[Congressional Record (Bound Edition), Volume 146 (2000), Part 5]
[Senate]
[Pages 6010-6013]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        THE MARRIAGE TAX PENALTY

  Mr. DURBIN. One of the issues pending is a Tax Code issue called the 
marriage tax penalty. What it boils down to is that a number of people 
in this country, when they go to get married, their combined incomes on 
a joint return puts them in a higher tax bracket, so they are, in fact, 
penalized by the Tax Code because of their decision to get married.
  The debate on the floor of the Senate now is whether we will change 
the Tax Code to eliminate that penalty. It makes common sense, really. 
We want to encourage people to get married. The idea that we would 
penalize them under the Tax Code for getting married makes no sense at 
all. There is common agreement on that. Democrats and Republicans 
believe we should eliminate that penalty. The difference, of course, 
comes down to how you do it and what the bill says as part of the tax 
relief.
  I have to say, parenthetically, that I don't know too many young 
couples who, when they are making plans to get engaged and to get 
married, say, well, before we finalize this and buy a wedding ring, we 
better stop off at the accountant's office to figure out the tax 
consequences. I am sure some do that, but my wife and I sure didn't, 
and most people don't do that.
  Notwithstanding that observation, it is right for us to consider 
changing the Tax Code to eliminate this penalty. Interestingly enough, 
though, there are almost an equal number of couples who get married and 
get a tax bonus because their combined income lowers their joint tax 
rate to the point where they pay a lower tax rate married than they did 
as single, individual filers. So, in a way, there is a marriage tax 
penalty under the Tax Code that I described, but there is also a 
marriage bonus. So what we have said on the Democratic side is let's 
deal with the penalty and make sure nobody pays a price under the Tax 
Code for the decision to get married.
  When you make these Tax Code decisions, they cost money, because it 
means fewer dollars are flowing from taxpayers and from the economy 
into the Treasury. Whenever you are going to propose a bill such as 
this to eliminate a Tax Code penalty to reduce a tax obligation, you 
have to come up with some money to pay for it and offset the loss of 
revenue to the Federal Government.
  We are in a position to discuss that possibility because, frankly, we 
are enjoying the most prosperous economy in the history of the United 
States of America. We have seen the longest period of economic 
expansion ever. It has been I think close to 109 months--for over 9 
years--that we have seen a continued expansion of the economy without a 
recession, which means more people are going to work and buying homes 
or cars; businesses are getting started; inflation is in check; people 
are making more money.
  If you happen to have a retirement plan, if you take away the last 
few weeks, which have been a little rocky, you know that over the last 
several years you have done pretty well. There has been a growth in 
value in the stock market. When President Clinton was sworn in as 
President, the Dow Jones average was around 3,000. Now it is in the 
10,000 category.
  A tripling in the value of this stock market means half the American 
families who own mutual funds or other investments have generally seen 
their pensions and savings growing over this period of time. This is a 
very good thing. But because of that strengthening economy, we have 
also seen people making more money and paying more in taxes. 
Considering the fact that folks are doing better, most of them have 
said: Keep it coming. We are willing to pay our fair share of taxes as 
long as we are getting more in income and we see our retirement plans 
growing.
  This increase in tax receipts because of a prosperous economy has 
generated a surplus. Where the Senate just a few years ago was 
embroiled in a controversy about the deficit we faced year in and year 
out, we are now talking about how to spend the surplus. The marriage 
tax penalty bill takes a part of this surplus and says, let's cure this 
problem in the Tax Code. I don't think that is unreasonable. But I 
thought we ought to step back for a second and say what our long-term 
goals are.
  The long-term goal enunciated by President Clinton--which I support 
and the Democratic side supports--is that we should take this surplus 
and invest it wisely, do things with it that make sense in the long 
term.
  One thing that makes sense is to eliminate the national debt. The 
deficit each year piles up into an account called the national debt. 
The national debt is our mortgage as a nation. We have to raise taxes 
every year to pay interest on our Nation's mortgage--the national debt. 
In fact, we have to raise $1 billion in taxes every single day from 
families, businesses, and individuals just to pay interest on old debt.
  Those of us on the Democratic side think our surplus should first be 
dedicated to reducing this national debt so that the mortgage left to 
our children and grandchildren is smaller. We will leave them a great 
nation. Of course, we are proud of the role we played in helping that 
to happen. But we shouldn't leave them a great debt for the things we 
enjoyed during our lifetime.
  We believe, on the Democratic side, that the fiscally sound thing to 
do is to reduce the national debt. I am afraid our friends on the 
Republican side of the aisle would rather spend this money on tax cuts 
that go way beyond the marriage tax penalty--the problem I discussed 
earlier.
