[Congressional Record Volume 148, Number 123 (Wednesday, September 25, 2002)]
[House]
[Pages H6660-H6669]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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PROVIDING FOR CONSIDERATION OF H. RES. 540, EXPRESSING SENSE OF HOUSE
THAT CONGRESS SHOULD COMPLETE ACTION ON H.R. 3762, PENSION SECURITY ACT
OF 2002; H. RES. 544, EXPRESSING SENSE OF HOUSE ON PERMANENCY OF
PENSION REFORM PROVISIONS; AND H. RES. 543, EXPRESSING SENSE OF HOUSE
THAT CONGRESS SHOULD COMPLETE ACTION ON H.R. 4019, MAKING MARRIAGE TAX
RELIEF PERMANENT
Mr. SESSIONS. By direction of the Committee on Rules, I call up House
Resolution 547 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 547
Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the resolution (H.
Res. 540) expressing the sense of the House of
Representatives that Congress should complete action on H.R.
3762, the Pension Security Act of 2002. The resolution shall
be considered as read for amendment. The resolution shall be
debatable for one hour equally divided among and controlled
by the chairmen and ranking minority members of the
Committees on Education and the Workforce and Ways and Means.
The previous question shall be considered as ordered on the
resolution to final adoption without intervening motion.
Sec. 2. Upon the adoption of this resolution it shall be in
order to consider in the House the resolution (H. Res. 544)
expressing the sense of the House of Representatives on
permanency of pension reform provisions. The resolution shall
be considered as read for amendment. The resolution shall be
debatable for one hour equally divided and controlled by the
chairman and ranking minority member of the Committee on Ways
and Means. The previous question shall be considered as
ordered on the resolution to final adoption without
intervening motion.
Sec. 3. Upon the adoption of this resolution it shall be in
order to consider in the House the resolution (H. Res. 543)
expressing the sense of the House that Congress should
complete action on H.R. 4019, making marriage tax relief
permanent. The resolution shall be considered as read for
amendment. The resolution shall be debatable for one hour
equally divided and controlled by the chairman and ranking
minority member of the Committee on Ways and Means. The
previous question shall be considered as ordered on the
resolution to final adoption without intervening motion.
The SPEAKER pro tempore (Mr. Dan Miller of Florida). The gentleman
from Texas (Mr. Sessions) is recognized for 1 hour.
Mr. SESSIONS. Mr. Speaker, for purposes of debate only, I yield the
customary 30 minutes to the gentleman from Texas (Mr. Frost), pending
which I yield myself such time as I may consume. During consideration
of this resolution, all time yielded is for purposes of debate only.
Mr. Speaker, the resolution before us is a closed rule that allows
for consideration of three important resolutions. The rule provides for
1 hour of debate, equally divided among and controlled by the
respective chairmen and ranking members of the committees of
jurisdiction.
Mr. Speaker, the trio of resolutions before us today represents some
of the most pressing needs for average Americans across the Nation. In
politics, we often try to put a personal face to a problem that is
being debated or addressed. Mr. Speaker, the face of our story today is
just the average American, the average American who is a family member,
a friend, a neighbor. It is a person who has worked hard and tried to
invest wisely so that he or she can enjoy a retirement of independence.
The first of these resolutions, House Resolution 540, expresses the
sense of the House that Congress should complete action on and present
to the President before adjournment the Pension Security Act of 2002.
Although the House passed this measure more than 150 days ago by a
strong bipartisan vote, the Senate has not taken up comprehensive
pension protection that includes safeguards and options to help
American workers preserve and enhance their retirement security.
Over the last year, we have witnessed the unraveling and breakdown of
major corporations such as Enron. While Enron workers were likely
victims of criminal wrongdoing, there is no question that they were
most definitely the victims of outdated Federal pension laws.
The tragedy of Enron was two-fold. In addition to decimating the
savings of employees, it has also undermined the confidence of American
workers in this country's pension system.
The Pension Security Act includes new options and resources for
workers, as well as greater accountability from companies and senior-
level executives. Employees would be given new freedoms to sell and
diversify company stock. The bill also creates parity between senior
corporate executives and rank-and-file workers. This will help to
prevent a repeat occurrence of the egregious disparity that allowed
Enron executives to sell their investments and preserve their savings
while rank-and-file workers were barred from making changes.
The bill also includes provisions that would ensure that employees
receive accurate and timely information, along with sound advice and
resources to make informed investment decisions. Mr. Speaker, let me be
very clear about this: each day that we delay in enacting the Pension
Security Act is another day that we leave worker retirement savings
vulnerable to corporate meltdowns.
The second resolution we will consider is House Resolution 544, which
expresses the sense of the House that Congress should complete work on
the Retirement Savings Security Act of 2002. The tax relief package
that was enacted last year included provisions that increased
contribution limits for IRA and 401(k)-type plans to make it easier for
companies, and particularly small businesses, to offer a retirement
savings plan.
Currently, half of the Nation's workforce, roughly 70 million
Americans, do not have a 401(k) plan or any other kind of pension. At
the same time, much of the workforce is quickly approaching retirement.
The provision enacted last year addressing this growing concern by
allowing all workers to set aside more in their own retirement and IRA
plans was important. I am proud of what this House did. Special
considerations were also given to workers over 50 years old who were
allowed to so-called ``catch up'' or accelerate contributions so that
they can build up their retirement nest egg more quickly.
One group that will be particularly helped by this is women, women
who come to work many times after raising their children, many times
later in life.
This tax relief package also included provisions that modernize
pension laws. Workers are now able to enjoy the benefits that come from
having a portable defined contribution plan and are also allowed to
vest in their plans more quickly.
So one might ask: What is the problem? The problem, Mr. Speaker, is
that all of these very good benefits enjoyed by the American worker are
set to expire on December 31, 2010, because of an arcane Senate rule.
Consequently, Americans will have a difficult time planning for the
future.
In order to prevent a massive overnight tax increase, this past June
the
[[Page H6661]]
House passed a bill that would make these provisions permanent on a
strongly bipartisan vote of 308 to 70. The American worker is calling
for these reforms to be made permanent, and the President is ready and
willing to sign these significant retirement security provisions. We
just need to go through the legislative process that involves both
parties here in the Capitol. This measure, too, has also not been taken
up by the other body.
The last resolution addresses similarly important tax relief that is
put in jeopardy by the aforementioned Senate rule. House Resolution 543
is a measure expressing the sense of the House that Congress should
complete action on H.R. 4019, making marriage tax relief permanent.
Because of the Senate rule, the provisions that give relief to
married couples from an additional tax burden are set to expire at the
end of the year 2010. The Senate has not acted on making marriage tax
relief permanent. Without enacting a law making marriage tax relief
permanent at the start of the year 2011, the nearly 36 million couples
in the Nation would be subject once again to this fundamentally unfair
tax solely because they are married. If this provision is not made
permanent, married couples across America will once again be subject to
this unfair tax that is an affront to the most basic institution of
marriage.
The Committee on Ways and Means report also notes that ``failure to
make permanent marriage penalty tax relief would result in a $17
billion tax increase for low- and middle-income married taxpayers in
the year 2011, followed by a $25 billion tax increase in the year
2012.''
