[House Report 109-736]
[From the U.S. Government Publishing Office]
Union Calendar No. 438
109th Congress
2d Session HOUSE OF REPRESENTATIVES Report
109-736
_______________________________________________________________________
REPORT ON THE LEGISLATIVE AND
OVERSIGHT ACTIVITIES
of the
COMMITTEE ON WAYS AND MEANS
during the
109TH CONGRESS
December 22, 2006.--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
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut FORTNEY PETE STARK, California
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
PHIL ENGLISH, Pennsylvania JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona XAVIER BECERRA, California
JERRY WELLER, Illinois LLOYD DOGGETT, Texas
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
RON LEWIS, Kentucky STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas MIKE THOMPSON, California
PAUL RYAN, Wisconsin JOHN B. LARSON, Connecticut
ERIC CANTOR, Virginia RAHM EMANUEL, Illinois
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California
LETTER OF TRANSMITTAL
----------
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC, December 22, 2006.
Hon. Karen Haas,
Office of the Clerk,
House of Representatives, Washington, DC.
Dear Ms. Haas: 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 109th Congress.
Sincerely,
Bill Thomas,
Chairman.
C O N T E N T S
----------
Page
Transmittal Letter............................................... III
Foreword......................................................... VII
I. Legislative Activity Review.......................................1
A. Legislative Review of Tax, Trust Fund, and Pension
Issues............................................... 1
B. Legislative Review of Trade Issues.................... 29
C. Legislative Review of Health Issues................... 52
D. Legislative Review of Social Security Issues.......... 57
E. Legislative Review of Human Resources Issues.......... 60
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....................................... 75
C. Additional oversight activities, and any
recommendations or actions taken..................... 106
Appendix I. Jurisdiction of the Committee on Ways and Means...... 109
Appendix II. Historical Note..................................... 130
Appendix III. Statistical Review of the Activities of the
Committee on Ways and Means.................................... 136
Appendix IV. Chairmen of the Committee on Ways and Means and
Membership of the Committee from the 1st through the 109th
Congresses..................................................... 140
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 109th 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 109th Congress is provided in Rule X, clause 1(s), 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 the insular
possessions.
(5) Bonded debt of the United States, subject to the
last sentence of clause 4(f).
(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).
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 109th 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 109th 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 109th Congress is as follows:
Subcommittee on Trade
E. CLAY SHAW, Jr., Florida, Chairman
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
PHIL ENGLISH, Pennsylvania SANDER M. LEVIN, Michigan
JIM NUSSLE, Iowa WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio \2\ \1\
JERRY WELLER, Illinois JOHN S. TANNER, Tennessee
RON LEWIS, Kentucky JOHN B. LARSON, Connecticut
MARK FOLEY, Florida \3\ JIM McDERMOTT, Washington
KEVIN BRADY, Texas
THOMAS M. REYNOLDS, New York \4\
Subcommittee on Oversight
JIM RAMSTAD, Minnesota, Chairman
ERIC CANTOR, Virginia JOHN LEWIS, Georgia
BOB BEAUPREZ, Colorado EARL POMEROY, North Dakota
THOMAS M. REYNOLDS, New York \5\ MICHAEL R. McNULTY, New York
JOHN LINDER, Georgia JOHN S. TANNER, Tennessee
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
SAM JOHNSON, Texas
ROB PORTMAN, Ohio \6\
DEVIN NUNES, California \7\
J.D. HAYWORTH, Arizona \8\
Subcommittee on Health
NANCY L. JOHNSON, Connecticut, Chairman
JIM McCRERY, Louisiana FORTNEY PETE STARK, California
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan LLOYD DOGGETT, Texas
JIM RAMSTAD, Minnesota MIKE THOMPSON, California
PHIL ENGLISH, Pennsylvania RAHM EMANUEL, Illinois
J.D. HAYWORTH, Arizona
KENNY C. HULSHOF, Missouri
Subcommittee on Social Security
JIM McCRERY, Louisiana, Chairman
E. CLAY SHAW, Jr., Florida SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas EARL POMEROY, North Dakota
J.D. HAYWORTH, Arizona XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
RON LEWIS, Georgia RICHARD E. NEAL, Massachusetts
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
Subcommittee on Human Resources
WALLY HERGER, California, Chairman
NANCY L. JOHNSON, Connecticut JIM McDERMOTT, Washington
BOB BEAUPREZ, Colorado BENJAMIN L. CARDIN, Maryland
MELISSA A. HART, Pennsylvania FORTNEY PETE STARK, California
CHRIS CHOCOLA, Indiana \9\ XAVIER BECERRA, California
JIM McCRERY, Louisiana RAHM EMANUEL, Illinois
DAVE CAMP, Michigan
PHIL ENGLISH, Pennsylvania
DEVIN NUNES, California \10\
Subcommittee on Select Revenue Measures
DAVE CAMP, Michigan, Chairman
JERRY WELLER, Illinois MICHAEL R. McNULTY, New York
MARK FOLEY, Florida \11\ LLOYD DOGGETT, Texas
THOMAS M. REYNOLDS, New York STEPHANIE TUBBS JONES, Ohio
ERIC CANTOR, Virginia MIKE THOMPSON, California
JOHN LINDER, Georgia JOHN B. LARSON, Connecticut
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
----------
\1\ Pursuant to H. Res. 872, removed June 16, 2006.
\2\ Resigned April 29, 2005.
\3\ Resigned September 29, 2006.
\4\ Assigned to Subcommittee May 12, 2005.
\5\ Reassigned May 12, 2005.
\6\ Resigned April 29, 2005.
\7\ Assigned to Subcommittee May 12, 2005.
\8\ Assigned to Subcommittee May 12, 2005.
\9\ Reassigned May 12, 2005.
\10\ Assigned to Subcommittee May 12, 2005.
\11\ Resigned September 29, 2006.
The Committee on Ways and Means submits its report on its
legislative and oversight activities for the 109th Congress
pursuant to the above stated provisions of the Rules of the
House. Section I of the report describes the Committee's
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 Committee's
oversight activities. It includes a copy of the Committee's
Oversight Agenda, adopted in open session on February 2, 2005,
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-109th Congresses.
Union Calendar No. 438
REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES OF THE COMMITTEE ON
WAYS AND MEANS DURING THE ONE HUNDRED NINTH CONGRESS
_______
December 22, 2006.--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 109TH CONGRESS
a. Tsunami Relief (P.L. 109-1)
On January 6, 2005, Chairman Thomas and Ranking Member
Charles Rangel cosponsored H.R. 241 to accelerate the income
tax benefits for charitable cash contributions for the relief
of victims of the December 26, 2004 Indian Ocean tsunami. H.R.
241 passed both the House and the Senate by unanimous consent
on January 6, 2005. The President signed the bill into law on
January 7, 2005 (P.L. 109-1).
H.R. 241 allowed taxpayers to deduct on their 2004 tax
return donations made in January 2005 for the relief of victims
affected by the December 26, 2004 Indian Ocean tsunami.
b. Leaking Underground Storage Tank Trust Fund (P.L. 109-6)
On March 14, 2005, Chairman Thomas introduced H.R. 1270
which proposed to extend the leaking underground storage tank
trust fund financing rate. The trust fund is financed with an
excise tax of 0.1 cent per gallon that is imposed on the sale
of gasoline, diesel, and other motor fuels. This tax was set to
expire on March 31, 2005. The bill proposed to extend the trust
fund's financing through September 30, 2005. The bill passed
the House on March 16, 2005 under suspension of the rules by a
vote of 431-1. The bill passed the Senate without amendment, by
Unanimous Consent, on March 17, 2005, and was signed by the
President on March 31, 2005 (P.L. 109-6).
c. FEMA Disaster Mitigation (P.L. 109-7)
On March 7, 2005, Representative Mark Foley and
Representative Bobby Jindal introduced H.R. 1134, which would
prevent the Internal Revenue Service from taxing Americans who
receive Federal Emergency Management Agency (FEMA) grants to
take preventative measures against natural disasters. H.R. 1134
passed the House of Representatives by a voice vote on March
14, 2005. The Senate passed the bill, amended, by U.C. on April
13, 2005, and the House agreed to the Senate amendment by U.C.
on April 14, 2005. The President signed the bill into law on
April 15, 2005 (P.L. 109-7).
H.R. 1134 implemented the President's budget proposal for
mitigation grants. In general, the bill removed the tax on any
payments made to or for the benefit of the owner of any
property for hazard mitigation, giving taxpayers the assurance
that they could accept assistance without higher taxes.
Taxpayers that receive disaster mitigation grants to
improve their property are not permitted to increase the basis
of their property due to the improvements made through the
grants.
d. Surface Transportation Extension Act of 2005 (P.L. 109-14)
Representative Don Young introduced H.R. 2566, the
``Surface Transportation Extension Act of 2005,'' on May 24,
2005 to extend transportation-related programs funded by the
Highway Trust Fund. The next day, the House passed the bill
under suspension of the rules by voice vote. On May 26, 2005,
the Senate passed the bill without amendment by unanimous
consent. The President signed the bill into law on May 31, 2004
(P.L. 109-14).
The bill provided an extension of highway, highway safety,
motor carrier safety, transit, and other programs funded by the
Highway Trust Fund pending enactment of a law reauthorizing the
Transportation Equity Act for the 21st Century (TEA-21). The
tax-related provisions in the bill extended authorization of
the use of the Highway Trust Fund, the Mass Transit Account,
and the Aquatic Resources Trust Fund for obligations under TEA-
21 before July 1, 2005 and extended the imposition of tax on
the use of certain heavy vehicles through September 30, 2006.
e. Surface Transportation Extension Act of 2005, Part II (P.L. 109-20)
Representative Don Young introduced H.R. 3104, the
``Surface Transportation Extension Act of 2005, Part II'' on
June 29, 2005 to extend certain transportation-related programs
funded out of the Highway Trust Fund. The next day, the House
passed the bill by U.C. and the Senate passed the bill without
amendment by unanimous consent. The President signed the bill
into law on July 1, 2005 (P.L. 109-20).
The bill extended highway, highway safety, motor carrier
safety, transit, and other programs funded out of the Highway
Trust Fund pending enactment of a law reauthorizing the
Transportation Equity Act for the 21st Century (TEA-21). The
tax-related provisions in the bill extended authorization of
the use of the Highway Trust Fund, the Mass Transit Account,
and the Aquatic Resources Trust Fund for obligations under TEA-
21 before July 20, 2005.
f. Surface Transportation Extension Act of 2005, Part III (P.L. 109-35)
Representative Don Young introduced H.R. 3332, the
``Surface Transportation Extension Act of 2005, Part III,'' on
July 19, 2005 to extend certain transportation-related programs
funded out of the Highway Trust Fund. The House passed the bill
on July 19, 2005 by unanimous consent, as did the Senate later
that day. The President signed the bill into law on July 20,
2005 (P.L. 109-35). The tax-related provisions extended
authorization of the use of certain trust funds, as in Part II
until July 21, 2005.
g. Surface Transportation Extension Act of 2005, Part IV (P.L. 109-37)
Representative Don Young introduced H.R. 3377, the
``Surface Transportation Extension Act of 2005, Part IV,'' on
July 21, 2005 to extend certain transportation-related programs
funded by the Highway Trust Fund. The House passed the bill
that day by unanimous consent, as did the Senate later that
day. The President signed the bill into law on July 22, 2005
(P.L. 109-37). The tax-related provisions extended
authorization of the use of certain trust funds, as in Parts II
and III until July 27, 2005.
h. Surface Transportation Extension Act of 2005, Part V (P.L. 109-40)
Representative Don Young introduced H.R. 3453, the
``Surface Transportation Extension Act of 2005, Part V'' on
July 27, 2005 to extend certain transportation-related programs
funded by the Highway Trust Fund. That day, the House and
Senate both passed the bill by unanimous consent. The President
signed the bill into law on July 28, 2005 (P.L. 109-40). The
tax-related provisions extended authorization of the use of
certain trust funds, as in Parts II, III and IV until July 30,
2005.
i. Surface Transportation Extension Act of 2005, Part VI (P.L. 109-42)
Representative Don Young introduced H.R. 3512, the
``Surface Transportation Extension Act of 2005, Part VI,'' on
July 28, 2005 to extend certain transportation-related programs
funded by the Highway Trust Fund. The next day, the House and
Senate passed the bill by unanimous consent. The President
signed the bill into law on July 30, 2005 (P.L. 109-42). The
tax-related provisions extended authorization of the use of
certain trust funds, as in Parts II, III and IV until August
15, 2005.
j. Energy Policy Act of 2005 (P.L. 109-58)
On April 12, 2005, Chairman Thomas introduced H.R. 1541,
the ``Enhanced Energy Infrastructure and Technology Tax Act of
2005.'' The full Committee held a markup of the bill on April
13, 2005, ordered the bill favorably reported, as amended, by a
vote of 26-11 (H. Rept. 109-45). The reported bill, H.R. 1541,
was subsequently merged into H.R. 6, the ``Energy Policy Act of
2005.'' H.R. 6 passed the House on April 21, 2005 by a vote of
249-183. The Senate passed the bill, as amended, on June 28,
2005, by a vote of 85-12. The two chambers agreed to go to
conference, and a Conference Agreement was reached on July 27,
2005 (H. Rept. 109-190). The House passed the Conference
Agreement of the bill on July 28, 2005 by a vote of 275-156.
The Senate approved the Conference Agreement the following day
by a vote of 74-26 and it was signed by the President on August
8, 2005.
The House-passed bill contained tax incentives to advance
energy policy in a number of areas. These included energy
infrastructure initiatives, miscellaneous energy tax incentives
and alternative minimum tax relief provisions.
With respect to energy infrastructure initiatives, the
House bill contained a number of tax incentives to encourage
greater investment in needed energy infrastructure. For
example, the bill provided for a reduced recovery period (15
years) for assets used in the distribution of natural gas.
Similarly, the bill also reduced the recovery period for assets
used in the transmission of electricity from 20 to 15 years.
Other infrastructure incentives included a reform of nuclear
decommissioning rules and revised amortization of pollution
control devices.
With respect to miscellaneous energy tax incentive, the
House bill included energy efficiency incentives such as a
credit for installation of residential solar equipment, a
credit for energy improvements to existing homes and advance
lean burn vehicle tax credits.
With respect to alternative minimum tax relief, the bill
included several provisions to reduce the effect of the
alternative minimum tax, including relief for taxpayers
claiming energy-related tax credits.
The Senate-passed bill, S. 10, contained fewer provisions
related to energy infrastructure but did include numerous
incentives for energy efficiency and for renewable energy. Most
notably, the Senate passed bill included a provision expanding
and extending for three years the Section 45 production tax
credit for producing electricity from renewable energy sources
(including wind, biomass, geothermal and others).
The Conference Agreement as agreed to by the House and
Senate and as signed into law by the President adopted many
House provisions. Title XIII contains the agreed to tax
provisions which are summarized as follows:
Subtitle A of Title XIII of the Conference Agreement
provides a number of incentives for investment in energy
infrastructure and largely follows the House bill with certain
exceptions. The Conference Agreement includes a new production
tax credit for producing electricity from advanced nuclear
power facilities. The Agreement also provides for a 2-year
extension of the Section 45 renewable energy production tax
credit (through December 31, 2007). This provision also
modifies Section 45 to equalize the duration of the credit to
10 years for all qualifying sources of renewable energy.
Subtitle B of Title XIII of the Conference Agreement
contains various provisions related to domestic fossil fuel
security. These tax incentives include 50% expensing for
qualifying expansions made to refinery facilities, a
clarification to the recovery period for gas gathering
pipelines, and a new business tax credit for producing fuel
from coke or coke gas.
Subtitle C of Title XIII of the Conference Agreement
provides several energy efficiency and energy conservation tax
incentives. These incentives include a 30% tax credit for
installation of solar energy equipment businesses and in
residences. The subtitle also includes a tax incentive for
owners of energy efficient commercial buildings and for energy
efficient new homes. The Conference Agreement also adopts, with
modifications, the House provision which provides a tax credit
for energy efficient improvements to existing homes.
Subtitle D of Title XIII of the Conference Agreement
contains several motor vehicle and fuels incentives. These
incentives include an alternative motor vehicle credit which
offers a tax credit to the purchaser of a hybrid or lean burn
diesel vehicle. Other incentives are offered for installation
of alternative refueling property and for producing biodiesel.
A new credit was also created for renewable diesel. The
renewable diesel credit is available for producing a fuel from
biomass via a process involving thermal depolymizeration.
Subtitle E of Title XIII of the Conference Agreement
included other additional tax incentives including an enhanced
research and development credit for energy research, a National
Academy of Sciences study and report and a recycling study.
The Conference Agreement, Subtitle F of Title XIII,
contains several revenue raising provisions. These include a
reinstatement of the Oil Spill Liability Trust Fund tax. The
tax applies on April 1, 2007, or later, if the Secretary of the
Treasury estimates that, as of the close of that quarter, the
unobligated balance in the Oil Spill Liability Trust fund will
be less that $2 billion. Also, the Leaking Underground Storage
Tank Trust (LUST) Fund tax was extended through September 30,
2011. The provision also clarifies that dyed fuel is subject to
the LUST tax and without refund. Finally, there are provisions
that modify the recapture rules for amortizable Section 197
intangibles and that clarify the tire excise tax.
k. Safe, Accountable, Flexible, and Efficient Transportation Equity Act
of 2005 (P.L. 109-59)
On March 1, 2005, Chairman Thomas introduced H.R. 996, the
``Highway Reauthorization Tax Act of 2005.'' The bill was
ordered favorably reported, as amended, out of the Committee on
March 3, 2005 by voice vote (H. Rept. 109-13). The bill's
provisions were incorporated into H.R. 3, the ``Transportation
Equity Act: A Legacy for Users.'' H.R. 3 passed the House on
March 10, 2005 by a vote of 417-9. The Senate passed H.R. 3, as
amended, by a vote of 89-11. The Conference Report for the
renamed bill, the ``Safe, Accountable, Flexible, and Efficient
Transportation Equity Act of 2005,'' was filed on July 28, 2005
(H. Rept. 109-203), and passed the House and the Senate the
next day by votes of 412-8 and 91-4, respectively.
In general, the revenue provisions of the ``Transportation
Equity Act: A Legacy for Users'' as passed by the House would
have extended the Highway Trust Fund expenditure authority and
related expiring excise taxes.
The excise taxes are imposed to finance the Federal Highway
Trust Fund program. These taxes are highway motor fuels taxes
(on gasoline, diesel fuel, kerosene, and special motor fuels),
a retail sales tax on heavy highway vehicles, a manufacturers'
excise tax on heavy vehicle tires, and an annual use tax on
heavy vehicles.
The excise tax rates on highway motor fuels are 18.3 cents
per gallon for gasoline, 24.3 cents per gallon for diesel fuel
and kerosene, and 18.3 cents per gallon for special motor
fuels. With the exception of 4.3 cents per gallon of these
Highway Trust Fund fuels tax rates, all of these taxes were
scheduled to expire after September 30, 2005. The bill proposed
to extend these taxes through September 30, 2011.
The Highway Trust Fund also receives revenues from a 12-
percent excise tax imposed on the first retail sale of heavy
highway vehicles, tractors, and trailers (generally, trucks
having a gross vehicle weight in excess of 33,000 pounds and
trailers having such a weight in excess of 26,000 pounds); an
excise tax imposed at graduated rates on highway tires weighing
more than 40 pounds; and an annual use tax imposed on highway
vehicles having a taxable gross weight of 55,000 pounds or
more. The maximum rate for this tax is $550 per year, imposed
on vehicles having a taxable gross weight over 75,000 pounds.
These taxes were scheduled to expire on September 30, 2005. The
bill proposed to extend these taxes through September 30, 2011.
Under present law, most of the highway motor fuels excise
tax revenues and the non-fuel excise tax revenues discussed
above are dedicated to the Highway Trust Fund. Expenditures
from this Fund were authorized (subject to appropriations)
through May 30, 2005. The bill proposed to extend the Highway
Trust Fund expenditure authority through September 30, 2009.
A separate Mass Transit Account exists within the Highway
Trust Fund. Expenditures from the Account were authorized
(subject to appropriations) through May 30, 2005. The bill
proposed to extend the Account expenditure authority through
September 30, 2009.
The bill proposed to extend a special enforcement
provision, the ``Basso rule,'' which prevents expenditure of
Highway Trust Fund monies for purposes not authorized by the
Internal Revenue Code. If such unapproved expenditures occur,
no further excise tax receipts would be transferred to the
Highway Trust Fund. Rather, the tax receipts will be retained
in the General Fund.
The Aquatic Resources Trust Fund (consisting of the Sport
Fish Restoration Account and the Boat Safety Account) is funded
by a portion of the receipts from the excise tax imposed on
motorboat fuel taxes and small-engine fuel taxes. Most of these
funds are first deposited into the Highway Trust Fund before
being transferred to the Aquatic Resource Trust Fund. However,
a portion of these funds are retained by the General Fund.
Transfers from the Highway Trust Fund to the Aquatic Resources
Trust Fund were authorized through September 30, 2005.
Expenditures from the Boat Safety Account were authorized
(subject to appropriations) through May 30, 2005. The bill
proposed to authorize Highway Trust Fund transfers to the
Aquatic Resources Trust Fund through September 30, 2009, extend
the Boat Safety Account expenditure authority through September
30, 2009, and eliminate the General Fund retention of motorboat
fuel taxes and small-engine fuel taxes for taxes imposed after
September 30, 2005.
Two highway-related technical corrections were also
included in the House-passed bill. Two provisions enacted in
the American Jobs Creation Act of 2004 (P.L. 108-357) related
to highway funding required technical correction. One
correction was a conforming amendment to the Volumetric Ethanol
Excise Tax Credit provision. The other correction clarified
that the rate for jet fuel used in noncommercial aviation is
4.3 cents per gallon and that users of aviation fuel in
commercial aviation must register with the IRS in order for the
4.3-cents-per-gallon rate to apply.
The Conference Agreement included many of the provisions
included in the House-passed bill and added several others,
most of which were incorporated from the Senate-passed
transportation bill. The revenue provisions of the Conference
Agreement extended expenditure authority from the Highway Trust
Fund and Aquatic Resources Trust Fund through September 30,
2009. The related expiring excise taxes that finance the trust
fund were extended through September 30, 2011. The Conference
Agreement also required that unfunded highway authorizations
exceed projected net Highway Trust Fund tax receipts for the
48-month period beginning at the close of each fiscal year.
The Conference Agreement also modified the gas guzzler tax
(IRC Section 4064). This provision exempts limousines over
6,000 pounds unloaded gross vehicle weight from the gas guzzler
tax. It specifies that tractors weighing 19,500 pounds gross
vehicle weight or less with a gross combined weight of 33,000
pounds or less are exempt from the 12-percent excise tax on
heavy highway vehicles. The Conference Agreement expanded the
ethanol excise tax credit to include other alternative fuels
that displace conventional petroleum products. Alternative
fuels now include natural gas, liquid petroleum gas, P Series
fuels, diesel from coal, and liquid hydrocarbons derived from
biomass. The Conference Agreement also increased the tax on
alternative fuels to the same level of taxes applied to
gasoline and diesel. Alternative fuels are entitled to a tax
credit equal to 50 cents per gallon.
The Conference Agreement eliminated the Boat Safety Account
and transforms the Sport Fish Restoration Account into the
Sport Fish Restoration and Boating Trust Fund. It repealed the
harbor maintenance tax on exports and caps the 10-percent
excise tax on fishing rods at $10.
The Agreement repealed the requirement that crop-dusters
receive consent from farmers to apply for refunds and clarifies
that travel to and from a farm is exempt use. This provision
also extends the exemption of helicopters used in timber
operations from the ticket and flight segment taxes to fixed-
wing aircraft. The Conference Agreement expanded the definition
of a rural airport to include airports not connected by paved
roads to another airport and having fewer than 100,000
passengers on flights of at least 100 miles per year. The
Conference Agreement also exempts from ticket taxes,
transportation by a seaplane, with respect to any segment
consisting of a takeoff from, and a landing on, water, but only
if the places at which such takeoff and landing occur do not
receive financial assistance from the Airport and Airways Trust
Fund. For purposes of the fuel taxes, transportation by
seaplane is treated as noncommercial aviation. Sightseeing
flights were also exempted from the airline ticket tax.
The Conference Agreement repealed the special occupational
taxes relating to alcoholic beverages. It provided an income
tax credit for distilled spirits wholesalers and for distilled
spirits in control of State bailment warehouses for costs of
carrying federal excise tax on bottled distilled spirits in
inventory. The Conference Agreement allowed small distillers,
brewers and winemakers to file excise taxes quarterly instead
of every other week. Also, the excise tax on firearms was
repealed for persons who manufacture, produce, and import less
than 50 firearms, pistols, and revolvers during a calendar
year.
Several studies were commissioned by the Conference
Agreement to examine ways to improve and reform collections of
excise taxes. Also included is the establishment of a
bipartisan Motor Fuel Tax Enforcement Advisory Commission to
review fuel tax collections and to submit recommendations for
improving enforcement of fuel tax collections and the
establishment of a National Surface Transportation
Infrastructure Financing Commission to report on the
sufficiency of Highway Trust Fund revenues and alternative
approaches for generating trust fund revenues. The Conference
Agreement also directed the IRS to report on new technologies
that can be used to reduce diesel fuel tax evasion, including
the use of chemical markers and to conduct a study regarding
the amount of fuel used by trucks to operate equipment that is
not related to the transportation function of the vehicle. The
latter study will propose options for exempting this fuel from
tax, if administratively feasible.
The Conference Agreement provided $15 billion of tax-exempt
bond financing authority to finance highway projects and rail-
truck transfer facilities. The Conference Agreement also
allowed the North Carolina Railroad Company to convert from a
real estate investment trust to a state-owned tax exempt entity
without incurring tax on built-in gains.
The Conference Agreement extended the provision that
prevents expenditure of Highway Trust Fund monies for purposes
not authorized by the Internal Revenue Code. It also added a
similar provision to address the LUST Trust Fund. If
unauthorized expenditures from the LUST Trust Fund occur, no
further excise tax receipts would be transferred to the LUST
Trust Fund.
The Conference Agreement included seven provisions to
combat fuel fraud and increase Highway Trust Fund receipts. It
taxed all removals of kerosene (other than directly into an
aircraft) at 24.4 cents per gallon. If kerosene that is taxed
at 24.4 cents is used for aviation, then a refund is available
to reduce the tax to the applicable aviation fuel rate. The
Secretary of Treasury will transfer from the Highway Trust Fund
to the Airport and Airway Trust Fund amounts based on the
aviation use of kerosene. Under the Conference Agreement,
farmers must buy clear fuel and apply for refunds of tax paid
on fuel used for farming. Farmers may continue to buy dyed
exempt fuel. The Conference Agreement required credit card
companies to register with the IRS and be the party responsible
for claiming refunds if a qualified exempt entity used a credit
card to purchase the fuel. Reregistration is required in the
event of a change of ownership of a registered blender,
pipeline operator, position holder, refiner, terminal operator
and vessel operator. If the ownership changes, the new owners
will require a new registration (except in case of publicly
traded corporation). A $10,000 penalty will be imposed on those
who fail to apply for a new registration. The Department of
Homeland Security and the Department of Treasury are to
transmit information pertaining to taxable fuels destined for
importation into the United States to the IRS. The Conference
Agreement required ships and barges to register for tax-exempt
bulk transfers of fuel. It also imposed a $10,000 penalty for
anyone who knowingly sells diesel which does not comply with
Environmental Protection Agency low-sulfur diesel regulations.
The two highway-related technical corrections from the
House-passed bill are included in the Conference Agreement. A
third technical correction was added to provide a conforming
cross-reference with the ``Transportation and Equity Act for
the 21st Century'' (P.L. 105-178).
l. Katrina Emergency Tax Relief Act of 2005 (P.L. 109-73)
On September 14, 2005, Representative Jim McCrery
introduced H.R. 3768, the ``Katrina Emergency Tax Relief Act of
2005,'' to aid in the relief and recovery efforts pursuant to
Hurricane Katrina. The next day, the House passed the bill
under suspension of the rules by a voice vote. The Senate
agreed to the bill with amendment later in the day. On
September 21, 2005, the bill passed the House, as amended by
the Senate, pursuant to House Resolution 454, by a vote of 422-
0. The Senate subsequently agreed to the House amendment to the
Senate amendment by unanimous consent. The President signed the
legislation on September 23, 2005 (P.L. 109-73).
The Act included special rules for using retirement funds
for relief relating to Hurricane Katrina, employment relief,
charitable giving incentives, and other provisions to assist
taxpayers affected by Hurricane Katrina. In general, those
affected by the hurricane were defined by those located in the
portion of the Hurricane Katrina disaster area determined by
the President before September 14, 2005, under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-
288) by reason of Hurricane Katrina. Some provisions applied
only to the ``core disaster area'' which is defined as that
portion of the Hurricane disaster area determined by the
President to warrant individual or individual and public
assistance. The Hurricane Katrina disaster area includes areas
within southern Louisiana, southern Mississippi, and the
southwestern portion of Alabama.
Title I of the ``Katrina Emergency Tax Relief Act of 2005''
provided for special rules for the use of retirement funds for
relief related to Hurricane Katrina. In general, distributions
from Individual Retirement Accounts and pensions are subject to
a 10-percent penalty if they are made before a certain age. The
penalty is intended to discourage individuals from withdrawing
funds that are needed for retirement. To ease the financial
burden faced by many families in the disaster area, the
proposal allowed eligible individuals to withdraw a maximum of
$100,000 from their IRAs and pensions without paying the 10-
percent penalty. Individuals eligible for the waiver may pay
income tax on the distribution over three years. Income tax is
not due if the distribution is repaid to the account within
three years. The proposal also increased the limit on loans
from pension plans from $50,000 to $100,000. To qualify for
these provisions, an individual's principal place of abode on
August 28, 2005 must have been located in the Hurricane Katrina
disaster area and the individual must have sustained an
economic loss by reason of such hurricane. Title I also allowed
for the recontributions of withdrawals for home purchases
cancelled due to Hurricane Katrina.
Title II provided for employment related relief. Employers
are allowed to claim the Work Opportunity Tax Credit (WOTC) if
they hire individuals from certain target groups who are
considered to face barriers to employment. The credit generally
equals 40 percent of the first $6,000 of wages paid to the
employee in the first year (i.e., the maximum credit is
$2,400). The bill temporarily creates a new target group under
the WOTC, called Hurricane Katrina employees. The credit was
available to small employers (i.e., an average of 200 or fewer
employees in the taxable year) whose business was inoperable as
a result of damage sustained by Hurricane Katrina.
In general, Title III changed certain rules regarding
donations for charitable purposes. Individuals could deduct
charitable donations up to 50 percent of their adjusted gross
income. Deductions for charitable donations are further limited
by the phase-out of itemized deductions. Under the bill, cash
donations to charities were exempt from the 50-percent income
limitation and the phase-out of itemized deductions if made
before January 2006. Donations to supporting organizations and
donor-advised funds did not qualify for this exclusion.
Corporations may deduct charitable donations to charities up to
10 percent of their taxable income. The bill waives the 10-
percent income limitation for cash donations related to
Hurricane Katrina relief efforts if the donations are made
before January 2006. The bill sets the mileage reimbursement
rate for charitable work at 70 percent of the standard business
mileage rate (48.5 cents per mile) through December 31, 2006.
If the individual is a volunteer and is reimbursed for the use
of the personal vehicle, the proposal ensures that the
individual does not have to pay income tax on the
reimbursement. This provision is effective through December 31,
2006. C-corporations could deduct the cost of food inventory
donations. The value of the deduction is equal to the lesser of
two times the basis or basis plus one-half of the added-value.
The proposal extends the current-law deduction for food
donations to S-corporations, partnerships and sole proprietors
through December 31, 2005. The bill also allows a special
charitable deduction through the end of the 2005 calendar year
for donations of educational books to public schools. Title III
created a special tax deduction for individuals who provide
rent-free housing to dislocated persons for at least 60 days.
The deduction is $500 for each dislocated person housed in the
individual's principal residence (up to a maximum of $2,000).
The deduction can be claimed in either 2005 or 2006, but cannot
be claimed in both years with respect to the same person.
Title IV included additional tax relief provisions. The
bill ensured that individuals affected by the hurricane are not
taxed on personal debt forgiven related to the hurricane, if
the debt was discharged before January 1, 2007. Also, the bill
waived the 10-percent and $100 floors on the deduction for
personal casualty losses attributable to Hurricane Katrina. The
bill extended the January 3, 2006 deadline the IRS set as a
result of Hurricane Katrina for filing tax returns and making
tax payments until February 28, 2006. The bill waived the
first-time homebuyer requirement for mortgage revenue bonds so
that individuals whose homes were rendered uninhabitable by
Hurricane Katrina can qualify for these low-interest rate
mortgages through 2007. In addition, the proposal provides that
up to $150,000 of the loan proceeds may be used to repair
damaged homes. Insurance proceeds are not taxable if they are
invested in replacement property within two years (with respect
to damaged business property) or four years (with respect to
damaged principal residences in Presidentially-declared
disaster areas). The bill increased the reinvestment period to
5 years as long as property in the disaster area was
involuntarily converted as a result of Hurricane Katrina and
the replacement property is located within the disaster area.
The bill allows individuals the option of using their 2004
income to calculate the child credit and the Earned Income Tax
Credit on their 2005 tax returns. This special rule applies to
individuals who were displaced from their principal residence
by reason of Hurricane Katrina. Finally, the bill grants the
Secretary of the Treasury authority to ensure that taxpayers do
not lose tax benefits or experience a change in filing status
in 2005 and 2006 due to temporary relocations by reason of
Hurricane Katrina.
m. Sportfishing and Recreational Boating Safety Act of 2005 (P.L. 109-
74)
On September 6, 2005, Representative Don Young introduced
H.R. 3649, the ``Sportfishing and Recreational Boating Safety
Act of 2005.'' The bill extended authorization for recreational
boating and boat safety expenditures, as well as enlarging
authorized funding for the Coast Guard. The bill passed the
House under suspension of the rules on September 13, 2005 by a
vote of 401-1. On September 15, 2005, it passed the Senate by
unanimous consent, with an amendment providing for technical
corrections to other legislation. The House passed the bill as
amended by the Senate on September 20, 2005. H.R. 3649 became
Public Law 109-74 when it was signed by the President on
September 29, 2005.
n. Gulf Opportunity Zone Act of 2005 (P.L. 109-135)
The Gulf Opportunity Zone Act of 2005. (H.R. 4440) was
introduced by Representative Jim McCrery (R-LA) on December 6,
2005, passed the House by a vote of 414-4 on December 7, 2005,
passed the Senate in amended form on December 15, 2005, and was
subsequently passed by the House as amended by the Senate by
unanimous consent on December 16, 2005, and signed by the
President on December 22, 2005 (P.L. 109-135).
As introduced and passed by the House, the bill expanded
tax relief for regions affected by Hurricane Katrina and
provided additional relief and incentives to rebuild for
regions affected by Hurricanes Rita and Wilma as well as
Hurricane Katrina. For areas within the Gulf Opportunity (GO)
Zone affected by Hurricane Katrina, the bill provided
additional tax exempt bond financing allocations of $2,500 per
capita, allowed additional advance refunding of certain exempt
bonds, authorized federal tax credit bonds and federally-
guaranteed bonds to aid local governments facing financing
difficulty because of tax base losses, provided special low
income housing credit allocations, and made available bonus
depreciation and expanded small business expensing limits for
capital investment. The bill also allowed expensing of
brownfields remediation (including petroleum contamination),
site demolition and clean up costs. The bill expanded the
rehabilitation tax credit, doubled the limit on reforestation
cost expensing, allowed a special net operating loss (NOL)
carry back for small timber growers and provided special NOL
treatment for public utility casualty losses and carry back
rules for deductions related to GO Zone property. The bill
clarified the treatment of traveling expenses incurred away
from home and would have designated certain public debt as
``Gulf Coast Recovery Bonds.''
For taxpayers in areas affected by Hurricanes Rita and
Wilma, the bill provided relief similar to what had earlier
been extended for the relief of Katrina victims. Included were
pension and retirement savings modifications providing greater
access to withdrawals, employee retention tax incentives,
suspension of income limits on charitable giving with regard to
contributions for hurricane relief and suspension of casualty
loss thresholds. Also included were administration relief
provisions for filing and special procedures for claiming the
Earned Income and refundable Child Credits.
The Senate amendment to H.R. 4440 modified a number of the
House bill's provisions, including eligibility standards
related to low income housing credits and employee retention
incentives. It also included an expanded New Markets Tax
Credit, education tax incentives, a temporary exclusion for
employer-provided housing in the GO Zone and a 30-percent
employer credit for such housing. It extended a series of
expiring tax provisions related to disclosure of return
information and undercover operations. The amendment extending
the law allowing combat pay to be included in income for the
purposes of calculating the Earned Income Credit and modified
the rules regarding suspension of interest and penalties when
the IRS fails to contact the taxpayer. Many of the Senate
modifications were preceded by related hurricane relief
proposals included in S. 2020 as considered by the Senate
earlier in the year.
The final version of H.R. 4440 allowed a tax credit for
investment in ``Gulf tax credit bonds.'' For this purpose, a
``Gulf tax credit bond'' is defined as any bond: (1) that is
issued by Alabama, Louisiana, or Mississippi after December 31,
2005, and before January 1, 2007; (2) 95 percent of the
proceeds of which are used to refinance existing bonds or make
loans to localities for such refinancing; and (3) the maturity
of which does not exceed 2 years. The bill requires States
issuing ``Gulf tax credit bonds'' to pledge matching amounts
equal to the face amount of such bonds. The bill limits the
amount of eligible ``Gulf tax credit bonds'' to $200 billion
for Louisiana, $100 billion for Mississippi, and $50 billion
for Alabama.
H.R. 4440 as enacted also included technical corrections on
tax legislation originally included in H.R. 3376.
o. Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-
222)
Chairman Thomas introduced H.R. 4297 on November 10, 2005
to provide for reconciliation pursuant to the concurrent
resolution on the budget for fiscal year 2006. The bill was
ordered favorably reported by the Committee as amended as the
``Tax Relief Extension Reconciliation Act of 2005'' by a 24-15
vote on November 15, 2005 (H. Rept. 109-304). On December 8,
2005, the bill passed the House on a 234-197 vote.
Related legislation was introduced by Senator Grassley on
November 16, 2005 as S. 2020. S. 2020 passed the Senate on
November 18, 2005 by a vote of 64-33. The Conference Report on
H.R. 4297 (H. Rept. 109-455) was filed on May 9, 2006, was
agreed to by the House on May 10, 2006 by a recorded vote of
244-185, and was agreed to by the Senate on May 11, 2006 by a
recorded vote of 54-44. It was signed by the President on May
17, 2006 (P.L. No. 109-222).
Title I of the bill as passed by the Committee and the
House of Representatives would have extended certain expiring
provisions through 2006 without modification. These provisions
were the deduction for State and local sales taxes; the
deduction for qualified tuition and related expenses; parity in
the application of certain limits to mental health benefits;
availability of Archer medical savings accounts; the welfare-
to-work credit; authority to issue qualified zone academy
bonds; the enhanced deduction for qualified computer donations;
the exclusion of certain expenses of elementary and secondary
school teachers from gross income; tax incentives for
investment in the District of Columbia; the allowance for
nonrefundable personal credits to be applied against the
alternative minimum tax; fifteen-year depreciation for
leasehold and restaurant improvements; the suspension of the
100-percent net-income limitation on percentage depletion in
the case of oil and gas from marginal wells; the Indian
employment credit; and, accelerated depreciation for business
property on Indian reservations. The bill would have also
extended the possessions tax credit for American Samoa. The
bill would have also extended the Work Opportunity Tax Credit
through 2006 and expand eligible hires by increasing the age
limit for food stamp recipients from 25 to 35. The credit for
increasing research activities would have also been extended
through 2006 as well. In addition to this extension, the
provision would have enhanced the credit by increasing the
value of the alternative incremental credit and by adding a new
alternative simplified credit.
Title II of the bill would have extended certain provisions
for 2 years. The saver's tax credit for eligible low-income
individuals who make contributions to an IRA or qualified
pension plan would have been extended through 2008. Through
2009, small businesses would be allowed to expense up to
$100,000 of investments in depreciable assets. The deduction
phases out dollar-for-dollar to the extent the business's
annual investments exceed $400,000. Under the bill, taxpayers
would be allowed to expense the costs incurred in cleaning up
certain contaminated sites (brownfields) through 2009 including
sites contaminated by petroleum products. The active financing
exception from the immediate taxation on foreign subsidiaries
of U.S. companies under Subpart F would be extended for 2
years. In addition to extending the active financing exception,
the provision also provided a 3-year exception from Subpart F
for certain cross-border payments of dividends, interest,
rents, and royalties that are funded with active income that
has not been repatriated. The bill would have extended for 2
years the preferential tax rates for long-term capital gains
and dividends which will other expire after 2008.