  The leader in tax cuts is the Republican candidate for President, 
Governor Bush. He has proposed a tax cut package larger even than the 
Republican package that is being brought to the floor.
  We had a vote just a couple of weeks ago on an amendment I offered. 
By a vote of 99-0, the Senate rejected the George Bush tax cut. They 
said it wasn't wise policy. I think that was a wise vote. We basically 
said, let's take care to spend this surplus wisely so that if the 
economy has a downturn, or we are asked in later years to account for 
our actions, we can explain, yes, we put the money into reducing the 
national debt, strengthening Social Security, strengthening Medicare 
for years to come, and making wise investments in our future--and 
targeted tax cuts.
  One of the wisest investments and the first stop on most people's 
agenda would be education--figure out a way to strengthen education so 
young people across America in the 21st century

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have a better chance for a good job and a better chance to compete.
  How else could we make a wise investment? Do something about health 
care in this country. Expand the coverage of health insurance so that 
more and more Americans have that protection and peace of mind. Deal 
with the whole issue of prescription drug benefits for the elderly and 
disabled. We think, on the Democratic side, that is a wise investment 
of the surplus as well.
  Then targeted tax cuts: Make sure you target them where they are 
needed and don't go overboard.
  The marriage penalty I discussed: We agree on the Democratic side to 
eliminate it, but let's not go overboard in eliminating it and reduce 
the possibility of bringing down the national debt and strengthening 
Social Security and Medicare. Therein lies the heart of the debate on 
the floor of the Senate.
  For several weeks now, the Republican leadership has come to us and 
said: We want to bring our marriage tax penalty bill up for 
consideration. This marriage tax penalty bill they have proposed goes 
way beyond what is necessary to cure the penalty. In fact, when you 
take a close look at the provisions, you find, unfortunately, a large 
part of the money that is being spent there is not really going to help 
the people who are penalized by the decision to get married.
  Only 15 percent of the benefits under the Republican proposal, for 
example, go to low- and middle-income married couples with incomes 
below $50,000 a year; 15 percent to couples making less than $50,000 a 
year. Yet these couples represent 45 percent of all married couples. 
They are not getting the tax benefit.
  Take a look at the winners. Fewer than a third of married couples 
have incomes exceeding $75,000. Under the Republican bill, one-third of 
those couples who are getting married and earning over $75,000 a year 
receive two-thirds of this bill's tax benefit.
  There is no fairness here.
  If we are trying to encourage marriage at all levels of income, why 
would we hype the benefits on the wealthiest people in America and 
basically ignore those in lower-income categories struggling to buy a 
home and start a family? That is exactly what the Republican bill does. 
Many of us don't believe that is fair.
  In addition, only 40 percent of the tax relief under the Senate 
Republican plan would go towards the marriage tax penalty. That is less 
than half of it. Sixty percent of it provides tax breaks for people who 
are not suffering the marriage tax penalty. Those of us on the 
Democratic side think that is not a wise investment. Instead, we should 
target the tax cuts to people who need them.
  Let me give you two examples of what we think we can do with targeted 
tax cuts that families across America really need. For example, do you 
have a child attending college? Do you know how much it costs? Most 
families do. They start worrying about college education expenses as 
soon as the baby is born. They start putting away a little in a savings 
account thinking: how in the heck will their son or daughter ever get 
to a college unless they think ahead and plan ahead.
  One of the things the Democrats want to do, sponsored by Senator 
Schumer of New York, is to give a deduction for college education 
expenses up to $10,000. What does it mean? If you spent $10,000 on your 
son's or daughter's college education, the targeted tax cut on the 
Democratic side would give you $2,800--over a fourth of it--in a tax 
deduction. I wish it could be more, but it is a helping hand. I think 
most families would say: I like this; this is a sensible thing. It 
reduces the burden of debt many young people would face coming out of 
college. It helps families who are trying to help their sons and 
daughters go through college.
  Let me tell you something else we would do. We would create a tax 
credit for people who are paying for long-term care.
  If you have an elderly parent or a disabled person in your household, 
you know that the cost of long-term care could be very expensive--to 
bring in visiting nurses, to provide for some sort of convalescent 
care, or long-term nursing home care. The President has proposed a 
targeted tax cut for families to give them a helping hand to pay for 
that elderly parent, or elderly relative, or someone disabled in your 
household. That is the Democratic proposal.
