[Congressional Record Volume 149, Number 82 (Thursday, June 5, 2003)]
[Senate]
[Pages S7449-S7459]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAX RELIEF, SIMPLIFICATION, AND EQUITY ACT OF 2003
The PRESIDING OFFICER. Under the previous order, the clerk will
report H.R. 1308.
The legislative clerk read as follows:
A bill (H.R. 1308) to amend the Internal Revenue Code of
1986 to end certain abusive tax practices, to provide tax
relief and simplification, and for other purposes.
Amendment No. 862
(Purpose: In the nature of a substitute)
Mr. GRASSLEY. I send an amendment to the desk and ask for its
immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Ohio [Mr. Grassley], for himself, Mrs.
Lincoln, Ms. Snowe, Mr. Baucus, Mr. Voinovich, Ms. Murkowski,
Mr. Warner, Mr. Stevens, and Ms. Landrieu, proposes an
amendment numbered 862.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. GRASSLEY. I am pleased to join my distinguished ranking member,
Senator Baucus, in the agreement we have reached on the child tax
credit. I wish to take a minute to fill in my colleagues on how we are
at this place at this time on another tax bill.
In the Finance Committee in the year 2001, Senator Snowe and Senator
Lincoln added a refundable formula to enhance the child tax credit.
This provision lasted through conference. The formula was increased to
15 percent in 2005. President Bush proposed to accelerate the $1,000
tax credit amount but did not accelerate the refundability formula.
In the Finance Committee, we accelerated the refundability formula.
Unfortunately, that provision was dropped in conference. At that
disappointing moment and at times since, I have indicated that I would
like to revive that formula. I was joined by several Finance Committee
members and both leaders in attempting to resolve this problem.
I am pleased to say this agreement moves the ball on the marriage
penalty and the child tax credit. The relief is small but a start in
addressing yet another marriage penalty.
I applaud Senator Kay Bailey Hutchison for her steadfast interest in
resolving this other marriage penalty provision.
Finally, our agreement is offset with an extension of customs fees,
user fees. I urge the House to respond on our action today.
I would like to get the bill to the President. This will ensure that
low-income families get the checks we expect to get out in the next few
months that are related to the tax bill that the President signed last
week. Without this additional provision we are working on now, we would
have families who get an increase in the child credit of $400 per child
get a check this summer, but we would not get checks to people who are
entitled to the usual refundability because it was not extended.
I would like to do a lot more on the child tax credit. Families
should be able to rely on permanent tax relief. That is what the bill I
introduced did--not this compromise before the Senate. That is close to
what the Senate growth bill did. That is what we should do in the
upcoming process on this legislation.
I hope we resolve the refundability formula. We address the marriage
penalty and the child tax credit and we make progress on the longer
term child tax credit. We simplify the definition of a child. This last
measure is the principal recommended simplification of the Tax Code for
individuals. This recommendation comes from the Joint Committee on
Taxation and the Treasury Department and is something that should have
been done a long time ago.
Today we make some major progress on simplifying the Tax Code. Of
course, we need to do a lot more. This is what we do as we try to move
forward on various pieces of legislation from the Finance Committee.
In this bill we are also going to help those serving in the Armed
Forces overseas. Because some of their remuneration is not considered
income, they would not benefit from the child tax refund the same way
as other people who are not in a war zone. We ought to change that and
do change it so everybody is treated fairly.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, is it correct that the order provides for
30 minutes equally divided?
The PRESIDING OFFICER. That is correct.
Mr. BAUCUS. I yield 10 minutes to the Senator from Arkansas. I might
add, she is the prime mover of this bill. She is the one who made that
happen. We are deeply indebted to her.
Mrs. LINCOLN. Mr. President, I give special thanks to my colleague
from Montana. There are many people to thank today for moving forward
in the right direction, recognizing the working families of this
country. I thank Chairman Grassley, who worked tirelessly with us, as
well as the ranking member, Senator Baucus; certainly the leadership on
both sides, Senator Frist and Senator Daschle, who have both been
willing to work with all of us to come together on this agreement.
I would also like to say a very special thanks to my colleague,
Senator Olympia Snowe from Maine, who has been a wonderful colleague
and certainly someone who has worked equally as hard as I have on this
issue. I am very pleased to have worked with her, both now as well as
in the past.
If people can go back as far as 2001, they will remember in that 2001
tax bill Senator Snowe and I worked hard to bring about the
refundability of the child tax credit, recognizing and understanding
working Americans all across this country, trying to raise their
families, were in need of the kind of assistance that refundable child
tax credit would bring to them. I am very pleased and honored to have
worked with her in the great work she has done in this effort.
I am certainly pleased that we have reached this agreement to restore
the advanced refundability for the child credit, for the hard work
Senator Grassley has done in bringing about the uniform definition of a
``child'' in the Tax Code. To bring about those kinds of reforms are
not easy steps. I think it is one of our first monumental moves in the
right direction in which Senator Grassley will lead us in other reforms
in the Tax Code.
Certainly this agreement is the culmination of years of effort. I
would like to recognize, however, and emphasize particularly the fact
that we are helping working parents and working families. I know there
are some critics out there who have referred to these provisions as
welfare. I just find that description so disheartening, since we are
talking about 200,000 military families, hundreds of firefighters, and
teachers, and other hard-working Americans. I don't think of them, or
view them, as welfare recipients. I don't think they think of
themselves that way.
These are taxpayers. They are hard-working families who pay sales
tax, both State and local. They have payroll taxes that come out of
their checks. They pay excise tax, and in
[[Page S7450]]
many of our rural States that is an awful lot when they travel for
miles to get from their homes to their jobs.
It is so important for all of us to recognize that these taxes these
individuals are paying are in equal proportion, many times, to many of
the other people in different income and tax brackets, but these are
taxes that never see cuts. Rarely do we see a cut in a sales tax or in
the payroll tax, certainly, or in the State and local sales tax. In the
excise taxes? We don't see cuts in these areas.
Therefore, it is so important that we provide the kind of assistance
we can for these working families, to make sure they are going to be
able to help stimulate this economy and certainly to help strengthen
our country.
The news reports that followed the passage of the tax bill noted that
families do receive a check of $400 in July. But they did neglect to
mention those 12 million children who would not get those checks. I am
so pleased that today we are recognizing it is not only an important
issue to deal with, providing these 12 million children the kind of
resources they need in their families to grow strong, to learn the
values we want them to learn, to become good citizens and leaders and
workers in this great Nation, but we are also recognizing the fairness
of this issue in a timely way.
I encourage my colleagues in the House in that they have that same
opportunity to recognize this is a timely issue. If we want these
working families to have that same benefit, to be able to receive that
tax credit, that child benefit credit in the same timely way that other
individuals will receive that tax relief, then we have to do it
immediately. We do have to move forward quickly.
I encourage my colleagues in the House to really take to heart the
immediacy of this issue and help us move it forward quickly. The
passage of this provision today is the first step in ensuring those 12
million children will also get that $400 check, or whatever check they
are entitled to--and it might be more--in July, at the same time others
do. Time is definitely of the essence. I call on the Members of the
other body to act quickly on this bill and ensure that all of our
working families will benefit.
The uniform definition of the child, as I mentioned, through Chairman
Grassley's efforts and certainly those of many others, Senator Hatch
and Senator Baucus, is a great inclusion in this measure.
In short, this is a targeted tax provision to help working families.
It is what I have argued since we began this round of tax discussions
in January, and I hope we can continue in that vein.
People ask, why is it so important? For me, that question is a very
easy one to answer. Nearly half of the taxpayers in Arkansas have
adjusted gross incomes of less than $20,000. Arkansas families were
among some of the hardest hit when the refundable portion of the child
credit was stripped from the bill. That is why it is important to me.
It was important enough to bring up this issue and certainly to
readdress something that did not happen in that original tax bill.
Mr. President, 76,000 Arkansas families, 132,000 Arkansas children,
were left behind in that final tax bill when it was signed. If that is
not reason enough for me to cause a ruckus or to be persistent, I don't
know what is. I appreciate the accolades from my colleagues, but really
what is more important--I think it is essential that we recognize, when
we take actions such as the recent tax bill, there is a lot of
importance in the details. We have to recognize that when we do not pay
attention to the details, there are many individuals who get left
behind, who are not going to receive those benefits. This is one of
those cases.
I say to my colleagues, this is not about trying to create more debt
for these children who will also inherit that debt later on; this is
about taking something we could have done and we didn't, taking
something we could do better, acknowledging it, and moving forward with
the actions that will create that better circumstance for working
families.
That is why I have been working so hard these past few weeks--and for
the last 3 years--recognizing what it means to the families in
Arkansas.
It is also important for all of us in the Senate, and in the
Congress, as we move forward on very important legislation, such as the
tax bill that was just signed into law, to put ourselves in the shoes
of these families. We talk about raising our families. We talk about
raising our children. We talk about what it takes to create a family
atmosphere that is focused on values, that is focused on good manners,
is focused on compassion and being part of a community, reaching out to
one another. It means, too, that each of us has to recognize all of our
families are faced with different circumstances, whether it is military
personnel stationed in Iraq and leaving a wife and two children at
home; whether it is a schoolteacher or a firefighter; whether it is a
police officer, many of whom fall into this category that was left
out--these who make $10,500 to $26,625. That doesn't seem to be a
category that would include that many, but it does. These are essential
people in our communities, those who are protecting us from fire and
from criminal activity, those who are teaching our children, those who
are stationed abroad and protecting our very freedoms. So it is so
critical we put ourselves in their shoes and better understand what it
is they are doing for their families.