Mr. Speaker, I look forward to debate on these three resolutions,
which give the House the opportunity to once again reaffirm its
commitment to the American workers and their families.
Mr. Speaker, I reserve the balance of my time.
Announcement by the Speaker pro tempore
The SPEAKER pro tempore. As the Chair most recently ruled on
September 19, 2002, Members are reminded to confine their remarks to
factual references to the other body and avoid characterizations of
Senate rules, Senate action or inaction, remarks urging Senate action
or inaction, or references to particular Senators.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
(Mr. FROST asked and was given permission to revise and extend his
remarks.)
Mr. FROST. Mr. Speaker, this rule and the three meaningless sense of
the House resolutions it will bring to the floor represent a complete
abdication of leadership by House Republicans.
On the front page of today's New York Times, the Census Bureau
reports that the number of people living in poverty has increased, the
median household income has decreased, and Americans are suffering
under the weakest economy in 50 years. But congressional Republicans
are fiddling about, cynically playing politics in order to run out the
clock before the November elections.
The majority leadership should be ashamed of itself, Mr. Speaker.
Republicans refuse to do the most basic job that they were elected to
do: fund the Federal Government. House Republicans have passed only
five of the 13 appropriation bills, and the fiscal year ends in less
than 1 week.
Later today, or perhaps tomorrow, or perhaps some day next week, we
will pass the first of several continuing resolutions to keep the
government operating. But instead of working overtime to do their most
fundamental job, Republican leaders are worried about their own
political power, so they are wasting time on the meaningless bipartisan
propaganda that these resolutions represent.
Never have I seen such timidity, timidity from the Republican
leadership. Meanwhile, long-term unemployment is at an 8 percent high,
and 2 million Americans have lost their jobs. Consumer confidence is at
its lowest level since November of 2001, and prescription drug prices
are still sky high, leaving senior citizens unable to afford vital
prescription medicine.
Mr. Speaker, corporate scandals, the massive criminality at Enron,
WorldCom, and the like have rocked the economy and devastated
retirement plans of millions of Americans; but House Republicans
overwhelmingly voted against real pension protection legislation a few
months ago, blocking Democratic efforts to protect Americans'
retirement plans.
Just yesterday, the Dow hit a 4-year low. The NASDAQ is at a 6-year
low. Overall, the stock market has lost $4.5 trillion in value since
Republicans took control in Washington a year ago January.
How have Republicans responded, Mr. Speaker? Last week they wasted
the taxpayers' time and money on two utterly meaningless resolutions.
This week they are doing it again, issuing a rule that brings three
more utterly meaningless resolutions to the House floor, since we have
already passed these bills that are the subject of these resolutions.
Mr. Speaker, in case anyone has any doubt as to the substantive
significance of the resolutions on the floor today, let me tell the
Members how we got here. Originally, Republicans had one meaningless
resolution on the schedule for today. Apparently, however, that would
not waste enough time, so in the middle of the Committee on Rules
meeting yesterday evening, Republicans happened to mention that they
were going to add two more meaningless resolutions. Then they told us
that they had to adjourn the committee until the new resolutions had
been written.
Mr. Speaker, this is a shameful failure to lead. It demonstrates an
embarrassing intellectual bankruptcy on the part of the Republican
Party. They have given up on addressing the real priorities of the
American people and turned the House floor into a propaganda arm of the
Republican National Committee.
In closing, Mr. Speaker, I pose a simple question to my Republican
colleagues: Are they afraid to do the job their constituents elected
them to do? If not, I urge them to join Democrats in opposing the
previous question.
If we defeat the previous question, we will amend the rule to bring
to the floor real corporate accountability legislation offered by the
gentleman from California (Mr. Matsui), the ranking member of the
Subcommittee on Social Security. The Matsui measure would ensure that
big corporations treat their employees the same way they treat their
favorite executives: if the CEO gets a guaranteed pension, then so
should the front line employees; if the company restricts employees who
want to change their 401(k) plans, then it should restrict CEOs who
want to cash in their stock options.
The Matsui bill embodies the values that President Bush set forth
months ago. If it is good enough for the captain, it is good enough for
the crew.
I urge my Republican friends to join us in defeating the previous
question so this House can finally address the corporate scams that
have hurt so many employees and investors.
By the way, it might be nice if the Republicans would also bring the
eight appropriation bills that are still languishing in committee to
the floor. They have utterly failed to do the job that they were sent
here to do.
Mr. Speaker, I reserve the balance of my time.
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Mr. SESSIONS. Mr. Speaker, I yield such time as he may consume to the
gentleman from North Carolina (Mr. Ballenger), a member of the
Committee on Education and the Workforce.
Mr. BALLENGER. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, over the last year thousands of Americans employed by
Enron, WorldCom, Adelphia and others have watched helplessly as their
companies collapsed and their retirement savings evaporated. In
response, President Bush called on Congress to act in a bipartisan
fashion to restore confidence in our Nation's pension and retirement
security system, and I am not ashamed to say more than 150 days ago the
House did its part by passing a comprehensive pension protection bill
that protects workers from losing their retirement savings in Enron-
style corporate meltdowns.
The House passed the Pension Security Act to protect workers'
retirements by stopping harmful inside trader moves. It gives workers
new freedoms to diversify their retirement savings in 3 years and
allows workers to
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receive sound investment advice about their retirement plans. American
workers deserve no less than this from Congress. And also we need to
support a 401(k) continuation and permanent renewal of the marriage
penalty. The Senate has not passed any protection bill; and by
supporting this bill rule, you are standing up for American workers.
Mr. FROST. Mr. Speaker, I yield 7 minutes to the gentleman from
California (Mr. Matsui).
Mr. MATSUI. Mr. Speaker, I thank the gentleman from the State of
Texas (Mr. Frost), the ranking member on the Committee on Rules.
Mr. Speaker, what we are really doing here today is passing three
resolutions that the gentleman from Texas (Mr. Frost) said were
absolutely meaningless, and I would have to say that they are probably
less than absolutely meaningless.
The first resolution deals with a bill that was passed some months
ago basically asking that the Senate act on it. Now, the way I would do
this is you just go walk over to the Senate side, which takes about 5
minutes, and just suggest that perhaps they bring the bill up, and if
they will not bring the bill up ask them why and then you will find out
why because the bill that passed the House is somewhat meaningless.
The same thing on the second resolution. You want to make something
permanent that will not take effect until 8 years from now. And so why
talk about asking the Senate to take this bill up now when we are
talking about something 8 years from now? We do not even know how this
bill will work.
The last one is on the marriage penalty, again doing something that
will take 8 years from now. What is odd is that we should really be
addressing the shortfall on Social Security, but because the
Republicans want to privatize Social Security, they want to wait until
after the elections because they know they are getting really torpedoed
on this. They do not want to talk about Social Security. They have a
prescription drug proposal that will privatize Medicare and, obviously,
that cannot pass the other body because it is so extreme that that is
not going to happen.
You can go on and on and on. One of reasons the appropriations bills
are not being brought up is even though the President had a wonderful
Rose Garden ceremony, signing ceremony, on the education bill, Leave No
Children Behind, he falls $7 billion short in actually funding that
bill, which would make it impossible to implement it and create chaos
in every school district in America.
