[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Pages 1696-1713]
[From the U.S. Government Publishing Office, www.gpo.gov]



              AFFORDABLE EDUCATION ACT OF 1999--Continued

  Mr. COVERDELL. Mr. President, I ask unanimous consent that the time 
between now and 4 p.m. be consumed in an equally divided fashion for 
debate on the pending Dodd amendment, and at 4 p.m. the Senate vote in 
relation to the Dodd amendment. I further ask consent that following 
the vote, the Senate resume consideration of the Collins amendment No. 
2854.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I further ask unanimous consent that

[[Page 1697]]

following the disposition of the two above-described amendments, 
Senator Robb be recognized to call up an amendment regarding school 
construction.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, in light of this agreement, Members of 
the Senate should note that the next vote will occur at 4 p.m., and a 
second vote regarding the Collins amendment will occur shortly 
thereafter.


                           Amendment No. 2857

  Mr. COVERDELL. Mr. President, while the other side is preparing 
further remarks about their amendment, I want to make it very clear 
that the amendment offered by the Senator from Connecticut would, one, 
make moot the principal core of this legislation, the education savings 
account. It just wipes it out. No. 2, I wish to make the point that he 
is making moot an issue that has received extensive bipartisan support 
in the Senate.
  The principal coauthor of the education savings accounts is Senator 
Torricelli of New Jersey. When this was last voted on before the 
Senate, it received 59, 60 votes--again, a very bipartisan expression 
in support of the education savings accounts. I want to make it clear 
that this amendment would have the effect of destroying a core 
bipartisan component.
  The second point I wish to make is that the Senator from Connecticut 
argues the money used to create this educational IRA should be used to 
enhance the funding of special education. Special education, he 
rightfully points out, is important and represents an unfunded mandate 
of some 25 years.
  I find it interesting that for 25 years the other side of the aisle 
found it acceptable to ignore the Federal responsibilities for special 
education, and now with a new majority, we on our side of the aisle 
have doubled funding for IDEA. We have an attempt to empower parents 
and local communities to deal with educational requirements for 
children, and we now find this amendment and the great need on the 
other side of the aisle to deal with IDEA. There is an incongruity of 
letting it sit there for so many years without paying attention to it 
and now all of a sudden it is important.
  Mr. DODD. Would my colleague yield on that?
  Mr. COVERDELL. I will in a moment.
  No. 3, let me say to the Senator from Connecticut, first of all, I 
agree with the attempts to fund special education for all the reasons 
the Senator enumerates. But I do not find them mutually exclusive. I do 
not think we have to take this bipartisan education savings account 
legislation and throw it in the trash heap to do this.
  We have increased funding over the President's proposals for special 
education 5 years in a row. I think we will do so again. I think this 
Congress will respond to the goals the Senator has enumerated and to 
the letter the Senator has showed us from the Governors who, indeed, 
think this pledge that was made a long time ago and ignored for an 
awfully long time should be fulfilled. So we agree on that premise. But 
I do not think you have to make this moot in order to do it.
  The last thing I would say--and it is the Senator's amendment, so I 
want him to be able to conclude his debate--is that we disagree on the 
nature of the policy. The Senator's side of the aisle, those who do not 
support it--not those who do--somewhat attempts to minimize the 
significance of it.
  I take some issue with that because we are all down here playing the 
laudatory band for the fact we passed an IRA for higher education that 
had parameters identical to the means test that applies here, but its 
value is only one-fourth what the value of this proposal is. I do not 
think you can make this an insignificant advantage to people on the one 
hand but say this education savings account was a great accomplishment 
on the other.
  Frankly, I think the education savings account that we passed for 
$500 per year for higher education is a good thing. I supported it. I 
proposed it. But this is four times the value of that.
  In conclusion, I think anything that causes American citizens to save 
is a good thing. That piece gets left out of this debate. We are going 
to forgive $1.2 or $3 billion over 5 years. Actually, I say to the 
Senator, for 10 years it is about $2.4 billion. As a result of that, 
Americans are going to save $12 billion. All of it is going to go to 
education--half of it to public education and half of it to private 
education. And 70 percent of the families are going to be in public 
education; 30 percent of the families are going to be in private 
education. This is going to do good things. It is going to help 
families who do have special education problems. I think that is good 
policy.
  I think simultaneously we are going to address the goal of the 
Senator and many of us who share that goal of trying to accelerate 
funding for IDEA. But as I said, I do not think it has to come at the 
expense of this idea. Senator Wellstone and I got into a debate after 
the Senator spoke the other day, and I said: There are not many Federal 
expenditures that provide incentives to people to create large sums of 
resources that come to education. If you take this $1.2 billion, as you 
suggest, and move it to IDEA, it is not bad that we have done it for 
IDEA, but you will leave $12 billion on the table. It just evaporates. 
I do not think there is any need to do that.
  I think having those resources in 14 million families, for 20 million 
children, is of enormous good and will help those families do things 
that are very meaningful for their children.
  I have gone through this rather briefly, but it is the essence of my 
disagreement--not with the idea of funding IDEA or special ed but that 
you make them mutually exclusive.
  With that, I yield the floor so the Senator may continue explaining 
his amendment.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, let me respond to a couple of points my 
friend and colleague from Georgia has raised.
  First of all, going back over the history of IDEA and where the 
support has been and not been over the years, I will ask unanimous 
consent that this chart, dating from 1980 through the year 2000--over 
20 years--be made a part of the Record. It indicates the years and what 
the various Presidents have requested, what was actually appropriated--
the distinction between what Presidents offered and what Congress 
agreed to.
  From 1981 through 1992, without exception, the Presidential request 
was lower than what Congress actually appropriated. Then in 1993, 1994, 
1995, and 1996 Congress actually appropriated a little less than what 
the Clinton administration requested. In 1997, 1998, 1999, and 2000--my 
colleague is correct--the last 4 years, is where you actually have the 
Congress doing better than the Presidential request.
  But over the 20 years, through the Reagan and Bush administrations, 
it was Congress that raised the amount. Most of those years in the 
Senate--not all, but certainly all those years in the House--the 
Congress was in the hands, if you will, of the Democrats. So there is a 
strong background of this.
  As I mentioned today, in the Budget Committee I offered--and I am 
certainly not arguing on behalf of my party; in fact, I lost votes of 
my party in the Budget Committee. I think I pointed out earlier I had 
the support of Trent Lott, who was a member of the Budget Committee at 
the time. But when I was on the Budget Committee a number of years ago 
I tried to put into the budget function category a number, over a 
period of years--I did not care what amount of years the Congress 
wanted to accept; 5 years, 10 years, 15 years--with the goal in mind we 
would reach the 40-percent commitment we committed to in 1975. That is, 
that the Federal Government would be a much better partner in 
supporting our local communities with special education costs.
  I ask unanimous consent this chart that goes from 1980, actually, 
through the year 2000, indicating Presidential requests and what 
Congress appropriated, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 1698]]



                                                           SPECIAL EDUCATION GRANTS TO STATES
                                                        [Budget authority in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Pres. req. vs.    President's     Appropriation
                                 Year                                     President's    Appropriation   appropriation       proposed         annual
                                                                            request                        difference        increase        increase
--------------------------------------------------------------------------------------------------------------------------------------------------------
1980..................................................................  ..............          874.50  ...............  ...............  ..............
1981..................................................................          691.50          874.50          183.00          (183.00)  ..............
1982..................................................................          649.09          931.01          281.92          (225.41)           56.51
1983..................................................................          771.70        1,017.90          246.21          (159.31)           86.89
1984..................................................................          998.18        1,068.88           70.70           (19.72)           50.98
1985..................................................................        1,068.88        1,135.15           66.27   ...............           66.27
1986..................................................................        1,135.15        1,163.28           28.14   ...............           28.14
1987..................................................................        1,135.15        1,338.00          202.86           (28.14)          174.72
1988..................................................................        1,259.38        1,431.74          172.36           (78.62)           93.74
1989..................................................................        1,474.24        1,475.45            1.21            42.50            43.71
1990..................................................................        1,525.61        1,542.61           17.00            50.17            67.16
1991..................................................................        1,615.13        1,854.19          239.06            72.52           311.58
1992..................................................................        1,976.10        1,976.10  ...............          121.91           121.91
1993..................................................................        2,073.30        2,052.73          (20.57)           97.21            76.63
1994..................................................................        2,163.71        2,149.69          (14.02)          110.98            96.96
1995..................................................................        2,353.03        2,322.92          (30.12)          203.35           173.23
1996..................................................................        2,772.46        2,323.84         (448.62)          449.55             0.92
1997..................................................................        2,603.25        3,109.40          506.15           279.41           785.56
1998..................................................................        3,248.75        3,801.00          552.25           139.36           691.61
1999..................................................................        4,020.70        4,310.70          290.00           219.70           509.70
2000..................................................................        4,314.00  ..............  ...............  ...............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Numbers in parentheses are negative.

  Mr. DODD. For those who may be interested, there is a strong record 
of the Congress through all of the 1980s, up until 1992 actually, doing 
a better job in terms of what we put into special ed than the 
administration, which did a bit better from 1992 up through 1996; and 
then the Congress has done better than the President in the last 4 
years in these areas.
  Secondly, with regard to the point raised, again, I said earlier, 
there are parts of the bill offered by my friend from Georgia with 
which I agree. I am not offering this amendment as a substitute to his 
bill. It is only dealing with one part of it. There are parts of this 
bill of which I am very much supportive. It is like anything else, you 
have to make choices. Would we like to do everything? Maybe some people 
would like to do everything. But we can't do everything. We have all 
painfully learned that.
  We finally have ourselves in a situation where we now have surpluses. 
We are moving in the right direction. The interest rates and the 
economy reflect the fact that we are showing much more fiscal 
discipline than has been the case in the past.
  I am suggesting that given the choice between a $1.2 billion tax 
proposal, a new program that may or may not produce, even if we take 
the best estimates, the results that its proponents suggest--that is, 
$1.2 billion taken off the table--based on the evidence that has been 
submitted by the Joint Committee on Taxation, the benefit for people 
whose children go to public schools is very limited. They say $20.50 
over 5 years. Those are not my numbers. Those aren't out of the 
Democratic National Committee or some Democratic think tank. It is the 
Joint Committee on Taxation, a nonpartisan committee that analyzes what 
the tax implications are. We use it all the time.
  They are saying to us: If you are the parents of public school 
education children, which is where 50 million kids went to school this 
morning--of the 55 million kids who went to school, 50 million of them 
went to public schools, elementary and secondary, 5 million went to 
private and parochial schools--for the parents of those 50 million 
kids, the average benefits of all of this over 5 years is $20.50.
  I pose the question, Which is the better choice? If you think you 
could do everything, then you ought to vote, I guess, against my 
amendment and hope at some later date you get a chance to vote for it. 
We will do everything.
  I don't think we can do everything. So I am merely posing an 
alternative that I think would be more meaningful to our mayors, county 
executives, Governors. In fact, this morning, at the combination 
meeting of the Governors and the Senators, it was Governor Angus King, 
independent Governor of Maine, who stood up and said: If you want to do 
something about education--and, by the way, I never met him before; I 
still haven't met him. I don't know the man. But he stood up and said: 
If you guys in the Senate really want to do something about education, 
why don't you do something about special education and our costs? He 
got a standing ovation, applause from everybody in the room.
  The Governor of Pennsylvania, Tom Ridge, and Governor Tom Carper of 
Delaware said: This is the priority. Whom can I call? Whom can I get 
ahold of for you to vote for your amendment, to support your amendment 
this afternoon? Not because they disagree with what their friend and 
colleague, as he is mine, is proposing here, but because they think 
this is a better choice, with limited resources, to go to Oklahoma, 
Connecticut, Florida, to Georgia, to get back to our communities. It 
doesn't solve the special education problem. We would have to 
appropriate $15 billion to get to the 40 percent obligation.
  I don't want to create the illusion that I am solving that problem. 
We are just getting closer to it. We are at 12.7. We were at 7 percent. 
Then we started to inch up a little bit in terms of getting better. Now 
we are close to 13 percent, a far cry from 40, the $1.2 billion, and I 
don't have the number what it gets you to. I think probably another 
couple points, 2 or 3 percentage points, maybe 4 in terms of what that 
$1.2 billion spread out over 50 States would do. But at least it is tax 
relief.
  My friend says we do it for higher education. There is no property 
tax that supports higher education. There are State revenues that do 
it, but on a local basis that is not where it comes from. In the case 
of public elementary and secondary education, for the most part it is 
free. There are costs associated with educating a child. I know that. 
But I know very few public higher educational institutions that are 
free. Most of them are pretty expensive today. Some have a limited 
amount of cost, but for most of them, it is pretty expensive.
  Of course, you don't have to go to college. We would like everybody 
to. The law requires you go to elementary school and requires that you 
go to high school or at least stay in school until you are 16. For most 
States, I think that is true. But there is no requirement you go beyond 
that. So there is a distinction between what our obligations are to 
elementary and secondary education and what we try to achieve in higher 
education--obviously, a huge distinction in cost.
  Although I have disagreements with the underlying proposal offered by 
my friend from Georgia, I believe we are trying to be all places at the 
same time and, as a result of that, not doing much in any.
  My fundamental point is not so much to say this is not a good idea he 
has proposed but to say this is a better one. I don't know of a mayor 
in my State who hasn't asked me to do something about this issue for 
the last 10 years. When I go back, as I know all of our colleagues do, 
when I go back to them and say: What do you want me to work

