[Congressional Record (Bound Edition), Volume 146 (2000), Part 10]
[Senate]
[Pages 14393-14425]
[From the U.S. Government Publishing Office, www.gpo.gov]



         MARRIAGE TAX PENALTY RELIEF RECONCILIATION ACT OF 2000

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
proceed to the consideration of H.R. 4810, which the clerk will report 
by title.
  The legislative clerk read as follows:

       A bill (H.R. 4810) to provide for reconciliation pursuant 
     to section 103(a)(1) of the concurrent resolution on the 
     budget for fiscal year 2001.

  The PRESIDING OFFICER. All after the enacting clause is stricken, and 
the language of the Senate bill is inserted in lieu thereof.
  The Senator from Delaware.
  Mr. ROTH. Mr. President, we are now on the reconciliation bill 
authorized by the budget resolution we adopted in the spring.
  I would like to clarify for all Senators that nothing in the consent 
agreement covering the consideration of this bill precludes Budget Act 
points of order being raised against any amendment offered. Those 
points of order could be raised at the time of the votes on Monday 
night. I ask the Presiding Officer, is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. ROTH. Mr. President, we will start with opening statements by 
myself and the Democratic manager. Subsequent to that, we will open it 
up to amendments.
  Mr. President, a little more than 3 months ago, I stood in this 
chamber to introduce the Marriage Tax Relief Act of 2000. At that time, 
I described that bill ``as the centerpiece of our efforts to reduce the 
tax overpayment by America's families.'' That is as it should be 
because families are the centerpiece of American society.
  Three months ago, I urged my colleagues to support the Marriage Tax 
Relief Act because it ``delivered savings to virtually every married 
couple in America--and it did so within the context of fiscal 
discipline and preserving the Social Security surplus.'' And that too, 
is as it should be, because if we act irresponsibly we are not giving 
relief to America's families, but grief to America's children.
  In the three months since I last spoke on this topic, we have 
discovered that American families' tax overpayment is even larger and 
our relief even more appropriate than we had imagined then.
  Despite the enormous benefits that the Marriage Tax Relief Act of 
2000 would have brought to American families, we could never get the 
other side

[[Page 14394]]

to agree to a procedure that would limit debate to relevant amendments. 
The Majority Leader's offer to limit debate to marriage tax issues was 
rejected and cloture votes failed. The Senate moved on to other 
business.
  But even as the Senate took up other important issues, we remained 
committed to delivering tax relief to America's families. We knew that 
the American people would not be satisfied with us shrugging our 
shoulders and saying that we tried. We knew that the American people 
would not be satisfied with us telling them that they'll have to wait 
for comprehensive marriage tax relief because the other side blocked 
our first attempt.
  And so we are back today. We have returned with ``The Marriage Tax 
Relief Reconciliation Act of 2000.'' Substantively, this bill is the 
same as the one that we sought to pass a few months ago. But there is 
one crucial difference between now and then. Today, we are proceeding 
under the Budget Act's reconciliation procedure. And that means that no 
one is going to delay us from passing this bill. We will have an up or 
down vote. We will see who supports the marriage tax relief in our 
bill. And we will see who thinks that American families are not 
entitled to this relief.
  Before I describe the specifics of our bill, I want to talk about how 
we got here. Our tax system has chosen to use the family as the unit 
for taxation. Unlike some other countries--where all individuals are 
taxed separately--here in the United States, we look to the household. 
In doing so, our tax system has tried to balance three disparate 
goals--progressivity, equal treatment of married couples, and marriage 
neutrality. And, I will remind my colleagues, it is impossible to 
achieve all three principles at the same time.
  The principle of progressivity holds that taxpayers with higher 
incomes should pay a higher percentage of their income in taxes. The 
principle of equal treatment holds that two married couples with the 
same amount of income should pay the same level of tax. And the 
principle of marriage neutrality holds that a couple's income tax bill 
should not depend on their marital status. The tax code should neither 
provide an incentive nor a disincentive for two people to get married.
  Our policy response differs depending on how we balance these 
different principles. For instance, if we want to ensure that when two 
singles get married their total tax bill will not rise--but we do not 
mind if two married couples with the same overall income level are 
treated differently, then we arrive at one result. However, if we want 
to make sure that two singles who marry do not face increased taxes--
and we want to make sure that two married couples with the same income 
level are treated evenly--then we arrive at a different result.
  Last year, the Senate position in the Taxpayer Relief Act of 1999 
only embraced the first policy result. We focused on what people refer 
to as the marriage tax penalty--in other words, the difference between 
what two spouses would pay in taxes if they were single versus what 
they would pay in taxes if they were married. In developing the 
specific provision, we took aim only at one particular definition of a 
marriage tax relief penalty. We developed a system whereby a married 
couple would have an option. The couple could continue to file a joint 
return using the existing schedule of married filing jointly. Or the 
couple could choose to file a joint return using the separate schedules 
for single taxpayers. It was straightforward, and it was universal--we 
did not try to impose arbitrary income limits to cut off the relief.
  As I said last year, the separate filing option had a lot of good 
things about it. Most importantly, I liked the way that the plan 
basically eliminated the marriage penalty for all taxpayers who 
suffered from it.
  It delivered relief to those in the lowest brackets as well as to 
those in the highest brackets.
  However we should also remember that last year's approach was part of 
a larger package of tax relief. We should all remember this point: 
America's families were going to receive relief from other provisions 
in that bill. Last year's marriage penalty provision was part of a 
comprehensive tax bill directed towards American families. Other pieces 
of the bill--the cuts in the 15 percent rate bracket, the expansion of 
the child care credit--provided additional benefits to American 
families. So, the separate filing option should not be viewed in a 
vacuum; instead, it must be seen as part of a comprehensive tax relief 
package. In any event, as we all know, none of the pieces of last 
year's tax cut package--neither the marriage penalty relief nor 
anything else--made it into law. Because President Clinton vetoed that 
bill, America's families have been denied the tax relief that they 
deserve.
  This year I felt that we should take a different approach to marriage 
tax relief. As the Chairman of the Finance Committee, I am responsible 
for developing tax policy in a fair and rational manner. I am also 
responsible for working with members of my committee and of the full 
Senate.
  After listening to my colleagues' views on marriage tax relief, I 
came to the conclusion that the best approach this time is to build on 
the foundation that Congress has already approved. Last year, in the 
conference report of the Taxpayer Relief Act of 1999, Congress adopted 
three components of marriage penalty relief. These included an 
expansion of the standard deduction for married couples filing jointly; 
a widening of the tax brackets; and an increase in the income phase-
outs for the earned income credit. A different part of that bill 
addressed the minimum tax issue. Earlier this year, the House passed a 
marriage penalty tax bill that included the first three components.
  And so the Finance Committee bill, the Marriage Tax Relief 
Reconciliation Act of 2000, uses these same building blocks. This is 
important--not just for purposes of building and maintaining 
consensus--but for policy reasons as well.
  You see, if we target relief only at the families that suffer a 
marriage penalty, we begin to violate another of the three principles 
that I described earlier. Since 1948, our tax system has adhered to the 
principle of treating all married couples with the same amount of 
income equally. In other words, each household that earns $80,000--
regardless of the breakdown of that income--would pay the same amount 
of tax. It does not matter whether one spouse earns all $80,000 while 
the other spouse works at home taking care of the children; and it does 
not matter whether both spouses work outside the home and earn $40,000 
each. Each household with the same amount of income is treated the same 
for tax purposes.
  As we studied how best to solve the marriage penalty--to ensure that 
the tax code does not provide a disincentive to get married--we 
realized that it was extremely important to stick to this principle of 
equal treatment. In solving one penalty, we don't want to be creating a 
new penalty--a new disincentive for America's families. We did not 
think that the tax code should deliver a new, so-called ``homemaker 
penalty''--where a family with only one wage earner is treated worse 
than a family where both spouses work. This is what would happen if we 
used a separate filing option. Many people have argued that tax policy 
should not discourage one parent from staying at home and raising the 
family. It is a laudable goal and one that I strongly support.
  Retention of the equal treatment principle is especially important in 
a tax bill such as the one we have before us. Unlike last year's tax 
bill, this one does not include rate cuts or enhanced family tax 
credits. All America's taxpaying families have contributed to the tax 
overpayment in Washington today. All these families, therefore, deserve 
to receive some of the benefits that we are seeking to return to the 
American people. We should not pick out some married couples over 
others.
  We should not be picking winners and losers from America's families 
in some Washington game of musical chairs. And that is what we would do 
if we left out those families where one spouse works maintaining a home 
and a family. Under the proposal offered by

[[Page 14395]]

Democrats in the Finance Committee, over 17 million homemaker families 
would be left out of tax relief. In my state of Delaware, over 30,000 
homemaker families would be left standing at the altar by the Democrats 
proposal.
  Now let me take a few minutes and describe the provisions of our 
bill. First, we enlarge the standard deduction for married couples. 
Under current law, for the year 2000, the standard deduction for a 
single taxpayer is $4,400. The standard deduction for a married couple 
filing a joint return is $7,350. That means that for couples who use a 
standard deduction--and those are generally low and middle income 
couples--they are losing $1,450 in extra deductions each year. At a 28-
percent tax rate, that lost deduction translates into an extra tax 
liability of $406 each and every year.
  The Finance Committee bill increases the standard deduction for 
married couples so that it is twice the size of the standard deduction 
for singles, and we do that immediately, in 2001. When fully effective, 
this provision provides tax relief to approximately 25 million couples 
filing joint returns, including more than 6 million returns filed by 
senior citizens.
  Increasing the standard deduction also has the added benefit of 
simplifying the Tax Code. Approximately 3 million couples who currently 
itemize their deductions will realize the simplification benefits of 
using the standard deduction.
  Second, the Marriage Tax Relief Reconciliation Act of 2000 addresses 
the cause of the greatest dollar amount of the marriage tax penalty--
the structure of the rate brackets. Under current law, the 15-percent 
rate bracket for single filers ends at taxable income of $26,250. The 
15-percent rate bracket for married couples filing jointly ends with 
taxable income of $43,850, which one can see is less than twice the 
single rate bracket. In practical terms, that means that when two 
individuals who each earn taxable income of $30,000 get married and 
file a joint tax return, $8,650 of their income is taxed at the 28-
percent rate rather than at the 15-percent rate that the income would 
have been subject to if they had remained single. The extra tax 
liability for that couple each year comes out to $1,125.
  The Finance Committee bill remedies that fundamental unfairness. The 
bill adjusts the end point of the 15-percent rate bracket for married 
couples so that it is twice the sum of the end point of the bracket for 
single filers. Recognizing that the rate structure hurts all married 
couples, the bill also adjusts the end points of the 28-percent rate 
bracket as well.
  When fully effective, this provision will provide tax relief to 
approximately 21 million couples filing joint returns, including more 
than 4 million returns filed by senior citizens.
  Third, the Marriage Tax Relief Reconciliation Act of 2000 addresses 
the biggest source of the marriage tax penalty for low income, working 
families--the earned income credit. This complicated credit is 
determined by using a schedule for the number of qualifying children, 
and then multiplying the credit rate by the taxpayer's earned income up 
to a certain amount. The credit is phased out above certain income 
levels. What that means is that two people who are each receiving the 
earned income credit as singles may lose all or some of their credit 
when they get married.
  In order to address that problem, the Finance Committee bill 
increases the beginning and ending points of the income levels of the 
phaseout of the credit for married couples filing a joint return. For a 
couple with two or more qualifying children, this could mean as much as 
$526 in extra credit. This provision would also expand the number of 
married couples who would be eligible for the credit. It will help 
almost 4 million families.
  Fourth, the Marriage Tax Relief Reconciliation Act of 2000 tries to 
make sure that families can continue to receive the family tax credits 
that Congress has enacted over the past several years. Each year, an 
increasing number of American families are finding that their family 
tax credits--such as the child credit and the Hope Scholarship 
education credit--are being cut back or eliminated because of the 
alternative minimum tax. Last year, Congress made a small downpayment 
on this problem, temporarily carving out these family tax credits from 
the minimum tax calculations. This year, we are building on that 
bipartisan approach, by permanently extending the preservation of the 
family tax credits.
  Because of this provision, millions of taxpayers will no longer face 
the burden of making minimum tax calculations for the purpose of 
determining the family tax credits they need.
  Finally, the committee included a provision to ensure that we 
complied with the Budget Act. Because we were not allowed to decrease 
revenues outside of the period covered by the budget resolution--which 
is 5 years--the bill sunsets all of the provisions in the bill after 
2004. It goes without saying that I do not think it is good policy to 
sunset these tax benefits. They should be permanent and I expect that 
they will be permanent when this bill is signed into law. Accordingly, 
I will propose an amendment to strike the sunset. I expect all of my 
colleagues to join with me in supporting that amendment.
  How much does this marriage tax penalty relief help? It helps a lot. 
Over 45 million families will get marriage tax relief under this 
legislation. In my State of Delaware, over 100,000 families will 
benefit. Every family earning over $10,000 per year will see their tax 
bill fall at least 1 percent--except those at high income levels. The 
key to this legislation is that it helps the middle class. Sixty 
percent of this bill's tax relief goes to those families making 
$100,000 or less.
  Who are these people? They are two married civil engineers, or a 
pharmacist who is married to a school teacher. They are the policeman 
and his wife who runs a small gift shop in Dover. They are the 
firefighter who is married to a social worker, or a librarian who is 
married to an accountant. These are the families who will benefit.
  They will benefit even more, as you examine the impact this tax 
relief will have over time. Consider the effect if these tax savings 
were put away for their children's education and retirement. If a 
couple with two children making just $30,000 took their tax savings 
from this bill and put it into an education savings account like the 
one recently passed by the Senate, they would have $40,000 for those 
children's college education.
  Based on the stock market's historical rate of return, that is 
$40,000 if they did not set aside another penny. If the family was that 
of two elementary school teachers with two children and earning average 
salaries of $70,000 combined, they would have $65,000 after 18 years.
  If those two married school teachers then started to put their tax 
savings from this bill into a Roth IRA after 18 years, this same couple 
would have $224,100 when they retired 27 years later.
  By transforming these tax savings into personal savings, we see that 
these real tax savings translate into real opportunities for these 
families.
  And consider the effect on the economy. According to an analysis by 
the Heritage Foundation, in 2004 this marriage tax penalty relief 
legislation will result in additional jobs. It will increase the 
personal savings rate by three-tenths of 1 percent, which in turn will 
lower interest rates. According to estimates done by the economists at 
the Heritage Foundation, the favorable economic impact of the tax 
relief would increase overall disposable income by $45 billion in 2004. 
That means that the average family of four would see an additional $670 
in income--just from the positive economic impact. So not only do 
married families gain, not only do their children gain, but the entire 
country gains. They gain more jobs, better jobs, and higher wages 
because of this marriage tax relief legislation.
  The marriage tax relief legislation I bring to the floor today 
amounts to just 3 percent of the total budget surplus over the next 5 
years. It amounts to just 10 percent of the non-Social Security surplus 
over the next 5 years. It amounts to just 42 percent of the new

[[Page 14396]]

spending provided for in this year's budget over the next 5 years. 
Finally, it amounts to just one third of the tax cut that has been 
allotted to the Finance Committee for tax cuts over the next 5 years in 
this year's budget. By any comparison or estimation, this marriage tax 
penalty relief is fiscally responsible.
  This bill does all these things for America's working families while 
preserving every cent of Social Security's surplus. These tax cuts do 
not have to pit America's families against America's seniors, nor does 
it extend a tax cut in a fiscally irresponsible manner. These tax cuts 
fit in this year's budget, along with the other Republican priorities 
that we have already passed for education, health care, and small 
businesses. Our priorities add up to what's good for America, and our 
numbers add up to what is fiscally responsible.
  It is time we stopped playing the politics of division. We do not 
have to pit one type of family against another type of family or 
families against seniors to do what is right. It is time we divorce the 
marriage penalty from the Tax Code once and for all. For too long 
Washington has been an unclaimed dependent in millions of America's 
families. I urge all my colleagues to support the Marriage Tax Relief 
Reconciliation Act of 2000.
  Mr. President, the earned income credit, or EIC, is an important 
antipoverty tool. It gives an incentive for families to help 
themselves. It provides low-income workers with a tax credit, thereby 
increasing their real wages. It gives poor and middle-class families an 
extra incentive to help themselves. While the program is by no means 
perfect, it has been one of the more effective Government programs in 
pushing families above the poverty line.
  The structure of the EIC is the largest source of the marriage 
penalty for low-income families. Our bill addresses this inequity by 
increasing the beginning and ending income phaseout levels of the 
credit for married couples by $2,500. Our proposal goes to families, 
just as the original EIC program was intended to do.
  Mr. President, I move to raise a point of order against section 4, 
from page 5, line 12, through page 7, line 3, of the bill, that it 
violates section 313 of the Budget Act.
  Mr. President, I furthermore move to waive all points of order under 
the budget process arising from the earned-income credit component in 
the Senate bill, the Moynihan substitute, the House companion bill, and 
any conference report thereon.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, the Democratic manager, Senator Moynihan, 
has agreed to give his opening statement at a subsequent time. If it is 
agreeable to the Senator from Delaware, we have some people who are 
anxious to catch planes and do other things. They have very brief 
speaking assignments, and they would like to offer some amendments at 
this time.
  Mr. ROTH. I think the Senator from Texas has been seeking the floor.
  Mrs. HUTCHISON. Mr. President, I ask the distinguished minority whip, 
are you proposing to go to amendments right away? The only issue is, I 
want to make a statement on the bill of which I am a major cosponsor.
  Mr. REID. We recognize the work you have done on this. Senator 
Moynihan has agreed to give his statement at a later time. I am told 
Senator Harkin wants to speak for 3 or 4 minutes, Senator Feingold for 
3 minutes, and Senator Kennedy for 5 minutes. They would like to leave 
after that.
  It is my understanding the Senator has a relatively long statement. 
If they could offer their amendments, then we would be happy to have 
you speak.
  Mrs. HUTCHISON. I thank the Senator.
  Mr. ROTH. That is satisfactory.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the motion 
to waive the Budget Act be temporarily set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Motion To Commit

  Mr. FEINGOLD. Mr. President, I send a motion to the desk and ask that 
it be stated.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] moves to commit 
     the bill to the Committee on Finance with instructions that 
     the Committee report it back along with legislation that 
     would substantially extend the solvency of Social Security 
     and Medicare.

  Mr. FEINGOLD. Mr. President, this debate, like the debate on the 
estate tax that it follows, allows the Senate to talk about priorities. 
Yes, some sensible reforms are in order to eliminate the marriage 
penalty for middle-income Americans. But before we enact a major tax 
bill like this, we should consider whether the first and highest 
priority for using our surplus should not be extending the life of 
Social Security and Medicare.
  Yesterday, the Senate considered the Harkin-Feingold amendment that 
would have extended the life of Social Security. Some did not like the 
way that Senator Harkin and I proposed to extend the life of Social 
Security. But few will deny that we should do something to keep Social 
Security and Medicare solvent.
  As I noted yesterday, starting in 2015, the cost of Social Security 
benefits is projected to exceed payroll tax revenues. Under current 
projections, this annual cash deficit will grow so that by 2036, Social 
Security will pay out a trillion dollars more in benefits than it takes 
in in payroll taxes. By 2037, the Trust Fund will have consumed all of 
its assets.
  Similarly, this year, the Medicare Hospital Insurance Trust Fund is 
taking in $21 billion more in income than it pays out in Medicare 
benefits, and its Trustees project that it will continue to do so for 
17 years. But by 2025, they project that the Medicare Trust Fund will 
have consumed all of its assets.
  We as a Nation have made a promise to workers that Social Security 
and Medicare will be there for them when they retire. We should start 
planning for that future.
  The Social Security Trustees' actuarial report shows a Social 
Security trust fund shortfall of 1.89 percent of payroll. That is, to 
maintain solvency of the Social Security Trust Fund for 75 years, we 
need to take actions equivalent to raising payroll tax receipts by 1.89 
percent of payroll or making equivalent cuts in benefits.
  Thus, we can fix the Social Security program so that it will remain 
solvent for 75 years if we make changes now in either taxes or benefits 
equivalent to less than 2 percent of our payroll taxes. But if we wait 
until 2037, we would need the equivalent of an increase in the payroll 
tax rate of 5.4 percentage points, to set the program right. The choice 
is clear: Small changes now or big changes later. That is why Social 
Security reform is important, and why it is important now.
  And that's why President Clinton was right when in his 1998 State of 
the Union Address, he said, ``What should we do with this projected 
surplus? I have a simple four-word answer: Save Social Security 
first.''
  Beginning in 1999, the government began to run surpluses in the non-
Social Security budget. If we continue current law and don't dissipate 
these surpluses, they will continue into the 2020s or beyond, according 
to Congressional Budget Office projections. But starting in 2015, 
Social Security will start redeeming the bonds that it holds, and the 
non-Social Security budget will have to start paying for those bonds 
from non-Social Security surpluses. The bottom line is that starting in 
2015, the government will have to show restraint in the non-Social 
Security budget so that we can pay the Social Security benefits that 
people have earned.
  That is why it doesn't make sense to enact either tax cuts or 
spending measures that would spend the non-Social

[[Page 14397]]

Security surplus before we've addressed Social Security and Medicare 
for the long run. Before we enter into new obligations, we need to make 
sure that we have the resources to meet the commitments we already 
have.
  Indeed, not spending the surplus has a positive benefit for 
addressing Social Security and Medicare. The government is spending 
$224 billion this year just to pay the interest on the Federal debt. 
That is 11.5 cents out of every tax dollar the government collects. If 
we don't use the surplus for tax cuts or spending, but instead pay down 
the debt, we reduce that annual interest cost. The President's latest 
budget proposal calls for paying down the entire publicly-held debt by 
2012. Doing so would give us $224 billion a year more in resources than 
we have now with which to address our Social Security and Medicare 
obligations.
  The government is like a family with a mortgage on the house and 
young kids who will go to college in a few years. One way to prepare to 
be able to afford those college costs is to pay down the mortgage now.
  There are a variety of options for extending Social Security's 
solvency. A broad choice of options exist for how we might get where we 
need to go. Yesterday, we rejected one option. My motion simply says we 
should choose some option to extend the life of Social Security and 
Medicare.
  The marriage tax bill before us today would head in the opposite 
direction. The Joint Committee on Taxation estimates that the 
committee-reported bill would cost $56 billion over the first 5 years. 
And it would cost about $250 billion, if the sunset provision in this 
bill is not maintained.
  This bill is just one in a long series of tax bills. It's no secret. 
The majority leader has essentially said as much. The majority intends 
to pass--in one bill after another--a massive tax cut plan reminiscent 
of the early 1980s.
  Both the Senate and House have already passed a number of costly tax 
cut bills this year. According to one estimate by the Republican staff 
of the Senate Budget Committee made in mid-June, the Senate or the 
House have already passed tax cuts costing about $440 billion over the 
next 10 years. Slicing last year's vetoed tax bill into a series of 
salami slices does not change their irresponsibility.
  As well, it doesn't make sense to proceed on one expensive part of a 
legislative agenda before knowing what the others are. Democrats 
support targeted marriage penalty relief.
  It would be irresponsible to enact a tax cut of this size before 
doing anything about Social Security and Medicare. Before the Senate 
passes major tax cuts like the one pending today, the Finance Committee 
should consider the options for extending Social Security and Medicare. 
The Senate should do first things first. And that's all that this 
motion to recommit requires. I urge my colleagues to support it.
  Mr. President, I ask unanimous consent that my motion be temporarily 
set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3845

  Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] proposes an 
     amendment numbered 3845.

  Mr. FEINGOLD. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To strike the adjustment to the rate brackets and to further 
                     adjust the standard deduction)

       Beginning on page 2, line 5, strike all through page 5, 
     line 11, and insert:

     SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN STANDARD 
                   DEDUCTION.