So we know what is happening. We know why we are spending hours of
time on this floor of this body talking about resolutions. The easiest
thing in the world, as I said, is just go on the other side. Talk to
these people on the other side. Do not send resolutions and waste their
time.
What is really offensive is let us take the first piece of
legislation that we are talking about, the first resolution. I will
tell you how meaningless it is. They have basically two parts of this
bill: The Boehner-Thomas bill which is supposed to really address the
Enron pension problems. The first one basically says that no employee
can actually sell company stock for 3 to 5 years from the date of
receipt. Now, that does not mean anything from the top level management
employees; the executives like Ken Lay could still sell any time they
want. They get a stock option. So this does not really help the
employees of these companies.
The second part of it is even more silly when you think about it. The
gentleman from Texas (Mr. Frost) talked about investment advice. The
only trouble is the investment advice will come from the same people
that are administering the program. So you take Enron, it would have
been the Enron pension managers that would have been giving investment
advice to the Enron employees. Now, what do you think they are going to
say? Do not buy Enron stock? Of course not. It is silly.
But you say, we do have a provision that you have to disclose a
conflict of interest. Sure, that is a lot of help. That is what this
bill does. It is somewhat meaningless. That is why the other body has a
rough time wanting to take this up.
The bill I would like to offer and the bill we really should be
debating, you can vote against it, but let us bring it to the floor so
that the American public will know our values, what we stand for,
exactly who does want to solve those problems. What our bill will do is
basically, let us take, for example, the whole issue of
diversification, the first issue about Enron employees having in their
401(k) plans Enron stock. Essentially what we would provide is that the
executive employees like Ken Lay and Skilling and those folks would not
be able to sell their stocks if in fact there are impediments to the
employees having to sell their stocks. And if they do sell their stocks
and breach the general company-wide prohibition in terms of time
limits, they would just have to pay a capital gains tax that is larger
than the capital gains tax they will pay now. They will have to pay a
50 percent capital gains tax. That should be a disincentive then for
them to sell these stocks or at least perhaps open it up so their
employees can sell their stocks.
Secondly, we all know what has been going on, and finally I think the
Jack Welch situation became public knowledge about a month ago. A lot
of retired top executives and CEOs get millions and millions of dollars
of perks. Not only do they get wonderful pension programs, but they
also get tickets free to sporting games on the front row. They get
apartment complexes. They get their cleaning paid for. They get a
corporate jet that is waiting for them. Millions of dollars worth of
funds.
We know that they get these big benefits and we are not going to stop
that. They are going to get them. But what we want is transparency. One
of the reasons the market is falling apart, it was 11,700 when the
President took office, and now it is down to 7,700. It lost 4,000
points in the last 2 years since President Bush has been President,
about a 40 percent reduction in pension benefits.
The reason why there is no confidence in the stock market today is
because there is no transparency, because the shareholders do not know
what is actually being expensed. The shareholders of GE did not know
that Jack Welch was actually spending millions and millions of dollars
of monies that could have gone in the form of stock dividends. All we
would do is just provide that when you give these benefits and perks to
these top management people, that you notify the shareholders in
writing. And then you allow the shareholders to vote as to whether or
not they agree with it; and if they do not, these perks are not
available. Very simple.
Why would anybody be opposed to that? You want transparency, you want
fairness, and you want the shareholders to have their benefits. We
cannot bring this bill on the floor because you, Republican leadership,
will not allow us to. The American public needs to know that. Why
should we not be allowed to do that?
Lastly, the whole issue of deferred compensation. Ken Lay did really
well. After bankruptcy was filed, he was able to take millions of
dollars in deferred compensation. You know why he was able to do it?
Because he put it in a third party trust that was nontaxable to him;
nontaxable trust monies of Enron money went into a third party trust.
And when they filed bankruptcy, every employee of Enron corporation
lost their 401(k)s and went from $100,000 to zero or whatever they had
went down to zero. It was suffering, what these people went through.
Ken Lay walked off with it. You know why? Because we have a provision
in the Tax Code that needs to be changed because it allows a deferral
of taxes, and at the same time with the third party trust he was able
to take literally millions of dollars from his account.
We need a no vote on the motion on the previous question so we are
able to bring up our legislation that will deal with these major points
so the American public and the shareholders will understand exactly
what is going on in corporate America.
Announcement By The speaker Pro Tempore
The SPEAKER pro tempore (Mr. Dan Miller of Florida). Members are
reminded to avoid improper references to the Senate.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today we were furthering this debate that we have had
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for quite some time. I completely understand where the Democrats are
coming from. They completely understand where we are coming from. We
would like an agenda that is going to help taxpayers. We want an agenda
that will help investors. We want an agenda that will help this country
to come back from the problems that it has had. But the bottom line is
the consensus that these bills have represented, including just one of
these bills, got 308 votes. It is a consensus about doing something
that will work.
I understand how difficult it is to beat up the status quo, just beat
it up. But the answers that the other side has, just like when they
present their budget, it does not even come close to passing. The
measures that they have time after time do not come close. But the
provisions that we have put on the floor have virtually bipartisan
agreement with over 308 people who vote for it.
These are the ideas that we bring back to the floor today. The ones
that have received over 300 votes of this body, the votes that make a
difference, the ideas that make sense. It is easy beating up these
ideas. I understand that. I also understand a lot of the frustration
that they have got. But now is the time for us to make sure that we are
pushing these. These three provisions are important. Yes, it is true.
Two of them simply make permanent the things at the end of 10 years
that we passed in the past few years. But I believe they are very
important and I believe they represent more than a consensus of this
body. And that is why it makes sense that what we passed previously,
that we will debate again.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Ohio (Mr. Portman), a member of the Committee on Ways and Means.
Mr. PORTMAN. Mr. Speaker, I thank my colleague from Texas (Mr.
Sessions) for yielding me time; and I am pleased to talk about today
the substance of some of the legislation before us.
The rule permits us to take up three bills. My understanding is today
we will address two of them. They have just been mischaracterized in my
view by my colleague from the other side of the aisle, and I just want
to relate what they actually contain.
The first is H.R. 3762. This is the pension security bill. It passed
the House with a vote of 255 to 163 with 46 Democrats supporting it. It
does have a controversial amendment with regard to independent
investment advice, but to say that it does nothing, which my colleague
and friend from California (Mr. Matsui) said earlier, is not accurate.
Let me tell you just what it does.
It says to people who are currently in company plans who have
401(k)s, who get a match of stock from their employer, that they do not
have to be in that stock for an unlimited period of time. Under current
law if an employer wants to they can give a match under a 401(k)
program and say, you can have that stock but you have got to keep it,
and you can never get rid of it, because there is no current rule which
says that employees, the workers, have the right to unload that stock.
That is a bad situation.
What happened at Enron is they told people they had to be 50 years of
age plus they have to have 10 years of service. So people literally got
hold of that Enron stock and they did not have the ability to get it
out of their retirement plan. That is current law. Enron could have
said 65 instead of 50. They could have said 20 years of service. They
chose 50 and 10.
So what this House did on a bipartisan basis is we said, Let us
change these rules. Let us say that as soon as you are vested, and
vesting is after 3 years of service, that is the current vesting rule.