I have to say I have a good opportunity because when I take care of
my family, I try to stop and think: Are there other mothers out there
doing the same thing I am? Is it any different for a mother who is in
the Senate than it is for a mother who is making $20,000, when you go
to the store and you have to spend that week's paycheck on blue jeans
and tennis shoes, a set of tires to make your automobile safe to get
your children to and from school or yourself to and from work? There is
not a lot of difference, regardless of who you are. Giving these
individuals the ability to take care of those family needs is critical.
We have not even talked about the aspect of how this can be a
stimulative partner in what this overall tax bill was meant to do. It
was meant to stimulate the economy. Why do we want to stimulate the
economy anyway? We want to stimulate the economy because we want to
strengthen our country, because we believe in this country and we
believe in what makes up this country. There is no better place to
look, in order to do that, than the American family.
So I praise my colleagues today for recognizing that there are a
world of families out there we can help today--mothers and fathers,
working hard, playing by the rules at their jobs. They are not eligible
for these credits unless they are working, unless they are bringing
home earnings, and unless they have children.
There is a whole group of individuals we could help here by giving
them the opportunity to give something back to their country in
strengthening this economy. Who else is going to be there to purchase
the majority of items that will spur our economy and spur those
companies that need to be driven?
In conclusion, I applaud all of my colleagues. This has been a
unified effort among many people to try to do the right thing. I think,
after all, that is what we are here in the Senate to do--the right
thing on behalf of the working families of this great Nation.
Thank you, Mr. President.
The PRESIDING OFFICER. Who yields time?
Mr. GRASSLEY. Mr. President, I yield the Senator from Oklahoma 5
minutes.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
Mr. NICKLES. Mr. President, I am going to vote against this
amendment.
I want to state a few things. I would like to correct the Record and
state a few facts. I have heard some people say this provision was
stripped out of a provision in the tax bill and it therefore left low-
income people without any benefits from President Bush's tax cut. That
is factually inaccurate. The fact is that in the year 2001 we passed a
tax bill, and many of the people who complained mostly about this
provision voted against the 2001 bill and the 2003 bill. Now they come
back and say: You didn't do enough in this one category.
We did a lot for low-income people. We reduced the tax rate from 15
percent to 10 percent. And we did it retroactively, well after we
passed the bill.
[[Page S7451]]
We reduced that rate by a third--15 percent to 10 percent--and did it
retroactively. We reduced every other rate on the books by 1 percentage
point. I just mention that. We did a lot.
We increased the standard deduction by 20 percent. We increased the
child tax credit from $500 to $1,000. It was $600. In the 2003 bill
which the President just signed, we made it $1,000. That benefits
families. It disproportionally benefits low-income people. We took
millions of people off the tax rolls. They didn't have to pay taxes as
a result of the fact that we reduced rates. And we passed tax credits.
After we passed tax credits, millions of people who were taxpayers were
no longer taxpayers.
Then we get into the issue of refundability. We already have an
unearned income tax credit, which is one of the most plagued,
inaccurate programs we have in the Federal Government. It is about a
$30 billion-a-year program. Its error rate is in the 20-some-odd
percent range. About a fourth of it is in error. There is a lot of
fraud. There are a lot of inaccuracies. People claim children they
don't have so they can get a bigger refund. Maybe some of it was
inaccurate and maybe some if it was on purpose.
Some people say the Bush tax cut didn't benefit low-income families.
That is factually incorrect. Let me give you an example. Before the
Bush tax cut, if you had a low-income couple and both made minimum wage
with a combined income of $21,000, they had personal exemptions--
talking about, let us say, a family of four--$12,200; a standard
deduction of $7,900; their taxable income is $850 at 15 percent tax;
their income tax was $128; and for their earned income credit, we would
write a check for $2,888. They received a net income tax refund of
$2,761. Somebody said they pay payroll taxes. Yes, they could. That is
a total of $1,607. So they received $1,154 after they paid income taxes
and payroll taxes.
That was before President Bush's 2001 or 2003 tax bill passed. After
the bills we just passed, they will receive a net refund in excess of
income taxes and Social Security taxes of $2,332. That is a 102-percent
increase. That is what the Government is writing them a check for. That
is the amount left over after they paid income taxes and payroll taxes.
The question we are now really debating is, Do we want to have the
Federal Government write bigger checks, and have bigger negative income
taxes? Do we want to try to make the Income Tax Code more progressive?
Usually when they say that, they mean lower income people pay a greater
percentage.
Under present law, the upper 5 percent of the income tax bracket pay
50 percent of the tax; the lower 50 percent of the income tax bracket
pay 5 percent of the tax. Yet some people say that is not progressive
enough; that we need to have Uncle Sam write bigger checks to people
even in multiples of their payroll taxes and income taxes combined--not
equal to, not balancing out payroll taxes, but we want to write them in
multiples.
Part of this amendment says let us increase the refundability far in
excess of payroll and income taxes. I don't support that theory. That
was in fact in the 2001 bill. Part of the tax bill we agreed to said we
would have a percentage. The child tax credit would be refundable--10
percent. And, oh yes, in the year 2005, we would make that 15 percent.
The amendment on which we are going to vote would accelerate that
reduction to 15 percent immediately. That would probably happen. It
could have happened. It actually passed the Finance Committee and
passed the floor of the Senate. Had we had greater support for the
bill, it could have been in the conference report.
I hope before final passage, we can make the child credit permanent.
I hope when the bill comes back from conference, we will make permanent
a $1,000 tax credit for all individuals. Then we can make this change
in addition.
I ask unanimous consent that the information titled ``Family of Four
With Two Minimum Wage Workers'' be printed in the Record, along with
the ``Child Credit/EIC Effect on Tax Burden'' information.
There being no objection, the material was ordered to be printed in
the Record, as follows:
FAMILY OF FOUR WITH TWO MINIMUM WAGE WORKERS
------------------------------------------------------------------------
------------------------------------------------------------------------
PRE-2001 BUSH TAX CUT
Wages....................................................... $21,000
Personal exemptions......................................... (12,200)
Standard deduction.......................................... (7,950)
-----------
Taxable Income.......................................... 850
Tax rate.................................................... \1\15
Income Tax Before Credits................................... (128)
Earned income credit........................................ 2,888
Refundable child tax credit................................. ..........
-----------
Net Income Tax.......................................... 2,761
Payroll taxes........................................... (1,607)
Net Refund in Excess of All Taxes....................... 1,154
UNDER 2001 BUSH TAX CUT
Wages....................................................... $21,000
Personal exemptions......................................... (12,200)
Standard deduction.......................................... (9,500)
-----------
Taxable Income.......................................... ..........
Tax rate.................................................... \1\10
Income Tax Before Credits................................... ..........
Earned income credit........................................ 2,888
Refundable child tax credit................................. 1,050
-----------
Net Income Tax.......................................... 3,938
Payroll taxes........................................... (1,607)
Net Refund in Excess of All Taxes....................... 2,332
===========
Increase............................................ \1\102
------------------------------------------------------------------------
\1\ Percent.
Staff estimates based on 2003 tax parameters, June 4, 2003.
