[Congressional Record Volume 148, Number 147 (Thursday, November 14, 2002)]
[House]
[Pages H8794-H8801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ARMED FORCES TAX FAIRNESS ACT OF 2002
Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 609, I call up
the bill (H.R. 5063) to amend the Internal Revenue Code of 1986 to
provide a special rule for members of the uniformed services in
determining the exclusion of gain from the sale of a principal
residence and to restore the tax exempt status of death gratuity
payments to members of the uniformed services and ask for its immediate
consideration.
The Clerk read the title of the bill.
Motion Offered by Mr. Thomas
Mr. THOMAS. Mr. Speaker, I offer a motion.
The SPEAKER pro tempore (Mr. Simpson). The Clerk will designate the
motion.
The text of the motion is as follows:
A motion offered by Mr. Thomas that the House concur in
each of the Senate amendments with the respective amendment
printed in House Report 107-784, as follows:
Senate amendments:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Armed
Forces Tax Fairness Act of 2002''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; etc.
TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL
Sec. 101. Exclusion from gross income of certain death gratuity
payments.
Sec. 102. Exclusion of gain from sale of a principal residence by a
member of the uniformed services or the Foreign Service.
Sec. 103. Exclusion for amounts received under Department of Defense
Homeowners Assistance Program.
Sec. 104. Expansion of combat zone filing rules to contingency
operations.
Sec. 105. Above-the-line deduction for overnight travel expenses of
National Guard and Reserve members.
Sec. 106. Modification of membership requirement for exemption from tax
for certain veterans' organizations.
Sec. 107. Clarification of treatment of certain dependent care
assistance programs.
TITLE II--OTHER PROVISIONS
Sec. 201. Revision of tax rules on expatriation.
Sec. 202. Extension of IRS user fees.
Sec. 203. Partial payment of tax liability in installment agreements.
TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL
SEC. 101. EXCLUSION FROM GROSS INCOME OF CERTAIN DEATH
GRATUITY PAYMENTS.
(a) In General.--Subsection (b)(3) of section 134 (relating
to certain military benefits) is amended by adding at the end
the following new subparagraph:
``(C) Exception for death gratuity adjustments made by
law.--Subparagraph (A) shall not apply to any adjustment to
the amount of death gratuity payable under chapter 75 of
title 10, United States Code, which is pursuant to a
provision of law enacted after September 9, 1986.''.
(b) Conforming Amendment.--Subparagraph (A) of section
134(b)(3) is amended by striking ``subparagraph (B)'' and
inserting ``subparagraphs (B) and (C)''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to deaths occurring after September
10, 2001.
SEC. 102. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL
RESIDENCE BY A MEMBER OF THE UNIFORMED SERVICES
OR THE FOREIGN SERVICE.
(a) In General.--Subsection (d) of section 121 (relating to
exclusion of gain from sale of principal residence) is
amended by adding at the end the following new paragraph:
``(9) Members of uniformed services and foreign service.--
``(A) In general.--At the election of an individual with
respect to a property, the running of the 5-year period
described in subsection (a) with respect to such property
shall be suspended during any period that such individual or
such individual's spouse is serving on qualified official
extended duty as a member of the uniformed services or of the
Foreign Service of the United States.
``(B) Maximum period of suspension.--The 5-year period
described in subsection (a) shall not be extended more than
10 years by reason of subparagraph (A).
``(C) Qualified official extended duty.--For purposes of
this paragraph--
``(i) In general.--The term `qualified official extended
duty' means any extended duty while serving at a duty station
which is at least 50 miles from such property or while
residing under Government orders in Government quarters.
``(ii) Uniformed services.--The term `uniformed services'
has the meaning given such term by section 101(a)(5) of title
10, United States Code, as in effect on the date of the
enactment of this paragraph.
``(iii) Foreign service of the united states.--The term
`member of the Foreign Service of the United States' has the
meaning given the term `member of the Service' by paragraph
(1), (2), (3), (4), or (5) of section 103 of the Foreign
Service Act of 1980.
``(iv) Extended duty.--The term `extended duty' means any
period of duty pursuant to a call or order to such duty for a
period in excess of 90 days or for an indefinite period.
``(D) Special rules relating to election.--
``(i) Election limited to 1 property at a time.--An
election under subparagraph (A) with respect to any property
may not be made if such an election is in effect with respect
to any other property.
``(ii) Revocation of election.--An election under
subparagraph (A) may be revoked at any time.''.
(b) Effective Date; Special Rule.--
(1) Effective date.--The amendment made by this section
shall take effect as if included in the amendments made by
section 312 of the Taxpayer Relief Act of 1997.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendment made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.
SEC. 103. EXCLUSION FOR AMOUNTS RECEIVED UNDER DEPARTMENT OF
DEFENSE HOMEOWNERS ASSISTANCE PROGRAM.
(a) In General.--Section 132(a) (relating to the exclusion
from gross income of certain fringe benefits) is amended by
striking ``or'' at the end of paragraph (6), by striking the
period at the end of paragraph (7) and inserting ``, or'' and
by adding at the end the following new paragraph:
``(8) qualified military base realignment and closure
fringe.''.
(b) Qualified Military Base Realignment and Closure
Fringe.--Section 132 is amended by redesignating subsection
(n) as subsection (o) and by inserting after subsection (m)
the following new subsection:
``(n) Qualified Military Base Realignment and Closure
Fringe.--For purposes of this section, the term `qualified
military base realignment and closure fringe' means 1 or more
payments under the authority of section 1013 of the
Demonstration Cities and Metropolitan Development Act of 1966
(42 U.S.C. 3374) to offset the adverse effects on housing
values as a result of a military base realignment or
closure.''.
(c) Effective Date.--The amendments made by this section
shall apply to payments made after the date of the enactment
of this Act.
SEC. 104. EXPANSION OF COMBAT ZONE FILING RULES TO
CONTINGENCY OPERATIONS.
(a) In General.--Section 7508(a) (relating to time for
performing certain acts postponed by reason of service in
combat zone) is amended--
(1) by inserting ``or when deployed outside the United
States away from the individual's permanent duty station
while participating in an operation designated by the
Secretary of Defense as a contingency operation (as defined
in section 101(a)(13) of title 10, United States Code) or
which became such a contingency operation by operation of
law'' after ``section 112'',
(2) by inserting in the first sentence ``or at any time
during the period of such contingency operation'' after ``for
purposes of such section'',
(3) by inserting ``or operation'' after ``such an area'',
and
[[Page H8795]]
(4) by inserting ``or operation'' after ``such area''.
(b) Conforming Amendments.--
(1) Section 7508(d) is amended by inserting ``or
contingency operation'' after ``area''.
(2) The heading for section 7508 is amended by inserting
``OR CONTINGENCY OPERATION'' after ``COMBAT ZONE''.
(3) The item relating to section 7508 in the table of
sections for chapter 77 is amended by inserting ``or
contingency operation'' after ``combat zone''.
(c) Effective Date.--The amendments made by this section
shall apply to any period for performing an act which has not
expired before the date of the enactment of this Act.
SEC. 105. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT TRAVEL
EXPENSES OF NATIONAL GUARD AND RESERVE MEMBERS.
(a) Deduction Allowed.--Section 162 (relating to certain
trade or business expenses) is amended by redesignating
subsection (p) as subsection (q) and inserting after
subsection (o) the following new subsection:
``(p) Treatment of Expenses of Members of Reserve Component
of Armed Forces of the United States.--For purposes of
subsection (a)(2), in the case of an individual who performs
services as a member of a reserve component of the Armed
Forces of the United States at any time during the taxable
year, such individual shall be deemed to be away from home in
the pursuit of a trade or business for any period during
which such individual is away from home in connection with
such service.''.