We moved it from 5 years down to 3 years in the Portman-Cardin
legislation a couple years ago. As soon as someone is vested after 3
years, you can get rid of that stock. You can divest yourself of that
corporate stock that that company has given you as a match. That is a
huge difference. And to say that does nothing I think not only
mischaracterizes the bill, but I think that is really unfair to the
workers of America who want to have that flexibility. They want to have
the choice. If they want to keep that stock, fine, they should be able
to. But they should also have the choice to get out of it. And a lot of
folks at Enron would have gotten out of it. So that is a big change
from current law.
It is not something, frankly, the business community was wild about
because they like the idea of giving corporate stock and tying people
to that stock because they think that gives people more of a stake in
that company. It enables them to have that stock be held. But we looked
at it. We said it was fair. We decided to do it. The gentleman from
Maryland (Mr. Cardin) and I worked on that. The gentleman from North
Dakota (Mr. Pomeroy) and I worked on that and others. So to say it does
nothing is just inaccurate.
Second, it provides better information to workers. That is something
we agreed to on a bipartisan basis. It was not a controversial part of
the bill. It does provide a lot more information and better
information. For instance, now when somebody gets into a plan they have
to be provided with advice that says diversify. Do not put all your
eggs in one basket. A commonly accepted principle for retirement is you
should not have all your eggs in one basket. People now have to be told
that when they get into a plan. They also have to be told, not only
when they get into it but on a quarterly basis, what that plan is
doing.
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That was not a requirement before this legislation. If we could get
this out of the Senate, people would actually get quarterly statements
telling them what is in their plan, what they have, how the plan is
doing in plain English so they can actually have the kind of
transparency that the gentleman from California (Mr. Matsui) talked
about, and I could not agree with him more. Transparency is absolutely
critical.
Finally, education. Choice and information are important, but we also
need to give people more tools to be able to educate themselves about
how to invest their retirement savings. I think there is a consensus on
doing that. There is some controversy about one element here, but it is
extremely important.
There are two provisions in the bill. One says that one should be
able on a pretax basis to go out and get advice wherever one wants, up
to 500 bucks. Just like one can get a pretax cafeteria plan for
eyeglass coverage or some other benefit, one can get investment advice.
Investment advice is not cheap. So it is important that people have the
ability to go out to get that advice. That is something that the
gentleman from Maryland (Mr. Cardin) and I have put together in
previous legislation; it is something this House passed.
Finally, it says that companies ought to be able to allow people to
come into the company and provide advice to the employees. The employer
has the option to do that under this bill. It is voluntary. If the
person comes forward to offer advice, the person has to disclose
whatever that person is doing including being involved in a company
plan, if they are. It is subject to all fiduciary responsibilities that
come with that. It has to be a certified individual. So their
protection is in there, but the point is there are millions of American
workers today, over 42 million of them are in 401(k)s and a lot of them
are getting no advice at all. In fact, 65 percent of those workers tell
us they want to get education. So this is what this bill does. It is
pretty simple. It says people ought to have choice. They do not have it
now. And until the Senate acts, they will not have it. They ought to
have better information about their plan. They ought to have better
education.
A couple of other really good provisions of the bill have already
been passed in the corporate accountability bill. That dealt with the
blackout period. Do my colleagues remember that issue with the Enron
situation because they were changing plan administrators, there was a
blackout where people could not sell their stock and yet the people at
the top could and there was no notice of the blackout? This House
passed legislation that is part of this bill that says 30-day notice,
they have to tell people about a blackout and during the blackout, the
corporate executives who are not even in the plan but have stock
separately cannot sell their stock. What is good for the sailor is also
good for the ship captain. That was that idea and that did pass as part
of the corporate accountability bill,
[[Page H6664]]
but it came out of this House and out of this legislation.
So what we are doing today may seem meaningless to some, but I think
it is very important because it is important to the workers of America.
It is to say to the United States Senate, look, we passed this thing
back in April. We responded on a bipartisan basis in the House. It is
time now for the United States Senate to help America's workers. Enough
talk. We have got a bipartisan consensus on which way to go. We ought
to get it done.
The second piece of legislation has to do with enabling people to put
more in their retirement accounts, enable them to move their accounts
from job to job, portability, and simplifying the rules for small
business so that they can offer more accounts. We know for a fact that
of the 75 million people in America who do not have any retirement
savings plan at all, 75 million people are left out right now. Most of
them work in small business. In fact, among small businesses, only 20
percent offer any kind of plan like a 401(k) or a similar plan. So this
House, on a 308 to 70 vote and in the past on a 400 vote, passed this
legislation.
And what we are saying here is we ought to now make that legislation
permanent. It lets everybody save more for their retirement. It is good
policy. It is already working. IRA contributions are up 25 percent this
past year, and thank goodness, because some of that money is accounted
for now and able to balance some of what is happening in the markets so
that people have a little more retirement savings. So it is out there
working. It is good policy.
Why do we think it ought to be made permanent? Because although it
does not expire for 8 years, it is very difficult to plan. Most
Americans are trying to plan for their retirement. They want to know
that this thing is not going to expire in 8 years, which it does under
the current legislation. Small businesses would like to plan. If
someone is thinking about getting into a pension plan for the first
time if they are one of those 80 percent of small businesses, Mom and
Pop operations, and they are sort of scared about the cost and the
burden of liabilities to this, we reduce some of these for them here
but they are saying, gee, how do we know that if we get into this
business we are not going to get knocked out of it in 8 years? We ought
to make it permanent.
I hope this is something this House would agree on. We already had a
vote on that in this House. All we are saying to the Senate is, please,
instead of talking about this so much, let us do something. We have the
ability to do something. We have a consensus on how to help every
worker have a more secure retirement.
There may be other things that people would like to add. The
gentleman from California (Mr. Matsui) has talked about executive
compensation. Those are important issues. We ought to address those
issues. It will not help one person get a pension, I can tell you that.
So let us focus on what we are about here, which is helping workers to
be able to have a little nest egg for their retirement, have a little
peace of mind so that when they retire, they have something to be able
to use for their own retirement and pass along to their kids and
grandkids. That is what we are doing today. It is very simple. I
appreciate the time.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Dan Miller of Florida). Members are
reminded to avoid improper references to Senators.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
I was listening to my colleague, the gentleman from Texas, a while
ago; and he was talking about why we need to be voting on this today,
and I think he is a little confused. I do not know, maybe he was sick
the day they did the legislative process during freshman orientation. I
do not know. But it sounded like he was talking about voting on a
conference report. We do not have a conference report before us. We
have a bill that has already passed the House, has not been taken up by
the Senate. So it is meaningless to vote a second time on the same bill
that has already passed the House when it has not been passed by the
Senate, has not gone to conference, and has not come back to us. So
this really is an extraordinary waste of everybody's time, the
minority's time, the majority's time, and the taxpayers' time and
money.
Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr.
Cardin).
Mr. CARDIN. Mr. Speaker, I thank the gentleman from Texas (Mr. Frost)
for yielding me this time.
Mr. Speaker, I strongly support worker protection in the pension
laws, but today is another wasted opportunity, another loss of an
opportunity to do something positive in that direction. I strongly
disagree with the partisan strategies of my Republican colleagues. We
need Congress to act on pension protection. It has been a pleasure to
work with the gentleman from Ohio (Mr. Portman) on many of these
pension issues. Yes, employees should have control over their assets in
the 401(k) plan.