CHILD CREDIT/EIC EFFECT ON TAX BURDEN
----------------------------------------------------------------------------------------------------------------
Tax before Child Net income
Wage income credits EIC credit tax Payroll tax Net taxes
----------------------------------------------------------------------------------------------------------------
HEAD OF HOUSEHOLD--TWO KIDS
2,000............................. ........... (800) ........... (800) 153 (647)
4,000............................. ........... (1,600) ........... (1,600) 306 (1,294)
6,000............................. ........... (2,400) ........... (2,400) 459 (1,941)
8,000............................. ........... (3,200) ........... (3,200) 612 (2,588)
10,000............................ ........... (4,000) ........... (4,000) 765 (3,235)
12,000............................ ........... (4,204) (150) (4,354) 918 (3,436)
14,000............................ ........... (4,204) (350) (4,554) 1,071 (3,483)
16,000............................ ........... (3,942) (550) (4,492) 1,224 (3,268)
18,000............................ 185 (3,522) (750) (4,087) 1,377 (2,710)
20,000............................ 385 (3,102) (950) (3,667) 1,530 (2,137)
22,000............................ 585 (2,682) (1,150) (3,247) 1,683 (1,564)
24,000............................ 785 (2,262) (1,350) (2,827) 1,836 (991)
26,000............................ 985 (1,842) (1,550) (2,407) 1,989 (418)
28,000............................ 1,278 (1,422) (1,750) (1,894) 2,142 248
30,000............................ 1,578 (1,002) (1,950) (1,374) 2,295 921
32,000............................ 1,878 (582) (2,000) (704) 2,448 1,744
34,000............................ 2,178 (162) (2,000) 16 2,601 2,617
36,000............................ 2,478 ........... (2,000) 478 2,754 3,232
38,000............................ 2,778 ........... (2,000) 778 2,907 3,685
40,000............................ 3,078 ........... (2,000) 1,078 3,060 4,138
42,000............................ 3,378 ........... (2,000) 1,378 3,213 4,591
44,000............................ 3,678 ........... (2,000) 1,678 3,366 5,044
46,000............................ 3,978 ........... (2,000) 1,978 3,519 5,497
48,000............................ 4,278 ........... (2,000) 2,278 3,672 5,950
50,000............................ 4,578 ........... (2,000) 2,578 3,825 6,403
MARRIED--TWO KIDS
2,000............................. ........... (800) ........... (800) 153 (647)
4,000............................. ........... (1,600) ........... (1,600) 306 (1,294)
6,000............................. ........... (2,400) ........... (2,400) 459 (1,941)
8,000............................. ........... (3,200) ........... (3,200) 612 (2,588)
10,000............................ ........... (4,000) ........... (4,000) 765 (3,235)
12,000............................ ........... (4,204) (150) (4,354) 918 (3,436)
14,000............................ ........... (4,204) (350) (4,554) 1,071 (3,483)
16,000............................ ........... (3,942) (550) (4,492) 1,224 (3,268)
18,000............................ ........... (3,522) (750) (4,272) 1,377 (2,895)
20,000............................ ........... (3,102) (950) (4,052) 1,530 (2,522)
[[Page S7452]]
22,000............................ 30 (2,682) (1,150) (3,802) 1,683 (2,119)
24,000............................ 230 (2,262) (1,350) (3,382) 1,836 (1,546)
26,000............................ 430 (1,842) (1,550) (2,962) 1,989 (973)
28,000............................ 630 (1,422) (1,750) (2,542) 2,142 (400)
30,000............................ 830 (1,002) (1,950) (2,122) 2,295 174
32,000............................ 1,030 (582) (2,000) (1,552) 2,448 897
34,000............................ 1,230 (162) (2,000) (932) 2,601 1,670
36,000............................ 1,445 ........... (2,000) (555) 2,754 2,199
38,000............................ 1,745 ........... (2,000) (255) 2,907 2,652
40,000............................ 2,045 ........... (2,000) 45 3,060 3,105
42,000............................ 2,345 ........... (2,000) 345 3,213 3,558
44,000............................ 2,645 ........... (2,000) 645 3,366 4,011
46,000............................ 2,945 ........... (2,000) 945 3,519 4,464
48,000............................ 3,245 ........... (2,000) 1,245 3,672 4,917
50,000............................ 3,545 ........... (2,000) 1,545 3,825 5,370
----------------------------------------------------------------------------------------------------------------
Staff estimates based on 2003 tax parameters, provided by Senator Don Nickles, June 4, 2003.
The PRESIDING OFFICER. Who yields time?
Mr. NICKLES. I yield the Senator from Texas 2 minutes.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. Mr. President, I am certainly going to support this
bill and this vehicle. But I did hold it up for a few hours because I
am concerned that we are not able to put marriage penalty relief in a
permanent position on this bill. However, I have an agreement with the
majority leader that he will bring it up this year. Working with the
distinguished chairman of the committee, and hopefully with the ranking
member, we must fix the marriage penalty.
What we have today is a situation in which we relieve the marriage
penalty for 2 years, then for 4 years it comes back, then 2 years later
it goes away, and then it comes back for good. This is outrageous. Our
married couples do not need a rubber band; they need a Band-Aid. They
need to be able to know that when they get married, it is not going to
cost them $1,200 a year.
Two Navy lieutenants will lose more than $1,500 a year if the
marriage penalty goes away in 2 years; two Army warrant officers will
lose $852 a year. This is not right. I have the commitment from
leadership that we will take up a bill this year that fixes this
inequity, and I hope there will be a bipartisan effort. We cannot let
people be unsure about their marriage penalty relief.
I thank the distinguished chairman of the Finance Committee and ask
him if he will work with me to ensure that we take this up this year so
we can get on and fix the child tax credit. Next on the agenda I hope
will be marriage penalty relief.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I was a party to the conversation with
the majority leader and the Senator from Texas. She has accurately
stated what was discussed at that meeting. I will try my darnedest to
fulfill it.
Mrs. HUTCHISON. Thank you, Mr. President. I appreciate it very much.
We will have marriage penalty relief permanent this year. And we will
have child tax credit relief permanent, I hope, in the very near
future.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I yield the Senator from Maine 2
minutes.
The PRESIDING OFFICER. The Senator from Maine.
Ms. SNOWE. Mr. President, I thank Chairman Grassley for all of his
efforts and endeavors to move quickly to address this omission in the
growth package that passed the U.S. Congress recently. I appreciate the
fact that he has worked hard to assist us in reaching an agreement on
this vital issue.
I also express my appreciation to the Senator from Montana, Mr.
Baucus, in making the difference in bridging all of the efforts to
reach this decision today in passing this legislation.
I especially thank my colleague, Senator Lincoln, who has been a
champion in this fight, both in the Senate Finance Committee on this
issue and also on the refundability issue back in the 2001 tax cut, in
which we included a refundable provision for the child tax credit. She
certainly has been a strong ally and supporter, and I appreciate all of
the efforts she has been involved in to make sure this accelerated
refundability is a reality.
I am pleased to have worked with all of my colleagues on this issue.
I know it was not easy. There are differences on both sides with
respect to some of these issues. But I think in the final analysis we
are addressing an inequity that existed in the tax package that we
passed in the Congress a few weeks ago. I think this agreement
ultimately closes the fairness gap in economic relief for working
American families. It ensures that 6.5 million families who were left
out of the jobs and growth package enacted this year will now benefit
from the child tax credit. And by acting so quickly, it will also
ensure that these families will share in the rebate checks that
qualifying families will receive in August under the growth package as
well.
This means 12 million children in low-income families will have the
benefit of tax relief under the growth package. I think this is vitally
important in redressing this wrong, in making sure we provide the kind
of tax relief they deserve.
Now, I heard here that working families don't shoulder the burden in
the Federal Tax Code, but that isn't true. They do pay taxes. They pay
payroll taxes. In fact, payroll taxes have become an inordinate burden
on working families.
The agreement ensures that 6.5 million low-income families who would
have been left out of the jobs and growth packages enacted this month
will now benefit from the child tax credit. And by acting quickly, it
ensures these families will also share in the rebate checks qualifying
families will receive in August under the growth package.
This agreement would not have been possible without the tenacious
leadership of Senate Majority Leader Frist, and Minority Leader
Daschle, who kept negotiations on track so the Senate could complete
work this week. So I deeply appreciate their efforts.
I thank my colleague, Senator Lincoln, who has been a tireless
champion in this fight. From the time I first offered the refundable
child tax credit to the 2001 tax bill, Sentor Lincoln has been a strong
ally and supporter, and we worked together again this year to include
refundability in the Finance Committee-passed growth package. Over the
past week I have been proud to work with her once again to ensure
families omitted from the child credit would receive the refundable
credit they deserve.
I thank Finance Chairman Grassley, who quickly stepped forward last
week to address this omission from the jobs and growth package, and has
worked so graciously with Senator Lincoln and me to achieve this
agreement. He and Ranking Member Baucus have made the difference in
bridging differences over this legislation, and we appreciate their
sincere efforts.
Today we join to finish the job that Senator Lincoln and I started in
2001. At the signing of the Economic Growth and Tax Relief
Reconciliation Act of 2001, which included the newly created partially
refundable child tax credit, I wholeheartedly agreed with the President
when he remarked that:
Tax relief is a great achievement for the American people .
. . tax relief is an achievement for families struggling to
enter the middle class . . . (and) tax relief is
compassionate and it is now on the way.
Those are the same reasons we introduced a bill along with Senators
John Warner, Jack Reed, Jim Jeffords, and others to ensure that we are
as
[[Page S7453]]
compassionate today about our tax relief as we were then. This bill is
responsible because it is fully offset, and it makes sense because it
brings relief to working families while helping our economy.
The Lincoln-Snowe bill incorporated in this package makes the child
tax credit refundable for families earing between $10,500 and $26,625,
helping 12 million children--6.5 million families--and almost 73,000
children in my home State of Maine from nearly 44,000 families, who
would not have received the full benefit under the original bill.
But that is not all--in addition to helping working families we are
also talking about military families, and this legislation will treat
members of the military and their families more fairly as well. I know
that as chair of the Senate Armed Services Committee, Senator Warner
was deeply concerned about omitting the one million children living in
active duty military and military veteran families. With this
legislation, those families--including 900 in Maine--will now benefit
from refundability. The bottom line is, these men and women have
sacrificed for us, they deserve the credit--the child tax credit.
Our legislation would accelerate the refundable portion of the child
tax credit under law from 10 to 15 percent retroactive beginning
January 1 of this year. This would ensure the hardworking mothers and
fathers of America, including members of the Armed Forces who earn less
than $26,000 per year, will be able to benefit from the increase in the
child tax credit that has just become law. It will also ensure the
provision of the 2001 law that directly benefits them will also be
accelerated as the law enacted last week accelerates all of the other
child tax credit provisions.
I know some have said, this is tax relief for people who don't pay
taxes. To that argument, I would point out two factors. First, the
Federal income tax--while a large share of the tax burden facing
Americans, are not the only taxes people pay. In fact, a larger tax
burden on low-income workers is the payroll tax. The extent of this
burden is exacerbated when one realizes that fully 33 percent of all
jobs in my home State, for example, do not pay a livable wage.
