Michael Enzi

Mr. ENZI

Mr. ENZI. Mr. President, I congratulate the chairman of the Finance Committee and the ranking member of the Finance Committee for the outstanding work they have done together through this week to bring together a bill that could have bipartisan support in the Senate. I particularly thank Senator Roth for the depth of understanding he has on tax issues, the way he has worked across the aisle, the way he has worked through such a variety of measures. There were over 126 amendments we have just done. He understood and worked through and negotiated those into a package that I hope will be accepted by the House and signed by the President. As the accountant in the Senate, I have been fascinated by the debate we have had this week. I volunteered to serve late a couple of nights. For us accountants, what we have seen here this week has been live entertainment--some of the finest stuff you can see on television. I know my fellow accountants across the Nation have been watching. While we did not get the simplification we would have liked to have had, and that simplification is necessary for the American people, we have gotten some very exciting, necessary provisions, some provisions where all Americans taxpayer will receive back part of the overpayment they paid in. We have made a dent in the death taxes. We fixed the marriage penalty--eventually, with a start immediately, and a myriad of other provisions in there that will affect the lives of literally every person in the United States. I thank the chairman of the committee who has been a part of the last great tax relief that was done as well as this great tax relief. I thank the chairman and my colleagues who worked on and supported this measure. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I rise in support of Senator Abraham's Social Security lockbox amendment to the Taxpayer Refund Act. This is the third time the Senate has considered this language and I believe it is appropriate that we take up this matter during the debate on the returning the non-Social Security surplus for tax cuts. This amendment should put an end once and for all to the rhetoric about raiding the Social Security trust fund to provide tax cuts. By passing this amendment, the Social Security surplus will be protected. Congress has the responsibility to create a firewall between the Social Security surplus and the discretionary surplus to ensure that we can meet the future needs of retirees. The Social Security surplus is spoken for and Congress must take steps to ensure that the money is protected and ready for the future. The source of the surplus is a rising inflow of Social Security payroll taxes. This is money that comes out of the paycheck of every working American who has been paying into the system and we deserve to give them some assurance that the money will be there when they retire. Under the current budget rules, this revenue is treated like revenue from another source--it is put into the general fund and then spent. The lockbox would capture the difference between the inflows to the Social Security trust fund and the payment of benefits to current retirees--reserving it for the Social Security program and helping to guarantee benefits for future retirees. The amendment that we are debating tonight also prohibits transfers between the general fund and Social Security. That is an important provision, it prevents the president and Congress from playing hide the ball and shifting money from the Social Security trust fund to the general fund and replacing that money with IOUs. An IOU in the Social Security Trust Fund is an obligation of the United States Government, it is a debt that we must pay back. Where is that money going to come from? We cannot repay an IOU with an IOU. We must hold on the Social Security surplus in a budgetary lockbox and protect it. The Social Security lockbox will also protect the Social Security surplus from wasteful spending and ensure that the money will be there to fulfill future obligations. Just as corporations are prohibited from spending their pension funds on regular business expenses, Congress should have the same restrictions on the Social Security surplus. If company executives handled pension funds like the current use of Social Security the executives would be in jail. The temptation to go back to the old tax and spending ways is too great if Congress has access to a growing pot of money. Congress must not go back to the old spending rules. Just because we have a surplus does not mean hat the battle has been won. It means that we must continue to be watchful and ensure that the surplus is used wisely. One of the attacks we have heard from the White House and the Democrats is that the we should not refund American's hard-earned money to them because we still have an enormous federal debt. I find this argument astonishing given the spending appetites of many on the other side of the aisle. There is nothing quite like a good tax cut to turn a tax-and-spender into a deficit hawk. While I fear this interest in retiring the national debt may be short-lived metamorphosis, I welcome the interest of my colleagues from the other side of the aisle in fiscal responsibility. In fact, I would invite them to join me as a cosponsor of Senator Alldard's bill to retire the entire national debt over a 30-year period. I believe that debt reduction is consistent with a tax cut. We need to pay off our debt obligations and trim the allowance of the federal government by returning some of the taxpayers overpayment to them. The lock-box amendment furthers this goal of debt reduction. This amendment includes higher debt reduction provisions than previous lock- box proposals. As the surplus has continued to grow Senator Abraham has moved the bar higher. The amendment requires more debt reduction as the surplus grows and I believe the American people expect that. Debt reduction creates a ripple effect throughout the economy in the form of lower interest rates for home mortgages or car loans or student loans. The time has come for the White House and my colleagues on the other side of the aisle to finally provide protection for the Social Security program. Congress must not continue to pay lip service to the concept of preserving the Social Security surplus. We must take the bold steps necessary to ensure that the program is around for the long term. We must not use long term funds to satisfy short term wishes. I urge may colleagues to join me in supporting this important in the Taxpayer Refund Act of 1999. I thank the Chair and yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be granted permission to meet to mark up S. 1090, the Superfund Program Completion Act of 1999, Tuesday, July 27, 9:30 a.m., Hearing Room (SD-406).