Yes, we need to give them advice on diversification and independent
advice; and yes, we have to give them notice of blackout periods. All
that is very important, but this rule, as the gentleman from Texas (Mr.
Frost) has pointed out, if it passes, will allow us to consider on this
floor three meaningless resolutions. They do not even reenact what we
did before. These are basically political statements more than action
on the floor of this body.
Instead, we could have done something here today to make it more
likely we would send legislation to the President accomplishing what we
are talking about today. We still have that opportunity. If we defeat
the previous question, then we will be able to bring forward an issue
that is extremely important to the workers of this Nation, will help
bring us closer to the other body and more likely that we will get
legislation enacted this year.
Mr. Speaker, I refer to the fact that under current pension law,
there is preferential treatment for top management over the rank-and-
file workers of a defunct company. No one can justify that. If a
company cannot pay its workers, if a company cannot pay its creditors,
it should not be paying these lucrative agreements to its top
management, the deferred compensations and the unqualified pension
plans that allow these payments to continue even though the company is
in bankruptcy; and that is what the gentleman from California (Mr.
Matsui) is referring to. That is what we will be able to consider in
this body if we defeat the previous question; and if we do that, we
will not only be enacting the right policy, treating workers equally
with top management and protecting their pension rights, but we also
will make it more likely that we can get legislation enacted this year.
I urge my colleagues to listen to this debate. Why we continue to
take up these resolutions that do absolutely nothing is beyond me.
These are important issues. We all want to help workers. So why can we
not use the time that is obviously available to us to do the work we
have not done yet? We have not taken up the issue of protecting the
rank and file versus the top management. Let us take that issue up
during this time.
I urge my colleagues to defeat the previous question.
Mr. SESSIONS. Mr. Speaker, I yield 4 minutes to the gentleman from
Illinois (Mr. Weller), the sponsor of the Marriage Penalty Relief Act.
Mr. WELLER. Mr. Speaker, I thank the gentleman from Texas (Mr.
Sessions) for yielding me this time.
I rise in strong support of the rule. I urge a ``yes'' vote on the
previous question because this is a pretty simple debate before us
today. We are debating bringing up a measure that says we need to get
our work done on making elimination of the marriage tax penalty
permanent; and before I discuss this marriage tax penalty, I do want to
commend my friend, the gentleman from Ohio (Mr. Portman), and the
gentleman from Ohio (Mr. Boehner) for their good work on the pension
legislation that is also part of this rule debate, particularly for the
inclusion of the 415 pension provisions which benefit over 10 million
construction and building trades people across America.
Thankfully, President Bush had the leadership to sign that
legislation into law; and unfortunately, it was a temporary measure,
and just imagine what it would mean to working folks back home in our
districts if the rug were pulled out from them if that provision
[[Page H6665]]
were allowed to expire, what it means for a laborer in my district like
Larry Core. That 415 provision means a doubling of his pension by
removing those artificial caps that denied him the full pension that he
earned and deserved.
I have often, like many of my colleagues, come to the floor and asked
the very fair and basic issue of fairness, and that is, is it right, is
it fair that under our Tax Code almost 42 million married working
couples have suffered higher taxes historically just because they are
married? It does not seem right, and it does not seem fair; but the
average marriage tax penalty would be about $1,700.
Thankfully, this House, along with the Senate, and we obtained
bipartisan support, succeeded in passing as part of the Bush tax cut
legislation to eliminate the marriage tax penalty, helping 42 million
married working couples, couples such as Jose and Magdalena Castillo,
two laborers, two construction workers from Joliet, Illinois. They have
a son and daughter, Eduardo and Carolina. They are good people. They
work hard. They are pursuing the American dream, but they suffered the
marriage tax penalty prior to President Bush signing the Bush tax cut
into law.
Unfortunately, the Bush tax cut is temporary. It expires in a few
years, so what that means for a couple such as Jose and Magdalena
Castillo, who right now have the marriage tax penalty essentially
eliminated, is they could end up paying in a few years about $1,700
more in higher taxes just because they are married; and I believe that
there is bipartisan agreement in this House that it is wrong that a
married couple who are both in the workforce, man and wife, should pay
higher taxes. We saw that we had almost 60 Democrats join with every
House Republican that rejected their leadership's call, and they voted
with us in eliminating that marriage tax penalty.
We have before us today a rule which will allow us to bring up this
coming week a measure which will say that we want to complete before
the end of this year, making permanent the elimination of the marriage
tax penalty, and this House has passed legislation to make permanent
the elimination of the marriage tax penalty; and I would note that the
Senate has not taken up permanency when it comes to eliminating the
marriage tax penalty legislation that the House passed months ago. I
think it is important that we make this a bipartisan priority.
We have that opportunity today, because think about it, for Jose and
Magdalena Castillo of Joliet, Illinois, two hardworking people who have
suffered the marriage tax penalty, just like 42 million American
working couples, unless we make permanent the elimination of the
marriage tax penalty, they are going to once again suffer higher taxes
just because they are married.
We have a simple vote before us. We are voting on a rule. It is a
procedural thing that we have to do, but this rule will allow us to
debate the need to finish our job on eliminating the marriage tax
penalty permanently; and, again, I would note that this House passed,
and the votes of every House Republican and about 60 Democrats joined
with us in a bipartisan effort, to eliminate the marriage tax penalty.
I urge a ``yes'' vote on the rule and a ``yes'' vote on the previous
question.
Mr. FROST. Mr. Speaker, I yield 4 minutes to the gentleman from
Massachusetts (Mr. Neal).
Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from
Texas (Mr. Frost) for yielding me the time.
Today, Mr. Speaker, we are considering more resolutions without
meaning. What was great about the Seinfeld show, a show about nothing,
is not so funny here in Congress when we debate bills about nothing.
These empty resolutions seek to divert attention of the American voters
from the Republican leadership's mediocre attempt at pension and
corporate reforms.
What we should be debating today is actual legislation that deals
with the important issues of pension reform and corporate
accountability. My colleagues may recall, Mr. Speaker, that the first
economic stimulus bill that the leadership pushed through this House,
and my friend from Ohio made reference to Ma and Pa businesses they
want to help, would have given $254 million with repeal of the
corporate alternative minimum tax to Ma and Pa Enron.
{time} 1630
Well, in the wake of Enron's spectacular demise, this House has done
little to help those who were financially devastated as shareholders
and workers. Pension security deserves serious debate. Establishing
parity between corporate executives and rank-and-file employees
regarding the buying and selling of stock is simply the right thing to
do. It is imperative to strengthening the integrity and public trust in
corporate America. Congress has that opportunity if we would just get
to it.
President Bush, a former corporate executive himself, said, ``If it
is okay for the captain, it ought to be okay for the sailor.'' Instead
of debating senseless senses of the House, we should correct this
system that unfortunately allowed hardworking Americans, the backbone
of corporate America, to lose their retirement savings.
What we are continuing to allow by wasting our time on these
resolutions is abusive corporate perks. Let us start with our friends
at GE, the quintessential corporate manager who was receiving
exorbitant perks at shareholders' expense and most importantly, without
shareholder approval. I call Members' attention to the enviable list of
perks ranging from big-ticket items to minutia, from a $15 million
Manhattan apartment, to corporate jets, to membership fees at four
country clubs, to sports tickets, and even expensive toiletries. It is
interesting why a man whose wealth has been estimated at $900 million
would feel it necessary to have the shareholders of GE pay for his
laundry service.