  The Republicans, in contrast, think that 60 percent of the tax cuts 
should go to people in higher income categories instead of targeting 
them to family needs that I have just described, like college education 
expenses and long-term care. That is what the debate boils down to, in 
substance. The procedural part of the debate is as dry as dust, but it 
is important because we will decide on a vote in just about an hour and 
a half as to whether or not we are going to close down the debate on 
the Republican marriage tax penalty bill or leave it open so we can 
allow for amendments to be offered.
  The Republicans oppose the suggestion that we Democrats could offer 
our targeted tax cuts on the floor of the Senate. They want to give us 
a take-it-or-leave-it vote: Either take our tax break, our marriage tax 
penalty break, or vote against it. We think this should be done in 
truly a deliberative process, where we come to the floor and debate the 
merits of our different positions. This Senate is supposed to be the 
greatest deliberative body in the world. For 200 years, it has enjoyed 
this reputation.
  Yesterday, one of my colleagues, one of the most respected Members of 
the Senate, Senator Robert Byrd of West Virginia, came to the floor, 
and in his fashion gave us another history lesson about the Senate and 
how it came to be. If you have not heard a Senator Byrd speech on the 
history of the Senate, you have missed a good time. This man has 
dedicated a lifetime to reminding us that this is a historic 
institution. It is not just another creature of politics. He reminds 
us, time and again, our responsibility is to come to this floor and 
debate the great ideas in America. Yet the Republican majority would 
close us down, stop us from this debate, stop us from bringing these 
amendments to the floor.
  I say to those following the course of my remarks, this Senate is not 
overworked. Take a look at the floor. With the exception of the fine 
Senator from Kentucky, who is presiding, I am the only one on the 
floor. Over the course of this week, few Members have come to the 
floor. We have not worked late at night or early in the morning 
debating issues that American families care about. We have kind of been 
in neutral for a long period of time.
  When I go home to my home State of Illinois, the people I talk to and 
the families I meet with ask some very basic and important questions: 
What have you done lately to improve the quality of life for families 
across America? The unfortunate answer is: Very little, if anything. 
This Senate and the House of Representatives cannot seem to get into 
gear.
  When I ran for the Senate, it was for the opportunity to represent 12 
million people in Illinois but also to come to this floor and engage in 
a real debate. I want the Republicans to come forward with their best 
arguments on the issues of the day. I want the Democrats to do the 
same. Then let's vote--that is what it is all about--and be held 
accountable by the people who sent us here as to whether or not we have 
voted the right way. That is the democratic process.
  But that is not the way it works in the Senate today. What we have 
here is an effort by the Republican majority to stop the debate, to 
close it down, to give you one take-it-or-leave-it vote each week and 
then go home. We come in and punch our time cards, check off the box 
that says I now qualify for another day on my pension, and a lot of 
people head home. That is not why I ran for the Senate, and I do not 
think that is why this body was created by our Founding Fathers.
  Let us consider some of the things we could address. Senator Evan 
Bayh, my new Democratic colleague from Indiana, an extraordinarily 
talented man who served as Governor of that State, has come forward 
with a very responsible suggestion on the marriage tax penalty. Senator 
Bayh has said: Let us help those who are penalized and let us save the 
resulting money from the Republican bill to reduce our national

[[Page 6012]]

debt, to preserve and strengthen Social Security and Medicare, to 
provide the targeted tax cuts. That is one of the amendments we want to 
offer. Take it or leave it, up or down, limited debate. Our leader, 
Senator Daschle, came to the floor and said this is not a filibuster. 
We will agree to a limitation, 1 hour on a side on this important 
issue, and then let's vote on it.
  But, no: Rejected. The Republican leadership said we do not want to 
debate Senator Bayh's amendment. We do not want to debate Senator 
Bayh's substitute. We want to give you one vote, up or down, take it or 
leave it. I don't think it is fair. I don't think it is fair to the 
Senator from Indiana, nor is it fair to this body. Certainly we have 
the time on our hands to spend 2 hours debating that important issue.
  Senator Robb of Virginia wants to offer an amendment to this which 
addresses an issue that is probably one of the most important issues 
that faces us in this election year. It is a question of whether we 
will create a prescription drug benefit under Medicare. Senator Robb of 
Virginia wants a chance to offer that amendment and to debate it, a 
limited debate, 1 hour on each side, and take a vote as to whether or 
not we will change Medicare to provide a prescription drug benefit.
  I invite all the Senators who are trying to stop this debate to take 
a moment and go home, pick any constituency in your State, and ask them 
about a prescription drug benefit. I found in Illinois that there are 
seniors across my State, disabled people across my State, and their 
families, who understand the critical need for a prescription drug 
benefit.