Secondly, while I believe that all families could use a helping hand
when it comes to paying for the rising costs of raising a family, once
again, the children who would benefit from the enactment of this bill
are children in working families--families that do pay taxes and, just
like everyone else in these trying economic times, these people are
struggling to get by.
Consider that, in order to be eligible for the partially refundable
credit, a parent needs to surpass an income threshold that is currently
at $10,500 per year. That means that a parent needs to work more than
just a full-time minimum wage job. However, this provision benefits
more than just minimum wage workers. This provision assists some of our
younger families. For instance, the base pay for a first-year soldier
is $16,000 and it affects workers in our health care and social service
sectors, where, for instance, in Maine paramedics in 2001 were only
making an average of $22,000, or where our home health aides were
making only an average of $18,500 per year. These people are a critical
part of our infrastructure and they deserve tax relief too.
That is why I was disappointed the conferees chose to remove this
provision from the jobs and growth package--a provision which was
included in the bill both as it passed the Finance Committee, and when
it was passed by the Senate. Today, we have the opportunity to take a
step to correct this inequity.
This bill also addresses provisions included in Chairman Grassley's
proposal addressing the definition of a child in the Tax Code, and in
addressing a marriage penalty under the original bill. The ``uniform
definition of a child'' consolidates five separate definitions of a
child in the Federal Tax Code, simplifying and clarifying the law. As a
result, more families will more easily qualify for the benefits they
need and deserve.
Finally, the agreement will provide relief for married couples with
children by addressing a marriage penalty under the existing child
credit. Our agreement increases the threshold of the child tax credit
for couples with children to $150,000.
Importantly--and in keeping with the principles that have guided me
throughout the budget and tax process this year--our bill pays for this
tax relief by extending customs user fees that will expire this year
and would need to be extended anyway. And in doing so we are not
growing our already ballooning national deficit. This is critical in
ensuring we do not add the debt burden on the very children that will
benefit from this bill.
Mr. President, Senate action today sends the message that relief for
hardworking families won't take a back seat in America's tax code. It
represents sound policy that Congress has already considered and
adopted. It has the support of the White House, and I hope our
colleagues in the House of Representatives will take up and pass this
agreement promptly so it can be signed into law.
Mr. LAUTENBERG. Mr. President, I rise to express my strong support
for the Lincoln-Snowe amendment to H.R. 1308 to reinstate the child tax
credit for low-income working Americans.
The House and the Senate went to conference on the reconciliation
bill. For the public at large, when we talk about a reconciliation
bill, it is kind of arcane. The House and the Senate confer to get a
bill together, with each side presenting the views of its Members. I am
not sure I am making it more clear, but I want to make sure this is
understood. When those conferees got together, they stripped out this
tax credit for low-income working people. I thought that was a most
outrageous act.
The Bush tax cut bill was already a handout to wealthy elites. It
threw token benefits to some others and virtually nothing to working
people. Taking out the tax credit for families earning between $10,500
a year and $26,625 a year added outrage to an insult.
When the President was forced, as a result of the agreements in the
Congress, to reduce the tax cut to $350 billion, he and the House
Republicans had to search for about $30 billion in ``fat'' to cut out
of the bill to meet that target. Why didn't they slow down the
reduction in the top rate? It is a pretty easy thing to do. What did
they do instead? They went after low-income working families.
These are people who are working at or just above minimum wage. These
are Americans who are feeding their families by laboring in cafeterias,
cleaning offices, working late at night, working in the factories
packing food or making clothing, working in retail chains and small
stores across the country--jobs that are traditionally at the low end
of the pay scale. These people work hard and are a significant part of
our labor force.
I know there are those in the administration who do not have any idea
what it is like to work for low wages and try to raise a family on
them. I learned what it was like from my parents, who were brought here
as child immigrants. They knew what it was like and I knew what it was
like because my parents were poor. They worked hard and tried to give
their children an example of respect for hard work, and to hold out
ideals, even though there was little money.
The Lincoln-Snowe amendment is about restoring the American dream. It
is about knowing that this country is a fair and honest place, where
someone willing to work can still make a living. It is about knowing
that this Government and this Congress respect hard work and loyalty to
families. The Bush tax bill telegraphed a terrible shift in the message
our Government is sending to the country. Despite the once revered view
that hard work pays off and breeds respect, President Bush and the
House Republicans failed to support that contention to millions of
hard-working Americans.
Why did they do it? Why did they drop a tax benefit that would have
helped almost 12 million children who have low-income working parents?
Why? The tax credit for hard-working minimum wage families was thrown
overboard to make room for even more tax cuts for the highest income
earners in our country. The cost of the tax credit to low-income
families was $3.5 billion--not an insignificant sum by any means. But
we could have found
[[Page S7454]]
more than that by nicking the reduction to the top income tax rate by
just a little bit.
This is the rate the people at the top of the income scale will pay.
We are talking about people who make over $1 million a year. We are
talking about the top 1 percent of the country, households with average
incomes over $350,000 or so. These are the people who are going to
profit most from the President's tax cut. We are going to reduce the
rate, the income tax rate that they will have to pay.
If we only reduced that top rate to 35.3 percent instead of a flat 35
percent for the years 2003 through 2005, we would have saved $3.9
billion, and the cost of the tax credit for low-income families is $3.5
billion. That is a lot of money. But not in the context of a $350
billion tax cut package; it is only 1 percent. There would have been
more than enough to save the child tax credit.
White House spokesmen repeatedly claimed that President Bush's tax
bill would provide a tax cut for every American taxpayer. But that was
not true. The final bill left out 8 million working Americans and
almost 12 million children. The wealthy certainly got their tax cut. It
was approximately $90 billion in tax cuts over 10 years that will go to
200,000 households nationwide with annual incomes of $1 million or
more. That is about $450,000 per household.
President Kennedy said, ``To govern is to choose.'' To give massive
tax cuts to people who are already well off, and then tell hard-
working, low-income families, ``Sorry, there is nothing left for you,''
is awful. That is not a choice I want America to make.
Fortunately, after some gentle pressure from the media and outraged
constituents, the Republican majority has seen how egregious that plan
was and they now support the Lincoln-Snowe amendment. It is about time
we did something to help families who are struggling, and not just the
fortunate few who are coasting. We have the opportunity to repair some
of the harm caused by the President's unfair tax plan with this
amendment. I urge its adoption.
Mr. President, I yield the floor.
Ms. COLLINS. Mr. President, I am pleased to be a cosponsor of this
amendment offered today by Chairman Grassley, and to add my voice to
those of my colleagues who have risen today in support of it. I have
long been a supporter of the refundable child credit. I was a leading
proponent of the increase in the child tax credit for low-income
families that was enacted as part of the 2001 tax bill, and I strongly
supported this provision when it was added to the Senate version of the
Tax Act passed last month.
The economic growth package the President signed into law last week
gives tax relief to all working Americans, including low-income
families, many of whom will see a substantial reduction in their taxes.
But some low-income families could not receive the benefit of the
increased child tax credit that the package provides because the 10
percent earned-income threshold was not accelerated to 15 percent as
the Senate version of the package provided. This amendment restores the
acceleration of that threshold as this Chamber originally provided.
More than 119,000 Mainers will benefit from the increase in the child
tax credit that we approved as part of economic growth package. The
action we take today expands the reach of this assistance to thousands
more hard-working Maine families. As a member of the Senate Armed
Services Committee, I was keenly aware that nearly 200,000 enlisted men
and women could claim this credit for their children if we expanded the
guidelines. Doing so sends exactly the right message of appreciation as
many of them return home from fighting for the cause of freedom in
Iraq.
Mr. ROCKEFELLER. Mr. President, I am very pleased to support Senator
Lincoln's legislation to make the recent increase in the child tax
credit available to more families. I thank the Senator from Arkansas
for her tenacious fight on behalf of America's working families. I was
disappointed that the tax cuts passed by this Congress last month left
out eight million children whose parents are working everyday and
struggling to make ends meet. Today we will begin to correct that
injustice.
In West Virginia, there are about 57,000 children whose parents earn
between $10,500 and $26,625. While these parents currently receive some
benefit from the child tax credit, they do not stand to get any
additional benefit based on last month's tax cut. For average families,
who don't make money from dividends or capital gains, the child tax
credit was the most valuable provision included in the recent tax cut
package. The families of 57,000 West Virginia children should not be
left out. Let's be clear that these families pay taxes. Payroll tax,
sales tax, excise tax, property tax--these families are struggling to
make ends meet, and they are paying their fair share in tax.
It seems to me that families who are working hard but earning low
wages are just the sort of families we ought to be seeking to help.
These parents play by the rules, but struggle to provide the same
things that all parents want to provide: enough food, a good home,
schoolbooks, new shoes, perhaps a soccer uniform. In addition, we know
that providing additional tax relief to these families will stimulate
the economy, because these families are likely to immediately spend any
additional cash.
During the recent tax cut debate, the Senate was right to increase
the amount of the child tax credit that low-income working families
could receive. But during partisan negotiations to finalize that tax
bill, these families were abandoned in order to provide more tax cuts
to wealthy investors. One of the reasons that I opposed the recent tax
cut package was that I could not condone a deal that provided $150
billion in tax cuts to wealthy investors but dropped a provision to
help our neediest working families that would cost just $3.5 billion.
There are a lot of pieces of that deal that I wish we would undo. I
realize that we won't. But at least today, by passing Senator Lincoln's
legislation, we will take one important step toward making those tax
cuts more fair for America's working families.