       (a) In General.--Paragraph (2) of section 63(c) of the 
     Internal Revenue Code of 1986 (relating to standard 
     deduction) is amended--
       (1) by striking ``$5,000'' in subparagraph (A) and 
     inserting ``200 percent of the dollar amount in effect under 
     subparagraph (C) for the taxable year'';
       (2) by striking ``$4,400'' in subparagraph (B) and 
     inserting ``$7,500'';
       (3) by adding ``or'' at the end of subparagraph (B);
       (4) by striking ``$3,000 in the case of'' and all that 
     follows in subparagraph (C) and inserting ``$4,750 in any 
     other case.''; and
       (5) by striking subparagraph (D).
       (b) Technical Amendments.--
       (1) Section 63(c)(4) of such Code is amended by adding at 
     the end the following flush sentence:

     ``The preceding sentence shall not apply to the amount 
     referred to in paragraph (2)(A).''.
       (2) Section 63(c)(4)(B) of such Code is amended--
       (A) by redesignating clause (ii) as clause (iii); and
       (B) by striking clause (i) and inserting:
       ``(i) `calendar year 2000' in the case of the dollar 
     amounts contained in paragraph (2),
       ``(ii) `calendar year 1987' in the case of the dollar 
     amounts contained in paragraph (5)(A) or subsection (f), 
     and''.
       (3) Subparagraph (B) of section 1(f )(6) of such Code is 
     amended by striking ``(other than with'' and all that follows 
     through ``shall be applied'' and inserting ``(other than with 
     respect to sections 63(c)(4) and 151(d)(4)(A)) shall be 
     applied''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

  Mr. FEINGOLD. Mr. President, the bill before us is a major tax bill. 
Because the bill sunsets in 2004 to comply with the Senate's Byrd Rule, 
the Joint Committee on Taxation's official estimate is that the bill 
would cost $55.5 billion. And in the likely circumstance that Congress 
fails to sunset the bill, it would cost nearly $250 billion over 10 
years and $40 billion a year, or $400 billion a decade, when fully 
phased in.
  In a matter of this importance, it is appropriate to consider where 
the money goes. It is appropriate to consider whether we could make 
other, similar changes to the tax law that would benefit more 
Americans.
  This Senator believes that it is a priority to simplify taxes and 
free people from paying income taxes altogether. My amendment would 
accomplish both of these goals by expanding the standard deduction.
  The amendment would increase the standard deduction for individuals 
by $250, from $4,500 to $4,750. It would increase the standard 
deduction for heads of households, as well, from $6,650 to $7,500. And 
it would maintain the underlying bill's policy of increasing the 
standard deduction for married couples to twice that of an individual.
  Seven in 10 taxpayers take the standard deduction instead of 
itemizing. My amendment would benefit all of those 7 out of 10 
taxpayers. It would reduce their taxable incomes by hundreds of dollars 
and thus make it so that many middle-income working Americans would not 
owe any income taxes at all.
  Expanding the standard deduction would also make it worthwhile for 
even more Americans to use that easier method of calculating their tax 
and avoid the difficult and cumbersome itemization forms. It would thus 
take one of the most concrete steps that we can take to simplify the 
unnecessarily complex income tax.
  My amendment is paid for, so that the total cost of the bill would be 
exactly the same over 5 years.
  Mr. President, I ask unanimous consent that a letter from the Chief 
of Staff of the Joint Committee on Taxation certifying that fact be 
printed in the Record at the close of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  The offset for my amendment is to strike the provision of the 
Republican marriage penalty bill that benefits only taxpayers in the 
top quarter of the income distribution. The tradeoff is clear: strike 
benefits for the best-off quarter to fund tax-simplifying benefits for 
7 out of 10 taxpayers--overwhelmingly middle and lower-income 
taxpayers.
  Let me take a moment to explain how the Republican marriage penalty 
bill works and how it comes to have a provision that benefits only the 
best off.
  The bill has three marriage penalty provisions. One would fix the 
marriage penalty for lower- and middle-income working families getting 
the EITC. The second would make the standard deduction for married 
couples equal to two times the standard deduction for single

[[Page 14398]]

taxpayers. Both of these provisions benefit working families who have 
the hardest time finding the money to pay taxes.
  But a third provision in the Republican marriage penalty bill would 
reduce the rates at which income is taxed for some married couples. 
This provision would, for married couples, increase the income level at 
which the 15 percent tax bracket ends and the 28 percent bracket 
begins, and also increase the income level at which the 28 percent 
bracket ends and the 31 percent bracket begins.
  Once fully in effect, the provision to expand the 15 percent and 28 
percent tax brackets would cost more than $20 billion a year. It would 
thus account for most of the package's overall cost when fully phased 
in.
  Here's how this costly provision would work. Right now, there are 
five tax brackets. Married couples who make taxable incomes up to 
$43,850 pay tax at a rate of 15 percent of their taxable income. 
Couples who make between $43,850 and $105,950 pay 15 percent on their 
first $43,850 plus 28 percent on the amount over $43,850. A 31 percent 
bracket applies to income between $105,950 and $161,450. A 36 percent 
bracket applies to income between $161,450 and $288,350. And a 39.6 
percent bracket applies to income above $288,350.
  To address the marriage penalty, the Republican bill raises the cut-
off points for the 15 percent and 28 percent brackets. But the 
Republican bill would not raise the brackets for the 31, 36, and 39.6 
percent brackets, leaving some marriage penalty to exist for those very 
well-off groups. The Republican bill thus already acknowledges the 
principle in my amendment that there is some point at which tax cuts 
for the best-off among us are not appropriate.
  The way the Republican bill would work, the bracket expanding 
provision would have absolutely no benefit for taxpayers with taxable 
incomes of up to $43,850. And it would benefit every married couple 
filing jointly with incomes above $43,850. The portion of this 
provision that would expand the 28 percent tax bracket would have 
absolutely no benefit for taxpayers with taxable incomes of up to 
$105,950. And it would benefit every married couple filing jointly with 
incomes above $105,950.
  As only the top quarter of taxpayers have incomes high enough to put 
them in brackets higher than the 15 percent bracket, only those in the 
top quarter of the income distribution would benefit from the 
provision. By striking this provision, my amendment would thus make the 
marriage penalty relief more targeted to those who need it most.
  The Joint Committee on Taxation has estimated that for 2005, more 
than 70 percent of the fully-implemented Republican bill's benefits 
would go to tax filers with incomes above $75,000, and only 15 percent 
of the benefits would go to tax filers with incomes below $50,000.
  Citizens for Tax Justice estimates that among married couples, those 
with incomes above $75,000 would receive 68 percent of the benefits of 
the Republican bill when it is fully phased in. They estimate that more 
than 40 percent of the benefits would go to couples with incomes above 
$100,000. Only 15 percent of its benefits would go to the 45 percent of 
married couples with incomes below $50,000.
  Mr. President, I ask that an analysis of the Republican bill by the 
Center of Budget and Policy Priorities be printed at the conclusion of 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  My amendment would better target the marriage-penalty relief in the 
Republican bill. It would use the savings from doing so to simplify 
taxes and to free middle- and lower-income Americans from paying income 
taxes altogether. This amendment presents a clear choice, and I urge my 
colleagues to support it.

                               Exhibit 1


                                  Joint Committee on Taxation,

                                    Washington, DC, July 12, 2000.
     Hon. Russell D. Feingold,
     U.S. Senate, SH-716
     Washington, DC.
       Dear Senator Feingold: This letter is in response to your 
     request of July 5, 2000, for a revenue estimate of a possible 
     amendment to the ``Marriage Tax Relief Reconciliation Act of 
     2000.''
       The amendment would replace the increase in the married 
     filing a joint return 15-percent and 28-percent rate 
     brackets, estimated to cost 17.523 bllion, with an increase 
     in the standard deduction for singles and heads of household. 
     The provisions affecting the earned income credit, married 
     filing a joint return standard deduction, and the AMT 
     treatment of credits would remain unchanged. All provisions 
     would sunset after December 31, 2004.
       You asked that we determine the maximum possible increase 
     in the single and head of household standard deductions 
     within the constraint of the revenue effect of the bill as 
     reported. Under this constraint, the standard deduction would 
     increase for singles from 4,500 to 4,750 and for heads of 
     household from 6,650 to 7,500 for taxable years beginning 
     after December 31, 2000, and indexed thereafter.
       The bill as amended would have the following effect on 
     Federal fiscal year budget receipts:

Fiscal years:                                                  Billions
    2001..........................................................-$7.4
    2002..........................................................-12.6
    2003..........................................................-13.8
    2004..........................................................-14.8
    2005...........................................................-7.1
    2006.........................................................(13's)
    2007.........................................................(13's)
    2008.........................................................(13's)
    2009.........................................................(13's)
    2010.........................................................(13's)
    2001-10.......................................................-55.6

Note: Details do not add to totals due to rounding.

       I hope this information is helpful to you. If we can be of 
     further assistance in this matter, please let me know.
           Sincerely,
     Lindy L. Paull.
                                  ____


                               Exhibit 2

         Center on Budget and Policy Priorities, 820 First Street, 
           NE, Suite 510,
                                    Washington, DC, July 12, 2000.

Large Cost of the Roth ``Marriage Penalty Relief'' Provisions Reflects 
Poor Targeting--Much of the Benefits Would Go to High-Income Taxpayers 
             or Those Who already Receive Marriage Bonuses

                      (By Iris Lav and James Sly)


                                Summary

       On June 28, the Senate Finance Committee passed a marriage-
     tax-penalty relief proposal offered by its chairman, Senator 
     William Roth, that would cost $248 billion over 10 years. The 
     official cost assigned to the bill is considerably less--
     $55.6 billion--because the legislation will be considered in 
     a form that provides the tax relief only through 2004, to 
     satisfy Senate rules. history shows, however, that 
     legislation of this type rarely is allowed to expire. As a 
     result, the full, permanent cost of the bill should be 
     considered the relevant benchmark.
       Although two of the proposal's marriage penalty provisions 
     are focused on middle- or low-income families, the proposal 
     as a whole is poorly targeted and largely benefits couples 
     with higher incomes. The proposal's costliest provision, 
     which accounts for more than half of the package's overall 
     cost when all provisions are in full effect, benefits only 
     taxpayers in the top quarter of the income distribution. In 
     addition, the proposal would provide nearly two-fifths of its 
     benefits to families that already receive marrige bonuses.
       Citizens for Tax Justice finds that only 15 percent of the 
     benefits of the Roth proposal would go to low- and middle-
     income married couples with incomes below $50,000. This group 
     accounts for 45 percent of all married couples. By contrast, 
     the fewer than one-third of married couples that have incomes 
     exceeding $75,000 would receive more than two-thirds of the 
     bill's tax-cut benefits.
       The Roth plan contains three principal provisions related 
     to marriage penalties. The most costly of these would reduce 
     the rates at which income is taxed for some married couples. 
     This provision would increase for married couples the income 
     level at which the 15 percent tax bracket ends and the 28 
     percent bracket begins, and also increase the income level at 
     which the 28 percent bracket ends and the 31 percent bracket 
     begins. The second provision would raise the standard 
     deduction for married couples, setting it at twice the 
     standard deduction for single taxpayers. A third, much 
     smaller provision would increase the earned income tax credit 
     for certain low- and moderate-income married couples with 
     children.
       A fourth provision relates to the alternative minimum tax 
     (AMT) and affects both married and single taxpayers. It is 
     not specifically designed to relieve marriage penalties. This 
     provision would permanently extend taxpayers' ability to use 
     personal tax credits, such as the child tax credit and 
     education credits, to offset tax liability under the 
     alternative minimum tax.
       The Joint Committee on Taxation estimates that the Roth 
     proposal, without the sunset, would cost $248 billion over 10 
     years. And the proposals long-term cost is substantially 
     higher than this. The bill's costly provision that would 
     extend the 15 percent and

[[Page 14399]]

     28 percent tax brackets would not take full effect until 
     2008; this slow phase-in markedly reduces the bill's cost in 
     the first 10 years. The Joint Tax Committee estimate shows 
     that when all of the plan's provisions are fully in effect in 
     2008 through 2010, the bill would cost $40 billion a year.
       Once in full effect, the proposal to expand the 15 percent 
     and 28 percent tax bracket itself would cost more than $20 
     billion a year. This provision would exclusively benefit 
     taxpayers in brackets higher than the current 15 percent 
     bracket; no other taxpayers would be touched by it. Since 
     only the top quarter of taxpayers are in brackets higher than 
     the 15 percent bracket, only those in the top quarter of the 
     income distribution would benefit from the provision.
       The bill's tax reductions are not focused on married 
     families that face marriage penalties. Nearly as many 
     families receive marriage bonuses today as receive marriage 
     penalties, and the bill would reduce their taxes as well. The 
     proposal would confer tens of billions of dollars of 
     ``marriage penalty tax relief'' on millions of married 
     families that already receive marriage bonuses. In fact, only 
     about 40 percent of the $248 billion in tax cut benefits the 
     bill would provide over the next ten years would go for 
     reductions in marriage penalties. A similar proportion of the 
     tax cuts, about 38 percent would reduce the taxes of families 
     already receiving marriage bonuses. The remainder of the 
     benefits, including portions of the AMT change that would go 
     to taxpayers other than married couples, would neither reduce 
     penalties nor increase bonuses.


             Senate Democratic and Administration Proposals

       A marriage penalty relief plan that is more targeted on 
     middle-income families and modestly less expensive than the 
     Roth proposal is expected to be offered by Democrats on the 
     Senate floor. This Democratic alternative is identical to an 
     amendment offered by the Finance Committee Democrats during 
     the June 28th mark up of the Roth proposal. This plan would 
     allow married taxpayers with incomes below $150,000 to choose 
     whether to file jointly as a couple or to file a combined 
     return with each spouse taxed as a single filer. The long-
     term cost of the Democratic alternative appears to be about 
     four-fifths of the long-term cost of the Roth plan. (This 
     provision ignores the cost of the AMT provision of the Roth 
     plan.)
       The marriage penalty relief proposals contained in the 
     Administration fiscal year 2001 budget are significantly less 
     costly than either the Roth proposal or the Senate Democratic 
     alternative. These proposals, which are targeted on low- and 
     middle-income married filers who face marriage tax penalties, 
     would provide substantial marriage penalty relief at about 
     one-fourth the cost of the Roth plan. (This comparison, as 
     well, excludes the cost of the AMT provisions of the Roth 
     plan.) The marriage penalty proposals in the Administration 
     budget would cost a little more than $50 billion over 10 
     years.


                          budgetary realities

       The budget surplus projections that the Administration 
     issued on June 26 show a projected non-Social Security 
     surplus under current law of nearly $1.9 trillion over 10 
     years. While this may make it seem as though the proposed 
     marriage penalty relief could be afforded easily, caution 
     needs to be exercised. The surpluses actually available for 
     tax cuts and programs expansions are considerably smaller 
     than is commonly understood. Furthermore, there is a wide 
     range of priorities competing for the surplus dollars that 
     are available.
       The projected surpluses include about $400 billion in 
     Medicare Hospital Insurance (HI) trust fund surpluses that 
     the President, the House of Representatives, and the Senate 
     have agreed should not be used to fund tax cuts or program 
     increase. Excluding these Medicare HI surplues, the surpluses 
     available to fund tax cuts or program increases amount to 
     less than $1.5 trillion.
       That baseline projection, however, does not reflect the 
     full costs of maintaining current policies. For instance, the 
     Administration's baseline projections of the cost of 
     discretionary, or annually appropriated, programs assume that 
     funding for these programs will be maintained at current 
     levels, adjusted only for inflation. The projections do not 
     include an adjustment for growth in the U.S. population, so 
     the projections assume that funding in discretionary programs 
     will fall in purchasing power on a per person basis. 
     Maintaining current service levels for discretionary programs 
     would entail that such spending be maintaining in purchasing 
     power on a per capita basis.
       Certain legislation that is needed simply to maintain 
     current tax and entitlement policies and that is virtually 
     certain to be enacted also is not reflected in the surplus 
     projections, including legislation to extend an array of 
     expiring tax credits that Congress always extends, 
     legislation to prevent the Alternative Minimum Tax from 
     hitting millions of middle-class taxpayers and raising their 
     taxes, as will occur if the tax laws are not modified, and 
     legislation to provide farm price support payments to farmers 
     beyond those the Freedom to Farm Act provides, as Congress 
     has done each of the past two years. Assuming that 
     legislation in these areas will be enacted (as it is 
     virtually certain to be) and that the purchasing power of 
     discretionary programs will be maintained at current levels 
     on a per person basis reduces the available non-Social 
     Security, non-Medicare HI surpluses by approximately $600 
     billion, to less than $900 billion over 10 years.
       At least half of this $900 billion is likely to be needed 
     to facilitate reform of Social Security and Medicare that 
     will ensure the long-term solvency of those programs. Since 
     neither party is willing to close the long-term financing 
     gaps in these programs entirely or largely through slicing 
     benefits costs or increasing payroll taxes, a large infusion 
     of revenue from the non-Social Security part of the budget 
     will be necessary. Indeed, nearly all of the major Social 
     Security proposals offered by lawmakers of either party 
     entail the transfer of substantial sums from the non-Social 
     Security budget to the retirement system. Taking this reality 
     into account leaves about $400 billion over 10 years to pay 
     for tax cuts or other program initiatives.
       Competing for those funds are other tax cuts, various 
     domestic priorities such as providing a Medicare prescription 
     drug benefit, reducing the number of uninsured Americans, 
     increasing investments in education and research, and 
     reducing child poverty, as well as proposals to raise defense 
     spending. The Senate Finance Committee marriage penalty 
     proposals would eat up more than three-fifths of this $400 
     billion in a single bill.


                roth plan favors higher-income taxpayers

       The most expensive provision in the Roth bill would change 
     the tax brackets for married couples. It would raise for 
     couples both the income level at which the 15 percent bracket 
     ends and the 28 percent bracket begins, and the income level 
     at which the 28 percent bracket ends and the 31 percent 
     bracket begins. Joint Tax Committee estimates, show this 
     provision would cost nearly $123 billion over the next 10 
     years even though it does not fully phase in until fiscal 
     year 2008. In the years between 2008 and 2010 it would 
     account for 54 percent of this plan.
       Because this provision would raise the income level at 
     which the 15 percent and 28 percent brackets end for married 
     couples, it would benefit only those couples whose incomes 
     exceed the level at which the 15 percent bracket now ends. A 
     couple with two children would need to have income surpassing 
     $62,400 (in 2000 dollars) to benefit. Only one of every four 
     taxpayers, and one of every three married taxpayers, have 
     incomes that place the taxpayers above the point at which the 
     15 percent bracket currently ends.
       Thus, when the provisions of the Roth plan are phased in 
     fully, more than half of its tax cuts would come from a 
     provision that exclusively benefits taxpayers in the top 
     quarter of the income distribution and married couples in the 
     top third of the distribution.
       A second provision in the Roth bill would increase the 
     standard deduction for married couples. This approach focuses 
     its tax benefits on middle-income families. Most higher-
     income families have sufficient expenses to itemize their 
     deduction and do not use the standard deduction. Most low-
     income working families have no income tax liability and 
     would not benefit. If this provision were effective in 2000, 
     the standard deduction would increase by $1,450, which would 
     generate a $218 tax cut for most couples in the 15 percent 
     tax bracket. This provision would account for a little more 
     than one quarter (27 percent) of the plan's costs over the 
     first 10 years and one-fifth of the plan's annual costs when 
     all provisions of the plan are phased in fully.
       The third provision of the Roth plan is an increase in the 
     amount of the earned income tax credit that certain married 
     couples with low earnings can receive. This is the one 
     provision of help to low-income married families. When all of 
     the provisions of the plan are phased in fully, the EITC 
     provision would represent four percent of the plan's annual 
     costs. (This provision would account for six percent of the 
     plan's costs over the first 10 years.)
       Low-income married families can face marriage penalties 
     that arise from the structure of the Earned Income Tax 
     Credit. EITC marriage penalties occur when two people with 
     earnings marry and their combined higher income makes them 
     ineligible for the EITC or places them at a point in the EITC 
     ``phase-out range'' where they receive a smaller EITC than 
     one or both of them would get if they were still single.
       The Roth proposal would reduce EITC marriage penalties by 
     increasing by $2,500 the income level at which the EITC for 
     married families begins to phase down, as well as the income 
     level at which married families cease to qualify for any EITC 
     benefits. For a husband and wife that each work full time at 
     the minimum wage, the Roth proposal would alleviate about 44 
     percent of their marriage tax penalty.
       The plan also contains a fourth provision that is not 
     directly targeted at relieving marriage penalties. This 
     measure would address some of the problems that will result 
     in significant numbers of middle-income families becoming 
     subject to the Alternative Minimum Tax in future years--a 
     situation never intended when the AMT was enacted--by 
     permanently allowing both non-refundable and refundable 
     personal tax credits to

[[Page 14400]]

     offset AMT tax liability. This provision would account for 
     one-quarter of the legislation's total cost when all of the 
     bill's provisions are fully implemented.


         roth plan targets benefits on higher-income taxpayers

       The Joint Committee on Taxation has estimated the 
     distribution impact of this proposal on taxpayers in the 
     years 2001 through 2005. For 2005, the JCT found that more 
     than 70 percent of the benefits of this tax proposal would go 
     to tax filers with incomes exceeding $75,000, while only 15 
     percent of the benefits would go to tax filers with incomes 
     below $50,000. Moreover, these figures understate the extent 
     to which higher-income taxpayers would benefit, because the 
     costly bracket increases that benefit only the top quarter of 
     taxpayers would not be fully in effect until fiscal year 
     2008. The final year covered by the JCT estimate is 2005.
       Some observers note that married taxpayers tend to have 
     higher incomes than other taxpayers, in part because there 
     often is more than one earner in the family. They point out 
     that looking at the distribution of benefits among all 
     taxpayers makes the distribution appear more skewed than it 
     is seen to be if just the effect on married taxpayers is 
     considered. This is not the case, however, with respect to 
     the Roth proposal.
       An analysis by Citizens for Tax Justice shows that even 
     within the universe of married couples, the Roth plan 
     disproportionately benefits those married couples who are at 
     the upper end of the income spectrum. The Citizens for Tax 
     Justice analysis finds that among married couples, those with 
     incomes in excess of $75,000 would garner 68 percent of the 
     benefits of the Roth proposal when the plan is phased in 
     fully. Some 41 percent of the benefits would go to married 
     couples with incomes in excess of $100,000. Only 15 percent 
     of the benefits would go to those with incomes below $50,000. 
     (See Table 1.)

 TABLE 1.--EFFECTS OF THE FINANCE COMMITTEE MARRIAGE PENALTY RELIEF BILL
------------------------------------------------------------------------
                                                        Married couples
                                   Number    Percent -------------------
      Income group ($-000)        of joint  of joint             Percent
                                   returns   returns   Average  of total
                                    (000)              tax cut   tax cut
------------------------------------------------------------------------
<$10K...........................     1,357       2.5      -$14       0.1
$10-20K.........................     4,566       8.4      -128       2.2
$20-30..........................     6,304      11.5      -220       5.2
$30-40K.........................     6,227      11.4      -172       4.0
$40-50K.........................     6,286      11.5      -148       3.5
$50-75..........................    13,274      24.3      -344      17.0
$75-100K........................     7,184      13.1    -1,006      27.1
$100-200K.......................     6,893      12.6    -1,118      28.9
$200K+..........................     2,349       4.3    -1,342      11.8
                                 ---------------------------------------
  $Total........................    54,632     100.0      -488     100.0
                                 =======================================
<$50K...........................    24,740      45.3      -162      15.0
$75K............................    16,426      30.1    -1,101      67.9
------------------------------------------------------------------------
Figures show the effects of the bill when phased in fully. The income
  levels in the table are 1999 income levels. Under the legislation, the
  changes in the standard deduction and earned-income tax credit for
  couples would take effect in 2001. The changes in the starting points
  for the 28% and 31% tax brackets for couples would be phased in
  starting in 2002 and finishing in 2007. The totals exclude about $0.8
  billion in tax cuts for married persons filing separate returns.
  Changes in the Alternative Minimum Tax, which would maintain the
  current treatment of tax credits under the AMT, are not included.
 
Source: Institute on Taxation and Economic Policy Tax Model, March 30,
  2000.

   roth plan does not focus its benefits on families facing marriage 
                               penalties

       Three of the proposals in the Roth plan, the standard 
     deduction increase, the tax bracket extensions, and the EITC 
     provision--would provide general tax relief for married 
     couples, rather than marriage penalty relief focused on 
     families that actually face penalties. The fourth provision, 
     allowing tax credits to offset the AMT, is not specifically 
     targeted on married couples.
       Under the current tax structure, no one-earner couples face 
     marriage penalties; they generally receive marriage bonuses. 
     The families that face marriage penalties are two-earner 
     families. The Roth plan, however, would reduce tax burdens 
     for one-earner and two-earner married couples alike. As a 
     result, the plan is far more expensive than it needs to be to 
     reduce marriage penalties.
       Indeed, nearly two-fifths of the cost of the legislation 
     results from tax reductions that would increase marriage 
     bonuses rather than reducing marriage penalties. Another two-
     fifths of the cost would reduce marriage penalties. The 
     remaining fifth would not affect marriage penalties and 
     bonuses.
       If the ``marriage penalties relief'' provisions are 
     considered alone, approximately half of the cost of these 
     provisions would go to increase marriage bonuses. When the 
     Treasury Department examined a proposal to expand the 
     standard deduction for married filers and to set the tax 
     brackets for married couples at twice the level for single 
     taxpayers--a plan similar to the Roth proposal--it found that 
     only about half of the resulting tax cuts would go to reduce 
     marriage penalties, with the rest going to increasing 
     marriages bonuses.


                      long-term cost of roth plan

       The Roth plan has a $248 billion price tag over ten years, 
     in comparison to the $182 billion cost of the similar 
     marriage penalty relief plan the House passed earlier this 
     year. The major difference relates to the Alternative Minimum 
     Tax. The House bill does not include any provision to allow 
     non-refundable credits to offset the AMT, even though failure 
     to do so would allow the Alternative Minimum Tax in future 
     years to tax back from millions of middle-class taxpayers the 
     tax benefits that the legislation otherwise provides. If one 
     assumes the full cost of the House plan ultimately would 
     include changing the AMT to prevent that from occurring, the 
     full cost of the plan would be considerably higher than $182 
     billion.
       The Roth plan, which includes substantial AMT changes, 
     provides a more accurate view of the total cost. 
     Nevertheless, the Roth plan itself appears to hold hidden 
     costs relating to the AMT. Even under the Roth plan, the 
     alternative minimum tax would prevent some higher-income 
     married taxpayers from enjoying the benefits of the wider tax 
     brackets. If the Roth plan were enacted and the AMT were 
     subsequently modified to address this issue, as would be 
     likely, the changes in the Roth plan would have a larger 
     cost.
       Leaving aside the additional AMT issues that might have to 
     be addressed in future years, the Roth plan would rise in 
     cost from $23.3 billion in 2005 to $39.9 billion annually by 
     2010 (assuming the sunsets do not hold). When the plan was 
     fully in effect, its long-term cost thus would greatly exceed 
     the $248 billion price tag for the first ten years.


                   Democrats Offer More Targeted Plan

       Democrats are expected to offer on the Senate floor a 
     modestly less expensive version of marriage penalty relief 
     that is more targeted on married couples that experience 
     marriage penalties under current law.
       The Democratic plan would give married couples two 
     different options for filing their taxes. The couples could 
     file jointly, as the vast majority of couples do under 
     current law. Alternatively, couples would have a new option 
     under which a husband and wife could each file as single 
     individuals, although they would file together on the same 
     tax return. Each couple would have the opportunity to make 
     two different tax calculations and pay taxes using the method 
     that resulted in the lowest tax bill. In addition, the 
     proposal would in some circumstances allow each spouse in a 
     family with more than one child to claim a separate Earned 
     Income Credit (for different children), based on that 
     spouse's income; this would effectively double the level of 
     income such a family could have and receive the EITC.
       This new option for single filing would begin to be phased 
     out for couples with incomes exceeding $100,000. Couples with 
     incomes exceeding $150,000 would not be eligible to use the 
     option.
       The optional separate filing provision would reduce or 
     eliminate marriage penalties for most couples below the 
     $150,000 income limit. It would maintain marriage bonuses for 
     couples that receive such bonuses under current law. In 
     contrast to the Roth plan, however, it would not increase 
     marriage bonuses for couples that already receive them.
       The Democratic alternative would cost approximately $21 
     billion a year when fully in effect in 2004. Buy comparison, 
     the Republican plan would cost approximately $40 billion a 
     year when fully in effect in the years 2008-2010, of which 
     slightly more than $30 billion a year is attributable to the 
     marriage penalty provisions. (The remainder reflects the 
     costs of the AMT provisions.) When costs for similar years 
     are compared, the fully phased-in cost of the Democratic plan 
     would be about four-fifths of the fully phased-in cost of the 
     Republican bill, excluding its AMT provisions.

  Mr. FEINGOLD. I ask unanimous consent that my amendment be 
temporarily laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3846

 (Purpose: To provide a nonrefundable credit against tax for costs of 
  COBRA continuation insurance and allow extended COBRA coverage for 
              qualified retirees, and for other purposes)

  Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER (Mr. Bunning). The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] proposes an 
     amendment numbered 3846.