Title III of included temporary simplifications of present
law. It would have simplified the application of the active
trade or business test to certain corporate distributions.
Also, it would have treated environment cleanup settlement
funds as governmentally owned (i.e., not subject to tax) if
certain standards and requirements are met to encourage more
companies to establish settlement funds devoted to
environmental cleanup. It would have provided capital gains
treatment for self-created musical works when these works are
sold by the artist. It would have codified and extended the
present IRS exemption of the Permanent University Fund from the
tax-exempt bond arbitrage rules. The bill would have reduced
the eligible weight threshold to elect tonnage taxation from
10,000 to 6,000 deadweight tons. Finally, the bill would have
expanded eligibility for the qualified veterans' mortgage bond
programs that certain States use to finance affordable
mortgages for veterans by repealing the requirement that
veterans must have served before 1977.
As enacted, Title I of the Conference Agreement on H.R.
4297 includes: (1) a 2-year extension of enhanced Section 179
expensing for small business (through 2009), (ii) a 2-year
extension of reduced rates on capital gains and dividends
(through 2010); (3) a 2-year extension of the Subpart F active
financing exception (through 2008); and (4) enactment of the
Subpart F controlled foreign corporation ``look-through'' rule
for 5 years (through 2008).
Title II contains additional provisions that apply through
December 31, 2010. The provisions are: (1) clarification of
taxation of certain settlement funds; (2) modification of the
active business definition under Section 355; (3) modification
of certain States' authority to issue veterans' mortgage bonds;
(4) capital gains treatment of certain self-created musical
works; (5) modification of special arbitrage rule for certain
funds; (6) amortization of expenses incurred in creating or
acquiring music or music copyrights; (7) modification of
effective date of disregard of certain capital expenditures for
purposes of qualified small issue bonds; and (8) modification
of treatment of loans to qualified continuing care facilities.
Title III contains alternative minimum tax relief
provisions, including: (1) an increase in the alternative
minimum tax exemption levels for 2006 to $62,550 for joint
filers and $42,500 for single filers; and (2) the allowance of
nonrefundable personal credits against regular and alternative
minimum tax liability.
Title IV changes the timing of certain corporate estimated
tax installment payments.
Title V contains revenue offset provisions, including: (1)
application of earnings stripping rules to partners which are
corporations; (2) reporting of interest on tax-exempt bonds;
(3) 5-year amortization of geological and geophysical
expenditures for certain major integrated oil companies; (4)
application of Foreign Investment Real Property Tax Act
(FIRPTA) to regulated investment companies; (5) treatment of
distributions attributable to FIRPTA gains; (6) prevention of
avoidance of tax on investments of foreign persons in U.S. real
property through wash sale transactions; (7) denying
application of Section 355 to distributions involving
disqualified investment companies; (8) limits on loan and
redemption requirements on pooled financing requirements; (9)
requiring partial payments with submission of offers-in-
compromise; (10) an increase in the age of minor children whose
unearned income is taxed as if parent's income; (11) imposition
of withholding on certain payments made by government entities;
(12) relaxation of 2006 limits on conversion to Roth IRAs; (13)
repeal of Foreign Sales Corporation/Extra-Territorial Income
(FSC/ETI) binding contract relief; (14) limiting wages
attributable to domestic production taken into account in
determining deduction for domestic production; (15)
modification of exclusion for citizens living abroad; and (16)
an excise tax on involvement of accommodation parties in tax
shelter transactions.
p. Heroes Earned Retirement Opportunities Act (P.L. 109-227)
On April 6, 2005, Representative Virginia Foxx introduced
H.R. 1499. Under the bill, combat pay which is otherwise
excluded from gross income could be used to determine the
eligibility of contributions to retirement savings plans. H.R.
1499 passed the House on May 23, 2005 by voice vote under
suspension of the rules. On November 15, 2005, the bill was
discharged by the Senate Finance Committee by unanimous consent
and it passed the Senate with amendment to the effective date
of the bill later that day. The House passed the bill as
amended by the Senate with a further amendment (regarding
certain contributions) on May 9, 2006. The Senate passed the
bill as amended by the House on May 18, 2006, and the President
signed the bill into law on May 29, 2006 (P.L. 109-227).
q. Pension Protection Act of 2006 (P.L. 109-280)
Majority Leader John Boehner (for himself, Chairman Bill
Thomas, Chairman Howard P. ``Buck'' McKeon, Representative John
Kline, and Representative Dave Camp) introduced H.R. 4 on July
28, 2006. The House passed the bill the same day by a vote of
279-131. H.R. 4 went on to pass the Senate on August 3, 2006 by
a vote of 93-5. The President signed H.R. 4 into law on August
17, 2006 (P.L. 109-280). H.R. 4 reforms the single-employer and
multiemployer pension funding rules, makes permanent certain
retirement and saving incentives, and includes a number of new
incentives for retirement savings.
H.R. 4 was preceded in the House by action on H.R. 2830,
the ``Pension Security and Transparency Act of 2005''. H.R 2830
was introduced by Chairman Boehner of the House Committee on
Education and the Workforce, Chairman Thomas and others on June
9, 2005 and referred to the Committee on Education and the
Workforce and the Committee on Ways and Means. Education and
the Workforce ordered the bill reported with amendments on June
30, 2005. Subsequently, Ways and Means marked up H.R. 2830 and
ordered the bill reported as amended on November 9, 2005 by a
recorded vote of 23-17. The Committees' bills were combined in
a single text considered by the House under a rule and the
revised bill was passed by the House on December 15, 2005 by a
vote of 294-132. The House appointed conferees on H.R. 2830 and
the Senate amendment to the bill on March 8, 2006. The
conferees did not come to an agreement, but many aspects of the
House and Senate bills were modified and included in H.R. 4.
Like H.R. 4, H.R. 2830 included changes in funding
requirements for single and multi-employer plans. In general,
the bill would have required single employer defined benefit
plans to fund up to 100 percent of their pension liabilities
under revised measurement standards and established new funding
shortfall amortization rules. Multiemployer plans would also
have been required to amortize shortfalls over a fifteen year
period and would be subject to funding new improvement
requirements based on the pensions' being endangered (between
65 and 80 percent funded) or critical (less than 65 percent
funded). The bill also would have increased the maximum tax-
deductible fund limit for multiemployer plans from 100 percent
to 140 percent of current liability to encourage additional
employer contributions during profitable years.
H.R. 2830 also would have clarified current law on hybrid
pension plans by creating a uniform age discrimination standard
for all defined benefit plans, improved notice and disclosure
requirements for single and multiemployer plans, given
employers the option of providing employees with access to
professional investment advice and clarified the standards
under which annuities can be offered. The bill would have
allowed health plans to recover benefits paid out once the
participant is reimbursed by a third party for the same
expenses and allowed sponsors of certain 401(k) plans to modify
investment options when a pension plan changes administrators
or replaces existing investment options.
As reported by the Committee on Ways and Means, H.R. 2830
also included provisions to make pension and retirement savings
provisions from the ``Economic Growth and Tax Relief
Reconciliation Act of 2001'' (P.L. 107-16) permanent. Among
other changes, it also would have made the Saver's Credit
permanent and included proposals to enhance pension
participation through automatic enrollment procedures. The bill
as reported would have allowed combat pay to be counted when
determining amounts which could be contributed to IRAs,
permitted members of the National Guard and Reserves called to
active duty to take distributions from retirement plans and
accounts without paying the 10 percent early withdrawal penalty
and eliminated the 10 percent penalty for participants in
Deferred Retirement Option Plans (DROP plans). The bill would
have allowed direct deposit of tax refunds into IRAs.
As reported by the Committee on Ways and Means, H.R. 2830
also included health care affordability provisions. It would
have allowed creation of insurance products combining annuities
and long-term care coverage and tax free distributions from
government retirement plans for public safety officers for the
purchase of health and long-term care coverage. Also included
in H.R. 2830 was a provision permitting Flexible Spending
Account (FSA) participants to roll over up to $500 per year in
their FSA or to transfer that amount to a Health Savings
Account (HSA).
As enacted, H.R. 4 included pension reform provisions based
on H.R. 2830 and Senate pension reform bill provisions.
Title I reforms the funding rules for single-employer
defined benefit pension plans. The bill provides a permanent
interest rate based on a ``modified yield curve'' to measure
current pension liabilities. Interest rates for measuring
liabilities and asset values may be smoothed over 24 months.
Employers are required to make contributions to meet a 100
percent funding target (phased-in for certain plans that are
well funded). Any funding shortfall must be amortized over
seven years. The bill reforms the use of credit balances.
Sponsors of certain plans that are ``at-risk'' must make
accelerated contributions. A plan is deemed to be ``at-risk''
if, for the preceding plan year, (1) the plan's assets are less
than 70 percent of its liabilities calculated using ``at-risk''
assumptions, and (2) the plan's assets are less than 80 percent
of its liabilities calculated using non-at-risk assumptions.
Plans that are ``at-risk'' must assume that during the next 10
years participants will retire at the earliest date available
under the plan and will elect the most expensive benefit
available under the plan. Plans with fewer than 500
participants are exempt from the ``at-risk'' rules.
Title II of H.R. 4 reforms the funding rules for
multiemployer defined benefit pension plans. The bill modifies
the amortization periods applicable to multiemployer plans so
the amortization period for most charges is 15 years. The bill
requires the adoption of a funding improvement plan for
multiemployer pension plans that are in ``endangered status''
and a rehabilitation plan for multiemployer plans that are in
``critical status.'' The maximum deductible amount is increased
to 140 percent of current liability. Benefit increases are
prohibited if the increase causes the plan to fall below 65
percent funded status.
Title III extends for 2 years (2006 and 2007) the long-term
corporate bond rate established under the Pension Funding
Equity Act of 2004 (P.L. 108-218) as a temporary replacement
for the 30-year Treasury rate in calculating pension funding
and premium payments to the Pension Benefit Guaranty
Corporation (PBGC). The bill changes the interest rate
assumptions used in calculating and applying benefit
limitations to lump sum distributions.
Title IV modifies the calculation liability for purposes of
the PBGC variable rate premium to reflect the changes to the
general funding rules under the bill. The bill eliminates the
full funding exception to the variable rate premium and makes
permanent the termination premium enacted in the Deficit
Reduction Act of 2005 (P.L. 109-171). In addition, Title IV
establishes special funding rules for certain plans maintained
by commercial airlines, limits the PBGC guarantee of certain
shutdown benefits, authorizes the PBGC to pay interest on
premium overpayment refunds, and makes the position of PBGC
Director a Presidential appointment subject to Senate
confirmation by both the Finance Committee and the Health,
Education, Labor, and Pensions Committee.
Title V requires both single and multiemployer defined
benefit pension plans to include more detailed and specific
information on their form 5500 filings. The bill also requires
disclosure of termination information to plan participants,
notice of freedom to divest employer securities, periodic
pension benefit statements and notice to participants or
beneficiaries of blackout periods.
Title VI provides a prohibited transaction exemptions under
Employee Retirement Income Security Act (ERISA) (P.L. 93-406)
and the Code for the provision of certain investment advice.
The bill provides prohibited transaction exemptions under ERISA
and the Code for certain block trades. The bill provides a
prohibited transaction exemption under ERISA and the Code for
certain transactions that are corrected within 14 days of the
date the disqualified person discovers, or reasonably should
have discovered, the transaction was a prohibited transaction.
Title VII clarifies the legal uncertainty associated with
hybrid pension plans and provides that defined benefit plans
are not age discriminatory if, as of any date, a participant's
accrued benefit under the terms of the plan is equal to the
accrued benefit of any similarly situated younger participant.
Title VIII includes a number of tax incentives to enhance
retirement savings, including: making permanent the pension and
retirement saving provisions (including the saver's credit) in
``The Economic Growth and Tax Relief Extension Act of 2001'';
requiring the IRS to establish procedures for depositing tax
refunds directly into an IRA; creating a safe harbor to
encourage employers to offer automatic enrollment in employer-
sponsored defined contribution pension plans; and eliminating
the aggregate limit on the use of excess funds from black lung
trusts to be used to fund retiree health for coal miners. The
bill included the modified long-term care annuity and public
safety officers' distribution rules, but not the FSA rollover
rule.
H.R. 4 also includes several provisions related to Judges
of the U.S. Tax Court. The bill includes provisions that
provide cost-of-living adjustments to annuities paid to
survivors of Tax Court judges and authorizes the Tax Court to
pay the increased cost of life insurance for Tax Court judges.
The bill also allows Tax Court judges to participate in the
U.S. Government Thrift Savings Plan. The bill consolidates
judicial review of collection due process activity in the Tax
Court and clarifies that the Tax Court may authorize its
special trial judges to enter decisions in employment tax cases
that are subject to certain small case proceedings. The bill
confirms that the Tax Court may apply equitable recoupment
principles to the same extent as District Courts and the Court
of Federal Claims. The bill also clarifies, in keeping with
current Tax Court procedure, that the Tax Court is authorized
to impose a $60 filing fee for all cases commenced by petition
and expands the use of fees to provide services to pro se
taxpayers.
Title XII includes provisions related to exempt
organizations by providing incentives for charitable giving and
reforms for certain exempt organizations. These incentives and
reforms had been previously passed by the Senate. In general,
the charitable giving incentives are effective for 2 years
through 2007, and the reforms are enacted on a permanent basis.
The charitable giving incentives include a provision that
provides an exclusion from gross income for certain
distributions of up to $100,000 from a traditional individual
retirement account (IRA) or a Roth IRA, which would otherwise
be included in income. To qualify, the charitable distribution
must be made to a tax-exempt organization to which deductible
contributions can be made. Donations to supporting
organizations and donor-advised funds do not qualify for this
exclusion. For donations of food inventory, the bill extends to
all trades and businesses an enhanced deduction equal to the
lesser of (i) the taxpayer's basis plus one-half of the
difference between fair market value and basis, and (ii) twice
the taxpayer's basis in the contributed inventory. The bill
would allow the reduction of a shareholder's basis in the stock
of an S corporation as a result of the donation of such stock
to charity to equal the shareholder's pro rata share of the
basis of the contributed property. The provision extends the
current-law provision that adds public schools to the list of
eligible donees for the enhanced deduction for contributions of
qualified book inventory by C corporations. H.R. 4 provides
that payments received or accrued by certain exempt parent
organizations from taxable controlled subsidiaries will not be
treated as unrelated business taxable income. Exempt
organizations are required to report these amounts received
from controlled organizations. The bill raises the charitable
deduction limit from 30 percent of adjusted gross income to 50
percent of adjusted gross income for qualified conservation
contributions. This charitable deduction limit is raised to 100
percent of adjusted gross income for eligible farmers and
ranchers. The bill would also exempt qualified blood collection
organizations from paying certain excise taxes.
The reforms related to tax-exempt organizations in H.R. 4
require charitable organizations to report to the Secretary of
the Treasury certain acquisitions of interests in certain
insurance contracts for 2 years beginning on the date of
enactment. The bill doubles the amount of excise taxes
applicable to certain activities by charities, social welfare
organizations, private foundations and exempt organization
managers. The bill allows a charitable deduction with respect
to easements concerning buildings located in a registered
historic district. However, the easement must provide that no
portion of the exterior of the building may be changed or
altered in a manner inconsistent with the historical character
of the exterior. This provision also clarifies that the
charitable deduction is reduced if a rehabilitation tax credit
has been claimed with respect to the donated property. The bill
limits the basis for donated taxidermy property to the cost of
preparing, stuffing and mounting an animal. The value of the
deduction would be equal to the lesser of basis or fair market
value. The bill requires the recovery of the tax benefit
derived from the contribution of property with respect to which
a fair market value deduction was claimed if the property is
not used for an exempt purpose of the donee organization. The
bill specifies that no deduction is allowed for charitable
contributions of clothing and household items if such items are
not in good used condition or better. In addition, the
Secretary may deny a deduction for any item with minimal
monetary value.
The bill further requires that in the case of a charitable
contribution of money, regardless of the amount, the donor must
maintain a cancelled check, bank record or receipt from the
donee organization showing the name of the donee organization,
the date of the contribution, and the amount of the
contribution. The bill also requires that charities receiving a
fractional interest in an item of tangible personal property
must take complete ownership of the item within 10 years or the
death of the donor, whichever is first. In addition, the donee
must have (i) taken possession of the item at least once during
the 10-year period as long as the donor remains alive, and (ii)
used the item for the organization's exempt purpose. The bill
lowers the thresholds for imposing accuracy-related penalties
on a taxpayer who claims a deduction for donated property for
which a qualified appraisal is required. The provision also
applies for purposes of estate tax appraisals and provides
definitions of a qualified appraiser and qualified appraisals.
The bill imposes certain requirements on tax-exempt
organizations that offer credit counseling services, subject to
a four-year transition rule to limit the allowable amount of
debt management plan (DMP) income to 50 percent of revenues.
This provision also imposes restrictions on organizations
offering credit counseling services with respect to loans,
fees, and solicitation of contributions from consumers
receiving counseling. The bill amends the definition of gross
investment income to include capital gains, notional principal
contracts, annuities, and other substantially similar
investment income.
The bill clarifies the definition of a convention or
association of churches and requires certain exempt
organizations to file an annual notice with the IRS containing
basic contact and financial information. The bill provides that
upon written request by an appropriate state official, the
Secretary may disclose information regarding organizations for
which the IRS has denied or revoked tax-exempt status, certain
other actions the IRS may have taken, and returns filed by tax-
exempt organizations. It also extends the present-law public
disclosure requirements applicable to Form 990 to the unrelated
business income tax returns of Section 501(c)(3) organizations.
Under the bill, the Secretary will undertake a study on the
organization and operation of donor-advised funds and of
supporting organizations under the bill. The study will include
an examination of requirements for determining if such
organizations are operating in a manner consistent with the
purposes or functions constituting the basis for their tax-
exempt status.
Finally, H.R. 4 applies an excess benefits transaction tax
on any grant, loan, compensation or other similar payments from
a donor-advised fund to a person that with respect to such fund
is a donor, donor adviser, or a related person, and from a
supporting organization to a substantial contributor or a
related person. This provision imposes excess business holdings
rules on donor advised funds and Type III supporting
organizations. Transition rules apply to the present holdings
of donor-advised funds and supporting organizations. Supporting
organizations that are functionally integrated with their
charity would not be subject to any excess business holdings.
r. Tax Relief and Health Care Act of 2006 (H.R. 6111) \1\
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\1\ At the time of printing, the Public Law number for H.R. 6111
was not available.
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H.R. 6111, originally introduced by Congresswoman Ellen
Tauscher (D-CA), was passed with an amendment by the House
under suspension of the rules on December 5, 2006. The original
bill gave the Tax Court jurisdiction over cases involving
innocent spouse relief. The Senate passed the bill by unanimous
consent with an amendment to the effective date and returned
the bill to the House on December 7, 2006. On December 8, 2006,
the House passed H.R. 6111 with an amendment by a vote of 367
to 45 after defeating an amendment sponsored by Representative
Ed Markey to the Senate amendment by a vote of 205-207. The
Senate followed suit, passing the bill by a vote of 67-21 on
December 9, 2006.
As amended by the House on December 8, 2006 and passed by
the Senate, H.R. 6111 included the House-passed legislation on
Tax Court jurisdiction and a number of provisions previously
passed by the House in H.R. 5970. Generally, the bill extended
provisions of law such as the research and experimentation
credit, the tuition deduction, deduction for sales taxes and
the above the line deduction for teachers' out of pocket
expenses for a period of two years beginning after 2005 as was
done in H.R. 5970. The amended bill also included provisions
making a number of Tax Increase Prevention and Reconciliation
Act of 2005 (P.L. 109-222) provisions permanent as well as
deductions for private mortgage insurance premiums, adjustments
to the tonnage tax for Great Lakes shipping and other
provisions which had been included in H.R. 5970. It included
abandoned mine fund reforms from H.R. 5970 intended to address
retiree health care needs.
H.R. 6111 included several items not included in H.R. 5970.
These provisions included adjustments in Medicare payments to
physicians, extension of the Section 45 energy tax credits and
certain other incentive programs originally enacted in the
Energy Policy Act of 2005 (P.L. 109-58), 50 percent bonus
depreciation for investment in cellulosic ethanol facilities,
modification of tax credits for gasification of sub-bituminous
coal, wilderness legislation pertaining to White Pine County,
Nevada, authorizing exploration of certain areas of the Outer
Continental Shelf by including the text of S. 3711 as passed by
the Senate (with one technical amendment) and included the
provisions of H.R. 6134, the Health Opportunity Empowerment Act
of 2006 as ordered reported by the Committee on Ways and Means
by a vote of 24-14 on September 27, 2006. The Health
Opportunity Empowerment Act provisions modified contribution
limits for HSAs, allow taxpayers to have an HSA though still
technically eligible for FSAs benefits, revised the date for
calculating cost of living adjustments, allow employers to make
larger contributions to HSAs on behalf of lower-income workers
and permitted rollovers of funds from Health Reimbursement
Accounts, FSAs and IRAs. The bill included several trade-
related provisions, including modifications of the exemption
from tariffs for cigarettes brought in for personal use, cotton
shirt and trust fund tariff provisions and legislation to
implement the U.S.-European Union accord on wine labeling.
s. Fallen Firefighters Assistance Tax Clarification Act of 2006 (H.R.
6429)
Rep. Mary Bono introduced H.R. 6429 on December 8, 2006.
The bill treats payments by charitable organizations to the
families of those firefighters who died as result of the
October 2006 Esperanza Incident fire in southern California as
exempt payments. It passed the House by Unanimous Consent and
passed the Senate without amendment by Unanimous Consent on
December 9, 2006. The bill was signed by the President on
December 21, 2006.\2\
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\2\ At the time of printing, the Public Law number for H.R. 6429
was not available.
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t. Leaking Underground Storage Tank Trust Fund (H.R. 6131)
On September 21, 2006, Representative Chris Chocola
introduced H.R. 6131, to permit certain expenditures from the
Leaking Underground Storage Tank Trust. The bill passed the
House under suspension of the rules by voice vote on September
26, 2006. The bill passed the Senate without amendment by
unanimous consent on December 8, 2006 and was signed by the
President on December 20, 2006.\3\ The text of H.R. 6131 was
also included in H.R. 6111 as enacted.
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\3\ At the time of printing, the Public Law number for H.R. 6131
was not available.
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2. TAX RELIEF AND OTHER PROPOSALS
a. Death Tax Repeal Permanency Act (H.R. 8)
Representative Kenny Hulshof introduced H.R. 8 on February
17, 2005. H.R. 8 would extend permanently the repeal of the
estate tax. The bill passed the House on April 13, 2005 by a
272-162 vote. The bill has not been considered by the Senate.
b. Rail Infrastructure Development and Expansion Act for the 21st
Century (RIDE 21) (H.R. 1631)
H.R. 1631 was introduced by Chairman Don Young of the
Committee on Transportation and Infrastructure on April 14,
2005 and reported by that Committee on November 18, 2005. The
bill was also referred to the Committee on Ways and Means,
which reported the bill by voice vote as amended and without
recommendation on February 3, 2006. The House has not
considered the bill.
During consideration of the bill on February 1, 2006, the
Committee on Ways and Means struck provisions of the bill as
introduced which authorized issuance of $12 billion in tax-
exempt bonds and another $12 billion in federal tax credit
bonds for the purpose of financing high-speed rail
infrastructure. The Committee struck these provisions, which
were within its jurisdiction, in order to consider proposals to
expand use of tax-preferred state and local financing in a more
comprehensive manner. The Subcommittee on Select Revenue
Measures subsequently held a hearing to examine tax-preferred
bond policies on March 16, 2006.
c. Pension Security and Transparency Act of 2005 (H.R. 2830)
The Committee acted to improve the security of pensions and
retirement savings in 2005 by reporting provisions to enhance
single and multi-employer defined benefit plan financing and
through other measures. The Committee considered these matters
during consideration of H.R. 2830, the ``Pension Security and
Transparency Act of 2005.'' H.R. 2830 was introduced by
Chairman John Boehner of the House Committee on Education and
the Workforce, the Committee on Ways and Means Chairman Thomas
and others on June 9, 2005 and referred to the Committee on
Education and the Workforce and the Committee on Ways and
Means. Education and the Workforce ordered the bill reported
with amendments on June 30, 2005. Subsequently, Ways and Means
marked up H.R. 2830 and ordered the bill reported as amended on
November 9, 2005 by a record vote of 23-17. The Committees'
bills were combined in a single text considered by the House
under a rule and was passed by the House on December 15, 2005
by a vote of 294-132. The House appointed conferees on H.R.
2830 and the Senate amendment to the bill on March 8, 2006.
Elements of H.R. 2830 as modified under agreement with
Senate conferees were included in H.R. 4, the ``Pension
Protection Act of 2006.'' For further information on H.R. 4
(P.L. 109-280), see subsection q. Pension Protection Act of
2006 (P.L. 109-280) in Bills Enacted into Law during the 109th
Congress.
d. Tax Technical Corrections Act of 2005 (H.R. 3376)
H.R. 3376, the ``Tax Technical Corrections Act of 2005,''
was introduced by Chairman Thomas on July 21, 2005. The
Committee on Ways and Means issued a request for written
comments from the public on August 31, 2005 (WMCP 109-8).
Companion legislation was introduced by the Senate on the same
day by Senator Grassley and Senator Baucus as S. 1447. Similar
legislation was introduced in the 108th Congress as H.R. 5395
and S. 3019.
The bill makes technical and clerical corrections to the
Internal Revenue Code, including corrections to provisions
enacted by: (1) the American Jobs Creation Act of 2004; (2) the
Working Families Tax Relief Act of 2004; (3) the Jobs and
Growth Tax Relief Reconciliation Act of 2003; (4) the Victims
of Terrorism Tax Relief Act of 2001; (5) the Transportation
Equity Act for the 21st Century; and (6) the Taxpayer Relief
Act of 1997.
Provisions contained in H.R. 3376 were included in H.R.
4440, the Gulf Opportunity Zone Act of 2005. H.R. 4440 was
introduced by Rep. Jim McCrery (R-LA) on December 6, 2005,
passed the House by a vote of 414-4 on December 7, 2005, passed
the Senate with an amendment by unanimous consent on December
16, 2005 and subsequently by the House as amended by the
Senate, and signed by the President on December 22, 2005 as
P.L. 109-135.
e. Stealth Tax Relief Act of 2005 (H.R. 4096)
On October 20, 2005, Rep. Reynolds introduced H.R. 4096,
the ``Stealth Tax Relief Act of 2005.'' Under the bill, the
2005 alternative minimum tax exemption amount of $40,250
($58,000 for joint returns) would be extended through 2006 and
adjusted for inflation. The bill passed the House on December
7, 2005 by a vote of 414-4 under suspension of the rules. The
Senate did not act on H.R. 4096. The exemption amount was
subsequently extended and increased in the Tax Increase
Prevention and Reconciliation Act (P.L. 109-222).
f. Gulf Opportunity Zone Public Finance Relief Act of 2005 (H.R. 4337)
H.R. 4337, the Gulf Opportunity Zone Public Finance Relief
Act of 2005, was introduced by Representative Jefferson on
November 16, 2005. The House passed the bill the same day by
unanimous consent. Provisions were included later in H.R. 4440
(P.L. 109-135).
The bill would allow a tax credit for investment in ``Gulf
tax credit bonds.'' For this purpose, a ``Gulf tax credit
bond'' is defined as any bond: (1) that is issued by Alabama,
Louisiana, or Mississippi after December 31, 2005, and before
January 1, 2007; (2) 95 percent of the proceeds of which are
used to refinance existing bonds or make loans to localities
for such refinancing; and (3) the maturity of which does not
exceed two years. The bill requires states issuing ``Gulf tax
credit bonds'' to pledge matching amounts equal to the face
amount of such bonds. The bill limits the amount of eligible
``Gulf tax credit bonds'' to $200 billion for Louisiana, $100
billion for Mississippi, and $50 billion for Alabama.
The bill also allows for one additional advance refunding
of outstanding bond obligations of Alabama, Louisiana, or
Mississippi until December 31, 2010. The amount of bonds
eligible for an advance refunding are limited to $4.5 billion
for Louisiana, $2.25 billion for Mississippi, and $1.125
billion for Alabama. The bill also provides for federal
guarantees of up to $3 billion of the bonds issued by Alabama,
Louisiana, or Mississippi before January 1, 2008, for the
purpose of restoring lost revenue and funding infrastructure in
areas affected by Hurricane Katrina. The bill limits such
guarantee to 50 percent of bond principal. The ``Gulf tax
credit bond'' and advance refunding provisions of H.R. 4337
were included in H.R. 4440.
g. Tax Revision Act of 2005 (H.R. 4388)
On November 18, 2005, Chairman Thomas introduced H.R. 4388,
the ``Tax Revision Act of 2005'' to extend several tax
provisions scheduled to expire at the end of 2005. Under
suspension of the rules, the bill passed the House on December
7, 2005 by a vote of 423-0. The Senate did not consider the
bill.
H.R. 4388 would extend several provisions for 1 year
through 2006. These provisions are a special rule which allows
military personnel the option of including their combat pay in
the Earned Income Tax Credit calculation, the transfer to
Puerto Rico and the Virgin Islands of $13.25 per-proof gallon
of rum imported into the United States, and the authority for
the IRS to use income recovered by undercover operations to pay
additional expenses incurred by such operations. It also
extends for one year (through 2006) the authority for the IRS
to disclose certain tax information with certain other Federal
and State authorities. This disclosure authority is limited to
activities to the investigation of terrorist activities, to
facilitate the repayment of student loans, and to facilitate
combined employment tax reporting. H.R. 4388 also allows U.S.
businesses operating in Puerto Rico to claim the domestic
manufacturing deduction in 2006. This bill generally included
many items which could not be included in budget
reconciliation.
h. Permanent Estate Tax Relief Act of 2006 (H.R. 5638)
Chairman Thomas introduced H.R. 5638 on June 19, 2006. The
bill was considered by the House on June 22, 2006 and passed by
a vote of 269-156.
As introduced and passed by the House, H.R. 5638 provided
for permanent relief from the estate and gift tax by reunifying
the estate and gift tax for decedents dying or gifts made after
December 31, 2009, providing a $5 million per decedent
exemption amount, setting the tax rate at the long term capital
gains rate for the first $25 million in cumulative taxable
transfers and at twice the long term gains rate for amounts
valued above $25 million. The exemption amounts would become
portable: to the extent one spouse was unable to use the full
$5 million exemption, the surviving spouse would be able to use
the excess. The provisions also permanently repealed carryover
basis, the credit for state death taxes, repealed qualified
family owned business trusts and denied a deduction for state
death taxes paid.
H.R. 5638 also included a deduction for qualified timber
gains. The deduction equaled the lesser of 60% of such gains or
net capital gains and could be taken against both the regular
tax and the alternative minimum tax.
i. Estate Tax and Extension of Tax Relief Act of 2006 (H.R. 5970)
H.R. 5970, the ``Estate Tax and Extension of Tax Relief Act
of 2006,'' was introduced by Chairman Thomas on July 28, 2006
and passed by the House on July 29, 2006 by a vote of 230-180.
The Senate was unable to proceed on the measure as a motion to
invoke cloture failed on August 3, 2006 by a vote of 56 to 42.
As introduced and passed by the House, H.R. 5970 provided
permanent estate and gift relief similar to that contained in
H.R. 5638. The bill reunified the estate and gift tax for
decedents dying or gifts made after December 31, 2009, provided
a $5 million per decedent exemption amount (increasing the
exemption amount from $3.75 million to $5 million between 2010
and 2015), setting the rate at the long term capital gains rate
for the first $25 million in cumulative taxable transfers.
Transfers in excess of $25 million would be subject to tax at
rates of 40 percent in 2010, 38 percent in 2011, 36 percent in
2012, 34% in 2013, 32 percent in 2014 and 30% in and after
2015. The $25 million threshold be indexed against inflation
beginning in 2016. The exemption amount for each spouse would
become portable: to the extent one spouse was unable to use the
full $5 million exemption, the surviving spouse would be able
to use the excess. The provisions also permanently repealed
carryover basis, the credit for state death taxes, repealed
qualified family owned business trusts and denied a deduction
for state death taxes paid.
H.R. 5970 also included extensions of a number of tax
provisions which had expired at the end of 2005 or which faced
expiration in the near future. Among the provisions extended
were a modified research and experimentation tax credit,
reforms of the Work Opportunity Tax Credit and Welfare to Work
Credit, the deduction for state sales taxes, investment and
hiring incentives for activities on Indian reservations, the
New Markets Tax Credit, the deduction for qualified tuition
expenses, extension of Qualified Zone Academy Bonds, expensing
of the cost of cleaning up ``brownfields'', 15-year
depreciation for leasehold and restaurant improvements
(extended to new restaurants), the cover over of $13.25 per
proof gallon of rum excise taxes to Puerto Rico and the Virgin
Islands, charitable contributions of computers (enhanced to
cover self-constructed property), mental health parity and
suspension of the 100 percent of net income limit on percentage
depletion on marginal oil and gas wells. Most of these
provisions had expired at the end of 2005 and would have been
extended for 2 years under the bill.
H.R. 5970 also included a 2-year economic development
credit for American Samoa, revisions in tax incentives for
rebuilding the New York Liberty Zone, an extension of bonus
depreciation for businesses in the Gulf Opportunity Zone and
extensions of certain IRS disclosure and undercover authority.
As well, the bill provided a tax credit intended to relieve
taxpayers facing AMT liability as a result of receiving
incentive stock options, partial expensing for mine safety
equipment and a tax credit for mine rescue team training,
extended the manufacturing deduction under section 199 to
Puerto Rico for 2 years, a 60 percent deduction for timber
gains, a 1-year deduction for Private Mortgage Insurance
premiums, federal tax credits for holders of Rural Renaissance
Bonds, temporary restoration of the deduction for spousal
travel and a series of other small provisions. The bill would
also have made a number of temporary provisions included in the
Tax Increase Prevention and Reconciliation Act of 2005
permanent. Finally, the bill included reform of the Combined
Benefit Fund (established by the Coal Industry Retiree Health
Benefit Act of 1992), to permit certain operators to prepay
their liability and provisions to increase the federal minimum
wage.
j. Health Opportunity Patient Empowerment Act of 2006 (H.R. 6134)
H.R. 6134, as introduced by Representative Eric Cantor and
Representative Paul Ryan on September 21, 2006, was ordered
reported by the Committee on Ways and Means as amended on
September 29, 2006 by a vote of 24-14. The text of H.R. 6134
was included in an amendment to the Tax Relief and Health Care
Act (H.R. 6111) \4\ on December 8, 2006.
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\4\ At the time of printing, the Public Law number for H.R. 6111
was not available.
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As introduced, H.R. 6134 included a number of modifications
to HSAs. These modifications included setting the limit for HSA
contributions at the statutory amount, allowing mid-year HSA
enrollees to make the full annual contribution, accelerating
announcement of indexed amounts for various HSA limits
effective after in 2008, allowing employers to make higher
contributions for non-highly compensated employees and
permitting tax free rollover of funds from HRAs, health FSAs
and IRAs. As modified by the Committee, the reported bill
accelerated announcement of indexed amounts to take effect
after 2007 and allowed taxpayers to make contributions to an
HSA notwithstanding certain residual coverage under a FSA.
k. Hatian and African Trade (H.R. 6142)
H.R. 6142 was introduced by Chairman Thomas on September
21, 2005. The bill included the African Investment Incentive
Act to provide investment incentives for U.S. companies in
Africa and to extend modified third-country fabric benefits.
Included in H.R. 6142 is a provision to provide a tax credit
for new wages paid and capital investments in eligible African
countries. The credit is available to U.S. corporations that
invest in eligible African countries directly (through
``branch'' operations) and indirectly (through controlled
foreign corporations and partnerships). The credit is equal to
60 percent of additional wages and fringe benefits and an
amount (15 percent-65 percent) of depreciation on new
investments in tangible property (other than vessels, aircraft
and related containers). The credit can be carried forward for
10 years. The credit (as well as any carryforward) expires for
taxable years beginning after December 31, 2015.
l. Tax Technical Corrections Act of 2006 (H.R. 6264)
H.R. 6264, the ``Tax Technical Corrections Act of 2006,''
was introduced by Chairman Thomas on September 29, 2006. On
that same day, The Committee on Ways and means issued a public
request for comments. Companion legislation was introduced by
the Senate on the same day by Senator Grassley and Senator Max
Baucus as S. 4026.
The bill makes technical and clerical corrections to the
Internal Revenue Code, including corrections to provisions
enacted by: (1) the Tax Increase Prevention and Reconciliation
Act of 2005; (2) the Energy Policy Act of 2005; (3) the
American Jobs Creation Act of 2004; and (4) other tax
legislation.
3. OTHER TAX MATTERS
a. Budget Hearings
On February 8, 2005, the full Committee held a hearing to
receive testimony from Secretary of the Treasury John Snow
concerning programs within the President's FY 2006 budget
within the jurisdiction of the Committee.
On February 9, 2005, the full Committee received testimony
from Joshua Bolten, Director of the Office of Management and
Budget, concerning programs within the President's FY 2006
budget within the jurisdiction of the Committee.
On February 17, 2005, the full Committee held a hearing to
receive testimony from Secretary of Health and Human Services
Michael O. Leavitt concerning programs within the President's
FY 2006 budget within the jurisdiction of the Committee.
On March 16, 2005, the full Committee held a hearing to
receive testimony from Secretary of Labor Elaine Chao regarding
programs within the President's FY 2006 budget within the
jurisdiction of the Committee.
On February 8, 2005, the full Committee held a hearing to
receive testimony from Secretary of Health and Human Services
Michael O. Leavitt concerning programs within the President's
FY 2007 budget within the jurisdiction of the Committee.
On February 8, 2006, the full Committee received testimony
from Joshua Bolten, Director of the Office of Management and
Budget, concerning programs within the President's FY 2007
budget within the jurisdiction of the Committee.
On February 15, 2006, the full Committee held a hearing to
receive testimony from Secretary of the Treasury John Snow
concerning programs within the President's FY 2007 budget
within the jurisdiction of the Committee.
b. Tax Reform Hearings (Full Committee)
On June 8, 2005, the Committee received testimony on
economic policy issues for consideration in reforming federal
taxation from (i) Alan J. Auerbach, Professor of Economics and
Law, University of California at Berkeley; (ii) William Beach,
Director of the Center for Data Analysis, The Heritage
Foundation; (iii) Leonard E. Burman, Co-Director of Tax Policy
Center and Senior Fellow, Urban Institute; (iv) R. Glenn
Hubbard, Dean, Columbia University Graduate School of Business;
(v) and Joel B. Slemrod, Professor of Economics, University of
Michigan.
c. Hearings Held During the 109th Congress by the Subcommittee on
Select Revenue Measures
i. President's Proposal for Single-Employer Pension Funding
Reform
On March 8, 2005, the Subcommittee received testimony from
representatives of the Departments of Labor and Treasury, the
Pension Benefit Guarantee Corporation and representatives of
the private sector concerning the need for pension funding
reform and possible impacts of the funding reform proposals
including in President Bush's FY 2007 budget submission.
ii. Tax Credits for Electricity Production from Renewable
Sources.
The Subcommittee received testimony from the Department of
Energy and private sector representatives on the economics and
effects of incentives for the production of energy from
renewable sources, including wind, solar, geothermal, and
biomass, on May 24, 2005.
iii. Funding rules for Multiemployer Defined Benefit Plans
in H.R. 2830, the Pension Protection Act of 2005
On June 28, 2005, the Subcommittee received testimony on
the potential effects and proposed modifications of
multiemployer pension funding rules included in H.R. 2830 to
improve the solvency of such plans.
iv. Proposals for Comprehensive Tax Reform.
On July 28, 2005, the Subcommittee received testimony from
Members of Congress concerning their proposals for
restructuring federal taxes.
v. Hearing on Miscellaneous Tax Proposals Offered by
Members of the House of Representatives.
The Subcommittee on November 16, 2005 received testimony on
reform proposals from Members of the Congress.
vi. Use of Tax-Preferred Bond Financing.
On March 16, 2006, the Subcommittee received testimony from
Members of Congress, the Department of Treasury, the
Congressional Budget Office, a representative of state and
local government and from the private sector concerning the
economy value of tax-exempt financing and suggestions for
reform.
vii. Corporate Tax Reform.