  In the 1960s, when President Lyndon Johnson and Congress created the 
Medicare program, they provided health insurance for the elderly and 
disabled that had never been there before. It has worked beautifully. 
For 40 years, Medicare has provided quality health care for seniors and 
the disabled. The net result of it is seniors live longer. There is no 
better test of the success of Medicare than the fact that seniors can 
live longer and can be more independent in their lives.
  My mother always used to say, for so many years, ``I just don't want 
to be a burden.'' How many parents say that to their kids? Medicare 
helped my mom not be a burden to our family. She was able to have her 
own health insurance protection because of Medicare.
  But there was a problem with Medicare and we know it now. Medicare 
has no prescription drug benefit. So many seniors in my State tell 
stories of going to the doctor, feeling bad. The doctor says: I think 
there is a prescription that can help you. The doctor hands the senior 
citizen the prescription. The senior citizen puts it in his or her 
pocket and says little, goes off to the pharmacy and says: How much 
will it cost? Many of these seniors, on fixed incomes, find they cannot 
afford to buy the medicines they need to stay healthy. They have to 
make choices between the food they need to survive and the medicine 
which the doctors have prescribed and recommended.
  That should change. We have the power to change it. That is what 
Congress is all about. The President supports this change to create a 
prescription drug benefit so seniors across America will have some 
protection when it comes to buying prescription drugs.
  About a third of the seniors in our country already have some 
protection. I think of the UAW retirees in Illinois and other union 
families that have great retirement plans. They may spend $15 a month, 
as example, maximum, to get total drug coverage under their retirement 
plan. Those are the lucky people, one-third of the seniors.
  Another third go out and try to buy supplemental health insurance 
that has prescription drug benefits. Some of it is good, some of it is 
just plain awful. They pay a very high premium for it. These are the 
people in the middle who have a little bit of coverage.
  But a third of the seniors have no protection whatsoever. What they 
pay for in prescription drugs comes right out of their pockets, right 
from their fixed income.
  Senator Robb wants to offer an amendment this week on the floor of 
the Senate for us to vote on a prescription drug benefit. Should the 
Senate not go on record on this issue? If you oppose it, vote against 
it. I support it and I want to vote for it. I want to be able to go 
back home to say to seniors: We have changed the Medicare program for 
the better. We want to keep you healthy and keep you strong. We want 
you to be able to pay for the drugs that your doctor recommends for 
your good health.
  That is one of the amendments the Republicans do not want us to vote 
on. Why? They say they favor prescription drug benefits. Senator Robb 
gives them a chance to support one approach. I think it is within their 
power to offer their alternative to it. But they do not want to bring 
that into the debate. They want to close down this debate so we do not 
go after them. I think, frankly, that is a serious shortcoming.
  When you take a look at the prices of prescription drugs that are 
used by seniors, you will find these prices are spiraling out of 
control. In 1999, a recent analysis by Families USA found that prices 
of prescription drugs most commonly used by seniors increased at almost 
twice the rate of inflation. The report looked at the 50 prescription 
drugs most commonly used by the elderly and found that their prices had 
gone up more than twice the rate of inflation.
  On average, the prices of these drugs increased by 3.9 percent 
between January 1999 and January 2000; 2.2 percent was the general 
inflationary increase. That is the average for the 50 drugs. Some of 
them went up much more quickly. Their prices are out of control, beyond 
the means of seniors who could not afford to pay for them. Moreover, 
these increases are part of a trend, according to Families USA. Over 
the past 6 years, the prices of prescription drugs most commonly used 
by seniors also increased by twice the rate of inflation.
  I have met with pharmacists in Illinois who tell me the prices of 
drugs used to go up once a year. Now they go up once a month. They 
understand seniors cannot keep up with it.
  When we talk about a prescription drug benefit, it is not only to 
provide protection under Medicare to pay for prescription drugs, it is 
also to address the issue of pricing.
  When I talk about the issue of price control in my State of Illinois, 
a lot of people tense up: Wait a minute, the Government is going to get 
involved in price control? I am not sure I like that idea.
  There is a natural skepticism, but I ask them to bear with me for a 
minute while I explain pricing mechanisms for drugs.
  Right now in the United States of America, the drug companies that 
make these prescription drugs bargain with insurance companies. The 
insurance companies come to them and say: If you want the doctors in 
our insurance plan to prescribe these drugs, then you have to agree to 
pricing controls so that your prices do not go up out of hand. That is 
being done today. That bargaining is taking place.
  The Veterans Administration has said to the same drug companies: If 
you want us to use your drugs in veterans' hospitals across America, 
agree to price controls so we can afford to pay for them, and the drug 
companies agree.