[[Page 1699]]

on this year?--I think all of us do that probably in our December-
February periods; we go back and talk to the local officials who are 
close to our constituents in our States. I don't know of a year when 
this special education issue hasn't been in the top five of the items 
about which they say: Look, this is a tremendous cost to us. You 
mandated it, basically, at the Federal level in 1975. We don't disagree 
with you. We think we ought to provide educational opportunity for 
children with special needs in this country so they will maximize their 
potential. But you promised us, Mr. Senator, you were going to come up 
with 40 percent of the cost of this. You told us we have to do it. We 
agree with you. Now you are only up to 12 or 13 percent.
  Frankly, in a lot of States, it is around 5 percent, 9 percent. I 
don't have every State here because not every State gives us all the 
numbers. Looking down this list, as I mentioned earlier, California has 
a $3 billion higher education cost. The Federal Government comes up 
with 5 percent of that. So 12.7 is a national number, but individual 
States are very different. In Florida, it is 6 percent; that is the 
Federal participation. We are way short of the 40 percent.
  I don't see Oklahoma on this, for the benefit of the Presiding 
Officer, and I don't see Georgia. This is not a complete list of all 50 
States.
  As I mentioned earlier, some States are 13 percent; South Dakota is. 
Indiana is 17 percent; that is how much the Federal Government 
contributes to that price tag for special education. But an awful lot 
of States are at 5, 8, 7, and 4 percent--Nevada. Montana is at 14 
percent; Missouri, 10 percent. It varies from State to State as to how 
much the Federal dollars are getting back.
  My point is this: If you can't do everything, you have to make 
choices. What is the better choice: A new program that may or may not 
have the benefits its authors suggest, or to do something that every 
jurisdiction in this country, every taxpayer at the local level would 
appreciate and would dramatically, in some cases, reduce the cost of 
their financial obligations?
  I suggest the better choice is the amendment that is pending. It 
would take that $1.2 billion and send it back to Oklahoma, Connecticut, 
Georgia, Florida, California and say: This is a downpayment on that 
long-term commitment. We haven't reached it yet. We are doing better, 
but we are not there yet.
  I mentioned earlier, California has a $3.72 billion price tag on 
special ed. Florida has a $1.47 billion price tag on special ed. My 
State of Connecticut is $627 million. I have one small community, 
Torrington, CT, that has over $1 million in special education costs 
because we required it. In 1975, we said: We will educate all kids, 
including those with disabilities in this country. We want everybody to 
have at least the potential or the opportunity to maximize their 
potential. I don't know of a single person who wants us to retreat on 
that commitment.
  The point of my amendment is, don't retreat on it, but also don't 
renege. Don't renege on the contract. The contract was to our States 
and our communities and our counties. Your Federal Government will be a 
far better partner, and we will help you reduce that financial burden 
we imposed upon you in 1975 and have never gotten close to paying. The 
$1.2 billion gets us closer.
  What my friend from Georgia has offered is maybe a great idea--
maybe--although I have some disagreements, but I know what this does. I 
know $1.2 billion going back to the 50 States of this country will 
categorically and unequivocally provide relief for people.
  Mrs. BOXER. Will the Senator yield?
  Mr. DODD. I am happy to yield.
  Mrs. BOXER. First, I commend my friend because life in the Senate is 
about choices. I think what the Senator from Connecticut has done for 
this debate, in my opinion, is to have given us a very clear choice of 
how we want to proceed. We have known for, let's say, the last 20 years 
that there is not an endless cookie jar; we are going to have to make 
the tough choice.
  What the Senator from Connecticut is suggesting is this: We have a 
program that is vital to perhaps the children in this country who need 
more help than almost any other group, children who have special ed 
needs. We have not met our commitment; we haven't fulfilled our 
promise. So I would appreciate it if the Senator from Connecticut can 
tell me if I am right in sort of summing up where he is coming from. He 
has taken the floor and has not said everything in the pending bill is 
bad, not at all. I know personally he agrees strongly with a couple of 
things.
  Mr. DODD. What I have offered is an amendment to the Coverdell 
proposal, not a substitute. So I only address this particular issue. 
There are a number of other provisions in the bill that I think are 
admirable.
  Mrs. BOXER. Those provisions would still stand. What the Senator is 
basically saying is that the billion-plus would go to people who 
essentially, for the most part, send their kids to private schools, K 
through 12, and rather than give them this tax writeoff, if you will, 
we should use the money to fulfill our commitment for special 
education. That is the bottom line.
  I want to ask my friend two questions. I don't know if he spoke about 
the meeting with the Governors today, but if he has not, I think it 
would be an important point, since he spoke to many of us about this 
today--what the message of the Governors is vis-a-vis this special ed 
and what it would mean. He has already said what it means to my State 
to get more funding for special ed. We are in the hole now by several 
billion dollars. So this amendment is very important.
  The second question, perhaps, is a more philosophical one but one to 
which I would be interested in hearing an answer. I think if we are 
honest with ourselves, we know the people who could afford to set aside 
$2,000 a year in our society each and every year are the ones who are 
living or earning more than, shall we say, most middle-class people 
because we know the figures. If we are honest with ourselves, to set 
aside $2,000--and that is after-tax money--in an account where, by the 
way, you don't get any real tax benefit, except the buildup is not 
taxed, so it comes out to roughly a few dollars a year--who are we 
really helping? Are we helping 95 percent of public school kids? Are we 
doing one thing or are we giving a nice, sweet tax benefit to people 
who already can set aside the money? I think there are two questions. 
One, if my friend can talk about the Governors and how they feel on 
this issue of reimbursing the States for special ed; and, two, 
philosophically, what is going to help more families?
  Mr. DODD. Mr. President, I say to my friend from California that I 
did mention the Governors. The Governor of Maine stood up and made the 
point that this was the top priority, and I think it was one of the few 
moments when there was widespread applause in the room by colleagues, 
both Republicans and Democrats; there were a lot of nodding heads.
  Obviously, Governors have a long shopping list for us. If they could 
do one thing in the area of education, this was the issue. Tom Daschle 
raised it: ``Ironically, the next vote we are likely to have is on the 
issue you think is your top priority.''
  I talked with Governor Ridge of Pennsylvania afterwards, a 
Republican, and Democratic Governor Tom Carper of Delaware. Both said 
they are going to try to call members of the respective caucuses to 
urge them to vote for this amendment. They felt this would make a 
difference immediately for them. So I thank them. I thank the National 
Governors' Association. I don't have it with me, but I will get it. I 
have a year-old letter signed by Michael Leavitt, Governor Mike 
Huckabee of Arkansas, Tom Carper and Jim Hunt. It is a March 9, 1999, 
letter to Pete Domenici. I have blown it up. In part, it says:

       Therefore, Governors urge Congress to honor its original 
     commitment and fully fund 40 percent of Part B services as 
     authorized by IDEA so the goals of the act can be achieved.

  In the first paragraph, it says:

       As you prepare the budget resolution for the coming fiscal 
     year, the nation's Governors urge Congress to live up to 
     agreements already made to meet current funding

[[Page 1700]]

     commitments to States before funding new initiatives or tax 
     cuts in the Federal budget.

  So 50 State Governors say if you want to pick a priority, this is it. 
So, again, this isn't, as my friend from Georgia said--again, some may 
think you can do everything and probably will vote that way. If you 
can't--and hopefully you can do everything--then you have to make 
choices about where you should do some things.
  I am glad the Senator from California raised the issue about the 
buildup. I think that is important. The buildup is important. Under 
higher education--and I drew a distinction; I think there are 
significant distinctions between the choice of going on to higher 
education and the requirement that you go to grade school and high 
school, at least until the age of 16--the fact that public education, 
where 50 million kids go to school every day is free, whereas higher 
education is not free, whether it is public or private, and that you 
don't have a property tax supporting higher education as you do 
elementary and public education.
  When people are planning for college--not that they do it as early as 
they would like--they start putting that money away early, in some 
cases when the child is born, with full knowledge that a 4-year college 
education could end up costing $100,000 at many institutions in this 
country. So you end up with a buildup of $500 to $1,000 a year, and 
that is where it has value. You are not talking about a buildup in that 
regard, about kids who are young and starting out, I presume. What you 
are talking about is investing in, as I understand it, some tax-free 
withdrawals from this account for things like tuition fees, academic 
tutoring, books, room, board, supplies, equipment, and so forth. So it 
is going to public and private education.
  If you make $150,000 a year on joint returns, this is a pretty good 
benefit. If you are making $30,000 or $40,000, or less, it is not much 
at all. The Joint Committee on Taxation said this only had a marginal 
benefit to people. Also, the accounting practices; can you imagine the 
nightmare? You are going to be taxed if you buy some things and not 
taxed if you buy others.
  What about if it is sporting equipment to go to school; is that part 
of the education? What about the band outfit you may wear; is that 
education or not? I don't know. Maybe others feel certain they know 
what it is. I can see a nightmare of accounting procedures to try to 
determine what is truly an educational benefit and what is not quite an 
educational benefit.
  I will finish, and then I will yield to my colleague to respond. Of 
course, when you start getting into this whole point, as I said, 
benefits to public school children and their parents, at least based on 
the assessments we have, are marginal at best; $5 of tax relief a year, 
each year, for 5 years--or 4\1/2\ or 5 years--as opposed to doing 
something that lowers your property tax by sending the dollars back to 
reduce the cost of special education and local community--I promise you 
that is more than $5 a year; it is significantly more for people.
  Again, it is the choice I think we make. We all say we love to listen 
to our Governors. The Governors are in town. They met with the Senators 
about 3 hours ago. The Governors have said, virtually unanimously: If 
you want to do something to help us right away, here is the issue. They 
specifically said: Do this before you start off on new initiatives that 
may not benefit even the people you think you are going to benefit.
  I urge my colleagues to support this amendment. As I said earlier, it 
doesn't substitute the entire bill. It merely offers a substitute to 
the particular provisions on payment. The other parts of the bill 
remain. I think this is a much wiser choice to make. I say that with 
all due respect to my colleague from Georgia, with whom I work jointly 
on so many issues. I know he is anxious to respond. I think the Senator 
from Florida wants to be heard as well.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. Mr. President, as I understand it, the sequence of 
amendments is such that there will be a Republican amendment after the 
amendment by Senator Dodd, and then there will be a Democratic 
amendment by Senator Robb, and then another Republican amendment.
  I ask unanimous consent that I might offer the transition teaching 
amendment immediately after the Republican amendment, which will follow 
Senator Robb's amendment.
  Mr. DODD. Mr. President, if my colleague will withhold on that 
request, I know leadership has worked out a scheduling sequence. I 
don't want to object, but I would have to object right now without them 
getting involved. Why not make the comments and then come back?
  Mr. GRAHAM. Mr. President, I could offer this amendment with the 
understanding that if there is someone who needs to go ahead of me I 
would yield at that time. I was on the floor this morning and now this 
afternoon for purposes of trying to get in the queue.
  Mr. DODD. Mr. President, if the Senator will proceed and let me 
inquire, we will come back. I promise the Senator that I will take care 
of that right now.
  Mr. GRAHAM. I don't have any remarks to make on this amendment.
  The PRESIDING OFFICER. The Chair inquires, who is yielding time?
  Mr. DODD. I am happy to yield time off my time to my friend from 
Florida. I will inquire, if the Senator wants to go ahead.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, on our time, I see the Senator from 
California is still present. I don't know if the issue of who benefits 
and who doesn't was thoroughly covered. I don't know that this will 
make a difference in the Senator's vote, but I think it is important 
that her question be answered.
  First of all, the means test--and it is means tested as to who can 
participate in this, and I probably wouldn't have done it that way, but 
that is the politics of the day--is identical to the college account we 
have set, which means 70 percent of the benefits flow to people making 
$75,000 or less. It is the middle income and below who are the primary 
beneficiaries of the account.
  Mrs. BOXER. Mr. President, may I say to my friend I understand that 
completely. But that was for the analysis on the $500.
  Mr. COVERDELL. That is the analysis on this account.
  Mrs. BOXER. My understanding on the $2,000 is there are fewer people 
in that category who could participate; and therefore, it would not 
benefit the middle class.
  Mr. COVERDELL. The data I quoted is the data on the analysis of this 
account.
  Mrs. BOXER. Then we have some disagreement. But we will check our 
chart.
  I wanted to say on the issue of why this is different than the 
college account--I think Senator Dodd very eloquently made the point--
our side of the aisle has been pushing for a long time to help parents 
send their children to college, whether it is through Pell grants, 
loans, or education saving accounts for college. I remember way back 
during the days I was in the House I was supporting these education 
IRAs, but the point is that it is quite different now.
  To go to a public college in California costs $5,000, $6,000, or 
$7,000 a year. Fortunately, we have free public schools. What we are 
looking at here is quite a different situation.
  We know on the face of it that 95 percent of our children go to 
public schools. I know the Senator says this is going to help the 
public schools, but our research indicates this is disproportionate. We 
are talking about a couple of dollars in benefits. It comes down to a 
choice.
  If I had a menu of things, I am sure I would rank money higher on the 
menu of things, but it doesn't compare my money to the substitute, or 
to the amendment which keeps a lot of good in the Senator's bill. But 
it just says ``revenue lost'' instead of being dissipated in the $7 per 
family over a period of time--a year--and maybe adds up to $7. It would 
be much better to go to our States and help with special