On May 9, 2006, the Subcommittee examined issues involved
in possible corporate tax reforms including rate reduction,
base broadening and whether tax accounting should conform to
book accounting methods.
viii. Impact of International Tax Reform on U.S.
Competitiveness.
The Subcommittee received testimony on June 22, 2006
concerning trends in international taxation affecting U.S.
businesses overseas and suggestions for reform.
ix. Issues Relating To The Patenting Of Tax Advice.
On July 13, 2006, the Subcommittee held a hearing to
explore the effect on the federal tax system of issuing patents
for tax compliance strategies.
x. Hearing on Miscellaneous Tax Proposals Offered by
Members of the House of Representatives.
The Subcommittee on September 26, 2006 received testimony
on reform proposals from Members of Congress.
B. Legislative Review of Trade Issues
1. BILLS CONSIDERED UNDER TRADE PROMOTION AUTHORITY (TPA)
a. Legislation
i. United States-Dominican Republic-Central America Free
Trade Implementation Act
On June 15, 2005, the Committee informally approved with
amendment draft legislation to implement the Dominican
Republic-Central America-United States Free Trade Agreement
(DR-CAFTA), by a roll call vote of 25-16. The Committee
conducted this informal markup to provide advice to the
Administration on the implementing bill and Statement of
Administrative Action. On June 23, 2005, Majority Leader DeLay
introduced (by request) H.R. 3045, the ``Dominican Republic-
Central America-United States Free Trade Agreement
Implementation Act,'' to be considered under TPA. On June 30,
2005, the Committee held a formal markup session to consider
H.R. 3045. The Committee approved the bill and favorably
reported H.R. 3045 by a roll call vote of 25-16. Under TPA,
amendments are not permitted to the bill once it has been
introduced. On July 28, 2005, the House passed the bill by a
recorded vote of 217-215. On June 30, 2005, before the House
took action on H.R. 3045, the Senate passed S. 1307 by a
recorded vote of 54-45. On July 28, 2005, the Senate passed
H.R. 3045, without amendment, by a recorded vote of 55-45. The
President signed the bill into law on August 2, 2005 (P.L. 109-
53).
In 2006, Congress took up technical amendments to DR-CAFTA.
On July 28, 2006, the House passed H.R. 4, the Pension
Protection Act of 2006, which included a provision to extend
narrow proclamation authority to the President to implement
changes to certain apparel rules of origin with respect to
countries that have entered into letters of understanding
concerning pocketing material with the United States and,
subject to certain Congressional notification and layover
limitations, with respect to countries that will do so in the
future. H.R. 4 passed the House by a recorded vote of 279-131.
On August 3, 2006, the Senate passed H.R. 4, without amendment,
by a recorded vote of 93-5. The President signed the bill into
law on August 17, 2006 (P.L. 109-280).
ii. United States-Bahrain Free Trade Implementation Act
On November 3, 2005, the Committee informally approved
draft legislation to implement the United States-Bahrain Free
Trade Agreement, by a roll call vote of 23-0, with 15 Members
voting present, without amendment. The Committee conducted this
informal markup to provide advice to the Administration on the
implementing bill and Statement of Administrative Action. On
November 16, 2005, Acting Majority Leader Blunt introduced (by
request) H.R. 4340, the ``United States-Bahrain Free Trade
Agreement Implementation Act,'' to be considered under TPA. On
November 18, 2005, the Committee held a formal mark-up session
to consider H.R. 4340. The Committee approved the bill and
favorably reported H.R. 4340 by voice vote. Under TPA,
amendments are not permitted to the bill once it has been
introduced. On December 7, 2005, the House passed the bill by a
recorded vote of 327-95. On December 13, 2005, the Senate
passed H.R. 4340 by unanimous consent. The President signed the
bill into law on January 11, 2006 (P.L. 109-169).
iii. United States-Oman Free Trade Implementation Act
On May 10, 2006, the Committee informally approved draft
legislation to implement the United States-Oman Free Trade
Agreement, by a roll call vote of 23-11, with 3 Members voting
present, without amendment. The Committee conducted this
informal markup to provide advice to the Administration on the
implementing bill and Statement of Administrative Action. On
June 26, 2006, Majority Leader Boehner introduced (by request)
H.R. 5684, the ``United States-Oman Free Trade Agreement
Implementation Act,'' to be considered under TPA. On June 29,
2006, the Committee held a formal markup session to consider
H.R. 5684. The Committee approved the bill and favorably
reported H.R. 5684 by a roll call vote of 23-15. Under TPA,
amendments are not permitted. On June 29, 2006, before the
House took action on H.R. 5684, the Senate passed S. 3569 by a
recorded vote of 60-34. On July 20, 2006, the House passed the
bill by a recorded vote of 221-205. On September 19, 2006, the
Senate passed H.R. 5684 by a recorded vote of 62-32. The
President signed the bill into law on September 26, 2006 (P.L.
109-283).
iv. United States-Peru Trade Promotion Agreement
Implementation Act
On July 20, 2006, the Committee informally approved draft
legislation to implement the United States-Peru Trade Promotion
Agreement, by a roll call vote of 23-13, without amendment. The
Committee conducted this informal markup to provide advice to
the Administration on the implementing bill and Statement of
Administrative Action. No further action was taken in the 109th
Congress.
b. Hearings
i. DR-CAFTA
On April 21, 2005, the Committee held a hearing on
implementation of the U.S. bilateral free trade agreement with
El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and
the Dominican Republic (DR-CAFTA). The agreement was signed on
May 28, 2004, by U.S. Trade Representative Robert Zoellick and
Ministers of El Salvador, Guatemala, Honduras, Nicaragua, and
Costa Rica. Witnesses at the hearing included Deputy U.S. Trade
Representative Peter Allgeier and representatives from the
business community, labor unions, and non-governmental
organizations. The hearing focused on Congressional
consideration of the DR-CAFTA and the benefits that the
agreement would bring to American businesses, farmers, workers,
and the U.S. economy.
ii. Bahrain
On September 29, 2005, the Committee held a hearing on
implementation of the U.S. bilateral free trade agreement with
Bahrain. The agreement was signed on September 14, 2004, by
U.S. Trade Representative Zoellick and Bahrain Minister of
Finance and National Economy Abdulla Hassan Saif. Witnesses at
the hearing included Assistant U.S. Trade Representative Shaun
Donnelly, as well as representatives from the private sector.
The hearing focused on Congressional consideration of the
United States-Bahrain FTA and the benefits that the agreement
would bring to American businesses, farmers, workers,
consumers, and the U.S. economy.
iii. Oman
On April 5, 2006, the Committee held a hearing on
implementation of the U.S. bilateral free trade agreement with
Oman. The agreement was signed on January 19, 2006, by U.S.
Trade Representative Rob Portman and Omani Minister of Commerce
and Industry Maqbool bin Ali Sultan. Witnesses at the hearing
included Deputy U.S. Trade Representative Susan Schwab, as well
as representatives from the private sector. The hearing focused
on Congressional consideration of the United States-Oman FTA
and the benefits that the agreement would bring to American
businesses, farmers, workers, consumers, and the U.S. economy,
as well as the U.S. strategic relationship in the region.
iv. Peru
On July 12, 2006, the Committee held a hearing on
implementation of the United States bilateral free trade
agreement with Peru. The agreement was signed on April 12,
2006, by U.S. Trade Representative Portman and Peruvian
Minister of Foreign Trade and Tourism Alfredo Ferrero Diez
Canseco. Witnesses at the hearing included Assistant United
States Trade Representative for the Americas, Everett
Eissenstat, as well as representatives from the private sector
and non-governmental organizations. The hearing focused on
Congressional consideration of the United States-Peru Trade
Promotion Agreement and the benefits that the agreement would
bring to American businesses, farmers, workers, consumers, and
the U.S. economy, as well as to U.S. trade relations with our
neighbors in the hemisphere.
c. Reports
In August 2004, the Committee received from the
International Trade Commission (ITC) the report entitled
``U.S.-Central America-Dominican Republic Free Trade Agreement:
Potential Economy-wide and Selected Sectoral Effects''
(Investigation No. TA 2104-13 (Publication 3717)).
In October 2004, the Committee received from the ITC the
report entitled ``U.S.-Bahrain Free Trade Agreement: Potential
Economy-wide and Selected Sectoral Effects'' (Investigation No.
TA-2104-15 (Publication 3726)).
In April 2005, the Committee received from the ITC the
report entitled ``U.S.-Morocco Free Trade Agreement: Effect of
Modifications to the U.S.-Morocco Free Trade Agreement''
(Investigation No. Morocco FTA 103-11 (Publication 3774, April
2005)).
In February 2006, the Committee received from the ITC the
report entitled ``U.S.-Oman Free Trade Agreement: Potential
Economy-wide and Selected Sectoral Effects'' (Investigation No.
TA-2104-19 (Publication 3837)).
In June 2006, the Committee received from the ITC the
report entitled ``U.S.-Peru Trade Promotion Agreement:
Potential Economy-wide and Selected Sectoral Effects''
(Investigation No. TA-2104-20 (Publication 3855)).
2. WORLD TRADE ORGANIZATION (WTO)
a. Legislation
On March 2, 2005, Congressman Sanders introduced H.J. Res.
27, a resolution to withdraw Congressional approval of the
agreement establishing the WTO. Under the Uruguay Round
Agreements Act (P.L. 103-465), the resolution is privileged and
subject to specialized procedures. The resolution is not
amendable and must be considered on the floor within 45 days of
introduction. The resolution was referred to the Committee on
Ways and Means, which adversely reported the resolution on May
26, 2005, by voice vote. On June 9, 2005, the House considered
the resolution and failed to pass it, by a recorded vote of 86-
338 with 1 member voting present. No further action was taken
on the resolution in the 109th Congress.
b. Hearings
On May 17, 2005, the Subcommittee on Trade held a hearing
to review future prospects for U.S. participation in the WTO.
Witnesses at the hearing included Deputy U.S. Trade
Representative Peter Allgeier and representatives from the
business community, labor unions, and the agriculture sector.
The hearing focused on overall results of U.S. membership in
the WTO and General Agreement on Tariffs and Trade (GATT);
whether future participation of the United States in the WTO
and the multilateral trading system can be expected to benefit
Americans; and prospects for increased economic opportunities
for U.S. farmers, workers, and consumers in the Doha Round.
c. Hong Kong Staff Delegation (December 14-18, 2005)
On December 14-18, 2005, a bipartisan delegation of staff
from the Committee on Ways and Means and the Senate Committee
on Finance attended the WTO's Ministerial Conference in Hong
Kong, consulted with U.S. trade officials during the
negotiations, and discussed trade issues with foreign delegates
and WTO officials. Staff met with foreign delegations, U.S.
business representatives, and WTO Secretariat staff. An
important objective of the meetings was to highlight the
importance that Members of Congress place on trade and
especially on the need for trade liberalization in the
agricultural sector.
d. Reports
In May 2005, the Committee received from the Government
Accountability Office (GAO), the report entitled ``World Trade
Organization: Global Trade Talks Back on Track, but
Considerable Work Needed to Fulfill Ambitious Objectives''
(GAO-05-538). As a follow up to its 2004 report on the problems
with the WTO Cancun Ministerial, the GAO reported on the
breakthrough made in July 2005 to create a framework for
further negotiations. The GAO also noted the uneven progress
made in the various trade negotiating groups given the focus on
agriculture by many key countries. The report also described
the continuing difficulties for future progress such as the
complexity of the agenda and competing goals between developed
and developing countries. The GAO also highlighted the timing
constraints for the negotiations because of the expiration of
trade negotiating authority for the President in July 2007. The
GAO continues to monitor negotiations for the Committee.
In August 2005, the Committee received from the
Congressional Budget Office the paper entitled ``Policies That
Distort World Agricultural Trade: Prevalence and Magnitude.''
The paper reviewed the effects of trade distorting policies
including hindrances to market access, various forms of
domestic subsidy programs, and export subsidization.
In December 2005, the Committee received from the
Congressional Budget Office the paper entitled ``The Effects of
Liberalizing World Agricultural Trade: A Survey.'' The paper
reviewed the economic literature on the total cost of policies
that distort agricultural trade, the potential impact of the
Doha Round on eliminating distortions, and the distribution of
benefits among key agriculture producing countries.
In April 2006, the Committee received from the GAO the
report entitled ``World Trade Organization: Limited Progress at
Hong Kong Ministerial Clouds Prospects for Doha Agreement''
(GAO-06-596).
3. BILATERAL AND REGIONAL ISSUES
a. Free Trade Agreements
i. Completed Agreements
Dominican Republic-Central America Free Trade Agreement
Negotiations for the U.S.-Dominican Republican-Central
America Free Trade Agreement were completed in May 2004. As
noted above, the President signed the implementing legislation
into law on August 2, 2005 (P.L. 109-53).
Bahrain
Negotiations for the U.S.-Bahrain Free Trade Agreement were
completed in May 2004. As noted above, the President signed the
implementing legislation into law on January 11, 2006 (P.L.
109-169).
Oman
Negotiations for the U.S.-Oman Free Trade Agreement were
completed in October 2005. As noted above, the President signed
the bill into law on September 26, 2006 (P.L. 109-283).
Peru
On November 18, 2003, U.S. Trade Representative Zoellick
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with Colombia,
Ecuador, and Peru. Negotiations began in May 2004 with
Colombia, Ecuador, and Peru. Bolivia was an observer in the
negotiations. On December 7, 2005, the United States and Peru
concluded FTA negotiations. On January 6, 2006, President Bush
officially notified Congress of his intent to sign the U.S.-
Peru Trade Promotion Agreement. The agreement was signed on
April 12, 2006. See above for discussion of legislative
activity related to the U.S.-Peru Trade Promotion Agreement.
Colombia
As noted above, on November 18, 2003, U.S. Trade
Representative Zoellick formally notified Congress of the
Administration's intent to initiate negotiations for a free
trade agreement with Colombia, Ecuador, and Peru. Negotiations
began in May 2004 with Colombia, Ecuador, and Peru. On February
27, 2006, the United States and Colombia concluded FTA
negotiations. On August 24, 2006, President Bush officially
notified Congress of his intent to sign the U.S.-Colombia Trade
Promotion Agreement. The agreement was signed on November 22,
2006.
ii. Ongoing Negotiations
Southern African Customs Union (SACU)
Pursuant to Sense of Congress language in the Africa Growth
and Opportunities Act of 2000 (P.L. 106-200), on November 4,
2002, U.S. Trade Representative Zoellick formally notified
Congress of the Administration's intent to initiate
negotiations for a free trade agreement negotiations with the
SACU countries (South Africa, Lesotho, Swaziland, Botswana, and
Namibia). Negotiations between the United States and the SACU
countries were launched on June 2, 2003, in Pretoria, South
Africa and were suspended in 2006 due to lack of progress.
Korea
On February 2, 2006, U.S. Trade Representative Portman
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with the
Republic of Korea. Negotiations began in June 2006.
Malaysia
On March 8, 2006, U.S. Trade Representative Portman
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with Malaysia.
Negotiations were launched in June 2006.
Ecuador
As noted above, on November 18, 2003, the U.S. Trade
Representative Zoellick formally notified Congress of the
Administration's intent to initiate negotiations for a free
trade agreement with Colombia, Ecuador, and Peru. Negotiations
began in May 2004 with Colombia, Ecuador, and Peru. See
discussion above concerning the conclusion of negotiations with
Peru and Colombia. The United States and Ecuador suspended
negotiations in May 2006.
Panama
On November 18, 2003, U.S. Trade Representative Zoellick
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with Panama.
Negotiations were launched on April 26, 2004.
Thailand
On February 12, 2004, U.S. Trade Representative Zoellick
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with Thailand.
Negotiations began in June 2004, and the sixth round was held
in January 2006. However, FTA talks were suspended after a
political crisis enveloped Thailand in April 2006. In September
2006, a military coup ousted the sitting government. The United
States has stated that the FTA talks will not resume until
Thailand has a democratically elected government with authority
to resume the negotiations.
United Arab Emirates (UAE)
The United States signed a Trade and Investment Framework
Agreement (TIFA) with the UAE on March 15, 2004. On November
15, 2004, U.S. Trade Representative Zoellick formally notified
Congress of the Administration's intent to initiate
negotiations for a free trade agreement with the UAE. A free
trade agreement with the UAE is part of the goal announced by
the President to form a Middle East Free Trade Area by 2013.
The first round of negotiations was held on March 8, 2005.
There have been four full fledged negotiating rounds and three
formal rounds on investment, with the last round in August
2006.
iii. Codel to Colombia, Ecuador, and Peru (July 3-9, 2005)
On July 3-9, 2005, Chairman Thomas led a bipartisan
delegation of Committee Members to Colombia, Ecuador, and Peru.
The purpose of the delegation's trip was to focus on the
ongoing negotiations for a free trade agreement with these
countries and to discuss investment and security issues in the
region. The delegation in particular emphasized that current
unilateral trade preferences under the Andean Trade Promotion
and Drug Eradication (ATPDEA) are set to expire in December
2006, and the only way that the Andean countries can replicate
their access to the U.S. market after these benefits expire is
through a comprehensive free trade agreement providing
reciprocal market access. In September 2005, the Committee
filed its ``Report on Trade Mission to Colombia, Ecuador, and
Peru.'' (WMCP 109-6)
b. China
i. Legislation
On July 14, 2005, Congressman Phil English introduced H.R.
3283, the ``Trade Rights Enforcement Act.'' The bill would
authorize funding for enforcement offices within USTR, require
reports on China's currency exchange reforms, authorize the
application of U.S. countervailing duty law to exports from
nonmarket economies such as China, and establish a system of
comprehensive monitoring of Chinese compliance with its trade
obligations. The bill was referred to the Committee and placed
on the House Suspension Calendar on July 26, 2005. The bill
failed to pass with the requisite two-thirds majority with a
vote of 240-186. The bill subsequently passed the House under a
rule on July 27, 2005, by a recorded vote of 255-168. No
further action was taken on this legislation in the 109th
Congress.
ii. Hearing
On April 14, 2005, the Committee held a hearing on U.S.-
China economic relations and China's role in the world economy.
During the hearing, the Committee received testimony from
Members of Congress, the Administration, the Congressional
Budget Office, and private sector interests. The hearing
focused on (1) implementation of China's WTO accession
commitments; (2) trade relations between the United States and
China; (3) China's currency management; and (4) the
relationship between trade with China and the U.S. economy.
iii. GAO and ITC activities
On January 25, 2005, the Ranking Members of the Committee
received from the GAO the report entitled ``U.S.-China Trade:
Summary of 2003 World Trade Organization Transitional Review
Mechanism for China'' (GAO-05-209R U.S.-China Trade).
On April 14, 2005, the Committee received from the GAO a
report entitled ``U.S.-China Trade: Opportunities to Improve
U.S. Government Efforts to Ensure Open and Fair Markets'' (GAO-
05-544T).
In June 2005, the Committee received from the GAO a report
entitled ``U.S.-China Trade: Commerce Faces Practical and Legal
Challenges in Applying Countervailing Duties'' (GAO-05-474).
On December 9, 2005, the Committee received from the GAO
the report entitled ``China Trade: U.S. Exports, Investment,
Affiliate Sales Rising, but Export Share Falling'' (GAO-06-
162).
On September 21, 2006, Chairman Bill Thomas requested a
three-part study pursuant to section 332 of the Trade Act of
1930 on China trade and investment, which will be due in parts
through the middle of 2008.
c. Burma
On July 28, 2003, the President signed into law the
``Burmese Freedom and Democracy Act of 2003'' (P.L. 108-61), to
sanction the ruling Burmese military junta, strengthen Burma's
democratic forces, and support and recognize the National
League of Democracy as the legitimate representative of the
Burmese people. Among other things, the legislation prohibits
the importation into the United States of any article that is a
product of Burma (Myanmar) until the President determines and
certifies to Congress that Burma has met certain conditions,
including that: (1) the State Peace and Development Council
(SPDC) has made substantial and measurable progress to end
violations of internationally recognized human rights; (2) the
SPDC has made measurable and substantial progress toward
implementing a democratic government; and (3) Burma has not
been designated as a country that has failed demonstrably to
make substantial efforts to adhere to its obligations under
international counter-narcotics agreements and to take other
effective counter narcotics measures. The law authorizes the
President to waive such requirements if it is in the U.S.
national interest. The import restrictions would expire one
year after enactment unless renewed by Congress with a joint
resolution meeting certain requirements, and the authority to
renew these sanctions annually was initially set to expire in
2006. Congress has annually renewed the import restrictions.
On May 26, 2005, Congressman Lantos introduced H.J. Res. 52
to extend the import sanctions for one year. On June 21, 2005,
H.J. Res. 52 was approved by the House under suspension of the
rules by a recorded vote of 423-2. On July 19, 2005, the bill
passed the Senate without amendment by a recorded vote of 97-1.
The President signed H.J. Res. 52 into law on July 27, 2005
(P.L. 109-39).
The most recent renewal was contained in H.J. Res. 86,
introduced by Congressman Lantos on May 19, 2006. H.J. Res. 86
extends the import ban for another year and gives Congress the
option to annually extend the import ban for two additional
years if Burma does not make progress in its human rights
record and if Congress determines that continued import
sanctions are the most appropriate policy to induce change by
the Government of Burma. On July 11, 2006, H.J. Res. 86 was
approved by the House under suspension of the rules by a voice
vote. On July 26, 2006, the bill passed the Senate without
amendment by a voice vote. The President signed H.J. Res. 86
into law on August 1, 2006 (P.L. 109-251).
d. Preferences Legislation
On September 21, 2006, Chairman Thomas introduced H.R.
6142, the Trade Preferences Act. The bill would (1) extend the
Generalized System of Preferences (GSP) for two years subject
to new limitations on waivers of competitive need limits, (2)
extend and enhance apparel and textile benefits under the
African Growth and Opportunity Act including a two-year
extension of benefits for apparel using third country fabric
and a subsequent value-added rule of origin, and (3) create a
new preference program for Haiti for apparel and automotive
wire harnesses in addition to benefits for which Haiti is
currently eligible under the Caribbean Basin Economic Recovery
Act (P.L. 98-67, P.L. 106-200, and P.L. 107-210). No further
action was taken on the bill in the 109th Congress, but an
altered version of this legislation was subsequently included
in H.R. 6406.
Chairman Thomas introduced H.R. 6406 on December 7, 2006,
which included several trade preference provisions to: (1)
extend the GSP program for two years subject to a discretionary
limitation on waivers of competitive need limits for products
that constitute 150 percent of the competitive need limit or 75
percent of U.S. imports of that product; (2) extend the third
country fabric benefit under AGOA until 2012, with a full 3.5
percent cap, and allowance of duty-free treatment for lesser
developed countries for certain textiles of wholly made African
fabric; (3) extend the trade preferences for Andean countries
(Peru, Colombia, Ecuador, and Bolivia) for 6 months, followed
by an additional 6-month extension for each country only if the
United States and that country each complete their legislative
process to approve a trade promotion agreement; and (4) create
additional trade preferences for certain apparel and automotive
wire harnesses produced in Haiti meeting a new rule of origin.
H.R. 6406 passed the House under a rule on December 8, 2006, by
a recorded vote of 212-184. Under the rule accompanying H.R.
6111, ``A bill to amend the Internal Revenue Code of 1986 to
provide that the Tax Court may review claims for equitable
innocent spouse relief and to suspend the running on the period
of limitations while such claims are pending,'' H.R. 6406 was
merged into H.R. 6111, which then passed the Senate on December
9, 2006, by a recorded vote of 79-9. The bill was signed into
law on December 20, 2006.\5\
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\5\ At the time of printing, the Public Law number for H.R. 6111
was not available.
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e. Japan
i. Legislation
On July 14, 2005, Congressman Phil English introduced H.R.
3283, the Trade Rights Enforcement Act, which is described
above under legislation related to China. Among other things,
the bill urged the President to address Japan's currency
interventions and various trade barriers through additional
funding to USTR enforcement offices. The bill passed the House
on July 27, 2005, by a recorded vote of 255-168. No further
action was taken on this legislation in the 109th Congress.
ii. Hearing
On September 28, 2005, the Committee held a hearing on
U.S.-Japan economic and trade relations. During the hearing,
the Committee received testimony from Members of Congress, the
Administration, and private sector interests. The hearing
focused on (1) Japan's economic problems, their causes, and
impact on the U.S. and world economy; (2) Japan's barriers to
agriculture imports such as the ban on U.S. beef,
discriminatory government actions against U.S. products, and
general non-tariff barriers; (3) Japan's role in the current
WTO negotiations; and (4) the recent economic and regulatory
reform attempts in Japan, including legislation to privatize
major components of Kampo, the Japanese postal entity.
Subsequently, in December 2005, Japanese authorities lifted the
ban on beef imports from the United States for cattle under 20
months but then suspended imports in January 2006. Trade
resumed for such beef on July 27, 2006.
iii. Reports
On March 7, 2006, Chairman Thomas requested a study
pursuant to section 332 of the Trade Act of 1930 regarding the
market conditions and government regulation affecting U.S.-made
medical devices sold in Japan. The report is still pending.
f. Russia
On July 28, 2005, Congressman Issa introduced H. Con. Res.
230 due to concerns about rampant piracy and a lack of
effective intellectual property rights (IPR) protections in
Russia. H. Con. Res. 230 expresses the sense of Congress that
(1) the Russian Federation should provide effective protection
of IPR or it risks losing its eligibility to participate in the
GSP program, and (2) as part of its effort to accede to the
WTO, the Russian Federation must ensure that intellectual
property is securely protected in law and in practice. On
November 16, 2005, the House approved H. Con. Res. 230, by a
vote of 421-2. On December 22, 2005, the Senate approved H.
Con. Res. 230 by unanimous consent.
Russia's trade status is subject to the ``Jackson-Vanik''
provisions. The President first declared Russia to be in full
compliance with the Jackson-Vanik requirements in 1994, and
such Presidential certification has been annually renewed.
Russia is in the process of acceding to the WTO. If the United
States and Russia are to enjoy a full-fledged trade
relationship once Russia joins the WTO, Congress must pass
legislation to end the annual Jackson-Vanik review and grant
permanent normal trade relations (PNTR). No bills were
introduced in the 109th Congress to grant PNTR to Russia. On
May 11, 2006, Chairman Thomas, Ranking Member Rangel, Senate
Finance Committee Chairman Grassley, and Ranking Member Baucus
sent a letter to President Bush expressing concern that Russia
has not demonstrated its willingness, ability, and commitment
to abide by WTO rules, particularly on enforcement of IPR and
the application of SPS measures. The letter stated that until
Russia addresses these critical issues in a meaningful way, the
signatories would not support granting PNTR to Russia. The
United States and Russia made significant progress in
addressing the concerns raised in the letter, and on November
10, 2006, both countries announced a bilateral agreement in
principle for Russia's accession to the WTO. The bilateral
agreement was signed on November 19, 2006.
g. Ukraine
Ukraine's trade status was subject to the ``Jackson-Vanik''
provisions in Title IV of the Trade Act of 1974 (P.L. 93-618).
This provision of law governs the extension of normal trade
relations (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. The President first declared Ukraine
to be in full compliance with the Jackson-Vanik requirements in
1997, and such Presidential certification has been annually
renewed.
Ukraine is in the process of acceding to the WTO. So as to
allow the United States and Ukraine to enjoy a full-fledged
trade relationship once Ukraine joins the WTO, Congress passed
legislation to end the annual Jackson-Vanik review and grant
PNTR. On November 18, 2005, the Senate passed S. 632 to grant
PNTR to Ukraine by unanimous consent. On March 6, 2006,
Chairman Thomas and U.S. Trade Representative Rob Portman
exchanged letters confirming that the Administration will
ensure that Ukraine will comply fully with all of the
commitments that it will assume as a WTO member before the
United States will join the consensus necessary for Ukraine to
join the body. On March 8, 2006, the House approved H.R. 1053
to grant PNTR to Ukraine, by a vote of 417-2, with three
Members voting present. On March 9, 2006, the Senate approved
H.R. 1053 by unanimous consent. The bill was signed by the
President and became law on March 23, 2006 (P.L. 109-205).
h. Vietnam
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 conditional NTR, and
eligibility for U.S. trade financing programs, by complying
with the freedom of emigration provisions under the Act or by
receiving a waiver of such requirements by the President.
Vietnam has received Presidential waivers of Jackson-Vanik
provisions since 1998, most recently on June 5, 2006. Congress
has not voted on a Jackson-Vanik disapproval resolution since
2002 because no Member has introduced one in time. In 2002,
Vietnam's disapproval resolution was defeated by a vote of 91-
328.
Vietnam is in the process of acceding to the WTO and is
scheduled to do so in January 2007. If the United States and
Vietnam are to enjoy a full-fledged trade relationship once
Vietnam joins the WTO, the annual Jackson-Vanik review must be
ended and replaced with PNTR. Legislation to grant PNTR to
Vietnam was introduced in the House (H.R. 5602) and Senate (S.
3495) on June 13, 2006. The bill was referred to the Committee
on Ways and Means and placed on the House Suspension Calendar
on November 13, 2006 with an amendment to establish a mechanism
for the Administration to determine whether Vietnam grants any
prohibited subsidies to its textile and apparel industry after
its accession to the WTO. The bill failed to pass with the
requisite two-thirds majority, by a vote of 228-161. The
provision (with the amendment) was subsequently included in
H.R. 6406, which passed the House on December 8, 2006, by a
recorded vote of 212-184 and, as described above, was
subsequently merged into H.R. 6111, which passed the Senate on
December 9, 2006, by a recorded vote of 79-9.
4. CONGRESSIONAL OVERSIGHT GROUP
a. Trade Act of 2002
Section 2017 of the Trade Act of 2002 (P.L. 107-210)
establishes the Congressional Oversight Group (COG), to be co-
chaired by the Chairmen of the Ways and Means and Finance
Committees and to be composed of the Chairman and Ranking
Member of those Committees of the House and Senate that would
have jurisdiction over provisions of law affected by trade
agreement negotiations during each Congress. The purpose of the
COG is to provide the President and the U.S. Trade
Representative 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.
b. Operation of the COG
On February 2, 2005, Chairman Thomas convened an
organizational meeting of the COG. Chairman Thomas invited the
House COG subgroup to a meeting hosted by the Senate on
September 8, 2005, to consult with U.S. Trade Representative
Portman regarding ongoing trade negotiations and the upcoming
WTO Hong Kong Ministerial. Among many other issues, U.S. Trade
Representative Portman identified four potential candidates for
free trade agreements with the United States: Malaysia,
Switzerland, Egypt, and Korea. U.S. Trade Representative
Portman also consulted about the Multi-Chip Integrated Circuits
(MCP) agreement, which was signed later in September. Chairman
Thomas invited the House COG subgroup to a meeting hosted by
the House on September 27, 2006, to consult with U.S. Trade
Representative Schwab regarding ongoing trade negotiations.
5. MISCELLANEOUS TRADE AND TECHNICAL CORRECTIONS ACT OF 2006
On March 11, 2005, Subcommittee on Trade Chairman Shaw
requested that Members introduce bills for inclusion in a
miscellaneous trade bill package. On July 25, 2005 and August
5, 2005, Chairman Shaw requested written comments from parties
interested in these miscellaneous trade proposals, technical
corrections to the trade laws, and temporary suspensions on
certain imports. On March 14, 2006, Chairman Shaw introduced
H.R. 4944, the Miscellaneous Trade and Technical Corrections
Act of 2006, which was referred to the Committee on Ways and
Means. The bill included 570 duty suspensions on various
products, several reliquidations of prior import entries due to
government error, and miscellaneous trade provisions and
technical corrections. The duty suspension provisions related
mostly to products (largely chemicals) for which there are no
U.S. domestic manufacturers. On March 15, 2006, the House
passed H.R. 4944 under suspension of the rules, by a recorded
vote of 412-2. H.R. 4944 was subsequently referred to the
Senate Committee on Finance. No further action occurred on H.R.
4944 during the 109th Congress.
Approximately half of the provisions from H.R. 4944 (all
provisions that had companion legislation already introduced in
the Senate) were included in H.R. 4, the Pension Protection Act
of 2006. Also included in H.R. 4 were provisions to suspend
duties on ceiling fans, nuclear steam generators, and certain
television components. In addition, the bill contained: a
provision to extend the wool trust fund and associated wool
fabric duty suspension, enacted most recently in the
Miscellaneous Trade and Technical Corrections Act of 2004, for
an additional two years; a provision to clarify an existing
duty exemption for certain vessel repairs performed by a ship's
regular crew; and a provision to suspend for three years the
ability of importers of subject merchandise from new shippers
to post a bond in lieu of a cash deposit during the pendency of
a review of an antidumping or countervailing duty order. On
July 28, 2006, the House passed H.R. 4 by a recorded vote of
279-131. On August 3, 2006, the Senate passed H.R. 4, without
amendment, by a recorded vote of 93-5. The President signed the
bill into law on August 17, 2006 (P.L. 109-280).
The remaining provisions of H.R. 4944 were subsequently
included in H.R. 6406 along with 232 Senate-only duty
suspensions on various products. H.R. 6406 passed the House on
December 8, 2006, by a recorded vote of 212-184 and, as
described above, was subsequently merged into H.R. 6111, which
passed the Senate on December 9, 2006, by a recorded vote of
79-9.
6. TRADE AGENCY AUTHORIZATION AND APPROPRIATION
The Committee on Ways and Means, working with the Committee
on Homeland Security, included several trade and customs
revenue provisions and established a 1 year authorization for
U.S. Customs and Border Protection (CBP) as part of H.R. 1817,
the ``Department of Homeland Security Authorization Act for
Fiscal Year 2006,'' to provide CBP with guidance as it plans
its budgets and to provide Committee guidance in the
appropriations process. The bill was reported out of the
Committee on Homeland Security on May 3, 2005, and the
Committee on Ways and Means received a joint, sequential
referral for a period not ending later than May 13, 2005.
Through an exchange of letters on May 12, 2005, the two
committees agreed to include in the Manager's Amendment various
changes requested by the Committee on Ways and Means concerning
trade and customs matters. In addition, the Committees agreed
to include customs provisions that were previously passed out
of the House of Representatives in the 108th Congress as part
of H.R. 4418, the ``Customs and Border Security Act of 2004,''
particularly sections 102 (providing for the establishment of a
cost accounting system), 104 (requiring a report on the One
Face at the Border Initiative), 124 (authorizing Customs to
provide certain services to Charter aircraft carriers), and 125
(stating the sense of the Congress regarding textile
enforcement provisions in certain trade preference programs).
H.R. 1817 was passed in the House by recorded vote 424-4 on May
18, 2005. No further action was taken on this bill in the 109th
Congress.
a. Authorization legislation
On November 14, 2005, Congressman Peter King introduced
H.R. 4312, the ``Border Security and Terrorism Prevention Act
of 2005,'' which contained several provisions dealing with
authorizations and border security issues that impact the flow
of trade and imports and customs revenue, matters under the
jurisdiction of the Committee on Ways and Means. The Committee
on Ways and Means and the Homeland Security reached agreement
to certain modifications to H.R. 4312 to preserve the
jurisdiction of the Committee on Ways and Means and to protect
trade and customs revenue interests. This agreement was
memorialized in an exchange of letters on December 6, 2005. The
trade-related provisions agreed to between these Committees for
inclusion in H.R. 4312 were later incorporated in H.R. 4437,
the ``Border Protection, Antiterrorism and Illegal Immigration
Control Act of 2005,'' which had been introduced by Congressman
F. James Sensenbrenner on December 6, 2005 and reported out of
the Committee on the Judiciary on December 13, 2005. The bill
was referred jointly and sequentially to the Committee on Ways
and Means on December 13, 2005 for a period not ending later
than December 14, 2005. The Committee on Ways and Means
discharged the bill on December 14, 2005. H.R. 4437 was passed
in the House by a recorded vote 239-182 on December 16, 2005.
On March 14, 2006, Congressman Dan Lungren introduced H.R.
4954, the Security and Accountability For Every (SAFE) Port
Act. On May 3, 2006, Chairman Thomas and Committee on Homeland
Security Chairman Peter King exchanged letters acknowledging
the jurisdiction of the Committee on Ways and Means and its
agreement to forgo consideration of the bill. On May 4, 2006,
the legislation passed the House by a recorded vote of 421-2.
On September 14, 2006, the bill passed the Senate with an
amendment by a vote of 98-0. On September 30, 2006, the
conference report to H.R. 4954 passed the House by a recorded
vote of 409-2. On September 30, 2006, the Senate agreed to the
conference report by unanimous consent. It was signed into law
by the President on October 13, 2006 (P.L. 109-347).
On December 7, 2006, Chairman Thomas introduced H.R. 6406,
which included a provision to extend the current 15-day period
to 30 days for changes to the Harmonized Tariff Schedule to be
finalized after publication in a Presidential proclamation to
afford the private sector sufficient time to incorporate all of
the changes in their computer systems and avoid costly, time-
consuming errors to entries. H.R. 6406 passed the House
pursuant to a rule on December 8, 2006, by a recorded vote of
212-184. Under the rule accompanying H.R. 6111, H.R. 6406 was
merged into H.R. 6111, which then passed the Senate on December
9, 2006, by a recorded vote of 79-9. The bill was signed in to
law on December 20, 2006.\6\
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\6\ At the time of printing, the Public Law number for H.R. 6111
was not available.
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b. Appropriation Legislation
i. Department of Homeland Security Appropriations Act of
2006
On May 13, 2005, Congressman Rogers introduced H.R. 2360,
making appropriations for the Department of Homeland Security.
The bill passed the House on May 17, 2005, by a vote of 424-1.
The Senate subsequently took up and amended H.R. 2360 with two
provisions within the jurisdiction of the Committee on Ways and
Means. Specifically, the Senate accepted amendment 1166, which
would have designated the MidAmerica St. Louis Airport in
Illinois as a port of entry, and amendment 1172, which would
have designated the National County International Airport in
Wyoming as a user-fee airport under the U.S. customs laws. The
Senate passed H.R. 3058 with these provisions on July 13, 2005,
by a recorded vote of 96-1. On September 13, 2005, Chairman
Thomas sent a letter to Appropriations Committee Chairman Lewis
objecting to inclusion of these two provisions in the
conference report for H.R. 3058. The provisions were dropped in
conference.
ii. Overtime for U.S. Customs and Border Protection
Employees
On May 13, 2005, Congressman Rogers introduced H.R. 2360,
making appropriations for the Department of Homeland Security
for fiscal year 2006. The bill contained provisions within the
jurisdiction of the Committee on Ways and Means that would have
limited the amount of overtime pay that could be provided to
Bureau of Customs and Border Protection employees. On May 16
and 17, 2005, Chairman Thomas and Subcommittee on Homeland
Security Chairman Rogers exchanged letters acknowledging the
jurisdiction of the Committee on Ways and Means and its
agreement to forgo consideration of the bill. On May 17, 2005,
the legislation passed the House by a recorded vote of 424-1.
On July 14, 2005, the bill passed the Senate with an amendment
by a vote of 96-1. On October 6, 2005, the conference report to
H.R. 2360 passed the House by a recorded vote of 347-70. On
October 7, 2005, the conference report passed the Senate by
voice vote. It was signed into law by the President on October
18, 2005 (P.L. 109-90).
c. Hearing
On July 25, 2006, the Subcommittee held a hearing to review
budget authorizations for FY2007 and FY2008 for U.S. Customs
and Border Protection (CBP) and U.S. Immigration and Customs
Enforcement (ICE). In addition, the hearing addressed other
Customs issues, including: the creation of CBP and ICE and the
integration of the former U.S. Customs Service into the U.S.
Department of Homeland Security, the Customs Trade Partnership
Against Terrorism (C-TPAT) program, Customs automation and
modernization efforts and the mechanisms needed to fund them,
and general Customs oversight issues. Witnesses at the hearing
included CBP Commissioner W. Ralph Basham, ICE Assistant
Secretary Julie Myers, and representatives from the business
community, customs brokers and labor unions.
d. Report
On March 8, 2006, Chairman Thomas requested the GAO to
carry out a review of the CBP's continuous entry bond policy,
identifying the effects of the policy on U.S. importers and
trade flows and examining how this policy relates to other
policies and practices for collecting antidumping and
countervailing duties. On October 19, 2006, the Committee
received from the GAO the report entitled ``Customs'' Revised
Bonding Policy Reduces Risk of Uncollected Duties, but Concerns
about Uneven Implementation and Effects Remain'' (GAO-07-50).
The report was released to the public on November 15, 2006. The
GAO found that the revised policy significantly increased bond
amounts for some importers and that CBP did not fully account
for the increased cost to importers, particularly as a result
of increased collateral requirements. The GAO recommended that
the Commissioner of CBP conduct a formal review of the lessons
learned from implementing the revised policy on shrimp imports
and to develop clear and consistent guidance for implementing
the policy as well as the basis upon which CPB will reduce
importers' bond requirement.