Mr. ENZI. Mr. President, I ask unanimous consent that the Subcommittee on Forests & Public Land Management of the Committee on Energy and Natural Resources be granted permission to meet during the session of the Senate on Tuesday, July 27, for purposes of conducting a subcommittee hearing which is scheduled to begin at 2:30 p.m. The purpose of this hearing is to receive testimony on S. 439, a bill to amend the National Forest & Public Land of Nevada Enhancement Act of 1988 to adjust the boundary of the Toiyabe National Forest, Nevada, S. 719, a bill to provide for the orderly disposal of certain Federal land in the State of Nevada and for the acquisition of environmentally sensitive land in the State, and for other purposes; S. 930, a bill to provide for the sale of certain public land in the Ivanpah Valley, Nevada, to the Clark County, Nevada, Department of Aviation, S. 1030, a bill to provide that the conveyance by the Bureau of Land Management of the surface estate to certain land in the State of Wyoming in exchange for certain private land will not result in the removal of the land from operation of the mining laws; S. 1288, a bill to provide incentives for collaborative forest restoration projects on National Forest System and other public lands in New Mexico, and for other purposes; and S. 1374, a bill to authorize the development and maintenance of a multiagency campus project in the town of Jackson, Wyoming.

Mr. ENZI. Mr. President, I ask unanimous consent that the communications subcommittee of the Senate Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, July 27, 1999, at 9:30 a.m. on privacy on the Internet.

Mr. ENZI. Mr. President, I ask unanimous consent that the Subcommittee on African Affairs be authorized to meet during the session of the Senate on Tuesday, July 27, 1999 at 2:15 p.m. to hold a roundtable.

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet for a hearing re Oversight of the Criminal Division of the Department of Justice, during the session of the Senate on Tuesday, July 27, 1999, at 2:00 p.m., in SD 628.

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on Health, Labor, and Pensions be authorized to meet for a hearing on ``Innovations in Child Care'' during the session of the Senate on Tuesday, July 27, 1999, at 10:00 a.m.

Mr. ENZI. Mr. President, the Finance Committee requests unanimous consent to conduct a hearing on Tuesday, July 27, 1999 beginning at 2:30 p.m. in room 215 Dirksen.

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry, be allowed to meet during the session of the Senate on Tuesday, July 27, 1999. The purpose of this meeting will be to discuss consolidation and anti-trust issues in agricultural business.

Mr. ENZI

Mr. ENZI. Reserving the right to object, our side hasn't had 1 minute of debate on this; the other side has used up 45 minutes.