How about the ousted CEO of Tyco, formerly of New Hampshire and now
of Bermuda. Without shareholder approval, the company paid for a
bizarre set of perks, including $2 million on a birthday party for his
wife, $15,000 for a dog umbrella stand, and how about $445 for a pin
cushion.
The CEO of Adelphia, he used company funds to construct a $13 million
golf course on family property. The holidays must have been very good
there.
These extravagances reflect a corporate culture gone awry. Warren
Buffet summed it up best when he said, ``The ratcheting up of
compensation has become obscene.'' But rather than taking up
legislation to prevent or discourage such financial abuse of
shareholders and investors, we debate resolutions about nothing.
Mr. Speaker, I want to join the gentleman from California (Mr.
Matsui) in urging this House to take up his legislation which would
bring some sanity into the corporate compensation process. We need
better protections for our investors, shareholders and workers. How can
anybody look at those shareholders and employees at Enron and justify
what happened to them?
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from New
Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, the gentleman from Texas (Mr. Frost) said this is a
meaningless resolution. I beg to differ with the gentleman; I think
this resolution is very meaningful because it shows that the majority
in the face of real economic stress and pain in our country is more
interested in positioning for the election that is coming in 6 weeks
than it is in solving the country's problems.
Since the beginning of 2001, 2 million people have gone on the
unemployment rolls. In the last 12 months, 1 million people have
exhausted their economic unemployment benefits, have seen them run out.
Since the beginning of 2001, the stock markets have seen $4.5 trillion
of wealth evaporate, much of that wealth in the pension funds of
American workers, American retirees.
We have seen the equity markets themselves lose 40 percent of their
value. We have seen the spread between short- and long-term interest
rates, a key indicator of future happenings in our economy, grow wider
than it has in recent history. We have seen a Federal Government that
was bringing in $108 for every $100 that we spent at the beginning of
2001, now bringing in $90 for
[[Page H6666]]
every $100 that we spend, and covering the difference by borrowing from
the Social Security trust fund, running the government on Social
Security money that should be there for the future.
The right thing to do would be to renegotiate the country's budget,
to bring to this floor legislation that would really make a difference
to the people that have been stressed, an extension of unemployment
benefits for people who cannot find work, a means of creating more jobs
in the short run for people who cannot find work, provisions that would
truly strengthen pension plans, and one of those provisions can be
brought to the floor if Members vote ``no'' on the previous question,
and that is the idea of the gentleman from California (Mr. Matsui),
which says that a self-regulating concept in pension plans will be that
whatever the top guy in the organization gets, everybody else has to
get, too. If there is a restriction on what can be done with stock that
applies to the person who cleans the office at night, then it applies
to the person who owns the office building. If there are benefits for
the person high up in the executive suite, a similar kind of a benefit
has to apply to every single man and woman who stands under that person
on the company's organizational table.
This is a real change that would make a real difference at a time of
real problems. I regret that what we are going to do if the majority
passes this rule is pass a couple of ceremonial resolutions to take
note of what we wish the other body would do. We cannot control what
the other body does. It has a conscience and a rhythm all of its own.
That is what the framers intended. However, we ought to do something
rather than nothing.
Mr. SESSIONS. Mr. Speaker, I yield 3 minutes to the gentleman from
Ohio (Mr. Boehner), the chairman of the Committee on Education and the
Workforce.
Mr. BOEHNER. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, over the course of this past year, we have watched
employees of Enron and WorldCom and other companies watch their
retirement savings dwindle to almost nothing. The House in a bipartisan
way came together on April 11, 160 days ago, to pass the Pension
Protection Act which will in fact help protect all pensions in America.
Yet the Senate has not acted.
Now the Senate did in fact act along with the House when we passed
the Corporate Accountability bill to put those corporate insiders who
have abused their shareholders and abused the law and put them in jail.
In that bill, I might add, there were two provisions from the Pension
Security Act actually signed into law. One, a provision that would bar
company insiders from selling their stock during a blackout period
where the plan administrator is changing.
Secondly, in the Corporate Accountability bill, we do require that
pension plan administrators notify their employees 30 days in advance
of any blackout period. But we all know there is a lot more that needs
to be done. We need to give workers more freedom to diversify their
401(k) accounts. We need to make sure that workers have access to high-
quality investment advice. But the House cannot do it alone.
We all know under the Constitution that before a bill can become law
and go to the President's desk, it has to be acted on by the House; it
has to be acted on by the other body. Any differences have to be
resolved before the bill goes to the President. The House has acted.
The Senate has yet to take up pension legislation, and I believe this
issue is one thing that needs to be done.
We have to remember that this bill, the Pension Security Act, passed
the House with 46 Democrat members voting for it. We worked in a
bipartisan way to make responsible reforms that really would in fact
protect the pension assets of many of our employees. But we cannot get
this bill to the President's desk until we have action. That action
needs to occur, and it needs to occur now.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, when people who are watching this on television, maybe
listening to us on the radio, perhaps following these proceedings in
the newspaper tomorrow, when members of the public get their quarterly
401(k) statements next week and the statements from their mutual funds,
think of the Republicans when you open that up. Think of the
Republicans and what they have not done and what they are not willing
to do to improve the economy.
They are not willing to bring any legislation to the floor today that
makes any difference. They bring meaningless resolutions. I urge
members of the public, think of my friends on the Republican side when
you open your quarterly 401(k) statement next week.
Mr. Speaker, the majority should be ashamed to bring these sense of
Congress resolutions to the floor. These resolutions are pieces of
paper that do nothing, help no one, and waste the time of the House of
Representatives. No wonder the American people are cynical about their
government. Mr. Speaker, I would be, too, if this is the best the
majority can produce.
If there is any Member on the majority side who wishes to pass some
actual legislation, they should join us in defeating the previous
question of the rule. If that occurs, then I will offer an amendment
that provides immediately after the House passes this meaningless rule,
it will take up a bill that contains real corporate welfare reforms.
While the Republican majority is busy indulging their aversion to
passing actual legislation so close to an election, Democrats want to
crack down on corporate executives who get cheap leases for their
corporate jets while their company's 401(k) plan collapses. The
majority allows these executives to shield their earnings and retire to
their penthouses and benefits for life, while the American people are
left playing for this largess.
This is wrong, Mr. Speaker. Democrats know it and are willing to do
something about it, while the Republicans pretend these problems do not
exist. I do not know about anybody on the other side, Mr. Speaker, but
Democrats want to work. We are elected to help make things better for
the American people, not to stall legislation we were afraid would hurt
us with our big donors too close to an election time.
By defeating the previous question, the House can take up this bill
and stop the two classes of people we now have in this country:
executives who walk away with millions and live the life of luxury, and
the rank-and-file worker who goes home every day hoping their 401(k)
plan will last until retirement.
Mr. Speaker, Members, all a ``yes'' vote does is waste time, and
Congress has done enough of that for the past 3 weeks. Let us actually
pass something that matters. Let us get some work done. I urge a ``no''
vote on the previous question.
