[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[Senate]
[Pages 9086-9089]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  STEEL-JAWED LEGHOLD TRAP ACT OF 1999

 Mr. TORRICELLI. Mr. President, today, Senators Boxer, 
Feinstein, Kerry (Ma.), Lautenberg and I rise to introduce legislation 
to end the use of the conventional steel-jawed leghold trap. I rise to 
draw this country's attention to the many liabilities of this outdated 
device and ask for my colleagues support in ending its use.
  While this bill does not prohibit trapping, it does outlaw a 
particularly savage method of trapping by prohibiting the import or 
export of, and the interstate shipment of conventional steel-jawed 
leghold traps and articles of fur from animals caught in such traps.
  The conventional steel-jawed leghold trap is a cruel and antiquated 
device for which many alternatives exist. The American Veterinary 
Medical Association and the American Animal Hospital Association have 
condemned leghold traps as ``inhumane'' and the majority of Americans 
oppose the use of this class of trap. California became the fourth 
state in recent years to pass a statewide ballot initiative to ban 
steel-jawed leghold traps--Arizona, Colorado, and Massachusetts are the 
other three states to have decided the issue by a direct vote of the 
people. A number of other states, including Florida, New Jersey, and 
Rhode Island, have legislative or administrative bans on these devices. 
In addition, 88 nations have banned their use.
  This important and timely issue now takes on added importance as the 
United States and the European Union (E.U.) recently reached an 
agreement to implement humane trapping standards. This agreement 
requires the U.S. to phase out leghold traps. Without this agreement, 
the E.U. would have prohibited the importation of U.S. fur from 
thirteen species commonly captured with leghold traps. Adoption of my 
legislation will fulfill the U.S. obligation to the E.U. and reduce 
tremendous and unnecessary suffering of animals. By ending the use of 
the conventional steel-jawed leghold trap within our borders, we will 
effectively set a humane standard for trapping, as well as protect the 
U.S. fur industry by keeping Europe's doors open to U.S. fur.
  One quarter of all U.S. fur exports, $44 million, go to the European 
market. Of this $44 million, $21 million would be eliminated by the 
ban. This would clearly cause considerable economic damage to the U.S. 
fur industry, an important source of employment for many Americans. 
Since many Americans rely on trapping for their livelihood, it is 
imperative to find a solution which prevents the considerable damage 
that this ban would cause to our fur industry. It is important to note 
that since the steel-jawed leghold trap has been banned in Europe, 
alternatives have been provided to protect and maintain the European 
fur industry.
  Our nation would be far better served by ending the use of the 
archaic and inhumane steel-jawed leghold trap. By doing so, we are not 
only setting a long-overdue humane standard for trapping, we are 
ensuring that the European market remains open to all American fur 
exports.
                                 ______
                                 
      By Mr. BAUCUS (for himself and Mr. Levin):
  S. 1008. A bill to modify the standards for responding to import 
surges under section 201 of the Trade Act of 1974, to establish 
mechanisms for import monitoring and the prevention of circumvention of 
United States trade laws, and to strengthen the enforcement of United 
States trade remedy laws; to the Committee on Finance.


                    import surge relief act of 1999

  Mr. BAUCUS. I thank the Chair. Again, I thank my good friend from 
Minnesota, as well as the Presiding Officer from Wyoming, who was very 
generous in allowing us to proceed at this time.
  Mr. President, I rise today to introduce the Import Surge Relief Act 
of 1999, an important measure that will provide a new and improved way 
to deal expeditiously with import surges. A sudden increase in imports 
in any sector, especially when these imports are shipped to us at rock 
bottom prices, has done grave damage to American business and American 
agriculture. This has been true in the past. It is true today. And, 
given the increased volatility that we see in the global trading and 
financial system, import surges are likely to create even greater havoc 
in our economy in the future.
  The steel industry and its workers have been seriously injured, and 
we read about these stories almost daily. The agriculture industry and 
our farmers and ranchers face constant threats from surges in wheat, 
beef, lamb, pork and more. At a time when our rural and industrial 
communities are facing an all-time crisis, this damage goes to the very 
heart of our economy and our society.
  The Import Surge Relief Act makes several critical improvements in 
Section 201 of U.S. trade law. This is the so-called ``safeguard'' 
provision that is designed to prevent serious disruption of our 
domestic industry because of imports. The improvements I am proposing 
include the following:
  Easing the standard that must be met to demonstrate that there is a 
causal link between imports and injury to the U.S. industry, speeding 
up the process for addressing import surges, an absolutely critical 
need to prevent an industry from being devastated before action is 
taken, requiring that the President, in deciding whether to take 
action, focus more than he has in the past on the beneficial impact of 
a remedy, rather than on the negative impact on other industries, 
making provisional relief available on an urgent basis, and correcting 
the way in which imports are counted to prevent circumvention.
  In addition, the bill provides for a system that will give us an 
early warning about import surges. We simply cannot wait until we see 
that an America industry is devastated. We must be able to project 
ahead, understand the threats facing an industry, and then consider 
quickly what type of action to take, if any.
  Finally, the bill requires that there be an investigation about 
underlying problems in agricultural and steel trade. This investigation 
would focus on anti-competitive practices overseas, including cartel 
arrangements beyond the borders of the United States.
  Mr. President, the United States will remain the most open market in 
the world. I am committed to that. At the