Mr. ENZI

Mr. ENZI. Mr. President, I thank the Senator from South Carolina for his comments. As the accountant in the Senate, I appreciate when others join in the debate about the accounting issue, that if there is a surplus, why is the national debt going up? It is a very simple test. It is printed in the Record. It is our duty to be sure there is good accounting around here; that we aren't keeping two sets of books; that we aren't borrowing the best of each world. The articles mentioned, I point out, said everybody is involved in this. The President is even accepting the best of both worlds so that things can be done this year rather than future years when a more accurate surplus shows up. The best anybody is estimating now is $3 trillion in surplus. This is supposed to be a true surplus after Social Security. We are almost $6 trillion in debt. Even if all the surplus went to debt, we would still be $3 trillion in debt. That is a lot of money. However, what we are talking about today isn't whether it is true surplus or not. We are not talking about spending down the national debt. We are talking about spending versus tax relief. Taking away from tax relief by the Democrats isn't with the intent of paying down the national debt. It is to put the money into new programs. We already have programs not adequately funded in this country. We have programs we have dedicated ourselves to in the past that are not adequately funded. We keep hearing ideas from the other side. We all have ideas about how to spend our money. We hear the ideas for new spending programs, which we will also inadequately fund. However, it is spending versus tax relief. If Members are confused, it is confusion in the rhetoric just heard: spending versus tax relief. We are saying there will have been a true overpayment of $3 trillion. That is an overpayment of your tax money. Do you want that spent on new programs, or do you want to get some of it back? That is the issue. If we are truly talking about paying down the national debt--Senator Allard and I have a bill that calls for paying off that national debt. It does not call for just paying down the national debt, but it calls for paying off the national debt over a 30-year period just as you pay a house mortgage. We are all familiar with that. It has been talked about on this floor this morning. It would pay it down like a house mortgage with 30 years of payments. How do we do that? We take $30 billion of that a year, plus the interest we save by paying down the debt, and we pay it off over a 30- year period. It does not have all the pain everybody talks about, but it is something we owe to future generations. It was not the future generations who spent the money; it was us. We have an obligation to start the payments. We are buying a house for future generations, and, yes, they will have to make some of the payments on it because it extends over 30 years. But we can pay off the national debt, and we can do it and still have money to do some of the other things. There is a bill that will put that on 30-year payments. I hope the people will pay a little bit more attention to it while we are touting paying off the national debt. That should be an important factor for us. That is not what the debate is about. The debate is about spending versus paying back overpayment of taxes. I listened to these 45 minutes of speeches that preceded me, and it appears to me the Democrat definition of wealthy is anyone who pays taxes: If you pay taxes, you ought not get any back; we just have to worry about the poor. Everybody in this country gets something from the Government-- everybody. As we look at the other people, sometimes it appears as if they are getting more, but everybody gets something from the Government. We are in a situation in this country where almost half the people do not pay taxes. When that slips over half in a democracy, in a republic where we vote for our elected officials, what will be the sole source, the sole reason, for that vote? Whether we pay taxes or not. There will always be some paying taxes, and those who pay the taxes when there is an overpayment ought to receive some of their money back. The President has been saying he wants to save Social Security first, that he wants to extend the life of Medicare second, and let me--it is a little confusing what comes third; I think it is spending and then tax relief. I have listened to two State of the Union speeches where the message was: Save Social Security first. I am still waiting for the plan, a true plan. I have seen the plan where money is taken from Social Security and put into the trust fund and then a check is written for spending, and all the trust fund winds up with is IOUs. That is the way it has been, it is the way it is, and it is the way the President wants it to be. You can take that money and, instead of putting it back into regular spending, you can put it back into Social Security. This is the greatest pyramid scheme that has ever happened. You can show where you get that trust fund up a couple trillions of dollars, and it is just by spending the money in the trust fund and putting it back in again. It is the same money being counted time after time. We cannot put up with that. That is not true accounting. That is what we have been talking about this morning. That does not save Social Security. We do have a crisis coming up in Social Security. There are at least five plans on Social Security. The best of each of those plans can be combined into one, and we can save Social Security first. Medicare is extremely important. There are a lot of people relying on it. Do my colleagues know what the biggest debate in Medicare is these days? How we can spend more money, how we can include more people, include more benefits. And we are still leaving those people who are really counting on Medicare dangling. We have a trust fund that we are spending. It is revolving, too. We have to quit doing the IOUs. There is something else that is a little misleading on this tax policy. This is not a Republican plan; this is a bipartisan plan which passed out of the Finance Committee. If my colleagues will check the Washington Post that everybody seems so intent on quoting this morning, they will find a guest editorial by Bob Kerrey who explains why the tax relief package is important and why he voted for the tax relief package. It is a bit more complicated than anything I am interested in, but every Senator does not get his own way on a tax package, and I am willing to recognize that. Again, we need to save Social Security, we need to strengthen Medicare, we need to take care of debt reduction, and I have already suggested a way that might be done. There is a bill that will do that relatively painlessly over a 30-year period. I do hope that, instead of going into a whole bunch of new spending programs, some of which are very new and not well thought out, we will look at tax relief for every American taxpayer as the money is available, and that is giving a tax break to those who are paying the tax. I also want to talk about small business and individual death relief. It is a big issue in my part of the country. Most of Wyoming is small businesses. Those small businesses are sometimes retailers, sometimes manufacturing, quite often they are ranches and farms. Let me tell you what happens when the head of household dies. The IRS estimates the value of his property--estimates it. I have not heard anybody saying that those estimates are low. They estimate the value of the property, and that family sells off part of the land or all of it to pay that tax debt. If one sells off a part of a ranch or a farm, quite often what they are left with is not economically viable. In fact, in the current economic situation there is a lot of question about the economic viability of the future of our family farms and ranches. There is tremendous concern for that. We also have this death tax we impose by IRS estimates at the time of death. If I were involved in the Finance Committee final decisions on these things, the way I would work that is not to have an estimate at the time of death. Instead, I would have the real value at the time there is any sale. If that stays in the family, it keeps the same basis it always had and they do not have to estimate it. When the property is sold, when the business is sold, you are not eliminating an economically viable business at that point in time. At that point in time, you are just collecting the revenues for a true value on a sale. There are other ways that can be enhanced, and I hope in an incremental way they will be. I see the Senator from Texas is here. I have joined her in working on marriage tax penalty relief, a grossly unfair situation in the United States. We are not putting our tax policy where our mouth is. We are saying we want stronger families in this country, and then we are penalizing marriage. We cannot have that. There are a number of changes that need to be made in our tax policy. When I came here, I was very naive. I anticipated that Senators sat down in little groups and talked about policy like this and then crossed outlines and added words and came up with bills on which people agreed. I am a little disappointed in how much cross-communication there is here. I congratulate the Finance Committee for the work they did on this tax package. It is a bipartisan tax package. I hope people will work to improve it, that they will work not only on the Senate side but they will work on the other side of this building. Often it looks to me as if we have more conflicts between the House and Senate than we have between Democrats and Republicans. When one is listening to the rhetoric on whether we are going to spend, which is the reason for not doing tax relief, or do tax relief, pay attention to the debate, and, yes, my colleagues will hear some dissension among the Republicans, probably because we understand taxes and want to come up with the best possible plan, the best possible way to deal with any overpayment that comes up. I thank the Chair and yield the floor. Mrs. HUTCHISON addressed the Chair.

