[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[Senate]
[Pages 1425-1440]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    AFFORDABLE EDUCATION ACT OF 1999

  Mr. LOTT. As we discussed earlier and agreed to, I now ask unanimous 
consent that the Senate turn to Calendar No. 124, S. 1134, the 
education savings account bill.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 1134) to amend the Internal Revenue Code of 1986 
     to allow tax-free expenditures from education individual 
     retirement accounts for elementary and secondary school 
     expenses, to increase the maximum annual amount of 
     contributions to such accounts, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. LOTT. In order to keep the Senate on the subject of the education 
savings accounts, I ask unanimous consent that the bill be pending 
today for debate only.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. LOTT. Mr. President, I hope when the Senate resumes the bill 
tomorrow, that all amendments will be relevant to the education savings 
account issue. I intend to ask that our Democratic colleagues at a 
later time agree to that. In the meantime, I expect vigorous discussion 
today about this very important education issue and how we can all have 
an opportunity to be helpful to our children in K through 12th grades.
  In light of the agreement, there will be no votes during today's 
session. I remind Members that a rollcall vote is scheduled to occur 
tomorrow at 11:30 a.m. on the Iran Nonproliferation Act. There is a 
likelihood that there will be more votes Thursday afternoon, perhaps on 
Executive Calendar items. We will notify Members of any nominations 
that might be considered. If votes are required, then we will notify 
Members on both sides of the aisle exactly what time that would occur.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. We are very grateful that we have an opportunity to talk 
about education. There are many things that we need to talk about as it 
relates to education. Certainly, this is a step in the right direction.
  I personally believe very strongly about the fact that in America we 
have 3,000 children dropping out of high school every day--3,000 
children who are going to be less than they could be. I think we need 
to do something about that.
  On a number of occasions we have attempted to move legislation 
forward that would help create a dropout czar in the Department of 
Education to adopt some of the educational programs that are working 
around the country.
  We in Nevada are particularly concerned with the dropout rate. We 
have the dubious distinction of leading the Nation in the rate of high 
school dropouts. We really need to do something about that. This 
problem is making our country less productive. It is making the State 
of Nevada less productive. For this reason alone, I think it is 
important that we start talking about education.
  I do say that on the education savings account issue--of which there 
will be some discussion today by the ranking member of the Education 
Labor Committee, who will talk in more detail about this--but as the 
Senator from Massachusetts knows, we could take all these programs, 
including education savings accounts, and lump them together, and very 
few people would be helped. We need something to help public education 
generally.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I am disappointed that we have failed to 
obtain a unanimous consent agreement to limit amendments with respect 
to S. 1134, the Affordable Education Act. I hope that we will move 
towards passage of this very significant bill. The importance of giving 
American families the resources and means they need to educate their 
children must be above politics.
  I will soon take a few minutes to walk through the various provisions 
of the bill. But before I get into the specifics, let me remind my 
colleagues that all of the concepts in this bill should be very 
familiar.
  This bill is an A+ for American education. Its concepts should be 
familiar because we have already endorsed them. The base provisions in 
the bill--which include the increase in the maximum allowable 
contribution to an education IRA, the use of the IRA for elementary and 
secondary school expenses for public and private schools, the tax-free 
treatment of State-sponsored prepaid tuition plans, and the extension 
of tax-free treatment for employer-provided educational assistance--all 
received bipartisan support from the Finance Committee in the Senate as 
part of the Taxpayer Relief Act of 1997.
  Despite this Senate support, these provisions were dropped from the 
bill during conference negotiations. Because of opposition from the 
administration, these particular elements failed to be included in the 
final version of the Taxpayer Relief Act of 1997.
  In addition, these proposals were included in legislation sent to the 
President in 1998. Unfortunately, the President vetoed that 
legislation.
  These bipartisan proposals were included in the Taxpayer Refund and 
Relief Act of 1999, which passed last year. Unfortunately, the 
President vetoed that legislation, as well.

[[Page 1426]]

  But we must not lose heart. The cause of affordable education is too 
important. I hope this time we can succeed for the American people.
  We are here today to show our commitment to affordable education and 
to enact what this body determines makes good sense for American 
families.
  It is important to note that this tax bill is not designed to answer 
all the education-related issues that face this country. Many issues 
are too varied and complicated to be addressed by the Federal 
Government. They need to be solved at the State and local level--by 
schools, by teachers, and by parents working together.
  Instead, this bill is designed to build on the innovative concepts 
that have been introduced in the last few years. Our goal is to fix the 
Tax Code so that it provides the necessary incentives to help American 
families help their children. These are much needed tools.
  From 1992 through 1998, tuition at a 4-year college increased by 234 
percent. During that period, the average student loan increased by 367 
percent. In contrast, median household income rose only 82 percent 
during that period and the Consumer Price Index rose only 74 percent. 
Our students, our families, need these resources to help them meet the 
costs and realize the opportunities of a quality education. I hope my 
colleagues continue to recognize just how important they remain. The 
American people are counting on us.
  Let me take a few minutes to describe the various provisions of the 
bill, to provide an overview, and to highlight some reasons these 
measures are so important.
  As I already mentioned, the bill increases the maximum education IRA 
contribution from $500 to $2,000. That increase is important on two 
levels. First, with the well-documented increase in education costs, it 
is essential that we provide American families with the resources to 
meet these costs.
  I have long argued that it is essential to change the savings habits 
of the American people. There are few things more important than the 
education of their children. Not only will saving in this way increase 
our investment capital, it will increase Americans' education capital 
as well. Anything that thwarts either of these objectives is 
shortsighted.
  By using the Tax Code to encourage individual responsibility for 
paying for educational expenses, we all benefit. The expansion of the 
education IRA will result in greater opportunities for individuals to 
save for their children's education.
  Besides being too low to give parents the necessary resources to pay 
for the cost of education, the current $500 limit fails from another 
practical perspective. As we all know, any banker or broker who 
provides an IRA account faces assorted administrative costs for each 
account. To ensure they can adequately cover their administrative 
costs, most brokers or banks impose a minimum account balance, and in 
many cases the maximum balance has been set well higher than $500. That 
reality of the marketplace has the effect of limiting the availability 
of the educational IRA to American families.
  Another reality is that confronted by a $500 limit. Many mutual fund 
companies find it is not worth their while to spend money on marketing 
the educational IRA. It is a fact of life that regardless of what we 
say or do in Congress, many families only know about the benefits of an 
educational IRA through the marketing efforts of their local mutual 
fund companies and banks. These businesses have been very successful in 
marketing IRAs with the higher contribution limit. If we want to 
maximize the involvement of American families in education IRAs, we 
need to ensure that the accounts make economic sense from the 
perspective of the companies offering them.
  The next major change this bill makes to education IRAs is that it 
allows withdrawals for education expenses for elementary and secondary 
schools and for both private and public schools.
  As we recognized last year, it is a fundamental principle that a 
parent should have the right and the ability to make decisions about 
his or her child's education, to decide basic questions such as how the 
child shall be educated and where the child should attend school.
  In 1997, for example, when Congress passed a variety of provisions 
targeted to higher education, we made no distinction between private 
and public schools.
  We did not say, for instance, that an education IRA or a HOPE 
scholarship would only be available if a student attended public 
school. We did not say that a student who attended the University of 
Maryland would receive a tax benefit but a student who attended George 
Washington University would receive nothing.
  This bill recognizes that, just as for higher education, we should 
not establish a priority system where some elementary and secondary 
schools are favored over others. We should not forget that it is the 
taxpayer who funds the educational IRA, that it is the parent who puts 
his or her hard-earned money into the education IRA.
  It seems a matter of common sense, therefore, that the parent should 
be able to choose how to spend that money and the parent should be able 
to choose where to send their children to school.
  Moreover, parents with students in elementary and secondary school 
need our help to cope with the costs. It is simply not true that only 
rich kids attend private elementary or secondary schools. For instance, 
recent data from the National Catholic Education Association indicate 
that almost 70 percent of the families with children in Catholic 
schools have income below $35,000, and almost 90 percent of those 
families have incomes below $50,000. Why should those children not have 
access to these accounts?
  Another provision in this bill makes State-sponsored prepaid tuition 
plans tax free, not simply tax deferred. This is a significant 
distinction because it allows students to withdraw the savings that 
accumulate in their prepaid tuition accounts without paying any tax at 
all. That means more money for children's education. It also means 
parents have the incentive to put money away today, and their children 
have the full benefit of that money without any tax tomorrow.
  As I have already mentioned, at least 43 States have prepaid tuition 
plans in effect. This means most Members of the Senate have parents and 
students back home who either benefit from the plan right now or will 
benefit from the plan soon. I am pleased to see my home State of 
Delaware has already acted in this area. Delaware parents can now save 
for college on a tax-deferred basis. But if this bill becomes law, 
these Delaware families will be able to save for a child's college 
education on a tax-free basis.
  The prepaid provision also covers networks of private college plans. 
This will enable still more parents and more students to save for 
college.
  The Finance Committee bill also extends tax-free treatment of 
employer-provided educational assistance for graduates and 
undergraduates through June 30, 2004.
  This particular program is a time-tested and widely used benefit for 
working families. Over 1 million workers across America receive tax-
free employer-provided education. This allows them to stay on the 
cutting edge of their careers. It benefits not only them individually 
but their employers and, of course, the economy as a whole. With the 
constant innovation and advancing technology of our society, it is 
vitally important that we continue this program.
  The Finance Committee hearings demonstrated the crushing debt burden 
faced by students coming out of college. I can tell you about this debt 
burden from Delaware families. I am sure I am not alone. To this end, 
the Finance Committee restores the student loan interest deduction in 
the Taxpayer Relief Act of 1997. This bill goes another step further 
and simplifies and expands the deduction for more students.
  The Finance Committee does even more than address the cost of 
attending school. In response to concerns from Members on both sides of 
the

[[Page 1427]]