7. THE CONTINUED DUMPING AND SUBSIDY OFFSET ACT
a. Legislation
The Continued Dumping and Subsidy Offset Act (CDSOA) was
enacted into law in October 2000 (P.L. 106-387) and requires
the annual disbursement of antidumping and countervailing
duties to qualified petitioners and interested parties in the
underlying trade remedy proceedings. On January 16, 2003, the
WTO's Appellate Body issued a final adverse ruling against the
CDSOA, finding that it is inconsistent with U.S. obligations to
the WTO. On November 28, 2004, the WTO authorized approximately
$134 million in retaliation against the United States for
FY2003 CDSOA disbursements. Under the methodology set by the
WTO to determine the appropriate amount of retaliation, the
level may change annually and is set at 72 percent of CDSOA
disbursements for the previous year. Canada, Mexico, the
European Union, and Japan imposed retaliatory tariffs against a
variety of U.S. exports.
On March 3, 2005, Congressman Ramstad and Chairman Shaw
introduced H.R. 1121 to repeal the CDSOA. On July 25, 2005,
Chairman Shaw requested written comments from parties
interested in miscellaneous trade proposals, including H.R.
1121. Over 150 comments were received on H.R. 1121, and
comments were nearly equally divided with a slight majority
supporting CDSOA repeal.
On October 26, 2005, the Ways and Means Committee approved
``Entitlement Reconciliation Recommendations for Fiscal Year
2006,'' as amended, by a vote of 22-17. The recommendations
included a provision to repeal the CDSOA effective upon
enactment. On November 18, 2005, the House approved H.R. 4241,
the ``Deficit Reduction Act of 2005,'' by a 217-215 vote. The
House-passed bill included immediate CDSOA repeal. On November
3, 2005, the Senate passed S. 1932, the ``Deficit Reduction
Omnibus Reconciliation Act of 2005,'' by a vote of 52-47. The
Senate-passed bill did not include CDSOA repeal. On December
15, 2005, the Senate passed a nonbinding motion offered by
Senator DeWine instructing Senate conferees to insist that any
conference report not include CDSOA repeal, by a vote of 71-20.
The conference report for the Deficit Reduction Act of 2005 was
filed on December 19, 2005 and contained a provision to repeal
the CDSOA immediately upon enactment but allowing the continued
disbursements of duties on goods entered before October 1,
2007. On December 19, 2005, the House approved the conference
report by a vote of 212-206. On December 21, 2005, the Senate
approved the conference report with an amendment to provisions
unrelated to CDSOA repeal, by a vote of 51-50. On February 1,
2006, the House approved the bill as amended by the Senate by a
vote of 216-214. President Bush signed the bill into law on
February 8, 2006 (P.L. 109-171).
FY2006 CDSOA disbursements of nearly $380 million were
issued to recipients on November 27, 2006.
b. Reports
On April 30, 2004, Trade Subcommittee Chairman Crane, along
with Congressmen Ramstad, Boehner, and Biggert, requested the
U.S. Government Accountability Office (GAO) to carry out a
comprehensive review of the CDSOA and its impact on recipient
industries, including an analysis of how CDSOA funds have been
used by recipient companies. In January 2005, Subcommittee on
Trade Chairman E. Clay Shaw renewed the request for the CDSOA
review.
On September 26, 2005, the Committee received from the GAO
the report entitled ``International Trade: Issues and Effects
of Implementing the Continued Dumping and Subsidy Offset Act''
(GAO-05-979). The GAO found that since the inception of CDSOA
(FY2001), five companies (three of which are related) received
46% of the over $1 billion in payments. GAO also reported that
two-thirds of all payments went to three industries: bearings,
candles, and steel. The GAO concluded that the CDSOA does not
provide a ``trade remedy'' in the traditional sense because it
is not available to all companies; many domestic producers
impacted by dumped or subsidized imports are ineligible to
receive funds because they did not formally and publicly
support the petition that resulted in the duties.
8. MISCELLANEOUS TRADE ISSUES
a. Conflict Diamonds
The Clean Diamonds Act of 2003 (P.L. 108-19) was initiated
in the Committee in 2003. The Act restricts the import and
export of diamonds from countries with inadequate controls
against the trade in conflict diamonds. In accordance with
Section 5(c) of the Act, the State Department issued to the
Committee on July 14, 2005 a report on the performance of the
U.S. Kimberley Process Authority (USKPA). The report described
and reviewed the practices, standards, and procedures of the
USKPA. The Committee continues to monitor implementation of the
Kimberly Process.
In September 2006, the Committee received from the GAO the
report entitled ``Conflict Diamonds: Agency Actions Needed to
Enhance Implementation of the Clean Diamond Trade Act'' (GAO-
06-978).
b. Other Select ITC Reports Received by the Committee
In May 2005, the Committee received from the ITC the report
entitled ``Certain Yarns and Fabrics: Effect of Modification of
U.S. Singapore FTA Rules of Origin for Goods of Singapore''
(Investigation No. Singapore FTA 103-10 (Publication 3783, May
2005)).
In May 2005, the Committee received from the ITC the report
entitled ``Advice Concerning Possible Modifications to the U.S.
Generalized System of Preferences'' (Investigation No. 332-466
(Publication 3772, May 2005)).
In May 2005, the Committee received from the ITC the report
entitled ``Advice Concerning Possible Modifications to the U.S.
Generalized System of Preferences, 2004 Special Review''
(Investigation No. 332-467 (Publication 3773, May 2005)).
In June 2005, the Committee received from the ITC the
report entitled ``The Impact of Trade Agreements Implemented
Under Trade Promotion Authority'' (Investigation No. TA 2103-1
(Publication 3780, June 2005)).
In June 2005, the Committee received from the ITC the
report entitled ``Export Opportunities and Barriers in African
Growth and Opportunity Act--Eligible Countries'' (Investigation
No. 332-464 (Publication 3785, June 2005)).
In July 2005, the Committee received from the ITC the
report entitled ``U.S. Trade Shifts in Selected Industries and
Recent Trends in U.S. Services Trade'' (Investigation No. 332-
345 (Publication 3789, July 2005)).
In July 2005, the Committee received from the ITC the
report entitled ``Year in Trade 2004: Operation of the Trade
Agreements Program'' (Investigation No. 163-1 (Publication
3779, July 2005)).
In September 2005, the Committee received from the ITC the
report entitled ``Probable Effect of Certain Modifications to
the North American Free Trade Agreement Rules of Origin''
(Investigation No. NAFTA 103-12 (Publication 3802, September
2005)).
In September 2005, the Committee received from the ITC the
report entitled ``Biannual Report of the Impact of the
Caribbean Basin Economic Recovery Act on U.S. Industries and
Customers'' (Investigation No. 332-227 (Publication 3804,
September 2005)).
In September 2005, the Committee received from the ITC the
report entitled ``Andean Trade Preference Act: Effect on the
U.S. Economy and on Andean Drug Crop Eradication and Crop
Substitution'' (Investigation No. 332-352 (Publication 3803,
September 2005)).
In July 2006, the Committee received from the ITC the
report entitled ``Conditions of Competition for Certain Oranges
and Lemons in the U.S. Fresh Market'' (Investigation No. 332-
469 (Publication 3863, July 2006)).
In August 2006, the Committee received from the ITC the
report entitled ``Year in Trade 2005: Operation of the Trade
Agreements Program'' (Investigation No. 163-1 (Publication
3875, August 2006)).
In August 2006, the Committee received from the ITC the
report entitled ``Probable Effect of Certain Modifications to
the North American Free Trade Agreement Rules of Origin''
(Investigation No. NAFTA 103-14 (Publication 3881, August
2006)).
In September 2006, the Committee received from the ITC the
report entitled ``Andean Trade Preference Act: Effect on the
U.S. Economy and on Andean Drug Crop Eradication and Crop
Substitution'' (Investigation No. 332-352 (Publication 3888,
September 2006)).
In December 2006, the Committee received from the ITC the
report entitled ``U.S.-Colombia Trade Promotion Agreement:
Potential Economy-wide and Selected Sectoral Effects''
(Investigation No. TA-2104-23 (Publication 3896)).
c. Science, State, Justice, Commerce, and Related Agencies
Appropriations Act, 2006 (H.R. 2862)
On June 10, 2005, Congressman Wolf introduced H.R. 2862,
making appropriations for the Departments of State, Justice,
and Commerce and other agencies for the fiscal year ending
September 30, 2006. The bill was reported out of the House
Committee on Appropriations on June 10, 2005. Congressman
Tancredo offered a floor amendment to the bill that sought to
prohibit the use of appropriated funds for negotiations that
would impact U.S. immigration by the agencies covered under the
bill, such as bilateral and multilateral trade negotiations by
USTR. The Committee on Ways and Means issued talking points
opposing this amendment, arguing that it was not needed as the
Administration had already agreed not to negotiate any
immigration provisions in these agreements and that it could
disrupt sensitive negotiations at the WTO. In addition,
Chairman Thomas, Chairman Shaw, and several other Members of
the Committee on Ways and Means spoke against this amendment
when it was considered on the floor on June 16, 2005. The
amendment was defeated by a recorded vote of 204 to 222. The
House passed H.R. 2862 on June 16, 2005, by a vote of 418-7.
The Senate subsequently took up and passed the bill on
September 15, 2005, with an amendment, by a vote of 91-4. The
Senate-passed version of the bill contained two new provisions
within the trade jurisdiction of the Committee on Ways and
Means. The first provision instructed the U.S. Trade
Representative to conduct negotiations within the WTO to
recognize the right of members to distribute monies collected
from antidumping and countervailing duties. On November 3,
2005, Chairman Thomas sent a letter to Committee on
Appropriations Chairman Lewis objecting to the provisions and
asking for its removal in conference. The Committee later
acquiesced, and the conference report retained the provision.
The second Senate-passed provision was an amendment offered
by Senator Grassley, which specified that no funds made
available by the Act may be used in a manner that is
inconsistent with the principle negotiating objective of the
United States with respect to trade remedy laws to: preserve
the ability of the United States to enforce vigorously its
trade laws, avoid agreements that lessen the effectiveness of
domestic and international disciplines on unfair trade, and
address and remedy market distortions that lead to dumping and
subsidization, including overcapacity, cartelization, and
market-access barriers. The conference report did not retain
this provision.
The House passed the conference report on November 9, 2005,
by a vote of 397-19, and the Senate passed the report on
November 16, 2005, by a vote of 94-5. The President signed the
bill into law on November 22, 2005 (P.L. 109-108).
d. Resolution on Antidumping and Countervailing Duty Negotiations in
Tax Reconciliation
On November 17, 2005, the Senate passed by voice vote
amendment SA 2655 proposed by Senator Craig to the tax
reconciliation bill (S. 2020). The amendment contained a
nonbinding resolution recommending severe limitations on
antidumping and countervailing negotiations in the WTO.
Specifically, the resolution specified that the United States
should not be a signatory to any agreement that adopts any
proposal to lessen the effectiveness of domestic and
international disciplines on unfair trade or safeguard
provisions, including proposals that: mandate a sunset of duty
orders, require that trade remedy duties reflect less than the
full margin of dumping or subsidization, allow higher de
minimis levels of unfair trade, make cumulation of the effects
of imports from multiple countries more difficult, outlaw the
practice of ``zeroing'' in antidumping investigations, or
mandate the weighing of causes or other provisions making it
more difficult to prove injury in unfair trade cases. The
resolution also provided that the United States should ensure
that any new agreement relating to antidumping, countervailing
duty, or safeguard provisions ``fully rectifies and corrects''
WTO dispute settlement decisions that have ``unjustifiably and
negatively impacted, or threaten to negatively impact,'' U.S.
law or practice. On November 18, 2005, the Senate approved S.
2020 as amended by a vote of 64-33. On November 18, 2005,
Congressman English introduced H. Res. 577, the text of which
is identical to the Senate-passed amendment. No further action
was taken on H. Res. 577. On December 8, 2005, the House
approved H.R. 4297, the Tax Relief Extension Reconciliation Act
of 2005, by a vote of 234-197. The House-passed tax
reconciliation bill did not contain a provision related to
antidumping and countervailing duty negotiations in the WTO.
The conference report did not retain the Senate amendment.
e. Overview and Compilation of U.S. Trade Statutes 2005
On July 26, 2005, Chairman Thomas announced the publication
of the Committee's Trade ``Blue Book,'' the 2005 edition of the
``Overview and Compilation of U.S. Trade Statutes'' (WMCP: 109-
4). The Blue Book contains a description and history of U.S.
trade laws in Part I as well as the text of the statutes
themselves in Part II, with updates to trade laws due to the
significant legislation accomplished by the Committee during
the 108th Congress.
f. Departments of Transportation, Treasury, and Housing and Urban
Development, the Judiciary, District of Columbia, and
Independent Agencies Appropriations Act of 2006
On June 24, 2005, Congressman Knollenberg introduced H.R.
3058, making appropriations for the Departments of
Transportation, Treasury, and other departments and agencies.
The bill contained a provision within the trade jurisdiction of
the Committee on Ways and Means. Specifically, section 218
would have required the Secretary of the Treasury to report to
Congress on the definition of current manipulation. On June 27,
2005, Chairman Thomas sent a letter to Rules Committee Chairman
Dreier requesting that the rule for consideration of H.R. 3058
not include a waiver of Rule XXI of the Rules of the House with
respect to section 218. On June 27, 2005, H. Res. 342,
providing for the consideration of H.R. 3058, was introduced
and reported favorably by the Committee on Rules. H. Res. 342
did not include a waiver of Rule XXI with respect to the
provision within the jurisdiction of the Committee on Ways and
Means. H. Res. 342 passed the House on June 28, 2005, by a vote
of 219-193. On June 29, 2005, Chairman Thomas then raised a
point of order against the provision, and the Chair sustained
the point of order, thus stripping the provision from the bill.
A modified version of section 218 was later included as section
6 in H.R. 3283 (see discussion above). The House passed H.R.
3058 on June 30, 2005, by a recorded vote of 405-18. The Senate
subsequently took up and amended H.R. 3058 and included a
provision similar to House section 218 in its version. The
Senate version of H.R. 3058 passed the Senate on October 20,
2005, by a vote of 93-1. On November 9, 2005, Chairman Thomas
sent a letter to Committee on Appropriations Chairman Lewis
objecting to inclusion of the provision in the conference
report. The Senate provision related to currency manipulation
was subsequently dropped in conference.
g. Departments of Labor, Health and Human Services, and Education, and
Related Agencies Appropriations Act of 2006
On June 21, 2005, Congressman Regula introduced H.R. 3010,
making appropriations for the Department of Labor and other
departments and agencies. The bill passed the House on June 24,
2005, by a recorded vote of 250-151. The Senate subsequently
took up and amended H.R. 3010 and included a provision within
the jurisdiction of the Committee on Ways and Means.
Specifically, the Senate included section 520, which would have
established the MidAmerica St. Louis Airport in Illinois as a
port of entry. The Senate passed H.R. 3010 with this provision
on October 27, 2005, by a recorded vote of 94-3. On November
14, 2005, Chairman Thomas sent a letter to Appropriations
Committee Chairman Lewis objecting to the inclusion of the
provision in the conference report for H.R. 3010. The provision
was dropped in conference.
h. China Prison Labor
On November 9, 2005, Congressman Wolf introduced H. Con.
Res. 294, calling on the international community to condemn the
Chinese system of forced labor prison camps. The resolution
included a provision related to implementation of trade laws to
prohibit importation of products made in Chinese forced labor
camps, which was within the jurisdiction of the Committee on
Ways and Means. On December 13, 2005, Chairman Thomas and
International Relations Committee Chairman Hyde exchanged
letters acknowledging the jurisdiction of the Committee on Ways
and Means and its agreement to forgo consideration of the bill.
On December 16, 2005, H. Con. Res. 294 passed the House by a
vote of 413-1 and was received in the Senate on the same day.
No further action was taken in the Senate.
i. East Asia Security Act of 2005
On June 29, 2005, International Relations Committee
Chairman Hyde introduced H.R. 3100, the East Asia Security Act
of 2005. The bill contained a provision in the jurisdiction of
the Committee on Ways and Means. Specifically, section 7 of the
bill would have suspended the President's ability to license an
exemption or expedited procedures for licensing the temporary
importation of defense articles. On July 13, 2005, Chairman
Thomas and Chairman Hyde exchanged letters acknowledging the
jurisdiction of the Committee on Ways and Means and its
agreement to forgo consideration of the bill. On July 14, 2005,
the House took up and failed to pass H.R. 3100 under suspension
of the rules by the requisite two-thirds majority with a
recorded vote of 215-203. No further action was taken on the
bill in the House.
j. Iran and Libya Sanctions Act (ILSA)
On January 6, 2005, Congresswoman Ileana Ros-Lehtinen
introduced H.R. 282, the Iran Freedom Support Act, which
included provisions related to import sanctions. On April 6,
2006, Chairman Thomas and Committee on International Relations
Chairman Henry Hyde exchanged letters acknowledging the
jurisdiction of the Committee on Ways and Means and its
agreement to forgo consideration of the bill. On April 26,
2006, the legislation passed the House by a recorded vote of
397-21. On July 25, 2006, Congresswoman Ros-Lehtinen introduced
H.R. 5877, a bill to amend the Iran and Libya Sanctions Act of
1996 (104-172), which included provisions that would extend the
sanctions, including import sanctions, until September 2006. On
July 26, 2006, Chairman Thomas and Chairman Hyde exchanged
letters acknowledging the jurisdiction of the Committee on Ways
and Means and its agreement to forgo consideration of the bill.
On July 26, 2006, the legislation passed the House under
suspension of the rules by voice vote. On July 31, 2006, the
bill passed the Senate without amendment by unanimous consent.
It was signed into law by the President on August 4, 2006 (P.L.
109-267). On September 27, 2006, Congresswoman Ros-Lehtinen
introduced H.R. 6198, the Iran Freedom Support Act, which
included provisions that would extend and modify import
sanctions. On September 27, 2006, Chairman Thomas and Chairman
Hyde exchanged letters acknowledging the jurisdiction of the
Committee on Ways and Means and its agreement to forgo
consideration of the bill because several amendments supported
by the Committee would be included in the bill. On September
28, 2006, the legislation passed the House under suspension of
the rules. On September 30, 2006, the bill passed the Senate
without amendment by unanimous consent. It was signed into law
by the President on September 30, 2006 (P.L. 109-293).
k. Marine Mammal Protection Acts Amendments of 2006 and Polar Bears
On October 18, 2005, Committee on Resources Chairman
Richard Pombo introduced H.R. 4075, which contained provisions
addressing import restrictions related to Polar Bears and
marine mammals. On July 13, 2006, Chairman Thomas and Chairman
Pombo exchanged letters acknowledging the jurisdiction of the
Committee on Ways and Means and its agreement to forgo
consideration of the bill. On July 17, 2006, the legislation
passed the House under suspension of the rules by voice vote.
On December 6, 2006, the bill passed the Senate with an
amendment by unanimous consent.
l. Saudi Resolution and Israel Resolution
On March 29, 2006, Subcommittee on Trade Chairman E. Clay
Shaw introduced H. Con. Res. 370, expressing the sense of the
Congress that Saudi Arabia should fully live up to its WTO
commitments and end all aspects of any boycott on Israel. On
April 5, 2006, the legislation passed the House under
suspension of the rules by voice vote. No further action was
taken.
m. Stevens-Inouye International Fisheries Monitoring and Compliance
Legacy Act of 2006
On July 27, 2006, Committee on Resources Chairman Richard
Pombo introduced H.R. 5946, the Stevens-Inouye International
Fisheries Monitoring and Compliance Legacy Act of 2006, which
would amend the Magnuson-Stevens Fishery Conservation and
Management Act to authorize activities to promote improved
monitoring and compliance for high seas fisheries or fisheries
governed by international fishery management agreements. The
bill also included provisions related to trade sanctions. On
September 20, 2006, Chairman Thomas and Chairman Pombo
exchanged letters acknowledging the jurisdiction of the
Committee on Ways and Means and its agreement to forgo
consideration of the bill. On September 27, 2006, the
legislation passed the House under suspension of the rules by
voice vote. On December 7, 2006, the bill passed the Senate
with an amendment by unanimous consent.
n. Postal Accountability and Enhancement Act of 2006
On December 7, 2006, Committee on Government Reform
Chairman Tom Davis introduced H.R. 6407, the Postal
Accountability and Enhancement Act of 2006, which contained
provisions addressing customs issues related to postal
services. On December 7, 2006, Chairman Thomas and Chairman
Davis exchanged letters acknowledging the jurisdiction of the
Committee on Ways and Means and its agreement to forgo
consideration of the bill. On December 8, 2006, the legislation
passed the House under suspension of the rules by voice vote.
On December 9, 2006, the bill passed the Senate without
amendment by unanimous consent. It was signed into law by the
President on December 20, 2006.\7\
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\7\ At the time of printing, the Public Law number for H.R. 6407
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o. Jurisdiction of the Committee on Ways and Means
On January 4, 2005, the House adopted the Rules for the
109th Congress, H. Res. 5, which modified the jurisdiction of
the Committee on Ways and Means as stated in House Rule X from
``(1) Customs, collections districts, . . .'' to ``(1) Customs
revenue, collection districts, . . .'' This change conforms the
Committee's jurisdiction to the revenue authority defined in
the Homeland Security Act of 2002.
C. Legislative Review of Health Issues
1. BILLS ENACTED INTO LAW DURING THE 109TH CONGRESS
a. Deficit Reduction Act of 2005 (P.L. 109-171)
On February 1, 2006, the House of Representatives approved
the Conference Report for S. 1932, the Deficit Reduction Act of
2005 (DRA), to reduce spending in a number of federal programs
falling under the jurisdiction of the Committee on Ways and
Means, including Medicare. The House originally passed the
Conference Report on December 19, 2005. The Senate made
technical changes before passing it on December 21, 2005. The
House reconsidered and passed the conference report on February
1, 2006, by a vote of 216-214. The President signed the bill
into law on February 8, 2006 (P.L. 109-171).
Title V of the DRA, Subtitles A-D, contains Medicare-
related provisions that result in net savings to the Medicare
program of approximately $6 billion during fiscal years 2006-
2010. Specifically, Medicare savings are achieve d by requiring
more affluent seniors to contribute a higher percentage of care
costs under Medicare Part B, reducing waste by paying only for
necessary repairs and maintenance for durable medical
equipment, freezing home health payment rates for 2006,
clarifying the computation of disproportionate share inpatient
hospital payments, and implementing payment reforms for imaging
and ambulatory surgical centers.
Other Medicare-related provisions of the DRA expand
requirements for hospital quality reporting, include an
additional year in the transition period for the 75 percent
rule for inpatient rehabilitation facilities under Part A,
provide an update to payment rates for physician services to
prevent payment cuts, and provide a 1.6 percent update to end-
stage renal disease facilities. Also, the DRA developed a
strategic plan for physician investment in specialty hospitals,
established a post-acute care demonstration program to study
outcomes following hospitalizations, and provided more focused
post-acute treatment and payments.
In addition, H.R. 3971 reduced bad debt payments to skilled
nursing facilities for non-dually eligible Medicare
beneficiaries from 100 percent to 70 percent; tied home health
payments to quality reporting in 2007 and required MedPAC to
submit a report on value-based purchasing for home health
services no later than June 1, 2007; increased the phase-out of
risk adjustment budget neutrality in determining payments to
Medicare Advantage plans and established a PACE Provider Grant
program.
Finally, the DRA prevents physician payment cuts in 2006 by
providing a freeze in payment rates for physician services.
b. Qualified Individuals, Transitional Medical Assistance (TMA), and
Abstinence Programs Extension and Hurricane Katrina
Unemployment Relief Act of 2005 (Public Law No: 109-91)
H.R. 3917 was introduced on October 6, 2006, by Rep. Nathan
Deal, passed the House under suspension of the rules by voice
vote on October 6, 2005, and passed the Senate October 7, 2005.
It was signed into law on October 20, 2005 (P.L. 109-91). H.R.
3971 extended the Transitional Medical Assistance (TMA)
program, which continues Medicaid for families leaving Welfare
for work, through December 31, 2006; the QI-1 program, through
which State Medicaid programs help low-income seniors pay
Medicare Part B premiums, through September 30, 2007 and
extends the Abstinence Education program through December 31,
2005.
H.R. 3971 also provided $500 million in federal
unemployment funds to disaster States to help them pay regular
unemployment benefits ($400 million to Louisiana, $85 million
to Mississippi, and $15 million to Alabama). Funds were divided
among states according to their share of expected increased
unemployment benefit payments attributable to Hurricane
Katrina. It also provided all states the flexibility to use
current Federal unemployment administrative funds to assist
Katrina victims in need of unemployment benefits.
In order to offset these new costs, H.R. 3971 prohibited
Medicare (in 2007 and beyond) and Medicaid (in 2006 and beyond)
coverage of Food and Drug Administration approved drugs to
treat erectile dysfunction.
c. Tax Relief and Health Care Act of 2006 (H.R. 6111)
On December 8, 2006, the House of Representatives agreed
with amendments to the Senate amendment by a vote of 367-45. On
December 9, 2006, the Senate agreed to the House amendments and
passed H.R. 6111, and the bill was signed into law by the
President on December 20, 2006 .\8\ Division B of H.R. 6111,
the Tax Relief and Health Care Act of 2006 (TRHCA) (Engrossed
Amendment as agreed to by the House of Representatives)
contains Medicare and other related health provisions.
Specifically, the Medicare-related provisions of TRHCA improve
Medicare quality and provider payments, protect Medicare
beneficiaries, and improve Medicare program integrity efforts.
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\8\ At the time of printing, the Public Law number for H.R. 6111
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Titles I to III of Division B of the TRHCA contain
Medicare-related provisions that improve the functioning of the
Medicare program, and are likely to result in a net savings to
the Medicare program over 5 years. Specifically, the act
provides a freeze in physician payment rates, and 1.5 percent
in bonus payments for quality measure reporting, which will
ensure both continued beneficiary access to care and improve
the quality of care. Further, a 1 year 1.6 percent update is
provided to dialysis facilities, and expiring provisions
related to rural health care are extended. Voluntary reporting
of quality measures by hospital outpatient departments and
ambulatory surgical centers will begin in 2009, and care
management of anemia patients will be improved through better
reporting of anemia indicators. Also, a post-payment review
process will be instituted under the competitive acquisition
program.
Other Medicare-related provisions of the TRHCA protect
beneficiaries through a 1 year extension in the therapy
exceptions process, vaccine administration under the new
Medicare prescription drug-benefit program, an Office of
Inspector General study of medical events that should never
occur, and a medical home demonstration program.
In addition, the TRHCA maintains and improves Medicare
program integrity through the expansion of the recovery auditor
program to all States by 2010, which identifies and returns
overpayments to Medicare. Although application of a budget rule
by the Congressional Budget Office (CBO) suggests that this
provision will result in increased costs to the Medicare
program, the CBO also recognized that the recovery audit
contractor provision will likely result in a net reduction in
Medicare spending, and the Committee estimates that the
provision should save approximately $8 billion over 5 years.
Also, the TRHCA provides funding updates for a 4 year period
using the consumer price index for the Health Care Fraud and
Abuse Control Account.
2. HEALTH CARE PROPOSALS
a. Health Opportunity Patient Empowerment Act of 2006 (H.R. 6134)
Representatives Eric Cantor (R-VA) and Paul Ryan (R-WI)
introduced H.R. 6134 on September 21, 2006. The bill was
ordered favorably reported by the Committee on Ways and Means,
as amended, on September 29, 2006 by a vote of 24-14. The House
did not consider the bill.
The bill amends the Internal Revenue Code of 1986 to expand
health insurance coverage through the use of high deductible
health plans in conjunction with health savings accounts (HSAs)
and to further encourage their use. Specifically, H.R. 6134 (1)
allows employees to fund HSAs with Flexible Spending Account
(FSA) and Health Reimbursement Arrangement (HRA) Funds; (2)
repeals the annual deduction limit on HSA contributions; (3)
requires the Secretary to announce contribution and deductible
adjustments by June 1 of each year; (4) expands contribution
limits for part-year coverage; (5) allows additional employer
contributions for non-highly compensated employees; and (6)
permits a onetime transfer from individual retirement accounts
to HSAs.
b. Health Information Technology Promotion Act of 2006 (H.R. 4157)
H.R. 4157 was introduced on October 27, 2005 by
Representative Nancy Johnson, and was ordered favorably
reported by both the Ways and Means Committee and the Energy
and Commerce Committee on July 26, 2006. It was passed on the
House floor on July 27, 2006 by recorded vote of 270-148. H.R.
4157 would promote a better health information system by
providing for the coordination, planning and interoperability
of health information technology, the updating of transaction
standards and codes and the promotion of health information
technology to better coordinate health care.
3. OTHER HEALTH MATTERS
a. Full Committee Hearings
i. Health Savings Accounts
On June 28, 2006, the full Committee on Ways and Means held
a hearing on Health Savings Accounts.
ii. Implementation of the Medicare Drug Benefit
On June 14, 2006, the full Committee on Ways and Means held
a hearing to receive testimony concerning the implementation of
the Medicare prescription drug benefit, beneficiary enrollment
and lessons learned since the initial enrollment deadline of
May 15.
b. Subcommittee Hearings
i. Emergency Care
On July 27, 2006, the Subcommittee held a hearing to
receive testimony from emergency care professionals and others
concerning emergency care.
ii. Price Transparency
On July 18, 2006, the Subcommittee held a hearing to
receive testimony from health care professionals and academics
concerning price transparency.
iii. Medicare Reimbursement of Physician-Administered Drugs
On July 13, 2006, the Subcommittee held a hearing to
receive testimony from the Centers for Medicare and Medicaid
Services, U.S. Department of Health and Human Services, the
Medicare Payment Advisory Commission, the U.S. Government
Accountability Office, and other health professionals
concerning Medicare reimbursements of physician-administered
drugs.
iv. Continuation on Implementation of the Medicare Drug
Benefit
On May 4, 2006, the Subcommittee held a hearing to receive
testimony from the Honorable Henry Waxman and health care
professionals concerning implementation of the Medicare drug
benefit.
v. Implementation of the Medicare Drug Benefit
On May 3, 2006, the Subcommittee held a hearing to receive
testimony from the Centers for Medicare and Medicaid Services
and health care professionals concerning implementation of the
Medicare drug benefit.
vi. Health Care Information Technology
On April 6, 2006, the Subcommittee held a hearing to
receive testimony from the U.S. Department of Health and Human
Services and others concerning the development and use of
health care information technology.
vii. Long-Term Acute Care Hospitals
On March 15, 2006, the Subcommittee held a hearing to
receive testimony from the Centers for Medicare and Medicaid
Services, the Medicare Payment Advisory Commission, and health
care professionals concerning Medicare payment and coverage
policies for long-term acute care hospitals.
viii. MedPAC's March Report on Medicare Payment Policies
On March 1, 2006, the Subcommittee held a hearing to
receive testimony from the Medicare Payment Advisory Commission
and [health care professionals] concerning Medicare payment
policies.
ix. Competition in the FEHB Program
On December 2, 2005, the Subcommittee held a field hearing
in Milwaukee, Wisconsin to receive testimony from the U.S.
Government Accountability Office, and health care professionals
and others concerning the Federal Employees Health Benefits
Program.
x. Gainsharing
On October 7, 2005, the Subcommittee held a hearing to
receive testimony from the U.S. Department of Health and Human
Services and health care professionals concerning gainsharing
between hospitals and physicians.
xi. Medicare Value-Based Purchasing for Physicians Act
On September 29, 2005, the Subcommittee held a legislative
hearing to receive testimony from the Centers for Medicare and
Medicaid Services and health care professionals concerning the
Medicare Value-Based Purchasing for Physicians Act.
xii. Health Care Information Technology
On July 27, 2005, the Subcommittee held a hearing to
receive testimony from the U.S. Department of Health and Human
Services and health care professionals concerning health care
information technology, and the approach being taken by the
Administration to speed the adoption of health IT and areas
where congressional involvement can further these efforts.
xiii. Value-Based Purchasing for Physicians Under Medicare
On July 21, 2005, the Subcommittee held a hearing to
receive testimony from the U.S. Department of Health and Human
Services and health care professionals concerning value-based
purchasing for physicians under Medicare. The hearing focused
on developments since the last Subcommittee hearing in March on
physician payments and value-based purchasing.
xiv. Post-Acute Care
On June 16, 2005, the Subcommittee held a hearing to
receive testimony from the Centers for Medicare and Medicaid
Services, the Medicare Payment Advisory Commission, U.S.
Government Accountability Office, and health care professionals
concerning post-acute care. The hearing focused on current
financing for post-acute care services in Medicare; the
services available across the various post-acute settings; the
patient assessment instruments used in each settings and the
commonalities between them; and prospects and suggestions for
moving ahead with a common patient assessment tool and more
rational payment system based on beneficiary need rather than
institutional setting.
xv. Long Term Care
On April 19, 2005, the Subcommittee held a hearing to
receive testimony from the Congressional Budget Office and
health care professionals concerning long term care. The
hearing focused on current financing for long term care
services; the range of services available in the continuum of
care from home- and community-based services to nursing home
care; private long term care insurance options, including the
Long Term Care Partnership programs; and the challenges ahead
in financing needed services for an aging population.
xvi. Managing the Use of Imaging Services
On March 17, 2005, the Subcommittee held a hearing to
receive testimony from the Medicare Payment Advisory Commission
and health care professionals concerning managing the use of
imaging services. The hearing focused on on MedPAC's
recommendations for managing the use of imaging services,
especially the need to require physicians to meet quality
standards as a condition of payment.
xvii. Measuring Physician Quality and Efficiency of Care
for Medicare Beneficiaries
On March 15, 2005, the Subcommittee held a hearing to
receive testimony from the Centers for Medicare and Medicaid
Services and health care professionals concerning measuring
physician quality and efficiency of care for Medicare. The
hearing focused on identifying the steps being taken by CMS and
others to measure quality and efficiency of physician care.
xviii. Physician-Owned Specialty Hospitals
On March 08, 2005, the Subcommittee held a hearing to
receive testimony from the Medicare Payment Advisory
Commission, the Centers for Medicare and Medicaid Services, and
health care professionals concerning physician-owned specialty
hospitals.
xix. Medicare Payments to Physicians
On February 10, 2005, the Subcommittee held a hearing to
receive testimony from the U.S. Government Accountability
Office, the Medicare Payment Advisory Commission, and health
care professionals concerning Medicare payments to physicians.
D. Legislative Review of Social Security Issues
1. H. RES.170 REGARDING CLAIMS MADE BY THE PRESIDENT ON THE SOCIAL
SECURITY TRUST
On March 17, 2005, Rep. Dennis Kucinich introduced H. Res.
170, which was referred to the House Committee on Ways and
Means the same day. On April 25, 2005, the Committee considered
the resolution during a markup session and ordered it to be
reported adversely by a vote of 22-1. The measure was reported
adversely on April 27, 2005 (H. Rept. 109-58). The resolution
was placed on the House Calendar, Calendar No. 29. The
resolution requested the President to transmit to the House of
Representatives information in his possession providing
specific evidence for the following statement he made on
February 16, 2005, at a meeting in Portsmouth, New Hampshire:
``And by the way, there is not a Social Security trust.'' The
Committee found that when the 11 words were read in the context
of the President's remarks, it was clear that the President was
discussing the pay-as-you-go nature of the Social Security
program and the difference between a government and private-
sector trust.
2. GROWING REAL OWNERSHIP FOR WORKERS ACT OF 2005
On July 14, 2005, Subcommittee on Social Security Chairman
McCrery introduced H.R. 3304, the ``Growing Real Ownership for
Workers (GROW) Act of 2005.'' The bill was referred to the
Committee on Ways and Means, Subcommittee on Social Security on
July 20, 2005. The Committee did not act on the bill.
H.R. 3304 would have established ``GROW'' accounts for all
workers under the age of 55 at the beginning of 2005, unless
they chose not to have an account. An independent board would
have been appointed to manage and administer GROW accounts.
Each year, after any ``surplus'' Social Security taxes (Social
Security tax revenues in excess of the amount needed to pay
benefits and administrative costs) were credited to the Social
Security Trust Funds, the Secretary of the Treasury would have
distributed an amount equal to the surplus to the independent
board, which would then deposit the worker's share of the
surplus in his or her GROW account. The worker's share of the
surplus would have equaled a specified percentage of the
worker's earnings subject to the payroll tax. The percentage
would have been determined each year based on the relationship
between the amount of the surplus (if any) and the collective
amount of wages and self employment income subject to Social
Security taxes for workers participating in GROW accounts.
The GROW account deposits would have been automatically
invested in a fund of marketable U.S. Treasury securities. At
the beginning of 2009, the independent board would have
submitted a plan to Congress to offer workers other investment
options. The board's plan would have gone into effect
automatically, unless Congress disapproved it.
Upon retirement, GROW account owners would have received a
benefit from their accounts and a benefit from the Social
Security Trust Funds. The benefit from the account would have
equaled the monthly, inflation-adjusted lifetime payment that
could be provided from the account at retirement had it been
invested in the Treasury securities fund. In the case of
married individuals, this calculation would have also included
a monthly payment to the surviving spouse. The rest of the
individual's benefit would have been paid from the Social
Security Trust Funds. Retirees would have been required to take
enough of the account balance in the form of lifetime payments
to ensure combined payments from the account and the trust
funds equal at least 100 percent of the poverty level. Any
remaining account balance could have been withdrawn as the
retiree chose.
No withdrawals would have been permitted from the account
prior to the time the individual started collecting Social
Security retirement benefits. Upon the death of an account
owner, the assets would have been transferred to the account of
an eligible spouse and used to pay widow(er)'s Social Security
benefits. In the absence of a spouse, the account would have
been transferred to the worker's other heirs.
The Social Security actuaries evaluated H.R. 3304 and
determined that it would have extended the solvency of the
Social Security Trust Funds by two years (from 2041 to 2043)
under the intermediate assumptions of the 2005 Social Security
Trustees Report.
3. BORDER PROTECTION, ANTITERRORISM, AND ILLEGAL IMMIGRATION CONTROL
ACT OF 2005
On December 6, 2005, Chairman Sensenbrenner of the
Committee on the Judiciary introduced H.R. 4437, the ``Border
Protection, Antiterrorism, and Illegal Immigration Control Act
of 2005.'' The bill was referred on the same day to the
Committee on the Judiciary, in addition to the Committee on
Homeland Security. On December 13, 2005, the bill was referred
jointly and sequentially to the Committee on Ways and Means and
the Committee on Education and the Workforce until December 14,
2005, at which time the committees were discharged from
consideration. The House approved the bill on December 16, 2005
by a vote of 239-182. The Senate did not take up the bill, but
instead passed its own bill, S. 2611, the ``Comprehensive
Immigration Reform Act of 2006;'' however, the Senate did not
send its bill to the House.
H.R. 4437 would have enhanced physical security at the U.S.
borders and interior enforcement of immigration laws. The
Committee on Ways and Means shared jurisdiction with the
Committee on the Judiciary on a measure to create a mandatory
employment eligibility verification system that would have been
operated by the Secretary of Homeland Security in collaboration
with the Commissioner of Social Security. This system would
have replaced the current verification system, the ``Basic
Pilot'' program, which employers may use voluntarily. This bill
would have required employers to verify all new hires beginning
2 years after enactment and all existing employees not
previously verified no later than 6 years after enactment.
4. SOCIAL SECURITY TRUST FUNDS RESTORATION ACT OF 2006
On December 6, 2006, Senator Charles Grassley introduced S.
4091, the ``Social Security Trust Funds Restoration Act of
2006,'' along with co-sponsor Senator Baucus. The bill passed
the Senate without amendment by unanimous consent on December
7, 2006 and was received by the House the same day. On December
9, 2006, Chairman Thomas asked for unanimous consent that the
Committee on Ways and Means be discharged from further
consideration of the Senate bill and that it be immediately
considered in the House. The House passed the legislation
without objection .\9\
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\9\ At the time of printing, the President had not signed S. 4091
into law.
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S. 4091 corrects bookkeeping errors associated with the
Social Security Administration's voluntary program to withhold
income taxes from Social Security benefit payments. The
Commissioner of Social Security and the Fiscal Assistant
Secretary of the Department of the Treasury sent a joint
letter, along with draft legislative language, to the House and
Senate explaining that the amount of taxes withheld from
beneficiaries was accurate, but that the Social Security
Administration made substantial overpayments to the Internal
Revenue Service for tax years 1999-2005. The Internal Revenue
Service reimbursed the Social Security Trust Funds for the
overpayments plus interest for years 2002-2005, but could not
reimburse the trust funds for years 1999-2001 without the
authority provided in the legislation due to the 3 year statute
of limitation on refund claims.