Mr. ENZI

Mr. ENZI. I would love to work with you on that, but right now the big ones have the easier accounting system.

Mr. ENZI. I send an amendment to the desk.

Mr. ENZI. I ask unanimous consent reading of the amendment be dispensed with.

Mr. ENZI. Mr. President, I rise to offer an amendment to remove an unnecessary burdensome recordkeeping requirement on local telephone companies. In 1935, the Federal Communications Commission developed an accounting system known as a uniform system of accounts to ensure the Commission had access to financial data used by AT&T to set local phone rates. This system of accounting requires that companies maintain detailed records and appreciate every asset they purchase, from paper clips to trucks. According to depreciation schedules that each company negotiates with the FCC, no other entity in the Nation has to do that. I have seen some of these schedules. They require companies to depreciate assets over longer periods of time than either the Internal Revenue Service or the Securities and Exchange Commission. They require them to depreciate things that no other business has to depreciate. Many of these assets are high-technology items such as digital switches or fiber-optic cable that are often obsolete in a very short period of time. However, the FCC requires them to be depreciated over a much longer period of time. This is not limited to depreciation. As an accountant, I happen to know a bit about generally accepted accounting principles. Yet even small businesses under the IRS have a dollar threshold over which they amortize assets--usually $25,000. For purchases under $25,000, the company would simply expense the item, meaning that they could charge the cost of the asset against the current year's revenues. Under the FCC system, local telephone companies are required to amortize every asset they buy, from office supplies to digital switching equipment. There is no dollar value threshold for local companies. They have to keep detailed records and record assets in accounts specified by the FCC; negotiated individually with the FCC. These companies already maintain their records according to generally accepted accounting principles. Their standard is required by the IRS and FCC. Why should a third agency require companies to keep their books in a manner inconsistent with generally accepted accounting principles? Now that AT&T has been broken up and competition is being allowed to take place, it is time to remove regulatory burdens that do nothing more than impose a requirement on one set of companies that their competitors do not have to comply with, information that is available to the competitors, information in detail available to the competitors, derived at great expense to the local telephone company? The amendment I am proposing would prohibit the FCC from requiring any accounting system other than generally accepted accounting principles for 1 year. This would give companies time to transition to the generally accepted accounting principles--one set of books--and make provisions to take obsolete equipment out of service and change their internal accounting policies to conform with generally accepted accounting principles. This would also save the Government money, since the FCC would not have to maintain as big an Accounting Policy Division to negotiate and enforce these antiquated, detailed depreciation and expense rules. According to the accounting firm of Arthur Anderson, this would save the small local telephone exchange companies--we are talking about the small companies in every State in this Nation--between $200,000 and $1 million a year. This is money that could be spent on bringing advanced services and technology to rural areas or reducing rates. I understand how expensive it is to maintain one set of business records, and anybody in business out there understands that. That is one set of business records according to the generally accepted accounting principles. Just imagine what it costs for two sets of books, and the second set of books has to be negotiated in detail, has to have far more accounts than the other. My amendment would eliminate this expensive requirement on local telephone companies and level the playing field between competitors, particularly with the huge long distance competitors. My amendment is being supported by the United States Telephone Association and its members. The United States Telephone Association represents small rural telephone companies. They believe, as I do, that competition in the local phone market starts when all participants are bound by the same rules. I ask unanimous consent to have printed in the Record a letter from the United States Telephone Association that goes into a bit more detail than I have time, in my allotted 15 minutes, to go into. Commissioner Harold Furchtgott-Roth, who serves on the Federal Communications Commission, made a statement on docket 99-253 that mentions: In today's increasingly competitive telecommunications marketplace, the Commission should be focusing its efforts on transitioning to a more competitive environment. The amount of detailed information and regulatory scrutiny required under our accounting and ARMIS rules is inordinate and should be reduced. I ask that entire letter be printed in the Record.

