[Congressional Record Volume 153, Number 23 (Wednesday, February 7, 2007)]
[Senate]
[Page S1714]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. PRYOR (for himself, Mr. Warner, and Mrs. Lincoln):
  S. 516. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the option of including combat pay when computing earned 
income; to the Committee on Finance.
  Mr. PRYOR. Mr. President, I rise today to urge my colleagues to make 
the Tax Relief for Americans in Combat Act permanent. This measure 
corrects a discrepancy in the Tax Code that penalizes certain service 
men and women serving in combat situations.
  To give my colleagues a bit of history and perspective on this: In 
2003 I approached the distinguished chairman of the Senate Finance 
Committee, Senator Chuck Grassley, and ranking member of the committee, 
Senator Max Baucus, and asked them to join me in an effort to get a 
fresh look at the overall picture of how our Tax Code treats our 
military.
  I was very pleased when they agreed to work with me, and was 
delighted to jointly request an expedited study by the General 
Accounting Office, GAO. It was an honor to work with them and their 
staffs throughout this process.
  The GAO raised many interesting findings but there was one especially 
important issue that demanded our immediate attention. In a nutshell 
service men and women who were serving in combat zones and receiving 
nontaxable combat pay were not able to also take advantage of the 
Earned Income Tax Credit, EITC, and the Child Care Tax Credit.
  The result was that thousands of our men and women serving in 
combat--serving in Iraq, Afghanistan, and around the globe--were seeing 
a reduction or elimination of their EITC or child credit and in effect 
losing money. In other words, the Tax Code had the impact of penalizing 
them because they are serving in combat zones.
  The GAO report characterized this result as an ``unintended 
consequence.'' I saw it as just plain wrong and I am pleased to 
introduce legislation to fix this glitch.
  In 2004, we passed the Tax Relief for Americans in Combat Act. The 
bill allowed men and women in uniform serving in combat to include 
combat pay for the purpose of calculating their earned income and child 
tax credit benefits. In other words, they would be able to continue 
receiving their rightful combat pay exclusions while having the ability 
to take full advantage of other tax credits.
  However, this legislation only made permanent the child tax credit 
benefit, while the earned income tax credit provision must be 
continuously extended.
  As of December 2006, the earned income provision was extended for 
another year, but I believe we must work to permanently resolve this 
glitch and ensure our men and women in combat are fairly treated.
  I would like to take the opportunity to thank cosponsors Senator John 
Warner and Senator Blanche Lincoln for their leadership and assistance 
to help gamer support for this bill.
  The urgency of this situation is highlighted especially when you 
focus on those of our troops which this really affects. We're talking 
about troops that tend to be in combat for more than 6 months, those in 
lower pay grades, those who are married with children, and have little 
or no savings or spousal income.
  The GAO analysis suggested that the amount of the tax benefit loss 
could be up to $4,500 for enlisted personnel and $3,200 for officers. 
This is real money--make or break money--to many of these families that 
are already under enormous stress.
  I want to work in bipartisan fashion and permanently extend this tax 
provision. This bill corrects the problem and lets our troops, risking 
life and limb, know that while they are away fighting for us we will be 
here in the Senate fighting for them and their families.
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