important thing, many young people right 
now due to death taxes--in other words, estate taxes--agriculture 
producers usually find themselves in the situation where they are land 
rich but they are cash poor. Passing the farm and ranch on to the next 
generation is hard when the tax situation is where they cannot do it. 
They may have exceeded the limit and heavy estate taxes prevent that. 
With increases in the top marginal tax and with a record of high 
commodity taxes, it is time to allow some of that income that goes back 
to the farm to be retained and to allow them to average their income 
over 3 years at those marginal tax rates.
  We made a deal with agriculture when we passed the Freedom to Farm 
Act. We made a deal with them that there would be no more subsidies, 
but we would give them income averaging and all the tools that it would 
take to hang on to their money so that they could invest in next year's 
crop. If you want to really measure a man's faith, have him take his 
money, his time, his efforts, and his investment and have him put a 
seed in the ground in hopes that it will just sprout, let alone 
harvesting a crop.
  That is faith, we have always had it in agriculture, and it has 
always been the backbone of every State economy and it still is. When 
things are good in agriculture, they are usually good for the rest of 
the country. But I would say this economy right now, the one we are 
experiencing that everybody raves about is still riding the backs of 
those who are in the business of producing a raw commodity.
  So, Mr. President, I offer this bill to put in a permanent place for 
income averaging for agriculture producers.
  Mr. President, there will be letters coming out to my colleagues 
explaining what we have done here. I think it is very important. It is 
important to my State. It is important to all of us. It is important to 
the smaller communities of America, because if agriculture is not 
healthy, those communities suffer also. That is why we work very hard 
on communications infrastructure, and that is why we work awfully hard 
on power infrastructure. Smaller communities that rely so heavily on 
agricultural income must find ways to attract other economic 
opportunities and those two other parts are very important to their 
infrastructure in the future.
  I appreciate the time from my friend from Wyoming. I yield the floor.
  Mr. THOMAS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. THOMAS. Mr. President, thank you very much. I thank the Senator 
from Montana for his comments with respect to income averaging and 
agricultural activity. I certainly support that. I think, as evidenced 
by its passage last year, it is generally supported.
  Mr. BURNS. Mr. President, I ask unanimous consent that additional 
material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                    Congress of the United States,


                                  Joint Committee on Taxation,

                                   Washington, DC, March 19, 1998.
     Hon. Conrad Burns,
     U.S. Senate, Washington, DC.
       Dear Senator Burns: This is in response to your letter of 
     March 16, 1998, requesting a revenue estimate for a permanent 
     extension of income averaging for farmers.
       Under present law, an individual taxpayer generally is 
     allowed to elect to compute current year tax liability by 
     averaging, over the prior three-year period, all or a portion 
     of the individual's taxable income from the trade or business 
     of farming. The election applies to taxable years beginning 
     after December 31, 1997, and before January 1, 2001.
       Under your proposal, the election to average farm income 
     over a three-year period would be extended permanently. The 
     proposal would become effective on the date of enactment.
       For the purpose of preparing a revenue estimate for your 
     proposal, we have assumed that enactment will occur during 
     calendar year 1998. Estimated changes in Federal fiscal year 
     budget receipts are as follows:

                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Fiscal years--                                     
                             Item                             ------------------------------------------------------------------------------------------
                                                                   1998         1999         2000         2001         2002      1998-2002    1998-2007 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Permanent extension of income averaging for farmers..........  ...........  ...........  ...........           -2          -21          -23         -138
--------------------------------------------------------------------------------------------------------------------------------------------------------

       I hope this information is helpful to you. If we can be of 
     further assistance, please let me know.
           Sincerely,
                                                   Lindy L. Paull.
                                 ______
                                 
      By Mr. CLELAND:
  S. 1880. A bill to provide States with the authority to permit 
certain employers of domestic workers to make annual wage reports; to 
the Committee on Finance.


