House Report 107-801 - REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES OF THE COMMITTEE ON WAYS AND MEANS DURING THE 107TH CONGRESS

[House Report 107-801]
[From the U.S. Government Publishing Office]

107th Congress
2d Session HOUSE OF REPRESENTATIVES Report
107-801
_______________________________________________________________________
Union Calendar No. 502

REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES

OF THE

COMMITTEE ON WAYS AND MEANS

DURING THE

107TH CONGRESS

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

January 2, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

COMMITTEE ON WAYS AND MEANS

BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa JOHN LEWIS, Georgia
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California
WES WATKINS, Oklahoma KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

LETTER OF TRANSMITTAL

----------

House of Representatives,
Committee on Ways and Means,
Washington, DC, January 2, 2003.
Hon. Jeff Trandahl,
Office of the Clerk, House of Representatives,
The Capitol, Washington, DC.
Dear Mr. Trandahl: I am herewith transmitting, pursuant to
House Rule XI, clause 1(d), the report of the Committee on Ways
and Means on its legislative and oversight activities during
the 107th Congress.
Best regards,
Bill Thomas, Chairman.

C O N T E N T S

----------
Page
Transmittal Letter............................................... III
Forward.......................................................... VII
I. Legislative Activity Review.......................................1
A. Legislative Review of Tax, Trust Fund, and Pension
Issues............................................... 1
B. Legislative Review of Trade Issues.................... 22
C. Legislative Review of Health Issues................... 51
D. Legislative Review of Social Security Issues.......... 55
E. Legislative Review of Human Resources Issues.......... 59
F. Legislative Review of Debt Issues..................... 68
II. Oversight Activity Review........................................68
A. Oversight Agenda...................................... 68
B. Actions taken and recommendations made with respect to
oversight plan....................................... 77
C. Additional oversight activities, and any
recommendations or actions taken..................... 102
Appendix I. Jurisdiction of the Committee on Ways and Means......
07
Appendix II. Historical Note.....................................
23
Appendix III. Statistical Review of the Activities of the
Committee on Ways and Means....................................
29
Appendix IV. Chairmen of the Committee on Ways and Means and
Membership of the Committee from the 1st through the 107th
Congresses.....................................................
33

FOREWORD

Clause 1(d) of Rule XI of the Rules of the House, regarding
the rules of procedure for committees, contains a requirement
that each committee prepare a report at the conclusion of each
Congress summarizing its activities. The 104th Congress added
subsections on legislative and oversight activities, including
a summary comparison of oversight plans and eventual
recommendations and actions. The full text of the Rule, as
recodified in the 107th Congress, follows:

(d)(1) Each committee shall submit to the House not later
than January 2 of each odd-numbered year a report on the
activities of that committee under this rule and rule X during
the Congress ending at noon on January 3 of such year.
(2) Such report shall include separate sections summarizing
the legislative and oversight activities of that committee
during that Congress.
(3) The oversight section of such report shall include a
summary of the oversight plans submitted by the committee under
clause 2(d) of rule X, a summary of the actions taken and
recommendations made with respect to each such plan, a summary
of any additional oversight activities undertaken by that
committee, and any recommendations made or actions taken
thereon.
(4) After an adjournment sine die of the last regular
session of a Congress, the chairman of a committee may file an
activities report under subparagraph (1) with the Clerk at any
time and without approval of the committee, provided that--
(A) a copy of the report has been available to each
member of the committee for at least seven calendar
days; and
(B) the report includes any supplemental, minority,
or additional view submitted by a member of the
committee.

The jurisdiction of the Committee on Ways and Means during
the 107th Congress is provided in Rule X, clause 1(s), as
follows:

The general oversight responsibilities of committees are
set forth in clause 2 of Rule X. The 104th Congress also added
the requirement in clause 2 of Rule X that each standing
committee submit its oversight plans for each Congress. The
text of the Rule, as recodified in the 107th Congress, in
pertinent part, follows:

2. (a) The various standing committees shall have general
oversight responsibilities as provided in paragraph (b) in
order to assist the House in--
(1) its analysis, appraisal, and evaluation of--
(A) the application, administration,
execution, and effectiveness of Federal laws;
and
(B) conditions and circumstances that may
indicate the necessity or desirability of
enacting new or additional legislation; and
(2) its formulation, consideration, and enactment of
changes in Federal laws, and of such additional
legislation as may be necessary or appropriate.
(b)(1) In order to determine whether laws and programs
addressing subjects within the jurisdiction of a committee are
being implemented and carried out in accordance with the intent
of Congress and whether they should be continued, curtailed, or
eliminated, each standing committee (other than the Committee
on Appropriations) shall review and study on a continuing
basis--
(A) the application, administration, execution, and
effectiveness of laws and programs addressing subjects
within its jurisdiction;
(B) the organization and operation of the Federal
agencies and entities having responsibilities for the
administration and execution of laws and programs
addressing subjects within its jurisdiction;
(C) any conditions or circumstances that may indicate
the necessity or desirability of enacting new or
additional legislation addressing subjects within its
jurisdiction (whether or not a bill or resolution has
been introduced with respect thereto); and
(D) future research and forecasting on subjects
within its jurisdiction.
(2) Each committee to which subparagraph (1) applies having
more than 20 members shall establish an oversight subcommittee,
or require its subcommittees to conduct oversight in their
respective jurisdictions, to assist in carrying out its
responsibilities under this clause. The establishment of an
oversight subcommittee does not limit the responsibility of a
subcommittee with legislative jurisdiction in carrying out its
oversight responsibilities.
(c) Each standing committee shall review and study on a
continuing basis the impact or probable impact of tax policies
affecting subjects within its jurisdiction as described in
clauses 1 and 3.
(d)(1) Not later than February 15 of the first session of a
Congress, each standing committee shall, in a meeting that is
open to the public and with a quorum present, adopt its
oversight plans for that Congress. Such plan shall be submitted
simultaneously to the Committee on Government Reform and to the
Committee on House Administration. In developing its plan each
committee shall, to the maximum extent feasible--
(A) consult with other committees that have
jurisdiction over the same or related laws, programs,
or agencies within its jurisdiction with the objective
of ensuring maximum coordination and cooperation among
committees when conducting reviews of such laws,
programs, or agencies and include in its plan an
explanation of steps that have been or will be taken to
ensure such coordination and cooperation;
(B) review specific problems with Federal rules,
regulations, statutes, and court decisions that are
ambiguous, arbitrary, or nonsensical, or that impose
severe financial burdens on individuals;
(C) give priority consideration to including in its
plan the review of those laws, programs, or agencies
operating under permanent budget authority or permanent
statutory authority; and
(D) have a view toward ensuring that all significant
laws, programs, or agencies within its jurisdiction are
subject to review every 10 years.

To carry out its work during the 107th Congress, the
Committee on Ways and Means had six standing Subcommittees, as
follows:
Subcommittee on Trade;
Subcommittee on Oversight;
Subcommittee on Health;
Subcommittee on Social Security;
Subcommittee on Human Resources; and
Subcommittee on Select Revenue Measures.
The membership of the six Subcommittees of the Committee on
Ways and Means in the 107th Congress is as follows:

Subcommittee on Trade

PHILIP M. CRANE, Illinois, Chairman
E. CLAY SHAW, Jr., Florida SANDER M. LEVIN, Michigan
AMO HOUGHTON, New York CHARLES B. RANGEL, New York
DAVE CAMP, Michigan RICHARD E. NEAL, Massachusetts
JIM RAMSTAD, Minnesota WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington XAVIER BECERRA, California
WALLY HERGER, California JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania
JIM NUSSLE, Iowa

Subcommittee on Oversight

AMO HOUGHTON, New York, Chairman
ROB PORTMAN, Ohio WILLIAM J. COYNE, Pennsylvania
JERRY WELLER, Illinois MICHAEL R. McNULTY, New York
KENNY C. HULSHOF, Missouri JOHN LEWIS, Georgia
SCOTT McINNIS, Colorado KAREN L. THURMAN, Florida
MARK FOLEY, Florida EARL POMEROY, North Dakota
SAM JOHNSON, Texas
JENNIFER DUNN, Washington

Subcommittee on Health

NANCY L. JOHNSON, Connecticut, Chairman
JIM McCRERY, Louisiana FORTNEY PETE STARK, California
PHILIP M. CRANE, Illinois GERALD D. KLECZKA, Wisconsin
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota KAREN L. THURMAN, Florida
PHIL ENGLISH, Pennsylvania
JENNIFER DUNN, Washington

Subcommittee on Social Security

E. CLAY SHAW, Jr., Florida, Chairman
SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona BENJAMIN L. CARDIN, Maryland
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
RON LEWIS, Georgia XAVIER BECERRA, California
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Subcommittee on Human Resources

WALLY HERGER, California, Chairman
NANCY L. JOHNSON, Connecticut BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma FORTNEY PETE STARK, California
SCOTT McINNIS, Colorado SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
RON LEWIS, Georgia

Subcommittee on Select Revenue Measures

JIM McCRERY, Louisiana, Chairman
J.D. HAYWORTH, Arizona MICHAEL R. McNULTY, New York
JERRY WELLER, Illinois RICHARD E. NEAL, Massachusetts
RON LEWIS, Georgia WILLIAM J. JEFFERSON, Louisiana
MARK FOLEY, Florida JOHN S. TANNER, Tennessee
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

The Committee on Ways and Means submits its report on its
legislative and oversight activities for the 107th Congress
pursuant to the above stated provisions of the Rules of the
House. Section I of the report describes the Committees'
legislative activities, divided into six sections as follows:
Legislative Review of Tax, Trust Fund, and Pension Issues;
Legislative Review of Trade Issues; Legislative Review of
Health Issues; Legislative Review of Social Security Issues;
Legislative Review of Human Resources Issues; and Legislative
Review of Debt Issues.
Section II of the report describes the Committees'
oversight activities. It includes a copy of the Committee's
Oversight Agenda, adopted in open session on February 7, 2001,
along with a description of actions taken and recommendations
made with respect to the oversight plan. The report then
discusses additional Committee oversight activities, and any
recommendations or actions taken as a result. Finally, the
report includes four appendices with Committee information.
Appendix I is an expanded discussion of the Jurisdiction of the
Committee on Ways and Means along with a revised listing and
explanation of blue slip resolutions and points of order under
House Rule XXI 5(a). Appendix II is a brief Historical Note on
the origins of the Committee; Appendix III is a Statistical
Review of the Activities of the Committee on Ways and Means;
and Appendix IV is a listing of the Chairmen and Membership of
the Committee from the 1st-107th Congresses.

Union Calendar No. 502
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-801

======================================================================

REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES OF THE COMMITTEE ON
WAYS AND MEANS DURING THE 107TH CONGRESS

_______

January 2, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Thomas, from the Committee on Ways and Means, submitted the
following

R E P O R T

I. Legislative Activity Review

A. Legislative Review of Tax, Trust Fund, and Pension Issues

1. BILLS ENACTED INTO LAW DURING THE 107TH CONGRESS

a. Fallen Hero Survivor Benefit Fairness Act

On May 3, 2001, Representative Ramstad introduced H.R.
1727, the ``Fallen Hero Survivor Benefit Fairness Act of
2001.'' On May 9, 2001, the Committee approved the bill, with
an amendment, by voice vote. The amended bill passed the House
under suspension of the rules on May 15, 2001, and passed the
Senate by unanimous consent on May 22, 2001. The President
signed the bill into law on June 5, 2001 (P.L. 107-15). The
provisions of the bill were also included in H.R. 1836 (see
I.A.1b), but were subsequently dropped from the bill after H.R.
1727 was enacted into law.
H.R. 1727 amended a provision in the Taxpayer Relief Act of
1997 (P.L. 105-34) regarding certain annuities paid to
survivors of public safety officers who are killed in the line
of duty. The Taxpayer Relief Act of 1997 provides that such
annuities are excludible from income if the officer died after
December 31, 1996. H.R. 1727 provides that survivor annuities
are excludible from income regardless of when the officer died.
The exclusion applies prospectively to annuities received after
December 31, 2001.

b. Economic Growth and Tax Relief Reconciliation Act

On February 5 and 6, 2001, the Committee held hearings to
discuss the President's fiscal year 2002 budget proposals. On
February 13 and March 21, 2001, the Committee held hearings to
discuss the tax relief proposals contained in the President's
fiscal year 2002 budget.
On May 15, 2001, Chairman Thomas introduced H.R. 1836, the
``Economic Growth and Tax Relief Reconciliation Act of 2001.''
The bill passed the House on May 16, 2001, and passed the
Senate, with an amendment, on May 23, 2001. The conference
report on H.R. 1836 passed the House and Senate on May 26,
2001, and was signed into law by the President on June 7, 2001
(P.L. 107-16).
H.R. 1836 included provisions similar to those contained in
H.R. 3, the ``Economic Growth and Tax Relief Act,'' H.R. 6, the
``Marriage Penalty and Family Tax Relief Act,'' H.R. 8, the
``Death Tax Elimination Act,'' H.R. 10, the ``Comprehensive
Retirement Security and Pension Reform Act'' as passed by the
House of Representatives, and H.R. 622, the ``Hope for Children
Act.'' The Committee and the House approved all of these bills.
In summary, Title I of the Act established a 10-percent
individual income tax bracket and gradually reduced the 28-,
31-,
36-, and 39.6-percent income tax rates to 25 percent, 28
percent, 33 percent, and 35 percent, respectively. The benefits
of the new 10-percent tax bracket for 2001 were delivered in
the form of rebate checks that were mailed to eligible
taxpayers during the 2001 calendar year to the greatest extent
possible. Title I of the Act also phased out the limitation on
itemized deductions and the personal exemption phase out.
Title II of the Act provided several tax benefits for
families with children. The child tax credit was gradually
doubled to $1,000 per child, and a portion of the credit was
made refundable. The adoption credit and the exclusion for
employer-provided adoption assistance were expanded and made
permanent. The dependent care credit was expanded, and an
employer-provided childcare credit of up to $150,000 per year
was established to offset the cost of building childcare
facilities or providing qualified childcare resources and
referrals.
Title III of the Act provided marriage tax penalty relief
by gradually increasing the standard deduction for married
taxpayers filing jointly so that the deduction will be twice
that of an individual filing a single return. The 15-percent
income tax bracket for joint tax filers was gradually increased
so that it will be twice the width of the bracket for an
individual filing a single return. The earned income credit for
joint tax filers was increased and several simplifications to
the earned income credit were adopted.
Title IV of the Act contained several education tax
incentives. Coverdell education savings accounts were expanded
to cover qualified elementary and secondary education expenses,
and the annual contribution limit was increased from $500 to
$2,000, among other enhancements. Qualified tuition programs
were expanded in several ways. Most notably, the Act provided
that distributions are excludible from income if used for
qualified higher education expenses. Certain private
institutions of higher education were permitted to establish
qualified tuition programs (but not savings programs). The
exclusion for employer provided educational assistance was
expanded to include graduate courses and permanently extended.
The 60-month limit on the student loan interest deduction was
eliminated, and the income limitations for the deduction were
increased. The Act provided that certain amounts received under
the National Public Health Service Corps ScholarshipProgram and
the F. Edward Hebert Armed Forces Health Professions Scholarship and
Financial Assistance Program were excludible from income. The Act also
enhanced the rules relating to tax-exempt bond financing for public
schools. Finally, the Act established a temporary above-the-line
deduction for qualified higher education tuition and related expenses.
Title V of the Act repealed the estate and generation-
skipping transfer taxes effective January 1, 2010, and repealed
the provisions relating to the basis of property acquired from
a decedent (so that such property takes a carryover basis
instead of a step up in basis). Several modifications to the
estate and generation-skipping taxes were made prior to the
effective date of the repeal. The State death tax credit was
repealed beginning January 1, 2005, and replaced with a
deduction for such taxes. Several other changes to the estate,
generation-skipping, and gift taxes were also adopted.
Title VI provided several modifications to individual
retirement accounts (IRAs), qualified retirement plans and
annuities, and eligible plans of State and local governments,
and tax-exempt organizations (457 plans). Among these changes,
the Act gradually increased the annual contribution limit for
IRAs to $5,000. The annual contribution limits for qualified
plans and 457 plans was gradually increased to $15,000.
Additional catch-up contributions for individuals age 50 and
older were established. Several provisions aimed at expanding
pension coverage were adopted, including an increase in the
annual benefit and contribution limits and modifications to the
top-heavy rules. The Act also provided an individual income tax
credit of up to $2,000 for qualified retirement savings
contributions and included several provisions aimed at
mitigating pension plan start-up costs for small employers.
Several provisions to enhance portability were enacted, and
faster vesting of certain employer matching contributions was
required.
To comply with the Congressional Budget Act, most of the
provisions of the Act are scheduled to expire (or ``sunset'')
after December 31, 2010.

c. Naming ``Coverdell Education Savings Accounts''

On July 18, 2001, Senator Lott introduced S. 1190, a bill
to amend the Internal Revenue Code of 1986 to rename
``education individual retirement accounts'' as ``Coverdell
education savings accounts.'' The bill passed the Senate by
unanimous consent on the same day. The Committee discharged the
bill on July 23, 2001, and the House passed the bill by
unanimous consent on the same day. The President signed the
bill into law on July 26, 2001 (P.L. 107-22).

d. Railroad Retirement and Survivors' Improvement Act

On March 14, 2001, Representative Portman introduced H.R.
10, the ``Comprehensive Retirement Security and Pension Reform
Act of 2001.'' The Committee approved the bill, with an
amendment, on April 25, 2001. The House passed the bill, with
an amendment, on May 2, 2001. The provisions of H.R. 10 were
included in H.R. 1836, the ``Economic Growth and Tax Relief
Reconciliation Act of 2001,'' which was signed into law by the
President on June 7, 2001 (P.L. 107-16) (see I.A.1b).
H.R. 1140, the ``Railroad Retirement and Survivors''
Improvement Act of 2001,'' was introduced on March 21, 2001, by
Representative Young. The bill was discharged by the Committee
on Ways and Means on July 12, 2001. The bill passed the House
under suspension of the rules on July 31, 2001.
On December 5, 2001, Senate Amendment 2170 incorporated the
provisions of H.R. 1140 as substitute text for H.R. 10. H.R.
10, as amended, passed the Senate on the same day. The House
approved the Senate amendment on December 11, 2001, and the
President signed the bill into law on December 21, 2001 (P.L.
107-90).
In summary, H.R. 10 increased benefits paid to railroad
retirees and their beneficiaries, reduced the payroll taxes
used to finance benefits, and revised the financing of the
railroad retirement system.
The Act made several changes to railroad retirement
annuities received by retired employees and surviving spouses.
The Act established a Railroad Retirement Trust Fund and a
National Railroad Retirement Investment Trust to manage and
invest the assets of the Railroad Retirement system. The Act
provided that amounts needed to pay tier 1 and tier 2 annuities
would be transferred to an independent disbursing agent outside
of the U.S. Department of the Treasury. The disbursing agent
would provide annuity checks to beneficiaries.
The Act repealed the supplemental annuity tax that was used
to finance supplemental annuities for long-time rail employees.
In addition, tier 2 tax rates were reduced for railroad
employers and employees. The Act established an automatic
adjustment mechanism to adjust tier II tax rates based on the
financial status of the system. Under this mechanism, the
Railroad Retirement Board is required to calculate the ratio of
assets to benefits each year to determine tier 2 tax rates.

e. Airline Financial Stabilization

On September 21, 2001, Representative Young introduced H.R.
2926, the ``Air Transportation Safety and System Stabilization
Act.'' The bill was discharged by the Committee and passed by
the House on September 21, 2001. The Senate passed S. 1450, a
companion bill to H.R. 2926 on the same day. Unanimous consent
agreements in the Senateprovided for the House bill to be
passed in the Senate if it was identical to the Senate bill. The
President signed the bill into law on September 22, 2001 (P.L. 107-42).
In summary, the Act provided financial assistance to the
airline industry to help reduce the economic impact caused by
the September 11, 2001, terrorist attacks. The tax title of the
Act extended the deadline for an air carrier to make certain
airline-related excise tax deposits. In addition to the tax
title, the Act provided direct payments and loan guarantees to
air carriers affected by the air stoppage occurring after
September 10, 2001, authorized assistance for aviation
insurance and reimbursed air carriers for any increase in the
costs of insurance since September 11, 2001. The Act also
created a Victims Compensation Fund to compensate the families
of victims who were injured or killed as a result of the
terrorist attacks. Finally, the Act affirmed the President's
decision to spend $3 billion on airline safety.

f. Victims of Terrorism Tax Relief Act

On September 13, 2001, Chairman Thomas introduced H.R.
2884, the ``Victims of Terrorism Tax Relief Act of 2001.'' The
Committee discharged the bill, and the House approved the bill
by unanimous consent on the same day. On November 16, 2001, the
Senate approved H.R. 2884, with an amendment, by unanimous
consent. On December 13, 2001, the House agreed to the Senate
amendment with an amendment. On December 20, 2001, the Senate
approved the House amendment with further amendment. The House
approved the Senate amendment by unanimous consent on the same
day. The President signed the bill into law on December 21,
2001 (P.L. 107-134).
The provisions of H.R. 2884 were also included in H.R.
3529, the ``Economic Recovery and Worker Assistance Act of
2001,'' as passed by the House on December 20, 2001 (see
I.A.1h).
In summary, the Act provided tax relief to individuals who
died as a result of the terrorist attacks against the United
States on April 19, 1995 (Oklahoma City bombing) or September
11, 2001 (World Trade Center and Pentagon), or who died as a
result of the anthrax attacks occurring on or after September
11, 2001, and before January 1, 2002. The Act waived the income
tax liability of such victims for the year of death and the
year prior to death (and established a minimum benefit of
$10,000 for each victim). In addition, lower estate tax rates
were established for such victims. Similar tax benefits already
applied under prior law for members of the Armed Forces who
died while serving in a combat zone. The Act provided an
exclusion from income for certain death benefits paid by an
employer and provided that payments from charitable
organizations are to be treated as exempt payments that are
excludible from income.
The Act also provided general tax relief provisions for
victims of terrorist and military actions, Presidentially-
declared disasters, and certain other disasters. The Act
clarified that disaster relief payments are excludible from
income.
The Act protected victims who sell structured settlements
for a lump sum by imposing a 40-percent excise tax on such
transactions unless the transaction is approved by a court as
being in the victim's best interest.
The exemption amount for disability trusts was increased to
$3,000, thus reducing the taxation of these trusts.
The Act also allowed the Internal Revenue Service (IRS) to
share tax return and taxpayer information with Federal law
enforcement agencies investigating terrorist attacks. The new
disclosure rules will expire after 3 years.

g. Simplified Administration and Reporting Requirements for Educational
Institutions

On November 27, 2001, Representative Manzullo introduced
H.R. 3346, a bill to amend the Internal Revenue Code (IRC) of
1986 to simplify the reporting requirements relating to higher
education tuition and related expenses. On December 4, 2001,
the House approved the bill under suspension of the rules. On
December 20, 2001, the Senate approved the bill by unanimous
consent. The President signed the bill into law on January 16,
2002 (P.L. 107-131).
The Taxpayer Relief Act of 1997 (P.L. 105-34) established
reporting requirements under IRC section 6050S to help the IRS
administer the Hope and Lifetime Learning tax credits and the
interest deduction for student loans. In summary, H.R. 3346
simplified the reporting requirements under section 6050S by
allowing educational institutions the option of reporting
``amounts billed'' for tuition and related expenses instead of
``payments received.'' The bill also eliminated the requirement
that educational institutions report the name, Taxpayer
Identification Number, and address of any person that can claim
the student as a dependent. This information was not needed to
administer the tuition tax credits or the interest deduction
for student loans.

h. The Job Creation and Worker Assistance Act

On October 11, 2001, Chairman Thomas introduced H.R. 3090,
the ``Economic Security and Recovery Act of 2001.'' The
Committee approved the bill, with an amendment, on October 12,
2001. The House passed the bill on October 24, 2001. The Senate
Committee on Finance approved the bill, with an amendment, on
November 8, 2001. The bill passed the Senate by voice vote on
February 14, 2002. On March 7, 2002, the House approved the
Senate amendment with a substitute amendment. The Senate agreed
to the House amendment on March 8, 2002, and the President
signed the bill into law on March 9, 2002(P.L. 107-147).
On February 14, 2001, Representative DeMint introduced H.R.
622, the ``Hope for Children Act,'' a bill to expand and
permanently extend the adoption tax credit and the exclusion
for employer-provided adoption assistance. Provisions similar
to those contained in H.R. 622 were included in H.R. 1836, the
``Economic Growth and Tax Relief Reconciliation Act of 2001,''
which was signed into law on June 6, 2001 (P.L. 107-16) (see
I.A.1b). The Senate passed H.R. 622 with an amendment in the
nature of a substitute on February 6, 2002. The Senate
substitute contained economic recovery and worker assistance
provisions similar to some of the provisions contained in H.R.
3090. On February 14, 2002, the House passed the Senate
substitute with amendment. The Senate did not act on the House
amendment. However, similar provisions relating to economic
recovery, extension of expiring provisions, tax benefits for
the revitalization of New York City, miscellaneous provisions
and technical corrections, and assistance for displaced workers
were contained in H.R. 3090 as signed into law.
On December 19, 2001, Chairman Thomas introduced H.R. 3529,
the ``Economic Recovery and Worker Assistance Act of 2001.''
The House passed the bill on December 20, 2001. The Senate did
not act on H.R. 3529. However, similar provisions relating to
economic recovery, extension of expiring provisions, tax
benefits for the revitalization of New York City, miscellaneous
provisions and technical corrections, and assistance for
displaced workers were contained in H.R. 3090 as signed into
law. Similar provisions relating to tax relief for victims of
terrorism (contained in Title V of the bill) were included in
H.R. 2884 as signed into law (P.L. 107-134) (see I.A.1f).
In summary, H.R. 3090 included two provisions aimed at
stimulating the economy. The first provision generally provided
an additional first year 30-percent depreciation allowance for
certain property that was acquired between September 10, 2001,
and September 11, 2004. The second provision extended the net
operating loss carryback period from 2 to 5 years for
businesses with net operating losses in taxable years ending in
2001 or 2002. This provision also repealed the depreciation
preference under the alternative minimum tax and the 90-percent
limitations on use of foreign tax credits and net operating
losses.
The Act also provided unemployment assistance for displaced
workers.
H.R. 3090 also provided tax benefits to assist with the
revitalization of New York City after the terrorist attacks
that occurred on September 11, 2001. These benefits included a
wage credit for certain individuals employed in New York City,
additional tax-exempt bond financing authority and advance
refunding authority, 5-year recovery period for certain
leasehold improvements, and additional expensing under IRC
section 179.
The Act also provided several miscellaneous tax provisions
including an exclusion for foster care payments made by
qualified placement agencies (see summary of H.R. 586 under
section I.A.3a), an expansion of the interest rate range that
may be used to calculate current liability for defined benefit
pension plans under the minimum funding requirements, and a
temporary above-the-line deduction for certain out-of-pocket
expenses incurred by school teachers.
Finally, the Act provided a 2-year extension of tax
provisions expiring in 2001 and included several technical and
clerical corrections to previously enacted laws.

i. Andean Trade Promotion and Drug Eradication Act

On February 13, 2002, the Committee held a hearing on the
President's proposal to reduce the number of uninsured through
the use of health care tax credits.
On October 3, 2001, Representative Crane introduced H.R.
3009, the ``Andean Trade Promotion and Drug Eradication Act.''
On October 5, 2001, the Committee approved the amended bill by
voice vote. The bill passed the House by voice vote on November
16, 2001. The Senate Committee on Finance approved the bill,
with an amendment, on November 29, 2001. The Senate passed the
bill, with amendment, on May 23, 2002. The conference report on
H.R. 3009 was agreed to in the House on July 27, 2002, and in
the Senate on August 1, 2002. President Bush signed the bill
into law on August 6, 2002 (P.L. 107-210).
As enacted, H.R. 3009 incorporated provisions from H.R.
3005, H.R. 3008, H.R. 3010, and H.R. 3129. In summary, the Act
included trade adjustment assistance (TAA) provisions, trade
promotion authority (fast-track procedures), Andean trade
preferences, and other trade provisions.
The Act included a refundable tax credit for 65 percent of
the expenses incurred by eligible individuals who purchase
qualified health insurance covering the taxpayer and qualifying
family members. The credit is available only with respect to
amounts paid by the taxpayer. An eligible individual is an: (1)
eligible TAA recipient, (2) eligible alternative TAA recipient,
or (3) eligible Pension Benefit Guaranty Corporation recipient.
An otherwise eligible taxpayer is not eligible for the credit
if he or she has other specified coverage. Qualifying family
members are the taxpayer's spouse and any dependent of the
taxpayer with respect to whom the taxpayer is entitled to claim
a dependency exemption. The credit may be used to purchase
COBRA continuation coverage, State-based continuation coverage,
coverage offered through State high risk pools, a series of
State-based options, coverage under a group health plan that is
available through the employment of the eligible individual's
spouse, and individual market coverage if the eligible
individual was covered under individual health insurance during
the entire 30-day period that ends on the date the individual
became separated from the employment connected to the
individual'squalification for the credit.

j. Clergy Housing Allowance Clarification Act

On April 10, 2002, Representative Ramstad introduced H.R.
4156, the ``Clergy Housing Allowance Clarification Act of
2002.'' The House passed the bill under suspension of the rules
on April 16, 2002. On May 2, 2002, the Senate Committee on
Finance discharged the bill by unanimous consent, and the
Senate passed the bill by unanimous consent on the same day.
President Bush signed the bill into law on May 20, 2002 (P.L.
107-181).
Section 107 of IRC allows a minister of the gospel to
exclude from gross income (1) the rental value of a home
furnished as part of his or her compensation or (2) the rental
allowance paid as part of his or her compensation, to the
extent used to pay rent or provide a home. H.R. 4156 codified
the IRS' long-standing position (Rev. Rul. 71-280, 1971-2
C.B.92) that the clergy housing allowance exclusion is limited
to the fair market value of the home provided plus the cost of
utilities.

k. Rules Regarding State and Local Committees of Candidates and of
Political Parties

On October 10, 2002, Representative Brady introduced H.R.
5596, a bill to amend section 527 of the IRC of 1986 to
eliminate notification and return requirements for State and
local party committees and candidate committees and avoid
duplicate reporting by certain State and local political
committees of information required to be reported and made
publicly available under State law, and for other purposes. On
October 16, 2002, the Committee discharged the bill. The House
passed the bill by unanimous consent on October 16, 2002, and
the Senate passed the bill by unanimous consent on October 17,
2002. The President signed the bill into law on November 2,
2002 (P.L. 107-276).
In summary, H.R. 5596 exempted State and local committees
of candidates and of political parties from specified
notification requirements and required an annual income tax
return from political organizations only with respect to
political organization taxable income. The bill required the
filing of an annual information return by a political
organization with gross receipts of $25,000 or more or with
gross receipts of $100,000 or more in the case of a qualified
State or local political organization, except for certain
organizations that are specifically exempted by the statute.
The bill made additional amendments to the rules of IRC section
527 regarding: (1) unsegregated funds, (2) penalty assessment
and collection procedures, (3) electronic filing, (4) public
availability of notices and reports, and (5) timing of notice
of material change.

l. Homeland Security Act

On June 24, 2002, Representative Armey introduced H.R.
5005, the ``Homeland Security Act of 2002.'' The Committee
approved the bill, with an amendment, on July 10, 2002. The
Committee discharged the bill on July 12, 2002. The House
approved the bill, with amendment, on July 26, 2002. The Senate
passed the bill, with amendment, on November 19, 2002. The
House agreed to the Senate amendment by unanimous consent on
November 22, 2002. The President signed the bill into law on
November 25, 2002 (P.L. 107-296).
In summary, the Act established a U.S. Department of
Homeland Security to consolidate the government's law
enforcement functions. Among the provisions of the Act, the law
enforcement functions previously carried out by the Bureau of
Alcohol, Tobacco, and Firearms (BATF) were transferred from the
U.S. Department of the Treasury to the U.S. Department of
Justice (where other traditional law enforcement agencies, such
as the Federal Bureau of Investigation and the Drug Enforcement
Agency, currently reside.) The BATF revenue administration and
revenue enforcement functions will remain at the U.S.
Department of the Treasury.

m. Terrorism Risk Protection Act

On November 1, 2001, Representative Oxely introduced H.R.
3210, the ``Terrorism Risk Protection Act.'' The Committee
marked up the revenue provisions of the bill on November 16,
2001, and approved an amendment in the nature of a substitute
on the same day. The House approved the amended bill on
November 29, 2001. The Senate approved H.R. 3210 with an
amendment in the nature of a substitute on July 25, 2002, by
unanimous consent. The substitute language reflected the
provisions of S. 2600, introduced by Senator Dodd. The
conference report on H.R. 3210 passed the House by voice vote
on November 14, 2002, and passed the Senate on November 19,
2002. The President signed the bill into law on November 26,
2002 (P.L. 107-297).
In summary, H.R. 3210, as introduced in the House, provided
for temporary Federal Government cost-sharing for commercial
insurers of up to $100 billion for 90 percent of the amount of
insured losses resulting from acts of terrorism in the event of
a ``triggering determination.'' The financial assistance was to
be repaid through assessments and surcharges. The introduced
bill also included a revenue provision that allowed property
and casualty insurers an additional deduction for increases to
a ``terrorism commercial business reserve.'' This reserve
referred to amounts set aside in a segregated account to pay or
to reinsure future unaccrued claims arising from declared
terrorism losses or to pay certain other claims.
The bill, as approved by the Committee deleted the revenue
provision in the underlying bill and required the Secretary of
the Treasury to conduct a study of issues relating to
permitting property and casualty insurance companies to
establish deductible reserves against losses for future acts of
terrorism. The Secretary would be required to report to
Congress no later than 4 months after date of enactment.

n. Holocaust Restitution Tax Fairness Act

On May 22, 2002, Representative Shaw introduced H.R. 4823,
the ``Holocaust Restitution Tax Fairness Act of 2002.'' On June
4, 2002, the bill passed the House under suspension of the
rules. On November 20, 2002, the bill passed the Senate by
unanimous consent. The President signed the bill into law on
December 17, 2002 (P.L. 107-358).
The Act permanently extended section 803 of the Economic
Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16)
(see I.A.1b). Section 803 provides an exclusion from income for
specified restitution payments received by persons (or heirs)
persecuted by Nazi Germany, its allied or controlled countries,
or any other Axis regime because of race, religion, physical or
mental disability, or sexual orientation. The provision was
scheduled to expire after December 31, 2010 because of the
general sunset provision in Title IX of the Economic Growth and
Tax Relief Reconciliation Act of 2001.

2. TAX RELIEF PROPOSALS

a. Community Solutions Act

On March 29, 2001, Representative Watts introduced H.R. 7,
the ``Community Solutions Act of 2001.'' On June 13, 2001, the
Subcommittee on Human Resources and the Subcommittee on Select
Revenue Measures held a joint hearing to examine the provisions
of H.R. 7. The Committee approved the bill, with an amendment,
on July 11, 2001, and the House approved the bill on July 19,
2001.
On July 16, 2001, the Senate Committee on Finance favorably
reported H.R. 7 with an amendment in the nature of a
substitute. The Senate did not consider the bill.
In summary, H.R. 7 as passed by the House provided several
tax incentives to encourage individuals and businesses to
increase charitable contributions. The bill allowed taxpayers
who do not itemize deductions to deduct charitable
contributions paid in cash. The maximum deduction would
increase from $25 ($50 for joint returns) in 2002 to $100 ($200
for joint returns) by 2010. The bill also provided an exclusion
from gross income for otherwise taxable withdrawals from
traditional or Roth IRAs that are made for charitable
provisions. The percentage limitation on corporate charitable
contributions was increased from 10 percent to 15 percent of
modified taxable income (phased in over 9 years). The bill also
clarified the valuation rules applicable to donations of food
inventory and provided that all businesses (not just C
corporations) are eligible for an enhanced deduction for such
donations.
H.R. 7 as passed by the House modified the excise tax on
the net investment income of private foundations by replacing
the two rates of tax under present law with a single tax rate
of 1 percent. In addition, the bill imposed a 100-percent
excise tax on the unrelated business taxable income of a
charitable remainder trust, instead of removing the income tax
exemption of such a trust for any year in which the trust has
any unrelated business taxable income.
H.R. 7 modified the self-constructed property rule that
applies to certain charitable contributions of scientific
property used for research and computer technology and
equipment. The bill also allowed shareholders in an S
corporation to increase their basis in their S corporation
shares to permit them to take a full charitable deduction for
charitable contributions by the S corporation.
The bill also increased the authorization for the Assets
for Independence Act matched savings program, which supports
the creation and funding of Individual Development Accounts for
low-income working families. The bill made several other
modifications to the program.

b. Retirement Security Advice Act

On June 21, 2001, Representative Boehner introduced H.R.
2269, the ``Retirement Security Advice Act of 2001.'' The
Committee approved the bill, with an amendment, on November 7,
2001, and the House approved the bill on November 15, 2001. The
Senate did not act on the bill.
The provisions of the bill were also included in H.R. 3762,
the ``Pension Security Act of 2002,'' which passed the House on
April 11, 2002 (see I.A.2g).
In summary, the bill provided an exemption from the
prohibited transaction rules of the IRC and the Employee
Retirement Income Security Act that would allow qualified
service providers to offer investment advice to plan sponsors,
plan participants, and beneficiaries of defined contribution
plans as long as certain disclosures were made. The exemption
would be available only to ``fiduciary advisors.'' A fiduciary
advisor was defined as a registered investment advisor, bank,
insurance company, or registered broker dealer. An affiliate,
employee, agent, or registered representative of these
regulated institutions also qualified as a fiduciary advisor.
Employers who chose to provide their workers with access to
an investment advisor were liable for the prudent selection of
an investment advisor and the periodic review of that advisor.
In addition to the qualification and disclosure rules, the bill
required that: (1) any investment decisions must be made by the
worker, not the advisor, (2) any compensation received by the
advisor must be reasonable and the terms of any transaction
must be at least as favorable as an arm's length transaction,
and (3) the advisor must maintain records of compliance for at
least 6 years.

c. Increasing Limit on the Deduction of Net Capital Losses

On April 26, 2001, Representative Lofgren introduced H.R.
1619, a bill to amend the IRC of 1986 to increase the
limitation on capital losses applicable to individuals. The
Committee approved the bill, with an amendment, on October 8,
2002. The bill was not considered by the House or the Senate.
In summary, the amended bill increased the annual capital
loss limit for individuals from $3,000 to $8,250 and provided
for an annual inflation adjustment for tax years beginning
after December 31, 2001.

d. Energy Tax Incentives

On March 5, 2001, the Subcommittee on Oversight held a
field hearing on energy supply and prices. On May 3, June 12,
and June 13, 2001, the Subcommittee on Select Revenue Measures
held hearings on the effects of Federal tax laws on the
production, supply, and conservation of energy.
On July 17, 2001, Representative McCrery introduced H.R.
2511, the ``Energy Tax Policy Act of 2001.'' The Committee
approved the bill, with an amendment, on July 18, 2001. H.R.
2511 amended the IRC of 1986 to provide tax incentives to
encourage energy conservation, energy reliability, and energy
production.
The provisions of H.R. 2511 were incorporated into H.R. 4,
the ``Securing America's Future Energy Act,'' a broad-based
energy bill introduced by Representative Tauzin on July 27,
2001. The bill passed the House on August 2, 2001, and passed
the Senate, with amendment, by unanimous consent on April 25,
2002. A conference report had not been agreed to prior to the
adjournment of the 107th Congress.
In summary, the tax title of H.R. 4, as passed by the
House, contained three sections: conservation, reliability, and
production.
The conservation portion of the bill: allowed a 15-percent
credit, up to $2,000, for individuals who purchase qualified
photovoltaic or solar water heating property; extended and
expanded the section 45 credit for electricity produced from
certain renewable resources (wind, closed- and open-loop
biomass, and landfill gas) for 5 years; allowed a 10-percent
credit for individuals and businesses, up to $1,000 per
kilowatt of capacity, for the purchase of qualified fuel cell
power plants; allowed a credit to individuals and businesses
who purchase qualified fuel cell motor vehicles, hybrid motor
vehicles, alternative fuel motor vehicles, and advanced clean
burn vehicles, and extended and expanded the existing tax
credit for electric vehicles; allowed a business credit for the
manufacture of certain high-efficiency appliances; allowed a
20-percent credit, up to $2,000, to individuals who make
qualified energy efficiency improvements for their existing
homes and a credit to eligible contractors, up to $2,000 for
each new home they construct that is 30 percent more efficient
than a national model home; allowed a deduction, up to $2.25
per square foot, for energy-efficient commercial building
property expenditures that reduce the total energy and power
costs by at least 50 percent; allowed a $30 deduction for the
installation of qualified energy management devices and a 3-
year cost recovery period for such devices; allowed a 10-
percent credit for the purchase of combined heat and power
property; held taxpayers harmless from the alternative minimum
tax for new credits in the bill; repealed the 4.3-cents-per-
gallon General Fund excise tax on rail and barge fuels;
provided a reduced tax rate for diesel/water emulsion fuel; and
allowed a 10-percent investment credit and a production credit
for investments in qualified clean coal technologies.
The reliability portion of the bill: clarified that natural
gas gathering lines are 7-year property for depreciation
purposes; treated natural gas distribution lines as 10-year
property for depreciation purposes; treated petroleum refining
property as 7-year property for depreciation purposes; allowed
small refiners 75 percent expensing of capital costs incurred
and a credit for production in complying with the Environmental
Protection Agency (EPA) low-sulfur diesel regulations; defined
small refiners for purposes of percentage depletion as refiners
whose refining operations do not run more than 75,000 barrels
of production on a daily average; modified current law to allow
municipal utilities, investor-owned utilities, and rural
electric co-operatives to compete in a deregulated electric
market; repealed the diesel fuel and kerosene-dyeing mandate;
and exempted certain prepayments for natural gas for tax-exempt
bond arbitrage rules.
The production portion of the bill: created a $3 per barrel
credit on the first three barrels of daily production from such
wells and a corresponding 50-cents per thousand cubic feet
(Mcf) on the first 18 Mcf of natural gas from a marginal well,
with the credit phasing out when oil prices exceed $15 per
barrel or natural gas prices exceed $1.67 per Mcf; suspended
the 65 percent of taxable income limitation on percentage
depletion through December 31, 2006, and extended suspension of
the 100 percent of net income limit with respect to marginal
production through December 31, 2006; allowed delay rental
payments and geological and geophysical expenditures to be
deducted; created a 5-year carry-back of oil and gas net
operating losses for oil and gas producers; extended and
modified the credit for producing fuel from non-conventional
sources through December 31, 2006; allowed certain business
energy credits against the alternative minimum tax; repealed
alternative minimum tax preference for intangible drilling
costs; and extended accelerated depreciation and wage credit
benefits for energy-related business on Indian lands through
December 31, 2006.

e. Expansion of Renewal Communities

On October 11, 2001, Representative LaFalce introduced H.R.
3100, a bill to amend the IRC of 1986 to allow for the
expansion of areas designated as renewal communities basedon
2000 census data. The Committee discharged the bill on October 7, 2002,
and the House approved the bill by unanimous consent on the same day.
The Senate did not act on the bill.
In summary, the bill allowed the U.S. Department of Housing
and Urban Development to expand an existing Renewal Community
to include additional census tracts that now qualify under the
2000 census data if such an expansion is requested by the
Renewal Community's nominating entity. (Under present law,
census tracts qualify based on 1990 Census data.) The
additional census tracts cannot cause the total Renewal
Community to exceed the original population limitation
(200,000). The additional census tracts would be required to
meet the present law requirement that at least 20 percent of
the population be at or below the poverty rate.

f. Employee Retirement Savings Bill of Rights

On February 4, 2002, Representative Portman introduced H.R.
3669, the ``Employee Retirement Savings Bill of Rights.'' The
Committee approved H.R. 3669, with an amendment, on March 14,
2002. The bill was approved by voice vote.
On February 14, 2002, Representative Boehner introduced
H.R. 3762, the ``Pension Security Act of 2002.'' The Committee
on Education and the Workforce approved H.R. 3762, with an
amendment, on March 20, 2002. The provisions of H.R. 3762 were
similar to those contained in H.R. 3669.
On February 26, 2002, the Committee held a hearing on
retirement security and defined contribution pension plans. The
hearing examined the rules and regulations that currently
govern private defined contribution pension plans, including
rules regarding diversification of plan assets, restrictions
placed on plan assets, standards for investment education and
advice, and notice and reporting requirements. On March 5,
2002, the Subcommittee on Oversight held a hearing to examine
employer and employee views on retirement security.
On April 11, 2001, the House passed H.R. 3762, with an
amendment. The amendment passed by the House reflected a
combination of the provisions in H.R. 3669 (as passed by the
Committee) and H.R. 3762 (as passed by the Committee on
Education and the Workforce). The Senate did not act on H.R.
3762.
In summary, H.R. 3762 (as passed by the House) required
employers to provide plan participants with quarterly pension
benefit statements (in the case of defined contribution plans).
The requirement did not apply to plans that are not covered by
the Employee Retirement Income Security Act (ERISA). In
addition, the bill required employers to provide participants
with investment education notices. Different requirements
applied to plans not covered by ERISA.
In addition, H.R. 3762 established new diversification
requirements. The bill prohibited employers from requiring
employees to invest their own pension contributions in company
stock. Employer contributions could be invested in company
stock, but employees must have the right to sell the stock
after 3 years of service with the employer or after holding the
stock in the account for 3 years. A 5-year transition rule
applied for company stock already in the account when the new
requirements take effect. The new diversification rules did not
apply to plans that hold no publicly-traded securities or to
certain types of Employee Stock Ownership Plans.
The bill allowed employees to purchase retirement planning
services (including professional investment advice) from an
outside adviser using pre-tax dollars that are automatically
deducted from their paychecks. In addition, the provisions of
H.R. 2269 were included in the bill (see I.A.2b).
H.R. 3762 also included several provisions contained in
H.R. 10, the ``Comprehensive Retirement Security and Pension
Reform Act of 2001.'' Although most of the provisions of H.R.
10 were enacted in P.L. 107-16 (see I.A.1b), some provisions
were not included in the final law because of procedural rules
in the Senate that allow a point of order to be raised against
certain measures in reconciliation bills.
H.R. 3762 also included provisions relating to minimum
funding requirements and variable rate premiums assessed by the
Pension Benefit Guaranty Corporation. Finally, H.R. 3762
clarified that the exercise of incentive stock options and
stock purchased pursuant to an Employee Stock Purchase Plan
does not give rise to wage income that is subject to payroll
taxes or income tax withholding.

g. Taxpayer Protection and IRS Accountability Act

On March 19, 2002, Representative Houghton introduced H.R.
3991, the ``Taxpayer Protection and IRS Accountability Act.''
The Committee approved the bill, with an amendment, on March
20, 2002. The bill was considered in the House under suspension
of the rules on April 10, 2002, but failed to receive the
necessary two-thirds vote required for passage.
Most of the provisions of H.R. 3991 (except those related
to section 527 of the IRC) were included in H.R. 586 (see
I.A.3a). H.R. 586 passed the House on April 18, 2002, but was
not considered by the Senate. Some of these provisions were
subsequently included in H.R. 5728 (see I.A.2m). H.R. 5728
passed the House by unanimous consent on November 14, 2002, but
was not considered by the Senate.
In summary, H.R. 3991 included many provisions previously
passed by the House in the 106th Congress as part of H.R. 4163,
the ``Taxpayer Bill of Rights 2000.'' The bill addednew
provisions to further assist and protect taxpayers and to improve the
accountability of the IRS. The bill included an exclusion from gross
income for interest that is paid by the IRS to individual taxpayers on
overpayments of Federal income tax. The Secretary was given authority
to address situations where taxpayers inappropriately took advantage of
the exclusion. Furthermore, H.R. 3991 allowed taxpayers to limit their
exposure to underpayment interest through the use of a qualified
reserve account. Amounts deposited in a qualified reserve account could
either be withdrawn with interest or used to offset an underpayment of
tax.
H.R. 3991 also allowed taxpayers to enter into installment
agreements that do not fully satisfy their tax obligations. The
IRS was required to re-evaluate the taxpayer's ability to pay
at least once every 2 years during the running of the 10-year
statute of limitations on collections. Taxpayers gained further
protections under the bill through provisions that made
unauthorized browsing of taxpayer records one of the ``10
deadly sins'' and granted the IRS Commissioner authority to
specify penalties up to and including termination for improper
activities by IRS employees.
The legislation also increased the total authorization of
grant funding for low-income taxpayer clinics (from $6 million
to $15 million) over 3 years. It also included a provision to
correct the double-reporting problem that State and local
campaign and political committees experienced in the wake of
P.L. 106-230, the law that mandated contribution and
expenditure reporting to the IRS for all organizations
receiving tax-preferred status under IRC section 527.

h. Encouraging Work and Supporting Marriage Act

On May 1, 2002, Representative Houghton introduced H.R.
4626, the ``Encouraging Work and Supporting Marriage Act of
2002.'' The Committee approved the bill, with an amendment, by
voice vote on May 2, 2002. The House passed the bill under
suspension of the rules on May 21, 2002. The Senate did not act
on the bill.
In summary, H.R. 4626 accelerated the scheduled increase in
the standard deduction for married couples filing a joint tax
return. The scheduled increase was enacted in P.L. 107-16. (See
I.A.1b.)
In addition, the bill modified the work opportunity credit
by: (1) repealing the family income test applicable to
``qualified ex-felons'' under present law, (2) increasing the
maximum age for eligibility of food stamp recipients from 25 to
30 years, and (3) redefining the term ``vocational
rehabilitation referral'' to reflect changes made in the
``Ticket to Work and Work Incentives Improvement Act of 1999''
(P.L. 106-170).
Finally, the bill simplified the administration of the work
opportunity and welfare-to-work credits by merging the two
credits and conforming their rules.

i. Improving Access to Long-Term Care Act

On June 17, 2002, Representative Hayworth introduced H.R.
4946, the ``Improving Access to Long-Term Care Act of 2002.''
The Committee approved the bill, with an amendment, on June 19,
2002. The House approved the bill under suspension of the rules
on July 25, 2002. The Senate did not act on the bill.
In summary, H.R. 4946 provided an above-the-line deduction
for a percentage of qualified long-term care insurance
premiums. The deductible percentage of qualified long-term care
insurance premiums was phased-in over 10 years from 25 percent
to 50 percent. The deduction was available for individuals with
adjusted gross income between $20,000 and $40,000 (twice this
amount for married couples filed jointly).
In addition, the bill provided an additional personal
exemption to home caregivers of family members. The additional
personal exemption was phased-in from $500 in 2003 to the full
exemption amount in 2012 for each qualified family member with
long-term care needs. (Under present law, the personal
exemption amount for 2002 is $3,000.)
Finally, the bill provided additional consumer protections
for long-term care insurance policies, expanded human clinical
trial expenses qualifying for the ``orphan drug'' tax credit,
added the vaccine against Hepatitis A to the list of taxable
vaccines, and modified Medicare+Choice medical savings accounts
(MSAs) by permitting individuals who have a Medicare+Choice MSA
to also have an Archer MSA and allowing employers to make
contributions to an Archer MSA on behalf of a Medicare eligible
individual.

j. Tax Relief for Members of the Military

On July 8, 2002, Representative Houghton introduced H.R.
5063, the ``Armed Forces Tax Fairness Act of 2002.'' The
Committee did not consider the bill. The House approved the
bill under suspension of the rules on July 9, 2002.
The Senate Committee on Finance approved H.R. 5063, with an
amendment, on September 12, 2002. The Senate passed H.R. 5063,
with an amendment, by unanimous consent on October 3, 2002.
On October 7, 2002, Chairman Thomas introduced H.R. 5557,
the ``Armed Forces Tax Fairness Act of 2002.'' H.R. 5557
included the provisions of H.R. 5063 as passed by the House
(with some modifications). It also included several provisions
contained in the Senate-passed version of H.R. 5063. H.R. 5557
passed the House under suspension of the rules on October 9,
2002. The Senate passed H.R. 5557, with an amendment, by
unanimousconsent on November 14, 2002. The House did not act on
the Senate amendment prior to adjourning.
In summary, H.R. 5557 (as passed by the House) allowed
members of the uniformed services or Foreign Services to
suspend (for up to 5 years) the 5-year period used to determine
the exclusion of gain from the sale of such residence if the
taxpayer is serving on qualified official extended duty in
government quarters or at least 150 miles from their principal
residence.
The bill also restored the tax-exempt status of the $6,000
death gratuity payment paid to survivors of members of the
Armed Services (only $3,000 is excludible under present law).
The bill also provided an exclusion from gross income for
amounts received under the U.S. Department of Defense
Homeowners Assistance Program. In addition, the bill clarified
that benefits provided under certain dependent care assistance
programs are excludible from gross income.
H.R. 5557 also extended certain rules concerning the
postponement of certain acts under the IRC (such as filing, tax
payments, etc.) to contingency operations. Such rules presently
apply only to taxpayers serving in a combat zone. The bill also
permitted ancestors and lineal descendants of past or present
members of the Armed Forces to be taken into account in
determining whether a veterans' organization qualifies for tax-
exempt status.
The Senate amendment added several provisions to the House-
passed version of H.R. 5557. First, the Senate amendment
provided an above-the-line deduction of up to $1,500 for
unreimbursed overnight travel, meals, and lodging expenses
incurred by National Guard and Reserve members who must travel
100 miles away from home and stay overnight as part of their
official duties. Second, the amendment clarified that
appointments to a military academy are treated as scholarships
for purposes of payments to and distributions from Coverdell
Education Savings Accounts and Qualified Tuition Programs.
Third, it suspended the tax-exempt status of designated
terrorist organizations and prohibited taxpayers from deducting
contributions made to such organizations. This provision is
similar to language in H.R. 5603, which passed the House by
unanimous consent on October 16, 2002. Fourth, the amendment
extended IRS user fees through September 30, 2012. Finally, it
authorized the IRS to enter into partial payment installment
agreements with taxpayers.

k. Back to School Act

On July 23, 2002, Representative Schaffer introduced H.R.
5193, the ``Back to School Tax Relief Act of 2002.'' The
Committee approved the bill, with an amendment, on September 5,
2002. The bill was not considered by the House or the Senate.
In summary, the bill provided an above-the-line deduction
for up to $3,000 of qualified elementary and secondary
education expenses each year. The deduction was limited to
taxpayers whose adjusted gross income is $20,000 or less
($40,000 in the case of married couples filing jointly). The
deduction expired after tax year 2005.

l. Retirement Savings and Security Act

On October 7, 2002, Chairman Thomas introduced H.R. 5558,
the ``Retirement Savings and Security Act of 2002.'' The
Committee approved the bill, with an amendment, on October 8,
2001. The bill included provisions similar to some of the
provisions contained in H.R. 5553, the ``Protecting America's
Savings Act of 2002,'' introduced by Representative Portman on
October 3, 2002. H.R. 5558 was not considered by the House or
the Senate.
In summary, H.R. 5558 accelerated the scheduled increases
in the annual contribution limits for IRAs, qualified pension
plans, SIMPLE plans, and eligible plans of a State or local
government or tax-exempt organization (457 plans). The bill
also accelerated the scheduled increases in catch-up
contribution limits applicable to these plans. These scheduled
increases were enacted in the ``Economic Growth and Tax Relief
Reconciliation Act of 2001'' (P.L. 107-16) (see I.A1b).
H.R. 5558 also gradually increased the age at which
mandatory distributions must be made from IRAs and qualified
pension plans from age 70\1/2\ to age 75.

m. Tax Administration Act

On November 14, 2002, Chairman Thomas introduced H.R. 5728,
the ``Tax Administration Act of 2002.'' The Committee
discharged the bill on November 15, 2002, and the House passed
the bill by unanimous consent on the same day. The Senate did
not act on the bill.
In summary, H.R. 5728 contained 30 provisions to reform the
penalty and interest provisions of the IRC, improve
administrative efficiency, further safeguard taxpayer
confidentiality, and enhance the fairness of the tax collection
process. These provisions were included in Title II of H.R.
586, which provided for the permanency of the Economic Growth
and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) (see
I.A.3a).