  Mr. FEINGOLD. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. FEINGOLD. Mr. President, I rise to offer an amendment to expand 
access to affordable health insurance through COBRA. It includes a 25 
percent tax credit for COBRA premiums, plus an expansion of COBRA to 
cover retirees whose employer-sponsored coverage is terminated. It pays 
for this expansion by eliminating a tax break for mining companies.
  Since 1985, people who lose their jobs have been able to buy into 
their former

[[Page 14401]]

employer's health insurance plan. This COBRA coverage has provided some 
continuity to workers between jobs, but for many Americans, COBRA is an 
empty promise.
  That is because under COBRA, people have to pay their own way. But 
many people who lose their jobs lose any hope of being able to afford 
health insurance on their own.
  Mr. President, employer coverage gets a tax break, but individual 
purchases do not. This amendment would rectify the situation in part by 
providing a 25 percent tax credit to individual COBRA premiums, giving 
a little support to people who would otherwise go without health 
coverage.
  But COBRA only applies for a brief time, generally eighteen months at 
most. After that, people must find another source of insurance, or be 
forced to join the growing legions of uninsured Americans.
  For older Americans before age 65, there is no other practical source 
of insurance. Individual plans for people at age 60 can be four times 
the amount that young Americans could pay. In many parts of the 
country, the market for individual coverage is not sufficiently 
developed to provide seniors any affordable health care option.
  That is why this amendment also extends COBRA for retirees whose 
employers discontinue their health coverage. Retirees would not lose 
access to COBRA after eighteen months, but could keep it until they 
turn 65 and qualify for Medicare.
  Imagine getting a letter from your former employer one day telling 
you that the retiree health coverage that you had been promised and 
that you had been counting on was going to be taken away from you. 
There would be nothing you could do about it. Only with approval of 
this amendment would you be guaranteed access to quality health care.
  To pay for expanding access to health care, this amendment would 
eliminate from the tax code the percentage depletion allowance for 
hardrock minerals mined on federal public lands. It retains the 
percentage depletion allowance for oil and gas extracted on public and 
private land, and also retains this deduction when hardrock minerals 
are mined on private land.
  Mineral producers are allowed to deduct a defined percentage of their 
profits from their income before computing income taxes. There is no 
restriction in the tax code to limit this deduction to the value of the 
property, and this deduction is in addition to standard cost depletion 
for capital equipment such as machinery and vehicles. As a result, 
companies may over time deduct more than the total value of the 
property.
  Today, the percentage depletion rate for most hardrock minerals is 22 
percent, while others such as gold, silver, copper and iron ore are 
depleted at lower rates ranging from 5 percent to 15 percent.
  On public lands, where mining companies do not pay any return to the 
taxpayer for the value of the mineral resources they are depleting, and 
pay a very nominal patenting fee, this policy is very costly to the 
American taxpayer.
  So instead of providing this tax break to mining companies, let's 
instead offer a little help to people who lose their health insurance.
  Mr. President, 44 million Americans lack basic health insurance. This 
is a problem that demands attention. Let's build on a law that already 
works to help people, Americans who have not other health care choice. 
Let's expand COBRA for retirees to support their transition form work 
to Medicare. Let's help people afford to keep the health insurance they 
need. I ask my colleagues to support this sensible amendment. I yield 
the floor.
  Mr. President, I ask unanimous consent that my amendment be 
temporarily laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FEINGOLD. I thank my colleagues for their patience on this. I 
look forward to the votes on these amendments. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.


                           Amendment No. 3847

(Purpose: To amend the Fair Labor Standards Act of 1938 to provide more 
effective remedies to victims of discrimination in the payment of wages 
                          on the basis of sex)

  Mr. HARKIN. Mr. President, I send an amendment to the desk on behalf 
of myself, Senator Daschle, Senator Feinstein, and Senator Kennedy.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin], for himself, Mr. 
     Daschle, Mrs. Feinstein, Mr. Kennedy, and Mr. Reid, proposes 
     an amendment numbered 3847.

  Mr. HARKIN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. HARKIN. Mr. President, this amendment is the Paycheck Fairness 
Act, which was introduced under Senator Daschle's leadership. It 
addresses an important economic issue--an issue that affects women, 
working families, retirees and America's children. I'm talking about 
the wage gap between women and men and how this legislation would work 
to close it.
  You might think since Congress passed the Equal Pay Act in 1963, the 
wage gap wouldn't exist. But women are still paid only 73 cents for 
every dollar a white man earns.
  Part of the problem is that we need to do a better job of enforcing 
that law. That's why I am a proud cosponsor of this bill that would 
strengthen the Equal Pay Act.
  This legislation would allow those who win their wage discrimination 
claims in court, to collect punitive and compensatory damages. It would 
put new money into employer education and honor employers with best 
practices. And, it would ensure that women can not be retaliated 
against by their employers for sharing pay information.
  Senator Daschle's bill is a modest but needed step in ending pay 
discrimination. It has received strong support from the Administration 
and from advocates for working women, such as the AFL-CIO and the 
Business and Professional Women, the National Women's Law Center, and 
the National Partnership for Women and Families.
  This body also has before it, the Fair Pay Act, legislation that I 
have introduced which takes the next step to closing the wage gap. It 
targets female-dominated jobs that are routinely underpaid and 
undervalued. My bill would require wages be set based on 
responsibility, skill, effort and working conditions.
  The simple fact remains--working families face the problem of wage 
discrimination every day and lose billions of dollars in wages because 
of it. The average working woman loses $420,000 over a lifetime due to 
the wage gap.
  We cannot continue to short-change women and families. It is our hope 
that for working women today, that this Congress will pass the Paycheck 
Fairness amendment to help end the wage gap.
  Mr. President, I ask unanimous consent that my amendment be 
temporarily laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that I be added as a 
cosponsor of the Harkin amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I ask unanimous consent to be added as a 
cosponsor of the Harkin amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, pay discrimination against women 
continues to be a serious problem in our society. The wage gap now 
costs America's families $200 billion a year. Nearly two-thirds of 
working women report that they provide half or more of their family's 
income, and nearly one in five U.S. families is headed by a single 
woman. Yet single mothers continue to earn the lowest average rate of 
pay.
  Although the Equal Pay Act was signed into law 37 years ago, the wage 
gap today continues to plague American families, and wage 
discrimination

[[Page 14402]]

continues to be a serious and pervasive problem in workplaces across 
the country. In spite of the Equal Pay Act, women still earn only 73 
cents for every dollar earned by men. And the pay disparities between 
white men and women of color are even more disturbing. African American 
women earn just 63 cents, and Latinas earn only 53 cents for every 
dollar earned by white men. And men of color suffer from pay inequality 
as well.
  These disparities translate into large costs in lost wages and lost 
opportunity. The average working woman loses $4,200 in income annually, 
and suffers a loss of $420,000 over her career. In Massachusetts, women 
earn an average of $512 weekly, compared to $640 earned by men for the 
same period of time. This gender gap has a long-term impact, since 
lower wages and lower lifetime earnings lead to lower pension benefits 
in retirement. The median pension benefit received by new female 
retirees is less than half that of benefits received by men.
  Women are entitled to the same paychecks as male colleagues who 
perform the same or comparable work. Without this guarantee, women are 
less able to provide an economic safety net for themselves and their 
families. If married women were paid the same wages as men in 
comparable positions, their family incomes would rise by nearly 6 
percent, and their families' poverty rates would fall. If single women 
earned as much as men in comparable positions, their incomes would rise 
by 13 percent, and their poverty rates would be reduced as well. These 
figures demonstrate the severe effect of pay disparities on the lives 
of women and their families.
  Equal pay helps men as well as women. One of the major causes of pay 
inequity is sex segregation in the workplace. Jobs traditionally held 
by men, such as jobs which involve heavy lifting or truck driving, are 
compensated more highly than jobs traditionally held by women, which 
often involve caretaking or nurturing activities. Both men and women in 
jobs predominantly held by women--such as sales, service, nursing, 
child care, teaching and clerical positions--suffer the effects of pay 
bias. As the percentage of women within an occupation increases, the 
wages for that job decrease.
  Women and men alike will receive significant gains in earnings if 
they are paid the same wages as comparable workers in jobs that are not 
predominantly female. Men and women who work in predominantly female 
occupations earn less than comparable workers in other occupations. 
Women would gain $89 billion a year, and men would gain $25 billion 
from pay equity increases in female-dominated jobs. The 4 million men 
who work in predominately female occupations lose, on average, over 
$6200 each year. The increase in payroll costs that would result from 
these wage adjustments would be only 3.7 percent of total hourly 
payroll costs throughout the economy.
  Some argue that these differences in pay are based on different 
levels of education, years in the workforce and similar factors. But, 
these factors alone do not explain away the wage gap. Studies have 
found substantial pay differences between men and women working in the 
same narrowly defined occupations and establishments. Studies of 
discrimination in hiring offer additional evidence on the gender pay 
gap.
  Educational advancement hasn't solved this problem. Although women 
have now surpassed men in the percentage of those earning a college or 
advanced degree, college-educated women earn almost $14,000 less than 
college educated men. A black woman with a master's degree earns almost 
$10,000 less annually than a college-educated white male. A college-
educated Hispanic female makes only $727 more than a white male with a 
high school degree. These disparities in compensation for men and women 
can be explained by one factor--blatant discrimination.
  Consider the story of Sarah Foulger, who served as pastor of a church 
in Maine for more than 10 years. For the last 5 of those years, she 
asked for a pay raise, and every year she was told the increase had to 
be delayed or reduced. Within weeks of her departure, the church was 
able to significantly increase the salary of the male pastor hired to 
replace her. After 17 years of her ministry, she earned less than 
$7,000 in pension credits. The third of her salary that was missing--
multiplied by just 4 years of being underpaid --would have added up to 
enough money to pay for a State college education for one of her 
children.
  Gender and race-based wage discrimination is also present on Capitol 
Hill, and it is glaring and embarrassing for all of us. Women custodial 
workers in the House and Senate Office Buildings have been underpaid 
for years, and have finally brought suit against the Architect of the 
Capitol. Even though the women custodians perform essentially the same 
work under the same job conditions as male workers, they are paid 
almost a dollar less an hour.
  But there are some successes. Nancy Hopkins is a molecular biologist 
and professor at M.I.T. When she learned that she was making less than 
her male colleagues, she took the issue to the administration. M.I.T's 
top officials responded by issuing a report acknowledging that its 
female professors suffered from pervasive, if unintentional, 
discrimination. The report documented discrimination in hiring, awards, 
promotions, membership on important committees, and allocation of 
important resources such as laboratory space and research funding.
  Eastman Kodak Company provides another significant example. After an 
internal study of its compensation practices, Kodak voluntarily agreed 
to pay $13 million in back pay to 2,000 female and minority employees 
who had been underpaid because of their race or gender. Kodak continues 
to work to improve the number of women and minorities in mid-level and 
senior-level management positions.
  The plight of these women who work hard and are denied fair 
compensation is unacceptable. The disparities are particularly alarming 
because they persist almost 40 years after the Equal Pay Act was 
enacted, and at a time when our nation is experiencing unprecedented 
prosperity, when women are entering the workforce in record numbers, 
and when women are spending less time at home with their children, and 
more time at work.
  Businesses and other private institutions across the country also 
have a responsibility to do more to correct this injustice. I commend 
M.I.T. for the impressive example it has set by acknowledging that 
women professors suffer from pervasive pay discrimination and by making 
a clear commitment to correct it. And I commend Eastman Kodak for its 
efforts to address the wage gap in response to NAACP concerns, by 
launching an investigation and providing raises for 12 percent of its 
female and 33 percent of its black employees. More businesses and 
organizations need to follow these leads.
  Congress must do more to solve this unconscionable problem. Our goal 
is not just to reduce the pay gap, but to eliminate it entirely. 
Senator Daschle's Paycheck Fairness Act is a needed step to correct 
this injustice in pay. It will provide more effective remedies for 
women denied equal pay for equal work. And Senator Harkin's Fair Pay 
Act will prohibit wage discrimination based on sex, race, or national 
origin for employees in equivalent jobs in the same workplace. Congress 
should pass both the Paycheck Fairness Act and The Fair Pay Act. These 
bills are necessary steps to eliminate the disparity between the 
earning power of men and women. It's the right thing to do--and the 
fair thing to do--for working families.
  At a time when our economy is more prosperous than ever, when 
unemployment is at a 30 year low, and when women are entering the labor 
force at an all time high, there is no excuse for discrimination that 
cheats women out of their fair pay.

[[Page 14403]]




                           Amendment No. 3848

  (Purpose: To amend title XIX and XXI of the Social Security Act to 
 permit States to expand coverage under the Medicaid program and SCHIP 
        to parents of enrolled children and for other purposes)

  Mr. KENNEDY. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kennedy] proposes an 
     amendment numbered 3848.

  Mr. KENNEDY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. KENNEDY. Mr. President, the Republican marriage tax plan provides 
a quarter of a trillion dollars in tax breaks over the next ten years. 
Only 15 cents of every dollar in tax breaks goes to families with 
incomes of less than $50,000 a year. Sixty-eight cents of every dollar 
goes to families with incomes of more than $75,000 a year and 40 cents 
goes to individuals with more than $100,000 in income. Someone with 
$200,000 in income gets a $1,300 tax break, while a family struggling 
to make ends meet on $30,000 a year gets a meager $172--about fifty 
cents a day. Many of the tax breaks in the bill have nothing to do with 
the so-called marriage penalty.
  I'd like to point out that right now we have a marriage and work 
penalty in Medicaid. Up to 14 states--which account for more than 22 
percent of the population--penalize two-parent low-income families by 
having stricter eligibility standards for Medicaid or even prohibiting 
enrollment. For example, in Maine, married parents earning a total of 
$14,000 annually can't qualify for Medicaid, but a single parent 
earning the same amount can.
  The work penalty is equally appalling. In 37 states, a single parent 
with two children can qualify for Medicaid only if she earns 80 percent 
of the poverty level or less. Only 13 states offer Medicaid coverage to 
a single parent who works full-time in a minimum wage job and has two 
children. That's wrong, and this amendment would fix it.
  It would also provide financial incentives and new options for states 
to expand CHIP and Medicaid to parents and older youths, and it would 
improve enrollment in CHIP and Medicaid. These are two important steps 
that we should be able to take this year.
  An overwhelming majority of the uninsured are working men or women, 
or family members of workers. In fact, the vast majority are members of 
families with at least one person working full-time.
  Most uninsured workers are not uninsured by choice. They are 
uninsured because their employer either does not offer coverage, or 
because they are not eligible for the coverage if it is offered. 
Seventy percent of uninsured workers are in firms where no coverage is 
offered. Eighteen percent are in firms that offer coverage, but they 
are not eligible for it, usually because they are part-time workers or 
have not worked in the firm long enough to qualify for coverage. Only 
12 percent of uninsured workers are offered coverage and actually 
decline, and some of them do so because they have other coverage 
available.
  Most of the uninsured have low or moderate incomes. Thirty-seven 
percent are at or below the federal poverty level. Twenty-eight percent 
have incomes between 100 and 200 percent of poverty. Fifteen percent 
have incomes between 200 and 300 percent of poverty.
  While good coverage for all Americans may not be feasible at this 
time, we can and must do more to close the current health insurance 
gap.
  It is a national scandal that lack of insurance coverage is the 
seventh leading--and most preventable--cause of death in America today.
  Numerous studies indicate that lack of insurance leads to second-
class health care or no health care at all. A recent article in the 
Journal of the American Medical Association found that angina patients 
with insurance are more than twice as likely as uninsured patients to 
receive needed bypass surgery. Across the nation, more than 32,000 
patients are going without needed heart surgery because of their lack 
of insurance.
  The numbers are equally dramatic when it comes to cancer. Early 
detection and treatment of cancer often makes the difference between 
life and death. Uninsured patients are two and a half times more likely 
not to receive an early diagnosis of melanoma and one and a half times 
more likely not to benefit from early detection of breast cancer, 
prostate cancer, or colon cancer. Tragically, the new and promising 
treatments resulting from our national investment in the NIH are out of 
reach for millions of uninsured Americans.
  In 1997, we took a major step toward guaranteeing health insurance to 
millions of children in low-income working families whose earnings are 
above the cut-off for Medicaid. Every state is now participating in the 
children's health insurance plan, and most states have plans to 
increase coverage under these programs again this year.
  As of January, two million children had been enrolled in the program, 
and many other children had signed up for Medicaid as a result of the 
outreach efforts. Soon, more than three-quarters of all uninsured 
children in the nation will be eligible for assistance through either 
CHIP or Medicaid.
  An article in the Journal of the American Medical Association found 
that 57 percent of uninsured children had an unmet major medical need 
before enactment of CHIP. But just one year after receiving coverage, 
only 16 percent of these same children had an unmet medical need.
  The lesson is clear. Access to insurance improves access to health 
care, which improves health. We have the resources. We have good 
programs. We must do all we can to increase their effectiveness. 
Clearly, the states and the federal government have more to do.
  The overwhelming majority of uninsured low-wage parents are 
struggling to support their families. Too often, there is too little 
left to pay for health care. Parents who work hard, 40 hours a week, 52 
weeks a year, should be eligible for assistance to buy the health 
insurance they need to protect their families. Our message to them 
today is that help with health care is on the way.
  As I mentioned earlier, under current law, Medicaid is generally 
available only to single-parent families. Our proposal also repeals 
this ``health marriage tax.'' It is a serious penalty for low-wage two-
parent families, and one which is comparable to the ``marriage 
penalty'' in the tax code.
  This proposal also rewards work. Currently, most parents in families 
with an employed person are not eligible for Medicaid, while families 
headed by non-workers are eligible if their income is low enough. 
That's not right. Eligibility should be tied to need, not to employment 
status. It's a historical artifact of the system and it ought to be 
changed.
  Coverage for parents also means that coverage for their children is 
more likely too. Parents are much more likely to enroll their children 
in health insurance programs, if the parents themselves can obtain 
coverage.
  These steps will provide up to six and a half million more Americans 
with the health insurance coverage they need and deserve. If we are 
sincere in this debate about helping working families, our goal should 
be to enact this coverage before the end of this year. I urge my 
colleagues to support it.
  Mr. President, I will take a few minutes more of the Senate's time to 
review where we are as an institution and where we are effectively as a 
country on the people's business.
  We have just passed an estate tax bill that is going to cost the 
Treasury $750 billion over the next 20 years. Half of the benefit of 
that, some $300 billion, will benefit some 1,400 families. Four hundred 
families will benefit by $250 billion. So this is a proposal that is 
basically benefiting the wealthiest individuals in the country.
  With the marriage penalty tax that is before us, it is $250 billion 
over a 10-year period, and 40 percent of the people who benefit from it 
have incomes

[[Page 14404]]

over $100,000--$100 billion of that $250 billion is going to go to 
people with incomes in excess of $100,000.
  As the result, at the end of this week and at the end of 
consideration of the legislation before us, we will have expended $1 
trillion. Going into Monday night, when we are going to complete the 
issue on the marriage penalty, we will have spent $1 trillion. We have 
to ask, who has benefited and who has not.
  Quite clearly, as this chart points out, the people who have 
benefited are the wealthiest individuals in our country. We see the 
average value of estate exempted under the Republican plan is $2.3 
million. The median income of a Medicare beneficiary is $13,800.
  We find out, if we look at another indicator about who is going to 
benefit, that the Federal expenditure per person under the Republican 
estate tax repeal is $268,000 versus $900 for the Medicare prescription 
drug coverage we are trying to pass here.
  We think it is about time that we started looking out after the 
senior citizens, 40 million of them, who need a prescription drug 
program. We know they have enormous needs. That is why we are in such 
strong support of the proposal being advanced by Senator Robb, Senator 
Graham, the leader, and other measures.
  At the end of this week and the beginning of next week, with the 
expenditure of about $1 trillion from the Treasury, we are not buying 
one new book for a child in America. We are not buying one new Band-Aid 
or one prescription drug for a senior citizen who is in need.
  We are not making our schools any safer by an effective program that 
might limit guns in our schools in this country. We have not done a 
single thing to stop an accountant in an HMO from denying care that may 
put a patient at further risk in our society. We have not done anything 
about prescription drugs. We have not done anything to provide a real 
Patients' Bill of Rights. That is at the end of this week, where we 
have spent $1 trillion.
  When I go back to Massachusetts in a short while, people are going to 
be asking: What have you done? You spent $1 trillion. Have you done 
anything for our schoolchildren? Have you done anything for our 
parents? Have you done anything about prescription drugs? Have you done 
anything to make our health care system safer? Have you done anything 
to make our schools safer? Have you done anything to increase access to 
health care? The answer to all of those is no, we have not.
  That is very clearly not a matter of accident. That is a matter of 
choice. It is a matter of priority.
  It is a result of the Republican leadership having set out an agenda, 
and it is an agenda to which I take strong exception. I cannot believe 
that it is the agenda of working families in this country. It cannot 
reflect their priorities.
  Working families are concerned most about their children. They are 
concerned about their parents. They are concerned about their jobs and 
safety and security. They are concerned about living in safe and secure 
neighborhoods with clean air and clean water.
  We have not touched a single item that will impact and affect average 
families in America. As an institution, we have failed to meet their 
priorities.
  We are going to continue to fight these battles, next week and 
beyond, all the way through, as long as we are in session. We will 
fight it continuously right up to the time of the election.
  I want to be clear. I support legislation that would provide tax 
relief to the working families who are currently paying a marriage 
penalty. Such a penalty is unfair and should be eliminated. However, I 
do not support the proposal which the Republicans have brought to the 
floor.
  While its sponsors claim the purpose of the bill is to provide 
marriage penalty relief, that is not its real purpose. In fact, only 42 
percent of the tax benefits contained in the legislation go to couples 
currently subject to a marriage penalty. The majority of the tax 
benefits would actually go to couples who are already receiving a 
marriage bonus, and to single taxpayers. As a result, the cost of the 
legislation is highly inflated. It would cost $248 billion over the 
next ten years.
  And, as with most Republican tax breaks, the overwhelming majority of 
the tax benefits would go to the wealthiest taxpayers. This bill is 
designed to give more than 78 percent of the total tax savings to the 
wealthiest 20 percent of taxpayers.
  It is, in reality, the latest ploy in the Republican scheme to spend 
the entire surplus on tax cuts which would disproportionately benefit 
the richest taxpayers. That is not what the American people mean when 
they ask for relief from the marriage penalty. With this bill, the 
Republicans have deliberately distorted the legitimate concern of 
married couples for tax fairness.
  All married couples do not pay a marriage penalty. In fact, a larger 
percentage of couples receive a marriage bonus than pay a marriage 
penalty. The only couples who pay a penalty are those families in which 
both spouses work and have relatively equivalent incomes. They deserve 
relief from this inequity and they deserve it now. We can provide 
relief to the overwhelming majority of the couples simply and at a 
modest cost. That is what the Senate should do. Instead, the 
Republicans have insisted on greatly inflating the cost of the bill by 
adding extraneous tax breaks primarily benefitting the wealthiest 
taxpayers.
  A plan that would eliminate the marriage penalty for married couples 
could easily be designed at a much lower cost. The House Democrats 
offered such a plan when they debated this issue in February. The 
Senate Democrats are offering such an alternative plan today. If the 
real purpose of the legislation is to eliminate the marriage penalty 
for those working families who actually pay a penalty under current 
law, it can be accomplished at a reasonable cost.
  The key to drafting an affordable plan to eliminate the marriage 
penalty is to focus the tax relief on those couples who actually pay 
the penalty under current law. The Republican proposal fails to do 
this, and, as a result, it actually perpetuates the marriage penalty 
despite the expenditure of $248 billion on new tax cuts. Under the 
Democratic plan, the tax relief actually goes to those currently paying 
a marriage penalty. It is also essential to target the tax benefits to 
the middle income working families who need tax relief the most. The 
Democratic plan focuses the tax benefits on those two earner families 
with incomes less than $150,000. By contrast, major portions of the tax 
benefits in the Republican plan would go to much wealthier taxpayers at 
the expense of those families with more modest incomes. As a result, 
the Democratic proposal would cost $11 billion a year less, when fully 
implemented, than the Republican plan, yet provide more marriage 
penalty tax relief to middle income families.
  The problem we have consistently faced is that our Republican 
colleagues insist on using marriage penalty relief as a subterfuge to 
enact large tax breaks unrelated to relieving the marriage penalty and 
heavily weighted to the wealthiest taxpayers. The House Republicans put 
forward a bill which would cost $182 billion over 10 years and give 
less than half the tax benefits to people who pay a marriage penalty. 
Even that was not enough for the Senate Republicans. They raised the 
cost to $248 billion over 10 years with nearly all the additional 
amount going to the wealthiest taxpayers. A substantial majority, 58 
percent of the tax breaks in the Senate bill would go to taxpayers who 
do not pay a marriage penalty.
  Nor is this the only excessive and unfair tax cut bill the 
Republicans have brought to the floor this year. They attached tax cuts 
to the minimum wage bill in the House, tax cuts to the bankruptcy bill 
in the Senate. They have sought to pass tax cuts to subsidize private 
school tuition and to eliminate the inheritance tax paid by 
multimillionaires.
  Just this morning, the Republican leadership forced through the 
Senate a complete repeal of the inheritance tax, which will cost over 
$50 billion per year when fully implemented. More than 90