[[Page 1701]]

education, whereas Senator Dodd says it means it is going to result in 
lower property taxes because our local school districts will benefit.
  Mr. COVERDELL. Will the Senator yield on that point?
  Mrs. BOXER. It is the time of the Senator from Georgia. Sure.
  Mr. COVERDELL. No one can certify that this is going to affect 
property taxes whatsoever. In fact, the doubling of IDEA, if you can 
find a jurisdiction that took this and lowered the property tax--I 
think you should listen--isn't what happened. I don't mean that we 
ought not to be fulfilling this obligation, but I have seen no example 
of the property tax being affected one way or the other as we fulfill 
this obligation.
  I think what happens is, as we fulfill the Federal obligation, which 
is rather remarkable--here we are 25 years later and still haven't done 
it--it theoretically frees up local school districts to do other things 
that are important in education. I find it interesting.
  The other point I was going to make to the Senator from California 
and to the Senator from Connecticut is they essentially inferred--and I 
can understand why--that the education savings account is different in 
a sense from the higher education and K through 12 because I think in 
the debate we have focused on K through 12. But there are extensive 
families benefitting from that. They ought to have the opportunity--the 
``choice''--to use those funds if they so desire. But these accounts 
are a college account, too.
  We have taken the President's proposal and the congressional proposal 
and made it four times more powerful. It can be used for college. It 
can be used for the disabled and for dependent students following 
college.
  My assumption is--we have to make some estimates--that many of these 
families will not use this in K through 12. Some will. But a large 
number of them will use the buildup where essentially it is broadening 
the scope of what people can do as they try to meet the very costs 
about which the Senator from California talks.
  Mrs. BOXER. May I ask my friend a question on this point because this 
is a good debate.
  What the Senator is essentially saying is somebody can open up one of 
these Coverdell plans.
  Mr. COVERDELL. They do not call them Coverdell plans. It sounds like 
a wonderful idea.
  Mrs. BOXER. Doesn't it sound great? I will give the Senator that. It 
is his idea. Come up with a Coverdell account, and they start it, say, 
when the child is first born. Then the child is 5. If this is for real, 
they start using it, but if it isn't for real, they will hold it. Who 
gets the tax benefit? Because they can afford to, they have another 
account for $2,000 for college. Now we are saying this is a family now 
setting aside $4,000 every year. I ask my friend.
  Mr. COVERDELL. No.
  Mrs. BOXER. Yes, because the Senator said there could be an addition 
to----
  Mr. COVERDELL. No.
  Mrs. BOXER. The college account.
  Mr. COVERDELL. No. What I am saying is that we broaden it from $500 
to $2,000. So an account can be opened for up to $2,000, whereas now it 
is limited to $500, A; and, B, if they chose, they could use a 
withdrawal somewhere through kindergarten through high school if that 
was important to them for whatever circumstance. They don't have to 
hold it for college.
  Mrs. BOXER. I don't understand. I am saying to my friend that it is a 
second bureaucracy, if you will--a new account that can be used for 
college in addition to the account we are looking at for college that 
we already have. I think it is getting confusing. I think if we want to 
let people set aside funds and get a tax break for college, this is 
crucial.
  I think at this point to expand this idea to get to K through 12, as 
Senator Dodd pointed out, if this is on the level and people start 
spending it when the child is 5, they essentially have 5 years to save, 
whereas what we are suggesting is that people can do much better. They 
can take that money and use it, say, long term for 18 years, have more 
of a buildup and have more of a fund.
  What I am fearful of, if we start with all of these, is that only the 
wealthiest people will be able to do it. They will do it for both. 
Again, we start rewarding the people in our society--God bless them, 
and I have nothing but respect for people who manage to make it. We are 
rewarding them and we are not doing a thing to help the average person.
  That gets me back to where Senator Dodd started with his amendment. 
If this is not going to do much for most of our kids--it is confusing, 
I agree. I started wondering--if they can get a band outfit, if that is 
workable, yes. I argue that is part of the school. Or a uniform? But, 
wait a minute, that is giving a benefit to one child. What about the 
kid who doesn't make the band? Then the IRS is going to have to confab 
and figure whether this is a discriminatory benefit. I think we are 
opening up a can of worms a little bit. I think Senator Dodd offers us 
a cleaner way to spend this $1.2 billion, which is to ease the burden 
on the local districts.
  I daresay it is only common sense. Our school boards have a certain 
amount of money. If they cannot meet their budgets, they are going to 
have to raise your taxes. Maybe this is going to help them. I assume it 
is going to help them. In California, we have a lid on our property 
tax, so this is a huge benefit for us because there is just so much we 
can raise in property taxes.
  Since we have a finite amount of money, I think the Senator from 
Connecticut is offering us a chance to step back and say let's not 
create a new program, which now I understand you could roll into a 
college account, which really gets me confused, and keep it simple and 
use this money for special ed.
  I thank my friend for being so generous in yielding to me. I thank my 
friend from Connecticut for, I think in many ways, bringing us back to 
what we have to do, and that is to make these hard choices. He is 
saying: Listen to what the Governors are saying. Let's take care of 
this problem first.
  Mr. COVERDELL. I would like to respond to the Senator from California 
by calling into play an individual for whom I know she has enormous 
respect, and that is the Vice President of the United States. He says:

       Our current education IRA's simply do not meet the needs of 
     the information age. They are limited to $500 a year.

  He is right.

       And it must be used by an age of 30. In a fast moving, fast 
     changing economy, the right skills will often cost more than 
     $500 a year and learning must last a lifetime.

  Then Vice President Gore goes on to say:

       Here is my idea. We need to create a new 401(j) account 
     like the 401(k) plans that help you save for retirement. But 
     this account will allow employers and employees to contribute 
     up to $2,500 a year. . .

  So he is $500 over what I am saying.

     . . . in order to pay for college or job training expenses.

  Mr. DODD. Is this for elementary and secondary education?
  Mr. COVERDELL. He says for college. We are for college. This account 
applies for college.
  Mrs. BOXER. Then scratch the other part of it.
  Mr. COVERDELL. Why should we do that? This is a classic example: 
Let's tell them what is important to them. You think it is important it 
only be for college. I think it ought to be up to the family to decide 
where and when they have a special need. Maybe they have a student who 
is in junior high school who suffers a very serious injury and they 
need assistance or they have a child who they discover has dyslexia. 
You do not deal with dyslexia when you are in college. You deal with it 
in the younger years. There are many problems associated with that.
  So let's let them decide. I think the majority of them will utilize 
these funds at college. But there will be occasions where families have 
requirements that occur before that. I can think of no reason why we 
should arbitrarily decide: I am sorry, that is a decision we have made 
for you.
  Mr. DODD. If I can respond to my friend?

[[Page 1702]]


  Mr. COVERDELL. I have no idea how they are dealing with the division 
of time. We are doing so well.
  Mr. DODD. This much I promise: If you run out of time, I will give 
you time. We know we have to finish at 4. I don't know if we will have 
a tremendous number of Senators coming over here. We will accommodate 
everybody wishing to be heard.
  What I have offered as a substitute, with all respect, has more 
value. Again, I think Governors, mayors, and local taxpayers will tell 
you right now the cost of special education is a dominant, significant 
issue we ought to try to take care of. I have not suggested, except 
peripherally, that there are underlying problems with the Coverdell 
approach. But I made the case, if you cannot do everything, of the two 
choices, which is a better one? I think the special ed is a better one. 
I say that. I realize there is a difference of opinion.
  But let me respond, if I can, to the issue, just freestanding, of the 
Coverdell proposal and why I have difficulty with that as it stands. 
There are 55 million children who got up this morning, from Maine to 
California, who went off to an elementary or secondary school in this 
country--55 million. Fifty million of them walked into a public 
school--50 million; 5 million walked into a private school or a 
parochial school. The question is, this bill as it stands is designed 
to predominantly provide a tax break for those who want to send their 
kids to private and parochial schools, and it is being cloaked that 
somehow this is great for education. You do not build a new classroom, 
you don't pay a teacher more, you don't reduce the size of the class, 
you don't wire the school with it, none of that stuff. This is all on 
an individual basis, where the bulk of it, 90 percent of it, goes to 
those who are in the income category who can afford to send their kids 
to private schools. We have 50 million kids and their parents who are 
looking to see whether or not we are going to take some of their tax 
money and improve the quality of education.
  They do not have the choice. They do not have the choice to say, I 
think I will send my kid to some private boarding school in Connecticut 
or Georgia or some other place. They do not have that kind of money to 
do that. Their kids have to go to public school. That is the choice 
they have. They want to know whether or not their Senators are going to 
do anything about improving the quality of the educational institution 
to which they have to send their kids.
  That is a big difference. You have limited money. You are going to 
take $1.2 billion of this, the bulk of which is going to go to those in 
the upper income category, and for those parents who do not have that 
choice, they get zilch out of this thing. My point is that is a bad 
idea, in my view, with limited resources. But aside from that, I think 
getting the money back to our communities, providing some real relief 
on special education is what is necessary.
  I have great respect--I am a product of parochial and private 
education. My parents could afford to do it. They sent me to those 
schools. That was a choice they made. I respect them for it. But they 
never thought they ought to get a tax break for doing so. They 
understood that. They also understood there is a fundamental commitment 
and relationship between this institution and setting the agenda to 
accomplish the national purpose in education, a fundamental 
responsibility to public education.
  The public has no other choices. I know people are upset with the 
quality of some of our public education institutions. I wish the 
newspapers and media covered good schools as well because there are an 
awful lot of good schools out there doing a terrific job providing a 
wonderful educational opportunity in the inner-city and rural America. 
But our obligation is to see to it that fundamentally we work on the 
quality of those institutions that are not doing quite as well.
  My view is this distracts, it is a distraction from the real business 
of supporting quality public schooling in this country. Aside from tax 
policy, which I think is questionable as well, and different choices we 
could make with it, there is an underlying problem.
  I ask unanimous consent the editorial in the Washington Post in its 
morning edition, its lead editorial today, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Washington Post, February 29, 2000]

                       School Choice for the Rich

       The Senate is to take up today a proposal to use the tax 
     code to provide public funds to private schools through the 
     back door. Most Democrats, led by the president, are rightly 
     resisting; the proposal is bad tax and educational policy 
     alike.
       The bill whose principal sponsors are Sens. Paul Coverdell 
     (R-Ga.) and Robert Torricelli (D-N.J.), would allow 
     households with annual incomes of as much as $150,000 to set 
     aside $2,000 a year per child in educational savings 
     accounts, the earnings on which would be tax-free. Parents 
     can already save this way for college; this would let them do 
     so to help pay elementary and high school expenses as well.
       Unlike some other pending tax cut proposals, the cost would 
     be relatively modest, in part because not that many families 
     could afford to take advantage of the measure. Almost all the 
     benefit would accrue to those with well above average incomes 
     and children in private--including sectarian--schools. The 
     revenue forgone would represent an indirect subsidy to such 
     schools.
       The president has vetoed similar legislation in the past, 
     and the Office of Management and Budget has indicated he is 
     prepared to do so again. We hope he's spared the need. Some 
     Senate Democrats think the veto threat lets them off the 
     hook. Rather than be the heavies who block an education bill 
     and tax cut, if given the chance to debate some education 
     proposals of their own they'll let the measure pass, secure 
     in the knowledge the president will block it for them down 
     the road. But that's too stagy a way to legislate. If 
     Congress wants to spend money on education, it should be on 
     needier children; if it wants to promote school choice, the 
     debate should center on helping parents who do not, by virtue 
     of their income, have any such choice now. Lawmakers should 
     kill this while they've got the chance.

  Mr. DODD. It is entitled, ``School Choice for the Rich.''

       The Senate is to take up today a proposal to use the tax 
     code to provide public funds to private schools through the 
     back door.