E. Legislative Review of Human Resources Issues
1. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
a. Reauthorization of the Temporary Assistance for Needy Families
Program
H.R. 240, the ``Personal Responsibility, Work, and Family
Promotion Act of 2005,'' was introduced on January 4, 2005 by
Representative Deborah Pryce (R-OH), with Subcommittee on Human
Resources Chairman Herger and full Committee Chairman Thomas as
original cosponsors. H.R. 240 would have extended and made
improvements to Temporary Assistance for Needy Families (TANF)
and related programs including child care, child support
enforcement, and child protection, and reflected an updated
version of legislation approved by the House of Representatives
during the 107th (H.R. 4737) and 108th (H.R. 4) Congresses. The
TANF program, first authorized by the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193,
often called the 1996 welfare reform law), provides assistance
to about 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. In the absence of agreement on a long-term
reauthorization bill, the 107th, 108th and 109th Congresses
approved a total of twelve short-term extensions of TANF and
related programs (see the section on Extensions of the
Temporary Assistance for Needy Families Program below for more
detailed information).
Titles I and II of H.R. 240 would have extended the
authorization of the TANF block grant through FY2010 at its
current level of $16.6 billion per year, and would have
increased funding for the Child Care and Development Block
Grant (for further detail, see section on Child Care, below).
Title I also would have amended the purposes of TANF to focus
additional efforts on improving child well-being, and would
have focused additional funding specifically on promoting
healthy marriage and responsible fatherhood. The legislation
would have specified universal engagement and self-sufficiency
plan requirements for all families receiving cash assistance.
H.R. 240 would have gradually increased the overall State work
participation rate requirement to 70 percent by FY2010 and
raised the total number of required hours in certain
activities, so that more adults on welfare would have been
expected to engage in a total of 40 hours per week of work (24
hours) and other productive activities (16 hours) in exchange
for their welfare benefit checks. The legislation also would
have eliminated the separate and higher State work
participation rate requirement applicable 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 requirements. Title III of H.R. 240
would have amended the child support enforcement program, as
described in further detail under the Child Support Enforcement
section below. Title IV would have extended and expanded waiver
authority for Federal child protection programs administered
under Title IV-E of the Social Security Act. Title V would have
required review of an increased number of disability
determinations before making benefit payments under the
Supplemental Security Income program. Title VI would have
authorized demonstration projects to allow States additional
flexibility to coordinate multiple Federal programs that
provide assistance to low-income families. Titles VII and VIII
would have reauthorized the abstinence education and
transitional medical assistance programs through FY2010.
At a February 10, 2005 Subcommittee hearing, witnesses
testified about welfare reauthorization proposals and related
programs. Witnesses included a representative from the U.S.
Department of Health and Human Services (HHS), program
administrators, and policy experts. During a February 17, 2005
full Committee hearing on the President's FY2006 budget
proposals, HHS Secretary Leavitt discussed the TANF program and
reauthorization proposals.
H.R. 240 was considered in the Subcommittee on Human
Resources on March 15, 2005 and was reported favorably to the
full Committee with amendment. Provisions from H.R. 240 were
included in the Committee on Ways and Means' recommendations to
the Committee on the Budget for inclusion in budget
reconciliation legislation. The recommendations were reported
out of the full Committee as amended by a recorded vote of 22
to 17 on October 26, 2005. The recommendations were included in
Title VIII of H.R. 4241, the Deficit Reduction Act of 2005. On
November 18, 2005, the House amended S. 1932, the Deficit
Reduction Act of 2005, with the text of H.R. 4241 and passed
the bill on a vote of 217 to 215. The conference report for S.
1932 was adopted in the House by a vote of 212 to 206 on
December 19, 2005. On December 21, 2005, the Senate voted 51 to
50 to approve an amended version of the conference report and
sent S. 1932 back to the House for final action. On February 1,
2006 the House passed the amended conference report on S. 1932
by a vote of 216 to 214. The bill was signed into law on
February 8, 2006 (P.L. 109-171).
The Deficit Reduction Act of 2005 extended the
authorization of the TANF block grant through FY2010, with
block grant funding for States and territories maintained at
the current level of $16.6 billion per year; TANF supplemental
grant funding was continued at current law levels through
FY2008. The Act also provided for a total of $1 billion in
additional funding for mandatory child care, through FY2010.
The Deficit Reduction Act of 2005 also updated the caseload
reduction credit, effective October 1, 2006, to provide States
with credit towards their work participation requirements based
on caseload declines that have occurred since FY2005. The law
also provided $150 million in each of fiscal years 2006 through
2010 to the Secretary of Health and Human Services (HHS) for
making healthy marriage promotion, responsible fatherhood, and
related grants.
b. Extensions of the Temporary Assistance for Needy Families Program
H.R. 1160, the Welfare Reform Extension Act of 2005,
reauthorized the TANF program through June 30, 2005. The
legislation was introduced on March 8, 2005, was passed by the
House on a voice vote on March 14, 2005, was agreed to by
unanimous consent by the Senate without amendment on March 15,
2005, and was signed into law by the President on March 25,
2005 (P.L. 109-4).
A second TANF extension, H.R. 3021, the TANF Extension Act
of 2005, was introduced on June 22, 2005 to extend the program
through September 30, 2005. The House passed the extension by a
voice vote on June 29, 2005, the Senate agreed without
amendment by unanimous consent on June 30, 2005, and the
President signed H.R. 3021 into law on July 1, 2005 (P.L. 109-
19).
H.R. 3672, the TANF Emergency Response and Recovery Act of
2005 (P.L. 109-68) included an extension of the TANF program
through December 31, 2005. (Information about additional
provisions in H.R. 3672 is provided in the Emergency
Legislation in Response to Hurricane Katrina section below.)
H.R. 4635, the TANF and Child Care Continuation Act of
2005, was introduced on December 18, 2005. This legislation
extended TANF and related programs through March 31, 2006. The
House passed the bill by voice vote on December 19, 2005. H.R.
4635 passed the Senate by unanimous consent on December 22,
2005, and the President signed the bill into law on December
30, 2005 (P.L. 109-161).
c. Emergency Legislation in Response to Hurricane Katrina
The TANF Emergency Response and Recovery Act of 2005, H.R.
3672, was introduced on September 7, 2005 to provide additional
TANF and related assistance to families affected by Hurricane
Katrina. The legislation provided additional resources and
flexibility to serve low-income families affected by the
hurricane and who remained in Louisiana, Mississippi and
Alabama, as well as those who fled from hurricane-affected
areas to other States. The bill was passed in the House by
voice vote on September 8, 2005, was passed in the Senate by
unanimous consent on September 15, 2005, and was signed into
law by the President on September 21, 2005 (P.L. 109-68).
On October 6, 2005 the Social Services Emergency Relief and
Recovery Act of 2005, H.R. 3971, was introduced and passed by
voice vote in the House. To help recovery after hurricanes
affecting the Gulf States, Title II of the bill directed the
Secretary of Labor to transfer from the Federal unemployment
account: (1) $15 million to the account of Alabama in the
Unemployment Trust Fund; (2) $400 million to the account of
Louisiana in the Unemployment Trust Fund; and (3) $85 million
to the account of Mississippi in the Unemployment Trust Fund.
It also authorized any State to assist in the administration of
unemployment benefit claims on behalf of any other State, if a
major disaster was declared in another State. The bill, as
amended, passed the Senate by unanimous consent on October 7,
2005 and was signed by the President on October 20, 2005 (P.L.
109-91).
On December 19, 2005, the House passed the conference
report on H.R. 2863, the Department of Defense Appropriations
Act of 2006, by a vote of 308 to 106 with two Members voting
present. Section 302 of the conference report included a
provision to provide the U.S. Secretary of HHS with authority
to waive certain requirements under the Child Care and
Development Block Grant for States affected by Hurricane
Katrina or States serving significant numbers of individuals
adversely affected by a Gulf hurricane disaster. The conference
report passed the Senate on December 21, 2005 by a vote of 93
to 0 and was signed into law by the President on December 30,
2005 (P.L. 109-148).
d. Tenth Anniversary of the 1996 Welfare Reforms
H. Con. Res. 438, a resolution expressing the sense of the
Congress that ``continuation of the welfare reforms provided
for in the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 should remain a priority'' was
introduced by Representative E. Clay Shaw (R-FL) on June 27,
2006 and was passed by the House by a voice vote on July 18,
2006. The resolution expressed the sense of the Congress that
increasing success in moving families from welfare to work, as
well as in promoting healthy marriage and other means of
improving child well-being, as promoted by the welfare reforms
in the 1996 welfare reform law, are very important Government
interests and should remain priorities in the years ahead for
Federal and State agencies responsible for assisting needy
families and others at risk of poverty and dependence on
government benefits.
2. CHILD CARE
H.R. 240, the ``Personal Responsibility, Work, and Family
Promotion Act of 2005,'' would have increased mandatory funds
for the Child Care and Development Block Grant under the
Committee on Ways and Means' jurisdiction from $2.717 billion
in 2005 to $2.917 billion for each of fiscal years 2006 through
2010, for a total increase of $1 billion over the 5-year
period.
H.R. 4241, the ``Deficit Reduction Act of 2005,'' which
included legislation to reauthorize TANF and related programs,
would have increased mandatory funds for the Child Care and
Development Block Grant by a total of $500 million over a 5-
year period and would have increased the share of TANF funds
that States may transfer to the Child Care and Development
Block Grant and Social Services Block Grant.
On February 1, 2006, the House passed the amended
conference report on S. 1932, the Deficit Reduction Act of
2005, and the bill was signed into law on February 8, 2006
(P.L. 109-171). P.L. 109-171 increased mandatory funds for the
Child Care and Development Block Grant under the Committee on
Ways and Means' jurisdiction from $2.717 billion in 2005 to
$2.917 billion for each of fiscal years 2006 through 2010, for
a total increase of $1 billion over the 5-year period.
3. CHILD SUPPORT ENFORCEMENT
Title III of H.R. 240, the ``Personal Responsibility, Work,
and Family Promotion Act of 2005,'' would have amended the
child support enforcement program to (1) provide matching
Federal funds to States that pass through a limited amount of
child support to families receiving cash welfare benefits, (2)
allow States to distribute all child support collected to
former welfare families, and (3) impose a $25 annual user fee
on certain child support cases, among other changes.
Title VIII of H.R. 4241, the ``Deficit Reduction Act of
2005,'' included a number of child support provisions, such as
providing matching Federal funds to States that pass through a
limited amount of child support to families receiving cash
welfare benefits, allowing States to distribute all child
support collected to former welfare families, and imposing a
$25 annual user fee on certain child support cases. In
addition, Title VIII would have reduced the rate of Federal
reimbursement for State child support administrative expenses
from 66 percent to 50 percent by 2010 in order to make the rate
consistent with other major benefit programs.
On February 1, 2006, the House passed the amended
conference report on S. 1932 and the bill was signed into law
on February 8, 2006 (P.L. 109-171). The bill included
provisions to provide matching Federal funds to States that
pass through a limited amount of child support to families
receiving cash welfare benefits, allow States to distribute all
child support collected to former welfare families, and impose
a $25 annual user fee on certain child support cases. In
addition the legislation included provisions to prevent States
from receiving Federal matching reimbursement for spending
Federal child support incentive payments and to reduce the
reimbursement rate for paternity establishment costs from 90
percent to 66 percent.
4. SUPPLEMENTAL SECURITY INCOME
Title V of H.R. 240 would have amended Title XVI of the
Social Security Act to require review of a specified share of
State agency disability determinations before making benefit
payments under the Supplemental Security Income (SSI) program.
Title VIII of H.R. 4241, the ``Deficit Reduction Act of 2005,''
which was introduced on November 7, 2005, included this SSI
disability determination review provision from H.R. 240. It
also included a provision to improve program consistency in the
distribution of lump sum SSI benefit payments. The provision
lowered the threshold for requiring lump sum payment of past-
due benefit payments from the equivalent of 12 months of
maximum benefit payments to the equivalent of 3 months of such
payments. A subsequent version of this legislation (S. 1932)
was signed into law on February 8, 2006 (P.L. 109-171), which
included both SSI provisions, contributing to improved program
integrity.
H.R. 804, a bill ``To exclude from consideration as income
certain payments under the national flood insurance program,''
amended the National Flood Insurance Act of 1968 to declare
that assistance provided under a program for flood mitigation
activities with respect to a property shall not be considered
income or a resource of the owner of the property when
determining eligibility for or benefit levels under any income
assistance or resource-tested program (that is, including SSI)
that is funded in whole or in part by a Federal agency or by
appropriated Federal funds. The bill passed the House by voice
vote on July 12, 2005, was passed by the Senate without
amendment on September 8, 2005, and was signed by the President
on September 20, 2005 (P.L. 109-64). The Committee did not act
on the bill, although portions of the bill fell within the
Committee's jurisdiction due to its affecting eligibility for
and benefit levels under certain programs under the Committee's
jurisdiction, including SSI.
H.R. 1815, the National Defense Authorization Act for
FY2006, passed the House on April 25, 2005 by a vote of 390 to
39. The bill was amended and passed in the Senate by unanimous
consent on November 15, 2005. As passed in the Senate, H.R.
1815 included an SSI provision affecting certain military
families that include an individual being called to active
duty. The provision would allow individuals in families that
include an adult called to active duty status up to 24 months
to regain to SSI eligibility without requiring another
disability application. The conference report on H.R. 1815
included the SSI provision and was passed in the House on
December 19, 2005 by a vote of 374 to 41. The Senate agreed to
the conference report by voice vote on December 21, 2005 and
the President signed the bill on January 6, 2006 (P.L. 109-
163).
5. CHILD PROTECTION, FOSTER CARE, AND ADOPTION
Title IV of H.R. 240 would have extended and expanded
waiver authority for Federal child protection programs
administered under Title IV-E of the Social Security Act. Title
VIII of H.R. 4241 would have extended and expanded waiver
authority for Federal child protection programs administered
under Title IV-E of the Social Security Act. Title VIII of H.R.
4241 also included a provision that would have clarified the
intent of Congress by restating longstanding eligibility
requirements for Federal foster care and adoption assistance;
in addition, the title included a provision that would have
clarified the circumstances under which States may claim
Federal administrative funds for certain children in or at risk
of being placed in foster care. On February 1, 2006, the House
passed the amended conference report on S. 1932 and the
President signed the bill into law on February 8, 2006 (P.L.
109-171). Section 7401 of P.L. 109-171 provided $20 million in
each of fiscal years 2006 through 2010 for grants to each
State's highest court to improve data collection and training
related to child abuse and neglect cases. Section 7402
increased the mandatory funding available for the Title IV-B-2
Promoting Safe and Stable Families Program from $305 million in
FY2005 to $345 million in FY2006. A provision to clarify the
circumstances under which States may claim Federal
administrative funds for certain children in or at risk of
being placed in foster care was included in Section 7403.
Section 7404 clarified the intent of Congress and restated
longstanding eligibility requirements for Federal foster care
and adoption assistance and included a provision to clarify the
circumstances under which States may claim Federal
administrative funds for certain children in or at risk of
being placed in foster care.
On September 14, 2005 H.R. 3132, the ``Children's Safety
Act of 2005,'' passed the House by a vote of 371-52. Title V of
the legislation would have required background checks and
checks of national crime information databases and State child
abuse registries before approval of foster or adoptive
placements. Provisions in the legislation also would have
eliminated the ability of any additional States to opt-out of
Federal background check requirements restricting Federal
support for the placement of children with foster or adoptive
parents with serious criminal histories (while allowing those
States that currently opt-out of these requirements to continue
to do so until October 1, 2008). The Committee did not act on
the bill, portions of which affect foster care and adoption
programs under the Committee's jurisdiction. On July 25, 2006
the House passed by voice vote the Senate-amended version of
H.R. 4472, the Adam Walsh Child Protection and Safety Act of
2006 and the bill was signed into law on July 27, 2006 (P.L.
109-248). Title V of this act included provisions previously
passed as part of H.R. 3132.
S. 1894, the Fair Access Foster Care Act of 2005, which
amended Part E of Title IV of the Social Security Act to
provide for the making of foster care maintenance payments to
private for-profit agencies, was passed in the House by a vote
of 408 to 1 on November 9, 2005 and was signed into law by the
President on November 22, 2005 (P.L. 109-113).
On May 24, 2006 the House passed by voice vote H.R. 5403,
the Safe and Timely Interstate Placement of Foster Children Act
of 2006. H.R. 5403 was passed in the Senate by unanimous
consent on June 23, 2006 and was signed into law by the
President on July 3, 2006 (P.L. 109-239). The bill amended the
Social Security Act to require that States establish a 60 day
Federal deadline for completing interstate home studies but
provides that through September 30, 2008, States can have up to
a total of 75 days if, for example, they document circumstances
beyond their control that prevented the home study from being
completed within 60 days. The law also authorized incentive
payments of $1,500 for each interstate home study that a State
completes within 30 days and encourages identification and
consideration of in-State and out-of-State placement options as
part of currently required permanency planning activities for
children who will not be reunified with their parents. The bill
required courts to notify any foster parents, pre-adoptive
parents, and relative caregivers of a child in foster care of
any court proceeding to be held concerning the child,
strengthened the right of these individuals to be heard at
permanency planning proceedings and required States to give
children aging out of foster care a free copy of their health
and education record.
H. Res. 959, a resolution recognizing and supporting the
success of the Adoption and Safe Families Act of 1997 (P.L.
105-89) in increasing adoption and encouraging adoption
throughout the year, was introduced by Representative Dave Camp
on July 27, 2006. The House passed H. Res. 959 by voice vote
under Suspension of the Rules on September 19, 2006.
On May 23, 2006 the Subcommittee held a hearing to review
specific proposals to improve child protection services,
including options for extending programs under the
Subcommittee's jurisdiction such as the Promoting Safe and
Stable Families (PSSF) and Child Welfare Services (CWS)
programs. Following this hearing, on June 20, 2006, Chairman
Wally Herger introduced H.R. 5640, the ``Child and Family
Services Improvement Act of 2006,'' which was cosponsored by
Human Resources Subcommittee Ranking Member Jim McDermott and
several other Committee Members. H.R. 5640 was considered and
amended and then reported favorably by voice vote from the
Committee on June 29, 2006. On July 25, 2006, the House amended
S. 3525, the ``Improving Outcomes for Children Affected by Meth
Act of 2006,'' with the text of H.R. 5640 and passed the bill
by voice vote. The Senate concurred to the House amendments
with an amendment to S. 3525 on September 20, 2006. The Senate-
approved version of S. 3525, as amended, was adopted in the
House by a voice vote on September 26, 2006 and the bill was
signed into law on September 28, 2006 (P.L. 109-288). P.L. 109-
288 made several improvements to the nation's child protection
system. The law included provisions to: (1) reauthorize the
PSSF program through FY 2011 while authorizing $345 million per
year in mandatory funds and $200 million per year in
discretionary funds; (2) target resources to ensure children in
foster care are visited by caseworkers on at least a monthly
basis and to assist regional partnerships in combating the
effects of parental substance abuse, particularly
methamphetamine abuse, on the child protection system; (3)
improve the Child Welfare Services program; (4) reauthorize the
Court Improvement Program through FY2011; (5) reauthorize and
improve the Mentoring Children of Prisoners Program through
FY2011; and (6) appropriate for FY2006 the additional $40
million in mandatory funding provided under the P.L. 109-171
for the PSSF program.
On December 8, 2006, the House passed H.R. 6111, the Tax
Relief and Health Care Act of 2006, by a vote of 367 to 45.
Provisions in Title IV of the legislation require that each
State plan for foster care and adoption assistance describe
procedures the State has in effect for verifying the
citizenship or immigration status of any foster child in State
custody. The Senate passed H.R. 6111 on December 9, 2006 and
the bill was signed into law on December 20, 2006.\10\
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\10\ At the time of printing, the Public Law number for H.R. 6111
was not available.
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6. UNEMPLOYMENT COMPENSATION
See the Emergency Legislation in Response to Hurricane
Katrina section above regarding action on unemployment
compensation provisions included in H.R. 3971, the Social
Services Emergency Relief and Recovery Act of 2005 (P.L. 109-
91).
7. REPATRIATION
On July 26, 2006 the House passed by unanimous consent the
Senate-amended version of H.R. 5865, the Returned Americans
Protection Act of 2006. The President signed H.R. 5865 on July
27, 2006 (P.L. 109-250). The law amended Title XI of the Social
Security Act to temporarily (through the end of FY2006) lift
the $1 million annual cap on the ``Assistance for U.S. Citizens
Returned from Foreign Countries'' repatriation program to help
meet the need for temporary assistance of U.S. citizens
returning to the U.S. due to violence in Lebanon. The cost of
this increase was offset by allowing States to use the child
support program's National Directory of New Hires to verify
Food Stamp participants' employment and wage information. The
Secretary of HHS assured Ways and Means Chairman Thomas in
writing that the HHS Inspector General will report to Congress
by March 1, 2007 on how program funds were spent to assist
those repatriating from Lebanon, including by providing a
breakdown of administrative costs versus direct assistance such
as travel and lodging expenses. This additional information
will help Congress fulfill its responsibility to ensure the
proper use of taxpayer funds.
F. Legislative Review Of Debt Issues
On April 28th, 2005, the House and Senate agreed to the
conference report on H. Con. Res. 95, the Concurrent Resolution
on the Budget for Fiscal Year 2006, which included in it
instructions to the Committee on Ways and Means to increase the
statutory debt limit from $8.184 trillion to $8.965 trillion.
The conference report (H. Rept. 109-62) was agreed to by the
House by a vote of 214-211, and by the Senate by a vote of 52-
47. As a result of the adoption of the FY2006 budget, H.J. Res.
47, a bill to increase the statutory limit on the public debt,
was deemed passed in the House pursuant to House Rule XXVII.
H.J. Res. 47, which increased the debt limit by $781 billion to
$8.965 trillion, was passed by the Senate on March 16, 2006
without amendment by a Yea-Nay vote of 52-48, and was signed
into law by the President on March 20, 2006 (P.L. 109-182).
II. Oversight Review
A. Oversight Agenda
Committee On Ways And Means,
U.S. House Of Representatives,
Washington, DC, February 2, 2005.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
2157 Rayburn House Office Building, Washington, DC.
Hon. Robert W. Ney,
Chairman, Committee on House Administration,
1309 Longworth House Office Building, Washington, DC.
Dear Chairman Davis 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 109th Congress.
FULL COMMITTEE
1. Tax Reform. The full Committee intends to hold hearings
to examine proposals to reform Federal taxation.
2. Fiscal Year 2006 and 2007 Budget Initiatives Regarding
Taxes. The full Committee intends to hold hearings to receive
information regarding tax legislation proposed in the
President's 2006 and 2007 budgets.
3. Strengthening Social Security. The full Committee
intends to hold hearings to examine various issues affecting
the well-being of individual recipients, the financial
challenges facing Social Security, and options to address those
challenges.
SUBCOMMITTEE ON OVERSIGHT
1. Internal Revenue Service Budget and Filing Season. The
Subcommittee intends to hold hearings in both 2005 and 2006 to
review the Administration's budget request for the Internal
Revenue Service (IRS) and the annual tax filing season. In
particular, the Subcommittee will review how the IRS is
balancing enforcement efforts with taxpayer service and
modernizing its computer systems.
2. Improving IRS Administration of Tax Laws. The
Subcommittee will review proposals to improve the quality,
efficiency, and fairness of IRS tax administration, including
recently enacted legislation to improve IRS debt collection
procedures. The Subcommittee will monitor new regulations or
policies proposed or implemented by the IRS and to hold
hearings or investigations as appropriate.
3. Pension Benefit Guaranty Corporation. The Subcommittee
will examine developments facing defined benefit pension plans,
and the current and future liability facing the Pension Benefit
Guaranty Corporation (PBGC) that covers the pensions of
approximately 44 million workers.
4. Review of Tax Exempt Organizations. The Subcommittee
will continue to review tax exempt organizations and intends to
hold hearings in coordination with the full Committee and other
Subcommittees on the appropriate role of tax exempt
organizations. The Subcommittee will review current law, the
adequacy of IRS oversight and reporting requirements, and
consider recommendations for reform. The Subcommittee will also
explore the role of Internal Revenue Code (IRC) Section 527
organizations have played in political campaigns.
5. Underground Economy. The Subcommittee will review
information concerning the underground economy, its size,
growth trends, and implications for tax policy.
6. Income Tax Compliance. The Subcommittee will continue to
monitor IRS efforts to assure compliance with individual and
corporate tax laws, including its efforts to improve compliance
in the Earned Income Tax Credit (EITC) program and in other
areas of tax law compliance. The IRS conducted a pilot
initiative in 2004 to test new enforcement techniques, and the
Subcommittee plans to review the results of these efforts and
any new IRS initiatives. In addition, the Subcommittee will
monitor pertinent reports by IRS, Treasury, JCT, and the GAO on
the tax gap or other compliance matters as such reports become
available.
7. Taxpayer Rights. The Subcommittee will continue to
monitor the implementation of taxpayer rights provisions in the
IRS Reform and Restructuring Act (RRA 98) (P.L. 105-206) and
subsequent taxpayer rights legislation and will evaluate new
proposals to enhance taxpayer rights.
8. Taxpayer Privacy. The Subcommittee will examine
compliance with taxpayer privacy issues under IRC Section 6103.
9. Oversight of Drug Interdiction Efforts. The Oversight
Subcommittee will review the extent of federal drug
interdiction activities under the current tax and trade laws
administered by the IRS and in coordination with the U.S.
Customs Service.
10. 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
intends to hold a hearing to give the Administration an
opportunity to describe its trade policy for 2005 and respond
to Member questions. The Subcommittee intends to work with the
Administration under the terms of the Trade Act of 2002 (P.L.
107-210), given the expiration of Trade Promotion Authority
(TPA) in 2005 unless the Administration requests renewal until
2007.
2. World Trade Organization. The Subcommittee intends to
hold hearings on United States preparations for the December
2005 WTO Ministerial in Hong Kong and progress in the ongoing
negotiations on the Doha Development Agenda, particularly with
respect to agriculture, services, industrial tariffs, and
development issues. The Subcommittee intends to continue its
oversight over U.S. participation in the WTO in keeping with
section 125 of the Uruguay Round Agreements Act (P.L. 103-465).
3. Bilateral Free Trade Agreements with Central America and
Bahrain. The Subcommittee will continue its oversight of the
negotiations for bilateral free trade agreements with Central
America (Costa Rica, El Salvador, Guatemala, Honduras,
Nicaragua, and the Dominican Republic) and Bahrain. Now that
these negotiations have concluded, the Subcommittee will
continue to consult with the Administration and at the
appropriate time will hold hearings on the agreements and
consider implementing legislation under TPA processes.
4. Bilateral and Regional Free Trade Agreements Under
Negotiation. The Subcommittee will continue its oversight and
assess the status of negotiations for bilateral free trade
agreements with countries for which the Administration has
notified Congress of its intent to negotiate: Panama; the
Andean countries (Colombia, Ecuador, Peru, and Bolivia); the
Southern African Common Market (Botswana, Lesotho, Namibia,
South Africa and Swaziland); Thailand; the United Arab
Emirates; Oman; and the Free Trade Area of the Americas. When
these negotiations are concluded, the Subcommittee expects to
hold hearings on the agreements and will consider implementing
legislation under TPA processes. In addition, the Subcommittee
will explore whether other countries may be appropriate
candidates for free trade agreements and will examine the
effect on U.S. interests of free trade agreements or lesser
bilateral agreements concluded by U.S. trading partners.
5. Bilateral Free Trade Agreements Entered into Force. The
Subcommittee will continue its oversight to assess the status
of agreements that have already been concluded and for which
Congress has passed implementing legislation under TPA (Chile,
Singapore, Australia, and Morocco).
6. Miscellaneous Duty Suspensions and Technical Corrections
to U.S. Trade Laws. The Subcommittee intends to consider
legislation to temporarily suspend duties on noncontroversial
products.
7. U.S. Trade Remedy Laws. The Subcommittee will continue
to review the application of U.S. antidumping, countervailing
duty, general safeguard, product-specific safeguard, and
textile safeguard laws, including the impact of these remedies
on the injured domestic industries as well as the effect of
trade remedies on downstream users of products subject to these
actions. The Subcommittee will continue to monitor the status
of WTO negotiations, consultations, panel proceedings, and
decisions concerning U.S. trade remedy laws and their
application and will work with the Administration to assure
compliance with U.S. WTO obligations.
8. Authorizations for the Department of Homeland Security,
the Office of the United States Trade Representative and the
U.S. International Trade Commission. The Subcommittee intends
to hold hearings on authorizations for the trade agencies for
FY 2006 and 2007 and work towards passage of authorization
legislation. The Subcommittee will review funding for the
customs revenue functions of the Department including, but not
limited to, Customs Automated Commercial Environment (CACE),
textile transshipment efforts, and the International Trade Data
System (ITDS). In particular, the Subcommittee will examine the
scope of the authorization for Customs given its incorporation
into the U.S. Department of Homeland Security and will continue
to conduct oversight of that reorganization and its impact on
the collection of revenue and trade facilitation.
9. 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 account,
especially whether the account contains sufficient resources to
fund inspectional services and whether revised fee collections
are appropriate. Significant issues to consider will be the
entire nature of fees for customs operations within a much
larger non-trade organization of the U.S. Department of
Homeland Security. The Subcommittee will consider whether
Customs is implementing requirements of the Trade Act of 2002
and the American Jobs Creation Act of 2004 (P.L. 108-357)
related to user fees.
10. Trade Adjustment Assistance. The Subcommittee will
continue its oversight of the general TAA programs for workers
and firms in light of the substantial revisions made by the
Trade Act of 2002 (P.L. 107-210).
11. Trade Relations with China. The Subcommittee will
continue to monitor China's compliance with its WTO obligations
and its role in the global marketplace. The Subcommittee will
also continue to examine China's macroeconomic policies and
will consult with the Administration to address issues that
arrive.
12. Normal Trade Relations with Jackson-Vanik Countries.
The Subcommittee will continue its oversight over the
application of Jackson-Vanik provisions for countries subject
to this statute. The Subcommittee will also continue its
oversight over Presidential grants of Jackson-Vanik waivers and
determinations in compliance with Jackson-Vanik requirements.
In addition, the Subcommittee will continue to consult with the
Administration concerning the progress of these countries in
negotiating their accession to the WTO.
13. Trade Preference Legislation. The Subcommittee will
continue its oversight over the Trade and Development Act of
2000 (P.L. 106-606) (Africa/Caribbean Basin Initiative), the
enhancement to these programs contained in the Trade Act of
2002, the Andean Trade Preferences Act, and the AGOA
Acceleration Act to ensure that the legislation is being
implemented in a manner consistent with Congressional intent.
The Subcommittee will continue its efforts, begun in the 108th
Congress, to extend preferential benefits to Haiti. In
addition, the Subcommittee will also examine whether preference
programs should be extended to other countries.
14. Textiles and Apparel. The Subcommittee will continue
its oversight as to: the value of trade preference programs and
their effect on U.S. industries; impact of the elimination of
textile quotas in January 2005 on U.S. industries, countries
receiving trade preferences, and other countries; effectiveness
of efforts to halt illegal transshipment; and the use of
textile safeguards (particularly with respect to transparency
and application of statutory standards).
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
particular whether any 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.
16. Burma. In keeping with the provisions of the Burmese
Freedom and Democracy Act of 2003 (P.L. 108-61), the
Subcommittee will examine on a yearly basis whether import
sanctions against Burma (Myanmar) should be continued.
17. Rules of Origin and Country of Origin Marking. The
Subcommittee will continue to review and consult with the
Administration and the trade community on the status of 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; and review the
implementation labeling requirements by United States and its
trading partners with respect to meat, fresh produce, and
genetically modified products.
18. 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.
19. Asia Pacific Economic Cooperation 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.
SUBCOMMITTEE ON HEALTH
1. Medicare Program Oversight. The Subcommittee intends to
hold a hearing to evaluate the management of the Medicare
program by the Centers for Medicare and Medicaid Services
(CMS). The Subcommittee will explore changes that could be made
to improve CMS's efficiency and its interactions with
beneficiaries and the providers who serve them. The
Subcommittee will examine CMS's progress on implementing the
changes required by the Medicare Modernization Act (MMA) (P.L.
108-173).
2. Medicare Payments for Physician Services. The
Subcommittee intends to hold hearings to examine Medicare
reimbursement for physician services, including problems
associated with the Sustainable Growth Rate formula and will
explore alternative payment structures. In addition, the
Subcommittee will examine creating incentives to promote
physician performance and efficiency and will look at issues
surrounding physician resource use. Geographic variations in
payments to physicians will also be scrutinized. Finally, the
Subcommittee will continue its oversight of payment adequacy
for oncology related services, drugs, and biologics, including
the changes made by the MMA.
3. Medicare Payment for Hospital Services. The Subcommittee
intends to examine pricing transparency for hospital services.
In addition, the Subcommittee will conduct oversight of the
current reimbursement structure under Medicare, including
potential hearings on operation of the wage index and
differences between specialty and community based institutions.
The Subcommittee intends to hold a hearing on paying for
performance and physician resource use in the hospital setting.
The Subcommittee intends to hold a hearing on financial
reporting for hospitals, including instruments to better
reflect costs and to promote the timeliness of data reporting.
4. Medicare Payments for Post-Acute Care. The Subcommittee
intends to hold a hearing on payments to post-acute care
providers in the Medicare program to determine whether the
payment structures create incentives to inappropriately shift
site of care to more lucrative settings. In addition, the
Subcommittee will study proposals that provide financial
security to individuals for long term care costs outside of the
traditional Medicare structure.
5. Retiree Health Coverage and Interaction with Medicare.
The MMA required the U.S. Government Accountability Office
(GAO) to conduct initial and final reports on the trends in
retiree health coverage, new options available to employers to
subsidize coverage included in the MMA and what impact, if any,
these subsidies had on retiree coverage. The Subcommittee will
examine implementation of the MMA subsidies as they relate to
retiree health coverage.
6. Medicare Waste, Fraud and Abuse. The Subcommittee will
examine enforcement of laws to combat waste, fraud and abuse in
the Medicare program and what steps might be taken to improve
their application. The Subcommittee will also examine the issue
of Medicare program solvency.
7. Medically Uninsured. The Subcommittee intends to hold a
hearing on options to reduce the number of individuals and
families without health insurance. The hearing will include an
examination of tax credits, reinsurance of risk and purchasing
pools, among other solutions.
8. New Technologies in the Medicare Program. The
Subcommittee intends to hold a hearing on CMS policies that
foster or hinder the adoption of new technologies in the
Medicare program, including coverage and reimbursement policies
and national and local coverage determinations.
9. Other Medicare Payments. The Subcommittee intends to
hold a hearing on the appropriateness of payments to other
Medicare providers, including home health agencies, skilled
nursing facilities, end stage renal disease providers, durable
medical equipment suppliers and others. Such an examination
will include proposals to make Medicare more efficient and
responsive.
10. Health Savings Accounts. The Subcommittee intends to
hold hearings and conduct other oversight activities on Health
Savings Accounts.
11. Medicare Advantage Program. The Subcommittee intends to
hold hearings and conduct other oversight activities on the
Medicare Advantage program. The Subcommittee intends to examine
payment and structural changes to Medicare Advantage plans
enacted as a result of the MMA.
12. Other Issues. Further hearings will be scheduled as
time permits to examine certain additional aspects of Medicare
program management. Matters to be considered may include health
care information technology, health care quality issues,
Medigap reform, medical liability reform, especially as it
affects the Medicare program and patient safety issues.
SUBCOMMITTEE ON HUMAN RESOURCES
1. Welfare Reform. Reauthorizing the Temporary Assistance
for Needy Families (TANF) and related programs to amend and
improve the 1996 welfare reform law continues to be a priority
for the Subcommittee. Issues of particular interest to the
Subcommittee include how TANF block grant funds and other HHS
efforts to communicate with the public are used to develop
strong families and encourage healthy marriage and how welfare
reform policies can be strengthened to better promote increased
work, reduced poverty, enhanced program integrity, and improved
child well-being.
2. Child Support and Fatherhood. The Subcommittee intends
to hold hearings on the nation's Federal-State child support
system, review the results of program changes made in 1996 and
1998 law, and consider proposals for further improvements. The
Subcommittee also will review proposals to encourage
responsible fatherhood and closer involvement between fathers,
children and families, both as a result of child support and
other program policies.
3. Supplemental Security Income. The Supplemental Security
Income (SSI) program provides over $30 billion in benefit
payments to 7 million disabled needy individuals each year. The
Subcommittee will review proposals to reduce fraud and abuse in
the program, and examine options for improving program outcomes
such as enhancing the ability of individuals to return to work.
4. Child Protection. The Subcommittee held a number of
child protection oversight hearings during the 108th Congress,
examining the purposes and outcomes of current child protection
programs. The Subcommittee will review program improvement
proposals for child protection programs broadly, as well as
involving distinct issues such as the handling of interstate
placements. The Subcommittee also will review the operation of
the Promoting Safe and Stable Families program in anticipation
of the expected reauthorization of this program prior to the
end of fiscal year 2006.
5. Unemployment Compensation. The Subcommittee intends to
hold hearings on the Nation's unemployment compensation system.
Issues of interest include a more detailed understanding of the
characteristics of unemployment benefit recipients over time,
and improving the program to better promote work, savings, and
program integrity. The Subcommittee also will review
reemployment services provided to unemployment benefit
recipients, and consider whether better return-to-work outcomes
can be achieved through reforms.
SUBCOMMITTEE ON SOCIAL SECURITY
1. Strengthening Social Security. The Subcommittee intends
to hold hearings to examine the degree to which Social Security
programs are meeting the needs of today's and tomorrow's
beneficiaries, along with the financial challenges facing the
program and proposals to strengthen Social Security.
2. Use of the Social Security Number. The Subcommittee will
continue their examination of the integrity of Social Security
numbers (SSNs) and Social Security cards as identifiers,
including their role in identity theft and other fraud.
3. Disability Program Reform and Oversight. The
Subcommittee intends to hold hearings on the Social Security
Disability Insurance (DI) program, including: the Social
Security Administration's (SSA's) implementation of the Ticket
to Work and Work Incentives Improvement Act (P.L. 160-170);
oversight of SSA's disability program management, including
efforts to improve workload processing at both the initial
application and appeals levels.
4. Stewardship of the Social Security Programs. The
Subcommittee intends to hold oversight hearings to examine the
management of the Social Security programs, including
international agreements, to assess their potential
vulnerability to waste, fraud, and abuse, and to explore
necessary legislative remedies.
5. Service Delivery. The Subcommittee intends to hold
oversight hearings to examine SSA's service delivery to the
public, including efforts to modernize service delivery to meet
the changing expectations of today's customers, and SSA's
efforts to communicate with the public about the financing
challenges facing Social Security and possible changes to the
program.
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.
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. Fiscal Year (FY) 2006 and 2007 Budget Initiatives
Regarding Taxes and Tax Reform.
Actions taken: The Committee held hearings on various tax
reforms suggested in the President's FY 2006 and FY 2007
budgets during the 109th Congress. Hearings to receive
testimony from Administration officials and private sector
witnesses on the FY 2006 budget were held in February and March
of 2005, while hearings to receive testimony from
Administration witnesses on the FY 2007 budget were held in
February 2006.
In addition, on June 8, 2005, the Committee received
testimony on economic policy issues for consideration in
reforming federal taxation from (i) Alan J. Auerbach, Professor
of Economics and Law, University of California at Berkeley;
(ii) William Beach, Director of the Center for Data Analysis,
The Heritage Foundation; (iii) Leonard E. Burman, Co-Director
of Tax Policy Center and Senior Fellow, Urban Institute; (iv)
R. Glenn Hubbard, Dean, Columbia University Graduate School of
Business; (v) and Joel B. Slemrod, Professor of Economics,
University of Michigan.
On November 1, 2005, the President's Advisory Panel on
Federal Tax Reform released its report, entitled, ``Simple,
Fair, and Pro-Growth: Proposals to Fix America's Tax System.''
In response, the Subcommittee on Select Revenue Measures held a
series of hearings to hear testimony dealing with various
aspects of Tax Reform. On July 28, 2005, the Subcommittee
received testimony from Members of Congress concerning their
proposals for restructuring federal taxes. On November 16,
2005, the Subcommittee received testimony on reform proposals
from Members of the Congress. On May 9, 2006, the Subcommittee
examined issues involved in possible corporate tax reforms
including rate reduction, base broadening and whether tax
accounting should conform to book accounting methods. On June
22, 2006, the Subcommittee received testimony concerning trends
in international taxation affecting U.S. businesses overseas
and suggestions for reform. On September 26, 2006, the
Subcommittee received testimony on reform proposals from
Members of Congress.