Mr. ENZI. Mr. President, what we have is an issue where we have a lot of local, small, rural telephone companies who are coming under inordinate additional accounting requirements, additional accounting besides what is required by the other Federal agencies. This information has to be released to the competitors as well. Competitors, the big phone companies, do not have to give the same information to the little companies. So it is time we made this kind of change. I ask for support on the amendment. I yield the floor and reserve the remainder of my time.

Mr. ENZI. Mr. President, I yield 3 minutes to the Senator from Montana.

Mr. ENZI. The Senator from Missouri is absolutely correct. It is like a tax, and it is money that the rural telephone folks are having to pay.

Mr. ENZI. Would you be willing to go with an amendment that would require AT&T and other companies to meet the same requirements as little companies?

Mr. ENZI. The Senator is absolutely correct. We want to increase their competitiveness. We want the people in the rural areas to have the same accounting system, so they have lower costs, so they can pass that on to the consumer.

Mr. ENZI. That is correct. We want the small companies able to do the same kind of accounting as the big companies.

Mr. ENZI. That is correct.

Mr. ENZI. It is a substantial impairment on their ability to be competitive with the big national phone companies.

Mr. ENZI. Mr. President, what we are trying to do is harmonize and unify the accounting system, not eliminate and drastically change it. We are talking about generally accepted accounting principles. This is what the accountants across the United States use day in and day out. We are trying to unify it within the telecommunications industry. One reason you have not heard about this a lot is that we are talking about the small local exchange carriers. We are not talking about the big corporations that have all the lawyers in Washington. We are talking about the little guy out there who is trying to run a business and does not have as much time or expertise to run to Washington or know specifically to whom to take his case. We are talking about small businesses. And we are not talking about small money here. We are talking about them imposing extra regulations which cost them $200,000 to $1 million a year. That is money that could be put into new phone systems or reducing rates. These are the small rural carriers. As far as whether enough data is available, of course, it is available. Corporations, big and small, across this Nation run and report under generally accepted accounting principles. This is not a new system. It is newer than the system we are talking about operating under which was instituted in 1935. In 1935, when it was controlled by a monopoly, there needed to be more detailed accounting. Anything that needs to be accounted can still be accounted. It just has to follow generally accepted accounting principles instead of a multiple process of going to the FCC, negotiating into some new accounts which already number in the neighborhood of 500, and coming in with the output that is needed to make the decision, rather than a myriad of information. How would you like to depreciate paper clips? It has gotten ridiculous. Those things have to be taken into consideration. There is no threshold of expenses. There have been a lot of changes in the communications industry. One of them is divestiture of AT&T. There is a whole list of things that have happened. A big one is the passage in 1996 of the Telecommunications Act, of which the Senator was speaking, and the issuance of the resulting FCC orders implementing various sections of the act, including proceedings to implement local competition and interconnection, as well as universal service, access charge, and price cap reform. There is not anything under generally accepted accounting principles that will not get the data that is needed to handle any of those issues. All of the service providers, with the exception of incumbent local exchange companies, have flexibility. The others already have the flexibility. AT&T has the flexibility to provide services priced on a competitive basis at rates dictated by the marketplace. These service providers are not subject to the accounting and recordkeeping rules contained in part 32--the big companies are not subject to that--and associated monitoring and enforcement activities but are simply required to follow GAAP in producing their external reports. Prices no longer bear a direct relationship to cost.