aisle, the Finance Committee agreed on some measures to provide relief 
in the area of school construction.
  The first provision is directed at innovative financing for school 
districts. It expands the tax-exempt bond rules for public-private 
partnerships set up for the construction, renovation, or restoration of 
public school facilities in these districts. In general, it allows 
States to issue tax-exempt bonds equal to $10 per State resident. Each 
State would be guaranteed a minimum allocation of at least $5 million 
of these tax-exempt bonds. In total, up to $600 million per year in new 
tax-exempt bonds would be issued for these innovative school 
construction projects.
  This provision is important because it retains State and local 
flexibility. It does not impose a new bureaucracy on the States. It 
does not force the Federal Government to micromanage school 
construction.
  The provision is also important because it promotes the use of 
public-private partnerships. Many high growth school districts may be 
too poor or too overwhelmed to take on a school construction project 
itself. But with these bonds, these districts can partner with a 
private entity and still enjoy the benefits of tax-exempt financing.
  It is worth noting that there already is a significant Federal 
subsidy for school construction. Under current law, States and 
localities can issue debt that is exempt from Federal taxation. This 
benefit allows them to finance school construction by issuing long-term 
bonds at a lower cost than they otherwise could.
  Moreover, the evidence shows that States and localities are taking 
advantage of this benefit. In the first 6 months of 1996, voters have 
approved $13.3 billion in school bonds, an increase of more than $4 
billion over the first 6 months of 1995. The bottom line is that many 
States and localities are doing their homework, passing bonds, building 
and renovating schools, and enjoying favorable treatment under the 
existing Tax Code. They are doing all this without significant Federal 
involvement.
  I do not have to remind colleagues that school construction has 
always been the province of State and local governments. President 
Clinton himself stated in 1994 that the construction and renovation of 
school facilities has traditionally been the responsibility of State 
and local governments, financed primarily by local taxpayers. In that 
respect, I agree with the President.
  Well, there is a second bond provision in this bill. That provision 
is designed to simplify the issue of bonds for school construction. 
Under current law, arbitrage profits earned on investment unrelated to 
the purpose of the borrowing must be rebated to the Federal Government. 
However, there is an exception, generally referred to as the small 
issuer exception, which allows governments to issue up to $5 million of 
bonds without being subject to the arbitrage rebate requirement. We 
recently increased this limit to $10 million for governments that issue 
at least $5 million of public school bonds during the year.
  The provision in the Finance Committee bill increases the small 
issuer exception to $15 million, provided that at least $10 million of 
the bonds are issued to finance public schools. This measure will 
assist localities in meeting school construction needs by simplifying 
their use of tax-exempt financing. At the same time, it will not create 
incentives to issue such debt earlier or in larger amounts than is 
necessary. That is a type of targeted provision that I believe makes 
good sense.
  Finally, as we all know, the Tax Code is too complex. As chairman of 
the Finance Committee, simplification of the Tax Code is one of my top 
priorities. This Finance Committee bill provides for coordination 
between education IRAs, prepaid tuition plans, the HOPE scholarship, 
and lifetime learning credits. This provision will mean that parents 
will not lose the benefit of the HOPE scholarship and lifetime learning 
credits when they use an education IRA or a prepaid tuition plan.
  It is clear that the Finance Committee bill contains numerous 
important provisions for the American family.
  As I have already said, many of these measures are ones the Senate 
passed last year. Anyone--students or parents--who is on the front line 
dealing with the cost of a quality education must have been 
disappointed in 1997, in 1998, and in 1999 when the President failed to 
agree to give any student or parent all the tools they needed.
  American families understand the need for these measures. American 
families have now been waiting for several years. Let us not disappoint 
them any further. Let's not keep them waiting any longer. Let's move 
forward. Let's pass the Finance Committee bill now.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, it is now Wednesday, the 23rd of 
February. It is just about a week after the President of the United 
States sent his budget to the Congress where he outlined his request of 
the Congress for a very extensive education priority--more than $4.5 
billion measured just in financial terms over the previous years--
specifying in great detail, the priorities he placed in strengthening 
our education system.
  I think any American who listened to the President's State of the 
Union Address would have to conclude that the President spoke for all 
Americans when he said the primary priority for all Americans was in 
the area of education and also that we ought to try to find 
partnerships where the Federal Government can work with the States and 
local communities in order to strengthen our K through 12 education 
system. Both the President and all of us in this Congress understand 
that we have some very important pieces of legislation before the 
Committee on Health, Education, Labor, and Pensions. We will 
reauthorize the ESEA, a composite of different pieces of legislation, 
that is primarily targeted in terms of the most disadvantaged children 
and children in greatest need.
  I, as ranking minority member of the Committee on Health, Education, 
Labor, and Pensions, want to take this time now to commend our 
chairman, Senator Jeffords, for the time he has taken to try to examine 
and bring that legislation as a priority item to the floor of the 
Senate so we can take action. Even though we are in the Senate for a 
relatively short period of time, we are going to have the opportunity 
to debate that legislation, which primarily is $8 billion, which is 
focused on the neediest schools and poorest children.
  There are other funds in terms of school construction. There are 
other funds in terms of math and science programs. There are additional 
funds in the Elementary and Secondary Education Act. That has really 
been the vehicle on which I think most of us thought we would begin the 
debate in this Congress on the issue of central importance to the 
American people--on education.
  I can say, as someone who has served on the education committee now 
for 38 years, that we have had a remarkable sense of bipartisanship in 
working through education. It has only been in the last 10 years we 
have even voted in the committee. We had votes on the floor of the 
Senate. But by and large, under the leadership of Bob Stafford, a 
Republican from the State of Vermont, under the leadership of Claiborne 
Pell, a Democrat from Rhode Island, and even back to the period of 
Lister Hill in the early 1960s when many of these pieces of legislation 
were initially passed, we didn't really have a great deal of 
partisanship. It was understood that education was something on which 
we freed ourselves from involving partisan disputes. It has only been 
in the most recent times we have had that.
  That doesn't mean a good debate and discussion on education policy is 
not helpful in terms of trying to find out the most sensible and 
responsible ways we would proceed. But it does come as some surprise to 
the members of our committee, quite frankly, that we have had some 20 
days of hearings and we are in the process of attempting to mark up 
this major piece of legislation and bring it to the floor so we can 
have

[[Page 1428]]

a full debate and discussion on the measure.
  Just to put this tax legislation in some perspective, the President's 
budget in terms of education will be about $40 billion this year, $4.5 
billion over last year. The measure which is being offered on the floor 
of the Senate as the principal Republican measure comes to 
approximately $225 million per year--$1.2 billion over 5 years.
  Not that you can't do a good deal with $1.2 billion over 5 years, but 
when we are talking about the magnitude of our involvement in terms of 
what the parents of this country have said they want to have happen in 
their local schools and local communities across this country, I am 
somewhat amazed. I am amazed that the Republican leadership would 
recommend--as they did and as is their power to do--that we are now 
considering this legislation of $1.2 billion over 5 years, $225 million 
a year, that will provide an average benefit of $7 per family, 
according to the Joint Tax Committee, which is neither Republican nor 
Democrat.
  We are now 4 weeks into the session, I can't believe we have any more 
important priority for the Senate than the issue of education. We 
should be debating real solutions to real problems, such as overcrowded 
classrooms, crumbling facilities and unsafe school buildings, and the 
lack of qualified teachers in classrooms, accountability for results, 
and adequate after-school opportunities.
  We certainly have been waiting to debate the issue of health care. I 
look forward to our meetings as a member of the conference committee on 
the Patients' Bill of Rights for next week. But that was long past in 
the Senate last year. We were just about getting to it.
  We still have not been willing to address a minimum wage increase for 
the hardest working members. We always hear from the Republican 
leadership that we haven't the time to debate a 50-cent-per-hour 
increase for minimum wage this year and 50 cents next year. We haven't 
the time to debate that, although we are committed this afternoon to no 
votes. We are not able to debate an increase in the minimum wage for 
the 12 million Americans--mostly women benefit, mostly children 
benefit, mostly men and women whose skin is not white benefit. We don't 
have time to debate that. No. We haven't the time in the Senate to do 
it the fourth week into the session. No. We are going to debate this 
issue which is valid at $225 million--which we ought to be about 
debating as well.
  I want to review this very quickly. As I say, if we ask parents back 
home what they are most concerned about, what comes out on every single 
review about things that the parents are most concerned about, it is 
discipline and safety in the schools.
  It is no surprise that under the most recent studies in 1999, the top 
concerns of parents are safety and discipline in the schools--safety 
and discipline in the schools.
  With the relatively small amount of resources we provide to local 
communities, 7 or 8 cents out of every dollar, what can we do in the 
Senate to help local communities have greater safety and discipline in 
the schools? That is what parents are concerned about. That is what we 
want to debate. It is on that which we want to call the roll. But no, 
we will debate whether there will be tax provisions that benefit some, 
to the tune of $225 million, an average of $7 per family.
  It is a shame to mention the polls because it is self-evident what 
parents want is a well-trained teacher in every classroom for their 
children. We don't need a poll for that. They want teachers who know 
how to teach, who know the importance of support, and teacher mentors 
who help in the classrooms. They want smaller class sizes. That is the 
way to deal with discipline. That is the way for academic achievement 
and accomplishment.
  We can debate what the records are with the STAR programs in 
Tennessee and other States that show significant academic achievement. 
Why are we not supporting those? Why do we not take programs that 
benefit children and replicate them? No, no, we have to debate this 
other piece of legislation, the $1.2 billion over 5 years. We cannot 
debate class size, we cannot debate improving the quality of education, 
we cannot debate afterschool programs, we cannot debate modernizing 
schools, we cannot debate how to assist special needs children. No, we 
cannot do that.
  What do the various important bipartisan studies show? On the 
priorities for parents, No. 7 is creating educational savings accounts 
to help parents pay for educational expenses for children. That is what 
we are debating.
  No. 6, modernizing and rebuilding schools and wiring all classrooms 
for computers and Internet. That is a priority--the digital divide. 
Make sure every public school will be included on the Internet; make 
sure all the curriculum will be adequate in order to be able to teach 
these children; and to make sure the teachers know how to use that 
technology.
  No. 5, establish national academic standards and tests for students. 
More and more of the States are doing so. Almost all of the States have 
done it in certain classes, even this year.
  No. 4, reduce class size to 18 students in grades 1 through 3.
  No. 3, increasing the salaries of teachers. Are we debating that this 
afternoon? No, we are talking about the IRAs for parents that will be 
valued at $7 per family. We are not allowed to have any of these 
amendments or vote on them this afternoon.
  No. 2, train teachers in technologies, computers, and Internet.
  No. 1, establish national certification standards for teachers, 
meaning we will have good teachers in every classroom.
  That is what American parents want. That is what the Democratic Party 
wants. That is what we ought to be debating on the floor of the Senate 
this afternoon. It is on that which we ought to call the roll.
  But no, no, we are working on priority No. 7, to create educational 
savings accounts to help parents cover those expenses for the children.
  I think this is a great tragedy this afternoon. If we accept the 
Coverdell bill this afternoon, I will not vote for it. I believe if we 
are going to have the $1.2 billion, it can be better spent getting more 
qualified teachers, smaller class sizes, afterschool programs, 
computers, special needs children.
  If we pass the $1.2 billion program, it will not mean a single better 
trained teacher in any classroom in this country. None. It will not 
mean a single smaller class. It will not be an afterschool program. It 
will not provide help and assistance to special education needs 
children. It does not help any of the older schools that are crumbling. 
It does not provide a new computer in a classroom. It does not make a 
school safer. It does not stop overcrowding. It does not move children 
out of some of the trailers and into the classroom. It does not respond 
to what the General Accounting Office pointed out is the $112 billion 
needed to make the basic schools livable in our society. We do not add 
a nickel to any of those priorities. It does very little in terms of 
providing help and assistance to the children in the public schools.
  What are the various groups saying? Not that we ought to be dictated 
to by the various groups; we do not find real support from the primary 
groups interested in working with the Congress. We can find some 
support if this were to be used in terms of higher education, as an add 
on, but we do not find support from teachers; we do not find support in 
terms of the Chief State Schools Officers, or the Council of the Great 
Schools; we do not find support in terms of any of the special 
education programs; we do not find support with the parents; we do not 
find support with the school boards; we do not find support with a 
number of groups--I have a list of over 75.
  My regret is that we are being denied the opportunity to get into the 
more substantive matters that are of central importance to parents 
whose children are going to the public schools.
  We ought to have a good, sound debate about what we are going to do 
to have better trained teachers. With scarce resources, who wants to 
put funding into teachers, including the recruitment of teachers, the 
training of

