[Congressional Record Volume 147, Number 85 (Tuesday, June 19, 2001)]
[Senate]
[Page S6452]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAYH:
  S. 1060. A bill to amend the Internal Revenue Code of 1986 to provide 
that certain postsecondary educational benefits provided by an employer 
to children of employees shall be excludable from gross income as part 
of an educational assistance program; to the Committee on Finance.
  Mr. BAYH. Mr. President, I am pleased to introduce legislation today 
that will help thousands of American workers with the financial burden 
associated with sending a daughter or son to college. In this climate 
of labor shortages, U.S. companies are looking for innovative ways to 
maintain and attract a dedicated and qualified workforce. Some 
companies have creatively turned to providing college scholarships for 
their employees' children. My legislation would allow employees to 
deduct these scholarships from their gross income. Under current law, 
an employee generally is not taxed on post-secondary education 
assistance provided by an employer for the benefit of the employee. My 
bill would extend this treatment to employer-provided education 
assistance for the employees' children, up to $2,000 per child.
  As many of my colleagues know, employer-provided education assistance 
is considered an integral tool in keeping America's workforce well 
trained and equipped to deal with the changing face of the New Economy. 
Current law not only allows companies to keep an up-to-date labor pool, 
but also allows many workers to move from low-wage, entry level 
positions up the economic ladder of success. Extending tax-free 
treatment to the children of employees not only will help working 
families, but will contribute to our Nation's competitiveness in an 
increasingly dynamic global economy.
  My legislation is very simple. It allows employees whose companies 
provide educational scholarships for employees' children to exclude up 
to $2000 from gross income per child. An employee may not exclude more 
than $5,250 from gross income for employer education assistance. This 
is the limit established under Section 127(a)(2) of the Internal 
Revenue Code for employer education assistance. In essence, there would 
be ``family cap.'' Workers could deduct a $2,000 scholarship for their 
child and could also exclude up to $3,250 of educational benefits for 
themselves, however, the combined amounts could not exceed $5,250.
  In today's economy, American companies are no longer looking purely 
for a high-school diploma, but require that their workers have some 
sort of post-secondary education or training. Many working families 
struggle in providing this basic start which will help their children 
get well-paying jobs.
  This piece of legislation is also a modest proposal. The Joint 
Committee on Taxation has scored this provision at $231 million over 10 
years. I look forward to working to make sure that this provision is 
fully offset in a responsible manner. I hope my colleagues will join me 
to help ease the burden of American families with the soaring costs of 
higher education.
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