[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (2000-2001, Book III)]
[October 25, 2000]
[Pages 2328-2329]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 2328]]


Letter to Congressional Leaders on Bipartisan Tax Cut Legislation
October 25, 2000

Dear Mr. Speaker:  (Dear Mr. Leader:)
    We are well beyond the time when Congress should have finished its 
work, with many of our most important issues still left unresolved. It 
is crucial that we now take all possible steps to find common ground.
    In that spirit, I would like to put forward a consensus tax offer to 
help resolve the impasse on taxes. This offer does not contain 
everything that my Administration and Congressional Democrats would 
prefer; nor does it contain all that Congressional Republicans hope to 
see. Rather, it recognizes that both sides need to give a little in 
order to accomplish bipartisan tax legislation this year and that we 
should keep the overall tax cut size to an amount that ensures we 
continue on our path of debt reduction and fiscal discipline.
    First, we can raise the minimum wage without eroding traditional 
worker protections, while at the same time providing reasonable and 
targeted tax relief for small businesses. Accordingly, in exchange for 
my proposed minimum wage increase, I would accept the core elements of 
Speaker Hastert's offer on a small 
business tax package, costing approximately $30 billion over 10 years, 
provided that the FLSA and FUTA provisions are eliminated, the welfare-
to-work tax credit is extended, and modifications are made to the meals 
and entertainment deduction and amortization of reforestation expenses. 
I discuss your health care proposal later in this letter.
    Second, it is essential that the Labor/HHS bill include the Rangel/
Johnson proposal to build and modernize 6000 schools through $24.8 
billion in school construction financing, costing $8.5 billion over 10 
years. Considering the estimated need for $125 billion to meet our 
nation's demand for safe and modern schools, this proposal is the least 
we should do for our children.
    Third, the offer includes pension legislation adopted by the House 
and Senate, costing about $50-60 billion over 10 years, provided that 
certain modifications that the Treasury Department has discussed with 
the tax-writing committees are made to ensure that employer-provided 
pensions for workers are not harmed, to provide meaningful protections 
for workers affected by cash balance conversions, and to provide 
progressive savings incentives for low- and moderate-income workers.
    Fourth, the package includes the tax and other incentives from the 
bipartisan New Markets/Community Renewal legislation, at a cost of about 
$25 billion over 10 years, with some changes that we have previously 
discussed and other associated items upon which we can agree. This will 
be an historic commitment to expand the promise of free enterprise and 
entreprenuership to our nation's poor and underserved urban and rural 
areas.
    It is also important that we provide the bipartisan credit for 
vaccine research and purchases, which will save lives and advance public 
health, costing about $1.5 billion over 10 years.
    Finally, it is essential for our commitment to economic growth to 
include the replacement of the Foreign Sales Corporation regime, which 
has passed the House and Senate with broad bipartisan support, costing 
about $4.5 billion over 10 years.
    I believe the package I have outlined above can be the basis for 
bipartisan consensus on a tax package.
    While Congress has failed to send me a strong, enforceable Patients' 
Bill of Rights and a voluntary Medicare prescription drug plan for all 
seniors, I believe it is possible to forge a bipartisan agreement that 
would expand health care coverage for uninsured working Americans. The 
best way to do this is through the FamilyCare plan that builds on the 
successful Children's Health Insurance Program and expands affordable 
insurance to over four million parents. A deduction for the purchase of 
private health insurance in the individual nongroup market is an 
inefficient and costly way to do coverage, is far less equitable than 
other options that use refundable tax credits, and could lead to private 
employers dropping health coverage. However, in the spirit of 
bipartisanship and breaking gridlock, I propose that your deduction be 
modified to a credit with necessary consumer protections in the 
individual insurance markets and that the credit be coupled with the 
bipartisan FamilyCare proposal.
    I further believe we should find a common agreement to ease the 
burden of long-term care

[[Page 2329]]

on American families. The best means to accomplish this goal is through 
our proposal to provide a $3,000 tax credit for people with long-term 
care needs or the families who care for them. This tax credit would 
provide immediate assistance to those burdened by these long-term care 
costs today. While I cannot support your proposal to turn this into a 
deduction, on grounds of both equity and effectiveness, if you are 
willing to support our $3,000 tax credit, I would be willing to agree to 
your proposal to provide an enhanced deduction for the purchase of 
private long-term care insurance provided there are appropriate consumer 
protections. This bipartisan, long-term care package has already been 
endorsed by the AARP, the Alzheimer's Association, and the Health 
Insurance Association of America.
    In the spirit of compromise, I believe we can work together quickly 
to pass this balanced legislation that I can sign into law and that can 
benefit the American people.
         Sincerely,

                                                      William J. Clinton

Note: Letters were sent to J. Dennis Hastert, Speaker of the House of 
Representatives, and Trent Lott, majority leader of the Senate. An 
original was not available for verification of the content of this 
letter.