[[Page 1429]]

teachers, the holding of teachers, teacher mentoring and support for 
upgrading the skill of teachers--the whole range of different 
suggestions that have been made primarily by those who are in the 
teaching profession? We ought to be listening to those who entered the 
profession. We ought to be debating those issues.
  Smaller class size, we had good debate on that. We had some division 
within the body on that--the first time the Murray amendment was 
actually accepted. Republicans were falling over themselves trying to 
accept credit for it, and then fought it the next year. I do not know 
where they will be this year. But it makes a good deal of sense, and 
the more evidence we get the more that is demonstrated.
  We need to do more to help schools and communities develop 
constructive afterschool activities to keep students off the streets, 
away from drugs, and out of trouble. These programs have been endorsed 
from an education point of view and a law enforcement point of view. 
Funding has been significantly increased in the President's proposal. 
That is a legitimate proposal and we ought to debate whether we want 
scarce resources focused that way.
  What are we going to do to make sure the neediest children in our 
country, those who come from the poorest areas of our country, have 
access to computers? That is a matter of national technology. Are we 
going to take new technology, and at the end of 10 years, those who 
went to schools that had the best in technology and teachers are going 
to be light-years ahead of another group of students, whose skin is 
probably not white, who are from underserved areas? We ought to be 
debating that. Is that before us on the floor of the Senate?
  There are Republicans and Democrats who have good views on this. We 
ought to be working together to find out the solutions to these 
problems. But, oh, no, we are just going to be debating this afternoon. 
We are just going to be debating what is No. 7 in all of the polls, 
creating educational accounts, something that is valued at $225 
million.
  I know probably our colleagues say: That may not be a lot to you, 
Senator. We don't want to bother with that answer. We know we are 
spending $40 billion this year in a Federal budget and now we are 
engaged in our first education debate, which is how we are going to 
spend $225 million of it.
  Does that say something about what the leadership wants for debate 
and discussion on issues of education? I think it does.
  We are prepared to meet with the chairman of our committee and follow 
the committee process and come to the floor of the Senate with 
responsible recommendations and to debate those until we are able to 
have a resolution of those. But that process has been short-circuited, 
evidently, by the leadership of the Republican Party. They are 
basically saying no to its chairman, the chairman of the education 
committee--no, we are not going to do it that way; we are going to do 
it some other way.
  We are going to have to deal with what we are faced with, and I think 
there are many more important educational proposals we ought to be 
debating. We ought to be debating them this afternoon. We ought to be 
taking rollcalls on these issues. They are of central concern.
  Then we ought to move on to many of these other issues that have been 
effectively side-tracked. We cannot get a bankruptcy conference 
appointed because I have every intention to try to instruct the 
Members, when they go to the conference on bankruptcy, they are to 
change the provisions that have been included in the bankruptcy bill to 
make sure the neediest American workers are going to get a fair 
increase in the minimum wage. The majority leader will not call that 
up. We cannot deal with that.
  We are putting off the Patients' Bill of Rights. We cannot begin the 
debate and discussions on the prescription drug bill.
  We have been watching these debates that have been taking place, 
Democrats and Republicans. Many even in this Chamber have been in 
States where seniors have been gathering together, talking about the 
importance of a prescription drug benefit. We are not even able to get 
a good debate and discussion on these measures in the Senate.
  Four weeks into the session and this is our record so far: we have 
the Marianas immigration bill which was passed overwhelmingly; we have 
a nuclear waste bill, which is legislation that is going to be vetoed; 
and we have a conference report on bankruptcy. We have had 11 votes, 
including 3 nominations. It is already the end of February.
  You cannot get away from where responsibility lies to address 
America's agenda. On this side of the aisle we want to address the 
issues of education. We want to address the issues of health care. We 
want to address the issues of prescription drugs for our senior 
citizens. We want to address the issues that are of central concern to 
working families. We are being denied that opportunity now, and we are 
going to continue to point out as we go through this legislative 
process each and every time that we are being denied. We are going to 
work feverishly to try to do the Nation's business and not be denied 
bringing these matters up on the floor of the Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I would like to point out that what we have 
before us is a matter within the jurisdiction of the Finance Committee. 
As I said in my opening remarks, this bill does not answer all problems 
of education. I am not one to try to base what I do on what a 
particular poll shows today or tomorrow. I am trying to help satisfy 
some of the pressing educational problems facing America.
  When I go home to my little State of Delaware, a matter of real 
concern to families, whether their children are teenagers, in secondary 
or in grammar school, is how the family can afford to send their 
children to quality colleges. This is a key problem facing the typical 
American family. Make no mistake about it. I defy any one of you to go 
home and talk to parents, talk to your neighbors who have children. 
Time and again they will tell you how difficult it is to have the funds 
necessary to pay for college education.
  So I do not apologize for bringing this kind of legislation before 
us. This is a matter within the jurisdiction of the Finance Committee. 
I might say, we have had this legislation reported out since last May. 
I am pleased and delighted we are having the chance to debate and vote 
on it. Yes, it does not settle the problems of teachers' training, the 
size of classes, or many of the other matters mentioned by my 
distinguished colleague from Massachusetts. I do not deny those are 
important problems, but they are matters within the jurisdiction of 
other committees. What I seek to do today is to bring to the Senate 
legislation that will be most helpful to the typical American family, 
meeting part of that great American dream of sending their children on 
to higher education.
  We have purposely tried to devise the kind of program that takes 
advantage of the miracle of compound interest. The question is not how 
much it costs the Government. The question is how much does this 
legislation help the typical American family? We all know the miracle 
of compound interest. If families will start when their children are 
small, saving in educational IRAs, up to $2,000, this will provide 
significant resources, tremendous amounts of money to help them send 
their children to school.
  Yes, this legislation does not answer all problems of education, nor 
was it intended to. That is not within the jurisdiction of my 
committee. But I do say it does seek and will address some of the most 
important problems facing the American family.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Coverdell). The Chair recognizes the 
Senator from New Hampshire.
  Mr. GREGG. Mr. President, I begin by congratulating the Senator from 
Delaware for bringing this bill forward again, and the Senator from 
Georgia, who is presently in the Chair, for having been the original 
author of this bill.

[[Page 1430]]

  This is a very strong piece of legislation which, as the Senator from 
Delaware has so effectively pointed out, is absolutely critical to the 
parents of this country as they try to assure the one thing that is 
most important in most parents' lifestyles in dealing with their kids, 
beyond giving their kids love and a sense of how to deal with reality 
and a sense of values, and that is the ability to get a good education. 
The ability to get a good education, once you get out of the public 
school system in our country today, is tied, to a great extent, to your 
ability to pay for that education. Postsecondary school education, even 
under public school systems, can be extraordinarily expensive.
  These college savings IRA accounts give parents more flexibility. In 
fact, there was an ad I saw on TV last night which brought home the 
reality of this so effectively. It showed a baby being born. The theme 
of the ad was: The first image that comes across the parents' minds is 
the wonder of the baby. The second image that comes across the parents' 
minds is, $210,000 is flashed up on the screen because that is what it 
is going to cost to educate that child, to have that child, who was 
just born, go to college. The theme of the ad is: What am I going to do 
to pay that?
  One way to address it is to pass this bill which was passed and, 
regrettably, rejected by the Democratic side of the aisle and the 
President. It is before us again so we can give parents some relief.
  Nobody is claiming this is the entire rug or the entire makeup of the 
issue of how we address education. No one is claiming that this is the 
whole quilt. This is one block within the quilt, one item of the quilt 
in how we improve education in this country today. It is an important 
item, and it is an important statement to make that we, as a Congress, 
are going to, once again, put forward this initiative which we put 
forward last year as part of our efforts.
  A couple of Members from the other side of the aisle have come to the 
floor today and said they would rather debate something else. I guess 
they do not think college education is that important. They think 
something else is more important.
  One Member came to the floor today, the Senator from Connecticut, and 
said we need to debate special ed; we need to put more money into 
special ed. We should not be putting more money into this program; we 
should be putting more money into special ed.
  That is an unusual argument to hear from the other side of the aisle 
because there is a certain inconsistency and hollowness to that 
argument. Let's go through the numbers as to special ed and this 
Congress since the Republicans have taken over and since we have had a 
Democratic President.
  In 1997, the President sent up a budget. How much of an increase did 
he have for special ed? He had a 12-percent increase. The Republican 
Senate made a commitment. It said: That's not enough; we have to 
address special ed. We are going to put more dollars into special ed.
  As a result, the Republican Congress put forward a 34-percent 
increase in special ed. Why was that? Because we see special ed as 
being the single largest unfunded mandate, outside the environmental 
area, this country has. Originally, the agreement was, the Federal 
Government was going to pay 40 percent of the cost of special ed. When 
the Congress became Republican, the cost that was being paid by the 
Federal Government was 6 percent, and it had not been improved at all 
by the Democratic Congress or by a Democratic Presidency.
  We made a commitment as a Republican Congress that we were going to 
get that spending up so more special ed dollars would flow back to the 
States, so we could fulfill our obligations under special ed of paying 
a larger percentage of that 40 percent, so local dollars could be freed 
up for the purposes of spending them on local priorities rather than 
having local dollars spent paying the Federal share of special ed.
  As I said, in 1997 the Democratic leadership in this Congress, and 
through its President, proposed a 12-percent increase in special ed. We 
raised special ed spending by $783 million that year, or 34 percent. I 
am pointing this out because the Senator from Connecticut said we have 
to spend more money on special ed; we should not be talking about this 
program on the floor; more money should go to special ed. I think that 
rings hollow in light of these numbers.
  In 1998, the President put forward a budget with a 4-percent increase 
in special ed funding. That is essentially enough to pay for all the 
salaries of all the administrators they want to put on the books. The 
Senate increased special ed spending that year under a Republican 
initiative by 22 percent, $698 million.
  In 1999, it was the same story. The President sent us a budget 
supported by the Democratic leadership. How much of an increase did 
they ask for in special ed spending? This time they asked for a .03-
percent increase in special ed funding.
  The Republican majority said: No, that is not acceptable; we are 
going to increase special ed funding again. We increased it over the 
baseline by 13 percent in 1999, $510 million.
  Again, in the year 2000, this year, the President increased special 
ed funding by what? Seven percent. We said: No, that is not acceptable; 
more special ed dollars are needed to meet the obligation of the 40-
percent commitment we made. So the Republican Senate, with a Republican 
initiative of this Congress, increased special ed funding by $678 
million last year for a 15.7-percent increase.
  The total increase under the Republican leadership in this Congress 
in special ed funding has been over 100 percent since the year 1997. We 
have gone from $2.6 billion up to over $5 billion we are projecting in 
this coming year in special ed funding.
  The proposals coming from the other side of the aisle--and we just 
heard this presentation that said we should be spending more on special 
ed--were to increase special ed funding over that period by essentially 
nothing.
  The Republican majority has taken the issue of special ed funding. We 
have fulfilled an obligation. We are moving toward full funding of that 
obligation made by this Congress in 1976 when the special ed bill was 
first passed, and as a result we are doing what should be done, which 
is to fund special ed at an aggressive level, something which we have 
not seen coming from the other side of the aisle or from the 
administration.
  When I hear folks come to this floor and say we should not be taking 
up this bill, we should be funding special ed, there is, I think, a 
certain hollowness to that argument.
  The Senator from Massachusetts argued we ought to be taking up this 
item of education, that item of education, another item of education, 
and why haven't we taken up all these items of education; we have not 
done anything in this Congress, including minimum wage.
  I note, the bankruptcy bill did have minimum wage in it, which we 
passed, which the Senator, I guess, does not like, and that is why he 
considers we have not taken it up. The fact is, all the educational 
items he has listed are presently moving through committee and will be 
discussed in committee and then will be brought to the floor, as the 
Senator knows.
  The Elementary and Secondary Education Act is on the verge of being 
marked up in committee. In fact, I think the Senator probably, as of 
today or maybe tomorrow, will be putting together his amendments and 
will be getting ready for a major markup of that bill the first week in 
March, which will take up almost all the issues he outlined as not 
being addressed by this Congress.
  Would he want us to skip the committee and just bring that bill to 
the floor without any committee action? As a senior member on the 
Democratic side of that committee, I seriously doubt that. That bill is 
not being vetted in committee. I cannot imagine the Senator would want 
those issues, which are very complex, very important, and involve 
substantive discussions of education policy, to be thrown out on the 
floor without committee action. But that seems to be what he is