[[Page 9087]]

same time, we must do everything we can to open foreign markets that 
retain barriers to our manufactured goods, agricultural products, and 
services. And, we must be sure that our domestic industry is able to 
adjust and adapt to import surges without experiencing the devastation 
to our businesses, farms, and communities that we have seen far too 
often in the past.
  Let me discuss the Import Relief Act in more detail.
  The bill changes the causation standard that links imports and 
injury. Instead of the requirement that imports be a ``substantial 
cause of serious injury, or threat thereof'', this bill requires only 
that imports cause, or threaten to cause, serious injury. Imports would 
not have to be the leading, or most important, cause of injury. This 
change conforms to the WTO Agreement on Safeguards.
  The U.S. International Trade Commission practice has been to examine 
injury over a five year period. This practice ignores the problem of 
import surges where imports do not build up gradually over years but 
come into this country full blast in a precipitous way. This bill 
requires the ITC also to consider whether there has been a substantial 
increase in imports over a short time period.
  The President has discretion to deny relief after the ITC recommends 
such action, if he believes that the economic and social costs outweigh 
the benefits. This bill requires that the President grant the relief 
recommended by the ITC unless it would have an adverse impact on the 
United States substantially out of proportion to the benefits. This 
would increase the likelihood that the President will implement the 
remedy that the ITC recommends.
  The time period for provisional relief is reduced from ninety days to 
sixty days so that relief would come more quickly to the industry and 
workers.
  The bill adds to the factors that ITC must consider in determining 
whether serious injury is occurring. These new factors are just common 
sense, such as the level of sales, the level of production, 
productivity of the industry, capacity utilization, profit and loss, 
and employment levels. The ITC should focus on current conditions in 
the industry, not only historical factors. In addition, the bill 
requires the ITC to consider conditions in foreign industries that 
indicate further possible increases in exports to the U.S. in the 
future. Looking at factors such as foreign production capacity, 
inventories, and demand in third countries will allow ITC to understand 
the threat to the American industry and its imminence.
  Provisional relief is improved in several ways. The ITC must look at 
whether there is an import surge to determine if provisional relief 
should be provided. Also, USTR, the Senate Finance Committee, or the 
House Ways and Means Committee can request provisional relief when they 
have requested initiation of a Section 201 investigation.
  The bill applies to Section 201 those provisions already in U.S. 
antidumping and countervailing duty law that ensure that the ITC, in 
its injury analysis, not double-count production by the domestic 
industry when upstream and/or downstream products are the subject of an 
investigation.
  Domestic industries will be able to request that imports be monitored 
and data collected.
  The bill allows the Office of Management and Budget to release 
preliminary trade data when there is an import surge. This will improve 
the ability of the industry to detect a problem quickly.
  A new import monitoring and enforcement support program for steel and 
agricultural products will monitor illegal transshipments and other 
attempts to circumvent U.S. trade remedy laws.
  A suffix to the Harmonized Tariff Schedule for products subject to 
trade actions will help track imports of those products.
  The Commerce Department will continue its current steel import 
monitoring program.
  The ITC will conduct an investigation of anticompetitive activities 
in international agriculture and steel trade, focusing especially on 
cartels and other anticompetitive practices. The ITC will report to the 
Senate Finance and Agriculture Committees, the House Ways and Means and 
Agriculture Committees, and USTR and must propose steps to address 
those anticompetitive practices.
  I again repeat my praise to the Presiding Officer who has been 
excessively generous and gracious in the way he has conducted himself 
as the Presiding Officer allowing us to make these statements.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Rockefeller, Mrs. Hutchison, 
        Mrs. Feinstein, and Mrs. Boxer):
  S. 1010. A bill to amend the Internal Revenue Code of 1986 to provide 
for a medical innovation tax credit for clinical testing research 
expenses attributable to academic medical centers and other qualified 
hospital research organizations; to the Committee on Finance.