(b) Deduction Allowed Whether or Not Taxpayer Elects To
Itemize.--Section 62(a)(2) (relating to certain trade and
business deductions of employees) is amended by adding at the
end the following new subparagraph:
``(E) Certain expenses of members of reserve components of
the armed forces of the united states.--The deductions
allowed by section 162 which consist of expenses, in amounts
not in excess of the rates for travel expenses (including per
diem in lieu of subsistence) authorized for employees of
agencies under subchapter I of chapter 57 of title 5, United
States Code, paid or incurred by the taxpayer in connection
with the performance of services by such taxpayer as a member
of a reserve component of the Armed Forces of the United
States.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2001.
SEC. 106. MODIFICATION OF MEMBERSHIP REQUIREMENT FOR
EXEMPTION FROM TAX FOR CERTAIN VETERANS'
ORGANIZATIONS.
(a) In General.--Subparagraph (B) of section 501(c)(19)
(relating to list of exempt organizations) is amended by
striking ``or widowers'' and inserting ``, widowers, or
ancestors or lineal descendants''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
SEC. 107. CLARIFICATION OF THE TREATMENT OF CERTAIN DEPENDENT
CARE ASSISTANCE PROGRAMS.
(a) In General.--Section 134(b) (defining qualified
military benefit) is amended by adding at the end the
following new paragraph:
``(4) Clarification of certain benefits.--For purposes of
paragraph (1), such term includes any dependent care
assistance program for any individual described in paragraph
(1)(A).''.
(b) Conforming Amendments.--
(1) Section 134(b)(3)(A) is amended by inserting ``and
paragraph (4)'' after ``subparagraph (B)''.
(2) Section 3121(a)(18) is amended by striking ``or 129''
and inserting ``, 129, or 134(b)(4)''.
(3) Section 3306(b)(13) is amended by striking ``or 129''
and inserting ``, 129, or 134(b)(4)''.
(4) Section 3401(a)(18) is amended by striking ``or 129''
and inserting ``, 129, or 134(b)(4)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.
(d) No Inference.--No inference may be drawn from the
amendments made by this section with respect to the tax
treatment of any amounts under the program described in
section 134(b)(4) of the Internal Revenue Code of 1986 (as
added by this section) for any taxable year beginning before
January 1, 2002.
TITLE II--OTHER PROVISIONS
SEC. 201. REVISION OF TAX RULES ON EXPATRIATION.
(a) In General.--Subpart A of part II of subchapter N of
chapter 1 is amended by inserting after section 877 the
following new section:
``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.
``(a) General Rules.--For purposes of this subtitle--
``(1) Mark to market.--Except as provided in subsections
(d) and (f), all property of a covered expatriate to whom
this section applies shall be treated as sold on the day
before the expatriation date for its fair market value.
``(2) Recognition of gain or loss.--In the case of any sale
under paragraph (1)--
``(A) notwithstanding any other provision of this title,
any gain arising from such sale shall be taken into account
for the taxable year of the sale, and
``(B) any loss arising from such sale shall be taken into
account for the taxable year of the sale to the extent
otherwise provided by this title, except that section 1091
shall not apply to any such loss.
Proper adjustment shall be made in the amount of any gain or
loss subsequently realized for gain or loss taken into
account under the preceding sentence.
``(3) Exclusion for certain gain.--
``(A) In general.--The amount which, but for this
paragraph, would be includible in the gross income of any
individual by reason of this section shall be reduced (but
not below zero) by $600,000. For purposes of this paragraph,
allocable expatriation gain taken into account under
subsection (f)(2) shall be treated in the same manner as an
amount required to be includible in gross income.
``(B) Cost-of-living adjustment.--
``(i) In general.--In the case of an expatriation date
occurring in any calendar year after 2002, the $600,000
amount under subparagraph (A) shall be increased by an amount
equal to--
``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year, determined by
substituting `calendar year 2001' for `calendar year 1992' in
subparagraph (B) thereof.
``(ii) Rounding rules.--If any amount after adjustment
under clause (i) is not a multiple of $1,000, such amount
shall be rounded to the next lower multiple of $1,000.
``(4) Election to continue to be taxed as united states
citizen.--
``(A) In general.--If a covered expatriate elects the
application of this paragraph--
``(i) this section (other than this paragraph and
subsection (i)) shall not apply to the expatriate, but
``(ii) in the case of property to which this section would
apply but for such election, the expatriate shall be subject
to tax under this title in the same manner as if the
individual were a United States citizen.
``(B) Requirements.--Subparagraph (A) shall not apply to an
individual unless the individual--
``(i) provides security for payment of tax in such form and
manner, and in such amount, as the Secretary may require,
``(ii) consents to the waiver of any right of the
individual under any treaty of the United States which would
preclude assessment or collection of any tax which may be
imposed by reason of this paragraph, and
``(iii) complies with such other requirements as the
Secretary may prescribe.
``(C) Election.--An election under subparagraph (A) shall
apply to all property to which this section would apply but
for the election and, once made, shall be irrevocable. Such
election shall also apply to property the basis of which is
determined in whole or in part by reference to the property
with respect to which the election was made.
``(b) Election To Defer Tax.--
``(1) In general.--If the taxpayer elects the application
of this subsection with respect to any property treated as
sold by reason of subsection (a), the payment of the
additional tax attributable to such property shall be
postponed until the due date of the return for the taxable
year in which such property is disposed of (or, in the case
of property disposed of in a transaction in which gain is not
recognized in whole or in part, until such other date as the
Secretary may prescribe).
``(2) Determination of tax with respect to property.--For
purposes of paragraph (1), the additional tax attributable to
any property is an amount which bears the same ratio to the
additional tax imposed by this chapter for the taxable year
solely by reason of subsection (a) as the gain taken into
account under subsection (a) with respect to such property
bears to the total gain taken into account under subsection
(a) with respect to all property to which subsection (a)
applies.
``(3) Termination of postponement.--No tax may be postponed
under this subsection later than the due date for the return
of tax imposed by this chapter for the taxable year which
includes the date of death of the expatriate (or, if earlier,
the time that the security provided with respect to the
property fails to meet the requirements of paragraph (4),
unless the taxpayer corrects such failure within the time
specified by the Secretary).
``(4) Security.--
``(A) In general.--No election may be made under paragraph
(1) with respect to any property unless adequate security is
provided to the Secretary with respect to such property.
``(B) Adequate security.--For purposes of subparagraph (A),
security with respect to any property shall be treated as
adequate security if--
``(i) it is a bond in an amount equal to the deferred tax
amount under paragraph (2) for the property, or
``(ii) the taxpayer otherwise establishes to the
satisfaction of the Secretary that the security is adequate.
``(5) Waiver of certain rights.--No election may be made
under paragraph (1) unless the taxpayer consents to the
waiver of any right under any treaty of the United States
which would preclude assessment or collection of any tax
imposed by reason of this section.
``(6) Elections.--An election under paragraph (1) shall
only apply to property described in the election and, once
made, is irrevocable. An election may be made under paragraph
(1) with respect to an interest in a trust with respect to
which gain is required to be recognized under subsection
(f)(1).
``(7) Interest.--For purposes of section 6601--
``(A) the last date for the payment of tax shall be
determined without regard to the election under this
subsection, and
``(B) section 6621(a)(2) shall be applied by substituting
`5 percentage points' for `3 percentage points' in
subparagraph (B) thereof.
``(c) Covered Expatriate.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
term `covered expatriate' means an expatriate.
[[Page H8796]]
``(2) Exceptions.--An individual shall not be treated as a
covered expatriate if--
``(A) the individual--
``(i) became at birth a citizen of the United States and a
citizen of another country and, as of the expatriation date,
continues to be a citizen of, and is taxed as a resident of,
such other country, and
``(ii) has not been a resident of the United States (as
defined in section 7701(b)(1)(A)(ii)) during the 5 taxable
years ending with the taxable year during which the
expatriation date occurs, or
``(B)(i) the individual's relinquishment of United States
citizenship occurs before such individual attains age 18\1/
2\, and
``(ii) the individual has been a resident of the United
States (as so defined) for not more than 5 taxable years
before the date of relinquishment.