                      domestic workers legislation

  Mr. CLELAND. Mr. President, I rise today to introduce important 
legislation which will remove a significant tax filing burden currently 
imposed on employers of domestic workers.
  In 1994, Congress adopted legislation reforming the imposition of 
Social Security and Medicare taxes on domestic employees. These new 
rules introduced more rationality into the tax system, and relieved 
reporting requirements of domestic employers.
  Unfortunately, the legislation did not go as far as needed. By not 
fully reforming the federal unemployment tax (FUTA), Congress left in 
place a significant burden on domestic employers which previously 
existed. Today I urge you to consider my legislation which would amend 
FUTA as well by removing the burden of filing quarterly state 
employment tax returns for employers of domestic workers.
  The Social Security Domestic Employment Reform Act of 1994, Public 
Law 103-387, changed the Social Security and Medicare tax rules. The 
new law provides that domestic employers (employing maids, gardeners, 
babysitters, and the like) no longer owe these taxes for any domestic 
employee who earned less than $1,000 per year from the employer.
  In addition, the Act aimed to ease reporting requirements. Under the 
act, domestic employers need no longer file quarterly returns regarding 
Social Security and Medicare taxes nor the annual FUTA return. Rather, 
all federal reporting is now consolidated on an annual Schedule H filed 
at the same time as the employer's personal income tax return.
  Nevertheless, the goal of the 1994 act--to substantially reduce 
reporting requirements for domestic employers--has not been fully 
accomplished for employers who endeavor to comply with all aspects of 
the law. Under FUTA, employers must make quarterly reports and payments 
to state unemployment agencies, then pay an additional sum of federal 
tax (now once a year, as part of schedule H). In addition, The Social 
Security Act continues to require that employers report wages quarterly 
to the states regarding all employees. In other words, despite the 1994 
act, a domestic employer who abides by the law must still keep track of 
all domestic employees, and must still fill out forms and send tax 
payments on a quarterly basis to his or her state employment agency.
  Congress was not unaware of the relationship of FUTA to Social 
Security taxes at the time it passed the 1994 act. Besides eliminating 
the separate FUTA return for domestic employers, the act also added a 
provision which permits the Secretary of the Treasury to enter 
agreements with States to permit the federal government to collect 
unemployment taxes on behalf of the States, along with all other 
domestic employee taxes, once a year. That statute, if used, would 
eliminate the need for domestic employers to report to state 
unemployment agencies. However, to

[[Page S2766]]

date no state has entered such an agreement. Undoubtedly, that is 
because the Social Security Act continues to require quarterly reports 
anyway.
  The primary justification cited for the quarterly reporting 
requirement is that it makes information more accessible to state 
agencies that investigate unemployment claims. However the burden of 
this provision far outweighs its benefit. The number of household 
employer tax filings is relatively small. Representatives from the 
Georgia Department of Labor and their counterparts in other states are 
confident that the investigation of unemployment claims will not be 
hindered by annual rather than quarterly reporting requirements.
  I suppose one could argue that the change this legislation proposes 
is unnecessary, since few people even bother to comply with the FUTA 
requirements for domestic employees. I believe that avoiding a change 
for that reason is an insult to citizens who endeavor to comply with 
all tax laws. For example, one Pennsylvania resident paid a 12 year old 
girl $4 per hour during one quarter for her babysitting services. This 
resident was then required by law to record, then pay eight cents in 
tax on her behalf. Needless to say, this is ridiculous. The young 
babysitter would never claim unemployment compensation.
  In short, the federal requirement of quarterly state employment tax 
reports for purely domestic employers should be eliminated. To ease the 
reporting burden on domestic employers, my legislation proposes that 
states be allowed to provide for annual filing of household employment 
taxes. Under my bill, any state which so chooses could retain quarterly 
reporting, but I believe few states would opt for such an unnecessary 
burden on its taxpayers. I urge my colleagues to join me in the effort 
to finish the job of rationalizing the taxpayer obligations for 
domestic employment taxes by supporting this bill. I ask unanimous 
consent that the text of my bill be inserted in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 1880

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORIZATION FOR STATE TO PERMIT ANNUAL WAGE 
                   REPORTS.