               medical innovation tax credit legislation

 Mr. JEFFORDS. Mr. President, today I am introducing 
legislation that I believe will be beneficial to the continued success 
of our nation's medical schools and teaching hospitals. The bill will 
provide for a new tax credit, the ``Medical Innovation Tax Credit,'' 
which will serve as an incentive for private sector firms to invest in 
clinical research at these important institutions.
  Medical schools and teaching hospitals fulfill a unique societal and 
economic role in the United States today. They are not only the 
training ground for health care professionals but are also centers for 
important research and development activities that lead to crucial 
medical breakthroughs. Because they link together research, medical 
training and patient care, these institutions are incubators of new 
life-saving drugs, medical services and surgical techniques.
  Due to the changing health care marketplace these institutions have 
come under increasing cost pressures that threaten their future. In 
fact, a recent study by the American Association of Medical Colleges 
(AAMC) noted an alarming 22 percent decline in clinical research 
conducted at member hospitals. I believe the medical innovation tax 
credit would help reverse this disturbing trend, and I am pleased that 
the AAMC endorses this legislation.
  The medical innovation tax credit is a targeted, incremental 20 
percent credit for qualified medical innovation expenditures on 
biopharmaceutical research activities, like clinical trials performed 
at qualified educational institutions. The tax credit would enhance the 
flow of private-sector funds into medical schools and teaching 
hospitals by providing an important incentive for companies to perform 
more clinical trials research at these non-profit institutions. This 
credit will encourage pharmaceutical and biotechnology companies to 
develop research partnerships with medical schools and teaching 
hospitals. The influx of funds from this research will help counteract 
some of the financial pressures these institutions have been 
experiencing. To qualify for the credit, research would have to be 
performed in the United States, so companies will not have an incentive 
to utilize lower-cost foreign facilities for research activities.
  It is significantly more expensive for companies to perform clinical 
trials at teaching hospitals than at commercial research organizations. 
The medical innovation tax credit will reduce this cost differential. 
By leveraging additional private-sector support for these institutions 
in the form of clinical trial research, this new credit will also help 
these hospitals make the adjustment to the reduction in Medicare 
payments mandated by the Balanced Budget Act of 1997.
  This legislation is critically important to institutions like 
Fletcher Allen Health Care in my home state of Vermont. Linked with the 
University of Vermont's Division of Health Sciences, Fletcher Allen's 
hospitals combine teaching and research. They are vital training sites 
for the next generation of physicians, nurses and

[[Page 9088]]

other health professionals. In Fletcher Allen's nationally known 
Clinical Research Center, researchers seek to solve the mysteries of 
cancer, heart attacks, Alzheimer's disease, chronic obesity, cystic 
fibrosis and other illnesses. The medical innovation tax credit would 
help Fletcher Allen and hundreds of other institutions across the 
United States continue in their role as incubators of vital, innovative 
medical teaching and research technologies.
  Legislation similar to this was introduced last year; the Joint 
Committee on taxation estimated that the bill would result in lost 
revenues of approximately one million dollars per year over the next 
five years. The bill I am introducing today is substantially similar to 
the bill introduced last year, although there have been technical 
changes to the definition of ``qualified academic institution'' to 
clarify that research expenditures at Veterans' Administration 
hospitals and certain non-profit research foundations qualify for the 
credit. As these changes are expected to affect a relatively small 
number of institutions, I do not expect substantial changes in the cost 
estimate. I believe this is a small price to pay for the favorable 
impact this credit will have on research at medical schools and 
teaching hospitals.
                                 ______
                                 