The legislation before us today has a number of other important
provisions. It will ensure that two single parents would not lose their
child tax credit if they got married. The bill also simplifies the tax
code, something we should seek to do with every new tax law. I am
especially pleased that the bill includes a provision to offset the
cost of these new tax cuts. I have serious concerns about the record
deficits we face, especially in light of the enormous tax cuts recently
enacted. This bill will not add a penny to our national debt.
In short, this is a balanced, responsible, and fair piece of
legislation. While this bill does not do everything that I would like
to do to improve the child tax credit and truly make it available to
all low-income working families, it is still a major improvement on the
tax cuts enacted last month. I hope that all of my colleagues will
support this bill and send the message to hard working families that
are struggling to make ends meet that we are on their side. And I ask
all of my colleagues to encourage the House of Representatives to act
quickly on this bill so that the President can sign it into law as soon
as possible. Refund checks for the child tax credit increase are
scheduled to be mailed this summer. If we act quickly we can ensure
that an additional 8 million families will receive checks.
Mr. WARNER. Mr. President, I am pleased to join Senator Blanche
Lincoln, D-AR, and Senator Olympia Snowe, R-ME, in proposing important
bipartisan legislation to accelerate the refundable portion of the
child tax credit to low-income families. As chairman of the Senate
Armed Services Committee, I have a special obligation to look after the
welfare of the young men and women of the U.S. Armed Forces, up to
200,000 of whom could be eligible for and deserve this tax credit.
Over the past few weeks, we in Congress, have worked hard to pass the
economic stimulus package to promote long-term economic stability, and
to stimulate investment and new job creation. While these provisions
will provide substantial relief to America's families, our work is not
yet complete.
Included in the tax package were provisions to immediately increase
the Child Tax Credit from $600 to $1,000 an important tax reform that
we all support. However, the new law did not
[[Page S7455]]
make the necessary technical changes in the refundability component
which is necessary for certain low-income individuals to take advantage
of the increase. I believe in providing fair and equitable tax relief
to all Americans, especially to those raising children, our Nation's
future.
Providing tax relief is an important bipartisan achievement. Now we
must build on this accomplishment by correcting this oversight and
ensure that these hard working families are not ineligible for this
needed benefit. The legislation I am cosponsoring will correct the
inequity and provide low-income families, those who need it the most,
the full tax credit.
The bill accelerates the refundable part of the new $1,000 child tax
credit provision from 10 to 15 percent, so American families in the
$10,500 to $26,625 income bracket, who were not included in the new tax
law, would receive the same benefits as those families with children in
other brackets.
The costs attributed to accelerating the child tax credit would be
offset by closing corporate tax shelters. However, the important task
before the Senate is to correct this oversight and provide these low-
income families with fairness and the ability to take advantage of the
increase in the child tax credit.
I am also cosponsoring related legislation introduced in the Senate
by Finance Chairman Grassley to correct this issue and also to make the
child tax credit and the refundable portion of the tax credit permanent
law.
It is my hope that we can pass either of these legislative proposals,
or any other similar approach, to correct this inequity. We have a
responsibility to American families trying to care for their children,
using their resources as best they can, to provide fair and equal
treatment under the Tax Code.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from Montana.
Mr. BAUCUS. Mr. President, how much time remains on each side?
The PRESIDING OFFICER. Three minutes 42 seconds credited to the
Senator from Montana; 28 seconds to the Senator from Iowa.
Mr. BAUCUS. Mr. President, I rise to support the bill offered by my
good friend, the senior Senator from Arkansas, Mrs. Lincoln, and my
good friend from Maine, Senator Snowe. Their legislation ensures that
our military and low- and middle-income parents will receive a check
from the child tax credit.
The legislation repairs the damage done by the majority in the tax
bill conference. Senator Lincoln was successful in getting this
provision included in the $350 billion tax bill that passed the Finance
Committee and the Senate. But the provision was specifically stripped
out before passage of the final version of the $350 billion tax bill.
Let me give you some examples of who does not benefit from the tax
bill that was signed into law by President Bush last week.
First, a 24-year-old single mom with one child. She works hard every
day to put food on the table, buy clothes for her daughter, and ensure
adequate childcare for her daughter while she is at work.
She makes $15,000 a year. She pays $1,150 per year in payroll taxes.
She pays $1,150 in Federal taxes yet gets zero benefit from the
recently enacted tax bill. She will not see any check this summer.
Taxes are taxes. I would like to see someone tell her that her
payroll taxes are less of a burden to her than an equal amount of
income taxes paid by Bill gates.
Senators Lincoln and Snowe fixed that problem. The fix means $225 in
her pocket this summer.
She sees a big chunk of her paycheck every week getting paid to the
Government. She also pays a lot of other taxes--including sales taxes,
excise taxes, and property taxes. She deserves equal treatment.
My second example illustrates the impact for military families. The
Department of Defense has estimated that there are approximately
192,000 military families who earn between $10,000 and $25,000. And
most of those 192,000 military families will not receive any tax relief
from the $350 billion tax bill.
To make matters worse, the families of military personnel who are
stationed in combat zones are really left out of the big tax cut.
In my second example, a Marine gunnery sergeant with 8 years service
is stationed in Afghanistan for the last 6 months of 2002, and in Iraq
from January through March of 2003. She has two children.
She receives an annual salary of $32,015 and hazardous duty pay of
$150 per month. Because the income earned by our military while they
are stationed in a combat zone is not included in taxable income, only
$24,000 of her income is subject to tax. Under the bill that was passed
last week, the check she gets this summer will only be $150.
I am pleased that at least she will see something. But if the Lincoln
child tax credit had been preserved in the $350 billion tax bill, this
Marine gunnery sergeant and her family would receive a check for $800
this summer just like the President has promised to other middle-income
families. Unless we fix the problem, she will not see a dime of this.
The Lincoln/Snowe legislation ensures that we count a soldier's
combat zone compensation for purposes of the child tax credit, even
though that income is excluded for purposes of the income tax.
These examples illustrate just how unfair the tax bill was.
The big tax bill was not fair to working Americans or our military
personnel. Clearly, the benefits were skewed heavily to the elites of
this country.
One of the beauties of America is that we work to treat people
equally. But the $350 billion tax bill did not come close to treating
all Americans equally. Simply put, it was not fair.
Instead, the choice was made to lower the tax for dividend and
capital gain income, rather than extend the child tax credit to hard-
working, low-income taxpayers.
The bill that returned from conference--the one that was signed into
law--also stripped out other provisions to provide tax relief to those
serving our country in the armed services--those serving in Iraq, in
Afghanistan, and all across the globe.
It is disturbing that we can pass this tax bill with all these
benefits for the elite of our country. But the conferees specifically
stripped out a provision that would exempt $6,000 of death benefit
payments from income for our military families.
And, they specifically stripped out the child tax credit provision
that put money into the hands of our military and lower and middle-
income families.
There is no way around it. The big tax bill was simply unfair.
Senators Lincoln and Snowe are giving us the chance to right one of
the wrongs--without increasing the deficit. Enactment of their
legislation ensures that 12 million children are helped.
Without their legislation, the families of 8 million children will
see absolutely no benefit from the increased child credit that was
signed into law last week. These families will not receive any check
this summer.
And, millions more families will see a check much smaller than the
$400 promised.
In Montana, 54,000 kids--fully one-quarter of the children in
Montana--will not benefit from the $350 billion tax bill. But the
Lincoln/Snowe legislation would get a check out--this summer--to the
working parents of thousands of Montana children.
Their legislation gets the child tax credit to millions of parents--
without saddling their children with huge Government deficits--and
without robbing the Social Security trust fund. They fix a $3.5 billion
problem, and pay for it.
Unfortunately, some in the Republican leadership considered using
this as an opportunity to spend another $130 billion in tax cuts. That
was their idea of a ``fix.''
Moreover, they did not intend to pay for these extra tax cuts.
Instead they wanted our children and grandchildren and our Nation's
seniors to shoulder more of the burden.
In the past couple of days, we have been able to reach an agreement
to correct the wrong created with the passage of the recent tax bill. I
strongly support the Lincoln/Snowe child tax credit legislation. I urge
my colleagues to stand united to get this legislation enacted into law
this week. These families should not be asked to wait any longer.
[[Page S7456]]
They deserve to get their check this summer--just like all of the
parents who were taken care of under the $350 billion tax bill.
This is the right thing to do. This is the fair thing to do. This is
the moral thing to do.
Again, I thank the Senator from Arkansas, Mrs. Lincoln. She has done
a terrific job highlighting this issue and the need for this child tax
credit provision.
Second, Senator Snowe, as I have mentioned several times, has been
tremendous in championing this cause. And I might say, with regard to
the 2001 tax bill, she deserves the lion's share of the credit for the
child tax credit provisions that are in that bill.
The chairman of the committee, Senator Grassley, has been, as usual,
just his terrific self in working with the various Senators to try to
find an accommodation that makes sense.
I also thank Senator Warner who focused on the impact of this bill on
military families. In that respect, the bill will permit thousands of
military families, especially those serving in combat zones, to benefit
from the child credit. Without this provision in this pending measure,
those military families would not get the benefit of the credit.