3. OTHER TAX MATTERS

a. Permanency of Provisions in Economic Growth and Tax Relief
Reconciliation Act of 2001 (P.L. 107-16)

On June 7, 2001, the Economic Growth and Tax Relief
Reconciliation Act of 2001 was signed into law (P.L. 107-16)
(see I.A.1b). The provisions of the new law are scheduled
toexpire (or ``sunset'') after December 31, 2010, because of a
procedural rule that permits Senators to raise a point of order against
extraneous provisions in a reconciliation bill. Under this rule,
provisions with a revenue effect outside the 10-year revenue-estimating
period are, by definition, extraneous. The sunset provision was
included in the bill to prevent a point of order.
Making the Provisions of P.L. 107-16 Permanent
On February 13, 2001, Representative Lewis introduced H.R.
586, the ``Fairness for Foster Care Families Act of 2001.'' As
introduced, the bill provided that the income exclusion for
State or local government foster care payments also applied to
payments made by any qualifying placement agency. The bill also
expanded the definition of a qualified foster individual to
include a foster care individual placed by any qualified
placement agency (thus eliminating the restriction of State or
local government agency or a tax-exempt agency placement
applicable to individuals under the age of 19). On May 9, 2001,
the Committee approved the bill, with an amendment. The bill
passed the House under suspension of the rules on May 15, 2001,
and passed the Senate, with an amendment, by unanimous consent
on February 6, 2002. The provisions of H.R. 586 were included
in H.R. 3090, the ``Job Creation and Worker Assistance Act of
2002'' (P.L. 107-147), which was signed into law on March 9,
2002 (see I.A.1h).
On April 17, 2002, the Committee on Rules reported H. Res.
390 to the House. The resolution provided for the consideration
of the Senate amendment to H.R. 586 with an amendment. The
amendment substituted the language in the Senate-passed version
of H.R. 586 with a provision to repeal the sunset provision of
P.L. 107-16. Thus, the amendment would have permanently
extended all of the provisions in P.L. 107-16 to which the
sunset applied. In addition, the amendment would have
permanently extended the increase in the exemption amount in
the alternative minimum tax applicable to individuals, which is
scheduled to expire after December 31, 2005. Finally, the
amendment included most of the provisions of H.R. 3991, the
``Taxpayer Protection and IRS Accountability Act of 2002'' (see
I.A.2g). The House passed the amendment on April 18, 2002.
Making Certain Provisions of P.L. 107-16 Permanent
On June 12, 2001, Representative Weldon introduced H.R.
2143, the ``Permanent Death Tax Repeal Act of 2001.'' The bill
repealed the sunset provision in the Economic Growth and Tax
Relief Reconciliation Act of 2001 as it applied to the estate
and gift tax provisions of that Act. The bill passed the House
on June 6, 2002. The Senate did not act on the bill.
On March 20, 2002, Representative Weller introduced H.R.
4019, a bill to provide that the marriage penalty relief
provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 shall be permanent. The bill passed the House on
June 13, 2002. The Senate did not act on the bill.
On May 22, 2002, Representative Camp introduced H.R. 4800,
a bill to repeal the sunset provision in the Economic Growth
and Tax Relief Reconciliation Act of 2001 with respect to the
expansion of the adoption credit and adoption assistance
programs. The bill passed the House under suspension of the
rules on June 4, 2002. The Senate did not act on the bill.
On May 22, 2002, Representative Shaw introduced H.R. 4823,
the ``Holocaust Restitution Tax Fairness Act of 2002.'' The
bill was signed into law on December 17, 2002 (see I.A.1n).
On June 13, 2002, Representative Portman introduced H.R.
4931, the ``Retirement Savings Security Act of 2002.'' The bill
repealed the sunset provision in the Economic Growth and Tax
Relief Reconciliation Act of 2001 as it applied to the pension
reform provisions of that Act. The bill passed the House on
June 21, 2002. The Senate did not act on the bill.
On July 24, 2002, Representative Hulshof introduced H.R.
5203, the ``Education Savings and School Excellence Permanence
Act of 2002.'' The bill repealed the sunset provision in the
Economic Growth and Tax Relief Reconciliation Act of 2001 as it
applied to the Coverdell Education Savings Account and
Qualified Tuition Program provisions of that Act. In addition,
the bill clarified that distributions from a Coverdell
Education Savings Account could be used to pay qualified home
school expenses. The bill also clarified that appointments to a
military academy are treated as scholarships for purposes of
payments to and distributions from Coverdell Education Savings
Accounts and Qualified Tuition Programs (this provision was
also included in H.R. 5557, the ``Armed Forces Tax Fairness Act
of 2002,'' as passed by the Senate on November 14, 2002 (see
I.A.2j)). The bill failed to pass the House under suspension of
the rules on September 4, 2002 because it did not receive the
two-thirds vote necessary for passage.

b. Water Quality Financing Act

On March 12, 2002, Representative Duncan introduced H.R.
3930, the ``Water Quality Financing Act of 2002.'' The bill
included several provisions that would increase spending on
water and sewage facilities. In addition, the bill contained
two revenue provisions that amended the rules relating to
private activity bonds. First, the bill provided that private
activity bonds used to finance water and sewage facilities
would be exempt from the State volume caps that limit the
amount of private activity bonds that may be issued annually.
Second, the bill liberalized the arbitrage restrictions to
exclude any amounts derived from a Federal grant or related
State contribution made in connection with certain revolving
loan funds.
The Committee approved the bill, with an amendment, on
April 17, 2002. The amendmentapproved by the Committee deleted
the two revenue provisions from the underlying bill. H.R. 3930 was not
considered by the House or the Senate.

c. War Bonds Act

On September 17, 2001, Representative Sweeney introduced
H.R. 2899, the ``Freedom Bonds Act of 2001.'' The bill
authorized the Secretary of the Treasury to designate ``Freedom
Bonds'' in response to the acts of terrorism perpetrated
against the United States on September 11, 2001. Proceeds from
the sale of the bonds could be used to help finance the war
against terrorism.
The House passed H.R. 2899 by voice vote on October 23,
2001. The Senate did not act on the bill. However, the U.S.
Department of the Treasury announced its intention to re-
designate existing savings bonds as ``Patriot Bonds.'' The
redesignation of an existing series of savings bonds does not
require legislative action.

d. House Resolutions

The House passed several House Resolutions expressing the
sense of the House that Congress should complete action on
various legislation so that it may be signed into law.
On September 17, 2002, Representative Jim Nussle introduced
H. Res. 524, expressing the sense of the House that Congress
should complete action on the H.R. 2143, ``Permanent Death Tax
Repeal Act of 2002'' (see I.A.3a), which would make permanent
the estate and gift tax provisions of the Economic Growth and
Tax Relief Reconciliation Act of 2001 (P.L. 107-16). The House
agreed to the resolution on September 19, 2002.
On September 19, 2002, Representative Pickering introduced
H. Res. 540, expressing the sense of the House that Congress
should complete action on H.R. 3762, the ``Pension Security Act
of 2002'' (see I.A.2f). H.R. 3762 provided several pension
protections for workers who participate in employer-sponsored
pension plans. The House agreed to the resolution on September
25, 2002.
On September 24, 2002, Representative Weller introduced H.
Res. 543, expressing the sense of the House that Congress
should complete action on H.R. 4019, making marriage tax relief
permanent (see I.A.3a). The House agreed to the resolution on
October 2, 2002.
On September 24, 2002, Representative Sullivan introduced
H. Res. 544, expressing the sense of the House on permanency of
pension reform provisions included in the Economic Growth and
Tax Relief Reconciliation Act of 2001 (P.L. 107-16) (see
I.A.3a). The House agreed to the resolution on September 25,
2002.

4. OTHER HEARINGS ON TAX, TRUST FUND, AND PENSION PROPOSALS

a. Tax Code Simplification

On July 17, 2001, the Subcommittees on Oversight and Select
Revenue Measures held a hearing on tax code simplification. The
hearing focused on the nature and cost of complexity in the tax
code and the options for simplification. The Subcommittees
examined proposals by the National Taxpayer Advocate and the
Joint Committee on Taxation (JCT).

b. Extraterritorial Income Regime

On February 27, 2002, the Committee held a hearing to
examine the decision by the World Trade Organization (WTO) that
the Extraterritorial Income (ETI) regime is a prohibited export
subsidy. Subsequently, the Subcommittee on Select Revenue
Measures held hearings on April 10, May 9, and June 13, 2002 to
examine possible legislative solutions to bring the tax code
into compliance with the WTO's decision. The Subcommittee
examined: (1) whether adjustments could be made to the existing
ETI regime to bring it into compliance, (2) whether fundamental
reform of the current corporate tax system is a viable
alternative to the ETI regime, and (3) proposals to modify the
tax code to promote the competitiveness of U.S. companies while
meeting international obligations under the WTO.
On July 11, 2002, Chairman Thomas introduced H.R. 5095, the
``American Competitiveness and Corporate Accountability Act of
2002.'' The bill would repeal the ETI regime, improve and
simplify the U.S. international tax system, increase the
competitiveness of U.S. companies, and require increased
corporate accountability.

c. Land Use, Conservation, and Preservation

On April 30, 2002, the Subcommittee on Select Revenue
Measures held a hearing on the effect of Federal tax laws on
land use, conservation, and preservation. The focus of the
hearing was to examine proposals to expand the tax incentives
available to individuals and groups seeking to preserve open
spaces and promote conservation.

d. Modeling the Economic Effect of Changes in Tax Policy

On May 7, 2002, the Subcommittee on Oversight held a
hearing to review the economic models and assumptions that are
used in current revenue estimating processes and to explore
ways to improve overall forecasting and analysis regarding
legislation before the Committee on Ways and Means and
Congress.

e. Tax Incentives for Renewal Communities

On May 21, 2002, the Subcommittee on Oversight held a
hearing to examine ways in which Renewal Communities plan to
use available tax incentives to attract business investment to
their communities and to highlight potentially useful models
from Empowerment Zone activities.

f. Inversions

On June 6, 2002, the Committee held a hearing to examine
the mechanics of inversion transactions and examine policy
options that will deter inversions and enhance U.S.
international competition. Subsequently, the Subcommittee on
Select Revenue Measures held a hearing on June 25, 2002, to
examine further options to deter inversions and increase the
competitiveness of U.S. businesses in the global marketplace.
On July 11, 2002, Chairman Thomas introduced H.R. 5095, the
``American Competitiveness and Corporate Accountability Act of
2002.'' Among other provisions, the bill would deter future
inversion transactions.

g. Retirement Security and Defined Benefit Plans

On June 20, 2002, the Subcommittee on Oversight held a
hearing to examine the role of defined benefit plans in
retirement security, the rules and regulations governing
defined benefit pension plans, the advantages and disadvantages
of offering and participating in such plans, and
recommendations for improving coverage in defined benefit
pension plans.

B. Legislative Review of Trade Issues

1. TRADE PROMOTION AUTHORITY

a. Trade Act of 2002

On August 6, 2002, the President signed into law H.R. 3009,
the Trade Act of 2002 (P.L. 107-210), which included the
Bipartisan Trade Promotion Authority Act of 2002, the Trade
Adjustment Assistance Reform Act of 2002, the Andean Trade
Promotion and Drug Eradication Act, the Customs Border Security
Act of 2002, and a number of miscellaneous provisions. Each of
these bills included in the Trade Act arose from separate
legislation (provisions from H.R. 3005, H.R. 3008, H.R. 3009,
and H.R. 3010), and the history and the content of these bills
are discussed throughout this report.

b. Trade Promotion Authority

i. Legislation
On October 3, 2001, Chairman Thomas, on behalf of himself
and Representatives Crane, Dreier, Jefferson, Tanner, and
Dooley, introduced H.R. 3005, the Bipartisan Trade Promotion
Authority Act of 2001. On October 5 and October 9, the
Committee met to consider the legislation. At that time,
Chairman Thomas offered an amendment in the nature of a
substitute, which was agreed to by voice vote. Representative
Rangel offered an amendment in the nature of a substitute,
which was defeated by a recorded vote of 12 yeas, 26 nays, and
1 present. On October 9, the Committee on Ways and Means
favorably reported the bill, as amended, by a recorded vote of
26 yeas to 13 nays (H. Rept. 107-249).
On December 6, 2001, the House passed H.R. 3005, as
amended, by a recorded vote of 215 to 214. The House defeated a
motion to recommit with instructions offered by Representative
Rangel by a vote of 162 to 267.
On December 12, 2001, the Senate Committee on Finance
reported out its version of H.R. 3005, which included
amendments to the House-passed version of Trade Promotion
Authority (TPA) (S. Rept. 107-139). On May 23, 2002, the Senate
agreed to an amendment to include its version of Trade
Promotion Authority, the Andean Trade Promotion and Drug
Eradication Act, TAA, the Generalized System of Preferences
(GSP), and other miscellaneous provisions as a substitute
amendment to the House-passed H.R. 3009, the Andean Trade
Promotion and Drug Eradication Act, by a vote of 66 to 30.
On June 26, 2002, the House, pursuant to H. Res. 450,
agreed to the Senate amendment with an amendment to include the
House versions of Trade Promotion Authority, the Andean Trade
Promotion and Drug Eradication Act, TAA, and the GSP, by a vote
of 216 to 215. A conference committee to reconcile the House
and Senate versions of H.R. 3009 was then formed, chaired by
Chairman Thomas.
On July 27, 2002, the House passed the conference report to
H.R. 3009 by a recorded vote of 215 to 212. On August 1, the
Senate passed the conference report by a vote of 64 to 34. On
August 6, 2002, the President signed the bill into law (P.L.
107-210).
As enacted, the Bipartisan Trade Promotion Authority Act of
2002 grants Trade Promotion Authority to the President through
July 1, 2005, with an extension through July 1, 2007, subject
to disapproval. This authority provides that once the President
formally submits to Congress legislation to implement a trade
agreement, Congress must consider the legislation within
certain deadlines and without amendment. In return, the
Congress provides the Administration with detailed guidance on
its objectives for such negotiations and improves consultations
between the Administration and Congress, before, during, and
after negotiations of a trade agreement. In addition, the bill
establishes a new Congressional Oversight Group (COG) (see
below) to provide an opportunity for consultation with the
Administration by all committees with jurisdiction over laws
that might be affected by a trade agreement.
The legislation contains principal negotiating objectives
relating to agriculture, goods, services, investment,
intellectual property, transparency, anti-corruption, and
electronic commerce. The objectives also direct the President
to preserve the ability of the United States to enforce
rigorously its trade laws, avoid agreements that lessen the
effectiveness of unfair trade disciplines, and address and
remedy market distortions that lead to dumping and
subsidization. With regard to labor and environment, the
legislation directs the President to ensure that parties to
trade agreements do not fail to effectively enforce their labor
or environmental laws through a sustained course of action or
inaction in a manner affecting trade. With respect to
enforcement, the legislation directs the President to seek
enforcement mechanisms in trade agreements that will result in:
the effective and timely resolution of disputes; the provision
of trade-liberalizing compensation; the imposition of
appropriate penalties to the situation with the aim of not
adversely affecting interests not party to the dispute while
maintaining the effectiveness of the enforcement mechanism; and
treating all U.S. principal negotiating objectives equally with
respect to ability to use dispute settlement, availability of
equivalent procedures, and availability of equivalent remedies.
The legislation also contains a number of other important
priorities for the President in conducting negotiations, such
as capacity building and reports.
The legislation provides that TPA would not apply to an
agreement if both Houses separately agree to a procedural
disapproval resolution within any 60-day period stating that
the Administration has failed to consult with Congress. In
addition, the legislation requires the President to provide a
180-day advance report on any proposals advanced in trade
negotiations that could require amendments to trade remedy
laws, and any Member may introduce a privileged non-binding
resolution which identifies whether the proposals referred to
in the President's report are consistent with the trade remedy
negotiating objectives. If such a resolution is reported by the
Committee, then a disapproval resolution for failure to consult
is not in order, and vice versa. Finally, the statute does not
include the so-called ``Dayton-Craig Amendment,'' included in
the Senate version of the bill, which would have prohibited the
use of TPA procedures for any changes to U.S. trade remedy
laws.
ii. Hearing on President Bush's Trade Agenda for 2001
On March 7, 2001, the Committee held a hearing on President
Bush's trade agenda for 2001. This hearing addressed the
content and strategy of trade negotiations in which the United
States is participating, including negotiations to establish
the Free Trade Area of the Americas (FTAA) and on the World
Trade Organization (WTO) ``built-in agenda'' on services and
agriculture. The Committee also reviewed the status of
preparations to launch a new round of multilateral negotiations
in the WTO and progress in negotiations to establish trade
agreements with Singapore, Chile, and other nations in the
Pacific Rim region. Finally, the Committee analyzed the
relationship of these negotiations to trade negotiating
authority and whether the United States was disadvantaged by
not having the authority in place.
iii. Hearing on President Bush's Trade Agenda for 2002
Following passage of H.R. 3005, legislation to grant the
President Trade Promotion Authority, the Committee held a
hearing on February 7, 2002, to address President Bush's trade
agenda for 2002 and the content and strategy of these trade
negotiations. At this hearing, the Committee also examined: (1)
the success of the WTO Ministerial Meeting which launched the
Doha Development Agenda, a new round of multilateral trade
negotiations; and (2) progress in negotiations with Chile and
Singapore, in light of House passage of H.R. 3005.
iv. Field Hearing on Benefits of Trade to the Medical
Technology and Agriculture Sectors
The Subcommittee held a field hearing on the benefits of
trade to the medical technology and agriculture sectors in
Bloomington, Minnesota, on May 14, 2001. The goals of this
field hearing were to promote awareness of trade issues
affecting the medical technology and agriculture industries and
to examine the importance of international markets for both of
these industries. Witnesses, including Minnesota Governor
Ventura, focused on significant trade issues such as
challenging foreign-imposed non-tariff barriers on U.S. medical
technology and agriculture products, the negotiations in the
WTO on services and agriculture, China's entry into the WTO,
and the long-standing trade dispute with the European Union
(EU) over genetically modified organisms.
v. Hearing on Free Trade Deals and Whether the United
States Is Losing Ground
On March 29, 2001, the Trade Subcommittee held a hearing on
the increasing number of bilateral and regional trade
agreements to which the United States is not a party and the
implications for the United States. This hearing focused on how
these new trade agreements disadvantage U.S. business, workers,
and families and assessed opportunities for the United States
to move forward with new negotiations.

c. Congressional Oversight Group

i. Trade Act of 2002
Section 2017 of the Trade Act of 2002 (P.L. 107-210)
establishes the COG, to be co-chaired by the Chairmen of the
House Committee on Ways and Means and the Senate Committee on
Finance and to be comprised of the Chairman and Ranking Member
of those Committees of the House and Senate which would have
jurisdiction over provisions of law affected by trade agreement
negotiations during this Congress. The purpose of the COG is to
provide the President and the United States Trade
Representative (USTR) with adviceregarding the formulation of
specific objectives, negotiating strategies and positions, the
development of trade agreements, and compliance and enforcement of
negotiated commitments under trade agreements.
ii. Operation of the COG
In mid-September 2002, Chairman Thomas invited the Chairmen
and Ranking Members of the following Committees of the House to
participate in the COG: Committees on Ways and Means (total of
five Members); Agriculture, Energy and Commerce, Financial
Services, Judiciary, Rules, International Relations, Government
Reform and Oversight, and Resources. In addition, he invited
the Chairmen and Ranking Members of the Committees on Education
and the Workforce and Small Business to participate in the
organizational meeting of the COG. The first meeting of the COG
was held on September 19, 2002. In addition, Chairman Thomas
convened a sub-group of the House COG on September 26, 2002, to
discuss specific issues relating to the Chile and Singapore
free trade agreement negotiations.

2. MULTILATERAL TRADE ISSUES

a. Foreign Sales Corporations

On January 14, 2002, the WTO Appellate Panel issued its
report finding the United States Extraterritorial Income
Exclusion Act (ETI) rules to be a prohibited export subsidy,
marking the fourth and final time in 2\1/2\ years that the
United States has lost this issue, twice in the Foreign Sales
Corporation (FSC) case and twice in the ETI case. On August 30,
2002, a WTO Arbitration Panel authorized the EU to apply trade
sanctions in the amount of $4 billion against U.S. exports to
the EU.
On February 27, 2002, the Committee held a hearing on the
WTO decision in order to (1) outline the history of the FSC-ETI
dispute, (2) analyze the January 14, 2002, WTO Appellate Panel
Decision, and (3) discuss the potential trade ramifications of
the decision. Officials from the U.S. Department of the
Treasury and the USTR, as well as representatives from the
business community, testified at the hearing.
On July 11, 2002, Chairman Thomas introduced H.R. 5095, the
American Competitiveness and Corporate Accountability Act of
2002, in order to put the United States in compliance with its
WTO obligations and to address competitiveness and corporate
accountability issues. A fuller discussion of this legislation
and other hearings of the Committee is located in the tax
section of this report.

b. Administration Notification of WTO Negotiations

On November 4, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the United States
is engaged in negotiations to strengthen and extend as well as
establish new trade agreements under the auspices of the World
Trade Organization.

c. U.S. General Accounting Office (GAO) Report on Doha Round

On September 4, 2002, the Committee received a GAO report,
requested by Chairman Thomas, Subcommittee Chairman Crane, and
Senator Grassley, on the preparations for and the outcome of
the Doha Ministerial Meeting, held in November 2001, which
succeeded in launching a new round of multilateral trade
negotiations. In this report, GAO analyzed the factors that
contributed to the meeting's successful outcome and evaluated
the most significant challenges to the WTO in the overall
negotiations.

d. H. Con. Res. 262

On November 7, 2001, the House passed H. Con. Res. 262 by a
vote of 410 to 4, expressing the sense of Congress on trade
remedies in negotiations in the WTO. The bill was sponsored by
Representatives English, Berry, Brown (OH), Callahan, Dingell,
Doyle, Ehrlich, Evans, Gekas, Houghton, Jones (OH), Myrick,
Ney, Quinn, Shimkus, Spratt, Stupak, and Visclosky. The
resolution urged the President during the WTO Ministerial in
Doha, Qatar, and any subsequent rounds of WTO negotiations to:
avoid an agreement which lessens the effectiveness of domestic
and international disciplines on unfair trade, especially
dumping and subsidies; and ensure that U.S. exports are not
subject to the abusive use of trade laws, including antidumping
and countervailing duty laws, by other countries. No further
action was taken.

3. BILATERAL AND REGIONAL TRADE ISSUES

a. Andean Countries

On March 7, 2001, May 8, 2001, and February 7, 2002, the
Committee held hearings on whether to extend and expand trade
benefits for Colombia, Peru, Ecuador, and Bolivia under the
Andean Trade Preference Act, which expired on December 4, 2001.
On October 3, 2001, Subcommittee Chairman Crane introduced H.R.
3009 to extend and enhance trade benefits available under the
Andean Trade Preferences Act (ATPA) as a way to create viable
alternatives to illicit drug production, thereby enhancing
political security in the Andean region and the hemisphere.
Specifically, the bill expands benefits for apparel made of
U.S. fabric, Andean apparel made of regional fabric subject to
a cap, and certain tuna. On October 5, 2001, the Committee on
Ways and Means approved H.R. 3009, as amended, by voice vote
(H. Rept. 107-290). The House approved H.R. 3009 on November
16, 2001, by voice vote.
On December 14, 2001, the Senate Committee on Finance
reported H.R. 3009, as amended (S. Rept. 107-126). The
amendments adopted by the Senate Committee on Finance differed
from trade provisions in H.R. 3009, as approved by the House,
by requiring that imports of apparel products from the Andean
region qualifying for duty free and quota free entry be made of
U.S. yarn and fabric. In addition, the Senate Committee on
Finance bill provided trade benefits for a small allowance of
knit apparel made from U.S. yarn. On May 23, 2002, the Senate
passed H.R. 3009, as amended. On June 26, 2002, the House
concurred with the Senate amendment with an amendment pursuant
to H. Res. 450, which contained the Andean language already
passed by the House. The conference report was passed by the
House on July 26, 2002, and by the Senate August 1, 2002. The
bill was signed into law on August 6, 2002 (P.L. 107-210).
On January 31, 2001, the Committee received the Third
Report to Congress on the Operation of the Andean Trade
Preference Act, prepared by USTR pursuant to P.L. 102-182.

b. U.S.-Jordan Free Trade Agreement Implementation Act

The United States-Jordan Free Trade Agreement (FTA), signed
on October 24, 2000, was the first FTA with an Arab nation and
was the culmination of many years of increasing U.S.-Jordanian
economic integration. The FTA strengthens U.S.-Jordanian
bilateral relations, expresses the United States' appreciation
for Jordan's role in the Middle East peace process and in
cooperating in international counter-terrorism activities,
promotes economic growth in the Middle East, improves the
region's stability and security, and helps Jordan's efforts to
promote economic reform and liberalization. It also signals to
Jordan's neighbors in the Middle East the benefits to
maintaining peace and instituting open economic regimes.
President Clinton transmitted the agreement to Congress on
January 6, 2001 (H. Doc. 107-15). The Jordanian parliament
ratified the agreement in May 2001. On April 4, 2001, His
Majesty King Abdullah II of Jordan met with the Committee on
Ways and Means to discuss implementation of the FTA.
On July 23, 2001, USTR Robert Zoellick and Jordanian
Ambassador Marwan Muasher exchanged formal and official letters
which discussed the implementation of the agreement's dispute
settlement procedures. In the letters, both countries stated
their intention not to apply the agreement's dispute settlement
enforcement procedures in a manner that results in blocking
trade. The letters also stated that bilateral consultations and
other procedures (i.e., alternative mechanisms) would be
appropriate measures that will help secure compliance without
recourse to traditional trade sanctions.
On July 24, 2001, H.R. 2603, the United States-Jordan Free
Trade Area Implementation Act of 2001, was introduced by
Chairman Thomas and was referred to the Committee on Ways and
Means and to the Committee on the Judiciary. The Committee on
Ways and Means marked up H.R. 2603 and on July 31, 2001,
favorably reported it with an amendment in the nature of a
substitute by voice vote. The Committee on the Judiciary was
discharged from H.R. 2603 on July 31, 2001, following an
exchange of letters between Chairman Thomas and Judiciary
Chairman Sensenbrenner acknowledging the Judiciary Committee's
jurisdiction over certain provisions in H.R. 2603 and agreeing
to forego Judiciary Committee consideration of the bill.
On July 31, 2001, the House passed H.R. 2603 under
suspension by voice vote. On September 24, 2001, the Senate
Committee on Finance was discharged from consideration of H.R.
2603 by unanimous consent, and the Senate approved the bill by
voice vote. On September 28, 2001, H.R. 2603 was signed into
law by the President (P.L. 107-043).

c. Caribbean Basin

H.R. 3009, the Andean Trade Promotion and Drug Eradication
Act, which was approved by the Committee on October 5, 2001, by
voice vote, contained several provisions relating to trade with
Caribbean Basin countries as described below:
1. Knit-to-shape amendment: Draft regulations issued by
Customs to implement P.L. 106-200 stipulate that knit-to-shape
garments, because technically they do not go through the fabric
stage, are not eligible for trade benefits under the Act.
Sections 3106 and 3107 of H.R. 3009 amended P.L. 106-200 to
clarify that preferential treatment is provided to knit-to-
shape apparel articles assembled in beneficiary countries.
2. Hybrid cutting amendment: Draft regulations issued by
Customs to implement P.L. 106-200 deny preferential access to
garments that are cut both in the United States and beneficiary
countries, on the rationale that the legislation does not
specifically list this variation in processing (the so-called
``hybrid cutting problem''). Section 3107 of H.R. 3009 adds new
rules in the Caribbean Basin Trade Partnership Act (CBTPA) to
provide preferential treatment for apparel articles that are
cut both in the United States and beneficiary countries.
3. Increases in caps: P.L. 106-200 extended duty-free
benefits to knit apparel made in CBI countries from regional
fabric made with U.S. yarn and to knit-to-shape apparel (except
socks), up to a cap of 250,000,000 square meter equivalents
(SMEs), with a growth rate of 16 percent per year for first 3
years. Section 3106 of H.R. 3009 raises this cap to the
following amounts: 250,000,000 SMEs for the 1-year period
beginning October 1, 2001; 500,000,000 SMEs for the 1-year
period beginning on October 1, 2002; 850,000,000 SMEs for the
1-year period beginning on October 1, 2003; 970,000,000 SMEs in
each succeeding 1-year period through September 30, 2008. P.L.
106-200 extends benefits for an additional category of CBI
regional knit apparel products (T-shirts) up to a cap of 4.2
million dozen,growing 16 percent per year for the first 3
years. Section 3106 of H.R. 3009 raises this cap to the following
amounts: 4,872,000 dozen during the 1-year period beginning October 1,
2001; 9,000,000 dozen for the 1-year period beginning on October 1,
2002; 10,000,00 dozen for the 1-year period beginning on October 1,
2003; 12,000,000 dozen in each succeeding 1-year period through
September 30, 2008.
The House approved H.R. 3009, including these provisions
relating to trade with Caribbean countries (although the caps
were slightly different) on November 16, 2001, by voice vote.
On December 14, 2001, the Senate Committee on Finance reported
H.R. 3009, as amended (S. Rept. 107-126). The amendments
adopted by the Senate Committee on Finance did not include any
provisions relating to trade with Caribbean Basin countries. On
May 23, 2002, the Senate passed H.R. 3009, as amended. On June
26, 2002, the House concurred with the Senate amendment with an
amendment pursuant to H. Res. 450, which included the
provisions related to trade with Caribbean Basin countries
described above. In addition, H. Res. 450 incorporated one
provision relating to trade with Caribbean Basin countries that
was not included in H.R. 3009 when it passed the House. The new
provision is a requirement that apparel made of U.S. knit or
woven fabric assembled in CBTPA country qualifies for benefits
only if the U.S. knit or woven fabric is dyed and finished in
the United States.
The conference agreement to H.R. 3009 contains increases in
the quotas nearly identical to the levels approved by the House
as well as the dyeing and finishing change, the knit-to-shape
rule, and the hybrid cutting rule. On July 26, 2002, the House
agreed to the conference report, and on August 1, 2002, the
Senate agreed to the conference report. The bill was signed
into law on August 6, 2002 (P.L. 107-210).
The conference report on the Supplemental Appropriations
Bill for the fiscal year ending September 30, 2002, H.R. 4775,
which passed the House on July 23, 2002, by a vote of (397 to
32), includes a provision within the jurisdiction of the
Committee on Ways and Means. Section 3001 of the conference
report creates a new requirement that apparel made of U.S. knit
or woven fabric assembled in CBTPA country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States. H.R. 4775 was signed into law on
August 2, 2002.
On October 1, 2002, Ambassador Zoellick notified the
Committee of his intention to initiate free trade agreement
negotiations with the five member countries of the Central
American Economic Integration System (Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua).
In September 2001, the Committee received a report prepared
by the U.S. International Trade Commission (ITC) on the impact
of Caribbean Basin Economic Recovery Act on U.S. industries and
consumers.
On February 19, 2002, a bipartisan staff delegation from
the Committee on Ways and Means conducted an oversight trip to
Montgomery and Alexander City, Alabama to observe yarn
spinning, knitting, dyeing and finishing, and manufacturing of
cut apparel parts for ``southbound shipping'' to Mexico and
Central America. Representatives from these manufacturing
operations explained that U.S. firms are made stronger against
Asian competition by the ability to take advantage of trade
preferences under the CBTPA.
Between February 20-22, 2002, the delegation then traveled
to Guatemala City, Guatemala, and Tegucigalpa, Honduras, to
discuss bilateral and regional trade issues with government and
private sector officials. The issues discussed in Guatemala and
Honduras included: (1) The possible negotiation of a free trade
agreement between the United States and Central American
countries, (2) implementation of the CBTPA, (3) the potential
effects of a possible amendment to the CBTPA to require that
U.S. fabric qualifying for benefits under the Act be dyed and
finished in the United States, (4) the status of legislation to
grant the President Trade Promotion Authority, and (5) status
of negotiations to establish the FTAA.

d. Africa

P.L. 107-210 contains several provisions relating to trade
with African countries described below:
1. Knit-to-shape amendment: Draft regulations issued by
Customs to implement P.L. 106-200 stipulate that knit-to-shape
garments, because technically they do not go through the fabric
stage, are not eligible for trade benefits under the Act.
Sections 3106 and 3107 of H.R. 3009 amend P.L. 106-200 to
clarify that preferential treatment is provided to knit-to-
shape apparel articles assembled in beneficiary countries.
2. Hybrid cutting amendment: Draft regulations issued by
Customs to implement P.L. 106-200 deny preferential access to
garments that are cut both in the United States and beneficiary
countries, on the rationale that the legislation does not
specifically list this variation in processing (the so-called
``hybrid cutting problem''). Sections 3107 of H.R. 3009 adds
new rules to the African Growth and Opportunity Act (AGOA) to
provide preferential treatment for apparel articles that are
cut both in the United States and beneficiary countries.
3. Merino wool amendment: AGOA was supposed to provide
duty-free, quota-free treatment to sweaters knit in African
beneficiary countries from fine merino wool yarn, regardless of
where the yarn was formed. However, due to a drafting problem,
the wrong diameter was included, making it impossible to use
the provision. Section 3107 of the House bill corrects the yarn
diameter in the AGOA legislation so that sweaters knit to shape
from merino wool of a specific diameter are eligible.
4. Botswana and Namibia: Botswana and Namibia exceed the
income eligibility for the least developed countries, set at
$1,500 in AGOA, and therefore these countries were not eligible
to use third country fabric for the transition period under the
AGOA regional fabric country cap. Section 3105 of H.R. 3009
allows Namibia and Botswana to use third country fabric for the
transition period under the AGOA regional fabric country cap.
5. Eligibility and increase in caps: Section 112(b)(3) of
the AGOA provides preferential treatment for apparel made in
beneficiary sub-Saharan African countries from ``regional''
fabric (i.e., fabric formed in one or more beneficiary
countries) from yarn originating either in the United States or
one or more such countries. Section 112(b)(3)(B) establishes a
special rule for lesser developed beneficiary sub-Saharan
African countries which provides preferential treatment,
through September 30, 2004, for apparel wholly assembled in one
or more such countries regardless of the origin of the fabric
used to make the articles. Section 112(b)(3)(A) establishes a
quantitative limit or ``cap'' on the amount of apparel that may
be imported under section 112(b)(3) or section 112(b)(3)(B).
This ``cap'' is 1.5 percent of the aggregate square meter
equivalents of all apparel articles imported into the United
States for the year that began October 1, 2000, and increases
in equal increments to 3.5 percent for the year beginning
October 1, 2007. Section 3107 clarifies that apparel wholly
assembled in one or more beneficiary sub-Saharan African
countries from components knit-to-shape in one or more such
countries from U.S. or regional yarn is eligible for
preferential treatment under section 112(b)(3) of AGOA.
Similarly, section 3015 clarifies that apparel knit-to-shape
and wholly assembled in one or more lesser developed
beneficiary sub-Saharan African countries is eligible for
preferential treatment, regardless of the origin of the yarn
used to make such articles. The legislation increases the
``cap'' by changing the applicable percentages from 1.5 percent
to 3 percent in the year that began October 1, 2000, and from
3.5 percent to 7 percent in the year beginning October 1, 2007.
The Committee approved H.R. 3009, which included the
provisions described above relating to trade with Africa, on
October 5, 2001, by voice vote, and the House approved the bill
on November 16, 2001, by voice vote. On December 14, 2001, the
Senate Committee on Finance reported H.R. 3009, as amended (S.
Rept. 107-126). The amendments adopted by the Senate Committee
on Finance did not include any provisions relating to trade
with African countries. On May 23, 2002, the Senate passed H.R.
3009, as amended. On June 26, 2002, the House concurred with
the Senate amendment with an amendment pursuant to H. Res. 450,
which included the House-passed provisions related to trade
with African countries. The conferees retained the House
provisions but amended the cap increase to limit it to apparel
products made with regional or U.S. fabric and yarn (meaning no
increase in amounts of apparel made of third country fabric
beyond current law). On July 26, 2002, the House agreed to the
conference report, and on August 1, 2002, the Senate agreed to
the conference report. The bill was signed into law on August
6, 2002 (P.L. 107-210).
In December 2000 and 2001, the Committee received annual
reports by the ITC on U.S. Trade and Investment with sub-
Saharan Africa that are required in P.L. 106-200.
In May 2000 and 2001, the Committee received annual reports
by the President prepared by USTR on U.S. Trade and Investment
Policy Toward sub-Saharan Africa and Implementation of the
Africa Growth and Opportunity Act.
On November 4, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the President
intends to initiate negotiations for a free trade agreement
with the five member countries of the Southern African Customs
Union (Botswana, Lesotho, Namibia, South Africa, and
Swaziland).

e. Iran and Libya Sanctions Act Renewal

The Iran and Libya Sanctions Act (ILSA) (P.L. 104-172),
approved August 5, 1996, mandates sanctions against foreign
investment in the petroleum sectors of Iran and Libya, as well
as exports of weapons, oil equipment, and aviation equipment to
Libya in violation of United Nations Resolutions 748 and 883.
This law expired on August 5, 2001.
In general, ILSA requires the President to impose at least
two out of a menu of six sanctions on foreign companies that
make an investment of $20 million in 1 year in Iran's energy
sector, or $40 million in 1 year in Libya's energy sector.
There are two grounds on which the President may waive
sanctions. First, under section 4(c) of P.L. 104-172, the
President may waive sanctions for investment in Iran for firms
of countries that join a multilateral sanctions regime,
including economic sanctions, against Iran. Second, under
Section 9(c) of the law, the President may waive sanctions on
the grounds that doing so is important to the U.S. national
interest. This waiver applies to Iran and Libya.
On June 20, 2001, H.R. 1954, the ``ILSA Extension Act of
2001,'' was ordered reported by the Committee on International
Relations (H. Rept. 107-107 Part I) and sequentially referred
to the Committee on Ways and Means. The Committee on Ways and
Means reported the bill, as amended, on July 12, 2001 (H. Rept.
107-107 Part II). As reported by the Committee on Ways and
Means, H.R. 1954 extended the Act for 5 years and established a
review mechanism to allow Congress to consider termination of
the Act after: (1) receiving a Presidential report on the
effectiveness of the sanctions, and (2) assessing the impact of
sanctions on other foreign policy and national security
interests of the United States. The House passed H.R. 1954
under suspension on July 26, 2001, by a vote of 409 to 6 (with
1 present). H.R. 1954 passed the Senate without amendment by
unanimous consent on July 21, 2001, and was signed into law on
August 3, 2001 (P.L. 107-24).

f. China

On June 1, 2001, the President announced his intention to
waive for another year the freedom of emigration requirements
in Title IV of the Trade Act of 1974 with respect to the
People's Republic of China, thereby granting normal trade
relations (NTR) treatment to China between July 1, 2001 and
June 30, 2002 (H. Doc. 107-79). Although Congress had passed in
the 106th Congress legislation to grant permanent normal trade
relations to China, that legislation did not take effect until
the President certified the terms of China's accession. On June
5, 2001, Representative Rohrabacher introduced H.J. Res. 50, a
joint resolution to disapprove the extension of the waiver
authority contained in section 402(c) of the Trade Act of 1974
with respect to the People's Republic of China, recommended by
the President on June 1, 2001. On July 10, 2001, the Trade
Subcommittee held a hearing on overall United States trade
relations with the People's Republic of China and the status of
China's negotiations to join the WTO, and to consider the
extension of NTR status for China for an additional year. On
July 12, 2001, the Committee reported H.J. Res 50 adversely,
without amendment (H. Rept. 107-145). On July 19, 2001, the
House defeated H.J. Res. 50 by a vote of 169 to 259. The effect
of this resolution would have been to withdraw NTR benefits
from Chinese products.
On November 13, 2001, the House received a message from the
President certifying that the terms and conditions for
accession of China to the WTO are at least equivalent to those
agreed to in the November 15, 1999, bilateral agreement between
the United States and China. On December 27, 2001, the
President granted permanent nondiscriminatory treatment (normal
trade relations treatment) pursuant to P.L. 106-286. The
Committee on Ways and Means continues to monitor the progress
China is making in implementing the obligations it assumed when
it joined the WTO on December 11, 2001.
A bipartisan delegation of the Committee on Ways and Means
staff and the Senate Committee on Finance staff participated in
an oversight trip to China with Undersecretary of Commerce
Grant Aldonas from April 1-7, 2002. The delegation visited
Beijing and Shanghai to investigate compliance issues and to
highlight the importance that Congress and the Administration
place on China's full implementation of its trade obligations
resulting from China's accession to the WTO on December 11,
2001.
During the 107th Congress, the Committee on Ways and Means
received two studies on China from the GAO. On October 3, 2002,
the Committee received a report requested by Chairman Thomas
and Representative Rangel entitled ``World Trade Organization:
Analysis of China's Commitments to Other Members.'' On
September 23, 2002, the Committee received a report, also
requested by these Members, entitled ``World Trade
Organization: Selected U.S. Company Views about China's
Membership.'' The GAO's work for the Committee in assessing
China's compliance with its WTO obligations is ongoing.

g. Vietnam

i. H.J. Res. 51
Vietnam's trade status is subject to the ``Jackson-Vanik''
provisions in Title IV of the Trade Act of 1974. This provision
of law governs the extension of NTR, including NTR tariff
treatment, and access to U.S. Government credits, or credit or
investment guarantees, to nonmarket economy countries
ineligible for NTR treatment as of the enactment of the Act. A
country subject to the provision may gain eligibility for U.S.
trade financing programs by complying with the freedom of
emigration provisions under the Act or by receiving a
Presidential waiver of such requirements. The extension of NTR
tariff treatment also requires the conclusion and approval by
Congress of a bilateral trade agreement with the United States
providing for reciprocal nondiscriminatory treatment.
The President first determined in 1998 that a Jackson-Vanik
waiver for Vietnam would substantially promote the freedom of
emigration objectives under the Trade Act of 1974. The
President has renewed Vietnam's waiver every year since 1998,
most recently on June 3, 2002 (H. Doc. 107-221).
The U.S.-Vietnam bilateral trade agreement (BTA) was signed
by USTR Charlene Barshefsky and Vietnam's Trade Minister Vu
Khoan on July 13, 2000. On June 8, 2001, President Bush
transmitted the agreement to Congress for its approval. The BTA
is the most comprehensive trade agreement ever negotiated with
a non-market economy country. It covers most major trade issues
and is aimed at bringing about over time significant reforms in
Vietnam's trade and economic policies. Overall, the BTA commits
Vietnam to open its goods and services markets, implement
significant economic reforms, expand rule of law, and broaden
economic freedom.
On June 12, 2001, identical bills were introduced in the
House and Senate (by request) to grant normal trade relations
status to Vietnam (subject to annual waivers) by approving the
BTA. H.J. Res. 51 was introduced in the House by
Representatives Armey, Gephardt, and Crane; S.J. Res. 16 was
introduced in the Senate by Senators Daschle and Lott.
On July 27, 2001, the Senate Committee on Finance reported
favorably S.J. Res. 16 without amendment by a voice vote with a
quorum present (S. Rept. 107-49). On September 5, 2001, the
Committee on Ways and Means reported favorably H.J. Res. 51
without amendment by voice vote (H. Rept. 107-198). On
September 6, 2001, the House approved H.J. Res. 51 without
amendment by voice vote. On October 3, 2001, the Senate
approved H.J. Res. 51 without amendment by a vote of 88 to 12.
On October 16, 2001, the President signed H.J. Res. 51 (P.L.
107-052). On December 10, 2001, USTR Robert Zoellick and
Vietnamese Deputy Prime Minister Nguyen Tan Dungon formally
exchanged letters allowing the BTA to enter into force and NTR
for Vietnam to become effective, subject to annual waivers.
ii. H.J. Res. 55
Under the Trade Act of 1974, in order for Vietnam to
continue to be eligible for NTR status and U.S. Government
credits, or credit or investment guarantees, the President is
required to submit to Congress a recommendation to extend
Vietnam's waiver from the freedom of emigration requirements
for a 12-month period no later than 30 days prior to the
previous waiver's expiration. This waiver authority continues
in effect unless disapproved by Congress within 60 calendar
days after the expiration of the previous waiver (i.e.,
September 1). Disapproval would take the form of a joint
resolution disapproving of the President's waiver
determination. The President renewed Vietnam's waiver on June
1, 2001 (H. Doc. 107-82).
H.J. Res. 55 was introduced on June 21, 2001, by
Representative Rohrabacher to disapprove the President's
extension of Vietnam's waiver. On July 23, 2001, the Committee
on Ways and Means reported adversely H.J. Res. 55 without
amendment by voice vote (H. Rept. 107-154). On July 24, 2002,
H.J. Res. 55 failed in the House by a vote of 91 to 324 (with 1
present vote), thus leaving NTR status in place for an
additional year.
iii. H.J. Res. 101
On June 3, 2002, the President renewed Vietnam's waiver
from the Jackson-Vanik freedom of emigration requirements in
Title IV of the Trade Act of 1974 (H. Doc. 107-221). H.J. Res.
101 was introduced on June 25, 2002, by Representative
Rohrabacher to disapprove the President's extension of
Vietnam's waiver. On July 18, 2002, the Committee's
Subcommittee on Trade held a hearing on the President's waiver
for Vietnam. Witnesses at the hearing included Ralph Ives,
Assistant USTR for Asia and the Pacific; Chris LaFleur, Acting
Assistant Secretary of State for East Asian and Pacific Affairs
Bureau; and representatives from the business and agriculture
communities and nongovermental organizations. On July 22, 2002,
the Committee on Ways and Means reported adversely H.J. Res.
101 without amendment by voice vote (H. Rept. 107-602). On July
23, 2002, H.J. Res. 101 failed in the House by a vote of 91 to
338, thus leaving NTR status in place for an additional year.