[[Page 1431]]

suggesting, that we should have just thrown the bill before the Senate 
rather than putting it through the proper committee procedure and 
taking action on it, which is what he has proposed. He knows it is 
going to be taken up in committee and then brought before the Senate 
and worked on I suspect for a week or a week and a half, maybe 2 weeks.
  Why is this bill being considered? Because this bill has gone through 
the committee process. The chairman of the committee which has 
jurisdiction over this piece of legislation is presenting the bill. 
That is why it is here.
  If the ESEA bill was ready, it could be brought to the floor, but the 
ESEA bill isn't ready. It will be ready fairly soon. It is going to be 
one heck of a good bill on which to debate education policy. I will not 
deny that.
  The differences between our side of the aisle and the other side of 
the aisle on the issue of elementary and secondary education in this 
country are fairly significant. We happen to think after you have spent 
$100 billion on a program, and kids can be shown to have obtained 
absolutely nothing from that money, that you have children essentially 
who are still locked into failure, where low-income kids are still 
getting the same terrible education children got 20 years ago.
  Even though we have spent $100 billion on education, unfortunately, 
the children with whom we started out 20 years ago in this program have 
ended up coming through a system which has failed them. We are still 
sticking kids into that system. We are still running them through that 
system, the same way it has always been--counting bureaucrats instead 
of counting results; not focusing on the child but, rather, focusing on 
systems. That is a failure; no question about it. We are going to get 
to discuss that failure at some length on this floor, as we will in 
committee. That is going to be a big issue.
  But to simply bring the ESEA out here and throw it on the floor, as 
the Senator from Massachusetts, the ranking member, seems to be 
implying we should do before we take up this bill, abandons the 
legislative process.
  The legislative process relative to this bill has worked. It has gone 
through committee. It has actually gone through committee and through 
the Senate and it has been vetoed. Now it is back on the floor. Having 
gone through the committee, it has come back to the floor to be heard 
again. It makes sense that we should be taking up this bill.
  I think the arguments by the Senator from Massachusetts, as much as I 
respect his understanding of the legislative process--he is one of the 
people in the Senate who knows the most about the legislative process 
and has been here the longest of anyone, I guess, other than Senator 
Thurmond and Senator Byrd. He understands the legislative process, and 
I am a little surprised, I guess, that he would make the 
representations he did relative to why this bill is on the floor versus 
the other issues he outlined as being his preference for being 
considered on the floor.
  We will get to those other issues. We will get to them aggressively. 
We will have a full debate. It is going to be a very energized debate. 
There will be a lot of differences of opinion. It will be good for this 
country because the education debate needs to be aired on this floor 
with intensity and with a full hearing because it is such a critical 
issue for our Nation.
  But as of right now, the bill on which we are ready to proceed is 
this bill. In my opinion, we should not have a lot of ``straw dogs'' 
put up in the face of it. Let's pass this bill. It is good for parents, 
it is good for kids who want to go to college, and as a result it will 
be good for the country.
  I yield the floor.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER (Mr. Crapo). The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, just to respond to my good friend from 
New Hampshire, when we came back to the whole question of special 
education, I listened carefully to his remarks. And his remarks have a 
certain hollow echo, as well.
  I remember when the Republicans offered their $780 billion tax break 
a year ago. I offered an amendment that would have funded every special 
education program for 10 years. It would have reduced the $780 
Republican tax reduction by a fifth. Every Member of the body on the 
other side of the aisle voted against it.
  So with all due respect, that proposal made a good deal of sense. 
Every Member on the Democratic side of the aisle said: It is more 
important to fund the special education needs of every special 
education program across this country, over the next 10 years, than to 
have a tax break. Every Republican voted against that. So with all due 
respect, we ought to at least begin to remember our history on this 
particular provision.
  I listened to my friend from Delaware talk about the two different 
provisions. He talked about the educational IRAs, which my remarks were 
directed at, and then he talked about the section 127 provisions which 
provide the education assistance for undergraduate and graduate 
studies, and also about the prepaid tuition plans. Those are in the 
administration's budget.
  I see both my friend from Georgia as well as Senator Wellstone 
waiting to speak. But if there had been more time, I was going to 
review what has been done with regard to President Clinton and this 
Congress over the last 7 years in terms of offering educational 
opportunities. There has not been an administration in the last 30 
years that has done a better job in terms of opening up and being 
responsive to the needs of students. It is a very proud record.
  So those particular provisions of what they call the extenders of 
various tax provisions are going to be worthwhile to work out in a 
bipartisan way. Certainly there will be credit for all those who are 
going to be involved in it later on. But the principal proposal which 
has been advanced, the education IRAs, which was discussed earlier as a 
vehicle for strengthening and improving public education, it does seem 
to me that the American people want a debate and discussion, in a 
comprehensive way, about how we are going to strengthen public 
education, and what the Federal Government is going to do, and what the 
States are going to do, and what the local communities are going to do.
  Whatever we do in the Congress, I think there are certain priorities 
which the public has. They want to know how we are going to ensure that 
there will be a well-trained teacher in every classroom? They want 
smaller class sizes, particularly in the earlier grades. They want to 
make sure we have afterschool programs. They want to make sure we are 
going to have mentors and supporters for those teachers, particularly 
those who serve in underserved areas. They want to make sure we have 
the technology, and the curriculum with that technology, and well-
trained teachers to use that technology.
  They want us to be sensitive to the digital divide so we do not use 
technology to open up a whole new spread between the haves and have-
nots. They want to make sure there is parental involvement. They want 
to make sure there is access to continuing education through college 
and that there is continuing training programs which will be necessary 
for the new jobs of the new century.
  I believe they want us to give emphasis and focus in terms of early 
education, including the expansion of the Head Start Program for 
children up to 3 years of age, on which this administration has placed 
emphasis, along with a number of Senators, in a bipartisan way, 
including Senators Stevens and Dodd.
  They want us, at the end of the day when we pass the legislation, to 
be able to answer the question: What did this legislation mean in terms 
of my son or my daughter? Whether it is a question of security in the 
classroom or whether it is access to guns getting into the classrooms. 
They want to have a comprehensive way of being able to say, look, there 
is some legislation. It isn't going to answer all of the problems. It 
isn't going to do everything, but at least it is something. We stand in 
support of those individuals who want to

[[Page 1432]]

use scarce resources at the national level to pump into this priority. 
Those are the people we want to see successful and we want to support. 
That is very reasonable.
  With a budget of some $40 billion and a $225 million program dealing 
with what will mean $7 per family to go to school, the idea that we are 
doing anything meaningful for families in this country who are 
interested and concerned about educating their kids is a disservice to 
the American people and a disservice to this process. That is why I 
have risen.
  I see my colleague and friend from Georgia and Senator Wellstone. I 
yield the floor.
  Mr. WELLSTONE. Mr. President, the Senator from Georgia wants to 
speak. I ask unanimous consent that I be allowed to follow the Senator 
from Georgia.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Georgia is recognized.
  Mr. COVERDELL. I thank the Chair.
  The good Senator from Massachusetts and I find ourselves, once again, 
in a prolonged discussion about tax policy that affects education. I 
have several comments to make with regard to that. Before I outline the 
reach of the legislation, I will respond to several remarks made by the 
Senator from Massachusetts.
  First, the Senator from Massachusetts indicated that the President's 
budget had $4.5 billion in new funding for education and that we are 
debating something that is worth some $200 million over 5 years. My 
data does not match his. Actually, in 5 years this legislation would 
use tax policy to relieve taxpayers, whether they are parents or 
employers or people who are in a State tuition program. It would be 
$4.3 billion in the first 5 years and almost $8 billion over 10 years.
  They really are apples and oranges. What we are debating is the 
relief of tax policy on top of what will ultimately become an increase 
in the education budget. In fact, if you are going to do it that way, 
you have to add these figures to what the President and the Congress 
ultimately decide is going to be the increase in the education budget, 
remembering that last year the Congress' increase in education was 
greater than the President's.
  It is not accurate to refer to one section of the bill we are 
debating. You have to refer to the entire section, A. And, B, they are 
not comparable figures. One is a discussion about how much of an 
increase you will have in the President's or the congressional budget 
for education, in addition to which, this is a proposal to 
significantly leave tax dollars in the hands of parents, employers, and 
students to help them pay for education, in addition to whatever the 
Federal Government is contributing.
  That is a major disparity in our presentation of the numbers.
  This is the third time, in essence, we have debated this. We hear 
this number, that this is only worth $7 to a family. When you leave it 
there, you distort the picture. Remember, the Senator from 
Massachusetts complimented the administration and the Congress, and I 
do as well, for the fact that we have already passed a $500-per-year 
savings account for higher education. This one section of this bill 
takes that proposal from $500 per year to $2,000, and it is for higher 
education or elementary education.
  My question to the Senator is this: Under that logic, if this 
proposal is only worth $7 per family, then the President's proposal is 
only worth about $2.25 because what he and we have done so far is only 
one-quarter of what we are proposing to do here. If it is 
insignificant, why are we so tangled about it?
  Mr. KENNEDY. May I answer the Senator?
  Mr. COVERDELL. Certainly.
  Mr. KENNEDY. In my earlier address, I was using figures provided by 
the committee. I will refer to them and include them now, the 
Affordable Education Act of 1999. I look over at the estimated budget 
effects of the Affordable Education Act of 1999, as approved by the 
Senate Committee on Finance, May 19, 1999. I read it out to the year 
2004, and it is $1.156 billion. That is what we are basically talking 
about in terms of the IRAs.
  As I indicated earlier, you have some extenders with regard to 
graduate education which are in the President's program and 
undergraduate. If you want to add all of those programs in to get up 
closer to your $4 billion figure, that is fine. My point is, you have 
your $1.5 billion which comes to $225 million for the IRA, which comes 
to what I have talked about as $7 per family. I do think there is a 
better way of using the $1.5 billion than providing that kind of 
benefit to families that, according to the Joint Tax Committee, is $7 a 
family.
  The other provisions about which I should have been more precise are 
included in the broad scope mentioned by Senator Roth, which basically 
are a continuation of what they call tax extenders about which there is 
really no debate. This debate, primarily on Coverdell, has been about 
the creation of $1.2 billion, $230 million a year, effectively, for 
families, which would amount to $7 per family, whether we think that is 
the best way in terms of education policy. That is what I was getting 
at.
  The pages are not numbered, but I will be glad to share those with my 
colleague.
  Mr. COVERDELL. I appreciate that. I think we are getting close to a 
common line. My point was that the legislation we are debating has a 
value of $4.3 billion. It is apart from the President's proposed budget 
or what the Congress is going to do. This is in addition to whatever 
the Congress and the President decide, A. And, B, I don't think it is 
plausible to attack a $2,000-a-year savings account because of the $7 
figure, with which I take some exception. If you want to use it, that 
means what we have done is only worth $2.25 under the President's 
proposal, which is only $500 per year.
  The Senator from Massachusetts alluded in his remarks to a partisan 
debate. This is not a partisan debate on the proposal from the Finance 
Committee. It was passed out with Republican and Democrat Members. The 
principal cosponsor of the legislation is Senator Robert Torricelli 
from New Jersey, the principal cosponsor and a member of the Democratic 
Party in good standing. In addition, there are some 8 to 10 other 
Democrats who are on that side of the aisle in the Senate and are very 
supportive of this legislation.
  I was pleased by the Senator's remarks when he said the President has 
become interested in K through 12 because I really believe that is 
where the crisis in American education is. I am glad we are now talking 
about the same target. The crisis is not in higher education; it is K 
through 12. It is, in fact, the 30 and 40 percent of our students who 
are coming out of high school and are not effective readers and can't 
write well.
  The Senator from Massachusetts referred to polling data and listed 
some seven items that this particular poll enumerated as important. At 
one point, he said parents are not supportive of this. But in his own 
poll, the sixth or seventh most important desire on the part of parents 
was this.
  Many of the items in the poll that he cites are not in the 
jurisdiction of the Federal Government. We can debate that, and we have 
been debating that, for some time. Some of us would find some of those 
proposals not in our purview; but tax policy is and that was No. 6.
  I might also add that if you go down the list of items included in 
the bill that are helping employers deal with continuing education, to 
which the Senator alluded, this is a very high item in the poll--school 
construction is a high item in the poll.
  In other words, the items that are in this proposal react just as the 
Senator would have them to his poll. So I thought it was important 
there be some clarification of these points that were alluded to early 
on. Anybody watching this discussion needs to know that, in fact, this 
proposal augments the budgetary process.
  Now, let's talk about the proposal in general. What does it do? I 
have always been stunned by how little incentive it