``(d) Exempt Property; Special Rules for Pension Plans.--
``(1) Exempt property.--This section shall not apply to the
following:
``(A) United states real property interests.--Any United
States real property interest (as defined in section
897(c)(1)), other than stock of a United States real property
holding corporation which does not, on the day before the
expatriation date, meet the requirements of section
897(c)(2).
``(B) Specified property.--Any property or interest in
property not described in subparagraph (A) which the
Secretary specifies in regulations.
``(2) Special rules for certain retirement plans.--
``(A) In general.--If a covered expatriate holds on the day
before the expatriation date any interest in a retirement
plan to which this paragraph applies--
``(i) such interest shall not be treated as sold for
purposes of subsection (a)(1), but
``(ii) an amount equal to the present value of the
expatriate's nonforfeitable accrued benefit shall be treated
as having been received by such individual on such date as a
distribution under the plan.
``(B) Treatment of subsequent distributions.--In the case
of any distribution on or after the expatriation date to or
on behalf of the covered expatriate from a plan from which
the expatriate was treated as receiving a distribution under
subparagraph (A), the amount otherwise includible in gross
income by reason of the subsequent distribution shall be
reduced by the excess of the amount includible in gross
income under subparagraph (A) over any portion of such amount
to which this subparagraph previously applied.
``(C) Treatment of subsequent distributions by plan.--For
purposes of this title, a retirement plan to which this
paragraph applies, and any person acting on the plan's
behalf, shall treat any subsequent distribution described in
subparagraph (B) in the same manner as such distribution
would be treated without regard to this paragraph.
``(D) Applicable plans.--This paragraph shall apply to--
``(i) any qualified retirement plan (as defined in section
4974(c)),
``(ii) an eligible deferred compensation plan (as defined
in section 457(b)) of an eligible employer described in
section 457(e)(1)(A), and
``(iii) to the extent provided in regulations, any foreign
pension plan or similar retirement arrangements or programs.
``(e) Definitions.--For purposes of this section--
``(1) Expatriate.--The term `expatriate' means--
``(A) any United States citizen who relinquishes
citizenship, and
``(B) any long-term resident of the United States who--
``(i) ceases to be a lawful permanent resident of the
United States (within the meaning of section 7701(b)(6)), or
``(ii) commences to be treated as a resident of a foreign
country under the provisions of a tax treaty between the
United States and the foreign country and who does not waive
the benefits of such treaty applicable to residents of the
foreign country.
``(2) Expatriation date.--The term `expatriation date'
means--
``(A) the date an individual relinquishes United States
citizenship, or
``(B) in the case of a long-term resident of the United
States, the date of the event described in clause (i) or (ii)
of paragraph (1)(B).
``(3) Relinquishment of citizenship.--A citizen shall be
treated as relinquishing United States citizenship on the
earliest of--
``(A) the date the individual renounces such individual's
United States nationality before a diplomatic or consular
officer of the United States pursuant to paragraph (5) of
section 349(a) of the Immigration and Nationality Act (8
U.S.C. 1481(a)(5)),
``(B) the date the individual furnishes to the United
States Department of State a signed statement of voluntary
relinquishment of United States nationality confirming the
performance of an act of expatriation specified in paragraph
(1), (2), (3), or (4) of section 349(a) of the Immigration
and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
``(C) the date the United States Department of State issues
to the individual a certificate of loss of nationality, or
``(D) the date a court of the United States cancels a
naturalized citizen's certificate of naturalization.
Subparagraph (A) or (B) shall not apply to any individual
unless the renunciation or voluntary relinquishment is
subsequently approved by the issuance to the individual of a
certificate of loss of nationality by the United States
Department of State.
``(4) Long-term resident.--The term `long-term resident'
has the meaning given to such term by section 877(e)(2).
``(f) Special Rules Applicable to Beneficiaries' Interests
in Trust.--
``(1) In general.--Except as provided in paragraph (2), if
an individual is determined under paragraph (3) to hold an
interest in a trust on the day before the expatriation date--
``(A) the individual shall not be treated as having sold
such interest,
``(B) such interest shall be treated as a separate share in
the trust, and
``(C)(i) such separate share shall be treated as a separate
trust consisting of the assets allocable to such share,
``(ii) the separate trust shall be treated as having sold
its assets on the day before the expatriation date for their
fair market value and as having distributed all of its assets
to the individual as of such time, and
``(iii) the individual shall be treated as having
recontributed the assets to the separate trust.
Subsection (a)(2) shall apply to any income, gain, or loss of
the individual arising from a distribution described in
subparagraph (C)(ii). In determining the amount of such
distribution, proper adjustments shall be made for
liabilities of the trust allocable to an individual's share
in the trust.
``(2) Special rules for interests in qualified trusts.--
``(A) In general.--If the trust interest described in
paragraph (1) is an interest in a qualified trust--
``(i) paragraph (1) and subsection (a) shall not apply, and
``(ii) in addition to any other tax imposed by this title,
there is hereby imposed on each distribution with respect to
such interest a tax in the amount determined under
subparagraph (B).
``(B) Amount of tax.--The amount of tax under subparagraph
(A)(ii) shall be equal to the lesser of--
``(i) the highest rate of tax imposed by section 1(e) for
the taxable year which includes the day before the
expatriation date, multiplied by the amount of the
distribution, or
``(ii) the balance in the deferred tax account immediately
before the distribution determined without regard to any
increases under subparagraph (C)(ii) after the 30th day
preceding the distribution.
``(C) Deferred tax account.--For purposes of subparagraph
(B)(ii)--
``(i) Opening balance.--The opening balance in a deferred
tax account with respect to any trust interest is an amount
equal to the tax which would have been imposed on the
allocable expatriation gain with respect to the trust
interest if such gain had been included in gross income under
subsection (a).
``(ii) Increase for interest.--The balance in the deferred
tax account shall be increased by the amount of interest
determined (on the balance in the account at the time the
interest accrues), for periods after the 90th day after the
expatriation date, by using the rates and method applicable
under section 6621 for underpayments of tax for such periods,
except that section 6621(a)(2) shall be applied by
substituting `5 percentage points' for `3 percentage points'
in subparagraph (B) thereof.
``(iii) Decrease for taxes previously paid.--The balance in
the tax deferred account shall be reduced--
``(I) by the amount of taxes imposed by subparagraph (A) on
any distribution to the person holding the trust interest,
and
``(II) in the case of a person holding a nonvested
interest, to the extent provided in regulations, by the
amount of taxes imposed by subparagraph (A) on distributions
from the trust with respect to nonvested interests not held
by such person.
``(D) Allocable expatriation gain.--For purposes of this
paragraph, the allocable expatriation gain with respect to
any beneficiary's interest in a trust is the amount of gain
which would be allocable to such beneficiary's vested and
nonvested interests in the trust if the beneficiary held
directly all assets allocable to such interests.
``(E) Tax deducted and withheld.--
``(i) In general.--The tax imposed by subparagraph (A)(ii)
shall be deducted and withheld by the trustees from the
distribution to which it relates.
``(ii) Exception where failure to waive treaty rights.--If
an amount may not be deducted and withheld under clause (i)
by reason of the distributee failing to waive any treaty
right with respect to such distribution--
``(I) the tax imposed by subparagraph (A)(ii) shall be
imposed on the trust and each trustee shall be personally
liable for the amount of such tax, and
``(II) any other beneficiary of the trust shall be entitled
to recover from the distributee the amount of such tax
imposed on the other beneficiary.