       (a) In General.--Section 1137(a)(3) of the Social Security 
     Act (42 U.S.C. 1320b-7(a)(3)) is amended by inserting before 
     the semicolon the following: ``, and except that in the case 
     of wage reports with respect to domestic service employment, 
     a State may permit employers (as so defined) that make 
     returns with respect to such service on a calendar year basis 
     pursuant to section 3510 of the Internal Revenue Code of 1986 
     to make such reports on an annual basis.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to wage reports required to be submitted on and 
     after the date of enactment of this Act.
                                 ______
                                 
      By Mr. LIEBERMAN:
  S. 1881. A bill to amend title 49, United States Code, relating to 
the installation of emergency locator transmitters on aircraft; to the 
Committee on Commerce, Science, and Transportation.


                   THE AIRPLANE EMERGENCY LOCATOR ACT

  Mr. LIEBERMAN. Mr. President, I am pleased to rise today to introduce 
the Airplane Emergency Locator Act. This important legislation would 
require most small aircraft to have emergency locator transmitters. A 
similar bill was introduced in the House by Representative Christopher 
Shays.
  On Tuesday December 24, 1996 a Learjet with Pilot Johan Schwartz, 31, 
of Westport, Connecticut and Patrick Hayes, 30, of Clinton, Connecticut 
lost contact with the control tower at the Lebanon, New Hampshire 
airport. The crash occurred in poor weather and after an aborted 
landing. Despite efforts by the federal government, New Hampshire state 
and local authorities, and Connecticut authorities, extremely well 
organized ground searches failed to locate the two gentlemen or the 
airplane. The thick pines of the NH countryside have hampered the 
effort. This plane did not have an emergency locator transmitter, a 
device which could have made a difference in saving the lives of these 
two men.
  The legislation I am introducing today is straightforward--the only 
aircraft that would be exempt from having emergency locator 
transmitter's would be planes used by manufacturers in development 
exercises and agricultural planes used to spread chemicals over crops. 
It is my strong belief that these devices will play a vital role in 
search efforts, where timing is so critical in any rescue mission.
  I applaud my colleague Christopher Shays for introducing similar 
legislation in the House and I urge my colleagues to join us in support 
of the Airplane Emergency Locator Act. Mr. President, I ask unanimous 
consent that the text of this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1881

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Airplane Emergency Locator 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) on December 24, 1996, a plane piloted by Johan Schwartz 
     and Patrick Hayes disappeared near Lebanon, New Hampshire;
       (2) an extensive search was conducted by the States of New 
     Hampshire, Connecticut, Vermont, New York, Maine, and 
     Massachusetts, in cooperation with the Federal Government, in 
     an unsuccessful effort to locate the plane and any survivors;
       (3) the plane described in paragraph (1) was not required 
     under law to carry an emergency locator transmitter; and
       (4) emergency locator transmitters have been found to be 
     very helpful in locating downed aircraft and saving lives.

     SEC. 3. APPLICABILITY OF REQUIREMENT.

       Section 44712(b) of title 49, United States Code, is 
     amended to read as follows:
       ``(b) Nonapplication.--Subsection (a) does not apply to 
     aircraft when used in--
       ``(1) flight operations related to the design and testing, 
     manufacture, preparation, and delivery of aircraft; or
       ``(2) the aerial application of a substance for an 
     agricultural purpose.''.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Kennedy, Mr. Coats, and Mr. 
        Dodd):
  S. 1882. A bill to reauthorize the Higher Education Act of 1965, and 
for other purposes; to the Committee on Labor and Human Resources.