[[Page 14405]]

percent of the tax benefits of that bill will go to the richest one 
percent of taxpayers.
  In total, the Republicans in the House and Senate have already passed 
tax cuts that would consume over $700 billion during the next ten 
years.
  The result of this tax cut frenzy is to crowd out necessary spending 
on the priorities that the American people care most about--education, 
prescription drugs for seniors, health care for uninsured families, 
strengthening Medicare and Social Security for future generations. It's 
misguided and short-sighted, and I strongly object to it.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, Senator Brownback and I are going to 
make statements about the bill. This is my bill. I have been working on 
marriage penalty relief for the last 4 years.
  Senator Ashcroft, Senator Abraham, Senator Grams of Minnesota, 
Senator Brownback, and I, along with my colleague, Senator Gramm, have 
all made this a very high priority in our legislative agenda. We have 
made this a high priority because we believe it is un-American to make 
people choose between love and money. That is what the marriage penalty 
does.
  In America, if you make $30,000 and you are a schoolteacher and you 
marry a policeman who makes $30,000, all of a sudden, you owe more in 
taxes. I thought it was interesting; the Senator from Massachusetts 
just said we have spent a trillion dollars by giving death tax relief. 
We spent a trillion dollars, and what do we have to show for it?
  I have to ask the question: Whose money is it? Is letting people keep 
more of the money they earn in their pocketbooks and to decide how they 
want to spend it wrong? I think we should let people keep their money. 
I don't consider it spending a trillion dollars, allowing people to 
keep the money they earn. I think it is the reverse.
  I believe we should not be spending other people's money, when we are 
running a huge surplus and don't need it in the Federal Government for 
new programs. I believe the American people can make better decisions 
about how they spend the money they earn than we can here in 
Washington.
  So when you are talking about tax relief, you are not talking about 
spending money. It is not the Government's money. It belongs to the 
people who earn it. Government, by the consent of the governed, will 
take some money for the good of everyone--for national defense, for 
clearly Federal issues that cannot be done by people individually, for 
our security. But it becomes confiscatory when a couple making $30,000 
apiece has to pay $1,000 more in taxes just because they get married. 
That is what we are trying to eliminate today.
  When the distinguished Senator from Massachusetts says we have done 
nothing for the average family, I just ask him if a policeman and a 
schoolteacher constitute an average family. I think they do, and I 
think they deserve the $1,000, or $1,400, more they are paying in taxes 
to make the downpayment on their first home. That is help for the 
American family. That is help for the average family. A young couple 
who make $30,000 each and get married may not be able to save for a 
downpayment if they are having to pay $1,400 more in taxes just because 
they got married.
  So tax relief is not spending money. Spending money that other people 
earn is spending money--their money. I think there is a huge 
difference.
  The bill we have before us today would double the standard deduction 
so that if you get married, you don't get penalized. Today, if two 
single working people get married, they will pay approximately $1,100 
more in taxes because of the standard deduction. We want to double the 
standard deduction because we don't think it should be different for 
two working singles or a married couple, both working. So we want the 
standard deduction to be $8,800, exactly double the standard deduction.
  Secondly, we want people in the 15-percent bracket and the 28-percent 
bracket not to be punished because the got married and were pushed into 
a higher tax bracket. We do this by widening each bracket for married 
couples so that it is exactly double the bracket size of a single 
taxpayer. So in the 15-percent bracket, if you are single or married, 
it will not make any difference because you will not go into the next 
bracket if we can pass marriage penalty relief because, of course, that 
is the problem. When a schoolteacher, who makes $26,000 and is in the 
15-percent bracket, marries a policeman who makes $26,000 and is in the 
15-percent bracket, they go into the 28-percent bracket, and that is 
why they pay more in taxes. We want them to be able to stay in the 15-
percent bracket, each of them making $26,000 a year. That is exactly 
what our bill does.
  Our bill increases the earned-income tax credit because we know that 
people--especially people coming off welfare--need to be able to have 
an earned-income tax credit to make sure they do better working than 
being on welfare. The Senate bill increases the earned-income tax 
credit parameters by $2,500. That is higher than the House version of 
the bill by $500. We think that is right. We want the people at the 
lowest end of the spectrum to know it really does make a difference 
that you work. We want it to be a benefit.
  Another important aspect of our bill is preserving essential tax 
credits for families. Important tax credits such as the $500 per child 
tax credit, the adoption tax credit, the HOPE scholarship credit for 
families who want to send their children to college, the credit for 
expenses related to child care--they would all remain intact, 
regardless of the alternative minimum tax. Many families are finding 
that, with the alternative minimum tax, they lose the basic deduction 
that everyone else gets. The $500 per child tax credit should apply, 
regardless of whether a person is in the alternative minimum tax 
category.
  We are trying to have a balanced approach for people who have a real 
problem. Just prior to this debate I, and several other Senators met 
with some of the couples that are affected by this bill. We had a 
couple from San Antonio, TX, Noe and Connie Garcia. He works for an 
insurance company; she is a Government employee. When they did their 
taxes last year, they estimated that they paid over $1,000 more in 
taxes because they are married.
  We had a very young couple, Hubert and Min Joo Kim, come to visit 
with us today. They live in Maryland. She is a teacher; he is an 
engineer. They have been married for 2 years, and they have a 1-year-
old daughter named Isabelle, who is absolutely a precious child. But 
they are losing the ability to do some of the things they would like to 
do for Isabelle because they are paying a marriage tax penalty.
  Earlier this year I met with Kervin and Marsha Johnson who live in 
Washington, DC. Kervin is a D.C. police officer. His wife is a Federal 
employee. They were married last July. This year, they paid almost 
$1,000 more in taxes because they chose to get married.
  Mr. President, these are just a few of the 21 million American 
couples who are suffering from the marriage penalty tax. This is not 
just tax relief, this is a tax correction. This is correcting an 
inequity that I don't believe Congress ever intended. Congress did not 
intend to say: If you are a policeman and you make $30,000 a year, and 
you marry a schoolteacher who makes $30,000 a year, we want you to pay 
$1,400 more in taxes. I don't believe Congress ever intended that to 
happen.
  I think it is time for Congress to correct this inequity. If we pass 
this, next year the vast majority of couples will get immediate tax 
relief as we increase the standard deduction. Beginning the year after 
next, we start the phased-in increase of the tax brackets.
  We are going to be debating this bill today, and we are going to 
start voting on some amendments Monday night.
  When we passed marriage tax penalty relief once before, the President 
vetoed the bill. He said he didn't like some of the other tax cuts that 
were in the bill. The President said in his State of the Union Message 
that he favored tax relief for American families. He has said he favors 
marriage tax penalty relief. He said: Send me those bills individually 
because then I can pick and

[[Page 14406]]

choose. So we sent him individually the elimination of the earnings 
test on Social Security recipients. He signed that bill. Today, because 
Congress acted and the President signed the bill, a person who receives 
Social Security benefits can work as much or as little as he or she 
wants to work. There will be no penalty. There will be no earnings 
test. We have opened the doors to hundreds of thousands of our senior 
citizens who would like to earn extra income.
  Today we passed the elimination of the death tax. It is going to the 
President because we believe the American dream does not have fences. 
We believe the American dream is, if you come to America, you will have 
the freedom to succeed, and it will not be dependent on who your 
grandfather was. It will be dependent on you. If you want to work hard 
and give your children a better chance than you had, we want you to be 
able to keep the fruits of your labors and give your children that 
chance.
  We have passed that. We have sent it to the President. We hope the 
President will sign that bill. Now we have marriage penalty relief. 
This is the marriage penalty relief for middle-income people who do not 
have the ability to make the choice not to get married because they 
want to start a family, and they want their children to grow up in a 
healthy, wholesome atmosphere. They don't have that choice because our 
tax code punishes them for doing so.
  We are going to correct this inequity. We are going to pass marriage 
penalty relief. We are going to do what the President asked us to do; 
that is, send him the bill by itself. I hope he will sign it so we can 
give marriage penalty relief to hard-working American families.
  I will close and ask that we hear from Senator Brownback from Kansas, 
who has been the lead cosponsor of marriage penalty relief. We have 
worked for years side by side, along with Senator Abraham, Senator 
Ashcroft, Senator Grams, and my colleague, Senator Gramm, to see this 
come to a successful conclusion.
  I hope we can give the middle-income people of our country--people in 
the 15-percent bracket, the people in the 28-percent bracket, and 
people who get earned-income tax credits--more of the relief they 
deserve because I reject the argument that tax relief is spending 
money. Tax relief is spending money only if you think the Government 
has a right to the money you earned, and I don't think the Government 
does. I think the people who earn the money are entitled to that money. 
Tax relief is not spending money because the Government doesn't own the 
money that is earned by the hard-working people of this country. We 
want them to keep more of it. That is the bottom line in this debate.
  I would like to yield the floor to the Senator from Kansas.
  The PRESIDING OFFICER. The Senator from Kansas is recognized.
  Mr. BROWNBACK. Mr. President, I thank the chairman of the Finance 
Committee, Chairman Roth, who has done an outstanding job of getting 
this bill to this point. We are going to get this to the President. The 
President is going to have the opportunity to sign it and provide 
relief to over 20 million American couples.
  The Senator from Massachusetts argued earlier that we haven't done 
anything for the vast majority of Americans this week. I disagree 
heartily with that. But he can certainly join us on this one.
  We have over 20 million American couples, 40 million people--if you 
count family members affected by this issue, it is far more than that--
who are going to be affected right now by this tax.
  My comments are not long. They are simple and to the point.
  There is an iron rule of government: If you want less of something, 
tax it; if you want more of something, subsidize it. We are taxing 
marriage, and we are getting less of it. That is hurting our families, 
and it is hurting our children.
  We are taxing marriage to the tune of about $1,400 per couple per 
year. The tax is applied to 21 million American couples. We have seen a 
decline in the number of marriages from 1960 to 1996--about 40 percent 
during that period of time. I am not saying that is all associated with 
the marriage penalty. It is not. But, clearly, we are sending a signal 
across the country that we are for family values, but not really. We 
are going to go ahead and tax the very fundamental institution in which 
families do the most, and do their best. We are going to tax the 
fundamental institution around which families are built; that is the 
marriage. We are going to tax it significantly--$1,400 per married 
couple across America.
  When you tax things, you get less of it. You can see what is taking 
place in the number of couples who are affected in this country.
  In Kansas, we have nearly 260,000 married couples affected by the 
marriage penalty. You can see it in States as large as Texas with 1.75 
million. You can see it in States such as New York with 1.5 million; 
States such as Massachusetts where 600,000 couples are taxed by this.
  I certainly don't consider it spending money when you allow people to 
keep a little bit more of their own money, particularly when you have 
such an unfair tax as the one on marriage. It is one of those 
institutions that we should not be taxing, and yet we are.
  The Senator from Texas and the Senator from Delaware hit the 
fundamentals of the bill--expanding the tax brackets in the 15- and 28-
percent bracket, doubling the standard deduction to be able to take 
care of this, and the EITC credit as well--because the marriage penalty 
occurs in about 66 different places in the Tax Code. We are taking care 
of the biggest areas. But there are still some other areas we are 
trying to take care of as well.
  I want to directly hit something that has been raised by some of my 
colleagues on the other side of the aisle, that we are somehow 
providing too much benefit to married couples. One of the Democrat 
proposals pushed around would actually put in place a homemaker 
penalty, where you would tax a couple if one decides to stay at home 
and take care of the family. One of the Democrat proposals would make 
families with one earner and one stay-at-home spouse pay higher taxes 
than families with the same household income and two earners; thus, 
putting in place a stay-at-home spouse penalty; a homemaker penalty.
  Why would we discriminate against families who would decide to make 
the very difficult choice of one working outside of the home, one 
staying at home to take care of older members of the family, and 
younger members of the family to do other things around the community? 
Why would we want to penalize that type of situation and create that 
stay-at-home spouse penalty? I don't understand why that would be 
something we would want to do. Yet it is being bandied about that that 
is one of the amendments supported by our colleagues on the other side 
of the aisle.
  I want to note, too, that the fundamentals of this are pretty simple 
and pretty stark as well. I have another chart to point that out. You 
can look at this as a typical couple getting married. They wanted to 
get married. We encourage this. This is a good thing, building 
families. It is a good thing for family values.
  We have a first-year teacher making $27,000 of annual income. We have 
a rookie police officer with $29,698 of annual income. Individually we 
can see what they would pay in taxes: $3,030 for her; $3,434 for him. 
Yet if you put them together in a joint return, if you encourage them 
to get married and say we want you to build a family, we want you to 
build it within this construction of a marriage, this sacred union 
between man and woman, they say, OK, but our tax bill to do this--look, 
they are not making lots of money here: $27,500 for a first-year 
teacher, $29,000 for a rookie cop--at the Federal level is an 
additional $638.44.
  Some say that is not a lot of money; they ought to pay it. Look at 
what they are making. They need to have this money if they are going to 
be able to do anything as a young couple, to start building a home, 
build some equity, and start a family. That is why this tax strikes so 
many people and why public opinion polls across the

[[Page 14407]]

country say this is one tax people want removed.
  Then we get letters. We get all sorts of letters. The Senator from 
Texas read some letters she received. I receive them. A number of 
Senators do.
  This one is from Mark in Salina, KS, writing to urge us to reduce the 
marriage penalty. He says:

       Two single people that choose to get married must not pay 
     more tax than two people who choose not to do so. That is a 
     penalty for getting married. Correcting this problem is not 
     ``cutting taxes.'' It is merely restoring them back to the 
     way they were before the couple joined in marriage. Thus it 
     is not a tax cut. It is the correction of the penalty for 
     getting married. Please do the right thing.

  The right thing clearly is passing this bill. The right thing for the 
President to do is sign this bill into law.
  I have this letter from Thomas, from Hilliard, OH:

       No person who legitimately supports family values could be 
     against this bill. The marriage penalty is but another 
     example of how in the past 40 years the Federal Government 
     has enacted policies that have broken down the fundamental 
     institutions that were the strength of this country from the 
     start.

  This gentleman has hit on a couple of things. One, it is not a fair 
tax in the first place; it is something we ought to do away with. He 
even looks deeper and says, Is the Federal Government really trying to 
harm one of our fundamental institutions, as a country? Is that really 
the signal the Federal Government is sending me? Is that what they want 
to do? Yet a lot of people looking at the Government today actually 
believe that is the case, that the Government is trying to break down 
some of these fundamental institutions in our country around which we 
build our values and on which we build our Nation.
  Here is another one from Jerry Fishbein, Pennsylvania. He writes:
  My wife and I have actually discussed the possibility of obtaining a 
divorce--something neither of us wants or believes in, especially 
myself . . . simply because my family cannot afford to pay the price 
[of the marriage penalty tax.]

  We have had much debate on this issue. I am not going to keep that 
going on the floor. I think this is a clear choice. We should pass the 
marriage penalty elimination. We should not put in place a homemaker 
penalty within this bill. We should provide this relief to over 20 
million American couples.
  The President of the United States and his administration should sign 
this bill into law. We will pass this in the Senate. If it is passed in 
the House, the only thing that stands in the way of this bill is the 
President of the United States and his administration. I ask them, do 
they really want to send a signal to the American population that they 
don't value marriage; That they think it should be taxed so we get less 
of it? Is that really the signal they want to send?
  I hope they will not and that the President will sign this into law.


                           Amendment No. 3849

  (Purpose: To provide tax relief for farmers, and for other purposes)

  Mr. BROWNBACK. Mr. President, I have an amendment. I send it to the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Kansas [Mr. Brownback] proposes an 
     amendment numbered 3849.

  Mr. BROWNBACK. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. BROWNBACK. Mr. President, this is an amendment I want to get into 
the mix. I would like it to be brought up and considered on Monday. It 
deals with a number of issues that are affecting CRP payments. I submit 
it for consideration, and I ask it be considered at the proper time. I 
ask now it be set aside for other business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWNBACK. Mr. President, this is the right time and the right 
place. We have the wherewithal; we have the ability; we have the need 
to do this. This body should pass this bill. The President should sign 
this bill into law and eliminate the marriage penalty tax.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I have a number of amendments I am going to 
send to the desk.


                           Amendment No. 3850

  Mr. REID. I send to the desk, first, an amendment on behalf of 
Senator Durbin and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Durbin, 
     proposes an amendment numbered 3850.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To amend the Internal Revenue Code of 1986 to increase the 
deduction for health insurance costs of self-employed individuals, and 
                          for other purposes)

       At the end, add the following:

     SEC. __. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) of the Internal Revenue 
     Code of 1986 (relating to special rules for health insurance 
     costs of self-employed individuals) is amended to read as 
     follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''.
       (c) Effective Date.--The amendment made by this section 
     applies to taxable years beginning after December 31, 2000.

  Mr. ROTH. Mr. President, I make a point of order a quorum is not 
present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 3851 to Amendment No. 3850

  Mr. ROTH. Mr. President, I send to the desk an amendment in the 
second degree on behalf of Senator Bond, to the amendment offered on 
behalf of Senator Durbin.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Bond, 
     proposes an amendment numbered 3851.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike all after the first word, and insert the following:

     1. SHORT TITLE.

       This Act may be cited as the ``Self-Employed Health 
     Insurance Fairness Act of 1999''.

     SEC. __. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) of the Internal Revenue 
     Code of 1986 (relating to special rules for health insurance 
     costs of self-employed individuals) is amended to read as 
     follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) of the Internal 
     Revenue Code of 1986 is amended to read as follows: 
     ``Paragraph (1) shall not apply to any taxpayer for any 
     calendar month for which the taxpayer participates in any 
     subsidized health plan maintained by any employer (other than 
     an employer described in section 401(c)(4)) of the taxpayer 
     or the spouse of the taxpayer.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

  Mr. REID. Mr. President, we yield back our time on this amendment.

[[Page 14408]]


  Mr. ROTH. We yield back our time on the amendment.


                           Amendment No. 3852

  Mr. REID. Mr. President, I send a second amendment to the desk for 
Senator Durbin.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Durbin, 
     proposes an amendment numbered 3852.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To amend the Internal Revenue Code of 1986 to allow small 
  business employers a credit against income tax for employee health 
          insurance expenses paid or incurred by the employer)

       At the end, add the following:

     SEC. __. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following:

     ``SEC. 45D. EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a small employer, the employee health insurance 
     expenses credit determined under this section is an amount 
     equal to the applicable percentage of the amount paid by the 
     taxpayer during the taxable year for qualified employee 
     health insurance expenses.
       ``(b) Applicable Percentage.--For purposes of subsection 
     (a)--
       ``(1) In general.--Except as provided in paragraph (2), the 
     applicable percentage is equal to--
       ``(A) 25 percent in the case of self-only coverage, and
       ``(B) 35 percent in the case of family coverage (as defined 
     in section 220(c)(5)).
       ``(2) First year coverage.--
       ``(A) In general.--In the case of first year coverage, 
     paragraph (1) shall be applied by substituting `60 percent' 
     for `25 percent' and `70 percent' for `35 percent'.
       ``(B) First year coverage.--For purposes of subparagraph 
     (A), the term `first year coverage' means the first taxable 
     year in which the small employer pays qualified employee 
     health insurance expenses but only if such small employer did 
     not provide health insurance coverage for any qualified 
     employee during the 2 taxable years immediately preceding the 
     taxable year.
       ``(c) Per Employee Dollar Limitation.--The amount of 
     qualified employee health insurance expenses taken into 
     account under subsection (a) with respect to any qualified 
     employee for any taxable year shall not exceed--
       ``(1) $1,800 in the case of self-only coverage, and
       ``(2) $4,000 in the case of family coverage (as so 
     defined).
       ``(d) Definitions.--For purposes of this section--
       ``(1) Small employer.--
       ``(A) In general.--The term `small employer' means, with 
     respect to any calendar year, any employer if such employer 
     employed an average of 9 or fewer employees on business days 
     during either of the 2 preceding calendar years. For purposes 
     of the preceding sentence, a preceding calendar year may be 
     taken into account only if the employer was in existence 
     throughout such year.
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     1st preceding calendar year, the determination under 
     subparagraph (A) shall be based on the average number of 
     employees that it is reasonably expected such employer will 
     employ on business days in the current calendar year.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage to the extent such amount is 
     attributable to coverage provided to any employee while such 
     employee is a qualified employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term by 
     section 9832(b)(1).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, an employee of an employer if the 
     total amount of wages paid or incurred by such employer to 
     such employee at an annual rate during the taxable year 
     exceeds $5,000 but does not exceed $16,000.
       ``(B) Treatment of certain employees.--For purposes of 
     subparagraph (A), the term `employee'--
       ``(i) shall not include an employee within the meaning of 
     section 401(c)(1), and
       ``(ii) shall include a leased employee within the meaning 
     of section 414(n).
       ``(C) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(D) Inflation adjustment.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2000, the $16,000 amount 
     contained in subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     determined by substituting `calendar year 1999' for `calendar 
     year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any increase determined under clause 
     (i) is not a multiple of $100, such amount shall be rounded 
     to the nearest multiple of $100.
       ``(e) Certain rules made applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(f) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to qualified employee health insurance expenses 
     taken into account under subsection (a).''
       (b) Credit To Be Part of General Business Credit.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     current year business credit) is amended by striking ``plus'' 
     at the end of paragraph (11), by striking the period at the 
     end of paragraph (12) and inserting ``, plus'', and by adding 
     at the end the following:
       ``(13) the employee health insurance expenses credit 
     determined under section 45D.''
       (c) No Carrybacks.--Subsection (d) of section 39 of the 
     Internal Revenue Code of 1986 (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following:
       ``(9) No carryback of section 45D credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the employee health 
     insurance expenses credit determined under section 45D may be 
     carried back to a taxable year ending before the date of the 
     enactment of section 45D.''
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:

``Sec. 45D. Employee health insurance expenses.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after the date of the enactment of this Act.

                           Amendment No. 3853

  Mr. REID. Mr. President, I send an amendment to the desk for Senator 
Robb, Senator Graham, and Senator Kennedy, and ask for its immediate 
consideration.
  The PRESIDING OFFICER. Without objection, the previous amendment is 
set aside. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Robb, for 
     himself, Mr. Graham, and Mr. Kennedy, proposes an amendment 
     numbered 3853.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To make the bill effective upon enactment of a Medicare 
                       prescription drug benefit)

       At the end of the bill, insert the following:

     SEC. __. EFFECTIVE DATE.

       Notwithstanding any other provision of this Act or 
     amendment made by this Act, no such provision or amendment 
     shall take effect until legislation has been enacted that 
     provides a voluntary, affordable outpatient Medicare 
     prescription drug benefit to all Medicare beneficiaries that 
     guarantees meaningful, stable coverage, including stop-loss 
     and low-income protections.

  Mr. KENNEDY. Mr. President, the need for action by Congress on 
prescription drug coverage for senior citizens is as clear as it is 
urgent. Medicare is a specific contract between the people and their 
government. It says, ``Work hard, pay into the trust fund during your 
working years, and you will have health security in your retirement 
years.'' But that promise is being broken today and every day, because 
Medicare does not cover prescription drugs.
  This amendment is about priorities. The Republican marriage penalty 
relief

[[Page 14409]]

proposal is little more than a fig leaf for a package of other tax 
breaks for the wealthy. I am all for marriage penalty relief. I am all 
for providing targeted tax relief to working families. But that's not 
what's at stake here.
  This amendment simply says that marriage penalty relief shall not 
take effect until legislation has been enacted that provides a 
voluntary, affordable outpatient Medicare prescription drug benefit to 
all Medicare beneficiaries which that guarantees meaningful, stable 
coverage, including stop-loss and low-income protections.
  Too many elderly Americans today must choose between food on the 
table and the medicine they need to stay healthy or to treat their 
illnesses. Too many senior citizens take half the pills their doctor 
prescribes, or don't even fill needed prescriptions at all--because 
they can't afford the high cost of prescription drugs.
  Too many seniors are paying twice as much as they should for the 
drugs they need, because they are forced to pay full price, while 
almost everyone with a private insurance policy benefits from 
negotiated discounts. Too many seniors are ending up hospitalized--at 
immense cost to Medicare--because they aren't receiving the drugs they 
need to treat their illness. Pharmaceutical products are increasingly 
the source of miracle cures for a host of dread diseases, but senior 
citizens are being left out and left behind because Congress fails to 
act.
  The crisis that senior citizens face today will only worsen if we 
refuse to act, because insurance coverage continues to go down, and 
drug costs continue to go up.
  Twelve million senior citizens--one third of the total--have no 
prescription drug coverage at all. Surveys indicate that only half of 
all senior citizens--20 million--have any prescription drug coverage 
throughout the year. Insurance through employer retirement plans is 
plummeting. Medicare HMOs are drastically cutting back. Medigap plans 
are priced out of reach of most elderly Americans. The only senior 
citizens who have stable, reliable, affordable drug coverage are the 
very poor on Medicaid.
  Prescription drug costs are out of control. Since 1996, costs have 
grown at double-digit rates every year. Last year, the increase was an 
unacceptable 16 percent, at a time when the increase in the CPI was 
only 2.7 percent. Access to affordable prescription drugs has become a 
crisis for many elderly Americans
  In the face of this declining coverage and soaring cost, more and 
more senior citizens are being hurt. The vast majority of the elderly 
are of moderate means. They cannot possibly afford to purchase the 
prescription drugs they need if serious illness strikes. Fifty-seven 
percent of senior citizens have incomes below $15,000 a year, and 78 
percent have incomes below $25,000. Only 7 percent have annual incomes 
in excess of $50,000. The older they are, the more likely they are to 
be in poor health and the more likely they are to have very limited 
income to meet their health needs.
  Their current situation on prescription drugs is intolerable. Senior 
citizens and their families are asking for help and they deserve it. 
The Senate has an obligation to respond.
  Few if any issues facing this Congress are more important than giving 
the nation's senior citizens the health security they have been 
promised. The promise of Medicare will not be fulfilled until Medicare 
protects senior citizens against the high cost of prescription drugs, 
in the same way that it protects them against the high cost of hospital 
and doctor care.
  President Clinton called for prescription drug coverage under 
Medicare in his 1999 State of the Union Message more than 18 months ago 
but the Senate still has failed to act. The legislation passed by the 
Republican majority in the House can't pass the truth in advertising 
test.
  It is not a true Medicare benefit--and it won't give senior citizens 
the stable, affordable, adequate prescription drug benefit they 
deserve.
  The Senate Finance Committee is discussing a new prescription drug 
proposal but it requires senior citizens to give up their current 
benefits and accept greater out-of-pocket costs that they cannot afford 
as the price for gaining prescription drug coverage.
  The amendment we are proposing is a clear statement of priorities. It 
says that prescription drug coverage for the Nation's senior citizens 
is as important as new tax breaks.
  Let's get our priorities straight. Let's meet this pressing need. 
Let's give senior citizens a real prescription drug benefit under 
Medicare. Let's put the Senate on record in support of mending 
Medicare's broken promise, and telling America's senior citizens that 
they are as important as working families and others who would benefit 
from this tax bill.
  Mr. REID. I ask the amendment be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3854

 (Purpose: To ensure that children enrolled in the Medicaid program at 
      highest risk for lead poisoning are identified and treated)

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Torricelli.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Torricelli, for 
     himself and Mr. Reed, proposes an amendment numbered 3854.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. REID. Mr. President, I rise to introduce an amendment on behalf 
of Senators Reed of Rhode Island and Torricelli that would enhance 
Medicaid coverage for childhood lead poisoning screening.
  The Reed-Torricelli amendment is concerned about lead testing 
because, despite federal screening requirements for kids enrolled in 
Medicaid, many children are not getting tested.
  Lead poisoning attacks a child's nervous system and can cause 
seizures, brain damage, comas, and even death.
  The threat of lead poisoning is particularly great for those least 
able to confront it--our nation's poor children.
  This is why in 1992 Congress required states to test every Medicaid 
recipient under age two for lead.
  These children are 5 times more likely to have high blood levels.
  Disturbingly, however, this federal law is being ignored.
  A recent GAO study found that two-thirds of children on Medicaid have 
never been screened for lead.
  For whatever reason, insufficient outreach, lax government oversight 
or parental ignorance, too many kids are not getting screened.
  Therefore, the Reed-Torricelli amendment seeks to improve the lead 
screening rates for children enrolled in Medicaid.
  (1) Guarantee's that Medicaid contracts explicitly require health 
care providers to adhere to federal rules for screening and treatment.
  (2) Requires states to report to the federal government the number of 
children on Medicaid being tested.
  (3) Expands Medicaid coverage to include treatment for lead poisoning 
and for environmental investigations to determine its sources.
  Mr. REID. I ask unanimous consent the amendment be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3855

  Mr. REID. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] on behalf of Mr. 
     Torricelli, proposes an amendment numbered 3855.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

[[Page 14410]]



   (Purpose: To amend the Social Security Act to waive the 24-month 
   waiting period for medicare coverage of individuals disabled with 
                  amyotrophic lateral sclerosis (ALS)

       At the end of the bill, add the following:

     SEC. 7. WAIVER OF 24-MONTH WAITING PERIOD FOR MEDICARE 
                   COVERAGE OF INDIVIDUALS DISABLED WITH 
                   AMYOTROPHIC LATERAL SCLEROSIS (ALS).