``(F) Disposition.--If a trust ceases to be a qualified
trust at any time, a covered expatriate disposes of an
interest in a qualified trust, or a covered expatriate
holding an interest in a qualified trust dies, then, in lieu
of the tax imposed by subparagraph (A)(ii), there is hereby
imposed a tax equal to the lesser of--
``(i) the tax determined under paragraph (1) as if the day
before the expatriation date were the date of such cessation,
disposition, or death, whichever is applicable, or
``(ii) the balance in the tax deferred account immediately
before such date.
Such tax shall be imposed on the trust and each trustee shall
be personally liable for the amount of such tax and any other
beneficiary of the trust shall be entitled to recover from
the covered expatriate or the estate the amount of such tax
imposed on the other beneficiary.
``(G) Definitions and special rules.--For purposes of this
paragraph--
[[Page H8797]]
``(i) Qualified trust.--The term `qualified trust' means a
trust which is described in section 7701(a)(30)(E).
``(ii) Vested interest.--The term `vested interest' means
any interest which, as of the day before the expatriation
date, is vested in the beneficiary.
``(iii) Nonvested interest.--The term `nonvested interest'
means, with respect to any beneficiary, any interest in a
trust which is not a vested interest. Such interest shall be
determined by assuming the maximum exercise of discretion in
favor of the beneficiary and the occurrence of all
contingencies in favor of the beneficiary.
``(iv) Adjustments.--The Secretary may provide for such
adjustments to the bases of assets in a trust or a deferred
tax account, and the timing of such adjustments, in order to
ensure that gain is taxed only once.
``(v) Coordination with retirement plan rules.--This
subsection shall not apply to an interest in a trust which is
part of a retirement plan to which subsection (d)(2) applies.
``(3) Determination of beneficiaries' interest in trust.--
``(A) Determinations under paragraph (1).--For purposes of
paragraph (1), a beneficiary's interest in a trust shall be
based upon all relevant facts and circumstances, including
the terms of the trust instrument and any letter of wishes or
similar document, historical patterns of trust distributions,
and the existence of and functions performed by a trust
protector or any similar adviser.
``(B) Other determinations.--For purposes of this section--
``(i) Constructive ownership.--If a beneficiary of a trust
is a corporation, partnership, trust, or estate, the
shareholders, partners, or beneficiaries shall be deemed to
be the trust beneficiaries for purposes of this section.
``(ii) Taxpayer return position.--A taxpayer shall clearly
indicate on its income tax return--
``(I) the methodology used to determine that taxpayer's
trust interest under this section, and
``(II) if the taxpayer knows (or has reason to know) that
any other beneficiary of such trust is using a different
methodology to determine such beneficiary's trust interest
under this section.
``(g) Termination of Deferrals, Etc.--In the case of any
covered expatriate, notwithstanding any other provision of
this title--
``(1) any period during which recognition of income or gain
is deferred shall terminate on the day before the
expatriation date, and
``(2) any extension of time for payment of tax shall cease
to apply on the day before the expatriation date and the
unpaid portion of such tax shall be due and payable at the
time and in the manner prescribed by the Secretary.
``(h) Imposition of Tentative Tax.--
``(1) In general.--If an individual is required to include
any amount in gross income under subsection (a) for any
taxable year, there is hereby imposed, immediately before the
expatriation date, a tax in an amount equal to the amount of
tax which would be imposed if the taxable year were a short
taxable year ending on the expatriation date.
``(2) Due date.--The due date for any tax imposed by
paragraph (1) shall be the 90th day after the expatriation
date.
``(3) Treatment of tax.--Any tax paid under paragraph (1)
shall be treated as a payment of the tax imposed by this
chapter for the taxable year to which subsection (a) applies.
``(4) Deferral of tax.--The provisions of subsection (b)
shall apply to the tax imposed by this subsection to the
extent attributable to gain includible in gross income by
reason of this section.
``(i) Special Liens for Deferred Tax Amounts.--
``(1) Imposition of lien.--
``(A) In general.--If a covered expatriate makes an
election under subsection (a)(4) or (b) which results in the
deferral of any tax imposed by reason of subsection (a), the
deferred amount (including any interest, additional amount,
addition to tax, assessable penalty, and costs attributable
to the deferred amount) shall be a lien in favor of the
United States on all property of the expatriate located in
the United States (without regard to whether this section
applies to the property).
``(B) Deferred amount.--For purposes of this subsection,
the deferred amount is the amount of the increase in the
covered expatriate's income tax which, but for the election
under subsection (a)(4) or (b), would have occurred by reason
of this section for the taxable year including the
expatriation date.
``(2) Period of lien.--The lien imposed by this subsection
shall arise on the expatriation date and continue until--
``(A) the liability for tax by reason of this section is
satisfied or has become unenforceable by reason of lapse of
time, or
``(B) it is established to the satisfaction of the
Secretary that no further tax liability may arise by reason
of this section.
``(3) Certain rules apply.--The rules set forth in
paragraphs (1), (3), and (4) of section 6324A(d) shall apply
with respect to the lien imposed by this subsection as if it
were a lien imposed by section 6324A.
``(j) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''.
(b) Inclusion in Income of Gifts and Bequests Received by
United States Citizens and Residents From Expatriates.--
Section 102 (relating to gifts, etc. not included in gross
income) is amended by adding at the end the following new
subsection:
``(d) Gifts and Inheritances From Covered Expatriates.--
``(1) In general.--Subsection (a) shall not exclude from
gross income the value of any property acquired by gift,
bequest, devise, or inheritance from a covered expatriate
after the expatriation date. For purposes of this subsection,
any term used in this subsection which is also used in
section 877A shall have the same meaning as when used in
section 877A.
``(2) Exceptions for transfers otherwise subject to estate
or gift tax.--Paragraph (1) shall not apply to any property
if either--
``(A) the gift, bequest, devise, or inheritance is--
``(i) shown on a timely filed return of tax imposed by
chapter 12 as a taxable gift by the covered expatriate, or
``(ii) included in the gross estate of the covered
expatriate for purposes of chapter 11 and shown on a timely
filed return of tax imposed by chapter 11 of the estate of
the covered expatriate, or
``(B) no such return was timely filed but no such return
would have been required to be filed even if the covered
expatriate were a citizen or long-term resident of the United
States.''.
(c) Definition of Termination of United States
Citizenship.--Section 7701(a) is amended by adding at the end
the following new paragraph:
``(48) Termination of united states citizenship.--
``(A) In general.--An individual shall not cease to be
treated as a United States citizen before the date on which
the individual's citizenship is treated as relinquished under
section 877A(e)(3).
``(B) Dual citizens.--Under regulations prescribed by the
Secretary, subparagraph (A) shall not apply to an individual
who became at birth a citizen of the United States and a
citizen of another country.''.
(d) Ineligibility for Visa or Admission To United States.--
(1) In general.--Section 212(a)(10)(E) of the Immigration
and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to
read as follows:
``(E) Former citizens not in compliance with expatriation
revenue provisions.--Any alien who is a former citizen of the
United States who relinquishes United States citizenship
(within the meaning of section 877A(e)(3) of the Internal
Revenue Code of 1986) and who is not in compliance with
section 877A of such Code (relating to expatriation).''.
(2) Availability of information.--
(A) In general.--Section 6103(l) (relating to disclosure of
returns and return information for purposes other than tax
administration) is amended by adding at the end the following
new paragraph:
``(18) Disclosure to deny visa or admission to certain
expatriates.--Upon written request of the Attorney General or
the Attorney General's delegate, the Secretary shall disclose
whether an individual is in compliance with section 877A (and
if not in compliance, any items of noncompliance) to officers
and employees of the Federal agency responsible for
administering section 212(a)(10)(E) of the Immigration and
Nationality Act solely for the purpose of, and to the extent
necessary in, administering such section 212(a)(10)(E).''.