[[Page 1433]]

takes to cause Americans to do huge things. The Senator is correct when 
he says the savings account is not a particularly large form of tax 
relief. It is not. It is about $1.2 billion over 5 years. Over 10 
years, it is $2.4 billion.
  What happens is, because we say you can open a savings account and 
we, the Federal Government, are not going to sock it to you by taxing 
the interest on the account, we are going to help you make a 
contribution to the work you do to educate your children--get these 
numbers--14 million American families will open this kind of account. 
They are the parents of 20 million children. That is almost half the 
elementary school population who will become involved in this concept. 
Their parents, and others, will save $12 billion over the next 10 
years.
  So in addition to all this funding the Senator from Massachusetts is 
talking about, we are putting into the education arena $12 billion 
more, and we didn't have to raise taxes one dime to do it, and the 
State didn't and the local communities didn't. This is voluntary. This 
is money given to education by loving parents.
  In my judgment, the $12 billion is worth three to five times the 
money the Senator from Massachusetts is talking about. Why? Public 
education money, we all know, is spread across a wide arena. A lot of 
it never sees a classroom. It doesn't know the name of a single 
student. It cannot get targeted to particular problems.
  If we pass this legislation, 14 million families will have an account 
and once a month some saving institution is going to send a notice to 
those parents that this is how much money they have in their account 
for Johnny or Jane. That almost beats the PTA because every month this 
family is being reminded of this resource it is collecting for its 
children.
  Now, I call these smart dollars. Why? Because it is like a laser 
beam; this money will be invested directly on the child and directly on 
the most pressing need the child has. You talk about the digital 
divide--families who have these accounts can close them; they can buy 
home computers; they can hire a tutor; they can deal with a special ed 
problem, a health problem, a transportation problem, or whatever it is 
the child specifically needs. This $12 billion--and I think it would be 
more--goes right to the target.
  These IRA accounts are entirely unique in one special way. Anybody 
can deposit money into the account--the parents, of course, or it could 
be the grandmother, sister, aunt, or it could be a next-door neighbor 
or a church; it could be a labor union; it could be a company. No one 
has even begun to calculate what ideas will emerge to build up these 
accounts. One can easily see an employer matching his employees and 
encouraging them to open these kinds of accounts.
  There is virtually zero downside to the accounts. Every segment of 
education in America will be a winner-- public education, private 
education, home schooling, you name it. These accounts will all infuse 
new resources for which the Federal Government will not have to 
appropriate a dime to get the job done: Fourteen million families, 20 
million children, a resource that is available to them from 
kindergarten through college, and thereafter if disabled. Public 
education wins. Private, home schooling, and every form of education 
wins. To me, it is mind-boggling that anybody would challenge the 
concept.
  The bill does more, as I was explaining to the Senator from 
Massachusetts. In States that have advanced tuition programs available, 
those proceeds to students will no longer be taxed. I might add that 
this suggestion came from the Democrat side of the aisle--a good idea.
  It will help encourage States to have State tuition plans, and it 
will encourage families to get in them because they don't eat it up in 
taxes when they use them to go to college. It is estimated that 1 
million college students will benefit from that plan.
  Everybody knows today that education is no longer a box--you finish 
high school, you finish college, and that is it. In today's rapidly 
changing world, it is an ongoing process.
  The legislation--which I think I heard the Senator from Massachusetts 
say the President agrees with--extends employer tax exemptions when 
they spend money to train employees on advanced education, and even on 
undergraduate and graduate education. It is worth $5,200 a year. It is 
estimated--I think this figure is low--that 1 million American 
employees will benefit from this legislation. It relieves students of 
taxes on the interest of their student loans. Through the work of 
Senator Graham of Florida, it makes it easier for local governments to 
build new schools. It is a very important part of the legislation.
  Again, if you take the list of the Senator from Massachusetts of what 
parents think is important, this legislation refers to almost every one 
of those arenas, and in the proper Federal way where we manage tax 
policy. We should make that policy more friendly to people dealing with 
education. It is not necessarily the Federal Government's role to 
decide exactly how we are going to build a school in my home State of 
Georgia.
  The Senator from Minnesota is waiting. I will finish in a couple of 
minutes so he may speak. I may speak some more afterwards.
  I want to relate that since we first debated this proposal and passed 
it in the Senate with 59 Senate votes--it would probably be higher 
today--a lot has been happening in America. The debate over the failure 
of kindergarten through high school is charging through the country.
  In my State, the Governor is a Democrat. He is fighting for an 
education revamp right now in the Georgia Legislature. It includes 
offering tenure. He is proposing for schools proven to certifiably fail 
that parents have a right to leave those schools. What better tool to 
help a family deal with that predicament if it comes about--and it 
will. We will have schools in a State that cannot cut it. And he is not 
going to force people to go to those kinds of schools.
  The most unconscionable policy in America is forcing families and 
children to go to schools that we know are failing. This legislation 
helps those families deal with that kind of problem, which is why, when 
you ask parents if they want to do this or not, it gets between 60 and 
70 percent approval. They understand that it is an opportunity, a 
voluntary opportunity--something important in America's government 
today--to help themselves, to help their families, to help their 
children. It allows everybody else in the country to help some kid 
somewhere --one of your employee's children, one of your union member's 
children, your benevolent association's children, or a police officer 
who goes down. A community could open this up and have $70,000 sitting 
there when that kid wants to go to school. Think about it.
  The Senator wonders why we are debating this. It affects half the 
population in elementary schools in the United States as it relates to 
tax policy. That is why.
  Mr. President, I yield the floor. I think under a previous unanimous 
consent the floor will go to the Senator from Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I appreciate the Senator's remarks. I 
definitely want to respond. Senator Schumer is on a tight timeline. He 
asked whether he could speak for 5 minutes. Then I would follow him. I 
ask unanimous consent that Senator Schumer be allowed to speak for 5 
minutes and I be allowed to follow Senator Schumer.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New York is recognized for 5 minutes.
  Mr. SCHUMER. Thank you, Mr. President. I thank both the Senator from 
Georgia and the Senator from Minnesota who was gracious to yield time.
  Mr. President, I do not profess to be an expert on the bill that my 
good friend, the Senator from Georgia, has introduced. I came on the 
floor because it seems to me that education is not only the No. 1 issue 
that most Americans feel is important, but it is the No. 1 issue that 
is facing the future of our country.

[[Page 1434]]

  We have a huge number of different problems in education. We have 
overcrowded classrooms. My children attend the public schools in New 
York City, I am proud to say. I am proud to say they are getting a good 
education. When my daughter was in kindergarten, she had to share that 
kindergarten room with another class. We have a desperate shortage of 
classrooms. We have a desperate shortage of teachers coming forward. 
The average age of a teacher in America is 50 years or older. Every 
year we are going to need more and more teachers in our schools.
  We have a desperate shortage of standards. All too often people 
graduate from course work and can't carry the load. In an economy where 
education and knowledge seem to be so important, we don't have any good 
Federal ideas on what to do. There are some who might say we don't need 
Federal ideas. I don't question the right to debate this proposal, nor 
do I doubt what the Senator from Georgia has said in that it will help 
lots of families. I am aware of the problem.
  I introduced legislation, along with the Senator from Maine, to make 
college tuition up to $12,000 tax deductible because of the strain. It 
is another way to go. It might benefit some families more than the 
legislation of the Senator from Georgia. It might benefit some families 
less. But it is along the same line.
  But I agree with my colleague from Massachusetts. Why are we doing 
this piece of legislation, worthy though it may be, when we have all 
these issues out there? Why aren't we taking a month? It is certainly 
worth our Nation's future to take a month and debate all the 
educational issues, see where our priorities are, and see if this 
proposal from the Senator from Georgia, into which he has put a lot of 
effort and a lot of work, comes at the top, the middle, or the bottom 
of our priorities. Is it going to do more than spending the same amount 
of money on new classrooms or new teachers or mentor training? Is it 
going to do more than, say, raising teachers' salaries because it is 
awfully hard in large part in this country to get a qualified person to 
teach our young people math and science when the private sector pays 
them double. Is it worth more than having our National Standards Board 
come up with real national standards, and should we be debating that 
issue?
  These are questions that I think are vital to the future of our 
country and to the future of this Chamber.
  These are questions that get to the very heart of a fundamental 
principle with which I think most Americans agree. We want to stay the 
No. 1 economic power in the year 2025.
  In my judgment, to bring up one particular issue that stands in 
isolation and not be allowed to debate the whole panoply of educational 
issues and vote on them together as a package is not how a good 
business would operate. It is not how a good volunteer organization 
would set its priorities. A family sitting around the dinner table 
would not say let's just discuss vacation in our budget and then not 
discuss what we have to pay for food, for shelter, and for 
transportation.
  Again, I respect my friend from Georgia. We have worked together on 
many pieces of legislation. He is sincere in this effort. I simply say 
to my colleagues, this is no way to come up with a real and desperately 
needed education policy in 21st century America.
  I thank my colleague from Minnesota for yielding.
  Mr. COVERDELL. Mr. President, I will only take a minute to respond to 
the good Senator from New York.
  The point is, the legislation had come out of the Finance Committee. 
No one is suggesting this is the only education debate. This bill is 
ready. This bill has been voted on by the Senate before; 59 Senators 
have already supported this. This is vetted.
  Some of the issues the Senator alluded to certainly are not vetted; 
for example, the Federal Government taking on local teacher salaries. 
The good Senator from New York knows that will be highly controversial.
  This is ready. There is not an ulterior motive. The education bill 
has not come out of the education committee; both Republicans and 
Democrats are still trying to reach a consensus. I understand the 
desire to move to other issues, but I do not see that as making this an 
inappropriate discussion for the Senate.
  I might add that the neighbor of the Senator, Senator Robert 
Torricelli, is the principal cosponsor.
  I have enjoyed, as well, working with the Senator from New York.
  The PRESIDING OFFICER (Mr. Sessions). Under the previous order, the 
Senator from Minnesota is recognized.
  Mr. WELLSTONE. Mr. President, I appreciate the remarks of Senator 
Schumer and what Senator Coverdell had to say. Let me move away from 
procedure and whether the bill should now be debated and go to 
substance.
  First of all, the idea that up to $2,000 in savings can be put into 
education, from my point of view from some of the most hard-pressed 
people in Minnesota--Minnesota is divided, metro and then inner city, 
where a lot of people are struggling economically. Unfortunately, in 
Minnesota and I think around the country, we are moving to two 
Americas. In rural America, people are not going to have the $2,000 
savings. They will not even get close. They do not have it to put in 
savings.
  Let me be clear in terms of which families will be able to benefit 
and which will not.
  I ask the Senator from Georgia, is it a deduction people make?
  Mr. COVERDELL. No, it will not be shown as income.
  Mr. WELLSTONE. Just from a tax progressivity point of view, those 
with the highest liability with less income shown pay less. I don't see 
the large part of this benefit going to the most hard-pressed families.
  That is my first point. That is substance, not parliamentary, when 
the bill is out on the floor.
  Mr. COVERDELL. Will the Senator yield?
  Mr. WELLSTONE. I am happy to yield to the Senator.
  Mr. COVERDELL. I point out two things. The scope of the families who 
are eligible for the account is identical to the President's criteria 
for who is eligible for the account. That is one quarter the size we 
have already passed. If there is no difference, it is identical to the 
criteria of the President.
  Somewhere along the line, we all have to determine what the criteria 
are, so it is means tested. I frankly have some resistance to that, but 
we have accepted it.
  No. 2, the account allows other parties to contribute. The community 
described by the Senator is in all of our States. Certainly we have a 
large community such as that in Georgia, but an inner-city church, a 
labor organization, an employer, other family members, can make these 
accounts real.
  And last, from the very communities the Senator is talking about are 
the loudest voices for Congress to do this.
  Mr. WELLSTONE. Mr. President, I appreciate what the Senator said, and 
I will be pleased to yield for other questions as well.
  First, I point out to the Senator on whether or not this is, roughly 
speaking, the same benefit as in the President's proposal, that does 
not move me as a Senator as much. Having done a lot of community work 
with low- and moderate-income people, I know for a fact that most of 
the people will not have anywhere close to $2,000 to put into savings. 
It is a reality. It is not even thinkable for most of them.
  Second, yes, others in the community might be able to contribute and 
help them out, but that begs the question. The families who will be 
able to best take advantage of this are families who are on the higher 
income end of the scale. That is a first point, regardless of a 
comparison to the President's proposal.
  In any case, I made this to be scrupulously nonpartisan or 
bipartisan, or whatever the right label is. For the President's HOPE 
scholarship program, I said if this is not a refundable tax credit, 
most of the families with incomes under $28,000 don't have the tax 
liability and it will not help. I am being consistent in my argument.
  On the whole question of low-income communities, the very people I am