       (a) In General.--Section 226 of the Social Security Act (42 
     U.S.C. 426) is amended--
       (1) by redesignating subsection (h) as subsection (j) and 
     by moving such subsection to the end of the section; and
       (2) by inserting after subsection (g) the following:
       ``(h) For purposes of applying this section in the case of 
     an individual medically determined to have amyotrophic 
     lateral sclerosis (ALS), the following special rules apply:
       ``(1) Subsection (b) shall be applied as if there were no 
     requirement for any entitlement to benefits, or status, for a 
     period longer than 1 month.
       ``(2) The entitlement under such subsection shall begin 
     with the first month (rather than twenty-fifth month) of 
     entitlement or status.
       ``(3) Subsection (f) shall not be applied.''.
       (b) Conforming Amendment.--Section 1837 of such Act (42 
     U.S.C. 1395p) is amended by adding at the end the following:
       ``(j) In applying this section in the case of an individual 
     who is entitled to benefits under part A pursuant to the 
     operation of section 226(h), the following special rules 
     apply:
       ``(1) The initial enrollment period under subsection (d) 
     shall begin on the first day of the first month in which the 
     individual satisfies the requirement of section 1836(1).
       ``(2) In applying subsection (g)(1), the initial enrollment 
     period shall begin on the first day of the first month of 
     entitlement to disability insurance benefits referred to in 
     such subsection.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to benefits for months beginning after the date 
     of the enactment of this Act.

  Mr. REID. Mr. President, I rise to introduce an amendment on behalf 
of Senator Torricelli that strives to improve the lives of patients 
with ALS, better known as the disease that struck down the famed Yankee 
Lou Gehrig.
  First diagnosed over 130 years ago, ALS is a fatal neurological 
disorder that usually strikes individuals over 50 years old. Each year, 
5,000 new cases are diagnosed; an estimated 300,000 Americans alive 
today will die of ALS. Life expectancy is only 3 to 5 years and the 
financial costs to families can be up to $200,000 a year.
  Yet despite the rapid onset of symptoms and the extremely short life-
expectancy, patients with ALS must endure a 24-month waiting period 
before receiving Medicare services.
  Senator Torricelli's amendment will eliminate the 24-month waiting 
period so that patients will no longer need to wait until the final 
months of their illness to receive the care they need upon diagnosis.
  This proposal is based on the legislation introduced by Senator 
Torricelli in 1998 and has achieved the bi-partisan support of 27 co-
sponsors.
  Mr. REID. I ask unanimous consent the amendment be set aside.


                           Amendment No. 3856

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Torricelli.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Torricelli, 
     proposes an amendment numbered 3856.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To amend the Internal Revenue Code of 1986 to lower the 
adjusted gross income threshold for deductible disaster casualty losses 
 to 5 percent, to make such deduction an above-the-line deduction, to 
     allow an election to take such deduction for the preceding or 
succeeding year, and to eliminate the marriage penalty for individuals 
                       suffering casualty losses)

       At the end, add the following:

     SEC. __. MODIFICATIONS TO DISASTER CASUALTY LOSS DEDUCTION.

       (a) Lower Adjusted Gross Income Threshold.--Paragraph (2) 
     of section 165(h) of the Internal Revenue Code of 1986 
     (relating to treatment of casualty gains and losses) is 
     amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--If the personal casualty losses for any 
     taxable year exceed the personal casualty gains for such 
     taxable year, such losses shall be allowed for the taxable 
     year only to the extent of the sum of--
       ``(i) the amount of the personal casualty gains for the 
     taxable year, plus
       ``(ii) so much of such excess attributable to losses 
     described in subsection (i) as exceeds 5 percent of the 
     adjusted gross income of the individual (determined without 
     regard to any deduction allowable under subsection (c)(3))'', 
     plus
       ``(iii) so much of such excess attributable to losses not 
     described in subsection (i) as exceeds 10 percent of the 
     adjusted gross income of the individual.

     For purposes of this subparagraph, personal casualty losses 
     attributable to losses not described in subsection (i) shall 
     be considered before such losses attributable to losses 
     described in subsection (i).'', and
       (2) by striking ``10 percent'' in the heading and inserting 
     ``percentage''.
       (b) Above-The-Line Deduction.--Section 62(a) of the 
     Internal Revenue Code of 1986 (defining adjusted gross 
     income) is amended by inserting after paragraph (17) the 
     following:
       ``(18) Certain disaster losses.--The deduction allowed by 
     section 165(c)(3) to the extent attributable to losses 
     described in section 165(i).''
       (c) Election To Take Disaster Loss Deduction for Preceding 
     or Succeeding 2 Years.--Paragraph (1) of section 165(i) of 
     the Internal Revenue Code of 1986 (relating to disaster 
     losses) is amended--
       (1) by inserting ``or succeeding'' after ``preceding'', and
       (2) by inserting ``or succeeding'' after ``preceding'' in 
     the heading.
       (d) Elimination of Marriage Penalty for Individuals 
     Suffering Casualty Losses.--Subparagraph (B) of section 
     165(h)(4) of the Internal Revenue Code of 1986 (relating to 
     special rules) is amended to read as follows:
       ``(B) Joint returns.--For purposes of this subsection--
       ``(i) In general.--Except as provided in clause (ii), a 
     husband and wife making a joint return for the taxable year 
     shall be treated as 1 individual.
       ``(ii) Election.--A husband and wife may elect to have each 
     be treated as a single individual for purposes of applying 
     this section. If an election is made under this clause, the 
     adjusted gross income of each individual shall be determined 
     on the basis of the items of income and deduction properly 
     allocable to the individual, as determined under rules 
     prescribed by the Secretary.''
       (e) Effective Date.--The amendments made by this section 
     shall apply to losses sustained in taxable years beginning 
     after December 31, 1998.

  Mr. REID. Mr. President, on behalf of Senator Torricelli, I would 
like to offer the following amendment which seeks to ease the tax 
burden on those Americans who have suffered or will suffer from natural 
disasters.
  This amendment agrees with the notion that rebuilding a community in 
the wake of a natural disaster is an enormous task. The Senator's 
amendment builds on this idea by stating that a heavy income tax burden 
should not be one of those obstacles to recovery.
  Current tax law stipulates that taxpayers can only deduct those 
losses that exceed 10 percent of their income. Furthermore, the 
requirements only allow those taxpayers who itemize their returns to 
deduct their losses.
  Given that only a quarter of all taxpayers itemize their returns, 
this means that these restrictive provisions disqualify many Americans 
who could benefit from this deduction. This legislation removes these 
barriers.
  First, this amendment would lower the income threshold for disaster 
loss deductions from 10 percent to 5 percent.
  Secondly, this provision would make these deductions ``above the 
line'' enabling the majority of non-itemizing tax payers to claim this 
deduction.
  This amendment would also eliminate the marriage penalty a couple 
incurs when they deduct their uninsured disaster losses as joint filers 
by allowing married couples to claim their disaster losses as single 
filers in order to fully deduct their uninsured disaster losses.
  Finally, it would allow taxpayers to defer their deduction for a 
period of up to two years or claim losses that have occurred two years 
previously.
  Senator Torricelli's amendment believes that those who rebuild their 
lives in the wake of a disaster should not have to overcome a heavy tax 
burden in order to recover. This provision will help ensure that this 
is not the case.
  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.

[[Page 14411]]

  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3857

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Torricelli.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Torricelli, 
     proposes an amendment numbered 3857.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To amend the Internal Revenue Code of 1986 to eliminate the 
      marriage penalty for individuals suffering casualty losses)

       At the end, add the following:

     SEC. __. ELIMINATION OF MARRIAGE PENALTY FOR INDIVIDUALS 
                   SUFFERING CASUALTY LOSSES.

       (a) In General.--Subparagraph (B) of section 165(h)(4) of 
     the Internal Revenue Code of 1986 (relating to special rules) 
     is amended to read as follows:
       ``(B) Joint returns.--For purposes of this subsection--
       ``(i) In general.--Except as provided in clause (ii), a 
     husband and wife making a joint return for the taxable year 
     shall be treated as 1 individual.
       ``(ii) Election.--A husband and wife may elect to have each 
     be treated as a single individual for purposes of applying 
     this section. If an election is made under this clause, the 
     adjusted gross income of each individual shall be determined 
     on the basis of the items of income and deduction properly 
     allocable to the individual, as determined under rules 
     prescribed by the Secretary.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to losses sustained in taxable years beginning 
     after December 31, 1998.

  Mr. REID. Mr. President, on behalf of Senator Torricelli, I would 
like to offer an amendment which seeks to correct the current marriage 
penalty on those couples who deduct their disaster losses.
  Whenever a married couple with joint filing status seek to deduct 
their losses incurred from a natural disaster, they find that their 
deduction is significantly less than it would be if they claimed their 
losses as single filers.
  This amendment seeks to rectify this inequity, by allowing joint 
filers to claim single filing status in order to deduct their disaster 
losses, so that they can enjoy the deduction that they are entitled to.
  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3858

(Purpose: To amend the Internal Revenue Code of 1986 to allow a credit 
to holders of qualified bonds issued by Amtrak, and for other purposes)

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Frank Lautenberg.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Lautenberg, 
     proposes an amendment numbered 3858.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3859

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Max Cleland.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Cleland, 
     proposes an amendment numbered 3859.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend the Internal Revenue Code of 1986 to exclude United 
 States savings bond income from gross income if used to pay long-term 
                             care expenses)

       At the end, add the following:

     SEC. __. EXCLUSION OF UNITED STATES SAVINGS BOND INCOME FROM 
                   GROSS INCOME IF USED TO PAY LONG-TERM CARE 
                   EXPENSES.

       (a) In General.--Subsection (a) of section 135 of the 
     Internal Revenue Code of 1986 (relating to income from United 
     States savings bonds used to pay higher education tuition and 
     fees) is amended to read as follows:
       ``(a) Exclusion.--
       ``(1) General rule.--In the case of an individual who pays 
     qualified expenses during the taxable year, no amount shall 
     be includible in gross income by reason of the redemption 
     during such year of any qualified United States savings bond.
       ``(2) Qualified expenses.--For purposes of this section, 
     the term `qualified expenses' means--
       ``(A) qualified higher education expenses, and
       ``(B) eligible long-term care expenses.''.
       (b) Limitation Where Redemption Proceeds Exceed Qualified 
     Expenses.--Section 135(b)(1) of the Internal Revenue Code of 
     1986 (relating to limitation where redemption proceeds exceed 
     higher education expenses) is amended--
       (1) by striking ``higher education'' in subparagraph 
     (A)(ii), and
       (2) by striking ``higher education'' in the heading 
     thereof.
       (c) Eligible Long-Term Care Expenses.--Section 135(c) of 
     the Internal Revenue Code of 1986 (relating to definitions) 
     is amended by redesignating paragraph (4) as paragraph (5) 
     and by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Eligible long-term care expenses.--The term `eligible 
     long-term care expenses' means qualified long-term care 
     expenses (as defined in section 7702B(c)) and eligible long-
     term care premiums (as defined in section 213(d)(10)) of--
       ``(A) the taxpayer,
       ``(B) the taxpayer's spouse, or
       ``(C) any dependent of the taxpayer with respect to whom 
     the taxpayer is allowed a deduction under section 151.''.
       (d) Adjustments.--Section 135(d) of the Internal Revenue 
     Code of 1986 (relating to special rules) is amended by 
     redesignating paragraphs (3) and (4) as paragraphs (4) and 
     (5), respectively, and by inserting after paragraph (2) the 
     following new paragraph:
       ``(3) Eligible long-term care expense adjustments.--The 
     amount of eligible long-term care expenses otherwise taken 
     into account under subsection (a) with respect to an 
     individual shall be reduced (before the application of 
     subsection (b)) by the sum of--
       ``(A) any amount paid for qualified long-term care services 
     (as defined in section 7702B(c)) provided to such individual 
     and described in section 213(d)(11), plus
       ``(B) any amount received by the taxpayer or the taxpayer's 
     spouse or dependents for the payment of eligible long-term 
     care expenses which is excludable from gross income.''.
       (e) Coordination With Deductions.--
       (1) Section 213 of the Internal Revenue Code of 1986 
     (relating to medical, dental, etc., expenses) is amended by 
     adding at the end the following new subsection:
       ``(f) Coordination With Savings Bond Income Used for 
     Expenses.--Any expense taken into account in determining the 
     exclusion under section 135 shall not be treated as an 
     expense paid for medical care.''.
       (2) Section 162(l) of such Code (relating to special rules 
     for health insurance costs of self-employed individuals) is 
     amended by adding at the end the following new paragraph:
       ``(6) Coordination with savings bond income used for 
     expenses.--Any expense taken into account in determining the 
     exclusion under section 135 shall not be treated as an 
     expense paid for medical care.''.
       (f) Clerical Amendments.--
       (1) The heading for section 135 of the Internal Revenue 
     Code of 1986 is amended by inserting ``and long-term care 
     expenses'' after ``fees''.
       (2) The item relating to section 135 in the table of 
     sections for part III of subchapter B of chapter 1 of such 
     Code is amended by inserting ``and long-term care expenses'' 
     after ``fees''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

  Mr. CLELAND. Mr. President, the Cleland Savings Bond Tax-Exemption 
for Long-Term Care Services Amendment would exclude United States 
savings bond income from being taxed if used to pay for long-term 
health care expenses. This bill will assist individuals struggling to 
accommodate costs

[[Page 14412]]

associated with many chronic medical conditions and the aging process. 
A staggering 5.8 million Americans are afflicted with the financial 
burdens of long-term care.
  My bill proposes a tax credit for individuals who are limited in 
daily activities or have a comparable cognitive impairment. Providing a 
tax credit for families paying for long-term health care will help 
alleviate the financial burdens for one of the fastest growing health 
care expenses. Federal and state spending for nursing home care and 
home care continues to skyrocket. Current estimates forecast that in 
the next 30 years, half of all women and a third of all men in the 
United States will spend a portion of their life in a nursing home at 
cost of $40,000 to $90,000 per year per person.
  My legislation will assist families by: providing a tax credit for 
savings bonds used to pay for long-term care, and allowing families to 
use their savings bond assets to face the dual challenge of paying for 
long-term care services and higher education expenses.
  I urge you to support proposal to provide tax relief to Americans 
burdened by the financial constraints on providing long-term care and 
higher education expenses.
  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3860

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Max Cleland.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Cleland, 
     proposes an amendment numbered 3860.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To amend the Internal Revenue Code of 1986 to expand the 
 enhanced deduction for corporate donations of computer technology to 
                public libraries and community centers)

       At the end, add the following:

     SEC. __. ENHANCED DEDUCTION FOR CORPORATE DONATIONS OF 
                   COMPUTER TECHNOLOGY TO PUBLIC LIBRARIES AND 
                   COMMUNITY CENTERS.

       (a) Expansion of Computer Technology Donations to Public 
     Libraries and Community Centers.--
       (1) In general.--Paragraph (6) of section 170(e) of the 
     Internal Revenue Code of 1986 (relating to special rule for 
     contributions of computer technology and equipment for 
     elementary or secondary school purposes) is amended by 
     striking ``qualified elementary or secondary educational 
     contribution'' each place it occurs in the headings and text 
     and inserting ``qualified computer contribution''.
       (2) Expansion of eligible donees.--Subclause (II) of 
     section 170(e)(6)(B)(i) of such Code (relating to qualified 
     elementary or secondary educational contribution) is amended 
     by striking ``or'' at the end of subclause (I) and by 
     inserting after subclause (II) the following new subclauses:

       ``(III) a public library (within the meaning of section 
     213(2)(A) of the Library Services and Technology Act (20 
     U.S.C. 9122(2)(A)), as in effect on the date of the enactment 
     of the Community Technology Assistance Act, established and 
     maintained by an entity described in subsection (c)(1), or
       ``(IV) a nonprofit or governmental community center, 
     including any center within which an after-school or 
     employment training program is operated,''.

       (b) Conforming Amendments.--
       (1) Section 170(e)(6)((B)(iv) of the Internal Revenue Code 
     of 1986 is amended by striking ``in any grades K-12''.
       (2) The heading of paragraph (6) of section 170(e) of such 
     Code is amended by striking ``elementary or secondary school 
     purposes'' and inserting ``educational purposes''.
       (c) Extension of Deduction.--Section 170(e)(6)(F) of the 
     Internal Revenue Code of 1986 (relating to termination) is 
     amended by striking ``December 31, 2000'' and inserting 
     ``December 31, 2005''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2000.

  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3861

  Mr. ROTH. Mr. President, I send an amendment to the desk on behalf of 
Senator Grams.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Grams, 
     proposes an amendment numbered 3861.

  Mr. ROTH. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To repeal the increase in tax on Social Security benefits)

       At the end of the bill, add the following:

                   TITLE VI--MISCELLANEOUS PROVISIONS

     SEC. 601. REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY 
                   BENEFITS.

       (a) Repeal of Increase in Tax on Social Security 
     Benefits.--
       (1) In general.--Paragraph (2) of section 86(a) (relating 
     to social security and tier 1 railroad retirement benefits) 
     is amended by adding at the end the following new flush 
     sentence:

     ``This paragraph shall not apply to any taxable year 
     beginning after December 31, 2000.''
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2000.
       (b) Revenue Offset.--The Secretary of the Treasury shall 
     transfer, for each fiscal year, from the general fund in the 
     Treasury to the Federal Hospital Insurance Trust Fund 
     established under section 1817 of the Social Security Act (42 
     U.S.C. 1395i) an amount equal to the decrease in revenues to 
     the Treasury for such fiscal year by reason of the amendment 
     made by this section.

  Mr. REID. Mr. President, I say to my friend from Delaware, we want to 
second degree this amendment. We cannot do that until all time is 
yielded back.
  Mr. ROTH. I yield back the time.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that we move on to 
other business and subsequently Senator Roth and I will make a decision 
as to whether or not a second-degree amendment will be offered on our 
behalf and whether or not he wants to second degree our amendment. We 
will decide that at a subsequent time so we can complete our work.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3862

  Mr. ROTH. Mr. President, on behalf of Senator Abraham, I send an 
amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Abraham, 
     proposes an amendment numbered 3862.

  Mr. ROTH. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To express the sense of the Senate regarding the need to 
 repeal the death tax and improve coverage of prescription drugs under 
                    the medicare program this year)

       At the end of the Act, add the following:

                        TITLE VI--MISCELLANEOUS

     SEC. 601. SENSE OF THE SENATE REGARDING COVERAGE OF 
                   PRESCRIPTION DRUGS UNDER THE MEDICARE PROGRAM.

       (a) Findings.--The Senate makes the following findings:
       (1) Projected on-budget surpluses for the next 10 years 
     total $1,900,000,000,000, according to the President's mid-
     session review.
       (2) Eliminating the death tax would reduce revenues by 
     $104,000,000,000 over 10 years, leaving on-budget surpluses 
     of $1,800,000,000,000.
       (3) The medicare program established under title XVIII of 
     the Social Security Act

[[Page 14413]]

     (42 U.S.C. 1395 et seq.) faces the dual problem of inadequate 
     coverage of prescription drugs and rapid escalation of 
     program costs with the retirement of the baby boom 
     generation.
       (4) The concurrent resolution on the budget for fiscal year 
     2001 provides $40,000,000,000 for prescription drug coverage 
     in the context of a reform plan that improves the long-term 
     outlook for the medicare program.
       (5) The Committee on Finance of the Senate currently is 
     working in a bipartisan manner on reporting legislation that 
     will reform the medicare program and provide a prescription 
     drug benefit.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) on-budget surpluses are sufficient to both repeal the 
     death tax and improve coverage of prescription drugs under 
     the medicare program and Congress should do both this year; 
     and
       (2) the Senate should pass adequately funded legislation 
     that can effectively--
       (A) expand access to outpatient prescription drugs;
       (B) modernize the medicare benefit package;
       (C) make structural improvements to improve the long term 
     solvency of the medicare program;
       (D) reduce medicare beneficiaries' out-of-pocket 
     prescription drug costs, placing the highest priority on 
     helping the elderly with the greatest need; and
       (E) give the elderly access to the same discounted rates on 
     prescription drugs as those available to Americans enrolled 
     in private insurance plans.

  Mr. ROTH. I yield back the Republican time.
  Mr. REID. I yield back the time for the minority.
  Mr. ROTH. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent to set aside the 
amendment that is now pending.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3863

  Mr. MOYNIHAN. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New York [Mr. Moynihan] proposes an 
     amendment numbered 3863.

  Mr. MOYNIHAN. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

              (Purpose: To provide a complete substitute)

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. COMBINED RETURN TO WHICH UNMARRIED RATES APPLY.

       (a) In General.--Subpart B of part II of subchapter A of 
     chapter 61 of the Internal Revenue Code of 1986 (relating to 
     income tax returns) is amended by inserting after section 
     6013 the following new section:

     ``SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.

       ``(a) General Rule.--A husband and wife may make a combined 
     return of income taxes under subtitle A under which--
       ``(1) a separate taxable income is determined for each 
     spouse by applying the rules provided in this section, and
       ``(2) the tax imposed by section 1 is the aggregate amount 
     resulting from applying the separate rates set forth in 
     section 1(c) to each such taxable income.
       ``(b) Treatment of Income.--For purposes of this section--
       ``(1) earned income (within the meaning of section 911(d)), 
     and any income received as a pension or annuity which arises 
     from an employer-employee relationship, shall be treated as 
     the income of the spouse who rendered the services,
       ``(2) income from property shall be divided between the 
     spouses in accordance with their respective ownership rights 
     in such property (equally in the case of property held 
     jointly by the spouses), and
       ``(3) any exclusion from income shall be allowable to the 
     spouse with respect to whom the income would be otherwise 
     includible.
       ``(c) Treatment of Deductions.--For purposes of this 
     section--
       ``(1) except as otherwise provided in this subsection, the 
     deductions described in section 62(a) shall be allowed to the 
     spouse treated as having the income to which such deductions 
     relate,
       ``(2) the deductions allowable by section 151(b) (relating 
     to personal exemptions for taxpayer and spouse) shall be 
     determined by allocating 1 personal exemption to each spouse,
       ``(3) section 63 shall be applied as if such spouses were 
     not married, except that the election whether or not to 
     itemize deductions shall be made jointly by both spouses and 
     apply to each, and
       ``(4) each spouse's share of all other deductions shall be 
     determined by multiplying the aggregate amount thereof by the 
     fraction--
       ``(A) the numerator of which is such spouse's gross income, 
     and
       ``(B) the denominator of which is the combined gross 
     incomes of the 2 spouses.
     Any fraction determined under paragraph (4) shall be rounded 
     to the nearest percentage point.
       ``(d) Treatment of Credits.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), 
     each spouse's share of credits allowed to both spouses shall 
     be determined by multiplying the aggregate amount of the 
     credits by the fraction determined under subsection (c)(4).
       ``(2) Earned income credit.--The earned income credit under 
     section 32 shall be determined as if each spouse were a 
     separate taxpayer, except that--
       ``(A) the earned income and the modified adjusted gross 
     income of each spouse shall be determined under the rules of 
     subsections (b), (c), and (e), and
       ``(B) qualifying children shall be allocated between 
     spouses proportionate to the earned income of each spouse 
     (rounded to the nearest whole number).
       ``(e) Special Rules Regarding Income Limitations.--
       ``(1) Exclusions and deductions.--For purposes of making a 
     determination under subsection (b) or (c), any eligibility 
     limitation with respect to each spouse shall be determined by 
     taking into account the limitation applicable to a single 
     individual.
       ``(2) Credits.--For purposes of making a determination 
     under subsection (d)(1), in no event shall an eligibility 
     limitation for any credit allowable to both spouses be less 
     than twice such limitation applicable to a single individual.
       ``(f) Special Rules for Alternative Minimum Tax.--If a 
     husband and wife elect the application of this section--
       ``(1) the tax imposed by section 55 shall be computed 
     separately for each spouse, and
       ``(2) for purposes of applying section 55--
       ``(A) the rules under this section for allocating items of 
     income, deduction, and credit shall apply, and
       ``(B) the exemption amount for each spouse shall be the 
     amount determined under section 55(d)(1)(B).
       ``(g) Treatment as Joint Return.--Except as otherwise 
     provided in this section or in the regulations prescribed 
     hereunder, for purposes of this title (other than sections 1 
     and 63(c)) a combined return under this section shall be 
     treated as a joint return.
       ``(h) Limitations.--
       ``(1) Phase-in of benefit.--
       ``(A) In general.--In the case of any taxable year 
     beginning before January 1, 2004, the tax imposed by section 
     1 or 55 shall in no event be less than the sum of--
       ``(i) the tax determined after the application of this 
     section, plus
       ``(ii) the applicable percentage of the excess of--

       ``(I) the tax determined without the application of this 
     section, over
       ``(II) the amount determined under clause (i).

       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

                                                         The applicable
``For taxable years beginning in:                        percentage is:
  2002..........................................................50 ....

  2003..........................................................10.....