(B) Safeguards.--Section 6103(p)(4) (relating to
safeguards) is amended by striking ``or (17)'' each place it
appears and inserting ``(17), or (18)''.
(3) Effective date.--The amendments made by this subsection
shall apply to individuals who relinquish United States
citizenship on or after the date of the enactment of this
Act.
(e) Conforming Amendments.--
(1) Section 877 is amended by adding at the end the
following new subsection:
``(g) Application.--This section shall not apply to an
expatriate (as defined in section 877A(e)) whose expatriation
date (as so defined) occurs on or after September 12,
2002.''.
(2) Section 2107 is amended by adding at the end the
following new subsection:
``(f) Application.--This section shall not apply to any
expatriate subject to section 877A.''.
(3) Section 2501(a)(3) is amended by adding at the end the
following new subparagraph:
``(F) Application.--This paragraph shall not apply to any
expatriate subject to section 877A.''.
(4)(A) Paragraph (1) of section 6039G(d) is amended by
inserting ``or 877A'' after ``section 877''.
(B) The second sentence of section 6039G(e) is amended by
inserting ``or who relinquishes United States citizenship
(within the meaning of section 877A(e)(3))'' after
``877(a))''.
(C) Section 6039G(f) is amended by inserting ``or
877A(e)(2)(B)'' after ``877(e)(1)''.
(f) Clerical Amendment.--The table of sections for subpart
A of part II of subchapter N of chapter 1 is amended by
inserting after the item relating to section 877 the
following new item:
``Sec. 877A. Tax responsibilities of expatriation.''.
(g) Effective Date.--
(1) In general.--Except as provided in this subsection, the
amendments made by this section shall apply to expatriates
(within the meaning of section 877A(e) of the Internal
Revenue Code of 1986, as added by this section) whose
expatriation date (as so defined) occurs on or after
September 12, 2002.
(2) Gifts and bequests.--Section 102(d) of the Internal
Revenue Code of 1986 (as added by subsection (b)) shall apply
to gifts and bequests received on or after September 12,
2002, from an individual or the estate of an individual whose
expatriation date (as so defined) occurs after such date.
(3) Due date for tentative tax.--The due date under section
877A(h)(2) of the Internal Revenue Code of 1986, as added by
this section, shall in no event occur before the 90th day
after the date of the enactment of this Act.
[[Page H8798]]
SEC. 202. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.
(a) In General.--Chapter 77 (relating to miscellaneous
provisions) is amended by adding at the end the following new
section:
``SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.
``(a) General Rule.--The Secretary shall establish a
program requiring the payment of user fees for--
``(1) requests to the Internal Revenue Service for ruling
letters, opinion letters, and determination letters, and
``(2) other similar requests.
``(b) Program Criteria.--
``(1) In general.--The fees charged under the program
required by subsection (a)--
``(A) shall vary according to categories (or subcategories)
established by the Secretary,
``(B) shall be determined after taking into account the
average time for (and difficulty of) complying with requests
in each category (and subcategory), and
``(C) shall be payable in advance.
``(2) Exemptions, etc.--
``(A) In general.--The Secretary shall provide for such
exemptions (and reduced fees) under such program as the
Secretary determines to be appropriate.
``(B) Exemption for certain requests regarding pension
plans.--The Secretary shall not require payment of user fees
under such program for requests for determination letters
with respect to the qualified status of a pension benefit
plan maintained solely by 1 or more eligible employers or any
trust which is part of the plan. The preceding sentence shall
not apply to any request--
``(i) made after the later of--
``(I) the fifth plan year the pension benefit plan is in
existence, or
``(II) the end of any remedial amendment period with
respect to the plan beginning within the first 5 plan years,
or
``(ii) made by the sponsor of any prototype or similar plan
which the sponsor intends to market to participating
employers.
``(C) Definitions and special rules.--For purposes of
subparagraph (B)--
``(i) Pension benefit plan.--The term `pension benefit
plan' means a pension, profit-sharing, stock bonus, annuity,
or employee stock ownership plan.
``(ii) Eligible employer.--The term `eligible employer'
means an eligible employer (as defined in section
408(p)(2)(C)(i)(I)) which has at least 1 employee who is not
a highly compensated employee (as defined in section 414(q))
and is participating in the plan. The determination of
whether an employer is an eligible employer under
subparagraph (B) shall be made as of the date of the request
described in such subparagraph.
``(iii) Determination of average fees charged.--For
purposes of any determination of average fees charged, any
request to which subparagraph (B) applies shall not be taken
into account.
``(3) Average fee requirement.--The average fee charged
under the program required by subsection (a) shall not be
less than the amount determined under the following table:
Average
``Category Fee
Employee plan ruling and opinion............................$250 ....
Exempt organization ruling..................................$350 ....
Employee plan determination.................................$300 ....
Exempt organization determination...........................$275 ....
Chief counsel ruling........................................$200.....
``(c) Termination.--No fee shall be imposed under this
section with respect to requests made after September 30,
2012.''.
(b) Conforming Amendments.--
(1) The table of sections for chapter 77 is amended by
adding at the end the following new item:
``Sec. 7527. Internal Revenue Service user fees.''.
(2) Section 10511 of the Revenue Act of 1987 is repealed.
(3) Section 620 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is repealed.
(c) Limitations.--Notwithstanding any other provision of
law, any fees collected pursuant to section 7527 of the
Internal Revenue Code of 1986, as added by subsection (a),
shall not be expended by the Internal Revenue Service unless
provided by an appropriations Act.
(d) Effective Date.--The amendments made by this section
shall apply to requests made after the date of the enactment
of this Act.
SEC. 203. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALLMENT
AGREEMENTS.
(a) In General.--
(1) Section 6159(a) (relating to authorization of
agreements) is amended--
(A) by striking ``satisfy liability for payment of'' and
inserting ``make payment on'', and
(B) by inserting ``full or partial'' after ``facilitate''.
(2) Section 6159(c) (relating to Secretary required to
enter into installment agreements in certain cases) is
amended in the matter preceding paragraph (1) by inserting
``full'' before ``payment''.
(b) Requirement To Review Partial Payment Agreements Every
Two Years.--Section 6159 is amended by redesignating
subsections (d) and (e) as subsections (e) and (f),
respectively, and inserting after subsection (c) the
following new subsection:
``(d) Secretary Required To Review Installment Agreements
for Partial Collection Every Two Years.--In the case of an
agreement entered into by the Secretary under subsection (a)
for partial collection of a tax liability, the Secretary
shall review the agreement at least once every 2 years.''.
(c) Effective Date.--The amendments made by this section
shall apply to agreements entered into on or after the date
of the enactment of this Act.
Amend the title so as to read: ``An Act to amend the
Internal Revenue Code of 1986 to improve tax equity for
military personnel, and for other purposes.''.
Amendment printed in House Report 107-784:
Strike all after the enacting clause and insert the
following:
Section 1. Section 114 of Public Law 107-229 is amended by
striking ``the date specified in section 107(c) of this joint
resolution'' and inserting ``March 31, 2003''.
Sec. 2. (a) In General.--The Temporary Extended
Unemployment Compensation Act of 2002 (26 U.S.C. 3304 note)
is amended by adding at the end the following:
``SEC. 210. EXTENSION OF PROGRAM IN HIGH UNEMPLOYMENT STATES.
``(a) In General.--Notwithstanding section 208(2), an
agreement entered into under this title shall apply to weeks
of unemployment beginning after December 28, 2002, and ending
before February 2, 2003, but only as provided in this section
and section 211.
``(b) New Account.--If, at any time during the period
described in subsection (a), an individual's State is in an
extended benefit period (as determined under section
203(c)(2)), and such individual meets the requirements of
section 202(b)-(c), such State shall establish an account
under this section for such individual (to be available
beginning with the individual's first week of unemployment
within such period as to which both of those conditions are
met) in an amount equal to the amount determined in
accordance with section 203(b).