2. Strengthening Social Security.
Actions taken: The Committee held a total of three hearings
on protecting and strengthening Social Security.
The Committee held a hearing on March 9, 2005 on the future
of Social Security. Testimony was heard from the United States
Comptroller General and the two Public Trustees of the Social
Security Trust Funds. Witnesses discussed the impending
insolvency of the Social Security Trust Funds and the fact that
the program's financial challenges are being driven in large
part by the aging of baby boomers, longer life expectancy, and
families having fewer children. The witnesses generally agreed
that the sooner the program's financial challenges are
addressed, the better it would be for workers, beneficiaries,
and the Federal budget.
On May 12, 2005 the Committee held a hearing on various
alternatives to strengthen Social Security. Testimony was heard
from policy experts on Social Security benefits and financing.
Witnesses discussed various alternatives for increasing Social
Security taxes, slowing the growth of benefits, and advance-
funding future Social Security benefits by providing workers
the opportunity to own personal accounts. Each of these options
would have different effects on workers and beneficiaries, as
well as the national economy and the Federal budget. The
witnesses generally agreed on the importance of strengthening
Social Security's finances and the important role the program
plays in helping to prevent poverty in retirement, as well as
the need to preserve benefits for vulnerable groups such as
individuals with disabilities, low-wage workers, and surviving
spouses and children. Many of the witnesses also cited the
advantages of establishing personal accounts as part of Social
Security, including the potential to improve retirement
incomes, strengthen program finances, and increase national
saving.
The Committee held a hearing on May 19, 2005 on the
retirement and policy challenges and opportunities of our aging
society. Testimony was heard from the Director of the
Congressional Budget Office (CBO), the Chairman of the Social
Security Advisory Board, and policy experts. The CBO Director
provided an overview of America's changing demographics and
discussed rapidly growing expenditures for seniors' health care
(especially Medicare and Medicaid) and Social Security, and the
associated economic and budgetary challenges. The Social
Security Advisory Board Chairman discussed findings from the
Board's report Retirement Security: the Unfolding of a
Predictable Surprise. The policy expert witnesses provided
information on the demographic forces influencing Social
Security's financial challenges, the extent to which retirees
depend on Social Security, the need to strengthen personal
saving, and various options for strengthening retirement income
security.
Subcommittee on Oversight
A. Subcommittee Hearings for 109th Congress
1. 2005 Tax Return Filing Season and the IRS Budget for
Fiscal Year 2006.
Actions taken: On April 14, 2005, the Subcommittee held its
annual hearing examining the tax return filing season. The
Subcommittee heard testimony from the Commissioner of the IRS,
the Chairman of the IRS Oversight Board, the Government
Accountability Office (GAO), and several representatives of the
tax practitioner community. Much of the testimony presented to
the Subcommittee focused on the IRS's efforts to increase
enforcement and maintain customer service in an era of
budgetary pressures. Taxpayers filed more than 120 million
returns, including more than 65 million electronically filed
returns. The Administration's budget requested $10.7 billion to
fund the IRS for fiscal year 2006. Congress and the President
approved $10.6 billion in the Transportation, Treasury, Housing
and Urban Development, the Judiciary, the District of Columbia,
and Independent Agencies Appropriations Act of 2006 (P.L. 109-
115).
2. Overview of the Tax-Exempt Sector.
Actions taken: The Committee on Ways and Means held a
hearing providing a broad overview of the tax-exempt sector on
April 20, 2005. This hearing was a first step in the
Committee's detailed review of the tax-exempt sector. At this
hearing, the Committee heard testimony from the Joint Committee
on Taxation, the Government Accountability Office and several
experts on exempt organizations. The hearing showed that the
exempt sector has steadily grown over time without adequate
direction from Congress, and that, in some cases, the original
justifications for some exemptions may no longer exist. This
hearing provided Members of the Committee with background on
the size and scoe of the exempt sector, as well as an overview
of some current issues.
3. IRS Strategic Plans and Fiscal Year 2006 Budget.
Actions taken: On May 19, 2005, the Subcommittee
coordinated the annual Joint Congressional Review of the IRS, a
hearing required by the IRS Restructuring and Reform Act of
1998. Participants from six House and Senate Committees were
invited to participate in this hearing, which allowed Members
from the House Committees on Ways and Means, Appropriations,
Government Reform and the Senate Committees on Finance,
Appropriations, Homeland Security and Government Affairs to
focus on oversight of the IRS, its strategic plans, and the
fiscal year 2006 budget.
4. The Tax-Exempt Hospital Sector.
Actions taken: The full Committee held a hearing on May 26,
2005, focusing on the basis for the tax exemption granted to
non-profit hospitals. Health-related organizations account for
60 percent of charitable organizations when measured by
revenue, and the tax exemption for hospitals is worth billions
of dollars each year. Accordingly, the hearing examined whether
there is an adequate justification for the tax-exempt status of
hospitals. At the hearing, the Committee heard testimony
explaining that the standard for hospitals' exemption has
steadily weakened to the point that there is little difference
between non-profit hospitals and for-profit hospitals. In
addition, the Internal Revenue Service regulations that
establish requirements for non-profit hospitals to maintain
their tax-exempt status are no longer meaningful. At the
request of the Committee, the Congressional Budget Office (CBO)
wrote and released two reports. One report showed while many
non-profit hospitals are providing charity care to the
communities that support them, some provide very little and
often the non-profits are providing charity care at the same
rate as tax-paying hospitals. The second report showed the
federal subsidy through tax-exempt bonds lowers the cost of
capital for non-profit hospitals and creates an incentive for
them to use this subsidy instead of spending their own
investment assets on capital projects. On December 8, 2006,
Chairman Thomas introduced H.R. 6420, the ``Tax Exempt Hospital
Responsibility Act of 2006'' which would provide a minimum
statutory standard for a hospital to qualify as tax exempt, in
addition to the other present law requirements for tax
exemption. Tax exempt hospitals would be required to provide
medical care or service for free or at discounted rates to low
income uninsured patients.
5. Review of the Tax Deduction for Facade Easements.
Actions taken: On June 23, 2005, the Subcommittee held a
hearing about the growing practice of donating easements on the
facade of historic structures. An investigation by the
Committee indicated that over the last four years, this
practice had grown dramatically in certain areas, and that it
was being abused by taxpayers and tax-exempt organizations.
Certain exempt organizations urged taxpayers to overvalue their
easement donations, which allowed them to receive a substantial
tax deduction yet cede very little of value to the exempt
organization. The Subcommittee reviewed the practices of the
most prominent tax-exempt organization handling easement
donations, the National Architectural Trust (NAT). The hearing
showed that NAT was actively involved in promoting
overvaluation of facade easement donations, and that the
founders of NAT profited handsomely from the activities, making
$1.9 million over the past three years. To address some of the
abuses, the IRS has modified tax forms and is conducting
audits. The Pension Protection Act of 2006 (P.L. 109-280),
placed restrictions on the easement deduction for historic
structures. Under the new law, the easement must prohibit the
entire exterior of the building from being changed or altered
in a manner inconsistent with the historical character of the
exterior. This provision also clarifies that the charitable
deduction is reduced if a rehabilitation tax credit has been
claimed with respect to the property.
6. Examine Tax Fraud Committed by Prison Inmates.
Actions taken: On June 29, 2005, the Subcommittee held a
hearing on tax fraud committed by prison inmates. The
Subcommittee had completed an investigation of this growing
problem, learning that the Internal Revenue Service (IRS)
detects over 18,000 cases of tax return fraud by prison inmates
each year, yet the actual number of cases of fraud could be
much higher. Even though the IRS detects over 18,000 cases of
fraud each year, it only stops fraudulent refunds from being
issued in about 70 percent of the cases. Moreover, the IRS can
never inform prison authorities when inmates have committed
fraud, due to taxpayer confidentiality laws. As a result of the
hearing, the IRS has announced that it will be introducing new
procedures to try to stop more cases of inmate fraud. In
addition, Chairman Ramstad introduced legislation to allow the
IRS to share information with state and federal correctional
authorities to allow them to take appropriate action against
inmates who commit tax fraud.
7. Fraud in Income Tax Preparation.
Actions taken: On July 20, 2005, the Subcommittee held a
hearing to examine evidence of negligent and fraudulent return
preparation practices by tax professionals and the statutory
and regulatory structure applicable to Federal tax practice.
The Subcommittee learned that tax return preparers play an
important role--with more than 1.2 million paid preparers
preparing more than 70 million returns each year. However,
there is little oversight of paid preparers, no comprehensive
registration of return preparers, and no requirement that paid
preparers meet any threshold for competency requirements. The
Subcommittee also considered whether there are ways to improve
the oversight and education of paid return preparers without
creating a cumbersome bureaucracy.
8. Review of Credit Union Tax Exemption.
Actions taken: On November 3, 2005, the Committee held a
hearing examining the tax exemption granted to credit unions.
The purpose of this hearing was to review the justification for
the exemption, and to see what credit unions do to earn their
tax-exempt status. Testimony and discussion at the hearing
indicated that many questions exist about the purpose of the
tax exemption. Credit unions are not required to serve low-
income populations, despite this being one of the reasons for
exemption, and many have steadily expanded their fields of
membership over time. Moreover, certain Members and witnesses
questioned whether there is adequate transparency in credit
unions' operations. Many credit unions do not file Form 990s
with the Internal Revenue Service, and therefore there is
little information about key aspects of credit union
operations. The Committee also examined the role of the
National Credit Union Administration (NCUA), the government
regulator of credit unions, and whether the agency is
independent from the industry it regulates. Testimony indicated
that the NCUA does not collect any data about who credit unions
serve and could benefit from being more active in other areas
of regulation than safety and soundness.
9. Review the Response by Charities to Hurricane Katrina.
Actions taken: On December 13, 2005, the Subcommittee held
a hearing reviewing the response by charitable organizations to
Hurricane Katrina. Due to the scope of the disaster, a
multitude of charities helped provide food, shelter, clothing,
and financial assistance to storm victims. The hearing examined
several issues, including the coordination of relief among
charities, whether charitable contributions were used
effectively, and the availability of relief services to rural
areas, minorities, and disabled individuals. The American Red
Cross received much of the attention, because of its status as
the charity that most Americans turn to during crises and
because it is tasked under the federal government's National
Response Plan to provide food, shelter, first aid, and
counseling to disaster victims. Certain Members questioned
whether it was prudent to place such great responsibility in
the hands of one nongovernmental organization. The morning of
the hearing, the Red Cross announced the resignation of its
president, Marsha Evans.
10. Social Security Number High Risk Issues and Employer
Wage Reporting.
Actions taken: On February 16, 2006, the Subcommittees on
Social Security and Oversight held a joint hearing on employer
wage reporting as part of the Social Security Subcommittee's
hearing series on Social Security Number high risk issues.
Testimony was provided by the Internal Revenue Service, Social
Security Administration (SSA) and the Department of Homeland
Security (DHS). Testimony at the hearing showed that DHS
worksite enforcement has decreased in recent years, IRS
enforcement of accurate wage reporting is not a priority, and
there are still significant shortcomings in the information
sharing arrangements between DHS, SSA and IRS. DHS indicated
that they would like to receive additional information from SSA
or IRS, such as the egregious employers list, SSA no-match
letters or Earnings Suspense File data. However, these records
are subject to taxpayer privacy protections under the law. In
addition, testimony indicated that DHS was not utilizing
information provided by SSA through the non-work alien file.
11. 2006 Tax Return Filing Season and the IRS Budget for
Fiscal Year 2007.
Actions taken: On April 6, 2006, the Subcommittee held its
annual hearing on the tax return filing season. Witnesses
included the Commissioner of the Internal Revenue Service, the
Treasury Inspector General for Tax Administration, the IRS
Oversight Board, the Government Accountability Office, the
Executive Director of the Free File Alliance, and several tax
practitioner representatives. Taxpayers filed more than 124
million returns, including filing more than 70 million returns
electronically. The Administration's budget requested $10.6
billion to fund the IRS for fiscal year 2007. In addition to
examining the 2006 tax return filing season and the IRS budget
for fiscal year 2007, the hearing focused on whether a new
agreement between the IRS and private industry to provide free,
online tax return preparation and filing services was
adequately serving taxpayers. The new agreement created a cap
on the number of taxpayers who could qualify for free services,
which contributed to a decline in their usage of over 20
percent. At the hearing, the IRS Commissioner pledged to
consider renegotiating the agreement with private industry.
12. Charities and Employment Taxes: Are Charities in the
Combined Federal Campaign Meeting their Employment Tax
Responsibilities?
Actions taken: On May 25, 2006, the Subcommittee held a
hearing examining charities participating in the Combined
Federal Campaign (CFC) and the Office of Personnel Management's
(OPM) screening process for accepting charities into the
campaign. The Government Accountability Office (GAO) conducted
an investigation of the charities' tax debts and whether these
charities also received Federal grants. According to GAO,
approximately 1,300 charities participating in the CFC had tax
debt totaling about $36 million. In addition, more than 170 of
those charities also received Federal grants totaling $1.6
billion. In order to demonstrate OPM's lax screening process
for charities participating in the campaign, GAO also created a
fake charity and applied for entry into three different local
CFC campaigns for 2006. All three of GAO's applications were
accepted by OPM and admitted into local campaigns. The GAO
released its official report in July 2006. OPM is making
improvements to the way it screens charities through
regulations, the creation of a national list of participating
organizations and limited verification of the tax-exempt status
of all local and national participants.
Subcommittee on Trade
1. Bush Administration Trade Policy.
Actions taken: In December 2005, the Committee received
from the Government Accountability Office (GAO) a report
entitled ``International Trade: USTR Would Benefit from Greater
Use of Strategic Human Capital Management Principles'' (GAO-06-
167).
On February 15, 2006, the Committee held a hearing on
President Bush's trade agenda for 2006. The sole witness was
U.S. Trade Representative (USTR) Rob Portman. The hearing
examined current trade issues, including: (1) the prospect for
trade expansion in agriculture, industrial goods, and services
through multilateral negotiations in the World Trade
Organization (WTO); (2) the then recently concluded free trade
agreements (FTAs) with Oman and Peru; (3) other FTAs being
negotiated or have been notified by the President; (4)
management of bilateral trade disputes and concerns; (5)
ongoing negotiations with several countries seeking to accede
to the WTO including Vietnam and Russia; (6) compliance with
WTO dispute settlement decisions; and (7) other trade issues.
2. World Trade Organization.
Actions taken: On May 17, 2005, the Subcommittee held a
hearing to review future prospects for U.S. participation in
the WTO. The hearing focused on overall results of U.S.
membership in the WTO and General Agreement on Tariffs and
Trade (GATT); whether future participation of the United States
in the WTO and the multilateral trading system can be expected
to benefit Americans; and prospects for increased economic
opportunities for U.S. farmers, workers, and consumers in the
Doha Round.
On December 14-18, 2005, a bipartisan delegation of staff
from the Committee on Ways and Means and the Senate Committee
on Finance attended the WTO's Ministerial Conference in Hong
Kong, consulted with U.S. trade officials during the
negotiations, and discussed trade issues with foreign delegates
and WTO officials. Staff met with foreign delegations, U.S.
business representatives, and WTO Secretariat staff. An
important objective of the meetings was to highlight the
importance that Members of Congress place on trade and
especially on the need for trade liberalization in the
agricultural sector.
On March 2, 2005, Congressman Sanders introduced H.J. Res.
27, a resolution to withdraw Congressional approval of the
agreement establishing the WTO. Under the Uruguay Round
Agreements Act (P.L. 103-465), the resolution is privileged and
subject to specialized procedures. The resolution is not
amendable and must be considered on the floor within 45 days of
introduction. The resolution was referred to the Committee on
Ways and Means, which adversely reported the resolution on May
26, 2005, by voice vote. On June 9, 2005, the House considered
the resolution and failed to pass it, by a recorded vote of 86-
338 and 1 present. No further action was taken on the
resolution in the 109th Congress.
In May 2005, the Committee received from the GAO the report
entitled ``World Trade Organization: Global Trade Talks Back on
Track, but Considerable Work Needed to Fulfill Ambitious
Objectives'' (GAO-05-538). The GAO continues to monitor
negotiations for the Committee.
In August 2005, the Committee received from the
Congressional Budget Office the paper entitled ``Policies That
Distort World Agricultural Trade: Prevalence and Magnitude.''
In December 2005, the Committee received from the
Congressional Budget Office the paper entitled ``The Effects of
Liberalizing World Agricultural Trade: A Survey.''
Throughout the 109th Congress, USTR consulted frequently
with the Committee and the Congressional Oversight Group (COG)
about the negotiations and U.S. positions.
3. Completed Bilateral Free Trade Agreements (Central
America, Bahrain, Oman, Peru, Morocco, and Colombia)
Actions taken: On April 21, 2005, the Committee held a
hearing on implementation of the United States bilateral free
trade agreement with El Salvador, Guatemala, Honduras,
Nicaragua, Costa Rica, and the Dominican Republic. On June 15,
2005, the Committee informally approved with amendment draft
legislation to implement the Dominican Republic-Central
America-United States Free Trade Agreement (DR-CAFTA), by a
roll call vote of 25-16. The Committee conducted this informal
markup to provide advice to the Administration on the
implementing bill and Statement of Administrative Action. On
June 30, 2005, the Committee held a formal markup session to
consider H.R. 3045, the ``Dominican Republic-Central America-
United States Free Trade Agreement Implementation Act.'' The
Committee approved the bill and favorably reported H.R. 3045 by
a roll call vote of 25-16. Under Trade Promotion Authority
(TPA), amendments are not permitted. On July 28, 2005, the
House passed the bill by a recorded vote of 217-215. On June
30, 2005, before the House took action on H.R. 3045, the Senate
passed S. 1307 by a recorded vote of 54-45. On July 28, 2005,
the Senate passed H.R. 3045, without amendment, by a recorded
vote of 55-45. The President signed the bill into law on August
2, 2005 (P.L. 109-53).
In August 2004, the Committee received from the
International Trade Commission (ITC) the report entitled
``U.S.-Central America-Dominican Republic Free Trade Agreement:
Potential Economywide and Selected Sectoral Effects''
(Investigation No. TA-2104-13 (Publication 3717)).
On September 29, 2005, the Committee held a hearing on
implementation of the United States bilateral free trade
agreement with Bahrain. On November 3, 2005, the Committee
informally approved draft legislation to implement the United
States-Bahrain Free Trade Agreement, by a roll call vote of 23-
0, with 15 Members voting present, without amendment. The
Committee conducted this informal markup to provide advice to
the Administration on the implementing bill and Statement of
Administrative Action. On November 18, 2005, the Committee held
a formal mark-up session to consider H.R. 4340, the ``United
States-Bahrain Free Trade Agreement Implementation Act.'' The
Committee approved the bill and favorably reported H.R. 4340 by
voice vote. Under TPA, amendments are not permitted. On
December 7, 2005, the House passed the bill by a recorded vote
of 327-95. On December 13, 2005, the Senate passed H.R. 4340 by
unanimous consent. The President signed the bill into law on
January 11, 2006 (P.L. 109-169).
In October 2004, the Committee received from the ITC the
report entitled ``U.S.-Bahrain Free Trade Agreement: Potential
Economywide and Selected Sectoral Effects'' (Investigation No.
TA-2104-15 (Publication 3726)).
On April 5, 2006, the Committee held a hearing on
implementation of the United States bilateral free trade
agreement with Oman. On May 10, 2006, the Committee informally
approved draft legislation to implement the United States-Oman
Free Trade Agreement, by a roll call vote of 23-11, with 3
Members voting present, without amendment. The Committee
conducted this informal markup to provide advice to the
Administration on the implementing bill and Statement of
Administrative Action. On June 26, 2006, Majority Leader
Boehner introduced (by request) H.R. 5684, the ``United States-
Oman Free Trade Agreement Implementation Act,'' to be
considered under Trade Promotion Authority. On June 29, 2006,
the Committee held a formal mark-up session to consider H.R.
5684. The Committee favorably reported H.R. 5684 by a roll call
vote of 23-15. Under TPA, amendments are not permitted. On June
29, 2006, before the House took action on H.R. 5684, the Senate
passed S. 3569 by a recorded vote of 60-34. On July 20, 2006,
the House passed the bill by a recorded vote of 221-205. On
September 19, 2006, the Senate passed H.R. 5684 by a recorded
vote of 62-32. The President signed the bill into law on
September 26, 2006 (P.L. 109-283).
In February 2006, the Committee received from the ITC the
report entitled ``U.S.-Oman Free Trade Agreement: Potential
Economy-wide and Selected Sectoral Effects'' (Investigation No.
TA-2104-19 (Publication 3837)).
On July 12, 2006, the Committee held a hearing on
implementation of the United States bilateral free trade
agreement with Peru. On July 20, 2006, the Committee informally
approved draft legislation to implement the United States-Peru
Trade Promotion Agreement, by a roll call vote of 23-13,
without amendment. The Committee conducted this informal markup
to provide advice to the Administration on the implementing
bill and Statement of Administrative Action. No further action
was taken in the 109th Congress.
In June 2006, the Committee received from the ITC the
report entitled ``U.S.-Peru Trade Promotion Agreement:
Potential Economy-wide and Selected Sectoral Effects''
(Investigation No. TA-2104-20 (Publication 3855)).
In December 2006, the Committee received from the ITC the
report entitled ``U.S.-Colombia Trade Promotion Agreement:
Potential Economy-wide and Selected Sectoral Effects''
(Investigation No. TA-2104-23 (Publication 3896)).
In April 2005, the Committee received from the ITC the
report entitled ``U.S.-Morocco Free Trade Agreement: Effect of
Modifications to the U.S.-Morocco Free Trade Agreement''
(Investigation No. Morocco FTA 103-11 (Publication 3774, April
2005)).
4. Bilateral and Regional Free Trade Agreements Under
Negotiation.
Actions taken: Pursuant to Sense of Congress language in
the Africa Growth and Opportunities Act of 2000 (P.L. 106-200),
U.S. Trade Representative Zoellick notified Congress on
November 4, 2002, of the Administration's intent to enter into
free trade agreement negotiations with the Southern African
Customs Union (SACU) countries (South Africa, Lesotho,
Swaziland, Botswana, and Namibia). Negotiations between the
United States and the SACU countries were launched on June 2,
2003, in Pretoria, South Africa and were suspended in 2006 due
to lack of progress.
As noted above, on November 18, 2003, the U.S. Trade
Representative Zoellick formally notified Congress of the
Administration's intent to initiate negotiations for a free
trade agreement with Colombia, Ecuador, and Peru. Negotiations
began in May 2004 with Colombia, Ecuador, and Peru. Bolivia was
an observer to those negotiations. See discussion above
concerning the conclusion of FTA negotiations with Peru and
Colombia. The United States and Ecuador suspended negotiations
in May 2006.
On July 3-9, 2005, Chairman Thomas led a bipartisan
delegation of Committee Members to Colombia, Ecuador, and Peru.
The purpose of the delegation's trip was to focus on the
ongoing negotiations for a free trade agreement with the
countries and to discuss investment and security issues in the
region. The delegation in particular emphasized that current
unilateral trade preferences under the Andean Trade Promotion
and Drug Eradication Act (P.L. 107-210) (ATPDEA) are set to
expire in December 2006, and the only way that the Andean
countries can replicate their access to the U.S. market after
these benefits expire is through a comprehensive free trade
agreement providing reciprocal market access. In September
2005, the Committee filed its ``Report on Trade Mission to
Colombia, Ecuador, and Peru.''
On November 18, 2003, U.S. Trade Representative Zoellick
formally notified Congress, on behalf of President Bush, of the
Administration's intent to initiate free trade agreement
negotiations with Panama. Negotiations were launched on April
26, 2004.
On February 12, 2004, U.S. Trade Representative Zoellick
formally notified Congress of the Administration's intent to
negotiate an FTA with Thailand. Negotiations began in June
2004, and the sixth round was held in January 2006. However,
FTA talks were suspended after a political crisis enveloped
Thailand in April 2006. In September 2006, a military coup
ousted the sitting government. The United States has stated
that the FTA talks will not resume until Thailand has a
democratically elected government with authority to resume the
negotiations.
The United States signed a Trade and Investment Framework
Agreement (TIFA) with the United Arab Emirates (UAE) on March
15, 2004. On November 15, 2004, U.S. Trade Representative
Zoellick formally notified Congress of the Administration's
intention to initiate free trade agreement negotiations with
the UAE. A free trade agreement with the UAE is part of the
goal announced by the President to form a Middle East Free
Trade Area by 2013. The first round of negotiations was held on
March 8, 2005. There have been four full fledged negotiating
rounds and three formal rounds on investment, with the last
round in August 2006.
On February 2, 2006, U.S. Trade Representative Portman
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with the
Republic of Korea. Negotiations began in June 2006 and are
targeted to conclude by the end of 2006.
On March 8, 2006, U.S. Trade Representative Portman
formally notified Congress of the Administration's intent to
initiate negotiations for a free trade agreement with Malaysia.
Negotiations were launched in June 2006.
On each of these negotiations, USTR consulted frequently
with the Committee and with the Congressional Oversight Group
(COG) throughout the 109th Congress about the negotiations and
U.S. positions.
5. Bilateral Free Trade Agreements Entered Into Force.
Actions taken: Negotiations for the U.S.-Dominican
Republican-Central America Free Trade Agreement were completed
in May 2004. As noted above, the President signed the
implementing legislation into law on August 2, 2005 (P.L. 109-
53).
On July 18, 2005, Chairman Thomas responded to Congressmen
Gingrey and Inglis's letter related to textile issues in DR-
CAFTA. As a result of the commitments on changing the rule of
origin on pocketing, the Committee prepared technical
amendments to DR-CAFTA. On July 28, 2006, the House passed H.R.
4, the Pension Protection Act of 2006, which included a
provision to extend narrow proclamation authority to the
President to implement changes to certain apparel rules of
origin with respect to countries that have entered into letters
of understanding concerning pocketing material with the United
States and, subject to certain Congressional notification and
layover limitations, with respect to countries that will do so
in the future. H.R. 4 passed by a recorded vote of 279-131. On
August 3, 2006, the Senate passed H.R. 4, without amendment, by
a recorded vote of 93-5. The President signed the bill into law
on August 17, 2006 (P.L. 109-280).
Negotiations for the U.S.-Bahrain Free Trade Agreement were
completed in May 2004. As noted above, the President signed the
implementing legislation into law on January 11, 2006 (P.L.
109-169). The agreement entered into force on August 1, 2006.
6. Miscellaneous Duty Spensions and Technical Corrections
to U.S. Trade Laws.
Actions taken: On March 11, 2005, Subcommittee on Trade
Chairman Shaw requested that Members introduce bills for
inclusion in a miscellaneous trade bill package. On July 25,
2005 and August 5, 2005, Chairman Shaw requested written
comments from parties interested in these miscellaneous trade
proposals, technical corrections to the trade laws, and
temporary suspensions on certain imports. On March 14, 2006,
Chairman Shaw introduced H.R. 4944, the Miscellaneous Trade and
Technical Corrections Act of 2006, which was referred to the
Committee on Ways and Means. The bill included 570 duty
suspensions on various products, several reliquidations of
prior import entries due to government error, and miscellaneous
trade provisions and technical corrections. The duty suspension
provisions related mostly to products (largely chemicals) for
which there are no U.S. domestic manufacturers. On March 15,
2006, the House passed H.R. 4944 under suspension of the rules,
by a recorded vote of 412-2. H.R. 4944 was subsequently
referred to the Senate Committee on Finance.
Approximately half of the provisions from H.R. 4944 (all
provisions that had companion legislation already introduced in
the Senate) were included in H.R. 4, the Pension Protection Act
of 2006. On July 28, 2006, the House passed H.R. 4 by a
recorded vote of 279-131. On August 3, 2006, the Senate passed
H.R. 4, without amendment, by a recorded vote of 93-5. The
President signed the bill into law on August 17, 2006 (P.L.
109-280).
The remaining provisions of H.R. 4944 were subsequently
included in H.R. 6406 along with 232 Senate-only duty
suspensions on various products. H.R. 6406 passed the House on
December 8, 2006, by a recorded vote of 212-184. Under the rule
accompanying H.R. 6111, ``A bill to amend the Internal Revenue
Code of 1986 to provide that the Tax Court may review claims
for equitable innocent spouse relief and to suspend the running
on the period of limitations while such claims are pending,''
H.R. 6406 was merged into H.R. 6111, which then passed the
Senate on December 9, 2006, by a recorded vote of 79-9.
7. U.S. Trade Remedy Laws.
Actions taken: The Continued Dumping and Subsidy Offset Act
(CDSOA) was enacted into law in October 2000 (P.L. 106-387) and
requires the annual disbursement of antidumping and
countervailing duties to qualified petitioners and interested
parties in the underlying trade remedy proceedings. On January
16, 2003, the WTO's Appellate Body issued a final adverse
ruling against the CDSOA, finding that it is inconsistent with
U.S. obligations to the WTO. On November 28, 2004, the WTO
authorized approximately $134 million in retaliation against
the United States for FY2003 CDSOA disbursements. Under the
methodology set by the WTO to determine the appropriate amount
of retaliation, the level may change annually and is set at 72
percent of CDSOA disbursements for the previous year. Canada,
Mexico, the European Union, and Japan imposed retaliatory
tariffs against a variety of U.S. exports.
On April 30, 2004, Subcommittee on Trade Chairman Crane,
along with Congressmen Ramstad, Boehner, and Biggert, requested
the GAO to carry out a comprehensive review of the CDSOA and
its impact on recipient industries, including an analysis of
how CDSOA funds have been used by recipient companies. In
January 2005, Trade Subcommittee Clay Shaw renewed the request
for the CDSOA review.
On March 3, 2005, Congressman Ramstad and Chairman Shaw
introduced H.R. 1121 to repeal the CDSOA. On July 25, 2005,
Chairman Shaw requested written comments from parties
interested in miscellaneous trade proposals, including H.R.
1121. Over 150 comments were received on H.R. 1121, and
comments were nearly equally divided with a slight majority
supporting CDSOA repeal.
On September 26, 2005, the Committee received from the GAO
the report entitled ``International Trade: Issues and Effects
of Implementing the Continued Dumping and Subsidy Offset Act''
(GAO-05-979). The GAO found that since the inception of CDSOA
(FY2001), five companies (three of which are related) received
46% of the over $1 billion in payments. GAO also reported that
two-thirds of all payments went to three industries: bearings,
candles, and steel. The GAO concluded that the CDSOA does not
provide a ``trade remedy'' in the traditional sense because it
is not available to all companies; many domestic producers
impacted by dumped or subsidized imports are ineligible to
receive funds because they did not formally and publicly
support the petition that resulted in the duties. The GAO
report made several recommendations to CBP to improve the
implementation of the CDSOA, such as systematic verification of
CDSOA claims, providing additional guidance for preparing CDSOA
claims, and standardized exchanges of electronic updates
between CBP and the International Trade Commission on eligible
claimants. The Committee and GAO conducted several follow up
meetings with CBP to ensure that CBP implements the GAO
recommendations in its report.
On October 26, 2005, the Ways and Means Committee approved
``Entitlement Reconciliation Recommendations for Fiscal Year
2006,'' as amended, by a vote of 22-17. The recommendations
included a provision to repeal the CDSOA effective upon
enactment. On November 18, 2005, the House approved H.R. 4241,
the ``Deficit Reduction Act of 2005,'' by a 217-215 vote. The
House-passed bill included immediate CDSOA repeal. On November
3, 2005, the Senate passed S. 1932, the ``Deficit Reduction
Omnibus Reconciliation Act of 2005,'' by a vote of 52-47. The
Senate-passed bill did not include CDSOA repeal. On December
15, 2005, the Senate passed a nonbinding motion offered by
Senator DeWine instructing Senate conferees to insist that any
conference report not include CDSOA repeal, by a vote of 71-20.
The conference report for the Deficit Reduction Act of 2005 was
filed on December 19, 2005 and contained a provision to repeal
the CDSOA immediately upon enactment but allowing the continued
disbursements of duties on goods entered before October 1,
2007. On December 19, 2005, the House approved the conference
report by a vote of 212-206. On December 21, 2005, the Senate
approved the conference report with an amendment to provisions
unrelated to CDSOA repeal, by a vote of 51-50. On February 1,
2006, the House approved the bill as amended by the Senate by a
vote of 216-214. President Bush signed the bill into law on
February 8, 2006 (P.L. 109-171).
On November 17, 2005, the Senate passed by voice vote
amendment SA 2655 proposed by Senator Craig to the tax
reconciliation bill (S. 2020). The amendment contained a
nonbinding resolution severely limiting outcomes on antidumping
and countervailing negotiations in the World Trade
Organization. On November 18, 2005, the Senate approved S. 2020
as amended by a vote of 64-33. On November 18, 2005,
Congressman English introduced H. Res. 577, the text of which
was identical to the Senate-passed amendment. No further action
was taken on H. Con. Res. 577. On December 8, 2005, the House
approved H.R. 4297, the Tax Relief Extension Reconciliation Act
of 2005, by a vote of 234-197. The House-passed tax
reconciliation bill did not contain a provision related to
antidumping and countervailing duty negotiations in the World
Trade Organization. The conference report did not retain the
Senate amendment.
FY2006 CDSOA disbursements of nearly $380 million were
issued to recipients on November 27, 2006.
8. Authorizations for the Department of Homeland Security,
the Office of the United States Trade Representative and the
U.S. International Trade Commission.
Actions taken: The Committee on Ways and Means, working
with the Homeland Security Committee, included several trade
and customs revenue provisions and established a one-year
authorization for U.S. Customs and Border Protection (CBP) as
part of H.R. 1817, the ``Department of Homeland Security
Authorization Act for Fiscal Year 2006,'' to provide CBP with
guidance as it plans its budgets and to provide Committee
guidance in the appropriations process. The bill was reported
out of the Homeland Security Committee on May 3, 2005, and the
Committee on Ways and Means received a joint, sequential
referral for a period not ending later than May 13, 2005.
Through an exchange of letters on May 12, 2005, the two
committees agreed to include in the Manager's Amendment various
changes requested by the Committee on Ways and Means concerning
trade and customs matters. In addition, the Committees agreed
to include customs provisions that were previously passed out
of the House of Representatives in the 108th Congress as part
of HR 4418, the ``Customs and Border Security Act of 2004,''
particularly sections 102 (providing for the establishment of a
cost accounting system), 104 (requiring a report on the One
Face at the Border Initiative), 124 (authorizing Customs to
provide certain services to Charter aircraft carriers), and 125
(stating the sense of the Congress regarding textile
enforcement provisions in certain trade preference programs).
H.R. 1817 was passed in the House by recorded vote 424-4 on May
18, 2005.
On November 14, 2005, Congressman Peter King introduced
H.R. 4312, the ``Border Security and Terrorism Prevention Act
of 2005,'' which contained several provisions dealing with
border security issues that impact the flow of trade and
imports and customs revenue, matters under the jurisdiction of
the Committee on Ways and Means. The Committee on Ways and
Means and the Homeland Security reached agreement to certain
modifications to H.R. 4312 to preserve the jurisdiction of the
Committee on Ways and Means and to protect trade and customs
revenue interests. This agreement was memorialized in an
exchange of letters on December 6, 2005. The trade-related
provisions agreed to between these Committees for inclusion in
H.R. 4312 were later incorporated in H.R. 4437, the ``Border
Protection, Antiterrorism and Illegal Immigration Control Act
of 2005,'' which had been introduced by Congressman F. James
Sensenbrenner on December 6, 2005 and reported out of the
Committee on the Judiciary on December 13, 2005. The bill was
referred jointly and sequentially to the Committee on Ways and
Means on December 13, 2005 for a period not ending later than
December 14, 2005. The Committee on Ways and Means discharged
the bill on December 14, 2005. H.R. 4437 was passed in the
House by recorded vote 239-182 on December 16, 2005.
On March 14, 2006, Congressman Dan Lungren introduced H.R.
4954, the Security and Accountability For Every (SAFE) Port
Act. On May 3, 2006, Chairman Thomas and Committee on Homeland
Security Chairman Peter King exchanged letters acknowledging
the jurisdiction of the Committee on Ways and Means and its
agreement to forgo consideration of the bill. On May 4, 2006,
the legislation passed the House by a recorded vote of 421-2.
On September 14, 2006, the bill passed the Senate with an
amendment by a vote of 98-0. On September 30, 2006, the
conference report to H.R. 4954 passed the House by a recorded
vote of 409-2. On September 30, 2006, the Senate agreed to the
conference report by unanimous consent. It was signed into law
by the President on October 13, 2006 (P.L. 109-347).
On July 25, 2006, the Subcommittee held a hearing to review
budget authorizations for FY2007 and FY2008 for U.S. Customs
and Border Protection (CBP) and U.S. Immigration and Customs
Enforcement (ICE). In addition, the hearing addressed other
Customs issues, including: the creation of CBP and ICE and the
integration of the former U.S. Customs Service into the U.S.
Department of Homeland Security, the Customs Trade Partnership
Against Terrorism (C-TPAT) program, Customs automation and
modernization efforts and the mechanisms needed to fund them,
and general Customs oversight issues.
On June 2005, the Committee received from the GAO a report
entitled ``International Trade: Further Improvements Needed to
Handle Growing Workload for Monitoring and Enforcing Trade
Agreements'' (GAO-06-537).
9. User Fees.
Actions taken: The Committee continued to examine the issue
of setting the appropriate level for user fees and how the fees
are used. To enable the Committee to continue to conduct proper
oversight of the use of user fee funds, the Committee has
commissioned studies by the Department of Homeland Security.
10. Trade Adjustment Assistnace (TAA).
Actions taken: The Committee has continued its oversight of
the general TAA programs for workers and firms in light of the
substantial revisions made by the Trade Act of 2002 through
discussions with the Administration and interested parties.
At the June 15, 2005 informal mark-up of DR-CAFTA, Chairman
Thomas included a provision that would have required the
President to prepare a report that would examine after one year
whether the agreement has had a net negative effect on the
services industry. The provision would have required the
President to make recommendations as to how the TAA program
should be amended if the DR-CAFTA led to negative effects on
the services industry. This suggested provision was not
included in the non-amendable legislation that the President
sent to Congress for its consideration.
11. Trade Relations With China.
Actions taken: On April 14, 2005, the Committee held a
hearing on United States-China economic relations and China's
role in the world economy. The hearing focused on (1)
implementation of China's WTO accession commitments; (2) trade
relations between the United States and China; (3) China's
currency management; and (4) the relationship between trade
with China and the U.S. economy.
On July 14, 2005, Congressman Phil English introduced H.R.
3283, the ``Trade Rights Enforcement Act.'' The bill would have
authorized funding for enforcement offices within USTR, require
reports on China's currency exchange reforms, authorized the
application of U.S. countervailing duty law to exports from
nonmarket economies such as China, and established a system of
comprehensive monitoring of Chinese compliance with its trade
obligations. The bill was referred to the Committee and placed
on the House Suspension Calendar on July 26, 2005. The bill
failed to pass with the requisite two-thirds majority, by a
recorded vote of 240-186. The bill subsequently passed the
House under a rule on July 27, 2005, by a recorded vote of 255-
168.
Throughout 2005 and 2006, the Committee exercised oversight
over the Administration's handling of trade relations with
China and requested ongoing briefings by USTR officials. In
particular, the Committee has been briefed on impending and
ongoing WTO challenges against China.
On January 25, 2005, the Ranking Members of the Committee
received from the GAO the requested report entitled ``U.S.-
China Trade: Summary of 2003 World Trade Organization
Transitional Review Mechanism for China'' (GAO-05-209R U.S.-
China Trade).
In April 2005, the Committee received from the GAO a report
entitled ``U.S.-China Trade: Textile Safeguard Procedures
Should Be Improved'' (GAO-05-296).
In April 2005, the Committee received from the GAO a report
entitled ``International Trade: Treasury Assessments Have Not
Found Currency Manipulation, but Concerns about Exchange Rates
Continue'' (GAO-05-351).
On April 14, 2005, the Committee received from the GAO a
report entitled ``U.S.-China Trade: Opportunities to Improve
U.S. Government Efforts to Ensure Open and Fair Markets'' (GAO-
05-544T).
In June 2005, the Committee received from the GAO a report
entitled ``U.S.-China Trade: Commerce Faces Practical and Legal
Challenges in Applying Countervailing Duties'' (GAO-05-474).