       ``(2) Limitation of benefit based on combined adjusted 
     gross income.--With respect to spouses electing the treatment 
     of this section for any taxable year, the tax under section 1 
     or 55 shall be increased by an amount which bears the same 
     ratio to the excess of the tax determined without the 
     application of this section over the tax determined after the 
     application of this section as the ratio (but not over 100 
     percent) of the excess of the combined adjusted gross income 
     of the spouses over $100,000 bears to $50,000.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section.''.
       (b) Unmarried Rate Made Applicable.--So much of subsection 
     (c) of section 1 of the Internal Revenue Code of 1986 as 
     precedes the table is amended to read as follows:
       ``(c) Separate or Unmarried Return Rate.--There is hereby 
     imposed on the taxable income of every individual (other than 
     a married individual (as defined in section 7703) filing a 
     return which is not a combined return under section 6013A, a 
     surviving spouse as defined in section 2(a), or a head of 
     household as defined in section 2(b)) a tax determined in 
     accordance with the following table:''.
       (c) Penalty for Substantial Understatement of Income From 
     Property.--Section 6662 of the Internal Revenue Code of 1986 
     (relating to imposition of accuracy-related penalty) is 
     amended--

[[Page 14414]]

       (1) by adding at the end of subsection (b) the following:
       ``(6) Any substantial understatement of income from 
     property under section 6013A.'', and
       (2) by adding at the end the following new subsection:
       ``(i) Substantial Understatement of Income From Property 
     Under Section 6013A.--For purposes of this section, there is 
     a substantial understatement of income from property under 
     section 6013A if--
       ``(1) the spouses electing the treatment of such section 
     for any taxable year transfer property from 1 spouse to the 
     other spouse in such year,
       ``(2) such transfer results in reduced tax liability under 
     such section, and
       ``(3) the significant purpose of such transfer is the 
     avoidance or evasion of Federal income tax.''.
       (d) Protection of Social Security and Medicare Trust 
     Funds.--
       (1) In general.--Nothing in this section shall be construed 
     to alter or amend the Social Security Act (or any regulation 
     promulgated under that Act).
       (2) Transfers.--
       (A) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     section has on the income and balances of the trust funds 
     established under sections 201 and 1817 of the Social 
     Security Act (42 U.S.C. 401 and 1395i).
       (B) Transfer of funds.--If, under subparagraph (A), the 
     Secretary of the Treasury estimates that the enactment of 
     this section has a negative impact on the income and balances 
     of such trust funds, the Secretary shall transfer, not less 
     frequently than quarterly, from the general revenues of the 
     Federal Government an amount sufficient so as to ensure that 
     the income and balances of such trust funds are not reduced 
     as a result of the enactment of this section.
       (e) Clerical Amendment.--The table of sections for subpart 
     B of part II of subchapter A of chapter 61 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 6013 the following:

``Sec. 6013A. Combined return with separate rates.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       (g) Sunset Provision.--The amendments made by this Act 
     shall not apply to any taxable year beginning after December 
     31, 2004.

  Mr. MOYNIHAN. Mr. President, the proposal we make is somewhat without 
precedent as a tax measure. It can be described, sir, in one sentence: 
It says, with regard to the marriage penalty, married couples are free 
to file jointly or individually. They choose. The present regime, with 
persons having the sense of being treated unfairly, I hope disappears 
in this regard. The one thing about the Tax Code--whatever its size--it 
must not be seen to be unfair. There are people--and they are many--who 
think this present arrangement is unfair. We say: You choose; it is 
your choice.
  Mr. President, for the second time in three months, the Senate is 
considering a marriage penalty relief bill that only partly addresses 
the marriage penalty. While Democrats strongly support marriage penalty 
relief, we cannot support the bill before us today because it fails to 
eliminate the marriage penalty. I will soon explain the specific 
objections to the GOP bill and the benefits and simplicity of the 
Democratic substitute amendment. First, I would like to frame the 
debate by explaining what a marriage penalty tax is and the history of 
the tax.
  The ``marriage penalty'' is the additional tax paid by a husband and 
wife over and above what the couple would have paid in the aggregate if 
they were not married. Marriage penalties are more likely to occur 
where both spouses have roughly similar income, i.e., a division 
between 50/50 and 70/30. On the other hand, a marriage bonus can occur 
where one spouse receives substantially more income than the other, 
i.e., a disparity in earnings of 70/30 or greater, where the spouses 
together pay less tax in the aggregate than they would if not married.
  For years, we have struggled to achieve the right balance in the 
taxation of single and married taxpayers. In 1948, to maintain parity 
between married couples in community property and separate property 
states, Congress created the joint tax return with rate brackets double 
the width of the rate brackets for single filers. Thus, a married 
worker with a non-earning spouse had a much lower tax liability than an 
equal-income single person. Not surprisingly, single taxpayers viewed 
this change as creating a singles penalty rather than a bonus for 
married couples, an effect magnified by the high marginal tax rates 
paid by upper-income taxpayers. By 1969, a single taxpayer with the 
same income as a married couple could expect to pay as much as 40 
percent more in income tax. To address this inequity, a special rate 
structure was introduced for single taxpayers in the Tax Reform Act of 
1969. The 1969 Act limited the tax liability of single taxpayers to no 
more than 20 percent above that of married couples with the same 
taxable income.
  Now married couples have come to view the current structure as 
penalizing them, and we are therefore on the verge of changing the tax 
code once again in the never ending attempt to find balance.
  Why do we repeatedly revisit this issue? Because of the inherent 
conflict in three fundamental tax policies: (a) the use of progressive 
tax rates, under which persons with higher incomes pay higher marginal 
tax rates, (b) neutrality among married taxpayers, where all married 
couples with the same income face identical tax burdens, and (c) 
neutrality between marriage and remaining single, where the tax burden 
does not change due to marital status. Only two of the three 
conditions, in any combination, can be satisfied.
  Which leads me to my objections to the bill before us today. First, 
many Democratic members believe the best thing we can do with on-budget 
surpluses is to pay down the federal debt. I think all Democratic 
members agree that if we are going to have tax cuts, however, we should 
consider them in a comprehensive fashion that allows us to balance 
priorities. Instead, this Congress is considering tax cuts in piecemeal 
fashion. Although the magnitude of any one individual proposal may not 
threaten our expected 10-year budget surplus, Congress has already 
passed--in one chamber or the other--$551 billion in tax cuts, 
including the marriage tax proposal now on the floor when considered on 
a normal 10 year basis. The 10-year price tag on these cuts, however, 
is not exhaustive. The cuts come with an additional cost. For every 
dollar that goes toward cutting taxes rather than paying down debt, 
there is a corresponding interest cost. For example, the interest cost 
associated with the $551 billion in tax cuts already passed is $127 
billion. The country wants a responsible Congress that allocates the 
surplus to provide sufficient funds for reducing the national debt, 
bolstering Medicare and Social Security, and investing in other 
priority programs such as a prescription drug benefit.
  Second, while several of the marriage penalty bill's provisions have 
merit as tax policy matters, the bill is not targeted at eliminating 
the marriage penalty. Instead, the standard deduction and bracket 
expansion proposals would increase the marriage bonus for millions of 
couples. The Department of Treasury estimates that only about 40 
percent of the tax reduction would go to couples currently experiencing 
a marriage penalty.
  I point out that a marriage bonus is equivalent to a singles penalty. 
The GOP bill increases the singles penalty because it increases the 
marriage bonus for people already receiving a bonus. Marriage bonuses 
cause undue and unfair burdens on singles, including widows and 
widowers
  Third, the GOP bill does not comprehensively address the marriage 
penalty. Of the 65 known provisions in the Internal Revenue Code that 
have a marriage penalty effect, the Committee-passed bill eliminates 
only one and partially addresses only two more. If the committee bill 
is enacted, we will have made little progress in eliminating 
discrimination in the tax code based on marital status.
  Finally, because the GOP bill does not completely exempt its marriage 
penalty relief benefits from the alternative minimum tax calculation, 
some 5 million taxpayers would immediately lose those benefits as a 
consequence of becoming newly subject to the AMT.
  In March of this year, Democratic members of the Finance Committee 
proposed an alternative marriage penalty relief bill which was more 
comprehensive, more targeted, and more

[[Page 14415]]

generous to those actually experiencing a marriage penalty than the 
majority proposal. However, Committee Republicans rejected it, opting 
for a flawed proposal identical to the one they have passed. In the 
June 28, 2000 markup of the Budget Reconciliation Bill, Finance 
Committee Democrats offered another proposal that varies slightly from 
the March proposal. The new version caps the benefit with a phase out 
that begins at adjusted gross income of $100,000 and phases out 
completely at AGI of $150,000.
  The Democrats' marriage penalty relief proposal is a comprehensive, 
targeted, and fiscally responsible approach. Democrats believe, first 
of all, that if we are going to address the marriage penalty, we must 
do it comprehensively. The Democratic alternative would give married 
couples the option of filing as single individuals or as a couple. When 
fully phased in by 2004, this approach would eliminate for eligible 
couples all 65 marriage penalty provisions in the tax code by allowing 
them to choose whichever filing status is more beneficial. Separate 
filing would address all aspects of the marriage penalty, including 
penalties associated with such divergent matters as the taxation of 
social security benefits, education tax incentives, and retirement 
savings. Moreover, this proposal would eliminate the penalty inherent 
in the earned income tax credit--the most severe marriage penalty in 
the tax code--which creates a substantial disincentive to marry for 
EITC beneficiaries. Finally, the benefits of this approach would also 
be available under the AMT.
  Perhaps the most striking difference between this approach and the 
Republican plan is the targeting of benefits. The Democratic 
alternative would dedicate 100 percent of its benefits to fixing the 
marriage penalty problem and would not spend resources on expanding 
marriage bonuses.
  Permitting married couples to file as if they were two single 
individuals is not a new concept. Nine states and the District of 
Columbia allow married couples to pay taxes on their separate incomes 
as if they were single. And in 1994, 19 of the 27 OECD countries 
provided one rate schedule whether taxpayers were married or single. 
Countries such as Canada, Australia and the United Kingdom treat each 
individual as a taxpaying unit. Thus, in those countries marriage has 
little effect on the couple's tax liability.
  Optional separate filing is the correct approach. We urge the Senate 
to adopt the Democratic alternative.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, before the Senator leaves the floor, I want 
to be able to say some things publicly that I have said to him 
privately. My stay here in the Senate has been a great experience, but 
that experience has been heightened every day because of Senator 
Moynihan. I loved when I was going to school, but being around Senator 
Moynihan is even better because it is like going to school--and you 
don't have to take the tests.
  I say to the Senator from New York, the State of New York and our 
country is so well-served by the wisdom and integrity and the 
brilliance that he has. I know he is going to be here for another 6 
months, but the Senate will never be the same without Daniel Patrick 
Moynihan. I and the country and the State of New York will miss him 
terribly.
  Mr. MOYNIHAN. I thank my friend. What a great way to go off for the 
weekend.
  I thank my revered chairman.
  Mr. ROTH. Mr. President, I would just like to echo the kind remarks 
made about Senator Moynihan. There is no man who better serves his 
State. There is no Senator who provides greater insight and brilliance. 
I am honored to be associated with him.
  Mr. MOYNIHAN. I do thank you, sir.
  I thank the Chair. I think it is best to make my departure quickly.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. This alternative amendment would allow married couples the 
option to file as two singles on their joint return. It is the same 
amendment that Senator Moynihan offered in the Finance Committee a few 
weeks ago. It is a concept I have endorsed in the past, primarily 
because it has the capability to deliver complete marriage penalty 
relief to all taxpayers, both at the low end and at the high end. It 
was a principled approach to ending the marriage penalty in our Tax 
Code.
  But the amendment the Senator offers today cuts away from that 
principled approach. Today's amendment imposes arbitrary income limits 
on the marriage penalty relief and begins to phase out the benefits at 
$100,000 of income, and then completely shuts them off at $150,000 per 
couple.
  According to the Congressional Budget Office, in 1999, there were 
about 7.5 million joint returns with an adjusted gross income greater 
than $100,000. And 56 percent of that group, or 4.2 million couples, 
suffered from a marriage penalty. The total amount of marriage penalty 
suffered by those couples is almost $12 billion, which is more than 
one-third of all the marriage penalties caused by our Tax Code.
  The average marriage penalty faced by each one of these families is 
about $2,800. Yet despite these significant marriage penalties 
encountered by these couples--and they claim that this is a targeted 
tax bill to eliminate the marriage tax--this substitute amendment turns 
its back on those taxpayers. The amendment tells these folks they make 
too much money and should not receive complete relief.
  A few weeks ago, during the Finance Committee markup on the marriage 
penalty, and the subsequent procedural debate on the Senate floor, the 
Democratic alternative was a separate filing regime with no income 
limits. Now the substitute amendment has arbitrary income limits.
  What has happened in the last 3 months? The surplus estimates have 
outgrown even the rosiest expectations. We continue to see the 
accumulation of tremendous on-budget surpluses. We have continued to 
see more and more evidence of America's tax overpayment. Especially in 
this environment, I cannot see any rationale for creating some 
arbitrary income level. Yet that is precisely what this amendment does. 
It seems to me that we are going in the wrong direction. This is just 
not right.
  Over the past few years, all of us--both Democrats and Republicans--
have talked at length about the fundamental unfairness of the marriage 
penalty in the Tax Code. But if we really believe it is a policy that 
needs to be changed--I believe that it does--then we should change it 
for all Americans. I do not see how we can justify solving the marriage 
tax penalty for some but letting it remain for others at an arbitrary 
income level. This does not have to be--and should not be--an issue of 
the rich versus the poor.
  While I do not agree with this amendment, I do want to commend my 
colleague for recognizing American families deserve substantial tax 
relief. Over 5 years, this alternative costs the same as the marriage 
tax relief reconciliation bill of 2000--a total of $55 billion. It is 
nice to see many Members have recognized that we should return the 
income tax overpayment to families across the country. This amendment 
takes what could be a good framework and destroys it with income 
limits.
  I urge my colleagues to oppose the substitute amendment.
  Mr. BAUCUS. Mr. President, I rise to support the Moynihan amendment, 
which provides an alternative form of marriage penalty relief.
  I do so for two main reasons.
  First, unlike the bill, the Democratic alternative completely 
eliminates the marriage penalty, by giving taxpayers the choice whether 
to file their taxes individually or jointly.
  Second, unlike the bill, the Democratic alternative only addresses 
the marriage penalty, rather than providing a more general tax cut that 
benefits some people but not others. In that sense, it's a replay of 
yesterday's debate, about estate taxes. By concentrating on the real 
problem, the Democratic alternative leaves resources available for 
other pressing national needs.
  Before going into these arguments in more detail, I'd provide a 
little background.

[[Page 14416]]

  From some of the debate that we've heard over the past months, you'd 
think that the proponents of committee bill are only ones in favor of 
marriage.
  But as is usually the case, it's not that simple. In fact, the 
taxation of married couples presents some complex issues, requiring 
careful thought.
  After all, the so-called ``marriage penalty'' is not some devilish 
concoction designed to discourage marriage and reward sinners.
  It is, instead, a reflection of some difficult choices that have been 
made. We have to decide how to tax married couples compared to 
individuals, and we have to decide whether couples that earn the same 
amount of income, but in different proportions between the husband and 
wife, should be taxed differently.
  These are not easy issues. They don't have pat, obvious answers. And, 
when you try to solve one problem, you often create another.
  Congress has wrestled with these questions before. Up until 1948, 
married people filed taxes individually. That created problems. Among 
other things, the Supreme Court held that the IRS must give effect to 
state community property laws. As a result, couples were taxes 
differently depending on how different state community property laws 
allocated income between spouses. If a couple lived in a common law 
state, they may have had to pay higher taxes than a couple with the 
same income between spouses. If a couple lived in a common law state, 
they may have had to pay higher taxes than a couple with the same 
income who lived in a community property state.
  In 1948, Congress addressed this by allowing all married couples to 
file joint returns. Congress set the personal exemption, standard 
deduction, and ``rate breaks'' for couples at twice those for 
individuals. For some couples, that created the so-called ``marriage 
bonus''. For example, if one spouse earned 100 percent of the income, 
the couple would probably pay lower taxes after marriage, because the 
income would be split evenly between the two spouses, and they would 
benefit from lower tax rates.
  In 1969, Congress decided that this system treated individuals 
unfairly.
  The Senate Finance Committee report said that ``the tax rates imposed 
on single persons are too heavy relative to those imposed on married 
couples at the same income level . . . While some difference between 
the rate of tax paid by single persons and joint returns is appropriate 
to reflect the additional living expenses of married taxpayers, the 
existing differential of as much as 41 percent which results from 
income splitting cannot be justified.''
  So in 1969, Congress adjusted the rate schedules, setting the rate 
breaks for individuals at about 60 percent of those for couples, rather 
than 50 percent. That addressed the perceived unfairness to 
individuals.
  But it resulted in some couples paying higher taxes after they 
marry--the marriage penalty.
  We've pretty much stuck with that system ever since, through 
Democratic and Republican Administrations, when Democrats were in the 
Senate majority and when Republicans were in the Senate majority.
  In recent years, however, some things have changes, that have made 
the taxation of married couples a bigger issue.
  First of all, as we've added more credits, deductions, and exclusions 
to the Tax Code, each has included it's own ``marriage penalty,'' 
because there's a separate rate schedule for individuals and married 
couples.
  For example, the 1997 tax bill, sponsored primarily by Republicans, 
made two noteworthy additions to the marriage penalty. The first is the 
child tax credit. The phase out for this credit begins a $110,000 of 
adjusted gross income for joint return filers, but at $75,000 for 
unmarried parents, creating both a marriage bonus for sole earner 
couples and a marriage penalty for dual earner couples.
  The second is the phaseouts of the deduction for interest on student 
loans. The phaseout for this deduction begins at $40,000 for unmarried 
individuals and at $60,000 for joint return filers. Like the child 
credit phaseout, it creates a marriage bonus for one earner couples and 
a marriage penalty for two earner couples.
  So the issue has become compounded by all of our tinkering with the 
Code.
  In addition, there's been a demographic shift. More couples today are 
two earner couples than there were three decades ago. So more couples 
today face a marriage penalty than a bonus.
  Pulling this together, the marriage penalty is not intentional. It's 
not designed to penalize marriage. It's a natural consequence of some 
rational decisions.
  But it's still a problem, both in fact and in the eyes of the 
American people.
  And it's a problem that we should do something about. But we should 
all understand that there is no ``magic bullet'' that will solve the 
problem without potentially creating others. We must make some tough 
choices.
  That brings me to the committee bill.
  It has some good features, including the provisions regarding the 
standard deduction and the earned income tax credit.
  But is also has several flaws.
  Most important of these, the bill isn't a ``marriage penalty'' 
proposal at all.
  Let's have a little truth in advertising. Let's tell people what's 
really going on. This isn't a marriage penalty bill. It's a tax cut, 
disguised as a marriage penalty bill.
  More than half of the tax cut goes to couples who don't face a 
marriage penalty, or to individuals who pay the alternative minimum 
tax.
  It's really more like a broad-based tax cut, at least for married 
couples and some individuals.
  That kind of a tax cut may or may not be a good idea, compared to 
other priorities. But let's be clear. The Chairman's bill is not simply 
a bill to reduce the marriage penalty.
  Viewed not as a marriage penalty bill, but as a tax cut, it's 
arbitrary--there's no particular rhyme or reason to it. If you're 
married and pay a marriage penalty, you get a tax cut. If you're 
married and don't pay a marriage penalty, you also get a tax cut. And 
if you're married and get a tax bonus, you still get a tax cut.
  If you're single, you get no tax cut. In fact, the disparity between 
married and single taxpayers widens, to where is was before 1969.
  Think about it. If you're married, with no kids, and you're already 
receiving the so-called marriage bonus, you get a tax cut.
  If, on the other hand, you're a single mom with three kids, 
struggling to make ends meet, you get no tax cut. Zero
  The Democratic alternative, on the other hand, is more fair and more 
logical. You only get a tax cut if you have a marriage penalty. And if 
you have a marriage penalty, the Democratic alternative completely 
eliminates it. Not partial relief. Complete elimination.
  You won't have to worry about the marriage penalty in the student 
loan deduction, or in Social Security benefits, or in any of the 65 
separate marriage penalties that have crept into the Tax Code over the 
years. The Democratic alternative eliminates all of them at one time.
  And it does so in a way most taxpayers can understand--if they save 
more in taxes by filing as individuals, that is what they're allowed to 
do. It's their choice how they file their returns. Taxpayers in a 
number of states, including my own home state of Montana, already have 
this option and it saves them millions of dollars in taxes.
  Mr. President, let's eliminate the marriage penalty, not just provide 
some relief from it.
  And let's do it by empowering taxpayers to make the choice about how 
they file their taxes.
  I urge my colleagues to support the Democratic alternative.


                           Amendment No. 3864

  Mr. ROTH. Mr. President, I move to strike the sunset provisions in 
the underlying bill on page 8, lines 6 through 14. I send the amendment 
to the desk.
  The PRESIDING OFFICER. The clerk will report.

[[Page 14417]]

  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth] proposes an amendment 
     numbered 3864.

  Mr. ROTH. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

                 (Purpose: To strike sunset provision)

       On page 8, strike lines 6 through 14.


                Amendment No. 3865 To Amendment No. 3863

  Mr. ROTH. Mr. President, I also move to strike the sunset provisions 
in the substitute offered by Senator Moynihan, on page 9, lines 23 
through 25, and send the amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth] proposes an amendment 
     numbered 3865 to amendment No. 3863.

  Mr. ROTH. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
amendment is as follows:

                 (Purpose: To strike sunset provision)

       On page 9, strike lines 23 through 25.

  Mr. ROTH. Mr. President, I further note that both my amendments would 
be deemed extraneous under section 313, the so-called Byrd rule of the 
Budget Act, because they increase the deficit beyond the years for 
which the Finance Committee has received reconciliation and 
instruction. Therefore, I move to waive the point of order against both 
my amendments pursuant to section 313(b)(1)(E) of the Congressional 
Budget Act of 1974, the House companion bill, and any conference report 
thereon.
  Mr. REID. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. ROTH. Mr. President, I ask unanimous consent with respect to the 
Grams amendment No. 3861, that it be in order for Senator Reid to offer 
a second-degree amendment and, immediately following the offering of 
that amendment, it be set aside in order for Senator Roth to offer a 
second-degree amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 3866 to Amendment No. 3861

  Mr. REID. Mr. President, under the unanimous consent agreement, I 
send an amendment to the desk in relation to amendment No. 3861.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 3866 to the Grams amendment No. 3861.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
  At the end of the amendment add the following:


                                findings

       The Grams Social Security amendment includes a general fund 
     transfer to the Medicare HI Trust Fund of $113 billion over 
     the next 10 years.
       Without a general fund transfer to the HI trust fund, the 
     Grams amendment would cause Medicare to become insolvent 5 
     years earlier than is expected today.
       It is appropriate to protect the Medicare program and 
     ensure its quality and viability by transferring monies from 
     the general fund to the Medicare HI Trust Fund.
       The adoption of the Grams Social Security amendment has put 
     a majority of the Senate on record in favor of a general fund 
     transfer to the HI trust fund.
       Today, the Medicare HI Trust Fund is expected to become 
     insolvent in 2025.
       The $113 billion the Grams amendment transfers to the HI 
     trust fund to maintain Medicare's solvency is the same amount 
     that the President has proposed to extend its solvency to 
     2030.


                          sense of the senate

       It is the sense of the Senate that the general fund 
     transfer mechanism included in the Grams Social Security 
     amendment should be used to extend the life of the Medicare 
     Trust Fund through 2030, to ensure that Medicare remains a 
     strong health insurance program for our nation's seniors and 
     that its payments to health providers remain adequate.

  Mr. REID. I yield back any time we have for debate on that amendment.
  Mr. ROTH. I yield back any time we may have on that amendment.


                Amendment No. 3867 to Amendment No. 3861

  Mr. ROTH. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth] proposes an amendment 
     numbered 3867 to the Grams amendment No. 3861.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To repeal the increase in tax on Social Security benefits)

       Strike all after the first word and add the following:

                   TITLE VI--MISCELLANEOUS PROVISIONS

     SEC. 601. REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY 
                   BENEFITS.

       (a) Repeal of Increase in Tax on Social Security 
     Benefits.--
       (1) In general.--Paragraph (2) of section 86(a) (relating 
     to social security and tier 1 railroad retirement benefits) 
     is amended by adding at the end the following new flush 
     sentence:

     ``This paragraph shall not apply to any taxable year 
     beginning after December 31, 2000.''
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2000.
       (b) Revenue Offset.--The Secretary of the Treasury shall 
     transfer, for each fiscal year, from the general fund in the 
     Treasury to the Federal Hospital Insurance Trust Fund 
     established under section 1817 of the Social Security Act (42 
     U.S.C. 1395i) an amount equal to the decrease in revenues to 
     the Treasury for such fiscal year by reason of the amendment 
     made by this section.
       This section shall become effective 1 day after enactment 
     of this Act.

  Mr. ROTH. Mr. President, I yield back any time I have on the 
amendment.
  Mr. REID. As does the minority, Mr. President.


                           Amendment No. 3868

  Mr. ROTH. Mr. President, on behalf of Senator Stevens, I send an 
amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, for 
     himself, proposes an amendment numbered 3868.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To amend the Internal Revenue Code of 1986 to maintain 
exemption of Alaska from dyeing requirements for exempt diesel fuel and 
                               kerosene)

       At the appropriate place insert the following new section:

     ``SEC.   . ALASKA EXEMPTION FROM DYEING REQUIREMENTS.

       (a) Exception to Dyeing Requirements for Exempt Diesel Fuel 
     and Kerosene.--Paragraph (1) of section 4082(c) (relating to 
     exception to dyeing requirements) is amended to read as 
     follows:
       ``(1) removed, entered, or sold in the State of Alaska for 
     ultimate sale or use in such State, and''.
       (b) Effective Date.--The amendment made by this section 
     applies with respect to fuel removed, entered, or sold on or 
     after the date of the enactment of this Act.

  Mr. ROTH. Mr. President, I yield back any time I have on the 
amendment.
  Mr. REID. As does the minority.


                           Amendment No. 3869

  Mr. ROTH. Mr. President, on behalf of Senator Stevens, I send an 
amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, 
     proposes an amendment numbered 3869.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

      (Purpose: To amend section 415 of the Internal Revenue Code)

       At the appropriate place insert the following new section:

[[Page 14418]]



     ``SEC.   . TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 
                   415.