      By Mr. FRIST:
  S. 1011. A bill to amend the Internal Revenue Code of 1986 to provide 
that trusts established for the benefit of individuals with 
disabilities shall be taxed at the same rates as individual taxpayers; 
to the Committee on Finance.


        tax FAIRNESS for SUPPORT of the PERMANENTLY disabled ACT

  S. 1012. A bill to amend the Internal Revenue Code of 1986 to use the 
Consumer Price Index in addition to the national average wage index for 
purposes of cost-of-living adjustments; to the Committee on Finance.


                      bracket CREEP correction ACT

  S. 1013. A bill to amend the Internal Revenue Code of 1986 to promote 
lifetime savings by allowing people to establish child savings accounts 
within Roth IRAs and by allowing the savings to be used for education, 
first time home purchases, and retirement, to expand the availability 
of Roth IRAs to all Americans and to protect their contributions from 
inflation, and for other purposes; to the Committee on Finance.


                       CHILD savings ACCOUNT act

  S. 1014. A bill to amend the Internal Revenue Code of 1986 to reduce 
the rate of the individual income tax and the number of tax brackets; 
to the Committee on Finance.


                              10-20-30 act

 Mr. FRIST. Mr. President, today is Tax Freedom Day--the day 
that reflects how many days into the year a taxpayer must work in order 
to pay taxes. In 1913, when Congress first levied an income tax, Tax 
Freedom Day was January 30, and only 6 years ago, Tax Freedom Day was 
April 30--today it is two weeks into May before the taxpayer can stop 
working for the Federal Government and start working for him or 
herself.
  It is thus fitting that I introduce today the Frist tax package--four 
tax bills that I believe will go a long way toward pushing Tax Freedom 
Day back toward January. This tax package is based on a set of core 
principles:
  (1) Taxes are too high.
  (2) The tax code is too complex.
  (3) The tax code punishes taxpayers for working longer and smarter.
  (4) The tax code does not promote savings for people of all ages and 
incomes.
  We all know that taxes are too high. At a time when our tax burden as 
a percentage of GDP is at a post-World War II high and we are working 
longer and longer just to pay taxes, I believe that it is time for some 
tax relief for hard-working Americans. Taxes--federal, state, and local 
taxes combined--account for nearly 40% of the typical American family's 
budget--the single largest expense. All of this at a time when the 
federal budget is beginning to run a surplus. What that means to me is 
that the federal government is overcharging the taxpayer for the 
services it is providing.
  If the monetary cost of paying taxes isn't high enough, consider that 
it takes almost 11 hours to correctly fill out the 1040 EZ form. 
Taxpayers spend almost 5.4 billion hours filling out the forms that 
they send to the IRS. And those are the taxpayers that do their own 
taxes--54% of Americans pay someone else to do their taxes for them. In 
my own State of Tennessee, ever year approximately 1.1 million 
taxpayers utilize a professional tax preparer in order to file their 
tax returns.
  The tax code is also too complex. Our current tax code and its 
regulations are 17,000 pages long and contain over 5 and a half million 
words--seven times more than the Bible. Since 1981, the tax code has 
been changed 11,410 times. And one paragraph of law can take 250 pages 
to explain. With tax laws this complicated, it is no wonder that 
ordinary Americans have a tough time figuring them out.
  Unfortunately, the trend in Congress is to add further complexity to 
the tax code--tax credits for one worthwhile cause or tax deductions 
for another, tax relief for certain segments for the population, but 
not for others. Because of all of this tinkering, by 2007, 8,000,000 
more Americans will be subject to the alternative minimum tax (AMT), a 
provision that forces taxpayers to calculate their income two ways and 
then pay the government the higher of the two amounts.
  The tax code punishes taxpayers for working harder and smarter. One 
of the reasons that Congress has been able to balance the federal 
budget is that revenues have been rising steadily--last year by 11 
percent. Part of the reason for that rise is that our strong economy 
has resulted in Americans making more and more money which, in turn, 
has propelled them into higher and higher tax brackets. According to 
economist Steve Moore at the Cato Institute, over the past five years, 
higher incomes have pushed millions of middle-income families out of 
the 15 percent marginal tax bracket and into the 28 percent bracket, 
and out of the 28 percent bracket and into the 31 percent bracket, and 
so on. While federal tax revenues have risen by 11 percent, income has 
only risen by 6 percent. The reason for this real income bracket creep 
is our graduated income tax system.
  The tax code does not promote savings for people of all ages and 
incomes. In fact, in many ways our tax code discourages people from 
saving. America has one of the world's lowest national savings rates. 
The personal saving rate in the United States averaged only 4.9 percent 
during the 1990s compared to 7.4 percent in the 1960s and 8.1 percent 
in the 1970s. In 1998, we actually had negative savings rates. And it 
is no wonder--as I mentioned previously, the average family pays close 
to 40% of their income in taxes. In addition to a high tax burden which 
often is applied twice to savings, the rules for opening and investing 
in an IRA account of any kind are complex and restrictive. IRAs are 
tax-preferred retirement accounts--tax-free for certain purposes like 
education expenses, first-time home purchases, health care and 
retirement. But because a person must have earned income to open an 
IRA, children are not eligible to have them. Additionally, the maximum 
contribution amounts have not been indexed since 1981--they are still 
at $2,000 per year. If the maximum contribution had been indexed for 
inflation it would stand at close to $5,000 today.
  Increasing the national savings rate is even more important when 
coupled with our impending Social Security collapse. As it currently 
exists, Social Security is not sustainable for the long term unless 
taxes are significantly raised or the program is reformed. Even so, the 
return that a taxpayer gets on his or her Social Security investment 
via the payroll tax has diminished every year since the program's 
inception. In fact, the predicted rate of return at retirement for 
those age 24-50 is somewhere between -.34 percent and -1.7 percent. The 
rate of return on an average IRA investment is between 7 and 11 
percent.
  The four bills that I am introducing today--on Tax Freedom Day--
collectively present a program that will