  Fifty million kids and their parents are asking the question: What 
are you doing about my kids' school? I understand 5 million kids whose 
parents would like us to do something about tax relief for them if they 
go to private schools, but I think we have a higher obligation to the 
parents of those 50 million who have no choice. Those who made the 
choice of going to private school made that choice. I respect it, but 
the parents who send their kids to public schools are not, 
unfortunately, in the same category.
  Mrs. BOXER. If the Senator will yield, I want to say to my friend, 
his education was very good. I went to public schools from kindergarten 
all the way through college. Even in college it only cost, in those 
days, $12 a semester in the State of New York university system. What 
an amazing thing.
  We had several people wind up going to Congress from that public 
education system. So in my heart I understand when my friend from 
Connecticut says we have an obligation to the 50 million children who 
walk into those public schools every day--5 million go to the parochial 
school, 55 million in all--but we have an obligation in the public 
school arena.
  It gets down to yet another choice. The Senator from Connecticut has 
given us a choice between a tax break that is predominantly going to go 
to the wealthiest, that is going to be very minimal, and special 
education. That is the choice he has laid out.
  My friend also will win my vote, frankly, if he took that $1.2 
billion and put it into school construction or put it into more 
afterschool slots or early education, early childhood development, 
preschool, and child care in which my friend has been so involved. We 
are looking to bring home a very important choice.
  The Governors said: Here is the choice, Senators; before you take 
care of any other new programs and new bureaucracies, take care of 
special ed. My friend from Connecticut is listening to them and doing 
that, and he is further saying that before we do any of these

[[Page 1703]]

newfangled accounts, which will be interpreted and reinterpreted by IRS 
agents up and down the line and may be very confusing, let's take care 
of our public schools.
  What I am saying is, not only will I support the amendment of the 
Senator from Connecticut, but I will also support amendments to come 
that will take this money and put it into lower class sizes, to do some 
new construction, to train our teachers better, to get technology in 
the schools, to make sure we have room for every child who wants 
afterschool care which we know is the best crimefighting program 
around.
  I thank my friend for coming today. His voice on this issue is very 
important, but I think on this one, with his interest in education and 
his views of concern about it and his success in it, I hope the Senate 
will listen to the Senator from Connecticut and do first things first: 
Take care of our public school kids--that is 95 percent of our kids K 
through 12--before we set up some newfangled ideas on which there is 
even debate over the facts as to who it helps.
  The Senator has a paper that says to me it is only going to help the 
very wealthy. Senator Coverdell says it helps if one makes $75,000. 
Common sense tells me if we start setting aside $2,000 a year, it 
``ain't'' going to be my working-class people who are going to do that, 
I can tell you right now. They tell me they can barely make ends meet. 
I know what this is about.
  I thank my friend for bringing more clarity to the debate. I will be 
supporting him.
  Mr. DODD. I yield.
  The PRESIDING OFFICER (Mr. Hagel). The Senator from Georgia.
  Mr. COVERDELL. Mr. President, I wish to clarify a point, if I can 
have the attention of the Senator from Connecticut, because I know how 
these things happen. We have been in touch with Governor Ridge. He does 
support education savings accounts and would not support an amendment 
that made that point moot. I know the Senator was at a meeting--he 
certainly supports the funding of IDEA. I did want to make it clear 
that he does support the education savings account, so we can clarify 
that one point.
  Mr. DODD. I attended the Governors' meeting earlier today, and 
Governor Ridge said he would be glad to help out and try to convince 
people to vote for the amendment. I say to the Senator, with all due 
respect, I am also quite confident Vice President Gore does not support 
the Coverdell legislation, if there is any doubt about that at all.
  Mr. COVERDELL. I thank the Senator from Connecticut. I yield 15 
minutes to my defiant, dedicated, committed cosponsor from the other 
side of the aisle--I admire his courage on this issue--Senator 
Torricelli of New Jersey.
  Mr. TORRICELLI. Mr. President, I thank Senator Coverdell for not only 
yielding me this time but more than that, for, through these last few 
years, framing this debate and tirelessly bringing this issue forward. 
This is not the first time, it is not the second time, it may not be 
the third time Senator Coverdell and I have come to the Senate floor 
for A+ savings accounts and, most assuredly, it will not be the last. 
This is going to happen.
  More than simply telling the Senate of the inevitability of these 
savings accounts, I want us all to recognize what a positive 
contribution we are making to American education.
  I rise in opposition to Senator Dodd's amendment. Indeed, on another 
day, another opportunity, I not only would vote for it, I would fight 
for it, as I would with Senator Robb's amendment dealing with the 
building of new schools, and Senator Murray's amendment adding new 
teachers and reducing class size.
  The problems of American education are not such that they require a 
single idea or one change. This is not a system with which we need to 
tinker. We have compound problems. The one Senator Dodd raises is among 
the most important. We gave an obligation to local schools without the 
resources to pay for special education. Senator Robb's amendment and 
Senator Murray's amendment are important in building schools that are 
crumbling around us in some communities and adding new teachers. They 
are good ideas, they are important ideas, but so is this.
  For as long as I can remember, the formula for funding American 
schools has been quite simple: We raise your taxes, and we spend your 
dollars. That will continue to dominate American education. It is the 
right formula. We are adding something new, though not a novel idea. 
Indeed, ironically the source of this idea is President Clinton. In 
establishing higher education savings accounts of $500, he laid the 
foundation for what we debate today because what was a good idea for 
higher education at $500 is a great idea for secondary schools at 
$2,000. Same idea, same formula with the same end.
  This is using private money. It is using a family's own resources. By 
our estimation, after 5 years, $12 billion in private money will be 
used to educate children K through 12. That cannot be a bad thing. Yet 
the critics argue it is a diversion of money from the public schools. 
Not one dime of money that is now going to a public school goes 
anywhere else but to that same school on that same basis. This is new 
money, private money, a net increase of $12 billion.
  People argue that maybe it is all new money, but it goes to a 
privileged few. The Congressional Budget Office argues that 70 percent 
of this money will be spent by families who earn less than $70,000. 
Does this solve the educational problems of a family in poverty who may 
have no money? Maybe not. Probably not. I challenge any Member of this 
Senate to come to this floor and tell me one educational idea that 
solves the educational problems of every family in every regard forever 
with one bill. This one does not either, but it does help many working 
families, working poor, middle-class families.
  The family who earns $20,000, $30,000, $50,000, even $70,000 a year 
but wants to give their child some extra advantage in education, they 
want to establish a private savings account. Why should the Federal 
Government be charging taxes on the interest on that account? Every 
Member of this Senate knows that education is the great test of whether 
or not we preserve our quality of life, our national security, our way 
of life.
  The Federal Government should be doing everything it can to encourage 
every parent in America to save every dollar they can muster to educate 
their child. Taxing that money is the last thing we should be doing. 
That is the essence of this bill: Eliminate Federal taxes on money 
saved for education. That cannot be a bad idea. Yet it is argued that 
maybe it is private money and there is no diversion. Maybe Senators are 
right about that. Maybe it does go to middle-class and working-class 
families. Maybe Senators are right about that. It is argued that it is 
not for a privileged few but it all does go to private schools and we 
have a public and private school problem. Well, wrong again.
  CBO estimates that 70 percent of this money actually will go to 
public school students. Public school students are over 90 percent of 
the students in America. If we are going to help everybody, by 
definition, most of that money will go to public school students. That 
is what the research has found because this money is not just available 
for private school tuition. This money is available to hire public 
school teachers after public school is out in the afternoon to help 
students in math and science--something desperately needed by many of 
our families--for afterschool transportation, for afterschool 
activities of band or athletics or clubs, to buy a home computer, to 
buy books or, if you do not use money for any of these things, to roll 
it into your college account after the 12th grade when the student is 
going into college.
  Is some of this money going for private school tuition? Yes, a 
minority of it, 30 percent of it. Some does go to private school 
tuition. I am not here to apologize for that. If, in one piece of 
legislation, we can add $12 billion to the national expenditure for 
schools, help public school students with 70 percent of this money--for 
computers and

[[Page 1704]]

books and tutors--I do not rise on this floor to apologize that some of 
this will go to private schools, yeshivas, or parochial schools for 
tuition.
  In many of our cities, the Catholic school is the only alternative 
available to many families who want something better for their child. 
Tuition can be $800, $700, $1,200--out of reach for many families. Who 
is going to these schools? What is this ``idle rich'' we hear about who 
will benefit from this bill? Ninety percent of the students in Camden 
and Newark and Jersey City going to parochial schools are Protestants; 
80 percent of them are African American. This is not a religious 
opportunity. It is a competitive school, a chance for a parent to give 
something else to their child.
  We do not ask the Federal Government to pay for it--not a dime, no 
public money. Personally, I do not believe in it. I think it is 
unconstitutional. I do not think public money can or should go directly 
to pay for tuitions in religious institutions. That is my belief. That 
is why I am for this bill because this bill does not do that--no public 
money. A family takes their own money, earned off the sweat of their 
own brow, puts it in a private account, and uses that money, which has 
not been taxed because of this legislation, and pays tuition. That 
cannot be a bad thing.
  Opposition to this legislation has many aspects. In my judgment, 
clearly, one of them is that we do not recognize the true depths of the 
problem of American education. Getting more teachers, building more 
schools, higher standards for public schools are all part of that, but 
that is not enough. This is a fight that must be fought on every front 
simultaneously.
  Second, I think many people simply do not recognize the state we 
would be in if we did not have private schools. We are losing a 
Catholic school in America every week with another school closing its 
doors. If we lose the parochial education system in America, it will 
cost $16 billion immediately to replace the system. The system must 
survive within constitutional bounds. That is what Senator Coverdell 
and I are attempting to do with this legislation.
  Third, I think there is a partisan issue. With all respect to my 
friend, Senator Coverdell and his colleagues, in my personal judgment, 
the leadership in America on education for the last generation has been 
borne by the Democratic Party. We created the programs for grants, for 
tuition assistance, for aid to secondary schools that built libraries, 
built schools, and opened opportunities. It is one of the reasons why I 
am a Democrat. Now we have a little competition; frankly, not a lot.
  The ideas are still overwhelmingly from the Democratic Party. But 
this idea cannot be bad simply because some Republicans are for it. 
That is the only argument I have heard against it. If there is going to 
be a competition between the Democratic and Republican Parties for 
leadership on education, that is good for America. If we are going to 
compete to convince the American people that each of us has the best 
formula for improving our schools, that is good for every child in 
America.
  To the Republican Party, I say: Welcome to the fight. We have been 
waiting for you for a long time. But I am glad you are here.
  This concept of A+ savings accounts has no parentage on a partisan 
basis. It is borne of Bill Clinton's concept for funding higher 
education. It has been adjusted by Senator Coverdell, imaginatively, 
creatively, and effectively, to deal with the problems of grade schools 
and high schools, to help public and private schools with millions of 
American families.
  I have been for this concept since I came to the Senate. It is a 
reflection of my own belief that the American standard of living is not 
sustainable if we do not dramatically improve the quality of 
instruction and the performance of our students in this generation. It 
is not difficult to comprehend, if the United States goes another 
decade being 16th of the leading 18 industrial nations in the quality 
of math and science instruction, if 40 percent of 4th graders 
effectively cannot read to national standards, if a third of our 
students in the 8th grade cannot meet basic science requirements, this 
Nation will not continue to maintain our standard of living or even our 
current level of national security.
  Education is the great divider in the world, between the insecure and 
the poor and the wanting and those who exercise leadership and live 
behind secure borders with rising standards of living. That is our 
test. I can think of no more important issue for this Senate to debate.
  I genuinely hope that not only will this A+ savings account 
legislation pass the Senate--and I have no doubt it will pass the 
Senate--I genuinely hope we will pass it on a bipartisan basis. But in 
a challenge to Republican leadership, as well, the argument that 
Senator Dodd makes today for funding special education, and the 
argument that Senator Murray and Senator Robb will make on class size 
and school construction, are arguments that not only must be heard, it 
is legislation that must be adopted.
  Pass this legislation today and then let us return and complete the 
debate and meet our obligation to America's schoolchildren.
  Mr. President, I yield the floor.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. How much time remains on the amendment?
  The PRESIDING OFFICER. The Senator from Connecticut has 18 minutes 
remaining. The Senator from Georgia has 13 minutes remaining.
  Mr. DODD. There are only two of us here, so I suspect we can manage 
this in some way if one or the other of us ends up a little short of 
time.
  First of all, my friend from New Jersey has raised, as he always 
does, some compelling arguments. He is a very persuasive debater. I 
agree with him on a couple points. I think, first of all, maybe I 
should have said this at the outset of the debate, that I adhere to the 
admonition that Thomas Jefferson gave almost 200 years ago: Any nation 
that expects to be ignorant and free expects what never was and never 
possibly can be.
  As important as education was to the development of the 19th century, 
it certainly is just as important now a few days into the 21st century. 
No issue will be more important for the development and continued 
success of our own country than to have a very successful educational 
system in our Nation. So I agree Senator Torricelli on that point.
  My point is, I do not think we can do everything. That is my point. I 
would like to do a lot of things, but my concern is we have $1.2 
billion in this program. If I have $1.2 billion for special ed, it does 
not even remotely get close to the 40 percent we promised our States we 
would give them for special education. We need $15.8 billion to get to 
40 percent level.
  I have to think, if we are going to do something about the quality of 
public education--my friend from New Jersey has raised class size, 
salaries for teachers, luring teachers into rural or urban areas where 
they are needed, afterschool programs that are critical, early 
childhood education, Head Start--there are a variety of things that all 
of us would say are absolutely essential if you are going to improve 
the quality of our public educational system. Why does this idea, why 
does the idea of providing some tax incentives for people have any real 
appeal? It is because people are concerned about the quality of public 
education in too many places.
  If they felt there were good public schools, then they wouldn't be 
asking for the kind of suggestion that is being proposed in this bill. 
Their desire for that is rooted in the notion, somehow, that our public 
education is not doing very well in many places.
  So what is our choice here? We take limited resources. We take a 
dollar, and we decide we will divide it up. And so instead of focusing 
on what needs to be done with the 7 cents we provide in education out 
of every dollar from the Federal level, instead of saying let's see 
what we can do to improve the structures themselves, the buildings,