Mr. Speaker, I ask unanimous consent that the text of the amendment
be printed in the Record immediately before the vote on the previous
question.
The SPEAKER pro tempore (Mr. Simpson). Is there objection to the
request of the gentleman from Texas?
There was no objection.
Mr. FROST. Mr. Speaker, I yield back the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we promised at the beginning of this debate on the rule
that it would be contentious, that we understood that the Democrat
Party opposed what we were doing, and we understood what we were
supporting. We believe what we are talking about here is good for
investors. We believe it is good for people to have 401(k)s, pension
plans, the opportunity to save more money.
We have had a chance to debate these important issues. We have had
any number of speakers on both sides of the aisle who have talked about
the things that are good and bad about these resolutions that we are
talking about; but the bottom line is that Members will get a chance to
vote now after hearing this debate.
Mr. Speaker, I think the previous question will pass, that we will
pass these resolutions, that the vast majority of Members will
understand what we are doing, the importance to the American people,
and the importance to people who are trying to make a go of it with
their own savings account.
{time} 1645
I think the American public understands what we are doing, and I
think they understand what the Republican Party stands for.
[[Page H6667]]
The material previously referred to by Mr. Frost is as follows:
Previous Question for H. Res, 547--rule on H. Res. 540 Sense of the
House that the Congress should complete action on H. Res. 3762, the
Pension Security Act of 2002, H. Res. 543 Sense of the House that
Congress should complete action on H.R. 4019, making marriage tax
relief permanent and H. Res. 544 Sense of the House of Representatives
on permanency of pension reform provisions
At the end of the resolution add the following new
sections:
Sec. . Notwithstanding any other provision in this
resolution, immediately after disposition of the resolution
H. Res. 540, the Speaker shall declare the House resolved
into the Committee of the Whole House on the state of the
Union for consideration of the bill (H.R. 5432) to amend the
Internal Revenue code of 1986 with respect to the amount
included in gross income by reason of personal use of
corporate property, to require the same holding period for
company stock acquired upon exercise of options as is
applicable to company stock in its 401(k) plan, to require
disclosure to shareholders of the amount of corporate perks
provided to retired executives, and to provide parity for
secured retirement benefits between the rank and file and
executives. The first reading of the bill shall be dispensed
with. All points of order against consideration of the bill
are waived. General debate shall be confined to the bill and
shall not exceed one hour equally divided and controlled by
the chairman and ranking minority member of the Committee on
Ways and Means. After general debate the bill shall be
considered for amendment under the five-minute rule. The bill
shall be considered as read. At the conclusion of
consideration of the bill for amendment the Committee shall
rise and report the bill to the House with such amendments as
may have been adopted. The previous question shall be
considered as ordered on the bill and amendments thereto to
final passage without intervening motion except one motion to
recommit with or without instructions.
Sec. . If the Committee of the Whole rises and reports
that it has come to no resolution on the bill, then on the
next legislative day the House shall, immediately after the
third daily order of business under clause 1 of rule XIV,
resolve into the Committee of the Whole for further
consideration of that bill.
H.R.--
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SPECIAL RULES FOR EXECUTIVE PERKS AND RETIREMENT
BENEFITS.
(a) In General.--Part I of subchapter D of chapter 1 of the
Internal Revenue Code of 1986 (relating to pension, profit-
sharing, stock bonus plans, etc.) is amended by adding at the
end the following new subpart:
``Subpart F--Special Rules for Executive Perks and Retirement Benefits
``Sec. 420A. Holding period requirement for stock acquired through
exercise of option.
``Sec. 420B. Additional tax on nondisclosed retirement perks.
``Sec. 420C. Inclusion in gross income of funded deferred compensation
of corporate insiders.
``Sec. 420D. Definitions and special rule.
``SEC. 420A. HOLDING PERIOD REQUIREMENT FOR STOCK ACQUIRED
THROUGH EXERCISE OF OPTION.
``(a) In general.--In the case of a corporate insider with
respect to a corporation, the tax imposed by this chapter on
a corporate insider for any taxable year shall be increased
by 50 percent of the amount realized by such insider from the
disqualified disposition during such year of stock acquired
by the corporate insider upon the exercise of a stock option
granted by the corporation with respect to which such
individual is a corporate insider.
``(b) Disqualified Disposition of Stock.--
``(1) In general.--For purposes of subsection (a), the term
`disqualified disposition of stock' means any sale, exchange,
or other disposition of stock which, if such stock were
employer securities held in a qualified cash or deferred
arrangement (as defined in section 401(k)(2)), would violate
any restriction imposed on the sale or other disposition of
such securities by the plan of which such arrangement is a
part.
``(2) Special rule for 2 or more cash or deferred
arrangements.--If a corporation has more than 1 qualified
cash or deferred arrangement (as so defined), the
restrictions which apply for purposes of paragraph (1) shall
be the most restrictive provisions relating to the
disposition of employer securities held pursuant to any such
arrangements.
``SEC. 420B. ADDITIONAL TAX ON NONDISCLOSED RETIREMENT PERKS.
``(a) In General.--In the case of a publicly traded
corporation, the tax imposed by this chapter for the taxable
year shall be increased by 50 percent of the net cost to the
corporation for the taxable year of personal perks provided
to a retired executive of the corporation.
``(b) Waiver If Perks Provided Pursuant to Shareholder
Approval.--Subsection (a) shall not apply with respect to any
personal perks provided pursuant to a contract if--
``(1) all of the material terms of such contract (including
a description of the benefits to be provided to the executive
and the extent of such benefits) are disclosed to
shareholders, and
``(2) such contract is approved by a majority of the vote
in a separate shareholder vote before any benefits are
provided under the contract.
``(c) Net Cost of Personal Perks.--
``(1) In general.--For purposes of subsection (a), the net
cost of personal perks provided to a retired executive is the
excess of--
``(A) the cost to the corporation of such perks, over
``(B) the amount paid in cash during the taxable year by
the executive to reimburse the corporation for the cost of
such perks.
``(2) Personal perks.--For purposes of paragraph (1), the
term `personal perks' means--
``(A) the use of corporate-owned property,
``(B) travel expenses, including meals and lodging, unless
such expenses are directly related to the performance of
services by the executive for the corporation and the
business relationship of such expenses is substantiated under
the requirements of section 274,
``(C) tickets to sporting or other entertainment events,
``(D) amounts paid or incurred for membership in any club
organized for business, pleasure, recreation, or other social
purpose, and
``(E) other personal services, including services related
to maintenance or protection of any personal residence of the
executive.
``(3) Cost relating to use of corporate-owned property.--
For purposes of this subsection--
``(A) In general.--The cost taken into account with respect
to the use of corporate-owned property shall be the allocable
portion of the total cost of operating such property.
``(B) Allocable portion.--For purposes of subparagraph (A),
the allocable portion of total cost is--
``(i) the portion of the total cost (including
depreciation) incurred by the corporation for operating and
maintaining such property during the corporation's taxable
year in which such use occurred,
``(ii) which is allocable to the use (determined on the
basis of the relationship of such use to the total use of the
property during the taxable year).
SEC. 420C. INCLUSION IN GROSS INCOME OF FUNDED DEFERRED
COMPENSATION OF CORPORATE INSIDERS.