On September 2005, the Committee received from the GAO a
report entitled ``U.S.-China Trade: The United States Has Not
Restricted Imports under the China Safeguard'' (GAO-06-1056).
On December 9, 2005, the Committee received from the GAO
the report entitled ``China Trade: U.S. Exports, Investment,
Affiliate Sales Rising, but Export Share Falling'' (GAO-06-
162).
In January 2006, the Committee received from the GAO a
report entitled ``U.S.-China Trade: Eliminating Nonmarket
Economy Methodology Would Lower Antidumping Duties for Some
Chinese Companies'' (GAO-06-231).
In July 2006, the Committee received from the ITC the
report entitled ``Conditions of Competition for Certain Oranges
and Lemons in the U.S. Fresh Market'' (Investigation No. 332-
469 (Publication 3863, July 2006)). The report covered market
information worldwide, but in particular, ITC collected and
developed information about these products from China for the
first time.
On September 21, 2006, Chairman Bill Thomas requested a
three-part study pursuant to section 332 of the Trade Act of
1930 on China trade and investment, to be submitted in parts
through the middle of 2008.
12. Normal Trade Relations With Jackson-Vanik Countries.
Actions taken: Ukraine's trade status was subject to the
``Jackson-Vanik'' provisions in Title IV of the Trade Act of
1974. This provision of law governs the extension of normal
trade relations (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. The President first
declared Ukraine to be in full compliance with the Jackson-
Vanik requirements in 1997, and such Presidential certification
has been annually renewed.
Ukraine is in the process of acceding to the World Trade
Organization. So as to allow the United States and Ukraine to
enjoy a full-fledged trade relationship once Ukraine joins the
WTO, Congress passed legislation to end the annual Jackson-
Vanik review and grant permanent NTR (PNTR). On November 18,
2005, the Senate passed S. 632 to grant PNTR to Ukraine by
unanimous consent. On March 6, 2006, Chairman Thomas and U.S.
Trade Representative Rob Portman exchanged letters confirming
that the Administration will ensure that Ukraine will comply
fully with all of the commitments that it will assume as a WTO
member before the United States will join the consensus
necessary for Ukraine to join the body. On March 8, 2006, the
House approved H.R. 1053 to grant PNTR to Ukraine, by a vote of
417-2, with three voting present. On March 9, 2006, the Senate
approved H.R. 1053 by unanimous consent. The bill was signed by
the President and became law on March 23, 2006 (P.L. 109-205).
Russia's trade status is also subject to the ``Jackson-
Vanik'' provisions. The President first declared Russia to be
in full compliance with the Jackson-Vanik requirements in 1994,
and such Presidential certification has been annually renewed.
Russia is in the process of acceding to the World Trade
Organization. If the United States and Russia are to enjoy a
full-fledged trade relationship once Russia joins the WTO,
Congress must pass legislation to end the annual Jackson-Vanik
review and grant permanent NTR (PNTR). No bills were introduced
in the 109th Congress to grant PNTR to Russia. On May 11, 2006,
Chairman Thomas, Ranking Member Rangel, Senate Finance
Committee Chairman Grassley, and Ranking Member Baucus sent a
letter to President Bush expressing concern that Russia has not
demonstrated its willingness, ability, and commitment to abide
by WTO rules, particularly on enforcement of intellectual
property rights and the application of sanitary and
phytosanitary measures. The letter stated that until Russia
addresses these critical issues in a meaningful way, the
signatories would not support granting PNTR to Russia. The
United States and Russia made significant progress in
addressing the concerns raised in the letter, and on November
10, 2006, both countries announced a bilateral agreement in
principle for Russia's accession to the WTO. The bilateral
agreement was signed on November 19, 2006.
On July 28, 2005, Congressman Issa introduced H. Con. Res.
230 to address concerns about rampant piracy and a lack of
effective intellectual property rights (IPR) protections in
Russia. H. Con. Res. 230 expressed the sense of Congress that
(1) the Russian Federation should provide effective protection
of IPR or it risks losing its eligibility to participate in the
Generalized System of Preferences (GSP) program, and (2) as
part of its effort to accede to the World Trade Organization,
the Russian Federation must ensure that intellectual property
is securely protected in law and in practice. On November 16,
2005, the House approved H. Con. Res. 230, by a vote of 421-2.
On December 22, 2005, the Senate approved H. Con. Res. 230 by
unanimous consent.
Vietnam's trade status is also subject to the ``Jackson-
Vanik'' provisions. Vietnam has received Presidential waivers
of Jackson-Vanik provisions since 1998, most recently on June
5, 2006. Congress has not voted on a Jackson-Vanik disapproval
resolution since 2002 because no Member has introduced one in
time.
Vietnam is in the process of acceding to the World Trade
Organization. If the United States and Vietnam are to enjoy a
full-fledged trade relationship once Vietnam joins the WTO, the
annual Jackson-Vanik review must be ended and replaced with
permanent NTR (PNTR). Legislation to grant PNTR to Vietnam was
introduced in the House (H.R. 5602) and Senate (S. 3495) on
June 13, 2006. The bill was referred to the Committee and
placed on the House Suspension Calendar on November 13, 2006,
with an amendment to establish a mechanism for the
Administration to determine whether Vietnam grants any
prohibited subsidies to its textile and apparel industry after
its accession to the World Trade Organization (WTO). The bill
failed to pass with the requisite two-thirds majority with a
vote of 228-161. The provision (with the amendment) was
subsequently included in H.R. 6406, which passed the House on
December 8, 2006, by a recorded vote of 212-184 and, as
described above, was subsequently merged into H.R. 6111, which
passed the Senate on December 9, 2006, by a recorded vote of
79-9.
13. Trade Preference Legislation.
Actions taken: The Subcommittee continued its oversight
over the Trade and Development Act of 2000 (P.L. 106-606)
(Africa/Caribbean Basin Initiative), the enhancement to these
programs contained in the Trade Act of 2002, the Andean Trade
Preferences Act, and the AGOA Acceleration Act to ensure that
the legislation is being implemented in a manner consistent
with Congressional intent. The Subcommittee also examined
whether preference programs should be extended to other
countries and continued its efforts, begun in the 108th
Congress, to extend preferential benefits to Haiti.
On September 21, 2006, Chairman Thomas introduced H.R.
6142, the Trade Preferences Act. The bill would (1) extend the
Generalized System of Preferences for two years subject to new
limitation on waivers of competitive need limits, (2) extend
and enhance apparel and textile benefits under the African
Growth and Opportunity Act including a two-year extension of
benefits for apparel using third country fabric and a
subsequent value-added rule of origin, and (3) create a new
preference program for Haiti. No further action was taken on
the bill in the 109th Congress, but an altered version of this
legislation was subsequently included in H.R. 6406.
Chairman Thomas introduced H.R. 6406 on December 7, 2006,
which included several trade preference provisions to: (1)
extend the GSP program for two years subject to a discretionary
limitation on waivers of competitive need limits for products
that constitute 150 percent of the competitive need limit or 75
percent of U.S. imports of that product; (2) extend the third
country fabric benefit under AGOA until 2012, with a full 3.5
percent cap, and allowance of duty free treatment for lesser
developed countries for certain textiles of wholly made African
fabric; (3) extend the trade preferences for Andean countries
(Peru, Colombia, Ecuador, and Bolivia) for six-months, followed
by an additional six month extension for each country only if
the United States and that country each complete their
legislative process to approve a trade promotion agreement; and
(4) create additional trade preferences for certain apparel and
automotive wire harnesses produced in Haiti. H.R. 6406 passed
the House under a rule on December 8, 2006, by a recorded vote
of 212-184 and, as described above, was subsequently merged
into H.R. 6111, which passed the Senate on December 9, 2006, by
a recorded vote of 79-9.
Regarding African trade preferences, the Committee
requested ongoing briefings by Administration officials on the
operation of the AGOA. On June 6, 2006, the Committee hosted a
meeting of over 60 African trade officials to discuss issues of
importance to the operation of AGOA and the status of WTO
negotiations.
14. Textiles and Apparel.
Actions taken: The Subcommittee continued its oversight as
to: the value of trade preference programs and their effect on
U.S. industries; impact of the elimination of textile quotas in
January 2005 on U.S. industries, countries receiving trade
preferences, and other countries; effectiveness of efforts to
halt illegal transshipment; and the use of textile safeguards
(particularly with respect to transparency and application of
statutory standards).
On October 24, 2006, Chairman Thomas requested the ITC to
conduct a study under section 332 of the Tariff Act of 1930 on
certain outerwear and luggage.
15. Sanctions Reform.
Actions taken: On September 27, 2006, Congresswoman Ileana
Ros-Lehtinen introduced H.R. 6198, the Iran Freedom Support
Act, which included provisions that would extend and modify
import sanctions. On September 27, 2006, Chairman Thomas and
Chairman Hyde exchanged letters acknowledging the jurisdiction
of the Committee on Ways and Means and its agreement to forgo
consideration of the bill because several amendments supported
by the Committee would be included in the bill. On September
28, 2006, the legislation passed the House under suspension of
the rules. On September 30, 2006, the bill passed the Senate
without amendment by unanimous consent. It was signed into law
by the President on September 30, 2006 (P.L. 109-293).
See Burma below.
16. Burma.
Actions taken: On July 28, 2003, the President signed into
law the ``Burmese Freedom and Democracy Act of 2003'' (P.L.
108-61) to sanction the ruling Burmese military junta,
strengthen Burma's democratic forces, and support and recognize
the National League of Democracy as the legitimate
representative of the Burmese people. Among other things, the
legislation prohibits the importation into the United States of
any article that is a product of Burma (Myanmar) until the
President determines and certifies to Congress that Burma has
met certain conditions, including that: (1) the State Peace and
Development Council (SPDC) has made substantial and measurable
progress to end violations of internationally recognized human
rights; (2) the SPDC has made measurable and substantial
progress toward implementing a democratic government; and (3)
Burma has not been designated as a country that has failed
demonstrably to make substantial efforts to adhere to its
obligations under international counter-narcotics agreements
and to take other effective counter narcotics measures. The law
authorizes the President to waive such requirements if it is in
the U.S. national interest. The import restrictions would
expire one year after enactment unless renewed by Congress with
a joint resolution meeting certain requirements, and the
authority to renew these sanctions annually was initially set
to expire in 2006. Congress has annually renewed the import
restrictions.
On May 26, 2005, Congressman Lantos introduced H. J. Res.
52 to extend the import sanctions for 1 year. On June 21, 2005,
H. J. Res. 52 was approved by the House under a suspension of
the rules by a recorded vote of 423-2. On July 19, 2005, the
bill passed the Senate without amendment by a recorded vote of
97-1. The President signed H. J. Res. 52 into law on July 27,
2005 (P.L. 109-39).
The most recent renewal was contained in H. J. Res. 86,
introduced by Congressman Lantos on May 19, 2006. H. J. Res. 86
extends the import ban for another year and gives Congress the
option to annually extend the import ban for 2 additional years
if Burma does not make progress in its human rights record and
if Congress determines that continued import sanctions are the
most appropriate policy to induce change by the Government of
Burma. On July 11, 2006, H. J. Res. 86 was approved by the
House under a suspension of the rules by a voice vote. On July
26, 2006, the bill passed the Senate without amendment by a
voice vote. The President signed H. J. Res. 86 into law on
August 1, 2006 (P.L. 109-251).
17. Rules of Origin and Country of Origin Marking.
Actions taken: The Subcommittee continued to review and
consult with the Administration and the trade community on the
status of 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; and review
the implementation labeling requirements by United States and
its trading partners with respect to meat, fresh produce, and
genetically modified products.
The Committee reviewed proposed changes to the Harmonized
Tariff Schedule (HTS), which is modified periodically and then
submitted to the WTO. The proposed changes were submitted to
the Committee on May 19, 2006, commencing a sixty-day
(legislative) layover period.
On December 7, 2006, Chairman Thomas introduced H.R. 6406,
which included a provision to extend the current 15-day period
to 30 days for changes to the Harmonized Tariff Schedule to be
finalized after publication in a Presidential proclamation to
afford the private sector sufficient time to incorporate all of
the changes in their computer systems and avoid costly, time-
consuming errors to entries. H.R. 6406 passed the House under a
rule on December 8, 2006, by a recorded vote of 212-184. Under
the rule accompanying H.R. 6111, H.R. 6406 was merged into H.R.
6111, which then passed the Senate on December 9, 2006, by a
recorded vote of 79-9. The bill was signed in to law on
December 20, 2006.\11\
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As noted above, H.R. 6142 and H.R. 6406 both included a
provision to grant additional trade preferences for certain
apparel and automotive wire harnesses produced in Haiti meeting
a new rule of origin.
18. Trade Relations With Japan.
Actions taken: On July 14, 2005, Congressman Phil English
introduced H.R. 3283, the Trade Rights Enforcement Act, which
is described above under legislation related to China. Among
other things, the bill urged the President to address Japan's
currency interventions and various trade barriers through
additional funding to USTR enforcement offices. The bill passed
the House on July 27, 2005, by a recorded vote of 255-168.
On September 28, 2005, the Committee held a hearing on
United States-Japan economic and trade relations. The hearing
focused on (1) Japan's economic problems, their causes, and
impact on the United States and world economy; (2) Japan's
barriers to agriculture imports such as the ban on U.S. beef,
discriminatory government actions against U.S. products, and
general non-tariff barriers; (3) Japan's role in the current
WTO negotiations; and (4) the recent economic and regulatory
reform attempts in Japan, including legislation to privatize
major components of Kampo, the Japanese postal entity.
Subsequently, in December 2005, Japanese authorities lifted the
ban on beef imports from the United States for cattle under 20
months but then suspended imports in January 2006.
On March 5, 2005, and again on May 23, 2005, Chairman
Thomas wrote to Japanese Ambassador Kato urging an immediate
resumption of trade in U.S. beef. The Committee continued to
oversee this issue through the discussions between the
Administration and the Government of Japan.
On March 7, 2006, in response to interest by Committee
Members on Japan's regulation of competition affecting U.S.
sales and trade of medical devices and equipment in Japan,
Chairman Thomas requested an ITC 332 investigation.
19. Asia Pacific Economic Cooperation Forum.
Actions taken: During the 109th Congress, the United States
concluded a free trade agreement (FTA) with APEC member Peru,
and began or continued FTA negotiations with APEC members
Korea, Malaysia, and Thailand (see other sections of this
report for more information). In addition, during the 109th
Congress, the United States concluded separate bilateral
agreements with Russia and Vietnam, also APEC members, for each
country's accession to the WTO. The Administration and the
Committee have consulted regularly on the status of all these
separate negotiations and on U.S. negotiating positions. The
Committee continued to monitor the status of ongoing talks as
well as other U.S. trade policy objectives in Asia that relate
to APEC members.
Subcommittee on Health
1. Medicare Payment for Hospital Services.
Actions taken: On July 16, 2006, the Subcommittee held a
hearing to receive testimony on initiatives to develop greater
price transparency in the health care sector and the impact and
benefits of price transparency, including the potential for
increased competition, lower costs, and lower spending growth.
The Subcommittee received testimony from hospital and insurance
industry representatives, and members of the academic
community. On December 2, 2005, the Subcommittee held a field
hearing on competition and health care price variations in the
FEHB program, and received testimony from the Government
Accountability Office (GAO), the hospital industry, and
business and community leaders. The information will be useful
in analyzing and developing future price transparency
initiatives. On October 7, 2005, the Subcommittee held a
hearing on gainsharing to explore implementation of system
changes which include the creation of opportunities for skilled
medical service professionals to work together to improve both
health care quality and efficiency. Information gathered at the
hearing was used to develop a gainsharing demonstration set
forth in S. 1932, the Deficit Reduction Act (P.L. 109-171). On
March 8, 2005, the Subcommittee held a hearing on physician-
owned specialty hospitals, and received testimony from the
Medicare Payment Advisory Commission (MedPAC), CMS, and
industry representatives, which information was critical in
developing the strategic and implementing plan set forth in S.
1932, the Deficit Reduction Act (P.L. 109-171).
2. Medicare Waste Fraud and Abuse.
Actions taken: The Subcommittee examined the results of the
recovery audit contractor demonstration that was authorized by
the Medicare Modernization Act of 2003, and reviewed the
results of the demonstration as set forth in a public report
issued by the Centers for Medicare and Medicaid Services on
November 16, 2006, which identified hundreds of millions of
dollars in Medicare overpayments. On the basis of results
indicating substantial future savings to Medicare, the
Committee expanded the scope and operation of the recovery
audit contractor program in the H.R. 6111, the Tax Relief and
Health Care Act of 2006.\12\
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3. Health Savings Accounts.
Actions taken: On June 28, 2006, the full Committee held a
hearing on health savings accounts, and received testimony from
Treasury representatives and from business and industry
representatives regarding the operation of the accounts to date
and the need for any changes and improvements. This hearing
resulted in information that assisted in the full Committee
markup on September 27, 2006 of H.R. 6134, the Health
Opportunity Patient Empowerment Act of 2006, which contained
provisions ultimately enacted into law in the H.R. 6111, the
Tax Relief and Health Care Act of 2006.\13\
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4. Medicare Program Oversight.
Actions taken: On May 3, 2006, the Subcommittee held a
hearing to receive testimony from the Centers for Medicare and
Medicaid Services and health care professionals concerning
implementation of the Medicare drug benefit. On May 4, 2006, at
the request of the minority, the Subcommittee held a
continuation of the hearing, and received testimony from the
Honorable Henry Waxman and health care professionals who were
concerned about the structure and design of the Medicare drug
benefit. On June 14, 2006, the full Committee held a hearing to
receive testimony concerning lessons learned during the
implementation of the prescription drug program, the latest
beneficiary enrollment figures, and the effect of the initial
May 15th enrollment deadline.
5. Medicare Payments for Post-Acute Care.
Actions taken: On June 16, 2005, the Subcommittee held a
hearing to receive testimony from the Centers for Medicare and
Medicaid Services, the Medicare Payment Advisory Commission,
U.S. Government Accountability Office, and health care
professionals concerning post-acute care. The hearing focused
on current financing for post-acute care services in Medicare;
the services available across the various post-acute settings;
the patient assessment instruments used in each settings and
the commonalities between them; and prospects and suggestions
for moving ahead with a common patient assessment tool and more
rational payment system based on beneficiary need rather than
institutional setting. This hearing provided information that
was critical to the creation of the Post-Acute Care
Demonstration Program in S. 1932, the Deficit Reduction Act
(P.L. 109-171).
6. Othere Medicare Payment.
Actions taken: On April 19, 2005, the Subcommittee held a
hearing to receive testimony from the Congressional Budget
Office and health care professionals concerning long term care.
The hearing focused on current financing for long term care
services; the range of services available in the continuum of
care from home- and community-based services to nursing home
care; private long term care insurance options, including the
Long Term Care Partnership programs; and the challenges ahead
in financing needed services for an aging population.
On March 15, 2006, the Subcommittee held a hearing to
receive testimony from the Centers for Medicare and Medicaid
Services, the Medicare Payment Advisory Commission, and health
care professionals concerning Medicare payment and coverage
policies for long-term acute care hospitals.
On December 6, 2006, the full Committee on Ways and Means
held a hearing on Patient Safety and Quality Issues in End
Stage Renal Disease (ESRD) Treatment. This hearing identified
potential safety concerns regarding the utilization of drugs
used in ESRD settings. However, there is also a concern
regarding appropriate reimbursement for ESRD facilities. The
Tax Relief and Health Care Act of 2006 (H.R. 6111) provides a
1.5 percent update to the composite rate for ESRD facilities in
2007.
7. Medicare Payments for Physician Services.
Actions taken: On February 10, 2005, the Subcommittee held
a hearing to receive testimony from the U.S. Government
Accountability Office, the Medicare Payment Advisory
Commission, and health care professionals concerning Medicare
payments to physicians. On March 15, 2005, the Subcommittee
held a hearing to receive testimony from the Centers for
Medicare and Medicaid Services and health care professionals
concerning measuring physician quality and efficiency of care
for Medicare. The hearing focused on identifying the steps
being taken by CMS and others to measure quality and efficiency
of physician care. On July 21, 2005, the Subcommittee held a
hearing to receive testimony from the U.S. Department of Health
and Human Services and health care professionals concerning
value-based purchasing for physicians under Medicare. The
hearing focused on developments since the last Subcommittee
hearing in March on physician payments and value-based
purchasing. On September 29, 2005, the Subcommittee held a
legislative hearing to receive testimony from the Centers for
Medicare and Medicaid Services and health care professionals
concerning the Medicare Value-Based Purchasing for Physicians
Act. These hearings assisted in developing legislation that
provides a bonus for the reporting of quality measures in 2007.
The Tax Relief and Health Care Act of 2006 (H.R. 6111) also
establishes a physician assistance and quality initiative fund
to allow CMS to continue quality initiatives for physicians.
8. New Technologies in the Medicare Program.
Actions taken: On April 6, 2006, the Subcommittee held a
hearing to receive testimony from the U.S. Department of Health
and Human Services and others concerning the development and
use of health care information technology. On July 27, 2005,
the Subcommittee held a hearing to receive testimony from the
U.S. Department of Health and Human Services and health care
professionals concerning health care information technology,
and the approach being taken by the Administration to speed the
adoption of health IT and areas where congressional involvement
can further these efforts. The information gathered from these
hearings assisted in development and House passage of the
Health Information Technology Promotion Act of 2006 (H.R.
4157).
9. Medically Uninsured.
Actions taken: On July 27, 2006, the Subcommittee held a
hearing to receive testimony from emergency care professionals
and others concerning emergency care.
Subcommittee on Human Resources
1. Welfare Reform.
Actions taken: The Subcommittee held a hearing on February
10, 2005 on welfare reform reauthorization proposals and
related programs. Witnesses testified about the Temporary
Assistance for Needy Families (TANF) program, including
recommendations for further reforms to promote additional work
by parents and self-sufficiency for families. In addition, the
Subcommittee heard testimony about the need for States to help
every family they serve achieve the greatest degree of self-
sufficiency and find effective ways to improve child well-being
through programs aimed at promoting healthy marriages and
encouraging responsible fatherhood. The Subcommittee received
testimony about other programs under its jurisdiction,
including Child Support Enforcement, Foster Care and Adoption
Assistance, and Supplemental Security Income, from a wide
variety of witnesses.
U.S. Department of Health and Human Services (HHS)
Secretary Michael Leavitt testified before the full Committee
on February 17, 2005 regarding the President's fiscal year 2006
budget proposals for HHS. During his testimony HHS Secretary
Leavitt discussed the TANF program and the Administration's
proposals for reauthorization.
On July 14, 2005 the Subcommittee held a hearing on welfare
and work data, highlighting additional resources States can
access to determine whether adults on welfare are working and
how to better target work supports to assist them. Using data
from the National Directory of New Hires and welfare caseload
information, HHS reported there are thousands more current and
former welfare recipients working than States had reported.
This new information offered important implications for the
next stage of welfare reform, including that it is appropriate
for Federal policy to expect and support more work among
parents on welfare.
On February 8, 2006 the full Committee held a hearing on
the President's fiscal year 2007 budget proposal for HHS. HHS
Secretary Leavitt testified about implementation of the welfare
reform reauthorization provisions included in the ``Deficit
Reduction Act of 2005'' (P.L. 109-171), among other matters.
On July 19, 2006 the full Committee held a hearing to
review outcomes of the 1996 welfare reforms. Witnesses included
the former Speaker of the U.S. House of Representatives Newt
Gingrich, former Wisconsin Governor and HHS Secretary Tommy
Thompson, Sen. Rick Santorum (R-PA), and other welfare policy
experts.
A full Committee hearing on the Impacts of Border Security
and Immigration on Ways and Means Programs was held on July 26,
2006. A witness representing the HHS discussed immigrant use of
TANF program benefits, including among ``child only''
households that may include an illegal alien parent.
2. Child Support and Fatherhood.
Actions taken: At the Subcommittee's February 10, 2005
hearing on welfare reform proposals, child support and
fatherhood provisions of the President's budget proposal and
H.R. 240 were discussed.
In a June 30, 2005 report (GAO-05-839R) to Subcommittee
Chairman Wally Herger, the U.S. Government Accountability
Office (GAO) provided background about administrative
expenditures and Federal matching rates for selected programs
including Child Support Enforcement, Foster Care, Adoption
Assistance, Child Care, Medicaid, and Food Stamps. In a
subsequent letter to Chairman Herger on September 9, 2005, GAO
further explained that, in terms of child support program
costs, ``the Federal government's share represented 88 percent
of the net costs for the child support enforcement program for
fiscal year 2004,'' among other data. Numerous Child Support
Enforcement program reforms were included in the ``Deficit
Reduction Act of 2005'' (P.L. 109-171), reflecting the
Subcommittee's oversight activities and investigations of ways
to improve the efficiency of program operation.
3. Supplemental Security Income (SSI).
Actions taken: On September 27, 2005 the Subcommittee held
a joint hearing with the Subcommittee on Social Security on the
Commissioner of Social Security's proposed improvements to the
disability determination process. Witnesses included The
Honorable Jo Anne B. Barnhart, Commissioner, Social Security
Administration; State and local program administrators; policy
experts; and members of the legal community. The Subcommittees
heard testimony about the possible effects of the improvements
in the disability determination process, including a possible
reduction in processing time of at least 25 percent.
The witness list for a full Committee hearing on the
Impacts of Border Security and Immigration on Ways and Means
Programs on July 26, 2006 included the Commissioner of the
Social Security Administration. In testimony and follow-up
questioning, the Commissioner discussed implications of
immigration on the SSI program.
The ``Deficit Reduction Act of 2005'' (P.L. 109-171)
included two SSI program reforms, designed to improve the
accuracy of disability determinations and benefit awards, among
other program goals.
4. Child Protection, Foster Care, and Adoption Assistance.
Actions taken: The Subcommittee held a hearing on February
10, 2005 on welfare reform reauthorization proposals and
related programs. The Subcommittee received testimony about
other programs under its jurisdiction, including Child
Protection and Foster Care and Adoption Assistance, from a wide
variety of witnesses.
U.S. Department of Health and Human Services Secretary
Michael Leavitt testified before the full Committee on February
17, 2005 regarding the President's fiscal year 2006 budget
proposals for HHS, including involving Child Protection, Foster
Care, and Adoption Assistance programs.
At a Subcommittee hearing on May 18, 2005 testimony was
heard on protections for foster children enrolled in clinical
drug trials. Witnesses included a representative from the
Administration, State and local program administrators, and
policy experts. Testimony described conditions under which
participation of children in foster care is permitted, as well
as allegations involving the inappropriate enrollment of foster
children in such trials.
On June 9, 2005 the Subcommittee held a hearing on foster
care financing. Witnesses included a representative from the
Administration, State and local program administrators, and
policy experts. Testimony was heard on the funding structure
for the title IV-E Federal Foster Care program, including key
weaknesses in the program and how the President's proposal to
establish a Child Welfare Program Option would address these
weaknesses.
On February 8, 2006 the full Committee held a hearing on
the President's fiscal year 2007 budget proposal for HHS. The
Secretary of HHS, Michael Leavitt testified about
reauthorization of the Promoting Safe and Stable Families
program, among other matters.
On May 23, 2006 the Subcommittee held a hearing to review
proposals to improve child protection services. Testimony was
heard from representatives of numerous charitable and trade
associations, including on specific proposals to extend and
improve several child protection services programs under the
Subcommittee's jurisdiction, including the Promoting Safe and
Stable Families and Child Welfare Services programs.
Many child protection program reforms resulting from these
oversight hearings were included in the ``Deficit Reduction Act
of 2005'' (P.L. 109-171) and the ``Child and Family Services
Improvement Act of 2006'' (P.L. 109-288).
5. Unemployment Compensation.
Actions taken: On March 16, 2005 the full Committee held a
hearing on the President's fiscal year 2006 budget for the U.S.
Department of Labor.
A hearing to review the implementation of the ``SUTA (State
Unemployment Tax Act) Dumping Prevention Act of 2004'' (P.L.
108-295) was held by the Subcommittee on June 14, 2005. The
Subcommittee heard testimony on how the law prevented the
abusive practice of SUTA dumping by certain employers, on how
the law gave States additional tools to identify individuals
who continued receiving unemployment benefits even after taking
a new job, on the status of State implementation of these
provisions, and on recommendations for further improvements.
At a March 15, 2006 Subcommittee hearing, the U.S.
Government Accountability Office testified on new research on
characteristics of unemployment compensation recipients and
actions States could take to better ensure unemployed
individuals quickly return to work.
On April 5, 2006 the Subcommittee held a hearing on the use
of technology to improve public benefits programs. Testimony
was submitted by State administrators, program and information
specialists, and other experts. The hearing focused on methods
of improving the provision of unemployment compensation and
other benefits, including in the wake of hurricanes and other
natural disasters.
The Subcommittee held a May 24, 2006 hearing on the
unemployment compensation aspects of the U.S. Department of
Labor's fiscal year 2007 budget. Witnesses included a
representative from the Administration, a State program
administrator, and other interested parties. Testimony was
heard on the funding structure of the unemployment compensation
program, the behavioral effects of the programs, efforts to
prevent fraud and abuse, and potential reforms to more quickly
help unemployed individuals return to work.
6. Repatriation.
Actions taken: Concurrent with the House passage of H.R.
5865, the ``Returned Americans Protection Act of 2006,'' which
the President signed on July 27, 2006 (P.L. 109-250), Chairman
Thomas received the assurance of HHS Secretary Leavitt that the
HHS Inspector General will report to Congress by March 1, 2007
on how repatriation program funds were spent to assist those
repatriating to the U.S. from Lebanon in 2006. This report is
to include a breakdown of administrative costs versus direct
assistance such as travel and lodging expenses for those
assisted. This additional information will help Congress
fulfill its responsibility to ensure the proper use of taxpayer
funds under this program.
Subcommittee on Social Security
1. Hearings on Strengthening Social Security.
Actions taken: The Subcommittee on Social Security held an
eight-hearing series on protecting and strengthening Social
Security.
On May 17, 2005, the Subcommittee held the first hearing in
the series, examining the evolution of the Social Security
program to provide benefits for not only retired workers but
also vulnerable populations, such as individuals with
disabilities, homemakers, widows and widowers, and children.
The Subcommittee heard testimony from the Commissioner of
Social Security, the Government Accountability Office (GAO),
and policy experts. Witnesses discussed the need to preserve
benefits for vulnerable groups while updating the program to
reflect changes in women's workforce participation, marriage
and divorce trends, and other factors influencing the
retirement income needs of American families.
The Subcommittee held the second hearing in the series on
May 24, 2005. The Subcommittee examined how the Social Security
Trustees project the financial outlook for Social Security
under current law. The Subcommittee heard testimony from the
Chief Actuary of the Social Security Administration (SSA), who
reviewed the program's estimated financial outlook, the basic
assumptions the Trustees use to make their estimates, and some
potential changes in benefit growth or tax revenue that could
strengthen the program's finances. The Chief Actuary also
stated that by acting as soon as possible, policy makers would
have more options to consider, would be able to phase in
changes more gradually, and could give affected individuals
more advance notice.
The Subcommittee held the third hearing in the series on
May 26, 2005. This hearing provided Members of the House of
Representatives an opportunity to testify on Social Security
issues of importance to their constituents, including views and
proposals on how to protect and strengthen the program. Twenty
Members of the House of Representatives testified at the
hearing.
The Subcommittee held the fourth hearing in the series on
June 9, 2005. The Subcommittee examined Social Security
provisions affecting certain public employees, such as the
Government Pension Offset (GPO) and the Windfall Elimination
Provision (WEP), and exemption of certain public employees from
Social Security coverage. Testimony was provided by
representatives from the SSA, the GAO, and organizations
representing public employees and employers affected by these
provisions. The SSA and the GAO witnesses discussed the
rationale for the GPO and WEP: to ensure public employees in
jobs not covered under Social Security are treated similarly to
workers who are covered under Social Security. Witnesses from
organizations representing employees discussed the effects of
these provisions on their members and recommended repealing or
modifying the GPO and WEP. Some witnesses also testified that
requiring Social Security coverage of all newly hired public
employees could negatively affect public employee pension
plans.
The Subcommittee held the fifth hearing in the series on
June 14, 2005. The Subcommittee examined the impact of the
American population's increasing longevity on Social Security's
finances and explored ways to encourage work at older ages. The
Subcommittee heard testimony from policy experts who described
the effects of growing life expectancies on the Social Security
program and the economy and made various recommendations to
modify the program so as to encourage labor force participation
among seniors who are willing and able to work.
The Subcommittee held the sixth hearing in the series on
June 16, 2005. The Subcommittee examined international
experiences with social security reform. The Subcommittee heard
testimony from the GAO and policy experts. Witnesses described
modifications in social security program benefits and financing
undertaken in many other countries, including the introduction
of personal accounts to advance-fund varying portions of
benefits. Witnesses also discussed what the United States could
learn from the experiences of other countries.
The Subcommittee held the seventh hearing in the series on
June 21, 2005. The Subcommittee examined the impact of economic
trends on Social Security's financing and retirement security.
The Subcommittee heard testimony from the Director of the CBO
and policy experts. The CBO Director discussed the effects of
four economic factors on Social Security's financial outlook:
the growth of earnings, the interest rate used to compute the
interest credited to the trust funds, employment, and
inflation. The Director also discussed the economic benefits of
increasing national saving, which potentially could be
accomplished by adding personal accounts to Social Security.
Policy expert witnesses discussed the effect of various
economic and demographic trends on Social Security, as well as
how reductions in benefit growth, increases in Social Security
taxes, and advance-funding Social Security benefits through
personal accounts would affect the economy and beneficiaries.
The Subcommittee held the eighth and final hearing in the
series on June 23, 2005. The Subcommittee examined options for
designing a system of personal retirement accounts to ensure
that the accounts are managed efficiently and accurately, with
low administrative fees to preserve account balances. Options
for paying out account balances at retirement were also
examined. The Subcommittee heard testimony from representatives
of the SSA and the GAO, along with policy experts. In general
witnesses stated that centralized administration that takes
advantage of economies of scale would keep administrative costs
low. Witnesses also discussed options for converting personal
account balances into a stream of lifetime income. Witnesses
also explored options for distributing or dividing personal
accounts at certain life events, such as death or divorce, and
options for allocating account contributions during a couple's
marriage.
2. Hearings to Examine the use of the Social Security
Number.
Actions taken: The Subcommittee on Social Security held a
five-hearing series on Social Security number (SSN) high-risk
issues.
The Subcommittee held the first hearing in the series on
November 1, 2005. The Subcommittee examined the SSA's
management of the SSN enumeration process, including the
following: the history of SSNs, how they are assigned, how SSNs
are used today within the agency and the Federal Government,
issues related to changing the SSN card, Federal laws
protecting SSNs, and agency efforts to limit SSN fraud and
abuse. The Subcommittee heard testimony from those representing
the SSA and the SSA Office of the Inspector General (OIG). The
witnesses discussed challenges regarding the use of the SSN,
and the need to balance quick assignment of numbers to
individuals who qualify for them with prevention of SSN fraud
and abuse.
The Subcommittees on Social Security and Oversight jointly
held the second hearing in the series on February 16, 2006. The
Subcommittees examined how employers report wages to the SSA,
the effects of incorrect wage reports on administration of the
Social Security program and tax administration, and enforcement
of hiring and wage-reporting responsibilities by the Department
of Homeland Security (DHS) and the Internal Revenue Service
(IRS). Witnesses from the IRS, the SSA, the DHS, the GAO, and
the SSA OIG testified. Witnesses discussed the current process
by which employers report earnings to the SSA, voluntary
programs offered by the SSA and the DHS that employers may use
to verify employees' SSNs and employment eligibility status,
and enforcement of tax and immigration laws. Witnesses also
discussed options to potentially detect work by unauthorized
immigrants through data sharing.
The Subcommittee held the third hearing in the series on
March 2, 2006. The Subcommittee examined the SSA's management
of the assignment of SSNs and the payment of benefits to
foreign-born individuals. Witnesses from the SSA, the SSA OIG,
and the GAO discussed how SSNs are assigned to foreign-born
individuals; the role of SSNs in work authorization; current
law regarding Social Security coverage and benefits of non-
citizens; the SSA's administration of totalization agreements;
and proposals to improve the integrity of the enumeration
process, improve stewardship of totalization agreements, and
modify Social Security coverage and benefits for non-citizens.
The Subcommittee held the fourth hearing in the series on
March 16, 2006. The Subcommittee examined expanding uses of the
SSN card and measures to prevent SSN card fraud. The
Subcommittee also heard the testimony of witnesses from the
SSA, the SSA OIG, and policy experts regarding the history of
SSNs and SSN card use, the role of the SSN card in work
authorization, measures to prevent SSN card fraud, and the
potential effects of transforming the SSN card into an
identification document.
The Subcommittee held its fifth and final hearing in the
series on March 30, 2006. The Subcommittee examined the role of
SSNs in identity theft and options to enhance SSN privacy. The
Subcommittee heard testimony by witnesses from the Federal
Trade Commission, the GAO, public record administrators,
private investigators, the financial services industry, and an
identity theft victim. Witnesses discussed the role of SSNs in
abetting identity theft, and the effects of proposals to
prohibit or restrict the use, sale, purchase, or display of
SSNs by individuals, businesses, or the government. Also, at
the beginning of the hearing, two Members provided testimony
regarding their proposal to add certain security features to
SSN cards.
3. Hearings to Examine Disability Program Reform and
Oversight.
Actions taken: On September 27, 2005, the Subcommittee on
Social Security held a joint hearing with the Subcommittee on
Human Resources on the Commissioner of Social Security's
proposed improvements to the disability determination process.
The Subcommittees examined Commissioner Barnhart's proposed
regulations for the disability determination process and new
return-to-work demonstration projects. Witnesses included the
Commissioner of Social Security; the Chair of the Judicial
Conference Committee, Federal-State Jurisdiction,
Administrative Office of the U.S. Courts; the Co-Chair of the
Social Security Task Force, Consortium for Citizens with
Disabilities; and representatives from other interested
organizations. Witnesses discussed the new approach proposed by
the SSA, the objective of the changes made, and their potential
effect on the Social Security disability claims process.
On June 15, 2006, the Subcommittee held a hearing on Social
Security's improved disability determination process. During
this hearing the Subcommittee examined the SSA's final
regulation, including how the Agency addressed public comments
in developing its final rule and how implementation will
proceed. Testimony was heard from the Commissioner of Social
Security, along with representatives from the GAO, the Social
Security Task Force of the Consortium for Citizens with
Disabilities, the Federal Bar, the National Organization of
Social Security Claimant's Representatives, and employee
organizations.
4. Hearings to Examine Stewardship of the Social Security
Programs.
Actions taken: The Subcommittee has continued its oversight
of the stewardship of the Social Security programs through the
five-hearing series on Social Security number (SSN) high-risk
issues summarized above and through discussions with, and
reports requested from, the SSA, the GAO, the SSA OIG, and
interested parties.
5. Hearings to Examine Service Delivery.
Actions taken: On May 11, 2006, the Subcommittee held a
hearing on Social Security service delivery challenges. The
Subcommittee heard testimony about the current service delivery
challenges facing the SSA and how the President's budget
request will help address those challenges. The Commissioner of
Social Security presented testimony on the delivery of
traditional services, stewardship, staffing, new enumeration
procedures, and the Medicare prescription drug program.
In addition, Subcommittee Chairman McCrery has received the
following studies/reports requested by the Subcommittee from
the GAO: (1) Social Security Numbers--Internet Resellers
Provide Few Full SSNs, but Congress Should Consider Enacting
Standards for Truncating SSNs; (2) Social Security Numbers--
Stronger Protections Needed When Contractors Have Access to
SSNs; (3) Social Security Reform--Other Countries' Experiences
Provide Lessons for the United States; (4) Social Security
Reform--Implications of Different Indexing Choices; (5) Social
Security--Better Coordination Among Federal Agencies Could
Reduce Unidentified Earnings Reports; (6) Immigration
Enforcement: Benefits and Limitations To Using Earnings Data To
Identify Unauthorized Work; (7) Social Security Statements--
Social Security Administration Should Better Evaluate Whether
Workers Understand Their Statements; and (8) Social Security
Administration--A More Formal Approach Could Enhance SSA's
Ability To Develop and Manage Totalization Agreements.
Also, Chairman McCrery has requested the following studies
from the GAO that are ongoing: (1) the effect of options to
modify the Social Security benefit formula on benefits payable
under the disability insurance and survivor's insurance
programs, and on the spouses and children of retired and
disabled workers; (2) vocational rehabilitation outcomes for
the SSA's disability beneficiaries; (3) the role of the
judicial appeals process in Social Security claims
adjudication; and (4) Social Security Administration's
disability claims backlog.