[[Page 1705]]

how we can wire schools so they are able to connect with the 
technologies of the 21st century, my concern is that we are taking $1.2 
billion in effect off the table for a proposal that has marginal 
benefit.
  I say again to my friends, the authors of this legislation, people 
making $25,000, $30,000, $35,000, $40,000 a year, if they have two or 
three kids, they can't put aside $4,000, $5,000, $6,000, $7,000 in 
these accounts. It doesn't work out that way. It is hard enough to make 
ends meet. The idea that they are going to put $2,000 per child in an 
IRA account is not realistic for them. They could put something in 
there, but the idea that they are going to get this tax benefit because 
people will maximize, that doesn't add up in my view.
  I do think there is a clear distinction between higher education and 
elementary and secondary education. Again, schools at the elementary 
and secondary level that are private or parochial select who they want. 
You may think you have the choice, but ultimately it is theirs whether 
you go or not. A public school doesn't have that luxury. If you are a 
child who lives in a community and you show up at the door, they have 
to take you in whether they like you or not.
  You show up at a private school, and the private school can say: You 
are not a nice family, nice people. I am sorry. We are not going to 
select you.
  So there is a distinction in a sense. Our public schools must take 
everybody. The 50 million kids this morning who showed up at their 
doors have to be educated. We know too many children are not getting 
the quality of education they deserve. They are going to school in 
buildings that are falling down. They have textbooks and equipment that 
is antiquated. They have teachers who are not necessarily the best. 
Further, the salaries are significantly different from community to 
community in too many States. Maybe we can go around and set up private 
schools all over the place and say to the 50 million children presently 
attending public schools: We have a structure you can move into. You 
can't do that. Fifty million are not going to fit in the places where 5 
million students presently are.
  It seems to me we are not left with many choices. We have to improve 
public education. We have no other choice but to do that. We have no 
alternative. We must do that. With limited resources, is it not wiser 
to take these scarce resources and put them into special education 
accounts that would lower the property taxes; or at least allow our 
school boards at the local level to decide they will take the money 
that goes to pay for that special needs child for fixing up that 
school, for afterschool programs; or lower the taxes and allow parents 
then to have more money in their pocket to do some of the things my 
friends from Georgia and New Jersey would like to give them the option 
of doing. Then they could do whatever they want with it.
  That seems to provide a greater benefit to all people, not just the 
ones who are selected to go to a private or parochial school, but all 
students. That is a better choice, if there are indeed limited 
resources.
  I say to my good friend from New Jersey, I know he made an appeal to 
our Republican friends to support the Robb amendment and the Murray 
amendment. But just as he asserts that this amendment is going to be 
rejected and this underlying bill passed, I am fairly confident the 
Robb and the Murray and other offered amendments are going to be 
defeated when it comes time to do something on school construction and 
afterschool programs and the like.
  Part of the argument will be, we can't afford to do everything. They 
are right. You can't do everything. So my choice is--I presume I may be 
in the minority on this--my choice is to take the $1.2 billion, give it 
back to the States, give it back to the localities. Give it back to 
them so they can reduce their costs on special education. One out of 
every 10 children in this country is a special needs child in our 
public school system--1 out of every 10. In my State, 14 percent of all 
students receive special education services.
  These problems are growing. The cost is growing. In some of my 
communities in Connecticut, the cost of providing special education is 
more than $50,000 per year. Eighty-two percent of that cost is being 
borne by the local property taxpayer. We promised that community and 
that family we would pick up 40 percent of that $50,000.
  I say to my good friends, the authors of this proposal before us, you 
cannot tell me with certainty what is going to happen if this 
legislation is passed. This is a new proposal.
  With higher education, you have a choice. Higher education doesn't 
have a property tax base to support it. Higher education costs, at a 
minimum $5, $6, $7 thousand per year in my State. However, the public 
schools at the elementary and secondary level are free in Connecticut, 
as they are across the country.
  So here it seems to me, with limited resources, are the choices we 
have to make, painful as they are, where all the ideas have some merit. 
I shared earlier today the letter I received 2 days ago from the 
National School Boards Association begging for us to offer this 
amendment. These are not Democrats, Republicans, conservatives, 
liberals. These are people at every school board across the country who 
are saying: Please do something about this. Please do something about 
this.
  I am offering my colleagues this afternoon a chance to do that when 
we vote on this amendment.
  I have already noted the letter from the National School Boards 
Association, dated February 23:

       Rather than create a tax benefit for a select few, applying 
     these funds to special education would benefit more taxpayers 
     and public schools.

  That is not from a think tank. That is from the National School 
Boards Association letter of 3 days ago. That is the choice they would 
like us to make. These are the people who wrestle with education 
issues, not once in a while on the floor of the Senate, but every 
single day in every community across this country. They have said, this 
is our choice.
  The question is, are we on their side, or are we on the side of an 
alternative form of education which, frankly, has some value in some 
people's minds, but 50 million kids don't have the choice. This is 
where they have to go to school, and we have to address those problems. 
We can run, but we can't hide. Either we do it, or it gets worse each 
year. The costs continue to go up.
  If you can't do everything, I think this amendment offers a better 
idea. The National School Boards thinks it is a better idea. The 
National Governors' Association, Republicans and Democrats, unanimously 
think it is a good idea. I hope this afternoon my colleagues will agree 
with them.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. TORRICELLI. Mr. President, I believe, indeed, this debate is 
helpful in narrowing some of these issues. As I think I have attested, 
I also believe Senator Dodd has a good idea, an idea that should be 
adopted. It simply is not an alternative to this idea.
  Let me suggest to my colleagues where Senator Dodd and I have common 
agreement and where we have differences. Senator Dodd has made the 
point that most families could not afford to put the $2,000 in a 
savings account to pay for their public or private school education. I 
agree. It is critical to this concept that this $2,000 savings account 
does not rest solely on the shoulders of the mother or the father. I 
remember--I am not so young I cannot recall--a time when in an American 
community, the education of a child was generally an involvement of the 
larger community. It wasn't just a single mother or the father. These 
accounts are an opportunity to re-ignite that sense of involvement. We 
allow the extended family--grandparents, aunts, uncles, churches, labor 
unions, corporations--to put money into these accounts.
  Senator Dodd is right that few families will be able to put $2,000 in 
these accounts per year. But a lot of labor unions can go to their 
employers and say: We would like a little raise next year and we want 
money in the savings account. A lot of churches will be able

[[Page 1706]]

to go to the parishioners and say: Thanks for giving to the church. We 
would like to help Johnny or Jane with their education savings 
accounts. A lot of parents can go to grandparents and say: At 
Christmas, instead of that toy, would you put $100 into the education 
savings accounts?
  This is under the concept that educating a child is everybody's 
business. Even then, can we get $2,000 a year? Maybe not. But if upon 
the birth of a child we can get $500 or $700 and compound it, with tax-
free interest, year in and year out, by the time that child is going to 
the eighth or ninth grade and needs a tutor after school because he or 
she doesn't understand the math assignment, they can afford it. By the 
time they are in the sixth grade and they can't afford to buy a 
computer, with this they could afford one. By the time they go to 
college, if they have spent none of this money and for 18 years they 
have been saving $200, $500, or $700, at compound interest, it would be 
significant. Does it pay for a Harvard education? No, but it gets them 
into the community college or a State school or it pays for part of the 
education. It helps. It is valuable.
  More than just dollars is involved; it creates the concept of the 
community being involved, having the vehicle of these accounts. It is 
no coincidence that when Senator Coverdell and I offered these 
accounts, the House sponsor was not some conservative Republican from 
the Deep South, with all due respect to my Southern colleagues from the 
Republican Party; it was Floyd Flake, a minister, African American, 
from Queens, NY, who has had the philosophy of the government that: I 
will take care of my own community; just get out of my way--if I may 
paraphrase him. He has a charter school; he started it himself. He 
would like people to be able to have these accounts to pay for some of 
the extra costs.
  That goes to the second point Senator Dodd made. We agreed on the 
first--everybody doesn't have $2,000. We disagree on the second. 
Senator Dodd said public school is free. It was when Senator Dodd and I 
went to school. It isn't anymore. How many parents tonight face their 
children who come home and say: I would like to be part of the band or 
the Latin Club or the French Club and it costs $500. Can I do that, 
mom?
  What we built in the fifties and sixties in this extraordinary public 
education, funding all these tremendous activities, we have eroded. I 
represent communities in New Jersey where you can't get a bus home 
after school if you don't pay for it. You can't join the football team. 
Some of the books are so old, parents have to buy them themselves. 
These education savings accounts go to the heart of that problem. 
Public school is not free. Sixty percent of the African American 
students in our public schools don't have access to a computer. It is 
the new divide in American education. That includes 70 percent of 
Hispanic students and millions of other students from all backgrounds.
  Why? What is so wrong if we allow a parent to take their own hard-
earned money and put it in their own account? All we ask the Federal 
Government to do--my God, the minimum we can ask anybody to do--is not 
tax them on the interest. Let them keep the interest so a parent can 
buy their child something, so they can maximize. I visit public schools 
throughout New Jersey where children are struggling with math, science, 
and areas that were never approached when I was in high school. They 
struggle. It is hard. If you ask them the one thing they can get more 
out of public school, they will tell you: I wish there was somebody 
after school to help me with my work--a tutor.
  Instead, our public school teachers, who are underpaid and 
overworked, leave school at 3:30 or 4 o'clock and take second jobs 
selling clothing, painting houses--anything to support their own 
families. How about an education savings account, where at the end of 
the day the public school teacher can work for some extra dollars doing 
what they do best--teaching, tutoring, helping public school students 
learn the math and science with which they struggle.
  No, public school is not free. And $2,000 is a lot for most families. 
We could be wrong. Senator Coverdell and I could be wrong. We could 
offer this chance to every labor union, church, and grandparent in 
America to help with their kids' education by putting money in every 
birthday, holiday, or Christmas, and maybe nobody will answer. But I 
don't believe that. That is not the kind of people we are. That is not 
the kind of communities I represent. I think people will answer. I 
think Floyd Flake is right. Every Member of the Senate talks about 
faith-based answers to problems, working hand in hand with the 
Government. Well, let's see. I bet the grandparents, aunts and uncles, 
labor unions, churches, and synagogues will come forward and use these 
accounts as a vehicle. But mostly, I don't want to fail because we 
didn't ask. This is an invitation to America to get back in your public 
or private school, get involved and solve the problem.
  I believe these are worthwhile. Senator Dodd may be right that this 
institution doesn't have the will or the resources to answer this 
problem and the special education problem and the school construction 
problem. If this country doesn't have the will or resources to deal 
with those problems, we are headed for real trouble. I believe we have 
the will, and I certainly believe we have the resources--not 
expenditures, not a dime of it, but investments, every single dollar in 
every investment for building a school or hiring a teacher. I will 
fight every day for every one of those things.
  Today is the Coverdell-Torricelli legislation for private savings 
accounts to fund public and private schools. I am proud to be part of 
it. I yield to Senator Coverdell.
  Mr. COVERDELL. I am most appreciative of the extended effort on the 
part of the Senator from New Jersey, who brings a very powerful 
perspective to this debate.
  The Senator from Connecticut is correct that we are constantly 
confronted with choices. I think this is a bad example, though, or 
choice of that kind of trade. What I mean is, first of all, I believe 
IDEA will receive added benefits this year. It has received nearly $3 
billion in the last 4 years over and above the President's request. So 
there is a body here that agrees with those Governors and with you that 
this is a high priority.
  The problem with the Senator's amendment is when it moves against the 
savings accounts, it blows away $12 billion. There are choices. You 
could say, well, we will spend $1.2 billion here instead of $1.2 
billion over there. But by the nature of this legislation, this savings 
account involves 14 million families--20 million of those 55 million 
you are talking about--3 million or 4 million of them are in private 
schools, but 11 million of these children are in public schools that 
will benefit from these accounts.
  The Senator's amendment takes that resource, which comes forward as a 
voluntary action on the part of families and communities, churches, 
synagogues, labor unions, and employers and shuts it down. That is not 
a good trade. Trading $1.2 billion and losing $12 billion is not a good 
trade. There may be a place where your choice is appropriate, but I 
don't believe it is where you blow away all that benefit, which this 
does.
  It has been characterized that private schools are the chief 
beneficiary, and that is not the case. Several on the floor have 
characterized parochial schools as a ``haven for the wealthy.'' Listen, 
the children attending parochial schools today are within 10 percent of 
the same children attending public schools, and they are from families 
earning $40,000 or $50,000.
  These are not a bunch of wealthy folks. The demographics in the New 
York school system are virtually identical between the public system 
and the parochial system. So it is not like somebody who happens to be 
in a parochial school and drives up to school in a long, black 
limousine and a guy in knickers gets out. These are minorities. They 
are Hispanic. They are African Americans. They are average folks. I 
don't know why they are there. The public systems ought to be mighty 
glad

[[Page 1707]]

it is there because it works both ways. The Senator is right. That 
system couldn't accept the public system, and it never will. 
Conversely, close it down and you make new problems for the public 
system because those people are paying property taxes even though their 
children are in the parochial system.
  The point I am trying to make is that the public system will be a 
major benefactor. It is not a minor player. The choice the Senator is 
asking us to make is not $1.2 billion here or $1.2 billion there. It is 
$1.2 billion here or no $12 billion. Of that $12 billion, $6 billion is 
going to go into public schools over the next 10 years and $6 billion 
is going to go into private, or home, or whatever. Those are major 
dollars.
  When the Senator from California and others talk about the benefit, 
they don't mention the principal. That is the point. That is how you 
get up to the $12 billion. The Senator is right. It is not a lot of 
relief that the Federal Government is giving. What is amazing to me is 
how little it takes to cause these families to do so much.
  Mr. President, I ask unanimous consent that Senator Bunning be added 
as a cosponsor to the Collins amendment No. 2854.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Connecticut.
  Mr. DODD. Mr. President, if my colleague from Georgia needs another 
minute or two to make concluding remarks, I will be happy to yield my 
time, or if the Senator from New Jersey would care to be heard.
  My colleagues conveniently use numbers which, obviously, sound 
beneficial to their argument. The fact is, according to the Joint Tax 
Committee, which analyzed this proposal, if you are the family of a 
child in a public school, the tax benefit to you over 5 years is 
$20.50. That is the tax benefit to a family whose child is in a public 
school. Is it worth taking that much off the table in the name of 
education and providing tax relief which is so nominal it is hardly 
worth mentioning?