h. Chile

i. Singapore

On March 7, 2001, the Committee held a hearing on President
Bush's trade agenda for 2001. During that hearing, the
Committee reviewed progress in negotiations to establish a free
trade agreement with Singapore. Following House passage of H.R.
3005, legislation to grant the President Trade Promotion
Authority, the Committee held a hearing on February 7, 2002, on
President Bush's trade agenda for 2002, which addressed
progress in negotiations with Singapore.
On August 22, 2002, the Committee received a letter from
Ambassador Zoellick indicating his intention to conclude a free
trade agreement negotiations with Singapore.
In 2001, U.S.-Singapore trade reached $32.7 billion, making
Singapore the United States' 8th largest trading partner. The
United States and Singapore began negotiations to establish a
free trade agreement in December 2000. There is no firm
deadline for concluding the negotiations, although both sides
have indicated a preference to conclude them by the end of
2002. The U.S.-Singapore FTA would be the first U.S. FTA with
an Asian country, and negotiators are working to draft a
``world-class'' agreement that will serve as a strong basis for
future negotiations in the region, particularly services.

j. Morocco

The United States and Morocco have been working closely
together since 1995 to promote closer economic ties and strong
investment climates under a bilateral Trade and Investment
Framework Agreement (TIFA). On August 22, 2002, USTR Zoellick
wrote a letter to the Congressional leadership and the
Committee outlining the reasons that it is in the United
States' interest to pursue a free trade agreement with Morocco.
On October 1, 2002, Ambassador Zoellick formally notified
Congress of the President's intention to negotiate an FTA with
Morocco, noting that such an agreement would deepen the ongoing
trade dialogue in the Middle East, reinforce important American
values in the region, and build upon the free trade agreements
already completed with Israel and Jordan.
Ambassador Zoellick noted that in addition to tariff
elimination, an FTA with Morocco would include commitments to
increase access to the Moroccan services sector. In addition to
the telecommunications and tourism sectors, there are likely
opportunities for U.S. firms in the energy, transport,
financial services, and insurance sectors. The FTA would
support Morocco's commitment to transparency, openness, and the
rule of law, and would include increased protection for
intellectual property and specific provisions to encourage the
development of e-commerce.

k. Free Trade Agreement of the Americas

On March 29, 2001, the Trade Subcommittee held a hearing on
the increasing number of bilateral and regional trade
agreements to which the United States is not a party,
particularly in its own hemisphere, and the implications for
the United States. This hearing focused on how these new trade
agreements disadvantage U.S. business, workers, and families
and assessed opportunities for the United States to move
forward with new negotiations.
Between April 20-22, 2001, a staff member from the
Committee on Ways and Means accompanied a Congressional
delegation from the Committee on Agriculture led by
Representative Combest that attended the FTAA Summit in Quebec,
Canada.
On May 8, 2001, the Trade Subcommittee held a hearing on
the outcome of the Summit of the Americas held in Quebec City,
Canada, and the prospects and timing for achieving the FTAA.
Also, on May 8, 2001, the Committee received a report from
the GAO, requested by Trade Subcommittee Chairman Crane
entitled ``Free Trade Area of the Americas: April 2001 Meetings
Set Stage for Hard Bargaining to Begin.''
On July 20, 2001, the Committee received a report from the
GAO, requested by Trade Subcommittee Chairman Crane, entitled
``North American Free Trade Agreement: U.S. Experience with
Environment, Labor, and Investment Dispute Settlement Cases.''

l. Turkey

In 1996, Congress established the Qualifying Industrial
Zone (QIZ) initiative under the U.S.-Israel Free Trade
Agreement to support the peace process in the Middle East by
encouraging Israeli-Jordan and Israeli-Egypt economic
integration. On June 24, 2002, H.R. 5002 was introduced by
Trade Subcommittee Chairman Crane along with Representatives
Wexler, Armey, Lantos, and Sessions. The bill would expand the
QIZ program to allow Israel-Turkey QIZs to help Turkey attract
foreign direct investment, diversify its exports away from
dependence on textiles, boost trade, and increase employment
opportunities. Products manufactured in a QIZ that meet the
necessary criteria would enjoy duty-free access to the United
States. During the markup of the Miscellaneous Trade and
Technical Corrections Act of 2002 (H.R. 5385) by the Committee
on Ways and Means, Chairman Thomas included the text of H.R.
5002 in his amendment in the nature of a substitute. The
Committee then approved the legislation as amended, on
September 18, 2002, by voice vote. The House approved H.R. 5385
on October 7, 2002, under suspension by voice vote. The Senate
took no action on H.R. 5002 or H.R. 5385.

m. Yugoslavia

Yugoslavia's NTR status was withdrawn by Congress in 1992
(P.L. 102-420) because Serbia and Montenegro were not complying
with the provisions of the Final Act of the Conference on
Security and Cooperation in Europe (also known as the
``Helsinki Final Act''). On April 17, 2002, Representative
Sessions introduced H.R. 4478 to give the President the
authority to proclaim NTR status to Yugoslavia (Serbia and
Montenegro) notwithstanding the 1992 law. The text of H.R. 4478
was included in the Miscellaneous Trade and Technical
Corrections Act of 2002 (H.R. 5385), which was introduced on
September 17, 2002, by Representative Crane. During the markup
of H.R. 5385 by the Committee on Ways and Means, an amendment
introduced by Representative Levin (at the request of
Representative Cardin) was accepted which requires the
President to first certify, before he may grant NTR status to
Yugoslavia, that the Federal Republic of Yugoslavia is (1)
cooperating with the International War Crimes Tribunal and (2)
complying with the Dayton Peace Accords. The Committee then
approved the legislation, as amended, on September 18, 2002, by
voice vote. Before the House considered H.R. 5383 on the Floor,
Representative Cardin asked that the amendment adopted in the
markup be withdrawn. The House approved H.R. 5385 with the
original text of H.R. 4478 on October 7, 2002 under suspension
by voice vote. The Senate took no action on H.R. 4478 or H.R.
5383.

n. Russia

Russia's trade status remains subject to the Jackson-Vanik
provisions in Title IV of the Trade Act of 1974. Russia was
first extended NTR in 1992 under a waiver from the Jackson-
Vanik emigration requirements. Since 1994, the President has
found Russia to be in full compliance with the emigration
criteria; however, the country's trade status remains
conditioned upon annual compliance determinations by the
President. The compliance determinations are vulnerable to a
resolution of disapproval by Congress. There has not been an
annual vote in Congress on Russia's trade status because no
Member of Congress has introduced a disapproval resolution.
On December 20, 2001, Chairman Thomas, along with
Subcommittee Chairman Crane and Representative Dreier,
introduced H.R. 3553 to provide for the extension of permanent
NTR treatment to the products of the Russian Federation. The
Subcommittee on Trade held a hearing on April 11, 2002, to
explore whether to graduate Russia from the Jackson-Vanik
provisions and extend PNTR, and to assess U.S.-Russian trade
relations. Witnesses at the hearing included Representatives
Lantos and Cox, Deputy USTR Peter F. Allgeier, Under Secretary
of State for Economic, Business, and Agricultural Affairs Alan
P. Larson, and representatives from the business and
agriculture communities and non-governmental organizations. No
further action was taken.

o. Israel

The House approved H.R. 3009, the Andean Trade Promotion
and Drug Eradication Act, on November 16, 2001, by voice vote
and did not include any provision relating to Israel. On
December 14, 2001, the Senate Committee on Finance reported
H.R. 3009, as amended (S. Rept. 107-126). The amendments
adopted by the Senate Committee on Finance included a provision
that provided that articles eligible for preferential treatment
under the Andean Trade Promotion and Drug Eradication Act would
not be ineligible for duty-free treatment because they contain
certain nylon filament yarn from a country that had a FTA in
force prior to January 1, 1995. On May 23, 2002, the Senate
passed H.R. 3009, as amended.
On June 26, 2002, the House concurred with the Senate
amendment with an amendment, pursuant to H. Res. 450, which
included no provision relating specifically to trade with
Israel. The conference agreement to H.R. 3009 included the
Senate provision. In addition, at the insistence of the House,
the conference agreement included a requirement that USTR
should review implementation of the United States-Israel FTA
and submit a report to Congress on whether Israel is
implementing its market access commitments to the United States
under the FTA and under any other trade agreements this country
has with the United States. On July 26, 2002, the Israeli
Ambassador to the United States wrote to Chairman Thomas to
express the view of his government that Israel is in compliance
with the agreement. On July 26, 2002, the House agreed to the
conference report, and on August 1, 2002, the Senate agreed to
the conference report. The bill was signed into law on August
6, 2002 (P.L. 107-210).

p. Taiwan

On January 17, 2002, the Senate Committee on Finance
formally requested the ITC to conduct an assessment of the
economic effects of the establishment of a free trade agreement
between the United States and Taiwan. As part of that request,
the Senate Committee on Finance asked the ITC to provide
information on Taiwan's economy, the current economic
relationship between the United States and Taiwan, an analysis
of the barriers to trade between the United States and Taiwan,
the estimated economic effects of eliminating all quantifiable
trade barriers (with special attention to agricultural goods),
and a qualitative assessment of the economic effects of
removing non-quantifiable trade barriers. On June 10, 2002,
several Members of the Committee on Ways and Means
(Representatives Dunn, Rangel, Crane, Levin, Shaw, McDermott,
Ramstad, McNulty, Herger, Houghton, English, Hayworth, Foley,
and Brady) wrote a letter to ITC Chairman Steve Koplan
expressing their support for the economic impact study. The ITC
issued its report in October 2002.

q. Australia and New Zealand

On November 13, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the President
intends to initiate negotiations for a free trade agreement
with Australia and soliciting the view of the Committee on
including New Zealand as part of that agreement.

4. OPERATIONS OF THE U.S. CUSTOMS SERVICE, THE U.S. INTERNATIONAL TRADE
COMMISSION, AND THE OFFICE OF THE U.S. TRADE REPRESENTATIVE

a. Customs Border Security Act of 2002

The Trade Subcommittee held a hearing on July 17, 2001, on
budget authorizations for the U.S. Customs Service, the Office
of the USTR, and the ITC. Representatives of these agencies,
the GAO, the National Treasury Employees Union, and invited
private sector witnesses testified at the hearing.
At the hearing, the Subcommittee examined Customs
automation issues--the Automated Commercial System (ACS), the
Automated Commercial Environment (ACE), and the International
Trade Data System (ITDS). In addition, the Subcommittee
received testimony on Customs' premium and overtime pay laws
and practice, as well as Customs' backlog of prospective
rulings.
On October 16, 2001, Subcommittee Chairman Crane introduced
H.R. 3129, authorizing appropriations for fiscal years 2002 and
2003 for the Customs Service for non-commercial and commercial
operations and air and marine interdiction programs, as well as
authorizations for the Office of the USTR and the ITC. With
respect to the Customs authorization for commercial operations,
the legislation included funding for ACE ($308 million for
fiscal years 2002 and 2003). In addition, H.R. 3129 included
authorization for the prevention of online child pornography,
the purchase of specific inspection equipment, the addition of
Customs Service officers at the United States-Canada border,
the establishment and implementation of a cost accounting
system at the Customs Service, implementation of a new means of
calculation of fees for customs inspections at express courier
facilities, the National Customs Automation Program,
reestablishment of customs operations in New York City, for
textile transshipment enforcement operations, and
implementation of the Africa Growth and Opportunity Act. H.R.
3129 also included provisions amending overtime and premium pay
for Customs officers, providing immunity to Customs officers
from lawsuits arising from personal searches at the border, and
authorizing authority to Customs to search outbound mail. H.R.
3129 was referred to the Committee on Ways and Means.
The Committee on Ways and Means marked up and favorably
reported H.R. 3129 as amended on October 16, 2001, by voice
vote. The Committee filed H. Rept. 107-320 on December 5, 2001.
On December 6, 2001, an amended version of H.R. 3129 that
omitted the provision on overtime and premium pay for Customs
officers failed to pass the House under suspension of the rules
(requiring a two-thirds vote) by a vote of 256 to 168. OnMay
22, 2002, the House passed a substantially similar version of H.R.
3129, as amended, by a vote of 327 to 101.
On December 4, 2001, the Senate Committee on Finance
favorably reported S. 1209, the Trade Adjustment Assistance for
Workers, Farmers, Communities, and Firms Act of 2001, that
incorporated via amendment substantial portions of H.R. 3129 as
it had been favorably reported by the House Committee on Ways
and Means. The Senate Committee on Finance amendment to S. 1209
omitted the provisions of H.R. 3129 on overtime and premium pay
for Customs officers and immunity for Customs inspectors. The
Committee filed S. Rept. 107-134 on February 4, 2002. The
Senate passed these incorporated provisions of H.R. 3129 as
part of the Senate amendment to H.R. 3009 by a vote of 66 to 30
on May 23, 2002.
No further action was taken on H.R. 3129 in the 107th
Congress, but the provisions of H.R. 3129 as amended and passed
by the House were substantially incorporated into H.R. 3009,
which was enacted on August 6, 2002 (P.L. 107-210). In the
final enacted version, the budget authorization dates were
changed from fiscal years 2002-2003 to fiscal years 2003-2004,
and the authorization amounts were changed accordingly. Other
significant revisions of the Customs Border Security Act of
2002 that were enacted as part of the Trade Act of 2002 are
discussed below:
1. Immunity for Customs Officers Acting in Good Faith
Customs Service officials provided information to the
Committee about the risk to inspectors of personal lawsuits.
According to these officials, some Customs inspectors have been
sued unfairly in their personal capacity by people who
underwent personal searches at the border. H.R. 3129 as
introduced and passed by the House, and later included in H.R.
3009, included a provision to provide immunity for U.S.
officials from lawsuits stemming from personal searches of
people entering the country so long as the officers conduct the
searches in good faith. To be covered by this immunity
provision, inspectors must follow Customs Service inspection
rules including the rule against profiling using race,
religion, or ethnic background. The Senate amendment to H.R.
3009 as passed by the Senate omitted this provision. The Senate
receded to the House in the conference for the Trade Act of
2002, and the conferees added a clarification in section 341 of
the conference report that the means to effectuate such
searches must be reasonable.
2. Outbound Mail Border Search Authority
Customs Service officials provided information to the
Committee about the inability of Customs to inspect mail
traveling out of the country. Although Customs searched all
inbound mail, and although it searched outbound mail sent via
private carriers, outbound mail carried by the U.S. Postal
Service was not subject to search. Customs officials stated
that illegal inbound smuggling is often accompanied by an
outbound transaction. For example, illegal drugs may enter the
United States, and the money collected for the drugs may then
be mailed back to the smuggler.
H.R. 3129 as introduced and passed by the House, and later
included in H.R. 3009, authorizes officials of the Customs
Service to search mail traveling out of the country. H.R. 3009,
as amended by the Senate, included this provision with an
exception for mail weighing 16 ounces or less that required
Customs to obtain a search warrant before searching. H.R. 3009
as enacted includes the Senate text in section 344.
3. Requests Submitted to the GAO
The GAO prepared a report for the Committee that confirmed
complaints from the business community about the unreasonably
lengthy delays in obtaining prospective rulings from the
Customs Service. H.R. 3129, as introduced and passed by the
House and later included in H.R. 3009, directed the GAO to
monitor and provide an update on the progress of Customs in
substantially decreasing the time it takes to issue prospective
rulings. This provision was subsequently enacted as section 335
of H.R. 3009.
The Committee received information about alleged textile
goods entering the country that have been transshipped, meaning
that an importer had entered the goods with an incorrect
declaration for the purpose of obtaining entry or a lower duty.
H.R. 3129, as introduced and passed by the House and later
included in H.R. 3009, directed the GAO to conduct an audit of
the systems at the Customs Service to monitor and enforce
textile transshipment. This provision was subsequently enacted
as section 345 of H.R. 3009.
Customs Service officials provided information to the
Committee about the inadequacy of the existing accounting
system used by Customs. Customs cannot accurately track the
cost of providing services to fee payers nor account for its
budget expenditures on a commercial versus non-commercial
basis. One consequence of having inadequate data is that
importer user fees may not reflect the level of services
provided for by the fee. H.R. 3129, as introduced and passed by
the House and later included in H.R. 3009, directed the GAO to
prepare a confidential report to determine whether current user
fees are appropriately set at a level commensurate with the
service provided for the fee. This provision was subsequently
enacted as section 336 of H.R. 3009.
4. Mandatory Advanced Electronic Information for Cargo
Customs Service officials provided information to the
Committee about the commercial and non-commercial need for
additional cargo and passenger information. H.R. 3129, as
introduced and passed by the House and later included in H.R.
3009, directed the Secretary of the Treasury to promulgate
regulations pertaining to the electronic transmission to
theCustoms Service of cargo information relevant to aviation, maritime,
and surface transportation safety and security prior to a cargo
carrier's arrival in the United States. The Senate amendment to H.R.
3009 included a similar provision that applied to out-bound cargo as
well. Conferees agreed to a modified provision that deleted specific
requirements on private carriers and shippers and set general
parameters for Treasury's regulations. This provision was subsequently
enacted as section 343 of H.R. 3009.

b. Port Security: Maritime Transportation Antiterrorism Act of 2002

On May 22, 2002, by a vote of 327 to 101, the House passed
H.R. 3129, as amended, that included section 343 addressing
mandatory advanced electronic information for cargo discussed
above. On December 20, 2001, the Senate passed S. 1214, which
included a similar provision that was more detailed and applied
to outbound cargo and passenger information as well. S. 1214
was held at the Speaker's desk until June 4, 2002.
On June 4, 2002, Chairman Thomas wrote a letter to Speaker
Hastert on the matter of H.R. 3983, the Maritime Transportation
Antiterrorism Act of 2002, acknowledging that the Committee had
modified H.R. 3129 to assure that agencies beyond Customs would
have access to the information collected by Customs pursuant to
the Act. The letter demurred on the action of the Committee
Transportation and Infrastructure to incorporate an identical
Customs provision in H.R. 3983. H.R. 3983 was passed under
suspension of the rules by the House with this provision on
June 4, 2002, by voice vote. On June 4, 2002, the House agreed
to go to conference on H.R. 3983 and S. 1214, and the Speaker
named Chairman Thomas, Subcommittee Chairman Crane, and Ranking
Member Rangel as conferees on this provision. Because final
Senate and House agreement to a provision was included in
enactment of H.R. 3009 that was signed by the President on
August 2, 2002, and because the conference report on H.R. 3983
contained no tax or user fee, the conference report contained
only technical amendments within the Committee's jurisdiction.
The conference report was later enacted.

c. H.R. 3525, the Enhanced Border Security and Visa Entry Reform Act of
2002

On April 23, 2002, Chairman Thomas wrote a letter to
Chairman Sensenbrenner of the Committee on the Judiciary
concerning section 102 of H.R. 3525, the ``Enhanced Border
Security and Visa Entry Reform Act of 2001,'' which passed the
Senate as amended on April 18, 2002. Included in the Senate
amendment to H.R. 3525 was section 102, which authorized
increases in funding to improve facilities for the border
patrol, Immigration and Naturalization Service, and U.S.
Customs Service in light of the increased border security
issues related to the terrorist attack of September 11, 2001.
The letter stated that this provision of the Senate amendment
fell within the Committee's jurisdiction but that the Committee
would seek no action on the legislation in order to expedite it
for Floor consideration. The final version of H.R. 3525
included this provision intact, and the bill was signed into
law on May 14, 2002 (P.L. 107-173).

d. Creation of the U.S. Department of Homeland Security: Homeland
Security Act of 2002

On June 18, 2002, President Bush proposed to transfer all
of the authority and assets of the Customs Service, as well as
many other Federal agencies, to a new U.S. Department of
Homeland Security. Specifically, Customs would be placed under
an Under Secretariat for Border and Transportation Security
along with the Immigration and Naturalization Service, the
Animal and Plant Health Inspection Service, the Coast Guard,
and the Transportation Security Administration. On June 24,
2002, Chairman Armey of the House Select Committee on Homeland
Security introduced H.R. 5005, ``The Homeland Security Act of
2002.'' The bill was referred to the Committees of jurisdiction
for each section of the bill, including the Committee on Ways
and Means.
On June 19, 2002, Chairman Thomas announced that the
Committee would hold a hearing on the President's proposal to
create a U.S. Department of Homeland Security including the
transfer of all assets and authority of the U.S. Customs
Service to the new Department. The full Committee held the
hearing on June 26, 2002. Testifying at the hearing were the
Honorable Jimmy Gurule, Undersecretary for the Office of
Enforcement, U.S. Department of the Treasury, and several
members of the trade as well as the president of the National
Treasury Employees Union.
Chairman Thomas and the Committee on Ways and Means ordered
favorably reported recommendations for legislative changes to
H.R. 5005, the ``Homeland Security Act of 2002,'' with
amendment, by voice vote, after adopting the Chairman's
amendment by a vote of 34 to 3. The legislative language
adopted by the Committee was recommended to the House Select
Committee on Homeland Security for incorporation into a final
bill consolidating relevant House committee recommendations.
The overarching goal of the Committee was to give the new
Department the tools it needs to protect U.S. borders while at
the same time to ensure that revenue continues to be collected
and that goods keep moving across the border with little delay.
The bipartisan amendment that formed the Chairman's mark would:
(1) transfer the Customs Service in its entirety to the U.S.
Department of Homeland Security Division for Border and
Transportation Security; (2) identify revenue-related offices
and functions within Customs (about 25 percent of the agency)
and prohibit reorganization or decrease in their funding or
staff or reductions to Title V pay and benefits levels; (3)
require that adequate staffing of customs revenue services be
maintained, and require notice to Congress of actions that
would reduce such service; (4) maintain the Commissioner of
Customs as Senate-confirmed; (5) transfer all authority
exercised by Customs to Homeland Security with the exception of
revenue collecting authority, which would remain at the U.S.
Department of the Treasury,which may delegate this authority to
Homeland Security; (6) specify that a portion of the Customs
Merchandise Processing Fee must go to build the new Customs computer.
Four amendments were offered to the Chairman's substitute.
The first amendment, offered by Representative Cardin, would
have designated the existing Customs Service as a ``distinct
entity'' within the Homeland Security Department. This
amendment failed by voice vote. The second amendment, offered
by Representative Becerra, would have expanded the dedicated
use provision for the merchandise processing fee (MPF) in the
Chairman's substitute to require use of MPF receipts (in excess
of the $350 million dedicated for ACE development) for
commercial operations. This amendment failed by a roll call
vote of 12 yeas to 24 nays. The third amendment, offered by
Representative McDermott, would have preserved existing and
future Customs' employees pay, performance standards, etc., as
provided under Title 19 and Title 5. This amendment failed by a
voice vote. Representative Doggett offered an amendment to
prohibit the Customs Service from entering into contracts with
companies that have reincorporated overseas in order to avoid
U.S. taxation. This amendment was agreed to without objection.
On July 23, 2002, the House Select Committee on Homeland
Security reported H.R. 5005 with the Committee on Ways and
Means language intact. On July 31, 2002, H.R. 5005 passed the
House by a vote of 295 to 132. No further action was taken on
this bill in the 107th Congress.
On November 13, 2002, the House Select Committee on
Homeland Security reported H.R. 5710 as a substitute to H.R.
5005. Minor changes were incorporated in the Customs section
from the language reported in H.R. 5005. The House passed the
bill by a vote of 299 to 121 on November 13, 2002. The Senate
passed the House bill with some technical amendments on
November 19. The House agreed to the technical amendments on
November 22, and the bill was signed into law on November 25,
2002.

e. H. Res. 385 (Concerning the Destruction of the Customs Services
Offices at the World Trade Center)

On April 10, 2002, Representative Istook introduced H. Res.
385, a resolution to honor the men and women of the U.S.
Customs Service who had offices at the World Trade Center, for
their hard work, commitment, and compassion during the
terrorist attacks on the World Trade Center on September 11,
2001. The resolution was referred to the Committee on Ways and
Means. The resolution passed under suspension of the rules by
voice vote on April 23, 2002.

f. Customs User Fees

i. Patients' Bill of Rights
Customs user fees under Title 19, section 58c will expire
in September 2003. As a source of revenue, user fees are
sometimes attached to unrelated legislation as a means to ``pay
for'' the spending created by that legislation. For example,
section 502 of Senator McCain's bill, S. 1052, the Patients
Protection Act (also known as the Patients' Bill of Rights),
would extend Customs user fees until 2011. S. 1052 passed the
Senate as amended on June 29, 2001, with the provision
remaining intact although renumbered to section 602. No further
action was taken on S. 1052 during the 107th Congress.
ii. Reports Required Under the Trade Act of 2002
Section 334 of the Trade Act of 2002 requires the
implementation of a cost accounting system for the U.S. Customs
Service and a quarterly report from Customs on its progress.
Once implemented, Customs will be able to accurately identify
the cost of performing certain services or activities that
currently have fees associated with them.

5. GENERALIZED SYSTEM OF PREFERENCES

On October 3, 2001, Trade Subcommittee Chairman Crane
introduced H.R. 3010, a bill to amend the Trade Act of 1974 to
extend the GSP until December 31, 2002. On October 5, 2001, the
Committee ordered H.R. 3010 favorably reported, without
amendment, by voice vote. On June 26, 2002, the House concurred
with the Senate amendment to H.R. 3009 with an amendment
pursuant to H. Res. 450, by a vote of 216 to 215 with one
Member voting ``present.'' This resolution incorporated H.R.
3010 into H.R. 3009, the Trade Act of 2002. On July 26, 2002,
the House agreed to the conference report, and on August 1,
2002, the Senate agreed to the conference report. The
conference report extends GSP benefits through December 31,
2006. The bill was signed into law on August 6, 2002 (P.L. 107-
210).

6. TRADE ADJUSTMENT ASSISTANCE

H.R. 3008 was introduced by Representative Nancy Johnson
and referred to the Committee on Ways and Means. On October 15,
2001, the Committee favorably reported H.R. 3008 to reauthorize
until 2004 the TAA programs for workers and firms and the North
American Free Trade Agreement-related (NAFTA) TAA program, all
of which were scheduled to expire on September 30, 2001. The
Committee filed H. Rept. 107-244 on October 16, 2001. The House
passed H.R. 3008, as amended, by a vote of 420 to 3 with one
Member voting ``present,'' on December 6, 2001. H.R. 3008, as
amended, included provisions to shorten the period for
Administration review of petitions, increase benefits for
additional time, and authorize a new temporary program to
address workers laid off from the national economic impacts of
the terrorist attack of September 11, 2001. No further action
was taken on H.R. 3008 during the 107th Congress, but the text
of H.R. 3008 was partially incorporated into the conference
report to H.R. 3009 as amended and passed by the House on June
26, 2002, and signed into law on August 6, 2002 (P.L. 107-210).
On December 4, 2001, the Senate Committee on Finance
favorably reported S. 1209 with a substitute amendment. The
Senate Committee on Finance filed S. Rept. 107-134 on February
4, 2002. S. 1209 was a significant rewrite of existing TAA law
that included provisions to: consolidate the TAA and NAFTA-TAA
programs; shorten the period for Administration review of TAA
petitions; extend TAA to secondary workers, workers in firms
that shift production abroad, and workers in taconite mining
firms; allow Congress to initiate TAA investigations; increase
notice to potential beneficiaries; increase benefits for
additional time; increase time allowed for breaks in training;
raise the training expenditure cap; increase personal
allowances; provide wage insurance for older workers; create a
self-employment pilot program; expand authorization for TAA for
firms; create a new TAA for communities, farmers, and
fishermen; create a new healthcare benefit for TAA workers; and
extend Customs user fees through 2010. No further action was
taken on S. 1209 during the 107th Congress, but the provisions
of S. 1209 were incorporated into the Senate amendment to H.R.
3009 that passed on May 23, 2002, by a vote of 66 to 30.
The conference report to H.R. 3009 makes significant
changes to the House and Senate passed versions of TAA but
retains existing law as the basis for the amendments instead of
adopting the method of rewriting the statute followed by the
Senate in S. 1209. Conferees agreed to consolidate the TAA and
NAFTA-TAA programs, decrease the review period for petitions,
extend TAA to downstream secondary workers, increase notice to
potential beneficiaries, increase benefits for additional time,
increase time allowed for breaks in training, raise the
training expenditure cap to $220 million, increase personal
allowances, create an alternative TAA program for older
workers, increase funding to TAA for firms, create a new TAA
program for farmers subject to limitations related to income
and eligibility for other farm program payments, and provide a
healthcare tax credit to TAA workers and recipients of benefits
from the Pension Benefit Guaranty Corporation. H.R. 3009 was
signed into law on August 6, 2002 (P.L. 107-210).

7. MISCELLANEOUS TRADE ISSUES

a. Miscellaneous Trade and Technical Corrections Act

On March 8, 2002, Subcommittee Chairman Crane requested
written comments from parties interested in miscellaneous trade
proposals, technical corrections to the trade laws, and
temporary suspensions on certain imports. These technical
corrections related to the ongoing process of identifying
changes to improve the efficiency of the trade laws.
On September 17, 2002, Subcommittee Chairman Crane
introduced H.R. 5385, the ``Miscellaneous Trade and Technical
Corrections Act of 2002.'' This legislation included provisions
which were non-controversial based on public comments received,
Administration comments, and revenue analysis by the
Congressional Budget Office (CBO). H.R. 5385 was referred to
the Committee on Ways and Means.
H.R. 5385 contains two parts. The first part includes
legislation relating to: (1) temporary duty suspensions, (2)
review of protests against Customs Service decisions, and (3)
miscellaneous provisions. The duty suspension provisions of the
first part of H.R. 5385 relate mostly to products (largely
chemical) for which there is no U.S. domestic manufacturer.
Other duty suspension articles include rubber riding boots and
high performance loud speakers.
The review of protests against Customs Service decisions
included provision for articles including tramway cars, a
replica of the Liberty Bell, and certain 13-inch televisions.
These provisions were found to be adjustments to duty payments
made on articles that were past administrative remedy.
The second part of H.R. 5385 contains provisions relating
to: (1) the establishment of a Turkey QIZ (see discussion in
Turkey section of this report), (2) ship repair record-keeping
elimination (the bill reverses Customs regulations written in
April 2001 and eliminates onerous record-keeping requirements
for repairs made by regular crew on American ships while on the
high seas, without change to current law requiring duties for
foreign ship repairs), (3) GSP benefits for certain hand-made
rugs (the primary beneficiary is Pakistan; other countries that
would benefit from the bill include Turkey, Nepal, Egypt, and
Morocco), and (4) other technical amendments to the Trade Act
of 2002.
On September 18, 2002, the Committee on Ways and Means
amended and marked up H.R. 5385 and ordered it favorably
reported by voice vote. The Committee amendment included a
change relating to the Turkey QIZ. In addition, the Committee
allowed for revision of the bill to correct for score and
content. On October 7, 2002, the bill was agreed to by the
House under suspension of the rules by voice vote.
The Senate received the bill on October 8, 2002. The Senate
took no action on the legislation.

b. Farm Security and Rural Investment Act of 2002

On September 17, 2001, Chairman Thomas wrote to
Representative Combest, Chairman of the Committee on
Agriculture, to assert jurisdiction over two provisions of H.R.
2646, the Agriculture Act of 2002. The provisions were section
127, which would change the level of import quotas on cotton
permitted under U.S. law, and section 146, which would require
importers of dairy products to pay assessments applied to
domestic dairy producers to offset the costs of dairy sales
promotion programs. The Committee on Ways and Means did not
seek action on these proposals. On September 18, 2001,
Representative Combest sent a letter to Chairman Thomas,
agreeing as to the Committee's jurisdictional prerogatives. On
August 2, 2001, H.R. 2646 passed the House by a recorded vote
of 291 to 120.
On February 13, 2002, the Senate passed its version of H.R.
2646. Chairman Thomas, Ranking Member Rangel, and
Representative Herger were named House conferees for the
provisions within the jurisdiction of the Committee,
specifically the raw cotton quotas, the dairy marketing fee
assessment on imports, the reallocation of the sugar quota, and
certain provisions of the Animal Health Protection Act and the
Bear Protection Act.
The House passed the conference report on May 2, 2002,
containing provisions within the Committee's jurisdictions as
modified to the Committee's satisfaction. The Senate passed the
conference report on May 8, 2002, and it was signed into law on
May 13, 2002 (P.L. 107-171).

c. Steel--H.J. Res. 84

On June 22, 2001, USTR Robert Zoellick requested the ITC to
initiate a safeguard investigation under section 201 of the
Trade Act of 1974 concerning the effect of steel imports on the
U.S. steel industry. The request covered four broad categories
of steel products: certain carbon and alloy flat products,
certain carbon and alloy long products, certain carbon and
alloy pipe and tube, and certain stainless steel and alloy tool
steel products.
For purposes of its investigation, the ITC divided steel
imports into 33 product categories. On October 22, 2001, the
ITC made an affirmative determination of injury for 12 of these
product categories, finding that the products were being
imported into the United States in such increased quantities
that they are a substantial cause of serious injury or threat
of serious injury to the U.S. industry. In addition, the ITC
was evenly divided in its determinations for 4 product
categories and made negative determinations for 17 product
categories. In cases where the ITC was evenly divided, both
determinations were forwarded to the President, who may
consider either determination as the ITC's determination
(section 330(d)(1) of the Tariff Act of 1930). The imported
products covered by the ITC's affirmative and evenly divided
determinations accounted in the year 2000 for 27 million tons
of steel, valued at $10.7 billion (74 percent of the imports
under investigation).
On December 7, 2001, the ITC announced the recommendations
and views on the remedies regarding steel. According to section
202(e)(6) of the Trade Act of 1974, only Commissioners who made
affirmative injury determinations for a product are eligible to
recommend remedies for that product. On December 19, 2001, the
ITC transmitted to the President its remedy recommendations.
Section 203 provides that the President, not the ITC, makes
the final decision whether to provide relief to the U.S.
industry and the type and amount of relief. On March 5, 2002,
President Bush announced trade remedies for all products on
which the ITC affirmatively determined or had an evenly divided
determination that imports had caused substantial injury except
two specialty categories (tool steel and stainless steel
flanges and fittings). The President's remedies were imposed as
of March 20, 2002, and are effective for 3 years and 1 day.
Since that time, the President has issued a number of
exclusions.
On March 7, 2002, Representative Jefferson introduced H.J.
Res. 84 to disapprove the action taken by the President. The
effect of the resolution would be to enact instead the remedy
recommendations of the ITC transmitted to the President on
December 19, 2001. The resolution was referred to the Committee
on Ways and Means. On May 7, 2002, the Committee on Ways and
Means reported adversely H.J. Res. 84 without amendment by
voice vote (H. Rept. 107-437). On May 8, 2002, the House
approved H. Res. 414, which laid H.J. Res. 84 on the table, by
a vote of 386 to 30 (with 1 present vote), leaving the
President's order in place. No further action was taken.

d. Diamonds

There were a number of legislative proposals in Congress
during the 107th Congress seeking to address the trade in
conflict diamonds. Such diamonds generally come from mines
controlled by rebel forces and are traded for arms to fuel
civil war in Africa. Some of the proposals included banning
diamonds imported from specified countries and requiring a
certification of where the imported diamond was mined.
The Senate passed H.R. 2500, an act making appropriations
for the U.S. Departments of Commerce, Justice, and State, the
Judiciary, and related agencies, which at section 404 would
create an explicit ban on the importation of diamonds from
certain countries. As an import ban provision, section 404 was
a revenue measure that contravened the Origination Clause of
the Constitution (Article I, Section 7, Clause 1). On September
20, 2001, Chairman Thomas introduced H. Res. 240 to return H.R.
2500 to the Senate because the bill violated the Origination
Clause. H. Res. 240 passed the House by voice vote, and H.R.
2500 was returned to the Senate. The Senate voted on September
21, 2001, to strike section 404 from the bill.
On October 10, 2001, the Trade Subcommittee held a hearing
on the importation of conflict diamonds. This hearing was an
effort to obtain viewpoints from the Administration, the
industry, non-governmental organizations, and other interested
parties for possible solutions to the issues relating to the
trade in conflict diamonds. This hearing was a follow-up to one
held by the Subcommittee on September 12, 2000.
On August 2, 2001, Representative Houghton introduced H.R.
2722, the Clean Diamonds Trade Act, to restrict the importation
of diamonds from countries with inadequate controls against the
trade of conflict diamonds. H.R. 2722 was referred to the
Committee on Ways and Means. Based upon information gathered at
the hearing, Chairman Thomas brought H.R. 2722, as amended, to
the Floor under suspension of the rules on November 28,
2001.H.R. 2722 as amended would provide the President of the United
States with the authority to evaluate control measures used by
countries to prevent the trade of conflict diamonds. The President
would also have the authority to ban diamond imports that were found to
be from countries with inadequate control measures. H.R. 2722 passed
the House by a vote of 408 to 6. The Senate took no action on this
legislation.

e. Energy Bill

Section 2 of the Securing America's Future Energy Act of
2001 (H.R. 4) contains a sense of Congress that the United
States should reduce its dependence on Iraqi energy sources
from 700,000 barrels per day to 250,000 barrels per day by
January 1, 2012. The House passed H.R. 4 on August 2, 2001 by a
vote of 240 to 189. In considering H.R. 4, the Senate stripped
the House text and substituted the text of S. 517, as amended.
On April 18, 2002, Senator Murkowski offered Senate Amendment
3159 adding Title XXVI to prohibit direct or indirect import of
Iraqi-origin oil 30 days after enactment of the Act. The ban
would remain in effect until the President certifies to
Congress that: (1) Iraq is in compliance with United Nations
Security Council resolutions on destruction of weapons of mass
destruction and the food-for-oil program, and Iraq stops
compensating families of Palestinian suicide bombers, or (2)
resuming imports of oil from Iraq would not be inconsistent
with the national security and foreign policy interests of the
United States. The Senate amendment also included a sense of
the Senate that the President should ensure that humanitarian
needs of Iraqi people are not affected by this Act and
encourage humanitarian assistance to Iraq. The Senate accepted
Senate amendment 3159 by a vote of 88 to 10.
On April 25, 2002, the Senate agreed by unanimous consent
to Senate amendment 3082 by Senator Reid as an amendment to S.
517, which was incorporated as an amendment to H.R. 4, the
Energy Policy Act of 2002. The provision provided that any
gasoline or diesel fuel sold at a duty-free sales enterprise
would be considered to be entered for consumption into the
customs territory of the United States.
The Senate passed its version of H.R. 4 by a vote of 88 to
11. No further action was taken by either body in the 107th
Congress.

f. Miscellaneous Provisions Included in the Trade Act of 2002

i. Duty on Certain Steam or Other Vapor Generating Boilers
Used in Nuclear Facilities
On May 4, 2001, the Committee requested comments on a
proposal to temporarily suspend the duty on certain steam or
other vapor generating boilers used in nuclear facilities (H.R.
1067). The Committee received comments from supporters and
opponents to the provision.
The Senate amendment to the Senate version of H.R. 3009,
the Trade Act of 2002, included a provision to provide duty-
free treatment for such nuclear steam generators through 2006.
H.R. 3009 as passed by the House did not include any similar
provision. The House receded to the Senate on this provision in
conference, and the bill was signed into law by the President
on August 6, 2002 (P.L. 107-210).
ii. Wool Provisions
H.R. 3009, the Trade Act of 2002, as passed by the House
did not include a provision related to wool. The Senate
amendment to H.R. 3009 as passed by the Senate included a
provision to extend a duty reduction on fabrics of wool to 2005
and increase the quantity of wool fabrics that may be imported.
The House receded to the Senate on this provision in
conference, and the bill was signed into law by the President
on August 6, 2002 (P.L. 107-210).
iii. Fund for WTO Dispute Settlements
Section 5201 of the Trade Act of 2002 (P.L. 107-210)
establishes in the U.S. Department of the Treasury a $50
million fund for the payment of the settlement of any dispute
pursuant to proceedings under the WTO. This provision was
included in the House's amendment, pursuant to H. Res. 450, to
the Senate amendment to H.R. 3009, which passed the House by a
vote of 216 to 215 on June 26, 2002.
iv. Sugar Tariff-Rate Quota Circumvention
H.R. 3009, the Trade Act of 2002, as passed by the House
did not include a provision related to sugar tariff-rate quota
circumvention. The Senate amendment to H.R. 3009 as passed by
the Senate included a provision requiring the implementation of
anti-circumvention measures on certain sugar and sugar-related
imports identified by the Secretary of Agriculture. Conferees
agreed to clarify the existing provision of the Harmonized
Tariff Schedule (HTS) of the United States and establish a
monitoring program to identify potential circumvention of
tariff-rate quotas on sugar. This provision was included in the
conference report, and the bill was signed into law by the
President on August 6, 2002 (P.L. 107-210).

g. Export Administration Act

On November 16, 2001, the Committee on Ways and Means
received joint and sequential referral, until December 7, 2001,
of H.R. 2581, the ``Omnibus Export Administration Act,'' as
reported by the House International Relations Committee (H.
Rept. 107-297 Part 1). The referral period was extended several
times. On October 25, 2002, the Committee on Ways and Means
sent a letter to Speaker Hastert waiving jurisdiction on H.R.
2581 in order toexpedite Floor consideration as requested by
President Bush. The bill included two significant provisions within the
jurisdiction of the Committee, which would essentially recodify import
sanctions for trade in violation of the Missile Technology Control
Regime (MTCR) and for proliferation of chemical and biological weapons.
No further action was taken on this bill.

h. Section 332 Study by the ITC on Tool and Die Industry

On December 21, 2001, Chairman Thomas wrote a letter to ITC
Chairman Koplan requesting a study of the domestic tool and die
manufacturing industry under section 332(g) of the Tariff Act
of 1930. More specifically, the Committee requested that the
ITC institute a fact-finding investigation of the current
competitive conditions facing producers in the U.S. tool, die,
and industrial mold, or tooling industries, including a profile
of the U.S. industry, trends in production, consumption, and
trade, a global market overview, and a comparison of the
strengths and weaknesses of U.S. and foreign producers. In
October 2002, the ITC submitted a report to the Committee,
providing an overview and analysis of the industry (ITC
Investigation 332-435).

i. Atlantic Marlin

On June 26, 2002, Representative Gilchrest introduced H.
Con. Res. 427 expressing the sense of the Congress regarding
the imposition of sanctions on nations that are undermining the
effectiveness of conservation and management measures for
Atlantic marlin adopted by the International Commission for the
Conservation of Atlantic Tunas and that are threatening the
continued viability of U.S. commercial and recreational
fisheries. The bill contained provisions within the
jurisdiction of the Committee on Ways and Means. On October 8,
2002, Chairman Thomas and Committee on Resources Chairman
Hansen exchanged letters acknowledging the Committee on Ways
and Means' jurisdiction over these provisions and agreeing to
forego the Committee on Ways and Means' consideration of the
bill. No further action was taken.

C. Legislative Review of Health Issues

1. MEDICARE REGULATORY AND CONTRACTING REFORM ACT OF 2001 (H.R. 2768/
H.R. 3391)

The Subcommittee on Health held a hearing on March 14,
2001, on the regulatory burden on Medicare's providers and
beneficiaries.
On August 2, Subcommittee Chairman Johnson and Ranking
Member Stark introduced the Medicare Regulatory and Contracting
Reform Act (H.R. 2768). The bill would streamline the
regulatory bureaucracy to create a more collaborative working
relationship with providers. It would create time frames for
issuance of new regulations, prohibit retroactive application
of the issuance of new regulations, improve provider education,
improve provider appeals, reform recovery of overpayments,
improve new technology integration, and delay by 1 year the
Medicare+Choice adjusted community rate (ACR) filing deadline
and implementation of the beneficiary lock-in. In addition, the
bill would reform Medicare's contracting system by
consolidating contracting functions for Part A and Part B,
requiring competition among contractors, and providing for more
flexibility for contractors.
After a legislative hearing on H.R. 2768 on September 25,
2001, the Health Subcommittee approved H.R. 2768 by a voice
vote October 4, 2001. This was followed by full Committee
approval by voice vote October 11, 2001. After conferring with
the Committee on Energy and Commerce, a revised version was
introduced (H.R. 3391) and passed the House 408 to 0 on
December 4, 2001.
The Senate failed to act on the measure. However, the
Bioterrorism Preparedness and Response Act of 2002 Act (H.R.
3448), which passed the House 418 to 2 on June 12, 2002, (P.L.
107-188), incorporated the Medicare+Choice provisions from H.R.
3391 but applied them for 3 years. The Medicare Modernization
and Prescription Drug Act (H.R. 4954), which passed the House
on June 27, 2002, incorporated all other regulatory and
contracting reform provisions from H.R. 3391. The Senate failed
to act on that measure as well.

2. PATIENT PROTECTION ACT OF 2001 (H.R. 2563)

The Health Subcommittee held a hearing on patient
protections in managed care on April 24, 2001.
The Subcommittee Majority in conjunction with the Committee
on Education and Workforce and the Committee on Energy and
Commerce drafted the Patient Bill of Rights (H.R. 2315), which
held health plans accountable for medical decisions, and was
endorsed by the White House. That bill became the basis for a
Floor amendment to the Bipartisan Patient Protection Act (H.R.
2563). In addition, Chairman Thomas offered a Floor amendment
to expand the Archer Medical Savings Account program and make
it permanent, which passed 236 to 194. H.R. 2563, as amended,
passed the House 226 to 203 on August 2, 2001. The Senate
passed a different version of the bill on June 29, 2001, but a
Conference Committee was never called to address differences
between the two bills.

3. ADMINISTRATIVE SIMPLIFICATION COMPLIANCE ACT (H.R. 3323)

The administrative simplification provisions of the Health
Insurance Portability and Accountability Act (HIPAA) of 1996
will improve administrative efficiencies in the health care
market, but many covered entities stated that they would have
difficulty coming into compliance with HIPAA regulations by the
October 16, 2002, deadline.
The Administrative Simplification Compliance Act (H.R.
3323) passed the House December 4, 2001, 410 to 0. It was later
adopted by the Senate by unanimous consent and became law (P.L.
107-105).
H.R. 3323 permits a 1-year extension of the deadline for
compliance with the HIPAA required transaction standards.
Entities that submit a compliance plan with the Secretary
demonstrating how they will come into compliance with the
standard within the next year are permitted a 1-year extension.
It also requires the U.S. Department of Health and Human
Services (HHS) to issue model compliance plans. Medicare
providers must submit electronic Medicare claims to Centers for
Medicare and Medicaid Services (CMS) as a condition of payment,
with exceptions for small providers.