``(c) Eligibility for Payments.--In the case of an
individual for whom an account is established under
subsection (b)--
``(1) temporary extended unemployment compensation shall be
payable for any week of unemployment described in subsection
(a) for which such individual would qualify if the criteria
in effect for the week ending on December 28, 2002, were
applied (and section 202(d)(3) were disregarded); and
``(2) any temporary extended unemployment compensation
payable to an individual under this section shall be payable
only out of the account established for such individual under
subsection (b).
``(d) Ineligible Individuals.--Notwithstanding any other
provision of this section, no account under subsection (b)
shall be established for the benefit of an individual for
whom an account was established under section 203, if--
``(1) such account was at any time augmented in the manner
described in section 203(c); and
``(2) such account (as so augmented)--
``(A) was exhausted before December 29, 2002; or
``(B) remains available, for weeks beginning on or after
December 29, 2002, by virtue of section 211.
``SEC. 211. PHASE-OUT PROVISIONS.
``(a) In General.--In the case of an individual who is
receiving temporary extended unemployment compensation for a
week of unemployment ending on December 28, 2002, the
provisions of this title and of any agreement then in effect
shall be applied in a manner such that any amounts remaining
in an account established for such individual under section
203 as of that date shall continue to remain available to the
same extent and in the same manner as if section 208(2) had
been amended by striking `January 1' and inserting `February
2'.
``(b) Coordination Provision.--After any amounts (in an
account established under section 203) remaining available
for the benefit of an individual by virtue of subsection (a)
are exhausted, section 210 shall apply to such individual in
accordance with its terms.
``(c) Rule of Construction.--Nothing in this title shall be
considered to permit or require the payment of any amount,
out of an account established under section 203 or 210, for
any week of unemployment ending after February 1, 2003.''.
(b) Clerical Amendment.--The table of contents of Public
Law 107-147 is amended by inserting after the item relating
to section 209 the following:
``210. Extension of program in high unemployment States.
``211. Phase-out provisions.''.
Sec. 3. Section 1848(i)(1)(C) of the Social Security Act
(42 U.S.C. 1395w-4(i)(1)(C)) is amended to read as follows:
``(C) the determination of conversion factors under
subsection (d), including without limitation a prospective
redetermination of the sustainable growth rates for any or
all previous fiscal years,''.
Amend the title so as to read as follows: ``An Act to make
technical amendments to the Social Security Act and related
Acts.''.
The SPEAKER pro tempore. Pursuant to House Resolution 609, the
gentleman from California (Mr. Thomas) and the gentleman from
California (Mr. Stark) each will control 30 minutes.
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that the time
allotted be 30 minutes in its entirety, divided equally between myself
and the gentleman from California (Mr. Stark).
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
The SPEAKER pro tempore. The gentleman from California (Mr. Thomas)
[[Page H8799]]
and the gentleman from California (Mr. Stark) each will control 15
minutes.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume. I
want to thank the gentleman from California for the courtesy so that we
can expeditiously examine this very modest bill. As we discussed under
the rule earlier, there are three provisions in the bill: one, to
correct a flaw dealing with the continuation of TANF, or welfare;
secondly, to make sure that the unemployment program, in a modest way,
continues until the House reconvenes in the 108th Congress; and the
third is to provide the administration with some legal protection if
they decide to make some decisions which would allow some adjustments
in the Medicare program.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
(Mr. STARK asked and was given permission to revise and extend his
remarks.)
Mr. STARK. Mr. Speaker, I suspect that many people will vote for this
bill, but it cannot go unnoticed that the bill does not do nearly
enough. It is a day late and a dollar short. It does not really improve
Medicare and deal with many of the providers. It merely gives the
administration, hopefully, the right to correct a glitch in the way
physicians are reimbursed. There is some great discussion going on that
they may already have that. The fight seems to be that correcting the
physician glitch will cost 43 billion bucks and the question is, Do we
get billed again for that or does the administration? And does it fit,
or increase the deficit or does it not? So there is no guarantee that
your physician friends will get their problem corrected. There is some
guarantee that the hospitals, nursing homes, rural hospitals, teaching
hospitals and the uninsured will absolutely get nothing.
As to the welfare reform bill, there may be a lot of blame as to why
we have not reauthorized it; but in any event, since 1996, the day it
was passed, the funding for welfare reform, or welfare payments in this
country has dropped by 11 percent. We are not doing anything to
increase it and that is tragic. Welfare reform is more than a benefit
check. It is child care and job training; it is education, the very
foundations of self-sufficiency.
It is too bad now, particularly that we do not worry about PAYGO
anymore, that we cannot at least deal with the millions of poor
families even a tenth as well as we deal with the very rich in the tax
cuts that we have given them. Fourteen million families eligible for
child care assistance do not receive it and millions of Americans out
of work are struggling. We are not doing an adequate job in
unemployment, where this bill really falls down. I will turn soon to my
colleague from Maryland, the ranking member of the Subcommittee on
Human Resources, to explain that to you. We have spent trillions of
dollars in tax cuts for the rich and we are tonight going to talk about
a mere billion dollars to extend unemployment benefits for only a small
portion of the Americans who are struggling. Again, it is not fair and
it is not adequate.
There was a time when we in Congress could hold up our heads high and
say that we took care of all Americans who were unable to fend for
themselves. We are not even doing that. I think that it is tragic that
here we are in the last hours of this Congress and we are attending to
something that I do not think any bill at this time could correct all
the problems. It is kind of a sad commentary that we have come this far
and left so many people impoverished and unaided by a government that
has given so much to the wealthy.
Mr. Speaker, I reserve the balance of my time.
Mr. THOMAS. Mr. Speaker it is my pleasure to yield 1 minute to the
gentleman from California (Mr. Herger), the chairman of the
Subcommittee on Human Resources of the Committee on Ways and Means.
Mr. HERGER. Mr. Speaker, I rise in support of H.R. 5063, as amended.
This bill would temporarily extend unemployment benefits for an
additional 5 weeks. It also will extend the funding and rules for the
Nation's welfare reform program through March 31, 2003, allowing us
additional time to reauthorize the historic 1996 law.
Mr. Speaker, we must keep the pressure on to reauthorize welfare
reform for 5 years as quickly as possible. This will be our goal in the
next Congress, and we look forward to working with both Republicans and
Democrats to get this job done.
I urge my colleagues to support this bill.
Mr. STARK. Mr. Speaker, I am pleased to yield 3 minutes to the
distinguished gentleman from Maryland (Mr. Cardin), the ranking member
of the Subcommittee on Human Resources.
Mr. CARDIN. Mr. Speaker, let me thank the gentleman from California
for yielding me this time. As the chairman of the Committee on Ways and
Means has said, this is a modest bill that moves forward in three areas
in a very modest way. It is the last train out of the station, and I
would urge my colleagues to support the bill.
Mr. Speaker, it does deal, as the chairman of the Subcommittee on
Human Resources said, with a 3-month extension of TANF. That is better
than what was in the continuing resolution. It guarantees that our
States will receive at least their first quarter payments. That is
important. But I know we are all disappointed that we were unable in
this Congress to reauthorize the program for 5 years. Certainly we
wanted to reauthorize it for more than 3 months.
Secondly, the gentleman from California (Mr. Stark) has already
commented on the Medicare provisions. We hope that the provisions here
will help the physician reimbursement system. But we are all
disappointed that we were unable to complete the structure changes for
skilled nursing facilities, rehabilitation therapists, hospitals, home
health. There were provisions in here that were noncontroversial for
our military. None of that was able to get accomplished in this
Congress, and I think we are all very disappointed that we were unable
to do that.