[[Page 9089]]

lower taxes, simplify the tax code, correct for bracket creep, and 
provide increased savings opportunities for all Americans regardless of 
age and income level.
  The 10-20-30 tax plan will consolidate the five tax brackets of our 
current tax code into just three--10, 20 and 30%--both lowering the tax 
burden and simplifying our tax code at the same time. The bill will 
also increase the income threshold for the lowest tax bracket--
currently just over $25,000 for individuals--to $35,000--all of which 
will be taxed at a much lower rate--10%. In my own state of Tennessee, 
nearly 85% of individual taxpayers make $35,000 or less and will now 
pay at this lower rate. For married couples, the threshold for the 
lowest bracket is currently $42,000. Under my bill, this amount would 
increase to $60,000 and be taxed at 10%. Instead of 15 or 28 percent, 
the majority of taxpayers would pay only 10% under my plan.
  I know that this bill will not get passed this year, nor is it likely 
to get passed anytime in the near future. I introduce this bill, 
however, as my vision for where I think the tax code should ultimately 
end up. If we use a plan such as this as our compass and work 
incrementally to widen the brackets and reduce the tax rates whenever 
possible, we will be headed in the right direction.
  The ``Child Savings Account Act'' would amend the Internal Revenue 
Code of 1986 to promote lifetime savings by allowing people to 
establish child savings accounts--or CSA's--within Roth IRAs and by 
allowing the savings to be used for education, first-time home 
purchases, and retirement. The bill will also expand the availability 
of Roth IRAs to all Americans, regardless of income, and will index 
contribution limits to inflation.
  For low-income taxpayers, there are two important provisions which 
will help families with less disposable income save. First, up to $100 
of each $500 child tax credit may be refundable to those qualifying for 
the Earned Income Credit. This refundable credit must be deposited in a 
CSA. Second, any person may contribute to a child's CSA. This means 
that churches and community groups could contribute to young people's 
CSA accounts as a birthday present or on a special occasion.
  These Child Savings Accounts will arm our children for the future and 
decrease their reliance on the federal government. As a subset of the 
Roth tax-favored IRAs, Child Savings Accounts are available to new-born 
children from cradle to grave. In an increasingly complex tax world, 
CSAs are a sort of ``one-stop IRA shopping'' that allow for certain 
tax-free withdrawals and tax-free accumulation of retirement income.
  If a parent, and then the child himself, contributed the maximum 
amount for his lifetime, the Child Savings Account would be worth 
nearly $5 million at age 65 and over $7 million by age 70. And that is 
using conservative estimates of return. Even if a parent could only 
contribute less than $10 a month for the first 18 years of a child's 
life, and the child then gradually increased his or her contribution up 
to $2000 per year by the time he or she turned 40, the account would be 
worth $460,000 at age 65 and $672,000 at age 70. Even if the parent or 
grandparent or church or guardian put only $100 in the account in only 
one year, the account would still be worth almost $50,000 at retirement 
age. The power of compound interest is incredible. Giving more 
Americans--and all of our children--access to this power is imperative.
  The Bracket Creep Correction Act would index the tax brackets for 
real income growth. Tax brackets were not indexed for inflation until 
1981 when Ronald Reagan was President. Indexing for real income growth 
is a logical and necessary next step. None other than Milton Friedman 
has announced his support for indexing tax brackets for wage growth. In 
addition to correcting for inflation, the tax code would also adjust 