4. MEDICARE MODERNIZATION AND PRESCRIPTION DRUG ACT (H.R. 4954)

The Committee on Ways and Means and its Health Subcommittee
held a series of 16 hearings on the state of the Medicare
program and how it needs to be modernized. These hearings
included an extensive review of many aspects of the Medicare
program. Specifically, the hearings addressed the regulatory
burden on providers and beneficiaries (March 15 , 2001, and
September 25, 2001), Medicare's solvency and overall
sustainability (March 20, 2001), the need to integrate a
prescription drug benefit into Medicare (March 27, 2001, and
April 17, 2002), the state of the Medicare+Choice program (May
1, 2001, and December 4, 2001), modernizing beneficiary cost-
sharing and reforming Medigap (May 9, 2001, and March 14,
2002), strengthening rural health care (June 12, 2002),
stabilizing payments to physicians (February 28, 2002),
promoting disease management (April 16, 2002), and the Bush
Administration priorities on Medicare (March 14, 2001, July 19,
2001, and February 6, 2002). These hearings provided the
foundation for the comprehensive Medicare Modernization and
Prescription Drug Act (H.R. 4954).
H.R. 4954 was introduced June 19, 2002, and was reported
out of the Committee on Ways and Means June 20, 2002, 22 to 16.
On June 28, the House passed H.R. 4954, 221 to 208. The Senate
failed to pass any Medicare bill.
The Medicare Modernization and Prescription Drug Act (H.R.
4954) would provide a voluntary, comprehensive prescription
drug benefit in Medicare delivered through competing private
health plans, costing about $323 billion over 10 years. The
plans would have the incentive and flexibility to aggressively
negotiate with pharmaceutical manufacturers, pharmacies, and
others in the distribution chain. The CBO estimated that a
provision which exempts Medicare prices from the ``Medicaid
best price'' would encourage greater discounting from the
pharmaceutical industry to save $18 billion in lower prices.
These plans would either provide a standard benefit or
actuarially equivalent benefit approved by Medicare within
certain parameters. The standard benefit would cover 80 percent
of the first $750 after a $250 deductible, 50 percent of
expenses between $1,000 and $2,000 and all drug costs once an
individual had spent $3,700 out-of-pocket. These stop loss
attachment points would rise with prescription drug cost
inflation. Subject to an asset test, low-income individuals
with incomes up to 175 percent of poverty would be fully
subsidized up to the initial benefit limit of $2,000 and for
the catastrophic benefit for their premiums and cost sharing
(except nominal copays). All other Medicare beneficiaries
receive a 67 percent premium subsidy. The CBO estimates
beneficiaries would pay an average premium of about $33 per
month in 2005, although premiums could vary between plans.
Beneficiaries could access the drug benefit in one of three
ways: (1) by enrolling in newly created prescription drug
plans, (2) by enrolling in a Medicare+Choice plan that offers a
prescription drug benefit, or (3) if eligible, by enrolling in
qualified retiree coverage (where employers could access
subsidies).
Medicare would be made primary and states' Medicaid and
pharmacy assistance program's obligations would be phased out
over 10 years. Beneficiaries could apply for the low-income
subsidy at Social Security offices. The bill also created
authority for the Administration to provide a prescription drug
discount card and a temporary low-income assistance program.
The bill provides a number of quality improvements and
beneficiary protections, including electronic prescribing,
formulary appeals, the ability to visit any pharmacy for a
higher fee, and medication therapy management programs. The
bill also added other new benefits for Medicare beneficiaries
including an initial preventative physical examination,
coverage of cholesterol, and blood lipid screening once every 2
years.
The bill allocated about $27 billion to improve and
modernize payments to Medicare's providers. The bill would
stabilize the Medicare+Choice program and in 2005 initiate a
competitive approach to encourage beneficiaries to select more
efficient plans and save money for the Medicare program. The
bill would block the significant payment cuts to physicians and
provide 3 years of payment increases. The bill significantly
strengthens rural hospitals by equalizing the ``standardized
amount,'' increasing rural DSH funding, improving the critical
access hospital program, and providing temporary bonus payments
to areas with negative margins. In addition, the bill provides
an increase in payments to all hospitals through increasing the
inpatient update and temporarily increases indirect medical
education payments while retaining the freeze on direct
graduate medical education. One of the temporary bonus payments
for skilled nursing facilities would be extended for 3 years,
costing about $2 billion. The 15 percent home health care
payment adjustment, which results in a 7-percent reduction in
payments, would be repealed, but home health agencies would
receive lower updates and a smaller outlier pool. Dialysis
facilities would receive a payment update in 2004. Durable
medical equipment providers would be subject to a competitive
bidding program, saving about $7.7 billion over 10 years.
A newly created Medicare Benefits Administrator would be
created to oversee the new prescription drug benefit and the
Medicare+Choice program. The entire regulatory reform bill (HR
3391) was included in the legislation to streamline the
regulatory process and modernize Medicare's contracting
functions.

5. TRADE ACT

On April 4, 2001, the Health Subcommittee held a hearing on
reducing the number of uninsured and received testimony on
health tax credits. On February 13, 2002, the full Committee
held a hearing about using tax credits to decrease the number
of uninsured.
On October 3, 2001, Chairman Thomas introduced the
Bipartisan Trade Promotion Authority Act, which the Committee
ordered reported on October 9, 2001, by a vote of 26 to 13. The
House passed the bill on December 6, 2001, 215 to 214. On June
26, 2002, the House passed H. Res. 450, which provided for
consideration of the Senate amendment to H.R. 3009, the Andean
Trade Promotion and Drug Eradication Act. H. Res. 450 allowed
for consideration of an amendment that folded in provisions of
H.R. 3005, as well as a health tax credit, disagreed to the
Senate amendment, and called for a conference between the two
chambers. The House passed the conference report to the Trade
Act (H.R. 3009, P.L. 107-210), 215 to 212 on July 27, 2002.
The law includes an advanceable, refundable tax credit for
displaced workers similar to the provision passed by the House.
The bill incorporated some of the ideas explored in the
hearings and included provisions similar to those included in
two prior economic stimulus bills (H.R. 3529 and H.R. 622) for
unemployed individuals eligible for unemployment insurance.
H.R. 3009 provides a 65-percent tax credit for qualified TAA
eligible individuals for COBRA coverage and various options
arranged by the States, including high-risk pools, insurance
policies, and State employee plans. Individuals with 3 months
of prior coverage would receive guarantee issue and pre-
existing condition protections. The bill provides new funding
for state high risk pools to offer coverage to uninsurable
individuals.

6. MEDICAL ERRORS

On March 7, 2002, the Health Subcommittee held a hearing on
improving health care quality and reducing medical errors. On
June 9, 2002, Subcommittee Chairman Johnson introduced the
Patient Safety Improvement Act (H.R. 4899). After the
Subcommittee held a hearing on the legislation September 10,
2002, the bill was revised and approved by the Health
Subcommittee on a voice vote September 12. The bill was further
revised and approved by the full Committee September 18, 2002,
33 to 4. The Committee on Energy and Commerce approved a
similar bill modeled on H.R. 4889 as amended, but the
Committees were unable to resolve jurisdictional concerns prior
to the conclusion of the 107th Congress.
H.R. 4889 would allow providers to report medical errors to
newly established patient safety organizations and provide
legal protections for such reported information, while
maintaining access to original source materials currently
available. These organizations and HHS would work with
providers to help them learn from their mistakes. The bill
would also develop voluntary standards for the interoperability
of health medical technology.

D. Legislative Review of Social Security Issues

1. SOCIAL SECURITY AND MEDICARE LOCK-BOX ACT OF 2001

On February 8, 2001, Representative Wally Herger introduced
H.R. 2, the ``Social Security and Medicare Lock-box Act of
2001.'' The bill was jointly referred to the Committee on the
Budget and the Committee on Rules.
On February 13, 2001, the bill was considered by the House
under suspension of the rules and passed, as amended, by a vote
of 407 to 2. In the Senate, H.R. 2, which was referred to the
Senate Committee on Finance and discharged from the Committee,
was jointly referred to the Budget and Governmental Affairs
Committees where no action was taken.
The bill would have helped ensure Social Security and
Medicare annual surpluses would be used to reduce publicly-held
debt by amending the Congressional Budget Act of 1974 to
provide a point of order against consideration of any: (1)
budget resolution that sets forth a surplus for any fiscal year
that is less than the projected surplus of the Medicare
Hospital Insurance (HI) Trust Fund for such year; or (2)
legislation that would cause a reduction in the portion of
projected budget surpluses attributable to projected Social
Security and Medicare HI Trust Fund surpluses. H.R. 2 would
have also required any Federal budget submitted by the
President that recommended an on-budget surplus for any fiscal
year that is less than the projected surplus of the Medicare HI
Trust Fund for such year to include a proposal for Social
Security or Medicare reform legislation. The Act would have
become inapplicable upon the enactment of Social Security and
Medicare reform legislation.

2. ECONOMIC GROWTH AND TAX RELIEF ACT OF 2001

On February 28, 2001, Chairman Thomas introduced H.R. 3,
the ``Economic Growth and Tax Relief Act of 2001.'' The bill,
as amended, was ordered reported by the Committee on March 1,
2001, by a vote of 23 to 15 (H. Rept. 107-7).
On March 8, 2001, H.R. 3 passed the House by a vote of 230
to 198. The bill included a provision to protect the Social
Security and Medicare Trust Funds from any loss of revenue they
receive from the taxation of Social Security benefits that
would result from a reduction in tax rates and other tax
provisions. Amounts transferred to the trust funds were to be
determined as if the tax law had not been enacted. Although
some provisions of H.R. 3were included in H.R. 1836, the
``Economic Growth and Tax Relief Reconciliation Act of 2001,'' which
became P.L. 107-16 on June 7, 2001, the provision protecting the Social
Security and Medicare Trust Funds from any related revenue loss was not
included in the version passed by the Senate or among the enacted
provisions.

3. RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2001

On March 21, 2001, Representative Don Young introduced H.R.
1140, the ``Railroad Retirement and Survivors' Improvement Act
of 2001.'' On May 16, 2001, the Committee on Transportation and
Infrastructure ordered the bill, as amended, to be reported (H.
Rept. 107-82 Part 1). The bill was referred to the Committee on
Ways and Means and was discharged from the Committee on July
12, 2001. (In the previous session of Congress, the Committee
had favorably reported similar legislation, H.R. 4844; H. Rept.
106-777 Part 2.) H.R. 1140 was considered by the House under
suspension of the rules and passed, as amended, on July 31,
2001, by a vote of 384 to 33.
The bill was referred to the Senate Committee on Finance
but was never reported out of Committee. On December 5, 2001,
the Senate substituted the text of H.R. 10, formerly the
``Comprehensive Retirement Security and Pension Reform Act of
2001,'' with the text of H.R. 1140 and passed H.R. 10, as
amended, by a vote of 90 to 9.
On December 11, 2001, the House agreed by a vote of 369 to
33 to suspend the rules and agree to the Senate amendment,
sending the bill onto the President, who signed it into law on
December 21, 2001 (P.L. 107-90).
H.R. 10 made several changes to the tax and benefit
structure of the Railroad Retirement program and expanded the
program's investment authority. The bill made four changes to
Railroad Retirement benefits. First, widow(er)s' benefits were
increased from 50 percent to 100 percent of the deceased
worker's Tier 2 annuity. Second, vesting requirements for Tier
1 and Tier 2 annuities were reduced from 10 years to 5 years of
service after 1995. Third, the normal retirement age was
reduced from 62 to 60 for workers with 30 years of service in
the rail industry, thus restoring the retirement age to its
pre-1983 level. Fourth, the maximum benefit, which applied to
Tier 2 annuities, was repealed.
H.R. 10 established a National Railroad Retirement
Investment Trust outside of the U.S. Department of the Treasury
to invest railroad retirement funds in non-governmental assets,
such as equities and debt, as well as in governmental
securities. An independent Board of Trustees was appointed to
administer the Trust. A private disbursing agent would
consolidate all funds needed to pay current benefits and issue
a single monthly benefit check to each beneficiary.
The supplemental annuity tax paid by railroad employers was
eliminated, and supplemental annuity benefits would be paid
from the National Railroad Retirement Investment Trust. In
addition, the Tier 2 payroll tax rate levied on employers would
be gradually reduced from 16.1 percent to 14.2 percent in 2003.
The Tier 2 tax rate paid by employees would remain 4.9 percent
through 2003. Thereafter, the tax rate for both employers and
employees would be set each calendar year pursuant to a
statutory formula based on a ratio of the balances and benefit
obligations of the National Railroad Retirement Investment
Trust. Depending on the ratio, Tier 2 tax rates for employers
will range between 8.2 and 22.1 percent; Tier 2 tax rates for
employees will range between 0 and 4.9 percent.

4. KEEPING THE SOCIAL SECURITY PROMISE INITIATIVE

On December 6, 2001, Subcommittee Chairman Shaw introduced
H. Con. Res. 282, the ``Keeping the Social Security Promise
Initiative.'' The bill was considered by the House under
suspension of the rules on December 12, 2001, and passed by a
vote of 415 to 5. The Senate took no action.
H. Con. Res. 282 expressed the sense of the Congress that
the ``President's Commission to Strengthen Social Security''
should present options to protect the program without lowering
benefits or increasing taxes. It also stated that the President
and the Congress should join to develop legislation to
strengthen Social Security as soon as possible, and that such
legislation should recognize the unique needs of women and
minorities, as well as guarantee current law promised benefits
and cost-of-living adjustments without increasing taxes.

5. SOCIAL SECURITY BENEFIT ENHANCEMENTS FOR WOMEN ACT OF 2002

On March 20, 2002, Subcommittee Chairman Shaw introduced
H.R. 4069, the ``Social Security Benefit Enhancements for Women
Act of 2002.'' On May 14, 2002, the bill, as amended, was
considered by the House under suspension of the rules and
passed by a vote of 418 to 0. The Senate took no action.
H.R. 4069 would have eliminated the requirement that
widow(er)s seeking disability benefits must have become
disabled within 7 years of the worker's death or the date of
last entitlement to benefits as a mother, father, or disabled
widow(er). In cases of divorce, a divorce must be final for at
least 2 years before an ex-spouse may collect benefits on a
worker's record. The bill would have eliminated this 2-year
waiting period in cases where the worker remarries someone
other than the ex-spouse during the 2 years following the
divorce. Lastly, H.R. 4069 would have increased the applicable
limit on certain widow(er)s' benefits in cases where the
deceased worker started collecting Social Security retirement
benefits and died before reaching the full retirement age.
In addition, the bill contained three offsetting tax
provisions that would have amended the Internal Revenue Code.
First, H.R. 4069 would have allowed individual taxpayers to
exclude from gross income any interest payments received from
the government on tax overpayments. Second, the bill would have
allowed taxpayers to deposit cash with the Treasury to cover
any future tax underpayment. Interest charges would not accrue
on the portion of the tax underpayment covered by the advance
cash deposit. Finally, the bill would have authorized the
Secretary of the Treasury to enter into installment agreements
for the partial payment of tax liabilities (rather than full
payment) if the Secretary determines that such agreement would
facilitate collection of the tax liability.

6. SOCIAL SECURITY PROGRAM PROTECTION ACT OF 2002

On March 20, 2002, Subcommittee Chairman Shaw introduced
H.R. 4070, the ``Social Security Program Protection Act of
2002.'' On April 25, 2002, the Subcommittee favorably reported
the legislation, as amended, to the full Committee. On June 26,
2002, the House considered the bill under suspension of the
rules and passed the legislation as amended by a vote of 425 to
0.
The bill was referred to the Senate on June 27, 2002. On
November 18, 2002, the Senate passed the legislation, as
amended, by unanimous consent. No further action was taken on
the bill.
H.R. 4070 would have protected vulnerable recipients from
misuse of benefits by their representative payees by:
authorizing the reissuance of certain misused benefits;
requiring enhanced oversight of representative payees;
disqualifying fugitive felons or persons convicted and
imprisoned more than a year from serving as representative
payees; requiring representative payees who misuse funds to
forfeit their fees; providing for the recovery of misused
benefits from the representative payee through the overpayment
recovery process; requiring representative payees who are
delinquent in filing annual accounting reports to collect the
individual's benefits in person at a local office; and
extending civil monetary penalties to representative payees who
misuse benefits.
In addition, H.R. 4070 would have provided further
protections for the Social Security program by withholding
Social Security benefits from those fleeing prosecution, or
custody or confinement after conviction of a felony. The
legislation would have also required individuals who provide
Social Security Administration-related services for a fee to
explain in their solicitation that such services may be
provided by SSA free of charge. The bill would have made
improvements to the attorney fee payment system to ensure
adequate access to legal representation for claimants who may
need assistance in the disability claims process.
Miscellaneous and technical amendments were also included,
a number of which were aimed at improving the effectiveness of
programs established in the Ticket to Work and Work Incentives
Improvement Act of 1999. For example, the bill would have
ensured that employers who hire individuals with disabilities
through referral by an employment network under the Ticket to
Work and Self-Sufficiency program would qualify for the Work
Opportunity Tax Credit. Lastly, the legislation would have
corrected, clarified, and modified various technical aspects of
Social Security law, including adding Kentucky to those States
that may divide their retirement systems to obtain Social
Security coverage, under State agreement, for those State and
local employees who want such coverage.

7. HELP AMERICA VOTE ACT OF 2002

On November 14, 2001, Representative Ney introduced H.R.
3295, the ``Help America Vote Act of 2001.'' The House approved
H.R. 3295 on December 12, 2001, by a vote of 362 to 63. The
bill, as passed, did not include provisions addressing the use
of Social Security numbers (SSNs) for voter registration.
Similarly, the Senate version of the bill, S. 565, did not
include any SSN provisions when it was introduced.
However, the Senate amended S. 565 on the Senate Floor, and
added provisions amending the Social Security Act that would
allow States to require an individual to furnish his or her SSN
to confirm identity, and would require the Commissioner of
Social Security to match a State's computerized listing of
registered voters with the names and SSNs in the Commissioner's
database. The Senate passed S. 565, as amended, on April 11,
2002, by unanimous consent. Representatives Thomas, Rangel, and
Shaw were named as conferees.
On October 10, 2002, the House agreed to the conference
report (H. Rept. 107-730) by a vote of 357 to 48. On October
16, 2002, the Senate, by a vote of 92 to 2 agreed to the
conference report. On October 29, 2002, the President signed
the bill into law (P.L. 107-252). The bill required individuals
registering to vote to provide a driver's license number or, if
the individual does not have a driver's license, the last four
digits of his or her Social Security number. A State election
official then must match the data in the statewide voter
registration database with the information in the State's motor
vehicle database. The State's motor vehicle authority must
enter into an agreement with the Commissioner of Social
Security to verify information (name, date of birth, SSN,
whether deceased) and include safeguards in the agreement to
ensure confidentiality and procedures to permit the State motor
vehicle authority to use the applicable information for
maintaining its records. Also, the Commissioner was required to
develop methods to verify the accuracy of information,
including applications for which the last 4 digits of the SSN
are provided in lieu of a driver's license number. In addition,
with the Election Assistance Commission, the Commissioner was
required to study and report to Congress on the feasibility and
advisability of using SSNs or other information compiled by the
agency to establish voter registration or other election law
eligibility or identification requirements, the impact ofsuch
use on national security issues, and whether adequate safeguards or
waiver procedures exist to protect the privacy of the individual voter.

E. Legislative Review of Human Resources Issues

1. CHILD WELFARE, FOSTER CARE, AND ADOPTION

H.R. 2873, Promoting Safe and Stable Families Amendments of
2001, reauthorized, amended, and expanded the Promoting Safe
and Stable Families program, which provides grants to States
and Indian Tribes for family support, family preservation,
time-limited family reunification, and adoption promotion and
support services. The legislation reauthorized the program for
5 years, adding a new $200 million authorization on top of the
$305 million in mandatory funding the program received in
fiscal year 2001, for a total authorization of $505 million per
fiscal year 2002 through 2006. The legislation added new
program findings and purposes, as well as new authority for the
Secretary of HHS to re-allot program funds not used by one or
more States among other States. Finally, the legislation added
new provisions concerning research and technical assistance,
for example requiring the Secretary of HHS to give priority to
research and evaluation of promising program models, including
models designed to address parental substance abuse.
H.R. 2873 also created a new matching grant program to
support mentoring networks for the children of prisoners. The
program authorized $67 million for competitive grants for each
of fiscal years 2002 and 2003, and such sums as may be
necessary for fiscal years 2004 through 2006. Finally, H.R.
2873 created a new program of education and training vouchers
for youths aging out of foster care. For each fiscal year 2002
through 2006, $60 million is authorized for this purpose. The
bill allowed States to fund education vouchers in amounts up to
$5,000 per year under the Chafee Foster Care Independence
Program for youths up to age 23 (at State option) for the cost
of attendance at postsecondary education and training
institutions.
A Human Resources Subcommittee hearing on the Promoting
Safe and Stable Families program was held on May 10, 2001. The
focus of the hearing was to explore how States used Promoting
Safe and Stable Families program funds, to learn which programs
have been effective, and to consider issues for further review
and action during the reauthorization process. Testimony at the
hearing was presented by program administrators, researchers,
and other experts on child welfare issues.
H.R. 2873 was introduced September 10, 2001, by
Subcommittee Chairman Herger and Ranking Member Cardin of the
Subcommittee on Human Resources. Considered by the Subcommittee
on September 25, 2001, the bill was ordered favorably reported
to the full Committee, as amended, by voice vote. The Committee
on Ways and Means considered the Subcommittee reported bill on
October 31, 2001, and ordered it favorably reported, as
amended, by voice vote. The House approved H.R. 2873, as
amended, by voice vote on November 13, 2001. The legislation
passed the Senate without amendment by unanimous consent on
December 13, 2001. The bill was signed by the President on
January 17, 2002 (P.L. 107-133).

2. WELFARE REFORM

a. Extension of the Contingency Fund Under the Temporary Assistance for
Needy Families Program

The Personal Responsibility and Work Opportunity
Reconciliation Act (P.L. 104-193), often referred to as the
1996 welfare reform law, authorized a new Temporary Assistance
for Needy Families (TANF) contingency fund providing a total of
up to $2 billion in added Federal assistance for certain needy
States. This fund originally was authorized through fiscal year
2001.
H.R. 3090 as enacted, the Job Creation and Worker
Assistance Act of 2002, included a section providing a 1-year
extension of the contingency fund through fiscal year 2002. The
contingency fund provides capped matching grant funds to
eligible States meeting certain criteria of need based on
unemployment and food stamp participation. H.R. 3090 was
amended and passed in the House on March 7, 2002, was passed in
the Senate on March 8, 2002, and was signed into law by
President Bush on March 9, 2002 (P.L. 107-147). Further
information regarding H.R. 3090 may be found in the review of
unemployment compensation issues below. The contingency fund
also was extended through the first two quarters of fiscal year
2003 as part of the temporary extension of TANF and related
programs described below.

b. Extension of Supplemental Grants for States With Population
Increases

The 1996 welfare reform law also created a program of
supplemental grants within the TANF program, authorizing a
total of $800 million in payments to eligible States in fiscal
years 1998 through 2001. H.R. 3090 as enacted, the Job Creation
and Worker Assistance Act of 2002, included a provision
reauthorizing the supplemental grants program for fiscal year
2002. These grants provide additional funds to States meeting
certain criteria such as high-population growth. The provision
in H.R. 3090 appropriated funds for supplemental grants in
fiscal year 2002 at the same level as in fiscal year 2001, that
is, a total of $319 million in the 17 eligible States. H.R.
3090 was amended and passed in the House on March 7, 2002, was
passed in the Senate on March 8, 2002, and was signed into law
by President Bush on March 9, 2002 (P.L. 107-147). Further
information regarding H.R. 3090 may be found in the review of
unemployment compensation issues below. Supplemental grants
also were extended through the first two quarters of fiscal
year 2003 as part of the temporary extension of TANF and
related programs described below.

c. Reauthorization of the Temporary Assistance for Needy Families
Program

The Personal Responsibility, Work, and Family Promotion Act
of 2002, H.R. 4737, extended and made improvements to TANF and
related programs. The TANF program, first authorized by the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (P.L. 104-193), currently provides cash assistance to 2
million low-income families through a program of temporary cash
benefits, work supports, and other assistance. The 1996 welfare
reform law authorized the TANF program through September 30,
2002.
Titles I and II of H.R. 4737 extended the authorization of
the TANF block grant through fiscal year 2007, with block grant
funding for States and territories maintained at the current
level of $16.6 billion per year, and increased funding for the
Child Care and Development Block Grant. Title I also amended
the purposes of TANF, including by adding an overarching
purpose of improving child well-being. The legislation also
focused additional funding specifically on promoting healthy
marriage, including by replacing the current $100 million bonus
fund rewarding decreases in out-of-wedlock birth ratios with an
annual $200 million program of healthy marriage promotion
grants (composed of $100 million in Federal funds with an equal
matching requirement). The bill also provided for the creation
of a $102 million fund for research, demonstrations and
technical assistance, to be used primarily for promoting
healthy marriage programs; $2 million of this fund is reserved
for improving child welfare among American Indian families.
Thus, the legislation reserved a total of $300 million per year
for activities and programs promoting the formation and
maintenance of healthy marriages. The legislation also
authorized a new $20 million per year fatherhood program. The
legislation converted high performance bonus funds into a new
$100 million per year bonus fund to reward employment
achievement.
H.R. 4737 increased mandatory funds for the Child Care and
Development Block Grant under the Committee on Ways and Means'
jurisdiction from $2.717 billion in 2002 to $2.917 billion for
each of fiscal years 2003 through 2007, for a total increase of
$1 billion over the 5-year period. The legislation increased
from 30 percent to 50 percent the share of TANF funds that
States may transfer to the Child Care and Development and
Social Services Block Grants, including permitting States to
transfer up to 10 percent of TANF funds to the Social Services
Block Grant in each of fiscal years 2003 through 2007.
H.R. 4737 specified universal engagement and self-
sufficiency plan requirements for all families receiving cash
assistance. It eliminated the option for individuals to receive
benefits for up to 2 years without participating in work or
other activities and specified certain conditions under which
States must provide for a full check sanction. Further, H.R.
4737 gradually increased the overall State work participation
rate requirement to 70 percent by fiscal year 2007 and raised
the total number of required hours in certain activities. The
legislation eliminated the separate and higher State work
participation rate requirement that currently applies to two-
parent families, and updated the credit for net caseload
reduction used in calculating the effective work rate that
States must achieve to satisfy Federal standards.
Title III of H.R. 4737 made changes to the Internal Revenue
Code to improve taxpayer protections. The bill allowed
taxpayers to exclude interest paid on overpayments from gross
income, limit underpayment interest through the use of a
qualified reserve account, and enter into partial payment
installment agreements.
Title IV of H.R. 4737 amended the child support program to
provide matching Federal funds to States passing through a
limited amount of child support to families receiving cash
welfare benefits, allowed States to distribute all child
support collected to former welfare families, and imposed a $25
annual user fee on certain child support cases. In addition,
the legislation required a report on undistributed child
support payments, provided access to the National Directory of
New Hires for administration of State unemployment programs,
reduced the amount of past-due child support that would trigger
passport denial, specified that the Federal income tax refund
offset program could be used for collection of past-due child
support when a child is no longer a minor, expanded the Federal
administrative offset program for certain past-due child
support, allowed for limited withholding of veterans'
disability benefits for child support purposes, and revised
technical funding formulas related to technical assistance.
Title V of H.R. 4737 extended and expanded waiver authority
for Federal child welfare programs administered under Title IV-
E of the Social Security Act. The authority for HHS to approve
demonstration projects of Title IV-E Foster Care and Adoption
Assistance programs expired on September 30, 2002. H.R. 4737
extended this authority through fiscal year 2007, eliminated
the cap on the number of waivers that can be approved, and
clarified that States may operate more than one waiver at a
time and that States may replicate successful projects
initiated by other States.
Title VI of H.R. 4737 amended Title XVI of the Social
Security Act to require review of a specified share of State
agency disability benefit eligibility determinations before
benefit payments under the Supplemental Security Income program
may begin.
Title VII of H.R. 4737 authorized States to apply for State
Flex demonstrations to coordinate multiple Federal programs
that provide assistance to low-income families. For example, a
State could apply to align administrative rules for operating
TANF, workforce development, and housing programs to better
serve families transitioning from welfare to work.
Titles VIII and IX of H.R. 4737 extended the authorization
of Transitional Medical Assistance and Abstinence Education
programs under the jurisdiction of the Committee on Energy and
Commerce.
A series of Subcommittee hearings in preparation for
reauthorization of the 1996 welfare reform law included a March
15, 2001, hearing to review research on the effects of the 1996
welfare reform law, an April 3, 2001, hearing on programs that
promote work, an April 26, 2001, hearing to examine ``rainy
day'' and other special funding issues under the TANF program,
and a May 22, 2001, hearing to review how States have used TANF
funds to promote marriage and family formation and what
additional approaches or programmatic changes may hold promise
to better promote marriage and family formation and discourage
illegitimacy.
A number of additional hearings leading up to introduction
of reauthorization legislation were held, including a July 11,
2001, hearing on human resources proposals contained in the
President's fiscal year 2002 budget proposal, a November 15,
2001, hearing on teen pregnancy prevention efforts since
enactment of the welfare reform law in 1996 and recommendations
for further improvements to prevent and reduce the incidence of
teen pregnancy, a March 7, 2002, hearing on implementation of
welfare work requirements and time limits, a field hearing on
April 2, 2002, to review welfare reform outcomes in Michigan,
and an April 11, 2002, open hearing on welfare reform
reauthorization proposals.
Legislation to reauthorize the Temporary Assistance for
Needy Families program was introduced by Subcommittee Chairman
Herger on April 9, 2002, as the Personal Responsibility, Work,
and Family Promotion Act of 2002 (H.R. 4090). Considered by the
Subcommittee on Human Resources on April 18, 2002, the bill was
ordered favorably reported to the full Committee, as amended,
by a 6 to 4 vote. The full Committee considered the
Subcommittee-reported bill on May 2, 2002, and ordered it
favorably reported, as amended, by a 23 to 16 vote. H.R. 4090
was discharged by the Committee on Education and the Workforce
on May 14, 2002. The Committee on Energy and Commerce on April
24, 2002, discharged legislation, H.R. 4122, addressing
transitional medical assistance and abstinence education
programs. This legislation was consolidated with H.R. 4090 as
approved by the Committee on Ways and Means as H.R. 4737, the
Personal Responsibility, Work, and Family Promotion Act of
2002, which was introduced on May 15, 2002. On May 16, 2002,
the House approved H.R. 4737 by a recorded vote of 229 to 197.
The legislation was considered by the Senate Committee on
Finance in a markup session on June 26, 2002. On July 25, 2002,
the Senate Committee on Finance ordered favorably reported a
substitute version of H.R. 4737, as amended, to the full
Senate. The Senate failed to consider the Finance-reported
legislation, and no further action was taken on H.R. 4737
during the remainder of the 107th Congress.

d. Temporary Extension of Authorization for the Temporary Assistance
for Needy Families and Related Programs

The 1996 welfare reform law authorized TANF and several
related programs through the end of fiscal year 2002. In order
to avoid a disruption of these programs in the absence of
agreement on broad reauthorization legislation, section 114 of
H.J. Res. 111, a Joint Resolution making continuing
appropriations for the fiscal year 2003 and for other purposes,
extended the authorization and funding for TANF, child care,
transitional medical assistance, and abstinence education
programs through December 31, 2002. H.J. Res. 111 was
introduced September 25, 2002, was passed in the House and
Senate on September 26, 2002, and became law on September 30,
2002 (P.L. 107-229).
H.J. Res. 124, a Joint Resolution making further continuing
appropriations for the fiscal year 2003, amended P.L. 107-229
to provide in January 2003 an additional quarter of program
funding, maintaining TANF and related programs in current form
through March 31, 2003. H.J. Res. 124 was introduced on
November 12, 2002, passed in the House on November 13, 2002,
passed in the Senate on November 19, 2002, and became law on
November 23, 2002 (P.L. 107-294).
As amended and passed in the House on November 14, 2002,
H.R. 5063 included a technical and clarifying amendment
regarding the extension of TANF and related programs in H.J.
Res. 124. No further action was taken on H.R. 5063 before the
107th Congress adjourned.

3. UNEMPLOYMENT COMPENSATION

a. Temporary Extended Unemployment Compensation Act

During the 107th Congress, the Committee on Ways and Means
led efforts in the House of Representatives to provide extended
unemployment benefits to workers affected by the recession that
began in March 2001 and by the September 11, 2001, terrorist
attacks. As described below, the House of Representatives
passed a series of bills in the wake of the September 11
attacks providing for economic stimulus and added supports for
unemployed workers. This process culminated in the signing on
March 9, 2002, of P.L. 107-147, legislation providing workers
nationwide with up to 13 additional weeks of extended
unemployment benefits, and up to 26 additional weeks in certain
high unemployment States. This legislation also provided all
States with a share of $8 billion in excess Federal
unemployment funds to be used to support unemployed workers and
assist in their return to work.
Committee on Ways and Means Chairman Bill Thomas introduced
H.R. 3090, the Economic Security and Recovery Act of 2001, on
October 11, 2001. Title III of thislegislation transferred $9
billion in excess Federal unemployment trust funds to the States and
increased the Social Services Block Grant program by $3 billion in
fiscal year 2002 to assist the States in providing health care coverage
for unemployed workers and their families. On October 12, 2001, the
Committee on Ways and Means ordered H.R. 3090 as amended favorably
reported by a vote of 23 to 14. This legislation was reported to the
House on October 17, 2001. H.R. 3090 as amended passed in the House on
October 24, 2001, by a vote of 216 to 214. On November 9, 2001, H.R.
3090 was placed on the Senate Legislative Calendar after being ordered
favorably reported as amended from the Senate Committee on Finance.
H.R. 3090 as amended by the Senate Committee on Finance was entitled
the Economic Recovery and Assistance for American Workers Act of 2001,
and included temporary enhanced unemployment benefits provisions. These
provisions provided federally funded extended unemployment benefits,
expanded benefit eligibility, and mandated increased benefit payments.
On December 19, 2001, Chairman Thomas introduced H.R. 3529,
the Economic Security and Worker Assistance Act of 2001. Title
VII of this bill, entitled the Temporary Extended Unemployment
Act of 2001, provided for a temporary program of up to 13 weeks
of federally funded extended unemployment compensation benefits
to individuals who exhausted their regular State unemployment
benefits. In addition, the legislation provided for
distribution to the States of $9 billion in excess Federal
unemployment trust funds. On December 20, 2001, the House
approved H.R. 3529 by a vote of 224 to 193.
Originally introduced as the Hope for Children Act on
February 14, 2001, H.R. 622 amended the Internal Revenue Code
to expand the adoption credit, and was passed in the House on
May 17, 2001, by a vote of 420 to 0. The Senate amended and
passed H.R. 622 as the Temporary Extended Unemployment
Compensation Act of 2002 on February 6, 2002, to extend
unemployment benefits for 13 weeks nationwide. On February 14,
2002, by a vote of 225 to 199, the House passed H.R. 622, as
amended, titled the Economic Security and Worker Assistance Act
of 2002. Title VI of this legislation, the Temporary Extended
Unemployment Compensation Act of 2002, extended unemployment
benefits nationwide for up to 13 weeks and provided up to an
additional 13 weeks of extended unemployment benefits in States
experiencing high rates of unemployment through December 2002.
The legislation also would have transferred $8 billion in
surplus Federal unemployment funds to the States. Title VII of
this legislation established a displaced worker health
insurance credit. No further action was taken on H.R. 622 in
the 107th Congress.
On February 14, 2002, the Senate approved H.R. 3090, as
amended, renamed the Temporary Extended Unemployment
Compensation Act of 2002. The bill extended federally funded
unemployment benefits for 13 weeks nationwide. Finally, H.R.
3090, as amended and renamed the Job Creation and Worker
Assistance Act of 2002, passed in the House on March 7, 2002,
by a vote of 417 to 3. The Senate passed the amended H.R. 3090
on March 8, 2002, and the legislation was signed into law by
President Bush on March 9, 2002 (P.L. 107-147).
Title II of H.R. 3090 provided for up to 13 weeks of
federally funded extended unemployment benefits under the
Temporary Extended Unemployment Compensation (TEUC) Act of
2002. The TEUC benefits were made available in every State
through December 2002 to individuals exhausting their rights to
up to 26 weeks of State unemployment benefits. In addition, in
certain high unemployment States (i.e., those with an insured
unemployment rate of 4 percent or higher, among other criteria
for accessing benefits under the permanent law Federal-State
Extended Benefits program) up to an additional 13 weeks of
temporary extended benefits were made available. Finally, the
unemployment provisions of this legislation provided for the
immediate transfer of $8 billion in surplus Federal
unemployment funds to the States.
As the 107th Congress drew to a close, the House and Senate
approved separate bills to extend part or all of the TEUC
program created in P.L. 107-147. On November 14, 2002, the
House approved by voice vote an amended version of the Senate-
passed amendment to H.R. 5063, originally titled the Armed
Forces Tax Fairness Act of 2002, which included a section
continuing for up to 5 weeks the extended unemployment benefits
of those receiving benefits as of the program's original
expiration on December 28, 2002. This legislation also provided
for the continued availability of additional weeks of special
extended unemployment benefits in certain high unemployment
States. Also, on November 14, 2002, the Senate amended H.R.
3529, the Economic Security and Worker Assistance Act, which
provided for a continuation of the TEUC program created in P.L.
107-147 and passed it by unanimous consent. No further action
was taken on either H.R. 5063 or H.R. 3529 during the remainder
of the 107th Congress.

4. CHARITABLE CHOICE AND INDIVIDUAL DEVELOPMENT ACCOUNTS

The Charitable Choice Act of 2001 was included as Title II
of H.R. 7, the Community Solutions Act of 2001, as passed in
the House on July 19, 2001, by a vote of 233 to 198. This
legislation established guidelines for religious organizations
or their affiliates to receive Federal funds for the provision
of social services. Any governmental organization that
contracts with a religious organization to provide social
services was required to guarantee that eligible individuals
who object to a specific service provider on religious grounds
be directed to a different provider of comparable services.
Title III of H.R. 7 amended the Assets for Independence Act
to increase the authorization for a matched savings program,
which supports the creation and funding of Individual
Development Accounts or IDAs for low-income working families.
Funding for the program was increased from $25 million annually
to $50 million annually beginning in fiscal year 2002, with
funds authorized through fiscal year 2008. Other program
changes included allowing additional federally-insured credit
unions to serve as eligible grant applicants tooperate IDA
projects, replacing the current lifetime limit on individual and
household receipt of Federal matching grants with an annual limit of up
to $500 in Federal matching grants per individual, and making certain
other technical and conforming changes. On July 11, 2001, H.R. 7 was
amended and approved by the Committee on Ways and Means by a vote of 23
to 16. The House approved H.R. 7 as further amended by a vote of 233 to
198 on July 19, 2001. The bill was referred to the Senate Committee on
Finance, where it was considered, amended, and reported to the full
Senate on July 16, 2002. No further action was taken on H.R. 7 during
the remainder of the 107th Congress.
On June 14, 2001, the Subcommittee on Human Resources held
a joint hearing with the Subcommittee on Select Revenue
Measures to review H.R. 7, the Community Solutions Act of 2001.
Witnesses included Members of Congress, policy specialists,
faith-based program representatives, State program
administrators, religious organizations, and organized labor.

5. CHILD SUPPORT

Title IV of H.R. 4737, the Personal Responsibility, Work,
and Family Promotion Act of 2002, amended the child support
program to provide matching Federal funds to States passing
through a limited amount of child support to families receiving
cash welfare benefits, allowed States to distribute all child
support collected to former welfare families, and imposed a $25
annual user fee on certain child support cases. In addition,
the legislation required a report on undistributed child
support payments, provided access to the National Directory of
New Hires for administration of State unemployment programs,
reduced the amount of past-due child support triggering
passport denial, allowed the Federal income tax refund offset
program to be used for collection of past-due child support
when the child is no longer a minor, expanded the Federal
administrative offset program for certain past-due child
support, allowed limited withholding of veterans' disability
benefits for child support purposes, and revised funding
formulas related to technical assistance. Additional
information regarding H.R. 4737 is provided in the review of
welfare reform issues above.

6. SUPPLEMENTAL SECURITY INCOME

a. Disability Decision Review

Title VI of H.R. 4737, the Personal Responsibility, Work,
and Family Promotion Act of 2002, amended the Social Security
Act to require the SSA to review an increasing share of
Supplemental Security Income program disability decisions made
by State agencies before any benefits are paid. Additional
information regarding H.R. 4737 is provided in the review of
welfare reform issues above.

b. Social Security Protection

Title I of H.R. 4070, the Social Security Protection Act of
2002, included provisions improving and strengthening the
representative payee system for Supplemental Security Income
program recipients. H.R. 4070 as passed in the House also
extended the attorney fee system now used in the Old Age,
Survivors, and Disability Insurance program to the Supplemental
Security Income program. H.R. 4070 as amended passed in the
House on June 26, 2002, by a vote of 425 to 0 and passed the
Senate as amended on November 18, 2002. As passed in the
Senate, H.R. 4070 maintained the representative payee
provisions and did not contain the attorney fee provisions
related to the Supplemental Security Income program. No further
action was taken on H.R. 4070 in the 107th Congress.

7. SOCIAL SERVICES BLOCK GRANTS

Section 107(d) of Title I of H.R. 4737, the Personal
Responsibility, Work, and Family Promotion Act of 2002, as
passed in the House on May 16, 2002, increased to 10 percent
the limit on transfers from State TANF grants to carry out
State programs pursuant to Title XX of the Social Security Act
(Block Grants to States for Social Services). This would
restore for fiscal year 2003 and each succeeding fiscal year
the original limit on TANF transfers established in the 1996
welfare reform law (P.L. 104-193). Additional information
regarding H.R. 4737 is provided in the review of welfare reform
issues above.

8. CHILD CARE

Title II of HR 4737, the Personal Responsibility, Work, and
Family Promotion Act of 2002, as passed in the House on May 16,
2002, increased funding for the mandatory portion of the Child
Care and Development Block Grant from $2.717 billion in fiscal
year 2002 per year to $2.917 billion in each of fiscal years
2003 through 2007. Additional information regarding H.R. 4737
is provided in the review of welfare reform issues above.

F. Legislative Review of Debt Issues

On June 24, 2002, Senator Tom Daschle introduced S. 2578, a
bill to amend Title 31 of the U.S. Code to increase the public
debt limit. The bill passed the Senate on June 11, 2002. The
House of Representatives passed the bill on June 27, 2002, and
the President signed the bill into law on June 28, 2002 (P.L.
107-199). The bill increased the public debt limit from $5.95
trillion to $6.4 trillion. The bill does not violate the
origination clause of the Constitution of the United States
because increasing the debt limit is not a revenue measure.

II. Oversight Review

A. Oversight Agenda

Committee on Ways and Means,
House of Representatives,
Washington, DC, February 7, 2001.
Hon. Dan Burton,
Chairman, Committee on Government Reform, Rayburn House Office
Building, Washington, DC.
Hon. Robert W. Ney,
Chairman, Committee on House Administration, Longworth House Office
Building, Washington, DC.
Dear Chairman Burton and Chairman Ney: In accordance with
the requirements of Clause 2 of Rule X of the rules of the
House of Representatives, the following is a list of oversight
hearings and other oversight-related activities which the
Committee on Ways and Means and its Subcommittees plan to
conduct during the 107th Congress.

FULL COMMITTEE

1. Rules, Regulations, Statutes and Court Decisions. On an
ongoing basis, the Committee and its Subcommittees will review
specific problems within the Committee's jurisdiction with
Federal rules, regulations, statutes and court decisions that
are ambiguous, arbitrary, or nonsensical, or impose a severe
financial burden on individuals.
2. President Bush's Proposed Tax Relief Measures. The full
Committee will hold hearings to consider the proposals in
President Bush's tax relief plan.
3. Tax Simplification. The full Committee will hold
hearings to examine proposals to simplify existing tax laws.

SUBCOMMITTEE ON OVERSIGHT

1. Taxpayer Advocate Report. The Subcommittee will hold a
hearing to examine the annual report of the Internal Revenue
Service (IRS) Taxpayer Advocate to the tax-writing committees.
In this report, which was mandated by the Taxpayer Bill of
Rights 2 (TBOR2), the Taxpayer Advocate identified initiatives
undertaken to improve taxpayer services and IRS responsiveness
and provided recommendations from the Problem Resolution
Officers in IRS District Offices as to how to resolve problems
which taxpayers experience in their dealings with the IRS.
2. Most Serious Management Problems. The Subcommittee will
hold hearings to receive testimony from the GAO and the
Inspectors General regarding high-risk programs (i.e., programs
vulnerable to waste, fraud, or abuse) within the Committee's
jurisdiction. The information obtained at this hearing about
high risk-programs will lay the groundwork for additional
oversight activities in the 107th Congress.
3. IRS Budget, Filing Season. The Subcommittee will hold a
hearing in March or April in both 2001 and 2002 to review the
Administration's request for the IRS fiscal year 2002 and
fiscal year 2003 budgets respectively and the current tax
return filing season. Among other things, the Subcommittee will
review how the IRS is improving customer service, how it is
implementing recent changes in the tax law, and how it is
progressing in its effort to modernize its computer system to
handle the growing workload.
4. Tax Law Complexity and the Compliance Burden. In
cooperation and coordination with the full Committee and
Subcommittee on Select Revenue Measures, the Subcommittee
continued its efforts from the 105th and 106th Congresses to
examine areas of complexity in Federal tax law. Section 4022(a)
of the IRS Restructuring and Reform Act of 1998 (RRA) directed
the Commissioner to conduct a yearly analysis of the sources of
complexity in the administration of Federal tax laws. The
Commissioner's report must include any recommendation for
reducing complexity in the Federal tax laws and for repealing
or modifying any provision, which adds undue complexity. The
same section requires the JCT to report at least once each
Congress on the ``overall state of the Federal tax system,
together with recommendations with respect to possible
simplification proposals and other matters relating to the
administration of the Federal tax system.''
5. Tax Laws and the New Economy. On September 26 and 28,
2000, the Subcommittee held hearings on whether Federal tax
laws are keeping pace with the ``new economy.'' A major focus
was the comprehensive study of recovery periods and
depreciation methods which the Tax and Trade Relief Extension
Act of 1998 directed the Treasury Secretary to conduct. In
cooperation and coordination with the full Committee and
Subcommittee on Select Revenue Measures, the Subcommittee will
follow up on its work in this area.
6. Stock Option Plans. In cooperation and coordination with
the full Committee and Subcommittee on Select Revenue Measures,
the Subcommittee will continue its efforts, begun in the 106th
Congress, to determine whether current tax rules are limiting
the ability of businesses to offer stock options to a broad
base of employees.
7. Tax Scams. The IRS and news reports have described
promoters who incorrectly are advising business owners that the
16th Amendment was fraudulently adopted or that no tax laws
require them to withhold taxes from employee paychecks. The
Subcommittee will investigate the efforts by the IRS to address
this situation.
8. International Tax System. In cooperation and
coordination with the full Committee and Subcommittee on Select
Revenue Measures, the Subcommittee will continue its efforts
from the 106th Congress to review impediments to the
competitiveness of U.S. companies in the current international
tax regime, including electronic commerce, in order to promote
efficient growth for U.S. goods and services in the global
economy.
9. IRS Systems Modernization. The Subcommittee will
continue its efforts to monitor the progress of the IRS in
modernizing its computer systems. Protecting the security of
taxpayer information will be a major focus of this ongoing
review. Over the next decade the IRS will spend tens of
billions of dollars to update its systems. Success of this
effort is critical to the IRS' ability to provide efficient
service to taxpayers.
10. Taxpayer Rights. The 105th Congress passed the landmark
RRA, which contains numerous taxpayer safeguards, as part of
its Taxpayer Bill of Rights 3 title. The RRA also includes
significant IRS organizational changes. The Subcommittee will
review the ongoing implementation of the new law regarding
various aspects of improved service for law-abiding taxpayers
as well as compliance issues related to tax law violators. For
example, the Subcommittee could examine the IRS progress
regarding the RRA provisions dealing with offers in compromise
and innocent spouses.
11. Taxpayer Privacy. On April 11, 2000, the House passed
H.R. 4163, the Taxpayer Bill of Rights 2000. The measure
includes a number of provisions to strengthen taxpayer privacy.
However, the Senate did not take up the measure. Pursuant to
the RRA, the U.S. Department of the Treasury and the JCT have
completed studies on the confidentiality of taxpayer
information. The Subcommittee will continue to examine the need
to strengthen taxpayer privacy protection.
12. Customs Oversight. In cooperation with the Trade
Subcommittee, the Subcommittee will review the operations of
the Customs Service, including efforts to upgrade computer
systems, interdict illegal drugs at the border, and comply with
the Customs Modernization Act. The Subcommittee also should
review the ability of the Customs Service to detect outbound
shipments of illegal drugs and cash in light of the refusal of
the U.S. Postal Service to permit the Customs Service to
examine outbound mail.
13. Administration of Medicare. The Subcommittee will work
with the Health Subcommittee to coordinate oversight of the
Health Care Financing Administration.
14. Social Security Administration. The Subcommittee will
work with the Social Security Subcommittee to coordinate
oversight of the SSA.
15. Field Investigations and Hearings. The Subcommittee
will conduct such field investigations and hearings as
Committee staffing and budget resources permit, and as are
necessary for purposes of evaluating the effectiveness of and
compliance with the programs and laws under the jurisdiction of
the Committee on Ways and Means.