Finally--I know time is of the essence here--it is imperative that
the House act on this matter within 2 weeks so that the checks can get
to the millions of families covered by this bill. Otherwise, two sets
of checks would have to be sent out, and I think that would be the
height of inefficiency and a waste on the part of Uncle Sam. That would
be the consequence of the failure of the other body to act within 2
weeks. So I call on the House to act.
I see the Senator from Virginia, the chairman of the Armed Services
Committee. I yield the rest of any time I have to him.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. I thank the distinguished Senator.
Mr. President, I am not here to in any way suggest what went right,
what went wrong. My understanding is there is a reconciliation of
viewpoints now. We have before us the opportunity to provide for this
child tax credit for a category of individuals who, for reasons that I
am certain the record explains, were preempted from the legislation.
Upon learning this, as others did--largely through press accounts--I
immediately called my distinguished chairman, Mr. Grassley; I called my
distinguished friend from Oklahoma, Senator Nickles; I called Mrs.
Lincoln and could not get a phone through to Montana, but I made an
effort to try to reach you.
Mr. BAUCUS. I beg your pardon.
Mr. WARNER. Rural electrification.
But anyway, Mr. President, I feel very strongly that the men and
women of the Armed Forces--some 200,000-plus families--very much need
this benefit. They are the ones who have fought in Iraq and Afghanistan
and who are all throughout the world taking risks, basically, the
enlisted ranks.
I feel strongly that this great institution--the Senate--wants to be
on record that one of the reasons to go forward, hopefully, and adopt
the measure now pending before us is on behalf of the men and women of
the Armed Forces of the United States.
I thank the Chair and I yield back such time as I might have.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I yield back the remainder of my time.
The PRESIDING OFFICER. Does the Senator from Iowa yield back his
remaining time?
The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I yield back the remaining amount of my
time.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
862.
Mr. BAUCUS. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. McCONNELL. I announce that the Senator from Nevada (Mr. Ensign
and the Senator from Alaska (Ms. Murkowski) are necessarily absent.
Mr. REID. I announce that the Senator from Florida (Mr. Graham) and
the Senator from Hawaii (Mr. Inouye) are necessarily absent.
I further announce that, if present and voting, the Senator from
Florida (Mr. Graham) would vote ``yea.''
The PRESIDING OFFICER (Mr. Chambliss). Are there any other Senators
in the Chamber desiring to vote?
The result was announced--yeas 94, nays 2, as follows:
[Rollcall Vote No. 210 Leg.]
YEAS--94
Akaka
Alexander
Allard
Allen
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cantwell
Carper
Chafee
Chambliss
Clinton
Cochran
Coleman
Collins
Conrad
Cornyn
Corzine
Craig
Crapo
Daschle
Dayton
DeWine
Dodd
Dole
Domenici
Dorgan
Durbin
Edwards
Enzi
Feingold
Feinstein
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Harkin
Hatch
Hollings
Hutchison
Jeffords
Johnson
Kennedy
Kerry
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
McCain
McConnell
Mikulski
Miller
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Roberts
Rockefeller
Santorum
Sarbanes
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Talent
Thomas
Voinovich
Warner
Wyden
NAYS--2
Inhofe
Nickles
NOT VOTING--4
Ensign
Graham (FL)
Inouye
Murkowski
The amendment (No. 862) was agreed to.
Mrs. LINCOLN. Mr. President, I move to reconsider the vote, and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER (Mr. Sessions). Under the previous order, the
question is on the engrossment of the amendment and third reading of
the bill.
The amendment was ordered to be engrossed, and the bill to be read
the third time.
The bill was read the third time.
The PRESIDING OFFICER. The bill, as amended, having been read the
third time, the question is, Shall it pass?
The bill (H. R. 1308), as amended, was passed, as follows:
Resolved, That the bill from the House of Representatives
(H.R. 1308) entitled ``An Act to amend the Internal Revenue
Code of 1986 to end certain abusive tax practices, to provide
tax relief and simplification, and for other purposes.'', do
pass with the following amendments:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Relief for Working Families
Tax Act of 2003''.
TITLE I--CHILD TAX CREDIT
SEC. 101. ACCELERATION OF INCREASE IN REFUNDABILITY OF THE
CHILD TAX CREDIT.
(a) Acceleration of Refundability.--
(1) In general.--Section 24(d)(1)(B)(i) of the Internal
Revenue Code of 1986 (relating to portion of credit
refundable) is amended by striking ``(10 percent in the case
of taxable years beginning before January 1, 2005)''.
(2) Advance payment.--Subsection (b) of section 6429 of
such Code (relating to advance payment of portion of
increased child credit for 2003) is amended by striking
``and'' at the end of paragraph (2), by striking the period
at the end of paragraph (3) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(4) section 24(d)(1)(B)(i) applied without regard to the
first parenthetical therein.''.
(3) Earned income includes combat pay.--Section 24(d)(1) of
such Code is amended by adding at the end the following new
sentence: ``For purposes of subparagraph (B), any amount
excluded from gross income by reason of section 112 shall be
treated as earned income which is taken into account in
computing taxable income for the taxable year.''.
(b) Effective Dates.--
(1) Subsections (a)(1) and (a)(3).--The amendments made by
subsections (a)(1) and (a)(3) shall apply to taxable years
beginning after December 31, 2002.
(2) Subsection (a)(2).--The amendments made by subsection
(a)(2) shall take effect as if included in the amendments
made by section 101(b) of the Jobs and Growth Tax Relief
Reconciliation Act of 2003.
SEC. 102. REDUCTION IN MARRIAGE PENALTY IN CHILD TAX CREDIT.
(a) In General.--Section 24(b)(2) of the Internal Revenue
Code of 1986 (defining threshold amount) is amended--
[[Page S7457]]
(1) by inserting ``($115,000 for taxable years beginning in
2008 or 2009, and $150,000 for taxable years beginning in
2010)'' after ``$110,000'', and
(2) by striking ``$55,000'' in subparagraph (C) and
inserting ``\1/2\ of the amount in effect under subparagraph
(A)''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.
SEC. 103. APPLICATION OF EGTRRA SUNSET TO THIS SECTION.
Each amendment made by this title shall be subject to title
IX of the Economic Growth and Tax Relief Reconciliation Act
of 2001 to the same extent and in the same manner as the
provision of such Act to which such amendment relates.
TITLE II--UNIFORM DEFINITION OF CHILD
SEC. 201. UNIFORM DEFINITION OF CHILD, ETC.
Section 152 of the Internal Revenue Code of 1986 is amended
to read as follows:
``SEC. 152. DEPENDENT DEFINED.
``(a) In General.--For purposes of this subtitle, the term
`dependent' means--
``(1) a qualifying child, or
``(2) a qualifying relative.
``(b) Exceptions.--For purposes of this section--
``(1) Dependents ineligible.--If an individual is a
dependent of a taxpayer for any taxable year of such taxpayer
beginning in a calendar year, such individual shall be
treated as having no dependents for any taxable year of such
individual beginning in such calendar year.
``(2) Married dependents.--An individual shall not be
treated as a dependent of a taxpayer under subsection (a) if
such individual has made a joint return with the individual's
spouse under section 6013 for the taxable year beginning in
the calendar year in which the taxable year of the taxpayer
begins.
``(3) Citizens or nationals of other countries.--
``(A) In general.--The term `dependent' does not include an
individual who is not a citizen or national of the United
States unless such individual is a resident of the United
States or a country contiguous to the United States.
``(B) Exception for adopted child.--Subparagraph (A) shall
not exclude any child of a taxpayer (within the meaning of
subsection (f)(1)(B)) from the definition of `dependent' if--
``(i) for the taxable year of the taxpayer, the child's
principal place of abode is the home of the taxpayer, and
``(ii) the taxpayer is a citizen or national of the United
States.
``(c) Qualifying Child.--For purposes of this section--
``(1) In general.--The term `qualifying child' means, with
respect to any taxpayer for any taxable year, an individual--
``(A) who bears a relationship to the taxpayer described in
paragraph (2),
``(B) who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year,
``(C) who meets the age requirements of paragraph (3), and
``(D) who has not provided over one-half of such
individual's own support for the calendar year in which the
taxable year of the taxpayer begins.
``(2) Relationship test.--For purposes of paragraph (1)(A),
an individual bears a relationship to the taxpayer described
in this paragraph if such individual is--
``(A) a child of the taxpayer or a descendant of such a
child, or
``(B) a brother, sister, stepbrother, or stepsister of the
taxpayer or a descendant of any such relative.
``(3) Age requirements.--
``(A) In general.--For purposes of paragraph (1)(C), an
individual meets the requirements of this paragraph if such
individual--
``(i) has not attained the age of 19 as of the close of the
calendar year in which the taxable year of the taxpayer
begins, or
``(ii) is a student who has not attained the age of 24 as
of the close of such calendar year.
``(B) Special rule for disabled.--In the case of an
individual who is permanently and totally disabled (as
defined in section 22(e)(3)) at any time during such calendar
year, the requirements of subparagraph (A) shall be treated
as met with respect to such individual.
``(4) Special rule relating to 2 or more claiming
qualifying child.--
``(A) In general.--Except as provided in subparagraph (B)
and subsection (e), if (but for this paragraph) an individual
may be and is claimed as a qualifying child by 2 or more
taxpayers for a taxable year beginning in the same calendar
year, such individual shall be treated as the qualifying
child of the taxpayer who is--
``(i) a parent of the individual, or
``(ii) if clause (i) does not apply, the taxpayer with the
highest adjusted gross income for such taxable year.