       You can make a case. You have heard it over the years. 
     Businesses say: If you will give me this tax break, it will 
     leverage this much more in private capital. The fact is, you 
     still have to have a tax break. It is revenue lost.

  We have come a long way in the last 7 or 8 years. We have a surplus 
for the first time in the last few years. We are actually on track to 
eliminating the national debt. The idea that we can just take $1.2 
billion off the table is a flawed idea. Even if you accept the point of 
my colleagues and leverage private dollars, it may generate some of 
this activity they are talking about, but the fact is, it is $1.2 
billion. It is rolling the dice, in effect.
  I have suggested that there is $1.2 billion that could be used to 
defray the cost of special education. I know that amount would ease the 
burden on our school districts. As my colleagues well know, you take 
$1.2 billion and put it in this program, then you will come and say: 
Let's do something on special education. What about school 
construction? What about teacher salaries and smaller class sizes? 
Those are things we know we need to improve the quality of public 
education in this country. Those dollars become harder and harder to 
come by as we take more and more dollars off the table.
  Unless you accept the notion we are going to accept everybody's idea 
on how to improve the quality of public education--which we are not and 
we have limited resources--the people who pay the taxes in this country 
that come into the general revenue of the Treasury know full well we 
can't spend their money on everything. Parents of 50 million kids have 
said to us: Improve the quality of public education and reduce the cost 
of special education. One certain way of doing that is by freeing up 
dollars at the local level, or reducing taxes for that local property 
taxpayer. I guarantee you that benefit is more than $20.50. If you are 
a parent of a public school child, and you get the kind of special 
education relief I offered, there is more tax relief for that taxpayer 
and that community than the $20.50 you are going to get if the 
Coverdell legislation is adopted.
  I respect my colleagues from Georgia and New Jersey, but I come back 
to the point I made a moment ago. People who have children in public 
schools recognize that we have no choice but to try to make this system 
better. We have to do it or we are going to pay an awful price later 
this century. We are not going to have the kind of well-educated, 
productive citizens that we need.
  I am hopeful my colleagues will recognize that the idea of reducing 
the cost of special education is something we can do something about 
today. In a few minutes we will have a chance to vote on this.
  Mr. President, I ask unanimous consent that Senators Reed, Harkin, 
Dorgan, Reid of Nevada, and Kennedy be added as cosponsors of this 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, I yield the floor.
  Mr. COVERDELL. Mr. President, how much time do we have between us?
  The PRESIDING OFFICER. One minute 40 seconds.
  Mr. DODD. Mr. President, I yield 1 minute 40 seconds to my colleague 
from Georgia.
  Mr. COVERDELL. Mr. President, I graciously accept it. I will make a 
motion in 1 minute 40 seconds calling for a point of order against the 
amendment. The Senator from Connecticut knows that.
  I guess it is all in the eyes of the beholder. An insignificant 
number of people will be beneficiaries. That insignificant number is 14 
million families and 20 million children, and an individual family can 
expect only $20 worth of interest-free benefits.
  But the point is, that, nevertheless, no matter what it is, if it is 
a quarter, it causes them to save $12 billion, whatever it is. It is 
$12 billion of new money flowing into both public and private 
education. That is not insignificant. Everett Dirksen said, ``A billion 
here and a billion there, and before long it is real money.'' Twelve 
billion dollars is real money. It would be controlled by America's 
families to help them with the very special and unique needs that their 
children have through these education savings accounts.
  The pending amendment, No. 2857, offered by the Senator from 
Connecticut, Mr. Dodd, increases mandatory spending by $1.2 billion, 
and, if adopted, would cause the underlying bill to exceed the 
committee's section 302(a) allocation. Therefore, I raise a point of 
order against the amendment pursuant to section 302(f) of the 
Congressional Budget Act of 1974.
  Mr. DODD. Mr. President, I move to waive the relevant portions of the 
Budget Act.
  I ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. L. Chafee). Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion to waive the Budget Act in 
relation to the Dodd amendment No. 2857. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) 
and the Senator from Alaska (Mr. Murkowski) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The yeas and nays resulted--yeas 44, nays 54, as follows:

                      [Rollcall Vote No. 15 Leg.]

                                YEAS--44

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Bryan
     Chafee, L.
     Cleland
     Collins
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Wellstone
     Wyden

                                NAYS--54

     Abraham
     Allard
     Ashcroft
     Bennett
     Biden
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cochran
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams

[[Page 1708]]


     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McConnell
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner

                             NOT VOTING--2

     McCain
     Murkowski
       
  The PRESIDING OFFICER. On this vote, the yeas are 44, the nays are 
54.
  Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. The point of order is 
sustained and the amendment falls.


                           Amendment No. 2854

  The PRESIDING OFFICER. The question is on agreeing to the amendment 
by the Senator from Maine, Ms. Collins.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I apologize to the Senator from Maine. What 
we would like to have on this side--we understand it will be 
interspersed with Republican amendments, but the order of Senators 
offering amendments would be Robb, Bingaman, Graham, and Wellstone. The 
reason I make that announcement is so that Democratic Senators aren't 
going to be over here wondering when they can offer their amendments. 
These are the next four to be offered on our side.
  Mr. COVERDELL. Mr. President, there will be a unanimous consent 
propounded after the vote on the Collins amendment, but for everybody's 
purposes, it is anticipated that there would be a vote on Collins 
shortly, maybe 30, 35 minutes. Then we would take up the Robb amendment 
but not vote on that until tomorrow morning around 10. I think that is 
the general agreement we have reached, to at least let everybody 
understand what we are dealing with.
  I yield the floor so we may proceed with the Collins amendment.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, I ask unanimous consent that Senator 
Thurmond be added as a cosponsor of my amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, I rise to urge my colleagues to support 
the pending amendment which I have offered on behalf of myself, Senator 
Kyl, Senator Coverdell, Senator Hatch, Senator Abraham, and Senator 
Bunning. I know the hour is late and I understand if I speak very 
shortly I will get more votes, so I will be very brief in describing my 
amendment.
  We have worked together to craft an amendment to help our public 
school teachers when they either pursue professional development at 
their own expense or purchase supplies for their classroom. Our 
amendment has two major provisions.
  First, it will allow teachers to deduct their professional 
development expenses without subjecting the deduction to the existing 
2-percent floor that is in our Tax Code. Second, it will grant teachers 
a tax credit of up to $100 for books, supplies, and other equipment 
they purchase for their students. As Senator Kyl has noted, a study by 
the National Education Association indicates the average schoolteacher 
spends more than $400 a year on supplies and other materials for the 
classroom.
  Our amendment would reward teachers for undertaking these activities 
that are designed to make them better teachers or to provide better 
supplies for their students. It is an example of a way that we can say 
thank you to teachers who do so much for our children.
  While our amendment provides financial relief for our dedicated 
teachers, its real beneficiaries are our Nation's students. Other than 
involved parents, which we all know to be the most important component, 
a well-qualified and dedicated teacher is the single most important 
prerequisite for student success. Educational researchers have 
repeatedly demonstrated the close relationship between qualified 
teachers and successful students.
  Moreover, teachers themselves understand how important professional 
development is to maintaining and expanding their levels of competence. 
When I meet with teachers from Maine, they always tell me of their need 
for more professional development and the scarcity of financial support 
for this very worthy pursuit. The willingness of Maine's teachers to 
reach deep into their own pockets to fund their own professional 
development impresses me deeply. For example, an English teacher in 
Bangor, who serves on my Educational Policy Advisory Committee, told me 
of spending her own money to attend a curriculum conference. She then 
came back and shared that information with all of the English teachers 
in her department. She is not alone. She is typical of teachers who are 
willing to pay for their own professional development as well as to 
purchase supplies and materials to enhance their teaching.
  I greatly admire the many teachers who have voluntarily financed the 
additional education they need to improve their schools and to serve 
their students better. I greatly admire those teachers who reach into 
their own pockets to buy supplies, paints, books, all sorts of 
materials that are lacking in their classroom. We should reward those 
teachers. Let us change the Tax Code to recognize and reward their 
sacrifice and to encourage more teachers to take the courses they need 
or to help supplement the supplies in their classroom. I hope those 
changes in our Tax Code will encourage more teachers to undertake the 
formal course work in the subject matter they teach, or to complete 
graduate degrees in either a subject matter or in education, or to 
attend conferences to give them more ideas for innovative approaches to 
presenting the course work they teach in perhaps a more challenging 
manner.
  This amendment will reimburse teachers for just a small part of what 
they invest in our children's future. This money will be money well 
spent. Investing in education helps us to build one of the most 
important assets for our country's future; that is, a well-educated 
population. We need to ensure that our public schools have the very 
best teachers possible in order to bring out the very best in our 
students. Adopting this amendment is the first step toward that goal. 
It will help us in a small way recognize the many sacrifices our 
teachers make each and every day.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, I rise today in strong support of the 
amendment offered by the Senator from Maine, and I thank her for her 
leadership in bringing this issue before the Senate at this time.
  Mr. President, no debate on tax incentives for education would be 
complete without a discussion of teachers and how they are taxed as 
professionals. In my view, the current law treatment is seriously 
deficient in this area.
  First, let me review the technical points. Like any other 
professional, elementary and secondary school teachers incur a number 
of expenses in order to keep themselves current in their fields of 
knowledge. These include subscriptions to journals and other 
periodicals. In addition, many teachers invest in their own development 
by taking courses to improve their knowledge or skills. Under current 
law, these expenses are deductible, as miscellaneous itemized 
deductions. However, there are two practical limitations that 
effectively make these expenses non-deductible for most teachers.
  The first limitation is that the total amount of a taxpayer's 
deductible miscellaneous expenses must exceed 2 percent of adjusted 
gross income before they begin to be deductible. The second hurdle is 
that the amount in excess of the 2 percent floor, if any, combined with 
all other deductions the taxpayer has, must exceed the standard 
deduction before any of them are deductible.
  Let's consider just how difficult these limitations can be, Mr. 
President. I will use the example of a fifth-year high school science 
teacher in Utah who I will call Robin Stewart. Robin is single and 
makes $35,000 per

[[Page 1709]]