SUBCOMMITTEE ON TRADE

1. Bush Administration Trade Policy. The Subcommittee will
hold a hearing to give the new Administration an opportunity to
describe its trade policy and respond to Member questions.
2. Andean Trade Preference Act. The Subcommittee will hold
a hearing on the question of extending and expanding the Andean
Trade Preference Act, which has proven a valuable weapon in the
war against drugs by creating economic incentives to encourage
Colombia, Bolivia, Ecuador, and Peru to move out of the
production and shipment of illegal drugs and into legitimate
products. Authorization for this program expires on December 4,
2001. The Committee will consider legislation to extend and
expand trade benefits to additional product categories.
3. Extension of Fast Track Authority. The Subcommittee will
hold hearings and work with the new Administration, the
business community, and other interested groups to construct an
effective procedure for implementing trade agreements into U.S.
law with the goal of strengthening the hand of the United
States at the negotiating table and maximizing Congressional
oversight and input with respect to trade negotiations.
4. Free Trade Area of the Americas. In preparation for the
Quebec Summit meeting scheduled for April 20, 2001, the
Subcommittee will hold a hearing on the status of negotiations
to establish a Free Trade Area of the Americas.
5. Jackson-Vanik Waiver and Extension of Normal Trade
Relations to the Socialist Republic of Vietnam. The
Subcommittee will hold a hearing in the spring on the U.S.-
Vietnam Bilateral Trade Agreement, which was concluded on July
13, 2000, and consider approval of the agreement. Congressional
approval would make Vietnam eligible for normal trade
relations, subject to annual renewal under the Jackson-Vanik
amendment. Approval procedures are covered by permanent fast
track provisions in the Trade Act of 1974, which are triggered
by the transmittal of the agreement to Congress by the
President. The Subcommittee's annual review of Vietnam's
Jackson-Vanik waiver will begin in June with a Presidential
determination of what that country's status should be for the
upcoming year. Until the U.S.-Vietnam Bilateral Trade Agreement
is transmitted and approved by Congress, the effect of the
waiver is to make U.S. exporters eligible for certain export
credit guarantees in doing business with Vietnam. If a
resolution of disapproval is introduced with respect to the
President's Jackson-Vanik determination for Vietnam, the
Subcommittee plans to hold a hearing and consider the issue.
6. Trade Agreement with Jordan. The Subcommittee will hold
a hearing in the spring on the U.S.-Jordan Free Trade
Agreement, which was concluded on October 24, 2000, and will
consider legislation to implement it. The agreement is not
covered by fast track authority or implementing procedures.
7. Preparations for the 2001 World Trade Organization
Ministerial. The Subcommittee will hold hearings on United
States preparations for the 2001 WTO Ministerial in Qatar,
progress in the ongoing WTO negotiations on services and
agriculture, and progress on the launch of a new round of trade
negotiations in the WTO.
8. Negotiation of Other Free Trade Agreements. The
Subcommittee will hold a hearing on H.R. 1942, a bill
introduced by Chairman Crane in the 106th Congress, to
encourage the negotiation of free trade agreements between the
United States and countries in the Pacific Rim region, such as
New Zealand, Australia, Singapore and Chile. Testimony will
also be taken on the status of negotiations to establish
separate free trade agreements with Singapore and Chile that
were initiated by the President in December of 2000. In
addition, the Subcommittee will explore whether other countries
may be appropriate candidates for free trade agreements.
9. Trade Relations with Europe. The Subcommittee will
review the failure of Europe to implement WTO panel
determinations that trade restrictions on bananas and beef
hormones are inconsistent with Europe's trade obligations under
the WTO by contrast with U.S. full implementation of the FSC
decision.
10. Trade and Development Act of 2000. The Subcommittee
will hold a hearing or request public comment on the Trade and
Development Act of 2000 to ensure that the legislation (Africa/
Caribbean Basin Initiative) is being implemented in a manner
that works for the companies and the countries that are trying
to participate.
11. U.S. Trade Remedy Laws. The Subcommittee will continue
to review the application of U.S. antidumping and
countervailing duty laws as well as the effect of antidumping
orders on downstream users of products subject to these orders.
The Subcommittee will continue to monitor the status of World
Trade Organization consultations, panel proceedings, and
decisions concerning U.S. trade remedy laws or their
application, and will work with the Administration to determine
if any changes in U.S. law or policy are appropriate.
12. Authorizations for U.S. Customs, the Office of the
USTR, and the ITC. The Subcommittee will hold hearings on
authorizations for the trade agencies for fiscal years 2002 and
2003 and work towards passage of authorization legislation. The
Subcommittee will review funding for the Customs Automated
Commercial Environment (ACE), the Customs Cyber-smuggling
Center, drug enforcement efforts, and the International Trade
Data System (ITDS). The Subcommittee will also examine the
compensation package for Customs officers to determine whether
it is adequate and appropriate and will consider measures to
reform premium and overtime pay for Customs officers. The
Subcommittee will continue to review Customs drug interdiction
efforts to analyze their effectiveness as well as their impact
on business facilitation. In addition, the Subcommittee will
review annually the portions of the President's budget for
other agencies that have functions within Ways and Means
oversight jurisdiction, such as the Commerce Department, State
Department (payments to international organizations), etc.
13. Trade Relations with China. The Subcommittee will
continue to examine China's progress in acceding to the WTO and
will monitor China's compliance with its WTO obligations.
14. Miscellaneous Reforms of U.S. Customs Laws and
Practices. The Subcommittee will likely hold oversight hearings
on Customs procedures to streamline the entry process and
facilitate the movement of goods. The Subcommittee will follow
up on the Customs study required by H.R. 4868 (106th Congress)
concerning streamlining and expediting the entry process and
will continue to work with Customs on the Entry Revision
Project. In addition, in light of a GAO study requested by
Chairman Crane which found that the Office of Regulations and
Rulings at the Customs Service did not issue rulings timely,
the Subcommittee will continue its oversight to ensure that
Customs is making the changes needed to address this concern.
Finally, the Subcommittee will review GAO's conclusions
regarding Customs self-inspection program and take any needed
action.
15. Sanctions Reform. In response to the dramatic growth in
the imposition of unilateral economic sanctions and their
impact on U.S. trade and competitiveness in international
markets, the Subcommittee will continue its oversight on the
use and effectiveness of U.S. unilateral trade sanctions. In
addition, the Subcommittee will work for passage of the
``Enhancement of Trade, Security, and Human Rights Through
Sanctions Reform Act'' to establish a procedural framework for
the consideration of future U.S. unilateral sanctions. Among
other things, this framework would require that Congress and
the President consider a number of factors before imposing
future unilateral trade sanctions, including the likelihood
that a proposed sanction will achieve its intended objectives
and whether the achievement of those objectives outweigh any
likely costs to United States foreign policy, national
security, economic, and humanitarian interests. In addition,
the legislation would ensure that the public has an opportunity
to comment on proposed unilateral trade sanctions before they
are imposed.
16. U.S. Policy Toward Cuba. The Subcommittee will consider
and review the findings of an ITC study requested by the
Committee pursuant to section 332 of the Tariff Act of 1930 on
the economic impact of U.S. sanctions with respect to Cuba. The
ITC's report is due in February 2001 and will include an
overview of U.S. sanctions with respect to Cuba, adescription
of the Cuban economy and trade regime, and an analysis of the
historical impact of U.S. sanctions on both the U.S. and Cuban
economies.
17. Trade Relations with Japan. The Subcommittee will
continue its oversight of U.S.-Japan trade relations, focusing
on the necessity for Japan to implement broad structural
reforms, including deregulation of its economy, reform of its
banking system, improved transparency, and the opening of its
distribution system to eliminate exclusionary business
practices.
18. Permanent Normal Trade Relations with Jackson-Vanik
Countries that Join the WTO. At present, many countries whose
trade status is subject to the Jackson-Vanik amendment to Title
IV of the Trade Act of 1974 are in the process of joining the
WTO. The Subcommittee will continue to monitor the progress of
these countries in negotiating accession to the WTO and will
consider country-specific legislation authorizing the President
to determine that the Jackson-Vanik amendment should no longer
apply as a country becomes a WTO member. Currently, the
Subcommittee is aware that Armenia and Moldova may join the WTO
in the near future.
19. Trade Adjustment Assistance. The Subcommittee will
continue its oversight and consider reauthorization of the
general TAA programs for workers and firms, as well as the
NAFTA-related TAA programs. All of the TAA programs will expire
on September 30, 2001.
20. Generalized System of Preferences. The Subcommittee
will continue its oversight of and consider the reauthorization
of the GSP which expires on September 30, 2001.
21. Asia Pacific Economic Cooperation (APEC) Forum. The
Subcommittee will continue to review the status of U.S. trade
policy objectives in Asia, particularly in the Asia Pacific
Economic Cooperation Forum negotiations.
22. User Fees. The Subcommittee will continue its oversight
of Customs user fees, including the amount of the fees and
their relationship to the actual cost for providing services.
The Subcommittee will examine issues surrounding the
Consolidated Omnibus Reconciliation Act of 1985 (COBRA)
account, especially whether the account contains sufficient
resources to fund inspectional services and whether revised fee
collections are needed.
23. Rules of Origin and Country of Origin Marking. The
Subcommittee will review and continue to consult with the
Administration and the trade community on the status of the
rules of origin negotiations underway in the World Customs
Organization; update rules of origin and country of origin
marking to implement those negotiations so they reflect current
business production, sales, and distribution practices; review
whether U.S. law and U.S. Customs enforcement efforts are
effective in preventing unlawful transshipment; review labeling
requirements of U.S. trading partners with respect to meat,
fresh produce, forged hand tools, and genetically modified
products.
24. Normal Trade Relations with the Lao People's Democratic
Republic. In 1997, the United States and the Lao People's
Democratic Republic concluded a bilateral commercial agreement
which calls for a reciprocal extension of normal trade
relations. In the 107th Congress, the Subcommittee will
continue its oversight of bilateral relations between the
United States and Laos.
25. Drug Interdiction. The Subcommittee will hold a hearing
to review U.S. Customs Service activities (and other Federal
efforts) to interdict illegal drugs.

SUBCOMMITTEE ON HEALTH

1. Management of the Health Care Financing Administration.
The Subcommittee will hold a hearing to evaluate the management
of the Health Care Financing Administration (HCFA) and to
explore changes that could be made to improve its organization
and efficiency.
2. MedPAC Report and Recommendations. The Subcommittee will
hold a hearing on the Medicare Payment Advisory Commission's
(MedPAC) 2001 recommendations to Congress regarding Medicare
payment policies. Every year, MedPAC's panel of health care
experts makes recommendations to Congress and its Committees
with jurisdiction over the program.
3. Medicare+Choice Program. The Subcommittee will hold a
hearing to examine the structure and operation of the
Medicare+Choice program with particular focus on ways to
stabilize and expand access to the program and to examine the
efficiency of the funding structure of the program.
4. Progress in the Development of Prospective Payment
Systems. The Subcommittee will hold a hearing to assess the
progress and monitor the operation of the various prospective
payment systems (PPS) in the Medicare program, including the
payment systems for home health, hospital outpatient, hospital
inpatient rehabilitation and other services furnished to
Medicare beneficiaries.
5. Health Care Quality. The Subcommittee will hold a
hearing to examine health care quality issues, including
changes in the health care market place that affect consumers
and small providers.
6. Administrative Simplification under the Health Insurance
Portability and Accountability Act (HIPAA) of 1996. The
Subcommittee will hold a hearing on the implementation of
administrative simplification requirements of HIPAA and their
potential effect on providers.
7. Medicare Waste, Fraud and Abuse. The Subcommittee will
hold a hearing on the enforcement of laws to combat waste,
fraud and abuse in the Medicare program and what steps might be
taken to improve their application. In addition, the hearing
will examine whether steps can be taken to improve the
application of these laws so that providers, and small
providers in particular, are not unnecessarily hampered.
8. Medically Uninsured. The Subcommittee will examine
options to reduce the number of individuals and families
without health insurance.
9. Benefits. The subcommittee will examine the adequacy of
the current benefit package and review whether changes are
needed in areas such as out-patient prescription drugs, mental
health care, breast cancer, chronic care and the ESRD program.
10. Other Issues. Further hearings will be scheduled as
time permits to examine certain additional aspects of Medicare
program management.

SUBCOMMITTEE ON HUMAN RESOURCES

1. Welfare Reform. The Subcommittee will conduct a series
of hearings to prepare for reauthorization of the welfare
reform law. Issues of particular interest to the Subcommittee
are the impact of welfare reform on children and families, and
the use of welfare funds to promote family formation including
pro-marriage initiatives, abstinence education, and fatherhood.
The Subcommittee also will examine the use of sanctions,
mandatory work programs, and time limits to achieve self-
sufficiency.
2. Child Care. Under welfare reform total Federal funding
to States for childcare was increased by about $4 billion over
6 years. The Subcommittee will examine whether States are
experiencing problems with the availability, cost, or quality
of child care, focusing especially on whether States are using
all the Federal funds available to them for child care.
3. Child Support Enforcement. Given the dramatic decline in
the welfare caseload, the financing and distribution of child
support orders has become an important issue in the States. The
Subcommittee will examine proposals to simplify and improve the
collection and distribution of child support payments to
families both on and off public assistance. In addition, the
Subcommittee will hold hearings to examine how child support
programs are financed, with special attention to the decline in
the welfare caseload.
4. Supplemental Security Income (SSI). For the past several
years the SSI program has been on the GAO list of programs at
high risk of waste, fraud, and abuse. The Subcommittee will
conduct a hearing on various proposals to reduce this risk.
5. Child Protection. The GAO has determined that there
exists a lack of accountability in state use of foster care
funds. The Subcommittee will hold hearings to examine
accountability in the foster care system, focusing especially
on outcomes of the newly established Federal review system and
the implementation of the 1997 Adoption and Safe Families Act.
In addition, the Subcommittee will examine various proposals to
provide more flexibility in the financing of the child
protection system. Finally, the Subcommittee will consider the
reauthorization of the Safe and Stable Families program which
provides grants to states for family preservation, community-
based family support, time-limited family reunification, and
adoption promotion and support services.
6. Unemployment Compensation. The Subcommittee will conduct
hearings on the nation's unemployment compensation system.
Several issues, including comprehensive reform proposals that
would increase State flexibility in designing and administering
the unemployment compensation program, will be examined in
these hearings.

SUBCOMMITTEE ON SOCIAL SECURITY

1. Social Security Trust Fund solvency issues. The
Subcommittee will hold a series of hearings to examine various
issues affecting the well-being of individual recipients and
the long-term solvency of the Social Security Trust Funds. In
addition the Subcommittee will examine work incentives to delay
retirement, senior tax burdens, impacts of the global aging
crisis, and Social Security coverage issues.
2. Use of the Social Security Number (SSN). The
Subcommittee will continue their examination of the use of the
Social Security number (SSN) as an identifier and the degree to
which such use contributes to identity theft and Social
Security program fraud. Legislative options to restrict the use
of SSNs in both the public and private sectors will also be
reviewed.
3. Disability program reform and oversight. The
Subcommittee will hold a series of hearings on the Social
Security Disability Insurance (DI) program, including: the
SSA's implementation of the Ticket to Work and Work Incentives
Improvement Act; oversight of SSA's disability program
management, including efforts to improve workload processing at
both the initial application and appeals levels; and a
comprehensive review of the challenges facing individuals with
disabilities today and the degree to which Social Security
disability programs address those challenges.
4. Stewardship of the Social Security programs. The
Subcommittee will conduct oversight hearings to examine the
management of the Social Security programs, to assess their
potential vulnerability to fraud, and to explore legislative
remedies, including provisions to protect beneficiaries whose
benefits are managed by representative payees.
5. Service delivery. The Subcommittee will continue its
ongoing oversight of SSA's service delivery as the agency
prepares to address the service needs of aging baby boomers
while facing the loss of one half of its workforce due to
retirement. The Subcommittee will address the agency's
management of information technology, efforts to modernize
service delivery to meet the changing expectations of today's
customers, plans to recruit and retain new workers, and
initiatives to educate the public on Social Security programs
and the challenges they face.

SUBCOMMITTEE ON SELECT REVENUE MEASURES

As directed by the Chairman of the full Committee, the
Subcommittee on Select Revenue Measures will conduct hearings
and develop legislation on a variety of tax issues. In some
cases, the Subcommittee's work will build upon the findings of
the Oversight Subcommittee.
This list is not intended to be exclusive. The Committee
anticipates that additional oversight activities will be
scheduled as issues arise and/or as time permits.
Sincerely,
Bill Thomas, Chairman.

B. Actions Taken and Recommendations Made With Respect to Oversight
Plan

Full Committee

1. Economic Growth and Tax Relief Reconciliation Act.
Actions taken: On February 5 and 6, 2001, the Committee
held hearings to discuss the President's fiscal year 2002
budget proposals. On February 13 and March 21, 2001, the
Committee held hearings to discuss the tax relief proposals
contained in the President's fiscal year 2002 budget.
On May 15, 2001, Chairman Thomas introduced H.R. 1836, the
``Economic Growth and Tax Relief Reconciliation Act of 2001.''
The bill included many of the President's tax relief proposals,
including the creation of a new 10-percent bracket, reduction
of the individual income tax rates, an increase in the child
tax credit, marriage tax penalty relief, an expansion of
Coverdell Education Savings Accounts, and a phase out of the
estate tax.
The bill passed the House on May 16, 2001, and passed the
Senate, with an amendment, on May 23, 2001. The conference
report on H.R. 1836 passed the House and Senate on May 26, 2001
and was signed into law by the President on June 7, 2001 (P.L.
107-16).
2. Tax Code Simplification.
Actions taken: On July 17, 2001, the Subcommittees on
Oversight and Select Revenue Measures held a hearing on tax
code simplification. The hearing focused on the nature and cost
of complexity in the tax code and the options for
simplification. The Subcommittees examined proposals by the
National Taxpayer Advocate and the JCT.
3. Hearings to examine Social Security Trust Fund issues.
Actions taken: The Committee held a joint hearing with the
Senate Committee on Finance on the Social Security and Medicare
Trustee's 2001 Annual Report on March 20, 2001. The Managing
Trustee, Secretary of the U.S. Department of the Treasury Paul
O'Neill, testified that while the short-term financial status
of both Social Security and Medicare improved somewhat over the
previous year's report, long-term analysis indicated that both
the HI and Old Age, Survivors, and Disability Insurance (OASDI)
programs' tax income was estimated to fall short of
expenditures beginning in 2016, that the HI trust fund would be
exhausted by 2029, and that the OASDI trust funds would be
depleted by 2038. He stated both programs should be
strengthened at the earliest opportunity.

Subcommittee on Oversight

A. Subcommittee Hearings for 107th Congress
1. Taxpayer Advocate Report.
Actions taken: The Subcommittee held hearings on July 12,
2001, and February 28, 2002, to examine the annual reports of
the Internal Revenue Service (IRS) Taxpayer Advocate. In these
reports, mandated by the Taxpayer Bill of Rights 2, the
Taxpayer Advocate identified initiatives undertaken to improve
taxpayer services and IRS responsiveness and provided
recommendations about how to resolve problems that taxpayers
experience in their dealings with the IRS.
2. Tax Code Compliance Burden.
Actions taken: The Subcommittee, in conjunction with the
Subcommittee on Select Revenue Measures, held a hearing on July
17, 2001, to focus on the nature and cost of complexity in the
tax code and the options for tax simplification. The hearing
reviewed various recommendations by the JCT for simplification
of the tax code, as presented in its study released in April
2001, entitled, ``Study of the Overall State of the Federal Tax
System and Recommendations for Simplification'' (JCS-3-01). The
report makes suggestions concerning many areas of the tax code,
including individual and corporate alternative minimum tax,
earned income credit, individual capital gains, the definition
of a qualifyingchild, phase-outs, individual retirement
accounts (IRAs), foreign tax credits, pass-through entities, tax-exempt
entities, excise taxes, and taxation of Social Security benefits. The
Subcommittee also heard testimony from representatives of the National
Taxpayers Union, the Taxpayers Foundation, Urban Institute, and the
Brookings Institution regarding ideas for simplification, and the
effects of the JCT's recommendations for simplification.
3. IRS Fiscal Year 2003 Budget/2001 and 2002 Tax Return
Filing Seasons.
Actions taken: The Subcommittee held a hearing on the 2001
Tax Filing Return Season on April 3, 2001, to review the
progress in customer service offered by the IRS in the 2001 tax
filing season, including progress in the customer
communications system, electronic filing, and systems
modernization. The Subcommittee held a hearing on April 9,
2002, to review developments in the 2002 tax-filing season,
including progress in the customer communications system,
electronic filing, and systems modernization. In addition, the
Subcommittee reviewed the proposed budget for the IRS for
fiscal year 2003.
4. Pension Policy.
Actions taken: The Subcommittee held two hearings on
pension policy issues. The first hearing, held on March 5,
2002, was on employee and employer views on defined
contribution pension plans. The hearing focused on possible
improvements that could be made to employer-sponsored defined
contribution retirement plans, to increase employee confidence,
and maintain employer support of such plans. The second
hearing, held on June 20, 2002, focused on issues related to
retirement security and defined benefit pension plans. The
Subcommittee examined the role of defined benefit pension plans
in retirement security, including advantages, disadvantages,
and reasons for trends in the decrease of the number of such
plans. The Subcommittee also examined the role of ``cash-
balance'' pension plans as a hybrid alternative to traditional
defined benefit pension plans, as well as the rules and
practical effects of converting a traditional defined benefit
into a cash balance plan.
5. Implementation of IRS Restructuring and Reform.
Actions taken: The IRS Restructuring and Reform Act of 1998
established the IRS Oversight Board, which was charged with
producing independent reviews of the IRS and its budgetary
needs, and mandated bicameral, annual reviews of the IRS. The
Subcommittee reviewed the first IRS Oversight Board annual
report and heard testimony from the Oversight Board's Chairman,
Larry Levitan, on February 28, 2002. The Subcommittee assisted
with the annual IRS Joint Congressional Reviews on May 8, 2001,
and May 14, 2002. These annual reviews are comprised of Members
of both the House and Senate from six Congressional committees
including, the House Committees on Ways and Means,
Appropriations, Government Reform, and the Senate Committees on
Finance, Appropriations, and Government Affairs. The Joint
Reviews are organized to review progress of the IRS in
implementing the Restructuring and Reform Act of 1998, as well
as review the strategic plans and budget of the IRS for the
upcoming fiscal year.
6. Penalty and Interest Reform.
Actions taken: The latest comprehensive revision of the
overall penalty structure in the Internal Revenue Code was
enacted as part of the Omnibus Reconciliation Act of 1989. The
IRS Restructuring and Reform Act of 1998 required the JCT and
the U.S. Department of the Treasury to conduct separate
studies, reviewing the interest and penalty provisions of the
Code and making recommendations for administrative and
legislative changes. On March 19, 2001, the Subcommittee
requested written comments on taxpayer rights, including
penalty and interest reform and taxpayer privacy. The
Subcommittee reviewed the studies and assessed the
recommendations, and incorporated selected portions of these
into section I of H.R. 3991, the Taxpayer Protection and IRS
Accountability Act of 2002. On April 9, 2002, the full
Committee held a markup on H.R. 3991, in which the bill with
amendment was favorably reported. The House failed to pass H.R.
3991 with changes on April 10, 2002. The provisions in H.R.
3991 later passed the House twice as part of H.R. 586, the Tax
Relief Guarantee bill, on April 18, 2002, and as part of H.R.
5728, the Tax Administration Reform Act of 2002, on November
14, 2002. Certain provisions were also included in House-passed
bills, H.R. 4757, Our Lady of Peace Act, on October 15, 2002,
and H.R. 4069, the Social Security Benefit Enhancements for
Women Act of 2002, on May 14, 2002.
7. Taxpayer Information Privacy.
Actions taken: The Internal Revenue Code prohibits
disclosure of tax returns and taxpayer information, except as
specifically authorized by the Code. These provisions have been
amended in a piecemeal fashion since a major revision in 1976.
The IRS Restructuring and Reform Act of 1998 mandated that the
U.S. Department of the Treasury and the JCT each conduct a
study on this issue. The JCT released its Study Of Present-Law
Taxpayer Confidentiality And Disclosure Provisions As Required
By Section 3802 Of The Internal Revenue Service Restructuring
And Reform Act Of 1998 on January 28, 2000, and the U.S.
Department of the Treasury released its report, Scope and Use
of Taxpayer Confidentiality and Disclosure Provisions on
October 2, 2000. The Subcommittee reviewed these studies, and
incorporated a subset of the recommendations in section IV of
H.R. 3991, the Taxpayer Protection and IRS Accountability Act
fo 2002.
8. Field Investigations and Hearings.
Actions taken: The Subcommittee conducted a field hearing
on March 5, 2001, in Mayville, New York, to examine on the
impact of Federal tax laws on the cost and supply ofenergy. The
hearing focused on (1) the adequacy of current tax incentives for
production and conservation, (2) the causes of current shortages and
high prices, and (3) the impact of shortages and high prices on
individual consumers and business.