for income growth--thus ending the squeeze that many taxpayers have 
felt as their tax burdens have risen at a faster rate than their 
incomes.
  A fourth bill that I will introduce will address a tax inequity that 
has existed for some time and was made worse by the large tax increases 
of 1993. The ``Tax Fairness for Support of the Permanently Disabled 
Act'' would change the tax rates for the taxable income of a trust fund 
established solely for the benefit of a person who is permanently and 
totally disabled. Instead of being taxed at the highest tax rate 
(39.6%) for amounts over $7,500, the income of this fund would be taxed 
at the tax rates that would normally apply to regular income of the 
same amount. In essence, trust fund income would be treated as personal 
income for a permanently disabled person.
  Mr. Nicholas Verbin of Nashville, Tennessee called my office about 
this problem a year or so ago. The problem was that he had established 
an irrevocable trust for his son Nicky, who is completely disabled, 
unable to work, and totally dependent on his dad to provide for him. 
Mr. Verbin has spent his whole life building up this trust fund so that 
his son can live off this lifetime of hard work after Mr. Verbin is 
gone. Mr. Verbin does not want his son to have to go on welfare or 
become a ward of the state. Instead, he has built up this fund so that 
his son can be self-sufficient after he dies. Apparently, the federal 
government would rather have Nicky on its welfare roles than have him 
take care of himself.
  Instead of taxing the interest that Nicky's trust accumulates every 
year as simple income, which it is since Nicky has no other form of 
income, the IRS taxes the interest at the highest rate allowable--
39.6%. Instead of helping this sum grow into a sort of pension fund for 
Nicky, the IRS has milked it for all its worth. If Nicky's trust earns 
more than $7,500 in interest in a year, the federal government takes 
$2,125 plus 39.5% of the amount above $7,500. Meanwhile, even Bill 
Gates does not pay 39.6% on the first $275,000 of his income. We are 
taxing disabled children at a rate that we don't even tax 
multimillionaires!
  I believe that we should not punish Mr. Verbin for his foresight, nor 
should we punish Nicky for his disability. While a case could be made 
that Congress should eliminate the tax on this type of trust 
altogether, I have simply proposed that the interest income be treated 
like normal income for those disabled boys and girls, men and women who 
cannot work for themselves and depend on this interest as their only 
source of income.
  Mr. President, the Budget Resolution that we recently passed calls 
for a reconciliation bill this year of $778 over 2000-2009 (and $142 
billion 2000-2004) in tax relief. Even with the military operations in 
Kosovo and other emergency appropriations, a tax cut is not only 
possible but necessary to keep our economy growing.
  While many tax credits and deductions are attractive, they further 
complicate our already complicated tax code, subject additional tax 
payers to the alternative minimum tax, and pit one group of taxpayers 
against another. I believe that Congress should enact across the board 
tax relief--like what I have outlined in my 10-20-30 bill--as the on-
budget surplus allows. We must work toward lowering the tax rates on 
every bracket, widening the amounts subject to each bracket and 
correcting for bracket creep in order to make the tax code fairer, 
flatter and less complex.
  We must also build more wealth in this country and encourage 
Americans to save. The Child Savings Account bill is a great savings 
vehicle for both rich and poor and has enormous potential for 
increasing retirement savings. Instead of being dependent on Social 
Security, sock some money away in an IRA and get set for life.

                          ____________________