``(B) More than 1 parent claiming qualifying child.--If the
parents claiming any qualifying child do not file a joint
return together, such child shall be treated as the
qualifying child of--
``(i) the parent with whom the child resided for the
longest period of time during the taxable year, or
``(ii) if the child resides with both parents for the same
amount of time during such taxable year, the parent with the
highest adjusted gross income.
``(d) Qualifying Relative.--For purposes of this section--
``(1) In general.--The term `qualifying relative' means,
with respect to any taxpayer for any taxable year, an
individual--
``(A) who bears a relationship to the taxpayer described in
paragraph (2),
``(B) whose gross income for the calendar year in which
such taxable year begins is less than the exemption amount
(as defined in section 151(d)),
``(C) with respect to whom the taxpayer provides over one-
half of the individual's support for the calendar year in
which such taxable year begins, and
``(D) who is not a qualifying child of such taxpayer or of
any other taxpayer for any taxable year beginning in the
calendar year in which such taxable year begins.
``(2) Relationship.--For purposes of paragraph (1)(A), an
individual bears a relationship to the taxpayer described in
this paragraph if the individual is any of the following with
respect to the taxpayer:
``(A) A child or a descendant of a child.
``(B) A brother, sister, stepbrother, or stepsister.
``(C) The father or mother, or an ancestor of either.
``(D) A stepfather or stepmother.
``(E) A son or daughter of a brother or sister of the
taxpayer.
``(F) A brother or sister of the father or mother of the
taxpayer.
``(G) A son-in-law, daughter-in-law, father-in-law, mother-
in-law, brother-in-law, or sister-in-law.
``(H) An individual (other than an individual who at any
time during the taxable year was the spouse, determined
without regard to section 7703, of the taxpayer) who, for the
taxable year of the taxpayer, has as such individual's
principal place of abode the home of the taxpayer and is a
member of the taxpayer's household.
``(3) Special rule relating to multiple support
agreements.--For purposes of paragraph (1)(C), over one-half
of the support of an individual for a calendar year shall be
treated as received from the taxpayer if--
``(A) no one person contributed over one-half of such
support,
``(B) over one-half of such support was received from 2 or
more persons each of whom, but for the fact that any such
person alone did not contribute over one-half of such
support, would have been entitled to claim such individual as
a dependent for a taxable year beginning in such calendar
year,
``(C) the taxpayer contributed over 10 percent of such
support, and
``(D) each person described in subparagraph (B) (other than
the taxpayer) who contributed over 10 percent of such support
files a written declaration (in such manner and form as the
Secretary may by regulations prescribe) that such person will
not claim such individual as a dependent for any taxable year
beginning in such calendar year.
``(4) Special rule relating to income of handicapped
dependents.--
``(A) In general.--For purposes of paragraph (1)(B), the
gross income of an individual who is permanently and totally
disabled (as defined in section 22(e)(3)) at any time during
the taxable year shall not include income attributable to
services performed by the individual at a sheltered workshop
if--
``(i) the availability of medical care at such workshop is
the principal reason for the individual's presence there, and
``(ii) the income arises solely from activities at such
workshop which are incident to such medical care.
``(B) Sheltered workshop defined.--For purposes of
subparagraph (A), the term `sheltered workshop' means a
school--
``(i) which provides special instruction or training
designed to alleviate the disability of the individual, and
``(ii) which is operated by an organization described in
section 501(c)(3) and exempt from tax under section 501(a),
or by a State, a possession of the United States, any
political subdivision of any of the foregoing, the United
States, or the District of Columbia.
``(5) Special support test in case of students.--For
purposes of paragraph (1)(C), in the case of an individual
who is--
``(A) a child of the taxpayer, and
``(B) a student,
amounts received as scholarships for study at an educational
organization described in section 170(b)(1)(A)(ii) shall not
be taken into account in determining whether such individual
received more than one-half of such individual's support from
the taxpayer.
``(6) Special rules for support.--For purposes of this
subsection--
``(A) payments to a spouse which are includible in the
gross income of such spouse under section 71 or 682 shall not
be treated as a payment by the payor spouse for the support
of any dependent,
``(B) amounts expended for the support of a child or
children shall be treated as received from the noncustodial
parent (as defined in subsection (e)(3)(B)) to the extent
that such parent provided amounts for such support, and
``(C) in the case of the remarriage of a parent, support of
a child received from the parent's spouse shall be treated as
received from the parent.
``(e) Special Rule for Divorced Parents.--
``(1) In general.--Notwithstanding subsection (c)(4) or
(d)(1)(C), if--
``(A) a child receives over one-half of the child's support
during the calendar year from the child's parents--
``(i) who are divorced or legally separated under a decree
of divorce or separate maintenance,
``(ii) who are separated under a written separation
agreement, or
``(iii) who live apart at all times during the last 6
months of the calendar year, and
``(B) such child is in the custody of 1 or both of the
child's parents for more than \1/2\ of the calendar year,
such child shall be treated as being the qualifying child or
qualifying relative of the noncustodial parent for a calendar
year if the requirements described in paragraph (2) are met.
[[Page S7458]]
``(2) Requirements.--For purposes of paragraph (1), the
requirements described in this paragraph are met if--
``(A) a decree of divorce or separate maintenance or
written separation agreement between the parents applicable
to the taxable year beginning in such calendar year provides
that--
``(i) the noncustodial parent shall be entitled to any
deduction allowable under section 151 for such child, or
``(ii) the custodial parent will sign a written declaration
(in such manner and form as the Secretary may prescribe) that
such parent will not claim such child as a dependent for such
taxable year, and
``(B) in the case of such an agreement executed before
January 1, 1985, the noncustodial parent provides at least
$600 for the support of such child during such calendar year.
``(3) Custodial parent and noncustodial parent.--For
purposes of this subsection--
``(A) Custodial parent.--The term `custodial parent' means
the parent with whom a child shared the same principal place
of abode for the greater portion of the calendar year.
``(B) Noncustodial parent.--The term `noncustodial parent'
means the parent who is not the custodial parent.
``(4) Exception for multiple-support agreements.--This
subsection shall not apply in any case where over one-half of
the support of the child is treated as having been received
from a taxpayer under the provision of subsection (d)(3).
``(f) Other Definitions and Rules.--For purposes of this
section--
``(1) Child defined.--
``(A) In general.--The term `child' means an individual who
is--
``(i) a son, daughter, stepson, or stepdaughter of the
taxpayer, or
``(ii) an eligible foster child of the taxpayer.
``(B) Adopted child.--In determining whether any of the
relationships specified in subparagraph (A)(i) or paragraph
(4) exists, a legally adopted individual of the taxpayer, or
an individual who is placed with the taxpayer by an
authorized placement agency for adoption by the taxpayer,
shall be treated as a child of such individual by blood.
``(C) Eligible foster child.--For purposes of subparagraph
(A)(ii), the term `eligible foster child' means an individual
who is placed with the taxpayer by an authorized placement
agency or by judgment, decree, or other order of any court of
competent jurisdiction.
``(2) Student defined.--The term `student' means an
individual who during each of 5 calendar months during the
calendar year in which the taxable year of the taxpayer
begins--
``(A) is a full-time student at an educational organization
described in section 170(b)(1)(A)(ii), or
``(B) is pursuing a full-time course of institutional on-
farm training under the supervision of an accredited agent of
an educational organization described in section
170(b)(1)(A)(ii) or of a State or political subdivision of a
State.
``(3) Place of abode.--An individual shall not be treated
as having the same principal place of abode of the taxpayer
if at any time during the taxable year of the taxpayer the
relationship between the individual and the taxpayer is in
violation of local law.
``(4) Brother and sister.--The terms `brother' and `sister'
include a brother or sister by the half blood.
``(5) Treatment of missing children.--
``(A) In general.--Solely for the purposes referred to in
subparagraph (B), a child of the taxpayer--
``(i) who is presumed by law enforcement authorities to
have been kidnapped by someone who is not a member of the
family of such child or the taxpayer, and
``(ii) who had, for the taxable year in which the
kidnapping occurred, the same principal place of abode as the
taxpayer for more than one-half of the portion of such year
before the date of the kidnapping,
shall be treated as meeting the requirement of subsection
(c)(1)(B) with respect to a taxpayer for all taxable years
ending during the period that the individual is kidnapped.
``(B) Purposes.--Subparagraph (A) shall apply solely for
purposes of determining--
``(i) the deduction under section 151(c),
``(ii) the credit under section 24 (relating to child tax
credit),
``(iii) whether an individual is a surviving spouse or a
head of a household (as such terms are defined in section 2),
and
``(iv) the earned income credit under section 32.
``(C) Comparable treatment of certain qualifying
relatives.--For purposes of this section, a child of the
taxpayer--
``(i) who is presumed by law enforcement authorities to
have been kidnapped by someone who is not a member of the
family of such child or the taxpayer, and
``(ii) who was (without regard to this paragraph) a
qualifying relative of the taxpayer for the portion of the
taxable year before the date of the kidnapping,
shall be treated as a qualifying relative of the taxpayer for
all taxable years ending during the period that the child is
kidnapped.