[[Page 1435]]

talking about are the ones who are clamoring the most for this. Let me 
get to that point in a second.
  First, another criticism. I want to be straight up in my disagreement 
with my colleague from Georgia. I think there is a real question if it 
is through the Tax Code. We keep having a debate. It is tax 
expenditure. We are spending money one way or the other. If we do it 
through the Tax Code, we are basically providing dollars that could be 
going to public education, and in this particular case it could go to 
private schools.
  I am opposed to that. I view that as a voucher plan. That might be 
attractive to the Senator. There are some who believe that is a big 
mistake and believe we ought to use the public taxpayer dollars one way 
or another, whether it be through the direct expenditure or whether it 
be through tax deductions and tax credits. We believe that ought to go 
to public education. That is a disagreement. If we brought this out 
next year or brought it out here with a whole bunch of other proposals, 
I would still disagree.
  On the whole question of who benefits and who does not and which 
communities are clamoring for this, now I get to the point: If on the 
whole question of the savings account it ultimately gets to $7 per 
child, I don't see that as a great benefit. I certainly don't see how 
it gets to many people. Even if you want them to get to the exclusive 
private schools, I don't think it helps much.
  This is where I really disagree with my colleague. I am sure there 
are organizations and people who support this plan. I am sure they do 
it in good faith. The question is opportunity before the Senate. Either 
we put this $1.2 billion here or we say there are better uses. I argue 
there are better uses. I argue there are better uses for the money.
  Now, we have talked about what proposals have been vetted or have not 
been vetted. My colleague from New Hampshire came out here with an 
argument that was interesting. I think he had every right to make it. 
He said we will deal with this in the Elementary and Secondary 
Education Act.
  However, I will give some examples. We had a pretty long discussion 
about title I. This is talking about low- and moderate-income families. 
This is a place where the Federal Government is a real player. This is 
terribly important for kids who come from disadvantaged circumstances. 
It is funded at about one-third the level it should be funded. So in a 
lot of urban Minnesota, once you get to schools with less than 65 
percent low-income students, there is no money. The other schools are 
not even eligible.
  I would argue, if it is $1.3 billion or $4 billion or $5 billion, or 
whatever amount of money you want to talk about, the opportunity cost 
of putting it into this plan is that you do not put it directly into a 
proven program that really benefits kids if given the funding and if 
given the accountability. I would rather put it there.
  What have we talked about and what have we not talked about? It 
should not have taken Columbine. But we have had this discussion about 
violence. We have had this discussion about how does one get to these 
kids before they commit this kind of violent act. We have had this 
discussion about the need for support services for kids. We have had 
this discussion about so many kids feeling anonymous in the schools. We 
have talked about the need to have counselors.
  Some of us have had amendments out on the floor to provide funding 
for more counselors in our schools, to provide support services to 
kids, to students. That is an important education program. I doubt 
whether any Senator, if he or she is in a school--I try to be in a 
school in Minnesota every 2 weeks--does not hear about the need to have 
more counselors and more support services for students, many of whom, 
if they are not at the top of their class and they are not a great 
athlete, feel lost. I argue we would be making a much better investment 
if we invested it in this program.
  There is another issue we have had on the floor that is not new. You 
cannot argue we should not be out here talking about it because we 
never talked about it before. I would be pleased to fault the 
administration on this as well, I say to my colleague from Georgia. I 
believe someday we are going to do this. I think the place where the 
Federal Government can be a real player--in fact, if I was the one who 
was writing this amendment, if I agreed with the concept, I would apply 
it to this area. I would apply it to early childhood development as 
well. We should be a real player pre-kindergarten.
  My colleague may say it does not give people enough time to work up 
the savings for when they have children, if they are very young. But 
you don't know. Maybe you would let grandparents be able to do it for 
their children's children. I don't know. But I will say this. It is 
absolutely pathetic how little we have done by way of an investment in 
early childhood development. It is pathetic. We have study after study, 
book after book, documentary after documentary, White House 
conferences, we all love children, we are all committed to children, 
and we all know the medical evidence is irrefutable and irreducible 
that you have to get it right for kids.
  If I had $1.3 billion over the next 5 years, I would put it into 
early childhood development. You can make a real difference for 
children and a real difference for families because, after all, what is 
most important to families, or parents, is that their children do well 
in school.
  The fact is, the reality is, that all too many young people, children 
in America, come to kindergarten behind. I think the big crisis in 
education is the learning gap between those kids who have had the 
support at home, who have had parents who can afford the best by way of 
developmental childcare, children who have been read to widely, are 
already computer literate, who have been encouraged, they have that 
spark of learning, and they come to kindergarten and they are ready to 
go. Many children come to kindergarten way behind. What in the world 
are we doing debating this piece of legislation as opposed to talking 
about this amount of money--or much more, I would argue--by way of 
investment in early childhood development?
  I say to my colleague from Georgia, I could talk about other issues 
as well, but I come to the floor to oppose this on the following 
grounds: One, I believe it is a fantasy to think $2,000 in savings is 
going to mean much for most hard-pressed families in Minnesota. They 
don't have that money for savings. Two, the way the tax benefit works, 
by definition, whatever money you are not liable for, if you are in a 
higher tax liability, you get the biggest break, so it is going to 
benefit more the people on the top. The third point I argue is that I 
am opposed to using public dollars when we do not even have enough 
dollars for public education right now, for private education, for what 
is essentially a voucher plan.
  Someday in the future, if somebody can show me we have really made 
the investment in public education--I heard my colleague from New 
Hampshire talk about all the money we spent that hadn't worked. I would 
like to talk about areas in which we have not invested. Then I might be 
willing to talk about how we would use dollars and talk about vouchers. 
Not now. I do not believe this is the way to go. You would have to 
persuade me we have really made a commitment.
  That is my fourth point; whether it be this amount of money, whether 
it be today, whether it be tomorrow, whether it be next week, if the 
Senate is really serious about children and education, here is where I 
do join Senator Kennedy 100 percent--and this is not so much directed 
at my colleague from Georgia; he has his piece of legislation here; he 
believes in it--but honestly, we have done next to nothing. This has 
been ridiculous. I do not believe the way we have been spending our 
time week after week after week. I am glad we are out here starting a 
debate. I actually commend my colleague from Georgia for bringing out a 
piece of legislation that at least deals with education. But, honest to 
goodness, we have done next to nothing. We have had hardly any votes, 
hardly any legislation, hardly any opportunities to introduce 
amendments to bills.

[[Page 1436]]

  I say to the majority leader and majority party, it is very 
difficult. I think, frankly, it is difficult for all of us to represent 
our States well when we do not have a real legislative process going 
on. I will get to the education part of it in a moment, but I will 
speak about it in broader terms.
  Take this last week. You go home. You meet with people and people are 
glad to meet with you. I think we all have had that experience. They 
are talking about their work; they are excited. You think you could 
make a difference as a Senator--and you would not be in the Senate if 
you didn't think you could make a difference. I had one meeting with 
parents talking about depression and suicide among kids--it is the 
second leading killer of our children, ages 18 to 25--and the lack of 
any kind of support and the lack of services. I could go on and on. I 
talk to veterans. There are a whole set of unmet needs in the VA health 
care system.
  Then we come back here and we have quorum calls or no piece of 
legislation and no opportunity for amendment. We do not have a 
legislative process going on in the Senate in general. It is 
unbelievable. I say to the majority party, I don't think we can 
represent people back in our States very well unless we get real about 
the concerns and circumstances of people's lives and what we are doing. 
I think this has been, to quote someone else, a do-nothing Senate; a 
do-nothing Congress.
  I would argue--not that the amendment of my colleague from Georgia is 
a do-nothing amendment; it is not. He thinks it is the right step. But 
I say, frankly, as opposed to $7 per kid at best, as opposed to talking 
about $2,000 in savings that most families I know in Minnesota can't 
come close to saving, as opposed to a tax break that is going to 
benefit people more on the upper end--I would say in my discussions, 
and I try to be in a school every 2 weeks, what people talk about--I 
think this was Senator Kennedy's point earlier--is they say we need 
good teachers. We need to have smaller classes.
  Students talk about how they are sharing textbooks. They have these 
political science or government textbooks. Minnesota is a pretty small 
education State, and the last President they talk about is Ronald 
Reagan. It is way out of date. They don't have good textbooks. 
Everybody is talking about computers and technology, but the textbooks 
are hopelessly outdated.
  They talk about the need to get it right for kids before 
kindergarten. I didn't say to the Presiding Officer that he would not 
think Ronald Reagan wasn't one of the greatest Presidents. I am just 
saying there have been other Presidents since Ronald Reagan. I see my 
colleague, Senator Sessions, smiling. He can't say anything to me 
because he is the Presiding Officer, and I can give it to him right 
now.
  They talk about school construction. That sounds very abstract, but a 
lot of buildings are in disrepair and decrepit.
  We do not tell our kids we care much about them when we do not do 
anything to rebuild crumbling schools. This is the discussion I hear.
  They also talk about the question of digital divide and making sure 
we have access to technology in our schools. I am OK with having this 
amendment before us, but I disagree with the amendment for the reasons 
I have stated. The Senator from Georgia disagrees with my disagreement. 
The larger issue is, frankly, I do not think to most people in the 
country and to most people I represent that this is really a piece of 
legislation that deals with their needs or their children's needs or 
deals with the challenges we have in education. My question is, When in 
the world are we going to get real about this?
  Mr. COVERDELL. Will the Senator yield?
  Mr. WELLSTONE. My colleague says it is in addition to other things. 
The ``other'' is not anywhere near what we should be doing. Whatever it 
is subtracts from the other things we could be doing. I do not buy his 
argument that there are other things we are doing and this is just in 
addition because of the unmet needs.
  Mr. COVERDELL. Will the Senator yield?
  Mr. WELLSTONE. I am talking about the decisive areas in which we 
should be making an investment. I do not think this is the way we 
should go at all. I yield for a question.
  Mr. COVERDELL. I am convinced we have a pretty strong disagreement. 
The Senator has made that point. But being a persistent individual, 
let's go back to the point the Senator made about the savings account, 
which is only one part of this bill. Then he alluded to the amount of 
money that would not be collected. I signaled to him that it is about 
$1.2 billion over 5 years. The Senator from Minnesota said he thought 
that could be put to a better use: We collect the money from the 
people, bring it here, and put it to another use.
  My question is this: How many Federal dollars can you think of that 
we leverage to a 10-to-1 value? My point is this: For that amount of 
uncollected revenue, we cause 14 million families with 20 million 
kids--it is about half the population in elementary school--on their 
own, with their own dollars to augment that, and you end up with $12 
billion.
  If we could do that with every dollar we have, we would not be in a 
debate about any of these things. We could do any and everything. It is 
very unique in that we get it back over 10 times.
  I do not think you can call this a voucher. This is not--and I will 
stop here and let the Senator respond--a voucher. It is simply if a 
person is in a private school, they can have a savings account. If they 
are in a public school, they can have a savings account. It is their 
money; it is not public money, and it is being used by them to decide 
how they might best help their child.
  I yield to the Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I will finish. I am a little 
frustrated--not with my colleague. I am supposed to meet with the 
Egyptian Ambassador. I just received a note. I have been keeping him 
waiting. Let me respond to my colleague from Georgia on a couple of 
different counts.
  First of all, as far as Federal programs, we can talk about that $1 
leveraged many times over. I can give the Senator a couple of examples. 
One great example is the Women, Infants, and Children Program. By the 
way, we have a real problem right now, with a booming economy, of 
hunger of children in America. The reports are very troubling.
  Every single study I look at says if you get it right by an early 
childhood investment, it pays for itself over and over. I cannot give a 
ratio, a dollar amount, but I can tell you either you invest in 
children when they are young or you pay later with high rates of 
dropouts--I do not think my colleague disagrees--high rates of 
substance abuse, and high rates of violence.
  There are clearly areas where you make investments on the front and 
it pays for itself over and over. Anything that is early childhood 
development fits the Senator's criteria.
  I am saying that is where we should be putting the money, and that is 
where I would put this $1.3 billion and more. That is part of my 
disagreement. It is a matter of priorities. A dollar spent is a dollar 
spent one way or the other.
  I am attracted--I should not say this; I should be out here trying to 
demolish the proposal of the Senator from Georgia, but it is presented 
in good faith and there is a vision to some of it that I understand. 
The notion that this can encourage people to save and match money and 
have responsibility and put it into education--all of that I like, but 
I again argue, frankly, for a lot of families, especially on the low-
moderate income end, it is not likely, even with the best intentions 
and the best commitment to children, they are going to be the ones who 
can take the greatest advantage of this benefit. It is going to be much 
more on the upper-income end. Therefore, I think it is a mistake. If 
this is adopted, if it becomes law, and I am proven wrong, I will be 
glad to be proven wrong, but I do not think I will be.
  I yield the floor and thank my colleague from Georgia for his 
comments.
  Mr. COVERDELL. Mr. President, as always, I enjoy the opportunity to 
share thoughts with the good Senator from Minnesota. I understand the 
dilemma he is in. It seems to happen to