Subcommittee on Trade

1. Bush Administration Trade Policy.
Actions taken: On March 7, 2001, the Committee held
hearings on President Bush's trade agenda for 2001. This
hearing addressed the content and strategy of trade
negotiations in which the United States is participating,
including negotiations to establish the FTAA and negotiations
on the WTO ``built-in agenda'' on services and agriculture. The
Committee also reviewed the status of preparations to launch a
new round of multilateral negotiations in the WTO and progress
in negotiations to establish trade agreements with Singapore,
Chile, and other nations in the Pacific Rim region. Finally,
the Committee analyzed the relationship of these negotiations
to trade negotiating authority and whether the United States
was disadvantaged by not having the authority in place.
Following House passage of H.R. 3005, legislation to grant
the President Trade Promotion Authority, the Committee held a
hearing on February 7, 2002, to address President Bush's trade
agenda for 2002 and the content and strategy of these trade
negotiations. At this hearing, the Committee also examined: (1)
the success of the WTO Ministerial Meeting which launched the
Doha Development Agenda, a new round of multilateral trade
negotiations, and (2) progress in negotiations with Chile and
Singapore, in light of House passage of H.R. 3005.
On March 29, 2001, the Trade Subcommittee held a hearing on
the increasing number of bilateral and regional trade
agreements to which the United States is not a party and the
implications for the United States. This hearing focused on how
these new trade agreements disadvantage U.S. business, workers,
and families and assessed opportunities for the United States
to move forward with new negotiations.
2. Andean Trade Preference Act.
Actions taken: On March 7, 2001, May 8, 2001, and February
7, 2002, the Committee held hearings on whether to extend and
expand trade benefits for Colombia, Peru, Ecuador, and Bolivia
under the Andean Trade Preference Act, which expired on
December 4, 2001. On October 3, 2001, Subcommittee Chairman
Crane introduced H.R. 3009 to extend and enhance trade benefits
available under the ATPA as a way to create viable alternatives
to illicit drug production, thereby enhancing political
security in the Andean region and the hemisphere. On October 5,
2001, the Committee on Ways and Means approved H.R. 3009, as
amended, by voice vote. The House approved H.R. 3009 on
November 16, 2001, by voice vote.
On December 14, 2001, the Senate Committee on Finance
reported H.R. 3009, as amended (S. Rept. 107-126). On May 23,
2002, the Senate passed H.R. 3009, as amended. On June 26,
2002, the House concurred with the Senate amendment with an
amendment pursuant to H. Res. 450, which contained the more
expansive Andean language already passed by the House. The
conference report was passed by the House on July 26, 2002, and
by the Senate on August 1, 2002. H.R. 3009 was signed into law
on August 6, 2002 (P.L. 107-210).
On January 31, 2001, the Committee received the Third
Report to Congress on the Operation of the Andean Trade
Preference Act, prepared by USTR pursuant to P.L. 102-182.
3. Extension of Trade Promotion Authority (formerly
referred to as ``Fast Track'').
Actions taken: The Committee held hearings on March 7 and
March 29, 2001, and February 7, 2002 (described above) to
address the need for fast-track or trade promotion authority.
On October 3, 2001, Chairman Thomas, on behalf of himself and
Representatives Crane, Dreier, Jefferson, Tanner, and Dooley,
introduced H.R. 3005, the Bipartisan Trade Promotion Authority
Act of 2001. The House passed H.R. 3005 on December 6, 2001.
On December 12, 2001, the Senate Committee on Finance
reported out its version of H.R. 3005, which included
amendments to the House-passed version of Trade Promotion
Authority (S. Rept. 107-139). On May 23, 2002, the Senate
agreed to an amendment to include its version of Trade
Promotion Authority and several other major trade provisions as
a substitute amendment to the House-passed H.R. 3009, the
Andean Trade Promotion and Drug Eradication Act, by a vote of
66 to 30. On June 26, 2002, the House concurred with the Senate
amendment with an amendment pursuant to H. Res. 450, which
contained the TPA legislation.
The conference report on H.R. 3009, which contained TPA,
passed the House on July 27, 2002, and the Senate on August 1,
2002. On August 6, 2002, the President signed the bill into law
(P.L. 107-210).
As enacted, the Bipartisan Trade Promotion Authority Act of
2002 grants TPA to the President through July 1, 2005, with an
extension through July 1, 2007, subject to disapproval. This
authority provides that once the President formally submits to
Congress legislation to implement a trade agreement, Congress
must consider the legislation within certain deadlines and
without amendment. In return, the Congress provides
theAdministration with detailed guidance on its objectives for such
negotiations and improves consultations between the Administration and
Congress, before, during, and after negotiations of a trade agreement.
4. Free Trade Area of the Americas.
Actions taken: On March 29, 2001, the Trade Subcommittee
held a hearing on the increasing number of bilateral and
regional trade agreements to which the United States is not a
party, particularly in its own hemisphere, and the implications
for the United States. This hearing focused on how these new
trade agreements disadvantage U.S. business, workers, and
families and assessed opportunities for the United States to
move forward with new negotiations.
Between April 20-22, 2001, a staff member from the
Committee accompanied a Congressional Delegation from the
Committee on Agriculture led by Representative Combest that
attended the FTAA Summit in Quebec, Canada.
On May 8, 2001, the Trade Subcommittee held a hearing on
the outcome of the Summit of the Americas held in Quebec City,
Canada, and the prospects and timing for achieving the FTAA.
Also, on May 8, 2001, the Committee received a report
requested by Trade Subcommittee Chairman Crane entitled ``Free
Trade Area of the Americas: April 2001 Meetings Set Stage for
Hard Bargaining to Begin.''.
On July 20, 2001, the Committee received a report,
requested by Trade Subcommittee Chairman Crane, entitled
``North American Free Trade Agreement: U.S. Experience with
Environment, Labor, and Investment Dispute Settlement Cases.''.
Following House passage of H.R. 3005, legislation to grant
the President Trade Promotion Authority on February 7, 2002,
the Committee held a hearing on President Bush's trade agenda
for 2002, and considered prospects for successfully concluding
the FTAA negotiations.
5. Jackson-Vanik Waiver and Extension of Normal Trade
Relations to the Socialist Republic of Vietnam.
Actions taken: On June 8, 2001, President Bush transmitted
the U.S.-Vietnam BTA to Congress for its approval.
Congressional approval of the BTA makes Vietnam eligible for
normal trade relations, subject to annual renewal under the
Jackson-Vanik provisions in Title IV of the Trade Act of 1974.
Approval procedures are covered by permanent fast track
provisions in the Trade Act of 1974, which are triggered by the
transmittal of the agreement to Congress by the President.
On June 12, 2001, identical bills were introduced in the
House and Senate (by request) to grant normal trade relations
status to Vietnam by approving the BTA. H.J. Res. 51 was
introduced in the House by Representatives Armey, Gephardt, and
Crane. On September 5, 2001, the Committee on Ways and Means
reported favorably H.J. Res. 51 without amendment by voice
vote. On September 6, 2001, the House approved H.J. Res. 51
without amendment by voice vote. On October 3, 2001, the Senate
approved H.J. Res. 51 without amendment by a vote of 88 to 12.
On October 16, 2001, the President signed H.J. Res. 51 (P.L.
107-052).
Under the Trade Act of 1974, in order for Vietnam to be
eligible for NTR status and access to U.S. Government credits,
or credit or investment guarantees, the President is required
to submit to Congress a recommendation to extend Vietnam's
waiver from the freedom of emigration requirements for a 12-
month period no later than 30 days prior to the previous
waiver's expiration. The President renewed Vietnam's waiver on
June 1, 2001 (H. Doc. 107-82). A resolution disapproving the
President's determination was reported unfavorably by the
Committee and was defeated by the House by a vote of 91 to 324
(with 1 present vote).
On June 3, 2002, the President renewed Vietnam's waiver
from the Jackson-Vanik freedom of emigration requirements in
Title IV of the Trade Act of 1974 (H. Doc. 107-221). A
resolution disapproving the President's determination was
reported unfavorably by the Committee and was defeated by the
House by a vote of 91 to 338.
6. Trade Agreement with Jordan.
Actions taken: President Clinton transmitted the United
States-Jordan Free Trade Agreement to the Congress for approval
on January 6, 2001 (H. Doc. 107-15). On April 4, 2001, His
Majesty King Abdullah II of Jordan met with the Committee on
Ways and Means to discuss implementation of the FTA. On July
24, 2001, H.R. 2603, the United States-Jordan Free Trade Area
Implementation Act of 2001, was introduced by Chairman Thomas.
The Committee on Ways and Means marked up H.R. 2603 and on July
31, 2001, favorably reported it with an amendment in the nature
of a substitute by voice vote. On July 31, 2001, the House
passed H.R. 2603 under suspension by voice vote. On September
24, 2001, the Senate Committee on Finance was discharged from
consideration of H.R. 2603 by unanimous consent, and the Senate
approved the bill by voice vote. On September 28, 2001, H.R.
2603 was signed by the President (P.L. 107-043).
7. Preparations for the 2001 World Trade Organization
Ministerial.
Actions taken: On September 4, 2002, the Committee received
a GAO report, requested by Chairman Thomas, Subcommittee
Chairman Crane, and Senator Grassley, on the preparations for
and the outcome of the Doha Ministerial Meeting, held in
November 2001, which succeeded in launching a new round of
multilateral trade negotiations. In this report, GAO analyzed
the factors that contributed to the meeting's successful
outcome and evaluated the most significant challenges to the
WTO in the overall negotiations.
Following passage of H.R. 3005, legislation to grant the
President Trade Promotion Authority on February 7, 2002, the
Committee held a hearing on President Bush's trade agenda for
2002. At this hearing, the Committee examined the success of
the WTO Ministerial Meeting which launched the Doha Development
Agenda, a new round of multilateral trade negotiations.
On June 8, 2001, the Trade Subcommittee received a report,
requested by Trade Subcommittee Chairman Phil Crane entitled
``International Trade: Comparison of U.S. and European Union
Preference Programs.''
On November 4, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the United States
is engaged in negotiations to strengthen and extend as well as
establish new trade agreements under the auspices of the WTO.
As part of Trade Act of 2002, Congress approved the
establishment of a small fund to pay small settlement in WTO
cases.
8. Negotiation of Other Free Trade Agreements.
Actions taken: On March 7, 2001, the Committee held a
hearing on President Bush's trade agenda for 2001. This hearing
addressed the content and strategy of trade negotiations in
which the United States is participating, including
negotiations to establish trade agreements with Singapore,
Chile, and other nations in the Pacific Rim region. Finally,
the Committee analyzed the relationship of these negotiations
to trade negotiating authority and whether the United States
was disadvantaged by not having the authority in place.
Following House passage of H.R. 3005, legislation to grant
the President Trade Promotion Authority on February 7, 2002,
the Committee held a hearing on President Bush's trade agenda
for 2002, which addressed the content and strategy of
negotiations with Chile and Singapore, in light of House
passage of H.R. 3005.
On March 29, 2001, the Trade Subcommittee held a hearing on
the increasing number of bilateral and regional trade
agreements to which the United States is not a party and the
implications for the United States. This hearing focused on how
these new trade agreements disadvantage U.S. business, workers,
and families and assessed opportunities for the United States
to move forward with new negotiations, such as with countries
in the Pacific Rim.
On August 22, 2002, the Committee received a letter from
Ambassador Zoellick indicating his intention to conclude a free
trade agreement negotiations with Chile.
On August 22, 2002, the Committee received a letter from
Ambassador Zoellick indicating his intention to conclude a free
trade agreement negotiations with Singapore.
On October 1, 2002, Ambassador Zoellick notified the
Committee his intention to initiate free trade agreement
negotiations with the five member countries of the Central
American Economic Integration System (Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua).
On November 4, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the President
intends to initiate negotiations for a free trade agreement
with the five member countries of the Southern African Customs
Union (Botswana, Lesotho, Namibia, South Africa, and
Swaziland).
On November 13, 2002, the Committee received a letter from
Ambassador Zoellick notifying Congress that the President
intends to initiate negotiations for a free trade agreement
with Australia and soliciting the view of the Committee on
including New Zealand as part of that agreement.
On January 17, 2002, the Senate Committee on Finance
formally requested the ITC to conduct an assessment of the
economic effects of the establishment of a free trade agreement
between the United States and Taiwan. On June 10, 2002, several
Members of the Committee on Ways and Means (Representatives
Dunn, Rangel, Crane, Levin, Shaw, McDermott, Ramstad, McNulty,
Herger, Houghton, English, Hayworth, Foley, and Brady) wrote a
letter to ITC Chairman Steve Koplan expressing their support
for the economic impact study. The ITC issued its report in
October 2002.
9. Trade Relations with Europe.
Actions taken: On June 8, 2001, the Trade Subcommittee
received a report requested by Trade Subcommittee Chairman Phil
Crane entitled ``International Trade: Comparison of U.S. and
European Union Preference Programs.''
On January 14, 2002, the WTO Appellate Panel issued its
report finding the United States' ETI rules to be a prohibited
export subsidy. On August 30, 2002, a WTO Arbitration Panel
authorized the EU to apply trade sanctions in the amount of $4
billion against U.S. exports to the EU. On February 27, 2002,
the Committee held a hearing on the WTO decision inorder to (1)
outline the history of the FSC-ETI dispute, (2) analyze the January 14,
2002, WTO Appellate Panel Decision, and (3) discuss the potential trade
ramifications of the decision. Officials from the U.S. Department of
the Treasury and the USTR, as well as representatives from the business
community, testified at the hearing.
On July 11, 2002, Chairman Thomas introduced H.R. 5095, the
American Competitiveness and Corporate Accountability Act of
2002, in order to put the United States in compliance with its
WTO obligations and to address competitiveness and corporate
accountability issues. A fuller discussion of this legislation
and other hearings of the Committee is located in the tax
section of this report.
10. Trade and Development Act of 2000.
Actions taken: H.R. 3009, the Andean Trade Promotion and
Drug Eradication Act, which was signed into law by the
President on August 6, 2002, contains several provisions to
expand the Trade and Development Act of 2002. Specifically, the
legislation clarifies that preferential treatment is provided
to knit-to-shape apparel articles assembled in beneficiary
countries in CBI and Africa and provides preferential treatment
for apparel articles that are cut both in the United States and
beneficiary CBI or African countries. In addition, the
legislation increases the caps for knit apparel made in CBI
countries from regional fabric made with U.S. yarn, T-shirts,
and knit-to-shape apparel (except socks).
With respect to Africa, the legislation corrects the yarn
diameter in the AGOA legislation so that sweaters knit to shape
from merino wool of a specific diameter are eligible and allows
Namibia and Botswana to use third country fabric for the
transition period under the AGOA regional fabric country cap.
The bill also clarifies that apparel wholly assembled in one or
more beneficiary sub-Saharan African countries from components
knit-to-shape in one or more such countries from U.S. or
regional yarn is eligible for preferential treatment, clarifies
that apparel knit-to-shape and wholly assembled in one or more
lesser developed beneficiary sub-Saharan African countries is
eligible for preferential treatment regardless of the origin of
the yarn used to make such articles, and increases the amount
of articles eligible for benefits.
The conference report was based on the House version of
H.R. 3009, which was approved by the Committee on October 5,
2001, by voice vote. The House approved H.R. 3009, on November
16, 2001, by voice vote. On December 14, 2001, the Senate
Committee on Finance reported H.R. 3009, as amended (S. Rept.
107-126). The amendments adopted by the Senate Committee on
Finance did not include any provisions relating to trade with
Caribbean Basin or African countries. On May 23, 2002, the
Senate passed H.R. 3009, as amended. On June 26, 2002, the
House concurred with the Senate amendment with an amendment
pursuant to H. Res. 450, which included the House provisions
related to trade with Caribbean Basin and African countries
described above. In addition, H. Res. 450 incorporated one
provision relating to trade with Caribbean Basin countries that
was not included in H.R. 3009 when it passed the House. The new
provision is a requirement that apparel made of U.S. knit or
woven fabric assembled in a CBTPA country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States. On July 26, 2002, the House
agreed to the conference report, and on August 1, 2002, the
Senate agreed to the conference report. The bill was signed
into law on August 6, 2002 (P.L. 107-210).
On October 1, 2002, Ambassador Zoellick notified the
Committee of his intention to initiate free trade agreement
negotiations with the five member countries of the Central
American Economic Integration System (Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua).
11. U.S. Trade Remedy Laws.
Actions taken: The Subcommittee continued to review the
application of U.S. antidumping and countervailing duty laws as
well as the effect of antidumping orders on downstream users of
products subject to these orders. The Subcommittee continued to
monitor the status of WTO consultations, panel proceedings, and
decisions concerning U.S. trade remedy laws or their
application, and worked with the Administration to determine if
any changes in U.S. law or policy are appropriate. The
Subcommittee held several consultations with USTR and the U.S.
Department of Commerce on the states of implementation of panel
decisions as well as ongoing negotiations in the WTO and the
Organization for Economic Cooperation and Development. In June
2001, the CBO issued a report requested by the Subcommittee
titled ``Antidumping Action in the United States and Around the
World: An Update.'' The report updates a June 1998 analysis
examining international data on antidumping activity to
determine trends, compare U.S. activity with that of other
countries, and study claims made by various participants in the
debate over U.S. policy.
On November 7, 2001, the House passed H. Con. Res. 262 by a
vote of 410 to 4, expressing the sense of Congress on trade
remedies negotiations in the WTO. The resolution urged the
President during the WTO Ministerial in Doha, Qatar and any
subsequent rounds of WTO negotiations to (1) avoid an agreement
which lessens the effectiveness of domestic and international
disciplines on unfair trade, especially dumping and subsidies,
and (2) ensure that U.S. exports are not subject to the abusive
use of trade laws, including antidumping and countervailing
duty laws, by other countries.
12. Authorizations for U.S. Customs, the Office of the
USTR, and the ITC.
Actions taken: Subcommittee Chairman Crane held a hearing
on July 17, 2001, on budget authorizations for the U.S. Customs
Service, the Office of the USTR, and the ITC. TheSubcommittee
received information on the activities of these agencies and projected
work loads and examined their budget submissions, inspector general
reports, strategic plans, and performance plans. On October 16, 2001,
Subcommittee Chairman Crane introduced H.R. 3129, authorizing
appropriations for fiscal years 2002 and 2003, and it was enacted as
part of the Trade Act of 2002 (P.L. 107-210) as signed into law by the
President on August 6, 2002. The Act reflected the need for more
resources by USTR in conducting international trade negotiations and
the need for more and special resources for Customs to carry out its
enhanced anti-terrorism missions in addition to facilitating trade and
interdicting illegal drug smuggling. The Committee also considered
border security issues in the context of the Maritime Transportation
Anti-terrorism Act of 2002 and the Enhanced Border Security and Visa
Entry Reform Act of 2002, which were both enacted in the 107th
Congress.
In addition, on June 26, 2002, the Committee held a hearing
on the President's proposal to create a U.S. Department of
Homeland Security including the transfer of all assets and
authority of the U.S. Customs Service to the new Department.
The Committee collected extensive information on the structure
and functions of Customs and favorably reported a legislative
proposal to transfer Customs in its entirety to the new
Department while maintaining legal authority with the Secretary
of the Treasury and mandating the continuation of customs
revenue functions and specific offices. That proposal was
adopted by the House on November 13, 2002, as part of H.R. 5005
(H. Rept. 107-609). On November 13, 2002, the House Select
Committee on Homeland Security reported H.R. 5710 as a
substitute to H.R. 5005, with minor changes in the Customs
section, and the House passed the bill on November 13, 2002.
Following Senate passage on November 19, the President signed
the bill into law on November 25, 2002.
13. Trade Relations with China.
Actions taken: The Committee examined the President's
annual determination to continue China's NTR status for the
period between July 1, 2001, and June 30, 2002 (H. Doc. 107-
79). A resolution disapproving the President's determination,
H.J. Res. 50, was introduced on June 5, 2001. On July 10, 2001,
the Trade Subcommittee held a hearing on overall U.S. trade
relations with the People's Republic of China and the status of
China's negotiations to join the WTO, and to consider the
extension of NTR status for China for an additional year. On
July 12, 2001, the Committee reported H.J. Res. 50 adversely,
without amendment. On July 19, 2001, the House defeated H.J.
Res. 50 by a vote of 169 to 259. The effect of this resolution
would have been to withdraw NTR benefits from Chinese products.
On November 13, 2001, the House received a message from the
President certifying the terms and conditions for accession of
China to the WTO are at least equivalent to those agreed to in
the November 15, 1999, bilateral agreement between the United
States and China. On December 27, 2001, the President granted
permanent nondiscriminatory treatment (normal trade relations
treatment) pursuant to P.L. 106-286. The Committee on Ways and
Means continues to monitor the progress China is making in
implementing the obligations it assumed when it joined the WTO
on December 11, 2001.
During the 107th Congress, the Committee on Ways and Means
received two studies on China from the GAO. On October 3, 2002,
the Committee received a report requested by Chairman Thomas
and Representative Rangel entitled ``World Trade Organization:
Analysis of China's Commitments to Other Members.'' On
September 23, 2002, the Committee received a report, also
requested by these Members, entitled ``World Trade
Organization: Selected U.S. Company Views about China's
Membership.''
A bipartisan delegation of the Committee on Ways and Means
staff and the Senate Committee on Finance staff participated in
an oversight trip to China with Undersecretary of Commerce
Grant Aldonas from April 1-7, 2002. The delegation visited
Beijing and Shanghai to investigate compliance issues and to
highlight the importance that Congress and the Administration
place on China's full implementation of its trade obligations
resulting from China's accession to the WTO on December 11,
2001.
14. Miscellaneous Reforms of U.S. Customs Laws and
Practices.
Actions taken: The Trade Act of 2002 included several
reforms to Customs laws and practices. Customs was directed to
implement a year-long regulatory process for the ultimate goal
of requiring advanced electronic information on cargo. Also,
the methodology for collection of Customs user fees for
enhanced inspectional services for express air couriers was
changed from a direct reimbursement method to a per mail item
method. Customs legal authority to collect duties was modified
to accommodate automation improvements in the near future. The
Trade Act also authorized the search of outbound mail and
provided immunity to inspectors performing personal searches at
the border subject to civil rights protections.
On March 8, 2002, Subcommittee Chairman Crane requested
written comments from parties interested in miscellaneous trade
proposals, technical corrections to the trade laws, and
temporary suspensions on certain imports. On September 17,
2002, Subcommittee Chairman Crane introduced H.R. 5385, the
``Miscellaneous Trade and Technical Corrections Act of 2002.''
The bill passed the House on October 7, 2002, and included
provisions to suspend duties on various products, expand trade
benefits to GSP recipients targeted at Pakistan, extend trade
benefits to Turkey, and amend Customs ship repair record-
keeping requirements. The Senate took no action on the bill.
15. Sanctions Reform.
Actions taken: In response to the dramatic growth in the
imposition of unilateral economic sanctions and their impact on
U.S. trade and competitiveness in international markets,
theSubcommittee continued its oversight on the use and effectiveness of
U.S. unilateral trade sanctions. In particular, the Subcommittee
analyzed existing and proposed unilateral trade sanctions against
terrorist states in the wake of the terrorist attacks on September 11,
2001. In this context, the Subcommittee focused on the importance of
examining whether unilateral economic sanctions are effective in
achieving U.S. policy goals.
16. U.S. Policy Toward Cuba.
Actions taken: In February 2001, the ITC issued a study
requested by the Committee pursuant to section 332 of the
Tariff Act of 1930 on the economic impact of U.S. sanctions
with respect to Cuba. The Subcommittee considered and reviewed
the findings of the ITC report, which included an overview of
U.S. sanctions with respect to Cuba, a description of the Cuban
economy and trade regime, and an analysis of the historical
impact of U.S. sanctions on both the U.S. and Cuban economies.
17. Trade Relations with Japan.
Actions taken: On March 7, 2001, the Committee held
hearings on President Bush's trade agenda for 2001, which
included consideration of U.S.-Japan trade issues. This hearing
addressed the content and strategy of trade negotiations on the
WTO ``built-in agenda'' relating to services and agriculture.
The Committee also reviewed the status of preparations to
launch a new round of multilateral negotiations in the WTO. The
Committee analyzed the relationship of these negotiations to
trade negotiating authority and whether the United States was
disadvantaged in achieving its trade objectives with countries
such as Japan by not having the authority in place. Following
passage of H.R. 3005, legislation to grant the President Trade
Promotion Authority, the Committee held a hearing on February
7, 2002, to address President Bush's trade agenda for 2002. At
the hearing, the Committee examined the success of the WTO
Ministerial Meeting which launched the Doha Development Agenda,
a new round of multilateral trade negotiations which will
address important issues on the U.S.-Japan trade agenda such as
agriculture and market access for industrial products and
forest products. Committee staff also held several
consultations sessions with USTR officials responsible for
implementing the Regulatory Reform and Competition Policy
Initiative, which was launched by the two governments on June
30, 2001.
18. Permanent Normal Trade Relations with Jackson-Vanik
Countries that Join the WTO.
Actions taken: At present, several countries whose trade
status is subject to the Jackson-Vanik provisions in Title IV
of the Trade Act of 1974 are in the process of joining the WTO.
The Subcommittee continued to monitor the progress of these
countries in negotiating their accession to the WTO. Moldova
joined the WTO on July 26, 2001. Armenia is expected to join
the WTO in the near future. No legislative action has been
taken with regard to Jackson-Vanik provisions for either
country. Russia is currently negotiating its accession to the
WTO. On December 20, 2001, Chairman Thomas, along with
Representatives Crane and Dreier, introduced H.R. 3553 to
provide for the extension of permanent NTR treatment to the
products of the Russian Federation. The Subcommittee on Trade
held a hearing on April 11, 2002, to explore whether to
graduate Russia from the Jackson-Vanik provisions and extend
PNTR, and to assess U.S.-Russian trade relations.
19. Trade Adjustment Assistance.
Actions taken: The Subcommittee evaluated several reports
from the GAO on the TAA programs; several of the
recommendations from GAO were eventually adopted with enactment
of the Trade Act of 2002. The Trade Act made significant
changes to the existing TAA programs such as consolidating the
TAA and NAFTA-TAA programs, extending TAA to downstream
secondary workers, raising the training expenditure cap to $220
million, increasing personal allowances, creating an
alternative TAA program for older workers, creating a new TAA
program for farmers, and providing a healthcare tax credit to
TAA workers and participants in the Pension Benefit Guaranty
Corporation.
20. Generalized System of Preferences.
Actions taken: On October 3, 2001, Trade Subcommittee
Chairman Crane introduced H.R. 3010, a bill to amend the Trade
Act of 1974 to extend the GSP until December 31, 2002. On
October 5, 2001, the Committee ordered H.R. 3010 favorably
reported. On June 26, 2002, the House concurred with the Senate
amendment with an amendment to H.R. 3009 pursuant to H. Res.
450, which incorporated H.R. 3010 into H.R. 3009, the Trade Act
of 2002. The conference report was passed by the House on July
26, 2002, and by the Senate on August 1, 2002. The conference
report extends GSP benefits through December 31, 2006. The bill
was signed into law on August 6, 2002 (P.L. 107-210).
21. Asia Pacific Economic Cooperation Forum.
Actions taken: Committee staff continued consultations with
USTR to monitor developments in APEC, including results of the
APEC Ministerial meeting held in Puerto Vallarta, Mexico, on
May 30, 2002.
22. User Fees.
Actions taken: The Subcommittee has continued to oversee
the collection of user fees by Customs to evaluate whether fee
levels are appropriately set. The lack of quality cost data
from Customs has made it difficult for the Subcommittee to
properly oversee fees. Accordingly, the Trade Act of 2002
include a provision mandating that Customs implement a cost
accounting system and directing the GAO to evaluate fees to
determine whether importers are receiving an appropriate level
of service in return.
23. Rules of Origin and Country of Origin Marking.
Actions taken: The Subcommittee has continued to review and
consult with the Administration and the trade community on the
status of the rules of origin negotiations underway in the
World Customs Organization (WCO). In addition, the Subcommittee
continues to review whether U.S. law and Customs enforcement
efforts are effective in preventing unlawful transhipment. The
Subcommittee is also reviewing labeling requirements of U.S.
trading partners with respect to meat, fresh produce, forged
hand tools, forged tool and dies, and genetically modified
products.
24. Normal Trade Relations with the Lao People's Democratic
Republic.
Actions taken: The Subcommittee continued its oversight of
bilateral relations between the United States and Laos and
heard from several parties interested in Lao NTR. Laos does not
currently receive NTR status because it is included in the HTS
of the United States in General Note 3(b) on the list of
countries whose products are subject to column 2 (non-NTR)
tariff rates. The only action required to grant permanent NTR
status to Laos is for Congress to enact legislation amending
the HTS to strike Laos permanently from General Note 3(b). In
1997, the United States and the Lao People's Democratic
Republic concluded a bilateral commercial agreement which calls
for a reciprocal extension of normal trade relations. That
agreement has not yet entered into force. At a hearing on May
8, 2001, the Committee heard testimony from USTR Zoellick
stating that the United States should grant NTR for Laos.
25. Drug Interdiction.
Actions taken: The Subcommittee continued to monitor the
actions of the U.S. Customs Service in enforcing the laws
against illegal drug smuggling. The Subcommittee reviewed this
topic as part of its oversight hearing on Customs on July 17,
2001. The Trade Act of 2002, signed into law on August 6, 2002,
included an authorization for the air and marine interdiction
functions of Customs in addition to equipment used for
inspectional purposes. The Trade Act also enhances Customs'
ability to interdict illegal drug smuggling by providing it
with new legal authority to collect cargo information and
perform border searches.
Subcommittee on Health--Comparison of oversight plan
developed in January 2001 to actual activities of the
Subcommittee during the 107th Congress.
1. Management of the Centers for Medicare and Medicaid
Services.
Actions taken: The full Committee held hearings on the Bush
Administration's health and welfare priorities on March 14,
2001, and on the President's fiscal year 2003 budget on
February 6, 2002. The Subcommittee held a hearing on the
Medicare Regulatory and Contracting Reform Act on September 25,
2001. Testimony taken at these hearings helped form the basis
of legislation considered by the Committee which was included
in H.R. 2768/H.R. 3391, the ``Medicare Regulatory and
Contracting Reform Act.'' Almost all regulatory and contracting
reform provisions from H.R. 3391 were incorporated into H.R.
4954, the ``Medicare Modernization and Prescription Drug Act.''
The Committee has continued its oversight and review of the
HHS regulations and practices to ensure that HHS is not
creating an unnecessary burden to health care beneficiaries and
providers. On May 14, 2001, the Subcommittee Chair and Ranking
Member wrote to the Secretary with a list of administrative
changes to reduce regulatory burden and make Medicare more
responsive to beneficiaries and the providers that serve them.
The HHS responded by implementing many of these
recommendations.
The Committee has also exercised its oversight on the
Secretary's implementation of the Benefit Improvement and
Protection Act provisions. On February 12, 2002, the Committee
and Subcommittee Chairmen along with the Ranking Members wrote
to the Secretary asking that the Department expeditiously move
to implement the coverage and appeals reforms required by the
Benefit Improvement and Protection Act. On September 27, 2002,
the Committee and Subcommittee Chairmen along with the Ranking
Members wrote to the Secretary about how the proposed
regulation on Medicare National Coverage Determinations
contravenes Congressional intent.
The Subcommittee requested and received a report related to
CMS from the GAO on the performance of the claims review
process.
2. Medicare Payment Advisory Commission (MedPAC) Report and
Recommendations.
Actions taken: The Subcommittee heard MedPAC's testimony on
its recommendations at the following hearings: rural health
care in Medicare on June 12, 2001; physician payment reform
February 28, 2002; and wage index issues on July 23, 2002.
Testimony taken at these hearings helped form the basis of
legislation considered by the Committee which was included in
H.R. 4954, the ``Medicare Modernization and Prescription Drug
Act.''
On January 14, 2002, the Subcommittee Chairman wrote to the
Chairman of MedPAC asking for recommendations on how to
restructure the physician payment system to ensure greater
predictability and stability in the physician payment updates.
Additionally, a number of informal requests were made and
information was provided on teaching hospitals, Medicare
margins of various providers, technology integration, and
geographic payment issues.
3. Medicare+Choice Program.
Actions taken: On Medicare+Choice lessons for reform on May
1, 2001, and on the status of the Medicare+Choice program on
December 4, 2001, the Subcommittee held hearings on the
Medicare+Choice program. Testimony taken at these hearings
helped form the basis of legislation considered by the
Committee that was included in H.R. 4954, the ``Medicare
Modernization and Prescription Drug Act.'' The Medicare+Choice
provisions were included in H.R. 3391, the ``Medicare
Regulatory and Contracting Reform Act.'' The Medicare+Choice
provisions from H.R. 3391 were incorporated into H.R. 3448, the
``Public Health Security and Bioterrorism Preparedness and
Response Act of 2002'' (P.L. 107-188), but were applied for 3
years.
On May 24, 2001, the Subcommittee Chairman wrote to the CMS
to ask them to move the due date for plan submission of the
adjusted community rate. The Subcommittee requested and
received a report from GAO on selected program requirements and
other entities standards for health maintenance organizations
(HMOs).
4. Progress in the Development of Prospective Payment
Systems.
Actions taken: The Subcommittee held a hearing on physician
payments on February 28, 2002, and on Medicare's geographic
cost adjustors on July 23, 2002. Testimony taken at these
hearings helped form the basis of legislation considered by the
Committee which was included in H.R. 4954, the ``Medicare
Modernization and Prescription Drug Act.''
The Subcommittee continued its oversight and review of
Medicare payment regulations. On February 8, 2002, the
Committee and Subcommittee Chairmen wrote to the Secretary, and
Director of the Office of Management and Budget asking whether
and how Congress should address the provider payment problems
identified by MedPAC. Moreover, the letter asked whether any of
the money set aside in the budget for prescription drugs should
be used for providers.
The Subcommittee wrote to the Administration a number of
times on implementation issues surrounding the new hospital
outpatient prospective payment system. On July 27, 2001, the
Committee and Subcommittee Chairmen along with the Subcommittee
Ranking Member wrote to the Administration proposing changes to
the payment for drugs, biologicals, and devices under the
Medicare outpatient payment system. The CMS responded by
adopting many of the recommendations in the letter, including
folding 75 percent of technology costs into the base. On
December 12, 2001, the Committee and Subcommittee Chairmen and
Ranking Members along with the Committee on Commerce and
Subcommittee Chairmen and Ranking Members and the Senate
Committee on Finance Chairman and Ranking Member wrote to the
Secretary asking to delay implementation of the 2002 outpatient
hospital rates because of technical problems in the rates. The
CMS responded and deferred the system for one quarter. On May
10, 2002, the Committee and Subcommittee Chairmen along with
the Committee on Commerce and Subcommittee Chairmen requested
further corrections to the hospital outpatient rates for 2002.
On October 21, 2002, the Committee and Subcommittee Chairmen
along with the Committee on Commerce and Subcommittee Chairmen
and the Senate Committee on Finance Ranking Member wrote to the
Administrator asking for improvements in 2003 rates
specifically to improve the accuracy of the rates and to
ameliorate any redistributions in payments from 2002 to 2003.
On other payment issues, the Subcommittee Chairman wrote to
the Administrator on the following issues: changes to the
proposed fee schedule for ambulance services on April 8, 2002,
and on the proposed design of the implementation of the Benefit
Improvement and Protection Act provisions on inpatient
technology on August 14, 2001. Finally, the Committee and
Subcommittee Chairmen wrote to the Administrator of CMS on
actions that the agency could take to fix the sustainable
growth rate for physician payment on March 21, 2002.
5. Health Care Quality.
Actions taken: The Subcommittee held a hearing on health
quality and medical errors on March 7, 2002, and on legislation
to reduce medical errors on September 10, 2002. Testimony taken
at these hearings helped form the basis of legislation
considered by the Committee that was included in H.R. 4889, the
``Patient Safety and Improvement Act of 2002.''
The Subcommittee requested and received a report from GAO
on the current supply of nurses.
6. Administrative Simplification under the Health Insurance
Portability and Accountability Act (HIPAA) of 1996.
Actions taken: Testimony from previous hearings helped form
the basis of legislation that was included in H.R. 3323, the
``Administrative Simplification Compliance Act'' (P.L. 107-
105).
The Subcommittee continued its oversight of the regulations
related to HIPAA. On May 9, 2001, the Committee and
Subcommittee Chairmen sent a letter to the President on the
final rule on patient confidentiality. The Committee expressed
its concern with the patient consent requirements, the
standards for minimum necessary use and disclosure of
information, coverage of oral communications, and advisory
opinions for conflicting State standards. On December 10, 2001,
the Committee Chairman wrote to the Secretary about the
confidentiality of individually identifiable health information
in regards to supplementalinsurance policies. On February 26,
2002, the Committee and Subcommittee Chairmen wrote to the OMB and the
Secretary on the proposed changes to the medical records
confidentiality rule. On April 19, 2002, the Committee Chairman wrote
to the Secretary about HIPAA's portability requirements. On April 26,
2002, the Committee Chairman and Subcommittee Chairmen commended the
Secretary for accepting its suggestions on a number of HIPAA changes
such as elimination of the mandatory consent requirements. The
Committee expressed additional concerns regarding the confidentiality
of medical records on patient consent, minimum necessary, the
definition of identifiable data for medical research, and the business
associate contract requirements.
The Subcommittee requested and received a report from GAO
on the issues around the HIPAA standardization of the coding
sets used for payment and diagnosis of illness.
7. Medicare Waste, Fraud and Abuse.
Actions taken: Testimony from previous hearings helped form
the basis of legislation considered by the Committee that was
included in H.R. 4954, the ``Medicare Modernization and
Prescription Drug Act.'' The provision on a demonstration for
recovery auditors permits the Secretary to hire these entities,
identify under and overpayments, and provide incentives to
collect overpayments.
On October 3, 2002, the Subcommittee held a hearing on
Medicare payment for currently covered drugs. Medicare does not
cover most outpatient prescription drugs. However, it does
cover certain categories of outpatient prescription drugs,
including drugs used in dialysis, organ transplantation, cancer
treatment, and certain drugs used with durable medical
equipment, such as infusion pumps and nebulizers. According to
GAO, about 450 outpatient drugs are covered under these
categories.
The Balanced Budget Act of 1997 (P.L. 105-33) specified
that Medicare payment for covered outpatient prescription drugs
would equal 95 percent of the average wholesale price (AWP) for
the drug. The AWPs, however, are not defined by law or
regulation. The AWPs are reported by drug manufacturers to
organizations that publish the data in compendia. Medicare
carriers use the published data in calculating payment for
Medicare covered drugs, but AWPs are not grounded in any real
market transaction, and do not reflect the actual price paid by
purchasers. The AWP for a product is often far greater than the
acquisition cost paid by suppliers and physicians, resulting in
taxpayer and beneficiary overpayments estimated at more than $1
billion annually. In addition, AWPs do not reflect the
discounts, rebates, or ``charge backs'' that manufacturers and
wholesalers customarily offer to providers. Therefore, AWPs
represent neither average prices nor prices charged by
wholesalers.
The hearing examined the current Medicare overpayments.
Potential solutions discussed included H.R. 5167, the
``Medicare Market Acquisition Drug Price Act,'' introduced by
Subcommittee Ranking Member Pete Stark, and proposed changes to
the statute to introduce competitive bidding for Part B covered
drugs.
As part of its oversight responsibilities, the Committee
Chairman and Ranking Members wrote to GAO asking to be kept
apprised of the recent inquiry into personnel and other changes
affecting the Office of the Inspector General.
8. Medically Uninsured.
Actions taken: The full Committee held a hearing on health
care tax credits to decrease the number of uninsured on
February 13, 2002, and the Subcommittee held a hearing on the
Nation's uninsured on April 4, 2001. Testimony taken at these
hearings helped form the basis of legislation considered by the
Committee that was included in H.R. 3009 (P.L. 107-210), the
``Trade Act of 2002.''
On October 21, 2002, the Committee Chairman wrote to the
Secretary of Labor to clarify Congressional intent related to
the health tax credit for workers adversely affected by Trade.
9. Benefits.
Actions taken: The full Committee held hearings on the
Social Security and Medicare Trustees 2001 Annual Reports
(joint hearing with the Senate Committee on Finance) on March
20, 2001, on Medicare solvency on March 20, 2001, on the
Administration's Principles to strengthen and modernize
Medicare on July 19, 2001, and on integrating prescription
drugs into Medicare on April 17, 2002. The Subcommittee held
hearings on Medicare reform on February 28, 2001, on laying the
groundwork for a Rx drug benefit on March 27, 2001, on
strengthening Medicare: modernizing beneficiary cost sharing on
May 9, 2001, on Medicare supplemental insurance on March 14,
2002, and on Medicare payments for currently covered
prescription drugs on October 3, 2002. Testimony taken at these
hearings helped form the basis of legislation considered by the
Committee that was included in H.R. 4954, the ``Medicare
Modernization and Prescription Drug Act.''
10. Managed Care Reform.
Actions taken: The Subcommittee held a hearing on patient
protections and managed care reform on April 24, 2001.
Testimony taken at that hearing helped form the basis of H.R.
2563, the ``Patient Protection Act,'' which passed the House on
August 2, 2001.
Subcommittee on Human Resources--Comparison of oversight
plan developed in February 2001 to actual activities of the
Subcommittee during the 107th Congress:
1. Temporary Assistance for Needy Families/Welfare Reform.
Actions taken: To prepare for reauthorization of the 1996
welfare reform law which implemented the TANF program, the
Subcommittee held a series of hearings. At a March 15, 2001,
Subcommittee hearing to review research on the effects of the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, witnesses from the GAO, the Congressional Research
Service, and research organizations testified. An April 3,
2001, hearing focused on efforts to require work in exchange
for benefits, and the effects of current programs promoting
work. The hearing included testimony from program
administrators, the Congressional Research Service, scholars,
and program participants. On April 26, 2001, a hearing with
witnesses from the GAO, program administrators, and scholars
was held to examine ``rainy day'' and other special funding
issues under the TANF program. A May 22, 2001, hearing on
welfare and marriage issues reviewed how States have used TANF
funds to promote marriage and family formation and additional
approaches or programmatic changes that may hold promise for
better promoting healthy marriages and discouraging
illegitimacy. Witnesses included State legislators, State
program administrators, non-profit organizations, and research
experts.
During a July 11, 2001, hearing on Subcommittee-related
proposals in the Administration's fiscal year 2002 budget,
testimony was received from a representative of HHS. Teen
pregnancy prevention efforts since enactment of the 1996
welfare reform law and recommendations for further program
improvements to prevent and reduce teen pregnancy were the
focus of a November 15, 2001, Subcommittee hearing. The HHS,
teen pregnancy prevention and abstinence education
organizations, and researchers testified.
On March 7, 2002, the Subcommittee heard testimony from the
GAO, State and local program administrators, program
participants, and policy experts on issues related to the
implementation of welfare work requirements and time limits. At
a field hearing in University Center, Michigan, on April 2,
2002, to review welfare reform outcomes in Michigan, witnesses
included the Governor of Michigan, former recipients,
employers, and caseworkers who have been instrumental in the
success of the State's program in terms of reducing poverty,
ending dependence, and promoting work.
An April 11, 2002, hearing on welfare reform
reauthorization proposals provided an opportunity for public
witnesses to present their views to the Subcommittee. The
Subcommittee received testimony from 44 individuals, including
Members of Congress, the Secretary of HHS, representatives of
the nation's governors, State legislators, and State welfare
directors, local program operators, policy specialists,
advocacy organizations, former welfare recipients, and non-
profit organizations.
Legislation to reauthorize TANF was introduced by
Subcommittee Chairman Herger on April 9, 2002, as the Personal
Responsibility, Work, and Family Promotion Act of 2002 (H.R.
4090). At a Subcommittee on Human Resources markup on April 18,
2002, H.R. 4090 was reported to the full Committee, from which
it was reported to the House on May 14, 2002. On May 16, 2002,
the House approved H.R. 4737, the Personal Responsibility,
Work, and Family Promotion Act of 2002. H.R. 4737 included the
text of H.R. 4090 as reported by the Committee on Ways and
Means. The legislation was considered by the Senate Committee
on Finance on July 25, 2002 and reported to the full Senate. No
further action was taken on H.R. 4737 during the remainder of
the 107th Congress.
H.J. Res. 111 (P.L. 107-229), legislation making continuing
appropriations for the fiscal year 2003, extended authorization
for TANF and related welfare programs through December 31,
2002. H.J. Res. 124 (P.L. 107-294), making further continuing
appropriations, maintained TANF and related programs in current
form through March 31, 2003.
2. Child Care.
Actions taken: The Subcommittee received testimony on
issues concerning the availability and supply of child care for
families on or leaving TANF, and State spending on child care
programs. The testimony included witnesses from Congressional
and other research organizations at the March 15, 2001, hearing
on the effects of the 1996 welfare reform law. Testimony was
also received on this topic at the April 26, 2001, hearing on
``Rainy Day'' and other special TANF funding issues, and the
March 7, 2002, hearing on implementation of welfare reform work
requirements and time limits. A number of witnesses at the
April 11, 2002, hearing on welfare reform reauthorization
proposals provided the Subcommittee recommendations on child
care funding and related issues.
Title II of H.R. 4737, the Personal Responsibility, Work,
and Family Promotion Act of 2002, which passed in the House on
May 16, 2002, increased mandatory child care funding by $1
billion over 5 years. Other provisions in H.R. 4090 as approved
by the Committee on Ways and Means and H.R. 4737 as approved by
the House provided States added flexibility in using welfare
funds for child care needs.
3. Child Support Enforcement.
Actions taken: On June 28, 2001, the Subcommittee held a
hearing on the child support program and fatherhood proposals.
Witnesses, including Members of Congress, State program
administrators, policy experts, advocates, and program
participants, reviewed the program as well as proposals for
improving child support collection and distribution and options
for fatherhood programs.
Title IV of H.R. 4737, the Personal Responsibility, Work,
and Family Promotion Act of 2002, which passed in the House on
May 16, 2002, made improvements to the child supportprogram.
Section 119 of that legislation included the Promotion and Support of
Responsible Fatherhood and Healthy Marriage Act of 2002.
4. Supplemental Security Income.
Actions taken: At a July 25, 2002, hearing on fraud and
abuse in the Supplemental Security Income (SSI) Program, the
Subcommittee heard from representatives of the SSA, the SSA's
Office of Inspector General, the Social Security Advisory
Board, and disability advocates.
Title VI of H.R. 4737, the Personal Responsibility, Work,
and Family Promotion Act of 2002, which passed in the House on
May 16, 2002, and Title I of H.R. 4070, the Social Security
Protection Act of 2002, which passed in the House on June 26,
2002, amended the Social Security Act to improve the SSI
program. No further action was taken on H.R. 4737 or H.R. 4070
during the remainder of the 107th Congress.
5. Child Protection.
Actions taken: The Subcommittee held a hearing on May 10,
2001, on the Promoting Safe and Stable Families Program to
explore how States have used Promoting Safe and Stable Families
program funds, to learn which programs are more effective, and
to review program reauthorization issues. Witnesses included
State and local program administrators, policy experts, and
program participants.
At a Subcommittee on Human Resources markup on September
25, 2001, H.R. 2873, the Promoting Safe and Stable Families
Amendments of 2001, was amended and reported to the full
Committee. The full Committee considered and reported the
Subcommittee-reported bill, as amended, on October 31, 2001.
The House approved H.R. 2873 by voice vote on November 13,
2001, and the legislation passed the Senate by unanimous
consent on December 13, 2001. H.R. 2873 was signed by the
President on January 17, 2002 (P.L. 107-133).
6. Unemployment Compensation.
Actions taken: On March 5, 2002, the Subcommittee held a
hearing on the unemployment compensation system and on
proposals in the Administration's fiscal year 2003 budget to
reform the administrative financing of the Nation's
Unemployment Compensation and Employment Security programs.
Testimony was heard from the U.S. Department of Labor, State
program administrators, small and large employers, and
organized labor. A June 11, 2002, unemployment compensation
program hearing focused on waste, fraud, and abuse with regard
to unemployment compensation benefits and a review of measures
that would better ensure program integrity. At this hearing,
witnesses included representatives from the U.S. Department of
Labor and the GAO, the Inspector General of the U.S. Department
of Labor, State program administrators, researchers, and
private sector technical specialists.
The Committee acted on a number of initiatives to stimulate
the economy and provide additional assistance to unemployed
workers: H.R. 3090, first introduced as the Economic Security
and Recovery Act of 2001, passed in the House on October 24,
2001. Title IV of this version of H.R. 3090 provided States
with additional resources to address increased unemployment. In
addition, Title V increased Social Services Block Grant funding
to provide health care assistance for the unemployed. H.R.
3529, the Economic Security and Worker Assistance Act of 2001,
which was introduced by Chairman Thomas on December 19, 2001,
and was approved by the House on December 20, 2001, contained a
version of the Temporary Extended Unemployment Compensation Act
of 2002 that was later amended (P.L. 107-147). H.R. 622, the
Economic Security and Worker Assistance Act of 2002, which
passed in the House on February 14, 2002, included as Title VI
the Temporary Extended Unemployment Compensation Act of 2002
(P.L. 107-147.) Finally, Title II of H.R. 3090, as amended and
renamed the Job Creation and Worker Assistance Act of 2002,
which passed in the House on March 7, 2002 (P.L. 107-147),
included the final version of the Temporary Extended
Unemployment Compensation Act of 2002. This legislation also
included provisions from H.R. 3841, the Displaced Worker
Assistance Act of 2002, which Chairman Thomas introduced on
March 5, 2002.
H.R. 5063, the Armed Forces Tax Fairness Act of 2002, was
amended and passed in the House November 14, 2002, to extend
certain provisions of the temporary extended unemployment
program begun under P.L. 107-147 until February 1, 2003. No
further action was taken on H.R. 5063 during the remainder of
the 107th Congress.
Subcommittee on Social Security--Comparison of oversight
plan developed in January 2001 to actual activities of the
Subcommittee during the 107th Congress:
1. Hearings to examine Social Security Trust Fund issues.
Actions taken: On June 18, 2001, the Subcommittee held a
field hearing in Columbia, Missouri, to discuss Americans'
views on the future of Social Security. An expert with the
American Academy of Actuaries presented information on Social
Security's financial challenges and options for strengthening
the program. Members of the public in attendance took a quiz on
the Social Security program, debated in groups, and presented
their thoughts on strengthening Social Security's finances.
On July 31, 2001, the Subcommittee held a hearing on the
experiences of other countries that utilized personal accounts
in their public pension reforms. Experts on the pension systems
of the United Kingdom, Australia, Sweden, Chile, and the United
States presented testimony.
On February 28, 2002, and March 6, 2002, the Subcommittee
held a 2-day hearing on Social Security improvements for women,
seniors, and working Americans. On the first day of the
hearing, the Subcommittee heard testimony from the Commissioner
of Social Security, Social Security experts, and
representatives of organizations that promote issues of
importance to women and seniors. Witnesses offered
recommendations for changes to the law that would address
inequities in the Social Security program and help lift retired
women out of poverty. On the second day of the hearing, the
Subcommittee heard testimony from Members of the House of
Representatives. Witnesses discussed Social Security's
importance to seniors, particularly women and minorities, and
the need to assure seniors and near retirees that their
benefits are secure while addressing Social Security's long-
term financial challenges.
2. Hearings to examine use of the Social Security number.
Actions taken: On May 22, 2001, the Subcommittee held a
hearing on protecting the privacy of SSNs and preventing their
misuse. The Subcommittee heard testimony from the SSA's
Inspector General, local government officials and law
enforcement, experts in privacy issues, representatives from
industries that would be affected if SSN use were limited, and
victims of identity theft. Witnesses discussed the growing use
and misuse of the SSN in the public and private sectors,
proposals for combating SSN misuse and protecting privacy, and
the impact of such proposals on businesses, government, and
consumers.
In response to information gathered at this hearing and
previous hearings in the 106th Congress, Subcommittee Chairman
Shaw introduced H.R. 2036, the ``Social Security Number Privacy
and Identity Theft Prevention Act of 2001.'' The bill would
have restricted the sale, purchase, and display of SSNs,
limited dissemination of SSNs by credit reporting agencies, and
made it more difficult for businesses to deny services if a
customer refused to provide his or her Social Security number.
Neither the House nor the Senate acted on the bill.
On November 8, 2001, the Subcommittee held a joint hearing
with the Committee on Financial Services, Subcommittee on
Oversight and Investigations, on prevention of identity theft
by terrorists and criminals. Testimony was heard from the U.S.
Department of Commerce, the SSA, the SSA's Inspector General,
and GAO, who presented their findings, as requested by the
Subcommittees, regarding the process for gathering death
information and reporting it to financial institutions.
Testimony was also heard from representatives of industries
that rely heavily on SSN use, privacy experts, and a State law
enforcement official. Witnesses discussed proposals for
improving the accuracy and distribution of the Death Master
File, which is maintained and distributed by the SSA and
contains the SSNs and other identifying information of deceased
individuals.
On April 29, 2002, the Subcommittee held a field hearing in
Lake Worth, Florida, on protecting the privacy of Social
Security numbers and preventing their misuse. Testimony was
heard from the GAO, who discussed (1) the extent and nature of
government agencies' use of SSNs as they administer programs to
provide benefits and services and the actions government
agencies take to safeguard these SSNs from improper disclosure;
and (2) the extent and nature of governments' use of SSNs when
they are contained in public records and the options available
to better safeguard SSNs traditionally found in these public
records, as requested by Subcommittee Chairman Shaw. Testimony
was also heard from Florida law enforcement officials, the
SSA's Office of the Inspector General, and victims of identity
theft. Witnesses discussed the financial and emotional costs of
identity theft; the challenges law enforcement agencies face as
they pursue identity thieves; the use of SSNs by government
agencies at the Federal, State, and local levels; and proposals
aimed at combating SSN misuse and protecting privacy.
On September 19, 2002, the Subcommittee held a joint
hearing with the Committee on Judiciary, Subcommittee on
Immigration, Border Security, and Claims, on preserving the
integrity of SSNs and preventing their misuse by terrorists and
identity thieves. Testimony was heard from the Deputy
Commissioner of Social Security, Federal law enforcement
agencies, a privacy expert, and a small-business owner.
Witnesses discussed the role SSNs play in identity theft and
Federal agency coordination and cooperation, including data
sharing, to verify identification documents and to detect and
prevent fraud. Witnesses also discussed the need to improve the
integrity of the SSA's enumeration and wage crediting process
and recommended legislative proposals aimed at combating SSN
misuse and protecting privacy.
3. Hearings to examine Social Security disability programs.
Actions taken: On February 28, 2001, the Subcommittee held
a hearing to assess the SSA's proposed regulation to implement
the Ticket to Work and Self-Sufficiency program. Witnesses
included two members of the Ticket to Work and Work Incentives
Advisory Panel, consumer advocates, and program experts, who
provided their perspectives on the SSAs proposed regulations.
On June 28, 2001, the Subcommittee began a hearing series
on the challenges and opportunities facing Social Security's
disability programs. Witnesses included the Chairman of the
Social Security Advisory Board and representatives from the
SSA's employee organizations involved in the disability
determination process. Recommendations focused on ways to
decrease processing times at all levels of disability claims
adjudication.
The second hearing in the series was a two-part hearing
held on June 11 and June 20, 2002, examining the disability
determination and appeals process. During part one of the
hearing, the Subcommittee heard from the GAO (whose testimony
was based on work requested by the Subcommittee), the Social
Security Advisory Board, a disability researcher,and agency
employee organizations. Part two focused on the appeals process. The
Subcommittee heard testimony from disability advocates, representatives
from the National Organization of Social Security Claimants'
Representatives, the American Bar Association and the Federal Bar
Association, professors of law, and employee organizations from the
SSA. During both parts of the hearing, witnesses provided their
perspectives regarding the reasons for delays, complexities, and
inconsistencies, and offered recommendations for change.
The third hearing in the series, held on July 11, 2002,
examined how the Agency determines disability as defined in the
statute and the degree to which the definition of disability in
law addresses the needs of today's workers, beneficiaries, and
the intent of the Social Security Disability Insurance and
Supplemental Security Income programs. Testimony was heard from
the SSA, the Ticket to Work and Work Incentives Advisory Panel,
the GAO, a disability advocate, disability researchers,
disability experts and a professor of law.
The fourth hearing in the series was held on September 26,
2002, during which the Subcommittee examined progress in
implementing the Ticket to Work and Work Incentives Improvement
Act, including preliminary results, issues of concern, and
needed improvements. Testimony was heard from the SSA, the
Ticket to Work and Work Incentives Advisory Panel, disability
advocates and researchers, the Program Manager--Maximus,
representatives from State Vocational Rehabilitation agencies,
employment networks and a ticket holder.
4. Hearings to examine the SSA's stewardship of Social
Security programs.
Actions taken: On May 10, 2001, the Subcommittee held a
hearing to examine the SSA's efforts to prevent payment of
benefits to those individuals who are ineligible to receive
them and to prevent misuse of benefits by representative
payees. Testimony was heard from the SSA, the SSA's Office of
the Inspector General, a disability advocate, an organizational
representative payee, and law enforcement officials.
5. Hearings to examine the SSA's service delivery.
Actions taken: On May 17, 2001, the Subcommittee held a
hearing on the SSA's processing of attorney fees. The hearing
focused on the GAO's study and findings from their report, the
adequacy of attorney fee processing, and recommendations for
change to the attorney fee process. Testimony was heard from
the SSA, the GAO, the National Organization of Social Security
Claimants' Representatives, and the Consortium for Citizens
with Disabilities. In response to information gathered at this
hearing and previous hearings in the 106th Congress,
Subcommittee Chairman Shaw introduced H.R. 3332, the ``Attorney
Fee Payment System Improvement Act of 2001,'' which would have
increased the maximum allowable cap on attorney fees to $5,200,
extended withholding of attorney fee payments to SSI claims,
and capped the 6.3 percent assessment on an attorney's approved
fee at $100 in both Social Security and SSI claims. Modified
provisions from this bill were incorporated into H.R. 4070, the
``Social Security Program Protection Act,'' which passed the
House, as amended, on June 26, 2002, under suspension of the
rules by a vote of 425 to 0. The bill was referred to the
Senate on June 27, 2002. On November 18, 2002, the Senate
passed the legislation, as amended, by unanimous consent. No
further action was taken on the bill.
On November 1, 2001, the Subcommittee held a hearing on how
the SSA served the victims and families of the September 11
terrorist attacks, how their operations were impacted, and how
the Agency assisted with Federal investigations of the attacks.
Testimony was heard from Representative Sue Kelly, the Acting
Commissioner of Social Security, Social Security Regional
Commissioners from New York and Pennsylvania, and the Inspector
General. Subcommittee Members heard how the Agency was able to
quickly and effectively support the victims and their families
during this crisis and how the Office of the Inspector General
assisted in the investigation of the identities of terrorists.
On May 2, 2002, the Subcommittee held a hearing on the
challenges facing the new Commissioner of Social Security.
Testimony was heard from the Commissioner of Social Security,
the Inspector General, and representatives from the GAO (whose
testimony was based on a number of reports requested by the
Subcommittee), Social Security Advisory Board, AARP, Consortium
for Citizens with Disabilities, and the National Committee to
Preserve Social Security and Medicare.
In addition, Subcommittee Chairman Shaw has requested or
has received the following studies from the GAO: SSN use in the
private sector and how SSN use benefits or harms the public;
the extent to which SSNs of deceased individuals are being used
fraudulently; the efficacy of continuing disability reviews and
implications for the Ticket-to-Work program; uses of the SSN
authorized or mandated under current Federal law and extent to
which the public's access to public records containing SSNs
facilitates identity fraud and theft; the SSA's verification of
SSNs for government agencies; the SSA's files on earnings that
cannot be matched to a worker (earnings suspense file); the
SSA's policies on disclosure to law enforcement agencies; the
SSA's current and future human capital needs and recruitment
efforts; the SSA's enumeration procedures; and the extent to
which individuals are transferring to other jobs to avoid the
Government Pension Offset.

C. Additional Oversight Activities and Any Recommendation or Actions
Taken

1. ADDITIONAL OVERSIGHT ACTIVITIES OF THE TRADE SUBCOMMITTEE

In addition to the oversight activities detailed above with
respect to the Committee'soversight plan, the Committee
convened the Congressional Oversight Group established under the Trade
Act of 2002 (P.L. 107-210), co-chaired by the Chairmen of the Committee
on Ways and Means and Senate Committee on Finance. The COG is comprised
of the Chairman and Ranking Member of those Committees of the House and
Senate which would have jurisdiction over provisions of law affected by
trade agreement negotiations during this Congress. The purpose of the
COG is to provide the President and the USTR with advice regarding the
formulation of specific objectives, negotiating strategies and
positions, the development of trade agreements, and compliance and
enforcement of negotiated commitments under trade agreements.
The Committee continued its oversight over U.S.
international tax law, particularly in light of the WTO
Appellate Body's report finding that the United States' ETI
rules are a prohibited export subsidy. The Committee's
activities on this issue are discussed in the Europe section of
this report.
The Committee continued its oversight of the QIZ initiative
under the U.S.-Israel Free Trade Agreement to support the peace
process in the Middle East by encouraging economic integration
with Israel. The Committee included in the Miscellaneous Trade
and Technical Corrections Act of 2002 (H.R. 5385) legislation
to expand the QIZ program to allow Israel-Turkey QIZs to help
Turkey attract foreign direct investment, diversify its exports
away from dependence on textiles, boost trade, and increase
employment opportunities. The bill was approved by the
Committee on September 18, 2002, and by the House approved on
October 7, 2002. The Senate took no action on the legislation.
The Committee conducted oversight over the NTR status of
Yugoslavia (Serbia and Montenegro), which was withdrawn by
Congress in 1992 because Serbia and Montenegro were not
complying with the provisions of the Final Act of the
Conference on Security and Cooperation in Europe. The Committee
included in the Miscellaneous Trade and Technical Corrections
Act of 2002 (H.R. 5385) legislation to give the President the
authority to proclaim NTR status to Yugoslavia notwithstanding
the 1992 law. This legislation was approved by the Committee on
September 18, 2002, and by the House on October 7, 2002.
However, the Senate took no action on this legislation.
In the aftermath of September 11, the Committee expanded
its oversight of the Customs Service to include consideration
of a new U.S. Department of Homeland Security. On June 26,
2002, the Committee held a hearing on the President's proposal
to create a U.S. Department of Homeland Security including the
transfer of all assets and authority of the U.S. Customs
Service to the new Department and on H.R. 5005, ``The Homeland
Security Act of 2002.'' On the basis of this hearing, the
Committee ordered favorably reported recommendations for
legislative changes to H.R. 5005, the ``Homeland Security Act
of 2002,'' with amendment, and this language was incorporated
into a final bill passed by the House on July 31, 2002. No
further action was taken on this bill in the 107th Congress. On
November 13, 2002, the House Select Committee on Homeland
Security reported H.R. 5710 as a substitute to H.R. 5005, with
minor changes in the Customs section, and the House passed the
bill on November 13, 2002. Following Senate passage on November
19, the President signed the bill into law on November 25,
2002.
On March 8, 2002, Subcommittee Chairman Crane requested
written comments from parties interested in miscellaneous trade
proposals, technical corrections to the trade laws, and
temporary suspensions on certain imports. Based on this public
comment, the Committee reported out H.R. 5385, the
``Miscellaneous Trade and Technical Corrections Act of 2002.''
On October 7, 2002, the bill was agreed to by the House under
suspension of the rules by voice vote. The Senate took no
action on the legislation.
The Committee also considered provisions of the Agriculture
Act of 2002 within its jurisdiction, concerning raw cotton
import quotas, the dairy marketing fee assessment on imports,
the reallocation of the sugar quota, and certain provisions of
the Animal Health Protection Act and the Bear Protection Act.
The House passed the conference report to this legislation on
May 2, 2002, containing provisions within the Committee's
jurisdiction as modified to the Committee's satisfaction. The
Senate passed the conference report on May 8, 2002, and it was
signed into law on May 13, 2002 (P.L. 107-171).
The Committee continued its oversight over trade in
conflict diamonds, which are diamonds that generally come from
mines controlled by rebel forces and are traded for arms to
fuel civil war in Africa. The Trade Subcommittee held a hearing
on October 10, 2001, on the importation of conflict diamonds in
order to obtain viewpoints from the Administration, the
industry, non-governmental organizations, and other interested
parties for possible solutions. On August 2, 2001,
Representative Houghton introduced H.R. 2722, the Clean
Diamonds Trade Act, to restrict the importation of diamonds
from countries with inadequate controls against the trade of
conflict diamonds. Based upon information gathered at the
hearing, Chairman Thomas brought H.R. 2722, as amended, to the
Floor under suspension of the rules on November 28, 2001. H.R.
2722 as amended would provide the President with the authority
to evaluate control measures used by countries to prevent the
trade of conflict diamonds. The President would also have the
authority to ban diamond imports that were found to be from
countries with inadequate control measures. H.R. 2722 passed
the House by a vote of 408 to 6. The Senate took no action on
this legislation.
The Committee continued its oversight of the U.S.-Israel
Free Trade Agreement, particularly concerning agriculture, and
obtained a letter from the Israeli Government concerning its
compliance with agriculture obligations.
Finally, the Committee requested and received a study of
the domestic tool and die manufacturing industry under section
332(g) of the Tariff Act of 1930.

2. ADDITIONAL OVERSIGHT ACTIVITIES OF THE OVERSIGHT SUBCOMMITTEE

1. Renewal Communities.
Actions taken: The Subcommittee held a hearing on Renewal
Communities on May 21, 2002. Renewal Communities were created
in December 2000 (P.L. 106-554), as part of the ``Community
Renewal Tax Relief Act of 2000,'' which was later incorporated
into the ``Consolidated Appropriations Act, 2001.'' This
legislation allows the U.S. Department of Housing and Urban
Development to select up to 40 Renewal Communities, 12 of which
must be rural, that are nominated by States and local
governments. The designated communities are eligible for a
variety of tax incentives available between 2002 and 2009. The
hearing focused on how the newly designated Renewal Communities
planned to use available incentives to attract business
investment to their communities. On October 7, 2002, the House
passed additional Renewal Community legislation, H.R. 3100.
This bill allows for the expansion of areas designated as
Renewal Communities based on 2000 census data.
2. Unrelated Business Income Tax.
Actions taken: On June 24, 2002, the Subcommittee requested
written comments on H.R. 2237, a bill to amend the Internal
Revenue Code of 1986 to provide that the conducting of certain
games of chance shall not be treated as an unrelated trade or
business. The Internal Revenue Code requires tax-exempt
organizations to pay tax at corporate rates on income derived
from an unrelated trade or business. In general, an unrelated
trade or business is any trade or business that is not
substantially related to the tax-exempt purpose that is the
basis for the exemption from Federal income tax. Activities in
which substantially all of the work is performed by volunteers
are not, however, considered to be unrelated trade or business.
3. Charitable Organizations' Response to the Recent Terror
Attacks.
Actions taken: The Subcommittee held a hearing on November
8, 2001, to review the response of charitable organizations to
the terrorist attacks on September 11, 2001. The hearing
focused on the charitable solicitations, funds raised and
distributed to those in need, and the organizations' short- and
long-term plans for the future. The IRS discussed its role in
the oversight of charities, relevant tax law requirements, and
the expedited approval process of September 11 charities.
Throughout the remainder of the 107th Congress, the
Subcommittee received briefings from charitable organizations
on their activities.
4. Internal Revenue Code Section 511(c)(3) Requirements for
Religious Organizations.
Actions taken: The Subcommittee held a hearing on May 14,
2002, to review whether churches receiving tax-exempt status
under section 501(c)(3) of the Code, should be allowed to
retain that preferred status, including the deductibility of
contributions, while engaging in political activity. The
hearing focused on two bills, H.R. 2931, the Bright Line Act of
2001, and H.R. 2357, the Houses of Worship Political Speech
Protection Act. The House failed to pass H.R. 2357 on October
2, 2002.
5. Deceptive Mailing Concerning Tax Refunds.
Actions taken: The Subcommittee held a hearing on July 19,
2001, to raise consumer awareness about a deceptive mailing
being sent to individuals that was designed to look like an IRS
mailing. The Economic Growth and Tax Relief Reconciliation Act
of 2001 (P.L. 107-16) directed the U.S. Department of the
Treasury to send checks to most taxpayers beginning in the
summer of 2001 as an advance payment to reflect the new 10-
percent tax bracket. However, there were reports of
unscrupulous entities hoping to take advantage of taxpayers who
wanted further details about their eligibility for the advance
tax payment. Taxpayers in at least 5 States received postcards
designated as ``2001 Form 16-B,'' resembling an official IRS
tax form, and bearing the designation, ``Revenue Resource
Center,'' a ``Non-Partisan Bureaucratic Agency.'' The postcard
offered to send information on the amount of the recipient's
tax refund check in exchange for $14.95. The postcard, which
could be easily confused with official IRS correspondence
because of its use of certain terms, typeface, and a quotation,
attributed to President Bush, that requested money ``in order
to identify the amount of the tax credit you are scheduled to
receive.'' The IRS and Postal Inspection Service outlined steps
they were taking to stop this fraud and publicize legitimate
information about the advance tax payment. Individuals were
later arrested and convicted for participating in the scheme.
6. Modeling Economic Effects of Changes in Tax Policy.
Actions taken: The Subcommittee held a hearing on May 7,
2002, to review the economic models and assumptions that are
used for the current tax revenue estimating process, and
explore ways to improve overall forecasting and analysis
regarding legislation before the Committee on Ways and Means
and Congress. At the hearing, Lindy Paull, the Chief of Staff
of the JCT, discussed the recent efforts of JCT economists to
estimate the macroeconomic feedback efforts of major tax
proposals. The JCT described its plan to create a Blue Ribbon
Panel of economists to evaluate dynamic scoring, and,
currently, is finalizing a report that summarizes the work of
the Panel.
7. Low-Income Taxpayer Clinics.
Actions taken: On July 12, 2001, the Subcommittee held a
hearing on the Annual Report of the National Taxpayer Advocate
and Low-Income Taxpayer Clinics. The hearing focused on the
funding and functioning of the low-income taxpayer clinic
program, specifically the need for additional funding for this
program. The IRS Restructuring andReform Act of 1998
established a program to grant up to $6 million to low-income taxpayer
clinics for the purpose of helping low-income taxpayers to resolve tax
disputes. This program arose from a proposal developed in 1997 by the
National Commission on Restructuring the IRS. A low-income clinic can
be granted up to $100,000 per year, and the funds must be matched by
private money. The Taxpayer Relief and IRS Accountability Act of 2002
(H.R. 3991) contained a provision for increasing the total amount of
funds for low-income taxpayer clinic grants from $6 million to $15
million in 3 years. H.R. 586, which included this provision of H.R.
3991, passed the House on April 18, 2002. In addition, the provision
for low-income taxpayer clinic grants increase was included in H.R.
5728, the Tax Administration Reform Act of 2002, which passed the House
on November 15, 2002.

3. ADDITIONAL OVERSIGHT ACTIVITIES OF THE HUMAN RESOURCES SUBCOMMITTEE

In addition to the Subcommittee's oversight activities on
welfare reform and other legislative issues described above, on
June 14, 2001, the Subcommittee conducted a joint hearing with
the Subcommittee on Select Revenue Measures to review H.R. 7,
the Community Solutions Act of 2001. Subcommittee Members were
particularly interested in testimony related to ``charitable
choice,'' a term that refers to changes made under welfare
reform and subsequent laws designed to permit more involvement
by churches, synagogues, mosques, and others in the faith-based
community in the delivery of social services to needy families.
Witnesses included Members of Congress, policy specialists,
representatives from faith-based programs, program operators,
State program administrators, religious organizations, and
organized labor.
On July 11, 2001, H.R. 7 was amended and approved by the
Committee on Ways and Means. The House approved H.R. 7 by a
vote of 223 to 198 on July 19, 2001. The bill was referred to
the Senate Committee on Finance, where it was considered and
amended on June 13 and June 18, 2002. The measure was reported
to the full Senate for action on July 16, 2002. No further
action was taken on H.R. 7 during the remainder of the 107th
Congress.

4. ADDITIONAL OVERSIGHT ACTIVITIES OF THE HEALTH SUBCOMMITTEE

In addition to the activities detailed above, the
Subcommittee on Health continued its investigations into
several matters of importance to the Medicare program. Among
these was a hearing on promoting disease management in
Medicare, held on April 16, 2002. Testimony taken at these
hearings helped form the basis of legislation considered by the
Committee which was included in H.R. 4954, the ``Medicare
Modernization and Prescription Drug Act.''

5. ADDITIONAL OVERSIGHT ACTIVITIES OF THE SOCIAL SECURITY SUBCOMMITTEE

In addition to the hearings detailed above, the
Subcommittee on Social Security held a hearing on July 26,
2001, on misleading mailings targeted to seniors. Testimony was
heard from the Inspector General, a representative of the
Arkansas Office of the Attorney General, and a fraud victim.
Subpoenaed witnesses included current and former employees or
associates of The Retired Enlisted Association (TREA) Senior
Citizens League, an independent affiliate of (TREA). Testimony
included the experiences of victims and related investigation
findings.

Appendix I. Jurisdiction of the Committee on Ways and Means

A. U.S. Constitution

Article I, section 7, of the Constitution of the United
States provides as follows:
All Bills for raising Revenue shall originate in the House
of Representatives; but the Senate may propose or concur with
Amendments as on other Bills.
In addition, Article I, Section 8, Constitution of the
United States provides the following:

The Congress shall have Power To lay and collect Taxes,
Duties, Imposts and Excises, to pay the Debts and * * *
To borrow Money on the credit of the United States.

B. Rule X, Clause 1, Rules of the House of Representatives

Rule X, clause 1(s), of the Rules of the House of
Representatives, in effect during the 107th Congress, provides
for the jurisdiction of the Committee on Ways and Means, as
follows:

(s) Committee on Ways and Means.
(1) Customs, collection districts, and ports of entry
and delivery.
(2) Reciprocal trade agreements.
(3) Revenue measures generally.
(4) Revenue measures relating to insular possessions.
(5) The bonded debt of the United States, subject to
the last sentence of clause 4(f). [The last sentence of
clause 4(f) requires the Committee on Ways and Means to
include in its annual report to the Committee on the
Budget a specific recommendation, made after holding
public hearings, as to the appropriate level of the
public debt that should be set forth in the concurrent
resolution on the budget and serve as the basis for an
increase or decrease in the statutory limit on such
debt.]
(6) Deposit of public monies.
(7) Transportation of dutiable goods.
(8) Tax exempt foundations and charitable trusts.
(9) National Social Security (except health care and
facilities programs that are supported from general
revenues as opposed to payroll deductions and except
work incentive programs).