year. She incurred $840 of expenses last year for science periodicals 
and for a course she took over the summer to increase her knowledge of 
chemistry.
  Under current law, Robin's $840 expenditures are deductible, subject 
to the limitations I mentioned. The first limitation says that her 
expenses must exceed 2 percent of her income before they are 
deductible. Two percent of $35,000 is $700. Thus, only $140 of her $840 
is deductible--that portion which exceeds $700.
  As a single taxpayer, Robin's standard deduction for 2000 is $4,400. 
Her total itemized deductions, including the $140 miscellaneous 
deduction, fall short of this threshold. Therefore, not even the $140 
is deductible for Robin. What the first limitation did not block, the 
second one did.
  Unfortunately, Mr. President, this is the case for most of the school 
teachers in our nation. In 1997, the last year for which the Internal 
Revenue Service has statistics, only 29.9 percent of taxpayers were 
able to itemize their deductions. So even in the rare case where the 2 
percent limitation does allow a significant deduction, chances are very 
good that it will not help the teacher because he or she cannot 
itemize.
  The amendment before us is a good step in the right direction. It 
would remove the first limitation--the 2 percent floor on miscellaneous 
itemized deductions. Ideally, I would like to see the second limitation 
removed as well and make these kinds of expenses deductible by teachers 
regardless of whether or not they itemize. I hope that my colleagues on 
the Finance Committee will take a close look at the idea of an above-
the-line deduction for teachers.
  Mr. President, the second part of the amendment before us is also 
very important. It recognizes that many of our dedicated teachers incur 
personal expenses for materials for their classrooms. Under current 
law, these types of expenses are, once again, deductible, but only to 
the extent they exceed 2 percent of the taxpayer's adjusted gross 
income.
  Many Americans may be unaware that many teachers subsidize their 
schools out of their own pockets. It is not unusual for teachers to 
have to pay for copying extra worksheets or articles, purchasing art 
supplies, or providing tablets and pencils to some students who are 
without. Many teachers buy library books, educational games, and 
puzzles for their classes with their own money.
  Rather than treating these expenses the same as teacher development 
expenses, and exempting them from the 2 percent floor, this amendment 
goes one step further and grants a tax credit of up to $100 per 
taxpayer for materials the teacher supplies for his or her class. This 
means the teacher receives a dollar-for-dollar reduction in tax 
liability.
  Some people may argue that teachers don't have to do this--why should 
they get a special tax credit?
  The fact is that those teachers who love teaching and care about 
their students have been subsidizing their classrooms for years. They 
do it because our public schools frequently nickel-and-dime the 
classroom in order to concentrate resources on required big ticket 
items.
  And, Mr. President, there is one key difference between school 
teachers and other professionals that, in my mind, justifies this tax 
change. Teachers--unlike lawyers, accountants, physicians, or others 
who may take the existing deduction--are engaged in non-profit public 
service.
  This amendment gives proper recognition to the personal sacrifice 
that many of our teachers make, year after year, toward improving the 
education of our children.
  As in the other part of this amendment, Mr. President, this provision 
is not perfect. I would like to see this credit also extended to those 
parents in Utah and throughout the country who choose to teach their 
children at home. Their expenditures, which likely far exceed $100, 
also deserve the tax credit, and I hope the Finance Committee can look 
for ways in other legislation to extend such a credit to parents to 
teach at home.
  But, the Collins-Kyl-Coverdell-Hatch amendment is a good step toward 
recognizing the dedication of our elementary and secondary school 
teachers and in helping them to meet the costs of their profession.
  We say that we want our public school teachers to be the best.
  We say we want our children and grandchildren taught by teachers who 
are competent and up-to-date not only in the subject matter they are 
teaching, but in the pedagogy of teaching it.
  We say we want teachers who know how to exploit fully new learning 
technologies, including the Internet.
  We say we want teachers who can recognize the signs of struggling or 
troubled students.
  We say we want teachers who can inspire our kids.
  We say we want teachers who are willing to go the extra mile.
  Mr. President, this amendment, offered by Senator Collins, is not 
unlike an amendment I introduced myself. This amendment, like my own, 
is designed to get our tax policy in sync with our goals for education.
  This amendment will provide modest tax relief for teachers who, for 
too long, have been footing the bill for improving the quality of 
teaching by themselves. It is time we helped out.
  I urge the adoption of this amendment.
  I compliment my colleagues for the good work they are doing.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I compliment Senator Hatch for the great way 
in which he explained this amendment which Senators Coverdell, Collins, 
Hatch, and myself have cosponsored.
  He points out that we have goals for excellence in teaching, and this 
is a way to help foster those goals. We ask our teachers to do a great 
deal. This is one small step we can take to help those who are most 
willing to help their students.
  I thank Senator Hatch for an excellent statement.
  I also thank Senator Collins for the kind remarks she made last 
evening. It has been a pleasure to work with her. She is a real leader 
in education. To be able to join my amendment with her amendment as one 
approach which provides some relief to the teachers who are willing to 
take that extra step to help their students is certainly an honor for 
me.
  To recapitulate for our colleagues because I think we are going to be 
voting soon, I leave it to Senator Collins to close the debate unless 
there is anyone else who would like to speak to it. The old saying of 
taking an apple to the teacher at school has caused us to stop and 
think a little bit. It is fine to take an apple to the teacher, but 
there is a way we can be a little bit more helpful to those teachers 
who go the extra mile. There may not be a direct relationship between 
excellence in teaching and providing some assistance to those teachers 
who will go out of their way to take extra supplies to their students, 
but I suspect there, in fact, is a connection because these are the 
most dedicated of all--those teachers who realize their local schools 
have not been able to provide quite enough in instructional materials 
for their kids, and out of their own family budget they are willing to 
make a contribution for their students' education. As I pointed out 
last night, the NEA estimates, according to a study, that each teacher 
annually spends $408 out of his or her pocket to help kids in school by 
taking these instructional materials to them.
  These two amendments, in a small way but an important way, recognize 
that dedication and that contribution. In the case of my half of the 
amendment, it provides dollar for dollar in relief and $100 in the case 
of Senator Collins' amendment. It relieves 2 percent of the burden for 
itemizing it, which Senator Hatch just spoke about.
  Is this going to solve all of our woes in education? No. But is it an 
important recognition of the job teachers do, particularly those 
teachers who are willing to go the extra mile? We think it is. To the 
degree they are willing to supplement what their schools provide for 
students, and it comes out of their own pockets, we think we should at

[[Page 1710]]

least cause them no harm in that process.
  That is why we provide these two elements of tax relief basically to 
encourage them to continue to work with their students in this way.
  I conclude again by thanking Senator Coverdell for his leadership, 
Senator Collins, and Senator Hatch. I hope my colleagues will give this 
amendment their overwhelming support.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I wish to join in support of this 
amendment. I think it is a brilliant idea and something that is 
overdue.
  I think Senator Hatch has commented quite clearly why the present 
state of the law is ineffective to assist teachers who are working 
steadily and giving of themselves sacrificially for their classrooms 
and why the current tax law benefits them not very much, or almost none 
at all. I taught one year. I recall that we had expensive readers paid 
for by the government. I tried to get the disadvantaged children in the 
classroom to read those readers. They hated it. But there are a bunch 
of books there on the walls--Daniel Boone, Hardy Boys, Nancy Drew, and 
those kinds of books. I noticed that if I could get them to read those 
books, they liked it. Some of them read 30, 40, 50, or 60 books. When I 
went to the used bookstores, or places such as that, I would pick up 
books on my own and bring them back to the classroom because there was 
a lot of satisfaction in seeing those children actually enjoying 
reading a story.
  I think sometimes we need to review the quality of the material we 
are asking our children to read. It may be scientifically sound, but 
most of it is boring. They don't like it; it is work to them. If you 
can make reading a pleasure, I think it helps.
  My personal experience with that indicates to me we ought to 
encourage teachers to not hesitate. A teacher may bring them to 
Washington, and they may see prints of historical events or artwork 
they want to buy right then. The school board isn't going to be 
available to approve that. They know it will fit right within their 
classroom and the course they will be studying.
  They invest their own money in that. I think that ought to be 
encouraged.
  My wife taught for a number of years in public schools. She was 
continually buying things for her bulletin board to share with the 
elementary classes and to help her teach the lessons she had for that 
class.
  There is no way some bureaucrat in Washington or even some school 
board member or principal is going to be available at the right time to 
approve that expenditure for a teacher.
  We do not appreciate our teachers enough. If you haven't been in a 
classroom to know how hard it is, how frustrating it can be, and how 
burdensome the regulations are, adding the fact that the days are long 
and children may not be so well disposed to behave on a given day, you 
can't know what it is to be a teacher.
  One of the most frustrating aspects is the little things teachers 
need that they cannot get unless they pay for them out of their own 
pocket. They do that continuously. But it is a source of irritation to 
them. They sense we are not supporting them fully in their mission.
  I think this is a great amendment, I say to Senator Collins and 
Senator Kyl. I think it is right on point. I could not be more pleased 
with it. I would like to be added as a cosponsor to it. I think it will 
help us in the classroom. The most important point in the education 
process is what occurs in a classroom, that magic moment when a teacher 
and child can come together and learning occurs. This will help enhance 
that. I am pleased to support the amendment.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. I thank all my colleagues for their excellent statements 
on this amendment. I ask unanimous consent the Senator from Michigan, 
Mr. Abraham, and the Senator from Alabama, Mr. Sessions, be added as 
cosponsors of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The clerk will call the roll to ascertain the 
presence of a quorum.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the quorum 
call be rescinded.
  The PRESIDING OFFICER (Mr. Santorum). Without objection, it is so 
ordered.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the 
amendment be laid aside and Senator Robb be recognized to offer an 
amendment; further, that the debate on the Robb amendment re school 
construction resume at 9:30 a.m. tomorrow morning, and the time between 
9:30 and 10 be equally divided in the usual form, and following the use 
or yielding back of time, the Senate proceed to a vote on or in 
relation to the amendment. Further, I ask there be no amendment in 
order to the amendment prior to the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, therefore, following the Collins vote, 
there will be no further votes tonight, and the first vote will occur 
at 10 a.m. tomorrow morning.
  I also ask unanimous consent--and the Senator from Nevada and I both 
consulted about this--that Senator Crapo be recognized in morning 
business for up to 10 minutes immediately following the Collins vote.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. And following Senator Crapo, the Senator from Montana will 
be recognized for 15 minutes.
  Mr. COVERDELL. I so amend the unanimous consent request.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I believe the order of business then 
would be for Senator Robb to offer his amendment. It is my 
understanding he is only going to talk about it briefly.
  The PRESIDING OFFICER. The Senator from Virginia.


                           amendment no. 2861

   (Purpose: To eliminate the use of education individual retirement 
accounts for elementary and secondary school expenses and to expand the 
   incentives for the construction and renovation of public schools)

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

       The Senator from Virginia [Mr. Robb], for himself, Mr. 
     Harkin, Mr. Conrad, and Mr. Lautenberg, proposes an amendment 
     numbered 2861.

  Mr. ROBB. 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. ROBB. Mr. President, it is my intention to make the argument as a 
proponent of this amendment tomorrow morning. I was prepared to make it 
at this time, but to accommodate our colleagues I will at this time ask 
unanimous consent this amendment be temporarily laid aside so we may 
proceed with the pending vote, and we will return to the amendment for 
argument first thing tomorrow morning.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       vote on amendment no. 2854

  Mr. COVERDELL. Mr. President, under the previously propounded 
unanimous consent agreement, I believe it is appropriate we move to a 
vote on the Collins amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
2854. The yeas and nays have already been ordered. The clerk will call 
the roll.

[[Page 1711]]

  The senior assistant bill clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) 
and the Senator from Alaska (Mr. Murkowski) are necessarily absent.
  The result was announced--yeas 98, nays 0, as follows:

                      [Rollcall Vote No. 16 Leg.]

                                YEAS--98

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bryan
     Bunning
     Burns
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     Crapo
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McConnell
     Mikulski
     Moynihan
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                             NOT VOTING--2

     McCain
     Murkowski
       
  The amendment (No. 2854) was agreed to.
  Mr. McCONNELL. Mr. President, I come to the floor to support the 
Affordable Education Act, which addresses an important issue facing 
American families today--the education of their children. It is my 
long-held belief that we need to make a college education more 
affordable, and this legislation will do that by providing tax 
incentives to families who save for their children's future education 
needs.
  While I strongly support this legislative package, I want to focus on 
a provision which I have championed for the past six years. Section 102 
of the bill makes savings in qualified state tuition plans tax free. 
This provision would reward savings and allow students and families who 
are participating in these state-sponsored plans to be exempt from 
federal income tax when the funds are used for qualified education 
purposes. This legislation also recognizes the leadership that states 
have provided in helping families save for college. Nationwide, 44 
savings plans will be established in 2000, serving over one million 
savers who have contributed over $7 billion in education savings. In my 
state of Kentucky, over 3,000 families have established accounts, which 
amount to $9.3 million in savings.
  This legislation will reward long-term saving by making savings for 
education tax-free. It is important that we not forget that compounded 
interest cuts both ways. By saving, participants can keep pace with, or 
even ahead of, tuition increases while putting a little away at a time. 
By borrowing, students bear added interest costs that add thousands to 
the total cost of tuition. Savings will have a positive impact, by 
reducing the need for students to borrow tens of thousands of dollars 
in student loans. This will help make need-based grants, which target 
low-income families, go much further.
  Anyone with a child in college knows first-hand the expense of higher 
education. Throughout the 1990s, education costs have continually 
outstripped the gains in income. Tuition rates have not become the 
greatest obstacle students face in attending college. In fact, the 
astronomical increase in college costs has been well documented. 
According to a study conducted by the College Board, over the ten-year 
period ending in 1999-00, tuition and fees at both pubic and private 
four-year colleges have increased on average more than 110 percent over 
inflation since 1980-81, with costs at public colleges rising 51 
percent compared to the 34 percent for private four-year colleges. 
While average, inflation-adjusted tuition has more than doubled, median 
family income has risen only 22 percent since 1981. To compound this 
problem, room and board charges are between 3.6 and 4.8 percent higher 
this year than last year.
  Due to the high cost of education, more and more families have come 
to rely on financial aid to meet tuition costs. In fact, a majority of 
all college students utilize some amount of financial assistance. The 
College Board estimates that most of the growth in financial aid has 
been in the form of student borrowing. In 1998-99, $64.1 billion in 
financial aid was available to students and their families from 
federal, state, and institutional sources. However, despite the fact 
that student aid has increased in value, it has not increased enough to 
keep pace with the rise in tuition.
  Many Kentuckians are drawn to tuition savings plans because they 
offer a low-cost, disciplined approach to savings. In fact, the average 
monthly contribution in Kentucky is just $52--clearly this benefits 
middle-class savers. By exempting all interest earnings from federal 
taxes, this legislation rewards parents who are serious about their 
children's future and who are committed over the long-term to the 
education of their children.
  I would like to share an article written by Jane Bryant Quinn, a 
nationally syndicated financial columnist. In this article, Ms. Quinn 
discusses the unique tax benefit and the stable investment provided by 
the existing plans. Ms. Quinn noted that these plans are ``a great way 
for parents or grandparents to build a college fund.'' Mr. President, I 
ask unanimous consent that the article be printed in the Record at the 
conclusion of my remarks. I encourage all of my colleagues to read it.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. McCONNELL. Mr. President, despite the Administration's objection 
to expanding the favorable tax treatment of these state plans, I am 
pleased that Congress has achieved real reform over the past several 
years.
  In 1996, Congress took the first step in providing tax relief to 
families investing in these programs. In the Small Business Job 
Protection Act of 1996, I was able to include a provision that 
clarified the tax treatment of state-sponsored savings plans and the 
participants' investment. This measure put an end to the tax 
uncertainty that has hampered the effectiveness of these state-
sponsored programs and helped families who are trying to save for their 
children's education.
  In 1997, the Taxpayer Relief Act made revisions to provide increased 
flexibility to families saving for their children's college education. 
The most significant reform was to expand the definition of ``qualified 
education costs'' to include room and board, thus doubling the amount 
families could save tax-free.
  As a result of our actions over the last several years, more and more 
state plans have implemented tuition savings and prepaid plans for 
their residents. It is projected that there will be 44 states with 
tuition savings plans by the year 2000. I believe that we have a real 
opportunity to go even further toward making college affordable to 
American families. It is in our best interest as a nation to maintain a 
quality and affordable education system for everyone. By passing this 
legislation, we can help families help themselves by rewarding savings. 
This will reduce the cost of education and will not unnecessarily 
burden future generations with thousands of dollars in loans.
  In addition to making savings in qualified State and private college 
tuition plans completely tax-free, this legislation makes a number of 
other changes that are essential to helping families afford a quality 
education. Specifically, this legislation increases the contributions 
for K-12 education savings accounts to help families meet the expenses 
of a primary education. This legislation creates incentives for 
employer-provided educational assistance so that individuals can 
continue their education while working. This legislation also changes 
the rules for interest deductions so that qualified education loans are 
more affordable for students. Additionally, this legislation revises 
the National Health Corps Scholarships Exclusion, increases the

[[Page 1712]]

arbitrage rebate exception on tax-exempt bonds, provides for private 
activity bonds for qualified education facilities, and allows the 
Federal Home Loan Bank to guarantee school construction bonds. These 
important reforms are critical to helping families save for the future.
  I urge my colleagues to support this valuable legislation this year 
to reward those who save in order to provide a college education for 
their children.