[[Page 1437]]

all of us all the time. I hope the good Ambassador will understand his 
responsibilities in this Chamber.
  Even though the Senator from Minnesota has to leave, I am going to 
spend a few minutes responding to the remarks of the Senator from 
Minnesota. I see we have been joined by the Senator from Rhode Island, 
I assume, to speak on the legislation.
  I want to go back to the point about not collecting--it is actually 
about $2.4 billion over 10 years. We say: OK, we are going to leave 
that in the checking accounts of the families who will open a savings 
account in support of their children's education, and we will not tax 
the interest. That is all this proposal does.
  As I said earlier, it is amazing to me what little incentive it takes 
to cause Americans to do great big things. When we do that, the parents 
of 20 million children are going to open up 14 million accounts, and 
they are going to save $12 billion, and I think it will be much more.
  So all of us who are interested in education will have had a role in 
infusing into every form of education--public, private, home; 
whatever--billions of new dollars that go right to a child's most 
specific need. Because there is no one who can guide or understand that 
need more clearly than their parents, these dollars are worth far more 
than some broad-based public education program.
  The second point I make with regard to the Senator from Minnesota is 
that he talks about programs and responsibilities that are clearly not 
Federal. Education in the United States is governed by, and will 
continue to be governed by, the States. That is why last year we passed 
the Education Flexibility Act, which was called for by every Governor--
every Republican Governor, every Democrat Governor--to give them more 
flexibility. They said: Don't tell us in the States what we need to set 
as our priorities; we will do that. They are not interested in the 
Senators from Minnesota or Massachusetts or Georgia saying: This is 
what your priority is. They want to determine that themselves.
  The Senator from Massachusetts was citing different polling data, but 
one figure he did not mention that I will be glad to supply him with 
is: Do you want the Federal Government to manage local schools? The 
answer is a resounding no.
  What we are doing is augmenting, empowering parents and their local 
communities to do the things they perceive are important for their 
child or their school system.
  The Senator from Minnesota referred to school construction, but the 
proposal of the Senator from Florida, Mr. Graham, is in the bill we are 
discussing, which aids local communities in school construction.
  Virtually everything I have heard the other side of the aisle talk 
about, in one way or another, is being assisted by the various 
components of the bill. We are helping in continuing education. We are 
helping in school construction. We are helping students have personal 
computers. We are dealing with the digital divide. We are dealing with 
special education needs. We are dealing with all of it.
  As I said, it remains somewhat mind boggling to me to understand why 
legislation that is so positive for every segment of the population 
would be opposed, particularly in light of the fact it has already 
passed the Senate with 59 votes. The Senate has ratified this proposal. 
The Senate believes in this proposal. It was a bipartisan vote that 
caused that.
  I will not keep the Senator from Rhode Island from his remarks. I 
yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. REED. I thank the Senator from Georgia for yielding the floor.
  We are all--every Member of this Senate--vitally interested in the 
health and welfare of our educational system throughout the United 
States. We are taking divergent roads to try to improve that system.
  I rise today, though, in opposition to the Education Savings Account 
provisions of this particular legislation. I think it is both bad tax 
policy and bad education policy. In fact, I think one of the great 
dividing lines between those who support this legislation and those who 
oppose it is whether or not our primary responsibility is to enhance, 
support, indeed, to reform public education or to somehow, in general, 
provide disbursed resources to parents.
  Our primary goal should be to enhance and reform and provide better 
public education. This legislative proposal, as well-intended and well-
meaning as it is, does not do that. As I said, it represents both bad 
tax policy and bad education policy.
  In terms of the bad tax policy, it is a preferential distribution to 
wealthy Americans. If you look at the analysis by the Treasury 
Department, it shows that this legislation would disproportionately 
benefit the wealthy and provide little or no benefit to low- and 
middle-income families.
  Indeed, 70 percent of the tax benefits under this bill would go to 
families in the top 20 percent of the income bracket. This is bad tax 
policy because one of the problems we have today is the growing 
divergence between low- and middle-income Americans--working 
Americans--and upper-income Americans--not to suggest that upper-income 
Americans do not work. But what I am suggesting is that over the last 7 
to 9 years of unprecedented growth in the economy, with a huge bonanza 
on Wall Street, we have seen the wealth and income of upper-income 
Americans grow significantly. We have not seen the same kind of 
effect--although we are beginning to see it--for low- and middle-income 
Americans.
  When we go into the tax system and create a tax preference such as 
the one proposed in this legislation, that remarkably benefits upper-
income Americans, we are exacerbating that bifurcation of benefits, 
that bifurcation of wealth and income.
  If we are talking about effective tax policy, we should think of 
ways, rather than benefiting the well-to-do more, to try to provide 
those low-income and middle-income Americans with more tax relief. This 
bill does not do that.
  In fact, 7 percent of the families with children in private schools 
would receive over half the tax benefits in this bill. I also suggest 
that these families probably are not sending their children to private 
schools because they need assistance. They are sending them to private 
schools because they have the means to do it--and, in fact, many other 
reasons. They are not sending them, I think, in any conscious way, to 
improve the public school system.
  That is where there is this disconnectedness between tax policy 
designed to help private schools and the involved commitment of so many 
of the Members of the Senate who are trying to reform public education. 
I do not think there is a connection. I think parents who are sending 
their children to private schools today--and it is their prerogative--
are doing so for reasons unrelated to the social advancement of other 
students or the social advancement of the community. They simply think 
a particular school is the best school for their child. Today they can 
pay for it. They will continue to pay for it--with or without this 
legislation. That is their choice.
  One of the good things about our educational system is, we do have 
choices such as that. But the real question is, should we be 
subsidizing that choice with our tax system at the expense of public 
education? Should we subsidize education in a way in which the greatest 
subsidy goes to the most affluent Americans? I think the answer is 
clearly no.
  It has been estimated by the Joint Tax Committee that if you look at 
the tax benefit for the average family--not the wealthier family, not 
the lowest income family who might possibly avail themselves of this 
provision--the average benefit is estimated to be little more than $20 
over 4 years. Over one year the benefit translates into paying for 3 
notebooks, 14 erasers or 1 box of crayons for the 90 percent of 
taxpayers who have children in public schools. We can, in fact, do 
something better, at least, for those in public education with this 
money. We should do that. So from a tax perspective, I think this bill 
is questionable.

[[Page 1438]]

  Let me raise one other point, perhaps a technical point. These IRAs 
for education were designed to help people receive higher education, to 
be able to save for very significant tuitions. The presumption is that 
families will begin to save, either when they are just starting out in 
married life or certainly when the first child comes along, but that it 
gives them at least 18 years to accumulate the principal in this IRA 
account, and interest which is tax exempt, and then 18 years later, 
having a significant amount of principal and accumulated interest, they 
could begin to draw from it.
  I must confess, I am not a tax expert. But I wonder, just on a 
technical basis, whether elementary education is the most suitable 
mechanism, if you will, the most suitable objective for these types of 
IRAs, since at most you have 3 or 4 or 5 years before the child goes to 
first grade to begin to accumulate. If you have several children, these 
funds might not be useful at all or be so disbursed. That is a 
technical point.
  The basic point about the tax policy aspect is that essentially the 
benefits go to very wealthy Americans. The benefits are not an 
inducement or incentive to go to private schools. They are going to 
private schools anyway. They will go to private schools without this. 
Anytime we take money away from public education, we are really taking 
it away from children who need us to stand by them and need us to put 
all of our efforts into reforming public education which should be free 
and excellent for all of our citizens.
  That aspect of the tax policy is one reason one could object--and I 
do object--to the legislation. The other aspect is the question of 
education policy. We have heard all of our colleagues come to the floor 
talking about education as a primary concern of the American public. 
That is absolutely true. They want to have a good system of public 
education.
  As the Senator from Georgia pointed out, they don't want us to run it 
from Washington, DC. I agree with him on that. But they certainly want 
Washington, DC, to participate in the reform of American education. 
They want Washington, DC, to be a force, not a dominant, controlling 
force, but a catalyst for real reform at the State and local level. 
They want specific needs addressed. They want better facilities for 
their children. That is why many of my colleagues on the Democratic 
side have proposed significant support for local initiatives to rebuild 
and renovate schools.
  I don't know about my colleagues, but every time I go back to Rhode 
Island, I have city council and school committee members come up to me 
and say: What we need is some money from Washington to help us with our 
school construction and modernization programs. That is a real concern. 
Frankly, if we support this type of tax break or tax advantage, which 
will flow primarily to private education, we won't have the resources 
to go in and help local communities rebuild and revitalize their 
schools.
  Also, if we look at some of the other processes going on at the local 
level in terms of how do we make better schools, one critical issue 
that has been identified in recent polling is the need for more 
parental involvement in public schools. I know that proponents of this 
proposal are talking, I think quite sincerely, about empowering 
parents.
  But we have another challenge when it comes to parents--getting those 
parents into the life of the public school. It is getting those parents 
to be involved in the education of their children in public schools. We 
can't do that simply by wishing for it. We have to provide support and 
resources. We have to provide training for teachers to be more adept, 
more sensitive to the needs of a new type of parent.
  Particularly when you go into low-income communities in this country, 
both rural and urban, you find many times young parents who themselves 
had a very difficult experience in school. They are not the most adept 
at or interested in going back into the schools and being part of their 
child's education. We have to recognize that.
  In my part of the country--frankly, in every part of the country 
today--we have many parents whose first language is not English. Again, 
if we really want to help our public schools--which I argue is our 
first and primary responsibility--we have to empower schools and 
teachers to deal with these types of parents. We can't do that if we 
take resources away from public education and target it through tax 
breaks to private education. In fact, I argue--and I have submitted 
legislation to this effect--we should provide resources for public 
schools to have much more effective outreach to parents, much more 
effective ways to involve them in the life of their children.
  That might be a more fundamental and more significant form of 
parental involvement and real parental choice than is offered by this 
tax bill. It may for the first time give parents, particularly those of 
low-income children, a real voice in their child's education in a 
public school. That is something else, again, I believe we should do. 
But if we take resources away from public education, we won't be able 
to do it.
  We also have to ensure we have good, well-qualified teachers. 
Frankly, in many school systems we can't say that with confidence. I 
ask the Senate: How does this legislation before us in any way help 
public schools have better teachers? It doesn't. I think the logic and 
implication here is that it will assist, encourage, subsidize parents 
to put their children in private education.
  I believe rather than walking away from a problem--indeed, a problem 
we should be dealing with directly--we should focus our attentions on 
the problem and our resources. In the area of teacher preparation, we 
could use the billions of dollars that would be involved in this 
program to enhance professional development, first, in the teacher 
colleges where the new teachers should learn about the new classroom, 
new technology, new techniques, and then, second, by integrating into 
public education the kind of comprehensive teacher preparation that is 
part of the curriculum, teacher mentoring, allowing principals to have 
more time to actually be education leaders. You can't do that for free. 
You need resources. We can help, not by dictating to the States but by 
essentially giving them the chance to qualify for grants that will help 
them do innovative things.
  So for many reasons, a policy of simply telling parents you can leave 
the public school system with a subsidy is bad education policy because 
it doesn't go to the core of what we should be about, which is making 
sure that every public school in this country provides excellent 
education for all of the students.
  Public education has always been the great leveler in this country. I 
went to parochial school, but that was a choice of my parents. There 
was always public education there for me, for them to choose. Perhaps 
this is nostalgia at this point in my life, but it was always perceived 
to be excellent education, good, solid education, getting people ready 
for the challenges of the last century. Now we have to get ready for 
the challenges of this century, and still we need public education.
  Again, I believe this proposal is motivated by the same desire that 
is motivating every Member of the Senate--finding a way to improve 
educational opportunities for Americans. My disagreement is that our 
focus should be on public education, and this proposal does not focus 
in on public education. In fact, it draws resources away from it.
  Also, I object because of the tax implications. Now is not the time 
to essentially provide tax incentives for people who already, and are 
likely to continue to, do what we are trying to subsidize, particularly 
when the benefits are so overwhelmingly skewed to the very affluent in 
our country.
  I object to the legislation. I hope we can come together again. We 
can talk about some of the issues which I hear day in and day out from 
parents, from elected officials, from school superintendents back in my 
home State: How do we fix up our schools so they are not remnants of 
the last century and the 19th century? We have school buildings in 
Rhode Island built in 1878 and 1876 that are still being used. We