                The Higher Education Amendments of 1998

  Mr. JEFFORDS. Mr. President, I will be introducing a bill today in 
relation to the changes that we have worked on with members, of course, 
of both parties in our committee with respect to the higher educational 
programs.
  There is nothing more important to this Nation than maintaining our 
international superiority as the country with the best higher 
education. That is the reason this Nation is where it is today. And if 
we allow that to sink, as we have allowed our k-12 to sink, then, Mr. 
President, we will be sliding down, in the next century, to a position 
of lesser importance.
  I am introducing the bill today--with Senators Kennedy, Coats, and 
Dodd--the Higher Education Amendments of 1998. This legislation is a 
product of work begun by the Committee on Labor and Human Resources 
over a year ago.
  The Higher Education Act is among the most significant statutes under 
the jurisdiction of the committee. Since its inception in 1965, the act 
has been focused on enhancing the opportunities of students to pursue 
postsecondary education. The grant, loan, and work-study assistance 
made available by this act has made the difference for the countless 
millions in pursuing their dreams for a better life.
  At the start of the reauthorization process, we set out to achieve a 
number of important goals designed to strengthen these programs. I am 
pleased to say that this legislation achieves the five major objectives 
identified at the beginning of our efforts.
  First, the bill preserves the focus on students, who are the prime 
reason we have a Higher Education Act in the first place. Students now 
in school will be assured of receiving a lower interest rate on their 
loans and will see less of their own earnings penalized with respect to 
the Pell grant awards they receive. Students now in high school who 
aspire to a college education will continue to benefit from early 
intervention programs, including the National Early Intervention 
Scholarship Program--NEISP--and TRIO. Students who have graduated and 
are faced with exceptionally high loan burdens will be able to take 
advantage of extended repayment options under the Guaranteed Student 
Loan Program.

[[Page S2767]]

  Second, the bill takes a two-pronged approach to helping our Nation's 
elementary and secondary school teachers. They will be thoroughly 
prepared to offer the quality of instruction needed to assure that 
students achieve the standards we need and expect. Working at both the 
State level to promote system-wide reforms and at the local level to 
develop partnerships to enhance the quality of teacher training, the 
bill offers a comprehensive and systematic approach to this pressing 
national need. No longer will the Higher Education Act contain a 
collection of small, unfunded teacher training programs. Rather, the 
good ideas represented in these proposals--along with the many useful 
suggestions made by members of the committee--have been shaped into a 
broad approach. It is an approach which I hope will command the 
attention and support of Congress when we turn to the appropriations 
bill.
  Third, the bill reflects a strong commitment to the maintenance of 
two viable loan programs--the guaranteed or Federal Family Education 
Loan Program, known as FFELP, and the Direct Loan Program. To the 
extent possible within budgetary constraints, the bill levels the 
playing field to assure the continuation of fair and healthy 
competition between the two programs.
  Fourth, the bill takes important steps to improve the delivery of 
student assistance programs. In cooperation with the administration, we 
have developed a performance-based organization--a PBO--designed to 
strengthen the management of key systems with the Department of 
Education. A number of provisions in the legislation also pave the way 
toward taking advantage of efficiencies made possible through 
electronic processing and other technological advances.
  Finally, we have made every attempt to streamline programs, including 
the streamlining of the act itself. This bill takes nearly 50 programs 
off the books--off the books--and cuts in half the number of titles in 
the act. We have also attempted to relieve the regulatory burden on 
program participants while protecting the strong and effective 
integrity provisions included in the 1992 reauthorization.
  Perhaps one of the most difficult issues to resolve has been the 
change in the student loan interest rate scheduled to take effect on 
July 1 of this year. This has, of course, been a strong concern of the 
Budget Committee. This legislation adopts the proposal approved a few 
weeks ago by the House Committee on Education and the Workforce. For 
several months, Members of the House and the Senate have grappled with 
the issue. The dilemma has been to balance the desire to offer students 
the lowest possible interest rate while assuring an uninterrupted flow 
of loan capital so that borrowing will be possible.
  All analysts have concluded that allowing the scheduled rate to go 
into effect will mean the demise of the FFEL program. That outcome is 
unacceptable, given the substantial likelihood of program disruption.
  The Direct Loan Program, which now handles only 30 percent of total 
loan volume, simply is not in a position to pick up the slack. To do 
anything to interrupt the ability of our young people to participate in 
the FFEL program would be a disaster at this time. The solution offered 
by the House committee included in the bill is by no means perfect. 
Like Winston Churchill's comments about democracy, however, I say: This 
proposal is the worst possible option, except for all others.
  I am extremely appreciative of the hard work which my colleagues on 
the committee put into the development of this bipartisan bill. The 
committee will be considering this measure on Wednesday, and I hope 
that the full Senate will have the opportunity to debate it in the near 
future.
  Mr. President, I ask unanimous consent that a summary of the bill be 
printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

                          ____________________