``(D) Termination of treatment.--Subparagraphs (A) and (C)
shall cease to apply as of the first taxable year of the
taxpayer beginning after the calendar year in which there is
a determination that the child is dead (or, if earlier, in
which the child would have attained age 18).
``(6) Cross references.--
``For provision treating child as dependent of both parents for
purposes of certain provisions, see sections 105(b), 132(h)(2)(B), and
213(d)(5).''.
SEC. 202. MODIFICATIONS OF DEFINITION OF HEAD OF HOUSEHOLD.
(a) Head of Household.--Clause (i) of section 2(b)(1)(A) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(i) a qualifying child of the individual (as defined in
section 152(c), determined without regard to section 152(e)),
but not if such child--
``(I) is married at the close of the taxpayer's taxable
year, and
``(II) is not a dependent of such individual by reason of
section 152(b)(2) or 152(b)3), or both, or''.
(b) Conforming Amendments.--
(1) Section 2(b)(2) of the Internal Revenue Code of 1986 is
amended by striking subparagraph (A) and by redesignating
subparagraphs (B), (C), and (D) as subparagraphs (A), (B),
and (C), respectively.
(2) Clauses (i) and (ii) of section 2(b)(3)(B) of such Code
are amended to read as follows:
``(i) subparagraph (H) of section 152(d)(2), or
``(ii) paragraph (3) of section 152(d).''.
SEC. 203. MODIFICATIONS OF DEPENDENT CARE CREDIT.
(a) In General.--Section 21(a)(1) of the Internal Revenue
Code of 1986 is amended by striking ``In the case of an
individual who maintains a household which includes as a
member one or more qualifying individuals (as defined in
subsection (b)(1))'' and inserting ``In the case of an
individual for which there are 1 or more qualifying
individuals (as defined in subsection (b)(1)) with respect to
such individual''.
(b) Qualifying Individual.--Paragraph (1) of section 21(b)
of the Internal Revenue Code of 1986 is amended to read as
follows:
``(1) Qualifying individual.--The term `qualifying
individual' means--
``(A) a dependent of the taxpayer (as defined in section
152(a)(1)) who has not attained age 13,
``(B) a dependent of the taxpayer who is physically or
mentally incapable of caring for himself or herself and who
has the same principal place of abode as the taxpayer for
more than one-half of such taxable year, or
``(C) the spouse of the taxpayer, if the spouse is
physically or mentally incapable of caring for himself or
herself and who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year.''.
(c) Conforming Amendment.--Paragraph (1) of section 21(e)
of the Internal Revenue Code of 1986 is amended to read as
follows:
``(1) Place of abode.--An individual shall not be treated
as having the same principal place of abode of the taxpayer
if at any time during the taxable year of the taxpayer the
relationship between the individual and the taxpayer is in
violation of local law.''.
SEC. 204. MODIFICATIONS OF CHILD TAX CREDIT.
(a) In General.--Paragraph (1) of section 24(c) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) In general.--The term `qualifying child' means a
qualifying child of the taxpayer (as defined in section
152(c)) who has not attained age 17.''.
(b) Conforming Amendment.--Section 24(c)(2) of the Internal
Revenue Code of 1986 is amended by striking ``the first
sentence of section 152(b)(3)'' and inserting ``subparagraph
(A) of section 152(b)(3)''.
SEC. 205. MODIFICATIONS OF EARNED INCOME CREDIT.
(a) Qualifying Child.--Paragraph (3) of section 32(c) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(3) Qualifying child.--
``(A) In general.--The term `qualifying child' means a
qualifying child of the taxpayer (as defined in section
152(c), determined without regard to paragraph (1)(D) thereof
and section 152(e)).
``(B) Married individual.--The term `qualifying child'
shall not include an individual who is married as of the
close of the taxpayer's taxable year unless the taxpayer is
entitled to a deduction under section 151 for such taxable
year with respect to such individual (or would be so entitled
but for section 152(e)).
``(C) Place of abode.--For purposes of subparagraph (A),
the requirements of section 152(c)(1)(B) shall be met only if
the principal place of abode is in the United States.
``(D) Identification requirements.--
``(i) In general.--A qualifying child shall not be taken
into account under subsection (b) unless the taxpayer
includes the name, age, and TIN of the qualifying child on
the return of tax for the taxable year.
``(ii) Other methods.--The Secretary may prescribe other
methods for providing the information described in clause
(i).''.
(b) Conforming Amendments.--
(1) Section 32(c)(1) of the Internal Revenue Code of 1986
is amended by striking subparagraph (C) and by redesignating
subparagraphs (D), (E), (F), and (G) as subparagraphs (C),
(D), (E), and (F), respectively.
(2) Section 32(c)(4) of such Code is amended by striking
``(3)(E)'' and inserting ``(3)(C)''.
(3) Section 32(m) of such Code is amended by striking
``subsections (c)(1)(F)'' and inserting ``subsections
(c)(1)(E)''.
SEC. 206. MODIFICATIONS OF DEDUCTION FOR PERSONAL EXEMPTION
FOR DEPENDENTS.
Subsection (c) of section 151 of the Internal Revenue Code
of 1986 is amended to read as follows:
``(c) Additional Exemption for Dependents.--An exemption of
the exemption amount for each individual who is a dependent
(as defined in section 152) of the taxpayer for the taxable
year.''.
SEC. 207. TECHNICAL AND CONFORMING AMENDMENTS.
(1) Section 2(a)(1)(B)(i) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(2) Section 21(e)(5) of the Internal Revenue Code of 1986
is amended--
[[Page S7459]]
(A) by striking ``paragraph (2) or (4) of'' in subparagraph
(A), and
(B) by striking ``within the meaning of section 152(e)(1)''
and inserting ``as defined in section 152(e)(3)(A)''.
(3) Section 21(e)(6)(B) of such Code is amended by striking
``section 151(c)(3)'' and inserting ``section 152(f)(1)''.
(4) Section 25B(c)(2)(B) of such Code is amended by
striking ``151(c)(4)'' and inserting ``152(f)(2)''.
(5)(A) Subparagraphs (A) and (B) of section 51(i)(1) of
such Code are each amended by striking ``paragraphs (1)
through (8) of section 152(a)'' both places it appears and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(B) Section 51(i)(1)(C) of such Code is amended by striking
``152(a)(9)'' and inserting ``152(d)(2)(H)''.
(6) Section 72(t)(2)(D)(i)(III) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(7) Section 72(t)(7)(A)(iii) of such Code is amended by
striking ``151(c)(3)'' and inserting ``152(f)(1)''.
(8) Section 42(i)(3)(D)(ii)(I) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(9) Subsections (b) and (c)(1) of section 105 of such Code
are amended by inserting ``, determined without regard to
subsections (b)(1), (b)(2), and (d)(1)(B) thereof'' after
``section 152''.
(10) Section 120(d)(4) of such Code is amended by inserting
``(determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof)'' after ``section 152''.
(11) Section 125(e)(1)(D) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(12) Section 129(c)(2) of such Code is amended by striking
``151(c)(3)'' and inserting ``152(f)(1)''.
(13) The first sentence of section 132(h)(2)(B) of such
Code is amended by striking ``151(c)(3)'' and inserting
``152(f)(1)''.
(14) Section 153 of such Code is amended by striking
paragraph (1) and by redesignating paragraphs (2), (3), and
(4) as paragraphs (1), (2), and (3), respectively.
(15) Section 170(g)(1) of such Code is amended by inserting
``(determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof)'' after ``section 152''.
(16) Section 170(g)(3) of such Code is amended by striking
``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(17) Section 213(a) of such Code is amended by inserting
``, determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof'' after ``section 152''.
(18) The second sentence of section 213(d)(11) of such Code
is amended by striking ``paragraphs (1) through (8) of
section 152(a)'' and inserting ``subparagraphs (A) through
(G) of section 152(d)(2)''.
(19) Section 220(d)(2)(A) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(20) Section 221(d)(4) of such Code is amended by inserting
``(determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof)'' after ``section 152''.
(21) Section 529(e)(2)(B) of such Code is amended by
striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(22) Section 2032A(c)(7)(D) of such Code is amended by
striking ``section 151(c)(4)'' and inserting ``section
152(f)(2)''.
(23) Section 2057(d)(2)(B) of such Code is amended by
inserting ``, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section
152''.
(24) Section 7701(a)(17) of such Code is amended by
striking ``152(b)(4), 682,'' and inserting ``682''.
(25) Section 7702B(f)(2)(C)(iii) of such Code is amended by
striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(26) Section 7703(b)(1) of such Code is amended--
(A) by striking ``151(c)(3)'' and inserting ``152(f)(1)'',
and
(B) by striking ``paragraph (2) or (4) of''.
SEC. 208. EFFECTIVE DATE.
The amendments made by this title shall apply to taxable
years beginning after December 31, 2003.
TITLE III--CUSTOMS USER FEES
SEC. 301. EXTENSION OF CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended
by striking ``September 30, 2003'' and inserting ``March 31,
2010''.
Amend the title so as to read: ``An Act to amend the
Internal Revenue Code of 1986 to accelerate the increase in
the refundability of the child tax credit, and for other
purposes.''.
The PRESIDING OFFICER. Under the previous order, the amendment to the
title is agreed to.
The title was amended so as to read:
A bill to amend the Internal Revenue Code of 1986 to
accelerate the increase in the refundability of the child tax
credit, and for other purposes.
____________________