                               Exhibit 1

               [From the Washington Post, Jan. 30, 2000]

                   Section 529 College Savings Plans 
                               Rate an A

                         (By Jane Bryant Quinn)

       If you haven't yet heard about state Section 529 savings 
     plans, listen up. They're a great way for parents or 
     grandparents to build a college fund.
       These plans drip with income-tax and estate-tax breaks and 
     offer a potential for gain that older college plans can't 
     touch. Many top plans are open to residents of any state.
       Until recently, 529s were marketed by the states themselves 
     or by two no-load mutual-fund groups--Fidelity and TIAA-
     CREF--that some states have hired to manage their money.
       Brokers and financial planners who work for commissions 
     weren't paid to sell 529s, so they steered your college money 
     somewhere else.
       But now, two big brokerage firms are also in the game, 
     selling state 529 plans to a national clientele. Merrill 
     Lynch hitched up with Maine's NextGen program. Salomon Smith 
     Barney has Colorado's Scholars Choice plan and will soon 
     offer West Virginia's plan.
       This creates an army of brokers prepared to tout this new 
     form of investing to the public. Commercial sales should help 
     get more people talking about 529s.
       State 529 plans (the name refers to a section of the IRS 
     Code) were authorized by Congress in 1996. You can invest 
     lump sums or make regular monthly contributions. The plans 
     come in two forms:
       A prepaid tuition plan. The conservative choice. These 
     plans guarantee that the money you save today will match the 
     growth in tuition inflation at state-run colleges. Currently, 
     that's an effective 3.4 percent return. You can also use the 
     money for tuition at out-of-state schools.
       A college savings plan. Here, you contribute to an 
     investment pool that has the potential of rising faster than 
     the college inflation rate (although there's no guarantee). 
     You can use the money at any accredited school, for any 
     qualified education expense.
       Savings plans are currently offered by 23 states, and nine 
     more are starting up this year. If your state doesn't have a 
     savings plan, or has one with unattractive features, you can 
     join one in another state.
       A few states keep your money in bonds, but most provide a 
     mix of stocks and bonds. A typical 529 account leans heavily 
     toward stocks when the child is young, then moves 
     automatically toward safer bonds and money-market funds as 
     college draws near.
       Some states give you a choice of accounts. Maine, for 
     example, offers four accounts--one of which is 100 percent 
     invested in stocks.
       Under 529 rules, you can't switch your money from one 
     account to another within the plan. To diversify, you'd 
     contribute to more than one account, says Maine's treasurer, 
     Dale McCormick.
       Here's the beauty of 529 plans. All the earnings accumulate 
     tax-deferred. When you take out the money for higher 
     education, it's taxed in your child's bracket, not yours.
       Some states let you deduct your contribution on your state 
     tax return. Other states let your earnings pass tax-free.
       The value of the plan is not included in your taxable 
     estate. But you still control the money, says certified 
     public accountant and 529 expert Joseph Hurley of Bonadio & 
     Co. in Pittsford, N.Y.
       You can change the plan's beneficiary from one family 
     member to another (including an adult seeking further 
     education). You can even drop the plan and take your money 
     back.
       If you spend 529 money on something other than higher 
     education, that withdrawal will be taxed in your bracket. 
     You'll also pay a penalty--typically 10 percent of earnings 
     (sometimes more).
       ``A 10 percent penalty on earnings isn't bad,'' Hurley 
     says. ``If your account yielded 10 percent, you'd still net 9 
     percent, pretax.''
       Surprisingly, 529 savings plans detract little or nothing 
     from your child's potential financial-aid award. The money is 
     treated as belonging to the donor, not the student.
       Hurley gives top marks to the plans in the following 
     states: Arkansas (1-877-422-6553), Colorado (1-800-478-5651), 
     Maine (1-877-563-9843), Missouri (1-888-414-6678), New 
     Hampshire (1-800-544-1722), Utah (1-800-418-2551) and 
     Virginia (888-567-0540). For his opinion of all the state 
     plans, visit savingforcollege.com.
       The new edition of Hurley's book, ``The Best Way to Save 
     for College,'' is due at the end of this month ($25.95 
     including shipping; order from savingforcollege.com or call 
     1-800-487-7624). It contains plan comparisons plus tax tips 
     that financial salespeople aren't likely to know.
       For extended information on all the state plans, call the 
     National Association of State Treasurers at 1-877-277-6496 or 
     visit its Web site (www.collegesavings.org).

  Mr. ALLARD. Mr. President, I stand before you today to support S. 
1134, the Affordable Education Act. I have been a long time supporter 
of the Education Savings Account. I believe that ESA's can be a very 
effective tool in helping parents have an impact on their child's 
education. The key to a child's education is parent involvement. As 
well intentioned as we may be here in Washington, no amount of money or 
regulation can accomplish what a child's parents can. I have worked and 
will continue to work to help provide parents the opportunity to have 
an increasing say in their child's education. I believe this bill will 
help to accomplish just that.
  The changes this bill will make to the Taxpayer Relief Act of 1997 
will provide flexibility and choice to parents. Parents who earn less 
than $95,000 a year can pay up to $2,000 a year per child into a tax 
exempt Education Savings Account. This is an increase of 400% from the 
current limit. Under current law, money that is payed into ESA's is 
only available to pay for higher education. This bill will make money 
payed into an ESA available for parents during the K-12 years of 
education. This legislation gives parents the flexibility to use their 
money on anything from college tuition to books or computers if these 
supplies are utilized in their child's education.
  If parents would like to send their child to a private school this 
money will be available. Some will say that Education Savings Accounts 
will just benefit the rich. I strongly disagree. This bill would move 
all parents who want to send their child to a private school $2,000 
closer to that goal. If parents want to keep their child in public 
school they have their ESA available to pay for any additional fees or 
supplies that would help educate their child.
  Education is a crucial issue. In January and February I held 63 town 
meetings in the state of Colorado where parents spoke with me first 
hand about their concerns with the education system. I receive many 
letters from parents sharing similar sentiments every week. They tell 
me they are having a difficult time paying extra fees to allow their 
child to participate in extra curricular activities. Education Savings 
Accounts can help those parents set aside money to pay for activities 
that help build character for students. They tell me that they are 
having to pay for school books that they cannot afford. Education 
Savings Accounts can help those parents set aside money to pay for the 
books that their child needs. They tell me that college is becoming too 
expensive. Education Savings Accounts help parents set aside money to 
pay for their child's college tuition so that they can graduate without 
worrying about having to pay off loans.
  This bill also addresses other needs in the area of education. Local 
communities that pass tax-exempt bonds must pay the government the 
arbitrage, or interest, that accrues on those bonds. The Affordable 
Education Act increases the ceiling of eligibility for retaining bond 
arbitrage from $10 million to $15 million. This provides more money for 
school construction. Relief for graduate students is also included in 
this bill. The sixty month limit on loan interest tax deduction for 
graduate students is eliminated. This helps students who are unable to 
pay off their loans in five years. Employers are also allowed to 
provide up to $5,250 a year in tax exempt income to an employee 
attending college or graduate school for tuition assistance. Education 
Savings Accounts can be extended past the age of 18 for special 
education students who may not start college at the age of 18 like 
traditional students.
  This bill will also provide a positive impact in other important 
areas. It provides tax relief which is very important to me and my 
constituents by reducing taxable income for families with children. I 
believe it can also reduce juvenile crime by allowing parents to pay 
for after school care for

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their child. This would allow children to be involved in activities 
during the time of day in which children are at the greatest risk of 
misbehaving, the time between the end of the school day and the end of 
the work day when many children are unsupervised.
  We have an opportunity today to begin to work towards important 
reform of our education system. We have passed provisions similar to 
this bill in the past only to see the President veto them. I hope we 
can overcome this ``one-size-fits-all'' attitude towards education and 
pass the Affordable Education Act. Lets put the control back in the 
hands of parents instead of bureaucrats. I strongly urge all my 
colleagues to support this bill.
 Mr. McCAIN. Mr. President, the Affordable Education Act is an 
important step toward returning to parents and communities the 
resources and responsibility to provide for their children's education, 
and expanding educational opportunities for millions of Americans of 
all ages.
  As an original cosponsor of S. 14, the ``Education Savings Account 
and School Excellence Act'', portions of which are contained in this 
bill, I am strongly committed to strengthening and expanding education 
savings accounts for American families. Families should be encouraged 
and given incentives to save more of their money for their children's 
college education, but also to set aside money to meet the unique needs 
of the children throughout their school years.
  The Affordable Education Act expands the existing tax-preferred 
Education Savings Accounts, which allow families to save for college 
expenses, to include elementary and secondary educational costs. The 
bill also allows corporations and other entities, in addition to 
individuals, to contribute to a child's ESA.
  Under this bill, money saved in ESAs could be withdrawn tax-free to 
pay for a child's educational expenses from kindergarten through high 
school, not just college. Expanded ESA's could be used to hire a tutor 
for a child who is struggling with math, or foreign language lessons to 
help a child become bilingual or multilingual. ESA savings could be 
used to purchase a home computer or give a child with dyslexia access 
to a special education teacher. Expanded ESA's will help parents 
address their children's unique needs and concerns, and encourage their 
particular abilities. Expanded ESA's can help ensure each child is 
prepared to succeed in higher education or employment.
  This bill also contains several important initiatives to provide 
greater access to higher education. It supports employer initiatives 
offering educational assistance to their employees by extending the tax 
exclusion for employer-paid undergraduate tuition and expanding the tax 
exclusion to also cover graduate-level courses. The bill helps make 
college more affordable by allowing private institutions to establish 
qualified pre-paid college tuition plans and allows certain tax-free 
withdrawals from qualified State tuition plans.
  Unfortunately, expansion of ESA's and the other provisions noted 
above are only temporary in the bill before the Senate. Because these 
programs are important tools for families struggling to pay for the 
children's college and other educational expenses, I believe these 
initiatives should be made permanent.
  Another important aspect of the bill is the new tax exclusion of 
certain amounts received from the National Health Corps and Armed 
Forces Health Professions Scholarship programs. Those who receive these 
scholarships will go on to provide medical and dental services in our 
nation's under-served areas as well as in military service.
  The bill also authorizes the tax-exempt financing rules for school 
construction. Local communities can determine how to best use their 
educational resources--whether hiring new teachers, providing 
additional classroom services, or constructing new schools. This bill 
gives communities a financial break if they choose to use some of their 
resources for new school construction, making it possible to accomplish 
more with limited resources.
  Finally, I note with approval that the bill contains several 
provisions to close existing tax loopholes for special interests in 
order to balance the costs of these important education initiatives. I 
would encourage the Senate to consider adding several more of these 
inequitable tax loopholes to the bill in order to make permanent the 
expanded ESA's and other important education incentives in this bill.
  Again, I reiterate my strong support for this bill, and I urge my 
colleagues to support it. More important, I urge the President to 
consider the importance of this legislation for expanding the 
educational opportunities of all Americans, and I urge him to sign this 
bill when it reaches his desk.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Idaho is recognized for 10 minutes.
  (The remarks of Mr. Crapo pertaining to the introduction of S. 2118, 
S. 2119, S. 2120, S. 2121, and S. 2122 are printed in today's Record 
under ``Statements on Introduced Bills and Joint Resolutions.'')
  Mr. CRAPO. I thank the Chair and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. CRAPO. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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