But, Mr. Speaker, I want to talk about the third area, unemployment
insurance. Yes, there is a modest improvement in the underlying
legislation, but I think we should be very disappointed that we have
done nothing at all to help the 1.8 million Americans who will have
exhausted their unemployment insurance benefits before we will have an
opportunity to revisit this program again next year. That is
particularly disappointing when you recognize the fact that in every
prior recession, in a bipartisan way, we have extended Federal
unemployment insurance benefits as a safety net to those who are hurt
through the recession through no fault of their own.
We have $25 billion in the Federal unemployment trust account. The
money is there. The number of people suffering from long-term
unemployment has doubled over the last year. We know that if we provide
assistance that money will get back into the economy quickly and help
us in the recovery. That is why in every prior recession, we have been
very clear in providing additional help through the Federal
unemployment insurance system. Yet in this recession we have failed. I
think that is extremely disappointing, and I would hope that we could
have done better.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the
gentleman from Pennsylvania (Mr. English), a member of the Committee on
Ways and Means.
Mr. ENGLISH. Mr. Speaker, more than 800,000 unemployed workers
throughout the U.S. and over 35,000 in Pennsylvania alone are faced
with the grim reality that their unemployment benefits will end just 3
days after Christmas. With the economy in such bad straits and so many
working families suffering, we cannot stand by and let the Grinch steal
Christmas from the unemployed whose holidays are already constrained by
an extended period of unemployment. This cutoff is hanging like a sword
of Damocles, like a Grinch, over these families; and we need to act
today.
This bill removes the December 28 cutoff on benefits. It allows more
than 800,000 unemployed workers nationwide who will already be
receiving extended benefits to temporarily continue receiving benefits
when the current program expires. This bill extends federally funded
benefits by up to 5 weeks
[[Page H8800]]
per individual. This bill continues through January 2003 the current
availability of additional weeks of federally funded extended benefits
in certain high-unemployment States. As a longtime supporter of this
issue, I feel it critical that we move now to provide extended
unemployment benefits to these families.
I urge my colleagues to join me in standing up to the Grinch and
making sure that America's unemployed continue to receive benefits
after Christmas.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Levin), who understands that while the opposition is
willing to spend over a trillion dollars in tax cuts to the wealthy,
they are unwilling to make good on their earlier promise to spend a
thousandth of that amount to insure nursing home patients.
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
{time} 2045
Mr. LEVIN. Mr. Speaker, first on unemployment comp, the gentleman
from Pennsylvania (Mr. English), about 35,000 will be benefitted, at
the most, 5 weeks. More than twice that will face Christmas having
exhausted their benefits and get no help through extended benefits
because of the failure of this Congress to act more than twice. So this
is not really a modest program. It is really a flawed program and an
inferior one because 800,000 will get several weeks. Over 1,800,000 who
will exhausted their benefits will get zero, and it will be simply
because of the accident of when they exhausted their benefits. If they
exhausted them earlier or later, they come up with zero, and that is
not the way this country should respond to the needs of people who are
unemployed through no fault of their own.
Let me just finish by saying something about this approach in terms
of physicians. We needed to do something, but what you are doing is
essentially more appearance than it is reality in terms of the cost.
You do not come forth here with a proposal that addresses this
directly, which will cost $20 to $60 billion over 10 years. You do not
want CBO to score it. So you come forth and give carte blanche to the
administration to do what they say they cannot do anyway, and because
it would be done administratively it would not be scored, but it will
come out of the budget and will add $20 to $80 billion in the deficit
over 10 years, and it will not address the other needs of other
providers. That really is one modest approach. It is a flawed and
inferior approach. It forces us perhaps to vote yes, but realizing the
terrible, terrible shortcomings of this approach.
Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Washington (Ms. Dunn), a member of the Committee on Ways and Means.
(Ms. DUNN asked and was given permission to revise and extend her
remarks.)
Ms. DUNN. Mr. Speaker, as we all know, the extended unemployment
benefits we passed last year are due to expire on December 28. Without
an extension thousands of dislocated workers will lose the unemployment
benefits they need to make ends meet as they search for a job. The
problem is extenuated in areas like Washington State, where
unemployment rates continue to be high and jobs are very tough to find.
Extending the Federal unemployment benefits for an additional 5 weeks
will help about 45,400 dislocated workers living in Washington State
alone. It is the least that we in Congress can do before adjourning for
the year to ensure that every family has a happy holiday season. This
bill is a targeted approach to help individuals who need it the most.
It is a step toward providing temporary assistance at a time when our
country is getting back on the track to recovery.
I urge my colleagues to vote for this important bill, and I hope that
the other body will adopt this bill before leaving for the year.
Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from
Washington (Mr. McDermott).
Mr. McDERMOTT. Mr. Speaker, this is a really interesting bill because
it really kind of lays it out cold-bloodedly. The President, or the
White House, has had 2 million jobs lost since they came into office,
and they do not care. When the White House announced their special
interests for this session, they said we want homeland security, we
want Federal judges and we want terrorism insurance. Not one single
word about the economy.
I come from a State where there is 7 percent unemployment. The
Northwest is the highest in the country. And anybody who exhausts their
benefits before January 1 gets nothing. Oh, excuse me. They get 5 weeks
after the first of the year. That is all they get is 5 weeks. As the
gentleman from Maryland (Mr. Cardin) has already said, we have $25
billion sitting in a fund to deal with this, and you come out here with
a 5-week plan. I mean Merry Christmas, folks. Are you going to send
turkeys around at Thanksgiving also as part of this program? Why can
you not ever admit that you fouled up the economy and the people you
have put out of work you are unwilling to take care of when you have
the money sitting there? It is sitting there. I cannot understand how
you are going to go home to people and say, well, we are sorry, we will
be back in on January 7 and we will pass something real quick; so do
not worry, do not worry, do not worry. I mean you are saying at
Christmas time to people you are not going to take care of them.
Our unemployment in this country, we have gone up 25 percent in long-
term unemployment in the last 6 months, and there is no question
between now and February an estimated 1.8 million people are going to
lose their unemployment insurance, and you are not doing anything for
them, just a little tiny Band-Aid. And it is pretty clear where your
priorities are. You are willing in the last bill to take off all the
financial controls to spend on defense, to go $100 billion, $200
billion into debt in Iraq, but you will not give anything but 5 weeks
of unemployment to the people who have lost their jobs in this mess you
have created.
I think that we will be back in January, we will all vote for this.
We know it is inadequate, but that is what you are offering them, and
we are not going to say no. We are not fools. But the fact is you are
going to come back in here in January and you are going to hear the
same speech from me because I am going to say to you why are you only
taking it 3 months or you will go 6 months? You will not recognize what
you have created here, and you have long-term unemployment that is
going up in this country and you just cannot seem to face it. So we
will vote on this inadequate piece.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
I appreciate the gentleman's argument that we are giving someone 5
weeks. That is like saying we picked up a hitchhiker on the West Coast
and drove him within three blocks of the Statue of Liberty and he is
complaining because we did not drop him right at the door. As a matter
of fact, we did not wait until he finished his business and then took
him back to California. Because the facts are, and the gentleman is
from Washington State so let us use Washington State, there are people
in Washington State who have received more than 1 year of unemployment
benefits. They have received 26 weeks, an additional 26 weeks, and the
5 weeks the gentleman from Washington (Mr. McDermott) was talking about
was part of, on top of all of those months, an additional 13 weeks
which was a 50/50 match between the State and the Federal Government.
And of course States have their own programs in which they can continue
to extend it.
So for the gentleman to take the time to create the impression that
all we are doing is 5 weeks is to say that at the very least that is 5
weeks on top of 26 weeks, on top of 26 weeks, on top of an additional
7. So when you really look at it in terms of the way in which the
benefits have been provided, a short way of saying it is there are
people who have received unemployment benefits for better than a year.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
I guess that the distinguished chairman of the Committee on Ways and
Means and the gentlewoman from Washington State (Ms. Dunn), the
previous speaker, said it all. It is the least we can do, and it is a
modest bill. We could do better. We should do better.