  The Indian Health Service and the Public Health Service are the same.
  We find the only group in America that does not have this bargaining 
power to say to drug companies, ``We want to have reasonable pricing,'' 
turns out to be the elderly and disabled people covered by Medicare. 
People on fixed incomes in tough situations lack the same bargaining 
power.
  On the Democratic side, we are saying give to all Americans this 
bargaining power.
  Let me tell my colleagues who else has bargaining power. If one 
happens to live in a border State such as Montana or North Dakota, once 
a month a lot of senior centers rent a bus. What do they do with that 
bus? They load it up with seniors and the prescriptions from their 
doctors and drive over the border into Canada. Why? Because the exact 
same prescription drug sold in the United States, made by the same 
company, is sold in Canada for half the cost

[[Page 6013]]

as in the United States. Why? Why are the prices lower? Because the 
Canadian Government is bargaining with the same American drug 
companies. They tell them: You cannot sell your drugs in the Canadian 
health care system unless you keep the prices under control. And the 
drug companies said: So be it, that is what we will do. Mexico is the 
same. Europe is the same.
  If one looks at all these groups around the world, they come to 
realize that only Medicare recipients in America are paying the very 
highest prices for drugs. Everybody else gets a bargain.
  Do my colleagues know who else gets a bargain when it comes to drugs? 
Your dog and your cat. Exactly the same drug sold for human usage is 
sold at a fraction of the cost to veterinarians--10 percent of the 
cost. I am a lot more concerned about a grandmother than I am about a 
great dane.
  I would like to see us have a pricing policy that gives seniors a 
break instead of looking to overseas leaders and people in other 
countries who come up with a way to keep the prices of drugs under 
control.
  What I have described in the last few minutes is a contour of a 
debate that should take place on the floor of the Senate. Those 
Senators who disagree with me ought to have a chance to stand up and 
explain their position. Senator Robb of Virginia, who believes, as I 
do, that we need a prescription drug benefit, should be allowed to make 
his position known. We ought to debate it and vote on it. The 
Republican majority says no. When it comes to changes in the Tax Code, 
take it or leave it; marriage tax penalty or else.
  The final point I will make, as I see my colleagues come to the floor 
to join me in speaking--Senator Akaka from Hawaii will be speaking this 
morning--is the fact that the amendment by Senator Schumer of New York 
goes to the issue of expenses of college education. As I said earlier, 
the President is right. I believe we should give families trying to put 
kids through college a helping hand.
  Senator Schumer, who occupies the desk to my left, wants to offer 
that amendment. He wants the Senate to go on record for or against the 
proposition that we ought to be giving a tax deduction for college 
education expenses. Quite honestly, that is a good idea for America to 
prepare the next generation to compete in the global economy so that 
working families have a chance to send their kids to the best schools, 
get the best education, and realize the American dream.
  Is this worth a debate on the floor of the Senate? Is this worth a 
few minutes of our time? As I look across this empty Chamber, I ask: 
What is it Senators could be doing that is more important than 
considering the college education expenses of our family members? It is 
worth the time, and it is worth the debate. I believe the Republican 
majority is wrong when they say we cannot and should not debate these 
amendments because we are too darn busy. I do not buy it. We are not 
too busy to focus on the problems about which American families really 
care.
  I hope this cloture vote at noon is a vote that repudiates the 
Republican position and opens up this debate so we can deal with 
prescription drugs, so we can deal with reducing the national debt and 
strengthening Social Security and Medicare, and so we can provide a 
deduction for college education expenses. I hope we will have that 
opportunity this afternoon and for the remainder of the week. I yield 
the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Mr. AKAKA. Mr. President, I ask unanimous consent to speak in morning 
business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. AKAKA. I thank the Chair.
  (The remarks of Mr. Akaka pertaining to the introduction of S. 2478 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  The PRESIDING OFFICER (Mr. Allard). The Senator's time has expired.
  Mr. AKAKA. I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Wyoming, Mr. Thomas, is recognized to speak for up to 15 minutes.
  Ms. LANDRIEU. Mr. President, since I just want to make brief remarks, 
will the Senator indulge me so I can introduce a bill if I take about 2 
minutes?
  Mr. THOMAS. One and a half?
  Ms. LANDRIEU. All right. One and a half.
  Mr. THOMAS. Yes, that will be fine.
  Ms. LANDRIEU. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Louisiana.
  (The remarks of Ms. Landrieu pertaining to the introduction of S. 
2479 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  The PRESIDING OFFICER. The Senator's time has expired.
  Ms. LANDRIEU. If I could have 30 more seconds.

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