``(a) In General.--If an employer maintains a funded
deferred compensation plan--
``(1) compensation of any corporate insider which is
deferred under such funded deferred compensation plan shall
be included in the gross income of the corporate insider or
beneficiary for the 1st taxable year in which there is no
substantial risk of forfeiture of the rights to such
compensation, and
``(2) the tax treatment of any amount made available under
the plan to a corporate insider or beneficiary shall be
determined under section 72 (relating to annuities, etc.).
``(b) Funded Deferred Compensation Plan.--For purposes of
this section--
``(1) In general.--The term `funded deferred compensation
plan' means any plan providing for the deferral of
compensation unless--
``(A) the employee's rights to the compensation deferred
under the plan are no greater than the rights of a general
creditor of the employer, and
``(B) all amounts set aside (directly or indirectly) for
purposes of paying the deferred compensation, and all income
attributable to such amounts, remain (until made available to
the participant or other beneficiary) solely the property of
the employer (without being restricted to the provision of
benefits under the plan), and
``(C) the amounts referred to in subparagraph (B) are
available to satisfy the claims of the employer's general
creditors at all times (not merely after bankruptcy or
insolvency).
Such term shall not include a qualified employer plan.
``(2) Special rules.--
``(A) Employee's rights.--A plan shall be treated as
failing to meet the requirements of paragraph (1)(A) unless--
``(i) the compensation deferred under the plan is payable
only upon separation from service, death, disability, or at a
specified time (or pursuant to a fixed schedule), and
``(ii) the plan does not permit the acceleration of the
time such deferred compensation is payable by reason of any
event.
If the employer and employee agree to a modification of the
plan that accelerates the time for payment of any deferred
compensation, then all compensation previously deferred under
the plan shall be includible in gross income for the taxable
year during which such modification takes effect and the
taxpayer shall pay interest at the underpayment rate on the
underpayments that would have occurred had the deferred
compensation been includible in gross income on the earliest
date that there is no substantial risk of forfeiture of the
rights to such compensation.
``(B) Creditor's rights.--A plan shall be treated as
failing to meet the requirements of paragraph (1)(B) with
respect to amounts set aside in a trust unless--
``(i) the employee has no beneficial interest in the trust,
``(ii) assets in the trust are available to satisfy claims
of general creditors at all times (not merely after
bankruptcy or insolvency), and
[[Page H6668]]
``(iii) there is no factor that would make it more
difficult for general creditors to reach the assets in the
trust than it would be if the trust assets were held directly
by the employer in the United States.
Except as provided in regulations prescribed by the
Secretary, such a factor shall include the location of the
trust outside the United States.
``(c) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Qualified employer plan.--The term `qualified
employer plan' means--
``(A) any plan, contract, pension, account, or trust
described in subparagraph (A) or (B) of section 219(g)(5),
and
``(B) any other plan of an organization exempt from tax
under subtitle A.
``(2) Plan includes arrangements, etc.--The term `plan'
includes any agreement or arrangement.
``(3) Substantial risk of forfeiture.--The rights of a
person to compensation are subject to a substantial risk of
forfeiture if such person's rights to such compensation are
conditioned upon the future performance of substantial
services by any individual.
``(4) Treatment of earnings.--Except for purposes of
subsection (a)(1) and the last sentence of (b)(2)(A),
references to deferred compensation shall be treated as
including references to income attributable to such
compensation or such income.
``SEC. 420D. DEFINITIONS AND SPECIAL RULE.
``(a) Definitions.--For purposes of this subpart--
``(1) Corporate insider.--The term `corporate insider'
means, with respect to a corporation, any individual--
``(A) who is subject to the requirements of section 16(a)
of the Securities Exchange Act of 1934 with respect to such
corporation, or
``(B) who would be subject to such requirements if such
corporation were an issuer of equity securities referred to
in such section.
``(2) Retired executive.--The term `retired executive'
means any corporate insider who is no longer performing
services on a substantially full time basis in the capacity
that resulted in being subject to the requirements of section
16(a) of the Securities Exchange Act of 1934.
``(3) Publicly traded corporation.--The term `publicly
traded corporation' means any corporation issuing any class
of securities required to be registered under section 12 of
the Securities Exchange Act of 1934.
``(4) Corporate-owned property.--
``(A) In general.--Except as provided in subparagraph (B),
the term `corporate-owned property' means any of the
following property owned by a corporation--
``(i) planes,
``(ii) apartments or other residences,
``(iii) vacation, sports, and entertainment facilities, and
``(iv) cars.
Such term includes any such property which is leased or
chartered by the corporation.
``(B) Exceptions.--Such term does not include any property
used directly by the corporation in providing transportation,
lodging, or entertainment services to the general public.
``(b) Additions to Tax Not Treated As Tax for Certain
Purposes.--The tax imposed by sections 420A and 420B shall
not be treated as a tax imposed by this chapter for purposes
of determining--
``(1) the amount of any credit allowable under this
chapter, or
``(2) the amount of the minimum tax imposed by section
55.''.
(b) Clerical Amendment.--The table of subparts for part I
of subchapter D of chapter 1 of such Code is amended by
adding at the end the following new item:
``Subpart F. Special Rules for Executive Perks and Retirement
Benefits.''.
(c) Effective Date.--The amendments made by this section
shall take effect as follows:
(1) Section 420A of the Internal Revenue Code of 1986 (as
added by this section) shall apply to stock acquired pursuant
to the exercise of an option after the date of the enactment
of this Act.
(2)(A) Except as provided by subparagraph (B), section 420B
of such Code (as so added) shall apply to perks provided
after the date of the enactment of this Act.
(B) In the case of perks provided pursuant to a contract in
existence on the date of the enactment of this Act, such
section 420B shall apply to such perks after the date of the
first annual shareholders meeting after the date of the
enactment of this Act.
(3) Section 420C of such Code (as so added) shall apply to
amounts deferred after the date of the enactment of this Act.
Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I
move the previous question on the resolution.
The SPEAKER pro tempore (Mr. Simpson). The question is on ordering
the previous question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. FROST. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes
the minimum time for electronic voting, if ordered, on the question of
agreeing to the resolution.
The vote was taken by electronic device, and there were--yeas 217,
nays 200, not voting 15, as follows:
[Roll No. 413]
YEAS--217
Aderholt
Akin
Armey
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Boozman
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Cooksey
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hansen
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McKeon
Mica
Miller, Dan
Miller, Gary
Miller, Jeff
Moran (KS)
Morella
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (FL)
NAYS--200
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (TX)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Luther
Lynch
Maloney (CT)
Markey
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Skelton
Slaughter
[[Page H6669]]
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (MS)
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOT VOTING--15
Bachus
Bonior
Borski
Callahan
Maloney (NY)
Mascara
McDermott
McKinney
Mink
Radanovich
Roukema
Stump
Thompson (CA)
Thurman
Young (AK)
{time} 1733
Messrs. BRADY of Pennsylvania, WU, and BAIRD changed their vote from
``yea'' to ``nay.''
Mr. GARY G. MILLER1 of California and Mr. HEFLEY changed their vote
from ``nay'' to ``yea.''
So the previous question was ordered.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. Simpson). The question is on the
resolution.
The resolution was agreed to.
A motion to reconsider was laid on the table.
____________________