[[Page H8801]]
We have never had a modest tax cut coming from the other side of the
aisle. It is only modest when we try to help the least fortunate among
us. So while one never looks a gift horse in the mouth, I am sure that
the few people it does help will be happy. I intend to support the
bill. I only wish that we could have had the leadership to do better
for more people in this country.
Mr. KUCINICH. Mr. Speaker, last month's New York Times predicted that
if there is to be an economic recovery in our future, it will be a
``jobless recovery.'' I would submit that for the 8.2 million Americans
who are unemployed, an economic recovery that does not provide more
jobs is no recovery at all. And of course, as consumer confidence
plunged to a nine year low in October, any economic recovery--with or
without more job openings--seems strongly in doubt.
For this reason, H.R. 5063's plan to extend the Temporary Emergency
Unemployment Compensation (TEUC) program, which is presently scheduled
to expire on December 28, 2002, is woefully inadequate and provides an
extremely limited amount of additional unemployment relief.
According to the Center on Budget and Policy Priorities, between now
and February 2, 2003, 1.8 million jobless workers in need of assistance
would fail to receive it under this plan. Only three states, Arkansas,
Oregon, and Washington, are eligible for the five-week extension of the
TEUC program authorized by this bill.
And when one considers that the number of long-term unemployed who
are looking for work after 27 weeks almost doubled over the last year,
that the Economic Policy Institute has reported there are 2.7
unemployed workers for every job opening, and that the Congressional
Budget Office expects the unemployment rate to remain near 6 percent
until the second half of 2003, it is clear to me that American workers
deserve a better and more comprehensive unemployment plan.
In fact, the bill's proposal represents an enormous missed
opportunity. The failure to provide additional weeks of benefits to
those who have already exhausted their federal benefits is a missed
opportunity to provide a dose of immediate, well-targeted economic
stimulus.
In addition, the federal unemployment trust funds will have an
estimated surplus of $24 billion at the end of this year. And yet, the
Republican proposal is estimated to cost less than $1 billion, leaving
$23 billion unused, helping no one. This approach seems inconsistent
with the basic purpose of the trust funds: to build large resources
when work is plentiful in order to provide relief to unemployed workers
when they need it most. I think that time is now.
It is unfortunate that no alternative to the proposal contained in
H.R. 5063 was allowed by the majority's rule. An effective alternative
proposal would have recognized that American workers from the heart of
this nation, and that Federal unemployment insurance was intended for
those workers during tough times like toady. An effective alternative
proposal would have also recognized that the number of unemployed
Americans is as high today as it was when the original and
comprehensive Federal extended benefits program was enacted in March.
This time, workers may receive much less.
In a so-called ``jobless recovery'', millions of Americans will
remain jobless. Under today's so-called unemployment plan, 1.8 million
Americans will also be without unemployment compensation. We can do
better for American workers.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I will be voting for this
bill, reluctantly. I feel it is a feeble attempt to run away from the
challenges that face us, and to shirk our responsibilities to the
American people. But because it is the only legislation the Majority is
giving us the opportunity to vote on, and because it will get a modicum
of temporary help to some struggling people, I'll support it.
Everyday, I receive a deluge of letters and calls from my
constitutents--doctors, hospitals, patient-advocacy groups, and nursing
homes--letting me know that they are in trouble. Jobless rates are up.
The October 1 Medicare Cliff passed us by, and we did almost nothing to
mitigate the damages. Doctor reimbursements have been slashed, we are
short of nurses and have lost funds to bring in new ones. Our long-term
care facilities are on the brink of financial ruin. If we do not
provide appropriate funds for vital services, these services could be
lost. Reimbursement rates are so low in some sectors that medical
facilities lose money by treating patients, so Medicare patients may
soon be denied care in some areas. People will suffer.
I understand that emergencies do happen. Sometimes, we need to bend
and maneuver the rules of the House to get issues handled
expeditiously. But, we have seen these problems on the horizon for
months. We all knew it. I, with, many like-minded colleagues have been
pushing hard for real change--bold steps to take care of the challenges
that face our constituents and our health care system. But good bills
have been languishing here in the House. There was always an excuse for
inaction. We have run out of excuses though.
I and my Democratic colleagues have consistently supported a package
with provisions that would improve reimbursements to doctors and
hospitals serving Medicare patients, would eliminate the 15 percent
reduction in home health payments, would strengthen Medicare+Choice
programs, and would help rural providers. But, unfortunately, these
provisions were defeated.
Instead, the Majority has gutted an excellent bill from the other
body that would have helped our men and women serving in the military
receive fair tax relief, and would have stopped the horrible practice
of some wealthy individuals who renounce their U.S. citizenship in
order to avoid their responsibilities to pay taxes. In a time of war,
what kind of a signal are we sending to our people in uniform, by
sacrificing their needs, in order to play politics, and benefit the
worst tax-evaders?
What we have before us today is a mockery of what good legislation
can be. It is a band-aid approach to bypass surgery. It is a token for
few, but an insult to the many health care providers who are struggling
to meet the needs of our nation's sick. If it gets past the Senate, it
will provide a brief extension for welfare recipients in programs such
as Temporary Assistance for Needy Families (TANF), and child
assistance, It extends, for a short time, unemployment benefits for
people who are now receiving benefits and who live in a few selected
states. Those in other states, and those 1 million workers whose
benefits have expired, but who are still struggling in our flailing
economy to find work, receive no help.
I will vote for this bill, because it is better than nothing. But, I
feel the Republican leadership has squandered an opportunity to do
good. They should have brought us this bill as it passed the other
body, so we could show our support to the people in our military. They
should have worked with the Senate to get real relief to the
unemployed, which would have provided a stimulus to our economy, rather
than giving a free pass to tax dodgers overseas. They should have
worked with Democrats to ensure adequate reimbursements to our health
providers, so that services will be there for the people on Medicare.
Instead, we have a bill that will go nowhere once it leaves the
House. I hope we will do more for the American people in the 108th
Congress.
Mr. DINGELL. Mr. Speaker, I support the provision in this bill that
extends the welfare program and the related Temporary Medical
Assistance (TMA) program through the end of March. TMA allows families
leaving welfare for work to keep their Medicaid insurance coverage. My
only question is why my Republican colleagues would extend such an
important program for one quarter when it would make much more sense to
extend it for one year, two years, or more.
Similarly, I support the effort in this bill to prevent payment cuts
to physicians in Medicare. However, I regret that the bill does not
accomplish nearly enough.
We do need to help physicians under Medicare, but we also need to
help other providers. Hospitals, home health agencies, and nursing
homes are in a similar situation. I hear from my constituents on these
issues nearly every day. We cannot turn a blind eye to their problems
because, like physicians, their role in caring for Medicare
beneficiaries is critical.
This bill also neglects to provide States with any Medicaid fiscal
relief, which is urgently needed to prevent hundreds of thousands of
working Americans from losing their health insurance coverage. States
are already cutting back on coverage--and as a result, pregnant women
and children, senior citizens in nursing homes, working disabled, and
women with breast or cervical cancer all across the country may soon
find themselves without health insurance.
Ultimately, I will support this bill, because doing something is
better than doing nothing. Yet it seems callous for the House
Republican Leadership to let Congress leave without addressing these
critical issues. We should be preventing millions of Americans from
losing their health insurance and protecting the Medicare program for
America's seniors.
Mr. STARK. Mr. Speaker, I yield back the balance of my time.
Mr. THOMAS. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Simpson). All time for debate has
expired.
Pursuant to House Resolution 609, the previous question is ordered.
The question is on the motion offered by the gentleman from
California (Mr. Thomas).
The motion was agreed to.
A motion to reconsider was laid on the table.
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