C. Additional Oversight Activities and any Recommendation or Actions
Taken
1. ADDITIONAL OVERSIGHT ACTIVITIES OF THE OVERSIGHT SUBCOMMITTEE
a. Investigation of the tax-exempt treatment of intercollegiate
athletics revenue
Actions taken: During 2006, Chairman Thomas initiated an
inquiry into the tax-exempt treatment of intercollegiate
athletics revenue. The Subcommittee interviewed numerous
officials from the National Collegiate Athletic Association
(NCAA), athletic conferences, football bowl organizations, and
college sports reform groups. Chairman Thomas sent an eight-
page letter to the president of the NCAA requesting responses
to questions relating to the educational purpose and financial
condition of college sports. The letter raised numerous issues,
including whether the NCAA was accomplishing its tax-exempt,
educational mission; how massive expenditures on state-of-the-
art athletic facilities, coaches' salaries, and lavish travel
arrangements furthered the educational mission of universities;
and why the NCAA distributes over $100 million each year based
on athletic rather than academic performance.
b. Failure of the electronic fraud detection system
Actions taken: The Subcommittee investigated the failure of
the IRS and its contractor, the Computer Sciences Corporation
(CSC), to implement an updated electronic system to detect
fraudulent tax returns in 2006. This failure cost taxpayers
hundreds of millions of dollars and permitted criminals who
intentionally filed false returns to defraud the Federal
government. In addition, the IRS paid CSC $18.5 million for
more than two years of work that never resulted in a functional
product. In a letter to Treasury Secretary Henry Paulson,
Chairman Thomas requested that the appropriate individuals be
held accountable, future efforts to implement the Electronic
Fraud Detection System be closely monitored, and that the IRS's
dependence on CSC for modernizing IRS business systems be
reexamined.
c. Review of credit union tax exemption
Actions taken: In November 2006, the National Credit Union
Administration (NCUA) released a report on the income
characteristics of credit union membership and executive
compensation. The NCUA report recommended expanding data
collection efforts and enhancing transparency with respect to
executive compensation.
Chairman Thomas requested that the National Association of
State Credit Union Supervisors (NASCUS) begin to collect data
relating to executive compensation, membership, services,
credit union service organizations and unrelated business
income tax. NASCUS will report their findings to Congress in
2007.
The Government Accountability Office (GAO) released two
reports--one on credit union transparency and the other on
corporate governance and the objectivity of the NCUA on
December 1, 2006, on behalf of Chairman Thomas. Analyzing data
from the Federal Reserve's 2004 Survey of Consumer Finances,
GAO found that banks were still serving a higher percentage of
lower- and moderate-income households than credit unions. GAO
also determined that compensation of credit union executives
was not transparent. GAO recommended that the NCUA enhance
transparency with respect to executive compensation and adopt
practices employed by other financial regulators to enhance the
independence and objectivity of the NCUA and maintain an arm's-
length relationship with the regulated industry.
d. Further review of the Red Cross and its disaster preparedness in
2006
Actions taken: The Subcommittee requested the Government
Accountability Office (GAO) to review the response by the Red
Cross to Hurricane Katrina. The purpose of the review was to
determine whether the Red Cross fulfilled its responsibility in
the National Response Plan to coordinate federal mass care
assistance. The GAO concluded that the Red Cross and the
Federal Emergency Management Agency (FEMA) disagreed about
their roles and responsibilities, which strained their working
relationships and hampered their efforts to coordinate relief
services for hurricane victims. The report recommended that the
Red Cross and FEMA agree on operating procedures and improve
the tracking of relief resources, and the report called for the
Red Cross to implement certain staffing strategies.
Furthermore, the Subcommittee interviewed the former Red Cross
president, as well as the chairman of the board of directors,
to identify the causes for certain failures in the Red Cross's
response to Hurricane Katrina and to determine whether
structural changes at the Red Cross were necessary.
e. Policies and procedures of the U.S. Tax Court
Actions taken: In March 2005, the Supreme Court held that
the U.S. Tax Court had been using invalid procedures to handle
certain cases heard by Special Trial Judges, a group of junior
judges at the Tax Court. The Supreme Court held that the Tax
Court had been improperly requiring original opinions drafted
by Special Trial Judges to be kept confidential. These original
opinions had to be reviewed by Presidentially-appointed Tax
Court judges before they could be adopted. In some cases,
Presidentially-appointed judges made significant changes to the
original opinion drafted by the Special Trial Judge, even
though the appointed judge had never participated in the trial.
The Supreme Court found that this procedure was improper (See
Ballard et ux. v. Commissioner of Internal Revenue, 544 U.S. 40
(2005)). The Supreme Court's decision led to questions about
the way the Tax Court had handled almost 1,000 similar taxpayer
cases. The Subcommittee reviewed the Tax Court's procedures to
develop a better understanding of why the Tax Court was using
these defective procedures, the scope of the problem, the
effect on taxpayers, and potential solutions to address the
problem.
f. GAO review of the feasibility of sharing new hires data with law
enforcement for child abduction cases
Actions taken: The Subcommittees on Human Resources and
Oversight requested that the Government Accountability Office
(GAO) conduct a study to determine whether the National
Directory of New Hires (NDNH) could be used to assist law
enforcement agencies locate convicted sex offenders. The
Government Accountability Office (GAO) recommends granting
Health and Human Services (HHS) the ability to provide NDNH
data to the Federal Bureau of Investigation (FBI) and directs
HHS and the FBI to conduct a test match of data from the
National Sex Offender Registry (NSOR) and NDNH. Conducting a
test match will help to assess the costs, benefits and validity
that come about from matching the two databases. The report
also addressed privacy and security concerns with expanding
access to this data.
g. Examination of donor-advised funds and supporting organizations
Actions taken: The Committee on Ways and Means requested
the Government Accountability Office (GAO) to examine the
federal laws and regulations related to donor-advised funds and
supporting organizations, compared to the laws and regulations
for private foundations. The GAO was asked to identify areas
where donor-advised funds and supporting organizations may not
be complying with the law. The GAO was also requested to
collect information on the financial and organizational
characteristics of donor-advised funds and supporting
organizations. The GAO found that some of these organizations
were being used in abusive schemes to benefit donors or other
related parties. Since donor-advised assets often range in the
billions of dollars, compared to the assets of supporting
organizations and private foundations which range in the
hundreds of billions, this became a cause for concern. The IRS,
however, often faces challenges gathering evidence or
addressing activities that do not clearly benefit charities
because some of these activities do not violate current law.
The GAO recommended that the IRS collect additional data to
determine the payout rate to charities; to track the
relationships between organizations; and to monitor loans made
to officers, donors, and others associated with the charity.
The Pension Protection Act of 2006 (P.L. 109-280) included
several reforms to improve the accountability of donor-advised
funds and supporting organizations.
2. ADDITIONAL OVERSIGHT ACTIVITIES OF THE COMMITTEE
On July 26, 2006, the full Committee held a hearing on the
impacts of border security and immigration on Ways and Means
programs. The Committee heard testimony by witnesses from the
Department of Homeland Security, the Department of Health and
Human Services, the Internal Revenue Service, the Social
Security Administration, and policy experts on the effect of
immigration and border security-related proposals on the costs
and administration of certain entitlement programs within the
jurisdiction of the Committee on Ways and Means (including
Social Security, Supplemental Security Income, Medicare, and
Temporary Assistance for Needy Families), and the effect on tax
revenues and compliance. Representatives Shaw, Lewis of
Kentucky, and Chocola followed up on this hearing by hosting
forums in their districts to explore these issues further on a
local level. Information gathered during the Members' forums
and the full Committee hearing was related by Chairman Thomas
during his testimony before the Republican Policy Committee on
September 12, 2006.
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, of the 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 109th Congress, provides
for the jurisdiction of the Committee on Ways and Means, as
follows:
(s) Committee on Ways and Means.
(1) Customs revenue, collection districts,
and ports of entry and delivery.
(2) Reciprocal trade agreements.
(3) Revenue measures generally.
(4) Revenue measures relating to insular
possessions.
(5) Bonded debt of the United States, subject
to the last sentence of clause 4(f).
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.
(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 $8.965 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 21 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 109th Congress can be outlined as
follows:
(a) Old-age, survivors, and disability insurance
(Title II)--At present, there are approximately 162
million workers in employment covered by the program,
and for calendar year 2005, $521 billion in benefits
were paid to 48 million individuals.
(b) Medicare (Title XVIII)--Provides hospital
insurance benefits to 35.2 million persons over the age
of 65 and to 6.7 million disabled persons. Voluntary
supplementary medical insurance is provided to 33.7
million aged persons and 6 million disabled persons.
Total program outlays under these programs were $330
billion in 2005.
(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. In January 2006, 6.9 million
individuals received Federal SSI benefits on a monthly
basis. Of these 6.9 million persons, approximately 1.1
million received benefits on the basis of age, and 5.8
million on the basis of blindness or disability.
Federal expenditures for cash SSI payments in 2005
totaled $36 billion, while State expenditures for
federally administered SSI supplements totaled $5.1
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. In most cases, Federal TANF benefits for
individuals are limited to 5 years and individuals must
work to maintain their eligibility. In June 2006, about
1.8 million families and 4.1 million individuals
received benefits from the TANF program.
(e) Child support enforcement (part D of Title IV)--
In fiscal year 2003 Federal administrative expenditures
totaled $5.2 billion for the child support enforcement
program. Child support collections for that year
totaled $21.2 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 2005,
Federal expenditures for child welfare services totaled
$702 million. Federal expenditures for foster care and
adoption assistance were approximately $6.7 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. Between July 1, 2005, and
June 30, 2006, an estimated $30.3 billion was paid in
unemployment compensation, with approximately 7.4
million workers receiving unemployment compensation
payments.
(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. In fiscal year 2005, $1.7
billion was appropriated. 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 (NAFTA) 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 General System of Preferences and
the Caribbean Basin Initiative;
(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) Trade and customs revenue functions of the
Department of Homeland Security and the Department of
the Treasury.
(h) Authorization of the budget for the International
Trade Commission (ITC), functions of the Department of
Homeland Security under the Committee's jurisdiction,
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 non-revenue 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 \1\ by tabling a resolution.\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 109TH 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)]
------------------------------------------------------------------------
H. Res., sponsor, and date of Description of Senate action (and related
House passage House action, if any)
------------------------------------------------------------------------
107th Congress:
H. Res. 240, Mr. On September 13, 2001, the Senate passed
Thomas September 20, H.R. 2500, ``Making appropriations for
2001. 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. On October 17, 2000, the Senate passed S.
Crane October 24, 1109, the Bear Protection Act of 1999.
2000. 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. On November 3, 1999, the Senate passed S.
Weller November 18, 1232, Federal Erroneous Retirement
1999. 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. On February 24, 1999, the Senate passed
Weller November 18, S. 4, the Soldiers', Sailors', Airmen',
1999. 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. On May 20, 1999, the Senate passed S.
Portman July 16, 254, the Violent and Repeat Juvenile
1999. 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. On October 8, 1998, the Senate passed S.
Crane October 15, 361, the Tiger and Rhinoceros
1998. 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. On April 15, 1997, the Senate passed S.
Ensign March 5, 1998. 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. On June 30, 1996, the Senate passed H.R.
Crane September 28, 400, the Anaktuvuk Pass Land Exchange
1996. 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. On September 25, 1996, the Senate passed
Archer September 27, S. 1311, the National Physical Fitness
1996. 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 On January 26, 1996, the Senate passed S.
April 16, 1996. 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. On February 1, 1996, the Senate passed S.
Crane March 21, 1996. 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. On October 3, 1994, the Senate passed S.
Gibbons October 7, 1216, the Crow Boundary Settlement Act
1994. 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. On July 20, 1994, the Senate passed H.R.
Gibbons August 12, 4554, the Agriculture and Rural
1994. Development Appropriation for fiscal
year 1995, with amendments. Senate
amendment 83 would have provided
authority for the Food and Drug
Administration (FDA) 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 benefited 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. On May 25, 1994, the Senate passed S.
Gibbons July 21, 1030, the Veterans Health Programs
1994. 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. On May 29, 1994, the Senate passed S.
Gibbons July 21, 729, to amend the Toxic Substances
1994. 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. On June 22, 1994, the Senate passed H.R.
Rangel July 14, 1994. 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. On August 1, 1991, the Senate passed S.
Rostenkowski 884 amended, the Driftnet Moratorium
February 25, 1992. 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. On February 20, 1991, the Senate passed
Rostenkowski October S. 320, to reauthorize the Export
31, 1991. 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. On July 11, 1991, the Senate passed S.
Russo October 22, 1241, the Violent Crime Act of 1991.
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 VII 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. On August 4, 1989, the Senate passed S.
Cardin Nov. 9, 1989. 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. On Apr. 19, 1989, the Senate passed S.
Rostenkowski June 774, the Financial Institution Reform,
15, 1989. 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. On Mar. 30, 1987, the Senate passed S.
Rostenkowski July 829, legislation which would authorize
30, 1987. 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. On 0ct. 6, 1987, the Senate passed S.
Rostenkowski June 1748, legislation which would prohibit
16, 1988 (see also the importation into the United States
H.R. 3391). of all products from Iran. (The House
passed H.R. 3391, which included similar
provisions, on 0ct. 6, 1987.)
H. Res. 479, Mr. On May 13, 1987, the Senate passed S.
Rostenkowski June 727, legislation which would clarify
21, 1988 (see also Indian treaties and Executive orders
H.R. 2792 and H.R. with respect to fishing rights. This
4333). 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. On Sept. 9, 1988, the Senate passed S.
Rostenkowski Sept. 2662, the Textile and Apparel Trade Act
23, 1988 (see also of 1988. This legislation would impose
H.R. 1154). global import quotas on textiles and
footwear products.
H. Res. 552, Mr. On Sept. 9, 1988, the Senate passed S.
Rostenkowski Sept. 2763, the Genocide Act of 1988. This
28, 1988. legislation contained a ban on the
importation of all oil and oil products
from Iraq.
H. Res. 603, Mr. On Mar. 30, 1988, the Senate passed S.
Rostenkowski Oct. 2097, the Uranium Mill Tailings Remedial
21, 1988. 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. On Aug. 8, 1988, the Senate passed H.R.
Rostenkowski Oct. 1315, legislation which would authorize
21, 1988. 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. On Sept. 26, 1985, the Senate passed S.
Rostenkowski Oct. 1, 1712, legislation which would extend the
1985. 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. The Senate passed S. 638, legislation to
Rostenkowski Sept. provide for the sale of Conrail to the
25, 1986. Norfolk Southern Railroad. The
legislation contained numerous
provisions relating to the tax treatment
of the sale of Conrail.
98th Congress:
H. Res. 195, Mr. On Apr. 21, 1983, the Senate passed S.
Rostenkowski June 144, a bill to insure the continued
17, 1983. 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 the exercise 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 have been sustained:
G. Points of Order--House Rule XXI Chronological List
June 14, 2006
H.R. 5576, Transportation, Treasury, Housing and Urban
Development, the Judiciary, and Related Agencies
Appropriations Act, 2007
A point of order was raised against an amendment offered by
Representative Tiahrt, which would have limited funds to the
IRS and prohibited its ability to provide and tax preparation
software or online tools. Representative Tiahrt withdrew his
amendment. [109-2, H3930]
June 13, 2006
H.R. 5576, Transportation, Treasury, Housing and Urban
Development, the Judiciary, and Related Agencies
Appropriations Act, 2007
A point of order was raised against Section 206 of the
bill, which would have limited funds to the IRS and prohibited
its ability to provide and tax preparation software or online
tools. The chair ruled that the provision was in violation of
Rule XXI, clause 2. The point of order was sustained, and the
provision was stricken from the bill. [109-2, H3849-3850]
May 23, 2006
H.R. 5384, Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropriations
Act, 2007
A point of order was raised against an amendment offered by
Representative DeLauro, which would have increased the bill's
appropriation for waste and water grant programs by $689
million and paid for this increase by reducing the size of the
tax cut for those making over one million dollars. The chair
ruled that the provision proposes to change existing law and
constitutes legislation on an appropriations bill and,
therefore, violates clause 2 of Rule XXI. The point of order
was sustained, and the amendment was not in order. [109-2,
H3063]
May 19, 2006
H.R. 5385, Military Construction and Veterans Affairs and
Related Agencies Appropriations Act, 2007
Points of order were raised against three amendments
offered by Representatives Edwards, Farr, and Obey, which would
have raised taxes to offset program funding increases. The
chair ruled that these provisions proposed to change existing
law and constituted legislation on an appropriations bill and,
therefore, violated clause 2 of Rule XXI. The points of order
were sustained, and the amendments were not in order. [109-2,
H2922-2931]
June 30, 2005
H.R. 3058, Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of
Columbia, and Independent Agencies Appropriations
Act, 2006
A point of order was raised against an amendment offered by
Representative Simmons, which would have limited the use of
funds to enter into, implement, or provide oversight of
contracts between the Secretary of the Treasury, or his
designee, and private collection agencies. Representative
Simmons withdrew his amendment. [109-1, H3640]
June 29, 2005
H.R. 3058, Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of
Columbia, and Independent Agencies Appropriations
Act, 2006
A point of order was raised against section 218 of the
bill, which would direct the Secretary of the Treasury to
submit to the Committees on Appropriations a report defining
currency manipulation and what actions would be construed as
another nation manipulating its currency, and describing how
statutory provisions addressing currency manipulation by
America's trading partners contained in, and relating to, title
22 U.S.C. 5304, 5305, and 286y can be better clarified
administratively to provide for improved and more predictable
evaluation. The chair ruled that the provision was in violation
of Rule XXI, clause 2. The point of order was sustained, and
the provision was stricken from the bill. [109-1, H5422]
June 14, 2005
H.R. 2862, Science, State, Justice, Commerce, and Related
Agencies Appropriations Act, 2006
A point of order was raised against an amendment offered by
Representative Obey, which would have increased funding for the
EDA by $53 million and paid for this increase by reducing the
size of the tax cut for those making over one million dollars.
The chair ruled that the provision proposes to change existing
law and constitutes legislation on an appropriations bill and,
therefore, violates clause 2 of Rule XXI. The point of order
was sustained, and the amendment was not in order. [109-1,
H4437]
May 26, 2005
H.R. 2528, Military Quality of Life and Veterans Affairs
Appropriations Act, 2006
A point of order was raised against an amendment offered by
Representative Obey, which would have increased the bill's
appropriation for veterans medical care by $2.6 billion and
paid for this increase by reducing the size of the tax cut for
those making over one million dollars. The chair ruled that the
provision proposes to change existing law and constitutes
legislation on an appropriations bill and, therefore, violates
clause 2 of Rule XXI. The point of order was sustained, and the
amendment was not in order. [109-1, H4106]
May 19, 2005
H.R. 2361, Department of the Interior, Environment, and
Related Agencies Appropriations Act, 2006
A point of order was raised against an amendment offered by
Representative Obey, which would have increased the bill's
appropriation for the Clean Water State Revolving Fund by
$500,000 and paid for this increase by reducing the size of the
tax cut for those making over one million dollars. The chair
ruled that the provision proposes to change existing law and
constitutes legislation on an appropriations bill and,
therefore, violates clause 2 of Rule XXI. The point of order
was sustained, and the amendment was not in order. [109-1,
H3640]
May 17, 2005
H.R. 2360, Department of Homeland Security Appropriations
Act, 2006
A point of order was raised against an amendment offered by
Representative Obey, which would have increased the bill's
appropriation for Customs and Border Protection and paid for
this increase by reducing the size of the tax cut for those
making over one million dollars. The chair ruled that the
provision proposes to change existing law and constitutes
legislation on an appropriations bill and, therefore, violates
clause 2 of Rule XXI. The point of order was sustained, and the
amendment was not in order. [109-1, H3398]
September 14, 2004
H.R. 5025, Transportation, Treasury, and Independent
Agencies Appropriations Act, 2005
A point of order was raised against section 644 of the
bill, which would have amended section 6402 of the Internal
Revenue Code of 1986 by adding a new subsection that allows for
the offset of federal tax refunds to collect delinquent state
unemployment compensation overpayments. The chair ruled that
the provision was in violation of Rule XXI, clause 2. The point
of order was sustained, and the provision was stricken from the
bill. [108-2, H7176]
September 14, 2004
H.R. 5025, Transportation, Treasury, and Independent
Agencies Appropriations Act, 2005
A point of order was raised against section 643 of the
bill, which would have amended section 453(j) of the Social
Security Act to allow access to data in the National Directory
of New Hires for use in collecting delinquent non-tax federal
debt. The chair ruled that the provision was in violation of
Rule XXI, clause 2. The point of order was sustained, and the
provision was stricken from the bill. [108-2, H7176]
September 14, 2004
H.R. 5025, Transportation, Treasury, and Independent
Agencies Appropriations Act, 2005
A point of order was raised against section 642 of the
bill, which would have amended Title 31 of the U.S. Code to
allow the Federal Government to collect debts that are more
than 10 years old by withholding federal tax refunds or
garnishing Social Security benefits. The chair ruled that the
provision was in violation of Rule XXI, clause 2. The point of
order was sustained, and the provision was stricken from the
bill. [108-2, H7176]
September 9, 2004
H.R. 5006, Departments of Labor, Health and Human Services,
and Education, and Related Agencies Appropriations
Act, 2005
A point of order was raised against an amendment offered by
Representative Brown (OH), which would have stopped the
increase of Part B Medicare premiums, effectively leaving them
at their current dollar amount. The chair ruled that the
provision would provide new budget authority in excess of the
suballocation provided by the Appropriations Committee, and
therefore violated section 302(f) of the Congressional Budget
Act of 1974. The point of order was sustained, and the
amendment was not in order. [108-2, H6945]
September 8, 2004
H.R. 5006, Departments of Labor, Health and Human Services,
and Education, and Related Agencies Appropriations
Act, 2005
A point of order was raised against section 219(b) of the
bill, which created a Medicare claims processing fee for
duplicative or incorrect claims for Medicare Part A or B
services. The chair ruled that the provision was in violation
of Rule XXI. The point of order was conceded, sustained, and
the provision was stricken from the bill. [108-2, H6836]
June 18, 2004
H.R. 4567, Department of Homeland Security Appropriations
Act, 2005
A point of order was raised against an amendment offered by
Representative Sherman, which would have limited the funds made
available in this Act for processing the importation of any
article which is the product of Iran. The chair ruled that the
provision was in violation of clause 5(a) of Rule XXI. The
point of order was sustained, and the amendment was not in
order. [108-2, p. H4551]
July 10, 2003
H.R. 2660, Departments of Labor, Health and Human Services,
and Education, and Related Agencies Appropriations
Act, 2004
A point of order was raised against section 217(B) of the
bill, which created a Medicare Claims Processing fee. An
October 1, 2003, requirement assured a policy for providers to
submit all Medicare claims electronically. Since most
electronic billing systems eliminate inaccurate and duplicate
claims, and because current law provided the proper small
business exemption, the user fee was unnecessary. The chair
ruled that the provision was in violation of Rule XXI, clause
2(b). The point of order was conceded, sustained, and the
provision was stricken from the bill. [108-1, p. H6560]
July 10, 2003
H.R. 2660 Departments of Labor, Health and Human Services,
and Education, and Related Agencies Appropriations
Act, 2004
A point of order was raised against an amendment offered by
Representative Obey, which would have provided a 1-percentage
add-on to the Federal assistance to every State for their
Medicaid programs. This would have been paid for through a
reduction in the size of the tax cut for persons who make more
than $1 million a year. 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 conceded and
sustained. [108-1, p. H6547]
July 23, 2003
H.R. 2799, Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations, Act
2004
A point of order was raised against an amendment offered by
Representative Levin, which would forbid expenditure of funds
that would be used to negotiate free trade agreements that did
not contain certain listed provisions, which imposed new duties
that were not required by law and made the appropriations
contingent upon the performance of said duties and on
successful trade negotiations with other countries. The chair
ruled that the provision was in violation of Rule XXI, clause
2. The point of order was sustained. [108-1, p. H7337-7339]
September 4, 2003
H.R. 2989, Transportation, Treasury, and Independent
Agencies Appropriations Act, 2004
A point of order was raised against portions of section 631
of the bill, which would have amended the Trade Agreements Act
of 1979. The provision exempted limitations on procurement. The
chair ruled that the provision was in violation of Rule XXI,
clause 2(b). The point of order was conceded, sustained and the
language was stricken from the bill. [108-1, p. H7913]
September 4, 2003
H.R. 2989, Transportation, Treasury, and Independent
Agencies Appropriations Act, 2004
A point of order was raised against the contents of Section
164 of the bill, which amended the Buy America requirements for
transit capital purchases of steel, iron, manufactured goods,
and rolling stock. The chair ruled that these provisions were
in violation of Rule XXI. The point of order was conceded,
sustained, and the section was stricken from the bill. [108-1,
p. H7912-7913]
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. H6731]
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. H7708]
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. [104-1, p. H4593]
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. H4531]
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.
[102-2 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. H11412]
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. H4692]
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. H4692]
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. H6662]
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. H6621]
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. H6622]
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. H6610]
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. H6620]
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. H9236]
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. H5539-40]
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. H5311]
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. H5310]
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. H5310]
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. H9189]
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. H6418]
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. H5489]
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. H3762]
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. H9407]
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. H9396]
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. H9395-9396]
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. H8717]
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.
H7244]
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 108th 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 \14\
---------------------------------------------------------------------------
\14\ 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 Virginia
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 109th Congress on December 9, 2006,
there had been referred to the Committee a total of 2,152
bills, representing 26.4 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 109TH CONGRESSES
----------------------------------------------------------------------------------------------------------------
Referred to Committee
Introduced in House on Ways and Means Percentage
----------------------------------------------------------------------------------------------------------------
90th Congress.............................. 24,227 3,806 15.7
91st Congress.............................. 23,575 3,442 14.6
92nd Congress.............................. 20,458 3,157 15.4
93rd Congress.............................. 21,096 3,370 16
94th Congress.............................. 19,371 3,747 19.3
95th Congress.............................. 17,800 3,922 22
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
102nd Congress............................. 7,771 1,972 25.4
103rd 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
108th Congress............................. 6,953 1,541 22.2
109th Congress............................. 8,152 2,152 26.4
----------------------------------------------------------------------------------------------------------------
B. Public Hearings
In the course of the 109th Congress, the full Committee on
Ways and Means held public hearings on a total of 26 days,
including 15 days in the first session and 11 days in the
second session. Many of these hearings dealt with broad subject
matter including the President's fiscal year 2005 and 2006
budget proposals, health and Social Security issues, and
President Bush's trade agenda. The full Committee reviewed
programs under the Committee's jurisdiction for waste, fraud,
and abuse, and focused on such issues as tax reform, and the
implementation of free trade agreements with Bahrain, Oman,
Peru, and the Dominican Republic.
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
109th Congress.
TABLE 2. PUBLIC HEARINGS CONDUCTED BY THE FULL COMMITTEE ON WAYS AND
MEANS
------------------------------------------------------------------------
Number of
Subject and date --------------------------
Days Witnesses
------------------------------------------------------------------------
2005:
President's Fiscal Year 2006 Budget with 1 1
U.S. Department of the Treasury
Secretary John Snow, February 8.........
President's Fiscal Year 2006 Budget with 1 1
OMB Director Bolten, February 9.........
President's Fiscal Year 2006 Budget for 1 1
the U.S. Department of Health and Human
Services, February 17...................
Future of Social Security, March 9....... 1 3
President's Fiscal Year 2006 Budget for 1 1
the U.S. Department of Labor, March 16..
United States-China Economic Relations 1 11
and China's Role in the World Economy,
April 14................................
Overview of the Tax-Exempt Sector, April 1 7
20......................................
Implementation of the Dominican Republic- 1 12
Central America Free Trade Agreement (DR-
CAFTA), April 21........................
Alternatives to Strengthen Social 1 8
Security, May 12........................
Retirement Policy Challenges and 1 6
Opportunities of our Aging Society, May
19......................................
Tax-Exempt Hospital Sector, May 26....... 1 9
Tax Reform, June 8....................... 1 5
United States-Japan Economic and Trade 1 10
Relations, September 28.................
Implementation of the United States- 1 8
Bahrain Free Trade Agreement, September
29......................................
Review of Credit Union Tax Exemption, 1 12
November 3..............................
--------------------------
Total for 2005....................... 15 95
==========================
2006:
President's Fiscal Year 2007 Budget with 1 1
OMB Director Joshua Bolten, February 8..
President's Fiscal Year 2007 Budget for 1 1
the U.S. Department of Health and Human
Services, February 8....................
President Bush's Trade Agenda, February 1 1
15......................................
President's Fiscal Year 2007 Budget with 1 1
U.S. Department of the Treasury
Secretary John Snow, February 15........
Implementation of the United States-Oman 1 6
Free Trade Agreement, April 5...........
Implementation of the Medicare Drug 1 8
Benefit, June 14........................
Health Savings Accounts, June 28......... 1 7
Implementation of the United States-Peru 1 8
Trade Promotion Agreement, July 12......
Hearing to Review Outcomes of 1996 1 8
Welfare Reforms, July 19................
Impacts of Border Security and 1 7
Immigration on Ways and Means Programs,
July 26.................................
Patient Safety and Quality Issues in End 1 5
Stage Renal Disease Treatment, December
6.......................................
--------------------------
Total for 2006....................... 11 53
==========================
Total for both sessions.............. 26 148
------------------------------------------------------------------------
The six Subcommittees of the Committee on Ways and Means
were also very active in conducting public hearings during the
109th 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
2005:
Future of the World Trade Organization, 1 5
March 17................................
2006:
Customs Budget Authorizations and Other 1 8
Issues, July 25.........................
--------------------------
Total................................ 2 13
==========================
SUBCOMMITTEE ON OVERSIGHT
2005:
2005 Tax Return Filing Season and the IRS 1 8
Budget for Fiscal Year 2006, April 14...
Hearing to Review the Tax Deduction for 1 5
Facade Easements, June 23...............
Hearing to Examine Tax Fraud Committed by 1 8
Prison Inmates, June 29.................
Fraud in Income Tax Return Preparation, 1 8
July 20.................................
To Review the Response by Charities to 1 9
Hurricane Katrina, December 13..........
2006:
Second in Series on Social Security 1 5
Number High-Risk Issues, February 16--
Jointly with Subcommittee on Social
Security................................
2006 Tax Return Filing Season and the IRS 1 8
Budget for Fiscal Year 2007, April 6....
Charities and Employment Taxes: Are 1 3
Charities in the Combined Federal
Campaign Meeting their Employment Tax
Responsibilities? May 5.................
--------------------------
Total................................ 8 54
==========================
SUBCOMMITTEE ON HEALTH
2005:
Medicare Payments to Physicians, February 1 6
10......................................
Physician-Owned Specialty Hospitals, 1 7
March 8.................................
Measuring Physician Quality and 1 4
Efficiency of Care for Medicare
Beneficiaries, March 15.................
Managing the Use of Imaging Services, 1 5
March 17................................
Long Term Care, April 19................. 1 6
Post-Acute Care, June 16................. 1 9
Value-Based Purchasing for Physicians 1 4
under Medicare, July 21.................
Health Care Information Technology, July 1 6
27......................................
The Medicare Value-Based Purchasing for 1 5
Physicians Act, September 29............
Gainsharing, October 7................... 1 7
Field Hearing on Competition in the FEHB 1 6
Program, December 2.....................
2006:
MedPAC's March Report on Medicare Payment 1 5
Policies, March 1.......................
Long-Term Acute Care Hospitals, March 15. 1 5
Fourth in Series on Health Care 1 7
Information Technology, April 6.........
Implementation of the Medicare Drug 2 7
Benefit, May 3 and May 4................
Medicare Reimbursement of Physician- 1 9
Administered Drugs, July 13.............
Price Transparency, July 18.............. 1 5
Emergency Care, July 27.................. 1 5
--------------------------
Total................................ 19 108
==========================
SUBCOMMITTEE ON SOCIAL SECURITY
2005:
First in a Series on Protecting and 1 8
Strengthening Social Security, May 17...
Second in a Series on Protecting and 1 7
Strengthening Social Security, May 24...
Third in a Series on Protecting and 1 20
Strengthening Social Security, May 26...
Fourth in a Series on Protecting and 1 8
Strengthening Social Security, June 9...
Fifth in a Series on Protecting and 1 6
Strengthening Social Security, June 14..
Sixth in a Series on Protecting and 1 8
Strengthening Social Security, June 16..
Seventh in a Series on Protecting and 1 8
Strengthening Social Security, June 21..
Eighth in a Series on Protecting and 1 8
Strengthening Social Security, June 23..
Commissioner of Social Security's 1 7
Proposed Improvements to the Disability
Determination Process, September 27--
Jointly with Subcommittee on Human
Resources...............................
First in Series on Social Security Number 1 2
High-Risk Issues, November 11...........
2006:
Second in Series on Social Security 1 5
Number High-Risk Issues, February 16--
Jointly with Subcommittee on Oversight..
Third in Series on Social Security Number 1 3
High-Risk Issues, March 2...............
Fourth in Series on Social Security 1 6
Number High-Risk Issues, March 16.......
Fifth in Series on Social Security Number 1 9
High-Risk Issues, March 30..............
Social Security Service Delivery 1 1
Challenges, May 11......................
Social Security's Improved Disability 1 8
Determination Process, June 15..........
--------------------------
Total................................ 16 114
==========================
SUBCOMMITTEE ON HUMAN RESOURCES
2005:
Welfare Reform Reauthorization Proposals, 1 12
February 10.............................
Protections for Foster Children Enrolled 1 6
in Clinical Trials, May 18..............
Federal Foster Care Financing, June 9.... 1 4
Implementation of the SUTA Dumping 1 6
Prevention Act of 2004, June 14.........
Welfare and Work Data, July 14........... 1 1
Commissioner of Social Security's 1 7
Proposed Improvements to the Disability
Determination Process, September 27--
Jointly with Subcommittee on Social
Security................................
2006:
Hearing Regarding New Research on 1 1
Unemployment Benefit Recipients, March
15......................................
The Use of Technology to Improve Public 1 5
Benefit Programs, April 5...............
Unemployment Compensation Aspects of U.S. 1 7
Department of Labor Fiscal Year 2007
Budget, May 4...........................
Hearing to Review Proposals to Improve 1 13
Child Protective Services, May 23.......
--------------------------
Total................................ 10 62
==========================
SUBCOMMITTEE ON SELECT REVENUE MEASURES
2005:
The President's Proposal for Single- 1 6
Employer Pension Funding Reform, March 8
Tax Credits for Electricity Production 1 7
from Renewable Sources, May 24..........
Funding Rules for Multiemployer Defined 1 5
Benefit Plans in H.R. 2830, the
``Pension Protection Act of 2005'', June
28......................................
Member Proposals for Tax Reform, July 28. 1 7
Member Proposals on Tax Issues Introduced 1 20
in the 109th Congress, November 16......
2006:
The Use of Tax-Preferred Bond Financing, 1 7
March 16................................
Corporate Tax Reform, May 9.............. 1 8
The Impact of International Tax Reform on 1 6
U.S. Competitiveness, June 22...........
Issues Relating to the Patenting of Tax 1 5
Advice, July 13.........................
Member Proposals on Tax Issues Introduced 1 21
in the 109th Congress, September 26.....
--------------------------
Total................................ 10 92
------------------------------------------------------------------------
As the foregoing statistics indicate, during the 109th
Congress the full Committee and its six Subcommittees held
public hearings aggregating a grand total of 89 days, during
which time 579 witnesses testified. There was one field
hearing, held by the Subcommittee on Health in Oak Creek,
Wisconsin.
In addition, written comments were printed after having
been requested and received by the Full Committee on H.R. 3376,
the ``Tax Technical Corrections Act of 2005'', and H.R. 6264,
the ``Tax Technical Corrections Act of 2006''; and the
Subcommittee on Trade on Technical Corrections to U.S. Trade
Laws and Miscellaneous Duty Suspension Bills.
C. Markup Sessions
With respect to markup or business sessions during the
109th Congress, the full Committee and its six Subcommittees
were also very actively engaged. The full Committee held such
sessions on 21 working days, usually both morning and afternoon
sessions, and the Subcommittees an aggregate of 8 working days,
making a grand total of 29 working days of markup or business
sessions for the full Committee and its Subcommittees during
the 109th Congress.
D. Number and Final Status of Bills Reported From the Committee on Ways
and Means in the 109th Congress
During the 109th Congress, the Committee reported to the
House a total of 13 bills; 10 favorably, 2 adversely, and 1
without recommendation. There were 69 bills containing
provisions within the purview of the Committee that were passed
by the House; 44 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 109th 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 1801 to 1805, 1827.
Republican.
Joseph Clay......................... Pennsylvania........... Jeffersonian 1805 to 1807.
Republican.
George W. Campbell.................. Tennessee.............. Jeffersonian 1807 to 1809.
Republican.
John W. Eppes....................... Virginia............... Jeffersonian 1809 to 1811.
Republican.
Ezekiel Bacon....................... Massachusetts.......... Jeffersonian 1811 to 1812.
Republican.
Langdon Cheves...................... South Carolina......... Jeffersonian 1812 to 1813.
Republican.
John W. Eppes....................... Virginia............... Jeffersonian 1813 to 1815.
Republican.
William Lowndes..................... South Carolina......... Jeffersonian 1815 to 1818.
Republican.
Samuel Smith........................ Maryland............... Jeffersonian 1818 to 1822.
Republican.
Louis McLane........................ Delaware............... Jeffersonian 1822 to 1827.
Republican.
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............ 2001 to 2007.
----------------------------------------------------------------------------------------------------------------
B. Tables Showing Past Membership of the Committee
1. MEMBERS OF THE COMMITTEE ON WAYS AND MEANS FROM THE 1ST THROUGH THE
109TH CONGRESS, BY STATE
[Beginning with the 104th Congress, Intra-Congress Committee Membership
changes are footnoted]
------------------------------------------------------------------------
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.............................. 105-109
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........................... 97-108 \4\
William M. Thomas.......................... 98-109
Wally Herger............................... 103-
Xavier Becerra............................. 105-
Mike Thompson.............................. 109-
Devin Nunes................................ 109-\6\
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.............................. 106-108
Bob Beauprez............................... 109
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........................... 101-109
John B. Larson............................. 109-
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........................... 100-109
Karen L. Thurman........................... 105-107
Mark Foley................................. 104-109 \8\
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................................ 4
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................................ 104-108
John Linder................................ 109-
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............................ 94-108
Marty Russo................................ 96-102
Mel Reynolds............................... 103
Jerry Weller............................... 105-
Rahm Emanuel............................... 109-
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
Chris Chocola.............................. 109
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................................. 104-109
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.................................. 106-
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....................... \7\ 103, 105-109
Jim McCrery................................ 103-
Jimmy Hayes................................ \1\ 104
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......................... 101-109
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
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............................... 103-108
Thomas M. Reynolds......................... 109-
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................................ \5\ 104-109
Stephanie Tubbs Jones...................... 108-
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-
Melissa A. Hart............................ 109
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-
Max Sandlin................................ 108
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
Eric Cantor................................ 108-
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.............................. 104-108
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.......................... 103-108
Paul Ryan.................................. 107-
------------------------------------------------------------------------
1. Appointed January 25, 1996.
2. Appointed January 25, 1996.
3. Appointed July 10, 1995.
4. Reelected to the 109th Congress; died January 1, 2005.
5. Resigned April 29, 2005.
6. Appointed May 5, 2005.
7. Pursuant to H. Res. 872, removed June 16, 2006.
8. Resigned September 29, 2006.
2. COMMITTEE MEMBERSHIP, 109TH CONGRESS
Committee on Ways and Means
one hundred ninth congress
BILL THOMAS, California, Chairman
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut FORTNEY PETE STARK, California
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
ROB PORTMAN, Ohio \1\ WILLIAM J. JEFFERSON, Louisiana
PHIL ENGLISH, Pennsylvania \2\
J.D. HAYWORTH, Arizona JOHN S. TANNER, Tennessee
JERRY WELLER, Illinois XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri LLOYD DOGGETT, Texas
RON LEWIS, Kentucky EARL POMEROY, North Dakota
MARK FOLEY, Florida \3\ STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas MIKE THOMPSON, California
THOMAS M. REYNOLDS, New York JOHN B. LARSON, Connecticut
PAUL RYAN, Wisconsin RAHM EMANUEL, Illinois
ERIC CANTOR, Virginia
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California \4\
----------
\1\ Resigned April 29, 2005.
\2\ Pursuant to H. Res. 872, removed June 16, 2006.
\3\ Resigned September 29, 2006.
\4\ Appointed May 5, 2005.