[[Page 1439]]

have others that are almost as old. How do we deal with those issues? 
How do we prepare better teachers? How do we reduce class size? Because 
we know from analyses and evaluations that smaller class sizes are 
beneficial, particularly when it comes to minority children. How do we 
do this in the context of public education?
  That is where we should be focusing our attention. That is where I 
hope we can focus our attention. I urge this measure be put aside so we 
can get on with what I think is our top priority: Reforming, 
reinvigorating public education so we can say with great confidence on 
the floor of the Senate--and we cannot say it today--every school in 
this country gives every child in this country the chance to develop 
their talents to the fullest. Every public school does that. Until we 
can say that, I suggest we concentrate on improving public education, 
not subsidizing private education.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Coverdell). The Senator from Alabama is 
recognized.
  Mr. SESSIONS. Mr. President, I would like to thank the Senator from 
Georgia for his leadership and dedication to education reform. I also 
appreciate the comments of the Senator from Rhode Island. Really, we 
are sort of talking about two different games. Senator Reed is talking 
about tennis and we are talking about baseball. We have, in the Health, 
Education, Labor and Pensions Committee, of which I am a member, a 
dedicated effort ongoing right now to reauthorize for 5 years the 
Elementary and Secondary Education Act. It contains issues dealing with 
teachers and poverty and disadvantaged children and how to get money 
down to the teachers and the people who know our children's names. That 
will come up later this spring, or as soon as we can possibly get it 
out. ESEA is where most of the issues that the Senator from Rhode 
Island and his Democratic colleagues have raised should and will be 
dealt with.
  I have been in probably 15 schools in Alabama since the first of this 
year, and I am not hearing people say they want the Federal Government 
to take control. Rhode Island is one of the more wealthy States in the 
Union, they might want school buildings, but in Alabama, they are not 
telling me that. I have met with teachers, principals, and school board 
members, the head of the teachers union, and the State Superintendent 
of Education, talking to them about what the Federal Government can do 
to improve learning. What we are here for and what we want to do is 
facilitate children learning. And for the record, that only occurs in 
the classroom, where a teacher and a child come together at that magic 
moment when good things happen. It doesn't happen in Washington, DC, or 
with bureaucracies and policies like that.
  Senator Wellstone wants to spend it on early childhood. The Senator 
from Rhode Island wants new teachers. I might add, that we did hire 
100,000 new teachers last year. Twenty-five percent of that money can 
be used for professional development of teachers. This Congress spent 
about $300 million to $500 million more on education last year than the 
President asked for and more than the Democratic leadership asked for 
in their budget. So we are not chintzy on education. The question is, 
what do we do?
  The bill in front of us deals with some inequities and problems with 
the tax code which prevents people from going on and paying for their 
education. Everybody has to do that, whether it is in public schools or 
private schools. For example, a big part of this legislation is a bill, 
S.13, which I offered; called the ``CLASS Act.'' That act is the 
Collegiate Learning Students Savings Act. What we found was that 39 
States in this country right now--and probably 42 or more by the end of 
this year--have programs to encourage prepaid tuition savings. People 
would prepay tuition for higher education; they set aside the money 
today for tuition tomorrow.
  What we found out is that although the States make the interest on 
those contributions tax free, the accumulation of that money in those 
accounts is still taxed by the Federal Government when it is withdrawn. 
Now, what is wrong with that? I say that is not good public policy. It 
is not good public policy at its most basic level because what we are 
doing is taxing good behavior. We are taxing people who do the right 
thing and go about saving for higher education. At the same time, this 
Congress over the last number of years has enhanced steadily the 
subsidies we give to people who borrow money to go to college. There 
are a lot of subsidies--interest deferments and other tax changes--that 
encourage people to borrow. In the last decade, we have had more debt 
incurred for college expenses than we did in the previous three 
decades.
  Good public policy ought to say that if you care enough to set aside 
money on a regular basis to pay for your child's education, the tax man 
ought not to penalize you for it. As Senator Coverdell himself said 
earlier, we are getting such leverage from this money. We will probably 
save, in my opinion, more on the back end by having less loans that we 
have to pay and subsidize by this Congress than we would by allowing 
the tax deduction to begin with.
  I want to share some things about this idea that these tax changes 
are just for the rich. Of course, you never know how they define rich. 
You may have a man and a woman who are both working hard and are making 
$75,000, $80,000, and some intend to call them rich. Those are people 
doing what we hope every American is doing--working hard, making 
$30,000, $40,000, $50,000 a year, and we burden them consistently with 
taxes. They have to pay, pay, pay. The breaks always seem to go for 
somebody else because people would say they are rich. I don't agree 
with that.
  Let's look at the numbers we have on who is taking advantage of 
prepaid tuition plans. We have quite a track record around the country 
of those. It is middle-income families that are taking advantage of 
these plans, not the rich. In Florida, 71 percent of the participating 
families in the Florida prepaid college program have annual incomes of 
under $50,000, and 25 percent have incomes of less than $30,000. They 
are steadily putting money aside every year, every month, every week to 
help pay their children's education--a dream they have. Maybe they 
didn't get an education. My parents didn't get to go to college. They 
did everything they could to see that I could go to college. They 
didn't have a lot of the things that you have today that would help.
  Mr. President, 72 percent of the tuition contracts in the Alaska 
Advance College Tuition Payment Plan--a similar plan--have been 
purchased by families with incomes of less than $47,500; 81 percent of 
the contracts in Wyoming's plan have been purchased by families with 
annual incomes of less than $34,000; 62 percent of the contracts in the 
Pennsylvania plan have been purchased by families with annual incomes 
of less than $35,000; 36 percent of the participating families in the 
Texas Tomorrow Fund Program have annual incomes of less than $50,000. 
The average monthly contribution to a family's college savings account 
during 1995 in Kentucky was $43 a month. Just $43 a month.
  According to the Joint Tax Committee's score, the cost of this bill 
is $174 million over 5 years. That is all it costs. But I promise you 
that it will increase savings. In fact, not too long ago, I saw an 
article in one of these financial advisory magazines that wondered 
whether or not they considered it sort of a wash, whether it was a good 
investment to put your money in a college savings plan if they are 
going to tax the interest on it. I can see why this would be an 
inducement to make absolutely clear that it is a smart investment to 
invest in savings accounts while your children are young.
  Mr. President, I believe in education. I taught in a public school 
for one year. I got to do something easy after that, I went to law 
school. Anybody who hasn't taught doesn't know how difficult it is. My 
wife taught for a number of years in public schools. I have been there 
when she came home at night in tears over the frustrations and

[[Page 1440]]

difficulties of teaching. Teachers care about their kids. It is tough 
in those classrooms day after day. It is frustrating. So often what I 
am hearing when I talk to teachers is that Federal regulations are 
making their lives more difficult than they would be otherwise. They 
are telling me that if you would give us freedom to use some of the 
money you are giving, we could do more with it. You don't know in 
Washington. What do we know in Washington?
  We can't write a law that can appropriately provide in a sensible way 
precisely what is needed in schools that are different--schools in the 
Northwest, schools in the big cities, schools in the small towns. Each 
State has different systems of education. Some are desperate for new 
teachers. Some need more buildings. Some need more computers. The 
Senator from Minnesota said Minnesota didn't have textbooks. Minnesota 
ought to have textbooks. They have enough money to pay for textbooks. 
Alabama has textbooks.
  Another thing we need to know and remember very clearly--I think it 
is so important--is we need to do everything we can in this Congress to 
improve learning. We know, despite the fact we are second only I 
believe to Israel in per capita spending on education, that our test 
scores are not good. We finished 19th out of 21 industrial nations in 
math and science test scores, and 21 out of 21 for physics test scores. 
Somehow something is not working in our educational programs.
  I believe the answer to it--from my travels and from talking to 
teachers and close friends of mine who are teachers--is that we need to 
focus our attention on the individual schools, even down to the 
individual classrooms because that is where learning occurs. We need to 
empower the people who know our children's names. The Federal 
Government simply does not have the clout to tell schools how to run 
their systems. In case many of you may not know, the Federal Government 
provides only 6 percent of the cost of education in America. 
Historically, education has always been a State and local enterprise. 
We have local school boards. We have local superintendents. We have 
principals who participate in the civic clubs of our community, who 
know our parents, teachers who know our parents, and PTA associations. 
Education is local.
  One of the best speeches I have ever heard on this floor is the one 
Senator Byrd from West Virginia shared about the one-room schoolhouse 
he went to. I didn't go to a one-room school. But it was a country 
school. They brought water from the spring in a bucket and we drank 
from a single dipper. It seems he has done rather well. There is not a 
more educated person in this Senate than Senator Byrd. There is little 
doubt about that.
  I believe we need to look at what we are doing. What is this 
legislation about? This is not a cure-all to educational problems. This 
is simply a proposal to allow tax policy to encourage people to save 
for education. What is wrong with that? The cost of it is 
infinitesimally small compared to what we are spending in this Congress 
on education. It is minute. But it would increase substantially 
parental involvement in making money available to educate children 
according to the wishes of the parent. It is a good idea, I believe, 
and a healthy idea.
  I wish to say again how much I appreciate Senator Coverdell's 
leadership with this effort. Senator Roth, who chairs the Finance 
Committee, is committed to improving education, Senator Bob Graham from 
Florida, who has been a steadfast supporter of making prepaid tuition 
plans tax-free, and my good friend Congressman Joe Scarborough of 
Florida who has sponsored the House companion to the CLASS Act. I think 
this is a solid first step toward encouraging people and affirming 
people to care enough to save for the education of their children. Who 
can be against that?
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from West 
Virginia.
  Mr. BYRD. Mr. President, I thank the Chair.

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