C. Brief Description of Committee's Jurisdiction

The foregoing recitation of the provisions of House Rule X,
clause 1, paragraph (s), does not convey the comprehensive
nature of the jurisdiction of the Committee on Ways and Means.
The following summary provides a more complete description:
(1) Federal revenue measures generally.--The Committee on
Ways and Means has the responsibility for raising the revenue
required to finance the Federal Government. This includes
individual and corporate income taxes, excise taxes, estate
taxes, gift taxes, and other miscellaneous taxes.
(2) The bonded debt of the United States.--The Committee on
Ways and Means has jurisdiction over the authority of the
Federal Government to borrow money. Title 31 of Chapter 31 of
the U.S. Code authorizes the Secretary of the Treasury to
conduct any necessary public borrowing subject to a maximum
limit on the amount of borrowing outstanding at any one time.
This statutory limit on the amount of public debt (``the debt
ceiling'') currently is $6.4 trillion. The Committee's
jurisdiction also includes conditions under which the U.S.
Department of the Treasury manages the Federal debt, such as
restrictions on the conditions under which certain debt
instruments are sold.
(3) National Social Security programs.--The Committee on
Ways and Means has jurisdiction over most of the programs
authorized by the Social Security Act, which includes not only
those programs that are normally referred to colloquially as
``Social Security'' but also social insurance programs and a
whole series of grant-in-aid programs to State governments for
a variety of purposes. The Social Security Act, as amended,
contains 20 titles (a few of which have either expired or have
been repealed). The principal programs established by the
Social Security Act and under the jurisdiction of the Committee
on Ways and Means in the 107th Congress can be outlined as
follows:
(a) Old-age, survivors, and disability insurance
(Title II)--At present, there are approximately 153
million workers in employment covered by the program,
and for calendar year 2001, $432 billion in benefits
were paid to 46 million individuals.
(b) Medicare (Title XVIII)--Provides hospital
insurance benefits to 34 million persons over the age
of 65 and to 5.7 million disabled persons. Voluntary
supplementary medical insurance is provided to 32.7
million aged persons and 5.0 million disabled persons.
Total program outlays under these programs were $240.9
billion in 2001.
(c) Supplemental security income (SSI) (Title XVI)--
The SSI program was inaugurated in January 1974 under
the provisions of P.L. 92-603, as amended. It replaced
the former Federal-State programs for the needy aged,
blind, and disabled. On average in calendar year 2001,
6.4 million individuals received Federal SSI benefits
on a monthly basis. Of these 6.4 million persons,
approximately 1.2 million received benefits on the
basis of age, and 5.2 million on the basis of blindness
or disability. Federal expenditures for cash SSI
payments in 2001 totaled $30.5 billion, while State
expenditures for federally administered SSI supplements
totaled $3.5 billion.
(d) Temporary Assistance for Needy Families (TANF)
(part A of Title IV)--The TANF program is a block grant
of about $16.5 billion dollars awarded to States to
provide income assistance to poor families, to end
dependency on welfare benefits, to prevent nonmarital
births, and to encourage marriage, among other
purposes. The TANF also includes incentive funds for
States that achieve overall program goals and
additional incentive funds for States that are
successful in reducing nonmarital births. In most
cases, Federal TANF benefits for individuals are
limited to 5 years and individuals must work to
maintain their eligibility. In June 2002, about 2
million families and 5 million individuals received
benefits from the TANF program.
(e) Child support enforcement (part D of Title IV)--
In fiscal year 2001 Federal administrative expenditures
totaled $3.5 billion for the child support enforcement
program. Child support collections for that year
totaled $18.9 billion.
(f) Child welfare, foster care, and adoption
assistance (parts B and E of Title IV)--Titles IV B and
E provide funds to States for child welfare services
for abused and neglected children; foster care for
children who meet Aid to Families with Dependent
Children eligibility criteria; and adoption assistance
for children with special needs. In fiscal year 2002,
Federal expenditures for child welfare services totaled
$667 million. Federal expenditures for foster care and
adoption assistance were approximately $6.6 billion.
(g) Unemployment compensation programs (Titles III,
IX, and XII)--These titles authorize the Federal-State
unemployment compensation program and the permanent
extended benefits program. In the first three quarters
of fiscal year 2002, an estimated $31.5 billion was
paid in unemployment compensation benefits, with
approximately 8.1 million workers receiving
unemployment benefits.
(h) Social services (Title XX)--Title XX authorizes
the Federal Government to reimburse the States for
money spent to provide persons with various services.
Generally, the specific services provided are
determined by each State. The statutory ceiling on
Federal matching funds available to the States for
fiscal year 2002 was $2.4 billion and $1.7 billion was
appropriated for fiscal year 2002. These funds are
allocated on the basis of population.
(4) Trade and tariff legislation.--The Committee on Ways
and Means has responsibility over legislation relating to
tariffs, import trade, and trade negotiations. In the early
days of the Republic, tariff and customs receipts were major
sources of revenue for the Federal Government. As the Committee
with jurisdiction over revenue-raising measures, the Committee
on Ways and Means thus evolved as the primary Committee
responsible for international trade policy.
The Constitution vests the power to levy tariffs and to
regulate international commerce specifically in the Congress as
one of its enumerated powers. Any authority to regulate imports
or to negotiate trade agreements must therefore be delegated to
the executive branch through legislative action. Statutes
including the Reciprocal Trade Agreements Acts beginning in
1934, Trade Expansion Act of 1962, Trade Act of 1974, Trade
Agreements Act of 1979, Trade and Tariff Act of 1984, Omnibus
Trade and Competitiveness Act of 1988, North American Free
Trade Agreement Implementation Act, Uruguay Round Agreements
Act, and Trade Act of 2002 provide the basis for U.S.
bargaining with other countries to achieve the mutual reduction
of tariff and nontariff trade barriers under reciprocal trade
agreements.
The Committee's jurisdiction includes the following
authorities and programs:
(a) The tariff schedules and all tariff preference
programs, such as the GSP and the CBI;
(b) Laws dealing with unfair trade practices,
including the antidumping law, countervailing duty law,
section 301, and section 337;
(c) Other laws dealing with import trade, including
section 201 (escape clause), section 232 national
security controls, section 22 agricultural
restrictions, international commodity agreements,
textile restrictions under section 204, and any other
restrictions or sanctions affecting imports;
(d) General and specific trade negotiating authority,
as well as implementing authority for trade agreements
and the grant of normal-trade-relations (NTR) status;
(e) General and NAFTA-related TAA programs for
workers, and TAA for firms;
(f) Customs administration and enforcement, including
rules of origin and country-of origin marking, customs
classification, customs valuation, customs user fees,
and U.S. participation in the World Customs
Organization (WCO);
(g) Authorization of the budget for the ITC, the U.S.
Customs Service, and the Office of the U.S. Trade
Representative (USTR).

D. Revenue Originating Prerogative of the House of Representatives

The Constitutional Convention debated adopting the British
model in which the House of Lords could not amend revenue
legislation sent to it from the House of Commons. Eventually,
however, the Convention proposed and the States later ratified
the Constitution providing that ``All bills for raising revenue
shall originate in the House of Representatives, but the Senate
may propose or concur with amendments as on other bills.''
(Article 1, Section 7, clause 1.)
In order to pass constitutional scrutiny under this
``origination clause,'' a tax bill must be passed first by the
House of Representatives. After the House has completed action
on a bill and approved it by a majority vote, the bill is
transmitted to the Senate for formal action. The Senate may
have already reviewed issues raised by the bill before its
transmission. For example, the Senate Committee on Finance
frequently holds hearings on tax legislative proposals before
the legislation embodying those proposals is transmitted from
the House of Representatives. On occasion, the Senate will
consider a revenue bill in the form of a Senate or ``S.'' bill,
and then await passage of a revenue ``H.R.'' bill from the
House. The Senate then will add or substitute provisions of the
``S.'' bill as an amendment to the ``H.R.'' bill and send the
``H.R.'' bill back to the House of Representatives for its
concurrence or for conference on the differing provisions.

E. The House's Exercise of Its Constitutional Prerogative: ``Blue-
Slipping''

When a Senate bill or amendment to a House bill infringes
on the constitutional prerogative of the House to originate
revenue measures, that infringement may be raised in the House
as a matter of privilege. That privilege has also been asserted
on a Senate amendment to a House amendment to a Senate bill
(see 96th Congress, 1st Session, November 8, 1979,
Congressional Record p. H10425).
Note that the House in its sole discretion may determine
that legislation passed by the Senate infringes on its
prerogative to originate revenue legislation. In the absence of
such determination by the House, the Federal courts are
occasionally asked to rule a certain revenue measure to be
unconstitutional as not having originated in the House (see
U.S. v. Munoz-Flores, 495 U.S. 385 (1990).
Senate bills or amendments to nonrevenue bills infringe on
the House's prerogative even if they do not raise or reduce
revenue. Such infringements are referred to as ``revenue
affecting.'' Thus, any import ban which could result in lost
customs tariffs must originate in the House (100th Congress,
1st Session, July 30, 1987 100th Congress, 2d Session, June 16,
1988, Congressional Record p. H4356).
Offending bills and amendments are returned to the Senate
through the passage in the House of a House Resolution which
states that the Senate provision: ``in the opinion of the
House, contravenes the first clause of the seventh section of
the first article of the Constitution of the United States and
is an infringement of the privilege of the House and that such
bill be respectfully returned to the Senate with a message
communicating this resolution'' (e.g., 100th Congress, 1st
Session, July 30, 1987, Congressional Record p. H6808) This
practice is referred to as ``blue slipping'' because the
resolution returning the offending bill to the Senate is
printed on blue paper.
In other cases, the Committee of the Whole House has passed
a similar or identical House bill in lieu of a Senate bill or
amendment (e.g., 91st Congress, 2d Congress, May 11, 1970,
Congressional Record pp. H14951-14960). The Committee on Ways
and Means has also reported bills to the House which were
approved and sent to the Senate in lieu of Senate bills (e.g.,
93d Congress, 1st Session, November 6, 1973, Congressional
Record pp. 36006-36008). In other cases, the Senate has
substituted a House bill or delayed action on its own
legislation to await a proper revenue affecting bill or
amendment from the House (see 95th Congress, 2d Session,
September 22, 1978, Congressional Record p. H30960; January 22,
1980, Congressional Record p. S107).
Any Member may offer a resolution seeking to invoke Article
I, Section 7. However, the determination that a bill violates
the Origination Clause has been traditionally made by Members
of the Committee on Ways and Means, and the resolution has been
offered by the Chairman or another Member of the Committee on
Ways and Means. Because Article I, Section 7 involves the
privileges of the House, a blue-slip resolution offered by the
Chairman or other Members of the Committee on Ways and Means
has been typically adopted by voice vote on the House Floor.
There have been instances where the House has agreed to not
deal directly with the issue by tabling a resolution.\1,\ \2\
---------------------------------------------------------------------------
\1\ In cases where the Chairman of the Committee on Ways and Means
did not believe that the bill in question violated the Origination
Clause or the objection had been dealt with in another manner,
resolutions offered by other Members of the House have been tabled.
[See adoption of motion by Representative Rostenkowski to table H. Res.
571, 97-2, p. 22127.]
\2\ This was an instance where the Chairman of the Committee on
Ways and Means raised a question of the privilege of the House pursuant
to Article I, Section 7, of the U.S. Constitution on H.R. 4516,
Legislative Branch Appropriations. The motion was laid on the table.

BLUE SLIP RESOLUTIONS--98TH CONGRESS THROUGH 107TH CONGRESS
CHRONOLOGICAL LIST
[Resolutions passed by the House returning to the Senate bills passed in
violation of the origination clause of the United States Constitution
(Clause 1, Section 7 of Article 1)]
------------------------------------------------------------------------
Description of Senate action
H. Res., sponsor, and date of House (and related House action, if
passage any)
------------------------------------------------------------------------
107th Congress:
H. Res. 240, Mr. Thomas, September On September 13, 2001, the
20, 2001. Senate passed H.R. 2500,
``Making appropriations for
the U.S. Departments of
Commerce, Justice, and State,
the Judiciary, and related
agencies for the fiscal year
ending September 30, 2002, and
for other purposes'' with an
amendment. Contained in this
legislation was a provision
banning the importation of
diamonds not certified as
originating outside conflict
zones. The proposed change in
the import laws constituted a
revenue measure in the
constitutional sense, because
it would have had a direct
impact on customs revenues.
106th Congress:
H. Res. 645, Mr. Crane, October 24, On October 17, 2000, the Senate
2000. passed S. 1109, the Bear
Protection Act of 1999. This
legislation would have
conserved global bear
populations by prohibiting the
importation, exportation, and
interstate trade of bear
viscera and items, products,
or substances containing, or
labeled or advertised as
containing, bear viscera. The
proposed change in the import
laws constituted a revenue
measure in the constitutional
sense, because it would have
had a direct impact on customs
revenues.
H. Res. 394, Mr. Weller, November On November 3, 1999, the Senate
18, 1999. passed S. 1232, Federal
Erroneous Retirement Coverage
Corrections Act. This
legislation would have
provided that no Federal
retirement plan involved in
the corrections under the bill
would fail to be treated as a
tax-qualified retirement plan
by reason of the correction,
and that any fund transfers or
government contributions
resulting from the corrections
would have no impact on the
tax liability of individuals.
These changes constituted a
revenue measure in the
constitutional sense because
they would have had a direct
impact on Federal revenues.
H. Res. 393, Mr. Weller, November On February 24, 1999, the
18, 1999. Senate passed S. 4, the
Soldiers', Sailors', Airmen's,
and Marines' Bill of Rights
Act of 1999. The legislation
would have allowed members of
the Armed Forces to
participate in the Federal
Thrift Savings Program and to
avoid the tax consequences
that would otherwise have
resulted from certain
contributions in excess of the
limitations imposed in the
Internal Revenue Code. This
proposed exemption therefore
constituted a revenue measure
in the constitutional sense
because it would have had a
direct impact on Federal
revenues.
H. Res. 249, Mr. Portman, July 16, On May 20, 1999, the Senate
1999. passed S. 254, the Violent and
Repeat Juvenile Offender
Accountability and
Rehabilitation Act of 1999.
The legislation would have had
the effect of banning the
import of large capacity
ammunition feeding devices.
The proposed change in the
import laws constituted a
revenue measure in the
constitutional sense, because
it would have had a direct
impact on customs revenues.
105th Congress:
H. Res. 601, Mr. Crane, October 15, On October 8, 1998, the Senate
1998. passed S. 361, the Tiger and
Rhinoceros Conservation Act of
1998. This legislation would
have had the effect of
creating a new basis and
mechanism for applying import
restrictions for products
intended for human consumption
or application containing (or
labeled as containing) any
substance derived from tigers
or rhinoceroses. The proposed
change in the import laws
constituted a revenue measure
in the constitutional sense,
because it would have had a
direct impact on customs
revenues.
H. Res. 379, Mr. Ensign, March 5, On April 15, 1997, the Senate
1998. passed S. 104, the Nuclear
Waste Policy Act of 1997. This
legislation would have
repealed a revenue provision
and replaced it with a user
fee. The revenue provision in
question was a fee of 1 mill
per kilowatt hour of
electricity generated by
nuclear power imposed by the
Nuclear Waste Policy Act of
1982. The proposed user fee in
the legislation would have
been limited to the amount
appropriated for nuclear waste
disposal. The original fee was
uncapped, and, in fact,
because the fees collected
exceeded the associated costs,
it was being used as revenue
to finance the Federal
government generally. Its
proposed repeal therefore
constituted a revenue measure
in the constitutional sense
because it would have had a
direct impact on Federal
revenues.
104th Congress:
H. Res. 554, Mr. Crane, September On June 30, 1996, the Senate
28, 1996. passed H.R. 400, the Anaktuvuk
Pass Land Exchange and
Wilderness Redesignation Act
of 1995, with an amendment.
Section 204(a) of the Senate
amendment would have
overridden existing tax law by
expanding the definition of
actions not subject to
Federal, State, or local
taxation under the Alaska
Native Claims Settlement Act.
These changes constituted a
revenue measure in the
constitutional sense because
they would have had a direct
impact on Federal revenues.
H. Res. 545, Mr. Archer, September On September 25, 1996, the
27, 1996. Senate passed S. 1311, the
National Physical Fitness and
Sports Foundation
Establishment Act. Section 2
of the bill would have waived
the application of certain
rules governing recognition of
tax-exempt status for the
foundation established under
this legislation. This
exemption constituted a
revenue measure in the
constitutional sense because
it would have had a direct
impact on Federal revenues.
H. Res. 402, Mr. Shaw, April 16, On January 26, 1996, the Senate
1996. passed S. 1463, to amend the
Trade Act of 1974. The bill
would have changed the
authority and procedure for
investigations by the ITC for
certain domestic agricultural
products. Such investigations
are a predicate necessary for
achieving access to desired
trade remedies that the
President may order, such as
tariff adjustments, tariff-
rate quotas, quantitative
restrictions, or negotiation
of trade agreements to limit
imports. By creating a new
basis and mechanism for import
restrictions under authority
granted to the President, the
bill constituted a revenue
measure in the constitutional
sense because it would have
had a direct impact on customs
revenues.
H. Res. 387, Mr. Crane, March 21, On February 1, 1996, the Senate
1996. passed S. 1518, repealing the
Tea Importation Act of 1897.
Under existing law in 1996, it
was unlawful to import
substandard tea, except as
provided in the HTS. Changing
import restrictions
constituted a revenue measure
in the constitutional sense
because it would have had a
direct impact on customs
revenues.
103d Congress:
H. Res. 577, Mr. Gibbons, October On October 3, 1994, the Senate
7, 1994. passed S. 1216, the Crow
Boundary Settlement Act of
1994. The bill would have
overridden existing tax law by
exempting certain payments and
benefits from taxation. These
exemptions constituted a
revenue measure in the
constitutional sense because
they would have had a direct
impact on Federal revenues.
H. Res. 518, Mr. Gibbons, August On July 20, 1994, the Senate
12, 1994. passed H.R. 4554, the
Agriculture and Rural
Development Appropriation for
fiscal year 1995, with
amendments. Senate amendment
83 would have provided
authority for the Food and
Drug Administration to collect
fees to cover the costs of
regulation of products under
their jurisdiction. However,
these fees were not limited to
covering the cost of specified
regulatory activities, and
would have been charged to a
broad cross-section of the
public (rather than been
limited to those who would
have benefitted from the
regulatory activities) to fund
the cost of the FDA's
activities generally. These
fees constituted a revenue
measure in the constitutional
sense because they were not
based on a direct relationship
between their level and the
cost of the particular
government activity for which
they would have been assessed,
and would have had a direct
impact on Federal revenues.
H. Res. 487, Mr. Gibbons, July 21, On May 25, 1994, the Senate
1994. passed S. 1030, the Veterans
Health Programs Improvement
Act of 1994. A provision in
the bill would have exempted
from taxation certain payments
made on behalf of participants
in the Education Debt
Reduction Program. This
provision constituted a
revenue measure in the
constitutional sense because
it would have had a direct
impact on Federal revenues.
H. Res. 486, Mr. Gibbons, July 21, On May 29, 1994, the Senate
1994. passed S. 729, to amend the
Toxic Substances Control Act.
Title I of the bill included
several provisions to prohibit
the importation of specific
categories of products which
contained more than specified
quantities of lead. By
establishing these import
restrictions, the bill
constituted a revenue measure
in the constitutional sense
because it would have had a
direct impact on customs
revenues.
H. Res. 479, Mr. Rangel, July 14, On June 22, 1994, the Senate
1994. passed H.R. 4539, the
Treasury, Postal Service, and
General Government
Appropriation for fiscal year
1995, with amendments. Senate
amendment 104 would have
prohibited the Treasury from
using appropriations to
enforce the Internal Revenue
Code requirement for the use
of undyed diesel fuel in
recreational motorboats. This
prohibition therefore
constituted a revenue measure
in the constitutional sense
because it would have had a
direct impact on Federal
revenues.
102d Congress:
H. Res. 373, Mr. Rostenkowski, On August 1, 1991, the Senate
February 25, 1992. passed S. 884 amended, the
Driftnet Moratorium
Enforcement Act of 1991; This
legislation would require the
President to impose economic
sanctions against countries
that fail to eliminate large-
scale driftnet fishing.
Foremost among the sanction
provisions are those which
impose a ban on certain
imports into the United States
from countries which continue
to engage in driftnet fishing
on the high seas after a
certain date. These changes in
our tariff laws constitute a
revenue measure in the
constitutional sense, because
they would have a direct
effect on customs revenues.
H. Res. 267, Mr. Rostenkowski, On February 20, 1991, the
October 31, 1991. Senate passed S. 320, to
reauthorize the Export
Administration Act of 1979.
This legislation contains
several provisions which
impose, or authorize the
imposition of, a ban on
imports into the United
States. Among the provisions
containing import sanctions
are those relating to certain
practices by Iraq, the
proliferation and use of
chemical and biological
weapons, and the transfer of
missile technology. These
changes in our tariff laws
constitute a revenue measure
in the constitutional sense,
because they would have a
direct effect on customs
revenues.
H. Res. 251, Mr. Russo, October 22, On July 11, 1991, the Senate
1991. passed S. 1241, the Violent
Crime Act of 1991. This
legislation contains several
amendments to the Internal
Revenue Code. Section 812(f)
provides that the police corps
scholarships established under
the bill would not be included
in gross income for tax
purposes. In addition,
sections 1228, 1231, and 1232
each make amendments to the
Tax Code with respect to
violations of certain firearms
provisions. Finally, Title Vll
amends section 922 of Title
VIII of the U.S. Code, making
it illegal to transfer, import
or possess assault weapons.
These changes in our tariff
and tax laws constitute
revenue measures in the
constitutional sense, because
they would have an immediate
impact on revenues anticipated
by U.S. Customs and the
Internal Revenue Services.
101st Congress:
H. Res. 287, Mr. Cardin, November On August 4, 1989, the Senate
9, 1989. passed S. 686, the Oil
Pollution Liability and
Compensation Act of 1989. This
legislation contained a
provision which would have
allowed a credit against the
oil spill liability tax for
amounts transferred from the
Trans-Alaska Pipeline Trust
Fund to the Oil Spill
Liability Trust Fund.
H. Res. 177, Mr. Rostenkowski, June On Apr. 19, 1989, the Senate
15, 1989. passed S. 774, the Financial
Institution Reform, Recovery
and Enforcement Act of 1989.
This legislation would create
two corporations to administer
the financial assistance under
the bill: the Resolution Trust
Corporation and the Resolution
Financing Corporation. S. 774
would have conferred tax-
exempt status to these two
corporations. Without these
two tax provisions, these two
corporations would be taxable
entities under the Federal
income tax.
100th Congress:
H. Res. 235, Mr. Rostenkowski, July On Mar. 30, 1987, the Senate
30, 1987. passed S. 829, legislation
which would authorize
appropriations for the ITC,
the U.S. Customs Service, and
the Office of the U.S. Trade
Representative for fiscal year
1988, and for other purposes.
In addition, the bill
contained a provision relating
to imports from the Soviet
Union which amends provisions
of the Tariff Act of 1930.
H. Res. 474, Mr. Rostenkowski, June On 0ct. 6, 1987, the Senate
16, 1988 (see also H.R. 3391). passed S. 1748, legislation
which would prohibit the
importation into the United
States of all products from
Iran. (The House passed H.R.
3391, which included similar
provisions, on 0ct. 6, 1987.)
H. Res. 479, Mr. Rostenkowski, June On May 13, 1987, the Senate
21, 1988 (see also H.R. 2792 and passed S. 727, legislation
H.R. 4333). which would clarify Indian
treaties and Executive orders
with respect to fishing
rights. This legislation dealt
with the tax treatment of
income derived from the
exercise of Indian treaty
fishing rights. (The House
passed H.R. 2792, which
included similar provisions,
on June 20, 1988, under
suspension of the rules and
was enacted into law as part
of P.L. 100-647, H.R. 4333.)
H. Res. 544, Mr. Rostenkowski, On Sept. 9, 1988, the Senate
September 23, 1988 (see also H.R. passed S. 2662, the Textile
1154). and Apparel Trade Act of 1988.
This legislation would impose
global import quotas on
textiles and footwear
products.
H. Res. 552, Mr. Rostenkowski, On Sept. 9, 1988, the Senate
September 28, 1988. passed S. 2763, the Genocide
Act of 1988. This legislation
contained a ban on the
importation of all oil and oil
products from Iraq.
H. Res. 603, Mr. Rostenkowski, On Mar. 30, 1988, the Senate
October 21, 1988. passed S. 2097, the Uranium
Mill Tailings Remedial Action
Amendments of 1987. This
legislation would establish a
Federal fund to assist in the
financing of reclamation and
other remedial action at
currently active uranium and
thorium processing sites and
would increase the demand for
domestic uranium. The fund
would be financed in part by
what are called ``mandatory
fees'' which are equal to $22
per kilogram for uranium
contained in fuel assemblies
initially loaded into civilian
nuclear power reactors during
calendar years 1989-1993. In
addition, S. 2097 would impose
charges on domestic utilities
that use foreign-source
uranium in new fuel assemblies
loaded in their nuclear
reactors.
H. Res. 604, Mr. Rostenkowski, On Aug. 8, 1988, the Senate
October 21, 1988. passed H.R. 1315, legislation
which would authorize
appropriations for the Nuclear
Regulatory Commission for
fiscal years 1988 and 1989.
Title IV of the legislation
would, among other things,
establish a Federal fund to
assist in the financing of
reclamation and other remedial
action at currently active
uranium and thorium processing
sites and would assist the
domestic uranium industry by
increasing the demand for
domestic uranium. The fund
would be financed in part by
what are called ``mandatory
fees'' equal to $72 per
kilogram of uranium contained
in fuel assemblies initially
loaded into civilian nuclear
power reactors on or after
Jan. 1, 1988. These fees would
be paid by licensees of
civilian nuclear power
reactors and would be in place
until $1 billion had been
raised.
99th Congress:
H. Res. 283, Mr. Rostenkowski, On Sept. 26, 1985, the Senate
October 1, 1985. passed S. 1712, legislation
which would extend the 16-
cents-per-pack cigarette
excise tax rate for 45 days,
through Nov. 14, 1985. (The
House passed H.R. 3452, which
included a similar extension,
on Sept. 30, 1985.)
H. Res. 562, Mr. Rostenkowski, The Senate passed S. 638,
September 25, 1986. legislation to provide for the
sale of Conrail to the Norfolk
Southern Railroad. The
legislation contained numerous
provisions relating to the tax
treatment of the sale of
Conrail.
98th Congress:
H. Res. 195, Mr. Rostenkowski, June On Apr. 21, 1983, the Senate
17, 1983. passed S. 144, a bill to
insure the continued expansion
of international market
opportunities in trade, trade
in services and investment for
the United States, and for
other purposes.
------------------------------------------------------------------------

F. Prerogative Under the Rules of the House Over ``Revenue Measures
Generally''

In the House of Representatives, tax legislation is
initiated by the Committee on Ways and Means. The Committee's
exclusive prerogative to report revenue measures generally'' is
provided by Rule X(1)(s) of the Rules of the House of
Representatives. The jurisdiction of the Committee on Ways and
Means under Rule X(1)(s) is protected through theexercise of
Rule XXI(5)(a) which states:

A bill or joint resolution carrying a tax or tariff
measure may not be reported by a committee not having
jurisdiction to report tax or tariff measures, and an
amendment in the House or proposed by the Senate
carrying a tax or tariff measure shall not be in order
during the consideration of a bill or joint resolution
reported by a committee not having that jurisdiction. A
point of order against a tax or tariff measure in such
a bill, joint resolution, or amendment thereto may be
raised at any time during pendency of that measure for
amendment.

Based on the precedents of the House, especially those
involving Rule XXI(5)(a), the following statements can be made
concerning points of order made under the rule.
1. Timeliness.--The point of order can be raised at any
point during consideration of the bill. However, that section
of the bill in which the ``tax or tariff'' provision lies must
either have been previously read or currently open for
amendment. A point of order may not be raised after the
Committee of the Whole has risen and reported the bill to the
House. A point of order against an amendment must be made prior
to its adoption.
2. Effect.--If a point of order is sustained, the effect is
that the provision in the bill or amendment is automatically
deleted.
3. Substance over form.--A provision need not involve an
amendment to the Internal Revenue Code or the Harmonized Tariff
Schedule in order to be determined to be a ``tax or tariff''
provision.
4. Revenue decreases and increases.--A provision need not
raise revenue in order to be found to be a ``tax or tariff
measure.'' Provisions which would have the effect of decreasing
revenues are also covered by the rule. Similarly, provisions
which could have a revenue effect have been determined to be
covered by the rule.
The following is a detailed listing of each of the
occasions on which points of order relating to the rule have
been sustained:

G. Points of Order--House Rule XXI, Clause 5, Paragraph (A)
Chronological List

September 8, 1999

H.R. 2684, U.S. Departments of Veterans Affairs and Housing
and Urban Development Appropriations For 2000
A point of order was raised against an amendment offered by
Representative Edwards, which would have offset an increase in
funding for veterans' health care by postponing the
implementation of a capital gains tax cut. The chair ruled that
the amendment constituted legislation in violation of Rule XXI,
clause 2(c), and, in addition, constituted a tax measure in
violation of Rule XXI, clause 5(a). The point of order was
sustained, and the amendment ruled not in order. [106-1, p.
H7923]

September 3, 1997

H.R. 2159, Foreign Operations Appropriations for Fiscal
Year 1998
A point of order was raised against section 539 of the
bill, which would have restricted the President's ability to
issue an executive order lifting import sanctions against
Yugoslavia (Serbia). The Chair ruled that since current law
allowed the President to waive the application of certain
sanctions, including import prohibitions which affect tariff
collections, the provision in question was a tariff measure
within the meaning of Rule XXI, clause 5(b). The point of order
was sustained, and the provision stricken from the bill. [105-
1, p. H 6731]

July 17, 1996

H.R. 3756, Treasury, Postal Service, and General Government
Appropriations Act of 1997
A point of order was raised against an amendment which
prohibited the use of funds by the United States Customs
Service to take any action that allowed certain imports into
the United States from the People's Republic of China. The
point of order was sustained. [104-2, p. H 7708]

May 9, 1995

H.R. 1361, Coast Guard Authorization
A point of order was raised against an amendment which
increased certain fees for large foreign-flag cruise ships. The
Chair ruled that by increasing the fees charged by the Coast
Guard for inspecting large foreign-flag cruise ships by an
unspecified amount in order to offset a decrease in fees for
other vessels, the amendment attenuated the relationship
between the amount of the fee and the cost of the particular
government activity for which it was assessed. Therefore the
increased fee qualified as a tax or tariff within the meaning
of Rule XXI, clause 5(b). The point of order was sustained, and
the amendment ruled out of order. [1-4-1, p. H 4593]

June 15, 1994

H.R. 4539, Treasury, Postal Service, and General Government
Appropriation for Fiscal Year 1995
A point of order was raised against section 527 of the
bill, which would have amended the HTS to create a new tariff
classification. The new classification would have changed the
rate of duty on the import of certain fabrics intended for use
in the manufacture of hot air balloons, thus having direct
impact on customs revenues. The point of order was conceded and
sustained, and the provision was stricken from the bill. [103-
2, p. H 4531]

September 16, 1992

H.R. 5231, The National Competitiveness Act of 1992
A point of order was raised against an amendment offered by
Representative Walker. The bill was reported solely from the
Committee on Science and Technology and amended the Internal
Revenue Code to provide, inter alia, changes in the tax
treatment of capital gains.
The Chair sustained the point of order without elaboration.
[H102, p. H8621]

October 23, 1990

H.R. 5021, Department of Commerce, Justice and State, the
Judiciary and Related Agencies Appropriations Act,
1991
A point of order was raised against amendment 139 which
increased the rate of fees paid to the Securities and Exchange
Commission at the time of filing a registration statement. The
Chair ruled that since the amendment provided that the
increased level of fees would be deposited in the Treasury, the
fee involved was in reality a tax and the revenues were to be
used to defray general governmental costs. The point of order
was conceded and sustained. [101-2, p. H 11412]

July 13, 1990

H.R. 5241, Treasury, Postal Service and General Government
Appropriations Act of 1991
A point of order was raised against section 528 which
prohibited that ``no funds appropriated'' would be used to
impose or assess any tax under section 4181 of the Internal
Revenue Code relating to the excise tax on the manufacture of
firearms. The point of order was conceded and sustained. [101-
2, p. H 4692]

July 13, 1990

H.R. 5241, Treasury, Postal Service and General Government
Appropriations Act of 1991
A point of order was raised against section 524 which
prohibited the Internal Revenue Service from enforcing rules
governing the antidiscrimination rules of the exclusion for
employer provided health-care plans (section 89 of the Internal
Revenue Code). The point of order was conceded and sustained.
[101-2, p. H 4692]

October 5, 1989

H.R. 3299, Omnibus Budget Reconciliation Act of 1989
A point of order was raised against section 3201 which
imposed fees on the filing of certain forms required to be
filed annually in connection with maintaining pension and
benefit plans. The point of order was sustained with the Chair
ruling that the revenue raised funded ``general government
activity.'' [101-1, p. H 6662]

October 4, 1989

H.R. 3299, Omnibus Budget Reconciliation Act of 1989
A point of order was raised against section 3156 which
imposed a ``Termination Fee.'' Under the provision of the bill,
an employer who terminated a pension plan in a standard
termination was required to pay a $200-per-participant fee to
the Pension Benefit Guaranty Corporation (PBGC), the Federal
insurance agency established to insure defined benefit pension
plans against insolvency. The point of order was conceded and
sustained. [101-1, p. H 6621]

October 4, 1989

H.R. 3299, Omnibus Budget Reconciliation Act of 1989
A point of order was raised against section 3131(b) which
exempted multi-employer pension plans from the full funding
limits of the Internal Revenue Code, section 412(c)(7). This
provision directly amended the Internal Revenue Code to allow
the deductibility of contributions to a multi-employer pension
plan in excess of the full funding limit. The point of order
was conceded and sustained. [101-1, p. H 6622]

October 4, 1989

H.R. 3299, Omnibus Budget Reconciliation Act of 1989
A point of order was raised against section 7002 which
imposed an annual fee of $1 per acre on the holder of Outer
Continental Shelf leases. This fee has been designated to
offset the costs of ocean related environmental research,
assessment, and protection programs. The point of order was
sustained with the Chair stating that ``a provision raising
revenue to finance general government functions improperly
characterized as a tax within the jurisdiction of Clause 5(b)
of Rule XXI. [101-1, p. H 6610]

October 4,1989

H.R. 3299, Omnibus Budget Reconciliation Act of 1989
A point of order was raised against section 7002 which
imposed a fee of $20 per passenger on vessels engaged in U.S.
cruise trade or which offer off-shore gambling. The proceeds of
this fee were to be deposited in both the Harbor Maintenance
Trust Fund and the Treasury's general fund. The point of order
was conceded and sustained. [101-1, p. H 6620]

September 30, 1988

H.R. 4637, Conference Agreement to accompany the Foreign
Operations, Export Financing and Related Programs
Appropriations Act of 1989
A point of order was raised against the motion to concur in
the Senate amendment No. 176 which provided that S. 2848
(Sanctions Against Iraqi Chemical Weapons Use Act), be added to
the bill. The point of order was conceded and sustained. [100-
2, p. H 9236]

June 25, 1987

H.R. 3545, Budget Reconciliation Act of 1987
A point of order was raised against the section of the bill
providing that ``all earnings and distributions'' from the
Enjebi Community Trust Fund, ``shall not be subject to any form
of Federal, State, or local taxation.'' The point of order was
conceded and sustained. [100-1, p. H 5539-40]

August 1, 1986

H.R. 5294, Appropriations, Treasury, Postal Service and
General Government Appropriations, 1987
A point of order was raised against section 103 which
denied funds to the Internal Revenue Service to impose vesting
requirements for qualified pension funds more stringent than 4/
40. As a result, legally collectible taxes on employer
contributions to such plans would be indefinitely deferred. The
point of order was conceded and sustained. [99-2, p. H 5311]

August 1, 1986

H.R. 5294, Appropriations, Treasury, Postal Service and
General Government Appropriations, 1987
A point of order was raised against section 3 which
prohibited the use of funds to implement regulations issued by
the Department of the Treasury to implement section 274(d) of
the Internal Revenue Code relating to the duty imposed on
taxpayers to substantiate deductibility of certain expenses
relating to travel, gifts, and entertainment.
The Chair sustained the point of order stating that a
limitation otherwise in order under Clause 2(c), of House Rule
XXI which ``effectively and inherently either preclude[s] the
IRS from collecting revenues otherwise due to be [owed] under
provision of the Internal Revenue Code or require[s] the
collection of revenue not legally due and owing constitutes a
tax provision within the meaning of Rule XXI, Clause 5(b).''
The Chair also noted that when the point of order was
raised that under the rule the point of order against the
provision could be raised at any point during the consideration
of the bill. [99-2, p. H 5310]

October 24, 1986

H.R. 3500, Budget Reconciliation Act of 1985
A point of order was raised against section 3113. The
provision in the reconciliation bill reported from the Budget
Committee contained a recommendation from the Committee on
Education and Labor to exclude certain interest on obligations
to Student Loan Marketing Association from Application of
Internal Revenue Code (IRC), section 265 which denies a
deduction for certain expenses and interest relating to the
production of tax-exempt income. The point of order was
sustained. [99-1, p. H 5310]

October 24, 1985

H.R. 3500, Budget Reconciliation Act of 1985
A point of order was raised against section 6701 which had
been reported from the Committee on the Budget containing a
recommendation of the Committee on Merchant Marine and
Fisheries. Section 6701 expanded tax benefits available to ship
owners through the ``capital construction fund'' (section 7518
of the Internal Revenue Code), by permitting repatriation of
foreign-source income to avoid U.S. taxes and expanding the
definition of vessels eligible to establish such tax-exempt
funds. [99-1, p. H 9189]

July 26, 1985

H.R. 3036, Appropriations, Treasury, Postal Service, and
General Government Appropriation, 1986
A point of order was raised against section 106 which
prohibited the use of funds to implement or enforce regulations
imposing or collecting a tax on the interest deferral from
entrance or accommodation fees paid by elderly residents of
continuing care facilities (section 7872 of the Internal
Revenue Code). The Chair sustained the point of order against
the provision as a tax provision within the meaning of House
Rule XXI, Clause 5(b). [99-1, p. H 6418]

July 11, 1985

H.R. 1555, International Security and Development Act of
1985
A point of order was raised against section 1208 which
denied trade benefits to Afghanistan, provided for the denial
of most favored nation status to Afghanistan and denied trade
credits to Afghanistan. The point of order was conceded and
sustained. [99-1, p. H 5489]

June 4, 1985

H.R. 1460, Anti-Apartheid Act of 1985
A point of order was raised against an amendment to
prohibit the entry of South African Krugerrands or gold coins
into the customs territory of the United States unless uniform
5 percent fee were paid. The point of order was sustained on
the grounds that the fee was equivalent to a tariff uniform
charge imposed at ports of entry with proceeds deposited in the
Treasury. [99-1, p. H 3762]

September 12, 1984

H.R. 5798, conference report to accompany the
Appropriations, Treasury, Postal Service, Executive
Office of the President and certain independent
agencies Appropriation, 1985
A point of order was raised against a Senate amendment, No.
92 which amended the existing customs law under the Tariff Act
of 1930 with respect to seizures and forfeitures of property by
the Customs Service. The point of order was conceded and
sustained. [98-2, p. H 9407]

September 12, 1984

H.R. 5798, conference report to accompany the
Appropriations, Treasury, Postal Service, Executive
Office of the President and certain independent
agencies Appropriation, 1985
A point of order was raised against a Senate amendment, No.
26 which amended the tariff schedule of the United States
(TSUS) to provide duty-free importation of a telescope for the
University of Arizona. The point of order was conceded and
sustained. [98-2, p. H 9396]

September 12, 1984

H.R. 5798, conference report to accompany the
Appropriations, Treasury, Postal Service, Executive
Office of the President and certain independent
agencies Appropriation, 1985
A point of order was raised against a Senate amendment, No.
24 which provided that ``none of the funds appropriated by this
act or any other act'' shall be used to impose of assess the
manufacturer's excise tax on sporting goods. The point of order
specifically stated that the term ``tax'' and ``tariff'' under
House Rule XXI, Clause 5(b), included provisions such as these
contained in the amendment which would result less revenue
spent than under the operation of existing law. The point of
order was conceded and sustained. [98-2, p. H 9395-9396]

October 27, 1983

H.R. 4139, conference report to accompany the
Appropriations Treasury, Postal Service, Executive
Office of the President and certain independent
agencies Appropriation, 1984
The Chair sustained a point of order against section 511
which would have prohibited the Customs Service from enforcing
a provision of law permitting agricultural products to enter
the United States duty-free under the CBI. The Chair ruled that
the effect of the provision was to cause duties on certain
imports to be imposed where none is required and to require
collections of revenue contrary to existing tariff laws and
that, as a result, section 511 was a tariff provision rather
than a limitation of appropriated funds. [98-1, p. H 8717]

September 21, 1983

H.R. 1036, Community Renewal Employment Act
The Chair sustained a point of order against a motion to
recommit a bill to a committee without jurisdiction over
revenue measures (the Committee on Education and Labor), and to
report the bill back to the House with tax provisions relating
to ``enterprise zones.'' The motion was ruled to violate House
Rule XVI, Clause 7, and House Rule XXI Clause 5(b). [98-1, p. H
7244]

H. Restrictions on ``Federal Income Tax Rate Increases''

House Rule XXI, clause 5(b) and (c) prohibit retroactive
Federal income tax rate increases and require a supermajority
[3/5] vote for any bill containing a prospective Federal income
tax rate increase. The wording of the rule and its legislative
history make it clear that the rule applies only to increases
in specific statutory rates in the Internal Revenue Code and
not to provisions merely because they raise revenue or
otherwise modify the income tax base.

Appendix II. Historical Note

The Committee on Ways and Means was first established as an
ad hoc committee in the first session of the First Congress, on
July 24, 1789. Representative Fitzsimons, from Pennsylvania, in
commenting on the report of a select committee concerning
appropriations and revenues, pointed out the desirability of
having a committee to review the expenditure needs of the
Government and the resources available, as follows:
The finances of America have frequently been mentioned in
this House as being very inadequate to the demands. I have
never been of a different opinion, and do believe that the
funds of this country, if properly drawn into operation, will
be equal to every claim. The estimate of supplies necessary for
the current year appears very great from a report on your
table, and which report has found its way into the public
newspapers. I said, on a former occasion, and I repeat it now,
notwithstanding what is set forth in the estimate, that a
revenue of $3 million in specie, will enable us to provide
every supply necessary to support the Government, and pay the
interest and installments on the foreign and domestic debt. If
we wish to have more particular information on these points, we
ought to appoint a Committee on Ways and Means, to whom, among
other things, the estimate of supplies may be referred, and
this ought to be done speedily, if we mean to do it this
session.
After discussion, the motion was agreed to and a committee
consisting of one Member from each State (North Carolina and
Rhode Island had not yet ratified the Constitution) was
appointed as follows: Messrs. Fitzsimons (Pennsylvania), Vining
(Delaware), Livermore (New Hampshire), Cadwalader (New Jersey),
Laurance (New York), Wadsworth (Connecticut), Jackson
(Georgia), Gerry (Massachusetts), Smith (Maryland), Smith
(South Carolina), and Madison (Virginia).
While there does not appear to be any direct relationship,
it is interesting to note that the appointment of this ad hoc
committee came within a few weeks after the House, in Committee
of the Whole, had spent a good part of the months of April,
May, and June in wrestling with the details involved in writing
bills ``for laying a duty on goods, wares, and merchandises
imported into the United States'' and for imposing duties on
tonnage. Tariffs, of course, became a prime revenue source for
the new government.
However, the results of this ad hoc committee are not
clear. It existed for a period of only 8 weeks, being dissolved
on September 17, 1789, with the following order:
That the Committee on Ways and Means be discharged from
further proceeding on the business referred to them, and that
it be referred to the Secretary of the Treasury to report
thereon.
It has also been suggested by one student that the
Committee was dissolved because Alexander Hamilton had become
Secretary of the newly created U.S. Department of the Treasury,
and thus it was presumed that the U.S. Department of the
Treasury could provide the necessary machinery for developing
information which would be needed. During the next 6 years
there was no Committee on Ways and Means or any other standing
committee for the examination of estimates. Rather, ad hoc
committees were appointed to draw up particular pieces of
legislation on the basis of decisions made in the Committee of
the Whole House. On November 13, 1794, a rule was adopted
providing that:

All proceedings touching appropriations of money
shall be first moved and discussed in a Committee on
the Whole House.

In the next Congress historians have suggested that the
House was determined to curtail Secretary Hamilton's influence
by first setting up a Committee on Ways and Means and requiring
that Committee to submit a report on appropriations and revenue
measures before consideration in the Committee of the Whole
House. It was also said that this Committee on Ways and Means
was put on a more or less standing basis since such a committee
appeared at some point in every Congress until it was made a
permanent committee.
In the first session of the 7th Congress, Tuesday, December
8, 1801, a resolution was adopted as follows:

Resolved, That a standing Committee on Ways and Means
be appointed, whose duty it shall be to take into
consideration all such reports of the Treasury
Department, and all such propositions, relative to the
revenue as may be referred to them by the House; to
inquire into the state of the public debt, of the
revenue, and of the expenditures; and to report, from
time to time, their opinion thereon.

The following Members were appointed: Messrs. Randolph
(Virginia), Griswold (Connecticut), Smith (Vermont), Bayard
(Delaware), Smilie (Pennsylvania), Read (Massachusetts),
Nicholson (Maryland), Van Rensselaer (New York), Dickson
(Tennessee).
On Thursday, January 7, 1802, the House agreed to standing
rules which, among other things, provided for standing
committees, including the Committee on Ways and Means. The
relevant part of the rules in this respect read as follows:
A Committee on Ways and Means, to consist of seven Members;

* * * * * * *

It shall be the duty of the said Committee on Ways and
Means to take into consideration all such reports of the U.S.
Department of the Treasury, and all such propositions relative
to the revenue, as may be referred to them by the House; to
inquire into the state of the public debt, of the revenue, and
of the expenditures, and to report, from time to time, their
opinion thereon; to examine into the state of the several
public departments, and particularly into the laws making
appropriations of moneys, and to report whether the moneys have
been disbursed conformably with such laws; and also to report,
from time to time, such provisions and arrangements, as may be
necessary to add to the economy of the departments, and the
accountability of their officers.
It has been said that the jurisdiction of the Committee was
so broad in the early 19th century that one historian described
it as follows:

It seemed like an Atlas bearing upon its shoulders
all the business of the House.

The jurisdiction of the Committee remained essentially the
same until 1865 when the control over appropriations was
transferred to a newly created Committee on Appropriations and
another part of its jurisdiction was given to a newly created
Committee on Banking and Currency. This action followed rather
extended discussion in the House, too lengthy to review here.
During the course of that discussion, however, the
following observations are of some historical interest.
Representative Cox, who was handling the motion to divide the
Committee, gave a very picturesque discussion of the many
varied and heavy duties which had fallen on the Committee over
the years. He observed:

And yet, sir, powerful as the Committee is
constituted, even their powers of endurance, physical
and mental, are not adequate to the great duty which
has been imposed by the emergencies of this historic
time. It is an old adage, that ``whoso wanteth rest
will also want of might''; and even an Olympian would
faint and flag if the burden of Atlas is not relieved
by the broad shoulders of Hercules.

He continued:

I might give here a detailed statement of the amount
of business thrown upon that Committee since the
commencement of the war. But I prefer to append it to
my remarks. Whereas before the war we scarcely expended
more than $70 million a year, now, during the five
sessions of the last two Congresses, there has been an
average appropriation of at least $800 million per
session. The statement which I hold in my hand shows
that during the first and extra session of the 37th
Congress there came appropriation bills from the
Committee on Ways and Means amounting to
$226,691,457.99. I say nothing now of the loan and
other fiscal bills emanating from that Committee. * * *
During the present session I suppose it would be a fair
estimate to take the appropriations of the last session
of the 37th Congress, say $900 million.
These are appropriation bills alone. They are
stupendous, and but poorly symbolize the immense labors
which the internal revenue, tariff, and loan bills
imposed on the Committee. * * * And this business of
appropriations is perhaps not one-half of the labor of
the Committee. There are various and important matters
upon which they act, but upon which they never report.
Their duties comprehend all the varied interests of the
United States; every element and branch of industry,
and every dollar or dime of value. They are connected
with taxation, tariffs, banking, loan bills, and ramify
to every fiber of the body-politic. All the springs of
wealth and labor are more or less influenced by the
action of this Committee. Their responsibility is
immense, and their control almost imperial over the
necessities, comforts, homes, hopes, and destinies of
the people. All the values of the United States, which
in the census of 1860 (page 194) amount to nearly $17
billion, or, to be exact, $16,159,616,068, are affected
by the action of that Committee, even before their
action is approved by the House. Those values fluctuate
whenever the head of the Committee on Ways and Means
rises in his place and proposes a measure. The price of
every article we use trembles when he proposes a gold
bill or a loan bill, or any bill to tax directly or
indirectly. * * *
* * * the interests connected with these economical
questions are of all questions those most momentous for
the future. Parties, statesmanship, union, stability,
all depend upon the manner in which these questions are
dealt with.

Representative Morrill (who was subsequently appointed
chairman of the Committee on Ways and Means in the succeeding
Congress, and who still later became chairman of the Senate
Committee on Finance after he became a Senator) observed as
follows:

I am entirely indifferent as to the disposition which
shall be made of this subject by the House. So far as I
am myself concerned, I have never sought any position
upon any committee from the present or any other
Speaker of the House, and probably never shall. I have
no disposition to press myself hereafter for any
position. In relation to the proposed division of the
Committee on Ways and Means, the only doubt that I have
is the one expressed by my colleague on that Committee,
Representative Stevens, in regard to the separation of
the questions of revenue from those relating to
appropriations. In ordinary times of peace I should
deem it almost indispensable and entirely within their
power that this Committee should have the control of
both subjects, in order that they might make both ends
meet, that is, to provide a sufficient revenue for the
expenditures. That reason applies now with greater
force; but it may be that the Committee is overworked.
It is true that for the last 3 or 4 years the labors of
the Committee on Ways and Means have been incessant,
they have labored not only days but nights; not only
weekends but Sundays. If gentlemen suppose that the
Committee have permitted some appropriations to be
reported which should not have been permitted they
little understand how much has been resisted.

The influence the Committee came not only from the nature
of its jurisdiction but also because for many years the
chairman of the Committee was also ad hoc majority Floor leader
of the House.
When the revolt against Speaker Cannon took place, and the
Speaker's powers to appoint the Members of committees were
curtailed, the Majority Members on the Committee on Ways and
Means became the Committee on Committees. Subsequently, this
power was disbursed to the respective party caucuses, beginning
in the 94th Congress.
Throughout its history, many famous Americans have served
on the Committee on Ways and Means. The long and distinguished
list includes 8 Presidents of the United States, 8 Vice
Presidents, 4 Justices of the Supreme Court, 34 Cabinet
members, and quite interestingly, 21 Speakers of the House of
Representatives. This latter figure represents nearly one-half
of the 51 Speakers who have served since 1789 through the end
of the 107th Congress. See the alphabetical list which follows
for names.