       ``(a) Compensation Limit.--Paragraph (11) of section 415(b) 
     (relating to limitation for defined benefit plans) is amended 
     to read as follows:
       `` `(11) Special limitation rule for governmental and 
     multiemployer plans.--In the case of a governmental plan (as 
     defined in section 414(d)) or a multiemployer plan (as 
     defined in section 414(f)), subparagraph (B) of paragraph (1) 
     shall not apply.'
       ``(b) Combining and Aggregation of Plans.--
       ``(1) Combining of plans.--Subsection (f) of section 415 
     (relating to combining of plans) is amended by adding at the 
     end the following:
       `` `(3) Exception for multiemployer plans.--Notwithstanding 
     paragraph (1) and subsection (g), a multiemployer plan (as 
     defined in section 414(f)) shall not be combined or 
     aggregated with any other plan maintained by an employer for 
     purposes of applying the limitations established in this 
     section. The preceding sentence shall not apply for purposes 
     of applying subsection (b)(1)(A) to a plan which is not a 
     multiemployer plan.'
       ``(2) Conforming amendment for aggregation of plans.--
     Subsection (g) of section 415 (relating to aggregation of 
     plans) is amended by striking `The Secretary' and inserting 
     `Except as provided in subsection (f)(3), the Secretary'.
       ``(c) Application of Special Early Retirement Rules.--
     Section 415(b)(2)(F) (relating to plans maintained by 
     governments and tax-exempt organizations) is amended--
       ``(1) by inserting `a multiemployer plan (within the 
     meaning of section 414(f)),' after `section 414(d)),', and
       ``(2) by striking the heading and inserting:
       `` `(F) Special early retirement rules for certain plans.--
     '
       ``(d) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.''.

  Mr. ROTH. Mr. President, I yield back the remaining time on the 
amendment.
  Mr. REID. As does the minority.


                           Amendment No. 3870

  Mr. ROTH. Mr. President, on behalf of Senator Stevens, I send an 
amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, 
     proposes an amendment numbered 3870.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To amend the Internal Revenue Code of 1986 to provide a 
charitable deduction for certain expenses incurred in support of Native 
                      Alaskan subsistence whaling)

       At the appropriate place insert the following new section:

     SEC.   . CHARITABLE CONTRIBUTION DEDUCTION FOR CERTAIN 
                   EXPENSES INCURRED IN SUPPORT OF NATIVE ALASKAN 
                   SUBSISTENCE WHALING.

       (a) In General.--Section 170 (relating to charitable, etc., 
     contributions and gifts) is amended by redesignating 
     subsection (m) as subsection (n) and by inserting after 
     subsection (l) the following new subsection:
       ``(m) Expenses Paid by Certain Whaling Captains in Support 
     of Native Alaskan Subsistence Whaling.--
       ``(1) In general.--In the case of an individual who is 
     recognized by the Alaska Eskimo Whaling Commission as a 
     whaling captain charged with the responsibility of 
     maintaining and carrying out sanctioned whaling activities 
     and who engages in such activities during the taxable year, 
     the amount described in paragraph (2) (to the extent such 
     amount does not exceed $7,500 for the taxable year) shall be 
     treated for purposes of this section as a charitable 
     contribution.
       ``(2) Amount described.--
       ``(A) In general.--The amount described in this paragraph 
     is the aggregate of the reasonable and necessary whaling 
     expenses paid by the taxpayer during the taxable year in 
     carrying out sanctioned whaling activities.
       ``(B) Whaling expenses.--For purposes of subparagraph (A), 
     the term `whaling expenses' includes expenses for--
       ``(i) the acquisition and maintenance of whaling boats, 
     weapons, and gear used in sanctioned whaling activities,
       ``(ii) the supplying of food for the crew and other 
     provisions for carrying out such activities, and
       ``(iii) storage and distribution of the catch from such 
     activities.
       ``(3) Sanctioned whaling activities.--For purposes of this 
     subsection, the term `sanctioned whaling activities' means 
     subsistence bowhead whale hunting activities conducted 
     pursuant to the management plan of the Alaska Eskimo Whaling 
     Commission''.
       (b) Effective Date.--the amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2000.

  Mr. ROTH. Mr. President, I yield back the remaining time on the 
amendment.
  Mr. REID. The minority yields back.


                           Amendment No. 3871

  Mr. ROTH. Mr. President, on behalf of Senator Stevens, I send an 
amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, 
     proposes an amendment numbered 3871.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To amend the Internal Revenue Code to provide for equitable 
 treatment of trusts created to preserve the benefits of Alaska Native 
                            Settlement Act)

       At the appropriate place insert the following new section:

     SEC.   . TAX TREATMENT OF ALASKA NATIVE SETTLEMENT TRUSTS.

       (a) Modification of Tax Rate.--Section 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(i) In lieu of the tax imposed by subsection (c), there 
     is hereby imposed on any electing Settlement Trust (as 
     defined in section 646(e)(2)) a tax at the rate of 15% on its 
     taxable income (as defined in section 646(d)), except that if 
     such trust has a net capital gain for any taxable year, a tax 
     shall be imposed on such net capital gain at the rate of tax 
     that would apply to such net capital gain if the taxpayer 
     were an individual subject to a tax on ordinary income at a 
     rate of 15%.''
       (b) Special Rules Relating to Taxation of Alaska Native 
     Settlement Trusts.--Subpart A of Part I of subchapter J of 
     Chapter 1 (relating to general rules for taxation of trusts 
     and estates) is amended by adding at the end the following 
     new section.

     ``SEC.  646. TAX TREATMENT OF ALASKA NATIVE SETTLEMENT 
                   TRUSTS.

       ``(a) In General.--Except as otherwise provided in this 
     section, the provisions of this subchapter and section 1(c) 
     shall apply to all settlement trusts organized under the 
     Alaska Native Claims Settlement Act (``Claims Act'')).
       ``(b) One-Time Election.--
       ``(1) Effect. In the case of an electing Settlement Trust, 
     then except as set forth in this section--
       ``(A) section 1(i), and not section 1(e), shall apply to 
     such trust;
       ``(B) no amount shall be includible in the gross income of 
     any person by reason of a contribution to such trust; and
       ``(C) the beneficiaries of such trust shall be subject to 
     tax on the distributions by such trust only as set forth in 
     paragraph (2).
       ``(2) Tax treatment of distributions to beneficiaries by 
     electing settlement trusts.--
       ``(A) distributions by an electing Settlement Trust shall 
     be taxed as follows:
       ``(i) Any distributions by such trust, up to the amount for 
     such taxable year of such trust's taxable income plus any 
     amount of income excluded from the income of the trust by 
     section 103, shall be excluded from the gross income of the 
     recipient beneficiaries;
       ``(ii) Next, any distributions by such trust during the 
     taxable year that are not excluded from the recipient 
     beneficiaries' income pursuant to clause (i) shall 
     nonetheless be excluded from the gross income of the 
     recipient beneficiaries. The maximum exclusion under this 
     clause shall be equal to the amount during all years in which 
     an election under this subsection has been in effect of such 
     trust's taxable income plus any amount of income excluded 
     from the income of the trust by section 103, reduced by any 
     amounts which have previously been excluded from the 
     recipient beneficiaries' income under this clause or clause 
     (i);
       (iii) The remaining distributions by the Trust during the 
     taxable year which are not excluded from the beneficiaries' 
     income pursuant to clause (i) or (ii) shall be deemed for all 
     purposes of this title to be treated as distributions by the 
     sponsoring Native Corporation during such taxable year upon 
     its stock and taxable to the recipient beneficiaries to the 
     extent provided in Subchapter C of Subtitle A.
       ``(3) Time and method of election.--An election under this 
     subsection shall be made--
       ``(A) before the due date (including extensions) for filing 
     the Settlement Trust's return of tax for the first taxable 
     year of such trust ending after the date of enactment of this 
     subsection, and
       ``(B) by attaching to such return of tax a statement 
     specifically providing for such election.
       ``(4) Period election in effect.--Except as provided in 
     subsection (c), an election under this subsection--
       ``(A) shall apply to the 1st taxable year described in 
     subparagraph (3)(A) and all subsequent taxable years, and

[[Page 14419]]

       ``(B) may not be revoked once it is made.
       ``(c) Special Rules Where Transfer Restrictions Modified.--
       ``(1) Transfer of beneficial interests.--If the beneficial 
     interests in an electing Settlement Trust may at any time be 
     disposed of in a manner which would not be permitted by 
     section 7(h) of the Claims Act (43 U.S.C. 1606(h)) if such 
     beneficial interest were Settlement Common Stock--
       ``(A) no election may be made under subsection (b) with 
     respect to such trust, and
       ``(B) if an election under subsection (b) is in effect as 
     of such time--
       ``(i) such election is revoked as of the 1st day of the 
     taxable year following the taxable year in which such 
     disposition is first permitted, and
       ``(ii) there is hereby imposed on such Alaska Native 
     Settlement Trust in lieu of any other taxes for such taxable 
     year a tax equal to the product of the fair market value of 
     the assets held by such trust as of the close of the taxable 
     year in which such disposition is first permitted and the 
     highest rate of tax under section 1(e) for such taxable year.
       ``(2) Stock in corporation.--If--
       ``(A) the Settlement Common Stock in the sponsoring Native 
     Corporation may be disposed of in any manner not permitted by 
     section 7(b) of the Claims Act, and
       ``(B) at any time after such disposition is first 
     permitted, the sponsoring Native Corporation transfer assets 
     to such Settlement Trust,

     subparagaph (1)(B) shall be applied to such trust in the same 
     manner as if the trust permitted dispositions of beneficial 
     interests in the trust other than would be permitted under 
     section 7(h) of the Claims Act if such beneficial interests 
     were Settlement Common Stock.
       ``(3) Administrative provisions.--For purposes of Subtitle 
     F, the tax imposed by clause (ii) of subparagraph (1)(B) 
     shall be treated as an excise tax with respect to which the 
     deficiency procedures of such subtitle apply.
       ``(d) Taxable Income.--For purposes of this Title, the 
     taxable income of an electing Settlement Trust shall be 
     determined under section 641(b) without regard to any 
     deduction under section 651 or 661.
       ``(e) Definitions.--For purposes of this section, section 
     1(i) and section 6041.--
       ``(1) Native corporation.--The term `Native Corporation' 
     has the meaning given such term by section 3(m) of the Claims 
     Act (43 U.S.C. 1602(m))
       ``(2) Sponsoring native corporation.--The term `sponsoring 
     Native Corporation' means the respective Native Corporation 
     that transferred assets to an electing Settlement Trust.
       ``(3) Settlement trust.--The term `Settlement Trust' means 
     a trust which constitutes a settlement trust under section 39 
     of the Claims Act (43 U.S.C. 1629e).
       ``(4) Electing settlement trust.--The term `electing 
     Settlement Trust' means a Settlement Trust that has made the 
     election described in subsection (b).
       ``(5) Settlement common stock.--The term `Settlement Common 
     Stock' has the meaning given such term by section 3(p) of the 
     Claims Act (43 U.S.C. 1602(p)).''
       (c) Reporting.--Section 6041 of such Code is amended by 
     adding at the end the following new subsection:
       ``(f) Application to Certain Alaska Native Settlement 
     Trusts.--In lieu of all other rules (whether imposed by 
     statute, regulation or otherwise that require a trust to 
     report to its beneficiaries and the Commissioner concerning 
     distributable share information, the rules of this subsection 
     shall apply to an electing Settlement Trust (as defined in 
     section 646(e)(4)). An electing Settlement Trust is not 
     required to include with its return of income or send to its 
     beneficiaries statement that identify the amounts distributed 
     to specific beneficiaries. An electing Settlement Trust shall 
     instead include with its own return of income a statement as 
     to the total amount of its distributions during such taxable 
     year, the amount of such distributions which are excludable 
     from the recipient beneficiaries' gross income pursuant to 
     section 646, and the amount, if any, of its distributions 
     during such year which were deemed to have been made by the 
     sponsoring Native Corporation (as such term is defined in 
     section 646(e)(2)).''
       ``(d) Effective date.--The amendments made by this section 
     shall apply to taxable years of electing Settlement Trusts, 
     their beneficiaries, and sponsoring Native Corporations 
     ending after the date of the enactment of this Act and to 
     contributions made to electing Settlement Trusts during such 
     year and thereafter.

  Mr. ROTH. I yield back any time I have.
  Mr. REID. As does the minority.


                           Amendment No. 3872

  Mr. ROTH. Mr. President, I send an amendment to the desk on behalf of 
Senator Stevens.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, 
     proposes an amendment numbered 3872.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To clarify the tax treatment of passengers filling empty 
                   seats on noncommercial airplanes)

       At the appropriate place insert the following new section:

     SEC.   . TAX TREATMENT OF PASSENGERS FILLING EMPTY SEATS ON 
                   NONCOMMERCIAL AIRPLANES.

       (a) Subsection (j) of section 132 of the Internal Revenue 
     Code of 1986 (relating to certain fringe benefits) is amended 
     by adding at the end thereof the following new paragraph:
       ``(9) Special rule for certain noncommercial air 
     transportation.--Notwithstanding any other provision of this 
     section, the term `no-additional-cost service' includes the 
     value of transportation provided to any person on a 
     noncommercially operated aircraft if--
       ``(A) such transportation is provided on a flight made in 
     the ordinary course of the trade or business of the taxpayer 
     owning or leasing such aircraft for use in such trade or 
     business,
       ``(B) the flight on which the transportation is provided 
     would have been made whether or not such person was 
     transported on the flight, and
       ``(C) no substantial additional cost is incurred in 
     providing such transportation to such person.

     For purposes of this paragraph, an aircraft is 
     noncommercially operated if transportation thereon is not 
     provided or made available to the general public by purchase 
     of a ticket or other fare.''
       (b) Effective Date.--The amendment made by Section 1 shall 
     take effect on January 1, 2001.

  Mr. ROTH. Mr. President, I yield back my time.
  Mr. REID. As does the minority.


                           Amendment No. 3873

  Mr. ROTH. Once more, Mr. President, on behalf of Senator Stevens, I 
send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for Mr. Stevens, 
     proposes an amendment numbered 3873.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend title 26 of the Taxpayer Relief Act of 1986 to allow 
income averaging for fishermen without negative Alternative Minimum Tax 
 treatment, for the creation of risk management accounts for fishermen 
                        and for other purposes)

       At the appropriate place insert the following new section:

     SEC. _. INCOME AVERAGING FOR FISHERMEN WITHOUT INCREASING 
                   ALTERNATIVE MINIMUM TAX LIABILITY AND FISHERMEN 
                   RISK MANAGEMENT ACCOUNTS.

       (a)(1) Income Averaging for Fishermen Without Increasing 
     Alternative Minimum Tax Liability.--Section 55(c) (defining 
     regular tax) is amended by redesignating paragraph (2) as 
     paragraph (3) and by inserting after paragraph (1) the 
     following:
       ``(2) Coordination with income averaging for fishermen.--
     Solely for purposes of this section, section 1301 (relating 
     to averaging of fishing income) shall not apply in computing 
     the regular tax.''.
       (2) Allowing Income Averaging for Fishermen.--
       (A) In general.--Section 1301(a) is amended by striking 
     `farming business' and inserting `farming business or fishing 
     business,'.
       ``(B) Definition of elected farm income.--
       ``(i) In general.--Clause (i) of section 1301(b)(1)(A) is 
     amended by inserting `or fishing business' before the 
     semicolon.
       ``(ii) Conforming amendment.--Subparagraph (B) of section 
     1301(b)(1) is amended by inserting `or fishing business' 
     after `farming business' both places it occurs.
       ``(C) Definition of fishing business.--Section 1301(b) is 
     amended by adding at the end the following new paragraph:
       ``(4) Fishing Business.--The term `fishing business' means 
     the conduct of commercial fishing (as defined in section 3 of 
     the Magnuson-Stevens Fishery Conservation and Management Act 
     (16 U.S.C. 1802, Public Law 94-265 as amended)).''.
       (b) Fishermen Risk Management Accounts.--Subpart C of part 
     II of subchapter E of chapter 1 (relating to taxable year for 
     which deductions taken) is amended by inserting after section 
     468B the following:

     ``SEC. 468C. FISHING RISK MANAGEMENT ACCOUNTS.

       ``(a) Deduction Allowed.--In the case of an individual 
     engaged in an eligible commercial fishing activity, there 
     shall be allowed

[[Page 14420]]

     as a deduction for any taxable year the amount paid in cash 
     by the taxpayer during the taxable year Fishing Risk 
     Management Account (hereinafter referred to as the `FisheRMen 
     Account').
       ``(b) Limitation.--
       ``(1) Contributions.--The amount which a taxpayer may pay 
     into the FisheRMen Account for any taxable year shall not 
     exceed 20 percent of so much of the taxable income of the 
     taxpayer (determined without regard to this section) which is 
     attributable (determined in the manner applicable under 
     section 1301) to any eligible commercial fishing activity.
       ``(2) Distributions.--Distributions from a FisheRMen 
     Account may not be used to purchase, lease, or finance any 
     new fishing vessel, add capacity to any fishery, or otherwise 
     contribute to the overcapitalization of any fishery. The 
     Secretary of Commerce shall implement regulations to enforce 
     this paragraph.
       ``(c) Eligible Businesses.--For purposes of this section--
       ``(1) Commercial fishing activity.--The term `commercial 
     fishing activity' has the meaning given the term commercial 
     fishing by section (3) of the Magnuson-Stevens Fishery 
     Conservation and Management Act (16 U.S.C. 1802, Public Law 
     94-265 as amended) but only if such fishing is not a passive 
     activity (within the meaning of section 469(c)) of the 
     taxpayer.
       ``(d) Fishermen Account.--For purposes of this section--
       ``(1) In general.--The term `FisheRMen Account' means a 
     trust created or organized in the United States for the 
     exclusive benefit of the taxpayer, but only if the written 
     governing instrument creating the trust meets the following 
     requirements:
       ``(A) No contribution will be accepted for any taxable year 
     in excess of the amount allowed as a deduction under 
     subsection (a) for such year.
       ``(B) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which such person will 
     administer the trust will be consistent with the requirements 
     of this section.
       ``(C) The assets of the trust consist entirely of cash or 
     of obligations which have adequate stated interest (as 
     defined in section 1274(c)(2)) and which pay such interest 
     not less often than annually.
       ``(D) All income of the trust is distributed currently to 
     the grantor.
       ``(E) The assets of the trust will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(2) Account taxed as grantor trust.--The grantor of a 
     FisheRMen Account shall be treated for purposes of this title 
     as the owner of such Account and shall be subject to tax 
     thereon in accordance with subpart E of part I of subchapter 
     J of this chapter (relating to grantors and others treated as 
     substantial owners).
       ``(e) Inclusion of Amounts Distributed.--
       ``(1) In general.--Except as provided in paragraph (2), 
     there shall be includible in the gross income of the taxpayer 
     for any taxable year--
       ``(A) any amount distributed from a FisheRMen Account of 
     the taxpayer during such taxable year, and
       ``(B) any deemed distribution under--
       ``(i) subsection (f)(1) (relating to deposits not 
     distributed within 5 years),
       ``(ii) subsection (f)(2) (relating to cessation in eligible 
     commercial fishing activities), and
       ``(iii) subparagraph (A) or (B) of subsection (f)(3) 
     (relating to prohibited transactions and pledging account as 
     security).
       ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
       ``(A) any distribution to the extent attributable to income 
     of the Account, and
       ``(B) the distribution of any contribution paid during a 
     taxable year to a FisheRMen Account to the extent that such 
     contribution exceeds the limitation applicable under 
     subsection (b) if requirements similar to the requirements of 
     section 408(d)(4) are met.
       ``For purposes of subparagraph (A), distributions shall be 
     treated as first attributable to income and then to other 
     amounts.
       ``(f) Special Rules.--
       ``(1) Tax on deposits in account which are not distributed 
     within 5 years.--
       ``(A) In general.--If, at the close of any taxable year, 
     there is a nonqualified balance in any FisheRMen Account--
       ``(i) there shall be deemed distributed from such Account 
     during such taxable year an amount equal to such balance, and
       ``(ii) the taxpayer's tax imposed by this chapter for such 
     taxable year shall be increased by 10 percent of such deemed 
     distribution.
       ``The preceding sentence shall not apply if an amount equal 
     to such nonqualified balance is distributed from such Account 
     to the taxpayer before the due date (including extensions) 
     for filing the return of tax imposed by this chapter for such 
     year (or, if earlier, the date the taxpayer files such return 
     for such year).
       ``(B) Nonqualified balance.--For purposes of subparagraph 
     (A), the term `nonqualified balance' means any balance in the 
     Account on the last day of the taxable year which is 
     attributable to amounts deposited in such Account before the 
     4th preceding taxable year.
       ``(C) Ordering rule.--For purposes of this paragraph, 
     distributions from a FisheRMen Account (other than 
     distributions of current income) shall be treated as made 
     from deposits in the order in which such deposits were made, 
     beginning with the earliest deposits.
       ``(2) Cessation in eligible business.--At the close of the 
     first disqualification period after a period for which the 
     taxpayer was engaged in an eligible commercial fishing 
     activity, there shall be deemed distributed from the 
     FisheRMen Account of the taxpayer an amount equal to the 
     balance in such Account (if any) at the close of such 
     disqualification period. For purposes of the preceding 
     sentence, the term `disqualification period' means any period 
     of 2 consecutive taxable years for which the taxpayer is not 
     engaged in an eligible commercial fishing activity.
       ``(3) Certain rules to apply.--Rules similar to the 
     following rules shall apply for purposes of this section:
       ``(A) Section 220(f)(8) (relating to treatment on death).
       ``(B) Section 408(e)(2) (relating to loss of exemption of 
     account where individual engaged in prohibited transaction).
       ``(C) Section 408(e)(4) (relating to effect of pledging 
     account as security).
       ``(D) Section 408(g) (relating to community property laws.)
       ``(E) Section 408(h) (relating to custodial accounts).
       ``(4) Time when payments deemed made.--For purposes of this 
     section, a taxpayer shall be deemed to have made a payment to 
     a FisheRMen Account on the last day of a taxable year if such 
     payment is made on account of such taxable year and is made 
     on or before the due date (without regard to extensions) for 
     filing the return of tax for such taxable year.
       ``(5) Individual.--For purposes of this section the term 
     `individual' shall not include an estate or trust.
       ``(6) Deduction not allowed for self-employment tax.--The 
     deduction allowable by reason of subsection (a) shall not be 
     taken into account in determining an individual's net 
     earnings from self-employment (within the meaning of section 
     1402(a)) for purposes of chapter 2.
       ``(g) Reports.--The trustee of a FisheRMen Account shall 
     make such reports regarding such Account to the Secretary and 
     to the person for whose benefit the Account is maintained 
     with respect to contributions, distributions, and such other 
     matters as the Secretary may require under regulations. The 
     reports required by this subsection shall be filed at such 
     time and in such manner and furnished to such persons at such 
     time and in such manner as may be required by such 
     regulations.''.
       (c) Conformity With Existing Provisions and Clerical 
     Amendment.--
       (1) Subsection (a) of section 4973 (relating to tax on 
     excess contributions to certain tax-favored accounts and 
     annuities) is amended by striking ``or'' at the end of 
     paragraph (3), by redesignating paragraph (4) as paragraph 
     (5), and by inserting after paragraph (3) the following:
       ``(4) a FisheRMen Account (within the meaning of section 
     468C(d)), or''.
       (2) Section 4973 is amended by adding at the end the 
     following:
       ``(g) Excess Contributions to Fishermen Accounts.--For 
     purposes of this section, in the case of a FisheRMen Account 
     (within the meaning of section 468C(d)), the term `excess 
     contributions' means the amount by which the amount 
     contributed for the taxable year to the Account exceeds the 
     amount which may be contributed to the Account under section 
     468C(b) for such taxable year. For purposes of this 
     subsection, any contribution which is distributed out of the 
     FisheRMen Account in a distribution to which section 
     468C(e)(2)(B) applies shall be treated as an amount not 
     contributed.''.
       (3) The section heading for section 4973 is amended to read 
     as follows:

     ``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, 
                   ANNUITIES, ETC.''.

       (4) The table of sections for chapter 43 is amended by 
     striking the item relating to section 4973 and inserting the 
     following:

``Sec. 4973. Excess contributions to certain accounts, annuities, 
              etc.''.

       (5) Tax on prohibited transactions.--Subsection (c) of 
     section 4975 (relating to tax on prohibited transactions) is 
     amended by adding at the end the following:
       ``(6) Special rule for fishermen accounts.--A person for 
     whose benefit a FisheRMen Account (within the meaning of 
     section 468C(d)) is established shall be exempt from the tax 
     imposed by this section with respect to any transaction 
     concerning such account (which would otherwise be taxable 
     under this section) if, with respect to such transaction, the 
     account ceases to be a FisheRMen Account by reason of the 
     application of section 468C(f)(3)(A) to such account.''. (2) 
     Paragraph (1) of section 4975(e) is amended by redesignating 
     subparagraphs (E) and (F) as subparagraphs (F) and (G), 
     respectively, and by inserting after subparagraph (D) the 
     following:
       ``(E) a FisheRMen Account described in section 468C(d).''.
       (6) Failure to provide reports on fishermen accounts.--
     Paragraph (2) of section

[[Page 14421]]

     6693(a) (relating to failure to provide reports on certain 
     tax-favored accounts or annuities) is amended by 
     redesignating subparagraphs (C) and (D) as subparagraphs (D) 
     and (E), respectively, and by inserting after subparagraph 
     (B) the following:
       ``(C) section 468C(g) (relating to FisheRMen Accounts,''.
       (7) Clerical amendment.--The table of sections for subpart 
     C of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 468B the 
     following:

``Sec. 468C. Fishing Risk Management Accounts.''.

       (d) Effective Date.--The changes made by this section shall 
     apply to taxable years beginning after December 31, 2000.

  Mr. ROTH. Mr. President, I yield back whatever time I have remaining.
  Mr. REID. As does the minority.


                    Amendment No. 3862, As Modified

  Mr. ROTH. Mr. President, on behalf of Senator Abraham, I ask 
unanimous consent to send a modification of his previous amendment to 
the desk.
  The PRESIDING OFFICER. Is there objection to the modification?
  Mr. REID. I have no objection, Mr. President.
  The PRESIDING OFFICER. Without objection, the amendment is so 
modified.
  The amendment, as modified, is as follows:

  (Purpose: To express the sense of the Senate regarding the need to 
 repeal the marriage tax penalty and improve coverage of prescription 
              drugs under the medicare program this year)

       At the end of the Act, add the following:

                        TITLE VI--MISCELLANEOUS

     SEC. 601. SENSE OF THE SENATE REGARDING COVERAGE OF 
                   PRESCRIPTION DRUGS UNDER THE MEDICARE PROGRAM.