Major positions held by former members of the Committee on Ways and
Means

President of the United States:
George H. W. Bush, Texas
Millard Fillmore, New York
James A. Garfield, Ohio
Andrew Jackson, Tennessee
James Madison, Virginia
William McKinley, Jr., Ohio
James K. Polk, Tennessee
John Tyler, Virginia
Vice President of the United States:
John C. Breckinridge, Kentucky
George H. W. Bush, Texas
Charles Curtis, Kansas
Millard Fillmore, New York
John N. Garner, Texas
Elbridge Gerry, Massachusetts
Richard M. Johnson, Kentucky
John Tyler, Virginia
Justice of the Supreme Court:
Philip P. Barbour, Virginia
Joseph McKenna, California
John McKinley, Alabama
Fred M. Vinson, Kentucky (Chief Justice)
Speaker of the House of Representatives:
Nathaniel P. Banks, Massachusetts
Philip P. Barbour, Virginia
James G. Blaine, Maine
John G. Carlisle, Kentucky
Langdon Cheves, South Carolina
James B. (Champ) Clark, Missouri
Howell Cobb, Georgia
Charles F. Crisp, Georgia
John N. Garner, Texas
John W. Jones, Virginia
Michael C. Kerr, Indiana
Nicholas Longworth, Ohio
John W. McCormack, Massachusetts
James K. Polk, Tennessee
Henry T. Rainey, Illinois
Samuel J. Randall, Pennsylvania
Thomas B. Reed, Maine
Theodore Sedgwick, Massachusetts
Andrew Stevenson, Virginia
John W. Taylor, New York
Robert C. Winthrop, Massachusetts
Cabinet Member:
Secretary of State:
James G. Blaine, Maine
William J. Bryan, Nebraska
Cordell Hull, Tennessee \3\
---------------------------------------------------------------------------
\3\ Recipient of Nobel Peace Prize in 1945.
---------------------------------------------------------------------------
Louis McLean, Delaware
John Sherman, Ohio
Secretary of the Treasury:
George W. Campbell, Tennessee
John G. Carlisle, Kentucky
Howell Cobb, Georgia
Thomas Corwin, Ohio
Charles Foster, Ohio
Albert Gallatin, Pennsylvania
Samuel D. Ingham, Pennsylvania
Louis McLean, Delaware
Ogden L. Mills, New York
John Sherman, Ohio
Philip F. Thomas, Maryland
Fred M. Vinson, Kentucky
Attorney General:
James P. McGranery, Pennsylvania
Joseph McKenna, California
A. Mitchell Palmer, Pennsylvania
Caesar A. Rodney, Delaware
Postmaster General:
Samuel D. Hubbard, Connecticut
Cave Johnson, Tennessee
Horace Maynard, Tennessee
William L. Wilson, West Virgina
Secretary of the Navy:
Thomas W. Gilder, Virginia
Hilary A. Herbert, Alabama
Victor H. Metcalf, California
Claude A. Swanson, Virginia
Secretary of the Interior:
Rogers C. B. Morton, Maryland
Jacob Thompson, Mississippi
Secretary of Commerce and Labor:
Victor H. Metcalf, California
Secretary of Commerce:
Rogers C. B. Morton, Maryland
Secretary of Agriculture:
Clinton P. Anderson, New Mexico

Appendix III. Statistical Review of the Activities of the Committee on
Ways and Means

A. Number of Bills and Resolutions Referred to the Committee

As of the close of the 107th Congress on November 22, 2002,
there had been referred to the Committee a total of 1,941
bills, representing 27.6 percent of all the public bills
introduced in the House of Representatives.
The following table gives a more complete statistical
review since 1967.

TABLE 1.--NUMBER OF BILLS AND RESOLUTIONS REFERRED TO THE COMMITTEE, 90TH THROUGH 107TH CONGRESSES
----------------------------------------------------------------------------------------------------------------
Referred to
Introduced in Committee on Ways Percentage
House and Means
----------------------------------------------------------------------------------------------------------------
90th Congress....................................... 24,227 3,806 15.7
91st Congress....................................... 23,575 3,442 14.6
92d Congress........................................ 20,458 3,157 15.4
93d Congress........................................ 21,096 3,370 16.0
94th Congress....................................... 19,371 3,747 19.3
95th Congress....................................... 17,800 3,922 22.0
96th Congress....................................... 10,196 2,337 22.9
97th Congress....................................... 9,909 2,377 26.4
98th Congress....................................... 8,104 1,904 23.5
99th Congress....................................... 7,522 1,568 20.8
100th Congress...................................... 7,043 1,419 22.1
101st Congress...................................... 7,640 1,737 22.7
102d Congress....................................... 7,771 1,972 25.4
103d Congress....................................... 6,645 1,496 22.5
104th Congress...................................... 5,329 1,071 20.1
105th Congress...................................... 5,976 1,509 25.2
106th Congress...................................... 6,942 1,762 25.3
107th Congress...................................... 7,029 1,941 27.6
----------------------------------------------------------------------------------------------------------------

B. Public Hearings

In the course of the 107th Congress, the full Committee on
Ways and Means held public hearings on a total of 17 days,
including 7 days in the first session and 10 days in the second
session. Many of these hearings dealt with major subjects
including the President's fiscal year 2001 and 2002 budget
proposals, health and welfare issues, and the creation of the
U.S. Department of Homeland Security. The full Committee also
focused on such issues as legislation on welfare reform,
patient safety improvement, bipartisan trade promotion
authority, and TAA promotions.
The following table specifies the statistical data on the
number of days and witnesses published on each of the subjects
covered by public hearings in the full Committee during the
107th Congress.

TABLE 2.--PUBLIC HEARINGS CONDUCTED BY THE FULL COMMITTEE ON WAYS AND
MEANS
------------------------------------------------------------------------
Number of
Subject and Date -----------------------
Days Witnesses
------------------------------------------------------------------------
2001:
President's Tax Relief Proposals, Feb. 13... 1 4
President Bush's Trade Agenda, Mar. 7....... 1 1
Bush Administration's Health and Welfare 1 1
Priorities, Mar. 14........................
Social Security and Medicare Trustees' 2001 1 1
Annual Reports (held jointly with the
Senate Committee on Finance), Mar. 20......
Medicare Solvency, Mar. 20.................. 1 2
President's Tax Relief Proposals, Mar. 21... 1 13
Administration's Principles to Strengthen 1 1
and Modernize Medicare, July 19............
-----------------------
Total for 2001............................ 7 23
=======================
2002:
President's Fiscal Year 2003 Budget with 1 1
Treasury Secretary O'Neill, Feb. 5.........
President's 2003 Budget Proposals Featuring 1 1
HHS Secretary Thompson, Feb. 6.............
President's 2003 Budget Proposals Featuring 1 1
OMB Director Daniels, Feb. 6...............
President Bush's Trade Agenda for 2002, Feb. 1 1
7..........................................
Health Care Tax Credits to Decrease the 1 6
Number of Uninsured, Feb. 13...............
Retirement Security and Defined Contribution 1 5
Plans, Feb. 26.............................
WTO's Extraterritorial Income Decision, Feb. 1 5
27.........................................
HHS Secretary Thompson on the President's 1 1
Plan to Building on the Successes of
Welfare Reform, Mar. 12....................
Integrating Prescription Drugs Into 1 7
Medicare, Apr. 17..........................
Corporate Inversions, June 6................ 1 1
Creation of Homeland Security Department, 1 5
June 26....................................
-----------------------
Total for 2002............................ 10 34
=======================
Total for both sessions................... 17 57
------------------------------------------------------------------------

The six Subcommittees of the Committee on Ways and Means
were also very active in conducting public hearings during the
107th Congress. The following table specifies in detail the
number of days and witnesses published by each of the
Subcommittees.

TABLE 3.--PUBLIC HEARINGS CONDUCTED BY THE SUBCOMMITTEES OF THE
COMMITTEE ON WAYS AND MEANS
------------------------------------------------------------------------
Number of
Subject and Date -----------------------
Days Witnesses
------------------------------------------------------------------------
SUBCOMMITTEE ON TRADE
2001:
Free Trade Deals: Is the United States 1 10
Losing Ground As Its Trading Partners Move
Ahead, Mar. 29.............................
Outcome of the Summit of the Americas and 1 15
Prospects for Free Trade in the Hemisphere,
May 8......................................
Benefits of Trade to the Medical Technology 1 12
and Agriculture Sectors, May 14............
Renewal of Normal Trade Relations with 1 10
China, July 10.............................
Trade Agency Budget Authorizations and Other 1 12
Customs Issues, July 17....................
``Conflict Diamonds,'' Oct. 10.............. 1 9
2002:
To Explore Permanent Normal Trade Relations 1 9
for Russia, Apr. 11........................
President's Waiver for Vietnam from the 1 6
Jackson-Vanik Freedom of Emigration
Requirements, July 18......................
-----------------------
Total..................................... 8 83
=======================
SUBCOMMITTEE ON OVERSIGHT
2001:
Energy Supply and Prices, Mar. 5............ 1 8
2001 Tax Return Filing Season, Apr. 3....... 1 6
Taxpayer Advocate Report and Low-Income 1 7
Taxpayer Clinics, July 12..................
First in Series on Tax Code Simplification, 1 5
July 17 (held jointly with the Subcommittee
on Select Revenue Measures)................
Deceptive Mailing Concerning Tax Refunds, 1 2
July 19....................................
Response by Charitable Organizations to the 1 8
Recent Terrorist Attacks, Nov. 8...........
2002:
IRS National Taxpayer Advocate Annual Report 1 2
and IRS Oversight Board Annual Report, Feb.
28.........................................
Employee and Employer Views on Retirement 1 10
Security, Mar. 5...........................
2002 Tax Return Filing Season and the IRS 1 8
Budget for Fiscal Year 2003, Apr. 9........
Modeling the Economic Effect of Changes in 1 2
Tax Policy, May 7..........................
Review of Internal Revenue Code Section 1 8
501(c)(3) Requirements for Religious
Organizations, May 14......................
Tax Incentives for Renewal Communities, May 1 9
21.........................................
Retirement Security and Defined Benefit 1 9
Pension Plans, June 20.....................
-----------------------
Total..................................... 13 84
=======================
SUBCOMMITTEE ON HEALTH
2001:
Medicare Reform, Feb. 28.................... 1 5
Second in Series on Medicare Reform: 1 8
Bringing Regulatory Relief to Beneficiaries
and Providers, Mar. 15.....................
Third in Series on Medicare Reform: Laying 1 7
the Groundwork for a Rx Drug Benefit, Mar.
27.........................................
Nation's Uninsured, Apr. 4.................. 1 6
Patient Protections in Managed Care, Apr. 24 1 5
Fourth in Series on Medicare Reform: 1 7
Medicare+Choice: Lessons for Reform, May 1.
Fifth in Series on Medicare Reform: 1 4
Strengthening Medicare: Modernizing
Beneficiary Cost Sharing, May 9............
Rural Health Care in Medicare, June 12...... 1 4
H.R. 2768, the ``Medicare Regulatory and 1 5
Contracting Reform Act of 2001,'' Sept. 25.
Status of the Medicare+Choice Program, Dec. 1 4
4..........................................
2002:
Physician Payments, Feb. 28................. 1 6
Health Quality and Medical Errors, Mar. 7... 1 5
Medicare Supplemental Insurance, Mar. 14.... 1 4
Promoting Disease Management in Medicare, 1 3
Apr. 16....................................
Medicare's Geographic Cost Adjustors, July 1 18
23.........................................
Legislation to Reduce Medical Errors, Sept. 1 6
10.........................................
Medicare Payments for Currently Covered 1 6
Prescription Drugs, Oct. 3.................
-----------------------
Total..................................... 17 106
=======================
SUBCOMMITTEE ON SOCIAL SECURITY
2001:
Social Security Administration's Proposal to 1 6
Implement Return to Work Legislation, Feb.
28.........................................
Ensuring the Integrity of Social Security 1 6
Programs, May 10...........................
Social Security's Processing of Attorney 1 5
Fees, May 17...............................
Protecting Privacy and Preventing Misuse of 1 14
Social Security Numbers, May 22............
Listen to Americans' Views on the Future of 1 N/A
Social Security, June 18...................
First in Series on Social Security Programs' 1 8
Challenges and Opportunities, June 28......
Misleading Mailings Targeted to Seniors, 1 7
July 26....................................
Social Security and Pension Reform: Lessons 1 7
from Other Countries, July 31..............
Social Security Administration's Response to 1 2
the September 11 Terrorist Attacks, Nov. 1.
Preventing Identity Theft by Terrorist and 1 10
Criminals (held jointly with the
Subcommittee on Oversight and
Investigations, Committee on Financial
Services), Nov. 8..........................
2002:
Social Security Improvements for Women, 2 24
Seniors, and Working Americans, Feb. 28,
Mar. 6.....................................
Protecting the Privacy of Social Security 1 9
Numbers and Preventing Identity Theft, Apr.
29.........................................
Challenges Facing the New Commissioner of 1 7
Social Security, May 2.....................
Second in Series on Social Security 2 15
Disability Programs' Challenges and
Opportunities, June 11, 20.................
Third in Series on Social Security 1 9
Disability Programs' Challenges and
Opportunities, July 11.....................
Preserving the Integrity of Social Security 1 7
Numbers and Preventing Their Misuse by
Terrorists and Identity Thieves (held
jointly with the Subcommittee on
Immigration, Border Security and Claims,
Committee on the Judiciary), Sept. 19......
Fourth in a Series on Social Security 1 11
Disability Programs' Challenges and
Opportunities, Sept. 26....................
-----------------------
Total..................................... 19 147
=======================
SUBCOMMITTEE ON HUMAN RESOURCES
2001:
Welfare Reform, Mar. 15..................... 1 4
Second in Series on Welfare Reform: Work 1 10
Requirements on the TANF Cash Welfare
Program, Apr. 3............................
``Rainy Day'' and Other Special TANF Funds, 1 4
Apr. 26....................................
Promoting Safe and Stable Families Program, 1 7
May 10.....................................
Welfare and Marriage Issues, May 22......... 1 10
H.R. 7, the ``Community Solutions Act of 1 20
2001'' (held jointly with Subcommittee on
Select Revenue Measures), June 14..........
Child Support and Fatherhood Proposals, June 1 8
28.........................................
Bush Administration Budget Proposals, July 1 1
11.........................................
Teen Pregnancy Prevention, Nov. 15.......... 1 7
2002:
President's Unemployment Administrative 1 5
Financing Reform Initiative, Mar. 5........
Implementation of Welfare Reform Work 1 8
Requirements and Time Limits, Mar. 7.......
Welfare Reform Success, Apr. 2.............. 1 7
Welfare Reform Reauthorization Proposals, 1 49
Apr. 11....................................
Unemployment Fraud and Abuse, June 11....... 1 6
Fraud and Abuse in the Supplemental Security 1 5
Income Program, July 25....................
-----------------------
Total..................................... 15 151
=======================
SUBCOMMITTEE ON SELECT REVENUE MEASURES
2001:
First in Series on the Effect of Federal Tax 1 6
Laws on the Production, Supply, and
Conservation of Energy, May 3..............
Second in Series on the Effect of Federal 1 20
Tax Laws on the Production, Supply, and
Conservation of Energy, June 12............
Third in Series on the Effect of Federal Tax 1 12
Laws on the Production, Supply, and
Conservation of Energy, June 13............
2002:
First in a Series on the Extraterritorial 1 6
Income Regime, Apr. 10.....................
Tax Incentives for Land Use, Conservation, 1 14
and Preservation, Apr. 30..................
Second in a Series on Extraterritorial 1 7
Income Regime, May 9.......................
Third in a Series on Extraterritorial Income 1 9
Regime, June 13............................
Corporate Inversions, June 25............... 1 6
-----------------------
Total..................................... 8 80
------------------------------------------------------------------------

As the foregoing statistics indicate, during the 107th
Congress the full Committee and its six Subcommittees held
public hearings aggregating a grand total of 97 days, during
which time 708 witnesses testified. There were five field
hearings, two held by the Subcommittee on Social Security in
Columbia, Missouri, and Lake Worth, Florida; one each held by
the Subcommittees on Human Resources, Oversight, and Trade in
University Center, Michigan; Mayville, New York; and
Bloomington, Minnesota.
In addition, written comments were printed after having
been requested and received by the full Committee on
temporarily suspending the duty on certain steam or other vapor
generating boilers used in nuclear facilities; the Subcommittee
on Oversight on taxpayer rights, and H.R. 2237, expanding the
exemption from unrelated trade or business income for
conducting certain games of chance; and the Subcommittee on
Trade technical corrections to U.S. Trade Laws and
Miscellaneous Duty Suspension Bills.

C. Markup Sessions

With respect to markup or business sessions during the
107th Congress, the full Committee and its six Subcommittees
were also very actively engaged. The full Committee held such
sessions on 30 working days, usually both morning and afternoon
sessions, and the Subcommittees an aggregate of 5 working days,
making a grand total of 35 working days of markup or business
sessions for the full Committee and its Subcommittees during
the 107th Congress.

D. Number and Final Status of Bills Reported From the Committee on Ways
and Means in the 107th Congress

During the 107th Congress, the Committee reported to the
House a total of 36 bills, 32 favorably and 4 adversely. There
were 73 bills containing provisions within the purview of the
Committee that were passed by the House; 20 were enacted into
law. This is not indicative of the total number of bills
considered by the Committee. When the Committee meets on major
tax, tariff, Social Security, health, unemployment
compensation, or human resources matters, it often considers a
broad subject rather than individual, specific bills. In
consideration of a broad matter, the Committee makes every
attempt to review all pending pertinent bills encompassed
within that subject. As many as several hundred bills, for
instance, may translate into a broad subject that is then
reported by the Committee. Therefore, it is typically the
practice of the Committee to report bills on a major subject
rather than on several minor subjects.

Appendix IV. Chairmen of the Committee on Ways and Means and Membership
of the Committee From the 1st Through the 107th Congresses

A. Chairmen of the Committee on Ways and Means, 1789 to Present

----------------------------------------------------------------------------------------------------------------
Name State Party Term of Service
----------------------------------------------------------------------------------------------------------------
Thomas Fitzsimons.................... Pennsylvania........... Federalist............. 1789.
William L. Smith..................... South Carolina......... Federalist............. 1794 to 1797.
Robert G. Harper..................... South Carolina......... Federalist............. 1797 to 1800.
Roger Griswold....................... Connecticut............ Federalist............. 1800 to 1801.
John Randolph........................ Virginia............... Jeffersonian Republican 1801 to 1805, 1827.
Joseph Clay.......................... Pennsylvania........... Jeffersonian Republican 1805 to 1807.
George W. Campbell................... Tennessee.............. Jeffersonian Republican 1807 to 1809.
John W. Eppes........................ Virginia............... Jeffersonian Republican 1809 to 1811.
Ezekiel Bacon........................ Massachusetts.......... Jeffersonian Republican 1811 to 1812.
Langdon Cheves....................... South Carolina......... Jeffersonian Republican 1812 to 1813.
John W. Eppes........................ Virginia............... Jeffersonian Republican 1813 to 1815.
William Lowndes...................... South Carolina......... Jeffersonian Republican 1815 to 1818.
Samuel Smith......................... Maryland............... Jeffersonian Republican 1818 to 1822.
Louis McLane......................... Delaware............... Jeffersonian Republican 1822 to 1827.
George McDuffie...................... South Carolina......... Democrat............... 1827 to 1832.
Gulian C. Verplanck.................. New York............... Democrat............... 1832 to 1833.
James K. Polk........................ Tennessee.............. Democrat............... 1833 to 1835.
C. C. Cambreleng..................... New York............... Democrat............... 1835 to 1839.
John W. Jones........................ Virginia............... Democrat............... 1839 to 1841.
Millard Fillmore..................... New York............... Whig................... 1841 to 1843.
James Iver McKay..................... North Carolina......... Democrat............... 1843 to 1847.
Samuel F. Vinton..................... Ohio................... Whig................... 1847 to 1849.
Thomas H. Bayly...................... Virginia............... Democrat............... 1849 to 1851.
George S. Houston.................... Alabama................ Democrat............... 1851 to 1855.
Lewis D. Campbell.................... Ohio................... Republican............. 1855 to 1857.
J. Glancy Jones...................... Pennsylvania........... Democrat............... 1857 to 1858.
John S. Phelps....................... Missouri............... Democrat............... 1858 to 1859.
John Sherman......................... Ohio................... Republican............. 1859 to 1861.
Thaddeus Stevens..................... Pennsylvania........... Republican............. 1861 to 1865.
Justin S. Morrill.................... Vermont................ Republican............. 1865 to 1867.
Robert C. Schenck.................... Ohio................... Republican............. 1867 to 1871.
Samuel D. Hooper..................... Massachusetts.......... Republican............. 1871.
Henry L. Dawes....................... Massachusetts.......... Republican............. 1871 to 1875.
William R. Morrison.................. Illinois............... Democrat............... 1875 to 1877.
Fernando Wood........................ New York............... Democrat............... 1877 to 1881.
John R. Tucker....................... Virginia............... Democrat............... 1881.
William D. Kelley.................... Pennsylvania........... Republican............. 1881 to 1883.
William R. Morrison.................. Illinois............... Democrat............... 1883 to 1887.
Roger Q. Mills....................... Texas.................. Democrat............... 1887 to 1889.
William McKinley, Jr................. Ohio................... Republican............. 1889 to 1891.
William M. Springer.................. Illinois............... Democrat............... 1891 to 1893.
William L. Wilson.................... West Virginia.......... Democrat............... 1893 to 1895.
Nelson Dingley, Jr................... Maine.................. Republican............. 1895 to 1899.
Sereno E. Payne...................... New York............... Republican............. 1899 to 1911.
Oscar W. Underwood................... Alabama................ Democrat............... 1911 to 1915.
Claude Kitchin....................... North Carolina......... Democrat............... 1915 to 1919.
Joseph W. Fordney.................... Michigan............... Republican............. 1919 to 1923.
William R. Green..................... Iowa................... Republican............. 1923 to 1928.
Willis C. Hawley..................... Oregon................. Republican............. 1929 to 1931.
James W. Collier..................... Mississippi............ Democrat............... 1931 to 1933.
Robert L. Doughton................... North Carolina......... Democrat............... 1933 to 1947, 1949 to
1953.
Harold Knutson....................... Minnesota.............. Republican............. 1947 to 1949.
Daniel A. Reed....................... New York............... Republican............. 1953 to 1955.
Jere Cooper.......................... Tennessee.............. Democrat............... 1955 to 1957.
Wilbur D. Mills...................... Arkansas............... Democrat............... 1957 to 1975.
Al Ullman............................ Oregon................. Democrat............... 1975 to 1981.
Dan Rostenkowski..................... Illinois............... Democrat............... 1981 to 1994.
Bill Archer.......................... Texas.................. Republican............. 1995 to 2001.
William M. Thomas.................... California............. Republican............. 2000-
----------------------------------------------------------------------------------------------------------------

B. Tables Showing Past Membership of the Committee

1. MEMBERS OF THE COMMITTEE ON WAYS AND MEANS FROM THE 1ST THROUGH THE
107TH CONGRESS, BY STATE

------------------------------------------------------------------------
Member Congress(es)
------------------------------------------------------------------------
Alabama:
John McKinley.................................... 23
David Hubbard.................................... 26
Dixon H. Lewis................................... 27-28
George S. Houston................................ 29-30, 32-33
James F. Dowdell................................. 35
Hilary A. Herbert................................ 48
Joseph Wheeler................................... 53-55
Oscar W. Underwood............................... 56, 59-63
Ronnie G. Flippo................................. 98-101
Arizona:
J.D. Hayworth.................................... 105-
Arkansas:
James K. Jones................................... 48
Clifton R. Breckinridge.......................... 49-51, 53
William A. Oldfield.............................. 64-70
Heartsill Ragon.................................. 70-73
William J. Driver................................ 72
Claude A. Fuller................................. 73-75
Wilbur D. Mills.................................. 77-94
Jim Guy Tucker, Jr............................... 95
Beryl Anthony, Jr................................ 97-102
California:
Joseph McKenna................................... 51-52
Victor H. Metcalf................................ 57-58
James C. Needham................................. 58-62
William E. Evans................................. 73
Frank H. Buck.................................... 74-77
Bertrand W. Gearhart............................. 76-80
Cecil R. King.................................... 78-79, 81-90
James B. Utt..................................... 83, 86-91
James C. Corman.................................. 90-96
Jerry L. Pettis.................................. 91-94
William M. Ketchum............................... 94-95
Fortney Pete Stark............................... 94-
John H. Rousselot................................ 95-97
Robert T. Matsui................................. 97-
William M. Thomas................................ 98-
Wally Herger..................................... 103-
Xavier Becerra................................... 105-
Colorado:
Robert W. Bonynge................................ 60
Charles B. Timberlake............................ 66-72
John A. Carroll.................................. 81
Donald G. Brotzman............................... 92-93
George H. ``Hank'' Brown......................... 100-101
Scott McInnis.................................... 106-
Connecticut:
Jeremiah Wadsworth............................... 1
Uriah Tracy...................................... 3
James Hillhouse.................................. 4
Nathaniel Smith.................................. 4-5
Joshua Coit...................................... 5
Roger Griswold................................... 5-8
John Davenport................................... 8
Jonathan O. Moseley.............................. 9, 14, 16
Benjamin Tallmadge............................... 10-11
Timothy Pitkin................................... 12-13, 15
Ralph I. Ingersoll............................... 21-22
Samuel D. Hubbard................................ 30
James Phelps..................................... 45-46
Charles A. Russell............................... 54-57
Ebenezer J. Hill................................. 58-62, 64-65
John Q. Tilson................................... 66-68
Antoni N. Sadlak................................. 83-85
William R. Cotter................................ 94-97
Barbara B. Kennelly.............................. 98-105
Nancy L. Johnson................................. 101-
Delaware:
John Vining...................................... 1
Henry Latimer.................................... 3
John Patten...................................... 4
James A. Bayard, Sr.............................. 5, 7
Caesar A. Rodney................................. 8
Louis McLane..................................... 16-19
Florida:
A. S. Herlong, Jr................................ 84-90
Sam M. Gibbons................................... 91-104
L. A. (Skip) Bafalis............................. 94-97
E. Clay Shaw, Jr................................. 100-
Karen L. Thurman................................. 105-107
Mark Foley....................................... 104-
Georgia:
James Jackson.................................... 1
Abraham Baldwin.................................. 3-5
Benjamin Taliaferro.............................. 6
John Milledge.................................... 7
David Meriwether................................. 8-9
William W. Bibb.................................. 12-13
Joel Abbott...................................... 15
Joel Crawford.................................... 15-16
Wiley Thompson................................... 17-18
George R. Gilmer................................. 20
Richard H. Wilde................................. 22-23
George W. Owens.................................. 24-25
Charles E. Haynes................................ 25
Mark A. Cooper................................... 26
Absalom H. Chappell.............................. 28
Seaborn Jones.................................... 29
Robert Toombs.................................... 30-31
Alexander H. Stephens............................ 30-31, 33
Marshall J. Wellborn............................. 31
Howell Cobb...................................... 34
Martin J. Crawford............................... 35-36
Benjamin H. Hill................................. 44
Henry R. Harris.................................. 45, 49
William H. Felton................................ 46
Emory Speer...................................... 47
James H. Blount.................................. 48
Henry G. Turner.................................. 50-54
Charles F. Crisp................................. 54
James M. Griggs.................................. 60-61
William G. Brantley.............................. 61-62
Charles R. Crisp................................. 64-72
Albert S. Camp................................... 78-83
Phillip M. Landrum............................... 89-94
Ed Jenkins....................................... 95-102
Wyche Fowler, Jr................................. 96-99
John Lewis....................................... 103-
Mac Collins...................................... 104-
Hawaii:
Cecil (Cec) Heftel............................... 96-99
Illinois:
Daniel P. Cook................................... 19
John A. McClernand............................... 37
John Wentworth................................... 39
John A. Logan.................................... 40
Samuel S. Marshall............................... 41
Horatio C. Burchard.............................. 42-45
William R. Morrison.............................. 44, 46-49
William M. Springer.............................. 52
Albert J. Hopkins................................ 52-57
Henry S. Boutell................................. 58-61
Henry T. Rainey.................................. 62-66, 68-72
John A. Sterling................................. 65
Ira C. Copley.................................... 66-67
Carl R. Chindblom................................ 68-72
Chester C. Thompson.............................. 74-75
Raymond S. McKeough.............................. 76-77
Charles S. Dewey................................. 78
Thomas J. O'Brien................................ 79, 81-88
Noah M. Mason.................................... 80-87
Harold R. Collier................................ 88-93
Dan Rostenkowski................................. 88-103
Abner J. Mikva................................... 94-96
Philip M. Crane.................................. 94-
Marty Russo...................................... 96-102
Mel Reynolds..................................... 103
Jerry Weller..................................... 105-
Indiana:
David Wallace.................................... 27
Cyrus L. Dunham.................................. 32
William E. Niblack............................... 40, 43
Godlove S. Orth.................................. 41
Michael C. Kerr.................................. 42
Thomas M. Browne................................. 48-50
William D. Bynum................................. 50, 53
Benjamin F. Shively.............................. 52
George W. Steele................................. 54-57
James E. Watson.................................. 58-60
Edgar D. Crumpacker.............................. 60-61
Lincoln Dixon.................................... 62-65
Harry C. Canfield................................ 71-72
John W. Boehne, Jr............................... 73-77
Robert A. Grant.................................. 80
Andy Jacobs, Jr.................................. 94-104
Iowa:
John A. Kasson................................... 38, 43, 47-48
William B. Allison............................... 39-41
John H. Gear..................................... 51, 53
Jonathan P. Dolliver............................. 54-56
William R. Green................................. 63-70
C. William Ramseyer.............................. 70-71
Otha D. Wearin................................... 75
Lloyd Thurston................................... 75
Thomas E. Martin................................. 80-83
Fred Grandy...................................... 102-103
Jim Nussle....................................... 104-
Kansas:
Dudley C. Haskell................................ 47
Chester I. Long.................................. 56-57
Charles Curtis................................... 58-59
William A. Calderhead............................ 60-61
Victor Murdock................................... 63
Guy T. Helvering................................. 64-65
Frank Carlson.................................... 76-79
Martha E. Keys................................... 94-95
Kentucky:
Alexander D. Orr................................. 3
Christopher Greenup.............................. 4
Thomas T. Davis.................................. 5
John Boyle....................................... 8
Richard M. Johnson............................... 11-12
Thomas Montgomery................................ 13
David Trimble.................................... 15-16
Nathan Gaither................................... 22
John Pope........................................ 25
Thomas F. Marshall............................... 27
Garrett Davis.................................... 28
Charles S. Morehead.............................. 30-31
John C. Breckinridge............................. 33
Robert Mallory................................... 38
James B. Beck.................................... 42-43
Henry Watterson.................................. 44
John G. Carlisle................................. 46-47, 51
Joseph C.S. Blackburn............................ 48
William C.P. Breckinridge........................ 49-50
Alexander B. Montgomery.......................... 52-53
Walter Evans..................................... 54-55
Ollie M. James................................... 62
Augustus O. Stanley.............................. 63
Frederick M. Vinson.............................. 72-75
Noble J. Gregory................................. 78-85
John C. Watts.................................... 86-92
Jim Bunning...................................... 102-105
Ron Lewis........................................ 104-
Louisiana:
Thomas B. Robertson.............................. 14
William L. Brent................................. 19-20
Walter H. Overton................................ 21
Lionel A. Sheldon................................ 43
Randall L. Gibson................................ 45-46
Charles J. Boatner............................... 54
Samuel M. Robertson.............................. 55-59
Robert F. Broussard.............................. 61
Whitmell P. Martin............................... 65-70
Paul H. Maloney.................................. 76, 78-79
Thomas Hale Boggs, Sr............................ 81-91
Joe D. Waggonner, Jr............................. 92-95
W. Henson Moore, III............................. 96-99
William J. Jefferson............................. 103, 105-
Jim McCrery...................................... 103-
Jimmy Hayes...................................... \1\ 104
William J. Jefferson............................. 105-
Maine:
Peleg Sprague.................................... 19-20
Francis O.J. Smith............................... 24
George Evans..................................... 26
Israel Washburn, Jr.............................. 36
James G. Blaine.................................. 44
William P. Frye.................................. 46
Thomas B. Reed................................... 48-50, 52-53
Nelson Dingley, Jr............................... 51, 54-55
Daniel J. McGillicuddy........................... 64
Maryland:
William Smith.................................... 1
Gabriel Christie................................. 3
William Vans Murray.............................. 4
William Hindman.................................. 4-5
William Craik.................................... 5
Joseph H. Nicholson.............................. 6-9
Nicholas R. Moore................................ 8
Roger Nelson..................................... 9
John Montgomery.................................. 10-11
Alexander McKim.................................. 13
Stevenson Archer................................. 13
Samuel Smith..................................... 14-17
Isaac McKim...................................... 18, 23-25
Henry W. Davis................................... 34-36
Phillip F. Thomas................................ 44
David J. Lewis................................... 72-75
Rogers C.B. Morton............................... 91-92
Benjamin L. Cardin............................... 101-
Massachusetts:
Elbridge Gerry................................... 1
Fisher Ames...................................... 3
Theodore Sedgwick................................ 4
Theophilus Bradbury.............................. 4
Harrison Gray Otis............................... 5-6
Samuel Sewall.................................... 5
Isaac Parker..................................... 5
Bailey Bartlett.................................. 6
Nathan Read...................................... 7
Seth Hastings.................................... 8
Josiah Quincy.................................... 9
Ezekiel Bacon.................................... 11-12
Ebenezer Seaver.................................. 11
\1\ Appointed January 25, 1996...................
Henry Shaw....................................... 16
Henry W. Dwight.................................. 19-21
Benjamin Gorham.................................. 23
Abbott Lawrence.................................. 24, 26
Richard Fletcher................................. 25
George N. Briggs................................. 25
Leverett Saltonstall............................. 26
Robert C. Winthrop............................... 29
Charles Hudson................................... 30
George Ashmun.................................... 31
William Appleton................................. 32-33, 37
Alexander De Witt................................ 34
Nathaniel P. Banks............................... 35, 45
Samuel Hooper.................................... 37-41
Henry L. Dawes................................... 42-43
Chester W. Chapin................................ 44
William A. Russell............................... 47-48
Moses T. Stevens................................. 52-53
Samuel W. McCall................................. 56-62
Andrew J. Peters................................. 62-63
Augustus P. Gardner.............................. 63-65
John J. Mitchell................................. 63
Allen T. Treadway................................ 65-78
Peter F. Tague................................... 67-68
John W. McCormack................................ 72-76
Arthur D. Healey................................. 77
Charles L. Gifford............................... 79-80
Angier L. Goodwin................................ 80, 82-83
James A. Burke................................... 87-95
James M. Shannon................................. 96-98
Brian J. Donnelly................................ 99-102
Richard E. Neal.................................. 103-
Michigan:
William A. Howard................................ 34-36
Austin Blair..................................... 41
Henry Waldron.................................... 43
Omar D. Conger................................... 46
Jay A. Hubbell................................... 47
William C. Maybury............................... 49
Julius C. Burrows................................ 50-53
Justin R. Whiting................................ 52-53
William A. Smith................................. 59
Joseph W. Fordney................................ 60-67
James C. McLaughlin.............................. 68-72
Roy O. Woodruff.................................. 73-82
John D. Dingell.................................. 74-84
Victor A. Knox................................... 83, 86-88
Thaddeus M. Machrowicz........................... 84-87
Martha W. Griffiths.............................. 87-93
Charles E. Chamberlain........................... 91-93
Richard F. Vander Veen........................... 93-94
Guy Vander Jagt.................................. 94-102
William M. Brodhead.............................. 95-97
Sander M. Levin.................................. 100-
Dave Camp........................................ 103-
Minnesota:
Mark H. Dunnell.................................. 46-47
James A. Tawney.................................. 54-58
James T. McCleary................................ 59
Winfield S. Hammond.............................. 62-63
Sydney Anderson.................................. 63
Harold Knutson................................... 73-80
Eugene J. McCarthy............................... 84-85
Joseph E. Karth.................................. 92-94
Bill Frenzel..................................... 94-101
Jim Ramstad...................................... 104-
Mississippi:
Jacob Thompson................................... 31
John Sharp Williams.............................. 58-59
James W. Collier................................. 63-72
Aaron Lane Ford.................................. 77
Missouri:
James S. Green................................... 31
John S. Phelps................................... 32-37
Henry T. Blow.................................... 38
John Hogan....................................... 39
Gustavus A. Finkelburg........................... 42
John C. Tarsney.................................. 53-54
Seth W. Cobb..................................... 54
Champ Clark...................................... 58-61
Dorsey W. Shackleford............................ 62-63
Clement C. Dickinson............................. 63-66, 68-70, 72-
73
Charles L. Faust................................. 69-70
Richard M. Duncan................................ 74-77
Thomas B. Curtis................................. 83-90
Frank M. Karsten................................. 84-90
Richard A. Gephardt.............................. 95-101
Mel Hancock...................................... 103-104
Kenny Hulshof.................................... 105-
Montana:
Lee W. Metcalf................................... 86
James F. Battin.................................. 89-91
Nebraska:
William J. Bryan................................. 52-53
Charles H. Sloan................................. 63-65
Ashton C. Shallenberger.......................... 73
Carl T. Curtis................................... 79-83
Hal Daub......................................... 99-100
Peter Hoagland................................... 103
Jon Christensen.................................. 104-105
Nevada:
Francis G. Newlands.............................. 56-57
John Ensign...................................... 104-105
New Hampshire:
Samuel Livermore................................. 1
Nicholas Gilman.................................. 3-4
Abiel Foster..................................... 5
Nathaniel A. Haven............................... 11
Henry Hubbard.................................... 23
Charles G. Atherton.............................. 25-27
Moses Norris, Jr................................. 28-29
Harry Hibbard.................................... 31-33
Judd A. Gregg.................................... 99-100
New Jersey:
Lambert Cadwalader............................... 1
Elias Boudinot................................... 3
Isaac Smith...................................... 4
Thomas Sinnickson................................ 5
James H. Imlay................................... 6
William Coxe, Jr................................. 13
John L.N. Stratton............................... 37
William Hughes................................... 62
Isaac Bacharach.................................. 66-74
Donald H. McLean................................. 76-78
Robert W. Kean................................... 78-85
Henry Helstoski.................................. 94
Frank J. Guarini................................. 96-102
Dick Zimmer...................................... 104
New Mexico:
Clinton P. Anderson.............................. 79
New York:
John Laurance.................................... 1
John Watts....................................... 3
Ezekiel Gilbert.................................. 4
James Cochran.................................... 5
Hezekiah L. Hosmer............................... 5
Jonas Platt...................................... 6
Killian K. Van Rensselaer........................ 7
Joshua Sands..................................... 8
Erastus Root..................................... 11
John W. Taylor................................... 13
Jonathan Fisk.................................... 13
Thomas J. Oakley................................. 13
James W. Wilkin.................................. 14
James Tallmadge, Jr.............................. 15
Albert H. Tracy.................................. 16
Nathaniel Pitcher................................ 17
Churchill C. Cambreleng.......................... 17-18, 23-25
Dudley Marvin.................................... 19
Gulian C. Verplanck.............................. 20-22
Aaron Vanderpoel................................. 26
Millard Filmore.................................. 27
Daniel D. Barnard................................ 28
David L. Seymour................................. 28
George O. Rathbun................................ 28
Orville Hungerford............................... 29
Henry Nicoll..................................... 30
James Brooks..................................... 31-32, 39-40, 42
William Duer..................................... 31
Solomon G. Haven................................. 33
Russell Sage..................................... 34
John Kelly....................................... 35
William B. MacLay................................ 35
Elbridge G. Spaulding............................ 36-37
Erastus Corning.................................. 37
Reuben E. Fenton................................. 38
De Witt C. Littlejohn............................ 38
Henry G. Stebbins................................ 38
John V.L. Pruyn.................................. 38
Roscoe Conkling.................................. 39
Charles H. Winfield.............................. 39
John A. Griswold................................. 40
Dennis McCarthy.................................. 41
Ellis H. Roberts................................. 42-43
Fernando Wood.................................... 43-46
Abram S. Hewitt.................................. 48-49
Frank Hiscock.................................... 48-49
Sereno E. Payne.................................. 51-63
Roswell P. Flower................................ 51
William B. Cochran............................... 52-53, 58-60
George B. McClellan.............................. 55-58
John W. Dwight................................... 61
Francis B. Harrison.............................. 61-63
Michael F. Conry................................. 64
George W. Fairchild.............................. 64-65
John F. Carew.................................... 65-71
Luther W. Mott................................... 66-67
Alanson B. Houghton.............................. 67
Ogden L. Mills................................... 67-69
Frank Crowther................................... 68-77
Thaddeus C. Sweet................................ 70
Frederick M. Davenport........................... 70-71
Thomas H. Cullen................................. 71-78
Christopher D. Sullivan.......................... 72-76
Daniel A. Reed................................... 73-86
Walter A. Lynch.................................. 78-81
Eugene J. Keogh.................................. 82-89
Albert H. Bosch.................................. 86
Steven B. Derounian.............................. 87-88
Barber B. Conable, Jr............................ 90-98
Jacob H. Gilbert................................. 90-91
Hugh L. Carey.................................... 91-93
Otis G. Pike..................................... 93-95
Charles B. Rangel................................ 94-
Thomas J. Downey................................. 96-102
Raymond J. McGrath............................... 99-102
Michael R. McNulty............................... \2\ 103, 104-
Amo Houghton..................................... 103-
North Carolina:
William B. Grove................................. 3
Thomas Blount.................................... 4-5
Robert Williams.................................. 5
David Stone...................................... 6
James Holland.................................... 7
Willis Alston.................................... 10-11, 13
William Gaston................................... 13-14
Abraham Rencher.................................. 25, 27
Henry W. Conner.................................. 26
James I. McKay................................... 28-30
Edward Stanly.................................... 32
William M. Robbins............................... 45
Edward W. Pou.................................... 60-61
Claude Kitchin................................... 62-67
Robert L. Doughton............................... 69-82
James G. Martin.................................. 94-98
North Dakota:
Martin N. Johnson................................ 54-55
George M. Young.................................. 66-68
Byron L. Dorgan.................................. 98-102
Earl Pomeroy..................................... 107-
Ohio:
William Creighton, Jr............................ 13
Thomas R. Ross................................... 16
Thomas Corwin.................................... 23-24
Thomas L. Hamer.................................. 25
Taylor Webster................................... 25
Samson Mason..................................... 26-27
John B. Weller................................... 28
Samuel F. Vinton................................. 29-31
Lewis D. Campbell................................ 34-35
John Sherman..................................... 36
Valentine B. Horton.............................. 37
George H. Pendleton.............................. 38
James A. Garfield................................ 39, 44-46
Robert C. Schenck................................ 40-41
Charles Foster................................... 43
Milton Sayler.................................... 45
William McKinley, Jr............................. 46-47, 49-51
Frank H. Hurd.................................... 48
Charles H. Grosvenor............................. 53-59
Nicholas Longworth............................... 60-62, 64-67
Timothy T. Ansberry.............................. 62-63
Alfred G. Allen.................................. 64
George White..................................... 65
Charles C. Kearns................................ 68-71
Charles F. West.................................. 73
Thomas A. Jenkins................................ 73-85
Arthur P. Lamneck................................ 74-75
Stephen M. Young................................. 81
Jackson E. Betts................................. 86-92
Donald D. Clancy................................. 93-94
Charles A. Vanik................................. 89-96
Bill Gradison.................................... 95-103
Don J. Pease..................................... 97-102
Rob Portman...................................... 104-
Oklahoma:
Thomas A. Chandler............................... 67
James V. McClintic............................... 73
Wesley E. Disney................................. 74-78
James R. Jones................................... 94-99
Bill K. Brewster................................. 103
Wes Watkins...................................... 105-107
Oregon:
William R. Ellis................................. 61
Willis C. Hawley................................. 65-72
Albert C. Ullman................................. 87-96
Mike Kopetski.................................... 103
Pennsylvania:
Thomas Fitzsimons................................ 1, 3
Albert Gallatin.................................. 4-6
Henry Woods...................................... 6
John Smilie...................................... 6-7, 10-12
Joseph Clay...................................... 8-9
John Rea......................................... 11
Jonathan Roberts................................. 12-13
Samuel D. Ingham................................. 13-14, 18
John Sergeant.................................... 15, 25
John Tod......................................... 17
John Gilmore..................................... 21-22
Horace Binney.................................... 23
Richard Biddle................................... 26
Joseph R. Ingersoll.............................. 24, 27-29
James Pollock.................................... 30
Moses Hampton.................................... 31
J. Glancy Jones.................................. 32, 35
John Robbins..................................... 33
James H. Campbell................................ 34
Henry M. Phillips................................ 35
Thaddeus Stevens................................. 36-38
James K. Moorhead................................ 39-40
William D. Kelley................................ 41-50
Russell Errett................................... 47
Samuel J. Randall................................ 47
William L. Scott................................. 50
Thomas M. Bayne.................................. 51
John Dalzell..................................... 52-62
A. Mitchell Palmer............................... 62-63
J. Hampton Moore................................. 63-66
John J. Casey.................................... 64, 68
Henry W. Watson.................................. 66-73
Harris J. Bixler................................. 69
Harry A. Estep................................... 70-72
Thomas C. Cochran................................ 73
Joshua T. Brooks................................. 74
Patrick J. Boland................................ 76-77
Benjamin Jarrett................................. 76-77
James P. McGranery............................... 77-78
Herman P. Eberharter............................. 78-85
Richard M. Simpson............................... 78-86
William J. Green, Jr............................. 86-88
John A. Lafore, Jr............................... 86
Walter M. Mumma.................................. 86-87
George M. Rhodes................................. 88-90
Herman T. Schneebeli............................. 87-94
William J. Green, III............................ 90-94
Raymond F. Lederer............................... 95-96
Dick Schulze..................................... 95-102
Donald A. Bailey................................. 97
William J. Coyne................................. 99-107
Rick Santorum.................................... 103
Philip S. English................................ 104-
Rhode Island:
Benjamin Bourne.................................. 3-4
Francis Malbone.................................. 4
Elisha R. Potter................................. 4
Christopher G. Champlin.......................... 5
John Brown....................................... 6
Joseph Stanton, Jr............................... 8
Daniel L.D. Granger.............................. 59-60
George F. O'Shaunessy............................ 65
Richard S. Aldrich............................... 69-72
Aime J. Forand................................... 78-86
South Carolina:
William L. Smith................................. 3-5
Robert Goodloe Harper............................ 5-6
Abraham Nott..................................... 6
David R. Williams................................ 9
Langdon Cheves................................... 12
Theodore Gourdin................................. 13
William Lowndes.................................. 13-15
John Taylor...................................... 14
Thomas R. Mitchell............................... 17
George McDuffie.................................. 18-22
R. Barnwell Rhett................................ 25-26
Francis W. Pickens............................... 27
John L. McLaurin................................. 54-55
Ken Holland...................................... 95-97
Carroll A. Campbell, Jr.......................... 98-99
Tennessee:
Andrew Jackson................................... 4
William C.C. Claiborne........................... 5
William Dickson.................................. 7, 9
George W. Campbell............................... 10
Bennett H. Henderson............................. 14
Francis Jones.................................... 16-17
James K. Polk.................................... 22-23
Cave Johnson..................................... 24
George W. Jones.................................. 31-34
Horace Maynard................................... 37, 40-42
Benton McMillan.................................. 49-55
James D. Richardson.............................. 55-57
Cordell Hull..................................... 62-66, 68-71
Edward E. Eslick................................. 72
Jere Cooper...................................... 72-85
Howard H. Baker.................................. 83-88
James B. Frazier, Jr............................. 85-87
Ross Bass........................................ 88
Richard H. Fulton................................ 89-94
John J. Duncan................................... 92-100
Harold E. Ford................................... 94-104
Don Sundquist.................................... 101-103
John S. Tanner................................... 105-
Texas:
John Hancock..................................... 44
Roger Q. Mills................................... 46, 48-51
Joseph W. Bailey................................. 55
Samuel B. Cooper................................. 56-58
Choice B. Randell................................ 60-62
John N. Garner................................... 63-71
Morgan G. Sanders................................ 72-75
Milton H. West................................... 76-80
Jesse M. Combs................................... 81-82
Frank N. Ikard................................... 84-87
Bruce Alger...................................... 86-88
Clark W. Thompson................................ 87-89
George H. W. Bush................................ 90-91
Omar T. Burleson................................. 90-95
Bill Archer...................................... 93-106
J.J. Pickle...................................... 94-103
Kent R. Hance.................................... 97-98
Michael A. Andrews............................... 99-103
Sam Johnson...................................... 104-
Greg Laughlin.................................... \3\ 104
Lloyd Doggett.................................... 104-
Kevin Brady...................................... 107-
Utah:
Walter K. Granger................................ 82
Vermont:
Daniel Buck...................................... 4
Israel Smith..................................... 3, 4, 7
Lewis R. Morris.................................. 5
James Fisk....................................... 10, 12
Horace Everett................................... 25
Justin S. Morrill................................ 35-39
Virginia:
James Madison.................................... 1, 3, 4
William B. Giles................................. 5
Richard Brent.................................... 5
Walter Jones..................................... 5
Leven Powell..................................... 6
John Nicholas.................................... 6
John Randolph.................................... 7-9, 20
James M. Garnett................................. 9
John W. Eppes.................................... 10-11, 13
William A. Burwell............................... 12, 14-16
James Pleasants.................................. 12-13
John Tyler....................................... 16
Andrew Stevenson................................. 17-19
Alexander Smyth.................................. 20-21
Philip P. Barbour................................ 21
Mark Alexander................................... 21-22
George Loyall.................................... 23-24
John W. Jones.................................... 25-27
John M. Botts.................................... 27
Thomas W. Gilmer................................. 27
Thomas H. Bayly.................................. 28, 31
George C. Dromgoole.............................. 28-29
James McDowell................................... 30
John Letcher..................................... 34-35
John S. Millson.................................. 36
John R. Tucker................................... 44-47
Claude A. Swanson................................ 55-58
A. Willis Robertson.............................. 75-79
Burr P. Harrison................................. 82, 84-87
W. Pat Jennings.................................. 88-89
Joel T. Broyhill................................. 88-93
Joseph L. Fisher................................. 94-96
L.F. Payne....................................... 103-104
Washington:
Francis W. Cushman............................... 61
Lindley H. Hadley................................ 66-72
Samuel B. Hill................................... 71-74
Knute Hill....................................... 77
Otis H. Holmes................................... 80-85
Rodney D. Chandler............................... 100-102
Jim McDermott.................................... 102-
Jennifer Dunn.................................... 104-
West Virginia:
William L. Wilson................................ 50, 52-53
Joseph H. Gaines................................. 60-61
George M. Bowers................................. 66-67
Hubert S. Ellis.................................. 80
Wisconsin:
Charles Billinghurst............................. 34
Robert M. La Follette............................ 51
Joseph W. Babcock................................ 57-59
James A. Frear................................... 66-68, 71-73
Thaddeus F.B. Wasielewski........................ 78-79
John W. Byrnes................................... 80-92
William A. Steiger............................... 94-95
Jim Moody........................................ 100-102
Gerald D. Kleczka................................ 103-
Paul Ryan........................................ 107-
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\1\ Appointed January 25, 1996.
\2\ Appointed January 25, 1996.
\3\ Appointed July 10, 1995.

2. COMMITTEE MEMBERSHIP, 107TH CONGRESS

Committee on Ways and Means
one hundred seventh congress