       (a) Findings.--The Senate makes the following findings:
       (1) Projected on-budget surpluses for the next 10 years 
     total $1,900,000,000,000, according to the President's mid-
     session review.
       (2) Eliminating the marriage tax penalty would reduce 
     revenues by $56,000,000,000 over 10 years, leaving on-budget 
     surpluses of $1,844,000,000,000.
       (3) The medicare program established under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.) faces the 
     dual problem of inadequate coverage of prescription drugs and 
     rapid escalation of program costs with the retirement of the 
     baby boom generation.
       (4) The concurrent resolution on the budget for fiscal year 
     2001 provides $40,000,000,000 for prescription drug coverage 
     in the context of a reform plan that improves the long-term 
     outlook for the medicare program.
       (5) The Committee on Finance of the Senate currently is 
     working in a bipartisan manner on reporting legislation that 
     will reform the medicare program and provide a prescription 
     drug benefit.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) on-budget surpluses are sufficient to both repeal the 
     marriage tax penalty and improve coverage of prescription 
     drugs under the medicare program and Congress should do both 
     this year; and
       (2) the Senate should pass adequately funded legislation 
     that can effectively--
       (A) expand access to outpatient prescription drugs;
       (B) modernize the medicare benefit package;
       (C) make structural improvements to improve the long term 
     solvency of the medicare program;
       (D) reduce medicare beneficiaries' out-of-pocket 
     prescription drug costs, placing the highest priority on 
     helping the elderly with the greatest need; and
       (E) give the elderly access to the same discounted rates on 
     prescription drugs as those available to Americans enrolled 
     in private insurance plans.

  Mr. ROTH. Mr. President, I believe that is all the amendments we have 
on this side.
  Mr. REID. Mr. President, I say to the manager of the bill, Senator 
Reed, who is a cosponsor of one of the amendments that was offered on 
his behalf and Senator Torricelli, wishes to speak on that amendment at 
this time.
  Mr. REED. Mr. President, earlier today, the Senator from Nevada 
offered an amendment on childhood lead exposure on behalf of myself and 
Senator Torricelli. I wish to speak briefly at this time on the merits 
of that amendment.
  Today, we are here to offer an amendment that would address a problem 
that is particularly pernicious, dealing with the health of children 
and exposure to lead paint. There are countless numbers of children 
across this country who have been physically and emotionally harmed, 
and cognitive development impaired, because they were unwittingly, in 
most cases, exposed to lead-based paint. Generally, this type of paint 
is common in older homes throughout the country. It is a particular 
problem in the Northeast, in Rhode Island and in Massachusetts; but it 
is not limited to that part of the country.
  Anyplace where you have older houses, and the homes are more than 20 
or 30 years old--you have this potential problem of exposure to lead-
based paint by children, which may impact their physical and 
intellectual development.
  The Medicaid authorities have recognized this problem and have 
promulgated regulations for screening and follow-up treatment services 
for Medicaid-eligible young children. However, in all too many cases, 
this screening requirement is ignored by Medicaid contractors. Without 
screening and without identification of lead poisoned children, there 
is no good opportunity for followup treatment.
  Now, the amendment, proposed by Senator Torricelli and myself, would 
codify these regulations and would require screening conducted by 
Medicaid contractors, which are the health plans that provide services 
for the Medicaid population. With screening, it would also require the 
followup treatment and services necessary to ensure that the child can 
successfully deal with exposure and poisoning from lead.
  What we are seeing across the country, from statistics being 
generated by the General Accounting Office, is that many States are 
negligent in ensuring that the contractors are screening children and 
providing followup treatment. Our amendment would try to respond to 
this known deficiency by requiring an annual report to Congress from 
HCFA and, in turn, requiring legislatively that the States not only 
insist upon the screening, but also report back to HCFA on the results 
of their screening efforts.
  Let me emphasize that this is not a new mandate on the States. This 
is in response to the fact that the existing Federal regulations are 
being ignored. The next logical step--the one we propose--is to codify 
these regulations, literally give them the force of law so the States 
and Medicaid contractors will begin to do what they should have been 
doing since 1992.
  What we have seen, in terms of the population of Medicaid children, 
is that they represent about 60 percent of all children who have been 
exposed to and poisoned by lead paint. Yet, only 20 percent of 
Medicaid-eligible children have been effectively screened for lead 
exposure. So you have estimates of 60 percent of the youth Medicaid 
population with some exposure to lead paint. Only 20 percent have been 
screened. That huge gap suggests very strongly that there are many, 
many children--too many--who are not being given the treatment they 
need to correct a very difficult problem.
  Now, the other aspect we want to emphasize is the fact that timely 
screening of children exposed to lead is critical to their ultimate 
recovery. It is critical, not only to saving families the stress, 
turmoil and tragedy of a lead-poisoned child, but also saving society 
enormous economic costs associated with lead exposure and lead 
poisoning. One of the things that is quite clear to all who have looked 
into this problem is that, first, lead poisoning is a completely 
preventable illness. If children are not exposed to lead--and typically 
exposure comes from paint in their homes--then they will not contract 
this disease. What is also critical is the fact that lead poisoning can 
cause extremely detrimental health effects in developing children. It 
is associated with brain damage, behavioral and learning problems, slow 
growth, and other maladies, all of which are avoidable if we screen, 
test, and literally get the lead out.
  Statistics show that young children who are exposed to lead poisoning 
frequently require special education services. In fact, it has been 
suggested that children who have exposure to lead paint are 40 percent 
more likely to require special education.
  Special education is one of the issues we often talk about during the 
course of the debate on educational priorities and funding. It costs an 
average of $10,000 above the cost of regular education for the typical 
special education

[[Page 14422]]

child. Many of these children are in special education programs because 
they were poisoned by lead in their homes. If we can effectively deal 
with this health care problem, we will also deal with an educational 
problem and a funding problem, a problem that bedevils every local 
school system in this country.
  Whenever I go back to my State, one of the top issues I hear about 
from my constituents is the extra cost of special education. While this 
proposal will at least go a small way toward addressing that problem, 
as well as going to the heart of the matter on protecting children from 
an environmental poison that can be avoided if we screen and take other 
remedial actions.
  This amendment is only one part of a comprehensive strategy we need 
to protect children against the hazards of lead poisoning. We need 
screening of individual children and we need quick access to followup 
services and treatment; but we also need a housing policy that 
recognizes that we have an obligation to remove from older homes the 
lead paint that is the source of the contagion for these young 
children. If we put these together--screening, treatment, housing 
policies that try to get the lead out, and provide safe housing for all 
of our children--then I think we will be on our way not only to 
providing good, compassionate care for our children, but also saving 
society countless millions of dollars each year.
  I particularly thank my colleagues, Senator Bond and Senator 
Mikulski, because over the last couple of years we have been able to 
put more resources into Federal lead abatement programs, treatment 
programs, and other programs aimed at this particularly pernicious 
problem. I hope we, in fact, continue on that trend.
  Today we have an important opportunity to do what we have tried to do 
through regulations, but to do it through the force of law, by 
requiring screening and access to care for children, by requiring 
appropriate reports to Federal authorities and to the Congress, so we 
can eradicate this problem amongst our children in this country.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, one of the things I am afraid of is that 
many people following this debate will get confused about what we are 
talking about, why we are here, and what the issue is before us. I 
thought I would come over one more time before the weekend and 
basically try to outline what it is we are talking about. Many 
amendments are being offered. Our Democrat colleagues would not let us 
just bring up repeal of the marriage penalty and vote on it. They 
insisted on having the ability to offer amendments on scores of 
different issues. So I know it may be confusing as people listen to the 
debate.
  Let me talk about what the issue is, where those of us stand on 
repealing the marriage tax penalty, what we believe we have to do 
regarding that; and then I want to talk a little bit about what the 
President has proposed as an alternative.
  I don't know that anybody ever intended that American tax law 
penalize working people who get married. But today, when two people, 
both of whom work outside their home, meet, fall in love, get married, 
and pay their taxes, they pay, on average, $1,400 a year for the right 
to be married.
  Now, I hope and believe that if you asked most American couples if it 
is worth $1,400 a year to them to be married, I think most of them 
would say it is. I can say, without any reservation, that my wife is 
worth $1,400 a year, and a bargain at that. But I believe she ought to 
get the money, and not bureaucrats in Washington, DC.
  How did this all come about? You have to remember when the Tax Code 
was written that relatively few women worked outside the home. It was 
structured in such a way as to try to achieve various objectives.
  But the bottom line is we have two problems today.
  The first problem is, if you are single and you file your tax return, 
you get a standard deduction of $4,400. If you have a young man and a 
young woman, or not such a young man and not such a young woman, and 
they are single and filing separately, and don't itemize deductions, 
each one of them gets a standard deduction of $4,400. If they meet, 
fall in love, and get married, they end up getting a joint return 
standard deduction of $7,350--obviously, much less than $8,800, which 
would be twice the single deduction of $4,400. If you meet, fall in 
love, and get married, the amount of income you get to deduct before 
you start paying taxes is actually less after you are married than it 
is before.
  Second, the income of the second spouse is added directly to the 
income of the first spouse.
  What tends to happen is two people who, as singles, are in the 15-
percent tax bracket meet, fall in love and get married, and end up in 
the 28-percent tax bracket. Hence, when you combine the discrimination 
in the tax law against married couples as compared to singles on the 
standard deduction, and when you look at pushing people into these 
higher tax brackets more quickly when they are married than when they 
were singled, the result is a marriage tax penalty which averages 
$1,400 each year.
  We want the remedy to be very simple. We want to repeal the marriage 
penalty. We think this is not just an economic issue, we think it is a 
moral issue. We think even the greatest country in the history of the 
world is treading dangerously when it has policies that discourage 
people from forming families. We are not here to give any kind of 
sermon on families and the values of families, but the plain truth is 
the modern family is the most powerful institution in history for 
happiness and economic progress, and we don't think our Government, of 
all governments, should be trifling with it.
  Our reform says, whereas single people get a $4,400 standard 
deduction, we will give a married couple $8,800. We want to change the 
tax brackets so that if two people get married who are in the 15-
percent tax bracket as singles, they will still be in the 15-percent 
tax bracket after they get married; or, if they are in the 28-percent 
tax bracket, they are still in the 28-percent tax bracket after they 
get married.
  You would think you could look throughout the continent of North 
America and not find a single soul who thought the marriage tax penalty 
was a good idea. But, unfortunately, we have a President and we have 
Members of this very Congress who may say they are not for it but they 
are opposed to getting rid of it.
  They are opposed to getting rid of it for a very simple reason. They 
believe they can spend this money better than families. They believe if 
we repeal the marriage penalty and working couples get to keep $1,400 a 
year more of their own income to invest in their own family, in their 
own future, and in their own children, that those families will do a 
poorer job with that money than the Government will do if the 
Government gets to spend it. They really believe that the Government 
can spend it better.
  Our President and many of our Democrat colleagues, honest to 
goodness, in their hearts, believe it is wrong to give this $1,400 back 
to people by eliminating the marriage penalty because they believe that 
Government could spend the money so much better than families could 
spend it.
  While they believe that, they don't feel comfortable saying it 
because they don't believe the American people will agree with them.
  So what do they say? What does our President say? He doesn't say: 
Look, don't give this money back to families. They will spend it on 
their children. They will spend it on houses. They might buy a new 
refrigerator. They might go on vacation. They might send their children 
to Texas A&M. Let the Government spend it. But they do not say that. 
Our President is many things, but dumb is not one of them. He is very 
smart. So he says it is rich people--that we are trying to give money 
to rich people.
  There is a code that you need to understand about our President and 
many people in his party. The code is that every tax increase is on 
rich people and every tax cut is for rich people; therefore, you always 
want to raise taxes but you never want to cut taxes.

[[Page 14423]]

  I want to remind you--I am sure people who are listening to this 
debate are going to hear our President speak on the issue within a week 
after we send this bill down to the White House. The President is going 
to have to decide whether to sign it. I suspect he is going to say: I 
wanted to eliminate the marriage penalty. I am against the marriage 
penalty. It is just that I didn't want to do it for rich people.
  Let me remind people that this is the same President who, when he 
raised taxes in 1993, looked us right in the eye over the television, 
and said: No one who is not rich will pay more taxes under my tax bill. 
Then he raised gasoline taxes on everybody. I guess maybe everybody who 
drives a truck, or a car, or uses gasoline in some way to travel or go 
to work is rich.
  Then there was the even more grievous example where the President 
taxed people's Social Security benefits if they earned over $34,000 a 
year, because if you earn over $34,000 a year, according to the 
President, you are rich.
  Here is an example I wanted to make. I think it is so priceless. Let 
me make it a couple of times to be sure I get it right.
  The President says he wants to get rid of the marriage penalty but he 
doesn't want to do it for rich people. So what he proposes is raising 
the standard deduction if both people work. If one of them doesn't 
work, or one of them doesn't make as much money, he doesn't raise it or 
doesn't raise it as much. I am going to get back to that. But he 
doesn't expand the 15-percent bracket so that married people don't end 
up paying in the 28-percent tax bracket with the same incomes that were 
taxed at 15-percent when they were single. He says his plan just 
eliminates the marriage penalty for people who are not rich--that our 
plan eliminates it for people who are rich.
  It is very interesting. For a couple filing a tax return, they move 
into the 28-percent tax bracket at a combined income of $43,850. If you 
want to know whether you are rich or not by the definition of our 
President, if you make $21,925 a year and your wife makes $21,925, 
according to Bill Clinton, you are rich.
  I ask a question: Does anybody really believe that somebody making 
$21,925 a year is rich? I don't think anybody really believes that. Why 
does Bill Clinton say that? He says it because he is not willing to say 
what he really believes, which is, it is fine to penalize people for 
getting married, because he may not necessarily like it or enjoy it, 
but it is all right to do that and make them pay the marriage penalty 
of $1,400 a year because the Government can do such a good job spending 
that money and the family would probably waste it.
  Let me mention two other issues. Then I will yield the floor.
  The President says if both spouses are not working, they ought not to 
get the benefit. We reject that.
  First of all, anybody who thinks stay-home parents don't work has 
never been a stay-home parent. Anybody who thinks you are getting a tax 
bonus by staying at home to raise your children is somebody who doesn't 
understand families too well, because most families make tremendous 
economic sacrifices to have one parent stay home with their children. 
Yet the President runs around and says when one of the parents doesn't 
work outside the home, they are getting a bonus. Forgoing income and 
sacrificing to raise children is only called a bonus in Washington, DC. 
In most places it is called parenting.
  We want to eliminate the marriage penalty because we think there is 
one institution in America that is constantly starved for resources. It 
is not the Federal Government.
  As many of our colleagues know, we are in the greatest spending spree 
of the Federal Government since Jimmy Carter was President. We are 
increasing money for all kinds of Government programs. The President 
would like to increase it faster, and he is concerned that, if we let 
families not pay a marriage penalty, that $1,400 per family they will 
spend instead of him, means that we will not have as much money for 
education, housing, or nutrition.
  What the President forgets is, What are families going to spend this 
money on? If we eliminate the marriage penalty and let working couples 
keep $1,400 a year more, what are they going to spend it on? They are 
going to spend it on education, housing, and nutrition. The question is 
not about how much money we are going to spend on all these things we 
are for. The question is, Who is going to do the spending? Bill Clinton 
wants Washington to do the spending. We want the family to do the 
spending.
  On the issue of one parent staying at home, this is something we have 
thought about, worked on, prayed over. Here is the decision we have 
reached. We don't think Government tax policy ought to have a say in 
the decision that parents make about working outside the home or 
staying in their homes. My mama worked my whole life when I was growing 
up because she had to. My wife has worked the whole while that we have 
had children because she wanted to.
  We are not trying to make a value judgment as to what people ought to 
do. So basically we say we want to eliminate the marriage penalty, 
whether both parents work outside the home or whether only one does. We 
do not think we ought to have a tax policy that discourages a parent 
staying home, or encourages it. We think the Tax Code ought to be 
neutral.
  So we have put together a proposal that eliminates the marriage 
penalty. The President says it helps rich people because, if you make 
over $21,925 a year, you get the benefit of our stretching the tax 
brackets. We do not believe that is what most people think of as rich.
  Finally, to address the ``rich'' issue, our point is not about poor 
people or rich people or ordinary people. Our point is about penalizing 
marriage. If two people are poor and meet and fall in love, I want them 
to get married. If two people are rich and they meet and they fall in 
love and they want to get married, I don't want the tax code to 
discourage them from getting married. This is a question of right and 
wrong. It is not a question of rich and poor.
  I don't understand why the President has to always pit people against 
each other based on how much money they make. I would have to say of 
all the things we do in debate in the Congress and in the American 
political system, the thing I dislike the most is this use of class 
struggle, where somehow we have people who claim to love capitalism, 
but appear to hate capitalists. They claim to want success, but seem to 
hate people who are successful. I, for one, do not understand it.
  I want to repeal the marriage penalty for everybody. The plain truth 
is the bulk of the cost of eliminating the marriage penalty is for 
middle-income people. But I want to eliminate it for everybody because 
it is wrong.
  Finally, if we did not eliminate all of it, what do we think would 
happen the first time we have a President and a Congress who want to 
raise taxes? We would be back down to the point where $21,925 is rich. 
So this is a very important debate.
  This last week, and today, repealing the death tax, and on Monday, 
repealing the marriage penalty tax, represents the best 2 weeks that 
American families have had in a very long time. These are good 
policies. They are good because they are right. They are good because 
they are profamily. They are good because they recognize that families 
can spend money better than Government can. They are good because they 
represent the triumph of the individual and the family over the 
Government.
  I have to say I wish that every American could have heard the debate 
on the death tax and on the marriage penalty. I would be willing to let 
this election and every election from now until the end of time be 
determined on these two issues and these two issues alone because I 
think these two issues clearly define the difference between our two 
great parties.
  I am against the death tax because I don't think death ought to be a 
taxable event. And I am against the marriage penalty because I am for 
love and I am for marriage and I don't want to tax it. And neither do 
the American people.
  I thank my colleagues for their patience and I yield the floor.

[[Page 14424]]

  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BURNS. Mr. President, I rise in support of this legislation. It 
is pretty tough to follow the Senator from Texas because the old 
professor gets going and he lays it out pretty good. Some of us never 
had the privilege of being a classroom professor and we strike out when 
we try to start making a point. But I want to offer a few remarks. I 
also want to offer an amendment at this time.


                           amendment no. 3874

  Mr. BURNS. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Montana [Mr. Burns] for himself, Mr. 
     Abraham, Mr. Hatch, Mr. Craig, Mr. Kyl, Mr. Bennett, Mr. 
     Frist, and Mr. Gramm, proposes an amendment numbered 3874.

  Mr. BURNS. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To repeal the modification of the installment method)

       At the end of __, insert the following:

     SEC.   . REPEAL OF MODIFICATION OF INSTALLMENT METHOD.

       (a) In General.--Subsection (a) of section 536 of the 
     Ticket to Work and Work Incentives Improvement Act of 1999 
     (relating to modification of installment method and repeal of 
     installment method for accrual method taxpayers) is repealed 
     effective with respect to sales and other dispositions 
     occurring on or after the date of enactment of such Act.
       (b) Applicability.--The Internal Revenue Code of 1986 
     should be applied and administered as if such subsection (and 
     the amendments made by such subsection) had not been enacted.

  Mr. BURNS. Mr. President, this is in essence S. 2005, the Installment 
Tax Correction Act of 2000. It has 41 cosponsors, as listed on the 
stand-alone bill, in the Senate. It is a very simple bill, but it is 
very important to small businesses, farmers, and people who sell their 
businesses and carry back some of the financing. As you know, whenever 
you sell your business, if you have capital gains, you pay the full 
capital gain on the sale price of that business. Yet your money may be 
returned to you in yearly installments. What this bill does, is provide 
an easier method to pay your capital gains tax. The amendment doesn't 
change the rate. It changes nothing. But it does allow you to pay your 
capital gains tax as you receive the money on installment.
  We think this is more than fair. It doesn't put the seller at the 
disadvantage of having to go to the bank to borrow money in order to 
pay the capital gains tax whenever a business is sold.
  I cannot add a lot to what the Senator from Texas has said about the 
marriage penalty. But I will tell you this, Joshua and Jody Hayes, of 
Billings, MT--two kids I have known for a long time, now pay $971 more 
in taxes just because they are married, rather than if they had 
remained single.
  That is just one example. Mr. President, I still think when you start 
to look around this great country and you see the standard of living 
that generations, since this country's established, have created, it 
has been progressive. This is because we in this country live for the 
next generation. Most of us, being parents or grandparents, work for 
our kids. That is important. We want them to be better educated than we 
are. We want them to start with a little nest egg which they can 
invest. We want to start them on their careers, at a rung higher than 
we started.
  I was interested in the explanation of the Senator from Texas that 
this President thinks if you make $25,000 a year, you are rich. I 
happen to remember the day that if I was making $25,000 I would have 
thought I was pretty rich. I have a daughter now who is starting her 
life career making more than I am making now. I find that pretty mind-
boggling.
  Nonetheless, we have always worked for our kids. While we have done 
that, we have elevated the standard of living for more Americans than 
any other society on the face of the planet. Now we have found a way to 
tax it.
  That tax comes from families--a mom, a dad, a grandma, and a grandpa. 
Say you have a young family and are trying to pay for a home and saving 
money to send their kids to school--there are more than enough things 
going on. You should not have to be penalized by the tax man. Some 21 
million couples nationwide pay $1,400 or more a year in income taxes. 
Now to some people that's not a lot of money, but I know a lot of folks 
who think it is a lot of money.
  I urge the passage of this legislation, and I also hope this body 
will look with favor on the amendment I have sent to the desk which 
helps small businesses and farmers.
  Mr. President, I yield the floor.


                    Amendment No. 3852, As Modified

  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, amendment No. 3852 is pending. I ask a 
technical correction be allowed. It has been shown to the majority. It 
appears on page 3, changing the numbers from ``9'' to ``25.''
  The PRESIDING OFFICER. Is there objection to the modification?
  Without objection, it is so ordered.
  The amendment is so modified.
  The amendment, as modified, is as follows:

       At the end, add the following:

     SEC. __. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following:

     ``SEC. 45D. EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a small employer, the employee health insurance 
     expenses credit determined under this section is an amount 
     equal to the applicable percentage of the amount paid by the 
     taxpayer during the taxable year for qualified employee 
     health insurance expenses.
       ``(b) Applicable Percentage.--For purposes of subsection 
     (a)--
       ``(1) In general.--Except as provided in paragraph (2), the 
     applicable percentage is equal to--
       ``(A) 25 percent in the case of self-only coverage, and
       ``(B) 35 percent in the case of family coverage (as defined 
     in section 220(c)(5)).
       ``(2) First year coverage.--
       ``(A) In general.--In the case of first year coverage, 
     paragraph (1) shall be applied by substituting `60 percent' 
     for `25 percent' and `70 percent' for `35 percent'.
       ``(B) First year coverage.--For purposes of subparagraph 
     (A), the term `first year coverage' means the first taxable 
     year in which the small employer pays qualified employee 
     health insurance expenses but only if such small employer did 
     not provide health insurance coverage for any qualified 
     employee during the 2 taxable years immediately preceding the 
     taxable year.
       ``(c) Per Employee Dollar Limitation.--The amount of 
     qualified employee health insurance expenses taken into 
     account under subsection (a) with respect to any qualified 
     employee for any taxable year shall not exceed--
       ``(1) $1,800 in the case of self-only coverage, and
       ``(2) $4,000 in the case of family coverage (as so 
     defined).
       ``(d) Definitions.--For purposes of this section--
       ``(1) Small employer.--
       ``(A) In general.--The term `small employer' means, with 
     respect to any calendar year, any employer if such employer 
     employed an average of 25 or fewer employees on business days 
     during either of the 2 preceding calendar years. For purposes 
     of the preceding sentence, a preceding calendar year may be 
     taken into account only if the employer was in existence 
     throughout such year.
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     1st preceding calendar year, the determination under 
     subparagraph (A) shall be based on the average number of 
     employees that it is reasonably expected such employer will 
     employ on business days in the current calendar year.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage to the extent such amount is 
     attributable to coverage provided to any employee while such 
     employee is a qualified employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the

[[Page 14425]]

     meaning given such term by section 9832(b)(1).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, an employee of an employer if the 
     total amount of wages paid or incurred by such employer to 
     such employee at an annual rate during the taxable year 
     exceeds $5,000 but does not exceed $16,000.
       ``(B) Treatment of certain employees.--For purposes of 
     subparagraph (A), the term `employee'--
       ``(i) shall not include an employee within the meaning of 
     section 401(c)(1), and
       ``(ii) shall include a leased employee within the meaning 
     of section 414(n).
       ``(C) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(D) Inflation adjustment.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2000, the $16,000 amount 
     contained in subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     determined by substituting `calendar year 1999' for `calendar 
     year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any increase determined under clause 
     (i) is not a multiple of $100, such amount shall be rounded 
     to the nearest multiple of $100.
       ``(e) Certain rules made applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(f) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to qualified employee health insurance expenses 
     taken into account under subsection (a).''
       (b) Credit To Be Part of General Business Credit.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     current year business credit) is amended by striking ``plus'' 
     at the end of paragraph (11), by striking the period at the 
     end of paragraph (12) and inserting ``, plus'', and by adding 
     at the end the following:
       ``(13) the employee health insurance expenses credit 
     determined under section 45D.''
       (c) No Carrybacks.--Subsection (d) of section 39 of the 
     Internal Revenue Code of 1986 (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following:
       ``(9) No carryback of section 45D credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the employee health 
     insurance expenses credit determined under section 45D may be 
     carried back to a taxable year ending before the date of the 
     enactment of section 45D.''
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:

``Sec. 45D. Employee health insurance expenses.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after the date of the enactment of this Act.

                          ____________________


                     amendment no. 3858, withdrawn

  Mr. REID. Mr. President, I ask that the Lautenberg amendment No. 3858 
be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3875

  Mr. REID. Mr. President, I ask unanimous consent that the pending 
amendment be set aside for the purpose of offering an amendment for 
Senator Hollings.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Hollings, 
     proposes an amendment numbered 3875.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike beginning with ``Marriage Tax Relief Reconciliation 
     Act of 2000'' through the end of the bill.

  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3876

 (Purpose: To amend the Internal Revenue Code of 1986 to increase the 
   unified credit exemption and the qualified family-owned business 
  interest deduction, to increase, expand, and simplify the child and 
 dependent care tax credit, to expand the adoption credit for special 
needs children, to provide incentives for employer-provided child care, 
                        and for other purposes)

  Mr. REID. Mr. President, I send an amendment to the desk on behalf of 
Senator Dodd.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Dodd, proposes 
     an amendment numbered 3876.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. REID. Mr. President, I ask unanimous consent that the amendment 
be set aside for further business of the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________